Kevin Ronald Sayer - President, CEO, Chief Operating Officer & Director Steven Robert Pacelli - Executive VP-Strategy & Corporate Development

Robbie J. Marcus - JPMorgan Securities LLC Ben C. Andrew - William Blair & Co. LLC Brooks E. West - Piper Jaffray & Co (Broker) William J. Plovanic - Canaccord Genuity, Inc. Greg P. Chodaczek - Sterne, Agee & Leach, Inc. Tao L. Levy - Wedbush Securities, Inc. Raj S. Denhoy - Jefferies LLC Danielle J. Antalffy - Leerink Partners LLC Jeff D. Johnson - Robert W. Baird & Co., Inc. (Broker) Jayson T. Bedford - Raymond James & Associates, Inc.

Welcome to the DexCom Second Quarter 2015 Earnings Release Conference Call. My name is Laquiba and I will be your operator for today's call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. Please note that this conference is being recorded. I will now turn the call over to Kevin Sayer. Kevin, you may begin. Kevin Ronald Sayer - President, CEO, Chief Operating Officer & Director: Thank you. Good afternoon, everyone, and welcome to the DexCom second quarter 2015 earnings call. We'll start with our Safe Harbor statement by Steve Pacelli. Steven Robert Pacelli - Executive VP-Strategy & Corporate Development: Thanks, Kevin. Some of the statements that we will make in today's call may constitute forward-looking statements. These statements reflect management's expectations about future events, operating plans and performance that 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, our quarterly reports on Form 10-Q, and our other reports filed with the SEC. We undertake no obligation to update publicly or revise these forward-looking statements for any reason. Additionally, we will discuss certain financial information that has not been prepared in accordance with GAAP with respect to our cash based operating results. This non-GAAP information is provided to enhance your overall understanding of our current financial performance. The presentation of this additional information should not be considered in isolation or as a substitute for our results or superior to results prepared in accordance with GAAP. Kevin? Kevin Ronald Sayer - President, CEO, Chief Operating Officer & Director: Thanks, Steve. Joining me today are Jess Roper, our Chief Financial Officer, and Steve Pacelli, our Executive Vice President of Strategy and Corporate Development. I will ask Steve to kick off this call with a review of our detailed second quarter 2015 financial results, and I will follow with our customary operations update and offer some concluding thoughts before opening the line for questions. But before I turn the call over to Steve, I want to take a moment to talk about several key operational milestones we achieved during the second quarter. We continue to experience phenomenal growth. Our revenues in Q2 alone were approximately the same as we achieved for all of fiscal 2012. Our blended gross margins exceeded 70% and our cash based net income increased at a rate of more than four times our top-line revenue growth. Our first major awareness campaign kicked off during the quarter with the launch of our Nick Jonas promotional video. Nick made several major television appearances to discuss the role of DexCom CGM in his diabetes care. And we have two major pharmacy wins during the quarter, with both UnitedHealthcare and Anthem agreeing to process CGM as a pharmacy benefit. We expect to continue to expand our efforts on this front with the goal of processing the vast majority of our business through the pharmacy channel over the next several years. More from me later. I'll now turn the call over to Steve. Steven Robert Pacelli - Executive VP-Strategy & Corporate Development: Thanks, Kevin. DexCom reported revenue of $93.2 million for the second quarter of 2015 compared to $58.8 million for the same quarter in 2014, a $34.4 million or 59% increase. Sequentially, revenue for Q2 of 2015 increased $20.4 million, up 28% from the prior quarter. Our gross profit totaled $66 million, generating a gross margin of 71% for the second quarter of 2015 compared to a gross profit of $39.9 million and a gross margin of 68% for the same quarter in the prior year. As we have stated previously, we are now at the upper end of our gross margin targets on our sensor disposables and our hardware. We will continue to seek improved gross margins through increased volumes, continued manufacturing improvements, continued shift in the sales mix to more disposables revenue, and some cost savings in future product design. In the near term, we expect our blended margin to remain at approximately 70%, but we remind investors that our gross margin on hardware could be slightly lower for a period of time due to the introduction of the G5 mobile transmitter. Some final thoughts on our revenues and our gross profits. Our mix between durable and consumable products remained steady at approximately 30% durable and 70% consumable, a mix we expect to remain fairly constant going forward. ASP for sensors was at the high end of our stated range of $70 to $75 per sensor, and the ASP for our hardware was approximately $800 to $850 per starter kit. Finally, our international business continued to grow, represented $12.2 million or 13% of our revenues. Research and development expense totaled $24.4 million for Q2 of 2015 compared to $14.8 million in Q2 of 2014, with the increase due primarily to additional payroll related costs and expenses related to work on our near-term product pipeline and work on our advanced product pipeline. Selling, general and administrative expense totaled $45.2 million in Q2 of 2015 compared to $30.9 million during the same quarter in 2014. The increase was primarily related to increased head count in our sales organization, including both field sales and internal sales support staff. The increase was also attributable to additional marketing expenses in connection with our awareness campaigns. The increase included additional IT infrastructure costs, and finally, of the $14.3 million increase, approximately $4 million was non-cash share-based compensation expense. Our net loss for the second quarter of 2015 totaled $3.7 million and included $23.4 million in non-cash expenses centered primarily in share-based compensation, depreciation and amortization. Absent these non-cash charges, cash-based net income was $19.7 million for Q2, representing 21% of our revenues. This compares quite favorably to cash based net income of $8.2 million in Q2 last year. We also remind investors that we expect share-based compensation expense to be approximately $21 million to $22 million per quarter through the balance of 2015. Our loss per share for the quarter was $0.05, based on 80 million shares outstanding at the end of Q2. With respect to our balance sheet, we ended the second quarter with $98 million in cash and marketable securities, an increase of $14 million from Q1 of this year. With that, I'll turn the call back to Kevin for a business update. Kevin Ronald Sayer - President, CEO, Chief Operating Officer & Director: Thank you Steve. Before I get into details about the business, I want to update investors regarding our revenue guidance for the balance of the year. We've obviously had two very successful quarters to start 2015 and feel quite confident in our prospect for the second half of the year. So consistent with prior years, we take this opportunity to up our revenue guidance to a range of $350 million to $375 