Tandem Diabetes Care Announces Third Quarter 2022 Financial Results and Updated Full Year 2022 Financial Guidance

Rhea-AI Summary

Tandem Diabetes Care reported its Q3 2022 results, highlighting a 35% increase in its worldwide installed customer base, surpassing 400,000. Total sales rose 14% to $204.5 million, driven by a nearly 70% surge in U.S. renewal pump shipments. Despite a gross profit increase of 8% to $104.4 million, the company faced a GAAP net loss of $49 million, compared to a profit in the prior year. The updated 2022 guidance estimates non-GAAP sales between $800 million and $805 million, down from previous expectations, amid cautious market conditions.

Positive

• 35% increase in worldwide installed customer base, exceeding 400,000.
• Total sales rose 14% to $204.5 million.
• U.S. renewal pump shipments increased nearly 70%.
• Sales outside the U.S. increased 26% to $58.5 million.

Negative

• GAAP net loss of $49 million compared to net income of $5.8 million in Q3 2021.
• Non-GAAP sales guidance reduced from $835 million-$845 million to $800 million-$805 million.
• Sales guidance for U.S. decreased from $620 million-$625 million to $592 million-$595 million.
• Adjusted EBITDA guidance reduced from 11% to 7%-8% of sales.

SAN DIEGO--(BUSINESS WIRE)-- 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, 2022 and updated its financial guidance for the year ending December 31, 2022.

Third Quarter 2022 Financial Highlights Compared to Third Quarter 2021:

• Worldwide installed base increased 35 percent to more than 400,000 customers.
• Worldwide sales increased 14 percent to $204.5 million.
  • Renewal pump shipments in the United States increased nearly 70 percent.
  • Sales outside the United States increased 26 percent to $58.5 million.
• $608.7 million in cash, cash equivalents & short-term investments as of September 30, 2022.

Recent Strategic Highlights:

• Submitted a 510(k) pre-market notification to the U.S. Food and Drug Administration for the Mobi Insulin Delivery System.
• Launched two customer benefit programs in the United States: the Tandem Choice technology access program (Tandem Choice) and Flexible Payment Plans.
• Achieved the milestone of having more than 100 million patient days using the t:slim X2 with Control-IQ technology.
• Launched the t:slim X2 with Control-IQ technology in Israel and Portugal.
• Completed feasibility study for people living with type 2 diabetes using Control-IQ technology.

“More than 400,000 people worldwide have chosen Tandem and the t:slim X2 insulin pump for their therapy needs, and broad feedback from clinicians supports that we are leading in automated insulin dosing with our Control-IQ technology,” said John Sheridan, president and chief executive officer. “We are committed to expanding our portfolio of diabetes solutions to drive longer-term growth and leverage our operations, as we continue our work to improve the lives of people with diabetes.”

Third Quarter 2022 Financial Results Compared to Third Quarter 2021

Starting with the third quarter 2022, the Company is providing more expansive financial results on both a GAAP and non-GAAP basis as detailed in Table E.

• Sales: Sales in the Unites States increased 10 percent to $146.0 million, compared to $133.1 million. In September 2022, the Company deferred $0.6 million of United States pump sales as a result of Tandem Choice. Sales outside the United States increased 26 percent to $58.5 million, compared to $46.5 million.
  

• Gross profit: Gross profit increased 8 percent to $104.4 million, compared to $96.7 million. Gross margin was 51 percent, compared to 54 percent.
  

• Operating loss: GAAP operating loss totaled $47.5 million and non-GAAP operating loss* totaled $15.9 million, compared to operating income of $7.7 million.
  
  Adjusted EBITDA* was $9.9 million, compared to $26.9 million, or 5 percent and 15 percent of non-GAAP sales*, respectively.
  

• Net loss: GAAP net loss was $49.0 million, compared to net income of $5.8 million. Non-GAAP net loss* for the third quarter 2022 was $17.4 million.

