Good afternoon, everyone. Suraj Kalia, Senior Medical Device Analyst at Oppenheimer. Pleased to have with us management from Tandem Diabetes, John Sheridan, CEO, and Leigh Vosseller, CFO, with us. Folks, always a pleasure to connect with you guys, and thank you for taking the time today. We do appreciate it. Good to see you, Suraj. Thank you. John, let me start out with you, and, Leigh, feel free to jump in as needed. One of the key topics of conversation as it relates to Tandem is this whole shift to the pharmacy channel, which you guys have consistently articulated, and the price increase, you know, that we're gonna see. Maybe if you can just kinda drill it down, where do we start seeing a material uptick, whether it's gross margins, op margins, and what is gonna be the trigger catalyst, you know, that we are gonna start seeing it flow through at least over the next few quarters? Leigh, I'm gonna let you jump in on that one. Sure. I actually would say we already started to demonstrate that. Last year was our first step into pharmacy channel, and we stepped in with the business model or reimbursement approach, that looks something more like the DME business, and we were doing it with just Mobi. Middle of the year, we were seeing really great validation of all of our assumptions about the benefits pharmacy could bring to the organization and to our customers, both patients and physicians. We moved more quickly, and we put t:slim supplies into the pharmacy channel, which was not part of our original plan. In the Q4, what we saw was a demonstration of even with the small volume, it was less than 5% of our customers that were ordering supplies in the pharmacy channel. It already contributed to revenue of around 7% of sales, we had a really nice gross margin benefit. we actually reported our highest gross margin in our history in the Q4 at 58%. You can already see, even with small volumes, it can make a meaningful difference. Fast-forward into 2026, and we're actually shifting the whole business model now to where it will be supplies in the pharmacy channel, and patients will get a pump for free if they choose Tandem. We'll start to reap the benefits of that supply revenue stream on a growing and escalating basis as we look ahead. In 2026, for example, we only expect about 10% of our customers to be buying supplies in the pharmacy channel on average across the year, and that will contribute to pharmacy sales being about 15%. When we look ahead, in two to three years, we expect that pharmacy sales will escalate to and become about 70% of our sales y ou can see this trajectory on the top line, how quickly this can shift, and will also continue to drive our gross margin progress, which is the real heart of the question. This year we expect to exit the year with about a 60% gross margin coming out of the Q4, and we will achieve our 65% gross margin target much earlier than we originally anticipated if we did not have pharmacy as an opportunity. Leigh, if 70% of sales in, let's say, three years are from pharmacy, right? You know, plus or minus, what does that translate to? That from a long-term perspective, are we talking in the high 60s% gross margin or. I'm not asking for guidance but just- Sure How should we think about the leverage so that we can start thinking about how the bottom line is gonna move? Theoretically, it should move very quickly once the engine kicks into second and third gear. Absolutely. To your point, we're not gonna give any specific numbers. 65% is the goal that we've been talking about for years w hat we want people to understand is we can achieve that more quickly than probably most people assume, especially if you look back a year or two ago when we were sitting in the low 50%. We're demonstrating the progress, and I think people are starting to understand the possibility of it. It's not the end. We're still going to aim to improve gross margins beyond that. What we wanna do is collect more information as we're gathering pharmacy data, just how many of our customers are going through, at what rate are we moving there, what that contribution can look like. Plus, we're also gonna be getting added contribution to gross margin from our shift to direct business outside the US. Mobi, as a platform, as it continues to grow and become a bigger piece of our business, will also contribute. There's a lot of different levers here. Pharmacy is one that can help us move more quickly, but I would say 65% is not the end. Fair enough. To that end, Leigh, if I can just finish this line of thought. Would this transition be the most important factor in terms of the margins and top-line growth we are gonna see over the next, let's say, two years till the Sigi pump comes online? Is that the right way to think about it? The units we might see marginal growth. That's just me saying, but really the price increase is what will catapult it in nominal growth. Or even when you shift to the pharmacy, you are seeing trends where your patient starts and unit volumes are gonna kick up versus the DME trend. Sorry, I threw in a lot in there h opefully, that made sense. That's okay. It made perfect sense, and you're hitting a very excellent point. There is an economic benefit from just shifting to pharmacy today, which is elevating our gross margin opportunity, but there's a true volume growth opportunity as well. When we survey patients, and we talk about what do you want to see in a pump? What are the features that you're interested in? We focus on ease of use, and