Earnings call transcript Q1 2023

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Operator

Good day and thank you for standing by. Welcome to Tandem Diabetes Care First Quarter 2023 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today's conference is being recorded.

to Morrison, conference Administrative Executive like speaker to Officer. now Susan today, Vice would hand over the your I President, Chief Please go ahead.

Susan Morrison

to for events, include forward-looking welcome Quarter These statements remind and Tandem's expectations statements. timelines that those XXXX. uncertainties about management's speak Call future date. There today's everyone or financial will and that cause everyone, to our as could only forward-looking development We'd performance from and discussion Hello, today's reflect operating of differ actual in projected results risks anticipated like plans and product to Earnings materially and statements. First are

Form A list annual statements, in in release Factors issued new assume or be and expressed implied events SEC elsewhere to factors. of by our recent other under portion report earlier any and most or today information, our results press publicly and our any quarterly to forward-looking on XX-Q factors Form the result other highlighted could report of in actual as of a Risk different obligation update We on is filings. future those XX-K, no whether cause materially from these forward-looking that statements

believe of also earnings performance of reconciliation and give measures directly website results reflects our not Today's comparable Center most Please measure. to discussion with prepared and on independently non-GAAP non-GAAP of reporting operating a business superior measures Non-GAAP their operating measures core these that We presented refer release, results to of our indicative substitution financial portion Form comparisons report our GAAP. investors should of to Investor Any XX-Q GAAP include as accordance financial a considered quarterly and GAAP we the information measures. a information for these periods. to our are will be in or financial number our facilitate non-GAAP to references across financial provided believe better operations. is ongoing

our President our Officer. President President Hansen, Chief Officer; Vice Executive Sheridan, our John include participants Vosseller, and Executive Brian Vice Financial Commercial and Chief Leigh and call Today's CEO. and

the John, you Following question advance to queue. up limiting open their prepared you're for remarks, for to we'll back welcome yourself in the one begin. questions. before into call getting Thank

John Sheridan

thank and joining ability us on set first commercial Thanks, quarter we everyone, out year. We're confidence achieve our you of and goals coming Susan, our call. for with operational key today's for about to this the

competitive a a customers testament t:slim We of expand capturing t:slim our Control-IQ highly share continue one in talented rated number market a to insulin employees XX meaningful with environment grow purchasing achievement competitive and the number is technology. and This again. Tandem pump the our a while and once to

multiple later continue enthusiasm comments. teams prepare an offer able the products my another to wave about in Tandem at each XXXX. more in launch new talk to there's innovative I'll of the community. our diabetes for these products we to overall, But as Internally, of being of approach

and the we'll launches, that diabetes management. burden high-quality reputation these of our services products offering be With upon reduce for building

Control-IQ technology. in Type and of with continues improvements Journal of clinical X and set people the life quality We and Medicine It was range demographics of ages with Technology recently wide XX diabetes. publications, England our and a easy-to-use deliver with high This to bar of t:slim New Therapeutics. highlighted including living our outstanding across multiple Diabetes

the a Therapeutics Diabetes This the three is amassing trials the with Technology with young work for England living diabetes. hemoglobin AID is shows meta-analysis bring was time sustained as the the amount third greatest published that lowest system. age, our important recently and our The which that clinical for technology we very of benefits we What meta-analysis of people the is of more range this time AXc the Control-IQ the capabilities publication randomized benefit, in unrivaled. Journal to time in baseline journal. people market-leading our benefits featured are experienced immediate our on highest focusing the data The technology regardless positive of and benefit Control-IQ t:slim to our New demonstrated children. of and was of

is This important choosing positive look million customers our with technology of similar not Our environment. positive of than combined our performance benefits also environmental part XX provide kept since longer-term our kind pump, us a the impact, only installed three of but our customer batteries are base, offerings. of on making landfills we this have is sets clinical t:slim a we apart years an more impact XXXX. to and By product making out following as forward our that Control-IQ. to the strategy allows experience teams the Is impact, continue and launch from future Tandem product growing a

broader remainder Leigh the for ask now and spend and commercial a first talking I'd the expectations in performance Brian of year. to Brian? the our to like about minutes environment quarter, our the few

Brian Hansen

is number John. use patients one satisfaction, personal in our and bit into number insulin their In pump care of It's terms perspective number rated t:slim in reducing number clinical XX overall number stories of I spend a one one their in and with terms providers burden. outcomes, role, in one. share Thanks, of and they one ease get to health why time my quite put of quickly

a also acknowledgment best-in-class. that is Control-IQ technology continues broad be There to

insulin of over adopting ability disconnect features. daily bolus correction be therapy the expand customers profiles, we that for to selling this overnight years, and furthering of strong pump to feature, long-term why new goal automated including to is pump demonstrating into approximately injections, continue are multiple Our QX past insulin customized our several This report control the superior half our market. year,

the what was we've As the we environment, seen look with commercial the at broader start to exiting consistent largely XXXX. year

this the of gained year. will pressures the noise United half experience product in environment and in us which The were the selling States, in there competitor's While with decision-making. this new associated launch created benefit delayed we've back

our about which as modest with report and technology number diabetes are education including for the a t:connect incredible increasing patients customer high is the our It's of specialists our data very attrition why in-person rate change not team renewal services. by therapy We of and positive sales uploaded events customers excited in remains the through ways, customers we've Our to our These purchases. few contribute our our seen our this interactions over experience. a multiple and advocacy which our years. past in platform and overall satisfaction clinical through training monitor more in amount regularly team person,

increased also encouraging based Tandem QX. shipments. next purchasing renewal and continues It's The over with to repeat the In environment consistent significantly meaningfully impact in of climb years of economic opportunity also our fact, pump U.S. number the over the the quarters. again been XXXX historical in pump has line customers from year past than few on is a this new several once higher

now it more therapy payment of highlighted patients has to comprehensive misconceptions held some and have there the also The customers physicians our this that plans channel. by pump pressure, insulin DME about affordability are available through but helped address the

