Diabetes technology company Tandem Diabetes Care (NASDAQ: TNDM) beat Wall Street’s revenue expectations in Q1 CY2026, with sales up 5.5% year on year to $247.2 million. On the other hand, the company’s full-year revenue guidance of $543 million at the midpoint came in 49.5% below analysts’ estimates. Its GAAP loss of $0.30 per share was 31.6% above analysts’ consensus estimates.

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Company Overview

With technology that automatically adjusts insulin delivery based on continuous glucose monitoring data, Tandem Diabetes Care (NASDAQ: TNDM) develops and manufactures automated insulin delivery systems that help people with diabetes manage their blood glucose levels.

Revenue Growth

A company’s long-term sales performance can indicate its overall quality. Any business can put up a good quarter or two, but the best consistently grow over the long haul. Luckily, Tandem Diabetes’s sales grew at a solid 13.6% compounded annual growth rate over the last five years. Its growth beat the average healthcare company and shows its offerings resonate with customers.

Long-term growth is the most important, but within healthcare, a half-decade historical view may miss new innovations or demand cycles. Tandem Diabetes’s annualized revenue growth of 13.7% over the last two years aligns with its five-year trend, suggesting its demand was predictably strong.

This quarter, Tandem Diabetes reported year-on-year revenue growth of 5.5%, and its $247.2 million of revenue exceeded Wall Street’s estimates by 3.2%.

Looking ahead, sell-side analysts expect revenue to grow 7.5% over the next 12 months, a deceleration versus the last two years. Despite the slowdown, this projection is above average for the sector and indicates the market sees some success for its newer products and services.

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Adjusted Operating Margin

Tandem Diabetes’s high expenses have contributed to an average adjusted operating margin of negative 10.1% over the last five years. Unprofitable healthcare companies require extra attention because they could get caught swimming naked when the tide goes out. It’s hard to trust that the business can endure a full cycle.

Looking at the trend in its profitability, Tandem Diabetes’s adjusted operating margin decreased by 7.6 percentage points over the last five years, but it rose by 7.5 percentage points on a two-year basis. Still, shareholders will want to see Tandem Diabetes become more profitable in the future.

Tandem Diabetes’s adjusted operating margin was negative 7.1% this quarter.

Earnings Per Share

Revenue trends explain a company’s historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth – for example, a company could inflate its sales through excessive spending on advertising and promotions.

Tandem Diabetes’s earnings losses deepened over the last five years as its EPS dropped 27.1% annually. We tend to steer our readers away from companies with falling EPS, where diminishing earnings could imply changing secular trends and preferences. If the tide turns unexpectedly, Tandem Diabetes’s low margin of safety could leave its stock price susceptible to large downswings.

In Q1, Tandem Diabetes reported EPS of negative $0.30, up from negative $1.97 in the same quarter last year. This print easily cleared analysts’ estimates, and shareholders should be content with the results. Over the next 12 months, Wall Street expects Tandem Diabetes to improve its earnings losses. Analysts forecast its full-year EPS of negative $1.40 will advance to negative $0.54.

Key Takeaways from Tandem Diabetes’s Q1 Results

It was good to see Tandem Diabetes beat analysts’ EPS expectations this quarter. We were also glad its revenue outperformed Wall Street’s estimates. On the other hand, its full-year revenue guidance missed. Zooming out, we think this was a mixed quarter. The stock traded up 10.9% to $20.50 immediately after reporting.

Big picture, is Tandem Diabetes a buy here and now? When making that decision, it’s important to consider its valuation, business qualities, as well as what has happened in the latest quarter. We cover that in our actionable full research report which you can read here (it’s free).