Tandem Diabetes Care, Inc.

Good day and thank you for standing by. Welcome to the Tandem Diabetes Care Q3 2024 Earnings Conference Call. At this time, all participants are in a listen-only mode. Please be advised that today's conference is being recorded. After the speaker's presentation, there will be a question and answer session. To ask a question, please press star 1-1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 1-1 again. I would now like to hand the conference over to your speaker today. Susan Morrison, Executive Vice President and Chief Administrative Officer.

Hello, everyone, and thanks for joining Tandem's third quarter 2024 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. A list of factors that could cause actual results to be materially different from those expressed or implied by any of these forward-looking statements is highlighted in our press release issued earlier today and under the risk factors portion and elsewhere in our most recent annual report on Form 10-K as updated by our most recent quarterly report on Form 10-Q. We assume no obligation to publicly update any forward-looking statements, whether as a result of new information, future events, or other factors. Today's discussion will also include references to a number of GAAP and non-GAAP financial measures. Non-GAAP financial measures are provided to give our investors information that we believe is indicative of our core operating performance and reflects our ongoing business operations. We believe these non-GAAP financial measures facilitate better comparisons of operating results across reporting periods. Any non-GAAP information presented should not be considered as a substitution, independently or superior, to results prepared in accordance with GAAP. Please refer to our earnings release issued earlier today and available on the Investor Center portion of our website for a reconciliation of these measures to their most directly comparable GAAP financial measure. Participating on today's call, are John Sheridan, Tandem's President and CEO, and Lee Vossler, Executive Vice President and Chief Financial Officer. Following their prepared remarks, the operator will open up the call for questions. Thank you in advance for limiting yourself to one question before getting back into the queue. I'll now turn the call over to John.

Thank you, Susan, and welcome everyone to our call today. 2024 has been a dynamic year. The third quarter marked a milestone achievement for Tandem, as we delivered the highest quarterly sales in our company's history. This is a result of strong execution of our strategy to drive growth through our expanding product portfolio and is underscored by outstanding feedback on our newly launched Tandem Mobi. I am also very pleased with our operational performance as we return to positive free cash flow in the third quarter. Driving greater leverage in our business and using innovation to improve gross margins continue to be an important focus for our company. In addition to record sales and strong operational performance, this quarter also marked a return to year-over-year new pump growth in the United States. We have seen growth from MDI users over the past two quarters, which is evidence that we are furthering our goal to expand the insulin pump market. The favorable U.S. customer data points we observed in Q2 continued in Q3. Most notably, more than half our pump shipments were new to customers, and over half of our new customers adopted a tandem pump for multiple daily injections. We also once again observed a higher rate of disposable pump converters compared to years past. Our increase in customers coming from MDI is an important shift that we anticipate will continue as our portfolio attracts more people to insulin pump therapy. We also continue to see customer enthusiasm for both T-Slim X2 and Tandem Mobi in the quarter. These results underscore our strategic position that there is no one-size-fits-all solution in insulin therapy management and that the needs and preferences in diabetes technology create a highly segmented market. It also further indicates that there is a demand for both platforms in the large and under-penetrated market we serve. For T-Celin X2, we continue to hear customer enthusiasm for the all-in-one convenience with its controls being offered on pump, the freedom to disconnect, and our best-in-class Control IQ technology. For Tandem Mobi, its tiny size and unparalleled versatility are redefining wearability. These attributes, in combination with our Control IQ technology, are driving high satisfaction scores and are attracting a younger demographic compared to T-Slim. Tandem Mobi is pioneering a new category of insulin pumps and market awareness is building as the diabetes community has increasing exposure to our new platform. Turning to our performance outside the United States, we once again demonstrated growth in our pump placements and a high rate of customer retention. The typical seasonality we see in 3Q associated with the European holiday season was offset by greater than anticipated demand, along with the timing of certain distributor orders. I'm proud of our scaling commercial efforts outside the U.S. and of the awareness we are building for Tandem, our technology, and the improved clinical outcomes our customers experience with Control IQ. A reflection of this was our recent award of new tenders, which will provide enhanced customer access in select countries beginning in 2025. Outside the United States, we also had a regulatory win in the European Union with the clearance of T-Celnex 2 for use with Limjev ultra-rapid acting insulin. Ultra-rapid acting insulin is a popular choice for people living with diabetes due to its response time, and this is the first step in a broader global strategy to support this offering. The opportunity to improve the lives of people living with type 1 diabetes outside the United States is even greater than in the U.S. It's a strategic focus for us as we look to 2025 and beyond. With that, I'd like to turn the call over to Leigh.