pump a pay for for is our a average, on Our data less zero cost and third shows, for the than system nearly itself. monthly direct customer of $XX Tandem out the pocket

center, pump a on United isn't these cost t:slim under through pricing customer to is barrier XX people or counter health choosing care there for work Outside most awareness sensitivity was quarter. scaling team the States, the which our to where therapy. government perception driving commercial required we to focused to are continue in to distribution pump little plans as of activity, are facts payments Our the done adopt as covered same the to transition of the the no the of international additional inventory Related European largely therapy. our first logistics

more distribution our XX% France hearing with the and sales the process. our center in XX completed second we two already those are now quarter, States. distributors living we'll the feedback serve worldwide the serve. onboarded in from the this We now And in will We've benefits roughly to partners support easing We're on outside countries people which that positive approximately in focused chain distribution Germany, of diabetes countries supply United be and bringing once largest XXXX, of our countries. European is

of right have about be far knowledge we excited valuable XX% which Overall, commercial longer-term they XX% to As opportunity. as continue to gained the presents t:slim quarter. exciting on so technology penetrated, most offer mindful these only the today remain our of we around expand to inform strategy as our we the countries their future We capitalize are the noted, competition worldwide. we an system as have well will XX launches and

portfolio diabetes. building, our of early reinforcing provider of and We to about more strategy care offering a to of living are true of receive with inquiries the customer signs meet starting and people conviction anticipation needs Mobi pumps and their health

that, to will call the Leigh. now I With turn over

Leigh Vosseller

Thank you, Brian.

the Tandem are earnings as be our financial I'll As in discussing basis. can non-GAAP well a today's reminder, metrics otherwise unless on in portion today quarter found with expectations the Choice deferral of on launched as of to sales Investor release Reconciliations U.S. be GAAP Center the that a late which noted, line first our associated Worldwide high the program the website. in in million, $XXX were end XXXX. with and was the excludes

of comparisons as multiple were ongoing the necessarily quarter the sales that of the impact on center. of our in operational half were business, year-over-year factors such shipments. There in by not unique pump distribution XX,XXX the Nearly European reflective to our driven progress resulting our are transition sales

quarter U.S., resets. our typical deductible seasonal first our total with the sales performance We trends million. results $XXX in with associated in experienced insurance Beginning the were

decline U.S. XX,XXX pump of the XXXX, decline XX%. For was quarter for example, pumps. sequential was as shipments the shipped In we XX% the first approximately average the in historically

new We our customers, saw rates of quarter number which these on growth last customer high with year new opportunities, the also our of renewal shipments strong underscores the maintained a in majority were the in While increased year-over-year. an provided satisfaction. contribution to improvements meaningful renewals we

saw our pumps Similar We impacting infusion an our to saw historical seasonality to sales people our set quarter in-warranty in ordering both growth the to of first with approximately first increase XXX,XXX we line supplies. the base in the insurance-related and experience, Turning installed cartridges in end at in patterns. and quarter. customer

Overall, was at XXXX sales. mix therefore, XX% the our in our consistent with and business pricing direct approximately U.S. of of

of normal quarters range million full-year the the based that the trends due rates. across We are the seasonality. assume expectations back-end on will current million for non-GAAP reaffirming the year We and $XXX be to increase our our strong to customers loaded that for $XXX new in sales and sales renewal in referral U.S. will

year Considering deal over increase as double-digit customers point bottom QX, historical trends great this the for from step-up competitors from launch. starting our sequential to and the product of is of a new to even which a variability. end partners, good low Mobi launches our anticipate been The think range show QX QX, how has about a own

compared X,XXX million. U.S., the sales is quarter number A XXX,XXX approximately center estimated were internal base of QX team our the in last of our quarter customer in in We distribution $XX supply pumps customers to and This U.S. outside of the in-warranty with increase the our the United year. discussed. chain bringing States transition for operations Outside continued people. focus XX% first European our that the a was Brian to outside big shipped utilization the the

business, This shipments international strengthening closer our and relations move between correlation on logistical pump reducing challenges, pump distributor our is chain placements bringing a for and positive patients. supply

pump approximately transition and $XX The impact reflected million, first our supply was sales. in quarter this of

countries. Although of are distributor the sales offset full-year pressures ordering the to second substantially $XXX our the headwinds first market, were actual million OUS onboarding quarter partially mix approximately in in in benefit from the the based of remaining previously we for levels. quarter $X of have $XXX the current anticipate guidance, by million. Consistent business provided inventory the These on participating we range completed pricing of our with million expectations

to Turning margins.

offset quarter from recent by Our gross unfavorable benefited higher and Similar in expectations selling product margin which at quarters, costs mix. the our line our reduced average in manufacturing in XX% was to experience first were prices we sales. with of

While improved growing sales year, of base installed customers our supplies gross the last our of lower-margin overall. drove margin higher proportion over supply modestly

acquired maintain materials Those Additionally, our of costs further costs percentage gross greater margin raw behind in early gross material pressure half this approximately inventory the margins. higher higher reduced lower combined with us the XXXX XX% freight with by impact full-year. the sales and associated costs point. will that higher costs anticipate of be one and of these for margin second materially year We expectations gross in

the additional measures relation efforts, investments prioritize we growth charge well to $X with manage and $XX opportunities spending, From million AMF R&D efficiencies create onetime In an acquisition operating in-process the and as in to perspective, in to a expense noncash associated for Medical organization. closing in diligently we continue the cash our the severance quarter. recognized of those pursue future million within as costs

Beyond was related costs primarily QX fourth our scale-up increase associated baseline to our in these recent spending unique quarter ongoing Mobi the items, acquisitions and to operational compared costs. with development

