Q1 2025 DexCom Inc Earnings Call
Operator: Welcome to the DexCom first quarter 2025 earnings release conference call.
Welcome to the decks Com first quarter 2025 earnings release Conference call. My name is luella and that will be your operator for today's call. At this time all participants are in a listen only mode. Later, we will conduct a question and answer session. During the question and answer session. If you have.
Operator: My name is Luella and I will be your operator for today's call. At this time, all participants are in a listen-only mode.
Operator: Later, we will conduct a question and answer session. During the question and answer session, if you have a question, please press star followed by the number one on your touchtone phone. As a reminder, the conference is being recorded.
Speaker Change: A question. Please press star followed by the number one on your Touchtone phone as a reminder, the conference is being recorded I will now turn the call over to Sean Christensen.
Sean Christensen: I will now turn the call over to Sean Christensen, Vice President of Finance and Investor Relations. Sean, you may begin.
Speaker Change: This president of finance and Investor Relations Shawn you may begin.
Kevin Sayer: Welcome to DexCom's first quarter 2025 earnings call.
Speaker Change: Welcome to <unk> Com's first quarter 2025 earnings call. Our agenda begins with Kevin Sayer, <unk>, Chairman, President and CEO, who will summarize our recent highlights and ongoing strategic initiatives, followed by a financial review and outlook from Jeremy Sylvain <unk>, Our Chief Financial Officer. Following our prepared remarks, we will open the call up for your questions at the.
Sean Christensen: Our agenda begins with Kevin Sayer, DexCom's chairman, president, and CEO, who will summarize our recent highlights and ongoing strategic initiatives, followed by a financial review and outlook from Jeremy Sylvain, our chief financial officer. Following our prepared remarks, we will open the call up for your questions. At that time, we ask analysts to limit themselves to one question each so we can provide an opportunity for everyone participating today.
Jeremy Sylvain: At time, we ask analysts to limit themselves to one question. Each so we can provide an opportunity for everyone participating today. Please note that there are also slides available related to our first quarter 2025 performance on the decks Com Investor Relations website on the events and presentations page with that let's review our safe Harbor statement.
Sean Christensen: Please note that there are also slides available related to our first quarter 2025 performance on the DexCom Investor Relations website on the events and presentations page.
Sean Christensen: With that, let's review our safe harbor statement. Some of the statements we will make on today's call may constitute forward-looking statements. These statements reflect management's intentions, beliefs, and expectations about future events, strategies, competition, products, operating plans, and performance. All forward-looking statements included on this call are made as of the date hereof, based on information currently available to DexCom, are subject to various risks and uncertainties, and actual results could differ materially from those anticipated in the forward-looking statements. The factors that could cause actual results to differ materially from those expressed or implied by any of these forward-looking statements are detailed in DexCom's annual report on Form 10-K, most recent quarterly report on Form 10-Q, and other filings with the Securities and Exchange Commission.
Jeremy Sylvain: Some of the statements we will make on today's call may constitute forward looking statements. These statements reflect management's intentions beliefs and expectations about future events strategies competition products operating plans and performance. All forward looking statements included on this call are made as of the date hereof based on information currently available to <unk>.
Jeremy Sylvain: Some are subject to various risks and uncertainties and actual results could differ materially from those anticipated in the forward looking statements. The factors that could cause actual results to differ materially from those expressed or implied by any of these forward looking statements are detailed in <unk> annual report on Form 10-K, most recent quarterly report on Form 10-Q and other Fi.
Jeremy Sylvain: Flings with the Securities and Exchange Commission, except as required by law, we assume no obligation to update any such forward looking statements. After the date of this call or to conform. These forward looking statements to actual results. Additionally, during the call we will discuss certain financial measures that have not been prepared in accordance with GAAP unless otherwise noted all references to financial measures.
Sean Christensen: Except as required by law, we assume no obligation to update any such forward-looking statements after the date of this call or to conform these forward-looking statements to actual results.
Sean Christensen: Additionally, during the call, we will discuss certain financial measures that have not been prepared in accordance with GAAP. Unless otherwise noted, all references to financial measures on this call are presented on a non-GAAP basis. This non-GAAP information should not be considered in isolation or as a substitute for results or superior to results prepared in accordance with GAAP.
Jeremy Sylvain: On this call are presented on a non-GAAP basis. This non-GAAP information should not be considered in isolation or as a substitute for results or superior to results prepared in accordance with GAAP. Please refer to the tables in our earnings release and the slides accompanying our first quarter earnings call for a reconciliation of these measures to their most directly comparable GAAP financial measure.
Sean Christensen: Please refer to the tables in our earnings release and the slides accompanying our first quarter earnings call for reconciliation of these measures to their most directly comparable GAAP financial measure.
Kevin Sayer: Now, I will turn it over to Kevin. While we are still early in this launch, our team has moved quickly to enhance the Stello experience with new software updates and broader distribution. During the first quarter, this included launching a 180-day Data Lookback feature, which was in direct response to early customer feedback. This is a great example of our ability to quickly iterate the Stello app to provide new customer insights and deliver a more personalized experience. Stello also officially went live on the Amazon storefront during the quarter, which provides our customers another easy access point on one of the highest volume e-commerce sites in the world.
Kevin Sayer: Now I will turn it over to Kevin.
Speaker Change: Thank you Sean and thank you everyone for joining US today, we reported first quarter organic revenue growth of 14% compared to the first quarter of 2024. This represented our second straight quarter of re accelerating revenue growth as we benefited from continued strong category demand recent access wins and focused execution.
Speaker Change: And by our team and our U S business, we successfully balanced strong demand while navigating short term supply dynamics. Our teams worked hard to provide consistent support for our customers channel partners and physician community.
Speaker Change: We moved quickly to ensure limited customer disruption and set a clear lines of communication with all involves stakeholders. This included launching a public website that provided status updates and direct customer support for anyone impacted during this transition our manufacturing and logistics teams worked around the clock to make sure our product is.
Speaker Change: Where it needed to be to meet our customers' needs. We work closely with our distribution partners to clearly align our updated supply timelines what their customer demand and we would like to acknowledge the great work of these partners and providing excellent care to our users as you can see we prioritized customer care throughout this period and I hope this commitment and.
Speaker Change: <unk> to be noticed we experienced an acceleration in demand from new customers, which again came in at record levels. During Q1, we are clearly seeing the benefit of expanding our commercial reach last year after significantly expanding our prescriber base in 'twenty 'twenty four we are going deeper across these practices as physicians.
Speaker Change: Span their desk com CGM prescribing patterns importantly, we made these commercial investments knowing that new decks com technology and broader access we're just around the corner.
Speaker Change: Since that time, we introduced Stello as the first over the counter C. G. M launched several new software and connectivity updates to enhance the customer experience and secured much broader coverage within the type two market. We started the year by announcing that we had secured access at two of the three largest pbms for anyone with diabetes regardless of.
Speaker Change: Whether they use insulin while it is still early we've been very encouraged to see physicians quickly adjust their prescribing patterns to match. This new coverage in fact during the first quarter. We already saw a notable uptick in new customer starts coming from the type two non insulin population compared to any time in our company's history will now look to bill.
Speaker Change: On this momentum through targeted awareness campaigns and by advocating for even broader type two coverage over time.
Speaker Change: Along those lines I'm excited to share that as of this summer the third major P. B M will also begin covering decks com G. Seven for anyone with diabetes and some of their key formularies, having the three largest pbms now covering decks com for all people with diabetes represents a true step change in the coverage landscape. It also indicates that a clear.
Speaker Change: Incentives as far beyond both the health and economic benefits of incorporating CGM earlier in diabetes care plans between these three large pbms and additional coverage, we expect to finalize in the coming months next call. We'll have coverage for nearly 6 million people with type two diabetes, who are not on insulin by the end of the year, while theres still.
Speaker Change: Ah represents only a portion of this 25 million person population in the U S. We often see smaller and customized plans quickly follow suit over the larger P. B M. Formularies will also continue to strengthen our case with payers with additional data readouts in the coming quarters. This includes our recently announced randomized control trial for people with type two.
Speaker Change: Diabetes, who are not on insulin similar to our mobile and Diamond studies for the insulin using population. We believe this dataset can become the centerpiece of our broader type two non insulin evidence roadmap. This level of evidence as historically been a key factor in driving definitive changes to standards of care and unlocking even broader access.
Speaker Change: Globally as.
Speaker Change: As we continue to advocate for broader type two coverage, we have already greatly simplified access to <unk> com technology through the launch of our over the counter biosensor Celo Stello continues to attract a wide range of new customers across the type two diabetes pre diabetes and health and wellness landscapes. We are also seeing growing use of cello among.
Speaker Change: The physician community, who can now tailor their next home care plans based on each customer's coverage and metabolic help.
Speaker Change: While we are still early in this launch our team has moved quickly to enhance the stello experience with new software updates and broader distribution. During the first quarter. This included launching a 180 day data look back feature which was in direct response to early customer feedback. This is a great example of our ability to quickly iterate. This.
L O app to provide new customer insights and deliver a more personalized experience Stello also officially went live on the Amazon storefront during the quarter, which provides our customers. Another easy access point on one of our highest volume e-commerce sites in the world and we expect even more distribution partners to broaden our <unk>.
Kevin Sayer: And we expect even more distribution partners to broaden our commercial access in the future. These updates are already resonating with our customers. Over the course of the first quarter, we saw even greater Stello customer experience metrics in response to these updates, and we believe that we're just getting started with what we can do to lead our customers to greater metabolic health.
Speaker Change: Actual access in the future.
Speaker Change: These updates are already resonating with our customers over the course of the first quarter, we saw even greater seller customer experience metrics and respond to these updates and we believe that we're just getting started with what we can do to lead our customers to greater metabolic health. Our first quarter results show that our commercial teams are performing very well and we're excited.
Kevin Sayer: Our first quarter results show that our commercial teams are performing very well, and we are excited to build from this position of strength by announcing the addition of John Coleman as our new chief commercial officer. John brings over 30 years of global commercial leadership experience to our organization across multiple healthcare segments and channels. Over this time, he's established a proven track record of execution, making John a great fit for DexCom at this important point in our company's history. We're excited to have him lead our commercial organization.
Speaker Change: To build from this position of strength by announcing the addition of John Coleman as our new Chief Commercial Officer, John brings over 30 years of global commercial leadership experience to our organization across multiple health care segments and channels over this time. He has established a proven track record of execution, making John a great fit for decks com at this important point in.
Speaker Change: Our company's history, we're excited to have him lead our commercial organization I would also like to address the warning letter that our company received from the FDA in March. This letter was related to observations made by the agency following inspections of our San Diego and Mesa facilities. During 'twenty 'twenty four we take any FDA recommendations very soon.
Kevin Sayer: I would also like to address the warning letter that our company received from the FDA in This letter was related to observations made by the agency following inspections of our San Diego and Mesa facilities during 2024. We take any FDA recommendations very seriously, so our team immediately began instituting corrective actions to address these observations.
Speaker Change: Seriously. So our team immediately began instituting corrective actions to address these observations while we were disappointed to receive a warning letter I'm incredibly proud of how our teams have rallied together with a thorough review and response and we look forward to working together with the F. D. A to further strengthen our systems and processes as well.
Kevin Sayer: While we were disappointed to receive a warning letter, I'm incredibly proud of how our teams have rallied together with a thorough review and response, and we look forward to working together with the FDA to further strengthen our systems and processes.
Kevin Sayer: As one example of our ongoing collaboration with the agency, we were excited to recently announce FDA clearance for our 15-day DexCom G7 system. This marks another innovation milestone for our company, as our 15-day product advances both wear time and accuracy levels for G7. With performance data demonstrating an MARD of 8.0%, this sets a new bar in the industry in terms of sensor accuracy.
Speaker Change: One example of our ongoing collaboration with the agency. We were excited to recently announce FDA clearance for our 15 day decks Com G. Seven system. This marks another innovation milestone for our company as our 15 day product advances both wear time and accuracy levels for G. Seven with performance data demonstrating an M. A R D of eight point.
Speaker Change: <unk> percent this sets a new bar in the industry in terms of sensor accuracy. We are incredibly excited to bring this product to market. As previously mentioned, we plan to launch our 15 day G. Seven system in the second half of the year and our team is working quickly to prepare for this rollout. This includes working with payors to establish coverage in advance of.
Kevin Sayer: We are incredibly excited to bring this product to market. As previously mentioned, we plan to launch our 15-day G7 system in the second half of the year, and our team is working quickly to prepare for this rollout.
