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Operator: Good day, everyone, and welcome to the Senseonics First Quarter 2025 Earnings Call. At this time, all participants are in a listen-only mode. Later, you will have the opportunity to ask questions during the question-and-answer session. [Operator Instructions] Please note, this call is being recorded, and I will be standing by should you need any assistance. It is now my pleasure, to turn the conference over to Jeremy Feffer, from LifeSci Advisors. Please go ahead.

Jeremy Feffer: Thank you. 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 and 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 31, 2024, and our 10-Qs 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. I’ll now turn the call over to Tim Goodnow, President and CEO. Tim?

Tim Goodnow: Thanks, Jeremy, and thank you to everyone on the call for joining us. Today, I’m happy to add detail about our latest step in transforming diabetes care, the integration of our Eversense 365 continuous glucose monitor, with Sequel’s twiist automated insulin Delivery System. I’ll also provide an update on a recent CE Mark submission, our European launch, planning our pipeline programs and our ongoing initiatives for practice and healthcare systems integration. After that, Rick will run you through the numbers, and then we’ll take your questions. We announced on April 29, our first AID integration of Eversense 365, with the twiist Automated Insulin Delivery System. This partnership enables real-time readings from our CGM, to be received by the twiist pump, which are then used in the loop algorithm, to automatically adjust insulin delivery, and predict future glucose levels.

We’re excited about this collaboration, particularly joining the most technologically advanced innovations in pump, CGM and algorithm technologies, and we see this as a significant step forward for both companies towards improving personalization choice, and improved health outcomes for patients with diabetes. We believe this compatibility, will enhance the patients experience through simplification of insulin delivery, and with only one CGM required over the course of a year, patients will experience significantly less complexity in managing their diabetes. The teams are working on the systems integration, and we look forward to jointly launching our combined products in the coming quarter. The other collaboration, we established during the quarter is with SweetSpot, which enables endocrinology practices to provide virtual CGM monitoring, and enhanced patient care.

By receiving real time CGM data from a patient’s Eversense 365, through SweetSpot’s technology platform, providers can assess and make treatment decisions between patient appointments, and keep patients more connected to their care teams. Endocrinologist practices, can utilize SweetSpot’s platform to capture reimbursable care events, improving efficiency and streamlining the totality of patient care. We believe this benefit will be particularly useful for accountable care organizations, and health systems looking to improve network wide health outcomes that decrease costs. Our key accounts teams continue to work with health systems, to include Eversense 365 in their standard offering, for patients with diabetes. To monitor and improve overall glycemic control and reduce the frequency and cost of long-term complications, due to diabetes.

We are engaged in a series of discussions to that end. At the same time, Mercy Health Systems in St. Louis has recently undergone a significant executive level restructuring, which has caused them to pause many new initiatives as they evaluate programs within this new structure. While this was a broader action that does not reflect on Eversense, it does mean that the ongoing work to drive our Eversense with remote patient monitoring offering forward at Mercy, is currently on hold and we do not yet have an estimate as to when the project will be restarted. Progress on the program to-date, has given us valuable insights about such an integration, and the RPM element of the program, and we expect this to benefit us as we move forward with other health system initiatives.

As the program is expanded, we had planned to see Mercy impact the back half of the year. However, with the progress we are seeing with the 365 launch, the expected European launch, and additional marketing initiatives planned, we reiterate the 2025 revenue guidance we previously issued. These complicated collaborations do take several quarters to implement, but we continue to expect these types of partnerships, to be an important part of our growth strategy in the coming years. Looking at these Eversense 365 expansion opportunities, we filed our CE Mark application with the notified body in the first quarter. The review appears to be progressing as expected, and subject to receiving the anticipated approval. We remain on track for a European launch in the second half of this year.

Our commercial partner Ascensia Diabetes Care has initiated the planning and preparation for this launch. We look forward to users in our European markets, being able to experience the convenience of a one-year CGM, and our current expectation is that the Eversense 365, will be our single product offering by the end of 2025, offering meaningful global supply chain synergies, and cost of goods improvements. Our commercial accomplishments in Q1, were all made possible, by delivering on our promise of one-year one CGM. We continue to make good on our progress on our work with U.S. payers, to transition reimbursement from 180 to 365 days for Eversense, with many payers having already transitioned their coverage. Specifically on the Medicare front, last month we were happy to see that the 2025 physician fee schedule, was updated to provide payment for our full year of Eversense, with effectiveness retroactive back to January 1.

