Senseonics Aktie

Good day, everyone, and welcome to the Senseonics Second Quarter 2026 Earnings Call. [Operator Instructions] Please note today's call will be recorded. [Operator Instructions].

It is now my pleasure to turn the conference over to Jeremy Feffer from LifeSci Advisors. Please go ahead.

Thank you. This is Jeremy Feffer from LifeSci Advisors. Before we begin today, let me remind you that the company's remarks include forward-looking statements. These statements reflect management's expectations about future events, operating plans, regulatory matters, product enhancements, company performance and other matters and speak only as of the date hereof. These forward-looking statements involve a number of risks and uncertainties. A list of the factors that could cause actual results to be materially different from those expressed or implied by any of these forward-looking statements is detailed under Risk Factors and elsewhere in our annual report on Form 10-K for the year ended December 31, 2025, our 10-Q for the period ended June 30, 2026, and our other reports filed with the SEC. These documents are available on the Investor Relations section of our website at www.senseonics.com. We undertake no obligation to update publicly or revise these forward-looking statements for any reason, except as required by law.

Joining me today from Senseonics are Tim Goodnow, President and Chief Executive Officer; and Rick Sullivan, Chief Financial Officer. Brian Hansen, Chief Commercial Officer; and Mukul Jain, Chief Operating Officer, will also be available during the Q&A.

And now I'll turn the call over to Tim.

Thanks, Jeremy, and thank you all for joining us today. I have to say this is an exciting call to begin in today because it was an outstanding quarter for Senseonics. We're redefining what a CGM can be for people with diabetes and the second quarter showed just how much momentum that mission is building. This was another strong quarter for Senseonics, and we are once again raising our full year 2026 global net revenue guidance now to $62 million to $66 million from $60 million to $64 million, representing year-over-year growth of about 80%. I'll keep my remarks focused here as a quarter like this deserves a moment to properly highlight it.

Second quarter revenue grew approximately 120% year-over-year, with U.S. revenue growing more than 150% with strong performance in both the DTC and HCP channels. We also completed the commercial transition of our business in Europe for Ascensia effective June 1 and consistent with the time line we gave you in May. I want to thank the team led by Brian Hansen, our Chief Commercial Officer, for the continued execution of the strategy.

At the same time, we continue to scale Eon Care ahead of schedule, enabling broader and faster access to Eversense for prescribing clinicians and their patients. In addition to the strong revenue performance, it's also important that I spend a moment on the margins because this is one of the most important stories for the quarter. Gross margin came in at 59%, above the guided range we gave you in June and the strongest organic performance by the company in its history. And I want to give real credit to our commercial, manufacturing and supply chain teams for that execution. This kind of consistency does not happen by accident.

Importantly, this quarter's margin doesn't include any onetime investments. This is a clean number. And I think that makes it an even stronger proof point. It's the second consecutive quarter that we've delivered margin at or near the high end of our range since bringing commercial operations fully in-house. And that's exactly the kind of proof point that validates our decision we made to take control of our own commercialization in the first place. Given this performance, we are also raising our full year gross margin guidance to the range of 58% to 61% from the prior range of 55% to 58%.

Every point of margin we deliver today is a point that over time, helps us fund our own operating expenses and moves us closer to being a business that can fund itself. This is our clear objective, and that is the whole thesis behind the commercial transition. We now have all the pieces. We own the tactics and we own the strategies. Q2 showed another quarter of progress from the transition, and our team is delivering quarter-after-quarter, and I couldn't be prouder of the execution.

During Q2, we also presented additional real-world data on Eversense 365 at the ADA scientific sessions in June. The data reinforced compelling clinical benefit through strong adherence with real-world system use averaging 93% and consistent glucometrics across the first and second 6 months of since aware, including a mean time in range of 66% in open-loop use with more than 81% of our users achieving their hypoglycemia targets. Among those on our partnered AID system, we saw a mean time in range of approximately 76%.

We also highlighted at the ADA, the high-quality performance and survivability of Eversense for a full year, which we showed to be a meaningful differentiator in the quality aspects of our product compared to other available transcutaneous sensors, which clearly disappoint some of the users. We're pleased that the product continues to perform in the real world, which excites our users and meets their needs. We're at the most exciting stage of our journey yet. And this quarter is exactly the kind of proof point to demonstrate our strategy is working, bringing our commercial organization in-house, scaling Eon Care, driving Eversense 365 adoption and developing the next generation of products to redefine CGM.

Let me provide a bit more color on each of these areas before turning the call over to Rick. In the United States, our commercial momentum has continued to build. And frankly, it's exciting to watch. We shipped more units in the second quarter than in any other quarter in our history and the number of active prescribers writing for Eversense reached an all-time high, up approximately 130% year-over-year. Direct-to-consumer remains our largest source of new patient growth. At the same time, our health care provider channel continues to expand as our sales force gains productivity, awareness expands, and we are continuing to see strong results from the Eversense 365 integration with the twiist insulin pump.

Twiist footprint is roughly 100 sales territories, and it meaningfully amplified our own commercial reach, and we continue to see the combination bring new patients to both products. As we noted at our ADA Analyst event, approximately 90% of our new patients continue to come from the installed base of existing CGM users switching to Eversense. This speaks to the quality and differentiation of our sensor. Patient retention has also remained in line with our expectations. Simply put, our U.S. business is executing at a high level across every part of the model, performing consistent with the high-growth plan we've laid out, and we expect that strength to continue through the back half of the year.

I also want to spend a few minutes on Eon because it has quickly become a strong asset for growth today. At its core, Eon makes Eversense easy to get. It gives patients simple, convenient and affordable access to the sensor, and it partners with prescribers so they can bring the benefit of Eversense to their patients without having to build the insertion procedures into their own practice. That model matters because it means any prescriber, not just trained inserts, can say yes to Eversense. The network momentum in the second quarter was outstanding. We added 28 new providers, bringing us to more than 90 nurses, already well ahead of pace to deliver our goal of 100 by the end of 2026, and we have plans in place to push beyond that target.

By year-end, we expect to have an Eon provider within 30 miles of 60% of the U.S. population. That reach is showing up directly in volume. Eon performed more insertions in the second quarter than in any other quarter in its history and June was the highest volume month ever. Today, Eon is performing approximately 40% of all Eversense insertions in the United States, and we expect to account for more than half by year-end. Eon aligns tightly with our direct-to-consumer strategy. Most patients who come to us through DTC channels have primary care prescribers who are not Eversense trained inserters. Eon closes that gap. It is what makes getting Eversense convenient and affordable for exactly those patients. And while Eon's primary focus remains enabling sensor adoption, it is expected to become a contributor to Senseonics economics in its own running. Simply put, Eon is a key element of powering Eversense growth today, and it will be essential to the rapid acceleration and adoption we expect with Gemini and Freedom tomorrow.

On the reimbursement side, our channel mix remains a real strength for us, holding constant at approximately 60% of our volume flowing through bundled pay and the remaining 40% through our DME channel, in line with our expectations. We continue to expect this split to hold for the remainder of the year. In Europe, we completed the commercial transition of the business from Ascensia during the second quarter, bringing over the full commercial organization, including all local employees and standing up of our own dedicated sales force across Germany, Italy, Spain and Sweden. That transition landed a little later in the quarter than we had originally planned, which slightly affected our tender-driven markets. In each of our tender countries, we need to both transfer ownership of the existing tender from Ascensia to Senseonics and simultaneously request the upgrade from our legacy 180-day Eversense E3 product to Eversense 365.

Because the underlying commercial transition landed later in the quarter, that work in Italy and a handful of other markets got slightly pushed out as well. That timing, together with a small purchase of Eversense inventory back from Ascensia as we finalize the transition, similar to adjustments we've made in the U.S. in the past is why our OUS revenue came in slightly lower than we had modeled for the quarter. None of this changes our confidence in the opportunity in front of us in Europe. It's truly a matter of timing, and we expect the revenue associated with these tender updates to shift to the third and fourth quarter. We do not expect an impact on the full year revenue in Europe, but it will slightly push some of this revenue into Q3 and Q4. We continue to expect Europe to represent approximately 20% of our total revenue for the full year.

Turning to our product pipeline, our additional major pillar for Senseonics' growth. Both Gemini and Freedom continue to advance in line with our expectations. And I want to take a moment to remind everyone just how exciting this road map is. Our mission has always been to push the boundaries of sensing technology and make diabetes less visible, both Gemini and Freedom are how we get there. Gemini is on track for the 510(k) submission to the agency in Q1 of 2027 and launch soon after its clearance. It will be the first CGM with an optional on-body transmitter, giving us 2 distinct products from a single platform, a flash mode where patients can scan for reading just using a smartphone and a full continuous mode for patients who choose to keep the transmitter on.

Freedom is right behind it, and we're preparing to begin our first in-human study later this year, an important next step towards our vision of eliminating the on-body transmitter entirely. That timing is supported by encouraging results from a recent animal study that we shared at the ADA, where we saw 100% Bluetooth communication success within 8 feet of the implanted sensor and up to 83% with connections at 25 feet, giving us confidence in the antenna and protocol choices we've made and as we move toward human testing. We remain incredibly excited about the progress that we've made on both Gemini and Freedom, and we continue to be on track to deliver the most revolutionary advancements in diabetes technology.

Also advancing the platform in June, we announced a strategic partnership with Welldoc to develop the next-generation Eversense 365 app. The new app will preserve everything patients rely on today while adding improved integration with tools like Apple Health and Google Health Connect, and it lays the groundwork for future AI-powered features leveraging Welldoc's health care-ready AI platform. We expect to launch the new app in the U.S. in the second half of this year with European availability to follow in early 2027, all part of our mission to make it easier and more convenient for people to manage their diabetes.

With that, I'll now turn the call over to Rick to walk through our financial results.

Thanks, Tim, and thanks, everyone, for joining us this afternoon. I'll keep my comments on our sales and reimbursement channels brief today since the mechanics remain in line with what we have previously shared and touch on the headlines before moving into our results. I'm happy to go deeper into any of it during Q&A. Direct-to-consumer remains our largest U.S. sales channel, followed by our health care provider channel and patient reorders, which continue to grow as our installed base matures. And on reimbursement, as Tim just described, our bundled pay and DME mix held at approximately 60-40 this year, consistent with our expectations.

Now let's turn to the financials for the quarter. Net revenue for the second quarter was $14.5 million, an increase of approximately 120% compared to $6.6 million in the second quarter of 2025, driven by the continued Eversense 365 adoption in the U.S., the elimination of the Ascensia revenue share and a favorable reimbursement mix. U.S. revenue was $12.6 million, up more than 150% from $4.9 million in the prior year period. Revenue outside the U.S. was $1.9 million, up approximately 12% from $1.7 million in the second quarter of 2025, a smaller increase than we'd expect on a full year basis, reflecting the slight delay in tender updates to the 365-day product in Europe as we finalize the transition that Tim described, which is purely a matter of timing and not demand.

As those tenders update, we'd expect OUS revenue to accelerate in the third and fourth quarters, still landing at approximately 20% of full year revenue. A big highlight for us in Q2 is our gross profit margin. Gross profit for the second quarter of 2026 was $8.6 million, representing a gross margin of approximately 59%. This is compared with gross profit of $3.1 million and a gross margin of approximately 47% for the second quarter of 2025. This reflects both the strong execution of our manufacturing and supply chain teams as we continue to increase lot sizes and make improvements throughout the manufacturing process and the reimbursement mix with about 60% of the business continuing to flow through the bundled pay reimbursement channel with higher average selling prices.

Research and development expenses for the second quarter of 2026 were $11.6 million compared with $7.7 million for the prior year period, an increase of $3.9 million, primarily driven by ongoing clinical trials for the Gemini product and development efforts for our Freedom product, making progress towards our vision of eliminating the on-body transmitter entirely.

Selling, general and administrative expenses for the second quarter of 2026 were $32.9 million compared with $9.7 million for the prior year period. The increase is due to the transition of commercialization back to us from Ascensia and the assumed operational responsibilities related to the commercial integration in the U.S. and Europe. Included in these amounts are transition service agreement expenses paid to Ascensia, most of which were concluded by the end of the second quarter. Net loss was $36.7 million or $0.63 per share compared to a net loss of $14.5 million or $0.36 per share in the second quarter of 2025.

As a reminder, and as you've heard today, we are in a period of investment in Eversense commercialization and our next wave of CGM innovation, and we believe those investments have clearly begun to pay dividends. We are taking a long-term view of the business, and we believe our decisive actions so far this year are laying a strong foundation for a commercially and financially sustainable enterprise. As of June 30, 2026, cash, restricted cash and cash equivalents totaled $143 million, and debt and accrued interest was $55.5 million. I also want to take a moment to reemphasize the financing we completed earlier in the second quarter because it's a real strategic asset heading into the back half of the year.

In early May, we raised more than $100 million in growth capital in 2 steps, an equity offering of common stock and prefunded warrants that generated approximately $90 million in net proceeds, led by a handful of institutional investors with strong conviction in the Eversense story and an amendment to our credit facility with Hercules Capital that expanded the facility from $100 million to $140 million, giving us access to an additional $20 million immediately with up to $85 million more available over the next 18 months, subject to meeting certain conditions.

On top of the cash balance I just described, I believe our balance sheet is well positioned to support our commercial strategy and pipeline investments. Given the strength we saw this quarter, as Tim highlighted, we are raising full year 2026 revenue guidance to $62 million to $66 million, up from our prior range of $60 million to $64 million. We are also raising our margin guidance and now expect our full year gross margin to be in a range of 58% to 61%. The momentum we are seeing through 2 quarters gives us confidence in these expectations. As in prior years, we expect revenue to be weighted toward the back half of 2026 with approximately 40% in the first half and 60% in the second half, a seasonal pattern that has historically held true independent of the European timing dynamics Tim described. We continue to expect operating expenses of $150 million to $160 million and cash utilization of $110 million to $120 million for the year.

With that, I'll turn it back to Tim for a few closing remarks.

Thank you, Rick. To wrap up, I want to step back and frame where we stand because I think this is one of the strongest quarters in Senseonic's history.

Coming into the year, our thesis was that bringing the commercial organization fully in-house, combined with the strength of Eversense 365 would unlock durable revenue growth and margin expansion. And so far, we see this thesis is playing out ahead of expectations. Our second quarter results give us confidence, revenue up approximately 120% year-over-year, margin performance at the high end of our guided range, continued strength in the U.S., a European transition that is operationally complete even as some of the associated revenue shifts later in the year, a meaningfully strengthened balance sheet and an Eon Care network that is on track to scale beyond our 100-patient stop, an Eon Care network that is on track to scale beyond our 100 provider goal. Supporting maximizing our DTC strategy and opening up access across the U.S. We're not just growing the business, we're redefining what a CGM can be, and we believe this quarter is showing that. We remain confident in our plan for the year and what we're seeing so far in 2026 gives us even more conviction.

Thank you all for joining us today. And with that, we'll now open up the line for questions.

[Operator Instructions] And we'll take our first question from Joshua Jennings with TD Cowen.

This is Colin on for Josh. Congrats on the nice quarter as well. Can you talk about the drivers of the really strong U.S. new patient number as well as how you're rolling out the expansion of Eon Care network, whether that be by filling some of the white space in any regions or growing your presence in different key areas?

So growth fundamentally is -- it's new patient starts, right? As we said, the approach, as you know, is through the DTC channel, which is about 60% of the growth and the other 40% is coming from the ACPs. DTC, we run a lot of commercials in social media. We're getting good response. We've increased the effectiveness of that, so taking the cost down, which allows us to get broader and broader reach. And through our internal procedures with our internal service teams, we're improving the conversion on each one of those. And that's happening month-over-month, quarter-over-quarter.

On the sales reps side, they're doing a great job at reaching out with folks as it becomes -- Eversense becomes more and more aware of each one of their clinics, they're able to go penetrate deeper as well. And then obviously, as we bring more folks in, especially with the DTC, they're able to go broader in the offices that they're able to call on. So it's really just effectiveness of the entire commercial organization. And now that we have control of that, we're able to make all of the adjustments. We make the real-time week-to-week adjustments in regards to what investments we want to make in regards to what ZIP codes that we want to focus on, that's all directly within our control.

And Brian and his team are doing a great job at executing on all of those. Eon growth, as you've seen, we actually accelerated from what we said because we're just seeing great progress with that. It takes a relatively short amount of time period to bring new nurses up to do the procedure. We do the training on it. We make sure that they're credentialed. And we're putting in the geographies where we're showing the success in the commercial aspects as well. So it's really building on each other. As we show more commercial success, there's a more greater need for inserters. And obviously, we're great insertion depth, we can push harder and harder with the commercial. So it really is a rising tide is floating all the boats.

That sounds great. And maybe with the E365 reinsertion cycle coming up here in the back half, can you put that recurring revenue stream of sorts into perspective versus your new patient adoption expectations?

Well, remember, we're certainly continuing to ramp on 365, but the -- we've been reinserting 365 now since last November. So we've got a pretty good track record. It continues to hold exactly where we expect it would be. From a quantitation perspective, I don't know if we've broken that down yet, but it continues to be right on our plan.

[Operator Instructions] We'll move next to Anthony Petrone with Mizuho Group.

Congratulations on the solid quarter here. Maybe just a little bit on the complexion on the U.S. side. How much was just new territories opening up versus twiist integration? And then as you look ahead, how many new regions with the capital raise do you expect to turn on into the end of the year? And then I'll have a follow-up.

Sure. Thanks, Anthony. We actually have not turned on any new regions after this capital raise. We have 43 regions that we are active in, and we continue to do that. We have increased some of the DTC in those regions, which was as we had planned. So we're continuing to execute. As you may have heard us say, we've got 43 regions externally, we've got about 55 or so people internally that do the conversions of those DTC efforts. From a -- we're very excited about the work that we're seeing and the progress that we're making with the twiist partnership. Clearly, our penetration into type 1 is improving. As a result of that, as you know, we were pretty much 80%, 85% type 2. We're seeing that moderate some, but still very much predominantly a type 2 focused company at this point. We do expect that will change as we bring on other pump companies in the future.

And the follow-up would be just on Gemini study expected to be completed by the end of the year. Just wondering on timing for when we could actually see the Gemini data next year, would it be at ADA of 2027. Congrats.

Anthony, this is Mukul. Yes. So that should be our expectation to see it by next summer. We will complete end of the year, submit Q1 and then a 510(k) submission followed by that clearance hopefully within a quarter of that.

[Operator Instructions] Thank you. At this time, there are no further questions in queue. This brings us to the end of today's meeting. We appreciate your time and participation. You may now disconnect.

Thanks for joining us. And as we update you folks on the Senseonics story, it's a pretty exciting time for us. As many of you know, for those that were able to join us a year ago, we had a partnership with the PHC Corporation for the commercial activities. We've transitioned that since we last spoke. And it's a pretty exciting time for us as we've been able to leverage that experience and that capability significantly with our strategic investment into the commercial organization. And frankly, we're very excited with the commercial results that we're now getting.

So obviously, the control of our destiny is very, very important, because it gives us the ability to pivot and move quick, make adjustments, expand those areas that make the most sense and frankly, leverage the internal capability. But we've been able to do that because, although we did the transition, we've essentially brought the entire Ascensia commercial organization over under Brian's leadership, and that really has made a seamless process that we've been very excited to be able to execute against.

We also made the decision as part of that transition in the last year that the primary issue for growth with Eversense in a highly competitive market, but a very attractive market really had to do with awareness of the product. So for us, it made sense that we needed to make a significant increase in awareness, especially at the DTC level to drive that revenue performance. And we've actually seen that bear out.

Our partner, although a good strong partner, was not in the position to be able to do that. So as we got to the 5-year point of the contract and knowing that we needed to put more into the organization, not less, it just made sense for us to do that transition. So people have asked why? Yes, it's a divorce. It's an amicable divorce. They've been a good partner for us. But at the same time, this is the time to add fuel based on where we were, really driven by the 365 product, answering a lot of the needs for patients and be able to take it to the next level. So we're excited to see some of those results.

Obviously, we all know that the CGM market is huge and large. We were well over 25% CAGR. I think we're now around 20% or high teens, maybe slowing down a little bit as penetration goes in with some of the larger guys. That said, for a company of Senseonics size and where we are today, we're seeing about 90% of our patients are actually coming from the installed base. So the growth opportunity really comes from driving patients through that awareness through the facilitation of getting them access to the product to jumping on to it and then making the choice to go with a long-term implantable. And we've been successful with that as we showed.

