DexCom, Inc. (Nasdaq: DXCM) today reported its financial results
as of and for the quarter ended June 30, 2021.
Second Quarter 2021 Financial Highlights:
- Revenue grew 32% versus the same quarter of the prior year to
$595.1 million
- U.S. revenue growth of 26% and international revenue growth of
58%
- GAAP operating income of $101.0 million or 17.0% of revenue, an
increase of 200 basis points compared to the second quarter of
2020. Non-GAAP operating income* of $101.5 million or 17.1% of
revenue, an increase of 10 basis points over the same quarter of
the prior year
Strategic Highlights:
- In June, reported compelling data demonstrating the efficacy of
Dexcom’s current and future CGM platforms:
- The Lancet published results from the ALERTT1 randomized
controlled trial demonstrating superior clinical outcomes for users
of Dexcom G6 real-time CGM compared to intermittently scanned
CGM.1
- The Journal of the American Medical Association (JAMA)
published results from the MOBILE randomized controlled trial,
demonstrating strong clinical advantages of Dexcom CGM versus the
current standard of care in adults with poorly controlled Type 2
diabetes on basal insulin without prandial insulin.2
- Dexcom presented strong preliminary data for its
next-generation G7 CGM System at the International Conference on
Advanced Technologies & Treatments for Diabetes (ATTD)
conference.
- Advanced access to Dexcom CGM for people with diabetes in
several regions, including British Columbia as the first Canadian
province to establish coverage for Dexcom G6 CGM systems for people
with Type 1 diabetes and Type 2 diabetes on intensive insulin
therapy.
- After the conclusion of the quarter, announced FDA clearance of
Dexcom’s real-time API, furthering the company’s emphasis on
interoperable solutions for tailored experiences with Dexcom
CGM.
1 Visser et al., “Comparing real-time and intermittently scanned
continuous glucose monitoring in adults with type 1 diabetes
(ALERTT1): a 6-month, prospective, multicentre, randomised
controlled trial,” Lancet, June 2, 2021. (
https://doi.org/10.1016/S0140-6736(21)00789-3). Study results
included statistically significant differences in time in range,
HbA1c, time spent in severe hypoglycemia, Hypoglycemia Fear, and
severe hypoglycemia events. 2 Martens et al., “Effect of Continuous
Glucose Monitoring on Glycemic Control in Patients with Type 2
Diabetes Treated with Basal Insulin: A Randomized Clinical Trial,”
JAMA, June 2, 2021. (doi:10.1001/jama.2021.7444).
“Dexcom’s second quarter performance was characterized by strong
financial results and the continued advancement of our key
strategic initiatives,” said Kevin Sayer, Dexcom’s chairman,
president and CEO. “Our underlying momentum led to the increased
revenue and margin guidance that we reported today and leaves us
increasingly excited as we head into the second half of 2021.”
2021 Annual Guidance
Based on the strong second quarter results, Dexcom is increasing
its guidance for fiscal year 2021 revenue, Non-GAAP gross profit
margin, Non-GAAP operating margin, and Adjusted EBITDA margin to
the following levels:
- Revenue of approximately $2.35 - 2.40 billion (22-25%
growth)
- Non-GAAP Gross Profit Margin of approximately 67%
- Non-GAAP Operating Margin of approximately 14%
- Adjusted EBITDA Margin of approximately 24%
Second Quarter 2021 Financial Results
Revenue: In the second quarter of 2021, worldwide revenue
grew 32% to $595.1 million, up from $451.8 million in the second
quarter of 2020. Volume growth in conjunction with strong new
customer additions continues to be the primary driver of revenue
growth as awareness of real-time CGM increases.
Gross Profit: GAAP gross profit totaled $417.1 million or
70.1% of revenue for the second quarter of 2021, compared to $284.1
million or 62.9% of revenue in the second quarter of 2020.
Non-GAAP gross profit* totaled $417.1 million or 70.1% of
revenue for the second quarter of 2020, compared to $289.7 million
or 64.1% of revenue in the second quarter of 2020. The second
quarter 2020 non-GAAP amount excludes $5.6 million of incremental
labor costs incurred as a result of the COVID-19 outbreak.
