iRhythm Technologies, Inc.

Previous wording

We are a leading digital healthcare company that creates trusted solutions that detect, predict, and prevent disease. Our principal business is the design, development, and commercialization of device-based technology to provide remote cardiac monitoring services that we believe allow clinicians to diagnose certain arrhythmias quicker and with greater efficiency than other services that rely on traditional technology.

Current wording

We are a leading digital healthcare company that creates trusted solutions that detect, predict, and prevent disease. Our principal business is the design, development, and commercialization of device-based technology to provide ambulatory cardiac monitoring services that we believe allow clinicians to diagnose certain arrhythmias quicker and with greater efficiency than other services that rely on traditional technology.

Previous wording

Each Zio System combines an FDA-cleared, CE-marked and Japan PMDA-approved wire-free, patch-based, 14-day wearable biosensor that continuously records ECG data with a proprietary, FDA-cleared, CE-marked, and Japan PMDA-approved cloud-based data analytic software to help physicians monitor patients and diagnose arrhythmias. Since receiving FDA clearance, we have provided the Zio Services to over eight million patients and have collected over 2 billion hours of curated heartbeat data.

Current wording

Each Zio System combines an FDA-cleared, CE-marked and Japan PMDA-approved wire-free, patch-based, 14-day wearable biosensor that continuously records ECG data with a proprietary, FDA-cleared, CE-marked, and Japan PMDA-approved cloud-based data analytic software to help physicians monitor patients and diagnose arrhythmias. Since receiving FDA clearance, we have provided the iRhythm Services to over eight million patients and have collected over 2 billion hours of curated heartbeat data.

Previous wording

Since first receiving clearance from FDA for our technology in 2009, we have supported physician and patient use of our technology and provided ambulatory cardiac monitoring services from our Medicare-enrolled IDTFs and with our qualified technicians. We have provided our Zio Services using our Zio Systems.

Current wording

Since first receiving clearance from FDA for our technology in 2009, we have supported physician and patient use of our technology and provided ambulatory cardiac monitoring services from our Medicare-enrolled IDTFs and with our qualified technicians. We have provided our iRhythm Services using our Zio Systems.

Previous wording

We receive revenue for the Zio Services primarily from third-party payors, which include contracted third-party payors and CMS. The remainder of our revenue comes from healthcare institutions, which are typically hospitals or private physician practices, who purchase the Zio Services from us directly. We rely on third-party billing partners to submit patient claims and collect from commercial payors, certain government agencies, and patients.

Current wording

We receive revenue for the iRhythm Services primarily from third-party payors, which include contracted third-party payors and CMS. The remainder of our revenue comes from healthcare institutions, which are typically hospitals or private physician practices, who purchase the iRhythm Services from us directly. We rely on third-party billing partners to submit patient claims and collect from commercial payors, certain government agencies, and patients.

Previous wording

The following are Zio Services shown as a percentage of revenue:

Current wording

The following are iRhythm Services shown as a percentage of revenue:

Previous wording

We define Adjusted EBITDA for a particular period as net loss before income tax provision, depreciation and amortization, interest expense, interest income and as further adjusted for stock-based compensation expense, changes in fair value of strategic investments, impairment and restructuring charges, business transformation costs, certain intellectual property litigation expenses and settlements, and loss on extinguishment of debt. Business transformation costs include costs associated with professional services, employee termination and relocation, third-party merger and acquisition, integration, and other costs to augment and restructure the organization, inclusive of both outsourced and offshore resources. Beginning in the first quarter of 2025, we have excluded third-party attorneys' fees and expenses associated with patent litigation brought against the Company by Welch Allyn, Inc. and Bardy Diagnostics, Inc., subsidiaries of Baxter International, Inc. Factors we considered in arriving at this determination to exclude these patent litigation costs from our Adjusted EBITDA include frequency and complexity of the patent litigation, the counterparty involved, and the expected magnitude of patent litigation costs for this matter.

