TNDM - Earnings call transcript Q1 2021 | Tandem Diabetes Care, Inc.

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Operator

Good day and thank you for standing by, and welcome to the Q1 Tandem Diabetes Care 2021 Earnings call. At this time all participants are in a listen-only mode. After the speaker’s presentation there will be a question-and-answer session. [Operator Instructions] I would now like to introduce your host for this conference call, Susan Morrison

Susan Morrison

Thank you. thanks Tandem's and call quarter everyone, XXXX. for afternoon, for first joining earnings Good include forward-looking will discussion Today's statements. plans, as reflect events, and operating product statements development speak These management's timelines, financial expectations performance today's date. of about future and only and cause and from differ or in could anticipated, statements. results our to There are forward-looking that actual risks projected uncertainties materially those our by elsewhere list quarterly and in press XX-Q Factors is from those different SEC of be to materially statements today, earlier factors other A issued most Form Form portion our forward-looking or release that annual any implied and results highlighted Risk XX-K, these could on on report in in cause actual the recent of expressed report under our and filings. publicly a whether to events forward-looking assume future information, no result new other update as factors. or obligation statements, any of We

operating to press In EBITDA, us EBITDA a addition, earlier Please key adjusted measure measure. our allocation refer and of for which today capital. the issued is evaluate generate include discussion by Adjusted will information. non-GAAP financial make strategic further is performance, to today's used for decisions release operating plans, references a to

Our John President Chief Executive Sheridan, Officer; hosted be and Vosseller, call Chief Vice and our Leigh Financial and will Executive President Officer. today by

the before remarks, back our Following follow-up one I'll over prepared into Thank advance John. for and the to questions. question you turn getting the in now one call call we'll open up asking for queue. only

John Sheridan

a our ability delivering business. while I for pandemic. the with the operating people and Tandem, XXXX progress our meaningful Thank with first proud more these lives and off results Thanks, of quarter goes operational provide with welcome different partners Susan, constraints everyone well as X,XXX than of to an today's experience and COVID-XX as under record diabetes. record-breaking performance our even you incredible to start for customers to suppliers. is while improving our everyone Tandem's positively call. to throughout of with continue and valued our continuing employees, to am Credit accomplishments sales

in nearly company's of back, pipeline XX excellence, our in using are balance The number past we a XX to the With we products story a Looking services, the more Tandem t:slim countries world-class three the in quadrupled comeback position has operational differentiated sheet. product people now and and a has leader over in strongest and the from robust are years diabetes around history. being than technology. moved world. being

a best-in-class first in demonstrated Q&A – today's to that pump States of you. Control-IQ from we to United updates our performance in to are demand important our particularly again line the our our the we Starting pump time there so adoption product our a were top The and our t:slim in expand once as reflection with to to increasing international underpenetrated is offering of outside a have of happy ample sight QX, quarter, and a executing. achieving are highlights we and for on drivers the we high see on most is of market. are We goals. quarter the interest continued strength large technology. in In concentrate topics going longer-term And the remarks, prepared XX the

on its XX%. meaningful scaling than restrictions same commercial diabetes, but in pump the million any and As X internationally not average hear that daily day-to-day. in provide of durable rather all in less the our of penetration it's pump pumps is of appeal managing people reasons And of diabetes States It's confidence reducing t:slim their country's remain we people as around to flexibility. as flexibility. choosing and and international for designed and the opportunity. across a the domestically still geographies. as even activities, huge so, daily a center one form preferences dominant a the result ease users injections. increase there trends outperformed using flagship of yet living focus, for both, internationally. while Flexibility segments It living greatly domestically adoption is areas Type internal Outside two and as therapy, this of are our with use the the to lives. encouraging large expectations place, factor efforts strategy, COVID-XX needs Infusion were can which burden Interestingly, are particularly sets, multiple positive people QX. a both in and reminder, essentially in these approximately in four United since was current with important diabetes we use result, the that well of industry Ease are countries was their with And people our t:slim primary demand XX, very we person's

statistics the the various our launched began also sales in the our which we serve, scale which of really reflect throughout first scale stages France expanding in the our to of countries that we in In Canada the half larger quarter, and are international continue launch, technology. Germany We impact and this Control-IQ with There in later making we'll launch year. in second availability. year. we highlight Control-IQ additional geographies And XXXX. last are benefit of are plan QX early Control-IQ of across to Our the two at use,

people first its technology XXX,XXX Control-IQ last quarter of following than in initial launch more First, year worldwide. have our the

awesome. insights be demonstrate to this use customers Most our providers our benefits, that logged, offerings And a are sets to delivery. cloud is health days matters insulin to economic use clinical able have t:connect our Experience Control-IQ we now outcomes algorithm's the system, Second, automated with to further payers. real-world analyzed importantly, future data feedback providers, healthcare of through more already When care product bar. Control-IQ enhance and our study health the than million offer to and high from XX infrastructure. we continues of real-world valuable in use

fact, to the exceeded real-world demonstrating after diabetes use. data technology results published the year in was obtained users the in therapeutic extent trials that achieved Control-IQ journal some one technology of randomized in of controlled and In March, and

