Good day, and thank you for standing by. Welcome to the Tandem Diabetes Care Second Quarter 2025 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star one one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one one 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. 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 of our most recent quarterly 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 information regarding our use of 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 multi-channel 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 lay 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 a commercial update, in the U.S., we saw a 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 it's 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 two-thirds 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've broadened our operations and refined processes while investing in systems and talent. Our technology also continues to stand out among customers and healthcare providers, with number one ratings in categories such as reducing the burden of living with diabetes, performance of an AID algorithm, clinical outcomes, and favorite pump. I recently heard a customer comment that Control-IQ remembers when I forget. It was a succinct and powerful statement that captures what we strive for: improving the lives of people with diabetes. Our high customer satisfaction scores reflect that we are furthering this mission. Tandem Mobi, our newest pump platform, continues to receive positive feedback for its versatility in wear, comfort, and flexibility to detach. It was a key contributor to new user demand in Q2, as evidenced by year-over-year increases in its adoption. This comparison is important because Q2 of last year was the first full quarter that Mobi was available, and it likely benefited from some pent-up demand. Mobi also represented a greater percentage of our new pump starts in Q2 compared to a year ago, on track for achieving our near and longer-term financial goals. We are pleased with Mobi's performance, and our goal remains to expand its addressable market through additional features and integrations, starting with the addition of Android control before the end of the year. Our flagship pump, t:slim X2, continues to receive high customer satisfaction scores for its larger volume insulin reservoir, multiple sensor integrations, and the convenience of having touchscreen control on the pump. In the second quarter, we announced t:slim's compatibility with Abbott's FreeStyle Libre 3+ sensor. Early access for this integration is now underway, and we plan to expand to full U.S. availability this fall, followed by launching internationally and integrating with Tandem Mobi. Another exciting market expansion opportunity is our ability to bring Tandem's technology to people with Type 2 diabetes. Following FDA clearance earlier this year, we began to pilot Type 2 commercial activities. This provided valuable insight for our portfolio positioning, salesforce planning, patient training, and reimbursement strategy. In the pilot territories, we saw great Type 2 adoption compared to the non-pilot areas. The strength of our New England Journal data and the value proposition provided compelling evidence that Control-IQ+ is easy to start, easy to use, and easy to personalize. This lends itself to a new and exciting development in our active efforts to drive improved access for the Type 2 Medicare patient population, which includes approximately 1.3 million people with diabetes who use insulin-intensive therapy. The Senate Appropriations Committee recently approved a bill that would require the CMS to address coverage for insulin pumps to ensure that all requirements, including measurement of C-peptide levels, are consistent with clinical standards of care. If enacted, CMS would be required to provide a briefing within 180 days. In the third quarter, we are expanding our Type 2 efforts, which will continue throughout the remainder of the year. One of our top priorities is improving channel access by reducing the barriers that discourage people from adopting pump therapy. We will discuss more on our pharmacy channel progress, but there is one update that I would like to highlight. Beginning in Q4, we plan to start selling t:slim supplies through the pharmacy channel to our eligible customer base. It's exciting evidence of our business transformation and important for our current t:slim customers, as it can make pump therapy more affordable. Turning to our international markets, the team delivered strong overall performance, driven by demand for t:slim, increasing pump renewals, and growing supply sales. Commercial efforts are also underway to prepare for the launch of Tandem Mobi, as we recently received CE mark. We are now pursuing additional regulatory and pre-commercial activities, such as securing in-country registrations and reimbursement. We are also continuing the rollout of the mobile app and Tandem Source, that are prerequisites for Mobi's launch. Operationally, we plan to begin direct sales in select countries next year, and our preparations are progressing well. We continue to attract and hire in-country talent, and our team is executing well against our transition plans. This shift is a pivotal step for Tandem to globalize our leadership, deepen relationships within the European diabetes community, and strengthen our financial position by accelerating sales growth and driving margin expansion. I am very pleased with the progress we've made so far this year in preparing for the transition and the current sales trends that we've delivered. As you can see, there have been many strengths in our performance for the first half of 2025, where we delivered top-line growth whilst demonstrating margin improvement. We also gained a number of insights that inform our thinking about the remainder of the year. Overall, we expect to achieve $1 billion in worldwide sales, which is a significant milestone and goal for our company. Sales from international will be a bigger contributor than originally anticipated, with more moderate growth in the U.S. as we progress our commercial transformation. The team remains laser-focused on bringing the benefits of our technology to people living with diabetes worldwide and expanding the large and underpenetrated markets we serve. I'll now turn the call over to Leigh for more on our second quarter results and updated financial assumptions for the year. 