Core Viewpoint - Tandem Diabetes Care, Inc. is positioned for growth due to its innovative product lineup and the expanding diabetes market, although it faces challenges from its reliance on insulin pumps and macroeconomic factors [1][10]. Group 1: Company Performance - Tandem Diabetes has experienced a stock surge of 110.9% over the past year, outperforming the industry growth of 6.1% and the S&P 500's rise of 23.5% [2]. - The company has a market capitalization of $3.36 billion and projects an estimated earnings growth rate of 35.2% for 2025, significantly higher than the S&P 500's 9.3% [2]. - In the trailing four quarters, Tandem Diabetes delivered an average earnings surprise of 9.9% [2]. Group 2: Product Innovation - The company has launched the Tandem Source data management application globally in 2023, enhancing diabetes management by providing comprehensive patient data [3]. - The t:slim X2 pump, integrated with Dexcom's G7 sensor, was rolled out internationally in January 2024, following its U.S. launch [3]. - Tandem Diabetes introduced the first AID system that integrates with Abbott's FreeStyle Libre 2 Plus sensor, benefiting U.S. pump users with a hybrid closed-loop system [4]. - The Tandem Mobi, a smaller version of the t:slim X2 pump, was launched in the U.S. in February 2024 and has received 510(k) clearance for pediatric use [4]. Group 3: Market Potential - The global diabetes care device market is projected to grow from $9.7 billion in 2022 to $17.87 billion by 2032, presenting significant opportunities for Tandem Diabetes [5]. - The company aims to expand the adoption of insulin pumps among type 1 diabetes patients and develop products for type 2 diabetes patients requiring insulin therapy [5][6]. Group 4: Financial Health - As of the first quarter of 2024, Tandem Diabetes had cash and cash equivalents of $467.8 million, with no short-term debt, although long-term debt increased to $348 million [7]. - The cost of sales rose by 12.2% compared to the same period in 2023, indicating potential pressure on margins [11]. Group 5: Challenges - The company relies heavily on insulin pump sales, which accounted for 45% of worldwide sales in Q1 2024, posing risks if market acceptance does not improve [10]. - Macroeconomic uncertainties may hinder the company's ability to predict product demand and could lead to increased expenses due to inflation and commodity price fluctuations [11].

Tandem Diabetes Care, Inc.'s (TNDM) Mobi insulin pump with Control-IQ technology is now fully compatible with both Dexcom's (DXCM) G7 and G6 Continuous Glucose Monitoring ("CGM") Systems. The world's smallest, durable, automated insulin delivery system for people living with diabetes was commercially launched in the United States earlier in February. The availability of Tandem Mobi reflects the company's strategic aim to provide a differentiated portfolio of durable insulin pumps, providing choice alongside ...

Keith Lance Investment Overview I last covered Tandem Diabetes Care (NASDAQ:TNDM) in a note for Seeking Alpha back in November 2020, when the automated insulin pump solutions provider's stock price traded at ~$115. I gave the stock a "Buy" recommendation, which initially proved to be the right call, as 12 months on, it had reached a high of $150 per share. In 2020, Tandem delivered revenues of $499m, and an operating loss of $(8m). In 2021, revenues grew to $703m, and a small operating profit of $23m was ac ...

Tandem Diabetes Care, Inc. (NASDAQ:TNDM) Q1 2024 Earnings Conference Call May 2, 2024 4:30 PM ET Company Participants Susan Morrison - Executive Vice President and Chief Administrative Officer. John Sheridan - President and Chief Executive Officer Leigh Vosseller - Executive Vice President and Chief Financial Officer Conference Call Participants Steve Lichtman - Oppenheimer Brooks O'Neil - Lake Street Capital Markets Mike Kratky - Leerink Partners Mathew Blackman - Stifel Chris Pasquale - Nephron Research M ...

