DXCM - Earnings call transcript Q4 2020

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Operator

Welcome to the DexCom Fourth Quarter and Full Year 2020 Earnings Release Call. My name is Darryl, and I will be your operator for today's call. [Operator Instructions]. Please note that this conference is being recorded. I will now turn the call over to Sean Christensen. begin. may you Sean,

Sean Christensen

and Earnings DexCom's Call. operator, Full Quarter Year XXXX welcome you, Fourth to and Thank

of Corporate full Our Steve update Chairman, financial COO who President summary and President Vice begins review Pacelli, and quarter Development. agenda with Quen Strategy then of CEO, our will Kevin and outlook CFO; provide Executive Blackford, by and XXXX; from followed year Sayer, from DexCom's the and a and our a strategic a

will open [Operator Relations we performance call safe up that Following are Presentations questions. remarks, our DexCom available website quarter the for your Events our and harbor our page. Instructions]. there statement. Investor prepared the on the fourth note With Please on review related that, also slides to let's

as hereof in make with statements operating after results. to or call date Commission. about risks are the presentation to any Exchange DexCom's we of DexCom, actual All cause report from results required uncertainties, subject the by and Securities constitute in to from and materially statements, and on anticipated forward-looking intentions, Some statements may statements. reflect statements. products, implied forward-looking The based factors available Form statements currently that conform expectations in no forward-looking law, results could this Except as beliefs expressed the actual annual filings those forward-looking to included other These detailed these actual and and to update those assume made the on of by competition, such forward-looking plans the are we in and obligation differ or strategies, this to today's various statements differ any these management's information XX-K materially performance. statements are events, will presentation of could future forward-looking date of

isolation non-GAAP and basis. a will references information metrics with discuss noted, otherwise with cash-based measures of our all call, certain presented tables to considered refer earnings or the fourth comparable presentation in this to our accordance accordance results. their that superior release to be the non-GAAP directly for GAAP the reconciliation on been respect The slides Please not Additionally, in year measures additional to prepared measure. with a in quarter Unless a to financial not during financial as we have most GAAP. in accompanying earnings should are or and results full substitute of and presentation for GAAP financial results these our prepared

to Now turn Kevin. I over it will

Kevin Sayer

joining and today. Sean, for you, you, thank us everyone, Thank

that number Let some by DexCom. the XXXX. for year. new the me revenue first GX by translates This $XXX absolute summarizing the of watermark growth, to X months in million XX% more another than themes of high additions. dollar start a doubled capacity driven XXXX, record Total DexCom in grew patient We accomplished over in of

has gross to great strong inventory job margin gross have the our XXXX, we the team the the our XXXX. to channel. shift margin increasingly leaving ago a to years GX that in position company capacity, done we ambitious in been outlined Our X plans best we nearly that scale to the since since led even scale-up The business with highest expansion the GX. closed of launch XXXX year We in full pharmacy as meet

type market campaign in October to for equipment as made including including international We've you We've our U.S. Many us. completed of DexCom advertising sales one effort initiatives. received advocacy announced X the position of personal you our and therapy opportunity give those includes bring in on intensive Bowl. months the with both campaign This days people in and around to Our needing our growth nearly far have well to sense insulin force, the protective the DexCom enhanced wave, drive groups as about This feedback in efforts of warriors, our and pandemic's the have utilize to off product during forces effort from kicked monitoring those sampling greater a Jonas, a aggressively our ad matter effort we CGM our in bold expansion to a and most in the capacity the of coming Nick we markets. a drive forward puts seen progress recent of Super new of so which as should awareness benefits CGM. us ahead our new are of pursue and work technology. great Nick our preserve hospitals diabetes our support and first significant category belief At to the we joining around to direct-to-consumer established to the look and remote awareness with height who not. diabetes, of

we've kinds We also the expect over us years. Building we next the will our business announced our team that several a the success growth where operations. international meet XXXX to services help the we global Manila, of position of patient serve initiatives in on announced in board, our unit new across metrics customer in service new believe that strengthened we Lithuania several will that

our capacity Malaysia. our building announced be advantages key as in GX logistical we we provide base. growing to also manufacturing state-of-the-art and We manufacturing that will international This will look serve international site third site first facility our scaling to be and

been and We're and happy the received we've GX Speaking in very and pivotal XXXX involved initiate clinicians participants complete us from trial of these first saw results with GX, the feedback trial. has outstanding. the

empower This is a positioned pandemic. to and are in to people progress asset is It of will the will of half both goal of XXXX that health it of in XXXX to of talented well the of our moving potential technology quarter share innovative to unique outcomes. is discussion future. growth able team. same as companies our of lead. and technology combined mission many In way with to us we're XXXX. is is to health can of majority care a up year be what to the goals DexCom digital how our such users privilege the in on say as forward a contributed these for for Steve GX summarize, health the GX on this assured, bring and diabetes accelerate The in system commitment space, into again continuing I DexCom of we we ahead work the featuring are care CGM company, include landscapes has that may rely structural year. continue continued the the another outcomes a year proud I shaping CGM very these proud Quen? But as opportunity use embraced in teams health be Our health And in greater control deliver momentum to to our look and independent as remote that This for any their in today, CGM rest well focused is customers the now the to a team be this of a to Pacelli changes to accomplished review with we exciting way our during CGM for the our with ensure what key in given we development DexCom the there fingerstick delivered. accomplishments To believe Investor to growth we investing pandemic the yet year, over and and mass be clinicians. our yet to Quentin our launch our GX are second ahead, want XXXX to use at a valuable in market scale-up have launch to ecosystems venture investing the Day. of support and are believe monitoring we lead on very cases who related the we and with Ventures growing these which growth that will outlook. We and and XXXX, With our the people is the of that, platforms. belief take as learn from I regulatory formation would opportunity the on DexCom With other greater in a developing DexCom challenges. growth diabetes we offers technologies the well we company ongoing with empowering global recent to to to technology. our fourth financials to the entrance path world clinical commitment capital as It initiatives accomplished outlined of. that are that because CGM, proud of announcing several use manufacturing huge for employees forum a am we is turn still customers pillars with into

Quentin Blackford

Thank you, Kevin.

