- $1 Billion Revenue Milestone in 2025 Tandem achieved over $1 billion in sales, with Q4 record sales of $290 million (+15% YoY).<br>
- Global Sales Growth U.S. sales rose to $707 million (+10%), while international sales grew to $308 million (+15%) in 2025.<br>
- PayGo Model Transition 2026 PayGo adoption in the pharmacy channel will drive 10-11% revenue growth but incur a $70–80 million headwind, with margin expansion to 56–57%.<br>
- Pharmacy Channel Expansion 20% of pump shipments will go through the pharmacy channel in 2026, reducing out-of-pocket costs and improving access for 80% of PBM-covered lives.<br>
- Margin Expansion and EBITDA Leverage Gross margin to reach 60% by 2026, with adjusted EBITDA leverage of 5–6%, driven by product cost reductions and new technology launches.<br>
Business Model Evolution and Growth Drivers
The company's growth was driven by its modernized commercial organization, new technology, and reshaped business model. Tandem expanded its sales team, updated sales processes, and implemented new systems. The launch of Control-IQ+, its next-generation automated insulin delivery algorithm, and new pump features also contributed to the growth. The company is adopting a pay-as-you-go reimbursement structure in the pharmacy channel in 2026, which is expected to drive market expansion and profitability.
2026 Outlook and Key Highlights
For 2026, Tandem expects worldwide sales to be in the range of $1.065 billion to $1.085 billion, with U.S. sales between $730 million to $745 million and international sales between $335 million to $340 million. The company expects gross margin to expand and adjusted EBITDA to demonstrate leverage. The new pay-as-you-go model is expected to drive growth, with 20% of pumps in 2026 going through the pharmacy channel. The company's guidance for Q1 and the full year in the U.S. shows low double-digit U.S. shipments and mid-teens international underlying growth.
Valuation and Key Metrics
With a P/S Ratio of 1.64 and an EV/EBITDA of -12.37, the market seems to be pricing in a certain level of growth for Tandem Diabetes Care. The company's ROE is -141.98%, and ROIC is -27.83%, indicating that the company is still in a phase of investment. As the company transitions to the pay-as-you-go model and expands its pharmacy channel, it is expected to drive growth and improve profitability.
Growth Prospects and Challenges
Tandem Diabetes Care is confident in its ability to accelerate new pump shipments in 2026, driven by new technology, sales force productivity improvements, and the pharmacy channel. The company expects to see substantial growth in the pharmacy channel, with 10% of customers ordering supplies through the channel this year and 20% of pump shipments going through the pharmacy in 2026. The shift to the pharmacy channel is expected to impact the P&L and sales growth in '27 and '28, with revenue and profitability tailwinds from increased reimbursement on supplies and the opportunity to shift existing customers to the pharmacy channel.