Omnicell, Inc 10-Q for FY2025 Q1
Omnicell, Inc. (OMCL)
10-Q
2025-05-07
For: 2025-03-31
View Original
Added on
April 04, 2026
About this 10-Q
Omnicell, Inc filed this 10-Q on May 7, 2025, covering the quarter ended March 31, 2025 (FY2025 Q1).
Headline figures
Quarter ended March 31, 2025, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- $269.67M
- up 9.6% from $246.15M a year earlier
- Net loss
- $7.02M
- compared with a net loss of $15.68M a year earlier
- Diluted EPS
- -$0.15
- compared with -$0.34 a year earlier
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 March 31, 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 No. 000-33043
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of incorporation or organization) | (IRS Employer Identification No.) | ||||
(Address of registrant’s principal executive offices, including zip code)
(877 ) 415-9990
(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 | ||||||||||||
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 ý No o
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 ý No o
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.
| ☒ | 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 any new or revised financial 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 ý
As of April 30, 2025, there were 46,843,604 shares of the registrant’s common stock, $0.001 par value, outstanding.
OMNICELL, INC.
TABLE OF CONTENTS
| Page | ||||||||
2
PART I. FINANCIAL INFORMATION
ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
OMNICELL, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
| March 31, 2025 | December 31, 2024 | ||||||||||
| (In thousands, except par value) | |||||||||||
| ASSETS | |||||||||||
| Current assets: | |||||||||||
| Cash and cash equivalents | $ | $ | |||||||||
Accounts receivable and unbilled receivables, net of allowances of $ | |||||||||||
| Inventories | |||||||||||
| Prepaid expenses | |||||||||||
| Other current assets | |||||||||||
| Total current assets | |||||||||||
| Property and equipment, net | |||||||||||
| Long-term investment in sales-type leases, net | |||||||||||
| Operating lease right-of-use assets | |||||||||||
| Goodwill | |||||||||||
| Intangible assets, net | |||||||||||
| Long-term deferred tax assets | |||||||||||
| Prepaid commissions | |||||||||||
| Other long-term assets | |||||||||||
| Total assets | $ | $ | |||||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||||||
| Current liabilities: | |||||||||||
| Accounts payable | $ | $ | |||||||||
| Accrued compensation | |||||||||||
| Accrued liabilities | |||||||||||
| Deferred revenues | |||||||||||
| Convertible senior notes, net | |||||||||||
| Total current liabilities | |||||||||||
| Long-term deferred revenues | |||||||||||
| Long-term deferred tax liabilities | |||||||||||
| Long-term operating lease liabilities | |||||||||||
| Other long-term liabilities | |||||||||||
| Convertible senior notes, net | |||||||||||
| Total liabilities | |||||||||||
| Commitments and contingencies (Note 14) | |||||||||||
| Stockholders’ equity: | |||||||||||
Preferred stock, $ | |||||||||||
Common stock, $ | |||||||||||
Treasury stock at cost, | ( | ( | |||||||||
| Additional paid-in capital | |||||||||||
| Retained earnings | |||||||||||
| Accumulated other comprehensive loss | ( | ( | |||||||||
| Total stockholders’ equity | |||||||||||
| Total liabilities and stockholders’ equity | $ | $ | |||||||||
The accompanying notes are an integral part of these unaudited Condensed Consolidated Financial Statements.
3
OMNICELL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
| Three Months Ended March 31, | |||||||||||||||||||||||
| 2025 | 2024 | ||||||||||||||||||||||
| (In thousands, except per share data) | |||||||||||||||||||||||
| Revenues: | |||||||||||||||||||||||
| Product revenues | $ | $ | |||||||||||||||||||||
Service revenues | |||||||||||||||||||||||
| Total revenues | |||||||||||||||||||||||
| Cost of revenues: | |||||||||||||||||||||||
| Cost of product revenues | |||||||||||||||||||||||
Cost of service revenues | |||||||||||||||||||||||
| Total cost of revenues | |||||||||||||||||||||||
| Gross profit | |||||||||||||||||||||||
| Operating expenses: | |||||||||||||||||||||||
| Research and development | |||||||||||||||||||||||
| Selling, general, and administrative | |||||||||||||||||||||||
| Total operating expenses | |||||||||||||||||||||||
| Loss from operations | ( | ( | |||||||||||||||||||||
| Interest and other income (expense), net | |||||||||||||||||||||||
| Loss before income taxes | ( | ( | |||||||||||||||||||||
| Benefit from income taxes | ( | ( | |||||||||||||||||||||
| Net loss | $ | ( | $ | ( | |||||||||||||||||||
| Net loss per share: | |||||||||||||||||||||||
| Basic | $ | ( | $ | ( | |||||||||||||||||||
| Diluted | $ | ( | $ | ( | |||||||||||||||||||
| Weighted-average shares outstanding: | |||||||||||||||||||||||
| Basic | |||||||||||||||||||||||
| Diluted | |||||||||||||||||||||||
The accompanying notes are an integral part of these unaudited Condensed Consolidated Financial Statements.
4
OMNICELL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (UNAUDITED)
| Three Months Ended March 31, | |||||||||||||||||||||||
| 2025 | 2024 | ||||||||||||||||||||||
| (In thousands) | |||||||||||||||||||||||
| Net loss | $ | ( | $ | ( | |||||||||||||||||||
| Other comprehensive income (loss): | |||||||||||||||||||||||
| Foreign currency translation adjustments | ( | ||||||||||||||||||||||
| Other comprehensive income (loss) | ( | ||||||||||||||||||||||
| Comprehensive loss | $ | ( | $ | ( | |||||||||||||||||||
The accompanying notes are an integral part of these unaudited Condensed Consolidated Financial Statements.
5
OMNICELL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (UNAUDITED)
| Common Stock | Treasury Stock | Additional Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Stockholders’ Equity | ||||||||||||||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | ||||||||||||||||||||||||||||||||||||||||||||
| (In thousands) | |||||||||||||||||||||||||||||||||||||||||||||||
| Balances as of December 31, 2024 | $ | ( | $ | ( | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||||||||||||
| Net loss | — | — | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||
| Other comprehensive income | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
| Share-based compensation | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
| Issuance of common stock under employee stock plans | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
| Tax payments related to restricted stock units | — | — | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||||||||||||
| Balances as of March 31, 2025 | $ | ( | $ | ( | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||||||||||||
| Common Stock | Treasury Stock | Additional Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Stockholders’ Equity | ||||||||||||||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | ||||||||||||||||||||||||||||||||||||||||||||
| (In thousands) | |||||||||||||||||||||||||||||||||||||||||||||||
| Balances as of December 31, 2023 | $ | ( | $ | ( | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||||||||||||
| Net loss | — | — | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||
| Other comprehensive loss | — | — | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||||||||||||
| Share-based compensation | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
| Issuance of common stock under employee stock plans | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
| Tax payments related to restricted stock units | — | — | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||||||||||||
| Balances as of March 31, 2024 | $ | ( | $ | ( | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||||||||||||
The accompanying notes are an integral part of these unaudited Condensed Consolidated Financial Statements.
6
OMNICELL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
| Three Months Ended March 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| (In thousands) | |||||||||||
| Operating Activities | |||||||||||
| Net loss | $ | ( | $ | ( | |||||||
| Adjustments to reconcile net loss to net cash provided by operating activities: | |||||||||||
| Depreciation and amortization | |||||||||||
| Loss on disposal of assets | |||||||||||
| Share-based compensation expense | |||||||||||
| Deferred income taxes | ( | ( | |||||||||
| Amortization of operating lease right-of-use assets | |||||||||||
| Amortization of debt issuance costs | |||||||||||
| Changes in operating assets and liabilities: | |||||||||||
| Accounts receivable and unbilled receivables | |||||||||||
| Inventories | ( | ||||||||||
| Prepaid expenses | ( | ( | |||||||||
| Other current assets | ( | ||||||||||
| Investment in sales-type leases | ( | ||||||||||
| Prepaid commissions | ( | ||||||||||
| Other long-term assets | |||||||||||
| Accounts payable | ( | ||||||||||
| Accrued compensation | ( | ( | |||||||||
| Accrued liabilities | |||||||||||
| Deferred revenues | |||||||||||
| Operating lease liabilities | ( | ( | |||||||||
| Other long-term liabilities | |||||||||||
| Net cash provided by operating activities | |||||||||||
| Investing Activities | |||||||||||
| External-use software development costs | ( | ( | |||||||||
| Purchases of property and equipment | ( | ( | |||||||||
| Net cash used in investing activities | ( | ( | |||||||||
| Financing Activities | |||||||||||
| Proceeds from issuances under stock-based compensation plans | |||||||||||
| Employees’ taxes paid related to restricted stock units | ( | ( | |||||||||
| Change in customer funds, net | ( | ||||||||||
| Net cash provided by financing activities | |||||||||||
| Effect of exchange rate changes on cash and cash equivalents | ( | ||||||||||
| Net increase in cash, cash equivalents, and restricted cash | |||||||||||
| Cash, cash equivalents, and restricted cash at beginning of period | |||||||||||
| Cash, cash equivalents, and restricted cash at end of period | $ | $ | |||||||||
The accompanying notes are an integral part of these unaudited Condensed Consolidated Financial Statements.
7
OMNICELL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED) (UNAUDITED)
| Three Months Ended March 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| (In thousands) | |||||||||||
| Reconciliation of cash, cash equivalents, and restricted cash to the Condensed Consolidated Balance Sheets: | |||||||||||
| Cash and cash equivalents | $ | $ | |||||||||
| Restricted cash included in other current assets | |||||||||||
| Cash, cash equivalents, and restricted cash at end of period | $ | $ | |||||||||
| Supplemental disclosure of non-cash investing activities | |||||||||||
| Unpaid purchases of property and equipment | $ | $ | |||||||||
The accompanying notes are an integral part of these unaudited Condensed Consolidated Financial Statements.
8
OMNICELL, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
Note 1. Organization and Summary of Significant Accounting Policies
Business
Omnicell, Inc. was incorporated in California in 1992 under the name Omnicell Technologies, Inc. and reincorporated in Delaware in 2001 as Omnicell, Inc. The Company’s major products and related services are medication management solutions and adherence tools for healthcare systems and pharmacies, which are sold in its principal market, the healthcare industry. The Company’s market is primarily located in the United States. “Omnicell” or the “Company” refer to Omnicell, Inc. and its subsidiaries, collectively.
Basis of Presentation
The accompanying unaudited Condensed Consolidated Financial Statements reflect, in the opinion of management, all adjustments, consisting of normal recurring adjustments and accruals, necessary to present fairly the financial position of the Company as of March 31, 2025 and December 31, 2024, and the results of operations, comprehensive loss, and cash flows for the three months ended March 31, 2025 and 2024. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”) have been condensed or omitted in accordance with the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”). These unaudited Condensed Consolidated Financial Statements should be read in conjunction with the audited Consolidated Financial Statements and accompanying Notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC on February 27, 2025. The Company’s results of operations, comprehensive loss, and cash flows for the three months ended March 31, 2025 are not necessarily indicative of results that may be expected for the year ending December 31, 2025, or for any future period.
Principles of Consolidation
The Condensed Consolidated Financial Statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation.
Use of Estimates
Segment Reporting
The Company manages its operations as a single segment for the purposes of assessing performance and making operating decisions. The Company’s Chief Operating Decision Maker (“CODM”) is its Chief Executive Officer. The CODM allocates resources and evaluates the performance of the Company at the consolidated level using the Company’s consolidated net income (loss). In addition, the CODM is provided with certain segment assets and liabilities, primarily those that impact liquidity, as well as certain significant expenses. All significant operating decisions are based upon an analysis of the Company as one operating segment, which is the same as its reporting segment. Refer to Note 2, Segment Information, for further information regarding the Company’s segment disclosures.
Recently Adopted Authoritative Guidance
There was no recently adopted authoritative guidance that is expected to have a material impact on the Company’s Condensed Consolidated Financial Statements through the reporting date.
9
Recently Issued Authoritative Guidance
In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which includes amendments that further enhance income tax disclosures, primarily through standardization and disaggregation of rate reconciliation categories and income taxes paid by jurisdiction. The amendments are effective for the Company’s annual periods beginning January 1, 2025, with early adoption permitted, and should be applied either prospectively or retrospectively. The Company is currently evaluating the impact ASU 2023-09 will have on its consolidated financial statements, which is limited to financial statements disclosures.
In March 2024, the SEC issued final rules under SEC Release No. 33-11275, “The Enhancement and Standardization of Climate-Related Disclosures for Investors,” to require registrants to disclose certain climate-related information, including Scope 1 and Scope 2 greenhouse gas emissions and other climate-related topics, if material, in registration statements and annual reports. In April 2024, the SEC voluntarily stayed its climate disclosure rules as a result of pending legal challenges to facilitate an orderly judicial resolution. In March 2025, the SEC stated that it has ended its defense of the rule. The Company will continue to monitor any developments in the SEC’s rule and related litigation to determine what, if any, impact it will have on its consolidated financial statement disclosures.
In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosure (Subtopic 220-40): Disaggregation of Income Statement Expenses, which requires disclosures of additional information and disaggregation of certain expenses included in the income statement. The amendments are effective for the Company’s annual periods beginning January 1, 2027, and for interim periods within fiscal years beginning January 1, 2028, with early adoption permitted, and should be applied either prospectively or retrospectively. The Company is currently evaluating the impact ASU 2024-03 will have on its consolidated financial statements.
There was no other recently issued and effective authoritative guidance that is expected to have a material impact on the Company’s Condensed Consolidated Financial Statements through the reporting date.
Note 2. Segment Information
The Company’s one reportable segment derives revenues from sales of its products and related services, as described in Note 3, Revenues, which are sold in its principal market, the healthcare industry.
As the Company has a single reportable segment and is managed on a consolidated basis, the measure of segment profit or loss that the CODM uses to allocate resources and assess performance is consolidated net income (loss) as reported on the Condensed Consolidated Statements of Operations. The CODM uses this key measure to evaluate income generated from segment assets in deciding how to reinvest profits as well as monitor budget versus actual results.
The CODM is also provided with certain segment assets, primarily those that impact liquidity, such as cash and cash equivalents, accounts receivable and inventories, as well as certain liabilities such as accounts payable and outstanding debt. Assets and liabilities provided to the CODM are consistent with those reported on the Condensed Consolidated Balance Sheets. In addition, the CODM is regularly provided with significant expenses, which are adjusted cost of revenues and adjusted operating expenses. These significant expenses are adjusted for certain non-cash charges and expenses that are unrelated to the Company’s ongoing operations. Adjusted cost of revenues include cost of product revenues and cost of service revenues, and exclude certain items such as share-based compensation expense, amortization of acquired intangibles, and certain restructuring and severance charges. Adjusted operating expenses include research and development, and selling, general and administrative expenses, and exclude certain items such as share-based compensation expense, amortization of acquired intangibles, legal and regulatory expenses, and certain restructuring and severance charges. Depreciation and amortization expense for the Company’s single reportable segment was $20.0 million and $21.3 million for the three months ended March 31, 2025 and 2024, respectively.
