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OMNICELL, INC.

OMNICELL, INC.OMCL财报

Nasdaq · 工业 · 电子计算机

Omnicell, Inc. is an American multinational healthcare technology company headquartered in Mountain View, CA. It manufactures automated systems for medication management in hospitals and other healthcare settings, and medication adherence packaging and patient engagement software used by retail pharmacies. Its products are sold under the brand names Omnicell and EnlivenHealth.

What changed in OMNICELL, INC.'s 10-K — 2024 vs 2025

Top changes in OMNICELL, INC.'s 2025 10-K

505 paragraphs added · 484 removed · 349 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

114 edited+65 added−72 removed88 unchanged
This comprehensive service is designed to help health systems enhance patient safety and improve dispensing accuracy, reduce medication dispensing errors and waste, and streamline workflows to enable pharmacy labor resources to focus on higher value tasks.
This comprehensive service is designed to help health systems enhance patient safety, improve dispensing accuracy, reduce medication dispensing errors and waste, and streamline workflows to enable pharmacy labor resources to focus on higher value tasks.
Our customers also use our products or services to obtain and store their personal information, including protected health information (as defined by the Health Information Portability and Accountability Act of 1996 and its implementing regulations, collectively “HIPAA”), from their patients and customers and sometimes personal information of their employees.
Our customers also use our products and/or services to obtain and store their personal information, including protected health information (as defined by the Health Information Portability and Accountability Act of 1996 and its implementing regulations, collectively “HIPAA”), from their patients and customers and sometimes personal information of their employees.
We offer market-competitive pay and a comprehensive benefits package. • Our bonus program is designed to incentivize our employees to focus on work that will further the delivery of our annual priorities. • We offer reward and recognition programs that embed our guiding principles into our Culture of Care and everything we do, allowing for peer-to-peer recognition and motivating our employees to continually work to advance our promise, our purpose, and our guiding principles. • Our quarterly performance review process (Aspire) is designed to enable our talent to reach their optimum levels of contribution to Omnicell’s business strategies, facilitates regular employee feedback, and supports our pay-for-performance philosophy.
We offer employees market-competitive pay and a comprehensive benefits package. • Our bonus program is designed to incentivize our employees to focus on work that will further the delivery of our annual priorities. • We offer reward and recognition programs that embed our guiding principles into our Culture of Care and everything we do, allowing for peer-to-peer recognition and motivating our employees to continually work to advance our promise, our purpose, and our guiding principles. • Our quarterly performance review process is designed to enable our talent to reach their optimum levels of contribution to Omnicell’s business strategies, facilitates regular employee feedback, and supports our pay-for-performance philosophy.
Some state laws require medical device and pharmaceutical companies to comply with industry voluntary compliance guidelines (such as the AdvaMed Code of Ethics and PhRMA Code), or the relevant compliance guidance promulgated by the federal government, in addition to requiring manufacturers to report information related to payments to physicians and other health care providers or marketing expenditures to the extent that those laws impose requirements that are more stringent than the Physician Payments Sunshine Act.
Some state laws require medical device and pharmaceutical companies to comply with industry voluntary compliance guidelines (such as the AdvaMed Code of Ethics and PhRMA Code), or the relevant compliance guidance promulgated by the federal government (the OIG), in addition to requiring manufacturers to report information related to payments to physicians and other health care providers or marketing expenditures to the extent that those laws impose requirements that are more stringent than the Physician Payments Sunshine Act.
Furthermore, we are focused on creating a culture of care, engagement, and well-being for all of our employees. There continues to be evolving and increasing expectations from regulators, customers, investors, and employees with respect to reducing and limiting greenhouse gas emissions and a focus on matters relating to ESG activities, which requires deliberate, conscientious efforts to effect change.
Furthermore, we are focused on creating a culture of care, engagement, and well-being for all of our employees. There continues to be evolving and increasing expectations from customers, investors, employees and various regulators with respect to reducing and limiting greenhouse gas emissions and a focus on matters relating to ESG activities, which requires deliberate, conscientious efforts to effect change.
Healthcare Regulations Our current and future arrangements with healthcare professionals, consultants, customers and third-party payors expose us to broadly applicable healthcare regulation and enforcement by the U.S. federal government and the states and foreign governments in which we conduct our business, such as fraud and abuse, and transparency and health information privacy rules and regulations.
Healthcare Regulations Our current and future arrangements with healthcare professionals, consultants, customers and third-party payors expose us to broadly applicable healthcare regulation and enforcement by the U.S. federal government and the states and foreign governments in which we conduct our business, such as regulations addressing fraud and abuse, transparency and health information privacy rules and regulations.
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.
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).
With respect to our products and solutions, we manufacture and develop specifications for products classified as Class I and Class II medical devices, which are subject to FDA regulation and require compliance with certain FDA regulations and requirements, including the FDA Quality System Regulation as well as FDA regulations for medical device reporting.
With respect to our products and solutions, we manufacture and develop specifications for products classified as Class I and Class II medical devices, which are subject to FDA regulation and require compliance with certain FDA regulations and requirements, including the FDA Quality System Regulation and FDA regulations for medical device reporting.
Considerations Since we manufacture and sell our products outside of the United States, certain products of a local nature and variations of product lines must also meet the applicable national, provincial, state and local regulatory requirements of the applicable country (“ex-U.S. regulatory requirements”).
Ex-U.S. Considerations Since we manufacture and sell our products outside of the United States, certain products of a local nature and variations of product lines must also meet the applicable national, provincial, state and local regulatory requirements of the applicable country (“ex-U.S. regulatory requirements”).
Our or our customers’ practices may not in all cases meet all of the criteria for safe harbor protection from Anti-Kickback Statute liability. • Federal civil and criminal false claims laws, including the civil False Claims Act (“FCA”), which prohibits, among other things: (i) knowingly presenting, or causing to be presented, claims for payment of government funds that are false or fraudulent; (ii) knowingly making, or using or causing to be made or used, a false record or statement material to a false or fraudulent claim; (iii) knowingly making, using or causing to made or used a false record or statement material to an obligation to pay money to the government; or (iv) knowingly concealing or knowingly and improperly avoiding, decreasing, or concealing an obligation to pay money to the federal government.
Our or our customers’ practices may not in all cases meet all of the criteria for safe harbor protection from Anti-Kickback Statute liability. • Federal civil and criminal false claims laws, including the civil False Claims Act (“FCA”), which prohibits, among other things: (i) knowingly presenting, or causing to be presented, claims for payment of government funds that are false or fraudulent; (ii) knowingly making, or using or causing to be made or used, a false record or statement material to a false or fraudulent claim; (iii) knowingly making, using or causing to made or used a false record or statement material to an obligation to pay money to the government; or (iv) knowingly concealing or knowingly and improperly 13 Table of Contents avoiding, decreasing, or concealing an obligation to pay money to the federal government.
The civil FCA defines "knowing" to include not only actual knowledge but also instances in which the person acted in deliberate ignorance or reckless disregard of the truth or falsity of the information. Filing false claims may result in fines of up to three times the programs' loss plus $11,000 per claim filed.
The civil FCA defines “knowing” to include not only actual knowledge but also instances in which the person acted in deliberate ignorance or reckless disregard of the truth or falsity of the information. Filing false claims may result in fines of up to three times the programs' loss plus $11,000 per claim filed.
Penalties range from $10,000 to $50,000 per violation. • Many U.S. states have laws and regulations analogous to Federal fraud and abuse laws, such as individual state anti-kickback, fee-splitting and false claims laws, which may apply to sales or marketing arrangements and claims involving healthcare items or services reimbursed by non-governmental third-party payers, including private insurers. • Various Federal laws, regulations, and agency issued guidance documents govern communications and marketing, including to Medicare enrollees, and establish limits on (or prohibit) compensation paid for lead generation activities, including the Centers for Medicare and Medicaid Services (“CMS”) Medicare Communications and Marketing Guidelines (“MCMG”).
Penalties range from $10,000 to $50,000 per violation. • Many U.S. states have laws and regulations analogous to Federal fraud and abuse laws, such as individual state anti-kickback, fee-splitting and false claims laws, which may apply to sales or marketing arrangements and claims involving healthcare items or services reimbursed by non-governmental third-party payers, including private insurers. • Various Federal laws, regulations, and agency issued guidance documents govern communications and marketing, including to Medicare enrollees, and establish limits on (or prohibit) compensation paid for lead generation activities, including the Centers for Medicare and Medicaid Services (“CMS”) Medicare Communications and Marketing 14 Table of Contents Guidelines (“MCMG”).
Our website address is www.omnicell.com and our investor relations website is located at ir.omnicell.com. Information About Our Executive Officers The following table sets forth certain information about our executive officers as of the date of this Annual Report on Form 10-K: Name Age Position Randall A.
Our website address is www.omnicell.com and our investor relations website is located at ir.omnicell.com. 22 Table of Contents Information About Our Executive Officers The following table sets forth certain information about our executive officers as of the date of this Annual Report on Form 10-K: Name Age Position Randall A.
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 that customers will upgrade their current installed base over time as we deliver these new solutions to market. We also believe there is a future opportunity for us to expand this offering and define a new standard for dispensing systems in ambulatory settings.
Lipps was named Chief Executive Officer and President of Omnicell in October 2002. Mr. Lipps has served as Chairman of the Board and a Director of Omnicell since founding Omnicell in September 1992. Mr. Lipps received both a B.S. in economics and a B.B.A. from Southern Methodist University. Nchacha E.
Lipps was named Chief Executive Officer and President of Omnicell in October 2002. Mr. Lipps has served as Chairman of the Board and a Director of Omnicell since founding Omnicell in September 1992. Mr. Lipps received both a B.S. in economics and a B.B.A. from Southern Methodist University.
In addition, the CODM is provided with certain segment assets, 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.
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.
Pursuant to the terms of GPO agreements, each member contracts directly with us and can purchase our products under pre-negotiated contract terms and pricing. These GPO contracts are typically for 15 Table of Contents multiple years with options to renew or extend for up to two years and some of which can be terminated by either party at any time.
Pursuant to the terms of GPO agreements, each member contracts directly with us and can purchase our products under pre-negotiated contract terms and pricing. These GPO contracts are typically for multiple years with options to renew or extend for up to two years and some of which can be terminated by either party at any time.
Our arrangements with contract manufacturers generally set forth quality, cost, and delivery requirements, as well as manufacturing process terms, such as continuity of supply, inventory management, capacity flexibility, quality and cost management, oversight of manufacturing, and conditions for the use of our intellectual property. Our operations organization procures components and schedules production based on the backlog of customer orders.
Our arrangements with contract manufacturers generally set forth quality, cost, and delivery requirements, as well as manufacturing process terms, such as continuity of supply, inventory management, capacity flexibility, quality and cost management, oversight of manufacturing, and conditions for the use of our intellectual property. 17 Table of Contents Our operations organization procures components and schedules production based on the backlog of customer orders.
Our offerings include: Points of Care Our automation solutions for points of care are designed to improve clinician workflows in patient care areas of the healthcare system, such as nursing units, patient wards, operating rooms, and emergency departments.
Points of Care Our automation solutions for points of care are designed to improve clinician workflows in patient care areas of the healthcare system, such as nursing units, patient wards, operating rooms, and emergency departments.
Recent Acquisition s In addition to our own organic development, we have, from time to time, acquired businesses and technologies that expand our product lines and are strategic fits for our business, and although no acquisitions were completed in 2023 or 2024, we expect to continue to seek to acquire businesses, technologies, or products in the future.
Recent Acquisition s In addition to our own organic development, we have, from time to time, acquired businesses and technologies that expand our product lines and are strategic fits for our business, and although no material acquisitions were completed in 2024 or 2025, we expect to continue to seek to acquire businesses, technologies, or products in the future.
We adhere to internationally-recognized Organisation for Economic Co-operation and Development guidance for the responsible sourcing of raw materials and continually work to enhance the sustainability attributes of our products and improve the sustainability of our designs. In 19 Table of Contents addition, we seek to ensure access to high-quality, equitable, and integrated care for all patients worldwide.
We adhere to internationally-recognized Organisation for Economic Co-operation and Development guidance for the responsible sourcing of raw materials and continually work to enhance the sustainability attributes of our products and improve the sustainability of our designs. In addition, we seek to ensure access to high-quality, equitable, and integrated care for all patients worldwide.
We expect continued and increased competition from current and future competitors in the markets in which we operate, and are affected by evolving and new technologies, changes in industry standards (including standards of care), and dynamic customer requirements. 16 Table of Contents Furthermore, the healthcare industry has experienced a significant degree of consolidation.
We expect continued and increased competition from current and future competitors in the markets in which we operate, and are affected by evolving and new technologies, changes in industry standards (including standards of care), and dynamic customer requirements. Furthermore, the healthcare industry has experienced a significant degree of consolidation.
We pursue patent protection in the United States and foreign jurisdictions for technology that we believe to be proprietary and that may offer a potential competitive advantage for our products. Our issued patents expire on various dates between 2025 and 2043. We intend to seek and obtain additional United States and foreign patents on our technology.
We pursue patent protection in the United States and foreign jurisdictions for technology that we believe to be proprietary and that may offer a potential competitive advantage for our products. Our issued patents expire on various dates between 2026 and 2043. We may seek to obtain additional United States and foreign patents on our technology.
Many of the sub-assemblies and components we use are provided by third-party contract manufacturers or other suppliers. The majority of these contract manufacturers and other suppliers are based in Asia and the U.S. We and our partners test these sub-assemblies and perform inspections to assure the quality and reliability of our products.
Many of the sub-assemblies and components we use are provided by third-party contract manufacturers or other suppliers. The majority of these contract manufacturers and other suppliers are based in Asia and the Americas. We and our partners test these sub-assemblies and perform inspections to assure the quality and reliability of our products.
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.
However, we believe that over time these significant challenges facing pharmacists 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.
For additional information regarding these leases, see the risk factor captioned “ Our U.S. government lease 17 Table of Contents agreements are subject to annual budget funding cycles and mandated changes, which may affect our ability to recognize revenues and sell receivables based on such leases , ” under Item 1A “Risk Factors ”.
For additional information regarding these leases, see the risk factor captioned “ Our U.S. government lease agreements are subject to annual budget funding cycles and mandated changes, which may affect our ability to recognize revenues and sell receivables based on such leases , ” under Item 1A “Risk Factors ”.
The expansion of many health systems across broad geographic regions due to mergers and acquisitions activity and organic growth has created increased interest for many customers in the Centralized Services model for enterprise-wide medication distribution.
The expansion of many health systems across broad geographic regions due to mergers and acquisitions activity and organic growth has created increased interest for many customers in the Centralized Services model for enterprise-wide 8 Table of Contents medication distribution.
Additional support to our field services is provided by certified external partners as needed. Manufacturing and Inventory The manufacturing process for our automation products allows us to uniquely configure hardware and software to meet a wide variety of individual customer needs. The automation product manufacturing process consists primarily of the final assembly of components and testing of the completed product.
Additional support to our service teams is provided by certified external partners as needed. Manufacturing and Inventory The manufacturing process for our automation products allows us to uniquely configure hardware and software to meet a wide variety of individual customer needs. The automation product manufacturing process consists primarily of the final assembly of components and testing of the completed product.
During our fiscal year ended December 31, 2024, sales to members of the ten largest GPOs and federal agencies that purchase under the GSA Contract accounted for approximately 65% of our total consolidated revenues. We offer multi-year, non-cancelable lease payment terms to assist healthcare organizations in purchasing our systems by reducing their cash flow requirements in a lease structure.
During our fiscal year ended December 31, 2025, sales to members of the ten largest GPOs and federal agencies that purchase under the GSA Contract collectively accounted for approximately 61% of our total consolidated revenues. We offer multi-year, non-cancelable lease payment terms to assist healthcare organizations in purchasing our systems by reducing their cash flow requirements in a lease structure.
In addition, state and local laws may require the registration of sales representatives. State and foreign laws also govern the privacy and security of health information in some circumstances, many of which differ from each other in significant ways and often are not preempted by HIPAA, thus complicating compliance efforts.
In addition, state and local laws may require the registration of sales representatives. State and foreign laws also govern the privacy and security of personal and health information in some 15 Table of Contents circumstances, many of which differ from each other in significant ways and often are not preempted by HIPAA, thus complicating compliance efforts.
