Good day, and thank you for standing by. Welcome to the Tandem Diabetes Care, Inc. First Quarter 2026 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again. 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. Ma'am, please go ahead.

Hello, and welcome to Tandem Diabetes Care, Inc.’s First Quarter 2026 Earnings Call. Today’s discussion will include forward-looking statements. These statements reflect management’s expectations about future events, our product pipeline, development timelines, 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 of our most recent Annual Report on Form 10-K and Quarterly Report on Form 10-Q. Today’s discussion will also include references to both GAAP and non-GAAP financial measures. Unless otherwise noted, the financial metrics discussed today will be on a non-GAAP basis. 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 measures and other information regarding our use of non-GAAP financial measures. John F. Sheridan, Tandem Diabetes Care, Inc.’s President and CEO, will be leading today’s call, and he will be joined by Leigh A. Vosseller, Executive Vice President and Chief Financial Officer. Following their prepared remarks, the operator will open up the call for questions. Thanks in advance for limiting yourself to one question before getting back into the queue. With that, I will hand the call over to John.

Thanks, Susan, and welcome, everyone. In the first quarter of 2026, we delivered strong financial and operational performance, setting the stage for another successful year. This momentum reflects the dedication of our team and our commitment to our strategic objectives. Building on these results, we actively advanced several key initiatives that position Tandem Diabetes Care, Inc. for both immediate impact and long-term growth. By modernizing our commercial operations, reshaping our business model, and introducing new technologies, we are not only achieving notable short-term gains, but also laying the foundation for sustained growth, profitability, and innovation. I will now walk you through updates on each of these initiatives, beginning with the modernization of our commercial organization. Globally, we have assembled a talented and impressive team. The group is deeply committed to bringing the benefits of our technology to people living with diabetes, and we are working to further support them by strengthening our systems, infrastructure, and processes. For example, in the United States, we continue upgrading our sales and customer management infrastructure as part of our multiyear system investment to optimize sales efficiency, enhance effectiveness, and drive deeper customer insights. Internationally, a key first-quarter highlight was our launch of direct commercial operations in the UK, Switzerland, and Austria. By doing so, we are better positioned to serve our customers, strengthen HCP relationships, and drive continued growth. The transition has been progressing smoothly, and we plan to continue expanding our direct operations later in 2026 and again in 2027. This approach deepens our engagement with the diabetes community while providing Tandem Diabetes Care, Inc. greater ASP and improved margins. The second key initiative I will be discussing today is reshaping our U.S. business model through our transition to a multichannel strategy. On our last call, we discussed how adopting pay-as-you-go, or PayGo, in the pharmacy channel provides us the opportunity to bring significant advantages to customers, health care providers, and payers, while delivering favorable economics to Tandem Diabetes Care, Inc. Throughout March, we began executing contracts adapted for PayGo, covering both t:slim and Mobi pump supplies, and continued to expand access with an increase to approximately 40% formulary coverage today. It is an important leading indicator for how quickly we can transition our business. Operationalizing PayGo in the pharmacy channel is an end-to-end change in the way health care providers prescribe our technology, the way we service customers, and the way we process and fill orders. We knew this transition would take time. It is still early in the process, and we are working to improve our efficiency and customer satisfaction by enhancing the pharmacy experience. Our early introduction of PayGo through the pharmacy reinforces our conviction in the meaningful opportunity this transition presents for our business and for our customers. Finally, I will provide an update on our new technology across our portfolio. In March, we were excited to announce that Tandem Mobi, the world’s smallest durable automated insulin delivery system, is fully available for use with Android smartphones in the U.S. By expanding to Android, we are bringing the benefits of Tandem Mobi to even more people living with diabetes, underscoring our commitment to delivering choice in diabetes technology. In the second quarter, we are on track to deliver on a number of exciting new offerings. In April, we received FDA clearance for use of Control-IQ+ in pregnant women with type 1. This is significant, as it makes the t:slim X2 and Mobi the first and only commercially available AID systems cleared for use during pregnancy in the U.S. We are also awaiting CE Mark for this indication in Europe. Pregnancy requires a much tighter glycemic range, and we have demonstrated that Control-IQ+ is designed to effectively support the unique therapy needs of pregnant women, in addition to women considering pregnancy. We will be hosting a product theater highlighting pregnancy management with Control-IQ+ at the upcoming American Diabetes Association meeting in June. We are also preparing for the international launch of Abbott’s FreeStyle Libre 3+ integration with the t:slim, starting in select European countries in Q2 and scaling to additional countries throughout the year. This integration with Abbott’s latest-generation sensor will allow even more CGM users to access the life-changing benefits of our Control-IQ technology. Additionally, in Q2, we will begin the commercial rollout of Tandem Mobi outside the United States. This brings together the best-in-class outcomes users have come to expect with Control-IQ+ and the benefits of Mobi’s form factor. Rounding out our Q2 launches, we will be upgrading both t:slim and Mobi for compatibility with Dexcom’s G7 15-day sensor, ensuring we continue to provide our customers with the latest-generation technologies. It is also exciting because this software update will enable Tandem pumps to provide CGM data directly to our Sugarmate app, with future plans to add insulin data. This provides visibility to sensor information across our device platforms for users and their loved ones. These launches are designed to be global and deployable to all markets where the relevant system combinations are available, which represents an important accomplishment by our team. While progressing these new offerings to commercial availability, we also made great strides with our pipeline products. We are particularly excited about Mobi Tubeless, our novel infusion-site option for the existing Mobi pumps that transforms it into a tubeless AID system, allowing for interchangeability between tubed and tubeless wear with one platform. This will be Tandem’s first tubeless pump offering and the world’s first with extended wear technology. We plan to file our 510(k) submission for the Mobi Tubeless in the second quarter. Finally, we continue to make good progress preparing our pivotal study for Tandem’s first fully closed-loop system and remain on track to start it this year. As you can see, we continue to make meaningful progress across the business while demonstrating strong financial results, which Leigh will now discuss.

