TANDEM DIABETES CARE INC

Previous wording

Forward-looking statements speak only as of the date they were made and we undertake no obligation to update or review any forward-looking statement because of new information, future events or other factors.

Current wording

Forward-looking statements speak only as of the date they were made, and we undertake no obligation to update or review any forward-looking statement because of new information, future events or other factors except as required by law.

Previous wording

We develop our automated insulin delivery (AID) systems and related technology solutions using a consumer-focused approach. This has resulted in a differentiated device portfolio that provides users with the distinct features and functionality they seek and in a manner that makes the features usable and intuitive. We launched our flagship t:slim pump platform in August 2012, and its next generation, the t:slim X2, in October 2016. The t:slim X2 insulin pump is an all-in-one system that features a slim, sleek, user-friendly color touchscreen and holds up to 300 units of insulin. In 2024, we expanded our portfolio with the commercial availability of Mobi in the United States, starting with iOS control, followed by Android control in March 2026. Mobi is designed for people who seek even greater discretion and flexibility, and includes features such as expanded pump-control from a mobile application, inductive charging, and an on-pump button that can be used for bolusing and other actions. Our insulin pumps offer the option to detach in addition to Bluetooth connectivity and are typically used as part of an AID system.

Current wording

We develop our diabetes technology solutions using a consumer-focused approach. This has resulted in a differentiated insulin pump portfolio, including the t:slim X2 insulin pump (t:slim X2) and Tandem Mobi (Mobi), which provide users with distinct easy-to-use features and functionality. The t:slim X2 is an all-in-one system that features a slim, sleek, user-friendly color touchscreen and holds up to 300 units of insulin. Mobi is designed for people who seek even greater discretion and flexibility, and includes features such as expanded pump-control from a mobile application, inductive charging, and an on-pump button that can be used for bolusing and other actions. Our insulin pumps offer the option to detach in addition to Bluetooth connectivity and are typically used as part of an Automated Insulin Delivery (AID) system.

Previous wording

When used as an AID system, our insulin pumps are integrated with a CGM and powered by our Control-IQ+ technology. Results from four independent pivotal studies using Control-IQ technology have been published in the New England Journal of Medicine since 2019. Control-IQ+ launched in 2025 and is our third and newest AID algorithm, which is available globally and indicated for people ages 2+ (type 1). In the United States, it is also indicated for use in pregnancy complicated by type 1 diabetes as well as people 18+ living with type 2 diabetes. This hybrid closed loop algorithm increases a user's time in targeted glycemic range (70-180 mg/dL) by predicting and helping to prevent the frequency and/or duration of hyperglycemic and/or hypoglycemic events. It is the only predictive algorithm featuring AutoBolus corrective bolusing. Control-IQ+ also offers an easy set-up feature and settings for sleep and exercise activities that adjust the algorithm parameters to better match the different physiological needs during these activities. In addition, in the first quarter of 2026 we offered users the choice of integrating with multiple CGM sensors, such as such as the Dexcom G6 and G7, and the Abbott FreeStyle Libre 2 Plus and FreeStyle Libre 3 Plus.

Current wording

Our insulin pumps are compatible for use with industry-leading CGM sensors from Abbott and Dexcom. When used as an AID system, the CGM sensor data powers our Control-IQ+ technology. Results from four independent pivotal studies using Control-IQ technology have been published in the New England Journal of Medicine since 2019. Control-IQ+ launched in 2025 and is our third and newest AID algorithm, which is available globally and indicated for people ages 2+ (type 1). In the United States, it is also indicated for use in pregnancy complicated by type 1 diabetes as well as people 18+ living with type 2 diabetes. This hybrid closed loop algorithm increases a user’s time in targeted glycemic range (70-180 mg/dL) by predicting and helping to prevent the frequency and/or duration of hyperglycemic and/or hypoglycemic events. It is the only predictive algorithm featuring AutoBolus corrective bolusing. Control-IQ+ also offers an easy set-up feature and settings for sleep and exercise activities that adjust the algorithm parameters to better match the different physiological needs during these activities.

Previous wording

As part of our ecosystem of diabetes solutions, we also offer a web-based data management platform, Tandem Source, that provides users, their caregivers and their healthcare providers with a fast, easy and visual way to display diabetes therapy management data from our pumps and integrated CGMs. Tandem Source also provides us with data that we can analyze to reveal patterns, trends, outcomes and associations that can be used for product development and in the analysis of clinical outcomes data.

