Tandem Diabetes Care Announces Third Quarter 2024 Financial Results and Increases Full Year 2024 Sales Guidance

Tandem Diabetes Care, Inc. (Nasdaq: TNDM), a global insulin delivery and diabetes technology company, today reported its financial results for the quarter ended September 30, 2024 and increased sales guidance for the year ending December 31, 2024.

Third Quarter 2024 Highlights

• Worldwide GAAP sales increased 31 percent to $244.0 million compared to third quarter 2023; worldwide non-GAAP sales(1) increased 25 percent to $242.9 million compared to third quarter 2023.
• Grew worldwide pump shipments by more than 25 percent compared to third quarter 2023.
• Achieved year-over-year growth in new pump starts in the United States, including growth in new customers starting from multiple daily injections.
• Demonstrated positive Adjusted EBITDA and a return to positive free cash flow.
• Completed clinical study in support of a regulatory filing to expand the indication for Control-IQ to include people living with type 2 diabetes.

“The third quarter marked a milestone achievement for Tandem Diabetes Care as we delivered the highest quarterly sales in our Company’s history, both in the U.S. and internationally,” said John Sheridan, president and chief executive officer. “This performance, coupled with our strong operational execution, positions us well to achieve our remaining goals for 2024 and beyond, as we further our mission to improve the lives of people with diabetes.”

Third Quarter 2024 Sales Results Compared to 2023

From September 2022 through February 2024, the Company offered the Tandem Choice Program (Tandem Choice) to eligible t:slim X2 customers to provide a pathway to ownership of Tandem Mobi, for a fee when available. At the end of the second quarter, the Company began offering eligible t:slim X2 owners the opportunity to switch to a Tandem Mobi under the terms of Tandem Choice. As a result of this program, the Company is providing select financial results on both a GAAP and non-GAAP basis. Additional information, including the accounting treatment of this program and other non-GAAP measures, can be found under Table D “Reconciliation of GAAP versus Non-GAAP Financial Results” attached to this press release. See also “Non-GAAP Financial Measures” below.

 

Three Months Ended

 

 

Nine Months Ended

 

September 30,

 

 

September 30,

 

2024

 

 

2023

 

 

2024

 

 

2023

($ in millions)

GAAP

 

Non-

GAAP(1)

 

 

GAAP

 

Non-

GAAP(1)

 

 

GAAP

 

Non-

GAAP(1)

 

 

GAAP

 

Non-

GAAP(1)

United States

$

171.7

 

$

170.6

 

 

$

130.2

 

$

138.5

 

 

$

458.1

 

$

458.0

 

 

$

404.0

 

$

416.5

Outside United States

 

72.3

 

 

 

72.3

 

 

 

 

55.4

 

 

 

55.4

 

 

 

 

199.5

 

 

 

199.5

 

 

 

 

146.9

 

 

 

146.9

 

Total Worldwide

$

244.0

 

 

$

242.9

 

 

 

$

185.6

 

 

$

193.9

 

 

 

$

657.6

 

 

$

657.5

 

 

 

$

550.9

 

 

$

563.4

 

Third Quarter 2024 Additional Results Compared to Third Quarter 2023

• Sales: In the United States, GAAP sales included $1.0 million incremental sales relating to Tandem Choice compared to a sales deferral of $8.2 million. Non-GAAP sales exclude Tandem Choice-related sales deferrals or recognition. Shipments in the United States were approximately 21,000 pumps, which does not include pumps fulfilled under Tandem Choice. Shipments outside the United States were nearly 11,000 pumps.

• Gross profit: GAAP gross profit was $124.7 million, compared to $89.8 million. GAAP gross margin was 51 percent compared to 48 percent. Non-GAAP gross profit(1) was $124.3 million compared to $98.0 million. Non-GAAP gross margin(1) was 51 percent in both periods.

