Good afternoon, welcome to the Beta Bionics second quarter 2026 earnings conference call. At this time, all participants are in listen only mode. After the speaker's presentation, there'll be a question and answer session, and instructions will follow at that time. As a reminder, please be advised that today's conference is being recorded. I would like to hand the conference over to Blake Beber, Head of Investor Relations. Good afternoon, thank you for joining Beta Bionics second quarter 2026 earnings call. With me on today's call are Chief Executive Officer, Sean Saint, and Chief Financial Officer, Stephen Feider. Both the replay of this call and the press release discussing our second quarter 2026 results will be available in the investor relations section of our website. Information recorded on this call speaks only as of today, July 29th, 2026. Therefore, if you are listening to a replay, any time-sensitive information may no longer be accurate. Also on our website is our supplemental second quarter 2026 earnings presentation and uploaded corporate presentation. We encourage you to refer to those documents for a summary of key metrics and business updates. Before we begin, we would like to remind you that today's discussion will include forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements reflect management's expectations about future events, our product pipeline, development timelines, financial performance and operating plans. Please refer to the cautionary statements in the press release we issued earlier today for a detailed explanation of the inherent limitations of such forward-looking statements. These documents contain and identify important factors that may cause actual results to differ materially from current expectations expressed or implied by our forward-looking statements. Please note that the forward-looking statements made during this call speak only as of today's date, we undertake no obligation to update them to reflect subsequent events or circumstances except to the extent required by law. With that, I'd now like to hand the call over to Sean. Thanks, Blake. Good afternoon, everyone, thank you for joining. Getting down to business, today we're going to cover our financial results for the second quarter, updated guidance for the full year 2026, some recent developments in our innovation pipeline. Starting with a brief overview of our Q2 performance, we delivered $32 million in net sales, which grew approximately 38% year-over-year. Q2 revenue growth was driven predominantly by growth in new patient starts, as well as our growing installed base of users who continued to access their monthly supplies for the iLet through the pharmacy channel and who we continue to retain at a high level. The percentage of new patient starts that were reimbursed through the pharmacy channel was a high 30s%, similar to the prior quarter. Our gross margin was 59%, expanding 524 basis points year-over-year. Before I hand the call to Stephen, I want to highlight a very important update for Q2. We published our real world data on our company website, and it's publicly available for all to see. This data is refreshed continuously and openly in near real time, without filters or fine print. If an iLet user has a provider-reported baseline A1C and at least two weeks of data uploaded to our cloud, they are represented on that dashboard, no exclusions applied. Too often in our industry, it has become the norm to publish real world data that doesn't show the whole picture. Selected populations, optimized settings, no baseline comparators, short time periods, strict exclusion criteria. These are all ways that real world data in our industry has become disconnected from the real world experience and unrepresentative of population health statistics. I don't want that point to be missed. Any dataset can be sub-segmented to show how well a system worked in a narrow set of users, and then marketed as what that system is capable of. However, Beta Bionics believes that all people with diabetes deserve great clinical outcomes with minimal work required. We're setting a new standard in data transparency. The data you see isn't what our system is capable of in a narrow set of users. The data you see is what our system in fact does across our broad population. We believe that this is the right way to share real world data because we're making it easier for healthcare providers, people with diabetes, payers, investors, and anyone else who's interested to evaluate our outcomes with confidence. We have received very positive feedback on the dashboard, and we view that feedback as a reflection of the positive experience that the iLet is delivering on the market today. With that, I'll hand the call over to Stephen to provide some additional detail on our second- quarter performance and our full-year 2026 guidance. Stephen? Thanks, Sean. Our revenue performance was mainly driven by new patient starts and the recurring revenue generated from our growing pharmacy install base. New patient starts increased more than 10%, but less than 20% compared to the prior quarter, consistent with our expectations. We continued to expand the insulin pump market as approximately 69% of our new patient starts came from people utilizing multiple daily injections prior to starting on iLet. A high 30s percentage of our new patient starts in Q2 accessed iLet through the pharmacy channel, consistent with our expectations, and we continue to retain our pharmacy installed base at a high level. Moving on to gross margin, Q2 gross margin was 59.0%, declining 45 basis points relative to the prior quarter and increasing 524 basis points relative to Q2 2025. Our gross margin exceeded our expectations, primarily driven by the high-margin recurring revenue generated from our pharmacy install base and a lower than expected warranty rate. Importantly, Q2 did not benefit from the kind of one-time tailwind that benefited Q1. We view 59% as a clean read on our underlying gross margin profile and a solid base for continued expansion. Total operating expenses in the second