Earnings call transcript Q2 2023

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Operator

Thank you for standing by, and welcome to Tandem Second Quarter 2023 Earnings Call. [Operator Instructions].

I would now like to hand the call over to Executive Vice President and Chief Administrative Officer, Susan Morrison. Please go ahead.

Susan Morrison

Thanks. you Tandem's thank Earnings Second and Call. everyone, for XXXX joining Quarter Hello,

today's forward-looking time will reflect a date. and discussion As reminder, of as include performance operating about today's events, speak only financial management's future statements. product and development lines and plans expectations statements These

in materially There results factors release projected these earlier Factors from is of our on results forward-looking in Form statements highlighted different our differ are statements. forward-looking that to that from elsewhere and quarterly implied materially and A and in actual most Risk and other cause our the uncertainties of could SEC XX-K, press our annual report on actual cause Form those issued be filings. risks under list or any expressed recent in could today report to anticipated those portion XX-Q or by

forward-looking of Non-GAAP other investors of operating We discussion number we update are obligation that as references to measures. and any publicly of or give to provided indicative events measures whether information believe future a performance GAAP result business our assume non-GAAP to and factors. our also reflects ongoing is information, include financial statements a financial core will no our operations. Today's new

better in prepared GAAP to their Center refer of these considered measures results as a be not of of directly for report Form comparable We independently our periods. reconciliation Please on XX-Q financial and operating GAAP. our portion financial superior the information with facilitate Investor earnings to to quarterly release, believe these measure. most website should presented Any comparisons a measures non-GAAP results non-GAAP across reporting accordance or substitution

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

[Operator we'll questions. remarks, prepared their Following Instructions]. take

you're to welcome begin. John,

John Sheridan

improvement of our Thanks, and particular. adjusted performance the and execution year the proud and profitability quarter I sales achieved half as EBITDA. the operational our in second we today's Tandem's returned call. on expectation business. in exceeded We everyone, Reflecting positive of am welcome, to our demonstrating to Susan, first the across while target

exceptional X the with integrations starting Tandem sensor of by innovations recently, and of of milestone for launch Tandem Source, the most We our clearance new progress new preparing the FDA exciting Mobi. also made product for rollout reaching

new segments their existing With digital delivering beyond optimize and care. solutions of customer are where additional these reach operate providing different X demonstrating they how today, products, our diabetes the to in in excellence into market we to we manage choice our and expanding new customers

in new with up sets for Reminiscent are devices exciting meet to of This having the Control-IQ when another first products reinforce market. period living of needs diabetes diverse the us of people portfolio fulfilling in in These and our that vision important the delivery. we a leadership unique also insulin company's of history, introduced automated

previously the that of during innovation of we discussed, turbulence wave be of highest launches customer the we to anticipate ensure term the we overall of second the level maintain XXXX. We market in year, into the in these this near the satisfaction scaling half months year the busiest that will and may throughout as create

it access new was t:slim for the customers XX purchasing before pricing promotional our than to of of backdrop, now new it With for and may year. deductibles we customers once impact relates timing remainder excitement purchasing program this building new $XXX it program clearance. introduced this becomes rather and Mobi particularly against decisions, Tandem have available a products Tandem Tandem broadly The is the to access the awareness weigh January. the for of Customer provides quickly in as Choice as $XXX Mobi to reset

with the new between of year. predict reduce the may This clears to said current seen the historically difficult the to the it's will sales product impact access time the this its the Having dynamic seamless product that, and helps and remainder availability. launches technologies that customers we've have provide for our FDA pausing on

reason, with guidance we XXXX, that competitive for and an increasingly starting reset our baseline and low prudent business. it's to a worldwide, environment the with in on focus For a expectations combination XXXX we while point for feel driving

for By establishing we so, sustainable pipeline. market-leading are growth, driven deliver doing path innovation a Tandem our by to

reputation experience system to services. This technology high-quality satisfaction. expand as stand in offerings the diabetes to rated of our terms offering solutions as on evident and we our fall, strong t:slim was in automated prepare of building this we're continues second XX As out #X overall quarter our and delivery decade the insulin customer

different with repeatedly having insertion reinforced angles the and infusion Association comfort directly in American spoke of and impact benefits health patients as Diabetes was Diego. here user how providers pump for the cannula recent the Providers materials took options I Scientific and place to experience. care importance their attachability their sets Sessions at San that patients of wearability, spoke This

and strategy they the our their comments importance and personalize multiple to system. customers how of need that of people enabling underscore These AID and that of systems aspects use wear they options recognizing how reinforce our

application Keep management global positive clinicians with Another highlight was Tandem was in of to data specifically mind, Source the our at demonstrations this that booth. mind. designed reaction in our is

they globally in June deploy comprehensive and so into it central out progress the plans months the data view thereafter. a our this country-by-country and insights a it began rolling launch provides basis with with We will reporting continue in to patient patients. States location on spot trends can these to to in use and critical United It coming put

