Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and the accompanying notes included in this quarterly report. The following discussion may contain forward-looking statements that reflect our plans, estimates and beliefs, which are subject to risks, uncertainties and assumptions. Our actual results could differ materially from those discussed in these forward-looking statements. Factors that could cause or contribute to these differences include those discussed under the headings “Risk Factors” and “Forward-Looking Statements” in both our annual report on Form 10-K for the year ended December 31, 2021 and in this quarterly report.

Overview

We are primarily engaged in the development, manufacture and sale of our proprietary Omnipod System, a continuous insulin delivery system for people with insulin-dependent diabetes. The Omnipod System features a small, lightweight, self-adhesive disposable tubeless Omnipod device that is worn on the body for up to three days at a time; and its wireless companion, the handheld PDM/Controller. The Omnipod System, which features discreet and easy-to-use devices, communicates wirelessly, provides for virtually pain-free automated cannula insertion and eliminates the need for MDI therapy or the use of pump and tubing. We believe that the Omnipod System’s unique proprietary design and features allow people with insulin-dependent diabetes to manage their diabetes with unprecedented freedom, comfort, convenience and ease.

In addition to the diabetes market space, we have partnered with pharmaceutical and biotechnology companies to tailor the Omnipod System technology platform for the delivery of subcutaneous drugs across other therapeutic areas. Most of our drug delivery revenue currently consists of sales of pods to Amgen for use in the Neulasta® Onpro® kit, a delivery system for Amgen’s Neulasta to help reduce the risk of infection after intense chemotherapy.

Our mission is to improve the lives of people with diabetes. To assist in achieving this mission, we are focused on the following key strategic imperatives:

• expanding access and awareness;

• delivering consumer-focused innovation;

• growing our global addressable market; and

• driving operational excellence.

Our long-term financial objective is to sustain profitable growth. To achieve this goal, our efforts have been focused on the launch of Omnipod 5, which in January 2022, received FDA clearance for individuals aged six years and older with type 1 diabetes. Our limited market release of Omnipod 5 began in February and in August we launched our full market release. Accordingly, Omnipod 5 is now available through retail pharmacies. We are also working to bring Omnipod 5 to our international markets. Our submission for CE Mark approval in Europe is under review and we are currently focused on further building our international teams and advancing our regulatory, reimbursement and market development efforts.

Additionally, we continue to increase our presence within our existing markets and expand internationally in a targeted and strategic manner. We recently opened an office in Dubai to serve as our primary local presence and regional infrastructure in the Middle East and launched Omnipod in Saudi Arabia. We also expanded into the United Arab Emirates during the quarter.

In addition, we have been taking steps to further strengthen our global manufacturing capabilities. We are optimizing our operations in China by consolidating our production in that region into one location. We also broke ground on a new manufacturing plant in Malaysia to support our international expansion strategy, further ensure product supply and drive higher gross margins over time.

Finally, we plan to continue to expand awareness of and access to our products, while also focusing on our product development efforts. Our direct to consumer advertising programs continue to drive increased awareness of Omnipod. To accelerate our efforts to secure reimbursement for Omnipod 5, we are currently enrolling individuals in a randomized control trial in France and the U.S. Our product development efforts include enhancing the customer experience through digital product offerings. Achieving the above strategic imperatives is expected to require additional investments in certain initiatives and personnel, as well as enhancements to our supply chain operation capacity, efficiency and effectiveness.

Results of Operations

Factors Affecting Operating Results

Our Pods are intended to be used continuously for up to three days, after which it may be replaced with a new disposable Pod. The Omnipod System’s unique patented design allow us to provide pump therapy at a relatively low or no up-front investment, which reduces the risk to third-party payors in the U.S., compared to tubed insulin pumps. As we grow our customer base, we expect to generate an increasing portion of our revenues through recurring sales of our disposable Pods, which provides predictable recurring revenue.

