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,…

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…

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…

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.