Insulet (PODD) - 2025 Q2 - Quarterly Report

PART I. FINANCIAL INFORMATION Item 1. Condensed Consolidated Financial Statements (Unaudited) This section presents Insulet Corporation's unaudited condensed consolidated financial statements, including balance sheets, income, comprehensive income, stockholders' equity, and cash flows, with detailed notes for the periods ended June 30, 2025, and December 31, 2024 Condensed Consolidated Balance Sheets (Unaudited) This section presents the unaudited condensed consolidated balance sheets for the specified periods Condensed Consolidated Balance Sheets (Unaudited) (in millions): | (in millions, except share and per share data) | June 30, 2025 | December 31, 2024 | | :--------------------------------------------- | :------------ | :---------------- | | ASSETS | | | | Cash and cash equivalents | $ 1,121.6 | $ 953.4 | | Accounts receivable trade, net | $ 306.4 | $ 252.5 | | Accounts receivable trade, net — related party | $ 138.1 | $ 113.0 | | 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 | $ 423.9 | | Accrued expenses and other current liabilities — related party | $ — | $ 1.0 | | 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 | | Total stockholders' equity | $ 1,462.9 | $ 1,211.6 | | Total liabilities and stockholders' equity | $ 3,469.2 | $ 3,087.7 | Condensed Consolidated Statements of Income (Unaudited) This section presents the unaudited condensed consolidated statements of income for the specified periods Condensed Consolidated Statements of Income (Unaudited) (in millions, except share and per share data): | (in millions, except share and 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 | $ 470.5 | $ 341.2 | $ 891.0 | $ 671.1 | | Revenue from related party | $ 178.6 | $ 147.3 | $ 327.1 | $ 259.1 | | Total 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 | $ (19.6) | $ (11.0) | $ (28.8) | $ (21.7) | | Interest income | $ 10.1 | $ 9.3 | $ 20.3 | $ 18.7 | | 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 | | Earnings per share: Basic | $ 0.32 | $ 2.69 | $ 0.82 | $ 3.43 | | Earnings per share: Diluted | $ 0.32 | $ 2.59 | $ 0.82 | $ 3.32 | | Weighted-average number of common shares outstanding (in thousands): Basic | 70,389 | 70,062 | 70,330 | 70,010 | | Weighted-average number of common shares outstanding (in thousands): Diluted | 70,652 | 73,802 | 70,641 | 73,771 | Condensed Consolidated Statements of Comprehensive Income (Unaudited) This section presents the unaudited condensed consolidated statements of comprehensive income for the specified periods Condensed Consolidated Statements of Comprehensive Income (Unaudited) (in millions): | (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 | | Other comprehensive income (loss), net of tax: | | | | | | Foreign currency translation adjustment | $ 22.3 | $ (1.2) | $ 32.6 | $ (7.7) | | Unrealized loss on cash flow hedges, net of tax | $ (0.9) | $ (2.8) | $ (4.1) | $ (4.7) | | Other comprehensive income (loss), net of tax | $ 21.4 | $ (3.9) | $ 28.6 | $ (12.4) | | Comprehensive income | $ 43.9 | $ 184.7 | $ 86.5 | $ 227.7 | Condensed Consolidated Statements of Stockholders' Equity (Unaudited) This section presents the unaudited condensed consolidated statements of stockholders' equity for the specified periods Condensed Consolidated Statements of Stockholders' Equity (Unaudited) (Three Months Ended June 30, 2025, in millions): | (dollars in millions) | Common Stock Shares (in thousands) | Common Stock Amount | Additional Paid-in Capital | Accumulated Earnings | Accumulated Other Comprehensive (Loss) Income | Treasury Stock | Deferred Compensation | Total Shareholders' Equity | | :-------------------- | :--------------------------------- | :------------------ | :------------------------- | :------------------- | :-------------------------------------------- | :------------- | :-------------------- | :------------------------- | | Balance at March 31, 2025 | 70,362 | $ 0.1 | $ 1,260.9 | $ 75.7 | $ (6.0) | $ (0.2) | $ 0.2 | $ 1,330.6 | | Net income | — | — | — | 22.5 | — | — | — | 22.5 | | Other comprehensive income, net of tax | — | — | — | — | 21.4 | — | — | 21.4 | | Exercise of options to purchase common stock | 71 | — | 10.1 | — | — | — | — | 10.1 | | Issuance of shares for employee stock purchase plan | 31 | — | 7.1 | — | — | — | — | 7.1 | | Stock-based compensation expense | — | — | 7.5 | — | — | — | — | 7.5 | | Restricted stock units vested, net of shares withheld for taxes | 20 | — | (1.6) | — | — | — | — | (1.6) | | Repurchase of common stock | (93) | — | — | — | — | (30.1) | — | (30.1) | | Deferred compensation | — | — | — | — | — | (0.7) | 0.7 | — | | Settlement of capped call options | — | — | 95.4 | — | — | — | — | 95.4 | | Balance at June 30, 2025 | 70,391 | $ 0.1 | $ 1,379.4 | $ 98.2 | $ 15.4 | $ (31.0) | $ 0.9 | $ 1,462.9 | Condensed Consolidated Statements of Stockholders' Equity (Unaudited) (Six Months Ended June 30, 2025, in millions): | (dollars in millions) | Common Stock Shares (in thousands) | Common Stock Amount | Additional Paid-in Capital | Accumulated Earnings | Accumulated Other Comprehensive (Loss) income | Treasury Stock | Deferred Compensation | Total Shareholders' Equity | | :-------------------- | :--------------------------------- | :------------------ | :------------------------- | :------------------- | :-------------------------------------------- | :------------- | :-------------------- | :------------------------- | | Balance at December 31, 2024 | 70,196 | $ 0.1 | $ 1,184.4 | $ 40.3 | $ (13.2) | $ — | $ — | $ 1,211.6 | | Net income | — | — | — | 57.9 | — | — | — | 57.9 | | Other comprehensive income, net of tax | — | — | — | — | 28.6 | — | — | 28.6 | | Exercise of options to purchase common stock | 108 | — | 12.6 | — | — | — | — | 12.6 | | Issuance of shares for employee stock purchase plan | 31 | — | 7.1 | — | — | — | — | 7.1 | | Stock-based compensation expense | — | — | 25.7 | — | — | — | — | 25.7 | | Restricted stock units vested, net of shares withheld for taxes | 148 | — | (22.9) | — | — | — | — | (22.9) | | Repurchase of common stock | (93) | — | — | — | — | (30.1) | — | (30.1) | | Deferred compensation | — | — | — | — | — | (0.9) | 0.9 | — | | Settlement of capped call options | — | — | 172.4 | — | — | — | — | 172.4 | | Balance at June 30, 2025 | 70,391 | $ 0.1 | $ 1,379.4 | $ 98.2 | $ 15.4 | $ (31.0) | $ 0.9 | $ 1,462.9 | Condensed Consolidated Statements of Cash Flows (Unaudited) This section presents the unaudited condensed consolidated statements of cash flows for the specified periods, including a restatement for 2024 Condensed Consolidated