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DATE

Thursday, July 30, 2026 at 4:30 p.m. ET

CALL PARTICIPANTS

• senior vice president of finance and investor relations - Sean Christensen
• President and Chief Executive Officer - Jacob Steven Leach
• chief financial officer - Jereme Sylvain

TAKEAWAYS

• Worldwide Revenue -- $1.31 billion, representing 13% growth on a reported basis and 12% on an organic basis compared to the second quarter of 2025.
• U.S. Revenue -- $933 million, up 11% year over year driven by strong new patient starts and share gains in the domestic market.
• International Revenue -- $375 million, reflecting 19% growth on a reported basis and 16% on an organic basis, with notable strength in France and Canada.
• Non-GAAP Gross Profit Margin -- 64.1% of revenue, a 400 basis point improvement from 60.1% in the prior year period, reflecting manufacturing efficiencies and a return to optimized shipping patterns.
• Non-GAAP Operating Income -- $328.3 million, or 25.1% of revenue, compared to $221.8 million and 19.2% of revenue in the second quarter of 2025.
• Non-GAAP EPS -- $0.70, representing a 46% increase compared to $0.48 in the prior year quarter.
• Free Cash Flow -- $600 million for the first half of 2026, which is more than double the free cash flow generated in the first half of 2025.
• Cash and Marketable Securities -- approximately $1.9 billion as of June 30, 2026, providing liquidity for capital allocation and M&A.
• Share Repurchases -- $600 million executed during the second quarter as part of a $1 billion authorization for fiscal year 2026.
• Fiscal Year 2026 Revenue Guidance -- $5.18 billion to $5.25 billion, an increase at the midpoint from the previous range of $5.16 billion to $5.25 billion, representing 11% to 13% growth.
• Non-GAAP Operating Margin Guidance -- raised to a range of 23.5% to 24% for the full year, up from the previous range of 23% to 23.5%.
• Non-GAAP Gross Profit Margin Guidance -- raised to approximately 64% for the full fiscal year.
• CONNECT Trial Results -- showed a 1.6% A1C improvement in the CGM arm over six months, resulting in a 0.9% A1C difference versus the control group among type 2 non-insulin users.
• U.S. Commercial Coverage -- now includes more than 7 million people with type 2 diabetes who are not on insulin across the four largest commercial pharmacy benefit managers.
• G7 15-Day Transition -- on track to convert approximately 50% of the U.S. customer base to the extended-wear system by the end of 2026.
• Adjusted EBITDA Margin -- 32.2% of revenue for the second quarter, compared to 28.3% in the same quarter of the previous year.
• Nutrisense Acquisition -- completed in the second quarter to integrate technology-driven nutrition insights, with management noting non-CGM revenue from the acquisition is currently immaterial.
• Foreign Exchange Headwind -- expected to impact international revenue by approximately $15 million in the second half of 2026.
• DexCom Flex Launch -- introduced in Germany as a 15-day sensor targeting the type 2 basal and non-insulin markets.
• G8 System Development -- targeted for late 2027 or early 2028, featuring a multi-analyte platform and a footprint half the size of the G7.
• Smart Basal Performance -- pilot data showed users reaching optimal insulin titration in three weeks on average, compared to the typical 12-week clinical cycle.
• New Customer Starts -- reached levels in line with the record set in the first quarter of 2026, supported by a sequential increase in U.S. starts.
• H1 Free Cash Flow -- exceeded $600 million, more than doubling the $300 million generated in the first half of 2025.

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RISKS

• Sylvain stated, "We expect to have about a $15 million impact to international revenue in the second half of the year relative to our prior guidance," citing recent movement in foreign exchange rates.
• Sylvain stated, "we will be doing quite a bit of hiring in Ireland here into the third quarter, and before turning on those lines, and those folks are not producing," noting that the factory launch will involve training costs and future depreciation.

SUMMARY

Management reported 13% revenue growth for the second quarter, driven by expanded international access and new customer starts that matched record levels set earlier in the year. The company raised its full-year guidance for revenue, gross margin, and operating margin while executing $600 million in share repurchases. Strategic focus remains on securing broad global coverage for the type 2 diabetes population not using insulin, supported by clinical results from the CONNECT trial and participation in a new FDA pilot program for metabolic health screening. The company also completed the acquisition of Nutrisense to integrate nutrition-focused data sets into its digital platform.

• President Leach noted the CONNECT trial results showed the CGM arm spent over five more hours per day in normal glucose range, stating, "DexCom immediately gave them a path to better glucose control."
• The company is the first participant in the FDA's Tempo digital device pilot, which Leach indicated will allow DexCom "to screen for prediabetes with Dexcom CGM and drive people to better metabolic health."
• Leach reported that the G7 15-day system received regulatory clearance from Health Canada, which marks the first international approval for this system configuration.
• CFO Sylvain noted that while the Ireland facility investment will incur hiring costs in the third quarter, the organization has achieved "operating leverage really ahead of plan" due to cost discipline.
• Management expects to receive a decision from CMS regarding coverage for the non-insulin type 2 population by the end of 2026, with an estimated effective date in mid-2027.
• Leach indicated the G8 system will be a "step change improvement in accuracy and reliability" using a wearable that is half the size of the current G7 device.

INDUSTRY GLOSSARY

• A1C: A blood test that measures a person's average blood sugar levels over the past three months.
• AID: Automated Insulin Delivery, a system that combines a CGM and an insulin pump to automate insulin dosing.
• CGM: Continuous Glucose Monitoring, a technology that tracks glucose levels in real time throughout the day and night.
• CMS: Centers for Medicare & Medicaid Services, the federal agency that provides health coverage to more than 100 million people in the U.S.
• G7 15-Day: DexCom's next-generation glucose monitoring system that extends sensor wear time to 15 days from 10 days.
• GLP-1: Glucagon-like peptide-1, a class of medications used to treat type 2 diabetes and obesity.
• NPS: Net Promoter Score, a market research metric used to measure customer satisfaction and loyalty.
• PBM: Pharmacy Benefit Manager, a third-party administrator of prescription drug programs for commercial health plans.
• Stello: A DexCom app and platform designed specifically for people with type 2 diabetes who do not use insulin.
• Tempo: An FDA digital device pilot program intended to accelerate access to cardiometabolic health technologies.

