In the paragraph, the conference operator Abby introduces DexCom, Inc.'s fourth quarter and fiscal year 2024 earnings call, mentioning that lines are muted to prevent background noise. Sean Christensen, VP of Finance and Investor Relations, then outlines the agenda for the call, which includes remarks from Kevin Sayer, the Chairman, President, and CEO, and a financial review from CFO Jereme Sylvain. A Q&A session will follow, with analysts limited to one question each. Sean also notes the availability of related slides on the DexCom, Inc. Investor Relations website and mentions a Safe Harbor statement regarding forward-looking statements.

The paragraph discusses DexCom, Inc.'s forward-looking statements, noting that actual results may differ from projections due to various risks and uncertainties. These statements are based on current information and are outlined in the company's SEC filings. The paragraph also mentions that the company assumes no obligation to update these statements unless legally required. Additionally, non-GAAP financial measures will be discussed, and reconciliations to GAAP measures are available. Kevin Sayer then reports an 8% organic revenue growth in the fourth quarter compared to the previous year, with a 12% growth for the full year, aligning with 2024 guidance. The company made strategic investments in 2024 to strengthen its position for growth in 2025.

Over the past year, DexCom, Inc. expanded its commercial reach and grew its global customer base by 25% to over 2.8 million, primarily driven by increased demand for its CGM products and improved field execution. The US market saw significant growth, with the prescriber base expanding by over 50,000. The company strengthened its presence in primary care and new CGM care areas like maternal fetal medicine, leading to record new customer starts. DexCom aims to sustain this momentum in 2025 by fostering new prescriber relationships and helping navigate coverage changes.

In the past two years, reimbursement procedures for continuous glucose monitoring (CGM) have expanded significantly beyond insulin management, driven by evidence of improved health outcomes and economic benefits. The widespread reimbursement for CGM, regardless of insulin use, is growing due to its ability to provide real-time feedback on lifestyle choices. By January 2025, two major pharmacy benefit managers (PBMs) will cover CGM for all diabetes patients, allowing DexCom, Inc. to provide coverage for over five million non-insulin type 2 diabetes patients in the US, with further efforts planned to cover the remaining 20 million by the end of the year. The company is also running a randomized control trial targeting type 2 diabetes patients not on insulin to further support their case.

DexCom, Inc. has expanded access to its technology in the US with the launch of its over-the-counter product, Stella, aimed at empowering individuals to manage their health. Since its introduction, Stella has been widely adopted, with over 140,000 users in the first four months, spanning type 2 diabetes, prediabetes, and general health and wellness groups. DexCom is enhancing Stella with personalized features powered by its proprietary generative AI technology and through partnerships, such as with Oura, to integrate comprehensive health data. The company anticipates further growth by increasing brand awareness, expanding distribution channels, and launching Stella on Amazon soon. DexCom is positive about the demand for Stella and plans to capitalize on its momentum in 2025. The company also concluded the year successfully in its international markets.

The paragraph discusses DexCom, Inc.'s recent success in international market expansion, particularly highlighting the finalization of basal coverage for their One Plus system in France, which has been well-received. France is noted as a leader in type 2 continuous glucose monitoring (CGM) coverage. The company anticipates growth opportunities as interest and reimbursements in their markets increase. Financially, DexCom reported an 8% year-over-year increase in worldwide revenue for the fourth quarter of 2024, reaching $1.11 billion, with U.S. revenue up by 4% to $803 million. The financial discussion will focus on non-GAAP measures, with further details available in the earnings release and accompanying materials.

In the past two quarters, new customer demand has grown as sales force productivity improved, although US growth in Q4 was negatively affected by rebate eligibility. The DME channel's market share remained stable, and while the channel mix impacted revenue per customer, this is expected to moderate in 2025. International revenue grew by 17%, driven by new market accesses and product availability, notably in France and New Zealand. Gross profit for Q4 was $661.2 million, or 59.4% of revenue, down from 64.2% a year prior, mainly due to a $21 million non-cash charge related to mishandled inventory and lower production yield from new configurations. The company sees potential for increased global access in existing markets.

The company faced disruptions and is managing inventory tightly, with facilities running at full capacity to restore supply levels by the end of Q1. Operating expenses increased to $451.7 million in Q4 2024 up from $421.1 million in Q4 2023, while operating income decreased to $209.5 million. Adjusted EBITDA also declined to $300.1 million. Net income for Q4 2024 was $177.8 million. The company ended the quarter with $2.6 billion in cash, providing flexibility for growth and strategic investments. For 2025, the company anticipates 14% revenue growth to $4.6 billion, with improvements in gross and operating profit margins and an adjusted EBITDA of 30%. The guidance assumes better margins, strong category growth, and various product and distribution advancements.

