Ladies and gentlemen, welcome to the DexCom, Inc. First Quarter 2026 Earnings Release Conference Call. My name is Abby, and I will be your operator for today's call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. During the question-and-answer session, if you have a question, please press star one on your touch-tone phone. As a reminder, the conference is being recorded. I will now turn the call over to Sean Christensen, senior vice president of finance and investor relations. Mr. Christensen, you may begin.

Thank you, operator, and welcome to DexCom, Inc.'s first quarter 2026 earnings call. Our agenda begins with Jacob Steven Leach, DexCom, Inc.'s President and CEO, who will summarize our recent highlights and ongoing strategic initiatives, followed by a financial review and outlook from Jereme M. 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 to everyone participating today. Please note that there are also slides available related to our first quarter 2026 performance on the DexCom, Inc. Investor Relations website on the Events and Presentations page. With that, let us review our safe harbor statement. Some of the statements we will make on today's call may constitute forward-looking statements. These statements reflect management's intentions, beliefs, and expectations about future events, strategies, competition, products, operating plans, and performance. All forward-looking statements included on this call are made as of the date hereof, based on information currently available to DexCom, Inc., 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, Inc.'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 on this call are presented on a non-GAAP basis. This non-GAAP information should not be considered in isolation, or as a substitute for results or superior to results prepared in accordance with GAAP. Please refer to the tables in our earnings release and the slides accompanying our first quarter 2026 earnings call for a reconciliation of these measures to their most directly comparable GAAP financial measure. Now I will turn it over to Jake.

Thank you, Sean, and thank you everyone for joining us. Today, we reported first quarter revenue growth of 15% compared to 2025 and organic revenue growth of 12%. This reflected strong demand for DexCom, Inc. CGM globally, as we benefited from broader access, new product launches, and continued active base growth. We also continued to drive operational improvement over the course of the quarter, which included an outstanding launch of G7 15-day, improvements in field performance across all of our products, a good response to our MyDexcom account and enhanced web-based service and support, and continued progress on new product initiatives. This helped us deliver solid margin performance, cash flow generation, and earnings for Q1. In the U.S., we are generating good momentum across the spectrum of diabetes care. This was especially pronounced across the categories of type 2 diabetes where our expanded reach and product momentum led to strong first-quarter share gains, with the biggest increase coming from people with type 2 diabetes who are not on insulin. This performance reflects growing clinical awareness of the greater than 6 million non-insulin lives currently covered for DexCom, Inc. CGM across the three largest PBMs. Our team has done a great job driving this awareness in the field, and this message will become even stronger as type 2 coverage continues to build. Along those lines, I am excited to announce another recent reimbursement win for the commercial type 2 non-insulin population. As of this summer, Prime Therapeutics will begin covering DexCom, Inc. CGM for all people with diabetes. This puts us on track to have commercial coverage for more than 7 million type 2 non-insulin lives by the end of this year. It is also another clear demonstration that payers are recognizing the value of DexCom, Inc. CGM in driving health and economic outcomes for this population. While this is a great start, we will not be happy until we have coverage for all people with diabetes. And the largest single driver towards that goal would be CMS coverage for the type 2 non-insulin population, as around half of those with type 2 diabetes not using insulin sit within the Medicare population. As we have said before, we continue to view this decision as only a matter of time. In recent months, we have seen upgraded recommendations in the ADA Standards of Care recommending CGM use for all people with diabetes, and the level of real-world evidence for CGM-driven health outcomes continues to grow. As one example, at ATTD, we recently provided a full readout of our 12-month type 2 non-insulin registry data. In this real-world study, DexCom, Inc. CGM delivered a statistically significant A1c reduction over a one-year period across a broad population of people with type 2 diabetes with strong utilization. These are the types of outcomes that we are consistently demonstrating across this group, which gives us high confidence that the coverage will continue to grow. And to further strengthen our case, we are currently completing our randomized control trial for people with type 2 diabetes who are not on insulin. Similar to how our DIaMonD and MOBILE RCTs reshaped clinical perspectives for those using insulin, we expect this trial can become the defining study for the non-insulin population. This readout will also form the cornerstone of our evidence base for any global payer that is waiting to see RCT-level data. We look forward to sharing a full readout of this study with you at the ADA's 2026 Scientific Sessions in a few weeks. As I mentioned earlier, during the first quarter, we also expanded the launch of our DexCom, Inc. G7 15-day system across all channels in the U.S. This broad rollout has been very well received, and most importantly, the feedback from customers and physicians has been excellent. The positive response goes well beyond the longer wear time. One of the most consistent points of feedback is around the new sensor algorithm which delivers our highest level of accuracy to date. Combined, we believe these updates can attract new customers into our ecosystem. And we are now working to build broader awareness of DexCom, Inc. G7 15-day in the market. We are also excited for more of our existing base to shift to this product so they can experience this longer wear time and improved performance firsthand. Of course, we are not stopping there. We are always working to improve the performance across our product portfolio. As one example, we recently began May manufacturing with our new patch technology that received FDA clearance earlier this year. We expect this upgraded adhesive to strengthen sensor survivability across our product portfolio and improve wear experience for our customers. We expect this new technology to reach the market in the coming weeks. We also have several software updates planned, including a complete redesign of Stello. In the coming weeks, we will introduce this new experience to all customers, which will offer a more consumer-friendly feel, more AI-driven personalized insights, and additional food logging capabilities including detailed macronutrient information. For our G Series products, we are currently expanding access within our pilot KOLs for our DexCom, Inc. Smart Basal feature. This personalized dosing module has the potential to reinvent basal insulin management by driving more accurate insulin titration, accelerating the time needed to reach optimal dose, and delivering improved outcomes for customers and physicians. Each of these updates were built specifically around customer feedback. We will always keep the customer at the center of future product innovation, which we believe can help us build an ecosystem that is more personalized and engaging for all customers. Our international markets provide a great example of what product personalization can do for our business. By offering a portfolio of products that can be tailored to each market and reimbursement system, we have been able to consistently secure broader access and drive growth within these regions. Our first quarter results were another great demonstration of this story. Once again, we delivered some of our strongest growth in markets where we have established broader access in recent quarters. Even in some of our largest markets, recent reimbursement wins have helped us reach a new cohort of customers and drive greater share. We will continue to build on this international growth strategy, including through the launch of new products. In 2026, this will include the international launch of Stello, as well as a new CGM system that is designed to further extend our market reach. We look forward to going into greater detail on these product launches, software updates, and more at our upcoming May Investor Day. You may recall that earlier this year, I laid out my three priorities for DexCom, Inc.'s next phase of growth: number one, be the premier glucose sensing solution for all; number two, set the standard for customer experience; and three, expand international market share. At our Investor Day, I am looking forward to exploring each of these topics in further detail as we share our vision for DexCom, Inc.'s next chapter. For those joining in person, we are also planning to visit our Mesa manufacturing facility to provide a glimpse into our original high-scale CGM manufacturing location and the level of precision that this work requires. We look forward to showcasing the quality and automation that we have built, and that we feel positions us well to lead the CGM category into the future. We hope to see you there. With that, I will turn it over to Jereme.

