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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2025


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _____________ to ______________

Commission File Number: 001-42657

Hinge Health, Inc.

(Exact Name of Registrant as Specified in its Charter)


Delaware	81-1884841
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
455 Market Street, Suite 700 San Francisco, California	94105
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (415) 726-2206

Securities registered pursuant to Section 12(b) of the Act:

     Title of each class

     Trading
Symbol(s)

     Name of each exchange on which registered

     Class A Common Stock, par value $0.00001 per share

     HNGE

     The New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☐ No ☒

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☐
		Emerging growth company	☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of July 31, 2025, the registrant had 27,223,448 shares of Class A common stock, $0.00001 par value per share, 51,211,799 shares of Class B common stock, $0.00001 par value per share, and 2,581,837 shares of Series E redeemable convertible preferred stock, $0.00001 par value per share, outstanding.

Table of Contents


		Page

	Cautionary Note Regarding Forward-Looking Statements
	Summary of Risk Factors
	Glossary of Terms

PART I.	FINANCIAL INFORMATION	1

Item 1.	Financial Statements (Unaudited)	1
	Condensed Consolidated Balance Sheets	1
	Condensed Consolidated Statements of Operations and Comprehensive Loss	2
	Condensed Consolidated Statements Of Redeemable Convertible Preferred Stock and Stockholders' Equity (Deficit)	3
	Condensed Consolidated Statements of Cash Flows	5
	Notes to Unaudited Condensed Consolidated Financial Statements	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	25
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	39
Item 4.	Controls and Procedures	39

PART II.	OTHER INFORMATION	41

Item 1.	Legal Proceedings	41
Item 1A.	Risk Factors	41
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	92
Item 3.	Defaults Upon Senior Securities	93
Item 4.	Mine Safety Disclosures	93
Item 5.	Other Information	93
Item 6.	Exhibits	95
Signatures		96

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q for the three months ended June 30, 2025 (this “Quarterly Report”) contains “forward-looking statements” within the meaning of the federal securities laws, which statements involve substantial risks and uncertainties. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements established by Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the Private Securities Litigation Reform Act of 1995. Forward-looking statements include all statements other than statements of historical fact contained in this Quarterly Report, and generally relate to future events or our future financial or operating performance. In some cases, you can identify forward-looking statements because they contain words such as “anticipate,” “believe,” “contemplate,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential” “predict,” “project,” “should,” “target,” or “will,” or the negative of these words or other similar terms or expressions that concern our expectations, strategy, plans or intentions. Forward-looking statements contained in this Quarterly Report include, but are not limited to, statements about:

•

our ability to attract and retain clients;

•

our ability to attract, enroll, and retain members;

•

our ability to attract and retain relationships with partners;

•

our ability to estimate the size of our target market;

•

the demand for musculoskeletal ("MSK") pain treatment and prevention solutions in general, and the demand for our platform in particular;

•

our ability to enhance our platform and programs or develop new programs, capabilities, features, and products, including our high-performance provider network for MSK care, HingeSelect;

•

our expectations regarding the acceptance of remote MSK care;

•

our ability to offer high-quality programs to our members;

•

expectations regarding the performance of our AI-driven platform and the ability of technology and artificial intelligence ("AI") to help deliver effective MSK care;

•

expectations regarding the ability of AI to provide support for our care team;

•

our ability to deliver a return on investment for our clients and positive outcomes for our members;

•

our ability to compete successfully in our competitive market;

•

our ability to contract with qualified licensed health professionals;

•

our ability to maintain high ratings and reviews of our platform;

•

our future financial performance, including revenue, cost of revenue, and gross profit;

•

our ability to achieve or maintain profitability;

•

our ability to protect our brand;

•

our expectations regarding our sales and marketing efforts and investments, including our go-to-market strategy;

•

our ability to successfully execute on our growth initiatives, business strategies, or operating plans;

•

our ability to attract and retain key personnel and highly-qualified personnel;

•

our ability to develop, maintain, and protect our intellectual property;

•

our ability to expand into new markets and to effectively manage our international growth and operations;

•

our ability to protect our client and member information in compliance with privacy and data protection laws;

•

our ability to comply with changing laws and regulations;

•

changes in the healthcare regulatory environment, particularly in states where new regulations regarding telehealth are being enacted;

•

our expectations regarding the increased expenses associated with being a public company;

•

our expectations regarding the period during which we qualify as an “emerging growth company” under the JOBS Act;

•

our expectations and management of future growth;

•

the impact from future regulatory, judicial, and legislative changes or developments that may affect our customers’ or our business; and

•

the risks related to our Class A common stock and our dual class common stock structure.

We caution you that the foregoing list may not contain all of the forward-looking statements made in this Quarterly Report.

You should not rely upon forward-looking statements as predictions of future events. We have based the forward-looking statements contained in this Quarterly Report primarily on management's current expectations and projections about future events and trends that we believe may affect our business, results of operations, financial condition, and prospects, based on information available to us at the time such statements are made. The outcome of the events described in these forward-looking statements is subject to risks, uncertainties and other factors, including those described in Part I, Item 2, “Management's Discussion and Analysis of Financial Condition and Results of Operations,” and Part II, Item 1A, “Risk Factors,” within this Quarterly Report, as well as those risks and uncertainties, set forth from time to time in our reports and other documents filed with the U.S. Securities and Exchange Commission (the “SEC”).

Although we do not make forward-looking statements unless we believe we have a reasonable basis for doing so, we cannot guarantee their accuracy or completeness. Moreover, new risks and uncertainties emerge from time to time, and it is not possible for us to predict all risks and uncertainties that could have an impact on the forward-looking statements contained in this Quarterly Report. We cannot assure you that the results, events and circumstances reflected in the forward-looking statements will be achieved or occur, and actual results, events, or circumstances could differ materially from those described in the forward-looking statements.

We undertake no obligation to update any forward-looking statements made in this Quarterly Report to reflect events or circumstances after the date of this Quarterly Report or to reflect new information or the occurrence of unanticipated events, except as required by law or the listing rules of The New York Stock Exchange (“NYSE”). We may not actually achieve the plans, intentions, or expectations disclosed in our forward-looking statements and you should not place undue reliance on our forward-looking statements.