[Part I Financial Information](index=3&type=section&id=Part%20I%20Financial%20Information) [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements for Tandem Diabetes Care, Inc. as of March 31, 2024 [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets slightly decreased to $941.0 million, liabilities increased to $698.0 million due to convertible notes Condensed Consolidated Balance Sheets (in thousands) | | March 31, 2024 | December 31, 2023 | | :--- | :--- | :--- | | **Assets** | | | | Total current assets | $735,193 | $747,989 | | Total assets | $941,045 | $952,658 | | **Liabilities and Stockholders' Equity** | | | | Total current liabilities | $192,971 | $195,258 | | Convertible senior notes, net - long-term | $347,497 | $285,035 | | Total liabilities | $697,981 | $639,026 | | Total stockholders' equity | $243,064 | $313,632 | | Total liabilities and stockholders' equity | $941,045 | $952,658 | [Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Income%20%28Loss%29) Sales increased to $191.7 million, with net loss significantly reduced to $42.7 million, due to the absence of a prior R&D charge Condensed Consolidated Statements of Operations (in thousands, except per share data) | | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :--- | :--- | :--- | | Sales | $191,674 | $169,383 | | Gross profit | $94,672 | $82,907 | | Operating loss | $(41,678) | $(127,817) | | Net loss | $(42,715) | $(123,873) | | Net loss per share - basic and diluted | $(0.65) | $(1.92) | [Condensed Consolidated Statements of Cash Flows](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash used in operating activities improved to $8.0 million, with financing activities providing $13.6 million, stabilizing cash Summary of Cash Flows (in thousands) | | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :--- | :--- | :--- | | Net cash used in operating activities | $(7,996) | $(18,326) | | Net cash used in investing activities | $(5,056) | $(26,329) | | Net cash provided by (used in) financing activities | $13,586 | $(541) | | Net increase (decrease) in cash and cash equivalents | $111 | $(44,755) | | Cash and cash equivalents at end of period | $58,979 | $127,762 | [Notes to Unaudited Condensed Consolidated Financial Statements](index=7&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) Notes detail accounting policies, Tandem Choice revenue, debt financing, segment reporting, and legal proceedings - The Tandem Choice program, which provided a material right for customers to upgrade to the Tandem Mobi pump, resulted in deferred revenue of **$31.5 million** as of March 31, 2024, with eligibility for the program ending in February 2024[29](index=29&type=chunk)[31](index=31&type=chunk)[32](index=32&type=chunk) - In March 2024, the company issued **$316.3 million** of 1.50% Convertible Senior Notes due 2029 and used a portion of the proceeds to repurchase **$246.7 million** of its existing 2025 notes, resulting in a **$1.3 million** loss on debt extinguishment[58](index=58&type=chunk)[59](index=59&type=chunk)[60](index=60&type=chunk) Revenue by Geographic Region (in thousands) | | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :--- | :--- | :--- | | United States | $129,761 | $131,242 | | Outside the United States | $61,913 | $38,141 | | **Total Sales** | **$191,674** | **$169,383** | - The company is defending against a putative securities class action lawsuit and two shareholder derivative cases related to alleged false and misleading statements about sales trends and financial forecasts[102](index=102&type=chunk)[103](index=103&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=27&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Q1 2024 results, highlighting 13% sales growth, Tandem Mobi launch, and narrowed net loss - The company's strategy is to offer flexibility and choice in insulin delivery systems through a portfolio of pumps (t:slim X2, Tandem Mobi), applications, and insights[114](index=114&type=chunk)[122](index=122&type=chunk) - Future technology pipeline includes the t:slim X3, a tubeless option for the Mobi pump, the Sigi Patch Pump, extended wear infusion sets, and advancements in the Control-IQ algorithm[123](index=123&type=chunk)[124](index=124&type=chunk)[126](index=126&type=chunk)[127](index=127&type=chunk)[128](index=128&type=chunk) Q1 2024 vs Q1 2023 Results of Operations (in thousands) | | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :--- | :--- | :--- | | Total sales | $191,674 | $169,383 | | Gross profit | $94,672 | $82,907 | | Gross margin | 49% | 49% | | Operating loss | $(41,678) | $(127,817) | | Net loss | $(42,715) | $(123,873) | - Sales outside the U.S. grew **62%** to **$61.9 million**, while U.S. sales slightly