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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2025
OR

☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from_____ to _____
Commission File Number: 001-37557

Penumbra, Inc.
(Exact name of registrant as specified in its charter)

Delaware |  | 05-0605598
(State or other jurisdiction of incorporation or organization) |  | (I.R.S. Employer Identification No.)

One Penumbra Place
Alameda, CA 94502
(Address of principal executive offices, including zip code)
(510) 748-3200
(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class | Trading Symbol | Name of each exchange on which registered
Common Stock, Par value $0.001 per share | PEN | The New York Stock Exchange

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes: ☒ No: ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes: ☒ No: ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer | ☒ |  | Accelerated filer | ☐
Non-accelerated filer | ☐ |  | Smaller reporting company | ☐
Emerging growth company | ☐ |  |  |

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes: ☐ No: ☒
As of October 22, 2025, the registrant had 39,162,177 shares of common stock, par value $0.001 per share, outstanding.

Table of Contents
FORM 10-Q
TABLE OF CONTENTS

|  | Page
PART I. FINANCIAL INFORMATION
Item 1. | Condensed Consolidated Financial Statements (Unaudited) | 2
| Condensed Consolidated Balance Sheets | 2
| Condensed Consolidated Statements of Operations | 3
| Condensed Consolidated Statements of Comprehensive Income (Loss) | 4
| Condensed Consolidated Statements of Stockholders’ Equity | 5
| Condensed Consolidated Statements of Cash Flows | 7
| Notes to Condensed Consolidated Financial Statements | 8
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 23
Item 3. | Quantitative and Qualitative Disclosure about Market Risk | 35
Item 4. | Controls and Procedures | 36
PART II. OTHER INFORMATION
Item 1. | Legal Proceedings | 37
Item 1A. | Risk Factors | 37
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 37
Item 3. | Defaults Upon Senior Securities | 37
Item 4. | Mine Safety Disclosure | 37
Item 5. | Other Information | 37
Item 6. | Exhibits | 38
Signatures |

Table of Contents
PART I - FINANCIAL INFORMATION
ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.
Penumbra, Inc.
Condensed Consolidated Balance Sheets
(unaudited)
(in thousands)

|  | September 30, 2025 |  | December 31, 2024
Assets |  |  |  |
Current assets: |  |  |  |
Cash and cash equivalents |  | $ | 321,029 |  |  | $ | 324,404 |
Marketable investments |  | 149,267 |  |  | 15,727 |
Accounts receivable, net of allowance for credit losses of $2,350 and $5,638 at September 30, 2025 and December 31, 2024, respectively |  | 183,430 |  |  | 167,668 |
Inventories |  | 432,365 |  |  | 406,737 |
Prepaid expenses and other current assets |  | 55,429 |  |  | 36,589 |
Total current assets |  | 1,141,520 |  |  | 951,125 |
Property and equipment, net |  | 97,730 |  |  | 62,641 |
Operating lease right-of-use assets |  | 170,715 |  |  | 177,787 |
Finance lease right-of-use assets |  | 26,790 |  |  | 28,018 |
Intangible assets, net |  | 6,368 |  |  | 6,513 |
Goodwill |  | 166,748 |  |  | 165,826 |
Deferred taxes |  | 94,478 |  |  | 100,332 |
Other non-current assets |  | 40,020 |  |  | 40,939 |
Total assets |  | $ | 1,744,369 |  |  | $ | 1,533,181 |
Liabilities and Stockholders’ Equity |  |  |  |
Current liabilities: |  |  |  |
Accounts payable |  | $ | 29,821 |  |  | $ | 31,326 |
Accrued liabilities |  | 124,273 |  |  | 112,429 |
Current operating lease liabilities |  | 13,086 |  |  | 12,221 |
Current finance lease liabilities |  | 2,423 |  |  | 2,369 |
Total current liabilities |  | 169,603 |  |  | 158,345 |
Non-current operating lease liabilities |  | 180,313 |  |  | 187,068 |
Non-current finance lease liabilities |  | 21,223 |  |  | 21,731 |
Other non-current liabilities |  | 14,534 |  |  | 15,106 |
Total liabilities |  | 385,673 |  |  | 382,250 |
Commitments and contingencies (Note 8) |  |  |  |
Stockholders’ equity: |  |  |  |
Common stock |  | 39 |  |  | 38 |
Additional paid-in capital |  | 1,165,195 |  |  | 1,096,732 |
Accumulated other comprehensive income (loss) |  | 3,114 |  |  | (5,843) |
Retained earnings |  | 190,348 |  |  | 60,004 |
Total stockholders’ equity |  | 1,358,696 |  |  | 1,150,931 |
Total liabilities and stockholders’ equity |  | $ | 1,744,369 |  |  | $ | 1,533,181 |

See accompanying notes to the unaudited condensed consolidated financial statements
2

Table of Contents
Penumbra, Inc.
Condensed Consolidated Statements of Operations
(unaudited)
(in thousands, except share and per share amounts)

|  | Three Months Ended September 30, |  | Nine Months Ended September 30,
|  | 2025 |  | 2024 |  | 2025 |  | 2024
Revenue |  | $ | 354,685 |  |  | $ | 301,039 |  |  | $ | 1,018,280 |  |  | $ | 879,097 |
Cost of revenue |  | 114,269 |  |  | 100,733 |  |  | 337,971 |  |  | 334,823 |
Gross profit |  | 240,416 |  |  | 200,306 |  |  | 680,309 |  |  | 544,274 |
Operating expenses: |  |  |  |  |  |  |  |
Research and development |  | 22,677 |  |  | 25,205 |  |  | 67,972 |  |  | 74,773 |
Sales, general and administrative |  | 168,901 |  |  | 139,737 |  |  | 482,321 |  |  | 426,052 |
Impairment charge |  | — |  |  | — |  |  | — |  |  | 76,945 |
Total operating expenses |  | 191,578 |  |  | 164,942 |  |  | 550,293 |  |  | 577,770 |
Income (loss) from operations |  | 48,838 |  |  | 35,364 |  |  | 130,016 |  |  | (33,496) |
Interest and other income, net |  | 3,487 |  |  | 4,414 |  |  | 11,477 |  |  | 10,026 |
Income (loss) before income taxes |  | 52,325 |  |  | 39,778 |  |  | 141,493 |  |  | (23,470) |
Provision for (benefit from) income taxes |  | 6,474 |  |  | 10,251 |  |  | 11,149 |  |  | (3,799) |
Net income (loss) |  | $ | 45,851 |  |  | $ | 29,527 |  |  | $ | 130,344 |  |  | $ | (19,671) |
Net income (loss) per share: |  |  |  |  |  |  |  |
Basic |  | $ | 1.17 |  |  | $ | 0.76 |  |  | $ | 3.36 |  |  | $ | (0.51) |
Diluted |  | $ | 1.17 |  |  | $ | 0.75 |  |  | $ | 3.32 |  |  | $ | (0.51) |
Weighted average shares outstanding: |  |  |  |  |  |  |  |
Basic |  | 39,078,378 |  |  | 38,610,805 |  |  | 38,827,038 |  |  | 38,706,809 |
Diluted |  | 39,302,239 |  |  | 39,178,227 |  |  | 39,250,680 |  |  | 38,706,809 |

See accompanying notes to the unaudited condensed consolidated financial statements
3

Table of Contents
Penumbra, Inc.
Condensed Consolidated Statements of Comprehensive Income (Loss)
(unaudited)
(in thousands)

|  | Three Months Ended September 30, |  | Nine Months Ended September 30,
|  | 2025 |  | 2024 |  | 2025 |  | 2024
Net income (loss) |  | $ | 45,851 |  |  | $ | 29,527 |  |  | $ | 130,344 |  |  | $ | (19,671) |
Other comprehensive (loss) income, net of tax: |  |  |  |  |  |  |  |
Foreign currency translation adjustments, net of tax |  | 86 |  |  | 3,185 |  |  | 9,105 |  |  | 881 |
Net change in unrealized (losses) gains on available-for-sale securities, net of tax |  | (127) |  |  | 900 |  |  | (148) |  |  | 1,307 |
Total other comprehensive (loss) income, net of tax |  | (41) |  |  | 4,085 |  |  | 8,957 |  |  | 2,188 |
Comprehensive income (loss) |  | $ | 45,810 |  |  | $ | 33,612 |  |  | $ | 139,301 |  |  | $ | (17,483) |

See accompanying notes to the unaudited condensed consolidated financial statements
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Table of Contents
Penumbra, Inc.
Condensed Consolidated Statements of Stockholders’ Equity
(unaudited)
(in thousands, except share amounts)

|  | Common Stock |  | Additional Paid-in Capital |  |  |  | Accumulated Other Comprehensive Income |  | Retained Earnings |  |  |  |  |  | Total Stockholders’ Equity
|  | Shares |  | Amount |  |  |  |  |  |  |
Balance at December 31, 2024 |  | 38,490,836 |  |  | $ | 38 |  |  | $ | 1,096,732 |  |  |  |  | $ | (5,843) |  |  | $ | 60,004 |  |  |  |  |  |  | $ | 1,150,931 |
Issuance of common stock |  | 194,461 |  |  | 1 |  |  | 4,022 |  |  |  |  | — |  |  | — |  |  |  |  |  |  | 4,023 |
Shares held for tax withholdings |  | (1,647) |  |  | — |  |  | (445) |  |  |  |  | — |  |  | — |  |  |  |  |  |  | (445) |
Stock-based compensation |  | — |  |  | — |  |  | 16,437 |  |  |  |  | — |  |  | — |  |  |  |  |  |  | 16,437 |
Other comprehensive income |  | — |  |  | — |  |  | — |  |  |  |  | 2,713 |  |  | — |  |  |  |  |  |  | 2,713 |
Net income |  | — |  |  | — |  |  | — |  |  |  |  | — |  |  | 39,223 |  |  |  |  |  |  | 39,223 |
Balance at March 31, 2025 |  | 38,683,650 |  |  | $ | 39 |  |  | $ | 1,116,746 |  |  |  |  | $ | (3,130) |  |  | $ | 99,227 |  |  |  |  |  |  | $ | 1,212,882 |
Issuance of common stock |  | 244,129 |  |  | — |  |  | 6,704 |  |  |  |  | — |  |  | — |  |  |  |  |  |  | 6,704 |
Issuance of common stock under employee stock purchase plan |  | 43,604 |  |  | — |  |  | 8,866 |  |  |  |  | — |  |  | — |  |  |  |  |  |  | 8,866 |
Shares held for tax withholdings |  | (230) |  |  | — |  |  | (62) |  |  |  |  | — |  |  | — |  |  |  |  |  |  | (62) |
Stock-based compensation |  | — |  |  | — |  |  | 14,006 |  |  |  |  | — |  |  | — |  |  |  |  |  |  | 14,006 |
Other comprehensive income |  | — |  |  | — |  |  | — |  |  |  |  | 6,285 |  |  | — |  |  |  |  |  |  | 6,285 |
Net income |  | — |  |  | — |  |  | — |  |  |  |  | — |  |  | 45,270 |  |  |  |  |  |  | 45,270 |
Balance at June 30, 2025 |  | 38,971,153 |  |  | $ | 39 |  |  | $ | 1,146,260 |  |  |  |  | $ | 3,155 |  |  | $ | 144,497 |  |  |  |  |  |  | $ | 1,293,951 |
Issuance of common stock |  | 179,573 |  |  | — |  |  | 4,652 |  |  |  |  | — |  |  | — |  |  |  |  |  |  | 4,652 |
Shares held for tax withholdings |  | (374) |  |  | — |  |  | (90) |  |  |  |  | — |  |  | — |  |  |  |  |  |  | (90) |
Stock-based compensation |  | — |  |  | — |  |  | 14,373 |  |  |  |  | — |  |  | — |  |  |  |  |  |  | 14,373 |
Other comprehensive loss |  | — |  |  | — |  |  | — |  |  |  |  | (41) |  |  | — |  |  |  |  |  |  | (41) |
Net income |  | — |  |  | — |  |  | — |  |  |  |  | — |  |  | 45,851 |  |  |  |  |  |  | 45,851 |
Balance at September 30, 2025 |  | 39,150,352 |  |  | $ | 39 |  |  | $ | 1,165,195 |  |  |  |  | $ | 3,114 |  |  | $ | 190,348 |  |  |  |  |  |  | $ | 1,358,696 |

