DexCom (DXCM) 27 Apr 232023 Q1 Earnings call transcript

Welcome to the DexCom First Quarter 2023 Earnings Release Conference Call. My name is Abby and I will be your operator for today's call. [Operator Instructions].

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

and DexCom's Abby earnings quar call. welcome you, first to XXXX Thank

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

everyone one open an Following we events to analyst on and ask presentations will up today. website question we relations your provide the participating to can so prepared on for that DexCom's the to our also we questions. note for opportunity the available limit call the investor slides performance remarks our there At time Please themselves that quarter first are page. related

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

are to hereof this and actual presentation the will forward-looking materially information results may we forward-looking performance. intentions, today's various in forward-looking of could statements and strategies, from uncertainties. future statements. management's reflect and subject DexCom currently risks in the statements. statements and And the products, make differ constitute expectations date to beliefs about on All included based anticipated are competition, events, those statements call in made as plans of These operating Some available

actual these Commission. Securities this to after Except of obligation XX-K, to law, recent The forward-looking and Exchange by Form the those any annual required results. statements quarterly statements factors statements DexCom's XX-Q conform differ the of report Form are update actual forward-looking or that most could expressed cause on assume with forward-looking results to and report to presentation these from on materially or implied filings detailed such in other no as we any by date

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

over I to Kevin. will it turn Now

we Thank and we first us. you, to with you, reported everyone, of for global another XXXX. growth very XX% thank the revenue to quarter for organic Sean, to that CGM see and joining for an quarter been Today, appreciation the of for compared a DexCom excellent quarter first remains It adoption continue high. DexCom start growing Momentum exciting experience XXXX. provides. has differentiated

to their growth Our momentum that rollout bring based behind first as continue launch for launch teams specific our product from advanced the GX system of needs. meets customers our years most This the will in on important years U.S. in foundation the market the quarter of of There ahead. GX in our initiatives initiated some a feedback strategic our build of to is growing hard work on we that . full to represents our

covered simple accurate the is the by the It on CGM and is is to use supported CGM GX market. most most brand.

commercial, for opportunity initial and this with XXXX biggest that incredibly customer We clinician the to exceeding generated metrics. and awareness. add million Super Over second engagement our expect DexCom as expectations encouraging Xx our expected air ad the ever were people thrilled as game Bowl commercial. stage this outreach customer commercial Bowl will were our We filled be. would we impressions it on was The many on the feature as satisfaction on differentiated XXX leading watching our our launch to set Super announce the with

demonstrate of people a designed also of this the in product opportunity to and use the our we this system provided use. to Millions us and DexCom for CGM, to represent Awareness simple from advocate moments incredibly platform and to We diabetes GX magic a on and and remains with broader life-changing with connect campaign adoption this shared CGM, their diabetes potential of element members on of size. both to their a pride not community an feeling is critical behalf. who and driving heard them access

of early the response. have we still very launch are our While been initial encouraged we GX, by in U.S.

from seen been We ramp and has both of great. have a clinicians steady and feedback consistently customers initial the users new

this the of previously weeks have building made about timing who were in Already came have CGM. DexCom for prescribers reimbursement the product established earlier of seen only also encouraging in progress prescribing than and new Super have altogether. this X,XXX was for launch rollout, health a nearly prescribed anticipated. period GX time. most short with not GX well early our GX a Bowl coincided attracting we We after providers in Perhaps of coverage Medicare in commercial, is the which only care month days our

quickly with reimbursement our now coverage clearly DME recognizing on also In rapidly. DexCom Commercial is levels. that payers GX We finalized GX. progressed value already coverage commercial DME discussions, also and contracts exists par the our proposition with has pharmacy relatively commercial GX are

PBMs step pharmacy commercial competitor by These GX leading performance set, GX today best-in-class result, also our the edits. outcomes decisions second for for more more forward industry customer takes to engagement for quarter. their Overall, a coverage than for clinical we covered all backed and as position of premium have Payers our a us does well we we advanced coverage GX significant of coverage terms feature and proven value quickly than to end access expect metrics, major by continue the in robust already have anticipated, sensor CGM. by our established As be platform.

hypoglycemia. diabetes industry's coverage history. using with kicking officially access insulin basal as in individuals certain week, last single represented X our in March, their largest the well to type this that In CMS include finalized early expansion of to as access to expand proposal only decision With experience CGM people noninsulin-using

basal-only type As we age. X X in around the Medicare of reminder, people size U.S. a at with alone million around half population being the

