Q1 2022 Tandem Diabetes Care Inc Earnings Call
Yeah.
Thank you for standing by and welcome to Tandem's first quarter 2022 earnings conference call. At this time all participants are in a listen only mode. After the speaker presentation. There will be a question and answer session to ask a question. During the session you will need to press star one on your telephone please be aware that today.
This call is being recorded she would you require any further assistance. Please press star zero I would now like to turn the call over to Susan Morrison, EVP and Chief administrative officer.
Thanks, and good afternoon, everyone. Welcome to Tandem's 2022 first quarter earnings call. Today's discussion will include forward looking statements. These statements reflect management's.
<unk> about future events product development timelines and financial performance and operating plans and speak only as of today's date.
There are risks and uncertainties that could cause our actual results to differ materially from those anticipated or projected in our forward looking statements.
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 quarterly report on Form 10-Q and in our other SEC.
Filings.
We assume no obligation to publicly update any forward looking statements, whether as a result of new information future events or other factors.
In addition, today's discussion will include references to adjusted EBITDA, which is a non-GAAP financial measure adjusted EBITDA is a key measure used by us to evaluate operating performance generate future operating plans and make strategic decisions for the allocation of capital. Please refer to our press release issued earlier today for further information.
Our call today will be hosted by John Sheridan, Our President and Chief Executive Officer, and leave off Flair, our executive Vice President and Chief Financial Officer. Following their prepared remarks, we'll open up the call for questions. Thank you in advance for limiting yourself to one question and one follow up before getting back into the queue.
I'll now turn the call over to John .
Thank you Susan and welcome everyone to today's call are.
Our first quarter performance demonstrated the strength, which we are executing across all areas of our business. We achieved record breaking Q1 sales both inside and outside the United States.
We also received FDA clearance for the T. Slim next to users to initiate a bolus delivery from biogas and Android smartphones, which is our top requested feature and we also made operational progress throughout the business.
Our awesome employees deliver these accomplishments, while continuing to navigate the broader headwinds.
Faced across the World a special thanks to everyone on the team for sharing your talents with tandem and our customers. Each of your plays a role in our success and together, we continue to make a possibility different impact on people's lives with diabetes.
We already reached a new milestone in 2022 as our installed base has surpassed more than 350000 people worldwide.
This represents an estimated 30% of people using insulin pumps and the geographies in which we serve which was remarkable considering our commercial efforts outside the United States began to ramp less than four years ago.
It's evident that we are making meaningful progress in our long standing objective to bring the benefits of our technology to the diabetes community.
We are also continuing to progress our goal to expand the insulin pump market.
Half of our new customers in the U S. In Q1 reported reported converting from multiple daily injections with the remainder from competitive offerings at.
At the same time, we are seeing strong customer retention.
A key driver of this continued growth is the overwhelmingly positive experienced customers and health care providers report from our control IQ technology.
This powerful diabetes management solution is now offered in all the geographies, which we serve worldwide and the feedback we hear in the data we see is consistent or <unk>.
Next to with control IQ technology provides immediate and sustained positive results. This.
This was demonstrated at last week's advanced technologies and treatment for diabetes conference in Barcelona, Spain, where data was presented from our control IQ observational study also referred to as the <unk> study, where users reported improved quality of life reduce diabetes burden and higher satisfaction with diabetes therapy irrespective.
Beige baseline hemoglobin <unk> C and the previous method of insulin delivery.
Our cloud data says, particularly insightful as the study is fully enrolled with more than 2000 customers and it's now two thirds complete its powerful powerful information that will help inform our future algorithm advancements as well as discussions with Payors and further optimization of the user experience we provide.
Additional presentations at the conference featured data demonstrating positive clinical outcomes from long term use of control IQ technology as well as the successful adoption of control IQ by people previously using MDI as its effective across all ages, including children.
The ATB conference as well as next months Ada scientific sessions.
Are important opportunities for us to showcase data that demonstrates the power of our technology.
Experience matters and with more than 16 million real world customer days of use our control IQ technology continues to set a high bar and advanced automated insulin dosing.
