TNDM Stock Rises Despite Q1 Earnings Miss, Gross Margin Up

Tandem Diabetes Care, Inc. TNDM posted a first-quarter 2025 loss of 67 cents per share compared with the year-ago quarter’s reported loss of 63 cents. The figure missed the Zacks Consensus Estimate of a loss of 60 cents per share.

On a GAAP basis, the company reported a loss of $1.97 per share compared with the year-ago quarter’s recorded loss of 65 cents.

Following the earnings announcement, TNDM stock soared 18.6% yesterday. 

TNDM’s Q1 Revenues

Non-GAAP revenues amounted to $234.4 million, up 21.6% year over year. The figure surpassed the Zacks Consensus Estimate by 6.4%. (See the Zacks Earnings Calendar to stay ahead of market-making news.) 

GAAP revenues in the quarter totaled $234.4 million, up 22.2% year over year. 

TNDM’s Quarterly Performance in Detail

Tandem Diabetes reports under two primary markets based on the geographic location to which its products are shipped.

The United States

Non-GAAP sales in the United States totaled $150.6 million (same on a GAAP basis), up 15% year over year. The company shipped more than 17,000 pumps in the quarter.

Outside the United States

TNDM registered non-GAAP sales of $83.8 million (same on a GAAP basis) compared with $61.9 million in the prior-year period.  

Margins

The gross profit in the reported quarter was $118.4 million, up 25.1% year over year. The gross margin expanded 112 basis points (bps) to 50.5% despite a 19.6% rise in the cost of sales.

SG&A expenses rose 26.3% to $113.8 million. R&D expenses increased 8.6% to $50.2 million.

The company registered an adjusted operating loss of $45.7 million in the first quarter compared with a loss of $41.7 million in the year-ago period.

Financial Position

Tandem Diabetes exited the first quarter of 2025 with cash, cash equivalents, and short-term investments of $368.6 million compared with $438.3 million at the end of the fourth quarter of 2024.

TNDM’s 2025 Guidance

The company reaffirmed its full-year 2025 GAAP financial guidance.

GAAP sales are estimated to be in the range of $97 million to $1.007 billion. The Zacks Consensus Estimate for full-year 2025 revenues is pegged at $1.00 billion.

Tandem Diabetes Care, Inc. Price, Consensus and EPS Surprise

Tandem Diabetes Care, Inc. price-consensus-eps-surprise-chart | Tandem Diabetes Care, Inc. Quote

GAAP sales in the United States are expected to be in the band of $725-$730 million. Sales outside the United States are projected to be in the range of $272-$277 million.

Our Take

Tandem Diabetes ended first-quarter 2025 on a mixed note, wherein earnings lagged estimates but revenues beat the same. The company achieved record quarterly sales, both in the United States and internationally. This strong performance was driven by TNDM’s expanding product portfolio. Meanwhile, the expansion of the gross margin amid rising costs is encouraging. 

During the first quarter, TNDM launched its Control-IQ+ technology to include people living with type 2 diabetes in the United States. 

On the flip side, the company’s operating loss is concerning.

TNDM’s Zacks Rank & Key Picks

TNDM currently carries a Zacks Rank #4 (Sell).

Some better-ranked stocks from the broader medical space are AngioDynamics ANGO, Veeva Systems VEEV and Masimo MASI. 

AngioDynamics, currently sporting a Zacks Rank #1 (Strong Buy), reported third-quarter fiscal 2025 adjusted EPS of 3 cents, which beat the Zacks Consensus Estimate of a loss of 13 cents. You can see the complete list of today’s Zacks #1 Rank stocks here.

Revenues of $72 million beat the Zacks Consensus Estimate by 2%. ANGO has an estimated fiscal 2026 earnings growth rate of 27.8% compared with the S&P 500 composite’s 10.5%. The company’s earnings beat estimates in each of the trailing four quarters, the average surprise being 70.9%.

Veeva Systems, sporting a Zacks Rank #1 at present, posted fourth-quarter fiscal 2025 adjusted EPS of $1.75, which exceeded the Zacks Consensus Estimate by 10.1%. Revenues of $720.9 million surpassed the Zacks Consensus Estimate by 3.2%.

VEEV has an estimated long-term earnings growth rate of 26.6% compared with the industry’s 20.8%. The company’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 7.9%.

Masimo, currently sporting a Zacks Rank #1, reported fourth-quarter 2024 adjusted EPS of $1.80, which surpassed the Zacks Consensus Estimate by 20.8%. Revenues of $600.7 million topped the Zacks Consensus Estimate by 0.8%.

MASI has an estimated earnings yield of 3.5% for fiscal 2025 compared with the industry’s 3.6%. The company’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 14.4%.

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This article originally published on Zacks Investment Research (zacks.com).

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