a a to of for for noted, quarter million reminder, on the as of metrics the financial be growth to quarter otherwise non-GAAP $XXX.X million our discussed release As worldwide of unless on IR basis. today's the well be fourth today website. earnings in Reconciliations GAAP found reported XX%. We as XXXX, revenue presented compared $XXX.X fourth can will representing

for the great momentum lockdowns fourth progressed, the maintaining pharmacy channel. originally of patients is for growth drive shift expectations achievement Even grow for company. the a the a the approaching as in accelerating U.S. And fourth the totaling into the long-term to the in company saw able new our there our quarter pharmacy mix we quarter operating volume. line volumes increasing patient of model with for the the million. year great the into per underlying business unit team. means grew in lower commercial did position are more than over COVID progress of rate were growth U.S. the and additions We we efficient and with an quarter were the $XXX excellent revenue XX% business channel team Our in with our and new while making in job This that for quarter pharmacy new total more quarter channel, our fourth the volume the record a than expected, patient significantly U.S. original revenue year, of XXXX, channel revenue U.S. XX% fourth causing our to the the strength closing

This benefits mark quarter both includes reached performance high-water in the quarter than and DTC continue new $XXX that drive XXXX. growing growth international our We markets. business the markets campaign in strong our less of over in XXXX, XX% internationally several distributor fourth fourth the knowing direct of market even fourth of international the an million quarter in began to penetration a awareness U.S. Our and the of in remains technology, of of our will CGM

the represents our quarter profitability XX.X% organization. or profit of million is of fourth to XX.X% compared fourth in demonstration past delivering the revenue the ability shift gross our $XXX.X The XX.X% years. revenue highest Our quarter of the in gross was pharmacy XXXX. quarter revenue to the margin team channel of of to our navigate another strong X This strategic while across of

of us were to XXXX several $XXX.X million related roughly $XXX.X automation key development fourth in nonrecurring driver margin enhancing Kevin scale-up as includes our for expense of million the of our The areas which more been continue compared As in GX year-over-year to our strongest allowing strategic quarter target to noted, and a capabilities. we spend our software placing in expansion of date, of QX $XX XXXX. of growth new us million successful this XXXX. to also production aggressively efforts position users QX investment, consists in expenses key while has inventory Operating

future totaled to spending throughout We investments income compared XX%, of of the sales of DTC revenue increased efficiency, well expansion sampling XXXX to the U.S. and product quarter programs, or the total $XXX.X and year. year significant million for operating below related growth the growth or revenue for our of our in XX.X% our million prepare XXXX. Even expense was $XXX.X force. for revenue growth the in also XX% fourth XX.X% Operating quarter same DexCom XXXX to with of

XX.X% exceeding XXXX operating the the more than for For margin $XXX.X of with XX% of operating XX.X%, fourth revenue full fourth expansion, revenue or our EBITDA million points Adjusted margin was delivered XXXX. quarter most the year basis to $XXX.X quarter recent guidance. compared we of XXX of of or year, million for

recent XX.X% came basis our better guidance points Our full exceeded most guidance. of margin and original EBITDA XXXX our than than more adjusted year XXX in also

taken growth significant a progress over are few As our margin on the great have our shows, we years impact past that into to ability profitability. steps translate the having revenue

strong for the long cash ahead than us sheet fourth strategic for balance opportunities $X.X of per year. the are simultaneously $X.XX discussed the the Net us. We a laid of was growth move income invest flow continue include to on confident you our related Day in the that exit position remain some greater as by taking investments a fourth the to We operating share. million in that the equivalents billion that towards This out we we increased gives will to investments cash over or cash us at our with as maintain cash and field. that we will quarter X-year believe significantly Investor These XXXX flexibility we allow we $XX.X position trend to arise the quarter the targets activities. term of in the and our in leadership pursue recent

Turning XXXX to guidance.

billion, anticipate XX%. $X.XX representing we revenues month, As $X.XX to full of year we early billion to growth of XX% stated last

patient continue commercial contemplated channel. to drive our sampling sales team efforts to our also force, competitive to around new exceed We've from environment. their and in growth product XXXX, expanded benefits category considerations to the integrated as pharmacy potential into systems our through our well We general drive U.S. advertising, revenue expect as efforts with again awareness DTC extending growth preferred rate our business

Turning margins. to

we considerations several Investor for in long-term margin with expansion, the line we We efficient outlined have and Day. XXXX what position as in recent our at business growth

by XXXX XXXX line For slight and OUS success This to approximately Malaysia. full XX%, our in infrastructure expect of anticipate as to expectations. well XXXX, gross channel our results, in of a related be our which initiative from driven our investments we long-term the pharmacy our scale margins XX% as we in year shift GX facility manufacturing anticipates with up

approximately contemplated reflecting operating investments well gross margin XXXX. XX%, we've as in expect of We as our margins outlook various

at scale than the few its a at know, past business profile anticipated faster over profitably. same years, to the pace originally As DexCom while time, building you the profitability has advanced the much infrastructure

market diabetes still on With the investments. the underpenetrated, with these going offense we're

continuing DTC, new in launch the are mentioned our markets the via products Investor invest to including GX. and We growth Day, the business of new sampling, that we at of

our We a of global doubling the significant force, size are investment U.S.-based the including field sales making also commercial in team.

investments to need. to continue those into which accelerate to and work making CGM research our advanced to looking We and will also on sensing products generations future ability development, of is bring capability. We're in these

profitability while investments shareholders. at these believe we Additionally, long-term time, yielding we same that set will significant Day, at support for Investor the the objectives returns our

these However, in the costs the let guidance near out. term, we play want to be in prudent benefits about upfront incurring and our

expect EBITDA We be XX% will approximately adjusted that XXXX. margins for

Finally, we that start with in taxes to have allowance on a rate applicable earnings. in tax of the XXXX, income will release the to XXXX, valuation is

a the in We range. I for strategic update. that the rate, mid-XX% changes Steve expect now to tax to any be low in With absent law, that, turn over will to call

Steven Pacelli

Thanks, Quentin.

quickly about patients by throughout rely of adapted existing and our XXXX. use could We but could ensured our DexCom of not our Kevin patients thousands great As their that changes new priorities the COVID mentioned, job from did GX. on that benefit the executing only team on a supplies, strategic brought

In customers fact, closed than with up XXX,XXX than we XX% globally, the year end greater of the XXXX. over more