million, and just so it's not lost on investors, this means DexCom will need to generate at least $200 million in the second half of 2015 to achieve the mid to upper half of our range. Pretty ambitious considering we generated $257 million in revenue for all of last year. With our revenue aspirations related to our expected launch of G5 mobile later this year, and especially as we look at 2016, we need to make some additional commercial investments now. First and foremost, we need to continue to increase awareness. As part of our evaluation of potential awareness campaigns, we've conducted a series of focus groups of non-CGM users around the country. From these focus groups our field team relayed the story of a woman who was overcome with emotion and burst into tears when she learned about DexCom CGM and the benefits it offered. She'd been on injections for over 20 years and never realized that the technology existed that could afford her this level of control, convenience, and most of all freedom. Freedom from worry and anxiety, not just for herself, but for her 11-year-old son, whose constant worry about his mother was creating his own health issues. Clearly, we need to do more. While we can't necessarily quantify what Nick Jonas did for us in terms of sales volume, we can give you some high level statistics. Our website had more visitors the day we posted the Jonas video than any other day in our history. The team was able to secure 17 interviews with national media outlets where Nick Jonas was able to mention his DexCom CGM. Combine these wins with the huge number of DexCom tweets, likes, follows, et cetera in the diabetes and Nick Jonas social media communities, and we consider this a great success. Over the next few quarters, we will explore other opportunities to reach our customers directly and will invest accordingly. We also need to expand access through our field presence, not simply adding sales reps, but orienting our activities with a goal to simplify access for clinicians and patients. To do this, we will continue to build out our managed care team to support our efforts to move reimbursement to a pharmacy benefit and to enable access of DexCom product at retail outlets such as CVS and Walgreens. We'll also be looking to pilot expansion of our call points outside of endocrinology to broaden reach into the entire insulin-using diabetes market. We need to generate more clinical data and as one tool to do so, we plan to support more investigator-initiated studies. For example, we're supporting several studies related to the use of CGM for some period of time immediately after diabetes diagnosis. Finally, we are investing more in our internal infrastructure to support growth, both back office head count and information technology. During our Q4 2014 earnings call, we guided that the SG&A spend in 2015 would increase approximately 20% on a cash basis over 2014. But as a result of the increased investment we intend to make in our commercial platform, we now expect the SG&A spend to increase approximately 25% on a cash basis year over year. Turning to our product pipeline, we continue to have excellent dialogue with the FDA regarding our G5 mobile system, and we expect to receive FDA approval and launch G5 mobile for both pediatrics and adults later this year. We're on track to conduct a pre-pivotal with our gen 6 sensor later this year, and plan to commence a pivotal study shortly thereafter. As a reminder, gen 6 will be an extended-wear sensor, most likely 10 days, and will have a reduced calibration scheme. We expect to launch gen 6 in early 2017. Activities related to an insulin-dosing claim for our G4 PLATINUM system continue. And we now believe we're in sync with the FDA regarding the data that will be required, both pre and post market, to support a dosing claim and we're optimistic that we will have such a claim in the U.S. sometime next year. Turning to some of our advanced R&D efforts, we continue to make good progress on the next insertion system, a new lower cost, higher quality receiver and several generations of transmitters, all designed to be more convenient for our patients and to reduce cost for DexCom. We continue to study sensors with no calibration requirements, and based upon the performance of these sensors that we have seen with our advanced sensor research group and the capabilities of our next algorithm platform, we believe that calibrations will be completely eliminated in the future. On the data front, we are beginning to make investments in our real-time analytics platform, now that we have the G4 PLATINUM with Share in the market and we are capturing millions of data points each day. To support our efforts on this front, we have recently hired a senior data executive. She joins us from outside the medical technology field and has years of experience in big data at several large companies in Silicon Valley. Finally, as it relates to data, I'm pleased to report that in the second half of this year, we will be launching a robust new data platform developed by our SweetSpot team. We believe this next generation cloud-based platform will set a new standard for visualization of CGM data. Shifting to our integration partnerships, Johnson & Johnson again reported nice growth in pump sales related to the launch of the Animas Vibe in the United States. And we have expanded our partnership with Tandem by entering into a development agreement that will allow for integration with our gen 5 and gen 6 systems, enabling Tandem to develop products that go beyond mere display of CGM on a pump and offer some measure of insulin control based upon CGM data. We're also seeing some excellent work conducted by the team at Bigfoot Biomedical in taking a truly novel approach to the development of an automated insulin delivery system, and we were very pleased to see Ed Damiano unveil his dual-chambered bionic pancreas pump at a recent meeting. Last quarter, we said that we would support our partners with future technologies only if they develop products that go beyond mere display of CGM and offer some measure of insulin control based upon CGM data. We believe some exciting progress has been made on that front. Before I open up the line to Q&A, I'd like to close with a brief update from the American Diabetes Association's annual Scientific Sessions, held in June. It was quite evident at the show that we remain the leader in continuous glucose monitoring. While the vast majority of new data presented this year was on diabetes drugs, in our view the most exciting data on devices was presented by the T1D Exchange. This data showed that across all diabetes technologies, use of CGM generates the greatest impact on A1C reduction, with only a minimal difference in outcomes for those who use CGM and multiple daily injections compared with those who use CGM with an insulin pump. From our perspective, while patients get some benefit from using an insulin pump, it's continuous glucose monitoring technology that makes the real difference by educating patients and enabling them to alter their behavior to achieve better A1C results. This theme was echoed during multiple presentations and presenter commentary through the conference. So as we develop our awareness campaigns, we will be ever mindful of the 70% of patients in the U.S. and 90% plus of patients outside the U.S. on multiple daily injection therapy. I'd now like to open up the call for Q&A.