In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date of this Quarterly Report, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and you are cautioned not to unduly rely upon these statements.

iii

SUMMARY OF RISK FACTORS

Our business is subject to numerous risks and uncertainties, including those highlighted in the section titled “Risk Factors” contained within this Quarterly Report. These risks could materially and adversely impact our business, results of operations, and financial condition which could cause the trading price of our Class A common stock to decline and could result in a loss of all or part of your investment. Additional risks, beyond those summarized below or discussed elsewhere in this Quarterly Report, may apply to our business, activities or operations as currently conducted or as we may conduct them in the future or in the markets in which we operate or may in the future operate. These risks include, but are not limited to, the following:

•

We have a history of net losses, we anticipate increasing expenses in the future, and we may not be able to achieve or maintain profitability. Although we have experienced rapid growth recently, if we fail to effectively manage our growth, we may be unable to execute our business plan and adequately address competitive challenges, and our business, results of operations, and financial condition could be materially adversely affected.

•

We may be unable to successfully execute on our growth initiatives, business strategies, or operating plans.

•

We have a limited operating history, which makes it difficult for you to evaluate our business, future prospects, and your investment, and makes it difficult to predict our future results of operations.

•

Our results of operations have fluctuated in the past and may continue to fluctuate in the future on a quarterly and annual basis. If we fail to meet the expectations of analysts or investors, our stock price and the value of your investment could decline substantially.

•

If we are unable to attract new clients, if existing clients do not renew their agreements or renew on less favorable terms, or if we do not achieve our performance guarantees, it could have a material adverse effect on our business, results of operations, and financial condition.

•

If we fail to retain existing members or add new members, our revenue, business, results of operations, and financial condition may be materially adversely affected.

•

A substantial portion of our client relationships are contracted through a limited number of health plans and other partners. If we are unable to establish, maintain, or grow these relationships over time or if the partners refer business to our competitors instead, we are likely to lose a portion of our clients, which could have a material adverse effect on our business, results of operations, and financial condition.

•

Our increasing reliance on AI and machine learning technologies may expose us to significant risks, including development and deployment challenges, regulatory uncertainties, and potential third-party claims, which could adversely affect our reputation, business, results of operations, and financial condition.

•

We may be unable to establish, maintain, protect, and enforce our intellectual property and proprietary rights or prevent third parties from making unauthorized use of our technology, or we may in the future become subject to claims of infringement, misappropriation, or violation of third parties’ intellectual property rights. Our failure to protect our intellectual property and any potential intellectual property infringement claims could harm our brand, devalue our proprietary content, and affect our ability to compete effectively.

•

Our business operates in a highly regulated industry and changes over time in regulations, or the implementation of existing regulations, could affect our operations and subject us to increased compliance costs and liabilities.

•

We and our affiliated professional entities are subject to federal, state, and foreign healthcare laws and regulations, and a finding of failure to comply with such laws and regulations could have a material adverse effect on our business.

•

Legislative or regulatory healthcare reform measures may make it more difficult and costly to operate our business, or to do so profitably. Accordingly, such legislative or regulatory healthcare reform measures may have a material adverse effect on our business, results of operations, and financial condition.

•

Our Enso device is subject to extensive government regulation. We may not receive, or may be delayed in receiving, the necessary marketing authorizations or certifications for modifications to our Enso device or any device products (including new device products) we may offer, and failure to timely obtain necessary marketing authorizations or certifications for any medical devices we may offer could have a material adverse effect on our business, results of operations, and financial condition.

•

The FDA may modify its enforcement policies with respect to medical software products, and our programs may become subject to extensive regulatory requirements, which may increase the cost of conducting, or otherwise harm, our business.

•

The price of our Class A common stock may be volatile or may decline regardless of our operating performance, resulting in substantial losses for investors.

•

The dual class structure of our common stock concentrates voting control with the holders of our Class B common stock, including Daniel Perez and Gabriel Mecklenburg (our “Founders”) and their affiliates, and the holders of our Series E preferred stock. This ownership will limit or preclude your ability to influence corporate matters, including the election of directors, amendments of our organizational documents, and any merger, consolidation, sale of all or substantially all of our assets, or other major corporate transaction requiring stockholder approval.

GLOSSARY OF TERMS

The following are abbreviations, acronyms, and definitions of certain terms used in this Quarterly Report:


Term		Definition
Calculated Billings		Total revenue, plus the change in deferred revenue, less the change in contract assets for the period.
Clients		Businesses or organizations, which we call entities, that have at least one active agreement with us at the end of a particular period. Entities that procure our platform through our partners are counted as individual clients. We do not count our partners as clients unless they also separately have at least one active client agreement with us. When a partner has an agreement with us for their fully-insured population, that partner is deemed to be one client, despite there being multiple fully-insured employers within that partner that have access to our platform.
Contracted Lives		Individuals within our contracted clients who have, or will have, the ability to enroll in our programs, typically employees and their adult dependents. Contracted lives include individuals within contracted clients that have not yet launched our platform, and thus such individuals are not yet eligible to be billed. Contracted lives include eligible lives.
Electronic Health Records ("EHR")		Collection of patient health records electronically stored in a digital format.
Eligible Lives		Individuals within our clients that have launched our platform, and thus such individuals have the ability to enroll in our programs and are eligible to be billed. Eligible lives are a subgroup of our contracted lives.
Fully-Insured Employers		Employers that pay a group health insurance provider for the employees enrolled in the insurance provider’s health plan, and the insurance provider is responsible for those employees’ medical claims.
HingeConnect		A proprietary AI-driven database that integrates external EHRs and other data sources into Hinge Health’s technology platform for member identification and engagement. HingeConnect informs and enables highly personalized care and coordination with external providers.
LTM Average Eligible Lives		The average number of eligible lives calculated as the sum of eligible lives as of the first quarter and eligible lives as of the end of the last quarter in a given 12-month period, divided by two.
Medicare Advantage		Health plan for people aged 65 and older that is managed by private insurance companies that contract with the federal government. These private insurance companies receive a set payment from Medicare, administer benefits, and bear the financial risk of claims made by plan beneficiaries.
Member		An eligible life, including employees and adult dependents of our clients, who has engaged with our platform at any point and whose engagement has been billed or is contractually eligible to be billed.
MSK		Musculoskeletal system, which refers to the performance of the locomotor system composed of intact muscles, bones, joints, and adjacent connective tissues.
Partners		Health plans, Pharmacy Benefit Managers (“PBMs”), Third-Party Administrators (“TPAs”), and other ecosystem entities such as centers of excellence and healthcare navigation companies.
Pharmacy Benefit Managers (“PBMs”)		Third-party companies that act as an intermediary between insurance providers and pharmaceutical companies.
Self-Insured Employers		Employers who bear the financial risk of medical claims for their employees and their dependents and utilize health plans for their administrative services only.
Third-Party Administrator (“TPA”)		Company or organization that collects and processes insurance claims and delivers support for health plans and employers.