• Operating loss: GAAP operating loss was $26.1 million, or negative 11 percent of sales, compared to $31.5 million, or negative 17 percent of sales. Non-GAAP operating loss(1) was $26.5 million, or negative 11 percent of sales, compared to $23.3 million, or negative 12 percent of sales.

• Net loss: GAAP net loss was $23.3 million, compared to $33.0 million. Non-GAAP net loss(1) was $23.6 million compared to $24.7 million. Adjusted EBITDA(1) was $4.0 million, or 2 percent of sales, compared to $1.5 million, or 1 percent of sales.

(1) A reconciliation of non-GAAP financial measures to their most directly comparable GAAP financial measures and additional information can be found in Table D “Reconciliation of GAAP versus Non-GAAP Financial Results” attached to this press release. Also see “Non-GAAP Financial Measures” below for additional information.

See tables for additional financial information.

2024 Financial Guidance

The Company’s non-GAAP guidance for the fiscal year ending December 31, 2024 is set forth below. The most directly comparable GAAP financial measures are not accessible on a forward-looking basis due to the high degree of complexity in the accounting treatment for the Tandem Choice program. For a description of non-GAAP sales, non-GAAP gross margin, and Adjusted EBITDA margin, as well as an illustration of the reconciliation from the most directly comparable GAAP financial measures, refer to Table D “Reconciliation of GAAP versus Non-GAAP Financial Results” attached to this press release. Also see “Non-GAAP Financial Measures” below for additional information.

For the year ending December 31, 2024, the Company is increasing 2024 sales guidance and reaffirming other financial guidance as follows:

• Non-GAAP sales are estimated to be approximately $903 million to $910 million for the full year.
  • Sales in the United States of $645 million to $650 million.
  • Sales outside the United States of approximately $258 million to $260 million.
• Non-GAAP gross margin is estimated to be approximately 51 percent.
• Adjusted EBITDA margin is estimated to be breakeven as a percent of sales.
• Non-cash charges included in cost of goods sold and operating expenses are estimated to be approximately $120 million. This includes:
  • Approximately $100 million non-cash, stock-based compensation expense.
  • Approximately $20 million depreciation and amortization expense.

Non-GAAP Financial Measures

Certain non-GAAP financial measures are presented in this press release to provide information that may assist investors in understanding the Company’s financial results and assessing its prospects for future performance. The Company believes these non-GAAP financial measures are important operating performance indicators because they exclude items that are unrelated to, and may not be indicative of, the Company’s core operating results. These non-GAAP financial measures, as calculated, may not necessarily be comparable to similarly titled measures of other companies and may not be appropriate measures for comparing the performance of other companies relative to the Company. These non-GAAP financial results are not intended to represent, and should not be considered to be more meaningful measures than, or alternatives to, measures of operating performance as determined in accordance with GAAP. To the extent the Company uses such non-GAAP financial measures in the future, they will be calculated using a consistent method from period to period. A reconciliation of each of the historical GAAP financial measures to the most directly comparable historical non-GAAP financial measures has been provided in Table D “Reconciliation of GAAP versus Non-GAAP Financial Results” attached to this press release.

The Company has not provided a reconciliation of forward-looking non-GAAP financial measures to the most directly comparable GAAP financial measures in reliance on the “unreasonable efforts” exception set forth in the applicable regulations, because there is substantial uncertainty associated with predicting any future adjustments that may be made to the Company’s GAAP financial measures in calculating the non-GAAP financial measures.

In particular, the accounting treatment for Tandem Choice has a high degree of complexity. In September 2022 when the program was launched, the Company began deferring a portion of sales for each eligible t:slim X2 pump shipped in the United States. When a customer elects to participate in Tandem Choice, the Company will recognize the existing deferral, incremental fees received and the associated costs of providing the new insulin pump at the time of fulfillment. The timing of recognition will be based on either a) an affirmative election to participate in Tandem Choice or b) expiration of the right to participate at program expiration, provided all obligation under the Tandem Choice program are satisfied.