We see many patients and providers enthusiastically embracing Eversense 365, and we continue to hear feedback on its convenience of ease of use. We look forward to continuing to build more awareness, and adoption of the product throughout the year. I’d also like to highlight, the importance of our continued work on our pipeline products Gemini and Freedom, as our development team work diligently, to continuously improve the patient’s experience with Eversense. We remain on track to submit an IDE, for a pivotal study by year end for Gemini using the data we are currently collecting in our human feasibility studies. The Gemini product includes a one-year sensor, with a built-in battery that allows for both continuous, as well as optional swipe testing, providing for more flexibility and choice for patients who decide, when and where they want to wear something on-body.

Our Freedom system, which incorporates Bluetooth within the sensor, to eliminate the need for any on-body transmitter, is right behind. And is built on the same sensing chemistry as the Eversense 365 and the Eversense Gemini. Freedom is designed, to communicate directly with the user’s phone, to create the world’s first and only invisible CGM. This offers the benefits of being able to monitor the glucose levels, for an entire year without any on-body device or adhesive. I think it’s easy to understand why we call this project Freedom, and our team is driving hard to advance its development. Over the next few quarters, we expect to share more collaborations, partnerships and development advances with you. Our goal remains to transform the lives in the global diabetes community through technologically differentiated long-term implantable glucose monitoring.

And with each new collaboration, each technology interface, and device integration, and with each development milestone, we move one step closer to that goal. Now I’ll turn it over to Rick, to walk you through the financials from the quarter.

Rick Sullivan: Thank you, Tim and thanks to everyone, joining us this afternoon. In the first quarter of 2025, net revenue grew 24% to $6.3 million, compared to $5 million in the prior year period. U.S. revenue for the first quarter was $4.5 million and revenue outside the U.S. was $1.8 million. As always, a quick reminder regarding our revenue recognition. Our collaboration agreement with Ascensia for revenue sharing, with the percentage of revenue to Ascensia increasing based on duration of the contract, and annual revenue levels. For most sales, we recognize our portion of revenue, when shipments are delivered to Ascensia. This begins the distribution to patients via Ascensia and their distributors. We manage our manufacturing based on patient demand, generated from commercial activities, targeting 60 to 90 days of inventory across the various channels.

Therefore, our shipments to Ascensia during the quarter, are largely intended to support future demand for Eversense. Following the launch of Eversense 365, we are still increasing inventory levels, and continue to expect to reach target levels, by the end of Q2, 2025. We also sell product through an office consignment program, and continue to see strong utilization in Q1, with approximately 13% of our revenue flowing through this channel. We have well over 100 healthcare providers, participating in the consignment program, which enables a physician to have the product on the shelves, providing convenience to healthcare providers and patients, facilitating faster and even same day insertions. In the consignment program, we recognize revenue at the time of the procedure.

We also record a sales commission expense for Ascensia support, with sales and marketing efforts on the revenue through this channel. In Q1, 2025, gross profit was $1.5 million, an increase from a gross profit of $0.3 million in the prior year period. This increase in gross profit was primarily driven by increased margins on the 365 day product, but also includes the positive impact of approximately $0.4 million in manufacturing costs, previously expensed to research and development prior to FDA approval of Eversense 365. When we include these costs in our gross profit margin calculation, we would see margins of approximately 18%. This is very encouraging considering that we still have limited manufacturing scale, with it being so early in the product life cycle and that European sales continue to be the lower margin 180-day product.

Also seasonality with our business, because of higher utilization of our patient assistance programs, to offset patient deductibles early in the year, reduce our ASPs and therefore our margins. Research and development expenses in Q1, 2025, were $7.3 million, a decrease of $3.1 million, compared to the prior year period. The decrease was primarily due to a reduction in clinical study spend, and consultant costs due to the completion of the 365-day product trials. First quarter 2025, selling, general and administrative expenses were $7.7 million, a decrease of $0.4 million, compared to $8.1 million in the prior year period, primarily driven by favorable personnel costs, consulting fees and legal expenses. Net loss was $14.3 million or a $0.02 loss per share in the first quarter of 2025, compared to a net loss of $18.9 million, or a $0.03 loss per share in the first quarter of 2024.

Net loss decreased by $4.6 million, primarily due to improved gross profit margins of Eversense 365, and reduced research and development costs. As of March 31, 2025, cash, restricted cash and cash equivalents totaled $64.6 million, and debt and accrued interest was $35.3 million. In January, the remaining outstanding 2025, convertible notes in the principal amount of $20.4 million were repaid, reducing the total principal debt outstanding to $35 million. Additionally in Q1, all preferred stock was converted into shares of common stock. The 12,000 shares of Series B preferred stock, were converted into about 30.4 million shares of common stock at the end of January. The common shares issued, have been included in our diluted earnings per share calculation, since the preferred shares were issued.