10
The following table summarizes the Company’s reportable segment revenues and significant expenses, reconciled to the Company’s consolidated net loss:
| Three Months Ended March 31, | |||||||||||||||||
| 2025 | 2024 | ||||||||||||||||
| (In thousands) | |||||||||||||||||
| Total revenues | $ | $ | |||||||||||||||
| Less: | |||||||||||||||||
| Adjusted cost of revenues | ( | ( | |||||||||||||||
| Adjusted operating expenses | ( | ( | |||||||||||||||
Other segment items (1) | ( | ( | |||||||||||||||
| Interest and other income (expense), net | |||||||||||||||||
| Benefit from income taxes | ( | ( | |||||||||||||||
| Net loss | $ | ( | $ | ( | |||||||||||||
Note 3. Revenues
Revenue Recognition
The Company earns revenues from sales of its products and related services, which are sold in the healthcare industry, its principal market. The Company’s customer arrangements typically include one or more of the following revenue categories:
Connected devices, software licenses, and other. Software-enabled connected devices and software licenses that manage and regulate the storage and dispensing of pharmaceuticals, consumables blister cards, and packaging equipment and other supplies. This revenue category is often sold through long-term, sole-source agreements. Solutions in this category include, but are not limited to, XT Series automated dispensing systems and products related to the Central Pharmacy Dispensing Service and IV Compounding Service.
Consumables. Medication adherence packaging, labeling, and other one-time use packaging including multimed adherence packaging and single dose blister cards, which are used by retail, community, and outpatient pharmacies, as well as by institutional pharmacies serving long-term care and other sites outside the acute care hospital, and are designed to improve patient engagement and adherence to prescriptions.
Technical services. Post-installation technical support and other related services (support and maintenance), including phone support, on-site service, parts, and access to unspecified software updates and enhancements, if and when available. This revenue category is often supported by multi-year or annual contractual agreements.
Software as a Service (“SaaS”) and Expert Services. Emerging software and service solutions which are offered on a subscription basis with fees typically based either on transaction volume or a fee over a specified period of time. Solutions in this category include, but are not limited to, EnlivenHealth®, Specialty Pharmacy Services, 340B solutions, Inventory Optimization Service, other software solutions, and services related to the Central Pharmacy Dispensing Service and IV Compounding Service.
The following table summarizes revenue recognition for each revenue category:
Revenue Category | Timing of Revenue Recognition | Income Statement Classification | ||||||||||||||||||
| Connected devices, software licenses, and other | Point in time, as transfer of control occurs, generally upon installation and acceptance by the customer | Product | ||||||||||||||||||
| Consumables | Point in time, as transfer of control occurs, generally upon shipment to, or receipt by, customer | Product | ||||||||||||||||||
| Technical services | Over time, as services are provided, typically ratably over the service term | Service | ||||||||||||||||||
SaaS and Expert Services | Over time, as services are provided | Service | ||||||||||||||||||
11
Disaggregation of Revenues
The following table summarizes the Company’s revenues disaggregated by revenue type:
| Three Months Ended March 31, | |||||||||||||||||||||||
| 2025 | 2024 | ||||||||||||||||||||||
| (In thousands) | |||||||||||||||||||||||
| Connected devices, software licenses, and other | $ | $ | |||||||||||||||||||||
| Consumables | |||||||||||||||||||||||
| Technical services | |||||||||||||||||||||||
SaaS and Expert Services | |||||||||||||||||||||||
| Total revenues | $ | $ | |||||||||||||||||||||
The following table summarizes the Company’s revenues disaggregated by geographic region, which is determined based on customer location:
| Three Months Ended March 31, | |||||||||||||||||||||||
| 2025 | 2024 | ||||||||||||||||||||||
| (In thousands) | |||||||||||||||||||||||
| United States | $ | $ | |||||||||||||||||||||
Rest of world (1) | |||||||||||||||||||||||
| Total revenues | $ | $ | |||||||||||||||||||||
(1) No individual country represented more than 10% of total revenues.
Contract Assets and Contract Liabilities
The following table reflects the Company’s contract assets and contract liabilities:
| March 31, 2025 | December 31, 2024 | ||||||||||
| (In thousands) | |||||||||||
Short-term unbilled receivables, net (1) | $ | $ | |||||||||
Long-term unbilled receivables, net (2) | |||||||||||
| Total contract assets | $ | $ | |||||||||
| Short-term deferred revenues | $ | $ | |||||||||
| Long-term deferred revenues | |||||||||||
| Total contract liabilities | $ | $ | |||||||||
(1) Included in accounts receivable and unbilled receivables in the Condensed Consolidated Balance Sheets.
The portion of the transaction price allocated to the Company’s unsatisfied performance obligations for which invoicing has occurred is recorded as deferred revenues.
During the three months ended March 31, 2025, the Company recognized revenues of $54.2 million that were included in the corresponding gross short-term deferred revenues balance of $141.4 million as of December 31, 2024.
12
Deferred revenues from product sales primarily relate to delivered and invoiced products, pending installation and acceptance. Deferred revenues from service contracts primarily relate to services that have been invoiced, but services have not yet been provided. Short-term deferred revenues are expected to be recognized within the next twelve months. Long-term deferred revenues substantially consist of deferred revenues on long-term technical and SaaS and Expert Services contracts which have been invoiced and are expected to be recognized as revenue beyond twelve months, generally not more than ten years . The Company generally invoices customers for products upon shipment. Invoicing associated with the service portion of agreements is generally periodic and is billed on a monthly, quarterly, or annual basis, and in certain circumstances, multiple years are billed at one time. SaaS and Expert Services agreements are generally invoiced periodically on a monthly, quarterly or annual basis over the life of the agreement. In certain circumstances portions of these agreements may be invoiced lump sum.
In addition, the Company has remaining performance obligations associated with contracts for which the associated products have been accepted or associated services have started, but where invoicing has not yet occurred and therefore are not reflected in deferred revenue. These remaining performance obligations are comprised of the non-variable portions of technical services and SaaS and Expert Services provided under non-cancellable contracts with minimum commitments. Remaining performance obligations which are not included in deferred revenues were $390.4 million as of March 31, 2025. Remaining performance obligations are expected to be recognized ratably over the remaining terms of the associated contracts, which terms vary but are generally not more than ten years . Remaining performance obligations do not include product obligations, services where the associated product has not been accepted, services which have not yet started, variable portions of services, and certain other obligations.
Significant Customers
There were no customers that accounted for more than 10% of the Company’s total revenues for the three months ended March 31, 2025 and 2024. Also, there were no customers that accounted for more than 10% of the Company’s accounts receivable and unbilled receivables balance as of March 31, 2025 and December 31, 2024.
Note 4. Net Loss Per Share
Basic net income (loss) per share is computed by dividing net income (loss) for the period by the weighted-average number of shares outstanding during the period. In periods of net loss, all potential common shares are anti-dilutive, so diluted net loss per share equals the basic net loss per share. In periods of net income, diluted net income per share is computed by dividing net income for the period by the basic weighted-average number of shares plus any dilutive potential common stock outstanding during the period, using the treasury stock method for share-based awards and warrants, and the if-converted method for convertible senior notes. Potential common stock includes the effect of outstanding dilutive stock options, restricted stock awards, and restricted stock units, as well as shares the Company could be obligated to issue from its convertible senior notes and warrants, as described in Note 11, Convertible Senior Notes. In the event of the conversion of the Company’s convertible senior notes, the principal portion will be settled in cash with any conversion consideration in excess of the principal portion settled in cash and/or shares of the Company’s common stock at the Company’s option, therefore, only the amounts expected to be settled in excess of the principal portion are considered dilutive in calculating earnings per share under the if-converted method. Any anti-dilutive weighted-average dilutive shares related to stock award plans, convertible senior notes, and warrants are excluded from the computation of the diluted net income per share.
The basic and diluted net loss per share calculations were as follows:
| Three Months Ended March 31, | |||||||||||||||||||||||
| 2025 | 2024 | ||||||||||||||||||||||
| (In thousands, except per share data) | |||||||||||||||||||||||
| Net loss | $ | ( | $ | ( | |||||||||||||||||||
| Weighted-average shares outstanding – basic and diluted | |||||||||||||||||||||||
| Net loss per share – basic and diluted | $ | ( | $ | ( | |||||||||||||||||||
| Anti-dilutive weighted-average shares related to stock award plans | |||||||||||||||||||||||
| Anti-dilutive weighted-average shares related to convertible senior notes and warrants | |||||||||||||||||||||||
Note 5. Cash and Cash Equivalents and Fair Value of Financial Instruments
Cash and cash equivalents of $386.8 million and $369.2 million as of March 31, 2025 and December 31, 2024, respectively, consisted of bank accounts and highly-liquid U.S. Government money market funds held in sweep and asset
13
management accounts with financial institutions of high credit quality. As of March 31, 2025 and December 31, 2024, cash equivalents were $341.6 million and $328.0 million, respectively, which consisted of money market funds held in sweep and asset management accounts. The Company recorded interest income on its cash and cash equivalents of $3.6 million and $6.0 million for the three months ended March 31, 2025 and 2024, respectively, which is included within interest and other income (expense), net in the Condensed Consolidated Statements of Operations.
Fair Value Hierarchy
The following table summarizes the carrying amounts, net of unamortized debt issuance costs, and fair values of the convertible senior notes:
| March 31, 2025 | December 31, 2024 | ||||||||||
| (In thousands) | |||||||||||
| Net carrying amount: | |||||||||||
| 2025 Notes | |||||||||||
| 2029 Notes | |||||||||||
| Total net carrying amount | $ | $ | |||||||||
| Fair value: | |||||||||||
| 2025 Notes | $ | $ | |||||||||
| 2029 Notes | |||||||||||
| Total fair value | $ | $ | |||||||||
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Note 6. Balance Sheet Components
Balance sheet details are presented in the tables below:
| March 31, 2025 | December 31, 2024 | ||||||||||
| (In thousands) | |||||||||||
| Inventories: | |||||||||||
| Raw materials | $ | $ | |||||||||
| Work in process | |||||||||||
| Finished goods | |||||||||||
| Total inventories | $ | $ | |||||||||
Funds held for customers, including restricted cash (1) | $ | $ | |||||||||
| Deferred cost of sales | |||||||||||
| Net investment in sales-type leases, current portion | |||||||||||
| Prepaid income taxes | |||||||||||
| Other current assets | |||||||||||
| Total other current assets | $ | $ | |||||||||
| Other long-term assets: | |||||||||||
| External-use software development costs, net | $ | $ | |||||||||
| Unbilled receivables, net | |||||||||||
| Deferred debt issuance costs | |||||||||||
| Other long-term assets | |||||||||||
| Total other long-term assets | $ | $ | |||||||||
| Operating lease liabilities, current portion | $ | $ | |||||||||
| Customer fund liabilities | |||||||||||
| Advance payments from customers | |||||||||||
| Rebate liabilities | |||||||||||
| Taxes payable | |||||||||||
| Other accrued liabilities | |||||||||||
| Total accrued liabilities | $ | $ | |||||||||
(1) Includes restricted cash of $27.6 million and $29.4 million as of March 31, 2025 and December 31, 2024, respectively.
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The following table summarizes the changes in accumulated balances of other comprehensive income (loss), which consisted of foreign currency translation adjustments:
| Three Months Ended March 31, | |||||||||||||||||||||||
| 2025 | 2024 | ||||||||||||||||||||||
| (In thousands) | |||||||||||||||||||||||
| Beginning balance | $ | ( | $ | ( | |||||||||||||||||||
| Other comprehensive income (loss): | ( | ||||||||||||||||||||||
| Ending balance | $ | ( | $ | ( | |||||||||||||||||||
Note 7. Property and Equipment
The following table represents the property and equipment balances:
| March 31, 2025 | December 31, 2024 | ||||||||||
| (In thousands) | |||||||||||
| Equipment | $ | $ | |||||||||
| Furniture and fixtures | |||||||||||
| Leasehold improvements | |||||||||||
| Purchased software and internal-use software development costs | |||||||||||
| Construction in progress | |||||||||||
| Property and equipment, gross | |||||||||||
| Accumulated depreciation and amortization | ( | ( | |||||||||
| Total property and equipment, net | $ | $ | |||||||||
Depreciation and amortization expense of property and equipment was $8.6
The geographic location of the Company’s property and equipment, net, is based on the physical location in which it is located. The following table summarizes the geographic information for property and equipment, net:
| March 31, 2025 | December 31, 2024 | ||||||||||
| (In thousands) | |||||||||||
| United States | $ | $ | |||||||||
Rest of world | |||||||||||
| Total property and equipment, net | $ | $ | |||||||||
Note 8. External-Use Software Development Costs
The carrying amounts of external-use software development costs were as follows:
| March 31, 2025 | December 31, 2024 | ||||||||||
| (In thousands) | |||||||||||
| Gross carrying amount | $ | $ | |||||||||
| Accumulated amortization | ( | ( | |||||||||
External-use software development costs, net (1) | $ | $ | |||||||||
_________________________________________________
(1) Included in other long-term assets in the Condensed Consolidated Balance Sheets.
The Company recorded $5.7 million and $6.7 million to cost of product revenues for amortization of external-use software development costs for the three months ended March 31, 2025 and 2024, respectively.
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The estimated future amortization expenses for external-use software development costs were as follows:
| March 31, 2025 | |||||
| (In thousands) | |||||
| Remaining nine months of 2025 | $ | ||||
| 2026 | |||||
| 2027 | |||||
| 2028 | |||||
| 2029 | |||||
| Thereafter | |||||
| Total | $ | ||||
Note 9. Goodwill and Intangible Assets
Goodwill
The following table represents changes in the carrying amount of goodwill:
| (In thousands) | |||||||||||||||||
| Balance as of December 31, 2024 | $ | ||||||||||||||||
| Foreign currency exchange rate fluctuations | |||||||||||||||||
| Balance as of March 31, 2025 | $ | ||||||||||||||||
Intangible Assets, Net
The carrying amounts and useful lives of intangible assets were as follows:
| March 31, 2025 | |||||||||||||||||||||||||||||
Gross carrying amount (1) | Accumulated amortization | Foreign currency exchange rate fluctuations | Net carrying amount | Useful life (years) | |||||||||||||||||||||||||
| (In thousands, except for years) | |||||||||||||||||||||||||||||
| Customer relationships | $ | $ | ( | $ | ( | $ | |||||||||||||||||||||||
| Acquired technology | ( | ||||||||||||||||||||||||||||
| Trade names | ( | ||||||||||||||||||||||||||||
| Patents | ( | ||||||||||||||||||||||||||||
Total intangible assets, net | $ | $ | ( | $ | ( | $ | |||||||||||||||||||||||
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| December 31, 2024 | |||||||||||||||||||||||||||||
Gross carrying amount (1) | Accumulated amortization | Foreign currency exchange rate fluctuations | Net carrying amount | Useful life (years) | |||||||||||||||||||||||||
| (In thousands, except for years) | |||||||||||||||||||||||||||||
| Customer relationships | $ | $ | ( | $ | ( | $ | |||||||||||||||||||||||
| Acquired technology | ( | ||||||||||||||||||||||||||||
| Trade names | ( | ||||||||||||||||||||||||||||
| Patents | ( | ||||||||||||||||||||||||||||
Total intangible assets, net | $ | $ | ( | $ | ( | $ | |||||||||||||||||||||||
_________________________________________________
(1) The differences in gross carrying amounts between periods are primarily due to the write-off of certain fully amortized intangible assets.
