[PART I. FINANCIAL INFORMATION](index=3&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) This section presents Avalo Therapeutics, Inc.'s unaudited condensed consolidated financial statements and related notes for the periods ended June 30, 2025, and December 31, 2024 [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) This section presents Avalo Therapeutics, Inc.'s unaudited condensed consolidated financial statements and related notes for the periods ended June 30, 2025, and December 31, 2024 [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) This section provides a snapshot of Avalo Therapeutics, Inc.'s financial position, detailing assets, liabilities, and equity as of June 30, 2025, and December 31, 2024 Condensed Consolidated Balance Sheets (in thousands): | Item | June 30, 2025 | December 31, 2024 | Change (2025 vs 2024) | | :-------------------------------- | :------------ | :---------------- | :-------------------- | | Cash and cash equivalents | $42,290 | $134,546 | $(92,256) | | Short-term investments | $70,972 | — | $70,972 | | Total current assets | $115,185 | $138,890 | $(23,705) | | Total assets | $126,583 | $150,732 | $(24,149) | | Total current liabilities | $9,259 | $6,960 | $2,299 | | Total liabilities | $22,009 | $17,700 | $4,309 | | Total stockholders' equity | $104,574 | $133,032 | $(28,458) | [Condensed Consolidated Statements of Operations and Comprehensive (Loss) Income](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20(Loss)%20Income) This section outlines Avalo Therapeutics, Inc.'s financial performance, including revenues, expenses, and net loss or income for the three and six months ended June 30, 2025, and 2024 Condensed Consolidated Statements of Operations and Comprehensive (Loss) Income (in thousands, except per share data): | Item | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Total operating expenses | $19,316 | $9,575 | $33,984 | $42,341 | | Loss from operations | $(19,316) | $(9,575) | $(33,984) | $(42,341) | | Change in fair value of derivative liability | $(2,530) | $(5,040) | $(2,150) | $(5,160) | | Interest income, net | $1,102 | $1,039 | $2,249 | $1,138 | | Change in fair value of warrant liability | — | $112,046 | — | $112,046 | | Net (loss) income | $(20,765) | $98,463 | $(33,914) | $(22,827) | | Net (loss) income per share - basic | $(1.92) | $4.21 | $(3.18) | $(24.11) | | Net loss per share - diluted | $(1.92) | $(14.07) | $(3.18) | $(30.63) | - The company experienced a **significant shift** from net income of **$98.5 million** in Q2 **2024** to a net loss of **$20.8 million** in Q2 **2025**, **primarily due to** the absence of a large gain from the change in fair value of warrant liability recognized in the prior year[10](index=10&type=chunk) - For the six months ended June 30, **2025**, **net loss increased** to **$33.9 million** from **$22.8 million** in the prior year, despite a decrease in total operating expenses, **largely influenced by** the non-recurring warrant liability fair value changes in **2024**[10](index=10&type=chunk) [Condensed Consolidated Statements of Mezzanine and Stockholders' Equity](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Mezzanine%20and%20Stockholders'%20Equity) This section details changes in Avalo Therapeutics, Inc.'s mezzanine and stockholders' equity for the six months ended June 30, 2025, and 2024 Changes in Stockholders' Equity (in thousands): | Item | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------ | :----------------------------- | :----------------------------- | | Balance, December 31, prior year | $133,032 | $7,304 | | Issuance of common stock | $1 | $815 | | Vesting of Restricted Stock Units | $(510) | — | | Shares purchased through ESPP | $40 | — | | Stock-based compensation | $5,959 | $1,100 | | Unrealized loss on investments, net | $(34) | — | | Net loss | $(33,914) | $(22,827) | | Balance, June 30, current year | $104,574 | $(13,608) | - **Stockholders' equity decreased** from **$133.0 million** at December 31, **2024**, to **$104.6 million** at June 30, **2025**, **primarily due to** the net loss of **$33.9 million**, **partially offset by** stock-based compensation[12](index=12&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This section presents Avalo Therapeutics, Inc.'s cash inflows and outflows from operating, investing, and financing activities for the six months ended June 30, 2025, and 2024 Condensed Consolidated Statements of Cash Flows (in thousands): | Activity | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------ | :----------------------------- | :----------------------------- | | Net cash used in operating activities | $(20,847) | $(22,485) | | Net cash (used in) provided by investing activities | $(70,860) | $356 | | Net cash (used in) provided by financing activities | $(469) | $108,140 | | Net (decrease) increase in cash, cash equivalents and restricted cash | $(92,176) | $86,011 | | Cash, cash equivalents, and restricted cash at end of period | $42,520 | $93,557 | - The company experienced a **significant net decrease in cash**, cash equivalents, and restricted cash of **$92.2 million** for the six months ended June 30, **2025**, compared to a net increase of **$86.0 million** in the prior year, **primarily driven by** substantial purchases of investments and reduced financing activities[16](index=16&type=chunk) [Notes to Unaudited Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed explanations and disclosures supporting the unaudited condensed consolidated financial statements [1. Business](index=8&type=section&id=1.%20Business) This note describes Avalo Therapeutics, Inc.'s clinical-stage biotechnology focus, lead asset development, and financial sustainability - Avalo Therapeutics, Inc. is a clinical-stage biotechnology company focused on developing IL-1β-based treatments for immune-mediated inflammatory diseases, with its lead asset, AVTX-009, currently in a Phase **2** clinical trial for hidradenitis suppurativa (HS)[18](index=18&type=chunk) - The company has **incurred significant operating and cash losses** since inception, funding operations **primarily through** equity sales, out-licensing, and asset sales[20](index=20&type=chunk) - As of June 30, **2025**, Avalo had **$113.3 million** in cash and cash equivalents and short-term investments, which are **expected to fund operations for at least twelve months** from the filing date[20](index=20&type=chunk)[21](index=21&type=chunk) [2. Basis of Presentation and Significant Accounting Policies](index=8&type=section&id=2.%20Basis%20of%20Presentation%20and%20Significant%20Accounting%20Policies) This note outlines the accounting principles, presentation basis, and significant policies used in preparing the financial statements - The unaudited condensed consolidated financial statements are prepared in accordance with U.S. GAAP, with certain information condensed or omitted as permitted by SEC rules for interim reporting[22](index=22&type=chunk)[23](index=23&type=chunk) - In Q1 **2025**, the company **reclassified other receivables** into prepaid and other current assets to conform with current period presentation[25](index=25&type=chunk) - **All investments are classified as available-for-sale** as of June 30, **2025**, reported at fair value with unrealized gains/losses included in accumulated other comprehensive loss[31](index=31&type=chunk) - The FASB issued ASU **2023-09** (Income Tax Disclosures) and ASU **2024-03** (Disaggregation of Income Statement Expenses), with the company evaluating the impact of ASU **2024-03**[32](index=32&type=chunk)[33](index=33&type=chunk) [3. Asset Acquisition](index=10&type=section&id=3.%20Asset%20Acquisition) This note details the acquisition of AVTX-009 through the AlmataBio Transaction and its accounting treatment as an asset acquisition - On March **27**, **2024**, Avalo **acquired** AVTX-009 through the AlmataBio Transaction, structured as a stock-for-stock merger, resulting in the issuance of common stock and Series C Preferred Stock[34](index=34&type=chunk) - The **acquisition was treated as an asset acquisition**, with **substantially all consideration allocated to acquired in-process research and development (IPR&D)** for AVTX-009, **recognized as an operating expense**[36](index=36&type=chunk) AlmataBio Transaction Consideration and Acquired Assets (in thousands): | Item | Six Months Ended June 30, 2024 | | :---------------------------------------------------- | :----------------------------- | | Stock consideration | $12,272 | | Milestone payment due upon close of private placement | $7,500 | | Milestone payment due upon first patient dosed in Phase 2 trial | $5,000 | | Transaction costs | $2,402 | | **Total GAAP Purchase Price at Close** | **$27,174** | | Acquired IPR&D | $27,641 | | Cash | $356 | | Accrued expenses and other current liabilities | $(823) | | **Total net assets acquired and liabilities assumed** | **$27,174** | [4. Revenue](index=11&type=section&id=4.%20Revenue) This note discusses Avalo Therapeutics, Inc.'s revenue recognition policies and the expiration of its Millipred® license and supply agreement - The **license and supply agreement for Millipred® expired** on September **30**, **2023**, and Avalo recognized **no gross revenue from product sales** for the three and six months ended June 30, **2025**, or June 30, **2024**[38](index=38&type=chunk) - The company continues to monitor estimates for commercial liabilities related to Millipred®, including sales returns and profit share reconciliation, which could result in future expense or benefit[38](index=38&type=chunk) [5. Net (Loss) Income Per Share](index=12&type=section&id=5.%20Net%20(Loss)%20Income%20Per%20Share) This note explains the calculation of net loss per share for common stock and the treatment of anti-dilutive securities - **Net loss per share for common stock was computed using the two-class method**, with no allocation of undistributed losses to participating securities during net loss periods[39](index=39&type=chunk)[40](index=40&type=chunk) Net (Loss) Income Per Share (in thousands, except per share amounts): | Item | Three Months Ended June 30, 2025 | Six Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2024 | | :------------------------------------ | :------------------------------- | :----------------------------- | :------------------------------- | :----------------------------- | | Net (loss) income | $(20,765) | $(33,914) | $98,463 | $(22,827) | | Basic net (loss) income per share | $(1.92) | $(3.18) | $4.21 | $(24.11) | | Diluted net (loss) income per share | $(1.92) | $(14.07) | $(3.18) | $(30.63) | | Weighted average common shares outstanding - basic | 10,829,760 | 10,673,200 | 1,034,130 | 946,756 | | Weighted average common shares outstanding - diluted | 10,829,760 | 10,673,200 | 7,653,302 | 4,402,640 | - Outstanding stock options, warrants, Series C Preferred Stock, and Restricted Stock Units were **excluded from diluted EPS calculations** for the three and six months ended June 30, **2025** and **2024**, as their inclusion would have been anti-dilutive[44](index=44&type=chunk) [6. Fair Value Measurements](index=14&type=section&id=6.%20Fair%20Value%20Measurements) This note describes the company's fair value hierarchy for financial instruments and changes in derivative and warrant liabilities - The company **measures fair value using a three-level hierarchy**, maximizing observable inputs. As of June 30, **2025**, money market funds were **Level 1**, U.S. Treasury securities were **Level 2**, and derivative liabilities were **Level 3**[46](index=46&type=chunk)[47](index=47&type=chunk)[48](index=48&type=chunk) Fair Value Measurements (in thousands): | Item | Level 1 (June 30, 2025) | Level 2 (June 30, 2025) | Level 3 (June 30, 2025) | Total (June 30, 2025) | | :------------------------ | :---------------------- | :---------------------- | :---------------------- | :-------------------- | | Money market funds | $22,259 | — | — | $22,259 | | U.S. Treasury securities | — | $84,524 | — | $84,524 | | Derivative liability | — | — | $10,630 | $10,630 | | Item | Level 1 (December 31, 2024) | Level 2 (December 31, 2024) | Level 3 (December 31, 2024) | Total (December 31, 2024) | | :------------------------ | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Money market funds | $133,148 | — | — | $133,148 | | Derivative liability | — | — | $8,480 | $8,480 | - The **derivative liability, related to the sale of economic rights, increased** from **$8.48 million** at December 31, **2024**, to **$10.63 million** at June 30, **2025**, with the change recognized in other (expense) income[51](index=51&type=chunk)[55](index=55&type=chunk) - The **warrant liability, classified as Level 3, was fully exercised** in Q4 **2024**, resulting in **no outstanding warrant liability** as of June 30, **2025**[60](index=60&type=chunk)[61](index=61&type=chunk) [7. Investments](index=18&type=section&id=7.%20Investments) This note provides details on Avalo Therapeutics, Inc.'s available-for-sale investments and the assessment of unrealized losses Available-for-Sale Investments (in thousands) as of June 30, 2025: | Item | Amortized Cost | Unrealized Gains | Unrealized Losses | Fair Value | | :---------------------- | :------------- | :--------------- | :---------------- | :--------- | | Money market funds | $22,259 | — | — | $22,259 | | U.S. Treasury securities | $84,558 | $2 | $(36) | $84,524 | | **Total** | **$106,817** | **$2** | **$(36)** | **$106,783** | - As of June 30, **2025**, the aggregate fair value of securities in an **unrealized loss position** for less than **twelve months** was **$59.1 million**, with the company considering these **losses temporary and having the intent and ability to hold securities until recovery**[64](index=64&type=chunk) [8. Leases](index=19&type=section&id=8.%20Leases) This note outlines Avalo Therapeutics, Inc.'s lease arrangements for office space, including terms and associated costs - Avalo leases administrative office space in Wayne, Pennsylvania (expiring Feb **2027**) and **early-terminated a lease** for Rockville, Maryland office space effective January **31**, **2026**, incurring a **$0.3 million** early termination fee[66](index=66&type=chunk)[67](index=67&type=chunk) Lease Information (in thousands): | Item | June 30, 2025 | December 31, 2024 | | :-------------------------- | :------------ | :---------------- | | Right-of-use assets | $487 | $741 | | Lease liability, current | $482 | $568 | | Lease liability, non-current | $197 | $350 | | Total operating lease liabilities | $679 | $918 | | Weighted average remaining term | **1.5 years** | N/A | | Weighted average discount rate | **9.7%** | N/A | Operating Lease Cost (in thousands): | Period | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Operating lease cost | $148 | $113 | $294 | $222 | [9. Accrued Expenses and Other Current Liabilities](index=20&type=section&id=9.%20Accrued%20Expenses%20and%20Other%20Current%20Liabilities) This note details the composition and changes in Avalo Therapeutics, Inc.'s accrued expenses and other current liabilities Accrued Expenses and Other Current Liabilities (in thousands): | Item | June 30, 2025 | December 31, 2024 | | :------------------------------------ | :------------ | :---------------- | | Research and development | $2,891 | $1,625 | | Compensation and benefits | $2,143 | $2,883 | | General and administrative | $321 | $380 | | Commercial operations | $359 | $534 | | Royalty payment | $327 | $327 | | Lease liability, current | $482 | $568 | | **Total** | **$6,523** | **$6,317** | - **Total accrued expenses and other current liabilities increased** by **$206 thousand** from December **31**, **2024**, to June **30**, **2025**, **primarily driven by** an increase in research and development accruals[72](index=72&type=chunk) [10. Capital Structure](index=20&type=section&id=10.%20Capital%20Structure) This note describes Avalo Therapeutics, Inc.'s authorized and outstanding capital stock, recent equity financings, and ATM sales agreement - As of June 30, **2025**, Avalo had **200,000,000 shares** of common stock and **5,000,000 shares** of preferred stock authorized, with **10,837,356 common shares** and **24,696 Series C Preferred Stock shares** outstanding[9](index=9&type=chunk) - The March **2024** **private placement generated** **$115.6 million** in gross proceeds from the issuance of Series C Preferred Stock and warrants, with an additional **$69.4 million** from warrant exercises in Q4 **2024**[76](index=76&type=chunk) - Series C Preferred Stock, initially recognized outside permanent equity, **met equity classification** in Q4 **2024** after a contract amendment and is now a **component of permanent stockholders' equity**[80](index=80&type=chunk) - In June **2025**, the company **entered into an at-the-market (ATM) sales agreement** to **sell up to $75.0 million** of common stock, with **$7.3 million** in gross proceeds from sales subsequent to June 30, **2025**[84](index=84&type=chunk) [11. Stock-Based Compensation](index=22&type=section&id=11.