Tandem Diabetes (TNDM) is gaining from continued product innovations. Yet, rising costs put pressure on margins. The stock carries a Zacks Rank #3 (Hold). Tandem Diabetes is driving transformative innovation to help reduce the burden and create new possibilities for people living with diabetes. During the second quarter, its flagship t:slim X2 insulin pump software became compatible with Dexcom G7. It was already compatible with Dexcom G6 Continuous Glucose Monitoring (CGM) systems. Following this developme ...

NEW YORK, Aug. 09, 2024 (GLOBE NEWSWIRE) -- Bragar Eagel & Squire, P.C., a nationally recognized shareholder rights law firm, is investigating potential claims against Tandem Diabetes Care, Inc. (NASDAQ: TNDM) on behalf of long-term stockholders following a class action complaint that was filed against Tandem on September 8, 2023 with a Class Period from August 3, 2022 to November 2, 2022. Our investigation concerns whether the board of directors of Tandem have breached their fiduciary duties to the company ...

Financial Data and Key Metrics - Worldwide sales grew 12% YoY in Q2 2024, reaching $222 million, marking the second-highest sales quarter in the company's history [17] - Year-to-date worldwide sales were $415 million with approximately 55,000 pump shipments, on pace for 15% sales growth in 2024 [17] - US sales grew 20% sequentially and 8% YoY to $157 million, driven by strong pump shipment trends and increased supply sales [19] - International sales grew 22% YoY to $65 million, primarily driven by a 50% increase in supply sales [22] - Gross margin reached 51% in Q2, exceeding initial expectations, with improvements in pricing and cost initiatives [24] - Adjusted EBITDA was negative 4% of sales for H1 2024, with a sequential improvement to negative 1% in Q2 [25] - The company ended Q2 with over $450 million in total cash and investments [26] Business Line Performance - Tandem Mobi, the new pump platform, gained significant momentum, with 86% of users reporting satisfaction or very high satisfaction [7][8] - More than half of Mobi customers were new to Tandem, with over half of these new customers coming from MDI (multiple daily injections) [12] - Mobi attracted a younger demographic compared to t:slim, aligning with market research and product positioning [12] - The company saw strong demand for both t:slim X2 and Mobi, demonstrating the value of its expanding product portfolio [10] - New sensor integrations, including Dexcom and Abbott, were commercial highlights in 2024 [12][13] Market Performance - In the US, total pump shipments surpassed 20,000 in Q2, growing sequentially by more than 30% [18] - Outside the US, the company shipped approximately 10,000 pumps across 25 markets, with actual pump demand growing nearly 10% YoY [23] - The European distribution center transition, completed in 2023, created a sales headwind of approximately $20 million in H1 2023 [23] Strategy and Industry Competition - The company is focused on offering a leading portfolio of automated insulin delivery systems, supported by data-driven products and services [6] - Tandem Mobi is positioned as a catalyst for market penetration, addressing previously unmet needs in the diabetes community [12] - The company is preparing for the integration of Abbott's FreeStyle Libre 3+ sensor, with a scaled launch expected in 2025 [29] - Tandem Source, a data visualization platform, is being scaled internationally, with positive feedback from healthcare providers [13][14] Management Commentary on Operating Environment and Future Outlook - Management highlighted the strong demand for new technologies, particularly Mobi, as a key driver of financial outperformance [7] - The company is focused on expanding its prescriber base and improving customer experience through innovative products and services [11][15] - Management expects to achieve positive EBITDA and free cash flows in H2 2024, driven by increased pump sales [25] - The company raised its 2024 sales guidance to $885-$892 million, reflecting 15% YoY growth, up from the initial 10% growth expectation [26] Other Important Information - The company is advancing its product pipeline, including extended wear infusion sets and a Type 2 pivotal study, targeting FDA filings by the end of 2024 [30] - Tandem Source has collected over 200 million days of real-world patient data on Control-IQ, with nearly 90% of customers uploading their data [14] - The company is investing in digital health platforms, aiming to integrate with EMR systems and demonstrate health economic benefits to payers [31] Q&A Session Summary Question: What is driving the switch from competitors to Mobi? - The primary driver is the Control-IQ algorithm, which users find superior, particularly former patch users who appreciate the improved wearability and performance [34][35] Question: Can you clarify new patient growth trends? - New patient growth is expected to improve in H2 2024, with Mobi driving higher MDI conversions [37][38] Question: How is Mobi performing with G7 integration? - Mobi demand has been steady, with strong growth in June, the first month of G7 availability, though it's too early to attribute this solely to pent-up demand [46] Question: What is the timeline for tubeless Mobi? - The company is prioritizing the development of a tubeless, durable pump but has not provided a specific timeline [48] Question: Were there any supply constraints for Mobi? - There were no supply constraints for Mobi, and the company is confident in meeting aggressive demand [51][52] Question: How is the sales force preparing for type 2 approval? - The company is evaluating its commercial model and sales force effectiveness, with a focus on expanding prescriber reach [53] Question: What is the market growth outlook? - The market remains underpenetrated, with potential for penetration rates to increase from 35-40% to 60-65% in the coming years [88]

Tandem Diabetes Care, Inc. (TNDM) reported $221.91 million in revenue for the quarter ended June 2024, representing a year-over-year increase of 13.3%. EPS of -$0.47 for the same period compares to -$0.30 a year ago. The reported revenue compares to the Zacks Consensus Estimate of $206.43 million, representing a surprise of +7.50%. The company delivered an EPS surprise of +12.96%, with the consensus EPS estimate being -$0.54. While investors closely watch year-over-year changes in headline numbers -- revenu ...