Amortization expense of intangible assets was $5.8 million and $6.0 million for the three months ended March 31, 2025 and 2024, respectively.
The estimated future amortization expenses for amortizable intangible assets were as follows:
| March 31, 2025 | |||||
| (In thousands) | |||||
| Remaining nine months of 2025 | $ | ||||
| 2026 | |||||
| 2027 | |||||
| 2028 | |||||
| 2029 | |||||
| Thereafter | |||||
| Total | $ | ||||
Note 10. Debt and Credit Agreement
On November 15, 2019, Omnicell, Inc. entered into an Amended and Restated Credit Agreement (as amended, the “Prior A&R Credit Agreement”) with the lenders from time to time party thereto, Wells Fargo Securities, LLC, Citizens Bank, N.A., and JPMorgan Chase Bank, N.A., as joint lead arrangers, and Wells Fargo Bank, National Association, as administrative agent. As referred to in this Note 10, “Omnicell, Inc.” refers only to Omnicell, Inc., excluding its subsidiaries. The Prior A&R Credit Agreement provided for (a) a five-year revolving credit facility of $500.0 million (the “Prior Revolving Credit Facility”) and (b) an uncommitted incremental loan facility of up to $250.0 million (the “Prior Incremental Facility”). In addition, the Prior A&R Credit Agreement included a letter of credit sub-limit of up to $15.0 million and a swing line loan sub-limit of up to $25.0 million. The Prior A&R Credit Agreement was subsequently amended on September 22, 2020 and March 29, 2023, to permit the issuance of the convertible senior notes and the purchase of the convertible note hedge transactions (as described in Note 11, Convertible Senior Notes), expand the Company’s flexibility to make restricted payments (including common stock repurchases), and replace the total net leverage covenant, as well as to remove and replace the interest rate benchmark based on the London interbank offered rate (“LIBOR”) and related LIBOR-based mechanics with an interest rate benchmark based on the secured overnight financing rate (“SOFR”) as administered by the Federal Reserve Bank of New York and related SOFR-based mechanics.
Omnicell, Inc. entered into a Second Amended and Restated Credit Agreement (the “Second A&R Credit Agreement”) on October 10, 2023, with the lenders from time to time party thereto, Wells Fargo Securities, LLC, JPMorgan Chase Bank, N.A., PNC Capital Markets LLC and TD Securities (USA) LLC as joint lead arrangers and Wells Fargo Bank, National Association, as administrative agent. The Second A&R Credit Agreement supersedes the Prior A&R Credit Agreement and provides for (a) a five-year revolving credit facility of $350.0 million (the “Current Revolving Credit Facility”) and (b) an uncommitted incremental loan facility of up to an amount equal to the sum of (i) the greater of $250.0 million and 100 % of the adjusted consolidated EBITDA for the last four quarters and (ii) additional amounts subject to pro forma compliance with certain consolidated secured net leverage ratio (the “Current Incremental Facility”). In addition, the Second A&R Credit Agreement includes a letter of credit sub-limit of up to $15.0 million and a swing line loan sub-limit of up to $25.0 million. The
18
Second A&R Credit Agreement has an expiration date of October 10, 2028, subject to acceleration under certain conditions, upon which date all remaining outstanding borrowings will be due and payable.
Loans under the Current Revolving Credit Facility bear interest, at Omnicell, Inc.’s option, at a rate equal to either (a) the Adjusted Term SOFR (as defined in the Second A&R Credit Agreement), plus an applicable margin ranging from 1.50 % to 2.25 % per annum based on the Company’s Consolidated Total Net Leverage Ratio (as defined in the Second A&R Credit Agreement), or (b) an alternate base rate equal to the highest of (i) the prime rate, (ii) the federal funds rate plus 0.50 %, and (iii) the Adjusted Term SOFR for an interest period of one month plus 1.00 %, plus an applicable margin ranging from 0.50 % to 1.25 % per annum based on the Company’s Consolidated Total Net Leverage Ratio. Undrawn commitments under the Current Revolving Credit Facility are subject to a commitment fee ranging from 0.20 % to 0.35 % per annum based on the Company’s Consolidated Total Net Leverage Ratio on the average daily unused portion of the Current Revolving Credit Facility. Subject to the terms and conditions of the Current Revolving Credit Facility or Current Incremental Facility Omnicell, Inc. is permitted to make voluntary prepayments at any time without payment of a premium or penalty. The availability of funds under the Current Revolving Credit Facility may be subject to reduction in order to maintain compliance with the financial covenants under the Second A&R Credit Agreement.
The Second A&R Credit Agreement contains customary representations and warranties and customary affirmative and negative covenants applicable to the Company, including, among other things, restrictions on indebtedness, liens, investments, mergers, dispositions, dividends, and other distributions. The Second A&R Credit Agreement contains financial covenants that require the Company to not exceed a maximum consolidated secured net leverage ratio (not to exceed 3.00 :1) and maintain a minimum consolidated interest coverage ratio (not to be less than 3.00 :1). In addition, the Second A&R Credit Agreement contains certain customary events of default including, but not limited to, failure to pay interest, principal, and fees, or other amounts when due, material misrepresentations or misstatements in any representation or warranty, covenant defaults, certain cross defaults to other material indebtedness, certain judgment defaults, and events of bankruptcy.
Omnicell, Inc.’s obligations under the Second A&R Credit Agreement and, at the election of Omnicell, Inc. and the contracting counterparty, any secured swap obligations and banking services obligations owing to a lender (or an affiliate of a lender) are guaranteed by certain of its domestic subsidiaries and secured by substantially all of its and such subsidiary guarantors’ assets. In connection with entering into the Second A&R Credit Agreement, and as a condition precedent to borrowing loans thereunder, Omnicell, Inc. and certain of Omnicell, Inc.’s other direct and indirect subsidiaries have entered into certain ancillary agreements, including, but not limited to, a reaffirmation agreement, which amends certain terms of the existing collateral agreement and reaffirms their obligations under the existing guaranty agreement.
On November 18, 2024, Omnicell, Inc., as borrower, entered into a First Amendment to Second Amended and Restated Credit Agreement (the “Amendment”) with the lenders party thereto from time to time, and Wells Fargo Bank, National Association, as administrative agent for the lenders. Pursuant to the Amendment, effective as of November 19, 2024, the springing maturity for the revolving credit facility that is tied to the outstanding principal amount of Omnicell, Inc.’s existing 0.25 % Convertible Senior Notes due 2025 (the “2025 Notes”) will apply only if more than $200 million in the aggregate principal amount of Omnicell, Inc.’s 2025 Notes remain outstanding as of 91 days prior to the maturity date of the 2025 Notes.
As of both March 31, 2025 and December 31, 2024, the Company had $350.0 no
Note 11. Convertible Senior Notes
On September 25, 2020, Omnicell, Inc. completed a private offering of $575.0 million aggregate principal amount of 0.25 % convertible senior notes (the “2025 Notes”), including the exercise in full of the initial purchasers’ option to purchase up to an additional $75.0 million principal amount of the 2025 Notes. As referred to in this Note 11, “Omnicell, Inc.” or the “Company” refers only to Omnicell, Inc., excluding its subsidiaries. Omnicell, Inc. received proceeds from the issuance of the 2025 Notes of $559.7 million, net of $15.3 million of transaction fees and other debt issuance costs. The 2025 Notes bear interest at a rate of 0.25 % per year, payable semiannually in arrears on March 15 and September 15 of each year, beginning on March 15, 2021. The 2025 Notes were issued pursuant to an indenture, dated September 25, 2020 (the “2025 Notes Indenture”), between the Company and U.S. Bank National Association, as trustee. The 2025 Notes are general senior, unsecured obligations of the Company and will mature on September 15, 2025, unless earlier redeemed, repurchased, or converted.
The 2025 Notes are convertible at any time prior to the close of business on the business day immediately preceding May 15, 2025, only under the following circumstances: (i) during any fiscal quarter commencing after the fiscal quarter ended on December 31, 2020 (and only during such fiscal quarter), if the last reported sale price of the Company’s common stock for
19
at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding fiscal quarter is greater than or equal to 130 % of the conversion price for the 2025 Notes on each applicable trading day; (ii) during the five business day period after any ten consecutive trading day period (the “measurement period”) in which the trading price (as defined in the 2025 Notes Indenture) per $1,000 principal amount of the 2025 Notes for each trading day of the measurement period was less than 98 % of the product of the last reported sale price of the Company’s common stock and the conversion rate for the 2025 Notes on each such trading day; (iii) if the Company calls such 2025 Notes for redemption, at any time prior to the close of business on the scheduled trading day immediately preceding the redemption date, but only with respect to the 2025 Notes called (or deemed called) for redemption; or (iv) upon the occurrence of specified corporate events, as specified in the 2025 Notes Indenture. On or after May 15, 2025 until the close of business on the second scheduled trading day immediately preceding the maturity date, holders of the 2025 Notes may convert all or any portion of their 2025 Notes at any time, regardless of the foregoing conditions.
During the three months ended March 31, 2025 and December 31, 2024, none of the conditional conversion features of the 2025 Notes were triggered, and therefore, the 2025 Notes are not convertible during the second quarter of 2025, commencing on April 1, 2025, and were not convertible during the first quarter of 2025, commencing on January 1, 2025. As the 2025 Notes will mature on September 15, 2025, the Company classified the 2025 Notes as a current liability in its Condensed Consolidated Financial Statements as of both March 31, 2025 and December 31, 2024.
Under the original terms of the 2025 Notes Indenture, upon conversion, the Company could satisfy its conversion obligation by paying or delivering cash, shares of its common stock, or a combination thereof, at the Company’s election, in the manner and subject to the terms and conditions provided in the 2025 Notes Indenture. On December 13, 2021, the Company irrevocably elected to fix its settlement method to a combination of cash and shares of the Company’s common stock with the specified cash amount per $1,000 principal amount of 2025 Notes of at least $1,000 . As a result, for 2025 Notes converted on or after December 13, 2021, a converting noteholder will receive (i) up to $1,000 in cash per $1,000 principal amount of 2025 Notes and (ii) cash and/or shares of the Company’s common stock, at the Company’s option for any conversion consideration in excess of $1,000 . In addition, the Company continues to have the ability to set the specified cash amount per $1,000 principal amount of 2025 Notes above $1,000 . The initial conversion rate for the 2025 Notes is 10.2751 shares of the Company’s common stock per $1,000 principal amount of 2025 Notes, which is equivalent to an initial conversion price of approximately $97.32 per share of the Company’s common stock, subject to adjustment under certain circumstances in accordance with the terms of the 2025 Notes Indenture. In addition, following certain corporate events that could occur prior to the maturity date of the 2025 Notes or if the Company delivers a notice of redemption in respect of the 2025 Notes, the Company will, under certain circumstances, increase the conversion rate of the 2025 Notes for a holder who elects to convert its 2025 Notes (or any portion thereof) in connection with such a corporate event or convert its 2025 Notes called (or deemed called) for redemption during the related redemption period (as defined in the 2025 Notes Indenture), as the case may be.
If the Company undergoes a fundamental change, holders may require, subject to certain exceptions, the Company to repurchase for cash all or any portion of their 2025 Notes at a fundamental change repurchase price equal to 100 % of the principal amount of the 2025 Notes to be repurchased, plus accrued and unpaid interest to, but excluding, the fundamental change repurchase date. As of March 31, 2025, none of the criteria for a fundamental change or a conversion rate adjustment had been met.
As of March 31, 2025, the Company may redeem for cash all or any portion of the 2025 Notes, at its option, if the last reported sale price of the Company’s common stock has been at least 130 % of the conversion price for the 2025 Notes then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period (including the last trading day of such period) ending on, and including, the trading day immediately preceding the date on which the Company provides notice of redemption at a redemption price equal to 100 % of the principal amount of the 2025 Notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date. If the Company redeems less than all of the outstanding 2025 Notes, at least $150.0 million aggregate principal amount of the 2025 Notes must be outstanding and not subject to redemption as of the date of the relevant notice of redemption. No sinking fund is provided for in the 2025 Notes.
Partial Repurchase of the 2025 Notes
In November 2024, the Company entered into separate, privately negotiated transactions with certain holders of the 2025 Notes to repurchase $400.0 million of aggregate principal amount of the 2025 Notes for approximately $391.0 million of cash. The Company accounted for the partial repurchase of 2025 Notes as a debt extinguishment and recorded a $7.2 million gain on extinguishment, which included a partial write-off of previously deferred debt issuance costs of $1.8 million during the three months ended December 31, 2024.
The debt issuance costs associated with the remaining 2025 Notes are being amortized to interest expense over the term of the 2025 Notes using an effective interest rate of 0.80 %. As of March 31, 2025, the remaining life of the 2025 Notes and the related issuance cost accretion is approximately 0.5 years.
20
Following the partial repurchase of the 2025 Notes, the maximum number of shares issuable upon conversion, including the effect of a fundamental change and subject to other conversion rate adjustments, would be 1.8 million shares. As of March 31, 2025, the if-converted value of the 2025 Notes did not exceed the principal amount.
On November 22, 2024, Omnicell, Inc. completed a private offering of $172.5 million aggregate principal amount of 1.00 % Convertible Senior Notes due 2029 (the “2029 Notes”), including the exercise in full of the initial purchasers’ option to purchase up to an additional $22.5 million aggregate principal amount of the 2029 Notes. Omnicell, Inc. received proceeds from the issuance of the 2029 Notes of $166.3 million, net of $6.2 million of transaction fees and other debt issuance costs. The 2029 Notes bear interest at a rate of 1.00 % per year, payable semiannually in arrears on June 1 and December 1 of each year, beginning on June 1, 2025. The 2029 Notes were issued pursuant to an indenture, dated November 22, 2024 (the “2029 Notes Indenture”), between the Company and U.S. Bank Trust Company, National Association, as trustee. The 2029 Notes are general senior, unsecured obligations of the Company and will mature on December 1, 2029, unless earlier redeemed, purchased, or converted.
The 2029 Notes are convertible at any time prior to the close of business on the business day immediately preceding August 1, 2029, only under the following circumstances: (i) during any fiscal quarter commencing after the fiscal quarter ending on March 31, 2025 (and only during such fiscal quarter), if the last reported sale price of the Company’s common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding fiscal quarter is greater than or equal to 130 % of the conversion price for the 2029 Notes on each applicable trading day; (ii) during the five business day period after any ten consecutive trading day period (the “measurement period”) in which the “trading price” (as defined in the 2029 Notes Indenture) per $1,000 principal amount of the 2029 Notes for each trading day of the measurement period was less than 98 % of the product of the last reported sale price of the Company’s common stock and the conversion rate for the 2029 Notes on each such trading day; (iii) if the Company calls such 2029 Notes for redemption, at any time prior to the close of business on the scheduled trading day immediately preceding the redemption date, but only with respect to the 2029 Notes called (or deemed called) for redemption; or (iv) upon the occurrence of specified corporate events as set forth in the 2029 Notes Indenture. On or after August 1, 2029 until the close of business on the second scheduled trading day immediately preceding the maturity date, holders of the 2029 Notes may convert all or any portion of their 2029 Notes at any time, regardless of the foregoing conditions.
