DXCM - Earnings call transcript Q2 2021

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Operator

Welcome to the DexCom Second Quarter 2021 Earnings Release Conference Call. My name is Darren, and I will be your operator for today’s call. At this time all participants are in a listen-only mode. Later we’ll conduct a question-and-answer session. [Operator Instructions] Please note that this conference is being recorded. the to turn Christensen. now will call Sean over I

You may begin.

Sean Christensen

and operator, second welcome quarter you, XXXX DexCom’s to Thank earnings call.

Our the company's from Quen from includes Financial Officer; comments and our our an Jereme afternoon Chairman, initiatives update finally CEO; DexCom’s Kevin agenda strategic Sayer, Chief Chief and Sylvain, Blackford, and recent this performance President on Operating Officer.

Please note that, the With related quarter time, Events that DexCom so there our on themselves we page. will available opportunity Presentations participating let’s for can At that are review up the also to an open performance on your limit to and question, call to slides remarks, we the our prepared Investor Safe for analysts our website Relations today. we statement. Following provide one ask questions. everyone second Harbor

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

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

will turn I it Now, Kevin. over to

Kevin Sayer

as Sean, will that our results well Thank growth on for Today everyone for we as quarterly second revenue key you, dollar quarter execution $XXX absolute initiatives second the with call quarter quarter quarter the us. discuss compared the highest revenue the of history. great XXXX represents for throughout reported today. in XXXX, you, we XX% in in DexCom's joining increase the The strategic million to growth to second our and compared thank solid

far we drive on that story are believe early to our the potential to continue greater We a in with health. global impact

our because Our field, to our people to made of or often with we’ve much on to CGM DexCom's people spread growth closely there access access diabetes. for systems the products CGM about is the performance diabetes. advance with the cost related for so And progress misinformation is in

for nearest diabetes our CGM conclusion. in firm less Partners customers than The out to research lowest Sensors. our for suppliers this market With U.S confirms and cost DexCom one-third three advanced out of the on pharmacy people that IQVIA, [indiscernible] key should X less in of of access of our know. According with for for research pocket and customer the cost out the Let pocket potential of $XX from therapy. DexCom intensive these out managed our latest and largest more copays competitor. the GX monthly of month having the U.S. significantly than We've me point the nearly expanded current than of several majority is now XX% with a where insulin U.S per having customers diabetes, patients costs customers We’ve in investors, coverage type have the CGM coverage zero have a overwhelming our clinicians pocket for of customer intensively commercial points comparable

underserved. populations continue also for We advocate are our often supplies CGM that for to to equitable access

XXXX, programs number growing X July access for DexCom type channel there both to and type for providing Medicaid CGM, As users. intensive XX are pharmacy providing of states a coverage X state now of including the

people We even collaboration hope more advocacy In with will care diabetes we their improved with And awareness for the for health several this nonprofit access. to and diabetes and organizations solutions on key global of support for are building benefits collaboration that in range that efforts launched movement range and providers. to future June, those broaden community. and CGM time we the effort time lead its

in This Along four taken teams least simplify to GX. progress their for position than a pleased administrative to type solid penetrated. penetrated removal to customers. diabetes these less continue less the majority the our market drive lines, the barriers remove have is these a update to XX% will DexCom leading of reimbursement second X strength quarter. the at internationally, of from Despite with second in on with enhancements the of people people building their that for onboarding role that the from benefits This CGM to also to in of type both insulin broader to Our real-time see developments, coverage announcing plan mealtime we the intensive fingersticks. market accessing the publicly daily Medicare CGM initiative several made manage and leader to of geographies operational clinicians. remains diabetes adoption, CMS and than CGM with prevent a U.S., in according from of continue CGM. forward customers believe Even requirement is moving X process advocate We've for we fingersticks quarter XX% are for the

X and those these assessing of our CGM applicable MOBILE remains there presentations wellness also trial several diabetes, we DexCom also health MOBILE on Journal platform, us presentations as not the CGM of using associated the the even to monitor. Medical in the hospital which data. are competitors/glucose even published use the in we CGM our our great current long research affirming health So serve. care was compared base ahead including randomized as simultaneously Association. significant women DexCom American to for are relative with a who that exciting trial. a randomized of markets the of was well presented in of At the ATTD with generating ADA trial, insulin awaited use and product for The the This using conferences mealtime evidence Lancet DexCom value growing industry we in controlled same was June, Fingersticks. conclusions standard showing CGM. benefits most readout the use the published controlled nearest trial of to outcomes the in currently rigorous time, type setting At was another pregnant, of superior opportunity the in the ALERTTX Perhaps of including use the people CGM the featured These conferences of use of and

For treated basal people with diabetes with type X insulin.

environments looked clinical people at the they're where the in care representative U.S study served. base it assess Importantly, user the a primary these diverse of population, and traditionally

of what is range. changing million the CGM DexCom a trial for and a our per four perhaps with were did additional X see? believe which uses and produced glucose basal we spend X even CGM the and saw people U.S includes clinically the for insulin that increase saw hours the care users, of design in goal for We the a DexCom alone. with range day these between Software. These standard And systems. So of group we we million AXc the reductions more results DexCom XX% CGM telling, cohort, in target time We significant

With these and based on JAMA look the outcomes our awareness potential and better mobile results, And the driving we team's com to feel index the study just access that. that publication. to do have forward