So in addition, it's an exciting time. Many of you are aware, we are on the cusp. There is the expectation. The clinical benefits for CGM have been very clear, right? You continue to provide people with the glucose information, they'll be able to act on it. It started out, of course, with a type 1 indication, a clear recognition. It's gone to the type 2s that are on MDI. We now have the basal indication. And the full expectation is that we will get the huge population of folks that are on the oral agents, the GLP-1s, the diet and exercise. So it's just a continuing expansive opportunity. It makes sense for those people to be monitoring their glucose and doing it with a technology that provides them a facile way while being high quality is an absolute expectation. So we're excited to be delivering, as those who have been watching us, we clearly have made some commercial momentum success, and we're going to continue to leverage that and to grow on it.

So this morning, we'll have an opportunity to hear from a number of folks. Dr. Fran Kaufman, our Chief Medical Officer, will be previewing the real-world experience. We've now been on market and have thousands of patients that have experienced the Eversense 365. We're getting very attractive performance, as measured by the time and range. And then continuing that, when you put them on the closed loop, which we'll see with our partnership with the twiist pump, there really is best-in-class performance. And that comes from the high-quality product and the compliance that you get with a 1-year product as well as a very accurate sensor, a very good pump. And quite frankly, I think you're seeing some of the value of the Loop algorithm that comes from the development of that organic environment.

So at the same time, we're able to convince and we're able to educate folks on the long-term CGM, our experience with it, that we do offer some benefits that you don't see with some of the other technologies. As good as they are, they've helped a lot of people, certainly with diabetes, but they've really coalesced to the same product at this point, right? They're both 15 days now. They both use glucose oxidase, so they generate current, but the basic molecular level technology is slightly different between the two. But from a user's perspective, it's a transmitter on the skin through transcutaneous sensor that stays resident for as long as you can keep the wound open, for as long as you can keep the adhesive on, and then it's time to replace it.

So what it's really come down to for those 2 technologies is high, high control of their manufacturing, right? They're produced in large volume. And as they're able to control that, and the one that will win, quite frankly, is the one that has that best high-volume manufacturing. When you see perturbations or you hear complaints about accuracy, or you have recalls, unfortunately, that's going to be as a result of their high-volume manufacturing. But again, they're very, very similar technologies. Eversense has been able to answer many of those for some of the patients. And those are the successes we've seen, and that's where 90% of our patients, quite frankly, and we target existing CGM markets because the market is so large to transition from those. So we focus very, very much on the expansion. We're addressing many of the pain points that exist with CGM. We're now at over a $13 billion market, a huge space to participate in. So it's an exciting space to be here.

Next up, we'll hear from Dr. David Ahn. David is an adult endocrinologist at Hoag. He's Director of the Diabetes Services there. And for many of you that watch the space will recognize David as being one of the leaders in the area of patient choice, new technologies around medical devices for people with diabetes, and he's just taken an active role. And what a great time in his career to be able to do that, because as it's just exploded over the last decade, there are now so many more options for people if you're compliant with it and stay with it.

Then obviously, a lot of questions around how is it going commercially. We'll get an opportunity to hear from Brian. He'll talk about what the transition has been like and why he's been able to be successful here in the last few quarters that are really driving some pretty significant growth with the Eversense. Most exciting that's coming, of course, is our Gemini and Freedom product. So we'll certainly give you a little bit of an update, see some encouraging data on the early concepts for Freedom and why we're seeing success with the Bluetooth incorporation. And of course, the questions we always get, what's the timing? How is it looking? And then we'll ask Rick to wrap up and do some financial discussion. As many of you know, we recently did a significant funding round that's given us the opportunity to go ahead and make this investment in the technology as well as the commercial execution.

So as we look at the opportunity, obviously, as I said, it's huge. It continues to grow because of that need in the diabetes space for glucose monitoring, and we will continue to see success associated with it. Eversense, of course, is completely different, right? We've designed the technology because we knew there are a lot, and for many of you to get an opportunity to go to -- you don't see it here in the U.S. because of the FDA approval. But if you go to the corollary meetings in Europe, you'll see a lot of the Near East competitors in the transcutaneous CGM. There are multiple systems that are out, 10, 14 days. There's even a new one for 21 days, that are transcutaneous CGMs that are really trying to capture the low-cost market. They don't have the accuracy requirement to come to the U.S. So they haven't been submitted for the indication. And then of course, the barrier, which is a reality today for the iCGM designation is even that higher standard.

So unlike a few years ago, when we saw a lot of offshore competition come in, in the strip and meter business, it's going to be a higher hurdle for people to come into the U.S. to bring some of those knockoff markets. Never mind the market dynamics or IP dynamics that go on that are associated with it. So what you really do see in that space, of course, is they're really capped at about 15 days. The reality is that, that wound that you create to put the sensor is going to close up, it's going to heal, and the body is going to want to go back to its native state. And then you have the adhesive issues in the dynamics. So as you get more and more aggressive to stay on longer and longer, you're going to get more and more skin reactions.

So where they've really focused, this is in 2 domains, you're well aware of, this is really about transmitter size, right? How small that we can make it. Everything we're trying to do is make it less intrusive for folks. And you've seen, even now with the announcement of the G8, they're really going to be approaching the Libre size in regards to the transmitter. Obviously, that's not a space that makes sense for us as an implantable to focus in. We do have a transcutaneous component for it today called the transmitter, but we're working very hard to eliminate it, and that's ultimately the Freedom product. So we're fully incorporating all the components. We'll be the first folks that have nothing on the skin. And that's really our point of differentiation. We'll be able to leapfrog the technology that's associated with it. So we'll spend some time talking about it, but obviously, we're pretty excited.

In regards to the commercial strategy, Brian will go into much greater detail. But as I said, for us, it really is about awareness at our size. Once people understand that there is an opportunity for a year-long sensor, they're willing to give it a try. The one hurdle that we go through that we work significantly on, and many of you are aware of it, is through our Eon network, and that's in regards to access. We have good coverage. That's not been an issue for us. But you want to make sure that it's easy for people to get the sensor and get the product. So our expansion of the Eon nurse network, which is now at around 80 nurses, has really given us and really taken that burden off from us as a company and allowed us to give it to the patients as an easy access. So we're pretty excited about the progress that we've made there. And we're working on penetration. So we're going to more clinics, and we're going deeper in the clinics.

And then finally, of course, what's very, very important, we're starting to see some of the fruits of that labor is the retention, right? People need to feel that this is the right product choice for them, and they're willing to come back. And we do see that. The product, especially after they've been on it a couple of times, you've been on 2 sensors now, that's 2 years of your life, you're really committed to it, right? So we're seeing a lot of the folks come back. And I think David can certainly speak to what his experience is with his patients in regards to how many will be able to use the product over and over again. So exciting times.

Now that we are fully integrated, it is an exciting time to move the organization. We had the full team together. You can feel the energy. Some success that we've seen with commercial has really allowed us to be a little bit bolder with our step and feel very, very encouraged with what we're going forward with. And it's allowed us to make changes and change some of the acceleration. And then importantly, obviously, the change also significantly changes our financial profile. Not only do we, of course, get to recognize all the revenue now, but that, of course, all falls through. And as you've seen, we've been able to publish some pretty exciting margin profile for a company of our size, and that's driven by the once-a-year disposable, right? As opposed to a 2-week sensor instead of producing 25 sensors to keep that patient for a year, we only have to produce one. So we get to leverage that denominator pretty significantly.

So a little data to support that. New patient growth, and this is Q1 data. We'll obviously have Q2, but obviously, there's significant growth. As we see in the first quarter, we saw over 100% growth in the DTC patients and a 40% growth in the HCPs. So the sales team is doing a great job. The DTC is really driving that awareness. Not only do we have folks that come in through the web and we facilitate that process, but they also come into the sales reps as well. So they'll go to their doctor or they'll do a Google search on Eversense, and they'll come in through their doctor, even though that they were stimulated by our DTC commercial advertising. So it's really helped in both domains. And as you know, CGM is a very high touch, it's like the pump space. The patients do want to spend time. They do want to get to know their sales folks. A lot of our sales reps carry the cell phone numbers of their patients and will take really the first questions.

The inserter growth has been significant as well, especially with that Eon Care, right? That's up over 900% year-on-year. It's really been a major focus for us. It's one of the key strategic changes that we've made that's really facilitated the process. And then we get asked a lot about the prescribers. They continue to grow very nicely. They're up 80% year-on-year in the first quarter as well. And that's resulted in the growth that you've seen in the revenue, and we continue to hold guidance at $60 million to $64 million for the year.

So as we look at Eversense, clearly, we are a difference maker. We're going to continue to leverage that with the new technologies that come out. There's a lot of folks that are excited about the future with what we can do with the Gemini and Freedom products. And we really look to, at that point, really be a difference maker in the space by driving folks to the highly innovative concept. We'll do that. We'll certainly, of course, take a larger market share as a result of that, both with patients that are switching, which is where we focus our attention now, but new patients that are coming to the market as well.

So with that, we started in an environment, of course, with the short-term CGM, they have helped a lot of folks. There are millions and millions of patients on it. We're going to continue to support those. We've entered the first long-term CGM, but we want to take it to the next step. We're going to make it invisible for folks. We have an exciting platform. We'll be able to continue to do the exact same insertion that we do today. It will last for a full year, but it's completely invisible for folks, right? So we're not in the race to reduce size of transmitters. We're going to leapfrog that and we're going to jump right over that.

So with that, I want to thank everybody again for your time today. And what I'd like to do is introduce Dr. Kaufman that can show you just exactly how the product has been performing since we put it on market about 16, 17 months ago.

Thank you, Tim, and good morning, everyone. And for me from the West Coast, this is really early morning. My goal is to dazzle you with some numbers that we have now. And I will be presenting later today at the conference our latest numbers. We will go from this 5,000 kind of sensor area, which I presented at ATTD, to 12,000, as well as an increased number of patients on the twiist integration and their real-world data. And just really excited to dazzle you with what these are.

So we're able to anonymize our sensor glucose data from our data management system and look at the glucometrics. We do ask the patients to identify themselves as far as whether they have type 1 or type 2 diabetes and their age as well as a few other metrics about themselves. And we've been able to also write a manuscript. We've submitted it now to DT&T, and we're waiting to hear. So I'm going to show you the first 5,000. And later today, I will be again presenting the next 12,000. So the mean age of our cohort is 55. You can see the distribution by gender, and we are a predominantly type 2 cohort. All of these patients are in open-loop, either with MDI, including with Afrezza, or on open-loop pump therapy. And then when we look at the number of data points we can get per sensor, the mean is almost 28,000 data points from a sensor.

So here's what the data looks like. And what we wanted to do was compare the first 6 months to the second 6 months of Eversense wear and then aggregate that data and look at the entire cohort. So when we look at the wear time, it is truly impressive. So the patients are using their transmitter on-body 93% of the time, which means they're generating glucose data that allows them to manage their diabetes as well as generating glucose data that they can look at retrospectively, either on their own or with their health care provider. And then obviously, mean sensor glucose value is very important. And we're talking about 160. And also the GMI, the glucose management indicator, which reflects what the A1c would be, is 7.14. And I think you can see when we compare the first 6 months to the second 6 months, there's no decrement in these numbers over time.

Then if we look at how are these numbers actually distributed now, we've kind of all agreed on what these buckets of glucose values are. So the hypoglycemia range, the time in either tight range or the time in range between 70 and 180 and then the hyperglycemic values. And then we can look at from the consensus data what we are really aiming for, for our patients, which is the percent of patients with less than 70 milligrams per deciliter less than 4% of the time and less than 54 milligrams per deciliter less than 1% of the time. And when we look at it, again, there's no difference between the first 6 months and the second 6 months. So we can look at the data aggregated and see that we actually have very little hypoglycemia.

What is this attributed to? It's obviously attributed to the fact that these patients are using their transmitter, are using the Eversense. And as well, they don't have these periods in which they're switching out one CGM for another, and maybe I'll take today off, or maybe I just won't use this data at all and I'll wait to put another CGM on. So I think that enables them, as well as our settable predictive and threshold alerts really enables them in open-loop to acutely manage their diabetes. So we can look at time in range, and at 66% of the time, again, in open-loop, where really the goal is to be 70% of the time or greater, and that was really designed for closed-loop kind of therapy.

So now, interestingly, we can look at by age cohorts or age buckets from young adults all the way through the Medicare age range and see that actually all the glucometrics improve with age, which is what we've seen across all the type 1 and type 2 patients who really, as they get older, maybe it's a survival issue or they're more acutely able to manage their own diabetes. So when we look at the Medicare age range now, we're getting to the kind of values that are the target for closed-loop. So a mean glucose value that's really acceptable of 154 and a mean GMI that's below 7%, reflecting likely what their A1cs will be.

And even in the young adults who have the least favorable outcomes across the board in any study we look at, our values are really pretty good with a mean GMI of 7.32. And then we can look at all these glucometrics, again, we see that with increasing age, improved outcomes, so that by the time we get to the Medicare age range, we're above 70% of the time in the values between 70 and 180, very little hypoglycemia, and now greater than 85% of the patients meeting the hypoglycemic targets. So really the kind of outcomes that we're hoping for, for our patient population.

So that's the real-world data in open-loop. Dr. Ahn is going to talk about the twiist integration and some of our real-world data now with that integration. So I thank you.

All right. Great. So I'll tell you a little bit about myself. I'm an endocrinologist for adults. I'm the Chief of Diabetes Services for a regional hospital in Orange County, California. This is a beautiful view from Newport Beach. So I've been supporting Eversense or using Eversense in my patients essentially since it launched. And I've had hundreds of sensors in my patients. And as Fran mentioned, I really am a big fan of choice in having options for patients, because every person with diabetes has a different experience, different preferences, different needs. I've done over 350 of these procedures. I do insertions for patients in my panel. I also end up being a referral center for people nearby. I'll just be the proceduralist for those patients and then send them back to their endos.

It has not been a huge issue fitting the procedure into my practice, but it's great that Eversense also has that network for the clinicians that don't want to do the procedures. Essentially 0 adverse events related to the procedures over my, I guess, 8 years now. And my patients really love Eversense and you'll see why. So when they announced that their partnership was going to be with twiist, or their initial partnership was going to be with twiist, I was really excited because outside of maybe the big 2 or 3, I think the twiist has a lot of unique advantages that I think would help support kind of the strength of the Eversense.

So to kind of summarize, I'll go into a little bit of detail on some of these line items, but the twiist has a lot of customizability. And I think a lot of -- kind of like the Eversense, I think it draws in early adopters, but it's also usable at scale for kind of your average person with diabetes as well. So it kind of has the optionality to be very precise to have a lot of finesse and kind of levers to adjust. But if you set it up in kind of a standard way, you can get a really good experience even if you're not that type of person who likes to tinker. So some of those things that are really unique about the twist is that it has the lowest target setting of 87 milligrams per deciliter. You can have various targets throughout the day, and you can also have it go really high. So it can be for the person who wants to run really low. It can also be for the elderly grandma who is worried about running low and would prefer to keep her glucose numbers higher.

It also has the ability to do a couple of modulations to the algorithm that none of the other commercial systems can. So there's something called like a premeal override, where you can set a temporary target that's lower going into a meal. It also has the ability to pick different insulin action profiles in its calculations with a very simple option of a lollipop, a taco, and a pizza, and the user can just kind of say, "Oh, my meal is going to be a really quickly absorbed carbohydrate like a lollipop, or it might have kind of a double wave pattern or an extended pattern like a pizza."

One of the unique features of the twiist system is their iiSure technology, which allows it to detect occlusions much faster than other systems. You can see the minutes listed here, but I think they're advertising about at least 5x faster than other systems and significantly faster than other -- 5x faster than the next competitor and up to like 10x faster than some of the other competitors on the market. And the twiist does hold 300 units as well, but it's still relatively sleek. So it does kind of have a little bit of the best of both worlds there. Now of course, the Eversense 365, you've heard a lot of the advantages of it. But I can't reiterate enough that I think a lot of the patients that are drawn to the Eversense are also drawn to twiist. So I was really excited to kind of see that partnership happen.

And this is some real-world data that Fran presented. I would imagine, Fran -- it was Fran, but I wasn't there specifically. But they shared some real-world data from the first initial wave of patients going on automated insulin delivery. And this is the data that I was really looking forward to hearing, because whenever there's new technologies, as much as I like it on paper, or as much as I like the sensor in my patients, I always want to see how patients actually perform with it. So I was kind of nervous for how it would actually work in the real world. But as you can see here from their full commercial launch on February 19, they did their data analysis on March 2, and this does include patients kind of in their early, preliminary -- they had some patients start slightly earlier, as you'll see in some of my test cases.

So they looked at 122 sensors for patients that had at least 7 days since integrating with twiist. The average age of patients was 45 years old, and 64% of them had type 1 diabetes. Once again, the median transmitter wear time was very high, 99%, which is very impressive, because patients can take it off and put it back whenever they want. So the fact that they're wearing it 99% shows the value that they're getting from the system. And the average sensor glucose was 144 milligrams per deciliter. The GMI was 6.76%, which is fantastic. Under 7%, of course, is our goal. And in the box on the right, you can see that the time in range was 76.6%, which is a very impressive number. And the time in tight range was also very impressive at 53.94% with very little hypoglycemia at 0.5% in the less than 54 milligrams per deciliter range and less than 3% in the less than 70 milligram per deciliter range.

So I'm going to go through 3 cases, and these are all patients in my panel. So I know them and their stories pretty well. And I think they represent kind of different situations that all really benefited from both the Eversense and twiist integration. So the first patient, she's a 31-year-old female, diagnosed at the age of 12. She had been on open-loop pump therapy from diagnosis. So I had met her kind of earlier on when she was on Eversense and combining it with -- well, I guess you'll see. So initially, she was on MDI and then she went on a Medtronic pump paired with the Eversense, and then she eventually went on twiist. And her issue with the other sensors was that she had very sensitive skin and she had concerns about the accuracy of these systems, and she felt like it was not very accurate for her.

So over time, prior to going on Eversense back in 2019, her A1c had been rising. She had been having very variable glucose levels with highs and lows, which makes it really challenging for us as clinicians, until she started the Eversense in 2019, which she tolerated without skin or accuracy issues. Naturally, over the years, she's been very excited to go on an AID system, but it needed to be one that integrated with Eversense, because she only trusted that as her sensor. So she was part of the limited launch starting in December 2025.

So this is some of her data before 2019, when she was -- sorry, this is when she was on the Medtronic system. So she's using a Medtronic without CGM, so just the pump, but no CGM. And as you can see, orange represents high numbers and red represents low numbers. And the bulk of her numbers are either too high or too low, which for us as clinicians is very challenging, because then you can't just ratchet up insulin therapy or back off, because you kind of have to finesse it a little bit more, which is why automation is so important.

So she then added Eversense to her open-loop journey. So she's now using -- in this picture, she's now using Eversense with a Medtronic system. And as you can see from this day for her, she's having much less hypoglycemia and her time in range in this statistic is 67%. So she was getting pretty decent control. Her time spent low had significantly improved. But this is her first 2 weeks on Eversense 365 after integrating the twiist -- or sorry, this is more recent data. So she started Eversense 365 with twiist in December, and this is data from April. But you can see that her time in range is now 76% and her standard deviation is 50 and her GMI is 6.8%. So for reference, that's an improvement from her time in range of 68% to 76%, which is a very significant improvement.

And for someone like her who had been waiting so long for an AID system and the benefits of automation, this has been really liberating for her, and just kind of seeing her come back and really perk up because, as we all know, there's only so far you can get with closed loop -- with open-loop therapy. And this is just an average day looking at her experience with twiist and Eversense 365. As you can see, very little hypoglycemia, and she is having much less hyperglycemia as well. On this specific day in question, her time in range is 81%. And of course, the overnight periods are fantastic, as is the case with automation.

The second case report is a 29-year-old male. He is a police officer, who is now part of the SWAT team, but SWAT in Irvine, California, is probably less exciting than other parts of the country. But he had been on Eversense and MDI since 2020. And he had chosen Eversense because of adhesive issues. He found that with his jacket and his equipment, sometimes it would fall off, and he would then be off a sensor until he can get back to his locker. And so -- also, he preferred the vibratory alerts. He didn't want to hear little chirps and beeps while he's doing his work. And so he had been on Eversense since 2020 and was very excited to get the benefits of automation and start the twiist. So he started on January 2, 2026.