During the three months ended March 31, 2025 and December 31, 2024, none of the conditional conversion features of the 2029 Notes were triggered, and therefore, the 2029 Notes are not convertible during the second quarter of 2025, commencing on April 1, 2025, and were not convertible during the first quarter of 2025, commencing on January 1, 2025.
Upon conversion, the Company will pay cash up to the aggregate principal amount of the 2029 Notes to be converted and pay or deliver, as the case may be, cash, shares of the Company’s common stock or a combination of cash and shares of the Company’s common stock, at the Company’s election, in respect to the remainder, if any, of the Company’s conversion obligation in excess of the aggregate principal amount of the 2029 Notes being converted, in the manner and subject to the terms and conditions provided in the 2029 Notes Indenture.
The initial conversion rate for the 2029 Notes is 17.4662 shares of the Company’s common stock per $1,000 principal amount of the 2029 Notes, which is equivalent to an initial conversion price of approximately $57.25 per share of the Company’s common stock, subject to adjustment under certain circumstances in accordance with the terms of the 2029 Notes Indenture. In addition, following certain corporate events that occur prior to the maturity date of the 2029 Notes or if the Company delivers a notice of redemption in respect of the 2029 Notes, the Company will, under certain circumstances, increase the conversion rate of the 2029 Notes for a holder who elects to convert its 2029 Notes (or any portion thereof) in connection with such a corporate event or convert its 2029 Notes called (or deemed called) for redemption during the related redemption period (as defined in the 2029 Notes Indenture), as the case may be.
If the Company undergoes a fundamental change (as defined in the 2029 Notes Indenture), holders may require, subject to certain exceptions, the Company to repurchase for cash all or any portion of their 2029 Notes at a fundamental change repurchase price equal to 100 % of the principal amount of the 2029 Notes to be repurchased, plus accrued and unpaid interest to, but excluding, the fundamental change repurchase date. As of March 31, 2025, none of the criteria for a fundamental change or a conversion rate adjustment had been met.
The Company may not redeem the 2029 Notes prior to December 6, 2027. The Company may redeem for cash all or any portion of the 2029 Notes, at its option, on or after December 6, 2027, if the last reported sale price of the Company’s common stock has been at least 130 % of the conversion price for the 2029 Notes then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period (including the last trading day of such period) ending on, and including, the trading day immediately preceding the date on which the Company provides notice of redemption
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at a redemption price equal to 100 % of the principal amount of the 2029 Notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date. The Company may not redeem less than all of the outstanding 2029 Notes unless at least $100.0 million aggregate principal amount of 2029 Notes are outstanding and not called for redemption as of the time the Company sends the related notice of redemption. No sinking fund is provided for in the 2029 Notes.
The debt issuance costs associated with the 2029 Notes are being amortized to interest expense over the term of the 2029 Notes using an effective interest rate of 1.75 %. As of March 31, 2025, the remaining life of the 2029 Notes and the related issuance cost accretion is approximately 4.7 years.
The maximum number of shares issuable upon conversion, including the effect of a fundamental change and subject to other conversion rate adjustments, would be 3.0 million shares. As of March 31, 2025, the if-converted value of the 2029 Notes did not exceed the principal amount.
The 2025 Notes and the 2029 Notes consisted of the following balances:
| March 31, 2025 | December 31, 2024 | ||||||||||
| (In thousands) | |||||||||||
| 2025 Notes: | |||||||||||
| Principal amount | $ | $ | |||||||||
| Unamortized debt issuance costs | ( | ( | |||||||||
| Convertible senior notes, net, current | $ | $ | |||||||||
| 2029 Notes: | |||||||||||
| Principal amount | $ | $ | |||||||||
| Unamortized debt issuance costs | ( | ( | |||||||||
| Convertible senior notes, net, noncurrent | $ | $ | |||||||||
The following table summarizes the components of interest expense resulting from the 2025 Notes and the 2029 Notes recognized in interest and other income (expense), net in the Condensed Consolidated Statements of Operations:
| Three Months Ended March 31, | |||||||||||||||||||||||
| 2025 | 2024 | ||||||||||||||||||||||
| (In thousands) | |||||||||||||||||||||||
| Contractual coupon interest: | |||||||||||||||||||||||
| 2025 Notes | $ | $ | |||||||||||||||||||||
| 2029 Notes | |||||||||||||||||||||||
| Amortization of debt issuance costs: | |||||||||||||||||||||||
| 2025 Notes | $ | $ | |||||||||||||||||||||
| 2029 Notes | |||||||||||||||||||||||
Convertible Note Hedge and Warrant Transactions
In connection with the issuance of the 2025 Notes in September 2020 and the 2029 Notes in November 2024, the Company entered into convertible note hedges and warrants transactions, respectively, with certain initial purchasers of the 2025 Notes and the 2029 Notes or affiliates thereof and certain other financial institutions (the “option counterparties”).
The convertible note hedges related to the 2025 Notes consisted of call options for the Company to purchase, subject to anti-dilution adjustments substantially similar to those applicable to the 2025 Notes, up to approximately 5.9 million shares of the Company’s common stock, which is equal to the number of shares of the Company’s common stock underlying the 2025 Notes at the time of its issuance, at an initial strike price of approximately $97.32 per share. The convertible note hedges related to the 2029 Notes consisted of call options for the Company to purchase up to, subject to anti-dilution adjustments substantially similar to those applicable to the 2029 Notes, approximately 3.0 million shares of the Company’s common stock, which is equal to the number of shares of the Company’s common stock underlying the 2029 Notes at the time of its issuance, at an initial strike price of approximately $57.25 per share. The convertible note hedges will expire upon the maturity of the respective convertible notes, if not earlier exercised or terminated. The cost of the convertible note hedges related to the 2025 Notes and
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the 2029 Notes was approximately $100.6 million and $40.3 million, respectively, and each was accounted for as an equity instrument, each of which was recorded in additional paid-in capital in the Condensed Consolidated Balance Sheets. In addition, the Company recorded a deferred tax asset of $25.8 million and $10.2 million, respectively, at issuance related to the convertible note hedges for the 2025 Notes and the 2029 Notes. The convertible note hedges are expected generally to reduce the potential dilution to the Company’s common stock upon any conversion of the 2025 Notes or the 2029 Notes and/or offset any cash payments the Company may be required to make in excess of the principal amount of the converted 2025 Notes or the 2029 Notes.
Separately from the convertible note hedges, in September 2020 and November 2024, the Company entered into warrant transactions to sell to the respective option counterparties warrants to acquire, subject to customary anti-dilution adjustments, up to approximately 5.9 million shares of its common stock at an initial strike price of approximately $141.56 and approximately 3.0 million shares of its common stock at an initial strike price of approximately $84.82 per share related to the 2025 Notes and the 2029 Notes, respectively. The warrants require net share or net cash settlement upon the Company’s election. The Company received aggregate proceeds of approximately $51.3 million and $25.2 million for the issuance of the warrants related to the 2025 Notes and the 2029 Notes, respectively, which was recorded in additional paid-in capital at issuance in the Condensed Consolidated Balance Sheets. The warrants could separately have a dilutive effect to the Company’s common stock to the extent that the market price per share of its common stock, as measured under the warrants, exceeds the strike price of the warrants.
Note 12. Lessor Leases
Sales-Type Leases
The Company enters into non-cancelable sales-type lease arrangements with the leases varying in length from to ten years . The Company optimizes cash flows by selling a majority of its sales-type leases, other than those relating to U.S. government hospitals and SaaS and Expert Services products, including Central Pharmacy Dispensing Service and IV Compounding Service, to third-party leasing finance companies on a non-recourse basis. The Company generally has no obligation to the leasing company once the lease has been sold.
The following table presents the Company’s income recognized from sales-type leases:
| Three Months Ended March 31, | |||||||||||||||||||||||
| 2025 | 2024 | ||||||||||||||||||||||
| (In thousands) | |||||||||||||||||||||||
| Sales-type lease revenues | $ | $ | |||||||||||||||||||||
| Cost of sales-type lease revenues | ( | ( | |||||||||||||||||||||
| Selling profit on sales-type lease revenues | $ | $ | |||||||||||||||||||||
The receivables as a result of these types of transactions are collateralized by the underlying equipment leased and consist of the following components:
| March 31, 2025 | December 31, 2024 | ||||||||||
| (In thousands) | |||||||||||
| Net minimum lease payments to be received | $ | $ | |||||||||
| Less: Unearned interest income portion | ( | ( | |||||||||
| Net investment in sales-type leases | |||||||||||
Less: Current portion (1) | ( | ( | |||||||||
| Long-term investment in sales-type leases, net | $ | $ | |||||||||
(1) The current portion of the net investment in sales-type leases is included in other current assets in the Condensed Consolidated Balance Sheets.
The carrying amount of the Company’s sales-type lease receivables is a reasonable estimate of fair value.
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The maturity schedule of future minimum lease payments under sales-type leases retained in-house and the reconciliation to the net investment in sales-type leases reported on the Condensed Consolidated Balance Sheets was as follows:
| March 31, 2025 | |||||
| (In thousands) | |||||
| Remaining nine months of 2025 | $ | ||||
| 2026 | |||||
| 2027 | |||||
| 2028 | |||||
| 2029 | |||||
| Thereafter | |||||
| Total future minimum sales-type lease payments | |||||
| Present value adjustment | ( | ||||
| Total net investment in sales-type leases | $ | ||||
Note 13. Lessee Leases
The Company has operating leases for office buildings, data centers, office equipment, and vehicles. The Company’s leases have initial terms of to twelve years . As of March 31, 2025, the Company did not have any additional material operating leases that were entered into, but not yet commenced.
The maturity schedule of future minimum lease payments under operating leases and the reconciliation to the operating lease liabilities reported on the Condensed Consolidated Balance Sheets was as follows:
| March 31, 2025 | |||||
| (In thousands) | |||||
| Remaining nine months of 2025 | $ | ||||
| 2026 | |||||
| 2027 | |||||
| 2028 | |||||
| 2029 | |||||
| Thereafter | |||||
| Total operating lease payments | |||||
| Present value adjustment | ( | ||||
Total operating lease liabilities (1) | $ | ||||
_________________________________________________
(1) Amount consists of a current and long-term portion of operating lease liabilities of $11.5 million and $33.0 million, respectively. The current portion of the operating lease liabilities is included in in the Condensed Consolidated Balance Sheets.
Operating lease costs were $2.4 million and $2.6 million for the three months ended March 31, 2025 and 2024, respectively. Short-term lease costs and variable lease costs were not material for the three months ended March 31, 2025 and 2024.
The following table summarizes supplemental cash flow information related to the Company’s operating leases:
| Three Months Ended March 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| (In thousands) | |||||||||||
| Cash paid for amounts included in the measurement of lease liabilities | $ | $ | |||||||||
| Right-of-use assets obtained in exchange for new lease liabilities | $ | $ | |||||||||
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The following table summarizes the weighted-average remaining lease term and weighted-average discount rate related to the Company’s operating leases:
| March 31, 2025 | December 31, 2024 | ||||||||||
| Weighted-average remaining lease term, years | |||||||||||
| Weighted-average discount rate, % | % | % | |||||||||
Note 14. Commitments and Contingencies
Purchase Obligations
In the ordinary course of business, the Company issues purchase orders based on its current manufacturing needs. As of March 31, 2025, the Company had non-cancelable purchase commitments of $129.3 million, of which $109.1 million are expected to be paid within the year ending December 31, 2025.
Legal Proceedings
The Company is currently involved in various legal proceedings.
In December 2023, Omnicell received a civil request for records issued by the U.S. Attorney’s Office for the Eastern District of Washington (the “Government”) related to the Company’s compliance with the pricing terms and conditions of its previous Federal Supply Schedule (“FSS”) contract with the federal government. In December 2024, the Government presented information identifying certain potential non-compliances with the FSS contract and associated potential violations of the False Claims Act. On May 5, 2025, Omnicell entered into a settlement agreement with the Government to resolve this matter. The settlement, which will require payment of approximately $4.6 million to cover damages and other statutorily provided amounts under the False Claims Act, settles the matter without admission of liability.
As required under ASC 450, Contingencies, the Company accrues for contingencies when it believes that a loss is probable and that it can reasonably estimate the amount of any such loss. The Company has not recorded any material accrual for contingent liabilities associated with any other current legal proceedings based on its belief that any potential material loss, while reasonably possible, is not probable. Furthermore, any possible range of loss in these matters either cannot be reasonably estimated at this time or is not deemed material. The Company believes that it has valid defenses with respect to legal proceedings pending against it. However, litigation is inherently unpredictable, and it is possible that cash flows or results of operations could be materially affected in any particular period by the unfavorable resolution of legal proceedings or because of the diversion of management’s attention and the creation of significant expenses, regardless of outcome.
The Company is not a party to any legal proceedings that management believes may have a material impact on the Company’s financial position or results of operations.
Note 15. Income Taxes
The Company generally provides for income taxes in interim periods based on the estimated annual effective tax rate for the year, adjusting for discrete items in the quarter in which they arise. For the three months ended March 31, 2025 and March 31, 2024, the Company recorded a benefit from income taxes of $2.5 million and $2.2 million, respectively.
The effective tax rate for the three months ended March 31, 2025 differed from the statutory rate of 21% primarily due to the unfavorable impact of state taxes, non-deductible compensation and equity charges, partially offset by the favorable benefit of the research and development credits and a foreign-derived intangible income (“FDII”) benefit deduction. The effective tax rate for the three months ended March 31, 2024 differed from the statutory rate of 21% primarily due to the favorable benefit of the research and development credits and state income taxes, partially offset by the unfavorable impact of Global Intangible Low-Taxed Income (“GILTI”) inclusion and non-deductible compensation and equity charges.
The Organization for Economic Co-Operation and Development introduced Base Erosion and Profit Shifting Pillar Two rules that impose a global minimum tax rate of 15% on multi-national corporations. These rules did not have an impact on the Company’s provision for income taxes for the three months ended March 31, 2025.
As of March 31, 2025 and December 31, 2024, the Company had gross unrecognized tax benefits of $10.8 million and $10.5 million, respectively. The Company recognizes interest and penalties related to uncertain tax positions in interest and other income (expense), net in the Condensed Consolidated Statements of Operations. Accrued interest and penalties are included within other long-term liabilities on the Condensed Consolidated Balance Sheets. As of March 31, 2025 and December 31, 2024, the amount of accrued interest and penalties was $0.8 million and $0.6 million, respectively.
