What Tandem Diabetes Care (TNDM) Said on Its Q3 Earnings Call

Key Points

• Q3 revenue rose 14% to $284 million, with pump shipments up 12% and gross margin improving nearly three percentage points to 57%. Tandem reiterated its 2026 revenue outlook of $1.065 billion to $1.085 billion.
• The shift to pharmacy distribution is progressing more slowly than expected, and its upfront-free PayGo model may weigh on revenue into 2027. CFO Leigh Vosseller called mid- to high-single-digit growth a “fair starting point” for 2027, not formal guidance.
• International revenue climbed 26% to $93 million, while Tandem announced that Jeannette Bankes will succeed retiring CEO John Sheridan at year-end. The company also expects an FDA decision on its Mobi Tubeless system in Q4 and plans to begin a pivotal closed-loop study by the end of 2026.

Tandem Diabetes Care NASDAQ: TNDM reported 14% revenue growth in the third quarter of 2026, as higher pump shipments, pharmacy pricing and international sales helped lift gross margin. The company also announced a CEO transition and signaled that a slower-than-expected shift to pharmacy distribution could weigh on revenue growth next year.

Worldwide revenue rose to $284 million, while pump shipments increased 12% to approximately 33,000. Tandem reiterated its 2026 sales outlook of $1.065 billion to $1.085 billion.

President and CEO John Sheridan plans to retire at the end of 2026. Jeannette Bankes will join Tandem on November 16 and become its next president and CEO, board Chair Beckie Robertson said. Sheridan said he would support Bankes through the transition.

Pharmacy transition advances more gradually

U.S. sales rose 9% to $191 million, supported by pump demand, pharmacy pricing and adoption of Tandem’s PayGo reimbursement model. U.S. pump shipments climbed 11% to nearly 23,000, and new customer starts returned to year-over-year growth.

Chief Financial Officer Leigh Vosseller said approximately 70% of new customers converted from multiple daily insulin injections, while renewals grew at a double-digit rate.

Pharmacy accounted for 15% of U.S. sales and approximately 12% of pump shipments in the quarter. Tandem reached about 50% formulary coverage among U.S. covered lives, meeting the high end of its year-end access target early.

Even so, Vosseller said adoption has proceeded more gradually than initially anticipated, partly because healthcare providers, customers and Tandem’s teams need time to establish new prescription workflows. She estimated that pharmacy would represent about 10% to 12% of both pump shipments and U.S. sales for the full year.

Under PayGo, pumps carry no upfront charge, creating an initial revenue headwind that is offset over time by recurring supply sales. Vosseller said net monthly supply average selling prices were closer to $400, above the company’s $350 baseline expectation, although she cautioned that the data covered only two quarters and relatively low volumes.

For 2027, Vosseller said mid- to high-single-digit revenue growth was “a really fair starting point,” rather than formal guidance. She noted that faster pharmacy adoption for pumps than for supplies could extend the transition’s revenue headwind into next year. Tandem remains confident it can shift almost entirely to pharmacy, rather than durable medical equipment distribution, by the end of 2028, she said.

International sales and margins improve

International revenue increased 26% to $93 million, or 27% in constant currency, with nearly 11,000 pumps shipped. Vosseller attributed the performance primarily to new product launches, direct-market execution and supply orders deferred from the second quarter.

Tandem began direct commercial operations in the U.K., Switzerland and Austria earlier in 2026 and said it was on track to launch in France during the week of the call. With France, the company expects to serve more than 30% of its international installed base directly, rising to approximately half by the end of 2027.

Third-quarter gross margin improved nearly three percentage points from a year earlier to 57%, reflecting pricing benefits from the company’s business model changes. Operating expenses rose 4% to $163 million, while adjusted EBITDA was 6% of sales, marking a fifth consecutive quarter of positive adjusted EBITDA. Tandem ended the quarter with $443 million in cash and investments.

For 2026, Tandem continues to expect U.S. sales of $730 million to $745 million, international sales of $335 million to $340 million, gross margin of 56% to 57% and adjusted EBITDA margin of 5% to 6%.

Product launches and closed-loop study ahead

Sheridan said Tandem believes its Mobi Tubeless system is in the late stages of U.S. Food and Drug Administration review and expects clearance in the fourth quarter. The product is designed to convert an existing rechargeable Mobi pump into a tubeless automated insulin delivery system using different supplies.

Pending clearance, Tandem plans limited customer use followed by full commercial availability in the first half of 2027. Its initial submission focused on abdominal wear; Sheridan said the company is working with the FDA on additional wear locations and insulin types.

Tandem also plans to begin a pivotal study of a fully closed-loop system based on the University of Virginia’s AIDANET algorithm before the end of 2026. Sheridan said the study is expected to include more than 300 participants and potentially as many as 400, with data available for an FDA submission by the end of 2027. He said the company would expect the product to reach the market in 2028.

The system is being designed to operate without meal announcements or other inputs while allowing users to make adjustments. Sheridan cautioned that Tandem has not specified whether an optional mealtime bolus will be part of the final feature set.

About Tandem Diabetes Care (NASDAQ:TNDM)

Tandem Diabetes Care, Inc is a medical device company focused on developing and commercializing advanced insulin delivery systems for people with diabetes. The company's products are designed to help automate and simplify insulin therapy while supporting integration with continuous glucose monitoring (CGM) technology.

Tandem's product portfolio includes the t:slim X2 Insulin Pump and the compact Tandem Mobi system, along with insulin cartridges, infusion sets, accessories and diabetes management software.

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