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Cover and table of contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
| ☒ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended September 30, 2025
OR
| ☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Commission File Number 001-33462
INSULET CORPORATION
(Exact name of Registrant as specified in its charter)
| Delaware | 04-3523891 | ||||||||||||||||
| (State or Other Jurisdiction of Incorporation or Organization) | (I.R.S. Employer Identification No.) | ||||||||||||||||
| 100 Nagog Park | Acton | Massachusetts | 01720 | ||||||||||||||
| (Address of Principal Executive Offices) | (Zip Code) |
Registrant’s Telephone Number, Including Area Code: (978) 600-7000
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer | ☒ | Accelerated filer | ☐ | |||||||||||
| Non-accelerated filer | ☐ | Smaller reporting company | ☐ | |||||||||||
| Emerging growth company | ☐ |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
| Common Stock, $0.001 Par Value Per Share | PODD | The NASDAQ Stock Market, LLC |
As of October 30, 2025, the registrant had 70,346,898 shares of common stock outstanding.
TABLE OF CONTENTS
PART I - FINANCIAL INFORMATION
| Item 1. | Condensed Consolidated Financial Statements (Unaudited) |
INSULET CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
| (in millions, except share and per share data) | September 30, 2025 | December 31, 2024 | |||||||||
| ASSETS | |||||||||||
| Current Assets | |||||||||||
| Cash and cash equivalents | $ | 757.4 | $ | 953.4 | |||||||
| Accounts receivable trade, net of allowance for credit losses of $1.6 and $1.4 | 306.5 | 252.5 | |||||||||
| Accounts receivable trade, net — related party | 155.7 | 113.0 | |||||||||
| Inventories | 446.3 | 430.4 | |||||||||
| Prepaid expenses | 72.6 | 50.6 | |||||||||
| Other current assets | 120.8 | 91.5 | |||||||||
| Total current assets | 1,859.4 | 1,891.3 | |||||||||
| Property, plant and equipment, net | 724.1 | 723.1 | |||||||||
| Other intangible assets, net | 105.0 | 98.5 | |||||||||
| Goodwill | 51.6 | 51.5 | |||||||||
| Deferred tax assets | 100.9 | 141.8 | |||||||||
| Other assets | 188.3 | 181.6 | |||||||||
| Total assets | $ | 3,029.3 | $ | 3,087.7 | |||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||||||
| Current Liabilities | |||||||||||
| Accounts payable | $ | 48.2 | $ | 19.8 | |||||||
| Accrued expenses and other current liabilities | 518.7 | 423.9 | |||||||||
| Accrued expenses and other current liabilities — related party | 0.9 | 1.0 | |||||||||
| Current portion of long-term debt | 79.9 | 83.8 | |||||||||
| Total current liabilities | 647.7 | 528.4 | |||||||||
| Long-term debt, net | 934.9 | 1,296.1 | |||||||||
| Other liabilities | 62.6 | 51.7 | |||||||||
| Total liabilities | 1,645.1 | 1,876.1 | |||||||||
| Commitments and contingencies (note 12) | |||||||||||
| Stockholders’ Equity | |||||||||||
| Preferred stock, $.001 par value, 5,000,000 authorized; none issued and outstanding | — | — | |||||||||
| Common stock, $.001 par value, 100,000,000 authorized; 70,529,988 and 70,196,031 issued | 0.1 | 0.1 | |||||||||
| Additional paid-in capital | 1,245.8 | 1,184.4 | |||||||||
| Accumulated earnings | 185.8 | 40.3 | |||||||||
| Accumulated other comprehensive income (loss) | 12.2 | (13.2) | |||||||||
| Treasury stock, at cost; 184,300 and — shares | (60.5) | — | |||||||||
| Deferred compensation | 0.9 | — | |||||||||
| Total stockholders’ equity | 1,384.1 | 1,211.6 | |||||||||
| Total liabilities and stockholders’ equity | $ | 3,029.3 | $ | 3,087.7 |
See notes to condensed consolidated financial statements. Amounts may not add due to rounding.
INSULET CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| (in millions, except share and per share data) | 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||
| Revenue | $ | 521.7 | $ | 372.6 | $ | 1,412.7 | $ | 1,043.7 | |||||||||||||||
| Revenue from related party | 184.5 | 171.3 | 511.6 | 430.4 | |||||||||||||||||||
| Total revenue | 706.3 | 543.9 | 1,924.3 | 1,474.1 | |||||||||||||||||||
| Cost of revenue | 196.2 | 166.8 | 553.0 | 459.3 | |||||||||||||||||||
| Gross profit | 510.1 | 377.1 | 1,371.3 | 1,014.8 | |||||||||||||||||||
| Research and development expenses | 77.2 | 54.9 | 210.2 | 159.0 | |||||||||||||||||||
| Selling, general and administrative expenses | 315.2 | 234.1 | 833.6 | 656.3 | |||||||||||||||||||
| Operating income | 117.7 | 88.1 | 327.5 | 199.6 | |||||||||||||||||||
| Interest expense | (15.6) | (12.4) | (44.5) | (34.1) | |||||||||||||||||||
| Interest income | 8.6 | 10.5 | 29.0 | 29.2 | |||||||||||||||||||
| Loss on extinguishment of debt | — | — | (123.9) | — | |||||||||||||||||||
| Other income (expense), net | 12.1 | (3.4) | 11.2 | (5.9) | |||||||||||||||||||
| Income before income taxes | 122.8 | 82.9 | 199.3 | 188.8 | |||||||||||||||||||
| Income tax (expense) benefit | (35.2) | (5.4) | (53.9) | 128.8 | |||||||||||||||||||
| Net income | $ | 87.6 | $ | 77.5 | $ | 145.5 | $ | 317.6 | |||||||||||||||
| Earnings per share: | |||||||||||||||||||||||
| Basic | $ | 1.24 | $ | 1.11 | $ | 2.07 | $ | 4.53 | |||||||||||||||
| Diluted | $ | 1.24 | $ | 1.08 | $ | 2.05 | $ | 4.40 | |||||||||||||||
| Weighted-average number of common shares outstanding (in thousands): | |||||||||||||||||||||||
| Basic | 70,367 | 70,123 | 70,343 | 70,047 | |||||||||||||||||||
| Diluted | 70,661 | 73,951 | 72,292 | 73,830 |
See notes to condensed consolidated financial statements. Amounts may not add due to rounding.
INSULET CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(UNAUDITED)
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| (in millions) | 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||
| Net income | $ | 87.6 | $ | 77.5 | $ | 145.5 | $ | 317.6 | |||||||||||||||
| Other comprehensive income (loss), net of tax: | |||||||||||||||||||||||
| Foreign currency translation adjustment | (3.3) | 29.7 | 29.3 | 22.0 | |||||||||||||||||||
| Unrealized gain (loss) on cash flow hedges, net of tax | 0.1 | (5.7) | (3.9) | (10.3) | |||||||||||||||||||
| Other comprehensive (loss) income, net of tax | (3.2) | 24.1 | 25.3 | 11.7 | |||||||||||||||||||
| Comprehensive income | $ | 84.3 | $ | 101.6 | $ | 170.8 | $ | 329.3 |
See notes to condensed consolidated financial statements. Amounts may not add due to rounding.