quarter were $44.5 million, an increase of 37% year-over-year. The increase in sales and marketing expense compared to both the prior quarter and the prior year was driven by the continued expansion of our field sales organization and increased marketing investments. In Q2, we achieved our previously stated goal of expanding by at least 20 sales territories in 2026. We expect these new sales territories to contribute more meaningfully to new patient starts in the second half of the year. On R&D expenses, the increase relative to the prior year is driven by the Mint and bi-hormonal projects. The increase in G&A expenses relative to the prior year is driven by continued efforts to scale the company in support of commercial growth and pipeline initiatives. As of June 30th, 2026, we have approximately $225 million in cash equivalent and short and long-term investments. We believe we are sufficiently capitalized to fund all of our key initiatives and remain well-positioned to generate free cash flow well ahead of historical diabetes peers. I'd now like to discuss our updated full-year 2026 guidance. We are reiterating our guidance for total revenue of $131 million- $136 million, as well as our expectation that 37%-39% of our new patient starts will be reimbursed through the pharmacy channel. On gross margin, we are raising our full year outlook to 58.5%-59.5%, up from our prior guidance of 57.5%-59.5%. This updated outlook reflects our strong first half performance, the underlying gross margin profile I discussed earlier, and our expectation for continued contributions from our pharmacy installed base, along with the increasing manufacturing scale throughout the year. As we set our guidance, we also considered the benefit from one-time tailwinds in Q1, while recognizing that neither Q1 nor Q2 were impacted by meaningful one-time headwinds. Although we do not currently expect any notable headwinds in the second half of the year, we believe it is prudent for our outlook to reflect a variety of potential outcomes. To briefly comment on operating expenses, we expect a modest increase in operating expenses in the second half of the year relative to the first half, driven primarily by higher sales and R&D expenses. The sales expense increase reflects the impact of the sales territories we added during the first half of 2026, which will carry their full cost in the second half of 2026. We do not expect to further expand our field sales organization during the second half of the year. Sean, back to you. Thanks, Stephen. To wrap up the call, I'll briefly touch on our remediation efforts regarding the FDA warning letter we received in late January and then highlight some key updates on our innovation pipeline. Regarding the warning letter, the company has made considerable progress in remediating the systems that we believe were central to the agency's concerns. As we have previously stated, the two major focus points of the warning letter, the complaints handling system, primarily our definition of reportable complaints, as well as our post-market surveillance systems, are both heavily revised and we believe will meet the agency's expectations. Turning to our pipeline. Starting with Mint, our patch pump in development. We recently updated our expected timeline to achieve full commercial launch by the end of the second quarter of 2027, subject to regulatory clearance by the FDA. This reflects the FDA's initial feedback on our Mint ACE Pump 510(k) submission, as well as the significant progress we've made in manufacturing readiness. We recently retired our manual manufacturing line, built out a new clean room, and now have our semi-automated production line operating in that clean room. This marks an important milestone in preparing for commercial scale. As our launch plan is built around these semi-automated lines, we believe we're well positioned to support anticipated demand at full launch and as adoption grows over time. We remain confident in our path to FDA clearance and in our ability to manufacture Mint at scale. We believe Mint has the potential to redefine the patch pump category and become the leading automated insulin delivery platform in the market, and we're excited by the progress we're making towards bringing it to people living with diabetes. We're excited to really begin having a more in-depth discussion as to what constitutes a good patch pump, or in other words, what users want in a patch pump. We think it's impossible to have this conversation with only one product on the market. It's only when two or more products exist that true comparisons can begin to happen. We're excited for Mint's potential to thrive in that conversation, given our confidence in the architectural decisions that we've made, including the two-part design, and importantly, the steel cannula. For our bi-hormonal system and development, in Q1, we initiated a phase IIa feasibility trial to stress test and iterate the system. During that trial, we identified two key opportunities to improve the system, one focusing on the glucagon asset's excipient profile, and the other focusing on the dosing algorithms. Beta Bionics is in a unique position here. We're defining what bi-hormonal glucose management is all about. Is it about greater time in range or complete freedom from hypoglycemia, or somewhere in between? It's this conversation that we are exploring, which is our responsibility as the developers of the fundamental technology. We expect these iterations to take less than one year prior to initiating additional phase IIa trials. We continue to believe the bi-hormonal system has the potential to be a transformative innovation for people with diabetes, which is why our commitment to the program has never been stronger. On our innovation pipeline, I want to cover two opportunities where the iLet is already being used today by providers and patients, albeit off-label. The first opportunity is in type 2 diabetes, where we estimate that greater than 30% of our new patient starts in Q2 were type 2. We recently gained alignment with the FDA in a pivotal