The paragraph is from a Q&A session during an investor call. It discusses the company's progress in transitioning their installed base to the G7 system and launching a fifteen-day G7 system to improve gross margins beyond 2025. The session is opened up for questions, with guidelines explained for asking and withdrawing questions. Larry Biegelsen from Wells Fargo asks about issues mentioned during the Q2 call concerning Salesforce and DME channels, and Kevin Sayer responds by stating that the company has made significant progress, particularly in stabilizing their share in the DME channel.

The paragraph discusses the productivity of the US Salesforce and the efforts to improve the performance of prescribers. The sales team has successfully increased productivity per prescriber despite expanding their outreach to more healthcare professionals. This has led to record numbers of new prescriptions over the past two quarters. Jeff Johnson from Baird asks about the narrowing gap between volume and revenue growth in the US, which had been quite wide in previous quarters. He inquires about the potential for this gap to reduce to low double digits in the first quarter and eventually return to mid-single digits over the year. Jereme Sylvain acknowledges the question and is prepared to address it.

In the paragraph, the speaker is addressing a question about business dynamics and convergence over the year. They mention that as the year progresses and as they move past certain challenges, such as rebate dynamics in the first quarter, there will be a convergence in financial metrics. This will be more evident in the second quarter and continue through the third and fourth quarters. They expect the numbers to align more closely with expectations by the end of the year and into 2025. Although they don't provide a specific number, they note that their patient base is growing and implies improvements in their performance metrics. The operator then introduces the next question from Robbie Marcus of JPMorgan. Robbie asks for further clarification on the financial cadence throughout the year, given factors like sensor lapping and pricing headwinds.

In the paragraph, Jereme Sylvain discusses expectations for the company's financial performance throughout the year, starting with the first quarter. He notes that the first quarter tends to experience a sequential decline from the fourth quarter, historically around 9%, but currently expected to be slightly better at 8% to 9%. Overall, the year should follow a typical seasonal pattern with consistent improvement and easier comparisons in the latter half. He also mentions gross margins, stating that there is usually a decline from Q4 to Q1 due to typical seasonal factors, though Q4 experienced some additional burdens from one-time charges.

The paragraph discusses expectations for financial performance and operational improvements over the year. It anticipates a slight step back from Q4 to Q1 but suggests that, when adjusted for one-time items, Q1 will be slightly better than Q4. Despite this, improvements in yields and volume, particularly in the Malaysia facility, are set to enhance margins as the year progresses. The benefits of scale are expected to drive margins, with some additional gains in the year's latter half. A new development is noted: two of the three largest Pharmacy Benefit Managers are now covering treatments for non-insulin using type two diabetes patients. The speaker, Jereme, is asked about the anticipated impact on revenue and volume growth over the coming years due to these changes.

The paragraph discusses the pricing and profitability models for medical sensors used by patients with different types of diabetes. Jereme Sylvain explains that the unit economics are similar across different disease states, meaning the purchase price for sensors is the same for both type one and type two non-insulin using patients. However, type two users generally use the product less frequently, which affects revenue per patient on an annual basis. Although this requires adjustments in revenue modeling, it does not impact profitability or gross margins. Kevin Sayer adds that retention and utilization rates for type two patients with coverage remain high due to positive outcomes, ensuring strong performance even in a reimbursed setting.

In the paragraph, Travis Steed from Bank of America asks about the FDA approval process for the G7 fifteen day product and its anticipated launch in the second half of the year. Jake Leach responds, indicating that the review is near completion and they expect approval soon. He mentions that the launch will focus on ensuring coverage and user experience, particularly regarding pump integrations. Additionally, they plan to present clinical data at the ATTD conference in Europe, with one of their lead investigators scheduled to present findings.

In this paragraph, Joanne Wuensch asks about integrating a 15-day sensor with a pump and any updates on the G8. Jake Leach explains that integrating the 15-day sensor into the pump is simpler compared to previous upgrades, such as moving from G6 to G7. The integration requires minimal adjustments, mainly validation from partners, and should be done quickly. Regarding G8, it's in active development as a new hardware platform, featuring a smaller, more capable wearable device with multi-analyte capability. Lessons from G7 are being applied for better compatibility with pumps closer to launch. Kevin Sayer adds that G8 represents a series of innovations following insights gained from the transition between G6 and G7.

The paragraph discusses the company's strategy for expanding coverage and uptake of their product, particularly for non-intensive type 2 populations. Matt Taylor from Jefferies inquires about the impact of increased coverage by PBMs and the expectation for it to reflect in their guidance. Jereme Sylvain responds, emphasizing that the expanded coverage is included in their guidance and highlights the importance of education and outreach to ensure awareness of coverage. They are working with two PBMs to enhance access, indicating a long-term optimistic outlook about the benefits of CGM for these populations, while acknowledging that uptake will fluctuate.

