All right, great. Thanks, guys. We are going to get started. Good afternoon. Jon Block with Stifel, and I am happy to welcome back the team from Senseonics. We have Tim Goodnow, CEO, Rick Sullivan, CFO, and Brian Hansen, CCO. These guys put up a really good third quarter, actually just reported last night. Revenue ahead, gross margin ahead, raised guidance for the third time this year. A lot of good things to talk about as they have successfully brought back in the commercial operations in-house, and they are clearly executing. Tim, that might just be a good place to start. Talk to us about third quarter, but also more broadly on the strategy that you sought out several quarters ago to put it in place and how it is unfolding.
Sure. First, thanks for having us. We appreciate the time to be here. Third quarter was, we are obviously really excited about the performance and the demonstration, but it frankly was a culmination of just that. Really, 2025 was a year of transition for us. We had recognized in working with our partner, Ascensia Diabetes Care, that it was time for us to transition all of the commercial responsibilities back inside the organization. 2026 was the implementation of that, and what that really gave us was the ability to own our own destiny, if you will. We were able to make the call. We recognized some time ago that awareness was really the key issue for Eversense, our key product, and that we needed to make the investment in it.
We did that starting in late 2025, and that really led to a good, strong first, second, and now third quarter. As we have given guidance, we expect there to be good performance in the fourth quarter as well. Revenue was really important in the quarter. That drove a nice lift, a nice step up in the gross margins. We announced an important new partnership with a pump integration. We have had a great relationship and great results with Sequel and their twiist product, and now we are going to expand that with the new partners with Beta Bionics. Really good work by the team, but obviously a lot of work went in it to get us here.
Okay. Importantly, I am guessing you feel it is sustainable and durable going forward. Maybe if you could talk about the biggest positive surprises from bringing the commercial organization in-house. I do not know if this is a little bit for you and a little bit for Brian, but talk to us about biggest positive surprises, and then also maybe just touch on maybe some of the challenges that unfolded as well.
Well, I am sure we will get to it. I will let Brian speak to the positives, because there have been many of them. We continue to do work, of course, on our European integration. That is a little bit behind the way that the approval process went for the U.S. We have now been in market for, frankly, two years. The CE marking now is taking longer to get approval. It is more than a year behind, so that delayed the implementation of the 365 in Europe.
We are working on it. The team has done a great job, and we have now got all the transitions in place, but that was probably the one area where we want to continue to make progress, and we certainly will. They are very excited to have the 365 product. It really did turn the corner for us in the U.S., so we are going to see that in Europe as well.
On the positive side, Brian, there have been a lot of them.
Reducing complexity, right? Reducing, Jon, just the interface between the two companies. Having a board seat at Senseonics and having my President role at Ascensia, I kind of wore that hat, but I also had folks that were forecasting between the companies and working on contracts between the companies and just overall liaison management, and we do not have to do that anymore. So we are not fighting with Rick about forecasts and product and what have you. Bringing that all together, it has just reduced the complexity and increased our efficiency, and it makes life a lot easier, to be honest with you.
Complexity down, efficiency up. Maybe talk to us also about the sales force and how you are able to retain, I am guessing, successfully both in the U.S. and abroad.
Yeah, in our remarks yesterday, we've had great retention of our team, and I'm really proud of that. Coming over, they got some equity. They got involved to spend more time with Tim and the management team, which is very beneficial to them. Again, it's a cleaner process, but our team in the U.S. was already a unit to itself, so we essentially changed business cards and computers on January 1. We had to decouple a lot more of the things in Europe, so it became a little bit more complicated and took a little bit longer. Again, not necessarily a negative, just a time function. So they'll be much more productive and very similar to what we've had now for the full year in the U.S., OUS as we enter 2027.
Okay. Guys, again, if you have any questions, please just throw up your hand. I'm going to plow forward. I'll stick with the U.S. and maybe the growth opportunities. I don't know if you guys have given this metric. We did some survey work several weeks ago. How many physicians approximately are prescribing 365 here in the U.S.?