Full Conference Call Transcript

Operator: Ladies and gentlemen, welcome to the DexCom Second Quarter 26 Earnings Release 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. Peter, we will conduct a question and answer session. During the question-and-answer session, if you have a question, please press *, 1 on your touch-tone session. 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.

Sean Christensen: Thank you, operator, and welcome to DexCom's second quarter 26 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 for your questions. At that time, we ask analysts to limit themselves to 1 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 26 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 26 earnings call for reconciliations to the most directly comparable GAAP measure. Now I will turn it over to Jake.

Jacob Steven Leach: 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 25. 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 US.

During the quarter, we had the opportunity to connect with many of you at our 2 thousand 26 Investor Day which we hosted at our Arizona manufacturing facility. Since I stepped into the role of CEO, you have heard me reiterate my 3 priorities for Dexcom's next phase of growth. 1, be the premier glucose sensing solution for all. Second, set the standard for customer experience. And 3rd, 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 road map, reimbursement plans, international strategy, and future market opportunities. We also laid out our new 5 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 US 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 is only been 2 months since our investor day, we have recently taken 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 US and was designed to reflect the widespread 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 6-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 5 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 have had diabetes for 10+ 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 wear of 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 reinforces 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 3-year period, the study showed a 66% reduction in diabetes related hospitalization after the initiation of CGM. And nearly 50% reduction in microvascular complications. These tangible near term cost savings are a key reason why we have 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 4 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 will not 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 US. 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 US and across international markets. We are now working with advocacy groups and KOLs across the world to help educate the market on these outcomes. We have 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 US. 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 road map remains focused on delivering innovations that can improve outcomes and the user experience. A great example of this is Dexcom Smart Basal. As a reminder, Smart Basal 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 Basal underway with several key KOLs and the feedback has been great.

In fact, across these practices, Smart Basal has helped customers reach an optimal basal dose in only 3 weeks on average. Which is a process that typically takes 12 weeks or longer in routine care. These results validate our belief that Smart Basal 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 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 US. We are very encouraged by the response we have seen since launch.

With great feedback on the new algorithm updated patch, extended wear time, and enhanced customer service. Importantly, these improvements are translating into stronger customer satisfaction. With g 7 net promoter scores increasing in each of the last 3 quarters. Based on this positive customer feedback, strong adoption trends, and growing interest across the market, 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 2 thousand 26 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, market expansion, and product development, we believe we can exit our LRP with an even larger market opportunity than we have today.

And we plan to execute on that growth vision with 1 of the more compelling cash flow and margin profiles in the industry. As you can tell from today's updates, we are wasting no time making this vision a reality. With that, I will turn it over to Jereme.

Jereme Sylvain: Thank you, Jake. As a reminder, unless otherwise noted, the financial metrics presented today will be discussed on a non GAAP basis. Reconciliations to GAAP can be found in today's earnings release as well as the slide deck on our IR website. For the second quarter of 26, we reported worldwide revenue of $1.31 billion compared to $1.16 billion for the second quarter of 25. Representing growth of 13% on a reported basis and 12% on an organic basis. As a reminder, our definition of organic revenue excludes the impact of foreign exchange, in addition to non CGM revenue acquired or divested in the trailing 12 months. U. S.

Revenue totaled $933 million for the second quarter, compared to $841 million in the second quarter of 25. Representing an increase of 11%. We continue to see strong new patient performance and share capture in The US market. With good sequential momentum driven by solid execution in the field. International revenue grew 19%, totaling $375 million in the second quarter. International organic revenue growth was 16% for the second quarter. As we have seen over the past several quarters, some of our strongest performances came from markets where access has recently expanded, such as France and Canada. This is consistent with the international access strategy we outlined at investor day.

As reimbursement wins often allow us to drive growth and market share over time. We also continued to expand our international product portfolio during the quarter with the launch of DexCom Flex In Germany. DexCom Flex is our newest 15-day sensor designed to address type 2 basal in the Type 2 non insulin markets in select geographies. We are excited to further roll out this product as type 2 reimbursement continues to build. Our second quarter gross profit was $838.5 million, or 64.1% of revenue, compared to 60.1% of revenue in the second quarter of 25. This was another great quarter for gross margin performance. With margins improving approximately 400 basis points compared to last year.

This improvement was driven by continued manufacturing efficiencies in quality management, and a benefit from the initial customer switch over to G7 15-day. As Jake mentioned, our execution has been excellent. across our operations and supply chain. This included a return to more optimized shipping patterns, Which helped us manage the fuel price environment in Q2. Operating expenses were $510.2 million for Q2 of 26 compared to $474.1 million in Q2 of 25. Operating income was $328.3 million, or 25.1% of revenue, in the second quarter of 26 compared to $221.8 million, or 19.2% of revenue in the same quarter of 2025. Once again, we delivered nice operating expense leverage during the quarter.

Even as we expanded our investment in Ireland to prepare for commercial production later this year. This quarter was another great representation of ongoing cost discipline across our organization, which is driving margin performance and funding growth opportunities across the business. Adjusted EBITDA was $421.3 million, or 32.2% of revenue for the second quarter compared to $327.6 million, or 28.3% of revenue for the second quarter of 25. Net income for the second quarter was $269.1 million, or $0.70 per share. representing 46% growth over the second quarter of 25. We remain in a great financial position. Closing the quarter with approximately $1.9 billion of cash and cash equivalents. Our cash flow generation continues to be a key differentiator.

As we delivered more than $600 million in free cash flow in the first half of the year. This was more than double our first half free cash flow levels from 2025. As Jake mentioned, at Investor Day, we announced a commitment to repurchase $1 billion of stock in 2026. Following the event, we quickly started executing that plan. And repurchased approximately $600 million in the second quarter. During the day, we also shared broader framework for our capital allocation decisions. Which includes an ongoing assessment of tuck in M&A and where to invest for future production capacity. As we discussed, 1 area of particular interest is in transactions that have the potential to accelerate our technology pipeline.

