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TD

TANDEM DIABETES CARE INC (TNDM)·Q4 2024 Earnings Summary

Executive Summary

  • Record Q4: GAAP revenue $282.6M (+44% YoY), non-GAAP revenue $252.4M (+21% YoY); GAAP gross margin 56% (+900 bps YoY); GAAP EPS $0.01 (vs. $(0.46) prior-year) .
  • 2025 guide introduced: Sales $997M–$1.007B (US $725–$730M; OUS $272–$277M with $15–$20M transition headwind), GM ~54% (FY), Adj. EBITDA margin ~3% (FY); Q1: sales $219–$224M, GM ~51%, Adj. EBITDA margin ~-6% .
  • Strategic catalysts: FDA clearance of Control-IQ+ for adults with Type 2 (more than doubles US TAM), pharmacy channel now ~20% covered lives, and planned transition to direct sales in select EU countries in 2026 .
  • Offsets and watch items: muted U.S. December seasonality and year-end shipping delays; near-term disruption risks from U.S. salesforce realignment and OUS channel transition are contemplated in 2025 guidance .

What Went Well and What Went Wrong

  • What Went Well

    • Record Q4 revenue and margin: GAAP sales $282.6M (+44% YoY), GAAP gross margin 56% (+900 bps YoY), GAAP EPS $0.01 .
    • Product/label momentum: Control-IQ+ FDA-cleared for Type 2; “more than doubles our addressable market in the United States” (CEO) .
    • Access and channels: ~20% of U.S. lives under pharmacy agreements; “driving scale and efficiency in the Pharmacy remains a top priority” (EVP, CCO) .

  • What Went Wrong

    • U.S. seasonality softness and logistics: “more muted seasonality in the last few weeks of the year” and “shipping delays by carriers… impacted the timing of revenue reporting” .
    • Near-term disruption contemplated: U.S. salesforce expansion/realignment and OUS transition to direct expected to create temporary headwinds, reflected in 2025 outlook .
    • Profitability still early: Q4 Adjusted EBITDA $2.3M (1% margin) and non-GAAP operating loss $(30.2)M; multiyear margin ramp hinges on Mobi pump/cartridge scale (pump accretive in 2025; cartridge in 2026) .

Financial Results

Headline P&L metrics (GAAP unless noted)

MetricQ2 2024Q3 2024Q4 2024
Revenue ($M, GAAP)$221.9 $244.0 $282.6
Revenue ($M, Non-GAAP)$221.8 $242.9 $252.4
Gross Margin % (GAAP)51% 51% 56%
Gross Margin % (Non-GAAP)51% 51% 51%
Operating Income (Loss) ($M, GAAP)$(30.8) $(26.1) $(0.6)
Adjusted EBITDA ($M)$(1.9) $4.0 $2.3
Adjusted EBITDA Margin %-1% 2% 1%
GAAP EPS (diluted)$(0.47) $(0.35) $0.01

Revenue YoY growth

MetricQ2 2024Q3 2024Q4 2024
GAAP Revenue YoY %+13% +31% +44%

Revenue breakdown by geography (GAAP)

Sales ($M)Q2 2024Q3 2024Q4 2024
United States$156.7 $171.7 $214.6
Outside U.S.$65.2 $72.3 $68.1
Total$221.9 $244.0 $282.6

Product/geography mix (GAAP)

Component ($M)Q2 2024Q3 2024Q4 2024
U.S. Pump$81.7 $86.7 $98.4
U.S. Supplies & Other$74.8 $83.9 $85.9
U.S. Tandem Choice (net rev recognized/deferral)$0.154 $1.039 $30.202
OUS Pump$26.1 $28.1 $25.8
OUS Supplies & Other$39.1 $44.2 $42.3

KPIs

KPIQ2 2024Q3 2024Q4 2024
U.S. Pump Shipments>20,000 ~21,000 >24,000 (ex-Choice)
OUS Pump Shipments~10,000 ~11,000 ~10,000
Installed Base (global)——“over 480,000 people”
MDI share of new starts (U.S., FY context)——>60% of new starts in 2024
Renewal capture——~70% within 18 months (track record)

Non-GAAP adjustments context

  • Tandem Choice program: Q4 U.S. GAAP sales include $30.2M recognition as the program expired 12/31/24; non-GAAP excludes Tandem Choice impacts. This lifts GAAP gross margin/earnings; non-GAAP margins steady at 51% in Q4 .

Estimates comparison

  • S&P Global consensus estimates were not available via API at the time of analysis; therefore, vs-consensus comparisons are not shown. Values could not be retrieved from S&P Global due to request limits.

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Sales (Total)FY 2025—$997M–$1.007B Introduced
Sales (U.S.)FY 2025—$725M–$730M Introduced
Sales (OUS)FY 2025—$272M–$277M; includes $15–$20M headwind for EU direct prep Introduced
Sales (Total)Q1 2025—$219M–$224M Introduced
Sales (U.S.)Q1 2025—$144M–$147M Introduced
Sales (OUS)Q1 2025—$75M–$77M Introduced
Gross Margin %FY 2025—~54% Introduced
Gross Margin %Q1 2025—~51% Introduced
Adj. EBITDA Margin %FY 2025—~3% Introduced
Adj. EBITDA Margin %Q1 2025—~-6% Introduced
Non-cash charges (incl. SBC/D&A)FY 2025—~$115M (SBC ~$95M; D&A ~$20M) Introduced

Notes: Management highlighted minimal anticipated tariff impact in 2025 gross margin outlook and mid-single-digit growth in new U.S. pump starts driving the year, with renewals and supplies as predictable bases .