Tandem Tandem For a be will by control even connected the which to with cloud Source offers and continuously Mobi, app. more meaningful smart mobile becomes HCPs, phone

see and this in customers For customers, streamline new adding important that trainings. and supply features enhancing platform the plan for experience it's to a build to around future we data, feature reordering by therapy our

level continue new likely launched States offerings partners high the entrants, currently experienced of the we that in of internationally. selling outside second quarter, some a both there's new the hearing have only more In activity distribution from against. diabetes U.S. began related is that United our which ADA and conference pump in as The to and we devices, about also pressure reinforced

with is an in meaningful. competition, the longer-term increase United our anticipated opportunity outside States Even

Control-IQ building t:slim has to in been XX shown Our still we immediate benefits awareness deliver early with and sustained of internationally. and populations, all stages are in the market

for pressures GX FreeStyle this product Libre increase the be the in t:slim term, the scaled beginning launch sensors we're new new advance X of own fall. Dexcom track integrations will United are that integrations. cautious our In external and may of launches, first which States with CGM near in XX a on

more decision that anticipate the that X sensor differentiator, a empowers user the users will be actions XX t:slim We interoperability will first not CGM Choice pump of sensor and integrations. to only a needs make it's is preferences. CGM true and best for than and the realization FDA-cleared their offer of

technologies first these systems and customers CGMs want market of We to of new is our It commitment with latest our to evidence have and a lot the and lead the takes being access of integration. to our CGM benefits new people systems launch their I'd partnership continued coordination an for of with AID more and like diabetes. their and to the Dexcom thank benefits to for Abbott as partnership systems. even to we living bring CGM integrated collaboration enable

computer. Libre in planning QX be QX. broadly be broadly integration Freestyle the Dexcom in-warranty international in the first all integrations launches X. for middle customers followed of will will to to and be FreeStyle we The GX by States, are In charge and updates for for be GX These be with of completed can part and offered the available a these to X DexCom personal Libre pump available from United integration software no

am as first delivery and likely therapy. of and to the automated pump living segment people in otherwise of of Mobi durable the technologies next expansion our smallest innovation. Redefined is to not way opportunity to the with new is pump world's a system. an Mobi diabetes, creating clearance a Turning devices new would for particularly proud is is leading our this of therapy. choose Tandem insulin bring of our to pump hardware adopt whole benefit miniaturization, category durable offerings our who I to it family insulin

choose Already, making algorithm. reported iOS the its renewal was dynamic X/X decisions who #X that and AID In they await pausing availability level the their this of are own Mobi control of for our new and of we're purchasing rated customer planted with experiencing some our wear customers. our multiple that small nearly size, quarter, to hearing reported from even options, second and future Mobi discrete sales customers leadership greater

Mobi with in This plan QX, on off have of thousands even limited and and followed call in Mobi's kick release center on up grown XXXX. broad FDA our We more launch availability clearance our enthusiasm our early scale signed of has by to website for more information following through availability. early a people

of the in the seasonality maximize their business along that right, before the is new platform the The work time a the as Launching goes customers is year. help due and benefits quarter their from our of U.S. demand a to time they with education associated doing and and already high which it at team. period end takes talented to physician clinical typical insurance sales reset our fourth significant in customer

This period. important launch even Mobi this a scaled more making is why during available through is

offerings. our these beyond to Turning near-term pipeline

site infusion an includes We Mobi for feature hardware are wear and our portfolio, patch continuing infusion which development work set, durable tubeless XX, for pump. a and our the cartridge t:slim SIG, extended

second We people study in control type the includes for using X a arm quarter. with clinically, diabetes are of active also randomized very which a enrollment began Control-IQ,

study We in-human fourth the are for to wear set, infusion trial for for clinical of extended the and in begin this year. also study our quarter a preparing set, first

most to mission-driven can executing that excellence, management. company. which blocks our experience have our innovation, It's product you and are in and relentless we the see, part operational therapy are confident of commitment well insulin we portfolio revolutionary As are of customer building exciting

we in employees like delivering hard on their fortune of in positioning XXXX and work thank these Tandem for navigating for I'd success. the how passion our to quarter. second is The team's are each

on for provide and turn quarter year. the I'd like and that, Leigh more over to the guidance With our expectations to the call to information

you go, Here Leigh?

