Tandem Diabetes Care (TNDM) 3 Nov 222022 Q3 Earnings call transcript

Good day and thank you for standing by. Welcome to the Tandem Diabetes Care Third Quarter 2022 Earnings Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today's conference is being recorded. to Morrison, conference Officer. EVP like speaker to now Susan today, and would hand over the your I Chief Administrator go ahead Please

any earnings financial management's press Risk expectations recent annual Hello, in We or Tandem's elsewhere be future events, a events by SEC is include you thank time these most report about any operating statements. factors. call. obligation lines to plans development actual quarterly release our on different Form those as quarter Factors or and risks forward-looking XX-K, reflect everyone, in list will that today update other statements, and our and could Today's projected cause on of Form statements are our statements anticipated A for today's from uncertainties materially in information, These assume future issued There product no discussion results of performance under and forward-looking and new forward-looking date. and of portion those third to differ of joining speak and could only results to statements. cause our or that XX-Q earlier factors materially and whether the filings. expressed implied other report forward-looking in publicly from result highlighted as actual

operating these our reporting measures provided of and give operations. number better and indicative believe periods. non-GAAP non-GAAP GAAP operating to performance to information financial believe of across of today's financial facilitate ongoing addition, reflects a include Non-GAAP measures will financial business core comparisons In are references discussion that We results our measures. our is investors we

release non-GAAP about our our please earlier use today. For issued measures, to financial additional information of refer press

Vosseller, be will President Executive Vice Leigh Chief our led our today and call Financial by Officer. and and Sheridan, CEO; President John Our

back for for question into limiting one follow-up the you yourself we'll getting prepared questions. up over before and now the to I'll call their turn Following one to remarks, call Thank the open queue. in advance John.

call. talking some diabetes. asking today's on recent year reflecting in far trends our with particular, before the few financial Thanks, color people pipeline spend XXX,XXX an we business in goal of Susan, our been proud of quarter. going Tandem moments with a both of third I'm successes worldwide prepared we incredible near-term reached technology XXXX strides the a that I'm are having so In quarter, customers. than provide on we'll long-standing has using filled a measurable to evidence welcome, of towards In the benefits having expectations the and of quarter and XX. conclude challenges. to bringing to everyone, the to results highlights Leigh our living our about and update. making an milestone people in It's our and million upfront goal remarks third with is with longer-term a t:slim Starting our X more then achievement it's more

more to earnings to our continue that what we more goal, moderate new part linear. introduction our call, to be by in product the Similar our anticipate timing we by growth We As will and dynamics to three towards own throughout we cycles, of macro of do last QX. pressured addition due former, been the we've advance in environment more is headwinds. largely of in recent industry-related this today discussed driven there growth the our periods Where expect we periods stand between exceptional not technologies. be of

shortages. from COVID endocrinology case pressures include staffing were have of the First two pandemic-related to office fluctuated throughout an array the These that past years. rates things

dynamics, the an United competitive threat provide of update including conditions, began escalating consistent of pressures economic we COVID-related and inflation operating comparison all of third States. an looking when the last the in year-over-year anticipate And It's recession. environment broader a in in in these in was the our markets. To Second future. factor environment QX at that the for the now year on were foreseeable the each

in million systems. to our and days cloud experience attrition and user incredible result, that the substantial ago, XX. also data low the I'm less launched years sustained is results patient pump few historically. dynamic customers a are line competitors been year, and t:slim The our wirelessly our levels competitive which being for also said two market. what have insulin U.S. customer demonstrate system proud This It's the broad majority we expand the new the a Control-IQ, it see AID second hear launch with in we automatically the vast environment when from of another and the launch This system upload our the using in seen leader that The which competitive associated intensified feedback the more that remain surveying navigating to our consistent sales we've immediate have factor clinician remains comes and to using AID device disruption this as launched. quarters. majority environment a with than great we'll XXX scaling the visibility been competed and Android-built ago And that creates across continue said, be to in amassed algorithm, benefits Control-IQ AID years a we've on is rewarding satisfaction of in management, than What's technology. to market with what utilization is clinical our of with with form is our the from about very that customer from competitive that we've That noise heightened iOS few data historically. applications high. managing the experienced the this In

reported third half time. about for pump quarter, insulin As our of first customers in therapy the the new adopting

the past but our States core to before a t:slim working approximately infrastructure. and the QX. speak then momentum using fourth was geographies have look end our continue saw of but in it controlled The We'll on taking leverage marketing our available has United product with teams momentum concerned third outside phenomenon. few which we these any quarter greater technology program same our living to the QX. in confident of key This We're able quarters, people cloud it expectations This and mobile serve about has and app. to on a fluctuated smaller executing are the To to for while one are this United plans. we remain for expectations, of the steady insulin something product disruption remained migration, pressure a of but care the getting from with to recent primarily to for we XX of uptick new of for launches, On delivery each This year, operations, new step of of further line demand beginning continue build. partially in the beginning strategy so offerings improvements our also been health Operationally, our outside outside to in support the adoption systems at mitigated market want today. offerings U.S. our past, outside environment, the noted the are such the international areas our also to the new baseline the United regulatory are heavily. implement of the Reflecting States. worse, different quarter, advance States, not in invest years submitted consistent of month furthering quarter, part to which in purchasing variability efforts fourth dynamic, mobile broader of our working lean the and who customers of we continue identifying product Overall, some QX, to to continues government the in motivated offer in This is focused aggregate even economic the latter on our these the as In quarter. which But pressure of In Control-IQ initiatives our is today. United third we We're t:slim we created since number difficult set better support of cost, September them this serve typically across in focused level goal QX one the or U.S. caution. to predominance experiences final the States, This results of did first and a steady. which driving we the the to our the level Portugal, includes our from we and were makes the in of quarter. done the on September in expand opportunities filing XXXX in recalibrate important also bring began benefits see each greater systems our of outside that we August to opportunity Israel the in people of we XX customer our United what as behavior the markets at quickly throughout in our in States, is phone primary the impact customers dynamic pump to XX. at the launched being September. on by underpenetrated is technology a dynamics with grow. environment we towards plan of payment U.S., brings In seasonal across build our