trial design that may enable indication expansion for the iLet to include adults with type 2 diabetes. The pivotal trial is being conducted on real-world iLet users with type 2 diabetes, and we initiated enrollment in July. We ultimately expect to expand iLet indications for use to include adults with type 2 diabetes in the U.S. around midyear 2027, subject to regulatory clearance by the FDA. The second opportunity I want to highlight is pursuing a fully closed loop indication. I've discussed in the past that a meaningful proportion of iLet users choose to operate the device off-label in a fully closed loop manner, meaning they announce less than one meal per day on average. We've highlighted the clinical outcomes associated with use of the iLet in a fully closed loop manner, and those are available in our most recent corporate presentation on the investor relations site. In the coming quarters, we intend to initiate a fully closed loop pivotal trial in type 1 and type 2 diabetes and pursue the indication formally with the FDA. However, we are not committing to a specific timeline for commercialization at this time. I want to leave you all with one key message from today's call. We believe we're building the foundation for a category leading diabetes technology company. Our commercial business continues to gain momentum. The iLet is resonating with customers and delivering outstanding clinical outcomes. Our pharmacy strategy is working, and with our expanded field organization, we expect to continue increasing awareness and adoption. Looking ahead, the opportunity becomes even more compelling. We expect Mint to launch in less than a year, pairing a differentiated patch pump with what we believe is the most advanced insulin dosing algorithm available. Around midyear 2027, we expect to expand the algorithm's indication for use to adults with type 2 diabetes. Beyond that, we plan to raise the bar with our bi-hormonal system. We believe the years ahead represent the most exciting chapter in Beta Bionics' history, and the team is committed to bringing these life-changing solutions to people with diabetes. I want to close today with a heartfelt thank you to our team. As you've seen in today's call, we have a lot of initiatives going on as a company. We believe we have a category leading product pipeline with a fraction of the resources. Said another way, we believe we're doing more with less, and that is all about our team. I just want to remind each of them that I appreciate it, as does the broader community of people with diabetes. You guys rock. With that, I'd like to thank you all for joining today's call, which we'll now open for Q&A. Thank you. At this time, we'll conduct a question- and- answer session. As a reminder to ask the question, you will need to press star one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. Please stand by while we compile the Q&A roster. Our first question comes from the line of Rich Newitter of Truist Securities. Your line is now open. Hey, it's Felipe on for Rich. Just starting with the live portal data. That's a huge figure that you're maybe the first one to actually put live patient data up online for providers to see. I guess, what are you doing to make sure that prescribing physicians are seeing that data? Just one follow-up. Yeah. Great question, Felipe. We are absolutely telling the healthcare provider community about this. They've always been able to see their own clinics in our healthcare provider portal. They've had access to this for a while. In this new portal on the website, you can see the entirety of our user base. Absolutely, we're showing them that with our field sales team. It's absolutely as much about users and others being able to come and take a look at that data there, people who don't have access to our healthcare provider portal. I'd actually say it's primarily for different audiences. Great. On Mint, some of your competitors have nitpicked the steel cannula. I guess, can you remind us what percent of patients on durable pumps, or if you have an idea of what percent of patients on durable pumps are using steel cannulas versus soft cannulas and why that maybe isn't really a problem for a patch pump? Thanks for taking the questions. That's a good question. I do have an idea of what that mix is with durable pumps. For Beta Bionics, that mix, and I'm not going to give specifics, but I will say for Beta Bionics, that mix is quite a bit more heavy toward the steel cannula side of things. We believe in the durability of those systems. We believe in the comfort of those systems. I think if you go back and look at the evolution into "soft cannulas," they weren't about comfort. I think there's an underlying expectation that steel must be more uncomfortable. The reality is that a steel cannula is a much smaller system. It's a much smaller diameter system. In our case, we're looking at the size of an insulin needle. Like a traditional insulin pen needle. What I would encourage you to do is look at somebody taking an injection with an insulin pen and look at the reaction versus a person inserting a "soft cannula" of any description, whether it be an infusion set or one of the patch pumps that may be available, and then tell me what the reaction was. There's a lot of things that go into these decisions, but we are firmly convinced that our system is going to be an advantage system from a user experience. I want to be real careful here because I don't want to make any claims. That being said, we have all the belief in the world of it, and we look forward to being able to talk in more detail about that. As I said on the prepared remarks, having that head-to-head comparison, right? Right now, people are criticizing this decision of ours. What we look forward to is a day when somebody has tried the competition, tried us, and then we just ask them, "Which one did you prefer?" We know where the answer lies because, newsflash, we've used both. Waiting for our next question. Our next question comes from the line of Matthew O'Brien of Piper Sandler. Your line is now open. Good