It's an advantage that is not tied to one specific algorithm feature like our automated correction bolus or auto population of CGM data.
But rather the full customer experience with the ease of use of our technology improved clinical outcomes. It provides and through the positive interactions with our employees.
Another competitive advantage that we offer is the ability to bring new software features and benefits to our customers who are within the typical warranty cycle.
In February we received FDA clearance of the mobile App that enables our T slim <unk> pump users to bolus insulin from their smartphone.
With this clearance we added to the list of Tandem's first as this is the first ever FDA cleared smartphone app capable.
Initiating insulin delivery on both iOS and Android operating systems.
Following the claris our team kicked off training for our internal employees, along with health care providers.
Launch activities are underway this month as part of a paced rollout into the summer and we are on track to offer our T. Slim X to U S customers access to the mobile bolus delivery feature.
And this will be free of charge.
Mobile bolus clearance provides a great reason for our sales and clinical teams to reach out to health care providers.
It also reinforces the importance of our strategic decision to expand our U S sales and clinical teams in the first quarter to further drive awareness of our technology solutions among people living with diabetes and health care providers.
People have been excited to learn about our mobile bolus technology as it has been a top requested feature.
Our interactions with health care providers have continued to be a mix of in person and virtual it varies widely by practice and geography and overall the impact of the broader labor shortages and physicians offices continues to weigh on many of our prescribers.
Along with a fluctuating COVID-19 case rates is a dynamic our U S field team continues to navigate well staying both flexible and adaptable.
Our international distribution partners are also successfully managing these headwinds outside of the United States.
Turning to our product pipeline, we're making great progress across our family of products under development.
<unk> our novel Miniaturized durable pump is a focus for our R&D team as it provides us an opportunity to serve a new market segment as.
As a reminder, the mobi pump is designed to be fully controlled through a mobile app on a user's personal smartphone and the T. Connect mobile app that was cleared earlier this year for bolus insulin delivery is also the foundation of <unk> mobile control functionality Victor.
A big development milestone for <unk> in Q1 was our undertaking of the largest human factor study in tandem as history, which was recently completed.
We are on the data analysis process now and early data from this study is encouraging.
It's been exciting and inspirational to hear the feedback from people who participated in the study.
But living with diabetes as well as our pump trainers.
Now he's assistant is to operate and how it will serve our current unmet needs in the diabetes community.
The data from our pivotal human factor study along with the other final test reports and development work are now taking place and we intend to submit our 500 10-K filing to the FDA in the third quarter.
We will be filing through an ace pump pathway in the U S, which allows for <unk> to be integrated with interoperable CGM as well as our algorithms like control IQ.
Additional regulatory review.
CGM work is another top priority for our development teams and continues to progress well with both of our CGM partners <unk> common habit.
We are entitled Communications with both organizations as they each progress towards bringing their technology to market through the <unk> pathway.
The last area of product development I'd like to highlight today is the extensive clinical work that we're undertaking to bring dependent bits of our control IQ technology to more people living with diabetes.
For example, our first phase two feasibility study for control IQ is anticipated to be fully enrolled this month also.
So the pediatric trial using control IQ continues to progress well and as discussed in the past we intend to use the data to pursue an age indication for children younger than six years old.
And lastly, we're working to expand the insulin indications for control IQ through the addition of Loon, Jeff and we'll be kicking off a study this quarter.
In addition to these products under development, we're making progress on our global digital health initiatives, which remains strategically important to us these efforts and our longer term pipeline are all designed to deliver on our commitments to meet the varying needs and preferences of people living with diabetes.
Relentless innovation and revolutionary customer experience remain at the heart of our company.
Looking across our business. We're also applying the lens of continued improvement to identify areas for process efficiency lean optimization and reduced environmental impact.
Look forward to keeping you updated in the company's accomplishments to reduce the burden of diabetes management, while working to deliver value to our shareholders.
I'll now turn the call over to Lee to provide further color on the quarter as well as on our guidance for the year.
Thank you John and good afternoon, everyone.
2022 is off to a strong start U S sales outperformed expectations and we are on track with international sales and operational execution against our profitability goals.
