Welcome to the Dexcom Second 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 1 on your touchtone 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's second quarter 2026 earnings call. Our agenda begins with Jake Leach, Dexcom's President and CEO, who will summarize our recent highlights and ongoing strategic initiatives, followed by a financial review and outlook from Jeremy Sylvain, our Chief Financial Officer. Following our prepared remarks, we will open the call up for your questions. At that time, we ask analysts to limit themselves to one question each so we can provide an opportunity for everyone participating today. Please note that there are also slides available related to our second quarter 2026 performance on the Dexcom Investor Relations website on the events and presentations page. With that, let's review our Safe Harbor Statement. Some statements 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. These statements are made as of the date hereof, based on information currently available to Dexcom, are subject to various risks and uncertainties that could cause actual results to differ materially. For discussion of these risks, please see Dexcom's annual report on Form 10-K, most recent quarterly report on Form 10-Q, and other filings with the Securities and Exchange Commission. Except as required by law, we assume no obligation to update any forward-looking statements or to conform any forward-looking statement to actual results. Additionally, during the call, we will discuss certain non-GAAP financial measures. Unless otherwise noted, all financial measures discussed on this call are presented on a non-GAAP basis. Non-GAAP measures should not be considered in isolation or as a substitute for or superior to GAAP results. Please refer to the tables in our earnings release and the slides accompanying our second quarter 2026 earnings call for reconciliations to the most directly comparable GAAP measure. Now I will turn it over to Jake.

Thank you, Sean, and thank you everyone for joining us. Today we reported second quarter revenue growth of 13% compared to the second quarter of 2025 and organic revenue growth of 12%. We carried forward solid demand from the first quarter for Dexcom CGM globally as we benefited from broader access and share gains across several core markets as well as patient categories. The second quarter was also marked by solid execution across the business. This included multiple product launches, strong margin execution, and excellent product performance in the field. In addition, global new customer starts remained in line with our previous record from last quarter, including a sequential uptick in new customer starts in the U.S. During the quarter, we had the opportunity to connect with many of you at our 2026 Investor Day, which we hosted at our Arizona manufacturing facility. Since I stepped into the role of CEO, you've heard me reiterate my three priorities for Dexcom's next phase of growth. One, be the premier glucose sensing solution for all. Second, set the standard for customer experience. And third, expand international market share. This event provided an opportunity to explore each of these topics in much greater detail. During the day, we shared updates on our product roadmap, reimbursement plans, international strategy, and future market opportunities. We also laid out our new five-year financial targets and capital allocation plans, which included a $1 billion share repurchase authorization to be executed in 2026. A key part of our presentation was detailing the pathway to full coverage for the 25 million people in the U.S. with type 2 diabetes not using insulin. In fact, we have an organizational initiative called the Road to 100, which represents our efforts to achieve coverage for all people with diabetes. And while it's only been two months since our investor day, we've recently took an important step forward in advancing that opportunity. As many of you know, at this year's American Diabetes Association Scientific Sessions, we provided a full readout of CONNECT, our randomized control trial for people with type 2 diabetes who are not on insulin. For background, CONNECT enrolled nearly 300 participants across 22 primary care sites in the U.S. and was designed to reflect the wide spectrum of people with type 2 diabetes. This included individuals across the full range of type 2 medication plans to ensure these results were reflective of real-world care, and we could not have been happier with the results. Over the six-month study period, we saw a 1.6% A1C improvement for the Dexcom CGM group, which equated to a 0.9% difference in A1C between the CGM arm and the control group. To put this in perspective, these results are even better than what we saw in our landmark Diamond and Mobile studies, which ultimately helped shift standards of care and led to full coverage for anyone using insulin. Beyond the strong headline results, several additional outcomes stood out in the Connect trial. First, the Dexcom CGM arm spent over five more hours per day in normal glucose range, compared to the control group. Importantly, these improvements began within the first week of using Dexcom and were sustained over the 26-week study. These were individuals who've had diabetes for 10-plus years on average, and Dexcom immediately gave them a path to better glucose control. Second, this real-time feedback led to very high engagement throughout the trial. Over the 26-week study, median CGM usage was 97 percent, which is even higher than what we have seen in some AID trials. And finally, from a medication perspective, the largest relative improvement in A1C was within the cohort using only GLP-1 therapies. This data only further reinforced the complementary relationship between CGM and incretin therapy. The results demonstrated in Connect translate to meaningful health outcomes and economic savings, and we are already seeing this recognized by commercial payers. As an example, in collaboration with CBS Health, we published a real-world evidence study for non-insulin type 2 customers. Over a three-year period, the study showed a 66% reduction in diabetes-related hospitalizations after the initiation of CGM and nearly 50% reduction in microvascular complications. These tangible near-term cost savings are a key reason why we've seen commercial coverage build so quickly. As we mentioned in our Q1 call, as of this summer, we now have coverage for all people with diabetes across the four largest commercial PBMs. This represents reimbursement for more than 7 million people with type 2 diabetes who are not on insulin. While this is a great start, we have stated previously, we won't be satisfied until we have broad global coverage for all people who can benefit from Dexcom CGM, including 25 million type 2 non-insulin customers in the U.S. The Connect readout adds level A evidence to the already substantial body of real-world type 2 data and our momentum with commercial payers. Historically, this level of evidence has carried outsized influence in both shaping clinical practice and driving coverage forward, both in U.S. and across international markets. We're now working with advocacy groups and KOLs across the world to help educate the market on these outcomes. We've also submitted the Connect data for publication and provided the evidence to CMS in support of the non-insulin coverage expansion. We believe these results only strengthen the case for reimbursement, and with roughly half of the type 2 non-insulin population being of Medicare age, this decision has the potential to completely reshape diabetes care in the U.S. The administration is already demonstrating their commitment to reducing the burden of chronic disease and expanding access to new technologies. Along those lines, we are excited to see the FDA's announcement of Dexcom as the first company chosen to participate in the Tempo digital device pilot. As I shared at Investor Day, we believe that Dexcom's opportunity goes beyond diabetes care and into diabetes prevention. We have 115 million Americans with pre-diabetes, but only a fraction of them are aware. Under Tempo, we will have the ability to demonstrate Dexcom's ability to screen for pre-diabetes with Dexcom CGM and drive people to better metabolic health. As we continue to expand the horizons of CGM access and metabolic health, we are driving exciting product enhancements that meet the needs of our customers. This includes our fully redesigned Stello app, which launched broadly last week. As you saw at Investor Day, this new interface offers a more consumer-friendly feel, new AI-driven insights, and enhanced food logging capabilities. This Stello update also creates the foundation from which our G-Series app will evolve, providing greater personalization and additional functionality for all customers. More broadly, our technology roadmap remains focused on delivering innovations that can improve outcomes and the user experience. A great example of this is Dexcom SmartBasal. As a reminder, SmartBasal is a personalized dosing module to help simplify and optimize basal insulin management for both customers and physicians. We developed this technology to address a significant unmet need, as more than 70% of patients on basal insulin fail to achieve target A1C levels after a year of therapy, often due to the challenges associated with insulin titration. We currently have our pilot program of SmartBasal underway with several key KOLs, and the feedback has been great. In fact, across these practices, SmartBasal has helped customers reach an optimal basal dose in only three weeks on average, which is a process that typically takes 12 weeks or longer in routine care. These results validate our belief that SmartBasal has the potential to become the new standard of care for basal insulin management. During the quarter, we also continued to advance the rollout of our Dexcom G7 15-day system. With the recent integration availability for tandem pump users, including Mobi, our G7 15-day system is now accessible for all adult G7 customers in the U.S. We're very encouraged by the response we've seen since launch, with great feedback on the new algorithm, updated patch, extended wear time, and enhanced customer service. Importantly, these improvements are translating into stronger customer satisfaction, with G7 net promoter scores increasing in each of the last three quarters. Based on this positive customer feedback, strong adoption trends, and growing interest across the market, we remain on track to convert nearly 50% of our U.S. customer base to the G7 15-day system by year-end. At Investor Day, we also discussed our plans to extend this 15-day experience across our international markets. We recently completed an important step on that journey as Health Canada became the first international regulator to clear Dexcom G7 15-day. We look forward to bringing G7 15-day to Canada in the second half of 2026 and to the rest of our international markets as quickly as possible. To close, it was great to connect with many of you in Arizona, to share our vision for Dexcom's next chapter of growth, and to support that vision with a strong quarter of execution. As we discussed at the event, we see a significant opportunity to help millions more people globally. In fact, through our ongoing advocacy work, access efforts, market expansion, and product development, we believe we can exit our LRP with an even larger market opportunity than we have today, and we plan to execute on that growth vision with one of the more compelling cash flow and margin profiles in the industry. As you can tell from today's updates, we are wasting no time making this vision a reality. With that, I'll turn it over to Jeremy.