decreased by **1%** to **$129.8 million**, with international growth attributed to recovery from a distributor transition[149](index=149&type=chunk)[151](index=151&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=39&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) No material changes in market risk disclosures, primary exposure to fixed-rate convertible notes mitigating interest rate risk - There were no material changes to the company's quantitative and qualitative disclosures about market risk during the three months ended March 31, 2024[171](index=171&type=chunk) - The company's **$357.0 million** in convertible senior notes bear a fixed interest rate of **1.50%** per year, so the company is not subject to interest rate risk on this debt[172](index=172&type=chunk) [Item 4. Controls and Procedures](index=39&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls were effective as of March 31, 2024, with no material changes in internal control - Based on an evaluation as of March 31, 2024, the principal executive officer and principal financial officer concluded that the company's disclosure controls and procedures were effective at a reasonable assurance level[174](index=174&type=chunk) - No changes in internal control over financial reporting occurred during the quarter ended March 31, 2024, that materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[176](index=176&type=chunk) [Part II Other Information](index=40&type=section&id=Part%20II%20Other%20Information) [Item 1. Legal Proceedings](index=40&type=section&id=Item%201.%20Legal%20Proceedings) This section refers to Note 13 for legal matters, primarily a securities class action and two shareholder derivative cases - Details on legal proceedings are provided in Note 13 of the financial statements, which discusses a securities class action lawsuit and two related shareholder derivative cases[179](index=179&type=chunk)[102](index=102&type=chunk)[103](index=103&type=chunk) [Item 1A. Risk Factors](index=40&type=section&id=Item%201A.%20Risk%20Factors) This section outlines material risks including operating losses, insulin pump reliance, competition, reimbursement, and regulatory challenges - **Business Risks:** The company has a history of significant operating losses (**$994.5 million** accumulated deficit) and relies heavily on sales of its insulin pump products, facing intense competition from major medical device companies like Insulet and Medtronic[193](index=193&type=chunk)[197](index=197&type=chunk)[205](index=205&type=chunk) - **Market & Reimbursement Risks:** Failure to secure or retain adequate coverage and reimbursement from third-party payors could adversely affect business, with new challenges arising from the multi-channel strategy for the Mobi pump through the pharmacy channel[213](index=213&type=chunk)[215](index=215&type=chunk) - **Operational & Supply Chain Risks:** The company depends on a limited number of third-party suppliers for critical components and products, exposing it to risks of supply disruption, quality issues, and cost fluctuations[238](index=238&type=chunk)[240](index=240&type=chunk) - **Privacy & Security Risks:** The business is subject to stringent data privacy laws (e.g., GDPR, HIPAA, CCPA) and cybersecurity threats, where failure to protect sensitive data could lead to significant fines, litigation, and reputational harm[274](index=274&type=chunk)[291](index=291&type=chunk) - **Regulatory & Legal Risks:** The company's products are subject to extensive regulation by the FDA and other global authorities, with non-compliance potentially leading to recalls, fines, or withdrawal of approvals, and ongoing patent litigation with Roche in Europe[320](index=320&type=chunk)[313](index=313&type=chunk)[314](index=314&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=83&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) On March 5, 2024, the company repurchased 1,106,806 shares at $27.105 per share, part of a $30.0 million buyback plan Common Stock Repurchase - March 2024 | Date | Total Shares Purchased | Average Price Paid Per Share | | :--- | :--- | :--- | | March 5, 2024 | 1,106,806 | $27.105 | - The stock repurchase was part of a plan to buy back up to **$30.0 million** of common stock from purchasers of the 2029 Notes in privately negotiated transactions[370](index=370&type=chunk) [Item 6. Exhibits](index=84&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with Form 10-Q, including the 2029 Convertible Notes indenture and CEO/CFO certifications - Key exhibits filed include the indenture for the **1.50%** Convertible Senior Notes due 2029 and CEO/CFO certifications pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act[373](index=373&type=chunk)