Statements of Cash Flows (Unaudited) (in millions): | (in millions) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 (Restated) | | :------------------------------------------ | :------------------------------- | :---------------------------------------- | | Cash flows from operating activities | | | | Net income | $ 57.9 | $ 240.1 | | Depreciation and amortization | $ 44.0 | $ 38.0 | | Stock-based compensation expense | $ 25.7 | $ 31.2 | | Loss on extinguishment of debt | $ 123.9 | $ — | | Deferred income taxes | $ 7.0 | $ (139.2) | | Changes in operating assets and liabilities: Accounts receivable | $ (41.8) | $ (29.1) | | Net cash provided by operating activities | $ 260.3 | $ 174.4 | | Cash flows from investing activities | | | | Capital expenditures | $ (30.9) | $ (44.6) | | Investments in developed software | $ (8.0) | $ (4.3) | | Net cash used in investing activities | $ (38.9) | $ (48.9) | | Cash flows from financing activities | | | | Proceeds from issuance of senior unsecured notes, net | $ 440.7 | $ — | | Repayment of convertible debt | $ (541.5) | $ — | | Settlement of capped call options | $ 75.7 | $ — | | Repurchase of common stock | $ (30.1) | $ — | | Proceeds from exercise of stock options | $ 12.6 | $ 6.9 | | Payment of withholding taxes in connection with vesting of restricted stock units | $ (22.9) | $ (6.1) | | Net cash used in financing activities | $ (65.8) | $ (5.3) | | Effect of exchange rate changes on cash and cash equivalents | $ 12.7 | $ (3.4) | | Net increase in cash, cash equivalents and restricted cash | $ 168.2 | $ 116.8 | | Cash and cash equivalents at beginning of period | $ 953.4 | $ 704.2 | | Cash and cash equivalents at end of period | $ 1,121.6 | $ 821.0 | Notes to Condensed Consolidated Financial Statements (Unaudited) This section provides detailed explanations and disclosures for the unaudited condensed consolidated financial statements, covering accounting policies, revenue, balance sheet accounts, debt, financial instruments, derivatives, commitments, contingencies, segment data, equity, income taxes, earnings per share, and accumulated other comprehensive income, including a restatement of the cash flow statement for June 30, 2024 Note 1. Basis of Presentation and Summary of Significant Accounting Policies This note details the basis of financial statement presentation and significant accounting policies - The financial statements are unaudited, prepared in accordance with GAAP, and reflect the consolidated income of Insulet Corporation and its subsidiaries, with management's estimates and assumptions used, and actual results may differ, noting that operating results for the six months ended June 30, 2025, are not indicative of the full year[31] - The Condensed Consolidated Statement of Cash Flow for the six months ended June 30, 2024, was restated to correct an error in presentation, which impacted operating and financing activities but not net cash increase or net income[33] Restatement Impact on Condensed Consolidated Statement of Cash Flows (Six Months Ended June 30, 2024, in millions): | (in millions) | Previously Reported | Restatement Adjustment | Restated | | :-------------------------------- | :------------------ | :--------------------- | :------- | | Accounts receivable | $ (11.2) | $ (17.9) | $ (29.1) | | Accrued expenses and other liabilities | $ (11.4) | $ 8.2 | $ (3.2) | | Net cash provided by operating activities | $ 184.1 | $ (9.7) | $ 174.4 | | Proceeds from secured borrowing | $ — | $ 17.9 | $ 17.9 | | Repayments of secured borrowing | $ — | $ (8.2) | $ (8.2) | | Net cash used in financing activities | $ (15.0) | $ 9.7 | $ (5.3) | - Related party transactions exist with a distributor where the spouse of a board member is an executive officer, with terms consistent with arm's length[35] - Shipping and handling costs, included in selling, general and administrative expenses, were $5.3 million for the three months ended June 30, 2025 (up from $4.0 million in 2024) and $9.9 million for the six months ended June 30, 2025 (up from $7.4 million in 2024)[36] - Fair value measurements are categorized into Level 1 (observable inputs like quoted prices), Level 2 (significant other observable inputs), and Level 3 (significant unobservable inputs requiring company assumptions)[37][41] Note 2. Revenue and Contract Acquisition Costs This note details the company's revenue recognition and contract acquisition costs Disaggregated Revenue (in millions): | (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 | | :-------------------- | :------------------------------- | :------------------------------- | :------------------------------ | :------------------------------ | | U.S. | $ 453.2 | $ 352.3 | $ 854.9 | $ 670.0 | | International | $ 185.8 | $ 128.2 | $ 338.1 | $ 243.4 | | Total Omnipod products | $ 639.0 | $ 480.4 | $ 1,193.0 | $ 913.4 | | Drug Delivery | $ 10.2 | $ 8.1 | $ 25.1 | $ 16.8 | | Total revenue | $ 649.1 | $ 488.5 | $ 1,218.1 | $ 930.2 | - Three distributors (A, B, C) each represented 10% or more of total revenue: Distributor A was 26% (Q2 2025) and 29% (Q2 2024); 26% (H1 2025) and 27% (H1 2024)[39] Deferred Revenue (in millions): | (in millions) | June 30, 2025 | December 31, 2024 | | :---------------------------------- | :-------------- | :---------------- | | Accrued expenses and other current liabilities | $ 17.4 | $ 12.0 | | Other liabilities | $ 1.4 | $ 2.0 | | Total deferred revenue | $ 18.7 | $ 14.0 | - Revenue recognized from amounts included in deferred revenue at the beginning of each period was $0.5 million for Q2 2025 (vs $4.0 million Q2 2024) and $6.2 million for H1 2025 (vs $7.2 million H1 2024)[40] Capitalized Contract Acquisition Costs, Net (in millions): | (in millions) | June 30, 2025 | December 31, 2024 | | :---------------------------------- | :-------------- | :---------------- | | Prepaid expenses and other current assets | $ 22.6 | $ 20.1 | | Other assets | $ 46.3 | $ 40.8 | | Total capitalized contract acquisition costs, net | $ 69.0 | $ 60.9 | - Amortization expense for capitalized contract acquisition costs was $5.5 million for Q2 2025 (vs $4.4 million Q2 2024) and $10.6 million for H1 2025 (vs $8.6 million H1 2024)[40] Note 3. Accounts Receivable, Net This note details the composition of accounts receivable, net Accounts Receivable Composition (in millions): | (in millions) | June 30, 2025 | December 31, 2024 | | :-------------------------- | :-------------- | :---------------- | | Accounts receivable trade, net | $ 292.6 | $ 242.8 | | Unbilled receivable | $ 13.7 | $ 9.7 | | Accounts receivable, net | $ 306.4 | $ 252.5 | - Key distributors (A, B, C) represent significant portions of trade accounts receivable, with Distributor A at 30% (June 2025) and 35% (Dec 2024)[42] - The Company outsources insurance claim submissions to a third-party, transferring certain receivables for cash in advance with recourse, with receivables pledged as collateral totaling $17.7 million (June 2025) and $12.2 million (Dec 2024)[42] Note 4. Inventories This note details the composition of inventories Inventories Composition (in millions): | (in millions) | June 30, 2025 | December 31, 2024 | | :---------------- | :-------------- | :---------------- | | Raw materials | $ 179.8 | $ 156.7 | | Work in process | $ 66.0 | $ 81.2 | | Finished goods | $ 201.2 | $ 192.5 | | Total inventories | $ 446.9 | $ 430.4 | - A $13.5 million charge related to Omnipod GO inventory components was recorded in cost of revenue for Q2 and H1 2024 due to the decision not to commercialize the product[43] Note 5. Cloud Computing Costs This note details the company's capitalized cloud computing costs Capitalized Cloud Computing Implementation Costs, Net (in millions): | (in millions) | June 30, 2025 | December 31, 2024 | | :------------------------------------ | :-------------- | :---------------- | | Short-term portion | $ 36.6 | $ 31.7 | | Long-term portion | $ 144.1 | $ 135.3 | | Total capitalized implementation costs | $ 180.7 | $ 167.0 | | Less: accumulated amortization | $ (77.8) | $ (62.4) | | Capitalized implementation costs, net | $ 102.9 | $ 104.6 | - Amortization expense for cloud computing costs was $7.9 million for Q2 2025 (vs $6.5 million Q2 2024) and $15.5 million for H1 2025 (vs $12.6 million H1 2024)[44] Note 6. Goodwill and Other Intangible Assets, Net This note details the company's goodwill and other intangible assets Goodwill Carrying Amount (in millions): | (in millions) | | | :-------------------------- | :------ | | Balance at December 31, 2024 | $ 51.5 | | Foreign currency translation | $ 0.1 | | Balance at June 30, 2025 | $ 51.7 | Intangible Assets, Net (in millions): | (in millions) | June 30, 2025 Net Book Value | December 31, 2024 Net Book Value | | :-------------------- | :--------------------------- | :--------------------------- | | Customer relationships | $ 8.5 | $ 9.6 | | Internal-use software | $ 44.2 | $ 36.8 | | Developed technology | $ 21.5 | $ 22.5 | | Patents | $ 28.1 | $ 29.6 | | Total intangible assets | $ 102.3 | $ 98.5 | - Amortization expense for intangible assets was $2.6 million for Q2 2025 (vs $2.4 million Q2 2024) and $5.0 million for H1 2025 (vs $4.8 million H1 2024)[45] Note 7. Investments This note details the company's investments - Equity securities without readily determinable fair values totaled $19.1 million (June 2025) and $21.9 million (Dec 2024), carried at cost less impairment, with a $2.8 million impairment recorded for one equity security in H1 2025[46] - A strategic investment in debt securities had an amortized cost basis of $5.0 million at both June 2025 and Dec 2024, with a $4.7 million provision for credit loss recorded in H1 2025 for this debt investment[47] Note 8. Accrued Expenses and Other Current Liabilities This note details the composition of accrued expenses and other current liabilities Accrued Expenses and Other Current Liabilities (in millions): | (in millions) | June 30, 2025 | December 31, 2024 | | :---------------------------------- | :-------------- | :---------------- | | Accrued rebates | $ 175.4 | $ 148.3 | | Employee compensation and related costs | $ 131.9 | $ 142.9 | | Professional and consulting services | $ 40.9 | $ 51.6 | | Other | $ 105.3 | $ 81.2 | | Accrued expenses and other current liabilities | $ 453.4 | $ 423.9 | - The Company provides a four-year warranty on Controllers and PDMs sold in the United States and Europe, and a five-year warranty in Canada, with warranty expense estimated based on historical experience and product cost, recorded in cost of revenue[49][50] Product Warranty Liability (in millions): | (in millions) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------ | :------------------------------- | :------------------------------- | | Product warranty liability at beginning of period | $ 13.9 | $ 10.2 | | Warranty expense | $ 14.4 | $ 11.2 | | Change in estimate | $ — | $ (0.4) | | Warranty fulfillment | $ (11.2) | $ (9.4) | | Product warranty liability at the end of period | $ 17.1 | $ 11.6 | Note 9. Debt This note details the company's debt components and related transactions Debt Components (in millions): | (in millions) | Maturity Date | June 30, 2025 Amount | December 31, 2024 Amount | | :---------------------- | :------------ | :------------------- | :----------------------- | | Equipment financing | 2025 | $ 4.7 | $ 8.7 | | Mortgage | 2025 | $ 59.7 | $ 60.9 | | Convertible Senior Notes | 2026 | $ 378.4 | $ 800.0 | | Equipment financings | 2028 | $ 41.2 | $ 40.8 | | Revolving Credit Facility | 2030 | $ — | $ — | | Term Loan B | 2031 | $ 480.0 | $ 482.5 | | Senior Unsecured Notes | 2033 | $ 450.0 | $ — | | Unamortized debt discount | 2025 - 2033 | $ (3.7) | $ (5.4) | | Debt issuance costs | 2025 - 2033 | $ (10.6) | $ (7.7) | | Total debt, net | | $ 1,399.7 | $ 1,379.8 | | Less: current portion | | $ 460.7 | $ 83.8 | | Total long-term debt, net | | $ 939.0 | $ 1,296.1 | - During the six months ended June 30, 2025, the Company repurchased $419.9 million in principal of Convertible Notes for $541.5 million in cash, resulting in a $123.9 million loss on extinguishment[58] - In June 2025, the Company issued a notice of redemption for the remaining $380.1 million in principal of Convertible Notes, with settlement expected in August 2025[59] - In March 2025, the Revolving Credit Facility borrowing capacity was upsized to $500 million and its maturity date extended to March 2030, and in June 2025, the Term Loan B interest rate was amended to SOFR plus 2.00%, and the Revolving Credit Facility to SOFR plus an applicable margin of 1.50% to 2.00%[60][61] - In March 2025, the Company issued $450 million aggregate principal amount of 6.5% Senior Unsecured Notes due April 2033, with net proceeds of $440.7 million used to repurchase a portion of the Convertible Notes[62] Note 10. Financial Instruments and Fair Value This note details the company's financial instruments and fair value measurements Financial Instruments Disclosed at Fair Value (June 30, 2025, in millions): | (in millions) | Level 1 | Level 2 | Level 3 | Total | | :---------------------- | :------ | :------ | :------ | :------ | | Term Loan B | $ 483.9 | $ — | $ — | $ 483.9 | | Senior Unsecured Notes | $ 469.4 | $ — | $ — | $ 469.4 | | Convertible Senior Notes | $ — | $ 526.6 | $ — | $ 526.6 | | Equipment financings | $ — | $ — | $ 45.8 | $ 45.8 | | Mortgage | $ — | $ — | $ 59.6 | $ 59.6 | | Total | $ 953.3 | $ 526.6 | $ 105.3 | $ 1,585.2 | Assets Measured at Fair Value on a Recurring Basis (June 30, 2025, in millions): | (in millions) | Level 1 | Level 2 | Level 3 | Total | | :---------------------- | :------ | :------ | :------ | :------ | | Cash | $ 185.9 | $ — | $ — | $ 185.9 | | Money market mutual funds | $ 806.9 | $ — | $ — | $ 806.9 | | Term deposits | $ — | $ 128.7 | $ — | $ 128.7 | | Interest rate swaps | $ — | $ 0.2 | $ — | $ 0.2 | | Total assets | $ 992.9 | $ 128.9 | $ — | $ 1,121.8 | - A $4.7 million provision for credit loss on debt securities was included in selling, general and administrative expenses for the six months ended June 30, 2025[68] Note 11. Derivative Instruments This note details the company's derivative instruments - In April 2025, the Company replaced expired interest rate swaps with new ones, receiving variable rate interest and paying fixed interest at a weighted average rate of 3.47% on $460.0 million of Term Loan B, designated as cash flow hedges[70] - As of June 30, 2025, $1.7 million of net gains related to interest rate swaps in accumulated other comprehensive income will be reclassified into interest expense over the next 12 months[71] Note 12. Commitments and Contingencies This note details the company's commitments and contingencies, including legal proceedings - On April 24, 2025, a U.S. District Court entered final judgment in favor of Insulet against EOFlow for trade secret misappropriation, upholding a jury verdict of $452 million in damages (reduced to $59.4 million due to a permanent injunction)[72] - The permanent injunction prohibits EOFlow from using, selling, or seeking regulatory approval for products designed with Insulet's trade secrets worldwide, with a limited six-month exception for existing patients in South Korea and the EU[72] - The Company has not recorded the awarded damages as EOFlow has appealed, and Insulet has cross-appealed, with the court of appeals partially staying the injunction for existing patients in South Korea and the EU until further notice[73] Note 13. Segment and Geographic Data This note details the company's segment and geographic data - The Company operates under one reportable segment, with the CEO as the Chief Operating Decision-Maker (CODM), evaluating consolidated operating income and net income[74] Geographic Revenue (in millions): | (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 | | :------------ | :------------------------------- | :------------------------------- | :------------------------------ | :------------------------------ | | U.S. | $ 463.3 | $ 360.3 | $ 879.9 | $ 686.8 | | International | $ 185.8 | $ 128.2 | $ 338.1 | $ 243.4 | | Total revenue | $ 649.1 | $ 488.5 | $ 1,218.1 | $ 930.2 | Geographic Long-Lived Assets, Net (in millions): | (in millions) | June 30, 2025 | December 31, 2024 | | :------------------------ | :-------------- | :---------------- | | U.S. | $ 465.9 | $ 475.9 | | Malaysia | $ 160.9 | $ 159.1 | | China | $ 75.2 | $ 78.5 | | Other | $ 18.4 | $ 9.7 | | Total long-lived assets, net | $ 720.4 | $ 723.1 | Note 14. Equity This note details the company's equity activities, including stock-based compensation and share repurchases - In May 2025, the Company adopted the 2025 Stock Option and Incentive Plan, replacing its previous plan, with a maximum of 7.4 million shares to be issued[77] Stock-Based Compensation Expense (in millions): | (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 | | :---------------------------------- | :------------------------------- | :------------------------------- | :------------------------------ | :------------------------------ | | Cost of revenue | $ 0.2 | $ 0.2 | $ 0.4 | $ 0.4 | | Research and development expenses | $ 2.9 | $ 2.1 | $ 5.5 | $ 4.2 | | Selling, general and administrative expenses | $ 4.4 | $ 14.6 | $ 19.8 | $ 26.6 | | Total | $ 7.5 | $ 17.0 | $ 25.7 | $ 31.2 | - During the six months ended June 30, 2025, the Company granted 118,013 performance stock units (PSUs) with a weighted-average grant-date fair value of $299.45 per share, including a relative total shareholder return market component[79] - The Company has an unfunded, non-qualified deferred compensation plan for non-employee directors, with 3,495 shares held in a rabbi trust as of June 30, 2025[80] - In March 2025, the Board authorized a $125 million share repurchase program through December 31, 2026, and during Q2 and H1 2025, approximately 93 thousand shares were repurchased for $30.1 million[81] Note 15. Income Taxes This note details the company's income tax expense and effective tax rates - The effective tax rate was 20.8% for Q2 2025 and 24.3% for H1 2025, primarily due to non-deductible charges from convertible debt repurchase, partially offset by windfall tax benefits from stock-based compensation[82] - For Q2 and H1 2024, the effective tax rate was a benefit of 269.3% and 126.6% respectively, largely due to a $146.9 million (Q2) and $153.5 million (H1) tax benefit from the release of a valuation allowance on deferred tax assets[83] - The 'One Big Beautiful Bill Act' (OBBBA) enacted in July 2025 includes permanent extension of certain Tax Cuts and Jobs Act provisions, international tax framework modifications, and restoration of favorable tax treatment for domestic R&D expenditures and accelerated deductions for qualified property, with the Company assessing its impact[84][115] Note 16. Earnings Per Share This note details the calculation of basic and diluted earnings per share Earnings Per Share (in millions, except share and per share data): | (in millions, except share and 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 | | :--------------------------------------------- | :------------------------------- | :------------------------------- | :------------------------------ | :------------------------------ | | Net income | $ 22.5 | $ 188.6 | $ 57.9 | $ 240.1 | | Add back interest expense, net of tax | $ — | $ 2.5 | $ — | $ 4.9 | | Net income, diluted | $ 22.5 | $ 191.1 | $ 57.9 | $ 245.0 | | Weighted average number of common shares outstanding, basic (in thousands) | 70,389 | 70,062 | 70,330 | 70,010 | | Restricted stock units (in thousands) | 159 | 72 | 195 | 77 | | Stock options (in thousands) | 104 | 140 | 115 | 157 | | Convertible Notes (in thousands) | — | 3,528 | — | 3,528 | | Weighted average number of common shares outstanding, diluted (in thousands) | 70,652 | 