Tandem Diabetes Care, Inc. (NASDAQ:TNDM) Q1 2024 Earnings Call Transcript

Tandem Diabetes Care, Inc. (NASDAQ:TNDM) Q1 2024 Earnings Call Transcript May 2, 2024

Tandem Diabetes Care, Inc. beats earnings expectations. Reported EPS is $-0.65387, expectations were $-0.8. Tandem Diabetes Care, Inc. isn’t one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here).

Operator: Thank you for standing by. Welcome to Tandem Diabetes Care’s First Quarter 2024 Earnings. At this time, all participants are in a listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. [Operator Instructions] As a reminder, today’s program is being recorded. And now I’d like to introduce your host for today’s program, Susan Morrison, EVP and Chief Administrative Officer. Please go ahead.

Susan Morrison: Hello, everyone, and thanks for joining Tandem’s first quarter 2024 earnings call. As a reminder, today’s discussion will include forward-looking statements. These statements reflect management’s expectations about future events, our product pipeline, development time lines 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. A list of factors that could cause actual results to be materially different from those expressed or implied by any of these forward-looking statements is highlighted in our press release issued earlier today and under the Risk Factors portion and elsewhere in our most recent annual report on Form 10-K as updated by our most recent quarterly report on Form 10-Q.

We assume no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or other factors. Today’s discussion will also include references to a number of GAAP and non-GAAP financial measures. Non-GAAP financial measures are provided to give our investors information that we believe is indicative of our core operating performance and reflects our ongoing business operations. We believe these non-GAAP financial measures facilitate better comparisons of operating results across reporting periods. Any non-GAAP information presented should not be considered as a substitution independently or superior to results prepared in accordance with GAAP. 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.

Leading today’s call is John Sheridan, Tandem’s President and CEO, who will be joined by Leigh Vosseller, our Executive Vice President and Chief Financial Officer. I’ll now turn the call over to John.

John Sheridan: Thanks, Susan, and welcome, everyone, to our call today. 2024 is off to an impressive start with a solid first quarter performance. We met key commercial milestones with the successful launch of multiple new products worldwide. We outperformed financially, demonstrating a return to growth both in and outside the United States. Operationally, we are continuing to evolve the organization for scalable growth through investments in people, processes and technology. We are laying the foundation for 2024 to be a transformational year for Tandem, much like when we launched our first automated insulin delivery algorithm approximately 5 years ago. There is growing excitement across our company as we deliver on our strategy to bring greater choice and benefits to people living with diabetes worldwide.

In the first quarter, we executed on expanding our robust portfolio of delivery devices that offer choice and sensor integration, applications and data management tools. Beginning with hardware, we marked another first for our company this quarter. We are now the only manufacturer offering multiple insulin pump form factors. This multiplatform approach is a value proposition that makes Tandem unique. We can provide people options and how they wear and operate their AID systems while benefiting from our number one rated Control-IQ technology. Mobi took center stage this quarter, being the first to miniature durable pump that delivers unmatched wearability and the freedom to disconnect. We continue to hear an overwhelmingly positive response from early users.

The feedback is consistent between people new to pump therapy and those who are converting from competitive offerings. Our customers comment that they forget that they’re wearing Mobi, how much they love the option to disconnect and that as a durable pump, it’s more environmentally responsible than disposable devices. Health care providers highlight the benefit of being able to use the unpumped button to deliver Ebola’s even when they’re away from their phone. They also greatly appreciate the efficiency it provides to their practices with wireless connectivity to Tandem Source our cloud-based data management platform. This type of positive feedback is incredible to hear. With Mobi just getting started on the market, it’s too early to draw conclusions on trends.