Notably:

• Offering the program does not impact the economics associated with how or when the initial pump sale is reimbursed.
• Customer eligibility for Tandem Choice was automatic at the time of a t:slim X2 purchase. Customer eligibility ended in February 2024 with the commercial availability of Tandem Mobi.
• Qualifying customers were able to elect participation in Tandem Choice starting at the end of the second quarter of 2024.
• An affirmative election is required for the customer to participate in Tandem Choice, at which time any customer fees will be received and recognized as a sale. Any remaining deferrals are expected to be recognized in the fourth quarter of 2024. The balance of the Tandem Choice deferral was $30.1 million as of September 30, 2024.
• The expiration date of Tandem Choice is December 31, 2024.

Conference Call

The Company will hold a conference call and simultaneous webcast today at 4:30pm Eastern Time (1:30pm Pacific Time). The link to the webcast will be available by accessing the Events & Presentations tab in the Investor Center of the Tandem Diabetes Care website at http://investor.tandemdiabetes.com, and will be archived for 30 days. To access the call by phone, please use this link (https://register.vevent.com/register/BI21747dfdc3fd4a4e98aeeeef73bf87b6) and you will be provided with dial-in details, including a personal pin.

About Tandem Diabetes Care, Inc.

Tandem Diabetes Care, a global insulin delivery and diabetes technology company, manufactures and sells advanced automated insulin delivery systems that reduce the burden of diabetes management, while creating new possibilities for patients, their loved ones, and healthcare providers. The Company’s pump portfolio features the Tandem Mobi system and the t:slim X2 insulin pump, both of which feature Control-IQ advanced hybrid closed-loop technology. Tandem Diabetes Care is based in San Diego, California. For more information, visit tandemdiabetes.com.

Tandem Diabetes Care, the Tandem logo, Control-IQ, Tandem Mobi and t:slim X2 are either registered trademarks or trademarks of Tandem Diabetes Care, Inc. in the United States and/or other countries.

Forward-Looking Statements

This press release contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, that concern matters that involve risks and uncertainties that could cause actual results to differ materially from those anticipated or projected in the forward-looking statements. These forward-looking statements include statements regarding, among other things, the Company’s projected financial results and the ability to achieve other operational and commercial goals. The Company’s actual results may differ materially from those indicated in these forward-looking statements due to numerous risks and uncertainties. For instance, the Company’s ability to achieve projected financial results will be impacted by market acceptance of the Company’s products; products marketed and sold or under development by competitors; the Company’s ability to establish and sustain operations to support international sales, including expanding into additional geographies; changes in reimbursement rates or insurance coverage for the Company’s products; the Company’s ability to meet increasing operational and infrastructure requirements from higher customer interest and a larger base of existing customers; the Company’s ability to successfully commercialize its products; the Company’s ability to develop and launch new products; risks associated with the regulatory approval process outside the United States for new products; the potential that newer products, or other technological breakthroughs for the monitoring, treatment or prevention of diabetes, may render the Company’s products obsolete or less desirable, or may otherwise negatively impact the purchasing trends of customers; reliance on third-party relationships, such as outsourcing and supplier arrangements; global economic conditions; and other risks identified in the Company’s most recent Annual Report on Form 10-K, Quarterly Report on Form 10-Q, and other documents that the Company files with the Securities and Exchange Commission. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this release. Tandem undertakes no obligation to update or review any forward-looking statement in this press release because of new information, future events or other factors.