We continue to experience constrained supply and supply chain disruption; however, to date we have been able to successfully mitigate this disruption and ensure uninterrupted supply to our customers by increasing our inventory levels and taking other measures. While our mitigation efforts and inflation are expected to negatively impact gross margins and net income throughout the year, we intend to continue to work to improve productivity to help offset these costs.

Revenue

			Three Months Ended June 30,
(dollars in millions)			2022						2021						Percent Change						Currency Impact						Constant Currency (1)
U.S. Omnipod			$	196.4					$	150.5					30.5		%				—		%				30.5		%
International Omnipod			89.4						91.6						(2.4)		%				(11.3)		%				8.9		%
Total Omnipod			285.8						242.1						18.1		%				(4.2)		%				22.3		%
Drug Delivery			13.6						21.1						(35.5)		%				—		%				(35.5)		%
Total revenue			$	299.4					$	263.2					13.8		%				(3.9)		%				17.7		%

			Six Months Ended June 30,
(dollars in millions)			2022						2021						Percent Change						Currency Impact						Constant Currency (1)
U.S. Omnipod			$	370.5					$	293.8					26.1		%				—		%				26.1		%
International Omnipod			184.8						181.5						1.8		%				(8.9)		%				10.7		%
Total Omnipod			555.3						475.3						16.8		%				(3.4)		%				20.2		%
Drug Delivery			39.5						40.2						(1.7)		%				—		%				(1.7)		%
Total revenue			$	594.8					$	515.5					15.4		%				(3.1)		%				18.5		%

(1) Constant currency revenue growth is a non-GAAP financial measure which should be considered supplemental to, and not a substitute for, our reported financial results prepared in accordance with GAAP. See “Management’s Use of Non-GAAP Measures.”

Total revenue for the three months ended June 30, 2022 increased $36.2 million, or 13.8%, to $299.4 million, compared with $263.2 million for the three months ended June 30, 2021. Constant currency revenue growth of 17.7% was primarily driven by higher volume and favorable sales channel mix, partially offset by a decrease in Drug Delivery revenue.

Total revenue for the six months ended June 30, 2022 increased $79.3 million, or 15.4%, to $594.8 million, compared with $515.5 million for the six months ended June 30, 2021. Constant currency revenue growth of 18.5% was primarily driven by higher volume and, to a lesser extent, favorable sales channel mix.

U.S. Omnipod

U.S. Omnipod revenue for the three months ended June 30, 2022 increased $45.9 million, or 30.5%, to $196.4 million, compared with $150.5 million for the three months ended June 30, 2021. This increase was primarily due to higher volumes driven by growing our customer base and, to a lesser extent, an increase due to growth through the pharmacy channel, where Pods have a higher average selling price due in part to the fact that we offer the PDM/Controller for no charge, as well as an increase in inventory at distributors due to the launch of Omnipod 5.

U.S. Omnipod revenue for the three months ended June 30, 2022 includes $55.5 million of related party revenue, compared with $3.3 million for the three months ended June 30, 2021. The $52.2 million increase primarily resulted from a shift in certain revenues from one distributor to another.

U.S. Omnipod revenue for the six months ended June 30, 2022 increased $76.7 million, or 26.1%, to $370.5 million, compared with $293.8 million for the six months ended June 30, 2021. This increase was primarily due to higher volumes driven by growing our customer base and, to a lesser extent, an increase due to growth through the pharmacy channel, where Pods have a higher average selling price due in part to the fact that we offer the PDM/Controller for no charge.

U.S. Omnipod revenue for the six months ended June 30, 2022 includes $103.9 million of related party revenue, compared with $5.5 million for the six months ended June 30, 2021. The $98.4 million increase primarily resulted from a shift in certain revenues from one distributor to another.

For full year 2022, we expect strong U.S. Omnipod revenue growth in the pharmacy channel, primarily driven by the continued increase in Omnipod DASH sales volume and the full market release of Omnipod 5.

