Q2 2025 DexCom Inc Earnings Call
Abby: Ladies and gentlemen, welcome to the DEXCOM second quarter 2025 earnings release conference call. My name is Abby, and I'll be your conference operator today. 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 a question, please press star one on your touch-tone phone. As a reminder, this conference is being recorded, and I will now turn the call over to Sean Christensen, Vice President of Finance and Investor Relations. Mr. Christensen, you may begin.
Ladies and gentlemen, welcome to the DexCom second quarter 2025 earnings release conference call.
My name is Abby, and I'll be your conference operator today.
At this time, all participants are in listen-only mode. Later, we will conduct a question-and-answer session.
During the question-and-answer session, if you have a question, please press star 1 on your touchtone phone.
As a reminder, this conference is being recorded. I will now turn the call over to Sean Christensen, the Vice President of Finance and Investor Relations. Mr. Christensen, you may begin.
Sean Christensen: Thank you, operator, and welcome to DEXCOM's second quarter 2025 earnings call. Our agenda begins with Kevin Sayer, DEXCOM's Chairman and CEO, who will summarize our recent highlights and ongoing strategic initiatives, followed by a financial review and outlook from Jereme 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. Please note that there are also slides available related to our second quarter 2025 performance on the DEXCOM Investor Relations website on the Events and Presentations page. 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.
Thank you, operator and welcome to dexcom's second quarter 2025 earnings call. Our agenda begins with Kevin Seer dexcom's chairman and CEO who will summarize our recent highlights and ongoing strategic initiatives, followed by a financial review and Outlook from Jeremy sane. Our Chief Financial Officer following our prepared remarks, we will open the call up for your questions. At that time, we asked analysts to limit themselves to 1 question each so we can provide an opportunity for everyone participating today, please note that there are also slides available related to our second quarter 2025 performance on the Dexcom investor relations.
Website on the events and presentations page with that, let's review our Safe Harbor statement.
Sean Christensen: 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. 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.
Sean Christensen: 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. Please refer to the tables in our earnings release and the slides accompanying our second quarter earnings call for reconciliation of these measures to their most directly comparable GAAP financial measure. Now, I will turn it over to Kevin.
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. These 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. 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.
Kevin Sayer: Thank you, Sean, and thank you, everyone, for joining us. Today, we reported second quarter organic revenue growth of 15% compared to the second quarter of 2024. We continue to see strong category growth, focused execution by our team, and a growing contribution from our recent access wins. In the US, our new customer demand and volume growth remain consistent with the high levels we experienced during the first quarter. With a year now under our belt since expanding our sales force, our commercial team is operating at a very high level. Our expanded reach has helped us build relationships with a wide array of physicians, grow our market share, and more quickly educate the market on the evolving coverage landscape. This has been particularly important as coverage continues to build. In fact, as of this month, our Type 2 non-insulin reimbursement went live with a third major PBM.
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. Please refer to the tables in our earnings release and the slides accompanying. Our second quarter earnings call for a Reconciliation of these measures to their most directly comparable, gaap Financial measure. Now, I will turn it over to Kevin
Kevin Sayer: With this coverage in place, we now have reimbursement established for anyone with diabetes on the national formularies of the three largest commercial PBMs in the US. As previously stated, this will provide us with coverage for nearly 6 million Type 2 non-insulin lives this year. But we're not stopping there. This is only a first step as we work to build coverage for this entire 25 million person population in the US. Given our growing body of health outcomes evidence, as well as DEXCOM CGM's proven ability to save costs for the healthcare system, we believe this is only a matter of time. Importantly, clinicians are quickly recognizing the potential to deliver better Type 2 care. Many experienced providers have wanted to integrate DEXCOM CGM earlier into care plans, and this new coverage has greatly improved their ability to do so.
Thank you, Sean. And thank you everyone for joining us today. We reported second quarter organic Revenue growth of 15% compared to the second quarter of 2024. We continue to see strong category growth focused execution, by our team, and a growing contribution from our recent access wins in the US, our new customer demand and volume growth remain consistent with the high levels. We experienced during the first quarter with a year now, under our belt, since expanding our sales force, our commercial team is operating at a very high level. Our expanded reach has helped us build relationships with a wider abrasive positions grow, our market share and more quickly. Educate the market on the evolving coverage landscape. This has been particularly important as coverage continues to build. In fact, as of this month, our type 29 insulin reimbursement, went live with a third major PBM with this coverage in place. We now have reimbursement established for anyone with diabetes. On the national formulas of the 3 largest commercial pbms in the US.
As previously stated, this will provide us with coverage for nearly 6 million type 2 non-insulin lives this year, but we're not stopping there. This is only a first step as we work to build coverage for this entire 25 million person population, in the US, given our growing body of Health outcomes evidence, as well as Dexcom cgm's, proven ability to save cost for the Health Care System. We believe this is only a matter of time. Importantly clinicians are quickly, recognizing the potential to deliver, better type 2 care.
Kevin Sayer: As a result, during the second quarter, we again saw strong growth from the Type 2 non-insulin population, which helped us take share in this quickly growing part of the market. With more opportunity than we've ever had, we're building on this momentum with new access wins, more personalized software, and by leveraging our differentiated product portfolio to deliver for our communities. Along those lines, interest in Stello, our over-the-counter glucose biosensor, also continued to grow during the second quarter. In fact, as of this summer, the Stello app has been downloaded more than 400,000 times. This reflects both the improving brand awareness for Stello, particularly as more customers share their early success stories, as well as the broader consumer movement toward health wearables and personalized metabolic health management.
Kevin Sayer: Physicians are also more broadly leveraging Stello across their practices as they now have a simple and easily accessible DEXCOM biosensor available for any patient that doesn't have coverage. While we are less than a year into Stello's launch, we've already greatly enhanced the customer experience with new software features, broader distribution, and digital health partnerships, steadily increasing the value of our features and providing more choice in how and where they engage with their glucose data. These connections will also enable us to expand the range of health and activity data available in the Stello app experience. For example, our integration with Aura is now live, which allows customers to integrate DEXCOM glucose data with vital signs, sleep, stress, heart health, and activity data provided by the Aura ring.
Portfolio to deliver for our communities along those lines, interest in Stella are over-the-counter glucose biosensor. Also continue to grow during the second quarter. In fact, as of this summer, the Stella app has been downloaded more than 400,000 times. This reflects both the approving brand awareness for Stella particularly as more customers share their early success stories as well as the broader consumer movement toward health, wearables and personalized. Metabolic Health management positions are also more broadly leveraging, Stellar across their practices as they now have a simple and easily accessible. Dexcom bio sensor. Available for any patient that doesn't have coverage, while we are less than a year. Into sales launch. We've already greatly enhanced. The customer experience with new software features, broader distribution and digital Health Partnerships steadily, increasing the value of our features and providing more choice and how and where they engage with their glucose data. These connections will also enable us to expand the range of health and activity data of
Kevin Sayer: This broader dataset can help us deliver more personalized and well-rounded insights over time, particularly as we continue to expand our generative AI capabilities within the app. Similarly, we recently introduced a new feature across both Stello and G7 that leverages AI to greatly simplify the process of meal logging for our customers. With the launch of our smart food logging feature, our apps can now generate a detailed meal description based on a photo and then analyze the post-meal glycemic impact for our customers. Additionally, users can now search for previous meals through the history tab, which can help support healthier decisions in the future, as well as interaction with their care providers. On the hardware side, we're very excited for the upcoming launch of our 15-day G7 system. With FDA clearance now secured, we're working through the standard reimbursement contracting process in advance of launch.
Available in this fellow app experience. For example, our integration with aura is now live, which allows customers to integrate Dexcom glucose data with Vital Signs, sleep stress, heart, health and activity data, provided by the aura ring.
This broader data set can help us deliver more personalized and well-rounded insights over time. Particularly as we continue to expand our generative AI capabilities within the app.
Similarly, we recently introduced a new feature across both Stella and G7 that leverages AI to greatly simplify the process of meal logging for our customers. With the launch of our Smart Food logging feature, our apps can now generate a detailed meal description based on a photo, along with the post-meal glycemic impact for our customers. Additionally, users can now search for previous meals through the history tab, which can help support healthier decisions in the future, as well as interactions with their care providers.
Kevin Sayer: These discussions are progressing as planned, leaving us right on track to start the launch in the second half of the year. We continue to balance a focus of long-term platform innovation like our 15-day G7 and our G8 development, while simultaneously embracing the mindset of rapid software development like a consumer technology company. Along those lines, we've already introduced 17 app updates across our Stello, G Series, and DEXCOM OnePlus core products in the first half of 2025. These updates address real needs for our users and their caregivers, things that take complex diabetes and metabolic health management and simplify the experience for the good of our customers. We already mentioned the simplicity of AI food logging. We've also enabled our share and follow system to work for our customers using direct-to-watch connectivity.
On the hardware side, we're very excited for the upcoming launch of our 15-day G7 system, with FDA clearance now secured. We're working through the standard reimbursement contracting process in advance of the launch. These discussions are progressing as planned, leaving us right on track to start the launch in the second half of the year.
We continue to balance a focus on long-term platform innovation, like our 15-day G7 and our Jade development, while simultaneously embracing the mindset of rapid software development, like a consumer technology company. Along those lines, we've already introduced 17 app updates across our Stella G, Series, and Dexcom 1, plus core products in the first half of 2025.
These updates address real needs for our users and their caregivers—things that take complex diabetes and metabolic health management and simplify the experience for the good of our customers.
Kevin Sayer: As a real-world example of how this can benefit our customers, I recently met the parents of a competitive swimmer while traveling. They were thrilled with this new functionality as it allowed them to track their son's glucose during swim competitions, even if he does not have a phone nearby. We've enhanced the data visualization for our customers while giving them greater ability to customize their experience with adjustable target ranges. We've brought to market connected pen technologies for our customers using insulin pens, allowing them to automatically log doses without the hassle of tracking them manually. We also know how much our customers rely on their DEXCOM sensors to manage their health and the challenge that any disruption to their supply represents. This is one of the reasons why we have prioritized resources so heavily this year to maintain continuity for our customers.
Kevin Sayer: We've also recently rolled out a nationwide warranty program for our pharmacy customers, allowing them to access replacement sensors as early as the same day. One of the core values that we embrace is summed up in the simple word, listen. With the type of enhancements like I just reviewed, we are taking the direct feedback from our customers and driving innovative solutions that address their core needs. Essentially, we continue to bring greater value to our products every month, and are thankful for the sincere loyalty that this has driven amongst our customer base. As we've mentioned before, our definition of customer goes beyond just the end user. It includes caregivers, channel partners, payers, and certainly the healthcare practitioners that rely upon DEXCOM CGM.
We already mentioned the simplicity of AI food logging. We've also enabled our share and follow system to work for our customers using direct-to-watch connectivity as a real-world example of how this can benefit our customers. We recently met the parents of a competitive swimmer while traveling; they were thrilled with this new functionality, as it allowed them to track their son's glucose during swim competitions, even if he does not have a phone nearby. We've enhanced the data visualization for our customers while giving them greater ability to customize their experience with adjustable target ranges. We brought to market connected pen technologies for our customers using insulin pens, allowing them to automatically log doses without the hassle of tracking them manually. We also know how much our customers rely on their Dexcom sensors to manage their health and the challenge that any disruption to their supply represents. This is one of the reasons why we have prioritized resources so heavily this year to maintain continuity for our customers. We've also recently rolled out a nationwide warranty program for our pharmacy.