We experience and we fully in on June, GX ATDD GX warm-up second and and clinical have will with regulatory market quarter established and factors the excellent for from clinical period. advance XX performance system. do the in shown leading sensor several continue with will update trials. expect provided our CGM recent Based the our progress pathway customer brand. believe And redesigned we made that experience, we real the transmitter a will an app At to GX we enhance on disposable the a our great our reliability the data GX also so and clinical next we that drawn of minute generation including a world performance

Our progress to GX continues our to plans. according

the will have concluded filing. shifted that regulatory processing the to toward clinical quarter, trial ICJM preparing teams and our we data During filing, support the our now our U.S second working

Mark In we've for CE addition, GX recently submitted approval.

end the on As that track launch the There step are Queen work great we the Jereme the and and this advances to the of the months. of of teams by our the timing XXXX. I are presented based beginning. technology. promise areas this forward CGM that on begin fulfill in And These by from past is to previously discussed, achievements discuss GX just quarter incredible places progress additional we several still believe and our will several

review second quarter let me a Jereme? So that said, it with our over Jereme financial of to for performance. turn

Jereme Sylvain

Thank you, Kevin.

As otherwise be well basis. on GAAP release in presented non-GAAP website. can on earnings discussed IR to our noted, as today's today found metrics be a the will reminder as a Reconciliations unless financial

quarter XX% $XXX XXXX, to XXXX, the for of reported worldwide basis, constant currency the a quarter basis. million, growth of XX% $XXX reported a representing on second second on compared we revenue and of million For of

a representing to of of record quarter, $XXX $XXX million As in XX%. Kevin dollar growth for the this XXXX, second quarter compared represents in year-over-year. noted, a quarter revenue second totaled in million the U.S growth absolute

And leadership interest the the market CGM U.S remains in marketplace. strong. and encouraged have we been momentum in continued with position Our very in the

beginning preliminary the from to campaigns $XXX expanded position experience, patients about we ability International and effort With our marketing force, results GX our grew quarter, sales of to the are results totaling trial allow and XX% expand solid customer our to further depth the and presence primary to see clinicians care second in extend into company the direct-to-consumer combination greater in our for to in million. our business base. offices

markets, saw the again once including business core international While achieved the second results, all growth COVID U.K., and comp The Canada, of broad we the our Germany, good new as like XXXX Nordic a sequential impact quarter watermark. Australia the the markets Region. second momentum from based on quarter benefited was growth across high

Our provincial Perhaps advance for the X shift to around expansion the which effort international to progressing second access cover two in technology our the coverage representative of the type Canadian manage driving public to These in British became GX XX% diabetes, was the came type are for Quebec, growth public according saw province GX and during pharmacy Columbia, internationally, volume of the U.S where channel of and regions. initiatives where GX growth people coverage to announcements Canadian people plan, with in diabetes. largest for Volume of both X intentionally high first diabetes. with from type established broader from a the provinces. our range are the Canada, to X quarter sales we people greatest our examples on diabetes of for the and for all announcements came strategy and with initiatives global mid basis. market quarter

are in pathways. strength via of patients total address We driving that of meaningful leveraging to we expansion the our a number the can operations increasing reimbursed

the profit gross what $XXX.X we've were these It efforts very expansion revenue discussion points previously of product gross growing of quarter was QX of These basis another the of is $XXX for $XXX.X XXXX our plans. proud that's validation of into The types that great XXXX. margin and reflect quarter for second or to QX the results. XXXX. million compared revenue flexibility operations. to efficiencies XX.X% drive addressable these market of expenses to second results Our effort million is through our strategic of of achieved I XXX We're gone compared our XX.X% in manufacturing expand that just XXXX, in noted Operating efficient design we that the referenced.

of marketing. quarter U.S of GX with field and We the a pivotal that percentage our trial force, areas have investment which sales global we support up These in second in submission, expenses GX as the operating regulatory pursuing, several costs of account of direct-to-consumer our associated XXXX. are the to sales relative scale manufacturing expanded the for increase include the

our scale customers. have serve included the to Our our and strategic investments also efforts efficiently lower to cost

envision we we a As today. more which meaningfully people serve do future in we than

we've more of the than the revenue per that second Adjusted and to share. $XX.X position, XX improvements of great through. from great gross of there million revenue services products of quarter efficiencies in G&A driven in business and XX.X% are Philippines initiatives. spend. with our the million Operating to second $XXX.X or second of come Lithuania was was by year. key the during compared or financial XXXX, basis billion EBITDA approximately XX.X% examples the global quarter design million the operations improvements remain made revenue was in leveraging our improvement for or that cash while second financial of those the cash great Net quarter for or service driving for of that investment initiatives $X.XX $XXX.X income Our the strong of drive are million XX% was or to quarter compared The point in flexibility and We the in the customer These XX.X% strategic closing same year-over-year strategic quarter margin in manufacturing $XXX.X quarter, to of second equivalents our revenue offset XXXX. million our income XXXX. $XX.X $X.X a the resulting

Turning to guidance.

to XXXX. revenue expect billion expect prior quarter again of guidance. are $X.X full now growth momentum pleased continue continued access across second year comes a revenue once approximately as billion, the regions back currency with growth growth We our be half volume CGM our our $X.XX representing to channel position of performance, raise our reflection $XX momentum of the expansion growing This in is of to top We of XXXX half to of between awareness increase XX% unfavorable ongoing of XX% strategies. globally. XXXX solid be primarily international back by the the as million to on to for over expectations on all year in revenue driven we in impact mix to impact our relative This a well guidance. our increase and Based

initiatives to We we will our see of a our from in to driven the the our year. volume greater offset efforts by revenue incremental per in existing second half continue base pressures base patient access international these alone. those impact this But to expect the year

will much us in come. position better importantly, More this years the in leave to

strategy scale approximately XX%; includes for the approximately now to at update. of following With call our will year to adjusted results that, Gross Quen We're Turning levels. over operating margins and to non-GAAP I margins XXXX turn increasing a targets. of This be margins approximately of approximately margins. XX% the profit EBITDA and full XX%.