In Type broad whom X,XXX addition, range of area for that showed make-up this as of improvements diabetes. market. diabetes continues of nearly TypeX people's us, different X analyze had a of and and a people XXX whom, needs the of data segments strong Type the in glycemic be had preferences X to diabetes interest we

data Type experience, and increased average integrated range Control-IQ. to encouraged Type we see are for indication publication, and DTT under The towards publication, along month, from with life We ADA to from and the working be the XX%. a ATTD of trend the will time DTT real-world X other at And X conferences. CGM pump the next XX% for that data presented with glycemic are the just users quality

of I where catapulted a Diabetes I throughout on and starting at outcomes diabetes Control-IQ highlighting years. systems investigator the the qualitative feel study human, think in prominent other researchers was recent Research research us to us patient-reported customers' insulin of from worldwide experiences Dr. position it's Santa technology. titled, number Control-IQ Dr. delivery a with Sansum, during Pinsker for diabetes in Barbara in we is And pancreas publications, Tandem, and the as industry. is the highly the training trials He committed Tandem clinical our he the thrilled, lead those individuals most Medical numerous why ADA normal Institute Director. announce of also is well as has respected that the Pinsker I including has regarded on particularly a joins feel are captures lead quarter, Tandem of forefront artificial we joined automated as He been virtual recent best success to poster the to was and manufacturers. Jordan This are amongst leading our author for that retaining. experience. on programs at the

product living delivery offerings, to of different expand Type extensive we brings improving market, patient our diabetes. as who care, diabetes in lives our passion our people efficiencies to lead with of look the advance to for clinical the strategy, Pinsker Pinsker Dr. epidemiology support addition, physician practice automated people team will as portfolio and Tandem's and Dr. are shares our including II. In executive with importantly insulin diabetes knowledge segments

to development other Turning efforts. our product

R&D delivery, digital insulin continuing an progress and good all are make on automated overview activities across call. integrations and provided other and to focus that the offerings, our systems pillars R&D of of on We health last our hardware of We the our advancements. expansion

note throughout highlight couple enrollment. recently kids a two today updates study of Results study is run new large participants be period in of technology lower further in And published this include in using support this initial that will commenced will pilot will group indication. were years help old Control-IQ as year as a First young younger new another a from so just number for study likely December. age age a and of to a The the

While of benefits we can our our technology sometimes technology. to about kids the not do healthcare providers today, Control-IQ are and younger to to market prescribe them able

products age lower increase this market. the adoption So segment indication could in the our of of

questions encouraged review. the quarter we that Next has in in fourth response have filings to that as and milestone of FDA agency the needed to last process to It's this our response update COVID-XX bolus submission mobile prioritize we we're year. of is meaningful we a understood related filed that and March begin normal received the an

Between our For don't timing. always insulin, that to to process the app we pleased of a on possible. be filing to longer I I comment Strategically, the that we're as we it's interactions very there's was agency's of feature the this first. the delivery with but will cybersecurity feature tough response our predict our not highly QX quickly work. mobile reasons, bring sought competitive FDA, no the say will in where that as clearance, we've clearance see on after detail working planning but of the importance bolus fact level credit any available our are commercial Based controls to for and to market recognized COVID-XX to we

transferred learnings could any pipeline. entire product So be to our

we've direct the advancing approach will experience. user as and year the now great on and We perspective useful relevant foundational It's be resulting the benefit of same robust are for our will seeing because customer pump directly Android are to iOS the bolus end designed a refinements that use development at t:sport last We're the the additional to for elected more this the make that customers for use our filing. some apps interface with is gained t:sport that of making t:sport in access we feature of mobile progress t:slimxX.

time is development t:sport track. on line Our for

weeks, out upfront, ultimately filing incorporate as bolus from result our to clearance gained insights will team these a our and is response. complete we we the from filing these operations push year. next more regulatory However believe in faster a our manufacturing t:sport information availability. date items Internally, mobile launch addressing few will additional for be preparing and commercial path commercial t:sport's By

multiple Control-IQ excited of performance And our offerings call to technology We it customer now Dexcom expanded would XXXX set with the we key and revolutionary Also than sensor launch turn we're pump family of are experience ability the use about expands business, over consider serve goals and the the of XXXX operationally daily of a with form achieve now quarter are and diabetes enhance that, features source not many whom and for strategically, people new of our Overall, to providing a and are we've particularly beyond. digital living therapy. between coming solutions health confidence market new Tandem Commercially, and with as with Leigh. factor I'll our pump different and our today, segment end we of integrations to injection, new our while enhanced like the offerings great otherwise diabetes launch to while addressing to out a slated option, first working our worldwide. for Abbott.