Leigh Vosseller

John. you, Thank

As portion website. the on release be I'll discussing GAAP as financial today well earnings Center found be today's as a a Reconciliations reminder, to unless in can Investor otherwise metrics noted, our of the on non-GAAP basis. are

record a people with second We our base quarter insulin using installed XX% representing year-over-year exited pump, growth. nearly XX worldwide t:slim the XXX,XXX

the $XXX in execution, worldwide quarter with XXXX XX,XXX our second expectations performance was with operational portray outside in million Like to not States advancements continued to in as Our particularly our over adequately pump it relates line generating pipeline. the United our sales comparisons and shipments. first quarter, sales product do

Well quarter. in evenly in over has were with by XX,XXX split shipments second new customers million driven the and compared of customers be MDI In the sales $XXX and to quarter the sequentially to source pump XX% continue almost the by between first remains shipments competitive when quarter broken new Tandem U.S., the these conversions. to increasing to

We see an on total increased which of with continue to shipments, consistent a quarter have increased as rate each strength shipments from expirations. percent of capture number warranty a renewal

renewed satisfaction customer and loyalty expirations We quickly a more to have more of than reflecting than our years of XX% our with XXXX high XX% achieve base. past, already pace the

the This in warranty the our compared customers approximately to by growth puts supply base prior installed our sales XXX,XXX, at of U.S. in XX% driving year.

XX% we in than growing year-over-year the shipping United XX,XXX our the nearly in and second generated XXX,XXX. operations our outside pumps States, sales to to $XX base installed million quarter, more Turning

is now have in to OUS sales they react transition meaningful approximately implementation our the center, second it as quarter to business the to chain fluctuations impacting quickly million operational going were approximately the from transition, supply facing allows in of very sales. more headwinds them our in to XX% distributors related challenges which provides European and $X We to supply the relief mostly This support the experienced to We forward. will sales distribution demand. our completed

within It with growth, will financial our our visibility align which operations results. that true our also reported creates own closely into business more efficiencies provides better

total in roughly year-to-date X/X sales impacted supply were scale-up center million with sales. approximately OUS attributed $XX the Our associated distribution by of with headwinds to a new million of $XX

Turning to margins.

percentage gross sales of Our in X This year-over-year. was points nearly margin XX% second the quarter. an was of improvement

to consumed biggest the We of all high-cost was improvement contributor raw margin now acquired gross in which the have nearly single year-over-year. XXXX, our materials

not much quarter sales, passed quarters impact. impact second than we modest the do at X% was The material less than future of in any more and anticipate

mix first We more driving improvement. favorable increased the points margin quarter also versus X percentage of than improved this gross product in with quarter. the in the by the our the to from XX% margin gross Comps majority second XX% quarter sales first of

first second expenses first unique R&D charges, against expectations of sales quarters, our the quarter. items the from $X marketing we We When also certain such by outperformed adjusted second X% improved in investments at and consolidation and balancing as the cost in excluding IP profitability EBITDA quarter, to in effectively facilities returning million efforts. and R&D management operating

has accelerating incremental X% from R&D have our to The and our year. quarter spending area quarters of the in support no in effort compared and as been the fact, acquisitions In Biomedical recent cost represented in of we Medical driving operating AMS invested in our prior in pipeline. cost growth Capillary product approximately greatest of sales this

will The environment. the we an waves inflection in we half quarters positions drive met we unique XXXX beyond. introducing of proud are the first us innovation few our In that well expectations in of all, year OUS and growth in be that this next challenging both for and in the rapid and to U.S.

with greater well as timing worldwide. John discussed, near traditionally back-end level recognizing the year we of increased sales of being the the the as noise our sales in and guidance prudent impact feel As competitive this to launches due comes a reset for may seasonality, is to as from the new of it visibility reduced remainder unpredictability year. With product term loaded our

full We that can for third a are even demand achieve in and $XXX sales quarter unusual worldwide of dynamics, million these minimum, confident we $XXX the the million with year. at

of affects availability purchasing timing customer greatest variables how the the U.S., is the decisions. Mobi of one For

Guidance from shipments the the line in dynamics, Factoring year sales supply to even this are expectation strongest of while full be back sales uncertainty, of quarter seasonality in in least reflects expected expected million. it U.S. least this half U.S. shipments the at at influence the in year comp first confidence is our step modestly with our QX. represent pump XXXX. with pump expected of the in is that will to these still quarter will and QX the $XXX results positively our fourth that for down with in be to million QX $XXX This

in third quarter, to in at a of impact full of full expectations and $XXX seasonality in the of our adjusting distribution U.S., from are we reflects with our million. conservative $XX second Outside the half potential improvement approach the year implementation million least QX more This following sales with center Europe to competition. year the balanced

for our to that this upon we against. experience have the U.S. experience Drawing much and selling in year, not last the we guidance U.S. think aligns new entrants with uncertainty change do consider some as our