Yeah. It's in the thousands. I don't know if I have a number off the top of my head. In an individual physician, it's probably north of 5,000. Now, sometimes an account can have multiple physicians at it, so we don't necessarily count it that way. But it's grown significantly over the last year, and really over the last two years with 365, so.
Obviously you're augmenting that with EON Network as well.
Not from the prescribing side. Remember, the EON Network is-
Sorry, I mean the inserting side.
is really on the inserting side, and it is important, especially with Medicare, that those be two distinct entities. Typically what Brian's team is executing on, if somebody comes type two from primary care, they are not typically going to do the insertion. That is where EON Care comes in and really we will partner, we will facilitate that connection. The patient that is being seen by that physician will get the script, and then we will do a warm handoff to the EON that is doing the insertion.
Okay. I will go back to EON. I guess where I was trying to go with this is, when we think about the future growth for Senseonics, how do we break it down between utilization amongst those 5,000 plus current docs that are prescribing versus bringing new docs into the fold? Call it same store sales growth versus a new store. Obviously, the growth rates have been very solid, but how do we think about the contribution from each of those parties going forward?
Well, it's both. I've got 40 some folks in the field that are calling on the physicians, and their job is to really penetrate, and they're doing a great job of that, especially in our large accounts. They're getting larger, which quite frankly surprises me, but they continue to just get larger and larger for a variety of reasons. One is the economics are good on the insertion side for those accounts that are doing it themselves. We're also driving additional reach by our direct-to-consumer advertising, and that brings in the primary care physician more in the type 2 space that we're not able to call on with 45 reps. That's where you see the kind of the proliferation of the prescribers and the need for EON Care for those that are prescriber only.
We made that decision kind of last year, and that recipe has really worked this year to unlock access for us.
Very helpful. Maybe I'll pull on that direct-to-consumer as a good segue. I think part of the problem with Ascensia back in the day was you guys were spending on DTC, but you're sharing the economics with Ascensia, right? It's sort of simplified when you take control of everything. Rick, any metrics on the amount that you're going to spend on DTC in 2026, and then how we think about the DTC spend going forward?
Yeah, we recognize that PHC Ascensia wasn't investing in the DTC channel as much as we'd like to drive that awareness. So at the end of 2025, the last two quarters of the year, we invested, Senseonics, about $13 million, $14 million in DTC. That certainly drove a great number of leads, increased awareness, but it wasn't as efficient as we knew that it could be. So for 2026, we took that same DTC spend, that $13 million, $14 million, and we spread it more evenly across the quarters in 2026, with about 40% in the first half, 60% in the back half, really aligned with our revenue expectations for the year. We've seen that be much more efficient from a cost per workable lead and really all the other metrics that we follow from a DTC conversion perspective.
Thoughts on 2027?
2027, we will certainly continue the investment in DTC. It works, and it works well. We will give more better guidance, I think, early in 2027.
Okay. Brian or Rick, maybe this one is for you. In the international markets, DTC is sometimes a little bit more problematic, right? Some countries have rules and regulations on how much you can lean in from a direct-to-consumer perspective. The EON Network has been very successful, but here in the U.S., I think, Tim, you would agree, one of the biggest issues for 365 is awareness, right? So, how do you get after some of those same challenges or bottlenecks in the international markets that you have successfully addressed here in the U.S.?
Yeah, we are looking at all of it, right? We are looking at the insertion network and where we can subsidize that in Europe, and we are looking at direct-to-consumer advertising in the markets that allow us to do that in Europe. When you cannot, then you are relying on your reps that are calling on the diabetes education centers, and certainly, the field activities are fruitful, but you do not get to the patients at the same level.
You also have to remember, in Europe, we do not have as much access to type 2 right now. That is growing more. So the type 1s are typically seen in the hospital diabetes education centers, and so they are a little bit easier to get to in that regard. But it is a mix, and each country is different, and we treat each country differently based on what they allow us to do.