%20Stock-Based%20Compensation) This note explains Avalo Therapeutics, Inc.'s stock-based compensation plans, expense recognition, and unrecognized compensation costs - The **2016** Fourth Amended Plan automatically increases its share reserve annually by **5%** of outstanding common and as-converted Series C Preferred Stock, with **1,768,393 additional shares** made available on January **1**, **2025**[87](index=87&type=chunk) Stock-Based Compensation Expense (in thousands): | Item | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Research and development | $1,116 | $219 | $2,418 | $488 | | General and administrative | $1,602 | $252 | $3,541 | $612 | | **Total** | **$2,718** | **$471** | **$5,959** | **$1,100** | - **Total stock-based compensation expense significantly increased** to **$5.96 million** for the six months ended June 30, **2025**, from **$1.1 million** in the prior year, **driven by** new option and RSU grants and headcount additions[88](index=88&type=chunk) - As of June 30, **2025**, there was **$24.8 million** of **unrecognized compensation cost** for stock options and **$3.6 million** for RSUs, expected to be recognized over weighted-average periods of **3.0 years** and **1.7 years**, respectively[91](index=91&type=chunk)[94](index=94&type=chunk) [12. Income Taxes](index=25&type=section&id=12.%20Income%20Taxes) This note discusses Avalo Therapeutics, Inc.'s income tax expense, valuation allowance, and the impact of new tax legislation - The company **recognized minimal income tax expense** for the three and six months ended June 30, **2025** and **2024**, **due to a significant valuation allowance** against deferred tax assets and current/prior period losses[100](index=100&type=chunk) - Avalo is currently **assessing the impact of the recently enacted One Big Beautiful Bill Act (OBBB)** on its consolidated financial statements[101](index=101&type=chunk) [13. Commitments and Contingencies](index=25&type=section&id=13.%20Commitments%20and%20Contingencies) This note outlines Avalo Therapeutics, Inc.'s contractual obligations, including license agreements, milestone payments, and royalty obligations - Avalo is party to various license and development agreements with **future payment obligations**, including **up to $70.0 million** in development/regulatory milestones and **$650.0 million** in sales-based milestones to Lilly for AVTX-009, **plus tiered royalties**[105](index=105&type=chunk) - For quisovalimab (AVTX-002), Avalo is **not currently pursuing clinical development and is exploring strategic alternatives**, but has **potential milestone payments of up to $112.5 million** (development/regulatory) and **$75.0 million** (sales-based) to KKC, plus royalties[110](index=110&type=chunk)[111](index=111&type=chunk)[112](index=112&type=chunk) - The company has **potential future milestone proceeds from out-licensed compounds** AVTX-301 (**up to $18.6 million** plus royalties from Alto), AVTX-406 (**up to $26.0 million** from ES), and the **800** Series assets (**up to $45.0 million** from AUG)[128](index=128&type=chunk)[132](index=132&type=chunk)[135](index=135&type=chunk) - Avalo has a **royalty obligation for AVTX-006 to certain related parties, recorded as a liability**, and may exercise a buyout option[139](index=139&type=chunk) [14. Segments](index=31&type=section&id=14.%20Segments) This note clarifies that Avalo Therapeutics, Inc. operates as a single segment and details its research and development expenses - The company **operates and manages its business as one operating segment**, with the CEO evaluating performance based on net loss and total assets[143](index=143&type=chunk)[144](index=144&type=chunk) - The **primary evaluation of success is the ability to progress research and development pipeline programs toward commercialization or opportunistic out-licensing**[144](index=144&type=chunk) Research and Development Expenses (in thousands): | Item | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Nonclinical expenses | $179 | $195 | $262 | $347 | | Clinical expenses | $7,215 | $1,579 | $11,065 | $1,641 | | CMC expenses | $3,266 | $740 | $5,245 | $993 | | Internal expenses: Salaries, benefits and related costs | $2,181 | $1,810 | $4,030 | $3,134 | | Stock-based compensation expense | $1,116 | $219 | $2,418 | $488 | | Other | $117 | $58 | $175 | $113 | | **Total** | **$14,074** | **$4,601** | **$23,195** | **$6,716** | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=33&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Avalo Therapeutics, Inc.'s financial condition, operational results, strategic focus, and liquidity for the three and six months ended June 30, 2025, compared to prior periods [Overview](index=33&type=section&id=Overview) This section provides a high-level summary of Avalo Therapeutics, Inc.'s strategic focus, lead asset development, and measures of success - Avalo Therapeutics is a clinical-stage biotechnology company focused on IL-1β-based treatments for immune-mediated inflammatory diseases, with its lead asset, AVTX-009, in a Phase **2** clinical trial for hidradenitis suppurativa (HS)[149](index=149&type=chunk) - The company's **2025** focus is on the operational execution of the Phase **2** LOTUS trial for AVTX-009 in HS, with **topline results expected in mid-2026**[150](index=150&type=chunk) - **Management's primary measure of success is the ability to advance its pipeline towards commercialization or opportunistically out-license rights**[151](index=151&type=chunk) [Recent Developments](index=34&type=section&id=Recent%20Developments) This section highlights key recent events, including board appointments, impacting Avalo Therapeutics, Inc.'s operations - In June **2025**, Dr. Rita Jain was **appointed to the Board of Directors, bringing extensive experience in clinical development and regulatory strategy**[153](index=153&type=chunk) [Liquidity](index=34&type=section&id=Liquidity) This section assesses Avalo Therapeutics, Inc.'s cash position, funding sources, and future capital needs to support operations - Avalo has **incurred significant operating and cash losses** since inception, **primarily funding operations through** equity sales, out-licensing, and asset sales[154](index=154&type=chunk) - As of June 30, **2025**, the company had **$113.3 million** in cash, cash equivalents, and short-term investments, **expected to fund operations for at least twelve months** from the filing date and into **2028**[154](index=154&type=chunk)[155](index=155&type=chunk) - **Future cash needs may be met through equity financings** (including an at-the-market program), out-licensing, strategic alliances, program sales, or M&A, with **potential for stockholder dilution**[155](index=155&type=chunk) [Our Strategy](index=34&type=section&id=Our%20Strategy) This section outlines Avalo Therapeutics, Inc.'s strategic objectives, pipeline advancement, and approach to product development and licensing - The company's **strategy focuses on advancing its pipeline**, particularly the Phase **2** LOTUS trial for AVTX-009 in HS, and exploring further indication expansion[156](index=156&type=chunk) - Strategic initiatives include acquiring or in-licensing targeted preclinical and clinical stage compounds for immune-mediated diseases and opportunistically out-licensing rights[156](index=156&type=chunk) - The **FDA approval process is complex, time-consuming, and expensive, with no guarantee of regulatory approval for products**[157](index=157&type=chunk) [Results of Operations](index=35&type=section&id=Results%20of%20Operations) This section analyzes Avalo Therapeutics, Inc.'s financial performance, including operating expenses and other income/expense, for the reporting periods [Comparison of the Three Months Ended June 30, 2025 and 2024](index=35&type=section&id=Comparison%20of%20the%20Three%20Months%20Ended%20June%2030,%202025%20and%202024) This section compares Avalo Therapeutics, Inc.'s financial results for the three months ended June 30, 2025, against the same period in 2024 - **Cost of product sales was zero** for Q2 **2025**, down from **$0.3 million** in Q2 **2024**, as the company **ceased selling Millipred® in September 2023**[158](index=158&type=chunk) - **Research and development expenses increased** by **$9.5 million** to **$14.1 million** in Q2 **2025**, **primarily due to** a **$5.6 million** **increase in clinical expenses** for the Phase **2** LOTUS trial and a **$2.5 million** **increase in CMC expenses**[159](index=159&type=chunk)[160](index=160&type=chunk) - **General and administrative expenses increased** by **$0.7 million** to **$5.2 million** in Q2 **2025**, **driven by** a **$1.4 million** **increase in stock-based compensation**, **partially offset by** lower legal and consulting fees[164](index=164&type=chunk) - **Other (expense) income, net, shifted** from **$108.0 million** income in Q2 **2024** to **$1.4 million** expense in Q2 **2025**, **mainly due to** the absence of the **$112.0 million** gain from the change in fair value of warrant liability in the prior year[167](index=167&type=chunk) [Comparison of the Six Months Ended June 30, 2025 and 2024](index=37&type=section&id=Comparison%20of%20the%20Six%20Months%20Ended%20June%2030,%202025%20and%202024) This section compares Avalo Therapeutics, Inc.'s financial results for the six months ended June 30, 2025, against the same period in 2024 - **Cost of product sales was zero** for YTD **2025**, down from **$0.3 million** in YTD **2024**[169](index=169&type=chunk) - **Research and development expenses increased** by **$16.5 million** to **$23.2 million** for YTD **2025**, **driven by** **$9.4 million** in clinical expenses and **$4.3 million** in CMC expenses for the AVTX-009 LOTUS trial[171](index=171&type=chunk) - **Acquired in-process research and development was zero** for YTD **2025**, compared to **$27.6 million** in YTD **2024** related to the AlmataBio Transaction[174](index=174&type=chunk) - **General and administrative expenses increased** by **$3.1 million** to **$10.8 million** for YTD **2025**, **primarily due to** a **$2.9 million** **increase in stock-based compensation**[175](index=175&type=chunk) - **Other income, net, decreased** by **$19.4 million** to **$0.09 million** for YTD **2025**, **mainly due to** the prior year's accounting impact of warrant liability changes and private placement transaction costs[178](index=178&type=chunk) [Liquidity and Capital Resources](index=39&type=section&id=Liquidity%20and%20Capital%20Resources) This section details Avalo Therapeutics, Inc.'s cash flow activities and capital resources, highlighting changes in cash and equivalents - The company **primarily uses cash to fund AVTX-009 development and organizational infrastructure costs**[180](index=180&type=chunk) Summary of Cash Flows (in thousands): | Activity | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------ | :----------------------------- | :----------------------------- | | Net cash used in operating activities | $(20,847) | $(22,485) | | Net cash (used in) provided by investing activities | $(70,860) | $356 | | Net cash (used in) provided by financing activities | $(469) | $108,140 | | Net (decrease) increase in cash and cash equivalents | $(92,176) | $86,011 | - **Net cash used in operating activities decreased** to **$20.8 million** for YTD **2025**, from **$22.5 million** in YTD **2024**, **driven by** net loss **partially offset by** non-cash charges and changes in operating assets/liabilities[182](index=182&type=chunk) - **Net cash used in investing activities was $70.9 million** for YTD **2025** **due to** purchases of available-for-sale investments, a **significant shift from** **$0.4 million** provided in YTD **2024**[184](index=184&type=chunk) - **Net cash used in financing activities was $0.5 million** for YTD **2025**, a **substantial decrease from** **$108.1 million** provided in YTD **2024**, which included proceeds from a private placement[185](index=185&type=chunk)[186](index=186&type=chunk) [Critical Accounting Policies, Estimates, and Assumptions](index=40&type=section&id=Critical%20Accounting%20Policies,%20Estimates,%20and%20Assumptions) This section discusses the significant accounting policies, estimates, and assumptions underlying Avalo Therapeutics, Inc.'s financial statements - The **financial statements rely on estimates and assumptions** for items such as clinical trial accruals, stock-based compensation, fair value measurements, derivative liabilities, revenue recognition, and going concern assessment[187](index=187&type=chunk) - **No significant changes to critical accounting policies occurred** during the six months ended June 30, **2025**, except as described in Note **2**[187](index=187&type=chunk) [Off-Balance Sheet Arrangements](index=40&type=section&id=Off-Balance%20Sheet%20Arrangements) This section confirms Avalo Therapeutics, Inc.'s lack of off-balance sheet arrangements as defined by SEC regulations - The company **does not have any off-balance sheet arrangements** as defined by SEC rules and regulations[188](index=188&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=41&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Avalo Therapeutics, Inc. is exempt from providing quantitative and qualitative disclosures about market risk due to its smaller reporting company status - Avalo Therapeutics, Inc. is **exempt from providing quantitative and qualitative disclosures about market risk** due to its status as a smaller reporting company[189](index=189&type=chunk) [Item 4. Controls and Procedures](index=41&type=section&id=Item%204.%20Controls%20and%20Procedures) This section details management's evaluation of Avalo Therapeutics, Inc.'s disclosure controls and procedures and reports on changes in internal control over financial reporting [Evaluation of Disclosure Controls and Procedures](index=41&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) This section presents management's conclusion on the effectiveness of Avalo Therapeutics, Inc.'s disclosure controls and procedures - Management, including the principal executive and financial officers, **concluded that the company's disclosure controls and procedures were effective at a reasonable assurance level** as of June 30, **2025**[190](index=190&type=chunk) [Changes in Internal Control Over Financial Reporting](index=41&type=section&id=Changes%20in%20Internal%20Control%20Over%20Financial%20Reporting) This section reports on any material changes in Avalo Therapeutics, Inc.'s internal control over financial reporting during the period - There were **no changes in internal control over financial reporting** during the period covered by this report that materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[192](index=192&type=chunk) [PART II. OTHER INFORMATION](index=42&type=section&id=PART%20II.%20OTHER%20INFORMATION) This section includes additional required information not covered in the financial statements, such as legal proceedings and risk factors [Item 1. Legal Proceedings](index=42&type=section&id=Item%201.%20Legal%20Proceedings) This section incorporates by reference information on litigation from Note 13 to the unaudited condensed consolidated financial statements - **Information regarding legal proceedings is incorporated by reference** from Note **13** - Commitments and Contingencies, under the heading 'Litigation,' in the financial statements[194](index=194&type=chunk) [Item 1A. Risk Factors](index=42&type=section&id=Item%201A.%20Risk%20Factors) This section states that Avalo Therapeutics, Inc.'s risk factors have not materially changed from its 2024 Annual Report on Form 10-K - The company's **risk factors have not materially changed** from those described in its Annual Report on Form **10-K** for the year ended December **31**, **2024**[195](index=195&type=chunk) - **Readers should carefully consider the factors discussed** in the **2024** **10-K**, as well as additional unknown or immaterial risks, which could adversely affect the business[195](index=195&type=chunk) [Item 6. Exhibits](index=43&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Quarterly Report on Form 10-Q, including agreements, plans, certifications, and interactive data files - **Key exhibits include** the Sales Agreement with TD Securities (USA) LLC, the Amended and Restated Non-Employee Director Compensation Plan, certifications from principal officers, and interactive data files (XBRL)[196](index=196&type=chunk) [SIGNATURES](index=44&type=section&id=SIGNATURES) This section contains the required signatures for the Quarterly Report on Form 10-Q, confirming its submission by Avalo Therapeutics, Inc.'s Chief Financial Officer - The **report was signed by Christopher Sullivan, Chief Financial Officer, on August 7, 2025, on behalf of Avalo Therapeutics, Inc**[203](index=203&type=chunk)

Ligand Reports Second Quarter 2025 Financial Results and Raises Guidance Second quarter performance driven by strong portfolio royalty revenue growth of 57% 2025 full year revenue guidance increased to $200 million - $225 million (previously $180 million - $200 million) and adjusted earnings per diluted share increased to $6.70 - $7.00 (previously $6.00 - $6.25) 1 Conference call begins at 8:30 a.m. Eastern Time today JUPITER, Fla., August 7, 2025 – Ligand Pharmaceuticals Incorporated (Nasdaq: LGND) today r ...