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|  | Common Stock |  | Additional Paid-in Capital |  |  |  | Accumulated Other Comprehensive Income |  | Retained Earnings |  |  |  |  |  | Total Stockholders’ Equity
|  | Shares |  | Amount |  |  |  |  |  |  |
Balance at December 31, 2023 |  | 38,681,549 |  |  | $ | 39 |  |  | $ | 1,047,198 |  |  |  |  | $ | (3,151) |  |  | $ | 134,858 |  |  |  |  |  |  | $ | 1,178,944 |
Issuance of common stock |  | 76,597 |  |  | — |  |  | 238 |  |  |  |  | — |  |  | — |  |  |  |  |  |  | 238 |
Shares held for tax withholdings |  | (1,732) |  |  | — |  |  | (421) |  |  |  |  | — |  |  | — |  |  |  |  |  |  | (421) |
Stock-based compensation |  | — |  |  | — |  |  | 15,455 |  |  |  |  | — |  |  | — |  |  |  |  |  |  | 15,455 |
Other comprehensive loss |  | — |  |  | — |  |  | — |  |  |  |  | (1,687) |  |  | — |  |  |  |  |  |  | (1,687) |
Net income |  | — |  |  | — |  |  | — |  |  |  |  | — |  |  | 11,002 |  |  |  |  |  |  | 11,002 |
Balance at March 31, 2024 |  | 38,756,414 |  |  | $ | 39 |  |  | $ | 1,062,470 |  |  |  |  | $ | (4,838) |  |  | $ | 145,860 |  |  |  |  |  |  | $ | 1,203,531 |
Issuance of common stock |  | 28,043 |  |  | — |  |  | 61 |  |  |  |  | — |  |  | — |  |  |  |  |  |  | 61 |
Issuance of common stock under employee stock purchase plan |  | 51,752 |  |  | — |  |  | 8,861 |  |  |  |  | — |  |  | — |  |  |  |  |  |  | 8,861 |
Shares held for tax withholdings |  | (428) |  |  | — |  |  | (89) |  |  |  |  | — |  |  | — |  |  |  |  |  |  | (89) |
Stock-based compensation |  | — |  |  | — |  |  | 9,277 |  |  |  |  | — |  |  | — |  |  |  |  |  |  | 9,277 |
Other comprehensive loss |  | — |  |  | — |  |  | — |  |  |  |  | (210) |  |  | — |  |  |  |  |  |  | (210) |
Net loss |  | — |  |  | — |  |  | — |  |  |  |  | — |  |  | (60,200) |  |  |  |  |  |  | (60,200) |
Balance at June 30, 2024 |  | 38,835,781 |  |  | $ | 39 |  |  | $ | 1,080,580 |  |  |  |  | $ | (5,048) |  |  | $ | 85,660 |  |  |  |  |  |  | $ | 1,161,231 |
Issuance of common stock |  | 45,678 |  |  | — |  |  | 484 |  |  |  |  | — |  |  | — |  |  |  |  |  |  | 484 |
Shares held for tax withholdings |  | (375) |  |  | — |  |  | (72) |  |  |  |  | — |  |  | — |  |  |  |  |  |  | (72) |
Stock-based compensation |  | — |  |  | — |  |  | 9,982 |  |  |  |  | — |  |  | — |  |  |  |  |  |  | 9,982 |
Repurchase of common stock(1) |  | (517,763) |  |  | (1) |  |  | (11,781) |  |  |  |  | — |  |  | (89,175) |  |  |  |  |  |  | (100,957) |
Other comprehensive income |  | — |  |  | — |  |  | — |  |  |  |  | 4,085 |  |  | — |  |  |  |  |  |  | 4,085 |
Net income |  | — |  |  | — |  |  | — |  |  |  |  | — |  |  | 29,527 |  |  |  |  |  |  | 29,527 |
Balance at September 30, 2024 |  | 38,363,321 |  |  | $ | 38 |  |  | $ | 1,079,193 |  |  |  |  | $ | (963) |  |  | $ | 26,012 |  |  |  |  |  |  | $ | 1,104,280 |

(1) Refer to Note “10. Share Repurchase Program” for more information on the repurchase of common stock during the quarter ended September 30, 2024.

See accompanying notes to the unaudited condensed consolidated financial statements
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Table of Contents
Penumbra, Inc.
Condensed Consolidated Statements of Cash Flows
(unaudited)
(in thousands)

|  | Nine Months Ended September 30,
|  | 2025 |  | 2024
CASH FLOWS FROM OPERATING ACTIVITIES: |  |  |  |
Net income (loss) |  | $ | 130,344 |  |  | $ | (19,671) |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: |  |  |  |
Depreciation and amortization |  | 13,010 |  |  | 19,314 |
Stock-based compensation |  | 43,951 |  |  | 34,069 |
Impairment charge |  | — |  |  | 76,945 |
Inventory write-downs |  | 4,233 |  |  | 40,946 |
Deferred taxes |  | 5,974 |  |  | (20,939) |
Other |  | 946 |  |  | 1,404 |
Changes in operating assets and liabilities: |  |  |  |
Accounts receivable |  | (12,690) |  |  | 23,365 |
Inventories |  | (25,852) |  |  | (45,992) |
Prepaid expenses and other current and non-current assets |  | (17,100) |  |  | 1,733 |
Accounts payable |  | (1,471) |  |  | 6,035 |
Accrued expenses and other non-current liabilities |  | 10,834 |  |  | 164 |
Net cash provided by operating activities |  | 152,179 |  |  | 117,373 |
CASH FLOWS FROM INVESTING ACTIVITIES: |  |  |  |
Purchases of non-marketable investments |  | — |  |  | (10,000) |
Purchases of marketable investments |  | (146,648) |  |  | (13,026) |
Proceeds from maturities of marketable investments |  | 13,000 |  |  | 125,816 |
Purchases of property and equipment |  | (45,295) |  |  | (15,811) |
Other |  | — |  |  | 1,600 |
Net cash (used in) provided by investing activities |  | (178,943) |  |  | 88,579 |
CASH FLOWS FROM FINANCING ACTIVITIES: |  |  |  |
Proceeds from exercises of stock options |  | 15,378 |  |  | 783 |
Proceeds from issuance of stock under employee stock purchase plan |  | 8,866 |  |  | 8,861 |
Payment of employee taxes related to vested stock |  | (597) |  |  | (582) |
Payments of finance lease obligations |  | (1,916) |  |  | (1,687) |
Repurchase of common stock |  | — |  |  | (100,388) |
Other |  | (256) |  |  | (61) |
Net cash provided by (used in) financing activities |  | 21,475 |  |  | (93,074) |
Effect of foreign exchange rate changes on cash and cash equivalents |  | 1,914 |  |  | 112 |
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS |  | (3,375) |  |  | 112,990 |
CASH AND CASH EQUIVALENTS—Beginning of period |  | 324,404 |  |  | 167,486 |
CASH AND CASH EQUIVALENTS—End of period |  | $ | 321,029 |  |  | $ | 280,476 |
NONCASH INVESTING AND FINANCING ACTIVITIES: |  |  |  |
Right-of-use assets obtained in exchange for operating lease obligations |  | $ | 2,959 |  |  | $ | 1,941 |
Right-of-use assets obtained in exchange for finance lease obligations |  | $ | 1,467 |  |  | $ | 437 |
Purchase of property and equipment funded through accounts payable and accrued liabilities |  | $ | 1,546 |  |  | $ | 1,831 |
Excise tax accrued on repurchase of common stock |  | $ | — |  |  | $ | 566 |
SUPPLEMENTAL CASH FLOW INFORMATION: |  |  |  |
Cash paid for amounts included in the measurement of operating lease liabilities |  | $ | 16,703 |  |  | $ | 16,433 |
Cash paid for income taxes |  | $ | 14,119 |  |  | $ | 14,367 |

See accompanying notes to the unaudited condensed consolidated financial statements
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Table of Contents
Penumbra, Inc.
Notes to Condensed Consolidated Financial Statements
1. Organization and Description of Business
Penumbra, Inc. (the “Company”), the world’s leading thrombectomy company, is focused on developing the most innovative technologies for challenging medical conditions such as ischemic stroke, venous thromboembolism such as pulmonary embolism, and acute limb ischemia. The Company’s broad portfolio, which includes computer assisted vacuum thrombectomy (CAVT), centers on removing blood clots from head-to-toe with speed, safety and simplicity. The Company focuses on developing, manufacturing and marketing novel products for use by specialist physicians and other healthcare providers to drive improved clinical and health outcomes.
2. Summary of Significant Accounting Policies
Basis of Presentation and Consolidation
The accompanying condensed consolidated balance sheet as of September 30, 2025, the condensed consolidated statements of operations, the condensed consolidated statements of comprehensive income (loss), and the condensed consolidated statements of stockholders’ equity for the three and nine months ended September 30, 2025 and 2024, and the condensed consolidated statements of cash flows for the nine months ended September 30, 2025 and 2024 are unaudited. The unaudited condensed consolidated financial statements included herein have been prepared by the Company in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and the applicable rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”) for interim financial information. Accordingly, they do not include all of the information and notes required by U.S. GAAP for complete financial statements. The condensed consolidated balance sheet data as of December 31, 2024 was derived from the audited financial statements as of that date.
The unaudited condensed consolidated financial statements have been prepared on the same basis as the audited consolidated financial statements and, in the opinion of management, reflect all adjustments of a normal recurring nature considered necessary to state fairly the Company’s financial position as of September 30, 2025, the results of its operations for the three and nine months ended September 30, 2025 and 2024, the changes in its comprehensive income (loss) and stockholders’ equity for the three and nine months ended September 30, 2025 and 2024, and its cash flows for the nine months ended September 30, 2025 and 2024. The results for the three and nine months ended September 30, 2025 are not necessarily indicative of the results that may be expected for the year ending December 31, 2025 or for any other future annual or interim period.
The information included in this Quarterly Report on Form 10-Q should be read in conjunction with the audited consolidated financial statements and notes thereto for the fiscal year ended December 31, 2024, included in the Company’s Annual Report on Form 10-K as filed with the SEC on February 18, 2025. There have been no changes to the Company’s significant accounting policies during the nine months ended September 30, 2025, as compared to the significant accounting policies described in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2024.
The condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.
Use of Estimates
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities and equity accounts; disclosure of contingent assets and liabilities at the date of the financial statements; and the reported amounts of revenues and expenses during the reporting period. On an ongoing basis, the Company evaluates its estimates, including those related to marketable investments, non-marketable investments, allowances for credit losses, the amount of variable consideration included in the transaction price, warranty reserve, valuation of inventories, useful lives of property and equipment, intangibles, operating and financing lease right-of-use (“ROU”) assets and liabilities, income taxes, the fair value of long-lived assets tested for impairment, potential liabilities related to pending claims and litigation, and other contingencies, including the probability of achieving performance targets associated with equity awards with performance conditions, among others. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other data. Actual results could differ from those estimates.
Segments
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Table of Contents
Penumbra, Inc.
Notes to Condensed Consolidated Financial Statements
The Company determined its operating segment on the same basis that it uses to evaluate its performance internally. The Company has one business activity: the design, development, manufacturing and marketing of innovative medical products, and operates as one operating segment. The Company’s chief operating decision-maker, its Chief Executive Officer, reviews its consolidated operating results for the purpose of allocating resources and evaluating financial performance. Refer to Note “15. Segment Reporting” and Note “16. Revenues” for the Company’s segment reporting and entity-wide disclosures, respectively.
Recently Issued Accounting Standards
In December 2023, the FASB issued Accounting Standards Update (“ASU”) No. 2023-09, Income Taxes— Improvements to Income Tax Disclosures. It requires the disclosure of additional information, including specified categories and disaggregation of information in the rate reconciliation and income taxes paid. The guidance is effective for annual periods beginning after December 15, 2024. The Company is evaluating the impact on its disclosures within the consolidated financial statements and does not elect to early adopt as of September 30, 2025.
In November 2024, the FASB issued ASU No. 2024-03 Income Statement — Reporting Comprehensive Income — Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. The standard enhances disclosures by requiring disaggregated disclosures of an entity’s income statement expense captions. Public business entities are required to disaggregate expense captions into specified categories within the footnotes to the financial statements. The amendments in ASU 2024-04 are effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. The standard is required to be applied on a prospective basis, with the option for retrospective application. Early adoption is permitted. The Company is evaluating the impact the new guidance will have on the disclosures within its consolidated financial statements and does not elect to early adopt as of September 30, 2025.
In September 2025, the FASB issued ASU No. 2025-06 Intangibles — Goodwill and Other — Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software. The standard removes references to software development project stages and requires that capitalization of software costs begin once management has authorized and committed to funding the software project and it is probable that the project will be completed and the software will be used to perform the function intended. Entities are required to consider whether there is significant uncertainty associated with a project when evaluating whether it is probable the project will be completed. The guidance is effective for annual reporting periods beginning after December 15, 2027, and interim reporting periods within those annual reporting periods. Early adoption is permitted. Entities are permitted to apply the new guidance using a prospective, retrospective or modified transition approach. The Company does not expect that adoption will have a material impact on its consolidated financial statements.
3. Investments and Fair Value of Financial Instruments
Marketable and Non-Marketable Investments
The Company’s marketable and non-marketable investments have been classified and accounted for as available-for-sale. The Company’s marketable and non-marketable investments as of September 30, 2025 and December 31, 2024 were as follows (in thousands):
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Table of Contents
Penumbra, Inc.
Notes to Condensed Consolidated Financial Statements

|  | September 30, 2025
|  |  |  | Securities with net gains or losses in accumulated other comprehensive income (loss) |  |  |  |
|  | Amortized Cost |  | Gross Unrealized Gains |  | Gross Unrealized Losses |  | Allowance for Credit Loss |  | Fair Value
Marketable investments: |  |  |  |  |  |  |  |  |  |
Commercial paper |  | $ | 23,427 |  |  | $ | — |  |  | $ | (6) |  |  | $ | — |  |  | $ | 23,421 |
Certificate of Deposit |  | 1,002 |  |  | — |  |  | (1) |  |  | — |  |  | 1,001 |
U.S. treasury |  | 2,802 |  |  | — |  |  | (2) |  |  | — |  |  | 2,800 |
Corporate bonds |  | 122,239 |  |  | 1 |  |  | (195) |  |  | — |  |  | 122,045 |
Total |  | 149,470 |  |  | 1 |  |  | (204) |  |  | — |  |  | 149,267 |
Non-marketable investments: |  |  |  |  |  |  |  |  |  |
Non-marketable debt securities |  | 10,000 |  |  | 2,850 |  |  | — |  |  | — |  |  | 12,850 |
Total |  | 10,000 |  |  | 2,850 |  |  | — |  |  | — |  |  | 12,850 |
Total |  | $ | 159,470 |  |  | $ | 2,851 |  |  | $ | (204) |  |  | $ | — |  |  | $ | 162,117 |

|  | December 31, 2024
|  |  |  | Securities with net gains or losses in accumulated other comprehensive income (loss) |  |  |  |
|  | Amortized Cost |  | Gross Unrealized Gains |  | Gross Unrealized Losses |  | Allowance for Credit Loss |  | Fair Value
Marketable investments: |  |  |  |  |  |  |  |  |  |
U.S. treasury |  | $ | 15,744 |  |  | $ | 3 |  |  | $ | (20) |  |  | $ | — |  |  | $ | 15,727 |
Total |  | 15,744 |  |  | 3 |  |  | (20) |  |  | — |  |  | 15,727 |
Non-marketable investment: |  |  |  |  |  |  |  |  |  |
Non-marketable debt securities |  | 10,000 |  |  | 2,850 |  |  | — |  |  | — |  |  | 12,850 |
Total |  | 10,000 |  |  | 2,850 |  |  | — |  |  | — |  |  | 12,850 |
Total |  | $ | 25,744 |  |  | $ | 2,853 |  |  | $ | (20) |  |  | $ | — |  |  | $ | 28,577 |

