Senseonics Holdings, Inc. Common Stock 2026 Q2 Earnings Call

This is Jeremy Feffer from LifeSci Advisors. Before we begin today, let me remind you that the company's remarks include forward-looking statements. These statements reflect management's expectations about future events, operating plans, regulatory matters, product enhancements, company performance, and other matters, speak only as of the date hereof. These forward-looking statements involve a number of risks and uncertainties. A list of the factors that could cause actual results to be materially different from those expressed or implied by any of these forward-looking statements is detailed under Risk Factors and elsewhere in our annual report on Form 10-K for the year ended December 31st, 2025, our 10-Q for the period ended June 30th, 2026, and our other reports filed with the SEC. These documents are available on the investor relations section of our website at www.senseonics.com.

We undertake no obligation to update publicly or revise these forward-looking statements for any reason except as required by law. Joining me today from Senseonics are Tim Goodnow, President and Chief Executive Officer, and Rick Sullivan, Chief Financial Officer. Brian Hansen, Chief Commercial Officer, and Mukul Jain, Chief Operating Officer, will also be available during the Q&A. I'll turn the call over to Tim.

Thanks, Jeremy, thank you all for joining us today. I have to say, this is an exciting call to be giving today because it's an outstanding quarter for Senseonics. We're redefining what a CGM can be for people with diabetes, the second quarter showed just how much momentum that mission is building. This was another strong quarter for Senseonics, we are once again raising our full year 2026 global net revenue guidance now to $62 million-$66 million from $60 million-$64 million, representing year-over-year growth of about 80%. I'll keep my remarks focused here, as a quarter like this deserves a moment to properly highlight it. Second quarter revenue grew approximately 120% year-over-year, with U.S. revenue growing more than 150% with strong performance in both the DTC and HCP channels.

We also completed the commercial transition of our business in Europe from Ascensia, effective June 1st and consistent with the timeline we gave you in May. I want to thank the team led by Brian Hansen, our Chief Commercial Officer, for the continued execution of this strategy. At the same time, we continued to scale Eon Care ahead of schedule, enabling broader and faster access to Eversense for prescribing clinicians and their patients. In addition to the strong revenue performance, it's also important that I spend a moment on the margins because this is one of the most important stories for the quarter. Gross margin came in at 59%, above the guiding range we gave you in June, and the strongest organic performance by the company in its history. I want to give real credit to our commercial, manufacturing, and supply chain teams for that execution.

This kind of consistency does not happen by accident. Importantly, this quarter's margin doesn't include any one-time adjustments. This is a clean number, and I think that makes it an even stronger proof point. It's the second consecutive quarter that we've delivered margin at or near the high end of our range since bringing commercial operations fully in-house. That's exactly the kind of proof point that validates our decision we made to take control of our own commercialization in the first place. Given this performance, we are also raising our full year gross margin guidance to the range of 58%-61%, from the prior range of 55%-58%. Every point of margin we deliver today is a point that, over time, helps us fund our own operating expenses and moves us closer to being a business that can fund itself.

This is our clear objective, and that is the whole thesis behind the commercial transition. We now have all the pieces. We own the tactics and we own the strategies. Q2 showed another quarter of progress from the transition, and our team is delivering quarter after quarter. I couldn't be prouder of the execution. During Q2, we also presented additional real-world data on Eversense 365 at the ADA Scientific Sessions in June. The data reinforced compelling clinical benefit through strong adherence with real-world system use averaging 93% and consistent loop metrics across the first and second six months of sensor wear, including a mean time and range of 66% in open loop use, with more than 81% of our users achieving their hypoglycemia targets. Among those on a partnered AID system, we saw a mean time and range of approximately 76%.

We also highlighted at the ADA the high-quality performance and survivability of Eversense for a full year, which we showed to be a meaningful differentiator in the quality aspects of our product compared to other available transcutaneous sensors, which clearly disappoint some of the users. We're pleased that the product continues to perform in the real world, which excites our users and meets their needs. We're at the most exciting stage of our journey yet, and this quarter is exactly the kind of proof point that demonstrates our strategy is working, bringing our commercial organization in-house, scaling Eon Care, driving Eversense 365 adoption, and developing the next generation of products to redefine CGM. Let me provide a bit more color on each of these areas before turning the call over to Rick. In the United States, our commercial momentum has continued to build, and frankly, it's exciting to watch.

