Executive Summary

Q2 2025 delivered record second-quarter sales of $240.7M (+8% YoY) and 52% GAAP gross margin; revenue slightly beat Wall Street, while EPS missed on S&P “Primary EPS” basis .
Guidance was reset: worldwide sales “~$1.0B” maintained, but mix shifted—U.S. lowered to ~$700M and OUS raised to ~$300M (reduced transition headwind), and adjusted EBITDA recast to ~-5% for 2025 following SEC view on IPR&D adjustments .
Commercial progress: pharmacy channel access at ~30% covered lives, early access for t:slim X2 with Abbott FreeStyle Libre 3 Plus, CE Mark for Mobi with Control‑IQ+, and SteadiSet 510(k) filed (extended wear) .
Call color: management expects moderate U.S. growth amid competitive entrance and ongoing commercial transformation, with OUS stronger than initially expected; Q3 cadence guided to ~$235M .
Catalysts: pharmacy supplies move in Q4 2025, full U.S. rollout of Libre 3 Plus integration in fall, type 2 pilot expansion, and path to 60% quarterly gross margin exiting 2026 .

What Went Well and What Went Wrong

What Went Well

Record Q2 sales in both U.S. and OUS; shipments ~21k U.S. and ~9k OUS; gross margin expanded to 52% (vs 51% YoY) .
OUS outlook improved: headwind from going direct reduced to ~$10M (from $15–$20M), driving higher confidence and guidance raises for OUS contribution .
Product milestones: early access for t:slim X2 + Libre 3 Plus in the U.S.; CE Mark for Mobi with Control‑IQ+; SteadiSet 510(k) filed for extended wear; feasibility study completed for fully closed loop .
Quote: “We achieved record second quarter sales… while strengthening our business model and improving operational efficiency.” – John Sheridan .

What Went Wrong

U.S. guidance reduced to ~$700M on slower-than-expected benefits from commercial transformation and increased competitive noise from a new market entrant .
Adjusted EBITDA recast from +3% to ~-5% for 2025 due to inclusion of Q1 IPR&D expense (negative 8pp impact) after alignment with SEC views; non-GAAP no longer excludes IPR&D beginning Q2 .
Litigation/settlement expense ($19.95M) weighed on Q2 operating loss and net loss; GAAP operating margin -22% and GAAP net loss per share -$0.78 .
Analyst concern: renewal mix >50% of shipments with new starts now guided flat/slightly down; pharmacy contribution still modest and builds over time .

Financial Results

Consolidated P&L Metrics

Metric	Q4 2024	Q1 2025	Q2 2025
Sales ($USD Millions)	$282.6	$234.4	$240.7
GAAP Gross Margin (%)	56%	51%	52%
GAAP Operating Margin (%)	0% (loss $0.6M)	(52)%	(22)%
Net Loss per Share ($)	$0.01	$(1.97)	$(0.78)
Adjusted EBITDA ($USD Millions)	$2.3	$(4.7)	$(1.9)

Sales by Geography and Type (Q2 YoY)

Category ($USD Thousands)	Q2 2024	Q2 2025	% Change
U.S. Pump	$81,745	$85,467	+5%
U.S. Supplies & Other	$74,812	$84,742	+13%
Total U.S. GAAP Sales	$156,711	$170,209	+9%
OUS Pump	$26,130	$26,404	+1%
OUS Supplies & Other	$39,069	$44,065	+13%
Total OUS Sales	$65,199	$70,469	+8%
Total Worldwide GAAP Sales	$221,910	$240,678	+8%

KPIs

KPI	Q2 2024	Q2 2025
U.S. Pump Shipments (units)	~ (not disclosed)	~21,000
OUS Pump Shipments (units)	~ (not disclosed)	~9,000
GAAP Gross Profit ($USD Millions)	$112.8	$125.9
Non-GAAP Operating Loss ($USD Millions)	$(30.9)	$(31.9)