we are offering a portfolio of products to meet the varying needs of people. But what we're not able to address is the cost issue w hen you talk to patients, that's one of the number one barriers why only 40% of people are using pumps today. There are still 60% of people, it's not that they don't want the technology or that the right technology doesn't exist, it's simply an affordability question. The pharmacy channel w hat it offers is it allows us the ability to influence what that out-of-pocket cost can look like for a patient. Even if they have an obligation under the tiering structure for the supplies, we can use co-pay assistance to buy down to something that's as good as DME or even better than DME. By offering a pump at no cost, which is the biggest burden, a patient in the DME channel today, when they've met their deductible, on average pays $800 to 1,000 to get a pump. It can be even more costly if they have not been able to meet their deductible b y taking away that barrier, it will allow us to continue to drive volumes and to really increase the penetration into that MDI population. Got it. John, just let me if I could take a step back and shift my lens to a really high level i 'd love to get your thoughts on this i was talking to people at ATTD last week, and they interesting comments, right? One of the things was, "Hey, 60% of the patients who are on pumps are still on tubed pumps. 40%, 45%, whatever, you know, the mix is on tubeless." That got me thinking, John, in your view, you guys have been at this for so long and have one of the better algorithms and pumps on the market. What do you think is the key resistance? to, you know, or at least why people are still on a certain preference versus the other? Well, I think that as we've talked about, when you consider the market today, it's very segmented. People want to wear, interact, and control their pumps differently. That's why we have focused on a portfolio of products. You know, we believe that there is strong interest. I think the percentage, by the way, I think it's even higher in favor of tubed pumps. But I think that there's the people who wear tubed pumps love them, and they want to continue to wear them. That's going to be an ongoing need for us. But we also understand there's people out there who want a tubeless option, and so that's what we're working on w e intend to bring a tubeless product to market this year. If you look at the market also in the growth rate of the tubed market, it's mid-single digits i t's a low number on an annual basis i f you look at the tubeless market, it's 15% or 20% or maybe even more than that. The real option or opportunity, I think, for growth in the business today is in the tubeless market, and that's why we're working on getting a product to market this year. You know, it's you know, even people, I mean, people we try to convince them of the offer. "Here's Mobi. Mobi is gonna be tubeless." They want a tubed pump. What's even more interesting is we have people coming to Tandem from a tubeless device, and what they tell us after a few weeks is, "You know, it's not as bad as I thought." They actually kinda like it t here's a lot of advantages to having a tubed pump y ou can take it off. You know, you can take a holiday. You know, you can move it anywhere t here's a lot of interesting, features that tubed pumps provide. But anyway, it's back to the fact that it's a segmented market, and one size doesn't fit all, and therefore, we need to have multiple pumps, and we need to have choice in sensors and operating systems and things like that. To that end, John, obviously Sigi, we can talk about Mobi and then Sigi. There is a lot of chatter about Sigi, you know, entry dates. As you sit here, to the extent that you can share, what do you think will be the key value prop for Sigi? You have the MiniMed Flex, the Flip coming out. Obviously, the Omnipod 6 is gonna be the whole form factors in Europe also. Where do you all, how do you all see the competitive advantage developing, you know, once Sigi comes online? Well, I mean, I think first of all, we believe Mobi is gonna be a very strong product that's going to have life for several years. I think that's something that we've learned that after we've done quite a bit of market research over the last year. I think as a result of that, we're gonna bring Mobi to market first l ike, as I said, we think it has a couple of years of life, and so we're continuing to work on Sigi, but I would consider Sigi as the next generation Mobi device. It's gonna be smaller i t's gonna have a lot of differentiation. By bringing Mobi tubeless to market today and continuing to work on Sigi, what it does for us is it allows us to add differentiation, to learn more from having Mobi tubeless on the market, understand what is desirable, what are some of the features that people would like to see on a smaller pump, so that when we bring it to market in a couple of years, it'll be a very differentiated and competitive device. I think that's the strategy l et's use Mobi. We think it's gonna be a very powerful product l et's use it to learn from it, apply what we learn to Sigi, and bring that to market at some point in the near future, probably around the same time as these other companies plan to bring their new tubeless devices to market. I just will say that. You know, it's not easy, and people have set dates. Let's just see what happens, and let's see. I mean, we'll have a year and a half on at least the most aggressive date