TANDEM DIABETES CARE INC Q4 FY2024 earnings call

Key Points

• 2024 was a pivotal year with 18% worldwide sales growth, setting new records in the U.S. and internationally.
• Launched Tandem Mobi, which saw continued growth, and Control-IQ+, FDA cleared for type 2 diabetes 18 and older, doubling the addressable market in the U.S.
• Scaled Tandem Source, with over 90% of U.S. prescribers using it. Mobi attracted younger patients with its small form factor and Control-IQ.
• Initiated multichannel payer strategy, including pharmacy channel, and began transition to direct commercial operations in select European countries starting 2026.
• MDI conversions in 2024 grew double digits, making up over 60% of new starts, and the Tandem Choice program concluded with $30 million in deferred sales captured in Q4.

Worldwide sales in 2024 were $910 million, an 18% increase year-over-year. Fourth quarter sales reached a record $252 million. In the U.S. market, Q4 sales were $184 million, a 13% year-over-year increase, with full-year U.S. sales at $642 million. Pump shipments in the U.S. for the year were nearly 81,000, up 10% due to the Mobi launch and MDI conversions. Outside the U.S., full-year sales were $268 million, a 39% increase year-over-year, with Q4 sales at $68 million, up 48% year-over-year. Pump shipments outside the U.S. for the year were approximately 40,000.

Forward-Looking Statements

• Worldwide sales expected to be in the range of $997 million to just over $1 billion, a 10-11% year-over-year growth.
• U.S. sales expected $725 million to $730 million, 13-14% growth; Q1 sales $144 million to $147 million, 10-12% growth.
• OUS sales expected $272 million to $277 million, 2-4% growth, with $15-20 million headwinds from Europe transition.
• Gross margin expected ~54% full year, 51% Q1; adjusted EBITDA margin expected ~3% for year, up from 2024's negative 1%.

Risks

• Shipping delays in Q4 impacted revenue timing.
• Disruption from transition to direct sales in European countries.
• Competitive promotionally sensitive market affecting sales and margins.
• Uncertainty around Medicare coverage for type 2 diabetes and market development for this segment.

Q: Can you quantify the Q4 shipping delays and their impact on pumps and supply?

A: The majority of the shortfall in Q4 was due to muted seasonal curve in December, with shipping delays contributing but not the most significant factor. Renewals and MDI conversions remained strong.

Q: What are the next steps for the Pharmacy initiative?

A: Focused on scaling pharmacy, with 20% of covered lives under contract, activating co-pay assistance, and driving scale and efficiency in 2025.

Q: How does the sales force expansion impact disruption and type 2 diabetes opportunity?

A: Sales force realignment and expansion optimizes efficiency and increases share of voice for high-growth accounts, targeting high insulin prescribers and working on Medicare pathway for type 2 coverage.