So just for reference, his background A1c was 7.5 in November 2025. And this is his last 2 weeks of data prior to going on automation. And as you can see, he runs a pretty tight ship. His time in range is pretty good at, I think that's, 61% -- or 81%, and his average glucose is 143. But the thing that stands out to me as a clinician is obviously the significance of his low blood sugar numbers. Obviously, that's something we don't want, and it kind of artificially makes his GMI, A1c, and average glucose look good.

Now this is the improvement that he had over time to wearing -- these are literally the first 2 weeks that he was on the twiist system and his time in range improved to 80% -- sorry, I think that initial number was 61%, and so a significant improvement in time in range, and his time spent low had decreased significantly and is now at the ADA recommended targets of 4% and 1% for time spent low and very low. The other thing I think that's very meaningful is his average glucose significantly improved from 143 down to 132. And I think this is kind of a nice side-by-side comparison looking at those 2 data sets. So it's the same data sets I just showed you, but kind of side by side.

And the funny thing is, if you look on the right side of the screen, that first night was actually -- it's including the day that he got trained. My mouse isn't showing up. But you can see that the top left box on the right graph was that night period where he ran high was actually before they turned on -- before he started the twiist system. So if you take out that chunk, his overnight period would be even better. But overall, you're reducing lows, improving highs, and overall, he's been really thrilled with the system because he doesn't have to worry about it as much on his shifts when he's working.

My third and final case report is a 41-year-old male. He had used Eversense in the past. So I had met him, I think, around 2020 initially. And he's kind of an early adopter type person. He always wants to try out the latest technologies. He found that some of the other transcutaneous sensors were lacking in accuracy. However, he had ended up going back to Dexcom because it was the only system that integrated with the Omnipod, and he wanted to wear an Omnipod and have automation. However, he started to get intrigued by -- he felt like the algorithm was not aggressive enough for him, and he wanted something that gave him the option to have a lower target. So he ended up starting the twiist and the Libre initially, because that was what was first more easily available to him in March.

So this is his data when he was on the Omnipod and Dexcom. So his time in range was pretty good. I think that's, yes, 88%. And so obviously, his performance was doing pretty well, but I think it's also -- you'll see, his average improved quite significantly over the next couple of slides. So his average glucose was 141, but overall doing well. But to his preference, he wanted to run lower, but he felt like the system was not allowing him to have a lower average glucose. So initially, he went on the twiist plus the FreeStyle Libre 3 Plus, because that was the fastest thing he could get on at the time. And his time in range went down ever so slightly to 85%. But his average did improve from 141 to 136.

But then eventually, he went on twiist plus Eversense 365, and then you can see that his time in range improved to 93% and his average sensor glucose dropped to 112. So that's from a baseline of 141 down to 112, which is hard to do, as you might imagine, in the real world. And he felt -- or as you can see, he was able to achieve those goals that he was trying to do to improve his average and improve his time in tight range. So yes, I think this slide kind of speaks for itself.

So to conclude, first, we're getting a lot of benefits of the Eversense 365 CGM experience in open-loop, but really those improvements get exponentially increased when they integrate that with twiist and an automated insulin delivery system. My patients really love Eversense 365. You can see that many of them returned to Eversense 365. There are a few other patients I can think of that also had switched away from Eversense, but came back now that it was an option with automated insulin delivery. And I think it's really important. I kind of preach this in everything, but what I love about Eversense is that it's a unique system with unique benefits and profiles.

And I think what Tim shared earlier, where a lot of the other sensors now have similar benefits, similar limitations, whereas the Eversense has very unique benefits and disadvantages and a lot of those benefits are in the exact areas where some of the transcutaneous sensors struggle. So pressure lows are a common frustration, day 1 inaccuracies are a common frustration. And of course, the Eversense has one day 1 every year. So I think choice is really important, and I enjoy doing the procedure, and I hope more patients have the opportunity to get the benefits of Eversense and twiist.

Thank you, Dr. Ahn. As a commercial guy, I really like watching that, right, what Fran presented, what David presented. When we went through our clinical trial process, I was very concerned that if it wasn't going to make it a year, what were we going to name it, right? Eversense 340 wasn't going to sound near as good. And then we had the real-world data come, and we weren't quite sure how that was going to look when we presented at ATTD to see it perform just as well on day 365 as it does on day 180 or 90 or 20, makes my job much easier. And the fact it survives as well all the way through is quite a testament to the work Hari is doing, Mukul will talk about a little bit. But as a commercial guy, we have a product that we can really stand behind.

And David, what I really like what you said is offering choice, right? If we can offer choice to our patients, everybody wins. And I think that's something we certainly strive for. So you guys have seen this slide before. We've really tried to work on scaling. We've really tried to make our product more available to patients, easier to prescribe does certainly start with driving volume. The more volume, the more opportunities we have to put people in place to insert it, the more volume gives a better seat at the table with payers, with physicians.

As Tim said, our DTC marketing, we did so much of it in the second half of last year, and we learned a lot from that. We learned what levers work, what levers don't. We'll talk about that in the next slide, but it really was optimizing our awareness that really has driven some of the success in the early part of the year, making it easier to get our product. Again, we'll talk about our Eon Care network here in a second. Tim said that expanded coverage has really made a difference. We're getting more from our existing physicians. And so our field really focuses on that, not only driving our DTC opportunities into new clinics, but also those that are using it doing more.

I was out with our largest clinic for dinner last night and their plans to expand continue to amaze me. Why? Because the system works for them, right? There's an economic advantage to inserting it. But when they do insert it, it works very well for their patients. So it's a win-win on both sides. And then obviously, retention. That number continues to get bigger and bigger. It's easier to keep a patient than it is to go get a patient, and we're seeing really good results in our early stages of renewing our 365 patients. So really making sure that 1-year patient is going to 2, and then Tim will always say, once they get to 3, 4, or 5, they tend to stay very consistent with the product, very product committed. So we have a lot of programs in place right now to make sure we walk with that patient all the way through that year journey. And when the time comes up, we have them scheduled, we have them ready for an insertion, and there's no lapse there in care.

We won't go through this any deeper. Then we're seeing 60% of our business come in from our direct-to-consumer advertising channel, 40% from our efforts in the field. And trust me, the field does support the DTC piece as well, and it does open up new doors, but there's a lot behind what we have going on. At the end of the day, John and the marketing team really is looking to drive workable leads that our inside team of 55 inside sales reps can go through and drive a higher percentage to close. We could get many more leads in if we throw a wider net, but then you sit there and get a bunch of leads that don't qualify, not on insulin, don't have proper insurance coverage, outside our coverage range of insertion. We're very targeted in our DTC spend. And we spend about $1 million a month. We'll up that a little bit here in the second half of the year, but it's driving in right now some very high-quality leads, and we're seeing our metrics move in a very positive direction.

Our territory coverage in the U.S., roughly 45 territories supported by some clinical individuals, some management team. Many of these folks have been in the diabetes business for a while. You guys know this across the industry. We're all kind of incestuous and have worked around. So some of my friends have joined us over from a few of my prior lives, but we're very happy with our team. And our entire team came over. We saw literally no turnover in our transition from Ascensia to Senseonics. So we're very proud of that. As we look into next year, we'll see where we can start to add a little bit here. Getting the raise has helped a little bit.

Tim has said we'd like to expand some, but we're going to do it smart. And the more we can add inserters, the more we can add reps, the more we can increase where we are advertising, because we do geofence our DTC advertising. We just don't advertise in 50 states, in all counties. If we can't insert, if we can't support, there's no reason to do that. So the more that I can expand, the more I can do on the DTC side and allow us to get to more patients and physicians.

Eon Care. This is something that we decided to do roughly about 1 year, 1.5 years ago. We had partnered with a nurse practitioner group. Kelly and Jeff in the back there are instrumental in building this out, but we made a decision we wanted to control our own destiny here. And we finished the year with about 35 inserters. These are 1099 nurses typically for us that are doing the insertions, trained by us, become really, really good at it. They've really become partners with us, and they're also really good at educating the patient pre and post. So it takes some burden off of my sales team, which they don't need to be spending that time doing. They need to be selling when they can.

But we have a goal to get to 100 by the end of the year. We're roughly at about 80 now. So we've done a great job in the first half of the year, adding strategically where our commercial team feels it's important and also where we can drive additional volume. And again, if we have these -- sometimes there's a chicken and egg here, sometimes we'll put somebody in a market that we want to grow, and then we'll start to really hit that with our reps as well as our direct-to-consumer advertising. So this has been a tremendous success for us. There is good economics to this as well. So this pays for itself. And ultimately, as we build it out, it will be a very important part of our both commercial and growth strategy.

90% of our folks are coming from another sensor, which is great, right? And certainly, they are more familiar. They're easier to onboard. 10% are CGM naive. But again, we get a lot of very positive feedback for the performance of our system, and that's certainly something that we're always proud of. The system works tremendously well. And once somebody does try it and once someone has access to it, it tends to be very sticky. And as Fran and David both said, it's used quite often, right? So the persistency is there. Super happy about our relationship with twiist.

One of the things for me as a commercial guy with twiist is they have 100 territories, right? So I've been able to amplify my small team's voice through their partnership and vice versa. So we're bringing new patients to twiist, and they're bringing new patients to our Eversense product. And we've actually exceeded by quite a bit how many have combined systems or are using the combined system. My 8 years at Tandem, there was different uptakes when we did different versions of CGMs with our pump, but this went much faster than I expected. So I know you all want to ask, are we doing additional ones? The answer is yes. Tim and Mukul and I will be meeting with our normal friends as we're here at the show. But right now, we're really focused on this. And then hopefully, we'll be able to do some additional integrations here over the coming year or so.

And then in Europe, we have transitioned successfully 3 out of 4 of the countries this past week. So they've come from Ascensia to Senseonics. So they're now fully over as Senseonics employees. Our General Counsel back there, Ken, can you say Italy will be Monday, I hope. So we are close to the last one. But we've had a transition service agreement with Ascensia all along. They've been great partners. As you know, I came from that team. So it really hasn't hindered us, but we're looking forward to getting everybody over.

And we have now replaced the BGM sales efforts with our own sales reps, and about 95% of those folks have either been identified or hired now by us. So we're going to have very focused and targeted commercial and sales efforts in those 4 countries. And 365 has launched in Sweden and Spain already. Germany will go here next week, and we just need to move some of the tenders over in Italy, and we'll be launching in Italy here, most likely in July timing, but there is certainly some pent-up demand. And then we will have 365 in all markets, which Rick likes, because that helps the margins. E3 will transition out and then we start to move towards Gemini.

So that is my quick slides, and Mukul will talk about Gemini and Freedom and how easy it is to get those to me.

Right there. Always difficult to come behind a commercial guy. So when we set out on this journey a long time ago, when we started with the 90-day and then 180, but we always had this one vision in front of us, get to one sensor that will last the full year, get rid of those daily calibrations that was a burden. And then no transmitter, no on-body component for the device. We have achieved the first 2, right? We do not have any changes for the entire year. No daily calibration, but the weekly calibration we have on Eversense 365. And now we are looking at how do we remove those transmitters completely.

So to look at that, the 2 things that the transmitter does today is to power the sensor for every reading, because the sensor does not have a power source. It powers the sensor. And then the second thing it needs to do is get the data out from the sensor. So it takes the RF, through RF gets the data out, and then sends it over to the phone by Bluetooth, right? So those are the 2 functionalities we need to build into that sensor, and then we are able to do something that other CGMs cannot do. No on-body component for a CGM that works the entire year.

So we set out on this journey, and we are right there knocking at the door now with Gemini, which is the first step of adding a battery. So in this version of the product, we have added a battery to the sensor. We went to the battery company that is very well known for implantable devices, Integer, or people who have been doing this for a while, Wilson Greatbatch. They had a battery. They made it small enough for us. And now we can basically get the sensor to collect data every 5 minutes. But to get it out, we still need the RF energy. So we still need to either get it out with a phone. You can scan it with your Google Pay, Apple Pay, the RF that you have on the smartphones, or you can wear a transmitter, which will continue working at a full-service CGM. So now you have a combination, the flexibility in one sensor to either use it as a flash FGM mode or as a full-service CGM mode, right?

Most important here is we kept the same sensor that we have heard from Dr. Ahn, Dr. Kaufman, and from Brian, we have tremendous success with the 365-day sensor, right, the Eversense 365 makes FDA very comfortable. They know that the sensor works. So all we are doing now is taking the new functionality that we have that we need to prove out, right, which is how do you get the data out with an intermittent scan. So that's Gemini.

And then the next stage beyond Gemini is to get communication inside the sensor, which is the same Bluetooth communication. Now there are many other implantable devices that use Bluetooth, but none of them use it in the size we are talking about, right? So that's the challenge in front of us. That's the one we are solving for. And I'll talk about the time lines and where we are in those 2 programs. But here, this is the Freedom product where you have taken out the RF antenna, created room to put the Bluetooth chip and the Bluetooth antenna. So we are basically keeping the same sensor, keeping the same form factor as Gemini here and now going on to have a sensor that's fully implanted with no on-body.

So where we are with the Gemini? We are currently in a pivotal study in the U.S., plan to finish it up by the end of the year. The study is a 3-month study. The patients are enrolled for 3 months. They come in. They are wearing Eversense 365 on one arm and the Gemini sensor on the other arm. They go through the clinical session, and at home they are scanning that device many times. And that's what FDA wants to see is the reliability of that scan feature, and that's all we are trying to prove to them. We finished it up end of the year, submitted to FDA. Since we're keeping the same sensor, we keep the same performance, iCGM designation, do a 510(k) and expect to be on market by Q2 next year, 2027. Right behind, we are already doing a lot of work that I'll go through in the next few slides on Freedom. That's pretty much running about 1 year behind it and expect to be on the market in second quarter of 2028.

So talk about Freedom, right? So same sensing. Talking about communication, we were able to find the right-sized Bluetooth chip off the shelf and a Bluetooth antenna that works for us. And then we are basically putting all that together. We have done a few iterations in technology, done a lot of testing, both on the bench and a couple of animal studies now. I'll show some data from the second animal study that we are still kind of concluding, but I stole away from the engineers. And then from the battery perspective, we were able to get -- while we were working on Gemini, Integer was able to put in the second-generation chemistry in the same form factor.

That was the challenge we put in front of them is to not grow the size of the battery, but get me more juice in the battery, so I can power the Bluetooth. And they were able to do that. We have about 1 month buffer where we stand on today's Bluetooth communication that we are running. And obviously, we are trying to refine that with external partners, better protocol so that we can get it to be even less power hungry. But today, we already have a 1-month buffer, right? So for a 12-layer or whatever our power budget is, the battery has proven to be more capacity than that. The battery is finishing up. They already have batteries for us that are in a first-in-human coming up, and then they will finish their verification testing end of the year, be production ready by Q1 '27.

So we just concluded an animal study. Again, this is some iterations of bench and then going into -- sorry, animal study, 3 animals, pigs, and we had 2 different antenna variants that we were trying to figure out. One was hand-wound helical antenna and other one was just off-the-shelf that we call the Johanson based on the name of the vendor. The way we were doing it was looking at a couple of locations on the pig. These were early prototypes. So you can see that RSSI is the lower number, lower absolute number is better. That gives you the strength of that Bluetooth communication.

And this was somewhat freeform study. We were kind of -- this data shows you an aggregation of 50 days, about 18,000 points, I believe. And it's basically let those animals move around in enclosures, and we tried 3 different enclosures, starting with an 8-feet enclosure, then going to 15, and then going all the way to 25. And this is basically just looking at what works and what doesn't work, right? Very directional study. So as much as we would have wanted many more greens, this is very exciting, right?

What it tells us is Johanson's antenna, which is basically off the shelf, I don't have to have somebody wound (sic) [ wind ] an antenna. That works for us. And we have configuration where we are seeing 100% success rate when you're within 8 feet, right? Think of the typical use case, most of the other implantable devices using Bluetooth are always labeling it up to 6 feet, right, arm's length. But this, we were able to get up to 8 feet, 100% communication, and then varying when they're allowed to walk up to 25 feet. In that enclosure, we are seeing, in some cases, up to 83% connection. So this is a really exciting start. They're still looking at the data. They're still trying to understand when the failures happen, we had cameras in those enclosures. So that people are trying to figure out when do we really lose communication, what does it correlate to. But overall, we are very excited where we are today.

What this does is get us ready for building a sensor for first-in-human, which is the next step. So we plan on starting our first-in-human study somewhere in Q3, early Q3. That should give us the confidence and the data to support a pivotal study and go to FDA looking for an IDE at the end of the year, early next year. And then from there, get into a pivotal Freedom study in 2027, finish it up by end of '27, go through 510(k) Q1 '28, and get in front of public by second quarter. So that's where we are. And we can talk more about it later. Thank you.

Thanks, Mukul. Good morning, everyone. I'm Rick Sullivan, the Chief Financial Officer of Senseonics. All right. First, let's start with the financing last month. So we raised over $100 million of growth capital through both an equity offering and an amendment to our debt facility. This should provide us enough capital, we believe, to fund us through the launch of the Freedom product. The equity offering was just about $90 million of net proceeds. It was really led by 5 institutional investors that had really strong conviction in the Eversense story, and we appreciate their support.

And then Hercules Capital has been our lender for a number of years now and provided an amendment that gave us access to $20 million immediately and then have another $85 million that will be available over the next 18 months with the first piece of that being available later this year. From a pro forma perspective, certainly improves our balance sheet over $160 million, the $60 million we finished the quarter with plus the more than $100 million we raised. And then from a fully diluted position, we had about $52 million increases to 70 million shares outstanding.

All right. So for the past couple of quarters, I've tried to describe, in lots of words, on our earnings calls, the revenue streams and different channels of the business. And so I thought a visual might be helpful. So Brian spoke about our sales channels, the DTC channel with the advertisements that about $13 million we plan to spend this year, social media campaigns that are supported by that inside sales team. The HCP channel, which is the territories, the sales reps calling on physicians' offices across the country. And then our reorders. And as our patient base grows, the reorders will become a bigger piece of our business each and every year.

Next are the reimbursement channels. Our products are reimbursed through 2 primary channels. One is DME, durable medical equipment, through distributors that have contracts with insurance payers. It's about 40% of our volume. This is historically how CGM has been reimbursed. Through the distributor channel, we have distributor margins, there's prompt pays, there's rebates, and our patient assistance program is more heavily utilized through that channel. On the other hand is bundled pay, which is a bundling of both the product and the procedure. And because we don't have those gross to net adjustments from the DME channel, and we have Medicare included in the bundled pay, which is reimbursed at a premium, we do see higher ASPs and more of our business is now flowing into that bundled pay channel. Historically, it had been about 50-50. We did spend some time trying to optimize that channel and are now at 60-40 and expect to remain there for the remainder of 2026, but do foresee improvements in future years.

That leads us to reimbursement -- excuse me, revenue. So distributor -- first is the distributors. Those are the ones that service the DME channel. They typically hold 30 days of inventory. We recognize revenue upon our shipment to those DME distributors. Eon Care actually does support those DME distributors. So a patient would get the product from the DME channel. The Eon Care would do the procedure through a referral, and we would be able to bill those CPT codes just for the procedure. So there is some procedure-only revenue that comes out of our Eon Care network.

Eon Care also supports both Medicare and the commercial payers that use the bundled pay. And in that case, Eon recognizes the revenue upon insertion for both the product and the procedure. And then we have our consignment program. The consignment program is when physicians elect to enter into the program. There's a couple of hundred today where they'll have product on their shelf. When a patient is ready, they'll perform the procedure, they'll bill for it, they'll collect payment, and they'll keep the procedure fee for themselves and they'll remit the remaining product fee back to Senseonics.

We had a very strong first quarter. Q1 for our industry typically has seasonality. So we see declines there with deductibles resetting, higher patient assistance utilization. We also had the commercial integration that we needed to do as we brought on the Ascensia organization, and we still overperformed. And that overperformance was certainly a result of the revenue share being eliminated with the Ascensia partnership, but also some of that shift in sales mix to the bundled pay and then really just the continued execution.

There was minimal disruption with the commercial integration. Margins were really good. We're very excited about that. Some of it's with that sales mix. A lot of it was because we're now manufacturing a 365-day product globally. So for the launch of 365 in Europe. And then also, we did see this onetime benefit, right? So it wasn't quite 58%, back that out, 54%, still stronger than we thought. I think that led us to our guidance for 2026. We increased our revenue guidance to $60 million to $64 million, representing more than 80% growth year-over-year in revenue. We raised our gross margin guidance, 55% to 58%, and we're able to keep our operating expense and cash utilization the same.

