Core Insights - Tandem Diabetes Care, Inc. reported a first-quarter 2025 loss of 67 cents per share, which was worse than the previous year's loss of 63 cents and missed the Zacks Consensus Estimate of a loss of 60 cents per share [1] - Despite the earnings miss, TNDM's stock surged 18.6% following the announcement [1] - The company achieved record quarterly revenues, with non-GAAP revenues of $234.4 million, reflecting a year-over-year increase of 21.6% and surpassing the Zacks Consensus Estimate by 6.4% [2] Revenue Performance - Non-GAAP revenues for the first quarter were $234.4 million, up 21.6% year over year, and GAAP revenues also totaled $234.4 million, marking a 22.2% increase [2] - In the United States, non-GAAP sales reached $150.6 million, a 15% increase year over year, with over 17,000 pumps shipped [4] - Internationally, non-GAAP sales were $83.8 million, up from $61.9 million in the prior-year period [5] Margins and Expenses - Gross profit for the quarter was $118.4 million, a 25.1% increase year over year, with a gross margin of 50.5%, up 112 basis points despite a 19.6% rise in the cost of sales [6] - Selling, General and Administrative (SG&A) expenses rose 26.3% to $113.8 million, while Research and Development (R&D) expenses increased 8.6% to $50.2 million [6] - The adjusted operating loss was $45.7 million, compared to a loss of $41.7 million in the same period last year [6] Financial Position - At the end of the first quarter of 2025, Tandem Diabetes had cash, cash equivalents, and short-term investments totaling $368.6 million, down from $438.3 million at the end of the fourth quarter of 2024 [7] Guidance - The company reaffirmed its full-year 2025 GAAP financial guidance, estimating sales between $970 million and $1.007 billion, with the Zacks Consensus Estimate for full-year revenues at $1.00 billion [8] - GAAP sales in the United States are projected to be between $725 million and $730 million, while sales outside the United States are expected to be in the range of $272 million to $277 million [10] Overall Assessment - Tandem Diabetes ended the first quarter of 2025 with mixed results, as earnings lagged estimates but revenues exceeded expectations, driven by an expanding product portfolio [11] - The launch of Control-IQ+ technology for type 2 diabetes patients in the U.S. contributed to the strong performance [11] - However, the company's operating loss remains a concern [12]

Group 1 - Tandem Diabetes Care, Inc. held its Q1 2025 Earnings Conference Call on April 30, 2025, at 4:30 PM ET [1] - The call featured key company participants including Susan Morrison, John Sheridan, and Leigh Vosseller [1][2] - The conference included a presentation followed by a question and answer session for participants [2] Group 2 - The discussion included forward-looking statements regarding management's expectations about future events, product pipeline, development timelines, and financial performance [4] - Management emphasized that these statements reflect expectations as of the date of the call [4]

Core Insights - Tandem Diabetes Care, Inc. reported $234.42 million in revenue for Q1 2025, a year-over-year increase of 22.3% [1] - The EPS for the same period was -$0.67, compared to -$0.63 a year ago, indicating a decline [1] - The revenue exceeded the Zacks Consensus Estimate of $220.24 million by 6.44%, while the EPS fell short of the consensus estimate of -$0.60 by 11.67% [1] Financial Performance Metrics - The company’s stock has returned -10.5% over the past month, underperforming the Zacks S&P 500 composite, which changed by -0.2% [3] - Tandem Diabetes Care has a Zacks Rank 4 (Sell), suggesting potential underperformance in the near term [3] Pump Shipments and Sales - U.S. pump shipments totaled 17,000, slightly above the average estimate of 16,952 [4] - Total worldwide pump shipments were 28,000, below the average estimate of 29,200 [4] - Outside the U.S., pump shipments were 11,000, compared to the average estimate of 12,248 [4] Geographic Sales Performance - Geographic sales outside the U.S. reached $83.79 million, exceeding the average estimate of $74.74 million, representing a year-over-year change of +35.4% [4] - U.S. pump sales were $72.14 million, slightly above the average estimate of $71.94 million, with a year-over-year increase of +16.9% [4] - Sales of supplies and other products in the U.S. amounted to $78.49 million, surpassing the average estimate of $74.32 million, reflecting a year-over-year change of +13.5% [4] - Outside the U.S., pump sales were $29.95 million, below the average estimate of $31.46 million, with a year-over-year change of +17.1% [4] - Sales of supplies and other products outside the U.S. reached $53.84 million, exceeding the average estimate of $43.03 million, representing a year-over-year change of +48.1% [4] - Total geographic revenues in the U.S. were $150.63 million, above the average estimate of $146.17 million, with a year-over-year change of +16.1% [4] - Non-GAAP geographic revenues in the U.S. were $150.63 million, compared to the average estimate of $146.45 million [4] - Revenue from supplies and other products was $132.33 million, exceeding the average estimate of $118.22 million [4] - Pump revenue was $102.09 million, slightly below the average estimate of $102.82 million [4]

