Forward-Looking Statements The following discussion and analysis of the financial condition and results of our operations should be in conjunction with the consolidated financial statements and related notes elsewhere in this Quarterly Report on Form 10-Q. This discussion contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act, that are based on our management’s beliefs and assumptions and on information currently available to our management. The forward-looking statements are contained principally in this Management’s Discussion and Analysis of Financial Condition and Results of Operations and in the section entitled “Risk Factors” of our Annual Report on Form 10-K and our subsequently filed Quarterly Reports on Form 10-Q filed with the SEC. Forward-looking statements include, but are not limited to, statements concerning the following: •information concerning our possible or assumed future cash flows, revenue, sources of revenue, results of operations, and operating and other expenses; •the impact of expense inflation on the components we use in our products, and the impact of inflation of the ability of our customers to afford our products; •the potential for future supply chain constraints; •our assessment and expectations regarding reimbursement rates, future rounds of competitive bidding, Centers for Medicare and Medicaid Services changes to Home Use of Oxygen national coverage determination and how those changes are implemented, and future changes in rental revenue; •our ability to develop new products, improve our existing products, and increase the value of our products; •our expectations regarding the timing of new products and product improvement launches as well as product features and specifications; •our expectations with respect to our cost reduction initiatives; •our expectations regarding regulatory approvals and government and third-party payor coverage and reimbursement; •the ability of our competitors to introduce products to the market that may be lower priced than ours, may have more product features than ours, or are otherwise more accepted by the market, including our home medical equipment providers; •our ability to attract key talent to the Company, and to retain key employees; •our ability to efficiently integrate Physio-Assist and our ability to obtain reimbursement coverage and payment for Simeox in the U.S.; •expectations with respect to market share, unit sales, business strategies, financing plans, expansion of our business, competitive position, industry environment, and potential growth opportunities; •our expectations regarding the market size, market growth, and the growth potential for our business; •our ability to grow our business and enter new markets; •our expectations regarding the average selling prices and manufacturing costs of our products and our ongoing efforts to reduce average unit costs for our systems; •our expectations regarding the productivity of our sales and marketing teams; •our expectations with respect to our European and U.S. facilities and our expectations with respect to our contract manufacturer in Europe; •our expectations, and changing regulations regarding tariffs that are or may be imposed by the U.S. on certain imported materials and products; •our ability to successfully acquire and integrate companies and assets; •our expectations regarding the impact and implementation of trade regulations on our supply chain; •our expectations of future accounting pronouncements or changes in our accounting policies; •our internal control environment; 20 •the effects of seasonal trends on our results of operations and estimated hiring plans; and •our expectation that our existing capital resources and the cash to be generated from expected product sales and rentals will be sufficient to meet our projected operating and investing requirements for at least the next 12 months. Forward-looking statements include statements that are not historical facts and can be identified by terms such as “anticipates,” “believes,” “could,” “seeks,” “estimates,” “expects,” “intends,” “may,” “plans,” “potential,” “predicts,” “projects,” “should,” “will,” “would,” or similar expressions and the negatives of those terms. Forward-looking statements involve known and unknown risks, uncertainties, and other factors that may cause our actual results, performance, or achievements to be materially different from any future results, performance, or achievements expressed or implied by the forward-looking statements. We discuss these risks in greater detail in the sections entitled “Risk Factors” and elsewhere in this Quarterly Report on Form 10-Q, and our Annual Report on Form 10-K filed with the SEC on February 27, 2026 and our Quarterly Report on Form 10-Q for the quarter ended March 31, 2026 filed with the SEC on May 8, 2026. Given these uncertainties, you should not place undue reliance on these forward-looking statements. Moreover, we operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for us to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. In light of these risks, uncertainties and assumptions, the future events and trends discussed in this Quarterly Report on Form 10-Q may not occur and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements. The forward-looking statements made in this Quarterly Report on Form 10-Q relate only to events as of the date on which the statements are made. Except as required by law, we assume no obligation to update