DexCom, Inc.

Ladies and gentlemen, welcome to the DexCom second quarter 2026 earnings release conference call. My name is Abbey 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 one on your touchtone phone. As a reminder, the conference is being recorded. I will now turn the call over to Sean Christensen, Senior Vice President of Finance and Investor Relations. Mr. Christensen, you may begin.

Thank you, operator, and welcome to DexCom's second quarter 2026 earnings call. Our agenda begins with Jake Leach, DexCom's president and CEO, who will summarize our recent highlights and ongoing strategic initiatives, followed by a financial review and outlook from Jereme 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 each so we can provide an opportunity for everyone participating today. Please note that there are also slides available related to our second quarter 2026 performance on the Dexcom Investor Relations website on the events and presentations page. With that, let's review our safe harbor statement. Some statements on 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. These statements are made as of the date hereof based on information currently available to Dexcom. are subject to various risks and uncertainties that could cause actual results to differ materially. For discussion of these risks, please see 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 forward-looking statements or to conform any forward-looking statement to actual results. Additionally, during the call, we will discuss certain non-GAAP financial measures. unless otherwise noted, all financial measures discussed on this call are presented on a non-GAAP basis. Non-GAAP measures should not be considered in isolation or as a substitute for or superior to GAAP results. Please refer to the tables in our earnings release and the slides accompanying our second quarter 2026 earnings call for reconciliations to the most directly comparable GAAP measure. Now I will turn it over to Jake.