Thank you, Jake. As a reminder, unless otherwise noted, the financial metrics presented today will be discussed on a non-GAAP basis. Reconciliations to GAAP can be found in today's earnings release as well as the slide deck on our IR website. For the second quarter of 2026, we reported worldwide revenue of $1.31 billion compared to $1.16 billion for the second quarter of 2025, representing growth of 13% 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 $933 million for the second quarter, compared to $841 million in the second quarter of 2025, representing an increase of 11%. We continue to see strong new patient performance and share capture in the U.S. market with good sequential momentum, driven by solid execution in the field. International revenue grew 19%, totaling $375 million in the second quarter. International organic revenue growth was 16% for the second quarter. As we've seen over the past several quarters, some of our strongest performances came from markets where access has recently expanded, such as France and Canada. This is consistent with the international access strategy we outlined at Investor Day, as reimbursement wins often allow us to drive growth and market share over time. We also continued to expand our international product portfolio during the quarter with the launch of Dexcom Flex in Germany. Dexcom Flex is our newest 15-day sensor designed to address Type 2 basal in the Type 2 non-insulin markets and select geographies. We're excited to further roll out this product as Type 2 reimbursement continues to build. Our second quarter gross profit was $838.5 million, or 64.1% of revenue, compared to 60.1% of revenue in the second quarter of 2025. This was another great quarter for gross margin performance, with margins improving approximately 400 basis points compared to last year. This improvement was driven by continued manufacturing efficiencies and quality management, and a benefit from the initial customer switchover to G7 15-day. As Jake mentioned, our execution has been excellent across our operations and supply chain. This included a return to more optimized shipping patterns, which helped us manage the fuel price environment in Q2. Operating expenses were $510.2 million for Q2 of 2026, compared to $474.1 million in Q2 of 2025. Operating income was $328.3 million, or 25.1% of revenue in the second quarter of 2026, compared to $221.8 million, or 19.2% of revenue in the same quarter of 2025. Once again, we delivered nice operating expense leverage during the quarter, even as we expanded our investment in Ireland to prepare for commercial production later this year. This quarter was another great representation of ongoing cost discipline across our organization, which is driving margin performance and funding growth opportunities across the business. Adjusted EBITDA was $421.3 million, or 32.2% of revenue for the second quarter, compared to $327.6 million, or 28.3% of revenue for the second quarter of 2025. Net income for the second quarter was $269.1 million, or $0.70 per share, representing 46% growth over the second quarter of 2025. We remain in a great financial position, closing the quarter with approximately $1.9 billion of cash and cash equivalents. Our cash flow generation continues to be a key differentiator, as we delivered more than $600 million in free cash flow in the first half of the year. This was more than double our first half free cash flow levels from 2025. As Jake mentioned, at Investor Day, we announced a commitment to repurchase $1 billion of stock in 2026. Following the event, we quickly started executing that plan and repurchased approximately $600 million in the second quarter. During the day, we also shared a broader framework for our capital allocation decisions, which includes an ongoing assessment of tuck-in M&A and where to invest for future production capacity. As we discussed, one area of particular interest is in transactions that have the potential to accelerate our technology pipeline. In line with that framework, we completed the acquisition of NutriSense during the second quarter. NutriSense has developed an innovative platform built on CGM data with a focus on delivering nutrition-focused insights. We believe this integration has the potential to enhance our customer experience and provide new, personalized insights. Turning to guidance. We are raising the midpoint of our guidance with an updated range of 5.18 to 5.25 billion, representing growth of 11 to 13 percent for the year. This updated revenue guidance reflects stronger organic growth expectations offset by recent movement in foreign exchange rates, which we expect to have about a $15 million impact to international revenue in the second half of the year relative to our prior guidance. Importantly, excluding the impact of foreign exchange, our updated guidance implies an increase in organic growth by more than 50 basis points at the midpoint compared to our prior guide. For margins, we are raising our full-year non-GAAP gross profit margin guidance to approximately 64%. We are also increasing our non-GAAP operating profit margin guidance to a range of 23.5 to 24% and adjusted EBITDA margin guidance to a range of 31.5% to 32%. With that, we can open up the call for Q&A. Sean?

