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TD

TANDEM DIABETES CARE INC (TNDM)·Q1 2025 Earnings Summary

Executive Summary

  • Strong Q1: Revenue $234.4M (+22% YoY), a record first quarter, with gross margin 51% and material progress in adjusted EBITDA (-2% vs -7% YoY). OUS was a quarterly record at $83.8M (+35% YoY) aided by ~$5M timing pull-in from Q2 .
  • Beat vs consensus: Revenue beat by ~$14.2M (~6.5% above $220.2M consensus*) while S&P “Primary EPS” modestly missed (actual -$0.665 vs -$0.608 consensus*). GAAP EPS was -$1.97, impacted by $75.2M IPR&D, $6.7M impairment, and $4.5M restructuring .
  • Guidance: Full-year 2025 guidance reaffirmed (Sales $997M–$1.007B; GM ~54%; adj. EBITDA ~3%); Q2 sales guided to ~$238M; management expects H2 and full-year positive free cash flow and highlighted a path to ~60% GM as early as 2026 .
  • Strategic drivers: Early traction from pharmacy channel (U.S. lives covered ~30% vs ~20% in Q4) and Control-IQ+ launch (type 2 clearance), with continued mix benefit from Mobi and sustained U.S. renewal momentum (~50:50 new/renewals; ~2/3 new starts from MDI) .

What Went Well and What Went Wrong

  • What Went Well

    • Broad-based growth: Record Q1 sales; U.S. $150.6M (+16% YoY) and OUS $83.8M (+35% YoY) with >17k U.S. and >11k OUS pump shipments; adjusted EBITDA margin improved 5 pts YoY .
    • Pricing and channel strategy: Improved ASPs (DME-led) and pharmacy contracts providing lower patient OOP and better pricing; U.S. lives covered rose to ~30% from ~20% last quarter .
    • Algorithm and pipeline: Control-IQ+ launched; type 2 clearance expands TAM; management emphasized “our best algorithm yet… easy to start, use, and personalize” and NEJM featured benefits; preliminary data show synergy with GLP-1s .

  • What Went Wrong

    • GAAP profitability: Large GAAP operating loss (-$120.9M) and GAAP EPS (-$1.97) driven by $75.2M IPR&D, $6.7M lease impairment, and $4.5M restructuring .
    • EBITDA vs S&P metric: S&P “EBITDA” actual was more negative than consensus*, reflecting definitional differences vs company’s adjusted EBITDA (-$4.7M) and underscoring the need to anchor on definitions .
    • OUS timing: ~$5M of OUS orders pulled into Q1 from Q2, boosting Q1 but flattening expected OUS cadence for the remainder of the year .

Financial Results

Q1 results vs prior year, prior quarter, and consensus

MetricQ1 2024Q4 2024Q1 2025Q1 2025 Consensus*Beat/(Miss) vs Cons.*
Revenue ($M)$191.7 $282.6 $234.4 $220.2*+$14.2 / +6.5%*
GAAP Gross Margin %49% 56% 51% ——
GAAP Operating Margin %(22)% 0% (52)% ——
Adjusted EBITDA Margin %(7)% 1% (2)% ——
GAAP Diluted EPS$(0.65) $0.01 $(1.97) ——
Primary EPS (S&P)*——$(0.665)*$(0.608)*$(0.06)*

Notes: Beat/(Miss) vs Cons. computed from S&P Global consensus where applicable.
Estimates marked with * retrieved from S&P Global.

Segment and product/geography mix

Sales ($’000)Q1 2024Q1 2025YoY %
U.S. Pump$61,720 $72,141 17%
U.S. Supplies & Other$69,187 $78,491 13%
Total U.S. GAAP Sales$129,761 $150,632 16%
OUS Pump$25,567 $29,950 17%
OUS Supplies & Other$36,346 $53,840 48%
Total OUS Sales$61,913 $83,790 35%
Total Worldwide (GAAP)$191,674 $234,422 22%

KPIs and other metrics

KPIQ1 2024Q1 2025
U.S. pump shipments—>17,000 pumps
OUS pump shipments—>11,000 pumps
Pharmacy channel U.S. lives covered—~30%
Cash, cash equivalents & ST investments—$368.6M (3/31/25)
Non-GAAP operating loss$(40.5)M $(34.5)M
Adjusted EBITDA$(14.4)M $(4.7)M

Non-GAAP adjustments in Q1 2025: $75.2M IPR&D (AMF Medical), $6.7M facility impairment (U.S./Switzerland), $4.5M restructuring; no Tandem Choice impact in 2025 .

Guidance Changes

MetricPeriodPrevious Guidance (2/26/25)Current Guidance (4/30/25)Change
Sales (GAAP)FY 2025$997M–$1.007B $997M–$1.007B Maintained
U.S. SalesFY 2025~$725M–$730M ~$725M–$730M Maintained
OUS SalesFY 2025~$272M–$277M (incl. $15–$20M headwind) ~$272M–$277M (incl. $15–$20M headwind) Maintained
Gross MarginFY 2025~54% ~54% Maintained
Adjusted EBITDA MarginFY 2025~3% ~3% Maintained
Sales (GAAP)Q2 2025—~ $238M New point est.
Non-cash chargesFY 2025~$115M (SBC ~$95M; D&A ~$20M) ~$115M (SBC ~$95M; D&A ~$20M) Maintained

Management also reiterated minimal tariff impact in 2025 .

