Tandem Diabetes Care delivered a first-quarter performance that exceeded Wall Street’s revenue expectations, with management attributing growth to stronger pump demand, expanding pharmacy channel access, and increased adoption of its new Tandem Mobi pump and Control-IQ+ algorithm. CEO John Sheridan highlighted that more than two-thirds of new U.S. customers converted from multiple daily injections, signaling success in reaching previously untapped users. The company also saw record international sales, driven by demand for the t-slim X2 platform and early renewal momentum in overseas markets. Sheridan stated, "We delivered more than 20% growth for the third quarter in a row, with record first-quarter sales in the United States and our highest quarter ever internationally."
Is now the time to buy TNDM? Find out in our full research report (it’s free).
Tandem Diabetes (TNDM) Q1 CY2025 Highlights:
- Revenue: $234.4 million vs analyst estimates of $219.4 million (22.3% year-on-year growth, 6.8% beat)
- Adjusted EBITDA: -$4.69 million vs analyst estimates of -$14.43 million (-2% margin, 67.5% beat)
- The company reconfirmed its revenue guidance for the full year of $1 billion at the midpoint
- Operating Margin: -51.6%, down from -21.7% in the same quarter last year
- Sales Volumes rose 14% year on year (-11.8% in the same quarter last year)
- Market Capitalization: $1.34 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions Tandem Diabetes’s Q1 Earnings Call
- Matt Miksic (Barclays) asked about disruptions from sales force expansion and realignment. CEO John Sheridan responded that territory changes were completed with only modest disruption, expecting full productivity by year-end.
- Mat Blackman (Stifel) inquired about the sustainability of recent price increases for pumps and supplies. CFO Leigh Vosseller confirmed that recent pricing trends are expected to persist, especially from durable medical equipment (DME) and early pharmacy channel contributions.
- Matthew Taylor (Jefferies) requested details on pharmacy channel uptake and its impact. Vosseller emphasized that pharmacy contracts are yielding lower patient costs and higher profitability, but indicated volumes and contributions will remain modest in 2025.
- Anthony Petrone (Mizuho Financial Group) probed the type 2 diabetes commercial launch and its inclusion in guidance. Sheridan and Vosseller reiterated that most 2025 guidance assumes modest impact, with structural access and reimbursement work ongoing, especially for Medicare patients.
- Danielle Antalffy (UBS) sought clarity on the path to 60% gross margin. Vosseller cited scaling of Mobi, favorable pharmacy pricing, and the transition to direct international sales as primary drivers supporting margin expansion next year.
Catalysts in Upcoming Quarters
In the coming quarters, our team will watch (1) the commercial uptake and patient conversion rates for Control-IQ+ in both type 1 and type 2 diabetes, (2) the pace of pharmacy channel expansion and associated patient access improvements, and (3) progress on margin enhancement as Mobi scales and direct international sales begin preparations. Additionally, the launch of new sensor integrations and early data from type 2 sales pilots will be key signposts for execution.
Tandem Diabetes currently trades at $20.18, up from $16.82 just before the earnings. Is the company at an inflection point that warrants a buy or sell? See for yourself in our full research report (it’s free).
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