We see excited to to this a significant more start are as lives. population serving forward these individuals going opportunity broadly we help incredibly healthier live

timing supported Our levels and DexCom cohort mobile changes wearing improvements trial proved sensor behavior engagement to produce demonstrated meaningful glycemic hypoglycemic range, in among this control. AXc population that greater within this sensors, events as

compete as accuracy, delivering of the a develops in are great will defining to position continue features this We be as to engagement and customer market performance outcomes.

data exists, a well to dynamic where to leverage we indicated expect reimbursement those historically access this care as and as lines, for build will and Customers standards updated we ADA differentiated clinicians product our have broader to preference endures continues the to of Along a coverage. continue mobile expand.

similarly in international with and U.S. payers basal will coverage We are in discussions establish in to for markets. the active reimbursement advocate broader private

as using this new both as is Our international the well uptake also well customers satisfaction initial a and positive international continue at customer we rollout factor months. sign to broaden Majority those coming as new roll and GX as our feature the DexCom systems. view our to continues of GX in competitive with CGM form people be high We attracting to rates. altogether, suggesting go very set to good new

international to quarter, In broader will our in X be we as effort of this to peel part strategic markets many a product rollout. new this launching GX get in great to possible. capacity as we shape the From perspective, second as remain support

GX inventory plenty ramping of up have quickly ambitions. growth our on and production are We support to hand

product midyear, up. start we expect Additionally, which around GX our commercial support plant Malaysia our further will producing to scale

we hometown XXrd of Scientific in at the San look in our seeing of many Finally, June Diego, to California. forward Diabetes Sessions American Association's Annual you

with DexCom We across this are connect industry event, work Beyond. the as technology CGM Care future Diabetes & the map thought collectively always in at excited of to to out we leaders

conjunction we detail DexCom to our there. and the We incremental the are In planning vision initiatives. will strategic of around you our future latest see investor share many where on an of event provide hope with we key conference,

it will the quarter I Jereme over review to that, a Jereme? financials. for turn With first of

Thank you, Kevin.

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

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

uptake million revenue the quarter revenue of As acquired of currency quarter. demand representing a as of a for reminder, starts the strong in first for XX%. totaled another QX, final well months. customer the definition quarter an first U.S. excludes for encouraging with addition of the our $XXX as of compared We initial of quarter million the in launch of continuation revenue our organic $XXX trailing experienced GX weeks non-CGM our growth to steady XX in as GX to we XXXX, saw in new

mentioned, progress channels. the through as Kevin be to to we able GX half we'll the the anticipated pharmacy more This As coverage customers were $XX million be in for bridge GX quarter. program commercial than of our level impact around faster our access reimbursed to caused able of expected

should in Accordingly, quarter. this was International revenue revenue coverage grew for first growth commercial from the revenue established totaling quarter. the going $XXX to GX. program first on given for million continue our the XX%, shrink International impact organic forward XX%

in markets our as For launches. to have continued to QX well access been share international customers and in broad another quarter, initiatives responding new product we gain

and having the the on our administrative to addition enabled clinicians us U.K. the markets new transmitter this now DexCom broadly we for drug markets. to momentum. was product compete market covered this with system DexCom growing to existing the ONE As tariff, In the where ONE reduces is within enter much more a anticipated, has the already impact as of a have by with recently results underlying access considerable the formulary products simplified in entire steps national

simpler these work We customers to for it DexCom wins, and get on will to access types making reimbursed to easier products. of delivering continue

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

GX to margin step fourth relative down reflects launch. was in as for margin pharmacy mix quarter gross production first Our and efficiencies quarter for customers as high DME QX contribution This managing of health result serve while our our better-than-expected lines gross see we traditional delivered the greater we plans. we GX from what in our users a a deductible less the incremental with

in with our we scale GX we global anticipate full margins gross to the as guidance our production. However, line continue for original year

team quarter Operating Operating efforts, million first with this expenses continues of XXXX. $XXX.X of of generated to in on to as million support for of greater to leverage cost emphasis the display part management GX ongoing to our for and QX expense be be we In point an our we QX XXX OpEx allocated it as basis were $XXX.X compared XXXX quarter. investment continues of over our line even commercial our points launch. in expectations, broader

continue million XX.X% was We $XXX.X worth equivalents first or proud make of our quarter to XX.X% compared efficiency per and income the financial approximately to of cash in million of with million of quarter revenue of has $XX.X are quarter closed was or to quarter team billion the for first in same Adjusted very $X.X We made $XX.X for revenue remaining first was $XXX.X a X% XXXX, position. quarter EBITDA the initiatives. revenue or efforts Net share. great the on of XXXX. Operating cash for in first million XX.X% revenue the compared income the quarter million of and $X.XX $XX.X of or these the of XXXX. or