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 two 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 zero upfront out-of-pocket under our current agreements. The pharmacy contracts we have signed are similar in reimbursement structure and revenue recognition to our DME contracts, but we also continue to discuss pay-as-you-go models, which we are confident in our ability to support. Our experience to date underscores our confidence in meeting our business goals for pharmacy expansion. We are working aggressively to build on this opportunity in multiple ways. Our team is making great progress in our conversations with PBMs and payers to expand insurance coverage under the pharmacy benefit. We currently have approximately 30% of U.S. lives under coverage and anticipate signing additional meaningful contracts in the upcoming weeks that will be available immediately. We are also expanding our pharmacy distribution network to maximize the patient access we currently have, which provided incremental benefit this quarter through initial stocking orders. Last, we are advancing our strategy by beginning the contracting process to offer patient access for t:slim supplies in the pharmacy channel. Considering we have an installed base of several hundred thousand t:slim users in the U.S., this could provide meaningful benefit as we build on our pharmacy coverage for t:slim beginning in the fourth quarter of this year. Recently, the CMS issued a proposed rule that updates Medicare payment policies and rates for DME providers, including two changes for insulin pumps. The first is a proposal to alter the reimbursement structure for pumps from a 13-month rental to a pay-as-you-go model. Similar to my pharmacy comment, we are confident in our ability to support pay-as-you-go. The second proposal is to include pumps in competitive bidding, which is a Medicare initiative designed to reduce costs and improve access. Overall, traditional Medicare represents a small portion of our business at less than 10% of our U.S. sales. Should CMS move forward with the proposals as written, it's an opportunity to bring Tandem 's technology to more people living with diabetes, and the structural changes may ultimately provide benefit to our business. We plan to participate in the current comment period and anticipate final rulings in November. Now, I will turn to our performance outside the United States. As a reminder, last quarter we noted a $5 million shift in timing of sales from the second quarter into the first quarter. In the second quarter, we also experienced light headwinds from distributor inventory adjustments and preparation for our transition to direct operations in 2026. Yet, we were still able to deliver record second quarter sales of $70 million. We saw benefit in the quarter from early traction in renewals, as well as favorable currency dynamics. Moving to our company's margin performance, a key objective for our business is demonstrating improvement in profit margins. Our plans for driving gross margin expansion and operating leverage this year are on track, as evidenced by our second quarter results. Our second quarter gross margin was 52%, reflecting an increase both year- over- year and compared to the first quarter. Pricing was the primary driver, offset partially by product mix and non-manufacturing costs. Importantly, the Mobi platform is a key driver to our long-term gross margin expansion, and its benefits are beginning to materialize as we gain more manufacturing experience and scale volumes. The Mobi cost per pump has already improved meaningfully year over year, and the platform margins are expected to continue improving over the course of the year as pump and cartridge volumes grow. From an operating expense perspective, I'm particularly impressed by the execution of our teams to deliver on our profitability targets while making meaningful progress to prepare our people, process, and technology for our next wave of growth. We are taking action to both modernize how we go to market through a combination of efforts within the salesforce, channel, technology, and process redesign, with the goals of offering an elevated customer experience while scaling headcount more efficiently. These changes position us to compete in a highly competitive market while also delivering profitable growth. As a result, operating expenses grew 10% year- over- year, driven by SG&A investments. Going forward, we expect these investments to be offset by savings, which will begin to provide benefits in the second half of the year. R&D expenses were essentially flat year- over- year, a result of our continued focus on efficient delivery of new innovation. We ended the quarter with $315 million in total cash and investments. The quarter had two noteworthy uses of cash. First, our 2025 convertible notes matured in May, and we settled the balance of $41 million using existing cash. Second, we paid $8 million as the first of five annual installments towards a $36 million settlement agreement that includes a 10-year worldwide non-exclusive patent license and a covenant not to sue. We view this as a positive development that will allow us to focus on innovation in our business and for our customers. Looking at 2025 overall, we are on a path to achieving double-digit growth of $1 billion in 2025 worldwide sales and have updated our guidance accordingly. In the U.S., we anticipate more moderate growth in the back half of the year, which reflects the U.S. dynamics between our commercial evolution and the competitive environment, partially offset by benefit from the pharmacy channel opportunity. Outside the United States, our sales performance confidence has increased as we continue to drive our international strategy. In particular, we have assumed a $15 million- $20 million headwind associated with going direct. We now believe the headwind will be reduced to approximately $10 million, and we expect continued strength in growing the market overall. With these updated assumptions, the expected geographic mix will be sales of approximately $700 million in the U.S. and $300 million outside the U.S. Turning to margin expectations, we are executing to both our manufacturing and operational goals. We anticipate achievement of gross margin in the range of 53%- 54% as a reflection of the change in geographic mix of sales and expect to see