Good day and thank you for standing by. Welcome to the Tandem Diabetes Care Second Quarter 2025 Earnings Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Susan Morrison, Executive Vice President and Chief Administrative Officer. Please go ahead.

Hello, everyone, and welcome to Tandem's Second Quarter 2025 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 which are described in our press release issued earlier today and under the risk factors portion on our most recent annual report on Form 10-Q. Today's discussion will also include references to a number of GAAP and non-GAAP financial measures. 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 and other use of information of our non-GAAP financial measures. Today's call will be led by John Sheridan, Tandem's President and CEO, who will be joined by Leigh Vosseller, 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 in the queue. John, you may begin.

Thank you, Susan, and thanks, everyone, for joining our call today. Looking back at the first half of 2025 and the second quarter in particular, I'm proud of the progress our team has demonstrated. We achieved record second quarter sales, both in the U.S. and internationally. We've strengthened our business model by progressing our multichannel market access strategy, including accelerating our pharmacy channel initiative. In addition, we made meaningful progress in transforming key business systems to improve our commercial team's effectiveness and increase profit margins. Lastly, we achieved significant product development milestones in Q2 that keep innovation at the heart of our business and laid the foundation for future growth. We'll be speaking to each of these accomplishments on today's call, and we'll also provide color on how we're thinking about the back half of the year. Starting with the commercial update. In the U.S., we saw year-over-year increase in pump shipments. This includes continued double- digit growth in renewals. Renewals were just over half of our pump shipments and is a trend we anticipate will continue through the end of the year, which demonstrates our strong retention. Our growth in pump shipments also reflects the adoption of our technology by people using multiple daily injections. People converting from MDI once again made up about 2/3 of our new pump starts this quarter, which is a reflection of our continued focus on attracting people who are new to pump therapy. We continue to be an industry leader in new durable pump starts. This is a testament to our technology and the transformation we've been making in Tandem's commercial organization. We broadened our operations and refined processes while investing in systems and talent. Our technology also continues to stand out among customers and health care providers with #1 ratings in categories…

Thanks, John. As a reminder, unless otherwise noted, the financial metrics I'll be discussing today are on a non-GAAP basis. Reconciliations from GAAP to non-GAAP results can be found in today's earnings release as well as on the Investor Center portion of our website. Please note that 2025 sales and margins in the U.S. are no longer impacted by the Tandem Choice program, which ended in 2024. We started the year strong, delivering year-to-date worldwide sales of $475 million or growth of 15%. The majority of this growth was driven by pump and supply volumes with 4% pricing improvement year-over-year, which also contributed to gross margin expansion. For more than a year, we have been setting new quarterly records each and every quarter, both in the U.S. and internationally. Second quarter worldwide sales of $241 million set another record for highest second quarter sales in both the U.S. and OUS markets. U.S. sales in the second quarter were $170 million, representing a 9% increase over the prior year, which was the first full quarter of Mobi availability. The demand for our portfolio of products remains high from new customers and loyalty from our existing customers is evident both in growing renewal and pump supply sales. Our focus on channel management and expansion also drove a meaningful year-over-year increase in average selling price, primarily through our DME channel efforts. Pharmacy volumes remain small relative to our overall pump sales, but we continue to enhance our operational capabilities and validate our assumptions for this opportunity. Our entry into the pharmacy channel was predicated on 2 objectives: to lower out-of-pocket costs for our patients and to drive sales and margins more in line with industry comps. We are still in the early stages but are already seeing examples of patients paying 0 upfront…