Company Performance - Tandem Diabetes Care, Inc. reported a quarterly loss of $0.67 per share, which was worse than the Zacks Consensus Estimate of a loss of $0.60, and compared to a loss of $0.63 per share a year ago, indicating an earnings surprise of -11.67% [1] - The company posted revenues of $234.42 million for the quarter ended March 2025, surpassing the Zacks Consensus Estimate by 6.44%, and showing an increase from year-ago revenues of $191.67 million [2] - Over the last four quarters, Tandem Diabetes Care has surpassed consensus EPS estimates two times and topped consensus revenue estimates three times [2] Stock Performance - Tandem Diabetes Care shares have declined approximately 53.4% since the beginning of the year, in contrast to the S&P 500's decline of -5.5% [3] - The current consensus EPS estimate for the upcoming quarter is -$0.34 on revenues of $247.82 million, and for the current fiscal year, it is -$1.17 on revenues of $1 billion [7] Industry Outlook - The Medical - Instruments industry, to which Tandem Diabetes Care belongs, is currently ranked in the top 25% of over 250 Zacks industries, suggesting a favorable outlook compared to the bottom 50% [8] - The performance of Tandem Diabetes Care's stock may be influenced by the overall outlook for the industry [8]

Financial Data and Key Metrics Changes - The company achieved record first quarter sales of $234 million, representing a 22% year-over-year growth [19] - Adjusted EBITDA improved by five percentage points year-over-year, indicating enhanced profitability [19][24] - Gross margin for Q1 was 51%, consistent with historical trends, driven by reduced per unit costs [24][29] Business Line Data and Key Metrics Changes - In the U.S., sales reached $151 million, a 15% increase year-over-year, driven by healthy pump shipments and strong supply sales [20] - Internationally, sales were $84 million, reflecting a 35% year-over-year growth, supported by demand for the t:slim X2 platform [23] - The product mix between the t:slim X2 and the new Tandem Movi is healthy, with a significant portion of new starts coming from patients converting from multiple daily injections [10][11] Market Data and Key Metrics Changes - Approximately 30% of U.S. lives are now covered under the pharmacy benefit, up from 20% previously reported [21][68] - The company anticipates that more than 70% of sales for the year will come from predictable and recurring revenue streams from supplies and renewals [26] Company Strategy and Development Direction - The company plans to launch new sensor integrations and enhance its technology ecosystem, including the introduction of the Control IQ Plus algorithm [32][34] - Direct sales efforts in select international markets are progressing well, with plans to enhance sales support and technology offerings [17] - The company aims to achieve sustained double-digit sales growth and profitability through improved pricing and disciplined cost management [30][37] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving 2025 commitments despite a dynamic economic environment [25][72] - The company is focused on expanding its pharmacy channel access and scaling growth into the type two diabetes market [37] - Management highlighted the importance of the Control IQ Plus launch and its potential to double the addressable market [15][78] Other Important Information - The company ended the quarter with nearly $370 million in total cash and investments, anticipating a return to positive free cash flow in the second half of 2025 [25] - The company is committed to bringing an industry-leading fully closed loop algorithm to market, with ongoing R&D efforts [36] Q&A Session Summary Question: Update on sales force changes and realignment - Management confirmed that the territory realignment is complete and expects gradual improvement in sales productivity over the next several quarters [40][41] Question: Impact of pricing on U.S. sales - Management indicated that pricing contributed approximately 2% to 3% for pumps and around 10% for supplies, suggesting this is a sustainable level moving forward [45][46] Question: Competitive dynamics in the U.S. market - Management noted that the U.S. market remains competitive but has not seen significant changes recently, with confidence in their product offerings [92][94] Question: Expectations for pharmacy channel contributions - Management stated that pharmacy contributions are expected to be modest in 2025, but early experiences indicate strong potential for future growth [53][68] Question: Guidance reaffirmation after strong Q1 - Management reaffirmed guidance due to the dynamic economic environment, despite a strong performance in Q1 [72] Question: Type two diabetes market potential - Management highlighted that the recent approval of Control IQ Plus has provided access to approximately 300,000 people, with modest contributions factored into 2025 guidance [77][78]

