TNDM

Strategic Business Model Transition

• Launched pay-as-you-go (PAYGO) reimbursement in the pharmacy channel in March 2026, with full implementation work continuing through Q2 to update end-to-end prescribing, customer support, and order fulfillment processes
• Already achieved 45% formulary coverage, near the high end of the company's 2026 full-year target, with early traction putting pharmacy adoption slightly ahead of internal expectations
• U.S. average monthly pharmacy supply ASP is currently higher than the original $350 per month modeling assumption, with early results encouraging for the long-term pharmacy strategy

Commercial Organization Modernization

• Deployed a new global CRM system to improve sales force efficiency, deepen customer insights, and support both the U.S. pharmacy transition and new international direct commercial launches
• Completed early direct commercial launches in the U.K., Switzerland, and Austria, with a planned direct launch in France scheduled for Q4 2026 to improve customer access and strengthen long-term financial performance in these markets

Product Portfolio and Innovation Progress

• Expanded indications for Control IQ+ to include pregnancy in the U.S., and received CE Mark approval for pregnancy and type 2 diabetes use internationally, maintaining the product's competitive advantage as the AID system with the broadest available indications
• Launched Tandem Mobi expansion globally, with plans to launch the pump in more than 10 international markets by the end of 2026
• Completed expanded CGM compatibility: T-Slim is now compatible with Abbott's Freestyle Libre 3+ in 7 international markets (with additional markets coming in 2026), and Dexcom G7 15-day sensors are compatible with Mobi and T-Slim in the U.S. (with international compatibility coming soon)
• Submitted the 510(k) application to the FDA for the Tandem Mobi tubeless feature in Q2, which will allow existing Mobi users to switch between tubed and tubeless wear via a supply change, creating the world's first tubeless AID system with extended-wear technology. Pre-commercial launch preparations are underway, with a scaled launch planned for 2026 following FDA clearance
• Launched the new AutoSoft Plus infusion set in Canada in late July 2026, with plans to expand to the U.S. and other markets later in the year to help mitigate current supply shortages from the company's primary infusion set supplier. The next new infusion set, SteadySET (cleared for 7-day wear), is scheduled to launch in H1 2027 and is currently in manufacturing scale-up
• Advanced development of the next-generation ATAnet closed-loop automated insulin delivery algorithm in collaboration with the University of Virginia, which is designed to operate without required meal announcements. Received FDA IDE approval in Q2 2026, with a pivotal clinical study planned to start later in 2026

• Management reaffirmed full-year 2026 guidance, maintaining a worldwide sales target range of $1.65 billion to $1.85 billion, with U.S. sales expected between $730 million and $745 million and international sales expected between $335 million and $340 million • Full-year 2026 gross margin guidance is maintained at 56% to 57%, with adjusted EBITDA margin expected between 5% and 6% of annual sales, with peak full-year margins expected to come in Q4 2026 • Full-year 2026 stock-based compensation is now expected to total approximately $65 million, a downward revision from the original expectation of $80 million • Q3 2026 guidance calls for worldwide sales of approximately $265 million: $180 million in the U.S. and $85 million internationally, accounting for typical summer seasonality and modest improvement in infusion set supply • Q3 2026 gross margin is expected to be approximately 56%, with adjusted EBITDA margin expected to hit approximately 2% of sales, driven by the temporary dynamic of pump adoption outpacing supply conversion in the pharmacy channel • Management expects the highest full-year margins will be achieved in Q4 2026, driven by growing pharmacy supply adoption, U.S. DME pump sales seasonality, and expanded direct operations in Europe

Tandem Diabetes Care reports worldwide and regional segment performance for Q2 2026:

1. Worldwide segment: Total sales hit $255 million, growing 6% year-over-year (5% in constant currency), marking the 10th consecutive quarter of record quarterly sales. Total pump shipments reached 33,000 units. Gross margin for the company was 57%, improving 5 percentage points year-over-year and 2 percentage points sequentially. Operating expenses totaled $159 million, flat year-over-year, while adjusted EBITDA margin reached 3% of sales, the fourth consecutive positive quarter.
2. U.S. segment: U.S. sales totaled $179 million, growing 5% year-over-year. Pump shipments hit a Q2 record of 22,000 units, growing 7% year-over-year. Pharmacy channel sales under the new pay-as-you-go (PAYGO) model reached 10% of total U.S. sales in the first full quarter of implementation. Renewals account for over half of total U.S. pump shipments, growing at a double-digit rate year-over-year.
3. International segment: International sales totaled $75 million, growing 7% year-over-year (6% in constant currency). Pump shipments reached 11,000 units, growing 19% year-over-year. Direct channel sales now represent 13% of international revenue, more than doubling prior levels amid the company's transition to direct operations in key European markets. Results included a $3 million headwind from distributor inventory adjustments related to direct market transitions.

• The company continues to face supply constraints from a key third-party infusion set supplier, which negatively impacted both U.S. and international sales in Q2 2026, with a larger-than-expected impact on international sales due to late delivery of allocated inventory that could not be processed before quarter end. Management expects Q2 2026 was the quarter of greatest impact from the shortage, with supply availability expected to gradually improve through the second half of 2026, though some residual impact will remain through the end of the year • The PAYGO pharmacy transition is an end-to-end business model change that requires sustained workflow and process adjustments for prescribers, internal teams, and payers, with near-term revenue headwinds from $0 upfront pump pricing in the channel that temporarily pressure gross margin as adoption ramps • Tandem Mobi tubeless launch timing remains dependent on FDA review and clearance, with uncertainty around final approval timing that could delay commercial launch • The type 2 diabetes market expansion requires ongoing market development and education for primary care providers and patients, and a positive CMS ruling on the current C-peptide requirement is still pending, with the outcome uncertain as of Q2 2026 • New product launches typically carry temporary gross margin headwinds until manufacturing and sales scale are achieved, which could pressure margin performance in the quarters immediately following the Tandem Mobi tubeless launch

Q: What implementation frictions have emerged during the pharmacy transition, and how confident are you in hitting the full-year 20% pump shipment target for the channel? / A: Management notes only normal, expected learning curve frictions from the end-to-end business model change, with no major negative surprises. Early results are better than expected, with 10% of sales already coming through the pharmacy channel in the first full quarter of implementation, which reinforces management confidence that the ramp will stay on track to hit full-year targets.

Q: Given competitor reports of elevated retention issues in the type 2 segment, what has Tandem's experience been with type 2 patient attrition? / A: Tandem's type 2 attrition is only modestly higher than its type 1 attrition rate, and has remained stable over the past five years. The company intentionally focuses on selective patient targeting to prioritize patients with the highest likelihood of treatment success, which supports stable retention. Management is optimistic for a positive CMS decision on eliminating the C-peptide requirement for Medicare coverage expected in August 2026, which will drive future type 2 segment growth.

Q: U.S. Q2 new pump starts were flat year-over-year, short of expectations. What drivers will accelerate growth in the second half to hit full-year guidance? / A: Management notes that MDI conversion (the most critical long-term growth metric) grew mid-single digits year-over-year in Q2, with a steadily improving trajectory over the past several quarters. Upcoming drivers of second half growth include rising adoption of Tandem Mobi (which already accounts for more than half of all new pump starts), expanded CGM compatibility, and growing PAYGO pharmacy access that removes affordability barriers for new patients shifting from MDI to pump therapy.

Q: What is the current status and expected launch timing for the Tandem Mobi tubeless feature? / A: The 510(k) submission to the FDA was completed in Q2 2026, and the application is currently under review. Management still expects clearance and a scaled launch in the second half of 2026, with pre-launch preparations including HCP and internal team training, payer contract updates, and a limited early access patient program already underway.

Q: Will Tandem Mobi tubeless have a meaningful negative impact on gross margin during its initial launch ramp? / A: Like all new products, Tandem Mobi tubeless will see a small temporary gross margin headwind until sales and manufacturing scale is achieved, but the impact is not expected to be large or Meaningfully alter long-term margin trajectory. Management noted that a modest step-up in sales and marketing spend will occur to support launch awareness, which is already factored into current guidance.