DexCom, Inc. (Nasdaq: DXCM) today reported its financial results
as of and for the quarter and fiscal year ended December 31,
2023.
Fourth Quarter 2023 Financial Highlights:
- Revenue grew 27% versus the same quarter of the prior year to
$1.03 billion on a reported basis and 26% on an organic1
basis.
- U.S. revenue growth of 27% and international revenue growth of
27% on a reported basis. International revenue growth was 23% on an
organic1 basis.
- GAAP operating income of $216.9 million or 21.0% of revenue, an
increase of 560 basis points compared to the fourth quarter of
2022. Non-GAAP operating income* of $242.7 million or 23.5% of
reported revenue, an increase of 240 basis points compared with the
same quarter of the prior year.
Full Year 2023 Financial Highlights:
- Full year revenue grew 24% versus the prior year to $3.62
billion on a reported basis and 24% on an organic2 basis.
- U.S. revenue growth of 23% and international revenue growth of
30% on a reported basis. International revenue growth was 30% on an
organic2 basis.
- GAAP operating income of $597.7 million or 16.5% of revenue, an
increase of 310 basis points compared to 2022. Non-GAAP operating
income* of $718.6 million or 19.8% of revenue, an increase of 310
basis points over the prior year.
Fourth Quarter 2023 Strategic Highlights:
- Submitted Stelo, Dexcom’s new glucose sensor for people with
type 2 diabetes who do not use insulin, to the FDA for review.
- Advanced pump connectivity with the integration of Dexcom G7
and Tandem Diabetes Care’s t:slim X2 insulin pump software, as well
as the iLet Bionic Pancreas from Beta Bionics, supporting greater
customer choice in insulin delivery.
- Submitted Dexcom’s direct-to-watch feature, which will enable
customers to use a smartwatch as their primary receiver, to the FDA
for review.
- In support of National Diabetes Month, partnered with several
Dexcom Warriors in a global awareness campaign to advocate for
greater access to diabetes technology.
“2023 was an incredible year for Dexcom with significantly
expanded access, another year of record new customer starts, and
growing momentum behind our global rollout of Dexcom G7,” said
Kevin Sayer, Dexcom’s chairman, president and CEO. “We are looking
forward to another great year in 2024 as we strive to improve the
health of significantly more people around the world with Dexcom
CGM technology.”
___________________________________________
1 Fourth quarter 2023 organic
revenue is $1.03 billion and excludes $8.2 million of foreign
exchange impact.
2 Full year 2023 organic revenue
is $3.6 billion and excludes $0.2 million of foreign exchange
impact.
2024 Annual Guidance
The company is reiterating fiscal year 2024 guidance for
Revenue, Non-GAAP Gross Profit Margin and Non-GAAP Operating
Margin, and establishing Adjusted EBITDA Margin guidance at the
following levels:
- Revenue of approximately $4.15 - 4.35 billion (16 - 21% organic
growth3)
- Non-GAAP Gross Profit Margin of approximately 63 - 64%
- Non-GAAP Operating Margin of approximately 20%
- Adjusted EBITDA Margin of approximately 29%
___________________________________________
3 Organic growth excludes non-CGM
revenue acquired or divested in the trailing twelve months, as well
as the impact of foreign exchange. Assumes divestiture of certain
non-CGM assets that accounted for approximately $30 million of
revenue in fiscal year 2023. 2024 organic growth expectation
calculated excluding that contribution from the 2023 base.
Fourth Quarter 2023 Financial Results
Revenue: In the fourth quarter of 2023, worldwide revenue
grew 27% to $1.03 billion on a reported basis, up from $815.2
million in the fourth quarter of 2022. 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 $656.6 million or
63.5% of revenue for the fourth quarter of 2023, compared to $541.3
million or 66.4% of revenue in the fourth quarter of 2022.
Non-GAAP gross profit* totaled $663.8 million or 64.2% of
revenue for the fourth quarter of 2023, compared to $543.7 million
or 66.7% of reported revenue in the fourth quarter of 2022.
Operating Income: GAAP operating income for the fourth
quarter of 2023 was $216.9 million, compared to GAAP operating
income of $125.4 million for the fourth quarter of 2022.