margins expand across the quarters as pump sales increase and additional Mobi efficiencies are gained. Impact from tariffs has been negligible, and we expect that to continue. Importantly, we remain on track to reach the quarterly milestone of 60% gross margin as we exit 2026. From an adjusted EBITDA perspective, we are no longer excluding expenses for in-process research and development in our non-GAAP results in order to align with views recently expressed by the SEC. Therefore, our adjusted EBITDA guidance for 2025 is now being recast from + 3% to - 5%. This change is solely driven by -8 points of margin for the $75 million IP R&D charge associated with AMF Medical that occurred in the first quarter. In support of our operational EBITDA margin goals, even with our growth investments, initiatives to deliver efficiencies are expected to begin materializing in the back half of 2025 with increasing benefit in future years. We also anticipate returning to positive free cash flow in the second half of 2025. I'll now turn the call back to John. 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 am also proud of how the organization quickly addresses issues when they arise. Last month, we initiated a field correction notice to inform t:slim X2 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 wanted 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 of each other, which helps minimize insulin waste. This feature is of strategic importance as we believe the extended wear time will be of 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 continue 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. As a reminder, to ask a question, please press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. In the interest of time, we ask that you please limit yourself to one question. You may rejoin the queue if you have any additional questions. Please stand by while we compile the Q&A roster. Our first question comes from Matt Miksic with Barclays. Your line is open. Hey, thanks for taking the questions. I had a question on the CMS proposal since that seems to be kind of in the front of everyone's mind about pumps like yours that have been sold through that channel. Can you give us a sense of how you think, you know, 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. I had 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. When we think about it, traditional Medicare is less than 10% of our sales, so it's not a very big impact overall. In transitioning to a pay-as-you-go model, it's something that we've contemplated anyway from a commercial perspective as we've pursued the pharmacy channel. When we think about it transitioning for Medicare, we see that as a positive as well. Overall, you know, 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. Thank you. Our next question comes from Matt Taylor with Jefferies. Your line is open. Hi, thanks for taking the question. 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? Maybe just help us understand how much progress you've been making and how material pharmacy overall could be in 2026. Sure. I would say overall, we're super excited about the pharmacy channel opportunity and actually advancing our multi-channel 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 Diabetes Care as we work to lower the out-of-pocket costs 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 so far it's just Mobi that we've introduced into the channel in the first 6 months. We've been very focused on operationalizing and really looking for ways to maximize the coverage that we have today. 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. 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. 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. Thank you. Our next question comes from Chris Pasquale with Nephron Research. Your line is open. Hi, this is Carol on for Chris. I thought it was nice raising the guide for OUS. It seems like it's less about the sales transition and that bump. I'm kind of curious if you can share a bit more commentary on why that changed in the outlook. Thanks. Sure. 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. 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 we've changed our expectations on how much that headwind could be for the year. We originally estimated $15 million- $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. 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. That is what gave us the confidence to raise the guide for those markets for the remainder of this year. Thank you. Our next question comes from William Plovanic with Canaccord Genuity. Your line is open. Great, thanks. Thanks for taking the question. I just wanted to kind of dig into the new patient numbers a little. You know, just by our math and looking at where the street was, it seems like for the U.S., maybe you outperformed on the new MDIs, 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. Same on the OUS, you just commented on it a little, but kind of what percentage of the mix was it? Thanks for taking my question. Sure, excuse me. 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. 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 you 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, in line with what we had anticipated as one of our large competitors has evolved in their business to some extent. The opportunity itself is just lower this year than it has been in years past. We are 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. Thank you. Our next question comes from Anthony Petrone with Mizuho Americas. Your line is open. Anthony, please check your mute button. Our next question comes from Shagun Singh with RBC. Your line is open. Great, thank you so much. 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? Thank you. 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's talked about our multi-channel market access program with improved pharmacy channel coverage. We are modernizing the business systems that we use 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've 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. 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, the competition remains intense, but there is a new market entrant this quarter. While we have very limited experience with their product, they have built a larger than expected sales organization. We know it's going to generate a great deal of noise, and it's likely to cause some pausing in the second half. 