Therefore, as as was was EBITDA in will improve is compensation, anticipate the negative full-year mid-single half for the second margins margin When EBITDA depreciation, of the to a our amortization year noncash that are range the XX%. excluding maintaining We to sales of to transition. our EBITDA center complete. in expectations the distribution transactions our be when adjusted adjusted center adjusted transition on This stock-based impact positive in X% of basis. well to line light expectations, second particularly X% margin a the in with our the in quarter of onetime digits negative we the European return with and distribution

the range We of our with closed remain quarter, on of $XXX $XXX summarize the in sheet the XXXX we are in estimated sales be million in acquisition total AMF a which strong basis, cash cash outside States million of To non-GAAP million, million the worldwide the the for $XXX outlook, sales closing United balance is but including $XXX to to provided to million. $XXX million. our a investments utilized first Notably, position. of and $XX in Medical quarter

expectation to XX% approximately X% Our EBITDA and gross the adjusted to in range X% be of estimated is sales. of is margin

million stock depreciation comp associated approximately Our with stock compensation, for $XX $XX noncash is depreciation. to $XXX P&L and expected are charges and amortization of with million be million, which

Investor basis. earnings the metrics portion directly non-GAAP website today our of As release I Center refer comparable to a financial GAAP the otherwise are most the for financial a unless a reminder, on discussed stated, to our measure. Please and reconciliation

now turn John. will to the call back I

John Sheridan

therapy on Thanks, Delivering its management. Leigh. leadership innovation what to insulin in Tandem drove is position

wear delivering XXXX a as for that choice. are needs continue majority and This diabetes, doing in living and form vision with committed choice preferences daily factor around new of so today. whom use simplification requires their choice in We true continue pump. We'll means injections serving to varying the of portfolio multiple solutions the center people and by of users features, upcoming operate on and device delivering choice plan This our how introductions. this in in can product we

of FDA-cleared is Fall first only the be CGM one t:slim not is this starting goal for with their users Our XX to opens for to sensor our it's to multiple pump integrated Choice the than people differentiator, and make a more preferences. insulin realization empowers and adopt sensors. CGM for more the a true decision of door the technology. needs This best interoperability

are market in Libre updated and sensors. Our GX capable remotely Dexcom's pump FreeStyle of with Abbott's t:slim integrate to the XX being

offered metered be customers period. provides will launching The for starting teams. phases, that all our fashion care scaling our United and internal by a We find with internationally. best their products updates health warranty to within in debt followed experience software in and internal no-cost including availability States walkabout the providers, These the testing, XX users key

in follow-up. start believe by and to sensors. is We've We across launch working the to testing as place integration enjoy Libre Dexcom launch FreeStyle Control-IQ taking and as Walkabout to closely integration also testing allow scaled Abbott's Libre this been the will will of with diligently integration also the U.S. international the benefits followed finalize been with and Libre to has And Control-IQ been a our months, with launch. quarter the its customers X of Libre working fast GX X we X. coordinate third rollout. our the X a finalize with path X in using underway. on upcoming Walkabout Libre we plan technology Libre We've our scale

United directly FDA target a following Libre the technology launch next the as implementation the path aligns to is sensor Outside with launch with clearance we to States, preparing Mobi launch system. are the Tandem we our timing. The X intend new

size is operated by a half application. the the reminder, mobile t:slim through Mobi the a of As pump about smartphone and a

expand designed their in how greater they choice people operate wear It's portfolio diabetes offer to our and pump. and of solutions

constructive through half year. Our of dialog meantime, work with its the review to the to second agency we process responding and the the In as launch remains of FDA in for we continue the questions. prepare

progress our great are today. our see, can we to in strength future offer you products As XX we the in that t:slim making with addition

at historically have industry-leading diabetes introduced pace. We new technologies an

multiple noteworthy particularly the be in we that bringing it's products months. market will new coming So to

extraordinary. your our our focuses both executing Tandem goals to our building express ability our efforts like employees confident achieve remain for to in value. offerings and in our technology the positively for I'd and Our everyone We And shareholder thanks which successful are plan, our business customers to different. making supporting year on

for the the With that, questions. ask to operator to open call like up I'd

Operator

Instructions] our with Barclays. Matt [Operator question first And is Miksic from

line Your is open.

Matthew Miksic

Hi, congrats quarter solid And here. thanks taking for on question. really a the

So little cadence used you describe the could that the the launch talked process maybe, different and if sort of have this ramp-up then we're to. integration than I that clearance and John, the sort just of walkabout And the a bit about, you one of follow-up.

John Sheridan

really for both is follow FDA release Dexcom going sequence of the of sequence Abbott. the and Well, Sure. to the approvals

I of see to meaningful experience. quarter. It's And happen t:slim the third -- GX would be optimize really which and system this will the going the conduct by us a in and scaled will remarks, using testing followed understand and the walkabout by in launch, to be performance we that Dexcom said then is expect So And as first, number meaningful a customers Abbott. in we customer months. prepared help to followed upcoming

launch that international comes think -- walkabout little It scaled will a launch process it third it I to starts. basis to in right follow relatively testing also When GX, is country-by-country it It quarter. the to commence that and we're the compared product, will will U.S. in on after frame Abbott the occur launch. the happen So Dexcom. be a it relatively phase in when now, launch, and to bit the U.S. time will the a for going comes delayed short

see using And so people enter meaningful happen we would of system fourth the think that the in I as numbers quarter. it quarter, we will third the

Matthew Miksic

clinicians color. one talked if process. John. follow-up, great. this could, very XX% it and Is in of how it seeing systems It is mean other But much we've stabilized closed-loop bit I to like leading seems flowing checks Thanks the else XX%, the two patients anecdotal sense? what may a pick are talk kind for we And the of there sort so system the the us sort be that having new out a that on we in patients at of I And in new environment with have dialog they're enter and in performed. what's little stable? Is That's kind the there when is of patient your narrative to We choice crested? that about of of sense this considering the market. clinicians up coming anything the patients a gives up moment? to

John Sheridan

Matt, you're Yes, I think right.

but better, any for not worse. stabilized. situation sort There see sure pressure having still we it's is the it's of think not as I any

year. this it been has So entering

see benefits new of the in probably see expect start come pressure quarter half. the technologies, to second ways we market two until or we innovation these the new to another for think of I to

your would we characterization. with agree so And

Operator

from And is Lichtman with for our question. Steven One moment next Oppenheimer. question next our

Your is line open.