Results vs S&P Global Consensus

Metric	Q4 2024	Q1 2025	Q2 2025
Revenue - Actual ($USD Millions)	282.648	234.422	240.678
Revenue - Consensus Mean ($USD Millions)*	251.390	220.216	238.388
Primary EPS - Actual ($)	-0.4356	-0.6652	-0.4839
Primary EPS - Consensus Mean ($)*	-0.2357	-0.6077	-0.3953

Values retrieved from S&P Global.*

Interpretation: Q2 revenue beat (~$2.3M above consensus), while EPS missed on S&P “Primary EPS” basis (actual ~-$0.484 vs consensus ~-$0.395), noting S&P “Primary EPS” can differ from GAAP net loss per share (which was -$0.78) .

Guidance Changes

Metric	Period	Previous Guidance (Q1 2025)	Current Guidance (Q2 2025)	Change
Worldwide Sales	FY 2025	$997M–$1.007B	~$1.0B	Maintained (range simplified)
U.S. Sales	FY 2025	~$725M–$730M	~$700M	Lowered
OUS Sales	FY 2025	~$272M–$277M (headwind $15–$20M)	~$300M (headwind ~$10M)	Raised; headwind reduced
GAAP Gross Margin	FY 2025	~54%	~53%–54%	Maintained low end; narrowed
Adjusted EBITDA Margin	FY 2025	~3%	~-5% (incl. -8pp IPR&D impact)	Lowered materially
Non-cash COGS & OpEx	FY 2025	~$115M (SBC ~$95M; D&A ~$20M)	~$115M (SBC ~$95M; D&A ~$20M)	Maintained

Additional cadence: Management guided Q3 revenue to ~$235M and expects a stronger seasonal Q4 .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q4 2024 and Q1 2025)	Current Period (Q2 2025)	Trend
Pharmacy channel	~20% covered lives; strategy to lower out-of-pocket; modest 2025 contribution	~30% covered lives; stocking benefit of “few million”; t:slim supplies to pharmacy starting Q4	Improving access; contribution building
Sensor integrations	Plan to launch Libre 3 with t:slim then Mobi; Dexcom G7 15-day support	Early access t:slim + Libre 3 Plus in U.S.; expand in fall; international thereafter	Execution progressing
Type 2 expansion	FDA clearance; pilot and PBM work; modest 2025 impact	Pilot territories outperform; expansion across more territories; Medicare coverage improvements pursued	Scaling; long-term driver
OUS strategy	Preparing to go direct in 2026; anticipated $15–$20M headwind	Headwind now ~$10M; early traction in renewals; CE Mark for Mobi	Better-than-feared
Margins	2025 GM ~54%; path to 60% quarterly by 2026; Mobi accretive	Q2 GM 52% and sequentially higher; reaffirm path to 53–54% FY; 60% quarterly exit 2026	On track
Regulatory/macro	Tariffs minimal impact	CMS proposals (pay‑as‑you‑go, competitive bidding) seen as potentially positive; <10% Medicare exposure	Neutral to supportive
R&D pipeline	Tubeless Mobi, Sigi patch pump, SteadiSet, UVA closed-loop collaboration	SteadiSet 510(k) filed; fully closed loop feasibility completed; tubeless Mobi planned 2026 U.S. launch	Advancing milestones
Quality/field	N/A	Field correction on t:slim speakers; no financial impact	Addressed

Management Commentary

“We increased U.S. pump shipments while strengthening our business model and improving operational efficiency... positioning us well for sustained double-digit growth and enhanced profitability.” – John Sheridan, CEO .
“We expect to reach $1 billion in worldwide 2025 sales… our narrowed guidance reflects insights... more moderate U.S. growth... and greater contributions from international sales.” – Leigh Vosseller, CFO .
“Pharmacy contracts… similar in reimbursement structure to our DME contracts… we currently have approximately 30% of U.S. lives under coverage.” – CFO .
“We plan to start selling t:slim supplies through the pharmacy channel beginning in Q4 2025.” – CEO .
“We plan to launch tubeless Mobi in the U.S. markets in 2026… [and] SteadySet extended wear in 2026.” – CEO .

