Good day, and thank you for joining us. Welcome to the Beta Bionics Inc. Q4 and Full Year 2025 Earnings Conference Call and Webcast. I will now turn the conference over to your speaker today, Blake Beber, Head of Investor Relations.

Good afternoon, and thank you for tuning into Beta Bionics Fourth Quarter and Full Year 2025 Earnings Call. Joining me for today's call are Chief Executive Officer, Sean Saint and Chief Financial Officer, Stephen Feider. Both the replay of this call and the press release discussing our fourth quarter and full year 2025 results will be available on the Investor Relations section of our website. The replay will be available for approximately 1 year following the conclusion of this call. Information recorded on this call speaks only as of today, February 17, 2026. Therefore, if you're listening to any replay, time-sensitive information may no longer be accurate. Also on our website is our supplemental fourth quarter 2025 earnings presentation and updated corporate presentation. We encourage you to refer to those documents for a summary of key metrics and business updates. Before we begin, we would like to remind you that today's discussion will include forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements reflect management's expectations about future events, our product pipeline, development timelines, financial performance, and operating plans. Please refer to the cautionary statements in the press release we issued earlier today for a detailed explanation of the inherent limitations of such forward-looking statements. These documents contain and identify important factors that may cause actual results to differ materially from current expectations expressed or implied by our forward-looking statements. Please note that the forward-looking statements made during this call speak only as of today's date, and we undertake no obligation to update them to reflect subsequent events or circumstances, except to the extent required by law. Today's discussion will also include references to non-GAAP financial measures with respect to our performance, namely adjusted EBITDA. Non-GAAP financial measures are provided to give our investors information that we believe is indicative of our core operating performance and reflects our ongoing business operations. We believe these non-GAAP financial measures facilitate better comparisons of operating results across reporting periods. Any non-GAAP information presented should not be considered as a substitution independently or superior to results prepared in accordance with GAAP. Please refer to our earnings release and supplemental earnings presentation on the Investor Relations section of our website for a reconciliation of non-GAAP financial measures to their most directly comparable GAAP financial measure. With that, I'd now like to turn the call over to Sean.

Thanks, Blake. Good afternoon, everyone, and thank you for joining. With this call, we're officially turning the page on our first full year as a public company. It's been an exciting year to say the least, and I want to take a brief moment to reflect on it before we dive into the details of our Q4 and full year 2025 performance. Beta Bionics exists to deliver solutions to people with diabetes that reduce burden, expand access, and ultimately improve outcomes at the population level. We believe that in doing so, we can, for the first time, begin to lower the average A1c of people living with diabetes in the U.S. Our performance over the last year is strongly indicative that we're on the right track. On our first earnings call, we shared our key targets for the full year 2025. And as we'll highlight in more detail shortly, we outperformed substantially on each of those metrics. Close to 20,000 new users adopted our technology in 2025, more than doubling our installed base entering the year, which now stands at about 35,000 total users that have adopted the iLet since launch. We added those users with what we believe is a substantially smaller sales force than our competitors, which we believe on a per territory basis made our sales reps potentially the most productive in the durable pumps market in 2025. That goes to show you the power of our fully adopted algorithm, our robust ecosystem of digital tools to support our users, their caregivers and their providers, and ultimately, our team's ability to execute and deliver results. We continue to lead from the front on our pharmacy channel strategy for durable pumps and established formulary agreements with all the major pharmacy benefit managers or PBMs that operate in the U.S. We were also effective in driving adoption of those formulary agreements at the individual plan level, which is a critical step in the process that ultimately enabled many of our users to access the iLet and its related consumables for significantly lower out-of-pocket costs. We also believe our gross margin profile is already the strongest in the durable pump space, as evidenced by our performance this year, especially considering the success that we've seen in the pharmacy channel, which had a short-term dilutive effect on gross margin in 2025. On the R&D side of the business, we took meaningful steps in the development of Mint, our patch pump program, which we unveiled to the world at our first Investor and Analyst Day in June. We also completed our first clinical trials as a drug company, executing a PK/PD trial for our glucagon asset and a first-in-human feasibility trial for the entirety of our bihormonal system in development. I'm proud of all we've accomplished in 2025, and I look forward to 2026 as another year of relentless execution on our key objectives that we believe will ultimately position us to revolutionize diabetes care in the years to come. We have lots of ground to cover on today's call, beginning with our fourth quarter and full year 2025 results. Stephen will then provide some additional detail on our fourth quarter performance before introducing our guidance for full year 2026. I'll wrap up the call with regulatory and pipeline updates, and then we'll take Q&A. Starting with a brief overview of full year 2025 performance, I'm proud to announce that we delivered $100.3 million in net sales, which grew 54% year-over-year. Our gross margin of 55.4% expanded slightly year-over-year, while our percentage of new patient starts through pharmacy grew to a high 20s percentage for the full year 2025 relative to a high single-digit percentage in the prior year. To put it simply, these are excellent results. The iLet is winning with its unmatched automation. Our highly transparent and inclusive real-world efficacy and safety outcomes are excellent and available for the world to see in our latest corporate presentation. Beyond the product, we're quickly innovating the business model for durable insulin pumps and we're remaining disciplined in our execution and cost control. Diving into Q4 results. Specifically, we generated $32.1 million in net sales, which represents 57% growth year-over-year. Q4 revenue growth was driven by a few items. Number one, we delivered 5,592 new patient starts in the quarter, which grew 37% year-over-year. Number 2 is our growing installed base of users accessing their monthly supplies for iLet through the pharmacy channel, whom we're retaining at a high level. Number 3 is modest favorability in stocking revenue that we saw in both the DME and pharmacy channels relative to the prior quarter year. In pharmacy, in particular, we saw a modest pull forward of about $1 million of stocking orders from Q1 into Q4 and ahead of price increases that were implemented at the end of the year in that channel. In Q4, a low 30s percentage of our new patient starts were reimbursed through the pharmacy channel, increasing slightly relative to the prior quarter and substantially relative to the low teens percentage we saw in Q4 of the prior year. Our gross margin in Q4 was 59%, expanding 179 basis points year-over-year. Gross margin expansion is being driven by the benefits of increased scale and manufacturing volume leverage, greater contribution of high margin revenue from our growing pharmacy installed base, and continued cost discipline. With that, I'll hand the call over to Stephen to provide some additional color on our fourth quarter performance and introduce our full year 2026 guidance.