[Executive Summary](index=1&type=section&id=Executive%20Summary) Cullinan Therapeutics announced Q2 2025 financial results, pipeline updates for CLN-978, velinotamig, and zipalertinib, and new board appointments [Corporate Update & Q2 2025 Financial Results Announcement](index=1&type=section&id=Corporate%20Update%20%26%20Q2%202025%20Financial%20Results%20Announcement) Cullinan Therapeutics announced Q2 2025 financial results, pipeline advancements for CLN-978 and velinotamig, zipalertinib's pivotal results, and new board appointments - CLN-978 program is actively enrolling across Phase 1 studies in **systemic lupus erythematosus (SLE)**, **rheumatoid arthritis (RA)**, and **Sjögren's disease**[1](index=1&type=chunk) - **BCMA-directed bispecific T cell engager velinotamig** was in-licensed from Genrix Bio[1](index=1&type=chunk) - **Zipalertinib REZILIENT1 pivotal results** were shared at ASCO 2025 and published in the Journal of Clinical Oncology[1](index=1&type=chunk) - The company appointed **Mittie Doyle, M.D.**, and **Andrew Allen, M.D., Ph.D.**, to its Board of Directors[1](index=1&type=chunk) [CEO Commentary](index=1&type=section&id=CEO%20Commentary) CEO Nadim Ahmed emphasized strong execution in immunology and oncology pipelines, highlighting CLN-978, velinotamig, zipalertinib, and a robust cash position - **Strong execution** in advancing the CLN-978 program across three active studies in SLE, RA, and Sjögren's disease[2](index=2&type=chunk) - The addition of **velinotamig** further solidified leadership in T cell engager development for autoimmune diseases[2](index=2&type=chunk) - **Pivotal Phase 2b REZILIENT1 study results** for zipalertinib were shared at the 2025 ASCO Annual Meeting[3](index=3&type=chunk) - **Cash and investments** totaled **$510.9 million** as of June 30, 2025, providing a runway into 2028[3](index=3&type=chunk) [Portfolio Highlights](index=2&type=section&id=Portfolio%20Highlights) Cullinan Therapeutics provided updates on its diverse immunology and oncology clinical-stage programs, detailing progress and upcoming milestones [Immunology Programs](index=2&type=section&id=Immunology%20Programs) The immunology pipeline is advancing with CLN-978 in multiple Phase 1 studies and the in-licensed velinotamig for autoimmune diseases [CLN-978 (CD19xCD3 bispecific T cell engager)](index=2&type=section&id=CLN-978%20(CD19xCD3%20bispecific%20T%20cell%20engager)) CLN-978 is actively enrolling in global Phase 1 studies for SLE, RA, and Sjögren's disease, with initial SLE data expected in Q4 2025 - Global Phase 1 study in SLE is enrolling in the United States, Europe, and Australia, with initial safety and B cell depletion data from Part A expected in **Q4 2025**[4](index=4&type=chunk) - Phase 1 study in active, difficult-to-treat rheumatoid arthritis is enrolling in Europe, with initial data expected during the **first half of 2026**[4](index=4&type=chunk) - Global Phase 1 study in active, moderate to severe Sjögren's disease is enrolling in the U.S. and active in Europe[4](index=4&type=chunk) [Velinotamig (BCMAxCD3 bispecific T cell engager)](index=3&type=section&id=Velinotamig%20(BCMAxCD3%20bispecific%20T%20cell%20engager)) Cullinan licensed velinotamig globally (ex-Greater China) for $20 million upfront, with Genrix Bio initiating a Phase 1 study in China by late 2025 - An **exclusive global (ex-Greater China) license agreement** was made with Genrix Bio for velinotamig, including an **upfront license fee of $20 million**[7](index=7&type=chunk) - Genrix Bio is eligible for up to **$292 million in development and regulatory milestones**, plus up to an additional **$400 million in sales-based milestones**, and tiered royalties[7](index=7&type=chunk) - Genrix Bio plans to initiate a Phase 1 study in autoimmune diseases in China by the **end of 2025**[7](index=7&type=chunk) [Oncology Programs](index=3&type=section&id=Oncology%20Programs) The oncology pipeline advanced with zipalertinib's pivotal results and upcoming NDA, alongside ongoing enrollment for CLN-049, CLN-619, and CLN-617 [Zipalertinib (EGFR ex20ins inhibitor), collaboration with Taiho Oncology](index=3&type=section&id=Zipalertinib%20(EGFR%20ex20ins%20inhibitor)%2C%20collaboration%20with%20Taiho%20Oncology) Zipalertinib's pivotal REZILIENT1 results were published, with Taiho planning an NDA submission by late 2025 and frontline study enrollment completion in H1 2026 - **Pivotal Phase 2b REZILIENT1 results** were shared at the 2025 ASCO Annual Meeting and published in the Journal of Clinical Oncology[7](index=7&type=chunk) - Taiho plans to submit an **NDA in relapsed EGFR ex20ins NSCLC** by the **end of 2025**[7](index=7&type=chunk) - Taiho expects to complete enrollment of the pivotal study REZILIENT3 in 1L EGFR ex20ins NSCLC in the **first half of 2026**[7](index=7&type=chunk) - Initial data from REZILIENT2 cohorts (uncommon EGFR mutations, active brain metastases) will be shared at **IASLC 2025 WCLC** and **ESMO Congress 2025**[7](index=7&type=chunk) [CLN-049 (FLT3xCD3 bispecific T cell engager)](index=4&type=section&id=CLN-049%20(FLT3xCD3%20bispecific%20T%20cell%20engager)) Enrollment for CLN-049 continues in Phase 1 studies for AML/MDS, with clinical data anticipated in Q4 2025 - Enrollment continues in the Phase 1 study for relapsed/refractory AML or MDS, with clinical data expected in **Q4 2025**[10](index=10&type=chunk) - Enrollment also continues in the Phase 1 study for patients with measurable minimal residual disease in AML[10](index=10&type=chunk) [CLN-619 (Anti-MICA/MICB monoclonal antibody)](index=4&type=section&id=CLN-619%20(Anti-MICA%2FMICB%20monoclonal%20antibody)) CLN-619 enrollment continues in Phase 1 expansion cohorts for NSCLC and relapsed/refractory multiple myeloma - Enrollment continues in Phase 1 expansion cohorts for **NSCLC** and in the Phase 1 study for **relapsed/refractory multiple myeloma**[10](index=10&type=chunk) [CLN-617 (IL-2 and IL-12 cytokine fusion protein)](index=4&type=section&id=CLN-617%20(IL-2%20and%20IL-12%20cytokine%20fusion%20protein)) Enrollment for CLN-617 continues in its Phase 1 study for patients with advanced solid tumors - Enrollment continues in the Phase 1 study for patients with **advanced solid tumors**[10](index=10&type=chunk) [Corporate Updates](index=4&type=section&id=Corporate%20Updates) Cullinan Therapeutics announced new appointments to its Board of Directors, bringing significant expertise in immunology and oncology [Board of Directors Appointments](index=4&type=section&id=Board%20of%20Directors%20Appointments) Cullinan appointed Drs Mittie Doyle and Andrew Allen to its Board, effective August 7, 2025, while Drs Martin and Ryan resigned - **Mittie Doyle, M.D.**, and **Andrew Allen, M.D., Ph.D.**, were appointed to the Board of Directors, effective August 7, 2025[8](index=8&type=chunk) - Dr. Doyle brings extensive **immunology clinical development expertise**, and Dr. Allen brings extensive **oncology clinical development experience**[8](index=8&type=chunk) - **Anne-Marie Martin, Ph.D.**, and **David Ryan, M.D.**, resigned from Cullinan's Board of Directors effective August 7, 2025[8](index=8&type=chunk) [Financial Results](index=4&type=section&id=Financial%20Results) Cullinan Therapeutics reported its Q2 2025 financial performance, detailing cash position, operating expenses, and net loss [Second Quarter 2025 Financial Summary](index=4&type=section&id=Second%20Quarter%202025%20Financial%20Summary) Cullinan reported a **$510.9 million** cash position as of June 30, 2025, with increased R&D expenses and a widened net loss for Q2 2025 Key Financial Highlights for Q2 2025 | Metric | Q2 2025 (Millions) | Q2 2024 (Millions) | Change (YoY) | | :-------------------- | :------------------ | :------------------ | :------------------ | | Cash Position (as of June 30) | $510.9 | N/A | N/A | | R&D Expenses | $61.0 | $36.3 | +$24.7 (+68.0%) | | G&A Expenses | $14.8 | $13.8 | +$1.0 (+7.2%) | | Net Loss | $(70.1) | $(42.0) | $(28.1) (-66.9%) | - **Cash, cash equivalents, short- and long-term investments, and interest receivable** totaled **$510.9 million** as of June 30, 2025, providing runway into 2028[11](index=11&type=chunk) [Selected Condensed Consolidated Balance Sheet Data](index=7&type=section&id=Selected%20Condensed%20Consolidated%20Balance%20Sheet%20Data) As of June 30, 2025, Cullinan's cash, investments, total assets, and stockholders' equity all decreased compared to December 31, 2024 Selected Condensed Consolidated Balance Sheet Data (in thousands) | Metric | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | Change (in thousands) | | :------------------------------------------ | :-------------- | :------------------ | :------------------ | | Cash, cash equivalents, investments, and interest receivable | $510,898 | $606,917 | $(96,019) | | Total assets | $520,329 | $621,824 | $(101,495) | | Total current liabilities | $28,058 | $30,647 | $(2,589) | | Total liabilities | $28,183 | $31,496 | $(3,313) | | Total stockholders' equity | $492,146 | $590,328 | $(98,182) | [Consolidated Statements of Operations](index=8&type=section&id=Consolidated%20Statements%20of%20Operations) Total operating expenses significantly increased for Q2 and H1 2025, primarily due to higher R&D, leading to a widened net loss Consolidated Statements of Operations (Three Months Ended June 30, in thousands, except per share amounts) | Metric | Q2 2025 (in thousands) | Q2 2024 (in thousands) | Change (YoY) | | :------------------------------------------ | :-------------- | :-------------- | :------------------ | | Research and development | $61,030 | $36,259 | +$24,771 (+68.3%) | | General and administrative | $14,768 | $13,768 | +$1,000 (+7.3%) | | Total operating expenses | $75,798 | $50,027 | +$25,771 (+51.5%) | | Loss from operations | $(75,798) | $(50,027) | $(25,771) (-51.5%) | | Interest income | $5,924 | $8,071 | $(2,147) (-26.6%) | | Net loss attributable to Cullinan | $(70,055) | $(42,028) | $(28,027) (-66.7%) | | Basic and diluted net loss per share (Common stock) | $(1.07) | $(0.68) | $(0.39) (-57.4%) | Consolidated Statements of Operations (Six Months Ended June 30, in thousands, except per share amounts) | Metric | H1 2025 (in thousands) | H1 2024 (in thousands) | Change (YoY) | | :------------------------------------------ | :-------------- | :-------------- | :------------------ | | Research and development | $102,489 | $66,905 | +$35,584 (+53.2%) | | General and administrative | $28,305 | $26,111 | +$2,194 (+8.4%) | | Total operating expenses | $130,794 | $93,016 | +$37,778 (+40.6%) | | Loss from operations | $(130,794) | $(93,016) | $(37,778) (-40.6%) | | Interest income | $12,504 | $13,764 | $(1,260) (-9.2%) | | Net loss attributable to Cullinan | $(118,556) | $(79,176) | $(39,380) (-49.7%) | | Basic and diluted net loss per share (Common stock) | $(1.81) | $(1.43) | $(0.38) (-26.6%) | [About Cullinan Therapeutics](index=5&type=section&id=About%20Cullinan%20Therapeutics) Cullinan Therapeutics is a biopharmaceutical company focused on developing transformative clinical-stage assets for autoimmune diseases and cancer [Company Overview](index=5&type=section&id=Company%20Overview) Cullinan Therapeutics is a biopharmaceutical company developing a diversified portfolio of clinical-stage assets for autoimmune diseases and cancer - Cullinan Therapeutics, Inc. is a biopharmaceutical company dedicated to creating **new standards of care** for patients[12](index=12&type=chunk) - The company has strategically built a **diversified portfolio of clinical-stage assets** targeting autoimmune diseases and cancer[12](index=12&type=chunk) - It is anchored in deep expertise in **oncology, immunology, and translational medicine** to develop transformative therapeutics[12](index=12&type=chunk) [Forward-Looking Statements](index=5&type=section&id=Forward-Looking%20Statements) This section provides a standard disclaimer regarding forward-looking statements, outlining inherent risks and uncertainties [Disclaimer and Risk Factors](index=5&type=section&id=Disclaimer%20and%20Risk%20Factors) This disclaimer highlights that forward-looking statements are subject to known and unknown risks and uncertainties, with no obligation to update them - The press release contains **forward-looking statements** regarding preclinical and clinical developments, therapeutic potential, R&D activities, future data presentations, and cash runway[13](index=13&type=chunk) - Forward-looking statements are subject to **known and unknown risks and uncertainties**, including regulatory timing, clinical trial success, intellectual property, manufacturing, and global economic conditions[14](index=14&type=chunk)[15](index=15&type=chunk) - The company disclaims any obligation to update such forward-looking statements, except as required by law[15](index=15&type=chunk) [Contacts](index=9&type=section&id=Contacts) This section provides contact information for investor relations and media inquiries [Investor and Media Relations](index=9&type=section&id=Investor%20and%20Media%20Relations) Contact details are provided for investor relations and media inquiries - Investors Contact: **Nick Smith**, +1 401.241.3516, nsmith@cullinantx.com[20](index=20&type=chunk) - Media Contact: **Rose Weldon**, +1 215.801.7644, rweldon@cullinantx.com[20](index=20&type=chunk)

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 June 30, 2025 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM _ TO _ COMMISSION FILE NUMBE ...

