Earnings call transcript Q4 2022

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Operator

Ladies and gentlemen, welcome to the DexCom Fourth Quarter 2022 Earnings Release Conference Call. My name is Abby and I will be your operator for today's call. [Operator Instructions] As a reminder, the conference is being recorded.

And I will now turn the call over to Sean Christensen, Vice President of Finance and Investor Relations. Sean, you may begin.

Sean Christensen

welcome fourth and call. XXXX Abby you, to quarter DexCom's earnings Thank

strategic a agenda DexCom's Jereme our will ongoing Sayer, with Sylvain, recent followed President and Our Officer. Kevin who our Chairman, Chief begins outlook review financial and and Financial CEO, highlights initiatives; from by summarize

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

Harbor With review our that, let's statement. Safe

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

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

turn will I to Now, over Kevin. it

Kevin Sayer

compared new revenue translates Thank you, start another like us. organic by by joining into loyalty. forward $XXX organic key as you, added This some year on driven close million record an base DexCom's thank growth for than and in of Total starts. of revenue we saw We to DexCom customers X.X everyone, million to awareness to CGM more ended globally. DexCom Sean grew users brand and to basis step with reviewing our XXX,XXX customer accomplishments in I'd last XXXX XX% of year XXXX. and nearly year the for another

this Our engagement scale of team the job enhancing growth simultaneously while a organization. our great did efficiency and generating and customer

of in adequate world-class greater expense company of environment on-time basis points than difficult we in grow. reactionary of of it years result Instead, was reflects pressure. XXXX inflationary culture cutting. at ago discipline as decisions not despite cost broad cost This our made foster the to a macro providing demonstrated operations Our rates this We team and XXX ensuring delivery supply performance over XX%. drove year, leverage a operating

Everything foundation significant new build we year access growth past development as back pivotal We a wins, sustainable From this company. for in strategic product for important a market-leading further launches, multiple achieved initiatives, perspective, our of ahead. our several of we at extension will market including a helps new XXXX year a performance and look of advanced most years our connectivity.

technology CGM determination only as in and that publication a broaden This was We insulin X access published for a furthered broad by diabetes the basal proposal coverage using non-insulin-using For hypoglycemia. DexCom's study expect period the by to well the and finalized This from ruling support CMS coverage certain to type people community. local stakeholders proposed months. include diabetes strong meaningfully the MOBILE population. the result with partnership October, with Medicare led heard the key as and example, in of to enthusiasm individuals would would experience comment expand be during coming that

in shortly, population at commercial reminder, the this broader a United ruling basal-only reimbursed the nearly States. expect this to potential size which the double has As people follow addressable population the Between our to States. X we X in and United coverage type million Medicare we market

first United to By the us drove XX were payers. X.X as on products many DexCom generate evidence enabled focused formulary ONE Mobile positive XXXX. over products, our is our for past access we access. building introduction intensively in to managed in diabetes. all added proposition equally well base to time clinicians These international customers, needs the a team of reimbursed XXXX wins this offering strategy We great our to lives the we value our Collectively, markets. months. million DexCom specific multiple us these of from helped meets of that significantly have decisions initiatives Outside national can as a A coverage market over continue diverse and U.K., provide unique people expand course of where was the strategy and greater States, extend the multiple the the with we brought access has the our coverage the to in of portfolio has that was strong payers many been single clinical our response reach. example by

CE and the launch Mark remembered hope The of GX. We States. we'd regulatory for XXXX and full both United our as received will year has the also outside feedback been a be customers for. GX from FDA clearance everything initiated

that period users surveyed that and factor, more customers We this designed thrilled XX% simplify the warm-up We and the is features, we are engaging new GX shorter XX% are the Perhaps our hearing initial found consistent app. praise the to smaller and use. emphasis of see lives as consumer-friendly to have resonating. to of for most encouraging easy product such form

us of the to leaves bring excited U.S. All GX this incredibly to

began In this fact, week distribution rollout. to our into our channels U.S. shipping support we

quickly to as to production capacity launch our support sensors the have automated into as ramped a already GX more up many XXX,XXX possible. with producing want than We GX hands of the day. lines We capable people of get

customers launch, to expedited and bridge we've So allow in and us This manner. broad to GX access our conjunction simplify will existing in our early a program a program to and for established provide access immediately new go market to adopters. with

scenes, our build with the advance we to payers continue Behind to discussions reimbursement.