73,802 | 70,641 | 73,771 | | Earnings per share: Basic | $ 0.32 | $ 2.69 | $ 0.82 | $ 3.43 | | Earnings per share: Diluted | $ 0.32 | $ 2.59 | $ 0.82 | $ 3.32 | Common Share Equivalents Excluded from Diluted EPS (in thousands): | (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------- | :------------------------------- | :------------------------------- | :------------------------------ | :------------------------------ | | Restricted stock units | 441 | 471 | 431 | 456 | | Stock options | 130 | 286 | 134 | 249 | | Convertible Notes | 1,862 | — | 2,671 | — | | Total | 2,433 | 757 | 3,236 | 706 | Note 17. Accumulated Other Comprehensive Income This note details changes in accumulated other comprehensive income (loss), net of tax Changes in Accumulated Other Comprehensive Income (Loss), Net of Tax (Three Months Ended June 30, 2025, in millions): | (in millions) | Foreign Currency Translation Adjustment | Unrealized Loss on Securities | Unrealized Gain on Cash Flow Hedges | Accumulated Other Comprehensive (Loss) Income | | :------------------------------------------ | :------------------------------------ | :---------------------------- | :---------------------------------- | :-------------------------------------------- | | Balance at beginning of period | $ (12.0) | $ (0.3) | $ 6.3 | $ (6.0) | | Other comprehensive income (loss) before reclassifications | $ 22.3 | $ — | $ (6.1) | $ 16.3 | | Amounts reclassified to net income | $ — | $ — | $ 5.1 | $ 5.1 | | Balance at the end of period | $ 10.3 | $ (0.3) | $ 5.3 | $ 15.4 | Changes in Accumulated Other Comprehensive Income (Loss), Net of Tax (Six Months Ended June 30, 2025, in millions): | (in millions) | Foreign Currency Translation Adjustment | Unrealized Loss on Securities | Unrealized Gain on Cash Flow Hedges | Accumulated Other Comprehensive (Loss) Income | | :------------------------------------------ | :------------------------------------ | :---------------------------- | :---------------------------------- | :-------------------------------------------- | | Balance at December 31, 2024 | $ (22.3) | $ (0.3) | $ 9.4 | $ (13.2) | | Other comprehensive income (loss) before reclassifications | $ 32.6 | $ — | $ (14.5) | $ 18.1 | | Amounts reclassified to net income | $ — | $ — | $ 10.5 | $ 10.5 | | Balance at June 30, 2025 | $ 10.3 | $ (0.3) | $ 5.3 | $ 15.4 | Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations This section provides management's perspective on Insulet's financial condition and operational performance, highlighting key factors affecting revenue, costs, non-operating items, and liquidity, including strategic initiatives, product development, and financial outlook Overview This section outlines Insulet's mission, product platform, strategic growth initiatives, and market expansion efforts - Insulet's mission is to improve the lives of people with diabetes through its proprietary Omnipod product platform, a continuous insulin delivery system[88] - The Omnipod platform includes Omnipod 5 (tubeless automated insulin delivery system integrated with CGM, controlled by smartphone/Controller, indicated for Type 1 and Type 2 diabetes in the U.S.) and Omnipod DASH (Bluetooth-enabled Pod controlled by PDM)[88] - The company aims for sustained profitable growth, launching Omnipod 5 in nine new countries this year (Italy, Denmark, Finland, Norway, Sweden, Australia, Belgium, Canada, Switzerland) and expanding international teams[89] - Completed the randomized portion of the RADIANT study for Omnipod 5 with Libre 2 in France, UK, and Belgium to support pricing and market access[90] - Expanding market access through direct-to-consumer advertising and growing presence in the U.S. pharmacy channel for simpler, affordable access to Omnipod 5 and DASH[90] - Product development focuses on AID offerings (smartphone integration, CGM choice) and enhancing customer experience, with the Omnipod 5 app for iPhone compatible with Dexcom's G7 CGM becoming fully available in the U.S. in June 2025[91] - The recurring revenue model from disposable Pods (used continuously for up to three days) is expected to drive increasing revenue as the customer base grows, with low or no upfront investment in regions with favorable reimbursement[92] Results of Operations This section details the company's financial performance, including revenue growth across U.S., International, and Drug Delivery segments, changes in cost of revenue, research and development expenses, and selling, general and administrative expenses, also covering non-operating items like interest expense/income, other income/expense, and income tax, concluding with a reconciliation of Adjusted EBITDA Revenue This section analyzes revenue growth across U.S., International, and Drug Delivery segments, driven by customer base expansion and product launches Total Revenue and Growth (in millions): | (dollars in millions) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Percent Change | Constant Currency Change | | :-------------------- | :------------------------------- | :------------------------------- | :------------- | :----------------------- | | U.S. | $ 453.2 | $ 352.3 | 28.7 % | 28.7 % | | International | $ 185.8 | $ 128.2 | 45.0 % | 38.8 % | | Total Omnipod Products | $ 639.0 | $ 480.4 | 33.0 % | 31.4 % | | Drug Delivery | $ 10.2 | $ 8.1 | 25.7 % | 25.7 % | | Total | $ 649.1 | $ 488.5 | 32.9 % | 31.3 % | | | | | | | | (dollars in millions) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Percent Change | Constant Currency Change | | :-------------------- | :------------------------------- | :------------------------------- | :------------- | :----------------------- | | U.S. | $ 854.9 | $ 670.0 | 27.6 % | 27.6 % | | International | $ 338.1 | $ 243.4 | 38.9 % | 37.5 % | | Total Omnipod Products | $ 1,193.0 | $ 913.4 | 30.6 % | 30.2 % | | Drug Delivery | $ 25.1 | $ 16.8 | 49.2 % | 49.2 % | | Total | $ 1,218.1 | $ 930.2 | 30.9 % | 30.6 % | - Total revenue increased by 32.9% (31.3% constant currency) for Q2 2025 and 30.9% (30.6% constant currency) for H1 2025, primarily due to higher sales volume from a growing customer base[93] - U.S. Omnipod revenue increased by 28.7% for Q2 2025 and 27.6% for H1 2025, driven by customer base growth and pharmacy channel expansion[94][95] - International Omnipod revenue increased by 45.0% (38.8% constant currency) for Q2 2025 and 38.9% (37.5% constant currency) for H1 2025, due to higher volumes from Omnipod 5 launches and a higher average selling price for Omnipod 5[97][98] - Drug Delivery revenue increased by 25.7% for Q2 2025 and 49.2% for H1 2025, driven by increased