Okay, so we can maybe expect some DTC and EON Network in some select U.S. markets going forward?
We've done a little bit, but just scratched the surface. One of the nice parts about having 365 on the market for two years here in the States is my U.S. team is taking a lot of the best practices and helping my four country leaders in Europe adapt their best practices going forward here and what we've learned from it. So, I think it's going to be a mix of both of those.
Okay. Just maybe longer term on the P&L, international was initially going to be 20% of revenue this year. Very good growth U.S., and now you're predicting more 15%.
That's right.
When we think about 2027, 2028, international, smaller numbers, more in an infancy stage, how do we think about international's contribution to the P&L as a percent of sales going forward?
Yeah, we will certainly give that breakout early next year. As I expect the continued growth in the U.S. and Europe really just starting its 365-day journey the past several months, we will expect that growth to be probably a little bit smaller than the U.S. growth initially. So that percentage of the total revenue should probably be about where it is today or a little bit lighter.
Okay. Just as it gets its sort of sea legs underneath it, then maybe the traction increases from there?
Exactly.
Rick, let me stick with you. The current burn rate, if you want to talk about where you have been from a burn perspective, then I think $127 million in cash at the end of the quarter. What do you also have access to under the current facility?
Yeah, so for 2026, we expect to burn about $120 million, so $10 million a month for simplicity, and that was always the expectation. $127 million in cash plus $85 million of additional capacity under the Hercules facility, so a little bit north of $200 million. We will have access to the next tranche of that facility here this quarter and then be able to draw on the remainder over the course of 2027.
Okay, so $200 million plus pro forma cash.
And you feel that is fully funded to get to where you need to go?
Yeah, we feel really good about the balance sheet and that debt facility with our partner. In 2027, we expect revenue to continue to grow, as with the strong margin profile we have, north of 60% next year, that will continue to contribute to those operating expenses, and we will see some operating leverage in 2027. So that cash burn will go down, and that cash on the balance sheet plus the Hercules facility will take us to the Freedom product, which we are extremely excited about, because the margin profile of the Freedom product we expect to be north of 70%, and that really will be the catalyst for our cash flow breakeven.
Okay, I am going to break that apart a little bit, because I think there is some, like a little bit of a hidden gem somewhere in there, then Tim, I will get you to comment on Gemini and Freedom. Last night in the Q&A, I was able to get out of you, I thought like, "Hey, you are comfortable with $100 million plus in 2027 sales.
I still am.
Okay, and you still are 24 hours later. Good to hear. Increasing GMs year-over-year.
Yep.
Right? OPEX might move slightly higher. I mean, you are going to invest in the business, but some of the TSAs are dropping off, so maybe OPEX slightly higher 2027 versus 2026.
Yeah, we know that with 2026, we brought over the foundation of our commercial organization, the market access team focused on reimbursement, the sales operation, the whole marketing team, all that's now in place. So any additional investment in SG&A for 2027 will really be to drive revenue. That's DTC spend, inside sales team to call back the leads from the DTC, and maybe adding a couple of territories where we feel we might need some more capacity. Because of that, we'll start seeing the operating leverage that I've been talking about in 2027.
Okay. When I was alluding to like maybe a gem somewhere in there, Tim, last night you talked about Freedom being targeted for 2028, and we'll get into that. Rick, you alluded to reaching cash flow breakeven shortly after Freedom.
Just trying to like, I don't even know if it's reverse engineering, but if GMs go to 70% from like 62% now, because Freedom's a higher margin product.
You need a $60 million quarter at a 70% gross margin is $42 million of gross profit dollars, because your OPEX is running around $40 million a quarter. Do you expect exiting 2028, whether it's 2H 2028 or even 4Q 2028, to be knocking on the door of about a $60 million quarter?
When you think about what we are going to do in Q4 of 2026 based on our guide, it is $23 million. So that is two years from now. I do not think $60 million is a scary number at all.