Company Overview - Tandem Diabetes Care has approximately 480,000 in-warranty customers across 25 countries[5, 81] - The company is headquartered in San Diego with around 2,600 employees worldwide[5, 81] - Tandem offers two pump platforms: t:slim X2 and Tandem Mobi, both featuring Control-IQ+ Technology and cleared for type 1 and type 2 diabetes[8, 84] Product Portfolio - The Tandem Mobi system is 55% smaller than other insulin pumps[17] - 95% satisfaction rate among Tandem Mobi Early Access Participants[16] - The t:slim X2 insulin pump is the first in the US to integrate with three continuous glucose monitoring sensors[22] Market and Growth - Less than 40% of the approximately 2 million people with type 1 diabetes in the U S use an insulin pump[55] - Less than 20% of the approximately 3 million people with type 1 diabetes in the countries Tandem serves use a pump[55] - Approximately 5% of the over 2 million people with type 2 Insulin Intensive Diabetes in the U S use an insulin pump[55] Financials - Pumps are reimbursed at approximately $4,000 domestically and $3,000 OUS every 4 years[78] - Supplies cost approximately $4,000 per patient per year, with 120 cartridges and infusion sets used[78] - The total amount realized per patient is approximately $7,000-$8,000 in a four-year reimbursement cycle[79]

Financial Data and Key Metrics Changes - The company achieved record first quarter sales of $234 million, representing a 22% year-over-year growth [17] - Adjusted EBITDA improved by five percentage points year-over-year, indicating a strong operational performance [22] - Gross margin for Q1 was 51%, consistent with Q4, driven by reduced per unit costs of pumps [22][28] Business Line Data and Key Metrics Changes - In the U.S., sales reached $151 million, a 15% increase year-over-year, driven by healthy pump shipments and strong supply sales [18] - Internationally, sales were $84 million, reflecting a 35% year-over-year growth, supported by demand for the t:slim X2 platform [21] - The product mix between the t:slim X2 and the new Tandem Movi is healthy, with a significant portion of new starts coming from patients converting from multiple daily injections [7][8] Market Data and Key Metrics Changes - Approximately 30% of U.S. lives are now covered under the pharmacy benefit, up from 20% previously, indicating improved market access [19][67] - The company anticipates that sales outside the U.S. will be relatively flat for the remainder of the year due to a timing shift in orders [27] Company Strategy and Development Direction - The company plans to enhance its sales efforts and technology offerings outside the U.S. as it prepares for direct sales in select countries starting in 2026 [15] - New product launches, including the Control IQ Plus algorithm and sensor integrations, are expected to drive growth in both U.S. and international markets [30][32] - The company is focused on improving profitability through increased pricing, margin improvement initiatives, and disciplined cost management [28] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving 2025 commitments despite a dynamic economic environment [23][73] - The company is optimistic about the growth potential from the type two diabetes indication, which more than doubles the addressable market [13][79] - Management reaffirmed guidance for sales, gross margin, and EBITDA for 2025, indicating a strong outlook for the year [24][73] Other Important Information - The company has completed its sales force expansion and territory realignment, which is expected to enhance productivity over the coming quarters [9][39] - The recent FDA clearance of Control IQ Plus for type two diabetes is a significant milestone, with initial commercial efforts already underway [11][13] Q&A Session Summary Question: Update on sales force changes and realignment - Management confirmed that the territory realignment is complete and expects gradual improvement in productivity over the next several quarters [39] Question: Impact of pricing on U.S. sales - Management indicated that pricing contributed approximately 2% to 3% for pumps and around 10% for supplies, suggesting this is a sustainable level moving forward [44][45] Question: Competitive dynamics in international markets - Management noted that the competitive environment remains stable, with strong demand for their technology and products in international markets [88] Question: Expectations for pharmacy channel contributions - Management stated that pharmacy contributions are expected to be modest in 2025, but early experiences indicate significant long-term potential [52][68] Question: Clarification on SIGI development timeline - Management clarified that the termination of the previous agreement allows for more control over the development path, potentially improving time to market [58][59] Question: Gross margin performance and future expectations - Management highlighted that improvements in pump costs and the introduction of Mobi are key factors in achieving long-term gross margin targets [62][63] Question: Type two indication and market access - Management acknowledged that while there is coverage for type two patients, Medicare approval processes may present initial challenges [78][80]