orders from a partner (Amgen for Neulasta Onpro kit)[100] - For full year 2025, strong U.S. revenue growth is expected from the recurring revenue model and continued Omnipod 5 volume growth, while International Omnipod revenue is expected to increase due to new customers, Omnipod 5 conversions, and launches in Australia, Canada, and Nordic countries[96][99] Costs and Expenses This section examines changes in cost of revenue, gross margin, research and development, and selling, general and administrative expenses Cost of Revenue and Gross Margin (in millions): | (dollars in millions) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Percent Change | Gross Margin 2025 | Gross Margin 2024 | | :-------------------- | :------------------------------- | :------------------------------- | :------------- | :---------------- | :---------------- | | Cost of revenue | $ 196.9 | $ 157.6 | 25.0 % | 69.7 % | 67.7 % | | | | | | | | | (dollars in millions) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Percent Change | Gross Margin 2025 | Gross Margin 2024 | | :-------------------- | :------------------------------- | :------------------------------- | :------------- | :---------------- | :---------------- | | Cost of revenue | $ 356.8 | $ 292.5 | 22.0 % | 70.7 % | 68.6 % | - Gross margin increased by 190 basis points for Q2 2025 and 210 basis points for H1 2025, primarily due to a $13.5 million charge in the prior year related to Omnipod GO inventory[102][103] - For full year 2025, gross margin is expected to be approximately 71.0%, driven by improved manufacturing efficiencies, pricing benefits, and volume, partially offset by the negative impact of tariffs[104] Research and Development Expenses (in millions): | (dollars in millions) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Percent Change | % of Revenue 2025 | % of Revenue 2024 | | :-------------------- | :------------------------------- | :------------------------------- | :------------- | :---------------- | :---------------- | | R&D expenses | $ 73.4 | $ 53.9 | 36.2 % | 11.3 % | 11.0 % | | | | | | | | | (dollars in millions) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Percent Change | % of Revenue 2025 | % of Revenue 2024 | | :-------------------- | :------------------------------- | :------------------------------- | :------------- | :---------------- | :---------------- | | R&D expenses | $ 133.0 | $ 104.1 | 27.8 % | 10.9 % | 11.2 % | - R&D expenses increased due to year-over-year headcount additions for Omnipod and pipeline products, and higher consulting costs for clinical trials and next-generation products[105] - R&D spending is expected to increase in 2025 as the company continues to invest in innovation and clinical pipeline[106] Selling, General and Administrative Expenses (in millions): | (dollars in millions) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Percent Change | % of Revenue 2025 | % of Revenue 2024 | | :-------------------- | :------------------------------- | :------------------------------- | :------------- | :---------------- | :---------------- | | SG&A expenses | $ 257.7 | $ 222.5 | 15.8 % | 39.7 % | 45.5 % | | | | | | | | | (dollars in millions) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Percent Change | % of Revenue 2025 | % of Revenue 2024 | | :-------------------- | :------------------------------- | :------------------------------- | :------------- | :---------------- | :---------------- | | SG&A expenses | $ 518.4 | $ 422.2 | 22.8 % | 42.6 % | 45.4 % | - SG&A expenses increased primarily due to headcount additions for customer product support, business growth, and Omnipod 5 support, partially offset by the reversal of stock-based compensation expense from the former CEO's departure[107] - SG&A expenses are expected to increase in 2025 due to investments in operating structure, headcount, and international expansion for Omnipod platform and Omnipod 5 launches[108] Non-Operating Items This section details changes in interest expense and income, other income/expense, and the effective tax rate, including impacts from debt transactions and tax legislation - Interest expense increased to $19.6 million for Q2 2025 (from $11.0 million Q2 2024) and $28.8 million for H1 2025 (from $21.7 million H1 2024), primarily due to the issuance of senior unsecured notes and lower gains on new interest rate swaps[109] - Interest income increased to $10.1 million for Q2 2025 (from $9.3 million Q2 2024) and $20.3 million for H1 2025 (from $18.7 million H1 2024), driven by higher average cash balances, partially offset by lower average interest rates[110] - Net interest expense for full year 2025 is expected to increase by approximately $30 million compared to 2024 due to debt transactions and replacement of interest rate swaps[111] - Other income, net was $1.3 million for Q2 2025 (vs other expense, net of $0.9 million Q2 2024), and other expense, net was $1.8 million for H1 2025 (vs $2.5 million H1 2024), including a $2.8 million impairment on an equity investment[112] - Effective tax rate was 20.8% for Q2 2025 and 24.3% for H1 2025, a significant increase from a tax benefit of 269.3% and 126.6% for the same periods in 2024, primarily due to the release of a valuation allowance against deferred tax assets in Q2 2024[113] - The global minimum tax legislation (OECD) did not impact H1 2025 financial statements, but the company is evaluating its potential impact on future periods, and the 'One Big Beautiful Bill Act' (OBBBA) enacted in July 2025, which includes tax changes like immediate expensing for domestic R&D, is being assessed for its impact on consolidated financial statements[114][115] Adjusted EBITDA This section provides a reconciliation of Adjusted EBITDA, a non-GAAP measure, highlighting key adjustments from net income Adjusted EBITDA Reconciliation (in millions): | (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 | | 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 | $ 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 | Non-GAAP Financial Measures This section defines and explains the use of non-GAAP financial measures such as constant currency revenue growth, Adjusted EBITDA, and free cash flow - Constant currency revenue growth is a non-GAAP measure used to evaluate operating results by adjusting for currency exchange rate fluctuations, and is a management incentive compensation metric[118] - Adjusted EBITDA is a non-GAAP measure representing net income adjusted for interest, taxes, depreciation, amortization, stock-based compensation, and other significant non-recurring items, used by management