Thank you. We will now begin the question-and-answer session. Our first question is going to come from Mike Weinstein. Please go ahead. Robbie J. Marcus - JPMorgan Securities LLC: Hi, this is actually Robbie Marcus in for Mike. Congrats on a great quarter, guys. This is now something like three years in a row where every quarter is 50%, 60% or more growth, and it just looks like every quarter you keep finding new sources of patients and new areas of growth. So maybe you can help us – walk us through, where are the new patients coming from? Is it pumps, is it MDI patients? And how sustainable is this? And how important is G5 going to be to growing this patient base? Kevin Ronald Sayer - President, CEO, Chief Operating Officer & Director: Thanks. That's a very good question. This is Kevin, I will take that. Let's start with the pumps versus MDI mix. Still a majority of our patients come from the insulin pump world, but we are seeing an increase in MDI patients. We haven't totally moved the needle away from our 60:40 split that we talked about earlier. I think the traction Vibe has generated has helped us. Also the number of new pump starts on Tandem and Insulet as they both gain a little more traction, it appears, in the marketplace help us because those patients migrate to our sensors. So we've had good success there. So they're coming from across the board. With respect to patient groups, we certainly can't walk away from the good that the Pediatric launch has done for us. I was at a show in a meeting in Florida, children with diabetes, and a guy was giving a speech about all the therapies available for diabetes. And he asked all the peds and their parents in the room who use CGM, and a bunch of hands went up. And he asked how many use DexCom, and no hands went down. So we've done very well in the peds market, but it's very much been across the board. Robbie J. Marcus - JPMorgan Securities LLC: Yeah. Kevin Ronald Sayer - President, CEO, Chief Operating Officer & Director: Everything we do helps sustain this growth Robbie, and I don't think anybody can underestimate how difficult it is to grow a business this quickly. To grow a business this fast, you have to have new thing after new thing after new thing that enhances the patient experience to get deeper into the patient community. Gen 5 is that next step. We believe the data going straight to a phone will enable patients not to carry an extra thing around in their pocket and will be very helpful. But we also know the next step after that: we have to make it more convenient, we have to eliminate calibrations and the hassle factor, and we have to continue to maintain our excellent level of accuracy. All those things matters, and we address every one of those things every time we iterate. Robbie J. Marcus - JPMorgan Securities LLC: And maybe just one follow up. A question we get a lot from investors is, how is the shift to the pharmacy going to impact your financials? And I was surprised to see that ASPs for sensors were actually at the high end of the range this quarter. So, can you talk about what impact that's having on sales, and then down throughout the P&L, is it going to be a benefit or neutral? And how should this impact getting new patients in the door? Thanks, guys. Kevin Ronald Sayer - President, CEO, Chief Operating Officer & Director: Well, it should impact new patients getting in the door very favorably because in many cases all they would need is a script from a physician and maybe some limited pharma preauthorization on a phone call. So, it will take the cycle of a new patient going in the system down significantly, so that should be very good. It should also reduce their copays. With respect to the pricing of our system in the pharmacy channel, there will be some situations where we lower price to get pharmacy in the door, and some situations where we get price increases. We hope over time – our goal has been, try to remain price neutral. We have another pricing lever coming with the gen 6 sensor that has an extended wear. So I think as you see us move to pharmacy, if we see movement down a little bit or up a little bit in pricing in the pharmacy channel, we've got something coming with the gen 6 system where we can pick certainly all, if not more than that, up with an extended wear sensor. So we monitor it closely. We have long discussions before we embark in a pricing – we embark in pricing discussions every time we have a pharmacy contract. So we're looking at it very closely, but so far so good. Even as more of our businesses has shifted there, we're doing quite well.

Thank you. Our next question is going to come from Ben Andrew from William Blair. Please go ahead. Ben C. Andrew - William Blair & Co. LLC: Good afternoon, guys. I wanted to then talk about a couple things, I guess. And Steve, I may have missed your first comments, or Kevin. Did you give a percent of revenues from hardware this quarter? Steven Robert Pacelli - Executive VP-Strategy & Corporate Development: Yes, it was 30%. Ben C. Andrew - William Blair & Co. LLC: It was still 30%. So is that roughly split between new patients and replacement hardware? Because that would put you at an awfully big new patient number, something closing 18,000 patients or even 20,000 patients in the quarter. Steven Robert Pacelli - Executive VP-Strategy & Corporate Development: Yeah, we're not going to break it out, as we haven't in the past. You should assume with the revenue levels that we're at and the growth rates we're experiencing, we're adding quite a few new patients, but we're not going to be specific on the new patient numbers. Ben C. Andrew - William Blair & Co. LLC: Okay. So the Share monitor launch obviously plus pediatrics have got to be the two major things that really changed it. But was the momentum actually building through the quarter, since you've only had that product for a short time, and obviously there's a little bit of backlog built through Q1 with seasonality, but was it actually getting even stronger as the quarter went on? Kevin Ronald Sayer - President, CEO, Chief Operating Officer & Director: You know, the month to month swings in our business – and Jess is sitting here across the table looking at me, are difficult to predict, and in some years all the months are equal in the second quarter, other years, it starts fast and slows down. This quarter went as we planned it, Ben, and I'd sort of answer is we looked at our monthly targets every quarter, we did very well month-to-month. I don't think there was demand built up for the Share Receiver. We were able to fill all those orders in the first quarter when we launched it. That was a very effective and efficient launch by our team. There wasn't anybody sitting on the sidelines waiting for a product that couldn't get it. But I do think the Share Receiver certainly helped, and continued peds growth helped, and all those things continue to add to the business. Ben C. Andrew - William Blair & Co. LLC: Okay. And Kevin, I know 60% growth for now, what, six – or no, I'm sorry, 10 quarters in a row-ish. You've talked about the challenges of sustaining that and I know there's many bottlenecks that you guys are working hard on, but what is the primary bottleneck right now? Is it awareness? And obviously you talked about the technology iterations, addressing that and continuing to expand it. But at these kind of growth rates to sustain it, it really does take a lot to feed that – to feed the beast and sustain it. Kevin Ronald Sayer - President, CEO, Chief Operating Officer & Director: I think awareness is the biggest challenge, to keep growing at this rapid rate. Our operations team, we haven't had a backorder since we started here, and we've gone through all the hassles that any manufacturing plant would go through, and these guys are very, very good at fixing them. I think another challenge, as we look to the future, is getting the new products out quickly enough. We've been iterating very quickly with all the approvals we had last year, the approvals we've already received this year, and things have moved pretty fast here. So we need to keep innovating at that robust pace, but we keep going, Ben. Ben C. Andrew - William Blair & Co. LLC: Yeah. Last thing from me, and you mentioned you had been evaluating a series of different transmitters. Can you characterize kind of some of the technologies or the concepts that you're thinking about? Thanks. Kevin Ronald Sayer - President, CEO, Chief Operating Officer & Director: Sure. Battery life is one thing we look at and think about. The gen 5 transmitter, as we've talked about, has a three months life versus the six month life, and as those of you who have been on this call for a long time will remember, the SEVEN PLUS Transmitter had a year plus life. So, we've looked at battery life, anything from extending to three months to six months or going down to disposable, depending upon costs. We've looked at those transmitter options, certainly different electronics configurations. The biggest issue with the transmitter is simply size. The smaller we can make it – to a certain extent. You can't get too small or it becomes unmanageable from a dexterity perspective, as we learned in our human factor studies. We're looking at the optimal size and shape to make it smaller and give our patients maximum economic benefit. Ben C. Andrew - William Blair & Co. LLC: Great. Thank you.

