TANDEM DIABETES CARE INCTNDM

TANDEM DIABETES CARE INC Fair Value Disclosure

10-KFiled Feb 19, 20263 min read
Fair Value Measurements
The Company performs fair value measurements in accordance with U.S. GAAP. Fair value is defined as the price that would be received from the sale of an asset or paid to transfer a liability in the principal or most advantageous market in an orderly transaction between market participants on the measurement date. To measure fair value of assets and liabilities, the Company uses the following fair value hierarchy based on three levels of inputs:

Level 1 — observable inputs, such as quoted prices in active markets for identical assets or liabilities;
Level 2 — significant other observable inputs that are observable either directly or indirectly; and
Level 3 — significant unobservable inputs for which there are little or no market data, which require the Company to develop its own assumptions.
The carrying amounts of cash and cash equivalents, accounts receivable, accounts payable, accrued expenses, and employee-related liabilities are reasonable estimates of their fair values because of the short-term nature of these assets and liabilities. Short-term investments are carried at fair value.
The following table presents information about the Company’s financial assets and liabilities measured at fair value on a recurring basis as of December 31, 2025 and December 31, 2024, and indicates the fair value hierarchy of the valuation techniques used by the Company to determine such fair value (in thousands):
Fair Value Measurements as of
December 31, 2025
TotalLevel 1Level 2Level 3
Assets
Cash equivalents(1)
$75,642 $75,642 $— $— 
Available-for-sale securities:
United States Government-sponsored enterprises101,995 — 101,995 — 
United States Treasury securities34,338 34,338 — — 
Commercial paper21,516 — 21,516 — 
Corporate debt securities44,183 — 44,183 — 
Total assets$277,674 $109,980 $167,694 $— 
Liabilities
Foreign exchange forward contracts$312 $— $312 $— 
Total liabilities$312 $— $312 $— 
Fair Value Measurements as of
December 31, 2024
TotalLevel 1Level 2Level 3
Assets
Cash equivalents(1)
$56,234 $56,234 $— $— 
United States Government-sponsored enterprises133,280 — 133,280 — 
United States Treasury securities103,702 103,702 — — 
Commercial paper23,264 — 23,264 — 
Corporate debt securities105,836 — 105,836 — 
Foreign government bonds
3,013 — 3,013 — 
Total assets$425,329 $159,936 $265,393 $— 
(1)Generally, cash equivalents include money market funds and investments with a maturity of three months or less from the date of purchase.
The Company’s Level 1 financial instruments, which are in active markets, are valued using unadjusted quoted market prices for identical instruments.
The Company’s Level 2 financial instruments are valued using market prices on less active markets with observable valuation inputs such as interest rates and yield curves. The Company obtains the fair value of Level 2 financial instruments from quoted market prices, calculated prices or quotes from third-party pricing services. The Company validates these prices through independent valuation testing and review of portfolio valuations provided by the Company’s investment managers. The Company’s foreign currency forward contracts are designated as cash flow hedges (see Note 9 “Derivatives”) and are commitments to purchase or sell a foreign currency at a future date at a negotiated forward rate. These contracts are marked-to-market by recognizing the difference between the contract forward exchange rate and the forward market exchange rate.
There were no transfers into or out of Level 3 assets during the years ended December 31, 2025 and 2024, respectively.
Fair Value of Convertible Senior Notes
The Company’s Convertible Senior Notes are carried at amortized cost on the consolidated balance sheets (see Note 7, “Debt”). The Company estimated the fair value of its convertible senior notes based on Level 2 quoted market prices as follows (in thousands):
Fair Value Measurements as of
December 31, 2025December 31, 2024
Convertible Senior Notes due 2025
$— $39,130 
Convertible Senior Notes due 2029
324,979 407,752 
Total fair value of outstanding convertible senior notes
$324,979 $446,882 
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Historical Timeline

Fiscal YearFiled
2025Feb 19, 2026Showing above
2024Feb 26, 2025
2023Feb 21, 2024
2022Feb 22, 2023
2021Feb 22, 2022
2020Feb 24, 2021
2019Feb 24, 2020
2018Feb 26, 2019
2017Mar 1, 2018
2016Mar 8, 2017
2015Feb 24, 2016

About Fair Value Disclosures

Fair value disclosures classify all assets and liabilities measured at fair value into a three-level hierarchy: Level 1 (quoted market prices), Level 2 (observable inputs like yield curves), and Level 3 (unobservable inputs requiring management estimates). The proportion of Level 3 assets directly reflects how much of the balance sheet depends on internal models rather than market evidence.

Key signals: a growing Level 3 balance relative to total fair-value assets increases valuation uncertainty and earnings volatility risk. Watch for transfers between levels — assets moving from Level 2 to Level 3 often signal deteriorating market liquidity. Unrealized gains and losses on Level 3 positions flow through earnings or other comprehensive income, so large swings deserve scrutiny. For financial institutions, examine the sensitivity disclosures that show how Level 3 valuations change under alternative assumptions. Compare the fair value of debt against its carrying amount to gauge hidden leverage.

Other Available Disclosures

Income TaxesLeasesSegmentsDebtCommitmentsNew StandardsPay vs Performance