Thanks, Sean. Our Q4 revenue, pharmacy mix, and gross margin results surpassed our guidance across the board. Although we don't typically provide guidance on this metric, our 5,592 new patient starts increased by 5% sequentially compared to the previous quarter, aligning with the lower end of our expectations for the quarter. Despite Q4 continuing to be the strongest quarter seasonally for new patient starts in the diabetes market since the launch of the iLet, we believe its relative strength is diminishing. Historically, Q4's strength was largely due to individuals with diabetes delaying insulin pump purchases until they reached their out-of-pocket maximums for the year, before their deductibles reset in the New Year. This waiting allowed patients to save between $1,000 and $2,000 on pumps acquired later in the year through the DME channel. Since 2023, most new pump users in the U.S. have obtained their devices through the pharmacy channel, where many can start and maintain therapy for less than $50 per month. In other words, we think that, over the past few years, individuals with diabetes who previously waited until Q4 to adopt a new pump are now waiting less frequently. Our strategy in the pharmacy channel enables us to attract these new users and is a key factor in the strong adoption of the iLet throughout the year. In Q4, about 69% of our new patient starts came from those who had been using multiple daily injections before starting the iLet, highlighting how the iLet is broadening the insulin pump market and meeting an unmet need. Turning to gross margin, Q4 was at 59%. The improvement compared to the previous year and quarter was due to two main factors: growth in the pharmacy-installed base, which creates high-margin recurring revenue and shows strong patient retention; and lower cost per unit from increased manufacturing volumes driven by patient demand. Our total operating expenses for the fourth quarter were $35.1 million, up 42% from $24.7 million in Q4 of 2024. This rise in sales and marketing expenses compared to the prior year was due to the expansion of our field sales team, which ended Q4 with 63 territories. The uptick in R&D expenses was linked to the Mint and bihormonal projects. The increase in G&A expenses was primarily due to new costs associated with our public company operations. As of December 31, 2025, we had around $265 million in cash, cash equivalents, and short and long-term investments, providing us with sufficient capital to fund key initiatives and enabling us to generate free cash flow earlier than historical diabetes industry peers. Now, moving on to our full-year 2026 guidance. We expect to generate revenue of $130 million to $135 million in 2026. In terms of our channel mix, we anticipate that 36% to 38% of new patient starts will be reimbursed through the pharmacy channel. Additionally, we expect our gross margin to be between 55.5% and 57.5%. Our revenue guidance considers our anticipation for the iLet to continue expanding the pump market while capturing market share, alongside strong patient retention and stable pricing. Other factors that may influence our revenue performance include the percentage of new patient starts in the pharmacy channel and the rate at which we grow our sales force throughout the year. Our gross margin guidance reflects our commitment to cost discipline and efficiency in manufacturing, as well as the continued growth of high-margin revenue from our pharmacy channel. Another variable that could affect gross margin is the pharmacy mix of new patient starts, as significant changes from one quarter to the next can materially impact our short-term gross margin. Looking at operating expenses and capital expenditures, for 2026, we anticipate both to increase as a percentage of revenue compared to the prior year. We foresee rising spend in sales and marketing and R&D driven by expansion and project costs. G&A spend is expected to rise slightly as we support our growing organization. Capital expenditures will primarily rise due to Mint. In terms of revenue progression, we expect Q1 to see a sequential decline from Q4 2025. While the growth in the pharmacy channel is dampening traditional seasonality in the insulin pump market, Q4 is still the strongest quarter on a relative basis, even though its strength is waning. Q1 generally remains the weakest quarter due to annual deductible resets, with some patients still waiting to meet those deductibles before purchasing an insulin pump. The number of patients starting therapy through the medical benefit tends to be larger in the latter half of the year compared to Q1. In Q1 2025, we mitigated typical seasonality effects due to momentum from late 2024 product launches and notably expanded pharmacy coverage through our agreement with Prime Therapeutics, making it easier for more patients to access the iLet with lower out-of-pocket costs. However, we do not anticipate Q1 2026 to benefit from similar tailwinds. We lacked comparable product launches in late 2025 and while we expect some growth in pharmacy coverage from Q4 2025 to Q1 2026, it won't match the change we saw in Q1 2025. Overall, we expect revenue in 2026 to be weighted more towards the first half of the year compared to 2025. In the first half of 2025, we saw a significant rise in new patient starts through the pharmacy channel, initially diluting revenue but later becoming beneficial in the second half of the year. In 2026, we expect a similar mix increase, but the extent of the change is likely to be more modest than what we experienced in early 2025. Therefore, we expect a slightly higher revenue weighting in the first half of 2026 compared to the previous year. Another key factor influencing revenue throughout the year will be the speed at which we grow our sales force. We plan to add at least 20 new sales territories in 2026, up from the 63 territories at the end of 2025, and will continue to expand as we find high-quality sales representatives in key markets. However, we will no longer disclose specific quarter-end territory counts to align our reporting practices with those of our peers. Regarding our disclosure on new patient starts, since our IPO, we have provided exact figures to help the investment community understand our traditional DME channel versus our innovative pharmacy model. At this point, we believe the investment community has a solid grasp of our dual-channel business model. Therefore, to align better with industry standards, we will stop providing exact quarterly figures for new patient starts while still committing to a high level of transparency by reporting our quarterly revenue by product and channel, our mix of new patient starts in the pharmacy channel, and trend-based commentary. Looking ahead to our 2026 gross margin, we expect it to decline in Q1 compared to the latter half of 2025 due to two reasons: seasonal demand is typically lighter in Q1, leading to lower manufacturing volumes; and our mix of new patient starts in the pharmacy channel is expected to increase. After Q1, we anticipate sequential gross margin improvements each quarter as we leverage greater scale and grow high-margin revenue from our expanding pharmacy installed base. Before handing the call back to Sean, I want to express my pride in our team. In just our second full year in the market, we've surpassed $100 million in revenue for a high-need pharmacy reimbursement for a tubed insulin pump and made notable progress across our R&D initiatives. All this was accomplished with a level of cost discipline that the industry rarely sees. The energy and excitement at Beta Bionics is at an all-time high, with a competitive team focused on success and making a difference for individuals living with diabetes. I'm truly excited. I’ll now pass the call back to Sean.