Jereme Sylvain: This includes working with payers to establish coverage in advance of launch and collaborating with our pump partners to ensure a seamless transition for G7-compatible automated insulin delivery systems. With that, I'll turn it over to Jereme. Thank you, Kevin.
Speaker Change: Lunch and collaborating with our pump partners to ensure a seamless transition for G. Seven compatible automated insulin delivery systems with that I'll turn it over to Jeremy.
Thank you Kevin as a reminder, unless otherwise noted the financial measures presented today will be discussed on a non-GAAP basis reconciliations to GAAP can be found in today's earnings release as well as the slide deck on our IR website.
Jereme Sylvain: As a reminder, unless otherwise noted, the financial measures presented today will be discussed on a non-GAAP basis. Reconciliations to GAAP can be found in today's earnings release, as well as the slide deck on our IR website. For the first quarter of 2025, we reported worldwide revenue of $1.036 billion, compared to $921 million for the first quarter of 2024, representing growth of 12% on a reported basis and 14% growth on an organic basis. As a reminder, our definition of organic revenue excludes the impact of foreign exchange in addition to non-CGM revenue acquired or divested in the trailing 12 months.
Speaker Change: For the first quarter of 2025, we reported worldwide revenue of one point <unk> three $6 billion compared to 921 million for the first quarter of 2024, representing growth of 12% on a reported basis and 14% growth on an organic basis. As a reminder, our definition of organic revenue excludes the.
Speaker Change: Impact of foreign exchange in addition to non CGM revenue acquired or divested in the trailing 12 months.
Jereme Sylvain: U.S. revenue totaled $751 million for the first quarter, compared to $653 million in the first quarter of 2024, representing an increase of 15%. As Kevin mentioned, our team did a great job navigating short-term supply dynamics while supporting both new and existing customer demand. We experienced another quarter of strong new customer demand in the U.S., with a particularly notable uptick coming from the Type 2 non-insulin-using population. By having the broader sales force in place, we were able to quickly take advantage of the coverage expansion that occurred in January to drive a nice acceleration in new patient performance.
Speaker Change: U S revenue totaled 751 million for the first quarter compared to 653 million in the first quarter of 2024, representing an increase of 15%.
Kevin Sayer: As Kevin mentioned, our team did a great job navigating short term supply dynamics, while supporting both new and existing customer demand, we experienced another quarter of strong new customer demand in the U S with a particularly notable uptick coming from the type two non insulin using population by having the broader sales force in place we were able to quickly.
Take advantage of the coverage expansion that occurred in January to drive a nice acceleration in new patient performance and we look forward to building on this momentum with our additional coverage kicking in over the course of the year.
Jereme Sylvain: And we look forward to building on this momentum, with our additional coverage kicking in over the course of the year. Additionally, as we previously indicated, we saw the combined impact of channel mix and rebate eligibility moderate during the first quarter. This helped narrow the gap between U.S. volume and revenue growth compared to the prior two quarters. International revenue grew 7%, totaling $286 million in the first quarter. International organic revenue growth was 12% for the first quarter. Our international business demonstrated pockets of strength, particularly in areas we have highlighted recent coverage expansions in the Type II landscape.
Kevin Sayer: Additionally, as we previously indicated we saw the combined impact of channel mix and rebate eligibility moderate during the first quarter. This helped narrow the gap between U S volume and revenue growth compared to the prior two quarters.
Kevin Sayer: International revenue grew 7% totaling 286 million in the first quarter International organic revenue growth was 12% for the first quarter, our international business demonstrated pockets of strength, particularly in areas. We have highlighted recent coverage expansions in the type two landscape. Examples of this will be continued growth of our business in Japan.
Jereme Sylvain: Examples of this would be continued growth of our business in Japan, as well as our growth of DexCom1 platform in France. We continue to like our overall strategic position as regional access continues to grow. We see several opportunities for expansions of Type 2 coverage upcoming in 2025 and are building good momentum in the core international markets to eventually match the level of coverage that we have achieved in the U.S. Our first quarter gross profit was $596.2 million, or 57.5% of revenue, compared to 61.8% of revenue in the first quarter of 2024. As we said on the fourth quarter call, we expected Q1 gross margin to be below our full year levels because of historic seasonality, as well as having to navigate some of the near-term supply dynamics that were caused by a shipment of sensors that was damaged in the fourth quarter.
Kevin Sayer: And as well as our growth of decks com one platform in France, we continue to like our overall strategic position as regional access continues to grow we see several opportunities for expansions of type two coverage upcoming in 2025 and are building good momentum in the core international markets to eventually match the level of coverage that we have achieved in the U S.
Kevin Sayer: Our first quarter gross profit was $596 2 million or 57, 5% of revenue compared to 61.8% of revenue in the first quarter of 2024.
Speaker Change: As we said on the fourth quarter call. We expected Q1 gross margin to be below our full year levels because of historic seasonality as well as having to navigate some of the near term supply dynamics that were caused by a shipment of sensors that was damaged in the fourth quarter. We are proud of how we navigated the first quarter to prioritize the care of our customers, but as Kevin alluded to earn.
Jereme Sylvain: We are proud of how we navigated the first quarter to prioritize the care of our customers, but as Kevin alluded to earlier, we did have to incur some incremental costs to do so. As an example, we have expedited our lead times by chartering direct flights to fulfill distribution centers, which comes at a higher cost than our traditional freight process. We exit the first quarter in a much better position with our channel inventory levels. However, there is still work on going to get our internal inventory back to normal levels. As a result, we expect some of these costs to continue until we are back at normal inventory levels, which we have factored into our full-year guidance update.
Speaker Change: Earlier, we did have to incur some incremental cost to do so as an example, we have expedited our lead times by chartering direct flights to fulfill distribution centers, which comes at a higher cost than our traditional freight processes. We exit the first quarter in a much better position with our channel inventory levels. However, there is still work ongoing to get or internal investment.
Speaker Change: Tori back to normal levels as a result, we expect some of these costs to continue until we are back at normal inventory levels, which we have factored into our full year guidance update.
Jereme Sylvain: Operating expenses were $453.1 million for Q1 of 2025, compared to $428.9 million in Q1 of 2024. Operating income was $143.1 million, or 13.8% of revenue in the first quarter of 2025, compared to $140.2 million, or 15.2% of revenue in the same quarter of 2024. Adjusted EBITDA was $230.4 million, or 22.2% of revenue for the first quarter, compared to $220.9 million, or 24% of revenue for the first quarter of 2024. Net income for the first quarter was $127.7 million or $0.32 per share.
Speaker Change: Operating expenses were $453 1 million for Q1 of 2025 compared to $428 9 million in Q1 of 2024.
Speaker Change: Operating income was $143 1 million or 13, 8% of revenue in the first quarter of 2025 compared to $140 2 million or 15, 2% of revenue in the same quarter of 2024.
Speaker Change: Adjusted EBITDA was $234 million or 22, 2% of revenue for the first quarter compared to $220 9 million or 24% of revenue for the first quarter of 2024.
Speaker Change: Net income for the first quarter was 127.7 million or 32 cents per share.
Jereme Sylvain: We remain in a great financial position, closing the quarter with approximately $2.7 billion of cash and cash equivalents. This cash position, along with our strong free cash flow profile, provides a lot of ongoing flexibility in our capital allocation decisions.
We remain in a great financial position closing the quarter with approximately $2 7 billion of cash and cash equivalents. This cash position along with our strong free cash flow profile provides a lot of ongoing flexibility in our capital allocation decisions along those lines. We are excited to announce the 750 million share repurchase program today.
Jereme Sylvain: Along those lines, we are excited to announce the $750 million share repurchase program today. Given our strong revenue and cash flow growth outlook, we see this as an opportunity to enhance our capital structure, while still giving ourselves plenty of cash available to address our 2025 convertible notes and any other strategic uses of cash. Turning to guidance, we are reaffirming our prior revenue guidance of $4.6 billion, representing growth of 14% for the year. For margins, we are reducing our full-year non-GAAP gross profit margin guidance to approximately 62%, while reaffirming our full-year non-GAAP operating margin and adjusted EBITDA margin guidance of approximately 21% and 30% respectively.
Speaker Change: Given our strong revenue and cash flow growth outlook, we see this as an opportunity to enhance our capital structure, while still giving ourselves plenty of cash available to address our 2025 convertible notes and any other strategic uses of capital.
Speaker Change: Turning to guidance, we are reaffirming our prior revenue guidance of $4 6 billion representing growth of 14% for the year for margins, we are reducing our full year non-GAAP gross profit margin guidance to approximately 62%, while reaffirming our full year non-GAAP operating margin and adjusted EBITDA margin guidance of approximately.
Speaker Change: 21, and 30% respectively.
Jereme Sylvain: Our new gross margin guidance reflects the impact of our first quarter result and a few additional factors, so I want to provide additional color here on how we've approached it and the cadence throughout the year. We expect the first quarter result to have an approximately 75 basis point impact on the full year gross margin relative to our prior guidance. As we continue to rebuild our inventory levels while addressing increasing demand, we have factored in an additional 100 basis point impact to our global freight costs to support expedited shipping. We expect that this impact will lessen as we move throughout the year.
Speaker Change: Our new gross margin guidance reflects the impact of our first quarter results and a few additional factors. So I wanted to provide additional color here on how we've approached it in the cadence throughout the year. We expect the first quarter result to have an approximately 75 basis point impact on the full year gross margin relative to our prior guidance as we continue to rebuild.
Speaker Change: Our inventory levels, while addressing increasing demand we have factored in an additional 100 basis point impact to our global freight cost to support expedited shipping we expect that this impact will lessen as we move throughout the year. We have also built into this gross margin guidance, a 50 basis point impact of inflationary pressures from tariffs and the supply.
Jereme Sylvain: We have also built into this gross margin guidance a 50 basis point impact of inflationary pressures from tariffs in the supply chain. While we do not necessarily expect a large direct tariff impact given our diverse manufacturing footprint and the health conditions that we address, we nevertheless want to be prudent given the fluctuations in the global trade landscape and the indirect impact tariffs have on supply costs. Finally, we anticipate an approximately 25 basis point impact to our global manufacturing costs based on fluctuations in the U.S. dollar. Despite the pressure on gross margin, we are in the position to offset that pressure and reiterate our operating margin and adjusted EBITDA margin guidance.
Speaker Change: While we do not necessarily expect a larger direct tariff impact given our diverse manufacturing footprint in the health conditions that we address we nevertheless want to be prudent given the fluctuations in the global trade landscape and the indirect impact tariffs have on supply costs. Finally, we anticipate an approximately 25 basis point impact.
Speaker Change: <unk> to our global manufacturing costs based on fluctuations in the U S. Dollar. Despite the pressure on gross margin. We are in the position to offset that pressure and reiterate our operating margin and adjusted EBITDA margin guidance. Our teams are doing a good job prioritizing investments in the right areas, while setting up our functions to scale efficiently.
Jereme Sylvain: Our teams are doing a good job prioritizing investments in the right areas while setting up our functions to scale efficiently.
Sean Christensen: With that, we can open up the call for Q&A. Sean? Thank you, Jereme.
Speaker Change: With that we can open up the call for Q&A Sean.
Sean Christensen: In addition to Kevin and Jereme, we will also have Jake Leach, our Chief Operating Officer, joining us for our question and answer session. As a reminder, we ask our audience to limit themselves to only one question at this time and then re-answer the queue if necessary.
Jeremy Sylvain: Jeremy In addition to Kevin and Jeremy will also have Jake Leach, our chief operating officer, joining us for our question and answer session. As a reminder, we ask our audience to limit themselves to only one question at this time and then reenter the queue if necessary. Please provide the Q&A instructions.
Operator: Please provide the Q&A instructions. Thank you.
Speaker Change: Thank you we will now begin the question and answer session. If you have a question. Please press star followed by the number one on your Touchtone phone if you wish to be removed from the queue. Please press star one again.
Operator: We will now begin the question and answer session.
Operator: If you have a question, please press star, followed by the number one on your touchtone phone. If you wish to be removed from the queue, please press star one again. If you are using a speakerphone, you may need to pick up the handset first before pressing the numbers. Once again, if you have a question, please press star one on your touchtone phone.
Speaker Change: You are using a speakerphone you may need to pick up the handset first before pressing the numbers. Once again, if you have a question. Please press star one on your Touchtone phone.
