DexCom, Inc.

Welcome to the Dexcom Fourth Quarter 2019 Earnings Release Conference Call. My name is Cheryl, and I will 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 touchtone phone. Please note that this conference call is being recorded. I will now turn the call over to Shawn Christensen, so you may begin.

Thank you, Operator, and welcome to Dexcom's fourth quarter and full year 2019 earnings call. Our agenda begins with Kevin Sayre, Dexcom's Chairman, President, and CEO, who will provide a summary of the quarter and full year 2019, 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 fourth 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 out 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 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 fourth quarter and full-year 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. 2019 was another fantastic year for Dexcom. I want to take a few minutes to highlight some of our accomplishments before we turn our attention to 2020. This was the second consecutive year that our organic growth exceeded 40%. To put this into perspective, given that we started the year on a revenue base greater than $1 million, this means that we added more than $440 million of absolute growth in the year. New patients continue to be the primary driver behind the growth and includes growing traction in the insulin-dependent type 2 market, where we continue to expand access in addition to our existing coverage in Medicare. We ended the year approaching 650,000 net active patients globally who are benefiting from Dexcom CGM technology. And as a reminder, we only count someone as a patient when they are consistently reordering product. We are also achieving this growth with operational and spending discipline as an organization. 2019 was the most profitable year in Dexcom's history and represented our first full year of GAAP profitability. We are demonstrating great operating leverage, even as we doubled G6 capacity in 2019 and continue to invest in R&D to drive our future growth. As we grow, we are building and adapting our infrastructure to serve meaningfully more patients. In the U.S., we are making great progress in our effort to transition to the pharmacy channel, as we expanded covered lives by more than 50% in 2019. We are now fully underway in the launch of G6 into Medicare and look forward to those patients having access to the no-fingerstick G6 technology. We have built an extensive global business services team in Manila in 2019, exiting the year with progress on all of our key customer service metrics. Our business services team will be a great asset for us as we continue to scale the company and strive to offer our customers the best possible experience. We are also transparent with you and our customers about the things we must improve. As many of you heard in late November, we experienced a temporary server outage that impacted the ability of family and friends to monitor glucose levels of loved ones via our share and follow apps. I told our customers, healthcare providers, and shareholders that we needed to do better. We needed a system in place to greatly improve communication with our customers. In the weeks since, we have taken significant steps to do just that. We have launched a system status page on our website ahead of schedule. This provides real-time updates on system functionality 24 hours a day, 7 days a week. We are also in the final stages of rolling out an in-app messaging system that will provide quick communication with our customers. As you can see, we are not sitting still, even with the rapid growth that we've experienced since the launch of G6. The reason for this is simple. We believe that there is a huge opportunity still ahead of us for our sensor platform. For our core markets, we remain confident in the underlying shift from finger sticks to CGM as the standard of care. Outside of our core markets, our excitement for the potential of Dexcom CGM to address broader global health issues continues to grow. We are beginning to see great early-stage data demonstrating the value of CGM for all people with type 2 diabetes, including those not on insulin therapy. Our work with United Health Group has progressed very well, and we look forward to the expanded use of Dexcom CGM in their Type 2 populations in 2020. We will look to extend the presence of Dexcom CGM for Type 2 customers through additional partnerships with programs offered by digital health players like OnDuo, Livongo, and WellDoc, all integrating CGM data into their respective coaching platforms. And we continue to work directly with providers. As we recently discussed at an investor conference, our initial pilot work for non-insulin using type 2 customers with Intermountain Healthcare revealed gross cost savings of nearly $5,000 per member per year for those using Dexcom CGM relative to those using finger sticks. We look forward to providing additional details like these related to type 2 and other new markets as we progress in 2020. With all of this G6-driven growth in our core markets and ongoing learnings in our new markets, we enter 2020 with an eye toward the biggest product launch in Dexcom's history, G7. We have a busy year ahead, but the team has done a great job thus far for us to progress toward our goal of a full-scale launch in 2021. To summarize, 2019 was another great year for Dexcom, but we're pressing forward to capitalize and execute in 2020 on these many long-term opportunities. I will now turn the call over to Quentin for a review of our financials.