德康醫療 (DXCM) 2018 Q1 法說會逐字稿

Welcome to the DexCom First Quarter 2018 Earnings Release Conference Call. My name is Adrianne, and I will be your operator for today's call. (Operator Instructions) Please note, this conference is being recorded. I will now turn the call over to Matt Dolan. Matt Dolan, you may begin.

歡迎參加 DexCom 2018 年第一季財報發布電話會議。我是 Adrianne，將擔任今天會議的接線員。(接線員指示) 請注意，本次會議將被錄音。現在我將把電話交給 Matt Dolan。Matt Dolan，您可以開始了。

Thank you, operator, and welcome to DexCom's first quarter 2018 earnings call. With us today is Kevin Sayer, DexCom's President and CEO; Quentin Blackford, our Executive Vice President and Chief Financial Officer; and Steve Pacelli, our Executive Vice President of Strategy and Corporate Development. We will begin with our prepared remarks and then open the call up for your questions. (Operator Instructions) I will begin with our safe harbor statement. Some of the statements that we will make in today's call may constitute forward-looking statements. These statements reflect management's intentions, beliefs and expectations about future events, strategies, competition, products, operating plans and performance. All forward-looking statements included in this presentation are made as of the date hereof based on information currently available to DexCom and are subject to various risks and uncertainties, and actual results could differ materially from those anticipated in the forward-looking statements. The factors that could cause actual results to differ materially from those expressed or implied by any of these forward-looking statements are detailed in DexCom's annual report on Form 10-K, quarterly reports on Form 10-Q and other filings with the Securities and Exchange Commission. Except as required by law, we assume no obligation to update such forward-looking statements after the date of this presentation or to conform these forward-looking statements to actual results. Additionally, during the call, we will discuss certain financial measures that have not been prepared in accordance with GAAP with respect to our non-GAAP and cash-based results. The presentation of this additional information should not be considered in isolation or as a substitute for or superior to results prepared in accordance with GAAP. Please refer to the tables in our earnings release in the Investor Relations portion of our website for a reconciliation of these measures to their most directly comparable GAAP financial measure.

謝謝，接線員，歡迎參加 DexCom 2018 年第一季財報電話會議。今天與我們一同出席的有 DexCom 總裁暨執行長 Kevin Sayer；執行副總裁暨財務長 Quentin Blackford；以及策略與企業發展執行副總裁 Steve Pacelli。我們將先進行事先準備的發言，接著開放各位提問。(接線員指示) 我先宣讀安全港聲明。我們在今天電話會議中所做的部分陳述可能構成前瞻性陳述。這些陳述反映管理層對未來事件、策略、競爭、產品、營運計畫與績效的意圖、信念與預期。本簡報所包含的所有前瞻性陳述均以本日為準，係基於 DexCom 目前可得資訊作出，並受各種風險與不確定性影響，實際結果可能與前瞻性陳述所預期者有重大差異。可能導致實際結果與任何前瞻性陳述所明示或暗示者有重大差異的因素，已詳載於 DexCom 的 Form 10-K 年報、Form 10-Q 季報及其他向美國證券交易委員會提交的文件中。除法律要求外，我們不承擔在本簡報日期後更新此等前瞻性陳述，或使其與實際結果一致的任何義務。此外，在本次電話會議中，我們將討論若干未依 GAAP 編製的財務衡量指標，涉及我們的非 GAAP 與以現金為基礎的結果。此額外資訊之呈現不應被單獨看待，亦不應被視為可替代或優於依 GAAP 編製之結果。請參閱我們網站投資人關係專區之財報新聞稿中的表格，以取得這些衡量指標與其最直接可比之 GAAP 財務衡量指標的調節表。

With that, I will turn it over to Kevin.

接下來，我把時間交給 Kevin。

Thank you for joining us. Like last time, I will provide an introduction and pass it on to Quentin for a financial review, followed by Steve, who will give you an update on our key strategic initiatives. I will then conclude with my thoughts on the business and our outlook, before we open up to Q&A.

感謝各位加入我們。如同上次，我將先做開場，接著交給 Quentin 進行財務回顧，然後由 Steve 向各位更新我們的關鍵策略性計畫進展。之後我將以我對業務與展望的看法作結，然後開放問答。

We are off to a great start here in 2018. First quarter revenue grew by 30% to $184 million. This growth rate sits above our anticipated 2018 range, and we feel very well positioned so far this year. Our key growth indicators, including sensor volumes, international sales and new patient additions, all helped drive the better-than-expected top line result. From a profitability perspective, our team, again, showed good expense control, as operating spend grew at just a third over our top line growth rate.

我們在 2018 年有個非常好的開局。第一季營收成長 30%，達到 1.84 億美元。此成長率高於我們原先預期的 2018 年區間，我們認為今年迄今的定位非常良好。我們的關鍵成長指標，包括感測器出貨量、國際銷售與新增病患人數，都推動了優於預期的營收表現。就獲利能力而言，我們的團隊再次展現良好的費用控管，營運支出增幅僅約為營收成長率的三分之一。

In the short time since we last spoke with you about the FDA's clearance of our G6 system, the DexCom team has been sprinting to get this product out the door. The initial excitement from the field has been phenomenal. First, the elimination of fingersticks, while maintaining industry-leading performance, has created quite a buzz. In addition, the simplicity of the auto applicator and an improved on-body form factor have the diabetes community excited to experience this great new technology. Our limited launch has commenced and we remain on track for a full launch ahead of this year's ADA meeting in Orlando in June.

自從上次我們與各位談到 FDA 核准我們的 G6 系統以來的短短時間內，DexCom 團隊一直全力衝刺，力求讓產品盡快出貨。來自市場前線的初期熱度非常驚人。首先，在維持業界領先表現的同時，免除指尖採血校正已引起相當大的話題。此外，自動上針器的簡便性以及更佳的貼身外型設計，也讓糖尿病社群迫不及待想體驗這項出色的新技術。我們已啟動有限度上市，並仍按計畫在今年 6 月於奧蘭多舉行的 ADA 年會之前完成全面上市。

I will now turn the call over to Quentin for review of our financials.

現在我把電話交給 Quentin，請他回顧我們的財務表現。

Thanks, Kevin. DexCom reported revenue of $184 million for the first quarter of 2018 compared to $142 million for the same quarter in 2017, representing growth on a worldwide basis of 30%. We are very pleased with the broad-based strength we saw in the business, both in the U.S. and internationally, which grew 25% and 49% respectively. It is clear that the momentum we saw during the fourth quarter has carried into the new year, supported in part by continued uptake among our Medicare population and the continued momentum in our international business as sequential revenue grew by 17%.

謝謝你，Kevin。DexCom 2018 年第一季營收為 1.84 億美元，較 2017 年同期的 1.42 億美元成長，全球口徑成長率為 30%。我們對業務呈現的廣泛性強勁表現感到非常滿意，美國與國際市場分別成長 25% 與 49%。很明顯，我們在第四季看到的動能已延續到新年度；其中一部分受惠於 Medicare 族群持續採用，以及國際業務動能延續，使得營收季增 17%。

Our first quarter gross profit was $119 million, generating a gross margin of 64.5% compared to a gross margin of 66.1% in the same quarter of the prior year. When comparing our Q1 gross margin to the prior year, it was negatively impacted by 3 factors: First, we took an excess and obsolete inventory charge related to our prior-generation receivers as we accelerated transition to the new touchscreen device we launched last year; second, our mix continues to shift toward both OUS and Medicare where we see lower pricing; and third, we began deferring some revenue in Q1 after the G6 approval and the introduction of our upgrade program. The aggregate effect of these items totaled approximately 250 basis points of headwinds in the first quarter.

第一季毛利為 1.19 億美元，毛利率為 64.5%，相較去年同期毛利率 66.1%。將第一季毛利率與去年同期相比，受到三項因素的負面影響：第一，因我們加速轉換至去年推出的新款觸控裝置，針對上一代接收器提列了超額與呆滯存貨費用；第二，我們的產品組合持續朝向 OUS（美國以外）與 Medicare 轉移，而這些市場的定價較低；第三，在 G6 核准以及我們推出升級方案後，我們於第一季開始遞延部分營收。上述因素合計在第一季約造成 250 個基點的不利影響。

As presented in the tables of our press release, our geographic revenue mix was more heavily weighted towards our OUS business, with international revenue exceeding 20% of our global sales for the first time in our history.

如我們新聞稿表格所示，我們的地理營收組合更偏向 OUS 業務，國際營收在公司歷史上首次超過全球銷售的 20%。

International growth remains an important area of focus for us as CGM continues to have single-digit penetration in that region. Average sensor pricing was consistent with recent quarters, while transmitters and receivers saw some reduction due primarily to the increased mix of revenue in our Medicare and international businesses.

國際成長仍是我們的重要聚焦領域，因為 CGM 在該地區的滲透率仍為個位數。感測器平均售價與近幾季一致，而發射器與接收器的價格則略有下降，主要是因為 Medicare 與國際業務的營收占比提高。

Operating expenses totaled $150 million for Q1 2018 compared to $135 million in Q1 2017. This reflects an increase of 11% year-over-year and compares very favorably to the 30% revenue growth rate posted in the quarter.

2018 年第一季營業費用合計為 1.50 億美元，2017 年第一季為 1.35 億美元。這反映年增 11%，相較本季 30% 的營收成長率，表現相當亮眼。

As I stated on our last earnings call, DexCom has a tremendous opportunity to deliver increasing financial leverage over time and this quarter represents another strong data point in that journey. Most importantly is that within that 11% increase in operating expenses, we continue to invest in our key strategic initiatives, which included accelerated DTC marketing, international expansion, our R&D pipeline and opportunities to expand into the non-intensive markets. Adjusted EBITDA, which exclude the impact of share-based compensation and a $7 million noncash investment income, was $2.5 million or 1% of revenue for the first quarter and up from a loss of approximately $6 million or negative 4% margin in the prior year. This continues to demonstrate our leverage story as it positions us well to be adjusted EBITDA positive or generating positive cash earnings for every quarter this year.

如我在上次財報電話會議所述，DexCom 有極大的機會隨時間推進而展現更高的財務槓桿，而本季是這段旅程中的另一個強勁數據點。更重要的是，在營業費用年增 11% 的同時，我們仍持續投資於關鍵策略性計畫，包括加速 DTC 行銷、國際擴張、我們的研發產品線，以及拓展至非重度（non-intensive）市場的機會。調整後 EBITDA（排除股份基礎給付影響以及 700 萬美元的非現金投資收益）為 250 萬美元，約占第一季營收的 1%，較去年同期約 600 萬美元虧損（負 4% 利潤率）明顯改善。這持續展現我們的槓桿效應，使我們有良好定位在今年每一季都能達成調整後 EBITDA 為正，或產生正向的現金盈餘。

Our GAAP net loss was $24 million or a $0.28 loss per share. Adjusting to exclude $7 million of noncash investment income and $3 million of noncash interest expense related to our convertible notes, non-GAAP net loss was $28 million or a $0.32 loss per share.

我們的 GAAP 淨虧損為 2,400 萬美元，或每股虧損 0.28 美元。經調整以排除 700 萬美元的非現金投資收益，以及與我們可轉換公司債相關的 300 萬美元非現金利息費用後，非 GAAP 淨虧損為 2,800 萬美元，或每股虧損 0.32 美元。

We ended the quarter with a strong and flexible balance sheet, including $534 million in cash and equivalents, along with our entire $200 million revolving line of credit remaining available.

本季末我們的資產負債表強健且具彈性，包括 5.34 億美元的現金及約當現金，並且我們 2 億美元的循環信用額度仍全數可用。

Looking ahead to the balance of 2018, we are happy with our performance to date and now anticipate total revenue of $850 million to $860 million for the year versus our prior guidance of $830 million to $850 million. For the second quarter, as Kevin mentioned, patients are eager to get their hands on our new G6 platform. Consistent with our previous launch experiences, we are hearing that some physicians and patients are delaying the purchase of a new G5 transmitter to wait for G6 availability. As I mentioned earlier, we are offering an upgrade program by which customers who purchase 2 G5 transmitters during the upgrade window will be able to get a free G6 transmitter when available, which will result in a revenue deferral.