In line with that framework, we completed the acquisition of Nutrisense during the second quarter. Nutrisense has developed an innovative platform built on CGM data, with a focus on delivering nutrition focused insights. We believe this integration has the potential to enhance our customer experience and provide new personalized insights. Turning to guidance. We are raising the midpoint of our guidance with an updated range of $5.18 billion to $5.25 billion, representing growth of 11% to 13% for the year. This updated revenue guidance reflects stronger organic growth expectations offset by recent movement in foreign exchange rates.

Which we expect to have about a $15 million impact to international revenue in the second half of the year relative to our prior guidance. Importantly, excluding the impact of foreign exchange, our updated guidance implies an increase in organic growth by more than 50 basis points at the midpoint. Compared to our prior guide. For margins, we are raising our full year non GAAP gross profit margin guidance to approximately 64%. We are also increasing our non GAAP operating profit margin guidance to a range of 23.5% to 24% and adjusted EBITDA margin guidance to a range of 31.5% to 32%. With that, we can open up the call for Q&A. Sean?

Sean Christensen: Thank you, Jereme. As a reminder, we ask our audience to limit to only 1 question at this time and then reenter the queue if necessary. Operator, please provide the Q&A instructions.

Operator: Thank you. Then we will now begin the question and answer session. If you wish to be removed from the queue, please press 1 a second time. If you are using a speakerphone, you may need to pick up the handset first before pressing the numbers. Once again, if you have a question, it is *, 1 on your touch tone phone. And our first question comes from the line of Travis Lee Steed with Bank of America. Your line is open.

Travis Steed: Hey. Congrats on a good quarter. Jereme, I will ask about the U.S. CGM growth for DexCom and also the market, it was nice to see the quarter over quarter uptick in new patient starts. But the market for CGM in the U.S. kind of hanging around that 10% line, just kind of the confidence you are seeing in that sustainability of double digit growth and how to think about some of the new products and expanding coverage as those hit later this year and kind of what you are assuming for Nutrisense in the second half on the guidance?

Jereme Sylvain: Yeah. Thanks, Travis. I will take that 1. Yeah. It was another robust quarter of new patient starts, and it was nice to see the sequential uptick in The US. It was pretty broad based across all of our patient segments. As we mentioned in the call, we saw some share taking across those. You know, when you take a step back and you look at The US market, today, there is approximately 9 million people in The United States that have coverage for CGM but are not yet using it. So we do feel that there is there is robust growth still there before we talk about any expansion in coverage.

Jacob Steven Leach: And so happy with the patient adds. We are gonna continue to drive and push so that everyone that can benefit from this technology gets it. And as you mentioned, you know, CMS expansion is something that we have targeted for mid-next year is when we believe that coverage will come into place. That obviously gives us a pretty significant runway for future growth. Nutrisense, as you mentioned, is 1 of the acquisitions that we have made. And it really is focused on driving, you know, better insights and more kind of value It was a really exciting technology that the team developed. We have been partners with Nutrisense for quite a while.

And as we continue to work with them, we saw just the benefits of that technology could bring to the users. You know, the engagement scores early on are really high because of the personalized nutrition coaching based on CGM that we see with that technology. So we are we are we are to work with it and integrate it into our product portfolio. And we are excited to see where it can drive us.

Jereme Sylvain: Yeah. And to your question on guidance, Travis, you know, most of the revenue that ran through Nutrisense was actually the pass through the CGM. So that is always been in our run rate, and that will continue into our run rate. I would say that you know, any other contribution, you know, say, the top line, you know, you can count the millions for the year on 1 hand. So it is really truly immaterial in terms of the impact on to the organization. Terms of the P&L, we are assuming the p and l associated with that into that guidance. Into the range of our guidance. And so all of that is really contemplated in there.

Jereme, most importantly, I think the big takeaway here is the run rate that NutriSense had, most of it was already Stello revenue. And so it continues to remain. It does not change the organic growth profile.

Operator: And our next question comes from the line of Robert Marcus with JPMorgan. Your line is open. Please check your mute button.

Robert Marcus: Oh, great. Sorry. Just jumping back and forth. Appreciate it. Wanted to ask on Connect and the reception amongst doctors following ADA and how you are thinking about how this data set and hopefully the eventual Medicare non-intensive reimbursement might help stimulate and advance adoption in type 2 non-intensives? You know, what is been the feedback and you know, do you think this trial was a door that could open and help drive adoption once reimbursement comes? Thanks.

Jacob Steven Leach: Yeah. Thanks. Thanks, Robbie. You know, absolutely, the results from the CONNECT trial, both in terms of the A1C reduction across the broad spectrum of type 2 users on all kinds of different medication plans. As well as the engagement with the technology. You know, it is interesting. Yeah. There the engagement is very, very high in this population. And if you kind of look at it compared to some of the older studies, 1 thing to always remember is that the technology has improved pretty substantially over time.

And so I think what we have seen in this study is not only the benefit to these users and their engagement with the product, but also the quality of the product experience. And so if you think about some of the earlier studies, those started back even on g 4. And so now g 7 with all the enhancements we have made to both the ease of use have really driven the capability for these folks to use this product full time. As I mentioned, 97% utilization.

And so I think that really resonates with providers because, you know, they if they are writing the prescription for their product, and they want their patient to get it, they want them to use it. And I think this trial is a great proof point in how this product will be used in this population. We saw it in our registry data. We saw great utilization. For those that already are using it. But in this trial, I think that stands out substantially as well as the improvement in a 1 c. And so right now, our we are working with that data. We have submitted it. it is in late stage review for publication.

And we will continue to take that data around the world to drive reimbursement. This is the type of trial that previously has driven pretty significant expansions. Our previous trial is obviously for insulin users. This 1 now for the broad segment of type 2, so we do feel that it is a very important part. The evidence was strong before the connect trial. Results were available, but now that they are available, it just really reinforces the benefit that this technology has in the broad base of diabetes.