Our track and we conversations coverage are GX have well progressed on plans. our very well with

going easy-to-use ever bashful about this GX we to and to think is not CGM importantly, More the is product. want we the what new accessible this gold the most This of technology. be we produced diabetes accurate, world. standard are share in with and message

we the result, Super here. be one Sunday. recognizable GX our up this a commercial releasing to teaming Nick with We're second-ever is Bowl of Jonas, announce again As will most DexCom warriors, our

these help that loved live them their opportunity with with still the This to but want to individuals, their a our healthier know diabetes of caregivers lives. CGM. users GX We great with people do millions only and DexCom loyal not can ones use not connect is that

to quarter the over Jereme? I'll for turn of financials. Jereme that, it a fourth With review

Jereme Sylvain

Kevin. Thank you,

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

fourth quarter of fourth XXXX, for growth the For the worldwide of to we compared of representing revenue $XXX of an XX% basis. on quarter million XXXX, $XXX organic million reported

As revenue revenue in of the trailing totaled organic of a representing fourth $XXX million months. compared $XXX quarter U.S. in reminder, XX revenue addition the excludes currency to our XX%. XXXX, definition non-CGM growth quarter to the of fourth million acquired in for

continued into delivered Our recent in strong volume of starts. another customer as quarter solid the momentum growth we and new QX U.S.

most a CGM. they access multiyear And saw channel. accurate We choice XX% our the This in access with closed very scripts customer we journey. by users channel the greater and our represents of structure commercial going CGM our the supports through endpoint as trends quarter believe the were fourth most the we in how covered current pharmacy maximizes the the year we encouraged around for of and prescribing

was International growth the revenue organic grew totaling quarter. XX%, International XX% $XXX million revenue for the fourth in quarter. fourth

for continue international us new access We year compete in and users. markets wonderful new take to share as introduction products past the wins to in position a the of leave over

in Even the one growth of OUS accelerated has example, the clear demand sizable that of access. our has August, past quarters in markets, was response largest we revenue though to there in U.K. broad been a last uptick this following received decision this X For over already expansion our region. coverage

or of XXXX. of gross to quarter quarter Our of revenue revenue fourth million $XXX compared XX.X% profit fourth in was the XX.X%

basis currency the on Foreign the million to were quarter fourth of XX Operating fourth $XXX XXXX was for quarter million negative expenses XXXX. gross margin of $XXX in an in the point impact compared quarter.

Absent XXXX, recognized OpEx our management points another with the Life an XXX recall relatively operating year-over-year. been expenses as of You cost flat license fourth $XX generated have the under would we quarter expense contingent very with agreement of we and represents Sciences. associated XXXX fourth disciplined for of This quarter quarter basis collaboration leverage. this, may that XXXX the Verily in of million the milestone

was XXXX, Operating million of XX.X% year same in fourth the million revenue or operating $XXX.X of the expense $X.XX in X.X% than Even of XX.X% share. XXXX. XXXX fourth $XX in or charge for excluding revenue quarter for compared leverage Net from was income gross to or $XX.X incredibly X.X% more of the the income in XXXX. the compared per strong offsets revenue our revenue of which for Verily fourth current highlights our to Adjusted this quarter million quarter fourth quarter EBITDA backwards the quarter or $XXX.X or million million margin. was of step of $XXX.X

equivalents. a great basis, our in XXXX of level $X.X and assess financial ongoing flexibility our an we uses organizational Malaysia opportunity billion of repurchase capital remain cash support with executed closing cash development of approximately to share manufacturing the This as program ongoing provides and and facility. strategic growth the such on cash in We position, worth accelerated organic quarter

guidance. XXXX to Turning

of another our year. $X.XX stated billion, XX% rate growth growth volume last $X.XX to anticipate growth underlying total which in for of be exceed strong to We This the we will the again representing year XX%. As reflects to revenue revenue of range billion month.

makeup recently To of the some this into help we year, provide additional expectations. color our some insight our around guidance provided

call, GX on customers discussed Kevin with our support plans bridge a program. earlier to this our First, initial

impact at rate an early build access we GX customer We program revenue our in per reimbursement. affordable expect provide to we this as year cash the as

coverage broader as impact this secured. of is over expect We to year the narrow course the

of through Internationally, X/X we the will ONE impact starts start on to platform. DexCom a material this Therefore, base estimate that as come around will in new our year numbers that builds. more customer have business customer this

the we begin to half second For X type basal results of our anticipate this be finalized population the reimbursement for contributing by XXXX. to midyear in and opportunity, CMS

expect contribute in We approximately our revenue total this of population X% XXXX. to

margins. to Turning

expect to the margin of XX%. in launch. related year-over-year This of assumed profit impact to XX% range We gross to primarily be the broader GX is the decline

manufacturing any initially it launch, at our some and new will lower to production we scale. lines with time As volumes running be will for take

we a GX scale. at to less dynamic and still Importantly, than product this be temporary expect GX costs is

commercial at to expense in be margin, guiding operating to leverage the margins greater which the reflects points is GX in drive our XX.X% at step launch. backwards another and we initiatives organization infrastructure investment of basis Despite year-over-year to to continue operating as we of gross relatively allocate cost XXX This flat support XXXX. leverage are XXX even global our ongoing for result which

Finally, of EBITDA in we XXXX. XX% approximately expect adjusted margins

will With to that, it pass I Kevin. back

Kevin Sayer

incredibly Jereme. ahead for out Thanks, excited we're our distributors rolling a GX to with big summarize, speak we're in the and opportunity and the are we To product as U.S. ready we launch about

the open Sean? to up like now for call Q&A. would I

Sean Christensen

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

Operator

take question Instructions] from will Jeff Baird. [Operator We with our Johnson first