Current wording

As part of our ecosystem of diabetes solutions, we also offer a web-based data management platform, Tandem Source, that provides users, their caregivers and their healthcare providers with a fast, easy and visual way to display diabetes therapy management data from our pumps and compatible CGM sensors. Tandem Source also provides us with data that we can analyze to reveal patterns, trends, outcomes and associations that can be used for product development and in the analysis of clinical outcomes data.

Previous wording

In support of this strategy, we continue to drive innovation in our Tandem pump platforms. This includes a novel, extended-wear infusion site option for Mobi that will transform the pump into a tubeless patch device. In addition, our pipeline also includes a next-generation Mobi patch pump that leverages the technology acquired with the Sigi Patch Pump to deliver further miniaturization. Our development efforts also include extended-wear infusion set technology, dual glucose-ketone sensor integration, and algorithm advancement in pursuit of offering fully closed loop technology.

Current wording

In support of this strategy, we continue to drive innovation in our Tandem pump platforms. This includes a novel, extended-wear infusion site option for Mobi that will transform the pump into a tubeless patch device. In the second quarter 2026, we submitted a 510(k) application with the U.S. Food and Drug Administration (FDA) for Tandem Mobi tubeless capability. In addition, our pipeline also includes a next-generation Mobi patch pump that leverages the technology acquired with the Sigi Patch Pump to deliver further miniaturization. Our development efforts also include extended-wear infusion set technology, dual glucose-ketone sensor compatibility, and algorithm advancement in pursuit of offering fully closed loop technology.

Previous wording

Through the medical benefit, pumps were historically reimbursed upfront, separate from the ongoing supply purchases. In 2025, we began contracting for customers to receive their pumps and supplies through a pharmacy benefit with the same upfront reimbursement structure as a medical benefit, but are evolving to an alternative pay-as-you-go reimbursement structure in 2026. This would eliminate the upfront pump reimbursement. With a lower upfront cost, this model is expected to increase adoption of our products by reducing a barrier for patients when evaluating pump therapy. Overall, we anticipate higher revenue in this model over the four-year life of each customer compared to a medical benefit today.

Current wording

Through the medical benefit, pumps were historically reimbursed upfront, separate from the ongoing supply purchases. In 2025, we began contracting for customers to receive their pumps and supplies through a pharmacy benefit with the same upfront reimbursement structure as a medical benefit, but are evolving to an alternative pay-as-you-go reimbursement structure in 2026. This would eliminate the upfront pump reimbursement. Under this model, customers would no longer incur a significant upfront cost when a patient initiates pump therapy, thus reducing the initial financial burden and supporting broader patient access. With a lower upfront cost, this model is expected to increase adoption of our products by reducing a barrier for patients when evaluating pump therapy. Overall, we anticipate higher revenue in this model over the four-year life of each customer compared to the current medical benefit structure.

Previous wording

Internationally, insurance reimbursement processes vary by geography. In markets where we have direct operations, we are responsible for all reimbursement, tender application and fulfillment activities. Otherwise, that responsibility lies with our distributors.

Current wording

Internationally, insurance reimbursement models may vary by geography. In markets where we have direct operations, we are responsible for all reimbursement, tender application and fulfillment activities. Otherwise, that responsibility lies with our distributors.

Previous wording

•Seasonality in the United States is associated with annual insurance deductibles and coinsurance requirements of the medical benefit in insurance plans used by our customers and the customers of our distributors. In the United States, we typically experience a higher volume of pump shipments in the second half of the year due to the nature of these reimbursement dynamics. As we expand our access through the pharmacy benefit with no upfront reimbursement for an insulin pump, we anticipate there will be less of a seasonal impact on the business in future periods related to insurance deductibles and coinsurance requirements. Other factors that may impact sales across the year include the timing of winter, summer and other seasonal holidays, particularly in our international markets.