Thanks, Leigh. I'd like to express my thanks to our employees for their outstanding hard work so far this year. In addition to the progress they are driving across our business, I'm also proud of how the organization quickly addresses issues when they arise. Last month, we initiated a field correction notice to inform t:slim users that we identified certain speaker versions that have higher- than-normal failure rates. We are taking necessary steps to address this issue, and there are no changes to our financial expectations as a result of this notification. We want you to be aware as we will be taking measures to aid customer awareness, such as issuing a press release. The final topic I'd like to discuss today is our new product initiatives, and our pipeline continues to be the most exciting in insulin therapy management. Our distinctive technology ecosystem includes insulin pump systems, advanced algorithms and digital health solutions, and I'll have a few updates to highlight today. Steadiset is our proprietary infusion set technology. In the second quarter, our team submitted a Steadiset 510(k) in pursuit of extended wear time. I am proud of how swiftly the team executed our regulatory strategy to file the submission. It serves as a great example of the urgency our teams are demonstrating across the business. I'm also excited to share that our extended wear technology is now incorporated in the Mobi tubeless design, which provides users the option to wear Mobi as a tubeless patch pump. It's an innovative solution for people who are interested in versatile wear options and gives the users the opportunity to change their insulin cartridge and infusion site independently with each other, which helps minimize insulin waste. This feature is of strategic importance as we believe the extended wear time will be a benefit to people living with type 2 diabetes who often have greater insulin needs. Last, I'd like to thank everyone who was involved in the fully closed loop trial we completed in the second quarter. Our internal and external research efforts to date have been foundational in shaping our longer-term objectives for our fully closed-loop system, and we remain committed to advancing our R&D efforts. Looking ahead, we continue to make meaningful progress in our collaboration with the University of Virginia Center for Diabetes Technology. In addition to these updates, we are working closely with both Dexcom and Abbott on new technology integration and continuing to advance our Sigi patch pump platform. In conclusion, we are doing the right things to position Tandem for success with our product portfolio, commercial evolution and by strengthening our core business model. Each of these initiatives supports Tandem's commitment to sustainable long-term growth and improved profitability while reaffirming our dedication to enhancing the lives of people with diabetes. Thank you again for joining us today. We look forward to keeping you updated on the company's progress.

[Operator Instructions] Our first question comes from Matt Miksic with Barclays.

So I had a question on the CMS proposal since that seems to be kind of in the front of everyone's mind about pumps that like yours that have been sold through that channel. Can you give us a sense of how you think if that were to go ahead, and maybe that's the crux of the question is if that were to go ahead, but maybe if it were to go ahead as sort of sketched out or something similar, how you'd anticipate that affecting your business, both kind of top and bottom line? And I have one follow-up.

Sure. Thanks, Matt. I guess I'll just start by saying we do not believe it will have a material impact on our business. And in fact, we anticipate it could help drive more people to pump therapy. So when we think about it, traditional, Medicare is less than 10% of our sales. So it's not a very big impact overall. And transitioning to a pay-as-you-go model is something that we've contemplated anyway from a commercial perspective as we've pursued the pharmacy channel. And so when we think about it transitioning for Medicare, we see that as a positive as well. So overall, we will continue to monitor this closely. We'll be participating in the comment period, and we look forward to hearing a final ruling later this year.

Our next question comes from Matt Taylor with Jefferies.

I was hoping you could talk a little bit more about the pharmacy progress. And John, you said on the prepared remarks, there's this access that's going to open up in Q4 for supplies. I guess on that specifically, is there a benefit for Tandem in terms of pricing? And maybe just help us understand how much progress you've been making and how material pharmacy overall could be in 2026?

Sure. So I would say, overall, we're super excited about the pharmacy channel opportunity and actually advancing our multichannel strategy. There are so many ways that it can benefit the business for us. First of all, it can just bring more volume to Tandem as we work to lower the out-of-pocket cost for patients and bring more people to pump therapy overall. Secondly, we see it as a revenue driver and profit improvement opportunity because the pricing is at a premium to what we see in DME today. Up to now, it's still a very small percent of our business of our U.S. pump sales, or U.S. sales overall when we think about it because it's, so far, it's just Mobi that we've introduced into the channel in the first 6 months. And we've been very focused on operationalizing and really looking for ways to maximize the coverage that we have today. So with 30% of covered lives, we already have a really good start. We have some other contracts we expect to sign here in the coming weeks to increase that coverage already this year. And then by moving t:slim supplies into the pharmacy channel, that's another way to really elevate or, I would say, accelerate what percent of our business pharmacy can represent for us. That benefit will begin in the fourth quarter. And so as we look ahead to 2026, we're not giving any numbers yet or color on how to think about it, but just know that it is one of the key levers for driving our business going forward.