TANDEM DIABETES CARE, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

Table A

(in thousands)

 

 

 

 

 

September 30,

 

December 31,

 

 

2024

 

 

 

2023

 

Assets

(Unaudited)

 

 

Current assets:

 

 

 

Cash, cash equivalents and short-term investments

$

473,305

 

$

467,912

Accounts receivable, net

 

107,188

 

 

 

105,555

 

Inventories

 

152,441

 

 

 

157,937

 

Other current assets

 

19,892

 

 

 

16,585

 

Total current assets

 

752,826

 

 

 

747,989

 

 

 

 

 

Property and equipment, net

 

81,064

 

 

 

76,542

 

Operating lease right-of-use assets

 

87,393

 

 

 

87,791

 

Other long-term assets

 

36,447

 

 

 

40,336

 

Total assets

$

957,730

 

 

$

952,658

 

 

 

 

 

Liabilities and Stockholders’ Equity

 

 

 

Current liabilities:

 

 

 

Accounts payable, accrued expenses and employee-related liabilities

$

119,752

 

 

$

105,742

 

Current portion of convertible senior notes, net

 

40,605

 

 

 

—

 

Operating lease liabilities

 

18,033

 

 

 

17,060

 

Deferred revenue

 

42,567

 

 

 

43,994

 

Other current liabilities

 

38,319

 

 

 

28,462

 

Total current liabilities

 

259,276

 

 

 

195,258

 

 

 

 

 

Convertible senior notes, net - long-term

 

307,829

 

 

 

285,035

 

Operating lease liabilities - long-term

 

109,479

 

 

 

113,572

 

Deferred revenue - long-term

 

11,196

 

 

 

13,331

 

Other long-term liabilities

 

32,240

 

 

 

31,830

 

Total liabilities

 

720,020

 

 

 

639,026

 

 

 

 

 

Total stockholders’ equity

 

237,710

 

 

 

313,632

 

Total liabilities and stockholders’ equity

$

957,730

 

 

$

952,658

 

TANDEM DIABETES CARE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

Table B

(in thousands, except per share data)

(Unaudited)

 

 

 

 

 

 

 

Three Months Ended September 30,

 

Nine months ended September 30,

 

 

2024

 

 

 

2023

 

 

 

2024

 

 

 

2023

 

Sales

$

243,971

 

 

$

185,622

 

 

$

657,555

 

 

$

550,922

 

Cost of sales

 

119,318

 

 

 

95,869

 

 

 

325,436

 

 

 

276,527

 

Gross profit

 

124,653

 

 

 

89,753

 

 

 

332,119

 

 

 

274,395

 

Operating expenses:

 

 

 

 

 

 

 

Selling, general and administrative

 

99,639

 

 

 

79,328

 

 

 

283,987

 

 

 

266,752

 

Research and development

 

51,107

 

 

 

41,970

 

 

 

146,677

 

 

 

127,063

 

Acquired in-process research and development expenses

 

—

 

 

 

—

 

 

 

—

 

 

 

78,750

 

Total operating expenses

 

150,746

 

 

 

121,298

 

 

 

430,664

 

 

 

472,565

 

Operating loss

 

(26,093

)

 

 

(31,545

)

 

 

(98,545

)

 

 

(198,170

)

Total other income (expense), net

 

3,479

 

 

 

816

 

 

 

6,659

 

 

 

9,226

 

Loss before income taxes

 

(22,614

)

 

 

(30,729

)

 

 

(91,886

)

 

 

(188,944

)

Income tax expense

 

637

 

 

 

2,232

 

 

 

4,894

 

 

 

3,665

 

Net loss

$

(23,251

)

 

$

(32,961

)

 

$

(96,780

)

 

$

(192,609

)

 

 

 

 

 

 

 

 

Net loss per share - basic and diluted

$

(0.35

)

 

$

(0.51

)

 

$

(1.48

)

 

$

(2.97

)

 

 

 

 

 

 

 

 

Weighted average shares used to compute basic and diluted net loss per share

 

65,538

 

 

 

65,117

 

 

 

65,287

 

 

 

64,834

 

TANDEM DIABETES CARE, INC.

