DexCom, Inc. (Nasdaq: DXCM) today reported its financial results
as of and for the quarter ended March 31, 2019.
First Quarter 2019 Highlights:
- Revenue grew 52% versus the same
quarter of the prior year to $280.5 million
- U.S. revenue growth of 45% and
international revenue growth of 79%
- Demonstrated additional real-world
clinical benefits driven by Dexcom real-time CGM, as described in
recent scientific publications:
- Actionable, predictive low glucose
alerts with the Dexcom G6 enable further reductions in
hypoglycemia, independent of screen view frequency1
- Data sharing via Dexcom Share and
Follow is associated with improved time in range and device
utilization in children and adolescents with diabetes2
“Dexcom is off to a great start in 2019, with our growth
testifying to the rising awareness and excitement around real-time
CGM and Dexcom’s new G6 technology,” said Kevin Sayer, Dexcom’s
Chairman, President and CEO. “Given the strength of our performance
thus far, we are pleased to raise our full-year growth
outlook.”
2019 Annual Guidance
Dexcom updated its revenue, gross profit and operating margin
expectations for full fiscal year 2019:
- Revenue of $1.25 billion to $1.3
billion
- Gross profit margin of 64% to 65%
- Non-GAAP operating margin of
approximately 6%
- Non-GAAP adjusted EBITDA margin of
approximately 18%
First Quarter 2019 Financial Results
Revenue: In the first quarter of 2019, worldwide revenue
grew 52% to $280.5 million, up from $184.4 million in the first
quarter of 2018. The growth was driven by increasing volumes across
all channels in conjunction with the rising global awareness of the
benefits of real-time CGM.
Gross Profit: Gross profit totaled $168.8 million or
60.2% of sales for the first quarter of 2019, compared to $118.9
million or 64.5% of sales in the first quarter of 2018.
Operating Loss: GAAP operating loss for the first quarter
of 2019 was $14.4 million, compared to a GAAP operating loss of
$30.7 million for the first quarter of 2018.
Non-GAAP operating loss* for the first quarter of 2019 was $7.6
million, compared to a non-GAAP operating loss of $28.7 million for
the first quarter of 2018. The first quarter 2019 non-GAAP amount
excludes $6.4 million of business transition and related costs and
the first quarter 2018 non-GAAP amount excludes $2.0 million of
such costs.
Net Loss and Net Loss per Share: GAAP net loss was $26.9
million, or $0.30 per share, for the first quarter of 2019,
compared to a GAAP net loss of $24.2 million, or $0.28 per share,
for the same quarter of 2018.
Non-GAAP net loss* was $4.6 million, or $0.05 per share, for the
first quarter of 2019, compared to a non-GAAP net loss of $26.3
million, or $0.30 per diluted share, for the same quarter of 2018.
The first quarter 2019 non-GAAP amount excludes $6.4 million of
business transition costs, $11.3 million of non-cash interest
expense related to Dexcom’s senior convertible notes, and a $4.2
million loss related to equity investments.
Cash and Liquidity: As of March 31, 2019, Dexcom
held $1.358 billion in cash and marketable securities and
maintained full availability on its $200.0 million revolving credit
facility. The cash balance includes the net proceeds from Dexcom’s
fourth quarter 2018 convertible notes offering and represents
significant financial and strategic flexibility as Dexcom continues
to expand production capacity and explore new market
opportunities.
* See the tables below for a reconciliation of these GAAP and
non-GAAP financial measures.
1 Puhr S, Derdzinski M, Parker AS, Welsh JB, Price DA.
Real-World Hypoglycemia Avoidance With a Predictive Low Glucose
Alert Does Not Depend on Frequent Screen Views. J Diabetes Sci
Technol. 2019:1932296819840691. [publication forthcoming, presented
at ATTD in February 2019]; Puhr S, Derdzinski M, Welsh JB, Parker
AS, Walker T, Price DA. Real-World Hypoglycemia Avoidance with a
Continuous Glucose Monitoring System's Predictive Low Glucose
Alert. Diabetes Technol Ther. 2019;21(4):155-158. [published online
March 30, 2019]
2 Welsh JB, Derdzinski M, Parker AS, Puhr S, Jimenez A, Walker
T. Real-Time Sharing and Following of Continuous Glucose Monitoring
Data in Youth. Diabetes Therapy. 2019;10(2):751-755. [published
online January 30, 2019]
Conference Call
Management will hold a conference call today starting at 4:30
p.m. (Eastern Time). The conference call will be concurrently
webcast. The link to the webcast will be available on the DexCom,
Inc. website at www.dexcom.com by navigating to “About Us,” then
“Investor Relations,” and then “Events and Presentations,” and will
be archived for future reference. To listen to the conference call,
please dial (800) 446-1671 (US/Canada) or (847) 413-3362
(International) and use the confirmation number “47626298”
approximately five minutes prior to the start time.