Thank you, Jake. As a reminder, unless otherwise noted, the financial measures presented today will be discussed on a non-GAAP basis. Reconciliations to GAAP can be found in today's earnings release as well as the slide deck on our IR website. For the first quarter of 2026, we reported worldwide revenue of $1.19 billion compared to $1.04 billion for 2025, representing growth of 15% on a reported basis and 12% on an organic basis. As a reminder, our definition of organic revenue excludes the impact of foreign exchange, in addition to non-CGM revenue acquired or divested in the trailing 12 months. U.S. revenue totaled $832 million for the first quarter, compared to $751 million in 2025, representing an increase of 11%. As Jake mentioned, in the U.S., we saw momentum build across the spectrum of diabetes care in the first quarter. This reflected both growing awareness of the broader type 2 coverage and the launch of our G7 15-day product, which has generated a lot of excitement in the market. We have been very encouraged by the initial 15-day uptake and the market feedback, and look forward to seeing the active base continue to transition as we progress over the course of the year. International revenue grew 26%, totaling $360 million in the first quarter. International organic revenue growth was 17% for the first quarter. Our international growth was widespread across our core markets this quarter, with some of the largest increases coming from geographies where we recently expanded access, such as France and Canada. Our first quarter gross profit was $757.4 million, or 63.5% of revenue, compared to 57.5% of revenue in 2025. We are excited by our progress on gross margin performance, which was up significantly on a year-over-year basis and flat compared to the fourth quarter despite our typical Q1 seasonality. This performance reflected strong execution across our operations and supply chain as we delivered continued manufacturing efficiencies, more normalized freight costs as we have improved our global inventory levels, and initial benefit from the switchover to G7 15-day. Operating expenses were $493 million for Q1 2026 compared to $453.1 million in 2025. Operating income was $264.4 million, or 22.2% of revenue in 2026, compared to $143.1 million, or 13.8% of revenue in the same quarter of 2025. We are really proud of the team and the discipline demonstrated over the course of the quarter, both on operations but also all of the support teams that worked tirelessly for our customers. This is a demonstration of the ability to deliver for our customers, our employees, and our shareholders. Adjusted EBITDA was $364.5 million, or 36% of revenue for the first quarter, compared to $230.4 million, or 22.2% of revenue for 2025. Net income for the first quarter was $216.3 million, or $0.56 per share, representing 75% growth over 2025. We remain in a great financial position, closing the quarter with approximately $2.4 billion of cash and cash equivalents. This was up over $400 million compared to year-end 2025, which reflected our significant free cash flow performance in the first quarter. This cash balance, along with our growing free cash flow profile, continues to provide us with a lot of flexibility as we assess ongoing capital allocation opportunities. Turning to guidance, we are reaffirming our prior revenue guidance of $5.16 billion to $5.20 billion, representing growth of 11% to 13% for the year. For margins, we are reiterating our previous full-year non-GAAP gross profit margin guidance of 63% to 64%, and increasing our non-GAAP operating profit margin guidance and adjusted EBITDA margin guidance to 23% to 23.5% and 31% to 31.5%, respectively. While our Q1 gross margin performance leaves us tracking well relative to our current guidance, we left gross margin guidance unchanged to account for the current geopolitical environment, including uncertainties with fuel prices and shipping routes. Regardless, our strong cost control over the quarter positioned us to raise our full-year non-GAAP operating profit and adjusted EBITDA margin guidance. With that, we will now open the call for questions.