Leigh Vosseller

is domestically fundamental purchases supply and Overall, made Highlights you good renewal sales our strongest sales, starting John and these the and contribution quarter our areas was progress continued for business. sales, We the even across everyone. first add improvement Thank our us XX-point with gross internationally, with achieved increase with history. a company's each year. key reoccurring pump with last once in growth investments, record-setting color a sheet the on financial performance worldwide To loss in quarter improvement of in of first increasing our $XXX which operating and include of the quarter the compared afternoon strong, million areas, XX% margin ending was again. both in some the to sales, balance

results presentation. to sales our shipments a both of fourth end our is reminder, our worldwide This of details the and exceeded XX,XXX number the Investors of geography highest year by record a benefited Overall, pumps quarter with our we quarter sales most and the provide our to As in pump under in only section website product traditional markets. recent seasonality. which international from second of ever second quarter, events

our scaling base customers. years. as first our includes pressure which the is of look in to revenue, offset pandemic, as of which The t:slim were While ongoing half feel has come worldwide to to nearly the we sales our installed In is customers well for been pump from the on nearly where of from market. repeat our compared reoccurring beginning beginning continue largely of XXX,XXX quarter demand just breakout to historical by of our the the sales supplies high momentum it sources international XX sale renewal to sales sales very different from

In will XX% anticipate meaningfully sales year. our to addition, total we that approximately the this and represent contribute sales business now international of international

domestic Turning more We of the our customers XX% year. our in quarter representing to base. results. Sales the million, US over for now $XXX growth than were installed XXX,XXX prior have

at an first reminder, quarter from pandemic. sales last in stocking million year the incremental a benefited supply $X onset from of As customer the the

and the for Contributing customers half capturing XX,XXX trends cumulative is rate. was of growth terms in shipments. as to we our sales not customers with we approximately increase in shipments market UnitedHealthcare our is the direct half expectations, on reaching DME new share. the XX,XXX than the access for channel members international particularly the have sales we renewals benefit our new that continue more us driven prepare customers significantly. competitive pump XXXX which quarter. we to evidence therapy through first the well last The opportunities provides valuable an renewal will year, as This shipments in in our have In daily of furthering did increase as market, progress in full international exceeded X,XXX brings from first quarter. a our when in distributor, installed quarter, is more the injections, growth addition every record with to well in distributor for were double we million fulfilled that the to base. and to the our pumps connection which Unlike in to $XX than of which the Sales prior from fourth historical Our quarter pump both expand pump multiple was by for operations primarily year. one international weighted to orders our essentially domestic heavily were Consistent the the

We expect closely our also while though, dynamics of quarters, navigate continue the COVID the their Control-IQ. changing as coming to manage and the in to ordering constantly levels, inventory scaling fluctuate launch patterns distributors

of our and QX on months based million, a made million This the results, to base. Europe, a X%, in countries compared sales charge year. sales included many seasonality outside XX% to domestically stock-based United to in we as reflects of capacity the to strong time year. in total quarter, or expected States in representing XX%. rapidly cost In X% take increased a beginning $XXX meaningful growing also to investments growth a in particular, XXXX improved the XX% our to the our million and rate declined in XX%. prior dynamics XXXX $XXX go the compensation gross addition, of to leverage margin in international to summer sales to have This million, installed the we experienced non-cash XX% this and for holiday. range on from perspective, $XXX sales the compared people year-over-year $XXX XX% as these to prior The internationally, support of sales we to range of From of growth cartridge of in both includes expectations, Factoring percent

average As sales selling outside a lower U.S. markets reminder, higher prices. margin on percent pressure to from of gross a slight the put

EBITDA our adjusted and operating outside model in nature due benefited the U.S. to the greatly we However, distribution margins of

the We in and EBITDA adjusted operating made great progress margin first also our quarter. in

software were gain in as year. particularly of our increased of total R&D percent to initiatives compensation I EBITDA last in from greater negative long-term non-cash experienced pump this due sales stock-based prior of improvement leverage, a XX% operating reduction proud only adjusted an Our am loss sales and We X% X% year, to health. heavily our sales. in both able from in to investing part to to in that support we the X% margin while a even and hardware, near related to digital strategic negative

and range of of $X this our $X treatment quarter on million debt, is non-cash we XX% sales. In with one this only to QX in Since convertible This expense for of of be we early to quarter margin accounting which adjusted guidance to forward. There have expectations expected the quarter period million to expenses. achieving first the a our associated XXXX, of non-operating the XX% resulted XX% each expense progress also $X the related cash of new convertible EBITDA is total million accounting quarterly debt. Our interest new for adopted gross track XXXX, the quarter. and going trend in reported second in is of XXXX update interest in

due of and quarter, Our in $XX the positive we from achieved total that at lowest in first quarter seasonal million, ending a the generated cash million the milestone, This the is investments cash in to flow time cash for primarily from increased first operations year. strong $XXX operations.

increased our generated million, higher average a to range flow XXXX row, year XX% for to of capacity. in summarize sales. worldwide estimate a in range despite To to to manufacturing EBITDA expand sales million. $XXX international XX% million to outlook, expectations have be to including in quarters and the of XX% also have $XXX $XXX four million to cash sales adjusted We capital gross XXXX of of margin investments $XXX We the our we free