SALES BY GEOGRAPHY

Table C(1)

 

 

 

 

 

 

 

 

 

 

 

 

 

(Unaudited)

 

 

 

 

 

 

 

 

($'s in thousands)

Three Months Ended September 30,

 

 

 

Nine months ended September 30,

 

 

 

 

2024

 

 

 

2023

 

 

% Change

 

 

2024

 

 

 

2023

 

 

% Change

United States:

 

 

 

 

 

 

 

 

 

 

 

Pump

$

86,722

 

$

66,365

 

31

%

 

$

230,187

 

$

207,180

 

11

%

Supplies and other

 

83,889

 

 

 

72,093

 

 

16

%

 

 

227,888

 

 

 

209,352

 

 

9

%

Net revenue recognized (deferred) for Tandem Choice

 

1,039

 

 

 

(8,236

)

 

113

%

 

 

47

 

 

 

(12,568

)

 

100

%

Total GAAP Sales in the United States

$

171,650

 

 

$

130,222

 

 

32

%

 

$

458,122

 

 

$

403,964

 

 

13

%

Adjustment for Tandem Choice

 

(1,039

)

 

 

8,236

 

 

(113

)%

 

 

(47

)

 

 

12,568

 

 

(100

)%

Total Non-GAAP Sales in the United States

$

170,611

 

 

$

138,458

 

 

23

%

 

$

458,075

 

 

$

416,532

 

 

10

%

 

 

 

 

 

 

 

 

 

 

 

 

Outside the United States:

 

 

 

 

 

 

 

 

 

 

 

Pump

$

28,077

 

 

$

21,672

 

 

30

%

 

$

79,774

 

 

$

67,235

 

 

19

%

Supplies and other

 

44,244

 

 

 

33,728

 

 

31

%

 

 

119,659

 

 

 

79,723

 

 

50

%

Total Sales Outside the United States

$

72,321

 

 

$

55,400

 

 

31

%

 

$

199,433

 

 

$

146,958

 

 

36

%

 

 

 

 

 

 

 

 

 

 

 

 

Total GAAP Worldwide Sales

$

243,971

 

 

$

185,622

 

 

31

%

 

$

657,555

 

 

$

550,922

 

 

19

%

Adjustment for Tandem Choice

 

(1,039

)

 

 

8,236

 

 

(113

)%

 

 

(47

)

 

 

12,568

 

 

(100

)%

Total Non-GAAP Worldwide Sales

$

242,932

 

 

$

193,858

 

 

25

%

 

$

657,508

 

 

$

563,490

 

 

17

%

(1) A reconciliation of non-GAAP financial measures to their closest GAAP equivalent and additional information can be found in Table D and under the heading “Reconciliation of GAAP versus Non-GAAP Financial Results.”

TANDEM DIABETES CARE, INC.

Reconciliation of GAAP versus Non-GAAP Financial Results (Unaudited)

Table D

 

 

 

 

 

 

 

 

($'s in thousands)

Three Months Ended September 30,

 

Nine months ended September 30,

 

 

2024

 

 

 

2023

 

 

 

2024

 

 

 

2023

 

GAAP sales

$

243,971

 

 

$

185,622

 

 

$

657,555

 

 

$

550,922

 

Adjustment for Tandem Choice (1)

 

(1,039

)

 

 

8,236

 

 

 

(47

)

 

 

12,568

 

Non-GAAP sales

$

242,932

 

 

$

193,858

 

 

$

657,508

 

 

$

563,490

 

 

 

 

 

 

 

 

 

GAAP gross profit

$

124,653

 

 

$

89,753

 

 

$

332,119

 

 

$

274,395

 

Adjustment for Tandem Choice(1)

 

(374

)

 

 

8,236

 

 

 

645

 

 

 

12,568

 

Non-GAAP gross profit

$

124,279

 

 

$

97,989

 

 

$

332,764

 

 

$

286,963

 

GAAP gross margin(2)

 

51

%

 

 

48

%

 

 

51

%

 

 

50

%

Non-GAAP gross margin(3)

 

51

%

 

 

51

%

 

 

51

%

 

 

51

%

 

 

 

 

 

 

 

 