[Executive Summary & Highlights](index=1&type=section&id=Executive_Summary_Highlights) [Second Quarter 2025 Financial Highlights](index=1&type=section&id=Second_Quarter_2025_Financial_Highlights) Insulet reported robust second-quarter 2025 financial results, with total revenue increasing 32.9% year-over-year to $649.1 million, surpassing guidance, driven by strong Omnipod revenue growth and international expansion, while GAAP net income decreased due to prior-year tax benefits and current-year debt extinguishment losses Financial Performance Summary | Metric | Q2 2025 (Millions USD) | Q2 2024 (Millions USD) | YoY Change (%) | Constant Currency YoY Change (%) | | :----------------------- | :--------------------- | :--------------------- | :------------- | :------------------------------- | | **Revenue** | | | | | | Total Revenue | $649.1 | $488.5 | 32.9% | 31.3% | | Total Omnipod Revenue | $639.0 | $480.4 | 33.0% | 31.4% | | U.S. Omnipod Revenue | $453.2 | $352.3 | 28.7% | 28.7% | | International Omnipod Revenue | $185.8 | $128.2 | 45.0% | 38.8% | | Drug Delivery Revenue | $10.2 | $8.1 | 25.7% | 25.7% | | **Profitability** | | | | | | Gross Margin | 69.7% | 67.8% | +190 bps | | | Operating Income | $121.1 | $54.5 | +750 bps (as % of revenue) | | | Adjusted Operating Income | $115.8 | N/A | +670 bps (as % of revenue) | | | Net Income | $22.5 | $188.6 | -88.1% | | | Adjusted Net Income | $83.7 | $38.3 | +118.5% | | | Diluted EPS | $0.32 | $2.59 | -87.6% | | | Adjusted Diluted EPS | $1.17 | $0.55 | +112.7% | | | Adjusted EBITDA | $157.5 | $90.9 | +570 bps (as % of revenue) | | [Recent Strategic Highlights](index=1&type=section&id=Recent_Strategic_Highlights) Insulet advanced its Omnipod 5 platform with expanded compatibility and international availability, launched a unique marketing collaboration, presented strong clinical data, and undertook significant financial restructuring - Omnipod 5 App for iPhone compatible with Dexcom's G7 Continuous Glucose Monitor (CGM) sensor fully available in the U.S[3](index=3&type=chunk) - Integrated Omnipod 5 with Dexcom's G7 CGM sensor in Germany and Abbott's FreeStyle Libre 2 Plus CGM sensor in Australia[3](index=3&type=chunk) - Collaborated with Marvel to launch comic book hero, Dyasonic, who lives with type 1 diabetes[3](index=3&type=chunk) - Presented strong clinical data at the American Diabetes Association (ADA) Scientific Session from SECURE-T2D and RADIANT trials, showing improved glycemic outcomes for type 2 diabetes patients using Omnipod 5[3](index=3&type=chunk) - Initiated redemption for remaining **$380 million** principal of convertible notes and refinanced Term Loan B[3](index=3&type=chunk) - Advanced sustainability efforts, detailed in Insulet's 2024 Sustainability Report[3](index=3&type=chunk) [CEO Commentary](index=2&type=section&id=CEO_Commentary) CEO Ashley McEvoy highlighted robust second-quarter results, attributing success to strong team performance and the compelling impact of Omnipod 5, expressing confidence in future growth and value creation for stakeholders - CEO Ashley McEvoy stated, "We delivered robust second quarter results, reflecting our team's strong performance and the compelling impact and appeal of Omnipod 5 for people living with diabetes" She expressed confidence in the company's ability to grow and create value for all stakeholders[4](index=4&type=chunk) [Financial Outlook](index=2&type=section&id=Financial_Outlook) [2025 Guidance](index=2&type=section&id=2025_Guidance) Insulet raised its full-year 2025 revenue guidance to 24%-27% constant currency growth (up from 19%-22%) and increased its adjusted operating margin guidance to 17.0%-17.5% (up from ~16.5%), with Q3 2025 revenue guidance set at 22%-25% constant currency growth Full-Year and Q3 2025 Guidance | Metric (Constant Currency) | Q3 2025 Guidance (as of 8/7/2025) | FY 2025 Guidance (as of 8/7/2025) | FY 2025 Prior Guidance (as of 5/8/2025) | | :------------------------- | :--------------------------------- | :-------------------------------- | :-------------------------------------- | | U.S. Omnipod Revenue Growth | 21% - 24% | 22% - 25% | 18% - 21% | | International Omnipod Revenue Growth | 33% - 36% | 34% - 37% | 27% - 30% | | Total Omnipod Revenue Growth | 24% - 27% | 25% - 28% | 20% - 23% | | Drug Delivery Revenue Growth | (80)% - (75)% | (30)% - (25)% | (35)% - (25)% | | Total Revenue Growth | 22% - 25% | 24% - 27% | 19% - 22% | | Gross Margin | N/A | ~71.0% | ~71.0% | | Adjusted Operating Margin | N/A | 17.0% - 17.5% | ~16.5% | [Company Information](index=2&type=section&id=Company_Information) [About Insulet Corporation](index=2&type=section&id=About_Insulet_Corporation) Insulet Corporation is a Massachusetts-headquartered medical device company specializing in tubeless insulin pump technology, primarily through its Omnipod product platform, offering automated blood sugar management and adapting its technology for non-insulin subcutaneous drug delivery - Insulet Corporation (NASDAQ: PODD) is a global leader in tubeless insulin pump technology with its Omnipod brand of products[1](index=1&type=chunk) - The Omnipod Insulin Management System provides a unique alternative to traditional insulin delivery methods with a simple, wearable, tubeless disposable Pod for up to three days of non-stop insulin delivery[1](index=1&type=chunk) - The Omnipod 5 Automated Insulin Delivery System integrates with a continuous glucose monitor to manage blood sugar, controllable by a compatible smartphone or Omnipod 5 Controller[7](index=7&type=chunk) - Insulet also leverages its Omnipod technology platform for the delivery of non-insulin subcutaneous drugs across other therapeutic areas[7](index=7&type=chunk) [Conference Call Details](index=2&type=section&id=Conference_Call_Details) Insulet will host a conference call on August 7, 2025, at 8:00 a.m. Eastern Time to discuss its financial results and outlook, with access available via the Investor Relations section of the company's website or by dialing in - Date: **August 7, 2025**[6](index=6&type=chunk) - Time: **8:00 a.m. (Eastern Time)**[6](index=6&type=chunk) - Access: Live webcast on investors.insulet.com ("Events and Presentations") or by phone (domestic: (888) 770-7129, international: (929) 203-2109, passcode: 5904836)[6](index=6&type=chunk) [Investor Relations & Media Contacts](index=5&type=section&id=Investor_Relations_Media_Contacts) Contact information for Insulet's Investor Relations and Corporate Communications departments is provided for inquiries - Investor Relations: June Lazaroff, Senior Director, Investor Relations, (978) 600-7718, jlazaroff@insulet.com[17](index=17&type=chunk) - Media: Angela Geryak Wiczek, Senior Director, Corporate Communications, (978) 932-0611, awiczek@insulet.com[17](index=17&type=chunk) [Non-GAAP Financial Measures](index=2&type=section&id=Non_GAAP_Financial_Measures) [Explanation of Non-GAAP Measures](index=3&type=section&id=Explanation_of_Non_GAAP_Measures) Insulet utilizes non-GAAP financial measures as supplemental tools for management to assess performance and for investors to compare results across periods, emphasizing that these measures should not replace GAAP results and may differ from those used by other entities - Management uses non-GAAP financial measures as supplemental measures in assessing the Company's performance[9](index=9&type=chunk) - These measures are helpful to investors and other interested parties as measures of comparative performance from period to period and are commonly used in determining business value[9](index=9&type=chunk) - Non-GAAP financial measures should be considered supplemental to, and not a substitute for, the Company's reported financial results prepared in accordance with GAAP[10](index=10&type=chunk) - The Company's definition of these non-GAAP measures may differ from similarly titled measures used by others, and investors are encouraged to review consolidated financial statements in their entirety[10](index=10&type=chunk) [Non-GAAP Definitions](index=3&type=section&id=Non_GAAP_Definitions) The report defines several non-GAAP financial measures, including constant currency revenue growth, adjusted gross margin/operating income/net income/diluted EPS, adjusted EBITDA, and free cash flow, each excluding specific non-recurring or non-cash items - 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[12](index=12&type=chunk) - Adjusted gross margin, adjusted operating income, adjusted net income, and adjusted diluted earnings per share: Exclude the impact of certain significant transactions or events, such as legal settlements, medical device corrections, gains (losses) on investments, and loss on extinguishment of debt[12](index=12&type=chunk) - Adjusted EBITDA: Represents net income plus net interest expense, income tax expense, depreciation and amortization, stock-based compensation expense, and other significant transactions or events affecting period-to-period comparability[12](index=12&type=chunk) - Free cash flow: Defined as net cash provided by operating activities less capital expenditures[12](index=12&type=chunk) [Forward-Looking Statements & Risks](index=3&type=section&id=Forward_Looking_Statements_Risks) [Forward-Looking Statement Disclaimer](index=3&type=section&id=Forward_Looking_Statement_Disclaimer) The press release contains forward-looking statements about future performance, product success, and regulatory approvals, which are based on management's current beliefs and assumptions, but are not guarantees, and actual results could differ materially due to underlying risks and uncertainties - This press release contains forward-looking statements regarding future operating and financial performance, product success and efficacy, the outcome of studies and trials, and the approval of products by regulatory bodies[11](index=11&type=chunk) - These statements are based on management's current beliefs, assumptions, and estimates and are not intended to be a guarantee of future events or performance[11](index=11&type=chunk) - Actual results could vary materially from expectations if management's underlying assumptions turn out to be incorrect, or if certain risks or uncertainties materialize[13](index=13&type=chunk) [Risks and Uncertainties](index=4&type=section&id=Risks_and_Uncertainties) Insulet faces various risks, including dependence on its product platform, intense competition, challenges in maintaining sales and customer base, reimbursement issues, product development hurdles, intellectual property protection, macroeconomic and geopolitical uncertainties, international business risks, manufacturing concentration, supply chain disruptions, regulatory compliance, use of AI tools, and potential recalls or cyberattacks - Dependence on a principal product platform; impact of competitive products, technological change, and product innovation[14](index=14&type=chunk) - Ability to maintain an effective sales force, expand distribution network, and grow customer base; securing and retaining adequate coverage or reimbursement from third-party payors[14](index=14&type=chunk) - Ability to design, develop, manufacture, and commercialize future products; unfavorable results of clinical studies or negative publications[14](index=14&type=chunk) - Ability to protect intellectual property and potential conflicts with third-party IP; inability to maintain or enter new license agreements for CGMs or data management systems[14](index=14&type=chunk) - Worldwide macroeconomic and geopolitical uncertainty, public health crises, supply chain disruptions, and international regulatory/commercial/logistics business risks[15](index=15&type=chunk) - Concentration of manufacturing operations and storage of inventory; supply problems or price fluctuations with sole source or third-party suppliers[15](index=15&type=chunk) - Challenges to the future development of the non-insulin drug delivery product line; failure to comply with FDA quality system regulations or other manufacturing difficulties[15](index=15&type=chunk) - Extensive government regulation applicable to medical devices, as well as complex and evolving privacy and data protection laws; use of artificial intelligence tools[15](index=15&type=chunk) - Adverse regulatory or legal actions relating to current or future Omnipod products; potential adverse impacts from recalls, safety issues, or product liability lawsuits[15](index=15&type=chunk) - Breaches or failures of product or information technology systems, including by cyberattack; ability to attract, motivate, and retain key personnel[15](index=15&type=chunk) - Risks associated with potential future acquisitions or investments; ability to raise additional funds; volatility of common stock; and changes in tax laws[15](index=15&type=chunk) [Condensed Consolidated Financial Statements (Unaudited)](index=6&type=section&id=Condensed_Consolidated_Financial_Statements_Unaudited) [Condensed Consolidated Statements of Income](index=6&type=section&id=Condensed_Consolidated_Statements_of_Income) The unaudited condensed consolidated statements of income show Insulet's financial performance for the three and six months ended June 30, 2025, compared to 2024, with significant revenue growth but a decrease in net income due to a large loss on extinguishment of debt and a prior-year tax benefit Statements of Income | (dollars in millions, except per share data) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----------------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | | Revenue | $649.1 | $488.5 | $1,218.1 | $930.2 | | Cost of revenue | $196.9 | $157.6 | $356.8 | $292.5 | | Gross profit | $452.2 | $330.9 | $861.3 | $637.7 | | Research and development expenses | $73.4 | $53.9 | $133.0 | $104.1 | | Selling, general and administrative expenses | $257.7 | $222.5 | $518.4 | $422.2 | | Operating income | $121.1 | $54.5 | $209.9 | $111.5 | | Interest expense, net | $(9.5) | $(1.7) | $(8.5) | $(3.0) | | Loss on extinguishment of debt | $(84.4) | — | $(123.9) | — | | Other income (expense), net | $1.3 | $(1.8) | $(0.9) | $(2.5) | | Income before income taxes | $28.4 | $51.1 | $76.5 | $106.0 | | Income tax (expense) benefit | $(5.9) | $137.5 | $(18.6) | $134.1 | | Net income | $22.5 | $188.6 | $57.9 | $240.1 | | Diluted EPS | $0.32 | $2.59 | $0.82 | $3.32 | [Reconciliation of Diluted Net Income](index=6&type=section&id=Reconciliation_of_Diluted_Net_Income) The reconciliation shows the adjustment from net income to diluted net income, primarily by adding back interest expense, net of tax, attributable to the assumed conversion of convertible notes, which was applicable in 2024 but not 2025 Diluted Net Income Reconciliation | (in millions) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :---------------------------------------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | | Net income | $22.5 | $188.6 | $57.9 | $240.1 | | Add back interest expense, net of tax attributable to assumed conversion of convertible notes | — | $2.5 | — | $4.9 | | Net income, diluted | $22.5 | $191.1 | $57.9 | $245.0 | [Condensed Consolidated Balance Sheets](index=7&type=section&id=Condensed_Consolidated_Balance_Sheets) Insulet's unaudited condensed consolidated balance sheets show an increase in total assets to $3,469.2 million as of June 30, 2025, from $3,087.7 million at December 31, 2024, driven by increases in cash, accounts receivable, and prepaid expenses, while total liabilities also increased due to a rise in the current portion of long-term debt, and stockholders' equity grew to $1,462.9 million Balance Sheet Overview | (dollars in millions) | June 30, 2025 | December 31, 2024 | | :-------------------------------- | :-------------- | :---------------- | | **ASSETS** | | | | Cash and cash equivalents | $1,121.6 | $953.4 | | Accounts receivable, net | $444.5 | $365.5 | | Inventories | $446.9 | $430.4 | | Prepaid expenses and other current assets | $266.7 | $142.0 | | Total current assets | $2,279.7 | $1,891.3 | | Property, plant and equipment, net | $720.4 | $723.1 | | Other intangible assets, net | $102.3 | $98.5 | | Goodwill | $51.7 | $51.5 | | Other assets | $315.1 | $323.3 | | Total assets | $3,469.2 | $3,087.7 | | **LIABILITIES AND STOCKHOLDERS' EQUITY** | | | | Accounts payable | $96.1 | $19.8 | | Accrued expenses and other current liabilities | $453.4 | $424.9 | | Current portion of long-term debt | $460.7 | $83.8 | | Total current liabilities | $1,010.1 | $528.4 | | Long-term debt, net | $939.0 | $1,296.1 | | Other liabilities | $57.1 | $51.7 | | Total liabilities | $2,006.3 | $1,876.1 | | Stockholders' equity | $1,462.9 | $1,211.6 | | Total liabilities and stockholders' equity | $3,469.2 | $3,087.7 | [Non-GAAP Reconciliations (Unaudited)](index=8&type=section&id=Non_GAAP_Reconciliations_Unaudited) [Constant Currency Revenue Growth](index=8&type=section&id=Constant_Currency_Revenue_Growth) In Q2 2025, total revenue grew 32.9% (31.3% in constant currency), with International Omnipod revenue showing the highest growth