Senseonics Holdings, Inc. (SENS) November 10, 2026 Conference Transcript

Thanks, guys. We're going to get started. Good afternoon. John Block with Stiefel, and I'm happy to welcome back the team from Senseonics. We have Tim Goodnow, CEO, Rick Sullivan, CFO, and Brian Hanson, CCO. These guys put up a really good third quarter, actually just reported last night. Revenue ahead, gross margin ahead, raised guidance for the third time this year. So a lot of good things to talk about as they successfully brought back in the commercial operations in-house and they're clearly executing. So Tim, that might just be a good place to start. You know, talk to us about third quarter, but also more broadly on the strategy that you sought out several quarters ago to put it in place and how it's unfolding. Sure.

So first, thanks for having us. We appreciate the time to be here. Third quarter was, we're obviously really excited about the performance and the demonstration, but it frankly was a culmination of just that. Really, 2025 was a year of transition for us. We had recognized in working with our partner, Asensia Diabetes at the CARE, that it was time for us to transition all of the commercial responsibilities back inside the organization. So, 2026 was the implementation of that, and what that really gave us was the ability to own our own destiny, if you will. So, we were able to make the call. We recognized some time ago that awareness was really the key issue for ever since, our key product, and that we needed to make the investment in it. So we did that started in late 2025, and that really led to a good strong first, second, and now third quarter. And as we've given guidance, we expect there to be good performance in the fourth quarter as well. So revenue was really important in the quarter. That drove a nice... A nice lift and a nice step up in the gross margins. We announced an important new partnership with a pump integration. We've had a great relationship and great results with SQL and their Twist product. And now we're going to expand that with the new partners with Beta Bionic. So, you know, really good work by the team, but obviously a lot of work went in it to get us here.

Okay. And importantly, I'm guessing you feel it's sustainable and durable going forward. Maybe if you could talk about the biggest positive surprises from bringing the commercial organization in-house. I don't know if this is a little bit for you and a little bit for Brian, but talk to us about biggest positive surprises and then also maybe just touch on maybe some of the challenges that unfolded as well.

Well, I'm sure we'll get to it. I'll let Brian speak to the positives because there's been many of them. You know, we continue to do work, of course, on our European integration. That is a little bit behind the way that the approval process went for the U.S. We've now been on market for, frankly, two years. The CE marking now is taking longer to get approval. It's more than a year behind. So that delayed the implementation of the 365 in Europe. We're working on it. The team has done a great job, and we've now got all the transitions in place, but that was probably the one area where we want to continue to make progress, and we certainly will. They're very excited at the 365 product. It really did turn the corner for us. In the U.S., so we're going to see that in Europe as well.

On the positive side, Brian, there's been a lot of them. Reducing complexity, right? Reducing, John, just the interface between the two companies. Having a board seat at Sensionics and having my president enrolled at Sensia, I kind of wore that hat, but I also had folks that were forecasting between the companies and working on contracts between the companies and just overall liaison management, and we don't have to do that anymore. So we're not fighting with Rick about forecasts and product and what have you. Bringing that all together, it's just reduced the complexity and increased our efficiency, and it makes life a lot easier, to be honest with you.

Complexity down, efficiency up. Maybe talk to us also about the sales force and how you're able to retain, I'm guessing, successfully both in the U.S. and abroad.

Yeah, and our remarks yesterday, we've had great retention of our team, and I'm really proud of that. Coming over, they got some equity. They got involved to spend more time with Tim and the management team, which is very beneficial to them. Again, it's a cleaner process. But our team in the U.S. was already a unit to itself. So we essentially changed business cards and computers on January 1st. We had to decouple a lot more of the things in Europe, and so it became a little bit more complicated and took a little bit longer. But again, not necessarily a negative, just a time function. So they'll be much more productive and very similar to what we've had now for the full year in the U.S., OUS, as we enter 2027.

Okay. And guys, again, if you have any questions, please just throw up your hand. I'm going to plow forward. I'll stick with the U.S. and maybe the growth opportunities. I don't know if you guys have given this metric. We did some survey work several weeks ago. How many physicians approximately are prescribing 365 here in the U.S.?