Our to for are components included non-cash sales be of as and charges expense. and cost of stock both amortization expected compensation, approximately $XX depreciation million, operating

we with by financial we three you have customer XXXX, organization as and the growth care of can and today's against achieve results, see first the particularly of of As the community. support growth execution to explosive are were in and our that, substantially our well evolved years set longer-term to I the Innovation, questions. making, diabetes launch business decision for have in goals it to our in our last will pump positioned objectives. forefront an at the strategic With over we consistent turn since operator commitment our the for our

Operator

question first with Our comes Steven Instructions] Oppenheimer. [Operator from Lichtman

Steven Lichtman

Hi, you. Thank guys.

particularly So, international, Control-IQ have just question was and color mentioned Control-IQ various a provide launched on the countries, expecting later I a I hear changed there. year? how accelerated first couple in on can this online to any other you countries you've to if with progress come trends you of great wondering, as assume with

Leigh Vosseller

question. Steve. just Control-IQ really at rollout. think you it of interesting beginning about the the Thanks for the as It's Hi, we're

it In in France without haven't strength Germany, it. already largest even yet great we're fact, and we markets launched seeing our and which are two

can I think US indicator in is driving in the Control-IQ that's an markets. what the what and OUS we the with momentum we're seeing to see expect of

that variability think with might the For ordering been they're is the for long-term how fighting a distributors think COVID this patterns what's the in us. a into just There's growth of I there. of we now, from in environment. to changing based dynamics translate great don't it on the But about terms encouraging lot happening have trend

Steven Lichtman

frame Great. approval increasingly and about you was you an overall? of at I wondering, Control-IQ. are for Type talked talked seeking where about then guys Type X. if you about us And for You sort John, X you're could Thanks. talking

update approaching quarter just You made Can market? the during X the on in you us thoughts on Type investment your CeQur. overall sort Tandem of is where the

John Sheridan

data we're over the saw that that XXX of range was DTT. in first time The very and users about last excited Well, the substantial Absolutely. in improvement year. all

sort clinical great But and a and channel study are great longer-term design, plan the working strategy of interface, still to and on that that user access. involves was So data we see.

the study, advantage Type on, to our So the but first that those get existing of step require currently the approval form we believe for begin before smaller still It we two to to for been sort work are our may really we t:sport approval FDA and appealing take community. and X working of but not things indicated that. – is a the we to to with is type want lead discretion with the very we've be get we're And going so that. also products. need conversations said Control-IQ to as is for obviously, factor clinical actually to then that

so here products the on bag, move those forward two for looking take form with user potentially the market that just working actually So that future. dynamics factor interface. a also of issues and this these get simplifying we'll can channel been studying, we be successful. we specifically newer And plan those almost advantage we longer-term point, And in be we in then access that the we've just the at near when mean the to to aggressively where with products discrete community have newer in the time and products

Steven Lichtman

John. Thanks, Great.

John Sheridan

talking Good you, to Sure. Steve.

Operator

Larry from with Fargo. comes Wells question Biegelsen next Our

Larry Biegelsen

just And would attention. quarter. -- as John question. one If come year taking and they people's guidance color well. to attracted Leigh, out in the using look cadence How questions caught to any release international think on pump? that the the you do for guys. timeline? we getting question the Thanks for do QX, put think the about we guys. Thanks question CeQur in quote What you it Congrats the you sales? incumbent? on And I'll ask international quarter the seasonality your here on compares for obviously that the and CeQur. how strong last the well this one above Hey, on at

Leigh Vosseller

the with Larry start I'll question. international

from in because was business quarter. bit bit seen. predict little so that So, the this is opportunity much QX Starting came little when you the variability with a of to we've it based of unique think in distributor, about difficult that least on patterns a half one the at cadence, ordering particular just the fourth

but I how will say particular confidence out. it This play we yet can't develop a saw everyone trend that can help and I that exactly quarter see us ordering,

pressure thing think the I gain to due Control-IQ most just generally we season. US seasonality we think third European about in and expect typical outside to is we continued quarter roll otherwise the the across continues because speaking growth to the traction expect And markets new of the holiday as out there.

John Sheridan

All right. And we're about then investment. CeQur, with regards the to excited

As you each different know fits in There diabetes many size one and segments. condition. segments preferences all is these not a are market use there's of

meet And this segment support segments appeal solutions operating different to X. look and in When needs in different low these that a we're aligns of profile so to with it to a it's our alternative very it's today. really valuable injections tool and who investment particularly simple the you the customers at Simplicity, a are just strategy Type CeQur in that will

particular about as so strategy. And the here to learn really we intent X is this segment Type our formulate

about segments I about closely working there's market with that. with understand mentioned PCPs CeQur versus issues to broader we can I then X from But about working with as Type CeQur Specifically the access learn working Endos. think

opportunity. into think get in to I And just relationship. that a strategy ways this the think many from I Type is that of think gain can I great there's one CeQur our education in as deal can So, about well And the effectively. this we market X element and kind help we're so of excited Tandem

Larry Biegelsen

John. Thanks

John Sheridan

Yes.