XX% of the result expectations are changes we margin a year. in our sales revising these As to for expectations, gross full

million comp is and $XX P&L noncash $XX which with least $XXX but approximately our of remain EBITDA charges, lower revising with expect full half adjusted which to a associated depreciation. recurring the are to for expectations million our we to positive expected we the year, to revision in at the year at Also, be million, back This of includes slightly are breakeven. stock

our Considering XXXX. and also we this it feel overall early important is to guidance, sales reset for calibrate XXXX

implies which great million and more time, baseline We updates guidance, of months will learn that scale inform provide of would continue products. at on next deal in year, multiple revised will XXXX next particularly thoughts will off XXXX our that sales the starting a from than better we like Until growth launches for growth XX%, as our the there. to expectations we new X to sales set $XXX we

reach timing we our ago of in confident to the few product goals now to longer-term speed for uptake to of are evaluate a these set customers, we as the going achieve million for X remain withdraw targets but years our ability We the launches. near-term

are achieving XX% the goals operating and and set correlated our adoption gross also XX% Our and Tandem margins for unchanged to Mobi remain largely of study launches.

expectations. to reduce risk the clear, be with taking today guidance actions are external To we are

connection lead Tandem's By hundreds of high, benefits diabetes on doing be with diabetes the comprehensive most people portfolio in bring to with Our our worldwide. the management technology ability in and to thousands living Tandem's more mission remains of our space. so, we'll especially to executing

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

Operator

comes the & Company. first Instructions] of of [Operator question Oppenheimer Steve Our line from Lichtman

Steve Lichtman

Yes.

apologize. on was mute. I I Sorry,

of You recognized with do back advantage if And And take mentioned terms the in program QX embedded we what's does that expectations. and from half, about program? coming is in as benefit line potential get assumed in the that upgrade how think that? patients what of

Leigh Vosseller

Sure. Thanks Steve. for question, the

So the you've on basis, adjustments. much year, we past, looks is quarters make in a to what it's going what Tandem Choice of the will which this like see program, seen you're GAAP rest

have that year. how And based in is advantage Choice many people any this program non-GAAP of there's We'll no on future. how sales change of the basis -- still our adjustment won't normalized of program. comparable reporting election Tandem still estimate the to to were accounting. so on there's we But before take And we would which of the part that be shipments, type pump our the will of report our

so of about that from provide And would or we guidance a it would perspective, pausing. particularly in benefit thought we when potential that didn't the any offset it factor

this at mind, level overachieve. with off the think was of which can baseline point, we we set the achieve in guidance or So

Steve Lichtman

new back OUS are new you Got half it. 'XX, and launches partner -- factoring Libre year? with next the terms And the on then partnerships, including in the initial the in in comment CGM including the of your how obviously,

Leigh Vosseller

Sure.

At launch, this of the to all, to and excited the that time growth inflection we're future. contribute with X will first in So the us, interim opportunities work through new these availability that we have period. that, the in timing an for particularly believe provides of visibility super I'll Mobi market say about the the quarters in that that we in next with the dynamics, the and limited as we

in We're upside any not particular factoring those opportunities. for

forward opportunity something that as to And look being overachieve so could an that's to minimum guidance. we our

John Sheridan

we X.X understanding look inform quarters think to us basically XXXX also the have going enter rate with as better perform, these see of that's products I to like. growth might and how we what

Operator

question Our Barclays. the next of Miksic line Matt from comes of

Matt Miksic

Is much quarter as in it get sounds just revenue And much to And of expected? what of was just your expecting I'm very a want you on came love be Street with those spot your the to with there. of on kind for the kind the almost it drivers shaped the that's you with that I feeling were -- And this I follow-up of like very whether have and that kind quick some what wondering ask, So expecting. up adjustment. the QX I'd to then assessment? adjustments

Leigh Vosseller

for the question. Thanks Sure.

So second quarter, our in line expectations say not both but quarter, only first sales a came perspective. with from

the so forward. dynamics But track today, year. is so achieving And on of looking were got we at in our the well we it's launch, how where but the we're for this to -- we this not about with going goals Mobi what to change guidance are new much the

And the in this limited the it's to cause near the in just that visibility that Mobi much pressure might have term. how of anticipation market we

was and being half potentially thoughtful so the reducing pretty we're about risk And the just in very year of back that substantially. that the

low And really point or to set baseline. so this level as that minimum a thinking about we guidance back

Matt Miksic

and that and kind front, way the congrats that obviously, in was the talking Mobi half to approval, And nice certainly line very start the on much the those market. does And things like that first about reaching on out of of some wait product with No. wanting if and great. That's the get sort guide maybe other around, in even a of pausing about, other including little effects people to as excluding things talked these new of you've the of here of or words, circling bit. your baseline launches some those maybe

little of on you if elaborate in if that commentary the was included -- of bit launches in all very could beginning the or much QX maybe affect our that much guidance that how would the be we If you about color. is talk a you're is clear about this way point, does of it these a line don't QX have, at that's guidance numbers helpful thinking question, the super or really way QX until these