Violations of any of such laws, or any other governmental regulations that apply to us, may subject us to significant penalties, including, without limitation, civil, criminal and administrative penalties, judicial sanctions, which could include, among other actions, refusal to approve pending applications, withdrawal of an approval, a clinical hold, warning letters, product recalls or withdrawals from the market, product seizures, total or partial suspension of production or distribution injunctions, damages, fines, restitution, disgorgement, or other civil or criminal penalties, as well as additional reporting requirements and oversight if the company becomes subject to a corporate integrity agreement or similar agreement to resolve allegations of non-compliance with these laws, the curtailment or restructuring of our operations, refusals of government contracts, exclusion from participation in federal and state healthcare programs (if we were so participating) and imprisonment, any of which could adversely affect our ability to operate our business. 14 Table of Contents Ex-U.S.
Violations of any of the laws discussed above, or any other governmental regulations that apply to us, may subject us to significant fines and penalties, including, without limitation, civil, criminal and administrative penalties, and regulatory agency and judicial sanctions, which could include, among other actions, refusal to approve pending applications, withdrawal of an approval, a clinical hold, warning letters, product recalls or withdrawals from the market, product seizures, total or partial suspension of production or distribution injunctions, damages, fines, restitution, disgorgement, or other civil or criminal penalties, as well as additional reporting requirements and oversight if the company becomes subject to a corporate integrity agreement or similar agreement to resolve allegations of non-compliance with these laws, the curtailment or restructuring of our operations, refusals of government contracts, exclusion from participation in federal and state healthcare programs (if we were so participating) and imprisonment, any of which could adversely affect our ability to operate our business.
In addition, as noted above, a claim including items or services resulting from a violation of the federal Anti-Kickback Statute 12 Table of Contents constitutes a false or fraudulent claim for purposes of the FCA.
In addition, as noted above, a claim including items or services resulting from a violation of the federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the FCA.
Our XT Series automated dispensing systems for medications and supplies, which are used in nursing units and other clinical areas of the hospital, are designed to support workflows specific to each area of the hospital, with various software and hardware options.
Titan XT builds on our XT Series automated dispensing systems for medications and supplies, which are used in nursing units and other clinical areas of the hospital, and is designed to support workflows specific to each area of the hospital, with various software and hardware options.
At this point, the future of the Proposed Rule is unclear, as the newly elected U.S. administration will likely determine whether to move forward with the rulemaking process. • The Federal Civil Monetary Penalties Law, which authorizes the imposition of substantial civil monetary penalties against an entity that engages in activities including, among others (i) knowingly presenting, or causing to be presented, a claim for services not provided as claimed or that is otherwise false or fraudulent in any way; (ii) arranging for or contracting with an individual or entity that is excluded from participation in federal healthcare programs to provide items or services reimbursable by a federal healthcare program; (iii) violations of the federal Anti-Kickback Statute; or (iv) failing to report and return a known overpayment.
At this point, the future of the Proposed Rule is unclear, as the newly elected U.S. administration will likely determine whether to move forward with the rulemaking process; currently the rule’s finalization remains on the DHHS’ Office for Civil Rights’ regulatory agenda for May 2026. • The Federal Civil Monetary Penalties Law, which authorizes the imposition of substantial civil monetary penalties against an entity that engages in activities including, among others (i) knowingly presenting, or causing to be presented, a claim for services not provided as claimed or that is otherwise false or fraudulent in any way; (ii) arranging for or contracting with an individual or entity that is excluded from participation in federal healthcare programs to provide items or services reimbursable by a federal healthcare program; (iii) violations of the federal Anti-Kickback Statute; or (iv) failing to report and return a known overpayment.
These areas include, without limitation, FDCA and FDA, Controlled Substances Act and DEA regulations, individual state boards of pharmacy regulations, and laws and regulations regarding quality, privacy, information governance and security, and environmental, health and safety.
These areas include, without limitation, FD&C Act and FDA, Controlled Substances Act and DEA regulations, individual state boards of pharmacy regulations, and laws and regulations regarding AI, quality, privacy, information governance and security, and environmental, health and safety.
The insights we gain from this collaboration help us develop solutions that are designed to address the customer’s unmet needs and challenges. We continue to invest significantly in enhancing the value of our XT Series automated dispensing systems through both hardware and software upgrades.
The insights we gain from this collaboration help us develop solutions that are designed to address the customer’s unmet needs and challenges. We continue to invest significantly in enhancing the value of our dispensing systems with the launch of Titan XT and continuous XT Series improvements through both hardware and software upgrades.
Sales and Distribution We sell our products and services primarily in the United States. Approximately 91% of our revenue was generated in this market for the year ended December 31, 2024.
Sales and Distribution We sell our products and services primarily in the United States. Approximately 90% of our revenue was generated in this market for the year ended December 31, 2025.
Under the criminal FCA penalties for submitting false claims include imprisonment and criminal fines; the OIG also may impose administrative civil monetary penalties for false or fraudulent claims. • HIPAA imposes criminal liability and civil monetary penalties for executing a scheme to defraud any health care benefit program or making false statements relating to health care matters.
Under the criminal FCA penalties for submitting false claims include imprisonment and criminal fines; the Office of Inspector General (“OIG”) of the DHHS also may impose administrative civil monetary penalties for false or fraudulent claims. • HIPAA imposes criminal liability and civil monetary penalties for executing a scheme to defraud any health care benefit program or making false statements relating to health care matters.
As a result of the process, the Senior Leadership team was able to have a holistic view of the talent landscape and create a Talent Action plan. • We continued to align our Leadership Development offerings to support our Talent Philosophy – Performance – Accountability – Transparency – Differentiation – Development.
As a result of the process, the Senior Leadership team was able to have a holistic view of the talent landscape and create a Talent Action plan. • We continue to align our Leadership Development offerings with our Talent Philosophy, which emphasizes performance, accountability, transparency, differentiation, and development.
Products designated as medical devices are also subject to various other regulatory requirements, including as applicable, FDA premarket clearance or approval; establishment registration and device listing; complaint handling; notification and repair, replace, refund; mandatory recalls; unique device identifier requirements; reports of removals and corrections; cybersecurity requirements; and post-marketing surveillance.
Products designated or classified as medical devices may also be subject to various regulatory requirements, including as applicable, FDA premarket clearance or approval; establishment registration and device listing; complaint handling; notification and repair, replace, refund; mandatory recalls; unique device identifier requirements; reports of removals and 12 Table of Contents corrections; cybersecurity requirements; and post-marketing surveillance.
The Office of Inspector General (“OIG”) of the DHHS may seek civil monetary penalties and sometimes exclusion for a wide variety of conduct and is authorized to seek different amounts of penalties and assessments based on the type of violation at issue.
The OIG may seek civil monetary penalties and sometimes exclusion for a wide variety of conduct and is authorized to seek different amounts of penalties and assessments based on the type of violation at issue.
Our combined direct, corporate sales support, and international distribution sales teams consisted of approximately 460 staff members as of December 31, 2024. Nearly all of our direct sales team members have hospital capital equipment, services, or clinical systems experience.
Our combined direct, corporate sales support, and international distribution sales teams consisted of approximately 430 staff 16 Table of Contents members as of December 31, 2025. Nearly all of our direct sales team members have hospital capital equipment, services, or clinical systems experience.
Additionally, we are making substantial investments to help our customers realize the industry-defined vision of the Autonomous Pharmacy. This includes focusing on our cloud-based platform and assisting customers in migrating from on-premise infrastructure to our cloud-based platform.
Additionally, we are making substantial investments to help our customers realize the industry-defined vision of the Autonomous Pharmacy. This includes focusing on OmniSphere, our cloud-based platform, and assisting customers in migrating from on-premise infrastructure to cloud infrastructure. We are also investing in further development of technology-enabled software and services.
Department of Health and Human Services (“DHHS”) regulations for credentialing of providers (pharmacists). In the United States we are neither enrolled in nor participate under Medicare or any state Medicaid program, and do not submit claims on our behalf to Medicare, Medicaid, or other government or commercial third-party payers for reimbursement.
In the United States we are neither enrolled in nor participate under Medicare or any state Medicaid program, and do not submit claims on our behalf to Medicare, Medicaid, or other government or commercial third-party payers for reimbursement.
Larger or more complex implementations such as software-enabled connected devices for Central Pharmacy, including, but not limited to, our Central Pharmacy Dispensing Service and IV Compounding Service, are often installed and recognized as revenue between 12 and 24 months after booking.
Installation of equipment and software typically occurs anywhere between three weeks to 12 months after booking. Larger or more complex implementations such as software-enabled connected devices for Central Pharmacy, including, but not limited to, our Central Pharmacy Dispensing Service and IV Compounding Service, are often installed between 12 and 24 months after booking.
This solution is delivered through a risk-share commercial model and is intended for health systems, federally qualified health centers, and provider groups to support onsite management of specialty pharmacy services, including payer contracting, staffing, licensing, and 340B program administration.
Delivered through a risk-share commercial model, this solution enables health systems, Federally Qualified Health Centers, and provider groups to support onsite management of specialty services, including payer contracting, centralized staffing, and licensing.
This multi-year innovation program is designed to maximize value for hospitals, health systems, and post-acute care facilities that have already invested in Omnicell’s XT Series automated dispensing system and are seeking to enhance the capabilities of these devices in an effort to improve clinical and operational outcomes even further.
XTExtend, a comprehensive console swap for our XT cabinets, is designed to continue to maximize value for hospitals, health systems, and post-acute care facilities that have already invested in Omnicell’s XT Series automated dispensing system and are seeking to enhance the capabilities of these devices in an effort to improve clinical and operational outcomes even further.
We compete directly with a number of companies in the medication management automation solutions market, as well as the medication adherence solutions market, on the basis of many factors, including price, quality, customer outcome, return on investment, cost of operation, innovation, product features and capabilities, installation and service, reputation and brand recognition, size of installed base, range of services and solutions, distribution, and promotion.
We compete directly with a number of companies in the hospital and health system solutions and outpatient pharmacy solutions markets, on the basis of many factors, including price, quality, customer outcome, return on investment, cost of operation, innovation, product features and capabilities, installation and service, reputation and brand recognition, size of installed base, range of services and solutions, distribution, and promotion.
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.
We believe our next generation solutions for Points of Care and new innovations and services will continue to help customers drive improved clinical and financial outcomes.
The Stark Law prohibits a physician from referring Medicare patients to an entity (including pharmacies) for the furnishing of “designated health services,” if the 13 Table of Contents physician or a member of the physician’s immediate family has a direct or indirect “financial relationship” with the entity, unless a specific exception applies.
The Stark Law prohibits a physician from referring Medicare patients to an entity (including pharmacies) for the furnishing of “designated health services,” if the physician or a member of the physician’s immediate family has a direct or indirect “financial relationship” with the entity, unless a specific exception applies. Financial relationships include both ownership/investment interests and compensation arrangements.
However, the pharmacy, dispensing, and compounding activities of other persons (our customers) that use our current medication management solutions may be subject to regulation by those agencies and by individual state boards of pharmacy.
However, the manufacture and sale of most of our current medication management solutions are not regulated by either the FDA or the DEA. However, the pharmacy, dispensing, and compounding activities of other persons (our customers) that use our current medication management solutions may be subject to regulation by those agencies and by individual state boards of pharmacy.
Financial relationships include both ownership/investment interests and compensation arrangements. The law further prohibits the entity from billing for any services that arise out of such prohibited referrals. Certain of these provisions are applicable to the referral of Medicaid patients as well.
The law further prohibits the entity from billing for any services that arise out of such prohibited referrals. Certain of these provisions are applicable to the referral of Medicaid patients as well.
Drug Enforcement Administration (“DEA”) and other governmental agency regulations in the United States and in foreign countries. Noncompliance with applicable requirements can result in import detentions, fines, civil monetary penalties, injunctions, suspensions or losses of regulatory approvals or licenses, recall or seizure of products, operating restrictions, denial of export applications, governmental prohibitions on entering into supply contracts, and criminal prosecution.
Noncompliance with applicable requirements can result in import detentions, fines, false claims, civil monetary penalties, injunctions, suspensions or losses of regulatory approvals or licenses, recall or seizure of products, operating restrictions, denial of export applications, governmental prohibitions on entering into supply contracts, and criminal prosecution.
Nnamdi Njoku joined Omnicell in October 2024 as Executive Vice President and Chief Operating Officer. Prior to joining Omnicell, Mr. Njoku served as President – Sports Medicine, Surgical, Upper Extremities and Restorative Therapies of Zimmer Biomet Holdings, Inc., a global medical technology leader, from March 2023 to September 2024. From April 2022 to March 2023, Mr.
Njoku served as President – Sports Medicine, Surgical, Upper Extremities and Restorative Therapies of Zimmer Biomet Holdings, Inc., a global medical technology leader, from March 2023 to September 2024. From April 2022 to March 2023, Mr.
These laws and regulations relate to healthcare (including medical devices and pharmaceuticals), privacy, data protection and information security, compliance, import and export, trade, healthcare fraud, waste and abuse (including anti-kickback and false claims laws), environmental standards, anti-corruption, anti-bribery, labor and employment, as well as other areas of focus.
These laws and regulations relate to healthcare (including medical devices and pharmaceuticals); privacy and information security; compliance; import and export; trade; healthcare fraud, waste and abuse (including anti-kickback and false claims laws); environmental standards; anti-corruption and anti-bribery; labor and employment, as well as other areas of focus. 11 Table of Contents Privacy and Security We receive, store, and process personal information and other data from our customers, employees, and service providers.
ITEM 1. BUSINESS Overview 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.
ITEM 1. BUSINESS Overview Omnicell, a leading healthcare technology provider focused on empowering autonomous medication management, 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.
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”).
We believe that health systems will continue to accelerate investment in programs to improve patient outcomes by utilizing specialty pharmacies and the federal 340B Drug Pricing Program.
We have started the migration of our solutions to OmniSphere, our next generation, cloud native, software workflow engine and data platform. OmniSphere is designed to seamlessly integrate enterprise robotics and smart devices across the medication management continuum of care.
Our robotic automation capabilities are also evolving as we work to enhance and develop new solutions and continuously improve existing automation. We have started the migration of our solutions to OmniSphere, our next generation, cloud native, software workflow engine and data platform. OmniSphere is designed to seamlessly integrate enterprise robotics and smart devices across the medication management continuum of care.
To further embed a focus on continuous learning, we set up a working group comprised of training professionals across the organization to develop a common set of modern learning principles to create a more cohesive learning experience across all employee touchpoints. • In 2024, we built on the foundations of our THRIVE Senior Leadership Talent Review and Succession Process, which facilitates cross-functional identification of top talent, succession planning, and individual development planning.
To embed continuous learning, we convened a cross-functional working group of training professionals to define a common set of modern learning principles, creating a more cohesive and accessible learning experience across all employee touchpoints. • In 2025, we continued to develop our Senior Leadership Talent Review and Succession Process, which facilitates cross-functional identification of top talent, succession planning, and individual development planning.
In 2024, we continued core programs including 360 Development Cohorts for People Leaders, Career Development Workshops and Elevate Learning Library in Omnicell University for all employees and scaled the Lead Program to develop all People Leaders in strategic capabilities (Leadership Imperatives) intended to create an exceptional employee experience and workplace culture.
In 2025, we continued core programs such as 360 Development Cohorts for People Leaders, Career Development Workshops, and the Elevate Learning Library in Omnicell University, which provides learning resources for all employees. We also scaled the Lead Program to strengthen strategic leadership capabilities through our Leadership Imperatives, supporting an exceptional employee experience and workplace culture.
Lipps 67 President, Chief Executive Officer, and Chairman of the Board of Directors Nchacha E. Etta 54 Executive Vice President and Chief Financial Officer Nnamdi Njoku 48 Executive Vice President and Chief Operating Officer Corey J. Manley 47 Executive Vice President and Chief Legal and Administrative Officer Randall A.
Lipps 68 President, Chief Executive Officer, and Chairman of the Board of Directors Baird Radford 55 Executive Vice President and Chief Financial Officer Nnamdi Njoku 49 Executive Vice President and Chief Operating Officer Corey J. Manley 48 Executive Vice President and Chief Legal and Administrative Officer Randall A.
Manley was a partner in the law firm of Duane Morris LLP and prior to that he was a partner in the law firm of Kirkland & Ellis LLP from November 2009 until August 2014. Mr.
Manley was a partner in the law firm of Duane Morris LLP and prior to that he was a partner in the law firm of Kirkland & Ellis LLP from November 2009 until August 2014. Mr. Manley holds a J.D. from the University of Notre Dame Law School and a B.S. in mechanical engineering from Purdue University.
Health and Wellness • We offer a comprehensive wellness program designed to promote a healthy lifestyle, including on-site gym facilities, lifestyle spending rewards, on-site bio-metric screening, and employee assistance/health coaching.