Media Contact: 858-366-6900 media@tandemdiabetes.com Investor Contact: 858-366-6900 IR@tandemdiabetes.com Exhibit 99.1 FOR IMMEDIATE RELEASE Tandem Diabetes Care Announces First Quarter 2024 Financial Results and Updates Full Year 2024 Financial Guidance San Diego, May 2, 2024 - Tandem Diabetes Care, Inc. (NASDAQ: TNDM), a global insulin delivery and diabetes technology company, today reported its financial results for the quarter ended March 31, 2024 and increased sales guidance for the year ending Decembe ...

Financial Data and Key Metrics Changes - U.S. sales in Q4 were $163 million, with full-year sales reaching $580 million, driven by supply and installed base growth, with about half of the annual sales coming from supplies [51] - Worldwide sales exceeded expectations at $209 million in Q4, bringing full-year sales to $773 million [70] - Gross margin for 2023 was 51%, down from 52% in 2022, impacted by unfavorable product mix and a rebate pricing adjustment in France [72] Business Line Data and Key Metrics Changes - Total renewal shipments year-over-year grew by more than 50%, indicating strong customer satisfaction and retention [5] - Supply sales grew 35% year-over-year in Q4, reflecting variability in ordering patterns from the previous year [63] - The company anticipates U.S. sales in Q1 2024 to be approximately $122 million, with a significant portion expected from renewals [74] Market Data and Key Metrics Changes - The installed base in the U.S. reached over 310,000 people, an increase of 7% compared to the end of 2022 [51] - Full-year sales outside the U.S. were $193 million, affected by an $8 million rebate reduction in Q4 and a $20 million headwind in the first half of the year [52] - The company is focused on expanding its international market presence, with many markets still less than 20% penetrated [3] Company Strategy and Development Direction - The company is advancing its multichannel managed care strategy and anticipates signing contracts in 2024 to serve Mobi customers through the pharmacy channel [8] - The launch of new products, including Mobi and its integration with DexCom G7, is expected to drive growth and improve market share [60][67] - The company aims to achieve a long-term gross margin target of 65%, with Mobi expected to be a significant contributor [9][87] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the growth opportunities in 2024, projecting worldwide non-GAAP sales of approximately $850 million, reflecting a 10% growth [53] - The competitive landscape is becoming increasingly challenging, particularly outside the U.S., but the company believes its new product offerings will help capture market share [79] - Management noted that the first quarter of 2024 may see a more pronounced decline in pump shipments due to the timing of Mobi's launch [65] Other Important Information - The company funded several key initiatives in 2023, including $69 million for acquisitions and $27 million for capital expenditures [7] - The company is working on future product enhancements, including a tubeless option for Mobi and a rechargeable patch pump [29][49] Q&A Session Summary Question: What are the expectations for Mobi sales compared to t:slim? - Management indicated that Mobi is expected to accelerate sales as it becomes more widely available, with positive early feedback from users [20][92] Question: How does the company view the competitive landscape? - Management acknowledged increased competition but emphasized the unique advantages of their product offerings and the potential for Mobi to regain market share from multiple daily injections [78][92] Question: What is the outlook for Type 2 diabetes products? - The company is actively engaged in clinical studies for Type 2 diabetes products, with expectations for market entry around 2025 [82]

Financial Performance - The company reported significant operating losses since inception, raising concerns about achieving sustained profitability[17] - The company has incurred significant operating losses since inception and cannot assure sustained profitability[17] - The company has incurred a significant amount of indebtedness, which may restrict financial flexibility and operational capabilities[25] - The company's operating results may fluctuate significantly from quarter to quarter[21] - The price of the company's common stock may continue to fluctuate significantly, impacting investor confidence[25] Revenue Dependence - A substantial portion of revenue is generated from insulin pump products, making the company vulnerable to factors negatively impacting these sales[17] - A significant portion of revenue relies on insulin pump product sales, and any negative factors affecting these sales may adversely impact financial results[17] - Retaining a high percentage of the customer base is crucial for maintaining and growing revenue[17] Competition and Market Risks - The company faces competition from alternative products and technologies that could render its offerings less desirable[17] - Competing products and technological developments may render the company's products obsolete or less desirable[17] Supply Chain and Operational Risks - The company relies on independent distributors for sales and marketing, which poses risks if the network cannot be maintained or expanded[17] - The company is dependent on a limited number of third-party suppliers, and any disruption could harm operations[21] - The company depends on a limited number of third-party suppliers for certain components, and loss of these suppliers could harm business operations[21] Regulatory and Compliance Risks - Regulatory compliance is critical, as failure to meet requirements could significantly impact business operations[25] - Compliance with extensive governmental regulations is critical, as failure to do so could negatively impact the business[25] Financial Needs and Market Exposure - Future financing needs may arise, and failure to secure additional funds could hinder strategic objectives[21] - The company operates in a global market, making it susceptible to fluctuations in foreign currency exchange rates[21]