Current wording

•Seasonality in the United States is associated with annual insurance deductibles and coinsurance requirements of the insurance plan benefit used by our customers and the customers of our distributors. In the United States, we typically experience a higher volume of pump shipments in the second half of the year due to the nature of these reimbursement dynamics under the medical benefit. As we expand our access through the pharmacy benefit with no upfront reimbursement for an insulin pump, we anticipate there will be less of a seasonal impact on the business in future periods related to insurance deductibles and coinsurance requirements. Other factors that may impact sales across the year include the timing of seasonal holidays, particularly in our international markets.

Previous wording

•Regulatory approval and/or upcoming launches of other new Tandem or competing products could also adversely impact timing of purchasing decisions.

Current wording

•Regulatory approval and/or upcoming launches of new Tandem or competing products could also adversely impact timing of purchasing decisions.

Previous wording

•In 2026, our primary focus is to continue increasing our sales through the pharmacy benefit with improved scalability of operations, expanded coverage and a change in the reimbursement model. Our pharmacy contracts are structured as pay-as-you-go with reimbursement only for the ongoing supply purchases at a price premium to the DME model. Under this model, in the first quarter of 2026, we began experiencing a decrease in sales and gross profit when pumps are shipped. As pharmacy utilization scales, we expect the decrease in sales from pump shipments to be offset by an increase in supply sales and gross profit from both our existing installed base and increased volumes.

Current wording

•In 2026, our primary focus is to continue increasing our sales through the pharmacy benefit with improved scalability of operations, expanded coverage and a change in the reimbursement model. Our pharmacy contracts are structured as pay-as-you-go with reimbursement for the ongoing supply purchases only, at a price premium to the DME model. Under this model, in 2026, we began experiencing a decrease in sales and gross profit when pumps are shipped. As pharmacy utilization scales, we expect the decrease in sales from pharmacy pump shipments to be offset by an increase in supply sales and gross profit from both our existing installed base and new customers.

Previous wording

•We generally have had broad insurance coverage for our current products from third-party payors. Our sales and results of operations may be impacted by the failure to secure or retain adequate coverage consistent with current reimbursement levels, changes in reimbursement structures, or availability of affordable options for our customers.

Current wording

•We generally have had broad insurance coverage for our products through third-party payors. Our sales and results of operations may be impacted by the failure to secure or retain adequate coverage consistent with current reimbursement levels, changes in reimbursement structures, or availability of affordable options for our customers.

Previous wording

We offer products for people with insulin-dependent diabetes, including a portfolio of hardware platforms, single-use insulin cartridges and infusion sets, data management platforms and mobile applications. Our primary customers are the end users of our products, non-exclusive distribution partners whose level of service varies based on geography, the healthcare professionals who prescribe our products and the healthcare systems or payors who provide insurance coverage and access to our products. Our sales may fluctuate from period to period. See also “Trends and Uncertainties Impacting Financial Results — Markets, Seasonality, Competition, and Product Launches” above.

Current wording

We offer products for people with insulin-dependent diabetes, including a portfolio of hardware platforms, single-use insulin cartridges and infusion sets, data management platforms, and mobile applications. Our primary customers are the end users of our products, non-exclusive distribution partners whose level of service varies based on geography, the healthcare professionals who prescribe our products, and the healthcare systems or payors who provide insurance coverage and access to our products. Our sales may fluctuate from period to period. See also “Trends and Uncertainties Impacting Financial Results” above.

Previous wording

Cost of sales primarily consists of raw materials, labor costs, manufacturing overhead expenses, reserves for expected warranty costs, product training costs, royalties, and freight. Manufacturing overhead expenses include expenses relating to quality assurance, manufacturing engineering, material procurement, inventory control, facilities, equipment, information technology and operations supervision and management. When taking into consideration the differences in reimbursement levels and cost structure, pumps have historically had a higher gross profit and gross margin percentage than our pump-related supplies on a per unit basis. Therefore, the percentage of pump sales relative to total sales has had a significant impact on our overall gross margin percentage. Under the a pay-as-you-go model through the pharmacy benefit in the U.S., our overall gross profit and gross margin percentage may be negatively impacted when pumps are shipped during the initial stages of this new model, but may be partially or fully offset by the anticipated benefit from higher profits for our recurring sale of supplies.