and investors to assess comparative performance[119] - Free cash flow, a non-GAAP measure, is calculated as net cash provided by operating activities less capital expenditures, used by management to evaluate operating results[120] Liquidity and Capital Resources This section discusses the company's financial position, including cash, debt, and equity, and its ability to meet future obligations, detailing recent debt transactions, share repurchase activities, and a summary of cash flow movements Contractual Obligations This section outlines the company's commitments, including significant purchase obligations, and assesses liquidity for future requirements - The Company is committed to purchasing approximately $50 million in semiconductor chips from NXP USA, Inc. as of June 30, 2025[122] - Management believes current liquidity will be sufficient to meet projected operating, investing, and debt service requirements for at least the next twelve months[123] Capitalization This section presents key financial condition and liquidity measures, including cash, debt, equity, and debt-to-capital ratios Key Financial Condition and Liquidity Measures (in millions): | (dollars in millions) | June 30, 2025 | December 31, 2024 | | :-------------------------- | :-------------- | :---------------- | | Cash and cash equivalents | $ 1,121.6 | $ 953.4 | | Current portion of long-term debt | $ 460.7 | $ 83.8 | | Long-term debt, net | $ 939.0 | $ 1,296.1 | | Total debt, net | $ 1,399.7 | $ 1,379.8 | | Total stockholders' equity | $ 1,462.9 | $ 1,211.6 | | Debt-to-total capital ratio | 49 % | 53 % | | Net debt-to-total capital ratio | 10 % | 16 % | Convertible Debt This section details the repurchase and redemption of convertible senior notes, including principal amounts and conversion terms - The Company repurchased $420 million in principal of Convertible Senior Notes in March and April 2025[125] Outstanding Convertible Notes (as of June 30, 2025): | Issuance Date | Coupon | Principal Outstanding (in millions) | Conversion Rate (per $1,000 face value) | Conversion Price per Share | | :------------ | :----- | :-------------------------------- | :-------------------------------------- | :------------------------- | | September 2019 | 0.375% | $ 380.1 | 4.4105 | $ 226.73 | - In June 2025, a redemption notice was issued for the remaining $380.1 million outstanding Convertible Notes, with settlement expected in August 2025 using cash and proceeds from capped call options[126] Credit Agreement This section describes the company's revolving credit facility and term loan, including borrowing capacity, maturity, and customary covenants - The Company has a $500 million senior secured revolving credit facility expiring in 2030, with no outstanding amount as of June 30, 2025[127] - The Revolving Credit Facility and Term Loan B contain customary covenants, including a specified leverage ratio for the Revolving Credit Facility and restrictions on additional indebtedness, asset dispositions, and liens for Term Loan B[127] Senior Unsecured Notes This section outlines the issuance of senior unsecured notes, their principal amount, interest rate, maturity, and associated covenants - In March 2025, the Company issued $450 million aggregate principal amount of 6.5% senior unsecured notes due April 2033[128] - These notes include leverage and fixed charge coverage ratio covenants, measured upon future debt incurrence, and other customary covenants not considered restrictive to operations[128] Share Repurchase Program This section details the board-authorized share repurchase program, including the amount authorized and shares repurchased - In March 2025, the Board authorized a program to repurchase up to $125 million of common stock through December 31, 2026, to offset dilution from stock-based compensation[129] - During Q2 and H1 2025, approximately 93 thousand shares were repurchased for $30.1 million under this program[129] Summary of Cash Flows This section provides a summary of cash flow movements from operating, investing, and financing activities, including restatement details - The Condensed Consolidated Statement of Cash Flow for H1 2024 was restated to correct a presentation error affecting operating and financing activities, with no impact on net cash increase or net income[130] Summary of Cash Flows (in millions): | (in millions) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 (Restated) | | :------------------------------------------ | :------------------------------- | :---------------------------------------- | | Cash provided by (used in): Operating activities | $ 260.3 | $ 174.4 | | Investing activities | $ (38.9) | $ (48.9) | | Financing activities | $ (65.8) | $ (5.3) | | Effect of exchange rate changes on cash and cash equivalents | $ 12.7 | $ (3.4) | | Net increase in cash and cash equivalents | $ 168.2 | $ 116.8 | Operating Activities This section analyzes net cash provided by operating activities, focusing on net income adjustments and working capital changes - Net cash provided by operating activities was $260.3 million for H1 2025, primarily from net income adjusted for non-cash items, partially offset by an $11.9 million working capital outflow[132] - Working capital outflow was driven by increases in accounts receivable ($66.9 million) and prepaid expenses/other assets ($31.6 million), partially offset by increases in accounts payable ($72.6 million) and accrued expenses/other liabilities ($18.7 million)[132] Investing Activities This section details net cash used in investing activities, including capital expenditures and investments in developed software - Net cash used in investing activities was $38.9 million for H1 2025, down from $48.9 million for H1 2024[133] - Capital expenditures decreased to $30.9 million for H1 2025 (from $44.6 million H1 2024), primarily due to lower machinery/equipment purchases for the Malaysia manufacturing facility[134] - Capital expenditures are expected to increase in 2025 for global expansion and manufacturing/supply chain optimization[134] - Investments in developed software increased to $8.0 million for H1 2025 (from $4.3 million H1 2024), mainly for cloud-based capabilities[135] Financing Activities This section examines net cash used in financing activities, including debt transactions, stock option exercises, and share repurchases - Net cash used in financing activities was $65.8 million for H1 2025, compared to $5.3 million for H1 2024[136] - In H1 2025, the Company received $440.7 million from Senior Unsecured Notes and $75.7 million from capped call options, used to repurchase $541.5 million of Convertible Notes[137] - Proceeds from option exercises increased to $12.6 million for H1 2025 (from $6.9 million H1 2024) due to more exercises driven by stock price increase[139] - Payments for taxes related to net restricted and performance stock unit settlements increased to $22.9 million for H1 2025 (from $6.1 million H1 2024) due to higher fair market value of vested units[140] - $30.1 million was paid to repurchase common shares in H1 2025 to offset stock-based compensation dilution[141] Free Cash Flow This section reconciles and analyzes free cash flow, a non-GAAP measure, highlighting its components and changes - Free cash flow increased by $99.6 million to $229.4 million for H1 2025 (from $129.8 million H1 2024), primarily due to increased operating income adjusted for depreciation, amortization, and stock-based compensation[142] Free Cash Flow Reconciliation (in millions): | (in millions) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 (Restated) | | :-------------------------------- | :------------------------------- | :---------------------------------------- | | Net cash provided by operating activities | $ 260.3 | $ 174.4 | | Capital expenditures | $ (30.9) | $ (44.6) | | Free cash flow | $ 229.4 | $ 129.8 | Critical Accounting Policies and Estimates This section highlights key management judgments and assumptions in financial reporting, including revenue recognition and income taxes - The preparation of financial statements requires management judgment and assumptions, particularly for revenue recognition, income taxes, product warranty, and inventory reserves[144][145] - No significant changes to critical accounting policies or underlying assumptions from the Annual Report on Form 10-K for the year ended December 31, 2024[145] Accounting Standards Issued and Not Yet Adopted This section outlines new accounting standards, including those for income tax disclosures and expense disaggregation, and their expected impact - ASU 2023-09 (Income Taxes) requires incremental annual income tax disclosures, to be adopted for the 2025 annual filing[146] - ASU 2024-03 (Income Statement—Expense Disaggregation) requires disaggregated expense disclosures, to be adopted for the 2027 annual filing[147] - ASU 2024-04 (Debt—Convertible Debt) clarifies induced conversion accounting for convertible debt but is not expected to impact the Company's financial statements due to the redemption of remaining convertible debt prior to the January 2026 adoption date[148] FORWARD-LOOKING STATEMENTS This section cautions that forward-looking statements are subject to risks and uncertainties, and the company disclaims any obligation to update them - The report contains forward-looking statements based on current expectations and projections, identified by terms like 'may,' 'will,' 'expects,' 'plans,' etc[149] - These statements are subject to risks, uncertainties, and assumptions, including those discussed in the 'Risk Factors' section of the Annual Report on Form 10-K and this quarterly report[150] - The company expressly disclaims any obligation to update these statements, except as required by law[150] Item 3. Quantitative and Qualitative Disclosures About Market Risk This section refers to the company's Annual Report on Form 10-K for a detailed discussion of interest rate, market price sensitive instruments, and foreign currency exchange risk - For disclosures about interest rate, market price sensitive instruments, and foreign currency exchange risk, refer to 'Part II. Item 7A. Quantitative and Qualitative Disclosures About Market Risk' in the Annual Report on Form 10-K for the year ended December 31, 2024[151] Item 4. Controls and Procedures This section confirms the effectiveness of the company's disclosure controls and procedures as of June 30, 2025, and states that there were no material changes in internal control over financial reporting during the quarter - Management, including the CEO and CFO, evaluated the effectiveness of disclosure controls and procedures as of June 30, 2025, and concluded they were effective[154] - There were no changes in internal control over financial reporting during the three months ended June 30, 2025, that materially affected or are reasonably likely to materially affect it[155] PART II. OTHER INFORMATION Item 1. Legal Proceedings This section refers to Note 12 of the condensed consolidated financial statements for information regarding material pending legal proceedings - Information regarding material pending legal proceedings is provided in Note 12 to the condensed consolidated financial statements[156] Item 1A. Risk Factors This section directs readers to the Annual Report on Form 10-K for a discussion of business risk factors, noting no material changes since that filing - For a discussion of business, financial condition, results of operations, and cash flow risk factors, refer to the 'Risk Factors' section in the Annual Report on Form 10-K for the year ended December 31, 2024[157] - There have been no material changes to the risk factors disclosed in the aforementioned Annual Report[157] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds This section provides details on the company's common stock repurchases during the second quarter of 2025 under a previously authorized program Issuer Purchases of Equity Securities (Three Months Ended June 30, 2025): | Fiscal Period | Total Number of Shares Purchased | Average Price Paid per Share | Total Number of Shares Purchased as a Part of Publicly Announced Program | Maximum Dollar Value of Shares that May Yet Be Purchased Under the Program (in millions) | | :-------------------- | :------------------------------- | :--------------------------- | :----------------------------------------------------------------------- | :--------------------------------------------------------------------------------------- | | 4/1/2025 - 4/30/2025 | $ — | $ — | $ — | $ 125.0 | | 5/1/2025-5/31/2025 | $ 69,700 | $ 324.32 | $ 69,700 | $ 102.4 | | 6/1/2025-6/30/2025 | $ 23,332 | $ 320.68 | $ 23,332 | $ 94.9 | - In March 2025, the Board authorized a program to repurchase up to $125 million of common stock through December 31, 2026[158] Item 3. Defaults Upon Senior Securities This section states that there were no defaults upon senior securities - There were no defaults upon senior securities[159] Item 4. Mine Safety Disclosures This section indicates that mine safety disclosures are not applicable to the company - Mine safety disclosures are not applicable[160] Item 5. Other Information This section provides information on Rule 10b5-1 t