Leigh Vosseller

I think question. understand Yes, the I

measured the way the about that the so we're a to is launch the and And quarters. think approach launch across using scaled months the is

as from And the of upside new heavy so there not isn't availability opportunities. and much quarter, happening by for the well, then already I going of said, factoring to this year. in in have we're third be in any increased But be end will the quarter marketing -- particular, third

that those happening now products what's And minutes said trending. as reaction us better still quarter color starting to Mobi. time in the clarity the ago, a and give John more waiting gives for to people then are in or new are who right So the few market a that to we X evaluate can understand or might be how versus

Operator

Our question next of comes Chris Pasquale of from the Research. Nephron line

Chris Pasquale

'XX. back on the Leigh, Because guidance I back mean, seems timing the of what visibility today have Mobi go were I if in first when line the approval and didn't assuming that in and you adjustment for guided back I beginning of much you year? with look, you go what are you pretty the wanted the to at to factoring guys

big only year going now half back the play why pause is and why this and the out? factor So you shift to of in think the how

John Sheridan

relatively I'll say for expectations. period the a by and our it significantly one a things that approval, had conferences the And surprised since of been we've of time. exceeded of short So Mobi. just excitement it's the pleasantly But that we've couple just just FDA is

the sales talk when in X/X you force, second pausing experienced of already quarter. say the And that them to they've

also some dynamics to more to anticipated. just it's competitive what put we it back there And difficult the as where in going anticipate a pausing. Mobi is position I because think then really that revenue and in something like than And GX us is is half does it's So the Libre pausing, I think be well. this of we --

just just to to rather and I taking just, guidance, try trying public expectations. it's So than approach conservative we're reduce a we're risk guess, with think,

are a really and that that going the we're where are or we FDA at. We these that clearance us. new have deal And was excitement only of products unpredictability the good the certainly gone. a drive for confidence in fantastic XXXX with is great we news to uncertainty we think And had

We have we're and in complete these control, the great building weeks. seeing really within happening matter a are things momentum of And company.

Chris Pasquale

piggyback a the in as significant And then XXXX I'll couple people about on wait The maybe just pause comment your available. headwinds different for on fronts. of orders to XXXX. features now be international distribution anticipated Mobi change, pump

So would seem baseline. given math just growth an to from a that perspective, year above make XXXX trend the

that frame is what don't term. XX% growth expect might think above would the company do I long of you to kind you

help factoring us number like the new cetera? impact in right before et that's of even CGM So the why understand the options, things

Leigh Vosseller

Sure.

important would to the based So guidance the it indications in making clearly, appropriately. was not year. we we're XXXX we're that ordinarily we to be on on that But expectations make any changes this giving felt sure the managing early XXXX

So I even are say additive half available the them before call become the any opportunity. for we minimum to think the first against next the of this to these baseline first, is would or about year way

market. And products we these about the with very high can the so on we convicted still new feel achieve growth

it XXXX next get XXXX, sure But where the in to but we the this couple of felt quarters the change after traction of able at start in better get we'd the was -- visibility very help that uptake that time. we them to with kind and understand people we we've like important make to be of seen

Operator

next Matthew Our Piper of question O'Brien Sandler. from comes the of line

Unidentified Analyst

is This Matt. on for Phil

parse I little the market between as tube changed that the XXXG curious starters, on Just launch if was and pumps recent the bit product? it has relates further on pumps. view the to a of in perhaps patch that commentary, the launch, your anything you for on out could competition And the

John Sheridan

I No, think don't so.

things when seen I is you but the predominantly -- that's that we've about think in pressure, half past. the talked have what And first have stabilized. continued I think we

in the And quite spite so performed I think well pressure. that in we half first of

market these always think some obviously But there market. to -- of turbulence will new be new we while as now, coming is and are nearly happened the There's last to don't when devices meaningful what impact there as right products year. come that

like think so some there's think be we not modest was we last was what turbulence through we it I can And manage And expect it year. nearly that. to going

thing to going I happen driver pausing. this that is back cause is going real the of think going that's in the the to year the Bob half to real Mobi be of is pausing,

other reset And that that's coming about. this X really what all will but is I really about some think impact, devices Certainly, the it's are market to have Mobi.

Unidentified Analyst

sidelines quickly out And towards end, get that is at trying what thinking think just waiting That's about you looking are helpful. in? jump Mobi, look put I when XXXX how those there. And that cadence I'm full those patients and to to for that how pausing on 'XX, will to we you about the guess number overall market least at

John Sheridan

we I access we'll quarter, we do the hundreds said Yes. in into have mean, program. approach of scaled it. we plan to people move we early fourth as launch. early an remarks, what what an have -- and the using is measured internally We'll where And in have we prepared a

expected. so make sure be And to as we think is the that This it's that the something system at just best that cautious to first performs do going I we're thing to with move directed more we in in I XXXX. expect for our launch part to And the that confidence, commercial patients. early forward the grow as we think would a of company,

So it goes. -- and this is typically the way just

a I think going we'll aggressively the advertising and physicians upon marketing meantime, up in sort and XXXX training the we're the of it's to their off start gradually and ramping the as think XXXX. comes And so But increase ramp. start us, as well going deal I be just staff great Clearly, on messaging. the and to focusing in

Operator

Our next of question Jefferies. comes from the line of Matt Taylor

Matt Taylor

have hoping experience? to And with guess, you dynamics XX%? forecasting baseline you're I that pauses put less the you're that experienced expecting than launching greater it? why quantify than other here in Is the XXXX, than be in if more was or can if could you you've the aggressively competitors going I then wouldn't that context pausing or it be

Leigh Vosseller

Sure.