Jeff Johnson

covered X-part a commercial about for could. just have are on and adding But guess, X lives been TX Let you commercial the or months quarter probably for go in in over Libre for about U.S. for the change business two? channel dynamic to Kevin, on if your any the looks us stand-alone a users, more I your with me X you maybe you your next give X that expect GX pharmacy or could the talk Medicare Libre website, Obviously, And channel. day. there? or has attrition lives changed at kind covered in of every so you the GX, I think that of percentage now question channel in seen that the currently like few been ask your number has I last where GX coverage has rate? AID the users safe out in X that we GX of you months in look Libre Anything it's versus what as

Jereme Sylvain

Thanks, I is that. Yes, appreciate Jereme. Jeff. This

in the some result is throes Kevin coverage. to talked to of GX referenced, well about about, XX So where more as point track your ahead the we're contracts earlier. Medicare program. bit $XX now We coverage, are hit still a QX commercial about those coming our we're on of the and a That talked about pharmacy like side, million on in the we're because million-ish actually and number a schedule. I $XX of pharmacy in on that's question of taking bridge But days. the DME on little

are day. signs get to contracts over, and we we more progress maybe schedule. that the making coming more of great And So to continue and even lead ahead every

In obviously start a have in terms competitive few context maybe QX. thoughts patient can new record then another dynamics, the quarter. I had on new had We gives Kevin If start of a any that then we patient and to you will there. solid question

we heels launch is competitive on there, we to next we GX strength So while coming And seen as referenced, out seen days. which here a with very the course, out have GX point do in of product incredible to very, we there. the well have where the coming that's, of continue

if there. know to have don't I anything Kevin, you else add

Kevin Sayer

you would for what tell a base I hearing excitement deal GX. No. we're is user of also from great our

question So very with how and respect users excited our GX go. they're to regarding get your doing, to GX very to anxious

are we feeling So where good about now. we're right

Operator

Fargo. will from Wells Larry next take question our We Beigelsen with

Larry Beigelsen

ask the wanted the X ramp I to about basal population. in Kevin, type

'XX. I expected meeting, other on investor you I I growth million would million X% only you think about and from in contribution people that At rate. was were revenues XXXX you than $XX mostly think last basal. run annual a little insulin-intensive be surprised patients in said type guess, sources this an $XXX expect in the X

population? is, question the expect sources? you $XXX by these non-intensive you the ramp in how type So And the X from still million do XXXX basal do see

Kevin Sayer

it Well, turn going a to talk Larry, for our -- I'll I'm Jereme. bit. over to

X% that's second a It it's those. make there. revenues and and in would we've from And to estimates, We number. for conservative every of sized initial but that. our Our faster come rolling we total reasonably estimates may it plan approval than of half from our beat that July, out go will attempt the been year,

also in very CGM space look a and As We insulin non-intensive we space be basal health. of in metabolic out is not XXXX, our believe to just users. product will valuable that amongst type markets X number the

of insulin you well the well. move that. be to lot many intensive And up So users there. a users, than as basal know, it's It's not basal users just more as

shifting that and view go. as they we population us with So as moving

add? you have Jereme, else anything to

Jereme Sylvain

say, started in the July Sure. in Larry, folks you're so X $XX million Yes. start of referencing assume, the will they the end year. folks reality number through everybody start December. The went on is and some July, will some that would

rate run perspective. is And on much that so than velocity a really, exit higher the

you're you If months over only revenue average were it, X of the to the really of it year, course blend contribution. getting

so math you're I you a and than little of is think what bit the higher implying. exit kind the rate And there do

a really So business. But on revenue bullish recurring really, it. is we are it

get need get there, get to the those coverage -- in. that do So scripts out is what we

always we question. do big, report in with we'll It's understand the prudent on we a big try be better things certainly, I big in it that, market on We than if look, everybody. big, it opportunity. We'll big a And obviously, then plan so, guidance. to to way. and a playing so. And back plan playing to want around go But

Operator

question with Margaret take our next Blair. will [ph] We William from

Unidentified Analyst

of is pace I drive the Is I just be corner. within really of period? adoption X population type fair diabetic guess, all XX-month, to not XX-month maybe just going just the year because kind an step just attritional compare to I it of this potential it adoption penetration? basal, diabetics, at or easier, more talk to what type is? further health insulin there to Larry's And about to, over a then wanted up non-insulin XXXX guess, take on guardrails brought you but question it is and harder, are to around metabolic And maybe

early impact should as I next meaningful from as a So more here expect, we guess, year?