afternoon. Thanks for taking the questions. Just for starters, Sean, or Stephen, on the pharmacy side of things here in Q2, I know the new patient start numbers were good through the pharmacy, but the supplies number was a little bit lighter than expected. Can you talk about that dynamic? What I'm really trying to get at is during the back half of the year, should we expect more of the revenue coming from DME for the full year guide? Then maybe starting to flip more aggressively towards the supply side as we head into 2027. Then I do have a follow-up. This is Stephen. Hey, Matt. The softness that you're seeing in pharmacy supply revenue in the second quarter is driven by what I call a stocking dynamic from our pharmacy customers. What I mean by this is that our pharmacy customers ended the second quarter with less pharmacy supply inventory on their shelf than they did at the end of Q1. The patient demand for our pharmacy supplies was consistent with our expectation. The retention on the product is still strong. The new patient starts going through that channel were in line with our expectations. The actual revenue can be pretty dramatically impacted based on ordering patterns from the pharmacy customers, and that's what drove that dynamic. Nothing notable about the actual business and performance from patients. Okay. Appreciate that. Then, Sean, one of your competitors that's coming into the patch market has kind of put a bogey out there of being able to supply about 10,000 patients when they launch. Is that a guidepost we can use for Beta, or do you think we should anchor to something less than that or even more than that? Thank you. Yeah, I'm not going to comment at this time on our actual expectations or specifics to our supply or expected supply. Yeah, sorry, it's just something we haven't commented on as of yet. What we can reiterate that we've said in the past is we have our own expectations by the end of Q2 2027 for Mint, in terms of what demand will be, and we are anticipating the ability to be able to fulfill that level of demand. Embedded in our full commercial launch guidance is, again, our expectation of demand and feeling confident that we will be able to fill that. In the event that demand massively exceeds our expectations, then we could be wrong. The commercial launch that we're describing is not slowly dripping this product into the market. At that time, it's the full launch. Understood. Thank you. Thank you. One moment for our next question. Our next question comes from the line of Patrick Wood of UBS. Your line is now open. Beautiful. Thanks so much for the questions, guys. I'll keep it to one. You obviously get all this clinical data, and see a ton of it, and I'm sure people are appreciative of you putting it out there. I'm curious, particularly for the type 2 patients, have you been surprised by anything in relation to how they've been using iLet? Whether it's units, or having more patients who are not exactly basal, but let's say, higher up the acuity curve rather than somebody using a huge amount of units further down. Is there anything you could learn from the data in that type 2 cohort that's surprised you at all in terms of how patients are using it? I hope the question's clear. Let me clarify. In terms of how they're using it, are you referring primarily to meal announcements? Which, of course, for us, is essentially the only interaction that you have. But you did refer to units. I'm not sure if you mean units per day. Yeah, can you clarify, please? Yeah, just total amounts of units used. You can kind of infer, I guess. Obviously, type 2 being essentially a progressive condition, how far down the curve they are. Does that make any sense? Oh, yeah. I think what you're trying to get at is there's, I think, an expectation of type 2 that the farther down the curve you are, the more insulin you use. You're probably trying to get an idea of whether or not we're getting the early stage or late stage type 2. You got it. Got it. It's a great question. I don't have off the top of my head average units per day in our type 2 population. What I can say is that the iLet, we've made a number of design architecture decisions on the product, one of which is our cartridge, which is about 180 units. That decision has been acceptable to our user base, of course. That means sort of one of two things. One, either the average units per day is comparatively low, or it means that despite the heavier usage that you're used to in seeing, our cartridge change procedure is quite acceptable in that group. With all that being said, I have an idea of it, and it's not insane. I don't want to comment specifically. I find it more interesting to talk about our meal announcement behavior on iLet users than I do total daily dose. Totally. Okay. Thanks for taking the question, guys. Patrick, congrats on the new gig. Oh, yeah. Really nice to have you covered. Appreciate it. Glad to be here. Yeah. Thanks, guys. Thank you. One moment for our next question. Our next question comes from the line of Jordan Bernstein of Stifel. Your line is now open. Great. Thanks, yeah. Jordan on for John here. Just thinking about as the year progresses on new customer starts, nice beat here relative to our model in 2Q. As we think over to 3Q, should we think about that being a step up from 2Q, but maybe a steeper slope, 3Q to 4Q? Any color there would be much appreciated. Hey, Jordan. Yes, Q3 will be a step up from Q2. The specifics of where new patient starts will end up or what's embedded in the guidance in terms of new patient starts relative to prior quarters, I don't want to comment on. Yes, we're expecting a step up. We added more than 20 new territories in the first half of the year. Most of those territories start generating demand for the business in roughly one quarter. Again, you'd expect that to make an impact in the third and fourth quarter. Makes sense. Then my follow-up is just on that pharmacy dynamic that you were discussing before on the stocking, and seems to be some less pharmacy supply on the shelf. Is that something that you'd call