Non-GAAP operating income* for the fourth quarter of 2023 was
$242.7 million, compared to non-GAAP operating income of $172.1
million for the fourth quarter of 2022.
Net Income and Diluted Net Income Per Share: GAAP net
income was $256.3 million, or $0.62 per diluted share, for the
fourth quarter of 2023, compared to GAAP net income of $91.8
million, or $0.22 per diluted share, for the same quarter of
2022.
Non-GAAP net income* was $202.8 million, or $0.50 per diluted
share, for the fourth quarter of 2023, compared to non-GAAP net
income of $136.3 million, or $0.34 per diluted share, for the same
quarter of 2022. The fourth quarter 2023 non-GAAP net income
excludes $10.1 million of amortization of intangible assets, $2.0
million of business transition and related costs, $13.7 million of
intellectual property litigation costs, $0.9 million of income from
equity investments, and $78.4 million of tax adjustments.
Cash and Liquidity: As of December 31, 2023, Dexcom held
$2.72 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 (888)
414-4585 (US/Canada) or (646) 960-0331 (International) and use the
confirmation ID “9430114” 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. We have not reconciled
our total Revenue, Non-GAAP Gross Profit Margin, Non-GAAP Operating
Margin and Adjusted EBITDA Margin estimates for fiscal year 2023
because certain items that impact these figures are uncertain or
out of our control and cannot be reasonably predicted. Accordingly,
a reconciliation of total Revenue, Non-GAAP Gross Profit Margin,
Non-GAAP Operating Margin and Adjusted EBITDA Margin is not
available without unreasonable effort.
About DexCom, Inc.
DexCom, Inc. empowers people to take real-time control of health
through innovative continuous glucose monitoring (CGM) systems.
Headquartered in San Diego, Calif., and with operations across
Europe and select parts of Asia/Oceania, Dexcom has emerged as a
leader of diabetes care technology. By listening to the needs of
users, caregivers, and providers, Dexcom works to simplify and
improve diabetes management around the world. For more information
about Dexcom CGM, visit www.dexcom.com.
Category: IR
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 those related to Dexcom’s estimated total Revenue,
Non-GAAP Gross Profit Margin, Non-GAAP Operating Margin, and
Adjusted EBITDA Margin for fiscal 2024, as well as expected growth
rates as compared to the year ended December 31, 2023. All
forward-looking statements 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 “Risk Factors” and “Management’s Discussion
and Analysis of Financial Condition and Results of Operations”
sections of Dexcom’s most recently filed periodic reports on Form
10-K and Form 10-Q and subsequent filings filed with the Securities
and Exchange Commission. 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)
December 31, 2023
December 31, 2022
Assets
Current assets:
Cash and cash equivalents
$
566.3
$
642.3
Short-term marketable securities
2,157.8
1,813.9
Accounts receivable, net
973.9
713.3
Inventory
559.6
306.7
Prepaid and other current assets
168.3
192.6
Total current assets
4,425.9
3,668.8
Property and equipment, net
1,113.1
1,055.6
Operating lease right-of-use assets
71.4
80.0
Goodwill
25.2
25.7
Intangibles, net
134.5
173.3
Deferred tax assets
419.4
341.2
Other assets
75.0
47.1
Total assets
$
6,264.5
$
5,391.7
Liabilities and Stockholders’
Equity
Current liabilities:
Accounts payable and accrued
liabilities
$
1,345.5
$
901.8
Accrued payroll and related expenses
171.0
134.3
Current portion of long-term senior
convertible notes
—
772.6
Short-term operating lease liabilities
21.1
20.5
Deferred revenue
18.4
10.1
Total current liabilities
1,556.0
1,839.3
Long-term senior convertible notes
2,434.2
1,197.7
Long-term operating lease liabilities
80.1
94.6
Other long-term liabilities
125.6
128.3
Total liabilities
4,195.9
3,259.9
Commitments and contingencies
Stockholders’ equity:
Preferred stock, $0.001 par value, 5.0
million shares authorized; no shares issued and outstanding at
December 31, 2023 and December 31, 2022
—
—
Common stock, $0.001 par value, 800.0
million shares authorized; 407.2 million and 385.4 million shares
issued and outstanding, respectively, at December 31, 2023; and
393.2 million and 386.3 million shares issued and outstanding,
respectively, at December 31, 2022
0.4
0.4
Additional paid-in capital
3,514.6
2,258.1
Accumulated other comprehensive loss
(16.7
)
(11.6
)
Retained earnings
1,021.4
479.9
Treasury stock, at cost; 21.8 million
shares at December 31, 2023 and 6.9 million shares at December 31,
2022
(2,451.1
)
(595.0
)
Total stockholders’ equity
2,068.6
2,131.8
Total liabilities and stockholders’
equity
$
6,264.5
$
5,391.7
DexCom, Inc.