that's out there with Mobi tubeless. You know, I think that it just gives us a chance to continue to differentiate our next generation device. Fair enough. John, when you look at t:slim, you look at Mobi, you look at Sigi, just in terms of the is the idea eventually to keep users under the ecosystem of Tandem and options because MiniMed also seems to be going down the same path in terms of a portfolio approach, like you said. Do you think that's the way to envision, you know, the key pump players in the future? Because some are just a single product or a single form factor companies, but you guys and MiniMed are taking a different approach. Yeah, I think. I'd love to get your thoughts if that's the way. I think that we will continue to make improvements to the products that we have. We will continue to evolve them, make them better, make them easier to use. Those things are all part of the pipeline and the development path. I think when it comes down to it, we're gonna have a tube device and a tubeless device. If things were to change where we saw the vast majority, of the demand go toward, like, for instance, a tubeless product, we might consider something different r ight now, from all the information we have, from the strong retention and interest that we continue to see in a tubed device, we intend to continue to have both on the market. Your Pay-as-you-go model, John, and for that matter, Leigh, you know, you'll have articulated about $350 a month. Fast forward three years, right? Let's say that $350 remains your, you know, go to level. Perfect. Would that stick for all form factors, i.e., one price fits all? Or we can start thinking about stratification, price stratification, tubed versus tubeless. How should we think about it? Because the break even for y'all would change on a tubed versus tubeless, right? I'm curious, how should we think about it or maybe I'm jumping the gun right now in terms of how to think about this. Sure. I would say for today, we haven't really talked about our pricing strategy going forward, but where I think payers and the pharmacy world in particular place value is on clinical data. I think our best opportunities to think about differentiation would be as we continue to advance our algorithm, particularly as we look ahead to having a fully closed loop algorithm, and we'll consider how this looks down the road. That's probably where I would look more towards looking for incremental value as I think ahead, in our world. Got it. Leigh, maybe if you can talk to us in terms of where we are on the pharmacy channel, just in terms of the covered lives and the rebate structures as you also introduce Mobi. Sure. Today it starts with getting the PBM agreements, and we have contracts with the three major PBMs, which gives us access to about 80% of lives on PBM contracts. Within that, it's about getting on formulary. Starting with our Pay-as-you-go model, we have about a third of lives on formulary, and that's where your rebate structure comes in. There's a variation across contracts, whether you're a preferred status, a non-preferred status, which tier you're on, all of that can influence the level of rebate that you pay. When we talked about a net pricing for Tandem at about $350, it's contemplating that all of the players in this space are starting at about the same list price or the same gross price. It's just thinking about the different variations across contracts and also the level of co-pay assistance we might have to offer to patients. We are looking to be at market, I would say, competitive in terms of pricing and rates. We today just don't yet know the mix of the volume that might come through our various contracts to understand how our net will settle in. That's something we wanted to start with a grounding point t hat's a, I call it a modeling assumption for this year. As we get more information, we'll further inform the market of how to think about our true net pricing on the go forward. One is just the macro level in terms of the different players, then is also over time information in terms of the contracts and the formulary assessments. There could also be the tubed versus tubeless, which is much later, is really the way I'm reading it, right? Yeah, I would say the tube versus tubing probably doesn't make a difference at all i t's just more about the Tandem products and what it takes to get to purchase those. Does it make- I would say that one thing to add, Suraj, is we do have differentiated features like a fully closed loop algorithm. That might be an opportunity to us to negotiate higher reimbursement for a product that has it on. I mean, as Leigh says, as we go into the next two years or so, it's as she's discussed, you know, it's gonna be relatively similar for both products. Got it. Fair enough. Got it. John, Mobi tubeless, y'all are still on track for Q2 submission and second half 2026 launch? We are. Yeah. I think that we're all set o ur team is working hard. We're gonna make it happen. You know, I think the reason that we are so excited about Mobi tubeless and everything else that's going on is that when you look at the basis of competition in the market today, it used to be just outcomes. Today, though, it's form factor, it's market access and outcomes. You know, I think without the pharmacy channel and without a tubeless device, you know, we were at a significant competitive disadvantage even though we had the best algorithm. You know, what we're doing, as you can see, is we are getting into the pharmacy