Current wording

We define Adjusted EBITDA for a particular period as net loss before income tax (benefit) provision, depreciation and amortization, interest expense, and interest income and as further adjusted for stock-based compensation expense, changes in fair value of strategic investments, impairment and restructuring charges, business transformation costs, certain intellectual property litigation expenses and settlements, and loss on extinguishment of debt. Business transformation costs include costs associated with professional services, employee termination and relocation, third-party merger and acquisition, integration, and other costs to augment and restructure the organization, inclusive of both outsourced and offshore resources. Beginning in the first quarter of 2025, we have excluded third-party attorneys' fees and expenses associated with patent litigation brought against the Company by Welch Allyn, Inc. and Bardy Diagnostics, Inc., subsidiaries of Baxter International, Inc. Factors we considered in arriving at this determination to exclude these patent litigation costs from our Adjusted EBITDA include frequency and complexity of the patent litigation, the counterparty involved, and the expected magnitude of patent litigation costs for this matter.

Previous wording

1 Net loss for the three months ended March 31, 2025, includes $0.3 million of acquired in-process research and development expense.

Current wording

1 Net loss for the three and six months ended June 30, 2025, includes $1.7 million and $2.0 million of acquired in-process research and development expense, respectively.

Previous wording

The current macroeconomic environment is impacting our customers, both financially and operationally. Hospitals are experiencing staffing shortages and supply chain issues that could affect their ability to provide patient care. Additionally, hospitals are facing significant financial pressure as supply chain constraints and inflation drive up operating costs, interest rate volatility make access to credit more expensive, and unrealized losses decrease available cash reserves. As a consequence of the financial pressures and decreased profitability, some hospitals have indicated that they are lowering their capital investment plans and tightening their operational budgets. Private and government payers around the world are increasingly challenging the utilization and overall cost charged for medical products and services. The containment of healthcare costs has become a priority of governments on a global basis. Private and government payors may decline to cover and reimburse for claims or portions of claims.Climate-related events, including the increasing frequency of extreme weather events, natural disasters, or other catastrophic events may cause damage or disruption to our domestic or global customers or our operations, which could have an adverse effect on our business, operating results, and financial condition.

Current wording

The current macroeconomic environment is impacting our customers, both financially and operationally. Hospitals are experiencing staffing shortages and supply chain issues that could affect their ability to provide patient care. Additionally, hospitals are facing significant financial pressure as supply chain constraints and inflation drive up operating costs, interest rate volatility make access to credit more expensive, and unrealized losses decrease available cash reserves. As a consequence of the financial pressures and decreased profitability, some hospitals have indicated that they are lowering their capital investment plans and tightening their operational budgets. Private and government payors around the world are increasingly challenging the utilization and overall cost charged for medical products and services. The containment of healthcare costs has become a priority of governments on a global basis. Private and government payors may decline to cover and reimburse for claims or portions of claims.Climate-related events, including the increasing frequency of extreme weather events, natural disasters, or other catastrophic events may cause damage or disruption to our domestic or global customers or our operations, which could have an adverse effect on our business, operating results, and financial condition.

Previous wording

We have adapted our Zio Services to meet the immediate needs of physicians, customers, and patients and significantly increased the utilization of our home enrollment service, which allows patients to receive and wear the single-use Zio patch without going to a healthcare facility.

Current wording

We have adapted our iRhythm Services to meet the immediate needs of physicians, customers, and patients and significantly increased the utilization of our home enrollment service, which allows patients to receive and wear the single-use Zio patch without going to a healthcare facility.

Previous wording

The majority of our revenue is derived from provision of our Zio Services to customers in the United States. We earn revenue from the provision of our Zio Services primarily from contracted third-party payors, CMS, and healthcare institutions. A small percentage of our revenue is from non-contracted third-party payors.

Current wording

The majority of our revenue is derived from provision of our iRhythm Services to customers in the United States. We earn revenue from the provision of our iRhythm Services primarily from contracted third-party payors, CMS, and healthcare institutions. A small percentage of our revenue is from non-contracted third-party payors.