But customer behavior in the first quarter is supportive of our research that Mobi provides an opportunity to expand the market while meaningful demand for t:slim X2 continues. Another area of focus where we’ve demonstrated a competitive advantage is the speed to market with CGM integrations. As our CGM partners advance and drive adoption of sensor technology, it increases the number of people who can benefit from Tandem’s AID systems. We’ve seen this over the years through four generations of Dexcom center technology and more recently, with the U.S. launch of the t:slim with Abbott FreeStyle Libre 2 Plus. Tandem Mobi is currently available with Dexcom’s G6 sensor compatibility. We are on track to begin offering integration with Dexcom G7 later in the second quarter.

Outside of the U.S., we began a successful rollout of the t:slim X2 with G7 and are working to integrate both platforms with Abbott’s FreeStyle Libre 3 technology worldwide in the year ahead. The next area where we’ve demonstrated innovation leadership is in algorithms. We’re preparing for the rollout of enhancements to our number one rated Control-IQ technology. At the end of last year, we received FDA clearance to lower the age indication for Control-IQ to age 2 and above and expand its feature set with options for greater personalization. As a reminder, algorithms and pumps are separately indicated for age groups. The t:slim pump has already indicated for age 2 and above. And in the first quarter, we received FDA clearance to lower Mobi’s age indication to 2 and above.

We are preparing to roll out the updated Control-IQ software on both far [ph] platforms later this year. This is an exciting step in our plans to offer continuous improvements to our AID algorithms through software updates to our system. From a clinical perspective, we have numerous activities underway. Fully closed-loop technology that’s designed to improve clinical outcomes while reducing the cognitive burden of diabetes management continues to be an important area of focus for us. We’ve also been making great progress on our clinical trials to support expanding Control-IQ’s indication to people living with type 2 diabetes and expect enrollment to be completed this month. In addition, we are advancing our extended wear infusion set technology and began clinical trial enrollment in the first quarter.

Overall, our commitment to innovation and choice contributes to our customers’ high satisfaction and loyalty, along with our dedicated training and customer support, reflected in our consistently strong renewal rates. As you can see, the year is off to a strong start, and we are well positioned to achieve our goals. I’d like to thank our employees from across the organization whose diligent efforts to make this possible and who continue to impress and inspire me. I’d now like to turn the call over to Leigh to discuss our Q1 results and updated sales expectations.

Leigh Vosseller: Thanks, John. As a reminder, unless otherwise noted, many of the financial metrics I will be discussing today are on a non-GAAP basis. For measures where there are differences, reconciliations from GAAP to non-GAAP results can be found in today’s earnings release, which is available on the Investor Center portion of our website. We are kicking off 2024 strong with a return to growth. Our worldwide sales in the first quarter grew 12% year-over-year to $193 million, with well over half generated through recurring supply and renewal revenue streams from our loyal customer base. In the U.S., it was an exciting quarter with our new product offerings, just beginning to take hold in the market and driving first quarter sales of $131 million on approximately 15,000 pump shipments.

Our renewals continued to grow double digits year-over-year with strong capture rates from a larger number of warranty expirations. Shipments to new customers continue to slightly exceed renewal purchases. As expected this year, within that new customer population, we began to see a shift in mix towards more people coming from MDI. The launch of Mobi, in particular, outperformed our expectations, generating a high level of activity from both new and renewal customers in what is typically our lowest seasonal quarter of the year. Mobi was initially available in mid-February to only our direct customers, followed by our distribution network at the end of March. We saw a benefit in the quarter from customers who have been waiting for Mobi availability since last year.

At the same time, we are also aware of customers who are still waiting for the availability of the G7 integration. I would like to note that we will not be breaking up shipment details between pump platforms nor by sensor integration. As a reminder, our Tandem Mobi customers today made their purchasing decision independent of our Tandem Choice program. t:slim X2 customers who are eligible for this program have not yet made an election to participate. We look forward to offering this opportunity in the coming weeks. The accounting for Tandem Choice has complexities. Note that our deferral of sales for the program, which we report on a GAAP basis only ended with the availability of MOOC [ph] in February. Up to now, we have recorded GAAP sales deferrals that have accumulated to $31 million.