Finally in Q1, we received gross proceeds of approximately $27 million from the sale of common stock, by utilizing our at-the-market facility, which we expect will extend our cash runway into mid-2026, based on our current operating plans. Reiterating our outlook for 2025, we expect full year 2025 global net revenue to be approximately $34 million to 38 million, as we progress the launch of Eversense 365. This financial outlook, takes into consideration several factors, the timeline for the regulatory approval, and the planned commercial launch of Eversense 365 outside the United States. Continuing work to transition U.S. reimbursement from Eversense E3 to Eversense 365, plans with respect to spending on the U.S. direct-to-consumer marketing campaigns, to generate leads and the status of other sales and marketing initiatives.

The full year 2025 financial outlook, assumes approximately doubling the global patient base in 2025, compared to 2024, with patients growing steadily throughout the year. We expect our revenue to be approximately one-third in the first half, with the remaining two-third in the second half, as a result of the steady increase to patients, and the ASP impact due to the seasonality of our business from program discounts previously described. We are following the evolving tariff situation closely, and monitoring how they could impact our gross profit margins. We have a global supply chain and utilize contract manufacturers, for several manufacturing processes in Europe, and we obtain components and subcomponents from around the world, including a very small percentage from China, which could lead to a low single-digit impact, to our gross profit margins.

Between the European piece of our business being largely sheltered from tariffs, utilization of industry exemptions, and some of the operational changes our supply chain has begun to implement, we expect to be able to mitigate any negative impacts from tariffs, to our gross profit margins. We continue to expect gross profit margins, to steadily increase each quarter in 2025, with full year gross margins projected to be between 25% and 30%. We will continue to evaluate our supply chain, and assess whether any aspects of our manufacturing processes could be performed efficiently in the U.S. as tariffs become clear and the U.S. represents a larger piece of our business. We’re also seeing the results of our expense management through lower operating expenses, which we continue to expect to translate into cash utilization between $50 million and $60 million in 2025.

With that, I’ll turn it back to Tim.

Tim Goodnow: Thanks, Rick. We’ve had a busy start to the year at Senseonics, and we only expect to see the momentum continue with new announcements, new technical advances, new collaborations and new customers. As the world’s first and only one-year CGM Eversense 365, is making a difference in patient’s lives, through simplification and peace of mind. The promise of one-year, one CGM. Our launch metrics and revenue numbers, give me confidence that we are on the right track with this value proposition, to catalyzing growth for the company. From securing positive CMS reimbursement effective to January 1, to announcing the agreement for our first pump integration with Sequel twiist, and announcing the collaboration with SweetSpot, we have made important progress to support Eversense 365 access and adoption.

Further, we plan to launch Eversense 365 in Europe this year, to bring the one-year, one CGM promise, to people with diabetes in Europe, and we continue to build on our platform, to deliver the further advances of Gemini and Freedom to users in the upcoming years. We hope you share our optimism, and excitement in one of the fastest growing segments in the medical device landscape. Thank you all once again for your time today. Operator, let’s go ahead and open up the call for questions.

Operator: Thank you. [Operator Instructions] We’ll take our first question from Anthony Petrone with Mizuho. Please go ahead. Your line is open.

Anthony Petrone: Thanks, and congrats again on the E 365 launch, and a good start to the year here overall. I think, I want to maybe Tim start on the guidance, kind of intrigued there that actually raising the outlook despite the pause on the Mercy contract and initiatives. And you mentioned sort of, the U.S. trajectory being one driver but also OUS, so maybe kind of break those three buckets out a little bit. What were the initial expectations for Mercy that were baked in, and if you split between your early views here on trajectory, U.S. versus OUS, put it placing the offsets in those two buckets. How do we quantify those two, and then I’ll have a follow-up?

Tim Goodnow: Sure. Anthony thanks, thanks for the time as well. Based on the early launch metrics that we’ve shared, we continue to see a very exciting response for the Eversense 365. We continue to have a good first quarter as you saw, and we’re just excited about the conversion rates that we’re seeing. We’re excited about the interest that we’re seeing. So all of the signals are certainly to the positive. So as I would say yes, we did anticipate the ability to do more ramp with Mercy in the back half of the year, but that will certainly be moderated, and any risk that might have existed, will be fully eliminated by the 365 launch. The OUS component will certainly add to that as well. The progress that we’re making with the reviewer notified body is BSI, is right on schedule and we certainly anticipate having that in the second half of the year.

Along the lines of what we’ve seen, what we’ve previously communicated. The launch excitement in the U.S., we do expect to propagate outside the United States as well. So we’re hoping that there’s some good opportunity for that as well. And then based on the metrics that we’re seeing, with the conversions especially around DTC, and the performance of the sales reps. We know that if we increase awareness, which we will be doing, we’re going to drive more sensors in as well. So net-net, you add all those together. We’re actually very excited, with the launch as its going and if there’s a little bit of a speed bump with a slowdown with Mercy, as they go through some internal reorganizations, we’re certainly going to blow right through that.