First quarter sales were 176 million worldwide, demonstrating continued high growth at a rate of 25% year over year.
Our control IQ technology continues to improve the quality of life for our customers around the world driving more people to our products and creating strong retention within our customer base.
In the first quarter of 2022, we shipped 28000 pumps.
By contributing to nearly 50% growth of our installed base compared to one year ago.
Beginning with our results in the U S. Our first quarter sales grew 27% to 131 million, we shipped nearly 19000 pumps in the quarter, bringing us to an installed base of more than 250000 customers.
We continue to see growth from both an increase in customers new to P&L and an increase in renewal customers, who are purchasing our pump premise once again in.
In fact, our renewals can reach nearly 20% of the total pumps, we shipped this quarter compared to approximately 15% in the prior year.
This higher rate of renewal growth is particularly encouraging as we look ahead to our increasing renewal opportunity and it is a trend we expect will continue throughout 2022.
Turning to our results outside the U S. We generated $45 million in sales this quarter growing 18% over the prior year.
Sales were generated from shipping more than 9000 pumps, but the other half from supplies sales took a nearly 100000 customers in our installed base.
This is a remarkable 87% increase in the number of our customers outside the U S compared with Q1 of last year.
As we discussed on our last call this quarter reflected inventory rebalancing at some of our key distributors and then pointing out that the variability we have seen in shipment patterns is not necessarily reflective of underlying market demand.
Analysis at the end customer data is exciting as it shows a steady uptick in demand with any individual countries, which is even more pronounced in the fixed income following control IQ launch.
As we look to the remainder of the year ahead, we are increasing our 2022 worldwide sales expectations to a range of 850 to 865 million.
Electing a growth rate of 21% to 23%.
This is based primarily on our strong Q1 results in the U S and so we have increased our U S sales guidance to a range of $635 million to $645 million and are reaffirming our <unk> expectations of $215 million to $220 million.
Overall, we remain cautious regarding the broader coding and economic trends and the lingering impact you have on the market, our health care providers and our customers.
I will now turn to gross margin, which was in line with the first quarter of last year at 52% demonstrating that we are finding ways to offset some of the broader economic pressures.
The three primary factors that contributed to our gross margin performance this quarter for production cost improvements improved average selling prices and ongoing global supply chain challenges.
First as your production costs, we continue to see improvement in the per unit cost at each of our products year over year from manufacturing efficiencies lean initiatives and leveraging overhead on increased sales volumes.
Second improvement in our average selling prices came from the mix of customers ordering within the quarter in particular, our sales through direct contracts in the U S increased to 35% of total U S sales this quarter versus only 32% in the prior year.
The price and cost improvements more than offset the impact of the increasing percentage of supplies sales from our large and growing installed base.
In your mind that supplies have lower margin and pumps.
Last our nonmanufacturing costs were slightly pressured this quarter due to greater freight costs from global supply challenges.
We anticipate that this pressure will be more significant in the second quarter based on increased inbound freight and the recent acquisition cost of certain materials.
Because of this we expect gross margin in the second quarter to be in line with the first quarter. Despite a seasonal increase in pump shipments as is typical in our business.
We have factored the impact of these pressures into our expectations for the full year and our 2022 guidance unchanged at 54%. Most importantly, we remain confident in our ability to achieve our long term gross margin objectives.
The change in our operating and adjusted EBIT margins year over year reflects our commitment to increasing investment in R&D, which has been the trend for the last four quarters.
Our operating margin was negative 9% of sales and adjusted EBITDA remains positive at 4% of sales.
R&D grew to 19% of sales this quarter as we expanded our teams in support of our hardware software and digital Health initiative.
This reflects higher spending, but it's also greater on a percentage basis due in part to the seasonality of our business.
For the full year R&D expenses are expected to average 15% of sales up more modestly from 13% of sales in the full year of 2021.
This investment in R&D and balanced by the expected efficiencies in SG&A with operating expenses overall remaining flat as a percent of sales from 2021 2022.
Our full year expectations for adjusted EBITDA remains unchanged in the range of 14% to 15% of sales factoring in the current level of investments we are making in the business.