Thanks, Stephen. Before I get into the innovation pipeline, I'd like to address the warning letter that we received from the FDA in late January related to observations made by the agency following the inspection of our Irvine facility in June of 2025. After that inspection, the agency issued us a Form 483, which we highlighted on our previous earnings call. We take the FDA's observations very seriously. And following the issuance of the Form 483, we immediately began remediation efforts to directly address the observations. We were disappointed to receive a warning letter, but I remain proud of the incredible work our teams are doing to address the agency's concerns and confident in our ability to resolve them. We look forward to working together with the FDA to evolve and strengthen our quality systems and processes. I want to briefly highlight those key issues and discuss our remediation efforts in the spirit of transparency and to instill confidence in the work we're doing to address the agency's concerns and ultimately close out the warning letter. First, the agency had several findings concerning our complaint handling system. Specifically, they found that our definitions of complaints that rose to the level of Medical Device Report or MDR were not consistent with their expectations. This alignment is a hard thing to do without direct feedback from the FDA, and many companies have had to work through the exact issue with the agency to get it resolved. I'd like to highlight an example of what I'm talking about. In the agency's view, a reportable hypoglycemia event includes those that are self-treated with glucose drinks or candies. By contrast, prior to receiving feedback from the agency, our definition of a reportable hypoglycemia event included only those requiring third-party assistance, which was aligned to the ADA's definition for severe hypoglycemia. The FDA's view that self-treated hypoglycemia should also be reported isn't codified to us without direct feedback from the agency and through our collaboration. Beta Bionics has aligned our definition of reportability with the expectations of the agency, and the warning letter seems to confirm that the agency agrees with our new criteria. These criteria often vary meaningfully between different companies in the industry. So one of the most important things that we're staying mindful of is collaboratively establishing and implementing practices that the agency agrees with, specifically in the context of Beta Bionics. Another finding in the warning letter is that certain MDRs that were previously filed or caused to be filed by this change in definition were filed after the 30-day deadline. In many cases, these late filings were caused by the change in reportability definitions. Specifically, when we remediated old complaints that were previously not reportable and later became reportable, the 30-day time clock had already expired, causing a number of late reports. Beta Bionics believes that both our new definition, as well as our new complaint handling system will eliminate this problem in the future. We previously discussed that while we remediate our old complaints, an elevated MDR rate would be present, and this remediation would last through Q2 of this year. We're on track with this remediation and reiterate our intention to have all of our old filings fully compliant by the end of Q2. Additionally, findings in the warning letter relate to our procedures for tracking, trending, and analyzing our complaint data to ensure our product meets expectations in the field. I want to be clear on this one. We certainly had procedures and they've been previously audited as acceptable. But as with most things, the more you use them, the more you can identify areas for improvement, and that's what happened here. We've been working on those improvements since June and are confident through our collaboration with the agency that we will sufficiently address their observations. Another typical area that the agency had feedback on was our CAPA or corrective and preventive action system. Again, while we had a CAPA system, the agency found areas where we could have opened a CAPA and did not or could have done a better job with what we call VOE or verification of effectiveness, which is the process to ensure that changes we make through the CAPA process worked. The agency's feedback was crucial to our understanding of where our CAPA process needed to evolve, and this is another area that we've devoted a lot of attention towards remediating as it relates to the agency's observations. And lastly, the agency had feedback on our corrections and removals procedure. In today's day and age, companies like Beta Bionics are in the advantageous position to be able to push out software updates to our products easily with firmware over-the-air updates. This is a benefit to our users as it allows the product to get better without users having to send it to us. However, the FDA takes a broad view of what constitutes a safety change, and their feedback was that there were certain software updates that we had made where we should have filed a corrections and removal report. Beta Bionics must now file all the required reports, and to be clear, these reports have to do with changes previously made to the software, and no additional changes that we are currently aware of are required. We expect the agency will be satisfied with our response to their concerns here. As many of you may have noticed, there have been several warning letters recently issued in the diabetes space. From the limited public information available, these letters generally seem to have to do with quality systems, indicating how challenging it can be to get these systems fully aligned with the