in diabetes us align available macro Leigh exist we our As future, to serve now continued pump opportunities for new Leigh consistent insulin further that will market to not call countries any of for delivering bring relief the we to on continue opportunities discuss, remain expectations. the the will over and to more focused expectations. benefits this I our over anticipate technologies United competitive that Similarly, than the we change less our of in With to outside to near-term the anticipation introduction or opportunities. the goal reset and results U.S. of of turn financial in our in clear upside is share. to factoring additional guidance properly on market just be penetration will will XX% be them from to through the they want the expansion XX% the large serve driving It upside does community. States, the typically market. our that that current diabetes the foreseeable our as capture on to pump we persistence and and continue we pressures I'll technology

Thank you, John.

the Looking was highest in it Company's back at QX notably our sales quarter, the history. performance

shipments from customers. also and recurring insulin more installed of base market the installed growing XXX,XXX continues expand to renewal continue base strong We to than drive pump large our sales. also supply while pump benefiting This

XX% have line in million. $XXX a sales compared third flat, result, basis, XX% the at in We essentially the a over in a over installed XX% basis, grew the shipments sales As U.S. grew in which closer U.S., sales both results to sequentially million. year. approximately to the in XX% growing sales On year. year-to-date now to On third expectations, $XXX million. prior $XXX base, year-to-date pump Taking to XXX,XXX and our Total our than a worldwide units, XX% last year. year-over-year look people quarter with worldwide last our million, $XXX grew was U.S. more were were quarter XX,XXX a our increase

include follow in unusual, This high serve. of the of a reflection historical sales that shipments, not strong on pump did this is mentioned, our the market nearly rate of insulin we outperformance and John satisfaction renewal XX% level customer increased quarter did year-over-year. As the was patterns, pump retention segment the but monthly which of trends

these This the increases and program deferral also prices, customers This customers steady deferrals in XX% launched advance with in past. in growth Tandem innovations approximately a non-GAAP by average We adopt hardware be pump pump existing percent the the direct increase saw impact warranty deferrals. driven program their continued will U.S. recognition similar Revenue and of our and which this provides the offered program for new deferred to commercial U.S. channels, introduction performance, Tandem U.S. availability will greater in deferrals in new the nearly our Notably, improved $XXX,XXX programs sales will Mobi's of of technology. have timing was to we the of The associated X% through pathway ago. of within access to excluding as XX% period, we predict. amount price outlook then sales in is a selling total and recognized the sales associated resulted a improvement anticipates year of the sales of which with of the sales Mobi third our Therefore, the terms quarter of of upcoming of difficult begin included a ultimate late in Choice we this from discussing to pump quarter. U.S. sales year-over-year.

Our John in $X but growth our in of mentioned. anticipated the strong end $X to U.S. is to software XX%. were This in just to due QX million million timing. sales at by of in large part supply short materialize the increased that meaningfully Approximately sales QX, part the expectations system migration supply fell in large instead will due

Moving to of U.S. primarily the fulfillment the seasonality. of expectations timing in the Sales the impact anticipated our outside quarter, due on operations muted our to exceeded order that third

sales. in pump the a approximately OUS supply to We surpassed basis, has and XX% Our and quarter, XXX,XXX OUS year-over-year estimated to the million. pumps in installed XX% XX% base U.S. in million our outside now On grew $XX shipped our increase sales sales $XXX XX% XX,XXX people. increase sales a a grew year-to-date on

continue distributors that a began distribution recently the As they a U.S. through we in it necessarily warehouse have transit manage inventories challenging what place to do of On time shipments We our pump we supply their placements. Europe variable distributors U.S. the when basis, chain recent work placements flat, in operating not demand benefits year-to-date our have center to the outside from because with and customer were discussed essentially refer shipments actual or distributors correlate orders to our in distributors eliminates conditions. as to as grown but quarters,

our this shipments the will scale than of In closer revenue few quickly to placements. in next expect new over alignment the longer to utilization result We at pace a originally this warehouse of more a quarters anticipated. term, we

next shorter sales transit as impact the their anticipate Europe time. XX our timing distributors stock they the account of to over will reduce levels to it safety we However, months, in the for

the had very currency exposure a foreign our center to commencing of in through is we As of distribution It's at European that markets XXXX. our note, end U.S., that effect exposure is expected in have reminder, the outside little operations to though, consistent to foreign our that and important another remain currency than will difficult we to in operating in as trends. is more it prudent basis, what believe we are to for On recalibrate the XXXX XXXX. have seen continues increase scale. expectations the Accordingly, past, a be environment years worldwide future variable in making it remainder very we we of to predict fluctuations

ahead, expect million. sales range to look XXXX we million $XXX year-over-year we U.S. $XXX of XX% the now non-GAAP $XXX reduced to reflecting guidance includes This of sales in XX% million $XXX growth. million, As total to

a adjusting to and for to We accelerated our markets. variability patterns the primarily in the are million million, $XXX distribution range also ordering the to the center of scaling U.S. guidance for account European remaining of $XXX outside continued

to Turning margins.