Steven Lichtman

everyone. evening Thank you. Good

back some That's terms get making market the comments to a that about terms CGM products just newer you you're just the talk bit And right? had quick in you of of bit could one then latter of learned is one question little of looks the on the clarification. the the in Any that of just talked your contribution I Brian, guidance, progress in and in and Can clarification -- making sort just the help about half you've the you a integration little you and clarifications there. with back, year. some experiences going embedded of a part just it with in nice think more So that dynamics the some the like pricing what about then year. competing means not of in

what place? clarify you can what you'll putting Thanks. in be that mean you If by and

Brian Hansen

Sure.

one? first So Leigh, you want to catch the

Leigh Vosseller

Sure. I'll for any do we in not product new start confirming contribution guidance this the that year. have by

Brian Hansen

lot challenges. challenges, not piece, fourth pretty I stable COVID to quarter. The right staffing quarter maybe seeing commented that And we're was first earlier from few like environment a a a those is my perspective, now

six very the most our And So think the I see. now well. health we with is the they of pressures. as the And start conversations market. now competitive support and part take that would look the sit with that from addressed of the nine economic competitive that some something available or the remarks care of piece we of window been prepared at say product I we obviously, that on And has get providers we've Control-IQ our Tandem month those then with strength a the team.

we all The their of features touchscreen, extent, physicians a they're coming and of they're disconnect done highlights patients with strength team that see job back lean about the see We our size, ability offering are has again, to doing, and to good the endocrinologists doing. and the feel products. there. feedback, how liked, the folks the can Those to our can and continue and very product strength how the into to some have the tremendous our it

kind to rest and pent-up stable early play year. going like the is So I think the a now and we're demand that into it environment QX a more excitement, but out moving and takes while a introduction anytime into there of of product that, little

Steven Lichtman

Thanks. Great.

Brian Hansen

it. Appreciate

John Sheridan

Steve. Thanks,

Operator

with Pasquale our for moment our One question. from next Nephron And is Research. question Chris next

line Your is open.

Christopher Pasquale

to you then model. expecting finish as slowdown gets Are line pump closer one Mobi any shipments John, one the question and on in thanks. on just the here. Yes, Mobi

that. we have in anticipation build, an front outlook You launched of that for year? talked of starting in have new about past bit when you guys the Is a your in contemplated pocket seen the products, to air

Leigh Vosseller

I'll own is we product, to on take tend time see into new a -- product advance market, any product Yes, whether the when approval comes a up our in noise that of we introduced It's it's until around Chris. that the point actually usually released it's time the the from in timeframe competitive one, or it. FDA the strongest market.

step-up, So when we QX, is talk look when is end historically. start part into seen noise cautioning which we the end think at into that the consideration, the the range will of on when sequential just the double-digit begin, we're year, cadence the spread of low of the of low how across that reason the sales about taking might that you we're we step-up which we've

Christopher Pasquale

helpful. dynamic shipped to a the the there imply because between delta That's quarter, recognized And ASP. was Okay. then in guys Or to pumps you pretty there just international there and another a Is mix? is of related looking step-up distribution happening revenue revenue at there the just big this center? seem that pump

Leigh Vosseller

is actually center, it price It but the benefit. to related a is distribution

sales you think particular within we was that if headwind the So countries. about saw

that on future. would I expect what quarter would benefit in was price we or ordering different continue model a basis countries see for mix so that And the normalized than something us which though gave it the this to within quarter. It's a not of

Christopher Pasquale

you. Okay, thank

Operator

for question. Thank our moment next One you.

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

Your line is open.

Brooks O'Neil

afternoon. Good

innovations integration product those How do and the delivered delivered impact So anticipate your to line and the have free a from software I is the view versus new through Libre that form you from you have largely factor? with GX impact complete products. last you which free revenue been the anticipating download know download software Mobi for guys we're the few might

John Sheridan

to doing? -- of I that Brooks, say first hi are all, would going I'm you say that. how

Brooks O'Neil

I am doing well.

John Sheridan

see to good. expect We --

time. We do got people form see start-up it like people using favorable are factor. It's GX to is launch. faster brand-new and It's the from revenue it. to a I've -- talked really really it a expect who impact

Leigh think be positive we a going that So mentioned. there's impact, to as

renew it We could with think people that have also to sooner. help renewals us

all good. that's So

I people using that about Abbott think of large that Abbott, today. X are that Type using quite pump Abbott, the with therapy when a number sensors are you there's think not

So to It's Dexcom. that's do think mobile opportunity Mobi simplicity system It's may and use, that we market, what with the on of I than brand-new just a of we going app. that it's factor. bring with discretion ease the interacting controlled a a got be the bigger see to mobile represent when form even app. the a the by

We think that's going a to on have positive effect sales.

of as Source, in I these the through much haven't the think entire this effect. have effect latter the positive Tandem XXXX. see And are XXXX products, a will the of that that talked get we all full part benefit about, including them of going about some three we which think to I probably, of we But year. news good year

Brooks O'Neil

you it. very Got much. Thank

John Sheridan

Thank you.

Operator

Fargo. One moment Larry is from for question. our question And next Wells next our Biegelsen with

is open. line Your

Nathan Treybeck

what relative Thanks. starts for underlying Hi, in I renewal Can April QX the this is Nathan how to seeing far? about guess so And you and talk drivers? you're new Larry. trended Treybeck on in

Leigh Vosseller

Sure.

the way Brian the the this up, quarter. with So fourth it shaped both in as pretty say quarter consistent seeing were environment would and type in of John said, we stable, was I

pump indeed, XX%. So the came decline which quarter, about of a this that renewal. in be are in trends, but there. year, the as is typical that for anticipated about new starts we actually Renewal was to new continuing pumps ship, still the pumps XX% a to are and grow the majority shipments into pump we decline sequential U.S. follow of would the bigger And overall piece we

versus the pump that seen And light dynamics we the talked and to the consistent are that or as out the we same best so new pressure. for of environment, new have even seen this product we if and strong fight and we've renewals where I we in share. the market believe But where would say continue we've there, have firmly about, still