Previous wording

We recognize revenue on an accrual basis based on estimates of the amount that will ultimately be realized, which considers the amount submitted for payment and the amount received. These estimates require significant judgment by management. In determining the amount to accrue for the Zio Services (including a delivered report), we consider factors such as claim payment history from both payors and patient, available reimbursement, including whether there is a contract between us and the payor or healthcare institution and historical amount received for the service, and any current developments or changes that could impact reimbursement and healthcare institution payments.

Current wording

We recognize revenue on an accrual basis based on estimates of the amount that will ultimately be realized, which considers the amount submitted for payment and the amount received. These estimates require significant judgment by management. In determining the amount to accrue for the iRhythm Services (including a delivered report), we consider factors such as claim payment history from both payors and patient, available reimbursement, including whether there is a contract between us and the payor or healthcare institution and historical amount received for the service, and any current developments or changes that could impact reimbursement and healthcare institution payments.

Previous wording

Our gross margin has been and will continue to be affected by a variety of factors, including increased contracting with third-party payors and institutional providers. We have in the past been able to increase our pricing as third-party payors become more familiar with the benefits of the Zio Services and move to contracted pricing arrangements. We expect increases to the cost of revenues due to increases to materials and electronics components pricing, labor rates, shipping rates, amortization of capitalized internal-use software, along with increases in the general level of inflation and potential tariffs on imports (which may complicate and increase costs associated with our supply chain). We expect to partially offset these increases by reduced costs from obtaining volume purchase discounts for our material costs, implementing scan-time algorithms and process improvements, automating manufacturing assembly and packaging, and through software-driven and other workflow enhancements to reduce labor costs. We experienced an improvement in our gross margin from 2023 to 2024, and continue to focus on improving annual gross margins in the future, while navigating through the macroeconomic and supply chain headwinds discussed above that we expect to face.

Current wording

Our gross margin has been and will continue to be affected by a variety of factors, including increased contracting with third-party payors and institutional providers. We have in the past been able to increase our pricing as third-party payors become more familiar with the benefits of the iRhythm Services and move to contracted pricing arrangements. We expect increases to the cost of revenues due to increases to materials and electronics components pricing, labor rates, shipping rates, amortization of capitalized internal-use software, along with increases in the general level of inflation and tariffs on imports (which may complicate and increase costs associated with our supply chain). We expect to partially offset these increases by reduced costs from obtaining volume purchase discounts for our material costs, implementing scan-time algorithms and process improvements, automating manufacturing assembly and packaging, and through software-driven and other workflow enhancements to reduce labor costs. We experienced an improvement in our gross margin from 2023 to 2024, and continue to focus on improving annual gross margins in the future, while navigating through the macroeconomic and supply chain headwinds discussed above that we expect to face.

Previous wording

Our in-process research and development acquired in an asset acquisition for use in research and development activities with no alternative future use is expensed in the unaudited condensed consolidated statements of operations.

Current wording

Our in-process research and development (“IPR&D”) acquired in an asset acquisition for use in research and development activities with no alternative future use is expensed in the unaudited condensed consolidated statements of operations.

Previous wording

Comparison of the Three Months Ended March 31, 2025, and 2024

Current wording

Comparison of the Three and Six Months Ended June 30, 2025, and 2024

Previous wording

Revenue, net increased by $26.7 million, or 20%, to $158.7 million during the three months ended March 31, 2025, as compared to $131.9 million during the three months ended March 31, 2024. The increase in revenue was primarily attributable to an increase in volume of Zio Services resulting from increased demand. In particular, during the first quarter of 2025 Zio AT as a proportion of our total revenue volume grew significantly compared to the prior year primarily as a result of new customer account growth. Offsetting the revenue growth from volume and product mix were higher contractual allowance reserves recognized during the first quarter of 2025, resultant from billing disruptions due to the Change Healthcare cybersecurity incident from the first quarter of 2024, as well as higher payer claims denials. Overall average selling prices for net revenue remained relatively stable period over period.