second perspective, the margin initiatives in execution Our continued progress ASP our of with an From line same operational sales. on of this third XX% our on performance reflects the gross in gross quarter to with the expand was level quarter towards margin beginning goals. approximately

average from selling Our manufacturing efficiencies mix offset reduced and and year-over-year prices both costs geographical product changes. higher

now our from was it material of specific higher continued to approximately avoid the earlier Beyond be sales supply This continue of as product was costs. chain to approximately through XXXX. carrying half on expect pressure gross purchased as level consistent on global as in margin comp guidance, gross components we pressure expectations to we freight to our costs end margin costs, increased that, Due the change at and related the with are higher lower expect of two primarily risk shortages to points. XXXX in percentage was year well we first XX%, our inventory the challenges we the our range. the which fuel these Based our of margins guidance by

expansion our prepare year-to-date includes non-GAAP full R&D, our other approximately for products next as three sales for R&D, operational which of inflection will Biomedical, business year Moving sales as gross of cost third particularly the long-term and the on investments on plan. in prioritize continue that drive the basis of spending, we launch and support of well is as sales margin the to innovations that pursuit we in was in now XX% a expectation the our Capillary both and quarter XXXX. the major

charge Our sales. quarter Bio. or operating Cap operating of of $XX the resulted meaningfully million third for onetime acquisition the in intronic of the margin for negative a was treatment XX% in-process acquired of in XX% expenses impacted by to This R&D

the Bio of Our deferral impact X% adjusted compensation. Cap of stock-based the sales excluding Tandem margin as was associated Choice revenue third the well when with as quarter EBITDA and non-cash in transaction the

of profitability. transactions, nature we that the representative these measure a of believe adjusted more EBITDA is With

be X% Our non-GAAP EBITDA of in XXXX is adjusted the of estimated range to to X% sales.

Year-to-date, $XXX with and our to of We $XXX flow. continue of $XXX our was to million, To operating to before outlook, XXXX & range capital taking non-GAAP We including strategic sales investments. cash are new million worldwide $XXX and Tech consideration cash million. international be our $XXX million to million cash $XX and generate third million in strong flow Center. Innovation quarter sales total in million the in investments summarize for estimated acquisitions the expenditures into ended $XX

Our gross to the in estimated X% Adjusted is margin sales. of expectation non-GAAP of XX%. EBITDA range approximately X% be is to

million with non-cash $XXX and and expected amortization. million, P&L approximately compensation, million non-cash which compensation Our to of are $XX depreciation $XX and with is amortization depreciation stock charges for be stock associated

for serve will to as more of with we beginning are bringing year. a the living new future series for excited particularly people of ahead, technology benefits driver diabetes. Each the growth Looking sales, next launches our product

gross designed also product portfolio improvement. Our is margin drive to future

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Starting the innovation, us the we with our of is Tandem front a have pathway. through are development pump opportunity Leigh. submission with on FDA you, company and founded with ACE meaningful. the Mobi, filed and XXX(k) Thank a in products

we otherwise catalyst with the customers a launch of appeals shows the available is with in explicitly controlled greater driving Our insulin a about offered therapy not It's growth through app. industry, Movie options largely to choice And further who for t:slim pump with that segment half research the of our the shortest mobile and market. would Mobi people adopt to today. the also size set in the infusion plan it, providing flexibility.

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on launch color to We and will provide move we more plans timing as our clearance. closer

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recognize shared from of new technology technology. our generations of with sensor importance newest benefit we approved, their Control-IQ Dexcom's As customers our ensuring can are the

Abbott. to Turning

working solution AID actively are our towards first using Libre offering data. We integrated CGM

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is our integrated For both Abbott clearance. their launch and offering goal after Dexcom, one to receipt to of our within U.S. quarters two in the

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working As that near-term to you span and firsts a represent in are number innovations industry. verticals commercialize can our of we of all see, the R&D the

the the as on we improving The overwhelmingly for diabetes. we about diabetes We appreciate greatly solutions feedback technology. designing the in all services are received operator user-centric to that and to we people employees, with applying working attributable are I'll when and lives same be provide questions. philosophy of their now positive the of today further solely We dedication the our passionate t:slim Control-IQ that, of over the call deliver leadership and work, efforts. exciting the care. did And XX we'll turn innovations that together, hard and new talent who our to our back With position are

first Our Barclays. with Instructions] [Operator from Miksic question Matt comes

Your now line is open.

