The paragraph introduces the DexCom Third Quarter 2024 Earnings Release Conference Call. The call is led by operator Abby, with all participants initially in a listen-only mode until a later question-and-answer session. Sean Christensen, Vice President of Finance and Investor Relations, takes over to outline the agenda, featuring presentations by Kevin Sayer, the Chairman, President, and CEO, and Jereme Sylvain, the Chief Financial Officer. Analysts are asked to limit themselves to one question during the Q&A session. Slides relating to DexCom's third-quarter performance are available on their website. The paragraph concludes with a caution about forward-looking statements, noting that these reflect current intentions but carry risks and uncertainties that could lead to different actual results.

The paragraph discusses DexCom's caution on forward-looking statements and use of non-GAAP financial measures during their call. It highlights the importance of reviewing their financial reports for accurate information. Kevin Sayer then announces the upcoming retirement of Teri Lawver, DexCom's Chief Commercial Officer, who will stay on as a Special Advisor during the transition. Kevin expresses gratitude for Teri's leadership and mentions assuming leadership of the commercial team while searching for a new officer.

The paragraph highlights three primary takeaways: the strong growth potential of the CGM market, the positive progress in executing commercial strategies and product development, and confidence in returning to higher growth and margin expansion. The company reported 3% organic revenue growth for the third quarter, meeting the high end of their guidance, and is rebuilding momentum for long-term growth by expanding the US sales force and improving commercial execution. Productivity metrics have improved, and new customer starts have hit record levels as they gain traction with physicians. The focus is on addressing core issues to solidify growth heading into 2025.

The paragraph highlights the company's recent achievements and strategic initiatives. Since expanding their sales force in April, they have increased their prescriber base by nearly 35,000 clinicians, setting them up for future momentum. Their refocused partnerships with DME distributors are aligning well strategically, enhancing customer experience and positioning them for growth. Internationally, the company has seen accelerated revenue growth, fueled by stronger patient performance and the launch of new products like the G7 and DexCom ONE+ in multiple markets, including Australia and France, ahead of upcoming national reimbursements.

The paragraph discusses DexCom's growth and new product developments. The company has expanded access to its Continuous Glucose Monitoring (CGM) systems for over 600,000 people in a key market and witnessed growth in Japan with increased customer engagement. Although Japan currently contributes a small portion of international revenue, it has shown promising potential with significant new customer starts since 2019. Additionally, DexCom launched a new product, Stelo, in the US, marking an important advancement in diabetes care. Stelo enables any adult in the US to track glucose levels, fostering better lifestyle management and informed clinical decisions. Positive feedback is being received from early adopters regarding the user experience, including ordering, delivery, and subscription services. DexCom is committed to enhancing the Stelo experience, especially for people with pre-diabetes or Type 2 diabetes not on insulin.

The paragraph discusses the successful initial launch of the Stelo product, which has garnered significant interest from customers early in their metabolic health journey. Around half of the customers have subscribed to Stelo, and the company is expanding its distribution by partnering with core DME partners and initiating B2B sales to clinicians. The focus is on enhancing customer experience and personalizing Stelo, while also working on the FDA submission for the DexCom G7 15-day CGM system. Overall, the team's efforts to adapt to market dynamics and improve offerings are emphasized.

The paragraph discusses the company's recent financial performance and strategic approach. For the third quarter of 2024, the company reported a slight increase in worldwide revenue but a decline in US revenue compared to 2023, primarily due to slower new customer starts and a reduction in revenue per customer. The impact of increased rebate eligibility negatively affected growth by about 6 points, although this is expected to moderate in the future. The company experienced some share loss in the DME channel but saw stabilization towards the end of the quarter. They emphasize long-term growth and are actively working with distributors in the DME channel to drive future success.

In the third quarter, international revenue grew by 12% to $292 million, with a 16% organic growth. The expansion of products like G7 and DexCom ONE+ has boosted market presence, especially in Type 2 diabetes categories. Despite a non-cash charge of $24.6 million on inventory adjustments, gross profit reached $625.9 million or 63% of revenue. Operating expenses increased to $413.9 million, resulting in an operating income of $212 million, or 21.3% of revenue. Adjusted EBITDA was $300.1 million, or 30.2% of revenue. Net income stood at $179.9 million, or $0.45 per share. Progress in transitioning to the G7 form factor and potential FDA approval for a 15-day G7 sensor offer future cost advantages.