Operator: And our next question comes from the line of Matthew Charles Taylor with Jefferies. Your line is open.

Matt Taylor: Hi. Thank you for taking the question. I just wanted to follow-up on Connect and non-insulin type 2. You talked about having submitted the data package to CMS as well. Could you give us any update if there is 1 on the timeline that you might expect for coverage? You said mid 27 previously. Is that still your base case, or could it potentially be sooner with the progress that you have made?

Jacob Steven Leach: Yeah. We did submit that the connect data to CMS, and you know, again, it adds to that pretty substantial body of evidence that was already there. there is no change in our assumptions around the coverage decision. We do expect to hear back from CMS on that decision before the end of this year. And in our plans right now, we have got it taking effect in the middle of 2027. You know, that being said, I do believe that Connect is a pretty powerful dataset that not only for CMS, but for the world, will continue to advance reimbursement. For this population.

Operator: Our next question comes from the line of Larry Biegelsen with Wells Fargo. Your line is open.

Gursimran Kaur: Hi. This is Gursimran on for Larry. Thanks for taking the questions, and congrats on a good quarter here. I will just ask mine about the pilot program with the FDA, Tempo. What does tempo mean for type 2 non insulin and prediabetes coverage? Exactly. Can you just elaborate on the kind of evidence development in the tempo program for those 2 indications and you know, when you could potentially have a prediabetes label. And then, you know, is there any near term revenue benefit from CMS coverage and you know, any kind of read through to just broader type 2 non insulin CMS coverage from you know, it being mentioned alongside the tempo program as well.

Jacob Steven Leach: Yeah. Thanks, Gursimran. So Tempo is really it is an innovative regulatory framework. So introduced by the FDA. For so it is really around access to technology for patients. And so it aligns the target areas, for, the tempo framework is around the areas that were identified. By the access program from CMS, which are early stage cardiometabolic conditions and cardiometabolic conditions We are, you know, talking prediabetes, and diabetes, obviously, squarely fit into those. So it is really around allowing the participants of Tempo to release into the market technology digital technologies under basically, it is like an enforcement discretion.

So we it basically, what it means for Dex is it allows us to innovate more quickly on our glucose health program as well as some screening techniques that we are looking at using CGM to screen for prediabetes as well as diabetes because of the pretty significant lack of awareness of prediabetes diagnosis We believe that CGM is a really powerful technology to help intervene more earlier in the progression of disease. And so it is it is it is tempo is not really specific to a coverage. it is it is really more a framework to get technology in the hands of users. The access program does add additional payments into the system for Medicare beneficiaries.

And so obviously, a technology that under tempo can help there. But it is not connected at all to the kind of general CMS decision for long you know, broad coverage for type 2. it is it is really more specific to the tempo and access programs.

Operator: And our next question comes from the line of Matthew O'Brien with Piper Sandler. Your line is open.

Anna: Great. Thanks. This is Anna on for Matt. Thanks for taking our question here. I wanted to ask on 15-day. You mentioned the 15% conversion by the end of the year in The U. S. Just wanted to know if there was any color you could provide on conversion to 15-day sits exiting Q2 and how you are thinking about the accretive margin impact from that mix shift for the rest of the year Is that sort of showing up in line with your expectations? Or anything to note there? Thanks.

Jereme Sylvain: Sure. Yeah. And I can take that question. You know, the transition is occurring essentially in line with expectations. And so if you think about, you know, all the assumptions as we were going into the year, know, obviously, we really launched it in earnest and full starting in January. We did a little bit of an early release in the DME space in the back half of or the back quarter of last year, but it went into retail at the beginning of this year. And so if you if you kinda think about a line drawing through, there is there is obviously folks that have adopted it over the course first half of the year.

1 of the big gating items was, of course, thinking about its integration with Tandem and Mobi, and Jake alluded to it earlier. that is now gone into full line here as we move into the back half of the year. So our expectations were you would continue to see it ramp up, especially as all of the AID integrations took place.

You are seeing, you know, the Tandem coming in now, and it is already connected to beta and So we are making great progress. it is about in line with expectations, and so you are seeing it start to contribute a little bit more here in the second quarter. the expectation is it starts contribute more into the third quarter and the fourth quarter as, you know, your base continues to move over and, you know, as that starts to represent recurring purchase patterns over that time. So the expectation starts to contribute more as we get into the back part of the year. It really starts to contribute next year.

Because as you are starting to close in on 50%, you know, that becomes your starting point for 2027, and that starts to get pretty meaningful as you move into the next year. But for now, the way I think about it is it is progressing in line. Great customer feedback. I think we have really gotten all connections on board. And so we are looking forward to continuing to move to that you know, approaching 50% by the end of the year and right on track.

Operator: And our next question comes from the line of Joshua Jennings with TD Cowen. Your line is open.

Colin Clark: Good evening, guys. Thank you for taking the questions. This is Colin on for Josh. I had a quick 1 curious, now that you have got 7 million-plus covered lives. To play with. what is the kind of awareness level among physicians for the reimbursement already in place? Are physicians identifying which patients can already receive reimbursement with the Medicare decision upcoming. Thank you.

Jereme Sylvain: Thanks, Colin. And was cutting out a bit. So I am gonna do my best with the pieces I have heard. I think really what you are getting at is what is the physician awareness of reimbursement How much more needs to take place in lieu of expansion of coverage And there is more kind of knocks down. What are we doing to go about making sure folks are aware of it? that is where you are going. And the answer is, you know, obviously, you know, we have we have been working on this for some time.

And you know, if you think about the Salesforce, you know, the salesforce will we have various tools that the Salesforce gets up in front of physicians and really goes through historical claims adjudication by payer to show them in their practice you know, where does coverage exist, where does it not exist, So that more and more physicians can get comfortable that access exists for them. And so that continues to take place, and it takes a little bit of time to continue to make folks aware, especially as we continue to get more coverage.