FDA's expectations with our direct feedback from the agency. While these findings are serious, we also believe that they are straightforward and that our remediation of the systemic issues found is well underway. I'm proud of our team's response to both the 483 and the subsequent warning letter, and as we previously stated, we do not believe this warning letter impacts any of our previously shared timelines. Now for the fun stuff. Let's start with an update on Mint, our patch pump in development. I spoke earlier about our leadership in the durable pump space, propelled by our differentiated algorithm, pharmacy channel strategy and excellent gross margin profile. We expect that Mint will enable us to extend our leadership into the broader automated insulin delivery market beyond just the durables segment. We expect Mint to be a game-changing product with an advantaged user experience from both a form factor and algorithm standpoint relative to other patch pumps on the market or in development. Our efforts in the pharmacy channel with iLet have been critical in terms of our ability to form key relationships with PBMs and payers that we'll leverage to build coverage for Mint. In many cases, we expect that existing contracts for iLet will be amended to incorporate Mint. And in other cases where we don't yet have coverage for the iLet in pharmacy, we expect to be able to generate coverage for Mint, given mechanisms for patch pump coverage already exist for the majority of payers. On gross margin, we expect Mint's design will eventually enable us to drive industry-leading gross margins for any automated insulin delivery system at scale. In Q4, we continued to make great progress on Mint, just tracking well towards key internal milestones on the way to unconstrained commercial launch by the end of 2027. Our work in Q4 continued to boost our confidence in the product's merit and ultimately, our ability to potentially obtain FDA clearance and manufacture at scale. For our bihormonal system in development, in Q4, we completed our first in-human feasibility trial in New Zealand. This was our first time testing the entirety of the bihormonal system, inclusive of our glucagon asset in humans, which represents a key milestone for the program. The trial was highly informative to our go-forward development strategy and we continue to observe no safety signals for the glucagon asset. As we've progressed this development program, we've also gotten greater clarity from the agency on our regulatory path to approval for the system, which can be described in development phases. We're currently in Phase IIa for the program, meaning we are conducting feasibility trials in small groups of patients to stress test the system's capabilities and iterate accordingly. The first in-human feasibility trial was just completed as part of Phase IIa, and we'll be initiating another Phase IIa feasibility trial in the first half of this year to stress test and iterate the system further in preparation for the more advanced stages of development. Following the completion of our upcoming Phase IIa trial, we expect to progress to Phase IIb, which we anticipate will be a much more robust feasibility trial that will enable us to advance to concurrent Phase III pivotal trials. This pathway doesn't represent a change to our development program, but rather, it provides increased specificity to the expected requirements for our system to ultimately gain NDA approval for the glucagon asset and 510(k) approvals for the pump and algorithm. We continue to be extremely excited by the bihormonal system's potential to transform clinical outcomes for people with diabetes, but more importantly, the potential to transform the way people experience their diabetes and shift their mindset from diabetes being a disease that they manage to simply a disease that they have. Lastly, on our innovation pipeline, I want to cover type 2 diabetes. In Q3, we continued to see some healthcare providers prescribe iLet to their type 2 patients off-label. We estimate that 25% to 30% of our new patient starts in Q4 were from type 2, increasing slightly relative to the prior quarter. While we're not committing to a specific timeline, we remain eager to pursue a diabetes label through the FDA. To conclude our prepared remarks, I want to highlight the key message from today's call. It's been about 2.5 years since we launched the iLet, and in that time, Beta Bionics has emerged as a leader in the durable insulin pump space. Our product is exceptional, and it's changing lives. Our real-world evidence strategy is setting the gold standard for transparency in our industry, enabled by the iLet's automation, which has been shown to improve clinical outcomes regardless of our users' baseline A1c or engagement with the product. Our pharmacy channel strategy is making durable insulin pumps more accessible for our users than they've ever been. Our digital solutions are delivering users, their caregivers, and their providers the information and support they need to generate the best outcomes possible on our product. Our product is breaking the mold of what has historically believed to be possible in durable pumping, and we're delivering financial results that we're proud of. But our work doesn't stop here. We're working to expand our capabilities to the broader automated insulin delivery market with Mint and with the bihormonal system; we're looking to redefine how people experience their diabetes and the outcomes they can achieve. This cohesive strategy is what defines our business and what we believe will drive our ability to succeed over the short, medium and long term. Stay tuned. With that, thank you all for joining today's call, and we'll now open the floor to Q&A.