Health and Wellness • We continue to combat rising healthcare costs by investing in our programs and offering a comprehensive wellness program designed to promote a healthy lifestyle, including on-site gym facilities, lifestyle spending rewards, on-site bio-metric screening, and employee assistance/health coaching.
We consider backlog that is expected to be converted to revenues in more than twelve months to be long-term backlog. We believe a majority of long-term product backlog will be convertible into revenues in 12 to 24 months.
We believe a majority of long-term product backlog will be convertible into revenues in 12-24 months.
In the United States, these include federal health information privacy and security laws (such as HIPAA), various state and federal privacy and security breach notification laws, consumer protection laws, and individual state laws addressing privacy and security of personal and health information.
In the United States (“U.S.”), these include federal and state health information privacy and security laws (such as HIPAA), federal and state breach notification laws, and state laws that address the privacy and security of personal information and protected health information.
Our engagement scores in employee growth opportunities and career path, both landing above industry benchmarks, as measured by the OmniVoices Engagement Survey platform, reflect our commitment to employee development. • Our approach to employee development is designed to enable our Enterprise Strategy by unleashing the potential of our people.
We offer consistent career growth opportunities across roles, functions, and locations. Engagement scores for growth and career path, both above industry benchmarks as measured by OmniVoices, demonstrate our commitment to employee development. • Our approach to employee development is designed to enable our Enterprise Strategy by unlocking the potential of our people.
Internationally, various foreign jurisdictions in which we operate, including the European Union (the “EU”), have established, or are developing, their own data privacy and security legal frameworks with which we or our customers are subject to including, for example, the United Kingdom’s Data Protection Act 2018 (being the UK’s implementation of the General Data Protection Regulation), and the EU’s General Data Protection Regulation (the “GDPR”).
Internationally, various foreign jurisdictions in which we operate, including, but not limited to, the United Kingdom (“UK”) and the European Union (the “EU”), have established comprehensive data privacy and security legal frameworks with which we or our customers are or may be subject to including, for example, the UK’s General Data Protection Regulation and Data Protection Act 2018 (collectively, the “UK GDPR”) and the EU’s General Data Protection Regulation (the “EU GDPR” and, together with the UK GDPR, the “GDPR”).
Our sales force is organized by customer segment in the United States and Canada, with strategic and key account managers assigned to our top health systems; account executives, assigned to smaller health systems and healthcare facilities; and health system executives and solution experts focused on generating new business.
Our sales force is organized by customer segment in the United States and Canada, with Account Management and supporting resources assigned to current customers, and Health System Executives focused on generating new business.
The results of our research and development efforts are expected to drive the advancement of our cloud-based offerings and accelerate the realization of the industry-defined vision of the Autonomous Pharmacy. Business under Government Contracts A number of our U.S. government-owned or government-run hospital customers have signed five-year leases, with payment terms that are subject to one-year government budget funding cycles.
Business under Government Contracts A number of our U.S. government-owned or government-run hospital customers have signed five-year leases, with payment terms that are subject to one-year government budget funding cycles.
Our technical services include post-installation support and maintenance via phone and/or web, on-site service, parts, and access to software upgrades. Product support is available through fixed-period service contracts and on a time-and-materials basis. Onsite service is provided by our field service team.
After Omnicell solutions are implemented, our Customer Success team provides support through remote and onsite experts who help customers fully adopt and optimize utilization of our solutions. Our technical services include post-installation support and maintenance via phone and/or web, on-site service, parts, and access to software upgrades. Product support is available through fixed-period service contracts and on a time-and-materials basis.
We rely on a limited number of suppliers for the raw materials that are necessary in the production of our consumable medication packages.
Suppliers we rely on for raw materials in the production of our consumable medication packages are mostly from dual sourced geographies.
Similarly, certain provisions of the FD&C Act govern the approval, manufacture, handling, distribution, and tracking and tracing of pharmaceuticals. The FD&C Act also regulates which medications may be compounded, and how certain 11 Table of Contents compounded medications may be manufactured, distributed, and dispensed.
We also offer a sterile consumable product that required FDA 510(k) clearance prior to marketing and distribution. Similarly, certain provisions of the FD&C Act govern the approval, manufacture, handling, distribution, and tracking and tracing of pharmaceuticals. The FD&C Act also regulates which medications may be compounded, and how certain compounded medications may be manufactured, distributed, and dispensed.
Food and Drug Administration (“FDA”) regulates medical devices, pharmaceutical and biological products under the Federal Food, Drug, and Cosmetic Act (“FD&C Act”), the Public Health Service Act (“PHSA”), and their respective implementing regulations. Medical devices, pharmaceuticals and certain products are subject to rigorous regulation by the FDA, federal, state and local statutes and regulations, including regulation by the U.S.
Product Development, Manufacture and Sales In the U.S., the U.S. Food and Drug Administration (“FDA”) regulates medical devices, pharmaceutical and biological products, including via the Federal Food, Drug, and Cosmetic Act (“FD&C Act”), the Public Health Service Act (“PHSA”), and their respective implementing regulations.
Furthermore, while complexities in medication management have increased over time along with the volume of patients and medications, many manual processes are still used, resulting in inefficient tracking and delivery of medications and supplies and increased administrative burden on many clinical staff.
Furthermore, while complexities in medication management have increased over time along with the volume of patients and medications, many manual processes are still used, resulting in inefficient tracking and delivery of medications and supplies. For example, staff time spent on managing drug shortages is often equivalent to that of approximately 1.5 Full-Time Employees in large hospitals.
In addition, we are dedicated to advocating for health access for all and striving to ensure fair and equal access to medication and comprehensive medication management support. 21 Table of Contents Available Information We file reports and other information with, and furnish reports and other information to, the United States Securities and Exchange Commission (“SEC”) including our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and Proxy or Information Statements.
Available Information We file reports and other information with, and furnish reports and other information to, the United States Securities and Exchange Commission (“SEC”) including our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and Proxy or Information Statements.
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.
We are focused on delivering solutions to help our customers realize the industry-defined vision of the Autonomous Pharmacy and driving positive medication management outcomes with superior customer experience in two core market categories through: • Hospital and Health System Solutions: This category enables the end-to-end medication process across the entire continuum of care.
Specialty Pharmacy and 340B Our Specialty Pharmacy Services offering provides a turnkey solution designed to help health systems establish, manage, and optimize an entity-owned specialty pharmacy.
We believe the acceleration of medically integrated dispensing will help navigate the risk of these policy changes. Our Specialty Pharmacy Services offering provides a turnkey solution designed to help health systems establish, manage, and optimize an entity-owned specialty pharmacy.
We believe this trend has increased the market’s need for integrated medication management solutions on a unified platform to help improve clinical and financial outcomes for both inpatient and outpatient settings. Our portfolio of robotics and smart devices; software workflows; expert services; and operational and optimization analytics, combined with innovation, is designed with this objective in mind.
We believe this trend has increased the market’s need for integrated medication management solutions on a unified platform to help improve clinical and financial outcomes for both inpatient and outpatient settings.
For management of medical supplies, a specialized cabinet that uses radio frequency identification is also available, which is designed to improve picking and restocking workflows for nurses and surgeons.
This includes automated dispensing systems used in hospitals and retail pharmacies for handling the stocking and retrieval of both boxed and unit-dose medications. For management of medical supplies, a specialized cabinet that uses radio frequency identification is also available, which is designed to improve picking and restocking workflows for nurses and surgeons.
In addition, under the terms of the Federal Supply Schedule contract, certain of our U.S. government customer contracts are terminable at the convenience of the applicable U.S. government customer. Furthermore, on January 20, 2025, President Donald J.
In addition, under the terms of the Federal Supply Schedule contract, certain of our U.S. government customer contracts are terminable at the convenience of the applicable U.S. government customer. Furthermore, there are uncertainties and pressures surrounding the U.S. federal government’s budget and budgetary priorities, and funding of the U.S. federal government, as well as pressures on government expenditures.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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In addition, many U.S. and international governmental bodies and regulators have proposed, or are in the process of developing, new regulations related to the use of AI and machine-learning technologies. The final form of these may impose obligations related to our development, offering, and use of AI technologies and expose us to increased risk of regulatory enforcement and litigation.
In addition, many U.S. and international governmental bodies and regulators have proposed, or are in the process of developing, new regulations related to the use of AI and machine-learning technologies. The final form of these regulations may impose obligations related to our development, offering, and use of AI technologies and expose us to increased risk of regulatory enforcement and litigation.
This growth and shift in products and offerings could lead to increased labor costs, and thereby increased costs of our products and offerings, which could result reduced customer demand and our business, operating results, cash flow, or financial condition could be materially and adversely affected.
This growth and shift in products and offerings could lead to increased labor costs, and thereby increased costs of our products and offerings, which could result in reduced customer demand and our business, operating results, cash flow, or financial condition could be materially and adversely affected.
If decreases in demand for capital equipment caused by weak or uncertain economic conditions and decreased corporate and government spending, any effects of fiscal budget balancing at the federal level or proposed legislative changes, or generally reduced expenditures for capital solutions occur, we will experience decreased revenues and lower revenue growth rates, and our business, operating results, cash flow, or financial condition could be materially and adversely affected.
If decreases in demand for capital equipment caused by weak or uncertain economic conditions and decreased corporate and government spending, any effects of fiscal budget balancing at the federal level or proposed legislative or regulatory changes, or generally reduced expenditures for capital solutions occur, we will experience decreased revenues and lower revenue growth rates, and our business, operating results, cash flow, or financial condition could be materially and adversely affected.
If our operations are found to be in violation of any of the laws described above or any other government regulations that apply to us, we may be subject to significant financial penalties and possible exclusion from participation in federal and state funded healthcare programs, and the curtailment or restricting of our operations, as well as additional reporting obligations and oversight if we become subject to a corporate integrity agreement or other agreement to resolve allegations of non-compliance with these laws.
If our operations are found in the future to be in violation of any of the laws described above or any other government regulations that apply to us, we may be subject to significant financial penalties and possible exclusion from participation in federal and state funded healthcare programs, and the curtailment or restricting of our operations, as well as additional reporting obligations and oversight if we become subject to a corporate integrity agreement or other agreement to resolve allegations of non-compliance with these laws.
In addition, the option counterparties or their respective affiliates may modify their hedge positions by entering into or unwinding various derivatives with respect to our common stock and/or purchasing or selling our common stock or other securities of ours in secondary market transactions prior to the maturity of the 2029 Notes or 2025 Notes (and are likely to do so in connection with any conversion of the 2029 Notes or 2025 Notes or redemption or repurchase of the 2029 Notes or 2025 Notes), which could cause or avoid an increase or a decrease in the market price of our common stock.
In addition, the option counterparties or their respective affiliates may modify their hedge positions by entering into or unwinding various derivatives with respect to our common stock and/or purchasing or selling our common stock or other securities of ours in secondary market transactions prior to the maturity of the 2029 Notes (and are likely to do so in connection with any conversion of the 2029 Notes or redemption or repurchase of the 2029 Notes), which could cause or avoid an increase or a decrease in the market price of our common stock.
Disruptions to, or the failure of any of these systems, and the resulting loss of critical data, which is not quickly recoverable by the effective execution of disaster recovery plans designed to reduce such disruption, could cause delays in our product development, prevent us from fulfilling our customers’ orders, and could severely affect our ability to conduct normal business operations, the result of which would adversely affect our operating results.
Disruptions to these facilities, or the failure of any of these systems, and the resulting loss of critical data, which is not quickly recoverable by the effective execution of disaster recovery plans designed to reduce such disruption, could cause delays in our product development, prevent us from fulfilling our customers’ orders, and could severely affect our ability to conduct normal business operations, the result of which would adversely affect our operating results.
The competitive challenges we face in the markets in which we operate include, but are not limited to, the following: • current or future competitors may offer or have the ability to offer a broader range of solutions than us, develop alternative solutions that provide a better customer outcome or lower cost of operation, develop new features or capabilities for their products, including AI, machine-learning, and generative AI capabilities, which are part of an intensely competitive and rapidly evolving market, that could compete with our solutions, respond more quickly and efficiently to new or changing technologies, standards, or regulations, or devote greater resources to the development, promotion, and sale of their products than we do; • competitive pressures could result in increased price competition for our products and services, fewer customer orders, and reduced gross margins; • current and potential competitors may make strategic acquisitions or establish cooperative relationships among themselves or with third parties, including larger, more established healthcare supply companies, thereby increasing their ability to develop and offer a broader suite of products and services; • our industry has recently experienced a significant degree of consolidation which could lead to competitors developing new business models that require us to adapt how we market, sell, or distribute our products or could also lead to competitors with greater economies of scale that have lower cost of operations allowing them to sell their products and services at a lower cost; • certain competitors have greater brand name recognition and a more extensive installed base than we do, and such advantages could be used to increase their market share; 28 Table of Contents • certain competitors may have existing business relationships with our current and potential customers, which may cause these customers to purchase competing products and services from these competitors; and • our competitors may secure products and services from suppliers on more favorable terms or secure exclusive arrangements with suppliers or buyers that may impede the sales of our products and services.
The competitive challenges we face in the markets in which we operate include, but are not limited to, the following: • current or future competitors may offer or have the ability to offer a broader range of solutions than us, develop alternative solutions that provide a better customer outcome or lower cost of operation, develop new features or capabilities for their products, including AI, machine-learning, and generative AI capabilities, which are part of an intensely competitive and rapidly evolving market, that could compete with our solutions, respond more quickly and efficiently to new or changing technologies, standards, or regulations, or devote greater resources to the development, promotion, and sale of their products than we do; • competitive pressures could result in increased price competition for our products and services, fewer customer orders, and reduced gross margins; • current and potential competitors may make strategic acquisitions or establish cooperative relationships among themselves or with third parties, including larger, more established healthcare supply companies, thereby increasing their ability to develop and offer a broader suite of products and services; • our industry has recently experienced a significant degree of consolidation which could lead to competitors developing new business models that require us to adapt how we market, sell, or distribute our products or could also lead to competitors with greater economies of scale that have lower cost of operations allowing them to sell their products and services at a lower cost; • certain competitors have greater brand name recognition and a more extensive installed base than we do, and such advantages could be used to increase their market share; • certain competitors may have existing business relationships with our current and potential customers, which may cause these customers to purchase competing products and services from these competitors; and • our competitors may secure products and services from suppliers on more favorable terms or secure exclusive arrangements with suppliers or buyers that may impede the sales of our products and services.
In July 2020, the Court of Justice of the EU (“CJEU”) in its Schrems II judgement limited how organizations could lawfully transfer personal data from the EEA to the US by invalidating the EU-US Privacy Shield for purposes of international transfers and imposing further restrictions on the use of standard contractual clauses (“EU SCCs”), which Omnicell utilizes such standard contractual clauses for cross-border transfers of personal data from the EEA and UK to the U.S.
In July 2020, the Court of Justice of the EU (“CJEU”) in its Schrems II judgement limited how organizations could lawfully transfer personal data from the EEA to the US by invalidating the EU-US Privacy Shield for purposes of international transfers and imposing further restrictions on the use of standard contractual clauses (“EU SCCs”), which Omnicell utilizes such standard contractual clauses for cross-border transfers of personal data from the EEA to the U.S.
The EU GDPR also provides that EU Member States may introduce further laws and regulations limiting the processing of genetic, biometric, or health data, which could limit our ability to collect, use, and share EU personal information, cause our compliance costs to increase, require us to change our practices, adversely impact our business, and harm our financial condition.
The EU GDPR also provides that EU Member States may introduce further laws and regulations limiting the processing of genetic, biometric, or health data, which could limit our ability to collect, use, and share EU personal data, cause our compliance costs to increase, require us to change our practices, adversely impact our business, and harm our financial condition.
In addition, even if holders do not elect to convert the 2029 Notes or 2025 Notes, we could be required under applicable accounting rules to reclassify all or a portion of the outstanding principal of the 2029 Notes or 2025 Notes as a current rather than long-term liability, which would result in a material reduction of our net working capital.
In addition, even if holders do not elect to convert the 2029 Notes, we could be required under applicable accounting rules to reclassify all or a portion of the outstanding principal of the 2029 Notes as a current rather than long-term liability, which would result in a material reduction of our net working capital.
In addition, the EU GDPR prohibits the international transfer of personal information from the EEA to the United States and other jurisdictions that the European Commission does not recognize as having “adequate” data protection laws unless a data transfer mechanism has been put in place or a derogation under the EU GDPR can be relied upon.