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements.

HINGE HEALTH, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

Unaudited

(in thousands, except share and par value data)


	June 30,			December 31,
	2025			2024
Assets
Current assets:
Cash and cash equivalents	$	237,170		$	300,785
Marketable securities		176,087			165,787
Accounts receivable, net of allowance for credit losses of $7,649 and $6,470 as of June 30, 2025 and December 31, 2024, respectively		99,299			42,495
Deferred commissions		24,354			18,615
Inventory		13,987			10,873
Prepaid expenses and other current assets		47,528			44,891
Total current assets		598,425			583,446
Goodwill		64,096			61,607
Intangible assets, net		2,961			1,807
Property, equipment and software, net		7,724			7,380
Operating lease right-of-use assets		8,605			9,607
Other assets		11,843			9,412
Total assets	$	693,654		$	673,259
Liabilities, redeemable convertible preferred stock and stockholders’ equity (deficit)
Current liabilities:
Accounts payable and accrued liabilities	$	34,898		$	27,853
Operating lease liabilities		4,047			3,814
Deferred revenue		275,138			217,632
Total current liabilities		314,083			249,299
Operating lease liabilities, noncurrent		5,919			7,258
Total liabilities		320,002			256,557
Commitments and Contingencies (Note 6)
Redeemable convertible preferred stock:
Redeemable convertible preferred stock, $0.00001 par value; 4,330,341 shares of Series E authorized, 2,581,837 shares of Series E preferred stock issued and outstanding as of June 30, 2025, 48,190,771 shares authorized and 48,150,146 shares issued and outstanding as of December 31, 2024; aggregate liquidation preference of $200,000 and $845,478 as of June 30, 2025 and December 31, 2024, respectively		199,874			851,272
Stockholders’ equity (deficit):
Class A common stock, $0.00001 par value: 1,000,000,000 shares authorized as of June 30, 2025; 26,909,512 shares issued and outstanding as of June 30, 2025		—			—
Class B common stock, $0.00001 par value: 120,000,000 shares authorized as of June 30, 2025; 51,216,506 shares issued and outstanding as of June 30, 2025		—			—
Common stock, $0.00001 par value: 0 and 98,109,595 authorized as of June 30, 2025 and December 31, 2024, respectively; 0 and 16,379,906 shares issued and outstanding as of June 30, 2025 and December 31, 2024, respectively		—			—
Additional paid-in capital		1,255,059			88,097
Accumulated other comprehensive gain (loss)		(34	)		68
Accumulated deficit		(1,081,247	)		(522,735	)
Total stockholders’ equity (deficit)		173,778			(434,570	)
Total liabilities, redeemable convertible preferred stock and stockholders’ equity (deficit)	$	693,654		$	673,259

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

HINGE HEALTH, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

Unaudited

(in thousands, except per share data)


	Three Months Ended June 30,						Six Months Ended June 30,
	2025			2024			2025			2024
Revenue	$	139,098		$	89,825		$	262,923		$	172,533
Cost of revenue		41,335			23,208			64,927			47,976
Gross profit		97,763			66,617			197,996			124,557
Operating expenses:
Research and development		279,962			24,920			303,462			54,683
Sales and marketing		147,228			44,894			193,944			87,037
General and administrative		251,244			14,354			268,125			31,812
Total operating expenses		678,434			84,168			765,531			173,532
Loss from operations		(580,671	)		(17,551	)		(567,535	)		(48,975	)
Other income:
Other income, net		4,694			4,986			9,695			10,104
Net loss before income taxes		(575,977	)		(12,565	)		(557,840	)		(38,871	)
Provision (benefit) for income taxes		(326	)		361			672			519
Net loss	$	(575,651	)	$	(12,926	)	$	(558,512	)	$	(39,390	)
Adjustment to reflect deemed contribution from Series D and Series E redeemable convertible preferred stock extinguishment		—			—			104,174			—
Net loss attributable to common stockholders	$	(575,651	)	$	(12,926	)	$	(454,338	)	$	(39,390	)
Net loss per share attributable to common stockholders, basic and diluted	$	(13.10	)	$	(0.96	)	$	(15.05	)	$	(2.93	)
Weighted average shares attributable to common stockholders, basic and diluted		43,931			13,528			30,190			13,455
Other comprehensive loss:
Unrealized loss on marketable securities, net of taxes		(44	)		(11	)		(102	)		(116	)
Comprehensive loss	$	(575,695	)	$	(12,937	)	$	(558,614	)	$	(39,506	)

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

HINGE HEALTH, INC.

CONDENSED CONSOLIDATED STATEMENTS OF REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY (DEFICIT)

Unaudited

(in thousands, except share amounts)


	Redeemable Convertible											Additional			Other						Total
	Preferred Stock						Common Stock					Paid-in			Comprehensive			Accumulated			Stockholders’
	Shares			Amount			Shares			Amount		Capital			(Income) Loss			Deficit			Equity (Deficit)
Balances at December 31, 2024		48,150,146		$	851,272			16,379,906		$	—	$	88,097		$	68		$	(522,735	)	$	(434,570	)
Issuance of common stock upon exercise of options		—			—			65,750			—		97			—			—			97
Proceeds from repayment of recourse loans for settlement of restricted stock awards		—			—			—			—		4,935			—			—			4,935
Adjustment to reflect deemed contribution from Series and Series E redeemable convertible preferred stock extinguishment		—			(104,174	)		—			—		104,174			—			—			104,174
Stock-based compensation		—			—			—			—		7			—			—			7
Unrealized loss on marketable securities		—			—			—			—		—			(58	)		—			(58	)
Net income		—			—			—			—		—			—			17,139			17,139
Balances at March 31, 2025		48,150,146		$	747,098			16,445,656		$	—	$	197,310		$	10		$	(505,596	)	$	(308,276	)
Issuance of common stock upon exercise of options		—			—			120,657			—		159			—			—			159
Settlement of repurchase agreement		(4,983,533	)		(200,694	)		4,150,200			—		150,694			—			—			150,694
Conversion of redeemable convertible preferred stock to Class B common stock in connection with initial public offering		(40,584,776	)		(346,530	)		40,584,776			—		346,530			—			—			346,530
Stock-based compensation		—			—			—			—		590,983			—			—			590,983
Issuance of Class A common stock pursuant to the initial public offering, net of issuance and offering costs		—			—			8,522,528			—		241,641			—			—			241,641
Issuance of common stock upon settlement of restricted stock units and performance-based restricted stock units		—			—			16,815,445			—		—			—			—			—
Tax withholdings on settlement of restricted stock units and performance-based restricted stock units		—			—			(8,513,244	)		—		(272,258	)		—			—			(272,258	)
Unrealized loss on marketable securities		—			—			—			—		—			(44	)		—			(44	)
Net loss		—			—			—			—		—			—			(575,651	)		(575,651	)
Balances at June 30, 2025		2,581,837		$	199,874			78,126,018		$	—	$	1,255,059		$	(34	)	$	(1,081,247	)	$	173,778

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

HINGE HEALTH, INC.