GAAP operating loss

$

(26,093

)

 

$

(31,545

)

 

$

(98,545

)

 

$

(198,170

)

Acquired in-process research and development(4)

 

—

 

 

 

—

 

 

 

—

 

 

 

78,750

 

Non-recurring facility consolidation costs(5)

 

—

 

 

 

—

 

 

 

—

 

 

 

14,099

 

Severance costs - cash and noncash

 

—

 

 

 

—

 

 

 

—

 

 

 

2,680

 

Adjustment for Tandem Choice(1)

 

(374

)

 

 

8,236

 

 

 

645

 

 

 

12,568

 

Non-GAAP operating loss

$

(26,467

)

 

$

(23,309

)

 

$

(97,900

)

 

$

(90,073

)

GAAP operating margin(2)

 

(11

)%

 

 

(17

)%

 

 

(15

)%

 

 

(36

)%

Non-GAAP operating margin(3)

 

(11

)%

 

 

(12

)%

 

 

(15

)%

 

 

(16

)%

 

 

 

 

 

 

 

 

GAAP net loss

$

(23,251

)

 

$

(32,961

)

 

$

(96,780

)

 

$

(192,609

)

Income tax expense (benefit)

 

637

 

 

 

2,232

 

 

 

4,894

 

 

 

3,665

 

Interest income, interest expense and other, net

 

(3,479

)

 

 

(816

)

 

 

(6,659

)

 

 

(9,226

)

Depreciation and amortization

 

4,211

 

 

 

4,023

 

 

 

12,362

 

 

 

11,684

 

Stock-based compensation expense

 

26,281

 

 

 

20,741

 

 

 

73,217

 

 

 

64,946

 

Acquired in-process research and development(4)

 

—

 

 

 

—

 

 

 

—

 

 

 

78,750

 

Non-recurring facility consolidation costs(5)

 

—

 

 

 

—

 

 

 

—

 

 

 

14,099

 

Severance costs - cash and noncash

 

—

 

 

 

—

 

 

 

—

 

 

 

2,680

 

Adjustment for Tandem Choice(1)

 

(374

)

 

 

8,236

 

 

 

645

 

 

 

12,568

 

Adjusted EBITDA

$

4,025

 

 

$

1,455

 

 

$

(12,321

)

 

$

(13,443

)

Adjusted EBITDA margin(3)

 

2

%

 

 

1

%

 

 

(2

)%

 

 

(2

)%

 

 

 

 

 

 

 

 

GAAP net loss

$

(23,251

)

 

$

(32,961

)

 

$

(96,780

)

 

$

(192,609

)

Acquired in-process research and development(4)

 

—

 

 

 

—

 

 

 

—

 

 

 

78,750

 

Non-recurring facility consolidation costs(5)

 

—

 

 

 

—

 

 

 

—

 

 

 

14,099

 

Severance costs - cash and noncash

 

—

 

 

 

—

 

 

 

—

 

 

 

2,680

 

Adjustment for Tandem Choice(1)

 

(374

)

 

 

8,236

 

 

 

645

 

 

 

12,568

 

Non-GAAP net loss

$

(23,625

)

 

$

(24,725

)

 

$

(96,135

)

 

$

(84,512

)

(1) The accounting treatment for Tandem Choice has a high degree of complexity. Additional information can be found under the heading “Non-GAAP Financial Measures.”

(2) GAAP margins including GAAP gross margin and GAAP operating margin are calculated using GAAP sales.

(3) Non-GAAP margins including non-GAAP gross margin, non-GAAP operating margin, and adjusted EBITDA margin are calculated using non-GAAP sales.

(4) Acquired in-process research and development charges representing the value of acquired in-process research and development assets with no alternative future use and acquisition related expenses recorded in connection with the acquisitions of AMF Medical SA in 2023.

(5) The Company recorded $14.1 million of facility consolidation costs related to our Vista Sorrento lease in San Diego, California in 2023.

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