Tandem Diabetes Care ((TNDM)) has held its Q3 earnings call. Read on for the main highlights of the call.
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Tandem Diabetes Care’s recent earnings call for the third quarter of 2025 painted a largely positive picture, highlighting significant achievements such as record sales and improved margins. These successes were attributed to strategic initiatives in pricing, product innovation, and pharmacy expansion. Despite facing challenges like competitive pressures on new pump starts and transition-related impacts in Europe, the overall sentiment was optimistic, with the highlights significantly outweighing the lowlights.
Record Third Quarter Sales
Tandem Diabetes Care reported record third quarter sales, reaching $249 million. This impressive figure was driven by increases in average selling prices (ASP) and favorable foreign currency dynamics, showcasing the company’s effective pricing strategies and international market strength.
U.S. Sales Performance
In the U.S., Tandem Diabetes achieved approximately $176 million in sales, marking it as the highest third quarter and second highest quarter ever. This success was primarily due to improvements in pricing, underscoring the company’s strategic focus on maximizing revenue from its domestic market.
International Sales Growth
International sales also saw remarkable growth, achieving $74 million and delivering another record third quarter. The company experienced double-digit growth in end-user pump placements, highlighting its expanding footprint and acceptance in global markets.
Gross Margin Improvement
Tandem Diabetes reported a gross margin increase of approximately 3 percentage points year-over-year, reaching 54%. The company expects this trend to continue, with Q4 margins projected to hit an all-time high in the mid- to high 50s, reflecting operational efficiencies and cost management.
Pharmacy Channel Expansion
The company successfully expanded its pharmacy channel, increasing pharmacy benefit coverage for Tandem Mobi to over 40% of U.S. lives. This expansion is a testament to Tandem’s significant internal efforts to enhance pharmacy access and streamline operations.
Launch of New Products
Tandem announced the full availability of the t:slim X2 with Abbott’s FreeStyle Libre 3 Plus integration in the U.S. Additionally, the company expanded its Type 2 commercial efforts for Control-IQ+, demonstrating its commitment to product innovation and market expansion.
Pressure on New Pump Starts
Despite the positive developments, Tandem continues to face pressure on new pump starts, particularly from competitive conversions. These challenges have created headwinds in new pump starts, highlighting the competitive landscape in the diabetes care market.
Impact of Distributor Transition in Europe
Tandem is navigating a projected $10 million headwind due to distributor inventory destocking and inventory buybacks as it prepares to go direct in select European countries. This transition reflects the company’s strategic shift towards direct market engagement in Europe.
Forward-Looking Guidance
Looking ahead, Tandem Diabetes Care is on track to achieve $1 billion in worldwide sales for 2025, with U.S. sales expected to be around $700 million and international sales approximately $300 million. The company anticipates gross margins in the range of 53% to 54% for the year, with Q4 expected to set an all-time high. Although adjusted EBITDA is projected to be negative 5% of sales, improvements are anticipated in 2026 due to new product introductions, pharmacy access expansion, and operational efficiencies.
In summary, Tandem Diabetes Care’s earnings call for the third quarter of 2025 highlighted a strong performance with record sales and margin improvements. Despite some challenges, the company’s strategic initiatives in pricing, product innovation, and pharmacy expansion have positioned it well for future growth. The forward-looking guidance suggests continued optimism, with expectations of reaching $1 billion in worldwide sales for the year.