these forward-looking statements, or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future. This Quarterly Report on Form 10-Q also contains estimates, projections and other information concerning our industry, our business, and the markets for certain diseases, including data regarding the estimated size of those markets, and the incidence and prevalence of certain medical conditions. Information that is based on estimates, forecasts, projections, market research, or similar methodologies is inherently subject to uncertainties and actual events, or circumstances may differ materially from events and circumstances reflected in this information. Unless otherwise expressly stated, we obtained this industry, business, market, and other data from reports, research surveys, studies, and similar data prepared by market research firms and other third parties, industry, medical and general publications, government data and similar sources. 21 “AURORA,” “Inogen,” “Inogen One,” “Inogen One G3,” “G4,” “G5,” “Oxygen.Anytime.Anywhere,” “Intelligent Delivery Technology,” “Inogen At Home,” “Inogen Rove,” “Inogen Rove 4,” “Rove,” “Inogen Rove 6”, the Inogen design and “VOXI”, are registered trademarks with the United States Patent and Trademark Office of Inogen, Inc. We own trademark registrations for the mark “Inogen” in Argentina, Australia, Bermuda, Canada, Chile, China, Columbia, Ecuador, Hong Kong, South Korea, Malaysia, Mexico, Europe (European Union Registration), the United Kingdom, Iceland, India, Indonesia, Israel, Japan, Kuwait, New Zealand, Norway, Dominican Republic, Paraguay, Peru, Philippines, Turkey, Singapore, South Africa, Switzerland, the UAE, Uruguay, and Vietnam. We own a pending application for the mark “Inogen” in Thailand. We own a trademark registration for the mark “イノジェン” in Japan. We own trademark registrations for the marks “印诺真” and “艾诺根” in China. We own trademark registrations for the mark “Inogen One” in Australia, Canada, China, South Korea, Mexico, Europe (European Union Registration), and the United Kingdom. We own a trademark registration for the mark “Satellite Conserver” in Canada. We own trademark registrations for the mark “Inogen At Home” in Europe (European Union Registration) and the United Kingdom. We own trademark registrations for the mark “G4” in Europe (European Union Registration) and the United Kingdom. We own trademark registrations for the marks “Inogen Rove 4” and “Inogen Rove 6” in Europe (European Union Registration) and the United Kingdom. We own trademark registrations for the mark “G5” in Europe (European Union Registration) and the United Kingdom. We own pending applications for the marks “Inogen Rove 4” and “Inogen Rove 6” in Canada. We own trademark registrations for the mark “Rove” in Argentina, Australia, China, Colombia, Europe (European Union Registration), India, Indonesia, Mexico, Saudi Arabia, South Korea, and the United Kingdom. We own a pending application for the mark “Rove” in Canada. We own trademark registrations for the mark “Inogen Rove” in Argentina, Australia, Brazil, China, Colombia, Europe (European Union Registration), India, Indonesia, Mexico, Saudi Arabia, South Korea, and the United Kingdom. We own a pending application for the mark “Inogen Rove” in Canada. We own trademark registrations for the Inogen design in Bolivia and China. We own a trademark registration for the mark “إنوجن” in Saudi Arabia. We own a pending application for the Inogen One G5 design in Brazil. We own a trademark registration for “Inogen Simeox” in China. We own a trademark registration for the mark “VOXI” in Europe (European Union Registration). We own a trademark registration for AURORA in Europe (European Union Registration). Other service marks, trademarks, and trade names referred to in this Quarterly Report on Form 10-Q are the property of their respective owners. “PHYSIOASSIST,” the Physio-Assist logo, “SIMEOX,” and the Pissenlit logo are registered trademarks of Inogen’s wholly-owned subsidiary Physio-Assist. Physio-Assist owns trademark registrations for the mark “PHYSIOASSIST” in Europe (European Union Registration), France, Japan, United Kingdom, and USA. Physio-Assist owns trademark registrations for the Physio-Assist logo in China, Europe (European Union Registration), France, Japan, South Korea, United Kingdom, and USA. Physio-Assist owns trademark registrations for the mark “SIMEOX” in Argentina, Colombia, Europe (European Union Registration), France, Japan, Norway, Russia, Switzerland, United Kingdom, and USA. Physio-Assist owns pending applications for the mark “SIMEOX” in Canada and Mexico. Physio-Assist owns a trademark registration for the Pissenlit logo in France. In this Quarterly Report on Form 10-Q, “the Company,” “we,” “us,” and “our” refer to Inogen, Inc. and its subsidiaries. The following discussion of our financial condition and results of operations should be read together with our consolidated financial statements and the accompanying condensed notes to those statements included elsewhere in this document. In addition, you should refer to our audited consolidated financial statements and notes thereto and related Management’s Discussion and Analysis of Financial Condition and Results of Operations appearing in our Annual Report on Form 10-K for the year ended December 31, 2025, as filed with the SEC on February 27, 2026. Critical accounting policies and estimates Our discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements which have been prepared in accordance with U.S. GAAP. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets and liabilities and related disclosure of contingent assets and liabilities, revenue and expenses at the date of the financial statements. Generally, we base our estimates on historical experience and on various other assumptions in accordance with U.S. GAAP that we believe to be reasonable under the circumstances. Actual results may differ from these estimates and such differences could be material to the financial position and results of operations. Critical accounting policies and estimates are those that we consider the most important to the portrayal of our financial condition and results of operations because they require our most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain. Our critical accounting policies and estimates include those related to: •revenue recognition; and •acquisitions and related acquired intangible assets and goodwill. There have been no material changes in our critical accounting policies and estimates in the preparation of our consolidated financial statements during the three and six months ended June 30, 2026 compared to those disclosed in our Annual Report on Form 10-K for the year ended December 31, 2025, as filed with the SEC on February 27, 2026. 22 Recent accounting pronouncements Information about recently adopted and proposed accounting pronouncements, if applicable, is included in Note 2 to our consolidated financial statements in Part I, Item 1 of this Quarterly Report on Form 10-Q under the heading “Recent Accounting Pronouncements Not Yet Adopted” and is incorporated herein by reference. Macroeconomic environment While we have worked to improve our global supply chain, challenges and potential disruptions still exist. We have experienced, and may continue to experience, increases in cost and limited availability of certain raw materials, components, and other inputs necessary to manufacture and distribute our products due to constraints and inflation within the global supply chain, and increases in wage costs and the cost and time to distribute our products. Uncertainty around inflationary pressures, interest rates, global conflicts, monetary policy, and changes in tariffs and tax laws could potentially cause new, or exacerbate existing, economic challenges that we may face, including the impact of foreign currency fluctuations on our results of operations, or result in an economic downturn or recession, which could negatively impact our business operations and results. Existing and future potential geopolitical dynamics may create economic, supply chain, energy, and other challenges, including disruptions to business operations, which has impacted, and may in the future negatively impact our business. In addition, escalating tensions and military conflict involving Iran and the broader Middle East region have increased volatility in global shipping and logistics markets, resulting in higher freight, transportation, fuel, and insurance costs, longer transit times, and potential disruptions to key trade routes. In particular, international conflicts and disputes have created and may continue to create instability, including increased transportation and freight expenses, may further result in sanctions, tariffs, and other measures that restrict international trade and may negatively affect our business operations and results. We continue to monitor the tariffs imposed by the U.S. government, as well as the potential for additional or modified tariffs, and the imposition of tariffs or export controls by other countries. We do not currently expect a material impact to our business from the tariffs in the forms in which they are currently proposed. For additional information on risk factors that could impact our results, please refer to the sections entitled “Risk Factors” in this Quarterly Report on Form 10-Q, our Annual Report on Form 10-K for the year ended December 31, 2025, as filed with the SEC on February 27, 2026 and our Quarterly Report on Form 10-Q for the quarter ended March 31, 2026 filed with the SEC on May 8, 2026. Overview We are a medical technology company focused on the development, manufacture, and commercialization of respiratory products, including portable and stationary oxygen concentrators, airway clearance devices, and CPAP masks for the treatment of chronic respiratory conditions. Our portfolio includes portable oxygen concentrator systems designed to optimize output, weight, sound levels, and battery life, as well as stationary oxygen concentrators, the Simeox airway clearance system and Aurora CPAP masks. We operate both as a medical technology company and as a home medical equipment provider, with accreditation across all 50 U.S. states and a broad network of patients, prescribers, providers, and distribution partners. We generate the majority of our revenue from the sale and rental of our portable oxygen concentrator systems and related accessories to patients, third-party payors, home healthcare providers, resellers, and distributors. Our products are marketed in the United States through direct-to-consumer, prescriber, and business-to-business channels, and internationally through distributors and medical equipment providers. Our product offerings include multiple configurations of our Inogen One®, Rove, At Home, and Voxi® systems, in addition to Simeox and Aurora products and related accessories. Our