Current wording

Cost of sales primarily consists of raw materials, labor costs, manufacturing overhead expenses, reserves for expected warranty costs, product training costs, royalties, and freight. Manufacturing overhead expenses include expenses relating to quality assurance, manufacturing engineering, material procurement, inventory control, facilities, equipment, information technology, and operations supervision and management. When taking into consideration the differences in reimbursement levels and cost structure, pumps have historically had a higher gross profit and gross margin percentage than our pump-related supplies on a per unit basis. Therefore, the percentage of pump sales relative to total sales has had a significant impact on our overall gross margin percentage. Under the pay-as-you-go model through the pharmacy benefit in the United States, our overall gross profit and gross margin percentage may be negatively impacted when pumps are shipped during the initial stages of this new model, but that impact may be partially or fully offset by the anticipated benefit from higher profits for our recurring sale of supplies.

Previous wording

Our selling, general and administrative (SG&A) expenses primarily consist of salary, cash-based incentive compensation, fringe benefits and non-cash stock-based compensation for our sales, marketing and administrative functions, which also includes our clinical, customer support, technical services, insurance verification and regulatory affairs personnel. Our sales territories in the United States are generally maintained by sales representatives and field clinical specialists, and supported by managed care liaisons, additional sales management and other customer support personnel. Other significant SG&A expenses typically include those incurred for commercialization activities associated with new product launches, travel, trade shows, outside legal fees, independent auditor fees, outside consultant fees, insurance premiums, facilities costs and information technology costs.

Current wording

Our SG&A expenses primarily consist of salary, cash-based incentive compensation, fringe benefits, and non-cash stock-based compensation for our sales, marketing and administrative functions in the United States and select international markets, which also includes our clinical, customer support, technical services, insurance verification and regulatory affairs personnel. Our sales territories are generally maintained by sales representatives and field clinical specialists, and supported by managed care liaisons, additional sales management, and other customer support personnel. Other significant SG&A expenses typically include costs of technology infrastructure for customer sales and support, commercialization activities associated with new product launches, travel, trade shows, outside legal fees, independent auditor fees, outside consultant fees, insurance premiums, facilities costs, and information technology costs.

Previous wording

Our research and development (R&D) activities primarily consist of engineering and research programs associated with our hardware, software and digital health products under development, as well as activities associated with our core technologies and processes. R&D expenses are primarily related to employee compensation, including salary, cash-based incentive compensation, fringe benefits and non-cash stock-based compensation. We also incur R&D expenses for supplies, development prototypes, outside design and testing services, depreciation, allocated facilities and information services, clinical trials, payments under our licensing, development and commercialization agreements and other indirect costs.

Current wording

Our R&D activities primarily consist of engineering and research programs associated with our hardware, software, and digital health products under development, as well as activities associated with our core technologies and processes. R&D expenses are primarily related to employee compensation, including salary, cash-based incentive compensation, fringe benefits, and non-cash stock-based compensation. We also incur R&D expenses for supplies, development prototypes, outside design and testing services, depreciation, allocated facilities and information services, clinical trials, payments under our licensing, development and commercialization agreements, and other indirect costs.

Previous wording

Acquired In-process Research and Development (IPR&D)

Current wording

Acquired In-process Research and Development

Previous wording

Other income and expense primarily consist of interest earned on our cash equivalents and short-term investments, income or loss from equity method investments, foreign currency transaction gains and losses and interest expense which includes the amortization of debt issuance costs related to our convertible senior notes.

Current wording

Other income and expense primarily consist of interest earned on our cash equivalents and short-term investments, income or loss from equity method investment, foreign currency transaction gains and losses, and interest expense, which includes the amortization of debt issuance costs related to our convertible senior notes.

Previous wording

For the three months ended March 31, 2026, we shipped more than 29,000 pumps worldwide. Sales were $247.2 million, which included $86.4 million of international sales. Sales were $234.4 million for the three months ended March 31, 2025, which included $83.8 million of international sales.

Current wording

For the three months ended June 30, 2026, we shipped more than 33,000 pumps worldwide. Sales were $254.6 million, which included $75.3 million of international sales. Sales were $240.7 million for the three months ended June 30, 2025, which included $70.5 million of international sales. Overall, the increase was primarily driven by an improvement in price, favorable channel mix and increased pump volumes, while supply sales were impacted by an inventory constraint relating to a key supplier.