Yeah, it's, I mean, it's in the thousands. I don't know if I have a number off the top of my head. You know, in an individual physician, you know, it's probably north of 5,000. Now, sometimes an account can have multiple physicians at it, so we don't necessarily count it that way. But it's grown significantly, you know, over the last year, and really over the last two years with 365, so.

And then obviously you're augmenting that with Eon Network as well.

Not from the prescribing side. Remember, the EON network is really on the inserting side, and it is important, especially with Medicare, that those be two distinct entities. Typically, what Brian's team is executing on, if somebody comes type 2 from primary care, they're not typically going to do the insertion. That's where EON care comes in. So we'll partner, we'll facilitate that connection. The patient is being seen by that physician, we'll get the script, and then we'll do a warm handoff to the EON that's doing the insertion.

Okay, and I'll go back to EON. I guess where I was trying to go with this is when we think about the future growth for Sensionics, how do we break it down between utilization amongst those 5,000-plus current docs that are prescribing versus bringing new docs into the fold, call it same-store sales growth? versus a new store. And I mean, obviously, the growth rates have been very solid. But how do we think about the contribution from each of those parties going forward?

Well, it's both. I've got 40 some folks in the field that are calling on the physicians and their job is to really penetrate. And they're doing a great job of that, especially in our large accounts. They're getting larger, which quite frankly surprises me. But they continue to just get larger and larger for a variety of reasons. One is the economics are good on the insertion side for those accounts that are doing it themselves. But we're also driving additional reach by our direct-to-consumer advertising, and that brings in the primary care physician more in the Type 2 space that we're not able to call on with 45 reps. And so that's where you see kind of the proliferation of the prescribers and the need for EON care for those that are prescriber only. Thank you. We made that decision kind of last year, and that recipe has really worked this year to unlock access for us.

Very helpful. Maybe I'll pull on that direct-to-consumer as a good segue. So I think part of the problem with Asensia back in the day was you guys are spending on DTC, but you're sharing the economics with Asensia, right? So it sort of simplifies when you take control of everything. Rick, any metrics on the amount that you're going to spend on DTC in 2026, and then how do we think about the DTC spend going forward?

Yeah, we recognize that a PHC Asensia wasn't investing in the DTC channel as much as we'd like to drive that awareness. So at the end of 2025, the last two quarters of the year, we invested Sensionics about $13, $14 million in DTC. And that certainly drove a great number of leads, increased awareness, but it wasn't as efficient as we knew that it could be. So for 2026, we took that same DTC spend, that $13, $14 million, and we spread it more evenly across the quarters in 26, with about 40% in the first half, 60% in the back half, really aligned with our revenue expectations for the year. And we've seen that be much more efficient from a cost-per-workable lead and really all the other metrics that we follow from a DTC conversion perspective.

And thoughts on 2027?

2027, we'll certainly continue the investment in DTC. It works, and it works well. We'll give more better guidance, I think, early in 27.

And Brian Ulrich, maybe this one's for you. In the international markets, like DTC is sometimes. A little bit more problematic, right? I mean, some countries have rules and regulations on how much you can lean in from a direct-to-consumer perspective. The EON network's been very successful, but here in the U.S., I think, Tim, you'd agree one of the biggest issues for 365 is awareness, right? So how do you get after some of those same challenges or bottlenecks in the international markets that you've successfully addressed here in the U.S.?

Yeah, we're looking at all of it, right? We're looking at the insertion network and where we can subsidize that in Europe, and we're looking at direct-to-consumer advertising and the markets that allow us to do that in Europe. When you can't, then you're relying on your reps that are calling on the diabetes education centers, and certainly, you know, the field activities are fruitful, but you don't get to the patients at the same level. You also have to remember in Europe, we don't have as much access to type 2 right now. That's growing more. So the type 1s are typically seen in the hospital diabetes education centers. And so they're a little bit easier to get to in that regard. But it's a mix and each country is different. And we treat each country differently based on what they allow us to do.