Matthew Taylor: Matt Taylor from Jeff on the line with a question. Your line is now open. Thank you. Thank you for taking the question. Congrats on a good quarter. I wanted to touch on the U.S. growth improvement here and see if you could talk a little bit about two things. One, did supply have any impact on the revenue growth? Could you characterize that? And then you keep talking about the gap closing between dollars and volumes. I was wondering if you could comment on what you think market volume growth is or your volume growth is so we can understand what the revenue growth could be through the year and how quickly that gap closes would be helpful.
Speaker Change: Matt Taylor from Jack on the line with a question.
Speaker Change: Your line is now.
Speaker Change: Sure.
Speaker Change: Thank you. Thank you for taking my question and congrats on a good quarter I wanted to touch on the U S growth improvement here.
Speaker Change: If you could talk a little bit about two things one is supply have any impact on the revenue growth could you characterize that and then you can.
Speaker Change: Are you talking about the gap closing between dollars and volumes I was wondering if you could comment on what you think market volume growth is or your volume growth is so we can understand what the revenue growth can be through the year and how quickly that gap closes would be helpful.
Jereme Sylvain: Yeah, hey, Matt, thanks for the question. This is Jereme. Certainly happy to answer it. You know, in terms of in terms of supply dynamics, you know, I think we exited the quarter with normal supply levels in the channel. And so, you know, we had to work pretty hard over the course of the quarter to make sure we got there. I think everybody knew when we signaled it in the February call that we were going to navigate through that. So kudos to the team for all the work that they did to get there, prioritizing customers first.
Jeremy Sylvain: Yeah, Hey, Matt. Thanks for the question this is Jeremy.
Jeremy Sylvain: Certainly happy to answer it in terms of in terms of supply dynamics, you know I think we exited the quarter with the normal supply levels in the channel and so we haven't worked pretty hard over the course of the quarter to make sure. We got there I think everybody knew and we signaled that in the February call that we were going to navigate through that so kudos to the team for all.
Jeremy Sylvain: The work that they did to get there prioritizing customers first so what you see in the revenue figures is I would say a normalized inventory level and therefore really a normalized pattern in terms of the impact then on new patients look it was a record new patient quarter. So I think we were really happy to see that at the end of the day. So we still had very very strong performance during that window.
Jereme Sylvain: So what you see in the revenue figures is, I would say, normalized inventory level and therefore really a normalized pattern in terms of the impact then on new patients. Look, it was a record new patient quarter. So I think we were really happy to see that at the end of the day. So we still had very, very strong performance during that window and due to all the work that the teams did to navigate through there.
Jeremy Sylvain: And due to all the work that the teams did to navigate through there in terms of what that means for volumes et cetera, well, we don't necessarily give volumes by region. What I think we have done in the past is we've given you new patient our total patient details and we exited last year at about a 25% patient increase which is a good analog for volume growth.
Jereme Sylvain: In terms of what that then means for volumes, et cetera, well, we don't necessarily give volumes by region. What I think we have done in the past is we've given you new patient or total patient details. And we actually did last year at about a twenty five percent patient increase, which is a good analog for volume growth and given the performance we saw over the course of the quarter record new patients, there's no reason to believe that the volume growth wasn't consistent with that. So that will help for the models. It'll also help. And you consider Stella as a component of that as you're thinking about what that impact is.
Jeremy Sylvain: And given the performance we saw over the course of the quarter record new patients. There is no reason to believe that the volume growth wasn't consistent with that so that will help for the models that will also help would you consider stello as a component of that as youre thinking about what that impact was but the big takeaway and I think you're pointing out is that price volume Delta is coming in as we said it would and you saw that play out in the quarter.
Jereme Sylvain: But the big takeaway, and I think you're pointing at it, is that price volume delta is coming in as we said it would. And you saw that play out. Awesome, thank you.
Jeremy Sylvain: Awesome. Thank you.
Simran: Your next question comes from the line of Larry Biegelsen from Wells Fargo. Please go ahead. Hey, good afternoon. This is Simran on for Larry. Thanks for taking the questions. Maybe just on guidance. You delivered 14% organic growth in Q1, but left full year guidance unchanged. So Jeremy, I mean, how do you see the rest of the year playing out, particularly in the second half where the comps do get easier? Just trying to understand why growth in the full year would be the same as in Q1. And then maybe just also on the gross margin guidance.
Jeremy Sylvain: Your next question comes from the line Lori Petersen from Wells Fargo. Please go home.
Speaker Change: Hey, good afternoon assessed them or not in for Larry Thanks for taking the questions.
Jeremy Sylvain: Maybe just on guidance.
Jeremy Sylvain: <unk> delivered 14% organic growth in Q1.
Jeremy Sylvain: But last full year guidance unchanged.
Speaker Change: Jeremy I mean, how do you see the rest of the year playing out, particularly in the second half where the comps do get easier.
Speaker Change: I'm just trying to understand why growth in the full year would be the same as in Q1.
Speaker Change: And then maybe just also on the gross margin guidance I mean is there anything assumed in that guide from the 15 day well.
Jereme Sylvain: I mean, is there anything assumed in that guide from the 15-day launch?
Speaker Change: Lunch.
Jereme Sylvain: Yeah, so I can answer those, you know, in terms of the guidance for the full year, you know, the big takeaway is first quarter is first quarter, you know, there's a full year up in front of us here. And so after a quarter, we felt it appropriate to see how the year unfolds before we start changing anything around guidance. We gave the guidance for the year. We really wanted to give a commitment on the full year. And I think the big takeaway is we're off to a good start, a record patient quarter, and you saw the growth.
Speaker Change: Yeah sure I can answer those in terms of the guidance for the full year. The big takeaways first quarters first quarter Theres, a full year up in front of us here and so after a quarter, we felt it appropriate to see how the year unfolds before we start changing anything around guidance. We gave the guidance for the year, we really wanted to give a commitment on the full year.
Speaker Change: The big takeaway is we're off to a good start a record patient quarter and you saw the growth. So certainly happy with that it's not saying anything other than we're happy with the quarter. We're bullish on the business. It's just one quarter, we want to see how the rest of the year unfolds.
Jereme Sylvain: So certainly happy with that. It's not saying anything other than we're happy with the quarter. We're bullish on the business. It's just one quarter. We want to see how the rest of the year unfolds. In terms of the guidance and how we're thinking about 15 day, there was always a little bit of 15 day in the guidance, the original guidance we gave. And there's still a little bit of that in the current guidance we gave, and it's commensurate with the launch expectations of the product, which is in the second half of the year. I think when we gave the guidance at the start of the year, we mentioned it was a very small amount where we wouldn't necessarily change our guidance.
Speaker Change: In terms of the guidance and how we're thinking about 15 day, there was always a little bit of a 15 day in the guidance. The original guidance, we gave and Theres still a little bit of that in the current guidance, we gave and it's commensurate with the launch the launch.
Speaker Change: Expectations of the product, which is in the second half of the year I think when we when we gave the guidance at the start of the year. We mentioned it was a very small amount, where we wouldn't necessarily change our guidance. It's the 15 day timeline change just given as a total of our population of sensors. It's a relatively small amount as we start to ramp it up that remains true so nothing really.
Jereme Sylvain: If the 15 day timeline change, just given as a total of our population of sensors, it's a relatively small amount as we start to ramp it up. That remains true. So nothing really changed there. It is in the guidance, but nothing changed from the last time we provided in terms of our.
Speaker Change: There is in the guidance, but nothing changed from the last time, we provided in terms of our assumptions.
Simran: Great, thank you.
Speaker Change: Great. Thank you.
Robbie Marcus: Your next question comes from the line of Robbie Marcus with J.P. Morgan. Please go ahead.
Speaker Change: Your next question comes from the line of Robbie Marcus with Jpmorgan. Please go ahead.
Robbie Marcus: Oh great, thanks for taking the questions, congrats on a nice start to the year. I wanted to ask on the type 2 patients, particularly non-intensive and basal patients. You said you had good growth in non-intensive type 2, I imagine basal as well, and just wanted to get a better understanding of sort of the utilization and reorder rates and patient trends you're seeing there. I realize basal is predominantly insured patients non-intensive, but both for insured and non-insured and some of the things. that you're doing to help keep patients reordered. Yeah, thanks, Robbie. We have stated for a long time that we see very good retention rates in these populations, particularly given the state of reimbursement.
Robbie Marcus: Oh, great. Thanks for taking my questions. Congrats on a nice start to the year here.
Speaker Change: I wanted to ask.
Robbie Marcus: The.
Robbie Marcus: Type two patients, particularly non intensive and basal patients in.
Speaker Change: You said you had good growth in non intensive type two I imagine basal as well and just wanted to get a better understanding of sort of the.
Speaker Change: The utilization and reorder rates and patient trends youre seeing there I realize basal predominantly insured patients and a growing non intensive but both for <unk> and sheraton non insured and some of the.
Speaker Change: The things you can.
Speaker Change: That youre doing to help keep patients reordering at high rates. Thanks, a lot.
Speaker Change: Yes, Thanks Ravi.
Speaker Change: Stated for a long time that we see very good retention rates in these populations, particularly given the state of reimbursement when as we expand coverage for.
Robbie Marcus: When as we expand coverage for the basal insulin population, also, you know, the type 2 population in general, even the non-intensive, no insulin type 2 patients with reimbursement, we see utilization very good and retention very good as well. A bit lower than our type 1 patients, but not significantly. I mean, it's, and the mix has been very consistent over time. We've also seen with our stelo users, for example, the type 2 patients who are purchasing stelo are reordering quite regularly and staying on their subscription patterns and are much more likely to sign up for a subscription than they are not to.
Speaker Change: For the basal insulin population also.
Speaker Change: The type two population in general even the non intensive insulin type two patients with reimbursement, we see utilization very good and retention.
Speaker Change: Good as well a bit lower than our type one patients, but not significantly.
Speaker Change: And the mix has been very consistent over time, we've also seen with our seller users for example of the type two patients who are purchasing stello, all reordering quite regularly and staying on their subscription patterns and are much more likely to sign up for a subscription.
Speaker Change: <unk> then they are not too so.
Robbie Marcus: So, across the board, when we have reimbursement, and even just those having the experience who are paying cash, we're seeing good retention and good utilization in these populations because the information is incredibly valuable. Yeah, Robbie, I think, and we announced this at your conference. I think, you know, kudos to you for having it there. We updated and published really our rates for the covered population there. You'll see those on our website. That hasn't changed since the last time we spoke. So, the utilization has been and continues to be strong in those covered markets, as Kevin alluded to.
Speaker Change: Across the board when we have reimbursement and even just those having the experience who are paying cash.
Speaker Change: Seeing good retention and good utilization of these populations because the information is incredibly valuable yes, Ravi I think we announced this at your conference I think kudos to you for having it there we updated and published really our rates for the covered population there youll see those on our website that hasnt changed since the last time, we spoke so the utilization has been in <unk>.
Speaker Change: 10 years to be strong in those covered market as Kevin alluded to when you don't have coverage is a little bit less. However, we are seeing strong uptake in stello, especially in that type two user populations. So good retention there just maybe not as much as the covered population.
Robbie Marcus: When you don't have coverage, it's a little bit less. However, we are seeing strong uptake in stelo, especially in that type 2 user population. So, good retention there, just maybe not as much as the covered population.
Robbie Marcus: Great. Appreciate it. Thank you.
Speaker Change: Great I appreciate it thank you very much.
Danielle Antalffy: Our next question comes from the line of Danielle Antalffy with EBS. Please go ahead. Thank you so much. Good afternoon, guys. Thanks so much for taking the question.
Speaker Change: Our next question comes from the line of Daniel Unhealthy, Yes. Please go ahead.
Speaker Change: Thank you so much good afternoon guys. Thanks, so much for taking the question.
Danielle Antalffy: Just a quick question on, you know, the macroeconomic environment and actually less about tariffs and more about, you know, There's several proposals for the budget, Medicare, and will we or won't we go into a recession? That's a big question. I would love, Kevin. How exposed or unexposed or protected do you guys think you are if in fact we go into a recession? And maybe give some commentary around that COVID sort of the last time, but that was very unique. So just curious what you would say there. Thanks.
Speaker Change: Just a quick question on the macroeconomic environment actually less about tariff and more about.
Speaker Change: No.
Speaker Change: The several proposal for the budget Medicare and.
Kevin Sayer: Well, we are what we go into a recession, that's a great question Kevin.