As of September 30, 2025, the total amortized cost basis of the Company’s available-for-sale debt securities, excluding non-marketable debt securities, in an unrealized loss position exceeded its fair value by $0.2 million. The Company reviewed its available-for-sale securities in an unrealized loss position and concluded that the decline in fair value was not related to credit losses and is recoverable. As of September 30, 2025, the Company’s non-marketable available-for sale debt securities were not in an unrealized loss position. During the three and nine months ended September 30, 2025, no allowance for credit losses was recorded and instead the unrealized losses are reported as a component of accumulated other comprehensive income (loss).
The following tables present the gross unrealized losses and the fair value for those marketable investments that were in an unrealized loss position for less than and more than twelve months as of September 30, 2025 and December 31, 2024 (in thousands):
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Penumbra, Inc.
Notes to Condensed Consolidated Financial Statements

|  | September 30, 2025
|  | Less than 12 months |  | More than 12 months |  | Total
|  | Fair Value |  | Gross Unrealized Losses |  | Fair Value |  | Gross Unrealized Losses |  | Fair Value |  | Gross Unrealized Losses
Marketable investments: |  |  |  |  |  |  |  |  |  |  |  |
Commercial paper |  | $ | 20,477 |  |  | $ | (6) |  |  | $ | — |  |  | $ | — |  |  | $ | 20,477 |  |  | $ | (6) |
Certificate of Deposit |  | 1,001 |  |  | (1) |  |  | — |  |  | — |  |  | 1,001 |  |  | (1) |
U.S. treasury |  | — |  |  | — |  |  | 2,800 |  |  | (2) |  |  | 2,800 |  |  | (2) |
Corporate bonds |  | 119,033 |  |  | (195) |  |  | — |  |  | — |  |  | 119,033 |  |  | (195) |
Total |  | $ | 140,511 |  |  | $ | (202) |  |  | $ | 2,800 |  |  | $ | (2) |  |  | $ | 143,311 |  |  | $ | (204) |

|  | December 31, 2024
|  | Less than 12 months |  | More than 12 months |  | Total
|  | Fair Value |  | Gross Unrealized Losses |  | Fair Value |  | Gross Unrealized Losses |  | Fair Value |  | Gross Unrealized Losses
Marketable investments: |  |  |  |  |  |  |  |  |  |  |  |
U.S. treasury |  | $ | 2,787 |  |  | $ | (19) |  |  | $ | 2,987 |  |  | $ | (1) |  |  | $ | 5,774 |  |  | $ | (20) |
Total |  | $ | 2,787 |  |  | $ | (19) |  |  | $ | 2,987 |  |  | $ | (1) |  |  | $ | 5,774 |  |  | $ | (20) |

The contractual maturities of the Company’s marketable investments as of September 30, 2025 (in thousands):

|  | September 30, 2025 |  |
Marketable investments: |  | Amortized Cost |  | Fair Value |  |
Due in one year |  | $ | 33,763 |  |  | $ | 33,751 |  |  |
Due in one to five years |  | 115,707 |  |  | 115,516 |  |  |
Total |  | $ | 149,470 |  |  | $ | 149,267 |  |  |

Non-Marketable Investments
During the three months ended March 31, 2024, the Company completed a strategic investment in a privately held company. Under the terms of the investment, the Company paid $10.0 million in exchange for shares of Series B preferred stock which represented an immaterial investment in the outstanding equity securities of the privately held company. The Company determined that the investment did not meet the criteria to be accounted for as an equity method investment under ASC 323. The investment was accounted for as an available-for-sale debt security in accordance with ASC 320 as the preferred stock contains a contingent redemption feature at the Company’s option. The investment is included in other non-current assets on the condensed consolidated balance sheet and changes in fair value are recorded in total other comprehensive (loss) income, net of tax.
Fair Value of Financial Instruments
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 accounting guidance establishes a three-tiered hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value:
Level 1 - Quoted prices in active markets for identical assets or liabilities.
Level 2 - Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.
Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.
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Notes to Condensed Consolidated Financial Statements
The categorization of a financial instrument within the valuation hierarchy is based on the lowest level of input that is significant to the fair value measurement.
The Company classifies its cash equivalents and marketable investments within Level 1 and Level 2, as it uses quoted market prices or alternative pricing sources and models utilizing market observable inputs. The Company classifies its non-marketable investments in preferred stock in privately held companies within Level 3, as they do not have a readily determinable fair value.
The Company determined the fair value of its Level 1 financial instruments, which are traded in active markets, using quoted market prices for identical instruments.
Marketable investments classified within Level 2 of the fair value hierarchy are valued based on other observable inputs, including broker or dealer quotations or alternative pricing sources. When quoted prices in active markets for identical assets or liabilities are not available, the Company relies on non-binding quotes from its investment managers, which are based on proprietary valuation models of independent pricing services. These models generally use inputs such as observable market data, quoted market prices for similar instruments, historical pricing trends of a security as relative to its peers. To validate the fair value determination provided by its investment managers, the Company reviews the pricing movement in the context of overall market trends and trading information from its investment managers. In addition, the Company assesses the inputs and methods used in determining the fair value in order to determine the classification of securities in the fair value hierarchy.
Non-marketable investments classified within Level 3 of the fair value hierarchy are valued based on unobservable inputs that are supported by little or no market activity. Current financial information of private companies may not be available and consequently the Company estimates the fair value using inputs that are based on the best available information at the measurement date. Key inputs may include the most recent financial information, financial projections, and financing transactions available for the investee and other quantitative and qualitative factors. Additionally, based on the timing, volume, and other characteristics of the available information, the Company may supplement this information by using one or more valuation techniques, including market and income approaches. There was no change in the fair value of the Company’s non-marketable debt securities as of September 30, 2025 from December 31, 2024.
The Company did not hold any Level 3 marketable investments as of September 30, 2025 or December 31, 2024. During the nine months ended September 30, 2025 and 2024, the Company did not have any transfers between Level 1, Level 2 or Level 3 of the fair value hierarchy for marketable or non-marketable investments. Additionally, the Company did not have any financial assets and liabilities measured at fair value on a non-recurring basis as of September 30, 2025 or December 31, 2024.
The following tables set forth the Company’s financial assets and liabilities measured at fair value by level within the fair value hierarchy as of September 30, 2025 and December 31, 2024 (in thousands):

|  | As of September 30, 2025
|  | Level 1 |  | Level 2 |  | Level 3 |  | Fair Value
Financial Assets |  |  |  |  |  |  |  |
Cash equivalents: |  |  |  |  |  |  |  |
Commercial paper |  | $ | — |  |  | $ | 156,355 |  |  | $ | — |  |  | $ | 156,355 |
Certificate of deposit |  | — |  |  | 27,723 |  |  | — |  |  | 27,723 |
Money market funds |  | 56,972 |  |  | — |  |  | — |  |  | 56,972 |
Marketable investments: |  |  |  |  |  |  |  |
Commercial paper |  | — |  |  | 23,421 |  |  | — |  |  | 23,421 |
Certificate of deposit |  | — |  |  | 1,001 |  |  | — |  |  | 1,001 |
U.S. treasury |  | 2,800 |  |  | — |  |  | — |  |  | 2,800 |
Corporate bonds |  | — |  |  | 122,045 |  |  | — |  |  | 122,045 |
Non-marketable investment: |  |  |  |  |  |  |  |
Non-marketable investment |  | — |  |  | — |  |  | 12,850 |  |  | 12,850 |
Total |  | $ | 59,772 |  |  | $ | 330,545 |  |  | $ | 12,850 |  |  | $ | 403,167 |

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Penumbra, Inc.
Notes to Condensed Consolidated Financial Statements

|  | As of December 31, 2024
|  | Level 1 |  | Level 2 |  | Level 3 |  | Fair Value
Financial Assets |  |  |  |  |  |  |  |
Cash equivalents: |  |  |  |  |  |  |  |
Commercial paper |  | $ | — |  |  | $ | 139,271 |  |  | $ | — |  |  | $ | 139,271 |
Certificate of deposit |  | — |  |  | 15,995 |  |  | — |  |  | 15,995 |
U.S agency securities |  | — |  |  | 3,369 |  |  | — |  |  | 3,369 |
Money market funds |  | 68,133 |  |  | — |  |  | — |  |  | 68,133 |
U.S treasury |  | 23,497 |  |  | — |  |  | — |  |  | 23,497 |
Marketable investments: |  |  |  |  |  |  |  |
U.S. treasury |  | 15,727 |  |  | — |  |  | — |  |  | 15,727 |
Non-marketable investment: |  |  |  |  |  |  |  |
Non-marketable investment |  | — |  |  | — |  |  | 12,850 |  |  | 12,850 |
Total |  | $ | 107,357 |  |  | $ | 158,635 |  |  | $ | 12,850 |  |  | $ | 278,842 |

4. Impairment and Restructuring Costs of Immersive Healthcare Asset Group
The Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. During the three and nine months ended September 30, 2025, there were no events or circumstances that indicated the need to test for impairment and as such there was no impairment charge recorded during the period.
During the three months ended June 30, 2024, the Company made the strategic decision to explore alternative avenues for its immersive healthcare business; as a consequence to this decision, the Company tested the immersive healthcare asset group’s long-lived assets for impairment. Prior to the three months ended June 30, 2024, there were no events or circumstances that indicated the need to test for impairment.
The immersive healthcare asset group included substantially all the assets and liabilities associated with the immersive healthcare business, which primarily consisted of finite-lived developed technology intangible assets, inventory, and property and equipment associated with the developed technology. Prior to performing a recoverability test for the asset group, the Company recorded a $33.4 million charge to cost of revenue in the unaudited condensed consolidated statements of operations during the three months ended June 30, 2024 for the write-down of immersive healthcare inventory to net realizable value.
The Company then performed a recoverability test for the asset group, comparing the carrying amount of the asset group to the sum of its estimated undiscounted future cash flows. The carrying amount of the asset group was determined to be not recoverable, as it exceeded the undiscounted future cash flows.
Accordingly, the Company measured the impairment loss by calculating the excess of the asset group's carrying amount over its fair value. The fair value of the asset group was determined using a discounted cash flow approach, which is considered a Level 3 measurement within the fair value hierarchy and utilized significant Level 3 inputs such as expected future cash flows, including forecasted sales, gross profit and operating expenses, and the use of an appropriate discount rate. As a result of this assessment, the Company recorded a pre-tax impairment charge of $76.9 million during the three months ended June 30, 2024, which was primarily comprised of $58.9 million in finite-lived intangible assets and $18.0 million in property and equipment.
During the third quarter of 2024, the Company made the decision to wind down and exit its immersive healthcare business. As a result, during the three and nine months ended September 30, 2024, the Company incurred $5.0 million in restructuring and related charges for severance and other costs related to the wind down of the immersive healthcare business. These costs were included in research and development and sales, general and administrative within the condensed consolidated statements of operations. During the three and nine months ended September 30, 2025, there were no restructuring and related charges for severance and other costs related to the wind down of the immersive healthcare business and no amounts remained unpaid as of September 30, 2025 and December 31, 2024.
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Notes to Condensed Consolidated Financial Statements
5. Balance Sheet Components
Inventories
The components of inventories consisted of the following (in thousands):

|  | September 30, 2025 |  | December 31, 2024
Raw materials |  | $ | 116,296 |  |  | $ | 133,967 |
Work in process |  | 51,051 |  |  | 35,713 |
Finished goods |  | 265,018 |  |  | 237,057 |
Inventories |  | $ | 432,365 |  |  | $ | 406,737 |

Accrued Liabilities
The components of accrued liabilities consisted of the following (in thousands):

|  | September 30, 2025 |  | December 31, 2024
Payroll and employee-related expenses |  | $ | 79,397 |  |  | $ | 74,201 |
Accrued expenses |  | 15,547 |  |  | 13,982 |
Other accrued liabilities |  | 29,329 |  |  | 24,246 |
Total accrued liabilities |  | $ | 124,273 |  |  | $ | 112,429 |

The following table shows the changes in the Company’s estimated product warranty accrual, included in accrued liabilities, for the nine months ended September 30, 2025 and twelve months ended December 31, 2024, respectively (in thousands):

|  | September 30, 2025 |  | December 31, 2024
Balance at the beginning of the period |  | $ | 2,033 |  |  | $ | 5,755 |
Accruals of warranties issued, net |  | 1,943 |  |  | (1,923) |
Settlements of warranty claims |  | (1,570) |  |  | (1,799) |
Balance at the end of the period |  | $ | 2,406 |  |  | $ | 2,033 |

Acquisition of Property
On February 14, 2025, the Company entered into agreements to acquire property in Costa Rica and construct a manufacturing facility and warehouse, totaling approximately 330,000 square feet, for the production of medical devices. The capital project is expected to cost approximately $35 million. On July 10, 2025, the Company entered into an additional agreement related to certain improvements to the facility which is expected to cost approximately $23 million. During the nine months ended September 30, 2025, the Company made payments of $21.5 million related to the Costa Rica capital project and $6.8 million related to the facility improvements. In accordance with ASC 360, the Company capitalized these payments within property and equipment, net, in the condensed consolidated balance sheets, as they represent costs directly attributable to acquiring the assets and preparing them for their intended use, including the cost of land, work performed and advance payments that are capitalizable as part of the project.
6. Intangible Assets
The following table presents details of the Company’s acquired intangible assets as of September 30, 2025 and December 31, 2024 (in thousands):

As of September 30, 2025 |  |  |  | Gross Carrying Amount |  | Accumulated Amortization |  | Net
Finite-lived intangible assets: |  |  |  |  |  |  |  |
Customer relationships |  |  |  | $ | 6,997 |  |  | $ | (3,848) |  |  | $ | 3,149 |
Trade secrets and processes |  |  |  | 5,256 |  |  | (2,037) |  |  | 3,219 |
Total intangible assets |  |  |  | $ | 12,253 |  |  | $ | (5,885) |  |  | $ | 6,368 |

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Penumbra, Inc.
Notes to Condensed Consolidated Financial Statements
During the nine months ended September 30, 2025, the Company disposed of intangible assets related to its immersive healthcare business that had been previously impaired during the year ended December 31, 2024, resulting in the write-off of developed technology and the corresponding accumulated amortization of $83.3 million.