Previous wording

For the first quarter 2026, sales in the United States increased primarily due to an increase in pump shipments and improved average selling prices for supply sales. Pump shipments were more than 19,000 pumps in the first quarter 2026 compared to more than 17,000 pumps for the first quarter 2025. Sales within the pharmacy channel accounted for 6% of sales in the United States for the first quarter 2026. Sales within the pharmacy channel were not material for the first quarter 2025.

Current wording

For the second quarter 2026, sales in the United States increased primarily due to favorable channel dynamics with the increased adoption of the new pharmacy channel business model. The adoption of this model resulted in a decrease in pump average selling prices that was more than offset by a corresponding increase in supply prices. This change in reimbursement structure was effective beginning in the first quarter 2026. Pump shipments grew to more than 22,000 pumps in the second quarter 2026 compared to approximately 21,000 pumps for the second quarter 2025. Supply sales increased although volumes were impacted by the constraint in inventory. Sales through the pharmacy channel accounted for 10% and 3% of sales in the United States for the second quarter 2026 and 2025, respectively.

Previous wording

Our cost of sales for the three months ended March 31, 2026 was $110.4 million, resulting in gross profit of $136.8 million, compared to cost of sales of $116.0 million and gross profit of $118.4 million for the same period in 2025. The gross margins for the three-month periods ended March 31, 2026 and 2025 were 55% and 51%, respectively. This increase in gross margin was primarily driven by improved average selling prices,as well as favorable impact from product mix, foreign currency and lower material costs.

Current wording

Our cost of sales for the three months ended June 30, 2026 was $109.8 million, resulting in gross profit of $144.8 million, compared to cost of sales of $114.8 million and gross profit of $125.9 million for the same period in 2025. The gross margins for the three months ended June 30, 2026 and 2025 were 57% and 52%, respectively. This increase in gross margin was primarily driven by favorable pricing from the increase in U.S. pharmacy sales and direct international sales, as well as efficiencies gained in both manufacturing and non-manufacturing costs.

Previous wording

We recognized income tax expense of $0.5 million on a pre-tax loss of $19.9 million for the three months ended March 31, 2026, compared to income tax expense of $8.5 million on a pre-tax loss of $122.1 million for the three months ended March 31, 2025. Income tax expense for the three months ended March 31, 2026, was primarily attributable to state and foreign income tax expense as a result of current taxable income in certain jurisdictions.

Current wording

We recognized income tax expense of $0.5 million on a pre-tax loss of $20.7 million for the three months ended June 30, 2026, compared to income tax benefit of $5.3 million on a pre-tax loss of $57.7 million for the three months ended June 30, 2025. Income tax expense for the three months ended June 30, 2026, was primarily attributable to state and foreign income tax expense as a result of current taxable income in certain jurisdictions.

Previous wording

For the first quarter 2026, total international sales increased primarily due to favorable changes in foreign exchange rates and improved average selling prices, partially offset by lower pump and supply volumes. International sales for the first quarter 2026 also increased due to a one-time benefit for transitioning to rental customers from distributors in Switzerland. Pump shipments were more than 10,000 pumps for the first quarter 2026 compared to more than 11,000 pumps for the first quarter 2025. The decrease in pump shipments was attributable to distributor destocking in anticipation of our initiation of direct sales activities in select countries, which began in the first quarter of 2026. Sales to distributors accounted for 89% of international sales in the first quarter of 2026 and 96% of international sales in the first quarter of 2025.

Current wording

For the six months ended June 30, 2026, total international sales increased primarily due to improved average selling prices, favorable changes in foreign exchange rates, and in increase in pump shipments, partially offset by a decrease in supplies volumes. International sales for the six months ended June 30, 2026 also included a one-time benefit for the transition to direct servicing of rental customers in Switzerland. Pump shipments were more than 21,000 in the six months ended June 30, 2026 compared to 20,000 pumps in the six months ended June 30, 2025. Direct sales to customers, including the one-time benefit in Switzerland, accounted for 12% and 4% of international sales for the six months ended June 30, 2026 and 2025, respectively.

Previous wording

Our operating expenses for the three months ended March 31, 2026 were $154.2 million, compared to $239.3 million for the three months ended March 31, 2025. The decrease was primarily driven by a reduction of one-time charges incurred in the first quarter 2025 including $75.2 million in IPR&D charges (see Note 13, “Acquisitions”) and $11.2 million in operating lease impairment charges and restructuring charges related to relocation of certain research and development activities. Additionally, operating expenses decreased due to a reduction of stock-based compensation expense.