at 45.0% (38.8% constant currency), and for the six months ended June 30, 2025, total revenue grew 30.9% (30.6% constant currency) Revenue Growth by Segment | (dollars in millions) | 2025 Revenue | 2024 Revenue | Percent Change | Currency Impact | Constant Currency | | :-------------------- | :----------- | :----------- | :------------- | :-------------- | :---------------- | | **Three Months Ended June 30,** | | | | | | | U.S. Omnipod | $453.2 | $352.3 | 28.7% | —% | 28.7% | | International Omnipod | $185.8 | $128.2 | 45.0% | 6.2% | 38.8% | | Total Omnipod Products | $639.0 | $480.4 | 33.0% | 1.6% | 31.4% | | Drug Delivery | $10.2 | $8.1 | 25.7% | —% | 25.7% | | Total | $649.1 | $488.5 | 32.9% | 1.6% | 31.3% | | **Six Months Ended June 30,** | | | | | | | U.S. Omnipod | $854.9 | $670.0 | 27.6% | —% | 27.6% | | International Omnipod | $338.1 | $243.4 | 38.9% | 1.4% | 37.5% | | Total Omnipod Products | $1,193.0 | $913.4 | 30.6% | 0.4% | 30.2% | | Drug Delivery | $25.1 | $16.8 | 49.2% | —% | 49.2% | | Total | $1,218.1 | $930.2 | 30.9% | 0.4% | 30.6% | [Adjusted Operating Income, Net Income & Diluted EPS](index=9&type=section&id=Adjusted_Operating_Income_Net_Income_Diluted_EPS) This section provides reconciliations of GAAP operating income, net income, and diluted EPS to their adjusted non-GAAP counterparts for various periods, with key adjustments including CEO transition costs, loss on extinguishment of debt, loss on investments, and significant tax matters impacting period-to-period comparability [Three Months Ended June 30, 2025](index=9&type=section&id=Adjusted_Operating_Income_Net_Income_Diluted_EPS_Q2_2025) Reconciliation for Q2 2025 | (in millions, except per share data) | GAAP | CEO Transition Costs | Loss on Extinguishment of Debt | Tax Matters | Interest Expense (Convertible Notes) | Non-GAAP | | :--------------------------------- | :--- | :------------------- | :----------------------------- | :---------- | :--------------------------------- | :------- | | Operating Income | $121.1 | $(5.3) | — | — | — | $115.8 | | Income before Income Taxes | $28.4 | $(5.3) | $84.4 | — | — | $107.5 | | Net Income | $22.5 | $(5.5) | $84.1 | $(17.3) | — | $83.7 | | Net Income, Diluted | $22.5 | $(5.5) | $84.1 | $(17.3) | $1.2 | $85.0 | | Diluted Earnings per Share | $0.32 | $(0.08) | $1.16 | $(0.24) | $0.02 | $1.17 | [Six Months Ended June 30, 2025](index=9&type=section&id=Adjusted_Operating_Income_Net_Income_Diluted_EPS_H1_2025) Reconciliation for H1 2025 | (in millions, except per share data) | GAAP | CEO Transition Costs | Loss on Investments | Loss on Extinguishment of Debt | Tax Matters | Interest Expense (Convertible Notes) | Non-GAAP | | :--------------------------------- | :--- | :------------------- | :------------------ | :----------------------------- | :---------- | :--------------------------------- | :------- | | Operating Income | $209.9 | $(5.3) | $4.7 | — | — | — | $209.2 | | Income before Income Taxes | $76.5 | $(5.3) | $7.5 | $123.9 | — | — | $202.6 | | Net Income | $57.9 | $(5.5) | $5.8 | $123.0 | $(23.8) | — | $157.4 | | Net Income, Diluted | $57.9 | $(5.5) | $5.8 | $123.0 | $(23.8) | $2.9 | $160.3 | | Diluted Earnings per Share | $0.82 | $(0.07) | $0.08 | $1.68 | $(0.32) | $0.04 | $2.19 | [Three Months Ended June 30, 2024](index=11&type=section&id=Adjusted_Operating_Income_Net_Income_Diluted_EPS_Q2_2024) Reconciliation for Q2 2024 | (dollars in millions) | GAAP | Loss on Investments | Tax Matters | Non-GAAP | | :-------------------- | :--- | :------------------ | :---------- | :------- | | Income before Income Taxes | $51.1 | $1.8 | — | $52.8 | | Net Income | $188.6 | $1.4 | $(151.7) | $38.3 | | Net Income, Diluted | $191.1 | $1.4 | $(151.7) | $40.8 | | Diluted Earnings per Share | $2.59 | $0.02 | $(2.06) | $0.55 | [Six Months Ended June 30, 2024](index=11&type=section&id=Adjusted_Operating_Income_Net_Income_Diluted_EPS_H1_2024) Reconciliation for H1 2024 | (dollars in millions) | GAAP | Loss on Investments | Tax Matters | Non-GAAP | | :-------------------- | :--- | :------------------ | :---------- | :------- | | Income before Income Taxes | $106.0 | $1.8 | — | $107.7 | | Net Income | $240.1 | $1.4 | $(158.3) | $83.2 | | Net Income, Diluted | $245.0 | $1.4 | $(158.3) | $88.2 | | Diluted Earnings per Share | $3.32 | $0.02 | $(2.15) | $1.19 | [Diluted Shares](index=9&type=section&id=Diluted_Shares) The non-GAAP diluted weighted average common shares outstanding for Q2 2025 were 72,514 thousand, an increase from the GAAP figure of 70,652 thousand due to the inclusion of convertible notes, with non-GAAP diluted shares for the six months ended June 30, 2025, at 73,312 thousand Diluted Shares Calculation | (in thousands) | Three Months Ended June 30, 2025 | Six Months Ended June 30, 2025 | | :-------------------------------------------------- | :------------------------------- | :------------------------------- | | GAAP weighted average number of common shares outstanding, diluted | 70,652 | 70,641 | | Convertible notes | 1,862 | 2,671 | | Non-GAAP weighted average number of common shares outstanding, diluted | 72,514 | 73,312 | [Adjusted EBITDA](index=12&type=section&id=Adjusted_EBITDA) Insulet's Adjusted EBITDA for Q2 2025 was $157.5 million (24.3% of revenue), significantly up from $90.9 million (18.6% of revenue) in Q2 2024, and for the six months ended June 30, 2025, it was $291.5 million (23.9% of revenue), compared to $180.0 million (19.4% of revenue) in the prior year, with key adjustments including loss on extinguishment of debt and CEO transition costs in 2025, and a large tax benefit in 2024 Adjusted EBITDA Reconciliation | (dollars in millions) | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :-------------------------- | :------ | :------ | :------ | :------ | | Net income | $22.5 | $188.6 | $57.9 | $240.1 | | Interest expense, net | $9.5 | $1.7 | $8.5 | $3.0 | | Income tax expense (benefit) | $5.9 | $(137.5) | $18.6 | $(134.1) | | Depreciation and amortization | $22.3 | $19.3 | $44.0 | $38.0 | | Stock-based compensation expense | $7.5 | $17.0 | $25.7 | $31.2 | | CEO transition | $5.4 | — | $5.4 | — | | Loss on extinguishment of debt | $84.4 | — | $123.9 | — | | Loss on investments | — | $1.8 | $7.5 | $1.8 | | **Adjusted EBITDA** | **$157.5** | **$90.9** | **$291.5** | **$180.0** | | **Adjusted EBITDA as % of Revenue** | **24.3%** | **18.6%** | **23.9%** | **19.4%** | [Free Cash Flow](index=12&type=section&id=Free_Cash_Flow) For the six months ended June 30, 2025, Insulet generated $229.4 million in free cash flow, calculated from $260.3 million in net cash provided by operating activities minus $30.9 million in capital expenditures Free Cash Flow Calculation | (in millions) | Six Months Ended June 30, 2025 | | :-------------------------------- | :------------------------------- | | Net cash provided by operating activities | $260.3 | | Capital expenditures | $(30.9) | | **Free cash flow** | **$229.4** | [Revenue Guidance (Non-GAAP)](index=13&type=section&id=Revenue_Guidance_Non_GAAP) Insulet's non-GAAP revenue guidance for FY 2025 projects total revenue growth of 24%-27% in constant currency, with U.S. Omnipod at 22%-25% and International Omnipod at 34%-37%, while Q3 2025 total revenue growth is guided at 22%-25% in constant currency Non-GAAP Revenue Guidance | Revenue Growth (Constant Currency) | Year Ending December 31, 2025 | Three Months Ended September 30, 2025 | | :--------------------------------- | :---------------------------- | :------------------------------------ | | U.S. Omnipod | 22% - 25% | 21% - 24% | | International Omnipod | 34% - 37% | 33% - 36% | | Total Omnipod | 25% - 28% | 24% - 27% | | Drug Delivery | (30)% - (25)% | (80)% - (75)% | | Total | 24% - 27% | 22% - 25% |

[Q2 2025 Business and Financial Overview](index=1&type=section&id=Amylyx%20Pharmaceuticals%20Reports%20Second%20Quarter%202025%20Financial%20Results) Amylyx Pharmaceuticals highlights clinical pipeline advancements and stable financial performance in Q2 2025 [Management Commentary](index=1&type=section&id=Management%20Commentary) Management expressed encouragement regarding pipeline strength and progress toward key clinical milestones - The company is focused on disciplined execution across its clinical programs, with several key data readouts and updates expected through **H1 2026**[3](index=3&type=chunk) - Key upcoming milestones include: - **Avexitide (LUCIDITY Trial):** Complete recruitment in **2025**, with topline data in **H1 2026** - **AMX0035 (ORION Trial):** Unblinded Phase 2b analysis in **Q3 2025** to inform Phase 3 progression - **AMX0035 (Wolfram Syndrome):** Program update expected later in **2025** - **AMX0114 (LUMINA Trial):** Received FDA Fast Track designation; early cohort data expected later in **2025**[3](index=3&type=chunk) [Second Quarter and Recent Updates](index=1&type=section&id=Second%20Quarter%20and%20Recent%20Updates) Amylyx highlighted significant progress in its clinical trials and maintained a strong cash position through 2026 - Cash, cash equivalents, and marketable securities stood at **$180.8 million** as of June 30, 2025, with a projected cash runway through the end of **2026**[5](index=5&type=chunk) - Presented new data for avexitide (for PBH) showing the **90 mg once-daily dose** led to a **64% reduction (p=0.0031)** in hypoglycemic events versus baseline in a Phase 2b trial[6](index=6&type=chunk) - Presented long-term Week 48 data from the Phase 2 HELIOS trial of AMX0035 in Wolfram syndrome, demonstrating continued and sustained improvement in pancreatic beta cell function and stabilization in other disease progression outcomes[6](index=6&type=chunk) - Received FDA Fast Track designation for AMX0114, an investigational treatment for amyotrophic lateral sclerosis (ALS), in June 2025[7](index=7&type=chunk) [Upcoming Expected Milestones](index=2&type=section&id=Upcoming%20Expected%20Milestones) The company outlined several key catalysts expected in the near term across its clinical pipeline - **Avexitide (LUCIDITY Trial):** Expect to complete recruitment in **2025**, with data readout in **H1 2026** and a potential commercial launch in **2027** if approved[10](index=10&type=chunk) - **AMX0035 (ORION Trial for PSP):** An unblinded analysis of the Phase 2b portion is expected in **Q3 2025**, which will determine the progression to Phase 3[10](index=10&type=chunk) - **AMX0035 (Wolfram Syndrome):** An update on the program, including the design of a Phase 3 trial informed by positive Phase 2 data and FDA discussions, is expected in **2025**[10](index=10&type=chunk) - **AMX0114 (LUMINA Trial for ALS):** Early cohort data from the Phase 1 trial, evaluating safety and biological activity, is expected in **2025**[10](index=10&type=chunk) [Q2 2025 Financial Performance](index=2&type=section&id=Financial%20Results%20for%20the%20Second%20Quarter%20Ended%20June%2030%2C%202025) The company significantly reduced its net loss in Q2 2025, driven by lower operating expenses and a strong cash position [Financial Results Summary](index=2&type=section&id=Financial%20Results%20Summary) In Q2 2025, Amylyx reported a significantly reduced net loss driven by lower operating expenses, while maintaining a solid cash position | Financial Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | R&D Expenses | $27.2 million | $23.3 million | | SG&A Expenses | $15.6 million | $21.6 million | | Net Loss | $41.4 million | $72.7 million | | Net Loss Per Share | $0.46 | $1.07 | - The company's cash, cash equivalents, and marketable securities were **$180.8 million** at the end of Q2 2025, with a projected cash runway through the end of **2026**[12](index=12&type=chunk) [Research and Development (R&D) Expenses](index=2&type=section&id=R%26D%20Expenses) R&D expenses increased in Q2 2025 due to advancing clinical programs for avexitide and AMX0035 for PSP | Expense Category | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | R&D Expenses | $27.2 million | $23.3 million | | Stock-based Compensation (in R&D) | $2.0 million | $2.4 million | - The increase in R&D spending was mainly due to advancing the avexitide and PSP programs[9](index=9&type=chunk) [Selling, General, and Administrative (SG&A) Expenses](index=3&type=section&id=SG%26A%20Expenses) SG&A expenses decreased in Q2 2025, primarily due to lower payroll and professional services costs | Expense Category | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | SG&A Expenses | $15.6 million | $21.6 million | | Stock-based Compensation (in SG&A) | $5.4 million | $7.1 million | - The decrease in SG&A was driven by reduced personnel costs and lower use of consulting and professional services[11](index=11&type=chunk) [Net Loss](index=3&type=section&id=Net%20Loss) The company reported a significantly reduced net loss in Q2 2025 compared to the prior year, reflecting improved cost management | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Net Loss | $(41.4) million | $(72.7) million | | Net Loss Per Share | $(0.46) | $(1.07) | [Cash Position and Runway](index=3&type=section&id=Cash%20Position) Amylyx maintained a strong cash position of $180.8 million as of June 30, 2025, projected to fund operations through 2026 | Date | Cash, Cash Equivalents, and Marketable Securities | | :--- | :--- | | June 30, 2025 | $180.8 million | | March 31, 2025 | $204.1 million | - Based on current operating plans, the company's cash runway is expected to last through the end of **2026**[12](index=12&type=chunk) [Clinical Pipeline and Programs](index=3&type=section&id=Clinical%20Pipeline%20and%20Programs) Amylyx is advancing multiple clinical programs, including avexitide for PBH, AMX0035 for Wolfram syndrome and PSP, and AMX0114 for ALS [Avexitide Program (for PBH)](index=3&type=section&id=Avexitide%20Program%20(for%20PBH)) Avexitide is an investigational GLP-1 receptor antagonist for post-bariatric hypoglycemia (PBH), currently in a pivotal Phase 3 trial [About Avexitide](index=3&type=section&id=About%20Avexitide) Avexitide is a first-in-class GLP-1 receptor antagonist with FDA Breakthrough Therapy Designation for PBH and HI - Avexitide is an investigational GLP-1 receptor antagonist designed to inhibit the effect of GLP-1, thereby decreasing insulin secretion and stabilizing blood glucose[15](index=15&type=chunk) - The FDA has granted avexitide Breakthrough Therapy Designation for both post-bariatric hypoglycemia (PBH) and congenital hyperinsulinism (HI)[15](index=15&type=chunk) [About Post-Bariatric Hypoglycemia (PBH)](index=3&type=section&id=About%20Post-Bariatric%20Hypoglycemia%20(PBH)) PBH is a debilitating condition affecting approximately 160,000 people in the U.S. with no approved therapies - PBH is estimated to affect approximately **8%** of people in the U.S. who have undergone sleeve gastrectomy or Roux-en-Y gastric bypass surgery (approx. **160,000 people**)[16](index=16&type=chunk) - The condition can cause debilitating neuroglycopenic symptoms like impaired cognition, loss of consciousness, and seizures. There are no approved therapies for PBH[16](index=16&type=chunk) [About the LUCIDITY Trial](index=4&type=section&id=About%20the%20LUCIDITY%20Trial) The LUCIDITY trial is a pivotal Phase 3 study evaluating avexitide's efficacy and safety in PBH, with reduction in hypoglycemic events as the primary endpoint - LUCIDITY is a Phase 3, randomized, double-blind, placebo-controlled trial enrolling approximately **75 participants** at **20 sites** in the U.S[17](index=17&type=chunk)[18](index=18&type=chunk) - The trial is evaluating a **90 mg once-daily dose** of avexitide, with the primary outcome being the reduction in Level 2 and Level 3 hypoglycemic events through Week 16[18](index=18&type=chunk) [Other Key Programs](index=1&type=section&id=Other%20Key%20Programs) Amylyx is advancing AMX0035 for Wolfram syndrome and PSP, and AMX0114 for ALS, with several upcoming data readouts [AMX0035 (for Wolfram Syndrome & PSP)](index=1&type=section&id=AMX0035%20(for%20Wolfram%20Syndrome%20%26%20PSP)) AMX0035 is being evaluated for Wolfram syndrome and progressive supranuclear palsy (PSP), with key data readouts expected soon - **Wolfram Syndrome:** Long-term Week 48 data from the Phase 2 HELIOS trial demonstrated continued sustained improvement or stabilization across key measures, including pancreatic function and vision[6](index=6&type=chunk)[10](index=10&type=chunk) - **PSP:** The Phase 2b portion of the ORION trial is fully enrolled, and an unblinded analysis of Week 24 data in **Q3 2025** will inform a go/no-go decision for the Phase 3 portion[10](index=10&type=chunk) [AMX0114 (for ALS)](index=2&type=section&id=AMX0114%20(for%20ALS)) AMX0114, an investigational antisense oligonucleotide for ALS, received FDA Fast Track designation, with early Phase 1 data expected in 2025 - AMX0114 received FDA Fast Track designation in June 2025, allowing for more frequent communication with the agency[7](index=7&type=chunk) - The Phase 1 LUMINA trial is a multiple ascending dose study in approximately **48 participants**, with early cohort data expected in **2025**[10](index=10&type=chunk) [Financial Statements](index=5&type=section&id=Financial%20Statements) Detailed financial statements for Q2 2025 show balance sheet and income statement performance [Condensed Consolidated Balance Sheets](index=5&type=section&id=CONDENSED%20CONSOLIDATED%20BALANCE%20SHEETS) As of June 30, 2025, Amylyx reported total assets of $194.6 million and a strong cash position of $180.8 million | (in thousands) | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Assets** | | | | Cash, cash equivalents and marketable securities | $180,826 | $176,501 | | Total assets | $194,598 | $193,634 | | **Liabilities and Stockholders' Equity** | | | | Total liabilities | $26,721 | $28,869 | | Stockholders' equity | $167,877 | $164,765 | | Total liabilities and stockholders' equity | $194,598 | $193,634 | [Condensed Consolidated Statements of Operations](index=5&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20OPERATIONS) For Q2 2025, Amylyx reported no product revenue and a net loss of $41.4 million, a significant improvement from Q2 2024 | (in thousands, except per share data) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :--- | :--- | :--- | | Product revenue, net | $— | $(1,023) | | Total operating expenses | $42,857 | $75,263 | | Loss from operations | $(42,857) | $(76,286) | | Net loss | $(41,443) | $(72,700) | | Net loss per share — basic and diluted | $(0.46) | $(1.07) |

