Tandem Diabetes (TNDM) Posts Wider Q3 Loss, Trims '23 Sales View
Tandem Diabetes Care, Inc. TNDM reported an adjusted loss of 38 cents per share for the third quarter of 2023, wider than the adjusted loss of 27 cents per share in the year-ago period. The figure also missed the Zacks Consensus Estimate of a loss of 35 cents.
On a GAAP basis, the loss was 51 cents per share in the third quarter compared with the year-ago period’s loss of 76 cents.
Revenues
GAAP revenues in the quarter came in at $185.6 million, down 9.3% year over year and missed the Zacks Consensus Estimate by 4%.
Tandem Diabetes Care, Inc. Price, Consensus and EPS Surprise
Tandem Diabetes Care, Inc. price-consensus-eps-surprise-chart | Tandem Diabetes Care, Inc. Quote
In September 2022, the company began offering the Tandem Choice Program to eligible t:slim X2 customers to provide a pathway to the ownership of its newest hardware platform, Tandem Mobi, when available. Based on that, Tandem Diabetes is now reporting adjusted revenues as well.
Non-GAAP revenues were $193.9 million in the reported quarter on 24,831 pump shipments worldwide.
Quarter in Detail
Tandem Diabetes reports under two primary markets based on the geographic location to which its products are shipped.
The United States
Total sales in this region came in at $130.2 million in the third quarter on a GAAP basis, down 10.8% year over year. Non-GAAP sales in the United States were $138.5 million. The company shipped 16.842 pumps in the third quarter, down 17.4% from the year-ago period.
Outside the United States
In the third quarter, the company registered GAAP sales of $55.4 million (same on a non-GAAP basis), a 5.3% decline from the year-ago period.
Margin Details
The gross profit in the third quarter was $89.8 million, a 14.1% decline year over year. The gross margin was 48.4%, reflecting a contraction of 270 basis points (bps).
SG&A expenses fell 5.7% to $79.3 million in the quarter under review. R&D expenses increased 14.1% to $42 million.
The company registered an adjusted operating loss of $31.6 million in the third quarter compared with the year-ago operating loss of $16.5 million.
Financial Position
Tandem Diabetes exited the third quarter of 2023 with cash and cash equivalents and short-term investments of $498.2 million compared with $507.2 million at the end of the second quarter.
2023 Guidance
Tandem Diabetes provided updated sales guidance for 2023.
For the full year, non-GAAP sales are estimated to be at least $765 million (earlier $785 million). The Zacks Consensus Estimate for full-year 2023 revenues is pegged at $787.5 million.
Full-year non-GAAP sales inside the United States are expected to be at least $575 million (unchanged) and non-GAAP sales outside the United States to be at least $190 million (down from the previous outlook of at least $210 million).
Our Take
Tandem Diabetes exited the third quarter of 2023 with lower-than-expected earnings and revenues. As anticipated, the company experienced near-term pressure as customer enthusiasm builds for the upcoming broad availability of the new products. A higher operating loss in the quarter is concerning. Additionally, a reduced sales guidance for the full year does not bode well for TNDM.
Meanwhile, it has been a transformational time for Tandem Diabetes, as the company continues executing multiple near-term product launches while implementing scalable systems and processes to support global operations and leverage its infrastructure. The excitement around the launch of the new sensor integrations and the Mobi Pump platform is particularly encouraging.
Moreover, during the quarter, Tandem Diabetes reached the milestone of full U.S. healthcare provider availability of Tandem Source, the second-generation data management application.
Zacks Rank and Key Picks
Tandem Diabetes currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader medical space that have announced quarterly results are DexCom DXCM, Medpace MEDP and The Ensign Group ENSG.
DexCom, carrying a Zacks Rank of 2 (Buy), reported a third-quarter 2023 adjusted EPS of 50 cents, beating the Zacks Consensus Estimate by 47.1%. Revenues of $975 million outpaced the consensus mark by 4.0%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
DexCom has a long-term estimated growth rate of 33.6%. DXCM’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 36.4%.
Medpace reported a third-quarter 2023 adjusted EPS of $2.22, beating the Zacks Consensus Estimate by 8.8%. Revenues of $492.5 million surpassed the Zacks Consensus Estimate by 3.4%. It currently carries a Zacks Rank #2.
Medpace has an estimated earnings growth rate of 16.2% for the next year. MEDP’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 14.6%.
The Ensign Group reported a third-quarter 2023 adjusted EPS of $1.20, beating the Zacks Consensus Estimate by 1.7%. Revenues of $940.8 million surpassed the Zacks Consensus Estimate by 0.2%. It currently carries a Zacks Rank #2.
The Ensign Group has a long-term estimated growth rate of 15%. ENSG’s earnings surpassed estimates in all of the trailing four quarters, the average surprise being 1.5%.
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