The paragraph discusses the company's efforts to expand coverage for their CGM product. They are collaborating with a third pharmacy benefit manager (PBM) and exploring ways to work with the Centers for Medicare and Medicaid Services (CMS) to ensure access to their product. They emphasize the importance of a randomized controlled trial (RCT), which is currently in the enrollment phase and expected to be completed in the first half of the year, with early results anticipated by year's end. The data from the RCT will be used to support the expansion of coverage. The focus on advancing these goals is highlighted as a priority for their market access team. Following this discussion, Matthew O'Brien from Piper Sandler asks about the expectation for a record number of new patients in 2025 and inquiries about the composition of the expected growth, noting the challenge of market saturation on the intensive side and the need to focus on basal and non-intensively managed type two patients.

Jereme Sylvain discusses expectations for a record patient year, highlighting significant market penetration in the insulin-intensive segment, including both Type 1 and Type 2 diabetes. He anticipates consistent growth in the Basal population through 2025 and increased contributions from the Type 2 non-insulin segment due to improved coverage. The focus is on expanding the G series and D series without factoring in the additional potential from the Stella over-the-counter product, which presents further opportunities in prediabetes and health and wellness markets.

The paragraph discusses future growth and market strategies for a company's product, with a focus on expanding international coverage and increasing access for type two non-intensive diabetes patients. The speaker mentions success in obtaining coverage in various countries, including the US, France, Germany, Canada, Australia, and Japan. They emphasize potential growth in the insulin population and highlight efforts to improve field force productivity. During a Q&A, Jason Bedford asks about the sales expectations for a product called STELLO, confirming it remains at 2% to 3% of sales. Jereme Sylvain responds, noting ongoing type two coverage, expected growth, and confirms the STELLO sales expectation. The timing of factors like Amazon's involvement and integration with Oura is questioned, but details are not provided in this segment.

The paragraph discusses ongoing developments related to the STELLO platform. Jake Leach mentions that they have recently launched a new feature allowing users to view their historical data, a highly requested addition. They are also working on a deeper integration with the Oura platform, focusing on importing and visualizing more detailed data. This integration is expected to release in the first half of the year, with further updates planned throughout the year. Jereme Sylvain notes that the product is currently being sold through the DME channel and partners, and they anticipate launching on Amazon in the first quarter. Shagun Singh from RBC Capital Markets is the next to ask a question during the discussion.

In the paragraph, Kevin and Jereme discuss the assumptions behind a projected 14% growth rate for 2025. They mention a conservative approach, not factoring in DME share gains, despite having a fully productive sales force, new product launches, and anticipated record new patient starts. Jereme provides data points, noting that 1-2% growth is expected from STELLO, with core business growth in the low teens. Both the international and U.S. markets are anticipated to perform well. The guidance provided is intended to be reasonable and achievable, considering past adjustments, and there are some favorable factors included in these assumptions.

The article discusses recent achievements and future opportunities for a sales force in the US and abroad, highlighting the potential for growth with new coverage for type two products. The company plans for a stable Durable Medical Equipment (DME) share as they collaborate with DME partners. Kevin Sayer adds that while the upcoming launch of a new fifteen-day product presents potential benefits, there are logistical steps—such as gaining coverage and integration with partners—that might cause delays. The company aims for a reasonable growth outlook based on previous experiences and anticipates potential upsides if things progress smoothly.

The paragraph is a transcript from an investor call where Chris Pasquale from Nifron Research asks about the performance and user engagement of STELLO, particularly following its launch and the New Year's resolution period. Kevin Sayer mentions a positive increase in subscriptions at the beginning of the year and highlights strong renewal rates, especially among users with type two diabetes. He adds that the design and app functionality are meeting their targets, and they plan to introduce new features throughout the year. Jake Leach discusses the introduction of generative AI capabilities in Stella's glucose biosensors, particularly in generating insightful reports for users, noting positive feedback from a staggered rollout.

The paragraph discusses a phased rollout of a product to users, with the aim of gaining insights and improving features based on user feedback and data analysis. The company plans to integrate Oura data and utilize generative AI for more personalized insights. The conversation turns to a discussion between Steve Lichtman and Kevin Sayer about messaging and product features of STELLO and the G series. The focus is on adapting features from the STELLO app, designed for non-insulin type 2 diabetes patients, into the G series to enhance user experience by helping them identify glucose spikes with AI support. The ultimate goal is to improve user retention by making the product more beneficial and ensuring reimbursement.