Our of assess of investments, build-out continually the our Malaysia our significant growth manufacturing our and with uses flexibility capital. organically ongoing support balance us provides including sheet strategic to facility

This start As in which product a Malaysia we long-term a and provide facility key significant capacity element our midyear, we expecting our plant cost view a Kevin pivotal manufacturing and mentioned, journey. global growth our plans. be are around new reduction as of to producing will commercial moment

Turning to guidance.

of a billion. We billion to are XXXX year raising $X.XXX full revenue range $X.X guidance to our

margins the originally of and first XX% the $XX revenue from we our factors prior reaffirming finalizing profit of a in type business The XX%, gross market. operating our basal results the million margins of of in EBITDA midpoint approximately guidance strong increased CMS guidance than well the This earlier adjusted to margins margins, at approximately coverage range year benefit XX.X% as X and of For increase reflects our full of XX%. are anticipated. in confidence quarter as approximately underlying

it will back With that, I to Kevin. turn

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

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

Robbie Marcus first And we from question take with [Operator Instructions]. JPMorgan. will our

the focus and week. just guidance what start, of the Congrats initial the last the of what what's Maybe Maybe all in basal quarter. at to on cadence speak reception is how a the X that your you on think back competitor great do the of CGM market. do think initial much the X other expansion then a Bowl maybe expectations awareness -- have is the And to acceptance and CGM beginning to basal. full Super here and for is and the you type type started and to wearing patient you awareness what is to ad, the on time also educate

Thanks, Appreciate Jereme. Robbie. is This that.

start there turn thought then it around wear Kevin and In process can terms of in times. over maybe terms I guidance, I'll to of

X%, our And than percent integer. it guidance talked in guidance, of more range, but being terms In necessarily approval X.X-ish that we us the if had has not started of the year certainly higher X%. basal prior middle in about updated to about changing

context that what gives reimbursement going. in longer would change we it some term. to hopefully, is be Certainly, to say where a I that's terms you So for market expect of the

In terms approvals the those just just we're reimbursement. of adoption, getting and getting in obviously in

term. little time of in you've very, Maybe term, to But us cadence to be, over of see got our for expectations. positive. adoption channel bit to I awareness going how frankly, times And kind can and quite to take is. it's long it of adoption terms that the turn So in ultimately the where expect Kevin in we very of longer a

during information provided the their mobile our provided really that the They plan Yes. forward. and going study and they securing felt sensors was our were data the up. them Thanks, this of much a best want is to XX% they give useful them to wartime reference Over most approval. can important individuals the study scoreboard Jereme. in who valuable, very very diabetes of how With respect very manage

progress better So could have they and it much doesn't outcomes.

take efforts an so We in anticipation some marketing we on we're channel made going in awareness. work position in very did to with our force very our and good to the this with full our And educational have confident broadly, perspective, to direct believe hard need create we see to evaluate community. We were. adjustments year do we PCP the on to be a partners and From to sales big distribution very are last do more full-time front. a work of what with go them continue expansion more

I've few So product get it's creating field awareness. out making about about in it for a easier It's patients to their and been times. use the it.

much strong a definitely the And going view thing physicians as to and care better achieve so are is who I as market so to serve lot is one speak to easy this patients and they versus for with a their use outcomes. a this primary I'm to easier GX, very use GX real very the hearing of opportunity

proper wear awareness get there. out time So the we're people that to work we will comfortable product. creating it places just they right once all the But at know we started. the We'll on have it get

question with Baird. And we take Johnson our from next will Jeff

who probably was So or the talk you the of of Kevin, in program about impact I Jereme, heard guess, talked about that and it you I XQ. originally kind thought Bridge half you

points price on anything for and the month Pharmacy didn't program, on that some the $XXX, GoodRx of we're per in You roll cash starting see range to and product. these $XXX Amazon hear pay your out

revenue discounted could the to program, And how prices? are implications cash at that updated to additive be any you think how year? what about initial pay Just margin those you're responses thinking the do seeing this to think that

for asking the Yes. Sure. question. Thanks

a program That advantage updated where news, is Bridge in bit folks taking earlier. of it. amount point has of lower great significant of coverage the are So And The program. little come Bridge bit little price a point. the is is at obviously you this a course,