In addition, the EU GDPR prohibits the international transfer of personal data from the EEA to the United States and other jurisdictions that the European Commission does not recognize as having “adequate” data protection laws unless a data transfer mechanism has been put in place or a derogation under the EU GDPR can be relied upon.
Drug Enforcement Administration (“DEA”), or state boards of pharmacy, that we were not previously subject to; • failure to understand and compete effectively in markets in which we have limited previous experience; • substantial costs and diversion of management’s attention when evaluating and negotiating such transactions and then integrating an acquired business, including any unforeseen delays and expenditures that may result; • incurring additional debt in connection with the financing of an acquisition; • discovery, after completion of the acquisition, of liabilities assumed or internal control, regulatory or compliance issues in acquisitions that are broader in scope and magnitude or are more difficult to manage than originally assumed or identified; • difficulties assimilating and retaining key personnel of an acquired business; • failure to achieve anticipated benefits such as revenue enhancements and operational and cost efficiencies; 33 Table of Contents • difficulties in integrating newly acquired products and solutions in our offerings, or inability or failure to provide high quality service, expand bookings and sales, or effectively coordinate sales and marketing efforts after the acquisition; • inability to maintain business relationships with customers and suppliers of newly acquired companies due to post-acquisition disruption; • inability or failure to successfully integrate financial reporting and information technology systems; and • other additional risks relating to legal, regulatory or tax matters.
Drug Enforcement Administration (“DEA”), or state boards of pharmacy, that we were not previously subject to; • failure to understand and compete effectively in markets in which we have limited previous experience; • substantial costs and diversion of management’s attention when evaluating and negotiating such transactions and then integrating an acquired business, including any unforeseen delays and expenditures that may result; • incurring additional debt in connection with the financing of an acquisition; • discovery, after completion of the acquisition, of liabilities assumed or internal control, regulatory or compliance issues in acquisitions that are broader in scope and magnitude or are more difficult to manage than originally assumed or identified; • difficulties assimilating and retaining key personnel of an acquired business; • failure to achieve anticipated benefits such as revenue enhancements and operational and cost efficiencies; • difficulties in integrating newly acquired products and solutions in our offerings, or inability or failure to provide high quality service, expand bookings and sales, or effectively coordinate sales and marketing efforts after the acquisition; • inability to maintain business relationships with customers and suppliers of newly acquired companies due to post-acquisition disruption; • inability or failure to successfully integrate financial reporting and information technology systems; and • other additional risks relating to legal, regulatory or tax matters.
If we elect to settle the remainder, if any, of our conversion obligation in excess of the aggregate principal amount of the 2029 Notes or the 2025 Notes being converted in shares of our common stock or a combination of cash and shares of our common stock, any sales in the public market of our common stock issuable upon such conversion could adversely affect prevailing market prices of our common stock.
If we elect to settle the remainder, if any, of our conversion obligation in excess of the aggregate principal amount of the 2029 Notes being converted in shares of our common stock or a combination of cash and shares of our common stock, any sales in the public market of our common stock issuable upon such conversion could adversely affect prevailing market prices of our common stock.
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.
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 and the Americas. We intend to continue to expand our international operations, particularly in certain markets that we view as strategic, including the Middle East.
The EU GDPR governs the collection, use, disclosure, transfer, and other processing of personal information (i.e., data which identifies an individual or from which an individual is identifiable). The UK has implemented the EU GDPR as the UK GDPR which sits alongside the UK Data Protection Act 2018 (the UK GDPR, together with the EU GDPR, the “GDPR”).
The EU GDPR governs the collection, use, disclosure, transfer, and other processing of personal data (i.e., data which identifies an individual or from which an individual is identifiable). The UK has implemented the EU GDPR as the UK GDPR which sits alongside the UK Data Protection Act 2018 (the UK GDPR, together with the EU GDPR, the “GDPR”).
Our ability to make payments of the principal, to pay interest, or to refinance our indebtedness, including the 2025 Notes and the 2029 Notes, depends on our future performance, which is subject to economic, financial, competitive, and other factors beyond our control.
Our ability to make payments of the principal, to pay interest, or to refinance our indebtedness, including the 2029 Notes, depends on our future performance, which is subject to economic, financial, competitive, and other factors beyond our control.
In addition, the existence of the 2029 Notes or the 2025 Notes may encourage short selling by market participants because the conversion of the 2029 Notes or the 2025 Notes could be used to satisfy short positions, or anticipated conversion of the 2029 Notes or the 2025 Notes into shares of our common stock could depress the price of our common stock .
In addition, the existence of the 2029 Notes may encourage short selling by market participants because the conversion of the 2029 Notes could be used to satisfy short positions, or anticipated conversion of the 2029 Notes into shares of our common stock could depress the price of our common stock .
For these and other reasons, the sales cycle associated with sales of our systems is often lengthy, unpredictable, and subject to a number of delays over which we have little or no control.
For these and other reasons, the sales cycle associated with sales of our systems is often lengthy, unpredictable, and subject to a number of delays over some of which we have little or no control.
For example, within the European Union (“EU”), the General Data Protection Regulation 2016/679 (“EU GDPR”) went into effect on May 25, 2018, and introduced strict requirements for the processing of personal information of individuals.
For example, within the European Union (“EU”), the General Data Protection Regulation 2016/679 (“EU GDPR”) went into effect on May 25, 2018, and introduced strict requirements for the processing of personal data of individuals.
The conditional conversion feature of the 2029 Notes or the 2025 Notes, if triggered, may adversely affect our financial condition and operating results. The 2029 Notes are convertible on or after August 1, 2029 and, in the event the conditional conversion features are triggered, prior to August 1, 2029.
The conditional conversion feature of the 2029 Notes, if triggered, may adversely affect our financial condition and operating results. The 2029 Notes are convertible on or after August 1, 2029 and, in the event the conditional conversion features are triggered, prior to August 1, 2029.
The GDPR imposes stringent obligations on companies that fall within its scope, including inter alia: (i) accountability and transparency requirements, requiring controllers to demonstrate and record compliance with the GDPR and to provide more detailed information to data subjects regarding processing of their personal information; (ii) obligations to comply with data protection rights of data subjects including a right: (x) of access to, erasure of, or rectification of personal data; (y) to restriction of processing or to withdraw consent to processing; and (z) to object to processing or to ask for a copy of personal data to be provided to a third party; (iii) obligations to consider data protection as any new products or services are developed and designed (including e.g., to limit the amount of personal information processed); (iv) requirements to process personal 30 Table of Contents information lawfully including specific requirements for obtaining valid consent where consent is the lawful basis for processing; (v) an obligation to report personal data breaches to: (x) the data supervisory authority without undue delay (and no later than 72 hours after discovering the personal data breach, where feasible), unless the personal data breach is unlikely to result in a risk to the data subjects’ rights and freedoms; and (y) affected data subjects, where the personal data breach is likely to result in a high risk to their rights and freedoms.
The GDPR imposes stringent obligations on companies that fall within its scope, including inter alia: (i) accountability and transparency requirements, requiring controllers to demonstrate and record compliance with the GDPR and to provide more detailed information to data subjects regarding processing of their personal data; (ii) obligations to comply with data protection rights of data subjects including a right: (x) of access to, erasure of, or rectification of personal data; (y) to restriction of processing or to withdraw consent to processing; and (z) to object to processing or to ask for a copy of personal data to be provided to a third party; (iii) obligations to consider data protection as any new products or services are developed and designed (including e.g., to limit the amount of personal data processed); (iv) requirements to process personal data lawfully including specific requirements for obtaining valid consent where consent is the lawful basis for processing; (v) an obligation to report personal data breaches to: (x) the applicable supervisory authority without undue delay (and no later than 72 hours after discovering the personal data breach, where feasible), unless the personal data breach is unlikely to result in a risk to the data subjects’ rights and freedoms; and (y) affected data subjects, where the personal data breach is likely to result in a high risk to their rights and freedoms.
It is unclear how future efforts to challenge, repeal, replace, or otherwise modify, or alter the implementation or interpretation of the ACA will affect our business, operating results, cash flow, or financial condition.
It is unclear how the OBBBA or future efforts to challenge, repeal, replace, or otherwise modify, or alter the implementation or interpretation of the ACA will affect our business, operating results, cash flow, or financial condition.
If financial or industry analysts have difficulty understanding the changes to our business model, or we fail to meet (or significantly exceed) our publicly announced financial guidance, our stock price and trading volume could decline.
If financial or industry analysts have difficulty understanding changes to our business model, or we fail to meet (or significantly exceed) our publicly announced financial guidance, our stock price and trading volume could decline.
The Second A&R Credit Agreement contains various customary covenants that require us to provide financial and other information reporting as well as notice upon certain events and limit or restrict our ability and/or our subsidiaries’ ability to, among other things, incur or assume liens or additional debt or provide guarantees in respect of obligations of other persons; issue redeemable preferred stock; pay dividends or distributions or redeem or repurchase capital stock; prepay, redeem, or repurchase certain debt; make loans, investments, acquisitions, and capital expenditures; enter into agreements that restrict distributions from our subsidiaries; sell assets and capital stock of our subsidiaries; enter into certain transactions with affiliates; and consolidate or merge with or into, or sell substantially all of our assets to, another person.
The Second A&R Credit Agreement contains various customary covenants that require us to provide financial and other information reporting as well as notice upon certain events and limit or restrict our ability and/or our subsidiaries’ ability 39 Table of Contents to, among other things, incur or assume liens or additional debt or provide guarantees in respect of obligations of other persons; issue redeemable preferred stock; pay dividends or distributions or redeem or repurchase capital stock; prepay, redeem, or repurchase certain debt; make loans, investments, acquisitions, and capital expenditures; enter into agreements that restrict distributions from our subsidiaries; sell assets and capital stock of our subsidiaries; enter into certain transactions with affiliates; and consolidate or merge with or into, or sell substantially all of our assets to, another person.
Any increase in our effective tax rate would reduce our profitability. On December 15, 2022, the EU Member States formally adopted the EU's Pillar Two Directive, which generally provides for a minimum effective tax rate of 15%, as established by the Organization for Economic Co-operation and Development (OECD) Pillar Two Framework that was supported by over 130 countries worldwide.
Any increase in our effective tax rate would reduce our profitability. On December 15, 2022, the EU Member States formally adopted the EU's Pillar Two Directive, which generally provides for a minimum effective tax rate of 15%, as established by the Organization for Economic Co-operation and Development (“OECD”) Pillar Two Framework that was supported by over 130 countries worldwide.
Government regulations, legislative changes, fraud and anti-kickback statutes, product 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 could adversely impact our business and operating results. • Data Security Risks.
Government regulations, legislative changes, fraud and anti-kickback statutes, product 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 could adversely impact our business and operating results. • International Operations Risks.
The loss of any of these relationships could impact the breadth of our customer base and could impair our ability to meet our revenue or revenue growth rate targets or our ability to increase our revenues.
The loss of any of these relationships could impact the breadth of our customer base and could impair our ability to meet our revenue or revenue growth targets or our ability to increase our revenues.
Changes to the 340B Program could negatively impact our 340B Program-related services. Any changes to the 340B Drug Pricing Program, such as changes to the scope of, or requirements for participation in, the 340B Program, could negatively impact our 340B Program-related services.
Changes to the 340B Program could negatively impact our business. Any changes to the 340B Drug Pricing Program, such as changes to the scope of, or requirements for participation in, the 340B Program, could negatively impact our 340B Program-related services.
In addition to other factors discussed in this “Risk Factors” section, factors, many of which are outside of our control and are difficult to predict, that may cause our quarterly or annual operating results to fluctuate include, but are not limited to, the following: • the size, product mix, and timing of orders for our products, and their installation and integration and whether our estimates for the same were proper; • our ability to successfully install our products on a timely basis and meet other contractual obligations necessary to recognize revenue; • fluctuations in customer demand for our products, including due to changes in our customers’ budgets, healthcare worker turnover rates and labor shortages and whether customer demand was properly estimated; • our ability to control costs, including operating expenses, and continue cost reduction efforts, such as our restructuring initiative; • changes in pricing policies by us or our competitors; • the number, timing, and significance of product enhancements and new product announcements by us or our competitors; • the timing and significance of any acquisition or business development transactions that we may consider or negotiate and the revenues, costs, and earnings that may be associated with these transactions; • the relative proportions of revenues we derive from products and services; • our ability to generate cash from our accounts receivable on a timely basis; • changes in, and our ability to successfully execute on, our business strategy; and • macroeconomic and political conditions, including fluctuations in interest rates, tax increases, availability of credit markets, and trade and tariff actions.
In addition to other factors discussed in this “Risk Factors” section, factors, many of which are outside of our control and are difficult to predict, that may cause our quarterly or annual operating results to fluctuate include, but are not limited to, the following: • the size, product mix, and timing of orders for our products, and their installation and integration and whether our estimates for the same were proper; 44 Table of Contents • our ability to successfully install our products on a timely basis and meet other contractual obligations necessary to recognize revenue; • fluctuations in customer demand for our products, including due to changes in our customers’ budgets, healthcare worker turnover rates and labor shortages and whether customer demand was properly estimated; • our ability to control costs, including operating expenses, and continue cost reduction efforts, such as our restructuring initiative; • changes in pricing policies by us or our competitors; • the number, timing, and significance of product enhancements and new product announcements by us or our competitors; • the timing and significance of any acquisition or business development transactions that we may consider or negotiate and the revenues, costs, and earnings that may be associated with these transactions; • the relative proportions of revenues we derive from products and services; • our ability to generate cash from our accounts receivable on a timely basis; • changes in, and our ability to successfully execute on, our business strategy; and • macroeconomic and political conditions, including inflationary pressures, fluctuations in interest rates, exchange rates, tax increases, availability of credit markets, and trade and tariff actions.
While we have implemented a number of security measures designed to protect our systems and data, including firewalls, antivirus and malware detection tools, patches, log monitors, routine back-ups, system audits, routine password modifications, employee training, and disaster recovery procedures, and have designed certain security features into our solutions, we and our third party service providers regularly defend against and respond to data security incidents and such measures may not be adequate or implemented properly to prevent or fully address the adverse effect of such events.
While we have implemented a number of security measures designed to protect our systems and data, including firewalls, antivirus and malware detection tools, patches, log monitors, routine back-ups, system audits, routine password modifications, employee training, and disaster recovery procedures, and have designed certain security features into our 28 Table of Contents solutions, we and our third party service providers regularly defend against and respond to data security incidents and such measures may not be adequate or implemented properly to prevent or fully address the adverse effect of such events.
For additional information, see the risk factor captioned “ We are subject to laws, regulations, and other legal obligations related to 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 could harm our business ” above for additional information.
For additional information, see the risk factor captioned “ We are subject to laws, regulations, and other legal obligations related to 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 could harm our business ” below for additional information.
The market price of our common stock has been and may continue to be highly volatile in response to various factors discussed in this “Risk Factors” section, many of which are beyond our control, including: • actual or anticipated changes in our operating results or forecasts, and whether our operating results meet our publicly announced guidance or expectations of securities analysts or investors; • changes in the ratings of our common stock by securities analysts or changes in their earnings estimates; • changes in our business model and initiatives, such as our ongoing transition to focus on a subscription-based business model o r a decision to exit a particular business or product line, and our ongoing restructuring initiatives to contain costs; • developments in our customer relationships; • changes in our Board of Directors, senior management, or key personnel; • announcements by us or our competitors of technological innovations or new products; • mergers, acquisitions, combinations, and other significant transactions involving us or our competitors; • our sale of our common stock or other securities; • level of demand for our common stock, and actions by stockholders or short sellers of our common stock; • changes in laws or regulations applicable to our products or services; • our involvement in any litigation or investigations by government authorities, including litigation judgments, settlements, or other litigation-related costs; 41 Table of Contents • cyber events, such as breaches of data security or cyber-attacks on our systems or solutions; • epidemics, pandemics, or other major public health crises; or • general economic, regulatory, political and market conditions.