Customers are allowed to access replacement sensors as early as the same day.
One of the core values that we embrace is summed up in the simple word: listen.
With the type of enhancements. Like I just reviewed we are taking the direct feedback from our customers and driving innovative solutions that address their car needs. Essentially we continue to bring greater value to our products every month on our thankful for the sincere loyalty that this is driven amongst our customer base.
Kevin Sayer: Along those lines, we have seen significant momentum and excitement since we became the first CGM company to offer a direct, no-cost integration into Epic EHR last year. At this point, we already have more than 100 health systems either integrated or in the process of onboarding to enable DEXCOM CGM data to flow directly into their customer health records. As many of you recall, we exited the first quarter with our inventory levels in a tighter position than we typically would like and set a clear focus on continuing to support our overall customer demand while rebuilding our finished goods inventory. I'm proud of the seamless customer support provided by our manufacturing logistics teams during the second quarter. To accomplish this, we delivered multiple months of record production across our facilities and invested strategically in expedited shipping routes.
As we've mentioned before, our definition of customer goes beyond just the end user. It includes caregivers, channel partners, payers, and certainly the healthcare practitioners that rely upon Dexcom CGM. Along those lines, we have seen significant momentum and excitement since we became the first CGM company to offer a direct no-cost integration into Epic EHR. Last year at this point, we already had more than 100 health systems either integrated or in the process of onboarding to enable Dexcom CGM data to flow directly into their customers' health records.
Kevin Sayer: This helped us to successfully restore inventory levels with key channel partners and allowed us to start rebuilding our own stock of finished goods internally. As a result, our supply dynamics today are in a much better position than they were even 90 days ago. Finally, we were thrilled to showcase our latest collection of clinical evidence at the American Diabetes Association's 85th Scientific Sessions last month. This year, we presented or supported nearly 40 studies during the event, with the majority of these exploring earlier stages of metabolic health management and areas where market access remains more limited today. This included the readout of two randomized control trials, which studied DEXCOM CGM usage for gestational diabetes and Type 2 non-insulin care. Each of these presented very compelling outcomes, which we expect to further bolster the case for broader access and adoption.
Then we typically would like. And so to clear focus on continuing to support our overall customer demand while rebuilding our finished goods inventory, I'm proud of the seamless customer support provided by our manufacturing logistics teams during the second quarter to accomplish this. We delivered multiple months of record production across our facilities and invested strategically in expedited shipping routes. This helped us to successfully restore inventory levels with key channel partners and allowed us to start building our own stock of finished goods internally as a result. Our supply dynamics are in a much better position than they were even 90 days ago.
Kevin Sayer: The momentum behind CGM for the Type 2 non-insulin population was abundantly clear during the weekend, building on the update to the ADA standard of care that we saw at the end of 2024. Across the session, we heard more KOLs advocating for CGM to become the standard of care in this population. To further support this movement, our own Type 2 non-insulin RCT remains on track to read out early next year. Our team also presented data looking at the next frontier of glucose biosensing. This included studies outside of diabetes, such as chronic kidney disease, where the data showed a significant reduction in disease progression over a three-year period for those using DEXCOM CGM. As always, I left this year's conference as excited as ever about the future of our company and the potential we have to serve a much larger population over time.
Finally, we were thrilled to showcase our latest collection of clinical evidence at the American Diabetes Association's 85th Scientific Sessions last month. This year, we presented or supported nearly 40 studies during the event, with the majority of these exploring earlier stages of metabolic health management and areas where market access remains more limited today. This included the readout of two randomized controlled trials, which studied Dexcom CGM usage for gestational diabetes and type 2 non-insulin care. Each of these presented very compelling outcomes. Would we expect to further bolster the case for broader access and adoption?
The momentum behind CGM for the type 2 onions on population was abundantly clear during the weekend building on the update to the Ada standard of care that we saw. At the end of 2024 across the session, we heard more kol's advocating for CGM to become the standard of care in this population.
To further support this movement, our own type 2 non-inflammatory. CT remains on track to read out early next year our team also presented data looking at the next Frontier of glucose biosensing. This included studies outside of diabetes such as chronic kidney disease or the data. Showed a significant reduction in disease progression over a 3 year period, for those using Dexcom CGM.
Kevin Sayer: With that, I'll turn it over to Jeremy.
Sean Christensen: 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. For the second quarter of 2025, we reported worldwide revenue of $1.16 billion compared to $1 billion for the second quarter of 2024, representing growth of 15% on both a reported basis and 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. US revenue totaled $841 million for the second quarter compared to $732 million for the second quarter of 2024, representing an increase of 15%.
As always, I left those shear conferences excited as ever about the future of our company. The potential we have to serve a much larger population over time 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. For the second quarter of 2025, we reported worldwide revenue of $1.16 billion compared to $1 billion for the second quarter of 2024, representing growth of 15% on both a reported basis and 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.
Sean Christensen: As Kevin mentioned, we had a strong quarter in the US as we benefited from our recently expanded Type 2 access and growing presence within the primary care channel. This helped us deliver new customer starts that were right in line with the record levels that we experienced in Q1. International revenue grew 16%, totaling $316 million in the second quarter. International organic revenue growth was 14% for the second quarter. We experienced an acceleration in growth across our international markets in Q2, with particular strength coming from our DEXCOM OnePlus platform. Several of our key Type 2 coverage wins recently have been for DEXCOM OnePlus, and we've started to see a growing contribution from this expanded access. We expect this will remain a nice source of continued growth for us as Type 2 coverage continues to expand globally.
U.S. revenue totaled $841 million for the second quarter, compared to $732 million for the second quarter of 2024, representing an increase of 15%.
As Kevin mentioned, we had a strong quarter in the us as we benefited from our recently expanded type 2 access and growing presence within the primary care Channel. This helped us deliver new customer starts that were right in line with the record levels that we experienced in q1.
In International Revenue, grew 16% totaling 316 million in the second quarter, International organic Revenue. Growth was 14% for the second quarter. We experienced an acceleration in growth, our International markets in Q2 with particular strength coming from our Dexcom 1 plus platform.
Sean Christensen: Along those lines, we were recently excited to announce coverage for anyone on insulin with the Ontario Drug Benefit Program in Canada. This represents a significant expansion for us in the largest Canadian province, as our public coverage was previously very limited in this region. In addition, the coverage expansion includes all insulin, continuing the momentum that we are seeing in international markets for broader Type 2 coverage. We view this as another nice example of the growing recognition globally of DEXCOM's ability to deliver improved outcomes for anyone with diabetes. Our second quarter gross profit was $695.9 million, or 60.1% of revenue, compared to 63.5% of revenue in the second quarter of 2024. During the second quarter, we again invested in expedited shipping routes to ensure consistent customer supply while we stabilized our supply chain.
Along those lines. We were recently excited to announce coverage for anyone on insulin with the Ontario drug benefit program in Canada. This represents a significant expansion for us in the largest Canadian province as our public coverage was previously, very limited in this region. In addition, the coverage expansion includes all insulin continuing the momentum that we are seeing in international markets for broader type 2 coverage. We view this as another nice example of the growing.
Recognition globally of dexcom's ability to deliver improved outcomes for anyone with diabetes.
Our second quarter, gross profit was 695.9 million or 60.1% of Revenue compared to 63.5% of Revenue in the second quarter of 2024.
Sean Christensen: This helped us keep our key distribution partners with sufficient supply during the quarter and allowed us to start refilling our own finished goods inventory. This includes more educational samples available in the field, which were limited in the second quarter. These samples often play a critical role to enable clinicians and people with diabetes to have an introductory experience with DEXCOM CGM. We still have some work to do to be at the preferred inventory levels that give us greater flexibility in our operations, but the rebuild is moving forward as we planned. I'm very proud of our continued progress, which will help us return to more targeted inventory levels and efficient shipping options throughout the year. Operating expenses were $474.1 million for Q2 of 2025, compared to $442.7 million in Q2 of 2024.
People with diabetes to have an introductory experience with Dexcom CGM.
We still have some work to do to be at the preferred inventory levels that give us greater flexibility in our operations, but the rebuild is moving forward as we planned.
I'm very proud of our continued progress, which will help us return to more targeted inventory levels and efficient shipping options throughout the year.
Sean Christensen: Operating income was $221.8 million, or 19.2% of revenue in the second quarter of 2025, compared to $195.4 million, or 19.5% of revenue in the same quarter of 2024. Adjusted EBITDA was $327.6 million, or 28.3% of revenue for the second quarter, compared to $283.9 million, or 28.3% of revenue for the second quarter of 2024. Net income for the second quarter was $192.8 million, or 48 cents per share. We remain in a great financial position, closing the quarter with approximately $2.9 billion of cash and cash equivalents. This cash level, along with our growing free cash flow profile, provides us with a lot of financial flexibility in our capital allocation decisions. We're currently watching the macroeconomic and capital market environments closely as we finalize plans to address our 2025 convertible notes, along with any other strategic uses of capital.
Operating expenses were 474.1 million for Q2 of 2025 compared to 4447 million in Q2 of 2024.
Operating income was 221.8 million or 19.2% of Revenue. In the second quarter of 2025 compared to 195.49% of Revenue in the same quarter of 2024
Adjusted ibida was 327.6 million or 28.3% of revenue. For the second quarter, compared to 283.9 million or 28.3% of revenue. For the second quarter of 2024,
net income for the second quarter was 192.8 million or 48 cents per share.
We remain in a great financial position closing the quarter with approximately 2.9 billion of cash and cash equivalents this cache level along with our growing free cash flow. Profile provides us with a lot of financial flexibility in our Capital allocation decisions.
Sean Christensen: Turning to guidance, we are raising our revenue guidance to a range of $4.6 billion to $4.625 billion, representing growth of 14% to 15% for the year. For margins, we are reaffirming our 2025 guidance of non-GAAP gross profit margin of approximately 62%, non-GAAP operating margin of approximately 21%, and adjusted EBITDA margin of approximately 30%. With that, I'm going to pass the call back to Kevin. Kevin?
We're currently watching the macroeconomic and Capital Market environments closely as we finalize plans, to address our 2025 convertible notes. Along with any other strategic uses of capital,
Turning to guidance.
We are raising our Revenue guidance to arrange of 4.6 billion to 4.625 billion representing growth of 14 to 15% for the year.
For margins. We are reaffirming our 2025 guidance of non-gaap gross profit margin of approximately. 62% non-gaap operating margin of approximately 21% and adjusted ibida margin of approximately 30%.
Kevin Sayer: As many of you saw in the press release today, I also want to take the opportunity to formally announce our succession plan, as I will hand over my CEO responsibilities to Jake Leach at the beginning of 2026. We had taken an initial step in this process with the announcement of Jake's promotion to President in May, and the board and I are convinced that now is the right time to provide clarity on the next step for DEXCOM. I am confident that the company is in a great position, with the right leadership team in place to not only continue the significant momentum that we carry right now, but to capitalize on the massive future opportunity ahead for DEXCOM by advancing access and executing on our exciting product portfolio. And there is nobody that I trust more than Jake to lead the company into the future.
with that, I'm going to pass the call back to Kevin Kevin
Kevin Sayer: As we transition to Q&A, I'll hand it over to Jake for a few words. Jake?