Financial Performance - Q4 2023 GAAP sales in the U.S. were $163.5 million, while total worldwide sales were $209.4 million, reflecting a decrease from $220.5 million in Q4 2022[7] - Total sales for Q4 2023 were $196.8 million, a decrease of 11% compared to $220.5 million in Q4 2022[21] - Non-GAAP sales for Q4 2023 were $209.3 million, down 6% from $223.5 million in Q4 2022[27] - For the full year 2023, GAAP net loss was $222.6 million, compared to a net loss of $94.6 million in 2022[8] - Net loss for Q4 2023 was $30.0 million, or $0.46 per share, compared to a net loss of $15.9 million, or $0.25 per share, in Q4 2022[21] - Adjusted EBITDA for Q4 2023 was $4.3 million, or 2% of sales, down from $25.7 million, or 11% of sales in Q4 2022[7] Gross Profit and Margins - GAAP gross profit for Q4 2023 was $93.3 million, resulting in a gross margin of 47%, down from 52% in Q4 2022[7] - Gross profit for Q4 2023 was $93.3 million, down from $115.5 million in Q4 2022, resulting in a gross margin of 47%[21] - Non-GAAP gross margin is estimated to be approximately 51% for the full year 2024 and 48% for Q1 2024[10] Shipments and Installed Base - The worldwide installed base increased by 7% to approximately 452,000 in-warranty customers compared to Q4 2022[4] - In Q4 2023, total worldwide pump shipments were 27,000, down from 36,000 in Q4 2022, with U.S. shipments at 21,000 and international shipments at 6,000[6] - Pump shipments in the U.S. decreased by 13% to 21,000 units in Q4 2023 from 24,000 units in Q4 2022[25] Research and Development - Research and development expenses increased to $42.6 million in Q4 2023 from $35.6 million in Q4 2022[21] New Products and Sales Deferral - The company launched four new products in the U.S. in 2023, including the Tandem Mobi and Tandem Source platforms[4] - The Tandem Choice program resulted in a GAAP sales deferral of $12.5 million in Q4 2023, compared to $3.0 million in Q4 2022[7] Assets and Liabilities - Total assets decreased to $952.7 million in Q4 2023 from $1,052.8 million in Q4 2022[19] - Total liabilities increased to $639.0 million in Q4 2023 from $612.8 million in Q4 2022[19] Future Projections - The company expects non-GAAP sales of approximately $850 million for the full year 2024, with $175 million projected for Q1 2024[10]

Financial Data and Key Metrics Changes - Third quarter sales reached $194 million worldwide, exceeding baseline expectations, primarily driven by U.S. sales of $138 million from 17,000 pump shipments [9][28] - Supply sales grew by 10%, aligning with the installed base of nearly 445,000 customers [9][27] - Gross margin remained stable at 51%, consistent with the prior year, despite pressures from high-cost raw materials [29][13] - Adjusted EBITDA is expected to be at least breakeven for the year, with operating expenses flat compared to the previous year at $121 million [13][152] Business Line Data and Key Metrics Changes - The installed base in the U.S. reached 308,000 people, with renewals growing sequentially to nearly half of the pumps shipped in the quarter [27][28] - International sales in the third quarter were $55 million, with 8,000 pumps shipped, reflecting typical commercial dynamics during the European summer holiday season [28][11] - The proportion of pumps worldwide represented 45% of sales in Q3 2023, down from 53% in the prior year [12] Market Data and Key Metrics Changes - The company anticipates worldwide sales expectations for the full year 2023 to be $765 million, including $190 million from outside the U.S. [13][28] - The company is experiencing strong double-digit growth rates in several international markets, despite some disruptions [84][105] Company Strategy and Development Direction - The company is focused on expanding pump penetration and addressing unmet customer needs through innovation, including the launch of the t:slim X2 integration with DexCom's G7 sensor and Abbott's FreeStyle Libre 2 sensor [5][15] - The company is in late-stage discussions with the FDA regarding enhancements to the Control-IQ algorithm, aiming to lower age indications and expand feature sets [16][15] - The company is preparing for the broader launch of Mobi in the U.S. in early 2024, with significant interest from healthcare providers and users [6][7] Management's Comments on Operating Environment and Future Outlook - Management noted that 2023 has been a year of transition, with a focus on scaling operations for future growth [9][138] - The management expressed confidence in meeting the adjusted EBITDA guidance due to expected sales increases and cost containment efforts [66][67] - There is a high level of enthusiasm for new product launches, with customers waiting for Mobi and G7, which may impact near-term sales [142][141] Other Important Information - The company is analyzing the potential financial impact of newly enacted reimbursement changes in France, which may affect revenue generation [151][125] - The company ended the quarter with approximately $500 million in total cash and investments, providing financial flexibility for strategic investments [30][13] Q&A Session Summary Question: Can you discuss the pattern of U.S. pump shipments and the impact of the Tandem Choice program? - Management indicated that new customers are expected to defer purchases until 2024, while renewals remain strong, contributing to overall stability [19][37] Question: What gives confidence in hitting the breakeven goal for adjusted EBITDA? - Confidence stems from expected sales increases in Q4 and continued cost containment efforts [66][67] Question: How should we think about the renewal versus new pumpers in Q4? - Renewals are expected to grow, with a 20% increase in warranty expirations compared to Q3, which may encourage new purchases [68][150] Question: Can you clarify the impact of the G7 launch on guidance? - The G7 launch is anticipated to contribute positively, but there may be some initial disruptions as distributors adjust to new product offerings [62][40] Question: What is the expected timeline for Mobi and G7 launches? - Mobi is expected to be a first-quarter product for revenue, while G7 is anticipated to have full availability by the end of the current quarter [60][41]