Current wording

Revenue, net increased by $38.6 million, or 26%, to $186.7 million during the three months ended June 30, 2025, as compared to $148.0 million during the three months ended June 30, 2024. Revenue, net increased by $65.4 million, or 23%, to $345.4 million during the six months ended June 30, 2025, as compared to $280.0 million during the six months ended June 30, 2024. For the three and six months ended June 30, 2025, the increase in revenue was primarily attributable to an increase in volume of iRhythm Services resulting from increased demand. In particular, during the three and six months ended June 30, 2025, Zio AT as a proportion of our total revenue volume grew significantly compared to the prior year primarily as a result of new customer account growth. Offsetting the revenue growth from volume and product mix were higher contractual allowance reserves recognized during the three and six months ended June 30, 2025, resultant from billing disruptions due to the Change Healthcare cybersecurity incident from the first quarter of 2024, as well as higher payer claims denials. Overall average selling prices remained relatively stable period over period.

Previous wording

Cost of revenue increased by $5.0 million, or 11%, to $49.5 million during the three months ended March 31, 2025, as compared to $44.4 million during the three months ended March 31, 2024. The increase in cost of revenue was due to increases in material component costs and headcount-related costs associated with the increase in volume of Zio Services. Additional impacts to cost of revenue include $0.7 million in amortization costs primarily for Zio Monitor PCBAs in conjunction with the ongoing commercial launch of the Zio Monitor System.

Current wording

Cost of revenue increased by $9.3 million, or 21%, to $53.8 million during the three months ended June 30, 2025, as compared to $44.6 million during the three months ended June 30, 2024. Cost of revenue increased by $14.3 million or 16%, to $103.3 million during the six months ended June 30, 2025, as compared to $89.0 million during the six months ended June 30, 2024. For the three and six months ended June 30, 2025, the increase was primarily due to increases in material component costs, amortization costs related to Zio Monitor and Zio AT PCBA, headcount-related costs, and freight costs associated with the increase in volume of iRhythm Services.

Previous wording

Research and development expenses increased by $4.5 million, or 27%, to $21.5 million during three months ended March 31, 2025, as compared to $17.0 million during the three months ended March 31, 2024. The increase in research and development expenses was primarily due to higher employee-related costs (including stock based compensation) supporting ongoing FDA remediation and sustaining activities, product development consulting costs, and further development, enhancement, and functionality of our current and future product offerings.

Current wording

Research and development expenses increased by $1.3 million, or 7%, to $21.0 million during three months ended June 30, 2025, as compared to $19.7 million during the three months ended June 30, 2024. Research and development expenses increased by $5.8 million, or 16%, to $42.5 million during the six months ended June 30, 2025, as compared to $36.7 million during the six months ended June 30, 2024. The increase in research and development expenses for the three and six months ended June 30, 2025 was primarily due to higher employee-related costs which include supporting ongoing FDA remediation and sustaining activities, product development consulting costs, and costs to further development, enhancement, and functionality of our current and future product offerings.

Previous wording

Acquired IPR&D expense was $0.3 million during the three months ended March 31, 2025. The expense was related to the Technology License Agreement (the “License Agreement”) we entered into with BioIntelliSense, Inc. (“BioIS”) during the third quarter of 2024. See Note 7, Commitments and Contingencies, in the notes to our unaudited condensed consolidated financial statements in Part I, Item 1 of this Quarterly Report on Form 10-Q for further details.

Current wording

Acquired IPR&D expense was $1.7 million and $2.0 million during the three and six months ended June 30, 2025, respectively. No costs were incurred during the three and six months ended June 30, 2024. The expense was related to the Technology License Agreement (the “License Agreement”) we entered into with BioIntelliSense, Inc. (“BioIS”) during the third quarter of 2024. During the three and six months ended June 30, 2025, we recognized additional IPR&D expense as a result of recognizing an increase in our contingent consideration liability related to regulatory milestones. See Note 5, Fair Value Measurements, and Note 7, Commitments and Contingencies, in the notes to our unaudited condensed consolidated financial statements in Part I, Item 1 of this Quarterly Report on Form 10-Q for further details.