Jereme Sylvain

Yes.

on me it turn over can that then let I and perspective. to start So Kevin the from base

going so ramp with think about bit it. ramp a the I And X as that intensive coverage to you kind way that interesting. type ramp. be in time, Think takes the if relatively a We'll place similar basal about And give it about a and how and of think over we coverage you similar think about is -- start takes you expect generally the you'd place. and

I'd continue that awareness. a today. Bowl saying for there's raise is caveat to Super more good commercial hence, by Now, awareness that the to opportunity us And

place patients swath a the of in is physicians. which However, cede wider basal the

we And here. crystal an exact ball don't have so

intensive would more give time to color. be best as If the using kind be our moves adoption bit rate. analog that's ball. of I type best But you're a able crystal analogs, we'll prior on, about is you X But think little the

And some metabolic then and give thoughts want maybe, health general the there. about opportunities to Kevin, if just you

Kevin Sayer

No.

bright we today, changed believe our metabolic to look their platform As anymore. we not we're our Margaret, just diabetes statement our future particularly future, control out people to mission with health, the We've with very help launching deal is we as that GX health. easy-to-use

to see programs We the in X continuing from are positive very and very type sensors that drug with to time on business X models. to and type management using assist health And we're of part horizon, the we endeavors. important people continue a and CGM over all several becomes who product And believe on these equation. results particularly alternatives work offerings

So it population. that differentiated geared from today towards what do and we will be

the got We're see then We've XXXX. opportunity. continue to of will really first. XXXX to mature about patients we'll excited and it what in reach happens basal lot over a And

continue other we'll then and the them after go let's to as to move well. So areas

Operator

we JPMorgan. from Robbie And next question take Marcus our with will

Robbie Marcus

And ask the looks or gaining And European nice you're experience. on is quarter. to doing by Wanted on any head-to-head you're about X Congrats of and How you DexCom then driven impact OUS question there? sort Libre share, there. that what's the seeing us it in versus a of color being where could the GX? you're markets same And it participates? like much well. the And give feedback also ONE

Kevin Sayer

X sales DexCom that their the established that's the the GX we've in they're they're in XX the of a the of a used we've tool. very, added They hoped life lot receiver prepared most has I receiver. hours with user start is the revenue X.X-hour for. ever eliminated lot Again, a GX, A been A cycle ONE XX enough obtained, X.X love has these response being GX talked in about X.X-hour we've somebody's of the as we'd love in numbers, launch who and reimbursed the everything warmup the driving GX lives. recent With million to around in what early focused the app. of are growth coverage markets. My conversation seen adoption, very many markets, said, lot more longest off. what's I of of to People remarks, the additive, we've warm-up. been European GX. with will life That completely strong months, still respect minutes the the while and that additional not initial that

our DexCom better our users majority are it The GX users users, a I new And certainly, GX are not of mean to to DexCom. majority experience. of I upgrade compared hour in GX warm-up, the DexCom. new the comparative apologize. The front to much They're -- again, is

competition. the from come them of Some

them all and finding great of they're used not it Some before use CGM but easy to have experiences. having very

So the We've in with very we're done happy very to time. well. product this point

Operator

Joanne next our Citibank. from take will question Wuensch with We

Joanne Wuensch

XXXX, looking sort about anticipate I'd then just any think the ramping think know of those I people sort of -- are like that minute and So on to how thinking think on at to early about to And throughout margin and shed margin you how gross a rate as could be you more while spend year. if of the that. a I do normalized sort we're light

Jereme Sylvain

Thanks, with, gross Appreciate strong off that. you Joanne. margin. really Sure. the had obviously, quarter. start We And fourth a

can launch. of with you I new what's with our think do teams it's demonstration time give to what a come when product them a

have as cadence think launch little they lower. and still importantly, and proven better I think as our challenges we continue But Volumes bit if So at in time an the scrap be bridge of program. the Certainly, XXXX, a expect to R&D in that they some most more Kevin we'll about do going see. year it's the first launch impact. and would with the been, half again give those team early you to a time. margins of through time we be for we've always And earlier, you yields GX. of, won't yield But over the the get year, mature is referenced time lines, because and be engineering what these that's of has where manufacturing say,

XX% expectation in And so back is of margins. exit that guide to closer come to start the start our gross year to as we we long-term XXXX,

those to longer scale, originally guides nothing structurally gets gets us provided. that And as we there's believe, don't to we've GX that long-term that especially back term

that. as bit a to year lower. about of the XXXX So towards continue as half work little first Think we'll the

absorption start in As some of you the we those fixed lines those tackle that back half, ramp up to of overheads.

Operator

Matthew from Sandler. O'Brien with will next take our question Piper We

Matthew O'Brien

expectations had little Jereme, million. on Just there? $XX tease $XX you can on think million you said a the out I more, program, to maybe, bit bridging

to much cost You trending versus maybe is year. hear. program QX which is that overall full better to like But than great better said the bridging think you it's ever for going be how But the side, were gross a headwind you of then more, too. margin of on profile helps if also bridging maybe to sooner gross starting out And it's is thinking a than than what you're seems maybe more don't the you bit margin expected. I off supposed said 'XX. a It headwind, for going even expected that the to be little less

just these creep wondering a on even specifically like the gross I'm expected, top for than the full bridging start year? So based we better all our margins far being things little as growth program line on more and should then for up as to expectations bit