Thanks, John. As a reminder, unless otherwise noted, the financial metrics discussed today will be on a non-GAAP basis. In this quarter’s performance, we continued the momentum from last year by achieving new first-quarter records for pump shipments and sales, as well as robust margin improvement and solid cash generation. We are reaffirming our annual 2026 guidance as we continue to execute on our bold business model transformation in both the U.S. and international markets. We set new first-quarter records with more than 29,000 pump shipments worldwide and $247 million in sales. Our U.S. performance drove this achievement, where we shipped more than 19,000 pumps, representing approximately 10% year-over-year growth. Renewals continue to account for more than 50% of our shipments, and new starts were predominantly MDI patients, representing roughly two-thirds of new customers. As John discussed, a key milestone in the quarter was our March launch of PayGo in the pharmacy channel. Throughout the month, we successfully increased our formulary access outside of the traditional cycles for PBMs and payers. Adoption was within our range of assumptions in these first few weeks. Fewer than 5% of customers ordered a pump through their pharmacy benefit. Similarly, less than 5% of our installed base purchased their supplies through this channel. Our transition and pricing assumptions for the full year of 2026 remain unchanged. U.S. sales were $161 million, growing 7% year over year, also representing our highest first-quarter U.S. sales. This reflects the headwind of approximately $1 million from the adoption of PayGo, as well as slight pressure in infusion set sales due to a key supplier’s shortages. Overall, pharmacy sales represented 6% of sales in the U.S., which was significant based on our volume. Looking ahead to the second quarter, we are confident in our ability to deliver pump shipment growth with a seasonal curve similar to 2025, and expect U.S. sales of approximately $175 million. This factors in an increasing PayGo headwind, the magnitude of which will depend on our pace of execution. Turning to our international performance, we shipped more than 10,000 pumps and are executing well on our go-direct strategy. International sales totaled $86 million, representing 3% growth year over year. Direct channel sales increased to approximately 11% of total international sales from less than 5% historically. This is the highest international sales quarter in our history, due in part to favorable currency dynamics. Also, as a reminder, the first quarter of 2025 included a $5 million benefit from timing of distributor orders, creating a tougher point of comparison. Our international business had a few puts and takes during the quarter compared to our original assumptions, including a delay in timing of expected headwinds from going direct, a one-time benefit in Switzerland related to the buyout of existing customer rental contracts from our former distributor, and the same infusion set shortage I referenced in the U.S. In the second quarter, we expect that international sales will be approximately $80 million. This steps down from the first quarter due in part to the delayed impact of $3 million to $4 million headwinds associated with our go-direct transition. This also incorporates expected order phasing tied to Mobi availability as we scale launch, with some distributor demand shifting into the third quarter. Turning to margins, gross margin for the quarter exceeded expectations at 55%, an improvement of nearly five percentage points year over year and the highest first-quarter gross margin in the company’s history. Notably, we started the year higher than our full year 2025 average, reflecting continued execution on our key drivers, including pricing discipline and product cost improvements. Both operating and adjusted EBITDA margin reflect a meaningful improvement year over year due largely to $75 million IPR&D costs in the prior year. Beyond that charge, we demonstrated leverage as operating expenses of $154 million remained essentially flat year over year. This included a slight reduction in R&D spending that offset increased commercial investments in support of global growth initiatives. As a result, adjusted EBITDA was approximately 1% of sales, an improvement of 32 percentage points based on the IPR&D charge alone and an additional three points of operating leverage. Operating margin improved even more substantially by 40 points to negative 7% of sales. This was due largely to a reduction of stock-based compensation expense from 11% of sales in 2025 to 6% this quarter. With our focus on cost discipline and achieving our profitability goals, we generated $5 million in free cash flow this quarter. We also completed a convertible debt financing in February, yielding net proceeds of $276 million with 0% interest, to further strengthen our balance sheet and provide flexibility as we execute against our strategic priorities. As a result, we ended the quarter with $570 million in total cash and investments. Overall, we remain confident in our ability to deliver on our goals for 2026 and are reaffirming our 2026 financial guidance. Worldwide sales are expected to be in the range of $1.065 billion to $1.085 billion. This includes U.S. sales in the range of $730 million to $745 million and international sales in the range of $335 million to $340 million. For the second quarter, worldwide sales are expected to be approximately $255 million. We expect gross margins of 56% to 57% and adjusted EBITDA of 5% to 6% for the year. Second-quarter margins are expected to remain consistent with the first quarter. Further details on our guidance and assumptions for the year can be found in the earnings call slide deck posted in the Investor Center portion of our website. With that, I will turn the call back to you, John.