Thank you, Jeremy. As a reminder, we ask our audience to limit themselves to only one question at this time and then re-enter the queue if necessary. Operator, please provide the Q&A instructions.

Thank you. Then we'll now begin the question and answer session. If you have a question, please press star 1 on your touchtone phone. If you wish to be removed from the queue, please press star 1 a second time. If you're using a speakerphone, you may need to pick up the handset first before pressing the numbers. Once again, if you have a question, it is star one on your touchtone phone. And our first question comes from the line of Travis Steed with Bank of America. Your line is open.

Hey, congrats on a good quarter. Maybe I'll ask about, you know, this U.S. CGM growth for Dexcom and also the market. It was nice to see the quarter-over-quarter uptick and new patient starts. But the market for CGM in the U.S. kind of hanging around the 10% line, just kind of the confidence you're seeing in that sustainability of double-digit growth and how to think about some of the new products and expanding coverage as those hit later this year and kind of what you're assuming for NutriSense in the second half on the guidance. Thank you.

Yeah, thanks, Thanks, Travis. I'll take that one. Yeah, it was another robust quarter of new patient starts, and it was nice to see the sequential uptick in the U.S., and it was pretty broad-based across all of our patient segments. As we mentioned in the call, we saw some sharetaking across those. You know, when you take a step back and you look at the U.S. market today, there's approximately nine million people in the United States that have coverage for CGM but aren't yet using it. So we do feel that there's robust growth still there before we talk about any expansion and coverage. And so happy with the patient ads. We're going to continue to drive and push so that everyone that can benefit from this technology gets it. And as you mentioned, CMS expansion is something that we've targeted for mid-next year is when we believe that coverage will come into place that often that obviously gives us a pretty significant uh runway for for future growth nutrisense as you mentioned is one of the acquisitions uh that we've made and it really is focused on driving you know better insights and more um kind of value from our product it was a really exciting uh technology that team developed we've been partners with nutrisense for quite a while and as we continue to work with them we saw just the benefits that that uh technology could bring to the users. You know, the engagement scores early on are really high because of the personalized nutrition coaching based on CGM that we see with that technology. So we're continuing to work with it and integrate it into our product portfolio, and we're excited to see where it can drive us.

Yeah, and to your question on guidance, Travis, you know, most of the revenue that ran through NutriSense was actually the pass-through of the CGM. So that's always been in our run rate, And that'll continue into our run rate. I would say that, you know, any other contribution, you know, say on the top line, you know, you can count the millions for the year on one hand. So it's really truly immaterial in terms of the impact to the organization. In terms of the P&L, we're assuming the P&L associated with that into that guidance, into the raise of our guidance. And so all of that is really contemplated in there. Maybe most importantly, I think the big takeaway here is the run rate that NutriSense had, most of it was already cello revenue. And so it continues to remain. It doesn't really change the organic growth profile.

And our next question comes from the line of Robbie Marcus with J.P. Morgan. Your line is open. And, Robbie, your line is open. Please check your mute button.

Oh, great. Sorry. Just jumping back and forth. Appreciate it. I wanted to ask on Connect and the reception amongst doctors following ADA and how you're thinking about how this data set and hopefully the eventual Medicare non-intensive reimbursement might help stimulate and advance adoption in type 2 non-intensives. You know, what's been the feedback, and, you know, do you think this trial was a door that could open and help drive adoption once reimbursement comes? Thanks.

Yeah, thanks. Thanks, Robbie. You know, absolutely. The results from the CONNECT trial, both in terms of the A1C reduction across the broad spectrum of type 2 users on all kinds of different medication plans, as well as the engagement with the technology. You know, it's interesting. The engagement is very, very high in this population. And if you kind of look at it compared to some of the older studies, one thing to always remember is that the technology has improved pretty substantially over time. And so I think what we've seen in this study is not only the benefit to these users and their engagement with the product, but also the quality of the product experience. And so if you think about some of the earlier studies, those started back even on G4. And so now G7, with all the enhancements we've made to both ease of use, have really driven the capability for these folks to use this product full time, as I mentioned, 97 percent utilization. And so I think that really resonates with providers because, you know, if they're writing the prescription for their product and they want their patient to get it, they want them to use it. And I think this trial is a great proof point in how this product will be used in this population. We saw it in our registry data. We saw great utilization for those that already are using it. But in this trial, I think that stands out substantially as well as the improvement in A1C. And so right now, we're working with that data. We've submitted it. It's in late-stage review for publication. and will continue to take that data around the world to drive reimbursement. This is the type of trial that previously has driven pretty significant expansions. Our previous trial is obviously for insulin users. This one now for the broad segment of type 2. So we do feel that it's a very important part. The evidence was strong before the Connect trial results were available, but now that they're available, it just really reinforces the benefit that this technology has in the broad base of diabetes.