展望 2018 年剩餘期間，我們對目前為止的表現感到滿意，並且現在預期全年總營收為 8.50 億至 8.60 億美元，高於先前指引的 8.30 億至 8.50 億美元。至於第二季，如 Kevin 所提到，病患迫不及待想要取得我們新的 G6 平台。與我們過去的上市經驗一致，我們聽到有些醫師與病患正在延後購買新的 G5 發射器，以等待 G6 上市供貨。如我先前提到，我們提供升級方案：在升級期間購買 2 個 G5 發射器的客戶，待 G6 發射器可供應時可免費獲得 1 個 G6 發射器，這將導致營收遞延。

Considering the impact of the G6 launch, along with other market conditions we have discussed previously, we are comfortable with the current Street consensus revenue estimate for the second quarter. Our full year outlook for the rest of the P&L is unchanged with gross margin expected in the mid- to upper 60% range and core operating expenses increasing approximately 10%. Again, this excludes any additional spend associated with our non-intensive efforts, which we would identify independently.

考量 G6 上市的影響，以及我們先前討論過的其他市場狀況，我們對目前華爾街共識的第二季營收預估感到安心。我們對全年其餘損益表項目的展望維持不變：毛利率預期落在 60% 中段至高段區間，核心營運費用約增加 10%。再次強調，這不包含任何與我們非密集型（non-intensive）相關工作所增加的額外支出；若有，我們會另行獨立揭露。

With that, I will turn the call over to Steve for a strategic update.

接下來，我把電話交給 Steve 進行策略更新。

Thanks, Quentin. Since the G6 approval, we have held a number of conversations with our insulin delivery partners and are excited that the advent of integrated continuous glucose monitoring, or ICGM, could accelerate the interoperability of our sensor on a number of key platforms. Just last week, a group of industry leaders gathered with the FDA, JDRF, the Helmsley Trust and others to discuss the implications of this approval and how we can collectively pursue initiatives forward. Although it is still early, we believe this new ICGM category is a major step in the right direction. Our initial read is that we may be able to consider product configurations that were previously ruled out based on the requirements surrounding a Class 3 system. More on this as we further develop the strategy.

謝謝你，Quentin。自 G6 獲准以來，我們已與多家胰島素輸注合作夥伴進行多次對話，並對整合式連續血糖監測（integrated continuous glucose monitoring，ICGM）的到來感到振奮，因為它可能加速我們感測器在多個關鍵平台上的互通性。就在上週，一群產業領袖與 FDA、JDRF、Helmsley Trust 等單位齊聚一堂，討論此次核准的意涵，以及我們如何共同推動後續倡議。雖然仍在早期階段，我們相信這個新的 ICGM 類別是朝正確方向邁出的重大一步。我們初步判斷，基於先前圍繞第三類（Class 3）系統要求而被排除的一些產品配置，現在可能可以納入考量。隨著我們進一步制定策略，後續會有更多更新。

In the meantime, we believe we are very well positioned given the progress we're seeing with multiple integrated insulin delivery partnership. As we assess the current market landscape, we now see an opportunity to drive a steady cadence of highly competitive systems over the next few years with the potential to leapfrog currently available products. Our collective goal is to deliver a variety of integrated systems that meet the needs of our diverse target population, including platforms with smart pens and automated insulin delivery.

同時，鑑於我們在多項整合式胰島素輸注合作夥伴關係上所看到的進展，我們相信自身處於非常有利的位置。在評估目前市場版圖時，我們現在看到一個機會：在未來幾年以穩定的節奏推出高度具競爭力的系統，並有潛力超越目前市面上的產品。我們共同的目標是提供多樣化的整合式系統，以滿足我們多元目標族群的需求，包括具智慧筆（smart pens）平台與自動化胰島素輸注。

Beyond insulin delivery, we remain enthusiastic about DexCom's opportunities in alternative markets, such as the non-intensive diabetes management space, the hospital, gestational, pre-diabetes and obesity, just to name a few. Our next-generation fully disposable CGM systems are moving ahead and the design of these devices will allow us to leverage our technology into multiple new opportunities. Our pilot efforts in non-intensive diabetes management are ongoing, and we will have more updates as these progress into 2019. We are also evaluating other novel opportunities that remain early, but exciting.

除了胰島素輸注之外，我們仍對 DexCom 在其他替代市場的機會感到振奮，例如非密集型糖尿病管理領域、醫院、妊娠期、糖尿病前期與肥胖等，僅舉數例。我們下一代全拋棄式 CGM 系統正持續推進，這些裝置的設計將使我們能把技術延伸到多個新的機會。我們在非密集型糖尿病管理方面的試點工作仍在進行中，隨著其在 2019 年取得進展，我們將提供更多更新。我們也在評估其他仍處於早期但令人興奮的新型機會。

The bottom line is that we know that CGM offers significant value beyond our core intensive insulin management segment. The G6 system brings us to a level of performance and ease-of-use that will help us establish CGM as a platform for diabetes management.

歸根結底，我們知道 CGM 在我們核心的密集型胰島素管理區隔之外，仍能提供顯著價值。G6 系統把我們帶到一個新的效能與易用性水準，將有助於我們把 CGM 建立為糖尿病管理的平台。

With that, I will pass it back to Kevin.

接下來，我把話筒交回給 Kevin。

Thank you, Steve. This is the most exciting time ever to be at DexCom. The business is performing exceptionally well even in the face of shifting market dynamics. Not only did we see sustained, strong year-over-year revenue growth, but we again demonstrated good financial leverage. As we have always said, our long-term goal is to replace fingersticks with CGM as a primary tool in glucose management across the board. In spite of our continued success in sustained growth, we still have a very long way to go. A system like G6 which removes fingersticks and represent a significant jump in performance and ease-of-use provides us with a platform to drive CGM toward the standard of care in the next several years.

謝謝你，Steve。現在是在 DexCom 最令人振奮的時刻。即便面對市場動態的變化，我們的業務表現仍然極為出色。我們不僅看到持續且強勁的年對年營收成長，也再次展現良好的財務槓桿。正如我們一直所說，我們的長期目標是以 CGM 取代指尖採血，成為全面血糖管理的主要工具。儘管我們在持續成長方面不斷成功，我們仍有很長的路要走。像 G6 這樣可免除指尖採血、並在效能與易用性上大幅躍升的系統，為我們提供了一個平台，推動 CGM 在未來幾年成為照護標準（standard of care）。

We know the diabetes community is ready for G6, and we appreciate everyone's patience as we go through the typical steps to commercial launch. Our cross-functional team has worked very hard to get to this point. I want to take a moment to congratulate them on our progress to date. We are very well positioned to hit our launch targets, and we believe we are on the cusp of raising the bar for the CGM category forever.

我們知道糖尿病社群已準備好迎接 G6，也感謝大家在我們走完商業化上市的典型步驟期間所展現的耐心。我們的跨職能團隊為了走到這一步付出了非常多努力。我想花一點時間祝賀他們迄今為止的進展。我們已做好充分準備以達成上市目標，並相信我們正站在永久提高 CGM 類別門檻的關鍵時刻。

We know the primary question you will all have on this call surrounds our pricing and utilization assumptions with the introduction of G6. We are not currently changing our annual revenue per patient assumptions in our internal models. With respect to pricing, although we believe G6 could be priced consistently with G5 on a labeled per day basis, which would imply a sensor ASP increase, our guidance assumes sensor ASPs remain relatively flat between G5 and G6. We have also modeled utilization trends remaining fairly similar between the 2 platforms.

我們知道各位在這通電話上最主要的問題，會圍繞在導入 G6 後我們對定價與使用量（utilization）的假設。目前我們並未在內部模型中調整每位病患的年度營收假設。就定價而言，雖然我們認為 G6 可在標示的每日（per day）基礎上與 G5 維持一致的定價，這將意味著感測器 ASP 上升，但我們的指引假設 G5 與 G6 的感測器 ASP 大致持平。我們也在模型中假設兩個平台的使用量趨勢仍相當類似。

On top of these assumptions, let us reiterate what we've been saying all along. First, it is a much more competitive environment than we have seen before, and competition can impact pricing. Second, G6 gives us the opportunity to get in front of the payers to potentially improve access to DexCom CGM, and we will take every advantage of that. This could include further opening up the pharmacy channel or Medicare-type bundling packages in the commercial environment, both of which have a positive impact on our operating structure, but could also impact pricing.

在上述假設之上，讓我們重申我們一直以來所說的。第一，競爭環境比我們過去所見更為激烈，而競爭可能影響定價。第二，G6 讓我們有機會更早與支付方（payers）接觸，以潛在改善 DexCom CGM 的可近性（access），我們會把握每一個優勢。這可能包括進一步開放藥局通路，或在商業保險環境中採用類似 Medicare 的打包（bundling）方案；兩者都會對我們的營運結構帶來正面影響，但也可能影響定價。

Looking to our pipeline, the FDA's creation of the ICGM category with special controls will drive clarity into our product road map. We now have the ability to accelerate the delivery of future products that meet these new well-defined criteria. To reiterate from our last call, we believe the agency has set a standard that ensures the safety and effectiveness of CGM and establishes a rigorous bar for future devices that aim to use this regulatory path. In fact, as soon as the special controls were published, we had a few DexCom personnel asking if we had to meet these standards. Yes, yes, we do. We will continue to do so and we will exceed them.

展望我們的產品開發管線，FDA 建立具備特別管制（special controls）的 ICGM 類別，將為我們的產品路線圖帶來更清晰的方向。我們現在有能力加速推出符合這些新且明確定義之標準的未來產品。重申我們上次電話會議所說，我們相信主管機關已訂立一項標準，確保 CGM 的安全性與有效性，並為未來希望採用此監管途徑的裝置設下嚴格門檻。事實上，特別管制一公布，我們就有幾位 DexCom 人員來問我們是否必須符合這些標準。是的，是的，我們必須。我們將持續做到，而且會超越這些標準。

On the practical side of this decision, the special controls represent a significant barrier to entry. For example, we will still need to run clinical trials to achieve some of our goals and new product features, such as a 14-day sensor, including our first disposable system in development. Systems that include significant performance enhancements, such as improved membranes and algorithms, and other new label indications.

就此決策的實務面而言，特別管制代表著顯著的進入門檻。例如，為了達成我們的一些目標與新產品功能，我們仍需要進行臨床試驗，例如 14 天感測器（包含我們正在開發中的第一套一次性系統）。以及包含重大效能提升的系統，例如改良的薄膜與演算法，以及其他新的標示適應症。

Before I wrap up, I must take a moment to thank the FDA for their leadership and partnership through this process. This will benefit people with diabetes tremendously. Also, the DexCom team should be proud of this achievement. The entire leadership group thanks you for all the long hours and effort it took to get this approval over the finish line. Now that we celebrated that milestone, the DexCom team is already back, working hard to get G6 out the door. We sincerely appreciate the effort we are seeing from our employees.

在我結束之前，我必須花點時間感謝 FDA 在此過程中的領導與合作夥伴關係。這將為糖尿病患者帶來巨大的益處。同時，DexCom 團隊也應該為這項成就感到自豪。整個領導團隊感謝大家為了讓這項核准順利過線所投入的長時間與努力。在我們慶祝這個里程碑之後，DexCom 團隊已經回到崗位，努力推動 G6 出貨。我們由衷感謝員工所展現的努力。

In conclusion, we have had a very strong start to 2018, and are pleased to see continued significant demand for DexCom's real-time CGM offering. We look forward to providing you with additional updates next quarter.

總結而言，我們在 2018 年有一個非常強勁的開局，並很高興看到市場對 DexCom 即時 CGM 產品的需求持續顯著。我們期待在下個季度為各位提供更多更新。

I would now like to open up the call for Q&A. Matt?

我現在想開放電話會議進入問答環節。Matt？

Thank you, Kevin. (Operator Instructions) Operator, please provide the complete Q&A instructions.

謝謝你，Kevin。（接線員指示）接線員，請提供完整的問答指示。

(Operator Instructions) And the first question comes from Jeff Johnson from Baird.