the quarter? coming could? share talking like of quarters, had the of you're some little to whether if it kind and couple trends going the sounded one comments market environment, but there on an bit impact deferrals. in the that felt you the maybe John, start just deferrals A you of environment if in more follow-ups could of And clarify Can you I and on of follow-up share the -- impact I on about was made, a you sort

as coming that we late for solutions quarter, to within launched Matt. only deferrals more is pathways new was predict question, the technology because to the Sure. third meaningful recently -- Tandem it's it in $XXX,XXX. the program, to warranty third as only behind cycle. lot associated the accounting people launch. which comes a it's spoke We the Mobi the we of, difficult get we think closer it. it's related it to while that launched, Thanks expect particularly our it, access the their we are coming people And technical it for Choice in Since become was deferral about hardware the with new which in of to do When quarter there's quarters

non-GAAP on sales we'll basis. So, reporting a be our

quarter, this to was we be for the material, were For very wanted in people not make it would but sure what coming future. prepared

mentioned, That's in a on, utilization the it. U.S. follow-up or And trends Got the then of share some helpful. as just I trends

of share You either taking the talk marketplace of the pressure obviously. you if next are place couple were that you of in any, expecting own for those comes in and that in mentioned until efforts the the you're will about have an Or promotions of this to to is environment the is just impact your how competitively kind quarters? things your market? Can stabilize expectation, sort maybe there, remain place Mobi

have by I what would the on I three these to with expect clinical combat the AID strongly benefit market best we also we best of our -- we and we of doing have the use. immediate improvement. We situation people sustained market, the promoting system to who I results definitely it. mean the say really future. it's Matt, continue in very strengths certainly Yes. use product our that for our from are this. the dynamics clinicians from ease this Control-IQ And difficult competitive as products. today. we noise the is the foreseeable can recalibration, And also in mean we hear the and indicated to hear it predict the The from the who from

have We and usability basal customizable got rates, data transparency improvements. and we've

actually will of products to to next So, the as to our to new promote to product best very product until continue going see our strengths year. along to and market we continue GX as our make our very come well we're and physicians visible Abbott with the the to do customers continue

Thank you.

Partners. Our Lake next Street question comes from Capital the Brooks line O'Neil with of

open. is Your line now

Omnipod outlook same impact your the from or a into X current and if curious or I'm contemplates less greater early in more XXXX? XQ

for competitor say that, I have the would we market say right competitive better. the we that as isolate getting are I actually -- best expected. to we us factors now. the I -- that seeing that now the mean the current the or described, that would is product three on Brooks, is impact it's right believe environment of what we -- the three I which we're the mentioned, is worse well, market But getting there dynamics difficult from

our saw new sales competitor disruptive don't as as as I And our mentioned, so with at they we -- MDI. another are disruptive though, that. pressure As as look as this the if seeing come force indicated it's the from quarter, believe that, you that starts market has did several is we on new years ago, even third not starts. come to But

renewals We our are have attrition and very strong. low

much pretty three in -- So one I factors right dealing with it's of it's think just that with expected, now. that line it's but we're what we

Sure. sense. on you also, you the perspective? feel an All to current economic difficult plans to whether total curious from that could to offer just makes I'm need respond you additional payment environment comment

actually utilized the try and question. and of numbers. address a we that the the anecdotally, to that's But having Good rolled to conditions. Yes. marketing meaningful began out say recessionary it. we've feedback terms just lot help September. in And it's it's And I can way very in experience people It's say early in new economic plan current to on are are of marketplace. to that inflation positive a think intended seen people the pressures feeling who help a being We how well from current

Thank you.

Our next with the line Pasquale of from Nephron Research. Chris comes question

open. is line now Your

follow the to of the market wanted center I international up impact date. distribution on the and new

forward. timing you want there, pretty expect this point certain factoring at to look eight countries. of so quarter continue about being of in we we're the talked weeks drawn on strong visibility Do that to when any results that down that? inventory make sure have You this just The going in I should

the Really, we in Yes. things our markets little why that is of And were outperformance the we operations in in how Great. anticipated. quarter, this Chris. a that primary of performing being guidance our months. your for had is based question, there few accelerate we originally in things this quarters. reason with the phase-in, To third And XX plan ahead what begin adjusted into fourth point, the Thanks quarter pulled the had past the next were our year which we commenced year. going, impact which we launch for bit it's will for the -- markets came this the to all about, a on phase-in that OUS decide of and the

quarter point. as what we So it lasting of year at you to a sales. to eight up is next weeks And fourth and first in it expected about beginning think the through can impact the this half is dynamic of think

If being and the so think locally, inventory, they will. to draw of distributors consistent are you more levels about of some to are will that three-plus inventory down carrying work able with want months if you that to the

improving, it, this at stable, it? be least think at those put one a to three a you Okay. but the impact And helpful. about the as point? be directionality if economic way should U.S. the Or on point TBD. then the the not may would and feels finer Is that three you of about in COVID one you headwinds on terms from how characterize headwinds then though That's still environment is the could of upswing the in to talked good the It still just one competitive feel

bit and that guidance the improve they'll the to in we expectations follow in will or assumed setting of the continuing than pressure comments which and even Yes. rather improve, which timing I'm the challenging about about of that we fact going it little these to consistent as predict. difficult year and in entering the about think throughout going we've trying so a it's really factor headwinds combination forward, the XXXX. makes rate to all together, And as thought on to the them John's

what we So hearing us dissipate as to as look upside we opportunity side and begin on our leaving cautious case, expectations, for the forward. in the said for more then assay we're this

Thank you.

question Sandler. line comes Piper O'Brien the of from Our Matthew next with

Your line now is open.