I'll So terms the give seen of spectrum ends I extreme of that say, you X on before. would examples, the we've causing in

the X a created very of first approval in market X, a XXXX, of XXG it back significant was quarters. for the and disruption The number

understanding it we it when we with in fourth also quarter We approval marketing wait. until even with of pump. the They copper felt waited people and and sell was on update, that the again still received Control-IQ XXXX free is available the -- a

And a pausing of of a extreme versus were those modest pausing. level of severe so level examples

is a without And even was out few the there we've a heavy Mobi mentioned, as approval so heard campaign very short high. enthusiasm yet just weeks since John interesting, marketing in

what might now, quarters. of And the be to forward of so are people can't pathway we be a gives And move program people certain trying we couple we able with this hope in and at to Tandem that considerate time. next Choice purchases that do but helps the be

say taking the And possible as And the an approach the reducing we're numbers. so XXXX. we're what I of in would doing much same for is risk as

us. and understand interest of the the and don't So ahead gather the better We information anyone while we get want to timing. this uptake

And upsides so from you products new see to a as we opportunities think of baseline a the thought you from level it minimum reset there. could prudent and as then at was could the it that

John Sheridan

the think just the variable, our fourth get is selling the It we sales And quarter, creates really half just revenue, that haven't to deal add having a of new particularly majority the we I I out force the deductible before. a the of device in and that in dynamic where of and seen market the with the year Matt, just would just reset. second

that to the in something timing does new And also just addition having it uncertainty as of product, well. creates it's the

Operator

question the of Lamar comes of from next Philippe Our line Citi.

Joanne Wuensch

in The have Joanne Number you from that adjusted It's I think XXXX? the one, EBITDA is do multifold. be what actually Citibank. question will

Leigh Vosseller

giving our level we expect but this that initiatives. over we not I to move as through say we're time, that guidance at profitability improvement So continue will XXXX of

nicely the management very to from first demonstrated I the efforts. so quarter, quarter And we second think our actually cost

opportunity satisfaction customers while Much customer efficiencies functions to keeping in how improve as with comes we to that interact our drive their levels from we automate continue mind. streamline, we additional continue and and go implement the we'll will that more still way And of forward. that service

And that expect will so tuned on but over XXXX, stay exactly improvement in look what this year. we can

Joanne Wuensch

is with Okay. please. And when Is that second bear pharmacy my to Is numbers in into they Mobi you question you're be my a conservative. selling put the have third, chance channel? together I'll were X so me, going there questions, -- originally, which the or maybe toss I there

supposed wasn't be to upside there any And from Mobi.

through So and now aren't those numbers halfway downside year, you're conservative from Mobi. the getting conservative

this, reconcile please? So help me

Leigh Vosseller

first pharmacy start question. Sure. with I'll the

by use certainly are pharmacy the channel. opportunity We as to an introduce ourselves to

we'll there, get I be we while time that it of some won't believe capability. focused. as So uptake it quite level very build some material and We're be probably won't for still

our commercial of all move by comfortable that we'll make the and we're #X that can sure our fact, unimpeded on is that. able to timing the to lobes be priority with that. accomplish so very D&E And we contracts, launch with forward today In

the And we is where so about so biggest solidifying really everything. of original the number, are today change think when the we timing the

on, fact the the activities back CGM you QX our that many and period the half so being potentially timing the same approved half time. and you launch. had clearance the have half which good the back the about Mobi The have with It's it very launches expectations for timing of preparing, for for we seasonal And we when challenging that made while so the was going first on in of at year, bad. of other top expected think with to any

on to -- we It's and as these have make sure it's stage want market availability. John important well because Mobi, And launches we important a explained for commercial is appropriately. us we that factor get whole full that new ready go form more when tested this even to to

how of was year the we would Mobi at product our it scale approval, that of level the what so the excitement other out launches. amongst And beginning this exact come the of timing did the would and the with

And a visibility. period so it limited of creates

as make see reset to to off a half as we people back today. point, to could us complete We've and do disruption factor have, we that cause no sure was say and the thought We in at reducing We in have not X is risk of there that's numbers just loud as believe now how where that the and numbers. the but struggle the Mobi and impact the anyway. basis next heard X level before significant of approach take quarters. that will it the and the clear have, plays are you for prudent the an possible to out ahead risk that of gets much that table And want could our potential in to taken this it in it