（接線員指示）第一個問題來自 Baird 的 Jeff Johnson。

Kevin, so I agree with you, we're all trying to figure out utilization and pricing for G6. But I kind of want to step back and look at your comments on the 1Q for G5. The sensor pricing was stable, sensor volumes contributed to your growth. I'm wondering what you can say that the implications are of that from a competitive standpoint, again, just to kind of, especially under U.S. commercial business and what kind of impact competition is having on your U.S. commercial business at this point?

Kevin，我同意你的看法，我們都在試著釐清 G6 的使用率與定價。但我想稍微退一步，回到你對 G5 第一季的評論。感測器定價維持穩定，感測器出貨量帶動了你們的成長。我想了解，從競爭角度來看，這代表什麼含意——同樣地，特別是在美國商業保險業務之下，以及目前競爭對你們美國商業保險業務造成了什麼樣的影響？

Certainly. In our U.S. business, things were very robust this quarter. We certainly met our expectations as is supported by the numbers. And with respect to competition in the U.S., our new patient numbers, we've re-met them. We hit our new patient goals. And on top of that, we saw continued usage of our sensors by our current patients. So we did not see any -- anything out of the ordinary with respect to have patient attrition. Now balance that with the fact that the first quarter is always the least predictable because of patient's co-pays and deductibles and everything resetting. All that being said, we've not been impacted in the markets where we participate by competition. If anything, we have heard numerous stories of patients who try competitors' products and switch over versus patients who try ours and switch over to theirs. So no, first quarter was very good commercially in U.S., no problems.

當然。就我們的美國業務而言，本季表現非常強勁。我們確實達成了預期，數字也支持這一點。至於美國市場的競爭，我們的新病患數再次達標。我們達成了新病患目標。此外，我們也看到現有病患持續使用我們的感測器。因此，就病患流失而言，我們沒有看到任何——任何不尋常的情況。當然也要平衡一點：第一季一向最難預測，因為病患的自付額（co-pays）、自負額（deductibles）等都會重置。綜合而言，在我們參與的市場中，競爭並未對我們造成影響。如果說有什麼，我們反而聽到許多案例是病患試用競品後轉回來，而不是病患試用我們的產品後轉去他們那邊。所以沒有，美國第一季商業面表現非常好，沒有問題。

Great. And, Quentin, maybe for my follow-up, I just want to ask a gross margin question. So you broke out the 3 factors that contributed 250 basis points on a combined basis. The mixed OUS and CMS, I think, we've all been trying to model that, so that I would say, at least, in our model was somewhat embedded. The obsolescence charge and the deferral of revenue out of 1Q into, I'm assuming, future quarters. Any further detail you can provide on how much of that 250 basis points those 2 factors had, and will we see those more be transient and come out of the model over the next couple of quarters?

很好。另外，Quentin，作為追問，我想問一個毛利率的問題。你把合計影響 250 個基點的三個因素拆開說明。海外（OUS）與 CMS 的組合，我想我們都一直在嘗試建模，所以至少在我們的模型裡算是有部分反映。至於報廢/呆滯（obsolescence）費用，以及把第一季的收入遞延到——我猜是——未來季度。你能否提供更多細節，說明在這 250 個基點中，這兩個因素各自影響了多少？以及我們是否會看到它們較偏一次性、在接下來幾季逐步從模型中消退？

Yes, good question, Jeff. As you know, it was far and away the vast majority of the 250 basis points that I laid out for you guys and was trying to reconcile and really, that reconciliation was year-over-year, not necessarily relative to your models. And you're right, the mix in OUS and Medicare is something you would have already had in your model. So it's more of a year-over-year mix shift that we were talking about. What we're seeing with respect to the excess and obsolete charge that we took is that the team here has done an incredible job of trying to improve on the quality of our receiver issues that we had in the past, and we rolled out a new receiver last year and we're seeing meaningful reductions in the warranty rates on that new receiver, but we still had a good amount of the old receiver in inventory, and what we've done is essentially accelerated our plan to move towards the new receiver. So what you will see over the course of the year is the reduced warranty cost that does benefit margin, but to your point, we ended up seeing the headwinds in the first quarter as we took that excess and obsolete charge. So over the course of the year, this will actually turn around to be a benefit for us, but it was something we had to get behind us. And so, yes, we took it in the first quarter, but that's the vast majority of the 250 basis points.

是的，Jeff，問得好。如你所知，在我向各位說明並嘗試做調節的那 250 個基點之中，絕大多數都來自這部分；而且那個調節主要是年對年（year-over-year），不一定是相對於你們的模型。你說得對，海外（OUS）與 Medicare 的組合變化，本來就會在你們的模型中。因此，我們談的是年對年的組合移轉。至於我們認列的超額與呆滯（excess and obsolete）費用，我們這邊的團隊在改善過去接收器（receiver）問題的品質方面做得非常出色；我們去年推出了新的接收器，並看到該新接收器的保固率（warranty rates）明顯下降，但我們庫存中仍有相當數量的舊接收器，因此我們基本上加速了轉向新接收器的計畫。所以你會在今年看到保固成本下降，這會對毛利率有利；但如你所說，我們在第一季因認列該超額與呆滯費用而面臨逆風。因此，隨著年度推進，這實際上會轉為對我們有利，但這是我們必須先處理掉的事情。所以，是的，我們在第一季認列了它，而這就是那 250 個基點中的絕大部分。

And our next question comes from Margaret Kaczor from William Blair.

下一個問題來自 William Blair 的 Margaret Kaczor。

First one for me is following up on your commentary regarding the G6 contracts. Any clarity that you guys can give us in terms of what stage you're at and timing of that? And how many of those have really been on pharmacy? Has the reception been maybe better with G6 at the payer level for pharmacy than it has in the past?

我第一個問題是延續你們對 G6 合約的評論。你們能否就目前進展階段與時程提供更清楚的說明？其中有多少是真正走藥局通路（pharmacy）的？在付款方（payer）層級，G6 在藥局通路的接受度是否可能比過去更好？

So, Margaret, this is Steve. I'll take that. We're still very, very early in the process, which is frankly, why we're remaining conservative when we're building our guidance and assuming basically static sensor pricing, right. So we have an ASP on Gen 5 of around $70 a sensor, for modeling and for guidance purposes, we're going to maintain that. We've had some early successes in a few places where we have direct commercial contracts where, as Kevin mentioned, the labeled price per day for a 7-day sensor for a G5 has translated into something higher on a labeled basis for G6, but it's very, very early. I would say the same is true on the pharmacy side. That we're just too early to give you any signals as to whether this is going to advance our efforts in the pharmacy. We hope so, but kind of early to tell.

所以，Margaret，這位是 Steve。我來回答這個。我們在這個流程上仍然非常、非常早期，坦白說，這也是為什麼我們在建立指引時仍維持保守，並基本上假設感測器定價維持不變，對吧。因此，我們在第 5 代（Gen 5）的平均銷售單價（ASP）大約是每個感測器 70 美元，基於建模與指引目的，我們會維持這個水準。我們在少數幾個地方已經有一些早期成功案例，透過我們直接的商業合約，如 Kevin 提到的，G5 的 7 天感測器按標示的每日價格，換算到 G6 時，在標示基礎上會變得更高一些，但這仍然非常、非常早期。我會說在藥局端也是同樣情況。我們現在還太早，無法給你任何訊號來判斷這是否會推進我們在藥局通路的努力。我們希望如此，但目前還很難說。

Yes, I'd just add to that, Margaret. We've already filed with CMS for Medicare, and so that should come sometime in the fall, and we will be able to move those patients over, but that pricing isn't going to change from G5 to G6. I will go back to what we said in our prepared remarks. We're going to take this opportunity with new product to try and expand access and get to more patients. And to the extent we make it easier for the payers and easier for us to manage this, we'll certainly entertain interesting pricing models and interesting business models like we've done in Europe.

是的，Margaret，我再補充一下。我們已經向 CMS 提交了 Medicare 的申請，所以應該會在秋季某個時候有結果，屆時我們就能把那些病患轉移過來，但從 G5 到 G6 的定價不會改變。我回到我們在事先準備的發言中所說的。我們會把這次新產品的機會用來嘗試擴大可及性，觸及更多病患。而且在我們能讓付款方更容易、也讓我們更容易管理的前提下，我們當然會考慮有趣的定價模式與有趣的商業模式，就像我們在歐洲做過的一樣。

Got it. And then as a follow-up to add to some of the commentary, I think, Steve had on new integrated solutions. Can you give us any clarity for what you may have ruled out before that now is back on the table and why is it back on the table? Is it because someone else's coming up to you guys asking for that or some of the discussions from JDRF, et cetera?

了解。接著作為追問，延伸一些評論，我想是 Steve 對新的整合式解決方案所提到的。你們能否更清楚說明：之前你們可能排除、但現在又重新納入考量的是哪些，以及為什麼又回到檯面上？是因為有其他人來找你們提出這樣的需求，或是因為來自 JDRF 等的討論之類的原因嗎？

Sorry, I thought you said NASDAQ. What? Can you...

抱歉，我以為你說的是 NASDAQ。什麼？你能不能……

Effectively ruled anything out? Have we ruled ...

基本上有排除掉任何事情嗎？我們有排除……

Yes, things that were ruled out and maybe are back on the table right now.

是的，就是那些曾被排除、但現在可能又重新回到檯面上的事情。

No, just I mean, there are certain product configurations that living in a Class 3 world may not have made sense because in the Class 3 world they might have taken 9 to 12 months for a review cycle, that, that review cycle could be expedited. I would say if anything, there are some things we're looking at on the software side, integrations with partners on the software side, et cetera, that may actually be put back on the table. So much like the payer process though, discussions with partners and product plans are still evolving as the G6 approval was just recent.

沒有，我的意思是，有些產品配置在第三類（Class 3）的環境下可能不太合理，因為在 Class 3 的世界裡，審查週期可能需要 9 到 12 個月，而那個審查週期現在可能可以加速。我會說如果有的話，我們正在看一些軟體端的事情，例如與合作夥伴在軟體端的整合等等，這些可能確實會重新被納入考量。不過就像付款方流程一樣，與合作夥伴的討論以及產品規劃仍在演進中，因為 G6 的核准也才剛發生不久。

And the next question comes from JP McKim from Piper Jaffray.

下一個問題來自 Piper Jaffray 的 JP McKim。

I just wanted to first touch this broadly on guidance and then just want on the pricing as well. Given the 2 good quarters you put up in Q4 and Q1 this year, obviously, both 30% and just the back half of the year is a little slower than that. So I just want to -- how should we interpret that? Is that more of just there's a lot of moving pieces, you want to remain conservative? Or is it the G6 has caused a delay in Q2 that you need to counter for? I mean, how should we just interpret the implied back half growth rates?

我想先從整體指引談起，然後也想問一下定價。鑑於你們在今年 Q4 和 Q1 交出兩個不錯的季度表現，顯然都在 30% 左右，而下半年看起來比那個速度稍微慢一些。所以我想問——我們應該如何解讀這件事？這比較像是因為變動因素很多、你們想維持保守？還是說 G6 在 Q2 造成了延遲，你們需要把這個因素抵消進去？也就是說，我們應該如何解讀隱含的下半年成長率？

Sure. It's a good question. This is Quentin here. I think a couple of things to keep in mind, and again, these are consistent with what we've been talking about as we came into the year. Certainly, we have pricing considerations that we're trying to dial into that guidance. We don't want to get ahead of ourselves here. If we are able to navigate those well, then I think we'd contemplate them effectively in the forward-looking Q3, Q4 time frame and hopefully, they won't materialize. There's upside to that number. But we're not going to get ahead of ourselves at this point. At the same time, we've got some stiff competition that is out there. And so we're contemplating that as well. The competitive landscape continues to evolve, and as we navigate it, we're very confident in our ability to execute well so we want to be mindful of it. So, again, just not getting ahead of ourselves. I would you in Q2, we basically reaffirmed where the Street's at, at this point in time. And I think the thing to keep in mind there is -- there is this aspect of needing to defer some of the revenue as folks wait for the G6 device to come out. We have folks who are currently buying the G5 transmitter. We're going to upgrade them free of charge, which does result in a deferral within the quarter. And so that's going to weigh on the revenue number in the quarter and that's why if you look at sequential revenue trends, you may not be able to make sense of Q2, but you got to keep that in mind. But I think if you adjust for that, then your numbers will make sense, your modeling will make sense. But those are going to be the things that we certainly consider as we look at Q2, Q3 and Q4.