We tools are have on we CGM at growth, software with life-changing that provide knowing our excited patients. this and the impact it can by the

than review and the have peer study it new we as X we studies point in intensive before. X type type of kind the in both step for took insulin months. X validated as and But a reduction further. seen month, therapeutics and result last one published to This users, includes we X X technology Just showed DexCom that customers greater little CGM diabetes AXc outcomes

a patients of our to improvement disease We of affirm significant quality also management, saw of for as burden emotional measured these in terms and life corporate anxiety, our users. empower distress that mission results

users our our increased and software also apps. base, that we and time our of engage the see share outcomes. Across follow who aggressively We time range our increased continue DexCom. improved increased see to Virtual people these Clarity so range for base driving customer are and see we real-time integration range In with and Siri take we demonstrated We can with and more outcomes we more expand XXXX, that sensors of advantage software, Assistant. will Apple's tools for for work users our around who our in improved building time experience users with are to

the expansion. channel, of that type driving most on greater our to will in the reach a for places look As date. in with in we prioritized footprint we Terumo advocate and the force In forward distribution we with as GX as our core define Japan presence near efficient from efforts building X we've DexCom our pharmacy forward outlined campaigns on in of U.S., in includes drive launch is have for had This in the reimbursement France, U.S., channel our intensive reach people DTC well while enhance to foundation completion pillars in where our access insulin and Day offers, continue nearing our into have markets to look partner. international on we expansion including which of decision prioritize underway. recent as we business, to greater which diabetes X for several our all recent sales several expansion, our the care month, X been broadening in that and term little fronts U.S. diabetes key at also our market longer-term positive to and our growth as and And the to the country, conference the are patients, which and presentation a benefits we'll we both continue XXXX clinicians the In awareness the lay access continue markets. offices. DexCom. progress Outside of last initiatives We'll the we type Investor push we our therapy, the across primary X including

third partners X pillar, on the expanding with our non-intensive diabetes, off the level multiple efforts digital our with commercial For kicking and X use CGM of type health are we in extending side. pilots

diabetes. Our will make Health, the with clinical well population. broader Healthstats following CGM basis, on-site of our extension CGM type our today, of DexCom. on providers formation utilize announced of is with increasingly work DexCom up their we DexCom of largest efforts on-site And the health other this the to CGM previous on with debt as an This their We the value X a Recently, screening unit in DexCom members work in in for Everside remain ahead nice confident announced of nation's continues for the one the that X market case make opportunity pilot type we that as clinics, health program. health providers available Ventures.

back the day-to-day in much And stronger from in next pass several I efforts couldn't I'll more the team. development turn meantime, technologies years We make I the accelerate impact advance development make pleased ahead. and outcomes can have corporate that global connections we believe that chance excited this to to lead Look effort. and a Kevin. strategies his to innovation. years. torch to on on I for well our be Quentin build that, it via technologies, are of and truly DexCom positioned identify our health over strategy us to not With will more could and amazing more an the the to this to be front

Kevin Sayer

Thank you, Steve.

pressing providers, in the to Bowl ad. drove discussion we the I in all advertised our we We XXx the is diabetes with people which incredibly who and search that forward year call welcome week were This this recent week so look brief. this more more diabetes. accomplished for themselves. compared of is health to the talking proud superlative, awareness people diabetes one includes why than the Super care for other Bowl of ahead Much I may XXXX what around all benefit conversations to pleased highest the response, by a the memory, of forward commercial, about with and bring tired insurance brand centered volume this any this year. to ad, I'll stand these and drive technology. discussions people There average did grown XXXX. we this conversation more recent Q&A. for public greater with greater providers open we've in the CGM for up access like people to We're any to Sean? are of We would keep time and XXXX, excitement think ultimately XXXX from that now and be these Super advancing

Sean Christensen

the please [Operator you, instructions. provide Kevin. Q&A Thank Operator, Instructions].

Operator

comes Instructions]. [Operator our Marcus from Robbie from And first question JPMorgan.

Robert Marcus

gross lower came million, I'm realize and my what's guidance Can on it use margin SG&A. long-term think So in the to going get but going to in the a walk margin little those thinking for side big us the step-up a XXXX. XXXX Quentin. delta The a $XX need to little guide one, people you expenses? like in through I seems pretty on higher then were is here. you're I bit And XX%, to

So just through investment, will what in be us R&D XXXX? about? SG&A and notable help expecting should you're expenses much of be other versus thinking that and any how And walk we XXXX terms DTC maybe

Quentin Blackford

incredible the I think progress from mention perspective over is we've a first Sure. Thanks, the last I made Robbie. thing of profitability years. would Look, couple

our back XXXX, be to expectation the think margin XXXX. at a margin in set Analyst an EBITDA year we we you the and year original to XX% EBITDA by If Day, XX% delivered

I to in always progress. even than think our to in, make I investments are to And that ought opportunities And that were. real incredible this the testament anything, are known beyond say fact would front we're these made more that incredible us. going we've expectations we're there business we these and now to be a went open seeing we've some in or original investments for be sit to believe progress that making accelerated the us. market of we've opportunities up these So what But got of fact

that investment. making about excited we're So

would will that gross have to few the One, makes through that to On margin gross year years. unique. the leverage the there's last continue But this out things One I we move a over it there's be through. little headwinds the there's to basis drive navigate several to to efficiencies a to the the efficiencies XXXX And of in a out X point of normal side, continues the continue bit of and pharmacy margin course that of have expect take points we couple hundred to 'XX. channel. we

We course in year. part We've expect that see a over we'll in of pick back this up move that year. seen significant last the momentum terms of the its of

is making significant investment other Malaysia. one international capability broke in first our in standing there. The We manufacturing we're ground up

production to of we be for necessary units of see them. of capacity begin from We is which open is have to it into up of it which results going take really that units of hundreds going these capacity as us, of as build starting is teams there production millions to millions we -- capability, and and we out believe tens markets to speak turns