Quen Blackford

you, Jereme. Thank

great As hard to technology quarter. and for key seeing the saw industry alert leadership field over our utility initiatives DexCom mentioned. of not potential Kevin strategic second and systems DexCom excited presentations solutions. highlighting research ADA Outside ATDD after It conferences. on DexCom's of publications Jereme of using and and depth the is market a insulin the progress at about mobile integrated delivery from indicated, during the the Kevin be DexCom's the the we recent We well interoperable CGM clinical that dozen in partners, made of

the investigators are continued health also one the CGM. well using world a with two of presentations real our our we associated diabetes of documenting number users generated patients members, economics promising evidence very the economic for excited for with the intensive pilots. we results several The people of several presented including this glucose insulin. In team, we've of treated as at saw diabetes are And both cost as the in who that DexCom being not data the by growth significant team GX, those savings outcomes magnitude insulin our type growing and better with to for looked another study from independent We into DexCom for supporting to broader our cost around for with yet seen are point base identical is the evidence were savings the This control nearly cost access customers. GX with other mealtime benefits compelling savings what leverage world. therapy

our we needs We also Most enable meet diverse that medical to software the the enables to that API API is not to user with the clearance real-time customer first, we of experiences the This received bases time sector integration FDA innovate if a continue clearance our software in solutions recently, real on first knowledge, that apps. of mid third-party July, one differentiated solution. serve. the device in

and in respective of benefit early API the needs. to apps our to solution. to of At CGM As the partners With now through ability to into three data know new time This you of clearance DexCom who CGM Teladoc our and for their now we users diabetes our a the API invited the to for according hour customers, various as levels real-time from time new of the this another health partners are by real the new see limited many real retrospective time glucose will displays, the approval, prior API. basis devices. is likely [indiscernible] delayed digital variety API, integrate were have who on our of data DexCom win great of Livongo announced the a display Garmin ability program

how us, for UnitedHealthcare's our and to our In is the solutions growing our software connectivity integrated leadership their addition, of connectivity X, an in health landscape. real position are digital leveraging in Welldoc and This advance time market an utilizing innovation are we and Level example exciting offerings.

remain we broader in several penetration to front, locations. growth drive well-positioned commercial the DexCom and On market

began growth where markets, includes enable our This our locations the local addition of efforts we core first In of implement a that new to distributor. to that are to sent significant in Japan, team. presence expansion our our to access quarter to in we GX recently multiples are last we've relatively growing shipment systems

Although in of of with a the empower for to the CGM DexCom. a CGM. minor our people serve with ambulatory to use GS represent in systems to had excited expanded for bring to key Japan These developing market use presence growth to nice solution. our our as forward diabetes product we professional diabetes core that incredibly We're and technology with people look our Japan, have

In data addition to the clinical the ATTD show GX to performance provided. in regulatory strong updates that and Kevin

team is continuing development to operations manufacturing our and GX according plan efforts. scaling in Our

lines We year lines be have throughout the scheduled a automated back to products additional and of cadence we producing as delivered GX of steady speak, half XXXX. with this to

we In sit addition, GX us alongside our today. supply the vendors are here up as chain scaling in capabilities

learned manufacturing Diego We what San will use automated take in facility replicate and and new from them scale we Malaysia. have Mesa and and quickly lines a in these to

said can us. presence before, sensors than growth a we've this significant much for to be from benefit more our customer a us clear stronger in XXX populations critical a think ability technology. key million that serve per runway region we and year, to effort As produce to Giving will our CGM

of because pandemic doing great efforts be Our of a continues environment team advance globally. a to and navigate. to the impact challenging what job is the our to

us the track building on be our while production currently in chain, supply to also facility ready are XXXX. out We for putting manufacturing scaling

are manufacturing, quarter, As improvements to agree. Jeremy excellence, operational would as in GX, from Overall GX and we this greater our on advancing progress capabilities. and Kevin resulting our distribution even procurement towards I margin think and see making gross you this can XX% our efforts efficiencies also we're

the We will I execute the the forth our very work XXXX. of call ambitious With in on plans proud back teams set Kevin. are of that we to that, pass to

Kevin Sayer

We're including made the with that company. able the million are to that would half all board, now was guidance momentum be of the quarter. we to very result Thanks, raise another the to up added the I To pleased Q&A. I for $XX the second Sean? the agree during a across we open great Quentin. continue midpoint year. message like as progress raise the revenue for excited guidance that of call is into to with

Sean Christensen

Thank you, Kevin.