好的。這是個好問題。我是 Quentin。我想有幾點需要記住，而且再次強調，這些都與我們在進入今年時一直在談的內容一致。當然，我們有一些定價方面的考量，正在把它們納入並校準到指引之中。我們不想在這裡操之過急。如果我們能妥善處理這些問題，那我認為我們會在前瞻性的 Q3、Q4 時間框架中有效地把它們納入考量，而且希望它們不會真正發生。那個數字是有上行空間的。但我們目前不會操之過急。同時，市場上也存在一些強勁的競爭。因此我們也把這點納入考量。競爭格局仍在演變，而在我們應對的過程中，我們對自身良好執行的能力非常有信心，但我們也希望保持警覺。所以，再次強調，就是不要操之過急。我會說在 Q2，我們基本上在此時此刻重申了華爾街（市場共識）目前的水準。而那裡需要記住的一點是——有一個面向是：當大家在等待 G6 裝置上市時，我們需要遞延部分營收。目前仍有人在購買 G5 發射器。我們會免費為他們升級，這確實會導致當季出現遞延。因此這會對當季的營收數字造成壓力，這也是為什麼如果你看連續季度的營收趨勢，可能會覺得 Q2 不太合理，但你必須把這點納入考量。但我認為如果你把這個因素調整進去，你的數字就會合理，你的模型也會合理。不過這些就是我們在看 Q2、Q3 和 Q4 時，確實會納入考量的因素。

That's helpful. And then just one on pricing is when you made the decision to kind of keep the flat sensor price, is that something that you're taking to the payers, "Hey, we're saving you money and we got a better system," or was it the payers are pushing a little back harder on price? And then, Kevin, just broadly, when you think about expanding delay for the 14-day wear, is that part of your strategy just to bring pricing down over time as you get to 14-day and then you keep it around the same price as well? Is that kind of a gradual way to bring down cost and increase penetration?

這很有幫助。接著再問一個關於定價：當你們決定維持感測器價格持平時，這是你們拿去跟付款方溝通的說法——「我們幫你們省錢，而且我們有更好的系統」——還是其實是付款方在價格上更強硬地反推？另外，Kevin，更廣泛地問一下，當你們考慮把配戴期擴展到 14 天時，這是否是你們策略的一部分：隨著達到 14 天配戴，逐步把定價往下調，然後也把價格維持在差不多的水準？這是否是一種逐步降低成本並提高滲透率的方法？

Yes, so this is Steve. Just to be clear, we didn't say that we've made the decision to bring sensor pricing down. What we said is for purposes of our guidance and our internal modeling, we're assuming that average revenue per patient per year remains static. What we said in Kevin's remarks, there is some upside to the extent as we go back to the payers and negotiate the Gen 6 pricing and contracts that if we maintain a per day pricing similar to G5 that we get a slight uptick. But it's also critically important to remember that we might use and we've said this, I've said this at conferences for probably years now, that we would use some of that potential upside, certainly, if we can negotiate with the payers a little bit lower price per day in exchange for improved access, improved access in the pharmacy, improved access, as Kevin mentioned, for potential bundled solutions, that intensive type 2s to bundle or to our coverage universe. So there's a lot of moving parts here, but it wouldn't be accurate to say that we made the decision to just arbitrarily lower our price down to a Gen 5 pricing. That's not what we're saying.

是的，所以我是 Steve。先澄清一下，我們並沒有說我們已經做出把感測器定價調降的決定。我們說的是，為了我們的財測指引與內部模型，我們假設每位病患每年的平均收入維持不變。我們在 Kevin 的發言中提到的是，當我們回到付款方並就第六代（Gen 6）的定價與合約進行談判時，如果我們能維持與 G5 類似的每日定價，就會有些許上行空間。但同樣也非常重要的是要記住，我們可能會使用——而且我們也說過，我在會議上大概好幾年來一直都在說——我們會把部分潛在的上行空間拿來用，當然，如果我們能與付款方談到稍微更低的每日價格，以換取更好的可近性、更好的藥局通路可近性，以及如 Kevin 所提到的、針對潛在的綑綁式方案（bundled solutions）讓需要密集治療的第二型糖尿病患者納入綑綁或納入我們的給付覆蓋範圍。所以這裡有很多變動因素，但說我們已經做出決定、只是任意把價格降到第五代（Gen 5）的定價水準，並不準確。我們不是這個意思。

What we said is we'd model that as we work through all this. What I'd add on the 14-day sensor and we're shooting for 14-day sensors and we've done for a long time, that's something that we've heard from patients for a long time that they would like to wear fewer sensors. That plays into a lower cost model, certainly. We have to really evaluate what that does on the revenue side and the cost side. I can give you a perfect example of 2 things we have to consider. Number 1, we have to consider the special controls that have now been put out by the FDA as to how the system performs. And while we're confident in our system at 14 days will perform well enough, we haven't run the study yet, and we need to see how the data looks. We're very comfortable with where we are with 10. We will need to run a study out to 14 days. But number 2, just a very simple thing to consider is, for example, DexCom is really helpful to patients with respect to warranty. If that sensor falls off at day 4, we ship you a new one every time. Are we going to ship a new one at day 12? I have never -- I've a worn a lot of sensors, I've never had anything last 14 days on my own body. So I don't know how that works yet, and we have to model that out certainly. When we develop new products in a marketing program, we have 4 pillars within our development team. And the first one is performance, we will never compromise sensor performance; the second one is convenience, and you can see what we've done with G6 as you talk to people when they use it; and the third one is cost, and G6, ultimately, will cost less for us to manufacture than G5 and not just because of the 10-day life versus the 7. So we consider all those things as we go forward.

我們說的是，在把這些事情逐一推進的過程中，我們會在模型中這樣假設。另外我想補充關於 14 天感測器——我們的目標是 14 天感測器，而且我們追求這個目標已經很久了——這也是我們長期以來從病患那裡聽到的，他們希望能戴更少的感測器。這當然會導向較低成本的模式。我們必須仔細評估這對營收端與成本端各自會造成什麼影響。我可以給你一個很好的例子，說明我們必須考量的兩件事。第一，我們必須考量 FDA 現在已經發布的特殊管制（special controls），也就是系統表現必須符合的要求。雖然我們對於系統在 14 天時能有足夠好的表現很有信心，但我們還沒做那個研究，我們需要看看數據會長什麼樣子。我們對 10 天的狀況非常有把握。我們需要把研究做到 14 天。但第二個要考量的、很簡單的一點是，例如，DexCom 在保固方面對病患非常有幫助。如果感測器在第 4 天就掉了，我們每次都會寄一個新的給你。那如果是在第 12 天掉了，我們也要寄新的嗎？我從來——我自己戴過很多感測器，我從來沒有任何一個在我身上能撐到 14 天。所以我還不知道那會怎麼運作，而我們當然必須把它納入模型評估。當我們在行銷計畫中開發新產品時，我們的開發團隊有 4 大支柱。第一是效能，我們絕不會在感測器效能上妥協；第二是便利性，你跟使用者聊聊他們用 G6 的感受，就能看到我們做了什麼；第三是成本，而 G6 最終對我們而言的製造成本會比 G5 更低，而且不只是因為 10 天壽命相對於 7 天。

And our next question comes from Robbie Marcus with JPMorgan.

下一個問題來自摩根大通（JPMorgan）的 Robbie Marcus。

Quentin, maybe I could just start with the guidance question. When you gave 2018 guidance and the first quarter guidance on the fourth quarter call, it was for $166 million to $170 million. You ended up doing almost $20 million better than that. So as you look at the rest of the year, it's factoring in for the back half 15% growth. Is that sort of the way you want people to think of your exit rate into 2019? Or is that more a conservative nature ahead of one of the biggest product launches and you just -- that you don't want people to read too much into it going into '19 from that?

Quentin，我想先從財測指引的問題開始。你們在第四季電話會議上給出的 2018 年指引以及第一季指引是 1.66 億到 1.70 億美元。結果你們最後做得比那個高了將近 2,000 萬美元。所以當你看今年剩下的時間，你們在下半年等於是納入了 15% 的成長。這是否就是你希望大家用來思考你們進入 2019 年的退出速度（exit rate）的方式？還是說，這更多是因為在公司史上最大產品上市前採取較保守的態度，你只是——不希望大家用這個去過度解讀 2019 年？

Yes, and I think it's more the latter at this point in time. We're very early in the stages of what is the biggest launch in the history of our company. In the midst of an environment that certainly pricing has come under some pressure, we've navigated that quite effectively and early indications are that we're going to continue to be able to do that effectively, particularly with a product that has a premium feature set with it like G6 does. So we're very bullish, very excited about what we're seeing, but at the same time aren't going to get ahead of ourselves and introduce any unnecessary risk to the expectations. If we can navigate it well in the back half of the year, those growth rates are going to be in excess of 15% that you point out because you're right, the back half in our guidance would imply roughly 15% with the headwinds contemplated. So it's more the latter of what you're speaking about there.

是的，我認為目前更偏向後者。我們正處於公司史上最大一次上市的非常早期階段。在一個定價確實承受一些壓力的環境中，我們已經相當有效地應對，而早期跡象顯示我們將能持續有效地做到這一點，特別是像 G6 這樣具備高階功能組合（premium feature set）的產品。所以我們非常看多、也非常興奮於我們所看到的情況，但同時我們不會操之過急，去為市場預期引入任何不必要的風險。如果我們能在下半年把它執行好，那些成長率會高於你提到的 15%，因為你說得沒錯，我們的指引在考量逆風因素後，下半年大約隱含 15% 左右。所以更接近你所說的後者。

And then as you try and bridge the gap between what you gave for guidance in the first quarter and what you ultimately did, can you help give us a couple of the different buckets? You mentioned Medicare, you mentioned international. Can you give us a sense of how Medicare improved from the fourth quarter and what sort of patient growth you're seeing? Because it's such a substantial difference. Any help would be appreciated.

另外，當你試著把第一季指引與最終實際結果之間的差距做橋接時，你能否幫我們提供幾個不同的構成項目？你提到了 Medicare，也提到了國際市場。你能否讓我們了解 Medicare 相較第四季改善了多少，以及你們看到的病患成長大概是什麼樣子？因為差異真的非常大。任何協助都會很感謝。

No, no, it's a good question and a fair question here. I would tell you new patient additions, Medicare both continue to perform incredibly well. We do see a slight uptick in that Medicare business as we anticipated. I think you go back to Q1, and the big thing that, frankly, we couldn't spend a lot of time talking about on the call, but we were deep into the discussions with the FDA at the time. We knew that the G6 approval could be imminent. It could have been any day at that point in time, but that wasn't something we could get out front and talk about, particularly with the change in the pathway going to Class II. And so we knew that if there was an approval, say 1 day or 2 days after that earnings announcement, there was going to be risk in that Q1 number and we didn't want to introduce that risk. We wanted to make sure we were mindful of that. And so you can chalk up roughly half the beat to that aspect alone. But that's then leaves the other half, the true operational performance, and that really is across the board. It's in our commercial business, it's in the Medicare business and it's in the international business. So I would tell you the underlying volumes performed very well. We were very happy with what we saw. But at the same time, we were trying to contemplate the fact that we could have a very early G6 approval and not be dealing with the negative surprise. So that accounts for some of the beat as well.

不，不，這是個好問題，也是個合理的問題。我會說，新病患新增量、以及 Medicare 這兩者都持續表現得非常好。我們確實看到 Medicare 業務如我們預期般有些微上升。我想你回到第一季，坦白說，當時有一件我們在電話會議上無法花太多時間談的事：我們正與 FDA 進行深入討論。我們知道 G6 的核准可能迫在眉睫。在那個時間點，它可能任何一天就會發生，但這不是我們能提前對外談的事情，特別是在轉為 Class II 路徑的變更之下。因此我們知道，如果核准是在財報公告後 1 天或 2 天發生，那第一季數字就會有風險，而我們不想引入那個風險。我們希望確保對此保持審慎。所以你可以把大約一半的超預期（beat）歸因於單就這個因素。但那之後還剩下另一半，也就是真正的營運表現，而那其實是全面性的。它來自我們的商業業務、Medicare 業務以及國際業務。所以我會說，底層出貨量／使用量表現非常好。我們對所看到的結果非常滿意。但同時，我們也在考量我們可能會非常早就拿到 G6 核准、而不希望面對負面意外的情況。所以這也解釋了部分超預期的原因。

And the next question comes from Kyle Rose from Canaccord.