Q&A Highlights

CMS proposals (pay‑as‑you‑go and competitive bidding) viewed as non‑material and potentially beneficial; traditional Medicare <10% of U.S. sales .
Pharmacy progress: stocking contributed a few million in Q2; pricing premia vs DME supports margin expansion; more contracts expected imminently .
Mix and demand: renewals >50% of U.S. shipments; new starts guided flat-to-down, with MDI conversions outpacing competitive conversions .
Margin bridge: Mobi pump cost per unit improved; path to 53–54% FY GM and quarterly ~60% exiting 2026; pharmacy supplies in Q4 also a tailwind .
OUS dynamics: slight destocking ahead of 2026 direct launch, but placements grew YoY; headwind reduced to ~$10M .

Estimates Context

Q2 2025: Revenue beat consensus by ~$2.29M (actual $240.678M vs $238.388M*); EPS missed on S&P Primary EPS (-$0.484 vs -$0.395*), while GAAP diluted EPS was -$0.78 reported .
Recent trends: Q1 2025 beat revenue (actual $234.422M vs $220.216M*), but missed Primary EPS; Q4 2024 beat revenue and missed Primary EPS*.
Forward look (S&P Global): Q3 2025 revenue ~$235.77M*, Primary EPS ~-$0.340*, EBITDA ~$5.55M*; Q4 2025 revenue ~$276.91M*, Primary EPS ~-$0.069* (indicative of seasonal ramp).
Values retrieved from S&P Global.*

Implications: Street likely adjusts U.S. revenue and EBITDA trajectories downward (reflecting lowered U.S. guide and EBITDA recast), while increasing OUS expectations and maintaining GM trajectory as pharmacy and Mobi efficiencies scale .

Key Takeaways for Investors

Revenue resilience with mixed bottom line: modest top-line beat, but EPS miss on S&P Primary basis; GAAP EPS more negative due to litigation expense and non-cash items—watch EBITDA trajectory under new non-GAAP treatment .
Guidance mix shift is critical: U.S. lowered and OUS raised with reduced transition headwind—a relative OUS tailwind for 2H’25 .
Pharmacy channel is the 2H catalyst (Q4 supplies move) with pricing benefits and coverage expansion likely to drive margin/ASP improvements over time .
Sensor integration momentum: full U.S. rollout of Libre 3 Plus on t:slim in fall and subsequent OUS launches support competitive positioning and potential share gains .
Type 2 indication: pilot expansion in Q3 with Medicare advocacy; near-term modest, but medium-term TAM expansion could be meaningful as barriers fall .
Margin path intact: GM 53–54% FY and quarterly ~60% by exit-2026; Mobi accretive, pharmacy and OUS direct operations support longer-term EBIT/FCF leverage .
Near-term trading setup: expect focus on Q3 ~$235M cadence and pharmacy updates; stock likely sensitive to signs of U.S. new-start stabilization vs competitor noise and execution on pharmacy contracts .

Appendix: Other Relevant Q2 2025 Press Releases

Agreement to integrate Abbott’s future dual glucose‑ketone sensor with Tandem AID systems (development-stage) .
t:slim X2 with Control‑IQ+ now compatible with Abbott’s FreeStyle Libre 3 Plus; early access in U.S., broader availability in 2H’25 .

Sources

Q2 2025 8‑K press release and exhibits: .
Q2 2025 press release (Business Wire): .
Q2 2025 earnings call transcript: .
Q1 2025 press release and call: .
Q4 2024 press release and call: .
Additional Q2 press releases: .

S&P Global consensus and actuals used in “Estimates Context” and “Results vs Estimates” tables.*

TANDEM DIABETES CARE INC (TNDM)·Q2 2025 Earnings Summary