[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]

Financial Performance - Total sales for the three months ended September 30, 2023, were $185.622 million, a decrease of 9.3% compared to $204.547 million in the same period of 2022[10]. - Gross profit for the nine months ended September 30, 2023, was $274.395 million, down from $297.464 million in the same period of 2022, reflecting a decrease of 7.7%[10]. - Operating loss for the three months ended September 30, 2023, was $31.545 million, an improvement from a loss of $47.493 million in the same period of 2022[10]. - Net loss for the nine months ended September 30, 2023, was $192.609 million, compared to a net loss of $78.741 million in the same period of 2022, indicating a significant increase in losses[10]. - The company reported a comprehensive loss of $192.998 million for the nine months ended September 30, 2023, compared to a comprehensive loss of $83.189 million in the same period of 2022[10]. - Net loss for the nine months ended September 30, 2023, was $192.6 million, compared to a net loss of $78.7 million for the same period in 2022, representing an increase of 144%[19]. - Net loss for Q3 2023 was $32.961 million, compared to a net loss of $48.970 million in Q3 2022, representing a 32.6% reduction[10]. - Comprehensive loss for Q3 2023 was $33.974 million, down from $49.752 million in Q3 2022[10]. - The company reported a net loss per share of $0.51 for Q3 2023, an improvement from $0.76 in Q3 2022[10]. Cash and Assets - Cash and cash equivalents decreased to $79.611 million as of September 30, 2023, from $172.517 million as of December 31, 2022[9]. - Total assets decreased to $939.909 million as of September 30, 2023, down from $1.052 billion as of December 31, 2022[9]. - Total stockholders' equity decreased to $314.000 million as of September 30, 2023, from $439.947 million as of December 31, 2022[9]. - Total current assets decreased to $758.1 million as of September 30, 2023, from $850.0 million as of December 31, 2022[9]. - The Company’s total stockholders' equity at September 30, 2023, was $421.8 million, down from $433.1 million at December 31, 2021, reflecting a decrease of 2.9%[16]. - Cash and cash equivalents at the end of the period decreased to $79.6 million in 2023 from $123.8 million in 2022, a decline of 36%[19]. - Total financial assets measured at fair value as of September 30, 2023, amounted to $482.4 million, a decrease from $595.1 million as of December 31, 2022, representing a decline of approximately 19%[53]. - Cash equivalents decreased from $150.7 million in December 2022 to $63.8 million in September 2023, a reduction of about 58.6%[53]. Expenses and Liabilities - Research and development expenses for the nine months ended September 30, 2023, increased to $127.063 million, compared to $103.529 million in the same period of 2022, reflecting a growth of 22.7%[10]. - Stock-based compensation expense increased to $65.3 million in 2023 from $60.5 million in 2022, reflecting a rise of approximately 8%[19]. - The company incurred an operating lease impairment charge of $14.1 million in 2023, which was not present in 2022[19]. - Total liabilities increased to $625.9 million as of September 30, 2023, from $612.8 million as of December 31, 2022[9]. - The Company recognized total interest expense of $8.079 million for the nine months ended September 30, 2023, compared to $4.629 million for the same period in 2022, reflecting an increase of 74.5%[77]. - The Company has accrued approximately $3.1 million in additional interest on the Notes since May 2021, with overdue unpaid interest accruing at a rate of 2.50% per annum[76]. Revenue and Sales - The Company’s revenue recognition is primarily from sales of insulin pumps and related disposable products, with revenue recognized upon transfer of control to customers[35]. - Total revenue for the three months ended September 30, 2023, was $185.6 million, a decrease of 9.2% compared to $204.5 million for the same period in 2022[97]. - Revenue from the United States for the three months ended September 30, 2023, was $130.2 million, down from $146.0 million in 2022, representing a decline of 10.0%[97]. - Revenue from outside the United States for the three months ended September 30, 2023, was $55.4 million, a decrease of 5.5% from $58.5 million in the same period of 2022[97]. - The Company completed the acquisition of AMF Medical on January 19, 2023, for a total consideration of CHF 62.4 million, plus contingent earnout payments of up to CHF 129.6 million[100]. - The Company recorded a $78.8 million charge for acquired in-process research and development assets related to the AMF Medical acquisition[101]. - The acquisition of Capillary Biomedical was completed for total cash consideration of $24.7 million, with an assumption of $4.7 million in long-term debt[102]. Inventory and Receivables - Accounts receivable, net as of September 30, 2023, was $100.318 million, down from $114.717 million at December 31, 2022[49]. - Total inventories as of September 30, 2023, amounted to $143.492 million, significantly higher than $111.117 million at December 31, 2022[51]. - The allowance for credit losses increased to $5.355 million as of September 30, 2023, compared to $4.327 million at December 31, 2022[50]. - The total provision for expected credit losses for the nine months ended September 30, 2023, was $4,066,000, compared to $2,955,000 in the same period of 2022, reflecting an increase of approximately 37.6%[50]. Legal and Compliance - The Company is involved in various legal proceedings, including a putative securities class action complaint filed on September 8, 2023, alleging violations of the Securities Exchange Act[105]. - The Company believes it is not currently a party to any legal proceedings or regulatory matters for which a material loss was considered probable as of September 30, 2023[106]. Stock and Equity - The Company granted 208,082 restricted stock units (RSUs) during the three months ended September 30, 2023, with a weighted average grant date fair value of $29.19 per share[88]. - The Company has reserved 11,617 thousand shares of common stock for future issuance as of September 30, 2023[83]. - The Capped Call Transactions were recorded at a net cost of $34.1 million, intended to reduce potential dilution beyond a conversion price of $112.57[78].