CONDENSED CONSOLIDATED STATEMENTS OF REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY (DEFICIT)

Unaudited

(in thousands, except share amounts)


											Accumulated
	Redeemable Convertible								Additional		Other						Total
	Preferred Stock				Common Stock				Paid-in		Comprehensive			Accumulated			Stockholders’
	Shares		Amount		Shares		Amount		Capital		(Income) Loss			Deficit			Deficit
Balances at December 31, 2023		48,150,146	$	851,272		15,956,516	$	—	$	86,748	$	60		$	(510,802	)	$	(423,994	)
Issuance of common stock upon exercise of options		—		—		36,122		—		61		—			—			61
Stock-based compensation		—		—		—		—		304		—			—			304
Unrealized loss on marketable securities		—		—		—		—		—		(105	)		—			(105	)
Net loss		—		—		—		—		—		—			(26,464	)		(26,464	)
Balances at March 31, 2024		48,150,146	$	851,272		15,992,638	$	—	$	87,113	$	(45	)	$	(537,266	)	$	(450,198	)
Issuance of common stock upon exercise of options		—		—		172,325		—		219		—			—			219
Stock-based compensation		—		—		—		—		306		—			—			306
Unrealized loss on marketable securities		—		—		—		—		—		(11	)		—			(11	)
Net loss		—		—		—		—		—		—			(12,926	)		(12,926	)
Balances at June 30, 2024		48,150,146	$	851,272		16,164,963	$	—	$	87,638	$	(56	)	$	(550,192	)	$	(462,610	)

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

HINGE HEALTH, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Unaudited

(in thousands)


	Six Months Ended June 30,
	2025			2024
Operating activities
Net loss	$	(558,512	)	$	(39,390	)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization		2,646			3,168
Stock-based compensation		590,990			610
Amortization of deferred commissions		19,870			13,411
Accretion of discounts and amortization of premiums on marketable securities, net		326			217
Excess and obsolete inventory charge		—			1,812
Non-cash operating lease expense		1,688			1,833
Provision for credit losses		2,780			2,487
Deferred income taxes		96			—
Other		(2	)		(3	)
Changes in operating assets and liabilities:
Accounts receivable		(59,584	)		(23,281	)
Deferred commissions		(27,650	)		(18,171	)
Inventory		(3,114	)		1,137
Prepaid expenses and other current assets		(6,609	)		1,295
Other assets		(485	)		239
Accounts payable and accrued liabilities		6,997			(7,661	)
Operating lease liabilities		(1,792	)		(2,372	)
Deferred revenue		57,505			46,934
Net cash provided by (used in) operating activities		25,150			(17,735	)
Investing activities
Purchase of property and equipment		(248	)		(567	)
Capitalized internal use software		(2,336	)		(1,316	)
Purchases of marketable securities		(175,282	)		(160,768	)
Maturities of marketable securities		164,556			181,550
Acquisition of a business		(4,000	)		—
Net cash provided by (used in) investing activities		(17,310	)		18,899
Financing activities
Proceeds from exercise of common stock options		256			277
Proceeds from issuance of common stock in initial public offering, net of issuance costs		255,675			—
Tax withholdings on settlement of restricted stock units and performance-based restricted stock units		(272,258	)		—
Payment on Repurchase Agreement with Coatue		(50,000	)		—
Proceeds from repayment of non-recourse loans to employees		4,934			—
Payments for deferred offering costs		(10,061	)		(125	)
Net cash provided by (used in) financing activities		(71,454	)		152
Net increase (decrease) in cash		(63,614	)		1,316
Cash, cash equivalents and restricted cash, beginning of period		302,586			237,474
Cash, cash equivalents and restricted cash, end of period	$	238,972		$	238,790
Reconciliation of cash, cash equivalents and restricted cash to the consolidated balance sheets:
Cash and cash equivalents	$	237,170		$	236,628
Restricted cash		1,802			2,162
Total cash, cash equivalents and restricted cash	$	238,972		$	238,790
Supplemental disclosures of noncash operating activities
Cash paid for income taxes	$	199		$	207
Supplemental disclosures of noncash investing and financing activities
Property and equipment purchased and unpaid at period end	$	—		$	366
Unpaid deferred offering costs at period end	$	538		$	361
Right-of use assets obtained in exchange for lease obligations	$	686		$	—
Conversion of redeemable convertible preferred stock for Coatue in connection with initial public offering	$	150,694		$	—
Conversion of redeemable convertible preferred stock for all other in connection with initial public offering	$	346,530		$	—
Adjustment to reflect deemed contribution from Series D and E redeemable convertible preferred stock extinguishment	$	104,174		$	—

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

Hinge Health Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

Description of Business

Hinge Health, Inc. and its subsidiaries and consolidated professional corporations (collectively “Hinge Health” or the “Company”) is focused on scaling and automating the delivery of health care, starting with musculoskeletal conditions. Leveraging an AI-powered care model, a wearable device, and access to expert clinicians, Hinge Health delivers personalized, evidence-based care that helps people move beyond pain, improving member outcomes and experiences and reducing costs for clients. The Company’s clients are primarily self-insured employers. The Company’s members represent an eligible life who has engaged with the Company’s platform at any point and whose engagement has been billed or is contractually eligible to be billed.

The Company was incorporated in Delaware in March 2016 and is headquartered in San Francisco, California. The Company has wholly-owned subsidiaries in Canada, India and the United Kingdom that provide research and development support.