Operator

next O'Brien from question Piper Sandler. Our Matthew with comes

Matthew O'Brien

for Afternoon. Thanks the taking questions.

not we're Just guidance make I'm pick it asking But a at to versus beat million looking you want here lot to we just all. the what and the clear this sure modeling. at looking but question guidance there's I $XX so on were just by on

of guidance pushed of up million You're $XX the international. in all midpoint almost that is about range the

anything call business there or bump maybe little of of which out that is dynamic is as the up business? a competitive to piece more overall in bit anything domestically XX% given So, didn't really the the to things still why else

Leigh Vosseller

I'll of a about it's and think few the by momentum saying talked when to largely about for positives the US. cautious think other some for more few here would that at at as year. still ago the outside positive just about. the also we're have in of about and it a time to And the approach that talked some the we think outside it tailwind quite the also that the We we area last I as half really US. items offsetting Sure. Control-IQ that potential it. since year. year competitive the the didn't the year changed just market in building we our And a UnitedHealthcare seeing half in it not COVID noise relates the beginning when is then but we momentum the the hasn't back starting for just start of guidance things And months cautious we're that It's build not we were I dynamic add It's would access we dynamics. The US. philosophy should the say the of is more then about seen see some this have and Control-IQ be until US we've that the July -- been about when now of so the from we're than I all in

plan all the those further forward internal play. we growth still still are were point, across outpaced We still domestic and seeing our to I to we think own look factors And your in with very year. results pleased our so --

Matthew O'Brien

just Okay. back Is the the incrementally marketplace to not be Leigh, in half. that in noise you're fair more but clear to nervous about competitive the say?

Leigh Vosseller

all. at Not

John Sheridan

that's our with and think very confident feel we guidance why I both Yes. OUS I we mean I position and think domestically. raised

Matthew O'Brien

United as it. terms a far Leigh, the I figures, from was follow appreciate mind hear in the And comments you or really I Got on that. providing helpful. side those? as didn't what as that's quantitative up any replacement then contribution of would

Leigh Vosseller

a turned those I'll talk -- to little bit sure about how out. I'm the you

XXXX the across factors. last as that improvement volume did recent steady, quarters, now, seeing of. just year as an year just size. renewals what more a an opportunities to are about we doubled perspective our And those which saw compared next I about comparison new And strong, for of What's the the the shipments, in next from what's So predict off rate. think those and When like exciting to are cumulative quarters baseline key to come this XXXX, about is in see increase so well really been going are renewals four of -- the seeing year you progress. been we new renewals think easy Right opportunities year. is in eight first, solid we've terms really in which about to you've the are

so typically likely payers. is it and that's of as good the forward comment started it going where think and we've in It's of And then so happy QX it's seeing the continuation this year, I baseline in just to what loud in don't baseline up guess being the about the we part it of will. year we from think tracking variations last we're And would trending clearly the on and because you just about different along are if comment year expectations. have been year in to won't But We perspective, just now as because with QX didn't we line tracking. a of next quarter-to-quarter a access but our a United size year-over-year we expect. with particular

Matthew O'Brien

Great. Thank you.

John Sheridan

you. Thank Yeah.

Operator

with Our Street Brooks next Capital. O'Neil question comes from Lake

Brooks O'Neil

you products would obviously, Congratulations the the widespread the curious look business I'm like? great to the new from what those start to in lost year. long in market there's you Or on the you light catching of expectations quarter as been where expectation to you've new afternoon. Good that the I how guys think are the pumps people see new about what is think you Do a first competitors. do call you. responding up Thank waited been these to time? for pumps

John Sheridan

we've not quarters, you competitors' obviously in pretty a Control-IQ so. extremely And now, we I Yes. done the even yet. And is Brooks, -- we I of it's had and in was haven't. great that our Basal-IQ, I particularly the few with certain saw in that mean we think don't I'm there well one the available Right German market. Germany. available last did OUS pumps quarter. mean

the against So the have until we're they've you And these US approved can't by in compete going that we're been and that FDA the product. effectively US in yet. excited neither products to market

unlikely noise So the as they any happens there'll see that at we've probably I be of think it's until more gain this seen second won't We'll and do we'll probably the to half just approval, that what have point see year. impact.

Brooks O'Neil

Yes.

I'm more comments sense your But curious Do the the And Okay. subsequently then and capability read safe, mobile a the the mobile want Is of bit they and about curious believes data us bolus they issue. your more t:sport. want on works competitive understand kind I'm little then that that and I about understand just FDA FDA's how product? response you information? is that to help but feelings your

John Sheridan

I the think our FDA of we're there in and normal like Sure. the I areas any cybersecurity. one design. the that greatest been interaction of think, And things submission with we've I don't our say I want that alleviated interaction of got might about us very specifically think to risk. this our to but mean I will the And, have just FDA, with response concerns with the comment have a -- when with you I is pleased that they've this. And part their on that think response I

very about So also of supportive pumps. I'll particularly remains very using technology say feel FDA in in we positive devices mobile insulin that. the that medical

that's we'll as going our to the review that remain process. we're to very just more the with just -- is now about respond It's market coming going a uncertainty have back to this normal from in inherent interaction. And And those And interactions and dealing and in FDA. you product still product. informed FDA to for But forth keep I with confident so the I know think positive. approval that there's we get and that we is clearly a I also think this think we're it

Brooks O'Neil

Thank Okay. John. you,

John Sheridan

you. Thank Yes.