Thank you, Jereme. We will now open the call for questions. As a reminder, we ask our audience to limit themselves to only one question at a time and then reenter the queue if necessary. Operator, please provide the Q&A instructions.

Thank you. We will now begin the question-and-answer session. If you have a question, please press 1 on your touch-tone phone. If you wish to be removed from the queue, press 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, please press 1. Our first question comes from the line of David Roman with Goldman Sachs. Your line is open.

Thank you. Good afternoon. I appreciate your taking the question here. I guess when we look at the totality of the U.S. market now with two major players having reported, it does look like the market is in a period of slower growth. And as your competitor noted, that may be due to no major coverage expansion or new indications. So could you maybe just give us your perspective on how you are seeing the U.S. market unfold here? What is assumed in your guidance? And any details you can provide, whether it is new patient starts or other metrics, to corroborate the health of both the U.S. market and your business would be helpful as we think about the balance of the year?

Yes, thanks, David, for the question. If you take a step back and look at the U.S. market, there is still pretty significant opportunity. If we think about it, about 30% penetration into the covered lives is where we are as a category. That means that only one in three people that have coverage for CGM are using it, so the other two thirds is out there today, and that is before we talk about any expanded coverage. So I think as we look at new patients, we are always striving for a record number of new patients every quarter, and this quarter came in in the U.S. very close to a record, and we set a global record number of patients across the entire globe. We feel like there is a lot of strength in the category, and if we just focus on the U.S., there is still a long runway to go. We mentioned a new PBM now covering CGM by the end of the year that is going to add another million lives to that non-insulin using population, and when you think about that, that provides a lot of opportunity. Frankly, our team is getting much better at targeting this new coverage, as we saw some of the share gains that we had in this group, and so I think we still see a solid rate of growth going forward for the U.S.

Our next question comes from the line of Travis Steed with Bank of America. Your line is open.

I will start maybe asking on 15-day, kind of a two-part on 15-day. When you think about the better algorithm and the better customer experiences, is that something where maybe that product helps new starts as it launches? And then also maybe talk about the margin impact. I know you left gross margin guide unchanged, so how much inflation are you baking in? I am curious how to think about the margin impact of 15-day rollout versus the inflationary impact on margins.

Sure. I will take the part around the product and the starts, and then Jereme will fill in with the margin perspective. I absolutely believe that the 15-day product is helping drive the momentum that we are seeing. We did see performance improvements across our entire portfolio when it comes to the reliability of our product, but when you think about the 15-day in particular, it has that new algorithm and the extended wear, and that is something that patients very much value. The convenience of the longer wear, and then the algorithm, the performance and reliability of that product, is really driving new starts as well as conversions over to it. We are making good progress towards converting the base over to that product. We estimate nearly 50% will be converted by the end of the year over to this new 15-day product. Jereme, you want to fill in on margin?

Yes. You are exactly right, Travis. We kept gross margin guidance on hold because of the impact of oil on both fuels and resins, and obviously resins play a large part in our product as well. There is probably about 50 to 100 basis points of potential risk associated with fuels and resins over the course of the year. Absent that, we would be raising the gross margin guidance. You can see in the first quarter we had really solid performance. Typically, we step back from Q4 into Q1, and with some of the work that we have done over the course of the year, that was flat coming into Q1, which should give you a lot of confidence that the work we have been putting in place to help improve throughput, quality, and yields is really starting to play out. So think about it that way: about 50 to 100 basis points. If oil prices come back down to normal, we will certainly revisit it and revise at that point, but right now, we have a placeholder for that. The underlying performance of the business is outperforming expectations as we got into the year.