International Omnipod

International Omnipod revenue for the three months ended June 30, 2022 decreased $2.2 million, or 2.4%, to $89.4 million, compared with $91.6 million for the three months ended June 30, 2021. Excluding the 11.3% unfavorable impact of currency exchange, the remaining 8.9% increase in revenue was primarily due to higher volumes as we continue to expand awareness and access to Omnipod DASH, partially offset by increased competition from automated insulin delivery (“AID”) systems and the impact of the pandemic on our recurring revenue.

International Omnipod revenue for the six months ended June 30, 2022 increased $3.3 million, or 1.8%, to $184.8 million, compared with $181.5 million for the six months ended June 30, 2021. Excluding the 8.9% unfavorable impact of currency exchange, the remaining 10.7% increase in revenue was primarily due to higher volumes as we continue to expand awareness and access to Omnipod DASH, partially offset by increased competition from automated insulin delivery (“AID”) systems and the impact of the pandemic on our recurring revenue.

For full year 2022, we expect higher International Omnipod revenue due to continued volume growth and market penetration aided by the ongoing adoption of Omnipod DASH throughout our international markets, partially offset by competition from AID systems.

Drug Delivery

Drug Delivery revenue for the three months ended June 30, 2022 decreased $7.5 million, or 35.5%, to $13.6 million, compared with $21.1 million for the three months ended June 30, 2021. This decrease was primarily due to elevated volume in the prior year due to the pandemic.

Drug Delivery revenue for the six months ended June 30, 2022 of $39.5 million was relatively level compared with $40.2 million for the six months ended June 30, 2021. For full year 2022, we expect Drug Delivery revenue to decline as production levels were elevated during the pandemic.

Operating Expenses

			Three Months Ended June 30,
			2022												2021
(dollars in millions)			Amount						Percent of Revenue						Amount						Percent of Revenue
Cost of revenue			$	109.1					36.4		%				$	80.5					30.6		%
Research and development expenses			$	42.6					14.2		%				$	40.1					15.2		%
Selling, general and administrative expenses			$	174.4					58.2		%				$	116.3					44.2		%

			Six Months Ended June 30,
			2022												2021
(dollars in millions)			Amount						Percent of Revenue						Amount						Percent of Revenue
Cost of revenue			$	194.8					32.8		%				$	165.3					32.1		%
Research and development expenses			$	85.7					14.4		%				$	80.8					15.7		%
Selling, general and administrative expenses			$	303.1					51.0		%				$	226.8					44.0		%

Cost of Revenue

Cost of revenue for the three months ended June 30, 2022 increased $28.6 million, or 35.5%, to $109.1 million, compared with $80.5 million for the three months ended June 30, 2021. Gross margin was 63.6% for the three months ended June 30, 2022, compared with 69.4% for the three months ended June 30, 2021. The 580 basis point decrease in gross margin was primarily driven by higher expected production costs and manufacturing inefficiencies as U.S. manufacturing continues to ramp and become a larger portion of our total production and we transition product lines between manufacturing facilities to ensure redundancy. An increase in warranty costs driven by aging battery lives in Omnipod DASH PDMs and higher costs associated with Omnipod 5 production also contributed to the decline in margin. These decreases were partially offset by higher average selling price due to growth in the pharmacy channel.

Cost of revenue for the six months ended June 30, 2022 increased $29.5 million, or 17.8%, to $194.8 million, compared with $165.3 million for the six months ended June 30, 2021. Gross margin of 67.2% for the six months ended June 30, 2022 was relatively level

with the prior year as higher expected production costs in the U.S. were mostly offset by improved manufacturing efficiencies and higher average selling price due to growth in the pharmacy channel.

For full year 2022, we expect gross margin to be in the range of 65% to 66%. We anticipate gross margin will be negatively impacted by unfavorable product line mix, higher costs associated with Omnipod 5 and Drug Delivery production, increased component costs due to inflation, and higher warranty expense. We believe these higher costs will be partially offset by increased volume in the pharmacy channel.

