Welcome to the 2026 Dexcom Investor Day. As a reminder, this presentation contains forward-looking statements. Please note our Safe Harbor statement included here, as well as our filings with the Securities and Exchange Commission.
[Presentation]
Please welcome President and Chief Executive Officer, Jake Leach.
Hello, everybody, welcome to Dexcom's 2026 Investor Day. It's great to see all of you here. Thank you so much for joining us. I'm Jake Leach, President and CEO. Today, we will review our priorities that are designed to drive the next phase of growth for Dexcom. You know, there's many things that make Dexcom extraordinary, but one that really stands out to me is our ability to imagine and build a prosperous future while simultaneously impacting the lives of millions of people every day, helping improve their diabetes management. At the same time, we're lowering the overall cost of care for this population. There are 3 key drivers that are gonna define the next phase of Dexcom's journey. First, we have an advanced product portfolio that is focused on meeting valuable, distinct, highly important things for our customers.
Second, the clinical and economic value we produce is going to significantly continue to expand access for people to CGM, and we believe that that access is gonna continue to grow at a rate faster than penetration. Third, our scalable and category-leading solutions position us for durable double-digit growth combined with strong cash flow generation. Now, before I go forward, I want to briefly ground us in what has made Dexcom successful so far, and it's really that history, combined with our plans going forward, that give us a picture of why we're so confident in the future of Dexcom. Everything starts with our customers. It is what drives us every day. From the beginning, Dexcom built a CGM that was specifically designed for people who had Type 1 diabetes or people with Type 2 diabetes on intensive insulin therapy.
We started with this idea: we want to eliminate finger sticks, and we want to replace it with real-time insights that drive improved outcomes and quality of life. Achieving this goal and the focus on clinical outcomes has been very impactful. Dexcom has been the leader in producing clinical outcome data that has opened up access for CGM to millions of people around the world. It began back in 2016 with the readout of our DIaMonD randomized control trial at the ADA, the American Diabetes Association, meeting that year. This study really opened up broad access for people with Type 1 diabetes and Type 2 diabetes on intensive insulin therapy and really led to CGM becoming the standard of care for that population.
We followed it up 5 years later with the MOBILE study, again reading out in June of 2021, subsequently published in the Journal of the American Medical Association, and this was really the foundation of access expansion into that group. It's also when we really started to show that CGM was more than just a hypoglycemia protection safety component. It was all about behavior change and reducing A1C for a broad population of patients. Now, our next randomized control trial will read out at ADA next month, and we believe that the data from this study will be a very powerful anchor to expand coverage into Type 2, both here in the U.S. and abroad.
As we continue to build on the outcomes of these randomized control trials, we're also showing that CGM and glucose control is important to all metabolic health. Better glucose control has many benefits beyond just lowering and managing A1C. We're seeing reduced cardiovascular risk. We're seeing sustained weight loss. We're also seeing delayed progression of chronic kidney disease. We also hear from our patients and physicians frequently about how CGM helps them reduce the medication burden because the CGM is so helpful at showing them how different medications are working, allowing them to ultimately reduce the total number. All of this leads to improved health outcomes and economic outcomes. This is the latest cost data from the American Diabetes Association meeting. You can see here the estimates are that the average person with diabetes costs our healthcare system $20,000 a year.
Is what's interesting is if you look at that $20,000, 98% of it is spent in 3 places: inpatient care, outpatient care, and prescription medicine. We have consistently demonstrated that CGM is part of a long-term plan and solution that directly address the costs and lowers the costs in these 3 areas. That combination of lower healthcare costs and better healthcare outcomes has allowed Dexcom to really increase our impact, and that impact over the last 5 years has allowed us to more than double Dexcom, growing our revenue up to $4.6 billion last year. Looking at the number of patients we serve, we went from 900,000 in 2020 to over 3.5 million at the end of last year.
We've also been able to optimize our business model and are now operating at margins of over 20%, with additional room to go, as well as creating a very strong cash flow engine. These financial results are rewarding, but what's more rewarding is the impact we have on the lives of our patients. These results are part of something that's very fundamental. It's about creating solutions that meet the needs of users and then putting the needs of those users above anything else. I do wanna take a moment to sharpen our focus on the why behind Dexcom. It's all about our customers. It informs everything we do every day. Today, I'm honored to share a story from the next Dexcom Warrior. He's a hometown hero, San Diego Padre, Mason Miller. Mason is one of the most dominant pitchers, relieving pitchers in Major League Baseball.
He routinely throws over 100 miles an hour. He's got a near record strikeout rate, and he does all of this while managing Type 1 diabetes. He has an incredible story. We're proud to announce our partnership here and to show you the world premiere of this video. Let's take a look at Dexcom's latest Warrior, Mason Miller.
Today, I'm able to throw 104 miles an hour, but only a couple years ago, I didn't even have the energy to take the mound. I'm Mason Miller. I'm a pitcher for the San Diego Padres. I'd say my first memories come around seven or eight, with baseball. Growing up and playing a sport, it's always your dream to play at the highest level. In high school, I was a little bit of a late bloomer. I was always a thinner kid. I was going to college and trying to put on weight, and that was what I'd heard my whole life was just, you know, eat a little more, work out more. It wasn't from a lack of trying, I promise. During my sophomore year, that's when I started showing some signs of diabetes.
I was just tired all the time, sleeping in class, just like a unquenchable thirst. I knew something wasn't right, I didn't know what exactly it was. I'd planned on doing an internship, as so many jobs are, you take a drug test beforehand. My blood glucose levels, they were over 700, they immediately called us and said, "You need to go to the hospital now." That was the shock. You know, I just remember driving in and just not really knowing what life would look like in the slightest. You know, I didn't know, would I be able to play baseball? What other limitations would I have? I got my first Dexcom, it quickly, like, made my life so much easier. You know, I've learned so much about how different things affect me.
It's like I know what's going on because whenever I need to, I can check my phone, or I can check my receiver during games to know where I'm at. I just felt uplifted by the fact that I was finally starting to see, like, what I'd been searching for. I really was able to take my A1C to another level. I was consistently around 5.7-6. I felt great, and that was what was most important to me. My Dexcom has always been a constant for me since the day that I got on it. I get to go to work and pitch in a high-stress environment every day, and that's one less thing that I have to worry about. It goes a long way for me and my network of people making sure and caring about me and wanting to know that I'm okay.
My now wife, Jordan, she always supported me from day one, and it was like it was no big deal. She's had the Dexcom Follow app on her phone for so many years. Just a constant reminder of how awesome she is. Excited to be partnering with Dexcom and be able to expand the reach of, you know, my impact, my ability to reach kids and bring them out to the ballpark, give them a chance to see firsthand that Type 1 has no boundaries and won't hold you back. Living with Type 1 is a part of who we are, but it doesn't define us. Dexcom G7 has given me a ton of freedom and a ton of reassurance. My name's Mason Miller. I'm a Dexcom Warrior.
Pretty incredible story. Actually, in talking to Mason, he was really struggling with baseball when he was in college, and it wasn't until he got a Dexcom and was able to manage his diabetes that he became the dominant pitcher that now competes at the highest level. It's stories like Mason's and many of our other over 30,000 warriors around the world that are so important to help us educate people about what this technology can do to help them achieve their life goals in managing diabetes. It's so important because diabetes is one of the largest health crises we have around the globe. This is data from the International Diabetes Federation projects that by 2050, we're gonna be more than 850 million people around the world living with diabetes.
That is a pretty significant increase from the tremendously large numbers we already have today. This growing prevalence of diabetes is really placing a pretty significant burden on our healthcare systems. In the United States, we spend more than one of every four healthcare dollars treating diabetes. If you look at the funnel, pre-diabetes is not slowing down. The CDC actually recently updated their numbers. We now have approximately 115 million people in the United States living with diabetes or pre-diabetes. That's 40% of the U.S. adult population. The question is: how do we extend Dexcom's growth and make a dent in this metabolic crisis? Well, I've laid out three priorities for our organization that are set up to drive this next phase of growth.
First, we intend to remain the premier glucose sensor for all people with diabetes, use that leadership, and extend it to be the premier glucose sensing solution for all people. Second, we will set the standard for customer experience in glucose biosensing. Finally, we have a significant opportunity that we will capitalize on to grow our international market share. All three of these priorities require us to focus on scale, which is one of the reasons why we're very excited to provide you guys later today with a tour of our high-volume U.S. plant here just down the road. What's interesting is scale is not just about the manufacturing plants and the number of sensors we make. It's about how we structure the organization going forward and planning for scalable innovation for many, many years.
Over the past several months, we've made some pretty important changes to the internal team structure at Dexcom. The goal here is to increase our pace of innovation and ensure that we never compromise on quality or the trust of our customers. First, we're in the process of recruiting a brand-new role at Dexcom, a chief product officer. This is a role that's really focused on anchoring in customer-focused innovation, as well as our product vision, our strategy, and our product release cadence. We've also made another very important update. We've combined our manufacturing, supply chain, and quality all under a new leader, new to Dexcom. His name is Zef Cisneros. He joins Dexcom with significant experience across med tech in high-volume manufacturing and lean practices.
All of this is in a goal to execute on this opportunity in front of us and ensure we meet the needs of this growing customer base. We're also excited to announce today that we've been working closely with Elliott Management to recruit two new board directors to our board, and it was particularly with experience in med tech and high-volume operations. We've had very constructive conversations with the team at Elliott. We've also decided to repurpose the mandate for our Technology Committee, one of our four Board Committees, into the Operations and Innovation Committee. That committee will now have oversight over both innovation and technology, but also importantly, the operations of the company.
These updates to the governance model and the structure, internal structure of Dexcom are being made in an experience to ensure that we're taking advantage of this significant opportunity and really strengthening our capabilities. All these changes in leadership are gonna help fortify us as the leader in glucose sensing. All of the leadership in glucose sensing starts with a holistic vision of the diabetes ecosystem. We understand that customers are multifaceted. It's not just the person that wears our CGM, it's also the prescriber, it's their caregivers, it's the payer, and it's the channel partners. All of us are working together to provide an uninterrupted, exceptional customer experience. To execute on this vision, one of the things we've established is a competitive advantage in connectivity.
We're the CGM partner of choice across automated insulin delivery and connected pens. We were the first to begin integrating digital health apps into our ecosystem to amplify the value of the CGM data we produce. Also, on the clinician side, our Dexcom Clarity software has earned strong recognition as an important tool to help physicians interpret CGM data and make using that data in their practice easier. We're now extending that advantage with direct integration with the EHRs. Let's take a little closer look at these advantages. We established the AID category through a focus on sensor performance, clinical work, and partnerships. These are some of our most highly retained, highly satisfied customers. As a result, Dexcom is the leader in connected AID systems with more than 1 million users around the world wearing Dexcom sensors connected to an AID system.