And our next question comes from the line of Matt Taylor with Jeffries. Your line is open.

Hi. Thank you for taking the question. I just wanted to follow up on Connect and on Insulin Type 2. You talked about having submitted the data package to CMS as well. Could you give us any update if there is one on the timeline that you might expect for coverage? You said mid-27 previously. Is that still your base case, or could it potentially be sooner with the progress that you've made?

Yeah, we did submit the Connect data to CMS. And, again, it adds to that pretty substantial body of evidence that was already there. No change in our assumptions around the coverage decision. We do expect to hear back from CMS on that decision before the end of this year. And in our plans right now, we've got it taking effect in the middle of 2027. You know, that being said, I do believe that Connect is a pretty powerful data set that not only for CMS, but for the world will continue to advance reimbursement for this population.

And our next question comes from the line of Larry Beigelson with Wells Fargo. Your line is open.

Hi, this is Simran on for Larry. Thanks for taking the questions and congrats on a good quarter here. I'll just ask mine about the pilot program with the FDA, TEMPO. What does TEMPO mean for type 2 non-insulin and pre-diabetes coverage exactly? Can you just elaborate on the kind of evidence development in the TEMPO program for those two indications and, you know, when you could potentially have a pre-diabetes label? And then, you know, is there any near-term revenue benefit from CMS coverage and, you know, any kind of read-through to just broader type 2 non-insulin CMS coverage from, you know, it being mentioned alongside the TEMPO program as well?

Yeah, thanks, Simran. So, TEMPO is really – it's an innovative regulatory framework, so introduced by the FDA. So it's really around access to technology for patients. And so it aligns the target areas for the TEMPO framework is around the areas that are identified by the ACCESS program from CMS, which are early-stage cardiometabolic conditions and cardiometabolic conditions. We're talking pre-diabetes and diabetes obviously squarely fit into those. So it's really around allowing the participants of Tempo to release into the market technology, digital technologies under basically it's like an enforcement discretion. So basically what it means for Dexcom is it allows us to innovate more quickly on our glucose health program as well as some screening techniques that we're looking at using CGM to screen for pre-diabetes as well as diabetes. because of the pretty significant lack of awareness of prediabetes diagnosis. We believe that CGM is a really powerful technology to help intervene more earlier in the progression of disease. And so Tempo is not really specific to a coverage. It's really more a framework to get technology in the hands of users. The access program does add additional payments into the system for Medicare beneficiaries, and so obviously a technology that's under Tempo can help there, but it's not connected at all to the kind of general CMS decision for long, you know, broad coverage for type 2. It's really more specific to the Tempo and access programs.

And our next question comes from the line of Matt O'Brien with Piper Sandler.

Your line is open. great thanks this is anna on for matt thanks for taking our question here um i wanted to ask on 15 day uh you you know you mentioned the 15 conversion by the end of the year in the u.s just wanted to know if there was any color you could provide on where conversion to 15 day sits exiting q2 and and how you're thinking about the the accretive margin impact from that big shift for the rest of the year, if that's sort of showing up in line with your expectations or anything to note there? Thanks.

Sure. Yeah. And I can take that question. You know, the transition is occurring essentially in line with expectations. And so if you think about, you know, all the assumptions as we were going into the year, you know, obviously we really launched it in earnest and full starting in January. We did a little bit of an early release in the DME space in the back quarter of last year, but it went into retail at the beginning of this year. And so if you kind of think about a line drawing through, there's obviously folks that have adopted it over the course first half of the year. One of the big gating items was, of course, thinking about its integration with Tandem and Mobi, and Jake alluded to it earlier. That's now gone into full launch here as we move into the back half of the year. So our expectations were you'd continue to see it ramp up, especially as all of the aid integrations took place you're seeing you know the the tandem coming in now and it's already connected to beta and insulate so we're making great progress it's about in line with expectations and and so you're seeing it start to contribute a little bit more here in the second quarter so the expectation is it starts to contribute more into the third quarter in the fourth quarter as you know your base continues to move over and um you know that starts to to represent recurring purchase patterns over that time so the expectation is it starts to contribute more as we get into the back part of the year, it really starts to contribute next year. Because as you're starting to close in on 50%, you know, that becomes your starting point for 2027. And that starts to get pretty meaningful as you move into the next year. But for now, the way I think about it is, is it's progressing in line, great customer feedback. I think we've really gotten all connections on board. And so we're looking forward to it, for it continuing to move to that, you know, approaching 50% by the end of the year, right on track.

And our next question comes from the line of Joshua Jennings with TD Cowan. Your line is open.

Good evening, guys. Thank you for taking the questions. This is Colin on for Josh. I had a quick one. I'm curious, now that you've got 7 million-plus covered lives to play with, what's the kind of awareness level among physicians for the reimbursement already in place? Are physicians identifying which patients can already receive reimbursement with the Medicare decision upcoming. Thank you.

