Financial Analysis

"COMMITMENTS AND CONTINGENCIES Leases The Company leases office, manufacturing, and clinical centers under non-cancelable operating leases which expire on various dates through 2033. These leases generally contain scheduled rent increases or escalation clauses and renewal options. Operating lease ROU assets and lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date. The operating lease ROU assets also include any lease payments made to the lessor at or before the commencement date as well as variable lease payments which are based on a consumer price index. The Company is also subject to variable lease payments related to janitorial services and electricity which are not included in the operating lease ROU asset as they are based on actual usage. The Company recognizes operating lease expenses, generally on a straight-line basis over the lease period. During the three months ended March 31, 2026, there were no material changes to the leases from those described in Note 8, Commitments and Contingencies, included in the Annual Report. Contractual obligations under operating lease liabilities were as follows (in thousands): Year Ended December 31: 2026 (remainder of the year) $ 12,562 2027 17,109 2028 17,026 2029 17,122 2030 17,613 Thereafter 15,220 Total lease payments 96,652 Less: Imputed interest (17,674) Total lease liabilities $ 78,978 Self-Insured Health Plan As of January 1, 2025, the Compa …

CommitmentsAndContingenciesDisclosureTextBlock · excerpt; the full note is in the filing

DEBT 1.50% Senior Convertible Notes due 2029 The carrying amounts of the Companys 2029 Notes were as follows (in thousands): March 31, 2026 December 31, 2025 Principal amount $ 661,250 $ 661,250 Unamortized debt issuance costs (10,937) (11,746) Carrying amount of senior convertible notes due 2029 $ 650,313 $ 649,504 The following table summarizes the components of interest expense and the effective interest rate for the 2029 Notes for the periods shown (in thousands, except percentages): Three Months Ended March 31, 2026 2025 Contractual coupon interest $ 2,480 $ 2,480 Amortized debt issuance costs 809 793 Total interest expense recognized on senior convertible notes due 2029 $ 3,289 $ 3,273 Effective interest rate 2.0 % 2.0 % On March 7, 2024, the Company completed an offering of $661.3 million aggregate principal amount of unsecured senior convertible notes with a stated interest rate of 1.50% and a maturity date of September 1, 2029. The proceeds include the full exercise of the option granted by the Company to the initial purchasers of the 2029 Notes to purchase up to an additional $86.3 million aggregate principal amount of notes. Interest on the 2029 Notes is payable semi-annually in arrears on March 1 and September 1 of each year, beginning on September 1, 2024. The net proceeds from the offering, after deducting initial purchasers discounts and costs directly related to the offering, were approximately $643.8 million. The initial conversion rate of the 2029 Notes is 6 …

DebtDisclosureTextBlock · excerpt; the full note is in the filing

Disaggregated revenue by payor type and major service line for the three months ended March 31, 2026, and 2025 were as follows (in thousands, except percentages): Three Months Ended March 31, 2026 2025 Amount % of Revenue Amount % of Revenue Contracted third-party payors $ 106,804 53% $ 83,802 53% Centers for Medicare & Medicaid Services 51,389 26% 38,112 24% Healthcare institutions 30,154 15% 26,673 17% Non-contracted third-party payors 11,043 6% 10,090 6% Total $ 199,390 $ 158,677

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STOCK-BASED COMPENSATION The following table summarizes the total stock-based compensation expense included in the unaudited condensed consolidated statements of operations for the three months ended March 31, 2026 and 2025 (in thousands): Three Months Ended March 31, 2026 2025 Cost of revenue $ 516 $ 783 Research and development 3,290 4,185 Selling, general and administrative 17,685 18,376 Total stock-based compensation expense $ 21,491 $ 23,344 Restricted Stock Units, Performance and Market-Based Restricted Stock Units As of March 31, 2026, there were a total of 1.4 million awards outstanding and total unamortized compensation cost of $127.2 million, net of estimated forfeitures, related to restricted stock units (RSUs), which the Company expects to recognize over a weighted average period of 1.9 years. As of March 31, 2026, there were a total of 0.9 million awards outstanding and total unamortized compensation cost of $42.9 million, net of estimated forfeitures, related to performance and market-based RSUs (PRSUs), which the Company expects to recognize over a weighted average remaining period of 1.7 years. The number of PRSUs reported as outstanding assumes the maximum number of PRSUs issuable in the key executive grant agreements. The actual number of PRSUs awarded will be based on company performance criteria. Performance and Market-Based RSUs The Company grants PRSUs to its key executives. PRSUs can be earned in accordance with the performance equity program for each r …

DisclosureOfCompensationRelatedCostsShareBasedPaymentsTextBlock · excerpt; the full note is in the filing

