Tandem Diabetes Care(TNDM) - 2022 Q4 - Earnings Call Transcript

Financial Data and Key Metrics Changes - In 2022, the company achieved sales exceeding $800 million, more than doubling sales in three years [19] - Fourth quarter sales were $221 million on a GAAP basis and $223 million on a non-GAAP basis, with 36,000 pump shipments worldwide [19][20] - The gross margin for 2022 was 52%, down from 54% in 2021, attributed to higher raw material costs [25][26] Business Line Data and Key Metrics Changes - Pumps accounted for 54% of total sales, with a 60% increase in renewal shipments for the year [19][21] - In the U.S., 2022 sales were $589 million on a GAAP basis, with a 20% increase in the installed base to 290,000 customers [20][21] - International sales reached $212 million, growing 19% year-over-year, driven by a 35% increase in supply sales [21][22] Market Data and Key Metrics Changes - The U.S. insulin pump market remains over 35% penetrated, while international markets are typically only 10% to 20% penetrated [9] - Approximately 20% growth in people adopting t:slim technology across more than 25 countries, with Q4 being the strongest quarter [8][9] Company Strategy and Development Direction - The company aims to expand the insulin pump market and enhance awareness of its Control-IQ technology while preparing for multiple new product launches [10][23] - Recent acquisitions of Capillary Biomedical and AMF Medical align with the strategic vision to increase insulin pump adoption worldwide [6][9] - The company is focused on creating a portfolio of technology solutions that cater to diverse needs and preferences of diabetes patients [17] Management's Comments on Operating Environment and Future Outlook - Management noted that the operating environment remains consistent, with no significant changes in competition or market conditions anticipated [37] - The company expects 2023 worldwide sales guidance of $885 million to $900 million, reflecting a growth rate of 10% to 12% [23][30] - Adjusted EBITDA margins are expected to be negative in the first half of 2023 but return to positive in the second half [28][30] Other Important Information - The company completed the transfer of its t:slim cartridge lines to a third-party manufacturer to scale production for the new Tandem Mobi pump [11] - The launch of the t:slim X2 with G7 integration is planned for later in Q2, aiming to be the first to market with this integration in an AID system [14] Q&A Session Summary Question: Can you walk us through the margin direction and the factors affecting the EBITDA number? - Management indicated that gross margin improvements are expected from pricing and cost efficiencies, with new product launches providing future benefits [33][34] Question: What impacts are being seen from the softening economy and competition? - Management noted that the environment has remained consistent, with no significant changes in competition observed [36][37] Question: What is the expectation for new patient starts in the U.S.? - Management acknowledged that new patient starts are expected to be pressured, but renewals will continue to drive growth [39][40] Question: How is the company preparing for the Mobi launch? - Management is responding to FDA questions and plans for a scaled launch in the second half of the year, with preparations underway [66][67] Question: What is the outlook for international markets? - Management highlighted a significant opportunity in international markets, with a focus on expanding penetration and attracting competitive conversions [44]