Previous wording

Selling, general and administrative expenses increased by $11.3 million, or 10%, to $120.0 million during the three months ended March 31, 2025, as compared to $108.7 million during the three months ended March 31, 2024. The increase in selling, general, and administrative expenses was primarily attributable to increases in headcount-related costs (including stock-based compensation), legal and professional fees, and provisions for credit losses, offset by a reduction in claims processing fees. During the three months ended March 31, 2025, we incurred $0.5 million of business transformation costs primarily related to professional fees to support the growth in our operations, which were not incurred during the first quarter of 2024.

Current wording

Selling, general and administrative expenses increased by $19.6 million, or 18%, to $126.4 million during the three months ended June 30, 2025, as compared to $106.8 million during the three months ended June 30, 2024. Selling, general and administrative expenses increased by $30.9 million, or 14%, to $246.3 million during the six months ended June 30, 2025, as compared to $215.4 million during the six months ended June 30, 2024. For the three and six months ended June 30, 2025, the increase in selling, general, and administrative expenses were primarily attributable to increases in headcount-related costs (including stock-based compensation), legal and professional fees, and provisions for credit losses, offset by a reduction in claims processing fees. Additionally, during the three and six months ended June 30, 2025 the Company incurred $3.0 million and $3.8 million, respectively, related to certain intellectual property litigation costs, which were not incurred during the comparable periods in 2024. Business transformation costs for the three and six months ended June 30, 2025 were $0.9 million and $1.4 million, respectively, as compared to $1.3 million for both the three and six months ended June 30, 2024.

Previous wording

Interest income increased by $1.9 million to $4.9 million during the three months ended March 31, 2025, as compared to $3.1 million during the three months ended March 31, 2024. The increase was attributable to higher average invested balances during the three months ended March 31, 2025, as compared to the same period in 2024, primarily as a result of the borrowing under the 2029 Notes in March 2024.

Current wording

Interest income decreased by $1.4 million to $5.3 million during the three months ended June 30, 2025, as compared to $6.7 million during the three months ended June 30, 2024. Interest income increased by $0.5 million to $10.2 million during the six months ended June 30, 2025, as compared to $9.7 million during the six months ended June 30, 2024. The decrease for the three months ended June 30, 2025 is primarily attributable to a lower average invested balance, as compared to the same period in 2024. The increase for the six months ended June 30, 2025 is primarily attributable to higher average invested balances, period over period, with funds obtained through our borrowing under the 2029 Notes in March 2024.

Previous wording

Interest expense increased by $0.4 million to $3.3 million during the three months ended March 31, 2025, as compared to $2.9 million during the three months ended March 31, 2024. The increase in interest expense was primarily attributable to the $661.3 million 2029 Notes borrowed in March 2024.

Current wording

Interest expense remained relatively flat during the three months ended June 30, 2025, as compared to the three months ended June 30, 2024. Interest expense increased by $0.4 million to $6.6 million during the six months ended June 30, 2025, as compared to $6.2 million during the six months ended June 30, 2024. The increase in interest expense during the six months ended June 30, 2025, is primarily attributable to the $661.3 million 2029 Notes borrowed in March 2024.

Previous wording

Other income (expense), net increased by $1.0 million to $0.9 million during the three months ended March 31, 2025, as compared to other income (expense), net of $(0.1) million during the three months ended March 31, 2024. The increase was primarily attributable to the changes in the fair value of our strategic equity investments recognized during the three months ended March 31, 2025.

Current wording

Other income (expense), net increased by $2.6 million to $2.3 million during the three months ended June 30, 2025, as compared to other income (expense), net of $(0.3) million during the three months ended June 30, 2024. Other income (expense), net increased by $3.5 million to $3.1 million during the six months ended June 30, 2025, as compared to $(0.4) million during the six months ended June 30, 2024. The increases were primarily attributable to the changes in the fair value of our strategic loan investments recognized during the three and six months ended June 30, 2025.

Previous wording

Loss on extinguishment of debt was $7.6 million for the three months ended March 31, 2024. The loss was related to the early extinguishment of both the SVB Loan Agreement and the Braidwell Term Loan Facility during the first quarter of 2024. See Note 8, Debt, in the notes to our unaudited condensed consolidated financial statements in Part I, Item 1 of this Quarterly Report on Form 10-Q for details of our financing activities.