Our first question comes from David Roman with Goldman Sachs.

This is Phil on for David. Want to start with the top line. Last year, you delivered north of 20% upside to your initial sales guidance for the year despite stronger pharmacy conversion than initially anticipated. As we think about the forecast for this year, given the increasingly recurring nature of the business, our model only contemplates pretty modest new patient growth to be able to hit the high end of your guidance. I guess, could you talk a bit more about the level of conservatism that's still in guidance moving forward, and any additional color you can give on the outlook for new patient starts embedded in this initial guidance?

Hey, Phil, this is Stephen. I appreciate your question. I don’t want to label the 2026 guidance as conservative, so I won't use that term. I'm not going to specify the exact number of new patient starts included in the guidance, but we are confident in achieving the guidance we've shared. One additional point regarding the revenue guidance is that when we experience significantly higher performance in the pharmacy channel, meaning a higher percentage of new patient starts being reimbursed through pharmacies, it can lead to a temporary setback in revenue. Therefore, we have to consider this in our revenue guidance, as we anticipate the possibility of exceeding expectations for new patient starts in the pharmacy channel, which in turn could create revenue challenges. We have taken this into account in our revenue projections for 2026.

Fair enough. The gross margin guidance for the year came in a little bit light of what we were expecting, given the underlying leverage in the back half of the year. Wondering how much of that maybe comes from your rate of pharmacy conversion versus the underlying direction of travel for underlying gross margins would be helpful.

The reason for our gross margin guidance is related to our need for confidence in the guidance we provide. If we see a significant increase in new patient starts growth from 2025 to 2026, this could result in a temporary revenue headwind and a short-term impact on our gross margin. In our pharmacy business model, we offer the iLet for free and generate approximately $450 in monthly recurring revenue from patients who continue using the product. If we exceed our guidance for pharmacy new patient starts in 2026, it could further affect our gross margin in the short term, which is why we are providing our gross margin guidance as it stands.

Our next question comes from Michael Polark with Wolfe Research.

I'm curious on the fourth quarter, just with all the focus on your starts performance of 5% sequentially. Have you developed a view as to what the pump market in the U.S. starts were up, how that performed Q-over-Q? Do you have a number of a chance, obviously, your peers are still mostly to report, I'm curious if you developed an opinion.

Yes, Mike, I appreciate the question. For the reasons that you stated, because our competitors haven't really published their earnings, we don't have a particular perspective on what our market share was in the fourth quarter and how that performed relative to Q3. So I'm sorry, I don't have a take on that yet. I'll wait to see our competitors' numbers.

Fair enough. For the follow-up, maybe about '26, I heard 20 new sales territories to be created, invested in, that's over 30% growth in territories. I know it will be done over the course of the year. I know you're not going to be too precise, but can you maybe comment 1H-2H centric, I think I'm interested in what the formal guidance has considered for the timing of those incremental territories.

Yes. Of course. The guidance is at least 20 territories we will be expanding by in 2026, and there will be a large expansion in the first half of the year. I don't want to say that there won't be an expansion at some level in the second half, but much of that expansion is in the first half of the year.

Our next question comes from Mathew Blackman with TD Cowen.

Can you hear me okay?

Yes, we got you, Mat.

I want to start by confirming that, if I'm mistaken, please correct me. It seems like the first quarter will experience a decline of around 14% compared to the fourth quarter of 2024. However, it appears that the first half of 2026 is expected to be slightly higher than 41% of the total revenue we observed in the first half of 2025. Did I understand that correctly? Let's begin with that.

I'm sorry, Mat, you cut out a bit on our end. I hope it’s not us, but could you repeat the second half of your question?

I think my headset cut out. So yes, let me do it again, I apologize. It sounded like your commentary for the first quarter was that it will be down more than I think the roughly 14% you were down in the first quarter of '25 versus the fourth quarter of '24, but then you expect the first half of 2026 should be modestly higher than the first half revenue you saw in 2025? Did I capture that commentary correctly?

Yes, you captured that correctly. There is seasonality in our business, particularly in the transition from Q4 to Q1. We anticipate a decrease in revenue and new patient starts from Q4 2025 to Q1 2026, which should be more significant than what we experienced from Q4 2024 to Q1 2025. This is largely due to specific product launches in Q4 2024, such as the Color iLet, that created substantial demand during that period and obscured traditional seasonality. Additionally, there was a notable increase in new patient starts through the pharmacy channel during that time, which we won't see again in the upcoming transition. Regarding revenue, we expect the first half of 2026 to be more heavily weighted compared to the first half of 2025, indicating that the proportion of revenue in the first half of 2025 will be lower than that in 2026.

Okay. I appreciate that. I guess the other question I wanted to ask I don't know if you have this handy, but even if just directionally thinking about the sales territory expansion in '26, is there a way to even roughly quantify how much of the addressable market you were able to cover in 2025? How much incremental the 20 territories would give you, again, even just directionally? And I guess, maybe most important, how much of a rate limiter do you think that's been in terms of iLet adoption?

Yes. All right. Well, another good question. I think that the right number of territories in the U.S. for an insulin pump company, and this is kind of a wide range because I want to reserve the right to change as we sort of grow here is somewhere between 120 to 180 sales territories. That's like when you have the level of sort of adoption that, in particular, like, let's say, our patch pump competitor has, I think it's probably on the higher end of that. But the point is, I think, in order to cover all of the endocrinologists and high-prescribing primary care doctors in the country, you need somewhere between 120 to 180. And so for most of last year, as you know, we had 63 territories. So obviously, the simple math is we had 1/2 to 1/3 of the country covered. Now the reality is that our territories tended to be a little wider or a little larger. So we are probably covering actually more than 33% to 50% of the entire country, but that gives you a directional understanding of how much of the country generally we were sort of addressing and what 20 incremental territories does.

Our next question comes from Jon Block with Stifel.