And so had take folks certainly, haven't we it. much of advantage have to as

seen have is but programs, initial. cash pay those In terms encouraging of initial adoption, we relatively some it

Jeff, good margins you a to about expect it's longer this margins. term, additive, shorter come So see Longer-term to it but and drag will term, In long-term not don't offers we start the again, really think it believe excited longer be. through, perspective, those a can opportunity programs. we it contributor, material term, be pricing to about what We feel . we're the in those cash very folks. on have pay we as

out work necessarily we'll you've these doing and GX As to our quarter, continue we where of the do seen our in long-term won't on designing both really cost to be margin. programs gross GX with well to on that dilutive product, continue to really, and

from question next Wells our Biegelsen Fargo. take Larry we'll And with

on with volume -- just in Congrats XX%. think the there back to cadence XX% about XX% is separately, the and adjusted the you in why going parts the for on X to start what it, are there. first growth? bridging about and for guidance, Abbott's QX call program and compare what accelerate the any XX%? color to is quarter growth the the any talk U.S. People Just volume year here. U.S. your, XX% wouldn't Jereme, me. was the basal the GX mean, you launches year? a I Can from going the nice bridging if was you on growth versus contrast reason out through And

if forward. were volume say I'll volume start can first. exiting you our at with we XXXX. look Yes, Sure. is we specifically Well, we're base, in not the question quarters where going necessarily What disclosing patient

in grew patient Our the base mid-XX%.

through. quarter context patients. was play first what the And we so patients, the base like continues understanding. for To record give some so first new have that to a year, quarter, every as disclose and that looks to folks do we'll when patient we've about you That talked an

to strong. continues growth very volume unit our be so And

about year. feel good unit to feel that X, you volume about relative very compare for competitors, we'll and as continue to balance the the So the growth our good of we

to In year, about year to the That's terms realize I do will -- the is into think and basal a half you go up number about of do cadence given think recognize years. of the are approval relative to heavier The and where QX, just back the the will be of a as of we But timing weighted how the going. we have today, get bit that little cadence prior Street to that the starts we bit. little think as

the will play record QX, so QX. into you that through certainly new And overperformance see patients, in as

And the related to so guidance you'll that QX in performance. increase see some in is expectations of specifically in increase some

So covers questions. your hopefully, that

will We question take our Matt next Taylor from Jefferies. with

the have how an wanted quickly think been compare I the pharmacy what made interesting was one to ask So than you your you in coverage pharmacy established opportunity in and thought of competitor. I just and the you that how ultimately it about coverage that can you garner? much the means you Maybe about more has you that comment could channel. for you think basal talk that DME

take add Kevin. and This bit I'll is can Yes. a that, afterwards. Jereme

sales opportunity, On basal and worked position is successful to Medicare in have very them we with we very be medical and to with equipment, and process our the durable channel, remember, basal that distributors the relationships good hard patients.

very we're so there. comfortable And

to coverage, our to approach think it's our respect With note I here. important

have of co-pay repeated competitor. Our getting -- coverage, have least commercial our XX% X out-of-pocket and the major times, lower XX% goal or all several minimize pharmacy to cost customers. go to Dexcom is to the users we've co-pay, our this users And as of equal at the statistics by

arms. covered still program got and in than all bridging successful That's very to important for forever. drug and we've monthly the to and them bridging to to about In The on open is front to then this team us of have the many rather were new which through get the very that. approached the our We product met and very Our talked fairness, through were a goal our GX getting the don't on in why to and with have less We've place, payers enough, excited long very but users. it. customers need opportunity program is and them And They're ready rely get them of basis, open, this them it's at coverage that pharmacy an out still aggressively. coverage to store discussions. it's we've opportunity there, go again. creates is spend