As of December 31, 2024 |  |  |  | Gross Carrying Amount |  | Accumulated Amortization |  | Net
Finite-lived intangible assets: |  |  |  |  |  |  |  |
Developed technology(1) |  |  |  | $ | 83,289 |  |  | $ | (83,289) |  |  | $ | — |
Customer relationships |  |  |  | 6,192 |  |  | (3,095) |  |  | 3,097 |
Trade secrets and processes |  |  |  | 5,256 |  |  | (1,840) |  |  | 3,416 |
Total intangible assets |  |  |  | $ | 94,737 |  |  | $ | (88,224) |  |  | $ | 6,513 |

(1)During the year ended December 31, 2024, the Company recorded an impairment of developed technology charge of $58.9 million included within accumulated amortization in the table above. Refer to Note “4. Impairment and Restructuring Costs of Immersive Healthcare Asset Group” for more information.
The gross carrying amount and accumulated amortization of the customer relationships are the only intangible assets subject to foreign currency translation effects. The Company’s $5.3 million trade secrets and processes intangible asset was recognized in connection with a royalty buyout agreement in 2018.
The following table presents the amortization recorded related to the Company’s finite-lived intangible assets for the three and nine months ended September 30, 2025 and 2024 (in thousands):

|  | Three Months Ended September 30, |  | Nine Months Ended September 30,
|  | 2025 |  | 2024 |  | 2025 |  | 2024
Cost of revenue |  | $ | 66 |  |  | $ | 66 |  |  | $ | 197 |  |  | $ | 197 |
Sales, general and administrative(1) |  | 116 |  |  | 110 |  |  | 333 |  |  | 5,083 |
Total |  | $ | 182 |  |  | $ | 176 |  |  | $ | 530 |  |  | $ | 5,280 |

(1)This does not include the impairment charge of $58.9 million related to the Company’s immersive healthcare developed technology during the three months ended June 30, 2024. Refer to Note “4. Impairment and Restructuring Costs of Immersive Healthcare Asset Group” for more information.
7. Goodwill
The following table presents the changes in goodwill during the nine months ended September 30, 2025 (in thousands):

|  | Total Company
Balance as of December 31, 2024 |  | $ | 165,826 |
Foreign currency translation |  | 922 |
Balance as of September 30, 2025 |  | $ | 166,748 |

Goodwill Impairment Review
The Company reviews goodwill for impairment annually as of October 31, or more frequently if events or circumstances indicate that an impairment loss may have occurred. The Company operates as one segment, which is the sole reporting unit of the Company, and therefore goodwill is tested for impairment at the consolidated level. Accordingly, when assessing whether an impairment test is required more frequently than on its annual testing date, the Company considers whether events or circumstances have taken place that indicate it is more likely than not that the Company’s enterprise fair value is less than the carrying amount of its one reporting unit, including goodwill. The Company determined there were no impairment indicators as of or during the nine months ended September 30, 2025.
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Penumbra, Inc.
Notes to Condensed Consolidated Financial Statements
8. Commitments and Contingencies
Contingencies
From time to time, the Company may have certain contingent liabilities that arise in the ordinary course of business. The Company accrues a liability for such matters when it is probable that future expenditures will be made and such expenditures can be reasonably estimated.
Indemnification
The Company enters into standard indemnification arrangements in the ordinary course of business. In many such arrangements, the Company agrees to indemnify, hold harmless, and reimburse the indemnified parties for losses suffered or incurred by the indemnified parties in connection with any trade secret, copyright, patent or other intellectual property infringement claim by any third-party with respect to the Company’s technology. The Company also agrees to indemnify many indemnified parties for product defect and similar claims. The term of these indemnification agreements is generally perpetual. The maximum potential amount of future payments the Company could be required to make under these agreements is not determinable because it involves claims that may be made against the Company in the future, but have not yet been made.
The Company has entered into indemnification agreements with its directors and officers that may require the Company to indemnify its directors and officers against liabilities that may arise by reason of their status or service as directors or officers, other than liabilities arising from willful misconduct of the individual.
The Company has not incurred costs to defend lawsuits or settle claims related to these indemnification agreements. No liability associated with any of these indemnification requirements has been recorded to date.
Litigation
From time to time, the Company is subject to certain legal proceedings, as well as demands, claims and threatened litigation that arise in the normal course of our business. The Company reviews the status of each significant matter quarterly and assesses its potential financial exposure. If the potential loss from a claim or legal proceeding is considered probable and the amount can be reasonably estimated, the Company records a liability and an expense for the estimated loss and discloses it in the Company’s financial statements if it is material. If the Company determines that a loss is possible and the range of the loss can be reasonably determined, the Company does not record a liability or an expense but the Company discloses the range of the possible loss. The Company bases its judgments on the best information available at the time. As additional information becomes available, the Company reassesses the potential liability related to its pending claims and litigation and may revise its estimates.
On April 7, 2023, a former contractor who had been retained by the Company through a third party staffing agency filed a putative class action lawsuit as well as a Private Attorney General Act (“PAGA”) representative action complaint against the Company in the Superior Court of the State of California for the County of Alameda, on behalf of the contractor and similarly situated Company contractors and employees in California, alleging various claims pursuant to the California Labor Code related to wages, overtime, meal and rest breaks, reimbursement of business expenses, wage statements and records, and other similar allegations. Additionally, on April 10, 2023, a current employee of the Company filed a PAGA representative action complaint against the Company in the Superior Court of the State of California for the County of Alameda, on behalf of the employee and similarly situated Company employees in California, alleging similar claims. The complaints sought payment of various alleged unpaid wages, penalties, interest and attorneys’ fees in unspecified amounts. Following mediation in April 2024, in May 2024 the parties entered into a formal agreement to settle the claims for an aggregate amount of $4.6 million, subject to approval by the court. The proposed settlement agreement was initially submitted to the court for preliminary approval on June 18, 2024, and the court granted preliminary approval of the settlement agreement on October 14, 2024 and final approval on March 12, 2025. In the prior period, the Company recorded an accrual of $4.6 million in its financial statements for the three months ended March 31, 2024 related to these matters. The Company completed substantially all payments under the settlement agreement during the three months ended June 30, 2025.
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Penumbra, Inc.
Notes to Condensed Consolidated Financial Statements
9. Stockholders’ Equity
Stock-based Compensation
Stock-based compensation expense is associated with restricted stock units (“RSUs”), RSUs with performance conditions (“PSUs”), stock options, and the Company’s Employee Stock Purchase Plan (“ESPP”).
Certain PSUs granted to senior management during the nine months ended September 30, 2025, will vest subject to the achievement of pre-established financial performance targets for the year ending December 31, 2025, and continued service. The fair value of these PSUs is based on the closing price of the Company's common stock on the date of grant. Stock-based compensation costs associated with these PSUs are recognized over the requisite service period of 4.25 years using graded vesting which results in more accelerated expense recognition compared to traditional time-based vesting over the same vesting period. Each reporting period, the Company monitors the probability of achieving the performance targets and may adjust periodic stock-based compensation expense based on its determination of the likelihood of achieving these performance targets and the estimated number of shares of common stock that will vest. The actual number of PSUs awarded is based on the actual performance during the performance period compared to the performance targets.
The following table sets forth the stock-based compensation expense included in the Company’s condensed consolidated statements of operations for the three and nine months ended September 30, 2025 and 2024 (in thousands):

|  | Three Months Ended September 30, |  | Nine Months Ended September 30,
|  | 2025 |  | 2024 |  | 2025 |  | 2024
Cost of revenue |  | $ | 884 |  |  | $ | 1,140 |  |  | $ | 2,548 |  |  | $ | 3,315 |
Research and development |  | 2,601 |  |  | 1,201 |  |  | 7,142 |  |  | 5,115 |
Sales, general and administrative |  | 12,447 |  |  | 8,599 |  |  | 34,261 |  |  | 25,639 |
Total |  | $ | 15,932 |  |  | $ | 10,940 |  |  | $ | 43,951 |  |  | $ | 34,069 |

As of September 30, 2025, total unrecognized compensation cost related to unvested share-based compensation arrangements, excluding PSUs, was $59.1 million, which is expected to be recognized over a weighted average period of 3.0 years.
As of September 30, 2025, total unrecognized compensation cost related to unvested PSU share-based compensation arrangements was $27.6 million, which is expected to be recognized over a weighted average period of 3.1 years.
The total stock-based compensation cost capitalized in inventory was $1.6 million and $1.2 million as of September 30, 2025 and December 31, 2024, respectively.
10. Share Repurchase Program
On August 5, 2024, the Company’s Board of Directors approved a share repurchase authorization in the amount of up to $200.0 million, allowing the Company to repurchase its common stock from time to time at such prices as it deems appropriate through open market purchases, block transactions, privately negotiated transactions, including accelerated share repurchase transactions, or otherwise. The repurchase authorization originally expired on July 31, 2025.
Under this authorization, the Company entered into an accelerated share repurchase agreement (“ASR”) with JPMorgan Chase Bank, National Association (the “Dealer”) to repurchase $100.0 million of the Company’s common stock during the three months ended September 30, 2024. Under the ASR, the Company made an initial payment of $100.0 million to the Dealer and received an initial delivery of 473,962 shares of common stock. The ASR program concluded on September 16, 2024 and the Company received an additional 43,801 shares, which was determined using a price of $193.14 based on the average of the daily volume-weighted average prices of the Company’s common stock during the term of the ASR, less a discount pursuant to the terms of the ASR. The Company received an aggregate of 517,763 shares of common stock for a total cost of $100.4 million, including legal and financial advisor fees of $0.4 million associated with the repurchase. Additionally, the Company recorded an excise tax of $0.6 million, which has been included in retained earnings as part of the cost basis of the stock repurchased, and accrued liabilities in the condensed consolidated balance sheets.
All shares repurchased were immediately retired and reduced the weighted-average number of shares of common stock outstanding used in the computation of basic and diluted earnings per share. The forward contract upon final settlement did not
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Penumbra, Inc.
Notes to Condensed Consolidated Financial Statements
impact weighted average common shares outstanding used in the computation of diluted earnings per share. During the three months ended September 30, 2025, the Company’s Board of Directors extended the repurchase authorization for the remaining $100.0 million to December 31, 2025. As of September 30, 2025, the Company had remaining authority to purchase $100.0 million of its common stock under the share repurchase authorization.
11. Accumulated Other Comprehensive Income (Loss)
Other comprehensive (loss) income consists of two components: unrealized gains or losses on the Company’s available-for-sale marketable investments, non-marketable investments, and gains or losses from foreign currency translation adjustments. Until realized and reported as a component of consolidated net income (loss), these comprehensive income (loss) items accumulate and are included within accumulated other comprehensive income (loss). Unrealized gains and losses on our marketable and non-marketable investments are reclassified from accumulated other comprehensive income (loss) into earnings when realized upon sale, and are determined based on specific identification of securities sold. Gains and losses from the translation of assets and liabilities denominated in non-U.S. dollar functional currencies are included in accumulated other comprehensive loss.
The following table summarizes the changes in the accumulated balances during the period, and includes information regarding the manner in which the reclassifications out of accumulated other comprehensive loss into earnings affect our condensed consolidated statements of comprehensive income (loss) (in thousands):

|  | Three Months Ended September 30, 2025 |  | Three Months Ended September 30, 2024
|  | Marketable Investments |  | Non-Marketable Investments |  | Currency Translation Adjustments |  | Total |  | Marketable Investments |  | Non-Marketable Investments |  | Currency Translation Adjustments |  | Total
Balance, beginning of the period |  | $ | (722) |  |  | $ | 2,850 |  |  | $ | 1,027 |  |  | $ | 3,155 |  |  | $ | (247) |  |  | $ | 96 |  |  | $ | (4,897) |  |  | $ | (5,048) |
Other comprehensive (loss) income before reclassifications: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Unrealized (losses) gains — investments |  | (167) |  |  | — |  |  | — |  |  | (167) |  |  | 234 |  |  | 904 |  |  | — |  |  | 1,138 |
Foreign currency translation gains |  | — |  |  | — |  |  | 86 |  |  | 86 |  |  | — |  |  | — |  |  | 3,185 |  |  | 3,185 |
Income tax effect — benefit (expense) |  | 40 |  |  | — |  |  | — |  |  | 40 |  |  | (238) |  |  | — |  |  | — |  |  | (238) |
Net of tax |  | (127) |  |  | — |  |  | 86 |  |  | (41) |  |  | (4) |  |  | 904 |  |  | 3,185 |  |  | 4,085 |
Net current-year other comprehensive (loss) income |  | (127) |  |  | — |  |  | 86 |  |  | (41) |  |  | (4) |  |  | 904 |  |  | 3,185 |  |  | 4,085 |
Balance, end of the period |  | $ | (849) |  |  | $ | 2,850 |  |  | $ | 1,113 |  |  | $ | 3,114 |  |  | $ | (251) |  |  | $ | 1,000 |  |  | $ | (1,712) |  |  | $ | (963) |

|  | Nine Months Ended September 30, 2025 |  | Nine Months Ended September 30, 2024
|  | Marketable Investments |  | Non-Marketable Investments |  | Currency Translation Adjustments |  | Total |  | Marketable Investments |  | Non-Marketable Investments |  | Currency Translation Adjustments |  | Total
Balance, beginning of the period |  | $ | (701) |  |  | $ | 2,850 |  |  | $ | (7,992) |  |  | $ | (5,843) |  |  | $ | (558) |  |  | $ | — |  |  | $ | (2,593) |  |  | $ | (3,151) |
Other comprehensive income before reclassifications: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Unrealized (losses) gains — investments |  | (195) |  |  | — |  |  | — |  |  | (195) |  |  | 545 |  |  | 1,000 |  |  | — |  |  | 1,545 |
Foreign currency translation gains |  | — |  |  | — |  |  | 9,105 |  |  | 9,105 |  |  | — |  |  | — |  |  | 877 |  |  | 877 |
Income tax effect — benefit (expense) |  | 47 |  |  | — |  |  | — |  |  | 47 |  |  | (238) |  |  | — |  |  | 4 |  |  | (234) |
Net of tax |  | (148) |  |  | — |  |  | 9,105 |  |  | 8,957 |  |  | 307 |  |  | 1,000 |  |  | 881 |  |  | 2,188 |
Net current-year other comprehensive income |  | (148) |  |  | — |  |  | 9,105 |  |  | 8,957 |  |  | 307 |  |  | 1,000 |  |  | 881 |  |  | 2,188 |
Balance, end of the period |  | $ | (849) |  |  | $ | 2,850 |  |  | $ | 1,113 |  |  | $ | 3,114 |  |  | $ | (251) |  |  | $ | 1,000 |  |  | $ | (1,712) |  |  | $ | (963) |