Okay, and so we can maybe expect some DTC and any network in some select OUS markets going forward?

We've done a little bit, but just scratched the surface. One of the nice parts about having 365 on the market for two years here in the States is my U.S. team is taking a lot of the best practices and helping my four country leaders in Europe adapt their best practices going forward here and what we've learned from it. So I think it's going to be a mix of both of those.

Okay. And just maybe longer term on the P&L, you know, International was initially going to be 20% of revenue this year. Very good growth, U.S., and now you're predicting we're 15%. When we think about 27, 28, international smaller numbers, more in an infancy stage, how do we think about international's contribution to the P&L as a percent of sales going forward?

Yeah, I mean, we'll certainly give that breakout early next year. But as I expect the continued growth in the U.S. and Europe really just starting its 365-day journey the past several months, we'll expect that growth to be probably a little bit smaller than the U.S. growth initially. So that percentage of a total revenue could probably be about where it is today or a little bit lighter.

Just as it gets its sort of sea

legs underneath it and then maybe the traction increases from there. Exactly.

And let me stick with you. The current burn rate, if you want to talk about, you know, where you've been from a burn perspective, and then I think, you know, $127 million in cash at the end of the quarter, what do you also have access to under the current facility?

Yeah, so for 2026, we expect to burn about $120 million, so $10 million a month for simplicity. And that was always the expectation. $127 million in cash plus $85 million of additional capacity under the Hercules facility, so a little bit north of $200 million. We'll have access to the next tranche of that facility here this quarter and then be able to draw on the remainder over the course of 27.

Okay, so $200 million-plus pro forma cash, and you feel that's fully funded to get to where you need to go?

Yeah, we feel really good about the balance sheet and that debt facility with our partner. In 2027, we expect revenue to continue to grow. With the strong margin profile we have, north of 60% next year, that'll continue to contribute to those operating expenses, and we'll see some operating leverage in 2027. So that cash burn will go down, and that... Cash on the balance sheet plus the Hercules facility will take us to the Freedom product, which we're extremely excited about because the margin profile of the Freedom product we expect to be north of 70%, and that really will be the catalyst for our cash flow break-even.

Okay, so I'm going to break that apart a little bit because I think there's some... Like a little bit of a hidden gem somewhere in there. And then, Tim, I'll get you to comment on Gemini and Freedom. So last night in the Q&A, I was able to get out of you. I thought like, hey, you're comfortable with 100 million plus in 2027 sales. I still am. Okay, and you still are 24 hours later. I'm good to hear. Increasing gross margins year over year, right? And OPEX might move slightly higher. I mean, you're going to invest in the business, but some of the TSAs are dropping off, so maybe OPEX slightly higher, 27 versus 26.

Yeah, we think we know that with 2026, we brought over the foundation of our commercial organization, the market access team focused on reimbursement, the sales operation, the whole marketing team, all that's now in place. So any additional investment in SG&A for 2027 will really be to drive revenue. So that's DTC spend inside sales team to call back the leads from the DTC and maybe adding a couple of territories where we feel we might need some more revenue. Capacity, and so. Because of that, we'll start seeing the operating leverage that I've been talking about in 27.

Okay. And then when I was alluding to, like, maybe a gem somewhere in there, Tim, last night you talked about Freedom being targeted for 2028, and we'll get into that. And then, Rick, you alluded to reaching, you know, cash flow break even shortly after Freedom. So just trying to, like, I don't even know if it's reverse engineering, but, you know, if you... If GMs go to 70% from like 62 now, because Freedom's a higher margin product, you need a $60 million quarter at a 70% gross margin. It's $42 million of gross profit dollars, because DropX is running around $40 million a quarter. So do you expect... So exiting 2028, whether it's 2H28 or even 4Q28, to be knocking on the door of about a $60 million quarter?

Yeah, when you think about what we're going to do in 4Q of 2026, based on our guide, right, it's 23 million. So that's two years from now. I don't think 60 million is a scary number at all.