The paragraph discusses the expansion and enhancement of Stella, a software platform initially targeting diabetes and prediabetes but now aiming to include features for health, wellness, and a broader user base. The company highlights their ability to quickly iterate and add functionalities for non-diabetic users interested in metabolic health. Jake Leach emphasizes the platform's broad indication of use and its pioneering over-the-counter availability for all adults. Issie Kirby asks about improvements in the G sensor's accuracy for glucose monitoring and its potential premium pricing for added capabilities. Jake Leach responds by affirming the company's focus on enhancing sensor accuracy and reliability.

The paragraph discusses advancements and plans for a sensor platform, G7, which is already the most accurate available. There is an ongoing effort to improve its accuracy and reliability and expand its user base. The upcoming G8 version aims to be smaller yet more capable, including better fault detection and accuracy. The company is exploring multi-analyte technology, which is in early development stages, and future applications in chronic diseases like diabetes. A financial update follows, where Michael Polark questions Jereme Sylvain about the revenue guidance, asking why a single point estimate was given instead of a range typical in previous years. Jereme explains the rationale linked to recent unique business circumstances.

The paragraph discusses the management's approach to setting expectations for the year, emphasizing the desire to convey their best insights rather than providing a range of outcomes. This approach aims to align everyone's understanding and move forward cohesively. Bill Plovanic shifts the focus to profitability, questioning the potential for operating margin improvements beyond the current levels noted in 2024 and expectations for 2025. Jereme Sylvain responds by highlighting efforts to integrate cost-saving measures that have gradually reduced operating expenses as a percentage of revenue, and he anticipates this trend to continue in the coming years.

The paragraph outlines the company's strategic focus on balancing investments in research and development (R&D) and sales and marketing to capitalize on growth opportunities. The company is committed to maintaining and expanding its sales force and marketing efforts, with an emphasis on managing general and administrative expenses. They aim to improve gross margins to 65% as part of their financial strategy, leveraging cost management in product design. The company plans to continue reinvesting in the business to drive long-term growth, while also maintaining flexibility to adjust investments as needed for returns.

The paragraph discusses the use of a sensor called Stella, which is designed for a fifteen-day wear period. Kevin Sayer mentions that users are generally satisfied with this duration, and issues like adhesive problems or aesthetic concerns have not been significant. Although some groups, such as children, might change the sensor more frequently, the majority prefer the fifteen-day usage. The company has a supportive service model to address sensor failures or detachment, aiming to maintain user satisfaction while optimizing profitability. Jereme Sylvain agrees with Patrick's observation about user behavior during the transition period.

The paragraph discusses international growth strategies for a company focused on continuous glucose monitoring (CGM) technology. The company aims to expand into large international markets where CGM is approved and seeks to increase access in countries with insufficient coverage for type 1 and type 2 diabetes. Basal insulin is only fully approved in Japan and France, and the company plans to build the case in these markets. The company also launched a digital platform to efficiently enter new geographies, experiencing rapid growth as governments recognize the benefits of CGM sensors, leading to increased pressure on reimbursement authorities.

In the paragraph, Jereme Sylvain discusses the company's growth trends and market share in the diabetes sector. He highlights strong performance in the third and fourth quarters, with record new patient numbers leading to improved market share across various segments. The company has typically had lower share in areas without coverage, but anticipates opportunities for growth in 2025, especially with an expanded sales force and product innovations. They are particularly optimistic about the non-insulin space if coverage improves, expecting continued strong performance in covered markets.

The paragraph discusses a Q&A session where Matt Miksic from Barclays asks about the timeline for the G8 product and the economics of patient segments. Kevin Sayer responds that no timeline has been provided for the G8 yet, as the focus is currently on the fifteen-day G7, with anticipated approval in the latter half of the year. Regarding patient economics, Sayer disputes the perception that the economic value is lower for lower acuity patients, explaining that utilization rates in non-intensive diabetes treatment do vary but aren't as different as expected from those in more intensive treatments like those for type one diabetes.

The paragraph discusses changes in utilization and retention as a system expands into new categories and moves down the acuity curve. Utilization may decrease slightly, but if services are reimbursed, the decrease isn't significant. The focus is on understanding patterns with cash-pay patients, particularly regarding sensor usage and purchasing behavior, an area that is still being explored. Jereme Sylvain explains that although utilization per user may decrease, the economics per transaction remain stable, and margins are unaffected. The discussion concludes with the operator ending the Q&A session, followed by Kevin Sayer expressing satisfaction with the 2024 results and anticipation for 2025.

The paragraph indicates optimism about having a successful year, thanks to various strategies, and expresses gratitude for ongoing support. It concludes with the operator ending the call and thanking participants for joining.

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