Speaker Change: How exposed are unexposed or protected you guys think you are if in fact, we go into a recession and maybe you gave some commentary around that COVID-19 sort of the last.
Speaker Change: But that was very unique so just curious what you would say there. Thanks so much.
Kevin Sayer: Yeah, I can start with that, Danielle. This is a question. We've done a full analysis on this in the past, just to see what our exposure is to coverage levels, both from coverage, employment, and then also individual circumstances. And I would say that by leaning into coverage the way we have and certainly making CGM a core part of someone's care pattern, but also the cost we save the systems and demonstrate it time and time again, while everybody is impacted in economic upturns and downturns, I think we would hold out pretty darn well. While we're not in a position to release that analysis, I think as we were going through as a management team and really as a board, as they looked at it, I think we left feeling we would be strongly positioned, at least relative to other companies in the space in a downturn.
Speaker Change: Yeah, I can start with that Danielle. This is a quick question on but we've done it we've done a full analysis on this in the past just to see what our exposure is.
Speaker Change: Two coverage levels, both from from coverage employment and then also.
Speaker Change: Individual circumstances, and I would say that by leaning into coverage the way, we have and certainly making CGM as a core part of someone's care pattern, but also the cost we save the systems.
Speaker Change: And demonstrated time and time again, while while everybody is impacted in the economic upturns and downturns I think we would hold out pretty darn well, while we're not in a position to release that analysis I think as we were going through rest of the management team and really as a board.
Speaker Change: As they looked at it.
Speaker Change: I think we left feeling will be strongly positioned at least relative to other companies in this space in a downturn. So we're excited about excited but we are we're happy about the position. We're in in the event that that takes place to weather it quite well Kevin off yet, but our broader no I'll just reiterate what Jeremy said, we're one of the few.
Kevin Sayer: So we're excited, not excited, but we're happy about the position we're in, in the event that that takes place to weather it quite well.
Kevin Sayer: Kevin, do you have a broader comment? Let's reiterate what Jeremy said. We're one of the few medical products, prescription drugs or medical devices, that provides tremendous information and also saves cost to the system. So we believe we hold up very well. All of our analyses support that, and we believe we can demonstrate that quite well, as we did when we got Medicare coverage many years ago, as we brought all the Medicaid plans along, as we moved to Basel. We've been able to demonstrate our value time and time again, and we believe we can continue to do so.
Speaker Change: Medical products.
Speaker Change: Prescription drugs or medical devices that provides tremendous information and also saves cost in our system. So we believe we hold up very well all of our analyses support that and we believe we can demonstrate that quite well as we did when we got Medicare coverage. Many years ago as we brought all the Medicaid plans along as we move to.
Speaker Change: Basil we've been able to demonstrate our value time and time again, and we believe we can continue to do so.
Jack Johnson: Thank you. Your next question comes from the line of Jack Johnson with Baird. Please go ahead. Thank you. Good afternoon, guys, congrats on the quarter. Jereme, maybe it's a question for you since it's on gross margin, but I'm wondering if you could help us kind of with the gating. You gave a good amount of information there, I understand. But it seems like to me, as I'm doing kind of back of the envelope, we should still be kind of in that very low 60 percent range, maybe even upper 50s for the second quarter. And then you get to the mid 60s in the back half.
Speaker Change: Thank you.
Speaker Change: Your next question comes from the line of Jeff Johnson with Baird. Please go home.
Speaker Change: Thank you good afternoon, guys congrats on the quarter.
Jeff Johnson: I mean, maybe it's a question for you on gross margin, but wondering if you could help us kind of what the data and you gave a good amount of information there I understand but it seems like to me as I'm doing kind of back of the envelope, we should still be kind of in that very low 60% range, maybe even upper fifties for the second quarter.
Jeff Johnson: And then you get to the mid <unk> in the back half is that still kind of the range that we should be thinking about for the setup throughout the year on growth.
Jack Johnson: Is that still kind of the range that we should be thinking about for the setup throughout the year on gross?
Jack Johnson: And then kind of a corollary to that, you know, it's not where I get my primary research, I promise you, but some of the chat boards and things like that, you know, are still showing some kind of scary pictures of maybe some manufacturing issues on sensors, things like that. You know, where are you at now? You know, you're talking about having to charter some of these flights and all that. But on the manufacturing process itself, you settled and comfortable that things coming off the line are in good shape. And this is really just about getting channel inventory back up to normalized levels, or at least your own inventory levels back up to normalized levels.
Jeff Johnson: And then kind of a corollary to that.
Jeff Johnson: Where I get my primary research I promise you that some of the chat boards and things like that are still selling some kind of scary pictures of maybe some manufacturing issues on sensors things like that.
Jeff Johnson: Where are you at now Youre talking about.
Jeff Johnson: Charter some of these flights and all of that but on the manufacturing process itself, you settled and comfortable that things coming off the liner in good shape and this is really just about getting channel inventory back up to normalized levels or at least your own inventory levels back up to normalized levels now that we're not still in the phase <unk>.
Jereme Sylvain: Now it's not, we're not still in the phase of having to fix some sort of manufacturing issues. Thank you. Yeah, maybe I can start on the the the kind of the cadence question and I can turn it over to Jake, who's here.
Speaker Change: Im sort of manufacturing issues. Thank you.
Speaker Change: Yes, maybe I can start on the kind of the cadence question and then I can turn it over to Jacob here Mike.
Jereme Sylvain: My answer very simply is, Jeff, you're really good at math, and I can't argue with your math. So well done.
Speaker Change: My answer very simply is Jeff you're really good at math and I can't argue with your math, so well done and so and then in terms of the product in.
Jake Leach: And so from and then and then in terms of the product and, you know, in the process, let me turn it over to Jake in terms of how we're thinking about that. Sure, yeah, thanks. Thanks for the question, Jeff. So, yeah, when, you know, as we have a pretty robust warranty program around sensors and sensor issues do happen, and we've seen them on the boards, too. We have no, there's no difference in frequency of those from last year to this year. We've actually made some improvements and quite a few of them. So we're very comfortable with the product that's flowing off the lines.
Jacob: And the process, let me turn it over to Jake in terms of how we're thinking about that sure. Yes. Thanks for the question Geoff So yeah.
Speaker Change: Yes.
Speaker Change: As we have a pretty robust warranty program around sensors and sensor issues do happen and we see him on the board too.
Speaker Change: We have no there's no difference in frequency of those.
Speaker Change: From last year to this year is we've actually made some improvements in quite a few of them.
Speaker Change: So we're very comfortable with the product thats flowing off the lines.
Jake Leach: We are working very hard to rebuild our internal inventories. And so our lines, as we exited the quarter, we were running at some record output. But that being said, we have a significant amount of testing and quality controls, and we feel very comfortable about that product. So there's no inherent manufacturing issue to fix. What we're really focused on through all this expediting is just making sure we've got product where it needs to be so that we have continuity of care for both current customers and also supply product to those new customers. That's a lot of what's laid out in this first quarter.
Speaker Change: We are.
Speaker Change: Working very hard to rebuild our internal inventories and so our lines as we exited.
Speaker Change: The quarter, we were running at some record output, but that being said, we have a significant amount of testing and quality controls, how we feel very comfortable.
Speaker Change: That product so there's no inherent manufacturing issue to fix what we're really focused on is where all this expediting as just making sure we've got product where it needs to be so that we have continuity of care for both current customers and also.
Speaker Change: Supply product to those those new customers. That's a lot of what played out in this first quarter.
Jack Johnson: Helpful.
Jayson Bedford: Thank you. Your next question comes from the line of Jayson Bedford with Raymond James. Please go ahead.
Speaker Change: Helpful. Thank you.
Speaker Change: Your next question comes from the line of Jayson Bedford with Raymond James. Please go ahead.
Jayson Bedford: Good afternoon and congratulations on the progress here. Just internationally, you mentioned pockets of strength relative to consensus. International revenue was a bit below where folks were looking for, so is there anything notable to call out? And maybe more specifically, was international impacted more by the supply dynamics? Thanks. Yeah, thanks for the question. You know, I think the pockets of strength alluded to a little bit in the script, it was really more the France and Japan, you know, Japan, obviously coming off of going direct there in France with Dexcom One coverage for Bazel in the region.
Jayson Bedford: Good afternoon, and congratulations on the progress here just internationally you mentioned pockets of strength relative to consensus international revenue was a bit below where folks were looking for so is there anything notable to call out and maybe more specifically was international impacted more by the.
Speaker Change: Supply dynamics. Thanks.
Speaker Change: Yes. Thanks for the question I think the pockets of strength alluded to a little bit in the script. It was really more of the France, and Japan, Japan, obviously coming off of going direct there in France with Dex Com one coverage for basal in the region. So those are the pockets of strengths.
Jayson Bedford: So those are the pockets of strength. You do see some choppiness, quite frankly, in international business. You saw a little bit of it last year, Jayson, as coverage wins come in and come out and I shouldn't say come out, but come in and the timing of when they when they start. There were obviously some coverage wins we expected to take place here in the first quarter. Some of those slide a little bit. Some of them slide forward at times as well. And so what I would say is the underlying volume demand was was was strong, especially in the markets we're in some of the markets where we had some wins were in Dexcom One.
Speaker Change: You do see some choppiness quite frankly, an international business saw a little bit of it last year Jason.
Speaker Change: As coverage wins come in and come out and I shouldn't say come out but come in and the timing of when they when they start there were obviously some coverage wins, we expected to take place here in the first quarter. Some of those slide a little bit some of them slide forward at times as well and so what I would say is the underlying volume demand was strong especially in the.
Speaker Change: Markets were in.
Speaker Change: Some of the markets, where we had some wins where index com, one we mentioned, France being one of those decks com one wins, we do expect wins across the board and the G series and index Com won as we open up new markets over the course of the year, but there will be some choppiness there underlying patient demand underlying unit volume growth still still very very saw.
Jayson Bedford: We mentioned France being one of those Dexcom One wins. We do expect wins across the board in the G-Series and in Dexcom One as we open up new markets over the course of the year. But there will be some choppiness there. Underlying patient demand, underlying unit volume growth still still very, very solid. But we'll have to keep you guys apprised of some of the progress we make on some of the wins to help to help you guys model over the course of the year. But still a solid business, still solid underlying growth. We'll still expect it to be a contributor meaningfully over the course of the year.
Speaker Change: But we'll have to keep you guys apprised of some of the progress we make on some of the wins to help to help you guys model over the course of the year, but still a solid business still solid underlying growth will still expected to be a contributor.
Speaker Change: Meaningfully over the course of the year.
Jayson Bedford: Thank you.
Speaker Change: Thank you.
Travis Steed: Your next question comes from the line of Travis Steed with Bank of America. Please go ahead. Hey, thanks for taking the question.
Travis Steed: Your next question comes from the line of Travis Steed with Bank of America. Please go ahead.
Travis Steed: Hey, Thanks for taking the question and congrats on a good quarter.
Travis Steed: Congrats on a good quarter. I wanted to ask about the 50 basis points of inflation that you kind of built in with supply chain. If that's kind of directly related tariffs and I'm curious about the use of, you know, some exemptions out there, like the Nairobi. And if that's applicable to you and kind of what you've assumed around that going forward. Yeah, so happy to answer that question. You know, I think, first off, we have a large manufacturing presence in the United States. And I think we're really proud of both our manufacturing, our manufacturing in Mesa and all the capabilities we've built here, both in San Diego and Mesa to help.
Travis Steed: I wanted to ask about the 50 basis points of inflation that you've kind of built in with supply chain.
Travis Steed: It's kind of directly related tariffs and I'm curious about the <unk>.
Travis Steed: Use of some.
Travis Steed: Some exemptions out there like that that will be exemption and about it applicable to.
Travis Steed: So you kind of what you've assumed around that going forward.
Travis Steed: Yes, so happy to answer that question you know I think first off we have a large manufacturing presence in the United States and I think we're really proud of both our manufacturing or manufacturing in Mesa and all the capabilities. We built here both in San Diego and Mesa to help so we make a lot of product in the U S and so we have a lesser exposure there to tariffs from that.
Jereme Sylvain: So, you know, we make a lot of product in the US. And so we have a lesser exposure there to tariffs. From that perspective, you know, our industry does have various, our industry has historically had exemptions out there. And so we've certainly leaned into those. And so we don't necessarily expect any material impact from direct tariffs. And I think, I think that's we're comfortable with that position. We are seeing for, you know, raw materials and things that come out of the come out that come into various networks, there are some conversations around pressures there. And certainly, as we look to negotiate prices down in economies of scale, they do come up.