The market price of our common stock has been and may continue to be highly volatile in response to various factors discussed in this “Risk Factors” section, many of which are beyond our control, including: • actual or anticipated changes in our operating results or forecasts, and whether our operating results meet our publicly announced guidance or expectations of securities analysts or investors; • changes in the ratings of our common stock by securities analysts or changes in their earnings estimates; • changes in our business model and initiatives, such as our ongoing transition to focus on a subscription-based business model or a decision to optimize our portfolio or to exit a particular business or product line, and our ongoing restructuring initiatives to contain costs; • developments in our customer relationships; • changes in our Board of Directors, senior management, or key personnel; • announcements by us or our competitors of technological innovations or new products; • mergers, acquisitions, combinations, and other significant transactions involving us or our competitors; • our sale of our common stock or other securities; • level of demand for our common stock, and actions by stockholders or short sellers of our common stock; • changes in laws or regulations applicable to our products or services; • our involvement in any litigation or investigations by government authorities, including litigation judgments, settlements, or other litigation-related costs; • cyber events, such as breaches of data security or cyber-attacks on our systems or solutions; • epidemics, pandemics, or other major public health crises; or • general economic, regulatory, political and market conditions.
Any of the foregoing could make our existing and future solutions obsolete and unmarketable, or result in loss of market share or a determination to exit a particular business or product line, damage our reputation or otherwise harm our business, operating results, cash flow, or financial condition.
Any of the foregoing could make our existing and future solutions obsolete and unmarketable, or result in loss of market share or a determination to optimize our portfolio or exit a particular business or product line, damage our reputation or otherwise harm our business, operating results, cash flow, or financial condition.
Upon conversion of the 2029 Notes or the 2025 Notes, we have the option to pay or deliver, as the case may be, cash, shares of our common stock, or a combination of cash and shares of our common stock in respect of the remainder, if any, of our conversion obligation in excess of the aggregate principal amount of the 2029 Notes or the 2025 Notes, as applicable, being converted.
Upon conversion of the 2029 Notes, we have the option to pay or deliver, as the case may be, cash, shares of our common stock, or a combination of cash and shares of our common stock in respect of the remainder, if any, of our conversion obligation in excess of the aggregate principal amount of the 2029 Notes being converted.
The convertible note hedge and warrant transactions may affect the value of our common stock. In connection with the offering of the 2029 Notes and 2025 Notes, respectively, we entered into convertible note hedge transactions with an affiliate of one of the initial purchasers of the 2029 Notes and 2025 Notes and certain other financial institutions (the “option counterparties”).
The convertible note hedge and warrant transactions may affect the value of our common stock. In connection with the offering of the 2029 Notes, we entered into convertible note hedge transactions with an affiliate of one of the initial purchasers of the 2029 Notes and certain other financial institutions (the “option counterparties”).
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 our supply chain and costs, which could, in turn, adversely affect our business, operating results, cash flow, or financial condition.
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.
We can provide no assurances that the hedge or warrant transactions will have the intended effects or as to the financial stability or viability of the option counterparties. General Risk Factors Changes in our tax rates, exposure to additional tax liabilities, or the adoption of new tax legislation could adversely affect our business, operating results, cash flow, or financial condition.
We can provide no assurances that the hedge or warrant transactions will have the intended effects or as to the financial stability or viability of the option counterparties. 46 Table of Contents General Risk Factors Changes in our tax rates, exposure to additional tax liabilities, or the adoption of new tax legislation could adversely affect our business, operating results, cash flow, or financial condition.
If we inaccurately anticipate technological innovations or market trends or fail to generate sufficient revenue to develop new products, enhance existing products to meet customer needs or technological or regulatory change, or are unable to fund investment in, or achieve expected return on investment from, future product development, our ability to generate future revenues or revenue growth may be negatively impacted, which could have a material adverse effect on our business, operating results, cash flow, or financial condition.
If we inaccurately anticipate technological innovations or market trends or fail to generate sufficient revenue 25 Table of Contents to develop new products, enhance existing products to meet customer needs or technological or regulatory change, or are unable to fund investment in, or achieve expected return on investment from, future product development, our ability to generate future revenues or revenue growth may be negatively impacted, which could have a material adverse effect on our business, operating results, cash flow, or financial condition.
In addition, since revenues are generally recognized over the term of the subscription, any decrease in customer purchases of our 26 Table of Contents subscription-based products and services will not be fully reflected in our operating results until future periods, which may result in inflated revenue growth rates that do not reflect such decreases initially.
In addition, since revenues are generally recognized over the term of the subscription, any decrease in customer purchases of our subscription-based products and services will not be fully reflected in our operating results until future periods, which may result in inflated revenue growth rates that do not reflect such decreases initially.
Weak or uncertain economic conditions may adversely impact our business, as well as any reduction in demand for or adoption or installation of Omnicell’s medication management solutions, medication packaging systems, or related services. • Strategic Risks.
Weak or uncertain economic conditions may adversely impact our business, as well as any reduction in demand for, or adoption or installation of Omnicell’s medication management solutions, medication packaging systems, or related services.
Furthermore, if we cannot maintain the expected level of service or if our customers fail to achieve agreed upon milestone improvements in financial or operating metrics, payments to us from such customers may be delayed, disputed, or lower than anticipated. We may not be able to retain our SaaS and Expert Services customers.
Furthermore, if we cannot maintain the expected level of service or if our customers fail to achieve agreed upon milestone improvements in financial or operating metrics, payments to us from such customers may be delayed, disputed, or lower than anticipated. 29 Table of Contents We may not be able to retain our SaaS and Expert Services customers.
Additionally, on January 6, 2025, HHS OCR issued a Notice of Proposed Rulemaking (“NPRM”) aiming to strengthen cybersecurity protections and better defend against cyber threats targeting the U.S. health care 29 Table of Contents system by bolstering the security safeguards required under the HIPAA Security Rule.
Additionally, on January 6, 2025, HHS OCR issued a Notice of Proposed Rulemaking (“NPRM”) aiming to strengthen cybersecurity protections and better defend against cyber threats targeting the U.S. health care system by bolstering the security safeguards required under the HIPAA Security Rule.
Current litigation brought by multiple manufacturers is challenging the Health Resources and Services Administration’s requirement to offer the 340B ceiling price on drugs dispensed at contract pharmacies. The decisions that have been issued to date have been narrowly tailored and appeals have been filed in some of the cases.
Current litigation brought by multiple manufacturers is challenging the Health Resources and Services Administration (“HRSA”) requirement to offer the 340B ceiling price on drugs dispensed at contract pharmacies. The decisions that have been issued to date have been narrowly tailored and appeals have been filed in some of the cases.
In the United States, these include federal health information privacy laws (such as the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”), discussed below), security breach notification laws, and consumer protection laws, as well as state laws addressing privacy and data security (such as the California Consumer Privacy Act of 2018 (“CCPA”), as amended by the California Privacy Rights Act of 2020 (collectively, the “CPRA”).
In the United States, these include federal health information privacy laws (such as the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”), discussed below), and state laws addressing privacy, security, and breach notification (such as the California Consumer Privacy Act of 2018 (“CCPA”), as amended by the California Privacy Rights Act of 2020 (collectively, the “CPRA”)).
Delaware law also prohibits corporations from engaging in a business combination with any holders of 15% or more of their capital stock until the holder has held the stock for three years unless, among other possibilities, our Board of Directors approves the transaction.
Delaware law also prohibits corporations from engaging in a business combination with any holders of 15% or more of their capital stock until the holder 45 Table of Contents has held the stock for three years unless, among other possibilities, our Board of Directors approves the transaction.
See “ We operate in highly competitive markets, and we may be unable to compete successfully ” above for additional information. Government regulation of the healthcare industry could reduce demand for our products or services, or substantially increase the cost to produce our products or deliver our services.
See “ We operate in highly competitive markets, and we may be unable to compete successfully ” above for additional information. 36 Table of Contents Government regulation of the healthcare industry could reduce demand for our products or services, or substantially increase the cost to produce our products or deliver our services.
Also, our convertible note hedge transactions may decrease the value of our common stock. General Risks • We may be subject to adverse consequences related to tax rates and changes in tax legislation, and any failure to maintain effective internal control over financial reporting.
Also, our convertible note hedge and warrant transactions may affect the value of our common stock. General Risks • We may be subject to adverse consequences related to tax rates and changes in tax legislation, and any failure to maintain effective internal control over financial reporting.
Due to increasing data collection and data flows, as well as the use of emerging technologies (such as AI), regulations 31 Table of Contents in this area are constantly evolving with regulatory and legislative authorities in numerous parts of the world adopting proposals to regulate data and protect information.
Due to increasing data collection and data flows, as well as the use of emerging technologies (such as AI), regulations in this area are constantly evolving with regulatory and legislative authorities in numerous parts of the world adopting proposals to regulate data and protect information.
As a result, if our financial results fail to meet (or significantly exceed) our publicly announced financial guidance or 42 Table of Contents the expectations of analysts or investors, analysts could downgrade our common stock or publish unfavorable research that could cause our stock price or trading volume to decline, potentially significantly.
As a result, if our financial results fail to meet (or significantly exceed) our publicly announced financial guidance or the expectations of analysts or investors, analysts could downgrade our common stock or publish unfavorable research that could cause our stock price or trading volume to decline, potentially significantly.
The purchase of our systems often entails larger strategic purchases by customers that generally require more complex and stringent contractual requirements, involve a significant commitment of management attention and resources by prospective customers, 25 Table of Contents and require the input and approval of many decision-makers.
The purchase of our systems often entails larger strategic purchases by customers that generally require more complex and stringent contractual requirements, involve a significant commitment of management attention and resources by prospective customers, and require the input and approval of many decision-makers.
These laws could 35 Table of Contents restrict the ability of Omnicell and/or our customers to obtain, use, or disseminate patient information, which could reduce the demand for our products or services or force us to redesign our products or services in order to meet regulatory requirements.
These laws could restrict the ability of Omnicell and/or our customers to obtain, use, or disseminate patient information, which could reduce the demand for our products or services or force us to redesign our products or services in order to meet regulatory requirements.
Approximately 8% of our revenues during the year ended December 31, 2024 were generated from the sale of consumable medication packages, most of which are produced in our St. Petersburg, Florida facility on a continuous basis and are shipped out to fulfill the demands of our institutional and retail pharmacy customers domestically and abroad.
Approximately 8% of our revenues during the year ended December 31, 2025 was generated from the sale of consumable medication packages, most of which are produced in our St. Petersburg, Florida facility on a continuous basis and are shipped out to fulfill the demands of our institutional and retail pharmacy customers domestically and abroad.
In certain circumstances, the failure of any of our suppliers or us to perform adequately could 39 Table of Contents result in quality control issues affecting end users’ acceptance of our products, which could damage customer relationships and harm our business.
In certain circumstances, the failure of any of our suppliers or us to perform adequately could result in quality control issues affecting end users’ acceptance of our products, which could damage customer relationships and harm our business.
Also, in the event that any of our products is defective, we may be required to recall or redesign those products, which could result in increased costs and have an adverse impact on our results of operation.
Also, in the event that any of our products is defective, we may be required to recall or redesign those products, which could result in increased costs and have an adverse impact on our business.
Our success depends in part on our ability to obtain patent protection for technology and processes, and our ability to preserve our trademarks, copyrights, and trade secrets.
Our success depends in part on our ability to obtain patent protection for technology and processes, as well as our ability to preserve our trademarks, copyrights, and trade secrets.
However, these policies and protective contractual terms may not be adequate against product liability claims and in the past we have been subject to certain lawsuits asserting, 40 Table of Contents among other allegations, claims of product liability.
However, these policies and protective contractual terms may not be adequate against product liability claims and in the past we have been subject to certain lawsuits asserting, among other allegations, claims of product liability.
ITEM 1B. UNRESOLVED STAFF COMMENTS There are currently no unresolved issues with respect to any SEC staff’s written comments. 45 Table of Contents
ITEM 1B. UNRESOLVED STAFF COMMENTS There are currently no unresolved issues with respect to any SEC staff’s written comments. 47 Table of Contents
Many of these systems are housed or supported in or around our corporate facility located in Northern California, near major earthquake faults and which may be vulnerable to climate change effects, and where a significant portion of our research and development activities and other critical business operations take place.
Many of these facilities or systems are located or supported in or around Northern California, near major earthquake faults and which may be vulnerable to climate change effects, and where a significant portion of our research and development activities and other critical business operations take place.
Any failure to prevent such security breaches or privacy violations, or implement satisfactory remedial measures, could require us to expend significant resources to investigate security breaches and notify affected individuals, remediate any damage, disrupt our operations or the operations of our customers, damage our reputation or cause us to incur costs to manage public relations issues, damage our relationships with our customers, or expose us to a risk of financial loss, litigation, regulatory penalties, contractual indemnification obligations, or other liability.
Any failure to prevent such security breaches or privacy violations, or implement satisfactory remedial measures, could require us to expend significant resources to investigate security breaches and notify affected individuals, regulators, and other third parties (e.g., the media), remediate any damage, disrupt our operations or the operations of our customers, damage our reputation or cause us to incur costs to manage public relations issues, damage our relationships with our customers, or expose us to a risk of financial loss, litigation, regulatory penalties, contractual indemnification obligations, or other liability.
In addition, the resulting organizations could have greater bargaining power, which may lead to price erosion. This consolidation could also result in new entrants in the markets in which we 34 Table of Contents operate, which presents additional risk and could result in adverse impacts on our business.
In addition, the resulting organizations could have greater bargaining power, which may lead to price erosion. This consolidation could also result in new entrants in the markets in which we operate, which presents additional risk and could result in adverse impacts on our business.
If we fail to maintain effective internal control over financial reporting, as such standards are modified, supplemented, 44 Table of Contents or amended from time to time, we may not be able to ensure that we can conclude on an ongoing basis that we have effective internal control over financial reporting.
If we fail to maintain effective internal control over financial reporting, as such standards are modified, supplemented, or amended from time to time, we may not be able to ensure that we can conclude on an ongoing basis that we have effective internal control over financial reporting.
The GDPR has direct effect where an entity is established in the European Economic Area (“EEA”) or the UK (as applicable) and has extraterritorial effect, including where an organization outside of the EEA or the UK processes personal information in relation to the offering of goods or services to those individuals or the monitoring of their behavior while those individuals are in the EEA or UK.
The GDPR has direct effect where an 33 Table of Contents entity is established in the European Economic Area (“EEA”) or the UK (as applicable) and has extraterritorial effect, including where an organization outside of the EEA or the UK processes personal data in relation to the offering of goods or services to those individuals or the monitoring of their behavior while those individuals are in the EEA or UK.
We cannot predict what 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 actions may be taken by the other countries in retaliation, including reciprocal tariffs.
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.
Other critical systems are housed in communities that have been subject to significant tropical storms, such St. Petersburg, Florida, which is the location of our manufacturing facilities for our consumable medication packages. In the future, tropical storms may be intensified or occur with increasing frequency as a result of climate change.
Other critical systems are housed in communities that have been subject to significant tropical storms, such St. Petersburg, Florida, which is the location of our manufacturing facilities for our consumable medication packages. In the future, tropical storms may be intensified or occur with increasing frequency.
Furthermore, pursuant to changes in HIPAA under the American Recovery and Reinvestment Act of 2009, we are covered under HIPAA similar to other covered entities and, in some cases, subject to the same civil and criminal penalties as a covered entity.
Furthermore, pursuant to changes in HIPAA under the American Recovery and Reinvestment Act of 2009 and the 2013 Omnibus Final Rule, we are covered under HIPAA similar to other covered entities and, in some cases, subject to the same civil and criminal penalties as a covered entity.
If one or more holders elect to convert the 2029 Notes or 2025 Notes, 43 Table of Contents we would be required to settle any converted principal amount of such 2029 Notes or 2025 Notes through the payment of cash, which could adversely affect our liquidity.
If one or more holders elect to convert the 2029 Notes, we would be required to settle any converted principal amount of such 2029 Notes through the payment of cash, which could adversely affect our liquidity.
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; 36 Table of Contents • 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; • 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.
Our international operations subject us to a variety of risks, including: • our reliance on distributors for the sale of our medication management solutions in certain countries; • 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 (including tariffs), 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; • political unrest, terrorism, and other potential hostilities (such as the ongoing conflicts between Russia and Ukraine or Israel and Hamas, or future conflict between the United States and Iran), or threats of terrorism or potential hostilities (such as conflict between China and Taiwan), including in areas in which we have facilities or operations; and • epidemics, pandemics, or other major public health crises.
In addition, they also may not be competitive with, or rendered obsolete by, other products using new or alternative technologies that offer comparable performance and functionality, such as AI, machine-learning, and generative AI capabilities, may not be accepted in new or existing markets, or may not achieve expected return on investment.
Furthermore, our products and services also may not be competitive with, or rendered obsolete by, other products using new or alternative technologies that offer comparable performance and functionality, such as AI, machine-learning, and generative AI capabilities, may not be accepted in new or existing markets, or may not achieve expected return on investment.