Operating Income: GAAP operating income for the second
quarter of 2021 was $101.0 million, compared to GAAP operating
income of $67.8 million for the second quarter of 2020.
Non-GAAP operating income* for the second quarter of 2021 was
$101.5 million, compared to non-GAAP operating income of $76.7
million for the second quarter of 2020. The second quarter 2020
non-GAAP amount excludes $7.8 million of incremental costs incurred
as a result of the COVID-19 outbreak, primarily related to payroll,
consulting support, IT infrastructure and facilities costs.
Net Income and Net Income per Share: GAAP net income was
$62.9 million, or $0.63 per diluted share, for the second quarter
of 2021, compared to GAAP net income of $46.3 million, or $0.48 per
diluted share, for the same quarter of 2020.
Non-GAAP net income* was $75.4 million, or $0.76 per diluted
share, for the second quarter of 2021, compared to non-GAAP net
income of $77.1 million, or $0.79 per diluted share, for the same
quarter of 2020. The second quarter 2021 non-GAAP amount excludes
$20.8 million of non-cash interest expense related to Dexcom’s
senior convertible notes and $8.8 million of tax adjustments
primarily related to excess tax benefits from stock compensation
vesting.
The second quarter 2020 non-GAAP amount excludes $16.5 million
of non-cash interest expense related to Dexcom’s senior convertible
notes, $7.8 million of incremental costs incurred as a result of
the COVID-19 outbreak, and a $5.4 million loss on extinguishment of
debt.
Cash and Liquidity: As of June 30, 2021, Dexcom held
$2.58 billion in cash, cash equivalents and marketable securities
and our revolving credit facility remains undrawn. The cash balance
represents significant financial and strategic flexibility as
Dexcom continues to expand production capacity and explore new
market opportunities.
* See Table E below for a reconciliation of these GAAP and
non-GAAP financial measures.
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
Investor Relations website at investors.dexcom.com by navigating to
“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 “49591483” approximately five minutes prior to
the start time.
Statement Regarding Use of Non-GAAP Financial
Measures
This press release and the accompanying tables include non-GAAP
financial measures. For a description of these non-GAAP financial
measures, including the reasons management uses each measure, and
reconciliations of these non-GAAP financial measures to the most
directly comparable financial measures prepared in accordance with
Generally Accepted Accounting Principles (GAAP), please see the
section of the accompanying tables titled “About Non-GAAP Financial
Measures” as well as the related Table E.
About DexCom, Inc.
DexCom, Inc. empowers people to take control of diabetes through
innovative continuous glucose monitoring (CGM) systems.
Headquartered in San Diego, California, Dexcom has emerged as a
leader of diabetes care technology. By listening to the needs of
users, caregivers, and providers, Dexcom simplifies and improves
diabetes management around the world.
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,
including statements with respect to the impacts of the COVID-19
pandemic on Dexcom and our outlook for the full year 2021. 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 Quarterly
Report on Form 10-Q for the period ended June 30, 2021, as filed
with the Securities and Exchange Commission on July 29, 2021.