Our next question comes from the line of Larry Biegelsen with Wells Fargo. Your line is open.

Hi, good afternoon. Thanks for taking the questions. This is Simran on for Larry. I just wanted to ask on type 2 non-insulin. We heard the RCT presentation is slated for ADA. Could we see a publication before ADA, and do you plan to share any color on the trial results at the Investor Day? And maybe just a broader question on type 2 non-insulin: any color on how we should think about this unlocking or re-catalyzing the next leg of growth in the U.S. CGM market, maybe even stepping back to that strong double-digit growth that you have talked about in the past?

Thanks for the question. Speaking of the randomized control trial for the non-insulin using population, we are planning to do the full readout at ADA, and we are anticipating results there are going to be similar to what we have seen when we look at our registry data and all of the other data that we generated in this population—really significant improvements in the glucose outcomes for these folks that, frankly, are not usually measuring glucose in any way. Many of them are not taking fingersticks. When you provide them with real-time feedback from our CGM, they are making the changes, the behavior modifications, and learning about how to better manage their diabetes, and therefore getting the A1c reduction, which is what that study is powered for. We do not plan on publishing before the readout. It will be in a major publication, but the readout at ADA will be the first time we do the readout. As we think about the unlocking of coverage, we have both continued unlocking of commercial coverage and then, obviously, this large population of non-insulin treated folks that sit in Medicare. It has the potential to really provide durable growth for a long time in the U.S. when you think about that opportunity. We are going to continue to advance access for these folks. As we think about the field and how we are building out our products and serving this population, we are going to continue to build products that help us grow the active user base. We think about new patients, but it is also retention and utilization in these populations. The more we do with the product and the service and the experience, the more that active base is going to grow.

Our next question comes from the line of Robbie Marcus with JPMorgan. Your line is open.

Great. Thanks for taking the questions. You said it was close to a record new patient start, and I think that has been the language the past four quarters. So we are now a full year without a record new patient start. If I remember on the fourth-quarter call, you said the top end of the sales guide assumed a record and the bottom end assumed no new record patient starts. So a two-part question. One, do you feel like the lower end is maybe more appropriate if we do not see a record? And two, do you think you can maintain the current sales growth if you do not put up a new record in the future?

Sure. Thanks, Robbie. Let me be clear. Globally, we did have a record new patient quarter this quarter. So globally, it was a record. In the U.S., it was close to a record. We are seeing momentum building behind 15-day, and sequentially it was an improvement from Q4. We also took share both in the U.S. and OUS. As you talk about the full year, the low end would be not records globally, the high end would be records globally. We are tracking well, given the first quarter is a record, and that gives you some context. For the year, our goal is to continue to unlock coverage. We talked about Prime Therapeutics in the U.S. commercial space. Outside the U.S., we also have plans to unlock coverage over the course of the year. Our expectation is to continue to unlock that coverage and help drive the growth algorithm. We have a lot of catalysts over the course of the year: momentum building with G7 15-day, Stello launching with a new app experience, bringing Stello outside the U.S., and looking at 15-day opportunities outside the U.S. Given what we have seen in the U.S. with the performance of 15-day, we are excited to bring that outside the U.S. We also expect progress on CMS coverage unlock timing. It starts with a record globally in the quarter, and we delivered that.

Our next question comes from the line of Matt Taylor with Jefferies. Your line is open.

Hi, thanks for taking the question. I wanted to double click on the CMS coverage. Your competitor said they are not going to call the month, basically implying it could happen soon. I know you do not know exactly when it is going to happen, but what are your thoughts on whether that could come before the usual process of going through the RCT and submitting your application? What is the range of outcomes for when that could happen, you think?

Thanks for the question, Matt. At this point in time, the RCT may not be required for that CMS coverage. In my conversations with the folks at CMS, it is very clear that they understand the benefit of CGM for this category. It is hard to estimate exactly when this coverage is going to come, but as we have said before, it is really just a matter of time. When that coverage does come, it provides a great opportunity for durable growth and continued patient impact. This product provides significant benefits for all people with diabetes, and as I said in my prepared remarks, we are not going to be happy until everybody with diabetes has coverage for this product. We are looking for that globally. Again, it is hard to call exactly, but we do know that the benefits are clear, and we look forward to the decision.

Our next question comes from the line of Jeff Johnson with Baird. Your line is open.