Going forward, we are going to extend our leadership here with a focus on accuracy, reliability, connectivity, as well as the overall user experience for our joint customers with pump partners. We're also addressing new clinical needs. One of the key struggles with type 2 basal insulin therapy initiation is what often happens is a physician initiates basal insulin therapy for a customer, and they put them at a low dose. Then after a number of months, patient comes back to the clinic, they check the A1C to determine if the dose is right. They often have to make a correction to make it more aggressive.
What we see, and as you can see in this clinical study, pretty significant size clinical study, a dramatic increase in A1C once that basal insulin therapy was initiated, and that's because the dose was too low, and it wasn't optimized for, in this example, up to 12 months. It took up to 12 months for this cohort of patients to get to an A1C that was slightly below where they started. We have a technology, Dexcom SmartBasal, that's designed to solve this problem. It uses real-time data, interacting with the clinician and the patient, to get to the more effective dose faster and get that A1C for those patients moving in the right direction. SmartBasal is able to change the time it takes to get to the right dose from over 12 weeks to fewer than 30 days.
It is a much faster, more efficient solution and more satisfying for both the patient and the clinician. It really fits well into the workflow of the HCP because they don't have to have the patient come back for A1C tests and then use those A1C tests to modify the dose. It's all done automatically by the G7 product in the background, giving that user a recommended dose every day. This technology has already started rolling out. We've got it in a number of clinics around the U.S. We've learned some great things about the workflow in the clinic.
We've already made some changes to how we're managing accounts to fit in with some of the workflows that we've learned about in these primary care offices, and we look forward to rolling it out in the coming months across the U.S., and then ultimately rolling it out internationally as well. SmartBasal is just one example of how we're differentiating our products with software. What's really interesting is despite all of the incredible advancements in automated insulin delivery systems and insulin pumps, approximately 94% of the people around the world that are on mealtime insulin are using injections, multiple daily injections. People on intensive insulin have to make all kinds of decisions every day about the carbohydrate intake, how much insulin to take, how much correction to take, making sure they don't go hypoglycemic.
It's no wonder that with all of those decisions, 30%-40% of these folks suffer from diabetes distress, which is a term we use to assess the mental burden of diabetes. We see a very meaningful opportunity to improve this experience and outcome for these patients. Dexcom SmartBolus is designed to make dosing safer and simpler for these MDI users. It incorporates CGM trends, nutrition information. It allows the patients to avoid hypoglycemia risk while also doing a better job of managing their glucose. It really takes the variability and a lot of the math out of everyday life. It's a streamlined experience for those who may not have access to pump therapy.
At the same time, we're gonna continue to invest in the clinical data and the clinical physician's experience to enhance the efficiency of their practices, and this is just one more example of how we're doing that. Another interesting point is that clinicians often can't see CGM data inside the electronic health record, which is where labs and all the other important clinical information resides. This gap produces friction and creates inefficiencies and extra steps for that physician to actually take that CGM data and turn it into something meaningful for their patient. This is one of the reasons why we believe we're seeing such a strong response to the Dexcom Direct EHR integration. This is an API technology, software technology that connects Dexcom CGM directly to the EHR system.
It's unique to Dexcom. It does not come with added costs to the healthcare system like many other integrations do. We're seeing pretty rapid uptake. We have over 320 health systems that are either integrated or in the process of onboarding. Every time I report this number gets bigger. This is mostly in the U.S., but we're starting to see uptake outside the U.S., and it is across multiple EHR systems, primarily Epic, but we're starting to see some of the other systems in the market adopt this connection as well. We do look forward to sharing more about this particular solution at the plant. When you guys are doing your tour, we've got a full demo of this EHR integration up and running there.
As we continue to expand the experience for the clinician, we're also continuing to push forward on that core CGM technology. We recently launched G7 15 Day. It has an optimized algorithm and extended wear time. We're hearing very strong response from our users and how much they are enjoying the extended sensor wear as well as that improved accuracies. It's consistently highlighted in their reviews when they talk about the product. With an improved adhesive that we just got approval for recently, it's beginning to roll out. We've already got customers in the field experiencing this new adhesive. We expect that this experience that they're having now is gonna get even better.
The rollout of G7 15-day is going exactly as we expected. In fact, we are on track to convert nearly half of our U.S. base over to this product by the end of this year. This month, we're also excited to now have compatibility with Tandem with our 15-day product. Now Tandem joins Beta Bionics and Insulet in compatibility for 15-day. Finally, we are working to extend this 15-day wear life to our international markets. We're gonna start in the second half of this year. We'll start rolling G7 15-day out across those markets as we continue to get regulatory approvals. As we think about the future, 15-day sensor wear becomes the baseline for all of our products going forward.
As I think back about the history of Dexcom, and I've privilege to have been part of many of these step changes that the industry has experienced, they've been driven by Dexcom. We were the first to establish glucose alerts and alarms. We were the first to establish the real-time remote monitoring system that, for many cases, gives parents the first time they can get a good night's sleep. We were the first medical device to integrate directly with a smartphone. We have had industry leadership in accuracy, reliability. We established the first single-digit MARD. We were the first to get the non-adjunctive claim. We eliminated finger sticks, and then ultimately established the ICGM standards. These are the types of step changes when I think about the history of the CGM category.
The question is, what's the next step change, and how are we gonna deliver it? Well, this is one of the fundamental questions that I've been addressing. As I've stepped into the role of CEO, I wanna make sure that our next product is a step change. To help figure this out, we go to where we always go, which is our customers and our future potential customers. We've been talking to patients, clinicians, people with diabetes, people within the diabetes community, many of which we've had partnerships for a long time. I recently formed the Customer Advisory Council because I really want my entire team tuned in to the needs of the people that we serve. What did we hear consistently from this group? We have heard that the number one thing that this group wants is they want reliable glucose data.
They want a product that's accurate, they want a product that's reliable, and they want a product that's easy to use. If you look at the current state of the CGM industry today, the top two reasons that an individual stops using their CGM is because they don't feel that the glucose data is reliable enough. You can see a poignant statement here from a CGM customer from social media. What users like myself really want is the product to be accurate and reliable. While we have great performance, industry-leading performance for accuracy and reliability and sensor wear with our G7 15 Day product, it meets the needs of many users, but not all. We see some pretty significant opportunities to enhance the performance of this product and ensure that it meets the needs of all users. We hear this across the spectrum. It's not just G7.
We hear it from our Dexcom ONE+ users in Europe. We hear it from our Stelo users here in the United States. Everybody wants these systems to be more accurate and reliable. The question is: How do you actually improve sensor reliability and reduce the variability that we see? Well, to materially improve sensor reliability, there's basically two things you have to control. The first one is the design and the manufacturing process of the sensor. Frankly, today, and you're gonna see it when you go to the factory, we've pretty much managed this variable. If you look at the way we build our sensors, you're gonna see this. You're gonna see every step as we do our process controls, and then ultimately, you'll see that we factory calibrate and test every single sensor before it goes out the door.
The other source of variability is a little bit harder to control. This variability comes about when you insert the sensor under the skin in a person's body. We all have unique physiologies. We all react to these sensors slightly differently, which produces some variability for that sensor. At the moment, CGMs have very little ability to adapt to this physiologic change. One of the interesting things is Dexcom CGM today, you can calibrate it, right? You can take a finger stick and enter that into the device to calibrate it when this type of situation occurs. Some users today do. They do that feature. If you think about it, and it's helpful for them, but if you think about it's burdensome, and it comes with its own problems of what's the accuracy of that finger stick.
This really brings me to the next step of how are we gonna make a step change performance in CGM? Well, the answer is the G8 product. Dexcom G8 builds on the G7. It's a 50% smaller form factor. It has advanced sensing capabilities. It's really about strengthening everything across accuracy, connectivity, system design. It doesn't just represent a step and a small change. This is a step change. It is a completely new product platform. The improvements are very exciting, and they're much more than incremental. G8 is actually gonna change everything. The way that it does this is it is a sensor that's gonna adapt to that physiologic variability that I talked about. This data is from a clinical study. You got G7 and G8.
One of the things you'll notice about the G7 is you've got a good distribution of performance there. This is an MARD graph, a graph of performance. You can see those outliers over on the side. Those are the most egregious ones, and those are the ones that really are generated by some of these physiologic changes that we see when a sensor is inserted. Those are the types of sensors that produce those experiences that cause customers to stop using CGM. The G8 system has additional technology built in based on a whole new silicon chip design and algorithm. Much of this has been in development for several decades at Dexcom, because we've always had this idea of trying to do this, but now we're finally proving feasibility that we can make this happen in the G8 product.
What it's doing is it's measuring additional signals from that sensor beyond just glucose that allows it to adapt to those physiologic changes and reduce the outliers in real time and eliminate them. The G8 really combines the factory calibration with this adapting system that allows the CGM to self-adapt with every user. It's a precise sensor that's gonna adapt to the body over time, and we expect this to really enhance the user experience. Now, our teams are marching rapidly towards submission of this product next year that will facilitate a launch either at the end of 2027 or early 2028, depending on the regulatory review timing. We have some pretty strong momentum going with G7 ten-day and G7 15 Day. We intend to carry that momentum forward into the launch of G8 in a multifaceted view of our customers.
We have purposely focused on ensuring we meet the most important need for users in terms of accuracy and reliability of glucose readings. Right behind that product is a multi-analyte version of G8 that will add to the product portfolio. I think what's important to know is about all of this technology is being developed for all people with diabetes, not a specific subset. I think you've all seen it, the coverage momentum for CGM across the world and across a broad spectrum of diabetes is continuing to build. Clinically speaking, these outcomes have been repeated multiple times by Dexcom. This is data from our type 2 registry, where we've been showing reduced A1C, sustained weight loss, as well as greater control and reduction in medications. This is in people with diabetes type 2 that don't take insulin.
We've also recently seen a very important update from the American Diabetes Association and their standards of care. They've added a recommendation, a broad recommendation for CGM for all people with diabetes. We're really starting to see some good traction here. We also, as you guys heard on our last earnings call, we talked about another PBM, the next largest, starting to cover CGM for all people with diabetes this year. While we really appreciate this momentum, we're not gonna stop. We're gonna keep generating the clinical evidence that we need to drive more and more access around the world for this technology. We've set the standard for what clinical evidence in CGM looks like with the DIaMonD study and the MOBILE study, and we're very excited to be doing the next readout of the Connect trial.