INSULET CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(UNAUDITED)
Three Months Ended September 30, 2025
| Common Stock | Additional Paid-in Capital | Accumulated Earnings | Accumulated Other Comprehensive Income | Treasury Stock | Deferred Compensation | Total Shareholders’ Equity | |||||||||||||||||||||||||||||||||||||||||
| (dollars in millions) | Shares (in thousands) | Amount | |||||||||||||||||||||||||||||||||||||||||||||
| Balance at June 30, 2025 | 70,391 | $ | 0.1 | $ | 1,379.4 | $ | 98.2 | $ | 15.4 | $ | (31.0) | $ | 0.9 | $ | 1,462.9 | ||||||||||||||||||||||||||||||||
| Net income | — | — | — | 87.6 | — | — | — | 87.6 | |||||||||||||||||||||||||||||||||||||||
| Other comprehensive loss, net of tax | — | — | — | — | (3.2) | — | — | (3.2) | |||||||||||||||||||||||||||||||||||||||
| Exercise of options to purchase common stock | 32 | — | 4.6 | — | — | — | — | 4.6 | |||||||||||||||||||||||||||||||||||||||
| Stock-based compensation expense | — | — | 16.7 | — | — | — | — | 16.7 | |||||||||||||||||||||||||||||||||||||||
| Restricted stock units vested, net of shares withheld for taxes | 14 | — | (2.3) | — | — | — | — | (2.3) | |||||||||||||||||||||||||||||||||||||||
| Repurchase of common stock | (91) | — | — | — | — | (29.6) | — | (29.6) | |||||||||||||||||||||||||||||||||||||||
| Conversion of Convertible Senior Notes | — | — | (144.8) | — | — | — | — | (144.8) | |||||||||||||||||||||||||||||||||||||||
| Settlement of capped call options | — | — | (7.8) | — | — | — | — | (7.8) | |||||||||||||||||||||||||||||||||||||||
| Balance at September 30, 2025 | 70,346 | $ | 0.1 | $ | 1,245.8 | $ | 185.8 | $ | 12.2 | $ | (60.5) | $ | 0.9 | $ | 1,384.1 |
Three Months Ended September 30, 2024
| Common Stock | Additional Paid-in Capital | Accumulated Deficit | Accumulated Other Comprehensive (Loss) Income | Total Shareholders’ Equity | |||||||||||||||||||||||||||||||
| (dollars in millions) | Shares (in thousands) | Amount | |||||||||||||||||||||||||||||||||
| Balance at June 30, 2024 | 70,112 | $ | 0.1 | $ | 1,140.6 | $ | (137.9) | $ | (4.4) | $ | 998.4 | ||||||||||||||||||||||||
| Net income | — | — | — | 77.5 | — | 77.5 | |||||||||||||||||||||||||||||
| Other comprehensive income, net of tax | — | — | — | — | 24.1 | 24.1 | |||||||||||||||||||||||||||||
| Exercise of options to purchase common stock | 20 | — | 0.7 | — | — | 0.7 | |||||||||||||||||||||||||||||
| Stock-based compensation expense | — | — | 18.2 | — | — | 18.2 | |||||||||||||||||||||||||||||
| Restricted stock units vested, net of shares withheld for taxes | 9 | — | (0.9) | — | — | (0.9) | |||||||||||||||||||||||||||||
| Balance at September 30, 2024 | 70,142 | $ | 0.1 | $ | 1,158.7 | $ | (60.4) | $ | 19.7 | $ | 1,118.0 |
See notes to condensed consolidated financial statements. Amounts may not add due to rounding.
Nine Months Ended September 30, 2025
| Common Stock | Additional Paid-in Capital | Accumulated Earnings | Accumulated Other Comprehensive (Loss) income | Treasury Stock | Deferred Compensation | Total Shareholders’ Equity | |||||||||||||||||||||||||||||||||||||||||
| (dollars in millions) | Shares (in thousands) | Amount | |||||||||||||||||||||||||||||||||||||||||||||
| Balance at December 31, 2024 | 70,196 | $ | 0.1 | $ | 1,184.4 | $ | 40.3 | $ | (13.2) | $ | — | $ | — | $ | 1,211.6 | ||||||||||||||||||||||||||||||||
| Net income | — | — | — | 145.5 | — | — | — | 145.5 | |||||||||||||||||||||||||||||||||||||||
| Other comprehensive income, net of tax | — | — | — | — | 25.3 | — | — | 25.3 | |||||||||||||||||||||||||||||||||||||||
| Exercise of options to purchase common stock | 141 | — | 17.2 | — | — | — | — | 17.2 | |||||||||||||||||||||||||||||||||||||||
| Issuance of shares for employee stock purchase plan | 31 | — | 7.1 | — | — | — | — | 7.1 | |||||||||||||||||||||||||||||||||||||||
| Stock-based compensation expense | — | — | 42.4 | — | — | — | — | 42.4 | |||||||||||||||||||||||||||||||||||||||
| Restricted stock units vested, net of shares withheld for taxes | 162 | — | (25.1) | — | — | — | — | (25.1) | |||||||||||||||||||||||||||||||||||||||
| Repurchase of common stock | (184) | — | — | — | — | (59.6) | — | (59.6) | |||||||||||||||||||||||||||||||||||||||
| Deferred compensation | — | — | — | — | — | (0.9) | 0.9 | — | |||||||||||||||||||||||||||||||||||||||
| Conversion of Convertible Senior Notes | — | — | (144.8) | — | — | — | — | (144.8) | |||||||||||||||||||||||||||||||||||||||
| Settlement of capped call options | — | — | 164.6 | — | — | — | — | 164.6 | |||||||||||||||||||||||||||||||||||||||
| Balance at September 30, 2025 | 70,346 | $ | 0.1 | $ | 1,245.8 | $ | 185.8 | $ | 12.2 | $ | (60.5) | $ | 0.9 | $ | 1,384.1 |
Nine Months Ended September 30, 2024
| Common Stock | Additional Paid-in Capital | Accumulated Deficit | Accumulated Other Comprehensive Income | Total Shareholders’ Equity | |||||||||||||||||||||||||||||||
| (dollars in millions) | Shares (in thousands) | Amount | |||||||||||||||||||||||||||||||||
| Balance at December 31, 2023 | 69,907 | $ | 0.1 | $ | 1,102.7 | $ | (378.0) | $ | 8.0 | $ | 732.7 | ||||||||||||||||||||||||
| Net income | — | — | — | 317.6 | — | 317.6 | |||||||||||||||||||||||||||||
| Other comprehensive income, net of tax | — | — | — | — | 11.7 | 11.7 | |||||||||||||||||||||||||||||
| Exercise of options to purchase common stock | 117 | — | 7.7 | — | — | 7.7 | |||||||||||||||||||||||||||||
| Issuance of shares for employee stock purchase plan | 40 | — | 6.0 | — | — | 6.0 | |||||||||||||||||||||||||||||
| Stock-based compensation expense | — | — | 49.3 | — | — | 49.3 | |||||||||||||||||||||||||||||
| Restricted stock units vested, net of shares withheld for taxes | 78 | — | (7.0) | — | — | (7.0) | |||||||||||||||||||||||||||||
| Balance at September 30, 2024 | 70,142 | $ | 0.1 | $ | 1,158.7 | $ | (60.4) | $ | 19.7 | $ | 1,118.0 |
See notes to condensed consolidated financial statements. Amounts may not add due to rounding.