As many of you saw in the press release today, I also want to take the opportunity to formally announce our succession plan, as I will hand over my co responsibilities to Jake leech, at the beginning of 2026. We had taken an initial step in this process with the announcement of Jake's promotions at president, in May and the board. And I are convinced that now is the right time to provide Clarity on the next step, for Dexcom. I am confident that the company is in a great position with the right leadership team in place to not only continue the significant momentum that we carry right now but to capitalize on the mass of future opportunity, head for Dexcom by advancing access and executing on our exciting product portfolio and there is nobody that I trust more than Jade to lead the company into the future as we transition to Q&A. I
Sean Christensen: Thanks, Kevin, and hello, everyone. I'll keep my comments fairly brief at this point. I've been at DEXCOM since we launched our very first product, and I know the impact that we've had on the lives of our customers, and I'm proud of that impact. And yet, when I look to the future potential for DEXCOM, I can honestly say that I believe this company is just getting started. We have an incredible team, and I'm excited to lead the next phases of our journey to both expand access to our technology and to innovate across our portfolio of products to drive better health outcomes for our customers. I look forward to continuing to work closely with Kevin throughout this transition and also more closely with all of you as we move forward. With that, Sean, let's open it up for Q&A. Thank you, Jake.
Send it over to Jake for a few words, Jake.
Thanks, Kevin and hello everyone. I'll keep my comments fairly brief at this point. I've been a Dexcom since we launched our very first product and I know the impact that we've had on the lives of her customers and I'm proud of that impact. And yet, when I look to the Future potential for Dexcom, I can honestly say that I believe this company is just getting started. We have an incredible team and I'm excited to lead the next phases of our journey to both expand access to our technology and to innovate our portfolio of products to drive better health outcomes for our customers. I look forward to continuing to work closely with Kevin throughout this transition and also more closely with all of you as we move forward.
With that Sean. Let's open it up for Q&A.
Sean Christensen: 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. Operator, please provide the Q&A instructions.
Thank you, Jake as a reminder, we ask our audience to limit themselves to only 1 question at this time and then re-enter the queue if necessary operator, please provide the Q&A instructions.
Abby: Thank you. If you have a question, please press star one on your touch-tone phone. If you wish to be removed from the queue, press star one a second time. If you are using a speaker phone, you may need to pick up the handset first before pressing the numbers. Once again, if you have a question, press star one to join the queue. And our first question comes from the line of Travis Steed with Bank of America. Your line is open.
Q press star 1 a second time.
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, press star 1 to join the queue.
Jereme Sylvain: Hi, thanks for the question. I guess first, Kevin, congrats on a long, successful career. And I wanted to ask.
And our first question comes from the line of Travis Steed with Bank of America. Your line is open.
Abby: Thank you.
Jereme Sylvain: I'll ask, we'll miss you on these calls. And I ask about the ability to already raise the guidance in the full year. And it was a very strong quarter, but what you're kind of seeing on new starts and the non-insulin opportunity and kind of the confidence at this stage in the year to be able to raise the full-year revenue guidance, I'd just love to get more color on that.
Hi. Thanks for the question. I got the first, uh, Kevin uh, congrats on a long successful career. Um, and I wanted to ask, I'll ask, we'll miss you on these calls. Um, and I asked about the the ability to all already raise the guidance and the full year and there's a a very strong quarter but what you're kind of seeing on new starts and the non-insulin opportunity and and kind of the confidence at this stage in the year to be able to raise the full year Revenue guidance. I just love to get more caller on that.
Jake Leach: Hey, Travis, thank you. This is Jeremy. Happy to certainly cover that. You know, we saw, we continue to see, especially, you know, kind of hearkening back to when we started the year, you know, talking about the three PBMs, the three major PBMs covering non-insulin users. And what we've seen is we've seen some really solid starts in that space. We've always talked about this being an opportunity for us. And when you have both coverage with what we believe is the best product on the market, combined with the opportunity with Stello, which also covers a lot of folks in that space. And as folks are kind of moving through their journey, you know, you put that in the hands of our sales team, and they've done really wonderful work with it.
Jake Leach: So we've seen that take place over the course of the first quarter and into the second quarter. We know our third PBM is coming online here in, you know, the third quarter, and so that's online now. You know, it gave us the confidence with the performance in the first half of the year to give a little bit of an increase there for the full year on the guide, recognizing, of course, you know, we want to make sure that we provide, you know, we commit, I guess, we provide, you know, opportunities to meet our commitments that we started off over the course of the year, but knowing full well that the year has gone well thus far. So it gave us that confidence.
Um you know, talking about the 3 PBI, you know, opportunities to meet our commitments that we started off over the course of the year but knowing full.
Jake Leach: And as we get into the back half of the year, we're excited and really beyond, we're excited for all these opportunities and what they present, as Kevin alluded to, and some of the access wins we're seeing open up for us.
Well that the year has gone. Well thus far so we gave us that confidence and you know as we get into the back half of the Year we're excited and really Beyond, we're excited for all these opportunities and what they present is Kevin alluded to in some of the access wins, we're seeing open up for us.
Abby: And our next question comes from the line of Larry Beagleson with Wells Fargo. Your line is open.
And our next question comes from the line of Larry Biegelsen with Wells Fargo. Your line is open.
Speaker 8: Good afternoon. Thanks for taking the question. And Kevin, congratulations on all your success at DEXCOM, and Jake, congratulations on the promotion. I guess I feel compelled, Kevin, to ask you about the CMS competitive bidding for CGM and PUMS. So maybe can you frame the exposure to Medicare and the potential risk to DEXCOM? And you know, if finalized as proposed, how might that impact, you know, your price in that channel? And lastly, when do you expect it to start? Is 2027 the earliest? Thank you.
Uh, good afternoon. Thanks for taking the question and and, uh, Kevin congratulations on all your success at Dexcom and and Jake, uh, congratulations on the promotion.
I guess I I feel compelled Kevin to ask you about the CMS competitive bidding, uh, for CGM and pumps. So maybe can you frame the exposure, uh, to Medicare? And and the potential risk uh, to Dexcom. And, you know, if finalized as proposed how how might that impact, you know your price in that channel. Um and lastly when do you expect it to start is is 2027 the earliest. Thank you.
Kevin Sayer: You know, Larry, this is all very early. I'm going to pass it over to Jake.
Jake Leach: Sure.
Kevin Sayer: Let him do that.
Jake Leach: Yeah, thanks, thanks, Larry, for the question. Obviously, we're staying close to the CMS basically proposal for competitive bidding. We've been studying it, and you know, at this point in time, as we work through it, it's just a proposal. And we are looking at basically, it's about 15% of our business's fee for service Medicare. So if you just kind of think of that, that's the group that we're talking about. And if you look at, you know, distributor pricing and what's going on in the channels, I think we feel very comfortable about the value that we bring for the price of our product. You think about the outcomes and the dollars saved. So this is going to be a process where there's going to be a response first.
You know, Larry, this is all very early, uh, I'm going to pass it over to Jake. Sure, let him do that. Yeah, thanks, thanks. Larry for the question. Um, obviously, we're staying close to, um, the CMS, um, basically proposal, uh, for competitive bidding. Um, we've been studying it and, um, you know, at this point in time, as we work through it is, it's just a proposal. Um, and we are looking at, um, basically it's about 15% of our business is fee for service Medicare. So if you just kind of think of that, that's the group, uh, that we're talking about. Um, and if you look at, you know, distributor pricing, um, and what's going on in the channels? Um, I think we feel very comfortable about the value that we bring, um, for, um, the price of our product.
Jake Leach: I think there's some, you know, unique things in this particular version of the competitive bidding that we need to make sure it's clear kind of what the impacts are going to be. I think the number one thing that we want to ensure is that there's not interruptions to Medicare beneficiaries as we go through this process. That has happened in previous versions of competitive bidding. So I think that's our number one focus to make sure customers can get the products they need. Yeah, and then just, you know, Larry, to your question on when it kicks in and all that, you know, it's early on. So I think we'll get more clarity as to when the competitive bidding process starts. Historically, if it was to start right away, the earliest we'd likely see it is 2027. And so that's the earliest you'd likely see it.
Think about the outcomes and the the dollars saved. Um so this is going to be a a process um where there's going to be a response first. Um, I think there's some you know you know unique things in this particular version of the competitive bidding that we need to make sure it's clear, kind of what the impacts are going to be. I think the number 1 thing that we're want to ensure is that there's not Interruption to Medicare beneficiaries. Um, as you go through this process that has happened in previous versions of competitive bidding. So I think that's our number 1 Focus, to make sure customers uh can get the products they need.
Jake Leach: Of course, that's based on historical precedence. And, you know, to your question, you know, in terms of pricing, it's, again, it's too early to go there. The one thing I would say is, you know, if there is some sort of pricing compression, there's also going to be supplier compression. And so I think the one thing that's important as we're thinking through this is, you know, we'll see what the appropriate value is and how that plays out. But I know we're also going to see a lot more volume concentrated in suppliers. So if it plays out as it's currently written. So let's walk through it. We'll be vocal with you throughout the process. We're obviously staying incredibly close to it.
Jake Leach: And as you can see, Kevin, Jake, myself, and really our entire team, we're all spending a lot of time with this and making sure that if it's introduced, it's introduced in a way that's beneficial for really our patients and those that use our product.
Yeah, and then just, you know, Larry to your question on when it kicks in and and all, you know, it's early on. So I think we'll get more clarity as to when the competitive bidding process starts. Historically, if it was to start right away, the earliest would likely see, it is 2027. Um, and so that's the earliest you'd like to see it, of course. Um, that's based on historical precedents and, you know, to your question, you know, in terms of pricing, it's against too early to to go there. The 1 thing I would say is, you know, if there is some sort of pricing compression, there's also going to be supplier compression. And so, I think the 1 thing that's important as we're thinking through this is, you know, we'll, we'll see what the appropriate value is, and how that plays out, but I know we're also going to see a lot more volume concentrated in suppliers, so, um, if it plays out as it's currently written. So let's walk through it, we'll be, we'll be vocal with you throughout the process. Um, we're obviously staying incredibly close to it and and as you can see, Kevin Jake myself and really our entire team, we're all spending a lot of time with this and making sure, um, that it's
If it's introduced, it's introduced in a way that's beneficial for really our patients and those that use our product.
Abby: And our next question comes from the line of Robbie Marcus with JP Morgan. Your line is open.
Speaker 8: Oh, great. Kevin, I'll also, I guess, add my congratulations to a long and very successful career. And Jake, look forward to working with you in the new role. Question for me on margin progression through the year. Was just a touch low on gross margin, good on operating margins with good expense control. Sounds like you still have a little bit of inventory building to go, but I was hoping you could just walk us through sort of the margin progression through the rest of the year and the puts and takes there to get to the guide. Thanks.
And our next question comes from the line of Robbie Marcus with J.P. Morgan. Your line is open.
Oh, great. Um, Kevin, I'll also add my congratulations on a long and very successful career. Jake, I look forward to working with you in the new role.
um,
Question for me on our margin progression through the year. Uh, we were just a touch low on gross margin, good on operating margins, with good expense control.
A bit of inventory building to go, but I was hoping you could just walk us through sort of the margin progression through the rest of the year and the puts and takes there to get to the guide. Thanks.