And I think this really sets us up for the future. We do expect to continue to see significant growth with our current product, but also the Gemini and the Freedom products. That Freedom product, having a single sensor for a year with no on-body component, eliminating some of the components. And at scale, we do see margins growing beyond 70% with that product. And that will allow us to be both EBITDA and cash flow profitable in the next several years.

I think you've heard from everybody today, from Tim outlining the corporate strategy, from Fran talking about the very strong data that our product has, Dr. Ahn talking through the patient experience, Brian's commercial strategy, and our product pipeline, we're really excited about where we're headed. This year is really just the beginning.

So with that, I think I'd like to open it up for Q&A.

Thanks for hosting this event. Very informative. Appreciate it. Josh Jennings from TD Cowen. I think first, Brian, you mentioned just seeing the data at ATTD and again here today that as a commercial guy, that's exactly what you're looking for, what you need. Just wondering, just with the 12-year -- excuse me, 1-year data on the table in the real-world experience now, I mean, was there any friction or just, I guess, patient hesitance or physician hesitance in terms of that real-world data? And now that it's in place, could that just help the commercial effort? I mean, I think the answer could be, I don't know if it's obvious, but yes. But I think the other angle is just with the pump partners seeing that 1-year data, giving them more confidence to move forward with the partnership. So 2 different channels, but same question.

Yes. I think, Josh, I'd say apprehension was there. And I think on our behalf as well, we saw in the clinical trial, but wasn't going to work like that in real life. And so when Fran presented that in Barcelona, it was one of the happiest days in my life, because it wasn't just good data, it was great data. And so we're able to say that more confidently now in our conversations with our physicians. And we never get pushed on their performance, but was it going to survive? Are we going to have to explant and put new ones in, and we saw really good performance in the first year of the product. Yes, talking to the pump partners, this certainly helps that our product is working, and the data from the sequel product, the twiist product is helping, and the success we're having is helping my conversations to say the least. So all of it is on the upside.

And also the data is coming in a time where there's been some reliability and accuracy issues within the field with some of the other CGM players and their technologies. But I was hoping to just -- I think we had a discussion yesterday. I just wanted to build on it, just about quality assurance steps, what your competitors' quality assurance program is versus Senseonics. I think my new understanding is that I think every Eversense 365 device goes through some sort of testing before it's released and that may be different and a higher level of quality assurance than some of the competitors.

Yes, Josh. So one of the big differences in our technology is that every sensor goes through the quality assurance, and instead of doing a batch processing at the end, like every other manufacturer does, we have a sensor that gets calibrated. So each sensor has its unique calibration, sends the data from manufacturing onto the cloud, and that's what we retrieve and take back, right? So that's how we start. That leads to higher accuracy, right, because now they are tailored to each sensor, gives us much more control on the quality of it. It's never good when anybody goes through -- in the industry when others go through those quality issues where it erodes the confidence of the patient and the provider, so that's not good for any of us. But we do make sure that we try to stay clear of it.

One of the very timely thing. So I called Mukul the other day, I said, what happens if somebody steals some of our sensors in shipping? And it unfortunately happens. Well, the reality is, those sensors are turned off in the cloud. So even if you got access somehow to an expired or stolen Eversense sensor, you're never going to be able to activate it, because each individual sensor is controlled through linking to the cloud. So just a fundamentally different technology.

Jon Block with Stifel. Maybe Dr. Ahn, to start with you. Just at a high level, have you seen the awareness increase from your patient base around 365 as the company has leaned in a little bit from a DTC perspective. And then I'm just curious for those that are not aware and you broached the subject, call it, maybe talk a little bit about what you're seeing in terms of success or the conversion rate over to 365.

Yes. I think one of the things that I've been excited by as someone who wants more options for my patients is just I'm a very online person for better and worse. And I think just the public discourse that I see on different -- whether it's Facebook, whether it's Reddit, whether it's Instagram and TikTok, I think, in the comments, if you look at pretty much any complaint thread of transcutaneous sensors, there will always be people now popping up saying like, either I've tried Eversense or I'm thinking about Eversense. On the twiist user groups, I think there's a lot of like clamoring for Eversense. And so I think it's starting to get that kind of like, oh, what is that other sensor that we are hearing about that seems to have less issues. And I'm saying that in my practice, too.

Before, I'd kind of be like, hey, here's the Eversense, and people are like, okay, okay, let's get to the real ones. But now it's kind of like, oh, okay, like I can see why no pressure lows is a really good benefit. So I think the public perception seems to be improving and the awareness is really going up, I think, both as a combination of direct-to-consumer marketing and also some of the struggles that other sensors are going through.

That's great. Maybe just a follow-up. I'm not going to ask on the pump integration side, the timing, Brian, don't worry, I won't go there. But I'm just curious, for Gemini and twiist, when you guys next year release Gemini, what needs to be done from that integration standpoint, if anything? And then when we think about additional pump providers coming on board, as you guys talked about, you're closing in on Gemini, you seem to have a good line of sight for the trials, should we be thinking this is an additional partnership is likely post Gemini with other players rather than pre?

I think I got this one. For Gemini, nothing would change for integration with AID, because we'll keep the same transmitter, right? So it will only transmit and talk to a pump when the Bluetooth is on, on the transmitter, right? In the flash mode, you're not really transmitting to the pump. So nothing is changing with Gemini. With Freedom, the Bluetooth coming from the sensor will change, right, because now we'll be different Bluetooth protocol, trying to conserve all the power. And so those will have to be updated.

Anthony from Mizuho. Thanks for the Analyst Day and all the updates. Maybe for Dr. Ahn, when you think about just an inflection point for 365 implantable center, we have Gemini and Freedom coming. How much of a big deal from just patients that you're hearing would be to get rid of the on-body sensor? Is that a key inflection point? Gemini itself obviously has better connectivity and communication directly with phone. So how big of a leap step for users is connectivity with the phone and lack of an on-body transmitter in the next 2 years? And then I'll have a follow-up.

Yes. I think my area of interest is type 1 diabetes. I think in the type 1 diabetes population, removing the on-body system is massive. I think like that cannot be understated. I think Freedom is really groundbreaking, and I think that will be really exciting when that happens. I've been thinking about it a lot over the past 24 hours. I think Gemini could potentially be very exciting for the type 2 population, because I think one of the things I'm noticing with these over-the-counter systems that I think people might have expected to maybe have more market share is that I think people don't want things to be visible. You know what I mean? And if you have type 2 diabetes and you can just flash your CGM data, I think that could be a very appealing opportunity for people. So I think in the type 1 population, I think removing the transmitter all the time is huge. But I think in the type 2 population, that could make it a real big unlock. Yes. Does that make sense?

No, it does almost segregate. And I guess the follow-up is for Rick. When we look ahead to models in that '27, '28, even '29 time frame now, you have reorders in there. You're going to have 3 options available. So how do you think about reorders once we get into that era?

So 3 options. I mean, I think we'll see which products are on market. I think the reimbursement is pretty consistent. And so I don't know if we'll be able to ask for premiums. So we'll certainly try. And then we'll use specific products probably for specific markets. When we get to Freedom, I think that solves -- it can be a product for both type 1 and type 2.

Can you hear me okay? Just a couple of quick ones. One, I'd love your thoughts on ketones. Is it an opportunity? Is it a threat? Just general thoughts, ketone sensing.

Ketones is certainly something, Jayson, that we're going to -- we're absolutely looking at. We've actually done some of the experimental investigation to do that. Right now, as many of you know, we do actually have a multichannel analyte sensor. We've actually done the same thing for lactate. Ketones can be important. There's a lot of press on it right now in the type 1 space. And as another level of protection, I can see it having a role, especially in pediatrics. It doesn't really have the same benefit in the type 2 space, and most of our patients are type 2. So at this point, we're going to watch and to really see how the market acceptance is up on it. For some of you may know, my background is actually out of Abbott. We produced the ketone strip there, but we could never really get any uptake on it. So I see the safety value of it. I understand the reason why Abbott and Dexcom may be competing against it with their similar products, but we'll add it into our chemistry if it really makes sense and the clinical perception is there.

And then one for Dr. Kaufman. Just on the data you presented, I think it was 5,000 patients, patient or user characteristics, it was like 25% type 1, 50-some-odd type 2, and there was 18% not reported. And I don't know if that was just a general sampling dynamic or the real question is, are you seeing use outside of people with diabetes?

No, I think it's a reporting issue. We see the same when we ask them their gender, about 1/3 don't report. The age, about 25% didn't report. So I think it's just there's a group of people who just don't want to give up their own statistics.

I'm going to take the opportunity to ask a question that I get asked, David, since I noted your 350 sensor insertions and removals. Your perspective, people say, geez, we put the sensor in. Does it ever move? Does it ever migrate? Where is the sensor on those 350 when you go to take it out?

Great question. Yes, it doesn't migrate. Yes, I get that question a lot. I know with like Implanon and Nexplanon, there's stories of migration, but I've never seen the sensor migrate. I mean it might tilt a little bit, but it's essentially in the same spot. So yes, I've never seen it migrate.

[indiscernible].

Yes. So I mean, I was among one of the early adopters. It was a little bit of a -- there was a learning curve with removals more so than the insertions. But I have a clinician -- a physician in my office, and he just started doing his first removals in the past 3 months, and I was not involved in his training at all. And I was expecting kind of a call. I was expecting to like give him a pep talk, but I didn't even realize he was doing removals until after he had done like 5 or 6. And I was like, "Oh, I didn't even know you started doing removals. Like, how was it?" And he was fine. So I think the -- I don't know if the training system has got better or if he's just really talented, but I haven't seen it come up. And so yes.

[indiscernible].

I think so. I'm happy to talk to people and kind of give them my tips, but they've been really good about gathering my feedback. So maybe they're incorporating what I would have told him to their trainings and hopefully, it's helped them out. But yes, I was probably among the first people to get trained, but that was back in 2018 literally. So yes.

Even with the Ozempic effect, I mean, we've certainly seen patients lose 50 to 100 pounds while that year duration and it's still in the same place. It may be a little saggier, but it's retrievable.

Anthony again from Mizuho. Maybe looking at the capital raise and the efforts on DTC, just to recap on where the dollars are being placed regionally in the country? Which new areas are you looking to open up now that you're capitalized? And when you really make that push DTC into a local region, like what is the sort of turnaround factor or return profile of that as to when you actually see traction from a new patient implant standpoint?

Brian, do you want to talk about the audiences and targeting?

Anthony, we really do geofence our spend. And so we started with 50 miles from an existing inserter, and then we moved it to 75 and then in some markets, we move it to 100. Once you get past 100, we know that someone probably isn't going to drive 150 or 200 miles to get a sensor implanted. And if we start spending it in areas where we don't have inserters, we don't have reps to help the physician get onboarded, then we're just wasting our dollars. So as we can expand our territories, as we can expand our Eon Care facility, as we can expand additional insertion capabilities, then we do our DTC advertising on top of that. And our agency has every ZIP code, every -- it's a pretty cool program that is used for it.

We do try in certain areas to expand it a little bit. And certainly in rural areas, that helps a little bit more. Once we see success in certain markets, we actually put more dollars in those markets. I was with our biggest account from San Antonio last night. They want to see the data as to what they're benefiting from. So I can literally take it down to an account level. I can see every channel that we use. I can see every ad that we use. We can move them into different modalities, and we truly change things quite often. As soon as they start to get hot, we pour more on that particular ad, that ambassador, that 8-second clip. It's pretty high tech these days.

Meta went down here about 2 weeks ago for about 36 hours, and you would have thought our company was ending, because we had 50 people sitting inside with not a whole lot coming in, right? So that's how detailed that all gets. And our workable lead percentage is up because we can, to some extent, target those that are on insulin, those that are at the Medicare. Some of our ads are Medicare focused, for instance, and it drives a higher percentage in on a very profitable segment for us. So I could go on for hours and John Bradford is here, you want to stop by and get versed on what DTC looks like from an expert, come talk to my Head of Marketing. It's truly amazing.

And from an economic perspective, we spent about $13 million in the back half of last year. We learned a lot from that, and we're taking the same amount and spreading it over the entire year, and we're seeing improvements in the cost per workable lead, cost per opportunity. As leads come in, we categorize them as low, medium, and high. The medium leads convert twice as good as a low, and the high-quality leads convert twice as good as a medium. And so we're making the investments and the efficiency with the agency on getting more of those medium and high-quality leads. As Brian said, we're looking at where the appropriate regions are to turn up the DTC spend or add more to it.

And I'd just say lastly, our inside team is doing a great job. I've had almost no turnover in there. Ed Monis came from Medtronic with tremendous experience working for Jeff for several years, snagged a few folks from Tandem over and stuff and that team is really rocking right now. If that team isn't working, then you can do all the DTC in the world. And if it comes in and we don't handle it, then it's just a frustration to the patient. So we meter it by what we can do internally right now. And as we get to the second half of the year, we'll add a few more in there, because we're going to dial it up a little bit. And so it is a finely old machine finally, and I'm really happy with what we're seeing.

And maybe just for the physicians, when you think of an implantable 1-year sensor, it certainly makes sense. There's a gating factor, obviously, the implant and explant. I understand that. But where do you think a well-oiled implantable CGM can be as a percent of your patients 5 years from now? I mean, can an implantable option be 10% of the market, do you think? Is that reasonable?

Yes. Yes, I do. I'm not good at doing these numbers things. I'm just a clinician, but I mean, 10% to me sounds low like for a Freedom system. I mean, that's what people want, right? That's what people have been dreaming about, right? You want nothing visible. You want it to be all implant. Yes, you don't want the disease to be visible. That's literally half of what we do in helping people with type 1 diabetes. And I think you see the same thing in type 2 as well. So yes, in my opinion, 10% seems low, but I'm just a clinician.

And when I show the data that we skew to an older population, it's because the device really is geared toward that. You get to the Medicare age range with maybe some dexterity issues or visual issues or cognitive issues. Having an implant one time a year makes a lot more sense than having to repeatedly change the sensor yourself or wait until your daughter comes to change your sensor. So I mean, the characteristics that we have, that on-body vibratory alert, which enables them if they're having hearing or visual deficit. I mean, there's a lot of characteristics for the older population where I think the transcutaneous sensors just don't address their needs as well.

All right. Thank you, everybody, for joining us today. Enjoy the conference.

Good day, everyone, and welcome to Senseonics First Quarter 2026 Earnings Call. [Operator Instructions] Please note today's call will be recorded and I'll be standing by should you need any assistance.

It is now my pleasure to turn the conference over to Jeremy Feffer from LifeSci Advisors. Please go ahead.

Thank you. This is Jeremy Feffer from LifeSci Advisors.

Before we begin today, let me remind you that the company's remarks include forward-looking statements. These statements reflect management's expectations about future events, operating plans, regulatory matters, product enhancements, company performance and other matters and speak only as of the date hereof. These forward-looking statements involve a number of risks and uncertainties. A list of the factors that could cause actual results to be materially different from those expressed or implied by any of these forward-looking statements is detailed under Risk Factors and elsewhere in our annual report on Form 10-K for the year ended December 31, 2025, and our 10-Qs and our other reports filed with the SEC. These documents are available on the Investor Relations section of our website at www.senseonics.com. We undertake no obligation to update publicly or revise these forward-looking statements for any reason, except as required by law.

Joining me today from Senseonics are Tim Goodnow, President and Chief Executive Officer; and Rick Sullivan, Chief Financial Officer. Brian Hansen, Chief Commercial Officer, will also be available during the Q&A.

Now I'll turn the call over to Tim.

Thanks, Jeremy, and I appreciate everyone joining us today. 2026 is off to a very strong start for Senseonics commercially and strategically. In the first quarter, we delivered $11.7 million in revenue and 58% gross margin. We view the combination of top line growth and margin expansion as early validation that our integrated commercial model can deliver with improving financial performance as we scale. Given all of this, we are raising our full year 2026 global net revenue guidance to $60 million to $64 million from $58 million to $62 million, representing year-over-year growth of 70% to 82%.

Beyond the financial results, we successfully completed the integration of the U.S. commercial organization, continued progress towards completing the European commercial integration, launched our first AID partnership, advanced our Gemini and Freedom development programs and added over $100 million in growth capital to our balance sheet. Taken together, these accomplishments give Senseonics the commercial control, the product pipeline and the financial resources to drive Eversense revenue growth, first through our compelling Eversense 365 offering and then through the next-generation CGM system that we are developing.

We're at an exciting stage of our journey and the opportunity ahead for Senseonics is significant. There's a lot more work to do, but we are now in control of our destiny with the right team, structure and strategy in place to accelerate our recent momentum.

Now I'd like to provide more detail on the encouraging progress so far this year. On the commercial side, execution was strong. The first quarter of 2026 was our first full quarter with direct ownership of the Eversense commercial organization in the U.S. following the January 1 transition from Ascensia Diabetes Care. Having the commercial team inside Senseonics gives us the ability to align sales strategy, field execution and market access priorities with our product development and our qualified manufacturing partners. This has been invaluable and that alignment contributed to an exceptional financial quarter.

In the quarter, we generated revenue of $11.7 million, a strong financial result that reflects growing Eversense 365 adoption in the U.S. and a focused reimbursement channel mix, which Rick will detail shortly. Equally important, gross margin reached 58%, driven by more new users, higher manufacturing volumes and the structural benefit of eliminating the Ascensia revenue share. We view the combination of top line growth and margin expansion as early validation that our integrated commercial model can deliver with improving financial performance as we scale.

Eversense sales have continued to grow, and we believe we remain on track to double patients this year in the U.S. Our direct-to-consumer channel continues to yield strong results. In 2025, DTC sourced new patient shipments doubled year-over-year. And within the year, our monthly DTC new patient volumes grew more than fourfold from January through December as we scaled our investment. That momentum carried into 2026. In Q1, DTC sourced new patient shipments grew nearly 100% compared to the first quarter of 2025, with DTC accounting for roughly 60% of all new patient shipments in the quarter.

The health care professional channel is also growing as our sales reps continue to become more efficient with March providing the most HCP sales leads in the company's history. We're also encouraged that patient reorders tracked above plan in Q1, an early signal of the retention dynamics we expect from our year-long product.

Following the positive reception of Eversense 365 in the U.S., we anticipate the current launch of our year-long sensor in Europe will support growth in these markets as well. In April, we inserted our first patients in Sweden, followed by Spain earlier this week. And we're in the process of launching across Germany and Italy, rounding out the 4 European markets we'll be serving following the transition of Ascensia's commercial organization. We also see Eon Care as an increasingly important growth driver for Eversense. Eon now has over 70 nurses available for insertions, and the team is well on its way towards our goal of 100 nurses by the end of the year. Critically, Eon Care now performs more than 1/3 of all Eversense insertion procedures. To put the reach of our broadening network in perspective, we have established Eon in 34 states and are continuing to grow its reach. This expansion across the country reduces geographic barriers that may have previously limited implantable CGM adoption. That reach is significant for several reasons.

First, it means that we have built meaningful insertion capacity that is not dependent on individual physician practices. This lowers the barrier for prescribers who offer Eversense. Second, it gives patients a more convenient path to access the only year-long CGM, including in markets where inserting physician availability has historically been a constraint. And third, it provides Senseonics with a scalable service infrastructure that grows alongside our patient base. We expect Eon Care's share of insertions to continue increasing over the rest of the year as we add more nurses and further expand geographic coverage.

In addition, the availability of Eversense with our first automated insulin delivery platform will continue to support our growth. In February, we announced the integration of Sequel Med Tech's twiist insulin pump with Eversense 365, the first automated insulin delivery system to integrate with a year-long CGM. Not only does this integration expand the options available to people with diabetes, but it also provides a technology that fits the reality of their lives. Our efforts have brought 2 advanced platforms to users, is combining the precision of the twiist insulin delivery system with the unmatched longevity and performance of Eversense 365 in a flexible, convenient offering. We continue to pursue additional opportunities to integrate Eversense with other pump platforms and are very encouraged by the early uptake of Eversense 365 as part of our first AID system. We've seen good early adoption with twiist. We've had exceptional anecdotal feedback from the initial users and the data presented at ATTD puts early numbers to the positive impact this combination is having.

I also encourage you to check out the data to be presented by our Chief Medical Officer, Dr. Francine Kaufman, at the ADA. This is further real-world evidence on Eversense 365, and the data shows a full year of strong patient adherence, glucometrics and hypoglycemic outcomes. It also validates our sensor's performance and accuracy across an entire year with the same performance between the first and second 6-month periods. Generally, we are very pleased with the progress we are making in advancing our penetration in the type 1 population. All of these areas of commercial progress are encouraging, and I look forward to continuing the exciting commercial momentum that is building.