INSULET CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
| Nine Months Ended September 30, | |||||||||||
| (in millions) | 2025 | 2024 | |||||||||
| Cash flows from operating activities | |||||||||||
| Net income | $ | 145.5 | $ | 317.6 | |||||||
| Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
| Depreciation and amortization | 66.0 | 59.3 | |||||||||
| Stock-based compensation expense | 42.4 | 49.3 | |||||||||
| Non-cash interest expense | 5.4 | 5.4 | |||||||||
| Loss on extinguishment of debt | 123.9 | — | |||||||||
| Gain on derivative asset | (12.5) | — | |||||||||
| Deferred income taxes | 42.7 | (140.8) | |||||||||
| Provisions for credit losses | 5.2 | 0.7 | |||||||||
| Unrealized loss on investments | — | 3.9 | |||||||||
| Other | 5.0 | 4.9 | |||||||||
| Changes in operating assets and liabilities: | |||||||||||
| Accounts receivable | (43.4) | (20.5) | |||||||||
| Accounts receivable — related party | (42.7) | 5.6 | |||||||||
| Inventories | (4.7) | (38.6) | |||||||||
| Prepaid expenses and other assets | (55.5) | (16.8) | |||||||||
| Accounts payable | 25.6 | 20.0 | |||||||||
| Accrued expenses and other liabilities | 83.2 | 31.8 | |||||||||
| Accrued expenses and other liabilities — related party | (0.1) | 0.8 | |||||||||
| Net cash provided by operating activities | 386.0 | 282.7 | |||||||||
| Cash flows from investing activities | |||||||||||
| Capital expenditures | (56.5) | (71.3) | |||||||||
| Investments in developed software | (13.5) | (6.7) | |||||||||
| Cash paid for investments | — | (0.2) | |||||||||
| Net cash used in investing activities | (69.9) | (78.2) | |||||||||
| Cash flows from financing activities | |||||||||||
| Proceeds from issuance of senior unsecured notes, net of issuance costs | 440.7 | — | |||||||||
| Repayment of convertible debt | (1,052.2) | — | |||||||||
| Settlement of capped call options | 164.6 | — | |||||||||
| Proceeds from issuance of term loan B, net of issuance costs | 15.5 | 130.0 | |||||||||
| Repayment of term loan B | (19.3) | (136.0) | |||||||||
| Repayment of equipment financings | (12.2) | (15.6) | |||||||||
| Financing lease repayments | — | (6.0) | |||||||||
| Repayment of mortgage | (1.9) | (1.8) | |||||||||
| Proceeds from secured borrowing (note 3) | 49.4 | 32.6 | |||||||||
| Repayment of secured borrowing (note 3) | (46.8) | (17.2) | |||||||||
| Repurchase of common stock | (59.6) | — | |||||||||
| Proceeds from exercise of stock options | 17.2 | 7.7 | |||||||||
| Proceeds from issuance of common stock under employee stock purchase plan | 7.1 | 6.0 | |||||||||
| Payment of withholding taxes in connection with vesting of restricted stock units | (25.1) | (7.0) | |||||||||
| Net cash used in financing activities | (522.8) | (7.2) | |||||||||
| Effect of exchange rate changes on cash and cash equivalents | 10.8 | 1.3 | |||||||||
| Net (decrease) increase in cash and cash equivalents | (195.9) | 198.5 | |||||||||
| Cash and cash equivalents at beginning of period | 953.4 | 704.2 | |||||||||
| Cash and cash equivalents at end of period | $ | 757.4 | $ | 902.6 | |||||||
| Supplemental noncash information: | |||||||||||
| Purchases of property and equipment included in accounts payable and accrued expenses | $ | 3.1 | $ | 7.7 | |||||||
| Purchases of property, plant and equipment included in long-term debt | $ | 3.5 | $ | 3.5 | |||||||
| Additions to right-of-use assets resulting from new operating lease liabilities | $ | 8.8 | $ | 0.3 |
See notes to condensed consolidated financial statements. Amounts may not add due to rounding.
INSULET CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
Note 1. Basis of Presentation and Summary of Significant Accounting Policies
Basis of Presentation
The accompanying unaudited financial statements reflect the consolidated income of Insulet Corporation and its subsidiaries (“Insulet” or the “Company”). The unaudited condensed financial statements have been prepared in United States dollars, in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The preparation of the consolidated financial statements in conformity with GAAP requires management to make use of estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities, and the reported amounts of revenues and expenses. Actual results may differ from those estimates. In management’s opinion, the unaudited condensed financial statements contain all normal recurring adjustments necessary for a fair statement of the interim results reported. Operating results for the nine months ended September 30, 2025 are not necessarily indicative of the results that may be expected for the full year ending December 31, 2025, or for any other subsequent interim period. Columns and rows within tables may not add due to rounding.
The year-end balance sheet data was derived from the audited consolidated financial statements. These unaudited condensed financial statements do not include all of the annual disclosures required by GAAP; accordingly, they should be read in conjunction with the Company’s audited consolidated financial statements contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024.
Related Party Transactions
One of the members of the Company’s Board of Directors was married to an executive officer of one of the Company’s distributors. The terms of the distribution agreement are consistent with those prevailing at arm’s length.
Shipping and Handling Costs
Shipping and handling costs included in selling, general and administrative expenses were $6.3 million and $4.5 million for the three months ended September 30, 2025 and 2024, respectively, and were $16.2 million and $11.9 million for the nine months ended September 30, 2025 and 2024, respectively.
Advertising Costs
Advertising costs were $49.0 million and $28.3 million for the three months ended September 30, 2025 and 2024, respectively, and were $86.7 million and $60.2 million for the nine months ended September 30, 2025 and 2024, respectively. Advertising costs are included in selling, general and administrative expenses.
Fair Value Measurements
Fair value is defined as the price that would be received from the sale of an asset or paid to transfer a liability in the principal or most advantageous market in an orderly transaction between market participants on the measurement date. To measure fair value of assets and liabilities, the Company uses the following fair value hierarchy based on three levels of input:
Level 1—observable inputs, such as quoted prices in active markets for identical assets or liabilities;
Level 2—significant other observable inputs that are observable either directly or indirectly; and
Level 3—significant unobservable inputs for which there are little or no market data, which require the Company to develop its own assumptions.
