Tandem Diabetes Care(TNDM) - 2025 Q2 - Quarterly Results

Second Quarter 2025 Performance Overview Tandem Diabetes Care achieved record Q2 2025 sales and improved gross margin, driven by product innovation and strong market performance, despite increased GAAP operating and net losses due to litigation settlement expenses Key Operational Achievements Tandem Diabetes Care achieved record Q2 2025 sales in US and international markets, improved gross margin, and made significant progress in product development and regulatory approvals - Achieved record second-quarter sales in both US and international markets[4] - Gross margin improved both year-over-year and quarter-over-quarter[4] - Launched an early access program in the US for the t:slim X2™ insulin pump integrated with the Abbott FreeStyle Libre® 3 Plus CGM sensor[4] - Tandem Mobi insulin delivery system received CE Mark approval[4] - Submitted a 510(k) application for extended wear of the SteadiSet infusion set[4] Financial Results (Q2 2025 vs Q2 2024) Q2 2025 saw global sales grow 8% to $240.7 million, with GAAP gross profit increasing to $125.9 million and gross margin to 52%, while GAAP operating and net losses widened due to litigation settlement expenses Q2 2025 Key Financial Data Comparison (GAAP) | Metric | Q2 2025 (million USD) | Q2 2024 (million USD) | YOY Change (%) | | :--------------------- | :----------------------- | :----------------------- | :------------- | | Global Sales | 240.7 | 221.9 | 8% | | US Sales | 170.2 | 156.7 | 9% | | US Pump Shipments | ~21,000 units | - | Growth | | International Sales | 70.5 | 65.2 | 8% | | International Pump Shipments | ~9,000 units | - | - | | GAAP Gross Profit | 125.9 | 112.8 | 11.6% | | GAAP Gross Margin | 52% | 51% | 1% | | GAAP Operating Loss | (51.8) | (30.8) | 68.2% | | GAAP Net Loss | (52.4) | (30.8) | 70.1% | | GAAP Net Loss Per Share | (0.78) | (0.47) | 66% | Q2 2025 Non-GAAP Financial Data Comparison | Metric | Q2 2025 (million USD) | Q2 2024 (million USD) | YOY Change (%) | | :--------------------- | :----------------------- | :----------------------- | :------------- | | Non-GAAP Operating Loss | (31.9) | (30.9) | 3.2% | | Non-GAAP Operating Loss as % of Sales | -13% | -14% | 1% | | Non-GAAP Net Loss | (32.4) | (30.9) | 4.9% | | Adjusted EBITDA | (1.8) | (1.9) | -5.3% | | Adjusted EBITDA as % of Sales | -1% | -1% | 0% | 2025 Annual Financial Guidance Tandem Diabetes Care projects $1 billion in global sales for 2025, with a gross margin of 53% to 54%, and an adjusted EBITDA margin revised to negative 5% due to Q1 IPR&D expenses and a policy change regarding non-GAAP adjustments 2025 Full-Year Financial Guidance | Metric | 2025 Full-Year Guidance | | :--------------------- | :------------- | | Global Sales | Approximately $1 billion | | US Sales | Approximately $700 million | | International Sales | Approximately $300 million | | Gross Margin | Approximately 53% to 54% | | Adjusted EBITDA Margin | Approximately negative 5% | | Non-Cash Expenses (Total) | Approximately $115 million | | - Stock-based Compensation | Approximately $95 million | | - Depreciation and Amortization | Approximately $20 million | - Adjusted EBITDA margin guidance revised from approximately 3% to approximately negative 5%, reflecting an 8 percentage point impact from acquired in-process research and development (IPR&D) expenses in Q1[9] - Effective Q2 2025, the company no longer adjusts for IPR&D expenses in non-GAAP results, aligning with SEC comments[9] Non-GAAP Financial Measures and Program Updates This section clarifies the company's non-GAAP financial measures, details the policy change regarding IPR&D expense adjustments, and confirms the conclusion of the Tandem Choice program Non-GAAP Financial Measures Explanation The company provides non-GAAP financial measures to aid investor understanding of financial performance and future prospects by excluding items unrelated to core