Tandem Diabetes Care(TNDM) - 2024 Q3 - Quarterly Results

Third Quarter 2024 Financial Report Third Quarter 2024 Highlights Tandem Diabetes Care reported record Q3 2024 sales, achieving 31% growth, positive Adjusted EBITDA, and expanding Control-IQ indication | Metric | Q3 2024 | Change vs Q3 2023 | | :--- | :--- | :--- | | Worldwide GAAP Sales | $244.0 million | +31% | | Worldwide Non-GAAP Sales | $242.9 million | +25% | - Worldwide pump shipments grew by more than 25% compared to the third quarter of 2023[3] - The company achieved year-over-year growth in new pump starts in the United States, including from patients previously on multiple daily injections[3] - Demonstrated positive Adjusted EBITDA and a return to positive free cash flow[3] - Completed a clinical study to support a regulatory filing for expanding the Control-IQ indication to people with type 2 diabetes[3] Third Quarter 2024 Financial Results Tandem's Q3 2024 financial results show strong sales growth, improved gross margin, and narrowed GAAP operating and net losses Q3 2024 vs Q3 2023 Sales Performance ($ in millions) | Region | Q3 2024 GAAP Sales | Q3 2023 GAAP Sales | Q3 2024 Non-GAAP Sales | Q3 2023 Non-GAAP Sales | | :--- | :--- | :--- | :--- | :--- | | United States | $171.7 | $130.2 | $170.6 | $138.5 | | Outside U.S. | $72.3 | $55.4 | $72.3 | $55.4 | | Total Worldwide | $244.0 | $185.6 | $242.9 | $193.9 | - Total pump shipments for Q3 2024 were approximately 32,000 units, with ~21,000 in the U.S. and nearly 11,000 outside the U.S. (Note: U.S. shipments do not include pumps fulfilled under Tandem Choice)[7] Q3 2024 vs Q3 2023 Profitability Metrics ($ in millions) | Metric | Q3 2024 GAAP | Q3 2023 GAAP | Q3 2024 Non-GAAP | Q3 2023 Non-GAAP | | :--- | :--- | :--- | :--- | :--- | | Gross Profit | $124.7 | $89.8 | $124.3 | $98.0 | | Gross Margin | 51% | 48% | 51% | 51% | | Operating Loss | $(26.1) | $(31.5) | $(26.5) | $(23.3) | | Net Loss | $(23.3) | $(33.0) | $(23.6) | $(24.7) | | Adjusted EBITDA | $4.0 | $1.5 | - | - | 2024 Financial Guidance Tandem increased its full-year 2024 non-GAAP sales guidance to $903-$910 million, while reaffirming gross margin and Adjusted EBITDA targets Updated Full-Year 2024 Non-GAAP Guidance | Metric | Guidance | | :--- | :--- | | Non-GAAP Sales | $903 million to $910 million | | - U.S. Sales | $645 million to $650 million | | - OUS Sales | $258 million to $260 million | | Non-GAAP Gross Margin | Approx. 51% | | Adjusted EBITDA Margin | Breakeven as % of sales | - Projected non-cash charges for 2024 are estimated at approximately $120 million, consisting of $100 million in stock-based compensation and $20 million in depreciation and amortization[12] Explanation of Non-GAAP Financial Measures Non-GAAP measures are presented to clarify core operating performance by excluding the accounting complexities of the Tandem Choice Program - Non-GAAP measures are used to exclude items unrelated to core operating results, primarily the accounting for the Tandem Choice program[13] - The Tandem Choice program allowed eligible t:slim X2 customers to upgrade to a Tandem Mobi pump for a fee. The program's complexity led to sales deferrals[15] - The balance of the Tandem Choice deferral was $30.1 million as of September 30, 2024, with any remaining deferrals expected to be recognized in Q4 2024 upon the program's expiration on December 31, 2024[16] Consolidated Financial Statements Consolidated financial statements detail Tandem's financial position, strong revenue growth, narrowing net loss, and GAAP to non-GAAP adjustments Condensed Consolidated Balance Sheets (Table A) Tandem's balance sheet as of September 30, 2024, shows stable assets at $957.7 million and increased total liabilities to $720.0 million Balance Sheet Highlights (in thousands) | Account | Sep 30, 2024 (Unaudited) | Dec 31, 2023 | | :--- | :--- | :--- | | Cash, cash equivalents and short-term investments | $473,305 | $467,912 | | Total current assets | $752,826 | $747,989 | | Total assets | $957,730 | $952,658 | | Total current liabilities | $259,276 | $195,258 | | Total liabilities | $720,020 | $639,026 | | Total stockholders' equity | $237,710 | $313,632 | Condensed Consolidated Statements of Operations (Table B) Q3 2024 GAAP net loss significantly narrowed to $23.3 million, or ($0.35) per share, reflecting improved operational performance Statement of Operations Summary (in thousands, except per share data) | Metric | Three Months Ended Sep 30, 2024 | Three Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2024 | Nine Months Ended Sep 30, 2023 | | :--- | :--- | :--- | :--- | :--- | | Sales | $243,971 | $185,622 | $657,555 | $550,922 | | Gross Profit | $124,653 | $89,753 | $332,119 | $274,395 | | Operating Loss | $(26,093) | $(31,545) | $(98,545) | $(198,170) | | Net Loss | $(23,251) | $(32,961) | $(96,780) | $(192,609) | | Net Loss Per Share | $(0.35) | $(0.51) | $(1.48) | $(2.97) | Sales by Geography (Table C) Q3 2024 total GAAP sales grew 31% year-over-year, with strong pump and supplies growth in both U.S. and international markets Q3 2024 vs Q3 2023 GAAP Sales Growth by Geography & Product ($ thousands) | Category | Q3 2024 Sales | % Change YoY | | :--- | :--- | :--- | | United States | $171,650 | +32% | | - Pump | $86,722 | +31% | | - Supplies & Other | $83,889 | +16% | | Outside the U.S. | $72,321 | +31% | | - Pump | $28,077 | +30% | | - Supplies & Other | $44,244 | +31% | | Total Worldwide | $243,971 | +31% | Reconciliation of GAAP versus Non-GAAP Financial Results (Table D) This section reconciles GAAP to non-GAAP results, highlighting adjustments for the Tandem Choice program and positive Adjusted EBITDA Q3 2024 GAAP to Non-GAAP Reconciliation ($ in thousands) | Metric | GAAP | Adjustment for Tandem Choice | Non-GAAP | | :--- | :--- | :--- | :--- | | Sales | $243,971 | $(1,039) | $242,932 | | Gross Profit | $124,653 | $(374) | $124,279 | | Operating Loss | $(26,093) | $(374) | $(26,467) | | Net Loss | $(23,251) | $(374) | $(23,625) | Adjusted EBITDA Calculation - Q3 2024 vs Q3 2023 ($ in thousands) | Metric | Q3 2024 | Q3 2023 | | :--- | :--- | :--- | | GAAP Net Loss | $(23,251) | $(32,961) | | (+) Adjustments* | $27,276 | $34,416 | | Adjusted EBITDA | $4,025 | $1,455 |