Nathan Treybeck

follow-up. just could I if And Great.

new is landscape terms for you in market? got of competitor How once their competition, Thanks. In the XXXG the that about are this recently U.S. approval pump thinking the so competitive your on

John Sheridan

been it's and summer, product. in think up at And for OUS we has a to the have when in quarters. sometime that countries factor, we we market, competing the new product I better sensor does confidence we've device, a said Well, as device, We to form a we But and we promotion. many certainly And them you the but States. know endo think step still come fingersticks. product against it while better once the now the expect community this it's the that have requires of look trust same that

So in new with We've market, our conviction. even it's our for products We in expecting confident to And market this our it surprise. goals been hit while competitive for this to hasn't while. ability of remain all, changed not the coming midyear. a first the there's a year

Nathan Treybeck

Thank you.

Operator

One our question. moment for next

from Our with Danielle next Antalffy UBS. comes question

line Your is open.

Danielle Antalffy

I major And product Hey, all so around on I a what's about I environment. the questions, I the good Thanks have really from One, recent little if afternoon question. approval think competitive taking mean, everyone. factored one competitors. surprised that's of two the much just in. for were could. the we

there? into guide So what's the factored

Libre share, should given on obviously, to base. installed opportunity less they have second this my I'll then And of it's that trying tide here this a bit, base numbers, 'XX, little accelerating about with And it is market but should just I John, be now. touch say, size we that integration, this in or But installed it's the about look exists did the think you ask in we And and this? just how I smaller their question, a muted? type mean, inflection change driver sort could something 'XX much. the growth? appreciate but to here cetera. thinking of is as I an be you back more et so Thanks Or not X. think at

Leigh Vosseller

We Danielle. this first of when always for say, guess, what's for the would guidance the be new noise will there now take market. to year product approval Sure. we the in do anticipating, relation product factored that or I in have factoring the one fact, is the in about been two. environment. in introduced being you a And the Thanks a questions, I'll competitive

it's So corner. always right just around that assumed something be could we've the

now certainty have timing. about we so the more And

when we range QX, usually QX, low in as noisy, is low And how double-digits which our expect the we why of terms to we we at so historical into the QX into that it in of be transitions think look end on look be will with sequential be about available noise to there's might market the that of kind add on to it the starting for growth who in GX going pump and well people people Mobi. also conversations waiting be that talk as to that's coming as of to be

come And year. so what a that's we've competitive the from perspective could about noise this that and thought

John Sheridan

providing the are Libre, a so natural is people Danielle, and interest trying that an sensor a first can is who And the device I they the also. do Abbott, All have of choose have about competition that to to Dexcom not we're do that we're sort that regarding that's important in all tendency between to companies. choice. provide think in choice And thing any can they of if sensors of we say engaged competitive has a

that have X XXX,XXX But being type who the there that we people sensor. as understand use approximately there's Abbott in it, said, U.S. the --

take get And that are us so therapy. of penetration we XX% -- an that people becomes XXX,XXX candidates for If community, with XX% or opportunity certainly, it's pump potential even that there's that for to advantage community.

and a that think opportunity larger I outside So also the device, is it's I States. Abbott think big the United there with

-- So to we that get it as XXXX in really time to a allows it's that's at to frame. numbers about us driver the growth driver we've an talked important going look growth

our important pipeline of So forward. going an part it's

Danielle Antalffy

Thank you.

Operator

question. moment our One next for

Our with from comes Jefferies. Matt next question Taylor

Matthew Taylor

to of you the research could taking And I the on that? think haven't within they Hi, XX%. people convert convert? on John thanks for for just mentioned opportunity previously. opportunity to follow-up about thinking them just Abbott about your market Hey, question. MDIs the that you that line Have you and percentage overall how of that XX% done And done to and Leigh, John, opportunity. Or the do to wanted

John Sheridan

And U.S., in XX%. penetration the about pump Yes. at And you that think of said, current rate if there's I the therapy it's as XXX,XXX. look about I

We pump are I benefits that So set that think in kind them have more with. sensor as point. for think a growth comfortable couple they're a mind, the I of upcoming that's We pump goal my we opportunity sell certainly going years. a reasonable the in And process. a point. familiar with them, to defines starting I benefits But of of of help connected therapy that therapy, represents when and starting become think significant think convince work the to a as they of and to just to that the for up more ourselves,

Matthew Taylor

some color. us one one time six those And whether you you sense. the the just key I to would help they're think mean the that or frame of convert? Could about quarter folks expect factors? converting are that And what integration? Maybe after quarter makes

John Sheridan

the overnight it's it's not sure. -- think -- for to going that be think I going I to

there's process to going process, But happen. to us. get promotion, a have think something I for in. represent going sales And it's involved I opportunity does definitely think think that selling I excited is to to co-marketing pro large force be that a our that's it

Matthew Taylor

you. Thank Right.

Operator

our One question. for moment next

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

is open. line Your

Matthew O'Brien

that Thanks for not does a one's But Leigh. two I change for model is in question. the it sticking And as have taking the based full-year generate this competitive XX% importantly, conversions are quarter? It's more at here, far as number out singular Leigh, you -- in which The up think it year do been is should of that, on I'm XX%. commentary, said for I before like digits getting just put U.S. last it's the XX%. the was in you half. you what full the year low your was which of that number double off when call to as or I look with And math, it and I you demonstrable any wanted guys year, patients And guess parts. the there first question. the you and MDI Historically, U.S. then

it's big of Mobi competitor more including not back half cetera. year in noise a a making the ramp space, the et So the just in with

how able low end of really -- at to back can you to I even range? the walk us mean, XXX are the get get get up you there? through be to you I why confident to mean,