Because every time we show up, we are gonna show them a better enhancement or a better improvement in coverage We have to continue to do that. I also would expect us to continue to bring the connect study with us. Because, obviously, that shows the demonstrates the benefits. So if any folks were on the fence, around, hey. Well, what is this going to do, and how is this going to impact, and will they use it? I think what we can both show is, 1, if they use it, you are going to see these incredible results. Does not matter what medication you are on.

We also can show the coverage ahead of time. there is always work to do around it. Remember, there is there is hundreds and hundreds of thousands of prescribers out there, and you know, so there that you know, saying this is in generality. Everybody's kind of at a different point in their education. But that is what the team is doing. And if you were to talk to, you know, our sales leadership team, you know, that is the 1 thing I think they are most excited about is more and more coverage comes you know, kind of the rebuttal of, well, do they have coverage?

We can start to show them, especially with these tools, clear line of sight to where their coverage exists today. Where that coverage does not exist today, they certainly have Stello in the bag. And then we are talking about connect and what connect can mean for CMS coverage. So I think we put all those in front of physicians today. We have to be mindful of, obviously, letting them know that the CMS coverage does not exist today. So if you prescribe it today, you are going to get a non coverage.

But I think seeding that is exactly what we are doing, and when we have all the tools to do so and, again, even when there is not coverage, Stella's a great opportunity there. So that helps. Hope that answers the question. If it does not, we can always catch up later.

Operator: Appreciate it. And our next question comes from the line of Jayson Bedford with Raymond James. Your line is open.

Jayson Bedford: Congrats on the progress. Just a clarification and then a question. I missed the comments around NCS adds. Was the takeaway that 2Q ads were similar to Q1. And then my question is really it is tough not to notice the OpEx leverage. Is there are there timing dynamics at play here or is this the level in which you can kind of leverage the business going forward? Thanks.

Jereme Sylvain: Sure, Jayson. Yeah. So, basically, what we are saying is Q2 is in line with Q1. Q1 was a record globally. So Q2 is in line with the record globally. We are still waiting for some final patient data to come in. We are also saying that US is in line with a record globally. Waiting for some final patient data to come in, and usually in The US, it is takes up to 45 days to get it all. what is most important is we do know that US new patient starts sequentially increased from Q1. Did mean the OUS patients came down a bit, but, you know, these things happen with, you know, tenders, timing, all of that.

So, hopefully, that gives you some context. Essentially, in line with the record in The US, in line with the record globally. So, hopefully, that is that is that is helpful. You know, to your question on operating leverage, you know, you are right. We are we have had some operating leverage really ahead of plan, and that is why we have increased the guide on the year. And so certainly passing that through. Know, I think over time, the operating leverage that you are seeing and all the work that we have put in place between technology and capability, etcetera, you know, we do expect that to continue to contribute over time.

The 1 thing I will say is for this year, and I think you guys you guys know this quite well, Jayson, is as we launch our Ireland factory, you know, what do you do in the quarter ahead of starting manufacturing? that is when you hire all the manufacturing folks. And so we will be doing quite a bit of hiring in Ireland here into the third quarter, and before turning on those lines, and those folks are not producing. They are take they are training. They are they are starting things. And then of that, we will start some depreciation as well.

So the so while we have invested in Ireland into the second quarter, we are gonna make some more investments in the third quarter. The good news underneath it all, and I think this is kinda what you are alluding to, Jayson, is the levers we are building in the org organization to achieve operating leverage, they continue. I think we are really proud of that thus far. So, hopefully, it gives you some context Really happy to see it this quarter. Really proud of it. I am glad to pass it along via guidance. Raises on off margin.

Operator: And our next question comes from the line of Marie Yoko Thibault with BTIG. Your line is open.

Marie Thibault: Hi, good afternoon. Thank you for taking the question. Wanted to ask about international. You had really strong organic growth over there again this quarter. I think the comp may be getting a little bit tougher in the second half. Just wanna understand what pace is sustainable. I know you know, Japan went direct. I believe you mentioned health Canada and the 15 day approval there. So what are some of the catalysts to help, drive international growth through the second half of the year? Thanks.

Jacob Steven Leach: Yeah. Thanks, Marie. Yeah. it is the exciting thing about that is the international market is just the tremendous opportunity we have as coverage expands Just as, like, a step back and think about it, we are still working through T1 coverage in a number of our top 10 OUS markets. that is before we even get to Basal and then ultimately NIT. So if you look at those populations, just in that core market, you know, we are well north of 60 million potential lives that we could impact. So, you know, as we think about the second half year, you are right.

The comps get a little tougher because we had some great access wins in the back half of last year. Continue to get access wins, though, new tenders. When you when you think about that landscape, you know, much of that is around people having access to Dexcom CGM for the first time because we now have our product portfolio where we can bring DexCom 1 plus or DexCom Flex to patient populations that did not have a choice before. And so as we do that and we win those tenders and we get on there, it gives them access, and we are seeing those wins. We continue to expect more of those to come.

So that is why as Jereme sometimes we see new patient numbers kinda go up or down, but in the in the long run, we see a pretty significant opportunity here.

Jereme Sylvain: Yeah. And then, you know, to your question on, you know, what to think about for the back half of the year and comps, you are right. The Q4 and the Q3, Q4 comps, especially Q3 got a little bit tougher in the international business. We have been talking about that all year. And so, you know, we have talked about where they get a little bit easier in and OUS a little bit tougher in the in OUS. So it is not it is not too much. But nevertheless, nevertheless, it is something to be mindful of. And, you know, it is always that funny currency thing.

You know, at a dollar 17, dollar 18, and the euro, I think that is where about breakeven sits. You know, as of June 30, when we are thinking about a dollar 14, so just being mindful of that as we think about it. If you neutralize that out, organic growth is not as impacted, but we always wanna just be mindful that you have those updated currency assumptions in your model.

Operator: And our next question comes from the line of Jeffrey Johnson with Baird. Your line is open.

