DexCom, Inc. Q2 FY2025 earnings call

Kevin Sayer noted that DexCom reported second quarter organic revenue growth of 15% compared to Q2 2024. The company saw strong growth in the type 2 non-insulin population due to expanded coverage, with type 2 non-insulin reimbursement going live with a third major PBM in the U.S., providing coverage for nearly 6 million type 2 non-insulin lives. Stelo app had over 400,000 downloads, and integrations like with Oura Ring were launched. The company is set to launch the 15-day G7 System in the second half of the year. DexCom restored inventory levels and rebuilt finished goods inventory through increased production and expedited shipping. Additionally, DexCom presented nearly 40 studies at the American Diabetes Association's sessions, including readouts of randomized controlled trials for gestational diabetes and type 2 non-insulin care.

Worldwide revenue for the second quarter of 2025 was $1.16 billion, an increase of 15% compared to the second quarter of 2024. U.S. revenue totaled $841 million, a 15% increase from the second quarter of 2024, while international revenue grew 16% to $316 million. Gross profit for the second quarter was $695.9 million, representing 60.1% of revenue.

Jereme Sylvain raised the revenue guidance to a range of $4.6 billion to $4.625 billion for the year, reflecting 14% to 15% growth. The company reaffirmed non-GAAP gross profit margin of approximately 62%, non-GAAP operating margin of approximately 21%, and adjusted EBITDA margin of approximately 30% for 2025.

DexCom faces exposure to CMS competitive bidding for CGM and pumps, with approximately 15% of its business in fee-for-service Medicare. The process is in an early stage, and the potential impact on pricing and the channel is still being evaluated.

Q: Travis Steed with Bank of America asked about the ability to raise full-year guidance and new starts in the non-insulin opportunity.

A: Jereme Sylvain responded that they saw strong starts in the non-insulin type 2 space, third PBM coverage in Q3, and confidence in the full-year guide due to first half performance.

Q: Larry Biegelsen with Wells Fargo asked about CMS competitive bidding for CGM and pumps, exposure to Medicare, and potential pricing impact.

A: Jake Leach and Jereme Sylvain responded that it's early, ~15% of business is fee-for-service Medicare, and focus is on no interruption to beneficiaries.

Q: Robbie Marcus with JPMorgan asked about margin progression through the year.

A: Jereme Sylvain discussed margin improvement, receiver recall impact, and expected sequential improvement in Q3 and Q4.

Q: Joanne Wuensch with Citibank asked about G8 timing and dual analyte sensors.

A: Jake Leach talked about G8 being in development, 50% smaller wearable, and focus on safety features.

Q: Matt Taylor with Jefferies asked about FDA progress and 15-day G7 launch.

A: Jake Leach mentioned FDA progress and 15-day G7 launch in H2 2025.

Q: Danielle Antalffy with UBS asked about competitive dynamics in type 1 patient population.

A: Kevin Sayer and Jake Leach discussed DexCom's head start with AID systems and continued innovation.

Q: David Roman with Goldman Sachs asked about utilization in type 2 non-insulin dependent users.

A: Jereme Sylvain talked about high utilization, features like Oura integration and meal logging driving utilization.

Q: Jayson Bedford with Raymond James asked about Stelo app downloads and user mix.

A: Jereme Sylvain and Kevin Sayer mentioned Stelo app downloads over 400k, guide still 2%-3%, and user mix shifting to health and wellness.

Q: Matthew O'Brien with Piper Sandler asked about back half guidance.

A: Jereme Sylvain stated they are bullish, committed to meeting guidance, and top end of guide passes through constant currency beat.

Q: Marie Thibault with BTIG asked about clinical trial work in type 2 non-insulin patient population.

A: Jake Leach discussed ongoing randomized controlled trial and real-world evidence registries.

Q: Issie Kirby with Redburn Atlantic asked about sales force productivity and prescriber base.

A: Jereme Sylvain talked about sales team productivity, learning and tweaking, and over 100k prescribers writing DexCom scripts.

Q: Steve Lichtman with Oppenheimer asked about nationwide warranty program for pharmacy customers.

A: Jereme Sylvain said it's financially indifferent, leverages existing technology, and is differentiated.

Q: Josh Jennings with TD Cowen asked about DME channel recovery.

A: Kevin Sayer discussed improved relationships with DME partners and importance for competitive bidding.

Q: Brandon Vazquez with William Blair asked about 15-day G7 warranty discussions.

A: Jereme Sylvain said negotiations are about monthly reimbursement, similar to previous models.

Q: Bill Plovanic with Canaccord Genuity asked about pregnancy market penetration and data.

A: Jake Leach talked about high pregnancy impact, updates to G7, and driving awareness for better birth outcomes