Thanks, Colin. It was cutting up a bit, so I'm going to do my best with the pieces I've heard. I think really what you're getting at is what's the physician awareness of reimbursement? How much more needs to take place in lieu of expansion of coverage? And as more kind of knocks down, what are we doing to go about making sure folks are aware of it? I think that's where you're going. And the answer is, you know, obviously, you know, we've been working on this for some time. And, you know, if you think about the sales force, you know, the sales force will, we have various tools that the sales force gets up in front of physicians and really goes through historical claims adjudication by payer to show them in their practice, you know, where does coverage exist, where does it not exist, so that more and more physicians can get comfortable that access exists for them. And so that continues to take place, and it takes a little bit of time to continue to make folks aware, especially as we continue to get more coverage, because every time we show up, we're going to show them a better enhancement or a better improvement in coverage. We have to continue to do that. I also would expect us to continue to bring the Connect study with us, because obviously that demonstrates the benefit. it. So if any folks were on the fence around, hey, well, what is this going to do and how is this going to impact and will they use it? I think what we can both show is, one, if they use it, you're going to see these incredible results. It doesn't matter what medication you're on. And we also can show the coverage ahead of time. There's always work to do around it. Remember, there's hundreds and hundreds of thousands of prescribers out there. And, you know, so saying this in generality, everybody's kind of at a different point in their education. But that's what the team is doing. And if you were to talk to, you know, our sales leadership team, you know, that's the one thing I think they're most excited about is more and more coverage comes, you know, kind of the rebuttal of, well, do they have coverage? We can start to show them, especially with these tools, clear line of sight to where their coverage exists today. Where that coverage does not exist today, they certainly have Stello in the bag. And then we are talking about Connect and what Connect can mean for CMS coverage. So I think we put all those in front of physicians today. we have to be mindful of obviously letting them know that the cms coverage does not exist today so if you prescribe it today you're going to get a non-coverage but i think seeding that is exactly what we're doing and we have all the tools to do so and again even when there's not coverage stella is a great opportunity there so hope that helps up there's the question if it doesn't we can always catch up later appreciate it and our next question comes from the line of jason bedford with raymond James.

Your line is open.

Good afternoon and congrats on the progress. Just a clarification and then a question. I missed the comments around NCS ads. Was the takeaway that 2Q ads were similar to 1Q? And then my question is really, it's tough not to notice the OPEX leverage. Is there either a timing dynamic at play here or is this the level in which you can kind of leverage the business going forward? Thanks.

Sure, Jason. Yeah, so basically what we're saying is Q2 is in line with Q1. Q1 was a record globally, so Q2 is in line with a record globally. We're still waiting for some final patient data to come in. We are also saying that U.S. is in line with a record globally. We're waiting for some final patient data to come in, and usually in the U.S. it takes up to 45 days to get it all. What's most important is we do know that U.S. new patients start sequentially sequentially increased um from q1 uh did mean though us patients came down a bit but you know these these things happen with you know tenders timing all of that so hopefully that gives you some context essentially in line with the record in the us in line with the record globally so uh hopefully that's that's uh that's helpful you know to your question on operating leverage you know you're right we we are we've had some operating leverage really uh ahead of plan and that's why we've increased the guide on the year and so certainly passing that through You know, I think over time, the operating leverage that you're seeing and all the work that we've put in place between technology and capability, et cetera, you know, we do expect that to continue to contribute over time. The one thing I will say is for this year, and I think you guys know this quite well, Jason, is as we launch our Ireland factory, you know, what do you do in the quarter ahead of starting manufacturing? That's when you hire all the manufacturing folks. And so we will be doing quite a bit of hiring in Ireland here into the third quarter. before turning on those lines, and those folks are not producing, they're training, they're starting things, and because of that, we'll start some depreciation as well. So while we have invested in Ireland into the second quarter, we are going to make some more investments in the third quarter. The good news underneath it all, and I think this is kind of what you're alluding to, Jason, is the levers we're building in the organization to achieve operating leverage, they continue, and I think we're really proud of that thus far. So hopefully it gives you some context. I'm really happy to see it this quarter, really proud of it, and glad to pass it along via guidance raises on our margins.

And our next question comes from the line of Marie Tibble with BTIG. Your line is open.

Hi, good afternoon. Thank you for taking the question. I wanted to ask about international. You had really strong organic growth over there again this quarter. I think the comp's maybe getting a little bit tougher in the second half. I just want to understand what pace is sustainable. I know you, you know, Japan went direct. I believe you mentioned Health Canada and the 15-day approval there. So what are some of the catalysts to help drive international growth through the second half of the year? Thanks.

Yeah, thanks. Thanks, Marie. Yeah, the exciting thing about that is the international market is just the tremendous opportunity we have as coverage expands. Just to take a step back and think about it, we're still working through IIT coverage in a number of our top 10 OUS markets. That's before we even get to Basel and then ultimately NIT. So if you look at those populations, just in that core market, you know, we're well north of 60 million potential lives that we could impact. So, you know, as we think about the second half of the year, you're right, the comps get a little tougher because we had some great access wins in the back half of last year. We continue to get access wins, though, new tenders. When you think about that landscape, much of that is around people having access to Dexcom CGM for the first time because we now have our product portfolio where we can bring Dexcom 1 Plus or Dexcom Flex to patient populations that didn't have a choice before. And so as we do that and we win those tenders and we get on there, it gives them access and we are seeing those wins and we continue to expect more of those to come. So that's, as Jeremy mentioned, that's sometimes where you see new patient numbers kind of go up or down, but in the long run, we see a pretty significant opportunity here.

Yeah, and then, you know, to your question on, you know, what to think about for the back half of the year in comps, you're all right. The Q4 and the Q3, Q4 comp slasher, especially Q3, got a little bit tougher in the international business. We've been talking about that all year, though, and so, you know, we've talked about where they get a little bit easier in the U.S. and only a little bit tougher in the U.S., so it's not too much, but nevertheless, it's something to be mindful of. And, you know, it's always that funny currency thing. You know, at $1.17, $1.18 in the euro, I think that's where about breakeven sits. You know, as of June 30th, when we're thinking about it, $1.14. So just being mindful of that as we think about it. If you neutralize that out, organic growth isn't as impacted. But we always want to just be mindful that you have those updated currency assumptions in your model.