Statement Regarding Use of Non-GAAP Financial
Measures
Dexcom reports non-GAAP financial measures in addition to, and
not as a substitute for, or superior to, financial measures
calculated in accordance with GAAP. Our financial measures under
GAAP include certain non-cash collaborative research and
development fees, business transition and related costs, income and
expense related to our equity investment in Tandem Diabetes Care,
Inc., and certain interest expense related to our senior
convertible notes, as shown in the itemized reconciliation between
GAAP and non-GAAP financial measures included in this press
release. Management believes that presentation of operating results
that excludes these items provides useful supplemental information
to investors and facilitates the analysis of our core operating
results and comparison of operating results across reporting
periods. Management also believes that this supplemental non-GAAP
information is therefore useful to investors in analyzing and
assessing our past and future operating performance.
These non-GAAP measures may be different from non-GAAP measures
used by other companies. In addition, these non-GAAP measures are
not based on any comprehensive set of accounting rules or
principles. We believe that non-GAAP measures have limitations in
that they do not reflect all of the amounts associated with our
results of operations as determined in accordance with U.S. GAAP
and that these measures should only be used to evaluate our results
of operations in conjunction with the corresponding GAAP measures.
We encourage investors to carefully consider our results under
GAAP, as well as our supplemental non-GAAP information and the
reconciliation between these presentations, to more fully
understand our business.
About DexCom, Inc.
DexCom, Inc., headquartered in San Diego, California, is
developing and marketing continuous glucose monitoring systems for
use by people with diabetes and by healthcare providers.
Cautionary Statement Regarding Forward-Looking
Statements
This press release contains forward-looking statements that are
not purely historical regarding Dexcom’s or its management’s
intentions, beliefs, expectations and strategies for the future.
All forward-looking statements and reasons why results might differ
included in this press release are made as of the date of this
release, based on information currently available to Dexcom, deal
with future events, are subject to various risks and uncertainties,
and actual results could differ materially from those anticipated
in those forward-looking statements. The risks and uncertainties
that may cause actual results to differ materially from Dexcom’s
current expectations are more fully described in Dexcom’s Annual
Report on Form 10-K for the period ended December 31, 2018, as
filed with the Securities and Exchange Commission on
February 21, 2019. Except as required by law, Dexcom assumes
no obligation to update any such forward-looking statement after
the date of this report or to conform these forward-looking
statements to actual results.
DexCom, Inc.
Table A
Consolidated Balance Sheets
(In millions, except par value and
share data)
March 31,2019
December 31,2018
Assets (Unaudited) Current assets: Cash and cash
equivalents $ 1,285.1 $ 1,137.0 Short-term marketable securities
72.9 248.6 Accounts receivable, net 204.7 226.7 Inventory 101.1
70.7 Prepaid and other current assets 27.0
16.5 Total current assets 1,690.8 1,699.5 Property and
equipment, net 221.4 183.1 Operating lease right-of-use assets 27.7
— Goodwill 18.6 18.7 Other assets 15.5 14.7
Total assets $ 1,974.0 $ 1,916.0
Liabilities and Stockholders’ Equity Current liabilities:
Accounts payable and accrued liabilities $ 169.1 $ 147.1 Accrued
payroll and related expenses 51.3 72.4 Operating lease liabilities,
current portion 12.3 — Deferred revenue 2.7
2.9 Total current liabilities 235.4 222.4 Long-term senior
convertible notes 1,022.4 1,010.3 Operating lease liabilities, net
of current portion 29.5 — Other long-term liabilities 18.1
20.0 Total liabilities 1,305.4
1,252.7 Commitments and contingencies Stockholders’
equity: Preferred stock, $0.001 par value, 5.0 million shares
authorized; no shares issued and outstanding at March 31, 2019 and
December 31, 2018 — — Common stock, $0.001 par value, 200.0 million
shares authorized; 92.1 million and 91.0 million shares issued and
outstanding, respectively, at March 31, 2019; and 91.1 million and
90.0 million shares issued and outstanding, respectively, at
December 31, 2018 0.1 0.1 Additional paid-in capital 1,590.6
1,560.6 Accumulated other comprehensive income 1.6 1.5 Accumulated
deficit (823.7 ) (798.9 ) Treasury stock, at cost; 0.8 million
shares at March 31, 2019 and December 31, 2018 (100.0 )
(100.0 ) Total stockholders’ equity 668.6
663.3 Total liabilities and stockholders’ equity $
1,974.0 $ 1,916.0
DexCom, Inc.