Earnings Call Themes & Trends

TopicQ3 2024 (Q-2)Q4 2024 (Q-1)Q1 2025 (Current)Trend
Technology/AI/AlgorithmsCompleted study to expand Control-IQ indication; positive Adj. EBITDA, return to FCF FDA cleared Control-IQ+ incl. type 2 Control-IQ+ launched; NEJM publication; “best algorithm yet” Accelerating feature set and clinical validation
Supply chain/tariffs——Tariff impact minimal due to exemptions/structure Stable, limited headwind
Product performanceRecord company sales; >25% pump shipments growth YoY Record Q4 sales; pump shipments up >25% Record Q1 sales; U.S. + OUS strength; Mobi accretive trajectory Sustained multi-quarter momentum
Regional trends (OUS)OUS growth strong OUS $68.1M; +48% YoY OUS $83.8M; +35% YoY; ~$5M pulled forward Elevated, timing pulled into Q1
Regulatory/legal—Control-IQ+ type 2 clearance Type 2 clearance commercialized; pharmacy contracting expanding Execution post-clearance
R&D execution—UVA collaboration on fully closed loop Sigi agreement amended; development moved to San Diego; fully closed-loop feasibility done Control and pace improving
Market access (Pharmacy)—~20% lives covered ~30% lives covered; DME-like structures; pricing uplift Coverage and pricing progressing

Management Commentary

  • “We delivered more than 20% growth for the third quarter in a row… with our highest quarter ever internationally.”
  • “Our best algorithm yet, Control-IQ+, is easy to start, easy to use, and easy to personalize.”
  • “We now have approximately 30% of U.S. lives covered under the pharmacy benefit… enabling significantly reduced out-of-pocket costs.”
  • “We believe we see a pathway to get to a 60% gross margin as early as next year [2026]” driven by Mobi accretion, pharmacy pricing, and OUS direct model .
  • “We anticipate returning to positive free cash flow, both for the second half of 2025 and on a full-year basis.”

Q&A Highlights

  • Salesforce expansion: Realignment completed; productivity expected to scale over 9–12 months with full benefit by Q4 .
  • Pricing: U.S. ASP uplift largely DME-led; supplies pricing also improved; early pharmacy volumes showed meaningful price contribution .
  • Pharmacy structure: Contracts DME-like (not subscription); durable pumps accepted in pharmacy; variety of reimbursement structures possible .
  • Guidance posture: Reaffirmed despite Q1 beat, citing dynamic macro; tariffs remain minimal .
  • Margin trajectory: Path to ~60% GM in 2026 combining Mobi accretion (pump, then cartridges), pharmacy pricing, and going direct OUS .
  • Type 2 opportunity: Early commercial steps; ~300k individuals given access to Control-IQ+ already; modest 2025 contribution expected as access, training, and reimbursement scale .

Estimates Context

  • Q1 2025: Revenue $234.4M vs S&P consensus $220.2M* (beat by ~$14.2M / ~6.5%); S&P Primary EPS -$0.665 vs -$0.608* (miss ~$0.06). Company’s GAAP EPS was -$1.97 due to IPR&D/impairment/restructuring .
  • Q2 2025: Management guided to ~$238M revenue; S&P consensus at time showed $238.4M*, broadly aligned .
    Estimates marked with * retrieved from S&P Global.

Key Takeaways for Investors

  • Topline outperformance was broad-based (U.S. and OUS) with pricing tailwinds and strong supplies utilization; expect steadier OUS cadence post ~$5M pull-forward .
  • The strategy to expand pharmacy access is tracking ahead (20%→30% lives in Q1), with DME-like economics and a pricing premium opportunity—key for mix, affordability, and penetration .
  • Mobi accretion, pharmacy pricing, and OUS direct model underpin margin expansion to ~54% in 2025 and a credible path to ~60% in 2026; monitor execution and timing .
  • Type 2 clearance for Control-IQ+ expands TAM; early-stage commercialization and payer workstreams imply a H2-weighted build, not immediate step function .
  • GAAP losses reflect discrete non-cash items (IPR&D, impairment, restructuring); non-GAAP operating loss and adjusted EBITDA trends show improving core profitability .
  • Liquidity remains solid ($368.6M cash/investments), with management targeting positive FCF in H2 and full-year 2025 while repaying near-term converts .
  • Catalysts: Q2 delivery vs ~$238M guide, pharmacy coverage ramp, Libre 3 and G7 (15-day) integrations, Mobi OUS progress, and any updates toward fully closed-loop or Sigi milestones .

Citations: Press release and 8‑K: . Earnings call: . Prior quarters: . Control-IQ+ context: .
Estimates marked with * retrieved from S&P Global.