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

Thank you. Good afternoon, guys. I just want to swing back maybe to the U.S. market. Could you provide any kind of maybe high-level color at least on what the drivers of getting back to that kind of record or equivalent to a record new start in the U.S.? You know, are we seeing more basal-only patients coming in still? I think we're past the three-year anniversary at this point. So is it really basal-only doing most of the heavy lifting? Is it share gains in basal-only? You know, my gut would tell me that maybe your T1 and IIT T2 new starts on a year-over-year basis are down a little bit. I don't know if you'd want to comment on that, but just given those penetration rates. So just kind of the mix and makeup of what drove that good U.S. number this quarter. Thanks.

Sure, yeah, I can cover that. You know, I think it was – when we talk about kind of a broad-based performance, we did see some step-up actually from last quarter, even in T1 a little bit. But you really saw a little bit of a step up across the board, across T1 and T2 intensive, basal as well, and a little bit there in the type 2 non-insulin. So it was a little bit across the board. You know, I think a lot of it is a couple fold, you know, and as we think about feedback. So, you know, Jake alluded to it earlier, the NPS scores continue to go up. This is our third consecutive quarter. I'm seeing those go up. And so when you have a new product in hand, like G7 15 day, and it really, we believe that the algorithm the wear time the performance in the field certainly addressing some of you know the sensor deployment um challenges we face you know all that as that plays into customers happy customers combined with the coverage levels um that we have and we continue to fight for coverage in the u.s even eliminating things like prior authorizations etc to make it easier for folks i think we're really giving both physicians and customers reasons uh to come to our product And so, you know, there's no magic here. We really focus on how to make the customer's life easier, like easier onboarding. Those things go in. Sometimes we don't necessarily talk about it, but you're seeing more and more easier onboarding. You're certainly seeing, obviously, you know, sensor out of the box. We expect those to go well. The algorithmic improvements. And you don't necessarily always talk about those, but word of mouth is important there. You know, a lot of folks really enjoy the extended wear time. It really has been something we've really seen quite a bit of good feedback on. And so I think as you build that ecosystem, and obviously there's more and more changes to come as we've talked about the product, we've just really seen a lot of interest there. So I wouldn't say there's one silver bullet, but the more and more we work on all of those, plus the more we knock down that reimbursement door and make sure folks are aware they have reimbursement, that's really what we've seen over the course of this course.

And our next question comes from the line of Joanne Wench with Citi. Your line is open.

Good evening, and thank you for taking the questions. Briefly, I wanted to make sure that the G8 sensor timeline was still intact, or if you had an update on that. And then it looks like you acquired NutriSense in early June. Just curious what your thoughts are on that and if it is in guidance. Thank you.

Yeah, thanks. Thanks, Joanne. GA timeline is still very much intact. The team is doing great work there. We're in the middle of doing lots of validations on the product as we prepare to start some very large clinical trials to show the performance levels of this product. Again, as we mentioned at Investor Day, we expect a step change improvement in accuracy and reliability for this product based on brand new technology that's being implemented into the GA system for the very first time. It's also wearable. It's half the size of the G7. And so, you know, more slimmer in terms of height off the body as well as footprint. And so, again, just continuing to make the technology easy to use, fit into the patient's lifestyle. And so very much on track for that, you know, end of 2027, early 2028, depending on regulatory timing. But yeah, very much on track. It is also a multi-analyte platform, right? So we'll be launching with the glucose version at first, but multi-analytes to come after that as we continue to push towards ketones, potassium, as well as others. Analytes, we feel that they're an important part of the future for diabetes care and metabolic health. On the NutriSense point, we did, yes, we acquired NutriSense. They've been a partner of ours for a long time. And we really believe that that technology, when you look at the engagement it drives and the insights that can be derived from the work that they've done, they basically built a system that was CGM-guided nutrition insights and coaching. And so it was based on professional metabolic health coaches and nutritionists that could basically guide CGM patients. And one of the exciting things there is they have lots and lots of history of doing that. And so as we look at that kind of amount of data and the amount of insights they've been able to provide over time and the outcomes that they drove with it, we felt like that's something that should be part of the Stelo and G7 and basically our entire product portfolio. So we'll be continuing to integrate that technology and advance it with the team, with NutriSense, to really make further the insights that our products provide and drive really significant outcomes. And when you think about just metabolic health in general, such a big part of that is the nutrition component. And so you've seen us continue to expand our product, the ability to capture nutrition. And the new Stello app now analyzes nutrition and gives you a full breakdown of the meal, whether you barcode scanned it, you know, packaged food, or you took a picture of something that was prepared. And so that's the type of technology that can really help power this.

Yeah. And, Joanne, to your question on guidance, you know, a big chunk of the revenue that's in NutriSense is actually CGM pass-through revenue, and it's predominantly Stello. So there's no real change there, right? We've always sold it and passed it through. So that's there. the piece that you're referring to is what incremental revenues. And I would say this, I alluded to a bit earlier, the revenues that are non-CGM related, less than millions, you can count on my hands. So it's really not a huge revenue item. It's quite small relative to at least the size of Dexcom. What's big is the technology and the technology capabilities. And that's ultimately why we did it. The OPEX has been assumed into it as just typical run rate. We were able to raise the guidance in terms of operating margin performance and assume those costs in, you know, over the quarter. So hopefully that gives you some context. And, you know, sometimes, you know, to give you a feel for kind of what the commitment in terms of, you know, dollars, et cetera, you'll see it come out in the 10Q. We didn't publicly disclose it, but in the Q, you'll see in the cash flows kind of what the cash commitment was in terms of purchase price.