Jake Leach: Sure. Thanks, Robbie. This is Jeremy. I can answer that one. You know, I think you hit on it well. I think you looked at the progression, I would say, from Q1 to Q2, and you saw, you know, a few hundred basis points of improvement. And one thing just to remind you and kind of put in the back of your mind, Q2 also included, I think many of you have seen it, but you know, we had a receiver recall. Effectively, we'll be swapping out some receivers. It's not a large impact, but we took that charge here in the second quarter as well. So that was about a hundred basis point impact on the quarterly results. So the results are even a little bit better than I think what you're seeing.
Jake Leach: The impact on the full year, obviously, pretty immaterial, but on the quarter, obviously, it's worth discussing that. You know, I'd expect a sequential improvement of a couple hundred basis points more as we move into Q3 and then again into Q4. And as you kind of get back to the full year guide of 62%, that's the math that makes sense. And so I think you've seen a lot of progress from Q1 to Q2, especially when you, you know, adjust, you know, for the accrual we made for the recall. And I would expect to see more progress throughout the course of the year, especially as inventories start to return to our shelf. You know, Kevin alluded to it in his marks, and I did a little bit as well. We've got some finished goods starting to build up on our balance sheet.
Sure. Thanks. Robbie, this is Jeremy. I can answer that 1. Um, you know, I think, I think you you hit on it. Well, I think you looked at the the progression, I would say, from q1 to Q2 and you saw, you know, a few hundred basis points of improvement. And 1 thing, just to remind you and kind of put in the back of your mind. Q2 also included, I think many of you have seen it but, you know, we had a receiver recall. Effectively, we'll be swapping out some receivers. It's not a large impact, but we took that charge here in the second quarter as well. So that was about 100 basis point impact on the quarterly results. So, the results were even a little bit better than I think, what you're seeing the impact on the full year. Obviously pretty immaterial, but on the quarterly, it it's worth discussing that, um, you know, I'd expect a sequential Improvement of a couple hundred basis points more as we move into to Q3, and then again into Q4 and as you kind of, get back to the full year guide of 62%, that's the math that makes sense. And so I think you've seen a lot of progress from q1 to Q2, especially when you, you know, adjust, uh, you know, for the, the, the AC cruel, we made for the recall, and I would expect to see more progress.
Jake Leach: And as that takes place, we'll be able to think about more effective and efficient freight routes, cost a little bit less. We're still doing a lot of the chartered flights that we talked about on the last call to make sure that inventory was in place and that our customers weren't interrupted. So hopefully, that helps thinking about the cadence over the course of the year. And again, as we have more and more volume going to our plants and those plants get more and more efficient, I'd expect to see that play out.
Press throughout the course of the year, especially at inventory, starts to return to our shelf. You know, Kevin alluded to it in his remarks, and I did a little bit as well. We've got some finished goods starting to build up on our balance sheet, and as that takes place, we'll be able to think about more effective freight routes that cost a little bit less. We're still doing a lot of the chartered flights that we talked about on the last call to make sure that inventory is in place and that our customers aren't interrupted. So hopefully that helps thinking about the cadence over the course of the year. And again, as we have more and more volume going through our plants and those plants get more and more efficient, I'd expect to see that play out.
Abby: And our next question comes from the line of Joanne Winch with Citibank. Your line is open.
And our next question.
At Joanne winch with City Bank, your line is open.
Speaker 9: Good afternoon, and congrats to both of you. Awesome. I'm thinking about next steps. I'm thinking about G8, the timing of it, what it might look like. And there's a lot of discussion about dual analyte sensors. And I'd love to get your opinion on what do you think about competitive dual analyte sensors and what it may mean for how I started the question on G8. Thank you so much.
Uh, good afternoon and congrats to both of you. Um, awesome.
I am thinking about next steps. I'm considering G8 and the timing of it, what it might look like. There's a lot of discussion about dual analytic sensors, and I'd love to get your opinion on them. What do you think about competitive dual analyte sensors and what it may mean for us?
How I started the question on. Um G8 thank you so much.
Speaker 8: Yeah, thanks, Joanne, for the question. So when we think about G8, we're extremely excited about it. It's our next-generation wearable platform. Some of the key components of it are it's 50% smaller in wearable size on the body. And so you take that, you know, smaller package, and we've packed even more functionality into it. So it has a next-generation custom chipset that does support multiple analyte sensing. So really designed for that from the start. It's also, we're looking to push the envelope again on performance and reliability.
Speaker 8: When it comes to continuous glucose monitoring, one of the things we've seen as we've continued to expand the user base and the broad population that's using CGM, both those with diabetes and those without, we need to continue to ensure that we are building sensors that are both reliable, accurate, and continue to push that boundary because it's so important for the users. So when you think about timing, we are deep in development of G8, and we'll be sharing more around timelines as we progress through the clinical studies required and we get closer to a launch timeline. When we think about, you know, the competitive nature around multi-analyte sensing, but I'd say there's certainly a lot of discussion right now around ketones.
Yeah. Thanks, uh, Joanne for the question. Um, so when we think about G8, we're extremely excited about it, it's our next Generation, uh wearable platform. Um some of the key um components of it are, it's 50% smaller and and wearable size on the body. And so you take that um you know smaller package and we've packed even more functionality into it. So it has a Next Generation custom chipset. Uh, that does um support multiple analyte uh sensing. So really designed for that from the start. Um, it's also um, we're looking to push the envelope again on performance and reliability. Uh when it comes to continuous glucose monitoring 1 of the things we've seen as we've continued to expand uh, the user base and the the broad population that's using CGM. Both those with diabetes and those without um, we need to continue to ensure, um, that we are be building sensors that are both reliable accurate and continue to push that boundary because it's so important, uh, for these users.
Speaker 8: And I think most of the discussion is really focused on the clinical utility of ketones, continuous ketone measurement at the same time as measuring glucose. You know, when I think about a competitive offering for CGM, it's about, you know, what you bring to the user. And when you focus on things like safety, you know, the number one safety component of a CGM for somebody with diabetes is reducing hypoglycemia, the severe hypoglycemia that can lead to death. And so systems like ours that have the urgent low soon alert that gives people a heads up before they go low so they can treat it, that's a significant safety factor. And as we think about high glucose, same thing with our smart high alert that only alerts users if they've been too high for too long and they need to take a little more insulin.
So when you think about timing uh we are deep in development of G8, uh, and we'll be sharing more around timelines as we progress through the clinical studies required and we get closer to to a launch timeline when we think about um you know, the competitive uh, nature around um multi-analyte sensing what I'd say is. There's certainly a lot of discussion right now around ketones um and I think most of the discussion is really focused on the clinical utility of ketones.
Speaker 8: So, you know, it's really about the package that you bring. Certainly, we have a ketone sensor in development in our technology development pipeline, and we'll bring it to the market when we feel it's appropriate. But at this point in time, we're very focused on features that extend safety and ease of use for both our patients as well as the prescribing physicians.
As well as the prescribing physicians.
Abby: And our next question comes from the line of Matt Taylor with Jeffries. Your line is open.
And our next question comes from the line of Matt Taylor with Jefferies. Your line is open.
Jereme Sylvain: Hi, thanks for taking the question, and congrats on the transitions there, and looking forward to working with you, Jake. So I wanted to just ask if you could give us an update on how things are going with the FDA and the progress that you've been making in the plants that were inspected, and maybe just touch on the outlook for 15 days you're going to be launching that here in the second half of the year.
Hi, thanks for taking the question, uh, congrats on the transitions there and looking forward to working with you Jake. Um, so I wanted to just ask if you could give us an update on on how things are going, uh, with the FDA and the progress that you've been making, uh, in the plants that were, uh, inspected and maybe just touch on the outlook for 15 days. As you're going to be launching that here in the second half of the year.
Jake Leach: Yeah, fantastic. Thanks for the question. Yeah, things have been going really well with the FDA. We responded rapidly to the warning letter and their concerns, and we've been giving them periodic updates. We've made quite a bit of updates to our processes and documentation, addressing much of what the FDA's concerns were. And so we still have work to do there, but we've been making fantastic progress there. Along the lines of 15-day launch, again, another very exciting development for DEXCOM, getting our 15-day product out into the market. So you will be seeing its 15-day sensor soon in our warrior population. We're getting it out there in this quarter, for sure. And then shortly after that, you'll see a more broad-scale launch. So very excited to bring the longest-lasting, most accurate sensor to our users in that G7 15-day.
Yeah, fantastic, thanks. Thanks for the question. The, um, yeah. Things have been going really well with the FDA. We, um, responded rapidly, um, to the warning letter and their concerns. Uh, and we've been, um, giving them periodic updates. We've made quite a bit of, um, updates to our processes, uh, and documentation, um, addressing much of what, um, the FDA's concerns were, and so we still have work to do there. But, um, we've been making fantastic progress, uh, there. Um, along the lines of a 15-day launch, um, again another very exciting development for Dexcom, uh, getting our 15-day product out into the market. So, um, you will, uh, be seeing, uh, its 15-day sensors soon and our Warrior population. Um, we're getting it out there, um, in this quarter for sure. Uh, and then shortly after that, you'll see, um, a more broad scale launch. Um, so very excited to bring the long.
Longest-lasting, most accurate sensor, uh, to our users in that G7 15-day.
Abby: And our next question comes from the line of Danielle Antalfi with UBS. Your line is open.
And our next question comes from the line of Danielle and Ty with UBS, your line is open.
Speaker 10: Hey, good afternoon, guys. Thanks so much for taking the question. Kevin, congratulations. I mean, you are DEXCOM, so it's going to be, it's going to be an adjustment for sure. But Jake, I have no doubt you'll be great, and I'm excited to work with you. So just a question as we think about some of the competitive dynamics here in the moving parts, particularly, you know, the primary sensor competitor to you guys integrating with insulin pumps and maybe improving their position in what has been your stalwart patient base, and that is, you know, the Type 1 patient population. Can you talk about what you guys are doing as they start to get close to launching in that patient population and how you're going to protect your competitive moat there? Thanks so much.
Kevin Sayer: You know, I'll start with that, and then Jake can add some other technology if he'd like. We've got more than 2 million patient years on AAD systems, and these outcomes have been phenomenal. I've been out in the field quite a bit the past couple of months, and the stories I hear from people and the things I'm learning, we're doing a very good job with our partners. We very much, you know, do everything we can to improve anything we can do to make those experiences better. And we do have a nice head start, and we have a number of patients on those systems. At the end of the day, these algorithms were built based on DEXCOM technology and DEXCOM CGM. They will perform best using a DEXCOM CGM sensor. So we're very comfortable with our position, but we'll never sit still.
Hey, good afternoon guys, thanks so much for taking the the question Kevin congratulations. I mean you you are Dexcom. So it's going to be, um, it's going to be an adjustment for sure but Jake I I have no doubt, you'll be great and I'm excited to work with you. Um, so just a, just a question as we think about some of the competitive Dynamics here in the moving Parts particularly, um, you know, the the primary sensor competitor to you guys integrating with insulin pumps and, and maybe improving. Um, their position in what has been your stalwart patient base and that is, you know, the type 1 patient population. Can you talk about what you guys are doing as they start to get close to launching um in that patient population and and how you're going to protect your competitive mode there. Thanks so much.
You know, I'll start with that, and then Jake can add some other technology if he'd like.
We've got more than 2 million patient-years on AAD systems.
And these outcomes have been phenomenal.
Uh, I've been out in the field quite a bit, the past couple of months.
And the stories I hear from people. And the things I'm learning, we're doing a very good job with our partners. We very much, you know, do everything we can to improve anything we can do to make those experiences better and we do have a nice Head Start and we have a number of patients on those systems.