Financial Data and Key Metrics Changes - The company achieved $198 million in worldwide sales for Q2 2023, with over 29,000 pump shipments, reflecting operational execution despite market pressures [57] - U.S. sales were $145 million in Q2, with pump shipments increasing by 12% sequentially to 19,000 compared to Q1 [26] - Gross margin improved to 52% in Q2, up nearly 2 percentage points year-over-year, driven by a favorable product mix [60] - Adjusted EBITDA returned to profitability at 3% of sales in Q2, with operating expenses improved by $3 million from Q1 [61] Business Line Data and Key Metrics Changes - The installed base of warranty customers in the U.S. reached approximately 305,000, driving a 10% growth in supply sales year-over-year [27] - International sales generated $53 million in Q2, with 11,000 pumps shipped, growing the installed base by over 20% year-over-year to nearly 135,000 [27] - Renewal shipments increased each quarter, with over 60% of 2022 expirations already renewed, reflecting high customer satisfaction [58] Market Data and Key Metrics Changes - The company noted a high level of activity in diabetes devices, with increased competition expected as new products launch both in the U.S. and internationally [49] - The anticipated increase in competition may create turbulence in the market, particularly with the launch of new products [8][9] Company Strategy and Development Direction - The company is focused on expanding its product portfolio with the launch of new innovations, including Tandem Mobi and new sensor integrations [45][52] - A strategic reset of 2023 guidance was implemented to account for market dynamics and the timing of new product launches [9][31] - The company aims for a baseline sales growth of 10% in 2024, starting from revised 2023 sales guidance [34] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to achieve sales targets despite market uncertainties and competitive pressures [66] - The company anticipates that the fourth quarter will represent the strongest quarter for pump shipments in the U.S. due to seasonality [32] - Management highlighted the importance of customer education and marketing efforts as new products are launched [125] Other Important Information - The company is transitioning to a new European distribution center, which will support approximately 70% of international sales going forward [59] - The company plans to introduce promotional pricing for the Tandem Choice program to encourage purchases ahead of new product availability [46] Q&A Session All Questions and Answers Question: What is the expected impact of the upgrade program on guidance? - The guidance was set with a baseline level in mind, without factoring in potential benefits from the upgrade program [38] Question: How does the company view the competitive landscape with new product launches? - The company expects some turbulence from new entrants but believes it can manage through the competition [100] Question: What are the expectations for adjusted EBITDA in 2024? - The company remains confident in achieving long-term goals, but the timing of product uptake will influence future targets [87] Question: How is the company addressing the pausing dynamics in the market? - The company is taking a conservative approach to guidance, factoring in potential pausing as customers await new product availability [92][112] Question: What is the anticipated growth in the U.K. pump market? - The company did not provide specific guidance but indicated that the U.K. market may have similar penetration levels to the U.S. [147]

Part I Financial Information [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) The unaudited condensed consolidated financial statements for June 30, 2023, detail financial position, performance, and cash flows, reflecting decreased assets and increased net loss from higher operating expenses and an acquired R&D charge [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2023, total assets decreased to **$946.7 million** from **$1,052.8 million**, with total liabilities stable at **$617.4 million** and stockholders' equity declining to **$329.2 million** due to net loss Condensed Consolidated Balance Sheets (in thousands) | Account | June 30, 2023 (Unaudited) | December 31, 2022 | | :--- | :--- | :--- | | **Total current assets** | $764,304 | $849,976 | | **Total assets** | **$946,676** | **$1,052,785** | | **Total current liabilities** | $174,655 | $165,290 | | **Total liabilities** | **$617,442** | **$612,838** | | **Total stockholders' equity** | **$329,234** | **$439,947** | [Condensed Consolidated Statements of Operations and Comprehensive Loss](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) Sales for Q2 2023 decreased to **$195.9 million** and net loss widened to **$35.8 million**, while H1 sales decreased to **$365.3 million** and net loss increased to **$159.6 million**, largely due to an acquired R&D charge Statement of Operations Highlights (in thousands, except per share data) | Metric | Q2 2023 | Q2 2022 | H1 2023 | H1 2022 | | :--- | :--- | :--- | :--- | :--- | | Sales | $195,917 | $200,262 | $365,300 | $376,169 | | Gross Profit | $101,735 | $101,946 | $184,642 | $193,039 | | Operating Loss | $(38,808) | $(12,239) | $(166,625) | $(27,577) | | Net Loss | $(35,775) | $(15,056) | $(159,648) | $(29,771) | | Net Loss Per Share (basic) | $(0.55) | $(0.23) | $(2.47) | $(0.47) | [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For H1 2023, net cash used in operating activities was **$24.6 million**, a shift from **$20.7 million** provided in 2022, with cash and cash equivalents decreasing by **$41.8 million** overall Cash Flow Summary (in thousands) | Activity | Six Months Ended June 30, 2023 | Six Months Ended June 30, 2022 | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $(24,649) | $20,701 | | Net cash provided by (used in) investing activities | $(20,631) | $11,554 | | Net cash provided by financing activities | $3,407 | $11,551 | | **Net (decrease) in cash and cash equivalents** | **$(41,766)** | **$43,785** | [Notes to Financial Statements](index=8&type=section&id=Notes%20to%20Financial%20Statements) The notes detail accounting policies, including deferred revenue from the Tandem Choice program, a **$14.1 million** lease impairment, convertible senior notes, and asset acquisitions of AMF Medical and Capillary Biomedical - The Tandem Choice program, which provides customers a material right to upgrade to the new Tandem Mobi pump, resulted in a deferred revenue balance of **$10.5 million** as of June 30, 2023[37](index=37&type=chunk)[38](index=38&type=chunk) - In Q2 2023, the company recorded a **$14.1 million** impairment charge (**$11.2 million** for right-of-use assets and **$2.9 million** for fixed assets) after consolidating facilities and ceasing use of its Vista Sorrento lease[61](index=61&type=chunk) - The acquisition of AMF Medical in January 2023 was accounted for as an asset acquisition, resulting in a **$78.8 million** charge for acquired in-process research and development (IPR&D) with no alternative future use[96](index=96&type=chunk)[97](index=97&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=25&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Q2 and H1 2023 financial performance, noting decreased sales due to market dynamics and inventory adjustments, significantly increased operating expenses from IPR&D and lease impairment, and strong liquidity with over **$507 million** in cash and investments [Overview and Recent Developments](index=25&type=section&id=Overview%20and%20Recent%20Developments) Tandem focuses on diabetes management with its t:slim X2 pump, boasting **437,000** installed units, and recently received FDA clearance for the Tandem Mobi pump, with other pipeline products including t:slim X3 and Sigi Patch Pump - The company's global in-warranty installed customer base is approximately **437,000** insulin pumps as of June 30, 2023[110](index=110&type=chunk) - The FDA cleared the Tandem Mobi insulin pump in July 2023, which is half the size of the t:slim X2. A limited US release is planned for late 2023, with full commercial availability in early 2024[115](index=115&type=chunk) - Products under development include the t:slim X3, a tubeless version of the Mobi pump, the Sigi Patch Pump (from the AMF Medical acquisition), and integrations with next-generation CGMs from Dexcom (G7) and Abbott (FreeStyle Libre)[119](index=119&type=chunk)[120](index=120&type=chunk)[121](index=121&type=chunk)[125](index=125&type=chunk)[126](index=126&type=chunk) [Results of Operations](index=32&type=section&id=Results%20of%20Operations) Q2 2023 total sales decreased **2%** to **$195.9 million**, and H1 sales decreased **3%** to **$365.3 million**, driven by lower pump shipments and distributor adjustments, while operating expenses significantly increased due to a **$78.8 million** IPR&D charge and a **$14.1 million** lease impairment Sales by Geography (in thousands) | Region | Q2 2023 | Q2 2022 | % Change | H1 2023 | H1 2022 | % Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | United States | $142,501 | $145,667 | (2)% | $273,743 | $276,950 | (1)% | | Outside the United States | $53,416 | $54,595 | (2)% | $91,557 | $99,219 | (8)% | | **Total Sales** | **$195,917** | **$200,262** | **(2)%** | **$365,300** | **$376,169** | **(3)%** | - U.S. pump shipments decreased **9%** in Q2 2023 YoY due to challenging marketplace dynamics and economic conditions impacting purchasing decisions[150](index=150&type=chunk) - International sales were impacted by a material disruption in distributor ordering patterns in H1 2023 as they adjusted inventory levels following the launch of a centralized European distribution center in late 2022[151](index=151&type=chunk)[163](index=163&type=chunk) - Operating expenses for H1 2023 were **$351.3 million**, a significant increase from **$220.6 million** in H1 2022, driven by a **$78.8 million** IPR&D expense from the AMF Medical acquisition and a **$14.1 million** operating lease impairment charge[167](index=167&type=chunk) [Liquidity and Capital Resources](index=36&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintained strong liquidity with **$507.2 million** in cash and investments as of June 30, 