下一個問題來自 Canaccord 的 Kyle Rose。

I just wanted to take a step back and talk about the G6 and what you really think of as the biggest step forward from a product standpoint? I think we all understand the accuracy and then the no-calibration features, but when you think about the smaller on body form factor, the new alerts and alarms as well as the applicator, are there any of those that you think really stand out as far as adding value that you think investors don't really truly appreciate?

我想先退一步，談談 G6，從產品角度來看，您認為最大的進展究竟是什麼？我想大家都理解其準確度以及免校準功能，但當您想到更小的貼身外形、新的提醒與警報，以及施用器時，這些之中是否有任何一項在增值方面特別突出，而您認為投資人其實沒有真正充分理解？

This is Kevin, I'll take that. I will let the other guys chip in if they've heard anything else. I would tell you the thing that I have heard the most about is the insertion system and the ease of use. Every text message I've got from a person in the limited launch study has focused immediately on the insertion device. They love no calibration at all. They say that's very awesome, but the insertion of this system and ease of use is such a step up, it's almost indescribable. And as we look at new patients, patients foreign to DexCom who haven't used it before, when they went into a physician's office and saw the DexCom insertion device, I can you tell there is some trepidation because it looks like another great big needle that you're going to stick in me. With this device, it is push a button. We saw a video of a child who put on their first G6 today and she hit the button and said, "I don't feel anything. Is it on?" And it was. And that experience from a new to CGM patient, we think is going to be very, very important and very, very good for people to use. But I don't think you can ignore the other 2 things either. No calibrations with continued DexCom performance puts us in a class that nobody else is. And patients will rely on this, and really we think it can lead to much stronger compliance and possibly increased utilization over time because if they can look at that number and rely on it and patients don't have to stick their finger, you truly can eliminate fingersticks from the equation. All around, we're just -- we couldn't be more excited about a product launch than we are this one.

我是 Kevin，我來回答。如果其他人還聽到什麼，我也會讓他們補充。我可以告訴你，我聽到最多的就是插入系統以及使用的便利性。我從參與有限上市研究的人收到的每一則簡訊，第一時間都在談插入裝置。他們非常喜歡完全免校準。他們說那非常棒，但這套系統的插入方式與易用性提升之大，幾乎難以形容。而當我們看新病患、也就是以前沒用過 DexCom 的病患時，他們走進醫師診間看到 DexCom 的插入裝置，我可以告訴你，會有些猶豫，因為看起來像又一根很大的針要扎進我身體。但用這個裝置，只要按一下按鈕。我們看到一段影片，一個孩子今天第一次戴上 G6，她按下按鈕後說：「我什麼都沒感覺。有裝上嗎？」結果確實已經裝上了。而對於第一次使用 CGM 的病患來說，我們認為這樣的體驗會非常、非常重要，也會非常、非常有利於大家使用。但我也不認為可以忽視另外兩件事。在維持 DexCom 表現的前提下免校準，讓我們處於無人能及的級別。病患會依賴它；我們也確實認為，這能帶來更強的依從性，並可能隨時間推移提高使用率，因為如果他們能看著那個數字並信任它、而且不必扎手指，你就真的能把指尖採血從等式中剔除。總之，我們就是——對這次產品上市的興奮程度，前所未有。

Great. And then just 1 follow-up question on guidance. I think, and Quentin, you alluded to it a little bit in some of your remarks to a previous question, but I think at the beginning on the Q4 call when you're talking about the full year, you had contemplated, I think, somewhere around your 10% pricing in competitive headwinds and the guidance. I guess, is that still embedded in the updated guidance here? And is that kind of how we should think about the potential upside if those don't play out in the second half of the year, which we kind of have a 10% jump ball there?

很好。接著關於財測我還有 1 個追問。我想——Quentin，你在回答前一個問題時的部分評論也稍微提到——但我記得在 Q4 電話會議一開始談全年時，你們在財測中曾考量到大約 10% 的定價競爭逆風。我想問的是：這一點是否仍然包含在這次更新後的財測裡？如果今年下半年那些情況沒有發生——我們大概有個 10% 的不確定性——那我們是否應該把它視為潛在上行空間？

Yes. No change there. We continue to assume the same type of headwinds and, again, if we could navigate those well, then fantastic.

是的。那方面沒有改變。我們仍然假設同樣類型的逆風；而且再說一次，如果我們能妥善因應，那就太好了。

And our next question comes from David Lewis from Morgan Stanley.

下一個問題來自 Morgan Stanley 的 David Lewis。

Quentin, a couple of fast questions for you. Just -- for the quarter, obviously, you're raising by the incremental raise. If you had to say what is driving that incrementally, would you say it's just the broader, stronger volumes U.S. and ex-U. S. Is that sort of the principal factor?

Quentin，我有幾個很快的問題。就這一季而言，很明顯你們把指引上調了這個增量。如果要你說明是什麼在推動這個增量，你會說主要就是美國與美國以外市場更廣泛、更強勁的出貨量嗎？這算是主要因素嗎？

Yes, it is.

是的，沒錯。

Okay. And then, Kevin, I know it's somewhat early, but if you think about the ICGM guidelines relative to your pipeline, have you think about the timeline around Verily Gen 2 and receiver optional? If you have an updated timeline for receiver optional this year? And is it too early to sort of say that the Verily Gen 2 probably comes earlier in light of the updated guidance?

好的。接著 Kevin，我知道現在可能還早，但如果你把 ICGM 指引與你們的產品管線放在一起看，你是否有思考 Verily 第二代以及「接收器可選」的時程？今年「接收器可選」是否有更新後的時間表？另外，考量到更新後的財測，現在就判斷 Verily 第二代可能會更早推出，是否還太早？

This is Kevin. David, I'll take that. With respect to receiver optional, we're now putting plans together to get that filed and that really consists of a lot of risk mitigation and human factor study. It's very apparent the FDA is willing to go there, and so we're contemplating that here now. We've had great success with that program in Europe. Less than, I think, about 40% of our patients, even where we have reimbursement, are purchasing receivers. So if we can eliminate some of that upfront cost, we will certainly provide that opportunity to patients here. With respect to Verily Gen 2, there is still a lot of R going on in that R&D process, and I think you can see us go faster. What we have to balance and it's a little bit too much fun here. I got to be honest with you, how many new things can we put in it as far as going faster? Because there is really tremendous amount of new technology within the walls of our R&D group over there with respect to membrane, technology, wires, algorithms, all sorts of things. And we have to really sit down and discipline ourselves. Our goal right now is 2020 and 2020 contemplates many, many changes. For example, this insertion device we've just spent tens of millions of dollars engineering, again, on the market is replaced in Verily Gen 2 and we have to have something every bit as elegant and every bit as seamless for a patient to use. So some of that work has to be done. We'll stick with our 2020 goal. If we find the opportunity to go faster, David, we absolutely would, but that's going to be as big a transition manufacturing as this one. So we will just play it by year.

我是 Kevin。David，我來回答。關於「接收器可選」，我們現在正在制定計畫以提交申請，而這主要包含大量的風險緩解與人因研究。很明顯 FDA 願意往這個方向走，所以我們現在正在評估。我們在歐洲的這個計畫非常成功。即使在有給付的地方，我想不到 40% 的病患會購買接收器。因此，如果我們能降低部分前期成本，我們當然會在這裡也提供病患這個選項。至於 Verily 第二代，那個研發流程仍有大量研發工作在進行中，我想你也看得出來我們可以加快腳步。我們必須取得平衡，而且這裡有點太有趣了。老實跟你說，我們到底能在「加快」的同時塞進多少新東西？因為在我們那邊的研發團隊內部，關於膜材、技術、導線、演算法等各方面，都有非常大量的新技術。我們必須坐下來，嚴格自律。我們目前的目標是 2020 年，而 2020 年的規劃包含非常、非常多的變更。例如，我們剛花了數千萬美元工程設計、目前已上市的這個插入裝置，在 Verily 第二代中會被替換掉；而我們必須有一個同樣優雅、同樣無縫、讓病患使用起來同樣順暢的方案。所以其中一些工作必須完成。我們會維持 2020 年的目標。如果我們發現有機會更快，David，我們絕對會，但那將會是一次跟這次一樣重大的製造轉換。所以我們就按年度來推進。

And the next question comes from Danielle Antalffy from Leerink Partners.

下一個問題來自 Leerink Partners 的 Danielle Antalffy。

Just, Quentin, a question for you on all the pricing commentary. Can you talk a little bit about what that means for operating margins longer term? I know there is a lot of moving parts here, but I'd love to get your view on how you're thinking about it relatively new to the company, balancing this whole competitive pricing dynamic with margin expansion long term?

Quentin，我想就所有定價方面的評論問你一個問題。你能談談這對長期營業利益率意味著什麼嗎？我知道這裡有很多變動因素，但我很想聽聽你作為相對較新加入公司的人，如何在長期利益率擴張的目標下，權衡整體競爭性定價動態的看法？

Yes, well, I think, absent any pricing pressure, we're still focused on the fact that we need to drive operating margin improvement over the course of time. But then you draw on top of that the fact there is going to be pricing pressure over time. It only accelerates the need to get focused here. There are a lot of really interesting opportunities in front of us. Many things that the company has already identified and has plans in place to reduce cost throughout the business as we head into the future or to produce the product, and you're going to see some of those things as we get closer to the end of the year and start to roll into '19 and further. You take the Mesa, Arizona manufacturing facility, for example, a world-class operation that puts [and stood up] by the team that will handle the capacity of this organization for years into the future. And once we get into there and really start to leverage that overhead and put automation into there, you're going to see meaningful reductions in the cost profile of the business. And then you get into some of the things that the R&D team has done to engineer cost out of the system without sacrificing the quality and the accuracy of the sensor that we already have, you're talking about meaningful levers that are going to be able to come back. Any potential price headwinds that are out there that are going to let us compete head-to-head in any market that we need to from a price perspective, if that's where it ultimately goes, or you're going to drop it straight through to the bottom line and start to improve the operating margin profile. So we're excited about those kinds of things. And then you get into the operating expense profile of the business and we're always going to be an innovator. R&D is going to be an area that we're going to spend meaningfully in. We want to out-innovate our competition and we've proven that we can do that. We believe we could continue to do that into the future. So we'll probably always be outpaced in terms of spending relative to our peer group there. But you get into the G&A profile and that's where we have meaningful opportunity to really think differently in terms of how we manage the business today, in terms of automation, taking things online versus the very manual nature that we have today, and those are all kind of right in the crosshairs of what we're looking to do as we think about becoming more efficient into the future. So we're focused on operating margin, no matter what. The pricing pressure in the marketplace only accelerates that focus, but there are meaningful levers and many open in front us to address any of those concerns.

是的，我想，在沒有任何定價壓力的情況下，我們仍然專注於：隨著時間推進，我們需要推動營業利益率的改善。但接著你再疊加一個事實：隨著時間推移，將會出現定價壓力。這只會加速我們必須在這裡聚焦的必要性。我們面前有很多非常有意思的機會。公司已經辨識出許多事項，並且已經制定計畫，在我們邁向未來、或在產品製造過程中，降低整體業務成本；當我們接近年底並開始進入2019年及之後，你會看到其中一些措施。以亞利桑那州梅薩（Mesa, Arizona）的製造廠為例，這是一個世界級的營運，由團隊建立並投入運作，將在未來多年承擔本組織的產能需求。一旦我們進入那裡並真正開始槓桿化那些間接費用、並導入自動化，你將會看到公司成本結構出現顯著下降。接著再看研發團隊所做的一些事情：在不犧牲我們既有感測器品質與準確度的前提下，把成本從系統中「設計」出去；這些都是能夠回收的重大槓桿。任何可能出現的價格逆風，都能讓我們在需要的任何市場中，就價格面與對手正面競爭——如果最後真的走到那一步——或者你也可以把它直接反映到損益底線，開始改善營業利益率的輪廓。所以我們對這類事情感到振奮。然後再談到公司的營運費用結構，我們永遠都會是創新者。研發將會是我們會投入相當資源的領域。我們希望在創新上超越競爭對手，而我們也已證明我們做得到。我們相信未來也能持續做到。因此在該領域，相較同業群，我們的支出可能一直都會更高。但談到一般與管理（G&A）費用結構，那裡我們有很大的機會，去真正以不同方式思考我們今天如何管理業務：例如自動化、把事情搬到線上，而不是像今天這樣高度仰賴人工；這些都是我們在思考未來如何變得更有效率時，正在重點關注的方向。所以無論如何，我們都專注於營業利益率。市場上的定價壓力只會加速這個聚焦，但我們有實質的槓桿，而且前方有許多可用的手段，來回應任何這些疑慮。

Perfect. And just a question on international market dynamics, another strong quarter there. Wondering if you could talk a little bit about market share shift type 1s versus type 2s? What you're seeing there specifically in the markets like Germany where you have reimbursement coverage and you're competing with all the relevant players?