<unk> on track to achieve our long term operating margin outlook.
Our balance sheet remains strong as we continue to navigate challenges of the Covid environment and drive operational execution, we ended the quarter with $635 million in cash and investments generating free cash flow of $11 million in the quarter.
To summarize our 2022 outlook worldwide sales are estimated to be in the range of $850 million to $865 million, including international sales of $215 million to $220 million.
We estimate gross margin for the year to average, 54% and adjusted EBITDA to be in the range of 14% to 15% of sales.
Our noncash P&L charges for stock compensation, depreciation and amortization are expected to be slightly higher than our original expectations for the year at approximately 95 million I'd like $80 million is associated with noncash stock compensation and $15 million in depreciation and amortization.
With that I will turn it over to the operator for questions.
Yeah.
As a reminder to ask a question you will need to press star one on your telephone to withdraw your question press the pound key please standby, while we compile the Q&A roster.
Our first question comes from the line of Steven Lichtman.
Oppenheimer <unk> company your question please.
Thank you hi, guys.
Wondering if you could talk a little bit about sort of intra quarter trends and whether you saw it.
Appreciable pickup as the quarter went on with AUM of crime fading and perhaps.
That having up incrementally better impact on staffing et cetera. So just anything you saw throughout the quarter would be it would be helpful.
Sure. Thanks, Steve.
What we are seeing in the quarter as much of what you've heard from other companies as well as at the beginning of it was more pressured as there were more absences due to illnesses at the Omicron Lane with kind of running out at that point, but it's also typical for it to have an uptick across the quarter, particularly in the first quarter with it being the lowest seasonal quarter of the year and so our appeal.
To express at the same challenges exist, where when they call on physician offices, there so fast shortages and high absenteeism, which is you've got price pressure, but we were happy that we still came through strong this quarter.
Steve the only thing I'd add to that is that we also continue to see.
Shipping challenges to our <unk> partners.
It's the supply chain is still a bit turbulent.
And so it just really hasnt settled out we hope it happens here in the next month or so maybe the next second half of this year, but it's definitely still been a little problematic for the distributors.
Got it got it and then I just wanted to follow up on one of the opportunities that you guys talked about and that's moving up to the new Cvs and so in particular relative to G. Seven effects on its progress. There can you talk a little bit more about sort of what you guys need to do to to get that up and running you know obviously FDA is set up.
A regulatory perspective.
With the protocols, but how long should we be thinking about that.
Process, taking for you guys once <unk> does get approved.
Yes.
We've been working with the desk com now for for many years, where in the fourth generation of sensor integration and our team is a very close relationship. There is work I mean, they have made they have made a submission to the FDA for the CGM system. There is still work that we both need to do to establish the communications cyber securities and things like that that both.
Teams are continuing to work on and so when they get approval. We're anticipating is probably going to be a quarter, maybe two quarters. Afterwards before we introduced the device and sensitive an ICM and it'll be on a <unk> pump theres no theres not going to be any regulatory submissions and we will be we will be in close communication with the <unk> team to discuss.
The commercialization timing and discuss more of that as we get through this year.
Got it thanks, John Thanks, Lee sure. Thanks, Good talking to you soon thanks, Steve.
Thank you. Our next question comes from Travis Steed Bank of America. Please go ahead.
Hey, this is Dan <unk> on for <unk>. Thanks for taking the questions just two for me.
We've heard from some other med tech companies that are U S regions, where it is heavily impacted from this COVID-19 wave. It sounds like you are messaging is a little bit different so just love to get your thoughts on those markets and how you think the full year can play out and are you seeing any competitive differences in the U S market compared to the U S.
Yeah, I'll start with the first part of the question about the impact on the O U S market and Youre correct for us what we've seen at our distributors outside the U S. Have also continue to manage through the same challenges that we see here in the U S and <unk>.
And then like that for the last three or four quarters as well, which has contributed to some of that variability that we've seen in the revenue.
Their shipment timing and orders have varied as well and so we're being thoughtful about that from a full year perspective, as we continue to get factoring caution around.
<unk> link.
A lingering effect of COVID-19 across the rest of the year.