As eligible t:slim users elect to switch to the Mobi platform, we will begin to report the reversal of those deferrals in our GAAP financials only. These switches will not be included in our future reports of non-GAAP pump sales or shipments. Any additional fees received or costs incurred from the Choice program will also only be in our GAAP financials. Non-GAAP sales will continue to exclude any impact of the Tandem Choice program, providing results that measure core operations as well as providing consistency for comparisons to both historical and future periods. Another highlight from our first quarter sales performance in the U.S. was a meaningful price benefit we realized through the DME channel with improvement in average selling prices across all products from both price increases and favorable channel mix.

Our success in securing higher reimbursement comes from our recognition by payers of the value that Tandem and Control-IQ bring to the health care systems. Simultaneously, we are very pleased with our progress as we pursue pharmacy channel access for Mobi and look forward to providing future updates. Turning to markets outside the U.S., our sales grew more than 60% to $62 million on nearly 10,000 pump shipments. The large majority of our shipments are driven by market expansion and competitive conversions from the continued enthusiasm for our technology in the 25 countries where we operate today. We have a growing opportunity from renewals as warranties from our earliest customers are beginning to expire but are still in the early stages of that cycle and do not anticipate meaningful contribution this year.

This quarter specifically benefited from the initial rollout of t:slim with G7 integration due to certain orders that shifted into 2024 from the fourth quarter of 2023. We also saw modest pricing favorability compared to our expectations from geographical mix and foreign currency gains. As a reminder, in 2023, we executed a distribution-centric transition in the first half of the year to create long-term efficiency for our European operations. This created a sales headwind in the first quarter of 2023 of approximately $18 million and higher pump ASPs than we would ordinarily anticipate due to the mix of ordering customers. With that transition complete, we expect to see reduced quarter-to-quarter variability and distributor orders, more normalized ASPs and closer alignment to pump market demand and end customer supply ordering patterns.

Moving on to margins. The outperformance in sales drove higher gross and adjusted EBITDA margin. Gross margin was 50%. This was in line with the prior year due to improvements in raw material costs and average selling prices, which combined to offset increased overhead per unit for scaling Mobi volumes and less favorable product mix. Adjusted EBITDA improved nearly 5 percentage points year-over-year to negative 7%. Operating expenses increased only 5% on 12% sales growth, which includes increased sales and marketing spend for all of our new product launches as well as higher clinical trial costs to support advancement of our product pipeline. These investments were in part funded through facility and employee-related cost reduction initiatives in 2023 that continue to drive leverage today.

From a balance sheet perspective, we took advantage of strong conditions in the convertible market to efficiently refinance existing convertible notes that were maturing in May 2021. Our total cash and investments were consistent with the end of the year at nearly $470 million. In all, we are extremely pleased with our progress in the first quarter. As a result, we are increasing our 2024 sales guidance to approximately $868 million or 12% growth year-over-year based on our first quarter sales performance. This breaks down to $634 million in the U.S. and $234 million outside the U.S. Remaining consistent with our approach to setting expectations at the beginning of the year, our sales guidance is primarily based on recurring supply and renewal revenue streams while we evaluate early purchasing behaviors for our new products as awareness grows.

We are also giving consideration to the increasingly competitive environment outside the U.S. We are optimistic about our opportunities in 2024, but not changing the remaining outlook until we are able to observe sustainable trends. From a profitability perspective, we are maintaining our full year guidance of 51% for gross margin and breakeven for adjusted EBITDA. There are many moving parts across the quarters this year, we’re considering the timing and scale of product launches, variation in the prior year baseline comps and seasonality. Therefore, we will also provide you into the second quarter. Our worldwide sales are anticipated to be $205 million for the quarter. In the U.S., sales are expected to grow to approximately $150 million, reflecting impacts from the timing of customer purchase for Mobi with G7 integration late in the second quarter.