Completion of Initial Public Offering

In May 2025, the Company completed its initial public offering (“IPO”) of shares of Class A common stock. Immediately prior to the completion of the IPO, the Company amended and restated its certificate of incorporation which provided for (i) the reclassification of all outstanding shares of the Company’s common stock (other than those held by Daniel Perez and Gabriel Mecklenburg (the “Founders”) and their affiliates) into an equal number of shares of Class A common stock, (ii) the reclassification of all shares of the Company’s common stock underlying outstanding equity awards under the Company’s 2017 Equity Incentive Plan (the “2017 Plan”) (other than those held by the Founders) into shares of Class A common stock pursuant to an amendment to the 2017 Plan, (iii) the reclassification of all outstanding common stock held by the Founders and their affiliates into an equal number of shares of Class B common stock, (iv) the reclassification of all shares of the Company’s common stock underlying outstanding equity awards under the 2017 Plan held by the Founders into shares of Class B common stock pursuant to an amendment to the 2017 Plan, (v) the amendment of the terms of the Company’s outstanding Series E redeemable convertible preferred stock, par value $0.00001 per share (the “Series E preferred stock”), to provide that such shares are initially convertible into shares of Class B common stock (collectively referred to as the “Common Stock and Series E Preferred Stock Reclassification”), (vi) the automatic conversion and reclassification of 42,986,472 of outstanding shares of the Company’s redeemable convertible preferred stock, or all outstanding shares of Series A-1, Series A-2, Series B, Series C, Series C-1, and Series D redeemable convertible preferred stock, into an aggregate of 42,986,472 shares of Class B common stock (collectively referred to as the “General Preferred Stock Conversion and Reclassification”), and (vii) the voluntary conversion of 1,748,504 outstanding shares of Series E preferred stock into the same amount of shares of Class B common stock (together with the General Preferred Stock Conversion and Reclassification, referred to as the “Preferred Stock Conversion”). The Company used substantially all of the proceeds from the IPO to pay employee taxes on the restricted stock units and performance restricted stock unit settlement.

Prior to the IPO, deferred offering costs, which consisted of accounting, legal and other fees directly related to the IPO, were capitalized as other non-current assets on the unaudited condensed consolidated balance sheets. In connection with the IPO, $14.0 million of deferred offering costs were reclassified to stockholders’ equity (deficit) as a reduction of the net proceeds received from the IPO.

Summary of Significant Accounting Policies

The accompanying unaudited condensed consolidated financial statements reflect the application of certain significant accounting policies as described below and elsewhere in these notes to the unaudited condensed consolidated financial statements. Certain information and disclosures normally included in consolidated financial statements prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) have been condensed or omitted. Accordingly, these unaudited condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements for the year ended December 31, 2024 and the related notes included in the Company’s final prospectus dated May 21, 2025, filed with the U.S. Securities and Exchange Commission (the “SEC”) pursuant to Rule 424(b)(4) under the Securities Act of 1933, as amended (the "Securities Act") on May 22, 2025 (the “Prospectus”).

Basis of Presentation

The unaudited condensed consolidated financial statements and accompanying notes have been prepared in accordance with GAAP and regulations of the SEC for interim financial information. The June 30, 2025 unaudited condensed consolidated balance sheet was derived from the Company’s audited consolidated financial statements as of December 31, 2024. The unaudited condensed

Hinge Health Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

consolidated financial statements include, in the opinion of management, all adjustments, consisting of normal and recurring items, necessary for the fair statement of the condensed consolidated financial statements. The Company’s unaudited condensed consolidated financial statements include the accounts of the Company, its wholly-owned subsidiaries and its affiliated professional medical corporations. The Company’s affiliated professional medical corporations are collectively referred to as Hinge Health Digital P.C.

Hinge Health Digital P.C. contracts with or otherwise employs physicians, physical therapists and other licensed health professionals in order to provide services to the Company’s clients, and under certain management services agreements, the Company serves as the exclusive manager and administrator of Hinge Health Digital P.C.’s non-clinical functions and services. Hinge Health Digital P.C. is considered a variable interest entity (“VIE”) for which the Company is the primary beneficiary. The Company has the rights and power to control the activities of Hinge Health Digital P.C. and as a result the Company consolidates the activities of Hinge Health Digital P.C.

As of June 30, 2025 and December 31, 2024, total assets of the VIE, all of which are current, were $5.4 million and $4.0 million, respectively, and total liabilities, all of which are current, were $7.9 million and $6.3 million, respectively, after the elimination of intercompany transaction balances.

All intercompany transactions and balances have been eliminated upon consolidation.

Any reference in these notes to applicable guidance is meant to refer to authoritative GAAP as found in the Accounting Standards Codification (“ASC”) and Accounting Standards Update (“ASUs”) of the Financial Accounting Standards Board (“FASB”).

Use of Estimates

The preparation of the unaudited condensed consolidated financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the amounts reported in the Company’s unaudited condensed consolidated financial statements. Significant items that require estimates include, but are not limited to, variable consideration to recognize revenue, inventory valuation, estimated credit losses, income taxes, capitalized internal-use software development costs, the period of benefit for deferred commissions, the valuation of the Company’s common stock prior to the IPO and stock-based compensation. Despite the Company’s intention to establish accurate estimates and use reasonable assumptions, actual results may vary from the Company’s estimates.

Emerging Growth Company Status

The Company is an emerging growth company, as defined by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). Under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards that have different effective dates to public and private companies until the earlier of the date that (i) the company is no longer an emerging growth company or (ii) the company affirmatively and irrevocably opts out of the extended transition period provided in the JOBS Act. As a result, these unaudited condensed consolidated financial statements may not be comparable to companies that comply with the new or revised accounting pronouncements as of public company effective dates. The Company expects to use the extended transition period for any other new or revised accounting standards during the period in which it remains an emerging growth company.

Concentration of Credit Risk

Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents, marketable securities and trade accounts receivable. The primary focus of the Company’s investment strategy is to preserve capital and meet liquidity requirements. The Company’s investment policy addresses the level of credit exposure by limiting the concentration in any one corporate issuer and establishing a minimum allowable credit rating. To manage risk exposure, the Company invests cash equivalents and marketable securities in a variety of fixed income securities, including government and investment-grade debt securities and money market funds. The Company places its cash primarily in checking and money market accounts with reputable financial institutions. Deposits held with these financial institutions may exceed the amount of insurance provided on such deposits, if any.