Thanks, Leigh. Before I wrap up our prepared remarks, I would like to extend my thanks to the full Tandem team. Your unwavering dedication, commitment to innovation, and teamwork have been the driving force behind our achievements. I also appreciate your resolve as we continue to navigate challenges from our infusion set supplier. While they may only impact a small percentage of our customers, the impact on them and the health care providers is significant. I appreciate the extra care and service that you are providing during this time. Thank you, everyone, for all you do. In conclusion, we are encouraged by the start to the year and are confident in the strategic direction that we have set. Our operational and commercial goals are firmly in focus, and we are committed to providing best-in-class technology to our customers in a more efficient and cost-effective way while advancing our global business model and driving meaningful long-term value for our shareholders. Thank you again for joining us today. We are excited about our opportunities ahead and look forward to sharing our progress in the upcoming quarters.

Star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again. In fairness to all, we ask that you please limit yourself to one question. If you have additional questions, please reenter the queue, and we will answer as many questions as time allows. One moment for our first question. Our first question is going to come from the line of Matthew Stephan Miksic with Barclays. Your line is open. Please go ahead.

Great. Thanks so much, and congrats on a really solid quarter here. Appreciate all the color and exciting to see you turn the corner here into PayGo. So I had one question on just the, as you, I am sure you noticed, one of the other companies in the space talked a little bit about the market, some tone or seasonal, I do not know what it was exactly, but maybe sounded like some temporary slowness. So great to get your perspective on that, what you have seen, and then also any way that you would characterize the major drivers of the growth in the quarter, whether it is uptake in type 2, whether it is uptake through pharmacy, whether it is new sensor and the integration. I hate the 'all of the above' answer, but anything you can do to give us a sense of the major drivers for the quarter?

Matt, I will just start off and talk a little bit about the market and whether it is growing or not. I think you know it is still large and very underpenetrated. It is great to have type 2 as part of the market for us now. We are excited about the fact that we are bringing a great deal of new technology and business model changes that we believe will really help us grow new starts from MDI. If you look back in 2025, there are a number of pump companies in the market and I think they all did pretty well. I would say it definitely appears to us that the market is growing. We are very excited about this year in particular because we have so much technology and business model modifications that are really going to position us for growth this year and beyond. I will let Leigh answer some of the questions about seasonality.

Sure. I will just say that we did not see anything unusual or different from what we typically see in the DME space starting off the year. Our pump shipments came in line with where we expected, which was about a 30% sequential decline in the U.S. from the fourth quarter. Nothing really to note there. Unfortunately or fortunately, the answer to your question about the major drivers is it really is a little bit of all of the above. We have a lot of things, as John suggested, working in our favor this year with our new product launches and our business model transformations. As we start to gain traction, everything is coming together to drive us towards a very successful and strong growth year altogether.

Thank you. One moment for our next question. Our next question will come from the line of Christopher Thomas Pasquale with Nephron Research. Your line is open. Please go ahead.