The company ends the quarter in a strong financial position with $2.5 billion in cash and cash equivalents, allowing flexibility through a $750 million share repurchase program. They maintain their 2024 revenue guidance at $4.00 to $4.05 billion, reflecting 11% to 13% organic growth. The guidance includes expected improvements in US sales force productivity and handling of channel and rebate dynamics. The company remains optimistic about 2025 prospects, including record new patient starts and the Stelo rollout. They reaffirm their 2024 margin guidance: non-GAAP gross profit margin at 63%, non-GAAP operating margin at 20%, and adjusted EBITDA margin at 29%. They believe they're on track to meet their 2025 revenue and margin targets of $4.6 billion. The call moves to a Q&A session, starting with a question from Danielle Antalffy of UBS.

In the paragraph, Kevin Sayer discusses the company's performance in the recent quarter, noting that they slightly missed consensus but still met the high end of their guidance range. He highlights positive developments, including improvement in the sales organization and record levels of new patient additions toward the end of the quarter. Additionally, he mentions the onboarding of 35,000 new prescribers, which is expected to aid future growth. On the Durable Medical Equipment (DME) side, while they lost some market share initially, the situation stabilized by September.

The paragraph discusses the positive prospects for a sales team related to the Stelo message targeting primary care physicians dealing with Type 2 diabetes patients on insulin. This strategy is expected to enhance patient care and offer potential access to the G-Series for severe cases. The company anticipates higher sequential growth in the fourth quarter of the US market without relying on Stelo's contribution, indicating strong future growth into 2025. During a Q&A session, Kevin Sayer responds to Larry Biegelsen's query about a slowdown in the US CGM market in Q3, attributing it to specific factors affecting their performance, but expressing confidence in faster market growth moving forward.

The paragraph discusses the company's progress and future expectations. Jereme Sylvain addresses questions from Matt Taylor about the company's current performance versus previous forecasts. He explains that while they initially faced a delay in sales force productivity and new patient acquisition, they are now seeing improvement, with record new patient numbers in the third quarter. Sylvain confirms that although they're slightly behind their initial yearly projections, they are aligned with their last guidance and are making progress. He reassures that they are on track to meet their long-term targets, including achieving $4.6 billion and maintaining margin goals, supported by record patient numbers and stability in their distribution channel.

The paragraph discusses the company's international growth and future opportunities, particularly focusing on Stelo, a new initiative showing promising progress. Jeff Johnson from Baird asks about the record new patient starts in the US, inquiring whether these numbers include Stelo, and seeks clarification on the discrepancy between the installed base growth and revenue growth. Kevin Sayer responds, indicating that the record new patient figures do not include Stelo and are solely based on the G-Series/T-Series insulin product, confirming a record quarter for these products.

The paragraph discusses the company's performance and strategies related to patient growth and unit volume. The company experienced mid-20% growth in patient base last quarter, but there has been a slight decline in the current quarter attributed to changes in patient start sources. Specifically, there's been a shift from Durable Medical Equipment (DME) channels to pharmacies, affecting market share and causing variations in channel performance. The company expects this shift to stabilize over time, which will bring the channels closer in performance. Despite some setbacks, unit volumes remain strong, and the company is optimistic about long-term growth. The main focus is on adjusting to this channel shift and managing rebates. The paragraph ends with Robbie Marcus from JPMorgan inquiring about steps taken to stabilize the company's position in the DME channel.

Kevin Sayer addresses questions about their company's relationship with DME partners, noting that disruptions were caused by changes in sales territories, which affected rep relationships. He mentions that they have learned to adopt a more channel-agnostic approach, encouraging the use of the DME channel when beneficial, to balance their partnerships. The focus of discussions with DME partners is on increasing patient volume and prescriptions through this channel, rather than on price, with the aim of mutually benefiting from increased referrals.

In the paragraph, the speaker outlines the company's efforts to stabilize and grow in the Type 2 diabetes market by increasing their presence and referrals in the primary-care community. They've partnered with DME providers to offer Stelo, expanding their reach beyond traditional diabetes therapies. Joanne Wuensch from Citibank then asks about the timeline for FDA approval of their 15-day G7 system and its financial impact. Kevin Sayer, responding, acknowledges they've submitted a strong application but avoids speculating on approval timing, referencing a past swift approval for a related product, Stelo, to express hope for quick approval.

