DexCom, Inc.

Hello, and welcome to the Dexcom Third Quarter 2022 Earnings Release Conference Call. My name is Michelle, and I will be your operator for today's conference. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session, and during the question-and-answer session, if you have a question, please press 01 on your touch-tone phone. As a reminder, today's conference is being recorded. I will now turn the call over to Mr. Shawn Christensen. Sir, you may begin.

Thank you, operator, and welcome to Dexcom's third quarter 2022 earnings call. Our agenda begins with Kevin Sayre, Dexcom's chairman, president, and CEO, who will summarize our recent highlights and ongoing strategic initiatives, followed by a financial review and outlook from Jeremy Sylvain, our chief financial officer. 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 and 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, most recent quarterly report 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 a 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. Today we reported another strong quarter for Dexcom with third quarter organic revenue growth of 20% compared to the third quarter of 2021. Our teams executed incredibly well as we worked to advance our strategic initiatives while preparing for the largest product launch in our company's history. In the U.S., we saw continued momentum after our strong second quarter new customer starts with ongoing loyalty among endocrinologists and growing traction with primary care physicians. We're finding these physicians eager to engage with our teams as they learn more about the clinical benefits and superior outcomes the Dexcom CGM can provide their patients. While we expect these primary care relationships to be critical to our long-term customer aspirations, they also help us better serve the intensive insulin using population in the U.S. today. The domestic core market still has a long runway of growth ahead, as we expect the vast majority of the population to adopt CGM to help them better manage their health. Outside the U.S., our team continued to deliver customer access wins this quarter. One example, in August, the NHS announced the inclusion of Dexcom 1 on prescription via the England, Wales, Scotland, and Northern Ireland drug tariff for everyone with type 1 diabetes and type 2 intensively managed diabetes. This announcement meaningfully expanded access to Dexcom within these markets, as our previous reimbursement was generally limited to a smaller population of higher risk individuals. Importantly, this is a clear example of how we can leverage our portfolio strategy to reach many more people with diabetes across the globe. Whether we use Dexcom 1 to enter new geographies or to improve access within existing markets, there is a large opportunity to expand our reach. In many cases, these are segments of the market that have lacked product choice for customers. So providing Dexcom's leading real-time CGM solution is being welcomed enthusiastically from customers and health systems alike. As many of you have seen, we were also very excited to initiate our full OUS launch of G7 following a successful limited launch. G7 is now available in the United Kingdom, Ireland, Germany, Austria, and Hong Kong. We have been looking forward to this day for a long time, as we view G7 as not only a major step forward for Dexcom, but for the entire diabetes technology market. This is a game-changing launch. As we often say, G7 takes everything about G6 and makes it better. It has a 60% smaller form factor, 30 minute warm up time, 12 hour grace period to allow customers to choose a convenient time to change sensors, an improved app experience, and more. All of this while building upon the product performance and accuracy that has earned the trust of our customers and clinicians. These advancements were specifically designed to improve the lives of our customers And that is being recognized by our earliest G7 users. The feedback from our launch has been incredibly positive, which adds to our confidence that this product will take Dexcom to the next level. We are moving quickly to make this life changing technology available broadly around the world. And we'll be rolling out G7 across a steady cadence of additional geographies over the next several months. In the US, we have responded to the FDA and our G7 regulatory pathway is tracking in line with expectations we shared last quarter. We completed the necessary software changes in response to the feedback we received from the agency and subsequently validated the data to ensure the software is operating as designed. These efforts position as well to receive G7 clearance before the end of the year. This is a very exciting time for us. We believe this is the product of the future for Dexcom, and we are working diligently to make that product accessible to a much broader population, not only the intensive insulin-using population, but moving into people with type 2 diabetes on basal insulin only, non-insulin-using type 2s, gestational, hospital, metabolic health, and beyond. Along those lines, there is a growing body of evidence demonstrating outcomes beyond the intensive insulin-using population, including a recently published study in Diabetes Technology and Therapies. This study assessed the benefits of Dexcom CGM for a population of predominantly non-insulin-using Type 2 individuals. Similar to our mobile study, it demonstrated meaningful reductions in A1C levels and improvements in time and range across the study group. Notably, the largest improvements in time and range came from the cohort being treated with one or less medication per day. This suggests that a sizable opportunity exists to help individuals earlier in their diabetes journey potentially preventing escalation of the disease. This has meaningful long-term health implications for those starting on CGM and also holds promise to reduce the economic burden on our health system associated with progression of diabetes. CMS clearly recognized this potential in 2017 when they became one of the first global payers to cover CGM for people with intensively managed type 2 diabetes, and they appear ready to lead yet again in customer care. In early October, CMS published a proposed local coverage determination that would again meaningfully expand CGM for the Medicare population. Once finalized, this proposal would expand Medicare coverage to include the basal only population, as well as non-insulin using individuals that have experienced hypoglycemia. This proposal is in direct response to the clinical outcomes demonstrated in our mobile trial, where Dexcom proved to meaningfully improve time and range for this population. Since publishing that data, we have been expecting a reimbursement decision and applaud CMS for taking the lead. Coverage for the basal-only population alone would allow us to help significantly more people in the U.S. as we size that population to approximately 3 million individuals. This will be the first major reimbursement expansion beyond the intensively managed space and one that we expect to be the first of many. Historically, CMS has often led commercial payers on coverage decisions, and we anticipate the same dynamic to occur here. However, we're not stopping there. We will continue to advocate for the millions of additional individuals that could benefit from access to real-time CGMs. There is a massive opportunity ahead for Dexcom. With that, I'll turn it over to Jeremy for a view of the third quarter financials.