channel, which eliminates one advantage. We are getting a tubeless product on the market, which eliminates the tether, and then we have the best algorithm. I think y ou know, there's only gonna be two players in this tubeless market for quite a while. In that market now, I think we've got an advantage over the competitor with not only having a better algorithm, but it's gonna be an extended wear device as well. It's gonna be a seven-day set, which it provides a great deal of flexibility and convenience for the person using the product. That's why we're very excited about it because for the first time in a while, we'll be able to compete with an advantage in the market. Yeah, John, forgive me i don't mean to throw a curveball here. John, one of the things, discussions that came up last week at the conference was these unnecessary alarms. You know, one of your competitors, there was some concern that, you know, a lot of unnecessary alarms go off and, you know, that causes patients to wake up at night and so on. I'm curious how you would characterize for your integrated systems with CGMs. Is there any data you can share that on a relative basis y'all are, I don't know, 20%, 30% or 10% less than what, you know, is being seen out there, especially on the tubeless side? I would say that, you know, when we first introduced an AID, even at pump 13 years ago, the FDA was very concerned about making sure that people were aware of any risks that may be, you know, coming with the product. The alarms were in many ways requested by them. As they've become more and more familiar with the product, they see the safety benefits that it provides. You know, we are reducing the amount of alarms. I think when we went from t:slim to Mobi, we've done that. We also have an evolution of our user interface, which is, in the case of Mobi, will be mobile phones. We are absolutely looking at simplifying how people interact with it, and also in terms of when they need to do things or when there is a risk, we're minimizing any of the alarms that may occur, so that it's still safe, but maybe not as annoying, if that's what you wanna call it. Fair enough. John, how difficult is dual analyte integration with AIDs? 'Cause Abbott has been talking about ketones are gonna be more discrete measurements and not necessarily continuous measurements. You know, y'all have talked about integration with the dual analyte. Yeah. I respect the fact that there are some things you cannot say on this fireside. But to the extent that you can share, just from a integration perspective, what are the challenges and how should we think about the evolution when this product comes online, the CGM dual analyte and with the t:slim and with Mobi? Well, it's a sensor that has just another signal that you need to process. You know, the sensor integration process, it's not gonna change just for the glucose element, but there'll be one more line of information that we've got to bring in and process. I would say, it's a new sensor, so anytime there's a new sensor, there's work that's required to do to integrate the system, but it's not rocket science. You know, we've done this before w e know how to do it. We just need to get going and get it done n ow, certainly we've got an agreement in place. We're working on that. I would say that initially, what's most likely to happen is that the information will just be a. It'll be an indication of what your ketone levels are. You'll have your CGM, you'll see where your blood sugars are, and then you'll also see your ketones. At that point, you can see if you're starting to see a rise in your ketones, but there's no rise in glucose, which is likely what happens today in sort of people's real physiology. You can respond sooner. You can give yourselves a little bit more basal insulin or potentially more a bolus. What that allows you to do is you can use the information to manage your diabetes better. I would say that over time, this is something that's gonna take a while to implement. It absolutely makes sense to implement that or integrate that stream of information on the ketone into the algorithm. That's something that would require a great deal of testing. It'll require modifications to the algorithm, of course. Then there's a great deal of clinical work that's required to make it happen t hat's not going to happen anytime soon. I think just having the information gives the patient a much better opportunity to manage their diabetes better. If you look at the information today from most of the AID systems that are out there, I mean, hypoglycemia is basic. It's gone. It's very low. Yep. Most of the issues today are all hyperglycemia. Agreed. If people can see this information and respond a little sooner, it gives them the opportunity to reduce the amount of hyperglycemia they have i think it's ultimately a good thing for diabetes, you know, we're gonna be working closely with Abbott to make it happen. Fair enough. Leigh, if I could pose two questions to you. For 2026, you know, shipments, they expect it to be up like what? 10%, 11%. You know, I believe y'all had said that renewals could be greater than 50%. What is preventing the conversion of a majority or most of these renewals to pharmacy instead of the 20% shipments expected through pharmacy in FY 2026? Yes. First I'll just underscore your, the numbers. It is true, we said 10% to 11% growth in U.S. pump shipments year-over-year, renewals still being more than half of that. I wanna start with that point for a second t