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

Operator

comes our Marcus. And Instructions] go from [Operator first Robbie, Robbie ahead. question

Robbie Marcus

we're it timing. a want this can number. had expansion I'd examples just approval updated great provide, you if all the I great. year to international sounds already nice and yet. If how the of to ask, I quarter. like of Oh, help could year. guys congratulate is in think Thanks. And really any, U.S you a in on filed you you the any or you helping haven't It love next interested I you rest how examples benefit continue and tangible of GX might

Kevin Sayer

with GX GX. expansion. start take deliberate to Then with respect I'll Well, benefit I'll mean, what and let over we Jereme disclose. Quentin about we're I the very

we are We hit we gathering much goal we was our than at that from study. are Mark and a it there. now data have the the was CE study presented the It pivotal U.S larger for on data schedule ATDD. And filed for

what run we protocols was trial under think we from what are improved before. the ran However, actually

-- very believe product the no not not robust. to reason we data. have So will expect We great be

don't they’re that that file delays, to deliver sure We about FDA make lot things and will and what We with our of of manner. create and in very hear want deliver the very things us. it's move over very quickly that nature. cooperative a time, a been expects, We pristine experience delays we they FDA we

expectations, those those moving file reason We going lines. preparing to along isn't meet the have no or believe we're to

the goes with the more you launch update U.S an CE on. year. Mark OUS And we're track this later on time as filing, on again, for we'll So

Robbie Marcus

When?

Kevin Sayer

business. in of to or the OUS comments with that Robbie, the respect Yes, entire board on was really there your across ours. question Look, portfolio strength

yet team heels of back quarter grow. we awareness incredible I to what the the you, by think the the be has on increased XX% So of made access that a honest to, seeing are of say To the seen and and just there, half with working in show improved landing spoke primarily patients the of negotiating these increased access we've the to we're nearly payers or thaw encouraged And benefit we progress. really I'd don't continuing with very we're not half and up probably all reality for so of that contracts, OUS or the alone, million is favorable where the through back until in in But positions first those, business. the going benefits we've year the first year.

I the to back that the strength just go the we're how year those as in excited very yet. the So But second attribute quarter, the into efforts. half we positioned wouldn't access increased around access of about we're

Robbie Marcus

Great. Appreciate the thought.

Operator

Hopkins. from next Bob, comes go our question ahead. And Bob

Bob Hopkins

you. Thank Okay.

Just quick love two your on comment things.

process and is First, of I the price that just detail access the just how, better think what on terms how cuts there's curious this referencing any more of fees. you're negotiating in Clint, I if But actions.

how you going. Just that’s feel

kind what little that's if referencing are trial. a last -- I'd Kevin, just on you apologize since the a just I think MOBILE quick update time has And of you then question. give more passed I love to with that

greater what data on as in broader terms to other or from that parties range for forward? partners potential facilitating on hearing going patients the curious you're a impact of of Just important kind insurance reimbursement of

Kevin Sayer

Sure.

So Bob. I'll first jump on that one,

We are talking same there. exact thing the

through XX% patients in improving them quarter. the work of there. those the to relative than course or negotiations negotiated through reducing access the majority positions favorable we've so or the of us More that second fact burdens behind the all the administrative, were of that for the landing terms of In

the can whole that technology on easier. lot So a get folks

for how as where The there. were we're the our no we sets up incremental have into very line in what half So at, that right going and we the assumptions of with into and around access year. expected bullish it, patients, creating back pricing come surprises

those all positive very perspective, on our from that So front.

Quen Blackford

Bob, study, to it. obviously, And, MOBILE excited respect with we're the about very

here. has little Just a time passed

time this the are support on other insulin patients. data that out. of position for a word basal We coming on bunch get will also It's have reimbursement that analyses these our to

Thank to lot but down are I of here this but because that a looking of one these day CMS and Now, of yet, are fall big looking areas we think forward. patients you. just be bucket. any Haven't line is forward we discussions the Medicare into because yet, the going we're done preparing the it's

Operator

ahead, our from Johnson. next Go question And Jeff. Jeff comes

Jeff Johnson

saying international Yes, Afternoon, side headwind from guys. you the Good yet. million started comments. last Yes, incremental sounds maybe a talked a really to second, XX thanks. maybe just haven't Jeremy, on for in flow It about those like quarter, Quentin's

of the thinking we again of XX million months. we headwind XX next kind $XXX how international number? initial So Thanks, think those it. do quarter about about over that second right year, the of this $XX still into and the about than straight kind in then line on straight side, next it heading were XX-month million that the And XX first think US lined in at about XX the Is guys. about that to expecting did headwinds kind the quarter

Kevin Sayer

Sure.

year headwinds or So same. the around the channel still guidance full mix is pricing

what we lighter million still as we its stable half pretty talked in that next for really on of shift loaded. the we're the $XXX million It We came we primarily some the access on about and talked year, And the and that we in some of same price those the the line mix but incremental started in at of being beginning the the the certainly think so anniversary, than U.S., $XXX back XXXX. course on contracts generally has those about conversation half a in headwinds year. the your It's To quarter. throughout seeing I quarter have international second original point of you're so of will about the impact stable was the first the call little in first bit the

period. you'll But of the over so the the in the XXXX. We'll that in into month of that future. a half will And will XX that more back happen see there million XX get year, a into little be

