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BALANCE SHEET COMPONENTS
 6 Months Ended
Jun. 30, 2026
Balance Sheet Related Disclosures [Abstract]  
BALANCE SHEET COMPONENTS BALANCE SHEET COMPONENTS
Inventory
Inventory consisted of the following (in thousands):
June 30, 2026December 31, 2025
Raw materials and work-in-progress$10,601 $10,645 
Finished goods11,912 10,989 
Total$22,513 $21,634 
Prepaid Expenses and Other Current Assets
Prepaid expenses and other current assets consisted of the following (in thousands):
June 30, 2026December 31, 2025
Insurance recoveries receivable (see Note 7)$37,766 $— 
Prepaid expenses13,383 12,796 
Interest receivable3,028 3,016 
Other3,716 5,850 
Total$57,893 $21,662 
Other Assets
Other assets consisted of the following (in thousands):
June 30, 2026December 31, 2025
PCBAs$43,409 $39,026 
Cloud computing arrangements4,542 3,998 
Other2,517 1,694 
Total$50,468 $44,718 
The Company reuses PCBAs in each wearable Zio monitor, Zio XT, and Zio AT, as well as the wireless gateway used in conjunction with Zio AT. As PCBAs are used in a wearable Zio monitor, Zio XT, or Zio AT, a portion of the cost of the PCBA is recorded as a cost of revenue. Charges to cost of revenue were $6.1 million and $11.6 million for the three and six months ended June 30, 2026, respectively, and $2.9 million and $6.8 million for the three and six months ended June 30, 2025, respectively. During the six months ended June 30, 2026, PCBAs increased by $4.4 million primarily driven by additional purchases for Zio monitor and Zio AT to support the growth in commercial volumes.
The Company recorded $0.7 million and $1.5 million of amortization expense during the three and six months ended June 30, 2026, respectively, and $0.6 million and $1.2 million during the three and six months ended June 30, 2025, respectively, related to capitalized implementation costs in the Company's cloud computing arrangements.
Property and Equipment, Net
Property and equipment, net consisted of the following (in thousands):
Useful lifeJune 30, 2026December 31, 2025
Laboratory and manufacturing equipment
2 to 7
$18,171 $17,623 
Computer equipment and software35,339 4,232 
Furniture and fixtures
2 to 5
4,180 4,180 
Leasehold improvements
3 to 12
28,966 28,975 
Internal-use software in service
3 to 7
94,799 91,763 
Internal-use software in development—108,417 88,950 
Construction in progress—6,886 7,068 
Total property and equipment, gross266,758 242,791 
Less: Accumulated depreciation and amortization
(101,450)(91,192)
Total property and equipment, net$165,308 $151,599 
Depreciation and amortization expense for the three and six months ended June 30, 2026 was $5.2 million and $10.3 million, respectively, and $5.1 million and $10.3 million for the three and six months ended June 30, 2025, respectively, of which amortization related to internal-use software was $3.4 million and $6.7 million for the three and six months ended June 30, 2026, respectively, and $3.7 million and $7.5 million for the three and six months ended June 30, 2025, respectively.
During the three and six months ended June 30, 2026, internal-use software, both in service and in development, increased by $12.6 million and $22.5 million, respectively. This increase related to enhancements in the Company’s core technology, products and services and artificial intelligence, as well as investment in future technology.
During the three and six months ended June 30, 2025, the Company recorded an impairment charge of $2.5 million within impairment charges in the Company’s unaudited condensed consolidated statements of operations related to internal-use software in development not expected to be completed and placed in-service. No impairment charge related to internal-use software has been recognized for the three and six months ended June 30, 2026. Refer to Note 7, Commitments and Contingencies, for further details relating to the impairment charge recognized during the second quarter of 2025.
Accrued Liabilities
Accrued liabilities consisted of the following (in thousands):
June 30, 2026December 31, 2025
Accrued payroll and related expenses$38,854 $67,809 
Accrued vacation8,662 7,906 
Accrued expenses
24,478 20,464 
Claims payable
320 1,542 
Accrued employee share purchase plan contributions598 662 
Accrued income and other taxes1,515 1,817 
Accrued professional services fees
17,141 8,140 
Contingent consideration liabilities21,002 20,407 
Litigation settlement liability (see Note 7)45,000 — 
Total accrued liabilities$157,570 $128,747