Why Tandem Diabetes Care Stock Popped Today |

Shares of Tandem Diabetes Care (TNDM 1.90%) 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%.

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.

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.