The Connect trial, just for a quick summary, the main point of this study is it is looking at A1C reduction in people with type 2 diabetes, not on insulin. One of the things you will notice is there is a nice breadth of medications utilization in this study, so pretty broad spectrum of patients, which we feel is important, including those that are not even using glucose-lowering medications. We feel that is important to capture the full spectrum and benefit for this population. We do believe that the study data from this is going to be a real anchor in our access story as we look to expand access to CGM for all people with diabetes, both here in the U.S. and internationally. The readout, the full readout of this study is on Saturday, June sixth, 1:45, the American Diabetes Association in New Orleans.
We hope to see many of you there. Based on this strong clinical data, we do expect a Medicare coverage decision anytime between now and the end of this year. What we expect is the coverage to take place count next year. That could kick in at any point. What we've decided in our plans is that we believe that coverage will come the middle of next year. It could come at any point, and when it does, we will be ready, but I wanted to be transparent about how we're thinking about it. We do expect, again, to hear before the end of the year on a coverage decision and for the coverage to take impact next year.
Jon's gonna cover this a little more, but this coverage decision will basically double the addressable market here in the U.S. in terms of those that are covered for CGM. You can see there's a ton of excitement building here, there's lots ahead, but I do feel like we're still just getting started when you look at where we are as a CGM category and the opportunity there exists both here in the U.S. and abroad. I'm gonna close this section by reiterating a very simple point. Everything we do starts with customers. You're gonna hear that theme throughout today, and I hope you experience it directly when you meet some more of our team members later this afternoon, as well as some of our Dexcom warriors.
When I think about what we as Dexcom need to do is, I've instilled in my team, we need to dig in and execute on this amazing opportunity we have to have an impact on people with diabetes. At that point, I wanna introduce a new team member that we joined Dexcom last year. He's gonna present in greater detail our commercial execution plans. Please welcome Jon Coleman, our EVP and Chief Commercial Officer, to the stage.
Please welcome EVP, Chief Commercial Officer, Jon Coleman.
Good afternoon, everyone. I want to join Jake in thanking you for being here, making the effort to take the time to hear us articulate our vision for the company, to give you reasons to believe why we can execute on that vision. A little over a year ago, I was approached by Spencer Stuart about this opportunity at Dexcom as Chief Commercial Officer, I had two impressions at the time, two thoughts. The first was how ambitious a vision the organization had to be able to be in a position to add millions of patients' lives to the technology, also to grow the revenue by billions of dollars within a fairly short period of time.
The second thought I had as I reviewed the job description was that what they were looking for in a chief commercial officer aligned with my 15 years of experience at Masimo, where I helped roll out as the Chief Commercial Officer there, the extension of the brand across the globe. And also, leveraging some of my experience when I was at Pfizer Consumer Healthcare, running a lot of their OTC businesses, where I had an opportunity to live about 10 years abroad.
As I thought about that in preparation for this meeting, I thought how interesting it is I've had the last year to dig in with my teams, make some changes, spend time in the field, get to know the individuals that report to me, and get to a chance to get to know the organization and build this LRP from the ground up and not from the top down. My mandate was from Jake, from Kevin, was to build it based on what we felt we could do, not build it based on an expectation of growth at a specific target, and that's exactly what we've done.
What I'd like to articulate is my confidence in what we're presenting to you today, why I believe we will achieve it, what are the facts behind it, what is the momentum that we have, and I'll give you specific reasons to believe why we are ready for this opportunity. It's not just that we're relying on CMS to expand coverage, although that is built into the plan. There is so much more that we're ready for as we've prepared for this moment. We've done it both in the United States, and we prepared internationally, and I'll explain in some detail what I'm referring to. First, we have the products that we need. Jake described what those are and what they are going to be in the future. We expanded our sales force a couple of years ago.
It wasn't just the expansion, it was the focus on where patients will be going to be cared for as they deal with their burden of diabetes. We worked aggressively to expand our coverage in pharmacy and other areas in the United States as well. At the same time, internationally, we looked at this and said, "There are access opportunities, both in the short, medium, and long term, that we can leverage to really drive growth internationally and at the same time be judicious in expanding our presence and footprint around the globe." I'll speak to some of those things as well. Let me speak first about the U.S. You're familiar with this data. We know on the far right side of this chart, there are 15 million covered lives in the U.S.
We also know that there are an astounding 9 million people that are not on CGM. It's our opportunity at Dexcom, our obligation, to figure out how to align the needs of each of these different groups within diabetes and ensure that our products and the experience they have with us match those needs, and they are different needs across each of these categories. Jake referenced this a minute ago. We expect that this coverage is going to double by 2027. Some of you may have seen our previous statements. We expect the CMS coverage to add 12 million lives. You say, "Okay, that's 15 plus 12, 27. Where's the other 3?" We expect that that will be following Medicaid formularies that will be coming online throughout the year as well, following on the footsteps, so to speak, of CMS.
I guess the point is, there's just such extensive opportunity. The thing that we have to do at Dexcom, again, is ensure that our messaging, the way we're speaking and delivering the experience to our customers aligns to their needs. Otherwise, when all of these people come in, you say, "How do you keep them?" That's the question we're asking ourselves every day. How do we help them? We do it by personalizing the experience. You know, as you look at the left side of this slide, the people who are dealing with this burden of Type 1 are dealing with dosing, insulin dosing decisions. They're dealing with avoiding hypoglycemic events, minimizing them as much as possible.
On the other extreme, for those who are at Type 2 NITs, they're wondering, "How did I get here, and what do I need to do to change this to avoid it from progressing into something where I'm having to use insulin?" They're wondering what part they played in that, maybe feeling guilty and overwhelmed by the burden of that. We're there, and our intent is to be there as an accountable companion to help them work through what they need to do with data, but with specific insights that we're gonna give them, and I'll explain to you what I mean in a few minutes. Here are some of the things that these Type 2 NIT patients are looking for. Many of them resist food cravings. They wanna be consistent in the way they use exercise to help them manage their glucose levels.
They wanna stick to a healthy diet, many of them, but they need to understand from us how exactly is Dexcom's data gonna help them do all of those things. Like, understand what the food that they're consuming is doing to them, and what the exercise that they, some of them want to do is, how it's gonna benefit them. They have a lot of knowledge with our technology. What they need is a companion accountable to helping them get through it, and that means we've gotta be very specific and nuanced in the way that we speak to them, and that's what we're working on. We've had the fortuitous opportunity to welcome Stelo into this portfolio about a year and a half ago, and we have learned a ton. Some of you might think, "Okay. Well, I thought Stelo was health and wellness.
I thought Stelo was pre-diabetes. It is, but we found that a lot of Type 2 NIT patients who don't even realize they have coverage have come into the franchise through Stelo, and we have gleaned a huge amount of information about how to speak to them, how to inform them, and how to help them. I as one, I used Stelo prior to joining the company. I found it extraordinarily helpful to a point. So this next video that we're gonna show you is going to explain to you what we've learned, what changes we're gonna make to the app to enhance the information that we provide with the objective of being a companion, as I said, an accountability companion to our patients and those who use us.
You'll see in the video how it's not just our intent to keep it within Stelo, it's to migrate it into the G7 products to bring those technologies the same benefit and insights, and those patients the needed information they need to make changes and avoid potentially sliding further up the acuity scale. Here's the video. I hope that you can see from that video the things that we're gonna be doing to enhance the Stelo experience through this enhanced app, but it's not stopping there. It's gonna migrate its way and help us with Type 2 NIT patients to inform them as to what we can do to help them in a way that will really, really make a difference. Just briefly, I've been wearing this new version of Stelo for several months. I blog my meals.
I get a meal score. It tells me. Like, I ate a banana couple of weeks ago. I had no idea that a banana would spike me to 190, and keep me at 190 for 2 hours. I didn't know that. I found that exercising at a certain time in a certain way, layering foods in a certain way was all helping me, and then the app would tell me, "Hey, I noticed that you did this, and I noticed that you ate at this time. I noticed you ate a little longer, a little later." It gives me these insights, and I'm telling you, it is changing the way I am approaching this.
I've been worried about sliding into type 2, and now I've got, like, an injection of hope around this app that's helping me to understand what I can do differently. It's changing my behaviors. That's what we're gonna do here with the G series as well with the aid of Stelo. We've already got a retention advantage versus our competitor. I'm convinced that this sort of personalization is gonna give people a reason to stay, because they're gonna see the reason for why they should use it, and they're gonna see the impact on their lives. We're gonna see, we believe, this retention gap widen, our retention strengthen, and we've got work to do there, and we're doing it now. Otherwise, you sit here and you say you've got this tsunami of new patients coming your way. You wanna help them.
It's a burden, you wanna do everything you can to inform them, help them, and make it easier for them. Now, we know that there are better clinical outcomes if people use the technology. This chart, there are 2 lines on this chart. This is looking at A1C over 12 months. The first line, the top line, shows you an A1C reduction from using CGM less than 90 days in a year, which is great. I mean, I'm glad that people are using it. They're using it, though, less than 90 days, and they're seeing an impact from that. The bottom line is, are those individuals who are Type 2, who are using the technology more than 270 days a year, look at what happens with their A1C reduction. It is profoundly improved. What does that mean?
I think you're all familiar with the concept of time and range. That difference means that an individual with Type 2 will be in range three more hours per day, 21 more hours per week, right? Over time, that makes a difference in clinical outcomes. The other thing I love, that was a study that was published in JAMA last year. That same study showed the combination of CGM with SGLT2s and also with GLP-1s, those top two graphs. You can see, of course, the lighter green line shows improvement using those drugs, which is wonderful and great. What's fascinating is long-term use of CGM in combination with those two medications does even more for patients and has an even more profound impact. Now, how do we tell people about this news? How do we let them know?
Well, the way that we do it is to make sure that we ourselves are focused on where to go. You all know that endocrinologists are primarily dealing and helping Type 1 patients. You know that primary care physicians are primarily gonna be working with the Type 2, Type 2 patients. We need to make sure that we are focused in that same way in providing insights to those different groups who have very different needs. I mean, there's a lot of information on this slide, but if you look down the left column, it talks about the endocrinologist and the primary care's information about knowledge, brand knowledge, and then goes down through a bunch of criteria, including their confidence in CGM. It won't surprise you that endocrinologists have a high level of confidence in CGM.
Primary care physicians who are dealing with patients for a whole lot of reasons, as we know, have limited confidence in the brand or in the technology. We have to make sure that we're focused, calling on, bringing them information that also lightens their burden, that makes it easier for them to get people on the technology so people are not going back to them, dealing with them on how to onboard, et cetera. We're helping them with that. We're giving them the information that enables the PCPs to see more people and not sort of continually inform people who have tried to get on the technology. This, again, is one of the reasons why prior to my arrival, there was a decision made to expand the sales force in the U.S. by 40%.