[Condensed Consolidated Balance Sheets (Unaudited)](index=2&type=section&id=Condensed%20Consolidated%20Balance%20Sheets%20(Unaudited)) Total assets increased to **$4.54 billion**, driven by accounts receivable and inventories, while total liabilities decreased and shareholders' equity significantly increased - The company's total assets increased to **$4.54 billion** as of June 30, 2025, from **$4.39 billion** at December 31, 2024, driven by increases in accounts receivable, inventories, and prepaid expenses. Total liabilities decreased, while shareholders' equity significantly increased due to retained earnings and accumulated other comprehensive income[6](index=6&type=chunk) Key Balance Sheet Items (in thousands) | Item | June 30, 2025 | December 31, 2024 | | :-------------------------------- | :-------------- | :---------------- | | Cash and cash equivalents | $188,229 | $363,669 | | Accounts receivable, net | $1,324,984 | $1,266,595 | | Inventories | $1,052,711 | $899,989 | | Prepaid expenses and other current assets | $190,586 | $114,008 | | Total current assets | $2,756,510 | $2,644,261 | | Total assets | $4,539,257 | $4,394,159 | | Total current liabilities | $1,418,526 | $1,529,452 | | Total liabilities | $2,331,584 | $2,458,187 | | Retained earnings | $1,166,457 | $909,024 | | Accumulated other comprehensive income (loss) | $22,323 | $(11,279) | | Total shareholders' equity | $2,207,673 | $1,935,972 | [Condensed Consolidated Statements of Income (Unaudited)](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income%20(Unaudited)) Net sales increased by **15.7%** for the three months and **15.2%** for the six months ended June 30, 2025, leading to significant net income growth - For the three months ended June 30, 2025, net sales increased by **15.7%** year-over-year, leading to a significant **105.1%** increase in net income. For the six months ended June 30, 2025, net sales grew by **15.2%**, and net income increased by **44.9%** compared to the prior year period[9](index=9&type=chunk) Income Statement Highlights (in thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net sales | $1,444,876 | $1,248,658 | $2,667,514 | $2,314,886 | | Cost of sales | $736,709 | $647,759 | $1,356,121 | $1,187,370 | | Gross profit | $708,167 | $600,899 | $1,311,393 | $1,127,516 | | Operating income | $168,647 | $103,836 | $313,593 | $258,778 | | Income before income taxes | $180,885 | $89,681 | $326,418 | $233,149 | | Provision for income taxes | $41,287 | $21,633 | $68,985 | $55,489 | | Net income | $139,598 | $68,048 | $257,433 | $177,660 | | Net income per share, basic | $0.99 | $0.49 | $1.83 | $1.27 | | Net income per share, diluted | $0.98 | $0.48 | $1.81 | $1.26 | [Condensed Consolidated Statements of Comprehensive Income (Unaudited)](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income%20(Unaudited)) Comprehensive income significantly increased for both periods, driven by higher net income and positive foreign currency translation adjustments - Comprehensive income significantly increased for both the three and six months ended June 30, 2025, primarily driven by higher net income and positive foreign currency translation adjustments, which reversed from a loss in the prior year period[10](index=10&type=chunk) Comprehensive Income (in thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net income | $139,598 | $68,048 | $257,433 | $177,660 | | Foreign currency translation adjustments | $18,783 | $1,252 | $26,659 | $(2,122) | | Unrealized gain (loss) on derivative instruments, net | $919 | $(3,599) | $6,943 | $(1,729) | | Comprehensive income | $159,300 | $65,701 | $291,035 | $173,809 | [Condensed Consolidated Statements of Shareholders' Equity (Unaudited)](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Shareholders'%20Equity%20(Unaudited)) Total shareholders' equity increased to **$2.21 billion**, primarily due to net income and other comprehensive income, partially offset by RSU vesting - Total shareholders' equity increased significantly to **$2.21 billion** as of June 30, 2025, from **$1.94 billion** at December 31, 2024, primarily due to net income and positive other comprehensive income, partially offset by vesting of restricted stock units[12](index=12&type=chunk)[15](index=15&type=chunk) Total Shareholders' Equity (in thousands) | Period | June 30, 2025 | December 31, 2024 | June 30, 2024 | December 31, 2023 | | :-------------------------- | :-------------- | :---------------- | :-------------- | :---------------- | | Total Shareholders' Equity | $2,207,673 | $1,935,972 | $1,646,043 | $1,478,893 | - For the six months ended June 30, 2025, key changes in shareholders' equity included **$257.4 million** in net income, **$22.5 million** in share-based compensation, a **$(49.2) million** impact from vesting of restricted stock units (net of taxes), and **$33.6 million** in other comprehensive income[15](index=15&type=chunk) [Condensed Consolidated Statements of Cash Flows (Unaudited)](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows%20(Unaudited)) The company experienced a net decrease in cash of **$175.4 million**, primarily due to increased cash used in operating and financing activities - For the six months ended June 30, 2025, the company experienced a net decrease in cash and cash equivalents of **$175.4 million**, a significant change from a **$15.9 million** decrease in the prior year. This was primarily driven by increased cash used in operating activities and financing activities, despite a slight increase in cash used in investing activities[17](index=17&type=chunk) Cash Flow Summary (in thousands) | Cash Flow Activity | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------- | :----------------------------- | :----------------------------- | | Net cash used in operating activities | $(63,938) | $(19,931) | | Net cash used in investing activities | $(64,415) | $(59,216) | | Net cash (used in) provided by financing activities | $(62,062) | $64,660 | | Effect of exchange rates changes on cash | $14,975 | $(1,436) | | Net decrease in cash and cash equivalents | $(175,440) | $(15,923) | | Cash and cash equivalents at end of period | $188,229 | $138,138 | - Key drivers of the change in operating cash flow for the six months ended June 30, 2025, included an increase in net income, a smaller decrease in accounts receivable, and larger increases in prepaid expenses and other assets, alongside significant decreases in accounts payable and accrued expenses and other liabilities[17](index=17&type=chunk) [Notes to Condensed Consolidated Financial Statements (Unaudited)](index=10&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements%20(Unaudited)) This section details the company's accounting policies, financial statement components, debt, commitments, equity, income taxes, and related party transactions [1. Organization and Description of Business](index=10&type=section&id=1.%20Organization%20and%20Description%20of%20Business) SharkNinja, Inc. is a global product design and technology company specializing in innovative lifestyle product solutions under the "Shark" and "Ninja" brands. The company was incorporated in the Cayman Islands in May 2023 and began trading on the NYSE in July 2023 following its separation from JS Global Lifestyle Company Limited - SharkNinja, Inc. is a global product design and technology company that creates innovative lifestyle product solutions across multiple sub-categories, including Cleaning Appliances, Cooking and Beverage Appliances, Food Preparation Appliances and Beauty and Home Environment Appliances products under the brands of "Shark" and "Ninja"[20](index=20&type=chunk) - The Company was incorporated in the Cayman Islands on May 17, 2023, as a wholly-owned subsidiary of JS Global Lifestyle Company Limited and began trading on the NYSE on July 31, 2023, following its separation and distribution from JS Global[21](index=21&type=chunk)[23](index=23&type=chunk) [2. Summary of Significant Accounting Policies](index=10&type=section&id=2.%20Summary%20of%20Significant%20Accounting%20Policies) The condensed consolidated financial statements are prepared in accordance with U.S. GAAP, reflecting all normal recurring adjustments. The company relies on estimates for various financial items, manages credit risk with major retailers, and operates as a single reportable segment with revenue disaggregated by geography, brand, and product category [Basis of Presentation](index=10&type=section&id=Basis%20of%20Presentation) The condensed consolidated financial statements are prepared under U.S. GAAP, including all wholly-owned subsidiaries, with no significant accounting policy changes - The condensed consolidated financial statements are prepared in accordance with U.S. GAAP and include the accounts of SharkNinja, Inc. and its wholly owned subsidiaries, with all intercompany transactions and balances eliminated[25](index=25&type=chunk) - These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and related notes as of and for the year ended December 31, 2024, as certain disclosures have been condensed or omitted[26](index=26&type=chunk) - Management believes the statements reflect all normal recurring adjustments necessary for fair presentation, and there have been no significant changes to accounting policies during the six months ended June 30, 2025[27](index=27&type=chunk)[28](index=28&type=chunk) [Use of Estimates](index=11&type=section&id=Use%20of%20Estimates) Financial statement preparation requires management estimates for various items, including variable consideration, credit losses, warranties, and fair value measurements - The preparation of financial statements requires management to make estimates and assumptions affecting reported amounts, including variable consideration for returns/rebates, allowance for credit losses, product warranties, fair value of financial assets/liabilities (including derivatives), inventory valuation, acquired intangible assets and goodwill, useful lives of intangibles, lease incremental borrowing rates, share-based compensation, and deferred tax assets/uncertain tax positions[29](index=29&type=chunk) [Concentration of Credit Risks](index=11&type=section&id=Concentration%20of%20Credit%20Risks) The company faces credit risk from cash, receivables, and forward contracts, with significant sales concentrated among a few major retail customers - The Company is exposed to credit risk from cash and cash equivalents, accounts receivable, and forward contracts, with a significant portion of products sold through retailers[30](index=30&type=chunk)[31](index=31&type=chunk)[32](index=32&type=chunk) Customer Concentration (Accounts Receivable, Net) | Customer | As of June 30, 2025 | As of December 31, 2024 | | :--------- | :------------------ | :---------------------- | | Customer A | 29.0 % | 29.1 % | | Customer B | 10.9 % | * (Less than 10%) | Customer Concentration (Net Sales) | Customer | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Customer A | 25.4 % | 24.0 % | 22.2 % | 21.2 % | | Customer B | 12.5 % | 10.4 % | 11.0 % | 11.0 % | | Customer C | 11.2 % | 12.6 % | 12.0 % | 13.5 % | [Accounts Receivable, Net](index=12&type=section&id=Accounts%20Receivable,%20Net) Accounts receivable are presented net of allowances for credit losses and chargebacks, with estimates based on historical write-off activity and current conditions - Accounts receivable are presented net of allowance for credit losses and chargebacks, with allowances for customer incentives and sales returns recorded as liabilities. The allowance for credit losses is estimated using a loss-rate method based on historical write-off activity, current conditions, and forecasts[35](index=35&type=chunk)[37](index=37&type=chunk) Allowance for Credit Losses Rollforward (in thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Beginning balance | $10,480 | $11,142 | $7,856 | $8,225 | | Provision for credit losses | $204 | $(479) | $3,382 | $2,525 | | Write-offs and other adjustments | $(6,122) | $(2,971) | $(6,676) | $(3,058) | | Ending balance | $4,562 | $7,692 | $4,562 | $7,692 | [Disaggregation of Net Sales](index=13&type=section&id=Disaggregation%20of%20Net%20Sales) Net sales are disaggregated by region, brand, and product category, showing shifts in domestic vs. international, Shark vs. Ninja, and various appliance categories Net Sales by Region (Percentage of Total Net Sales) | Region | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Domestic | 68.4% | 69.6% | 68.7% | 69.3% | | International | 31.6% | 30.4% | 31.3% | 30.7% | Net Sales by Brand (Percentage of Total Net Sales) | Brand | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :---------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Shark | 46.7% | 48.4% | 47.0% | 49.1% | | Ninja | 53.3% | 51.6% | 53.0% | 50.9% | Net Sales by Product Category (Percentage of Total Net Sales) | Category | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Cleaning Appliances | 34.7% | 37.3% | 35.3% | 38.4% | | Cooking and Beverage Appliances | 25.3% | 30.4% | 26.7% | 30.6% | | Food Preparation Appliances | 28.0% | 21.2% | 26.3% | 20.3% | | Beauty and Home Environment Appliances | 12.0% | 11.1% | 11.7% | 10.7% | [Warranty Costs](index=14&type=section&id=Warranty%20Costs) The company accrues estimated product warranty costs at the time of sale, based on sales volume and historical repair and return experience - The Company accrues the estimated cost of product warranties at the time of net sales recognition, based on sales volume and past experience of repairs and returns. Warranty expense is recorded to cost of goods sold[43](index=43&type=chunk) Product Warranty Liabilities (in thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Beginning balance | $24,612 | $25,428 | $26,955 | $28,090 | | Accruals for warranties issued | $14,015 | $9,673 | $24,111 | $15,953 | | Settlements made | $(6,460) | $(7,875) | $(18,899) | $(16,817) | | Ending balance | $32,167 | $27,226 | $32,167 | $27,226 | [Segment Information](index=14&type=section&id=Segment%20Information) The company operates as a single reportable segment, with the CEO as CODM, assessing performance based on consolidated net income and functional spend - The Company operates in one operating and reportable segment, focusing on small household appliances sold under the Shark and Ninja brands. The CEO serves as the chief operating decision maker (CODM)[45](index=45&type=chunk) - The CODM assesses performance and allocates resources based on consolidated net income, focusing on revenue performance and comparing actual functional spend to forecasts and prior-year results[47](index=47&type=chunk) Segment Net Income (in thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :---------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Segment net income | $139,598 | $68,048 | $257,433 | $177,660 | [Recently Issued Accounting Pronouncements](index=18&type=section&id=Recently%20Issued%20Accounting%20Pronouncements) The FASB issued ASU 2023-09 (Income Taxes) and ASU 2024-03 (Expense Disaggregation Disclosures), which will require enhanced disclosures for income taxes and specific expense categories, respectively. The company is currently evaluating the impact of these ASUs on its financial statements - ASU 2023-09, effective for annual periods beginning after December 15, 2024, requires disaggregated income taxes paid and standard categories for effective tax rate reconciliation[50](index=50&type=chunk) - ASU 2024-03, effective for fiscal years beginning after December 15, 2026, requires incremental disclosures about specific expense categories, including purchases of inventory, employee compensation, depreciation, amortization, and selling expenses[51](index=51&type=chunk) - Management is currently evaluating the impact of both ASUs on the Company's consolidated financial statements and disclosures[50](index=50&type=chunk)[51](index=51&type=chunk) [3. Condensed Consolidated Balance Sheet Components](index=18&type=section&id=3.