Table B
Consolidated Statements of
Operations
(In millions, except per share
data)
Three Months Ended
December 31,
Twelve Months Ended
December 31,
2023
2022
2023
2022
Revenue
$
1,034.5
$
815.2
$
3,622.3
$
2,909.8
Cost of sales
377.9
273.9
1,333.4
1,026.7
Gross profit
656.6
541.3
2,288.9
1,883.1
Operating expenses:
Research and development
136.1
116.3
505.8
484.2
Selling, general and administrative
303.6
299.6
1,185.4
1,007.7
Total operating expenses
439.7
415.9
1,691.2
1,491.9
Operating income
216.9
125.4
597.7
391.2
Other income (expense), net
29.3
7.8
112.7
(0.4
)
Income before income taxes
246.2
133.2
710.4
390.8
Income tax expense (benefit)
(10.1
)
41.4
168.9
49.6
Net income
$
256.3
$
91.8
$
541.5
$
341.2
Basic net income per share
$
0.67
$
0.24
$
1.40
$
0.88
Shares used to compute basic net income
per share
384.1
386.3
386.0
389.4
Diluted net income per share
$
0.62
$
0.22
$
1.30
$
0.82
Shares used to compute diluted net income
per share
415.9
425.9
425.5
427.5
DexCom, Inc.
Table C
Revenue by Geography
(Dollars in millions)
(Unaudited)
Three Months Ended
December 31,
Twelve Months Ended
December 31,
2023
2022
2023
2022
U.S. revenue
$
769.1
$
606.4
$
2,625.3
$
2,142.0
Year over year growth
27
%
17
%
23
%
16
%
% of total revenue
74
%
74
%
72
%
74
%
International revenue
$
265.4
$
208.8
$
997.0
$
767.8
Year over year growth
27
%
15
%
30
%
28
%
% of total revenue
26
%
26
%
28
%
26
%
Total revenue (1)
$
1,034.5
$
815.2
$
3,622.3
$
2,909.8
Year over year growth
27
%
17
%
24
%
19
%
(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
December 31,
Twelve Months Ended
December 31,
2023
2022
2023
2022
Sensor and other revenue (1) (2)
$
947.0
$
714.8
$
3,250.7
$
2,522.3
Year over year growth
32
%
19
%
29
%
22
%
% of total revenue
92
%
88
%
90
%
87
%
Hardware revenue (1) (3)
$
87.5
$
100.4
$
371.6
$
387.5
Year over year growth
(13
) %
1
%
(4
)%
1
%
% of total revenue
8
%
12
%
10
%
13
%
Total revenue (4)
$
1,034.5
$
815.2
$
3,622.3
$
2,909.8
Year over year growth
27
%
17
%
24
%
19
%
(1) Includes allocated subscription
revenue.