Leigh Vosseller

new from I'll the with Sure. broke one questions, consistent on XX-XX Matt. at and conversions. mix XX% start the pumpers from MDI coming that how for competitive XX% down. Thanks first about of It again remained

to confident shipments renewals So second a becoming that back quarter. bigger just there pump those so every again, But remark U.S. in year leads the And are of about that contribution the much in the dynamics to your this why no part today. our we're change half. to and question

second healthier how I first say the the probably isn't split, and the for dynamics environment across first than was based just comp XXXX year, a it the good half. half was First, second would on in a it half the half in much

coming unusual this a so more XX-XX our that revenue what in partially streams. fact from the business And isn't recurring comes for is conviction year, split of from we've seen too history. And the our

people. there from pumps them. the bought XX,XXX we well pretty seen They look our year, supply sales installed years XX,XXX about year in those ago, the And in base up this a from like than renewals is So four XX% have Tandem significantly. growing the the seasonal see which what more large If when before. strong that higher U.S., stream we as to as factor past you were we've in scale

you the of of seasonality, normal and when high that to normal predictability for renewals a be us kind seems about have you we of just able pretty think It of doing to in predictability achieve coming about conviction level think and So year, supplies. the that.

Matthew O'Brien

you. Thank it. Got

Operator

moment question. One for next our

Bedford with Raymond question Jayson Our comes from next James.

Your line is open.

Jayson Bedford

Good afternoon.

-- sequential kind They're the place. to Leigh. couple of of dynamics probably a the On Just more kind of historical are over international, may me all excuse questions. be

You you called distributor expected direction revenue Any out on the impact dynamic million from international this us in in the give XQ. year $X can XQ?

Leigh Vosseller

a QX. Jayson, we about us in It $X it to was million. I think, headwind in fourth the is quarter $XX the hit look of -- million gave at about So that way

transitioned, still haven't add bit normalized So number. back, you fully those rate to I run mean a you because we there's of when of gets variability I there almost a that in call considering would type what little

lot introductions Control-IQ. excitement So and you of business. can there new forward product to about about for look the -- We're to you we as our use very about that the what come with outside build a opportunities excited that off OUS still have think U.S., there's

these need through still And work great to just we there. so in headwinds opportunity near-term. here the there's growth It's

Jayson Bedford

you've up that business, related And the Okay. double-digit right? made U.S. comment that just the was to here, low

Leigh Vosseller

referring that Yes. traditional what is about Thanks the at of place QX look clarification. that It's for our like there, think to asking really we seems this starting for which year. to. a seasonal shipments, I'm U.S. When good point pump patterns for

Jayson Bedford

comment. an was to base Okay. to base kind installed apples-to-apples the And Just here. comparing I the user exiting comparison of then 'XX? up the XXX,XXX true in-warranty in-warranty we're basis. make on just installed want the sure What apples-to-apples appreciate

Leigh Vosseller

Sure. It was off the top.

to I about like think out was point one there. I'd thing There's XXX,XXX.

how is intended And number it's base what to question do and/or installed ordering how we into times translate a is they that be math. I while opportunities, provide attrition. given base representative in warranty it's base it's a And view period. at so that of not that renewal an the number is think a supplies, of number measure in gotten think installed I've who any number it's to straight is directional way because looking good tool attrition I modeling for

patterns So have not drop people you as you That's warranty expired. the whose ordering the how base warranties work. add into people and new off

stopped have who people have the using pump We in-warranty.

warranty. pump the of people many out have We use who

it to way is I said, and So about good think it's opportunities. but modeling, about thinking like a renewal for directionally necessarily not attrition, supplies

Jayson Bedford

And your comment you is don't believe…

Susan Morrison

queue. jump I'm the need in ask to Jayson, to you to back going

Jayson Bedford

Yes, sorry.

Susan Morrison

Thanks. okay. That's

Operator

moment One for [Operator next Instructions]. our question.

Wuensch with from Joanne Citi. comes next Our question

is line open. Your

Joanne Wuensch

that force decide, And of which on of you'll How is, so market as selling going sort to I'm previous you. day? get Thank is X. difference between as t:slim addition and just thing with your which Mobi part of my it's one well be to two sales does the evening. that and only Good Libre season, then going the the GX season X. around head

John Sheridan

t:slim market. So add be to GX the we Libre Joanne, XX to understand. Right And going to have X XX. capability I want t:slim just the we now, X I sure are and and on for

be providing to use can the to a current new we can as So sensors software base actually update update, they market. that these come so will they installed

that about are product on the in is which because right been t:slim just the future. to years And going t:slim working preserve that's we on upgrade of to it's now. out near something essentially make for here it's just XX, market XX XX sure life We that's the coming t:slim to also and be a technology the the

So I number sure sure I'm that not But I will skills, capability, you're microprocessing when asking. if as be just of question think the our upgrades capabilities well. I understand to enhance did. there's technology a I want the

Joanne Wuensch

trying many to as the you get this say it around the is I answered did. probably as about at I'm it. how of half you're X But things my of year clearly coming Yes, t:slim year? end didn't the just you in talking also. out second new head

John Sheridan

products. right four we new have Well, now,

that's relatively future. really Source, near in talked the about coming we here We haven't is out And which that something have Tandem much.

quarter. As we integrations, expect the with sensor scaling third in two GX, for future launch talked the Mobi. here we near start And waiting we'll of on then start in the launch the and approval to we're about scaling that

four in of we really fourth it's it's from that now. months And happening will sorry, here to to products out the the but But there XX be in It about -- marketplace. next when the and quarter XX product going t:slim the to been XX it's specific third be haven't at probably we're out this available there's time. so Tandem fourth looking year. is

Joanne Wuensch

Thank much. you so Perfect.