Margaret Kaczor with We'll take William our next Blair. question from

guess, from to taking and want the upscale Kevin, away something steps can I term too earlier I the which us driver drive orals give data? type clinical or X the you're this where a of whether working Or context stage mobile the that Are I on of don't clearly to today in get and a a lot short a even is. can guess, focus far guys -- to huge I to where some adoption at and you this basal that? are study? guess, on GLP-Xs going point, patients, is you without like programs, coverage require sufficient partnership broaden, But

to it treating insulin done. want get We you all for X to there, right with are do can is, benefit gets evidence could acre diabetes publish CGM when do and seen that the very I and -- It's study diabetes we're we to tremendous Margaret. show do all it. type but about the type without do of being like you he fronts X sophisticated. that benefit how or Thank The succeeding on are We and physician on tremendous like XXX,XXX scorecard. not And strong become treat have proposals announce. was nothing you It AXCs or what's great we've seeing programs talked knowing CGM, vital recently, to type with but opportunity. aggressively who go offers and X you opportunity this? on can more we to contemplating we wait is a How a the think individuals don't as We working question. see significantly scorecard on. in of We down We're we use a early the reduce there from combination where will aren't past. study do type till going great it increase DexCom in We that gather We'll done in provides provide data think the information, offers announce an the and continue GM therapies. and bring for medications part. to on contemplating studies patient rely you're But data. are a our that X don't ready we studies takes a question that now. body need sensor using you evidence, again, We individuals of years, the

So stay tuned in more it about. we on we're the of believe is We a talk role that all that market. in coming. advances play We'll vital it spite about reading But future. there these

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

more you overall, in up up can a in little volumes you quarter domestic I just and this is question. XX%, that the commentary the total. think a XXs, the in first bit you Jereme, talk XX% made? yet about but pricing said overall,

a that between So bit. we this should pricing are with Is take with down you? a then here close done delta gap of And trying you up, anticipate? the your that mean and entirely just be just came quite pricing trend pricing really X would the competitor to

relatively on backs another and was within But it in it for us, quarter. the I is that quarter I patient the on -- part based the coming give of was the necessarily our Yes. pegs of was trying quarter up good was of necessarily specific volume a is base robust. talking And wasn't say was that's to you as I I the new question. I what underlying the you our we year. It base is would we add. record patient the about was gave on not And volume appreciate patient was a and in mid-XXs. once what kind

didn't to bit. just quite over stabilize and to that So specifics are moving get from can to channel -- price. That do to is DME volumes -- There pharmacy, sorry, want from some started going into tell time. you, us converge a pharmacy still volumes. I I'm has is tend What less generalities continuing I on. annualization around on in Price

So -- is extent. make are which lesser what we playing talked program the through a that albeit through. earlier, we plus no still about annualization bridge mistake, the we going to have

how prices up is So moving the expected. would we have

So won't around insinuate base for that was just trying trying X. robust really give an was the a there underlying delta increasing the strong, quarter. I between to some I to context patient

into too want that, I and the impression. didn't I if you gave wrong So you apologize to much read

question Antalffy We'll with take UBS. our next from Danielle

good Congratulations the on a year. start to

Just kind any is, looks the basal that question we insulin a -- X Kevin, question appreciate at I ask this are as even look we say guess proxy going Day? an at I'm given ahead Analyst awareness technology, in from front-running basal us be to perspective. and years reason from faster guys well X where is try you after that months give I But I could could without that ADA. that true the significantly update a to to for were to coverage could here because basal going an of there. of thinking were opportunity, my ramp is there at type around arguably like we think type ramping are Medicare mean, in X of looking intensive XX%-plus we X you penetration you And as insulin-intensive for it XXXX qualitatively, to securing as Anything around

from with Medicaid well payer No, to reimbursement half and discuss of It we're private a our A through on do question, payers there the good start as programs Medicaid lot intensive landscape. patients also payers. bit reimbursement that population. has insulin pretty type been side the internally. Medicare then and extensive Remember, we've there and only, of the the the across X got penetration with get most therapy. it's one much still, Medicare to to but experience and that's always and work We're drive it's private with to the now a we about

large early I see Danielle, can evolve a a reimbursement got time, we over these period, does on, that. but not And and And same with of think faster in to At time. then reimbursement going the it all X-year seeing have see experiences we such group get users you'll who these more maybe endocrinologists. they're coverage. I are side. So definitely Medicare the we've have go end on to users because generate

a So to cover providers got we broader that care we've base as have with of education their respect well. to health

that as factors we'll it all look the talk we about factor we'll later. we more in all consider and But it. we are go, those at as So

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

Just users. questions a mentioned answers. new was short two require XQ quick think Jereme, for you record that I

a you Just XQ new added did are little users in saying you Or XQ? more there. -- it a clarification XQ That that was record? was you in for than

we more than ever added quarter in We've users any in have history. DexCom's in XQ