And I would say with regards to the competitive environment O U S. It really hasnt changed at all there has been no new products that have come to market. It is still the same and we are still doing a great. We just add the HED conference. There we were able to pull together our entire distribution group of distributors and.
We're now in every country with control IQ and so there's a great deal of excitement.
We're we're really expecting to see.
Good things as far as control.
O U S.
States there has been a there has been a new product that's coming to market, but I would say even with that the competitive environment related remains largely unchanged.
It's been on the market now for a few months, but we have heard conversations about it but there's so few systems that are out there that it's really very difficult for us to get a sense for how it's actually performing opted to keep monitoring it and see how that goes in time.
Understood. Thank you and then just a quick follow up on.
The type two market you spoke during the R&D day that that might be more of a focus so just trying to get a sense here. When do you expect to start capturing some more type two patients there and really what does it take to start driving that market and thanks for taking the questions.
Yes, well, we currently have about 20000 people, who are using control IQ off label and Theyre seeing fantastic results. We've we have a.
<unk> study right now for type two underway, it's fully enrolled and we would anticipate that that will probably take the majority of this year to complete and what that's done well we will have that will give us the information that we all need to work with the FDA to design, a pivotal study, which will be something that will most likely be run in the beginning part of 2023. So.
We're moving in the good direction, you've got a lot of excitement on the type two front as well, it's probably more like a late 'twenty three 'twenty four product.
Great. Thanks, so much.
Yes. Thank you.
Our next question comes from Brooks O'neil of Lake Street Capital. Your line is open.
Good afternoon, and congratulations on continued terrific results.
Thank you Brooks recognize that you've you've talked quite a bit about various factors that influence <unk> performance this quarter, but could you talk just try to highlight.
Sure.
Factors that you think contributed to 11% pump shipment growth in the quarter.
Sure, it's actually but a lot of people focus on the challenges that everyone's facing but it was a really strong quarter for us in a good way to start the year.
We have seen strength coming from all the areas that have made us so successful in the past few years and that our new customers continued to increase year over year, and we're getting great traction with our renewals and so it was great to see the step up in those year over year as well, which is very meaningful as we think about the number of new opportunities coming this year and how that will continue.
Scale again in the coming years.
Great and then I guess as a follow up or a different question.
Could you just comment at all about whether the human factors testing on mobi uncovered.
<unk> or things you really want to change about the product or would you say it was pretty affirming.
Strong characteristics of the underlying product.
I would say, it's a relatively complicated analysis Brooks and were still in the process I mean up until this point, we have not found anything that we think is problematic, but we still have some data to dig through and we're optimistic there was nothing that stood out.
That was problematic in fact people were thrilled to use it it was great to see people, who live with diabetes as well as our trainers the excitement that they had as they were just watching people interact with it so.
Still more analysis to be done, but I'm optimistic that we're going to get through this with the with no significant changes.
Great. Thanks, a lot.
Thank you.
Thank you. Our next question comes from Alex Nowak of Craig Hallum. Your line is open.
Great. Good afternoon, everyone. It was a good renewal number this quarter, but I would still say is a big opportunity could you expand a bit more on the marketing efforts. There you can undertake to help push for more upgrades in the installed base is it something from a patient marketing perspective that can be done and I guess, how critical is having a different form factor out there like mall base.
To encourage those upgrades.
Sure.
So part of the success, we've had in increasing that renewal rate in the past 12 months or so it was just really come from I would say some of the operational efficiencies and embedding some of the learnings from the early years. Thanks to our processes. We continue to expand that team we have a high level of outreach and were seeing great retention from our customers.
So there are a number of factors we're excited about the opportunity to talk about mobile bolus with patients because it's another good reason to reach out to customers and then we'll continue with that trajectory as we move forward.
And Alex I would just say that we believe that it's not a one size fits all situation when it comes to managing diabetes theres different segments out there and so we think that certainly we're doing very well with the T slim pump, but when it comes to market. We think that's going to unlock another segment that we haven't been participating in and so we think.
It's going to continue to drive growth and the penetration rate from MDI conversions to pumps and and we think thats an important factor in our growth going forward.