Research and Development Expenses

Research and development expenses for the three months ended June 30, 2022 increased $2.5 million, or 6.2%, to $42.6 million, compared with $40.1 million for the three months ended June 30, 2021. Research and development expenses for the six months ended June 30, 2022 increased $4.9 million, or 6.1%, to $85.7 million, compared with $80.8 million for the six months ended June 30, 2021. The increases for both the three and six months ended June 30, 2022 were primarily due to year-over-year headcount additions to support our continued investment in development of Omnipod products, partially offset by lower outside services used for clinical activities. We expect research and development spending in 2022 to increase compared with 2021 as we continue to invest in advancing our innovation and contend with inflation.

Selling, General and Administrative Expenses

Selling, general and administrative expenses for the three months ended June 30, 2022 increased $58.1 million, or 50.0%, to $174.4 million, compared with $116.3 million for the three months ended June 30, 2021. Selling general and administrative expenses for the six months ended June 30, 2022 increased $76.3 million, or 33.6%, to $303.1 million, compared with $226.8 million for the six months ended June 30, 2021. The increases for both the three and six months ended June 30, 2022 were primarily attributable to $27.3 million of legal costs related to the settlement of a patent infringement lawsuit, associated legal fees, and an estimated liability to settle a contract dispute. To a lesser extent, the increases were due to year-over-year headcount additions, mainly to support information technology, commercial operations, and international expansion, an increase in investments to expand market acceptance and access to the Omnipod, and higher travel and entertainment expenses due to increased activity as COVID-19 restrictions have lifted. Additionally, selling, general and administrative expenses for both the three and six months ended June 30, 2022 includes $3.4 million of costs associated with the retirement and advisory services of our former chief executive officer.

We expect selling, general and administrative expenses to increase in 2022 compared with 2021 due to expansion of our sales force and customer support personnel, investments to expand market acceptance and access for the Omnipod System, including direct-to-consumer advertising, and investments in our operating structure to facilitate operating efficiencies and continued growth.

Non-Operating Items

Interest Expense, Net

Net interest expense decreased $8.1 million to $8.3 million for the three months ended June 30, 2022, compared with $16.4 million for the three months ended June 30, 2021. This decrease was primarily driven by the adoption of Accounting Standards Update 2020-06, Accounting for Convertible Debt Instruments and Contracts in an Entity's Own Equity (“ASU 2020-06”), which eliminated most of the non-cash interest expense associated with our convertible notes. Refer to Recently Adopted Accounting Standard in Note 1 to the consolidated financial statements for additional information.

Net interest expense decreased $12.6 million to $17.2 million for the six months ended June 30, 2022, compared with $29.8 million for the six months ended June 30, 2021. This decrease was primarily driven by the adoption of ASU 2020-06 as discussed above.

Loss on Extinguishment of Debt

During the three and six months ended June 30, 2021, we incurred a $40.1 million loss on extinguishment of debt related to the repurchase of a portion of our 1.375% Convertible Senior Notes.

Other (Expense) Income, Net

During the three months ended June 30, 2022, we had other expense of $1.1 million, compared with other income of $1.8 million for the three months ended June 30, 2021. The $2.9 million increase in other expense was primarily driven by an increase in unrealized foreign currency losses.

During both the six months ended June 30, 2022 and the six months ended June 30, 2021, we had other expense of $0.8 million driven by net unrealized foreign currency losses.

Income Tax Expense, Net

Income tax benefit was $1.1 million for the three months ended June 30, 2022, compared with an income tax benefit of $3.4 million for the three months ended June 30, 2021, resulting in effective tax rates of 2.9% and 12.1%, respectively. Income tax expense was $0.4 million for the six months ended June 30, 2022, compared with an income tax benefit of $3.1 million for the six months ended June 30, 2021, resulting in effective tax rates of (6.5)% and 11.2%, respectively. The decreases in the effective tax rates for both the three and six months ended June 30, 2022 were primarily driven by the jurisdictional distribution of profits and losses. Additionally,

the valuation allowance recorded against current year losses in the United Kingdom contributed to the decrease for the six months ended June 30, 2022.