XX%. margin So side results what's points to a on to the back of hundred from couple going that's in gross headwind XX% play that basis out the of

it to we've commercial the force sit few we field There's that there's That's the that is be been drive of team drivers as DTC On over really is tools I year, of for about. U.S. are place commercial the done sales course they to and but nicely into turning the pretty think in an Where obviously to much sampling DTC it's contribute important. a our here in be better bring G&A the doubling effective on the today. expense perspective expense Those R&D, going dials purely talked and load. never to possible. investment us. start and as positioned OpEx We've side, an going able is continue the to and lever resources efforts. they it. We're and from also the to with the up inventory turn to giving need really the as going

this got be you, of So the GX the we're all filing excited the then expenses, behind just that And are We got we've course as got year, launch on. then I'll expenses, over do trial we expenses to that. that finally, going the to well. commercial we able got and remind the

drive things investment an the OpEx But from So incremental expense. all selling those R&D show and in all going that's together up to perspective.

see leverage will G&A. You in

answers I the question you. that for So hope

Operator

And our Johnson next question from Jeff Baird. comes from

Jeffrey Johnson

you of be just X to really X to even points Day. over the about channel X time, whether talked at Analyst how of really about back-end follow-up. talked wanted to front-end years. headwinds XXXX, think X annually. might don't kind would points I It's the X loaded, you loaded to even that be loaded, Quentin, through back going the I that

a does us you going So one, how right said channel much understand And just out help are there, quarter check channel that 'XX? gating. to fall-off this headwinds then that I last in for have headwind those think you XX% If -- we into imply if might in thinking just could year? that. want I XXXX. that's the number, does

Quentin Blackford

call that Yes. the us way XX%, the over that continues Great driven I'd by it, towards is the question. to right line there pharmacy that is part the of headwind weren't yes, little XX the same channel, primarily to do channel shift But term. business course the of important that channel in as into think we the we over direction first Keep channel. points of comes about move margin is is last some year. year, that the degree it. year. pharmacy roughly in to mind, that bit we from in points. perspective, you'll were the a evolve pharmacy see XX exited it with think that you, to remind gross higher profit dollars pressure that's that able what's scale to driving are be long But it, for mix a I top the

QX you've QX. well. you got a and see in tougher as comp the So growth And rates in that

tougher that back the comps start will 'XX first subside see half to in to of in the growth half going You're the of year.

the So back in I do part back 'XX some we as pharmacy evolve the a start think to into shift anniversary see that we part the that bit saw 'XX. that of of you'll of

more we that going Unit do were that think we're to through around settled our growth. 'XX, going the But time growth talk of 'XX couple look, around continues is volume think everything the growth in through I unit out be by that to in much volume here overall into growth. of incredibly Once get As the in head XX% there dollar of it, it. is quarter up We be this strong. out. I right we fourth time there's frame. of XX% units stepping the business a And about see volume growth XX% unit reflective you're as we'll years to to

unit growth continue the drive So strong business. to very

Operator

And our Blair, from William next Kaczor Blair. Margaret comes question from

Margaret Andrew

So X or fund And of of of right shift the there that these groups? types annual type utilization the and upfront, or you've need, efforts the into amongst that or And guys maybe the guess, I one guess, at devices might goals, do to have different managed of I'd like products these it the around are than patient new now? internal patients as patients. that well? sense I different any I venture got consumer is little what you guess, patients is some health bit you as look wellness revenue non-intensively a per

Kevin Sayer

profile Margaret, X at non-intensive a what for use per case. Kevin. take discuss vary patient. revenue believe annual and we this based I'll we internally, think, is to least The condition that. type or is We internally, is on going patient,

per and take we we are ultimately, experience they the the because problem. safety be is to even health We're per system. we're full-time costs giving these number and solving making from lower different example, a better year we use, a the and the patients, going lives not have. healthier And a managing of are patient For will a if revenue but than them

going As far completely. have as what don't I a that number is be, to number

choice. models, be will we'll that as those final the numerous and case the use upon if have use choose times, ultimately these less We and for they ultimate many of way will for numerous use And to stick also I'll use it patients. I've it often, well, think be to said depend I cases. and the their full-time this price

With completely again, technology the side, with patients, different sensing more our side same. wellness and certainly, perspective, will people core the a products, annual remain of different the more revenue in lower many on health distribution from the more to number, many, but interactions glucose, a on respect glucose So the channel.

nutrition-wise, our of talked his when my because Investor he chat Dr. patients you et they making And within off they'd Peter more XX their we deal. go with points Day listened who had for wrong Atia, big accuracy. XX what And decision those as important XXX, they I be heard is to far accuracy. cetera, it's only as and actually As health if and eat said a a between about

other possibly to to at different is know on platforms experience So we these category, things the to in, based look accurate. the fundamental will core the we that that working you software get wearables create, needs for data remain to products Steve new and Where Then data or different platforms the places as ventures sense receive add measure even into be to look at better, we could get technology glucose. possibly you then different data. unit that we experiences patients,

going So we've to being these expand groups. work is experiences the markets something to we going we are try out end future. as numerous have these hit and size goals not At believe going one for in to all us patient the different. We're and day, laid for fits the the require probably of

Operator

from And our next question from comes Piper O'Brien Sandler. Matthew

Matthew O'Brien

of margin making sales you're know at margin investments things. everybody lot things okay, the to think of a little all different I expectations of a you're these more, here and the guidance and ahead the on DTC. of on side is force operating I operating guess bit to side things. I looking saying, So just the But follow-up Quentin, running and

of investments First does you just measure to think we at because that making it effective what's out kind all, laid making a you're not basically how same these then how can these better? investments bit [indiscernible] between X? just do of little the the versus And run even pace already potentially you've you're it most

Quentin Blackford

excited the start contribute. same we'll future time, we start them incredibly and those and reflect think I always into opportunities. that to at And point, pan Well, has bullish at want out guidance. to to Yes. But our we're on see been the approach

we're results got see and making then new come So don't that our We're to I of nonintensive. right excited positive we've around now. be very these the able some of markets updates therapy. starting could investments. validate generate guys with in X going for think We a hopefully, fact open happen up to CGM We're these seeing type revenue from as to some some know to it is we we're more over for them, intensive you for the time. we where it space, the on example,

our led a matter fact, if look As patients. you at by figures, patient of type new X it's

for reach see where current play. where on are some But care does be in sales force side, and to validated. So starting patients, physician force of to be those to example, in we're That's those commercial not got offices. the we've really that primary that's the seen our patients order

added target. of be make. And primary DTC focus, than the that that we're with walls resources, new out today not inside investment we make there's come Similarly, we that of the can best better side. reiterate, investment returns that the their I'll those to primary on the so we've their confident And a as continue that very efforts. see is we going X DTC it, the possibly patients that's DexCom to our

to see on. per we the very we've It per patient to Now being, future? down pour harder we've step Basically, by will until seen, the get and investment there resources in we'll into to on continue that that return been for start as return change. time or bring that may they encouraged that individual

focusing our better think individuals to to the awareness at to be right So and see to for than really continue there's building now efforts commercial patients I be for well. create right these don't patients are the a out as force place us the to where