%20Condensed%20Consolidated%20Balance%20Sheet%20Components) This section details the composition and changes in property and equipment, prepaid expenses and other current assets, and accrued expenses and other current liabilities. Property and equipment, net, remained stable, while prepaid expenses significantly increased, and accrued expenses decreased [Property and Equipment, Net](index=18&type=section&id=Property%20and%20Equipment,%20Net) Property and equipment, net, remained stable at **$212.8 million**, with molds and tooling being the largest component, and depreciation expense increasing year-over-year Property and Equipment, Net (in thousands) | Item | June 30, 2025 | December 31, 2024 | | :-------------------------- | :-------------- | :---------------- | | Molds and tooling | $292,602 | $267,756 | | Total property and equipment | $509,373 | $466,512 | | Less: accumulated depreciation and amortization | $(300,197) | $(266,800) | | Construction in progress | $3,595 | $11,752 | | Property and equipment, net | $212,771 | $211,464 | Depreciation Expense (in thousands) | Period | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Depreciation expense | $28,900 | $23,300 | $54,800 | $45,300 | [Prepaid Expenses and Other Current Assets](index=19&type=section&id=Prepaid%20Expenses%20and%20Other%20Current%20Assets) Prepaid expenses and other current assets significantly increased to **$190.6 million**, primarily due to a new **$61.2 million** 'Sales and other tax receivable' - Prepaid expenses and other current assets significantly increased to **$190.6 million** as of June 30, 2025, from **$114.0 million** at December 31, 2024, primarily due to the introduction of a **$61.2 million** 'Sales and other tax receivable'[53](index=53&type=chunk) Prepaid Expenses and Other Current Assets (in thousands) | Item | June 30, 2025 | December 31, 2024 | | :-------------------------- | :-------------- | :---------------- | | Other receivables | $58,460 | $68,145 | | Prepaid taxes | $46,268 | $27,073 | | Prepaid expenses | $17,653 | $10,705 | | Prepaid media | $7,051 | $8,085 | | Sales and other tax receivable | $61,154 | $0 | | Total | $190,586 | $114,008 | [Accrued Expenses and Other Current Liabilities](index=19&type=section&id=Accrued%20Expenses%20and%20Other%20Current%20Liabilities) Accrued expenses and other current liabilities decreased to **$766.6 million**, mainly driven by reductions in accrued customer incentives, general accrued expenses, and compensation - Accrued expenses and other current liabilities decreased to **$766.6 million** as of June 30, 2025, from **$841.5 million** at December 31, 2024. This reduction was mainly driven by decreases in accrued customer incentives, accrued expenses, and accrued compensation and benefits[54](index=54&type=chunk) Accrued Expenses and Other Current Liabilities (in thousands) | Item | June 30, 2025 | December 31, 2024 | | :-------------------------- | :-------------- | :---------------- | | Accrued customer incentives | $268,587 | $291,384 | | Accrued expenses | $147,211 | $177,573 | | Accrued compensation and benefits | $78,064 | $109,156 | | Accrued returns | $84,388 | $86,557 | | Accrued delivery and distributions | $73,992 | $52,711 | | Accrued warranty | $32,167 | $26,955 | | Accrued advertising | $12,198 | $20,779 | | Sales and other tax payable | $696 | $20,318 | | Accrued professional fees | $11,161 | $18,451 | | Operating lease liabilities, current | $22,962 | $18,133 | | Derivative liabilities | $0 | $66 | | Other | $35,204 | $19,446 | | Total | $766,630 | $841,529 | [4. Fair Value Measurements](index=20&type=section&id=4.%20Fair%20Value%20Measurements) The company's financial assets measured at fair value on a recurring basis consist solely of money market funds, classified as Level 1. As of June 30, 2025, there were no derivative financial instruments classified as Level 2, a change from December 31, 2024 Financial Assets and Liabilities at Fair Value (in thousands) | Item | June 30, 2025 | December 31, 2024 | Fair Value Level | | :--------------------------------------- | :-------------- | :---------------- | :--------------- | | **Financial assets:** | | | | | Money market funds | $1,058 | $581 | Level 1 | | **Financial liabilities:** | | | | | Forward contracts (derivatives) | $0 | $66 | Level 2 | - Money market funds are classified within Level 1 due to valuation using quoted prices in active markets. Derivative financial instruments are classified within Level 2, valued using observable inputs other than quoted prices[55](index=55&type=chunk) - As of June 30, 2025, the Company had no remaining Level 2 derivative financial instruments[55](index=55&type=chunk) [5. Derivative Financial Instruments and Hedging](index=21&type=section&id=5.%20Derivative%20Financial%20Instruments%20and%20Hedging) The company had no outstanding forward contracts designated as hedging instruments as of June 30, 2025, a decrease from **$48.5 million** at December 31, 2024. The effect of these contracts on accumulated other comprehensive income shifted from a net loss to a net gain reclassified to earnings for the six months ended June 30, 2025 [Notional Amount of Forward Contracts](index=21&type=section&id=Notional%20Amount%20of%20Forward%20Contracts) The notional amount of forward contracts designated as hedging instruments decreased to zero as of June 30, 2025, from **$48.5 million** at December 31, 2024 Notional Amount of Forward Contracts (in thousands) | Item | June 30, 2025 | December 31, 2024 | | :--------------------------------------- | :-------------- | :---------------- | | Derivatives designated as hedging instruments: Forward contracts | $0 | $48,472 | | Total derivative instruments | $0 | $48,472 | [Effect of Forward Contracts on Accumulated Other Comprehensive Income](index=21&type=section&id=Effect%20of%20Forward%20Contracts%20on%20Accumulated%20Other%20Comprehensive%20Income) The impact of forward contracts on accumulated other comprehensive income shifted from a net loss to a net gain reclassified to earnings for the six months ended June 30, 2025 Effect of Forward Contracts on Accumulated Other Comprehensive Income (in thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :---------------------------------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Beginning balance | $(2,239) | $(303) | $(8,263) | $(2,173) | | Amount of net losses recorded in accumulated other comprehensive income | $(295) | $(3,448) | $(850) | $(415) | | Amount of net gains (losses) reclassified from accumulated other comprehensive income to earnings | $1,214 | $(151) | $7,793 | $(1,314) | | Ending balance | $(1,320) | $(3,902) | $(1,320) | $(3,902) | [6. Intangible Assets, Net and Goodwill](index=22&type=section&id=6.%20Intangible%20Assets,%20Net%20and%20Goodwill) Intangible assets, net, decreased slightly to **$457.5 million** as of June 30, 2025, from **$462.7 million** at December 31, 2024. Trade names and trademarks, which are not subject to amortization, constitute the largest portion. Amortization expenses for intangible assets increased year-over-year [Intangible Assets, Net](index=22&type=section&id=Intangible%20Assets,%20Net) Intangible assets, net, decreased slightly to **$457.5 million**, with trade names and trademarks forming the largest non-amortized component, and amortization expenses increasing Intangible Assets, Net (in thousands) | Item | June 30, 2025 | December 31, 2024 | | :--------------------------------------- | :-------------- | :---------------- | | Total intangible assets subject to amortization (net) | $71,092 | $76,996 | | Trade name and trademarks (not subject to amortization) | $386,444 | $385,682 | | Total intangible assets, net | $457,536 | $462,678 | Amortization Expenses for Intangible Assets (in thousands) | Period | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Research and development | $2,120 | $1,910 | $4,238 | $3,824 | | Sales and marketing | $3,974 | $3,974 | $7,949 | $7,949 | | Total amortization expenses | $6,094 | $5,884 | $12,187 | $11,773 | Expected Future Amortization Expenses (in thousands) | Years ending December 31, | Amount | | :------------------------ | :----- | | Remainder of 2025 | $12,607 | | 2026 | $21,111 | | 2027 | $8,264 | | 2028 | $5,495 | | 2029 | $5,473 | | Thereafter | $18,142 | | Total | $71,092 | [7. Debt](index=24&type=section&id=7.%20Debt) The company's total debt, net of deferred financing costs, decreased to **$755.8 million** as of June 30, 2025, from **$775.5 million** at December 31, 2024. This is primarily due to repayments on the 2023 Term Loans. The company remains in compliance with all financial covenants under its 2023 Credit Agreement Debt Composition (in thousands) | Item | June 30, 2025 | December 31, 2024 | | :--------------------------------------- | :-------------- | :---------------- | | 2023 Term Loans (principal) | $759,375 | $779,625 | | Less: deferred financing costs | $(3,564) | $(4,142) | | Total debt, net of deferred financing costs | $755,811 | $775,483 | | Less: debt, current | $(39,344) | $(39,344) | | Debt, noncurrent | $716,467 | $736,139 | - The 2023 Credit Agreement provides for an **$810.0 million** term loan facility and a **$500.0 million** revolving credit facility, both maturing in July 2028. The company was in compliance with all financial covenants as of June 30, 2025[62](index=62&type=chunk)[64](index=64&type=chunk) - No amounts were outstanding on the 2023 Revolving Facility as of June 30, 2025, with **$300.0 million** in drawdowns during the six months ended June 30, 2025, fully repaid[63](index=63&type=chunk) [8. Commitments and Contingencies](index=25&type=section&id=8.%20Commitments%20and%20Contingencies) The company has non-cancelable purchase obligations, primarily for marketing and endorsement agreements, totaling **$22.3 million** as of June 30, 2025, with a new material agreement signed in July 2025. It is also involved in various legal proceedings and initiated a product recall in May 2025, accruing **$3.3 million** for remedies [Non-Cancelable Purchase Obligations](index=25&type=section&id=Non-Cancelable%20Purchase%20Obligations) Non-cancelable purchase obligations totaled **$22.3 million** as of June 30, 2025, with a new material marketing agreement signed in July 2025 not yet reflected Remaining Non-Cancelable Purchase Obligations (in thousands) | Years ending December 31, | Amount | | :------------------------ | :----- | | Remainder of 2025 | $2,738 | | 2026 | $6,300 | | 2027 | $6,150 | | 2028 | $6,150 | | 2029 | $1,000 | | Total | $22,338 | - On July 15, 2025, the Company entered into a five-year, non-cancelable marketing and endorsement agreement with a well-known public figure, requiring total cash payments of **$36.5 million** through December 31, 2030. This agreement is a material future commitment and is not reflected in the June 30, 2025 financial statements[69](index=69&type=chunk) [Indemnifications and Contingencies](index=27&type=section&id=Indemnifications%20and%20Contingencies) The company includes indemnification provisions in customer agreements for intellectual property infringement and non-compliance with representations and warranties - The Company enters into indemnification provisions in customer agreements for third-party intellectual property infringement claims and, for certain large or strategic customers, for non-compliance with additional representations and warranties[70](index=70&type=chunk) [Legal Proceedings](index=27&type=section&id=Legal%20Proceedings) The company is involved in various legal proceedings, but management believes the ultimate loss will not materially adversely affect its financial condition or operations - The Company may be involved in various legal proceedings, including patent infringement claims, false advertising claims, and product safety concerns. Management believes the ultimate loss from any current legal proceedings will not have a material adverse effect on its business, financial condition, and results of operation[71](index=71&type=chunk) [Product Recall](index=27&type=section&id=Product%20Recall) A voluntary recall of the Ninja Foodi OP300 series pressure cooker was initiated in May 2025, with a **$3.3 million** liability accrued for estimated remedies - In May 2025, the Company announced a voluntary recall of the Ninja Foodi OP300 series pressure cooker, recording a liability of **$3.3 million** for estimated recall remedies as of June 30, 2025[72](index=72&type=chunk) - The estimated cost of recall remedies is based on expected consumer participation rates and the estimated cost of the new lid design, subject to reevaluation and adjustment[72](index=72&type=chunk) [9. Shareholders' Equity and Equity Incentive Plan](index=27&type=section&id=9.%20Shareholders'%20Equity%20and%20Equity%20Incentive%20Plan) The company's equity incentive plans, including the 2023 Equity Incentive Plan (2023 Plan) and the 2023 Employee Share Purchase Plan (ESPP), aim to attract and retain talent. Both plans have evergreen provisions for increasing available shares. Share-based compensation expense decreased for the six months ended June 30, 2025, compared to the prior year [Restricted Share Units](index=27&type=section&id=Restricted%20Share%20Units) The 2023 Equity Incentive Plan, with an evergreen provision, made **13.9 million** ordinary shares initially available, with **10.2 million** remaining for future grants - The 2023 Equity Incentive Plan, adopted on July 28, 2023, initially made **13,898,287** ordinary shares available for future award grants and includes an evergreen provision for annual increases[73](index=73&type=chunk)[74](index=74&type=chunk) - As of June 30, 2025, **10,214,509** ordinary shares were available for future grant under the 2023 Plan, with **842,084** additional shares registered on January 1, 2025, due to the evergreen provision[74](index=74&type=chunk) RSU Activity (Six Months Ended June 30, 2025) | Item | Number of Shares | Weighted Average Grant Date Fair Value per share | | :-------------------------- | :--------------- | :--------------------------------------- | | Unvested as of Dec 31, 2024 | 2,169,401 | $35.71 | | Granted | 181,217 | $85.16 | | Vested | (1,060,676) | $33.96 | | Cancelled/Forfeited | (108,592) | $42.28 | | Unvested as of June 30, 2025 | 1,181,350 | $44.26 | [Employee Stock Purchase Plan](index=28&type=section&id=Employee%20Stock%20Purchase%20Plan) The 2023 Employee Share Purchase Plan (ESPP) allows for up to **1%** of outstanding shares to be purchased, with **114,527** shares purchased in the current period - The 2023 Employee Share Purchase Plan (ESPP) was approved on July 28, 2023, making a maximum of **1%** of outstanding ordinary shares available for sale, with an evergreen provision for annual increases[76](index=76&type=chunk) - During the six months ended June 30, 2025, **114,527** shares were purchased under the ESPP. As of June 30, 2025, **$0.4 million** of unrecognized share-based compensation related to the ESPP is to be recognized over **0.1 years**[76](index=76&type=chunk) [Share-Based Compensation](index=28&type=section&id=Share-Based%20Compensation) Total share-based compensation decreased for both the three and six months ended June 30, 2025, with **$26.4 million** in unrecognized costs remaining Share-Based Compensation Expense (in thousands) | Line Item | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Research and development | $1,867 | $2,286 | $4,776 | $5,785 | | Sales and marketing | $4,634 | $2,135 | $7,172 | $4,707 | | General and administrative | $4,427 | $9,709 | $10,530 | $23,064 | | Total share-based compensation | $10,928 | $14,130 | $22,478 | $33,556 | - As of June 30, 2025, the Company had **$26.4 million** in unrecognized share-based compensation cost related to RSUs granted under the 2023 Plan, to be recognized over a weighted average period of **0.7 years**[78](index=78&type=chunk) [10. Income Taxes](index=29&type=section&id=10.%20Income%20Taxes) The company's effective tax rate decreased for both the three and six months ended June 30, 2025, primarily due to the impact of share-based compensation. New tax legislation (OBBBA) enacted in July 2025 is being evaluated but is not expected to materially impact financial statements Provision for Income Taxes and Effective Tax Rate | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Provision for income taxes (in thousands) | $41,287 | $21,633 | $68,985 | $55,489 | | Effective Tax Rate (ETR) | 22.8% | 24.1% | 21.1% | 23.8% | - The decrease in the effective tax rate for both periods was primarily driven by the impact of share-based compensation[81](index=81&type=chunk) - The "One Big Beautiful Bill Act" (OBBBA) was signed into law on July 4, 2025, with key corporate tax provisions including restoration of 100% bonus depreciation and immediate expensing for domestic R&E. The Company is evaluating its impact but does not expect it to be material[82](index=82&type=chunk) [11. Net Income Per Share](index=29&type=section&id=11.