Thank you. Our next question is going to come from Brooks West, from Piper Jaffray. Please go ahead. Brooks E. West - Piper Jaffray & Co (Broker): Hi, guys. Thanks for taking the questions. Kevin Ronald Sayer - President, CEO, Chief Operating Officer & Director: You bet. Brooks E. West - Piper Jaffray & Co (Broker): Kevin, can you talk about – and I stood with you in your booth for a while at ADA and listened to some of the patient stories around Share. Is it safe to say that the patient profile for that product is skewing more towards peds and young adults? And you're maybe actually seeing a turbo boost from that launch? Kevin Ronald Sayer - President, CEO, Chief Operating Officer & Director: I think it does skew that way. But I would tell you, that's not the only place that it goes. I've been around a number of adults who are using it. I was in a physician's office just a week or so ago, where a physician showed me data from a 72-year-old patient who had severe hypoglycemia unawareness, and couldn't manage himself. He had moved to a small town to take care of his 90 plus year old parents, and instead they were taking care of him till he got on CGM. Well, Share data is very important for that guy. And I think any place where people are subject to severe high and low swings, and particularly with hypoglycemia, Share has made huge difference. It obviously is going to help more in pediatric patients – if not for the simple reasons that seven-year-olds can now tell their parents they need an iPhone, and I have to have this if you're going to watch my data. The interesting side note of all the Share data, I was going to talk about this in my concluding remarks, is there's a whole new culture that's coming, about how are we going to interact based on CGM? Because parents are freaking out and calling their kids all the time, then kids turn off their parents from sharing, and adults, you know spouses following each other. We've seen some very interesting text messages between followers and patients. So it's across the board, but clearly the concept is being proven out dramatically. Brooks E. West - Piper Jaffray & Co (Broker): Thanks, and then I wanted to ask a question on the various open source programs. You mentioned SweetSpot, but I know you also are very familiar with Tidepool and glucose. Can you talk in general about how those might impact your business over the next couple of years, because it seems like there is a broader concept of sharing information, but there also seems to be a specific effort to allow Medtronic pumpers to interact with a DexCom device. Kevin Ronald Sayer - President, CEO, Chief Operating Officer & Director: Well, and that's certainly being taken care of by those entities that are independent of DexCom. That's great for our patients and for healthcare professionals who want to see the data put together. Our SweetSpot platform is our technology platform and ultimately we'll upload pumps into there as well, particularly from our own pump partners, and we'll reciprocate our pump partners back as far as sensor data being in their combined devices. As far as those other platforms being a huge driver of our business, I mean, it will be helpful, it'll be a nice feature for our patients. We're not banking on that to drive our revenues. We just think it's a nice – we think it's nice to have and that's why we work with these guys. And, look, if they have better answers than we do, that makes everybody happy, so we're fine. Brooks E. West - Piper Jaffray & Co (Broker): Thanks, guys. Congratulations.

Thanks.

Thank you. And our next question is going to come from Bill Plovanic from Canaccord. Please go ahead. William J. Plovanic - Canaccord Genuity, Inc.: Great, thanks. Good evening. A couple questions here, just first on G6. I think, based on your comments, your pilot and pivotal will go this year for that, and when do you expect to complete the pivotal and submit? Kevin Ronald Sayer - President, CEO, Chief Operating Officer & Director: Well, the pivotal timing will dependent upon a lot that we learned in the pre-pivotal. We expect to submit early next year and hopefully launch in early 2017. William J. Plovanic - Canaccord Genuity, Inc.: Okay. And, then – and like you said on that, you believe with that, you'll have the 10-day extended wear, correct? Kevin Ronald Sayer - President, CEO, Chief Operating Officer & Director: That's correct. William J. Plovanic - Canaccord Genuity, Inc.: And then, when do you think – on the dosing, just again, clarification, you're working on that on the G4 to get the dosing claim? Kevin Ronald Sayer - President, CEO, Chief Operating Officer & Director: That's correct, we don't have to wait for gen 6. The FDA in our discussions has very strongly indicated to us that even without the interference blocking of the gen 6 membrane our G4 data is strong enough to support an insulin dosing claim. So we're working with the agency about what work we have to do and labeling we have to put together to add that feature to our product. William J. Plovanic - Canaccord Genuity, Inc.: And, would you – I mean, if G5 gets approved, do you still turn around and get the dosing on G4 and then turn around and kind of baby step to G5 to add that dosing claim or would it automatically come with it? Kevin Ronald Sayer - President, CEO, Chief Operating Officer & Director: They're the same sensor and algorithm, Bill. So, more than likely what we would do is launch the G5 with the claim and not go backwards. William J. Plovanic - Canaccord Genuity, Inc.: Got you. Okay. So when you get the G4 dosing, it basically applies to G5 and then you have that. That's locked up. So then it's really working on – and I think you said on G6, it was – you discussed reduced calibration. What exactly does that mean? Kevin Ronald Sayer - President, CEO, Chief Operating Officer & Director: Well, when we run studies, we calibrate it. We have calibration schemes and our patients take calibrations. Then we go simulate the data in a number of ways. We simulate the data as if they only took calibrations on the first day or in the middle or in just a number of different ways. More than likely, our first pass with this, particularly in looking at timing with the agency, would be one calibration a day. But we developed an entirely new algorithm platform for this product, one that can adapt to very few calibrations. So more than likely, I would say our first pass with G6 will be a calibration every single day, not really as much for accuracy as it is for the reliability and the safety of this system, and looking to get through the agency efficiently. So that would be our first pass and then we will look at a number of options after that with filings after the fact. So one a day for the first – when we start. William J. Plovanic - Canaccord Genuity, Inc.: Wow! I think I will stop there. Thank you.