Sales outside the U.S. are estimated to be slightly lower than the first quarter at approximately $55 million due primarily to the timing of certain distributor orders received in the first quarter associated with the scaling launch of t:slim X2 integration with G7. Gross margin in the second quarter is anticipated to be approximately 50% in line with the first quarter, while adjusted EBITDA is expected to improve to negative 5%. As pump sales grow and Mobi volumes increase across the year, both margins are anticipated to improve with adjusted EBITDA margins and free cash flow returning to positive in the second half of 2024. As we look ahead, the Mobi system at scale is anticipated to be a key driver of long-term margin improvement, and we remain committed to achieving our long-term goals of a 65% gross margin and 25% operating margin when we reach 1 million customers.

We’ll now open up the call for questions. Operator?

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Q&A Session

Operator: Certainly. [Operator Instructions] And our first question comes from the line of Steve Lichtman from Oppenheimer. Your question, please.

Steve Lichtman: Thank you. Hi, guys and congratulations on the quarter. A number of places to start here. But I guess, first of all, in terms of the initial feedback you’re seeing from Mobi and also in terms of what the split is? I know it’s early days between Mobi and t:slim. Just trying to get a sense of how this is starting to sort of apportion out in the field.

John Sheridan: Hi, Steve. I will say that what we’re hearing is that Mobi is redefining wearability. It’s small and versatile and its size is – it makes it so that it’s light and people forget they actually have it on. And you can also disconnect. The HCPs [ph] they like it because of the on-pump bolus button and the performance of CIQ and they also appreciate the fact that the wireless data uploads automatically to Source. And so we’re obviously just getting started. But as Leigh mentioned in the prepared remarks, we’ve absolutely achieved our commercial objectives. And we’re really excited about the rest of the year, particularly as we introduce the G7 implementation in the spring. And it all comes and supports our early research that Mobi is a market expander because we have seen a growing number of MDI and competitive conversions interested in the product. So it’s been a great start, and we’re very excited about it.

Steve Lichtman: Thanks. And Leigh, you talked about pricing and coverage. So the implied price that we saw this quarter, which obviously did come in higher. Is that a good price to use in the U.S. for the remainder of the year? And any color you can provide on your sort of initial discussions on pharmacy with Mobi would be helpful. Thank you.

Leigh Vosseller: Yes. To the first part of the question on the average selling prices, and it’s a good baseline to use for the remainder of the year. And we’re very proud of what our team has accomplished in terms of getting price increases when they’re talking to the payers on the DME side of that. But to your question on the pharmacy side, we also have active conversations underway. So the whole team is extremely busy right now, and Mobi is being well received. I think what I can say right now mostly is that we’re happy to be past the question of if we can move into the pharmacy channel. Now it’s just a matter of when. And so we look forward to giving updates on that progress at a future date.

Steve Lichtman: Great. Thank you.

Operator: Thank you. One moment for our next question. And our next question comes from the line of Brooks O’Neil from Lake Street Capital Markets. Your question, please.

Brooks O’Neil: Thank you. Good afternoon. I’m just – I want to be sure, Leigh, that I understand your comments about the impact of Tandem Choice. And in particular, was there any — or what, if any, revenue was recognized in Q1 that was essentially a deferral from Q4?

Leigh Vosseller: Thanks for the question, Brooks. So understanding that this is pretty convoluted in how this works. But what you can – the way you can think about it is from a non-GAAP basis, you won’t see any impact from Tandem Choice, whether it’s deferral of revenue or recognition of revenue associated with it. But on the GAAP side, what happened was when Mobi became available, eligibility ceased for people who were buying t:slim pumps. And so at that point, they’re able to go ahead and pick Mobi or t:slim when they purchase their pump. So deferrals have stopped, and we accumulated $31 million in deferrals over the whole time period. When people start to make their election to switch, which will start in the coming weeks, we’ll start to recognize those reversals. We’ll recognize any fees that we receive and the cost to deliver the pump, but again, only in the GAAP financials. So the non-GAAP financials will be, I’ll say, untainted by that program.