At the end of the day, these algorithms were built based on Dexcom technology and Dexcom CGM. They will perform best using a Dexcom CGM sensor.
Kevin Sayer: If our patients and our partners need something to make the systems better, we communicate with them all frequently and work very hard to make that happen. I don't know if you have anything else to add to that one.
Jake Leach: Yeah, the only thing I'd add is I think Kevin covered the, you know, the long history we have with automated delivery partners and the integrations and powering all those years of outcomes. The other thing too I'd add is that it also, all the components that come with our system, all the features, all the benefits, we're going to continue to advance those. And one of the things in the way that we architect our systems is that whether you're using the AID system or not, you get all the benefits of DEXCOM. All of the alerts, the share follow features, the now photo meal logging, all of those things are really what rounds out an offering. So it's not just the sensor, it's about what else comes with it. And so I think that positions us really well. And as Kevin mentioned, we're going to continue to innovate.
So we're very comfortable with our position, but we'll never sit still if our patients and and, and our partners need something to make the systems better, we communicate with them. All frequently, we work very hard to make that happen. Well, if you have anything else to add to that 1, you don't think it adds. I think Kevin covered the, you know, the the long history we have with, um, automates and delivery Partners in the Integrations and powering all those years of outcomes. Um, the other thing too, I, I, I'd add is that. It also all the, the, um, components that come with our system. All the features, all the benefits. Um, we're going to continue to advance those and 1 of the things in the way that we architect, our systems is that whether you're using the aid system or not, uh, you get all the benefits of Dexcom. Uh, all of the alerts. Um, the share follow features, um, the uh, now photo meal, logging all of those things are really what? Um, rounds out an offering. So it's not just the sensor, it's about all. What else comes with it?
Jake Leach: We're not stopping here. And so we're going to innovate both for our users, but also for our partners.
And so, I think that positions us really well and as Kevin mentioned, we're going to continue to innovate. We're not stopping here. Uh and so we're going to innovate both um, for our users but also for our partners,
Abby: And our next question comes from the line of David Roman with Goldman Sachs. Your line is open.
And our next question comes from the line of David Roman with Goldman Sachs your line is open.
Speaker 8: Thank you. Good evening, everyone. Kevin, I'm sorry I won't have an opportunity to work with you in this role, but Jake, looking forward to getting to know you and working with you as you come into the CEO seat. Maybe I'll start on utilization. I mean, one of the areas where we continue to get a lot of questions is as you broaden out the population to include the Type 2 non-insulin-dependent users, what does that mean to overall utilization rates? And what are some of the opportunities you have to drive higher retention in that population? Does that factor into is that coverage? Is it integration with the Oura Ring and other features? Maybe help us think about how you maximize the value of that population as you think about broadening out down the acuity curve.
That means overall utilization rates and and and what are some of the opportunities you have to drive higher retention in that population to does that factor into? Is that coverage? Is it integration with the aura ring and other features? Maybe help us. Think about how you you, you maximize the value of that population, as you think about broadening out down the Acuity curve.
Jake Leach: Hey, David. Yeah, this is Jeremy. I think, you know, in terms of maybe we just start with the specifics around utilization. And if you look at our presentation on our website, it kind of has kind of utilization trends for covered users. And I think what's quite interesting is the utilization, especially as you're thinking about that Type 2 population, you know, the utilization in a covered population is still 75 to 80%. So pretty high utilization, and sometimes that surprises folks. And the reason, of course, is people see the value in utilizing the product. The feedback loop that's provided really helps them modify their life. And so you really, you kind of beat me to it in terms of the features that we're ultimately offering out there that can drive more utilization. Oura, certainly that integration helps integrate into individuals' lives.
Jake Leach: You know, things like share and follow and working together as a team to help manage diabetes, I think those are things that are out there that clearly are helpful. Jake alluded to it, Kevin alluded to it, but meal logging, these are the kind of things that there's value in the app. Meal logging has been out there, obviously, in various independent apps, but when you can overlay things like activity, sleep, meals across your glucose levels, those provide very valuable feedback features. And you know, the question of now I know my numbers, so what do I do with it? I think we're answering that. And I think that's how you increase utilization and you increase outcomes. So we're going to continue to work on that.
Hey David. Yeah, this is Jeremy. I think you know, in terms of maybe we just start with the the specifics around utilization and if you look at our presentation on our website, it kind of has kind of utilization trends for covered users. And I think what's what's quite interesting is is the utilization especially as you're thinking about that type 2 population, you know, the utilization in a covered population, still 75 to 80%, um, so pretty high utilization. Um, and and sometimes that surprises folks, and and the reason of course is, is people see the value in utilizing the product, the feedback loop, that's provided really helps them modify their life. And so you, you really you kind of beat me to it in terms of the features that that were ultimately offering out there that can drive more utilization. Or uh, certainly that integration helps integrate into individuals lives, you know, things like share and follow and and working together as a team to help manage diabetes. I think those are things that are out there that clearly are helpful Jake alluded to it. Kevin alluded to it but meal logging these are the kind of things that there's value in the app and you're logging has been out.
Jake Leach: A lot of the features that are coming over the years are a combination of hardware, as Jake alluded to, to G8, but also software that should really enhance the value of the product we're offering every day. And when you choose DEXCOM, it all comes with that. Whether it's G Series, D Series, or Stello, we'll be continuing to offer those to all the users of DEXCOM going forward.
There obviously, in various independent apps. But what you can overlay things like activity, sleep, meals, your glucose levels, those provide, very valuable feedback features and, you know, the question of now, I know my numbers. So what do I do with it? I think we're answering that and I think that's how you increase utilization and you increase outcomes. So, we're going to continue to work on that. A lot of the features that are coming over. The years are a combination of Hardware as Jake, alluded to to G8 but also software that should really enhance the value of the product we're offering every day and when you choose Dexcom, it all comes with that whether it's G Series D, series, or Stella, we'll be continuing to offer those to all the users of Dexcom going forward.
Abby: And our next question comes from the line of Jason Bedford with Raymond James. Your line is open.
And our next question comes from the line of Jason Bedford with Raymond James.
Speaker 11: Good afternoon, and congrats to both of you. Just maybe on Stello, the over 400,000 app downloads is certainly higher than we thought. Is the guide still, I think last week we checked, was 2% to 3% of sales for the year? Does that still stand? And then if there's any way to comment maybe on the mix between people with diabetes, wellness, or maybe pre-diabetes? Thanks.
Jake Leach: Sure. Yeah, let me start with the guide. Yes, the guide is still 2% to 3%. Off to a great start in the first half of the year, Jason. So I think we're excited about that. But yeah, I think we haven't necessarily changed that range. In terms of the user base, Kevin, you want to kind of cover the user base who's using it?
Uh, good afternoon and and congrats to to both the um, just maybe on Stella the over 400,000 app downloads is is certainly higher than we thought is the guide still. I think the last we we checked was 2 to 3% of sales for the year. Is that still stand? And then there's any way to come and maybe on on on the mix between people with diabetes, Wellness, or or maybe pre-diabetes. Thanks.
Kevin Sayer: You know, when we first started, Jason, it was very much geared towards the Type 2 non-insulin patients. And quite candidly, that's how we designed and developed the app. Because last year, at this time, we didn't have very much, if any, Type 2 coverage for non-insulin users. So early days, that was the group who was buying it, you know, very much, and they were the biggest group. As time has gone on, and now G7 has coverage by the three largest PBMs in the country, we're seeing a shift from those Type 2 patients to coverage. Because it has always been within our history, when we have coverage, we grow. And we grow markets very quickly when we have that. So right now, I would tell you our biggest user group would be health and wellness as far as numbers, pre-diabetes, and Type 2 non-intensive insulin after that.
Sure. Yeah let me start with the the guide. Yes, the guide is still 2 to 3% off to a great start in the first half of the year. Um, Jason. So I think we're we're excited about about that. Um, but yeah, I think I think we're not we haven't necessarily changed that that range in terms of the user base. Kevin you want to kind of cover the, the user base who's using it. You know, when we first started Jason, it was very much geared towards the type 2, non insulin. Uh, patience and quite candidly. That's how we designed and developed the app. Because last year at this time, we didn't have very much of any type 2 coverage for non-insulin users.
Kevin Sayer: And we'll continue to design and develop and work with the app to make sure we hit the features of the user base that's going to be most relevant in what we're doing. Our partners, Oura, and our distribution partners, like in particular Amazon, have made a huge difference in our ability to reach that population. And it's been a great learning for us as we look at our strategies going forward.
So the early days that was the group who was buying it, uh, you know, very much and they were the biggest group as time has gone on and now G7 has coverage by the 3 largest pbms. In the country, we're seeing a shift from those type 2 patients to coverage because it has always been within our history when we have coverage, we grow and we grow markets very quickly when we have that. So right now, I would tell you our biggest user group would be health and wellness as far as numbers pre-diabetes and and and type 2 not on non-intensive insulin, after that, and we'll continue to design and, and develop and and work with the app to make sure we hit the features of the user base. That's going to be most relevant in. What we're doing our partners, uh, Aura and our distribution Partners like, like, in particular Amazon, have made a huge difference in our ability to reach that population and it's been a great learning for us. Uh, as we look at our strategies going,
Forward.
Abby: And our next question comes from the line of Matthew O'Brien with Piper Sandler. Your line is open.
And our next question comes from the line of Matthew O'Brien with Piper Sandler, your line is open.
Speaker 8: Oh, afternoon. Thanks so much for taking the question. And Kevin, best of luck in the future. And Jake, best of luck in your new role, and congratulations. I would love to just talk about guidance a little bit more in the back half. I don't know if this question is for Jeremy or not, but you know, it did come up a little bit, but it is less than the beat that we see in Q2, suggests a pretty meaningful, you know, two-year stack deceleration, you know, at a time where I think you're getting, you should see less of the negative mix shifts.
Speaker 8: So I'm just trying to figure out how much of that is new CEO coming in, want to be conservative versus any kind of competitive concerns or, you know, lack of Type 2 adoption that you're seeing in the business, maybe, you know, you know, without it coming in on the insulin pump side of things or anything else like that to call out specifically versus just being really conservative with the guide in the back half. Thank you.
Is any kind of competitive concerns or, you know, lack of type 2 adoption that you're seeing in the business? Maybe, you know, um, you know, with AIT coming in on the, on the insulin pump side of things or anything else like that to call out specifically versus just being really conservative with the guy in the back half. Thank you.
Jake Leach: Sure. Yeah, I can answer that, and thanks. Thanks for the question. You know, I would say this, we're bullish on this business, maybe full stop there. And you know, as we get into the back half of the year, you know, we talked about the downloads in Stello. We've talked about Type 2 coverage, you know, coming in for our third PBM. We've obviously seen some good work over the first half of the year. You know, I think our commitment at the start of the year was $4.6 billion, and obviously we've outperformed here a little bit in the first quarter and a little bit here in the second quarter. So completely understand where the question is coming from. I think our answer is, look, we need to make sure we meet our commitments. We're going to make sure we deliver against those commitments. It's our focus.
Jake Leach: It's why it's how we're thinking about the guide for the year. Certainly, if you think at the top end of the guide, the top end of the guide does pass through the entirety of the constant currency beat that you see here in the second quarter. And so the way to think about it is, is we made a commitment, we plan on executing against that commitment, and if we can outperform that commitment, we'll certainly pass it along.