Operator

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

Unidentified Analyst

This on guide EBITDA on you Stephanie this I'm more hoping could bit is Travis. a for little for elaborate year. the

the down dynamics factor what breakeven full in of kind revenue the year wondering half? into reset for revenue the -- Just with second the

Leigh Vosseller

change reason Sure. hand was the the this we our cost guide tied hand. in still to go at that strictly They point The We efforts. EBITDA successful sales the will management in be continue in the only expect expectations. for change in to

flat the we And from can for spending now, about of today being think so back roughly the are year. through you where half

order need needed will well won't as as awareness. in though our product We marketing we as the we make as spend to projects also we R&D back think tandem sure we continue awareness as move forward. the And new driving hold to better

those at least so in can know factors we it with And positive. brings be -- mind, to EBITDA we

Operator

comes Alex the from of of Nowak Craig-Hallum. question line Our next

Alex Nowak

improvements Mobi the expect around supply question cost the a we that Just on side. with should

I what to there well about pump infusion XX% pretty what the on manufacture. know we perhaps you cheaper the is given think But previously redesign and just side? think the set cartridge come going I about and to said in on side the

Leigh Vosseller

Sure.

and launch. expect course to efficiencies be a of year over So from the clear, from pump those scale we reach the just up that to side,

And so over the course of XXXX, you'll begin to see improvement in gross margin.

business. Mobi results. actually it of gross the becoming see to us target. is we And bigger that installed margin But than a The that expect build bit will for see it the XX% manufacturing the that XX% start I benefit takes about next likely it as do to than -- lower reduction cartridges base think to longer to on to a halfway from our it costs. itself in before year. see won't a are you alone forward you'll to pump we manufacturing more look The costs. drives XX% piece time XX% greater And margin

Alex Nowak

And next just question to clarify sense. then to Makes I a want Okay. with year. regards

you've here the that As just will you additional Libre launch to start put last new what those that the make? the next as Or you position these X out to GX, have to Mobi spending expenses does ramp? nice we pausing years, of leverage done XXXX, really we dynamic integration, products into get see in over investments you a year and X need really

Leigh Vosseller

that's in road. to And move The way investments is spending well that have we'll continue what's to in our about is what down quarter and forward seeing everyone think what we in is you're expect you the pipeline R&D we you'll prioritize forward. the the going can of much last aware coming pipe like can happening product so see

marketing sure of we're make next our We to in we coming sure us. causing from about people activities heard, also well be shy the want especially will dynamics, voice to broad loud investing and these ensure our and make in is reach what's not know getting timing

facilitator. customer that us products functions. right a create is greater new saw in But now you beginnings much do of continue but It's even quarter efficiencies. our X The will to platform those of years expect service Tandem-source the to in which and X our come. today, about great to it's launch the infrastructure you we allows efficiencies haven't have this continued with spoken

that And that so improvement you'll to year-over-year is see continue cost serve. or in that's something to reduction

Operator

Our from of question Jayson Bedford James. Raymond next the line comes of

Jayson Bedford

Just may to I but about you shipments. the in missed have the it, move was renewals questions in sequential on renewals. And U.S. talked move think I U.S. sequential quarter, similar last

I renewals XQ? in sequentially. that so at guess, to think if fair U.S. a And XQ, XX% Is you the I here pumps grew in about move look sequential way

to a of as just terms the revision slowdown any out renewals? is in new parse what's question, fewer versus a And here, then users U.S. to there in related due way

Leigh Vosseller

proud get renewals traction I'll obviously the From second with, there. question. say obviously, we very great Sure. to perspective to in first that quarter, start I'm the a continue

both in comps. And renewal to so just and QX we clear, new from to QX, be increase an saw

last we're the and renewals The year. pumpers, growing new clip than rates bit increase that at saw capturing a we same people the in at faster

cycle so have back So until continued seeing half up we we're even in through in in of are past. the of rates what our would faster, I were capturing and we people, fact, challenges And improving the the some that we before seen say, moving we're XXXX, saw renewal renewal than earlier people now. years

in because to ago years a about from year. the as grows the than pumps increased XX,XXX we great not X opportunities more XXXX. year, rest that's for number you XX,XXX from And have people renewals X, of of next think again this only the U.S., It we sold

this way and over, for and thought see guide say over Mobi, little me traction. half about bit the because the you've back to different The year great we it's heard So of the with how. this a considering is

looked -- the What impact different at business. might it our of drivers have, we

So competitive those looked we consider have MDI And impact that on conversions, the we renewals. at populations. Mobi look we different at and X conversions, may

across general it's next available wait And for we of would them healthy coming necessarily to think may I did year. take just are all they movie from, reduction don't regardless to in X where what be in we early say, is the a people availability but factor board, to a across same the that

so And we into the together when took consideration something guidance. we that's that put

Operator

UBS. [Operator of Danielle from Instructions] by Please line the question. of Antalffy stand next for which our comes

Danielle Antalffy

market, of in to the here change this -- double-digit if insulin think has growth market any market from I with wanted an you ask call And and underlying internationally? that what the do U.S. adoption growth has it, like any perspective? the still in Or in is a, do you're in pump seeing from your a perspective, about to U.S.

