DexCom, Inc.

Ladies and gentlemen, welcome to the Dexcom fourth quarter and fiscal year 2023 earnings conference call. My name is Abby and I will be your operator for today's call. At this time, all participants are in a listen only mode and later we will conduct a question and answer session. During the question and answer session, if you have a question, please press star one on your touch tone phone. If you would like to withdraw your question, press star one a second time. As a reminder, the conference is being recorded, and I will now turn the call over to Shawn Christiansen, Vice President of Finance and Investor Relations. You may begin.

Thank you, Abby, and welcome to Dexcom's fourth quarter and fiscal year 2023 earnings call. Our agenda begins with Kevin Sayre, Dexcom's Chairman, President, and CEO. We'll 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 know that there are also slides available related to our fourth quarter and fiscal year 2023 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, 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 fourth quarter and fiscal 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. 2023 was an incredible year for Dexcom. I'd like to start by reviewing some of our key accomplishments. Total revenue grew by 24% on an organic basis, driven by another year of record customer starts. This translates into more than $700 million of organic revenue growth compared to last year, as we've built strong commercial momentum through recent coverage expansion and the performance of Dexcom's CGM systems. In 2023, we added over 600,000 Dexcom users to our base and ended the year with approximately 2.3 million customers globally. Importantly, we delivered this level of growth again while enhancing scale and efficiency of our operations. A key milestone here was the opening of our Malaysia manufacturing facility around mid-year. Production at this site is ramping quickly, and the team is already delivering yields on par with our more established U.S. facilities. This facility will help support our growth and cost ambitions for years to come. As a measure of our success for 2023, we not only generated $1 billion in Q4 revenue, we also delivered $1 billion in adjusted EBITDA for the year and generated record levels of free cash flow, which is up nearly 70% compared to 2022. By establishing a disciplined cost culture that focuses years in advance, we are striking the right balance of margin progression while still investing strategically and thoughtfully to support our significant growth opportunities. From a strategic perspective, 2023 will go down as one of the most transformational years in our company's history. We launched G7 and Dexcom 1 into multiple new markets, significantly expanding our global access and advancing key technical and clinical work that will provide the foundation for the future of Dexcom. This started with the rollout of G7 in the U.S. in February. G7 is the most accurate CGM ever launched, and the market's reception to G7 has been exceptional. Customers and clinicians have been thrilled with the new form factor, product performance, and ease of use, and payers wasted no time establishing coverage as they recognized the clear value proposition that G7 provides. We immediately started to see a change in prescribing patterns once this product reached the market, and this trend became even more pronounced as we completed the largest expansion of coverage in our company's history. In mid-April, Medicare coverage went live for people with type 2 diabetes using basal insulin only, as well as certain non-insulin-using individuals with hypoglycemia risk. Between this decision and the broad commercial coverage that quickly followed for the basal markets, we have effectively doubled our reimbursed population in the U.S. This has completely changed the market landscape in the U.S. With broader coverage available and a new product that greatly simplifies the prescribing process, we've attracted a sizable new cohort of clinicians to our ecosystem. In fact, in 2023, we expanded our prescriber base by approximately 40%. And we're not stopping there. We have always known that the primary care channel would become increasingly important as our business evolves. Much of the work our commercial team has done in recent years has been tailored to this market, and we are now seeing the direct result of that effort as more than 70% of our new scripts are being written by primary care physicians. These relationships are not only critical to help us reach the millions of insulin-using individuals who have not yet started on CGM, but also the tens of millions with broader type 2 diabetes, prediabetes, and beyond. Based on the success of our team in 2023 and the magnitude of these future opportunities, we are excited to continue our investment in our U.S. sales force this year. When we have a presence with prescribers, we win. Now it is up to us to continue to expand that prescriber pool. We are already seeing more clinicians want to incorporate Dexcom CGM earlier into patients' care plans as they recognize our unique ability to drive behavior change sustainable outcomes, and greater accountability. This is why we are thrilled to be introducing our newest product, Stello, later this summer. Stello will be the first CGM designed specifically for people with type 2 diabetes who are not on insulin. Leveraging our leading sensor platform, we have built a custom software experience that is tailored to the needs of this population. Stello will feature a 15-day wear time and launch as a cash pay product while we build our case with payers for broader coverage. With several trials currently underway, we will continue to add to the growing body of evidence demonstrating Dexcom's unique ability to drive greater health and economic outcomes for all people with diabetes. The launch of Stello also presents a great opportunity to bolster our evidence with a large collection of real-world data as we see the impact this product is having on our customers. We filed Stello with the FDA in the fourth quarter of 2023, leaving us well on track for our highly anticipated launch this summer. As our product portfolio continues to grow, it provides a greater glimpse into the future potential of our company. We have built a platform technology that we can customize to provide creative solutions for different populations. Our redesigned software infrastructure is a key component to this as it enables much quicker iteration and greater connectivity. Connectivity has always been a distinct advantage for Dexcom, and with our recent filing of direct-to-watch with the FDA and new G7 pump integrations, we are further advancing this leadership position. We will also continue innovating on our hardware technology, with our current efforts focused on launching an extended wear sensor across all of our product offerings. As we look at the significant opportunity ahead of us, we are as excited as we've ever been. As I said at our Investor Day this past summer, we are just getting started. With that, I will now turn it over to Jeremy for a review of the fourth quarter financials. Jeremy?