Tandem Diabetes Care, Inc. (TNDM) came out with a quarterly loss of $0.47 per share versus the Zacks Consensus Estimate of a loss of $0.54. This compares to loss of $0.30 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of 12.96%. A quarter ago, it was expected that this company would post a loss of $0.80 per share when it actually produced a loss of $0.63, delivering a surprise of 21.25%. Over the last four quarters, the company ...

Financial Performance - Total sales for the three months ended June 30, 2024, were $195,917, compared to $365,300 for the same period in 2023, representing a decrease of 46.3%[6] - Gross profit for the six months ended June 30, 2024, was $207,466, down from $184,642 in 2023, indicating an increase of 12.3%[6] - Operating loss for the three months ended June 30, 2024, was $(38,808), compared to $(166,625) in the same period of 2023, showing an improvement of 76.8%[6] - Net loss for the six months ended June 30, 2024, was $(73,529), compared to $(159,648) in 2023, reflecting a reduction of 53.9%[6] - The company reported a net loss per share of $(0.55) for the three months ended June 30, 2024, compared to $(2.47) for the same period in 2023, indicating an improvement of 77.8%[6] - The net loss for Q2 2024 was $30.8 million, compared to a net loss of $35.8 million in Q2 2023, showing an improvement in financial performance[132] - For the six months ended June 30, 2024, total sales were $413.6 million, an increase from $365.3 million in the same period in 2023, with $127.1 million of sales outside the United States[144] Assets and Liabilities - Total current assets decreased to $733,388 as of June 30, 2024, from $747,989 at December 31, 2023, a decline of 2.0%[4] - Total liabilities increased to $703,628 as of June 30, 2024, from $639,026 at December 31, 2023, an increase of 10.1%[4] - Stockholders' equity decreased to $233,875 as of June 30, 2024, from $313,632 at December 31, 2023, a decline of 25.5%[4] - Cash and cash equivalents were $47,697 as of June 30, 2024, down from $58,868 at December 31, 2023, a decrease of 19.0%[4] - As of June 30, 2024, the total fair value of short-term investments was $404.718 million, down from $409.044 million as of December 31, 2023[41] - The total fair value of outstanding convertible senior notes increased to $477,831 thousand as of June 30, 2024, compared to $271,688 thousand at December 31, 2023[53] Research and Development - Research and development expenses for the six months ended June 30, 2024, were $95,570, compared to $85,093 in 2023, an increase of 12.9%[6] - Research and Development expenses increased by 12% to $95.6 million for the six months ended June 30, 2024, compared to $85.1 million for the same period in 2023, driven by increased personnel and clinical trial costs[150] Sales and Revenue - Revenue for Q2 2024 was $221.9 million, a 13.3% increase from $195.9 million in Q2 2023[92] - Sales of insulin pumps in Q2 2024 reached $107.9 million, up from $101.7 million in Q2 2023, indicating a 6.5% growth[92] - Total sales in the United States for Q2 2024 were $156.7 million, compared to $142.5 million in Q2 2023, marking a 10% increase[90] - Pump sales represented 49% of total worldwide sales in Q2 2024, down from 51% in Q2 2023, indicating a shift in product mix[139] Investments and Impairments - The company made strategic investments totaling $30.4 million in private companies as of June 30, 2024, up from $10.1 million at December 31, 2023[26] - The company recorded an impairment charge of $2.0 million related to one of its investments in a private company during the six months ended June 30, 2024, while no impairment charges were recorded in the same period of 2023[26] Operating Expenses - Selling, general and administrative expenses were $94.2 million in Q2 2024, a decrease from $97.6 million in Q2 2023, which included a one-time lease impairment charge of $14.1 million[140] - Operating expenses decreased to $279.9 million for the six months ended June 30, 2024, down from $351.3 million in the same period in 2023, primarily due to the absence of acquired in-process research and development expenses[149] Market and Competitive Environment - The medical device industry is highly competitive, with major competitors like Insulet, Medtronic, and Ypsomed, which may have advantages in resources and market presence[198] - The company faces risks related to market acceptance of its products and competition from key players like Insulet and Medtronic, which could impact sales[190] - The introduction of superior competing products could create market confusion and negatively impact the company's sales and operating margins[201] Customer and Product Strategy - The company has developed retention programs, such as the Tandem Choice Program, to support customer loyalty and ongoing purchases[195] - The company is focused on achieving market acceptance for its insulin pumps, which requires demonstrating distinct benefits over competitive products[203] - The company expects higher net sales in the third and fourth quarters compared to the first half of the year, influenced by the FDA clearance of Tandem Mobi[121] Cash Flow and Liquidity - As of June 30, 2024, the company had $452.4 million in cash and cash equivalents, which is expected to be sufficient to fund ongoing core business activities for at least the next 12 months[154] - Net cash used in operating activities was $13.3 million for the six months ended June 30, 2024, a decrease from $24.6 million used in the same period in 2023[156] Regulatory and Operational Risks - Regulatory approvals and timely product development are critical for maintaining competitiveness in the rapidly changing medical device industry[197] - The company is dependent on a limited number of third-party suppliers for certain components, and any disruptions could harm its business[174] - The company faces risks from supply chain disruptions that could impact the ability to meet customer demand, potentially magnifying negative effects on sales[193]