12. Income Taxes
The Company’s income tax expense (benefit), deferred tax assets and liabilities, and reserves for unrecognized tax benefits reflect management’s best assessment of estimated current and future taxes to be paid. The Company is subject to income taxes in both the United States and foreign jurisdictions. Significant judgment and estimates are required in determining the consolidated income tax expense (benefit).
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Penumbra, Inc.
Notes to Condensed Consolidated Financial Statements
During interim periods, the Company generally utilizes the estimated annual effective tax rate (“AETR”) method which involves the use of forecasted information. Under the AETR method, the provision is calculated by applying the estimated AETR for the full fiscal year to “ordinary” income or loss (pretax income or loss excluding unusual or infrequently occurring discrete items) for the reporting period. Jurisdictions with tax assets for which the Company believes a tax benefit cannot be realized are excluded from the computation of its AETR.
During the nine months ended September 30, 2024, the Company recorded a pre-tax impairment charge of $76.9 million for finite-lived intangible assets and property and equipment, and another $33.4 million charge to cost of revenue, related to its immersive healthcare asset group. Refer to Note “4. Impairment and Restructuring Costs of Immersive Healthcare Asset Group” for more information. According to ASC 740-270-30-8 guidance for significant unusual or infrequently occurring items that are separately reported, the $26.5 million income tax benefit as a result of the impairment charge was excluded from the calculation of the Company’s estimated annual effective tax rate.
The Company’s income tax expense was $6.5 million and $11.1 million for the three and nine months ended September 30, 2025, respectively, which was primarily due to tax expenses attributable to its worldwide profits offset by discrete tax benefits from stock-based compensation attributable to the U.S. jurisdiction. For the three months ended September 30, 2024, the Company’s income tax expense was $10.3 million, primarily due to tax expenses attributable to its worldwide profits. For the nine months ended September 30, 2024, the Company’s income tax benefit was $3.8 million, primarily due to a discrete tax benefit from the impairment charge related to the immersive healthcare asset group, partially offset by tax expenses attributable to its worldwide profits.
The Company’s effective tax rate changed from 25.8% for the three months ended September 30, 2024 to 12.4% for the three months ended September 30, 2025. The rate change was primarily due to an increase in excess tax benefits from stock-based compensation attributable to the U.S jurisdiction in 2025. The Company’s effective tax rate changed from 16.2% for the nine months ended September 30, 2024 to 7.9% for the nine months ended September 30, 2025. The rate change was primarily due to a discrete tax benefit from the impairment charge related to the immersive healthcare asset group in 2024 and an increase in excess tax benefits from stock-based compensation attributable to the U.S jurisdiction in 2025.
On July 4, 2025, President Trump signed the One Big Beautiful Bill Act (“OBBBA”) into law, which extends and modifies various domestic and international business tax framework originally enacted under the Tax Cuts and Jobs Act (“TCJA”). The legislation includes multiple effective dates, with certain provisions taking effect in 2025 and others through 2027. During the three and nine months ended September 30, 2025, the enactment of the OBBBA resulted in an immaterial impact to the consolidated financial statements. The Company will continue to assess the full impact of these legislative changes as additional guidance becomes available.
The Company evaluates all available positive and negative evidence, objective and subjective in nature, in each reporting period to determine if sufficient taxable income will be generated to realize the benefits of its DTAs and, if not, a valuation allowance to reduce the DTAs is recorded. As of September 30, 2025, the Company maintains a valuation allowance primarily against its California R&D tax credit DTAs for which the Company does not believe a tax benefit is more likely than not to be realized.
The Company maintains that all foreign earnings, with the exception of a portion of the earnings of its German subsidiary, are permanently reinvested outside the United States and therefore deferred taxes attributable to such earnings are not provided for in the Company’s condensed consolidated financial statements as of September 30, 2025.
13. Net Income (Loss) per Share
The Company computed basic net income (loss) per share based on the weighted average number of shares of common stock outstanding during the period. The Company computed diluted net income (loss) per share based on the weighted average number of shares of common stock outstanding plus potentially dilutive common stock equivalents outstanding during the period. For the purposes of this calculation, stock options, restricted stock units, performance stock units, and stock sold through the ESPP are considered common stock equivalents.
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Penumbra, Inc.
Notes to Condensed Consolidated Financial Statements
A reconciliation of the numerator and denominator used in the calculation of the basic and diluted net income (loss) per share is as follows (in thousands, except share and per share amounts):

|  | Three Months Ended September 30, |  | Nine Months Ended September 30,
|  | 2025 |  | 2024 |  | 2025 |  | 2024
Numerator: |  |  |  |  |  |  |  |
Net income (loss) |  | $ | 45,851 |  |  | $ | 29,527 |  |  | $ | 130,344 |  |  | $ | (19,671) |
Denominator: |  |  |  |  |  |  |  |
Weighted average shares used to compute net income (loss) attributable to common stockholders: |  |  |  |  |  |  |  |
Basic |  | 39,078,378 |  |  | 38,610,805 |  |  | 38,827,038 |  |  | 38,706,809 |
Potential dilutive stock-based options and awards |  | 223,861 |  |  | 567,422 |  |  | 423,642 |  |  | — |
Diluted |  | 39,302,239 |  |  | 39,178,227 |  |  | 39,250,680 |  |  | 38,706,809 |
Net income (loss) per share: |  |  |  |  |  |  |  |
Basic |  | $ | 1.17 |  |  | $ | 0.76 |  |  | $ | 3.36 |  |  | $ | (0.51) |
Diluted |  | $ | 1.17 |  |  | $ | 0.75 |  |  | $ | 3.32 |  |  | $ | (0.51) |

For the three months ended September 30, 2025 and 2024, outstanding stock-based awards of 11 thousand shares and 11 thousand shares, respectively, were excluded from the computation of diluted net income (loss) per share because their effect would have been anti-dilutive in the relevant period. For the nine months ended September 30, 2025 and 2024, outstanding stock-based awards of an immaterial amount and 1,226 thousand shares, respectively, were excluded from the computation of diluted net income (loss) per share because their effect would have been anti-dilutive in the relevant period.
14. Interest and other income (expense), net
The following table shows the components of interest and other income (expense), net for the three and nine months ended September 30, 2025 and 2024 and (in thousands):

|  | Three Months Ended September 30, |  | Nine Months Ended September 30, |  |
|  | 2025 |  | 2024 |  | 2025 |  | 2024 |  |  |  |
Interest income |  | $ | 4,360 |  |  | $ | 3,465 |  |  | $ | 11,734 |  |  | $ | 10,414 |  |  |  |  |
Interest expense |  | (338) |  |  | (336) |  |  | (978) |  |  | (1,081) |  |  |  |  |
Other (expense) income, net(1) |  | (535) |  |  | 1,285 |  |  | 721 |  |  | 693 |  |  |  |  |
Interest and other income, net |  | $ | 3,487 |  |  | $ | 4,414 |  |  | $ | 11,477 |  |  | $ | 10,026 |  |  |  |  |

(1)Consists primarily of the effects of foreign currency gains or losses.
15. Segment Reporting
The Company derives revenue by selling our medical devices to healthcare providers, direct sales organizations, and distributors. The Company operates as one operating and reportable segment and its sole business activity consists of the design, development, manufacturing and marketing of innovative medical products. The Company provides similar innovative medical products to our customers in the regions that the Company operates in and manages its business activities on a consolidated basis.
The accounting policies of the segment are the same as those described in Note “2. Summary of Significant Accounting Policies”. The Company’s CODM uses net income (loss) to measure segment profit or loss and assesses performance against expectations to make resource allocation decisions. Additionally, the CODM reviews and uses functional expenses included in net income (loss) to manage the Company’s operations and assess operating profitability. The Company operates as one operating and reportable segment, and as such the significant segment expenses regularly provided to the CODM are those presented on the consolidated statements of operations. These significant segment expense include cost of revenue, research and development, and sales, general and administrative expenses. Other segment items that are presented on the consolidated statements of operations include interest and other income (expense), net, provision for (benefit from) income taxes, and non-
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Penumbra, Inc.
Notes to Condensed Consolidated Financial Statements
recurring items such as an impairment charge. The Company’s entity-wide disclosures, including the breakout of revenue between products are included in Note “16. Revenues”.
16. Revenues
Revenue Recognition
Revenue is recognized in an amount that reflects the consideration the Company expects to be entitled to in exchange for goods or services. All revenue recognized in the condensed consolidated statements of operations is considered to be revenue from contracts with customers.
The Company’s revenues disaggregated by geography, based on the destination to which the Company ships its products, for the three and nine months ended September 30, 2025 and 2024 was as follows (in thousands):

|  | Three Months Ended September 30, |  | Nine Months Ended September 30,
|  | 2025 |  | 2024 |  | 2025 |  | 2024
United States |  | $ | 275,029 |  |  | $ | 226,326 |  |  | $ | 792,707 |  |  | $ | 654,150 |
International |  | 79,656 |  |  | 74,713 |  |  | 225,573 |  |  | 224,947 |
Total |  | $ | 354,685 |  |  | $ | 301,039 |  |  | $ | 1,018,280 |  |  | $ | 879,097 |

The Company’s revenues disaggregated by product category for the three and nine months ended September 30, 2025 and 2024 was as follows (in thousands):

|  | Three Months Ended September 30, |  | Nine Months Ended September 30,
|  | 2025 |  | 2024 |  | 2025 |  | 2024
Thrombectomy |  | $ | 236,422 |  |  | $ | 204,141 |  |  | $ | 693,222 |  |  | $ | 595,346 |
Embolization and Access |  | 118,263 |  |  | 96,898 |  |  | 325,058 |  |  | 283,751 |
Total |  | $ | 354,685 |  |  | $ | 301,039 |  |  | $ | 1,018,280 |  |  | $ | 879,097 |

Performance Obligations
Delivery of products - The Company’s contracts with customers, other than the China licensing arrangements described below, typically contain a single performance obligation, delivery of the Company’s products. Satisfaction of that performance obligation occurs when control of the promised goods transfers to the customer, which is generally upon shipment or receipt by the customer for non-consignment sale agreements and upon utilization for consignment sale agreements.
Payment terms - The Company’s payment terms vary by the type and location of our customer. The timing between fulfillment of performance obligations and when payment is due is not significant and does not give rise to financing transactions. The Company did not have any contracts with significant financing components as of September 30, 2025 and 2024.
Product returns - The Company may allow customers to return products purchased at the Company’s discretion. The Company estimates the amount of its product sales that may be returned by its customers and records this estimate as a reduction of revenue in the period in which the related product revenue is recognized. The Company currently estimates product return liabilities using its own historic sales information, trends, industry data, and other relevant data points.
Warranties - The Company offers its standard warranty to all customers and it is not available for sale on a standalone basis. The Company’s standard warranty represents its guarantee that its products function as intended, are free from defects, and comply with agreed-upon specifications and quality standards. This assurance does not constitute a service and is not a separate performance obligation.
Transaction Price
Revenue is recorded at the net sales price, which includes estimates of variable consideration such as product returns utilizing historical return rates, rebates, discounts, and other adjustments to net revenue. To the extent the transaction price includes variable consideration, the Company estimates the amount of variable consideration that should be included in the transaction price. When determining if variable consideration should be constrained, management considers whether there are
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Penumbra, Inc.
Notes to Condensed Consolidated Financial Statements
factors that could result in a significant reversal of revenue and the likelihood of a potential reversal. Variable consideration is included in revenue only to the extent that it is probable that a significant reversal of the revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. These estimates are reassessed each reporting period as required. During the three and nine months ended September 30, 2025 and 2024, the Company made no material changes in estimates for variable consideration. When the Company performs shipping and handling activities after control of goods is transferred to the customer, they are considered as fulfillment activities, and costs are accrued for when the related revenue is recognized. Taxes collected from customers relating to product sales and remitted to governmental authorities are excluded from revenues.
Contract assets
The following information summarizes the Company’s contract assets (in thousands):

|  | September 30, 2025 |  | December 31, 2024
Contract assets |  | $ | 18,000 |  |  | $ | 18,000 |