Brooks O’Neil: Okay. I’m not sure I understand it all, but that’s probably normal for me. So I’ll figure it out tonight. I appreciate those comments very much. I know we’re excited about Mobi, I know we’re excited about the sensor integration. Let me just want to jump ahead and see if you have any updated comments on X3, Sigi, better AID, Mobi Tubeless, when do you think we might begin to hear more about those? And how is the progress coming?

John Sheridan: Well, Brooks, I think in our last call, what we said is we’re not going to – we’re going to refrain from talking about dates on those products any longer for competitive reasons. But I will say that we’re very happy with the progress, and we remain really excited about the commitment to the road map. And I think that there’s really no change in our expectations from these products at this point in time. So the team is doing a great job. We’re working very hard on these things, and we’re going to bring them to market as quickly as we can.

Brooks O’Neil: Totally makes sense. Thank you very much. And congratulations on a terrific start to the year.

John Sheridan: Thanks, Brooks.

Leigh Vosseller: Thanks, Brooks.

Operator: Thank you. One moment for our next question. Our next question comes from the line of Mike Kratky from Leerink Partners. Your question, please.

Mike Kratky: Yeah. Hi, everyone. Thanks for taking our question. So a couple of months into the Mobi launch. Can you just help us quantify what portion of the new starts in 1Q overall came from Mobi and how that aligned maybe more anecdotally just with your own expectations? And then as you’ve gotten into 2Q, again, maybe just qualitatively how that’s kind of tracked early on?

Leigh Vosseller: Sure. Thanks for the question. So when it comes to Mobi and its share, first of all, I’ll start by saying it was available to a limited population. In the first quarter, we didn’t launch it until middle of February, and we also started with just our direct customers. And so it was scaling up across the quarter and on into the second quarter. It did exceed our expectations in terms of the uptake that we saw this first quarter. And it was, I would say, healthy both with new customers and renewal customers. And as John mentioned a few moments ago, very much in line with our market research, what we were seeing from a demographics perspective. We’re not providing any specific level of detail about the actual number of units. But needless to say, we’re very excited about the opportunity that it’s bringing for us.

Mike Kratky: Yes. Understood, thanks. And then maybe just a quick follow-up. In terms of the guidance that you provided, can you just confirm that, that really isn’t building in any additional credit for Mobi in the second quarter just based on the step up?

Leigh Vosseller: Correct. And so it’s the same philosophy that we started off the year with in that we are basing the guidance mostly on the renewal opportunity that already existed, which is a nice growth for us because just the number of warranty expirations this year alone is stepping up more than 30% from last year. Also, it’s predicated on the continuing supply sales across the year. When we thought about new pumpers [ph] and we thought about it from the perspective that we could deliver as many as we did last year. Now obviously, we’ve taken into consideration the overachievement in the first quarter. But for the remainder of the year, it’s back to those baseline expectations. What we want to see are some sustainable trends.

Right now, we see data points. We haven’t even drawn a line on those yet, much less developed a trend. So we’ll continue to evaluate that in the coming quarters before we start factoring in any incremental sales that come from those new products.

Mike Kratky: Understood. Thanks very much.

Operator: Thank you. One moment for our next question. And our next question comes from the line of Mathew Blackman from Stifel. Your questions, please.

Mathew Blackman: Good afternoon, everybody. Can you hear me okay?

Leigh Vosseller: Yes, can.