很好。另外想問一下國際市場的動態，那邊又是一個強勁的季度。想請你談談第一型（type 1）相對於第二型（type 2）的市占率移轉情況？特別是在像德國這種有給付（reimbursement）覆蓋、而且你們要與所有相關玩家競爭的市場，你們具體看到了什麼？

Danielle, this is Kevin. Our product has primarily been used in the type 1 market in our European markets where it's reimbursed. With respect to competition, for example, in Germany or the Nordics where we have good reimbursement, we're very, very strong and we're absolutely getting a number of patients. There is broad-based growth across all those markets, but it is primarily intensive management area, not in those non-intensive managed patients or even down into type 2 yet. We haven't reached down that far.

Danielle，我是Kevin。在我們有給付的歐洲市場，我們的產品主要用於第一型市場。就競爭而言，例如在德國或北歐地區，我們有良好的給付，我們非常、非常強勢，而且確實正在吸引大量病患。所有這些市場都呈現廣泛的成長，但主要仍是在強化管理（intensive management）領域，而不是那些非強化管理的病患，甚至也還沒有下探到第二型。我們還沒有下探到那麼深。

And the next question comes from Jayson Bedford from Raymond James.

下一個問題來自Raymond James的Jayson Bedford。

I apologize if these are redundant, but you started off the year, I think you mentioned that the installed base would grow faster than sales. Given the lift in the sales guidance here, do you still expect the installed base to grow faster than sales in '18?

如果這些問題有重複我先道歉，但你們在年初時，我記得你提到裝機基礎（installed base）的成長會快於銷售額。鑑於你們這次上調了銷售指引，你們仍然預期2018年裝機基礎會快於銷售額成長嗎？

Yes, we do. And the reason for that is because you have some mix pressure that are contemplated from a dollar revenue perspective, right. So as the Medicare business outpaces the rest of the business, as the international business continues to grow faster than our U.S. business, you're going to see some mix pressure, which often means the installed base is growing faster while the dollar revenue lags it a bit.

是的，我們仍然這麼認為。原因是，從美元營收的角度來看，你會有一些我們已納入考量的組合（mix）壓力，對吧。因此，當Medicare業務的成長速度超過其他業務、當國際業務持續比我們美國業務成長更快時，你會看到一些組合壓力；這通常意味著裝機基礎成長更快，而美元營收會稍微落後一些。

Okay. And then just there's been a bit of commentary here on the 14-day wear. When will you run the study for the 14 wear device? And just can you remind us, Verily 1 think employ the 14-day sensor just in terms of potential time line on that?

好的。另外，這裡對於14天配戴（14-day wear）有一些評論。你們何時會針對14天配戴的裝置進行研究？另外也請提醒我們，Verily 1我想是採用14天感測器，就其潛在時間表而言是怎麼樣？

We have not communicated anything and we won't. Certainly, we'd run the trial this year, and we're in the middle of discussing the scope of that trial internally and then ultimately presenting it to the FDA as part of the IDE to get there. The special controls really requires us to do a lot of statistical setting to determine exactly what type sample of patients we need, how many points we need in the study and all those criteria. So we're early in that. We'd expect to run that in the back half of 2018.

我們沒有對外溝通任何內容，而且也不會。當然，我們會在今年進行試驗；我們目前正在內部討論該試驗的範圍，之後最終會把它作為IDE的一部分提交給FDA，以推進到那一步。特殊管制（special controls）確實要求我們做大量的統計設定，以精確決定我們需要什麼樣的病患樣本、研究中需要多少數據點，以及所有那些標準。所以我們還在很早期的階段。我們預期會在2018年下半年進行。

And the next question comes from Doug Schenkel from Cowen & Company.

下一個問題來自Cowen & Company的Doug Schenkel。

This is Ryan on for Doug. You noted that you expect the sensor utilization for G6 to remain similar versus G5. Why wouldn't, on average, patients end up using more sensors per year with G6 given the [4] shutoff?

我是代Doug提問的Ryan。你們提到你們預期G6的感測器使用率（sensor utilization）會與G5大致相同。考量到[4]關閉（shutoff），為什麼平均而言病患不會在G6上每年使用更多感測器？

What we said is that's what we've modeled. We haven't said that's necessarily what we anticipate. Remember, with respect to sensor utilization, that can be defined as how many sensors a year does a patient wear and how many do they utilize? And that's a function of 2 things: How many days they wear their sensor and if they take a break in between sensor sessions. That's sometimes driven by economics, that's sometimes driven by just the nature of patients. As I've talked to several parents whose kids, for example, if they can get away from their sensor for a little while and not be followed, they will do so. With the shutoff in theory, you're absolutely right. In theory, if patients wear sensors all the time and they were extending the wear, they would buy and purchase more sensors. But for purposes of our modeling, we've kept everything consistent for now until we know more. It's just really early. We don't even have 1,000 patients on G6, and we haven't even had anybody's sensor run out except for my 10-day sensor and I'm on #2. So there you go.

我們說的是：那是我們在模型中的假設。我們並沒有說那一定是我們所預期會發生的結果。請記得，就感測器使用率而言，它可以被定義為：一位病患一年配戴多少顆感測器，以及他們實際使用多少顆？而這取決於兩件事：他們每次配戴感測器的天數，以及他們在兩次配戴之間是否會休息一段時間。有時候這是由經濟因素驅動，有時候只是由病患本身的習慣所驅動。我曾和幾位家長聊過，例如他們的小孩如果能暫時不用感測器、不要被追蹤一段時間，他們就會這麼做。就關閉機制而言，理論上你完全正確。理論上，如果病患一直都配戴感測器，而且他們原本在延長配戴時間，那他們就會購買並使用更多感測器。但就我們建模的目的而言，在我們了解更多之前，我們目前先把所有假設維持一致。現在真的還太早。我們甚至還沒有1,000位病患使用G6，而且除了我自己的10天感測器用完之外，還沒有人遇到感測器到期；而我現在在用第2顆。所以就是這樣。

Got it. That's helpful. And then maybe just for Q2, can you give any more color on how big of a revenue headwind you're expecting from the G6 upgrade program on transmitters? Assuming on a normalized basis, you will be growing around 20% sequentially if the delta to where the Street is, which I think you mentioned was primarily due to that. That's a pretty large number relative to, I think, where the Street is would be about 11% sequential growth. Any more color you can provide there?

了解。這很有幫助。那麼也許就第二季而言，你能否再多提供一些細節，說明你們預期 G6 發射器升級計畫會帶來多大的營收逆風？假設在常態化基礎下，若以你們與華爾街預期之間的差距來看，我想你剛才提到主要就是因為這個因素，你們的季增可能約 20%。相較之下，這個數字相當大，因為我認為華爾街那邊大概預期是約 11% 的季增。你能否再多提供一些說明？

No, I think you're thinking about it the right way. We understand what the historical seasonality would imply in the quarter. We've tried to model to our best, what we think the potential impact could be both from the deferral as well as from folks who just may choose to wait to make the purchase. So, again, there's no need for us to get ahead of ourselves here and try to not contemplate these kinds of headwinds when they know they do exist or believe that we can fully overcome them. We will navigate it as well as we can, but some of that revenue may come back in Q3 versus getting back here in Q2 given the fact that the launch will be late in quarter.

不，我認為你的思考方向是對的。我們理解歷史季節性在該季度通常意味著什麼。我們已盡最大努力建模，評估我們認為可能的影響，包含遞延以及有些人可能選擇等待再購買。所以，再次強調，我們沒有必要在這裡操之過急，或試圖不去考量這些我們知道確實存在的逆風，或認為我們可以完全克服它們。我們會盡力去應對，但由於上市會在季度偏後段，部分營收可能會在第三季回補，而不是在第二季回來。

And the next question comes from Joanne Wuensch from BMO Capital Markets.

下一個問題來自 BMO Capital Markets 的 Joanne Wuensch。

Very nice quarter, by the way. Can we just spend a minute talking about the competitive landscape? We're now 2, maybe 3 quarters into the launch of Libre and you have Medtronic approval intraquarter for its standalone sensor. You're closest to this than anybody else. What are you seeing?

順帶一提，這一季表現非常好。我們能否花一點時間談談競爭態勢？我們現在已經進入 Libre 上市後的第 2、也許第 3 個季度，而且 Medtronic 也在季度中取得其獨立感測器的核准。你比任何人都更貼近市場。你看到了什麼？

Well, we just posted 30% growth.

嗯，我們剛公布了 30% 的成長。

That's why I'm asking.

所以我才會問。

I guess, I can start there. I'll let the other guys comment and then I'll go back to what I said earlier. We've not seen DexCom losing patients to Libre. Our patients haven't left. We have heard that the physicians who appreciate the ease of writing that prescription, but that's really all that we've heard. We've had and need to have great growth with respect to Medtronic's launch. Regarding Connect, it's a sensor that you calibrate multiple times. As I've been out in the field, I've not heard excitement in the physician's office for them. And, I guess, the only point I can compare it to is where we have gone head-to-head with them in Australia, for example, the Australian government approved CGM reimbursement not long ago and Medtronic and us came in together and Medtronic priced significantly lower than us, and we have over 70% share. So I don't view -- that has not been a factor in our business up to this point in time, but we don't see it as being one, but we're wary and we're mindful, and we will certainly look at everything that is out there. Steve, do you have anything to add?

我想我可以從那裡開始。我會讓其他人補充，然後我再回到我先前說的。我們沒有看到 DexCom 的病患流失到 Libre。我們的病患沒有離開。我們聽到的是，醫師很欣賞開立那個處方的便利性，但我們真正聽到的大概也就這些。至於 Medtronic 的上市，我們一直有、也需要有很好的成長。關於 Connect，它是一個需要多次校準的感測器。我在第一線跑市場時，沒有在醫師診所聽到他們對此感到興奮。我想唯一可以比較的是，例如我們在澳洲與他們正面交鋒的情況：澳洲政府不久前核准了 CGM 給付，Medtronic 和我們同時進入市場，Medtronic 的定價明顯低於我們，但我們仍然拿下超過 70% 的市占。所以我不認為——到目前為止，那並未成為影響我們業務的因素；我們也不認為它會成為因素，但我們會保持警覺、保持關注，並且一定會檢視市場上所有的動態。Steve，你有要補充的嗎？

No, I think that's (inaudible).

沒有，我認為那個（聽不清楚）。

And then as my follow-up. What are the steps to go in from a limited launch of G6 to the full launch that we all expect at ADA?

那麼作為我的追問。從 G6 的有限度上市到我們都預期在 ADA 會看到的全面上市，中間需要哪些步驟？

Our biggest step is we got a build up some inventory, and we're in the process of getting all the manufacturing operations up and running at full scale and we're building up inventory right now. We're very pleased to do limited launches like this. There's always little things that you learn when you do limited launch on a product, and we've learned a couple of nips that we've been able to fix before we go after the masses already with the first sensor start-ups and so we've incorporated those. As we said earlier, we expect to launch full force before ADA. It's May 2 today. That means it's all coming in early June. So we're building up inventories. We've got to get some more contracts in place with payers. We've got to get our distributor arrangements lined up. We've got to get quantities filled to stock to distributors for their initial stocking orders so they can get things out. So it is literally all hands on deck here, Joanne. I can tell you they meet very regularly, very long, detailed, arduous, brutal meetings about every T to cross and every I to dot on this launch, and so far, so good.