Our next question comes from Chris Pasquale with Nephron Research.

This is Carol on for Chris. I thought it was a nice raise in the guide for OUS It seems like it's less about the sales transition and staff bump. Just kind of curious if you can share a bit more commentary on why that change in the outlook?

Sure. So our OUS business has been performing very well, and we're really excited about it. Another area that I think is vastly underappreciated for how we're driving the business there. What we've seen is great strength and performance in the first half of this year. And as we're preparing to go direct, we had anticipated that we might see some headwinds this year as distributors reduce their inventory levels or destock in advance of that transition. What we've seen so far is some limited destocking activity, and it's also, we've changed our expectations on how much that headwind could be for the year. So we originally estimated $15 million to $20 million, and now we think it'd be closer to something like a $10 million headwind. One exciting point, too, is that in the markets, we're beginning to see the signs of early traction in our renewal opportunities. So far, that business has been growing almost solely based on new market development as we expand the MDI market and we also get competitive conversions. But now renewals, which have been such a reliable recurring revenue stream in the U.S. will become a better opportunity for us outside the U.S. And so that is what gave us the confidence to raise the guide for those markets for the remainder of this year.

Our next question comes from William Plovanic with Canaccord Genuity.

So I just want to kind of dig into the new patient numbers a little. Just by our math and looking at where the Street was, it seems like for the U.S., maybe you outperformed on the new MDI competitive about in line. But in terms of renewal, maybe a little lower. I don't think there was anything in the prepared remarks. Any color on the U.S. renewal rate? And then same on the OUS. You just commented on it a little, but kind of what percentage of the mix was it?

Sure. I'll start with the U.S. piece of it. When we look at the mix of shipments in the U.S., our renewals grew double digits, and they represent a little more than half of the shipments this quarter. And so we do expect that trend to continue through the remainder of the year. It is one of our most reliable revenue streams, highly consistent capture rates, and we're seeing great traction and continued progress there from a renewal perspective. When we looked at new starts, they did grow from the first quarter into the second quarter. What we're seeing this year when we break down new starts between MDI conversions and competitive conversions is that MDI is outpacing from a growth perspective. We are still seeing a bit of headwind from a competitive conversion perspective, well in line with what we had anticipated as one of our large competitors has evolved in their business to some extent. And the opportunity itself is just lower this year than it has been in years past. And so we're very focused on how to drive the MDI opportunity because that's where we think we can win as we go forward in future years.

Our next question comes from Anthony Petrone with Mizuho Americas. Our next question comes from Shagun Singh with RBC.

I wanted to touch on the U.S. guidance reduction. It seems like it's been lowered to about $700 million now. You did talk about the commercial organization. Can you elaborate and maybe touch on what's going on there and how we should think about trends into the back half of the year?

Sure, Shagun. I just want to say, first of all, I think we had a really strong first half and a very strong second quarter. Obviously, we had record sales and sequential growth in gross margin as well as a number of positive accomplishments along the way. As we entered 2025, we indicated that we were making some fundamental business transformations that we felt were really essential to bring us to the next level and help us deliver predictable double-digit growth and profitability. We have a couple of key elements to that. First of all, Leigh talked about our multichannel market access program with improved pharmacy channel coverage. We have, we're modernizing the business systems that we used in our commercial organization to improve efficiency and effectiveness. We've got a great portfolio. We've also expanded the sales force. We're going direct OUS, and we have the type 2 opportunity. We are making great progress on each of these initiatives, and we have accomplished a lot in the short term. I would say that some of the adjustments to the U.S. numbers really acknowledge that a number of these initiatives are still in process, and that has delayed some of the benefit. So internally, I think we feel good about where we're at, but we're still implementing some of the work that's required to see the benefit of these transformational changes. I'd also say externally, we have, the competition remains intense, but there is a new market entrant this quarter. And while we have very limited experience with their product, they have built a larger-than-expected sales organization. And so we know it's going to generate a great deal of noise and it's likely to cause some pausing in the second half. And so as I said, we're focused on building a strong organization. We're excited about where we are, but we're taking a realistic approach to the second half based on these factors.