Significantly, this momentum is driven by the successful integration of the Ascensia commercial organization into Senseonics. As an update on this initiative, we brought the Ascensia U.S. CGM organization into Senseonics on January 1, and that transition has gone smoothly as evidenced by our first quarter performance. The U.S. territories are effectively running and showing progress. We appreciate the continuing commitment of our new colleagues, and we're enjoying building our capabilities with them directly as part of one aligned team.

We've continued to collaborate with Ascensia to complete the OUS transition and build a dedicated European commercial team to execute launches in Germany, Italy, Spain and Sweden. As mentioned earlier, we are now live in Sweden and Spain with Germany and Italy on track. As part of this, we have hired key additional roles to support those countries. We are working to finalize our business systems and to transfer the contracts, tenders and employees to within the new Senseonics organization. We are planning to close the European transition this quarter.

We've appreciated Ascensia's partnership over the past several years and their ongoing collaboration to make this transition smooth for both Eversense users, providers and commercial employees. At the same time, we recognize the value of having the full view of the product life cycle inside Senseonics, being more equipped to drive operational strategies and having the control and agility to rapidly respond to market needs. In addition, the full team is excited about being part of a single organization that is fully aligned and committed to building and growing the world's most advanced offering in continuous glucose monitoring.

While we continue our focused work to drive awareness and adoption of 365 today, we're also excited about further shaping the future of CGM with our compelling product pipeline for tomorrow. We remain on schedule to launch Gemini in the first half of 2027 as we target delivering a 1-year sensor with a battery for continuous and optional on-demand readings. Moreover, in the second half of the year, we plan to initiate the first in-human trial for Freedom, a 1-year sensor with built-in Bluetooth that will connect directly to the user's phone and insulin pump without a transmitter. We've also begun the important steps of building and scaling the manufacturing processes with our manufacturing partners as we advance towards the clinical trial and ultimate launch.

Additionally, we're also working on enhancements to our Eversense 365 app. This is currently in development, and we expect that to launch later this year. The feedback that we've received during early testing has been positive, and we look forward to rolling out the app to advance our customers' diabetes management decision-making, and we're excited about advanced AI features that will be added as well.

Finally, I'd like to update you on our recent financing initiatives. Delivering on the value creation opportunity our shareholders have in Eversense requires us to have the growth capital to support these initiatives. Therefore, to position us to execute on our strategies, we took 2 steps to substantially strengthen our balance sheet. On Friday, we executed an amendment and expansion to our credit facility with Hercules Capital, increasing that facility from $100 million to $140 million. We have drawn an additional $20 million above the $35 million that was previously outstanding. And there are additional draws of up to $85 million available subject to various terms and conditions. Additionally, on Monday, we closed on a public offering raising $92 million in gross proceeds through the sale of common stock and prefunded warrants. As a result of these 2 financing steps, Senseonics is in a stronger position to build on the progress we are describing today.

I'll now turn the call over to Rick to walk through the numbers.

Thanks, Tim. I'd like to begin today with an overview of our sales channels, reimbursement channels and revenue recognition to help clarify the mechanics of our financials. Now that the sales and marketing team is fully integrated into the company, I think it is important to provide additional details on what you should expect over the course of 2026.

Senseonics has 3 primary sales channels in the U.S., direct-to-consumer, health care providers and reorders. Direct-to-consumer sales is the largest U.S. sales channel and currently accounts for approximately 60% of our new patient growth. In the second half of 2025, we made the strategic decision to invest heavily in the channel and will spend a similar amount this year at approximately $13 million. We learned a lot last year about effectively deploying and targeting this spending and have applied those learnings in 2026, resulting in lower cost per workable leads and higher conversion rates.

Our second U.S. sales channel is health care providers targeted by our sales force. While HCP sales currently account for about 40% of new patient growth, this channel has the highest ROI due to repeat prescribers. In 2026, our sales force has continued to increase productivity, driving more and more new patient leads, and we expect this trend to continue each quarter.

Last, but critical to our business is our patient reorders, which will continue to grow each year. We expect 40% of our U.S. volume to come from reorders in 2026 and are focused on continuing to improve patient retention.

Now I'll move to U.S. reimbursement channels and the mix of bundled pay versus durable medical equipment. In bundled pay, the insertion procedure and the Eversense 365 sensor are combined in a single payment. It is the most profitable reimbursement channel and with good support from our inside sales team, approximately 60% of our volume is now flowing through this channel. This contributed to the favorable margins we saw in Q1. The remainder of the volume continues to flow through our DME reimbursement channel. The DME channel is serviced by distributors with payer contracts, and we recognize revenue upon shipment to the DME distributors. These distributors maintain appropriate levels of inventory, typically 30 days or less.

We service the bundled pay channel primarily in 2 ways. First, through our consignment program, where participating physicians keep inventory on their shelves, so the product is readily available for patients; second, through Eon Care, our wholly owned subsidiary that utilizes contracted nurses to perform the procedure once a patient has a prescription. In the bundled pay channel, we recognize revenue at the time of the procedure. With the integration of the commercial organization, we will no longer be reporting sales to Ascensia, so our reported revenue growth will more closely align with our patient base growth.

I hope these descriptions were helpful. Now let's turn to the financials for the quarter. In the first quarter of 2026, net revenue grew 85% year-over-year to $11.7 million compared to $6.3 million in the prior year period on the continued momentum of Eversense 365 new patient additions, retention rates slightly above plan and more of our business transitioning into the more profitable bundled pay reimbursement channel. U.S. revenue for the fourth quarter was $9.3 million and revenue outside the U.S. was $2.4 million.

In Q1 2026, gross profit was $6.9 million, an increase of $5.4 million from the prior year period. This increase in gross profit was primarily due to higher U.S. revenues driven by continued adoption of the Eversense 365 system, higher average selling prices as more of our business moves to the bundled pay channel and a more streamlined manufacturing and supply chain contributing to improved margins. During the quarter, we recognized a onetime benefit of $0.5 million in cost of goods sold due to the utilization of raw materials for the continued commercialization of Eversense E3 outside of the U.S. Excluding this onetime benefit, gross profit margins would still be above plan at approximately 54%.

Research and development expenses in Q1 2026 were $8.6 million, an increase of $1.3 million compared to the prior year period. The increase was primarily due to new R&D projects, the ramp-up of new clinical trials and increased headcount to support these activities.

First quarter 2026 selling, general and administrative expenses were $30.2 million, an increase of $22.5 million compared to $7.7 million in the prior year period, primarily driven by the integration of the commercial organization, including increased personnel, transition support services from Ascensia, direct-to-consumer marketing and other operational costs.

Net loss was $32.3 million or $0.71 loss per share in the first quarter of 2026 compared to a net loss of $14.3 million or a $0.40 loss per share in the first quarter of 2025. Net loss increased by $18 million, primarily due to increased expenses resulting from the costs related to taking over the commercialization and distribution of Eversense.

As of March 31, 2026, cash, restricted cash and cash equivalents totaled $64.6 million, and debt and accrued interest was $35.2 million.

Q1 delivered, and we're building on that momentum. We're raising our full year 2026 global net revenue guidance to $60 million to $64 million compared to $58 million to $62 million previously. This updated revenue range represents notable year-over-year growth of 70% to 82%.

Our business is seasonal due to the resetting of patient deductibles at the beginning of the calendar year and heavier utilization of patient assistance programs at that time to offset out-of-pocket costs. The seasonality of our business, the fact that we launched Eversense 365 in the fourth quarter of 2024 and the second half focus of our investments in DTC to drive awareness in the back half of 2025 contribute to our revenue being more heavily weighted to the back half of the year. We expect to see approximately 40% of the sales in the first half of the calendar year and 60% in the second half.

Taking into consideration our margin performance to date, along with the planned launch of Eversense 365 in Europe, which will allow us to focus primarily on a single product globally, we now expect full year 2026 gross profit margin to be between 55% and 58%, increasing in the back half of the year. We are excited by the financial results in Q1, driven by the integration of the commercial organization and expect to see continued improvements in our top line and the expansion of our gross profit margins.

Due to the integration of the commercial organization and supporting transition service agreements from Ascensia, we expect operating expenses to be between $150 million and $160 million with increases primarily in SG&A and a smaller increase in R&D for the Gemini pivotal trial. We expect cash utilization in 2026 to be between $110 million and $120 million, largely as a result of increasing SG&A due to bringing the sales and marketing teams in-house.

Earlier this week, we completed an equity financing and expanded our debt facility with Hercules Capital, adding more than $100 million to our balance sheet. We issued common stock and prefunded warrants to institutional investors for gross proceeds of $92 million and drew an additional $20 million on our $140 million debt facility, bringing total debt outstanding to $55 million. We believe this is the right mix of debt and equity in our capital structure, and we believe we now have the financing in place to get us to the anticipated launch of the Freedom product in 2028. We're excited that our strengthened balance sheet will allow us to drive shareholder value by supporting the continued investment in Eversense 365 and future generation products while focusing on executing our commercial strategy.

With that, I'll turn it back to Tim.

Thank you, Rick. To wrap up, I want to step back and frame where we stand. Senseonics entered 2026 with a clear thesis that bringing the commercial organization in-house, combined with the strength of the Eversense 365 product would unlock revenue growth and margin improvement. The first quarter results support that thesis, $11.7 million in revenue, gross margins of 58%, DTC new patient shipments nearly doubling and Eon Care now performing more than 1/3 of all insertions, as well, patient reorders are tracking above plan. At the same time, our balance sheet is healthy. Our pipeline is advancing on schedule with Gemini targeted in the first half of 2027 and Freedom on track to enter its first human trial later this year, and we have the organizational structure in place with a full U.S. team integrated. The European transition is underway and Eon Care is scaling.

We believe Senseonics is positioned to become the company that reshapes continuous glucose monitoring, and we intend to execute with the discipline and urgency that this opportunity demands. With the momentum that we are building across our commercial, development and financial initiatives, we're optimistic about the remainder of 2026 and beyond.

We look forward to speaking with many of you at our event during this year's American Diabetes Association Conference in New Orleans.

With that, I'll now turn the call over to the operator to answer any questions that you may have. Thanks once again for your time today. Operator, let's go ahead and open up the call for questions.

[Operator Instructions] And we'll take our first question from Anthony Petrone with Mizuho Group.

Congrats to the team here. Maybe Tim and Brian, sort of a 2-part question here. Ascensia coming over in the U.S. described as a seamless transition. Just wondering, though, as you sort of put them under a new corporate umbrella, is there any like lag as to what their contribution is going to look like for turning on new sites contributing to patient growth. It seems like there can be more of a tailwind certainly as this year goes on and then that follows through to the European experience.

And then a follow-up here quickly would be on the cadence of investments. You're coming off the capital raise, debt and equity. Investments in regions was a gating factor. DTC drives new patients. You have the investment opportunity with the Eon inserter. So how do you look at the pace of investments? Where will they be focused kind of initially in the first half to the second half? And how meaningful do you expect a conversion in new patient growth this year from the increased investments?

Thanks, Anthony. In regards to the transition, I'll speak to that or at least introduce and Brian can come in. But it really has gone quite smooth, right? The sales reps were obviously -- we work with them pretty extensively in the fourth quarter, made sure they had everything they need. Even simple things like keeping the exact same cell phone numbers, all of that happened. So we pretty much flipped the switch on December 31, and they were calling on the same accounts, really picked up everywhere that they should have. So we don't -- we haven't seen and don't anticipate any lag in regards to their efforts and capability.

Brian, I don't know if you had any further qualification for that or...

Anthony, I'd probably add to that, that on the EU side, right, for our 4 European countries, we're moving from the BGM sales efforts to hiring sales reps to now take over those activities. So if there's a lag, it's in our 4 OUS countries. But as Tim said, the U.S. was fairly seamless.

Yes. And then Anthony, I'll cover the investment question. So we stuck to our original plan. Our original plan does call for an increase in DTC spend in the back half of the year from where it is in the first half, but still in that $13 million ballpark. And we are certainly monitoring the sales force. We have 43 territories today with a plan to maintain that level and increase it next year and the following with our future generation product launches.

We'll take our next question from Josh Jennings with TD Cowen.

Nice to see the strong momentum here in the early part of 2026. I wanted to ask just about the stat about 60% of insertions are coming through the bundled pay channel, Tim and Rick. And just -- I mean, that's a nice higher number than we were anticipating here in the early days of 1Q '26 relative to, I think, where you exited in 2025. How do you see that mix evolving? Is that 60% kind of a steady state? Or should we be thinking that, that continues to move higher over the course of '26 and into 2027 with it being kind of, I think, a higher revenue, higher-margin channel?

Yes, you're right. Historically, we've been about 50-50 DME and bundled pay. And we certainly have focused some of our DTC spending and inside sales efforts on that bundled pay channel. So we were pretty excited as that our channel mix moved to that channel being more profitable, which was a good piece of the reason we saw the upside in our margins. We're going to keep focusing on that channel over the course of the year. But right now, thinking that the 60-40 is an appropriate target.

Yes. We are -- as Rick is pointing out, we are -- Brian's team is doing a great job to reaching out to the folks that are on Medicare, which is a pretty good portion of that. But we are also seeing some of the commercial payers transition to the bundled pay. So, Josh, I would expect that to transition, but over a couple of year time period. I don't think it's anything that will have precipitously in this year. So...

Maybe a follow-up, just a 2-part pipeline question. The first part, just thinking about the data that hit at ATTD with the Sequel integration and what will be put forward at ADA just on the performance of Eversense 365. There may be some other pump partners that are interested in integrating Eversense 365 here. Any updates on any partnership discussions?

And then also just with the Freedom progress and getting into a human trial in the second half of this year, maybe just help us think about how derisked that program is? Are there any further steps that need to be taken before you guys can move into that trial? I guess what boxes are left to be checked before the trial can kick off?

Sure, Josh. On the first part on the -- yes, sorry, the data with -- that Fran is going to speak to. That's going to be an extension of the work that she did. We now have a notably much larger population of the Sequel folks. We're seeing really encouraging results there. She did get an oral presentation. We'll also have a lot more extension of the 365 data. So that will certainly be -- that will be encouraging, and we're looking forward to the results from that.

On the pump partnership, we continue to be very active. We don't have anything to announce, but it is an important focus for us, and we're continuing to make progress.

On Freedom?

Josh, this is Mukul. On Freedom, we have been making a lot of progress. We are doing a second preclinical in animals. And now we think we are at a stage where we can take -- we've taken the risk out of the product and take it into humans. The first in-human, we'll be doing outside U.S. in a feasibility study. And then we'll bring the data over to start discussions with FDA to get a pivotal study, IDE in by end of the year.

We'll take our next question from Matt Miksic with Barclays.

Congrats on a really great quarter. I had one question on just sort of like the retention of some of the folks using the system and then one on sort of the next-gen technology platform power enhancements that you've made because it's a question that I get fairly often from investors.

So the first, you've talked about sort of like the percentage of folks that will renew the first time, the second time and the third time. And I'm wondering now that you're a year in change in on 365, if you're seeing any changes in that or improvements in that just because I think that was like a 6-month statistic before. Just wondering if that's changing at all? And then I have a quick follow-up.

Yes. Obviously, we don't have the multi sensors at this point, but we are encouraged. The historical has been first to second is around 75%, second to third is around 85%. By the time you get to your third sensor, it's well into the 90s. And I think we're continuing on that track. We don't yet have the data, obviously, for the second year, but the first data is quite encouraging and frankly, was a little bit stronger than we had modeled. So we feel quite good about the experience we're seeing in the 1-year sensor.

What was the question on battery powering?

He was going to ask the question to follow-up.

Did you have a question on the battery, Matt?

Yes. Sorry about that. Yes, I accidentally put myself back on mute. Yes. Just maybe talk about how to think about the sort of level of work that you've done so far on sort of the next-gen battery platform, what maybe the technology risk is to that or the manufacturing risk or how to frame that just given that it's the next big thing in the pipeline?

Sure, Matt. So the battery comes from Integer, right, that they're pretty much the only manufacturer of implantable batteries for all medical devices. So there's no technological risk. The chemistry we are using is very well-known in the cardiac and neuromodulation devices used over 2 decades. So -- and all those choices were made just to make sure that the risk is low. FDA knows that company pretty well.

So for Gemini, we have already attached the battery. We already have it in clinical study. So there is no technical risk left in Gemini. Going beyond the battery is the Bluetooth that comes new to Freedom, and we have made a lot of progress there. And as we have stated earlier, we are ready to go into humans to kind of start collecting data while we continue to refine the Bluetooth technology in that really small form factor.

We'll move next to Sean Lee with H.C. Wainwright.

In the prepared remarks, you mentioned that DTC is becoming an increasing larger piece of the new patient adds. So I was wondering, have you seen any changes in the cost per patient out through these channels pre and post the Ascensia transition? And what point do you think we can get to once it's fully ramped up?

Yes, sure, Sean. I'll take that. So I think if you remember, the back half of 2025, we made significant investment in DTC, certainly drove increased awareness of our product, but those cost per workable leads were higher, it did become a little bit less efficient. And so, in 2026, what we did is take the same amount of spend that we spent in the back half of '25 and spread it all year long. And so although we're making smaller investments on a monthly basis, we're seeing improvements in both cost per workable lead and in our conversion rates. So we've learned a lot with that investment we made in the back half of the year and are certainly tweaking algorithms and spend levels to make sure that it's extremely efficient. So we're pretty happy with the progress we've made so far in Q1.

Great to hear that. And with the competition that Dexcom and others are coming up with these long next-gen short durations. Again, how does -- how do you defend the value proposition of Eversense 365 versus these other sensors that are coming in and potentially lower price points?

The value proposition for Eversense continues to be the same. They have made some changes from 14 to 15 days, but obviously, that's significantly different than a year-long sensor. The primary premise, of course, a person with diabetes is they'd like to think less about their diabetes technology and more about the rest of their lives. So as we manufacturers can make it simpler and easier to use, they will reward you for the purchase of a quality product. And Eversense certainly fits that bill. So a year-long, I'm not having to think about a sensor change is really very attractive to people, and that's why we're seeing the growing penetration that we're seeing.

[Operator Instructions] We'll move next to Ben Haynor with Lake Street Capital Markets.

First off for me, just thinking about some of the data that you presented at the ATTD conference on the first 5,355 patients. You have really good time and range, really good GMI look better than what a lot of competitors have published both on the CPM and CGM pump side. Can you talk about whether that got much attention or kind of any color on how that was received at that conference?

Yes. We've actually received quite nice feedback from it. I think one of the things is, we'll have an extension on that at the ADA that I think will get further coverage, but we've also been in the process of getting that peer-reviewed -- written up and peer-reviewed. And that's really the next big step for us to get further visibility of it. So I would hope that later this summer, we'll have a peer-reviewed publication that will strengthen the publication and rollout of that information. But the feedback certainly has been positive.

As we pointed out, we feel very comfortable. You get the long-term compliance, obviously, of Eversense at 365 days. And the algorithm, the loop algorithm has some pretty attractive attributes and is performing pretty well. So when you put those together with our high-precision pump like you get out of Sequel, you get those very, very good results.

Excellent. And then, I guess, this kind of dovetails with one of Josh's questions on that -- the data that was with the first 100 or whatever was Sequel pump users was -- does that help the level of attention and maybe get some of the other potential pump partners across the finish line? Or is that not enough patients yet or how is the right way to think about that?

I mean, it's definitely helping with the partnership. Brian, do you want to speak to that? Your team is spending a lot of time working with them.

Yes. I think both the success we've had in the first couple of months of the combined system has opened some eyes and exceeded our expectations. And clearly, the data was good, both on the sensor and the sensor and the pump. And so, any time you can show that data in real life now, it substantiates a whole lot. It just helps a lot of conversations, Ben. So very happy with it. And yes, it's helping the conversations move forward.

And this does conclude the Q&A portion of today's event. I would now like to turn back to CEO, Tim Goodnow, for any additional or closing remarks.

I'd like to thank everybody for participating, and we look forward to updating you next quarter.

So with that, we'll go ahead and end the call. Thank you.

Thank you. This brings us to the end of today's meeting. We appreciate your time and participation. You may now disconnect.

Good day, everyone, and welcome to Senseonics Fourth Quarter and Full Year 2025 Earnings Call. [Operator Instructions] Please note, today's call will be recorded. [Operator Instructions]

It is now my pleasure to turn the conference over to Jeremy Feffer from LifeSci Advisors. Please go ahead.

Thank you. This is Jeremy Feffer from LifeSci Advisors. Before we begin today, let me remind you that the company's remarks include forward-looking statements. These statements reflect management's expectations about future events, operating plans, regulatory matters, product enhancements, company performance and other matters and speak only as of the date hereof. These forward-looking statements involve a number of risks and uncertainties. A list of the factors that could cause actual results to be materially different from those expressed or implied by any of these forward-looking statements is detailed under Risk Factors and elsewhere in our annual report on Form 10-K for the year ended December 31, 2025, and our 10-Qs and our other reports filed with the SEC. These documents are available on the Investor Relations section of our website at www.senseonics.com. We undertake no obligation to update publicly or revise these forward-looking statements for any reason, except as required by law.

Joining me today from Senseonics are Tim Goodnow, President and Chief Executive Officer; Rick Sullivan, Chief Financial Officer; and Brian Hansen, Chief Commercial Officer.

And now I'll turn the call over to Tim.

Thanks, Jeremy, and I appreciate everyone joining us today. Looking back over 2025, it's hard to believe how much has changed at Senseonics. This time last year, Eversense 365 had only been available in the United States for a few months, and we were partnered with Ascensia Diabetes Care for all commercialization and sales operations globally. And we were conducting feasibility studies for our Gemini product.

On the financial front, our gross margins were hovering around 25%, annual revenue was less than $23 million, and we were in the process of executing a successful cost savings initiative to lower operating expenses.

Today, just 1 year later, Senseonics is a fully integrated developer, manufacturer and once again, seller of Eversense. We have an exceptional sales and marketing team led by Brian Hansen, our new Chief Commercial Officer, and Eversense 365 is now approved in both the United States and in the European Union.

In 2025, we achieved full-year revenue of over $35 million, growing approximately 60% year-over-year. Our year-long sensor, our continued partnership with health care providers and our enhanced direct-to-consumer marketing strategy have delivered tangible results with a doubling of patients on Eversense in the U.S., with new patient starts growing 103%, and we have already accomplished margin improvements to greater than 50% to finish the year.

2025 was certainly a year of transformation at Senseonics. The strategic decisions we made last year established a strong foundation for growth in 2026 and beyond. The biggest decision we made in 2025 was to transition all commercial activities from Ascensia Diabetes Care back to Senseonics, removing a layer of complexity from our operations and providing us with a new level of control and agility to execute on our focused strategy. By bringing the sales, customer service, marketing and sales operations functions in-house, we both eliminate revenue sharing with Ascensia and have the opportunity to respond quickly to meet the needs of people with diabetes. This change also brings an impressive team of commercial professionals to Senseonics.

This end-to-end responsibility for Eversense 365 unlocks operational efficiency, enhances our financial profile, enables more integration between our corporate objectives and commercial results. Additionally, this change simplifies revenue recognition and provides critical insights into the effectiveness of our DTC efforts.

PHC remains a meaningful shareholder in Senseonics and will continue to support the European commercialization of Eversense under transition service agreements through the anticipated closing in Europe in the second quarter and establishment of our own in-country operations. To implement this commercial evolution and drive long-term revenue growth, Brian Hansen transitioned to Senseonics and brought with him his complete leadership and sales force team. Brian was formerly the Head of Ascensia's CGM division and prior to that, the Chief Commercial Officer for Tandem, bringing a tremendous amount of experience and expertise from his accomplished career in diabetes care. In just a few minutes, I'll turn the call over to Brian so that he can give you a firsthand account of what has been a smooth and successful commercial transition. He'll also give his thoughts on our growth trajectory, which he will be instrumental in driving.

Excitedly, our integration with Sequel's twiist automated insulin delivery system was another significant milestone in 2025, not just for us, but for the diabetes community at large. Patients utilizing the twiist insulin pump can now use Eversense 365 to send glucose readings seamlessly to their pump for an entire year. This means eliminating a CGM change every 10 to 15 days and providing our type 1 patients with reliable and accurate glucose monitoring 365 days at a time. Our collaboration with Sequel combines the world's most sophisticated glucose sensing, algorithm control and pumping technologies and is just the first of many collaborations we hope to establish with pump partners.

Finally, in 2025, we made improvements in our financials, raised capital from institutional investors and strategic partners, executed a reverse stock split and began trading on the NASDAQ exchange. Similar to our other transformation initiatives, we believe these accomplishments set Senseonics up for long-term growth and disciplined financial execution.

Moving on to the leading indicators for 2026. I'll start with a quick reminder that our business is seasonal. The fourth quarter is typically our strongest quarter due to insurance deductibles being met. Further, a higher number of existing customers are available for reorders of Eversense in the quarter because the U.S. commercial launch of Eversense 365 took place in the fourth quarter of 2024. So early adopters translate into annual reorders beginning in this fourth quarter.

Through this, we saw meaningful quarter-over-quarter growth for the entirety of 2025, including growth in leads, conversions, new patient starts and prescribers of our sensor for the first time. We expect this momentum to continue in 2026, buoyed by our growth initiatives and investments, the twiist integration and expansion of Eversense into new markets.

In January, we received CE marking for Eversense 365, and we expect to launch global product to Germany, Italy, Spain and Sweden in the coming months with our own dedicated European sales force. We recognize that patients and providers in Europe have been waiting for us to deliver on our promise of 1 year, 1 CGM in their markets, and we now have the approval. We anticipate a similar uptake in interest in new patients on Eversense as we had in the United States.

On the product pipeline front, we continue to advance development of both the Gemini and Freedom products. We expect to complete the Gemini pivotal trials before the end of the year with the launch expected to follow in 2027. Gemini improves on the capabilities of Eversense 365 with an integrated 1-year battery and flash glucose monitoring capabilities without a transmitter. And Freedom is close behind with launch planned for 2028.

The Freedom system further improves on Gemini, incorporating direct wireless communication between the sensor and the patient's phone. I'm confident that our decisions on execution in 2025 will form the foundation of our 2026 growth. We have the right team, the right financial structure and the world's first and only year-long CGM to improve and simplify the lives of millions of patients worldwide.

And with that, I'll now turn the call over to Brian.

Thanks, Tim, and hello to everybody on today's call. I would like to begin by expressing my excitement to be part of Senseonics and my gratitude to the U.S. commercial team that has transitioned to Senseonics from Ascensia. Here in the United States, the move was fairly straightforward, and we were very happy to see nearly 100% of the employees transition with us. We were also able to recognize a few synergies in the move as well as shifting several roles around to better align our teams for success in the new year. The same effort is underway in Europe, where I expect the same result, and we have the launch of Eversense 365 right around the corner. More on that later.

As Tim mentioned, the strategic decisions taken in 2025 sets us up for continued success in 2026 and beyond. Our direct-to-consumer spend was a big growth driver for us in 2025, and we will continue to invest heavily in that channel this year. It was clear with our revamped DTC campaign and enhanced spend that we could drive significant lead volume and leads drive awareness, patient interest, prescriptions and ultimately new insertions translating into top line revenue.

There were multiple learnings from our work in 2025. Last year's back-end loaded DTC spend showed there is a sweet spot of investment for us. While we plan to spend a similar amount this year of roughly $12 million to $15 million, we will spend it a little more evenly over the entire year, building into the third and fourth quarters. This should allow us to be more efficient with our resources, targeting higher quality opportunities, a higher close rate and a lower cost per lead.

Another important initiative for 2026 is patient retention. While we are early in the renewals from our first patients on the Eversense 365 sensor, we are happy to report that patient retention is in line with our expectations. This is and will continue to become a more meaningful part of our business going forward. Programs put in place in 2025, as well as allocating resources to refine and enhance the patient journey with our product and our company, have positioned us nicely for the upcoming year.

I would also like to express my gratitude to the legacy employees of Senseonics that have built such an amazing product. Not only does it last a full year as expected, its performance is unsurpassed. We've also been working diligently to support the Sequel twiist, Eversense 365 rollout and expect to see an increase in the type 1 patients we serve as a result. As Tim mentioned, this collaboration enables us to combine 2 of the world's leading diabetes technologies to simplify life for patients requiring insulin. Anecdotally, I can tell you that from the team being at the Sequel Annual Sales Meeting held earlier this month, we are both aligned and excited.

Sequel has a large commercial presence in the United States, and I can confidently say that both teams have fully bought into this partnership. And now with Eversense 365 compatibility, Sequel is able to offer customers choice in selecting the continuous glucose monitor that works best for them. As a company, we more than doubled the number of Eversense users in the United States from 2024 to 2025. And for this year, our goal is to continue that momentum and double our patient base once again. We believe that we can accomplish this through successful renewal of our existing customers, driving new patient starts in the U.S. and abroad and having pump integration, which patients have requested for years. Acknowledging we are only a few weeks into the general availability of the combined offering, the results have exceeded my expectations.

We have detailed the success of our DTC campaign from last year. So let's turn to our health care provider channel that continues to grow as well. The number of providers actively prescribing Eversense grew more than 80% year-over-year, reflecting broadening awareness and confidence in the 365-day system. Access to the diabetes centers continues to grow, and we look forward to working closely with the Sequel commercial team to expand our combined reach.

We also saw continued expansion of the EON Care Group, our in-house inserter network. We finished the year with approximately 60 providers performing nearly 1/4 of all U.S. Eversense insertions. We will continue to add to this team in 2026, planning to end the year with approximately 100 providers driving an even greater percentage of the U.S. procedures.

Turning to the European launch and transition for a moment. We are in the final stage of completing our European arrangements with Ascensia, and both companies' teams are collaborating well to smoothly transition the European CGM business. Our team is working to establish the full organization we need in Europe, and we will utilize transition agreements with Ascensia in countries where we are currently building out our capabilities.

Overall, we made great progress with the transition since the announcement in early September. Coming off our national sales meeting to unveil the new Senseonics, the team is energized and off to a good start to the year. This is a testament to our employees' hard work in getting here, their dedication, their belief in the product as well as the potential future growth ahead of us.

I'll now turn the call over to Rick to walk through the numbers.

Thanks, Brian, and thanks to everyone joining us this afternoon. Starting with the quarterly results. In the fourth quarter of 2025, net revenue grew 72% to $14.3 million compared to $8.3 million in the prior year period on the continued strength of top line Eversense 365 revenue. U.S. revenue for the fourth quarter was $12.1 million and revenue outside the U.S. was $2.2 million. Importantly, in Q4 of 2025, we continued to recognize revenue through the collaboration agreement with Ascensia. We anticipate recognizing 100% of revenues going forward. We expect a similar channel mix going through our 2 primary sales channels in the U.S., direct shipments to DME distributors and through bundled payment of the procedure and product, primarily through our consignment program. Outside the U.S., we will sell both through tender agreements and to distributors depending on the region.

In Q4 2025, gross profit was $7.7 million, an increase of $3.7 million from the prior year period. This increase in gross profit was primarily driven by a full year of sales of Eversense 365 with more of our business going through our consignment sales channel where we recognized 100% of the revenue and recorded a sales commission expense to Ascensia based on the current year's revenue sharing percentage.

Research and development expenses in Q4 2025 were $8.8 million, a decrease of $0.6 million compared to the prior year period. The decrease was primarily due to the completion of the Eversense 365 system clinical trials and development efforts as well as a reduction in headcount. Fourth quarter 2025 selling, general and administrative expenses were $19.8 million, an increase of $10.9 million compared to $8.9 million in the prior year period, primarily driven by higher selling and marketing personnel costs, promotional expenses mainly due to the DTC investments, sales commission expenses as our consignment program expanded and other general and administrative costs, including transition costs incurred to support the commercial transition from Ascensia.

Net loss was $20.8 million or a $0.46 loss per share in the fourth quarter of 2025 compared to a net loss of $15.5 million or a $0.40 loss per share in the fourth quarter of 2024. Net loss increased by $5.3 million, primarily due to increased sales commissions and other costs related to taking over the commercialization and distribution of Eversense.

For the full year, total revenue was $35.3 million compared to $22.5 million in 2024. U.S. revenue was $27.9 million in 2025 compared to $15.3 million in the prior year, and the revenue outside the U.S. was $7.4 million in 2025 compared to $7.2 million in 2024.

Net loss for 2025 was $69.1 million, a decrease of $78.6 million in 2024. The decrease in net loss was primarily driven by improved margins in our business from Eversense 365. Selling, general and administrative expenses for 2025 increased by $18.3 million year-over-year to $52.5 million. The increase was primarily driven by our direct-to-consumer campaign investments, sales commission expenses as we increased consignment sales and costs related to the Ascensia transition.

Research and development expenses for 2025 decreased by $9.5 million from 2024 to $31.6 million. The decrease was primarily due to the completion of the Eversense 365 system clinical trials and development efforts as well as a reduction in headcount. As of December 31, 2025, cash, restricted cash and cash equivalents totaled $94.3 million, and debt and accrued interest was $35.3 million.

We expect full year 2026 global net revenue to be approximately $58 million to $62 million, representing year-over-year growth of 65% to 76% as the company completes the transition of Eversense commercialization from Ascensia and brings the entire sales and marketing infrastructure in-house. Due to the seasonality of our business with deductibles resetting at the beginning of the year and higher utilization of patient assistance programs, we expect to receive the majority of our revenue in the second half of 2026, consistent with what we saw in 2025.

Taking into consideration our margin performance to date, along with the planned launch of Eversense 365 in Europe, which will allow us to be on a single product globally, we expect full year 2026 gross profit margin to be greater than 50% beginning slightly lower and increasing sequentially. We are excited to simplify our business model, the integration of the commercial organization and will recognize improvements in our top line and the expansion of our gross profit margins.

Due to the integration of the commercial organization and supporting transition service agreements from Ascensia, we expect operating expenses to increase by about $70 million, consistent with Ascensia's prior commercial spend. In 2026, we expect total operating expenses to be between $150 million and $160 million with increases primarily in SG&A and a smaller increase in R&D for the Gemini pivotal trial.

We expect cash utilization in 2026 to be between $110 million and $120 million, largely as a result increasing SG&A due to bringing the sales and marketing teams in-house. Last year, we expanded our debt facility with Hercules Capital up to $100 million, providing access for up to an additional $65 million of non-dilutive capital to help fund our increased operating expenses for the integrated business.

With that, I'll turn it back to Tim.

Thank you, Rick. These are exciting times for Eversense with the accelerating growth of our revolutionary 365-day product. We've delivered significant new patient additions and top line growth across 2025, driven by expanding awareness and adoption of Eversense in the U.S. DTC investments continued to pay dividends as more people become aware of our compelling benefits of our product, and we now have access to a whole new population of patients following the launch of our first AID combination. Our margins are improving and the sales force continues to gain traction with a productive and energized sales force post transition.

We are already seeing encouraging retention with many early adopters now on their second year-long sensor, restarting the clock on 365 days of the best-in-class continuous glucose monitoring system. In our exciting pipeline, the disruptive Gemini and Freedom programs are advancing, and we look forward to updating the market on continued progress in due course.

Overall, this was a record-breaking year for Senseonics, but is only just the beginning. Having demonstrated strong commercial progress, we have more confidence than ever in the clinical and commercial potential of Eversense. We also have the control of our destiny following the transition with the right strategy in place and the right people leading the charge.

Thank you all for joining us today and for your continued support. We look forward to building on the momentum from the first year of Eversense 365 with another year of growth in 2026.

With that, I'll now turn the call over to the operator to answer any questions that you may have. Thanks once again for your time today. Operator, let's go ahead and open up the call for questions.

[Operator Instructions] We'll take our first question from Anthony Petrone with Mizuho Group.

Congrats on a strong 2025 execution year. Maybe, Tim, Rick, Brian, I'll start with maybe perhaps some of the trends you're seeing here early in the year. You're coming off 2025, 103% new patient starts for the year, hits a new high in the fourth quarter. And I know, Rick, obviously, there's a little bit of seasonality on policy resets here as you start the year. But anything you can provide just in terms of U.S. new starts at the beginning of the year here? And then I'll have a couple of follow-ups.

Sure, Anthony. Thanks for the question and time. We continue to do very nice on new patient starts. 365 product continues to perform just as we expect. Excitedly, we're now into the more routine cycle of getting the reinsertions. So new patient growth continues as we've expected it to, as we planned it to.

January typically is our softest month with the patient resets, but we planned for that. Very encouraging, we've seen a surprising amount of encouraging interest with the Sequel product and new patient starts associated with that. So that's very encouraging to see. And we continue to make progress, as you know, with the CE marking for the 365 in Europe. So we're looking for that region to really take off as well here later in '26.

Yes. The follow-up is on that top line guide, $58 million to $62 million. You have the U.S. clearance here earlier in this year as well as the twiist product launched February 19. So to what extent in that range do you have some contribution for Europe and twiist? And maybe just a recap on twiist specifically, how the economics are split between Sequel and Senseonics?

Sure. I'll let Rick speak to Europe. From an economic perspective, it's 2 companies that work together with -- from a marketing and awareness perspective, but the economics are unique to each company. So we sell a sensor. We recognize the associated economics. They sell a pump. And then through the integration that the iCGM enables, the patient enjoys that combination. So there's really no difference economically on a brand-new patient start that's on an MDI versus somebody that's on a Sequel pump.

And then for Europe, the past couple of years, we've seen fairly consistent revenue in Europe, really expecting the growth with the 365-day launch in Q2. And so that, along with the elimination of that revenue share to Ascensia, we do expect Europe to be about 20% of our revenue in 2026.

We'll move next to Josh Jennings with TD Cowen.

It's great to see that you're on track to double new patient starts and the patient base again this year. I just wanted to check in on the takeover of the commercial organization in the United States and from Ascensia. It seems like it has been seamless. All the sales reps converted over to under the Senseonics roof. But has it been as seamless as it sound? And have there been any friction points?

Yes, Josh, thanks for that. It's a good question. They're really as simple in the U.S. as it sound, it was as straightforward as we expected. They changed business cards. They got a new computer. They had to do a few things. We even pulled their cars over with them. So quite frankly, it went that simply. And we have a full boat and they all stayed and so we're very fortunate.

OUS, we have a little bit more work to do as we go through the transition here in the first half of the year, and we're hiring new folks to replace our BGM reps that were kind of supporting both products.

OUS has a few moving parts to it differently than the U.S. But so far, the U.S. -- I mean, we had our kickoff meeting in January, late January in D.C. and everybody was there and excited and focused. And so as I said in my comments, that one has gone very well, knock on wood.

Excellent. And do you mind just reviewing just where maybe some deficiencies were with Ascensia at the helm of the commercial effort? Was it investment levels in DCT? Was it aggressiveness in pursuing new prescribers? And how -- just review how you guys are filling any voids that were in play prior to taking over the commercial effort in the U.S.

Yes. The strategic execution around the commercial activities really did hand over one for one, even in Europe. Where we had some opportunities in the operational part of the organization, for example, there were some quality...

Duplication of...

Duplications that happened, some strategy elements that happened. So in those cases, we did do some rationalization. But obviously, since there was just a little bit of upstream marketing around product development that existed in the prior Senseonics organization, that's now been folded into the new Senseonics commercial team. And Brian and Rick and Ken, our GC just really did an exemplary job just leading this transition. To be able to get every sales rep, every inside sales rep to go over and be part of Ascensia at 5:00 p.m. on Friday and show up at 8:00 a.m. on Monday as a Senseonics employee was really, really impressive. So -- and absolutely 0 knock on wood customer impact through that transition. So it's just been managed and executed with a great ability.

That's impressive. And just with the active prescriber base growing 80% last year and with Senseonics now in control of the commercial efforts and the sales team, how do you expect that prescriber base to grow, one? And then two, I mean, just you guys are on track, your guidance when Ascensia was in control, the commercial effort was to double your patient base in '25 and '26 on the heels of the Eversense 365 launch with control now, complete control. I mean, could you do better than that? Could you see an acceleration in the prescriber base and new patient starts from this doubling, which is an impressive number, don't get me wrong, but...

Easy job.

Yes, certainly, it sounds like Brian is signing up for more than that. No, in all seriousness, obviously, it's a significant push in 2025. We did accelerate the DTC under the expectation, and I think we validated that perspective that this is really about awareness, right? So as we spent the DTC, we made more and more patients who then in turn worked with their providers and made more and more providers aware of the opportunity with Eversense, the excitement around 365.