Judgment is involved in estimating inputs, such as discount rates, used in Level 3 fair value measurements. Changes to these inputs can have a significant effect on fair value measurements and amounts that could be realized.
Certain of the Company’s financial instruments, including cash and cash equivalents, accounts receivable, accounts payable, accrued expenses and other liabilities, are carried at cost, which approximates their fair value because of their short-term maturity.
Note 2. Revenue and Contract Acquisition Costs
The following table summarizes the Company’s disaggregated revenue:
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||||||||
| (in millions) | 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||||||||||||||
| U.S. | $ | 497.1 | $ | 395.6 | $ | 1,352.0 | $ | 1,065.6 | |||||||||||||||||||||||||||
| International | 202.1 | 137.9 | 540.2 | 381.4 | |||||||||||||||||||||||||||||||
| Total Omnipod products | 699.2 | 533.5 | 1,892.2 | 1,447.0 | |||||||||||||||||||||||||||||||
| Drug Delivery | 7.1 | 10.3 | 32.2 | 27.1 | |||||||||||||||||||||||||||||||
| Total revenue | $ | 706.3 | $ | 543.9 | $ | 1,924.3 | $ | 1,474.1 |
The percentages of total revenue for customers that represent 10% or more of total revenue were as follows:
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
| Distributor A | 28 | % | 30 | % | 27 | % | 28 | % | |||||||||||||||
| Distributor B | 26 | % | 25 | % | 26 | % | 27 | % | |||||||||||||||
| Distributor C | 24 | % | 19 | % | 24 | % | 22 | % |
Deferred revenue related to unsatisfied performance obligations was included in the following consolidated balance sheet accounts in the amounts shown:
| (in millions) | September 30, 2025 | December 31, 2024 | |||||||||
| Accrued expenses and other current liabilities | $ | 16.5 | $ | 12.0 | |||||||
| Other liabilities | 1.8 | 2.0 | |||||||||
| Total deferred revenue | $ | 18.3 | $ | 14.0 |
Revenue recognized from amounts included in deferred revenue at the beginning of each respective period was as follows:
| Nine Months Ended September 30, | ||||||||||||||
| (in millions) | 2025 | 2024 | ||||||||||||
| Deferred revenue recognized | $ | 10.3 | $ | 9.7 |
Contract acquisition costs, representing capitalized commission costs related to new customers, net of amortization, were included in the following consolidated balance sheet captions in the amounts shown:
| (in millions) | September 30, 2025 | December 31, 2024 | |||||||||
| Prepaid expenses and other current assets | $ | 24.3 | $ | 20.1 | |||||||
| Other assets | 50.8 | 40.8 | |||||||||
| Total capitalized contract acquisition costs, net | $ | 75.1 | $ | 60.9 |
The Company recognized $5.9 million and $4.6 million of amortization of capitalized contract acquisition costs during the three months ended September 30, 2025 and 2024, respectively, and recognized $16.5 million and $13.2 million of amortization of capitalized contract acquisition costs during the nine months ended September 30, 2025 and 2024, respectively.
Note 3. Accounts Receivable, Net
Accounts receivable, net were comprised of the following:
| (in millions) | September 30, 2025 | December 31, 2024 | |||||||||
| Accounts receivable trade, net | $ | 297.4 | $ | 242.8 | |||||||
| Unbilled receivable | 9.1 | 9.7 | |||||||||
| Accounts receivable, net | $ | 306.5 | $ | 252.5 |
The percentages of accounts receivable trade for customers that represent 10% or more of total accounts receivable trade were as follows:
| September 30, 2025 | December 31, 2024 | ||||||||||
| Distributor A | 33 | % | 35 | % | |||||||
| Distributor B | 21 | % | 27 | % | |||||||
| Distributor C | 12 | % | 15 | % |
The Company outsources the insurance claim submissions process to a third-party service provider in one country in which it operates. Under this agreement, the Company transfers certain receivables in exchange for cash in advance. If the third-party service provider is unable to collect on the transferred receivables, the third-party service provider has recourse to the Company. This arrangement is accounted for as a secured borrowing with a pledge of collateral as the transfer does not meet the criteria for sale accounting. Receivables pledged as collateral of $16.5 million and $12.2 million are included in accounts receivable on the consolidated balance sheet as of September 30, 2025 and December 31, 2024, respectively. Liabilities associated with the secured borrowings of $16.5 million and $12.2 million are included within accrued expenses and other current liabilities in the consolidated balance sheet at September 30, 2025 and December 31, 2024, respectively. The classification within current liabilities is based on the expected resolution of the underlying receivables. The proceeds from and repayments of secured borrowings are reflected as cash flows provided by (used in) financing activities in the consolidated statement of cash flows.
Note 4. Inventories
Inventories were comprised of the following:
| (in millions) | September 30, 2025 | December 31, 2024 | |||||||||
| Raw materials | $ | 181.4 | $ | 156.7 | |||||||
| Work in process | 73.4 | 81.2 | |||||||||
| Finished goods | 191.5 | 192.5 | |||||||||
| Total inventories | $ | 446.3 | $ | 430.4 |
Following the strategic decision to not move forward with the commercialization of Omnipod GO, the Company recorded a charge of $13.5 million related to certain inventory components that it no longer expected to utilize, which is included in cost of revenue in the consolidated statements of income for the nine months ended September 30, 2024.
Note 5. Cloud Computing Costs
Capitalized costs to implement cloud computing arrangements at cost and accumulated amortization were as follows:
| (in millions) | September 30, 2025 | December 31, 2024 | |||||||||
| Short-term portion | $ | 42.4 | $ | 31.7 | |||||||
| Long-term portion | 149.3 | 135.3 | |||||||||
| Total capitalized implementation costs | 191.7 | 167.0 | |||||||||
| Less: accumulated amortization | (86.2) | (62.4) | |||||||||
| Capitalized implementation costs, net | $ | 105.5 | $ | 104.6 |
Amortization expense was $8.4 million and $6.9 million for the three months ended September 30, 2025 and 2024, respectively, and was $23.9 million and $19.5 million for the nine months ended September 30, 2025 and 2024, respectively.