It wasn't just the sheer size of it that we were trying to realize. It was making sure that we were calling on primary care physicians, anticipating this wave of patients that would be coming through and seeing these PCPs. We know it's working because we're seeing share gains. We're seeing share gains on the left side of this chart in these primary care offices. You see in the middle of that, in 2023, a roughly 30% share. 2025 has grown close to 40%. We're just getting started. You go over to the right side of this chart, you'll see that basal share has gone in a similar way between 23 and 25.
The more we personalize and speak in a nuanced way to these patients, the more we inform the doctors, we lighten everyone's load, the more this share will grow, and it's happening now. In summary on the U.S. before I transition for a few minutes over to international, we understand these customer needs. We're focusing our products on those needs. We've expanded the sales force. We're ready for the tsunami of new patients that are going to be coming, and we're confident that through the work we're doing, we're going to be able to lessen the burden for these patients and give them a reason to try and use the technology for extended periods of time in order to optimize their outcomes. Now, international. As I mentioned to you earlier, I lived in Brazil, I lived in Singapore, I lived in Toronto, I lived in the U.K.
I love international. I've done a lot of work there, but we need to be careful in the way we spend and focus as we go forward, and we're going to do that. The gray area of the world is where Dexcom was not in 2015. In 2015, $50 million in revenue, roughly 30,000 patients, only 3 countries with over $5 million in revenue, and 0 direct sales. This revenue was coming through distributors. You fast-forward 10 years to 2025, and you'll see what we've done in that 10-year period of time. You know that there, as Jake alluded to earlier, there are a half a billion people today outside of the United States who have diabetes, and it's gonna grow to something significantly more.
You can see the progress we've made in this time, but I think if you fast-forward five years, you're going to see, in the end of our LRP, you're going to see a multiplier effect on where we go with this. You'll see multi-billions of dollars in international, which we should do, and we can do, and we will do. One of the reasons we're having success in this area is because we have a portfolio strategy which recognizes the fact that one market in international is not all the markets international. They have very different approaches to reimbursement. They're in different phases of reimbursement. There are some that have broad reimbursement. That's where we have our G-series product.
There are places where there are tiered reimbursement, of course, and that's where we introduce our Dexcom ONE+ product, which is really being used for people who are not pumping insulin. Finally, when there's limited reimbursement, well, we use a plethora of products, and there's one that we're gonna be introducing very soon. We've already pre-launched it in Germany. We're calling it Flex. This product is gonna be focused on type people with Type 2 diabetes, basal and IT. It's gonna be specifically geared toward them. The app is gonna speak to them in a way that makes sense to them, and we're gonna then, after launching this in Germany in the short term, officially launching it, we will expand it internationally in many other locations. We're also gonna be expanding Stelo starting this year in Korea, Australia, New Zealand, and then soon thereafter in the U.K.
Our international growth strategy, as I mentioned at the beginning, is really based on 2 things. First, it's recognizing that access is coming, and we know where it's coming and we have a sense for when it's coming, and we're focusing on where to do that. As I mentioned, I'll briefly talk to some geographic expansion. Lot of flags and lot of information on this chart. On the far right at the bottom, if you just tally that column, really, I think the first takeaway is in these 10 big international markets, there is roughly the same size of opportunity as there is in the U.S. This is why we're gonna focus and continue to go deep in these top 10.
The second thing that you'll notice in the upper left, on the left side, is that the Type 1 penetration is slightly at or above the U.S., which is great. When you look at Type 2, you notice as you go down the slide in the center, there's a lot of opportunity for expansion in the Type 2 space. What we're doing is simple. We're working with clinical bodies, leading clinicians in these different markets, to put together what's needed, the clinical evidence needed to present to the governments to ensure that they understand what benefit could be had from their constituents using CGM for a prolonged period of time. Here's the way we sort of map this out, these 10 markets, in these different categories.
On the far left, you'll see what we think is near term, 1 to 2 years, medium, we're defining 2 to 3, and long term, 4+. Those three columns, Type 2 IIT, Type 2 basal, and Type 2 NIT. What I love about this is we're not forcing or making this something up. We're taking it and looking at what's happening, what we're seeing on the ground, the research that we're creating, and what it's going to take in order to penetrate these markets. We think this is a pragmatic approach which extends itself out and across our long-range plan. The other thing we'll do, we'll do this carefully as well. We did this a lot at Masimo, and we had great success. Dexcom's had great success here, going from distributors to direct markets, basically transitioning.
When we did it in Germany, where we bought that distributor several years ago, the revenue quadrupled within 2 years. We're doing the same thing in Japan now. We just transitioned the sales force from a third-party group to our own. We've hired those people. We've done it, as you see at the bottom, in other places. We have a roadmap of other places where we'll be doing this moving forward. Jake mentioned our scale. We're gonna leverage that through the onboarding of our plant in Ireland. We're gonna use that full capacity to help us expand. Jereme's gonna come up in a moment and talk about 15-day and how that incredible product is going to allow us to leverage opportunities around the world, if and where we need to be more competitive in tenders, et cetera.
Finally, we're gonna leverage, you see all those products at the bottom, where we need to across the portfolio and across these different markets. It's working now. It's gonna work moving forward. In the last couple of minutes, here are some 3 of the biggest markets where we plan to enter in the next 2 years, hopefully sooner: India, Brazil, Mexico. You can see the total number of diagnosed patients with diabetes in those locations. It's a huge number. That's not necessarily what attracted us, although that is a reason. There are a lot of people, 15 million among those 3 countries, who are intensive insulin therapy users, and that, we believe, creates a major opportunity for us to go after them in the short term.
In summary, my impression a year ago about the ambition and vision of Dexcom to grow its patient base profoundly, to grow its revenue dramatically, I think is backed up in the evidence that I've presented today as we built this LRP from the ground up. We're ready in the United States through our expanded sales force, which is settled in and focused, where we have expanded pharmacy coverage and where we have the right products that are now really beginning, I think, to build on this legacy, build on this idea of nuanced ways in speaking to Type 2 diabetics to keep them and retain them and help them along their journey.
Second and finally. We have a great international plan. We have great people in the field. We have a really measured approach, and we're gonna execute it with excellence. With that, I'll turn the time to my esteemed colleague, our CFO, Mr. Jereme Sylvain. Thank you very much.
Please welcome EVP, Chief Financial Officer, Jereme Sylvain.
Hey, thanks everybody, thanks for joining us here in Tempe. I think we're really excited to host you at our facility later today. I know you guys took a lot of time out getting out here to see us, really thank you again. I really do appreciate it. You know, what we wanna talk about here is we've started with Jake talking about really our product portfolio, the clinical evidence we're generating over time, and the really exciting opportunities ahead of us. John came up and talked a lot about the commercial opportunities, you can see there's a long way to go. We're gonna turn into now talk about really the financial and the investment case. I think Dexcom has an incredibly compelling investment case. We have a durable double-digit growth runway. That's certainly 1.
We believe and we know we have a really leading cash flow generation profile through gross margin, operating margin, and cash flow generation over the coming five years, and look forward to sharing with you a little bit of the how. We believe there's a significant value creation opportunity available for us today. It's enabled by what you can see at the bottom here, is there's an incredibly large TAM that's available to us today. We have an incredible product portfolio design. We have a massive unmet need, and we have investments targeted in driving that growth, and we look forward to talking a little bit about how those impact us over the course of the five-year period.
We've demonstrated the capability, and I think we'll demonstrate it a little bit more to walk through some of the leverage initiatives in our LRP through 2030. I wanna be very clear, this is not a CAGR. This is not an average. It's 10%+ each year, every year, and it's driven through multiple years of significant growth catalysts, and we're gonna walk through them on the right, through product launches and expansion. As we dig into it, I hope you're gonna see, we are going to unlock lives, coverage of lives significantly over the next few years, where we're gonna exit our LRP in a better position than when we even started. We'll talk about that in a second. I also wanna let you know that this isn't a rosy sky outlook. This is a very grounded outlook.
This includes competitive bidding assumptions starting in 2028. This includes competitor product launches over the course of time. This includes classic price mix work that we'll go through over time. We still feel highly confident, 10% plus every year. As you look at the growth catalyst, I'm gonna walk you through those for some of the whys. Some of these have already been covered. We're gonna talk about launching 3 products outside the U.S. this year. Dexcom Flex, it's gonna start in Germany. Make no mistake, it's gonna go beyond Germany over time. With the great feedback we've seen on Dexcom G7 15 Day, we're gonna launch that outside the U.S. this year. We're launching, as Jon just said, 4 countries in Stelo. That's gonna continue to happen outside the U.S. We're gonna continue to expand those.
The following year is when we launch G8. Jake alluded to it at the end of 2027, early 2028. G8, an incredible step change in accuracy, a sensor that adapts to you. It's an incredible opportunity. Dexcom ONE+ is gonna launch in 15 Day as we move into 2027. We've seen incredible uptake across both our 15 Day, and we expect to see incredible uptake with our G8 platform. We're gonna launch G8 outside the U.S. and on Stelo in 2028, and then outside the U.S. on Dexcom ONE+, and that's just in what we've announced today. Those catalysts, as we put those in front of coverage expansion, are going to be incredible opportunities.
Now let's talk about the coverage expansion expected, and we'll get into it a little bit more on the next slide, but it's a very exciting opportunity here. Medicare, obviously we expect an announcement any time now. We obviously, for our LRP purposes, we put it in the middle of 2027, but we expect an announcement at any time here, and we will be ready. We will be ready when that time comes. We'll be ready to serve the unmet need, and we'll be ready to serve it with product enhancements over time. I think you guys saw some of the app improvements we're launching with Stelo here recently. That will come over to the G series. We expect that to be a differentiator longer term. You can see below it on Jon's slide, he laid it out. We expect expansion of coverage.
This is just in the top 10 markets across type 2 IIT, basal, and type 2 NIT over these years. There's an incredible opportunity that sits right in front of us today. Just to show you how big that opportunity is, let's talk about it. Let's talk about how many lives we're going to expand that to. This year, we have a little over 23 million lives covered around the world. We expect to exit around 52 million, more than double the covered lives by the end of this LRP. Maybe what's most interesting, the percentage of people that are on CGM as a percentage of covered lives will go down from where it sits today. This is the opportunity ahead of us, and we're making these assumptions under a measured basis. We're not assuming hockey stick effects or anything along those lines.