Thank you. Our next question is going to come from Greg Chodaczek from CRT Capital. Greg P. Chodaczek - Sterne, Agee & Leach, Inc.: Thanks. Most of my questions have been asked. But real quick on UNH and Anthem, have those programs started? And if so, when did they start? Steven Robert Pacelli - Executive VP-Strategy & Corporate Development: Yeah, they were both effective July 1. Greg P. Chodaczek - Sterne, Agee & Leach, Inc.: July 1. And what percent of the MCOs or managed care guys do you think sign up, or are they waiting for UNH and Anthem to have 12 months of data and say, yeah, this is the way to go? Or is this fluid and we could see more by the end of the year? Steven Robert Pacelli - Executive VP-Strategy & Corporate Development: No. I think you could see more by the end of the year. We're in active – I would tell you, without being specific, we're in active discussions with virtually everyone, every major payer. Greg P. Chodaczek - Sterne, Agee & Leach, Inc.: And Steve, you talked about sensor pricing being in the upper end of the range. Can you explain why that has moved up a little bit or why you've talked about it this time? Steven Robert Pacelli - Executive VP-Strategy & Corporate Development: Yeah, it's a combination of factors. So, in any given quarter, depending on how much of our business is processed on a direct basis versus through third-party distribution and the mix of which direct contracts versus which third-party distributors, the pricing varies. That is what results in the variability in sensor pricing. And as Kevin mentioned, as we – I think there has been this weird concern on the Street that somehow our revenues were going to be severely impacted as we moved to the pharmacy. What you have to keep in mind is that where – and Kevin said, we would give – in some instances it'll have to give, and where we have to give would – may be in any case where we have a direct contract with the payer today, in order to get them to move to pharmacy we may have to do a slight discount. But, remember, about 50% of our business was historically through a durable medical distributor. And so where we're looking to get established and obtain first-time contracts with some of these payers, these guys were getting gauged by the third-party distributors. So, the pricing that we can come in at can actually be quite favorable to DexCom on an overall ASP basis and the payer gets a significant break from what they were paying their DME supplier. So, again, don't – what I want to caution, though, is we've never said that we expect the pharmacy channel will drive ASPs, but our goal again, as Kevin just mentioned, is to stay kind of net neutral on a pricing basis as we shift to the pharmacy. Kevin Ronald Sayer - President, CEO, Chief Operating Officer & Director: And on the distributor front, I would clarify that, some distributors have gauged our payers.... Steven Robert Pacelli - Executive VP-Strategy & Corporate Development: Yeah, fair enough. Not all. Kevin Ronald Sayer - President, CEO, Chief Operating Officer & Director: Certainly not all of them, and we've actually spent a lot of time this year also working on those relationships to make them more consistent and more seamless, and I think that's going a lot better. We have a channel team working directly with those guys as well and those efforts have been very good. Greg P. Chodaczek - Sterne, Agee & Leach, Inc.: So, I won't quote Steve and say all. I will change that. Kevin Ronald Sayer - President, CEO, Chief Operating Officer & Director: No, just stick with mine on that one. Greg P. Chodaczek - Sterne, Agee & Leach, Inc.: Okay. And last but not least. This is the five year lookout or outlook. When I look at CGM, what do you think the percentage of penetration in the type 1s is right now, Kevin, and where is it going, where do you foresee it a year from now, five years from now? Kevin Ronald Sayer - President, CEO, Chief Operating Officer & Director: That's a great question. And I really think – and I'll speak and I will let Steve even give his thoughts after I'm done. We just as well have two opinions here. Pumps have reached 30%, but haven't had a tremendous amount of growth as far as over the past 10 years from where they were before. I believe at a minimum standard 30% for CGM penetration to start in the U.S., and I think it should be higher. And our biggest barriers are awareness and access and cost, and we are doing things on all those fronts to try and make a difference. So above 30%. I don't think we're ever getting to 70%, but I think CGM certainly should be above 30%. If we make this thing small enough and easy enough to use, we can take away most every excuse that people have. Steven Robert Pacelli - Executive VP-Strategy & Corporate Development: Yeah, that's what I was going to say. Look, five plus years from now, our goal would be to have a sensor that would be something that's miniaturized, that looks more like a bandage than a medical device, that's fully disposable. You get it to the point where you overcome basically all of the objections that a patient would have to wearing the device – it talks to your phone, it doesn't have to be calibrated, you don't take fingersticks anymore, there really isn't a reason that you couldn't get very significant penetration into the type 1 market in the U.S., again provided we can achieve the appropriate access for patients via the payer community and continue to drive awareness. All that – if you rehash our entire conference call script today, that's kind of the message, is that we need to keep our foot on the pedal on growing our commercial enterprise and our foot on the pedal on the R&D front, because we need to continue to iterate new and better technologies to capture a larger market share of type 1s. But I would also add that I think in five years, you're going to see us have very meaningful penetration for sure into the intensive insulin using patients who are type 2s, but I would suggest even potentially even broader into type 2s. So, I think that's going to become an ever-increasing important market segment for us. Greg P. Chodaczek - Sterne, Agee & Leach, Inc.: All right. Thanks, guys.