(2) Includes services, freight,
accessories, Non-CGM acquired revenue, 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
December 31,
Twelve Months Ended
December 31,
2023
2022
2023
2022
GAAP gross profit
$
656.6
$
541.3
$
2,288.9
$
1,883.1
Amortization of intangible assets (1)
7.2
2.4
28.6
2.4
Non-GAAP gross profit
$
663.8
$
543.7
$
2,317.5
$
1,885.5
GAAP operating income
$
216.9
$
125.4
$
597.7
$
391.2
Amortization of intangible assets (1)
10.1
4.2
36.7
9.9
Business transition and related costs
(2)
2.0
24.1
4.9
39.5
Intellectual property litigation costs
(3)
13.7
18.4
79.3
44.5
Non-GAAP operating income
$
242.7
$
172.1
$
718.6
$
485.1
GAAP net income
$
256.3
$
91.8
$
541.5
$
341.2
Business transition and related costs
(2)
2.0
23.9
4.6
39.3
Depreciation and amortization
52.5
36.3
186.0
155.9
Intellectual property litigation costs
(3)
13.7
18.4
79.3
44.5
Income from equity investments (4)
(0.9
)
—
(1.9
)
(0.2
)
Share-based compensation
36.9
34.0
150.8
126.5
Interest expense and interest income
(28.9
)
(8.7
)
(114.7
)
(5.2
)
Income tax (benefit) expense
(10.1
)
41.4
168.9
49.6
Adjusted EBITDA
$
321.5
$
237.1
$
1,014.5
$
751.6
GAAP net income
$
256.3
$
91.8
$
541.5
$
341.2
Amortization of intangible assets (1)
10.1
4.2
36.7
9.9
Business transition and related costs
(2)
2.0
24.1
4.9
39.5
Intellectual property litigation costs
(3)
13.7
18.4
79.3
44.5
Income from equity investments (4)
(0.9
)
—
(1.9
)
(0.2
)
Adjustments related to taxes (5)
(78.4
)
(2.2
)
(47.0
)
(84.9
)
Non-GAAP net income
$
202.8
$
136.3
$
613.5
$
350.0
GAAP net income
$
256.3
$
91.8
$
541.5
$
341.2
Interest expense on senior convertible
notes, net of tax
3.0
2.8
12.6
11.0
GAAP net income used for diluted EPS,
if-converted (6)
$
259.3
$
94.6
$
554.1
$
352.2
Non-GAAP net income
$
202.8
$
136.3
$
613.5
$
350.0
Interest expense on senior convertible
notes, net of tax
1.2
1.2
4.9
4.8
Non-GAAP net income used for diluted
EPS, if-converted (6)
$
204.0
$
137.5
$
618.4
$
354.8
DexCom, Inc.
Table E (Continued)
Itemized Reconciliation
Between GAAP and Non-GAAP Financial Measures
(In millions, except per share
data)
(Unaudited)
Three Months Ended
December 31,
Twelve Months Ended
December 31,
2023
2022
2023
2022
GAAP diluted net income per share
(6)
$
0.62
$
0.22
$
1.30
$
0.82
Amortization of intangible assets (1)
0.02
0.01
0.09
0.02
Business transition and related costs
(2)
—
0.06
0.01
0.10
Intellectual property litigation costs
(3)
0.03
0.05
0.19
0.11
Income from equity investments (4)
—
—
—
—
Adjustments related to taxes (5)
(0.19
)
(0.01
)
(0.12
)
(0.21
)
Impact of adjustment to GAAP diluted
shares (7)
0.01
—
0.03
0.01
Non-GAAP diluted net income per share
(6) (8)
$
0.50
$
0.34
$
1.52
$
0.87
GAAP diluted weighted-average shares
outstanding
415.9
425.9
425.5
427.5
Non-GAAP diluted weighted-average shares
outstanding
406.6
407.0
407.3
408.6
Reconciliation of non-GAAP diluted
weighted-average shares outstanding:
GAAP diluted weighted-average shares
outstanding
415.9
425.9
425.5
427.5
Adjustment for dilutive impact of senior
convertible notes due 2023 (9)
(1.6
)
(18.9
)
(13.1
)
(18.9
)
Adjustment for dilutive impact of senior
convertible notes due 2028 (9)
(7.7
)
—
(5.1
)
—
Non-GAAP diluted weighted-average shares
outstanding
406.6
407.0
407.3
408.6
(1) Represents amortization of acquired
intangible assets.
