Why Tandem Diabetes Care Stock Popped Today
Key Points
Tandem saw robust demand for its insulin pumps in the fourth quarter.
Management expects further shipment growth in 2026.
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Shares of Tandem Diabetes Care (NASDAQ: TNDM) leaped on Friday after the insulin delivery specialist reported significant gains in profitability.
By the close of trading, Tandem's stock price was up more than 32%.
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A new revenue model is driving margin expansion
Tandem's sales grew 3% year over year to $290 million in the fourth quarter. Worldwide shipments of its insulin pumps climbed to 38,000, including 27,000 in the U.S.
The medical device maker is shifting to a pay-as-you-go pharmacy structure, which lowers upfront costs for customers and generates recurring revenue for Tandem.
Moreover, Tandem's gross margin improved to 58% from 56% in the year-ago quarter. That helped increase its operating income to $8.3 million, compared with a loss of $0.6 million in the prior-year period.
"2025 was a defining year for Tandem as we surpassed $1 billion in worldwide sales and set gross margin records, while modernizing our commercial operations, reshaping our business model, and driving innovation," CEO John Sheridan said in a press release.
Management sees modest yet profitable growth in 2026
Tandem expects full-year sales of $1.065 billion to $1.085 billion, with gross margins of 56% to 57%.
"We are adopting a pay-as-you-go model in the U.S. that provides affordable access to customers -- and progresses our business toward more predictable and profitable revenue that may not be evident in our 2026 sales expectations," chief financial officer Leigh Vosseller said.
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Joe Tenebruso has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
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