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
data)
June 30, 2021
December 31, 2020
Assets
(Unaudited)
Current assets:
Cash and cash equivalents
$
1,158.8
$
817.6
Short-term marketable securities
1,426.1
1,890.1
Accounts receivable, net
483.5
428.5
Inventory
319.3
234.7
Prepaid and other current assets
86.5
53.9
Total current assets
3,474.2
3,424.8
Property and equipment, net
676.0
515.3
Operating lease right-of-use assets
94.8
93.3
Goodwill
19.1
19.3
Deferred tax assets
216.4
216.4
Other assets
23.3
21.4
Total assets
$
4,503.8
$
4,290.5
Liabilities and Stockholders’
Equity
Current liabilities:
Accounts payable and accrued
liabilities
$
482.0
$
481.1
Accrued payroll and related expenses
98.1
114.3
Short-term operating lease liabilities
18.8
16.5
Deferred revenue
1.8
2.2
Total current liabilities
600.7
614.1
Long-term senior convertible notes
1,710.7
1,667.2
Long-term operating lease liabilities
107.1
101.8
Other long-term liabilities
87.7
80.9
Total liabilities
2,506.2
2,464.0
Commitments and contingencies
Stockholders’ equity:
Preferred stock, $0.001 par value, 5.0
million shares authorized; no shares issued and outstanding at June
30, 2021 and December 31, 2020
—
—
Common stock, $0.001 par value, 200
million shares authorized; 97.5 million and 96.7 million shares
issued and outstanding, respectively, at June 30, 2021; and 96.9
million and 96.1 million shares issued and outstanding,
respectively, at December 31, 2020
0.1
0.1
Additional paid-in capital
2,193.6
2,125.3
Accumulated other comprehensive income
2.8
3.2
Accumulated deficit
(98.9
)
(202.1
)
Treasury stock, at cost; 0.8 million
shares at June 30, 2021 and December 31, 2020
(100.0
)
(100.0
)
Total stockholders’ equity
1,997.6
1,826.5
Total liabilities and stockholders’
equity
$
4,503.8
$
4,290.5
DexCom, Inc.
Table B
Consolidated Statements of
Operations
(In millions, except per share
data)
(Unaudited)
Three Months Ended
June 30,
Six Months Ended
June 30,
2021
2020
2021
2020
Revenues
$
595.1
$
451.8
$
1,100.1
$
856.9
Cost of sales
178.0
167.7
339.1
316.3
Gross profit
417.1
284.1
761.0
540.6
Operating expenses:
Research and development
129.1
79.9
238.5
153.0
Selling, general and administrative
187.0
136.4
375.6
286.2
Total operating expenses
316.1
216.3
614.1
439.2
Operating income
101.0
67.8
146.9
101.4
Interest expense
(25.2)
(20.3)
(50.0)
(35.7)
Loss on extinguishment of debt
—
(5.4)
—
(5.4)
Interest and other income, net
0.9
4.1
1.0
8.3
Income before income taxes
76.7
46.2
97.9
68.6
Income tax expense (benefit)
13.8
(0.1)
(5.3)
2.4
Net income
$
62.9
$
46.3
$
103.2
$
66.2
Basic net income per share
$
0.65
$
0.49
$
1.07
$
0.71
Shares used to compute basic net income
per share
96.7
93.8
96.5
92.8
Diluted net income per share
$
0.63
$
0.48
$
1.04
$
0.69
Shares used to compute diluted net income
per share
99.6
97.0
99.5
95.6
DexCom, Inc.
Table C
Revenue by Geography
(Dollars in millions)
(Unaudited)
Three Months Ended
June 30,
Six Months Ended
June 30,
2021
2020
2021
2020
U.S. revenue
$
461.5
$
367.1
$
842.7
$
659.4
Year over year growth
26
%
38
%
28
%
38
%
% of total revenue
78
%
81
%
77
%
77
%
International revenue
$
133.6
$
84.7
$
257.4
$
197.5
Year over year growth
58
%
21
%
30
%
41
%
% of total revenue
22
%
19
%
23
%
23
%
Total revenue (1)
$
595.1
$
451.8
$
1,100.1
$
856.9
Year over year growth
32
%
34
%
28
%
39
%
(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
June 30,
Six Months Ended
June 30,
2021
2020
2021
2020
Sensor and other revenue (1) (2)
$
494.5
$
364.5
$
918.8
$
689.5
Year over year growth
36
%
40
%
33
%
46
%
% of total revenue
83
%
81
%
84
%
80
%
Hardware revenue (1)(3)
$
100.6
$
87.3
$
181.3
$
167.4
Year over year growth
15
%
15
%
8
%
16
%
% of total revenue
17
%
19
%
16
%
20
%
Total revenue (4)
$
595.1
$
451.8
$
1,100.1
$
856.9
Year over year growth
32
%
34
%
28
%
39
%
(1) Includes allocated subscription revenue. (2) Includes
services, freight, accessories, etc. (3) Includes transmitter and
receiver revenue. (4) The sum of the revenue components may not
equal total revenue due to rounding.