Contract assets for the periods presented primarily represent the difference between the revenue that was recognized based on the relative standalone selling price of the related performance obligations satisfied and the contractual billing terms in the licensing arrangements.
China Distribution and Technology Licensing Agreement
In December 2020, the Company entered into a distribution and technology licensing arrangement with its existing distribution partner in China. In addition to modifying the Company’s standard distribution agreement with its partner in China, the Company agreed to license the technology for certain products to its partner in China to permit the manufacturing and commercialization of such products in China as well as provide certain regulatory support. During the three months ended March 31, 2022, the Company further amended the distribution agreement and entered into an additional license arrangement, pursuant to which the Company agreed to license the technology for additional products to its partner in China on substantially the same terms as the existing license arrangement. Apart from the standard distribution agreement, the Company will receive fixed payments upon transferring its distinct licensed technology and providing related regulatory support. During the three months ended September 30, 2023, the Company entered into an additional licensing arrangement, pursuant to which the Company agreed to license the technology for additional products to its partner in China and will receive fixed payments upon transferring its distinct licensed technology and providing related regulatory support and royalty payments on the down-stream sale of the licensed products. During the three months ended March 31, 2024, the Company entered into an additional licensing agreement, pursuant to which the Company agreed to license the technology for additional products to its partner in China and will receive fixed payments upon transferring its distinct licensed technology and providing related regulatory support. During the three months ended September 30, 2025 and 2024, the Company did not enter into any additional distribution or technology licensing arrangements with its partner in China.
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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the unaudited condensed consolidated financial statements and the related notes thereto included elsewhere in this Quarterly Report on Form 10-Q and the audited consolidated financial statements and notes thereto and management’s discussion and analysis of financial condition and results of operations for the year ended December 31, 2024, included in our Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”) on February 18, 2025.
This Quarterly Report on Form 10-Q contains “forward-looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). In some cases, you can identify these statements by forward-looking words such as “may,” “will,” “expect,” “believe,” “anticipate,” “intend,” “could,” “should,” “estimate,” or “continue,” and similar expressions or variations, but these words are not the exclusive means for identifying such statements. Such forward-looking statements are subject to risks, uncertainties and other factors that could cause actual results and the timing of certain events to differ materially from future results and timing expressed or implied by such forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those identified below, and those discussed in the section titled “Risk Factors” in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2024. The forward-looking statements in this Quarterly Report on Form 10-Q represent our views as of the date of this Quarterly Report on Form 10-Q. Except as may be required by law, we assume no obligation to update these forward-looking statements or the reasons that results could differ from these forward-looking statements. You should, therefore, not rely on these forward-looking statements as representing our views as of any date subsequent to the date of this Quarterly Report on Form 10-Q.
Overview
References herein to “we,” “us,” “our,” the “Company,” and “Penumbra,” refer to Penumbra, Inc. and its consolidated subsidiaries unless expressly indicated or the context requires otherwise.
Penumbra, the world’s leading thrombectomy company, is focused on developing the most innovative technologies for challenging medical conditions such as ischemic stroke, venous thromboembolism such as pulmonary embolism, and acute limb ischemia. Our broad portfolio, which includes computer assisted vacuum thrombectomy (CAVT), centers on removing blood clots from head-to-toe with speed, safety, and simplicity. Our team focuses on developing, manufacturing and marketing novel products for use by specialist physicians and other healthcare providers to drive improved clinical and health outcomes. We believe that the cost-effectiveness of our products is attractive to our customers.
Since our founding in 2004, we have invested heavily in our product development and commercial expansion that has established the foundation of our global organization. We have successfully developed, obtained regulatory clearance or approval for, and introduced products into the thrombectomy market since 2007, access market since 2008, embolization market since 2011, and neurosurgical market since 2014.
We expect to continue to develop and build our portfolio of products, including our thrombectomy, embolization, and access technologies, while iterating on our currently available products. Generally, when we introduce a next generation product or a new product designed to replace a current product, sales of the earlier generation product or the product replaced decline. Our research and development activities are centered around the development of new products and clinical activities designed to support our regulatory submissions and demonstrate the effectiveness of our products.
During the nine months ended September 30, 2024, we made the strategic decision to explore alternative avenues for our immersive healthcare business, and as a result we recorded an impairment charge of $110.3 million related to our immersive healthcare asset group. Refer to Note “4. Impairment and Restructuring Costs of Immersive Healthcare Asset Group” to our condensed consolidated financial statements in Part I, Item 1 of this Quarterly Report on Form 10-Q for more details. During the three months ended September 30, 2024, we permanently ceased sales of our immersive healthcare products and related commercial operations. During the three and nine months ended September 30, 2025, there were no restructuring and related charges for severance and other costs related to the wind down of the immersive healthcare business and no amounts remained unpaid as of September 30, 2025 and December 31, 2024.
To address the challenging and significant clinical needs of our key markets, we have developed products that fall into the following broad product families:
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Our thrombectomy products fall into two broad product families:
•Peripheral thrombectomy - INDIGO System, including Lightning, Bolt and CAT RX, designed for continuous or modulated aspiration, computer assisted vacuum thrombectomy, including aspiration catheters, microprocessor-controlled software algorithms that orchestrate the interaction of our pump and catheters, separators, aspiration pump and accessories, including delivery catheters used in peripheral thrombectomy procedures
•Neuro thrombectomy - Penumbra System, including Penumbra RED, SENDit, JET, ACE, BMX, and MAX catheters and the 3D Revascularization Device, Penumbra ENGINE and other components and accessories
Our embolization and access products fall into four broad product families:
•Peripheral embolization - RUBY Embolization Platform, LANTERN Delivery Microcatheter and the POD System (POD and POD Packing Coil)
•Neuro embolization - Penumbra SMART COIL, Penumbra Coil 400, POD400, PAC400 and SwiftPAC Coil
•Access - delivery catheters, consisting of Neuron, Neuron MAX, BENCHMARK, BMX, DDC, PX SLIM, and MIDWAY
•Neurosurgical - Artemis Neuro Evacuation Device
By pioneering these innovations, we support healthcare providers, hospitals and clinics in more than 100 countries, working to improve patient outcomes and quality of life. In the three months ended September 30, 2025 and 2024, 22.5% and 24.8% of our revenue, respectively, was generated from customers located outside of the United States. In the nine months ended September 30, 2025 and 2024, 22.2% and 25.6% of our revenue, respectively, was generated from customers located outside of the United States. Our sales outside of the United States are denominated principally in the euro, with some sales being denominated in other currencies. As a result, we have foreign exchange exposure but do not currently engage in hedging.
We generated revenue of $354.7 million and $301.0 million for the three months ended September 30, 2025 and 2024, respectively, an increase of $53.6 million, and revenue of $1,018.3 million and $879.1 million for the nine months ended September 30, 2025 and 2024, respectively, an increase of $139.2 million. We generated income from operations of $48.8 million and $35.4 million for the three months ended September 30, 2025 and 2024, respectively, and income from operations of $130.0 million and a loss from operations of $33.5 million for the nine months ended September 30, 2025 and 2024, respectively.
Factors Affecting Our Performance
There are a number of factors that have impacted, and we believe will continue to impact, our results of operations and growth. These factors include:
•The rate at which we grow our salesforce and the speed at which newly hired salespeople become fully effective can impact our revenue growth or our costs incurred in anticipation of such growth.
•Our industry is intensely competitive and, in particular, we compete with a number of large, well-capitalized companies. We must continue to successfully compete in light of our competitors’ existing and future products and their resources to successfully market to the specialist physicians who use our products.
•We must continue to successfully introduce new products that gain acceptance with specialist physicians and other healthcare providers and successfully transition from existing products to new products, ensuring adequate supply. In addition, as we introduce new products and expand our production capacity, we anticipate additional personnel will be hired and trained to build our inventory of components and finished goods in advance of sales, which may cause quarterly fluctuations in our operating results and financial condition.
•Publications of clinical results by us, our competitors and other third parties can have a significant influence on whether, and the degree to which, our products are used by specialist physicians and the procedures and treatments those physicians choose to administer for a given condition.
•The specialist physicians who use our interventional products may not perform procedures during certain times of the year, such as those periods when they are at major medical conferences or are away from their practices for other reasons, the timing of which occurs irregularly during the year and from year to year.
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•Most of our sales outside of the United States are denominated in the local currency of the country in which we sell our products. As a result, our revenue from international sales can be significantly impacted by fluctuations in foreign currency exchange rates.
•The availability and levels of reimbursement within the relevant healthcare payment system for healthcare providers for procedures in which our products are used.
In addition, we have experienced and expect to continue to experience meaningful variability in our quarterly revenue, gross profit and gross margin percentage as a result of a number of factors, including, but not limited to: the number of available selling days, which can be impacted by holidays; the mix of products sold; the geographic mix of where products are sold; the demand for our products and the products of our competitors; the timing of or failure to obtain regulatory approvals or clearances for products; increased competition; the timing of customer orders; inventory or other asset write-offs or write-downs; costs, benefits and timing of new product introductions; costs, benefits and timing of the acquisition and integration of businesses and product lines we may acquire; the availability and cost of components and raw materials; and fluctuations in foreign currency exchange rates. We may experience quarters in which we have significant revenue growth sequentially followed by quarters of moderate or no revenue growth. Additionally, we may experience quarters in which operating expenses, in particular research and development expenses, fluctuate depending on the stage and timing of product development.
Components of Results of Operations
Revenue. We sell our interventional products directly to hospitals and other healthcare providers and through distributors for use in procedures performed by specialist physicians to treat patients in two key markets: thrombectomy and embolization and access. We sell our products through purchase orders, and we do not have long term purchase commitments from our customers. Revenue from product sales is recognized either on the date of shipment or the date of receipt by the customer, but is deferred for certain transactions when control has not yet transferred. With respect to products that we consign to hospitals, which primarily consist of coils, we recognize revenue at the time hospitals utilize products in a procedure. Revenue also includes shipping and handling costs that we charge to customers.
Cost of Revenue. Cost of revenue consists primarily of the cost of raw materials and components, personnel costs, including stock-based compensation, inbound freight charges, receiving costs, inspection and testing costs, warehousing costs, royalty expense, handling costs, which are costs incurred to handle products by a third-party shipper to the customers, and other labor and overhead costs incurred in the manufacturing of products. We manufacture substantially all of our products in our manufacturing facilities in Alameda and Roseville, California.
Operating Expenses
Research and Development (“R&D”). R&D expenses primarily consist of product development, clinical and regulatory expenses, materials, depreciation and other costs associated with the development of our products. R&D expenses also include salaries, benefits and other related costs, including stock-based compensation, for personnel and consultants. We expense R&D costs as they are incurred.
Sales, General and Administrative (“SG&A”). SG&A expenses primarily consist of salaries, benefits and other related costs, including stock-based compensation, for personnel and consultants engaged in sales, marketing, finance, legal, compliance, administrative, facilities and information technology and human resource activities. Our SG&A expenses also include marketing trials, medical education, training, commissions, generally based on sales, to direct sales representatives, amortization of acquired intangible assets and acquisition-related costs.
Income Taxes. We are taxed at the rates applicable within each jurisdiction in which we operate. The composite income tax rate, tax provisions, deferred tax assets (“DTAs”) and deferred tax liabilities will vary according to the jurisdiction in which profits arise. Tax laws are complex and subject to different interpretations by management and the respective governmental taxing authorities, and require us to exercise judgment in determining our income tax provision, our deferred tax assets and deferred tax liabilities and the potential valuation allowance recorded against our net DTAs. Deferred tax assets and liabilities are determined using the enacted tax rates in effect for the years in which those tax assets are expected to be realized. A valuation allowance is established when it is more likely than not that the future realization of all or some of the DTAs will not be achieved.
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Results of Operations
The following table sets forth the components of our condensed consolidated statements of operations in dollars and as a percentage of revenue for the periods presented:

| Three Months Ended September 30, |  | Nine Months Ended September 30,
| 2025 |  | 2024 |  | 2025 |  | 2024
| (in thousands, except for percentages) |  | (in thousands, except for percentages)
Revenue | $ | 354,685 |  |  | 100.0 | % |  | $ | 301,039 |  |  | 100.0 | % |  | $ | 1,018,280 |  |  | 100.0 | % |  | $ | 879,097 |  |  | 100.0 | %
Cost of revenue | 114,269 |  |  | 32.2 |  |  | 100,733 |  |  | 33.5 |  |  | 337,971 |  |  | 33.2 |  |  | 334,823 |  |  | 38.1 |
Gross profit | 240,416 |  |  | 67.8 |  |  | 200,306 |  |  | 66.5 |  |  | 680,309 |  |  | 66.8 |  |  | 544,274 |  |  | 61.9 |
Operating expenses: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Research and development | 22,677 |  |  | 6.4 |  |  | 25,205 |  |  | 8.4 |  |  | 67,972 |  |  | 6.6 |  |  | 74,773 |  |  | 8.5 |
Sales, general and administrative | 168,901 |  |  | 47.6 |  |  | 139,737 |  |  | 46.4 |  |  | 482,321 |  |  | 47.4 |  |  | 426,052 |  |  | 48.5 |
Impairment charge | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 76,945 |  |  | 8.8 |
Total operating expenses | 191,578 |  |  | 54.0 |  |  | 164,942 |  |  | 54.8 |  |  | 550,293 |  |  | 54.0 |  |  | 577,770 |  |  | 65.8 |
Income (loss) from operations | 48,838 |  |  | 13.8 |  |  | 35,364 |  |  | 11.7 |  |  | 130,016 |  |  | 12.8 |  |  | (33,496) |  |  | (3.8) |
Interest and other income, net | 3,487 |  |  | 1.0 |  |  | 4,414 |  |  | 1.5 |  |  | 11,477 |  |  | 1.1 |  |  | 10,026 |  |  | 1.1 |
Income (loss) before income taxes | 52,325 |  |  | 14.8 |  |  | 39,778 |  |  | 13.2 |  |  | 141,493 |  |  | 13.9 |  |  | (23,470) |  |  | (2.7) |
Provision for (benefit from) income taxes | 6,474 |  |  | 1.9 |  |  | 10,251 |  |  | 3.4 |  |  | 11,149 |  |  | 1.1 |  |  | (3,799) |  |  | (0.5) |
Net income (loss) | $ | 45,851 |  |  | 12.9 | % |  | $ | 29,527 |  |  | 9.8 | % |  | $ | 130,344 |  |  | 12.8 | % |  | $ | (19,671) |  |  | (2.2) | %

Three Months Ended September 30, 2025 Compared to the Three Months Ended September 30, 2024
Revenue

| Three Months Ended September 30, |  | Change
| 2025 |  | 2024 |  | $ |  | %
| (in thousands, except for percentages)
Thrombectomy | $ | 236,422 |  |  | $ | 204,141 |  |  | $ | 32,281 |  |  | 15.8 | %
Embolization and Access | 118,263 |  |  | 96,898 |  |  | 21,365 |  |  | 22.0 | %
Total | $ | 354,685 |  |  | $ | 301,039 |  |  | $ | 53,646 |  |  | 17.8 | %