If our SaaS and Expert Services customers decline to renew their subscriptions or decide to terminate their agreements early, if permitted, we would not derive the expected financial benefits from that customer, which could have a material adverse effect on our business, operating results, cash flow, or financial condition.
If our SaaS and Expert Services customers decline to renew their subscriptions we would not derive the expected financial benefits from that customer, which could have a material adverse effect on our business, operating results, cash flow, or financial condition.
Our competitive position and financial condition may suffer if we fail to keep pace with rapidly evolving technological developments related to advances in artificial intelligence (“AI”), machine-learning, and generative AI technologies.
Our competitive position and financial condition may suffer if we fail to keep pace with rapidly evolving technological developments related to advancements in artificial intelligence (“AI”), machine-learning, generative AI or agentic AI technologies.
In addition, we may incorporate artificial intelligence technologies into certain of our products, services, and processes or our vendors may incorporate artificial intelligence tools into their offerings that may result in enhanced governmental or regulatory scrutiny, litigation, compliance issues, ethical, confidentiality, or security concerns. • Institutional, Retail, and Specialty Pharmacy Risks.
In addition, we may incorporate artificial intelligence technologies into certain of our products, services, and processes or our vendors may incorporate artificial intelligence tools into their offerings that may result in enhanced governmental or regulatory scrutiny, litigation, compliance issues, ethical, confidentiality, or security concerns. • Data Security Risks.
While we have generally been able to obtain adequate supplies of all components and raw materials in a timely manner from existing sources, or where necessary, from alternative sources, we entered into relationships with new suppliers in connection with the launch of our XT Series products. We engage multiple single source third-party manufacturers to build several of our sub-assemblies.
While we have generally been able to obtain adequate supplies of all components and raw materials in a timely manner from existing sources, or where necessary, from alternative sources, we entered into relationships with certain suppliers for components for our XT Series and Titan XT products. We engage multiple single source third-party manufacturers to build several of our sub-assemblies.
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 and supply remains constrained, which has resulted in, and may continue to result in, increased costs for Omnicell and thereby potentially lower profit margins.
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, increased costs for Omnicell and thereby potentially lower profit margins.
Customers may elect not to renew their subscriptions upon expiration, or they may attempt to renegotiate pricing or other contractual terms at or prior to renewal to terms that are less favorable to us.
Customers 31 Table of Contents may elect not to renew their subscriptions upon expiration, or they may attempt to renegotiate pricing or other contractual terms at or prior to renewal to terms that are less favorable to us.
These new ventures may be inherently risky and may not be successful. Even if successful, they may not have the projected or actual impact that we initially expected or that recoups our initial investment and we may make a determination to exit a particular business strategy, initiative, product line or solution.
These new 43 Table of Contents ventures may be inherently risky and may not be successful. Even if successful, they may not have the projected or actual impact that we initially expected or that recoups our initial investment and we may make a determination to optimize our portfolio or to exit a particular business strategy, initiative, product line or solution.
Additionally, data and digital services regulation continues to expand, particularly with respect to AI and automated decision making, which may further impact our business and regulatory compliance strategies.
Additionally, data and digital services regulation continues to expand, particularly with respect to AI and automated decision making, which may further impact our business and regulatory compliance strategies. Furthermore, the U.S.
As our business needs change, we may need to expand or update our IT systems. We also utilize third-party cloud services in connection with our operations, which also may need to be expanded or updated as our business needs change.
We also utilize third-party cloud services in connection with our operations, which also may need to be expanded or updated as our business needs change.
Failure to attract and retain key personnel could harm our competitive position, operating results, and financial condition. 38 Table of Contents Our failure to protect our intellectual property rights could negatively affect our ability to compete.
Failure to attract and retain key personnel could harm our competitive position, operating results, and financial condition. Our failure to protect our intellectual property rights could negatively affect our ability to compete.
We sell certain solutions that receive, store, and process our customers’ data. For example, our Inventory Optimization Service solution combines a cloud-based predictive intelligence platform with expert services designed to monitor pharmacy operations and recommend opportunities to help improve efficiency, regulatory compliance, and patient outcomes.
We sell certain solutions that receive, store, and process our customers’ data, including our OmniSphere offering. In addition, our Inventory Optimization Service solution combines a cloud-based predictive intelligence platform with expert services designed to monitor pharmacy operations and recommend opportunities to help improve efficiency, regulatory compliance, and patient outcomes.
While a final rule has not yet been issued (as the NPRM is open for public comment until March 7, 2025), if adopted, these proposed changes would potentially require significant operational adjustments and potential cost increases to comply, and are expected to become final in approximately 180 days from publication of any final rule.
While a final rule has not yet been issued (as the NPRM was open for public comment until March 7, 2025 and HHS is currently reviewing those comments), if adopted, these proposed changes would potentially require significant operational adjustments and potential cost increases to comply, 32 Table of Contents and are expected to become final in approximately 180 days from publication of any final rule.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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The Chief Information Officer works closely with the Company’s management team in all facets of its ERM risk mitigation activities related to cybersecurity and information security risks.
The Chief Information Security Officer works closely with the Company’s management team in all facets of its ERM risk mitigation activities related to cybersecurity and information security risks.
The SIRT includes individuals responsible for assessing, containing, and responding to incidents, as well as those responsible for assessing the business and legal impacts, reporting incidents as appropriate, communicating to internal and external stakeholders, and engaging with industry and government response partners to coordinate information and resource sharing when needed.
The SIRT includes individuals responsible for assessing, containing, and responding to incidents, as well as those responsible for assessing the business and legal impacts, reporting incidents as appropriate, communicating to internal and external stakeholders, and engaging with industry and government partners to coordinate information and resource sharing when needed.
ITEM 1C. CYBERSECURITY In general, the Company addresses cybersecurity risks through a comprehensive approach that is focused on preserving the security of its information and by identifying, preventing and mitigating cybersecurity threats, as well as effectively responding to cybersecurity incidents when they occur.
ITEM 1C. CYBERSECURITY In general, the Company addresses cybersecurity risks through a comprehensive approach that is focused on preserving the security of its information, products and environments by identifying, preventing and mitigating cybersecurity threats, as well as effectively responding to cybersecurity incidents when they occur.
Incident Response In the event of a cybersecurity incident, dependent upon the nature of the incident, the Company has a Security Incident Response Team (“SIRT”) that is comprised of employees who have responsibility and authority to act during a cyber incident without delay, including, dependent upon the nature of the incident, the Company’s Chief Legal Officer, Chief Information Security Officer and Chief Information Officer.
Incident Response In the event of a cybersecurity incident, dependent upon the nature of the incident, the Company has a Security Incident Response Team (“SIRT”) that is comprised of employees who have responsibility and authority to act during a cyber incident without delay, including, dependent upon the nature of the incident, the Company’s Chief Legal and Administrative Officer or Chief Information Security Officer.
Enterprise Risk Management The Company utilizes a structured, biannual ERM process to identify, assess, and address material risks facing the Company, including cybersecurity risks, during which business leaders across the Company are surveyed about current and emerging risk areas.
Enterprise Risk Management The Company utilizes a structured, biennial ERM process to identify, assess, and address material risks facing the Company, including cybersecurity risks, during which business leaders across the Company are surveyed about current and emerging risk areas.
The Company believes that this comprehensive approach helps to ensure that the highest levels of oversight is provided to its cybersecurity risk management activities and fosters collaborative consultation between management and the Board.
The Company believes that this comprehensive approach helps to ensure that the highest level of oversight is provided to its cybersecurity risk management activities and fosters collaborative consultation between management and the Board.
These reports include semi-annual cybersecurity updates from the Company’s Chief Information Officer and quarterly reports from the Company’s risk management personnel on the progress of the Company’s broader Enterprise Risk Management (“ERM”) risk mitigation activities. As part of the ERM process, the Audit Committee provides input on key risks for the Company to consider.
These reports include quarterly cybersecurity updates from the Company’s Chief Information Security Officer and quarterly reports from the Company’s risk management personnel on the progress of the Company’s broader Enterprise Risk Management (“ERM”) risk mitigation activities. As part of the ERM process, the Audit Committee provides input on key risks for the Company to consider.
The Company also engages third parties to assist in its cybersecurity management efforts, such as the leading incident response provider mentioned above and another provider to perform continuous monitoring and regular penetration testing of its information security systems and environment.
The Company also engages third parties to assist in its cybersecurity management efforts, such as the leading cybersecurity forensic firm mentioned above and another provider to perform continuous monitoring and regular penetration testing of its information security systems and environment.
In addition, the Company maintains insurance that responds to cyber-attacks, which coverage limit and cost is discussed and reviewed with the Audit Committee annually. The Company has what it believes are appropriate physical, technical, and administrative controls in place that are designed to protect customers’ data.
The Company’s solutions incorporate cybersecurity features that are routinely analyzed. In addition, the Company maintains insurance that responds to cyber-attacks, which coverage limit and cost is discussed and reviewed with the Audit Committee annually. The Company has what it believes are appropriate physical, technical, and administrative controls in place that are designed to protect customers’ data.
During a cybersecurity incident, as warranted, the SIRT keeps the Company’s senior leadership and Board apprised of the response to the incident, any material operational or 46 Table of Contents business impacts, and any material internal or external communications regarding the incident.
During a cybersecurity incident, as warranted, the SIRT keeps the Company’s senior leadership and Board apprised of the response to the incident, any material operational or business impacts, and any material internal or external communications regarding the incident. The SIRT will also seek the input of the Company’s senior leadership and Board, as needed, when addressing a cybersecurity incident.
In addition, the full Board periodically participates in cybersecurity-related table-top exercises and receives incident reports from the SIRT (as defined herein) as significant matters may arise .
In addition, the full Board receives semiannual updates from the Chief Information Security Officer and periodically participates in cybersecurity-related tabletop exercises and receives incident reports from the SIRT (as defined herein) as significant matters may arise .
In addition, the Company has continued its efforts to migrate its platforms to cloud-based computing, which is designed to further strengthen its security posture. The Company has focused on its incident response procedures and retained a leading incident response provider. The Company has also recently strengthened its disaster recovery procedures. The Company’s solutions incorporate cybersecurity features that are routinely analyzed.
In addition, the Company has continued its efforts to migrate its platforms to cloud-based computing, which is designed to further strengthen its security posture. The Company has continued to focus on maturing its incident response procedures and has retained a leading cybersecurity forensic firm. The Company also continues to strive to enhance its disaster recovery procedures.
The SIRT will also seek the input of the Company’s senior leadership and Board, as needed, when addressing a cybersecurity incident. Upon resolution of a cybersecurity incident, generally, the Audit Committee will review the incident, the impact and the mitigation efforts and remediation actions the Company will implement.
Upon resolution of a cybersecurity incident, generally, the Audit Committee will review the incident, the impact and the mitigation efforts and remediation actions the Company will implement. The Audit Committee then monitors the completion of the remediation actions and mitigation efforts.
Cybersecurity Leaders in Management The Company’s IT strategy and implementation is overseen by a dedicated Chief Information Officer with over 20 years of experience in the field, including previously serving a 17-year tenure, most recently as Vice President of Global IT, with a global technology leader of fiber optic subsystems and components.
Cybersecurity Leader The Company’s cybersecurity strategy and implementation is overseen by a dedicated Chief Information Security Officer with over 20 years of experience in the field, having most recently served as Senior Vice President and Global Chief Information Security Officer, with a leading diversified healthcare services company where he led enterprise-wide cybersecurity strategy and governance.
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The Audit Committee then monitors the completion of the remediation actions and mitigation efforts.
Added
Previous cybersecurity incidents have not materially affected us, including our business strategy, results of operations or financial condition. However, risks from cybersecurity threats, including but not limited to exploitation of vulnerabilities, ransomware, denial of service, supply chain attacks, or other similar threats may materially affect us, including our execution of business strategy, reputation, results of operations and/or financial condition.
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He holds a Bachelor of Science in Computer Science and Engineering from Andhra University in India and an MBA from the Indian School of Business. In addition, the Company has engaged a Chief Information Security Officer (“CISO”) that has built and managed world-class information security programs and technology teams for industry leading global companies.
Added
“Risk Factors - “We are subject to laws, regulations, and other legal obligations related to 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 could 48 Table of Contents harm our business” and “Significant disruptions in our information technology systems, breaches of data security, or cyber-attacks on our systems or solutions, could adversely impact our business” for a discussion of cybersecurity risks.
Removed
She has deep experience securing healthcare-focused companies in both the provider and supplier space. She holds a Bachelor of Science from the University of Redlands and an MBA from Notre Dame De Namur University along with holding certified information systems security professional (“CISSP”) and certified information security manager (“CISM”) certifications.
Added
He holds a Bachelor of Science from the University of Illinois Urbana-Champaign and an MBA from Northwestern University’s Kellogg School of Management.

Item 2. Properties

Properties — owned and leased real estate

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LEGAL PROCEEDINGS Refer to the information set forth under “Legal Proceedings” in Note 14, Commitments and Contingencies , of the Notes to Consolidated Financial Statements included in this Annual Report on Form 10-K. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 47 Table of Contents PART II
LEGAL PROCEEDINGS Refer to the information set forth under “Legal Proceedings” in Note 14, Commitments and Contingencies , of the Notes to Consolidated Financial Statements included in this Annual Report on Form 10-K. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 50 Table of Contents PART II
Petersburg, Florida Administration, marketing, research and development, sales, and manufacturing 167,700 Warrendale, Pennsylvania Manufacturing and research and development 107,400 Cranberry Township, Pennsylvania Administration, marketing, research and development, sales, technical support, and training 58,400 Irlam, United Kingdom Administration, sales, marketing, and distribution center 61,000 Milpitas, California Administration, manufacturing, and research and development 46,300 Fort Worth, Texas Administration, sales, marketing, and research and development 34,400 We also have smaller rented facilities in Strongsville, Ohio; Austin, Texas; Grapevine, Texas; Germany; France; India; Italy; the People’s Republic of China; the United Arab Emirates; Australia; and the United Kingdom.
Petersburg, Florida Administration, marketing, research and development, sales, and manufacturing 167,700 Warrendale, Pennsylvania Manufacturing and research and development 107,400 Cranberry Township, Pennsylvania Administration, marketing, research and development, sales, technical support, and training 58,400 Milpitas, California Administration, manufacturing, and research and development 46,300 Fort Worth, Texas Administration, sales, marketing, and research and development 34,400 Warrington, United Kingdom Administration, sales, marketing, and distribution center 19,300 We also have smaller rented facilities in Strongsville, Ohio; Austin, Texas; Grapevine, Texas; Germany; France; India; Italy; the People’s Republic of China; the United Arab Emirates; Australia; and the United Kingdom.
For additional information regarding our obligations pursuant to operating leases, refer to Note 13, Lessee Leases , of the Notes to Consolidated Financial Statements in this Annual Report on Form 10-K. ITEM 3.
For additional information regarding our obligations pursuant to operating leases, refer to Note 13, Lessee Leases , of the Notes to Consolidated Financial Statements in this Annual Report on Form 10-K. 49 Table of Contents ITEM 3.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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The stock price performance shown on the graph is based on historical results and should not be relied upon as an indication of future price performance. 48 Table of Contents COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN (1) (2) Among Omnicell, Inc., the NASDAQ Composite Index, and the NASDAQ Health Care Index _________________________________________________ (1) $100 invested on December 31, 2019 in stock or index, including reinvestment of dividends.
The stock price performance shown on the graph is based on historical results and should not be relied upon as an indication of future price performance. 51 Table of Contents COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN (1) (2) Among Omnicell, Inc., the NASDAQ Composite Index, and the NASDAQ Health Care Index _________________________________________________ (1) $100 invested on December 31, 2020 in stock or index, including reinvestment of dividends.
The graph assumes $100 was invested in each of Omnicell’s common stock, the NASDAQ Composite Index, and the NASDAQ Health Care Index as of the market close on December 31, 2019.
The graph assumes $100 was invested in each of Omnicell’s common stock, the NASDAQ Composite Index, and the NASDAQ Health Care Index as of the market close on December 31, 2020.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS, AND ISSUER PURCHASES OF EQUITY SECURITIES Market for Our Common Stock Our common stock is traded on the NASDAQ Global Select Market under the symbol “OMCL.” Stockholders There were 74 registered stockholders of record as of February 19, 2025.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS, AND ISSUER PURCHASES OF EQUITY SECURITIES Market for Our Common Stock Our common stock is traded on the NASDAQ Global Select Market under the symbol “OMCL.” Stockholders There were 68 registered stockholders of record as of February 18, 2026.