Mathew Blackman: Good. Good, John, thanks. I’m just going to ask more directly here. Just hoping you could give some indication of 1Q new patient growth? And if not precision simply – I mean, it does seem like there was new patient growth, but you also did have a price lift. Just any indication you can give us on at least the first quarter, whether you saw a new patient growth? And if you want to give us magnitude wouldn’t mind that either. And then the follow-up question, just throw it all out there at once. Just thinking about the P&L, I think the one number that sort of stuck stood out to us was the SG&A number being less intense than we’re modeling, I think we were anticipating stepped up spend for these new launches. So is this a timing item?

Or is this sort of low $90 million is obviously with a different cadence throughout the rest of the year. But is this sort of the right starting point? Or is there more incremental spend to come as you continue to roll out these new products? Thanks.

Leigh Vosseller: Sure. I’ll go back to the first question, which was new patient growth. And I’m going to speak to it in context of all pump shipments in the first quarter in the U.S. The information that we’re able to share is that we did see new pump starts continue to exceed renewal pumps. And so when you look at the split of new versus renewal, new pumps were slightly above renewals. Within that new pump population, we’ve often discussed where they are coming from, and it usually has been a split of about 50-50 between the MDI conversions and the competitive conversions. This year, we expected to begin to see a shift more towards MDI, which makes a lot of sense considering that population is so much larger. And all of our new products are really pointed towards meeting the needs of people who haven’t chosen pump therapy before.

So in the first quarter, we did start to see a slight shift in the MDI starting to outpace the growth in competitive conversion. So everything was as expected. We’re really excited about how the quarter played out. Nothing really unusual to report there. And then turning to your second question, looking at SG&A. And so we did make investments in sales and marketing, in particular, thinking about the field. We had our global commercial meeting in the first quarter and really talked about the launch of the products. We also amped up our marketing spend. And the reason you probably don’t see it increase as much as some of the investment actually did is because we continue to have cost efficiency programs in place where we’ve really focused on our customer service activities and a lot of automation, process improvement, leaning out some of those processes.

And so those programs that we implemented last year are really starting to show their leverage, and they’re allowing us to make more investments without growing operating expenses in total so much overall.

Mathew Blackman: That’s really helpful. I appreciate all the color.

Leigh Vosseller: Thanks, Mat.

Operator: Thank you. One moment for our next question. And our next question comes from the line of Chris Pasquale from Nephron Research. Your question, please.

Chris Pasquale: Thanks. And congrats of the quarter, guys. Leigh, I wanted to follow up on the pricing commentary, specifically OUS. I think you had talked about a $2,300 being the right place for the year there. It was higher in the first quarter closer to what we saw in ’23. So I just wanted to double check, is ’23 still where you think things shake out?

Leigh Vosseller: Sure. So 2023 in the first quarter, in particular, was unusually high from a pump perspective. That was back when we were undergoing the transition to our new European distribution center. So we didn’t have a natural mix of all of our distributor customers ordering in that quarter. This quarter, it was, I would say, a little more normalized. And we expected that ASPs could look something like they did prior to the transition, which was more like the $2,300 mark. The mix was a little bit more favorable to us this time as well as we had some slight very modest foreign currency benefit there. But otherwise, I would say for now, continue to think of the $2,300 is a good baseline, and then we’ll continue to discuss any favorability to that across the year.

Chris Pasquale: Okay. Thanks. And then, John, I know we’ve barely gotten the first iteration of Mobi out of the gate here. But you’ve highlighted flexibility of this platform as a big selling point in its current incarnation. And so I’m curious whether the feedback you’ve gotten so far makes you think any differently about the need to offer a true tubeless configuration of this product, if there’s enough daylight between what you’ve got now and what you were thinking about with that to this chassis to really make it additive?

John Sheridan: Yes. I mean I think that you’re right. We’re very excited about the feedback we’ve gotten so far. But we do believe having a tubeless version of Mobi will only drive additional demand for the product. And so we absolutely intend to continue to develop it. I can tell you that we’ve got – we made a lot of good progress, and it looks awesome. And I think that people, when they see it and understand what it’s going to do. It just gives people the full opportunity to wear a tube or tubeless and anywhere they like. So very excited about it, and we definitely continue to invest and then develop it.