strategy is focused on expanding our domestic and international business-to-business channels, improving the productivity of our direct-to-consumer and prescriber sales efforts, and optimizing rental revenue through targeted prescriber engagement. We are also investing in research and development and clinical studies to support product innovation and generate clinical and economic evidence to support the value of our products and drive reimbursement and adoption. In addition, we are leveraging partnerships, including our collaboration with Jiangsu Yuyue Medical Equipment & Supply Co., Ltd., or Yuwell, to broaden our product portfolio and support entry into new markets. We continue to develop and commercialize new products and expand our existing offerings, including advancing the commercialization of Simeox and expanding our CPAP mask and stationary oxygen product lines. We are also pursuing geographic expansion, particularly in Europe and other international markets, supported by our distribution network and manufacturing relationships. 23 Results of operations Comparison of three months ended June 30, 2026 and 2025 Revenue Three months ended June 30, Change 2026 vs. 2025 % of Revenue (dollar amounts in thousands) 2026 2025 $ % 2026 2025 Sales revenue $ 83,525 $ 79,172 $ 4,353 5.5 % 87.8 % 85.8 % Rental revenue 11,559 13,105 (1,546 ) -11.8 % 12.2 % 14.2 % Total revenue $ 95,084 $ 92,277 $ 2,807 3.0 % 100.0 % 100.0 % Sales revenue increased $4.4 million, or 5.5%, for the three months ended June 30, 2026 from the three months ended June 30, 2025. The increase was primarily attributable to higher demand in our international markets as well as the favorable impact of foreign exchange rates, partially offset by channel mix within the U.S. We sold approximately 53,300 portable units during the three months ended June 30, 2026 compared to approximately 47,600 portable units sold during the three months ended June 30, 2025, an increase of 12.0%. Rental revenue decreased $1.5 million, or 11.8%, for the three months ended June 30, 2026 from the three months ended June 30, 2025. The decrease in rental revenue was primarily related to fewer patients on service. Three months ended (dollar amounts in thousands) June 30, Change 2026 vs. 2025 % of Revenue Revenue by geographic region 2026 2025 $ % 2026 2025 U.S. sales $ 42,272 $ 43,249 $ (977 ) -2.3 % 44.5 % 46.9 % International sales 41,253 35,923 5,330 14.8 % 43.4 % 38.9 % U.S. rentals 11,559 13,105 (1,546 ) -11.8 % 12.2 % 14.2 % Total revenue $ 95,084 $ 92,277 $ 2,807 3.0 % 100.0 % 100.0 % U.S. sales decreased 2.3% for the three months ended June 30, 2026 compared to the three months ended June 30, 2025, primarily due to channel mix versus the comparable period in 2025. International sales increased 14.8% for the three months ended June 30, 2026 compared to the three months ended June 30, 2025, primarily due to an increase in demand from our partners in Europe as well as the impact of favorable foreign exchange rates. In the three months ended June 30, 2026, sales in Europe as a percentage of total international sales revenue decreased to 84.2% from 85.3% during the comparable period in 2025. U.S. rentals decreased 11.8% for the three months ended June 30, 2026 compared to the three months ended June 30, 2025, primarily related to fewer patients on service. Cost of revenue and gross profit Three months ended June 30, Change 2026 vs. 2025 % of Revenue (dollar amounts in thousands) 2026 2025 $ % 2026 2025 Cost of sales revenue $ 44,949 $ 43,469 $ 1,480 3.4 % 47.3 % 47.1 % Cost of rental revenue 6,863 7,467 (604 ) -8.1 % 7.2 % 8.1 % Total cost of revenue $ 51,812 $ 50,936 $ 876 1.7 % 54.5 % 55.2 % Gross profit - sales revenue $ 38,576 $ 35,703 $ 2,873 8.0 % 40.6 % 38.7 % Gross profit - rental revenue 4,696 5,638 (942 ) -16.7 % 4.9 % 6.1 % Total gross profit $ 43,272 $ 41,341 $ 1,931 4.7 % 45.5 % 44.8 % Gross margin percentage - sales revenue 46.2 % 45.1 % Gross margin percentage - rental revenue 40.6 % 43.0 % Total gross margin percentage 45.5 % 44.8 % Cost of sales revenue increased $1.5 million, or 3.4%, for the three months ended June 30, 2026 from the three months ended June 30, 2025 due primarily to an increase in the number of systems sold. Cost of rental revenue decreased $0.6 million, or 8.1%, for the three months ended June 30, 2026 from the three months ended June 30, 2025. The decrease in cost of rental revenue was primarily attributable to fewer patients on service. 24 Gross margin on sales revenue increased to 46.2% for the three months ended June 30, 2026 from 45.1% for the three months ended June 30, 2025. The increase was driven by manufacturing cost leverage from higher units sold and lower cost premiums associated with open-market purchases of semiconductor chips used in our portable oxygen concentrators and reduced warranty-related costs resulting from product quality improvements. Gross margin on rental revenue decreased to 40.6% for the three months ended June 30, 2026 from 43.0% for the three months ended June 30, 2025, primarily due to higher logistics costs per rental patient. Research and development expense Three months ended June 30, Change 2026 vs. 2025 % of Revenue (dollar amounts in thousands) 2026 2025 $ % 2026 2025 Research and development expense $ 5,871 $ 5,209 $ 662 12.7 % 6.2 % 5.6 % Research and development expense increased $0.7 million, or 12.7%, for the three months ended June 30, 2026 from the three months ended June 