Note 6. Goodwill and Other Intangible Assets, Net
The change in the carrying amount of goodwill was as follows:
| (in millions) | |||||||||||
| Balance at December 31, 2024 | $ | 51.5 | |||||||||
| Foreign currency translation | 0.1 | ||||||||||
| Balance at September 30, 2025 | $ | 51.6 |
The gross carrying amount, accumulated amortization and net book value of intangible assets at the end of each period were as follows:
| September 30, 2025 | December 31, 2024 | ||||||||||||||||||||||||||||||||||
| (in millions) | Gross Carrying Amount | Accumulated Amortization | Net Book Value | Gross Carrying Amount | Accumulated Amortization | Net Book Value | |||||||||||||||||||||||||||||
| Customer relationships | $ | 43.2 | $ | (35.2) | $ | 7.9 | $ | 43.1 | $ | (33.5) | $ | 9.6 | |||||||||||||||||||||||
| Internal-use software | 62.1 | (13.2) | 48.8 | 52.4 | (15.6) | 36.8 | |||||||||||||||||||||||||||||
| Developed technology | 27.4 | (6.4) | 21.0 | 27.4 | (4.9) | 22.5 | |||||||||||||||||||||||||||||
| Patents | 36.3 | (9.0) | 27.3 | 36.2 | (6.5) | 29.6 | |||||||||||||||||||||||||||||
| Total intangible assets | $ | 168.9 | $ | (63.9) | $ | 105.0 | $ | 159.1 | $ | (60.6) | $ | 98.5 |
Amortization expense for intangible assets was $2.7 million and $2.5 million for the three months ended September 30, 2025 and 2024, respectively, and was $7.7 million and $7.3 million for the nine months ended September 30, 2025 and 2024, respectively.
Note 7. Investments
Equity Securities Measured at Fair Value on a Non-Recurring Basis
The total carrying value of the Company’s investments in equity securities without readily determinable fair values was $19.1 million and $21.9 million as of September 30, 2025 and December 31, 2024, respectively, and was included within other assets on the consolidated balance sheets. These investments are carried at cost less impairment, if any. If an observable price change in orderly transactions for the identical or similar investment in the same issuer is identified, the investments are measured at fair value as of the date that the observable transaction occurred and categorized as Level 2 in the fair value hierarchy. The Company recorded a $2.8 million impairment associated with one equity security during the nine months ended September 30, 2025, which is included in other income (expense), net. There was no impairment during any of the other periods presented. As of both September 30, 2025 and December 31, 2024 cumulative gains were $0.8 million.
Debt Securities
The Company has a strategic investment in debt securities of a privately held entity, which mature in December 2026 unless converted earlier and is included in other assets on the consolidated balance sheets. During the nine months ended September 30, 2025, the Company recorded a $4.7 million provision for credit loss associated with this debt investment, which is included in selling, general and administrative expenses. No provision for credit loss was recorded during any of the other periods presented. The amortized cost basis of the debt securities was $5.0 million as of both September 30, 2025 and December 31, 2024. Refer to note 10 for the fair values.
Note 8. Accrued Expenses and Other Current Liabilities
The components of accrued expenses and other current liabilities were as follows:
| (in millions) | September 30, 2025 | December 31, 2024 | |||||||||
| Accrued rebates | $ | 184.0 | $ | 148.3 | |||||||
| Employee compensation and related costs | 172.5 | 142.9 | |||||||||
| Professional and consulting services | 54.3 | 51.6 | |||||||||
| Other | 107.9 | 81.2 | |||||||||
| Accrued expenses and other current liabilities | $ | 518.7 | $ | 423.9 |
Product Warranty Costs
The Company provides a four-year warranty on its Controllers and Personal Diabetes Managers (“PDMs”) sold in the United States and Europe and a five-year warranty on Controllers and PDMs sold in Canada and may replace Pods that do not function in accordance with product specifications. The Company estimates its warranty obligation at the time the product is shipped based on historical experience and the estimated cost to service the claims. Cost to service the claims reflects the current product cost, reclaim costs, shipping and handling costs and direct and incremental distribution and customer service support costs. Since the Company continues to introduce new products and versions, the anticipated performance of the product over the warranty period is also considered in estimating warranty reserves. Warranty expense is recorded in cost of revenue in the consolidated statements of income.
Reconciliations of the changes in the Company’s product warranty liability were as follows:
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| (in millions) | 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||
| Product warranty liability at beginning of period | $ | 17.1 | $ | 11.6 | $ | 13.9 | $ | 10.2 | |||||||||||||||
| Warranty expense | 6.1 | 6.8 | 20.5 | 18.1 | |||||||||||||||||||
| Change in estimate | — | — | — | (0.5) | |||||||||||||||||||
| Warranty fulfillment | (6.5) | (5.5) | (17.7) | (14.9) | |||||||||||||||||||
| Product warranty liability at the end of period | $ | 16.7 | $ | 12.9 | $ | 16.7 | $ | 12.9 |
Note 9. Debt
The components of debt consisted of the following:
| September 30, 2025 | December 31, 2024 | ||||||||||||||||
| (in millions) | Maturity Date | Amount | Amount | ||||||||||||||
| Equipment financing | 2025 | 2.7 | 8.7 | ||||||||||||||
| Mortgage | 2025 | 59.1 | 60.9 | ||||||||||||||
| Convertible Senior Notes | 2026 | — | 800.0 | ||||||||||||||
| Equipment financings | 2028 | 38.1 | 40.8 | ||||||||||||||
| Revolving Credit Facility | 2030 | — | — | ||||||||||||||
| Term Loan B | 2031 | 478.8 | 482.5 | ||||||||||||||
| Senior Unsecured Notes | 2033 | 450.0 | — | ||||||||||||||
| Unamortized debt discount | 2025 - 2033 | (3.6) | (5.4) | ||||||||||||||
| Debt issuance costs | 2025 - 2033 | (10.1) | (7.7) | ||||||||||||||
| Total debt, net | 1,014.8 | 1,379.8 | |||||||||||||||
| Less: current portion | 79.9 | 83.8 | |||||||||||||||
| Total long-term debt, net | $ | 934.9 | $ | 1,296.1 |
Convertible Senior Notes
During the three months ended September 30, 2025, the Company paid $510.7 million in cash to redeem all of the remaining 0.375% Convertible Senior Notes due September 2026 (the “Convertible Notes”) that were previously outstanding. The difference between the cash paid and the $380.1 million aggregate principal amount outstanding ($378.5 million net of issuance costs) upon conversion was recorded to additional paid in capital. During the nine months ended September 30, 2025, the Company repurchased all outstanding Convertible Notes ($796.0 million net of issuance costs) for $1,052.2 million in cash, which resulted in a $123.9 million loss on extinguishment and a $132.3 million decrease to additional paid in capital for the portion that was converted. Additionally, during the three and nine months ended September 30, 2025, the Company received proceeds from the settlement of capped calls options totaling $88.9 million and $164.6 million, respectively.
The Company’s Convertible Notes had an effective interest rate of 1.25%. The components of interest expense related to the Convertible Notes were as follows:
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| (in millions) | 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||
| Contractual interest expense | $ | 0.2 | $ | 0.8 | $ | 1.4 | $ | 2.3 | |||||||||||||||
| Amortization of debt issuance costs | 1.7 | 0.8 | 2.9 | 2.3 | |||||||||||||||||||
| Total interest recognized on the Convertible Notes | $ | 1.9 | $ | 1.5 | $ | 4.2 | $ | 4.5 |
Senior Secured Credit Agreement
In March 2025, the Company upsized the borrowing capacity under its Revolving Credit Facility to $500 million and extended the maturity date to March 2030.