Operator

from comes UBS. Matt Taylor question next with Our

Matt Taylor

for the Thanks question. taking Hi.

through follow-up really just extrapolate did you on improve the So things be the uncertainty. some still offer helpful. any you on know to color quarter? I there through that on in recent cadence that provide question the I wanted would trends to a April? any trend Could Is about there's environment. Anything there could

John Sheridan

been just I'll mean, well. there's the say into second as I demand that strong quarter

achieve that as going about years now XXXX well the who So XXX,XXX to momentum. of excited just we're couple seeing have now the what we who confidence it. are we're and have Control-IQ about are who using the ourselves to we and that we it It's next talked we're the from And set it that well this based year the people goals physicians out using prescribing as and on as have for are reaction we people as we as outstanding. positive

physicians momentum more are more systems. have We that prescribing incredible and

I I using their organization, a confidence using trust. who it that are it great think from mean, have people many and our to And get positive motivational can't spot. whole the are anecdotes I you I so daily how in people but We tell we're

Matt Taylor

There just on Got you relative international. Is I what guess, broad-based a you. expected broad-based. definitely more continue, out? what to wanted strength like any if there outperformance would was then pockets there Got were or some you follow-up just you on ordering was going call some you. sounds think kind it that is specificity of to of that that And

Leigh Vosseller

each quarter. wrestling the was order dynamic. were the including really substantial strength the their everyone that It to was It's say orders such the all are a with to order a lot of first who see across already ordering, fourth COVID still country we a they're trend new quarter hard reordering in placed today board from within regions just happy in if the Germany and

local about do is inventory the markets? impacting set how So right get as it think them. their in they they their of front How that's demand

bit think we're there's hearing so lot bringing. for And distributors a we to and it I throughout enthusiasm and is continue a something see what to of it's be clear the will in there's figure But will think it's this to again it of long-term. challenge the we're is loud -- I try what And that just out. a awareness about

Matt Taylor

congrats color Great. quarter. a on Well, for and thanks good the

John Sheridan

Thanks, Matt.

Leigh Vosseller

Thanks, Matt.

Operator

comes Ravi Markets. Misra question next from Capital Berenberg Our with

Ravi Misra

everyone. evening, Good Hi.

John Sheridan

Hi, Ravi.

Ravi Misra

question. couple my just a So

capabilities from any that add data whether it kind upfront. And the patient? XX you comes value-add to about, of can can number. kind it So or refinements I'll days of, that's you you maybe just Control-IQ And the the think a million my innovation extract for large longer-term us think ask some on can second one you then that of, algorithm just rather help

just and metrics. on the leverage For guidance the Leigh,

up, seems looked You lot the it you thought call. brought -- that to number out prior kind it the in you're than holding fast was quarter had like like international given you a metrics sales the you leverage of that this but it better outperformance was profitability and laid

wondering Thank kind kind the revenue just So of of outperformance? offset what's the you. given there

John Sheridan

Yeah. carefully data performance I And really the data how this And Control-IQ its about looking this That's opportunities you're as teams. saying. to the exactly the in a use for of formulation time. how have amount think our works. the to in just the for -- great we of interactions and the for you driving at Ravi the we and data. system looking can our the advancements what's see, system the they're improvement team data looking make as question, overall steps we're of We're in it's and performs. data algorithm greatly the what invested we we're science is is tremendous And a next algorithm And do mining data our have

can pump. think settings algorithm that time there's itself the And physicians the we on also over so the who that that are using the collect pump. for help data that's people I I optimize think probably we There's

could the We to more for of they the a itself. product how make just the effectively more it t:sport. us going and next-generation see also algorithms where performs. to that in taken physicians we've And interact we've applied lot cloud understand efficient, to apply to process consider it for provide there's So And that are opportunities who we're product customer It over well better as the there's in therapy And clearly, as information could support their patients. improvement. and we and time. that potentially then exist the continue and a helps the

would So work of how this hugely a teams payers, it's important And just and out building to We're trove. fully with as finally who we that. to treasure payers really it I we're taking say It's that to do can the for advantage that see reimbursement data know value available help us. technology type for them time. with and to information products look payers go our and them in benefits our dashboards well. of And additional this we establishing of back see ourselves we potentially make to when

Leigh Vosseller

necessarily when together. achieving and would that afford year. in to question spend saying that just that many we revenue your we set would to think Ravi put things I like the we've is is by operating there the on this on assumption think can't I people we based are organization those for money set on our gives plan just margin And about targets within confidence to the construct us start is margins, way that this even this And the one more in it

on allows could them overachievement we something having so sales, ahead put as some go year that the advance in year. or the an off investments, next do maybe of it us those for to maybe initiatives or by to to And and opportunity opposed this putting table

feel as our towards handling So allow very keep margin forward in we and those will it us to objectives well. still confident targets moving long-term meeting

Operator

Thank you.