The paragraph discusses the anticipated impact of launching a new product in 2025 and its potential financial benefits. Jereme Sylvain mentions that upcoming monthly fee contracts present a significant opportunity, aligning with their long-range financial plans. The team is excited about leveraging these opportunities within the business and promises more clarity as they roll out commercial plans. There is focus on gross margin and extending product wear periods, which are appealing to customers. A subsequent question asks about opening the product, Stelo, to direct medical equipment sellers and doctors, considering pricing and distribution strategies compared to direct sales. Kevin Sayer acknowledges the question and appreciates previous feedback on Stelo.

The paragraph discusses the company's approach to working with partners for distribution, including DME providers and other channels, which have been part of their long-term strategy. When utilizing partners, certain operational expenses and shipping costs are transferred to these partners, allowing for pricing adjustments that ensure partner margins while maintaining low costs for the company. This model is likened to the efficient distribution through the pharmacy channel. The company emphasizes that stelo.com will remain a key component of their strategy, alongside exploring new distribution opportunities, all contributing positively to the operating margin. The paragraph concludes with the operator introducing a question from Mathew Blackman.

In the paragraph, Kevin Sayer discusses DexCom's strategy to maintain its competitive edge in the Type 1 diabetes pump-integrated segment despite increasing competition expected next year. He highlights that all automated insulin delivery (AID) studies have used DexCom sensors, resulting in positive outcomes. Sayer emphasizes the strong market share DexCom holds, attributing it to their product's high quality and proven accuracy. He also mentions their partnerships with companies like Omnipod and Tandem, noting that the transition of users to DexCom's G7 sensor underscores customer trust and satisfaction.

In the paragraph, Jereme Sylvain discusses the company's outlook for 2025, expecting a stable market with consistent adoption and penetration trends continuing from 2024. The discussion includes maintaining rather than regaining market share in the durable medical equipment (DME) sector and continued success in the retail channel. The projections include the impact of the newly launched Stelo product, which is anticipated to be a significant factor, especially during the upcoming holiday season. Despite only being a few months into Stelo's launch, the company is optimistic about various channels and potential market opportunities, contributing to a positive outlook and a target of $4.6 billion in revenue.

The paragraph covers a financial discussion during a Q&A session of a conference call. Jereme Sylvain addresses a question from Marie Thibault about the rebate issue, confirming that a 100% rebate is assumed, thus minimizing any headwind. Marie asks specifically about the impact of the rebate issue on Q4 growth guidance, noting it was 6 points in Q3. Jereme confirms it will be less than 6 points in Q4, although no exact figure is provided. He mentions that average selling prices (ASPs) should remain consistent from Q3 to Q4. Another analyst, Matthew O'Brien, asks about the 2025 outlook, stating it involves approximately $500 million in growth year-over-year, which the company has achieved before, barring any mix headwinds.

The paragraph discusses the company's growth strategy despite challenges such as varying product utilization and competition. Jereme Sylvain acknowledges that while the new product, Stelo, may have lower retention and utilization rates compared to their core insulin business, it represents a new category with different comparisons year-over-year. He highlights record new patient numbers and anticipates continued growth with a more productive sales force and increased access. The upcoming launch of Stelo in the US is also expected to contribute to growth. Overall, Sylvain is optimistic about the company's growth prospects and confident in reiterating their long-range plan.

In the paragraph, Kevin Sayer discusses the launch of a 15-day product planned for 2025, expected to boost revenue. Bill Plovanic from Canaccord Genuity asks about the Stelo product and its potential as a gateway for patients from pre-diabetes or Type 2 diabetes non-insulin to the G7 product. Sayer responds that while there hasn't been a significant trend of such diagnoses, their sales reps have had better interactions with primary care offices. These offices often have patients with diabetes who could benefit from the G7 product, which is covered by insurance. The Stelo app is aimed at pre-diabetes and Type 2 diabetes non-insulin users, providing a pathway to a reimbursed solution. Sayer also mentions that projected revenue for the year from this segment is 1%, estimated to be $40 million.

The paragraph discusses the successful launch and progress of Stelo, emphasizing the company's focus on learning and improving its offerings. Amazon fulfillment was highlighted as a significant achievement, with positive feedback for the app and website, though there's room for improvement in customer service. The company has a user base of over 70,000 since launch and is satisfied with its progress. Additionally, during the Q&A, it was confirmed that the new user additions set a record for any quarter, without breaking down geographical details, and there hasn't been a notable change in attrition rates.