The Company monitors accounts receivable for uncollectible accounts on an ongoing basis. No client represented greater than 10% of the Company’s accounts receivable as of June 30, 2025 and December 31, 2024. Additionally, no client represented greater than 10% of the Company’s revenue for the three and six months ended June 30, 2025 and 2024. For the purpose of assessing the

Hinge Health Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

concentration of credit risk for significant clients, the Company defines a client as a business or organization that purchases access to the Company’s platform directly from the Company or indirectly through one of the Company’s partners.

The Company is subject to supplier concentration risk from third party suppliers that supply its inventory. The Company relies and expects to continue to rely on a small number of third-party suppliers to supply its inventory requirements. The Company’s inventory and ability to provide its peripheral Enso device product to members could be adversely affected by a significant interruption from these third-party suppliers.

Accounts Receivable and Allowance for Credit Losses

Accounts receivable are stated at the amount management expects to collect from outstanding balances, net of allowances for credit losses. The Company records accounts receivable when it has the unconditional right to bill and receive payment regardless of whether revenue has been recognized. Unbilled receivables include contractually billable invoices that are not yet billed. Amounts that the Company has a contractual right to bill or has billed are non-refundable.

Accounts receivable, net as of June 30, 2025 and December 31, 2024 was composed of the following (in thousands):


	June 30,			December 31,
	2025			2024
Billed accounts receivable	$	69,830		$	37,658
Unbilled accounts receivable		37,118			11,307
Allowance for credit losses		(7,649	)		(6,470	)
Total accounts receivable, net	$	99,299		$	42,495

Allowances for credit losses are provided for those outstanding balances considered to be uncollectible based on the age of each outstanding invoice, historical collection history and the client’s expected ability to pay. Balances that are still outstanding after management has made reasonable collection efforts are written off through a charge to the allowance for credit losses.

Allowance for credit losses during the three and six months ended June 30, 2025 and 2024 was composed of the following (in thousands):


	Three Months Ended June 30,						Six Months Ended June 30,
	2025			2024			2025			2024
Balance, beginning of period	$	7,005		$	4,370		$	6,470		$	3,439
Provision for credit losses		1,894			1,570			2,780			2,487
Write-off for credit losses, net		(1,250	)		(321	)		(1,601	)		(307	)
Balance, end of period	$	7,649		$	5,619		$	7,649		$	5,619

Deferred Commissions

The Company has determined that certain sales incentives provided to the Company’s sales team and payments related to partnership agreements are required to be capitalized when the Company expects to generate future economic benefits from the related revenue-generating contracts subsequent to the initial sales transaction. When determining the economic life of the deferred commission assets recognized, the Company considers historical renewal rates, expectations of future client renewals of contracts, and other factors that could impact the economic benefits that the Company expects to generate from the relationship with its clients. Deferred commissions are amortized over the 12-month member subscription period for partner commissions and estimated five-year client period of benefit for sales commissions and are included in sales and marketing expense in the accompanying unaudited consolidated statements of operations and comprehensive loss.

Hinge Health Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

A summary of the activity of the Company’s deferred commission balances during the three and six months ended June 30, 2025 and 2024 were as follows (in thousands):


	Three Months Ended June 30,						Six Months Ended June 30,
	2025			2024			2025			2024
Balance, beginning of period	$	25,519		$	16,221		$	24,078		$	15,479
Capitalized costs		17,020			11,239			27,651			18,347
Amortized costs		(10,680	)		(7,221	)		(19,870	)		(13,587	)
Balance, end of period	$	31,859		$	20,239		$	31,859		$	20,239
Classified as:
Deferred commissions - current	$	24,354		$	15,978		$	24,354		$	15,978
Other assets - non current		7,505			4,261			7,505			4,261
Balance, end of period	$	31,859		$	20,239		$	31,859		$	20,239

Deferred Revenue

Deferred revenue primarily consists of amounts which the Company has billed or can contractually bill from subscription services and is recognized as the revenue recognition criteria is met.

The following table summarizes the changes in the balances of deferred revenue during the three and six months ended June 30, 2025 and 2024 (in thousands):


	Three Months Ended June 30,						Six Months Ended June 30,
	2025			2024			2025			2024
Balance, beginning of period	$	217,328		$	141,849		$	217,632		$	140,473
Add: billings during the period		196,908			135,382			320,429			219,466
Less: revenue recognized		(139,098	)		(89,825	)		(262,923	)		(172,533	)
Balance, end of period	$	275,138		$	187,406		$	275,138		$	187,406

The Company’s performance obligations are satisfied within 12 months of a member performing their first billable activity. As of June 30, 2025 and December 31, 2024, the deferred revenue balance was composed entirely of noncancellable performance obligations that will be satisfied within 12 months.

Revenue Recognition

The Company earns revenue from subscription fees by providing access to its platform and programs to treat and prevent MSK pain. The Company currently sells its subscriptions to its clients and generates revenue in the United States.

The Company determines revenue recognition through the following five steps:

•

Identification of the contract, or contracts, with a client;

•

Identification of the performance obligations in the contract;

•

Determination of the transaction price;

•

Allocation of the transaction price to the performance obligations in the contract; and

•

Recognition of revenue when, or as, the Company satisfies a performance obligation.

Hinge Health Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

The Company determines it has a contract with a client: (1) when the contract has been approved by the Company and the client; (2) it can identify each party’s rights regarding the services to be transferred and the payment terms for the services; and (3) it has determined that the client has the ability and intent to pay and its members have engaged with the platform. The Company applies judgment in determining the client’s ability and intent to pay, which is based on a variety of factors, including the client’s payment history or, new client reputation and relationship with a health plan partner, as applicable. The Company’s typical contracts have a stated contractual term of three years, however for revenue recognition purposes, the contractual period is one year to align with the member subscription period as there are no enforceable rights and obligations until a subscription period for a member commences upon a first billable activity. After the initial stated contractual term, the Company’s contracts renew automatically for additional one-year terms unless notice of termination is given by the client or the Company.

The contracts contain a number of promised goods and services, including access to the Company’s platform, technical support, as well as the Company’s peripheral products, which includes the Enso device. The Company has determined its contracts contain three performance obligations which are provided to members; (1) access to the platform that is delivered over time; (2) technical support which is delivered in the same pattern using the output method; and (3) the peripheral products, when and if sent as a part of its platform. As the platform and technical support are provided to the client concurrently over the contract term and have the same pattern of transfer, the Company has concluded that these performance obligations represent one performance obligation consisting of a series of distinct services over the contract term.