Operator

And next ahead, question our you. Matthew. from O'Brian. Thank Go Matthew comes

Matthew O'Brian

half. question. think the the as conservative be But model, the Afternoon, with the in taking Jeremy U.S. and back monster I traditionally up especially are outlook. half the half, pricing than their first in thanks a the year know impactful for pretty put been just the back at just look QX, I to going said discounts But as I you of easier the comps concessions

be is trying something out? So to As the far half we pressure year the in specifically should there as aware that back of you're call you. of? incremental Thank

Jereme Sylvain

trying call Certainly we're nothing out. for that Yes. question. Thanks to the

about about certainly I that And talked in think year. we performance the base balance when patient that year. we first about the how for guidance, out the and half of thought thinking certainly plays of the the

that's contemplated the raised and guidance we million the you midpoint $XX And look, $XX impact the when at of exclude guidance. currency. the in million So

pass the it balance of the raised certainly we've So and year. for some through of that

As but get COVID half out We about there. the international there there and to the out we ahead is the the of variant pointed talked we still and you access, think is want of simply impact, don't year, out back the Delta ourselves. about

where here their of see bullish how And of the outside their we so rather than using care time vaccinations. ultimately to there this and year. ahead for administer do it and U.S increase want is plays taking physicians through it to We out the the and balance and get get ourselves, are practice, primary

to. to year. if do than will deliver prudent and that more be job and far great thus contemplating can we we want a We we look if those that, and done we've to are certainly it through will talk make are navigating While we able sure this

Matthew O'Brian

Thank you.

Operator

fourth would historically cadence? or access for Blackman. be half thinking we've sort Matthew question. where quarter weighted, our And the curious and Good next should less Q sort like about quarter everyone. things any comes approaching whether Or for year typical we third we seen appreciate was taking make at point the Matthew my of ahead - I Thanks. are therapy Thanks from Jereme, a afternoon, the Go cadence Matthew. somewhat just Blackman be increasing Q pharmacy of or the as question point about it. second may help

Kevin Sayer

it. Yes, sure, absolutely happy to take

default, shifts you'll impacted changing by QX, and back dynamic. and QX about and QX by think is into to way generally the not So that

seen the full revenue. past we happen you've to expect In same fact, that around the it think And this few of XX% years, year. right for I generally year

the saw little So in QX to of pharmacy QX that'll as the do to the seasonal. of year. move the at think We where have least I less weighting, a bit QX you gets less think of a result the about year and help expect a in you balance it

QX expect the in to where channel don't folks in meet you'll think the you DME have I same rushing benefits.

that as we've -- we move move do the think I moves QX more do to near-term, before, to about QX you'll we out less weighting more talked generally of of more in move give and which But expect I some QX seasonality. make hopefully mirror the XX% seasonality. to that So less QX as and lightweighting periods, -- start is on you -- and context. in prior on see heavy pharmacy, that

Operator

ahead, Go Taylor. comes question Matt. from Matt next our And

Matt Taylor

you. Thank

the in these that you've margins facilities. so LRP? to the of I'll here. had on to So I way your lot I and at it showed one for wanted potential talked scaling you're term versus a the automation the view to able margins changed you ask the progress. guess Has significant positive you activities results is the doing Quentin, all raise guidance be the and about longer ask on far

Quen Blackford

to can time? up there through say of opportunity of evaluating guided Yes, midst and long-term. keep different a in if Is what it that mid that the possible. models. over XXs our confidence we're I give is, ability it the our increase level north there so continues to business going to range we've to of would it take potential look, that and look, that But to flow lot on we're bet If in you that

look to Pharmacy you opens up. it in the business type a continue significant at continues way. to As X non-intensive at space looking the expand grow. We're international as whole access

gross level of margin the But can keep we a margin the efficiencies design we a manufacturing saw perspective this, your All going if you product to these profile. where on over were continue out gross cost the improve only time. take put things and confidence pressure to around that increases of from bit the able way and that are to process of

into contemplate that fact on So where we're that what time, also. XX a benefits incredibly significant the there excited us move day product and the you that cycle doesn't we're lot a of so by seeing, over itself, see there's probably come

opportunities need point profile So, attractive the like back feel and Jeremy's have business. the gross to really again, ourselves. bit this a that not get in area that we still present after get But we're flexibility of themselves market earlier, this to a very deliver an is we going ahead we margin to

Matt Taylor

and congrats good for Great. on a the Thanks result. comments

Kevin Sayer

Thanks, Matt.

Operator

question And Margaret. Kaczor. Margaret ahead, from our comes next Go

Margaret Kaczor

real it next for to taking to guys. could good you approval Hey, a the seems for little question. the bit me afternoon, business. be one and evolutions on I guys like it the follow-up like time APIs, Thanks my got of for wanted

and the could is was three today both API to What facilitate the I far? how been to curious guess what's just to talk it versus out, from round now. So commercially. from so us partners reaction if years it clinically you important it the can potential And I

Quen Blackford

able So maybe that the incredibly work into see improve we tools as think, I The reaction and input as want to is, have folks to and provide and to to to can in the many partners we we're be, reaction. exactly And information information the the being patients, into information with put these platform I'll time real be we coming their real much build the positive, capability we and as possibly been the desire patient the can time. start hands reactive to that in to that's bullish I that over think want outcomes that where the understand tools time of of. more the off a more with as these their possible. sense believe tools we And incredibly has

different interoperability, use produce and information out right in the of really what think to beginning, particular. And and software a very approach had there value API, of we've real you're vision seeing always the of play the that time I a to data information, of in the bit we've had that of from now approval DexCom the part to the putting we've it the patients. the importance in We That's ability differentiator. who is. continue in importance of capability. of you're invested a heavily invest as the going And and that see area to understand us hands this is

future That's real strategy evolves the But evaluate up things us sales outcomes today. all show API, about there our those over terms with In it's the for over all that's we're value in or Today, that that flexibility. way of create of approach. And patients leaves will to how and, stream it monetization improving great of some are going into that, happy not in time. time the the sensor to data time. incremental is with very opportunity