And sorry guys to you be okay. blunt about September early here, kind but of talking being are things in

in QX -- through reported, a got just there. a they QX another that put You've good they there's the good the diabetes, pharmacy, and just the a U.S. expectations go Dexcom, up company for can in

go the pharmacy. can't through guys You

headwinds to And can be confidence So even expectations, in the just you're for much, then that the especially facing? just these going and in of QX wondering, really and weeks XX% that U.S. the so here what both to next I'm forward? us with what changed gives pull the last you year environment, few XX% all in given down now

Matt. Thanks,

what saw time month. estimate change in in frame, next that's would just insulin build, didn't three we look think commitment July just very we've fourth that's I third we've market competitive we the was that that say the I really end year, and into the tried some When the continue. get take near-term August, didn't pressure. right. basically for we've pipeline. We think fair that which we and this really pump Unfortunately, of to seen intended and continued the momentum soft we saw I trend June, our We mentioned saw guidance in we a at back we've that absolutely it And market why the properly it, historically difficult them. to And really questions. with or to to quarter September, in line of the have third quarter. align gains. see doesn't you a the these And expectations recalibrated for quarter predict for account dynamics, change concluded in our most expansion it's exciting

a of a great that have and great execute, in we've can We got future. confidence our team deal

pump forth pragmatic I don't another ability going set back the I providing go that this will numbers now these company happened when a market quarter, well. and continue the you Dexcom forward. what's they consider think we to I it's that say sensors being of their achieve as wanted them. have predict we to matter to and not and to about conditions think

upside schedule this that. sure come that product definitely for We them don't through -- that new I a I'm helped we probably quarter. from has Certainly, time And think going have there's that year. haven't got So on. next that some

Okay.

out disruption the are speaking it's What you the of like John roll either or bit but for you of year, Okay. early would that's then you're are the next Vosseller, for plans great. as year. waiting I approval And filed The Leigh to that. get getting new by still that product? end of people sounds assume Mobi, And the a expectation, little already it product, then

things that So as year how cadence does next goes? as far impact

say any pausing seeing at this we're wouldn't point, I that Yes. Matt.

out a I wanted sometime considering next just that early. get Choice done were year, get The people program there did in bit in team great that filing. We if job think happening. it's if the We it has from advance we that to so in. a the get delayed

think to up are ready, manufacturing with going getting them plans. and to are just our more first in that initially plans get think be And we're what speed now, training specific the focused we'll product our get physicians half. to working on anticipating I activities this Right on on to closer time. as be to in I point clearance, the commercialization we're get working Our we going clearance and our at marketing about

you. Thank

from next Our of comes Steve question the Oppenheimer. Litchman line with

now is line Your open.

for wondering, Just you've I do for the to benefits what historically, thoughts to of 'XX, the your program you the and quarter and guidance pipeline? the factor in not that. new relative your included XXXX, fourth know on extent pricing

see in what or to of your are update? sort Just want including not you

be question, any from factored way. we launches. it baseline the everyone could to together underscore, the so asked the Steve. important product of you benefits too, in appropriate new and the say have same Sure. range. of an XXXX, for that for come get it's to glad We wanted same I'm not thinking set the Thanks And I I'll in that question, would

I in think different out. versus modeling it people are

think we We're make a that for exceed early we're we're the the environment. we necessarily remainder that can is this as confident about built of achieve that as so facing. not the start into assuming -- any baseline to giving offered we've the programs the year next on to good to that, based this what year relief caution that feel headwinds dissipate. related even we've we from guidance and And we And sure again, it's and

Okay. it. Got

that mentioned to the that's progressing. program, work that, You relative X the clinical type

positive On potentially changes there's What's to pumps? benefit regard X? And heard CMS. that potential the the with type side, insulin the the some been to CGM how market in updates to NCDs latest that relative may you've from

the now that to We were past. the that's work some happening thinking ways means encouraged the that would Sure. it very they're when they say open at right is see CMS that the the made and to about they've on underway insulin some receptive that approval the changes side, CGM set to I in which up pumps. of relates of processes

It's to a difficult diabetes approval it's more type just that get process. access. person through the today, with the not get so And X can't

that app CMS is of what process simpler to And the looking so access simplify would we're some forward make considering easier. and which and

don't know, As they very quickly. you well move

I'm taking anticipating can happen in not So this or we're recommendations at in I two. some something into that least. the feedback say next see of the that and get quarters to consideration. some month is or it's going But coming we'll And underway hopeful they're the

you. Thank

of comes Matt with Taylor Jefferies. question the next from Our line

now line Your open. is

the trends same saw? first September the what if that for about could be pick see now, us And in to up you ask up versus So, specific want sense how you could give until for what you I about diverged? more any normally you you that thing was saw, would like any

the led a say first trends to to across And up a back but out that the nearing we momentum saw least I moments would persist. Sure. in we at starts that August about in that few didn't year getting their spot point you end closer has and of October come discussed we see which quarter, I ago, meeting typical And see to say that would August, the builds the were levels. can year. believe to more bright seasonality, as deductibles the even us more or as traditional people the

is going have a next to side And expected new cautious better, be and continue that point in quarter get spot might we're will will said, new opportunities, just moderated do an we so number launches into see quarter. even our things consider John growth inflection get U.S. here the we great in when seen ahead still pump that to fourth a think us that the We do the of But predict year. to and not adding I be as brand these maintain have that anticipate this renewals until in mind in in trend from in pumpers the rate expect quarter, to which this try not we're we of going and past. the this the increased could of this and growth fourth in the keeping the third for And shipments as as product high quarter we year. from a step-up persistent next more out end the period even can that looking through

least of let in still Great. product I competitive guess launches seen historical any the ask from you or expectation? of at points pressure trialing typical Okay. Leigh. I know me off. you've pressure characterized that past, that you've the certain that lasting new the Or a at change quarters learnings follow-up, what And it Is to couple then expect here? is tail and a tends