我們最大的步驟是要先建立一些庫存，我們正在讓所有製造作業以滿載規模運轉，並且目前正在累積庫存。我們很樂於做像這樣的有限度上市。在產品有限度上市時，你總會學到一些小地方，我們也發現了幾個小瑕疵，已經能在全面推向大眾之前修正；在第一批感測器啟用時就已經把這些納入改善。如同我們先前所說，我們預期會在 ADA 之前全力上市。今天是 5 月 2 日。這表示一切都會在 6 月初發生。所以我們正在建立庫存。我們還得與付款方（保險/給付方）敲定更多合約。我們得把經銷商的安排對齊。我們得把數量補到經銷商的庫存，以滿足他們的首批備貨訂單，讓他們能把產品出貨。所以這裡真的是全員投入，Joanne。我可以告訴你，他們非常頻繁地開會，而且會議時間很長、細節很多、非常艱鉅、很「硬核」，逐一確認上市的每個細節；到目前為止，一切順利。

And our next question comes from Chris Cooley from Stephens.

下一個問題來自 Stephens 的 Chris Cooley。

Just maybe 2 quick ones from me at this point. Steve, maybe could you elaborate a little bit more on the non-intensive diabetes management initiatives and more specific, if there's any update on the UNH project and when we might see that data and its application? And then I have just one other quick follow-up.

我這邊目前可能就兩個簡短問題。Steve，你能否再多談一點非密集型糖尿病管理的推動計畫？更具體地說，UNH 專案是否有任何更新，以及我們何時可能看到那些資料及其應用？然後我還有另一個簡短的追問。

So as Kevin kind of mentioned it in one of his questions, we've got north of 1,000 patients enrolled now, just gathering data at this point. Like we've said before, you're not going to see published, like, clinical data in a medical journal kind of data out of this. It would be more anecdotal. But I think probably closer to the end of this year or the first part of next year, we will have a lot more to talk about. Really the kind of cadence that we're thinking through is really focusing on non-intensive, non-insulin taking type 2s first and then really using the Gen 6 and some future products as a platform. We think any of us we spend time out in the field and the first thing we hear when we go into a clinic is, "Hey, this thing needs to be in the hospital," right. Not sure that G6 in its current form is the right product, but some of the future iterations as the platform evolves certainly allow us to go to the hospital, allow us to put these things on prediabetics and particular pre type 2s to try to identify these people early and have the ability to intervene. We mentioned gestational, obesity, obviously, linked to type 2 as well. So whole host of really broad opportunities. The first, obviously, for the near-term, foreseeable future, the intensive business is still going to be the core of our revenue. But over the coming years, you're going to see us really branching out in some of these alternative markets. I think it's going to be really important for us.

如同 Kevin 在其中一個問題裡提到的，我們現在已經有超過 1,000 名病患納入，現階段就是在收集資料。就像我們之前說過的，你不會看到那種會發表在醫學期刊上的、臨床試驗式的資料。它會比較偏向軼聞式（案例/經驗）資料。但我想大概在今年底或明年初，我們會有更多可以分享的內容。我們目前思考的推進節奏，是先聚焦在非密集型、未使用胰島素的第二型糖尿病族群，然後再把第六代以及一些未來產品作為平台來延伸。我們認為，只要我們任何人到第一線跑市場，走進診所聽到的第一句話通常就是：「嘿，這個東西應該要用在醫院裡」，對吧。不確定目前形式的 G6 是否是最合適的產品，但隨著平台演進，未來的一些迭代版本肯定能讓我們進入醫院場景，也能讓我們把這些產品用在糖尿病前期族群，特別是第二型糖尿病前期者，以便更早識別並具備介入的能力。我們也提到妊娠糖尿病、肥胖，顯然也與第二型糖尿病相關。所以這是一整套非常廣泛的機會。當然，在可預見的短期內，密集型業務仍會是我們營收的核心。但在未來幾年，你會看到我們在這些替代市場上真正開始擴展。我認為這對我們會非常重要。

Super. And then I apologize if you touched on this at the outset. I juggled a couple of calls here. But did you give any color or can you give any color as it pertains to growth in the quarter between the commercial and the Medicare populations either in terms of starts or in terms of dollars, in terms of how that helps drive the very strong first quarter results?

太好了。然後如果我在一開始你已經提到這點，我先道歉。我這邊同時接了幾通電話在處理。不過，關於本季商業保險與 Medicare 族群之間的成長，不論是以啟用人數（starts）或以金額（dollars）來看，你們是否已提供一些說明，或能否補充一些說明，談談這如何推動第一季非常強勁的業績？

Yes, we're not going to get down into breaking out the specifics of our commercial and Medicare business for competitive reasons. What we have provided in terms of some color is that Medicare continues to accelerate. It has seen an uptick in the Medicare business, which continues to demonstrate the opportunity there that would be (inaudible) able to realize. And the commercial business continues to be very strong as well, fueled by new patient additions. So that's the extent of the color we're going to provide there.

是的，基於競爭因素，我們不會進一步拆分商業保險與 Medicare 業務的具體細節。我們能提供的一些說明是，Medicare 持續加速成長。Medicare 業務出現上升趨勢，這也持續展現出那裡的機會，我們將能夠（聽不清）加以實現。而商業保險業務也持續非常強勁，主要由新增病患帶動。以上就是我們在這方面能提供的說明範圍。

And the next question comes from Steven Lichtman from Oppenheimer.

下一個問題來自 Oppenheimer 的 Steven Lichtman。

Given your U.S. performance and the Libre rollout, certainly looks like we're seeing an inflection in market penetration. Guys, based on your discussion with physician customers, what are your latest thoughts on where penetration can go over the next 3 to 5 years, maybe specifically in the type 1 population within the intensive insulin population, if you could?

以你們在美國的表現以及 Libre 的推廣來看，顯然我們正在看到市場滲透率的拐點。各位，根據你們與醫師客戶的討論，你們對未來 3 到 5 年滲透率可達到的水準有何最新看法？如果可以的話，能否特別談談在強化胰島素治療族群中的第一型（type 1）族群？

This is Kevin, and that's a great question. I have said on numerous times, I think type 1 penetration for CGM should be at least 80%. I don't believe that is a stretch number. I believe that given the value of the technology that we provide and the information we provide patients, I don't know how anybody would manage the disease without it. I really don't. And I think over time, again, as we refine our product portfolio to include the performance features we have with G6 and no-calibration, the connectivity, the interoperability with the other devices, that somebody with type 1 diabetes would have to intensively manage their disease, I think we can absolutely lead that charge. But I truly believe that penetration in the type 1 space. And I believe the intensive type 2 space should be just as high. These patients need CGM, they need data to understand how to manage their condition and their overall health.

我是 Kevin，這是個很好的問題。我已多次說過，我認為第一型糖尿病的 CGM 滲透率至少應該達到 80%。我不認為那是個勉強的數字。我相信，鑑於我們提供的技術價值以及我們提供給病患的資訊，我不知道有人怎麼能在沒有它的情況下管理這個疾病。我真的不知道。而且我認為，隨著時間推進，當我們持續精進產品組合，納入像 G6 的效能特點、免校正（no-calibration）、連線能力、以及與其他裝置的互通性（interoperability），對於必須密集管理疾病的第一型糖尿病患者而言，我認為我們絕對可以引領這股趨勢。但我確實相信第一型領域的滲透率會（提高）。而我也相信需要密集治療的第二型（type 2）族群應該同樣高。這些病患需要 CGM，他們需要數據來了解如何管理自身狀況與整體健康。

Kevin, and just as a follow-up, apologies if you mentioned this earlier, but latest thoughts on additional country opportunities for you guys. I know on the last call I think you mentioned Japan. Should we still expect to hear from you guys before the end of the year on some new opportunities there?

Kevin，另外追問一下，如果你先前已提到我先致歉，你們對新增國家機會的最新看法是什麼？我記得上次電話會議你們好像提到日本。我們是否仍可期待在今年底前聽到你們在那方面的一些新機會進展？

Yes, most certainly. I mean, we expect an approval in Japan kind of any time now and would hope to be launching really before the end of the second quarter in Japan. We mentioned Korea previously. We're looking at some other direct opportunities as reimbursement evolves in Europe. So, yes. I mean, continued international expansion through the balance of this year and certainly into 2019 will be an important contributor for us.

是的，當然。我的意思是，我們預期日本的核准幾乎隨時會下來，並希望能在第二季結束前於日本正式上市。我們先前也提到韓國。隨著歐洲的給付（reimbursement）演進，我們也在評估其他一些直營（direct）機會。所以，是的。我的意思是，今年剩餘時間持續推動國際擴張，並且延伸到 2019 年，將會是我們重要的貢獻來源。

And our next question comes from Chris Pasquale from Guggenheim.

下一個問題來自 Guggenheim 的 Chris Pasquale。

Kevin, you mentioned patient's desire to change out their sensor less frequently. You have another competitor with a long-term sensor, they had a positive advisory panel meeting back in March that could potentially be approved here in the next few months. What are your thoughts on the appeal of an implantable form factor?

Kevin，你提到病患希望更少頻率更換感測器。你們有另一家競爭對手提供長期感測器，他們在 3 月有一場正面的諮詢委員會會議，可能在接下來幾個月內獲得核准。你對植入式（implantable）外形規格（form factor）的吸引力有何看法？

That's where DexCom started in the past, and I'll go back to the pillars of our product that I talked about. You've got to perform, you've got to be convenient and you got to meet the cost requirements of a patient. And if that system fits into those categories and patients prefer it, that is fine. We have not seen tremendous uptick for that system in Europe, but their data clinically appears reasonable. And there may be some patients who prefer that. We believe if we can get our technology small enough and convenient enough and easy enough to use that we can replace any advantage that somebody with that system may think that they have. And that's how we look at it, but we wish them well.

DexCom 過去一開始就是從那個方向起步的，我會回到我談過的產品支柱。你必須要有表現、必須要方便，並且必須符合病患的成本要求。如果那套系統符合這些類別，而且病患偏好它，那也沒問題。我們在歐洲並沒有看到那套系統有非常明顯的成長，但他們的臨床數據看起來是合理的。也可能有一些病患會偏好那種方式。我們相信，只要我們能把技術做得足夠小、足夠便利、且足夠容易使用，我們就能取代那套系統可能被認為具有的任何優勢。這就是我們的看法，但我們也祝他們一切順利。

That's helpful. And then can you give an update on timing of 2 pipeline items. First, the second gen G6 transmitter with the lower cost of production and then SHARE availability for Medicare patients?

這很有幫助。另外，能否更新兩個研發管線項目的時程？第一，第二代 G6 發射器（transmitter），其生產成本更低；第二，Medicare 病患的 SHARE 功能可用性？

The G6 lower cost transmitter is in the middle -- we're really wrapping that up engineering-wise. We would hope to launch that early '19, late '18. Those are the 2 timeframes that I see on my desk. We believe the filing can go faster now that we're in a 510(k) world because that transmitter doesn't perform any different than the current one that we have. With respect to Medicare and the SHARE function, let me tell you we work at it diligently, we are writing letters, we are engaged politically, we meet with CMS on a regular basis, we are hoping to resolve that by the end of the quarter. But I will tell you the commitment I made on behalf of our team to the Medicare population. If we can't get this resolved, we will come up with a Medicare configuration in our product portfolio that does. We're not going to let seniors go without SHARE. It is absolutely too important to them to have it, and it's important to their infrastructure and diabetes ecosystem. So I'm really hopefully I have a positive announcement on the next call.

G6 的低成本發射器目前進度在中段——工程方面我們其實快收尾了。我們希望能在 2019 年初、或 2018 年底推出。這是我桌上看到的兩個時間點。我們相信，現在在 510(k) 的框架下，送件（filing）速度可以更快，因為那個發射器的表現與我們目前的版本並無不同。至於 Medicare 與 SHARE 功能，我可以告訴你，我們正非常努力推進：我們在寫信、在政治層面積極參與，並且定期與 CMS 會面；我們希望能在本季末前解決。但我也要告訴你，我代表團隊對 Medicare 族群做出的承諾。如果我們無法解決這件事，我們會在產品組合中提出一個可行的 Medicare 配置來做到這點。我們不會讓長者沒有 SHARE。這對他們而言絕對太重要了，對他們的基礎設施與糖尿病生態系也很重要。所以我非常希望能在下一次電話會議上帶來正面的宣布。

Our next question comes from Isaac Ro from Goldman Sachs.