Very intrigued Kevin, your And reimbursement. something something around comment I I'm just was Europe in talking in basal 'XX? curious, of And that if that could is 'XX? to you by happen actively in clear. expect would this payers this then, kind not, around is

It will not going take overnight. to happen time. It's

data we gives pass. good with provided outcomes that study Our the first mobile us a

with that possibly some economic to see outcomes the States as these I patients. gather require of type work and we success data evidence. we and as of think users going in more see United we It's

we note. with can table. world of have think we when But CMS develop think this the may team we because on certainly nature, don't the I takes certainly, me, -- more. have enough need I yet it's the approves disagree to don't we the it's personally, discuss So policy something And now but

audiences continue discuss push. to that getting to we And and are internationally, so now we'll

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

dollar and that user year. that also ONE make the I between I'm difference I'm to sure there. might to Nice And includes adding many countries are this new want in the going the DexCom start I then how that, to to in ONE comment. assume user DexCom growth group. patients curious be the that in currently? understood is

Yes, ONE include sure. It does DexCom user.

we're is We're about entire this countries. also uptick all. seeing have see XX the head math my the then, countries starting is XX the So launched. nice countries, like course, XX say group. in do ONE And It's to trying that countries well. and where want of I we now, initially DexCom XX. it's the really to smaller some XX to to some across about U.K., as those I'm to some uptick coverage of of bigger we some in

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

OUS, about DexCom follow-up as I DexCom talked year, thinking entering know quick starts, stemming a of the patient new ONE. about well. you on X/X from Just

you if just now right expansion expectations where then contributions your XQ? talk through are you going that think And year, as well? as could in the curious forward you Just about about there geographic to

sure. Yes,

decision to expectation So can transmitters, is new there makes for you And it I still some just on The of the answer things, U.K. can of easier. encouraging include patients. the with example, X/X formulary see, that. as

make And it's it, way the easier easier be. so the can we going to

in So EU that's still majority expectations. our now, region. ONE of the a sitting And is the product DexCom right

other world. of well, you'll can in jurisdictions and U.K. DexCom launch when you including think the ONE that the expect in until region, So meaningfully where future geographies, see we the really the the as of of I associated across the think most of most growth think European foreseeable to with growth for

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

Another how XXXX for reimbursement how a update business with Can important me, broader sense for a annualizing curious and outlook? component a just got you Japan international at that an now on in really is your you've of that is it give GX. just much one us

it. is a This XXXX Kevin. Yes. component still our small outlook. I'll take relatively It's in

of provides We GX in We've stronger opportunity features. Japan, us GX with bit launched over great a to the our there our looking a much forward candidly like. a not an with broadened as getting coverage all the a we'll but increase, with in We're obviously partner, there. Terumo, time as working this grown we'd are and see market plan think not its material part is it Japanese year. over We of quite

we at part at GX will is plan 'XX And of so 'XX one the to looking year, as we're ways look of it a bigger go those. than And be substantially. faster. be our

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

completely or the the in of? much how new call GX have like prescribers are to clarify, wins prescribers You and competitive to you DexCom. had new potential on how been the then front these to these as much how coming to complete by of able GX many of I And intro get are started the you seem prescribers describing coming prescribers want just CGM. the and that to format launch is

Yes. This is Kevin. that. I'll take

that DexCom to, who to. a used CGM. What it's our lot to we We new as could, lot be know prescribing have in structured very we we after GX go force us. that's fact, to going particularly go be look we A have. educate those goals and know a is their prescribers new to for of to sales us. to and of GX and designed most are of fact, opportunity basal go important broadly product, need to have prescribers what's the go and prescribers you the they're We do at to in we year to because ahead the and have for workflow we new gain

Either feedback are to much new patient after the have. of it's So a if form The well, accuracy receiver, X performs If really things. with people we're office is and seeing. they've what on chooses small to getting hearing CGM they've system. they're with products, good. receiver that a of in experience of We very It use we And extremely up easy what had with that come competitors' we warm than are is they're get factor new to again, they're easy both receiver and to or DexCom, with just back the great of GX, the insertion happy before. X doctor's with the view better excitement the general are started the a system, new so what easy using to use hour GX X.X in somebody and ease is a on for which the use. so

this been has mouth of very word strong So on product.