Thanks. I was hoping you could dig in a little bit on the international business. International pump revenue was up despite pump shipments in that segment being down. You talked about a couple of one-time items. So were those two things related? And could you maybe unpack some of the one-timers that you had this quarter, just so we can think about the go-forward run rate?

Sure. You are right. There were a lot of moving parts internationally, and the answer varies depending on if you are comparing to last year or to expectations. I will touch on a few of those. Year over year, a significant part of the growth was coming from currency fluctuation, so there was favorability in the environment that helped that growth. Looking at last year’s first quarter versus second quarter, it is a tougher comparison for us because last year there was a shift in timing of sales that was more favorable by about $5 million in the first quarter versus second quarter. As we go into Q2, it will be an easier comparison for us. Within the quarter, compared to when we set our guidance expectations, there were also a few moving parts. One was that we had estimated a headwind of approximately $5 million for going direct in certain international markets, and we are seeing a bit of a timing difference there. We realized about $1 million of that, and we expect $3 million to $4 million to push into the second quarter. Also, we did have some favorability in our Swiss market—a one-time accounting benefit—which was largely offset by some of the infusion set noise as we managed through shortages in the quarter. Overall, we are very excited about the international operations. We still see strong demand in the market for our products, and in the markets where we have gone direct, we are already hearing a very positive reception as we are closer now to the physicians and the patients.

Thank you. One moment for our next question. Our next question will come from the line of Matthew O’Brien with Piper Sandler. Your line is open. Please go ahead.

Good afternoon. Thanks for taking my question. On Mobi Tubeless, I know filing here in Q2, still nothing expected for revenue in 2026. If you do get the approval late this year, is it fair to think you do not want to disrupt the typically stronger DME part of the year, so more of a bigger launch next year and in 2027, so no real disruption from launching Mobi Tubeless or as people are expecting it? I just do not want an air pocket in any of the quarters as people are waiting for that system. Thank you.

Thanks, Matt. When it comes to our submission, we are on track to submit this quarter. We also plan on getting clearance in the second half. There is some uncertainty with the FDA, but they have been doing a really nice job lately in getting things done quickly. As you know, when it comes to guidance, we typically do not include new products until they are actually in the market. If we get clearance in the second half, we have a phased commercialization process where we observe the product in small groups first, then increase the size of the group, and ultimately get to full commercial launch once we are confident there is nothing we need to address. This is a practice we have used from the beginning. While we do an excellent job of testing, you cannot find everything until you use it over time with larger groups. We will go through that process. If we can get it to the market before the fourth quarter starts, I think we would want to do that, but we will have to wait and see when clearance occurs.

Thank you. One moment for our next question. Our next question is going to come from the line of Michael Holden Kratky with Leerink Partners. Your line is open. Please go ahead.

Hi, everyone. Thanks for taking our questions, and congrats on a great quarter. It looked like U.S. sales through the pharmacy maybe ticked down slightly from 7% in the fourth quarter to 6% in the first quarter. Can you talk about how that lined up with your expectations, what factors contributed to that, and what you have seen so far this quarter to support your confidence in the 15% for the year?

Great question. Most importantly, you really cannot compare our pharmacy experience this year in 2026 to what we saw in 2025. It is a whole different world with the change in the business model. Last year, our pharmacy contracts included reimbursement for the pump that was a premium to even what we received in DME, so it is a very different environment. In the first quarter, we had two major workstreams. One is building up coverage, and we are pleased to report that we are already at approximately 40% formulary coverage. We expect to increase that across the year. The other piece is operational—implementing an end-to-end change in our workflows. It changed how physicians prescribe, how we engage with patients, and how we process and fulfill orders. That execution really started late in the first quarter, in the last few weeks, so we are at the very early stages. So far, we are excited about the opportunity. Nothing has changed our conviction in our ability to grow and scale that across the year. We look forward to future quarters when we can report the headwinds that are coming from the volumes we are bringing through.

Thank you. One moment for our next question. Our next question will come from the line of David Harrison Roman with Goldman Sachs. Your line is open. Please go ahead.

Great. This is Phil on for David. Thanks for taking our questions. I think maybe touch on pricing. I saw on the slides that it was reiterated, and I think I heard in your comments as well, Leigh. We heard from a competitor yesterday that so far it sounds like everybody is acting rationally or fairly. Can you talk about how negotiations around pricing have gone so far and what is baked into that $3.50 number for the year? What level of conservatism is in there?