Revenue increased $53.6 million, or 17.8%, to $354.7 million in the three months ended September 30, 2025, from $301.0 million in the three months ended September 30, 2024. Overall revenue growth was primarily due to an increase in sales of existing thrombectomy products and new embolization and access products.
Revenue from our global thrombectomy products increased $32.3 million, or 15.8%, to $236.4 million in the three months ended September 30, 2025, from $204.1 million in the three months ended September 30, 2024. The increase in our global thrombectomy products was primarily attributable to higher sales volume in the United States as a result of further market penetration of our existing products. Sales of our U.S. thrombectomy products increased by 18.5% in the three months ended September 30, 2025. Prices for our thrombectomy products remained substantially unchanged during the period.
Revenue from our global embolization and access products increased $21.4 million, or 22.0%, to $118.3 million in the three months ended September 30, 2025, from $96.9 million in the three months ended September 30, 2024. The increase in our global embolization and access products was primarily attributable to higher sales volume in the United States as a result of sales of new products and further market penetration of our existing products. Sales of our U.S. embolization and access products increased by 29.2% in the three months ended September 30, 2025. Prices for our embolization and access products remained substantially unchanged during the period.
Revenue by Geographic Area
The following table presents revenue by geographic area, based on our customers’ shipping destinations, for the three months ended September 30, 2025 and 2024:
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|  | Three Months Ended September 30, |  | Change
|  | 2025 |  | 2024 |  | $ |  | %
|  | (in thousands, except for percentages)
United States |  | $ | 275,029 |  |  | 77.5 | % |  | $ | 226,326 |  |  | 75.2 | % |  | $ | 48,703 |  |  | 21.5 | %
International |  | 79,656 |  |  | 22.5 | % |  | 74,713 |  |  | 24.8 | % |  | 4,943 |  |  | 6.6 | %
Total |  | $ | 354,685 |  |  | 100.0 | % |  | $ | 301,039 |  |  | 100.0 | % |  | $ | 53,646 |  |  | 17.8 | %

Revenue from sales in international markets increased $4.9 million, or 6.6%, to $79.7 million in the three months ended September 30, 2025, from $74.7 million in the three months ended September 30, 2024. The increase in our international revenue was primarily attributable to growth in our international business, partially offset by a decline in China revenue. Revenue from international sales represented 22.5% and 24.8% of our total revenue for the three months ended September 30, 2025 and 2024, respectively.
Gross Margin

| Three Months Ended September 30, |  | Change
| 2025 |  | 2024 |  | $ |  | %
| (in thousands, except for percentages)
Cost of revenue | $ | 114,269 |  |  | $ | 100,733 |  |  | $ | 13,536 |  |  | 13.4 | %
Gross profit | $ | 240,416 |  |  | $ | 200,306 |  |  | $ | 40,110 |  |  | 20.0 | %
Gross margin % | 67.8 | % |  | 66.5 | % |  |  |  |

Gross margin increased by 1.3 percentage points to 67.8% in the three months ended September 30, 2025, from 66.5% in the three months ended September 30, 2024, primarily driven by favorable product mix across our regions and productivity improvements. Gross margin is impacted by product mix, regional mix, and production initiatives to support demand and create future efficiencies. As such, with favorable product mix, improvement in productivity, and by leveraging our fixed costs on higher volume of new product sales during the year, our gross margin may be positively impacted in the future.
Research and Development (“R&D”)

| Three Months Ended September 30, |  | Change
| 2025 |  | 2024 |  | $ |  | %
| (in thousands, except for percentages)
R&D | $ | 22,677 |  |  | $ | 25,205 |  |  | $ | (2,528) |  |  | (10.0) | %
R&D as a percentage of revenue | 6.4 | % |  | 8.4 | % |  |  |  |

R&D expenses decreased by $2.5 million, or 10.0%, to $22.7 million in the three months ended September 30, 2025, from $25.2 million in the three months ended September 30, 2024. The decrease was primarily due to a $2.6 million decrease in one-time expenses in connection with the wind down of the immersive healthcare business.
We have continued to make investments, and plan to continue to make investments, in the development of our products. As part of our ongoing investment in the development of our products, we may incur additional expenses related to research and development milestones. In addition, we have experienced in the past, and may continue to experience in the future, variability in expenses incurred due to the timing and costs of clinical trials and product development, which may include additional personnel-related expenses in conjunction with the launch of new products.
Sales, General and Administrative (“SG&A”)

| Three Months Ended September 30, |  | Change
| 2025 |  | 2024 |  | $ |  | %
| (in thousands, except for percentages)
SG&A | $ | 168,901 |  |  | $ | 139,737 |  |  | $ | 29,164 |  |  | 20.9 | %
SG&A as a percentage of revenue | 47.6 | % |  | 46.4 | % |  |  |  |

SG&A expenses increased by $29.2 million, or 20.9%, to $168.9 million in the three months ended September 30, 2025, from $139.7 million in the three months ended September 30, 2024. The increase was primarily due to a $23.4 million increase in personnel-related expenses driven by an increase in headcount and related expenses to support our growth and a $2.7 million increase in costs related to marketing events. This was partially offset by a $2.3 million decrease in one-time expenses in connection with the wind down of the immersive healthcare business.
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As we continue to invest in our growth, we have expanded and may continue to expand our sales, marketing, and general and administrative teams through the hiring of additional employees in critical roles that support our strategic initiatives. In addition, we have experienced in the past, and may continue to experience in the future, variability in expenses incurred due to the timing and costs of investments to support the business.
Provision for income taxes

| Three Months Ended September 30, |  | Change
| 2025 |  | 2024 |  | $ |  | %
| (in thousands, except for percentages)
Provision for income taxes | $ | 6,474 |  |  | $ | 10,251 |  |  | $ | (3,777) |  |  | (36.8) | %
Effective tax rate | 12.4 | % |  | 25.8 | % |  |  |  |

Our income tax expense for the three months ended September 30, 2025 was $6.5 million or 12.4% of income before taxes, compared to $10.3 million or 25.8% of income before taxes for the three months ended September 30, 2024. The change in effective tax rate was primarily due to an increase in excess tax benefits from stock-based compensation attributable to our U.S. jurisdiction in 2025.
Prospectively, our effective tax rate will likely be driven by (1) permanent differences in taxable income for tax and financial reporting purposes, (2) tax expense or benefit attributable to our worldwide financial result, and (3) discrete tax adjustments such as excess tax benefits or deficiencies related to stock-based compensation. Our income tax provision is subject to volatility as the amount of excess tax benefits or deficiencies can fluctuate from period to period based on the price of our stock, the volume of share-based grants settled or vested, and the fair value assigned to equity awards under U.S. GAAP. In addition, changes in tax law or our interpretation thereof, and changes to our valuation allowance could result in fluctuations in our effective tax rate.
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Nine Months Ended September 30, 2025 Compared to the Nine Months Ended September 30, 2024
Revenue

| Nine Months Ended September 30, |  | Change
| 2025 |  | 2024 |  | $ |  | %
| (in thousands, except for percentages)
Thrombectomy | $ | 693,222 |  |  | $ | 595,346 |  |  | $ | 97,876 |  |  | 16.4 | %
Embolization and Access | 325,058 |  |  | 283,751 |  |  | 41,307 |  |  | 14.6 | %
Total | $ | 1,018,280 |  |  | $ | 879,097 |  |  | $ | 139,183 |  |  | 15.8 | %

Revenue increased $139.2 million, or 15.8%, to $1,018.3 million in the nine months ended September 30, 2025, from $879.1 million in the nine months ended September 30, 2024. Overall revenue growth was primarily due to an increase in sales of our new and existing thrombectomy and embolization and access products.
Revenue from our global thrombectomy products increased $97.9 million, or 16.4%, to $693.2 million in the nine months ended September 30, 2025, from $595.3 million in the nine months ended September 30, 2024. The increase in our global thrombectomy products was primarily attributable to higher sales volume in the United States as a result of sales of new products and further market penetration of our existing products. Sales of our U.S. thrombectomy products increased by 22.0% in the nine months ended September 30, 2025. Prices for our thrombectomy products remained substantially unchanged during the period.
Revenue from our global embolization and access products increased $41.3 million, or 14.6%, to $325.1 million in the nine months ended September 30, 2025, from $283.8 million in the nine months ended September 30, 2024. The increase in our global embolization and access products was primarily attributable to higher sales volume in the United States as a result of sales of new products and further market penetration of our existing products. Sales of our U.S. embolization and access products increased by 19.2% in the nine months ended September 30, 2025. Prices for our embolization and access products remained substantially unchanged during the period.
Revenue by Geographic Area
The following table presents revenue by geographic area, based on our customer’s shipping destination, for the nine months ended September 30, 2025 and 2024:

|  | Nine Months Ended September 30, |  | Change
|  | 2025 |  | 2024 |  | $ |  | %
|  | (in thousands, except for percentages)
United States |  | $ | 792,707 |  |  | 77.8 | % |  | $ | 654,150 |  |  | 74.4 | % |  | $ | 138,557 |  |  | 21.2 | %
International |  | 225,573 |  |  | 22.2 | % |  | 224,947 |  |  | 25.6 | % |  | 626 |  |  | 0.3 | %
Total |  | $ | 1,018,280 |  |  | 100.0 | % |  | $ | 879,097 |  |  | 100.0 | % |  | $ | 139,183 |  |  | 15.8 | %

Revenue from sales in international markets increased $0.6 million, or 0.3%, to $225.6 million in the nine months ended September 30, 2025, from $224.9 million in the nine months ended September 30, 2024. The increase in our international revenue was primarily attributable to growth in our international business, partially offset by a decline in China revenue. Revenue from international sales represented 22.2% and 25.6% of our total revenue for the nine months ended September 30, 2025 and 2024, respectively.
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Gross Margin

| Nine Months Ended September 30, |  | Change
| 2025 |  | 2024 |  | $ |  | %
| (in thousands, except for percentages)
Cost of revenue | $ | 337,971 |  |  | $ | 334,823 |  |  | $ | 3,148 |  |  | 0.9 | %
Gross profit | $ | 680,309 |  |  | $ | 544,274 |  |  | $ | 136,035 |  |  | 25.0 | %
Gross margin % | 66.8 | % |  | 61.9 | % |  |  |  |

Gross margin increased by 4.9 percentage points to 66.8% in the nine months ended September 30, 2025, from 61.9% in the nine months ended September 30, 2024, which included a one-time $33.4 million inventory impairment charge to cost of revenue in connection with the impairment of our immersive healthcare asset group. The impact of the one-time $33.4 million charge decreased our gross margin by 3.8 percentage points in the nine months ended September 30, 2024. Refer to Note “4. Impairment and Restructuring Costs of Immersive Healthcare Asset Group” to our condensed consolidated financial statements in Part I, Item 1 of this Quarterly Report on Form 10-Q for more details. Excluding the one-time inventory impairment charge, the improvement in gross margin was primarily driven by favorable product mix across our regions and productivity improvements. Gross margin is impacted by product mix, regional mix, and production initiatives to support demand and create future efficiencies. As such, with favorable product mix, improvement in productivity, and by leveraging our fixed costs on higher volume of new product sales during the year, our gross margin may be positively impacted in the future.
Research and Development (“R&D”)

| Nine Months Ended September 30, |  | Change
| 2025 |  | 2024 |  | $ |  | %
| (in thousands, except for percentages)
R&D | $ | 67,972 |  |  | $ | 74,773 |  |  | $ | (6,801) |  |  | (9.1) | %
R&D as a percentage of revenue | 6.6 | % |  | 8.5 | % |  |  |  |

R&D expenses decreased by $6.8 million, or 9.1%, to $68.0 million in the nine months ended September 30, 2025, from $74.8 million in the nine months ended September 30, 2024. The decrease was primarily due to a $3.4 million decrease in personnel-related expenses which reflects lower costs following the exit from our immersive healthcare business in the third quarter of 2024, partially offset by additional investment to support our growth, and a $2.6 million decrease in one-time expenses in connection with the wind down of the immersive healthcare business.
We have continued to make investments, and plan to continue to make investments, in the development of our products. As part of our ongoing investment in the development of our products, we may incur additional expenses related to research and development milestones. In addition, we have experienced in the past, and may continue to experience in the future, variability in expenses incurred due to the timing and costs of clinical trials and product development, which may include additional personnel-related expenses in conjunction with the launch of new products.
Sales, General and Administrative (SG&A)

| Nine Months Ended September 30, |  | Change
| 2025 |  | 2024 |  | $ |  | %
| (in thousands, except for percentages)
SG&A | $ | 482,321 |  |  | $ | 426,052 |  |  | $ | 56,269 |  |  | 13.2 | %
SG&A as a percentage of revenue | 47.4 | % |  | 48.5 | % |  |  |  |

SG&A expenses increased by $56.3 million, or 13.2%, to $482.3 million in the nine months ended September 30, 2025, from $426.1 million in the nine months ended September 30, 2024. The increase was primarily due to a $51.4 million increase in personnel-related expenses driven by an increase in headcount and related expenses to support our growth, a $6.0 million increase in costs related to marketing events, and a $5.6 million increase in travel-related expenses. This was partially offset by a $4.8 million decrease in non-recurring litigation related expenses, including settlement costs and legal fees, associated with wage and hour complaints filed against the Company in 2023 and a $4.7 million decrease in amortization expense of finite lived intangible assets acquired in connection with the Sixense acquisition due to the impairment of long-lived assets associated with the immersive healthcare business in the second quarter of 2024.
As we continue to invest in our growth, we have expanded and may continue to expand our sales, marketing, and general and administrative teams through the hiring of additional employees in critical roles that support our strategic initiatives. In
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addition, we have experienced in the past, and may continue to experience in the future, variability in expenses incurred due to the timing and costs of investments to support the business.
Impairment Charge

| Nine Months Ended September 30, |  | Change
| 2025 |  | 2024 |  | $ |  | %
| (in thousands, except for percentages)
Impairment Charge | $ | — |  |  | $ | 76,945 |  |  | $ | (76,945) |  |  | 100.0 | %
Impairment Charge as a percentage of revenue | — | % |  | 8.8 | % |  |  |  |

There were no impairment charges during the nine months ended September 30, 2025. During the nine months ended September 30, 2024, we recorded a $76.9 million impairment charge which was primarily comprised of $58.9 million in finite-lived intangible assets and $18.0 million in property and equipment, respectively, in connection with the impairment of our immersive healthcare asset group. Refer to Note “4. Impairment and Restructuring Costs of Immersive Healthcare Asset Group” to our condensed consolidated financial statements in Part I, Item 1 of this Quarterly Report on Form 10-Q for more information.
Provision for (benefit from) income taxes

| Nine Months Ended September 30, |  | Change
| 2025 |  | 2024 |  | $ |  | %
| (in thousands, except for percentages)
Provision for (benefit from) income taxes | $ | 11,149 |  |  | $ | (3,799) |  |  | $ | 14,948 |  |  | (393.5) | %
Effective tax rate | 7.9 | % |  | 16.2 | % |  |  |  |