%20Net%20Income%20Per%20Share) Both basic and diluted net income per share significantly increased for the three and six months ended June 30, 2025, reflecting higher net income. The dilutive effect of RSUs slightly decreased the per-share amounts Net Income Per Share | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net income per share, basic | $0.99 | $0.49 | $1.83 | $1.27 | | Net income per share, diluted | $0.98 | $0.48 | $1.81 | $1.26 | Weighted-Average Shares (in thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :---------------------------------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Weighted-average shares used in computing net income per share, basic | 141,044 | 139,888 | 140,834 | 139,668 | | Dilutive effect of RSUs | 827 | 1,036 | 1,197 | 1,145 | | Weighted-average shares used in computing net income per share, diluted | 141,871 | 140,924 | 142,031 | 140,813 | [12. Related Party Transactions](index=30&type=section&id=12.%20Related%20Party%20Transactions) The company continues to engage in various transactions with JS Global, its former parent, due to a common significant shareholder. These include supplier agreements, a sourcing services agreement, a brand license agreement, product development services, and a transition services agreement, with a general trend of decreasing expenses paid to JS Global and increasing royalty income received [Transactions with JS Global](index=30&type=section&id=Transactions%20with%20JS%20Global) JS Global remains a related party due to a common significant shareholder and board member, influencing ongoing business transactions - Following the separation and distribution, JS Global continues to be a related party due to a common significant shareholder and board member of both the Company and JS Global[84](index=84&type=chunk) [Supplier Agreements](index=30&type=section&id=Supplier%20Agreements) Purchases of finished goods from JS Global subsidiaries significantly decreased for both the three and six months ended June 30, 2025 - The Company purchases certain finished goods directly from a subsidiary of JS Global. Finished goods purchased from JS Global entities decreased significantly for both the three and six months ended June 30, 2025, compared to the prior year[85](index=85&type=chunk) Finished Goods Purchases from JS Global (in thousands) | Period | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Purchases from JS Global entities | $23,500 | $51,300 | $48,600 | $107,100 | [Sourcing Services Agreement](index=30&type=section&id=Sourcing%20Services%20Agreement) JS Global provides sourcing services for Asia-Pacific suppliers, with service fees paid by SharkNinja decreasing over time - Under a sourcing services agreement, JS Global provides coordination, process management, and relationship management support for products procured by SharkNinja from Asia-Pacific suppliers. The service fee paid to JS Global is based on the aggregate procurement amount and has decreased over time[86](index=86&type=chunk) Sourcing Services Fees Incurred (in thousands) | Period | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Fees incurred | $2,500 | $13,100 | $4,800 | $25,000 | [Brand License Agreement](index=30&type=section&id=Brand%20License%20Agreement) The company granted JS Global exclusive rights to distribute its brands in APAC for 20 years, earning a **3%** royalty on licensed product net sales - The Company granted JS Global exclusive rights to distribute and sell its brands in certain international markets in APAC for a 20-year term, with JS Global paying a royalty of **3%** of net sales of licensed products[87](index=87&type=chunk) Royalty Income from Brand License Agreement (in thousands) | Period | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Royalty income | $3,800 | $1,400 | $8,600 | $2,300 | [Product Development Agreements](index=30&type=section&id=Product%20Development%20Agreements) The company now provides R&D services to JS Global, earning increased fees, while no longer incurring costs for R&D services from JS Global - The Company historically utilized JS Global subsidiaries for R&D services, incurring no costs for these services in the current three and six-month periods ended June 30, 2025, compared to **$0.8 million** and **$1.7 million** in the prior year periods, respectively[88](index=88&type=chunk) - SharkNinja now provides R&D and related product management services to JS Global entities, earning product development service fees of **$1.6 million** and **$3.2 million** for the three and six months ended June 30, 2025, respectively, an increase from the prior year[89](index=89&type=chunk) [Transition Services Agreement](index=31&type=section&id=Transition%20Services%20Agreement) The company provided transition services to JS Global, earning consistent fees, with the agreement concluding on July 31, 2025 - The Company provided transition services to JS Global for a term of twenty-four months, which ended on July 31, 2025[90](index=90&type=chunk) Transition Service Fees Earned (in thousands) | Period | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Service fees earned | $700 | $800 | $1,500 | $1,500 | Related Party Balances (in thousands) | Item | June 30, 2025 | December 31, 2024 | | :-------------------------- | :-------------- | :---------------- | | Accounts receivable, net | $12,333 | $9,381 | | Accounts payable | $26,628 | $39,769 | [13. Subsequent Events](index=31&type=section&id=13.%20Subsequent%20Events) The company has evaluated subsequent events up to the financial statement issuance date and disclosed a new material marketing agreement and the enactment of the OBBBA tax legislation in Note 8 and Note 10, respectively. No other subsequent events require disclosure or adjustment - The Company has evaluated subsequent events and disclosed a new material marketing and endorsement agreement (Note 8) and the enactment of the "One Big Beautiful Bill Act" (OBBBA) tax legislation (Note 10)[92](index=92&type=chunk) - Except for the disclosed items, no other subsequent events would require disclosure in, or adjustment to, the unaudited condensed consolidated financial statements[92](index=92&type=chunk)

Phase 1/2 study of GSPT1-directed MGD MRT-2359 advancing in heavily pretreated, castration-resistant prostate cancer patients; additional results on track for H2 2025 Strong cash position expected to fund operations into 2028 through multiple anticipated proof-of-concept clinical readouts Monte Rosa Therapeutics Announces Second Quarter 2025 Financial Results and Business Updates Phase 1 study of NEK7-directed molecular glue degrader (MGD) MRT-8102 underway, to investigate a potential novel therapeutic appr ...

```markdown [Overview of Second Quarter 2025 Results](index=1&type=section&id=BLACKSKY%20REPORTS%20SECOND%20QUARTER%202025%20RESULTS) [Key Highlights](index=1&type=section&id=Second%20Quarter%20Financial%20Highlights) BlackSky reported mixed financial results for Q2 2025, with Imagery & Software services revenue growing to $18.0 million and an improved cost of sales at 19% of revenue. The company strengthened its financial position with a cash balance of $94.9 million and a successful $185 million convertible note offering. Operationally, the company launched its second Gen-3 satellite, secured significant contracts, and is on track to launch six Gen-3 satellites in 2025 Key Financial Metrics | Financial Metric | Value | | :--- | :--- | | Imagery & Software Revenue | $18.0 million | | Imagery & Software Cost of Sales | 19% of revenue | | Backlog | $356 million | | Cash Balance (as of June 30, 2025) | $94.9 million | | Pro Forma Cash (incl. recent transactions) | > $170.0 million | - Operational achievements include the successful launch and commissioning of the second Gen-3 satellite, which delivered imagery within 12 hours. The company is on track to launch a total of six Gen-3 satellites this year[2](index=2&type=chunk)[4](index=4&type=chunk) - Key business developments include a facility monitoring order up to **$24 million** from the NGA, a new multimillion-dollar international customer contract, and multiple early access agreements for Gen-3 services[4](index=4&type=chunk) - The company completed an upsized **$185 million** convertible note offering in July, using the proceeds to pay off existing debt and strengthen its balance sheet[4](index=4&type=chunk)[12](index=12&type=chunk) [Management Commentary](index=1&type=section&id=Management%20Commentary) CEO Brian E. O'Toole highlighted the successful launch and exceptional performance of the second Gen-3 satellite, which is already providing very-high resolution imagery to customers via early access agreements. He confirmed the plan to launch six Gen-3 satellites in 2025 and noted that the recent $185 million capital raise strengthens the company's balance sheet and validates its long-term business potential - The second Gen-3 satellite is performing exceptionally well and, combined with the first, is now providing very-high resolution imagery and AI-driven analytics to customers[2](index=2&type=chunk) - The company remains on track to launch six Gen-3 satellites in 2025, with general commercial availability expected in the fourth quarter[2](index=2&type=chunk) - A successful capital raise of **$185 million** has strengthened the balance sheet, increased liquidity, and is seen as a validation of the company's long-term potential[2](index=2&type=chunk) [Financial Performance](index=3&type=section&id=Financial%20Performance) [Financial Results (Q2 2025)](index=3&type=section&id=Financial%20Results) In Q2 2025, total revenue decreased to $22.2 million from $24.9 million year-over-year, primarily due to lower professional and engineering services revenue. The company reported a net loss of $41.2 million, a significant increase from a $9.4 million loss in Q2 2024, largely driven by a $24.4 million loss on derivatives. Adjusted EBITDA was a loss of $2.8 million, compared to a $2.1 million profit in the prior-year quarter Q2 2025 Financial Performance | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Total Revenue | $22.2M | $24.9M | -10.8% | | Imagery & Software Revenue | $18.0M | $17.5M | +2.9% | | Professional & Engineering Revenue | $4.2M | $7.5M | -44.0% | | Net Loss | ($41.2M) | ($9.4M) | Increased Loss | | Adjusted EBITDA | ($2.8M) | $2.1M | Decreased | - The decline in total revenue was primarily due to a **$3.3 million** decrease in professional and engineering services revenue, attributed to the timing of revenue recognition on long-term, milestone-based contracts[5](index=5&type=chunk) - The year-over-year increase in net loss was mainly caused by a **$24.4 million** loss on derivatives in Q2 2025, compared to a **$5.3 million** gain in Q2 2024[8](index=8&type=chunk) - Cash operating expenses increased by **$3.1 million** year-over-year to **$19.4 million**, primarily due to overhead expenses previously capitalized as satellite assets before the acquisition of LeoStella operations[7](index=7&type=chunk) [Balance Sheet & Capital Expenditures](index=4&type=section&id=Balance%20Sheet%20%26%20Capital%20Expenditures) As of June 30, 2025, BlackSky held $94.9 million in cash and equivalents, bolstered by $35.8 million in net proceeds from an at-the-market equity program. Capital expenditures for the quarter were $10.0 million. Subsequent to the quarter's end, the company raised $185.0 million through a convertible note offering, which was used to pay off existing debt - Cash, cash equivalents, restricted cash, and short-term investments totaled **$94.9 million** as of June 30, 2025[11](index=11&type=chunk) - Capital expenditures for Q2 2025 amounted to **$10.0 million**[11](index=11&type=chunk) - Post-quarter, the company completed a **$185.0 million** offering of an **8.25%** convertible note due 2033, using a portion of the proceeds to pay off its senior secured note and commercial bank line[12](index=12&type=chunk) [2025 Outlook](index=4&type=section&id=2025%20Outlook) The company has adjusted its full-year 2025 outlook due to near-term volatility from the U.S. government budget process and the timing of some international contracts. Revenue guidance is now set between $105 million and $130 million, with Adjusted EBITDA expected to be between break-even and $10 million. The capital expenditure forecast remains unchanged 2025 Full-Year Guidance | 2025 Full-Year Guidance | Range | | :--- | :--- | | Revenue | $105M - $130M | | Adjusted EBITDA | $0M - $10M | | Capital Expenditures | $60M - $70M (Unchanged) | - The guidance adjustment is attributed to near-term volatility from the U.S. government budget process and timing related to some international contracts[13](index=13&type=chunk) [Financial Statements and Reconciliations](index=7&type=section&id=Financial%20Statements%20and%20Reconciliations) [Condensed Consolidated Statements of Operations](index=7&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20OPERATIONS%20AND%20COMPREHENSIVE%20LOSS) This section provides the unaudited condensed consolidated statements of operations for the three and six months ended June 30, 2025, and 2024, detailing revenues, costs, operating loss, and net loss Condensed Consolidated Statements of Operations | (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :--- | :--- | :--- | | **Total revenue** | **$22,199** | **$24,938** | | Total costs and expenses | $36,139 | $36,659 | | Operating loss | ($13,940) | ($11,721) | | (Loss) gain on derivatives | ($24,435) | $5,273 | | **Net loss** | **($41,239)** | **($9,397)** | | Net loss per share | ($1.27) | ($0.52) | [Condensed Consolidated Balance Sheets](index=8&type=section&id=CONDENSED%20CONSOLIDATED%20BALANCE%20SHEETS) This section presents the company's unaudited condensed consolidated balance sheets as of June 30, 2025, and December 31, 2024, outlining assets, liabilities, and stockholders' equity Condensed Consolidated Balance Sheets | (in thousands) | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Total current assets** | **$138,796** | **$106,736** | | **Total assets** | **$310,798** | **$254,146** | | Total current liabilities | $37,400 | $26,022 | | **Total liabilities** | **$224,238** | **$160,157** | | **Total stockholders' equity** | **$86,560** | **$93,989** | [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20CASH%20FLOWS) This section details the unaudited condensed consolidated statements of cash flows for the six months ended June 30, 2025, and 2024, showing cash flows from operating, investing, and financing activities Condensed Consolidated Statements of Cash Flows | (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $19,965 | ($5,602) | | Net cash used in investing activities | ($49,821) | ($23,048) | | Net cash provided by financing activities | $39,186 | $21,865 | | **Net increase (decrease) in cash** | **$9,330** | **($6,785)** | | **Cash, cash equivalents, and restricted cash – end of period** | **$23,708** | **$26,649** | [Reconciliation of Net Loss to Adjusted EBITDA](index=10&type=section&id=RECONCILIATION%20OF%20NET%20LOSS%20TO%20ADJUSTED%20EBITDA) This table provides a reconciliation of the GAAP measure Net Loss to the non-GAAP measure Adjusted EBITDA for the three and six months ended June 30, 2025, and 2024 Reconciliation of Net Loss to Adjusted EBITDA | (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net loss | ($41,239) | ($9,397) | | Adjustments (Interest, Taxes, D&A, etc.) | $38,422 | $7,252 | | **Adjusted EBITDA** | **($2,817)** | **$2,145** | [Reconciliation of Operating Expenses to Cash Operating Expenses](index=11&type=section&id=RECONCILIATION%20OF%20OPERATING%20EXPENSES%20TO%20CASH%20OPERATING%20EXPENSES) This table reconciles the GAAP measure Operating Expenses to the non-GAAP measure Cash Operating Expenses for the three and six months ended June 30, 2025, and 2024 Reconciliation of Operating Expenses to Cash Operating Expenses | (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :--- | :--- | :--- | | Operating expenses | $29,892 | $29,777 | | Stock-based compensation | ($3,288) | ($2,222) | | Depreciation and amortization | ($7,208) | ($11,277) | | **Cash operating expenses** | **$19,396** | **$16,278** | ```

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 June 30, 2025 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number: 001-41123 CHICAGO ATLANTIC REAL ESTATE FINANCE, INC. (Exact name of Registrant as specified in its charter) | Maryland | 86-3125132 | | --- | --- | | (State or other jurisdictio ...