In June 2025, the Company amended its Term Loan B to bear interest at a rate of Secured Overnight Financing Rate (“SOFR”) plus 2.00%. At the same time, the Company amended its Revolving Credit Facility such that borrowings bear interest at a rate of SOFR plus an applicable margin of 1.50% to 2.00% based on the Company’s total leverage ratio.
Senior Unsecured Notes
In March 2025, the Company issued $450 million aggregate principal amount of 6.5% senior unsecured notes due April 2033, which have an effective interest rate of 6.84%. The net proceeds of $440.7 million were used to repurchase a portion of the Convertible Notes. The senior unsecured notes contain leverage and fixed charge coverage ratio covenants, both of which are measured upon the incurrence of future debt, as well as other customary covenants.
Carrying Value
At the end of each period, the carrying value of the Company’s debt was comprised of the following:
| (in millions) | September 30, 2025 | December 31, 2024 | |||||||||
| Convertible Senior Notes | $ | — | $ | 794.9 | |||||||
| Term Loan B | 474.0 | 475.1 | |||||||||
| Senior Unsecured Notes | 441.2 | — | |||||||||
| Equipment financings | 40.6 | 49.3 | |||||||||
| Mortgage | 59.0 | 60.6 | |||||||||
| Total debt, net | $ | 1,014.8 | $ | 1,379.8 |
Note 10. Financial Instruments and Fair Value
Fair value disclosures for equity investments without readily determinable fair values are disclosed in note 7.
Financial Instruments Disclosed at Fair Value
The following tables provide a summary of the significant financial instruments that are disclosed at fair value on a recurring basis:
| Fair Value Measurements at September 30, 2025 | |||||||||||||||||||||||
| (in millions) | Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||
| Term Loan B**(1)** | $ | 481.7 | $ | — | $ | — | $ | 481.7 | |||||||||||||||
| Senior Unsecured Notes**(1)** | 468.2 | — | — | 468.2 | |||||||||||||||||||
| Equipment financings**(2)** | — | — | 40.6 | 40.6 | |||||||||||||||||||
| Mortgage**(2)** | — | — | 59.0 | 59.0 | |||||||||||||||||||
| Total | $ | 950.0 | $ | — | $ | 99.7 | $ | 1,049.6 |
| Fair Value Measurements at December 31, 2024 | |||||||||||||||||||||||
| (in millions) | Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||
| Term Loan B**(1)** | $ | 485.8 | $ | — | $ | — | $ | 485.8 | |||||||||||||||
| Convertible Senior Notes**(1)** | — | 1,018.9 | — | 1,018.9 | |||||||||||||||||||
| Equipment financings**(2)** | — | — | 49.3 | 49.3 | |||||||||||||||||||
| Mortgage**(2)** | — | — | 60.6 | 60.6 | |||||||||||||||||||
| Total | $ | 485.8 | $ | 1,018.9 | $ | 109.9 | $ | 1,614.7 |
(1) Fair value was determined using quoted market prices obtained from third-party pricing sources.
(2) Fair value approximates carrying value and was determined using the cost basis.
Financial Instruments Measured at Fair Value on a Recurring Basis
The following tables provide a summary of financial instruments that are measured at fair value on a recurring basis:
| Fair Value Measurements at September 30, 2025 | |||||||||||||||||||||||
| (in millions) | Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||
| Assets: | |||||||||||||||||||||||
| Cash(1) | $ | 190.1 | $ | — | $ | — | $ | 190.1 | |||||||||||||||
| Money market mutual funds(1) | 437.2 | — | — | 437.2 | |||||||||||||||||||
| Term deposits(1) | — | 130.2 | — | 130.2 | |||||||||||||||||||
| Interest rate swaps(2) | — | 1.1 | — | 1.1 | |||||||||||||||||||
| Total assets at fair value | $ | 627.3 | $ | 131.2 | $ | — | $ | 758.5 | |||||||||||||||
| Liabilities: | |||||||||||||||||||||||
| Interest rate swaps(2) | $ | — | $ | 0.8 | $ | — | $ | 0.8 |
| Fair Value Measurements at December 31, 2024 | |||||||||||||||||||||||
| (in millions) | Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||
| Cash(1) | $ | 133.4 | $ | — | $ | — | $ | 133.4 | |||||||||||||||
| Money market mutual funds(1) | 819.9 | — | — | 819.9 | |||||||||||||||||||
| Interest rate swaps(2) | — | 5.4 | — | 5.4 | |||||||||||||||||||
| Debt securities(3) | — | — | 4.7 | 4.7 | |||||||||||||||||||
| Total assets at fair value | $ | 953.3 | $ | 5.4 | $ | 4.7 | $ | 963.5 |
(1) Cash and cash equivalents are carried at face amounts, which approximate their fair values.
(2) Fair value represents the estimated amounts the Company would receive or pay to terminate the contracts and is determined using industry standard valuation models and market-based observable inputs, including credit risk and interest rate yield curves. The fair value of the swaps is included in other assets at September 30, 2025 and in prepaid expenses and other current assets at December 31, 2024.
(3) Fair value is determined using a discounted cash flow valuation model and market-based unobservable inputs, including credit spread and risk free rate ranging from 4.0% to 4.7%.
Judgment is involved in estimating inputs, such as discount rates, used in Level 3 fair value measurements. Changes to these inputs can have a significant effect on fair value measurements and amounts that could be realized. There were no changes in the fair value of the Level 3 debt securities during the three and nine months ended September 30, 2024, nor during the three months ended September 30, 2025. Below is a reconciliation of changes in fair value of our debt securities for the nine months ended September 30, 2025.
| (in millions) | Debt Securities | ||||
| Balance at beginning of period | $ | 4.7 | |||
| Provision for credit loss included in selling, general and administrative expenses | (4.7) | ||||
| Balance at the end of period | $ | — |
Below is a reconciliation of changes in fair value of other investments for the three and nine months ended September 30, 2024.
| (in millions) | Three Months Ended September 30, 2024 | Nine Months Ended September 30, 2024 | |||||||||
| Balance at beginning of period | $ | 2.1 | $ | 3.8 | |||||||
| Unrealized loss included in other expense, net | (2.1) | (3.8) | |||||||||
| Balance at the end of period | $ | — | $ | — |
During the three and nine months ended September 30, 2025, there were no changes in the fair value of other investments categorized as Level 3.
Note 11. Derivative Instruments
The Company manages interest rate exposure through the use of interest rate swap transactions with financial institutions acting as principal counterparties. In April 2025, the Company’s previous interest rate swaps expired and were replaced with interest rate swaps in which the Company receives variable rate interest payments and pays fixed interest at a weighted average rate of 3.47% on a total notional value of $460.0 million of the Term Loan B. The interest rate swaps have been designated as cash flow hedges.