See tables for additional financial information.

2022 Annual Guidance Update

“In this highly variable environment, we are factoring greater caution into our guidance to re-baseline expectations for the next few quarters,” said Leigh Vosseller, executive vice president and chief financial officer. “The timing of our potential new product introductions next year adds increased complexity to the current market dynamics, so we feel it’s prudent for our guidance to reflect more moderate growth in periods between new product launches.”

For the year ending December 31, 2022, the Company is updating its financial guidance as follows:

• Non-GAAP sales* are estimated to be in the range of $800 million to $805 million, which represents an annual sales growth of 14 percent to 15 percent compared to 2021. The Company’s prior sales guidance for 2022 was estimated to be in the range of $835 million to $845 million.
  • Sales inside the United States of approximately $592 million to $595 million, compared to the prior guidance of $620 million to $625 million.
  • Sales outside the United States of approximately $208 million to $210 million, compared to the prior guidance of $215 million to $220 million.
• Non-GAAP gross margin* is estimated to be approximately 52 percent, compared to the prior guidance of 52 percent to 53 percent.
• Adjusted EBITDA margin* is estimated to be approximately 7 percent to 8 percent of sales, compared to the prior guidance of 11 percent of sales.
• Non-cash charges included in cost of goods sold and operating expenses are estimated to be approximately $100 million, an increase from the Company’s prior guidance. This includes:
  • Approximately $85 million non-cash, stock-based compensation expense.
  • Approximately $15 million depreciation and amortization expense.

* See Table E for reconciliation of non-GAAP financial measures

Non-GAAP Financial Measures

Certain non-GAAP financial measures are presented in this press release, including non-GAAP sales, non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating loss, non-GAAP net loss, EBITDA and adjusted EBITDA, as well as adjusted EBITDA margin, 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 utilizes 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 GAAP financial measures to the most directly comparable non-GAAP financial measures has been provided under the heading “Reconciliation of GAAP versus Non-GAAP Financial Results” in the financial statement tables attached to this press release. Consistent with SEC regulations, 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.

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/BIcb637284625c45fcbca173def3f7fc70) and you will be provided with dial-in details, including a personal pin.

About Tandem Diabetes Care, Inc.

Tandem Diabetes Care, Inc., a global insulin delivery and diabetes technology company based in San Diego, California, creates new possibilities for people living with diabetes, their loved ones, and healthcare providers through a positively different experience. The Company’s human-centered approach to design, development, and support delivers innovative products and services for people who use insulin. Tandem manufactures and sells the t:slim X2 insulin pump with Control-IQ technology. For more information, visit tandemdiabetes.com.

Tandem Diabetes Care is a registered trademark and t:slim X2 and Control-IQ are trademarks of Tandem Diabetes Care, Inc.

Follow Tandem Diabetes Care on Twitter @tandemdiabetes; use #tslimX2 and $TNDM.
Follow Tandem Diabetes Care on Facebook at www.facebook.com/TandemDiabetes.
Follow Tandem Diabetes Care on LinkedIn at https://www.linkedin.com/company/tandemdiabetes.

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. 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 existing products and products under development by physicians and people with diabetes; the Company’s ability to establish and sustain operations to support international sales, including expansion 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 complete the development and launch of new products when anticipated; 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; the depth and duration of the evolving COVID-19 pandemic, and the global response thereto; 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,
		2022			2021
Assets		(Unaudited)
Current assets:
Cash, cash equivalents and short-term investments		$	608,727		$	623,811
Accounts receivable, net			112,805			110,725
Inventories			104,774			68,551
Other current assets			7,997			8,433
Total current assets			834,303			811,520
Property and equipment, net			72,905			50,386
Operating lease right-of-use assets			116,474			27,503
Other long-term assets			23,838			15,728
Total assets		$	1,047,520		$	905,137
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable, accrued expenses and employee-related liabilities		$	117,396		$	89,007
Operating lease liabilities			12,120			9,279
Deferred revenue			12,974			10,182
Other current liabilities			31,140			23,388
Total current liabilities			173,630			131,856
Convertible senior notes, net - long-term			282,787			281,467
Operating lease liabilities - long-term			127,109			23,922
Deferred revenue - long-term			19,143			16,940
Other long-term liabilities			23,029			17,840
Total liabilities			625,698			472,025
Total stockholders’ equity			421,822			433,112
Total liabilities and stockholders’ equity		$	1,047,520		$	905,137