Travis Steed: <unk> our industry does have various yard our industry has historically had exemptions out there and so we've certainly leaned into those and so we don't necessarily expect any material impact from direct tariffs.
Travis Steed: I think that's what we're comfortable with that position, we are seeing for raw materials and things that come out of the come out of that come into various networks. There are some conversations around pressures there and certainly as we look to negotiate prices down and economies of scale. They do come up and so as we looked out over the course of the year and looked at renewing contracts and looked at those.
Jereme Sylvain: And so as we looked out over the course of the year, and looked at renewing contracts, and looked at those indirect impacts, and not necessarily us importing it, but the raw materials that ultimately make up some of the components, we have estimated there could be an impact of around, you know, 20-ish million dollars over the course of the year, it's about 50 bips. That's really what we're alluding to. Our goal is to navigate our way out of there and certainly try to find ways to get around it. Certainly, if there's tariff reform, and ultimately they go away, that'll be helpful on the year.
Travis Steed: Indirect impacts so not necessarily us importing it but the raw materials that ultimately make up some of the components. We have estimated there could be an impact of around 20 ish million dollars over the course, that's about 50 bps. That's really what we're alluding to our goal is to navigate our way out of there and certainly try to find ways to get around it certainly if theres tariff reform.
Travis Steed: And ultimately they go away that'll be helpful on the year, but we thought it was the right answer to keep an eye on that we've seen it come through that we estimate the impact on the year it would not be on our end and product.
Jereme Sylvain: But we thought it was the right answer to keep an eye on that. We've seen it come through. That's what we estimate the impact on the year. It would not be on our end product, Travis, that we have not assumed anything.
Travis that we have not assumed anything from that perspective are superb.
Speaker Change: Super helpful. Thanks, a lot Jeremy.
Matt O'brien: Your next question comes from the line of Matt O'Brien with Piper Sandler. Please go ahead. Afternoon. Thanks for taking the question. Maybe just sticking with the 15-day for a sec. I don't know exactly who this question is for, but just talk a little bit about the rollout of that product as far as integrating into the pumps, etc., and how do we think about, not necessarily this year, but in some of the out years, the contribution on gross margins? Can it be, you know, a couple hundred basis points in a year in terms of gross margin benefit, or will it be more measured than something like that?
Speaker Change: Your next question comes from the line of Matt O'brien with Piper.
Speaker Change: Sandler. Please go ahead.
Matt O'brien: Afternoon. Thanks for taking the question, maybe just sticking with the 15 day for a SEC I don't know exactly who those questions for but.
Speaker Change: And just talk a little bit about the rollout of that product as far as integrating into that you're integrating into the pumps et cetera, how do we think about not necessarily this year, but in some of the out years.
Speaker Change: Contribution on gross margins can it be a couple hundred basis points in a year in terms of gross margin benefit or will it be more measured and something like that.
Jake Leach: Thanks.
Jake Leach: Hey, Matt, this is Jake, happy to happy to take that question. Yeah, we were incredibly excited to receive the approval for 15 day. And we've got the internal teams very focused on getting this product launched. And so we as you mentioned, one of the things we're doing to ready ourselves for launch is working with all of our partners to ensure there's compatibility for the extended 15 day duration with the extra grace period on top of that. So it's really just a process of making sure that all the displays, everything they show in their FAQs, everything is all lined up to be able to support a 15 day.
Speaker Change: Hey, Matt This is Jake happy to happy to take that question. Yes, we were incredibly excited to receive the approval for 15 day than we.
Speaker Change: We've got the internal teams very focused on getting this product launched and so we as you mentioned one of the things we're doing to ready ourselves for launch is working with all of our pump partners to ensure there's compatibility for the extended 15 day duration with the extra grace period on top of that.
Speaker Change: So it's really just a process of making sure that all of the displays everything they show on their aperture as everything is all lined up to be able to support a 15 David.
Jake Leach: That is going well. Our goal is to have compatibility at launch. That's always been our goal. So we're working towards that. We're also working on securing coverage for this product now that it's approved to make sure that it's a seamless transition for folks when they want to upgrade to this 15 day product. It does require a new prescription to get the 15 day. So that does, you know, there's a process that folks go through in terms of utilizing their sensors. They have to see their health care provider, get the prescription, but very excited to get it out there.
Speaker Change: Well our goal is to have compatibility at launch and Thats always been our goal and so we're working towards that and we're also working on securing coverage for this product now that it's approved to make sure that it's a seamless transition for folks when they want.
Speaker Change: I want to upgrade to this 15 day product it does require a new prescription.
Speaker Change: The 15 days so that does.
Speaker Change: A process that folks go through in terms of utilizing their sensors efficacy their health care provider.
Speaker Change: Prescription, but very excited to get it out there.
Jake Leach: And obviously, it does have an impact on margins and improvement there.
Speaker Change: And obviously it does have.
Speaker Change: And impact on margins and improvement there I don't think were going to give much guidance or beyond there are this year, we're really focused on this year, but I know Jeremy is there anything to add yes, I would just say you know, while we're not necessarily giving numbers I think your question is more doesn't snap overnight or is it more measured I think the answer is it's more measured and the reason is as obviously as Jay.
Jereme Sylvain: I don't think we're going to give much guidance for beyond this year. We're really focused on this year. But I don't see anything to add. Yeah, I would just say, you know, while we're not necessarily given numbers, I think your question is more, you know, does it snap overnight or is it more measured? And I think the answer is it's more measured. And the reason is, is obviously, as Jake alluded to new scripts, but, you know, we still have folks on G6, right? It just takes time for folks to get to see their physicians to make the change to get comfortable with it.
Speaker Change: <unk> alluded to new scripts, but we still have folks on <unk> six right. It just takes time for folks to get to see their physicians to make the change to get comfortable with it. So our goal will be to move people move people quickly and we hope to outperform measured but as youre thinking about it I would I would start with measured from a modeling perspective, I think that's the right way to go about it.
Jereme Sylvain: So our goal will be to move people, move people quickly. And we hope to outperform measured. But as you're thinking about it, I would, I would start with measured from a modeling perspective. I think that's the right way to go about it. Thank you.
Unnamed Speaker: Your next question comes from the line. from BTIG, please go ahead. Hi, good afternoon. Thanks for taking the questions and nice to see a very strong quarter. I wanted to ask here about the OPEX control that's being sort of assumed in the guidance, especially with some of the impacts of gross margin, but you're able to hold the operating and EBITDA guides. Just wanted to understand sort of where some of those puts and takes are and how you're able to accomplish that. Thank you.
Speaker Change: Our next question comes from the line of people from <unk>.
Speaker Change: Please go ahead.
Speaker Change: Hi, good afternoon, Thanks for taking my questions and nice to see a very strong quarter.
Speaker Change: I wanted to ask here about the Opex control, that's being sort of assumed in the guidance, especially with some of the impacts gross margin, but youre able to hold the operating and EBITDA guide.
Speaker Change: Guys just wanted to understand sort of where some of those puts and takes are and how you are able to accomplish that thank you.
Unnamed Speaker: Yeah, why don't I'll start with that. And I think Jake, you know, Jake's kind of leading a lot of these. But, you know, so I think when we looked at at the investments we've made, and certainly we put a lot of levers into the business over the years, you know, we've looked at the areas where, where we can continue to invest in things that are really, really important. And we talked about some of the work we're doing around our next generation sensor, and obviously some investment in Stello and the various software features. So we're really focused on advancing those and advancing and expanding our commercial organization.
Speaker Change: Yes.
Speaker Change: I'll start with that and I think Jake Jacobs kind of leading a lot of these but.
Speaker Change: So I think when we looked at the investments we've made and certainly we put a lot of levers into the business over the years, we've looked at the areas where.
Speaker Change: Where we can continue to invest in things that are really really important and we talked about some of the work we're doing around our next generation sensor and obviously some investment in Stello in the various software features so we're really focused on advancing those.
Speaker Change: And advancing and expanding our commercial organization, but remember we've made the investment in our commercial organization last year in expanding the sales force. So now we can lever that we've talked about leaning into AI and levering that and live in robotics and levering that throughout our business, we looked at location strategies and we're leaning into levering that.
Unnamed Speaker: But remember, we've made the investment in our commercial organization last year and expanding the Salesforce. So now we can lever that. We've talked about leaning into AI and levering that and robotics and levering that throughout our business. We've looked at location strategies, and we're leaning into levering that. There's been a lot of things we've done that allow us to have these levers. And so this is a year we can use those levers, but we are still investing in the business. That's the interesting at the end of it, you know, and we look at the total year, if you kind of back into it, you're going to see well over $100 million of investment in OPEX, even with that, so it's still a heavy investment into the business, just pulling all those levers that we've put in place.
Speaker Change: There's been there's been a lot of things we've done that allow us to have these levers and so this is a year. We can use those levers, but we are still investing in the business thats. The interesting at the end of it you know when you look at the total year. If you can kind of back into what you're going to see well over $100 million of investment in opex, even with that so it's still a heavy investment into the business just.
Speaker Change: Pulling all those levers that we've put in place Jake I don't know a lot of these are kind of driven by you and your teams. Yes, certainly I think the main messages, we're just becoming more efficient in many of the things that we do it's been a program that's been focused on.
Jake Leach: Jake, I don't know, a lot of these are kind of driven by you and your teams. Yeah, yeah, certainly. I think, you know, the main message is, is we're just becoming more efficient in many of the things that we do. It's been a program we've been focused on for a number of years. One of the places in particular is our software teams. They're doing incredible work using some of the newer technologies to be able to put out more software with a similar amount of resources while we're still making investments in R&D and our next generation technology.
Speaker Change: For a number of years.
Speaker Change: One of the places in particulars are software teams Theyre doing incredible work.
Speaker Change: Some of the newer technologies.
Speaker Change: To be able to put out more software.
Speaker Change: With a similar amount of resources, while we're still making investments R&D and our next generation technology, we've done a nice job of trying to ensure that we are.
Jake Leach: We've done a nice job of trying to ensure that we're making enough investment there, and we've got that program on track. So I think it's about efficiencies that we've been building over time, and we are able to take advantage of some of those this year.
Speaker Change: We're making enough investment there and we've got that program on track. So I think it's about the efficiencies that we've been building over time, and we are able to take advantage of some of those this year.
Joanne Wuensch: Thank you. Your next question comes from the line of Joanne Wuensch with Citibank. Please go ahead. Good evening, and thank you for taking the question, and nice quarter.
Speaker Change: Thank you.
Speaker Change: Your next question comes from the line of Joanne Wuensch from Citibank. Please go ahead.
Joanne Wuensch: Good evening and thank you for taking my question and nice quarter.
Joanne Wuensch: Let me just pause on the FDA warning letter. It didn't stop you from getting the 15-day sensor approved. I don't anticipate that it'll stop you from getting a hospital label, but is there anything that it does stop you from doing? And how do we think about timing and steps towards resolution? Thanks.
Joanne Wuensch: And maybe just pause on the FDA warning letter.
Joanne Wuensch: It didn't stop you from getting the 15 day sensor approved.
Joanne Wuensch: I don't anticipate that it will stop you from getting a hospital label, but is there anything that it does stop you from doing.
Joanne Wuensch: And how do we think about timing and steps towards resolution.
Jake Leach: Yeah, this is Jake. Great question. So, yeah, so we are basically working to implement a number of process controls. We already did quite a bit after the FDA came in and audited. So, you're absolutely correct. The warning letter doesn't restrict submissions and approvals of new technologies, devices, and, or it doesn't restrict distribution at all. Just basically, there's a number of things we have to continue to work with the FDA to ensure we address all their concerns. So, it's a big focus for us. And so we've, we've got a number of dedicated resources, ensuring that that is done.
Jay: Yes. This is Jay great question.
Joanne Wuensch: So yes, so we are.
Joanne Wuensch: Basically working to implement a number of process controls, we already did quite a bit after the.
Joanne Wuensch: The FDA came in and audited.
Joanne Wuensch: So youre absolutely correct.
Joanne Wuensch: Letter doesn't restrict.
Joanne Wuensch: Submissions and approvals of new technologies devices.
Joanne Wuensch: It doesn't restrict distribution at all it just basically theres a number of things we have to continue to work with the FDA to ensure we address all of their concerns. So it's a big focus for us and so we've got a number of dedicated resources ensuring that that is done.