Thank you. Good afternoon, guys. Jereme, you talked about some of the coverage unlocks outside the U.S. Are you inching closer? Is there progress or any even body language or gut feel on moving towards some basal coverage in some of the other bigger markets where we do not have it outside the U.S. at this point? Any update there? And was there anything one-time—timing, tender—anything that helped that 17% OUS constant currency organic growth rate, anything we should think about as a tough comp for next year in 1Q or anything like that? Thanks.

Thanks, Jeff. Outside the U.S., there is a mounting body of evidence that continues to grow. We have had MOBILE and other studies come out, and the dialogue with a lot of the international bodies has continued to progress in a good way. We are continuing to look to unlock basal coverage. We are in lots of different conversations about how to do so, whether it is payers or tenders. There is a lot moving by country, and I would expect to have wins in pockets over the course of the year. We will give updates as they come. In markets where basal already exists, our type 2 evidence will help keep moving there. As Jake mentioned, around the world, we are not going to stop until everybody has access. In terms of any one-timers, no, there really was not. The way tenders work, folks use this product repeatedly. You do not use it once and then move away. Tenders typically allocate product for some time because people use the product year-round. We have been competing in tenders for some time and winning quite a few. Our product portfolio approach has gotten into tenders that may have been exclusive with a competitor and are now dual formulary, and that has happened in many cases we have seen. It is our opportunity to get into these markets with a product portfolio that makes sense and take share, and you are seeing that taking place.

Our next question comes from the line of Marie Thibault with BTIG. Your line is open.

Thanks for taking the questions this evening. I wanted to drill down a little bit more on your comments about the share gains in the type 2 population this quarter. I wanted to understand how sustainable some of that momentum feels to you out in the field, what you have seen since the quarter ended, and how much of it you think is linked to the 15-day launch versus sustainable momentum from your salesforce and execution?

Yes. There are a few things we have seen playing out, which I think are all good things around share taking and the outlook longer term. First and foremost, we pay a lot of attention to customer satisfaction, and our NPS scores have jumped up with 15-day. We saw that playing out in the first quarter. That is sustainable. The customer experience is moving in the right direction, and that is an exciting moment for us. Certainly, the launch of 15-day helped. We had opportunities to extend wear length, and we have taken advantage of those, and the new algorithm has wowed customers. When you have a product like that in the market, plus coverage wins over time with low copays, it is providing an opportunity to get in front of physicians, demonstrate the value of the product, and make sure physicians know we have the lowest copays and the most coverage across the board. We are not going to stop until we win in these categories. Given we have the best coverage, I do not think there is any reason we would not look to do so. Our opportunity is to continue to take share and continue to take share until we are market leaders in every category. We are already market leaders in some categories, and we have some room to go in categories that historically did not have coverage. Having the 15-day product, having the customer satisfaction scores moving, and having the best coverage all bode well to taking share for some time to come.

What I would add is, when you think about the long run and as we are developing this product portfolio for different categories of patients, a feature like our Smart Basal is really designed to change the experience around going onto basal insulin. We are still seeing the largest category of new patients in the type 2 insulin-using population, both the IIT and the basal. With basal penetration still around 20% to 25% as a category, there is still a lot of opportunity for us to grow and take share there. That system is really designed to make the experience that both users and physicians are looking for, driving outcomes and ease of use.

Our next question comes from the line of Matthew O'Brien with Piper Sandler. Your line is open.

Good afternoon. This is Anna on for Matt. Thanks for taking the questions. There is always a focus on new patient starts, but I also wanted to ask on the retention side what trends you are seeing today in the domestic market and how that contributed to the results in the quarter. How do you expect this metric to evolve from here?

Hey, Anna. When we think about retention, it has been fairly consistent within a band. We look at both retention and utilization because both really help drive the active base. We have targeted improving our experience and really setting the standard both with the product and the service behind it. As Jereme mentioned, our NPS scores have been going up quite a bit, and I do think that bodes well for the future when we think about retention and utilization. It has been fairly consistent for a period of time now, but one of our goals is to improve it so that we can continue to improve active base growth.

Our next question comes from the line of Joanne Wuensch with Citi. Your line is open.

Good evening, and thank you for taking the question. I am curious how we should think about the next couple of quarters, and if you can comment on thoughts for revenue growth rate throughout the remainder of the year and, in particular for the second quarter, if there is anything else we should be aware of as we think of our models. Thank you.

While we do not necessarily guide to quarterly cadence, I can give you some things to think about over the course of the year. When we guided the year at 11% to 13% organic growth, we said it would be relatively split across U.S. and OUS, and that really has not changed. U.S. comps are a little more difficult in the first part of the year and a little easier in the back half, and vice versa internationally, where comps are a little easier in the first half and more difficult in the back half. We are still anchoring around the same commentary around the split across the two. Most folks are thinking about the cadence relatively well.