Sure. I would agree that we are all behaving rationally when it comes to pricing. We are excited to be in this market and take advantage of the pricing opportunity that was already set in the pharmacy channel for insulin pump products. When we set expectations for the year, I would call them modeling assumptions because it is new for us and it is an early experience. We said to expect about $3.50 per month per patient as they order supplies. What is factored into that is an array of contracts with varying rebate structures. At this point, we do not have enough experience to say what that mix will look like on a sustainable basis. That is the baseline we have set for now. It is still the right way to think about it, and as we start delivering more volumes and gain more traction and experience, we will update those assumptions.

Thank you. One moment for our next question. Our next question is going to come from the line of Richard Samuel Newitter with Truist Securities. Your line is open. Please go ahead.

Hi. It’s Ravi on for Rich. Thank you for taking the questions. Two for me, and I will ask them both upfront. First, on the infusion set shortage, would you mind quantifying that and suggesting what the impact might be in Q2? It looks like you are guiding a little bit below consensus for Q2 but reiterating the full-year guide, so curious if there is any impact there. Second, on the salesforce expansion, this seems to be a theme running across your peers and now Tandem Diabetes Care, Inc. as well. Can you talk about what the opportunity is that the salesforce is going after and what patient population they can unlock?

I will talk about the infusion sets and Leigh can address guidance. It is unfortunate. Our supplier has had some capacity challenges that began in the fourth quarter and continued to pressure us in the first quarter, both in the U.S. and internationally. We have been working very closely with them—practically daily calls with the operational and executive teams—and it is a top priority for us. It is a small number of SKUs that are really subject to the capacity shortages, but for those people who are impacted and the HCPs who support them, it is significant. We are doing everything we can to be creative—options in terms of lengths, colors, and other details—to provide intermediate solutions until this is resolved. We are also managing inventory to provide as broad coverage as possible. Unfortunately, this is something that probably will not be resolved for a quarter or two. We expect to see some progress in the second half of the year, but that is what we are dealing with right now, and we are taking it very seriously.

From the perspective of the impact, all we are sharing is that it was a modest impact in the quarter, both U.S. and internationally, and we factored that same level of impact into our expectations for the second quarter. As John said, we are managing it closely. We see a line of sight to the end of this in the longer term.

Thank you. One moment for our next question. Our next question will come from the line of Jeffrey D. Johnson with Baird. Your line is open. Please go ahead.

Hey, guys. Good afternoon. Leigh, I will follow up on the comment you made on the infusion set impact. I know you are not quantifying it, but let me go after it this way. Supplies missed our model by about $11 million this quarter. It could be we are just bad modelers. If our model missed by $11 million, does a lot of that get attributed to the shortfall, and is it also that you are assuming a similar shortfall in Q2 even though you are trying to move patients over to other infusion sets? I am trying to understand: does the year-over-year impact stay the same in Q2 as it was in Q1, and am I anywhere near the ballpark based on my model points? Thank you.

Thanks for the question, Jeff. I would say that is on the high side for the impact. We would put it as more modest than that. There are a couple of ways to think about the size. There are backorder situations, but as John noted, some of the ways we are helping solve the problem for patients involve offering alternatives. Just because we had some backorders does not mean that we have not recovered sales in other ways to satisfy patient needs. It is not near that big. We expect it to be a bit disruptive again in the second quarter, but it is something we can work through. We can continue to talk more about modeling assumptions in supply sales—price or other pieces that might not be working there.

Thank you. One moment for our next question. Our next question is going to come from the line of Matthew Charles Taylor with Jefferies. Your line is open. Please go ahead.

Hi, good afternoon. Thanks for taking our question. This is Matt on for Matt Taylor. I wanted to ask on product expansion. First, on your clearance for type 1 pregnant women—can you help us frame the size of that opportunity and how incremental that could be? And second, on adding Android capability, is there any analog we can look at for thinking how that adds incremental growth in your coming quarters?

We are very excited to have received pregnancy clearance just a few days ago. It was based on data from the CRISTAL trial that was published in JAMA recently. We are the first and only AID system approved for pregnancy in the U.S. for both Mobi and t:slim using Control-IQ. We also expect CE Mark this quarter. In the clinical data, the Control-IQ group experienced a 12.5% improvement in time in a tighter range of 63 to 140 mg/dL, which is about three more hours per day, sustained for the length of the pregnancy—really substantial improvement. When it comes to the size, it is pregnant women and also women considering pregnancy. It is not a really large group, and I cannot put a number on it at this point, but it is a meaningful and important group, and we are very happy to have this. We are kicking off training and events for HCPs, including a symposium at ADA. Relative to Android, roughly 60% of our mobile app users for t:slim are on iOS, so Android represents a big opportunity. Many users have been waiting for Android availability. It is another meaningful opportunity to drive MDI growth in 2026 and beyond.