operations - Non-GAAP financial measures are provided to help investors understand the company's financial results and assess future performance by excluding items unrelated to core operating results[10] - Non-GAAP financial measures may not be directly comparable to similar metrics used by other companies and should not be considered a substitute for GAAP measures[10] IPR&D Expense Adjustment Policy Change Tandem Diabetes Care adjusted for IPR&D expenses in Q1 2025 non-GAAP results but ceased this practice from Q2 onwards, revising 2025 guidance to align with SEC comments - In Q1 2025, the company included IPR&D expenses in non-GAAP financial adjustments[11] - Effective Q2 2025, the company no longer includes IPR&D expenses in non-GAAP results, aligning with SEC comments[11][27] - 2025 performance and guidance have been revised to reflect this change[11] Tandem Choice Program Conclusion The Tandem Choice program concluded in 2024, thus having no impact on 2025 sales or margins, having been implemented from September 2022 to December 2024 with complex accounting - The Tandem Choice program concluded in 2024, with no impact on 2025 sales or margins[6][12][23] - The program was implemented from September 2022 to December 2024, involving complex accounting for sales deferrals and revenue recognition[12] Company Information and Disclosures This section provides an overview of Tandem Diabetes Care's mission and products, along with important disclaimers regarding forward-looking statements and associated risks About Tandem Diabetes Care, Inc. Tandem Diabetes Care is a global insulin delivery and diabetes technology company manufacturing and selling advanced automated insulin delivery systems to ease diabetes management - Tandem Diabetes Care is a global insulin delivery and diabetes technology company[14] - The company manufactures and sells advanced automated insulin delivery systems designed to ease the burden of diabetes management[14] - Key products include the Tandem Mobi system and t:slim X2 insulin pump, both featuring Control-IQ+ advanced hybrid closed-loop technology[14] Forward-Looking Statements This press release contains forward-looking statements subject to risks and uncertainties that could cause actual results to differ materially from expectations, with no obligation for the company to update them - This press release contains forward-looking statements involving risks and uncertainties that could cause actual results to differ materially from expectations[16] - Risk factors include market acceptance, competition, international sales expansion, reimbursement policy changes, operational capabilities, product commercialization and development, regulatory approvals, and global economic conditions[16] - The company undertakes no obligation to update or revise any forward-looking statements[16] Condensed Consolidated Financial Statements This section presents the company's condensed consolidated balance sheets, statements of operations, sales by geography, and reconciliation of GAAP versus non-GAAP financial results Condensed Consolidated Balance Sheets As of June 30, 2025, total assets were $875.7 million, a decrease from $967.7 million at December 31, 2024, with total liabilities increasing to $742.5 million and stockholders' equity decreasing to $133.3 million Condensed Consolidated Balance Sheets (Excerpt) | Metric (thousand USD) | June 30, 2025 | December 31, 2024 | | :-------------------------------- | :------------- | :------------- | | Assets | | | | Cash, Cash Equivalents and Short-Term Investments | 315,361 | 438,329 | | Accounts Receivable, Net | 128,443 | 114,585 | | Inventory | 142,573 | 149,612 | | Total Current Assets | 614,817 | 724,491 | | Total Assets | 875,736 | 967,658 | | Liabilities and Stockholders' Equity | | | | Accounts Payable, Accrued Expenses and Employee-Related Liabilities | 121,293 | 127,028 | | Total Current Liabilities | 251,690 | 