Tandem Diabetes Care, Inc. 2026 Q2 Earnings Call

Please go ahead. Hello, welcome to Tandem's 2026 second quarter earnings call.

Today's discussion will include forward-looking statements. These statements reflect management's expectations about future events, our product pipeline, development timelines, and financial performance and operating plans, and speak only as of today's date. There are risks and uncertainties that could cause actual results to differ materially from those anticipated or projected in our forward-looking statements, which are described in our press release issued earlier today and under the risk factors portion of our most recent annual report on Form 10-K and quarterly report on Form 10-Q. Today's discussion will also include references to both GAAP and non-GAAP financial measures.

Please refer to our earnings release issued earlier today and available on the investor center portion of our website for a reconciliation of non-GAAP measures to their most directly comparable GAAP financial measure and other information regarding our use of non-GAAP financial measures. John Sheridan, Tandem's President and CEO, and Leigh Vosseller, Executive Vice President and Chief Financial Officer, will be providing prepared remarks on today's call, after which the operator will open up the call for questions. Thank you for limiting yourself to one question before rejoining the queue. I'll now turn the call over to John.

Thanks, Susan. We appreciate everyone joining the call today. The second quarter marked an important step forward for Tandem. We are executing against our strategic priorities while demonstrating operational momentum, improving our financial performance, and providing broader access to our technology. This progress was evident in our results, with worldwide pump shipments growing more than 10% year-over-year and sequentially. In the U.S., a highlight of our performance was improvements in new pump start trends, led by a standout number of people transitioning from multiple daily injection. Internationally, we saw an acceleration of adoption in the countries where we launched direct efforts earlier this year. Additional Q2 highlights included significant margin improvement, including the second highest gross margin of any quarter in our company's history. We also advanced the global launch of new technologies while preparing to expand our portfolio with the FDA submission for Tandem Mobi's tubeless feature.

We'll discuss each of these accomplishments in greater detail on the call today. I'll begin my remarks with an update on the three strategic priorities we laid out at the beginning of the year, which included reshaping our business model, modernizing our commercial organization, and delivering new technology. In March, we launched pay-as-you-go reimbursement in the pharmacy channel. This transition was designed to create clear benefits for customers, prescribers, and payers with better economics to Tandem. During the second quarter, our focus was on early implementation. This included updating the end-to-end processes for how our technology is prescribed, how we support customers, and how our orders are processed. We are encouraged with the momentum behind this transition and beginning to see efficiencies that are positively contributing to our results.

We now have approximately 45% formulary coverage, which is already approaching the high end of our range for the goals this year. Access is a critical first step to driving PAYG adoption, and teams are now focused on driving plan utilization. In our first full quarter offering PAYG, U.S. sales through the pharmacy channel increased to 10%. This early traction reinforces our confidence in the pharmacy strategy and the broad reaching benefits it can deliver. The second key initiative I'll touch is modernizing our commercial organization to improve productivity and support profitable growth. The work has been underway for the past year, and we are pleased with the progress. Key accomplishments include the deployment of a new CRM system to improve sales force efficiency and effectiveness, provide deeper insights into our customer base, and support our global channel strategy.

This includes enabling our U.S. pharmacy transition and supporting direct commercial launches internationally. Our international direct launches began earlier this year in the U.K., Switzerland, and Austria, with plans for France to follow in the fourth quarter. This strategy better positions Tandem to serve our customers and healthcare providers in these markets while strengthening our financial profile. The final key initiative I'll discuss is our delivery of new technology, starting with the expansion of our global portfolio. We continue to reinforce our competitive advantage with Control-IQ+, which now has the broadest indication of any AID system in the U.S., including pregnancy. Similarly, we strengthened our advantage internationally as we received CE mark in Q2 for pregnancy, as well as adults living with type 2. Great excitement is also building internationally, as we are in the early stages of introducing Tandem Mobi outside the United States.

We plan to bring our tiny pump with big outcomes to more than 10 countries by year-end, including some of our largest markets. In addition, our team has been working to broaden CGM compatibility. For Abbott's FreeStyle Libre 3 Plus, t:slim is now compatible in seven countries outside the United States. We plan to expand to additional markets throughout the year. Dexcom's G7 15-day sensor is now compatible with Mobi and t:slim in the U.S., and international markets are soon to follow. These launches are consistent with our efforts to ensure the broadest possible coverage across devices and markets. Looking ahead, the team continues to drive long-term innovation across our pumps, infusion technology, software ecosystem, and AID algorithms. Starting with pumps, we reached an important R&D milestone in Q2 with a 510 submission for Mobi Tubeless.

This new infusion site option is designed to transform the existing Mobi pump into a tubeless AID system, giving users the unique flexibility to choose between tubed and tubeless wear on a single hardware platform by simply changing the supplies they use. Compatible with the existing Mobi pump, subject to FDA clearance, this will be Tandem's first tubeless pump offering and the world's first with extended wear technology, an important differentiator that enhances our position in this dynamic market segment. Pre-commercial preparations are actively underway. Our goal remains to begin a scaled launch this year, after which time we'll begin training our field and HCP community on the novel tubeless Mobi feature. We will also begin updating our payer contracts and completing operational activities in support of the launch.

Infusion technology is another key area of focus as we work to expand tubed and tubeless options, improve comfort, extend wear time, and simplify the user experience. To support this, we are launching AutoSoft+, a new infusion set designed to enable quick set changes with reliable one-handed insertion. We introduced AutoSoft+ in Canada in late July and plan to expand to additional geographies, including the U.S. later this year. This timing is important as we continue to manage shortages from our key infusion set supplier. We believe Q2 was the period of greatest impact, and our supplier expects availability to improve through the second half of the year. The launch of AutoSoft+ is expected to reduce the demand for the SKUs currently under allocation.

Looking to the first half of 2027, we plan to provide further choice in infusion sets with the launch of SteadiSet, our proprietary technology that is FDA cleared for wear up to seven days, which is now in manufacture and scale-up. The last technology advancement I'll discuss is automated insulin delivery. Since Tandem was founded, we've maintained our vision of creating an AID system worthy of the term artificial pancreas. Today, we are closer to this vision than ever and excited to begin sharing more details. Under our longstanding research collaboration with the University of Virginia, we are advancing their next generation AIDANET algorithm into a compelling, fully closed loop experience for everyone. AIDANET, which stands for Automated Insulin Delivery as an Adaptive Network, has been under active development and clinical testing for the past several years.

We are developing a system designed to help both type 1 and type 2 users meet the clinical time and range guidelines, whether they are new to pump therapy or longtime users. Our goal is to achieve this without meal announcements or other user inputs. Because diabetes can vary day to day, we are also designing the system to incorporate additional user context and respond in a more personalized way. This is an ambitious goal, advancing closed loop technology requires solving the most complex real-world use cases. Over the past two years, our development and user experience teams have been working toward that objective, culminating in FDA approval of an IDE in Q2 and positioning us to begin a pivotal study later this year. Overall, the second quarter progress reflects the strength of our execution across the priorities that we set for the year.

We remain encouraged by the momentum that we are building and remain focused on translating these initiatives into broader customer impact while improving our financial performance. With that, I'll turn the call over to Leigh to provide more detail on financial results.