Sure, yeah, I can answer that and thanks. Um, thanks for the question. Um, you know, I I would say this. We're bullish on this business maybe full stop there. And, you know, as we get into the back half of the year, you know, we talked about the downloads and Stella, we've talked about type 2 coverage, you know, coming in, for our third PBM, we've obviously seen some good work over the first half, first half of the year, you know, I I think our our our commitment at the start of the year was was 4.6 billion. And obviously we've outperformed um here a little bit in the first quarter and a little bit here in the second quarter, so completely understand where the question was is coming from. I, I think our answer is look, we need to make sure we, we meet our commitments. We're going to make sure we deliver against those commitments. It's our Focus. It's why it's how we're thinking about the guide for the year. Um, certain, if you think at the top end of the guide, the top end of the guide does pass through the entirety of the constant currency beat that you see here in the second quarter. Um, and so, and so, the way to think about it is, is, is we made a commitment. We plan on executing against that.
That commitment and we can outperform that commitment will certainly pass it along.
Abby: And our next question comes from the line of Marie Tibble with BTIG. Your line is open.
Speaker 10: Hi, good evening. Thanks for taking the questions and congrats on a nice quarter. Also passing along my congrats to you, Kevin and Jake. Wanted to ask here, I think Kevin, I heard in your prepared comments that DEXCOM would love to try to go after the entire, you know, Type 2 non-insulin patient population when it comes to, you know, securing reimbursement coverage for these patients. Wanted an update here then on the clinical trial work you guys have been doing. I believe that there was a trial underway. Wondering if we could get an update on how that is progressing. Any other clinical trial work you're hoping to do and any readouts that we might look forward to?
And our next question comes from the line of Murray with btig. Your line is open.
Hi, good evening. Thanks for taking the questions and congrats on a nice quarter. Um, also passing along my, congrats to, to you Kevin and and Jake. Um, wanted to ask here. Uh, I think Kevin and I heard in your prepared comments, um, that, uh, Dexcom would love to try to go after the entire, you know, type to non-insulin, um, patient population when it comes to, um, you know, securing reimbursement coverage for these patients, um, wanted an update here, then on the clinical trial work, you guys have been doing, um, I believe that there was a trial underway. Um, wondering if we could get an update on how that is um progressing. Any other uh clinical trial work, you're hoping to do in any readouts that we might look forward to.
Jereme Sylvain: Yeah, I'm happy to update you on the randomized control trial that we're running. So we are actively running a trial in this broad population of Type 2 non-insulin users. So on lots of different therapies, including GLP-1s, SGLT2s, just basically anybody who's not on insulin. And so that trial is actively running. You know, the outcome that we're looking for is that was powered for is improvements in glycemic control, time and range, all the typical things, as well as A1C. You know, we also have a number of registries around the world where we are producing real-world evidence from this same population of users who are already using G7 or DEXCOM OnePlus. And the outcomes that we're seeing there in terms of their improvement in glycemic control and their ability to hit their goals around A1C and time and range is phenomenal.
Yeah. Um, happy to to update you on the um, randomized control trial that we're running. So we are um actively. Um, running a trial. Um in this broad population of uh type 2 non-insulin users. So on lots of different therapies including glp-1s. Um sglt2s um, just basically anybody who's not an insulin um, and so that trial is is actively running. Um, you know, the out outcome that we're looking for is um, that was powered for is uh, improvements in glycemic control, time and range. All the typical things, as well as A1C. Um, you were also, um, have
Jereme Sylvain: So we're really excited for that study. It's definitely on track and looking to read it out early next year.
Kevin Sayer: You know, this Kevin, I'll add to that. When you look at dynamic changes in the CGM reimbursement and access world, you go back to 2017 when we drove very hard Medicare coverage for the first time. And then our study drove basal coverage after that. We've worked very hard to accumulate evidence to support CGM coverage in the CMS world for people with Type 2 diabetes not on insulin to support the outcomes. You know, just showing them the outcomes. At the same time, you're hearing in political circles pretty much on a daily basis, we're about to go into a wearables revolution. Well, we've got a wearable, and it's pretty revolutionary if somebody uses it. So we will keep pushing. We are working all over the country with respect to understanding things we can do to move this forward, and we'll continue to do so.
A number of Registries around the world where we are um, producing real world evidence from these this same population of users who are already using G7 or Dexcom 1 plus uh and uh the outcomes that we're seeing there in terms of their Improvement in glycemic control and their ability to hit their goals around A1C and time and range is phenomenal. So we're really excited uh for that study. It's on definitely on track um and looking to read it out early next year.
you know, this Kevin I'll add to that um,
When you look at a dynamic changes in the CGM, reimbursement, and access world, you can go back to 2017. When we drove very hard Medicare coverage for the first time and then our study drove basil coverage. After that we've worked very hard to accumulate evidence to support CGM coverage in the CMS world.
For people with type 2 diabetes. Not on insulin to support the outcomes. Uh, you know, just showing them the outcomes at the same time you're hearing in political circles, pretty much on a daily basis. We're about to go into a wearables revolution.
What? We've got a wearable, and it's pretty revolutionary if somebody uses it. So we will keep pushing. We are working all over the country with respect to understanding things we can do to move this forward, and we'll continue to do so.
Abby: And our next question comes from the line of Issy Kirby with Redburn Atlantic. Your line is open.
And our next question comes from the line of icy Kirby with Redbarn Atlantic. Your line is open.
Speaker 9: Hey guys, thanks for taking my question and echoing my congratulations to you both. I wanted to talk about the bowel source one year on from the challenges last year and the new prescriber base. Just what are you currently seeing with respect to reproductivity? Any sort of increase in that's where you expected to be when you made these changes? And then just around the prescriber base, can you remind us the extent to which that was increased in the US with the sales force transition? And what are you seeing in terms of the prescription rates from these new docs that you've onboarded? Thanks.
Speaker 8: Yeah, sure, I can start and sort.Certainly,
Abby: if anyone else wants to add in, please feel free to do so. You know, we've been talking about being about nine. We'll start with we're in a much we're in a good position at this point. I think you can see, you know, based on the patient performance, the new patient performance over the course of this year so far, you know, the sales team is doing a wonderful job in terms of getting in front of new physicians and demonstrating the value of DEXCOM CGM. And I think having Stelo out there as well, you can see Kevin alluded to it earlier, where coverage exists for G-series, great, but Stelo has also been a really effective tool in getting folks to adopt CGM and having our sales teams out there with access to that product, I think, has been great.
Abby: So, you know, I would say that the team continues to do better and better every year. They're getting more and more comfortable in the seats. I would say at this point, after about a year plus out, the team is operating well. And I think we're getting more and more productive every moment, and we're learning every time and tweaking as needed to get better and better. I don't think you'll ever find a sales force that says, "Hey, we're at max productivity." I think everybody in a sales force is certainly hungry to take on more. And we continue to see that with the team. In terms of where we would be from where we expected, we've always talked about being maybe 90 days behind where we thought we would be. I don't think anything's changed from that perspective.
Yeah, sure I can I can start and certainly um, if anyone else wants to add in, please feel free to do so. You know, I we, we've been we've been talking about, um, being about 9, we'll start with, we're in a much. We're in a good position at this point. I think you can see, you know, based on the patient performance, the new patient performance over the course of this year. So far, you know, the, the sales team is doing a wonderful job in terms of getting in front of, of new Physicians and, and demonstrating the value of Dexcom CGM. And I think having Stella out there as well, you can see, Kevin alluded to it earlier where coverage exists for G Series great. But Stella is also been a really effective tool and getting focused to adopt CGM. And, and having our sales teams out there with access to that product, I think has been great. So, you know, I would say that the team continues to do better and better every year, they're getting more and more comfortable in the seats. I would say at this point after we're about a year plus out, um, uh, the team is operating well. And I and I think we're getting more and more productive every moment and we're learning every time and and tweaking as needed to get,
Abby: And that just really dates back to last year in terms of how we kind of kicked off the ground. Across the board, lessons learned, learning those, applying them. I think right now the entire team's at mid-year sales meetings and, again, applying all the lessons learned over the course even of this year. And so I think the team's doing a really nice job there. In terms of prescribers, you know, it's hard now to parse out which ones are new as a result of the sales force versus just organic growth. But I think it's safe to say we have well over 100,000 prescribers at this point writing DEXCOM scripts. And what we've seen is the classic thing we want to see, which is when you look at expanding the prescriber base, the average scripts written by a physician tends to stay the same.
Better and better. I don't think you'll ever find a sales force that says, hey we're at Max productivity. I think everybody in a Salesforce is certainly hungry to take on more and we continue to see that with the team, uh, in terms of where we would be from where we expected. We've always talked about being maybe 90 days behind where we thought we would be. I, I don't think anything's changed from that perspective and that just really dates back to last year, in terms of how we kind of kicked off the ground across the board Lessons Learned, learning those implied.
Abby: And what that means is, as we're bringing in new physicians that write onesie, twosies, you've got folks that have started writing, and they're writing more and more. And so it allows you to have that weighted average. It means basically folks are moving up and to the right in terms of the curve, in terms of the prescription curves. And we should continue to see that. So that's very encouraging to see, and especially encouraging to see as our third PBM coverage kicks in. As more and more coverage is kicking in for non-insulin folks, having those prescribers comfortable and familiar with CGM, I think, provides us a real opportunity for the back half of this year and beyond.
Them. I think right now the entire teams at midyear sales meetings and again, applying all the lessons learned over the course even of this year. And so I think the teams doing a really nice job there in terms of prescribers, you know, it's it's hard now to parse out which ones are new as a result of the Salesforce versus just organic growth. But I think it's safe to say we have well over a 100,000 prescribers at this point writing uh, Dexcom scripts. And what we've seen is is the classic thing we want to see, which is when you look at, when you look at expanding, the the prescriber base, the average scripts written by physician tends to stay the same. And what that means is is as we're bringing in new Physicians that write onesie 2, Z's, you've got folks that have started writing and they're writing more and more. And so it allows you to have that weighted average. It means basically, folks are moving up into the right in terms. In terms of the the curve in terms of the prescription curves and we've said continue to see that. So that's very encouraging, um, to see and especially even encouraging to see as our third PBM coverage kicks in as more, and more coverage is kicking in for
For non-insulin, folks, having those prescribers comfortable and familiar with CGM. I think provides us a real opportunity for the back half of this year and Beyond,
Operator: And our next question comes from the line of Steve Lichtman with Oppenheimer. Your line is open.
And our next question comes from the line of Steve Lickman with Oppenheimer. Your line is open.
David Brown: Thank you. Congrats on the quarter and congratulations, Kevin and Jake. I want to circle back on the international beat in the quarter and outlook. How would you have us think about the underlying international growth outlook here in the near to medium term? And what are the biggest incremental catalysts outside of the US? Thanks.
Thank you. Uh, congrats on the quarter and congratulations, Kevin and Jake. Um, I want to Circle back on the international beat in the quarter and Outlook. Uh, how would you have us think about the underlying International growth outlook here in the near to medium-term? And what are the biggest incremental catalysts outside of the US? Thanks?
Abby: Sure, Steve. Thanks to Jereme again. I'll cover it briefly. You know, the international business, obviously, there was some acceleration from Q1. I think the good underneath all of it, and we talked a little bit about it in Q1 with the business in some cases being a little bit choppy, is underlying new patient ads in Q1 were very solid. That continued here in Q2 in our international business. So the underlying volumes continue to perform well. And what we're seeing is it starts with some of the DEXCOM One Plus coverage. And we talked about that a little bit last quarter. That's continued this quarter, where we've seen new coverage opportunities either stemming in the back half of last year or in the early part of this year, obviously France Basil being one of those. And that really has started to play in.