30, 2025. This increase was due primarily to product development costs and investments to support growth from new products. Sales and marketing expense Three months ended June 30, Change 2026 vs. 2025 % of Revenue (dollar amounts in thousands) 2026 2025 $ % 2026 2025 Sales and marketing expense $ 24,824 $ 25,390 $ (566 ) -2.2 % 26.1 % 27.5 % Sales and marketing expense decreased $0.6 million, or 2.2%, for the three months ended June 30, 2026 from the three months ended June 30, 2025. This decrease was primarily due to a $1.5 million reduction in personnel costs, partially offset by an increase of $0.8 million in media and advertising costs. In the three months ended June 30, 2026, we spent $8.2 million in media and advertising costs versus $7.4 million in the comparable period in 2025. General and administrative expense Three months ended June 30, Change 2026 vs. 2025 % of Revenue (dollar amounts in thousands) 2026 2025 $ % 2026 2025 General and administrative expense $ 17,673 $ 16,871 $ 802 4.8 % 18.6 % 18.3 % General and administrative expense increased $0.8 million, or 4.8%, for the three months ended June 30, 2026 from the three months ended June 30, 2025, primarily due to an increase of $0.6 million in stockholder engagement and proxy defense costs. Other income, net Three months ended June 30, Change 2026 vs. 2025 % of Revenue (dollar amounts in thousands) 2026 2025 $ % 2026 2025 Interest income, net $ 861 $ 1,123 $ (262 ) -23.3 % 0.9 % 1.2 % Other income, net 231 701 (470 ) -67.0 % 0.2 % 0.8 % Total other income, net $ 1,092 $ 1,824 $ (732 ) -40.1 % 1.1 % 2.0 % Total other income, net decreased $0.7 million, or 40.1%, for the three months ended June 30, 2026 from the three months ended June 30, 2025, primarily due to net foreign currency losses. Income tax benefit Three months ended June 30, Change 2026 vs. 2025 % of Revenue (dollar amounts in thousands) 2026 2025 $ % 2026 2025 Income tax benefit $ (154 ) $ (153 ) $ (1 ) 0.7 % -0.2 % -0.2 % Effective income tax rate 3.8 % 3.6 % Income tax benefit increased less than $0.1 million, or 0.7%, for the three months ended June 30, 2026 from the three months ended June 30, 2025. We continued to record a valuation allowance on the use of deferred tax assets in the current and prior periods. 25 Our effective tax rate for the three months ended June 30, 2026 increased slightly compared to the three months ended June 30, 2025. The increase in the effective tax rate from the prior year was attributable to changes in the forecast pretax income/(loss). Net loss Three months ended June 30, Change 2026 vs. 2025 % of Revenue (dollar amounts in thousands) 2026 2025 $ % 2026 2025 Net loss $ (3,850 ) $ (4,152 ) $ 302 7.3 % -4.0 % -4.5 % Net loss decreased $0.3 million, or 7.3%, for the three months ended June 30, 2026 from the three months ended June 30, 2025. The decrease in net loss was primarily related to an increase in sales revenue and an increase in gross margin percentage. Comparison of six months ended June 30, 2026 and 2025 Revenue Six months ended June 30, Change 2026 vs. 2025 % of Revenue (dollar amounts in thousands) 2026 2025 $ % 2026 2025 Sales revenue $ 155,929 $ 147,642 $ 8,287 5.6 % 86.5 % 84.6 % Rental revenue 24,264 26,915 (2,651 ) -9.8 % 13.5 % 15.4 % Total revenue $ 180,193 $ 174,557 $ 5,636 3.2 % 100.0 % 100.0 % Sales revenue increased $8.3 million, or 5.6%, for the six months ended June 30, 2026 from the six months ended June 30, 2025. The increase was primarily attributable to higher demand in our international markets as well as the favorable impact of foreign exchange rates, partially offset by channel mix within the U.S. We sold approximately 99,600 portable units during the six months ended June 30, 2026 compared to approximately 89,400 portable units sold during the six months ended June 30, 2025, an increase of 11.4%. Rental revenue decreased $2.7 million, or 9.8%, for the six months ended June 30, 2026 from the six months ended June 30, 2025. The decrease in rental revenue was primarily related to fewer patients on service. Six months ended (dollar amounts in thousands) June 30, Change 2026 vs. 2025 % of Revenue Revenue by geographic region 2026 2025 $ % 2026 2025 U.S. sales $ 77,008 $ 79,734 $ (2,726 ) -3.4 % 42.7 % 45.7 % International sales 78,921 67,908 11,013 16.2 % 43.8 % 38.9 % U.S. rentals 24,264 26,915 (2,651 ) -9.8 % 13.5 % 15.4 % Total revenue $ 180,193 $ 174,557 $ 5,636 3.2 % 100.0 % 100.0 % U.S. sales decreased 3.4% for the six months ended June 30, 2026 compared to the six months ended June 30, 2025, primarily due to channel mix versus the comparable period in 2025. International sales increased 16.2% for the six months ended June 30, 2026 compared to the six months ended June 30, 2025, primarily due to an increase in demand from our partners in Europe as well as the impact of favorable foreign exchange rates. In the six months ended June 30, 2026, sales in Europe as a percentage of total international sales revenue increased to 86.5% from 85.5% during the comparable period in 2025. U.S. rentals decreased 9.8% for the six months ended June 30, 2026 compared to the six months ended June 30, 2025, primarily related to fewer patients on service. 