Current wording

Loss on extinguishment of debt was $7.6 million for the six months ended June 30, 2024. The loss was related to the early extinguishment of both the SVB Loan Agreement and the Braidwell Term Loan Facility during the first quarter of 2024. See Note 8, Debt, in the notes to our unaudited condensed consolidated financial statements in Part I, Item 1 of this Quarterly Report on Form 10-Q for details of our financing activities.

Previous wording

As of March 31, 2025, we had cash and cash equivalents of $375.3 million, marketable securities of $145.3 million, and accounts receivable, net of $80.6 million.We continuously review our liquidity and anticipated capital requirements in light of the significant uncertainty created by the current macroeconomic environment, including inflation, interest rate volatility, and potential instability in the global banking system. We intend to continue to make investments to support our business, which may require us to engage in equity or debt financings to secure additional funds. During the first quarter of 2024, we experienced a temporary delay in the billing of our contracted and non-contracted payer customers, performed by our third-party claims processing vendor. The delay was due to a cybersecurity incident experienced by Change Healthcare, a division of UnitedHealth Group, in which our third-party vendor did engage for services relating to billing and collections. While we substantially cleared the billing backlog as of the end of the first quarter of 2024, the delay in billing resulted in a temporary delay in our cash collections. We have received the majority of our cash collections from the delayed billings. During the first quarter of 2025, we experienced higher levels of contractual adjustments associated with our gross accounts receivable. Additionally, through our revenue cycle management transformation we have focused our efforts in part to resolve payor claims denials and unpaid portions of patient-responsible balances in a more timely basis.

Current wording

As of June 30, 2025, we had cash and cash equivalents of $309.1 million, marketable securities of $236.4 million, and accounts receivable, net of $82.2 million. We continuously review our liquidity and anticipated capital requirements in light of the significant uncertainty created by the current macroeconomic environment, including inflation, interest rate volatility, and potential instability in the global banking system. We intend to continue to make investments to support our business, which may require us to engage in equity or debt financings to secure additional funds. During the first quarter of 2024, we experienced a temporary delay in the billing of our contracted and non-contracted payer customers, performed by our third-party claims processing vendor. The delay was due to a cybersecurity incident experienced by Change Healthcare, a division of UnitedHealth Group, in which our third-party vendor did engage for services relating to billing and collections. While we substantially cleared the billing backlog as of the end of the first quarter of 2024, the delay in billing resulted in a temporary delay in our cash collections. We have received the majority of our cash collections from the delayed billings. During the first quarter of 2025, we experienced higher levels of contractual adjustments associated with our gross accounts receivable. Additionally, through our revenue cycle management transformation we have focused our efforts in part to resolve payor claims denials and unpaid portions of patient-responsible balances in a more timely basis.

Previous wording

We believe that our current cash, cash equivalents, and marketable securities balances, together with income to be derived from the sales of our Zio Services, will be sufficient to meet our liquidity requirements for at least the next 12 months.

Current wording

We believe that our current cash, cash equivalents, and marketable securities balances, together with income to be derived from the sales of our iRhythm Services, will be sufficient to meet our liquidity requirements for at least the next 12 months.

Previous wording

Under the terms of the Development Agreement with Verily, we agreed to make milestone payments to Verily up to an aggregate of $12.75 million upon achievement of various development and regulatory milestones. We have achieved milestones tied to payments totaling $11.0 million through March 31, 2025, and may make additional milestone payments of $1.75 million, subject to the achievement of specified milestones.

