DexCom, Inc. (Nasdaq: DXCM) today reported its financial results
as of and for the quarter ended March 31, 2024.
First Quarter 2024 Financial Highlights:
- Revenue grew 24% year-over-year to $921.0 million on a reported
basis and 25% year-over-year on an organic1 basis.
- U.S. revenue and international revenue both grew 24% on a
reported basis and international revenue grew 26% on an organic1
basis, all on a year-over-year basis.
- GAAP operating income of $101.1 million or 11.0% of revenue, an
increase of 460 basis points compared to the first quarter of 2023.
Non-GAAP operating income* of $140.2 million or 15.2% of reported
revenue, an increase of 460 basis points compared to the first
quarter of 2023.
First Quarter 2024 Strategic Highlights:
- Received FDA clearance for Stelo, Dexcom’s new CGM system
designed for people with type 2 diabetes who are not on insulin
therapy, as the first glucose biosensor in the U.S. cleared for use
without a prescription.
- Launched Dexcom ONE+ into eight European countries, bringing a
smaller form factor, shorter warm up time, and improved sensor
accuracy to this customer base.
- Received FDA clearance for the Direct-to-Watch feature for
Dexcom G7 and initiated launches in the United Kingdom and
Ireland.
- Published annual Sustainability Report, which provided updates
on Dexcom’s access to healthcare strategy, enhanced human capital
disclosure, and expanded greenhouse gas emissions reporting.
“Dexcom is off to a great start in 2024, delivering another
quarter of strong financial results while advancing several key
strategic initiatives,” said Kevin Sayer, Dexcom’s chairman,
president and CEO. “This is shaping up to be another exciting year
for Dexcom as we launch new product innovations and work to improve
access to Dexcom CGM around the world.”
_______________
1
First quarter 2024 organic revenue was
$915.0 million and excludes $3.2 million of foreign exchange impact
and $2.8 million of non-CGM revenue acquired or divested in the
trailing twelve months. First quarter 2023 reported revenue
included $7.2 million of non-CGM revenue subsequently divested in
the following twelve months.
2024 Annual Guidance
Dexcom is updating fiscal year 2024 guidance for Revenue, and
reiterating guidance for Non-GAAP Gross Profit Margin, Non-GAAP
Operating Margin, and Adjusted EBITDA Margin at the following
levels:
- Revenue of approximately $4.20 - 4.35 billion (17 - 21% organic
growth2)
- Non-GAAP Gross Profit Margin of approximately 63 - 64%
- Non-GAAP Operating Margin of approximately 20%
- Adjusted EBITDA Margin of approximately 29%
First Quarter 2024 Financial Results
Revenue: In the first quarter of 2024, worldwide revenue
grew 24% to $921.0 million on a reported basis, up from $741.5
million in the first quarter of 2023. 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 $561.9 million or
61.0% of revenue for the first quarter of 2024, compared to $462.6
million or 62.4% of revenue in the first quarter of 2023.
Non-GAAP gross profit* totaled $569.1 million or 61.8% of
reported revenue for the first quarter of 2024, compared to $469.8
million or 63.4% of reported revenue in the first quarter of
2023.
Operating Income: GAAP operating income for the first
quarter of 2024 was $101.1 million, compared to GAAP operating
income of $47.2 million for the first quarter of 2023.
Non-GAAP operating income* for the first quarter of 2024 was
$140.2 million, compared to non-GAAP operating income of $78.6
million for the first quarter of 2023.
Net Income and Diluted Net Income Per Share: GAAP net
income was $146.4 million, or $0.36 per diluted share, for the
first quarter of 2024, compared to GAAP net income of $48.6
million, or $0.12 per diluted share, for the first quarter of
2023.
Non-GAAP net income* was $128.2 million, or $0.32 per diluted
share, for the first quarter of 2024, compared to non-GAAP net
income of $68.5 million, or $0.17 per diluted share, for the first
quarter of 2023. The first quarter 2024 non-GAAP net income
excludes $10.4 million of amortization of intangible assets, $3.5
million of business transition and related costs, $25.2 million of
intellectual property litigation costs, and $57.3 million of tax
adjustments.
Cash and Liquidity: As of March 31, 2024, Dexcom held
$2.90 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.
_______________
2
Organic growth excludes non-CGM revenue
acquired or divested in the trailing twelve months, as well as the
impact of foreign exchange. Dexcom's 2024 organic growth
expectation excludes approximately $30 million of fiscal year 2023
revenue related to the divestiture of certain non-CGM assets.