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The Company files income tax returns in the United States and various state and foreign jurisdictions. In the normal course of business, the Company is subject to examinations by taxing authorities, including major jurisdictions such as the United States, Germany, Italy, France, the United Kingdom, and India. With few exceptions, as of March 31, 2025, the Company was no longer subject to U.S., state, and foreign tax examinations for years before 2021, 2020, and 2020, respectively.
Although the Company believes it has adequately provided for unrecognized tax benefits, the provisions on these positions may change as revised estimates are made or the underlying matters are settled or otherwise resolved. It is not possible at this time to reasonably estimate changes in the unrecognized tax benefits within the next twelve months.
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Note 16. Employee Benefits and Share-Based Compensation
Share-Based Compensation Expense
The following table sets forth the total share-based compensation expense recognized in the Company’s Condensed Consolidated Statements of Operations:
| Three Months Ended March 31, | |||||||||||||||||||||||
| 2025 | 2024 | ||||||||||||||||||||||
| (In thousands) | |||||||||||||||||||||||
| Cost of product and service revenues | $ | $ | |||||||||||||||||||||
| Research and development | |||||||||||||||||||||||
| Selling, general, and administrative | |||||||||||||||||||||||
| Total share-based compensation expense | $ | $ | |||||||||||||||||||||
During the three months ended March 31, 2025 and 2024, the Company capitalized approximately $0.8 million and $0.7 million, respectively, of share-based compensation expense to internal-use and external-use software development costs related to internal labor. The Company did not capitalize any material share-based compensation expense to inventory during the three months ended March 31, 2025 and 2024.
Employee Stock Purchase Plan (“ESPP”)
The following assumptions were used to value shares under the ESPP for the three months ended March 31, 2025 and 2024:
| Three Months Ended March 31, | |||||||||||||||||||||||
| 2025 | 2024 | ||||||||||||||||||||||
| Expected life, years | |||||||||||||||||||||||
| Expected volatility, % | |||||||||||||||||||||||
| Risk-free interest rate, % | |||||||||||||||||||||||
| Dividend yield, % | % | % | |||||||||||||||||||||
For the three months ended March 31, 2025 and 2024, employees purchased approximately 335,000 and 334,000 shares of common stock, respectively, under the ESPP at a weighted-average price of $24.57 and $24.06 , respectively.
Stock Options
The following table summarizes the stock option activity under the 2009 Plan:
| Number of Shares | Weighted-Average Exercise Price | Weighted-Average Remaining Years | Aggregate Intrinsic Value | ||||||||||||||||||||
| (In thousands, except per share data) | |||||||||||||||||||||||
| Outstanding at December 31, 2024 | $ | $ | |||||||||||||||||||||
| Granted | |||||||||||||||||||||||
| Exercised | ( | ||||||||||||||||||||||
| Expired | ( | ||||||||||||||||||||||
| Forfeited | |||||||||||||||||||||||
| Outstanding at March 31, 2025 | $ | $ | |||||||||||||||||||||
| Exercisable at March 31, 2025 | $ | $ | |||||||||||||||||||||
| Vested and expected to vest at March 31, 2025 and thereafter | $ | $ | |||||||||||||||||||||
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Restricted Stock Units (“RSUs”)
The following table summarizes the RSU activity under the 2009 Plan:
| Number of Shares | Weighted-Average Grant Date Fair Value | Weighted-Average Remaining Years | Aggregate Intrinsic Value | ||||||||||||||||||||
| (In thousands, except per share data) | |||||||||||||||||||||||
| Outstanding at December 31, 2024 | $ | $ | |||||||||||||||||||||
| Granted | |||||||||||||||||||||||
| Vested | ( | ||||||||||||||||||||||
| Forfeited | ( | ||||||||||||||||||||||
| Outstanding and unvested at March 31, 2025 | $ | $ | |||||||||||||||||||||
As of March 31, 2025, total unrecognized compensation cost related to RSUs was $49.4 million, which is expected to be recognized over the remaining weighted-average vesting period of 2.8 years.
Performance-Based Stock Unit Awards (“PSUs”)
The following table summarizes the PSU activity under the 2009 Plan:
| Number of Shares | Weighted-Average Grant Date Fair Value | ||||||||||
| (In thousands, except per share data) | |||||||||||
| Outstanding at December 31, 2024 | $ | ||||||||||
| Granted (Awarded) | |||||||||||
| Additional granted based on performance achievement | |||||||||||
| Vested (Released) | ( | ||||||||||
| Forfeited | |||||||||||
| Outstanding and unvested at March 31, 2025 | $ | ||||||||||
As of March 31, 2025, total unrecognized compensation cost related to PSUs was approximately $5.6 million, which is expected to be recognized over the remaining weighted-average vesting period of 1.5 years.
Summary of Shares Reserved for Future Issuance under Equity Incentive Plans
The Company had the following ordinary shares reserved for future issuance under its equity incentive plans as of March 31, 2025:
| Number of Shares | |||||
| (In thousands) | |||||
| Stock options outstanding | |||||
| Non-vested restricted stock awards | |||||
| Shares authorized for future issuance | |||||
| ESPP shares available for future issuance | |||||
| Total shares reserved for future issuance | |||||
Stock Repurchase Programs
On August 2, 2016, the Company’s Board of Directors (the “Board”) authorized a stock repurchase program, which does not expire, providing for the repurchase of up to $50.0 million of the Company’s common stock (the “2016 Repurchase Program”). As of March 31, 2025, the maximum dollar value of shares that may yet be purchased under the 2016 Repurchase Program was $2.7 million.
The timing, price, and volume of repurchases are to be based on market conditions, relevant securities laws, and other factors. The stock repurchases may be made from time to time on the open market, in privately negotiated transactions, or
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pursuant to a Rule 10b-18 plan, subject to the terms and conditions of the Second A&R Credit Agreement, as amended. The 2016 Repurchase Program does not obligate the Company to repurchase any specific number of shares, and the Company may terminate or suspend the 2016 Repurchase Program at any time.
During the three months ended March 31, 2025 and 2024, the Company did no
Note 17. Restructuring Expenses
On April 26, 2024, the Company’s management committed to the wind down of the Company’s Medimat Robotic Dispensing System (“RDS”) product line, subject to local law and statutory works council consultation requirements. During the three months ended March 31, 2024, the Company incurred approximately $3.3 million of employee severance costs and other expenses related to the RDS product line wind down.
The following table summarizes the total employee-related restructuring expense recognized in the Company’s Condensed Consolidated Statements of Operations:
| Three Months Ended March 31, | |||||||||||||||||||||||
| 2024 | |||||||||||||||||||||||
| (In thousands) | |||||||||||||||||||||||
| Cost of product and service revenues | $ | ||||||||||||||||||||||
| Research and development | |||||||||||||||||||||||
| Selling, general, and administrative | |||||||||||||||||||||||
| Total restructuring expenses | $ | ||||||||||||||||||||||
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
FORWARD-LOOKING STATEMENTS AND FACTORS THAT MAY AFFECT FUTURE RESULTS
This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The forward-looking statements are contained throughout this Quarterly Report on Form 10-Q including in the sections entitled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” In some cases, you can identify forward-looking statements by terms such as “anticipates,” “believes,” “could,” “estimates,” “expects,” “forecasts,” “goals,” “intends,” “may,” “plans,” “potential,” “predicts,” “projects,” “seeks,” “should,” “target,” “will,” “would,” “vision,” and variations of these terms and similar expressions.
Forward-looking statements are based on our current expectations and assumptions, and are subject to known and unknown risks and uncertainties, many of which are beyond our control, which may cause our actual results, performance, or achievements to be materially different from those expressed or implied in the forward-looking statements. Such risks and uncertainties include those described throughout this Quarterly Report on Form 10-Q, including in Part I - Item 2 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and Part II - Item 1A. “Risk Factors,” as well as in our Annual Report on Form 10-K for the year ended December 31, 2024 filed with the U.S. Securities and Exchange Commission (“SEC”) on February 27, 2025. Given these risks and uncertainties, you are cautioned not to place undue reliance on these forward-looking statements. Forward-looking statements should be considered in light of these risks and uncertainties. You should carefully read this Quarterly Report on Form 10-Q and the documents that we reference in this Quarterly Report on Form 10-Q and have filed as exhibits, as well as other documents we file with, or furnish to, the U.S. Securities and Exchange Commission (“SEC”) from time to time, with the understanding that our actual future results may be materially different from what we expect. The forward-looking statements in this Quarterly Report on Form 10-Q represent our current estimates and assumptions and speak only as of the date of this Quarterly Report on Form 10-Q. Except as required by law, we assume no obligation to update any forward-looking statements publicly, or to update the reasons actual results could differ materially from those expressed or implied in any forward-looking statements, whether as a result of changed circumstances, future events, even if new information becomes available in the future, or otherwise.
The following risks related to our business, among others, could cause actual results to differ materially from those described in the forward-looking statements:
•unfavorable general economic and market conditions;
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•our ability to take advantage of growth opportunities and develop and commercialize new solutions and enhance existing solutions, including incorporating artificial intelligence technology;
•reductions in demand in the capital equipment market or reductions in the demand for or adoption of our solutions, systems, or services;
•delays in installations of our medication management solutions or our more complex medication packaging systems;
•transitioning to selling more products and services on a subscription basis;
•our ability to acquire companies, businesses, or technologies and successfully integrate such acquisitions;
•failing to maintain expected service levels when providing our SaaS and Expert Services or retaining our SaaS and Expert Services customers;
•meeting the demands of, or maintain relationships with, institutional, retail, and specialty pharmacy customers;
•investments in new business strategies or initiatives;
•continued and increased competition from current and future competitors in the medication management automation solutions market and the medication adherence solutions market;
•our substantial debt obligations;
•disruptions to our information technology systems and breaches of data security or cyber-attacks on our systems or solutions;
•effectiveness of business continuity plans during any future cybersecurity incidents;
•government regulations, legislative changes, fraud and anti-kickback statues, products liability claims, the outcome of legal proceedings, and other legal obligations related to healthcare, privacy, data protection, and information security, and the costs of compliance with, and potential liability associated with, our actual or perceived failure to comply with such obligations;
•changes to the 340B Program;
•operating in foreign countries, including the potential impact of tariffs;
•covenants in our credit agreement could restrict our business and operations;
•climate change, legal, regulatory or market measures to address climate change and a focus on ESG matters by various stakeholders;
•recruiting and retaining skilled and motivated personnel;
•protecting our intellectual property;
•availability and sources of raw materials and components or price fluctuations, shortages, or interruptions of supply;
•dependence on a limited number of suppliers for certain components, equipment, and raw materials, as well as technologies provided by third-party vendors;
•fluctuations in quarterly and annual operating results;
•failing to meet (or significantly exceeding) our publicly announced financial guidance; and
•other factors set forth under “Risk Factors”.
Other Information
All references in this Quarterly Report on Form 10-Q to “Omnicell,” “our,” “us,” “we,” or “the Company” collectively refer to Omnicell, Inc., a Delaware corporation, and its subsidiaries. The term “Omnicell, Inc.” refers only to Omnicell, Inc., excluding its subsidiaries.
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We own various registered and unregistered trademarks and service marks used in our business, some of which appear in this Quarterly Report on Form 10-Q, including Omnicell®. This Quarterly Report on Form 10-Q may also include the trademarks and service marks of other companies. Such trademarks and service marks are the marks of their respective owners.
OVERVIEW
Our Business
Omnicell, a leader in transforming the pharmacy and nursing care delivery model, is committed to solving the critical challenges inherent in medication management and elevating the role of clinicians within healthcare as an essential component of care delivery. Omnicell is focused on helping its customers define and deliver a cost-effective medication management strategy designed to equip and empower pharmacists and nurses to focus on patient care rather than administrative tasks, and to drive improved clinical, operational, and financial outcomes across all care settings. We are doing this with an industry-leading medication management infrastructure which includes robotics and smart devices, software workflows, expert services, and operational and optimization analytics. This comprehensive set of solutions provides the critical foundation for customers to realize the Autonomous Pharmacy, an industry-wide vision defined by pharmacy leaders for improving operational efficiencies and ultimately targeting zero-error medication management.
Omnicell solutions are helping healthcare facilities worldwide to uncover cost savings, improve labor efficiency, establish new revenue streams, enhance supply chain control, support compliance, and move closer to the industry-defined vision of the Autonomous Pharmacy. We sell our product and consumable solutions together with related service offerings. Revenues generated in the United States represented 92% and 89% of our total revenues for the three months ended March 31, 2025 and 2024, respectively.
Over the past several years, our business has expanded from a single-point solution to a platform of products and services that will help further advance the industry-defined vision of the Autonomous Pharmacy. This expansion has resulted in larger deal sizes across multiple products, services, and implementations for customers and, we believe, more comprehensive, valuable, and enduring relationships. As our business evolves, we continue to evaluate the metrics and methods we use to measure the success of our business.
Global Trade Relations
On April 2, 2025, the current U.S. administration imposed significant tariffs on a wide variety of products manufactured in virtually every foreign jurisdiction, which tariffs were subsequently paused for 90 days on April 10, 2025, excluding tariffs on all imports from China, which were 145% as of April 10, 2025. In response, several foreign countries have imposed reciprocal tariffs on goods manufactured in the United States. Furthermore, the current U.S. administration has also announced, as have other foreign governments, that it may implement other tariffs or increase existing tariffs. We are monitoring ongoing developments surrounding the fluid tariff environment. Although we continue to work to mitigate the impact of current or potential tariffs, there can be no assurance that we will be able to offset any increased costs or other adverse impacts. As a result, we may incorrectly anticipate outcomes, forgo or pass up business opportunities, or fail to appropriately adapt or manage our business strategies in response to these changes. As a result of all of these factors, we may experience direct and indirect adverse effects on our business, operating results, cash flow, or financial condition.
Product Bookings and Annual Recurring Revenue
Starting in 2025, we began utilizing product bookings and Annual Recurring Revenue (“ARR”), each as further described below, as key performance metrics for our business. We view product bookings as an indicator of the success of certain portions of our business that generate nonrecurring revenue and we view ARR as an indicator of the success of the portions of our business that generate recurring revenues. The definitions and descriptions included below are relevant to these key performance metrics. As previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2024, product bookings and ARR have replaced our prior bookings metric that was in use through 2024.
Product Bookings
We utilize product bookings as an indicator of the success of certain portions of our business that generate non-recurring revenue. We define product bookings generally as the value of non-cancelable contracts for our connected devices and software licenses. We typically exclude freight revenue and other less significant items ancillary to our products from product bookings. In addition, dependent upon counterparty or credit risk, which is evaluated at the time of contract signing, for a given multi-year subscription contract we may reduce the value of the contractual commitment booked at a given time. Connected devices and software license bookings are recorded as revenue upon customer acceptance of the installation or receipt of goods.
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As part of most connected device product sales, we generally provide installation planning and consulting, which is typically included in the initial price of the solution.