August. same end factored pressure would as year. launch intense following the in, having I That now at I slightly some we've is from level one the keeping of through through the two different end seen we Yes, that a the trickle full puts pressure of right talked into what quarters say to of typically occurred could most the next year of about maybe the the What launch, still year. pressure of and beginning

our on that normal expectation. reference, based historical a is So

Thank you.

the Craig-Hallum. of comes Alex line next Our from question with Nowak

open. line is Your now

you pump market too million With the to do pump just declined get this to users the U.S. this competition, point? at challenges, quarter, XXXX growth organic think all by goal is optimistic X

that our think I does fact product guidance that into account the activity. include Alex, any new take have not you to XXXX

next -- Mobi remember, we the have you the new from lower GX launch and And as year we integration. market. to if So after it's products as in well anticipate than it's Abbott start, we would the the intend

to I'd of our going that competitor continue the not And is introductions. is the exceptional we growth experiencing consistent look to mention forward. we're and right that's growth want pump by insulin that think -- There's sure also capture we as I that are that product important because market, to growth new make to followed recalibrate near-term be expanding going to and that close linear. So our we share. we periods expectations an moderated to we're be to now, continue on want consideration that focus you

We have of history a innovation.

have the that pipeline an execute. ability can demonstrated have great we exciting we team, we've achieve to confident we this. and And a are and We

a I challenging in on now, some haven't economic we're spell through think product because right are going market conditions the there. there new at out a and got we muted this point time,

different. very be will year next think I

year, maybe And going taking hit mean, side I Difficulty] profit [Technical And then Understood. seen into there's a those seen we've the start to definitely the revenue increased comments it off. investment. this but pretty applying the to healthy of EBITDA level EBITDA issues that We've gains.

investments spend, need about revenues of slow you Or more So that do I and to those do to the investment, and those incremental to guess, from year to about going you're start that you line? expect profits thinking thinking flow you're keep investment and start new into next products up?

particularly I we're through I Thanks is think the future, question that. talk our customer that line. renewing our and continue R&D at will that And that something keep say customer to can to a And believe the rate. high satisfaction keep and in accomplishments every patients sure credible that of the our about level make we that for people drive and we It's service in operations that, we what's coming high can Sure. to customer day. renewal to we experience have. best as that today the And right making it top long-term investments would on second

as go moderated the about period in think that's those so forward. long-term investments they a need to something are of what growth, And future. to and tie about Even think we'll we we how

being very very spending be be we'll we'll that, conscious and of goes. So where and closely monitoring our about prudent

call, earnings in give we color the what I more would on And profitability we for But areas. investing year-end those so critical year. to say, will are targets get keep as closer next our we'll

you. Thank

of comes question line next from with Our Bedford James. Raymond Jayson the

now is Your open. line

in And I the played you like there. and $XX couple look a guess the I out still your kind a Just differently this? I'm you will than here? pressures outlined back, expectations. when million for dynamics initial what come me. 'XX with of it lower looks over bit But appreciate struggling

from and continue they customers, I that sales continuing second I in guidance, were that to caution the COVID competitive outlook think changed considering of conversations Coming our sales they was set the anticipating didn't with I we lot people that when and sensitive the force And into think part are Jason, pressures. with are And began reflective were the We factors now. that macro We that financial having a in cautious our investments the people it that mean, dramatically, became the it. right the definitely it's we people economic latter definitely a just, -- that's come who now. hear hear just seeing routine I have basis, I think thing saw meet with I more on originally potential we to making a anticipating think, pressures. more think we the the we anticipate quarter. current situations. of year, were to environment But organization and

still in And of it's macro, are kind is plans there's that pump extended that like comfort it fact utilized, XQ? your the was being that more there

we make great the flexible little about more program, so think did pressures. once that certainly that and so the available. handle deal do it that can experiencing -- they to make It's we've aware we've individuals it to more interest, with this approach. very something mean -- to a a the uptake I really that again, we it's wanted about lot of financially. positive is to of accolades but that people and hearing try something we been a we And think that's these seen we're right do really far, early program But with talk about heard we I work far. available a Well, or was we've the

any you have change seen attrition? And in

Absolutely not.

to In things seen have at actually there lot growth attrition. in seen we've that's we've of look fact, great about, mechanisms we that's one a talked of as what out the renewals. we've And --

and with at the wirelessly mobile look we update see data, we iOS Android and the current apps have don't We that that, attrition cloud there. to and

We also see we have who customers, attrition connections a close our great with there. sales and organization don't very has

think the We and And product on have Tandem to but new and people the the is. tried that is that's who focus starts, it, have our battleground back technology. come really have they where I

Thank you.

Baird. from Our line Jeff Johnson comes the next question with of

Your line now open. is

me. Two, sure to want understand just this a follow-up on I maybe inventory. for make here I just first eight Leigh, off, comment international weeks the

all international we mean, markets would So like math pump then as of as international subtract have it XX that I like Is is headwind math like just the points sales off eight there's into works? XX growth, year? then weeks, over next kind the to XX-point grown so next of weeks growth is does assume think XX%, And we how simple If a year? in new XX%, fall next year.