Thank you. As a reminder, please limit yourself to one question before reentering the queue. Our next question will come from the line of Joanne Karen Wuensch with Citi. Your line is open. Please go ahead.

Thank you so much. Sticking with the one-question rule, with Mobi Tubeless being submitted to the FDA in the second quarter and on track for second-half approval, and assuming there is nothing in your guidance for it, how do we think about kicking off 2027 launching that product, and how are you preparing for it? Thank you.

For launching the product, as I mentioned, we have a phased commercial process. We are hoping to get it on the market this year, but timing will dictate. When you think about the market today, there really is a tubed market and a tubeless market. The tubed market is growing low single digits, whereas the tubeless market is growing in the ~20% range. That is a significant opportunity. Looking at competition, we are in the pharmacy now, we will have a tubeless device, and we believe we have a better algorithm. There is a big opportunity for us to drive MDI conversions to our device and also competitive conversions. It is a big opportunity, we recognize that, and we are really excited about it.

Thank you. One moment for our next question. Our next question will come from the line of Suraj Kalia with Oppenheimer. Your line is open. Please go ahead.

Sorry about that. John, can you hear me alright?

We can. Yes.

Perfect. John, I am going to cheat and sneak in a two-parter if I could. To Joanne’s question, how would you define the low-hanging fruit for seven-day Mobi Tubeless? Would there be a price differential? Leigh, if I could quickly, U.S. sales were up 5%, pump units up roughly 12%, and then there is a 6% PBM contribution. Can you help us thread the needle here? Thank you.

I think the financial benefit, Suraj, is that the infusion patch lasts seven days, whereas an infusion set lasts three today. There is a margin benefit from extended wear. It is also a substantial customer-experience improvement, as they do not have to change as frequently. All of this adds up. We are doing everything we can to get gross margin up, and this certainly helps. The real benefit is customer experience, and that is our focus.

To your question on the first quarter in the U.S., on a rounded basis the actual growth rate in pump shipments was 10%. The spread between the shipment growth and sales growth is not as substantial as it might seem. It really is pricing that is the differential.

Thank you. One moment for our next question. Our next question will come from the line of Lawrence H. Biegelsen with Wells Fargo. Your line is open. Please go ahead.

Thanks for taking the question. Leigh, I will ask the new-start question. By my math, it looks like new starts were down slightly year over year in Q1 and down modestly sequentially. Is that right, and do you still expect new starts in the U.S. to grow in 2026?

Thanks, Larry. Yes, your math is accurate year over year, and they were down sequentially, mostly due to the regular seasonal impact we see. This is how we structured the year in our modeling assumptions: a slight decline in the first quarter with a return to growth as we look ahead. We are very convicted in the ability to return to growth because we have been seeing improvement over the last few quarters from our low in the middle of last year. It is the traction we are seeing on our new product launches. We look forward to pharmacy making a real difference now that we have removed the upfront cost barrier so more people can move to pump therapy without worrying about upfront cost. As we build on pharmacy and drive these launches, we expect a return to growth this year.

Thank you. One moment for our next question. Our next question will come from the line of Michael Polark with Wolfe Research. Your line is open. Please go ahead.

Hey, good afternoon. I am interested in learning about the process to convert someone in the base to pick up supplies at pharmacy. I get the incentive for a new user with no upfront, but for that compliant, happy user through DME, how do you get them to the pharmacy? What does the outreach from you to them look like? What is the outreach from you to a physician? And on the financial incentive, how different is patient out-of-pocket for supplies only in DME versus pharmacy? Thank you.

Glad you asked. There is work involved. First, when a customer comes in to place their order, which is usually quarterly, we check their benefits to see if we have on-formulary coverage. We then share out-of-pocket benefits. That is the true motivator—out of pocket is typically lower, or with copay assistance can be lower. Once they are ready to move forward, it requires a new prescription, which requires reaching out to the physician. Getting their attention and time can be a factor since many want to focus on customers who have not yet moved to pump therapy. It is a process and one of the key drivers as we look ahead to maximize the pharmacy opportunity. It is not only bringing more patients to Tandem Diabetes Care, Inc., but also converting the existing base. If you think about moving potentially 300,000 people and getting that price benefit, that makes a significant difference on our revenue growth and margins. It is a major focus area for us.

Thank you. One moment for our next question. Our next question will come from the line of Analyst with UBS. Your line is open. Please go ahead.