Current wording

Our operating expenses for the six months ended June 30, 2026 were $312.8 million, compared to $417.0 million for the six months ended June 30, 2025. The decrease was primarily driven by a reduction of one-time charges incurred in the six months ended June 30, 2025, including $75.2 million in IPR&D charges (see Note 13, “Acquisitions”), $20.0 million in litigation and settlement expenses (see Note 2, “Intangible Assets Subject to Amortization”) and $11.2 million in operating lease impairment charges and restructuring charges related to relocation of certain R&D activities.

Previous wording

Selling, General and Administrative Expenses. SG&A expenses were $108.2 million for the three months ended March 31, 2026, compared to $113.9 million for the same period in 2025. The decrease in SG&A expenses was primarily driven by a reduction of one-time charges incurred in the first quarter 2025, including $6.7 million of non-recurring facility impairment costs and $2.2 million of restructuring costs. These decreases were partially offset by a $9.5 million increase from commercial investments in our sales infrastructure, including sales force expansion in the United States, costs to support direct operations in Europe, and initiatives to create future efficiencies. Additionally, stock-based compensation expense decreased by $6.3 million.

Current wording

Selling, General and Administrative Expenses. SG&A expenses were $219.8 million for the six months ended June 30, 2026, compared to $223.4 million for the same period in 2025. After one-time costs, the increase in SG&A expenses was primarily driven by a $17.4 million increase from commercial investments in sales infrastructure, including sales force expansion in the United States, costs to support direct operations in Europe, marketing activities, and other initiatives to create future efficiencies in operations. The increase was offset by a $12.1 million decrease in stock-based compensation expense.

Previous wording

Research and Development Expenses. R&D expenses were $46.0 million for the three months ended March 31, 2026, compared to $50.2 million for the same period in 2025. The decrease in R&D expenses was primarily driven by a reduction of one-time charges of $2.3 million for non-recurring restructuring costs incurred in the first quarter 2025. Additionally, stock-based compensation expense decreased by $3.2 million. The decrease in R&D expenses was partially offset by an increase in clinical trial expense.

Current wording

Research and Development Expenses. R&D expenses were $93.0 million for the six months ended June 30, 2026, compared to $98.3 million for the same period in 2025. After one-time costs, the decrease in R&D expenses was primarily driven by a $6.6 million decrease in stock-based compensation expense. The decrease was partially offset by an increase in clinical trial expense.

Previous wording

Acquired In-Process Research and Development (IPR&D) Expenses. We did not incur any IPR&D expenses for the three months ended March 31, 2026. Acquired IPR&D expenses were $75.2 million for the three months ended March 31, 2025, which represented costs associated with the revised AMF purchase agreement (see Note 13, “Acquisitions”).

Current wording

Acquired In-Process Research and Development (IPR&D) Expenses. We did not incur any IPR&D expenses for the six months ended June 30, 2026. Acquired IPR&D expenses were $75.2 million for the six months ended June 30, 2025, which represented costs associated with the revised AMF purchase agreement (see Note 13, “Acquisitions”).

Previous wording

As of March 31, 2026, we had $570.3 million in cash and cash equivalents and short-term investments. We believe that our cash and cash equivalents, short-term investments, and future cash flows from operations will be sufficient to fund our ongoing core business activities for at least the next twelve months.

Current wording

As of June 30, 2026, we had $456.0 million in cash and cash equivalents and short-term investments. We believe that our cash and cash equivalents, short-term investments, and future cash flows from operations will be sufficient to fund our ongoing core business activities for at least the next twelve months. We also believe our current liquidity position provides flexibility to support our longer-term operating objectives.

Previous wording

Our historical cash outflows have primarily been associated with cash used for operating activities such as research and development activities, sales, marketing and commercialization of our products worldwide, expansion of clinical and customer support organizations, the acquisition of intellectual property, equity investments and asset acquisitions, capital expenditures and debt service costs.

Current wording

Our historical cash outflows have primarily been associated with cash used for operating activities such as R&D activities, sales, marketing and commercialization of our products worldwide, expansion of clinical and customer support organizations, the acquisition of intellectual property, equity investments and asset acquisitions, capital expenditures and debt service costs.