Adjusted EBITDA

The table below presents reconciliations of Adjusted EBITDA, a non-GAAP financial measure, to net income (loss), the most directly comparable financial measure prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”):

			Three Months Ended June 30,												Six Months Ended June 30,
(in millions)			2022						2021						2022						2021
Net loss			$	(35.0)					$	(25.0)					$	(7.2)					$	(25.0)
Interest expense, net			8.3						16.4						17.2						29.8
Income tax (benefit) expense			(1.1)						(3.4)						0.4						(3.1)
Depreciation and amortization			15.8						15.2						31.1						28.0
Stock-based compensation expense			8.9						9.0						18.4						17.6
Legal costs(1)			27.3						—						27.3						—
CEO transition costs(2)			3.4						—						3.4						—
Loss on extinguishment of debt			—						40.1						—						40.1
Adjusted EBITDA			$	27.6					$	52.3					$	90.6					$	87.4

(1) Includes a $20.0 million charge to settle patent infringement litigation with Roche Diabetes Care, Inc., associated legal fees, and an estimated liability to settle a contract dispute. Refer to Note 12 to the consolidated financial statements for additional information.

(2) Represents costs associated with the retirement and advisory services of our former chief executive officer, including $2.3 million of accelerated stock-based compensation expense.

Non-GAAP Financial Measures

Management uses the following non-GAAP financial measures:

Constant currency revenue growth represents the change in revenue between current and prior year periods using the exchange rate in effect during the applicable prior year period. We present constant currency revenue growth because we believe it provides meaningful information regarding our results on a consistent and comparable basis. Management uses this non-GAAP financial measure, in addition to financial measures in accordance with GAAP, to evaluate our operating results. It is also one of the performance metrics that determines management incentive compensation.

Adjusted EBITDA represents net income (loss) plus net interest expense, income tax expense (benefit), depreciation and amortization, stock-based compensation and other significant unusual items, as applicable. We present Adjusted EBITDA because management uses it as a supplemental measure in assessing our operating performance, and we believe that it is helpful to investors, and other interested parties as a measure of our comparative operating performance from period to period. Adjusted EBITDA is a commonly used measure in determining business value and we use it internally to report results.

These non-GAAP financial measures should be considered supplemental to, and not a substitute for, our reported financial results prepared in accordance with GAAP. In addition, the above definitions may differ from similarly titled measures used by others. Non-GAAP financial measures exclude the effect of items that increase or decrease our reported results of operations; accordingly, we strongly encourage investors to review our consolidated financial statements in their entirety.

Liquidity and Capital Resources

As of June 30, 2022, we had $708.6 million in cash and cash equivalents. Additionally, we have a $70.0 million three-year senior secured revolving credit facility (the “Credit Facility”), which expires in 2024. At June 30, 2022, no amount was outstanding under the Credit Facility. The Credit Facility contains a covenant to maintain a specified leverage ratio under certain conditions when there are amounts outstanding under the facility. It also contains other customary covenants, none of which are considered restrictive to our operations. We believe that our current liquidity will be sufficient to meet our projected operating, investing and debt service requirements for at least the next twelve months.

Debt

To finance our operations and global expansion, we have periodically issued convertible senior notes, which are convertible into our common stock. As of June 30, 2022, the following notes were outstanding:

Issuance Date						Coupon						Principal Outstanding (in millions)						Due Date						Conversion Rate (1)						Conversion Price per Share of Common Stock
September 2019						0.375%						800.0						September 2026						4.4105						$	226.73

(1) Per $1,000 face value of notes

Additional information regarding our debt is provided in Note 10 to the consolidated financial statements.