Maybe just to pick up on that thread or to pull that thread a little bit. Maybe you guys can just talk to why are 20 reps the right number, right? It takes you to the low 80s. But Stephen, you just talked about a number 120 plus. And when I think about exiting 2026, I mean, you're that much closer to Mint, you're that much closer to type 2 label as a possibility. So maybe just talk about why the organization with the balance sheet you have wouldn't push a little bit harder and faster just when we think about the number of reps that you're onloading or plan to unload this year.

Yes, that's a great question. I'll start, and Sean can jump in if he wants to add more. We definitely have confidence in the product we're offering. Expanding is a key goal for the company, as we have not yet reached full awareness among doctors about the iLet and the positive clinical outcomes for their patients that come from it. While I mentioned we'll expand by at least 20 reps, I don't want to suggest that's a strict limit for our growth in 2026. Additionally, we expect to introduce more products in the future, as highlighted in our R&D pipeline, and Sean mentioned these in his remarks. This future product anticipation is also a part of our plan for expanding the sales force.

I want to emphasize that we always believe in being deliberate. It’s unrealistic to launch a product, hire 200 people, and expect your manufacturing line to keep up without the necessary systems in place to scale with the number of representatives. There are numerous opportunities for things to go wrong. Beta Bionics is focused on the long-term, and we don’t need to conquer the market on the first day. We will approach this thoughtfully and conservatively, ensuring that we get it right.

Great. That's helpful. Maybe just a shift in I guess I'll go there. There is this hypoglycemia concerns or chatter, and it's out there. Maybe it's more Wall Street than Main Street, et cetera. But Sean, any data or metrics that you plan to share with the investment community that might be forthcoming? And then maybe just to add on to that, I'm curious, in the real world or out in the field, what are your reps hearing or any blowback and has that evolved in the past 3 or 6 months?

Yes, that's a fair question. First, I recommend checking our current corporate presentation on the website, as it addresses this topic. Regarding the iLet, we have all our data in our cloud. I want to highlight a few points. Firstly, our findings are consistent with our clinical trial, and we're observing the same or even slightly lower rates of hypoglycemia compared to that trial, which were deemed acceptable at the time. Secondly, these rates of hypoglycemia appear to be about one-third to one-fourth of the ADA guidelines, meaning we are exceeding that benchmark by four times. While we recognize the narrative surrounding this issue, we do not observe any significant hypoglycemia problems with the iLet. It is true that individuals with diabetes can experience lows, but this can occur with any system. In fact, severe hypoglycemic events are significantly more prevalent outside of the iLet and other automated insulin delivery systems. I want to discuss an aspect I’ve referred to before, which I term the Tesla effect. Car accidents happen regularly, but when a Tesla is involved, it makes national headlines. The data suggests that Teslas are safer than typical drivers, particularly with their full self-driving capability, yet any incident receives extensive media attention. We believe a similar dynamic exists with the iLet. Our system provides an unprecedented level of automation for insulin pumps, requiring very little action from the user. However, lows can still occur. When someone selects their dose and goes for a walk and experiences a low, they may think it’s a personal error. In contrast, if a user utilizes the iLet without selecting their dose and then experiences a low, they may blame the device. I believe this perception is natural, especially as Beta Bionics pushes the boundaries of automation in insulin delivery. Nonetheless, I want to reiterate that all the data we have published and are aware of do not indicate any disproportionate hypoglycemia issues with the iLet.

Our next question comes from Matthew O'Brien with Piper Sandler.

Congratulations on achieving $100 million in sales so quickly. I want to follow up on Phil's question regarding the guidance. Even at the midpoint of the range, the dollar figure for 2026 is actually lower than that for 2025, despite the additional revenue from pharmacy patients in 2026. Is there anything else we should consider that might be impacting this guidance? Could it be related to the warning letter, increased competition, or higher attrition due to the expansion in pharmacy? Please clarify how this initial guidance compares to the absolute figures from last year.

Matt, good question. And I appreciate the congrats. In short, no, there's no odd characteristics of the competitive landscape that we're particularly afraid of. We're not seeing any elements of our pharmacy business model where there's attrition that's trending any different than what we've seen. And by the way, we've had great retention on the product. We're just setting a guide that we have confidence in and we feel good about.

The gross margin performance in Q4 was impressive, and the figures you provided for the upcoming range for 2026 suggest a significant decline in the first half of this year. I'm curious if there are any plans for the second half that might impact this, like potential Mint sales. Specifically regarding Mint, do you still anticipate being the second entrant in the patch pump market?

I'll let you answer the question about Mint. But yes, as it relates to the question, can you take the Mint part?

Yes, sure. And to be clear, when he said you can take the question, I don't think you meant you, I think you meant me. All right. So on Mint, I don't recall exactly the statements we've made in the past on the order of release. And I frankly, Matt, don't remember the exact details of when all of our competitors are currently saying their products will come to market. What we're doing today is reiterating our timeline of an unconstrained launch by the end of '27. So that's what I'll commit to. But I'm not going to call our shot on exactly what position that puts us in because, frankly, we don't have visibility to what others are doing. And thanks for the eye-popping comment though. Stephen?

Yes. And in terms of the gross margin guide for the year, yes, obviously, 59% in Q4 is a great number. I think something notable about Q4 gross margin was that we didn't see a big uptick in the percentage of pharmacy new patient starts from Q3 to Q4 2025. But remembering that, that particular metric for us is only so predictable. So obviously, we do guide to that metric in 2026. But in the event that it outperforms our expectations, which it has the possibility to do, we have to be ready for a short-term headwind on our gross margin profile. And so hence, that's embedded in the guidance. But there's nothing competitive about the product or there's no like new problem or they're not seeing an uptick in warranty rates or anything of that nature. It's just, again, simply us being careful in the event that a particular metric outperforms what we've communicated.