Current wording

Under the terms of the Development Collaboration Agreement dated September 3, 2019, as amended, between us and Verily Life Sciences LLC ("VLS") and Verily Ireland Limited ("VIL"), together known as Verily, we agreed to make milestone payments to Verily up to an aggregate of $12.75 million upon achievement of various development and regulatory milestones. We have achieved milestones tied to payments totaling $11.0 million through June 30, 2025, with additional milestone payments of $1.75 million, subject to the achievement of specified milestones. During the second quarter of 2025, we recorded an impairment charge of $2.5 million associated with capitalized internal-use software in development relating to the Zio Watch with the Company's clinically integrated ZEUS system. We do not intend to commercially launch the Zio Watch. As of June 30, 2025, we are actively engaged with Verily to formally terminate the Development Collaboration Agreement. We continue to expand our product development program into other clinical-grade wearables to detect and characterize arrhythmias while integrating with clinicians' workflows.

Previous wording

Under the terms of the License Agreement, during the third quarter of 2024 we paid BioIS an upfront fee of $15.0 million in cash consideration. In connection with the License Agreement, we also purchased an aggregate of $40.0 million of convertible promissory notes from BioIS of which $20.0 million of the convertible promissory notes (“Milestone Notes”) were designated for satisfaction of the Company's regulatory milestone payment obligations. The Milestone Notes, plus accrued and unpaid interest, if any, shall be cancelled, if outstanding, upon the achievement of the regulatory milestones up through December 31, 2026.

Current wording

Under the terms of the License Agreement, during the third quarter of 2024 we paid BioIS an upfront fee of $15.0 million in cash consideration. In connection with the License Agreement, we also purchased an aggregate of $40.0 million of convertible promissory notes from BioIS of which $20.0 million of the convertible promissory notes (“Milestone Notes”) were designated for satisfaction of the Company's regulatory milestone payment obligations. The Milestone Notes, plus accrued and unpaid interest, if any, shall be cancelled, if outstanding, upon the achievement of the regulatory milestones up through December 31, 2026. In June 2025, BioIS achieved the first of two regulatory milestones. As of July 2025, we are in the process of completing all required contractual conditions in order to cancel $10.0 million in Milestone Notes plus accrued and unpaid interest.

Previous wording

During the three months ended March 31, 2025, cash used in operating activities was $7.9 million, a decrease of $44.1 million, as compared to cash used in operating activities of $52.0 million during the three months ended March 31, 2024. The reduction in cash used in operating activities was primarily attributable to reductions in our net loss driven by our revenue growth, timing of collections associated with our accounts receivable, as well as the timing of payments associated with our accounts payable and accrued liabilities. These reductions in cash used in operating activities were offset by an increase to prepaid expenses and other current assets.

Current wording

During the six months ended June 30, 2025, cash provided by operating activities was $19.8 million, as compared to cash used in operating activities of $40.2 million during the six months ended June 30, 2024. Cash provided by operating activities increased by $60.0 million primarily attributable to reductions in our net loss driven by our revenue growth, timing of collections associated with our accounts receivable, as well as the timing of payments associated with our accounts payable and accrued liabilities. These increases in cash provided by operating activities were offset by an increase to prepaid expenses and other current assets.

Previous wording

During the three months ended March 31, 2025, cash used in investing activities was $38.1 million, an increase of $78.1 million, as compared to cash provided by investing activities of $40.0 million during the three months ended March 31, 2024. The increase in cash used in investing activities was primarily attributable to a net increase in the change in marketable securities of $78.5 million, offset by decrease in purchases of property and equipment of $0.4 million.

Current wording

During the six months ended June 30, 2025, cash used in investing activities was $139.1 million, an increase of $193.6 million, as compared to cash provided by investing activities of $54.5 million during the six months ended June 30, 2024. The increase in cash used in investing activities was primarily attributable to a net increase in the change in marketable securities of $207.0 million, primarily from an increase in the purchases of marketable securities of $167.0 million, as well as an increase in purchases of property and equipment of $1.5 million. Offsetting the increase in the cash used in investing activities was a reduction in purchases of strategic loan investments of $15.0 million, which was associated with strategic loan investment purchases made in BioIS during the three months ended June 30, 2024.