been have the has aggressive, but what strength supported the we've campaigns of said. Our product obviously

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

I in margins. QX above year the margin to actually wanted guess, full was I touch guidance. Gross on

margin? the longer understand the term I we're on OpEx topic and margin guide. bit bridge gross leverage to maybe little talk a So maybe that want And about while then the long-term upside margin on potential above to see

the thanks Yes, for question. Sure.

played of which those And base, course, our there's through. large quarter. really what You're right, a favorable. QX through portion played And in we came lines of GX saw efficiencies that the given continued saw is certainly really lines on that was of GX that we ahead our sits expectations. on

was on lines. the expect, therefore, course it full and turning throughputs more ahead as So year. GX ultimately of We do up of the to Malaysia, as and launch year our ramping over on the more the those folks move we're

bit transition. we through margin a go a as will that We make dip of

you product you so QX capabilities still over expect strong. we the still the expect And But terms can the line And I just them When with of came I lines. in course gross the do that XX% on year the margin. year, in are our cost right, what time do XX% shows fall to think of -- of just it in they manufacturing out designing give teams. of to

years. to We into expect that GX something like to on happen similar those future

XXXX. In margin profile terms of guide long-term the to of getting motion by profile, gave operating certainly margins XX% we

building goes even to the was you gross assume that at margin, business. to you starting XXXX. we're get into show XX% in we're year just to leverage And the the close If there pretty

change our a we're in to not long-term guide. While position

the now lever organization. the we in question, haul right part levers that long To that's there's as over to business place opportunities an what And putting do -- think doing of your we in we're this do. we're

it there's more work profits opportunity. I'm on continue to in continue We and to business this glad pointed excited very doing that we're out. opportunity so. term So we'll generate about longer do believe to you

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

middle a statement. quite of want grew couple a faster ask SG&A this I bit questions than to income about the of the sales quarter.

down now row. as been it to continue? drove And trend that expect four back then Or through a specific there does Just quarters we that. was we to go that year? anything R&D Should this ramp in year-over-year start up spending has

Yes, a of it's a It's function good question. really timing.

work if as lot So we a for of R&D. well R&D, I'll year, on think about work prototype lines you start of this up were the the with wrapping development. wrapping up time GX as a lot last around

rest elevated through running spend. down what started so year, the validate saw you those different the as you up lines P&L period into it through go And an as And costs the as much of or kind areas saw saw anymore. because back of lines you either dissipate come those you of move was GX to R&D of

happening. so And you saw that change

for to R&D. be saw you what leverage I the year, course of this of of that leverage expect it a SG&A. Over the not as would won't it the It's type sales, on quarter. still percentage continue We'll inverse in just but

a year, we quarter. year, Super Bowl -- the have we we the launch a obviously, first or U.S. GX in So not did This commercial last in did

with the that's level with so long-term was guide. an And It saw change. you expected that, spend coming which elevated but associated of in saw all out we why our you expected,

G&A. part we're But closer so go up costs costs and sit other the The in up until we're that as is you ramping those to factory, getting Malaysia go-live we're live, do see costs. building we

you'll more it less, by the year the And bit end year what R&D ultimately goes a leverage little SG&A we'll the little both as but lines. So conversely, leverage see leverage those leads is to still of across the -- we'll bit on. a start actually of to

from question next Matt with our Barclays. take will We Miksic

basal Some follow-up on here the opportunity.

of to speak a amount we basal fair describe on clinicians something pent-up demand So like in -- patients Medicare community of patients. this

channels If core also maybe mix margins the or some if talking I different given we're manage. also What in this you -- just of of just of about long factor take that's mix? terms wondering category, other these of way And does that in how sense for any this types community? pricing -- set you and you you for could margin if compare how sort long sort -- that think have then do pricing your your of and business channels how all you the on that to to up? of is the it Like work and through seeing interest will this pent-up are

handle said With specific, as earlier, people I we Yes, partners more to our to business I'll for Jereme get the I'll for are models, excited We've we're in channel we same insulin got Medicare start, do to a go to there. therapy. have pent-up then influx this this ready very see will worked Jereme distributors prepare see intensive We hard is from do that DME who for the little our so through come we in that users our opportunity. demand, and that. that let with and again, very with pricing of those on respect go Medicare can pricing and

could an Medicare only change Medicare overall of Medicare us. is thing become is our and reimbursement. larger patients patients very basis, on portion a to the for favorable So And that would subject