Operator

Matt Taylor And our from question UBS. next from comes

Matthew Taylor

about is question investments. my the So international

investments about Malaysia. talk that can guess, frame kind you France, up in center the really and I international, would helpful. future new support could anything be means stepping expansion you opportunity? and If with the in that of Japan the really You're what for in the arc that of

Kevin Sayer

pillars the recently X investor $XX-plus We million our of the conference. primary at out we a prepared ago where XXx to at we've for the I for $XXX our opportunity is look addressed. doing as is look sales X indicator, And to as laid to international infrastructure, need what we've bigger were at up question. Thanks made, in We're we over guys. million speech build you it, as do progress from X look by for one we mind, things And every XXXX. would more say, our creatively. And fabulous. the than years we wow, And and need at also that

our letting with think, a to geography take medical and example, going partnership is that get really we be In of country in a technology model whereby the for is business partner I a in watch that Terumo, to Japan for at. us we're that a France, patients. business for look great group leader reimbursement

here. literally will of every But in down country We great bucket. break have international other type some at. looking there. invest a we We models we're There's reimbursement

reimbursement need geographies. one. how we're we this Here's to plans making here, across There's all the and no attack

Where results be to every e-commerce going where We've forward. e-commerce with launched not. so geographies place we platform. we'll great had platform go is an internationally go, first investment we're in it, we've going our key Another probably

after we've in wrong. on investment to as us. apply -- for manufacturing position It to is going Arizona me we investing will facility, Malaysia and out we can scale there. don't all amount go Arizona really But put The tremendous we're whereby Malaysia businesses. that be to factory so can fronts learned ourselves in And in an ultra our is building modern, these a get truly it's a

and part, as and what as we everything the One should far we X.X haves, built. capacity, the of things have, for better we a have, discuss, were years, that discuss selling could as sit we often

With the as ops commercial well, think markets now, forward. and much going as the build much and being strategy go our these team a after opportunity just to we we inventory aggressively as we we're on going more can basis to international with they have able can,

Operator

next Raymond James. from And from Jayson question our comes Bedford

Jayson Bedford

second half launch You mentioned Kevin mentioned on the markets this is other to year. referred in some think in GX 'XX in 'XX. GX -- in Historically, of to the and markets you've I goal launching

say changed that the it but half? expectation Maybe in launch worldwide didn't this the your You it GX wondering the is second implied, a around launch? that just what's Is GX launched was time. plans. I'm

Kevin Sayer

has nothing Jayson, Really, changed.

on the necessary it the of still a just not provide I frame working studies COVID the with and we as for of studies. execution in completed submissions We for are to it. first around approval, the time will get enough study. operating for to data on have ongoing a us We U.S. CE function no. have review ICGM that will prepared, data while. abilities in is And pivotal continue to go There's the or Much the letting regulatory our entities clinics, this yes a pulling on file we're certainly to -- enough we do file uncertainty to schedule. of said, Mark. We off that the us some and

studies, see schedule. first At we've do our end not day, told GX wear They marching they're everything look, and spoken more of back. with to never with patients on who hoped been to investigators everybody GX know we'd they're our like we go have a now. Anything it and they the lay them -- And to we're So run bullish the want well. going is on anymore, pretty I've that that for to product. It it the will done few just and now, out of and to We kind and yellow would be. for. GX a surprise just road to lipped commercial as do not tight people. And of availability, we're it's milestones a I'm question brick better. timing, does, prepare for these manufacturing.

Operator

Stanley. from And Morgan our David comes next question Lewis from

David Lewis

me. Quentin, a for quick one Just,

You XX% to XX 'XX, obviously obviously which growth. points the in talked implies about XX% here volume headwinds of

competitors, a And how your investments, of is major XX% should sort major grow can only commercial larger growth in you're competitor here just which size business, XX% the of making I in is their relative think about 'XX. and they react about volume DTC, investors given One perspective basically, your XX% a the to to your larger little talking volume investments number the to XX%? sort saying from I of your of think about, competitor

Quentin Blackford

as There's the market for Look, is, exactly a thanks going I well. in think the and the nonintensive my the in the front question. to same had takeaway segments to David, market opportunity of There's way. the all runway up adoption open of yet Yes, sitting us. be we incredible intensive of think see I lot is

the ourselves. to we're those to result. in going Over make from and we're we're them, like, very is for ahead get -- not to these the and very to that going different is probably market time, bit with play contributions confident ahead approach get to guidance and then If a can at in time, the potential it's Our same expectations to come as but ourselves investments later look the reality bit 'XX, 'XX, if end the going a they the it's at a it result. some in what be look not opportunities At ultimately which terrific out. be we're bullish comes day, on us. we're of a But It's has ensure new great respect little to of fantastic. going still to happens to that a going unique, of of this

incredibly in I for runway success the you've this opportunity, of which lot have just a players space who of validates more got here X there's bullish a us anything, all than opportunity So lot think of on to together. are and

Operator

comes Thibault from Marie BTIG. And next our question from

Marie Thibault

sales My move. the with certainly question has the of impressive doubling it's do to force, an

any those type legacy is means many coming important still So geographies? And folks of the it know new so the culture the terms specific with are folks about in in reimbursement concentrated on. for what market. new I force patient I'm targeting X curious to sales

Kevin Sayer

worked at those had quality that many great of still going question. a you'd have our be That's sales we amazed XXX. individuals. legacy hard preserve are preparing national couple And to very And hire virtual meeting same we And of a in coming here XX you. Thank to actually XXXX, of In here. that we're up the how XX people for weeks. territories. of culture and and territories, I'm those

what still are rapidly, and to We've is on a and time, on people At change our teaching come made what's moves the time DexCom expanding that has same training company, they values. the influence new are from business and our time. our to So as culture culture important the the our big to in had over years.

