Tandem Diabetes (TNDM) Reports Narrower Q2 Loss, Trims '23 View
Tandem Diabetes Care, Inc. TNDM reported an adjusted loss of 30 cents per share for the second quarter of 2023, wider than the adjusted loss of 24 cents per share in the year-ago period. However, the figure compares favorably with the Zacks Consensus Estimate of a loss of 54 cents.
On a GAAP basis, the loss was 55 cents per share in the second quarter compared with the year-ago period’s loss of 24 cents.
Revenues
GAAP revenues in the quarter came in at $195.9 million, down 2.2% year over year and missed the Zacks Consensus Estimate by 2.8%.
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, the company is now reporting adjusted revenues as well.
Tandem Diabetes Care, Inc. Price, Consensus and EPS Surprise
Tandem Diabetes Care, Inc. price-consensus-eps-surprise-chart | Tandem Diabetes Care, Inc. Quote
Non-GAAP revenues were $198.2 million in the reported quarter on 29,494 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 $142.5 million in the second quarter on a GAAP basis, down 2.2% year over year. This compares with our model’s projected GAAP U.S. sales of $151.9 million.
Non-GAAP sales in the United States were $144.8 million. Per our model, projected revenues were $145.8 million.
The company shipped 18,964 pumps in the second quarter, down 8.9% from the year-ago period.
Outside the United States
In the second quarter, the company registered GAAP sales of $53.4 million (same on a non-GAAP basis), a 2.2% decline from the year-ago period. Our model’s estimate was pegged at $49 million for this region.
Margin Details
The gross profit in the second quarter was $101.7 million, a 0.2% decline year over year. The gross margin was 51.9%, reflecting an expansion of 102 basis points (bps).
SG&A expenses rose 21.1% to $97.6 million in the quarter under review. R&D expenses increased 27.9% to $42.9 million.
The company registered an adjusted operating loss of $38.8 million in the second quarter compared with the year-ago operating loss of $12.2 million.
Financial Position
Tandem Diabetes exited the second quarter of 2023 with cash and cash equivalents and short-term investments of $507.2 million compared with $616.9 million as of Dec 31, 2022.
2023 Guidance
Tandem Diabetes provided updated sales guidance for 2023.
For the full year, non-GAAP sales are estimated to be at least $785 million (down from the earlier range of $885 million-$900 million). The Zacks Consensus Estimate for the full-year 2023 revenues is pegged at $888.2 million, way above the company’s expectation.
Full-year non-GAAP sales inside the United States are expected to be at least $575 million (again a slash from the earlier projected band of $650 million-$660 million) and non-GAAP sales outside the United States to be at least $210 million (down from the previous band of $235 million-$240 million).
Non-GAAP sales in the third quarter are anticipated to be at least $190 million. The Zacks Consensus Estimate for the same stands at 238.4 million.
In the third quarter, non-GAAP sales inside the United States are expected to be at least $135 million and non-GAAP sales outside the United States to be at least $55 million.
Our Take
Tandem Diabetes exited the second quarter of 2023 on a mixed note with better-than-expected earnings and a revenue miss. The company experienced nearly $2 million in sales headwinds in the second quarter related to the transition, which mostly impacted supply sales.
Moreover, a higher operating loss in the quarter is concerning. A slash in the earlier provided guidance is a major concern for investors.
Meanwhile, TNDM made new product innovations, including the rollout of Tandem Source, preparing for the launch of two new sensor integrations and receiving FDA clearance for Tandem Mobi. The company witnessed a record installed base globally for the t:slim X2 insulin pump, which is encouraging. The product integrated with the latest CGM technologies is set to be available this fall through a scaled launch in the United States. An improvement in the gross margin appears promising too.
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 Abbott Laboratories ABT, Elevance Health, Inc. ELV and Intuitive Surgical, Inc. ISRG.
Abbott, carrying a Zacks Rank of 2 (Buy), reported a second-quarter 2023 adjusted EPS of $1.08, beating the Zacks Consensus Estimate by 3.8%. Revenues of $9.98 billion outpaced the consensus mark by 2.9%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Abbott has a long-term estimated growth rate of 5.1%. ABT’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 12.4%.
Elevance Health reported a second-quarter 2023 adjusted EPS of $9.04, beating the Zacks Consensus Estimate by 2.5%. Revenues of $43.38 billion surpassed the Zacks Consensus Estimate by 4.5%. It currently carries a Zacks Rank #2.
Elevance Health has a long-term estimated growth rate of 12.1%. ELV’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 2.8%.
Intuitive Surgical reported a second-quarter 2023 adjusted EPS of $1.42, beating the Zacks Consensus Estimate by 7.6%. Revenues of $1.76 billion surpassed the Zacks Consensus Estimate by 1.4%. It currently carries a Zacks Rank #2.
Intuitive Surgical has a long-term estimated growth rate of 14.5%. ISRG’s earnings surpassed estimates in three of the trailing four quarters and missed the same once, the average surprise being 4.2%.
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