Earnings Call Themes & Trends

TopicPrevious Mentions (Q-2 = Q2’24; Q-1 = Q3’24)Current Period (Q4’24)Trend
Pharmacy channel access & impactQ2: “first agreement” groundwork; selective, not disruptive to model . Q3: strategy to reduce out-of-pocket; pull-through planning .~20% of U.S. lives under contracts; modest FY25 contribution assumed; key 2025 priority .Scaling; early volume; positive long-term margin/access lever.
Type 2 diabetes expansionQ2: pivotal completed to expand indication . Q3: submission timing and market potential discussed; ~5–10% of new starts T2 historically .FDA clearance of Control-IQ+ for T2; pilot launch in March; aim to drive market development and coverage (Medicare pathway pursued) .Major TAM expansion; paced pilot and access work.
Mobi ramp & marginsQ2: U.S. launch with Dexcom G7; early enthusiasm . Q3: MDI conversion growth; Mobi headwind to GM in 2024, accretive in 2025 .Pump accretive in 2025; cartridge scale benefit starts 2026; largest contributor to long-term GM to 65% target .Multiyear margin tailwind as mix shifts.
OUS growth & go-directQ2/Q3: strong OUS growth; tenders; building regional teams .Transition to direct in select EU in 2026; 2025 OUS growth 2–4% with $15–$20M headwind; minimal Q1 disruption .Short-term friction; long-term control/margin upside.
Seasonality & logisticsQ2/Q3: typical U.S. deductible seasonality discussed .Muted late-December seasonality; year-end shipping delays impacted timing .Monitor Q1 seasonal step-down and channel timing.
CGM integrationsQ2: Mobi with Dexcom G7 . Q3: plan Libre 3 integrations .Libre 3+ on t:slim then Mobi; Android app for Mobi in 2025 .Broader CGM optionality to expand funnel.
R&D pipelineQ3: SteadySet pivotal/filings; Sigi patch pump development .UVA collaboration on fully closed-loop; CE Mark filed for Mobi OUS .Robust mid/long-term innovation cadence.

Management Commentary

  • “2024 was a pivotal year… we returned to strong sales growth… We are continuing to transform our business in 2025 through the recent expansion of our U.S. sales force, commencing pharmacy coverage, and adding new features and indications…” — John Sheridan, CEO .
  • “Control-IQ+… now FDA cleared for people living with type 2… more than doubles our addressable market in the United States” — CEO .
  • “We are committed to delivering sustained profitable growth… investments focus on our U.S. sales infrastructure… and the establishment of operations to support a direct launch in select European countries” — Leigh Vosseller, CFO .
  • “We now have approximately 20 percent of U.S. lives covered under pharmacy agreements… a win for patients who previously stayed on multiple daily injections due to cost barriers” — Mark Novara, EVP & CCO .

Q&A Highlights

  • U.S. Q4 dynamics: December softness and some shipping delays impacted timing; primary driver was muted late-quarter seasonality, not competitive change .
  • Pharmacy channel: ~20% covered lives; early stage with modest 2025 contribution; intent to lower out-of-pocket while maintaining economics; no near-term cash flow model change .
  • Margin ramp: Mobi pump becomes accretive in 2025; cartridges require scale, benefiting starting 2026; FY25 GM guide ~54% (Q1 ~51%) .
  • OUS outlook: FY25 OUS growth 2–4% reflects prep for going direct and related $15–$20M headwind; minimal Q1 disruption expected .
  • Salesforce expansion: 95%+ complete; disruption risk front-end loaded and contemplated in FY25; designed to increase share of voice at high-growth HCPs .

Estimates Context

  • S&P Global consensus estimates for Q4 2024 revenue/EPS and prior quarters were not retrievable due to data access limits at the time of request. As a result, we do not present vs-consensus beats/misses for this quarter. Management did not explicitly reference beating/missing Street estimates in the documents reviewed .

Key Takeaways for Investors

  • Execution inflection: Q4 delivered record revenue and a 900 bps YoY GAAP gross margin expansion; non-GAAP GM steady at 51%, underscoring core margin durability ex-Choice .
  • 2025 set-up: Guidance embeds conservative assumptions and near-term disruption (U.S. realignment; EU go-direct prep), yet still targets ~10–11% growth, GM ~54%, and positive Adj. EBITDA (~3%) .
  • Structural growth drivers: Type 2 label for Control-IQ+, expanding CGM integrations (Libre 3+), and pharmacy access should expand the funnel and improve affordability, especially for MDI conversions .
  • Margin trajectory: Mobi unit economics turning accretive in 2025 with cartridge scale in 2026; long-term GM target 65% supported by mix, scale, and channel strategy .
  • Watch near-term cadence: Expect typical Q1 seasonal step-down and measured pharmacy/type 2 ramp; monitor OUS order timing and effects from EU channel shift .
  • Balance sheet/cash: Year-end cash/investments $438M; positive free cash flow in 2024 supports investments and 2025 commitments (convertible notes/AMF obligations) .

Appendix: Additional Quantitative Detail

Sales vs. Non-GAAP reconciliation (quarterly totals)

MetricQ2 2024Q3 2024Q4 2024
GAAP Sales ($M)$221.9 $244.0 $282.6
Tandem Choice Adj. ($M)$(0.154) $(1.039) $(30.201)
Non-GAAP Sales ($M)$221.8 $242.9 $252.4

Balance sheet snapshots (select)

MetricQ3 2024Q4 2024
Cash, cash equivalents & ST investments ($000s)$473,305 $438,329
Convertible senior notes, long-term net ($000s)$307,829 $308,266
Total stockholders’ equity ($000s)$237,710 $263,098

Sources: Company press releases, 8‑K (Item 2.02), and earnings call transcripts as cited.