The paragraph involves a discussion about the shift in distribution channels for insulin pumps from durable medical equipment (DME) to the pharmacy channel, particularly focusing on Omnipod 5 and its market impact. Kevin Sayer and Jereme Sylvain address concerns regarding this shift, explaining that their company has seen a significant transition of volumes to the pharmacy channel, especially on the commercial side, resulting in a reduced role for the DME commercial channel, which now primarily serves Medicare and government channels. They express confidence in their company's ability to adapt if other players enter the pharmacy channel. Additionally, Jereme Sylvain clarifies that Medicare fee-for-service is reimbursed via DME.

The paragraph discusses the company's strategy for upcoming product launches and expansion plans. Kevin Sayer addresses the 15-day sensor product, stating that it will be manufactured using existing lines similar to the 10-day product. He mentions that there is already a 15-day product in the Stelo range, indicating no capacity concerns for production. For the Stelo product, the company plans enhancements to the app throughout 2024 and 2025 to improve user experience. They also intend to expand distribution channels and leverage their US sales force, which is still early in its efforts to promote Stelo.

The paragraph discusses upcoming changes and developments within a company. The speaker acknowledges the departure of Teri, a key leader, but expresses confidence in the organization's strong leadership team and plans to appoint a new Chief Commercial Officer quickly. The focus is on maintaining leadership stability and assuring stakeholders that the team will continue to perform well. Subsequently, there's a shift to a conversation with Chris Pasquale about a new 15-day sensor product. Jereme Sylvain addresses questions about the product's costs and durability, stating that the costs will not increase and they expect the durability to be well-received by the community, even with the extended wear time.

The paragraph discusses the potential impact of competitor shortages in the US on the company's growth in the third quarter. The response from Jereme Sylvain indicates that while there were disruptions mentioned, the company did not expect or witness significant changes in their trajectory due to these shortages. Instead, he attributes their success to the proactive efforts of their sales force, which effectively engaged new physicians and promoted their products, such as the G7 and Stelo. The company's standard costs and approach to changes, like adhesives, are also mentioned, with an emphasis on maintaining stable costs despite minor adjustments for warranties. Mike Kratky's question also touches on revenue guidance and its assumptions concerning these dynamics in the fourth quarter.

The paragraph is a transcript from a conference call where Steve Lichtman from Oppenheimer asks Kevin Sayer about the drivers for international growth in 2025. Kevin Sayer highlights DexCom's recent global expansions, including the launch of DexCom ONE in France and increased access in Japan, totaling a potential reach of 1.6 million more individuals. He emphasizes that improved access, particularly for patients using basal insulin and gradually for Type 2 patients, will be a significant growth driver in international markets. The paragraph concludes with Patrick Wood from Morgan Stanley asking about new patient starts and market growth distinctions between Type 1 and Type 2 diabetes.

The paragraph discusses the adoption and success of the Stelo product, particularly within the insulin-using population, with robust uptake across both intensive and basal insulin categories. Although Stelo use by 70,000 individuals is noted, these numbers are not included in the record new patient figures. The company has been focusing on improving their productivity in the third quarter, especially in basal patient care. Additionally, Stelo shows promising uptake in the non-insulin and health and wellness sectors. Kevin Sayer, responding to a question from Issie Kirby about Stelo's early performance, mentions that at least 50% of users are on a subscription model and reordering rates are positive. The company is pleased with the product's retention, reliability, and new customer interface through Stelo's online sales approach, though it's still early in the launch phase.

The paragraph discusses the ongoing process of improving a service model for a glucose sensor product, Stelo. The company is learning from consumer feedback that expectations differ between those using the sensor for intensive insulin therapy and general consumers. Consumers expect longer usage life from the sensor, unlike those on intensive insulin therapy who understand the physiological limitations. The goal is to create a delightful customer experience, whether the product is used occasionally or continuously. The company is still in the early stages of launch but is seeing favorable reorders and subscription renewals.

The paragraph discusses the sales split expectations between the US and international markets for the Long Range Plan (LRP), emphasizing a general 70%-30% distribution without being overly precise. It highlights the growth of the international business and the new Stelo product's contribution to the sales forecast. Regarding the Stelo sensor, it mentions that most sensors are lasting the expected 15 days in the field, and performance has been consistent with what was seen in studies, despite initial user learning curves. The company is optimistic about the sensor's durability and market performance.

The paragraph discusses a conference call where a company expressed confidence in the survival rate data related to their G7 product, similar to their Stelo product. They indicated that more data would be shared upon submission and potential approval. The call ended with Kevin Sayer thanking participants and stating that guidance for 2025 would be provided at the beginning of the year. The conference was then concluded.

This summary was generated with AI and may contain some inaccuracies.