For us to continue to sustain that level of growth, obviously, as Brian said, we are going to spend a significant amount in DTC, but about the same that we spent last year. We just did back-end loaded at the back half of the year. So the ramp is commensurate with that investment. So we expect that ramp to slow down a little bit over the -- with the normalization of that spend over the year, but still supporting that doubling of growth or that approximately 70% of revenue growth across the whole company.

We'll take our next question from Matt Miksic with Barclays.

Congrats on the great progress and results. So maybe some follow-ups. Lastly, on the investment in DTC has proved to be pretty successful last year. Within the spend this year, how are you thinking about it? Are you front-end loading it, back-end loading it? Is it just become sort of a reliable and important budget item?

Just any color you can give us on the size or the direction of DTC spend would be great. And I have a couple of quick follow-ups.

Yes. So Brian here. We spread it out a little bit more this year. It was, again, as Tim said, more in that last 6 months, and we really put quite a bit in that September, October, November time frame. That's when you want to put a bunch in as the fourth quarter is so strong.

But we also really stressed our team by doing that. And now to kind of level load it a little bit more, spending not quite half in the first half of the year and then saving a little bit to push into that really important third and fourth quarter is how we're looking at it.

And we also learned a lot last year of what works and what doesn't work, what segments we were getting better returns versus others. And so I think we're going to do a much better job this year taking our same spend, but maximizing it. And our team is rightsized for that as well right now. So we're expecting to spend the same but get better results as we spread it out across the year, $12 million to $15 million is what we said in our prepared remarks.

Okay. That's helpful. And then I guess the challenges or the sort of friction around getting more implanters up and running, getting more education out there, the DTC is part of that. What do you see as the primary constraints right now in terms of growth, in terms of your ability to address new patient interest and new clinician interest? What are the things you're trying to address to kind of feed things and make the most of the opportunity you have? And then I have just one last question, if that's okay.

Yes. Sure #1, Matt, it continues to be, as I said, it's around awareness. And that's where the DTC really helped that drove it from the consumer level. And then we would certainly augment that with a strong internal team that takes the inbound interest, does the facilitation, the adjudication, the communication of the economics. And frankly, does work with the outside sales team, which also plays a very big role in the awareness on the clinical side, on the professionals. So we're going to continue to do that.

We have 45 regions right now that are focused in the primary areas, and they are working hard to not only expand their reach, but also to go deeper within the clinics. So we think that's an opportunity as well to make sure that instead of 1 or 2 doctors in a clinic being heavy prescribers, we're going to turn that into 3, 4, 5 prescribers. So #1 is certainly about awareness. #2, from insertion, you're absolutely right. We're going to continue to focus on it.

That said, recall that our Eon program is a major initiative for us, right? We ended the year just about 60 nurse folks that were contracted with us to do the insertions, and we are absolutely on target here as we are now 2 months into it to end the year at 100 nurses.

And we anticipate they'll be doing 30% to 35% of all of our insertions in that time period. So a lot of organic growth through that support initiative as well.

Okay. And then just finally...

[indiscernible]

Go ahead. Sorry.

No, just we saw a lot of changes in reimbursement last year going from 180 to 365. And certainly, in the first 3, 4 months of the year, we had some things to work through. We've revamped that team. We've seen quite a few good results from that and really getting a clearer picture of reimbursement and make it easier for the physician and the patient to know exactly how this is all going to work.

And as Tim said, the insertion and reimbursement piece, we've come a long way over the last 12 months of that. And so we really believe we'll benefit from that here in 2026. We're becoming easier to work with and the volume has certainly helped with that.

And Matt, you'll recall, there was a little bit of a hurdle in early 2025 with the physician fee schedule. They first came out with G codes and then transitioned to the standard CPT codes. Well, we don't have it this year, right? They've republished the results or published the results for 2026. That started right away. So we've been into the economics and implementation of those right from the very beginning of this year.

That's great. And then just lastly, just on the type of new folks signing up, new users, experienced users, where they're coming from, the reasons -- I mean there's lots of reasons why they might choose to choose Eversense. But what are some of the major reason?

Yes, I'll let Brian speak to the...

Yes, maybe how that's changing -- if at all, how it's changing?

Yes, Matt, I will let Brian speak to the change, which we're absolutely seeing now with an AID partner. But from an investment perspective, much of our DTC and quite frankly, the facile nature of the buy and bill really makes this attractive product for people that are on Medicare.

So we have transitioned to probably 70% type 2 patients in 2025 or at least coming out of 2025. I expect that, that proportion will actually change back more towards type 1 now here with the pump partner. But we continue to see the majority of our patients are switchers that are either coming from 1 of the 2 transcutaneous sensors with about 15% or 20% are brand new to the space. Is that about right? So -- and then on the new pump rollout has been very encouraging.

Not much add to there, Tim. Spot on.

We'll take our next question from Marie Thibault with BTIG.

Nice job on this quarter for sure. I wanted to ask a follow-up here on the EON Care inserter network. You mentioned moving from 60 to 100 this year. What's sort of the gating factor on expanding that more quickly? I know they're doing about 1/4 of volumes. It seems like you could move to 1/3 or better of volume. So I guess what challenges, if any, are there in kind of expanding that network and moving more quickly on that opportunity?

Yes, Marie, there really isn't. It's really about volume and having enough work for them. And there's really no downside to going to 125 or 150 if the volume justifies it, we can keep them busy and we can identify folks in the areas where we need them. And so that 100 mark seems like a sweet spot, getting an increase in the percentage of insertions that they do is good for everybody, our economics as well as the quality of the work, and it frees up the physicians in the prescriber-only areas where they really don't want to do it.

So that's kind of a goal, but it could exceed that. There's nothing that stops us from doing more. We just need to have the volume to keep them busy and justify putting those in places and getting accredited and certified and trained. But it's a good question. There really is no barrier.

Okay. Good to hear. And as a follow-up, on the operating spend level that you discussed, I think, $150 million to $160 million this year. I understand that the bulk of that is kind of picking up where Ascensia left off in terms of the spend. But maybe we can sort of get longer term and understand, is this sort of a -- are you expecting a multiyear investment here? Should we expect continued step-ups in the out years? Certainly, I just want to understand it now that everything is under the Senseonics roof, if you will.

Yes. From the commercial spend perspective, it will certainly continue to grow as our revenue grows, but not at the magnitude that it is in 2026. And so it'll be more efficient. But as we launch new products, we'll expand the number of territories, increase the number of providers from the EON Care, et cetera. But again, it will not -- it will decrease as a percentage of revenue going forward.

And then this year, we do have a Gemini clinical trial, which is about $5 million of an increase in our R&D line. We'll see a similar amount next year for the Freedom trial, but then R&D should go down for further out years.

We'll move next to Jon Block with Stifel.

Tim or Brian, anything around the timing of additional pump partnerships coming on board? Do you expect that in 2026? And then, Rick, does the guidance arguably take into account any thoughts or additional pump partnerships this year?

Thanks, Jon. We do continue to work with additional pump opportunities. We're not yet announcing any of those or going public with them, but we do have quite a bit of interest. Obviously, getting the first one out creates a little bit of a dynamic of there's only one pump company right now that has access to the Eversense, and they've seen an encouraging conversion as a result of that. So we certainly expect that's going to work in our favor.

But we have not, as of yet, modeled additional pump companies in. We would look for that to be upsides, but still not announcing timing on the next one yet.

Okay. And then I'll just try to get a little bit more granular on the revenue. Rick, you provided some details on the cadence. It was more, I believe, what you alluded to, call it, like 2H '26 versus 1H. But any more details you can give, just even, call it, 1Q due to some of the moving parts with Ascensia?

When I look at straight around $10 million and those moving parts and here we are in early March. Is that sort of a good figure to, call it, set ourselves and then think about the other commentary you provided 2H versus 1H?

Yes. From a revenue perspective, we know that we have a seasonality in Q1 with the deductibles resetting and higher utilization of our patient assistance programs, which impacts that ASP through that channel. And then also the second half of the year is typically where we have now some large -- of our renewals from the past couple of years with the 365 launch.

And so the revenue is certainly back-half loaded, and I do expect it to be similar to 2025, thinking about 40% in the first half, 60% in the second half, approximately. And we will see certainly a step down in Q1 because of that seasonality from where we were in Q4.

We'll move next to Ben Haynor with Lake Street Capital Markets.

First off for me, on the DTC marketing, are you -- what sort of lessons are you learning there? Or, for instance, areas where you have more users, do you see a greater impact from advertising? Does greater awareness in a given area kind of translate to cheaper user acquisition? What -- how should we think about some of the dynamics of the DTC marketing?

Yes, we could talk about that for hours. The first and foremost is we tend to really focus where we have qualified inserters. And so we've played with that geography boundary. We can geofence our spend. It's very interesting when you start moving it 75, 100, 125 miles, how you start to reduce the effectiveness of it when you get too far away from an inserter.

So to Marie's question earlier of getting more insertion areas and coverage really helps us then maximize our DTC efforts going forward. Then you get into the different channels, you get into the different markets that you try to pour a little bit more into and it typically success breeds success there. And so we watch that very closely when we see areas that we get a better return, lower cost per workable lead, all the things that we follow very well. We continue to pour more in until we see it diminish at that point.

And then we certainly test a whole bunch of different ads and methods that we go through. And the team is constantly changing those almost on a week or 2-week basis in different markets at times as well. So sophistication is very, very interesting.

And what we found last year is we did fairly well, especially with the robust Medicare reimbursement we had, we really started to lean into some of those areas and again, where we had proper coverage for insertion. So I can go on and on to the different levers that we pull, but you really do start to lean into those areas you're doing very well and continue to invest more and more in those until you see it start to slow down a little bit. And that's some of the learnings we really got from last year and will continue this year, but I think we've got a more focused effort as we go into '26.

Great. That's helpful color. And then are you seeing any changes to kind of the behavior of new prescribers with the 365-day version?

No, I wouldn't say there's been a change in behavior. Certainly, interest level, the recognition and now the feedback, it's much more common to see feedback from users now that have gone on to their second sensor. The retention rates are encouraging, right? People love the product.

When they use it for as long as a year, it becomes part of their life, right? So I would say from that perspective, a convert is very, very attractive to us. But from a new patient perspective, I don't think we see any real behavior differences from -- as we've seen before nor from the prescriber side.

Okay. Got it. And then on that retention comment, can you remind us kind of where the expectations are for retention and that are being exceeded?

Yes. We haven't updated those as yet as we're still honestly pretty early into the 1-year renewal cycle. But our history had been from first to second sensor, it was in the 70s. Second to third sensor was in the 80%. And then by the time people were on the third sensor, it was 90% retention or sometimes even higher as is evidenced in our European market.

So I would anticipate that the largest drop-off is from first to second, but still some pretty attractive rates.

[Operator Instructions] We'll move next to Sean Lee with H.C. Wainwright.

I just have 2 of them. So first, for the European market, what's the expected time line for the rollout there? Are you seeing any hurdles from the transition, especially as I know some of these are affected by local purchase agreements?

Yes. The timing is consistent as we've guided since the beginning of the year, that being -- we expect the transition to occur in the second quarter. That is gated by the transitions that we're going through right now. Many of these markets are tender markets, so they're contracted with Ascensia, and we are transitioning those to Senseonics. We're in that process right now.

We did receive the approval of the CE Mark. So we have the authorization to go. And we'd anticipate mid-second quarter that we'll be rolling out the product into those markets. Some of the tenders will go -- frankly, go through the summer, even into early fall, depending on the contracts that we have. But say, May through September, October time period, we'll transition.

Great. My second question is on the Gemini study and how the potential approval would go for that. I was wondering, is the FDA requiring a second MARD for the flash mode for the Gemini because it has both -- 2 different functionalities versus Eversense 365? How does the inclusion of the dual modality impact the complexity of the trial?

Yes, the FDA will expect that in the flash mode or in the near-field mode with the transmitter, it will give you the same result. So the expectation is it's the same chemistry, the same sensor. Our expectation and their expectation should be that it's iCGM compliant. And as you recall, our MARD is around 8% that supports that, and we don't have any reason to expect that, that would change. But technologically, there should be no reason why you get a different result in flash or with near field.

Thank you. This does conclude our question-and-answer session and today's conference. You may now disconnect your lines. Thank you for your time, and have a great day.

Good day, everyone, and welcome to today's Senseonics Third Quarter 2025 Earnings Conference Call. [Operator Instructions] And please note, today's call will be recorded. I'll be standing by should you require any assistance.

And it is now my pleasure to turn the conference over to Mr. Jeremy Feffer from LifeSci Advisors. Mr. Feffer, please go ahead, sir.

Thank you. This is Jeremy Feffer from LifeSci Advisors.

Before we begin today, let me remind you that the company's remarks include forward-looking statements. These statements reflect management's expectations about future events, operating plans, regulatory matters, product enhancements, company performance and other matters and speak only as of the date hereof. These forward-looking statements involve a number of risks and uncertainties. A list of the factors that could cause actual results to be materially different from those expressed or implied by any of these forward-looking statements is detailed under Risk Factors and elsewhere in our annual report on Form 10-K for the year ended December 31, 2024, and our 10-Qs and our other reports filed with the SEC. These documents are available on the Investor Relations section of our website at www.senseonics.com. We undertake no obligation to update publicly or revise these forward-looking statements for any reason, except as required by law.

Joining me today from Senseonics are Tim Goodnow, President and Chief Executive Officer; and Rick Sullivan, Chief Financial Officer.

I'll now turn the call over to Tim.

Thanks, Jeremy, and appreciate everyone's time joining us today.

As mentioned in our earnings release earlier today, the third quarter was truly exceptional for Senseonics. We're pleased to see the growth in interest and adoption of Eversense 365, supported by Senseonics' DTC campaign and sales efforts. Our third quarter revenue grew by 90% from Q3 last year.

During the quarter, we also executed a memorandum of understanding with Ascensia Diabetes Care to reassume control of Eversense commercialization. We're excited about the upcoming change and seeing it as enabling us to control the strategy and investments into building Eversense. Through this change, commercialization efforts will continue to be led by Brian Hansen, who has been appointed as Chief Commercial Officer of Senseonics. I'll provide some additional details on the progress we've made with the Ascensia CGM division in a few minutes. But first, I'll share some additional accomplishments from the third quarter.

This time last year, we committed to doubling the number of patients on Eversense in 2025, and we are on track to achieve that goal. The 90% year-over-year revenue growth in the third quarter was driven by 160% in new patient shipments for the quarter over the prior-year period. These growth numbers are a testament to the effectiveness of our direct-to-consumer marketing, which we continue to invest in, driving demand with patients asking their physicians to prescribe the world's only 365-day continuous glucose monitor.

During the quarter, we made meaningful DTC investments to augment Ascensia spend, leading to an increase in patient leads through our digital campaigns of 300% year-over-year and 85% sequentially. Approximately 60% of our new patients in Q3 originated from our DTC advertising and 40% from HCP referrals, a historically larger portion now coming from DTC due to the scaling of our direct-to-consumer strategy and investments. We will continue to invest in direct-to-consumer marketing primarily through social media. Our increased spending has directly contributed to our increased number of leads, prescriber referrals and prescriptions written.

In the third quarter, we continued to break records for the most new patient starts with September being our highest number of new patient starts in a month and Q3 being our highest quarter in the company's history. New insertions increased nearly 150% year-over-year and more than 50% sequentially. As a result, our installed base grew over 150% year-over-year and nearly 40% sequentially, reflecting accelerating adoption of Eversense 365 among both patients and providers. As expected, reorder volumes were minimal for the quarter following the onetime transition to the 365-day sensor. This means that essentially all of those patients inserted with Eversense in the quarter were new users. In Q4, with the first 365 adopters coming up for reinsertion, reorders will make a more meaningful contribution to sales.

Our HCP channel continues to expand and deepen engagement as well. The number of providers actively prescribing Eversense grew more than 55% year-over-year, reflecting broadening awareness and confidence in the 365-day system. Importantly, we added 75 new trained inserters in the quarter, 140% more than the same time last year. The capacity of our inserter network continues to expand, ensuring continued access and scalability as demand accelerates. Many of these new patients that we added are now supported by our Eon Care direct insertion business, which provides greater access to Eversense through our network of providers.

Eon Care delivered a standout quarter, advancing its role as a key strategic driver of insertion capacity, access and standardized patient experience. While still early in its development, Eon now represents approximately 1/4 of all insertions nationwide, and we continue to expand Eon's capacity by adding significantly more inserters in the network in Q3. Eon is a central enabler of nationwide access and adoption. Patients love the convenience and affordability and prescribers appreciate having a trusted certified Eversense inserter they can refer patients to. We will continue to expand Eon's capacity in Q4 and beyond as it becomes an increasingly important enabler of Eversense growth.

In new product development, our CE mark application for Eversense 365 in Europe was submitted in February. And while in the final stages of review, we continue to expect to receive the approval before the end of 2025. Approval in Europe is anticipated to support additional growth beginning with our planned launch in the first half of 2026, now utilizing our own Senseonics European sales force after the transition away from the Ascensia BGM team. Prior to the European launch of 365, we expect to work with Ascensia through transition service agreements while we set up our own infrastructure to support a smooth transfer of some employees, the hiring of new CGM dedicated sales reps and transferring current customer contracts and tender agreements.

In contrast with the U.S. commercial integration, which we expect to be in place by January 1, the European transition will be taking place in the first half of 2026 with support from ADC. We are currently finalizing these arrangements with Ascensia and planning this transition in a collaborative process. We've made good progress since the announcement in early September. Nearly all of the employees from ADC's U.S. CGM business have elected to join the Senseonics team for the planned transition on January 1, including Brian Hansen's leadership team.

The European CGM employees are expected to transition over later in the first quarter. The sales operation team has been extremely busy getting our CRM system up and running and many of our distribution agreements between the distributors and Senseonics are already in place or in the process of being transitioned. We appreciate the cooperation between the Senseonics and ADC teams who are working hard to ensure that we get this right for the patients and the providers.

I'm pleased with the execution that's taken place over the past 60 days to bring Ascensia's CGM business into Senseonics. Our partner, Sequel is working towards expanding its launch of the twiist insulin delivery system and to include compatibility with Eversense 365, representing another top line growth driver for us in 2026. As a first pump integration, we are excited for the opportunity to be part of the closed-loop system with Sequel's twiist pump making insulin delivery decisions based on the data received from Eversense. We expect this closed-loop system to allow patients to forget about glucose monitoring for an entire year as their Eversense 365 communicates directly with the twiist for real-time adjustments in insulin delivery. Beyond Sequel, we hope to make additional announcements on insulin pump integrations in the coming quarters.

In addition to the integration work, our R&D team remains focused on delivering our seminal pipeline of products, Gemini and Freedom, with the IDE for Gemini on track to be submitted in the fourth quarter and the U.S. approval still planned for late 2026. We expect to file the IDE for Freedom in the second half of next year with the commercial launch of our truly invisible transmitterless 365-day CGM targeted by early 2028.

I'd also like to highlight the margin improvements that Rick will speak to. We are currently seeing meaningful improvements from the 365 product and expect to see even more as a result of the commercial integration. Based on what we've seen in the first 3 quarters of 2025, we are on track to hit out of the year with gross profit margins now north of 40% compared to 25% at the end of 2024 based on the benefits and performance of Eversense 365. And we expect our transition with ADC to further positively impact our margins.

As noted when the deal was announced, we currently project that our gross margin would grow to roughly 50% in 2026 and reach approximately 70% at scale for the unified business. Hopefully, this update on our growth drivers and our strong performance during the first year of the Eversense 365 launch gives you a good sense of where we are headed. To continue to drive shareholder value and meet the needs of our patients and providers, we remain committed to expanding access to our unique system and continuing to advance our technology to simplify glucose testing for people with diabetes.

I'll now turn the call over to Rick to walk through the Q3 financials, highlighting revenue growth, margin improvement, cost reduction and steady progress on execution.

Thank you, Tim, and thanks to everyone joining us this afternoon.

First of all, this has been an extremely busy quarter for Senseonics, and I'm grateful for all the team has achieved this quarter. Since announcing our plans to reassume CGM commercial operations for Ascensia Diabetes Care, we've made enhancements to the CRM system, expanded our ERP system, planned the transition of most of the necessary contracts with U.S. distributors and have offers accepted from almost all of the U.S. employees joining Senseonics from Ascensia. We continue to invest in DTC advertising. And as we've said previously, we plan to continue this spend for the foreseeable future. This investment has been extremely helpful in driving awareness and adoption as evidenced by our strong top line revenue growth.

As you may have seen, with support from our shareholders, we executed a reverse stock split. This was an important step for the company as we had the opportunity to speak with many investors that were interested in the story, but were unable to invest in a sub-$1 stock. The reverse split enables access to new large investors and significantly simplifies our cap table. Following the split, we currently have approximately 41 million shares of common stock outstanding.

Now transitioning to the quarterly results. In the third quarter of 2025, net revenue grew 90% to $8.1 million compared to $4.3 million in the prior-year period on the strength of top line Eversense 365 U.S. revenue. U.S. revenue for the third quarter was $6.4 million and revenue outside the U.S. was $1.7 million. Also, as a quick reminder regarding revenue recognition, through our collaboration agreement with Ascensia, we recognize a portion of the Eversense revenue under our revenue sharing agreement. With the expected transition from Ascensia distribution, we anticipate that we would recognize 100% of revenues due to elimination of the revenue share. Without the collaboration, reported revenue in Q3 would be nearly 20% higher based on the current channel mix, and we expect a similar channel mix going forward.

We also sell product through an office consignment program, which continues to grow, now making up over half of our global revenue in Q3. In this channel, we recognize revenue at the time of procedure and at the same time, record a commission expense to sales and marketing expenses based on the current revenue sharing percentage for Ascensia's commercial support, which we also anticipate being eliminated on January 1.

In Q3 2025, gross profit was $3.5 million, an increase of $7.5 million from the prior-year period. This increase in gross profit was primarily driven by the onetime charges incurred in the prior year as a result of the transition from Eversense E3 to Eversense 365 as well as more favorable margins on the 365-day product sales.

Research and development expenses in Q3 2025 were $7.8 million, a decrease of $2.7 million compared to the prior-year period. The decrease was primarily due to the completion of the Eversense 365 system clinical trials and development efforts as well as a reduction in headcount. Third quarter 2025 selling, general and administrative expenses were $15.3 million, an increase of $7 million compared to $8.3 million in the prior-year period, primarily driven by higher selling and marketing personnel costs, promotional expenses mainly due to the DTC investments, sales commission expenses to Ascensia as we increased consignment sales and other general and administrative costs.

Net loss was $19.5 million or a $0.43 loss per share in the third quarter of 2025 compared to a net loss of $24 million or $0.77 loss per share in the third quarter of 2024. Net loss decreased by $4.5 million, primarily due to improved gross margins of Eversense 365 sales in the United States and the overall reduction in research and development costs.

We now expect full year 2025 global net revenue to be approximately $35 million as we progress the launch of Eversense 365 in the U.S. This financial outlook takes into consideration several factors, including the time line for regulatory approval and the planned commercial launch of Eversense 365 outside the United States, plans with respect to spending on the U.S. DTC marketing campaigns to generate leads, continued progress in our launch activities, reinsertion and pricing dynamics with the shift from a 6- to 12-month product, the status of other sales and marketing initiatives and importantly, this excludes any onetime accounting adjustments related to the technical review of the final Ascensia agreement, including the transition of inventory back to Senseonics during the business integration.

The full year 2025 financial outlook assumes approximately doubling the global patient base in 2025 compared to 2024. We achieved our target of approximately 1/3 of planned annual revenue in the first half of the year, with the remaining 2/3 of revenue expected in the second half because of the steady increase in patients and the seasonality of program discounts and patient deductibles. We expect the majority of revenue in the fourth quarter due to the continued momentum in new patient starts and importantly, reorders from our first U.S. 365 patients as we pass the first anniversary of our Eversense 365 launch.

Excluding accounting adjustments and onetime benefits that have a positive impact to gross profit margins, we continue to see favorability due to our sales channel mix and the execution of our manufacturing and supply chain teams. We are continuing to monitor the impact of tariffs and currently expect that we'll be able to mitigate much of the negative impacts. Taking into consideration our margin performance to date, the anticipated continued favorability and excluding favorable accounting adjustments, we now expect full year gross profit margins to be between 35% and 40%. As Tim mentioned, we are excited about our margin expansion next year as a result of bringing the commercialization of Eversense back to Senseonics and expect gross profit margins north of 50% next year, growing to approximately 70% or more with scale.

It is still too early to provide guidance for 2026 at this time as we execute the transition of the commercial team and work closely with them on our financial plans, considering balanced investments in DTC, sales force expansion, other commercial programs, inventory balances across the various channels and inventory transitioning back to Senseonics depending on the final agreement with Ascensia. We intend to provide initial 2026 guidance in early January.

We continue to expect cash utilization in 2025 to be approximately $60 million, largely as a result of tight cash management while meaningfully contributing to the DTC spend. Our September 30 cash, restricted cash and cash equivalents balance was $111.3 million, and debt and accrued interest was $35.3 million.

With that, I'll turn it back to Tim.

Thanks, Rick.

These are exciting times for Eversense and the accelerating growth of our revolutionary 365-day product. We are seeing significant new patient additions and top line growth due to expanding awareness and adoption of Eversense 365 in the U.S. DTC investments are paying dividends as more people become aware of the compelling benefits of our product. Our margins are improving. The sales force is gaining traction, rep productivity is improving, and we are now entering a cycle where renewals will contribute to the sales as the initial 365 patients restart the clock on 365 days of care-free continuous glucose monitoring.

The Gemini and Freedom programs are advancing, and our European approval is on track as is our compatibility with Sequel's twiist insulin pump. We are making good progress in executing the transition to resume control of Eversense commercialization and look forward to our full independent direction in a couple of months.

Overall, this was a record-setting quarter, highlighted by all-time highs in new patient shipments, insertions and installed base. Our hybrid DTC and provider model amplified by Eon Care's growing network continues to accelerate awareness, access, confidence and growth in Eversense 365 and positioning us for sustained growth heading into 2026.

Thank you all for joining us today and for your continued interest.

With that, I'll now turn the call over to the operator to answer any questions that you may have. Operator, let's go ahead and open up the call for questions.

[Operator Instructions] We'll go first this afternoon to Matt Miksic of Barclays.

Congrats on all the great progress. I wanted to follow up on some of the growth opportunities that you've shown in DTC. And then I have one other quick follow-up. So just on the new patient implants, which made up the majority here in Q3, can you talk a little bit about what you're learning, if at all, about where these folks are coming from in terms of new, in terms of tired of externally worn sensors. Just color would be super interesting and helpful to understand where the demand is coming from. And then as I mentioned, I have one quick follow-up.

Sure, Matt. I appreciate the time as well. So overall, geographically, it's a very nice distribution as we are certainly focused on, obviously, the highest prescribing, best reimbursement, highest insulin utilization. So no one locale, I would say, is driving it. But we are definitely seeing, and we gave a hint to it is we are seeing a significant growth in the number of switchers. So as you may recall, we typically saw about 75% were folks that were coming from existing CGM. And now with this increased DTC, we're seeing that right around 90%. So we clearly are reaching out to the folks that are currently on CGM I would say of those switchers, it's probably 60%, 65% coming from Dexcom and 35%, 40% coming from Libre. So good distribution there. Typical demographics, we're still seeing a nice utilization and interest in the Medicare space with probably 2/3 of it still coming from commercial pay. So I hope that helps.

Yes. No, absolutely. And then just on the follow-up, the integration with twiist. Maybe if you could talk a little bit about how that ramps. I know twiist and Sequel are now kind of ramping up their launch. Maybe give us a sense of when you think and expect that will start to make a measurable contribution that we can start talking about recognizing in the numbers.

Yes. Matt, we are excited about that opportunity in 2026. They are still executing on some of their early launch activities. So our expectation at this point is that our first patients will go on early in the first quarter and that we would ramp from there. We've got a number of our large sites that are very interested, but there does need to be enough capacity on the pump side to support all of that. So my expectation is that for the first couple of quarters, it may be gated by the pump availability, but expecting that later in the year that, that will be an expansion. And certainly, we are excited about the work that we're doing with Sequel. We are working with them quite close. We've got a number of joint accounts that we're already calling on. So expect that to be a bigger part later in the second half of the year.

We'll go next now to Josh Jennings with TD Cowen.

Congratulations on the continued progress with the Eversense 365 launch. One of the objectives you've called out, Tim, has been just enhancing access to Eversense 365 and you've detailed the Eon Care build-out. I was hoping to get a better understanding of just how you envision the inserter network evolving from here outside of Eon and just how providers are, especially with the Medicare reimbursement that's in place and some private payers following with bundled payment reimbursement coverage being attractive potential financial incentive for providers to be implanters? Where do we stand today? And how do you see that evolving as we move forward?

Yes. So Josh, as we've spoken, the Eon is an important part because it really helps fulfill the need for our expansion really in a lot of the primary care focus. When we go out and offer the opportunity to train on doing the insertion, of course, that's driven by the clinician's perspective. Many have an interest in doing it themselves, and they'll institutionalize it. We'll do the training on them, and we saw growth certainly in the quarter in that population of folks.

For those that don't have an interest in bringing it in, and we're seeing that in some cases, in primary care, where we're getting some of our new Medicare patients from, they don't yet have the installed base to go through the procedure. That's where the Eon Care works extremely well. So we'll have a nurse in the area that they can refer to somebody that have a nice connection with the patients and with the clinical staff, and we can work hand-in-hand to get that all coordinated to really help with a white glove type handoff and treatment.

There are some folks that have recognized the attractiveness from the CPT code and some of our largest prescribers and utilizers come from those as well. So they're more than willing and more than happy to institutionalize that insertion process, and that certainly continues to grow for us as well. We've got a number of very large accounts that are concentrated on it because they see the benefit of Eversense for the patients, but also being able to control that whole insertion process and be appropriately remunerated for it from the CPT codes is attractive for them as well.

Great. And I just was hoping to get potential update on just the private payers moving over to the bundled payment reimbursement. I know you guys have had some progress in the first half of the year and how that's trending and how you expect that to trend into 2026? And then lastly, just with the growth in prescribers in the provider community, maybe just give us a sense of the mix between endos and PCPs, if that's kind of 50-50 or more heavily weighted towards endos or PCPs.

Sure. We are still more heavily weighted towards the endos, but the PCPs is certainly growing primary care, especially with that Medicare expansion. I don't have the exact numbers, but I can certainly get that and get back to you, Josh, on that. Again, sorry, the first part of the question?

I was just hoping for an update on just private payers kind of following CMS' lead bundle payment and how they expect that to evolve from here and whether you could have a majority of private payers kind of sometime in 2026. I may be too aggressive, but love to hear your thoughts.

Yes. I do expect to continue to transition. I would say the first half of the year, we had a couple of large payers that transitioned, United, of course, being the largest that was one of them that went to the bundled payment. I would expect that to continue to go as well. We are still working on the Kaiser partnership. And I would anticipate it will go in that direction as well, which would be in 2026. But otherwise, I do expect because of the onetime use per year, it is more consistent with that buy and bill approach. And obviously, we'll continue to support that.

There are a fair number of folks that continue to, of course, offer it through the DME channel, and we support those with our distributors. And we'll work as best works for those payers, whether it's in that consignment buy and bill or the traditional DME commercial. Right now, as you heard us say, it's about half and half, but we do expect that consignment channel to grow faster in 2026.

We'll go next now to Anthony Petrone with the Mizuho Group.

Congrats on the quarter here. Maybe on the Ascensia transition, as we head into that Jan 1, 2026 go-live, a lot of the reps from Ascensia jumping over. But of course, there'll also be a DTC push here from Senseonics. So maybe what does that push look like? When does it start? What will be the commitment at the SG&A line? How does that layer in through 2026? And then I'll have a follow-up on new patient starts.

Yes. So we've definitely seen progress, Anthony, as you've heard with the DTC. Clearly, awareness is an area that we can invest in and continue to grow, and it's exciting to bring those new patients to the product. I would anticipate that the level of DTC that we've invested in 2025 will materially be consistent in 2026. We'll, of course, gate it to buying patterns. As you'll recall, the fourth quarter is really the largest, especially for a more expensive piece of medical equipment with new deductibles and so forth in Q1, it tends to soften a little bit. So I do expect that to be a material part of the combined investment that we're going to make as the new Senseonics after January 1, and we do expect that it will continue to show good positive trends for us.

That's helpful. And then new patient starts rather, record in 3Q, record in September. Maybe if you could provide a little bit of color on October trends, which would be helpful on new patient starts. And when you look at the space in totality, there was just some noise out there. Abbott had a distributor sort of destock kind of event and then Dexcom had some issues with supply specifically. So it seems like some share shifted around. It looks like the company gained some of that share. But maybe the competitive dynamic, how do you -- any long-lasting patterns that you're noticing? Anything that's out of the ordinary in type 2 basal only? So just some of the context on new patient starts in October and how it's shaking out competitively?

Yes. I would say, as you're aware, the guidance that we've given calls for a very material Q4. And certainly, October appears to be no disappointment in hitting us down that path, which is obviously the basis of us giving that very big guidance. From a supply perspective, there's certainly no issues on the other side. We continue to supply. From a competitive perspective, as I said, I don't know really where it comes from. I think the majority of it, honestly, is the reach, right?

As we get awareness up higher and higher with that DTC investment we're making, the first people that typically respond are those that are currently on a product, they may be looking for some element, whether it's duration, the improved accuracy that we have or just that long term put the sensor in and enjoy it for the next 365 days, it's really attracting people over to it. So no supply issues, certainly no destocking. As Rick has told you, Ascensia has kept about 60 days' worth of supply in the channel. We're going to work to tighten that up in 2026, but there's been no impact in 2025.

Basal-only continues to be very interesting for us. A good portion of our Medicare patients are, of course, basal-only and those that we convince to try the product have been very excited with it and very happy with the performance. It does take a little bit longer to do the sale on the basal-only patients just because they're coming from more of a naive position on CGM, where, of course, anybody that might be on a pump or even MDI just further up that technology learning curve.

We'll go next now to Jon Block with Stifel.

Rick, maybe just high level or conceptually for '26, and I know you don't want to give specifics, but again, just conceptually, do we sort of like take our previous top line thoughts and gross it up by approximately 20%? Or are there some, call it, international markets that you might not pursue or more of a scaled back approach now that you'll be able to go at it from a direct perspective?

Yes. Jon, thanks for the question. So as I think about it, and I alluded to briefly in my prepared remarks, there's likely going to be some inventory dynamics. I've mentioned before with Ascensia holding somewhere between 60 and 90 days between them and the other sales channels, and we're going to reduce that. We're going to be closer to 30 days. So that means there's 1 or 2 months of inventory in the channel that we won't recognize revenue on for next year. So we're not going to see the full 20%. So it's not as simple as that. But we will see the margin improvement that I've talked about for everything that we do sell. So we will see those margins up at 50%.

Okay. And the international market dynamic or TBD?

So I think we talked about it briefly, excited to launch the 365-day product OUS with our own sales force. And so we made that conscious decision to wait until we had our entities established and had hired our own reps to really launch the product the way we want to. And so that will be in the first half of the year. And until then, it's going to be steady state in Europe, and then we'll expect to see the similar growth as we did in the U.S. outside the U.S.

Okay. Fair enough. And then, Tim, just to shift gears, I thought I heard you correctly, maybe you alluded to Freedom in early '28. And I thought previously, in my mind, it was late '27. I know we're talking a ways out, but I was just curious if I've got that correct. And then was there anything specific on why that would be a new sort of early '28 versus previous target of back half of '27?

Jon, no. No change in the development schedule at all. I was referring to really the commercial contribution would really be in '28, right, as the anticipated approval is just that continues to be that in the fourth quarter of '27, but it really has the ability to contribute in the '28 fiscal year.

We'll go next now to Ben Haynor of Lake Street Capital Markets.

Just wondering on the DTC marketing spend, as you kind of look at the data there and slice and dice it by demographics, geographies, what have you, do you see that X dollars in equals Y patients? Do you see any sort of saturation or inflections as you spend more over time? Or how does that kind of track in various subsegments of the folks you're targeting the geographies you're targeting?

Yes. Thanks, Ben. Yes, there's a number of observations. But clearly, as you increase the spend on DTC, there absolutely is a direct increase on the number of patients come to Eversense, which is good news. It is, however, obviously a conversion process you need to go through. There is quite a bit of education. And obviously, we've been continuing to optimize the algorithms of who we reach. Obviously, the reimbursement for folks that are on insulin is one of the key things that we look for. We did run some pilot work where we were doing some linear television. And in that recognize that we got a much, much broader audience.

Many of those folks were actually not on insulin or were looking for starter material in the sense of something that they could try for free, perhaps Medicaid patients where there isn't good reimbursement yet. So we certainly recognize that as you go very broad in the advertisement, you do get less and less in the center of the bull's eye. So therefore, your -- the effectiveness of the investment can drop off in that. So we've tried to stay pretty pointed, pretty geo targeted, as you know, what we can do with the investment these days. But we also, of course, tie that to where we make sure that we have good depth of insertion capability. Eon gives us an opportunity as well. We're approaching 50 Eon nurses, and we're excited. One of the reasons we're going to double that to 100 next year is just because of that breadth that we can get with it and then further expand the DTC investment from that.

Okay. Great. And then lastly for me, I appreciate that you don't plan on giving guidance until January for 2026. But I think high level, you've talked about kind of roughly doubling patients this year, doubling patients next year and the following year. Has there been any change to your thinking on kind of that high level of patient doubling?

No, we're still driving, Jon, to -- who is back there? Ben, I'm sorry -- and making the investments that we talked about with the DTC. I do want to echo Rick's comments. We do have this onetime dynamic as we switch from Ascensia and Senseonics, right, where they had product in the channel. They kept about 30 days. They put up to 60 days with the distributors. We're certainly going to try to pull that back. But in the normal practice, they, of course, do have that in the channel. So that will have a onetime impact on 2026. It's not going to impact patient starts. But since the product is in the channel, there'll need to be some consideration for that for the first 60 days or so of the year as we go through that transition.

We'll go next now to Jayson Bedford of Raymond James.

Just a couple of quick ones. I guess on the $35 million in revenue guidance, I think the old guidance was $34 million to $38 million. Just any details on what changed?

No, we're right in that range, Jayson. I think as we get more fine-tuned and manage this inventory transition between Ascensia and us, it just gives us a little bit better visibility. As I said, we're still absolutely on track for doubling the patients. So the revenue behind it is just dictated by timing or some of these transition accounting dynamics.

Okay. On the SG&A spend, a little bit of lift there. Is there any way to frame the size of the DTC spend? And I assume this continues in the fourth quarter?

Yes, Rick, do you want to go through that?

Yes. I mean much of the lift was the DTC spend that we made in the third quarter, and it will be similar in the fourth quarter. I think we raised our cash utilization range to the top at $60 million. And so it's somewhere up to $10 million in DTC for the year that we're going to be spending to bring up the awareness.

Okay. And then just lastly on twiist, what's left to be done here? Is it all in Sequel's hands right now?

There's joint marketing activities that need to be done. There's some scaling activities that twiist is going through at this point. So we're essentially ready to go, and I know they're getting pretty close as well. So we're down to the 5- or 10-year plan.

We'll go next now to Sean Lee with H.C. Wainwright.

I just have a couple of ones on the European side of the business. I may have missed it, but did you provide an update on the CE mark for the Eversense 365? And I also understand that the transition on Europe is expected to take longer. Are you also transitioning the Ascensia employees over or building a new team from the ground up on that side? And what else should we -- sorry, what other color can you provide on the transition process there?

CE marking, Rick, and then I'll let you pick up on those transitions and our thoughts on launching 365. On CE mark, Sean, we continue to be on track. Obviously, we'd like to have it sooner rather than later. We did submit it in February. So it has been under review for some time period. There are no issues. We are down to the very final stages. So that's why we continue to believe that we'll have the approval on it here this quarter. Unfortunately, the CE marking, we use BSI. They're not actually a little bit less predictable than the FDA is. And I think we're just in their normal process of final review. So no issues, nothing new. We're certainly happy to get it over to the folks in Europe. But with the transition, we are thinking a little bit different about when to bring it out.

And Rick, I'll let you speak to that.

Yes, that's right. So we are transitioning the European business over the first half of the year. We're in the process of setting up our entities. We'll transition the current CGM dedicated employees and then hire our own sales force. And so there was some 365 contribution that we had previously thought for revenue in 2025, but making the decision to launch the product with our own sales force that we direct and control is certainly the way to go. So we'll launch that product in the first half of the year with our own sales force outside the U.S.

And ladies and gentlemen, it appears we have no further questions this afternoon. So that will bring us to the conclusion of today's conference call. We'd like to thank you all so much for joining us this afternoon for our conference and wish you all a great remainder of your day. Goodbye, everyone.