I think I'll add a point here, too, as we think about the back half of the year on a worldwide basis, often get the question how to think about the cadence of sales as we adjusted these expectations. And the way to think about the third quarter is that we expect to do about $235 million in revenue worldwide. I t's a slight step down from what we saw in the second quarter. Some of that has to do with some of the dynamics we saw in Q2. We had some modest stocking benefit in the U.S. We also had some foreign currency benefit outside the U.S. And so there's a slight step down going into the third quarter. And obviously, then we still expect to see a strong fourth quarter as we tend to do with the seasonal curve.

Our next question comes from Lawrence Biegelsen with Wells Fargo.

The press release talks about a sustained double-digit growth. Is that referring to 2026? And, if so, how do you get there with the U.S. renewal opportunity being flat on a year-over-year basis in '26 for the first time in many years?

Yes. So when we talk about that, that's our long-term goal that we plan to drive in the coming years, not just 1 year in particular. Renewals, as I mentioned earlier, have been such a strong piece of our business. In fact, our recurring business between renewals and supplies is now about 75% of our U.S. sales. And you're correct. When we look ahead to next year, the number of new opportunities coming to market from a renewals perspective will be flat to what we saw this year. there's still a sizable growth opportunity for us with renewals all by themselves because of the way the waterfall works. And so, when we have people renew, it's not right after their warranties expire. Over the course of about 18 months, we capture about 70% of our customers whose warranties expire. So, there's still a pretty sizable tail, if you want to call it that, from people who came to market last year and this year. And so, then that will help drive the growth in 2026.

Our next question comes from Josh Jennings with TD Cowen.

This is Brian here for Josh. On the updated gross margin guidance, the 53% to 54% is pretty comparable to the prior guidance. Is there something that's offsetting what I assume would be margin pressure from the change in mix? Is that an impact from Mobi outside the U.S.

Sure. I'll talk about the benefits that we expect to see in gross margin this year. The first one comes from Mobi as a platform. Pump is starting to see that improvement in terms of cost per unit, which we anticipated this year. So, as we progress through the remainder of the year, we'll see benefit as pump sales increase overall. But as Mobi becomes a bigger contribution and continues to scale in volume, that overhead rate will come down. Cartridges for Mobi as well, the real impact we begin to start to see, we will be in 2026, but we'll start to see some of that as we get closer to the end of this year. One of the second opportunities for gross margin comes from our pharmacy channel expansion. And with moving t:slim supplies in there, that gives us even more opportunity to expand the margins this year and increase the profit. And so, the reason that it's now 53% to 54% is purely based on the change in the geographic mix, which affects how margins play out. And so, with the U.S. and OUS dynamics, we now expect to be in the range of 53% to 54%.

Our next question comes from Danielle Antalffy with UBS.

Just a quick question on the new patient starts in the quarter and pump shipments. And just curious if you could comment on where you think the market, where market growth might be? And I know I appreciate we have some of your competitors yet to report. But obviously, there's some share dynamics versus market growth dynamics here. Curious if you could parse that out. Have you seen competitive pressures actually increase another market entrant? Anything you can say about that in the U.S.? And I'll just leave it at that.

Sure. We typically don't comment too broadly on how we think the others are performing in the market. We do know that we have been a leader in durable pump starts and expect to continue to have that position as we look ahead. We do believe the market is still growing overall. It's large and underpenetrated. There's room for us to grow as well as the other companies that participate in it. And so overall, we look forward, we believe we have ways to drive that opportunity as well within our own business between our product portfolio, our pharmacy channel expansion where we can lower the out-of-pocket cost for patients can help us attract more and more patients to durable pump therapy. And so we feel like we will, as I said, maintain that leadership position.