As of September 30, 2025, the amount of net gains related to the interest rate swaps included in accumulated other comprehensive income will be reclassified into the statement of income over the next 12 months was insignificant. When recognized, gains and losses on cash flow hedges reclassified from accumulated other comprehensive income (loss) are recognized within interest expense in the consolidated statement of income.
As discussed in Note 9, in June 2025, the Company provided notice of redemption for the remaining $380.1 million aggregate principal amount of its outstanding Convertible Notes. The Convertible Notes were fully redeemed in August 2025 for cash based on the Company's volume-weighted average stock price over the redemption period. The election to redeem the notes in cash resulted in an embedded derivative, which required bifurcation from the host debt instrument. The embedded derivative represented the variability in the cash settlement over the redemption period and subsequent changes in fair value based on the change in stock price over the redemption period were recognized in earnings. As a result, the Company recognized a gain of $12.5 million within other income (expense), net for both the three and nine months ended September 30, 2025. The corresponding derivative asset was de-recognized upon settlement of the outstanding Convertible Notes, which resulted in a $12.5 million decrease to additional paid in capital.
Note 12. Commitments and Contingencies
Legal Proceedings
On April 24, 2025, the United States District Court for the District of Massachusetts entered final judgment in favor of Insulet Corporation in its ongoing litigation against EOFlow Co., Ltd.; EOFlow, Inc.; Nephria Bio, Inc.; and EOFlow’s CEO, Jesse Kim (collectively, “Defendants”), Insulet Corp. v. EOFlow Co. Ltd. et al., 1:23-cv-11780-FDS (D. Mass.). The litigation concerned the Defendants’ misappropriation of Insulet’s proprietary trade secrets relating to the design and manufacture of the Omnipod insulin patch pump. On December 3, 2024, a unanimous jury found four trade secrets asserted by Insulet valid and misappropriated and awarded Insulet total damages of $452 million, composed of $170 million in compensatory damages and $282 million in exemplary damages. The Court’s April 24, 2025 orders upheld the jury verdict and further entered a permanent injunction against Defendants. The injunction prohibits Defendants and others subject to the order from using, possessing, selling, distributing, or seeking regulatory approval for any products that were designed, developed, or manufactured, in whole or in part, using or relying on Insulet’s trade secrets. The injunction is worldwide and took effect immediately subject to a limited exception that permits six months of continuing sales to those patients of EOFlow that existed in the Republic of Korea and the European Union as of October 2023. The permanent injunction further requires EOFlow to assign certain patent applications to Insulet, disgorge any break-up fees received from Medtronic in connection with a previously contemplated acquisition, and submit to ongoing audits to ensure compliance with the Court’s orders. In view of the scope of the permanent injunction, the Court reduced Insulet’s monetary award to $59.4 million to avoid a double recovery.
The Company has not recorded the damages awarded in the Company’s consolidated statements of income as EOFlow has appealed and Insulet has cross-appealed. EOFlow filed a motion to the court of appeals requesting that the permanent injunction against it be stayed in its entirety during the pendency of the appeal. On July 7, 2025, the court of appeals granted a stay in part “only to the extent that the district court’s temporary stay (set to end October 24, 2025), regarding EOFlow patients in the Republic of Korea and the European Union, is extended (1) to include patients residing in the European Union who were using the relevant product(s) as of April 24, 2025, and (2) until further notice of the court.”
Note 13. Segment and Geographic Data
The Company’s product offering primarily consists of the Omnipod platform and drug delivery device based on the Omnipod platform. Operating segments are defined as components of an enterprise for which separate financial information is available that is evaluated on a regular basis by the chief operating decision-maker (“CODM”) in deciding how to allocate resources to an individual segment and in assessing performance of the segment. The Company has concluded that its Chief Executive Officer (“CEO”) is the CODM as the CEO is the ultimate decision maker for key operating decisions, determining the allocation of resources and assessing the financial performance of the Company. The Company operates under one reportable segment. While decisions, allocations, and assessments are performed by the CODM using consolidated operating income, net income is also provided to the CODM.
Geographic information about revenue, based on customer location, is as follows:
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| (in millions) | 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||
| U.S. | $ | 504.2 | $ | 406.0 | $ | 1,384.1 | $ | 1,092.8 | |||||||||||||||
| International | 202.1 | 137.9 | 540.2 | 381.4 | |||||||||||||||||||
| Total revenue | $ | 706.3 | $ | 543.9 | $ | 1,924.3 | $ | 1,474.1 |
There were no significant segment expenses that are regularly provided to the CODM other than those reported in the Company’s condensed consolidated statements of income for the three and nine months ended September 30, 2025 and 2024.
Geographic information about long-lived assets, net, excluding goodwill and other intangible assets is as follows:
| (in millions) | September 30, 2025 | December 31, 2024 | |||||||||
| U.S. | $ | 461.9 | $ | 475.9 | |||||||
| Malaysia | 164.2 | 159.1 | |||||||||
| China | 74.8 | 78.5 | |||||||||
| Other | 23.2 | 9.7 | |||||||||
| Total long-lived assets, net | $ | 724.1 | $ | 723.1 |
Note 14. Equity
Equity Award Plan
In May 2025, the Company adopted the 2025 Stock Option and Incentive Plan (the “2025 Plan”), which replaced its previous stock option and incentive plan. The 2025 Plan provides for a maximum of 7.4 million shares to be issued.
Stock-Based Compensation Expense
Compensation expense related to stock-based awards was recorded as follows:
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| (in millions) | 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||
| Cost of revenue | $ | 0.2 | $ | 0.2 | $ | 0.6 | $ | 0.5 | |||||||||||||||
| Research and development expenses | 3.1 | 2.3 | 8.7 | 6.5 | |||||||||||||||||||
| Selling, general and administrative expenses | 13.4 | 15.7 | 33.2 | 42.3 | |||||||||||||||||||
| Total | $ | 16.7 | $ | 18.2 | $ | 42.4 | $ | 49.3 |
Performance Share Units
During the nine months ended September 30, 2025, the Company granted 119,459 performance stock units (“PSUs”) with a weighted-average grant-date fair value per share of $299.58. The PSUs included a relative total shareholder return (total shareholder return for the Company compared with total shareholder return of a peer group) as a market component. Depending on the achievement of the performance criteria and the Company’s relative market performance during the three-year performance period, a recipient of the award could ultimately vest at up to 250% of the target award. Stock-based payments that contain both performance and market condition are recognized when performance conditions are probable of being achieved based on the grant date fair value. The Company uses the Monte Carlo model to estimate the probability of satisfying the market condition. The weighted-average assumptions used in the Monte Carlo model for PSUs granted were:
| Risk-free interest rate | 4.0% | ||||
| Expected stock price volatility | 41.7% | ||||
| Peer group stock price volatility | 46.0% | ||||
| Correlation of returns | 29.2% |
Deferred Compensation Plan
The Company has an unfunded, non-qualified deferred compensation plan for non-employee directors that allows participants to defer receipt of RSUs or cash compensation in the form of stock until a later date. Deferred awards are credited to a deferred stock account. The shares are held in a rabbi trust, which is classified and accounted for as equity in a manner consistent with the accounting for treasury stock. As of September 30, 2025, 3,495 shares were held in the trust. No shares were held in the trust as of December 31, 2024. The shares will be distributed when board service ceases.