Okay. It is well ahead of where consensus currently is, but you just see that trajectory being ongoing traction in U.S., very early penetration, and the international runway that you have in front of you.
Yeah, I mean, it is a $15 billion market. For us to continue to take the share that we have been taking, the product is demonstrating it is going to do it. Brian and his team are executing on it. So, we are comfortable.
Okay.
Let us be clear, Jon, I have not negotiated this number yet with these guys, so they are not signing me up for that just because I am sitting here.
I'll work in a couple of tickers for you, Brian.
Yeah, thanks, Jon. Appreciate it.
That is with the Freedom product, right?
Right.
Right.
That's where I was going to go with it. I was going to say let's sort of take those assumptions, and work it back to the pipeline. I mean, over to you, Tim. Maybe just level set people in the audience. Let's start with Gemini, what that is, what that does for you guys, the timeline, and then we'll move to Freedom.
Yeah, the first thing to remember about the portfolio is we are very excited about the performance that we have with the 365. The sensing capability is honestly, this is not just the company talking. Talk to our customers, it works. It performs very well. People love the analytical performance of it. So what we've done with both Gemini and Freedom is we take that same sensor that exists today, and we do some engineering appendages to it. Gemini, we're going to add a battery to it. So what that means is that it will self-power itself. It won't need the through-skin transmitter anymore, and it'll collect 24 hours a day glucose results. Where can that really be successful? In the patient that's less and less involved in the management of their disease.
So think about when CMS makes the coverage change in the LCDs for people that are not on insulin, they're going to be less intensive users. That's a great product for them, right? That's what we're looking to do, and they'll be able to use the product without anything on the skin. When we go to Freedom, we've taken that same battery technology, and then we add the Bluetooth internally to it as well. I think of Gemini, it's a home run product, right? It really does a differentiation. Type 2, which is a huge population, gives them nothing on the skin. The grand slam product is Freedom, right? Because it has everything for everybody. It can connect to the pump. It can do that 24-hour measurement.
That's the direction that we're headed in with those two generations, but they are all built on the exact same sensing chemistry that's working today, and importantly, that sensing chemistry has the regulatory approval.
Okay. I'm going to follow up about those products, but I got to ask, any line of sight that you have into CMS with Type 2 NIT and the timing?
No. We are talking to CMS. Of course, they are being very, very close-lipped about the other conversations that they are having, but I think everybody sees that there has been, I would anticipate there has been some requests to change the LCDs to cover people that have diabetes but are not yet on insulin. You can certainly see that some of those wheels are in motion. I do not know anything about the timing of it. I wouldn't be surprised if there is some connection with the work that is going on in competitive bidding, right? If they are going to open up the market so much more.
I would imagine that there are going to be some concerns about cost as well. I have heard from the others that the timing is in the next one - four quarters. I wouldn't expect that to be unreal, because it lines up with the competitive bidding timing they have talked about.
Talk about, over the next one - four quarters, how that would arguably line up with Gemini. Maybe remind everyone of where you are with the process and the timing in terms of 2027 for Gemini.
Yeah. Gemini is targeted for 2027. We have pushed it out a little bit. We did make the decision in this fourth quarter to really focus on getting the clinical trials started for the first in man for Freedom, because it is such a big product for us. Instead of targeting the completion here in the fourth quarter, we are going to push that into the first quarter, and push out the submission as a result of that. That, again, was done for Freedom, which is the right trade-off to make, because we are absolutely on track for 2028 to deliver the Freedom product.
Okay. If you had a bucket, like a 1H, 2H type of thing, Tim, based on the comments that you just made, do we think 2H 2027 Gemini, 2H 2028 Freedom might be a good place to land?
2H 2027 probably for Gemini. We are going to work real hard to keep it, say, Q2 plus or minus a quarter for Freedom in 2028.