Hey, thanks so much for the question. Really nice to see the cash flow generation in the quarter. Q1 has typically been a heavy cash burn quarter for you. Would love to hear about what changed this quarter and how sustainable this level of cash generation is going forward. Thanks so much.

Thanks. A lot of this comes from our cost discipline. While we are focused on growing revenue, we are equally focused on driving improved margins. This year, we demonstrated a 1% positive EBITDA in the first quarter, and I believe that is the first time we have done that since 2022. Q1 is a tougher quarter because of seasonal dynamics in our business, so it is meaningful that we showed positive EBITDA and cash flow generation. We appreciate you noticed that.

Thank you. One moment for our next question. Our next question is going to come from the line of Elaine Cui with Raymond James & Associates, on behalf of Jayson Tyler Bedford. Your line is open. Please go ahead.

Hi, this is Elaine on for Jason. Thanks for taking my question. I had a question on the gross margin and how you are thinking about the cadence for the year. You gave us guidance for Q2 and Q4, and we can get to an implied Q3. Why would it stay relatively flat for the first three quarters, according to my math? And when we think about the year-over-year expansion, how much of it is driven by Mobi scaling versus the pharmacy transition?

Great question. First, Q1 to Q2 being relatively flat is really product mix. From Q1 to Q2, both U.S. and internationally, more of the step-up is coming from supplies. Globally, supplies still have a lower gross margin than pumps today, even though supplies will eventually have a better gross margin in the U.S. with our new pharmacy reimbursement model. That mix drives relative flatness into Q2. It should then start to step up from there, scaling toward about 60% in the fourth quarter. The step-up will come from pricing benefits both with our direct operations outside the U.S. continuing to build and with the pharmacy benefit as we convert more customers’ supplies to pharmacy in the U.S. Price will be a very prominent driver of gross margin this year. We are also continuing to see benefit from Mobi as it scales. For pumps, we started seeing that in 2025. For supplies, we will really start to see that difference this year, contributing to gross margin improvement across the year.

Thank you. One moment for our next question. Our next question is going to come from the line of Jonathan Block with Stifel. Your line is open. Please go ahead.

Great, guys. Thanks. Maybe I will follow up on an earlier international question. When I look at international pump ASP, the ASP seemed to step up nicely from recent quarters. Leigh, any color on how much is FX, how much is the direct transition? Does this trend higher from the current 1Q result as the percent of business that is direct continues to increase? Maybe most importantly, any way to think about an exit-'26 pump ASP as we head into the following year?

The assumption we have made in guidance for the year is that pump ASPs outside the U.S., with changes from going direct, should land somewhere in the $2,800 to $2,900 range. We did see extra benefit in the first quarter because of a one-time accounting benefit in Switzerland. We were able to recognize a higher level of revenue there because of the acquisition of certain existing customer rental contracts from our distributor. This one-time benefit is what really drove the incremental pump ASP in the first quarter. Otherwise, it should settle into that $2,800 to $2,900 range for the rest of the year.

Thank you. One moment for our next question. Our next question is going to come from the line of Anthony Charles Petrone with Mizuho Financial Group. Your line is open. Please go ahead.

Thanks. Good afternoon, everyone. Maybe on the U.S. side, a competitor had a recall announcement and the FDA came out in April reporting more adverse events on one of the primary competitors. What is the chatter out there? Is that creating any opportunities for share capture, certainly as you look to Mobi or otherwise? A little bit on the competitive dynamics in the quarter. And then a follow-up on spend as you get ready for the Mobi Tubeless launch—thinking about DTC— is there a big DTC campaign planned around Mobi Tubeless? Thanks.

Regarding recalls, it is unfortunate, but that is one of the things that happens in this marketplace. The intent of a recall is to ensure the diabetes community is aware of safety issues that might impact product use. It happens to everybody. When it happens to us, we do our best to assure patients are safe and understand the risks. I do not think that gives us any benefit. You do not like to see it happen, but you recognize it as part of dealing in a market with life-saving technology. On competition generally, it is a large and expanding underpenetrated market with new entrants. Q1 was consistent with our expectations. It is highly competitive, but nothing specific to point to that changed. We are very confident in our ability to deliver new technology. The team has done an amazing job in the last several quarters. Moving to the pharmacy benefit, where out of pocket is substantially lower, will also be a big benefit. We feel very good about where we are heading competitively. Specifically to the marketplace today, it is very competitive, and nothing has really changed.

Thank you. One moment for our next question. Our next question is going to come from the line of Mathew Blackman with TD Cowen. Your line is open. Please go ahead.

Good afternoon, everybody. Can you hear me okay?

We can.