Our next question comes from David Roman with Goldman Sachs.

I want just to touch strategically on the business as you look forward. You've been consistently committed to the model of a multipump platform to serve different channels within the market. But as you reflect kind of on the evolution of the business where you are today and the profitability. Is that a strategy you think you can reasonably continue to execute given the resources you have and a competitive landscape where each of your competitors are uniquely focused on single platforms?

I think we continue to believe that the portfolio approach is the right approach. I think that when you look at the marketplace, it's very segmented. There's different people want to wear, control and interact with their devices in a unique manner. And I think that if we were to focus on any one of those particular devices, you don't cover the entire spectrum. I think that with a product that has a touchscreen and a 300-unit reservoir, we're seeing continued interest and growth in that product. We do believe that having the versatility of Mobi that will be, first of all, it will be tubed and tubeless giving people a great deal of versatility is an important product. And then we think that there's absolutely a market for a tubeless-only pump. I think over time, we'll continue to evaluate it. But as we feel, as we stand right now, we feel that we still need to have these products. I will say that the organization is making a great deal of efforts internally to drive efficiencies in how we design, I would say, mobile apps and sensor integrations so that these things are actually easier to implement than might meet the eye. And so I think that as you just saw from Leigh's report, we've actually maintained our R&D spending flat over the last quarter, and we continue to expect to see the efficiencies in our R&D spending while continuing to drive a very innovative pipeline.

[Operator Instructions] Our next question comes from Richard Newitter with Truist Securities.

This is Filipe on for Rich. Just the type 2 opportunity is really large and underpenetrated. I know you guys have talked about like a limited scale launch. I'm just wondering like can you help us understand the decision to start with a limited launch only 1 of 2 pump manufacturers with an indication for the population seems like a big opportunity. And just put that in context with your expectations for patient starts on the go forward.

Yes. I mean you're right. We think that the type 2 indication obviously doubles the size of the addressable market. We're very excited about that. I think that the pilot was something that we felt was important to really understand the market before we stepped on the gas. We did not want to make any kind of footfalls. We wanted to get it right from the beginning. And I will say that if you look at the pilot territories over the last quarter, they have performed better in type 2 adoption. We're excited about that. I'd also say that right now, we are expanding the type 2 efforts to a significant number of new territories based on the experiences that we've had in this past quarter. And we also, we intend to continue the expansion through the remainder of the year. So I think we're happy with the experiences that we've got. We've learned a great deal in that quarter, and we're now applying that to the much broader percentage of our sales territories in the U.S. So we think it was a wise thing to do, and we're benefiting accordingly as we do this expansion right now.

Our next question comes from Jeff Johnson with Baird.

Leigh, I was hoping I could ask again on the international pump starts number in the quarter. I think the last 3 quarters, I have you, and I know it's tough with a lot of moving pieces, you don't give a ton of exact detail there. But I've got your new starts internationally up anywhere from 15% to 25%, 30% the last 3 quarters. This quarter, in my model, they're looking like they might have been down 10% or 15% to get to your updated even your higher second half guidance, I've got you down even if I adjust for some inventory drawdowns, 20%, 25% in the back half of this year on new starts internationally. Just can you confirm maybe my ballpark math there and maybe what's going on with the fundamental trend ex some of those moving parts?

Sure. Maybe I'll start with one thing to remind about the first quarter and the second quarter with that, we did have a timing shift of orders. In the first quarter, we recognized about $5 million of orders, pump and supply that we originally anticipated in the second quarter. And so there's a bit of that, that's going on between the 2. And then that means that what you see externally isn't necessarily indicative of the demand and the placements in the market. But what I can confirm is that our placements on patients did grow year-over-year. And so we are still performing very well. We just have those timing variables that are a piece of it. And I'll add the other element to this quarter, we did start to see the beginning of some destocking within one of the key markets where we plan to go direct next year. And so shipments did reflect a lower number where, again, placements still showed growth. So I think maybe that will help.