And then as you're getting ready to submit an <unk> here, what sort of payer conversations are you, having now to position, albeit I would assume as both the durable, but also PVM capable pumps and does <unk> give you any more renewals levers to push for direct contracts with the payers.
There are a number of good reasons to talk with the payers that it's not just the technology the form factor changes by.
The conversations we're having today really center around control IQ as much of anything else finished demonstrating the great outcomes that our customer base and we're able to share with payers their own subscriber base and we can show them the pre and post outcomes. So they can really see what a difference from making for their own population and so we're at the beginning stages.
You know initiating conversations about low lease that will be very prepared for launch.
It likely won't probably be in the dealer channel, but it doesn't mean that we're not starting to explore further what it Mike.
How pharmacy channel might benefit your business or how we might be able to fit into the pharmacy channel in the long term each product evolution and our pipeline will give us another opportunity to find out what fits and what doesn't.
Excellent I appreciate that thank you.
Hey, Carol.
Thank you. Our next question comes from Jayson Bedford of Raymond James Your line is open.
Good afternoon, just a couple here.
You mentioned the inventory dynamic with international distributors. It did look like non pump revenue internationally came a bit lower than we expected is this where you saw the impact or did you also see the inventory dynamic play out in the pumps side as well.
No it was across the board Jason So it's not so much product focus, but distributor and how they are managing through their inventories and so on.
It came in basically right, where we anticipated as we came out of the fourth quarter understanding what their inventory levels look like.
And while we are anticipating there will be continued variability going forward as we look ahead to Q2 at least we don't have anything at this point of a material nature that we could call out that would you know.
That we should feel like we should share with you.
Okay. Okay. That's helpful and just on the renewal rate.
Do you expect this rate to trend higher throughout the year or is 20% a good number for the.
Rest of the year.
Yeah.
I think it's a good average for the year to think about.
Obviously, our U S business scale seasonally just for new customers similar to our renewal customers.
Have a heavier renewal opportunity coming to the table in the fourth quarter. It represents about 40% of the 30000, new opportunities next year or so.
As you always expect a heavier backing finished for us it would be the same with renewals and new customers alike.
Thank you. Our next question comes from Danielle <unk> of SPD Securities. Your line is open.
Hey, Good afternoon, guys. This is Ryan on for Danielle. Thanks, So much for taking the question.
So you touched on the Covid impacts in the quarter a bit in your remarks could you. Please talk a little bit more about new patient volumes in patient starts in the quarter given potential omicron impacts that might have limited access to physician offices and any trends you might be seeing exiting the quarter and then I had one follow up.
Sure.
So what we felt basically with that.
What you're hearing across the board from folks omicron impacts and physician offices and customers alike. In so many different ways, but a lot of it is just higher levels of illness and the office is still have heavy staff shortages and so that's where our field is trying to help supplement as much as possible that they work with their physician customers to make sure we can still get new patients on.
The product is expected and I think we've been very successful again not without challenge, but the team has worked very hard and so as we go into second quarter Theres still a lot of conversation about how the pandemic is affecting the environment.
What we've seen is I would think not not too atypical from a from a typical not too atypical from the second quarter, which is around the significant holidays like Easter and spring break timeframe do you see a little bit more softness.
For the most part we expect to continue to have to work through these COVID-19 challenges all year long and I applaud our field sales force for what they've been doing to get it done.
Yeah.
Yes.
Okay, Great Super helpful. Thanks for that and then just shifting gears to primary care physicians. How are you seeing tcp's adaptor prescribing more patients on pumps and how does the process different with the PCP versus an endocrinologist and I guess you could dream, how many target pcp's are there.
I don't have a sense for the number off top of my head I can tell you that we primarily interact with Endo is as you would think but we do have we do keep track of insulin usage.
At TCP offices, and we actually do visit offices that do have significant amounts of insulin usage and.
And so I think that the.
The interaction is there is there is probably more of a training burden that's required in that setting.
We are having such success.
Off the top of my head I don't recall the numbers.