Jeffrey Johnson: Thank you. Good afternoon, guys. Just want to swing back maybe to The U. S. Jereme, could you provide any kind of maybe high level color at least on what is the drivers of getting back to that kind of record equivalent to a record new start in The U. S? You know, was it was it Are we seeing more basal only patients coming in still? I think we are past 3 year anniversary at this point. So is it really basal only doing most of the heavy lifting? Is it share gains in basal only?

You know, my gut would tell me that maybe your T1 and intensive T2 new starts on a year over year basis are down a little bit. I do not know if you would wanna comment on that, but just given those penetration rates. So just kind of the mix and makeup of what drove that good U. S. Number this quarter. Thanks.

Jereme Sylvain: Sure. Yeah. I can I can cover that? You know, I think it was when we talk about kind of a broad based performance, we did see some step up actually from last quarter even in T1 a little bit. But you really saw a little bit of a step up across the board, across T1, and T2 intensive basal as well and a little bit there in the Type 2 non So it is a little bit across the board. You know, I think a lot of it is a couple fold, you know, and as we think about feedback. So you know, Jake alluded to it earlier. The NPS scores continue to go up.

This is our third consecutive quarter. Seeing those go up. And so when you have a new product in hand like G7 15-day, and it really that the algorithm, the wear time, the performance in the field, certainly, addressing some of, you know, the sensor deployment challenges we face. You know, all that as that plays into customers, happy customers combined with the coverage levels, that we have, and we continue to fight for coverage in the even eliminating things like prior authorizations, etcetera, to make it easier for folks I think we are really giving both physicians and customers reasons to come to our product. And so you know, there is there is there is no magic here.

We really focus on how to make the customer's life easier, like easier onboarding. Those things in. Sometimes we do not necessarily talk about it, but you are seeing more and more easier onboarding. You are certainly seeing, obviously, you know, sensor out of the box We expect those to go well. The algorithmic improvements And you do not necessarily always talk about those, but word-of-mouth is important there. You know, a lot of folks really enjoy the extended wear time. It really it really has been something we have really seen quite a bit of good feedback on.

And so I think as you build that echo and, obviously, there is more and more changes to come as we as we have talked about the product. We have just really seen a lot of interest there. So I would not say there is 1 silver bullet, but the more and more we work on all of those, plus the more we knock down that reimbursement door and make sure folks are aware they have reimbursement, that is really what we have seen over the course of this quarter.

Operator: And our next question comes from the line of Joanne Karen Wuensch with Citi. Your line is open.

Joanne Wuensch: Good evening, and thank you for taking the questions. Briefly, I wanted to make sure that the G8 sensor timeline was still intact or if you had an update on that. And then it looks like you acquired Nutrisense in early June. Just curious what your thoughts are on that and if it is in guidance. Thank you.

Jacob Steven Leach: Yeah. Thanks. Thanks, Joanne. G8 timeline is still very much intact. The team is doing great work there. We are in the middle of doing lots of validation on the product as we prepare to start some very large clinical trials to show the performance levels of this product. Again, as we have mentioned, at investor day, this we expect step change improvement in accuracy and reliability for this product based on brand new technology that is being implemented into the G8 system for the very first time. it is also a wearable that is half the size of G7. And so, you know, more slimmer in terms of height off the body as well as footprint.

And so, again, just continuing to make the technology easy to use, fit into patients. Lifestyle. And so very much on track for that you know, end of 2027, early 2020 depending on regulatory timing. But, yeah, very much on track. it is also a multi-analyte platform. So we will be launching with the glucose version first, but multi analytes to come after that as we continue to push towards ketones, potassium, as well as other analytes. We feel that they are an important part of the future for diabetes care and metabolic health. On the Nutrisense point, we did yes. We acquired Nutrisense.

They have been a partner of ours for a long time, and we really believe that technology, when you look at the engagement it drives and the insights that can be derived from the work that they have done, they basically built a system that was CGM guided nutrition insights and coaching. And so it was based on professional basically, metabolic health coaches and nutritionists that could basically guide CGM patients. And 1 of the exciting things there is they have lots and lots of history of doing that.

And so as we look at that kind of amount of data and the amount of insights they have been able to provide over time and the and the outcomes that they drove with it, we felt like that something that should be part of the Stelo and g 7. And basically our entire product portfolio. So we will be continuing to integrate that technology and advance it with the team with Nutrisense to really make further the insights that our products provide and drive really significant outcomes when you think about just metabolic health in general, such a big part of that is the nutrition component.

And so you have seen us continue to expand in our product the ability to capture nutrition, the new Stello app. Now analyzes nutrition and gives you a full breakdown of the meal, whether you barcode scanned it, you know, so a package food or you took a picture of something that was prepared. And so that type of technology that can really help power this.

Operator: And, Joanne, to your question on guidance, you know, a big chunk of the revenue that is in Nutrisense is actually CGM pass through revenue, and it is predominantly Stelo.

Jereme Sylvain: So there is no real change there. Right? We have always sold it and passed it through. So that is there. The piece that you are referring to is what incremental revenues. And I would say this. I alluded to a little earlier. The revenues that are non CGM related, the millions, you can count on 1 hand. So it is really not a huge revenue item. it is quite small. Relative to at least the size of Dexcom. what is big is the technology. The technology capabilities, and that is ultimately why we did it. The OpEx is has been assumed into it as just typical run rate.

We were able to raise the guidance in terms of, you know, operating margin performance and assume those costs in. You know, over the quarter. So, hopefully, that gives you some context. And, you know, sometimes, know, you kind of to give you some a feel for kind of what the commitment in terms of you know, dollars, etcetera, you will see it come out in the 10 q. We did not publicly disclose it, but in the Q, you will see in the cash flows kind of what the cash was in terms of purchase.

Operator: Right. And our next question comes from the line of Anthony Petrone with Mizuho. Your line is open.