Our next question comes from Mike Kratky with Leerink Partners.

This is Brett on for Mike. Just wanted to go back to the 60% gross margin target exiting 2026. I mean, obviously, you have pharmacy penetration broadly getting better with t:slim coming in 4Q, Mobi pump helping, Mobi cartridge helping next year. What gives you the confidence that you can reach that 60%, maybe Mobi Tubeless coming next year as well?

Yes. So when we refer to that 60% next year, we're speaking to the quarterly rate as we exit the year. So if you think about the path of gross margin in any calendar year, it scales up from the first quarter into the fourth quarter just based on the growth in U.S. pump shipments following the seasonal curve if nothing else. And so from where we are today and how we expect to exit this year in the mid- to high 50s, it's not a stretch to be able to see us achieving that 60% in a year from now, particularly now that we've shared, we've layered on incremental opportunity from our pharmacy expansion with t:slim supplies. Considering we have hundreds of thousands of t:slim customers today that without even purchasing another pump, we can transition them to the pharmacy channel on a supply basis and increase our profits. And so, as you said, Mobi, of course, is one of the big drivers. I think what's great is we talked about Mobi for so long as being, could be a contributor, and now we're actually seeing it in our results. And so, it's a proof point for our ability to drive and why we feel so confident for next year.

Our next question comes from Anthony Petrone with Mizuho Americas.

Apologies earlier, just juggling a bunch of earnings calls back in here. A question on Libre 3 and the t:slim opportunity, that combination specifically. Just wondering when you look at the expansive Libre 3 installed base, how much of that represents white space for t:slim specifically? And then I'll have a quick follow-up.

Yes. I'd say that if you look at the U.S. market, the last time I recall hearing from Abbott, they have 300,000 to 400,000 people in the U.S. that use the Libre 3 sensor but do not use pump therapy. And so, I think that we're very excited about it. I mean we're in the midst of our early access. And as I said in the call, we intend to go to full commercial availability here this fall. So, we think it's a huge opportunity. And I think that there's existence proof as well. If you look in the OUS markets, there is a company in the U.S. , OUS markets who does have FreeStyle Libre through integration. In a relatively short period of time, they've got about 50,000 people using the device. And so, our market research in the U.S. indicates that there are people who are absolutely interested in pump therapy. And for one reason or another, they don't have it today. But we think it's a wide-open opportunity for us, and we're excited to get there.

Our next question comes from Joanne Wuensch with Citi.

International seems to be going a bit better than previously expected. Can you just sort of give us an idea of how you look or think about that rolling out into 2026 and how you think about adding maybe more direct salespeople and/or more regions? I appreciate it.

Yes. Thanks, Joanne. So we've already started this year in the first half of the year with investments that we're making in those markets outside the U.S., building up the systems, hiring the talent, doing more in-depth market research for how we're going to approach those markets to make that transition. And so we look forward to the ability to start taking some of these operations direct. We feel like we can drive them in a different way with an intimacy that we have with our own products that maybe our distributors don't have today. It also just structurally provides an opportunity because we will release some of that pressure that we have on revenue where we give up price in order for our distributors to fund their operations. And so we should see some revenue and some margin benefit as we begin these transitions outside the U.S.

Our next question comes from Travis Steed with Bank of America Securities.

This is Stephanie Piazzola on for Travis. On the lowered U.S. guidance, could you talk a little bit more about maybe what changed versus last quarter on the commercial evolution side? And is there any way to think about how much of the lower guide is related to that versus the newer competitive entrant headwind that you called out?