Leigh Vosseller

Sure.

this X entire with the within to We quarter. expectations their right now released we having visibility we have only QX. have to considering in come everyone limited and our more market, we for So come numbers, did quarter for have

-- We still means What point. market speaking And we anticipated. with there growth, suggests that more respect our think overall say demand I'm right it's products. and see so I to in U.S. this OUS-to, for still hard is In the growing. market the that with at So and very big line to for high what now. right it's

there. the in haven't seen any changes we dynamics So

the But taken about some we think have conservatism year. of the half as we back

said cautious new just being here learnings is the the how it and our on U.S. many as Just based John in particularly in entrants are space, people earlier,

Operator

of come next Cowen. line the Our question of TD Joshua Jennings from

Unidentified Analyst

is This Ryan here for Josh.

new can, in a clarification. First, confirm outlook there will address included number, growth U.S. that. launches or I'm the to given the apart assuming Mobi inclusion you be you in XX% Can of 'XX for any just but guidance provided that I it's other in just the And exclusion if from XXXX, initially, wanted Mobi? U.S. I XXXX? product

Leigh Vosseller

launching which right inflection So the we now. comes way from the that products to all the think really, I XXXX, first would say, about are

benefit a So learn the based in lot get And about the they we'll XXXX, remainder just on the to more opportunities next a we're us drive going can timing. modest of for year.

I it we -- outstanding continued XX% this growth, say not in that I at believe the point, would category thinking yet. but can So we about level, would get put

we traction XXXX. it great X for those products continue the or to a inform evaluate the months, factor to And about in how we more next as the opportunities will get on expectations us deal in the

right people the cautious And be for make we're so keeping to a minimum want and the for available, now. we we be expectations managing to they and in expect them sure meantime set just do place but all will in

John Sheridan

in that's new. products And in 'XX, call, I would X we probably what 'XX to really our And just market that about that think now, product right time XXXX. to quarter these Ryan, we'll the I more and focused getting fourth we're expect frame to relative as talk on say

Operator

next of the Stifel. Blackman Matthew of Our line from question comes

Unidentified Analyst

the OUS from heard likely for Matt. rumblings, about This asked you've competition U.K. appreciate markets, is Colin of In the you've on various been distributors, your large in light including and I

a give the sense like you where these you in can at And other France the large think of pump size pump and market? markets step a But and Germany. taking the U.K. and the growth of penetration U.K. us back,

penetration? You said really broadly, that the be XX% I Any to be closer may assume in there to terms U.S. would but color of XX% for EU U.K. the helpful.

Leigh Vosseller

Sure.

going color. So I'm to of not provide a to be lot able

to expect large that still of than given it's opportunity other and market. talking a not OUS market level be haven't terms of any We do detail about in single our

That's In fact, twice the market. U.S. X the of the size underpenetrated. type where population we operate is

to a I room but We have fall of of category XX% get lot many in penetration, or of U.S. about a there near run talked few they would broadly terms or today. in until to have the an average is anywhere range say, the markets where are U.S. are XX% similar the that most, more to

that we -- look so one growth greatest our forward. that still is we of opportunities think as And

John Sheridan

the products not-too-distant we're mean opportunity, now of. significant in which to the that to these OUS advantage intend certainly growth we available will be A United States future. I bringing take

Unidentified Analyst

And the and how going to light of of kind new late the I launches, for wanted ask current product selling the what’s you’ve competitive your forward progressing product environment, in the light of Great. commercial count multiple the state And or year launches about also outlook multiple XXXX? U.S.? either the into in new in are Okay. team got things X of rep the U.S. in team sales

John Sheridan

their motivated. excited. the about physicians getting on just forward and Well, out products incredibly they’re getting They and it. their really looking I’d are talking these They’re say staff to hands to and

So now. very I’d motivated say team it’s a right

the near that that as headcount year. we always goes, of as evaluate think I far the end

a I to And We that’s point end haven’t and the see of again, made year it’s we’re at think environment. I look this – positive anything the about specific that comments doing. very how in But maybe time. think we’ll specific

and team, excited market. attrition, is we’re any I seen product motivated, as to haven’t very and the the said, We to get

Operator

you. Thank

participating. Tandem's further there As XXXX no be second to in call. conclude Thank for you earnings does questions that quarter queue, appear

You may now disconnect.

Tandem Diabetes Care (TNDM) 3 Aug 232023 Q2 Earnings call transcript