Margaret Kaczor

thanks. Great,

Operator

comes And next our question Go from [indiscernible]. [indiscernible]. ahead,

Unidentified Analyst

good the put launches? a that to the just you've GX if to million with would about sensors talked curious GX you're got probably curious which on quarter. year. launch? And to you could as willing do you making in I on share GX you’re countries Congratulations that expectations here you're OUS some XX And that XX going and also quantity about know you've think back a context And half. if what capacity that how X just for

Kevin Sayer

reasons, question. great But on look release don't on a going as track countries, it are want the the one. I'll don't that forward, not that. we because give to we -- you playbook. color take for we specific That's And to going we We're for competitive the question for time. some believe quite interesting for use lines have our for same GX capacity intersect. to do we we'll one because market debate. while very we're and the don't a How at time, for a bringing up We us two us is GX GX

very immediately. will and isn't there places launch global a do going where to be available be going quickly, go to we're GX While

there. in take partners are or We're we with got them going those delivery the side. where still catch GX, on And GX up to need some got areas aren't go now geographies get GX there's some offer while where but a GX others. we started automated him where on working we've Our in to some we yet sell countries to while we've insulin can to it, we for

and absolutely areas a It's we this. of planning tremendous and his to can we'll guys best are think can. GE very debate. GX us we home methods fairness, thoughtfully. is lines manage for of of bashful manufacturing as to our run in relations spectacular flexibility very be GX. our of Quentin be amount taking ready down and team, the one with operating it's there we've got several is we some go going I to about So expand won't And R&D six developed great along have quickly give and We think very, They

That's really that we we'll very lot question think something So and monitor about very, closely. a good here. a

Operator

from comes ahead, question next Antalffy. our Go Danielle. And Danielle

Danielle Antalffy

really on you I'll had this quarter. afternoon, campaign. Bowl DTC I'm good guys for question. a it's who successful but ad initiatives, echo question Super on very a Hey, is the everyone. Thanks strong everyone's taking the for, sure congrats not

a to strong from exceptionally any there. Just even hear so, from we'd curious to you if I'm sure even benefit seeing wondering this so much. return you're way me, what qualitative seems you seeing that can if we're if there's to tell? yet. Thanks can what feedback us. any quantify if But perspective quarter, tell if I love mean, not Or

Kevin Sayer

Yes, we I around, that question. that we're there's probably that Sure. give we'll arms will can feedback you And your seeing. -- take you two the think help data points get

for a was QX new off, First record patient adds. quarter

to So as doing see samples. no driven well we're many as doubt patient record work force in and adds, continuing we're by DTC around new ways the Sales

that's you’ve point, think helpful. certainly data I a got So

we are And incredible the around yielded for there field the out primary see of is product. aware prescribers months, prescribing product. the piece doubled that care as that and one physicians, out our benefits the doubt is, active are into has really The over that endocrinologists, we're the but past expanding other access get our work of get prescribers and amount and XX no we've doing two also

quarter's hopefully revenue clear just the of context, are the helps sales off. some course, the things also indications performance two in gives those as of at is we're in looking the think in DTC, well. I paying And awareness investments the you that making force

business. an So think data to are the investment of points, I think we really think, why the incredible returns the those you we color some still why all in give as and some best it's still

Operator

next Jayson question Bedford. Go ahead, comes from Jayson. And our

Jayson Bedford

Thanks.

quick color get gross the weighs second the margin questioning. year of line a the of for in to Just back get one. the wanted gross XX half transitory. comment margin it What on Any I to year. to on, to Is of these large seems pricing? Malaysia? buildup costs would of if can may you like just the be international there helpful. Is a it And be portion

Kevin Sayer

so the biggest. Yes, that are two there's Sure.

pricing. The the international first one some is of

have plays pressure You're correct. we'll that margin. through of -- on bit little a Does of some

won't of GX. The at is be launch full they at GX, lines won't those When the other And yields. launched we one capacity. be full

gate, output launched Just out of while the time and us like of a some And around little of through expect on a kinks cost automation that's more. some the -- we we to little going GX, took GX, we right bit to when out launched work lines. incredible the these still automated bit it

up start how so will play appreciate of the do yielding But launched capability incredible capability that you're then we this be And be bullish and of the if there as we on you is all the manufacturing these seeing we're turn GX. of we time team future. going still to GX can launched those expect think weight this to well will the as the of team back through. demonstration we you to But yields, proud where have around are time. access, super the into some those an we a and I your going will cost lines as is that bit really and be shorter and producing through. around to work some doing with is is over a period of an little And incredible the And margins there team navigate bounce transitory, higher. this GX as just but any bit we're with of little quarter to that high similar what the international out GX the at high GX we that job think to running, super shown team lines that of had good expecting see are, to To that when in that we're that that of lines get see launched what question those capacity again, I does have and they quarter job all as

Operator

question next Go Joanne our comes from Wuensch. And ahead, Joanne.