industry-wide or company-specific? Just kind of in the context of a new competitor entering that channel here throughout the year, trying to figure out if you could provide some more color on that. Thanks. It's very company-specific, is the short answer. If you even look at the history of our pharmacy revenue and as it relates specifically to supply, the pharmacy stocking dynamic has fluctuated from quarter to quarter, sometimes semi-dramatically, and it's not fully predictable. So we generally comment proactively if there's a major impact to pharmacy or from stocking. Point is, you could have another company selling something similar, one of our competitors selling something similar to similar customers, and our performance wouldn't necessarily dictate what their particular performance was in terms of stocking in the exact same quarter. So it's very company-specific. Super helpful. Thank you. Yeah. Thank you. One moment for our next question. Our next question comes from the line of Mike Kratky of Leerink Partners. Your line is now open. Hi, everyone. Thanks for taking our questions. Can you talk about what ultimately prompted your strategic decision to pursue the pivotal trial of iLet in type 2? It seems like you've been getting good traction there without it. Then just as a follow-up, can you confirm whether we should expect Mint to also be commercially available for type 2 as part of that mid 2027 expected timeline? Yeah. Great question, Mike. We've been commenting for a number of quarters that we had type 2 plans. We just weren't really commenting on them. Exactly to your point, we have had quite a bit of success in the type 2 space, and for that reason, we didn't feel it was the right thing to do to go and run a traditional trial in that space with the expense and the timeline and everything else when we had already seen the outcomes that we were getting in type 2. There was a process of working with the agency to kind of compromise on the right data that was required for iLet specifically in order to get that indication. As we commented in prepared remarks, we did come to an agreement on that. We are looking at our current iLet users, but enrolling them in a trial. That's really what that was about. Why did we do it at any level? Because we're having a ton of success, but we'd love more. Certainly being able to comment on that and sell it publicly is something that we'd like to be able to do. We've achieved the level of success we have without doing that. It was the right thing to do for us, and it's a pretty modest investment considering how we've chosen to do it. Mint and type 2. Yeah, Mint with type 2. Let me make sure I don't get this wrong. Mint itself, the submission on Mint is an ACE pump submission. The pump side of things have historically been approved for people with insulin-dependent diabetes mellitus, right? It's the algorithms that have been specific to type 1 or type 2. To the extent we get a type 2 indication on our algorithm, that algorithm will be paired with Mint, and yes, Mint at that time would carry a type 2 indication as well. The Mint system writ large, meaning Mint hardware with the iLet algorithm. Understood. Thanks very much. Thank you. One moment for our next question. Our next question comes from the line of Mathew Blackman of TD Cowen. Your line is now open. Good afternoon, everybody. Can you hear me okay? Yeah, we got you, Matt. All right. Great, guys. Maybe Sean and Stephen, just from a high level, how did the quarter play out on pumps shipped? I know you said in line with expectations, but I think you probably appreciate there's a lot of background noise in med tech and utilization with coverage changes and perhaps macro headwinds. Just wondering, are you seeing or hearing any of this in the field? Is it bleeding into diabetes at all? I've got one follow-up. Yeah. I'll just reiterate that we did think the quarter's new patient starts performance and revenue performance in line with expectations. There was nothing that we saw about Q2 market dynamics-wise or traction with our product that changed our guidance. I suppose in that respect, everything was, again, consistent with what we expected, and that includes anything related to public policy that may be a perceived headwind. We're just not seeing any of that. Okay. I appreciate that. Stephen, I'm going to push you a little bit, reflecting on your scripted comments, but also, in response to one of the questions asked, as we think about the 3 Q and 4 Q cadence, and I appreciate you don't guide quarterly, but given that you are onboarding and have onboarded new reps, and I think you said it takes about a quarter for them to ramp to productivity. As we think about just the pump ship cadence, is it potentially going to be a little bit more heavily weighted to the fourth quarter than prior years? No, last year is still a good proxy for how we think about the shape of the back half of the year? Thank you. Yeah. Sorry, what. You want me to go at it again? No. Sean just clarified the question for me. Yeah. Shoot, now I can't remember. Can you restate the question, Matt? Yeah, sorry about that. I'll give it another shot. I think historically-- Recently, this year, you've told us to use 2025 as a sort of a guidepost from a cadence standpoint, percent pumps shipped per quarter or revenue per quarter. I know you don't guide quarterly for the third and the fourth quarter. This year's a little bit different. You've onboarded a bunch of new territories. It takes a little bit of time for them to ramp to productivity. My question is, as we think about the shape of the third and fourth quarter for 2026, is 2025 still the right guidepost to use in terms of how we should think about the rest of the year playing out? Maybe it's a little bit more fourth quarter-weighted, just given the net dynamics of bringing on an incremental sales force, and driving productivity gains as they work through the back half of the year. Got you. Yeah, the shape that we saw in 2025, generally consistent with what we're expecting in 2026, with there are two primary factors