Financial Performance - Total sales for the three months ended March 31, 2025, were $234,422,000, representing a 22.3% increase from $191,674,000 in the same period of 2024[10]. - Gross profit for Q1 2025 was $118,407,000, up from $94,672,000 in Q1 2024, indicating a gross margin improvement[10]. - Net loss for Q1 2025 was $130,556,000, compared to a net loss of $42,715,000 in Q1 2024, indicating a significant increase in losses year-over-year[10]. - For the three months ended March 31, 2025, the company reported a net loss of $130.6 million, compared to a net loss of $42.7 million for the same period in 2024, representing an increase in losses of approximately 206%[15]. - The total interest expense for the three months ended March 31, 2025, was $1.8 million, an increase from $1.6 million in the same period of 2024[81]. Operating Expenses - Operating loss increased to $120,878,000 in Q1 2025 compared to a loss of $41,678,000 in Q1 2024, reflecting higher operating expenses[10]. - Total operating expenses for Q1 2025 were $239.3 million, significantly higher than $136.4 million in Q1 2024, driven by $75.2 million in acquired in-process research and development expenses[10]. - The company reported stock-based compensation expense of $25.489 million for the three months ended March 31, 2025, up from $22.039 million in the same period of 2024, an increase of 11.1%[15]. Assets and Liabilities - Total current assets decreased to $663,435,000 as of March 31, 2025, down from $724,491,000 at the end of 2024[8]. - Total liabilities increased to $766,851,000 as of March 31, 2025, compared to $704,560,000 at the end of 2024[8]. - Stockholders' equity decreased to $155,292,000 as of March 31, 2025, down from $263,098,000 at the end of 2024, reflecting the impact of net losses[8]. - Total assets as of March 31, 2025, were $352.5 million, a decrease from $425.3 million as of December 31, 2024, representing a decline of approximately 17.1%[1]. Cash Flow - Net cash used in operating activities was $18.3 million for the three months ended March 31, 2025, compared to $8.0 million for the same period in 2024, indicating a 129% increase in cash outflow[15]. - Cash and cash equivalents at the end of the period were $53.6 million, down from $59.0 million at the end of the same period in 2024, reflecting a decrease of approximately 7.4%[15]. - The company reported a net cash provided by investing activities of $9.2 million for the first quarter of 2025, contrasting with a net cash used of $5.1 million in the same period of 2024[15]. Research and Development - Research and development expenses rose to $50,215,000 in Q1 2025 from $46,244,000 in Q1 2024, highlighting ongoing investment in innovation[10]. - The company incurred $75.2 million in acquired in-process research and development expenses during the first quarter of 2025, with no such expenses reported in the same period of 2024[15]. Revenue Sources - The company’s revenue is primarily generated from sales of insulin pumps and related products, with revenue recognition occurring upon transfer of control to customers[30]. - Revenue from the United States was $150.6 million, up from $129.8 million in the prior year, while revenue from outside the United States increased to $83.8 million from $61.9 million[100]. - Sales of insulin pumps reached $102.1 million, compared to $87.3 million in the previous year, while supplies and other sales totaled $132.3 million, up from $105.5 million[101]. Investments and Securities - The company held equity method investments valued at $71.0 million as of March 31, 2025, down from $74.5 million at the end of 2024[28]. - The company recognized a loss of $3.5 million from equity method investments for the three months ended March 31, 2025, with no such losses reported in the same period of 2024[29]. - The company’s short-term investments totaled $315.051 million as of March 31, 2025, compared to $369.095 million at December 31, 2024[44]. Warranty and Allowances - As of March 31, 2025, the total product warranty reserve increased to $52.210 million from $51.408 million at December 31, 2024[38]. - The allowance for credit losses decreased to $7.125 million as of March 31, 2025, from $7.251 million at December 31, 2024[49]. - Estimated warranty costs are recorded at shipment, with a four-year warranty on insulin pumps and a six-month warranty on cartridges and infusion sets[36]. Debt and Financing - The company issued $316.3 million in convertible senior notes due 2029 in March 2024, with net proceeds of $306.8 million after costs[67]. - The fair value of outstanding convertible senior notes decreased from $446.9 million on December 31, 2024, to $341.0 million on March 31, 2025, a reduction of about 23.7%[58]. - The initial conversion price for the 2029 notes is approximately $34.56 per share, with a conversion rate of 28.9361 shares per $1,000 principal amount[71]. Legal Matters - The Company is involved in ongoing legal disputes regarding patent infringement claims related to its t:slim X2 insulin pump, with hearings scheduled for June 2025[106][107].