Joanne Wuensch

or and Thank the the volume you stocking in number. for the price sort us you. the a and for you OUS questions. U.S quarter you Was either there blended nice quarter. And in U.S Could Two sales sort of the any Thank market? dynamic? gave parse of International then out that

Quen Blackford

Yes, nothing quarter, normal. so the there was no out stocking in of levels. was the normal Everybody at

price price, you're When well really a of Certainly, It's make clear. really $XXX not the say we sure in to. around to shift But sure that access. very we a In channel. we we're number, I'm terms the international million. blended your what channel it's question as want of have on as referring more dynamic

the sure in I'm We mid unit And if year-over-year on our the referencing the growth range. were you're not also quarter about XX% that, unit talked volumes. volumes but

a unit And certainly growth quarter. so strong volume

question. happy So follow-up, you to your have to And happy can we clarify. certainly answers hopefully be that if -- any other

Joanne Wuensch

U.S number that that what and number volume number. XX%, mid unit the in a call it's Actually is to blended international? that's I What want the

Quen Blackford

We was tell on volume global the in we the don't growth unit outside and out. strong U.S. both you break can That's the that U.S number. But it our

Joanne Wuensch

Okay, very thank you much.

Operator

Steve Lichtman. Go question comes our ahead, Steve. from next And

Steven Lichtman

payer you guys. intensive where few penetration any years? coverage drop can U.S market X. awareness that type are go into about momentum do to you you Or hurdles are drive in talked there? you. feeling good Hi, continuing the penetration Kevin, Thank there now next think to Or penetration? Where and over are

Kevin Sayer

there. have feel we good We very about coverage

coverage. up XX% plus now Medicare for the type the X On intensive it's side, patients covered of commercial the commercial payers over

of these have we it So patients a covers already. number that

awareness. year. isn't of our now a sales went So for be about It's We the at this force to all the access patients problem. these of beginning going size and double

lot the of had this insulin of And product access care seen do great results type who our get team. X we prescribers course of of primary see a that the physicians using huge from So We've year. in patients. number a to we've the increase over more

So a win. is that big

about We it to some this view For bit getting type what in and strong penetrated X him us market opportunity. every point will technology as is as explain it's at think a very him to be available. We time. as

Steven Lichtman

Thanks, Okay. Kevin.

Operator

Go from ahead, Anthony comes Petrone. question next Our Anthony.

Anthony Petrone

Control-IQ, will quick And be hope Is Great one the mean out well of doing to you the does assume for Thanks. those on that everyone's Great. team. then product? just on maybe and so, and Maybe it evolving over how Omnipod those and a you. and eventually quick integrated that partnerships, And next update partnerships device the manufactured margin X, Malaysia safe quarter product on XX months. a cycles GX. GX the see of exclusively if what Congratulations. Thank there?

Quen Blackford

Yes, exclusive to be on be Malaysia, location. to I'll not With respect question. speak the that. that part not will it to will jump Kevin, last exclusive the will GX Malaysia of --

States, We San here in start with in Mesa. Diego both will and the GX

to into there as As the this a we lines of there well. are of and up fact, ramp year into part back and matter continue year will speak as next

there to build the buildings begin there the room validated the out and we've the the and and out well. online ground, will comes capability Malaysia GX capability up as As of clean

an lot in time. associate they're those of States start to logistical U.S moving we're we'll around in when here produce the in north you I about volumes that with both at in that of makes to have locations going internationally you So going the to to have of a think costs continue look product capability distribution us it talking. the that as when well Malaysia, particularly distribution the sense speaking, sensors, both GX the together. opportunity sensors all and think That's million to And in XXX over where give and

But big exist to that's let the the and very value will going efficiently. proposition serve of will of there. effectively it think So both profile do us lot That's a markets business. international time, Malaysia in a cost over those locations. that of out I part lower come

Kevin Sayer

it. X. week. are with is we're field and systems, products opportunities. last to day the for they're whole looking well it excited very actually the very have to working been out we're and Yes, of a respect forward and They've as the know Omnipod for pent-up side. in for bunch a integrated People these I on new it There Tandem demand for ready We for long projects. that ready time new on made

I Tandem think about the my just best thing I got I can talk on recent with a computer. story. is, note a

my Facebook a system Medtronic me and me XX is Control-IQ has lower told systems never better, with give healthier AXc. said DexCom years because he and amazing. never life he had to message wanted a is on Never and been has this whole on was it's been person now it had who Tandem Somebody changed

decisions. and algorithms by So are sophisticated and we make accurate get changers. very these the believe We're excited. can sensors these optimistic Very proper sensors, bullish driven both People integrated take systems DexCom that information opportunities on forward. going game

Anthony Petrone

Thank you.

Operator

comes Misra. next from Ravi The Ravi. Go ahead, question

Ravi Misra

Thanks right. the All for question. taking

partners and course, of DexCom the that API, I you the about on on understand how Just that. with a talk Livongo some bit you're working chose Garmin with? can of [ph], little but just [ph] then you more

future? this us of how this industry rather is providers itself? through the Just why curious kind separate in you CLARITY walk than kind for of being integrated Just with envision or Thanks.