Okay. Perfect. Maybe last one on Freedom. In your early discussions with the agency or future discussions with the agency, what do you need to be on the same page with them in terms of protocol, in terms of what you need to run or prove to the agency? Because as you mentioned earlier, it is the same sensor. It is adding the battery, it is adding the Bluetooth. Do you have to validate the accuracy of the sensor? Is that already taken care of, and you just have to worry about a couple of the other dynamics?
Yeah. The first thing to remember in the regulatory approval process is we did achieve and have the iCGM designation. The iCGM designation declassifies you from a category three down to two. Two is a 510(k), which means you need to show equivalency to a predicate device. As a class two device, what we will do is we will show that it is equivalent in performance between the current 365, which is approved, and the new configuration. They will then ask you, "Okay, what has changed between the two?" In Gemini, it is just the battery. The powering came from near field on 365, and it comes from an implanted battery on the Gemini product. They will ask to prove that the battery works in the configuration. That is a pretty well-known area to do. Pacemakers do battery powered today.
The trial will be set up to demonstrate the functionality of the battery. Then in Freedom, it's really about the Bluetooth communication, right?
Getting the data.
Getting the data out. So, you've got to show that the Bluetooth function works.
Okay.
The sensing, and we're purposely doing this, right? We have iCGM on the sensor. We don't want to change that at this point.
Don't mess with that.
Don't change that, right. And it works.
Let's talk pump partnerships. Started with twiist, you got Beta, I think iLet, and it will be with mint upon commercialization?
Sure. Let me ask Brian to speak to that, but I do want to speak to the performance of the twiist product.
Please.
It's been super. We've been very excited about the uptake that we've gotten. We have out-punched our weight significantly in regard to penetration that we're excited about, and also would like to point people to the clinical performance. There is very strong. We had 76, 77% time in range for our real-world experience, best in class in regards to integrating Eversense with the twiist pump. Super happy that we did that. They've been a great partner and going to continue to be, but we're also excited about the next step.
Yeah, I know the Beta folks well. Many of them I worked with at Tandem. They've got a good product. They've got a nice installed base. They've got an exciting patch product coming up in the early part of 2027, which we'll integrate with as well, hopefully at launch. Launching that here in the next week or two just expands choice for our patients, and we continue to have discussions, because I know your next question, because it's always the same, when do the other ones come? I think continuing to expand and offering more and more choice is beneficial to everybody, and the success we've had with Sequel and the success I guarantee we'll have with Beta will continue to unlock those other discussions. When we fit into the proper slotting in their development programs, we hope to add additional pump partners to our profile.
Sorry, Brian, did you say on Beta it will be in the next few weeks being mint, or you meant with iLet?
iLet first. mint's not going to be a product for them until 2027.
Yeah.
Whenever they launch that, we should hopefully be ready, integrated, and it is the same architecture, just a different footprint, obviously, being a patch.
I was just wondering if you are telling us to pull forward Mint. That is where I was going with it.
That would be nice for everybody, but I think they are doing really good on that one.
Shockingly, I was going to ask about the other manufacturers, but I was going to come at it a little bit differently. Are those 2027 targets or are those 2028 targets?
We're going to do everything that we can to accelerate. Right now, there's some capacity issues at some. There's some technical issues. So, the guidance that I've given on the new additions is expect one by 2027, which we've now already announced. I would anticipate we're going to plan in our modeling for 2028 for the other ones. We'll do everything we can to pull it in, but at this point, there's some dynamics that they need to work through. Reminder, unfortunately for the sensor side, all of the work, heavy lift is done on the pump side. If it was on the CGM side, we of course would absolutely prioritize it.
These pump partnerships, Tim, I guess can give you a better reach into type 1. What percent of your starts are type 2?
We're heavy type 2, for a couple of reasons. One, first and foremost, of course, the product. It's a great product for people with type 2. Put it in, especially with our Medicare population. The doctor does it, so they don't have to do any new reinsertions at home. They feel real good about it because the doctor does it. As a result, we've indexed towards the type 2 population. So we're 80%-85% type 2 today. That is changing as the new pumps come on.