Our next question is going to come from Tao Levy from Wedbush. Please go ahead. Tao L. Levy - Wedbush Securities, Inc.: Yeah, hi, good afternoon. I was wondering, maybe I could ask on utilization trends in the quarter, and did that change at all? Steven Robert Pacelli - Executive VP-Strategy & Corporate Development: No. No. Kevin Ronald Sayer - President, CEO, Chief Operating Officer & Director: No. Steven Robert Pacelli - Executive VP-Strategy & Corporate Development: Again, we don't have perfect data. We're starting to capture a lot more data about our patients who have said they've (37:15) moved to Share. But we still think patients are using somewhere between 2.5 sensors to 3 sensors per month on average. Tao L. Levy - Wedbush Securities, Inc.: Yeah. Steven Robert Pacelli - Executive VP-Strategy & Corporate Development: They're still extending the wear. Tao L. Levy - Wedbush Securities, Inc.: Okay. And, so with UNH and Anthem just, you've got a month of experience with that. How -- any anecdotal information or data that you've been able to obtain there? And, when you think about current patients, not necessarily new patients coming on, will they – if you're an Anthem patient, you have Anthem insurance, will they now be able to go to a CVS or a Walgreens or get their script refilled at the pharmacy versus going in and calling their distributor? Kevin Ronald Sayer - President, CEO, Chief Operating Officer & Director: Theoretically that will happen. I will tell you, there'll be a few bugs to work out as we get this started and going. Anecdotally, we got an e-mail at the company e-mail repository from a mother who had a 2.5 year old with type 1 diabetes recently diagnosed, and 24 hours later she had a CGM from the local drug store. And, her e-mail was very, very -- she was very grateful. The ability to turn this stuff around quickly is very important to our business. I think over time, we will be able to move it over there. But there's bugs in this like everything else. It's going to take a little bit of work, but we'll get there. Tao L. Levy - Wedbush Securities, Inc.: And just two quick ones. The dosing claim, is that only going to be applicable to the G4 with the AP algorithm? Kevin Ronald Sayer - President, CEO, Chief Operating Officer & Director: That's correct. Tao L. Levy - Wedbush Securities, Inc.: So, any of the integrated pumps will not have that dosing claim? Kevin Ronald Sayer - President, CEO, Chief Operating Officer & Director: Not until they integrate with gen 5. Tao L. Levy - Wedbush Securities, Inc.: Got you. And, then just lastly, Share currently is only on the iPhone platform. When do you start thinking about the other platforms, Android and whatnot? Kevin Ronald Sayer - President, CEO, Chief Operating Officer & Director: Well, the Follow App is available on Android. So parents can – or followers can follow whoever they are following on either platform. We probably will not move the Share app to the Android platform, because we think gen 5 will be here relatively quickly and we'd rather put our resources towards that. But we'll evaluate it as we go. Tao L. Levy - Wedbush Securities, Inc.: But will gen 5 just be an iPhone, or - Kevin Ronald Sayer - President, CEO, Chief Operating Officer & Director: It will be iOS to start, and then it will move to Android as well, very quickly. Tao L. Levy - Wedbush Securities, Inc.: Okay. Great. Thanks a lot.

Thank you. And our next question is going to come from Raj Denhoy from Jefferies. Please go ahead. Raj S. Denhoy - Jefferies LLC: Hi, thanks. Thanks for taking the question. So just a couple of clarifications. So on the dosing claim you hope to get next year, I'm wondering if you could just maybe elucidate what you hope that does for you? I mean does that – I guess there's been some talk that CMS has wanted that before they would open up coverage. So is that one aspect? And then, when we start thinking about closing the loop, I mean does this start to move you quicker down that path, and when do you think we might see that? Steven Robert Pacelli - Executive VP-Strategy & Corporate Development: Yeah, I think you're right. Initially, I think our belief was that the dosing claim was most important from a Medicare perspective, because Medicare has indicated that until we get the non – the adjunctive labeling removed, that they would not entertain a coverage category for CGM. And that opens up quite a few both type 1 and type 2 intensive insulin using patients. But I will tell you, and I actually really – it was really eye opening this year, when I was at our national sales meeting, starting to talk to the field force, who are much more excited than frankly, I think we were internally about the dosing claim, because they tell stories of doctors who truly are unwilling today to prescribe, or prescribe as much as we would like, because they have to – they're unwilling to – they're not prescribing it off-label. So they have to tell their patient when they prescribe it, hey, I want you to go out and purchase this thing, and oh, by the way, you have to take two fingersticks a day to calibrate it and oh, by the way, every time you eat or take an insulin injection, you need to also take a fingerstick. These doctors are – this is, again, all anecdotal from our sales force, but these doctors would be much more willing when they don't have to tell their patients that they have to take a confirmatory fingerstick, to prescribe much more. So, I think the dosing claim could actually be a bigger catalyst than maybe we had anticipated in the past. Raj S. Denhoy - Jefferies LLC: Okay. And then just that idea of, does that precipitate – the artificial pancreas right, the holy grail here in terms of actually closing the loop, is that something that - Steven Robert Pacelli - Executive VP-Strategy & Corporate Development: Yeah. Look, I think the FDA is cognizant of the fact that a fully automated system or even a semi-automated system, you're going to have to use the CGM information to dose insulin. So it's hard to have a system that's dosing insulin that isn't labeled for dosing insulin. So, I think there's probably something there as well. I'm not sure that it necessarily accelerates the timing to approval for an artificial pancreas, but I think it's important. Kevin Ronald Sayer - President, CEO, Chief Operating Officer & Director: I think that's one reason the FDA is pushing us to do it. Steven Robert Pacelli - Executive VP-Strategy & Corporate Development: Yeah. I think that's why the FDA is pushing us, that's for sure. Raj S. Denhoy - Jefferies LLC: Okay. And one other question around that. There's been also questions about, as you start to eliminate calibrations, that it sort of is counter to the idea of a dosing claim, right, that those two things just are almost opposed to each other. How do you kind of marry those as you think about moving forward with the different devices in the future? Kevin Ronald Sayer - President, CEO, Chief Operating Officer & Director: Welcome to what I wake up thinking about at 3 o'clock in the morning. It's a very interesting quandary, because if you're not going to take any fingersticks, there's no safety check to make sure that everything is well, and if you're going to have a dosing claim and take no fingersticks, that thing has to work every single time. And so, I think what you're going to see us move into, and that's why I said our first pass with the gen 6 system will be one fingerstick a day for calibration, you're going to see us move into this area gradually, and we have a number of system options that we're considering to whereby we can stay in the dosing claim world, but eliminate calibrations. And maybe you'll see different labeled products from us over time to offer patients more convenience, and certainly glucose information, but maybe not give them the labeling to say, you can go ahead and dose insulin off this thing. So we're considering a number of things, and we'll be breaking some new ground here. Raj S. Denhoy - Jefferies LLC: Okay. Helpful. And then just one last one on the direct-to-consumer programs you're talking about. As you start to get more pharmacy benefit coverage, while Nick Jonas probably resonates with certain audiences I have to admit I'm not that familiar with him, my age (44:07). How do you think about expanding those programs, right, in terms of appealing to a different audience? Kevin Ronald Sayer - President, CEO, Chief Operating Officer & Director: Well, that's why we're running the focus groups, and really seeing what message resonates with this community, and we'll start launching those messages. The direct-to-consumer efforts, in all reality, as we think about creating more awareness, are probably going to coincide more with our gen 5 launch and the connectivity of the transmitter going straight to the phone. So, we're working on this and planning this out. Certainly it would be implemented later this year and into the course of next year. And we'll have more on those messages later, we're just not quite ready to share. Raj S. Denhoy - Jefferies LLC: Great. Thanks a lot.