driving that. One is that the sales territories that we added in the first half of 2026, we expect, and history would suggest this for us, or validate this, I should say, that the territories will start to get more productive in their second, third, and quarters beyond. Meaning, the fourth quarter, they've had a longer tenure. They've been at Beta Bionics for longer, and thus we would expect them to be more productive. In addition, fourth quarter tends to be seasonally more favorable relative to Q3. That seasonality's muted for reasons that we've explained in the past, driven by the pharmacy dynamic. Those are kind of the contributing factors, I would say, for how we would see the new patient starts growth in the back half of the year. Okay. Thank you very much, guys. Yep. Sorry to ask you to clarify there. Thanks, Matt. Sorry. Thank you. One moment for our next question. Our next question comes from the line of Jeff Johnson of RW Baird. Your line is now open. Hey, guys. Thanks for taking the question. This is Maggie on for Jeff. I was wondering what you guys are seeing on the competitive front at present. One newer company that has come to market with a fairly sizable sales force just in the past 6-12 months, another company that is newly independent and has made improvements on their own front. Are you guys seeing any sort of pause from physicians, anything from your field sales reps that it's getting harder to win across accounts? Thanks for taking the question. Yeah, great question, Maggie. No, I don't really think so. I think that, we're obviously aware of the two competitors that you mentioned or alluded to. In one case, actually I would say in both cases, they represent pretty different products to what Beta Bionics is offering. I think this is a really important point that I don't want to be missed. We've been continuing to educate the market on what iLet is over the last several years, it does represent a highly differentiated offering as compared to what some of those other companies are doing, especially the ones that are more on the side where settings are important. You can see that in some of the sub-segmented data that I referred to in my prepared remarks. If you're talking quite a bit about your outcomes and the settings required to get that's exactly what we're not doing. That's why, we see Beta Bionics as a sort of a population health tool, something everybody can get or most people can get a good result with. Those other products you mentioned are a little bit the other end of that spectrum. They require quite a bit of aggressive interaction. So said another way, the target iLet patient is not necessarily a person who would really be striving for a system like that in general. We also think that over time, though, people who actually think they want that kind of system will ultimately realize they don't love managing their diabetes and pivot more our way. That's a long way of answering the question and saying, no, we're not really seeing. They're not pulling our target patient away from us in any way. Not seeing it. Thanks. Thank you. One moment for our next question. Our next question comes to the line of Michael Polark of Wolfe Research. Your line is now open. Hey, good afternoon. I'm curious for color on the 20 new sales territories. Are these folks opening portions of the country that previously were not open for iLet, or are you splitting geographies, going deeper in key places? What's those 20, how are they focused, and what is similar or different to the mandate for the existing rep base? Good question, Mike. The way I would describe it is this. Beta Bionics really hasn't had much what we call white space, meaning areas without a sales rep at all, for quite a while at this point. From that perspective, all of these new territories do represent territory cuts. However, it is also true that if you're a rep with a large territory, especially geographically large territory, you're going to have a very hard time getting to some of your target accounts, right? You're going to be focused more in the large city nearest your home, for example. From that perspective, this will ultimately result in stores that never had a rep visit them, starting to visit them at this point, which looks more like a new territory. Where that overlaps is when you cut a territory to the extent that a particular account that was previously writing is now in a new territory's area, that rep is incentivized to go visit that account first. They were previously writing. They want to shore up that account. They want to make sure they don't stop. That can be a disruptive experience for that account, and we want to make sure we don't provide that. They're going to start there, and they're going to then expand into sort of new store sales, if you will. It falls somewhere in between just a complete territory cut, where the previous territory was completely visited, which wasn't true for us, and a net new territory, which it really isn't there either. Hopefully, that's helpful. Follow up on that, and then I have my proper follow-up. Has the splitting happened in 2Q, or is that a 2H project? It's happened in 2Q or in the first half of the year. The follow-up, maybe for Stephen, in your prepared remarks, you mentioned lower warranty expense was one of the gross margin good guys. I just want to understand that dynamic. Is there something to read there positively about retention? Or that is an overread? I would welcome any further color on that mention. Thank you. The reason warranty expense has gone down, or the warranty rate has gone down, is we made the screen stronger. When we first launched the iLet, it was shipping with a version of a certain screen strength, and then we have since upgraded the screen to what is called Gorilla Glass 3, to get technical. Now the screen is breaking far less frequently. So that is the impact on gross margin. A second-order impact of that could certainly be retention, although that is a little hard to measure. Meaning like, the screen is breaking less often, patients are happier. How less often are they