Sales Performance - Worldwide sales increased to $234.4 million, representing a 22% growth compared to $191.7 million in the first quarter of 2024[4] - Sales outside the United States reached $83.8 million, up from $61.9 million, marking a 35% increase year-over-year[22] - The company achieved record first quarter sales with a 22% worldwide growth and a 5-point adjusted EBITDA margin increase[5] - GAAP sales for Q1 2025 were $234,422,000, an increase of 22.3% compared to $191,674,000 in Q1 2024[24] - The company estimates full-year sales to be approximately $997 million to $1.007 billion, with U.S. sales projected at $725 million to $730 million[12] Profitability and Loss - GAAP gross profit was $118.4 million with a gross margin of 51%, compared to $94.7 million and 49% in the prior year[4] - GAAP operating loss was $120.9 million, or negative 52% of sales, compared to a loss of $41.7 million, or negative 22% of sales in Q1 2024[4] - Net loss for the quarter was $130.6 million, compared to a net loss of $42.7 million in the same period last year[7] - Adjusted EBITDA was negative $4.7 million, or negative 2% of sales, an improvement from negative $14.4 million, or negative 7% of sales in Q1 2024[7] - Non-GAAP gross profit for Q1 2025 was $118,407,000, up from $95,818,000 in Q1 2024, reflecting a non-GAAP gross margin of 51%[24] - GAAP operating loss for Q1 2025 was $(120,878,000), significantly higher than $(41,678,000) in Q1 2024, with a GAAP operating margin of (52)%[24] - Adjusted EBITDA for Q1 2025 was $(4,694,000), improving from $(14,450,000) in Q1 2024, resulting in an adjusted EBITDA margin of (2)%[24] - GAAP net loss for Q1 2025 was $(130,556,000), compared to $(42,715,000) in Q1 2024[24] - Non-GAAP net loss for Q1 2025 was $(44,172,000), slightly higher than $(41,569,000) in Q1 2024[24] Expenses and Charges - The company recorded $75,217,000 in acquired in-process research and development expenses in Q1 2025[25] - Impairment charges of $6.7 million were recorded for operating lease right-of-use assets in the U.S. and Switzerland[25] - Restructuring costs of $4.3 million were associated with the relocation of certain research and development activities[26] Other Information - Approximately 30% of U.S. lives are now covered through pharmacy benefits for Tandem Mobi[5] - Gross margin for the full year is estimated to be approximately 54% of sales[12] - The Tandem Choice program concluded in 2024, with no impact on sales for this program in 2025[24]

Core Insights - The aging population is significantly reshaping healthcare delivery and resource allocation, with longer life expectancies and declining birth rates creating demographic imbalances [1][2] - By 2030, one in six people globally will be over 60, and by 2050, this figure is expected to rise to 2.1 billion, increasing the share of older adults from 12% in 2015 to 22% [2] - The rise in non-communicable diseases (NCDs) alongside communicable diseases poses challenges for healthcare financing and system sustainability [2] Industry Trends - The global geriatric care market is projected to reach approximately $1.2 trillion by 2025, with a CAGR of 6.4% through 2034, driven by chronic conditions such as cardiovascular disease, diabetes, and dementia [3] - Innovations in medical technology and home care services are enhancing the sector's attractiveness, with digital health solutions and AI-driven diagnostics creating new revenue opportunities [6] Company Strategies - Healthcare companies like Abbott, Novo Nordisk, Exact Sciences, and Tandem Diabetes are positioning themselves to benefit from the aging demographic by expanding their focus on age-related therapeutics and technologies [4][5] - Abbott is a leader in adult nutrition and diabetes care, with products like Ensure and FreeStyle Libre, and is expanding its cardiovascular offerings [8][9] - Novo Nordisk is focusing on Type 2 diabetes and obesity treatments, with drugs like Ozempic and Wegovy, and is addressing supply constraints to meet rising demand [11][12] - Exact Sciences is advancing in cancer diagnostics, with a focus on early detection and personalized treatment solutions, particularly for the elderly [13][14] - Tandem Diabetes is expanding its market share in diabetes care, particularly with its t:slim X2 insulin pump, which integrates with Dexcom's continuous glucose monitoring systems [15][16]