DexCom, Inc.

Welcome to the Dexcom Third Quarter 2019 Earnings Release Conference Call. My name is Erin, and I'll be your operator for today's call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. During the question-and-answer session, if you have a question, please press star then 1 on your touch-tone phone. Please note that this conference is being recorded. I will now turn the call over to Sean Christensen. Sean, you may begin.

Thank you, Operator, and welcome to Dexcom's third quarter 2019 earnings call. Our agenda begins with Kevin Sayre, Dexcom's Chairman, President, and CEO, who will provide a summary of the quarter, followed by a financial review and outlook from Quentin Blackford, our COO and CFO, and then a strategic update from Steve Pacelli, our Executive Vice President of Strategy and Corporate Development. Following our prepared remarks, we will open the call up for your questions. At that time, we ask analysts to limit themselves to one question so we can provide an opportunity for everyone participating today. Please note that there are also slides available related to our third quarter performance on the Dexcom Investor Relations website on the events and presentations page. With that, let's review our safe harbor statement. Some of the statements we will make in today's call may constitute forward-looking statements. These statements reflect management's intentions, beliefs, and expectations about future events, strategies, competition, products, operating plans, and performance. All forward-looking statements included in this presentation are made as of the date hereof, based on information currently available to Dexcom, are subject to various risks and uncertainties, and actual results could differ materially from those anticipated in the forward-looking statements. The factors that could cause actual results to differ materially from those expressed or implied by any of these forward-looking statements are detailed in Dexcom's annual report on Form 10-K, quarterly reports on Form 10-Q, and other filings with the Securities and Exchange Commission. Except as required by law, we assume no obligation to update any such forward-looking statements after the date of this presentation or to conform these forward-looking statements to actual results. Additionally, during the call, we will discuss certain financial measures that have not been prepared in accordance with GAAP with respect to our non-GAAP and cash-based results, unless otherwise noted, all references to financial metrics are presented on a non-GAAP basis. The presentation of this additional information should not be considered in isolation or as a substitute for results or superior to results prepared in accordance with GAAP. Please refer to the tables in our earnings release and the slides accompanying our third quarter earnings presentation for reconciliation of these measures to their most directly comparable GAAP financial measure. Now I will turn it over to Kevin.

Thank you, Sean, and thank you, everyone, for joining us today. The third quarter was another great period of growth for Dexcom. There are many things that we could highlight today, but let me give you three key statistics that point to the strength of our business. The third quarter represents our highest U.S. growth rate since the first quarter of 2016, when the business was much smaller. The third quarter included the highest absolute dollar growth in the history of our company, increasing nearly $130 million over the third quarter of 2018. We not only achieved profitability in the third quarter, but for the first time ever, through nine months, we are profitable on both the GAAP and non-GAAP basis. The explanation for this performance remains relatively simple. More and more people are becoming aware of the value of Dexcom's real-time CGM. And with G6, we have the right product to meet their needs. We often highlight access and awareness as the primary answers for the growth that we are experiencing. But this is the result of years of work from the Dexcom team. It is the result of many people embracing our core value to think big. We think big in the way we design our products, the way we serve our patients, our approach to device integration and empowering user choice, and the way we structure our business to meet the expectations of our patients, our employees, and our shareholders. Thinking big includes thinking about long-term profitability, As I stated earlier, through the first nine months of the year, we find ourselves profitable on both a gap and non-gap basis and on our way to our first gap profitable year. But even as we embrace this visionary mindset, it has not come without challenges. This explosive growth continues to leave supply levels much tighter than we expected as we've ramped capacity. And because of these supply constraints, our customer-facing infrastructure is has been stretched to its limits. As Quinton will explain later, our guidance considers these challenges. I can assure you that as we think about Dexcom's opportunities in diabetes and beyond, we are continuing to think big. In addition, as many of you have recently seen, we've had some key developments over the past few months. In September, we began selling G6 in Canada and have seen a great response to this launch. In early October, we officially began shipping G6 to our Medicare patients. Toward this end, we are partnering with Walgreens to ensure that all Medicare patients can fill their prescriptions for Dexcom CGM through any of Walgreens' nationwide retail locations. This provides a wonderful opportunity to improve upon the Dexcom experience for our Medicare patients and is an important step in our long-term move to the pharmacy as our primary distribution channel. As you can see, we are innovating beyond great product design and focusing on the customer experience that we create around the product. Whether this involves Dexcom directly or work with our valued partners, we are thinking with the interests of our patients in mind. We continue to make excellent progress with our insulin delivery partners. As Tandem Diabetes said on their call, They are on the verge of launching their advanced hybrid closed-loop with Control IQ system. On top of that, Insulet is making great progress with their Horizon closed-loop pump with Dexcom G6 integration. The combination of Insulet and Dexcom will provide a unique and compelling user experience and form factor. Our strategy for the intensive insulin delivery business is playing out according to our plan and, in fact, vastly exceeding our initial expectations. As we look to the future, we continue to gather data on markets to pursue outside of our core intensive insulin business. We are investing in our new markets team to execute on this strategy and expect to increase investment there in the future. Time and time again, we are learning that our product has an incredible impact in these markets. Doctors all over the world are clamoring for real-time CGM use in the hospital to improve patient outcomes and streamline workflows for healthcare professionals in this environment. We continue to believe that the opportunity for expanded use of Dexcom in pregnancy is significant and are aware of several independent studies in progress around the world that will demonstrate the importance of CGM in this patient population. And finally, with respect to type 2 non-intensive diabetes and prediabetes, data from CGM usage continues to point to promising outcomes. including potential long-term cost reductions for this costly patient group. The experience here reminds us of where we were many years ago when we started our CGM First campaign for the intensive insulin market. While there may be many use cases for these patients, we believe that CGM will be the primary tool to drive improved outcomes in the type 2 non-intensive and prediabetes populations, and we all know the size of these markets. Overall, 2019 continues to exceed our expectations. Based on the strong third quarter results, we are pleased again to be able to increase our revenue outlook as well as our full year operating margin and adjusted EBITDA targets. I will now turn the call over to Quentin, who will provide detail on this outlook as well as a review of our financials.