Our Jayson with comes from question Raymond next Bedford James.

Jayson Bedford

afternoon. Good

guess. Just couple of a quick ones I

few still t:sport dynamics think you early fourth could you've that. And Do I slip about solved kind XXXX? that factors call? you a you talked follow-up that quarter? your on believe weeks, user into human On Or paraphrase so On then here and of is it message. I make the the understand pipeline just out interface want the to sure last I John, a just said, pushed bit to a commentary

John Sheridan

Good question. Yeah.

We're we're to positive mobile that that refinements the bolus need that with on that we elected still we're use to other that this the and could submit say developed app. because strategy we we when lessons and would a first, are with learned there the at a products -- the we that pleased so be that we experience t:sport program. intentionally apply interface about think last in it. I definitely believe I to results. track those very to resulting make year mobile did excited much We more So

we these And going it's have guess back anticipate and going to so requirements weeks they're go said. we additional we to be and do anticipated that now measured I new have -- work to to and -- there's did we're as going there's should in --

at look gain is during to we way the process improvements now by it that itself. review the -- it's think likely I incorporating these we're

we as at the excuse in time anyway. that slip roughly of might So into we hopefully the -- possible to availability it to the device XXXX But XXXX point the me same filing. same should that we start. commercial the in that It's end it expected will XXXX up the commercialization was with be anticipate

Jayson Bedford

line? you John just us, before And could maybe commercial the what you is disclosed remind it time expected if availability haven't

John Sheridan

probably of it's we sometime the specifically, summer would mean, but said haven't I XXXX. I say in

Jayson Bedford

then if And another Leigh can I Okay. sneak in one.

than I the that next Just guidance the the quarters average on is if the quarter. over in few first implies first annualize lower quarter the sales, international

key Control-IQ a few in You're launching countries.

I'm hesitation about So the on higher largely uncertainty of going international a just the function to COVID is ordering and distributor that tied wondering just the patterns?

Leigh Vosseller

distributors of fact we've would it. be thoughtful quarter to third it's been see haven't quarters. holiday to too the been specific hope feet. it's the because beginning last new want cadence the Yeah. that A But around getting European reminder the And trend pressure it's yes back discern that but in with their add of or just just few of all on caution really the -- I tend a about we the it. some variability season. And that really just able seeing they're trend, the to to I we

Jayson Bedford

Fair enough. Thanks.

Operator

Citibank. with question next Joanne from Our comes Wuensch

Joanne Wuensch

thanks taking the and question. Good afternoon, for

are come after pumps their sell companies recognize no the it is to that into Control-IQ into diabetes move channel. channel. starting pharmacy and other those that pharmacy? traditional products can way into DME The I there But that are And the the

Leigh Vosseller

a put it Joanne. would way I not no on

product. a but channel we're across seeing What think space, pharmacy right. aren't the is you're necessarily lot those products I of like the our moving into

bit a being product commodity Our specialized in means like. I'll nature little being it those more call more

we're so are clear maybe we channel. in like benefits pharmacy well have the on in have line really And today aren't DME the we focused that channel that we that the the what renewal fact And helps of think that which really and they're from, visibility to we of where build long-term customers about in key our customer prospects. relationship coming as us right terms it who's ordering up important front, the is

about piece it's one. the just like there. other that's DME So we pricing element number And channel the that seen stability the that we've

enhance continue payers insurance One the of to initiatives the channel. of really to reimbursement is demonstrating clinical think that the and to DME have for path good by our through value the product we we a

-- you that So seems it channel What we're many those hear are the is sounds things times focused like streamlined pharmacy upfront. today. it's about it on more the

how ordering have don't that focused can around on we're it. we people that perceived that process streamline negativity then So

solutions, better. we're so improving the digital automating make order in our on flow And focused processes just to

for pharmacy we're channel the today the and on where we continue So on that's focused can the side long-term. DME to evaluate is really

Joanne Wuensch

Thanks. replacement to that? that. there second a in my I question quantify to do with appreciate sounds significant And XXXX. Is It has any it's cycle. way like

Leigh Vosseller

the shipped XX,XXX when say coming going XXXX are Sure. in up From double beginning And in compare our renewals was and it this pumps just I pumps XXXX. of think perspective, business through the to XXXX. the people opportunity of who That's to you escalation year. a XXXX we if you we their up shipped first what for XXXX, that purchased about really in should in it be

are the coming relationship and I attracting just business path lot So, the for meaningful we've think more more And have a with. those it renewals people compare and us. solid years exciting built the been a new opportunity where those renewals patients, trajectory, to a when mean get to going it's strong you I become part steady of very in that

their offer they is goal our to continue to stay us experience innovation so customer warranties that to want is So when will to with enhance that expire.

Joanne Wuensch

you. Thank

John Sheridan

Thanks, Joanne.