Anthony Petrone: Maybe the follow-up would just be on the DTC that you mentioned here. Obviously some of your competitors are out there, pretty, pretty high profile and just in terms of their DTC efforts. So what do those look like for Senseonics? What are the channels that you expect to sort of penetrate here on DTC? And then, when you think about just conversion on that at the physician level, when you segment just the target market for CGM, are there specific populations within that broader adult Type 1, Type 2 patient backdrop that you’re really zoning in – here on for a 365 sensor? Thanks again and congrats.

Tim Goodnow: Sure. Yes, so the mediums that we focused on have been predominantly, through the traditional social media. We’ve shown good success through Facebook. We’ve shown very good success through TikTok, as well as Instagram and YouTube, frankly. So, we’re able to very specifically geo-target. So it helps with our individual sales reps, and whatever, success they may be having in their particular region. I would say that, that will continue to be our investment. The conversion that we’re seeing, obviously it’s the people that are that are on insulin. We’ve seen especially good success of late in the Medicare population, as you know now having the reimbursement schedule up and in place, and being able to document that for all of the providers, is hugely valuable and takes any discussion in regards to economics off the table.

From the sales reps, because it’s very easy to see. So I would say that that’s frankly probably been our best, and those targeted advertisements for that population are leading the pack for us.

Anthony Petrone: Much appreciated. Thank you.

Operator: Thank you. Our next question comes from Marie Thibault with BTIG. Please go ahead. Your line is open.

Unidentified Analyst: Hi, good afternoon, Tim and Rick. This is Sam on for Marie. Thanks for taking the questions and congrats to a nice start to the year. Maybe I could start on the twiist integration. Congratulations on that announcement. How much integration work is needed, or that’s left on your part to I guess meet that Q3 timeline. And is this a channel where Ascensia is going to be pushing at all, or is it really coming from twiist’s own commercial team here?

Tim Goodnow: No, I think you’re going to see an exciting partnership that’s going to come from both sides. I think it will show at the ADA, a good interest of integration and the teams are already working together as we speak. It just so happens that the census sales, national sales meeting is next week and there’s good full participation from the Sequel team in that meeting as well. So there’s a lot of joint programs that are put together, as two of the newer entrees in the place, with best-in-class technology from both platforms. We’re really excited about the story that we’re going to be able to tell. The implanted sensor for a full year with that loop algorithm, highly differentiated pump, is going to be exciting to a lot of folks and we’re excited to see what we can, to see what we can do with that so.

Unidentified Analyst: Okay. Very good. And integration work that’s left or needed to be done…?

Tim Goodnow: Sorry. Yes, so – we’re actively working together. The majority of the work still falls in verification, and validation of the integrated system on the pump side. They’re highly motivated to get that done, and I know that they’re committed to get that out here in the third quarter. So we’ve got just about a quarter, a little bit more work that needs to be done, and we’re pretty excited about being able to keep that on schedule.

Unidentified Analyst: Okay. That’s helpful. And then maybe moving to the reimbursement side of things. Congrats on the Medicare policy update. Any update on how commercial plans, are starting to convert over to 365 sensor, and any targets on where you’re hoping to be maybe three months from now, and possibly by the end of the year?

Tim Goodnow: Yes, certainly I would fully expect by the end of the year, even by the third quarter to have the vast, vast majority of all the plans carved over now, quite frankly a significant number have. We have seen one or two of the commercial payers go from the DME channel to the buy and build channel, that consignment program that Rick referred to. So I think, a little bit of consolidation towards what Medicare does we may be seeing. But through that entire process, they are of course updating to the, to the 365. So, I would say that we’re certainly more than halfway in that the 180, 365 conversion. And I would expect over the next quarter, or so that’ll be in the 90% range.

Unidentified Analyst: Got it. Okay. Very good. Thanks for taking the questions.

Operator: Thank you. And this concludes our Q&A session. I will now turn the call over to Tim Goodnow for closing remarks.

Tim Goodnow: Great. I’d like to thank everyone again, for the time this afternoon. It’s an exciting quarter for us to be able to announce the partnership with Sequel. It’s work that has been going on for some time, and we’re excited to see it here in front of us. They’re excited to launch their product, and to be able to offer that pump integration with our first partner, is pretty exciting for us. So look for us at the ADA. I think you’ll see a pretty good splash there. And we appreciate everybody’s time this afternoon, and look forward to updating you next quarter. So have a good day, and thanks all.

Operator: Thank you. And this does conclude today’s program. Thank you for your participation. You may disconnect at any time.