Previous wording

During the three months ended March 31, 2025, cash provided by financing activities was $1.7 million, a decrease of $502.9 million as compared to $504.6 million during the three months ended March 31, 2024. The decrease was primarily attributed to $661.3 million in proceeds from the issuance of our 2029 Notes during the three months ended March 31, 2024. The decrease was offset by $37.8 million associated with the payment of the SVB Loan Agreement and related termination costs, payment of $5.5 million associated with the Braidwell Term Loan Facility debt issuance and termination costs, payment of $16.6 million associated with debt issuance costs for our 2029 Notes, payment of $72.4 million for the purchase of the 2029 Capped Calls, and payment of $25.0 million for the repurchase of shares of our common stock.

Current wording

During the six months ended June 30, 2025, cash provided by financing activities was $8.8 million, a decrease of $499.6 million as compared to $508.4 million during the six months ended June 30, 2024. The decrease was primarily attributed to $661.3 million in proceeds from the issuance of our 2029 Notes during the six months ended June 30, 2024. The decrease was offset by $37.8 million associated with the payment of the SVB Loan Agreement and related termination costs, payment of $5.8 million associated with the Braidwell Term Loan Facility debt issuance and termination costs, payment of $17.2 million associated with debt issuance costs for our 2029 Notes, payment of $72.4 million for the purchase of the 2029 Capped Calls, and payment of $25.0 million for the repurchase of shares of our common stock.

Previous wording

Our net proceeds from the Initial Loan were approximately $35 million, after deducting costs, fees and expenses, and repayment of our existing term loan from Silicon Valley Bank, as discussed below.

Current wording

Our net proceeds from the Initial Loan were approximately $35.0 million, after deducting costs, fees and expenses, and repayment of our existing term loan from Silicon Valley Bank, as discussed below.

Previous wording

Our contractual obligations as of December 31, 2024, are presented in our Annual Report on Form 10-K filed with the SEC on February 20, 2025. There were no significant changes to our lease obligations during the three months ended March 31, 2025. As of March 31, 2025, we had approximately $67.7 million of open purchase orders and contractual obligations in the ordinary course of business, the majority of which are due within one year. See Note 8, Debt, in the notes to our unaudited condensed consolidated financial statements in Part I, Item 1 of this Quarterly Report on Form 10-Q for changes in our debt obligations during the three months ended March 31, 2025.

Current wording

Our contractual obligations as of December 31, 2024, are presented in our Annual Report on Form 10-K filed with the SEC on February 20, 2025. There were no significant changes to our lease obligations during the six months ended June 30, 2025. As of June 30, 2025, we had approximately $85.3 million of open purchase order commitments in the ordinary course of business, the majority of which are due within one year. See Note 8, Debt, in the notes to our unaudited condensed consolidated financial statements in Part I, Item 1 of this Quarterly Report on Form 10-Q for changes in our debt obligations during the six months ended June 30, 2025.

Previous wording

Our significant accounting policies are described in Note 2, Summary of Significant Accounting Policies, to the consolidated financial statements included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024. Updates to our significant accounting policies are described in Note 2, Summary of Significant Accounting Policies, in the notes to our unaudited condensed consolidated financial statements in Part 1, Item 1 of this Quarterly Report on Form 10-Q. The critical accounting estimates that are most critical to a full understanding and evaluation of our reported financial results are described in Management’s Discussion and Analysis of Financial Condition and Results of Operations in Part II, Item 7 of our Annual Report on Form 10-K for the fiscal year ended December 31, 2024. There were no material changes to our critical accounting estimates during the three months ended March 31, 2025.

Current wording

Our significant accounting policies are described in Note 2, Summary of Significant Accounting Policies, to the consolidated financial statements included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024. Updates to our significant accounting policies are described in Note 2, Summary of Significant Accounting Policies, in the notes to our unaudited condensed consolidated financial statements in Part 1, Item 1 of this Quarterly Report on Form 10-Q. The critical accounting estimates that are most critical to a full understanding and evaluation of our reported financial results are described in Management’s Discussion and Analysis of Financial Condition and Results of Operations in Part II, Item 7 of our Annual Report on Form 10-K for the fiscal year ended December 31, 2024. There were no material changes to our critical accounting estimates during the six months ended June 30, 2025.