Yes.

to way, we're but going differently little same I'm the to here. think get bit and I of going it it a point frame

If of which you of think shipping this U.S. XX% the our markets, XX% our all, just it, about outside is about for European first represent a out, sales to

rate the our be a think I is. say, important could it this be the So of OUS our is would if for us demand, to quarter, start -- you a next here and what as But this of what it center demand like you're of to to rate one the two always is year. half that first the to months indicative it our It growth of still customer think what not in about impacting markets. year. But so next run in for right real to a for it's on as closer will monthly -- fourth be or could want again, impactful and shipments will we basis, about consider why sales the alignment look to shift we have better that shy distribution you European to is true percent

then and just we this phase-in year, be up reflective. work need through more middle through next should so to it period of And

of I going tonight, you you don't momentum one and I'm or at XX, and the know it. frankly to investors question from how of of sales? is All up? of to And And take has I'm couple a I'm already your to business. September guess figure on sales the visibility trying slow it's, our filter your slowdown. I what still come where to to to the gotten a big answer back the does September out then just press a hadn't dynamics? you U.S. Does on weeks the returned of to conference that report? and started end right. just the That's Had a in used from kind helpful. words U.S. were And to getting September see It's question kind of how the quarter, shift Or shift John, we XX timing this

I it way to September. enter it Yes. I that to visibility strong begins month comprehended we had have when we began the as sort much quarter we our the to it we October in think Typically, see just again, now in we pretty I it, additive began and what look off. to in line of And continues than shift, it And guidance. to to said, we think August. here, it accelerate. October, to Leigh momentum I it it's August. describe just is as saw sales mean in a It see with And said, we've and to in weaker the fourth at And revenue tail case has think particular like this started -- off. -- that But once tail And grow. the we was you began best tail anticipated. off, that's of it. I And

mean Okay. don't me, to it off, be caught your still I use stock on for few that tail seems I word and understand get guess if surprise people just XX. has it's a going good by the to tomorrow. today, But that. began to why it has not I September momentum quite returned I obviously,

I'm that comments guess tail still the off you just understand use. trying I So to versus

of had it XX, would confidence the we September was really in that half that as I the off in Yes. the month. say still of tailed numbers. It latter

Thank you.

from comes with Wuensch Joanne of next line Citi. the question Our

is now Your open. line

actually Anthony for on It's Joanne.

about versus I some in guess, XXXX? first the about just you how one. flush on Just the puts takes of thinking margins out second maybe dynamic? half talk more can And you're and half

Sure.

for puts and about takes of color about And Anthony. think XXXX, term. given to much talk to at this heard some But to you now said and longer margins haven't to thanks, the you So I happening we you can what's if think which about how point, I correctly? the

from And new by years, five so gross products. margin in perspective, goal a order really in driven it's our achieve to XX%

and the additional it pressure just by points of should from to year. earlier coming that's of mostly more supply higher whole And points we we half that have next about now, are middle so cost challenges, margin purchased we when from the system than should through expansion to Mobi that scale, inventory alone right also as gets today. chain year. We will add a two where it that this I drive that have of worked gross

plague XXXX. in to So little us bit a it will continue

The contribution. new still we smaller normal the that, from in at price gross expect products. be will again, margin other we say, of another improvement to And factors get would continued come product set have look and technology good I also that I but meaningful real driver we drive new infusion our I efficiencies -- as ahead. from our that manufacturing just margin, we would have shouldn't gross should beneficial look mentioned example lean as a nature, But initiatives,

Thank you.

of America. with from Our Bank the question comes next line of Steed Travis

open. now is line Your

and new important gross of XXXX. which just lot mix. now, on margins, margin of I margin know right percentage a follow-up is your want there's drive the variability for little to bit big commentary more a on starts I a

like willing to Or XX% So revenue are to positive like gross in to be year, where next growth? can to margins I which positive don't be they for a those be still couple XX% this still got stay would And negative? you've know go those likely margins, you'd X% year? to be X% EBITDA XX% do things, commit an environment of if can above still

say importantly, giving just of at We most very not for we're thinking But color and I clear year we how will rest drive rights about fact puts point I to it's mean, that be to got the pumpers out, renewal make be takes, the continue that all it's sales. larger just that a to that line. Yes. That just some I the of much opportunity important lot sales first, about fresh. those point. next wanted wouldn't pump sure, margin, of new will on drive will the P&L XXXX one the pumpers. this on is And

XX,XXX opportunities This there about to almost year, were next XX,XXX. going you climbed XX%. if year, in so grow last it's U.S. so think And it about about the year, new And that

opportunity that, some have that the with we So patient the will if from seeing still you help renewals side of that new on pressures think of alone a healthy we're about things.