Okay. It's well ahead of where consensus currently is, but you just see that trajectory being ongoing traction in U.S. Very early penetration and the international runway that you have in front of you.

Yeah, I mean, it's a $15 billion market, right? For us to continue to take the share that we've been taking, you know, the product is demonstrating it's going to do it. Ryan and his team are executing on it. Um, you know, we're, uh, we're comfortable.

Let's be clear, John, I haven't negotiated this number yet with these guys. So they're not signing me up for that just by, because I'll work with a couple of kickers for you, brother. Yeah. Thanks bud. Appreciate it.

That is with the freedom product. Right.

Right. Right. So that's where I was going to go with it. I was going to say, let's sort of take those assumptions, um, and work it back to the pipeline. So, I mean, over to you, Tim, maybe just level set, you know, people in the audience, let's start with Gemini, what that is, what that does for you guys, the timeline, and then we'll move to freedom.

Yeah, so the first thing to remember about the portfolio is we are very excited about the performance that we have with the 365. The sensing capability is honestly, this is not just the company talking. Talk to our customers. It works. It performs very well. People love the analytical performance of it. So what we've done with both Gemini and Freedom is we take that same sensor that exists today and we do some engineering appendages to it. Gem and I were going to add a battery to it. So what that means is that it will self-power itself. It won't need the through-skin transmitter anymore, and it'll collect, you know, 24 hours a day glucose results. Where can that really be successful? In the patient that's less and less involved in the management of their disease. So think about when CMS makes the coverage. And the LCDs for people that are not on insulin, they're going to be less intensive users. That's a great product for them, right? That's what we're looking to do. And they'll be able to use the product without anything on the skin. When we go to Freedom, we've taken that same battery technology, and then we add the Bluetooth internally to it as well. I think of Gemini, it's a home run product, right? It really does the differentiation. Type 2, which is a huge population, gives them nothing on the skin. The Grand Slam product is Freedom, right? Because it is everything for everybody. It can connect to the pump. It can do that 24-hour measurement. So that's the direction that we're headed in with those two generations. But they are all built on the exact same sensing chemistry that's working today. And importantly, that sensing chemistry has the regulatory approval.

Okay. I'm going to follow up on both those products. But I got to ask, any line of sight that you have into CMS with type 2 NIT and the timing?

We're talking to CMS. Of course, they're being very, very closed-lipped about the other conversations that they're having, but I think everybody sees that there's been, you know, I would anticipate there's been some requests to change the LCDs to cover people that have diabetes but are not yet on insulin. You can certainly see that some of those wheels are in motion. I don't know anything about the timing of it. I wouldn't be surprised if there's some connection with the work that's going on in competitive bidding, right? If they're going to open up the market so much more, I would imagine that there are going to be some concerns about costs as well. But, you know, I've heard from the others that the timing is in the next. One to four quarters, I wouldn't expect that to be unreal, you know, because it lines up with the competitive bidding timing they've talked about.

And then talk about, you know, over the next one to four quarters, how that would arguably line up with Gemini. So, you know, maybe remind everyone of where you are with the process and the timing in terms of 2027 for Gemini.

So Gemini is targeted for 2027. We have pushed it out a little bit. We did make the decision in this fourth quarter to really focus on getting the clinical trial started for the first in man for Freedom because it is such a big product for us. So instead of targeting the completion here in the fourth quarter, we are going to push that into the first quarter and push out the submission as a result of that. That, again, was done for Freedom, which is the right tradeoff to make because we are absolutely on track for 2028 to deliver the Freedom product.

Okay, and if you had a bucket... You know, like a 1H, 2H type of thing, Tim, based on the comments that you just made, do we think 2H27 Gemini, 2H27, sorry, 2H28 Freedom might be a good place to land?

2H20, 27, probably for Gemini. You know, we are going to work real hard to keep it, say, Q2 plus or minus a quarter for Freedom in 28.

Okay.

Perfect.