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, we often get the question how to think about the cadence of sales as we've adjusted these expectations. The way to think about the third quarter is that we expect to do about $235 million in revenue worldwide. It'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., so there's a slight step down going into the third quarter. Obviously, we still expect to see a strong fourth quarter as we tend to do with the seasonal curve. Thank you. Our next question comes from Lawrence Biegelsen with Wells Fargo. Your line is open. Good afternoon. Thanks for taking the question. The press release talks about sustained double-digit growth. Is that referring to 2026? If so, how do you get there with the U.S. renewal opportunity, you know, being flat on a year-over-year basis in 2026 for the first time in many years? Thanks for taking the question. Yes. When we talk about that, that's our long-term goal that we plan to drive in the coming years, not just one 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. 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. 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. 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. That will help drive the growth in 2026. Thank you. Our next question comes from Josh Jennings with TD Cowen. Your line is open. Hi, this is Brian here for Josh. Thanks for taking the question. On the updated gross margin guidance, the 53%- 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.? Thanks. 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. 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 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. With moving t:slim supplies in there, that gives us even more opportunity to expand the margins this year and increase the profit. The reason that it's now 53%- 54% is purely based on the change in the geographic mix, which affects how margins play out. With the U.S. and OUS dynamics, we now expect to be in the range of 53%- 54%. Thank you. Our next question comes from Danielle Antalffy with UBS. Your line is open. Hey, good afternoon, guys. Thanks so much for taking the question. Just a quick question on the new patient starts in the quarter and pump shipments. I'm just curious if you could comment on, you know, where you think the market growth might be. 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.? I'll just leave it at that. Thanks so much. 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. Overall, you know, 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 costs for patients, can help us attract more and more patients to durable pump therapy. We feel like we will, as I said, maintain that leadership position. Thank you. Our next question comes from David Roman with Goldman Sachs. Your line is open. Thank you. Good afternoon. I want to touch strategically on the business as you look forward. You've been consistently committed to the model of a multi-pump platform to serve different channels within the market. As you reflect 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 are different people who want to wear, control, and interact with their devices in a unique manner. 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'll be tubed and tubeless, giving people a great deal of versatility, is an important product. We think that there's absolutely a market for a tubeless-only pump. I think over time, we'll continue to evaluate it. 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. 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. Thank you. As a reminder, to ask a question, please press star one one on your telephone. Again, that is star one one to ask a question. In the interest of time, we ask that you please limit yourself to one question, and you may rejoin the queue if you have any additional questions. Our next question comes from Richard Newitter with Truist Securities. Your line is open. Hey, this is Felipe on for Rich. Just the Type 2 opportunity is really large and underpenetrated, and I know you guys have talked about a limited- scale launch. I'm just wondering, can you help us understand the decision to start with a limited launch? I I mean, you're only one of two pump manufacturers with an indication for the population. It seems like a big opportunity. Just put that in context with your expectations for patient starts on the go forward. Thanks very much. Yeah, 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 footballs. We wanted to get it right from the beginning. 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. We also intend to continue the expansion through the remainder of the year. 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 a much broader percentage of our sales territories in the U.S. We think it was a wise thing to do, and we're benefiting accordingly as we do this expansion right now. Thank you. Our next question comes from Jeff Johnson with Baird. Your line is open. Thank you. Good afternoon, guys. Leigh, I was hoping I could ask again on the international pump starts number in the quarter. I think the last three 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%- 25%, 30% the last three 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, you know, can you confirm maybe my ballpark math there and maybe what's going on with the fundamental trend at some of those moving parts? Thanks. Sure. Maybe I'll start with one thing to remind about the first quarter and the second quarter. We did have a timing shift of orders. In the first quarter, we recognized about $5 million of orders pumped in supplies that we originally anticipated in the second quarter. There is a bit of that that's going on between the two. That means that what you see externally isn't necessarily indicative of the demand and the placements in the market. What I can confirm is that our placements on patients did grow year- over- year. We are still performing very well. We just have those timing variables that are a piece of it. 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. Shipments did reflect a lower number where, again, placements still showed growth. I think maybe that will help. Thank you. Our next question comes from Mike Kratky with Leerink Partners. Your line is open. Hey guys, thanks for taking the question. This is Brett on for Mike. Just wanted to go back to the 60% gross margin target exiting 2026. I mean, obviously you have, you know, 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. 