Thank you, Sean, and thank you everyone for joining us. Today we reported second quarter revenue growth of 13% compared to the second quarter of 2025 and organic revenue growth of 12%. We carried forward solid demand from the first quarter for DexCom CGM globally as we benefited from broader access and share gains across several core markets as well as patient categories. The second quarter was also marked by solid execution across the business. This included multiple product launches, strong margin execution, and excellent product performance in the field. In addition, global new customer starts remained in line with our previous record from last quarter, including a sequential uptick in new customer starts in the U.S. During the quarter, we had the opportunity to connect with many of you at our 2026 Investor Day, which we hosted at our Arizona manufacturing facility. Since I stepped into the role of CEO, you've heard me reiterate my three priorities for Dexcom's next phase of growth. One, be the premier glucose sensing solution for all. Second, set the standard for customer experience. And third, expand international market share. This event provided an opportunity to explore each of these topics in much greater detail. During the day, we shared updates on our product roadmap, reimbursement plans, international strategy, and future market opportunities. We also laid out our new five-year financial targets and capital allocation plans. which included a $1 billion share repurchase authorization to be executed in 2026. A key part of our presentation was detailing the pathway to full coverage for the 25 million people in the U.S. with type 2 diabetes not using insulin. In fact, we have an organizational initiative called the Road to 100, which represents our efforts to achieve coverage for all people with diabetes. And while it's only been two months since our investor day, We've recently took an important step forward in advancing that opportunity. As many of you know, at this year's American Diabetes Association Scientific Sessions, we provided a full readout of CONNECT, our randomized control trial for people with type 2 diabetes who are not on insulin. For background, CONNECT enrolled nearly 300 participants across 22 primary care sites in the U.S. and was designed to reflect the wide spectrum of people with type 2 diabetes. This included individuals across the full range of Type 2 medication plans to ensure these results were reflective of real-world care, and we could not have been happier with the results. Over the six-month study period, we saw a 1.6% A1c improvement for the DexCom CGM group, which equated to a 0.9% difference in A1c between the CGM arm and the control group. To put this in perspective, these results are even better than what we saw in our landmark diamond and mobile studies, which ultimately helped shift standards of care and led to full coverage for anyone using insulin. Beyond the strong headline results, several additional outcomes stood out in the CONNECT trial. First, the Dexcom CGM arm spent over five more hours per day in normal glucose range compared to the control group. Importantly, these improvements began within the first week of using DexCom and were sustained over the 26-week study. These were individuals who've had diabetes for 10-plus years on average, and DexCom immediately gave them a path to better glucose control. Second, this real-time feedback led to very high engagement throughout the trial. Over the 26-week study, median CGM usage was 97%. which is even higher than what we have seen in some AID trials. And finally, from a medication perspective, the largest relative improvement in A1C was within the cohort using only GLP-1 therapies. This data only further reinforced the complementary relationship between CGM and incretin therapy. The results demonstrated in CONNECT translate to meaningful health outcomes and economic savings, and we are already seeing this recognized by commercial payers. As an example, in collaboration with CVS Health, we published a real-world evidence study for non-insulin type 2 customers. Over a three-year period, the study showed a 66% reduction in diabetes-related hospitalizations after the initiation of CGM and nearly 50% reduction in microvascular complications. These tangible near-term cost savings are a key reason why we've seen commercial coverage build so quickly. As we mentioned in our Q1 call, as of this summer, we now have coverage for all people with diabetes across the four largest commercial PBMs. This represents reimbursement for more than 7 million people with type 2 diabetes who are not on insulin. While this is a great start, We have stated previously, we won't be satisfied until we have broad global coverage for all people who can benefit from DexCom CGM, including 25 million Type 2 non-insulin customers in the U.S. The Connect readout adds Level A evidence to the already substantial body of real-world Type 2 data and our momentum with commercial payers. Historically, this level of evidence has carried outsized influence in both shaping clinical practice and driving coverage forward. both in the U.S. and across international markets. We're now working with advocacy groups and KOLs across the world to help educate the market on these outcomes. We've also submitted the Connect data for publication and provided the evidence to CMS in support of the non-insulin coverage expansion. We believe these results only strengthen the case for reimbursement, and with roughly half of the type 2 non-insulin population being of Medicare age, This decision has the potential to completely reshape diabetes care in the U.S. The administration is already demonstrating their commitment to reducing the burden of chronic disease and expanding access to new technologies. Along those lines, we are excited to see the FDA's announcement of DexCom as the first company chosen to participate in the Tempo Digital Device Pilot. As I shared at Investor Day, We believe that DexCom's opportunity goes beyond diabetes care and into diabetes prevention. We have 115 million Americans with prediabetes, but only a fraction of them are aware. Under TEMPO, we will have the ability to demonstrate DexCom's ability to screen for prediabetes with DexCom CGM and drive people to better metabolic health. As we continue to expand the horizons of CGM access and metabolic health, We are driving exciting product enhancements that meet the needs of our customers. This includes our fully redesigned Stello app, which launched broadly last week. As you saw at Investor Day, this new interface offers a more consumer-friendly feel, new AI-driven insights, and enhanced food logging capabilities. This Stello update also creates the foundation from which our G-Series app will evolve, providing greater personalization and additional functionality for all customers. More broadly, our technology roadmap remains focused on delivering innovations that can improve outcomes and the user experience. A great example of this is DexCom SmartBasil. As a reminder, SmartBasil is a personalized dosing module to help simplify and optimize basal insulin management for both customers and physicians. We developed this technology to address a significant unmet need, as more than 70% of patients on basal insulin fail to achieve target A1C levels after a year of therapy, often due to the challenges associated with insulin titration. We currently have our pilot program of Smart Basel underway with several key KOLs, and the feedback has been great. In fact, across these practices, Smart Basel has helped customers reach an optimal basal dose in only three weeks on average, which is a process that typically takes 12 weeks or longer in routine care. These results validate our belief that SmartBasil has the potential to become the new standard of care for basal insulin management. During the quarter, we also continued to advance the rollout of our DexCom G7 15-day system. With the recent integration availability for tandem pump users, including Mobi, our G7 15-day system is now accessible for all adult G7 customers in the U.S. We're very encouraged by the response we've seen since launch. Thank you so much for joining us. We remain on track to convert nearly 50% of our U.S. customer base to the G7 15-day system by year end. At Investor Day, we also discussed our plans to extend this 15-day experience across our international markets. We recently completed an important step on that journey as Health Canada became the first international regulator to clear Dexcom G7 15-day. We look forward to bringing G7 15-day to Canada in the second half of 2026 and to the rest of our international markets as quickly as possible. To close, it was great to connect with many of you in Arizona, to share our vision for DexCom's next chapter of growth and to support that vision with a strong quarter of execution. As we discussed at the event, we see a significant opportunity to help millions more people globally. In fact, through our ongoing advocacy work, access efforts Thank you, Jake.