Jake Leach: But it doesn't restrict us at all. It's hard to speculate on exactly when we'll close it out, but we are making great progress. We give the FDA regular updates on our progress to what we've committed within our responses. And so it'll be a process, but it doesn't restrict us. And the resources that we focused to address the warning letter are not, you know, we've projected our innovation pipeline that's been very important for us. We've, we've used resources to work on some of our other projects to really focus on the warning letter response and the implementation of what needs to happen there.
Joanne Wuensch: But it doesn't restrict us at all and it's hard to speculate on exactly when we will close it out.
Joanne Wuensch: But we are making great progress and we give the FDA regular updates on our progress to what we've committed.
Joanne Wuensch: Within our responses.
Joanne Wuensch: So it will be a process, but it doesn't restrict us in the resources that we focus to address the warning letter.
Joanne Wuensch: Not predicting our innovation pipeline, that's been very important for us.
Joanne Wuensch: We've used research they're working on some of our other projects to really focus on the warning letter response, and the implementation of what needs to happen there.
Michael Polark: Thank you very much. Your next question comes from the line of Michael Polark with Wolf Research. Please go ahead. Good afternoon. Thank you for taking the question. RFK Jr. recently said in an interview that he thinks glucose monitors are extraordinarily effective and only cost $80 a month. So it's a clear positive read from the head of HHS, and there's not many things on the right side of his ledger right now.
Joanne Wuensch: Thank you very much.
Speaker Change: Your next question comes from the line of Michael Polak with Wolfe Research. Please go ahead.
Speaker Change: Hey, good afternoon, and thank you for taking the question RFK Junior recently said in an interview that he thinks glucose monitors are extraordinarily effective and only cost $80. A month. So it's a clear positive read from the head of HHS and Theres not many things on the right side of his ledger right now and so my.
Kevin Sayer: And so my question is, can you remind us on what is the path with Medicare fee-for-service program for broadening the coverage decision to the non-insulin using type 2 population? Does this change in leadership, you know, raise the odds in your view? And I know the RCT is critical for this. as well. Can you remind us on what's kind of timing of disclosure for the Type 2 NIT RCT? Thank you so much.
Speaker Change: Is can you remind us on what is the path with Medicare fee for service program for broadening the coverage decision to the non insulin using type two population does this change in leadership.
Speaker Change: <unk> raised the odds in your view and I know the RCT is critical for this.
Speaker Change: As well can you remind us on what's kind of timing of disclosure for the type two and I T. RCT. Thank you so much.
Kevin Sayer: So I'll take a stab at that one. First of all, we're very pleased with the comments of the administration. It hasn't just been RFK Jr., there have been others who've made comments about CGM being a great tool for health, and we're thrilled with that, because we think it can be, and we are learning more and more every day, even from our seller users, those without diabetes, what they can learn and what they can do to improve their metabolic health and the Type 2 users as well.
Speaker Change: So I'll take a stab at that one first of all we're very pleased with the comments that the administration. It Hasnt just been RFK junior there've been others, who made comments about CGM being a great tool for health and we're thrilled with that because we think it can be and we are learning more and more every day, even from our seller users.
Speaker Change: Those without diabetes, what they can learn and what they can do to improve their metabolic helped in the type two users as well.
Kevin Sayer: With respect to Type 2 approval and CMS approval, we've talked about working with CMS directly and submitting a request for approval for those not on insulin, and we're waiting to hear from them and continuing to gather evidence that would support that. So through normal channels, there would be a CMS approval based on evidence. That takes time, and we go through that.
Speaker Change: With respect to type two approval and CMS approval, and we've talked about working with CMS directly and submitting a request for approval for those not on insulin and we're waiting to hear from them and continuing to gather evidence that would support that so through normal channels. There would be a CMS approval based on the evidence that takes time.
Speaker Change: And we go through that now with this administration.
Kevin Sayer: Now, with this administration. Who knows what will happen time-wise. We'd be thrilled if we got that approval very quickly. We're working every, you know, learning everything we can like everybody else. We think we fit the Make America Healthy agenda very nicely with what our products can do and we'll continue to work and push for that. Yeah, I think we love the recognition that CGM is a tool that can, you know, help people both manage their condition but also reduce healthcare costs. I think you're seeing that recognition certainly from RFK, from others, as well as that third PBM coming on to cover CGM and NIT.
Speaker Change: Who knows what will happen in time wise, we'd be thrilled if we got that approval very quickly.
Speaker Change: We're working every.
Speaker Change: Learning everything we can like everybody else, we think we fit to make America LT agenda very nicely with what our products can do and we will continue to work and push for that yes, I think we love the recognition that CGM is a tool that can.
Speaker Change: You don't help people.
Speaker Change: Both manage their condition, but also reduce healthcare costs I think youre seeing that recognition.
Speaker Change: Certainly from RK from others as well is that third pbms coming on to cover CGM and N I T.
Kevin Sayer: You know, I think that it's evidence that the message is getting out there that CGM is the right tool for this.
Speaker Change: I think that it's.
Speaker Change: Evidence that the message is getting out there that CGM is the right tool for this year.
Speaker Change: Your question around RCT, So we do anticipate.
Kevin Sayer: Your question around RCT, so we do anticipate finishing up the first half of this year and so that the trial is on track and we do expect the initial readout from the trial late this year but probably more likely early next year is when we'll get some of that data. But based on the real-world evidence that we're seeing coming from our users that are using G7 and Stelo, that NIT population, we're seeing great outcomes there and we do expect at the upcoming ADA meeting to see some more data there around outcomes in NIT. So I think the evidence continues to build and so we'll be excited to give you guys that readout when the time comes.
Speaker Change: Finishing up enrollment in the first half of this year.
Speaker Change: And so the trial is on track and we do expect the initial readout from the trial.
Speaker Change: Late this year, but probably more likely early next year.
Speaker Change: When we'll get some of that data, but based on the real world evidence that we're seeing coming from our users that are using <unk> and stello.
<unk> population, we're seeing great outcomes, there and we do expect at the upcoming Ada meeting to see some more data there around outcomes and so I think the evidence continues to build.
Speaker Change: And so we're excited we'll be excited to give you guys that readout.
Speaker Change: <unk>.
Margaret Andrew: Your next question comes from the line of Margaret Andrew with William Blair. Please go ahead. Hey, good afternoon, everyone. Thanks for taking the question. I wanted to follow up on the commentary you guys talked about on non-insulin-using type 2s. You're saying, I think, new customer starts that are higher than ever before. I guess, can you give us a sense of scale here? You know, is it doubling, for example, or can you at least call it material to overall new patient ads in the period? And, you know, it doesn't sound like you're assuming this accelerated pace continues in guidance, given that you're reiterating sales.
Speaker Change: Your next question comes from the line of Margaret Andrew with William Blair. Please go home.
Margaret Andrew: Hey, good afternoon, everyone. Thanks for taking the question I wanted to follow up on the commentary you guys talked about non insulin using type twos, you're saying I think new customer starts that are higher than ever before I guess can you give us a sense of scale here.
Speaker Change: <unk> for example, or can you at least call it material to overall new patient adds in the period.
Speaker Change: Yes, it doesn't sound like you're assuming this accelerated pace continues in guidance given that you're reiterating sales. So I guess, one is that right and two why not are they are outselling factors to that or.
Margaret Andrew: So, I guess, one, is that right?
Margaret Andrew: And, two, you know, why not, you know, are there outsetting factors to that, or, you know, you just, you know, want to keep going?
Speaker Change: You just want to get ahead of yourself.
Jereme Sylvain: Yeah, I can certainly take that one. And what I would say is, you know, historically, and you know, us all, you know, as well as, you know, coverage, you know, coverage was always a big approach about how we went about getting folks access to the product. And, you know, this quarter, we launched, obviously, with both two of the three PBMs with coverage, and I think that really helped. And so when you think about new patient ads, they are starting to become a material portion of those new patient ads. And I think that's what we would expect over time as more and more coverage opens up, knowing full well that this population is a much larger population than any of the coverages that have opened up in the past.
Speaker Change: Yes, I can certainly take that one and what I would say as you know historically.
Speaker Change: As well as coverage.
Speaker Change: Coverage is always a big approach about how we went up went about getting folks access to the product and this quarter.
Speaker Change: We launched obviously with both jukes two of the three pbms with coverage and I think that really helped and so when you think about new patient adds they are starting to become a material portion of those new patient adds.
And I think that's what we would expect over time as more and more coverage opens up knowing full well that this population has a much larger population than any of the coverages that have opened up in the past. So I would expect to continue to see more of that and as we get the third pbms as we mentioned with that coverage coming on in the back half of the year I would expect that as well. So those are all certainly good signals at all.
Jereme Sylvain: So I would expect to continue to see more of that. And as we get the third PBM, as we mentioned, with that coverage coming on in the back half of the year, I would expect that as well. So those are all certainly good signals and all contributed to a record new patient quarter.
Speaker Change: Contributed to our record new patient quarter.
Jereme Sylvain: To your question then on, we're assuming that things go backwards. That's not necessarily the case. I think the answer is, is it's one quarter, and we have guided for a full year. I think the answer is, let's see how things play out over the course of this quarter, and certainly that'll help us give a little bit more color. It doesn't change our bullishness on the business, doesn't change our expectations that we have a very solid year this year, but I think it's too early in the year to start revising upward guidance. We want to make sure we deliver against our promises, and that's what we're doing.
Speaker Change: Your question then.
Speaker Change: We're assuming that things go backward that's not necessarily the case I think the answer is it's one quarter and we have guided for a full year I think the answer is let's see how things play out over the course of this quarter and certainly that will help us give a little bit more color.
Speaker Change: It doesn't change our bullishness on the business doesn't change our expectations that we have a very solid year. This year, but I think it's too early in the year to start revising upward guidance, we want to make sure we deliver against our promises and that's what we're looking to do.
Speaker Change: Yeah.
Michael Kratky: Your next question comes from the line of Mike Kratky with Learink Partners. Please go ahead. Hey everyone, thanks for taking our questions.
Speaker Change: Your next question comes from the line of Matt.
Matt: With Leerink partners. Please go home.
Matt: Hey, everyone. Thanks for taking my questions, maybe just a quick follow up to that last one but alongside the acceleration that youre seeing in that type two non insulin patient population are you seeing anything on the type one side of the world, whether it's market growth and penetration or just your overall market share it might be a little bit different than your exit.
Kevin Sayer: Maybe just a quick follow-up to that last one, but, you know, alongside the acceleration that you're seeing in that type 2 non-influenced patient population, are you seeing anything on the type 1 side of the world, whether it's, you know, market growth and penetration or just your overall market share that might be a little bit different than your expectations coming into the year?
Speaker Change: Patients coming into the year.
Kevin Sayer: This is Kevin, I'll take that. Our market share expectations are exactly where they thought they would be. We do incredibly well in the Type 1 market and we continue to do so. We also continue to add Type 1 patients internationally and in the U.S. every quarter, and we saw nice growth in our Type 1 business this quarter, right along the lines of what we anticipated. So we're doing very well in new patients in Type 1, and as always, our retention and utilization in that population is outstanding. It is an absolutely essential tool for managing Type 1 diabetes.
Speaker Change: This is Kevin I'll take that our market share expectations are exactly where they thought they would be we do incredibly well in the type one market and we continue to do so we also continue to add type one patients internationally and in the U S. Every quarter and we saw nice growth in our type one business this quarter right along the lines, what we anticipated so we're doing very well.
Speaker Change: Patients in type, one and as always our retention utilization in that population is outstanding.
Speaker Change: Is it absolutely essential tool for managing type one diabetes.
Kevin Sayer: Awesome, thanks very much.
Speaker Change: Awesome, Thanks very much.
Matthew Blackman: Your next question comes from the line of Matthew Blackman from Stifel. Please go ahead.
Speaker Change: Your next question comes the line of thank you Brian.
Speaker Change: Please go home.
Jereme Sylvain: Hi, this is Colin on for Matt. I want to take a moment to ask about the Salesforce and in particular, what you're seeing on the ground with Bazel adoption now and in the DME channel, any specific commentary on that opportunity and how penetration is ramping since we got a last update, and also how your share position Sure.
Speaker Change: Hi, This is Colin on for Matt I wanted to take a moment to ask about the sales force and in particular, what you're seeing on the ground with basal adoption now and in the <unk> channel any specific commentary on that opportunity and how penetration is ramping since we got our last update and also how your share position is trending would be really helpful. Thank you.