The Company may provide the Enso device as part of its platform, which remains the legal property of the Company during the contract term. The Company determines whether the Enso device is sent to members based on criteria that it controls. If the Enso device is sent to a member as part of the Company’s platform, it constitutes a lease component as this device remains the property of the Company and the member has the right to direct the use of the device during the contract term. Delivery of the device causes a change to the scope of the contract, as both the Company’s and clients’ rights have changed. The Company accounts for this change as a contract modification resulting in the termination of the old contract and the start of a new contract. The Company’s Enso device qualifies to be accounted for as an operating lease and the pattern of delivery from contract modification date to contract termination is consistent with the timing for non-lease components in the contract. For these client arrangements where the Enso device is leased in combination with services, the Company considers the arrangement to be predominately a service and thus a combined single performance obligation for purposes of revenue recognition.

The transaction price is a fixed annual fee or a variable fee based on member engagement activity during a service period. The Company’s contracts are billed after a member’s first completed billing activity or throughout the service period upon the achievement of cohort milestones or based upon member engagement activity. When the billable volume varies based upon the achievement of cohort milestones or member engagement activity, the consideration is variable at contract outset, and the Company estimates the variable consideration per member using the expected value method. To the extent the Company cannot estimate with reasonable certainty the likelihood that the variable consideration will be achieved, the Company constrains this portion of the transaction price and recognizes it when or as the uncertainty is resolved, which is typically within a short period of time. Based on historical achievement or member engagement experience and periodic lookbacks, the Company adjusts revenue when the uncertainty has been resolved and the Company deems it probable that a significant reversal of revenue will not occur. If the actual amounts of consideration received differ from its estimates, the Company adjusts reported revenue in the period such variances become known. For the three and six months ended June 30, 2025 and 2024 changes to estimated variable consideration were not material.

Members have access to the Company’s platform for a 12-month subscription term that begins after the individual has completed their first billable activity on the platform. The Company does not earn any fees until this point. The Company recognizes revenue for each member ratably over the 12-month member subscription period in order to match the pattern of revenue recognition to the pattern of costs incurred in delivering its platform.

Timing of revenue recognition may differ from the timing of billing. A majority of the Company’s clients are billed upfront or throughout the first quarter of the member’s subscription period. The Company’s performance obligations are satisfied within 12 months of the member’s first billable activity. The Company’s contracts do not contain significant financing components.

Additionally, certain performance guarantees are included in most contracts and are estimated at each reporting period based on the Company’s historical performance or other available information. The Company recognizes any estimated adjustments to the contract price for not achieving the performance guarantees as an adjustment to revenue. Payouts on these performance guarantees have been immaterial to date.

Hinge Health Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

Redeemable Convertible Preferred Stock

The Company has elected to apply the qualitative approach in determining whether an amendment to, or exchange of, an equity-classified redeemable convertible preferred stock (“Preferred Stock”) constitutes a modification or extinguishment when the Preferred Stock is not reclassified as a liability.

On February 18, 2025, the Company entered into a stock repurchase agreement (the “Stock Repurchase Agreement”) with Coatue US 70 LLC and Coatue Growth Fund IV LP (collectively “Coatue”), a holder of more than 5% of the Company’s outstanding capital stock. Pursuant to the Stock Repurchase Agreement, immediately prior to the completion of the Company’s IPO, the Company repurchased shares of Series E preferred stock from Coatue US 70 LLC for an aggregate purchase price of $50.0 million (the “Series E Repurchase”). The closing of the IPO was not conditioned upon the completion of the Series E Repurchase. Concurrently with the Stock Repurchase Agreement, the Company entered into a participation letter with Coatue, pursuant to which Coatue had the right, but not the obligation, to purchase from the Company at the IPO price an aggregate number of shares of Class A common stock in the Company’s IPO up to 5% of the shares of Class A common stock offered in the IPO. Additionally, Coatue voluntarily converted all of its remaining shares of Series E preferred stock into shares of Class B common stock immediately prior to the completion of the IPO and consented to convert and reclassify its shares of Series D Preferred Stock into shares of Class B common stock effective immediately prior to the completion of the IPO.

As of March 31, 2025, the Company recorded a deemed contribution of $104.2 million upon the extinguishment of Series D and E Preferred Stock charged to additional paid in capital in the unaudited condensed consolidated balance sheets. During the three months ended June 30, 2025 the Company repurchased 833,333 shares and paid Coatue $50.0 million which is reflected as a conversion from preferred stock to common stock in the unaudited condensed consolidated statements of redeemable preferred stock and stockholders' equity (deficit).

Recent Accounting Pronouncements Not Yet Adopted

In November 2024, the FASB issued ASU No. 2024-04, Debt—Debt with Conversion and Other Options (Subtopic 470-20). The ASU intends to improve the relevance and consistency in application of the induced conversion guidance in Subtopic 470-20, Debt—Debt with Conversion and Other Options, providing clarifying guidance on how to determine whether a settlement of convertible debt (particularly, cash convertible instruments) at terms that differ from the original conversion terms should be accounted for under the induced conversion or extinguishments guidance. The new standard is effective for the Company for the annual period beginning after December 15, 2025. The Company is currently evaluating the impact of this guidance on its unaudited condensed consolidated financial statements and related disclosures.

In November 2024, the FASB issued ASU No. 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40). The ASU intends to improve the disclosures about a public business entity’s expenses and address requests from investors for more detailed information about the types of expenses (including purchases of inventory, employee compensation, depreciation, amortization, and depletion). The new standard is effective for the Company for the annual period beginning after December 15, 2026. The Company is currently evaluating the impact of this guidance on its unaudited condensed consolidated financial statements and related disclosures.

In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvement to Income Tax Disclosures. The ASU enhances the transparency and decision usefulness of income tax disclosures through expansion of disclosures in an entity’s income tax rate reconciliation table and cash taxes paid both in the U.S. and foreign jurisdictions. The new standard is effective for annual periods beginning after December 15, 2024 on a prospective basis with early adoption permitted. The Company is currently evaluating the impact of this guidance on its unaudited condensed consolidated financial statements and related disclosures.

Cash, Cash Equivalents and Marketable Securities and Fair Value Measurements

The Company’s cash equivalents and marketable securities classified as Level 1 financial instruments are composed of U.S. treasury securities and money market funds. Level 1 financial instruments are in active markets using unadjusted quoted market prices for identical instruments.