(2) For the three and twelve months ended
December 31, 2023, business transition and related costs are
primarily related to rent for vacated office space in San Diego,
California. For the three months ended December 31, 2022, business
transition and related costs are primarily related to vacating a
building in San Diego, resulting in a non-cash impairment charge of
$23 million. For the twelve months ended December 31, 2022,
business transition and related costs are primarily related to
consulting fees and expenses as the result of transitioning to a
flexible working environment, including an impairment charge and
accelerated depreciation of tenant improvements.
(3) We have excluded third party
attorney’s fees, costs, and expenses incurred by the Company
exclusively in connection with the Company’s patent infringement
litigation against Abbott Diabetes Care, Inc., as further described
in the section titled “Legal Proceedings” appearing in the
Company’s Annual Report on Form 10-K for the year ended December
31, 2023.
(4) Represents a gain from the sale of an
equity investment.
(5) For the three months ended December
31, 2023, tax adjustments are primarily related to the Verily
sales-based milestone payment. For the twelve months ended December
31, 2023, tax adjustments are primarily related to the tax effect
of non-GAAP adjustments, including the intra-entity transfer of
certain intellectual property and excess tax benefits from
share-based compensation for employees. For the three months ended
December 31, 2022, tax adjustments are primarily related to the tax
effect of non-GAAP adjustments. For the twelve months ended
December 31, 2022, tax adjustments are primarily related to excess
tax benefits recognized from share-based compensation for employees
and the Verily regulatory milestone payment.
(6) When our senior convertible notes are
dilutive on a GAAP or non-GAAP basis, net income used for
calculating GAAP and non-GAAP diluted net income per share includes
an interest expense add back, net of tax, under the if-converted
method. In loss periods, basic and diluted net loss per share are
the same since the effect of potential common shares is
anti-dilutive and therefore excluded.
(7) The adjustments are for the transition
from GAAP diluted net income per share to non-GAAP diluted net
income per share due to our senior convertible notes.
(8) The sum of the non-GAAP per share
components may not equal the totals due to rounding.
(9) We adjust for the dilutive effect of
our senior convertible notes when the effect is not the same on a
GAAP and non-GAAP basis for a given period.
ABOUT NON-GAAP FINANCIAL MEASURES
The accompanying press release dated February 8, 2024 contains
non-GAAP financial measures. These non-GAAP financial measures
include organic revenue, non-GAAP gross profit margin, non-GAAP
operating income, non-GAAP operating margin, non-GAAP net income,
non-GAAP diluted net income per share, and non-GAAP diluted
weighted average shares outstanding, 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 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
therefore 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.
Management believes organic revenue is a meaningful metric to
investors as it provides a more consistent comparison of the
company’s revenue to prior periods as well as to industry peers. We
exclude the following items from the non-GAAP financial measure for
organic revenue:
- The effect of non-CGM revenue acquired or divested in the
trailing twelve months.
- The effect of foreign currency fluctuations.
Management believes that the 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.
Table E reconciles the non-GAAP financial measures in the press
release to the most directly comparable financial measures prepared
in accordance with GAAP.
We exclude the following items from non-GAAP financial measures
for non-GAAP gross profit, non-GAAP operating income, non-GAAP
operating margin, non-GAAP net income, and non-GAAP diluted net
income per share:
- Amortization of acquired intangible assets
- Business transition and related costs associated with
acquisition and divestiture, 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
- Income or loss from equity investments
- Third party intellectual property litigation costs in
connection with the Company's patent infringement litigation
against Abbott Diabetes Care, Inc.
- Litigation settlement costs
- Gain or loss on extinguishment of debt
- Adjustments related to taxes for the excluded items above, as
well as excess benefits or tax deficiencies from stock-based
compensation, 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, gain
or loss on extinguishment of debt, income or loss from equity
investments, and income tax expense or benefit. For the reasons
explained above, adjusted EBITDA also excludes business transition
and related costs, litigation settlement costs, and intellectual
property litigation costs.
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version on businesswire.com: https://www.businesswire.com/news/home/20240208206949/en/
INVESTOR RELATIONS CONTACT: Sean Christensen Vice President -
Finance and Investor Relations investor-relations@dexcom.com (858)
203-6657
MEDIA CONTACT: James McIntosh (619) 884-2118
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