Great. Thanks for taking my question. Leigh, I think I heard you say 40% formulary coverage to date. I am trying to figure out the proper context. That feels like a lot of progress for being a quarter or quarter and a half into the year, but I do not know how to frame it relative to where you need to be at the end of the year to hit your goals. Could you frame that relative to expectations? Is the next step—say from 40% to 60%—a heavier lift? Any framework to think about where you are to date and where you need to be by year-end to hit pharmacy mix goals? Thank you.

Happy to add context. Typically, new formulary additions happen on a January 1 or July 1 cycle. We are very excited that we have been able to add coverage across the quarter—off-cycle—which shows the receptivity to us moving to PayGo and the acceptance of our products in the channel. The team is not stopping. I regularly see announcements of new formulary additions, some bigger and some smaller. We are working to drive that up across the year. In order to achieve our pharmacy goals this year, we are right on pace with where we need to be. I am not going to share a specific coverage target, but we are very well positioned to drive pharmacy access to hit the targets we have set.

Thank you. One moment for our next question. Our next question will come from the line of William John Plovanic with Canaccord Genuity. Your line is open. Please go ahead.

Hi. It’s Zachary on for Bill. Thank you for taking the question. As for the type 2 ramp, can you give more context as to how that is going? You have talked about in the past difficulties you have with the C-peptide testing requirements. Can you give us an update on what is happening there?

First of all, we are really excited about type 2. It is a big opportunity, even less penetrated than the type 1 market in the U.S. and internationally. Our focus is on market development at this point. I am not going to talk specifically about numbers today. We want to see sustained trends before reporting numbers. It is early for us. There are many positive sources of growth happening now and in the near future. We expect tailwinds from FreeStyle Libre 3, from Mobi Android, Mobi Tubeless, pharmacy—those are all great. We anticipate positive news from Medicare access, and we think they are going to get rid of the C-peptide requirement, but we will have to wait and see. As a company, we are focused on creating awareness clinically and on product benefits. Big market, underpenetrated, with a lot of positive dynamics. We anticipate seeing growth in type 2 MDI starts this year.

Thank you. One moment for our next question. Our next question is going to come from the line of Travis Lee Steed with Bank of America. Your line is open. Please go ahead.

Hey, thanks for the question. Maybe focus on March 2026 where you are moving PayGo into the pharmacy. Help us understand how that went. Are you seeing an increasing ability to ramp into April and May? And the 40% coverage that you have, how much of that is tier 1 at this stage?

I will answer the first part. Our early experience reinforces our conviction that this is a great opportunity for the business and for our customers. We are moving forward aggressively—it is our top priority. Operationalizing pharmacy involves a lot of change: physician processes, how we service our customers, and how we process and fulfill orders. We are working to improve the experience. There is behavioral change, a learning curve, and efficiency opportunities. We are very focused on these, and we have a strong team making good progress. It starts off slow and will gradually increase as we get through the year. This will be a meaningful part of our business by the end of this year and as we move into 2027.

On tiering, we have a variety of contracts across different tiers. The difference to us is the amount of rebate we pay in various tiers and the influence on out of pocket and the amount of copay assistance we might have to use. We are not sharing any breakdown of individual contracts. We are on tier 1 in some, tier 2 in some, and tier 3 in some. It varies across the board.

Thank you. One moment for our next question. Our next question comes from the line of Shagun Singh Chadha with RBC Capital Markets. Your line is open. Please go ahead.

Great. Thank you so much. I just had a quick one on Mobi Tubeless, and I apologize if it has been asked. Can you talk about how you think about the mix between the products you will be selling with Mobi Tubeless coming on board, how we should think about pricing, how you expect to compete with the current patch form factor—more from MDI conversions or competitive share gains—and anything you can share on the go-to-market strategy that you have not already discussed? Thank you.

The first important point is that we already have about 325,000 customers in the U.S. A significant portion of those use the pump today already, and this is an infusion set option for them to choose. We think there will be pretty good conversion among those people. Many will try both ways and see what they like. For new starts, now that we will have a tubeless product in the market, we expect to benefit because tubeless is very important to people as a form factor. We expect to see a lot of progress there.

To your question on pricing, because it is the Mobi pump, it is the same pump hardware regardless of which infusion set they choose. Pricing for the pump is the same. On supplies, you can think about pricing as being similar to other lease supplies. It is a supply pricing discussion, not a pump pricing change.

Thank you. This will conclude today’s question-and-answer session. Ladies and gentlemen, this will also conclude today’s conference call. Thank you for participating, and you may now disconnect. Everyone have a great day.