What this is a measured basis, a very reasonable, grounded assumption. With this type of expansion in front of us is an incredible opportunity. As we exit 2030, the expectation, just to give you some context as to where the penetration sits, is in type 1 around the world, getting close to 70%, 80%, and intensive in the U.S. similarly. Basal and the mid-40s, and type 2 in the 10%-15% range, and everywhere outside the world, even lower than that. It just goes to show you, even as we add all of these users over the next 5, 4, 5 years, you're gonna expect to see even more opportunity as we exit the LRP. That's just in the U.S. and the top 10 markets. There's also the opportunity for geographic expansion. Jon alluded to it.
There's 500 million people outside the U.S. that have Type 2. As you get into the countries outside of the top 10, many of these finger sticks are still the standard of care. We've shown time and time again, as we move into these markets and we're able to replace finger sticks, coverage comes. With Dexcom ONE+, we went into seven countries, none of which had coverage, six of which established coverage within the next 18 months. This is the kind of opportunity we have outside the U.S., and we're gonna go into some of these major markets. Over half the people with diabetes in the world sit in APAC. This is an opportunity, a massive opportunity in front of us. Stelo in the U.S., in U.S. and international.
You know, Stelo is an opportunity to get out in front of really diabetes, pre-diabetes, health, and wellness. As the world continues to look to be healthier where possible and technology advances, this is an opportunity to go deeper in the U.S. You know, one of the things we have a great opportunity here, and we'll talk about it here in a second, is what and then what to do with it. Jon alluded to it earlier. Stelo will tell you what your glucose is. Now it's gonna tell you what to do, that's really important when it comes to therapy and lifestyle change.
That's also gonna come into our G-Series product as well. This is really important as we move Stelo deeper into the U.S., where there's more penetration, more opportunities for retention and utilization, and certainly as we move outside the U.S., where there's a desire for this particular product. We're really excited about the opportunity here. Maybe lastly, let's talk a little bit about the catalysts, right? This is a recap of what's gone on, but the catalysts across the organization are incredible. Obviously, we expect CMS coverage. We've talked about it for some time. It's not an if, it's a when, and we've given you the when, and we're really excited to share with you the results from our Connect trial in a few weeks. There's an opportunity here. We've assumed that CMS penetration goes at half the rate of basal, even after full coverage.
Well, there's an opportunity there to potentially even do any more international access. Where we've moved direct into markets, and I'm gonna move the two in the middle together, where we've gone deeper into markets and gone direct in markets, we've accelerated our opportunities there, and we have the right product portfolio to do it. We talked a little bit earlier about the portfolio. That portfolio was designed for tenders. It was also designed for coverage. It's really for both, and that's why we've ultimately built it. The Stelo expansion opportunity is incredible. We talked about diabetes being 550 million people across the globe. It's 589 now. That number is even bigger for pre-diabetes. The opportunity is incredible there.
What is most interesting, and we haven't put any of this into our LRP, but it's a real big opportunity for us, is retention and utilization. As we integrate more and more of this AI experience, so the what to do with it, how do I improve it? What can I do with this product? How do I use it more? We're really excited to that product experience, combined with an elevated level of service provided by elevated levels of coverage, to potentially increase our retention over time. Again, that would be an upside opportunity across the board. Hope you guys are excited as we are about the revenue opportunity that's ahead of us. Certainly, that's just one part of the case. There's another part of the case, which was, well, what about the profitability over time?
We expect gross margin to grow into the high 60s by the end of our LRP. Like I said, this is a base case on how we think about it. 15-day will be our platform across the board. That is our base. That is our expectation, and we will move on to 15-day over time. We also know that that's gonna take some time to converge. We've included this conversion schedule so that you guys can have a look at it. Please know that the graph to the right, nothing happens in an exact straight line. It's for depiction so that you guys can understand that transition over time. These are all of the products that are moving over to 15-day, which provides an incredible opportunity around gross margin expansion. We're not stopping there.
G8, our expectation is it costs at least 10% less than it costs to make G7. That includes all the upgrading of silicon, all the upgrading of capability technology. We are going to improve the product. Our expectation is it costs less. We're gonna continue to improve our focus on optimizing freight and scrap. You know, some of the challenges we faced in the past, the opportunities ahead of us are incredible. We're getting through those time and time again. You can see it in our improvements. This year, we expect to do even better over time. This is a positive. You guys, just make sure you consider it, the warranty rate. While the warranty rate may go up a little bit, that's okay. It's a 15-day product. This is an excellent thing for us.
We've also included the assumptions around price, channel, product mix. Again, we wanna make sure we understand as we go outside the U.S., there may be some cash pay markets we have to go after. There may be some markets where it's lower down the acuity curve. We've also included that in this number. We are including the assumption that there's cloud costs supporting Gen AI features. Long time ago, we talked about shifting to a software company. You're starting to see us make that move, and I hope you see that through our product, our app, our experience. The hardware and the technology continues to get better, but so does our app, the experience, and what we really wanna do, which is provide solutions to people at the end of the day. This is a very exciting time across gross margin, but it doesn't just stop there.
We also expect our non-GAAP operating margin to get to 29%-30% by the end of the LRP. That is getting to world-class margins. At that point, we'd be at the top end of medtech, and we're really, really excited about it. The way it works out, it's about 150 basis points a year, mostly anchored in gross margin expansion. The expectation is we continue to make investments in our organization, investments in generating AI, generating clinical evidence, generating expansion capability, capacity, going into new countries, and we'll lay out what some of those targets look like. To do so and still get leverage across OpEx. It's an exciting time from that perspective.
Just to put it into some context, this is our operating expenses as a percentage of revenue in 2025 and where we're gonna go. You can see that we're gonna continue to invest in R&D, and I know Jake is gonna come up here after me and talk about some incredible things we're working on, longer term in R&D, which I think is going to be really exciting. We're going into all of these countries, and we are not gonna starve the organization. We can create these world-class margins while not starving the organization and really fueling the growth engine longer term. Then lastly, G&A. Look, there's G&A work that's going to be done. We're gonna have a team that invests in AI. We're going to have a team that invests in clinical evidence. We're gonna have a team that supports infrastructure builds. Why?
We have so much more to get after, but we're still going to get leverage across G&A, and doing so, we expect to hit that level. As we invest thoughtfully in these long-term levers, there's one other thing that I think is important to lay out, which we didn't lay out earlier, but I think it's also important in the back of your mind, which is through this process, we also have generated a ton of cash flow. We have one of the best cash flow models in all of med tech. We expect our adjusted EBITDA margin to grow to 36%-37%. As we get into those mid to high thirties, that's a very significant cash flow generation opportunity. What we've done is, as we've created profitability over time, we've done so in a way that ultimately generates free cash flow conversion.
You can see we've had an incredibly high free cash flow conversion rate over the years. There's even more opportunities in this because one thing we haven't discussed yet, but I think it's an incredible item, is what you see at the bottom of this slide. As we've gotten smarter and smarter over the years, we've thought about our machinery and how it supports our growth algorithm. I think many of you know we've leaned into technology more and more. You're gonna see it this afternoon. The lines you see this afternoon are the same lines you're gonna see that are gonna produce G8. That is a massive opportunity, and if you think about the CapEx we invest every year, it's an opportunity to leverage off that over time. Very significant opportunity here across cash flow.
You may ask, how are we going to do this? We talked a little bit about 15-day. We talked a little bit about obviously the revenue. How are you going to get the leverage? We started this three years ago, something called cost to execute. It's built into the fabric of our organization. The way we think about cost is not just about how do we cut cost. It's about how do we spend our time and our opportunity cost to improve the life of the patient. That's at the end of the day. If it's not improving the life of the patient, the customer, the user, why are we doing it? How are we doing it? We want to put all of our cost into these areas. Through that process, we've created leverage.
We are trying to eliminate the things that aren't necessary and invest in those things that are necessary. That framework has helped us out well. That framework was there last year as we got 300 basis points of operating expense improvement last year alone. We're going to leverage our global infrastructure. These are investments that we've already made. I think it's really important as you think about the next five years, these are the kind of things you're gonna need to leverage it, and those investments are already in place now. Think about it. Manufacturing at scale. We've launched obviously in U.S. You guys are gonna see our plant there. Malaysia, a 1 million sq ft facility, up and running today, and Ireland launching later this year. We invested in R&D centers of excellence.
We turned San Diego last year into our innovation center, where teams can come together, innovate quicker in person, more efficiently. We've also started in India, where we can leverage the talent base that's available in India to get ever more efficient around software development and hardware development. We've launched a new support model. These support models are really important. We've built it on a platform that allows for things like agentification. We built it on a platform that allows for SEB self-service, that allows for us to have what's called My Dexcom account. When you call, we know who you are. We know your history. We're able to be more efficient. We're able to elevate the customer experience, but lower the cost of ultimately supporting it.
Many of you may already know this, but over 35% of our non-manufacturing organization already sits in GBS locations. That was 0 in 2018. That fixed leverage, that know-how that's built in these global shared service centers, as we continue to get bigger and bigger and as we continue to expand in it globally, we're going to have the capability to leverage these centers to continue to get better. It doesn't stop there because technology is advancing, and it's advancing pretty quickly. We have what's also called Dexcom AI. AI is gonna be a springboard for efficiency really across the enterprise. We talk about it in our product, and it's going to be an important part of our product. There's no question. We spend a lot of time talking publicly about the impact on our product.
The reality is internally, we spend a lot of time thinking about AI. In 2025 alone, 750,000 hours saved by leveraging AI. We don't talk about it as much, but when you see 300 basis points of improvement, you know it's there. Those are the kind of things we're doing. Now I'm not gonna get into all the use cases here today. The reason is when you guys go over to our facility, our chief information officer is going to be there, and we have an AI expo. You're gonna see what we're actually up to, which I think will be very helpful and very valuable. These are actual experiences that are taking place in companies today. These aren't PowerPoints. These are actual things that are taking place that are making us more efficient time and time again.
We're gonna take you through that, but I think the big takeaway here is we know this platform, this technology is going to be important for the long term, and you can expect in us to continue to invest in it time and time and time again. I talked about revenue. We talked about being profitable. I think both are incredible pieces of the story as you think about our key stakeholders, our customers, our employees. Let's also talk about our shareholders. We have a disciplined approach to capital allocation. You know, one of the things we're very happy to have is we spent a lot of time really having a fortified balance sheet. That's important to take advantage of opportunities over time. And I hope that that continues. You guys see that.
I think that's a continued opportunity for us, so when opportunities come up, we have the ability to deploy. What are we going to deploy it on? Well, certainly we want to fund organic growth. We've been able to do that. Over the years, we've turned cash flow profitability to where we've been able to do that and have excess. We want to be able to support tuck-in M&A. You know, we talked about where we can go and be effective longer term internationally. Every time we've acquired distribution, it's always led to an acceleration opportunity. There's opportunities to continue to do that and look at distribution opportunities, or where there's augmented technology that can help us enhance our technology a little bit quicker. It's looking at targeted M&A.