下一個問題來自 Goldman Sachs 的 Isaac Ro。

I wanted to get a little more detail, if I could, on your comments regarding pricing for transmitters and receivers outside the U.S. I think you said a little bit of ASP pressure, just curious what drove that?

我想更深入了解一下你們對美國以外市場的發射器與接收器（receiver）定價的評論。

Couple of things. Mix is one of the drivers there. Just as you look at the geographic and within the geographic, country mix or direct versus distributor. And then the other aspect is we are receiver optional throughout Europe and so you do find patients who continue to move towards the receiverless option. So it's a bit of pressure on the overall revenue for patients (inaudible).

有幾個因素。產品組合／地區組合（mix）是其中一個驅動因素。就像你看地理分布，以及在各地理區域內的國家組合，或是直營相對於經銷商（distributor）的組合。另一個面向是，我們在歐洲全面提供「接收器可選」（receiver optional），因此你確實會看到病患持續轉向不使用接收器的選項。所以這對每位病患的整體營收會帶來一些壓力（聽不清）。

I'll let the jet fly by.

我先讓噴射機飛過去。

We've got you. Let's let the jets fly by before you go, Isaac give us a couple of minutes here.

我們聽得到你。在你繼續之前先讓噴射機飛過去，Isaac，給我們幾分鐘。

No problem. I thank them for the service. Okay. Just the follow-up would be on the Libre -- I'm sorry, the Verily program. You guys mentioned that's in development there, so sounds like it's on track. Can you help us think about when the investment there peaks over the next couple of years? Is it a this year kind of thing or is it going to kind of increase in investment into 2019 as well?

沒問題。我也感謝他們的服務。好的。接著追問一下 Libre——抱歉，是 Verily 計畫。你們提到那邊正在開發中，所以聽起來進度如期。能否幫我們思考一下，未來幾年那邊的投資何時會達到高峰？會是在今年見頂，還是投資也會在 2019 年持續增加？

Our R&D investment is really big already and the biggest project we're spending most of our money on, on the R&D front right now in all candor is the second Verily product. The first one's at a phase where it's in validation and verification as we get ready to run the study and then decide where and how we're going to launch that, which are some variables we're still discussing internally. Our biggest investment in Verily right now is that second product as we really have a lot of neat things going into that. So that will be part of our standard R&D spend really for the next 3 years since we get the first one out. And then going forward as we modify it and make it better.

我們的研發投資其實已經非常大了，而且坦白說，目前在研發面向上我們花最多錢、最大的專案就是第二個 Verily 產品。第一個產品已進入驗證與確認階段，我們正準備啟動研究，接著再決定要在哪裡、以及如何推出；這些變數我們內部仍在討論。目前我們在 Verily 上最大的投資是第二個產品，因為我們有很多很棒的內容會放進去。因此，這將會是我們標準研發支出的一部分，基本上在未來 3 年都會如此，直到我們把第一個產品推出。之後我們會持續改良並讓它更好。

And the next question comes from Ravi Misra from Berenberg Capital.

下一個問題來自 Berenberg Capital 的 Ravi Misra。

Couple -- 2 questions. The first one I had was on the receiver optional commentary that you've been having. I'm just curious to think kind of longer term what your thoughts are, what the option -- the impact of that could be on gross margins. I mean, having one less device to manufacture and for a patient to purchase. Seems to be that it could be a potential gross margin tailwind in long term. Would that be -- would you agree with that characterization and kind of how should we think about that? A couple of basis points or this is kind of a step function driver? And then secondly, my follow-up would be with the G6 launch, I was just wondering a little bit on the strategy of patient acquisition. Are you focusing on existing patient conversions or kind of new patient acquisitions?

兩個——兩個問題。第一個是關於你們一直在談的「接收器可選」的評論。我想從較長期的角度了解你們的看法：這個選項對毛利率可能造成的影響會是什麼？畢竟少了一個需要製造、也少了一個病患需要購買的裝置。看起來長期可能會對毛利率形成正向助力。你們是否同意這樣的描述？我們應該如何看待？是提升幾個基點，還是屬於階躍式的驅動因素？第二個追問是關於 G6 上市後的病患獲取策略。你們是更聚焦於既有病患的轉換，還是偏向新病患的獲取？

With respect to the receiver and the potential future impact on gross margin as we do move away from the receiver, become more of a receiver optional or the receiver just goes away altogether, it is going to be a tailwind on the gross margin. It currently has a gross margin profile that is less than the corporate average by a pretty meaningful amount. So it will be a nice contributor over time. We're not going to size it up just yet, but it is something that will make a meaningful move in the gross margin profile.

就接收器以及未來對毛利率的潛在影響而言，當我們逐步淡出接收器、變成接收器可選，或接收器最終完全取消時，這確實會對毛利率形成正向助力。目前接收器的毛利率結構，較公司平均低了相當明顯的一段差距。因此，隨著時間推移，它會成為不錯的貢獻來源。我們現在還不打算量化到具體數字，但這會讓毛利率結構出現有意義的改善。

And I will add to that and then answer your second question. While we move away from that and it will make gross margins better, it will decrease the gross profit per patient. And that's how we analyze this stuff is what is the value of the patient to us on the gross profit line as we look at our pricing models and the products that we offer and how we roll our services out. So there are pluses and there are minuses, and we will weigh all of that as we pursue this strategy. With respect to G6 patients, we're going to do it the way we always do: We're going after all of them. We will get as many patients as we can to continue to buy G5 and get at the upgraded program so they do not wait for CGM. We've had very good response from our existing patients with respect to the G5 purchase up to the G6 -- and waiting for the G6 upgrade. But we will -- literally, we will attempt to build enough to be able to serve everybody out of the gate. So big launch for us.

我補充一下，並回答你的第二個問題。當我們逐步淡出接收器、毛利率會變好，但每位病患的毛利（gross profit）會下降。我們分析這些事情的方式，是看病患對我們在毛利線上的價值，並結合我們的定價模型、提供的產品，以及我們如何推出服務。所以有利有弊，我們會在推進這個策略時把所有因素都納入權衡。至於 G6 病患，我們會照一貫方式做：我們要爭取所有人。我們會讓盡可能多的病患繼續購買 G5，並加入升級計畫，這樣他們就不必等著 CGM。就從現有病患購買 G5、再等待升級到 G6 這件事而言，我們已經看到非常好的回應。但我們也會——真的——嘗試一開始就把產能拉到足以服務所有人的程度。所以這對我們來說會是一個大型上市。

And our last question comes from Margaret Kaczor from William Blair.

我們最後一個問題來自 William Blair 的 Margaret Kaczor。

Guys, just wanted to follow up on something. Specifically, there are a few databases that have these weighted cost average pricing data that's available. Can you guys true up some of the commentary that you guys had at the beginning of the call for the cost relative to the patient relative to this pricing data that's available on the databases?

各位，我想追問一件事。具體來說，有幾個資料庫提供可取得的加權平均成本（weighted cost average）定價資料。你們能否針對電話會議一開始所提到、關於相對於病患成本的評論，結合這些資料庫中可取得的定價資料，做一些校正與釐清？

Sure, Margaret, this is Steve. I'll take that. So WAC pricing isn't really representative of kind of the net pricing that we receive as a company. We took a look as we launched G6 and as we look to the pharmacy strategy, G6 really gives us an opportunity to get back and revisit our pharmacy strategy. With G5, our WAC frankly was higher. And what we would do is we would provide rebates that would get our net price rebates back to the payer and the pharmacy to patient to get our net price closer to what our DME pricing was. The problem is in many instances in the pharmacy, some individuals have a coinsurance versus a co-pay. And those that have a coinsurance would end up having to pay a percentage out-of-pocket of the WAC, so they could end up paying a much higher out-of-pocket expense than a traditional co-pay. So what we can do here is if we reduce our WAC which, again, really isn't represented of the net price and net value to DexCom, we can reduce what we have to pay back in rebates to the payer. We can also get appropriate pricing -- net pricing to those folks with coinsurance. They can actually pay a much lower out-of-pocket, potentially as much as like 50% lower from an out-of-pocket perspective. So this is a real -- it's a real positive for us.

當然，Margaret，我是 Steve。我來回答。WAC 定價其實不太能代表我們公司實際收到的淨價格（net pricing）。我們在推出 G6、以及檢視藥局策略時發現，G6 真的讓我們有機會回頭重新檢討我們的藥局策略。以 G5 來說，我們的 WAC 坦白講比較高。我們的做法是提供回扣（rebates），把淨價格透過回扣回饋給付款方與藥局，讓我們的淨價格更接近 DME 的定價。問題在於，在藥局通路的許多情況下，有些人是共同保險（coinsurance）而不是固定自付額（co-pay）。採共同保險的人，最後必須按 WAC 的一定比例自付，因此他們的自付費用可能會比傳統 co-pay 高很多。因此我們可以做的是：如果我們降低 WAC——再次強調，WAC 並不真正代表 DexCom 的淨價格與淨價值——我們就能降低需要以回扣形式回饋給付款方的金額。同時也能讓採共同保險的族群拿到更合適的定價——淨定價。他們實際自付金額可以低很多，從自付角度看，可能最多可降低約 50%。所以這對我們來說是非常——是非常正面的。

And that concludes our question-and-answer session. I will now turn the call back over to Kevin for final remarks.

以上結束我們的問答環節。現在我把電話交回 Kevin 作最後結語。

Thank you, everybody, for participating. While it seems like yesterday, today marks the seventh anniversary of my participation in DexCom earning calls. In that time, we've gone from a theme of explaining how we have enough cash to survive another day to the unknowns of the G4 launch to connectivity with G5 and now G6. This is by far and away the most anticipated, exciting and complicated period we've ever been associated with. A change like this early on in DexCom's history would have affected a few thousand patients here in United States, but now we play a key role in the lives of hundreds of thousands of patients all over the world. This is our first ever global launch, and it's a much more complex environment and literally every single thing about this product is different. In typical DexCom fashion, we're executing at warp speed. We received approval in late March; we'll be in full launch mode in early June. We continue to hold ourselves at the highest standards possible to deliver the best technology on our patients. Earlier reviews of G6 haven't disappointed. I'm going to share one for my young lady who is on our first phase of our limited launch. And she is a teenager. Upon her first experience with G6, she texted 3 words: Beautiful, incredible and unbelievable. Do your teenagers say that about anything other than their phones? Thank you for your continued support. The future at DexCom continues to be amazing. Have a great day, everybody.

感謝各位的參與。彷彿就在昨天，但今天標誌著我參與 DexCom 財報電話會議的第七週年。在這段期間，我們從一開始的主題——解釋我們如何有足夠現金撐過下一天——一路走到 G4 上市的未知數、G5 的連線能力，而現在來到 G6。這無疑是我們有史以來所經歷、最受期待、最令人振奮且最複雜的時期。若在 DexCom 早期歷史就發生這樣的變革，影響的可能只是美國境內幾千名病患；但如今，我們在全球數十萬名病患的生活中扮演關鍵角色。這是我們首次的全球上市，而環境更為複雜，且這項產品幾乎每一件事都完全不同。以 DexCom 一貫的風格，我們正以極快速度執行。我們在三月底取得核准；六月初將全面進入上市模式。我們持續以最高標準自我要求，將最好的技術交付給我們的病患。G6 的早期評價沒有讓人失望。我想分享一則來自一位年輕女孩的回饋，她參與了我們第一階段的有限上市。她是一位青少年。第一次使用 G6 後，她傳了三個字：美麗、不可思議、難以置信。你們的青少年會用這些詞形容除了手機以外的任何東西嗎？感謝各位持續的支持。DexCom 的未來依然令人驚豔。祝各位有美好的一天。

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

謝謝各位女士與先生。今天的電話會議到此結束。感謝各位參與，現在您可以掛線。