Our income tax expense for the nine months ended September 30, 2025 was $11.1 million or 7.9% of income before taxes, compared to income tax benefit of $3.8 million or 16.2% of income before taxes for the nine months ended September 30, 2024. The change in effective tax rate was primarily due to a discrete tax benefit from the impairment charge related to the immersive healthcare asset group in 2024 and an increase in excess tax benefits from stock-based compensation attributable to our U.S. jurisdiction in 2025.
Prospectively, our effective tax rate will likely be driven by (1) permanent differences in taxable income for tax and financial reporting purposes, (2) tax expense or benefit attributable to our worldwide financial result, and (3) discrete tax adjustments such as excess tax benefits or deficiencies related to stock-based compensation. Our income tax provision is subject to volatility as the amount of excess tax benefits or deficiencies can fluctuate from period to period based on the price of our stock, the volume of share-based grants settled or vested, and the fair value assigned to equity awards under U.S. GAAP. In addition, changes in tax law or our interpretation thereof, and changes to our valuation allowance could result in fluctuations in our effective tax rate.
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Liquidity and Capital Resources
As of September 30, 2025, we had $971.9 million in working capital, which included $321.0 million in cash and cash equivalents and $149.3 million in marketable investments. As of September 30, 2025, we held approximately 9.2% of our cash and cash equivalents in foreign entities.
We believe our current sources of liquidity will be sufficient to meet our liquidity requirements for at least the next 12 months. Our principal liquidity requirements are to fund our operations, expand manufacturing operations which includes, but is not limited to, maintaining sufficient levels of inventory to meet the anticipated demand of our customers, fund research and development activities and fund our capital expenditures. We may also lease or purchase additional facilities to facilitate our growth. For example, during the nine months ended September 30, 2025, the Company entered into agreements to acquire property in Costa Rica and construct a manufacturing facility and warehouse for the production of medical devices. See Note “5. Balance Sheet Components” to the condensed consolidated financial statements in Part I, Item 1 of this Quarterly Report on Form 10-Q for more information. We expect to continue to make investments as we launch new products, expand our manufacturing operations and information technology infrastructures and further expand into international markets. We may, however, require or elect to secure additional financing as we continue to execute our business strategy. If we require or elect to raise additional funds, we may do so through equity or debt financing, which may not be available on favorable terms, could result in dilution to our stockholders, and could require us to agree to covenants that limit our operating flexibility.
Share Repurchase Program
On August 5, 2024, the Company’s Board of Directors approved a share repurchase authorization in the amount of up to $200.0 million, allowing the Company to repurchase its common stock from time to time at such prices as it deems appropriate through open market purchases, block transactions, privately negotiated transactions, including accelerated share repurchase transactions, or otherwise. The repurchase authorization originally expired on July 31, 2025. Under this authorization, the Company entered into an accelerated share repurchase agreement (“ASR”) with JPMorgan Chase Bank, National Association to repurchase $100.0 million of the Company’s common stock during the three months ended September 30, 2024. During the three months ended September 30, 2024, the Company repurchased an aggregate of 517,763 shares under the ASR at an aggregate cost of $100.4 million, including legal and financial advisor fees of $0.4 million associated with the repurchase. During the three months ended September 30, 2025, the Company’s Board of Directors extended the repurchase authorization for the remaining $100.0 million to December 31, 2025. As of September 30, 2025, the Company had remaining authority to purchase $100.0 million of its common stock under the share repurchase authorization.
The following table summarizes our cash and cash equivalents, marketable investments and selected working capital data as of September 30, 2025 and December 31, 2024:

| September 30, 2025 |  | December 31, 2024
| (in thousands)
Cash and cash equivalents | $ | 321,029 |  |  | $ | 324,404 |
Marketable investments | 149,267 |  |  | 15,727 |
Accounts receivable, net | 183,430 |  |  | 167,668 |
Accounts payable | 29,821 |  |  | 31,326 |
Accrued liabilities | 124,273 |  |  | 112,429 |
Working capital(1) | 971,917 |  |  | 792,780 |

(1)Working capital consists of total current assets less total current liabilities.
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The following table sets forth, for the periods indicated, our beginning balance of cash and cash equivalents, net cash flows provided by (used in) operating, investing and financing activities and our ending balance of cash and cash equivalents:

| Nine Months Ended September 30,
| 2025 |  | 2024
| (in thousands)
Cash and cash equivalents at beginning of period | $ | 324,404 |  |  | $ | 167,486 |
Net cash provided by operating activities | 152,179 |  |  | 117,373 |
Net cash (used in) provided by investing activities | (178,943) |  |  | 88,579 |
Net cash provided by (used in) financing activities | 21,475 |  |  | (93,074) |
Effect of foreign exchange rate changes on cash and cash equivalents | 1,914 |  |  | 112 |
Cash and cash equivalents and at end of period | 321,029 |  |  | 280,476 |

Net Cash Provided By Operating Activities
Net cash provided by operating activities consists primarily of net income adjusted for certain non-cash items (including depreciation and amortization, stock-based compensation expense, impairment charge, inventory write-offs and write-downs, changes in deferred tax balances, and the effect of changes in working capital and other activities).
Net cash provided by operating activities was $152.2 million during the nine months ended September 30, 2025 and consisted of consolidated net income of $130.3 million and non-cash items of $68.1 million, partially offset by net changes in operating assets and liabilities of $46.3 million. The change in operating assets and liabilities primarily relates to an increase in inventories of $25.9 million to support our growth, an increase in prepaid expenses and other current and non-current assets of $17.1 million, an increase in accounts receivables of $12.7 million, and a decrease in accounts payable of $1.5 million. This was partially offset by an increase in accrued expenses and other non-current liabilities of $10.8 million.
Net cash provided by operating activities was $117.4 million during the nine months ended September 30, 2024 and consisted of consolidated net loss of $19.7 million and non-cash items of $151.7 million, offset by net changes in operating assets and liabilities of $14.7 million. The change in operating assets and liabilities primarily relates to an increase in inventories of $46.0 million to support our growth and an increase in accounts payable of $6.0 million, due to timing of payments. This was partially offset by a decrease in accounts receivable of $23.4 million due to timing of invoicing and collections, a decrease in prepaid expenses and other current and non-current assets of $1.7 million, and a decrease in accrued expenses and other non-current liabilities of $0.2 million due to timing of payments.
Net Cash (Used In) Provided By Investing Activities
Net cash (used in) provided by investing activities relates primarily to capital expenditures and purchases of marketable and non-marketable investments, partially offset by proceeds from maturities of marketable investments.
Net cash used in investing activities was $178.9 million during the nine months ended September 30, 2025 and primarily consisted of purchases of marketable investments, net of proceeds from maturities of $133.6 million and capital expenditures of $45.3 million.
Net cash provided by investing activities was $88.6 million during the nine months ended September 30, 2024 and primarily consisted of $112.8 million in proceeds from maturities of marketable investments, net of purchases, partially offset by purchases of capital expenditures of $15.8 million and non-marketable investments of $10.0 million.
Net Cash Provided By (Used In) Financing Activities
Net cash provided by (used in) financing activities primarily relates to proceeds from exercises of stock options and issuances of common stock under our employee stock purchase plan, partially offset by payments towards the reduction of our finance lease obligations and payments of employee taxes related to vested restricted stock units.
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Net cash provided by financing activities was $21.5 million during the nine months ended September 30, 2025 and primarily consisted of $15.4 million in proceeds from exercises of stock options and proceeds from the issuance of common stock under our employee stock purchase plan of $8.9 million, partially offset by $1.9 million in payments towards finance leases and $0.6 million of payments of employee taxes related to vested restricted stock units.
Net cash used in financing activities was $93.1 million during the nine months ended September 30, 2024 and primarily consisted of repurchases of common stock of $100.4 million, including legal and financial advisor fees, and $1.7 million in payments towards finance leases, partially offset by proceeds from the issuance of common stock under our employee stock purchase plan of $8.9 million.
Contractual Obligations and Commitments
During the nine months ended September 30, 2025, the Company entered into agreements to acquire property in Costa Rica and construct a manufacturing facility and warehouse for the production of medical devices. Refer to Note “5. Balance Sheet Components” to our condensed consolidated financial statements in Part I, Item 1 of this Quarterly Report on Form 10-Q for more information.
There have been no other material changes to our contractual obligations and commitments as of September 30, 2025 from those disclosed in our Annual Report on Form 10-K for the year ended December 31, 2024.
Critical Accounting Policies and Estimates
We have prepared our financial statements in accordance with U.S. GAAP. Our preparation of these financial statements requires us to make estimates, assumptions, and judgments that affect the reported amounts of assets, liabilities, expenses, and related disclosures at the date of the financial statements, as well as revenue and expenses recorded during the reporting periods. We evaluate our estimates and judgments on an ongoing basis. We base our estimates on historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results could therefore differ materially from these estimates under different assumptions or conditions.
There have been no material changes to our critical accounting policies from those described in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in our Annual Report on Form 10-K for the year ended December 31, 2024.
Recently Issued Accounting Standards
For information with respect to recently issued accounting standards and the impact of these standards on our consolidated financial statements, refer to Note “2. Summary of Significant Accounting Policies” to our condensed consolidated financial statements in Part I, Item 1 of this Quarterly Report on Form 10-Q.
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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
We are exposed to various market risks, which may result in potential losses arising from adverse changes in market rates, such as interest rates and foreign exchange rates. We do not enter into derivatives or other financial instruments for trading or speculative purposes and do not believe we are exposed to material market risk with respect to our cash and cash equivalents and/or our marketable investments.
Interest Rate Risk. We had cash and cash equivalents of $321.0 million as of September 30, 2025, which consisted of funds held primarily in commercial paper, money market funds, certificate of deposits, and general checking and savings accounts. In addition, we had marketable investments of $149.3 million, which consisted primarily of corporate bonds and commercial paper. Our investments are focused on the preservation of capital and principal, supporting our liquidity needs, and longer-term planning to ensure a competitive rate of return. We invest in highly rated securities, while limiting the amount of credit exposure to any one issuer other than the U.S. government. We do not invest in financial instruments for trading or speculative purposes, nor do we use leveraged financial instruments. We utilize external investment managers who adhere to the guidelines of our investment policy. A hypothetical 100 basis point change in interest rates would not have a material impact on the value of our cash and cash equivalents or marketable investments.
Foreign Exchange Risk Management. We operate in countries other than the United States, and, therefore, we are exposed to foreign currency risks. We bill most sales outside of the United States in local currencies, primarily in euros, with some sales being denominated in other currencies. When sales or expenses are not denominated in U.S. dollars, a fluctuation in exchange rates could affect our net income. We do not believe our net income would be materially impacted by an immediate 10% adverse change in foreign exchange rates. We do not currently hedge our exposure to foreign currency exchange rate fluctuations; however, we may choose to hedge our exposure in the future.
While our gross margin for the nine months ended September 30, 2025 was primarily impacted by favorable product mix across our regions and productivity improvements, changes in prices did not have a significant impact on our results of operations for any periods presented on our consolidated financial statements.
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ITEM 4. CONTROLS AND PROCEDURES.
Evaluation of Disclosure Controls and Procedures
An evaluation as of September 30, 2025 was carried out under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, of the effectiveness of our “disclosure controls and procedures,” which are defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as controls and other procedures of a company that are designed to ensure that the information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to the company’s management, including its principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure. Based upon that evaluation, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures were effective as of September 30, 2025.
Changes in Internal Control Over Financial Reporting
There was no change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the quarterly period ended September 30, 2025 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
Limitations on the Effectiveness of Controls
A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Because of inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues, if any, within a company have been detected. Accordingly, our disclosure controls and procedures are designed to provide reasonable, not absolute, assurance that the objectives of our disclosure control system are met.
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PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
For information with respect to Legal Proceedings, see Note “8. Commitments and Contingencies” to our condensed consolidated financial statements in Part I, Item 1 of this Quarterly Report on Form 10-Q.
ITEM 1A. RISK FACTORS.
There have been no material changes to our risk factors reported in, or new risk factors identified since the filing of, our Annual Report on Form 10-K for the year ended December 31, 2024, which was filed with the SEC on February 18, 2025.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
None.
ITEM 4. MINE SAFETY DISCLOSURE.
None.
ITEM 5. OTHER INFORMATION.
Rule 10b5-1 Trading Plans
During the quarterly period ended September 30, 2025, no director or officer adopted or terminated any “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement”, as each term is defined in Item 408(a) of Regulation S-K.
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ITEM 6. EXHIBITS.

Exhibit Number |  | Description |  | Form |  | File No. |  | Exhibit(s) |  | Filing Date
31.1 |  | Certification of Principal Executive Officer Required Under Rule 13a-14(a) and 15d-14(a) of the Securities Exchange Act of 1934, as amended. |  |  |  |  |  |  |  |
31.2 |  | Certification of Principal Financial Officer Required Under Rule 13a-14(a) and 15d-14(a) of the Securities Exchange Act of 1934, as amended. |  |  |  |  |  |  |  |
32.1* |  | Certification of Principal Executive Officer and Principal Financial Officer Required Under Rule 13a-14(b) of the Securities Exchange Act of 1934, as amended, and 18 U.S.C. §1350. |  |  |  |  |  |  |  |
101 |  | The following materials from the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2025 formatted in Inline Extensible Business Reporting Language (iXBRL) includes: (i) Condensed Consolidated Balance Sheets as of September 30, 2025 and December 31, 2024, (ii) Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2025 and 2024, (ii) Condensed Consolidated Statements of Comprehensive Income (Loss) for the three and nine months ended September 30, 2025 and 2024, (iii) Condensed Consolidated Statements of Stockholders’ Equity for the three and nine months ended September 30, 2025 and 2024, (iv) Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2025 and 2024, and (v) Notes to Condensed Consolidated Financial Statements. |  |  |  |  |  |  |  |
104 |  | Cover Page Interactive Data File (formatted as iXBRL with applicable taxonomy extension information contained in Exhibit 101). |  |  |  |  |  |  |  |

* Furnished herewith.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

|  | PENUMBRA, INC.
Date: November 5, 2025 |  |
| By: | /s/ Maggie Yuen
|  | Maggie Yuen
|  | Chief Financial Officer
|  | (Principal Financial Officer)

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