Maybe the last one on Freedom. And you're... Early discussions with the agency or future discussions with the agency, what do you need to be on the same page with them in terms of protocol, in terms of what you need to run or prove to the agency? Because as you mentioned earlier, it's the same sensor. It's adding the battery. It's adding the Bluetooth. So do you have to validate the accuracy of the sensor? Is that already taken care of? And you just have to worry about a couple of the other dynamics.

Yeah. So the first thing to remember in the regulatory approval process is we did achieve and have the ICGM designation. So the ICGM designation declassifies you from a category three down to two, right? Two is a 510K, which means you need to show equivalency to a predicate device. Right, so as a Class II device, what we'll do is we'll show that it is equivalent in performance between the current 365, which is approved, and the new configuration. So they'll then ask you, okay, what's changed between the two? So in Gemini, it's just the battery. So, right, the powering came from near field. On 365, and it comes from an implanted battery on the Gemini product. So they'll ask to prove that the battery works, you know, in the configuration, right? So that's a pretty well-known area to do, right? Pacemakers do, you know, battery-powered today. So the trial will be set up to demonstrate the functionality of the battery. And then in Freedom, it's really about the Bluetooth communication, right? Getting the data out. So you've got to show that the Bluetooth function works. The sensing, and we're purposely doing this, right? We have ICGM on the sensor. We don't want to change that at this point. Don't change that, right? And it works.

Let's talk pump partnerships. Started with Twist. You got Beta, I think, ILAD, and it will be with Mint upon commercialization?

Sure. Let me ask Brian to speak to that, but I do want to speak to the performance of the Twist product. It's been super. We've been very excited about the uptake that we've gotten. We have outpunched our weight significantly in regard to penetration that we're excited about, and also would like to point people to the clinical performance. There is very strong. We had 76, 77% time and range for our real-world experience. Best in class in regards to integrating ever since with the Twist Bump. So super happy that we did that. I've been a great partner and going to continue to be, but we're also excited about the next step.

Yeah, I know the beta folks well. Many of them I worked with at Tandem. They've got a good product. They've got a nice installed base. They've got an exciting patch product coming up in the early part of 27, which we'll integrate with as well, hopefully at launch. And so launching that here in the next week or two just expands choice for our patients. And we continue to have discussions because I know your next question, because it's always the same. When do the other ones come? I think continuing to expand and offering more and more choice is beneficial to everybody. And the success we've had with SQL and the success I guarantee we'll have with beta, we'll continue to unlock those other discussions. And when we fit into the proper slotting in their development programs, we hope to add additional pump partners to our profile.

Sorry, Brent, did you say on beta, it will be in the next few weeks being Mint, or you meant with Eyelet?

Eyelet first. Mint's not going to be a product for them until 27, so whenever they launch that, we should hopefully be ready, integrated, and it's the same architecture, just a different footprint, obviously, being a patch.

Yeah, I was just wondering if you're telling us to pull forward Mint. That's what I was going to do.

That would be nice for everybody, but I think they're doing really good on that one.

And shockingly, I was going to ask about the other manufacturers, but I was going to come at it a little bit differently. Are those 2027 targets or are those 2028 targets?

We're going to do everything that we can to accelerate. Right now, there's some capacity issues at some. There's some technical issues. So, you know, the guidance that I've given on the new additions is expect one by 2027, which we've now already announced. And I would anticipate we're going to plan in our modeling for 2028 for the other ones. We'll do everything we can to pull it in. But at this point, you know, there's some dynamics that they need to work through. Um, reminder, unfortunately for the sensor side, all of the work heavy lift is done on the pump side, right? If it was on the CGM side, we of course would absolutely prioritize it.

And these pump partnerships, Tim, I guess can give you a better reach into type one. Maybe what was it? What percent of your starts are type two?

We're heavy type two for a couple of reasons. One, first and foremost, of course, the product. It's a great product for people with type two, right? I put it in, especially with our Medicare population, right? The doctor does it, so they don't have to do any new reinsertions at home. They feel real good about it because the doctor does it. And as a result, we've indexed towards the type 2 population. So we're 80, 85% type 2 today. That is changing as the new pumps come on. You can't lose sight. You know, all of the CGM companies make their real money on the type 2 population. AID is very important. We'll participate in it. But the big population of diabetes is type 2.