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,
		2022				2021				2022				2021
Sales		$	204,547			$	179,627			$	580,716			$	492,803
Cost of sales			100,122				82,882				283,252				230,317
Gross profit			104,425				96,745				297,464				262,486
Operating expenses:
Selling, general and administrative			84,104				64,923				237,989				190,009
Research and development			36,798				24,102				103,529				62,562
Acquired in-process research and development expenses			31,016				—				31,016				—
Total operating expenses			151,918				89,025				372,534				252,571
Operating income (loss)			(47,493	)			7,720				(75,070	)			9,915
Total other income (expense), net			144				(1,872	)			(1,668	)			(5,159	)
Income (loss) before income taxes			(47,349	)			5,848				(76,738	)			4,756
Income tax expense (benefit)			1,621				54				2,003				(2	)
Net income (loss)		$	(48,970	)		$	5,794			$	(78,741	)		$	4,758
Net income (loss) per share, basic		$	(0.76	)		$	0.09			$	(1.23	)		$	0.08
Net income (loss) per share, diluted		$	(0.76	)		$	0.09			$	(1.23	)		$	0.07
Weighted average shares used to compute basic net income (loss) per share			64,236				63,167				64,066				62,780
Weighted average shares used to compute diluted net income (loss) per share			64,237				64,784				64,067				64,198

TANDEM DIABETES CARE, INC.
SALES BY GEOGRAPHY
Table C
(Unaudited)
($'s in thousands)		Three Months Ended September 30,									Nine Months Ended September 30,
		2022			2021			% Change			2022			2021			% Change
United States:
Pump(1)		$	80,696		$	78,771		2	%		$	235,849		$	221,724		6	%
Infusion sets			44,839			37,725		19	%			128,490			97,251		32	%
Cartridges			20,122			16,289		24	%			57,502			44,136		30	%
Other			378			321		18	%			1,144			914		25	%
Total Sales in the United States(1)		$	146,035		$	133,106		10	%		$	422,985		$	364,025		16	%
Outside the United States:
Pump		$	27,385		$	23,762		15	%		$	75,515		$	70,300		7	%
Infusion sets			21,964			16,175		36	%			57,258			41,074		39	%
Cartridges			8,996			6,269		43	%			24,539			16,878		45	%
Other			167			315		(47	)%			419			526		(20	)%
Total Sales Outside the United States		$	58,512		$	46,521		26	%		$	157,731		$	128,778		22	%
Total Worldwide Sales(1)		$	204,547		$	179,627		14	%		$	580,716		$	492,803		18	%

1)

Reduced by $0.6 million associated with the Tandem Choice technology access program during the three and nine months ended September 30, 2022.

TANDEM DIABETES CARE, INC.
PUMP SHIPMENTS
Table D
		Three Months Ended September 30,							Nine Months Ended September 30,
		2022		2021		% Change			2022		2021		% Change
Pumps Shipped:
United States		20,394		20,296		0	%		59,870		57,605		4	%
Outside the United States		12,113		11,262		8	%		32,846		33,122		(1	)%
Total Pumps Shipped		32,507		31,558		3	%		92,716		90,727		2	%