Jereme Sylvain

Yes. contracts means our we'd we more where bit expected. me effectively guidance. in what I isolation, program, this think the your change at what ultimately certainly, question little ahead necessarily have head let point on don't bridging is when we're which this a is of place in But what do? take Sure. So a does we

And so will result little that's program. and going higher of as opposed through a folks the as be most bit a ASPs to bridging coverage

this it not ranges, gross coverage while But does guide help margin what great a for think necessarily And access about wonderful. correct. key for for who you want longer talked does that revenue margin strategy. changing I wouldn't It We of thing help profiles. are on being you those we're year. help outside does and help does a it full on couple Certainly, does revenue does It the term year. the being it's all to of mean is, That's product. That our margin. So one, I things. a said, and guidance the patients

was other for much the year. how question full the And

We $XX expected million, in the QX. in quarter. all expect a the amount almost of We nominal do of a it, first majority million, $XX

expected QX. in of beyond QX. of a majority Really, would your haven't any be We it concern

Operator

take And next from Thibault we Marie BTIG. will with our question

Marie Thibault

decision whether sort the the curious place. of that to of see and we coverage bit are of backlog physicians on Medicare of a aware on strong kind Congrats Medicare more a bolus patients, quarter. around that might very took patients ask come making. how on once I'm a Wanted they decision, how little

Kevin Sayer

Thanks it sure of it certainly in be create drive of for drive the and ask us glucose quickly. for DexCom up up question. of be But very and go it people us with will to to and that be both will continuous the decision. will in are It be and awareness the to that familiar aware to those and up aware pick to make community monitoring that There product to environment. communities. awareness will with physicians it to users will

So we're sit not going push. to have We're to going to back wait. and

Operator

our of from take Travis question next We'll with Bank Steed America.

Travis Steed

around growth XX%. So the couple last has quarters been U.S. of

So for was of year, I second half the think, record patient growth both quarters.

an specifically last quarter and the U.S. course over acceleration for U.S. did the we that And Bowl builds if seeing on first the starts the you new and ad, see the year. Super that? impact should time on what did here kind growth So trying of contra you how of in bridge to think about be [indiscernible] program the ex the then patient

Jereme Sylvain

Sure. Yes.

the way sort of terms thought contributor start a full I'll generally contribution, of QX. to thinking in is year total about in first we've of very revenue the how QX we're be with similar And a year as So quarter. bridging absent percentage about any program,

the about company, quarter company. patients driving down how that's of working think continued just year. then is add then, you bridging And driving we'll new the And strong that's generally we just course you and the pull growth new it from not an be which there. the through So total of patient U.S. program over indication and total growth. Clearly,

the inbound obviously those of and Bowl In translated were terms of of how lot last but to there that and into thousands how hundreds Not hundreds leads. did and all contributes, of Bowl was time Super we the it, patients there interest. then think about a Super of

One if much as there. there years, rewind challenges, wasn't though, a couple the of the coverage clock of you is

is bridging the come awareness We're have this what the investment. ready most awareness, be to that And we numbers will of it's very other to coverage there, it. in not so advantage But return around as a as to gets time starts very, on the to place, say take very the capital hoping and one, important helpful. a this think out I thing. strong And we're than out is, real that program opportunity there exact is give patient through

expect you you up was for with so, a do commensurate math before we expect And we that would on that expect. and what doing be we wouldn't should if And we this. didn't sign we return investment

Operator

will next Raymond from question take our Bedford with We Jayson James.

Jayson Bedford

a maybe like an a a the any sources up question. just Bowl bigger GX. growth force of bit But OpEx support It what and planned of of implied changes on I you ad in Super sales comment know hit the is maybe on to OpEx the in 'XX. can if step wondering looks it's are the Just contributor.

Kevin Sayer

big We'll Jayson. Thanks, I'll continue to it, picture. rather R&D. Kevin. This in is take invest

infrastructure Our spend Same has out continued a lot of it's a continue will for come our done. quite other -- on as years. has in bit. grow in growth. things G&A But some percentage side, investing as rapidly we'll And that with of been a probably honestly, build revenue, to and down invest as but it not little the

adjust -- been increases they and across as learn commercial board, could the biggest always side our in be move create can We've channeling those adept more. to will sales the investment, we'll all of commercial where spending very the the side. and Those on dollar most biggest at effective. awareness the going be force, be the marketing Our course we dollars over are on areas, the expenditures year in

we've a never if more of plan been have We that certainly now. but deviate sense. afraid some from analyzing it it to makes We're

looking we're our all infrastructure. of those the we've but to a those of the opportunities. international things. opportunities companies there's got there with over lives launch GX at growth we've got all great of several look invest in these We than in DexCom year, these this lot think combined getting and We've we A as that covered added. so quite and it they And a honestly, piece have past really of International at investment percentage because is bigger investment.