26 Cost of revenue and gross profit Six months ended June 30, Change 2026 vs. 2025 % of Revenue (dollar amounts in thousands) 2026 2025 $ % 2026 2025 Cost of sales revenue $ 85,126 $ 81,552 $ 3,574 4.4 % 47.2 % 46.7 % Cost of rental revenue 13,932 15,292 (1,360 ) -8.9 % 7.7 % 8.8 % Total cost of revenue $ 99,058 $ 96,844 $ 2,214 2.3 % 55.0 % 55.5 % Gross profit - sales revenue $ 70,803 $ 66,090 $ 4,713 7.1 % 39.3 % 37.9 % Gross profit - rental revenue 10,332 11,623 (1,291 ) -11.1 % 5.7 % 6.6 % Total gross profit $ 81,135 $ 77,713 $ 3,422 4.4 % 45.0 % 44.5 % Gross margin percentage - sales revenue 45.4 % 44.8 % Gross margin percentage - rental revenue 42.6 % 43.2 % Total gross margin percentage 45.0 % 44.5 % Cost of sales revenue increased $3.6 million, or 4.4%, for the six months ended June 30, 2026 from the six months ended June 30, 2025 due primarily to an increase in the number of systems sold. Cost of rental revenue decreased $1.4 million, or 8.9%, for the six months ended June 30, 2026 from the six months ended June 30, 2025. The decrease in cost of rental revenue was primarily attributable to fewer patients on service. Gross margin on sales revenue increased to 45.4% for the six months ended June 30, 2026 from 44.8% for the six months ended June 30, 2025. The increase was driven by manufacturing cost leverage from higher units sold and lower cost premiums associated with open-market purchases of semiconductor chips used in our portable oxygen concentrators and reduced warranty-related costs resulting from product quality improvements. Gross margin on rental revenue decreased to 42.6% for the six months ended June 30, 2026 from 43.2% for the six months ended June 30, 2025, primarily due to higher logistics costs per rental patient. Research and development expense Six months ended June 30, Change 2026 vs. 2025 % of Revenue (dollar amounts in thousands) 2026 2025 $ % 2026 2025 Research and development expense $ 10,968 $ 9,243 $ 1,725 18.7 % 6.1 % 5.3 % Research and development expense increased $1.7 million, or 18.7%, for the six months ended June 30, 2026 from the six months ended June 30, 2025. This increase was due primarily to increased product development and investments to support growth from new products. Sales and marketing expense Six months ended June 30, Change 2026 vs. 2025 % of Revenue (dollar amounts in thousands) 2026 2025 $ % 2026 2025 Sales and marketing expense $ 49,427 $ 49,147 $ 280 0.6 % 27.4 % 28.2 % Sales and marketing expense increased $0.3 million, or 0.6%, for the six months ended June 30, 2026 from the six months ended June 30, 2025. This increase was primarily due to an increase of $1.6 million in media and advertising costs and $0.5 million in costs related to employee engagement and training activities, offset by a decrease of $2.2 million in personnel costs. In the six months ended June 30, 2026, we spent $16.6 million in media and advertising costs versus $15.0 million in the comparable period in 2025. General and administrative expense Six months ended June 30, Change 2026 vs. 2025 % of Revenue (dollar amounts in thousands) 2026 2025 $ % 2026 2025 General and administrative expense $ 35,172 $ 33,108 $ 2,064 6.2 % 19.5 % 19.0 % 27 General and administrative expense increased $2.1 million, or 6.2%, for the six months ended June 30, 2026 from the six months ended June 30, 2025, primarily due to an increase of $1.1 million in restructuring-related costs and $0.8 million in stockholder engagement and proxy defense costs. Other income, net Six months ended June 30, Change 2026 vs. 2025 % of Revenue (dollar amounts in thousands) 2026 2025 $ % 2026 2025 Interest income, net $ 1,741 $ 2,152 $ (411 ) -19.1 % 1.0 % 1.6 % Other income, net 189 1,057 (868 ) -82.1 % 0.1 % 0.2 % Total other income, net $ 1,930 $ 3,209 $ (1,279 ) -39.9 % 1.1 % 1.8 % Total other income, net decreased $1.3 million, or 39.9%, for the six months ended June 30, 2026 from the six months ended June 30, 2025, primarily due to net foreign currency losses. Income tax benefit Six months ended June 30, Change 2026 vs. 2025 % of Revenue (dollar amounts in thousands) 2026 2025 $ % 2026 2025 Income tax benefit $ (328 ) $ (250 ) $ (78 ) 31.2 % -0.2 % -0.1 % Effective income tax rate 2.6 % 2.4 % Income tax benefit decreased less than $0.1 million, or 31.2%, for the six months ended June 30, 2026 from the six months ended June 30, 2025. We continued to record a valuation allowance on the use of deferred tax assets in the current and prior periods. Our effective tax rate for the six months ended June 30, 2026 increased slightly compared to the six months ended June 30, 2025. The increase in the effective tax rate from the prior year was attributable to changes in the forecast pretax income/(loss). Net Loss Six months ended June 30, Change 2026 vs. 2025 % of Revenue (dollar amounts in thousands) 2026 2025 $ % 2026 2025 Net loss $ (12,174 ) $ (10,326 ) $ (1,848 ) -17.9 % -6.8 % -12.1 % Net loss increased $1.9 million, or 17.9%, for the six months ended June 30, 2026 from the six months ended June 30, 2025. The increase in net loss was primarily related to an increase in operating expense. Liquidity and capital resources As of June 30, 2026, we had cash and cash equivalents of $87.3 million and marketable securities of $18.3 million. Our principal uses of cash are funding our new rental asset deployments and other capital purchases, operations, and other working capital requirements and, from time to time, the acquisition of businesses. Over the past several years, our cash flows from customer collections have remained consistent and our annual cash provided by operating activities has generally been a significant source of capital to the business. We may need to raise additional funds