Share Repurchase Program
In March 2025, the Company’s Board of Directors authorized a program to repurchase up to $125 million of common stock through December 31, 2026 to offset dilution from stock-based compensation. During the three and nine months ended September 30, 2025, the Company repurchased approximately 91 thousand shares for $29.6 million and 184 thousand shares for $59.6 million, respectively.
Note 15. Income Taxes
The Company’s effective tax rate was 28.7% and 27.0% for the three and nine months ended September 30, 2025, respectively. For both the three and nine months ended September 30, 2025, the tax rate varied from the U.S. statutory rate primarily due to non-deductible charges from the repurchase of the Company’s convertible debt.
The Company's effective tax rate was 6.5% and a benefit of 68.2% for the three and nine months ended September 30, 2024, respectively. During the three and nine months ended September 30, 2024, the Company recorded a tax benefit of $12.1 million and $165.6 million, respectively, associated with the release of the majority of its valuation allowance, of which $136.1 million of the tax benefit recorded during the nine months ended September 30, 2024 related to a discrete tax benefit arising from the expected realization of deferred tax assets in future years. Additionally, during the three and nine months ended September 30, 2024, the Company recorded a discrete tax benefit of $2.7 million and 7.5 million, respectively, associated with a U.S. federal research and development tax credit recovery project for tax years 2017 through 2022.
Note 16. Earnings Per Share
Basic earnings per share is computed by dividing net income by the weighted average number of common shares outstanding for the period. Diluted earnings per share is computed using the weighted average number of common shares outstanding and, when dilutive, common share equivalents. The computation of basic and diluted earnings per share was as follows:
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| (in millions, except share and per share data) | 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||
| Net income | $ | 87.6 | $ | 77.5 | $ | 145.5 | $ | 317.6 | |||||||||||||||
| Add back interest expense, net of tax | — | 2.4 | 2.8 | 7.1 | |||||||||||||||||||
| Net income, diluted | $ | 87.6 | $ | 79.9 | $ | 148.3 | $ | 324.7 | |||||||||||||||
| Weighted average number of common shares outstanding, basic (in thousands) | 70,367 | 70,123 | 70,343 | 70,047 | |||||||||||||||||||
| Restricted stock units | 201 | 140 | 197 | 98 | |||||||||||||||||||
| Stock options | 93 | 160 | 107 | 157 | |||||||||||||||||||
| Convertible Senior Notes | — | 3,528 | 1,645 | 3,528 | |||||||||||||||||||
| Weighted average number of common shares outstanding, diluted (in thousands) | 70,661 | 73,951 | 72,292 | 73,830 | |||||||||||||||||||
| Earnings per share: | |||||||||||||||||||||||
| Basic | $ | 1.24 | $ | 1.11 | $ | 2.07 | $ | 4.53 | |||||||||||||||
| Diluted | $ | 1.24 | $ | 1.08 | $ | 2.05 | $ | 4.40 |
The number of common share equivalents excluded from the computation of diluted earnings per share because either the effect would have been anti-dilutive, or the performance criteria related to the units had not yet been met, were as follows:
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| (in thousands) | 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||
| Restricted stock units | 418 | 491 | 427 | 473 | |||||||||||||||||||
| Stock options | 125 | 231 | 131 | 243 | |||||||||||||||||||
| Total | 543 | 722 | 558 | 716 |
Note 17. Accumulated Other Comprehensive Income
Changes in the components of accumulated other comprehensive income (loss), net of tax, were as follows:
| Three Months Ended September 30, 2025 | Nine Months Ended September 30, 2025 | ||||||||||||||||||||||||||||||||||||||||||||||
| (in millions) | Foreign Currency Translation Adjustment | Unrealized Loss on Securities | Unrealized Gain on Cash Flow Hedges | Accumulated Other Comprehensive Income | Foreign Currency Translation Adjustment | Unrealized Loss on Securities | Unrealized Gain on Cash Flow Hedges | Accumulated Other Comprehensive (Loss) Income | |||||||||||||||||||||||||||||||||||||||
| Balance at beginning of period | $ | 10.3 | $ | (0.3) | $ | 5.3 | $ | 15.4 | $ | (22.3) | $ | (0.3) | $ | 9.4 | $ | (13.2) | |||||||||||||||||||||||||||||||
| Other comprehensive income (loss) before reclassifications | (3.3) | — | (5.0) | (8.3) | 29.3 | — | (19.5) | 9.8 | |||||||||||||||||||||||||||||||||||||||
| Amounts reclassified to net income (1) | — | — | 5.1 | 5.1 | — | — | 15.6 | 15.6 | |||||||||||||||||||||||||||||||||||||||
| Balance at the end of period | $ | 7.0 | $ | (0.3) | $ | 5.5 | $ | 12.2 | $ | 7.0 | $ | (0.3) | $ | 5.5 | $ | 12.2 |
| Three Months Ended September 30, 2024 | Nine Months Ended September 30, 2024 | ||||||||||||||||||||||||||||||||||||||||||||||
| (in millions) | Foreign Currency Translation Adjustment | Unrealized Loss on Securities | Unrealized Gain on Cash Flow Hedges | Accumulated Other Comprehensive (Loss) Income | Foreign Currency Translation Adjustment | Unrealized Loss on Securities | Unrealized Gain on Cash Flow Hedges | Accumulated Other Comprehensive Income | |||||||||||||||||||||||||||||||||||||||
| Balance at beginning of period | $ | (22.1) | $ | (0.3) | $ | 18.1 | $ | (4.4) | $ | (14.4) | $ | (0.3) | $ | 22.8 | $ | 8.0 | |||||||||||||||||||||||||||||||
| Other comprehensive loss before reclassifications | 29.7 | — | (12.6) | 17.2 | 22.0 | — | (30.4) | (8.4) | |||||||||||||||||||||||||||||||||||||||
| Amounts reclassified to net income (1) | — | — | 6.9 | 6.9 | — | — | 20.1 | 20.1 | |||||||||||||||||||||||||||||||||||||||
| Balance at the end of period | $ | 7.6 | $ | (0.3) | $ | 12.4 | $ | 19.7 | $ | 7.6 | $ | (0.3) | $ | 12.4 | $ | 19.7 |
(1) Presented net of income taxes, the amounts of which are insignificant. There is no income tax impact on currency translation adjustments.
Note 18. Subsequent Event
In October 2025, the Company repaid the remaining $59.1 million outstanding under its mortgage upon maturity.
Next: Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations