Welcome to the Dexcom second quarter 2021 earnings release conference call. My name is Daryl, and I'll be your operator for today's call. At this time, all participants are in a listen-only mode. Later, we will conduct a question and answer session. During the question and answer session, if you have a question, please press star then one on your touchtone phone. Please note that this conference is being recorded. I will now turn the call over to Sean Christensen. You may begin. Thank you, operator, and welcome to Dexcom's second quarter 2021 earnings call. Our agenda this afternoon includes comments on the company's recent performance and strategic initiatives from Kevin Sayer, Dexcom's Chairman, President, and CEO, Jereme Sylvain, our Chief Financial Officer, and finally an update from Quentin Blackford, our Chief Operating Officer. Following our prepared remarks, we will open the call up for your questions. At that time, we ask analysts to limit themselves to one question so we can provide an opportunity for everyone participating today. Please note that there are also slides available related to our second quarter performance on the Dexcom investor relations website on the Events and Presentations page. With that, let's review our Safe Harbor statement. Some of the statements we will make in 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. All forward-looking statements included in this presentation are made as of the date hereof based on information currently available to Dexcom and are subject to various risks and uncertainties, and actual results could differ materially from those anticipated in the forward-looking statements. The factors that could cause actual results to differ materially from those expressed or implied by any of these forward-looking statements are detailed in 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 such forward-looking statements after the date of this presentation or to conform these forward-looking statements to actual results. Additionally, during the call, we will discuss certain financial measures that have not been prepared in accordance with GAAP with respect to our non-GAAP and cash-based results. Unless otherwise noted, all references to financial metrics are presented on a non-GAAP basis. The presentation of this additional information should not be considered in isolation or as a substitute for results or superior to results prepared in accordance with GAAP. Please refer to our tables in our earnings release and the slides accompanying our second quarter earnings presentation for a reconciliation of these measures to their most directly comparable GAAP financial measure. Now, I will turn it over to Kevin. Thank you, Sean, and thank you everyone for joining us. Today, we reported great results for our second quarter with 32% revenue growth for the quarter compared to the second quarter of 2020, as well as solid execution on our key strategic initiatives that we will discuss throughout the call today. The $143 million in absolute dollar revenue growth compared to the second quarter in 2020 represents the highest quarterly increase in Dexcom's history. We continue to believe that we are early in our story, with the potential to drive a far greater impact on global health. Our growth performance is closely related to the progress we've made to advance access on our CGM systems for people with diabetes. Because there is often so much misinformation spread about access to Dexcom CGM in the field or the cost of our products for people with diabetes, let me point out several key points that our investors, clinicians, and current and potential customers should know. We've advanced pharmacy access in the U.S., where more than 70% of our commercial customers have a monthly out-of-pocket cost of less than $60 per month, and nearly one-third of our customers have zero out-of-pocket cost for their G6 sensors. According to IQVIA, this is less than the comparable out-of-pocket cost for our nearest competitor. The latest research from diabetes market research firm Sea Growth Partners confirms our conclusion, with Dexcom having the lowest customer co-pays of the three largest CGM suppliers in the U.S. for customers on intensive insulin therapy. We've significantly expanded coverage for people with intensively managed type 2 diabetes, with the overwhelming majority of these patients now having coverage for Dexcom CGM in the U.S. We continue to advocate for equitable access to our CGM supplies for populations that are often underserved. As of July 2021, there are now 43 state Medicaid programs providing coverage for Dexcom CGM, including a growing number of states providing access through the pharmacy channel for both type 1 and type 2 intensive users. We are building even more on those advocacy efforts in collaboration with several key nonprofit organizations that support the diabetes community. In June, we launched the Global Movement for Time in Range to broaden awareness of time in range and its benefits for people with diabetes and their healthcare providers. We hope that this collaboration effort will lead to future solutions for improved CGM access. Our teams have taken a leading role to drive the removal of administrative barriers that prevent people with diabetes from accessing the benefits of real-time CGM. Along these lines, we are pleased to see the update from CMS in the second quarter to remove the requirement of at least four daily finger sticks for Medicare customers. This will simplify the CGM onboarding process for both customers and clinicians. We've also made solid progress internationally, building from our position of operational strength to advocate for broader reimbursement for G6. This initiative is moving forward according to plan, with several geographies publicly announcing enhancements to their coverage of Dexcom CGM in the second quarter. Despite these developments, a majority of people on mealtime insulin continue to manage their diabetes with finger sticks. Even in the U.S., a leader in CGM adoption, we continue to believe that the type 1 market remains less than 50% penetrated and the type 2 intensive market is less than 25% penetrated. There remains a great opportunity ahead of us, even in the markets that we currently serve. At the ATTD and ADA industry conferences in June, we presented exciting research affirming the benefits of our product platform, including the ALERTT1 trial. This randomized controlled trial was simultaneously published in The Lancet, showing superior health outcomes associated with use of Dexcom CGM relative to our nearest competitor's flash glucose monitor. These conferences also featured several presentations on the use of CGM for people with type 2 diabetes, including those not using mealtime insulin, as well as use in women who are pregnant, use in a hospital setting, and even conclusions applicable to health and wellness using CGM data. Perhaps the most significant of these presentations was the long-awaited readout of our MOBILE trial, which was also published in the Journal of the American Medical Association. MOBILE was another rigorous randomized controlled trial assessing the value of Dexcom CGM compared to the current standard of care, finger sticks, for people with type 2 diabetes treated with basal insulin. Importantly, the study looked at a diverse user base representative of the U.S. population, and it assessed these people in the primary care clinical environments where they are traditionally served. What did we see? We saw clinically significant A1C reductions for users of our Dexcom CGM systems. Perhaps even more telling, we saw a 16% time in range increase for the CGM cohort, which is four additional hours per day spent in the target glucose range. These were results produced with Dexcom CGM and Dexcom software. We designed the trial with the goal of changing the standard of care for these basal insulin users, a group that we believe includes between 3 million and million people in the U.S. alone. With these results, we feel that MOBILE and Dexcom have the potential to do just that, and our teams look forward to driving better awareness and access based on the study outcomes and the JAMA publication. We also made great progress in the second quarter to advance the clinical and regulatory pathway for our next generation G7 CGM system. At ATTD in June, we provided an update on the performance of G7 drawn from our recent clinical trials. Based on the data shown, we expect that G7 will continue the excellent clinical and real-world performance and reliability that we have established with our G6 brand. It will do so with several factors that we believe will enhance our customer experience, including a fully disposable sensor and transmitter, a redesigned app experience, and a market-leading 30-minute warm-up period. Our G7 continues to progress according to our plans. During the second quarter, we concluded our U.S. clinical trial that will support our iCGM filing, and our teams have now shifted to processing the data and working toward preparing the regulatory filing. In addition, we've recently submitted G7 for CE Mark approval. As we previously discussed, we believe that this timing places us on track to begin the G7 launch by the end of 2021. These are incredible achievements and advances from the quarter and a nice step forward to fulfill the promise presented by our CGM technology. This is just the beginning. There are several additional areas of progress that Jereme and Quentin will discuss based on the great work of our teams in the past several months. With that said, let me turn it over to Jereme for a review of our second quarter financial performance. Jereme? Thank you, Kevin. 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 on our IR website. For the second quarter of 2021, we reported worldwide revenue of $595 million compared to $452 million for the second quarter of 2020, representing growth of 32% on a reported basis and 30% on a constant currency basis. As Kevin noted, this represents a record for absolute dollar growth in a quarter year-over-year. U.S. revenue totaled $462 million in the second quarter compared to $367 million in the second quarter of 2020, representing growth of 26%. Our momentum and market leadership position in the U.S. remains strong, and we have been very encouraged with the continued interest in CGM in the marketplace. With the combination of greater depth in our sales force, solid results from our direct-to-consumer marketing campaigns, and expanded ability to allow for patients and clinicians to trial the G6 experience, we are beginning to see preliminary results in our effort to further expand our presence into primary care offices and position the company to extend our customer base. International business grew about 58% in the second quarter, totaling $134 million. The second quarter comp benefited from the impact of COVID on our second quarter 2020 results, we saw good sequential growth momentum as the business once again achieved a new high-water mark. The international growth was broad-based across all markets, including core markets like Germany, the U.K., Canada, Australia, and the Nordic region. Our shift to the pharmacy channel and sales initiatives in the U.S. and our market expansion initiatives internationally are all progressing according to plan, driving high volume growth in both regions. Volume growth for the second quarter came in around the mid-40% range on a global basis. Perhaps the greatest examples of the international effort during the quarter came from Canada, where we saw public announcements of provincial coverage for G6 from two of the largest Canadian provinces. Quebec, where coverage of G6 was established for people with type 1 diabetes, and British Columbia, which became the first Canadian province to cover G6 for people with type 1 diabetes and intensively managed type 2 diabetes. These public announcements are representative of our broader strategy to advance access to our technology for people with diabetes. We are leveraging the increasing strength of our operations in driving a meaningful expansion to the total number of patients that we can address via reimbursed pathways. Our second quarter gross profit was $417.1 million, or 70.1% of revenue, compared to 64.1% of revenue in the second quarter of 2020. We're very proud of the effort that's gone into these results. The 600 basis points of gross margin expansion is another great validation of the growing efficiencies that we've achieved through product design and efficient manufacturing operations. It is these types of efforts that drive the strategic flexibility to expand our addressable market that I just referenced. Operating expenses were $315.6 million for Q2 2021, compared to $213 million for Q2 2020. These results reflect what we've previously noted in our discussion of our 2021 plans. We have several areas of investment that we are pursuing which account for the increase in operating expenses as a percentage of sales relative to the second quarter of 2020. These include the costs associated with our expanded field sales force, the pivotal trial and support of our U.S. G7 regulatory submission, the G7 manufacturing scale-up, and global direct consumer marketing. Our strategic investments have also included our efforts to efficiently scale and lower the cost to serve our customers, as we envision a future in which we serve meaningfully more people than we do today. Our global business services operations in Lithuania and the Philippines are key examples of those initiatives that are driving great customer service while leveraging our G&A spend. Operating income was $101.5 million, or 17.1% of revenue in the second quarter of 2021, compared to $76.7 million, or 17% of revenue in the same quarter of 2020. The 10 basis point year-over-year improvement was driven by strong improvements to our gross margin resulting from the design of our products and the manufacturing efficiencies that come there through. These improvements more than offset the strategic investments that we've made during the year. Adjusted EBITDA was $156.6 million, or 26.3% of revenue for the second quarter, compared to $122.6 million, or 27.1% of revenue for the second quarter of 2020. Net income for the second quarter was $75.4 million or $0.76 per share. We remain in a great financial position, closing the second quarter with approximately $2.6 billion in cash and cash equivalents and great financial flexibility to drive our strategic initiatives. Turning to guidance, we continue to expect solid volume growth across all of our regions in the back half of the year, with momentum driven by growing CGM awareness globally. Based on our second quarter performance, we are pleased to be in a position to once again raise our full year 2021 revenue guidance. We now expect 2021 revenue to be between $2.35 billion-$2.4 billion, representing growth of 22%-25% over 2020. This increase comes on top of our expectations for approximately $10 million of unfavorable currency impact in the back half relative to prior guidance. This revenue increase is primarily a reflection of our continued growth momentum, as well as the ongoing impact of our channel mix and international access expansion strategies. We will see a greater revenue per patient impact to our existing base from our international access initiatives in the second half of the year. We continue to expect the incremental volume driven by these efforts to offset those pressures in our base this year alone. More importantly, this will leave us in much better position in the years to come. Turning to margins, we are increasing our full year 2021 targets. This includes non-GAAP results to be approximately at the following levels: gross profit margins of approximately 67%, operating margins of approximately 14%, and adjusted EBITDA margins of approximately 24%. With that, I will now turn the call over to Quentin for a scale and strategy update. Thank you, Jereme. As Kevin and Jereme indicated, we made great progress on our key strategic initiatives during the second quarter. It is hard not to be excited about the market potential for CGM after seeing the depth of research using Dexcom technology at the recent ATTD and ADA industry conferences. We saw well over a dozen presentations from Dexcom's insulin delivery partners highlighting the clinical utility of their Dexcom integrated systems and Dexcom's leadership in the field of interoperable solutions. Outside of the MOBILE and ALERTT publications that Kevin mentioned, we also saw several presentations from our Dexcom team members, as well as independent investigators with outcomes that are very promising for the continued growth of Dexcom CGM. In one study presented by our health economics team, we looked at real-world evidence documenting the cost savings for a significant number of patients with type 2 diabetes using G6, including both the intensive insulin therapy and those who are not treated with mealtime insulin. The results were compelling, with the magnitude of cost savings generated for the G6 users being nearly identical to the cost savings we've seen in several of our other pilots. This is yet another data point supporting the economic benefits associated with the better glucose control for our customers, and we are excited to leverage this growing evidence base into broader access for people with diabetes around the world. We also continue to innovate our software solutions to enable differentiated user experiences that meet the needs of the diverse customer bases that we serve. Most recently, in mid-July, we received FDA clearance on a real-time API software solution. This is, to our knowledge, one of the first, if not the first, real-time API clearance in the medical device sector that enables integration with third-party apps. As many of you likely know, prior to the clearance of our real-time API, our various digital health partners were limited to the display of CGM data on a three-hour delayed basis through our retrospective API. With this new API, partners who are now invited by Dexcom have the ability to integrate real-time Dexcom CGM data into the respective apps and devices. This is another great win for our customers, who will now benefit from the ability to see real-time glucose levels in a variety of new displays according to their needs. At the time of the approval, we announced Garmin and Teladoc Health's Livongo for Diabetes program as early users of the new API solution. In addition, Welldoc and UnitedHealthcare's Level2 are also utilizing our real-time connectivity solutions in their integrated offerings. This is an exciting innovation for us and an example of how we are leveraging our leadership in software connectivity to advance our market position in the growing digital health landscape. On the commercial front, we remain well-positioned to drive growth and broader Dexcom market penetration in several locations. In addition to the significant access expansion efforts that we began to implement last quarter to enable multiples of growth in our core markets, we are growing our presence in locations that are relatively new to our team. This includes Japan, where we've recently sent our first shipment of G6 systems to our local distributor. Although we have had a minor presence in Japan through the use of our G4 Professional CGM, these G6 systems represent the expanded use of our product to serve people with diabetes with our core ambulatory solution. We are incredibly excited to bring our CGM technology to empower people with diabetes in Japan and look forward to developing that as a nice growth market for Dexcom. In addition to the strong G7 performance data showed at ATTD and the clinical and regulatory updates that Kevin provided, our operations team is continuing according to plan in our G7 manufacturing development and scaling efforts. We have automated lines producing G7 product as we speak, with a steady cadence of additional lines scheduled to be delivered through the back half of this year and throughout 2022. In addition, the vendors in our supply chain are scaling up G7 capabilities alongside us as we sit here today. We will take what we have learned from these automated lines in San Diego and Mesa and use them to quickly replicate and scale in our new manufacturing facility in Malaysia. As we've said before, this effort will be critical to our ability to serve significant customer populations that we think can benefit from our CGM technology, giving us a clear runway to produce more than 200 million sensors per year and a much stronger presence in a key growth region for us. Our team is doing a great job to advance our efforts in what continues to be a challenging environment to navigate because of the impact of the pandemic globally. We are currently building out the manufacturing facility while also scaling our supply chain, putting us on track to be ready for production in 2022. As you can see from our 70% gross margin this quarter, we're making this progress on G7 while also advancing our efforts towards operational excellence, resulting in even greater improvements and efficiencies to our G6 manufacturing, procurement, and distribution capabilities. Overall, as I think Kevin and Jereme would agree, we are very proud of the work of our teams to execute on the ambitious plans that we set forth in 2021. With that, we'll pass the call back to Kevin. Thanks, Quentin. I agree with that message. We are all very pleased with the progress that we made during the quarter. To be able to raise guidance across the board, including another revenue raise with $65 million added to the midpoint of guidance, is a great result for the company. We're excited to continue that momentum into the second half of the year. I would now like to open up the call for Q and A. Sean? Thank you, Kevin. As a reminder, we ask our audience to limit themselves to only one question at this time and then re-enter the queue if necessary. Operator, please provide the Q and A instructions. If anyone has a question, it's star then one on your touchtone phone. Once again, if you have a question it's star then one on your touchtone phone. Our first question comes from Robbie Marcus. Robbie, go ahead. Oh, great. I want to congratulate you guys on a really nice quarter. If I can ask, I think we're all interested in updated G7 approval timing. Sounds like you haven't filed in the U.S. yet, and you had a great international number. I'd love if you could provide just any examples or tangible examples of how the expansion of benefit is already helping you and how it might continue to help you the rest of this year and next year. Thanks. I'll start with G7, then I'll let Quentin and Jereme take over the benefit expansion. With respect to G7, we're very deliberate about what we disclose. We have filed for CE Mark, and we are on schedule for that. We hit our goal there, and we are now gathering the data from the U.S. pivotal study. It was a much larger study than the data that was presented at ATTD. However, the trial was run under actually what we think are improved protocols from what we ran before. We have no reason to not expect great data. We believe the product will be very robust. We will make sure that we deliver that file in a very pristine manner. We hear a lot of things about FDA delays and things of that nature. We don't want to create any delays. It's been our experience over time when we deliver what the FDA expects, they move very quickly and are very cooperative with us. We have no reason to believe the file we're preparing isn't going to meet those expectations. We're moving along those lines. Again, with the CE Mark filing, we're on track for an OUS launch later this year, and we'll update you more on the U.S. as time goes on. Quentin? Yeah, Robbie. With respect to your question or comment on the OUS business, look, there was strength really across the board in that entire portfolio of ours. We're very encouraged by what we're seeing there, primarily on the heels of awareness just continuing to grow. To be honest with you, I don't think we've seen the benefit yet of the increased access that we spoke to really back in the first quarter. The team has made incredible progress in working with the payers and negotiating these contracts. I'd say we're through 90% or so of those all landing in favorable positions where we've probably increased or improved access for nearly a million patients in the first half of the year alone in that OUS business. The reality is that benefit's not going to show up until the back half of the year. The strength in the second quarter, I wouldn't attribute that to the increased access just yet, but we're very excited about how we're positioned as we go into the back half of the year around those access efforts. Great. Appreciate the thought. Our next question comes from Bob Hopkins. Bob, go ahead. Oh, great. Thank you. Just love you to comment on two quick things. First, Quentin, I think this is what you're referencing in terms of the access piece, but I'm just curious if there's any more detail on just the process of the price cuts and negotiating better access, just how you feel that's going. Again, I apologize if that's kind of what you were referencing with that last question. Kevin, I'd love you to just give a quick update on, just a little more time has passed since the MOBILE trial. Just curious as to kind of what you're hearing from insurance partners or other important parties in terms of the potential impact on that data on facilitating greater reimbursement for a broader range of patients going forward. Sure. I'll jump on that first one, Bob. We are talking the exact same thing there in terms of the fact that we've negotiated or worked through the majority of those negotiations through the course of the second quarter. More than 90% or so of them behind us, all landing in favorable positions relative to improving the access for the patients, reducing the administrative burdens that were there, so that folks can get on the technology a whole lot easier. Very bullish around where we're at in creating incremental access for our patients and how that sets up into the back half of the year. The pricing assumptions have come right in line with what we expected as we were going into it. No surprises there. From our perspective, all is very positive on that front. Bob, with respect to the MOBILE study, obviously, we're very excited about it. Just a little time has passed here. We also have a bunch of other analyses on this data that are coming that'll support our position on basal insulin reimbursement for these patients. It's time to get the word out now. I think one of the big areas here is going to be CMS discussions down the line because a lot of these patients fall into the Medicare bucket. Haven't done any of that yet, but we are looking forward, and we're preparing because this data is very, very strong. Thank you. Our next question comes from Jeff Johnson. Go ahead, Jeff. Thanks. Good afternoon, guys. Just staying on maybe the international side for a second. Jereme, last quarter you talked about a $50 million incremental headwind. From Quentin's comments, it sounds like maybe those really haven't started to flow in yet. Do we think about that $50 million headwind kind of a next 12-month number? Is that how to think about it? Those initial $200 million headwinds that we kind of were expecting heading into this year, the first quarter kind of straight lined in right at about $50 million. Did it straight line again in the second quarter at about the $50 million on the U.S. side and still thinking about the international then $50 million over the next 12 months? Thanks, guys. Sure. The full year guidance around pricing or channel mix headwinds is still the same. The $200 million on what we call the original shift mix primarily in the U.S., is still the same. In the second quarter, it came in a little bit lighter than the first quarter, but generally in line. I think we're seeing that stable, and we talked about at the beginning of the year being pretty stable throughout the course of the year. To your point on the international incremental headwinds about the access for price conversation, that has started. It is back half loaded. We certainly will have some of those in the first half of next year as we anniversary some of those contracts. The $250 million we talked about was really the impact on 2021, you'll see the $50 million in the back half of the year. There will be a little of that into 2022. We'll get more into that in the future. That will happen over a 12-month period. Thank you. Our next question comes from Matthew O'Brien. Go ahead, Matthew. Afternoon. Thanks for taking the question. I know traditionally Dexcom's been pretty conservative with their outlook, but I think Jereme, you just said that pricing concessions are going to be impactful in the back half, but as I look at the model, the back half of the year has easier comps than the first half, and you just put up a monster Q2, especially in the U.S. Is there something specifically you're trying to call out as far as incremental pressure in the back half of the year that we should be aware of? Thank you. Yeah, I know. Thanks for the question. Certainly nothing that we're trying to call out. I think when we thought about guidance, we certainly talked about the performance in the first half of the year and certainly thinking about that patient base and how that plays out for the balance of the year. That's contemplated in the guidance. Look, we raised the guidance $65 million at the midpoint and $75 million when you exclude the impact of currency. We've certainly raised it and passed through some of that for the balance of the year. As we think about the back half of the year, we simply don't want to get ahead of ourselves. We talked about the impact, and you pointed out the international access, but there still is COVID out there, and the Delta variant is out there, and so rather than increase it and get bullish and get ahead of ourselves, we want to see how it plays through for the balance of the year. We do hear instances out there outside the U.S. where primary care physicians are taking their practice and ultimately using their time to administer vaccinations. While we've done a great job navigating through those thus far this year, we do want to be prudent and make sure that we are contemplating. Look, if we can deliver more than that, we certainly will, and we'll talk to it if we are able to. Thank you. Our next question comes from Mathew Blackman. Go ahead, Matthew. Good afternoon, everyone. Thanks for taking my question. Jereme, I just was curious about the second half cadence and whether we should be thinking about sort of a typical third quarter or fourth quarter cadence, or are we sort of at the point or approaching the point where things like increasing pharmacy access may make the year somewhat less 4Q weighted as we've seen historically? Any help there would be appreciated. Thanks. Yeah, sure. Absolutely happy to take it. The way to think about Q3, and by default, you'll back into Q4. Q3 generally is not that impacted by changing and shifts in dynamic. In fact, I think for the past few years, you've generally seen it right around that 26% of full year revenue. We expect the same to happen this year. I think that'll help you at least think about Q3 and the balance of the year. We do expect Q4 to have less of a weighting. You saw it in Q1 as a result of the move to the pharmacy, where the year gets a little bit less seasonal. I think you'll expect the same in Q4, where you don't have folks in the DME channel rushing to meet benefits. I do think you'll see, as we've talked about before, as we make more and more moves to the pharmacy, less heavy weighting on Q4 and less light weighting on Q1 and start to move out of that seasonality. Hopefully, that gives you some context. Q3, in the near term, we do expect Q3 to mirror that of prior periods, which is generally in that 26% seasonality. Our next question comes from Matt Taylor. Go ahead, Matt. Thank you. I wanted to ask one on the margins here. I guess the way I'll ask it is, you showed significant progress. Quentin, you talked about a lot of the scaling and automation activities you're doing in these facilities. Has the results that you've had so far and being able to raise guidance changed your view on the longer-term potential for margins at all to the positive versus the LRP? Yeah. What I would say is, look, our confidence level continues to increase and our ability to keep it in that mid-60s range that we've guided to long term. Is there the opportunity to take it north of there over time? If so, you can bet on it that we're going to flow that through and give that up if possible. Look, we're in the midst of evaluating a lot of different potential business models. As you look at the whole type 2 non-intensive space as it opens up, we're looking at the international business continue to expand in a significant way. Pharmacy access continues to grow. All of these things are going to continue to put a bit of pressure on the gross margin profile. If you saw the way that we were able to take cost out of the product from a design perspective and improve the process efficiencies around manufacturing this, your confidence level only increases in where we can keep that gross margin over time. We're incredibly excited by what we're seeing. A lot of that doesn't contemplate the fact that over time, you probably see us move into a 15-day wear cycle on the product itself. There's significant benefits that come there also. Again, a bit back to Jereme's point earlier. This is not an area that we're going to get ahead of ourselves, but we feel like we have the flexibility we need to really get after the market opportunities that present themselves and still deliver a very attractive gross margin profile in this business. Great. Thanks for the comments, and congrats on a good result. Yeah. Thanks, Matt. Our next question comes from Margaret Kaczor. Go ahead, Margaret. Hey, good afternoon, guys. Thanks for taking the question. I wanted to follow up a little bit on the real-time APIs that you guys got approval for, and it seems like to me like it could be one of the next evolutions for the business. I was curious if you could talk to us how important it is today versus three years from now, what it can facilitate both clinically and commercially, and I guess just to round it out, what's been the reaction from the potential partners to the API so far? Yeah. Well, maybe I'll start with the reaction. The reaction's been incredibly positive. I think folks understand and desire to see the real-time information coming into their tools and being able to put that into the hands of the patients. The more real time that information is, the more reactive the patient can be to that information and improve their outcomes over time. I think we're incredibly bullish in the sense that we believe we have the capability and a platform to build these tools off of, and that's exactly where we want to be. We want to provide as much input to these tools as we possibly can and work with as many partners as possible. I think from the very beginning, we've always had a bit of a different approach to the value of information, data, and software in particular. What you're seeing play out right now is part of that vision that we've had there in the approval of the real-time API. We've invested heavily in the ability to produce this capability. We understand the importance of interoperability, the importance of putting information in the hands of the patients. That's who Dexcom is. You're going to continue to see us invest in that area and really use it as a differentiator. In terms of how that evolves into the future and is there opportunity to create value in that monetization of the data stream or the real-time API, those are all things we'll evaluate over time. That's not our strategy today. Today, it's all about improving outcomes for patients. That's going to show up in the way of incremental sensor sales over time, and we're very happy with that approach. It leaves us with some great flexibility. Great. Thanks. Our next question comes from Travis Steed. Go ahead, Travis. Hi. Congratulations on a good quarter. I know you've talked about the OUS launch of G7 here in the back half, and just curious if you could put some context on expectations for how we should think about that launch and which countries, if you're willing to share that? You've also got probably 40 million-50 million G6 sensors that you're making a year, and just curious what you're going to do with that G6 capacity as G7 launches? That's a great question. I'll take that one. We're not going to give you a color on the specific countries because for competitive reasons, we don't want to release the playbook. We are on track for that. As we look going forward, it is a very interesting question for us and one for us to debate. How do we use our G6 capacity while we're bringing up G7 lines at the same time? The two don't intersect. We believe we'll have a market for G6 for quite some time. While we're going to do a global launch and go very quickly, there will be places where G7 isn't going to be available immediately. Our partners are going to take a while to catch up on the automated insulin delivery side. We're working with them now on G7, but we've still got some G6 room to go there. There are some countries where we aren't yet, or some geographies where we need to get started, where we can offer G6 in those areas while we sell G7 in others. We are planning this. It's one of our areas of great debate, and I think we'll manage it as best we can. We won't be bashful about taking down G6 lines if G7 is ready to go and is the home run we think it's going to be. In all fairness, Quentin and his operations team, along with our R&D guys, have developed some absolutely spectacular manufacturing methods for G7 that can give us a tremendous amount of flexibility to expand there very quickly and very thoughtfully. We'll monitor that very closely. That's a really good question and something we think about a lot here. Our next question comes from Danielle Antalffy. Go ahead, Danielle. Hey, good afternoon, everyone. Thanks for taking the question. I'll echo everyone's congrats on a really strong quarter. I'm not sure who this question is for, but it's on the DTC initiatives. You guys had a very successful Super Bowl ad campaign. Curious if there's any way to quantify what you're seeing from a return perspective yet. I mean, this quarter, what seemed exceptionally strong to me. I'm wondering if we're seeing any benefit from that. Not sure if you can even tell or if you can tell us. If so, would love to hear even qualitative feedback there. Thanks so much. Sure. Yeah, we'll take that question. I think there's probably two data points that we can give you that'll help you get your arms around the feedback we're seeing. First off, Q2 was a record quarter for new patient adds. We're continuing to see record new patient adds, no doubt in many ways driven by the work we're doing around DTC and sales force as well as samples. I think that's certainly a data point that's helpful. The other piece is over the past 18 months, we've doubled the active prescribers of our product. No doubt, as we get out and we get into the field and see endocrinologists, but also primary care physicians, the work we're doing around expanding that access has yielded really incredible benefits for the amount of prescribers that are out there that are, one, aware, and two, prescribing our product. I think those two things are just clear indications of the investments we're making in the awareness, in the DTC, in the sales force, is paying off. Hopefully that gives you some context. Of course, looking at the quarter's revenue performance also helps as well. Those all data points I think really give you some color as to why we think it's still an incredible investment and why we think the returns still are some of the best in the business. Our next question comes from Jayson Bedford. Go ahead, Jason. Thanks. Just a quick one. I wanted to get back to the gross margin line of questioning. What weighs on gross margin in the second half of the year to get to the 67% for the year? Is it international pricing? Is it build-up in Malaysia? Just if you can comment on, it seems like a large portion of these costs may be transitory. Any color there would be helpful. Sure, yeah. There's two that are the biggest, is the first one is some of the international pricing. You're correct. As some of that plays through, we'll have a little bit of pressure on margin. The other one is the launch of G7. When we launch G7, those lines won't be at full capacity, and they won't be at full yields. Just like when we launched G6 and we launched some of the automation around G6, it took a little bit of time to work through some of the kinks on these automated lines. While we still expect incredible output, right out the gate, that's going to cost us a little bit more. I think what you're seeing is some of the international access, but then when we launch G7 and those lines start to appreciate, the cost of producing those in that shorter period are going to be a little bit higher. To your question, is that transitory? All the work that the team is doing around the capability of manufacturing at high capacity as well as high yields, all of that will bounce back and play through. If this quarter's any demonstration of how good they are, you can see the margins that you see this quarter have shown that this team does an incredible job of yielding out these lines over time. We expect that to turn around with G7 into the future. There will be some time as we launch G7, as we get those lines up and running, where there will be a little bit of wait, just similar to what we had with G6, that we're going to have to navigate through. Again, I think we're still super bullish on the capability, and we're super proud of the team and really expecting that team to do an incredible job as we launch G7. Our next question comes from Joanne Wuensch. Go ahead, Joanne. Thank you, and nice quarter. Two questions. Was there any stocking in the quarter, either in the U.S. or the OUS market? You gave us sort of a blended volume price number. Could you sort of parse that out for the U.S. and for the international sales dynamic? Thank you. Yeah. There was no stocking in the quarter, nothing out of the normal. Everybody was at normal levels. In terms of your question on a blended number, I'm not sure what you're referring to. Certainly, we have a price dynamic of around the $250 million. When we say price, it's really more channel. We want to make sure we're very clear, it's really that shift in channel as well as the international access. We also talked about unit volumes, and I'm not sure if you're referencing that, but our unit volumes on the quarter, the growth year-over-year were in the mid-40% range. Certainly a strong unit volume growth quarter. Hopefully that answers your question. If you have any others, certainly follow up. We can happy to clarify. Actually, it's that unit volume number, that mid-40%, that's what I would call a blended number. What is that number in the U.S. and international? We don't break it out. That's our global number. We can tell you that the growth on unit volume was strong in both the U.S. and outside the U.S. Okay. Thank you very much. Of course. Our next question comes from Steven Lichtman. Go ahead, Steve. Thank you. Hi, guys. Kevin, you talked about momentum in intensive type 2. Where do you think U.S. penetration into that market can go over the next few years? Are there any hurdles to drive penetration, or are you feeling good now where awareness and payer coverage are to continue to drive penetration there? We feel very good about coverage we have there. On the commercial side, it's up over 80% of the intensive type 2 patients now covered for commercial payers, plus the Medicare coverage that we have, that it covers a number of these patients already. Access for these patients isn't going to be a problem. It's now all about awareness. We went and doubled the size of our sales force at the beginning of this year so we could access some more primary care physicians who do see a lot of the insulin-using type 2 patients. We've seen great results from that team. We've had a huge increase in the number of prescribers of our product over the course of this year, that is a big win. For us, it's about getting to them and explaining to them what technology is available. We think this market will be every bit as penetrated as type 1 at some point in time. We view it as a very strong opportunity. Great. Thanks, Kevin. Our next question comes from Anthony Petrone. Go ahead, Anthony. Great. Thanks. Congratulations. Great quarter, and hope everyone's doing well on the team. Maybe a quick one on Malaysia and G7. Is it safe to assume G7 will exclusively be manufactured out of there? If so, what does that mean for the margin of that product? Then maybe a quick update on the integrated device partnerships, Control-IQ, and eventually Omnipod 5, just how you see those partnerships and those product cycles evolving over the next 24 months. Thanks. Yeah. I'll speak to the Malaysia question. Kevin will jump on the last part of that. With respect to Malaysia, G7 will not be exclusive to that location. We will start with G7 here in the States, both in San Diego and Mesa. As a matter of fact, lines are there as we speak, and we'll continue to ramp up there into the back part of this year and into next year as well. As Malaysia comes online and the building's up out of the ground and we've validated the clean room and the capability there, we'll begin to build out the G7 capability there as well. We'll have G7 in both locations over time. That's going to give us an opportunity to produce north of 200 million sensors altogether. When you think about the distribution of those sensors and where they're going, both in the U.S. and internationally speaking, I think it makes a lot of sense to continue to have a capability here in the States as well in Malaysia, particularly when you start to look at the logistical distribution costs associated with moving that product around in the volumes that we're talking. It will exist in both locations. I do think over time, the lower cost profile will come out of that Malaysia business. That's a big part of the value proposition there, but that's going to let us serve a lot of those international markets very effectively and efficiently. Yeah, and with respect to the integrated systems, we're very excited for these opportunities. I actually made it out in the field last week. There's a whole bunch of pent-up demand for Omnipod 5. People are very ready for it. They've been ready for it for a long time, and we're looking forward to that day as well. On the Tandem side, we know they're working on new products and have new projects. I think the best thing I can talk about with Tandem is just a recent story. I got a note on my computer. Somebody wanted to give me a Facebook message, and it was a person