Our next question comes from Mike Kratky with Leerink Partners.

Maybe just to start, now that we're more than halfway through the first quarter, can you share any qualitative or quantitative commentary around what you've seen so far year-to-date in terms of new starts and if that's aligned with your expectations on seasonality and your outlook for the sequence from 4Q to 1Q?

Yes, I’ll reiterate something I've already mentioned, and I appreciate your question. Regarding the first quarter, there is indeed seasonality in the insulin pump business. The most notable change occurs from the fourth quarter to the first quarter, so you should anticipate a decrease in revenue and new patient starts from Q4 2025 to Q1 2026. This reduction in new patient starts is expected to be greater than what we experienced last year. Last year, the decrease was 6% due to factors I've discussed related to new product launches and shifts in pharmacy adoption, and we anticipate this year's reduction to exceed that 6%.

Understood. And just a follow-up. I think one thing that stood out in the guidance in that 36% to 38% expected pharmacy mix. So to get to the upper end of that range exiting this year in the low 30s, is it fair to think that you could be above 40%? And what needs to happen in order to achieve that?

Yes. I don’t want to suggest that we will exceed our guidance. We set the guidance at 36% to 38% for a reason. However, it is possible for us to outperform that. First, we need the PBM agreements, and we have coverage for over 80% of all lives in the country under such agreements, which is mostly settled. Next, we need to establish agreements with the health plans linked to those PBMs. This is where much of the work remains to grow our pharmacy adoption from its current state to becoming mainly a pharmacy reimbursed product. Regarding specifics, we are seeing growth in some Medicaid contracts and programs, which we can expand further across states. We also need underlying agreements with plans that are already tied to the PBM contracts we possess. So, it is definitely within reach for us to exceed our guidance.

I'll remind everybody that these things tend to be a little more concentrated in the first half of the year. They occur throughout the year, but there is usually a heavier occurrence in the first half.

Our next question comes from Richard Newitter with Truth Securities.

This is Felipe on for Rich. I guess just a follow-up on Mint, you guys are clearly guiding to a step-up of CapEx spend for the platform and investing. So I'm just wondering if you could maybe just give any update on where you are at on the checklist before submission. Any color would be helpful.

Yes. Sorry, Felipe, I don't think we're going to go beyond what we've said in prepared remarks in terms of exact status on Mint at this point. I'm sorry.

No, no problem. I have a follow-up regarding pharmacy. You have several strong competitors who are beginning to advance in the market. I'm curious if you are noticing any effects on your contract discussions with PBMs. Also, if there are more affordable durable pump options available, how might that affect your competitive position moving forward?

I'd like to start this conversation and maybe you can provide some insight, Stephen. The discussions are changing a bit, and you're correct that there are more durable pump companies now coming forward. From my point of view, this is a positive development as it sets the expectation for how the market operates. Beta Bionics initiated this discussion and we were quite successful in doing so. With more companies joining the conversation, it creates a significant wave of momentum that will benefit the entire industry. If pharmacy can serve as a competitive advantage, we welcome that. However, the reality is that this is an enhanced business model which allows these companies to function more effectively and results in a better experience for our users. We take pride in having led this initiative, and we're pleased to see the growing momentum in that direction. That's my perspective, but Stephen, do you have anything to add?

I think well said.

Our next question comes from Jeff Johnson with Baird.

Returning to the question about territory, I understand there have been several inquiries regarding this. From the metrics we track, it seems you might have hired around 40 new sales representatives covering approximately 20 territories in the past few months. However, our visibility on this matter is not entirely clear. Sean, I would like to get your insights on how much of this hiring was for backfilling positions. We've noticed that 1 or 2 of your representatives have left over the past year and a half, suggesting there may have been some turnover. I'm curious to know how much of the recent hiring was to replace those representatives versus expanding into new territories.

Yes, Jeff, thanks for the question. I'm not going to comment on exactly how many people we've hired recently, just not going to do it. What I will say is we are always hiring backfills at some level, in any group of like I said, 63 territories, 126 people, or whatever that is, you're going to have turnover for multiple reasons, some for performance, some for other jobs that were offered what have you, and you're always going to be backfilling. So there is some of that going on at all times, but I'm not going to comment on exactly how many we may have hired outside of that group or even in that group recently.

Yes, I understand. Stephen, to clarify, you mentioned a $1 million pull forward in the pharmacy channel from Q1 to Q4. I recall a conversation about our 2026 model where it seemed there might be an additional $10 million to $12 million in stocking for 2026, mainly in supplies and some in pumps. Is that still an accurate figure to consider as part of your revenue guidance for 2026? How does that $10 million to $12 million compare to the total stocking you experienced in 2025?

I don't think I've ever shared a specific figure regarding the stocking dynamics for 2026 in dollar terms. So, the $10 million to $12 million estimation isn’t accurate. I prefer not to comment further on that number.

Our next question comes from Travis Steed with Bank of America Securities.

I guess I just want to make sure we've got the street models in the right place. I see $27 million in street models for Q1. Taking all the comments you've given, is that kind of the right place to be? Or does that need to move one way or the other?

Yes, that's directionally accurate.

And then gross margin, I think that 54% in Q1. Is that the right place to be roughly as well?