And our next question comes from the line of Anthony Patron with Mizuho. Your line is open.

Great, and congrats here on a nice print. A couple on type 2 non-insulin intensive. We're hearing from, you know, some docs in the field there that potentially the coverage decision could have some, you know, requirements around it, specifically around A1C verification at various increments, let's say three, six months, nine months. So, what do you think coverage could potentially look like? Will it have, you know, certain verification requirements to keep folks on CGM in this patient category? And then in the study, it had a 97% utilization rate of CGM, very, very high.

But when we get to real world, what do you think the utilization intensity for the type 2 non-insulin intensive patients could look like thanks and congrats again yeah thanks uh thanks thanks for the question um yeah absolutely well just just starting with the utilization um first uh we have our real world um registry and so we also in that data set see very high utilization not quite at 97 but well above 80 in this population i think that that speaks to and reimbursed for those that have coverage today in the commercial space for the product, the utilization, low Autopac cost in that environment, their utilization is really, really quite high. To your question around A1C, you know, that's not consistent at all with what we hear in our discussions. If you look at the way CGM benefits users, whether they have a low A1C or a high A1C, the benefits are for everybody, right? Those with higher A1Cs do see larger improvements, but for the whole cohort, you see the improvement. And when you think about the ADA standards of care, the focus is 7% A1C, that's the target goal, and many people who aren't using CGM are not achieving that. And so we feel that the Connect study is actually gonna continue to evolve those standards of care even more than we've seen in the past, so that all people with diabetes are recommended to use And so, the other thing to think about, too, is if there was some sort of A1C kind of threshold, which would, first off, be inconsistent with what CMS has done in the past, it would also be quite inconsistent with what's already out there with the commercial coverage, which is very broad, you know, for anyone who's diagnosed with diabetes. So I think it would be quite inconsistent with that and create other issues. So it's not that the type of idea is not consistent with what our discussions that we've been having with CMS and others out there.

And our next question comes from the line of Michael Pollark with Wolf Research. Your line is open.

Good afternoon. Jake, at the beginning of your prepared remark, you noted product performance was excellent in the quarter. I heard Jeremy allude to some manufacturing and quality stuff in response to one of the prior questions. but i'm hoping you can just unpack excellent product performance a little bit more for us maybe give us the metrics scrap warranty rates returns complaints obviously this was a challenge last year and you're rolling out a new product so it's good to hear things are good um i would love any further color on that mention thank you yeah thanks thanks for the question yeah we did see excellent product performance and when um you know one of the biggest measures there is mps which is why I mentioned that.

The MPS that we're seeing on the G7 product has continued to increase the last three quarters in a row. And you're right. We had some challenges last year that, particularly in the out-of-box failure rates, that, you know, disrupted things. Patients were, you know, upset. It was not a great experience. We've addressed all of that. And the team worked really hard across the board to make sure that we could do that and solve those problems. And, you know, really it really comes down to as we continue to advance the technology our focus is always on building the absolute best customer experience whether it's in the product or in their experience with our customer support and so we have seen complaint levels come down because of the enhancements that we've been making and so i think if you just look across the board the product's performing fantastic we're going to continue to advance it and we're going to continue to improve that performance. Our job there is never done. You know, if you think about the evolution of CGM over the past 25 years, the products have just gotten better, more reliable, but there's still room to go. As we mentioned with our G8 product, we're very excited about what it's going to bring in terms of performance to this population that could benefit. And it's really everybody, whether you have diabetes or not, accurate, reliable glucose data is so critical, even if you're running an AID system. So product performance has been excellent. We're going to continue to build on that as we launch 15-day around the globe.

Yeah, I know sometimes you've asked the question about, well, how do I see it? And certainly the NPS scores is a good way. The other way to look at it, and, you know, it's one that's kind of a little bit easier to see, even though it's not clear directly, is you look at the margin performance, right? Because some of the things that were impacting margin were freight. Some of that was related to doing the work around product and getting it there. And then, you know, obviously some of that's related to scrap. And as you've seen that improve pretty steadily as we moved, you know, from Q2 last year into Q3, then again into Q4, obviously then into this year, you know, that improvement in performance is a lot of the work that that team was doing is Jake alluded to working real hard over the back half of last year and then into this year. So the best proof point is to also look at the results and see that improvement. That is a result of a reduction of one of the significant ones, the reduction of scrap, which is focusing on quality as it runs through our lines.

And our next question comes from the line of John Block with Stiefel. Your line is open.

Good afternoon.

Jeremy, maybe just on the financials, you had the gross margin raise of 50 bps. Is that a function of, you know, a different price of oil assumption, call it relative to three months ago, or is that more, you know, underlying efficiency that you're seeing and you still have some cushion on oil prices built into the guidance? And maybe just like a second part, but still same question. And based on the guidance, it seems like the 2-H implied gross margin is in line with what you saw in 1-H. But you do have a growing percentage contribution from the 15 days you called out. So, you know, what prevents further GM expansion from the 15-day tailwind? Is it Ireland, Paul, turning on that negates that tailwind?

Yep. And I'm certainly happy to answer those. Yeah, I think, you know, on your second – I'll answer your second question first. You hit it spot on.

You know, the expectation was always a peak into Q3 and gross margin that would step down as you turned on Ireland.