Jereme Sylvain: Yeah, this is Jereme. You know, I think the Salesforce continues to ramp up and do well. You know, we kind of look back on record new patients. And that's, again, in a first quarter, which typically isn't always our strongest quarter from a new patient's perspective. So it's great to see that in a Q1. And by the way, that's not a record Q1, that's a record for any quarter. And so, you know, that's that's lovely to see. In terms of how we do that, well, you do that by penetrating type 2 non-insulin users. That's certainly the case.
Speaker Change: Sure. Yes. This is Jeremy I think that the Salesforce continues to ramp up and do well.
Speaker Change: Look back on record new patients and that's again in the first quarter, which typically isn't always our strongest quarter from a new patient perspective. So.
Speaker Change: It's great to see that into Q1 and by the way that's not a record Q1, that's a record for any quarter and so that's that's lovely to see.
In terms of how we do that while you do that by penetrating type two non insulin users. That's certainly the case you do it by penetrating basal.
Jereme Sylvain: You do it by penetrating basal. Deeper and deeper. And you do it by continuing to win or historically won in the intensive insulin space. And you've really seen that across the board. And so it was again, it was a really, really good quarter from us from that perspective.
Speaker Change: A deeper and deeper and you do it by continuing to win where we've historically won in the intensive insulin space and you've really seen that across the board.
Speaker Change: And so it was again it was a really really good quarter from us from that perspective in.
Jereme Sylvain: In terms of then channel, you looked at, you know, where we're playing and then how the channels work. You know, I think we had a we talked about where we sat in the DME channel. And first off, I think we'd want to say, you know, thank you to all the DME partners who've done a wonderful job working with us through the course of the quarter. You know, they went through the supply journey with us and worked well with us, and we believe we work well with them. We've talked about our share stabilizing in the fourth quarter, and our expectation is having stable share as we move through the course of 2025.
Speaker Change: In terms of then channel when you looked at you know where were playing and then how the channels work.
Speaker Change: We had a we talked about where we sat in the DIY channel and first off I think we'd want to say thank.
Speaker Change: Thank you to all the <unk> partners who've done a wonderful job working with us through the course of the quarter. They went through the supply journey with us and worked well with us and we believe we work well with them.
Speaker Change: <unk> talked about our share stabilizing in the fourth quarter, our expectation is having stable share as we move through the course of 2025 and Thats exactly where we are we've stabilized that share. We think we're in a good stable position with our <unk> partners. Appreciate their partnership so we're at and we'll work through the rest of the year to see if we can even do better than that but thats, where we sit today. So it's good pre.
Jereme Sylvain: And that's exactly where we are. We've stabilized that share. We think we're in a good, stable position with our DME partners, appreciate their partnership through it, and we'll work for the rest of the year to see if we can even do better than that. But that's where we sit today. So it's good progress. Our Salesforce continues to ramp and continues to do better every quarter. And it's exciting to see.
Speaker Change: <unk>, our Salesforce continues to ramp and continues to do better.
Speaker Change: Every quarter and it's exciting to see.
Speaker Change: Sounds great. Thank you.
Issie Kirby: Your next question comes from the line of Issie Kirby with Redbird and Planting. Please go ahead. Hi guys, thanks so much for taking my question. I just wanted to follow up on the non-insulin using type 2s again and the extent to which you're seeing potentially any of these patients coming from competitive switching versus if they are new to the sensor.
Speaker Change: Your next question comes from the line of Etsy Kirby with Rob Burton Please.
Speaker Change: Please go ahead.
Speaker Change: Hi, guys. Thanks, so much.
Speaker Change: My question I, just wanted to follow up on the non insulin using type Keith again.
Speaker Change: And to which you're seeing potentially any of these patients coming from capacity switching faster.
Speaker Change: Hum.
Jeremy Sylvain: And then just on Stelo, sorry if I missed this, are you giving Stelo revenue again this quarter? And then just on Stelo, how are you sort of capturing potentially now that reimbursements improved for G-series, how are you capturing or encouraging people to upgrade from Stelo to the G7? Yeah, I'll start with that one. With respect to our type 2 non-attentive or non-insulin patients, most of those are new patients and new to DexCom CGM, particularly as we've expanded coverage. And we do have the best coverage amongst the PBMs of any of our competitors out there. We're doing very well getting new ads on those non-insulin users.
Speaker Change: And then just understand that sorry, if I may.
Speaker Change: He is getting.
Speaker Change: Wrapping.
Speaker Change: This quarter.
Speaker Change: Just on <unk> how.
Speaker Change: How are you.
Speaker Change: Capturing potentially now that reimbursement in <unk>. How are you capturing are encouraging people teed up.
Speaker Change: Thank you Keith.
Speaker Change: <unk>.
Speaker Change: Yeah, I'll start with that one with respect our type two non intensive non insulin patients. Most of those are new patients and new to IDEXX com CGM, particularly as we've expanded coverage and we do have the best coverage amongst the pbms.
Speaker Change: Any any of our competitors out there, we're doing very well getting new ads.
Speaker Change: Those non insulin users with respect to a seller revenues Jeremy I'll. Let you go ahead and talk about that guide sure Yeah, and as you think you stand late with us.
Jeremy Sylvain: With respect to Stelo Revenues, Jeremy, I'll let you go ahead and talk about that guide. Sure. Yeah. And Issie, thanks for staying up late with us. Yeah, so I think Stelo, the answer is, we talked about it being 2-3% of growth on the full year, and we are right in line with that. So we're continuing to do well. While we haven't necessarily broken out revenue by quarter, we will give you the growth contributions over the year, and we're tracking right to that 2-3%, so right in line. Great, thanks so much.
Speaker Change: Yes, so I think stello. The answer is as we talked about it being 2% to 3% of growth on the full year and we are right in line with that so we're continuing to do well, while we haven't necessarily broken out revenue by quarter. We will give you the growth contributions over the year and we're tracking right to that 2% to 3% so right in line.
Speaker Change: Great. Thanks, so much.
Bill Plovanic: Your next question comes from the line of Bill Plovanic with Canaccord. Please go ahead. Great, thanks. Good evening. Thanks for taking my question.
Speaker Change: Your next question comes from the line of.
Speaker Change: With Canaccord. Please go ahead.
Speaker Change: Great. Thanks, Good evening, Thanks for taking my question.
Bill Plovanic: Just on the 15 day, as you walk through the contracting for this, you know, you're reimbursed on a per diem, you know, some of the knock has been you're a little more expensive than some of your competitors when it comes to the payers. Is that something that will be adjusted in this 15 day as you're working through those contracts? And if so, you know, so does the price per day come down a little as you kind of do this? How should we think about that? Thank So, as you mentioned, Bill, CGM is reimbursed as a unit, so per day or per quarter per month.
Speaker Change: Just on the 15 day is you walked through the contracting for this you are reimbursed at a per D. Some of the knock has been here a little more expensive than some of your competitors. When it comes to the Payors is that something that will be adjusted in this 15 day as youre working through those contracts.
Speaker Change: So.
Speaker Change: So this is the price per day come down a little as you kind of do this how should we think about that thanks.
Speaker Change: So as you mentioned Bill CGM is reimbursed.
Speaker Change: As a unit or per day or per quarter per month.
Chris Pasquale: So basically, we do anticipate that that reimbursement will remain the same as we launch 15-day, so same revenue for a period of time. Your next question comes from the line of Chris Pasquale with Nefron. Please go ahead. Thanks. Congrats on the quarter. Two quick follow-ups.
Speaker Change: So basically we do anticipate that that reimbursement will remain the same as we launch 15 day. So same same revenue for for a period of time.
Chris Pasquale: Your next question comes from the line of Chris Pasquale.
Speaker Change: Please go home.
Chris Pasquale: Thanks.
Chris Pasquale: I know you don't want to give a stellar revenue number, but I would love it if you could give us an update on where the install base stands today relative to the more than 140,000 users you had mid-January. And then Jereme, could you just go back to the 100 basis point impact you're assuming from increased freight and other things? If channel inventory is already back to normal levels, why that magnitude of impact still in front of you relative to the 75 basis points you took in one case? Yeah, happy to happy to cover that. In terms of Stelo users, you know, I can say there is some information out there that is public.
Speaker Change: That's on the quarter two quick follow ups, just I know you don't want to give any stello revenue number but would love. It if you could give us an update on where the installed base stands today relative to the more than 140000 users you had mid January and then Jeremy could you just go back to the 100 basis point impact you're assuming from increased freight and other things.
Speaker Change: Channel inventory is already back to normal levels why that magnitude of impact still in front of you relative to the 75 basis points you took in <unk>.
Speaker Change: Yes, happy to happy to cover that in terms of Stello users.
Speaker Change: I can say there is some information out there that is public and I think I can point to it as well over 200000 downloads at this point. So we're continuing to make good progress over and adding more and more net new patients every quarter. So I think that should give you. Some some context. It continues to do well, we continue to see more and more folks download it use it and we will be able to give you more and more.
Jereme Sylvain: And I think I can point to it, you know, it's well over 200,000 downloads at this point. So we're continuing to make good progress over and adding more and more net new patients every quarter. So I think that should give you some some context. It continues to do well. We continue to see more and more folks download it, use it. And, you know, we'll be able to give you more and more retention utilization as we get under our belt. We know there's gonna be more intermittent usage. But the good news is, is because they're all on the app, we'll keep tracking those.
Speaker Change: Retention utilization as we get under our belt, we know theres going be more intimate and usage, but the good news is is because they are all on the Apple keep tracking those so there'll be there'll be a point in time, where I think we can maybe ground folks again on users, but well over 200000 download speeds well over 2000 people 200000 times someone's connected stellar so certainly great progress there.
Jereme Sylvain: So there'll be a point in time where I think we can maybe ground folks again on users, but well over 200,000 downloads, which means well over 2000 people, 200,000 times someone's connected Stelo.
Jereme Sylvain: So certainly great progress there in terms of why the freight and happy to answer that one. So, you know, the answer is, is we exited the second, the first quarter getting supply levels down to normal, but we had almost, you know, no inventory on the shelves at that point. And so, you know, as we, as we go through and want to make sure we have enough inventory on the shelves to help impact supply in the channel, we have to do that. And that's obviously a challenge when, you know, every, every, you know, every week, every month, you're looking through and trying to navigate through really, really low inventory levels as orders come in.
Speaker Change: In terms of why the freight and happy to answer that one so.
Speaker Change: The answer is as we exited the second the first quarter getting supply levels down to normal, but we had almost <unk>.
Speaker Change: No inventory on the shelves at that point and so as we as we go through and want to make sure. We have enough inventory on the shelves to help impact supply in the channel we have to do that.
Speaker Change: Obviously, a challenge win ever.
Speaker Change: Every every every week every month youre looking through and trying to navigate through really really low inventory levels as orders come in so our goal is is to have really adds or corporation 90 days of finished goods at at least 60 days of finished goods on the shelf that allows us to navigate through the channel and so we're going to keep expediting freight until we get to that level.
Speaker Change: I think it's really important because that allows us to make sure that as you have pharmacies et cetera may be running out of supply we have enough in there to now help navigate that channel. So youre going to see us continue to do that over the second quarter as we ultimately navigated through and into a similar clip that you saw really in the first quarter as we start to put more and more inventory on.
Jereme Sylvain: So you're going to see us continue to do that over the second quarter as we ultimately navigated through and into a similar clip that you saw really in the first quarter, as we start to put more and more inventory on the shelves, that helps us slow it down. We can't stop, but it helps slow us down. So we talked about in our commentary out of the gate, it'll moderate over the course of the year. So you'll still see it play through the second quarter, likely into the third quarter. Hopefully not, but we're going to have to work real hard to do that.
Speaker Change: Shells that helps to slow it down we can't stop but it helps slow downs, we talked about in our commentary out of the gate it'll moderate over the course of the year. So you'll still see it play through the second quarter likely into the third quarter, hopefully not but we're going to have to work real hard to do that that's why we've included in the guide though those are those are expensive freight so shifts I mean normally what you would do is you might.
Jereme Sylvain: That's why we've included in the guide though.
Jereme Sylvain: Those are, those are expensive freight. So ships, I mean, normally what you would do is you might put it on ocean freight, or you might put it on general commercial carriers.
Speaker Change: Put it on ocean freight or you might put it on general commercial carriers were actually chartering flights specifically, so it's an expensive it's expensive form of freight and that's why it impacts just the way it does on the year.