FAIR VALUE MEASUREMENTS Assets and Liabilities Measured at Fair Value on a Recurring Basis The Company discloses and recognizes the fair value of its assets and liabilities using a hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the reporting date. The hierarchy gives the highest priority to valuations based upon unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to valuations based upon unobservable inputs that are significant to the valuation (Level 3 measurements). The guidance establishes three levels of the fair value hierarchy as follows: Level 1 Inputs are unadjusted quoted prices in active markets for identical assets or liabilities at the measurement date. Level 2 Inputs (other than quoted market prices included in Level 1) are either directly or indirectly observable for the asset or liability through correlation with market data at the measurement date and for the duration of the instruments anticipated life. Level 3 Inputs reflect managements best estimate of what market participants would use in pricing the asset or liability at the measurement date. Consideration is given to the risk inherent in the valuation technique and the risk inherent in the inputs to the model. As …

FairValueDisclosuresTextBlock · excerpt; the full note is in the filing

INCOME TAXES The Company recorded a tax provision related to its U.S. state taxes and foreign operations during the three months ended March 31, 2026 and 2025. Due to the uncertainties surrounding the realization of the U.S. deferred tax assets through future taxable income, the Company has provided a full valuation allowance and, therefore, no benefit has been recognized for the U.S. net operating loss carryforwards and other deferred tax assets.

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Recently adopted accounting pronouncements In July 2025, the FASB issued ASU 2025-05, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets , which provides a practical expedient to measure credit losses on current accounts receivable and current contract assets. The practical expedient assumes that current conditions as of the balance sheet will persist through the reasonable and supportable forecast period of eligible assets. The ASU is effective for the year ended December 31, 2026. The Company adopted this ASU on a prospective basis. Adoption of the ASU did not have a material impact on the Company's consolidated financial statements. Recently issued accounting pronouncements not yet adopted In November 2024, the FASB issued ASU 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures , which requires disclosure about the types of costs and expenses included in certain expense captions presented on the income statement. The new disclosure requirements are effective for the Companys annual periods beginning after December 15, 2026, and interim periods beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating the impact that the adoption of this new standard may have on the Company's related disclosures. In September 2025, the FASB issued ASU 2025-06, IntangiblesGoodwill and OtherInternal-Use Software (Subtopic 350-40): Targete …

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"BUSINESS SEGMENT AND REVENUE Reportable Segments Operating segments are defined as components of an enterprise where separate financial information is evaluated regularly by the chief operating decision maker (CODM). The Company has one reportable and one operating segment, its global ambulatory cardiac monitoring business. The Companys Chief Executive Officer, who is the Companys CODM, reviews financial information presented on a consolidated basis for purposes of making operating decisions, allocating resources, and assessing financial performance. The key measure of the Company's segment profit or loss is consolidated net loss, which is reported on the Company's unaudited condensed consolidated statements of operations. Consolidated net loss is used to measure actual results versus expectations. The measure of segment assets is reported on the unaudited condensed consolidated balance sheets as total assets. Significant segment expenses within loss from operations, as well as within net loss, include cost of revenue, research and development, acquired in-process research and development (""IPR&D""), and selling, general and administrative expenses which are each separately presented on the Companys unaudited condensed consolidated statements of operations. Other segment items within net loss include interest and other income, net, and income tax provision. Disaggregation of Revenue The Company disaggregates revenue from contracts with customers by payor type. The Compa …

RevenueFromContractWithCustomerTextBlock · excerpt; the full note is in the filing

"SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying financial statements include the accounts of the Company and its wholly owned subsidiaries, and have been prepared in accordance with generally accepted accounting principles in the United States of America (U.S. GAAP) and applicable rules and regulations of the Securities and Exchange Commission (the SEC) regarding interim financial reporting. As permitted under those rules, the condensed consolidated financial statements and related disclosures as of December 31, 2025, have been derived from the audited consolidated financial statements but do not include all of the information required by U.S GAAP for complete consolidated financial statements. These unaudited condensed consolidated financial statements have been prepared on the same basis as the Companys annual consolidated financial statements and, in the opinion of management, reflect all adjustments (consisting only of normal recurring adjustments) that are necessary for the fair statement of the Companys unaudited condensed consolidated financial information. The results of operations for the three months ended March 31, 2026, are not necessarily indicative of the results to be expected for the year ending December 31, 2026, or for any other interim period or for any other future year. The accompanying unaudited condensed consolidated financial statements and related financial information should be read in conjunction with the audited f …

SignificantAccountingPoliciesTextBlock · excerpt; the full note is in the filing