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. 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. 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 a contributor, and now we're actually seeing it in our results. It's a proof point for our ability to drive and why we feel so confident for next year. Thank you. Our next question comes from Anthony Petrone with Mizuho Americas. Your line is open. Thanks. Apologies earlier, just juggling a bunch of earnings calls. Thanks for getting us back in here. A question on FreeStyle Libre 3 and a t:slim X2 opportunity, that combination specifically. Just wondering when you look at the, you know, expansive FreeStyle Libre 3 install base, how much of that represents white space for t:slim X2 specifically? I have a quick follow-up. Yeah, I'd say that if you look at the U.S. market, the last time I recall hearing from Abbott, they'd have 300,000- 400,000 people in the U.S. that use the FreeStyle Libre 3 sensor but do not use pump therapy. I think that, you know, we're very excited about it. We're in the midst of our early access, and as I've said in the call, we intend to go to full commercial availability here this fall. We think it's a huge opportunity. I think that, you know, there's existence proof as well. If you look in the OUS markets, there is a company in the OUS markets who does have preset Libre 3 integration. In a relatively short period of time, they've got about 50,000 people using the device. 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. We think it's a wide open opportunity for us, and we're excited to get there. Thank you. As a reminder, to ask a question, please press star one one. If you have any additional questions, you may rejoin the queue. Our next question comes from Joanne Wuensch with Citi. Your line is open. Thank you so much for taking the question, and good evening. 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 sales people and/or more regions? I appreciate it. Sure. Sure. Yes, thanks, Joanne. 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. 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 relieve some of that pressure that we have on revenue where we give up price in order for our distributors to fund their operations. We should see some revenue and some margin benefit as we begin these transitions outside the U.S. Thank you. Our next question comes from Travis Steed with Bank of America Securities. Your line is open. Hi, this is Stephanie Piazzola on for Travis. Thanks for taking the question. 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? Is there any way to think about how much of the lowered guide is related to that versus the newer competitive entrant headwind that you called out? Thanks. I think the commercial transformation is made up of its sales force expansion coupled with upgrades to the systems, tools, and processes that we use to manage the interaction between the sales team and customers and HCPs. If you look at the key metrics during the first half of the year, we saw productivity improved quarter over quarter, but these new systems and sales tools are just not completely implemented yet. I think it's just where, 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. I think it's also just being cautious, I'd say, when you consider there is a new player with a large sales force, and anytime we see a new product in the market, we see pausing. It's difficult to say which of the two, 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. Thank you. Our next question comes from William Plovanic with Canaccord Genuity. Your line is open. Yeah, great. Thanks for taking my follow-up. 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, because your U.S. number was basically in line, so that was obviously a boost. How much did you expect coming into the quarter? Thanks. Sure, great question. We didn't specifically quantify, 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. Thank you. Our next question comes from Jason Bedford with Raymond James and Associates. Your line is open. Good afternoon, thanks. Just on the US pump guidance, I think you hinted at it earlier, but historically you had 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 2025? Yes, great question, Jason. 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. That's the primary change in the guidance update. Thank you. Our next question comes from Anthony Petrone with Mizuho Americas. Your line is open. 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? 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. Thanks for taking the follow-up. Sure. We don't usually speak to Type 1 and Type 2 in the renewal versus new population. What I can share there is that our Type 2s have generally been in the 5+%, you know mix, high single digits, as I guess I would say, as a percent of our overall shipments. 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. Thank you. I'm just going to insert myself here for a moment. I'm surprised we didn't get more pipeline questions. 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 submit a SteadiSet for the extent of our infusion capability, which we're really excited about. Right now we're working on, just as soon as we get approval, we'll be working on seeking reimbursement. We're also building out the manufacturing capabilities. I'm excited to indicate that we plan to launch SteadiSet in the U.S. markets in 2026. Along the same lines, we made this decision to incorporate the extended wear technology into the tubeless version of Mobi. The tubeless Mobi obviously will allow people to wear it as a tubeless pump, which provides great versatility and wear. It also enables people to change the cartridge and infusion site independently, which we believe will save on insulin usage. It's also going to be beneficial to Type 2 users who obviously use more insulin on a daily and weekly basis. As I mentioned in the past, we are in V&V testing and manufacturing build-out for tubeless Mobi. I do want to let you know that we also plan to launch tubeless Mobi in the U.S. markets in 2026. We think that these are two really exciting developments for Tandem. I think it's really going to go a long way to improving the competitiveness of our products in 2026 and beyond. 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.