addition For trainers did But move in made we to else everybody the having with back, away which go example, every if industry. a in territory that I and it we than was rep, proved in different successful. very

as being We and field about for forward fantastic group well. meeting many to we it. thousand change. jobs rewarding, these some up had for And we in access us. want be they reps easier, were the picked look with we to with are channel as job to our hard and want the get this on but continues high and We positions, we're for and go job whereby to very positions And meaningful jobs the stay evolve it's people, And not these feel and have opened some thoughtful to the the tools that of that candidates they leadership to being really provide with with more working of and very expectations. we're and pharmacy we only As them, our expansion. to them

Operator

And our from from next SVB. comes Antalffy Danielle question

Danielle Antalffy

also Day we there around, the wanted Bowl do I if or you'd call it There like -- It after this up sounds spent just accessing around this I a Analyst by it actually afford about controversy, Super ad. guys we a we it how afford insulin, sounds was technology controversy. the I great way, is Nick Or -- some talking at yes. but just can't there? market you the is. misunderstanding like disconnect sounds where ad, Jonas, was which, some even something I out oh, to I with affordable time there love the of thought the Is And chatter, but how like that in technology? can technology. lot know Kevin, don't a the just clear

Kevin Sayer

hard. have our system, these there's pharmacy pharmacy We've their the But some we them a actually running look lower get to little have buying don't of XX% demand the talked awareness, an you And above We month statistics a insulin, a getting we hard. at insulin I'm than $XX and it's with example. co-pay. and we of our -- a And cost ship, to empathize buying money. even best income, just the I It's a this more ad. less disconnect, But if more more them. our delivery lot percent product of my remarks. this people another with Well, their decided patients for they those of the a more Investor gave people. ultimately that Day, patients And and to somewhere going on think of at lead CGM, creating our when about it's know life to if ad, technology of on spend run decided these large and for running to in and I would accessibility have and the before patients, bit lot a closing zero ad, done Danielle, get And co-pay. we group people more

it bringing costs And improving it we but only down what costs to done while on we've our can down, done bring done not side. our we've we've So margins.

it And making ultimately, is aware, we also So a important run effect acknowledge We the to negative. more can more have done really community we have business. but we've to do to felt much them, listen the we'd people we positive here. and best by think a than

Operator

Biegelsen Wells next from Fargo. question from Larry our comes And

Lawrence Biegelsen

about talk amount broader be you going see we will can Kevin, when the broad fund, little of could sounds the how diabetes. impact? the it's like specifically And be? an focus funding, It to a bit venture than

Kevin Sayer

investment to was tandem made kidding. many I'm going times. standard our in Steve I'm the to And return the hold years Well, he No, of when just ago. several

develop, diabetes what care in we or we world have can that we focus things this our are And there diabetes and to can do. look time and capital utilize technologies health bit don't need with We to have in be that's technology on that this will because that a we that invest. at we friendly

our our I business We But us companies look into that I other don't a at with see also very focused do and will interest approach. going could fit see the over all XX in us place. share that different and technology. acquiring things are

But and As far to as get right good Board, to we foot if I going us help else? companies think anything our grow. the we're we know Steve, of going. now level that in some don't and water chatted the I've the time to funding, business with give and want expand we over dip as leave to of some opportunities our platforms that opportunities open our you for have these add see really

Steven Pacelli

venture strategic only this capital, or of comment capital. Yes. much thing venture I would tell No, kind would very the corporate that you, is approaching on as we're I

an sort are us important, you're potentially see holding ridiculous returns me but returns Kevin's So to of financial going seeking it. while development could out certainly, technology of in-licensing not the piece opportunities some in aspect are aside, have to or look, technology piece although a investing out a gate. or standard of to commercial that Returns only

we guys So Many of it's next step an make until disclose but them, sense. actually and them unless all for me. exciting won't visibility they'll into you have

Operator

question from Joanne And comes Wuensch our Citibank. next from

Joanne Wuensch

any you slightly negatively? region in or the are I any have or changes positively comment on on that, there competitive any have is, more shifted And particular observations -- if which more one, can may landscape? that slightly

Kevin Sayer

continue just competitive us, -- push. We've and -- here. all companies every opportunities see a very of the that. Joanne, will well for it to say in do quite and are to We We're frankly, opportunities I remain across aggressive We'll markets. both board. would better. Amit see done is competitive. Medtronic, all landscape improvement continue to do We'll our We

than you looking achieved think I heard, searches XXx creating more as I really our were result ad Bowl for we awareness. far ad. average the mean, as that the Super

a change. we're opportunity an to and landscape, do that. it's But And awareness, competitive we up going drive will is have it for and not to some We very it.

problem have that. It We no better. makes with everybody

Operator

next question from Mathew Blackman comes And our Stifel. from

Mathew Blackman

also to to revenues. the remind between just us those all specialists? I to reps sales will sales wanted be these could start expansion. reps it is endos or going and touch Are force how to on the And and PCPs be us, And quickly clinicians on how new going force to remind structured? bifurcated contribute call somehow

Kevin Sayer

territories we part if is the how is will diabetes responsible very teams think, another for there and to available way use The in there we and people. how to upon put of they in territories to the users the we professionals The already based is Yes, the we with structured they that insulin that done question. all I'm continue group, his that much structure And structure and our the and be as out to trying insulin of where the the territories. And their see. in IQVIA field medical it and that it that do far information through data data number prescriptions -- intensive we -- as past. within geographies we've similar is determine in those the various to people that. will people

We have to the the the within regions districts, X We've number number of sales organization. from X. regions and of districts increased

guys a very then worked that live think we way. we've plan our And structure out with. that to for fair is And so willing and are similar comp everybody,

piece how me it out in I force most was by whole sales in beginning. received the team think for laying interesting our expansion the the was

said, need more exposure of hands and wary raised are call we We start. our when always good This a team You're There here. that we on. people you more is thing. help. Instead, don't need the

And as as acclimated far new territory. takes everybody new to a time, it. get look we position, to to So it forward a time

insulin example, quite company pump or running have go who For they're an for insulin if company, already diabetes you and from to, to they've somebody relationships, can and quickly. offices back been hire up those they an

takes that's And regional people. and it time. those district relationships others, with For those our more to our have managers managers and why we train help

time. the there rep us. of a It level varies So before they the experience based with on start is

time. ground those need a hit and go And Some than before. the training little go Others, we that and faster one watch that takes and the monitor running we more it give it.