We also wanna make sure we're able to return value to shareholders through share purchases when we see there's a disconnect, and boy, we see a big one today. We see an opportunity to return value. We've already authorized a $1 billion repurchase authorization. It will be fully executed in 2026. Going forward, we expect to apply at least 50% of our annual free cash flow to repurchases. We see an opportunity, we're gonna take advantage of it. We're going to be aggressive in getting out where we see a disconnect in our share price today. With all that being said, the revenue opportunity, long-term double-digit growth, we've walked through the catalyst there. Top-tier operating margin and cash flow generation.
You've seen our history there, the demonstration we're able to do that, and we're putting in the pieces in place to continue that, and we are committed to returning value through shareholders starting now. We think this is an incredible value creation opportunity. With that said, let me thank you guys for being here. Let me turn it back over to Jake to bring us home. Thank you very much.
Please welcome back Jake Leach.
All right. Hey, everybody. You've heard from the team. You've seen our plans. I hope that you now see why we're so confident in this plan and our strategy. I've talked about our three priorities that are underlying this strategy, this is all a strategy around durable double-digit growth, some really unique opportunities to expand margins, and as Jeremy mentioned, the ability to really expand free cash flow and use that to reinvest in our business through tuck-in M&A, capital expense as we continue to build out the infrastructure it's gonna take to service this huge market, as well as the opportunity to return value to shareholders. You know, I think about the massive market opportunity in front of us, the decisive steps that Dexcom is taking.
I believe it makes Dexcom one of the most compelling investment opportunities in healthcare today. Really, this plan is just getting started. As we look ahead to the future, I'm very proud of what we've built, but I'm more excited about where we're going. We built a legacy of innovation in biosensing, and all of that is going to help inform where we go next. You know, it was many years ago that we stood up and said, "We're going to eliminate finger sticks," and we said that long before we actually knew how we were going to eliminate finger sticks. It's really that confidence that allowed our reach to expand beyond our grasp that is a very important part of Dexcom, and it's something that I intend to carry forward. With that visionary spirit in mind, you guys are probably asking what else is next.
What I thought is I'd spend a little bit of time talking about things that aren't really part of our LRP. They're opportunities that I see for this technology to have significant impact in the future. The first one is, I truly envision a day where Dexcom doesn't just manage disease, but we're actually preventing disease. We're building a future towards CGM being able to identify disease risk, slow the acceleration of disease, and ultimately prevent it. If you look at the incidence rates, I mentioned these earlier, of pre-diabetes continuing to rise, the need for change in how we're attacking this problem has never been more apparent. Evidence shows that through continuous glucose insights, providing people the feedback they need, the education around nutrition, activity, all the things that we're building into our systems, it gives people information on their health trajectory.
We're moving from this idea of episodic health levels to dynamic measurements that really help understand the continuous nature of metabolic disease. The opportunity to intervene earlier and more precisely has never been more clear. We've actually already started working on the building blocks for this. With our current products, we're generating a significant amount of real-world evidence in different populations of people, those with diabetes, pre-diabetes, health and wellness. Really, as we start to look at how those folks are improving their glucose control and their disease state with the products, I do really feel that through some focused clinical work, continued interest in preventative care, there's a tremendous opportunity for us to impact and change the lives and health outcomes of millions of people. I envision a day where we all wear a CGM diagnostically as part of an annual checkup.
Speaking of outcomes, there's another significant opportunity for continuous sensing in the hospital. It helps really with the decision-making and patient outcomes that we see in the hospital space. We've been making steady progress on our hospital program. We do believe that we now have a clear path to FDA approval of the very first continuous glucose monitor for routine use in the hospital setting. The need for better tools to manage glucose in the hospital is quite obvious, and we are looking forward to launching a product in that space next year. At the same time, we also see a significant opportunity for us to have an impact in some of the chronic diseases that are adjacent to diabetes, particularly chronic kidney disease, cardiovascular disease.
People with type 2 diabetes are often managing an additional chronic disease at the same time. We believe that we can provide a value proposition to these patients that will help increase and improve their outcomes. When you look across the spectrum of chronic disease, diabetes, kidney disease, cardiovascular disease, we do believe that a multi-analyte system that combines continuous glucose measurement with continuous potassium measurement offers a solution to a very important unmet clinical need, which I'll explain here. You're probably asking, "Why glucose and potassium?" If you look at patients with diabetes and either chronic kidney disease or cardiovascular disease, they all suffer from dysglycemia, but they also all have challenges with dyskalemia. Dyskalemia is abnormal levels of potassium in the bloodstream. As, for example, as chronic kidney disease progresses, the danger of hyperkalemia becomes very apparent and can become very costly.
The incident rates of hyperkalemia, so high potassium levels, in chronic kidney disease patients continues to become a higher and higher risk as that disease progresses. The unique thing here is that there are no home tests for potassium. To measure potassium today, you have to take a blood sample, and it's either measured in a lab or in a hospital setting. We intend to change this because we feel like that creates a pretty significant unmet need. By sensing glucose and potassium together, we can build a system, when combined, provides these patients with an early warning to system for hyperkalemia, as well as helping them manage their glucose.
We do believe that this is a significant opportunity for us to have an impact both within diabetes and chronic diseases, and it's simply just one of the things that a multi-analyte platform can do for Dexcom. Simply put, I do believe we can do more, and these aspirations, they're not just a vision, they're well within our reach and our capabilities.
These advancements aren't going to happen overnight, but we do believe that if we execute with our disciplines, like we've seen in our five-year plan, that we can make this happen. As we look to the end of our LRP that we presented today, the end of 2030, I believe we can emerge with an even larger market opportunity than that one that we actually see in front of us today. With that, I'd like to thank you all for attending, and I'm gonna invite Sean Christensen and the rest of the team up for Q&A. Thanks, everybody.
All right. Well, thank you again, everyone, for coming. We will take about a half hour now for Q&A. We have Matt and Joe available out here. We have the analysts on this side. As usual, you'd think by our fourth investor day, I would've learned that the stage lights always blind me. Matt, Joe, if I might need a little help, but I think I can see most of you. Yeah, why don't we go ahead and kick us off? Who's got the mic? Oh, I got one right here. Okay. David. Oh, yeah, David.
Sure. Thank you. David Roman from Goldman Sachs. May I just sort of start with one strategy question, then maybe tie it to the financials here? Jake, you concluded there with really talking about very future vision for the company. Maybe you could talk a little bit about kind of how you're kind of pushing the bounds here of interstitial tissue monitoring and how that applies across multi parameters, including the hospital setting. Maybe just, I'll ask my related question here to Jereme. As you kind of go through the LRP and talk about the 10% growth, is there any further perspective you can help us to think about your assumptions around volume versus price and mix over that time horizon?
Yeah, thanks for that question. You know, when we think about continuous sensing and the value it can provide, we've obviously found a extremely powerful use case in glucose, originally, you know, starting in diabetes, but now starting to expand into pre-diabetes, health and wellness, longevity, options within the hospital. I do feel that there's a significant opportunity to continue to expand that impact by bringing other analytes into our platform that sense. When I think about what Dexcom is uniquely good at. We are good at creating technologies that sense subcutaneously, continuously for users. What the important thing to do is to figure out what are those analytes that are critically important to be able to really increase that impact.
When we think about the other analytes, we think about potassium being, as I mentioned, a pretty significant opportunity for something that's an unmet need today. There's quite a few others. Not all of them are enzymatic-based, which is the type of sensors that our glucose sensors are. We're making investments in other sensing technologies that can be applied to the subcutaneous sensor probe so that we can sense multi-analytes all at the same time. I do feel that over time, we're gonna continue to lean into our flywheel, which is this idea of building this incredible wearable that creates this technology and senses anything that's helpful to be sensed interstitially. If there's already a way to do it, we're not gonna lean into that. We're gonna continue to use our software capabilities to amplify the value of that data.
Yeah, to your question in terms of, you know, the price volume mix, the way to think about it is we've typically thought about 2% to 3% price, kind of similar to you see today. Not every year created the same, right? We have assumptions around when coverage comes, when it kicks in. We have obviously assumptions around competitive bidding. We do assume that mix comes down over the life. We're not going to talk about volume because it's 10%+ is our assumption.
I think as you at least pulled out the models and you can see what our coverage expansion expectations are, 2% to 3% price, not every year the same, with mix coming down as we've, for the most part, transitioned a significant amount of our product to the pharmacy in the U.S. Coverage in CMS fee for service is going to be heavily in the DME, given it's Part B coverage. You start to see that mix clearly coming down going forward.
Go to our next question. Why don't we go to Jeff?
Thank you. Good afternoon, guys. Thanks for the presentation. Jeff Johnson from Baird. Jake, can I maybe, two questions, but let me just try to pin you down on the other analytes there. Just could you help us on, the timeline? I know you talked about late 2027, early 2028 for G8, and then you, I think you said just shortly thereafter, the other analytes, number 1.
Number 2, I don't wanna put words in your mouth, but I think in the past you've made comments somewhere along the lines of, you know, if we need to get to ketones, we can get to ketones fairly quickly. No mention of ketones today. Seems like your biggest competitor is still making progress towards ketones. Maybe sounded a little better this quarter than last, I thought, on getting to ketones sometime this year or next. Just where is your pathway on ketones specifically?
Sure. Important question, I'll be very clear. We do think there is a component of diabetes care where ketones are important when we think about the spectrum of care. When we look at the current unmet needs out there, what we talked about in the priority on G8 is the accuracy and reliability of these sensors needs to be better. We are in the process of integrating ketone sensing into G8. We did feel that the most important thing is to accelerate the technology around the accuracy and reliability of the product. That's why we're introducing this new technology that's gonna be a step change in performance for all users. Ketones, it will be part of the G8 platform. They're just gonna come afterwards.
Not gonna give any exact timelines because, frankly, we're in the midst of doing clinical data right now, figuring out how to make this an impactful metric for users. I think there's still quite a bit of clinical work that needs to be done to determine how to appropriately measure and appropriately communicate readings to users and what to do with that information. It's not nearly as clear as glucose. We're working on those clinical studies right now. Once we have that determined of exactly how to go to market with it, we'll be there.
Fair enough. I don't know if this question's for you or for Jon, but outside the U.S., you're gonna have a lot going on, it sounds like, internationally the next two or three years. You know, four products, three new large markets you're talking about, T2 reimbursement, expansion. One, what could go wrong there with all that, all those balls in the air? Two, I think help me understand just how you're gonna position maybe Stelo versus Stelo versus Dexcom ONE+. Is there any markets where you're gonna have all four in the same market? I guess I still am a little fuzzy, Stelo versus Dexcom ONE+. Just help me out there. Thank you.