attriting? I do not know exactly what that metric is. But yes, absolutely. It is a better patient experience if the iLet is breaking less frequently, and that did have a favorable impact on gross margin. Thank you. Thank you. One moment for next question. Our next question comes to the line of Stephanie Elghazi of Bank of America Securities. Your line is now open. Hi. Thanks for taking the question. I wanted to follow up on the new patient starts this quarter. It looks like the quarter-over-quarter growth is mid-teens at the midpoint that you shared is below the typical historical trend, Q1 to Q2. Is there anything to call out there, or is it just hard to call history a trend given the initial launch period? Well, I'm not sure I exactly agree with your math necessarily. You're calling this particular quarter down relative to a trend in the past. Again, this particular new patient start quarter met our expectations, and, I guess I'll just leave it there. Got it. Then on the Mint manufacturing capacity and being able to meet demand at the launch, just any progress you can share on the confidence you have driving that and just where you're at now with getting ready for that capacity and what may be left to do? Yeah. Definitely understand what you're trying to get at. I think that, in general, we've provided a number of updates lately that are the reasons for our upgraded confidence here. Obviously, we talked about the submission of our form 10-K. We talked about our clean room construction. We've talked about our semi-automated lines being up and running, so much so that we've retired our manual lines. In the past, you've heard me talk about our progression from manual to semi-automated. That would be our launch configuration, followed by fully automated lines that would come on in the future. Those are a very long lead item. Without getting into the exact details of our production rates and our yields and everything else, I'll just say that, trying to give a little bit of color today on where we are, obviously we see the underlying numbers, based on the timelines to launch here, we're feeling good. We're seeing what we need to see at this stage. This is not our first product launch ever, we're seeing we need to see to be able to continue to make that statement. Hopefully, that's helpful. Thank you. One moment for our next question. Our next question comes to the line of Jeffrey Cohen of Ladenburg Thalmann & Co. Your line is now open. Hey, good afternoon. Thanks for taking our questions, Sean and Stephen. Just one follow-up on manufacturing. Could you hypothesize with us regarding margins and how you may think that plays out on Mint and how that might compare to iLet with the increased efficiency and the automation? Yeah. Just so I make sure I don't answer the wrong question, Jeff, you're asking about Mint gross margin profile after we launch it? Yeah. What you would anticipate. Yes. Got you. Thank you. Without giving you a specific number for gross margin that we're targeting or an outlook that we're targeting, I'll just say this, manufacturing cost was very much embedded in the design of Mint. Meaning the ability to manufacture, and the corresponding cost. Like you mean the reliability of it, yields and the corresponding cost of the actual device itself. That's why we've done the two-part architecture where we have a reusable portion of the device, which is replaced every two years, and that's where all the expensive components live. The actual component of Mint that gets thrown away every time a patient changes his or her insulin, is actually quite inexpensive in terms of the bill of materials. All it is batteries, cannula, the syringe and the adhesive, with of course a few other components. All again, all the expensive components in the reusable portion. At any level of real scale, meaning millions of parts manufactured or millions of Mints manufactured annually, our gross margin profile on Mint, we believe will be advantaged relative to the patch pump competition. Again, that's because of our design. That gives you some directional sense as to what kind of gross margin profile we're talking about. Also embedded in that too is the CapEx associated with getting the Mint production capacity to the level that's required. It's reasonably CapEx light, especially the first phase of Mint's manufacturing development, where it's semi-automated. That is very CapEx light. There's more labor cost, of course, that's the trade-off. As Mint capacity grows in the future and we move to full automation, more CapEx, but still reasonably light relative to numbers you're familiar with from our competition and then labor cost, it drops out of it. Hear from all this, that cost is very much at the forefront of all decision making. User experience being number one, but cost right there, in the Mint design. That's part of how we're going to be building a profitable, market leading company. Thank you. One moment for our next question. Our next question comes to the line of Richard Newitter of Truist Securities. Your line is now open. Hey, guys. Sorry, it's Felipe. Just one follow-up. This is like the second or third quarter that multiple durable pump players are moving into the pharmacy channel. I'm just wondering if you could give us an update. Are you seeing any changes? You're the furthest along of those players. Are you seeing any changes in your conversations with the PBMs? Are PBMs more open to coverage? I guess, like what kind of changes are you seeing? Yeah, great question. I think that multiple players moving in here definitely helps everybody. The conversations become more normal at some level. Nobody wants to do anything out of the ordinary, right? The more of us do it, the more it's going to be easier for those to follow. We did pave this road a little bit, at least on the tube pump side. That's okay. Yeah, we're happy to have everybody. I think that ultimately the pharmacy channel benefits people with diabetes and yes, it is getting a little easier to do, as we do it and as we provide a roadmap to have it done. Are the conversations