Well, I think the commercial transformation is it's made up of its sales force expansion, coupled with upgrades to systems, tools and processes that we use to manage the interaction between the sales team and customers and HCPs. And if you look at the key metrics during the first half of the year, we saw productivity improve quarter-over-quarter, but these new systems and sales teams are just not completely implemented yet. And so I think it's just we're, as I said, we're just trying to be realistic about the second half. We're not where we want to be in terms of implementation, but we certainly understand that these are key steps to take to make ourselves more competitive in the future. And I think it's also just be cautious, I'd say, when you consider there is a new player with a large sales force. And any time we see a new product in the market, we see pausing. So it's difficult to say which of the 2, but I would say that they're both there, and we're just trying to take that into account and being realistic as we forecast the second half.

Our next question comes from William Plovanic with Canaccord Genuity.

I'm just curious, you talked about pharmacy contributed some in Q2 as maybe some of those new partners started to build some inventory. I'm wondering how much of a contribution was that? And because I mean, your U.S. number was basically in line, so that was obviously a boost. And how much did you expect coming into the quarter?

Sure. Great question. We didn't specifically quantify it, but I can say it was a few million dollars of benefit that was provided, which is why when you think about going from Q2 to Q3 in the U.S. where we usually see, I'm going to call it flattish revenues because of just the seasonality, we expect to see a similar type of step down going into the third quarter based on some of those stocking dynamics. We do think this is a really important step. This will really help us capitalize on that pharmacy opportunity that we have as we, even with the coverage in hand today, we can have a broader reach by expanding these distributor networks.

Our next question comes from Jason Bedford with Raymond James & Associates.

Just on the U.S. pump guidance, I think you hinted at it earlier, but historically, you talked about a 50-50 split between new users and renewals. With the latest guide, what is the expected mix between new users and renewals in '25?

Yes. Great question, Jayson. So we do now expect that renewals will be a little more than half as we go throughout the year. As we made our updates to our guidance, it was really more a factor of our expectations for new pump starts. We had originally had an assumption that those would grow mid-single digits year-over-year. Now it's more likely those will be flat to slightly down. And so that's the primary change in the guidance update.

Our next question comes from Anthony Petrone with Mizuho Americas.

Just a quick follow-up again on the difference in renewals. You have more type 2s coming in relative to type 1. Is there anything notable there? But I guess the math is suggesting that your retention rate in type 2s is somewhat better. I don't know if that's a fair statement.

Sure. We don't usually speak to type 1 and type 2 in the renewal versus new population. But what I can share there is that our type 2 has generally been in the 5-plus mid or high single digits, I guess I would say, as a percent of our overall shipments. And we don't typically see a difference in terms of retention of those types of customers. We are excited going forward with our type 2 initiatives and hopefully some positive movement on the reimbursement side that we can really maximize and start to see type 2s grow as a percent of the business and help drive incremental growth in future years.

I'm just going to insert myself here for a moment. There's, I'm surprised we didn't get more pipeline questions. And I just want to go ahead and talk about some of the exciting things that we do have going on. As I mentioned in the prepared remarks, we did get, we did submit Steadiset for the extended wear infusion capability, which we're really excited about. And right now, we're working on just as soon as we get approval, we'll be working on seeking reimbursement, and we're also building out the manufacturing capabilities. But I'm excited to indicate that we plan to launch Steadiset in the U.S. markets in 2026. Along the same lines, as we made this decision to incorporate the extended wear technology into the tubeless version of Mobi. Mobi, the Tubeless Mobi obviously will allow people to wear it as a tubeless pump, which provides great versatility in wear, but it also enables people to change the cartridge and infusion site independently, which we believe will save on insulin usage. And it's also going to be beneficial to type 2 users who just obviously use more insulin on a daily, weekly basis. So, as I mentioned in the past, we are in DMB testing and manufacturing build-out for Tubeless Mobi. But I do want to let you know that we also plan to launch Tubeless Mobi in the U.S. markets in 2026. And we think that these are 2 really exciting developments for Tandem, and I think it's really going to go a long way to improving the competitiveness of our products in 2026 and beyond. And I'm just, sorry, I just wanted to take the opportunity to share that with all of you guys.

Thank you. This concludes our question-and-answer session and today's conference call. Thank you for participating. You may now disconnect.