who told me he'd spent 22 years on Medtronic systems and is now on Tandem, Control-IQ with Dexcom, and he has never been healthier, never had a lower A1C, never had better. He said, "My whole life has changed." He goes, "This system is amazing." We believe the integrated systems driven by Dexcom sensors are game changers. People get accurate sensors information that can take these sophisticated algorithms and make proper decisions. We're very bullish and optimistic on both these opportunities going forward. Very excited. Thank you. Our next question comes from Ravi Misra. Go ahead, Ravi. Hi. Thanks for taking the question. Just on the Dexcom API, can you talk a little bit about how you chose some of the partners that you're working with? I understand Livongo, of course, but with Garmin and then just more on that. Can you just walk us through kind of how you envision this being separate or integrated with Clarity in the future? Just curious why this is for industry rather than kind of providers itself. Thanks. Yeah. This is Kevin. I'll handle the Clarity piece. With the live API, the patient still has to run the Dexcom app in the background. The data will go straight to Clarity, and it will be there as is. Now, the better question is, will we ever have a Clarity-type system for those who don't have the same needs as intensive insulin users? I think over time you'll see us migrate our tools to that platform. Hence, you heard these guys talk about software investments over the last half of the year, and as we look at 2022, we see the same. We are quickly becoming a software company in addition to a sensor company, and it's very exciting there. Quentin, you want to talk about- Yeah, in terms of the partners, you think about the Teladoc Livongo's diabetes program, the UnitedHealth, the Welldoc, and Garmin. These are partners that we've had established relationships with in the past. There is a little bit of integration work that goes into providing the real-time API and the connection into their systems. These were the easy ones out of the gate that really sync up with and get the programs going with. I think the important thing is we want to be a foundation that we can provide this sort of information into many programs out there and really improve the outcomes for the patients themselves. I don't think we could be better positioned to be able to do that right now. incredibly thrilled with where it's at and expect more partners to be lining up. Our next question comes from Marie Thibault. Go ahead, Marie. Thank you. Congrats on a nice quarter, and thanks for the time today. Just a quick follow-up, I think, on the comments around the sales force. I know that you doubled the sales force this year, so just want to get an update on where they are in their productivity ramp. I know we typically think of at least six to nine months to get to a more normal productivity level, so would love to hear kind of a status update on that. Thank you. I think you're right on target. It does take about six to nine months for everybody to get up to speed. The one thing we are seeing, if I could just give you one trend, though, as we try and expand our coverage into the PCP offices where we haven't been before, it's a lot of work. We haven't been there, and as we knock on doors, it's taking these guys a while to get appointments. Once they get in, we're finding the physicians do not know a whole lot about Dexcom. If anything, we've totally validated our assumptions in this expansion. We had to get out there. We had to get more feet on the street and more faces to be as competitive as we wanted to and to achieve our goals. Thank you. Our next question comes from Gibran Ahmed. Go ahead. Hi, this is actually Kyle Rose on from Canaccord. Obviously, you made some big investments on the commercial side this year with DTC, doubling the sales force, and the trialing. I'm just trying to understand, if you had to call out maybe one of those as a bigger driver rather than the other, which one would it be? Just trying to understand how far into realizing some of the productivity gains from the sales force we might really be seeing from the primary care channel. Yeah, I can take that. At first, these all really needed to be done in conjunction. The immediate one that you get returns on is obviously awareness. Awareness comes in many forms and factors, but clearly through DTC. I think at this point, they all go hand in hand because you're making folks aware. You're getting out into the physician's office. You're making the physician aware, certainly through your rep. Through the Hello Dexcom program, people are getting the opportunity to trial it. We did them all together. Maybe early out the gate, DTC was the immediate shot in the arm. At this point, they're all really contributing in conjunction. That's the way we think about it. Over the longer haul, you think that feet on the street are going to be incredibly important as these physicians need to have relationships with folks in conjunction with all the other offerings that we provide. We have to validate that over time. Kevin referenced it. We get in front of these doctors, we're educating them. The way I think about it is DTC is the immediate, more quick return. I think at this point, they're all contributing equally. We have no more questions at this time. I'd like to turn it back to Kevin Sayer for a closing comment. Thank you very much. Thank you, everybody, for participating in and listening to our earnings report today. In summary, this was a quarter of tremendous accomplishment. Just under $600 million in revenue for this quarter, with our highest ever absolute revenue dollar increase when compared to the previous year's quarter. Our worldwide field and access expansion efforts are working exactly the way we planned, positioning us very well for the rest of 2021 and beyond. 70% gross margins during a period of continued planned annual revenue per patient reductions to increase global access for all diabetes customers. New record operating income during a period of increased investment in what I believe is the most robust product pipeline we've ever had. G7 progress continues. Very important measurable milestones have been achieved on schedule this quarter. There's nothing like being around here as we approach a deadline. It is just energizing. Other projects here made great progress as well. Finally, we are laying the groundwork for our future growth with irrefutable fact-based clinical evidence. This technology will have a major impact in healthcare all over the world. Thanks, everybody, and have a great day. Thank you. Ladies and gentlemen, this concludes today's conference. Thank you for participating. 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