Our next question comes from the line of Jayson Bedford with Raymond James. Your line is open.

Good afternoon. Thanks for taking the question. I apologize if I missed it. The Smart Basal launch, I think it was early access in 1Q. When do you expand this launch? Thanks.

Thanks, Jayson. We are still in a pilot launch. The idea is making sure the system as designed fits into workflow because it is designed to be a very broad-use product across many clinical environments—large diabetes clinics and small primary care offices. The work we are doing now in a number of pilot sites is ensuring that flows well. We actually learned a couple of things and made some updates to the system. We are not revalidating the algorithm; we know the patient experience is excellent. It is more about how it fits into clinical workflow. When we broaden the launch, we want it to be extremely easy and successful for users and physicians. We do plan to expand throughout the year, and once we finalize the workflow, we will launch it in a very big way.

Our next question comes from the line of Jonathan Block with Stifel. Your line is open.

Great. Thanks, guys, and good afternoon. Maybe I could go back to the prior question and push a little bit on the 11% to 13% organic revenue growth being essentially evenly split between U.S. and international. If you look at 1Q—17% international—and you said there was nothing abnormal in terms of tenders. T2 NIT seems more of a 2027 event than 2026. There seems to be sensitivity from investors around that U.S. number. Why do you have the conviction it is split and not, say, 10% plus U.S. this year poised to maybe accelerate next year with T2 NIT, instead of equally weighted specific to 2026?

The question is fair. We exited last year with a relatively split U.S. and OUS business. Looking at comps year over year, you can see where there were wins and opportunities. We saw a ramp in the international business into the back half of last year and, as we comp some easier first half, looking at Q1 in isolation can be challenging. As you zoom out to our performance over last year and into this year, we still feel very excited about the opportunities in both the U.S. and international businesses. If we come back at the end of the year and it is slightly different, we will keep you posted. We still see a lot of opportunity in the U.S., especially with coverage wins like Prime Therapeutics, and outside the U.S. with tenders we expect to win. We still think it is balanced. If the numbers are slightly off by half a percent or so by the end of the year, we will discuss it. Nothing has changed versus what we saw at the start of the year—we continue to believe both businesses can operate quite strongly over the course of the year.

Our next question comes from the line of Issey Kirby with Redburn. Your line is open.

Hi, guys. Thanks so much for taking my question. I wanted to ask about Stello and how that is tracking. What prompted the redesign? With the international launch, how broad do you expect to go? Is this a product that you could push into markets where you are not currently present? Thank you.

Thanks, Issie. We see Stello as a fantastic opportunity to reach more patients, and it is tracking well to our estimates. As we have been out there for over a year, we have learned quite a bit. One of the main things we are hearing from users is they want more context around real-time glucose data. Over time, we started adding features to the current version of Stello, particularly focused around capture of nutrition—meal logging—using AI to analyze those meals. Taking a step back, we looked at the current version and saw an opportunity to redesign the experience to better match what customers are looking for, both aesthetically and functionally. The new Stello app we are launching very shortly is a complete redesign of the user interface. It has a more technology-forward aesthetic and provides insights that add context to glucose excursions, glucose variability, and nutrition. We are finding that nutrition is really important in helping users connect the dots to make sense of their glucose data and make healthy lifestyle changes. This new version puts those insights front and center and has an overhauled insight engine. We wanted to make insights much more personalized and take advantage of integrated data from activity trackers—Oura Ring, sleep scores, and more—bringing more personalized context and analysis. We are excited for people who maybe tried Stello but wanted more, and for enhancing the experience for current and future customers. For international launches, we are looking at countries in both EMEA and APAC. We will start with a smaller number and then expand, and we believe it is an opportunity for many markets to have an entry point with a product that meets user needs.

Our next question comes from the line of Mike Kratky with Leerink Partners. Your line is open.

Hey, guys. Good afternoon. This is Brett on for Mike. Thanks for taking the question. Back to type 2 NIT—going into the Analyst Day, we will see the data at ADA. You say it is a matter of time for CMS. For your long-range plan and thinking long term, would you expect to have the assumption that CMS coverage is coming within that number, or would you need to actually have that coverage in hand before that is included within your long-range plan?

For long-range plans, I would expect us to include our assumptions around that. I do not want to preempt Investor Day, but it is an opportunity for us to talk about it—our thoughts on timing and how we think about it. It does not change that we will push hard to get the coverage as soon as possible because there are a lot of folks who need this product. You can expect us to talk about our assumptions and viewpoint into the future at Investor Day, and if timing differs from assumptions, we will address that then.

Our next question comes from the line of Richard Newitter with Truist Securities. Your line is open.