DexCom, Inc.
Table E
Itemized Reconciliation
Between GAAP and Non-GAAP Financial Measures
(In millions, except per share
data)
(Unaudited)
Three Months Ended
June 30,
Six Months Ended
June 30,
2021
2020
2021
2020
GAAP gross profit
$
417.1
$
284.1
$
761.0
$
540.6
COVID-19 costs (1)
—
5.6
—
7.8
Non-GAAP gross profit
$
417.1
$
289.7
$
761.0
$
548.4
GAAP operating income
$
101.0
$
67.8
$
146.9
$
101.4
Amortization of acquired intangible
assets
0.5
0.6
1.0
1.2
Business transition and related costs
(2)
—
0.5
—
0.3
COVID-19 costs (1)
—
7.8
—
11.0
Litigation settlement costs (3)
—
—
—
6.1
Non-GAAP operating income
$
101.5
$
76.7
$
147.9
$
120.0
GAAP net income
$
62.9
$
46.3
$
103.2
$
66.2
Business transition and related costs
(2)
—
0.5
—
0.3
COVID-19 costs (1)
—
7.8
—
11.0
Depreciation and amortization
23.5
15.3
44.4
28.3
Litigation settlement costs (3)
—
—
—
6.1
Loss on extinguishment of debt (5)
—
5.4
—
5.4
Share-based compensation
31.6
30.7
59.6
54.6
Interest expense and interest income
24.8
16.7
49.1
26.1
Income tax (benefit) expense
13.8
(0.1)
(5.3)
2.4
Adjusted EBITDA
$
156.6
$
122.6
$
251.0
$
200.4
GAAP net income
$
62.9
$
46.3
$
103.2
$
66.2
Amortization of acquired intangible
assets
0.5
0.6
1.0
1.2
Business transition and related costs
(2)
—
0.5
—
0.3
COVID-19 costs (1)
—
7.8
—
11.0
Litigation settlement costs (3)
—
—
—
6.1
Non-cash interest expense (4)
20.8
16.5
41.3
28.3
Loss on extinguishment of debt (5)
—
5.4
—
5.4
Adjustments related to taxes (6)
(8.8)
—
(37.3)
—
Non-GAAP net income
$
75.4
$
77.1
$
108.2
$
118.5
GAAP diluted net income per
share
$
0.63
$
0.48
$
1.04
$
0.69
Amortization of acquired intangible
assets
0.01
0.01
0.01
0.01
Business transition and related costs
(2)
—
0.01
—
—
COVID-19 costs (1)
—
0.08
—
0.12
Litigation settlement costs (3)
—
—
—
0.06
Non-cash interest expense (4)
0.21
0.17
0.42
0.30
Loss on extinguishment of debt (5)
—
0.06
—
0.06
Adjustments related to taxes (6)
(0.09)
—
(0.37)
—
Non-GAAP net income per share
(7)
$
0.76
$
0.79
$
1.09
$
1.24
GAAP diluted weighted-average shares
outstanding
99.6
97.0
99.5
95.6
Non-GAAP diluted weighted-average shares
outstanding
99.6
97.0
99.5
95.6
(1) Represents costs associated with the COVID-19 outbreak
related to taking the necessary precautions for essential personnel
to operate safely both in person as well as remotely. (2) Business
transition and related costs are primarily related to the
Restructuring Plan that Dexcom announced on February 21, 2019. (3)
Represents costs associated with a settlement of litigation and
proceedings related to a patent infringement lawsuit. (4) Non-cash
interest expense represents accretion of the debt discount
associated with our senior convertible notes. (5)Loss on
extinguishment of debt is related to the repurchase and conversions
of our Senior Convertible Notes due 2022. (6) For the three and six
months ended June 30, 2021, tax adjustments were primarily related
to the excess tax benefits from stock compensation vesting. For the
three and six months ended June 30, 2020, there were no tax
adjustments due to the valuation allowance against deferred tax
assets. (7) The sum of the non-GAAP net income per share components
may not equal the totals due to rounding.