Sure, Steve. Thanks this is Jeremy again. I'll I'll cover it briefly, you know, the international business. Obviously there was some acceleration from q1. I think the good underneath all of it and we talked a little bit about it in q1 with the business. In some cases being a little bit. Choppy is underlying new patient ads in q1. We're very solid that continued here in Q2 in our international business. So the underlying volumes continue to perform well
Abby: We have seen, and I think we talked about it in the script here earlier, in Canada, the Ontario drug benefit. It's the largest province in Canada for which they have approved coverage for DEXCOM now for all insulin users, so all the way down through Basil. And so you're seeing both pockets of coverage in large areas play in. But I think what you're also seeing, and maybe more importantly, is you're starting to see more and more places across the world cover Basil. So when you ask the question, what are the opportunities? In a lot of the established markets, the opportunities are going deeper in the insulin-intensive using population and either gaining or going deeper in Basil, for which there is very, very low penetration.
And in what we're seeing, is it starts with some of the Dexcom 1 plus coverage. And and that we talked about that a little bit last quarter, that's continued this quarter, um, where we've seen new coverage opportunities, either stemming in the back half of last year, or in the early part of this year, obviously, France, basil, being 1 of those. And that really has started to play in. We have seen and I think we talked about it in the script here. Earlier in Canada, the Ontario drug benefit is the largest province in Canada. Um, for which they have have approved coverage for Dexcom now, for for all insulin users. So all the way down through basil. And so you're seeing both pockets of coverage in large in large areas play in. But I think what you're also seeing and maybe,
Abby: A country like Japan, for example, as I earlier mentioned, France, Basil adoption is still quite low in these countries, and we have coverage for those. So it's going deeper into those markets. It's also looking to turn on additional coverage. We've talked about Germany, for example, having some Basil coverage out there, but being a real opportunity, as well as all of the emerging markets, the established markets. Lastly is the emerging markets for which there's limited coverage. As we've gone into some of these markets, we've used the Bell example in the past, Bulgaria, Estonia, Latvia, Lithuania, where there wasn't coverage for type 1. We moved into that category with DEXCOM 1 and DEXCOM 1 Plus, and coverage ultimately came. And so it's establishing coverage in even the most intensive users and using that as kind of a starting point to demonstrate those capabilities.
Abby: So there's really opportunities all over the world. We've covered a few on the call with Ontario drug benefit, obviously Japan, France, some opportunities across established markets. But I'd expect to see those coverage wins to continue to knock down over the coming months and years, which all provide opportunities in our US business.
Emerging Markets, I saw the established markets. Lastly, is the emerging markets for which there is limited coverage. As we've gone into some of these markets we've used the Bell example in the past. Um, you know, Bulgaria Estonia, Latvia, Lithuania where there wasn't coverage for type 1. We moved into that category with Dexcom 1 and Dexcom 1, plus and coverage ultimately came. And so it's establishing coverage and even the most intensive users and using that as kind of a starting point to demonstrate, there's capability. So there's really opportunities all over the world. We've covered a few on the call with Ontario drug benefit. Obviously Japan, France, some opportunities across established markets but I'd expect to see those coverage wins to continue to knock down over the coming months and years, which all provide opportunities in our us business.
Operator: And our next question comes from the line of Shegun Singh with RBC. Your line is open.
and our next question comes from the line of shagun Singh with RBC, your line is open
David Brown: Great. Thank you so much. And congratulations, Kevin and Jake. I wanted to go back in touch on the CEO transition and the strategy going forward. Jake, can you share with us what your vision for DEXCOM is, what you plan to do similarly or differently to define your era at DEXCOM? And are there any goalposts or milestones that you would like us to evaluate your progress on? And I guess more specifically, anything you can share on how you plan to further build operational global scale at DEXCOM and further capitalize on the opportunity ahead. Thank you.
Great. Thank you so much and congratulations, uh, Kevin and Jake. Um, I I wanted to um, go back and touch on the CEO transition and the strategy going forward. Uh, Jake, can you share with us what your vision for Dexcom is? You know what you plan to do, similarly or differently, uh, to Define your era and Dexcom. Um, and you know, are there any goal posts or Milestones? Um, you know, that you would like us to evaluate your progress on and I guess more specifically, uh, you know, anything, you can share on how you plan to further build operational, global scale, and Dexcom. Um, and further capitalize on the opportunity ahead. Thank you.
Sean Christensen: Yeah, absolutely. Thanks for the question. You know, I think I'm really excited about the opportunity that we have in front of us. If you think about the runway that DEXCOM has in terms of the number of people around the world that we can impact and change lives, you mentioned it around global scale. That is certainly something that we're seeing good progress in our growth globally. But there's so much more to do in terms of gaining access for people around the globe that could benefit from our technology. Our technology not only improves health outcomes, but also saves money to the health care systems. And so as we continue to make sure that that message is very clear and we bring those products to the markets around the globe, that's a key part of our growth strategy going forward.
Sean Christensen: The other thing I'm incredibly excited about is continuing to drive innovation that provides real value to our customers. And that includes our end users, which is becoming a much broader group of people. You know, think type 1, type 2, pre-diabetes, and those who are looking to have a more healthy metabolic condition. Those are our customers, those end users. But also, you know, we think about our prescribers. And our EHR integration is a great example of where we focused on how do we make DEXCOM the CGM of choice for some of these prescribers so that they have preference for DEXCOM because our technology is the best, and we want people to have the advantage it brings. And so I think those are my two key areas of focus right now is access, driving innovation. And then the last one is really around scale of the business.
Yeah, absolutely. Thanks. Thanks for the question. Um, you know, I think I'm, um, really excited about the opportunity that we have in front of us. If you think about the runway, uh, that Dexcom has the number of people around the world that we can impact and change lives, you mentioned it around global scale, that is certain, um, that we're seeing good progress in our growth globally, but there's so much more to do in terms of gaining access for people around the globe that could benefit from our technology. Um, our technology, not only improves Health outcomes but also saves um, money to the the Health Care Systems. And so as we continue to make sure that that message is very clear. Uh, and we bring those products to the markets around the globe. That's a key part of our our growth strategy going forward. The other thing I'm incredibly excited about is um, continue to drive Innovation that provides real value to our customers and and that includes our end users which is becoming a much broader group of people. Um you know, thanks type 1 type 2 pre-diabetes.
and and those who are looking, um, to, you know, have a health more healthy, metabolic condition,
Those are our customers those end users. But also you know we think about our prescribers and you know our EHR integration is a great example of where we focused on how do we make Dexcom the CGM of choice. For some of these prescribers so that they have preference for Dexcom because our technology is the best and we want people to have Advantage the advantage that it brings. And so, I think those are my 2 key areas of
Sean Christensen: I think there's lots of things we do well. There's lots of things we need to continue to enhance in how we scale our business and how we provide efficiencies in the future so we can continue to invest in that innovation.
August right now is Access, Driving Innovation. And then the last 1 is is really around the scale of the business. I think there's lots of things we do. Well, there's lots of things we need to continue to enhance and how we scale our business and how, um, we we provide efficiencies in the future, so we could continue to invest in that innovation.
Operator: And our next question comes from the line of Richard Neuwetter with Truist Securities. Your line is open.
And our next question comes from the line of Richard newer with truist Securities. Your line is open.
Kevin Sayer: Hi, this is Ravi. And for Rich, thank you for taking the questions and congrats on the new announcements. I just kind of want to press on the back half guide or the implied back half guide a little bit. Can you talk maybe about the dynamic between US and OUS here? I believe earlier in the year, we were talking about kind of US volume and revenue growth converging. How should we kind of still think about that in the back half, kind of given that reiterated Stelo guide and strength in terms of what appears to be pretty robust growth OUS? Thank you.
Hi. This is Robbie, and for rich, thank you for taking the questions and congrats, uh, on on the new announcements, I just kind of want to press on, uh, the the back half guide or the implied back, half guide a little bit. Can you talk? Maybe about, you know, the dynamic between us and us here. I, I believe earlier in the year we were talking about kind of us volume and revenue growth. Converging how should we kind of still think about that in the back half? Kind of given that reiterated stello guide and, you know, strengths in terms of what appears to be pretty robust growth OS. Thank you.
Abby: Sure. Yeah, I mean, let's start. It's a bit of two questions, right? It's the US question around what I would say is volume and revenue percentage growth and then just outside the US performance. I think we came into the year talking about the OUS business effectively growing faster than the US business. That's been our historical norm for the past. And we said this year would feel a little bit similar until we get to a 70/30 split. Look, if the US business and Stelo can continue to grow, we'd be happy to tell you that it's outperforming there. But I think that's the general thinking we came into the year, and it's still our general thinking for the rest of the year.
Sure. Yeah. I mean, let's start it's a bit of 2 questions, right? It's the it's the US question around. You know, what I would say is is volume in in Revenue percentage growth and then just, you know, outside the US performance, you know, I think we we came into the year talking about the OU business effectively growing faster than the US business. That's been our historical Norm for the past. And we said this year would would feel a little bit similar until we get to a 7030 split. I I you know, look, if if
Abby: As you then turn to the US business, we do expect the price volume delta, if you will, to come in a little bit over the course of the year. We're lapping the rebate conversation we had last year. And so every kind of sensor out the door is subject to a rebate. So as we certainly lap that, you would expect to see that come in over the course of this year. And as you saw in the first quarter and here to a little bit of extent here in the second quarter, you're seeing those take place as well. And so that's our thinking for at least the back half of the year. Obviously, given the first half of the year's performance, I think it puts us in a good position.
Abby: I think we're excited about where that's going to lead us into the back half of the year. But we also want to be mindful and not get ahead of ourselves when it comes to our guidance. And that's the way we're thinking about the guide for the balance of the year.
Door is subject to a rebate. So as we certainly lap that you would expect to see that come in over the course of this year. And and as you saw in the first quarter and here to a, to a little bit of an extent here in the second quarter, you're seeing those take place as well. And so um, that's our thinking for, at least the back half of the Year obviously. Um, you know, given the first half of the year's performance, I think it puts us in a good position. I think we're excited about where that's going to lead us into the back half of the year, but we also want to be mindful and not get ahead of ourselves when it comes to our guidance. And that's the way we're thinking about the guide for the balance of the year.
Operator: And our next question comes from the line of Michael Pollard with Wolf Research. Your line is open.
And our next question comes from the line of Michael Pollock, with wolf research. Your line is open.
Kevin Sayer: Hey, good afternoon. I want to follow up on a remark comment. You announced that you rolled out a nationwide warranty program for your pharmacy customers. My question is, is this financially consequential? If so, how? Why now? And is this something that's different than your competitor or now similar? Thank you.
Good afternoon. I want to follow up on a preparatory remark comment. Um,
Uh, you announced that you rolled out a nationwide warranty program for your pharmacy customers. My question is, is this financially consequential? If so, you know, why now? And is this something that's different than your competitors or now similar? Thank you.