And so where I was going with this is, you know, the pump partnerships can help at least increase your reach into type 1. But last night, you know, following the call where you gave me a little bit of pushback and it made sense was I didn't really think type 2 NIT and Sensionics, you know, popped for me. But you believe it's a good product. My point is for type 2 NIT, you always hear they're going to use a sensor, but sporadically. They might only use it 50% of the time, right? So that's the big debate, but you believe it. You've actually got the right offer. Well, there's a couple of things.

A little bit of the data. One of the number one reasons is when it comes into the DTC, we need to create or get what we call a workable lead. One of the number one reasons that a person comes in with diabetes that isn't a workable lead is because they're not on insulin yet. We get a lot of calls from people that are interested. Remember, what happens with diabetes in the type 1 space, it's an acute here and now issue. So they're monitoring all the time. They need to be woken up in the middle of the night with an impending hypo. That doesn't happen in the type 2 space, right? They want a monitoring device that's as simple as possible and has less interface and less interaction with. But ever since is actually a great reason to do that. You pay a price on day one by going to the doctor to have the sensor inserted, and then for 374 days, right, you don't have to think about it. So if you want to use it, you use it. If you don't want to use it, you don't use it. I think it's a great solution for them. It costs the same, right? So the real clinical benefit is there. The economic benefit is on parity. It's just a simpler product for them to use.

One of the last topics I have, territory managers and the EON network. So maybe on the territory managers, I think you're right around 45 in the U.S. Do I have that number right? Where do you want to take it? And then maybe if you could just comment internationally for us as well.

Yeah, I think you're right on the number this year, and we'll look at tucking a few in next year, splitting two probably of our larger territories just from an efficiency perspective and getting out in those regions a little bit more. You know, I'm pretty happy with where we are this year and where we go into next year, and increasing the efficiency internally is more important to me. We have our OUS team set now. We've hired all of our reps to replace the blood glucose reps that we shared with Asensia, so we aren't adding anyone next year. OUS, the full teams are in place, and they're ready to sell 365 and ready to do their thing. Next year with success, Rick, we'll tuck a few more in probably as we go through the year. And as we see Freedom's progress, we'll start to scale because that will clearly need some additional investment from a field perspective to cover the volume we expect with that.

And, Brian, sorry, what was that baseline OUS rep number? Like you talked 45, maybe going a little higher in the U.S., but what do you have OUS?

We have about 60 employees OUS, all commercial. About half of those are sales reps.

Okay. Perfect. And maybe the last topic, EO Network. So that's one where the numbers continue to go higher. I guess it's playing a very critical role. Tim, you talked a little bit earlier. You've got your prescribers. They might not want to do the insertions. You don't want to have people traveling very far. So the 100 is going to 120. Do we think $150 for next year? And, I mean, has it sort of started, you know, scaling and paying for itself when we think about the impacts of the P&M?

Yeah, it certainly has. And Eon, for the audience, is our network. It's our medical subsidiary, if you will. And what it is, is it's a network of 1099 nurses that are actually doing the insertions for us. So, as you said, we are anticipating scaling that to 120 by the end of the year. The number for next year will be bigger. I don't know how big at this point. We're still going to model our way through it, but we found a sweet spot in that space. You know, we're using the reimbursement that comes with the CPT codes. To fund all of that initiative. But it's really meant to facilitate a sensor sale, of course, right? Especially as we expanded into that type 2 space, a lot of the primary care physicians are not looking to do the insertions themselves. So this is a great way for them to write a script. We white glove hand it off to a nurse that does a very nice job of introducing the product and facilitating the insertion and reinsertion when it comes.

And 40% of the insertions in 3Q were via the EO network.

Correct. Correct.

Guys, any last minute questions from the audience? Team Sensionics, thanks very much. Great call.

Thank you. Appreciate it. Good job.