Financial Performance - Worldwide GAAP sales increased 13% to $221.9 million compared to Q2 2023; non-GAAP sales increased 12% to $221.8 million[3] - GAAP gross profit was $112.8 million with a gross margin of 51%; non-GAAP gross profit was $112.7 million with a gross margin of 51%[6] - GAAP operating loss was $30.8 million, or negative 14% of sales, compared to a loss of $38.8 million, or negative 20% of sales in Q2 2023[6] - Net loss was $30.8 million compared to $35.8 million in Q2 2023[6] - Adjusted EBITDA was negative $1.9 million, or negative 1% of sales, compared to $5.3 million, or 3% of sales in Q2 2023[7] - Total sales for the three months ended June 30, 2024, were $221,910,000, representing a 13% increase compared to $195,917,000 in the same period of 2023[18] - Gross profit for the three months ended June 30, 2024, was $112,794,000, up from $101,735,000 in the same period of 2023, indicating a strong performance in cost management[18] - Operating loss for the three months ended June 30, 2024, was $(30,774,000), an improvement from $(38,808,000) in the same period of 2023[18] - GAAP sales for Q2 2024 reached $221.91 million, a 13.3% increase from $195.92 million in Q2 2023[22] - Non-GAAP sales for the first half of 2024 were $414.58 million, compared to $369.63 million in the same period of 2023, reflecting a 12.1% growth[22] - GAAP gross profit for Q2 2024 was $112.79 million, up from $101.74 million in Q2 2023, resulting in a gross margin of 51%[22] - Non-GAAP gross profit for the first half of 2024 was $208.49 million, compared to $188.97 million in the first half of 2023[22] - GAAP net loss for Q2 2024 was $30.81 million, an improvement from a net loss of $35.78 million in Q2 2023[22] - Non-GAAP net loss for the first half of 2024 was $72.51 million, compared to a loss of $59.79 million in the same period of 2023[22] - Adjusted EBITDA for Q2 2024 was $(1.90) million, a decrease from $5.27 million in Q2 2023[22] - The company reported a GAAP operating loss of $30.77 million for Q2 2024, compared to a loss of $38.81 million in Q2 2023[22] - Non-GAAP operating loss for the first half of 2024 was $71.43 million, compared to a loss of $66.76 million in the first half of 2023[22] Sales and Market Performance - Over 20,000 pumps shipped in the United States, a sequential increase of 33% compared to Q1 2024[3] - Sales in the United States for the three months ended June 30, 2024, reached $156,711,000, a 10% increase from $142,501,000 in the same period of 2023[20] - Sales outside the United States increased by 22% to $65,199,000 for the three months ended June 30, 2024, compared to $53,416,000 in the same period of 2023[20] Future Guidance - The company increased its worldwide sales expectations to 15% annual growth for 2024[9] - Non-GAAP sales guidance for 2024 is estimated to be approximately $885 million to $892 million[12] - Non-GAAP gross margin is estimated to be approximately 51% for the full year 2024[12] Research and Development - Research and development expenses for the three months ended June 30, 2024, were $49,326,000, up from $42,933,000 in the same period of 2023, reflecting ongoing investment in innovation[18] - The company continues to invest in research and development, with significant expenses related to acquired in-process research and development recorded in connection with acquisitions[23] Balance Sheet and Equity - Total current assets decreased to $733,388,000 as of June 30, 2024, from $747,989,000 as of December 31, 2023[17] - Total liabilities increased to $703,628,000 as of June 30, 2024, compared to $639,026,000 as of December 31, 2023[17] - Total stockholders' equity decreased to $233,875,000 as of June 30, 2024, from $313,632,000 as of December 31, 2023, indicating a decline in shareholder value[17] - Net loss for the six months ended June 30, 2024, was $(73,529,000), compared to $(159,648,000) for the same period in 2023, showing a significant reduction in losses[18] Deferred Revenue - The total Tandem Choice deferral was $31.0 million as of June 30, 2024[11]

Tandem Diabetes Care, Inc. (TNDM) is well-poised for growth in the coming quarters, backed by its impressive lineup of new products. The flourishing diabetes market provides a favorable opportunity for the company's growth. Strong solvency appears highly encouraging. However, concerns loom over Tandem Diabetes' substantial reliance on insulin pumps and the impact of macroeconomic challenges. In the past year, this Zacks Rank #3 (Hold) stock has surged 110.9% compared with the 6.1% growth of the industry and ...

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 ...