Anthony Petrone: Great, and congrats here on a nice print. A couple on type 2 non-intensive We are hearing from some docs in the field that potentially the coverage decision could have some you know, requirements around it, specifically around a 1 c verification as at various increments, let's say, 6 months, 9 months. So what do you think coverage could potentially look like? Will it have you know, certain verification requirements to keep folks on CGM in this patient category. And then in the study, it had a 97% utilization rate of CGM, very, very high. But when we get to real world, what do you think the utilization intensity for the Type 2 non-intensive patients could look like?

Thanks, and congrats again.

Jacob Steven Leach: Yeah. Thanks. Thanks. Thanks for the question. So Yeah. Absolutely. Well, just starting with the utilization, first. We have our real world registry, and so we also in that dataset see very high utilization Not quite at 97%, but well above 80% in this population. And I think that speaks to, you know, reimbursed for those that have coverage today in the commercial space for this for the product. The utilization, low out of pocket cost in that environment. Their utilization is really, really quite high. To your question around a 1 c, you know, that is not consistent at all with what we are we hear in our discussion.

You know, if you look at the way CGM benefits users, whether they have a low a 1 c, or a high a 1 c, the benefits are for everybody. Right? So those with higher a 1 c's do see larger improvements. But for the whole the whole cohort. See the improvement. And when you think about the ADA standards of care, the focus is 7% A1c c. that is the target goal, and many people who are not using CGM are not achieving that. And so we feel that the Connect study is actually gonna continue to evolve those standards of care even more than we have seen in the past.

So that all people with diabetes are recommended to use CGM. And so the other thing to think about too is if there was some sort of a 1 c kind of threshold, which would first off, be inconsistent with what CMS has done in the past. It would also be quite inconsistent with what is already out there with the commercial coverage which is very broad. You know, it is for anyone who is diagnosed with diabetes. So I think it would be quite inconsistent with that and create other issues. So it is not that the type of idea is not consistent with what our discussions that we have been having with CMS and others out there.

Operator: And our next question comes from the line of Michael Polark with Wolfe Research. Your line is open.

Michael Polark: Good afternoon. Jake, at the beginning of your prepared remarks, you noted product performance was excellent in the quarter. I heard Jereme alluded to some manufacturing quality stuff in response to 1 of the prior questions. But I am hoping you can just unpack excellent product performance a little bit more for us, maybe give us some metrics: scrap, warranty rates, returns, complaints. Obviously, this was a challenge last year, and your rolling out a new product, so it is good to hear things are good. I would love any further color on that mentioned. Thank you.

Jacob Steven Leach: Yeah. No. Thanks for the question. Yep. We did see excellent product performance. And 1 of the biggest measures there is NPS, is why I mentioned that. The NPS we are seeing on the G7 product is continued to increase the last 3 quarters in a row and you are right. We had some challenges last year that in particular, in the out of box failure rates that you know, disrupted things. The patients were, you know, upset. It was not a great experience. We have addressed all of that, and the team worked really hard across the board to make sure that we could do that and solve those problems.

And you know, really it really comes down to as we continue to advance the technology, our focus is always on building the absolute best customer experience, whether it is in the product, or in their experience with our customer support. And so we have seen complaint levels come down. Because of the enhancements that we have been making. And so I think if you just look across the board, the product's performing We are gonna continue to advance it. We are gonna continue to improve that performance. We are our job there is never done.

You know, if you think about the evolution of CGM, over the past 25 years, the products have just gotten better, more reliable, but there is still room to go. As we mentioned with our G8 product, we are very excited about what it is gonna bring in terms of performance to this population that could benefit. And it is really everybody, whether you have diabetes or not, Accurate, reliable glucose data is so critical. Even if you are running an AID system. So product performance has been excellent. We are gonna continue to build on that as we launch 15 day around the globe.

Jereme Sylvain: I know sometimes you have asked the question about, well, how do I see it? And, certainly, the MPS scores is a good way. The other way to look at it and, you know, it is 1 that is kinda a little bit easier to see even though the it is not clear direct directly as you look at the margin performance. Right? Because some of the things that were impacting margin were freight, Some of that was related to doing the work around product and getting it there. And then, you know, obviously, some of that is related to scrap.

And as you have seen that improve pretty steadily as we moved, you know, from Q2 last year into Q3, then again into Q4, obviously, then into this year. You know, that improvement in performance is a lot of the work that team was doing, as Jake alluded, working real hard over the back half of last year and then into this year. So the best proof point is to also look at the results and see that improvement That is a result of a reduction of 1 of them, the significant 1, is the reduction of scrap, which is focusing on quality as it runs through our lines.

Operator: And our next question comes from the line of Jonathan Block with Stifel. Your line is open.

Jonathan Block: Great. Thanks, guys. Good afternoon. Jereme, maybe just on the financials. You had the gross margin raise of 50 bps Is that a function of a different price of oil assumption, call it, relative 3 months ago, Or is that more, you know, underlying efficiency that you are seeing and you still have some cushion on oil prices built into the guidance? And maybe just like second part, still same question. Based on the guidance, it is seems like the 2H implied gross margin is in line with what you saw in 1H. But you do have a growing percentage contribution from the 15-day as you called out. So what prevents further GM expansion from the 15 day tailwind?

Is it Ireland, call it, turning on that negates that tailwind? Thanks, guys.

Jereme Sylvain: Yep. Yeah. And I am certainly happy to answer those. Yeah. I think, you know, on your second I will answer your second question first. You hit it spot on. You know, the expectation was always a peak into Q3 in gross margin that was step down as you turned on Ireland, and that is exactly it. You know, underlying the performance in terms of just core performance underneath it, you would expect that to continue to come up, but you do have turning on a factory, and therefore, the cost of each individual product manufactured when you have a factory just turned on. It just it goes up significantly. And then that leverages over time.

The underlying question I think you are getting at is, Are you starting to see a manufacturing efficiencies? Are you starting to see 15-day? We are. it is just that I would say there is a little bit of that turning on Ireland. Go back to your first question in terms of then, you know, oil you know, there is a lot of things that you the way the way it kinda works here is as we purchase resins during these windows, you know, it takes a little time for the price changes in oil then to flow through into product, then to flow through into our p and l.