Removed
Year Ended December 31, 2019 2020 2021 2022 2023 2024 Omnicell, Inc. $ 100.00 $ 146.87 $ 220.80 $ 61.70 $ 46.05 $ 54.48 NASDAQ Composite 100.00 144.92 177.06 119.45 172.77 223.87 NASDAQ Health Care 100.00 127.18 114.41 86.04 86.74 84.53 Stock Repurchase Program We did not repurchase any shares of our common stock during the year ended December 31, 2024.
Added
Year Ended December 31, 2020 2021 2022 2023 2024 2025 Omnicell, Inc. $ 100.00 $ 150.34 $ 42.01 $ 31.35 $ 37.09 $ 37.74 NASDAQ Composite 100.00 122.18 82.43 119.22 154.48 187.14 NASDAQ Health Care 100.00 89.96 67.65 68.20 66.46 81.27 Recent Sales of Unregistered Securities None. Issuer Repurchases of Equity Securities None. ITEM 6. [Reserved] 52 Table of Contents
Removed
Refer to Note 16, Stock Repurchase Programs , of the Notes to Consolidated Financial Statements in this Annual Report on Form 10-K for additional information. ITEM 6. [Reserved]

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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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.
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 generally recorded ratably over the service term.
Refer to Note 16, Stock Repurchase Programs , of the Notes to Consolidated Financial Statements included in this Annual Report on Form 10-K 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 16, Stock Repurchase Programs , of the Notes to Consolidated Financial Statements included in this Annual Report on Form 10-K for additional information. In November 2024, we completed a partial repurchase of $400.0 million aggregate principal amount of the 2025 Notes for approximately $391.0 million in cash.
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.
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, and other contractual obligations for at least the next twelve months.
Changes in the assumptions or judgements used in determining the standalone selling price or timing of revenue recognition could impact the amount and timing of revenue reported in a particular period. Inventory Inventories are stated at the lower of cost, computed using the first-in, first-out method, and net realizable value.
Changes in the assumptions or judgments used in determining the standalone selling price or timing of revenue recognition could impact the amount and timing of revenue reported in a particular period. Inventory Inventories are stated at the lower of cost, computed using the first-in, first-out method, and net realizable value.
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.
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 61 Table of Contents agent.
Recently Issued Authoritative Guidance Refer to “Recently Issued Authoritative Guidance” in Note 1, Organization and Summary of Significant Accounting Policies , of the Notes to Consolidated Financial Statements in this Annual Report on Form 10-K 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.
Recently Issued Authoritative Guidance Refer to “Recently Issued Authoritative Guidance” in Note 1, Organization and Summary of Significant Accounting Policies , of the Notes to Consolidated Financial Statements in this Annual Report on Form 10-K for a description of recently 58 Table of Contents issued accounting pronouncements, including the expected dates of adoption and estimated effects on our results of operations, financial position, and cash flows.
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.
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 hardware, software, and consumable solutions together with related service offerings.
Such omitted discussion can be found under Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” located in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023, filed with the SEC on February 28, 2024, for reference to discussion of the fiscal year ended December 31, 2022, the earliest of the three fiscal years presented.
Such omitted discussion can be found under Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” located in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, filed with the SEC on February 27, 2025, for reference to discussion of the fiscal year ended December 31, 2023, the earliest of the three fiscal years presented.
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. We utilize bookings as an indicator of the success of our business.
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.
The following table summarizes each revenue category: Revenue Category Revenue Type Income Statement Classification Included in Bookings (through 2024) Included in Product Bookings (2025 onwards) Included in ARR (2025 onwards) Connected devices, software licenses, and other Nonrecurring Product Yes (1) Yes (1) No Consumables Recurring Product Yes No Yes Technical services Recurring Service No No Yes SaaS and Expert Services (2) Recurring Service Yes (3) No Yes _________________________________________________ (1) Certain other insignificant revenue streams ancillary to our products and services, such as freight revenue, are not included in bookings.
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.
Changes in our 53 Table of Contents assumptions, judgments, or estimates could impact future financial results if additional write-downs for excess and obsolete inventories are needed. Accounting for Income Taxes We make certain estimates and judgments in determining income tax expense or benefit for financial statement purposes.
Changes in our assumptions, judgments, or estimates could impact future financial results if additional write-downs for excess and obsolete inventories are needed. Accounting for Income Taxes We make certain estimates and judgments in determining income tax expense or benefit for financial statement purposes.
Refer to Note 11, Convertible Senior Notes , of the Notes to Consolidated Financial Statements included in this Annual Report on Form 10-K for additional information. (4) Refer to Note 14, Commitments and Contingencies , of the Notes to Consolidated Financial Statements included in this Annual Report on Form 10-K for additional information.
(4) Refer to Note 14, Commitments and Contingencies , of the Notes to Consolidated Financial Statements included in this Annual Report on Form 10-K for additional information.
Our international sales represented 9% and 12% of total revenues for the years ended December 31, 2024 and 2023, 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 international sales represented 10% and 9% of total revenues for the years ended December 31, 2025 and 2024, respectively. In future periods, we expect our revenues 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.
The 2024 annual effective tax rate differed from the statutory tax rate of 21%, primarily due to an unfavorable impact of non-deductible equity compensation charges partially offset by a favorable impact of research and development credits.
The 2025 annual effective tax rate differed from the statutory tax rate of 21%, primarily due to the unfavorable impact of state taxes and non-deductible equity compensation charges, partially offset by a favorable impact of research and development credits.
Revenues generated in the United States represented 91% of our total revenues for the year ended December 31, 2024. 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.
Revenues generated in the United States represented 90% of our total revenues for the year ended December 31, 2025. 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.
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.
Our ability to grow product and service revenues is dependent on our ability to continue to obtain orders from customers, including contract renewals, 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 implementations we are able to complete, our ability to meet customer needs by providing a quality implementation experience and solutions that meet expected service levels, our ability to develop new or enhance existing solutions, and our flexibility in workforce allocations among customers to complete implementations 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.
The timing of our revenues is primarily dependent on when our customers’ schedules and/or staffing levels allow for implementations.
Refer to Note 17, Income Taxes , of the Notes to Consolidated Financial Statements included in this Annual Report on Form 10-K for additional information. 56 Table of Contents LIQUIDITY AND CAPITAL RESOURCES We had cash and cash equivalents of $369.2 million at December 31, 2024, compared to $468.0 million at December 31, 2023.
Refer to Note 17, Income Taxes , of the Notes to Consolidated Financial Statements included in this Annual Report on Form 10-K for additional information. LIQUIDITY AND CAPITAL RESOURCES We had cash and cash equivalents of $196.5 million at December 31, 2025, compared to $369.2 million at December 31, 2024.
Service revenues represented 43% and 38% of total revenues for the years ended December 31, 2024 and 2023, respectively. Services and other revenues include revenues from technical services and SaaS and Expert Services offerings.
Service revenues represented 44% and 43% of total revenues for the years ended December 31, 2025 and 2024, respectively. Service revenues include revenues from technical services and SaaS and Expert Services offerings.
Investing Activities Net cash used in investing activities was $52.8 million for the year ended December 31, 2024, which consisted of capital expenditures of $36.5 million for property and equipment and $16.3 million for external-use software development costs. 59 Table of Contents Net cash used in investing activities was $55.0 million for the year ended December 31, 2023, which consisted of capital expenditures of $41.5 million for property and equipment and $13.5 million for external-use software development costs.
Net cash used in investing activities was $52.8 million for the year ended December 31, 2024, which consisted of capital expenditures of $36.5 million for property and equipment and $16.3 million for external-use software development costs.
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.
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 2029 Notes in November 2024 that are due in December 2029.
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.
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.
The increase in other income during the year ended December 31, 2024 compared to the year ended December 31, 2023 is primarily attributable to a $7.5 million gain on extinguishment of convertible senior notes and related unwind of note hedges and warrants, as well as higher interest income received due to higher interest rates and higher cash and cash equivalents balances throughout the majority of the year.
The decrease in other income during the year ended December 31, 2025 compared to the year ended December 31, 2024 is primarily attributable to a $7.5 million gain on extinguishment of the 2025 convertible senior notes and related unwind of note hedges and warrants during the year ended December 31, 2024, as well as lower interest income received.
This discussion and analysis may contain forward-looking statements based upon our current expectations and assumptions that involve risks and uncertainties. 49 Table of Contents Our actual results and the timing of selected events could differ materially from those anticipated in these forward-looking statements as a result of several factors, including those set forth under Item 1A, “Risk Factors,” and elsewhere in this Annual Report on Form 10-K.
Our actual results and the timing of selected events could differ materially from those anticipated in these forward-looking statements as a result of several factors, including those set forth under Item 1A, “Risk Factors,” and elsewhere in this Annual Report on Form 10-K.
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.
OVERVIEW Our Business Omnicell, a leading healthcare technology provider focused on empowering autonomous medication management, 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.
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”).
We believe that health systems will continue to accelerate investment in programs to improve patient outcomes by utilizing specialty pharmacies and the federal 340B Drug Pricing Program.
We review our performance obligations in a contract and evaluate when transfer of control occurs. Generally, for products requiring a complex implementation, control passes when the product is installed and functionally ready for use. For all other products, control generally passes when product has been shipped and title has passed.
Generally, for products requiring a complex implementation, control passes when the product is installed and functionally ready for use. For all other products, control generally passes when product has been shipped and title has passed.
The definitions and descriptions included below are relevant to these key performance metrics that will replace our prior bookings metric in 2025 and beyond. Product Bookings We utilize product bookings as an indicator of the success of certain portions of our business that generate non-recurring revenue.
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.
Interest and Other Income (Expense), Net. Interest and other income (expense), net, changed by $10.5 million for the year ended December 31, 2024 compared to the year ended December 31, 2023, primarily driven by a $12.2 million increase in other income and a $1.7 million increase in other expense.
Interest and other income (expense), net, changed by $19.1 million for the year ended December 31, 2025 compared to the year ended December 31, 2024, primarily driven by a $20.6 million decrease in other income and a $1.5 million decrease in other expense.
Our judgment regarding future taxable income may change due to future changes in the company’s profitability due to market conditions, changes in U.S. or international tax laws, and other factors. Changes in judgment may require material adjustments to deferred tax assets, which may result in an increase or decrease to our income tax provision in the period of adjustment.
Our judgment regarding future taxable income may change due to future changes in the company’s profitability as a result of changes in market conditions, changes in U.S. or international tax laws, and other factors.
Provision for Income Taxes Year Ended December 31, Change in 2024 2023 $ % (Dollars in thousands) Provision for income taxes $ 13,062 $ 263 $ 12,799 4,867% Effective tax rate on earnings 51% (1)% We recorded an income tax expense of $13.1 million on an income before income taxes of $25.6 million, which resulted in a positive effective tax rate of 51% for the year ended December 31, 2024, compared to an income tax expense of $0.3 million on a loss before income taxes of $20.1 million, which resulted in a negative effective tax rate of 1% for the year ended December 31, 2023.
Provision for Income Taxes Year Ended December 31, Change in 2025 2024 $ % (Dollars in thousands) Provision for income taxes $ 9,273 $ 13,062 $ (3,789) (29)% Effective tax rate on earnings 82% 51% We recorded an income tax expense of $9.3 million on an income before income taxes of $11.3 million, which resulted in an effective tax rate of 82% for the year ended December 31, 2025, compared to an income tax expense of $13.1 million on an income before income taxes of $25.6 million, which resulted in an effective tax rate of 51% for the year ended December 31, 2024.
For the portions of our business which generate recurring revenues, we utilize Annual Recurring Revenue (“ARR”) as a key metric to measure our progress in growing our recurring revenue business.
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 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.
We may also use cash for potential acquisitions and acquisition-related activities, as well as repurchases of our common stock.
Service revenues increased by $43.2 million, primarily due to an increase of $12.4 million in technical services revenues as a 54 Table of Contents result of growth in our installed customer base and the impact of pricing actions, as well as an increase of $30.8 million in SaaS and Expert Services revenues due to continued customer demand.
Service revenues increased by $37.4 million, due to an increase of $21.9 million in technical services revenues primarily as a result of growth in our installed customer base and the impact of pricing actions.
Research and development expenses decreased by $6.7 million for the year ended December 31, 2024 compared to the year ended December 31, 2023.
Research and development expenses decreased by $1.7 million for the year ended December 31, 2025 compared to the year ended December 31, 2024. Selling, General, and Administrative . Selling, general, and administrative expenses increased by $29.4 million for the year ended December 31, 2025 compared to the year ended December 31, 2024.
Some of these uncertainties arise due to transfer pricing for transactions with our subsidiaries and the determination of tax nexus. We account for uncertain tax positions in accordance with ASC 740.
Some of these uncertainties arise due to transfer pricing for transactions with our subsidiaries and the determination of tax nexus. We also monitor global tax developments, including the OECD Pillar Two Framework, which may impact our effective tax rate in future periods. We account for uncertain tax positions in accordance with ASC 740.
We assess the likelihood of the realization of deferred tax assets and the need for a valuation allowance in each reporting period. In reaching our conclusion, we evaluate certain relevant criteria as provided in ASC 740, Income Taxes , including having sufficient taxable income of the appropriate character in future years.
In reaching our conclusion, we evaluate certain relevant criteria as provided in ASC 740, Income Taxes, including having sufficient taxable income of the appropriate character in future years.
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.
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. 55 Table of Contents 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.
Other than for the renewal of annual technical services contracts, our products and services are not generally sold separately. We use an amount discounted from the list price as a best estimated standalone selling price. Additionally, judgment is required to determine the timing of revenue recognition for each performance obligation based upon when control transfers to a customer.
We use an amount discounted from the list price as a best estimated standalone selling price. 57 Table of Contents Additionally, judgment is required to determine the timing of revenue recognition for each performance obligation based upon when control transfers to a customer. We review our performance obligations in a contract and evaluate when transfer of control occurs.
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.
Refer to Note 11, Convertible Senior Notes , of the Notes to Consolidated Financial Statements included in this Annual Report on Form 10-K for additional information. 62 Table of Contents 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.
Refer to Note 11, Convertible Senior Notes , of the Notes to Consolidated Financial Statements included in this Annual Report on Form 10-K for additional information.
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 Consolidated Financial Statements included in this Annual Report on Form 10-K for additional information.
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.
The obligations presented above include both principal and interest on these notes. Although these notes mature in 2029, they may be converted into cash and shares of our common stock prior to maturity if certain conditions are met.
Net cash provided by financing activities was $23.4 million for the year ended December 31, 2023, primarily due to $23.2 million in proceeds from employee stock option exercises and ESPP purchases and a net change in the customer funds balances of $10.5 million, partially offset by $7.4 million in employees’ taxes paid related to restricted stock unit vesting.
Financing Activities Net cash used in financing activities was $218.3 million for the year ended December 31, 2025, due to the repayment of the remaining principal balance of our 2025 Notes of $175.0 million, repurchases of shares of our common stock of $77.6 million, and $7.7 million in employees’ taxes paid related to restricted stock unit vesting, partially offset by a net change in the customer funds balances of $25.1 million and $16.9 million in proceeds from employee stock option exercises and ESPP purchases.
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.
We are focused on delivering solutions to help our customers realize the industry-defined vision of the Autonomous Pharmacy and driving positive medication management outcomes with superior customer experience in two core market categories through: • Hospital and Health System Solutions: This category enables the end-to-end medication process across the entire continuum of care.
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. 58 Table of Contents Cash Flows The following table summarizes, for the periods indicated, selected items in our Consolidated Statements of Cash Flows: Year Ended December 31, 2024 2023 (In thousands) Net cash provided by (used in): Operating activities $ 187,722 $ 181,094 Investing activities (52,793) (55,016) Financing activities (235,578) 23,420 Effect of exchange rate changes on cash and cash equivalents (1,716) (1,354) Net increase (decrease) in cash, cash equivalents, and restricted cash $ (102,365) $ 148,144 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.
Cash Flows The following table summarizes, for the periods indicated, selected items in our Consolidated Statements of Cash Flows: Year Ended December 31, 2025 2024 (In thousands) Net cash provided by (used in): Operating activities $ 127,300 $ 187,722 Investing activities (60,363) (52,793) Financing activities (218,317) (235,578) Effect of exchange rate changes on cash and cash equivalents 3,798 (1,716) Net increase (decrease) in cash, cash equivalents, and restricted cash $ (147,582) $ (102,365) 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. 63 Table of Contents Net cash provided by operating activities was $127.3 million for the year ended December 31, 2025, primarily consisting of operating inflows of $135.6 million and unfavorable working capital movements of $8.3 million.