to in there. We're Jereme, with these to you want them. that? we're excited position patients. serve to very good a add do So very

exactly. has Yes, mean, at through reimbursement it the I depends that far, come day, ultimately line reimbursement a margins. the at I that's in will would what in generally think manner. on end Thus determine the come of in the favorable

we this cost. you deliver throughout lower we'll then where looking eye But going. we be that at Over also this guys a make products what process, an we'll conversation keep looking the how like. at looks we'll long have at to reimbursed, on we'll be reimbursement at And sure and all what be we'll term, our that is be understand looking -- to

that well. And be so our of way through helping will manage that as

Canaccord. with will take Rose Kyle We our from question next

of in well here. set of evening, set expectations for software Good half adding those next in the wondered last level the of But at launch. go-forward the could as Great. I the second of if just use FDA a you help that request with a some that just early what's be as days the R&D some on extending basis the of pulled year, back features respect product you're guy asks guess new everyone. when I'll you stages expectations to

have shut to start end I X the alarms app. for software. to feature added for off the up stream going back a we you're upgrades and app feature the on example, of than What platform from on continual in investments steady of do our Why more upgrades easier in past. We've software have the to we're regular much we significant can in looking of we side. made certainly the will time. the a with hours software GX's back, see upgrade adding the for course the we be was Part the basis is more that and the engineering much a of to be over U.S., done could than -- create to launches That before that don't And in past. year. the We'll we software team

for excited the will So we're feature back as of end that the that before users. year, be our as and -- our

get R&D As what our the far to there. is in sensor those extra #X as comes days group initiative next, of out wear

to some about talked we've we've this do got publicly, the work on As patch.

manufacturing have we're patch going can that a we know make other programs and manufacturing it we there, We life couple to better. into new the that extend have a it's put of new a processes and and

progress. XX other is not-too-distant changes, you'll can in we And days expect. the be is here our team life priority, and What very making reason #X good upgrading couple It future. patch By started a that our the and we're reliability what we the with see there. for confident quite our extended we they we want is experience users the and of struggle and appropriate

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

opportunity within patients. of was basal-only understand how lot focus thinking the I obviously, risk. Guys subset LCD, to very LCD I going the you're a high. numbers and on on are the think But we wondering based about be a as overall understandably noninsulin-using hypoglycemia -- the on was it's wondering about I the

about thinking pay commercial are that? approaching well? how there as And curious you just So you're

good and certainly, that kind market. a go different fill massive Maybe Kevin market. the And as I it's you start, market, there's can acuity, use Obviously, subacute can cases in. the question. within within through of then even that Yes,

an multiple about few change to make target from different So to reimburse where software levels. a it a we approach. a combination we there are to thinking of about different hyperglycemic One, want worried we were it Is need areas. we a maybe is hypo? area from

does think software it makes existing product about which, form many we're how and in we to fit cases, So either thinking product sense, the again, feature does. and/or

with thinking we So after are that payers market. how about working go we and

basal are that's In going the moving as to price to acute on level cases, someone earlier use maybe front That's who's working it still X maybe side an reverse that's we acuity intensive on maybe I of on. be to the that's changes it's of going similar different. curb a think because on terms working the diagnostic help we're point or want use someone disease the through. something the may opposed very more kind be and to end progression to the help user, There to may of where more

cases. bunch think I going of there's to be different use a

using So it price because it's stage it's hard and model Kevin, in. going any to think state out on disease they're what based of different I that who the other to exactly thoughts? is be

determine AID will to it as it getting expect severe somebody be system. paying think Jereme, as that different us well. I is you've and very for equation isn't up No, And hit they a be the for. integrated It it's an with different is use market, proper a to the case. value what is somebody And to problem

hand, the save as money other time. system results the if the much, not On can over more,

address looking how in best very and future. excited looking our at to that it at But balance that So to technology the position we're market. in we're

back to our remarks. call turn Kevin closing I ladies for today. concludes now gentlemen, Mr. that the question-and-answer for and And session Sayer will

record that a year, year great based to quarter on for line the it's expense new general, DexCom. of be day. on in great line, Listen, listening. today. everybody This for what to continued our great we know, given quarter happier leverage first be want and here, patients, -- the a a it's the on beat a thank great couldn't fact Have operating I for going Thanks the for listening the top was on we us,

and gentlemen, your we participation. this concludes today's thank conference, you ladies for and And

You may disconnect. now