Hi. Thanks for taking the questions. One clarification and then a follow-up. Did you say you have an incremental 50 to 100 basis point headwind that you are now contemplating in 2Q to 4Q that is getting absorbed in your reiterated gross margin guidance? Did I hear that correctly?

It is 50 to 100 basis points.

Got it—50 to 100 basis points incremental to what you had heading into the year? Okay. And then on the Prime Therapeutics win—congratulations. How long does it take for these things to work into having an impact? Does that mean you are banking on contribution from that incremental coverage to get to 11% to 13% in the U.S., or was that largely left as upside?

On coverage timing, on national formularies like Prime, the second it is turned on, if you have a script and go to the pharmacy, you are covered. It is generally immediate on those national formularies. You should see it this summer when it is turned on for everyone covered there. That will help. New patients are helpful for the long-range engine, but they are not the only driver—retention, utilization, price, and mix also play into the guide. This is helpful and gives us bullishness around penetration and adoption, but it was not a major contributor to the original guide. We assumed nominal wins over the year and coverage largely as is. As we get more unlocks, that helps over the course of the year. One dynamic our salesforce consistently sees is that as coverage expands, physicians become more comfortable writing scripts broadly. As coverage for the type 2 population rises, it really unlocks the ability for physicians to go deeper. We would expect a similar phenomenon with CMS coverage—a rising tide.

Our next question comes from the line of Chris Pasquale with Nephron. Your line is open.

Thanks. Jereme, on the gross margin strength, leverage in the middle of the income statement was excellent this quarter as well. You tweaked up the high end of your operating margin and EBITDA ranges a little bit, but those seem conservative given where you are starting and the normal cadence we see throughout the year. Did some spending get pushed out of 1Q that is going to come back later? Might this year look a little bit different? I am looking in particular at R&D being flat in dollar terms as an outlier. Any color there would be great.

I appreciate you bringing it up; there has been a lot of work by the team to get here. We did much of that work in the back half of last year. One reason we felt good about raising guidance—though we typically do not raise after one quarter—is you saw operating expense performance in Q4 and now in Q1. We raised the midpoint of operating margin guidance by 75 basis points, which is a pretty big raise with just one quarter behind us. We do expect R&D spend to continue to increase. We did good work managing expenses and leaning into things like AI to be more efficient, but we are not pulling back on R&D. Being flat year over year is not expected to continue. We will continue to invest in Ireland as that manufacturing facility ramps through the year. You really start to ramp a facility right before you turn it on; we turn it on in the fourth quarter, so you can imagine Q2 and Q3 ramping a bit going into that. It was not pushed back—this has always been part of the plan. We had 300 basis points of leverage in operating expense spend last year; that is playing through a bit this year. Our underlying business is continuing to get leverage despite the investments in Ireland, and that is one of the reasons we raised guidance.

Our next question comes from the line of Joshua Jennings with TD Cowen. Your line is open.

Hi, guys. Good afternoon. This is Colin on for Josh. Thank you for taking my question. People seem to be treating CMS as a binary event. Is it possible there is language around stipulating that patients are on orals or other diabetes medications, and would that change your expectations for the adoption trajectory over the next couple of years? Thank you.

It is a good question. CMS has always had requirements to ensure qualification for coverage. When it was intensive insulin, you had to prove multiple shots per day and submit glucose logs. When it moved to basal, you had to demonstrate one shot a day. I would not be surprised if CMS includes something—script evidence, orals like metformin, etc.—to document diagnosis and therapy. Most folks diagnosed with diabetes are prescribed medication. Whether it is all folks or all folks with some form of medication, this is a massive expansion and opportunity to serve this population. I would not expect any such requirement to materially limit our ability to impact the population or change our growth opportunity.

Our next question comes from the line of Daniel Markowitz with Evercore ISI. Your line is open.

Hey, good afternoon, and thanks for taking my question. It is great to hear the callout on share gains in type 2 non-insulin. It sounds like the 15-day is helping a bit. Is there anything you are doing to the organization or the salesforce in order to prepare for this market unlock—maybe more focus on PCPs versus endos? Also, how should we think about the operating impact related to increasing contribution from the type 2 non-insulin market going forward? Thank you.