Summary of Cash Flows

			Six Months Ended June 30,
(in millions)			2022						2021
Cash provided by (used in):
Operating activities			$	11.6					$	(16.8)
Investing activities			(68.8)						(34.1)
Financing activities			(21.9)						—
Effect of exchange rate changes on cash			(3.5)						(1.7)
Net decrease in cash, cash equivalents and restricted cash			$	(82.6)					$	(52.6)

Operating Activities

Net cash provided by operating activities of $11.6 million for the six months ended June 30, 2022 was primarily attributable to net loss, as adjusted for depreciation and amortization, stock-based compensation expense and non-cash interest expense, partially offset by a $38.7 million working capital cash outflow. The working capital outflow was driven by a $51.4 million increase in accounts receivable, a $24.0 million increase in inventories and a $23.3 million increase in prepaid expenses and other assets, partially offset by a $39.9 million increase in accrued expenses and other liabilities and a $20.1 million increase in accounts payable. The increase in accounts receivable was primarily due to an increase in sales in the U.S. pharmacy channel, which has longer payment terms. The increase in inventories was driven by a planned inventory build. The increase in prepaid expenses and other assets was driven by an increase in cloud computing implementation costs and right-of-use assets. The increase in accrued expenses and other liabilities was primarily driven by a $20 million legal settlement that was accrued during the second quarter and an increase in rebates due to growth in the pharmacy channel and the launch of Omnipod 5. Finally, the increase in accounts payable was primarily driven by the timing of payments.

Investing Activities

Net cash used in investing activities was $68.8 million for the six months ended June 30, 2022, compared with net cash used in investing activities of $34.1 million for the six months ended June 30, 2021.

Capital Spending—Capital expenditures were $27.4 million and $52.8 million for the six months ended June 30, 2022 and 2021, respectively. The $25.4 million decrease was primarily driven by less spend on manufacturing equipment, due to the addition of manufacturing capacity in the prior year. We expect capital expenditures for 2022 to increase compared with 2021 as we continue to invest in our global manufacturing capabilities to support our growth. We expect to fund our capital expenditures using existing cash.

Purchases and Sales of Marketable Securities—The $22.5 million decrease in proceeds from maturities of marketable securities was driven by the prior year shift of a portion of our investment portfolio to investments classified as cash equivalents.

Acquisition and Investments—During the six months ended June 30, 2022, we paid $26.0 million for the acquisition of substantially all of the assets related to the manufacture and production of SMA wire assemblies that are used in the production of Omnipods from Dynalloy, Inc. In addition, we paid $7.8 million for strategic investments in two private companies.

Financing Activities

We had $21.9 million of net cash used in financing activities for the six months ended June 30, 2022, compared with no cash used in financing activities for six months ended June 30, 2021.

Debt Issuance and Repayments—During the six months ended June 30, 2022, we made $12.2 million in aggregate principal payments on our equipment financings, mortgage, and term loan, compared with $7.4 million for the six months ended June 30, 2021. The $4.8 million increase is due to entering the term loan and an additional equipment financing in the second and third quarter of 2021,

respectively. Additionally, during the six months ended June 30, 2021, we received net proceeds of $489.5 million from the issuance of the term loan and used $460.8 million of cash to partially fund the repurchase of a portion of our 1.375% Notes.

Option Exercises and Payment of Taxes for Restricted Stock Net Settlements—Total proceeds from option exercises and issuance of employee stock purchase plan shares was $1.9 million and $6.2 million for the six months ended June 30, 2022 and 2021, respectively. The $4.3 million decrease was primarily driven by option exercises in the prior year by our former chief executive officer who retired in 2018. Payments for taxes related to net restricted and performance stock unit settlements were $16.5 million and $27.3 million for the six months ended June 30, 2022 and 2021, respectively. The $10.8 million decrease was primarily driven by vesting of performance stock units in the prior year by our former chief executive officer who retired in 2018.

Commitments and Contingencies

We are engaged in negotiations over a contractual dispute involving in-licensed intellectual property. Offers to settle the dispute have been made by both parties ranging from $5.7 million to $36 million. In connection with discussions to resolve this matter, during the three months ended June 30, 2022, we accrued an estimated liability of $5.7 million. The ultimate resolution of this matter is uncertain and could have a material effect on our results of operations.

