Diabetes technology company Tandem Diabetes Care (NASDAQ: TNDM) beat Wall Street’s revenue expectations in Q4 CY2025, with sales up 15% year on year to $290.4 million. On the other hand, the company’s full-year revenue guidance of $543 million at the midpoint came in 50.7% below analysts’ estimates. Its GAAP loss of $0.01 per share was 84.4% above analysts’ consensus estimates.

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“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,” said John Sheridan, president and chief executive officer.

Company Overview

With technology that automatically adjusts insulin delivery based on continuous glucose monitoring data, Tandem Diabetes Care (NASDAQ: TNDM) develops and manufactures automated insulin delivery systems that help people with diabetes manage their blood glucose levels.

Revenue Growth

Reviewing a company’s long-term sales performance reveals insights into its quality. Any business can put up a good quarter or two, but the best consistently grow over the long haul. Over the last five years, Tandem Diabetes grew its sales at a solid 15.3% compounded annual growth rate. Its growth beat the average healthcare company and shows its offerings resonate with customers.

Long-term growth is the most important, but within healthcare, a half-decade historical view may miss new innovations or demand cycles. Tandem Diabetes’s annualized revenue growth of 14.6% over the last two years aligns with its five-year trend, suggesting its demand was predictably strong.

This quarter, Tandem Diabetes reported year-on-year revenue growth of 15%, and its $290.4 million of revenue exceeded Wall Street’s estimates by 4.9%.

Looking ahead, sell-side analysts expect revenue to grow 8.4% over the next 12 months, a deceleration versus the last two years. Still, this projection is commendable and indicates the market is baking in success for its products and services.

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Operating Margin

Operating margin is one of the best measures of profitability because it tells us how much money a company takes home after subtracting all core expenses, like marketing and R&D.

Although Tandem Diabetes was profitable this quarter from an operational perspective, it’s generally struggled over a longer time period. Its expensive cost structure has contributed to an average operating margin of negative 14% over the last five years. Unprofitable healthcare companies require extra attention because they could get caught swimming naked when the tide goes out. It’s hard to trust that the business can endure a full cycle.

Analyzing the trend in its profitability, Tandem Diabetes’s operating margin decreased by 21.7 percentage points over the last five years, but it rose by 11.7 percentage points on a two-year basis. Still, shareholders will want to see Tandem Diabetes become more profitable in the future.

This quarter, Tandem Diabetes generated an operating margin profit margin of 2.9%, up 3.1 percentage points year on year. This increase was a welcome development and shows it was more efficient.

Earnings Per Share

We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company’s growth is profitable.

Tandem Diabetes’s earnings losses deepened over the last five years as its EPS dropped 39% annually. We tend to steer our readers away from companies with falling EPS, where diminishing earnings could imply changing secular trends and preferences. If the tide turns unexpectedly, Tandem Diabetes’s low margin of safety could leave its stock price susceptible to large downswings.

In Q4, Tandem Diabetes reported EPS of negative $0.01, down from $0.01 in the same quarter last year. Despite falling year on year, this print easily cleared analysts’ estimates. Over the next 12 months, Wall Street expects Tandem Diabetes to improve its earnings losses. Analysts forecast its full-year EPS of negative $3.07 will advance to negative $1.00.

Key Takeaways from Tandem Diabetes’s Q4 Results

It was good to see Tandem Diabetes beat analysts’ EPS expectations this quarter. We were also glad its revenue outperformed Wall Street’s estimates. On the other hand, its full-year revenue guidance missed. Overall, this print had some key positives. The stock traded up 1.5% to $18.81 immediately after reporting.

Is Tandem Diabetes an attractive investment opportunity right now? We think that the latest quarter is only one piece of the longer-term business quality puzzle. Quality, when combined with valuation, can help determine if the stock is a buy. We cover that in our actionable full research report which you can read here (it’s free).