Tandem Diabetes Care Q1 Earnings Call Highlights

Tandem Diabetes Care NASDAQ: TNDM reported record first-quarter pump shipments and sales for 2026, while reaffirming its full-year outlook as the diabetes technology company advances a shift toward pharmacy-channel reimbursement, expands direct international operations and prepares several product launches.

President and CEO John Sheridan said the company delivered “strong financial and operational performance” in the quarter and is focused on modernizing its commercial operations, reshaping its U.S. business model and introducing new technologies. Chief Financial Officer Leigh Vosseller said Tandem achieved new first-quarter records with more than 29,000 pump shipments worldwide and $247 million in sales.

Record Q1 Shipments and Sales

Vosseller said U.S. pump shipments exceeded 19,000, representing approximately 10% year-over-year growth. Renewals accounted for more than 50% of shipments, while new starts were primarily multiple daily injection patients, representing about two-thirds of new customers.

U.S. sales totaled $161 million, up 7% year over year and the company’s highest first-quarter U.S. sales total. Vosseller said U.S. results included an approximately $1 million headwind from adoption of the company’s PayGo pharmacy model and slight pressure in infusion set sales related to shortages from a key supplier.

International sales totaled $86 million, up 3% year over year and the highest international sales quarter in company history, aided in part by favorable currency dynamics. Tandem shipped more than 10,000 pumps internationally. Vosseller noted that the prior-year first quarter benefited by about $5 million from the timing of distributor orders, creating a tougher comparison.

PayGo Pharmacy Transition Begins

Tandem began executing contracts in March for its pay-as-you-go, or PayGo, model in the pharmacy channel, covering both t:slim and Mobi pump supplies. Sheridan said the transition changes how healthcare providers prescribe Tandem products, how the company services customers and how orders are processed and fulfilled.

The company said formulary coverage has increased to approximately 40%. Vosseller said fewer than 5% of customers ordered a pump through their pharmacy benefit in the first few weeks of the rollout, and less than 5% of the installed base purchased supplies through the channel. Pharmacy sales represented 6% of U.S. sales in the quarter.

Vosseller said Tandem still expects about $350 per month per patient for supply orders under the model, though she described the figure as a modeling assumption given the early stage of the transition and varying rebate structures in contracts. She said the company remains on pace with its pharmacy access goals for the year.

Product Pipeline and Launches Advance

Sheridan highlighted several product and regulatory updates. In March, Tandem Mobi became fully available for use with Android smartphones in the U.S., expanding access beyond iOS users. Sheridan said Android represents “a big opportunity” and a meaningful addition to the portfolio.

In April, the company received FDA clearance for Control-IQ+ for use in pregnant women with type 1 diabetes, making the t:slim X2 and Mobi the first and only commercially available automated insulin delivery systems cleared for pregnancy in the U.S., according to Sheridan. He said the company is also awaiting CE mark for the indication in Europe.

Tandem is preparing to launch Abbott FreeStyle Libre 3 Plus integration with t:slim in select European countries in the second quarter, with broader rollout through the year. The company also plans to begin commercial rollout of Tandem Mobi outside the U.S. in the second quarter and upgrade t:slim and Mobi for compatibility with Dexcom’s G7 15-day sensor.

Sheridan said Tandem plans to file a 510(k) submission in the second quarter for Mobi Tubeless, an infusion site option for the existing Mobi pump that would allow users to switch between tubed and tubeless wear on one platform. He described it as Tandem’s first tubeless pump offering and said the company remains on track to start a pivotal study this year for its first fully closed-loop system.

Margins Improve as Guidance Is Reaffirmed

Tandem reported non-GAAP gross margin of 55% in the quarter, up nearly five percentage points year over year and the company’s highest first-quarter gross margin. Vosseller said the improvement reflected pricing discipline and product cost improvements.

Operating expenses were $154 million, essentially flat year over year, as a slight reduction in research and development spending offset increased commercial investments. Adjusted EBITDA was approximately 1% of sales, and operating margin improved to negative 7% of sales. The company generated $5 million in free cash flow.

Tandem also completed a convertible debt financing in February, yielding net proceeds of $276 million at 0% interest. The company ended the quarter with $570 million in total cash and investments.

For 2026, Tandem reaffirmed its guidance for worldwide sales of $1.065 billion to $1.085 billion, including U.S. sales of $730 million to $745 million and international sales of $335 million to $340 million. The company expects full-year gross margins of 56% to 57% and adjusted EBITDA of 5% to 6% of sales.

For the second quarter, Tandem expects worldwide sales of approximately $255 million, including U.S. sales of about $175 million and international sales of about $80 million. Vosseller said second-quarter margins are expected to remain consistent with the first quarter.

Infusion Set Shortages Remain a Near-Term Issue

Sheridan said Tandem continues to work through infusion set shortages caused by capacity challenges at a supplier, which began in the fourth quarter and continued into the first quarter. He said the shortages affect only a small number of SKUs, but the impact on affected customers and healthcare providers is significant.

The company is working with the supplier on what Sheridan described as near-daily calls and is offering alternatives where possible, including different lengths or colors. He said the issue may not be resolved for “a quarter or two,” though Tandem expects to see progress in the second half of the year.

Vosseller said the impact was modest in the first quarter in both the U.S. and international markets, and Tandem has factored a similar level of impact into second-quarter expectations.

About Tandem Diabetes Care NASDAQ: TNDM

Tandem Diabetes Care, Inc NASDAQ: TNDM, headquartered in San Diego, California, is a medical device company focused on the design, development and commercialization of innovative insulin delivery systems for people with insulin-dependent diabetes. Founded in 2006, the company introduced its first product, the t:slim® Insulin Pump, in 2011 and has since built a portfolio of next-generation pumps featuring touchscreen interfaces, remote software updates and integrated continuous glucose monitoring (CGM) capabilities.

The company's flagship offering, the t:slim X2® Insulin Pump, is engineered to work with leading CGM sensors and features automated insulin delivery algorithms that adjust basal insulin rates based on real-time glucose trends.

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