Yeah. I'll start with the high level and then pass it to Jon. It's critically important that we invest in our international infrastructure and our ability in the international markets, because in the long run, that's actually where the bigger marketplace is. I'm incredibly excited about pushing harder and harder into those markets. We've built a lot of leadership with the United States. It's time to take that and all the learnings and apply it internationally. It's a significant, as you see, it's one of my three focuses, is to expand this international market share because the vast majority of people with diabetes do actually live outside the United States.
The role of Stelo is really gonna be focused on health and wellness outside of the U.S., and the other three products will be focused on diabetes and those different groups within diabetes care. That's the shortest way to sort of answer that. There are some people that migrate, as I mentioned earlier, from Type 2 into Stelo, and we're informing them that they have coverage, if they do have coverage, so that they can migrate over the G series. That's the way we'll, in essence, be positioning those different products in the portfolio.
Maybe to your last question on the focus, and that's one of the reasons why when you see the investment in sales and marketing and the targeted investments, one of the things we've done, and this has been a key priority of Jake's, is to carve out dollars to make sure we're supporting that international expansion. So if you see leverage in the organization and from all the work that we've done, really the opportunity then is to invest back in growth verticals. So I think what could have gone wrong is if you don't support it, invest in it the right way. I think that's what we've particularly done in terms of how we've set up the organization.
Great. Wanna go to next question. How about Larry?
Thanks a lot. Larry Biegelsen, Wells Fargo. One for Jereme, one for Jake. I'll just ask them both upfront. Jeremy, any color on, you know, the sales and margin assumptions in terms of cadence? For Jake, on the type 2 non-insulin opportunity, why do you think it's taking longer for the CMS proposal and, you know, it's mid-2027 for the finalization, a conservative assumption? Related to that, on the study that you're gonna show at ADA, how important do you think it is to see a benefit in the patients on GLP-1s and oral meds? Thank you.
I can start with the cadence and we haven't necessarily gone year by year. We'll do that as we kinda get into guidance by year. You know, clearly, I think an easy way to think about gross margin, at least in the near term, is we talked about exiting this year in the U.S., kind of approaching 50% of our population moved over. I think what's really helpful is as you then think about next year and your starting point is much, much higher as you roll forward that base, that's an opportunity on gross margin.
When you combine that with some of the 15-day G7 work that we'll be doing, you can probably tell that there's some real interesting shorter-term gross margin opportunities given some of that 15-day base moving over. Maybe that gives you at least some context to it. We don't have a cadence to provide. We'll do that as part of our annual guidance.
Around NIT coverage from CMS, we've been clear that we never anticipated that to happen in 2026. We've mentioned we'd be ready, we did always anticipate it would happen in 2027. Again, it's hard to predict decisions from the federal government. What I will say is we are confident that it's just a matter of time for when this decision happens. We figured it would be helpful to provide, for the first time really, our estimate of when we think it's gonna happen. We're saying mid-2027 is when the coverage will actually kick in and be effective for users. If it comes, you know, earlier in the year, we'll be ready, and it's gonna be upside.
I'm sorry, the study, yeah. I think it's important to show. It's actually why we enrolled the study we did. It's important to show the improvement in A1C across the entire spectrum of people with diabetes, including those that aren't even on a glucose-lowering medication. You saw 8% of the patients in that study aren't on a lowering medication. It's really about showing the benefit of CGM in this entire population, which we have confidence. We've seen the data from our registry in what's happening there and we're obviously confident in the outcome of the CONNECT study as well.
How about, how about Joanne?
Thank you. Joanne Wuensch from Citigroup. I think it's sort of the same question in terms of operating margin expansion and gross margin expansion, is how to think about revenue over the next couple of years. You were pretty specific in saying it's not a CAGR for 10% plus, but at least 10% each year. You've got a lot of products and a lot of things going on. Which years might be stronger than others? I guess my next question is, maybe I missed it, but what is it about Stelo that you think works in the EU/U.S. environment that maybe makes sense to bring it to the U.S.? Thank you.
Yeah. I'll start with the at least the conversation about the guide, and, Jon, you wanna talk about Stelo maybe? You know, I think while we're not giving guidance by year, we've tried to give you what was a lot of the catalyst by year, so you guys could take a look at it and say, "Hey, when is the coverage expansion taking place? When are your product launches going to take place?" We've been very clear 'cause we wanted to basically underwrite a base case for everybody, and that 10% plus, I think, is a nice way to do that. We wanna be you know, conservative in terms of how we're thinking about providing a number and give you guys at least the building blocks to start to think about it.
That's the starting point at least of the 10% plus. You know, from there, as we get into our annual guidance, we'll start to give more clarity as to what that looks like. The hope is, in looking at the LRP by providing all of those levers, it allows you at least to give some thought as to where those years you think might be interesting and interesting potentials for upside. For now, 10% plus per year is what we're given by year, and we'll get more clarity as we move on.
Question about Stelo, again, focused on Type 2 NIT patients and basal patients as well. The question about the U.S., vis-à-vis Stelo is yet to be determined whether that is a different product and/or a software sort of app that's geared toward people who have those needs. That's the way I'd answer that question. We've not yet made that decision and/or are prepared to sort of speak to it more than that.
Let's see. How about we go to Chris?
Thanks. Chris Pasquale, Nephron. Two questions. One, you know, when G8 comes to market, G7 won't be that long in the tooth, particularly the 15-day version. Are you anticipating any difference in the adoption curve here? Are you gonna try and push this for a rapid conversion across the customer base, or does it become maybe a premium product initially for patients that really value that extra accuracy? Then Jereme, could you just go into a little detail on competitive bidding, the latest thoughts there on how you expect that to change the market, the impact that you are baking in? Thanks.
Yeah. Thanks for the question. You know, no specific plans on exact how we convert, but I'll tell you how we're thinking about it. G8's actually a cost reduction for us as well. It would be in a strong benefit for us to provide the technology to all of our users because it is a wearable cost improvement. I do see that technology's gonna be applicable across our entire customer base, we're gonna move it as fast as we can.
As Jereme mentioned, one of the benefits of this technology is we've taken a lot of learnings from all of the different launches we've done and all the scale that we've built. G8 can be built. We can retrofit the G7 lines to manufacture these G8 systems. That's really gonna help us in our ability to have enough capacity to serve all the customers as we go. I do wanna see a rapid uptake and a rapid changeover because of all the benefits this product has for the users.
Yeah. To your question on competitive bidding, our assumption there is 2028 is, you know, kind of letter of the laws is when that would play in. You know, we've taken a look at what, obviously, the OIG report would've indicated, which didn't really appear that there was a lot of opportunity there. We know that really CMS is heavily focused on fraud and potential risk around that. You know, a lot of the concern, we think, is around fraudulent billing of CGMs that are actually never shipped and/or sold, and that's where a lot of the concern is. In terms of our assumptions around it, look, we've put in assumptions for some nominal price impacts associated with it. The reality is, we think it's appropriately priced. We think it's appropriately transferred.
We don't wanna get ahead of ourselves there, but obviously, we built a range of those assumptions into there to make sure that we were covered in the event that it did take place. I think the most important part's starting in 2028. That's what the LRP assumes, and if things change, we'll certainly come back to you with an update as how those assumptions play out.
Why don't we go to Matt O'Brien?
Thanks so much. Matt O'Brien, Piper Sandler. Thanks so much for putting this on. Was curious about, I think, Jake, you've mentioned, you know, OUS eventually being the same size as US, so the interplay just between US and OUS growth over the LRP, how does that look? I'm assuming OUS is much faster. Then to Jereme Sylvain, you know, the gross margin expansion's around 140 bips per year. How does that interplay or how does it influence gross margin over the LRP? Thanks.
Yeah, some color on it. You know, there's a lot in our plans that we control in terms of the products we build, where they're available, what markets. One of the things we don't specifically control the exact timing on is access expansions. We work very hard to advocate for it, and because of the belief in the outcomes that we see from this technology, we do know that over time, access expansion, both here in the U.S., but particularly internationally, where it's trailing a little bit from the U.S., that access is gonna continue to open. One of the things we do see is that when we do get international access wins, we see pretty significant growth in those markets.
Think we saw some of that in our Q1 results, that most of that growth came from new markets where we had just recently opened up access. It's hard to exactly put out the cadence of how this happens, but we are confident over time that the access will grow, and the international market's gonna continue to grow.
I think, you know, the answer is I wouldn't, I wouldn't underplay either of them, right? There's a massive opportunity in the U.S., but there's also a massive opportunity outside the U.S. they're both books of businesses we think that have a real opportunity for growth. To your other question. Oh, sorry, what was the other question?
Gross margin.
Gross margin. Yeah. I think, you know, the gross margin, certainly as you move outside the U.S. and we grow certainly volumes in that perspective, with those moving to a 15-day as well, you might find that the higher reimbursed markets ultimately yield higher margins. But as a portfolio, the entire portfolio moves. Even as international grows, you're getting the benefit of shifting your G7 10-day OUS customers onto the 15-day platform as well, which is a significant piece of it. You're getting your Dexcom ONE+ customers outside the U.S. also moving onto a 15-day platform. The best way to think about the cadence is to look at our product launch, and we kind of gave you product launches by year. That'll help you kind of feel cadence between OUS, U.S. Really across the board, all of those regions are gonna move to a 15-day.
Joe, why don't we go to your side? How about Mike back there?
Hey, thank you. Great event, great info. A hardware question. Jake, I heard you mention 15 days rolling out. Great. You made an update to adhesive, that's being received well. I thought the adhesion code had been cracked. What are you working on there? Is the overpatch forever in Dexcom's future? Is G8 overpatchless? Thanks.
Awesome. No, I love adhesive technologies. You know, it's a crazy mix where you're trying to have a sensor adhere to a patient's body, think about little kids running around, you know, all the different ages, all different stages of diabetes without obviously causing irritation. The code's definitely not cracked. We still have patches that don't last the entire time. You know, it's not a high number, but we want all sensors to stay adhered as long as they possibly can. A big part of that is adding breathability to the adhesive. That is something that G7 launched with one version of a patch. We updated that patch.
This is now the third update of patch technology to that product because we're always trying to improve the experience for users and obviously the longevity of these sensors. This new patch has a pretty significant impact on patch survival for the G7 15 Day product, and we're gonna roll it out across the entire product portfolio over time. We're never done. There's still gonna be opportunities to enhance it.