And how significant they are at this point in time, we definitely as we move to type two we definitely are interested in looking at that channel carefully and trying to figure out ways to to access it.
Without significantly growing the sales force.
And we think training is a big important part of that.
Sure.
Yeah.
Thank you. Our next question comes from Jeff Johnson of Baird. Please go ahead.
Hey, guys, good afternoon, and I apologize I'm jumping back and forth between a couple calls, but I just wanted to check one thing just on the supplies revenue is back to Jason's question on the international side, but even in the U S side. Both both numbers kind of came short of our model and I can see it's either pricing has come down on some of the supplies, maybe dropouts were higher than normal in the quarter.
Or my modeling was just off and I have a feeling that it's that latter one but just help us understand kind of like supplies, maybe seemed a little softer both U S and international this quarter. Thanks.
Sure and I'll separate that she is they're slightly different conversations from the U S perspective, I guess I could say on both pricing has been pretty consistent and really when you think about the U S. Much like we see seasonality from pump purchases the same sort of seasonality exists for supply purchases as well. So what you have our people he deduct.
Both are resetting said many times at the end of the year, they will stock up on supply and it will impact our Q1 quarters.
So in our models, we didn't see anything unusual with the first quarter supply trends in the U S. In particular and I should make it clear to you we see very high retention with our customers.
Those renewing as well as people who.
Continue to just stay on the product.
Out of warranty.
<unk> been very strong and stable or probably even more so since controlling came about so in the last two years.
And then from the O U S perspective, there's not so much that seasonality aspect. It just goes back to these dynamics that the distributors trying to manage the inventory on their shelves with unpredictable order times and so it's about when theyre trying to figure out what what they need to ship, when making shipping and frankly, how to ship it to get it when they want it.
So it's more about that variability than he is about seasonality.
Yeah that helps thanks a lot.
Take care Jeff.
Thank you once again to ask a question. Please press star one and you touched on telephone again Thats Star one on your Touchtone telephone SaaS question.
Our next question comes from Josh Jennings of Cowen <unk> Company. Your line is open.
Hi, This is Brian here for Josh. Thank you for taking my questions.
I wanted to go back to just the the international distributor inventory levels topic, our art levels back to normal now and how are you thinking about reorders. This quarter after the first quarter de stocking.
Hey, you know what we've tried to do with when we know theres going to be something materially different from from the trends that we've called it out each time as we go into the second quarter Theres nothing to speak necessarily for any particular distributor. So when we and just to recap. When we ended in 2021, we were very aware that certain distributors.
<unk> had enough inventory on their shelves, where they werent going to be.
First quarter orders to replenish and so as we go into second quarter.
We feel good about the fact that it's going to be something if theres, a normal something more normal and each distributor order at what would be a standard level.
Okay. Thank you and on Mobi I think you previously referenced the filing is a summer time filing so the third quarter language seems very consistent to me, but I just wanted to confirm that the timing of the submission hasnt changed.
I guess, if I could ask a follow on question just will you be releasing data specific to mobi either at the time of the filing or while it's under review.
Yes, I mean, I think that regarding timing as you get closer to the end of his schedule you get you get.
Better visibility on it and I think that we knew it wasn't going to be June and so we just wanted to make that clear. So it's a minor it's a mitre situation.
Relative to data I would say that the data that we have presented really has been on the algorithm and that's since it is interoperable algorithm. It can be used on mobile or on on T. Slim. So.
Whereas we're filing.
<unk> to be an ace pump.
So as a result of that we can integrate the algorithm onto the pump with no regulatory filing. So all we have to do is get the ace pump approval.
So.
At this point in time, nothing specific relative to data as planned I think that we'll probably be sharing some of the human factors work, that's being done some of the benefits that our psycho social the the ease of use.
The response to the size and the mobile app those sorts of things but.
But I don't think there'll be any clinical data at this point in time.
Understood. Thank you.
Youre welcome.
And as there are no.
Further questions in queue. This does conclude today's conference call. Thank you for participating you may now disconnect.
Okay.
[music].
Yes.
Yes.
Okay.
Great.
Yes.
Hum.
Okay.
Great.
No.
Okay.
Okay.