Previous wording

The following table shows a summary of our cash flows for the three months ended March 31, 2026 and 2025 (in thousands):

Current wording

The following table shows a summary of our cash flows for the six months ended June 30, 2026 and 2025 (in thousands):

Previous wording

Operating Activities. Net cash provided by operating activities was $11.1 million for the three months ended March 31, 2026, compared to $18.3 million of cash used in the same period in 2025. For the three months ended March 31, 2026, net loss was $20.4 million, net non-cash adjustments were $27.8 million, and the change in working capital balances was an increase of $3.7 million. For the three months ended March 31, 2025, net loss was $130.6 million, net non-cash adjustments were $118.1 million and the change in working capital balances was a decrease of $5.8 million.

Current wording

Operating Activities. Net cash used in operating activities was $23.6 million for the six months ended June 30, 2026, compared to $27.8 million of cash used in the same period in 2025. For the six months ended June 30, 2026, net loss was $41.6 million, net non-cash adjustments were $55.8 million, and the change in working capital balances was a decrease of $37.8 million, including a $7.0 million cash outflow for the annual payment related to the Roche Settlement Agreement. For the six months ended June 30, 2025, net loss was $183.0 million, net non-cash adjustments were $151.8 million, and the change in working capital balances was an increase of $3.4 million.

Previous wording

Investing Activities. Net cash used in investing activities was $195.4 million for the three months ended March 31, 2026, which primarily consisted of $216.1 million in purchases of short-term investments, and $6.3 million in purchases of property and equipment, partially offset by $27.0 million in proceeds from maturities and redemptions of short-term investment. Net cash provided by investing activities was $9.2 million for the three months ended March 31, 2025, which primarily consisted of $65.1 million in proceeds from maturities and redemptions of short-term investments, offset by $43.5 million paid for IPR&D, $9.5 million in purchases of short-term investments, and $3.0 million in purchases of property and equipment.

Current wording

Investing Activities. Net cash used in investing activities was $282.8 million for the six months ended June 30, 2026, which primarily consisted of $260.5 million in purchases of short-term investments, $81.4 million in purchases of equity investments and $10.3 million in purchases of property and equipment, partially offset by $69.5 million in proceeds from maturities and redemptions of short-term investments. Net cash provided by investing activities was $67.3 million for the six months ended June 30, 2025, which primarily consisted of $146.4 million in proceeds from maturities and redemptions of short-term investments, offset by $43.5 million paid for IPR&D, $26.5 million in purchases of short-term investments, and $9.2 million in purchases of property and equipment.

Previous wording

Financing Activities. Net cash provided by financing activities was $274.2 million for the three months ended March 31, 2026, which consisted of net proceeds of $291.2 million from the issuance of the 2032 Notes, partially offset by $15.3 million used to pay the cost of the capped call transactions related to the 2032 Notes. In addition, $1.7 million was used in payments for tax withholdings related to the issuance of common stock under our stock plans, net of proceeds received from common stock issuances for the period. Net cash used in financing activities was $4.7 million for the three months ended March 31, 2025, which consisted of payments for tax withholdings related to the issuance of common stock under our stock plans, partially offset by proceeds received from common stock issuances for the period.

Current wording

Financing Activities. Net cash provided by financing activities was $276.3 million for the six months ended June 30, 2026, which consisted of net proceeds of $291.2 million from the issuance of the 2032 Notes, partially offset by $15.3 million used to pay the cost of the 2032 Capped Call Transactions. In addition, $0.5 million was used in payments for tax withholdings related to the issuance of common stock under our stock plans, net of proceeds received from common stock issuances for the period. Net cash used in financing activities was $44.4 million for the six months ended June 30, 2025, which consisted of $40.8 million used to pay the principal of the 2025 Notes and $3.6 million used in payments for tax withholdings related to the issuance of common stock under our stock plans, net of proceeds received from common stock issuances for the period.

Previous wording

There have been no material changes to our critical accounting policies and estimates from the information provided in Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Critical Accounting Policies Involving Management Estimates and Assumptions,” included in our Annual Report on Form 10-K for the year ended December 31, 2025.

Current wording

There have been no material changes to our critical accounting policies and estimates from the information provided in Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Critical Accounting Policies Involving Management Estimates and Assumptions,” included in our Annual Report.