2023, despite net cash used in operating activities of **$24.6 million** for H1 2023, and expects sufficient capital for the next twelve months - As of June 30, 2023, the company had **$507.2 million** in cash and cash equivalents and short-term investments[173](index=173&type=chunk) Summary of Cash Flows (in thousands) | Cash Flow Activity | Six Months Ended June 30, 2023 | Six Months Ended June 30, 2022 | | :--- | :--- | :--- | | Operating activities | $(24,649) | $20,701 | | Investing activities | $(20,631) | $11,554 | | Financing activities | $3,407 | $11,551 | [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=39&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's market risks include credit, interest rate, and foreign currency exchange, with its short-term investment portfolio minimizing interest rate impact, and foreign currency exposure expected to grow with international expansion - The company's investment portfolio is subject to market risk, but due to the short-term nature of the instruments, a **10%** change in interest rates would not have a material effect[183](index=183&type=chunk)[185](index=185&type=chunk) - Foreign currency exchange risk is primarily related to operations in Canada, the Netherlands (Euro-denominated sales), and Switzerland. This risk is expected to increase as international operations expand[187](index=187&type=chunk)[188](index=188&type=chunk) [Item 4. Controls and Procedures](index=39&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, concluded the company's disclosure controls and procedures were effective as of June 30, 2023, with no material changes in internal control over financial reporting during the quarter - Based on an evaluation as of June 30, 2023, the principal executive officer and principal financial officer concluded that the company's disclosure controls and procedures were effective[190](index=190&type=chunk) - No changes in internal control over financial reporting occurred during the quarter ended June 30, 2023, that materially affected, or are reasonably likely to materially affect, internal controls[192](index=192&type=chunk) Part II Other Information [Item 1. Legal Proceedings](index=41&type=section&id=Item%201.%20Legal%20Proceedings) The company reports no material legal proceedings beyond a consolidated class action lawsuit related to a 2020 phishing incident, which was dismissed but is now under appeal - A consolidated class action lawsuit related to a January 2020 phishing incident was dismissed in Superior Court, but the plaintiffs filed a notice of appeal on March 7, 2023. The company is unable to determine the ultimate outcome or potential loss[100](index=100&type=chunk) [Item 1A. Risk Factors](index=41&type=section&id=Item%201A.%20Risk%20Factors) This section highlights material changes to risk factors, emphasizing data privacy, security, and regulatory compliance, including potential IT system breaches, evolving U.S. and foreign data privacy laws, and regulatory requirements for product clearances and recalls - The company faces significant risks from security breaches or disruptions to its IT systems, which could compromise sensitive customer health information and lead to litigation, regulatory action, and reputational harm[197](index=197&type=chunk)[198](index=198&type=chunk) - The company is subject to stringent and evolving U.S. (HIPAA, CCPA) and foreign (GDPR) data privacy laws, where non-compliance could result in substantial fines, bans on data processing, and other adverse consequences[206](index=206&type=chunk)[208](index=208&type=chunk)[211](index=211&type=chunk) - Modifications to existing products or new products may require new regulatory clearances (510(k) or PMA), and failure to obtain them could lead to marketing cessation or recalls. The FDA or other bodies can also mandate recalls if safety issues are discovered[219](index=219&type=chunk)[222](index=222&type=chunk) [Item 5. Other Information](index=47&type=section&id=Item%205.%20Other%20Information) The company disclosed an inadvertently unfiled amendment to its Certificate of Incorporation, approved in May 2022 to declassify the board, which was subsequently filed on August 1, 2023, with a corresponding bylaw amendment - On August 1, 2023, the company filed a Charter Amendment, previously approved by stockholders in May 2022, to begin the phased elimination of its classified board structure[232](index=232&type=chunk) [Item 6. Exhibits](index=48&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including amended corporate governance documents, the 2023 Long-Term Incentive Plan, and CEO and CFO certifications

Tandem Diabetes Care, Inc. (NASDAQ:TNDM) Q1 2023 Earnings Conference Call May 3, 2023 4:30 PM ET Company Participants Susan Morrison - Executive Vice President and Chief Administrative Officer John Sheridan - President and Chief Executive Officer Brian Hansen - Executive Vice President and Chief Commercial Officer Leigh Vosseller - Executive Vice President and Chief Financial Officer Conference Call Participants Matthew Miksic - Barclays Steven Lichtman - Oppenheimer Christopher Pasquale - Nephron Research ...