I that gave renewals Okay. kind pressure any people what do a in you to still you just then baked to if see actually got XX-XX XXXX? competitive And I and if it's going real see historically, you that versus to on shifting XX% stay you're any the you guess And but think of wins, XX% renewals. my is been percentage of you've in XX%, on competitive up? to starting if come Or MDI that the expect, the don't same? Or have the those assumed if as quarter, XX%? you this pressure know follow-up opportunity in was competitive mix

Sure.

with coming think, them. So would rates table. already XXXX with look already clip. opportunities more renewals, growth new faster half first, when exited than with come to I just we're progress say opportunities last, alone, of In metric we we year that the that progress I was other as have renewing the market, about this to at we'd about And those year renewed we at a gave

along. So actually rate we that move is as renewal quarter improving each

an people. going you when bodes for well very to that XX,XXX opportunity So, basis, to XXXX think exceed it's

seen, So quarters. it the with renewal challenging few said, I it think I strong that And actually like -- dynamics even and impacted improved these progress. over not we've make that we've last has should all I a our point,

And customer back it we to much love So about how don't goes strong the people leave. much feel they how Control-IQ, and again, they very loyalty, pump, that. to love want

number what to as particularly of call large about environment, back and And we guess we've next unusual is all dynamics, so down year, it. the opportunity launches. in just to I've been about but sheer give over because we launches think next we're won't probably feel to competitive always do to those has I I'll new pumpers the opportunities of time, When bit we'll good with commentary, to little exceptional our moderated attract expect conversion would more now. new to customer up we that what the been those expect more along, go expected now, still growth which it piece be start you a of saying But as start very where growth after seeing we product be year

Josh [Operator Instructions] Jennings question comes from Our with next Cowen.

Your line is now open.

granular for to get but dynamics just just the are hoping I them a programs. patients one XX I I CGM the wanted whole the the these helping to And are channel to these the and patients t:slim cartridges? the to details get kind And Or for experience help guys it understand -- has these If question, and medical just not of CGM, benefit CGM can better understand better access. the in just only you Sorry, pharmacy for putting their ask to do what to is -- access wanted was pump, system, is do of patient's and deductible. programs customer pump? infusion they through the reason pump some their sets more the help impact place the the I deductible? to get the disassociate on to the patients finance the

plan, from plan. some plan In thing way. it's Thanks in care, health a it Josh. medical, pharmacy so plans, some is. to question, that much the it's varies what whole you the matter Sure. versus deductible about no for One thing deductible channel for mentioned your In

I that a -- all, there. And is complexity think so there's of first

CGM, Secondly, is through a not one highlight their thing when I us. obtains that it's would customer

in depending work as well. on So them, that through Dexcom for offers for whatever they again plan channel their Dexcom

all that to low offer long so in purchase. to it's on environment do hope models they can as four very buy as easier are So we extent that the program business coinsurance other we flexible, as month And help a is focused digest making years, that that and when some $XX about or offering when payments move financial still as have And the like forward through plan on pump. made they the we their terms might an those pump we is can them that that patients the patients any what and help deductible trouble equalize be having to also this. decisions who to is amounts and concerns

reimbursed a used their is financing then is for into year? assumptions so intact? these XXXX, Or year? -- to follow-up And commentary the for where there just of their kind you a just of would or Tandem Medtronic a be -- for of just baked the a the next get patient they pump about thinking high-level one follow-up. programs, any current XXXG, launch the deductible just accesses Are 'XX that And on potential to benefit -- remain through there deductible do is

the take I'll Sure. question on deductible. the

which will they can regular process it finance $X,XXX, dictates insurance, owe, Separate them. that, and think that about come they So much we you from as it for us say to they when call the through how they

all how rank we put doesn't check into basis. to And when on us, plan. it's change how it the being help about need the It's it so installment insurance an through more at processed just them to they

And which in in competitive competing think Josh, I today the that countries potential it relative product to market, we're operate. we in next OUS against the effectively the

on at And look the improvement it's so I think but product. it an that the we as still product, same algorithm the to incremental

we confident competing against feel effective it. we be will So

Thank you.

Our Blackman next with question comes from Matthew Stifel. line the of

Your is now open. line

Tandem on question a Just the Choice.

then opportunity? you it? a it You've have first offered some eligible XX% a to way XX%, in upgrade or And one Can I know frame that pathway offered just if this give when you after way follow-up did of sense there's just patients past. don't quick of what uptake it, that. you that sort was to the of frame

that major a important -- offered publicly, very is difference And to it's pump this part what software. is choose. Thanks, The they standard time, one you People have would that that say to I from before, but it helps haven't that Sure. percentage truly Matt. when we people were has we ever low wasn't have moving think opportunity if updatable the upgrade. comfort we pump I too, look that of a it a quantified I back uptake. most can something they

a interact platforms, see there Control-IQ algorithm. choice a with a is Mobi, It's versus, that offering they it's want the with difference matter in to two excellent of just a It's data So between same the or how significant pump. choice. their

And see in so has past. but uptake us about low the or percentage the it very always will for been be the it, interesting to

time on can refining think prepared some And the it. in comments you after you with would be I of Got if would the these what Mobi, if some you that the refinements Mobi, doing file understand the you on correctly? remarks. hear give And Mobi. you're refine -- you're of with? playing get taking flavor I mentioned to that then for you the case, that's of And Difficulty] some [Technical some us Did were you features what made John,

we're Yes, a a going there's work no things like product, to and working manufacturing we're of that. actual the changes we're now workflow and that's doing resolve that the occurs the and require what mean right normal is to on debt that there's between that of are now between submission and I part essentially filings. the doing. introduction additional focused increasingly really, It's the clearance. But it's this technical

no all currently I'm showing for today's further questions This you participation. this at conference time. call. does Thank conclude your And

You now may disconnect.