Abby: Sure. Yeah, and we can answer that. You know, in terms of financially, it's indifferent at this point. And so it should effectively be net neutral from a cost perspective. In terms of its technology, it's leveraging technology and partners that are in place to help us do that. And so as that technology and those partners were able to be put in place and that feature became available, it is something that, one, is differentiated to us. And two, I think for those folks that don't mind waiting at home for us to ship them a sensor, if they have excess sensors from a shipment that took place earlier, great. It's not too dissimilar from a lot of us ordering things on Amazon. They come to the house in the next couple of days, and you wait for it, and it's just fine.
Sure. Yeah, we can answer that. You know, in terms of financially, it's indifferent at this point. Um, and so, you know, it should effectively be net neutral from a cost perspective. In terms of its technology, it's leveraging technology and partners that are in place to help us do that. And so, you know, as that technology and those partners were able to be put in place, um, and that c
Abby: For those that have either on their last sensor or they're going on a trip and they need a replacement immediately where it's worth driving to the pharmacy to pick one up, it's an option. And when Jake talks about making things easier for our customers, that's exactly what the focus was. And this technology became available, and the capability was there. It's an opportunity for our customers to choose which way they want to get it. And I think that choice is value additive. And so we went forward with it and excited for customers to experience it.
Became available. It is something that 1 is differentiated to us and 2, I think for those folks that don't mind waiting at home for us to ship them a sensor if they have excess sensors, um, from a shipment that took place earlier great. Uh, it's not too dissimilar from a lot of us ordering things on Amazon. They come to the house in the next couple of days and, you know, you wait for it and it's just fine for those that have are on their last sensor or they're going on a trip. And they need a replacement immediately where it's worth driving to the pharmacy to pick 1 up. It's an option and, and when you know, Jake talks about making things easier for our customers. That's exactly what the focus was. And this technology became available and the capability was there. It it's an opportunity for, for our customers to choose, which way they want to get it. And I think that choice is value additive and so we we went forward with it and excited for customers to experience it.
Operator: And our next question comes from the line of Josh Jennings with TD Cowan. Your line is open.
Our next question.
Comes from the line of Josh Jennings with TD Cowen. Your line is open.
Jereme Sylvain: Hi, good afternoon. Thanks for taking the question. And I apologize if you've addressed this already, but I was hoping to just get the status of the recovery in the DME channel. I know you guys have been working and making strides over the last number of quarters since last year. But where do you stand today? How much more work is left, or do you feel like that channel has been stabilized and the DME partnerships are back to where they started at the end of 2023? Thanks for taking the question.
Hi, good afternoon. Thanks for taking the question and apologize. If you
Jake Leach: Yeah, this is Kevin. I'll take that. We've spent a lot of time with our DME partners to learn the things that we can do better. I think those relationships, particularly with the large DME partners, are much stronger than they were before. We're working hard to give them enough inventory to keep everybody stocked up and to be able to serve patients with what is typically a three-month supply. We communicate regularly with them. You know, we have a new commercial team right now, and they are spending a great deal of time on these relationships and understanding what goes on. These partners are going to be very important to us as we go through this competitive bidding process. This is not something we're going to go through alone. So we'll work with them continually.
Addressed this already but was hoping to just get this status of the recovery and the DME Channel. I know you guys have been working and making strides over the last number of quarters since last year but where do you stand today? How much more work is left? Or do you feel like um, that channel has been stabilized? And the DME Partnerships are are back to to where they, where they started at the end of 2023? Thanks for taking the question.
Yeah, this is Kevin. I'll take that. We've spent a lot of time with our DME Partners to learn the things that we can do better.
I think those relationships particularly with the large, DME partners are much stronger than they were before. Uh, we're working hard to give them enough, inventory to keep everybody stocked up and to be able to serve patients with what is typically a 3 month supply? We communicate regularly with whom. You know, we have a new commercial team right now and they are spending a great deal of time on these relationships and understanding what goes on. These partners are going to be very important to us as we go through this competitive bidding process.
Jake Leach: We'll have regular conversations, and we're comfortable that we can get to the right place.
This is not something we're going to go through a loan, so we'll work with them continually, we'll have regular conversations and we're comfortable that we can get to the right place.
Operator: And our next question comes from the line of Brandon Vasquez with William Blair. Your line is open.
With William, Blair, your line is open.
Jereme Sylvain: Hi, everyone. Thanks for taking the question and congrats to Kevin and Jake on the transition. I just wanted to ask on 15 days as we're getting closer to the actual launch here and we are kind of sharpening our models on this. I know historically you all have talked about think about this on an annual revenue per patient. Now you are starting to have discussions with the payers since this is approved. How are those discussions going? Should we continue to think about this as a kind of an annual revenue per patient? And as those discussions are evolving, how do you feel like the annual revenue per patient is going to shake out on the 10-day versus the 15-day now that we know that just to kind of hone in on our models? Thanks.
Hi everyone. Thanks for the uh taking the question and congrats to Kevin and Jake on the transition. Um, I just wanted to ask on 15 days as we're getting closer to the actual launch here and we are kind of sharpening our models on this and a historically you all have talked about think about this on an annual revenue per patient. Now you are starting to have discussions with the payers since this is approved. How are those discussions going? Uh should we continue to think about this? As a um kind of an annual revenue per patient and as those discussions are evolving, do you how do you feel like the annual revenue per patient is going to shake out on the uh
10 day versus 15 day. Now that we know that just to kind of hone in, on our models. Thanks.
Abby: Sure. Thanks, Brandon. Yeah, you know, I think the negotiations are really, and they have been for some time, it's really about everything really devolves into how do you provide a month full of support, almost like a service model. Actually, not too dissimilar from the CMS proposal where things are thought about on a monthly rental basis. And when we negotiate, that's exactly how we think about it is what is a monthly reimbursement? And so by way of multiplying by that 12 in annual reimbursement, we would expect something the exact same approach to apply to the 15-day sensor. And that's how we're going about it. You'd expect that across really all business lines as well. So we've been doing that across our commercial business lines. And of course, CMS has reimbursed that way for some time. So I wouldn't expect much of a change from that perspective.
How we think about it is, what are the monthly reimbursement? And so, by way of multiplying, by that 12 and annual reimbursement, um, we would expect something the exact same approach to apply to the 15-day sensor. Um, and and that's how we're going about it. Um, you'd expect that across really all business lines as well. So we we've been doing that across our Commercial Business lines, and of course, CMS is reimbursed that way for some time. So I I wouldn't expect much of a change from that perspective.
Operator: And our final question comes from the line of Bill Plovanek with Canaccord Genuity. Your line is open.
And our final question comes from the line of Bill Planicie with Canaccord Genuity. Your line is open.
Speaker 8: Hey, great. Thanks. And thanks for squeezing me in. Just wanted to switch over to the pregnancy, the type 1 pregnancy and the gestational. You did have a lot of data at ADA. You know, this has been an area that's been an opportunity for a long time. I was wondering if you could give us some kind of granularity on where are you today in penetration of that market? Does the data that's been presented provide the information needed to kind of change physician behavior and guidelines? And kind of how do you see this playing out over the next year or two? And remind us again of the TAM of that market. Thanks.
Hey, great, thanks, and thanks for squeezing me in. Um, just wanted to switch over to the uh, pregnancy. The type 1 pregnancy, and the gestational you did have a lot of data at Ada, you know, this has been an area. That's been an opportunity for a long time. I was wondering if you could give us, you know, some kind of granularity on. Where are you today in penetration at that market? Does the data that's been presented provide the information needed to kind of change physician behavior, and guidelines and you know, kind of how do you see this playing out over the next year or 2 and and and remind us again of the The Tam of that market? Thanks?
Sean Christensen: So yeah, thanks, Bill. You know, I think we're still early in the penetration there. It's basically one in 10 pregnancies in the United States is impacted by gestational diabetes. So it's quite a large population. And so as we think about the product, we actually made some updates to G7 very recently to better serve this population. We added in a fasting glucose measurement as well as customizable target ranges because for pregnancy, the physicians often want a little bit tighter control during pregnancy. So we implemented all of that into G7 to help drive more of the utility of CGM in this population. So our teams are starting to call in these offices. And I think there's multiple things we still have to do in terms of, one, awareness of the technology.
Sean Christensen: How do these physicians who are not necessarily accustomed to prescribing CGM, how do they ensure that they get the prescriptions filled in? And then also really about the reimbursement and making sure we can navigate the payers for this. And so all those things are starting to come together. And it's a great opportunity to really improve birth outcomes. One of the papers at ADA that was presented was, as you mentioned, was around the benefits of mothers wearing CGM. And the CGM group compared to the control group that was doing finger sticks that had gestational diabetes, significant decrease in unscheduled C-sections and admissions to the NICU in the population that was using CGM. So the outcomes are very clear. And so now it's our job to drive awareness.
So, um, yeah, thanks Bill. Um, the uh, you know, I think we're, we're still early in the penetration there, um, it's basically um, 10, uh, 1 and 10 in the United States is impacted by um, gestational diabetes. So it's quite quite a large um population. Uh, and so, as we think about, um, the product, we actually made some updates to G7 very recently just better serve this population. We added in a fasting glucose measurement as well as customizable Target ranges. Because for pregnancy, uh, the physician's office of often want um a little bit tighter control, um, during pregnancy. So we implemented all of that in the G7 to help Drive, um, you know, more of the utility of of CGM in this population. So our our teams are starting to call in these offices. Um and I think there's multiple things work, we still have to do in terms of 1, awareness of the technology, how do these Physicians who are not necessarily accustomed to prescribing CGM? How do they ensure that they get? Um, the prescriptions, um, filled in and
And then also really about the reimbursement, making sure we can navigate the payers for this. And so all those things are starting to come together. Um, and it's a great opportunity to really improve, um, birth outcomes. One of the papers that, um, Ada that was presented was, as you mentioned, was around, um, the benefits mothers get from wearing CGM and the, you know, CGM group compared to the control group that was doing finger sticks that had spatial diabetes. Significant, um, decrease in unscheduled C-sections and...
To the NICU in the, the population that was using CGM. So, the outcomes are very clear. And so now it's our job to drive awareness.
Operator: And ladies and gentlemen, that concludes our question and answer session. I would now like to turn the call back over to Mr. Kevin Sayer for closing remarks.
And ladies and gentlemen, that concludes our question-and-answer session. I would now like to turn the call back over to Mr. Kevin Sayer for closing remarks.
Speaker 9: Thank you, everybody. And thanks for the kind words today. I just want to remind you all that I'm not riding the retirement wave out of here right now. I've got about five more months when we need to drive this company, but I've learned a very valuable lesson over the years. My main job is to position these guys for success as much as I possibly can. And that's what we'll be doing the five months while I'm still CEO and then when I'm an executive chairman after that. So I totally look forward to being around this company for a while and learning and being involved. And I thank you all for your support and all the time that we've worked with you. You guys have a great day.
Thank you, everybody, and thanks for the kind words today. I just want to remind you all that I’m not riding the retirement wave out of here. Right now, I’ve got about five more months, and we need to drive this company. But I’ve learned a very valuable lesson over the years: my main job is to position these guys for success as much as I possibly can. And that’s what we’ll be doing for the five months while I’m still CEO and then when I’m Executive Chairman after that. So I totally look forward to being around this company for a while and learning and being involved. And I thank you all for your support and all the time that we’ve worked with you. You guys have a great day.
Operator: And ladies and gentlemen, this concludes today's call. And we thank you for your participation. You may now disconnect.
And ladies and gentlemen, this concludes today's call, and we thank you for your participation. You may now disconnect.