Annual Recurring Revenue
We consider revenues generated from our consumables, technical services, and SaaS and Expert Services to be recurring revenues. For the portions of our business which generate recurring revenues, we utilize ARR as a key metric to measure our progress in growing our recurring revenue business. We define ARR at a measurement date as the revenue we expect to receive from our customers over the course of the following year for providing them with products or services. ARR includes expected revenue from all customers who are using our products or services at the reported date. For technical services and SaaS and Expert Services, solutions are generally on a contractual basis, typically with contracts for a period of 12 months or more, with a high probability of renewal. Probability of renewal is based on historic renewal experience of the individual revenue streams or management’s best estimates if historical renewal experience is not available. Consumables orders are placed by customers through our Omnicell Storefront online platform or through written or telephonic orders and are sold to a customer base who utilize the consumable product and place recurring orders when customer inventory is depleted. ARR is generally calculated based on revenues received in the most recent quarter and changes to expected revenues where solutions were added to or removed from the install or customer base in the quarter. Revenues from technical services and SaaS and Expert Services are recorded ratably over the service term. As part of our SaaS and Expert Services offerings, we provide a range of services to our customers including Central Pharmacy Dispensing Service (service portion), IV Compounding Service (service portion), EnlivenHealth, Specialty Pharmacy Services, 340B solutions, Inventory Optimization Service, and other software solutions, which typically are provided over two to seven years. In addition, to help ensure the maximum availability of our systems, our customers typically purchase technical services contracts (support and maintenance) in increments of one to five years. Revenue from consumables are recorded when the product has shipped and title has passed. Our measure of ARR may be different than that used by other companies. Because ARR is based on expected future revenue, it does not represent revenue recognized during a particular reporting period or revenue to be recognized in future reporting periods. ARR should not be viewed as a substitute for revenues.
The following table summarizes each revenue category:
| Revenue Category | Revenue Type | Income Statement Classification | Included in Product Bookings | Included in ARR | ||||||||||||||||||||||
Connected devices, software licenses, and other | Nonrecurring | Product | Yes (1) | No | ||||||||||||||||||||||
Consumables | Recurring | Product | No | Yes | ||||||||||||||||||||||
Technical services | Recurring | Service | No | Yes | ||||||||||||||||||||||
SaaS and Expert Services (2) | Recurring | Service | No | Yes | ||||||||||||||||||||||
(1) Certain other insignificant revenue streams ancillary to our products and services, such as freight revenue, are not included in bookings.
(2) Includes Central Pharmacy Dispensing Service (service portion), IV Compounding Service (service portion), EnlivenHealth, Specialty Pharmacy Services, 340B solutions, Inventory Optimization Service, and other software solutions.
Operating Segments
We manage our operations as a single segment for the purposes of assessing performance and making operating decisions. Our Chief Operating Decision Maker (“CODM”) is our Chief Executive Officer. The CODM allocates resources and evaluates the performance of Omnicell at the consolidated level using our consolidated net income (loss). In addition, the CODM is provided with certain segment assets and liabilities, primarily those that impact liquidity, as well as certain significant expenses. All significant operating decisions are based upon an analysis of Omnicell as one operating segment, which is the same as our reporting segment.
Our full-time employee headcount was approximately 3,620 and 3,670 on March 31, 2025 and December 31, 2024, respectively.
Business Strategy
In 2023, the United States spent $723 billion on prescription drugs, a 13.6% increase from 2022. This was the largest annual spending increase in 20 years and impacted patients in virtually all settings of care. We believe there are significant challenges facing the practice of pharmacy today including, but not limited to, budget constraints, increased healthcare worker turnover rates, labor shortages, drug shortages, drug diversion, manual and error-prone processes, complex compliance requirements, and limited inventory visibility. Each of these challenges may lead to poor medication management outcomes including, but not limited to, medication errors, adverse drug events, lack of patient adherence, and medication waste. We also
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recognize that these challenges may impact the timing of contracting for, or implementation of, our products, solutions, or services. However, we believe that over time these significant challenges to the practice of pharmacy will drive demand for increased automation, visibility, insights, and improved medication management outcomes that our solutions are designed to enable. Because of this, we believe that our solutions are well-positioned to address the evolving needs of healthcare institutions and therefore present opportunities for long-term growth.
In an effort to address these challenges and deliver solutions to help drive positive medication management outcomes, we continue to make significant investments in our research and development efforts to further advance the industry-defined vision of the Autonomous Pharmacy. Furthermore, we believe a combination of robotics and smart devices, software workflows, expert services, and operational and optimization analytics is needed in every care setting where medications are managed. We are focused on delivering solutions to help our customers realize the industry-defined vision of the Autonomous Pharmacy and drive positive medication management outcomes with outstanding customer experience through a mature channel in four market categories:
•Points of Care. As a market leader, we expect to continue expansion into this product market as customers increase the use of our dispensing systems in more areas within their hospitals and increasingly in ambulatory care settings. Macroeconomic trends in our target market continue to improve as health system margins and volumes increase and stabilize in the post-pandemic environment. This positive trajectory is expected to drive increased demand for system modernization through automation, software, and analytics. We are seeing customers seek to maximize the value of existing automated dispensing system investments and continue to invest in next-generation enhancements and solutions for points of care. We believe that customers will upgrade their current installed base over time as we deliver these new solutions to market. We also believe there is an opportunity for us to expand this offering and define a new standard for dispensing systems in ambulatory settings. We believe our current solutions for Points of Care and new innovations and services will continue to help customers drive improved clinical and financial outcomes.
•Central Pharmacy and IV Compounding. This market represents the beginning of the medication management process in acute care settings, and we believe it is a significant automation opportunity for high volumes of manual, repetitive, and error-prone processes that are often common in pharmacies today. Manual medication dispensing processes are usually labor intensive, error-prone, and may lead to excess medication waste and expirations for our healthcare partners. Automating the central pharmacy dispensing process should enable customers to reallocate pharmacy labor, enhance dispensing accuracy and patient safety, and reduce medication waste and expirations. Likewise, the manual compounding of sterile IV preparations can be error-prone and create significant patient safety risks, and outsourcing sterile IV compounding could lead to increased medication costs and lack of access to needed medications due to an inability to source medications when they are required. As a result, we believe IV automation provides a significant opportunity to enhance patient safety and reduce costs. We anticipate that these technology-enabled services will become more critical as health systems continue to face labor shortages, increased financial pressure, and supply chain disruptions.
•Specialty Pharmacy and 340B Program. We believe that health systems will continue to invest in programs that are intended to improve patient outcomes and drive cost savings by utilizing specialty pharmacies and the federal 340B Drug Pricing Program (the “340B Program”). The 340B Program allows qualifying hospitals and health systems to stretch federal resources and expand patient access to healthcare by requiring manufacturers participating in Medicaid to sell outpatient drugs at discounted prices to eligible healthcare organizations and covered entities. Specialty drugs are used for treatment of complex conditions and often require intensive patient management and specialized workflows for dispensing and care coordination. Specialty medications are projected to account for nearly 60% of U.S. total spending on medications, with total spending projected to be approximately $420 billion in 2025. Specialty pharmacies serve as the connection between patients, prescribing physicians, and payers and work to streamline access and adherence to these specialty drugs. We believe a solution that is designed to help health systems start or optimize their specialty pharmacy programs and the related pharmaceutical aspects of patient care will help ensure continuity of care and should contribute to the revenue and profitability of those organizations. We believe that a fully optimized specialty pharmacy operation represents one of the largest economic opportunities for hospitals and health systems.
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•Ambulatory Care. We believe ambulatory care, especially the retail and institutional market, represents a significant opportunity as healthcare evolves. Retail pharmacies are expected to fill 4.98 billion prescriptions in 2025 and grow at a compound annual growth rate of around 7.1%, which would result in an approximate $1.2 trillion market valuation by 2032. Additionally, the shift of outpatient care from hospitals and physician offices to other, more convenient settings, such as retail pharmacies and the home continues to be a growing trend. New technologies and increased scope of practice for pharmacists appear to be spurring innovation and expansion of the provision of clinical services by retail pharmacies. We believe this development, combined with the move to value-based care, will drive the adoption of our patient engagement offerings. These solutions are intended to help providers (including pharmacists) engage patients in new ways that are expected to improve outcomes, reduce the total cost of care, and lead to more profitable operations.
CRITICAL ACCOUNTING ESTIMATES
Our discussion and analysis of our financial condition and results of operations are based on our Condensed Consolidated Financial Statements, which have been prepared in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”). The preparation of these financial statements requires us to make certain estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of any contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting periods. We regularly review our estimates and assumptions, which are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of certain assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates and assumptions.
We believe the following critical accounting policies are affected by significant judgments and estimates used in the preparation of our Condensed Consolidated Financial Statements:
•Revenue recognition;
•Inventory; and
•Accounting for income taxes.
There were no material changes in the matters for which we make critical accounting estimates in the preparation of our Condensed Consolidated Financial Statements during the three months ended March 31, 2025 as compared to those disclosed 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 Authoritative Guidance
Refer to “Recently Issued Authoritative Guidance” in Note 1, Organization and Summary of Significant Accounting Policies, of the Notes to Condensed Consolidated Financial Statements in this Quarterly Report on Form 10-Q for a description of recently issued accounting pronouncements, including the expected dates of adoption and estimated effects on our results of operations, financial position, and cash flows.
RESULTS OF OPERATIONS
Total Revenues
| Three Months Ended March 31, | |||||||||||||||||||||||
| Change in | |||||||||||||||||||||||
| 2025 | 2024 | $ | % | ||||||||||||||||||||
| (Dollars in thousands) | |||||||||||||||||||||||
| Product revenues | $ | 145,168 | $ | 133,295 | $ | 11,873 | 9% | ||||||||||||||||
| Percentage of total revenues | 54% | 54% | |||||||||||||||||||||
Service revenues | 124,500 | 112,856 | $ | 11,644 | 10% | ||||||||||||||||||
| Percentage of total revenues | 46% | 46% | |||||||||||||||||||||
| Total revenues | $ | 269,668 | $ | 246,151 | $ | 23,517 | 10% | ||||||||||||||||
Product revenues represented 54% of total revenues for both the three months ended March 31, 2025 and 2024. Product revenues increased by $11.9 million, primarily due to the increase in revenues from our XT Amplify program.
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Service revenues represented 46% of total revenues for both the three months ended March 31, 2025 and 2024. Service revenues include revenues from technical services and SaaS and Expert Services offerings. Service revenues increased by $11.6 million, primarily due to an increase of $2.9 million in technical services revenues as a result of growth in our installed customer base and the impact of pricing actions, as well as an increase of $8.8 million in SaaS and Expert Services revenues due to continued customer demand, including an increase in revenues from our Specialty Pharmacy Services offering.
Our international sales represented 8% and 11% of total revenues for the three months ended March 31, 2025 and 2024, respectively, and are expected to be affected by foreign currency exchange rate fluctuations. We are unable to predict the extent to which revenues in future periods will be impacted by changes in foreign currency exchange rates.
Our ability to grow revenues is dependent on our ability to continue to obtain orders from customers, which may be dependent upon customers’ capital equipment budgets and/or capital equipment approval cycles, our ability to produce quality products and consumables to fulfill customer demand, the volume of installations we are able to complete, our ability to meet customer needs by providing a quality installation experience, our ability to develop new or enhance existing solutions, and our flexibility in workforce allocations among customers to complete installations on a timely basis. The timing of our product revenues for equipment is primarily dependent on when our customers’ schedules and/or staffing levels allow for installations.
Cost of Revenues and Gross Profit
Cost of revenues is primarily comprised of three general categories: (i) standard product costs which account for the majority of the product cost of revenues that are provided to customers, and are inclusive of purchased material, labor to build the product, and overhead costs associated with production; (ii) costs of providing services and installation costs, including costs of personnel and other expenses; and (iii) other costs, including variances in standard costs and overhead, scrap costs, rework, provisions for excess and obsolete inventory, and amortization of software development costs and intangibles.
| Three Months Ended March 31, | |||||||||||||||||||||||
| Change in | |||||||||||||||||||||||
| 2025 | 2024 | $ | % | ||||||||||||||||||||
| (Dollars in thousands) | |||||||||||||||||||||||
| Cost of revenues: | |||||||||||||||||||||||
| Cost of product revenues | $ | 85,585 | $ | 92,441 | $ | (6,856) | (7)% | ||||||||||||||||
| As a percentage of related revenues | 59% | 69% | |||||||||||||||||||||
Cost of service revenues | 73,147 | 61,087 | $ | 12,060 | 20% | ||||||||||||||||||
| As a percentage of related revenues | 59% | 54% | |||||||||||||||||||||
| Total cost of revenues | $ | 158,732 | $ | 153,528 | $ | 5,204 | 3% | ||||||||||||||||
| As a percentage of total revenues | 59% | 62% | |||||||||||||||||||||
| Gross profit | $ | 110,936 | $ | 92,623 | $ | 18,313 | 20% | ||||||||||||||||
| Gross margin | 41% | 38% | |||||||||||||||||||||
Cost of revenues for the three months ended March 31, 2025 compared to the three months ended March 31, 2024 increased by $5.2 million, primarily driven by a $12.1 million increase in cost of service revenues, partially offset by a $6.9 million decrease in cost of product revenues.
The decrease in cost of product revenues for the three months ended March 31, 2025 compared to the three months ended March 31, 2024 was primarily driven by the impact of more favorable materials costs during the three months ended March 31, 2025 and a decrease of $2.6 million of restructuring costs, partially offset by an increase in revenues.
The increase in cost of service revenues was primarily driven by the increase in service revenues of $11.6 million for the three months ended March 31, 2025 compared to the three months ended March 31, 2024, including the associated increase in employee-related expenses, and an increase in certain non-recurring costs, including software upgrade expenses.
The overall increase in gross margin primarily relates to higher revenues for the three months ended March 31, 2025 compared to the three months ended March 31, 2024, as well as a decrease in cost of product revenues primarily due to the impact of more favorable materials costs during the three months ended March 31, 2025 and a decrease in restructuring costs, partially offset by an increase in certain non-recurring costs, including software upgrade expenses. Our gross profit for the three months ended March 31, 2025 was $110.9 million, as compared to $92.6 million for the three months ended March 31, 2024.
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Operating Expenses and Interest and Other Income (Expense), Net
| Three Months Ended March 31, | |||||||||||||||||||||||
| Change in | |||||||||||||||||||||||
| 2025 | 2024 | $ | % | ||||||||||||||||||||
| (Dollars in thousands) | |||||||||||||||||||||||
| Operating expenses: | |||||||||||||||||||||||
| Research and development | $ | 20,526 | $ | 22,056 | $ | (1,530) | (7)% | ||||||||||||||||
| As a percentage of total revenues | 8% | 9% | |||||||||||||||||||||
| Selling, general, and administrative | 102,029 | 92,414 | $ | 9,615 | 10% | ||||||||||||||||||
| As a percentage of total revenues | 38% | 38% | |||||||||||||||||||||
| Total operating expenses | $ | 122,555 | $ | 114,470 | $ | 8,085 | 7% | ||||||||||||||||
| As a percentage of total revenues | 45% | 47% | |||||||||||||||||||||
| Interest and other income (expense), net | $ | 2,089 | $ | 4,016 | $ | (1,927) | (48)% | ||||||||||||||||
Research and Development. Research and development expenses decreased by $1.5 million for the three months ended March 31, 2025 compared to the three months ended March 31, 2024 primarily due to the timing of capitalized software projects.