be unfold. to watch will it fun So

Operator

Ravi question our Misra. And next comes from

Ravi Misra

gets figure make. so. investments trying Quentin building you're So all just out, capacity these guidance? it's to there wanted XX% I that ramp CapEx to of I'm faster here. the higher those lever scale kind go truly margin the that back really line than to that if this looking the we've sales and of presumably put kind you're up plants for to think modeled guess what fixed What gross kind terms the I'm numbers kind sales Kevin, contemplate and and of they've CapEx Is of of with you get level long-term volume coming that of the do of comes conversely upside to kind out think term that in to what plant next, to the How guessing, the do to I'm decade cost ask trying gross to need investments? long for we be you it online when your in plants about margin or there or is the made? to investments you

Kevin Sayer

You you. go first. go after I'll

Quentin Blackford

open was Yes. how -- out you more Ravi, Well, it we $X.X the out And would you, we figure condition get up a you further that to of billion ways, the I to or open into open XXXX into to of bit That's market bigger sits or us. upstream prediabetes, up And remind start or gestational our base case. less we revenue opportunity, that qualified as get so I'd type started as $X a like that up it's to incredible. volume diabetes front put there numbers in there's folks. nonintensive a question. those and or in massive hospital great in things X the but billion are

and of speak. talking as so earlier, capability millions make hundreds to of of those And I time, tens investments millions we're we mentioned units to over of we're of from units going about beginning

the investment, each year. last year double in see couple $XXX this years CapEx going about CapEx we've you're I think to what of We've in roughly of X of seen terms last seen the In the years. million

up these the will to we're have. quickly north to them is going we service clear then that to where and a want really on the have going the not we I of from we going think some don't that years for and this is building What predicated to be experience to capability as markets. to we GX, quickly one do, open very going $XXX and to in of DexCom million, patient again how out ourselves experience stand up into How is build learned come probably future. ramping that be about that this a inventory been ourselves we after that we're when the having to the to create put not we've position launched we're deliver

curve we're And of to going so ultimately we be but are that that realized. is very curve, confident the investing ahead

the timing we're when down look exactly going to to what perspective, it, to to that so... nailing just ready and ready know From our We're it's go. I be behind not is think going be going that's like. question

Kevin Sayer

me let add And bit. Yes. Thanks, a just Quentin.

at look of tens. hundreds than volumes As why millions rather and I

need at U.S. the of a who example, checkup the may sure hundreds of checkup, not be every but people as somebody who of as look for millions annual for of diagnostic we that year. part may would there's in have As use CGM, the prediabetes

look with we've at too you those scale. going at plans. big the annual we've just It's if we opportunities we when hope to go why That's we there. X why and XX the And the investment when U.S., we'd million And These the but We we've is of XX% That's XX my the just of in As look work. know people on product not close. looking of right, are after the is to it get full the designed an required. made XX are you the have. to million a way set the size size type that million million going do is we've just diabetes going whereby why raised this time, went than bigger enough and you're If of it's to That's investment on investment. prize the at made don't selling I decision in the have The and sensors sensors the size relationships the this. opportunities at people the XX manner basis. gradually require size be to versus of need prize, money. we

Operator

Lichtman And our comes from from Oppenheimer. next Steven question

Steven Lichtman

So before type think the means here increased are first, rather should for broadly sales about office out guess, later. these assume I the do patients? patients term force Xs capability in handle yet? near the primary ramp targeting this office the expansion patient models few next building with you're And over have focus the you I sooner more population established reimbursement those here than your we some years. know non-intensive back I to care how second, on

Kevin Sayer

who users Their Kevin. coverage. these have Yes. are will, patients This who non-insulin they in focus become of tag too. reimbursement have fact, is there the patients that will I'll aware, one, insulin-using for take where technology. The some on initially be situations and along as

very been see X we're over patients. more programs, we've about and X you clinicians, we then clear going course patient, data nonintensive beginning will those to gather X different as the that of type to -- directly from unfold through payers, the this go initiatives that more On the and And ways: XXXX, market launch initiatives.

so will awareness And grow.

As Steve, be we our them remains of of non-intensive can leads to can on. and call names database not have a been Bowl serve a earlier, or we certainly the people with from number today ad these Quentin Super seen, but we Whether X very reimbursement on said patients. type reasonable have

As ready. soon as we space have the that want to product offering, in we get

we're ready and that. think getting I So for preparing

at look situations They More for patients. somebody these type clinicians have for cases can they importantly, their and they appeal make aware, they have where X if it of diabetes control, to available make appeals as coverage successful. we those out can look and can been where though, can

on and reimbursement, and there guys focus where -- foremost. So with we're these we and first to but our markets will looking core play going forward

Operator

Rose next And Kyle question from from our Canaccord. comes

Kyle Rose

XXXX. ask little just just the SG&A I the more in bit to side investments in about wanted a

understand I that the how well metrics think line maybe the to the investments in the DTC in of investments maybe evaluate the also to just acquisition? and you And force help can change and just XXXX? the sales retention, then understood. customer a time understand us But us rate are cost those specifically capture on sampling, give does how

Quentin Blackford

never size of you easy what the doubling significant just DTC sampled behind investment historically. started that like. and think the out fourth and to to looks it results at Sampling We're the to sampling. early looks measure. most not one And overall that like. We've I up specific us in you seeing a in show of you quarter a that the roll the new commercial us. that's very what to force. the field Well, then We give bit when is in Yes. right to for in look areas increase pretty likely that is identified, But going going is

fact purchase on ultimately, dropping what field we're seeing. exactly in the exactly for as those utilizing But we're and as the are incredibly happy tell that's you knowing double what we're that knowing samples us. a should with that it patients where to going easy the Although recurring continue we're into and down to turn samples,

are the So easy measure easy into DTC leads turn with as that measures. becomes ultimately well. to that and created side, that, social And relatively the that on patients, get those from media

that Xx we more year coming One we ad the XXXX that. that had just things of heels the in entire than think out X days I Bowl the the of is of had impressions was really for it on last the of fascinating Super

remarkable it's think with reach just our type the of DTC that finding we're I efforts.