I don't want to comment specifically on any quarterly guidance as it relates to margin.

And there were some comments on stepping up OpEx as a percent of sales in '26. Just wanted to try to think about how much of that R&D, sales and marketing versus G&A? And kind of how much of that pipeline versus kind of sales force expansion? And kind of any color on how that rolls out.

Yes, I'm not going to provide specific numbers on how much to increase sales for each of those line items. However, the most significant increases in operating expenses will come from sales and marketing, primarily due to the expansion of our sales force. We will also see a notable rise in marketing investments, particularly in direct-to-consumer advertising and branding initiatives aimed at patients. Additionally, there will be an increase in research and development expenses related to various projects, including the bihormonal program and Mint, resulting in a significant rise in R&D expenses in 2026, which will be around 25%. General and administrative expenses will see a slight increase.

Our next question comes from Frank Takkinen with Lake Street Capital Markets.

I have 1 follow-up on pharmacy channel starts related to the 36% to 38% guidance. How should we think about that cadencing? Is there an element of DME having more pronounced seasonality in Q1, potentially resulting in that pharmacy channel start number actually starting higher in Q1 and then kind of staying flat throughout the year? Or is that not a phenomenon that occurs?

Yes. You want me to take that? Sure. Yes. That's a really good question. Unfortunately, it layers a couple of things on top of one another that make it a little bit hard to answer. So let me talk about seasonality for a quick moment. Historically, seasonality in DME was a question of early in the year, you have this big co-pay; eventually, you start meeting your co-pays, and it gets cheaper to get a pump. So people were waiting to get that pump until later in the year. Now with pharmacy being available all year round with certain competitors, we think that the waiting aspect has gone away. Instead of waiting for one pump, you would just get a different pump right now. So that decreases the vast increases at the end of the year that we see. However, and this is associated with your question, Q1, you're still going to see a drop because you do still see resets of deductibles. So people who would have come to you in, let's say, December and been able to get the pump for relatively zero out-of-pocket costs may, in January, have a higher out-of-pocket cost. So that's why the pronounced drop in January. And I'm losing my question.

Yes. I guess, Frank, does that make sense?

Yes, that's somewhat helpful. I think the concept of pharmacy starting at a higher percentage of total starts in Q1 and then remaining flat is what I'm getting at. How does the pharmacy start trend throughout the year?

Thanks for the reminder, Frank. Pharmacy coverage increases more in the first half of the year than in the second half. Additionally, it's likely that a higher percentage in Q1 will go through a pharmacy due to the DME decisions being made. These two factors contribute to the situation. However, it's not entirely unlike the seasonality we've discussed before, as multiple factors are at play, making it difficult to predict. But directionally, you should expect to see a higher impact from these factors. Hopefully, that makes sense.

Yes, that's great. And then just one quick follow-up. Just can you talk about the Phase IIb a little bit more? I heard the prepared remarks, but just maybe what are you looking for exactly in that Phase IIb before kicking off the pivotal?

Yes. From Beta Bionics side, the Phase IIb is primarily about confidence that when we get into the pivotal, we're going to have success. Over the course of Beta Bionics history with the bihormonal trial, and this has been true all the way from, I don't know, 2007 until now, all of the trials that we've run, all of the formative trials that we run that we now call IIa trials were very, very small. And we've published a bunch of in the past, I won't rehash it now. It can be very difficult to extrapolate the results of a several hundred patient year-long clinical trial from a very short small-end trial. So it's a bit of a diligence item to walk before you run and just step up and make sure we're not going to get to an enormous trial and really fail. So that's primarily what that's about. And the agency would have slightly different words for that. But I think at the end of the day, it would be similar reasoning.

Our next question comes from Danielle Antalffy with UBS.

Just a question here on type 2 and less about the timeline for approval, et cetera. But just at a high level, how you guys think about that market as you already see adoption of iLet in type 2. We hear at the very pump for type 2 patients. So go-to-market strategy in that patient population probably a little bit different than type 1, particularly given where these patients are managed. So I'm just curious about how you guys are thinking about that ahead of a potential FDA approval there and sort of really getting after that.

Yes, that's a great question, Danielle. You've highlighted an important point regarding where patients are managed. In the endocrinology field, healthcare providers are quite knowledgeable about the iLet and other products, and they understand how to utilize them effectively. We're observing this across various devices. However, in primary care, that may not be the case. It's crucial that we have a type 2 indication in place before we engage significantly in the primary care market, especially since we currently do not have a primary care sales force. Our approach will be somewhat different, but I agree that having a type 2 indication is absolutely vital for the reasons you mentioned. We're fully aware of that situation.

And Danielle, thanks for launching coverage on us. Great work.

Our next question comes from Jeffrey Cohen with Ladenburg Thalmann & Company.

I wonder if you could dive into R&D a little bit as far as '26 with regard to cadence throughout the year. I know you had called out just an incremental increase across the board.

I don't want to speak specifically about the timing of the investments you'll see in R&D. Generally, you can expect consistent investments throughout the year. There may be some variability when we start trials or similar activities, but I wouldn't anticipate anything being significantly weighted in one quarter compared to another.

That's helpful. And you called out maybe taking some pricing in the pharmacy channel. Any plans for the DME channel? Or what are you expecting on pricing throughout the year?

Yes. As mentioned, we implemented a small price increase in pharmacy for our supply revenue and made no changes to your modeling for DME revenue price.

Thank you. This concludes the conference. Thank you for your participation. You may now disconnect.