Thank you. And, our next question is going to come from Danielle Antalffy from Leerink Partners. Please go ahead. Danielle J. Antalffy - Leerink Partners LLC: Yeah. Good afternoon, guys. Thanks so much for taking the question. I just had one sort of high level question, following up on the type 2 market opportunity. Steve, I know you said in five years you thought you could really start to penetrate that market. What will it take to get you there? Is it going to be product driven? Is it going to be data driven, sort of showing clinical trial data that the type 2 patients benefit? If you could elaborate a little bit, that would be helpful. Steven Robert Pacelli - Executive VP-Strategy & Corporate Development: Yeah, it's going to take kind of all of the above. I would tell you those two factors, plus a third being establishing a reimbursement category. And we're starting to see some reimbursement for intensive insulin-using type 2. So these are folks who are on basal-bolus mealtime injections of insulin. They mostly look and feel like a type 1, and we're starting to see some meaningful coverage on that front. Really when you think about the type 2 opportunity, you really need to segment it by kind of the intensive insulin users versus just maybe a daily Lantus user versus those who are on orals, diet and exercise. And I think it'll take probably a different product than what we have today. It will take something that's simpler to use, that's smaller on the body. And these are all the things that we're exploring internally. But I think to appeal to a much broader patient population, I mentioned – a few minutes ago, I mentioned disposable. I think the idea of having something that you can put on as more of a diagnostic tool as a type 2 patient, to really use it as more of a behavior modification tool on a periodic basis, and then be able to throw it away when you're done is quite appealing. And so, these are the kinds of things that are in our more – I would call it our advanced technology pipeline. But certainly, five years out is a long time for us from a development perspective. So, you'll see some iterative steps along the way. Danielle J. Antalffy - Leerink Partners LLC: All right. Thanks so much, guys.

Sure.

Our next question is going to come from Jeff Johnson from Robert W. Baird. Please go ahead. Jeff D. Johnson - Robert W. Baird & Co., Inc. (Broker): Thank you. Good afternoon, guys. Just a couple of follow-up questions here. So, Kevin, in your prepared remarks you made some comments about some of the increased spend also going maybe towards feet on the street on other indications. Maybe you could just flesh that out a little bit for us. Are you talking about OB and ICU and those kind of offices, going in there? I always thought that was more of kind of a G6 timing, when you'd start going into those offices. Just wondering if I'm misunderstanding that, or what the other indications might be that you'd be going after near term? Kevin Ronald Sayer - President, CEO, Chief Operating Officer & Director: Well, I can give you a couple of examples. If we have pharmacy benefit, pharmacists are going to need to know about our product. So, we'll look at that area, we'll also look at some more internal medicine doctors and primary care doctors who see a lot of people with diabetes. And pilot some programs in some geographies and see what that generates from us, some other things. We're looking at really a lot of things across the board, and just to make it easier for people, one of the stats that Terry often quoted was how many prescribers we have in a year and how many of them prescribed one unit. And, last year, we had something like 13,000 different healthcare professionals who prescribed CGM and over 8,000 of them did one. And so, what do we have to do to get those people who do one to do more, because they're not all endocrinologists, they're across the board. We've also got programs targeted more at diabetes educators, and the nurse practitioners and physician's assistant markets, because those people see a lot of patients and are very involved in patient care recommendations. So, we're going to look at a number of different things outside just traditional endocrinology as to where we're going to focus those dollars, but we'll focus them across the board. As you talk about the ICU and OB/GYN markets and such, those are places where we'll probably start running clinical studies, particularly with our gen 6 system with one calibration a day, when that comes out. That becomes much more convenient for example, in a hospital environment, and more convenient for a patient who doesn't traditionally have diabetes. It's time to start running those studies, it's time to start seeing what we can do in those markets. All the technologies we're developing for our core business will be applicable to those patient groups in enhancing their lives and the experience in improving healthcare outcomes. So it's time for us to go there. I put that on Steve's plate. Jeff D. Johnson - Robert W. Baird & Co., Inc. (Broker): All right. Well that's very helpful, thank you. And then Steve, a question for you. Just as UNH and Anthem theoretically ramp here during the third quarter, just to set expectations, I know you don't guide to sensor pricing, but would it be expected that that sensor pricing comes down off the $75, or the high end of that $70 – $75, I mean, I hear everything you're saying about ups and downs and should normalize. But just to set expectations, should we be expecting something more in that $70 or lower end of that range? Steven Robert Pacelli - Executive VP-Strategy & Corporate Development: No, no, no, I think it will be somewhere in the range of $70 to $75. I don't see any change. Jeff D. Johnson - Robert W. Baird & Co., Inc. (Broker): Yeah. Great. And then just my last question. Just as we think theoretically about some of the integrated pump stuff that you're doing on maybe G5 and G6 with the Tandem announcement and that, Tandem talks about they have their own nomograms, obviously you guys know a lot about nomograms. Where does the nomogram reside, I mean is it better to scatter-shot and kind of go with a few different nomograms, maybe one with Tandem, one with somebody else, and see which one ends up working the best? Or do you control that from the beginning because you want to have that spread across all the different pumps, being in a very similar manner. Kevin Ronald Sayer - President, CEO, Chief Operating Officer & Director: Well, we certainly control the way our data is displayed with respect to how the FDA has approved it, and those pump companies refer to our dataset with respect to our PMA filings. So it has to look very similar to ours. If they have different visuals, as long as it doesn't alter the data, that's fine, and I think there will be different views of our data as everybody adds their own touch to it. And look, as we've learned with our gen 5 application, when you want to – if you think you know how CGM data is displayed, it's all about to change. And as you look at things like that, the G5 system displays things much differently than what we've done on the receiver before. So I think everybody'll have their own interpretation, I think – and a lot of it will depend upon FDA process. It doesn't make a lot of sense for a pump company to take everything and change everything we do completely and drag themselves through an extended FDA review, because of this. On the other hand, if they can offer something more beneficial to their patient set, that's great. But also, remember with gen 5 and gen 6 and the other ones that transmitter is capable of talking to two things at the same time. What our patients are offered as the integrated pump moves to a gen 5 and gen 6 platform, is they can look at their data on their pump or on their phone. And if it's on their phone, then it goes to their watch as well – I find the watch view very nice. In fact, I'm wearing my Apple Watch and a sensor today, looking at it. So there's going to be a lot of different ways this is done. I think our motto here is glucose for anybody, anywhere they want it. Jeff D. Johnson - Robert W. Baird & Co., Inc. (Broker): Understood. I appreciate the comments.