We shipped more units in the second quarter than in any other quarter in our history. The number of active prescribers writing for Eversense reached an all-time high, up approximately 130% year-over-year. Direct-to-consumer remains our largest source of new patient growth. At the same time, our healthcare provider channel continues to expand as our sales force gains productivity, awareness expands, and we are continuing to see strong results from the Eversense 365 integration with the twiist insulin pump. twiist's footprint is roughly 100 sales territories and has meaningfully amplified our own commercial reach, and we continue to see the combination bring new patients to both products. As we noted at our ADA analyst event, approximately 90% of our new patients continue to come from the installed base of existing CGM users switching to Eversense.

This speaks to the quality and differentiation of our sensor. Patient retention has also remained in line with our expectations. Simply put, our U.S. business is executing at a high level across every part of the model, performing consistent with a high growth plan we've laid out, and we expect that strength to continue through the back half of the year. I also want to spend a few minutes on Eon because it has quickly become a strong asset for growth today. At its core, Eon makes Eversense easy to get. It gives patients simple, convenient, and affordable access to the sensor, and it partners with prescribers so they can bring the benefit of Eversense to their patients without having to build the insertion procedures into their own practice. That model matters because it means any prescriber, not just trained inserters, can say yes to Eversense.

The network's momentum in the second quarter was outstanding. We added 28 new providers, bringing us to more than 90 nurses, already well ahead of pace to deliver our goal of 100 by the end of 2026, and we have plans in place to push beyond that target. By year-end, we expect to have an Eon provider within 30 miles of 60% of the U.S. population. That reach is showing up directly in volume. Eon performed more insertions in the second quarter than in any other quarter in its history and June was the highest volume month ever. Today, Eon is performing approximately 40% of all Eversense insertions in the United States, and we expect to account for more than half by year-end. Eon aligns tightly with our direct-to-consumer strategy. Most patients who come to us through DTC channels have primary care prescribers who are not Eversense-trained inserters.

Eon closes that gap. It is what makes getting Eversense convenient and affordable for exactly those patients. While Eon's primary focus remains enabling sensor adoption, it is expected to become a contributor to Senseonics' economics in its own right. Simply put, Eon is a key element powering Eversense growth today, and it will be essential to the rapid acceleration and adoption we expect with Gemini and Freedom tomorrow. On the reimbursement side, our channel mix remains a real strength for us, holding constant at approximately 60% of our volume flowing through and the remaining 40% through our DME channel, in line with our expectations. We continue to expect this split to hold for the remainder of the year.

In Europe, we completed the commercial transition of the business from Ascensia during the second quarter, bringing over the full commercial organization, including all local employees, and standing up of our own dedicated sales force across Germany, Italy, Spain, and Sweden. That transition landed a little later in the quarter than we had originally planned, which slightly affected our tender-driven markets. In each of our tender countries, we need to both transfer ownership of the existing tender from Ascensia to Senseonics and simultaneously request the upgrade from our legacy 180-day Eversense E3 product to Eversense 365. Because the underlying commercial transition landed later in the quarter, that work in Italy and a handful of other markets got slightly pushed out as well.

That timing, together with a small purchase of Eversense inventory back from Ascensia as we finalized the transition, similar to adjustments we've made in the U.S. in the past, is why our OUS revenue came in slightly lower than we had modeled for the quarter. None of this changes our confidence in the opportunity in front of us in Europe. It's truly a matter of timing, and we expect the revenue associated with these tender updates to shift to the third and fourth quarter. We do not expect an impact on the full year revenue in Europe, but it will slightly push some of this revenue into Q3 and Q4. We continue to expect Europe to represent approximately 20% of our total revenue for the full year. Turning to our product pipeline, our additional major pillar for Senseonics' growth.