Selling, General, and Administrative. Selling, general, and administrative expenses increased by $9.6 million for the three months ended March 31, 2025 compared to the three months ended March 31, 2024. The increase was primarily due to an increase of $6.2 million in employee-related expenses primarily as a result of higher headcount, an increase of $2.7 million for legal and regulatory expenses, and an increase of $1.5 million in certain restructuring and severance charges for the three months ended March 31, 2025 compared to the three months ended March 31, 2024.
Interest and Other Income (Expense), Net. Interest and other income (expense), net changed by $1.9 million for the three months ended March 31, 2025 compared to the three months ended March 31, 2024, primarily driven by a $2.1 million decrease in other income and a $0.2 million increase in other expense. The decrease in other income during the three months ended March 31, 2025 as compared to the three months ended March 31, 2024 is primarily attributable to lower interest income received due to lower interest rates and lower cash and cash equivalents balances following the partial repurchase of our convertible senior notes in November 2024.
Benefit from Income Taxes
| Three Months Ended March 31, | |||||||||||||||||||||||
| Change in | |||||||||||||||||||||||
| 2025 | 2024 | $ | % | ||||||||||||||||||||
| (Dollars in thousands) | |||||||||||||||||||||||
| Benefit from income taxes | $ | (2,507) | $ | (2,155) | $ | (352) | 16% | ||||||||||||||||
For the three months ended March 31, 2025 and March 31, 2024, we recorded a benefit from income taxes of $2.5 million and $2.2 million, respectively. The change in the benefit from income taxes for the three months ended March 31, 2025 compared to the benefit from income taxes for the same period in 2024 was insignificant, consisting of various offsetting components of annual effective tax rate and discrete income tax expense.
Refer to Note 15, Income Taxes, of the Notes to Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q for additional information.
LIQUIDITY AND CAPITAL RESOURCES
We had cash and cash equivalents of $386.8 million at March 31, 2025 compared to $369.2 million at December 31, 2024. All of our cash and cash equivalents are invested in bank accounts and money market funds held in sweep and asset management accounts with financial institutions of high credit quality.
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Our cash position and working capital at March 31, 2025 and December 31, 2024 were as follows:
| March 31, 2025 | December 31, 2024 | ||||||||||
| (In thousands) | |||||||||||
| Cash and cash equivalents | $ | 386,826 | $ | 369,201 | |||||||
| Working capital | $ | 232,135 | $ | 219,815 | |||||||
Our ratio of current assets to current liabilities was 1.4:1 at both March 31, 2025 and December 31, 2024.
Sources of Cash
Revolving Credit Facility
On November 15, 2019, Omnicell, Inc. entered into an Amended and Restated Credit Agreement (as amended, the “Prior A&R Credit Agreement”) with the lenders from time to time party thereto, Wells Fargo Securities, LLC, Citizens Bank, N.A., and JPMorgan Chase Bank, N.A., as joint lead arrangers, and Wells Fargo Bank, National Association, as administrative agent. The Prior A&R Credit Agreement provided for (a) a five-year revolving credit facility of $500.0 million (the “Prior Revolving Credit Facility”) and (b) an uncommitted incremental loan facility of up to $250.0 million (the “Prior Incremental Facility”). In addition, the Prior A&R Credit Agreement included a letter of credit sub-limit of up to $15.0 million and a swing line loan sub-limit of up to $25.0 million. The Prior A&R Credit Agreement was subsequently amended on September 22, 2020 and March 29, 2023 to permit the issuance of the convertible senior notes and the purchase of the convertible note hedge transactions (as described in Note 11, Convertible Senior Notes, of the Notes to Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q), expand our flexibility to make restricted payments (including common stock repurchases), and replace the total net leverage covenant, as well as to remove and replace the interest rate benchmark based on the London interbank offered rate (“LIBOR”) and related LIBOR-based mechanics with an interest rate benchmark based on the secured overnight financing rate (“SOFR”) as administered by the Federal Reserve Bank of New York and related SOFR-based mechanics.
On October 10, 2023, Omnicell, Inc. entered into a Second Amended and Restated Credit Agreement (the “Second A&R Credit Agreement”) with the lenders from time to time party thereto, Wells Fargo Securities, LLC, JPMorgan Chase Bank, N.A., PNC Capital Markets LLC and TD Securities (USA) LLC as joint lead arrangers and Wells Fargo Bank, National Association, as administrative agent. The Second A&R Credit Agreement supersedes the Prior A&R Credit Agreement and provides for (a) a five-year revolving credit facility of $350.0 million (the “Current Revolving Credit Facility”) and (b) an uncommitted incremental loan facility of up to an amount equal to the sum of (i) the greater of $250.0 million and 100% of the adjusted consolidated EBITDA for the last four quarters and (ii) additional amounts subject to pro forma compliance with certain consolidated secured net leverage ratio (the “Current Incremental Facility”). In addition, the Second A&R Credit Agreement includes a letter of credit sub-limit of up to $15.0 million and a swing line loan sub-limit of up to $25.0 million. The Second A&R Credit Agreement has an expiration date of October 10, 2028, subject to acceleration under certain conditions, upon which date all remaining outstanding borrowings will be due and payable.
As of March 31, 2025, we had $350.0 million of funds available under the Current Revolving Credit Facility. As of March 31, 2025, there was no outstanding balance under the Current Revolving Credit Facility and we were in full compliance with all covenants.
Refer to Note 10, Debt and Credit Agreement, of the Notes to Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q for additional information. We expect to use future loans under the Current Revolving Credit Facility, if any, for working capital, potential acquisitions, and other general corporate purposes.
Convertible Senior Notes
On November 22, 2024, Omnicell, Inc. completed a private offering of $172.5 million aggregate principal amount of 1.00% Convertible Senior Notes due 2029 (the “2029 Notes”), including the exercise in full of the initial purchasers’ option to purchase up to an additional $22.5 million aggregate principal amount of the 2029 Notes. Omnicell, Inc. received proceeds from the issuance of the 2029 Notes of $166.3 million, net of $6.2 million of transaction fees and other debt issuance costs. The 2029 Notes bear interest at a rate of 1.00% per year, payable semiannually in arrears on June 1 and December 1 of each year, beginning on June 1, 2025. The 2029 Notes are general senior, unsecured obligations of Omnicell, Inc. and will mature on December 1, 2029, unless earlier redeemed, repurchased, or converted. In connection with the issuance of the 2029 Notes, in November 2024, we entered into warrant transactions and received aggregate proceeds from the sale of the warrants of
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approximately $25.2 million. Refer to Note 11, Convertible Senior Notes, of the Notes to Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q for additional information.
Uses of Cash
Our future uses of cash are expected to be primarily for working capital, capital expenditures, and other contractual obligations. We may also use cash for potential acquisitions and acquisition-related activities, as well as repurchases of our common stock. In addition, we may also use a portion of our cash as we consider various options related to our outstanding debt.
The 2016 Repurchase Program has a total of $2.7 million remaining for future repurchases as of March 31, 2025, which may result in additional use of cash. There were no stock repurchases during the three months ended March 31, 2025. Refer to “Stock Repurchase Programs” under Note 16, Employee Benefits and Share-Based Compensation, of the Notes to Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q for additional information.
In November 2024, we completed a partial repurchase of $400.0 million aggregate principal amount of the 2025 Notes for approximately $391.2 million in cash. Refer to Note 11, Convertible Senior Notes, of the Notes to Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q for additional information.
In connection with the issuance of the 2029 Notes, in November 2024, we entered into convertible note hedge transactions and used approximately $40.3 million of the net proceeds from the offering to pay the cost of the convertible note hedges.
Based on our current business plan and backlog, we believe that our existing cash and cash equivalents, our anticipated cash flows from operations, cash generated from the exercise of employee stock options and purchases under our Employee Stock Purchase Plan (“ESPP”), along with the availability of funds under the Current Revolving Credit Facility will be sufficient to meet our cash needs for working capital, capital expenditures, potential acquisitions, outstanding debt, and other contractual obligations for at least the next twelve months. For periods beyond the next twelve months, we also anticipate that our net operating cash flows plus existing balances of cash and cash equivalents will suffice to fund the growth of our business.
Cash Flows
The following table summarizes, for the periods indicated, selected items in our Condensed Consolidated Statements of Cash Flows:
| Three Months Ended March 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| (In thousands) | |||||||||||
| Net cash provided by (used in): | |||||||||||
| Operating activities | $ | 25,924 | $ | 49,953 | |||||||
| Investing activities | (15,739) | (12,340) | |||||||||
| Financing activities | 4,038 | 11,926 | |||||||||
| Effect of exchange rate changes on cash and cash equivalents | 1,565 | (556) | |||||||||
| Net increase in cash, cash equivalents, and restricted cash | $ | 15,788 | $ | 48,983 | |||||||
Operating Activities
We expect cash from our operating activities to fluctuate in future periods as a result of a number of factors, including the timing of our billings and collections, our operating results, and the timing of other liability payments.
Net cash provided by operating activities was $25.9 million for the three months ended March 31, 2025, primarily consisting of operating inflows of $22.6 million and favorable working capital movements of $3.3 million. Operating inflows consisted of a net loss of $7.0 million, adjusted for non-cash items of $29.6 million, which consisted primarily of depreciation and amortization expense of $20.0 million and share-based compensation expense of $10.8 million. The favorable working capital was primarily due to an increase in deferred revenues of $20.2 million, driven primarily by an increase in billings for certain technical service and SaaS and Expert Services offerings, and a decrease in accounts receivable and unbilled receivables of $5.5 million, primarily due to the timing of billings, shipments, and collections. The cash inflows were partially offset by a decrease in accrued compensation of $14.2 million, primarily due to the timing of bonus payments, as well as ESPP purchases.
Net cash provided by operating activities was $50.0 million for the three months ended March 31, 2024, primarily consisting of operating inflows of $12.6 million and favorable working capital movements of $37.4 million. Operating inflows
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consisted of net loss of $15.7 million, adjusted for non-cash items of $28.2 million, which consisted primarily of depreciation and amortization expense of $21.3 million, and share-based compensation expense of $8.6 million. The favorable working capital was primarily due to an increase in deferred revenues of $34.1 million driven by an increase in billings for certain technical service and SaaS and Expert Services offerings, a decrease in inventories of $6.3 million resulting from the management of inventory levels to align with the current forecasted demand as well as inventory management efforts, and an increase in accrued liabilities of $5.1 million. These cash inflows were partially offset by a decrease in accrued compensation of $10.3 million, primarily due to a decrease in the accrual for restructuring initiatives, as well as timing of payroll and ESPP purchases.
Investing Activities
Net cash used in investing activities was $15.7 million for the three months ended March 31, 2025, which consisted of capital expenditures of $11.2 million for property and equipment and $4.6 million for external-use software development costs.
Net cash used in investing activities was $12.3 million for the three months ended March 31, 2024, which consisted of capital expenditures of $9.0 million for property and equipment and $3.4 million for external-use software development costs.
Financing Activities
Net cash provided by financing activities was $4.0 million for the three months ended March 31, 2025, primarily due to $8.3 million in proceeds from employee stock option exercises and ESPP purchases.
Net cash provided by financing activities was $11.9 million for the three months ended March 31, 2024, primarily due to $8.0 million in proceeds from employee stock option exercises and ESPP purchases and a net change in the customer funds balances of $4.6 million.
Contractual Obligations
There have been no significant changes during the three months ended March 31, 2025 to the contractual obligations disclosed in “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” set forth in Part II, Item 7, of our Annual Report on Form 10-K for the year ended December 31, 2024.
Contractual obligations as of March 31, 2025 were as follows:
| Payments Due By Period | |||||||||||||||||||||||||||||
| Total | Remainder of 2025 | 2026-2027 | 2028-2029 | 2030 and thereafter | |||||||||||||||||||||||||
| (In thousands) | |||||||||||||||||||||||||||||
Operating leases (1) | $ | 49,729 | $ | 10,332 | $ | 24,569 | $ | 12,994 | $ | 1,834 | |||||||||||||||||||
Purchase obligations (2) | $ | 129,254 | 109,139 | 20,089 | 26 | — | |||||||||||||||||||||||
Convertible senior notes (3) | $ | 356,387 | 176,982 | 3,450 | 175,955 | — | |||||||||||||||||||||||
Total (4) | $ | 535,370 | $ | 296,453 | $ | 48,108 | $ | 188,975 | $ | 1,834 | |||||||||||||||||||
_________________________________________________
(1)Commitments under operating leases relate primarily to leased office buildings, data centers, office equipment, and vehicles. Refer to Note 13, Lessee Leases, of the Notes to Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q for additional information.
(2)We purchase components from a variety of suppliers and use contract manufacturers to provide manufacturing services for our products. During the normal course of business, we issue purchase orders with estimates of our requirements several months ahead of the delivery dates. These amounts are associated with agreements that are enforceable and legally binding. The amounts under such contracts are included in the table above because we believe that cancellation of these contracts is unlikely and we expect to make future cash payments according to the contract terms or in similar amounts for similar materials.
(3)We issued the 2025 Notes in September 2020 that are due in September 2025 and issued the 2029 Notes in November 2024 that are due in December 2029. The obligations presented above include both principal and interest on these notes. Although these notes mature in 2025 and 2029, respectively, they may be converted into cash and shares of our common stock prior to maturity if certain conditions are met. Any conversion prior to maturity can result in repayment of the principal amounts sooner than the scheduled repayment as indicated in the table above. Refer to Note 11, Convertible Senior Notes, of the Notes to Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q for additional information.
(4)Refer to Note 14, Commitments and Contingencies, of the Notes to Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q for additional information.
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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
We are exposed to market risks related to fluctuations in foreign currency exchange rates and interest rates.
Foreign Currency Exchange Risk
We operate in foreign countries which expose us to market risk associated with foreign currency exchange rate fluctuations between the U.S. dollar and various foreign currencies, the most significant of which are the British Pound and the Euro. In order to manage foreign currency risk, at times we enter into foreign exchange forward contracts to mitigate risks associated with changes in spot exchange rates of mainly non-functional currency denominated assets or liabilities of our foreign subsidiaries. In general, the market risk related to these contracts is offset by corresponding gains and losses on the hedged transactions. By working only with major banks and closely monitoring current market conditions, we seek to limit the risk that counterparties to these contracts may be unable to perform. We do not enter into derivative contracts for trading purposes. As of March 31, 2025, we did not have any outstanding foreign exchange forward contracts.
Interest Rate Fluctuation Risk
We are exposed to interest rate risk through our borrowing activities. As of March 31, 2025, there was no outstanding balance under the current Second A&R Credit Agreement. Refer to Note 10, Debt and Credit Agreement, of the Notes to Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q for additional information.
As of March 31, 2025, the net carrying amount under the 2025 Notes and the 2029 Notes was $174.6 million and $166.7 million, respectively. Although our convertible senior notes are based on a fixed rate, changes in interest rates could impact the fair value of such notes. As of March 31, 2025, the fair market value of the 2025 Notes and the 2029 Notes was $170.5 million and $161.5 million, respectively. Refer to Note 5, Cash and Cash Equivalents and Fair Value of Financial Instruments, and Note 11, Convertible Senior Notes, of the Notes to Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q for additional information.