Thank you. And our next question is going to come from Jayson Bedford from Raymond James. Please go ahead. Jayson T. Bedford - Raymond James & Associates, Inc.: Good afternoon. Thanks for taking the questions. I apologize if this has been covered, but just a couple follow-ups. On the insulin dosing claim, do you believe you need to run a trial or do you think you can satisfy the FDA with existing data you have? Kevin Ronald Sayer - President, CEO, Chief Operating Officer & Director: You know what, I'm not going to get into all the specifics of what we're doing. We said that we're getting pretty comfortable with the pre-market and post-market work we have to do, and I'm going to leave it at that. Jayson T. Bedford - Raymond James & Associates, Inc.: Okay. Just switching the pharmacy channel and United and Anthem, can you give us a little more detail on the rollout, meaning, are these national, regional programs? And then, are the payers actively steering folks to the pharmacy? Or is that your responsibility? Steven Robert Pacelli - Executive VP-Strategy & Corporate Development: So, I can give you a comment with respect to United. I actually couldn't answer it with respect to Anthem just yet. But I do know that United actually sent – they sent correspondence to all of their patients, as did the DME distributor, to all of the patients informing them – just prior to July 1, informing them that as of July 1 they'd be able to purchase through the pharmacy. I' m not – frankly I don't know if Anthem is doing the same sort of outreach, I'd have to check. Jayson T. Bedford - Raymond James & Associates, Inc.: And is there any reason why someone would not go through the pharmacy? Kevin Ronald Sayer - President, CEO, Chief Operating Officer & Director: You know, if they're used to going through DME, and there are DME arrangements still certainly with United, they might stay where they are. They might have an employer plan that gives them no-deductible from DME. So they would make a decision to do it that way. And understand, when a patient calls us, we do run numbers for our patients, we go through both the DME and the pharmacy scenario to determine what is best for them and give them both options. So, that would be the reason somebody would do that. Jayson T. Bedford - Raymond James & Associates, Inc.: And it's fair to assume that going through the pharmacy is the most cost effective solution for the user, is that fair, in the vast - Kevin Ronald Sayer - President, CEO, Chief Operating Officer & Director: In almost every case, it will be. It is certainly the most cost effective for us, because once that drug store is online to refill orders they're not calling us every time they need sensors. So, you know, that's one of our motivations in doing this. Jayson T. Bedford - Raymond James & Associates, Inc.: Okay. Thank you.

Thank you. At this time we have no further questions. I would like to turn the call back over to Kevin Sayer. Kevin Ronald Sayer - President, CEO, Chief Operating Officer & Director: Thank you very much. And we appreciate all the interest and all the questions today after our call. And you guys are right, the era of connectivity is here and we're learning all sorts of things about our patients, about our product and the difference we can make in people lives through this connectivity. So that has been a great, great thing that happened this quarter and we are very pleased with it. I do want to conclude with a couple of thoughts. As you know, over the summer there's a lot of diabetes meetings that we attend: ADA, AADE is going on right now, and several others. I was attending a meeting in Colorado. In a diabetes symposium, an exceptional diabetes-based – I mean Denver-based diabetes professional gave a talk for us at our DexCom symposium, and she asked a simple question at the start of her talk. Who needs CGM? And her answer was just as simple as her question, everybody with diabetes. She proceeded to present case study after case study of type 2, type 1 patients, all in completely different circumstances and completely different ages, all of whom experienced a significant reduction in A1C and/or a hyperglycemia improvement through the use of personal or professional CGM. CGM tells a story that nobody can get from fingersticks or any other medical device. And the second thought comes from a discussion I had with another physician at this conference, a very well known endocrinologist. And we were talking about the business and he simply said this: nobody comes to my office anymore and asks for CGM. They come to my office and ask for DexCom. And that's a position we want to maintain. We're not going to move away from our long-term goal of replacing fingersticks, and we're going to become the first tool in treating diabetes. Thank you.

Thank you, ladies and gentlemen. That concludes today's conference. Thank you for participating. You may now disconnect.