Table B
Consolidated Statements of
Operations
(In millions, except per share
data)
(Unaudited)
Three Months Ended March 31,
2019 2018
Revenue $ 280.5 $ 184.4 Cost of sales 111.7
65.5 Gross profit 168.8 118.9 Operating expenses Research
and development 59.0 44.8 Selling, general and administrative
124.2 104.8 Total operating expenses
183.2 149.6 Operating loss (14.4 )
(30.7 ) Interest expense (14.9 ) (4.8 ) Income (loss) from equity
investments (4.2 ) 7.4 Interest and other income (expense), net
6.9 4.1 Loss before income taxes (26.6
) (24.0 ) Income tax expense 0.3 0.2
Net loss $ (26.9 ) $ (24.2 ) Basic and diluted net loss per
share $ (0.30 ) $ (0.28 ) Shares used to compute basic and diluted
net loss per share 90.3 87.3
DexCom, Inc.
Table C
Revenue by Geography
(Dollars in millions)
(Unaudited)
Three Months Ended March 31,
2019 2018 U.S.
revenue $ 210.5 $ 145.4 Year over year growth 45 % 25 % % of total
revenue 75 % 79 % International revenue $ 70.0 $ 39.0 Year
over year growth 79 % 49 % % of total revenue 25 % 21 %
Total revenue (1) $ 280.5 $ 184.4 Year over year growth 52 % 30 %
(1)The sum of the revenue components may not equal total
revenue due to rounding.
DexCom, Inc.
Table D
Revenue by Component
(Dollars in millions)
(Unaudited)
Three Months Ended March 31,
2019 2018 Sensor
and other revenue(2) (3) $ 211.9 $ 131.9 Year over year growth 61 %
30 % % of total revenue 76 % 72 % Transmitter revenue(2) $
49.6 $ 37.7 Year over year growth 32 % 28 % % of total revenue 18 %
20 % Receiver revenue $ 19.0 $ 14.8 Year over year growth 28
% 25 % % of total revenue 7 % 8 % Total revenue(1) $ 280.5 $
184.4 Year over year growth 52 % 30 %
(1) The sum of the revenue components may
not equal total revenue due to rounding.
(2) Includes allocated subscription revenue. (3) Includes services,
freight, accessories, etc.
DexCom, Inc.
Table E
Itemized Reconciliation Between GAAP
and Non-GAAP Financial Measures
(In millions, except per share
data)
(Unaudited)
Three Months Ended March 31,
2019
2018(As
Adjusted)(1)
GAAP operating loss $ (14.4 ) $ (30.7 ) Amortization of
intangible assets 0.4 — Business transition and related costs(2)
6.4 2.0
Non-GAAP operating loss
$ (7.6 ) $ (28.7 )
GAAP net loss $ (26.9 ) $ (24.2 )
Share-based compensation 25.0 24.6 Depreciation and amortization
9.9 6.0 Business transition and related costs(2) 6.1 2.0
(Income) loss from equity
investments(3)
4.2 (7.4 ) Interest expense and interest income 7.5 3.3 Income tax
expense 0.3 0.2
Non-GAAP adjusted
EBITDA $ 26.1 $ 4.5
GAAP net loss $
(26.9 ) $ (24.2 ) Amortization of intangible assets 0.4 — Business
transition and related costs(2) 6.4 2.0 Non-cash interest
expense(4) 11.3 3.3
(Income) loss from equity
investments(3)
4.2 (7.4 ) Tax effect of adjustments(4) — —
Non-GAAP net loss $ (4.6 ) $ (26.3 )
GAAP
basic and diluted net loss per share $ (0.30 ) $ (0.28 )
Amortization of intangible assets — — Business transition and
related costs(2) 0.07 0.02 Non-cash interest expense(4) 0.13 0.04
(Income) loss from equity
investments(3)
0.05 (0.08 ) Tax effect of adjustments(5) — —
Non-GAAP basic and diluted net loss per
share(6) $ (0.05 ) $ (0.30 )
Shares used to
compute basic and diluted net loss per share 90.3
87.3 (1) The 2018 non-GAAP presentation is
adjusted to include amortization of intangible assets and business
transition and related costs to conform to the 2019 presentation.
(2) Business transition costs are primarily related to the
activities that DexCom announced on February 21, 2019.
(3) (Income) loss from equity investments
is related to our investment in Tandem Diabetes Care, Inc.
(4) Non-cash interest expense represents accretion of the debt
discount associated with our 2022 and 2023 Senior Convertible
Notes. (5) We are tax-effecting GAAP-only items at a 0% tax rate
because we record a full valuation allowance on our deferred tax
assets.
(6) The sum of the basic and diluted
non-GAAP net income (loss) per share components may not equal the
totals due to rounding.
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version on businesswire.com: https://www.businesswire.com/news/home/20190501005888/en/
INVESTOR RELATIONS CONTACT:Steven R. PacelliExecutive Vice
President, Strategy and Corporate Development(858)
200-0200www.dexcom.com
MEDIA CONTACT:Lisa Schmidtke(480) 292-0786
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