We are continually evolving the product portfolio and service, and the way our field team is calling, to make sure we are serving all the people that have coverage for this product. For those that do not have coverage, we have our Stello over-the-counter product available. We have advanced our service—updates to technical support, web forms, and digital tools—and that is one of the reasons we believe our user satisfaction scores are improving. It is a big deal for the type 2 non-insulin population. The 15-day product is helping drive share gain, but it is also the experience they are having with DexCom, Inc., making sure we meet their needs. On the salesforce, we are using advanced tools to analyze data and target—find these patients, find their prescribers. The number one thing we need to do is continue to educate around the coverage that exists because, as Jereme mentioned, when only about 25% of this population is covered today, it can be complicated, particularly for primary care physicians who are not prescribing CGM every day. We are finding the physicians seeing these patients, making sure they are aware of coverage, and helping them know how to write the prescription for CGM. As we expand, we will continue to look for efficiencies and productivity across the salesforce. Primary care is the main location where these folks are seen, and that is why we expanded our salesforce in 2024 to call on this broader group of physicians.

Our next question comes from the line of Bill Plovanic with Canaccord Genuity. Your line is open.

Great. Thanks for taking my question. Really impressive free cash flow in the first quarter, especially considering the first quarter is typically not so good for free cash flow. With that cash balance and commentary in the press release on prioritizing exploring new opportunities, help us understand what that means. You have more than enough to pay back the convert if you so choose. Another building? $1.2 billion? Are you looking to buy something? What is the use of cash? Thanks.

Thanks for the question. We worked hard on free cash flow. In terms of uses of cash, you are right: we paid down our convert last quarter, and that was one reason to isolate cash. We did $500 million of share buybacks in the back half of last year. Having extra on the balance sheet provides multiple opportunities: tuck-in M&A that makes sense—geographic expansion or capabilities we do not have—and having capital for potential capital markets activity. We have not been shy about share buybacks. We will talk more in a couple of weeks at Investor Day; we will have a section on capital allocation and dig into it more there. It is important folks understand we are able to generate quite a bit of cash in this business, and it is something we will be focused on for the foreseeable future.

Our next question comes from the line of Shagun Singh with RBC Capital Markets. Your line is open.

Thank you so much for taking the question. Could you talk about the right growth rate in your view for your U.S. and OUS business excluding Stello? How should we think about those underlying growth rates? Also, as we think about the NCD and the type 2 non–insulin-treated market opening up, any comments you can make on lifetime patient value and how that impacts financials going forward?

Let me anchor on what we said this year, and for beyond this year I will defer to Investor Day. This year, we talked about 11% to 13% growth, split across U.S. and OUS, and about one point of contribution from Stello. That gets you down to the core clinical markets. Stello will not be a meaningful contributor outside the U.S. this year in total dollar value, so assume de minimis OUS contribution from Stello in 2026. It is most important to get Stello outside the U.S. so it can roll up over time. On lifetime value of a customer, retention and utilization are why we pay so much attention to those metrics. Value varies based on utilization by use case—type 1, type 2 intensive, basal—and we have those bands on our website. As we move into use cases with 70% to 80% utilization, the value is a little less than higher-utilization categories, but still a massive unmet need. The economics per purchase are generally around the same. Our goal is to keep a close eye on cost to acquire—there is a team dedicated to that—meet the unmet need, and keep patients on our product. We balance operating expenditures with that value over time. We will get into longer out-years at Investor Day.

Our final question comes from the line of Anthony Petrone with Mizuho. Your line is open.

Thanks. Just one on the RCT. Looking at historical data—the MOBILE study, Libre studies, registry data, meta-analyses—you can see A1c reductions from as low as 50 basis points up to 2.5%. This is a less intense population, so I am assuming starting A1c levels are a little bit lower. How do you level set expectations on what we should be looking for for a statistically meaningful A1c reduction out of the RCT? Thanks.

I appreciate the question. It is important for care and reimbursement. Our registry data is a good example. This population comes in with a spectrum of A1c—some are quite high because they have not progressed to insulin and are on other glucose-lowering medications. A big part of managing diabetes is behavior and also medication adherence. Those are two things CGM targets, and that is why we see improvements. Looking at our registry data is a reasonable estimate for what we expect. The main thing we are expecting is a statistically significant improvement that meets the threshold for reimbursement. We are confident that CGM will drive that type of outcome in these patients, and we look forward to sharing the full readout at ADA next month.

That concludes our question-and-answer session. I will now turn the call back over to Mr. Jake Leach for closing remarks.

Thank you, operator. As we close out the call, I want to take a moment to say thank you. First, to our employees: the results that we shared today are a direct reflection of your execution, your resilience, and your commitment to doing the hard work the right way. I am incredibly proud of what you have delivered and how you show up for our customers every day. I also want to thank the customer advisory council. We met multiple times this past quarter, and your candid input and your partnership are playing a critical role in shaping our strategy and improving the experiences that we deliver. The progress we are making is stronger because of your voice. We look forward to seeing many of you at our Investor Day in a few weeks. Thanks, everybody.

Ladies and gentlemen, this concludes today's call, and we thank you for your participation. You may now disconnect.