Chris Pasquale: Thanks.

Operator: Thank you. One moment for our next question. And our next question comes from the line of Matthew O’Brien from Piper. Your question, please.

Matthew O’Brien: Thanks for taking the question. Maybe John, for starters. The comments you made about Mobi and expanding the market, I thought was interesting, just given what we’ve seen with ’05 in the space. Where do you think you guys are expanding the market? And are you – is it more head-to-head with 05 in terms of maybe pediatric patients or something along those lines? Or is it something completely different where just a group of patients that historically wanted something with tubing with maybe better algo and a better form factor that you’re able to access now what you couldn’t before?

John Sheridan: I think it’s a little bit early for us to actually start to talk about specific groups that are beginning to use the product. I think what we can say is that there’s – over the last 18 months, certainly, OP5 [ph] has taken more MDI starts than we have had historically. And I think what we believe Mobi is going to do is going to help us return to where we were and maybe we don’t get all the way back to a 50-50 split, but we certainly think that we’re going to take more of the MDI starts that we have over the last 18 months. And I think the early data suggests that. And I think that what we’re hearing is that people – the physicians that are actually prescribing it are – they believe that they’ve got an option to OP5 now.

They’ve got something that can show people that actually has roughly the same form factor and has a lot of advantages and has a really good algorithm. So I think what we have the t:slim out there was – the comp was difficult. But with Mobi now in the market, I think they’ve got something that stands up very strongly again. And I think that as we get to the tubeless version, it’s even better.

Matthew O’Brien: Understood. Thanks for that. And then the follow-up is just – I know it’s early and I don’t want numbers, but just the feedback or interest level from Abbott FreeStyle users in terms of starting on t:slim and is it something that you’re starting to see a little bit of traction in? Or do you need L3 before you start to really access that patient population? Thanks.

John Sheridan: Yes. I mean I’ll say that, first of all, we’re really excited about the integration with FreeStyle Libre 2 in the U.S., and we’re now working on FreeStyle Libre 3 for U.S., OUS and both t:slim and Mobi. But it’s early in the launch process. We’ve certainly seen uptake and we’ve talked to a number of people who have used – who are currently using the FreeStyle sensors, and there are definitely a lot of people who are what we call near-term pumpers, people who are interested in the product – interested in the benefits of an AID system. But it’s really – it’s a different situation. It’s a market development opportunity. It’s a new market, and we have to work with Abbott to develop it, which includes training and marketing and informing the customers and HCPs and the benefits.

So it’s early, but the work is underway, and I think we’re really excited about the partnership. And I think it’s going to have a meaningful long-term impact on our growth as a business.

Operator: Thank you. One moment for our next question. And our next question comes from the line of Larry Biegelsen from Wells Fargo. Your question, please.

Larry Biegelsen: Good afternoon. Thanks for taking the question. Leigh, I wanted to ask first about international. We typically don’t see Q2 sales below Q1. So how much was shifted from Q4 of last year into Q1 of this year. And you shipped 45,000 pumps internationally in 2021 and 2022. Is there any reason you can’t achieve at least this year given you’re starting to see some benefit from renewals? And I had one follow-up.

Leigh Vosseller: Sure. So from an OUS perspective, we didn’t quantify it specifically, but pointing to the fact that we are guiding to a step down from Q1, you can kind of get an idea of how much those shifted orders, I guess, I would say, were valued. And so what we saw were one large distributor in particular and a few others moved orders from the fourth quarter into the first quarter of this year, waiting for G7 to be available on the pumps. And so that was more of a one timer, which is why I would look to Q2 as being what I would say, a more normalized run rate for what pump shipments would look like. And so in terms of just opportunity outside the U.S. and you asked about comparison to the past few years, we still see a large and growing opportunity there, not just from bringing up our renewal customers.