Hinge Health Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

The Company’s marketable securities classified as Level 2 financial instruments are composed of investment-grade corporate and government agency securities and commercial paper. Level 2 financial instruments are not in active markets but are from a primary professional pricing source that uses quoted market prices for identical or comparable instruments, rather than direct observations of quoted prices in active markets. Fair values obtained from this professional pricing source can also be based on pricing models whereby all significant observable inputs, including maturity dates, issue dates, settlement dates, benchmark yields, reported trades, broker-dealer quotes, issue spreads, benchmark securities, bids, offers or other market related data, are observable or can be derived from, or corroborated by, observable market data for substantially the full term of the asset. The Company validates the quoted market prices provided by its primary pricing service by comparing the fair values of its Level 2 marketable securities portfolio balance provided by its primary pricing service against the fair values provided by the Company’s marketable security managers.

The Company valued the modification on the Stock Repurchase Agreement, which was accounted for as an extinguishment using Level 3 inputs in the valuation hierarchy due to the presence of significant unobservable inputs and was valued at $104.2 million.

As of June 30, 2025 and December 31, 2024, cash, cash equivalents and marketable securities and the fair value hierarchy level consisted of the following (in thousands):


		June 30, 2025
	Fair value hierarchy level	Amortized cost		Gross unrealized gains		Gross unrealized losses			Total fair value
Assets:
Cash equivalents:
Money market funds	Level 1	$	189,024	$	—	$	—			189,024
Commercial paper	Level 2		8,584		—		(1	)		8,583
Total cash equivalents			197,608		—		(1	)		197,607
Marketable securities:
Commercial paper	Level 2		94,906		2		(37	)		94,871
U.S. treasury securities	Level 1		76,432		7		(1	)		76,438
Corporate bonds	Level 2		4,782		1		(5	)		4,778
Total marketable securities			176,120		10		(43	)		176,087
Total assets		$	373,728	$	10	$	(44	)	$	373,694


		December 31, 2024
	Fair value hierarchy level	Amortized cost		Gross unrealized gains		Gross unrealized losses			Total fair value
Assets:
Cash equivalents:
Money market funds	Level 1	$	259,084	$	—	$	—		$	259,084
Commercial paper	Level 2		4,575		—		—			4,575
Total cash equivalents			263,659		—		—			263,659
Marketable securities:
Commercial paper	Level 2		100,411		49		(7	)		100,453
U.S. treasury securities	Level 1		60,558		30		—			60,588
Corporate bonds	Level 2		4,750		—		(4	)		4,746
Total marketable securities			165,719		79		(11	)		165,787
Total assets		$	429,378	$	79	$	(11	)	$	429,446

There were no transfers into or out of Level 3 securities during the six months ended June 30, 2025 and the twelve months ended December 31, 2024.

As of June 30, 2025 and December 31, 2024, the contractual maturities of the marketable securities were 12 months or less. The Company does not intend to sell the marketable securities, and it is not more likely than not that the Company will be required to sell the marketable securities before recovery of their amortized cost basis, which may be at maturity.

Hinge Health Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

For the three and six months ended June 30, 2025 and 2024, interest income earned from cash and cash equivalents and marketable securities included in other income, net in the unaudited condensed consolidated statements of operations and comprehensive loss, was composed of the following (in thousands):


	Three Months Ended June 30,				Six Months Ended June 30,
	2025		2024		2025		2024
Cash and cash equivalents	$	2,641	$	2,762	$	5,519	$	5,439
Marketable securities		1,922		2,238		3,909		4,640
Total	$	4,563	$	5,000	$	9,428	$	10,079

Balance Sheet Details

Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets as of June 30, 2025 and December 31, 2024 was composed of the following (in thousands):


	June 30,		December 31,
	2025		2024
Deferred inventory costs	$	17,627	$	14,032
Other prepaid expenses		13,503		11,068
Prepaid marketing expenses		12,901		12,845
Other assets		3,497		6,946
Total prepaid expenses and other current assets	$	47,528	$	44,891

Deferred inventory costs for members are amortized ratably over the membership subscription period. The amortization costs for the three months ended June 30, 2025 and 2024 were $7.7 million and $7.4 million, respectively and for the six months ended June 30, 2025 and 2024 were $15.1 million and $16.2 million, respectively. These amortization costs are included in cost of revenue in the unaudited consolidated statements of operations and comprehensive loss.

Inventory

Inventory as of June 30, 2025 and December 31, 2024 was composed of the following (in thousands):


	June 30,		December 31,
	2025		2024
Raw materials	$	5,943	$	4,834
Work in process		316		1,911
Finished goods		7,728		4,128
Total inventory	$	13,987	$	10,873

During the three and six months ended June 30, 2024, the Company incurred excess and obsolete inventory charges related to a strategic decision to shift away from providing kits with tablets and wearable sensors of $1.3 million and $1.8 million, respectively. During the three and six months ended June 30, 2025, there were no excess and obsolete inventory charges related to this transition. As of June 30, 2025 and December 31, 2024 inventory primarily consisted of the Company’s Enso device that have not been shipped to members.

Hinge Health Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

Property, Equipment and Software, Net

Property, equipment and software as of June 30, 2025 and December 31, 2024 was composed of the following (in thousands):


	June 30,			December 31,
	2025			2024
Capitalized internal-use software	$	18,813		$	16,477
Computers and software		4,972			4,957
Furniture and fixtures		489			331
Machinery and equipment		2,015			1,976
Leasehold improvements		203			203
Total		26,492			23,944
Accumulated depreciation and amortization		(18,768	)		(16,564	)
Property, equipment and software, net	$	7,724		$	7,380

During the three months ended June 30, 2025 and 2024, depreciation expense was $0.3 million and $0.5 million, respectively and during the six months ended June 30, 2025 and 2024, depreciation expense was $0.7 million and $1.0 million, respectively. During the three months ended June 30, 2025 and 2024, the Company capitalized internal-use software costs of $1.6 million and $0.5 million, respectively, and incurred amortization expense of $0.8 million and $1.0 million, respectively. During the six months ended June 30, 2025 and 2024 the Company capitalized internal-use software costs of $2.3 million and $1.3 million, respectively, and incurred amortization expense of $1.6 million and $2.0 million, respectively.

Accounts Payable and Accrued Liabilities

Accounts payable and accrued liabilities as of June 30, 2025 and December 31, 2024 was composed of the following (in thousands):


	June 30,	December 31,
	2025	2024
Accrued employee related costs	$

Hinge Health, Inc. 10-Q