Operator

from with Our question Alex Craig-Hallum. comes next Nowak

Trenton McCarthy

everyone. McCarthy for on afternoon Alex. Trent Great. is Good jumping This

Just question. providers more the plans than What on Are you are in from there hearing you to in less competitive you XXXG? defend when deeper it the originally thought? dig states? and patients little you the to UK is feedback competitive Medtronic Medtronic allowing or finding here a launches your and to And the around EU tweak

John Sheridan

well the about we're beginning been that We're well was just doing as with with that Basal-IQ. we three for say two hear to products quarter And quarter. are quite Germany well feel or quite mentioning again and today that did I I there XXXG we today a would got OUS like we've we now I it. there The moment exceptionally think this ago. just did we has quarters in last and

system feel incremental I is when improvement the an to an look a that So, algorithm that on have XXXG and you at sensor is been problematic.

I I a feel effectively we here in can OUS well as that that the the So think is them while think compete as against we countries Medtronic competitor, comfortable states. formidable in

Trenton McCarthy

efforts to Dexcom up ran EU Are you benefit than potentially a translate any help adoption. conversion you increase Got follow-up. it. is greater anticipate from just the that then push push into and prices And their And your an taking lower help pick in big you conversions? in to a seeing MDI consumer geography? do

Leigh Vosseller

relationship have sales get. to and gotten show their what with I When the talk think I campaigns, But integration natural correlation add talking patients our any we we've a don't to come it's to we in benefit and about market. the with physicians the the So conversation of that's have direct products. reps that it's in perspective benefit from from always that DTC are natural assume can evidence a the an and might

it's seeing we think that that on an fair that I if uptick based be to So also effect. enable having they're -- might

Trenton McCarthy

the Got questions. it. Thanks for

Operator

comes question Stifel. with Blackman next from Our Matthew

Mathew Blackman

Just And age boat follow-up sort got outside you're and then traditional put incremental for of or afternoon coming more you? Are even I'll more the question folks Obviously, DTC theme. channel, opportunity Thanks first Thanks. everyone. guess more size new considering developing the investment from on would competition in to the investments the just indication sort out those are patients frame of Good channel? here open up patient questions. the to therapy? in can pump we've for taking I the care something drive Endo there my about DTC thinking spending how upfront. funnels. expanded the back you and you one or incremental the primary any to

John Sheridan

Matt. Thanks,

I age under think the numbers approximately X.X one that we've seen are there's XX million children of with the worldwide. Type

important that population number age necessarily the not the does but is are it's that in immediately, pediatric know a a endocrinologists pumps large it's that suggesting on put benefits providing. immediately. we group a should I control this children technology because So of very need number, of

to we just too. meaningful a be So, I don't provide with and important increase a it's just to opportunity very in group benefits It's going think us. Control-IQ for age that the of want work

people well indication. so of that are as group that to We market to can't able today until it. that be we aware to want we this So, get do

we that frame push And that our of and and be we time probably so, completed to anticipate that during the XXXX could forward to that continue hope. in with this, XXXX, will indication we're going That's time early for would get group. the our study

Leigh Vosseller

of them. start reach question DTC strategies, Then team the who the way to to constantly Matt attract smart saying I'll very and by evaluating are customers marketing best ROI folks and on have a your just we to

connect media we engaged and Type primarily platforms, social to know they is engagement, it with that on focus streaming we the online comes highly see that ways Our directly when and really today can X activities. community, are

our spend continue but define place strategies and our dollars. focus where will refine our And today, versus is determine, so that's the best where we and is to

Matthew Blackman

you. Thank

John Sheridan

Yes. Thank you.

Operator

Danielle next Our SVB Antalffy comes with from question Leerink.

Rebecca Wang

on Hi. This higher-level I have is Rebecca Wang landscape. question for Danielle. the a competitive

do Tandem more needs you will more you. accelerate mean current from new market for with your saying And the overall current market the options sustain How for I do think pump accelerate growth to be to growth you think Thank market patients? So, we're with entrants. levels insulin much all competitive could the trajectory? those pump

John Sheridan

you. That's a Thank good question.

the higher. others, We the in that community publicly that we can that who Type believe and companies in low-XXs can even we diabetes, to probably today have in mid-XXs. penetration the within increase Other stated manufacturing from endocrinologists X go believe work the

we behind CGM see products We a technology. think I CGM more their the to people that's does that provides are pump it think We They whether threshold market, -- likely the a a of lot to think definitely get consider it's at support. working companies time. face decision other think new to and from going that it's when and and benefits of so, people or technology. to are algorithms, with drafting see And there's on point the a of service pumps in that technology that as technology who the it coming make pump benefits companies with whether they needles the reduce company go they're I that just MDI. -- pens opportunity. CGM And the to They is to

think ease we driving to adoption. So, I all expand. that the technology that market and does going And we think use think we'll of and is to as is continue benefit it

Rebecca Wang

you. Thank

Operator

there not any questions, at And I'm showing today's are presentation. since concludes time. this also this further further gentlemen, questions and Ladies no

have and disconnect day. a now may wonderful You

Tandem Diabetes Care (TNDM) 6 May 212021 Q1 Earnings call transcript