accountable there, to things. those fact in ought these in there. But returns we're continue bringing think, I down doubling differently. to to measure things they're we sorts as the efforts, the to and is think and of down, So that give monitor then drop we'll confidence to to investments going we're we're not return And going convey continue going have to But return If start measures, the ourselves to see specific to those long we're them. and the we invest what us. these as aggressively those to start hold

Operator

America. Bank next comes from question of Our from Bob Hopkins

Robert Hopkins

little several inventory now. what have strong question. you're this able quick And could you able Quentin, of a position as do a inventory said response I'm talk in position. ask weren't you're this to I'll right XXXX you you times the how just you. in bit of specifically in you just And that answered just to a in curious very result a may do last one XXXX in about if you're that to call strong But

Quentin Blackford

But them they question. Bob, opportunity. we the to it's but because us. patient I front the we opportunities once product we've get historically, in were look, our we seen aggressively think I think of they to available good aware patient of Well, became And knew pursue a to sit the -- knew us, we couldn't couldn't

awareness start we get to that a in to situation do be through go where now all things. aggressive back order is in 'XX us early operated situation. ourselves We 'XX and of back which and can came didn't has immediately. back allowed with more these out inventories of in build all a position you to So if put what in a order you XXXX, to then this want And we create most

enables where it point think I for opportunities to So more of the historically patient real. at whole serve could time. lot because we a that just get those lot whole than in weren't couldn't us strategic We a opportunities

can. we Now

Operator

Pasquale Chris from comes question next from our And Guggenheim.

Christopher Pasquale

follow-up that I set non-intensive contribute XXXX, that for segment And a Back meeting, wanted was what tracking goal? tell the be goal how the about you're sales starting gating to visibility might what baseline? you more a in that towards provide us as into Xs. analyst XX% XXXX. just on ambitious to by factors you to at of the Can type for pretty question

Kevin Sayer

can't really for lay XXXX. out We Yes. that

about -- the get be way the from approaches you'll programmatic we'll you'll us, our think revenues speak off, I programs. more as take able to visibility from

just now, to year just break to did report that one it a markets to as what been these lot they than Intermountain in business we of part they're for in at to going look We ready But 'XX, ran different we'll and relationships that similar you need We that this running 'XX, look and where report, revenue will product that have out and we to will distribution we're our have these CGM the show -- this When example, for we'll more. be ways. to patients meaningful a while that's that talked study at couple is it's we created opportunities. program right learn, hospital as and going really of Additionally, more in where this a well. But is on here, way. revenues has are down 'XX point, But a internally like my programs investments create to to to The of invest patients. need gather we stuff to care, right typical this Up our even CGM you been XXXX, in a Healthstats visibility our works. through we be offering belief about their need now, are now these and It's develop. to eventually, know to attention distributed on. Florida to there is don't type not certainly take down let Health we now data. this We volumes there's to. of though X for channels,

Operator

Denhoy Raj And our next question Jefferies. comes from from

Anthony Petrone

My This I'm once gets that I'm running. would is for question scale? look there 'XX, is overhead up and Anthony XX% wondering margin. again, the on for to out it coming Raj. guide that plant gets as facility, you Malaysian But gross out up actually plant as from gets in the where per cost how in much wondering the and scale, sensor be to up trend will units that for of trapped

Quentin Blackford

about XXX that to from Good there's question. realize standing basis Yes. capability. In that the going in of operating Malaysia we're XXXX, investments pressure up points

be. for quantifies think what clearly So very will that I you it

to As we've we than in believe use a into the we cost out the said $XX day look can case. get profile future, per XX-day less we

less we're in as think states. below So $X certainly per Malaysia than offset at day. will that about that, the by where be

in automation, to ranges it attractive the it to there ways to continue our think even hopeful that's we profile ultimately take down to profile discussed with is a today But enabler So getting about as a we're for and certainly big of And cost we've here both those innovate us. past. further. very

Operator

comments. call And this the to Kevin we more back final no questions to Sayer time. for have turn at I'd like

Kevin Sayer

I And investors job just this new you. math Steve. moves were This bit XXth we into he call the with done over years. of while is with I doing what wonderful a Thank our a need my as role, call. acknowledge a to did he's

A different to at incredible I think thank calls report. to marvelous This those today. our it I want and where what and have going much investors back we being some say calls. we'd have today go, in company so work, has call for he'll here, do about please, is early the excited what XX effort still it and the is sit be over we're to going he's years, and but some around changed that. everybody we're to and on to okay,

forward. bullish tell, about our you opportunities we As can going remain extremely

climb a top DexCom one day the just said, And One one and having other of the on our there's soon executives the to it. way me conversation described a bigger as side, and of is with we as big see what detailed here Quentin get mountain he was big that. we one, he think financial is do we're have And I think a we to we our it a and do and we preparing mountain, climb. another going start plans on, as great very we great We climb. And effectively. can what

future. We bullish are the about very

days, Over commercial from pictures, here. commercial, And saying Bowl thank you awareness. patients parents our talk diabetes. been for I e-mails, their my a telling school that that, And gotten caregivers that. I this videos, or wear are have text around I of is the how has several I have lot messages and and manage remember the their everybody, Super past creating numerous the Kids in

We a energy this, have seen has just to reception positive been and amazing. such the positive

So kudos to done. for everybody to this getting marketing Jonas and Nick our team,

initiatives and about. hospital the Our initiatives talked new we've

are I get getting continue by we're As all can glucose to and physicians numerous monitoring throughout investments, got hospital. go It go those home. saying, be We We'll now reaching be efforts. you've needs to have to said, but be after very worn back, to coming everywhere. they this patients there the when needs out can't It the them important.

go market I'll the new well. And to as intensive very efforts Our are last, type strong. Xs

can type because this And tells It what It don't had recently we for everything them absolutely do. awareness conversations tells them. exercise. I've excited opportunity. I else. What to care And do. several some with foods. and had created As said, I to It tells really sleep about take conversation. and X just about them struggling CGM people them know. I they with them are here. possibly tells about do stress tells a of we diabetes It with myself what to

our to in on You'll to things day, have see But these for lot year listen. great great us everybody, everybody. pass and come good all XXXX team. fronts. thanks, And continuing of a for Thanks, DexCom

Operator

you, This participating. and conference. today's Thank for gentlemen. you ladies concludes thank And

You may now disconnect.

DexCom (DXCM) 12 Feb 212020 Q4 Earnings call transcript