evolving? Mildly. I guess there's just a little bit more understanding of what it is that we're doing. Beyond that, no. There's no seismic shift here. Yeah, I think maybe one other point I'd add is we've always desired to have the iLet reimbursed in the pharmacy channel as the predominant reimbursement strategy in the long term. I think what actually helps that strategy is other tubed insulin pump companies moving towards pharmacy. In order for that vision that I've just described to be fulfilled, I don't think it can just be Beta Bionics being the only company that's prioritizing pharmacy or preferring pharmacy as their reimbursement path. Yes, maybe it creates, in the short run, a small bit of negotiation over time with the PBMs and the decision makers at the PBMs because there's more pump companies. Look, we like our differentiation and our ability to win those discussions. In the long term, this is absolutely healthy for a company like us that wants our product to be reimbursed in pharmacy. That goes for iLet and Mint, of course. Thank you. One moment for our next question. Our next question comes from the line of Frank Takkinen of Lake Street Capital Markets. Your line is now open. Great. Thank you. I'll follow up on the pharmacy channel questions in slightly different context. I know we've talked about in the past one of the gating factors to getting Mint broadly adopted and having that unconstrained launch is really the pharmacy channel contracting. Can you remind us and walk us through how that process will go once you have that approval or if you need the approval prior to those contracting discussions? How should we think about that kind of impacting the launch cadence? Hey, Frank. Yeah, look, iLet's position with pharmacy PBMs, meaning the relationships we have, the contracts that we have, then the underlying health plans, is absolutely the runway that will help us get coverage for Mint significantly faster than if we didn't already have iLet on the market. In some cases, these are the exact same agreements, with the PBMs, with the underlying plans, with an amendment to add a new NDC code. In other cases, it's a new agreement. The point is we've already convinced chief medical officers or the decision-makers at these respective accounts of the merits of iLet clinically and the users and what their experience is on the device. There's no new sales process from zero. All we have to do is convince them that what our hardware is, why it's differentiated, why they should cover it, what the predicate is. I can't really understate how important that is for us to be able to have coverage that we feel good about at launch. I guess CFO answer here. The other side of this is what I don't want you to hear is that we will have the level of pharmacy coverage that our patch pump competitor will have on day one. That will take us time, and I think it's actually really helpful that that road has already been paved, that we can follow. We will not, right out of the gate, have the same level of coverage that they have. I think, look, I'm just going to take a quick moment to make the point how set up Beta Bionics is for Mint. How well-positioned the company is and this plan that we've laid out years ago, how well it's playing out. Pharmacy coverage is only one part of that. You think a company like us with a proven algorithm, proven in terms of clinically, that has confidence from healthcare providers, has confidence from patients, truly differentiated in terms of what its value proposition is. We talked about pharmacy reimbursement and how we've already become experts in that particular area that matters. We have a commercial infrastructure in place, a brand that's well-recognized. This is all exactly how you would draw up a launch for a product like Mint. If you can't tell, we're excited about it and I guess Frank, just coming back to the pharmacy point, I appreciate you asking. Small follow-up. Just to be very specific answer your question, Frank, and I love Stephen's answer there. In answer to your specific question, do we need approval prior to signing these agreements? The answer is sometimes. We don't need it to go out and start doing the work. Part of that work, as Stephen said, was laid by iLet. Additional work is being done now. I'll leave it at that. Okay. That's helpful. Just a big picture question, and not sure if you'll be comfortable commenting on this or not, but I'll try. How should we think about the leverage profile coming back into the model? Obviously, investment is first and foremost today, and we're seeing OpEx going to grow at about the same rate as sales, if not sometimes a little bit faster. When should we see that line cross where that revenue growth starts to really outpace the OpEx investment? I love the question. As you know, I haven't communicated a specific number for where we start generating free cash flow. I'm not going to today. Look, what's become the expectation for diabetes med tech companies in particular, in terms of what revenue scale or what revenue is required in order for you to start generating free cash, don't use that when you're thinking about Beta Bionics. We're in a different universe in terms of what our expectations are for ourself, and what revenue level is required. I guess just also hear that profit and free cash flow generation and returning that to shareholders is just a core principle that in Sean and I in building companies. Yeah, I guess you're just going to have to take my word for it and look at our history and what we've done. I won't pick a particular level where we'll start generating free cash, at least for the moment. Fair enough. That's helpful. Thank you. Thank you. I'm showing no further questions at this time. I'll now turn it back to Sean Saint for closing remarks. I'll just say appreciate everybody's time and understanding today and willingness to dig in. We're excited and hope everybody sees that in our comments today. With that, I'll close it. Thank you for your participation in today's conference. This concludes the program. You may now disconnect.