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.
However, we believe that over time these significant challenges facing pharmacists will drive demand for increased automation, visibility, insights, and improved medication management outcomes that our solutions are designed to enable.
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. 57 Table of Contents As of December 31, 2024, we had $350.0 million of funds available under the Current Revolving Credit 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.
We expect to use future loans under the Current Revolving Credit Facility, if any, for working capital, potential acquisitions, and other general corporate purposes.
Refer to Note 10, Debt and Credit Agreement , of the Notes to Consolidated Financial Statements included in this Annual Report on Form 10-K 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.
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.
Our 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 alongside 5 other outcomes laid out in the Autonomous Pharmacy framework.
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.
Furthermore, we believe a combination of dispensing automation and an intelligence ecosystem is needed in every care setting where medications are managed.
In addition, the decrease in cost of product revenues was partially offset by $5.4 million of inventory write-down charges related to the Company’s Medimat Robotic Dispensing System (“RDS”) product line wind down incurred during the year ended December 31, 2024 and an increase of $2.9 million of restructuring costs for the year ended December 31, 2024 compared to the year ended December 31, 2023.
The decrease in cost of product revenues for the year ended December 31, 2025 compared to the year ended December 31, 2024 was primarily driven by the impact of more favorable materials costs as well as favorable impact from product and customer mix during the year ended December 31, 2025 and a decrease of $9.6 million of restructuring costs, including inventory write-down charges, partially offset by an increase in product revenues and the impact of tariffs incurred during the year ended December 31, 2025.
We also provide comprehensive service offerings such as 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. 50 Table of Contents 2025 Product Bookings and Annual Recurring Revenue Starting in 2025, we will utilize product bookings and Annual Recurring Revenue (each as further described below) as key performance metrics for our business.
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.
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.
As a market leader, we anticipate continued expansion into this product market as customers increasingly utilize our dispensing systems in more areas within hospitals and ambulatory care settings.
Operating inflows consisted of net loss of $20.4 million, adjusted for non-cash items of $157.8 million, which consisted primarily of depreciation and amortization expense of $87.3 million, share-based compensation expense of $55.3 million, impairment and abandonment of operating lease right-of-use assets related to facilities of $10.0 million, amortization of operating lease right-of-use assets of $8.2 million, and a change in deferred income taxes of $11.0 million.
Operating inflows consisted of net income of $2.1 million, adjusted for non-cash items of $133.6 million, which consisted primarily of depreciation and amortization expense of $78.8 million, share-based compensation expense of $44.5 million, and amortization of operating lease right-of-use assets of $7.8 million.
Financing Activities Net cash used in financing activities was $235.6 million for the year ended December 31, 2024, primarily due to the partial repurchase of $400.0 million of aggregate principal amount of the 2025 Notes for approximately $391.0 million and the net cash used in the purchase of the convertible note hedge and sale of warrants in connection with the 2029 Notes of $15.1 million, partially offset by net proceeds from the issuance of the 2029 Notes of $166.3 million and $13.4 million in proceeds from employee stock option exercises and ESPP purchases.
Net cash used in financing activities was $235.6 million for the year ended December 31, 2024, primarily due to the partial repurchase of $400.0 million of aggregate principal amount of the 2025 Notes for approximately $391.0 million and the net cash used in the purchase of the convertible note hedge and sale of warrants in connection with the 2029 Notes of $15.1 million, partially offset by net proceeds from the issuance of the 2029 Notes of $166.3 million and $13.4 million in proceeds from employee stock option exercises and ESPP purchases. 64 Table of Contents Contractual Obligations Contractual obligations as of December 31, 2025 were as follows: Payments Due By Period Total 2026 2027 - 2028 2029 - 2030 2031 and thereafter (In thousands) Operating leases (1) $ 40,314 $ 13,645 $ 21,621 $ 3,772 $ 1,276 Purchase obligations (2) 130,546 123,147 7,376 23 — Convertible senior notes (3) 179,405 1,725 3,450 174,230 — Total (4) $ 350,265 $ 138,517 $ 32,447 $ 178,025 $ 1,276 _________________________________________________ (1) Commitments under operating leases relate primarily to leased office buildings, data centers, office equipment, and vehicles.
The increase in cost of service revenues was primarily driven by the increase in service revenues of $43.2 million for the year ended December 31, 2024 compared to the year ended December 31, 2023.
The increase in cost of service revenues was primarily driven by the increase in service revenues of $37.4 million for the year ended December 31, 2025 compared to the year ended December 31, 2024, including the associated increase in employee-related expenses, an increase in certain non-recurring costs, including software upgrade expenses, and an increase of $4.3 million in restructuring costs.
In addition, the CODM is provided with certain segment assets, primarily those that impact liquidity, as well as certain significant expenses. All 51 Table of Contents 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 3,670 on December 31, 2024.
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 3,580 on December 31, 2025. Business Strategy In 2024, the United States spent $806 billion on prescription drugs, a 10.2% increase from 2023.
RESULTS OF OPERATIONS Total Revenues Year Ended December 31, Change in 2024 2023 $ % (Dollars in thousands) Product revenues $ 630,507 $ 708,561 $ (78,054) (11)% Percentage of total revenues 57% 62% Service revenues 481,731 438,551 43,180 10% Percentage of total revenues 43% 38% Total revenues $ 1,112,238 $ 1,147,112 $ (34,874) (3)% Product revenues represented 57% and 62% of total revenues for the years ended December 31, 2024 and 2023, respectively.
RESULTS OF OPERATIONS Total Revenues Year Ended December 31, Change in 2025 2024 $ % (Dollars in thousands) Product revenues $ 665,697 $ 630,507 $ 35,190 6% Percentage of total revenues 56% 57% Service revenues 519,148 481,731 37,417 8% Percentage of total revenues 44% 43% Total revenues $ 1,184,845 $ 1,112,238 $ 72,607 7% Product revenues represented 56% and 57% of total revenues for the years ended December 31, 2025 and 2024, respectively.
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.
(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.
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.
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. 59 Table of Contents Year Ended December 31, Change in 2025 2024 $ % (Dollars in thousands) Cost of revenues: Cost of product revenues $ 379,162 $ 383,025 $ (3,863) (1)% As a percentage of related revenues 57% 61% Cost of service revenues 302,241 258,210 44,031 17% As a percentage of related revenues 58% 54% Total cost of revenues $ 681,403 $ 641,235 $ 40,168 6% As a percentage of total revenues 58% 58% Gross profit $ 503,442 $ 471,003 $ 32,439 7% Gross margin 42% 42% Cost of revenues for the year ended December 31, 2025 compared to the year ended December 31, 2024 increased by $40.2 million, primarily driven by a $44.0 million increase in cost of service revenues, partially offset by a $3.9 million decrease in cost of product revenues.
We generally provide installation planning and consulting as part of most connected device product sales, which is typically included in the initial price of the solution. 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.
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. Product bookings were $535 million and $558 million during the years ended December 31, 2025 and 2024, respectively.
Our cash position and working capital at December 31, 2024 and 2023 were as follows: December 31, 2024 2023 (In thousands) Cash and cash equivalents $ 369,201 $ 467,972 Working capital (1) $ 219,815 $ 559,779 (1) The decrease in working capital as of December 31, 2024 was partially due to the classification of our convertible senior notes as a current rather than long-term liability.
Our cash position and working capital at December 31, 2025 and 2024 were as follows: December 31, 2025 2024 (In thousands) Cash and cash equivalents $ 196,520 $ 369,201 Working capital $ 203,460 $ 219,815 Our ratio of current assets to current liabilities was 1.4:1 at both December 31, 2025 and 2024.
As of December 31, 2024, 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 Consolidated Financial Statements included in this Annual Report on Form 10-K for additional information.
As of December 31, 2025, we had $350.0 million of funds available under the Current Revolving Credit Facility. As of December 31, 2025, there was no outstanding balance under the Current Revolving Credit Facility and we were in full compliance with all covenants.
We believe that a fully optimized specialty pharmacy operation represents one of the largest economic opportunities for hospitals and health systems. • Ambulatory Care. We believe ambulatory care, especially the retail and institutional market, represents a significant opportunity as healthcare evolves.
We believe a solution designed to help health systems optimize their Health System-Owned 56 Table of Contents Specialty Pharmacy (“HSSP”) and navigate these compliance-complexities will help ensure continuity of care. We believe that a fully optimized specialty pharmacy operation represents one of the largest economic opportunities for hospitals and health systems. • Institutional Pharmacy.
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.
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.
Our gross profit for the year ended December 31, 2024 was $471.0 million, as compared to $496.8 million for the year ended December 31, 2023. 55 Table of Contents Operating Expenses and Interest and Other Income (Expense), Net Year Ended December 31, Change in 2024 2023 $ % (Dollars in thousands) Operating expenses: Research and development $ 90,412 $ 97,115 $ (6,703) (7)% As a percentage of total revenues 8% 8% Selling, general, and administrative 380,254 434,593 (54,339) (13)% As a percentage of total revenues 34% 38% Total operating expenses $ 470,666 $ 531,708 $ (61,042) (11)% As a percentage of total revenues 42% 46% Interest and other income (expense), net $ 25,256 $ 14,760 $ 10,496 71% Research and Development.
Operating Expenses and Interest and Other Income (Expense), Net Year Ended December 31, Change in 2025 2024 $ % (Dollars in thousands) Operating expenses: Research and development $ 88,672 $ 90,412 $ (1,740) (2)% As a percentage of total revenues 7% 8% Selling, general, and administrative 409,610 380,254 29,356 8% As a percentage of total revenues 35% 34% Total operating expenses $ 498,282 $ 470,666 $ 27,616 6% As a percentage of total revenues 42% 42% Interest and other income (expense), net $ 6,165 $ 25,256 $ (19,091) (76)% Research and Development.
These cash inflows were partially offset by a decrease in accrued compensation of $21.5 million primarily due to a decrease in the accrual for restructuring initiatives, lower commissions, as well as timing of ESPP purchases, a decrease in accounts payables of $17.5 million primarily due to an overall decrease in spending, as well as timing of payments, a decrease in operating lease liabilities of $10.9 million, an increase in investment in sales-type leases of $10.4 million primarily due to the acceptance of certain SaaS and Expert Services products under sales-type lease arrangements, a decrease in accrued liabilities of $10.3 million, and an increase in other current assets of $6.8 million.
The unfavorable working capital was primarily due to a decrease in accrued liabilities of $19.0 million primarily due to a decrease in taxes payable and rebate liabilities, a decrease in operating lease liabilities of $11.7 million, an increase in inventories of $11.2 million to support production requirements, including advanced purchases of certain components, as well as the impact of tariffs, an increase in investment in sales-type leases of $10.2 million primarily due to the acceptance of certain SaaS and Expert Services products under sales-type lease arrangements, a decrease in accounts payable of $9.3 million and an increase in prepaid expenses of $7.8 million.
The decrease in cost of product revenues is partially offset by inventory write-down charges related to the RDS product line wind down and an increase in restructuring costs incurred during the year ended December 31, 2024.
The overall gross margin remained relatively consistent for the year ended December 31, 2025 compared to the year ended December 31, 2024 primarily due to the impact of more favorable materials costs as well as favorable impact from product and customer mix and a decrease in restructuring costs, including inventory write-down charges, partially offset by the impact of tariffs and an increase in employee-related and certain non-recurring software upgrade expenses.
Selling, general, and administrative expenses decreased by $54.3 million for the year ended December 31, 2024 compared to the year ended December 31, 2023.
The increase in selling, general, and administrative expenses was also attributable to an increase in commissions of $3.9 million, an increase in consulting expenses of $2.6 million, and an increase of $2.7 million in the allowance for credit losses for the year ended December 31, 2025 compared to the year ended December 31, 2024. Interest and Other Income (Expense), Net.
Product revenues decreased by $78.1 million, primarily due to a challenging environment through a significant portion of 2024 for some of our health system customers and the timing of our XT Series systems lifecycle, as we are largely through the replacement cycle.
Product revenues increased by $35.2 million, primarily due to the increase in revenues from our XTExtend offering, partially offset by lower volumes from our XT Series automated dispensing systems business due to the timing of our XT Series systems lifecycle, as we are largely through the replacement cycle, as well as the decrease in revenues from products related to our Central Pharmacy Dispensing Service offering.
Refer to Note 11, Convertible Senior Notes , of the Notes to Consolidated Financial Statements included in this Annual Report on Form 10-K for additional information. Our ratio of current assets to current liabilities was 1.4:1 and 2.5:1 at December 31, 2024 and 2023, respectively.
Changes in judgment may require material adjustments to deferred tax assets, which may result in an increase or decrease to our income tax provision in the period of adjustment. For additional details, refer to Note 17, Income Taxes , of the Notes to Consolidated Financial Statements included in this Annual Report on Form 10-K for additional information.
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.
We believe there are significant challenges facing the practice of pharmacy today. These challenges include, but are not limited to, budget constraints and acute workforce shortages, where 88% of hospitals report technician deficits and 92% lack sufficient sterile compounding expertise.
ARR should not be viewed as a substitute for revenues. Under the new metric, ARR was $580 million as of December 31, 2024.
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 54 Table of Contents periods. ARR should not be viewed as a substitute for revenues. ARR was $636 million and $580 million as of December 31, 2025 and 2024, respectively.
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 recognize that these challenges may impact the timing of contracting for, or implementation of, our products, solutions, or services.
In addition, health systems face rising liability related to drug diversion, with a 61% increase in the average number of investigations per hospital since the beginning of 2023. We also recognize that these challenges may impact the timing of contracting for, or implementation of, our products, solutions, or services.
Removed
During 2024, we defined bookings generally as: (i) the value of non-cancelable contracts for our connected devices, software products, and SaaS and Expert Services (although, for those SaaS and Expert Services contracts without a minimum commitment, bookings only include the amount of revenue that has been recognized once the services have been provided); and (ii) for our consumables, the value of orders placed through our Omnicell Storefront online platform or through written or telephonic orders.
Added
This discussion and analysis may contain forward-looking statements based upon our current expectations and assumptions that involve risks and uncertainties.
Removed
We typically exclude technical services and other less significant items ancillary to our products and services, such as freight revenue, from 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 portion of the contractual commitment booked at a given time.
Added
We are doing this with an industry-leading medication management infrastructure which includes storage and dispensing automation powered by an intelligence ecosystem.
Removed
As noted, the portfolio of products, solutions, and services we offer has evolved. As a result, the ordering process for certain of our solutions has also evolved. For example, orders for certain solutions may not include a purchase order. Connected devices and software license bookings are recorded as revenue upon customer acceptance of the installation or receipt of goods.
Added
Global Trade Relations In recent years, the U.S. government has advocated for greater restrictions on trade generally. For example, in 2025, the U.S. imposed tariffs on a wide variety of products manufactured in multiple foreign jurisdictions, including China, Mexico, and Malaysia.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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As of December 31, 2024, we did not have any outstanding interest rate swap agreements. ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA The Report of Independent Auditors and Consolidated Financial Statements are included in Item 15 of this Annual Report on Form 10-K beginning on page F-1 and are incorporated herein by reference. ITEM 9.
As of December 31, 2025, we did not have any outstanding interest rate swap agreements. 65 Table of Contents ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA The Report of Independent Auditors and Consolidated Financial Statements are included in Item 15 of this Annual Report on Form 10-K beginning on page F-1 and are incorporated herein by reference. ITEM 9.
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.
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 December 31, 2025, we did not have any outstanding foreign exchange forward contracts.
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 December 31, 2024, the fair market value of the 2025 Notes and the 2029 Notes was $167.1 million and $181.3 million, respectively.
As of December 31, 2025, the net carrying amount under the 2029 Notes was $167.6 million. 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 December 31, 2025, the fair market value of the 2029 Notes was $185.9 million.
Refer to Note 10, Debt and Credit Agreement, of the Notes to Consolidated Financial Statements included in this Annual Report on Form 10-K for additional information. As of December 31, 2024, the net carrying amount under the 2025 Notes and the 2029 Notes was $174.3 million and $166.4 million, respectively.
Interest Rate Fluctuation Risk We are exposed to interest rate risk through our borrowing activities. As of December 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 Consolidated Financial Statements included in this Annual Report on Form 10-K for additional information.
Removed
As of December 31, 2024, we did not have any outstanding foreign exchange forward contracts. 60 Table of Contents Interest Rate Fluctuation Risk We are exposed to interest rate risk through our borrowing activities. As of December 31, 2024, there was no outstanding balance under the current Second A&R Credit Agreement.

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