Dexcom Inc Q1 2025 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Matt Taylor - Jefferies - Analyst : Congrats on a good quarter. I wanted to touch on the US growth improvement here. And see if you could talk a little bit about two things. One, did supply have any impact on the revenue growth? Could you characterize that? And then you keep talking about the gap closing between dollars and volumes. I was wondering if you could comment on what you think market volume growth is or your volume growth is so we can understand what the revenue growth could be through the year and how quickly that gap closes would be helpful.

Question: Robbie Marcus - JPMorgan - Analyst : Congrats on a nice start to the year here. Wanted to ask on the type 2 patients, particularly non-intensive and basal patients. And you said you had good growth in non-intensive type 2. I imagine basal as well. And just wanted to get a better understanding of sort of the utilization and reorder rates and patient trends you're seeing there. I realize basal is predominantly insured patients and a growing nonintensive, but both for insured and noninsured and some of the things you can -- that you're doing to help keep patients reordering at high rates.

Question: Danielle Antalffy - UBS - Analyst : Just a quick question on the macroeconomic environment and actually less about tariffs and more about the several proposals for the budget and Medicare and will we or won't we go into a recession? That's a big question. I would love, Kevin, how exposed or unexposed or protected you guys think you are if, in fact, we go into a recession and maybe give some commentary around that COVID sort of the last time, but that was very unique. So just curious what you would say there.

Question: Jeff Johnson - Robert W. Baird & Co. Inc - Analyst : Congrats on the quarter. Jereme, maybe it's a question for you since it's on gross margin, but wondering if you could help us kind of with the gating. You gave a good amount of information there, I understand. But it seems like to me, as I'm doing kind of back of the envelope, we should still be kind of in that very low 60% range, maybe even upper 50s for the second quarter and then you get to the mid-60s in the back half. Is that still kind of the range that we should be thinking about for the setup throughout the year on growth? And then kind of a corollary to that, it's not where I get my primary research, I promise you, but some of the chat boards and things like that are still showing some kind of scary pictures of maybe some manufacturing issues on sensors, things like that. Where are you at now? You're talking about having to charter some of these flights and all that. But on the manufacturing process itself, you settled and comfortable that things coming off the line are in good shape, and this is really just about getting channel inventory back up to normalized levels or at least your own inventory levels back up to normalized levels now. It's not -- we're not still in the phase of having to fix some sort of manufacturing issues. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 01, 2025 / 8:30PM, DXCM.OQ - Q1 2025 Dexcom Inc Earnings Call

Question: Jayson Bedford - Raymond James - Analyst : Congratulations on the progress here. Just internationally, you mentioned pockets of strength relative to consensus, international revenue was a bit below where folks were looking for. So is there anything notable to call out? And maybe more specifically, was international impacted more by the supply dynamics?

Question: Travis Steed - BofA Global Research - Analyst : Congrats on a good quarter. I wanted to ask about the 50 basis points of inflation that you kind of built in with supply chain, if that's kind of directly related to tariffs. And I'm curious about the use of some exemptions out there like the Nairobi exemption and if that's applicable to you and kind of what you've assumed around that going forward?

Question: Matt O'Brien - Piper Sandler - Analyst : Maybe just sticking with the 15 Day for a second. I don't know exactly who this question is for, but can you just talk a little bit about the rollout of that product as far as integrating into the pumps, et cetera? And how do we think about not necessarily this year, but in some of the out years, the contribution on gross margins? Can it be a couple of hundred basis points in a year in terms of gross margin benefit, or will it be more measured than something like that? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 01, 2025 / 8:30PM, DXCM.OQ - Q1 2025 Dexcom Inc Earnings Call

Question: Marie Thibault - BTIG - Analyst : Nice to see a very strong quarter. I wanted to ask here about the OpEx control that's being sort of assumed in the guidance, especially with some of the impacts to gross margin, but you're able to hold the operating and EBITDA guide. Just wanted to understand sort of where some of those puts and takes are and how you're able to accomplish that.