John Sheridan

welcome. You're

Operator

question. next our for moment One

Our next from Stifel. comes question with Blackman Matthew

open. is Your line

Mathew Blackman

just that Thanks some everybody. doing right, start, was sure for on with time. something I'm to if pumps, But not renewals, for picture clarification X,XXX something Good in question I've taking we're XQ one number Leigh, question. got you metrics at approaching the my a then neighborhood. bigger question. and us different this and Maybe, play gave afternoon the math to Leigh

some a Brian. of guess probably for Just And cohort I some a and/or is sense offices, follow-up but untapped X still type hoping still in a intensive and in then of it a of large there. be care And apologize. you PCPs. I strategy some know but I what starting high-prescribing you aren't like? that the frankly, to you'd go so, there, capture now, docs help you'd deeper why opportunity, look if use broader this could target was opportunity seemed And primary I obviously sort be any initiative of an lot X that today, you that? endo insulin give There's do channel. wouldn't John to need and if your that type and in already? that Thanks, us that than question, a be there's and

Leigh Vosseller

we've renewals be information response I continue I'll renewals you strong. the is quick give question. The that Yes. shared a to that to thought,

at which And with even rate was important that year, first last the again warranties this note it consistent convert quarter what's is customers when expire, we to so quarter. the

to a they comparing with healthier want to today, their the about customers little what product, product. our they bit we're that to how challenged, which our is really it really They environment and more So a service and everything stick -- lot love but says want a they seeing we offer. love own customer

the from the information piece decline number fourth the -- the renewal another new quarter, for population be useful. the of for and to same of population. sequential might that both shipments it the terms the In I mentioned approximately was first pump quarter

But expect so as what of the the majority. we And still pumpers that ship year a throughout we number each percent the be and becoming opportunities grow. quarter, are to will continue renewals new bigger of

so And you trajectory. help understand information renewals of hopefully, a to the that's little bit

John Sheridan

don't Brian, the why question on physicians? you primary take care

Brian Hansen

territories into a desire of space CGM aggressively. Yes. those with a We about when a our or inquiries do therapy partners have our they care say PCPs get several pull pump well us to where certain Tandem. their pump start that that who there more all on. have physicians would they with moved into work very And they primary of closely to is work with patients, as And meetings. the I opportunity definitely call do We see percentage to like interact company of

future and more Xs type it will education endocrinology And the X our the primary with certainly getting spend their therapy, with learning trained as start our of physicians bigger type to centers like where predominantly probably time pump the support with But that is big clearly, grow aggressively strategy look more frankly, patients in time them quite products, Control-IQ is as explaining comfortable that, we diabetes piece about see sitting on become our the becomes to who we in just and more at of spent our in majority and in interested office. a care in future we we space. to anyone would

Mathew Blackman

you. All right. Thank

Brian Hansen

Yes.

Operator

One question. moment our next for

next Joshua with from Jennings TD Our question Cowen. comes

Your line is open.

Joshua Jennings

sets sense pump And infusion I pharmacy one reservoir Tandem for within good Hi, patient to the to CGM questions. ask about the confusion channel? or CGMs per their the accessories for that the follow-up. afternoon. t:slim less and XX on channel? the for using the through and them taking Wanted DME benefit Then, than pumps have Thanks cost pair DME related is patients month access can $XX. with Does include expenses and

Brian Hansen

take I'll one. that Yes.

just the of or infusion necessary to operate over So the less that portion only And sets as in cartridges therapy is the is well month strictly through sets not time as and pump does out the spread DME cartridges infusion factor $XX the are per available channel today. system. CGM the their

Joshua Jennings

Can CGM DME down pharmacy CGM? for costs instead through the cut of the Tandem their to patients on their benefit access

Brian Hansen

they hesitation They the Absolutely. it it pharmacy benefits available they have no channel. separate if get if and them. for can to their through in those that or supplies for them, their to works there's want a conjunction with those get two it, choice do allow pump If

Joshua Jennings

on just Great. challenging. Control-IQ positive well very And aware cross-trial algorithm, you're feedback of sometimes then get feedback, clearly, the the endocrinologists on just and all as comparisons checking with we being

a And can your to So you competition? the formally of in be stake Would investing thinking kind my about put remind then the the us of the that worthwhile one, enhancing in ground head-to-head solution? against the at map is, was are how of trial Control-IQ algorithm premier question Control-IQ you go? just the algo road

John Sheridan

sure. Yes,

on a XXXX, have the just have because feedback And on since I when our But that universities and established been work relationship been certainly, capabilities And it with we internal and other and we be have that the we we expanding run that relationship we to to of where been time. we to just and get since since working algorithms, just initially. XXXX capabilities was develop are with to -- we on the performance first ought ideas establish have continue number TypeZero. the We significantly didn't better then. heading. and to studies clinical institutions improve knowledge and think

run that, sometime next we say inform second be know, study And would will Control-IQ. next-generation you study going a to we to approval that I would for to for be year. features clinical our So that, right what underway that study -- have system. clinical get certain required probably evaluate would as now We -- pivotal that would expect that's be

more of I the a there's experience of some the just the And past simplification in improve the do think then the I to of we've that and just algorithm just about bolus workflow have aggressive. things personalization. key been -- talked number we that think features make potentially overall can

get are. right that's working what we're study, more specifics about what to And define the think we'll now. closer that talk on pivotal I as a So we

next working smaller X.X. larger cross-section enable going In system, broader I Control-IQ to a going addition working that, the sometime features we that, to to we're of this closed-loop but in a and that's But will beyond the getting children really fully it, is now and mass X.X. work ultimately probably will that's to on the I And on, be that. big And in are are use with that is also year. younger call few there are that focused available we have to a of towards will body mean be a available out that Control-IQ and masses looking most body people an certainly, algorithm be time. we're of in period system, short going be also right that relatively time, on

Joshua Jennings

any to in with Great. the or head-to-head support invest And then technologies? competitive trial ambitious hold

John Sheridan

strong. we I the feel Joshua, information right of there's both as data the lot for data. stands think think, sort compete itself, clinical I of now, we clinical a And think data I well it's just quite and clinical And real-world well like out the there. from as

I don't about And I with So at we best that that think that. they the talk it, market. in people time, us this point certainly when our the device on to need think you agree is to the see do

Joshua Jennings

Understood. lot Thanks a John.