We have used, and in the future we may use, interest rate swap agreements to protect against adverse fluctuations in interest rates by reducing our exposure to variability in cash flows relating to interest payments on a portion of our outstanding debt. We do not hold or issue any derivative financial instruments for speculative trading purposes. As of March 31, 2025, we did not have any outstanding interest rate swap agreements.
There were no significant changes in our market risk exposures during the three months ended March 31, 2025 as compared to the market risk exposures disclosed in “Quantitative and Qualitative Disclosures About Market Risk,” set forth in Part II, Item 7A of our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC on February 27, 2025.
ITEM 4. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
Our management, with the participation of our principal executive officer and principal financial officer, evaluated the effectiveness of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this report. In designing and evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply its judgment in evaluating the benefits of possible controls and procedures relative to their costs.
Based on such evaluation, our principal executive officer and principal financial officer have concluded that our disclosure controls and procedures were effective at the reasonable assurance level as of the end of the period covered by this report, that the information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.
Limitations on Effectiveness of Controls
Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act). Our internal control system is designed to provide reasonable assurance regarding the preparation and fair presentation of financial statements for external purposes in
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accordance with U.S. generally accepted accounting principles. All internal control systems, no matter how well designed, have inherent limitations and can provide only reasonable assurance that the objectives of the internal control system are met.
Changes in Internal Control over Financial Reporting
There have been no changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting during the three months ended March 31, 2025.
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PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
The information set forth under “Legal Proceedings” in Note 14, Commitments and Contingencies, of the Notes to Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q is incorporated herein by reference.
ITEM 1A. RISK FACTORS
Other than the updates provided below, please refer to Part I - Item 1A. “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2024, which was filed with the SEC on February 27, 2025.
Failure to generate new sales and any reduction in the demand for or adoption of our medication management solutions, medication packaging systems, or related services would reduce our revenues.
A significant portion of domestic and international healthcare facilities still use traditional approaches to medication and/or supply management in some form that do not include fully automated methods of medication management. As a result, we must continuously educate existing and prospective customers about the potential advantages of our medication management solutions and medication packaging systems, which requires significant sales efforts and can cause longer sales cycles. Despite our significant efforts and extensive time commitments targeting sales to healthcare facilities, we cannot be assured that our efforts will result in sales to these customers.
In addition, our medication management solutions and our more complex automated packaging systems typically represent a sizable initial capital expenditure and potential time and labor commitment to implement for healthcare organizations. Changes in the budgets of these organizations and the timing of spending under these budgets, as well as customer labor shortages, can have a significant effect on the demand for our medication management solutions, medication packaging systems, and related services. Customer budgets are often supported by cash flows that can be negatively affected by declining investment income and influenced by limited resources, increased operational and financing costs, macroeconomic conditions, and conflicting spending priorities among different departments. Furthermore, in the current fluid tariff environment, the imposition of tariffs may raise the operating costs for healthcare organizations, which in turn could put increased pressure on their budgets or capital spending as well as impact the timing of their spending. Any decrease in expenditures or change in spending priorities by healthcare facilities or increased financing costs, including as a result of the impacts of public health crises, including pandemics, could decrease demand for our medication management solutions, medication packaging systems, and related services, and reduce our revenues.
Also, the continuing gradual transition to a value-based care healthcare delivery model could shift more of the burden of financial risk onto healthcare provider organizations and could decrease utilization of healthcare per patient. Value-based care could also cause a shift in sites of care from traditional venues, such as hospitals and clinics, to the home, and could impact our revenues.
Our international operations may subject us to additional risks that can adversely affect our business, operating results, cash flow, or financial condition.
We currently have operations outside of the United States, including sales efforts centered in Canada, Europe, the Middle East, and the Asia-Pacific regions, and supply chain efforts in Asia. We intend to continue to expand our international operations, particularly in certain markets that we view as strategic, including the Middle East. Our international operations subject us to a variety of risks, including:
•our reliance on distributors for the sale of our medication management solutions outside the United States, Canada, the UK, France, and Germany;
•the difficulty of managing an organization operating in various countries;
•reduced protection for intellectual property rights in certain jurisdictions;
•the imposition of, or adverse changes in, international laws and regulations, including privacy and security, labor, import, export, trade, environmental standards, product compliance, tax, anti-bribery, and employment laws;
•fluctuations in currency exchange rates and difficulties in repatriating funds from certain countries;
•additional investment, coordination, and lead-time necessary to successfully interface our automation solutions with the existing information systems of our customers or potential customers outside of the United States;
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•political unrest, terrorism, and other potential hostilities (such as the ongoing conflicts between Russia and Ukraine or Israel and Hamas), including in areas in which we have facilities or operations; and
•epidemics, pandemics, or other major public health crises.
If we are unable to anticipate and address these risks properly, our business, operating results, cash flow, or financial condition could be harmed.
Furthermore, changes in export or import regulation and other trade barriers (such as tariffs) and related uncertainties may have an adverse effect on our business, including cost increases for our raw materials or components (some which we have already seen), greater uncertainty and risk in our supply chain, or an inability to accurately forecast our margins.
The current political climate may be challenging for companies manufacturing goods outside of the U.S. For example, on April 2, 2025, the current U.S. administration imposed significant tariffs on a wide variety of products manufactured in virtually every foreign jurisdiction, which tariffs were subsequently paused for 90 days on April 10, 2025, excluding tariffs on all imports from China, which were 145% as of April 10, 2025. In response, several foreign countries have imposed reciprocal tariffs on goods manufactured in the United States. Furthermore, the current U.S. administration has also announced, as have other foreign governments, that it may implement other tariffs or increase existing tariffs.
In recent years, the U.S. government has advocated for greater restrictions on trade generally. We cannot predict what additional actions may ultimately be taken with respect to tariffs or trade relations between the United States and other countries (including China), what products may be subject to such actions, or what other actions may be taken by the other countries in retaliation, including implementing new or increasing reciprocal tariffs. These actions may change without warning, further exacerbating our inability to anticipate or react to such actions or to accurately forecast the resulting impacts. Although we continue to work to mitigate the impact of current or potential tariffs, there can be no assurance that we will be able to offset any increased costs or other adverse impacts. As a result, we may incorrectly anticipate outcomes, forgo or pass up business opportunities, or fail to appropriately adapt or manage our business strategies in response to these changes.
The adoption and expansion of trade restrictions, the occurrence of a trade war, other governmental action related to tariffs or trade agreements or policies, or the related uncertainties, has the potential to adversely impact our ability to do business outside of the United States as well as to adversely impact demand for our products or our supply chain and costs, which could, in turn, adversely affect our business, operating results, cash flow, or financial condition. In addition, certain of our competitors may be better positioned than us to withstand or react to tariffs or other restrictions on global trade and as a result, we may lose market share to such competitors.
Our products use raw materials and components that may be subject to price fluctuations, shortages, or interruptions of supply, and if we are unable to maintain supply sources for such raw materials and components, or if such sources fail to satisfy our supply requirements, in particular with regard to semiconductor chips, we may experience a loss of sales, increased component costs, and reduced profitability.
Factors that are largely beyond our control, such as the imposition of new, or increase of existing, tariffs, cost, quality, and availability of the raw materials and components utilized in the manufacture of our products, may affect the cost of such products, and we may not be able to pass those costs on to our customers. Our products use raw materials and components that may be subject to price fluctuations, shortages, or other disruptions of supply for many reasons outside of our control. In addition, we may be dependent upon a limited number of suppliers for certain components which may be unduly affected by supply chain disruptions. The cost, quality, and availability of these raw materials and components are essential to the successful manufacture and sale of our products. If we are unable to maintain supply sources of these raw materials and components, or if such sources fail to satisfy our supply requirements, we may lose sales and experience increased component costs.
We have developed and implemented strategies in an effort to mitigate the impact of price fluctuations, shortages, or other disruptions of supply, but these strategies, particularly in the event of a trade war or a prolonged inflationary environment, may only offset a portion of the adverse impact. We carry some inventory of critical components and are otherwise working to secure supplies necessary to ensure fulfillment of customer demand, but global shortages could result in our need to secure supplies at higher costs as well as manufacturing delays. Supply interruptions may result in increased component delivery lead times and increased costs to obtain components and as a result, the production of our products may be impacted. If we or our suppliers are unable to obtain components from third parties in the quantities and of the quality that we require, on a timely basis and at acceptable prices, we may not be able to deliver our products on a timely or cost-effective basis to our customers, or it may lead to us delivering products that are of a lower quality that may result in increased repair and replacement costs, which could harm our business and reputation, operating results, cash flow, and financial condition. We have also seen a period of sustained price increases for commodities used in the manufacture of our products that may continue as demand increases, supply remains constrained or trade restrictions are adopted or expanded, which has resulted in, and may continue to result in,
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increased costs for Omnicell and thereby potentially lower profit margins. If the costs of these commodities increase or remain elevated, it could adversely affect our business, operating results, cash flow, or financial condition.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
Issuer Purchases of Equity Securities
During the three months ended March 31, 2025, we did not repurchase any shares of our common stock under our repurchase program authorized on August 2, 2016, which does not expire, and provides for the repurchase of up to $50.0 million of the Company’s common stock (the “2016 Repurchase Program”). As of March 31, 2025, the maximum dollar value of shares that may yet be purchased under the 2016 Repurchase Program was $2.7 million. Refer to “Stock Repurchase Programs” under Note 16, Employee Benefits and Share-Based Compensation, of the Notes to Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q for additional information.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
ITEM 5. OTHER INFORMATION
Securities Trading Plans of Directors and Officers
During the three months ended March 31, 2025, Randall A. Lipps , the Company’s President, Chief Executive Officer, and Chairman of the Board of Directors , adopted a new “Rule 10b5-1 trading arrangement” (as defined in Item 408(a) of Regulation S-K) on March 14, 2025 , which is intended to satisfy the Rule 10b5-1(c) affirmative defense. Mr. Lipps’ trading plan is effective from September 30, 2025 until the earlier of: (1) September 30, 2026 ; or (2) the date on which all of the transactions under the trading plan are completed. The trading plan is intended to let Mr. Lipps sell up to 46,750 shares of common stock and exercise and sell up to 28,250 stock options expiring on February 3, 2026 . As of the date of this report, none of the shares were sold, nor any options exercised and no other adjustments were made to the trading plan during the current reporting period.
The trading plan described above was adopted and precleared in accordance with the Company’s Insider Trading Policy and actual sale transactions made pursuant to such trading plan will be disclosed publicly in future Section 16 filings with the SEC.
Other than as disclosed above, none of our other directors or officers adopted or terminated a “Rule 10b5-1 trading arrangement” or adopted or terminated a “non-Rule 10b5-1 trading arrangement” (as each term is defined in Item 408(a) of Regulation S-K) during the current reporting period.
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ITEM 6. EXHIBITS
| Incorporated By Reference | ||||||||||||||||||||||||||||||||
| Exhibit Number | Exhibit Description | Form | Exhibit | Filing Date | ||||||||||||||||||||||||||||
| 10.1* | 8-K | 10.1 | 3/4/2025 | |||||||||||||||||||||||||||||
31.1+ | ||||||||||||||||||||||||||||||||
31.2+ | ||||||||||||||||||||||||||||||||
32.1+ | ||||||||||||||||||||||||||||||||
101.INS+ | Inline XBRL Instance Document - The instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. | |||||||||||||||||||||||||||||||
101.SCH+ | Inline XBRL Taxonomy Extension Schema Document | |||||||||||||||||||||||||||||||
101.CAL+ | Inline XBRL Taxonomy Extension Calculation Linkbase Document | |||||||||||||||||||||||||||||||
101.DEF+ | Inline XBRL Taxonomy Extension Definition Linkbase Document | |||||||||||||||||||||||||||||||
101.LAB+ | Inline XBRL Taxonomy Extension Labels Linkbase Document | |||||||||||||||||||||||||||||||
101.PRE+ | Inline XBRL Taxonomy Extension Presentation Linkbase Document | |||||||||||||||||||||||||||||||
104+ | Cover Page Interactive Data File (formatted as inline XBRL with applicable taxonomy extension information contained in Exhibit 101). | |||||||||||||||||||||||||||||||
_________________________________________________
* Indicates a management contract, compensation plan, or arrangement.
+ Filed herewith.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| OMNICELL, INC. | ||||||||||||||
| Date: | May 7, 2025 | By: | /s/ Nchacha E. Etta | |||||||||||
Nchacha E. Etta Executive Vice President & Chief Financial Officer (principal financial officer and duly authorized officer) | ||||||||||||||
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Exhibit 31.1
CERTIFICATION
I, Randall A. Lipps, certify that:
1.I have reviewed this quarterly report on Form 10-Q of Omnicell, Inc.;
2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, and cash flows of the registrant as of, and for, the periods presented in this report;
4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize, and report financial information; and
(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
| May 7, 2025 | /s/ Randall A. Lipps | ||||
| Randall A. Lipps | |||||
| President and Chief Executive Officer | |||||
| (Principal Executive Officer) | |||||
Exhibit 31.2
CERTIFICATION
I, Nchacha E. Etta, certify that:
1.I have reviewed this quarterly report on Form 10-Q of Omnicell, Inc.;
2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, and cash flows of the registrant as of, and for, the periods presented in this report;
4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize, and report financial information; and
(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
| May 7, 2025 | /s/ Nchacha E. Etta | ||||
| Nchacha E. Etta | |||||
| Executive Vice President & Chief Financial Officer | |||||
| (Principal Financial Officer) | |||||
Exhibit 32.1
CERTIFICATION
Pursuant to the requirement set forth in Rule 13a-14(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and Section 1350 of Chapter 63 of Title 18 of the United States Code (18 U.S.C. §1350), Randall A. Lipps, the President and Chief Executive Officer of Omnicell, Inc. (the “Company”), and Nchacha E. Etta, the Executive Vice President & Chief Financial Officer of the Company, each hereby certifies that, to the best of his knowledge:
1.The Company’s Quarterly Report on Form 10-Q for the period ended March 31, 2025 (the “Quarterly Report”), to which this Certification is attached as Exhibit 32.1, fully complies with the requirements of Section 13(a) or Section 15(d) of the Exchange Act; and
2.The information contained in the Quarterly Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
In witness whereof, the undersigned have set their hands hereto as of the 7th day of May, 2025.
| /s/ Randall A. Lipps | /s/ Nchacha E. Etta | |||||||
| Randall A. Lipps | Nchacha E. Etta | |||||||
| President and Chief Executive Officer | Executive Vice President & Chief Financial Officer | |||||||
| (Principal Executive Officer) | (Principal Financial Officer) | |||||||
“This certification accompanies the Form 10-Q to which it relates, is not deemed filed with the Securities and Exchange Commission and is not to be incorporated by reference into any filing of Omnicell, Inc. under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended (whether made before or after the date of the Form 10-Q), irrespective of any general incorporation language contained in such filing.”