Question: Joanne Wuensch - Citi - Analyst : Nice quarter. Let me just pause on the FDA warning letter. It didn't stop you from getting the 15 Day sensor approved. I don't anticipate that it will stop you from getting a hospital label, but is there anything that it does stop you from doing? And how do we think about timing and steps towards resolution?

Question: Michael Polark - Wolfe Research - Analyst : RFK Jr. recently said in an interview that he thinks glucose monitors are extraordinarily effective and only cost $80 a month. So it's a clear positive read from the Head of HHS, and there's not many things on the right side of his ledger right now. And so my question is, can you remind us on what is the path with Medicare fee-for-service program for broadening the coverage decision to the non-insulin using type 2 population? Does this change in leadership raise the odds in your view? And I know the RCT is critical for this as well. Can you remind us on what's kind of timing of disclosure for the type 2 NIT RCT?

Question: Margaret Andrew - William Blair - Analyst : I wanted to follow up on the commentary you guys talked about on non-insulin using type 2s. You're saying I think new customer starts that are higher than ever before. I guess, can you give us a sense of scale here? Is it doubling, for example, or can you at least call it material to overall new patient adds in the period? And it doesn't sound like you're assuming this accelerated pace continues in guidance given that you're reiterating sales. So I guess, one, is that right? And two, why not? Are there offsetting factors to that? Or you just want to get ahead of yourselves?

Question: Mike Kratky - Leerink Partners - Analyst : Maybe just a quick follow-up to that last one. But alongside the acceleration that you're seeing in that type 2 non-insulin patient population, are you seeing anything on the type 1 side of the world, whether it's market growth and penetration or just your overall market share that might be a little bit different than your expectations coming into the year?

Question: Issie Kirby - Redburn Atlantic - Analyst : I just wanted to follow up on the non-insulin using type 2s again and the extent to which you're seeing potentially any of these patients coming from competitive switching versus if they are new to the sensor? And then just on Stelo, sorry if I missed this, are you giving Stelo revenue again this quarter? And then just on Stelo, how are you sort of capturing potentially now that reimbursement is improved for G series, how are you capturing or encouraging people to upgrade from Stelo to the G7?

Question: Bill Plovanic - Canaccord Genuity - Analyst : Just on the 15 Day, as you walk through the contracting for this, you're reimbursed on a per diem. Some of the knock has been you're a little more expensive than some of your competitors when it comes to the payers. Is that something that will be adjusted in this 15 Day as you're working through those contracts? And if so, so does the price per day come down a little as you kind of do this? How should we think about that?

Question: Chris Pasquale - Nephron Research - Analyst : Congrats on the quarter. Two quick follow-ups. Just I know you don't want to give a Stelo revenue number, but I would love it if you could give us an update on where the installed base stands today relative to the more than 140,000 users you had in mid-January. And then, Jereme, could you just go back to the 100-basis-point impact you're assuming from increased freight and other things. If channel inventory is already back to normal levels, why that magnitude of impact still in front of you relative to the 75 basis points you took in 1Q?

Question: Steven Lichtman - Oppenheimer & Co. - Analyst : With more pieces in place on the non-insulin front, you mentioned, Kevin, driving awareness. Can you talk about what the forms of that -- what that might look like? Is it solely direct-to-patient work? Is it educating PCPs with the expanded sales force? Any color there would be great.

Question: Matt Miksic - Barclays - Analyst : I want to maybe -- we covered a lot here, but maybe a follow-up on Stelo. Last year, I think ahead of some of the coverage that you talked about earlier in the year, there was maybe -- it seemed to have maybe a slightly different role, slightly different target potential maybe -- and then now it's still important. But as you've talked about, DexCom G7 is with coverage slotting into some of these non-insulin opportunities. So can you talk about how to think about the two products and where they -- how they overlay or fit together?

Question: Anthony Petrone - Mizuho Securities USA - Analyst : I'll stick on Stelo. A question on the utilization intensity with a prediabetic versus a nondiabetic patient. Do you have any data on that? Are you noticing more utilization intensity with prediabetics? And then just on channel access, where are most folks getting Stelo today? And when you think about Amazon, how much could that sort of just open the opportunity for Stelo?