ABOUT NON-GAAP FINANCIAL MEASURES
The accompanying press release dated July 29, 2021 contains
non-GAAP financial measures. These non-GAAP financial measures
include non-GAAP gross profit, non-GAAP operating income (loss),
non-GAAP net income (loss), and non-GAAP net income (loss) per
share as well as adjusted EBITDA.
We use these non-GAAP financial measures for financial and
operational decision making and as a means to evaluate
period-to-period comparisons. We believe that they provide useful
information about operating results, enhance the overall
understanding of our operating performance and future prospects,
and allow for greater transparency with respect to key metrics used
by senior management in our financial and operational decision
making. Our non-GAAP financial measures exclude amounts that we do
not consider part of ongoing operating results when planning and
forecasting and when assessing the performance of the organization
and our senior management. We compute non-GAAP financial measures
using the same consistent method from quarter to quarter and year
to year. We may consider whether other significant items that arise
in the future should be excluded from our non-GAAP financial
measures.
We report non-GAAP financial measures in addition to, and not as
a substitute for, or superior to, measures of financial performance
prepared in accordance with GAAP. These non-GAAP financial measures
are not based on any comprehensive set of accounting rules or
principles, differ from GAAP measures with the same names, and may
differ from non-GAAP financial measures with the same or similar
names that are used by other companies. We believe that non-GAAP
financial measures should only be used to evaluate our results of
operations in conjunction with the corresponding GAAP financial
measures. We encourage investors to carefully consider our results
under GAAP, as well as our supplemental non-GAAP information and
the reconciliations between these presentations, to more fully
understand our business.
Table E reconciles the non-GAAP financial measures in the press
release to the most directly comparable financial measures prepared
in accordance with Generally Accepted Accounting Principles
(GAAP).
We exclude the following items from non-GAAP financial measures
for non-GAAP gross profit, non-GAAP operating income (loss),
non-GAAP net income (loss), and non-GAAP net income (loss) per
share:
- Amortization of acquired intangible assets
- Collaborative research and development fees for milestone and
incentive payments under our collaborative research and development
arrangements paid by issuing shares of our common stock
- Business transition and related costs associated with
acquisition, integration and business transition activities,
including severance, relocation, consulting, leasehold exit costs,
third party merger and acquisition costs, and other costs directly
associated with such activities.
- COVID-19 costs associated with the COVID-19 outbreak related to
taking the necessary precautions for essential personnel to operate
safely both in person as well as remotely. Costs incurred include
items like incremental payroll costs, consulting support, IT
infrastructure and facilities related costs
- Litigation settlement costs
- Non-cash interest expense on senior convertible notes for the
accretion of the debt discount associated with our senior
convertible notes
- Loss on extinguishment of debt associated with repurchases
and/or conversions of our senior convertible notes
- Adjustments related to taxes for the excluded items above, as
well as excess benefits or tax deficiencies from stock-based
compensation, the one-time impact from release of valuation
allowance in 2020, and the quarterly impact of other discrete
items
Adjusted EBITDA excludes non-cash operating charges for
share-based compensation, depreciation and amortization as well as
non-operating items such as interest income, interest expense, loss
on extinguishment of debt, income and loss from equity investments,
and income tax expense or benefit. For the reasons explained above,
adjusted EBITDA also excludes non-cash collaborative research and
development fees, business transition and related costs, COVID-19
costs, and litigation settlement costs.
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version on businesswire.com: https://www.businesswire.com/news/home/20210729005240/en/
INVESTOR RELATIONS CONTACT: Sean Christensen Senior Director -
Investor Relations and Corporate FP&A
investor-relations@dexcom.com (858) 200-0200
MEDIA CONTACT: James McIntosh (619) 884-2118
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