TANDEM DIABETES CARE, INC.
Reconciliation of GAAP versus Non-GAAP Financial Results (Unaudited)
Table E
($'s in thousands)		Three Months Ended September 30,								Nine Months Ended September 30,
		2022				2021				2022				2021
GAAP sales		$	204,547			$	179,627			$	580,716			$	492,803
Adjustments for Tandem Choice (1)			599				—				599				—
Non-GAAP sales		$	205,146			$	179,627			$	581,315			$	492,803
GAAP gross profit		$	104,425			$	96,745			$	297,464			$	262,486
Adjustments for Tandem Choice(1)			599				—				599				—
Non-GAAP gross profit		$	105,024			$	96,745			$	298,063			$	262,486
Non-GAAP gross margin(3)			51	%			54	%			51	%			53	%
GAAP operating income (loss)		$	(47,493	)		$	7,720			$	(75,070	)		$	9,915
Acquired in-process research and development(2)			31,016				—				31,016				—
Adjustments for Tandem Choice(1)			599				—				599				—
Non-GAAP operating income (loss)		$	(15,878	)		$	7,720			$	(43,455	)		$	9,915
Non-GAAP operating margin(3)			(8	) %			4	%			(7	) %			2	%
GAAP net income (loss)		$	(48,970	)		$	5,794			$	(78,741	)		$	4,758
Income tax expense (benefit)			1,621				54				2,003				(2	)
Interest income and other, net			(1,708	)			(31	)			(2,858	)			(721	)
Interest expense			1,576				1,511				4,629				4,526
Depreciation and amortization			3,508				3,400				10,689				10,325
EBITDA			(43,973	)			10,728				(64,278	)			18,886
Change in fair value of common stock warrants			(12	)			392				(103	)			1,354
Stock-based compensation expense			22,236				15,729				60,477				43,653
Acquired in-process research and development(2)			31,016				—				31,016				—
Adjustments for Tandem Choice(1)			599				—				599				—
Adjusted EBITDA		$	9,866			$	26,849			$	27,711			$	63,893
Adjusted EBITDA Margin(3)			5	%			15	%			5	%			13	%
GAAP net income (loss)		$	(48,970	)		$	5,794			$	(78,741	)		$	4,758
Acquired in-process research and development(2)			31,016				—				31,016				—
Adjustments for Tandem Choice(1)			599				—				599				—
Non-GAAP net income (loss)		$	(17,355	)		$	5,794			$	(47,126	)		$	4,758

(1)		In September 2022, the Company launched Tandem Choice to provide in-warranty eligible t:slim X2 customers a path towards ownership of the next generation hardware platform for a fee when available. The accounting treatment for Tandem Choice has a high degree of complexity, initially requiring the deferral of some portion of sales for shipments of eligible pumps.
(2)		The Company recorded a $31.0 million charge representing the value of acquired in-process research and development assets with no alternative future use, and acquisition related expenses.
(3)		Non-GAAP margins including non-GAAP gross margin, non-GAAP operating margin, and adjusted EBITDA margin are calculated using non-GAAP sales.

 

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Media Contact:

858-255-6388

media@tandemdiabetes.com

Investor Contact:

858-366-6900

IR@tandemdiabetes.com

Source: Tandem Diabetes Care, Inc.

FAQ

What were Tandem Diabetes Care's Q3 2022 sales figures?

Tandem Diabetes Care reported Q3 2022 sales of $204.5 million, a 14% increase compared to Q3 2021.

What is Tandem Diabetes Care's updated sales guidance for 2022?

The updated sales guidance for 2022 is estimated between $800 million and $805 million, reflecting a decrease from previous expectations.

What was the net loss for Tandem Diabetes Care in Q3 2022?

Tandem Diabetes Care reported a GAAP net loss of $49 million for Q3 2022.

How did the installed customer base change for Tandem Diabetes Care in Q3 2022?

The installed customer base increased by 35% to more than 400,000 customers worldwide.

What is the significance of the new product pipeline for Tandem Diabetes Care?

The potential new product introductions add complexity to the market dynamics, prompting a more cautious guidance approach.