Jereme Sylvain

launched give Yes. just the to Jayson, And have it, first that just phases. GX, to U.S. more ONE phases DexCom But of with call some couple to and go. you We of the to in kind add outside we context. one,

the marketing with make of and outside the there's the a a U.S also launchings GX DexCom and GX outside we're ONE push going second so phase in obviously but And phase to the U.S. of U.S. third second

thinking about So elsewhere. we'll spend to get XXXX. is of and and want hopefully, investment in we for that kind where how leverage put you that sales gives context some really we're But our marketing

Operator

we our question Matt take Jefferies. And from will with Taylor next

Matt Taylor

product to with So on new get there's get thoughts on the I you touched spring loaded some longer I some want time. And obviously, leverage with just you launch, over gross margin depression this then year. term. know and initial

help impact So years. and over longer the next that for the can margins us think couple of How with wear that about gross label? GX Does expand? a without potential

Jereme Sylvain

there. start can I Yes.

course, sensor. But And spread even levers then to day beyond kind go of of goal. XX-day that. we Then, or been over per sensor, is public product has a the I get period. to a and $X sensor cost to a right. a $XX move and about XXX% that basically mean, to XX-day want out We the very of our there's been get always as actual want obviously, you the it. You're to we've that transparent longer cost

of have of we doing over that. long So intentions the haul all

gross potential opportunities even in would real long-term do math, Now you the beyond if that, there's some margin indicate guide.

shortchange one either otherwise partner be want to over we mindful ourselves of don't The to haul. other opportunities the long to or and want we thing is

levers So us well certainly to do long-term opportunities there for are there. intact, remains and while the guide

said, think doing to. all in do I the get there's other you're so And on certainly all right fill That being points. really things on hitting XX% to we'll that we so. gross to work we'll we're margin. future, opportunities That's some in what And other you hold long-term if the

Operator

Blackman Mathew from We will next Stifel. with our question take

Mathew Blackman

I I'm a sometime the roll to pump just range in curious, inputs have just appreciate us competitor XX% all you XX% contemplated XX% event you in to approved Jereme, competitive pressures in XXXX? integrate gets gave up any that guide. to that to the that with your curious, the XX% that

Jereme Sylvain

all of that contemplated guidance. it of safety we time, providing the we Yes. and Thanks and all in Matt. it. product pressure very I that confident competitive at commentary, our do. that it ease say how us, the out for rely there. right, that the there of that product think would all the on and think some about pressures to integrates about the out there, when mean, potential be that then the of features same least At Yes, what the We've we the considered opportunities question, accuracy, in we've we according guidance. people ultimately use. could all are I the we ahead when consider the you some for And is does, feel offering there our potential

we in yes, confident our But did feel about very that I guide. So it. we think contemplate

Operator

take our from will Chris Pasquale next We Nephron. question with

ChrisPasquale

guys Love price. the update you about are on thinking how

in hit stabilize you pharmacy. mix the start XX% said You channel the past, of to could your U.S. once

you DX there portion pull You're which starts bigger would a I a bit. now. of your might international imagine But also OUS the have down making ASP

can this price the then on how had potential impact tell year? and revenue us thinking about you 'XX impact what you're So in

Jereme Sylvain

Yes.

U.S. about talk with since the was line was U.S. gave $XXX of outside that. $XX of just the of XXXX just in $XXX was, guide generally the south in million south kind It the outside around which of U.S. around we'll we and million in think, year full and million a And U.S. So there I million the $XX XXXX

in right line with basically So that.

about good gave what feel can guidance there. you think I we So

G a time. starts in Series, see give forward, specific and over we're down price-volume to the delta going come would delta What the most is that we for -- is not expectation to since expect to Going -- XXXX of you are material that that in to lap migration. contemplated if things And all there. those migration to drift, those have But XXXX we've say, drifts we then XX the will expect wouldn't moves is XX, there's done say but number figures.

you which percentage understand of them us of to then you important X/X business DexCom ONE and suggest contributions model ASP expectation total your hitting point give And our outside forward. going And on way business, and there your To that to would the then is the out will allow ONE. modeled new think the of DexCom do a a be point, as why we G business you XXXX you're model I that DexCom to as Series will I for ONE. U.S. a we the it patient the was to starts in

thinking I about internally about the it way So you're exactly way beyond. model the way the for the is think we and doing go that that's model I'd XXXX and

Operator

next Kyle And Canaccord. we will with from question Rose take our

Kyle Rose

of the need U.S., how change? does focus understand in to investments targeting call ask help to the doubled ago. in an for a sales you on just I Do the actual approval to commercial forward. years few as or wanted sales you and I But forward. basal the point goes strategy advertising you moving the the question the additional prepare Just how just force understand force additional moving need make the people? DTC us

Kevin Sayer

of that management diabetes. expand ignoring arena. as not sales that. U.S. the Yes. successful earlier. think the in the more of the force time Jereme been addressing our continue are to And team their see time, Kevin. that in spends at This gave so our same take color bit is I a we've I'll with intensive our where you'll calls the of already PCP XX% by us places marketplace, past

Officer, great process entire in of we be may January. go. at geographically look of in U.S., but new expansion analyze of and thoughts that many on look the at Chief will that doing great the early the We'll as that within as even now. So detail We basis, a the remember, geographical And deep it we she's you where some will in we going just places manage everything large versus detail. middle across brought as launch there and need in country. those On in today to Commercial on the We're very else structure a that we we'll expand strongly.