John Sheridan

Take welcome. care. You're

Operator

next our for moment question. One

Our next Bank Securities. from of with question comes Travis Steed America

Your line open. is

Stephanie Piazzola

the this Street but Hi, quarter, shipments about overall low how The Thanks basis. Piazzola Travis. for on on should is is U.S. for see Stephanie we sequential up wanted the clarification on the at pump a double-digits question. QX million. next revenue think $XXX Heard to taking

had EBITDA digits thoughts guide QX it in any like to on wanted you would margin then seems see it of if And mid-single negative QX. the flat be So previously, there.

gotten wondering was that's So if And before? so, worse versus I if why?

Leigh Vosseller

Stephanie. question, the for Thanks

in with QX. starting sales So worldwide

which pump to the right important people what have market expectation really that's anticipation noisy information us. about for think that the are get compete we very in out It's will until it's biggest competitive coming exciting against. newest but that a the feel now. shipments drivers, really would market, was we around the think of one And really which to than second products where could corner because be is effectively just we product the starts I U.S. it temporary. some And softer of it's quarter, think the I expect an ahead trend

how The the the distribution center impacting QX expectations really outside year. other think U.S. transition that the the I important understand is for to is is piece about

first for guidance it's So given year heavily had originally, said and quarter. only in $XX the the that million the I

from often $X I headwind to a are where also they in which note quarter, take now expectations think the that million it's I think So will will important second be that, today.

we be after quarter. think so that the about, QX talking that And what cautious everything the we're convicted just can we we items, But step second into half environment second they're feel achieve in feel all we temporary we like want and see we as that I to we're the and in.

just from the your EBITDA. OUS that market. To A is of lot translating happening question the about what's

the it like. like quarter quarter. expect we the EBITDA it first look in So you looked as about think influencing the we're but looks second to what that sales managing like are trajectory, sales in really What closely what and costs, it's the

get sales So once EBITDA transition, we that start more pump track the to year. across past to closely to

the to fully do we to third half and back the for so expect in back And positive quarter be of year. the

Operator

for our One next question. moment

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

Alexander Nowak

questions the and that Okay. on does FDA that the forth you that where have submission. Mobi clock? [indiscernible] the and been Great. discussions? the moved Good kind just is been Has of raised, back afternoon everyone. One soft Just any Have latest there into stand? labeling

John Sheridan

a difficult that's on. past, constructive. in though, say would responding And basically I actually it's It's to -- quarters, time to point would take a couple would approval. we the in exactly get say in we're and right, FDA a when a be and it's additional that right because we're testing with like see said some expect process I there answering dialogue might it's to going in that which, where that the we we've there's them cases, questions, now. from lot -- having that, think We're we're I constructive some things it's at more -- of encouraging the as last of the questions predict activity

take we received us and in on preparing the happen have organization the half time this the the from device to will market is that's And a that going clearance. of it so actually the year, roughly to the quarter second

Alexander Nowak

Okay. the doubled. in about And you doubled but at revenues expense hasn't you look That the operating makes have I size the operating cost base past, if XXXX, the then the that versus sense. you've talked well, lines that, guess, cost of base,

happening enhancements coming. Now you're of lot product the for a new ready also two years, last but has I a know lot been getting

we're mean, the when thinking lot over margins online? new so next come I start year that how about efficiencies quarters, couple or to we and So close we're of a just And me at drop get help a of line? products should next to start the free these away. bit back Should further now this territory to bottom little positive that cash flow but pretty

Leigh Vosseller

Right.

start So transition I'll is that just the the pressured by orally this first outside year half in we're this U.S. seeing of

positive is one our past What the EBITDA us points biggest that's quarter upcoming on quarter. being spending. preventing from pressure So this an that takes line this it for we're prudently managing and of

right the where not right make the we and where the importantly, are now, to for can we're closely efficiencies, longer more looking only at where we're dollars, find very our putting investments but for places and term. So --

the into to more services continue the but something on physician can like be facing create we will also that's experience come their And can -- focus very lot patients or practices today will solutions. So it lot offer product the new only and retail from Tandem we opposed a digital and as a of human required And customers the interaction. with to play. that's not how internally we offered in a a perspective efficiency helpful moving more that our of really where automated to closely as Source

create up. for confident And within those so expense drive biggest help of longer achieve remain us our And efficiencies still the the margins one can line our that as term we we to long-term operating opportunities we there. look to forward, that's objectives

Operator

from we Mike And final comes have Polark with Research. our question Wolfe

Your open. line is

Michael Polark

in performance and know And products about afternoon. Or Hey, now? years? sensor as for of this? could algorithm have Libre? that sorting early questions. any the Dexcom out and you you of quality some might this performs question the Thank Do Are kind bring a with speculate you the taking about good flavor if are kind sensors Control-IQ whether your what's own paradigm. three two, state the have that emerging, you similarly future pumps I there variances eventually of indifferent? Or one, be you for

John Sheridan

sensor, Abbott think it I confident and I perform Control-IQ. well feel evaluated very we that will with think very the carefully that we've

the as we session soon the -- actually as to sensor power We data plan to the we will inform system using on sensor and initiate Control-IQ.

we So work is system going the to have that well. confidence

there the to happen here some simply I whichever is going a sensor you comes And it touchscreen that's to people be people gives the to And personal system, just is think mean other. I on people choice. give what's I the I that prefer. to you'll just will I be over just and choose able it down preferences. think idea one sensor prefer choice. a mean, think just a

Michael Polark

instead and Is that why change change? in some will Or breakout follow-up. now boring other not, And there Thank the a materials? be you. of infusion permanent? And sets if Reporting cartridges. supplies a

Leigh Vosseller

Sure.

right. We frankly, make this been cartridges and of quarter. unnecessary between that seemed it You're detail. did And consistent like infusion change so level relationship an that has the

really sales, patient. follows way the the see has it So to tracking, cartridge been just Xx and can about you of use usually the set sales it run infusion that X.Xx pattern

there's a So not lot of there. variation

Michael Polark

you. Thank

Operator

Thank call. you And participating. this today's for concludes conference

now disconnect. You may

Tandem Diabetes Care (TNDM) 3 May 232023 Q1 Earnings call transcript