to support our investing operations, and such funding may not be available to us on acceptable terms, or at all. If we are unable to raise additional funds when needed, our operations and ability to execute our business strategy could be adversely affected. We may seek to raise additional funds through equity, equity-linked or debt financings. If we raise additional funds through the incurrence of indebtedness, such indebtedness would have rights that are senior to holders of our equity securities and could contain covenants that restrict our operations. Any additional equity financing may be dilutive to our stockholders. We believe that our current cash, cash equivalents, and marketable securities and the cash to be generated from expected product sales and rentals will be sufficient to meet our projected operating and investing requirements for at least the next 12 months. 28 The following tables show a summary of our cash flows and working capital for the periods and as of the dates indicated: Six months ended (amounts in thousands) June 30, Change 2026 vs. 2025 Summary of consolidated cash flows 2026 2025 $ % Cash used in operating activities $ (3,739 ) $ (12,440 ) $ 8,701 69.9 % Cash used in investing activities (5,109 ) (24,611 ) 19,502 79.2 % Cash (used in) provided by financing activities (7,747 ) 23,951 (31,698 ) -132.3 % Effect of exchange rates on cash 156 642 (486 ) -75.7 % Net decrease in cash, cash equivalents, and restricted cash $ (16,439 ) $ (12,458 ) $ (3,981 ) -32.0 % (amounts in thousands) June 30, December 31, Summary of working capital 2026 2025 Total current assets $ 194,136 $ 198,299 Total current liabilities 70,864 63,535 Net working capital $ 123,272 $ 134,764 Operating activities Historically, we derive operating cash flows from cash collected from the sales and rental of our products and services. These cash flows received are partially offset by our use of cash for operating expenses to support the growth of our business. Net cash used in operating activities for the six months ended June 30, 2026 consisted primarily of our net loss of $12.2 million, partially offset by non-cash adjustment items consisting mainly of depreciation of equipment and leasehold improvements and amortization of intangibles of $9.6 million, stock-based compensation expense of $3.7 million, and provision for sales returns and doubtful accounts of $3.8 million. We also had a net use of operating assets and liabilities during the period primarily related to higher accounts receivable due to higher sales and the timing of sales within the quarter. Net cash used in operating activities for the six months ended June 30, 2025 consisted primarily of our net loss of $10.3 million, partially offset by non-cash adjustment items consisting mainly of depreciation of equipment and leasehold improvements and amortization of intangibles of $10.4 million, stock-based compensation expense of $4.4 million, and provision for sales returns and doubtful accounts of $3.2 million, and net loss on disposal of rental assets and other assets of $1.7 million. The net changes in operating assets and liabilities resulted in net cash used of $22.7 million, which included the payment of the earnout liability of $9.8 million. Investing activities Net cash used in investing activities generally includes the production and purchase of rental assets, property, plant and equipment, acquisitions, and intangibles to support our expanding business as well as purchases of marketable securities. For the six months ended June 30, 2026, we invested $13.1 million in the purchase of marketable securities and $2.7 million in the production and purchase of rental assets and other property and equipment, partially offset by $10.7 million we received from maturities of marketable securities. For the six months ended June 30, 2025, we invested $18.7 million in the purchase of marketable securities and $5.9 million in the production and purchase of rental assets and other property and equipment. Financing activities Historically, we have funded our operations through our sales and rental revenue and the issuance of preferred and common stock. For the six months ended June 30, 2026, net cash used in financing activities consisted of $7.5 million of share repurchases and $0.6 million payment of employment taxes related to the vesting of RSUs, partially offset by proceeds of $0.4 million received from proceeds from employee stock purchases under our ESPP. For the six months ended June 30, 2025, net cash provided by financing activities consisted of $27.2 million of proceeds from issuance of common stock to an affiliate of Yuwell, $0.5 million of proceeds received from purchases under our ESPP, partially offset by the payment of the earnout liability of $3.2 million and employment taxes related to the vesting of RSUs of $0.6 million. Share repurchase program On February 20, 2026, our Board of Directors authorized a share repurchase program under which we may repurchase up to $30.0 million of our outstanding common stock. The program expires on December 31, 2027, or when the maximum authorized dollar amount has been utilized, whichever occurs first. Repurchases under the program may be made from time to time through open market 29 purchases at prevailing market prices, in compliance with Rule 10b-18 under the Exchange Act, including through Rule 10b5-1 trading plans. The share repurchase program does not obligate us to make any repurchases and may