247,049 | | Convertible Senior Notes, Net - Long-Term | 309,146 | 308,266 | | Total Liabilities | 742,453 | 704,560 | | Total Stockholders' Equity | 133,283 | 263,098 | | Total Liabilities and Stockholders' Equity | 875,736 | 967,658 | Condensed Consolidated Statements of Operations In Q2 2025, sales reached $240.7 million with a gross profit of $125.9 million, but operating and net losses widened to $51.8 million and $52.4 million respectively, primarily due to increased operating expenses including litigation settlement Condensed Consolidated Statements of Operations (Excerpt) | Metric (thousand USD) | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :-------------------------------- | :------------- | :------------- | :----------- | :----------- | | Sales | 240,678 | 221,910 | 475,100 | 413,584 | | Cost of Sales | 114,823 | 109,116 | 230,838 | 206,118 | | Gross Profit | 125,855 | 112,794 | 244,262 | 207,466 | | Selling, General and Administrative Expenses | 109,596 | 94,242 | 223,449 | 184,348 | | Litigation Settlement Expense | 19,951 | — | 19,951 | — | | Research and Development Expenses | 48,118 | 49,326 | 98,333 | 95,570 | | Acquired In-Process Research and Development Expenses | — | — | 75,217 | — | | Total Operating Expenses | 177,665 | 143,568 | 416,950 | 279,918 | | Operating Loss | (51,810) | (30,774) | (172,688) | (72,452) | | Net Loss | (52,400) | (30,814) | (182,956) | (73,529) | | Net Loss Per Share - Basic and Diluted | (0.78) | (0.47) | (2.74) | (1.13) | Sales by Geography Q2 2025 US sales grew 9% to $170.2 million, with international sales up 8% to $70.5 million, driven by growth in both pump and consumables categories across regions Sales by Geography (thousand USD) | Region/Product | Q2 2025 | Q2 2024 | % Change | YTD 2025 | YTD 2024 | % Change | | :-------------------- | :------------- | :------------- | :----- | :----------- | :----------- | :----- | | US: | | | | | | | | Pumps | 85,467 | 81,745 | 5% | 157,608 | 143,465 | 10% | | Consumables and Other | 84,742 | 74,812 | 13% | 163,233 | 143,999 | 13% | | Total US GAAP Sales | 170,209 | 156,711 | 9% | 320,841 | 286,472 | 12% | | International: | | | | | | | | Pumps | 26,404 | 26,130 | 1% | 56,354 | 51,697 | 9% | | Consumables and Other | 44,065 | 39,069 | 13% | 97,905 | 75,415 | 30% | | Total International Sales | 70,469 | 65,199 | 8% | 154,259 | 127,112 | 21% | | Total Global GAAP Sales | 240,678 | 221,910 | 8% | 475,100 | 413,584 | 15% | Reconciliation of GAAP versus Non-GAAP Financial Results The company provides a reconciliation of GAAP to non-GAAP financial measures, illustrating the impact of adjustments like litigation settlement, facility impairment, restructuring, and Tandem Choice on key financial metrics, noting IPR&D is no longer a non-GAAP adjustment from Q2 2025 Reconciliation of GAAP versus Non-GAAP Financial Results (Excerpt) | Metric (thousand USD) | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :-------------------------------- | :------------- | :------------- | :----------- | :----------- | | GAAP Sales | 240,678 | 221,910 | 475,100 | 413,584 | | Non-GAAP Sales | 240,678 | 221,756 | 475,100 | 414,576 | | GAAP Gross Profit | 125,855 | 112,794 | 244,262 | 207,466 | | Non-GAAP Gross Profit | 125,855 | 112,667 | 244,262 | 208,485 | | GAAP Operating Loss | (51,810) | (30,774) | (172,688) | (72,452) | | Litigation Settlement Expense Adjustment | 19,951 | — | 19,951 | — | | Non-Recurring Facility Impairment Cost Adjustment | — | — | 6,697 | — | | Restructuring Cost Adjustment | — | — | 4,470 | — | | Non-GAAP Operating Loss | (31,859) | (30,901) | (141,570) | (71,433) | | GAAP Net Loss | (52,400) | (30,814) | (182,956) | (73,529) | | Non-GAAP Net Loss | (32,449) | (30,941) | (151,838) | (72,510) | | Adjusted EBITDA | (1,851) | (1,896) | (81,762) | (16,346) | - Effective Q2 2025, the company no longer adjusts for IPR&D expenses in non-GAAP results, aligning with SEC comments[27]