Legal Proceedings

The significant estimates and judgments related to establishing litigation reserves are discussed under “Legal Proceedings” in Note 12 to the consolidated financial statements included in this Form 10-Q.

Critical Accounting Policies and Estimates

The preparation of our consolidated financial statements in conformity with GAAP requires management to use judgment in making estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses, and related disclosure of contingent assets and liabilities.

Our accounting policies for revenue recognition and contingencies are based on, among other things, judgments and assumptions made by management that include inherent risks and uncertainties. There have been no significant changes to the above critical accounting policies or in the underlying accounting assumptions and estimates used in such policies from those disclosed in our annual consolidated financial statements and accompanying notes included in our Annual Report on Form 10-K for the year ended December 31, 2021.

FORWARD-LOOKING STATEMENTS

This quarterly report on Form 10-Q contains forward-looking statements. Forward-looking statements relate to future events or our future financial performance. We generally identify forward looking statements by terminology such as “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “could,” “intends,” “targets,” “projects,” “contemplates,” “believes,” “estimates,” “predicts,” “potential” or “continue” or the negative of these terms or other similar words. These statements are only predictions. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our business, results of operations and financial condition.

The outcomes of the events described in these forward-looking statements are subject to risks, uncertainties and assumptions. These risks and uncertainties include, but are not limited to:

• adverse changes in general economic conditions as well as risks associated with public health crises and pandemics, such as the COVID-19 global pandemic, government actions and restrictive measures implemented in response, supply chain disruptions, delays in clinical trials, and other impacts to the business;

• dependence on a principal product platform;

• ability to maintain and grow our customer base, scale our business to support revenue growth, maintain an effective sales force and expand our distribution network;

• ability to secure and retain adequate coverage or reimbursement from third-party payors;

• impact of healthcare reform laws;

• impact of competitive products, technological change, product innovation and ability to design, develop, manufacture and commercialize future products;

• changes to or termination of our license to incorporate a blood glucose meter into the Omnipod System or inability to enter into new license or other agreements with respect to the Omnipod System’s current or future features;

• challenges to the future development of our non-insulin drug delivery product line;

• international business risks, including regulatory, commercial and logistics risks;

• supply problems or price fluctuations with sole source or third-party suppliers on which we are dependent;

• failure to retain key suppliers and/or supplier pricing discounts and achieve satisfactory gross margins;

• ability to protect our intellectual property and other proprietary rights and potential conflicts with the intellectual property of third parties;

• adverse regulatory or legal actions relating to the Omnipod System or future products;

• failure of our contract manufacturer or component suppliers to comply with the FDA’s quality system regulations;

• potential adverse impacts resulting from a recall, or discovery of serious safety issues, product liability lawsuits relating to off-label use, the potential violation of anti-bribery/anti-corruption laws, laws and regulations regarding privacy and data protection, and breaches or failures of our product or information technology systems, including by cyberattack;

• unfavorable results of clinical studies or future publication of articles or announcement of positions by diabetes associations or other organizations that are unfavorable;

• the concentration of manufacturing operations and storage of inventory in a limited number of locations;

• loss of employees or inability to identify and recruit new employees;

• risks associated with potential future acquisitions or investments in new businesses;

• ability to generate sufficient cash to service our indebtedness or raise additional funds on acceptable terms or at all;

• the volatility of the trading price of our common stock;

• risks related to the conversion of any of outstanding Convertible Senior Notes; and

• potential limitations on our ability to use our net operating loss carryforwards.

The risk factors discussed in “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2021 and in this Quarterly Report could cause our results to differ materially from those expressed in forward-looking statements. In addition, there may be other risks and uncertainties that we are unable to predict at this time or that we currently do not expect to have a material adverse effect on our business. Actual results could differ materially from those projected in the forward-looking statements; accordingly, you should not rely upon forward-looking statements as predictions of future events. We expressly disclaim any obligation to update these forward-looking statements other than as required by law.