You know, we will buy the resins, and you use usually take just like you see at pump, it takes a little bit of time for that to flow through, and I would say, gasoline is much quicker than the flow through in resins. So we have bought in those event. We have made that product. That product gets put on the balance sheet, then it comes through in future periods. So you have seen some of it play through here in the second quarter. You will see still a little bit some of that play through here in the third quarter as we have purchased, capitalized, put on the balance sheet, amortized through.

So you know, I think, basically, what you would expect to see is the guidance we gave you last quarter about preparing for some of that headwind associated with the oil prices. About in line with expectations. So the raise is really on underlying performance improvements. On our lines, throughputs, etcetera, based on work we have done over the couple of quarters.

Operator: Our next question comes from the line of Issey Kirby with Redburn Atlantic. Your line is open.

Issie Kirby: Hey, guys. Thanks for taking my question. I wanted to ask about the Stello app redesign. I appreciate it early, but any feedback on that around engagement with the app? You also mentioned bringing some of these features over to the g 7 app eventually. Which features are you going to be looking at integrating? I am just wondering how you are thinking about app design particularly as you go after this, type 2 non instant population. Thanks.

Jacob Steven Leach: Yeah. Thanks for the question. The new app for Stello has been really well received by users. It a lot of it was based a lot of our redesign of the app, both the functionality as well as just the design aesthetic. Was based on user feedback. That we have collected over as Stello has been out for over a year, And so, you know, you look at reviews, you look at customer direct feedback, we got a lot of people using the product. And so you take all that feedback in, and so that is really what is what we built that new app on.

It is a completely new ground up rebuild for us, and so it is going to become our platform for future apps. And so the question around you know, moving those features to G7, it is actually about this concept of moving G7 to Stello. And a lot of the functionality there is gonna it is beneficial for all users, the nutrition, the coaching. Obviously, there is some different kind of aspects to it when you think about the alert system that g 7 requires. Right? Stella does not have that, but a big part of g 7 does is the protective features, the predictive alerts, the connectivity with automated insulin delivery, the SharePollow system.

So we will basically be bringing that on to the Stello platform app for those g 7 users. And so I think 1 of the exciting things here is that there is a lot of overlap with the user needs in these populations. And so we are using Stello as kind of the tip of the spear for innovation. But with the reception we are seeing from it, it really hits the mark in terms of advancing it.

And 1 of the things I am I am really excited about is people who tried Stella maybe in the past and did not get the insights that they were after, but they could not you know, did not see as much value in the real time data. This new Stello brings a lot more contextual insight And so, hopefully, that give that gives them the opportunity to try Stello again. And see if know, it meets their needs. I think we are gonna see a lot more people that are using it a little more consistently than we saw with the original Stello version.

Operator: And our final question comes from the line of Rich Newitter with Truist Securities. Your line is open.

Richard Newitter: Hi. Thanks for squeezing me in, and, Jereme, just 1 follow-up to Jon's question earlier. On gross margin. You started to get at it You are obviously seeing improved underlying trends in part related to 15 day I guess, when can we expect to see the peak impact from the 15-day compound? You know, is that if you are exiting at 50% this year into next, you know, does that mean, you know, 1 of the quarters in 2027 that will be the final kind of stepped-up run rate? I am just trying to get a sense for kind of when we might feel the max incremental impact of this ongoing tailwind. Thanks.

Jereme Sylvain: Yeah. You know, it is a it is a it is a good question. And I and I will and I will kinda point maybe a little bit back to Investor Day. Because, you know, we try to give some context to the cadence of the rollout. And so, you know, what we are talking about is U.S. 15-day G7. And, you know, obviously, we expect to expect it this year at, you know, approaching 50%. If you do an average over the course of the year, you are at 20-25%. Obviously, next year, if your starting point is approaching 50%, and you go up from there, that is a meaningful step up.

So certainly in next year, the step up's gonna be more. The other thing you have to be mindful of is there is a lot of things going on around the world today between Dexcom 1 plus and g 7 outside The US. Where that is also going to start to roll in. So it is actually gonna be a multiyear improvement as you as you start to think about sunsetting g 6, which is you know, obviously in process now. You know, as more and more folks move off of g 10 day to 15 day. And then, of course, g 8 is gonna be on a 15 day platform.

So what I would say is there is not really 1 quarter where it plateaus. It should be really a steady help. In terms of, you know, The US, which I think is kinda where your focus is, you know, obviously, the biggest the biggest improvements are gonna really start to accrue into next year just given the starting point, for the year is gonna be so much higher. But, nevertheless, I mean, look. it is all good. And I think as we move through, we will keep you apprised in terms of what that transition looks like.

We will also keep you apprised as in terms of our OUS markets, and as our OUS markets come and our D-1+ markets come on, I think all those are also really important too as you are building kind a global model. But, again, easiest way to look at the timelines is back to the Investor Day. I think you will see kind of the cadence of when we expect those to hit. The first o US 1, you can see we just got approval in Canada for 15 days. So we are gonna start knocking those down as well.

And so it is it is gonna be it is gonna be kind of a steady drip, I think, over time, but certainly a positive 1. And we hope everybody sees the positive quality results that we are seeing here in The US. We expect that.

Operator: And that concludes our question and answer session. I would now like to turn the call back over to Mr. Jake Leach for closing remarks.

Jacob Steven Leach: Thank you, operator. You know, as we wrap up today, I would like to take a moment to recognize the people who make DexCom what it is. Across our company, our employees show up every day with an unwavering commitment to the people we serve. Our results this quarter are a reflection of their passion and commitment to executing on our mission. We are proud of the momentum we created, but we believe we are still really early in the chapter of a much larger opportunity to transform how diabetes and metabolic health are managed around the world. The road ahead is very exciting, and we are confident in our strategy our innovation pipeline, and most importantly, in our people.

Thanks, everybody.

Operator: Ladies and gentlemen, this concludes today's call, and we thank you for your participation. You may now disconnect.