be modified, suspended, or terminated by us at any time without prior notice. The amount and timing of repurchases are subject to a variety of factors including liquidity, share price, market conditions, and legal requirements. For the six months ended June 30, 2026, we repurchased and retired 1,145,150 shares of our common stock for a total of $7.5 million. As of June 30, 2026, $22.5 million remained available under the program for future repurchases. For additional information, please see Part II, Item 2. “Unregistered Sales of Equity Securities and Use of Proceeds” of this Quarterly Report on Form 10-Q. Non-GAAP financial measures EBITDA and Adjusted EBITDA are financial measures that are not calculated in accordance with U.S. GAAP. We define EBITDA as net loss excluding interest income, interest expense, taxes and depreciation and amortization. Adjusted EBITDA also excludes stock-based compensation, change in fair value of earnout liability, acquisition-related expenses, and restructuring-related and other charges. Below, we have provided a reconciliation of EBITDA and Adjusted EBITDA to our net loss, the most directly comparable financial measure calculated and presented in accordance with U.S. GAAP. EBITDA and Adjusted EBITDA should not be considered alternatives to a net loss or any other measure of financial performance calculated and presented in accordance with U.S. GAAP. Our EBITDA and Adjusted EBITDA may not be comparable to similarly titled measures of other organizations because other organizations may not calculate EBITDA and Adjusted EBITDA in the same manner as we calculate these measures. We include EBITDA and Adjusted EBITDA in this Quarterly Report on Form 10-Q because they are important measures upon which our management assesses our operating performance. We use EBITDA and Adjusted EBITDA as key performance measures because we believe they facilitate operating performance comparisons from period-to-period by excluding potential differences primarily caused by variations in capital structures, tax positions, the impact of depreciation and amortization expense on our fixed assets and intangible assets, the impact of stock-based compensation expense, the impact of the change in fair value of the earnout liability, the impact of acquisition-related expenses, the impact of restructuring-related costs, and impairment charges. Because EBITDA and Adjusted EBITDA facilitate internal comparisons of our historical operating performance on a more consistent basis, we also use EBITDA and Adjusted EBITDA for business planning purposes, to incentivize and compensate our management personnel, and in evaluating acquisition opportunities. In addition, we believe EBITDA and Adjusted EBITDA and similar measures are widely used by investors, securities analysts, ratings agencies, and other parties in evaluating companies in our industry as a measure of financial performance and debt-service capabilities. Our uses of EBITDA and Adjusted EBITDA have limitations as analytical tools and should not be considered in isolation or as a substitute for analysis of our results as reported under U.S. GAAP. Some of these limitations are: •EBITDA and Adjusted EBITDA do not reflect our cash expenditures for capital equipment or other contractual commitments; •although depreciation and amortization are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future, and EBITDA and Adjusted EBITDA do not reflect capital expenditure requirements for such replacements; •EBITDA and Adjusted EBITDA do not reflect changes in, or cash requirements for, our working capital needs; •Adjusted EBITDA does not include stockholder engagement and proxy defense costs, which include third-party advisory, legal, and other professional fees; •Adjusted EBITDA does not include costs associated with workforce reductions and associated costs and other restructuring-related activities; and •other companies, including companies in our industry, may calculate EBITDA and Adjusted EBITDA measures differently, which reduces their usefulness as a comparative measure. In evaluating EBITDA and Adjusted EBITDA, we anticipate that in the future we will incur expenses within these categories similar to this presentation. Our presentation of EBITDA and Adjusted EBITDA should not be construed as an inference that our future results will be unaffected by certain expenses. When evaluating our financial results, EBITDA and Adjusted EBITDA should be considered alongside other financial performance measures, including U.S. GAAP results. 30 The following table presents a reconciliation of EBITDA and Adjusted EBITDA to our net loss, the most comparable U.S. GAAP measure, for each of the periods indicated: (amounts in thousands) Three months ended June 30, Six months ended June 30, Non-GAAP EBITDA and Adjusted EBITDA 2026 2025 2026 2025 Net loss (GAAP) $ (3,850 ) $ (4,152 ) $ (12,174 ) $ (10,326 ) Non-GAAP adjustments: Interest income, net (861 ) (1,123 ) (1,741 ) (2,152 ) Benefit for income taxes (154 ) (153 ) (328 ) (250 ) Depreciation and amortization 4,697 5,216 9,601 10,405 EBITDA (non-GAAP) (168 ) (212 ) (4,642 ) (2,323 ) Stock-based compensation expense 1,771 2,293 3,721 4,440 Restructuring-related charges 214 — 1,130 — Stockholder engagement and proxy defense costs (1) 580 — 789 — Adjusted EBITDA (non-GAAP) $ 2,397 $ 2,081 $ 998 $ 2,117 (1) Stockholder engagement and proxy defense costs include third-party advisory, legal, and other professional fees. 31