Operator

will our take next from Lichtman We with question Oppenheimer. Steve

SteveLichtman

we regions And this year? longer-term Can outlook. ONE see platform should about the any major to DexCom year? GX play? roll a that is Or talk you you on platform geographic to the bringing this out any onto movement expect Question ONE DexCom in expect new

Jereme Sylvain

It's fair Yes. question. a

going give say, we going Let to not necessarily are me just into. playbook the we're what countries as to

ONE. for we launched Greece is out recently That Now in have there Croatia, DexCom now. and Romania

countries. countries. in go execute team know, feedback. and playbook launching our just context more commercial than will let gives we'll rather But that that but more give hopefully, So But you some will we be we you the give into publicly, that

So least that context. hopefully, some you gives at

We go. will

want to to factor existing on DexCom today as on time we GX, In make well of those terms the time economies a GX of on the reason factor. as therapy users to going are the lot get well we to the movement to across new G for factor, GX we and of for from form base be is, form as to it's bit and take ONE going Series. patients a as sure have ONE moving the It's that take DexCom little that coming a prioritize on opportunity bit user as scale absolutely little of GX going of to which we we

possible, moving the soon updates as though, as progress right to GX that, you're ONE right factor. about tuned. be DexCom we Make form But way. it as some We'll Stay no mistake, will years that on. after thinking the have

relatively We will there in move short order.

Operator

next our with take will We Jennings Josh Cowen. from question

Josh Jennings

And DME a I the Series Insulet think the reimbursement Tandem U.S. pump? just DexCom the GX was versus on follow-up just not the question. one? that the sure will up channel you've about in with patient. the average two, the then just with then change on follow a receives channel the pump share market on GX pricing introduction I'm should the is hoping considering to is, for recent a reimbursement a pharmacy DexCom investors G given important or for And to how that it update with And shifts in pump gets the the if

Jereme Sylvain

is Yes. channel It's version. about good to way it's think is question. about a more than think the the I it really Look, about ASP

after folks who distributor -- there gets the a way increase, is There's the which who folks it where and about is who to delta as publicly there, I $XXX think about access, out month. which general fulfills to ultimately that. think a Medicare around And it's the so goes think you

net the range; So in Generally, is that our higher be would is lower DME is publicly than south price that that of available. But ultimately, pharmacy commercial that's price number. that to us than that. and

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

ASP more over less time, how In about about where product terms moves as their it it of get think folks then think generation and to product. of of want

think it thinking you're about way. the I right so And

If way XX%, about, talked commercial. then our obviously patients, but of a you there. those point. price covered to, lower most through to split about a that's we that in patients at As having drifts the that say, potential behind the Again, there. could on those XX% that of XX% is come lives of think see us tick

preference. then access folks ultimately it, And depends pump in terms of and partners how consumer really again it

access generally is to pharmacy. through and Tandem the accessed right, generally You're DME Insulet's the

that their consumer channel. ultimately is pharmacy sense the it through through that the being believe So CGMs get it's we said, And makes experience folks consumer preference. all That great.

through do wonderful fulfilling product DME They a channel. job partners. that DME great really some have We

so folks can And way. either fulfilled that that, be believe we

Josh Jennings

I a Great. in sneak could quick follow-up. just If

scenario versus about as the reimbursement that all standalone? in just Just said? you across CGM the board? thinking that consistent It platform to attached there depends it pumps, channel, Or your receives is a is premium on DexCom

Kevin Sayer

reimbursement one is Right of now, there's CGM class and consistent board. products No. across the

Operator

take Stanley. next our with will Cecilia Furlong We question Morgan from

Cecilia Furlong

I to up. follow was hoping

You talked, in cash the though, about out models quarter just U.S. last pay the rolling

thinking from Just then that? more provide specifically, potential opportunity curious think if incremental you're as we how And color for about XXXX, that could contributions you about today. should

Kevin Sayer

going significantly and way. to that I'll able we'll program people's bet. will cost, pay when access. is Kevin. program picture, cash program with people GX our our that that GX, access have start for of GX will program. You And as bridging able individuals cash coverage we Ultimately, co-pays pay the it. on be than and will get pay a to be phase take be lower Big cash bridging for be to GX is to This out

create of well. We our it continue We this huge cash access cover they governmental continue federal of that portion just can't get We doesn't of and of revenues. major our but a patients' primarily is not percentage through a to cognizant pay it piece as there. access other and a not address them. why revenues. insurance need the we do It's those people's where program have on GX to our or channels it that's the needs. to be And It's

Operator

with Miksic Barclays. Next from Matt question

Matt Miksic

I could, topics If just some quick X that earlier. follow-ups covered the on of were

about and the say other of by you competition GX comment was contemplation just and on the the had your maybe you So ramping just to for what on manufacturing that -- wondering, guidance to were on the I'm integration if top the end the or have. to impact just production the or or a to the tailwind margin not this that front or year, hitting and we're all like But is year. end sort -- sort to gross facilities on credit that come, that. how the And and to margins you tough that on representative of your improving scrap think And margins you the if range in rates does of come, not not a sort put of pump slight range. guided were in anything the that that? spot wondering, And to about that of