Sure.
You can't lose sight, all of the CGM companies make their real money on the type 2 population. AID is very important, we'll participate in it, but the big population of diabetes is type 2.
Where I was going with this is, the pump partnerships can help at least increase your reach into type 1. Last night, following the call where you gave me a little bit of pushback, and it made sense, was I didn't really think type 2 NIT and Senseonics popped for me. You believe it's a good product. My point is for type 2 NIT, you always hear they're going to use a sensor, but sporadically. They might only use it 50% of the time, right? That's the big debate. You believe you've actually got the right offering for that.
Well, there's a couple of things. A little bit of the data. One of the number one reasons as we, when it comes into the DTC, we need to create or get what we call a workable lead. One of the number one reasons that a person comes in with diabetes that isn't a workable lead is because they're not on insulin yet. We get a lot of calls from people that are interested. Remember, what happens with diabetes in the type 1 space, it's an acute here and now issue. So they're monitoring all the time. They need to be woken up in the middle of the night with an impending hypo. That doesn't happen in the type 2 space, right? They want a monitoring device that's as simple as possible and has less interface and less interaction with. Eversense is actually a great reason to do that.
You pay a price on day one by going to the doctor to have the sensor inserted, and then for 374 days, right, you don't have to think about it. So if you want to use it, you use it. If you don't want to use it, you don't use it. I think it's a great solution for them. It costs the same, right? So the real clinical benefit is there. The economic benefit is on parity. It's just a simpler product for them to use.
Yeah. One of the last topics I have, territory managers and the EON Network. Maybe on the territory managers, I think you're right around 45 in the U.S. Do I have that number right? Where do you want to take it? Then maybe if you could just comment internationally for us as well.
Yeah, I think you are right on the number this year, and we will look at tucking a few in next year, splitting two probably of our larger territories, just from an efficiency perspective and getting out in those regions a little bit more. I am pretty happy with where we are this year and where we go into next year, and increasing the efficiency internally is more important to me. We have our OUS team set now. We have hired all of our reps to replace the blood glucose reps that we shared with Ascensia, so we are not adding anyone next year. OUS, the full teams are in place, and they are ready to sell 365 and ready to do their thing.
Next year with success, Rick, we will tuck a few more in probably as we go through the year, and as we see Freedom's progress, we will start to scale because that will clearly need some additional investment from a field perspective to cover the volume we expect with that.
Brian, sorry, what was that baseline OUS rep number? You talked 45, maybe going a little higher in the U.S., but what do you have OUS?
We have about 60 employees OUS, all commercial. About half of those are sales reps.
Okay. Perfect. And maybe the last topic, EON Network. That's one where the numbers continue to go higher. I guess it's playing a very critical role. Tim, you talked a little bit earlier. You got your prescribers. They might not want to do the insertions. You don't want to have people traveling very far. So the 100's going to 120. Do we think 150 for next year? I mean, has it sort of started scaling and paying for itself when we think about the impact of the P&L?
Yeah, it certainly has. EON, for the audience, is our network. It's our medical subsidiary, if you will. What it is it's a network of 1099 nurses that are actually doing the insertions for us. As you said, we are anticipating scaling that to 120 by the end of the year. The number for next year will be bigger. I don't know how big at this point. We're still going to model our way through it. But we found a sweet spot in that space. We're using the reimbursement that comes with the CPT codes to fund all of that initiative. But it's really meant to facilitate a sensor sale, of course, right? Especially as we expanded into that type 2 space, a lot of the primary care physicians are not looking to do the insertions themselves.
This is a great way for them to write a script. We white glove hand it off to a nurse that does a very nice job of introducing the product and facilitating the insertion, and reinsertion when it comes.
And 40% of the insertions in 3Q were via the EON Network.
Correct.
Guys, any last-minute questions from the audience? Team Senseonics, thanks very much. Great quarter.
Thank you. Appreciate it.
Good job.