And that's exactly it. Underlying the performance in terms of just core performance underneath it, you'd expect that to continue to come up. But you do have turning on a factory and therefore the cost of each individual product manufactured when you have a factory just turned on. It just it goes up significantly. And then that leverages over time. The underlying question I think you're getting at is, hey, are you starting to see a manufacturing efficiency? are you starting to 50 15 days we are it's just i'd say there's a little bit of that turning on ireland you know back to your first question in terms of then you know oil you know there's a lot of things that you the way the way it kind of works here is as we purchased resins during these windows you know it takes a little time for the price changes in oil then to flow through into product and to flow through into our pnl you know we'll buy the resins and you usually take just like you see at the pump it takes a little bit of time for that to flow through and i'd say gasoline is much quicker than the flow through in resins. So we've bought in those, we've made that product, that product gets put on the balance sheet, then it comes through in future periods. So you've seen some of it play through here in the second quarter. You'll see still a little bit of some of that play through here in the third quarter as we've purchased, capitalized, put on the balance sheet, amortized through. So I think basically what you'd expect to see is the guidance we gave you last quarter about preparing for some of that headwind associated with the oil prices about in line with expectations. So the raise is really on underlying performance improvements on our lines, throughputs, et cetera, based on work we've done over the first couple of quarters.

And our next question comes from the line of Issy Kirby with Redburn. Your line is open.

Hey, guys. Thanks for taking my question. I wanted to ask about the Stello app redesign. I appreciate it early, but any feedback on that around engagement with the app? You also mentioned bringing some of these features over to the G7 app eventually. Which features are you going to be looking at integrating? I'm just wondering how you're thinking about app design, particularly as you go after this type 2 non-insulin population.

Yeah, thanks for the question. The new app for Stello has been really well received by users. A lot of it was based, a lot of our redesign of the app, both the functionality as well as just the design aesthetic, was based on user feedback that we've collected as Stella's been out for over a year. And so, you know, you look at reviews, you look at customer direct feedback, and we've got a lot of people using the product. And so you take all that feedback in, and so that's really what we built that new app on. It is a completely new ground-up rebuild for us, and so it is going to become our platform for future apps. And so, the question around, you know, moving those features to G7, it's actually more the concept of moving G7 to Stelo. And a lot of the functionality there is going to, it's beneficial for all users, the nutrition, the coaching. Obviously, there's some different kind of aspects to it when you think about the alert system that G7 requires, right? Stelo doesn't have that, but a big part of what G7 does is the protective features, the predictive alerts, the connectivity with automated insulin delivery, the share follow system. So we'll basically be bringing that onto the Stellar platform app for those G7 users. And so I think one of the exciting things here is that there is a lot of overlap with the user needs in these populations. And so we're using Stellar as kind of the tip of the spear for innovation. But with the reception we're seeing from it, it really hits the mark in terms of advancing it. And one of the things I'm really excited about is people who tried Stellar maybe in the past and didn't get the insights that they were after. They couldn't, you know, didn't see as much value in the real-time data. This new Stellar app brings a lot more contextual insight. And so hopefully that gives them the opportunity to try Stellar again and see if, you know, it meets their needs. I think we're going to see a lot more people that are using it a little more consistently than we saw with the original Stellar version.

And our final question comes from the line of Richard Newhitter with Truist Securities. Your line is open.

Hi. Thanks for bringing me in, and congrats on the quarter. Maybe just one follow-up to John's question earlier on gross margin. You started to get at it. You're obviously seeing improved underlying trends in part related to 15-day. I guess, when can we expect to see the peak impact from the 15-day compound? You know, is that, if you're exiting at 50% this year into next, you know, does that mean, you know, one of the quarters in 2027, you know, that'll be the final kind of stepped-up run rate? I'm just trying to get a sense for kind of when we might feel the max incremental impact of the song-going kill impacts.

Yeah, you know, it's a good question. And I'll kind of point maybe a little bit back to Investor Day, because, you know, we try to give some context to the cadence of the rollout. And so, you know, what we're talking about is U.S. 15-day G7. And, you know, obviously, we expect that this year at, you know, approaching 50 percent. If you do an average over the course of the year, you're at 20, 25 percent. Obviously, next year, if your starting point is approaching 50 percent and you go up from there, that's a meaningful step up. So certainly in next year, the step up is going to be more. The other thing you have to be mindful of is there's a lot of product going on around the world today between Dexcom 1 Plus and G7 outside the U.S. where that's also going to start to roll in. So it's actually going to be a multi-year improvement as you start to think about sunsetting G6, which is, you know, obviously in process now. as more and more folks move off of G7 10-day to 15-day. And then, of course, G8 is going to be on a 15-day platform. So what I would say is there's not really one quarter where it plateaus. It should be really a steady help. In terms of the U.S., which I think is kind of where your focus is, obviously the biggest improvements are going to really start to accrue into next year, just given the starting point for the year is going to be so much higher. But nevertheless, I mean, look, it's all good. And I think as we move through, we'll keep you apprised in terms of what that transition looks like. We'll also keep you apprised in terms of our OUS markets. And as our OUS markets come on and our D1 plus markets come on, I think all those are also really important, too, as you're building kind of a global model. But, again, easiest way to look at the timelines, go back to the investor day, I think you'll see kind of the cadence of when we expect those to hit. The first OUS one, you can see we just got approval in Canada for 15 days. So we're going to start knocking those down as well. And so it's going to be kind of a steady drip, I think, over time, but certainly a positive one. And we hope everybody sees the positive quality results that we're seeing here in the U.S. We expect that.

And that concludes our question and answer session. I would now like to turn the call back over to Mr. Jake Leach for closing remarks.

Thank you, Operator. You know, as we wrap up today, I would like to take a moment to recognize the people who make Dexcom what it is. Across our company, our employees show up every day with an unwavering commitment to the people we serve. Our results this quarter are a reflection of their passion and commitment to executing on our mission. We're proud of the momentum we've created, but we believe we're still really early in the chapters of a much larger opportunity to transform how diabetes and metabolic health are managed around the world. The road ahead is very exciting, and we're confident in our strategy, our innovation pipeline, and most importantly, in our people. Thanks, everybody.

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