Kevin Sayer

CLARITY this Kevin, piece. handle Yes, I'll is the

DexCom background. still the the in live With to has patient run API, the app the

… guys year. look company. the It's talk CLARITY see that Quentin, we same insulin it type as platform. about ever We're is time, very quickly there. becoming better software have XXXX, who you CLARITY do our a over to addition we The data exciting for Hence, question half these you'll heard be we there So want software to us don't those intensive you migrate same. to company and to the will think last the of will go And talk system straight tools see as in the will I a the needs investments is as sensor And users. over at have now. a

Quen Blackford

out Yes, that API in program, were into the the partners, Livongo's time the in their sync this easy There be going partners had programs the terms sort really we up Teladoc UnitedHealth, little you into we've the able I I is there, thing a about think information the outcomes established providing ones think And is mean, with goes of do and improve right connection we can important These many the Garmin, gate relationships and that the systems. that the diabetes that real of better really can with of and for a integration get provide the work patients we to of to Welldoc past. these the be bit programs the But are with. and want that be now. themselves. out into think to positioned I foundation don't

be thrilled it's with where partners more lining expect So up. and at, incredibly to

Operator

Thibault. from comes Go question next our And ahead, Marie. Marie

Marie Thibault

Thank you. Congrats time for and on today. a the thanks nice quarter

I the comments follow-up, quick force. year. that know sales I the this you a force the around doubled Just think sales on

at want X we just get to they productivity ramp. I level. to where a So get normal more X to their think months in to know typically update an on least of productivity are

love kind that. to status of Thank would on a hear you. update So

Kevin Sayer

I I though, one if just into for of X get to expand where think you haven't It's one It and before. we offices right our to a PCP lot saying, about months take are work. can everybody you're does to is we give X coverage on the The trend thing we been speed. try target.

in, taken out as totally achieve our We a Once know as haven't physicians had street more it get validated faces to it's And there, our not about we they as goals. lot the we expansion, the whole get appointments. want had get there. we're finding knock we on if this these we and we In doors, be more and a to get to to to do guys on competitive assumptions. been anything, to DexCom. And while feet

Marie Thibault

Thank you.

Operator

ahead. [indiscernible]. from our And comes question next Go

Kyle Rose

Kyle Canaccord. from actually on is This Rose

So just and commercial one on the trialing. some of the doubling with -- DTC obviously, this big force the investments side made the you sales year,

be? was up as if bigger So to which to one driver just force sales understand of those of we care you understand, it would primary really from the other, channel. Just gains the than productivity to the the had a how into I call trying far realizing be might maybe some seeing rather from one trying

Quen Blackford

can that. take I Yes,

the be many one done that really forms on comes returns immediate -- needed is, DTC. And at So, and conjunction. obviously, in awareness. there's you But get these factors, to but first, all awareness clearly in through

I folks getting out your making the hand physician the think people aware, rep trial go physician's getting all because you're they into through at to are in the this opportunity office, it. making DexCom Hello you're hand point, through aware program, and you're the certainly

And all we them did -- we together. so all

was DTC conjunction. point, So but the shot the they're in maybe early immediate contributing at all out the gate, arm, really in this

And so that's the way we think about it.

need the that these we on to Over the have folks conjunction the feet that as important to all in street relationships are offerings incredibly longer with other with haul, you be think physicians provide. going

front it we return. I We I Kevin educating But way referenced validate at think equally. the time, have over that more was we're as quick doctors, the DTC immediate point, these was all them, about in think to it of but get contributing they're this

Operator

And questions turn to we to back like at time. have Sayer, it more comments. no closing this Kevin I'd for

Kevin Sayer

report listening Thank summary, participating quarter everybody thank tremendous a you and to in today. this was much. you accomplishment. for of earnings our very And In

revenue when previous this the dollar highest under absolute year's compared ever quarter. in and revenue our for million Just to $XXX with quarter increase

margins here efforts income continued new revenue beyond. progress operating increase to worldwide per believe for GX XXXX annual planned. what during the Positioning pipeline we well very of access Other customers, great Our of finally, period projects a just progress continues. is on is diabetes nothing XX% as working the exactly way schedule here have are Thanks, everybody increased achieved milestones plan being quarter. patient based rest laying in most a made is the during expansion care around we like And measurable over well. as groundwork have we future a a investment gross will the ever reductions had. energizing. It and for a been world. clinical this And our we've are with all and and impact there's approach deadline. product have important all fact field great global and irrefutable This growth of period for record I evidence. health technology robust the major day. access Very

Operator

you. participating. Thank today's for Thank this you conference. and gentlemen, Ladies concludes

You disconnect. now may

Sean Christensen	Senior Investor Relations Manager
Kevin Sayer	Executive Chairman, President & Chief Executive Officer
Jereme Sylvain	Chief Financial Officer
Quen Blackford	Chief Operating Officer
Robbie Marcus	JPMorgan
Bob Hopkins	Bank of America
Jeff Johnson	Baird
Matthew O'Brien	Piper Sandler
Matthew Blackman	Stifel
Matt Taylor	UBS
Margaret Kaczor	William Blair
Danielle Antalffy	SVB Leerink
Jayson Bedford	Raymond James
Joanne Wuensch	Citibank
Steven Lichtman	Oppenheimer
Anthony Petrone	Jefferies
Ravi Misra	Berenberg Capital
Marie Thibault	BTIG
Kyle Rose	Canaccord Genuity

DexCom (DXCM) 30 Jul 212021 Q2 Earnings call transcript