The overpatch. Yeah, it's something that some users use. Not everybody uses it. It's something that we feel is a nice option for people, but it shouldn't be mandatory, so we're working towards it not being a mandatory component of our system. We do think some patients do really like it. They come up with their own versions. You can see Amazon's full of these different things. They work really hard to make sure these sensors stay on because they're so important to them.
Matt, why don't we go to your side, to Jason in the back?
Thanks for hosting the event. Maybe just a couple questions. First, basal has been kind of the laggard here in terms of adoption. Jake, you spoke early on about SmartBasal. Is this the tool that opens up that opportunity? Maybe just Jereme on that. I think you said mid 40% basal penetration exiting the LRP. What does the U.S. penetration look like in that?
Yeah. It's a great question. We absolutely are designing products that are specifically geared towards capturing more share of a population and meeting the unmet needs out there. As you can see from that graph I showed, basal insulin therapy without this type of technology is not very satisfying for users. Their glucose is. You know, they go onto an injection, sometimes for the very first time. They're injecting themself once a day with this low dose of insulin that's not resulting in better glucose control. It's actually resulting in worse glucose control in many cases. That's pretty dissatisfying. You may not even keep taking the insulin. You gotta keep working with the physician. The physician's frustrated.
We really think that this technology can accelerate that outcome to a point where the patient is interested in continuing that therapy, but also very interested in the value that the CGM's bringing them. I do think it's a tool for capturing more share of new starts, getting more new starts, and then ultimately retaining them. It is an important part of our strategy to expand into basal. Today, in the U.S., the majority, or the largest portion of our new customer are still insulin users and Type 2 MDI and basal. That is the largest portion of customers, and that NIT number is continuing to increase. There is some complexity in that NIT coverage right now, where only 25% is covered. As we get more coverage there, I think we're gonna see some similar growth there.
Yeah. To your question on basal, the number we said, that was a U.S.-focused number. It's really into that mid-40s, you know, from where this year it's kind of crossing into that, we said 20-25 as we exited last year. It's getting into that figure. Outside the U.S., very, very small relative to that. That's coverage unlocks today is really, it's only in Japan and France. As you get to 2030, again, we expect unlocks of coverage to take place pretty significantly over that period, but the number would be significantly less of that just given the approval timeline. It's a real opportunity. I think we're gonna exit with a lot of opportunity for basal to penetrate those markets outside the U.S.
Okay. Maybe just a quick question. The role and focus of the new board members. What do you expect them to add that you didn't have?
Yeah, it's a great question. It's really significant experience, med tech, quality. I mean, what we're looking for is, you know, no one's ever scaled a business like this before in med tech in terms of the number of patients we're serving and the speed at which this category is growing. It's really just to help provide additional advice and guidance. I'm a new to the CEO role, it'll be helpful for, to add that skill set to the board. We don't have independent med tech directors on our board right now, it'll be helpful to have that experience as well as some high volume. One of the things is we've been pretty focused on refreshment of our board.
We've actually, with the addition of these 2 new board members, in the last 3 years, we've brought in 6 new directors. We already have 4 that we've added in the last 2 and a half years, across AI, healthcare. Rick Osterloh from Google has really significant experience in scaled operations of consumer tech, as well as AI integration, with his experience at Google. I really think that we're building a board for the future for where we're headed, and these the med tech and operations directors are gonna help us with that.
Joe, how about we go to Rich?
Hi. Richard Newitter of Truist Securities. Thanks for hosting this day. Maybe just the first, going back to the way to just think of the components, US, OUS. I know it's probably an oversimplification 'cause you have different launches and initiatives going on each year in each region, set of regions. Should we be thinking of the OUS growth rate over the life of the long-range plan outpacing the US? If that's the case, how do we think about, you know, do we need Type 2 NIT as you move up the penetration curve in 2027 and beyond to kind of sustain a double-digit US growth rate, or should we keep that kinda in that high single digit, low double digit? Just help us toggle those components, specifically US, OUS.
I think, you know, we haven't necessarily gone down OUS, U.S. in the LRP. The expectation is certainly the unlocks across both of them, and you can see obviously the expectation of the CMS coverage here next year is the biggest unlock out there. That's the reason why we're not talking down either because ultimately $12 million, $15 million, once the Medicaid lives come along, would be the biggest expansion in the U.S. we've ever seen, and it's a massive opportunity unlock there. At the same time, you've seen all the OUS countries we think that are coming in. To talk down either or to say that both don't have opportunities, significant opportunities over the LRP, we haven't necessarily split those out.
What I would say is our long-term algorithm, we've always said our long-term algorithm coverage is what we've always aimed to do. I think that's why we've worked so hard to create the clinical evidence that ultimately drives coverage. What I would say is longer term, our expectation is coverage comes, and that's part of our growth algorithm, is showing that CGM improves lives, showing it takes costs out of the system. I think the best way to think about it is any sort of LRP we give, we do assume coverage is coming, and we're working hard to get that coverage rather than specific particular coverage unlocks. I would just expect us to continue to work, to do the work around clinical coverage because that does unlock lives.
Just on the NIT penetration forecast exiting the plan, can you just remind me of what the type 2 percentage was you said that's embedded in the LRP? What are you assuming for the wear, you know, for the adherence or compliance?
The assumption there is we exit at that 10%-15% penetration across that population, U.S. OUS obviously very much smaller given the unlock comes later into the LRP. The wear utilization is similar to what we have posted up on our website. It's the 75%-80% utilization. Again, as you go deeper and deeper into that population, you could potentially see that change. What we've found is when coverage is there, and it kind of comes back to coverage, when coverage is there, you see people wear it, and you see people wear it at a high clip. That's what the assumptions are.
Matt, how about we go to Josh?
Thanks. Josh Jennings from TD Cowen. Appreciate you guys hosting, getting us out to Phoenix. Just, Jereme Sylvain, you mentioned about coverage, and just wondering, with the work being done in the pre-diabetes population, is the expectation that ultimately you can deliver the clinical efficacy and cost-effectiveness in that cohort, in that large cohort, and where should we be thinking that that's where Stelo will live and breathe within this LRP?
You want me to start or you want to start?
You start. Yeah.
Okay. Yeah, I think, you know, look, certainly we expect to be able to demonstrate outcomes in pre-diabetes. We've seen it. We see people wearing Stelo all the time that have pre-diabetes, the outcome is very different than what you would typically measure today under Diabetes, right? Diabetes, typically as you measure it, you're thinking about things like A1C, right? Well, in pre-diabetes, your A1C hasn't risen to that level quite yet to where you'd expect to see it. Things like time and range, healthcare reductions and preventative care, you can measure those types of things over time. Jake alluded to a day when everybody is wearing a sensor as just part of your annual physical or as part of what you would do to prevent Diabetes.
We do expect over time for that to be a use case that ultimately plays out because we know we can demonstrate the benefits of doing so. Whether that's coverage, whether it's employers covering it as part of health and wellness plans, whether it's through programmatic approaches, those are the things I think we're still working through and how we demonstrate that clinical evidence. Make no mistake, we're building a product to help folks prevent ever getting to diabetes, and that obviously focuses on that pre-diabetes space and then of course in the health and wellness space.
I'll add is that we do see it as a very powerful screening tool. We've already started working on algorithms with some of the real world data we have to come up with better ways to diagnose the actual condition of diabetes instead of the typical A1C test or oral glucose tolerance test. We've also been doing some work in gestational diabetes in pregnancy that, you know, gestational diabetes impacts 10% of pregnancies.
Right now, it's usually not diagnosed till later in the pregnancy, and we do feel that using CGM as a screening tool there can find the diabetes earlier and help the mother and baby have much better outcomes. There's an opportunity for this tool to be used pretty widely in terms of just screening, and then there's the whole aspect of treating once you understand you have a potential issue, helping with the education and the learning around how to improve the health condition.
Thanks. You put a lot of analyte menu expansion action on the table here today. Sorry to ask this question, I think just earlier in the year, I think you made some public comments, and I think in some of our discussions with the team, you alluded to a potential to go beyond kind of this enzymatic testing process in interstitial fluid and looking at other mechanisms of testing to expand the menu even further. I think on my mind, I was thinking BNP, creatinine, some other biomarkers. Maybe you can just talk about where you are in that development process. Maybe not in this LRP, love to hear any updates there. Thanks.
Yeah. Fantastic. We definitely see, as I mentioned, this opportunity for us to lean into this capability we have around developing technology that subcutaneously senses multi analytes and our ability to scale that technology. We are making investments and working R&D on other mechanisms for sensing because some of these analytes, like you mentioned, creatinine, you can't sense it with an enzyme, so you need something else. Enzymatic technology is what we founded our glucose sensor on and some of the other ketone sensors, lactate, those are all using enzymes. Potassium does not. We're moving into this realm of not just enzymatic sensing.
Our venture group has been making investments in companies that have some alternate sensing technologies, and we're also working on some of them internally that are non-enzyme-based. More to come, early days, but when we think about the long run of this company and what we're capable of, it goes far beyond diabetes.
We're close to time, why don't we sneak in one last question if we can keep it to a single part question. Why don't we close with Shagun?
Thank you so much. Shagun Singh from RBC. You know, I think the big focus here is capitalizing on the large TAM, and from that standpoint, you also indicated that, you know, access is growing faster than penetration. Just from a commercial standpoint, you know, where is the biggest focus in order to unlock that or drive penetration higher, so that you could have confidence in a base case that's greater than 10%?
I'll start. Jon, if you wanna follow. The number 1 priority right now is ensuring that we have the best solution for users because there's a lot of people who see their physician that have coverage for CGM and aren't walking out of there with a prescription. That's really around building the right experience for those users and their physician, making sure the awareness is there. Right now, we're working through this coverage on NIT, where only 25% of people are covered. It adds some complexity. You know, whenever coverage expansion happens, we see a bolus, just like we saw in early 2025 when we started to see the PBMs covering CGM for all people.
We get this bolus, there's a lot of work to educate around the access that exists, and that access paradigm continues to change and continues to open up. You know, I think as we build better solutions that meet more of these customer needs, I think G8 is a big part of that. It's around capturing more share and understanding basically Jon.
I think that was great. I think the matching experience and needs is number 1, the second is taking the learnings from Stelo and this new app that we're going to be launching in the short term and leveraging it like crazy across the portfolio.
This will, I think this concludes our portion of the event here as we prepare for the manufacturing tour. Maybe defer to management if you want any closing words.
I just wanna really thank all of you guys for traveling out here. We're so excited to host you and show you our plans for the future. As I mentioned when I came up on stage, that I'm incredibly proud of what we've built over the last 25 years, but I'm even more excited about the future and the impact that Dexcom can have around the world. Thank you, guys.
Thank you.
Thank you, everyone.
Thank you.
Thank you.
All right, guys.