here's been a question of whether or not renewals could still grow. Because the number of warranties expiring is roughly flat to last year t here's still a fair amount of people left, if you will, that have not renewed because it's typically an 18-month cycle to get to our full renewal opportunity. As we think ahead, the percentage of pay-go customers, it's not necessarily just new or renew i t does embed some assumption on renewal customers. The gating factor this year for shifting anyone into pharmacy really is our coverage level. Back to our earlier conversation, with about a third of lives on formulary, it will just depend on people's insurance benefits. We might still be able to renew people, but into the pharmacy channel as opposed to into the DME channel. They might not need a new pump at all, it might just be a shift, but we would consider that retention for us still. The renewal opportunity is still strong. Pharmacy continues to bring the opportunity for people to not have to put that $1,000, you know, outlay of cash up front. Right. Got it. Leigh, in terms of OUS, you know, what should we think about the investment needed there, feet on the ground, you know, the expansion effort that you all have been talking about? Can you put some more quantifiable metrics that we should look forward to? What I'll share is when you look at our spending in 2025, our biggest step up in expenses year-over-year were really on the sales and marketing line, and that was about the changes we were making in the U.S., but also the first investments we were making for our international markets. We were hiring country leadership, senior leadership. We were starting to hire direct sales force for some of the markets where we launched into here in the Q1 of 2026. As we go into 2027, or 2026, there will be more investments this year, especially as we move to the back half of the year and building up for the next wave of countries. You can think about it, part of it is being funded, if you will, by some of the efficiencies we're gaining in the U.S. in terms of our infrastructure here a s we shift more to pharmacy, we can leverage those costs more quickly than we can in the DME model. As the DME model becomes a smaller piece of our business, although still pretty large in 2026, we'll start to gain efficiencies in the cost to serve those customers. Each year there will be initial additional investment, but it will be funded by some of the actions we've been taking in the last year. As we look ahead, it's a self-funding model, if you will. Fair enough. There wouldn't be any pay-go like version on the other side of the pond, correct? That type of structure does not exist today. Fair enough. At least in the markets we're in. Yeah. Fair enough. John, just switching gears, what should we expect at ADA from Tandem? Obviously Dexcom is talking about a non-insulin intensive Type 2 trial readout. Abbott will have the dual analyte readout. What would you point investors to specifically as it relates to Tandem at ADA in June? Oh, we certainly have a great deal of new product activity. You know, we're gonna have additional sensor integrations w e're going to have information about the Android integration on Mobi. We've just filed for the pregnancy indication, I mean, that would be great if we get pregnancy before then. A lot of product information and hopefully information on pregnancy, probably some more information about Type 2 and the success we're seeing in the U.S. market with Type 2. You know, I think it's gonna be a great show for us w e just ended ATTD, as you had just mentioned, and I thought the show we had there was fantastic. A great deal of recognition for Tandem as well as, you know, I think really the first formal introduction of Mobi into the marketplace. A lot of excitement from physicians, KOLs, et cetera, about the availability of Mobi in the not too distant future. The last question, John, in the interest of we are up on time. All the launches, you know, OUS Mobi, Libre 3 Plus integration, and G7 15-day, I presume towards the latter part of the year, you know, the timelines, everything is intact, and that is. Yeah. I think that of course, we've got all this great technology here in the US, and now it's time to get it into the OUS markets i think that in the Q2 we intend to launch Mobi into the OUS markets w e intend to launch t:slim with FreeStyle Libre 3. We're excited about both of those. Last year we spent a great deal of time with the mobile apps and Tandem Source. Now that that's in place, we can actually get Mobi into that market. We think those are gonna be very competitive. As you're right, we're working on the 15-day Dexcom integration this quarter, Q2. I think that the next big thing is going to be, it's gonna be Mobi tubeless and, Mobi with FreeStyle Libre 3. A lot going on. Very excited about this year. There's many things that are happening in a very positive way from a innovation point of view, from, our business model point of view as we move to pharmacy. We've also invested quite a bit in the U.S. sales force, the systems they use, our leadership, and we're excited about that team as well, really, beginning to differentiate themselves and show significant improvements in productivity throughout the year. John, on that note, we are up on time. Always a pleasure to connect with you all, and congrats on all the progress, and I know there's a lot coming up. Look forward to connecting at ADA also. Thanks very much, Suraj. Good talking to you. Thank you.