Jereme Sylvain: We're actually chartering flight specifically. So it's an expensive, it's expensive form of freight. And that's why it impacts us the way it does on the year. Great, thanks.
Speaker Change: Great. Thanks.
Steve Lichtman: Your next question comes from the line of Steve Lichtman with Oppenheimer & Co. Please go ahead. Thank you. Evening, guys. With more pieces in place on the non-insulin front, you mentioned, Kevin, driving awareness. Can you talk about what the forms of that, what that might look like? Is it solely direct-to-patient work? Is it educating PCPs with the expanded sales force? Any color there would be great. It's across the board for us. Certainly, we'll have more direct-to-consumer advertising and more focused on that type 2 population and those non-insulin-using patients to show what they can do with that.
Speaker Change: Your next question comes from the line of Steve Mcmahon.
Speaker Change: Please go home.
Speaker Change: Thank you evening guys.
Speaker Change: With more pieces in place on the <unk>. The non insulin front you mentioned, Kevin driving awareness can you talk about what the forms of that.
Speaker Change: That might look like is it solely direct to patient work is it educating tcp's with the expanded sales force any color there it would be great.
Speaker Change: It's across the board for US certainly will have more direct to consumer advertising and more focused on that type two population and those non insulin using patients to show what they can do with that but there is a great educational effort that really has to go on.
Kevin Sayer: But there's a great educational effort that really has to go on in the physician's office as well. We need to make sure that they know that these patients can get a prescription for a DexCom. I mean, if you go back a few years, if they got a prescription for a DexCom for a non-insulin user and sent them to the drugstore, they were told they could have it for less price. Now, they can go to the drugstore with many of these plans. There's zero co-pay. So, we're creating a much better experience for the physician in addition to the end user.
Speaker Change: In the physician's office as well, we need to make sure that they know that these patients can get a prescription for decks com I mean, if you go back a few years.
Speaker Change: I wrote a prescription for <unk> for non insulin user and send them to the drugstore. They were told they could have it for list price now they can go to the drugstore with with many of these plans are zero copay. So we're creating a much better experience for the physician in addition to the end user.
Kevin Sayer: And we need to educate that because they may have had an experience in the past where it didn't go that well and didn't go the way they wanted to. Those experiences are going much, much better now. And so, it's educational across the board. It's not just one customer. It's all of us.
Speaker Change: And we need to educate that because they may have had an experience in the past where it didn't go that well and didn't go the way. They wanted to those experiences are going much much better now and so it's educational across the board. It's not just one customer it's all of them.
Kevin Sayer: Great. Thanks, Kevin.
Speaker Change: Great. Thanks, Kevin.
Speaker Change: Okay.
Matt Miksic: Your next question comes from the line of Matt Miksic with Barclays. Please go ahead. Thanks so much for taking the question. Not to maybe quote a lot here, but maybe follow up on on Stello last year, I think, ahead of some of the coverage that you talked about earlier in the year. Dexcom G7 is with coverage slotting into some of these non-insulin opportunities so you talk about how the how the think about the two the two products where they, how they overlay and fit together. Yeah, one of the things we're most excited about with Stelo is the opportunity it's presented our sales force, because as they walk into a primary care office now, they have two options to present a position.
Speaker Change: Your next question comes from the line of Matt Mcconnell.
Matt Mcconnell: With Barclays. Please go home.
Matt Mcconnell: Hi, Thanks, so much for taking the question.
Matt Mcconnell: Amount of maybe we covered a lot here, but maybe follow up on.
Matt Mcconnell: Stello.
Matt Mcconnell: Last year I think ahead of some of the coverage that you talked about earlier in the year.
Matt Mcconnell: Maybe it seem to have maybe a slightly different rules slightly different different target potential.
Matt Mcconnell: Okay, maybe and then now it's still important but.
Speaker Change: As you've talked about <unk>.
Speaker Change: <unk> seven is with coverage slotting into some of these non insulin.
Speaker Change: Opportunities. So when you talk about how that has it.
Speaker Change: As you think about the two the two products and.
Speaker Change: Where they have the overlay of fit together thanks, so much.
Speaker Change: Yes, one of the things. We're most excited about with <unk> is the opportunity is presented our salesforce because when they walk into a primary care office now they have two options to present a position. If we don't by chance have coverage for patients now that physician can now offer sellers of that patient and again learn about the glucose behavior and values.
Kevin Sayer: If we don't, by chance, have coverage for a patient now, that physician can now offer Stelo to that patient and again, learn about the glucose behavior and values for that customer. The other thing that we're learning is coverage expands. Utilization and retention and everything are always much better when there's reimbursement rather than paying cash.
Speaker Change: For that customer the other thing that we're learning is covering coverage expands.
Speaker Change: Utilization and retention anything are always much better when there's reimbursement rather than paying cash on one of the other things we have to consider with respect to the solo and <unk> seven.
Jake Leach: One of the other things we have to consider with respect to the Stelo and G7 crossing of the roads, we're probably going to have to move some of the Stelo features into the G7 app. Jake and team are working on that. I'll let you go for a minute, Jake. Go ahead. Yeah, sure. So I think part of that question was around how Stelo started when we first launched it. And over time, at first we were focused on people with type 2 diabetes that didn't have coverage, right, as well as prediabetes. And as we continue to innovate on the product, and as we're building up the pipeline of features that we're going to bring, we are continuing to enhance its capabilities for those with diabetes, but also those that don't have diabetes.
Speaker Change: Crossing of the roads were probably going to have to move some of the sell of features into the G. Seven App and Jacob and team are working on that and I'll. Let you go for a minute Jack Yeah sure. So I think.
Speaker Change: Part of that question was around the house.
Speaker Change: <unk> started.
Speaker Change: When we first launched it and over time first of all we were focused on.
Speaker Change: People with type two diabetes, who didn't have coverage rate as well as pre diabetes.
Speaker Change: And as we've continued to innovate on the product and as we're building up the pipeline of features that we're going to bring.
Speaker Change: We are continuing to enhance its <unk>.
Speaker Change: Capabilities for those with diabetes, but also those that don't have diabetes and we've got our integration with aura that we're very focused on for users and we do anticipate that thats going to bring some more folks to the stellar family that arent don't have diabetes. So we are focused on expanding <unk>.
Jake Leach: We've got our integration with Aura that we're very focused on for users, and we do anticipate that's going to bring some more folks in to the Stelo family that don't have diabetes. So we are focused on expanding Stelo's use cases well beyond diabetes and prediabetes.
Speaker Change: Use cases.
Speaker Change: Well, well beyond diabetes and pre diabetes.
Jake Leach: Thanks for the color.
Speaker Change: Thanks for the color.
Anthony Picconi: Your next question comes from the line of Anthony Picconi with Mizuho Group. Please go ahead. Thanks. Good afternoon. And I'll stick on Stella. A question on the utilization intensity. With a pre-diabetic versus a non-diabetic patient, do you have any data on that? Are you noticing more utilization intensity with pre-diabetics? And then just on channel access, where are most folks getting Stelo today? And when you think about Amazon, how much could that sort of just open the opportunity for Stelo? Thanks.
Speaker Change: Your next question comes from the line of Amit <unk> with Mizuho Group. Please go ahead.
Speaker Change: Thanks, Good afternoon, and I'll stick on <unk> question on the utilization intensity.
Speaker Change: With a pre diabetic versus a non diabetic patients do you have any data on that.
Speaker Change: Are you noticing more utilization intensity with pre diabetics and then just on channel access where most folks getting stellar today and when you think about Amazon.
Speaker Change: How much could that sort of just open the.
Speaker Change: Opportunity for stellar.
Jake Leach: Sure, yeah, happy to answer that question. The way to think about, you know, utilization patterns, at least the way that we've seen it today is, you know, and folks have to, when they opt into using Stelo, it's how you opt in, right? You can choose diabetes, pre-diabetes, I don't have diabetes. The way it works is for those that opt in as they call it type two, they would be the highest utilization, pre-diabetes kind of in the middle, and then I don't have diabetes the lowest. And so as you're trying to think through, you know, which populations adopt, that's the retention slash utilization, I'm sorry, utilization rates you ultimately see.
Speaker Change: Sure Yeah happy to answer that question the way to think about utilization patterns at least the way that we've seen it today is.
Speaker Change: And folks have to when they they opt into using stellar.
Speaker Change: It's how you opt in right you can choose diet diabetes pre diabetes I don't have diabetes.
Speaker Change: The way it works is for those that opt in as they call. It tied to that would be the highest utilization pre diabetes kind of in the middle and then I don't have diabetes, the lowest and so as you're trying to think through which populations adopt that's.
Speaker Change: That's the retention you'd also asked utilization im sorry utilization rates you ultimately see I.
Jake Leach: I think over time, and Jake alluded to a bunch of features going into Stelo that are really targeted really for everybody, but start to really engage the health and wellness population. There's an opportunity to drive that up over time. And so we're really excited, but out of the gate when we launched Stelo, I think we talked about it, and Matt alluded to it a little bit earlier, it really started as a type two product and we're pushing down the acuity curve there. So we'll have more as time moves on, but for right now, that's at least the sequencing in terms of utilization.
Speaker Change: I think over time and Jake alluded to a bunch of features going into Stella that are really targeted really for everybody, but start to really engage the health and wellness population theres an opportunity to drive that up over time, and so we're really excited but out of the gate. When we launched Hello, I think we talked about it and Matt alluded to it a little bit earlier, it really started as a type two product and we're pushing down the acuity.
Therefore, we're putting up pushing down the acuity curve. There. So we'll have more as time moves on but for right now that's at least the sequencing in terms of utilization. That's how I'd think about it from a model perspective in terms of channel. It's still predominantly Stella <unk> Dot com Amazon is relatively new for us, it's really been about a month or so since it's been on Amazon live in and great uptake.
Jake Leach: It's how I think about it from a model perspective.
Jake Leach: In terms of channel, it's still predominantly stelo.com. Amazon's relatively new for us. It's really been about a month or so since it's been on Amazon Live and great uptake. We're really excited to see it. It's gonna be, so at least for the first quarter, it's predominantly stelo.com. The good news though, is obviously Amazon is everywhere, it's ubiquitous. And so as you have folks thinking about product, where do I go? We know that Amazon's going to be a great partner for how we disseminate the product through the population. So couldn't be more excited about how Amazon can help broaden our reach.
Speaker Change: Really excited to see it it's going to be so at least for the first quarter, it's predominantly Stella <unk> dot com.
Speaker Change: The good news, though is obviously Amazon is everywhere, it's ubiquitous and so as you have as you have folks thinking about product how do I get it where do I go we know that Amazon is going to be a great partner for how we can disseminate the product through the population. So couldnt be more excited about how Amazon can help broaden our reach and so I would expect over the balance of the year.
Jake Leach: And so I would expect over the balance of the year, Amazon to become a much larger part of our distribution. And we'll have to give you guys updates as the quarter moves on, as to how it shifts from stelo.com to amazon.com. But as of right now, majority stelo.com and we'll have to give you guys updates on Amazon products.
Speaker Change: Amazon to become a much larger part of our distribution and we'll have to give you guys updates as the quarter moves on us as to how it shifts from Stella <unk> dot com to Amazon Dot com, but as of right now majority of stellar dot com and Marty you guys update on updates on Amazon progress.
Speaker Change: Thanks.
Kevin Sayer: We have no further questions at this time.
Speaker Change: We have no further questions.
Kevin Sayer: I will now turn the call back over to Kevin Sayer for closing. We want to thank everybody for participating today. This is another great quarter for DexCom. The new patient growth and the revenue growth were phenomenal.
Speaker Change: I will now turn the call back over to Kevin Sayer for closing remarks.
Kevin Sayer: We want to thank everybody for participating today. This is another great quarter for <unk> com, the new patient growth and the revenue growth were phenomenal more importantly, there's a lot of people at our company we need to think today because there was a lot of effort on the supply side on our sales side, our trade teams everybody did a great job.
Kevin Sayer: More importantly, there's a lot of people at our company we need to thank today because there was a lot of effort on the supply side, on our sales side, our trade teams. Everybody did a great job. So thanks, everybody, and have a great day.
Speaker Change: Thanks, everybody and have a great day.
Operator: Thank you, ladies and gentlemen.
Speaker Change: Thank you ladies and gentlemen. This concludes today's conference. Thank you for participating you may now disconnect.
Operator: This concludes today's conference. Thank you for participating. You may now disconnect.
Speaker Change: [music].