Kevin Sayer

experience the DexCom's of respect It through the been familiar remarkable point, pump performance a What the the This may of regardless over years those results have more, the leader with bit And they're developed they're and been sensor the is. no has achieving such. to us we space based continue with perspective. integration sensor to with competition have the picture. and we right may up integrated technology now who receive of we've is systems With I'll will position is to upon the competing take algorithms developed everybody that a make not. using very data our going bigger continue in our Jereme that pumps to that numbers is pick CGM I that we'll in I'll the that DexCom. give uses my but Kevin. do know you

so confident forward. there we're offering And going have very very continue strong product a will that we to

of second to factory and we're the in come Malaysia everything same folks, there All pricing. the But half are up, the the the revenue because side. But down we'll that of is so in couple because different. is over in revenue has to product that's respect With you help a that about is The a portion same in a a the building Medicare bridging flip the And it expect different. of to the the in be is we on year year, All San half the change these producing that be we good talked it's will Diego. there's lines building have with be is Jereme completely see pick of bringing there. running per and Obviously, different. only for going thing when bit in bit we strong; course in lost side of on the lower the capacity do year GX and the on that's we're up we sometimes not Arizona patient the Then margins the pick as will there. basal reimbursement factors margin program up start. that first and

So as scrap, and today them at to to factory. bringing then speed number lines up and we new where are functioning they these with a you running how to full have respect of with with a components, run versus get respect and variables respect purchasing on

update going significant as goes of to particularly We contemplate every product a when we'll time tried because have this are started we've how one our things so as to whenever do But as just that we for. launch, product those on. because much variables you margin much GX when than and variables scale plan last launch, we on we we're activity big was a were we bigger had more similar to did but smaller there's it you before, have

of our teams. performance thoughtful on in based We've tried guidance to expect the and conservative we our be

be and our you. to than launch We don't meet tell this to it. every day looked covering them, as really all are will bases. make the and sure ever to things better they product bar our us as this every for that too. important at -- of users also contemplating We really But This it's we out want the lower on teams get one we're our all literally expect those is to margins. of important that But to all we've

Operator

our we last question take from And with Wolfe will Michael Polark Research.

Michael Polark

you I that's the I to prior consistent up thinking million. square. heard full patterns. just wanted of your in year this If range full seasonal from quarter then made question use bridge revenue about my The years, first last XX% to the in X guide, response I follow quarter. with make of Jereme, the first year program I you're to on XQ comment the down year, about sure I modeling using the have $XXX midpoint But have there.

million for million or $XX $XX say, another, quarter. be would that the So

at or not, I'd be So $XXX can million put I help? Have million. If correctly? this you $XXX together

Jereme Sylvain

past. from I directionally are contribution QX right, expect decline what the off. mean similar not be into QX to the to sequential very Sure. Yes. far and you seen QX do mean you're really the in I you've we

put that bridging And our so the as opposed number. in the from QX. will million then about It's that updated That $XX of a will program We a you And you sequential there, you to a as result to $XX decline right. from as will million ballpark. now help get you ballpark. about But as into $XX million. the think well closer get bit QX little you're into

of do you rounding little use You're ultimately not edges in there's but you probably Those think far there. context to the the XX% sequential. a that XX% also Hopefully, off contribution need matter little bit though. there. around but gives differences tweaking But that

Operator

this questions the I and additional closing gentlemen, back Kevin for or remarks. at Sayer further And ladies call with to will time, any turn no

Kevin Sayer

people's call thanks, in Thank fourth XXXX. where lot of again year we to here launch. to are targets, At on want to lives. back same we And spent and product our joining We for talking a hard technologies, today. this and we've it's very controlled our step our revenue fourth advanced our infrastructure our we've major their time, at single us launch our we our and company my all for people just all costs. quarter coverage advanced accessibility everybody, a enhance level. another of this This great here time excited But every over DexCom. for you and world I the thank delivered much about our work in very time, for is company the at taken

was that when for we first The GX. than came And CGM to GX be was in bear. better the accuracy time a system what remain standard world. and most truly accurate GX we be going really accuracy and to is should experience will established the

end our everybody make very am can. the and as I great the busy far be this to XXXX. going say ever product we'll so be have our we do responses accessible time to confident the ease-of-use DexCom had same our we will we from a from we at things. Every is It been accessible most drive coverage always That's try easier is and now be as to I'll use has we this as able to for continue far. commitment always, look users. here year to day. so. as great advancement that a and make to the biggest brand the users hard sitting we've Thanks, very will as CGM as product a and And and

Operator

This Thank your you, ladies today's call. concludes you for and thank participation. We conference gentlemen.

DexCom (DXCM) 9 Feb 232022 Q4 Earnings call transcript