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 (877)
344-3040 (U.S./Canada) or (646) 475-1647 (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 in the United States
(GAAP), please see the section titled “About Non-GAAP Financial
Measures” below as well as the related Table E. We have not
reconciled our Revenue, Non-GAAP Gross Profit Margin, Non-GAAP
Operating Margin and Adjusted EBITDA Margin estimates for fiscal
year 2024 because certain items that impact these figures are
uncertain or out of our control and cannot be reasonably predicted.
Accordingly, a reconciliation of 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 future operating results and
financial position, including estimated Revenue, Non-GAAP Gross
Profit Margin, Non-GAAP Operating Margin, and Adjusted EBITDA
Margin for fiscal 2024, expected growth rates as compared to the
year ended December 31, 2023, as well as future expenses and
investments. All forward-looking statements included in this press
release are made as of the date of this press release, based on
information currently available to Dexcom as of the date hereof.
Forward-looking statements deal with future events and are
therefore subject to various risks and uncertainties. Actual
results could differ materially from those anticipated in these
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 the sections titled “Risk
Factors” and “Management’s Discussion and Analysis of Financial
Condition and Results of Operations” in 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 communication or
to conform these forward-looking statements to actual results.
DexCom, Inc.
Table A
Consolidated Balance
Sheets
(In millions, except par value
data)
March 31, 2024
December 31, 2023
Assets
Current assets:
Cash and cash equivalents
$
851.2
$
566.3
Short-term marketable securities
2,045.8
2,157.8
Accounts receivable, net
978.6
973.9
Inventory
589.1
559.6
Prepaid and other current assets
156.0
168.3
Total current assets
4,620.7
4,425.9
Property and equipment, net
1,108.6
1,113.1
Operating lease right-of-use assets
68.0
71.4
Goodwill
23.2
25.2
Intangibles, net
123.3
134.5
Deferred tax assets
460.7
419.4
Other assets
77.7
75.0
Total assets
$
6,482.2
$
6,264.5
Liabilities and Stockholders’
Equity
Current liabilities:
Accounts payable and accrued
liabilities
$
1,446.6
$
1,345.5
Accrued payroll and related expenses
110.5
171.0
Short-term operating lease liabilities
20.7
21.1
Deferred revenue
16.4
18.4
Total current liabilities
1,594.2
1,556.0
Long-term senior convertible notes
2,436.0
2,434.2
Long-term operating lease liabilities
75.8
80.1
Other long-term liabilities
129.4
125.6
Total liabilities
4,235.4
4,195.9
Commitments and contingencies
Stockholders’ equity:
Preferred stock, $0.001 par value, 5.0
million shares authorized; no shares issued and outstanding at
March 31, 2024 and December 31, 2023
—
—
Common stock, $0.001 par value, 800.0
million shares authorized; 408.5 million and 396.1 million shares
issued and outstanding, respectively, at March 31, 2024; and 407.2
million and 385.4 million shares issued and outstanding,
respectively, at December 31, 2023
0.4
0.4
Additional paid-in capital
2,510.6
3,514.6
Accumulated other comprehensive loss
(37.3
)
(16.7
)
Retained earnings
1,167.8
1,021.4
Treasury stock, at cost; 12.4 million
shares at March 31, 2024 and 21.8 million shares at December 31,
2023
(1,394.7
)
(2,451.1
)
Total stockholders’ equity
2,246.8
2,068.6
Total liabilities and stockholders’
equity
$
6,482.2
$
6,264.5
DexCom, Inc.
Table B
Consolidated Statements of
Operations
(In millions, except per share
data)
Three Months Ended
March 31,
2024
2023
Revenue
$
921.0
$
741.5
Cost of sales
359.1
278.9
Gross profit
561.9
462.6
Operating expenses:
Research and development
141.5
119.0
Selling, general and administrative
319.3
296.4
Total operating expenses
460.8
415.4
Operating income
101.1
47.2
Other income (expense), net
31.4
17.3
Income before income taxes
132.5
64.5
Income tax expense (benefit)
(13.9
)
15.9
Net income
$
146.4
$
48.6
Basic net income per share
$
0.38
$
0.13
Shares used to compute basic net income
per share
390.2
386.7
Diluted net income per share
$
0.36
$
0.12
Shares used to compute diluted net income
per share
416.7
418.5
DexCom, Inc.
Table C
Revenue by Geography
(Dollars in millions)
(Unaudited)
Three Months Ended
March 31,
2024
2023
U.S. revenue
$
653.2
$
526.0
Year over year growth
24
%
17
%
% of total revenue
71
%
71
%
International revenue
$
267.8
$
215.5
Year over year growth
24
%
21
%
% of total revenue
29
%
29
%
Total revenue (1)
$
921.0
$
741.5
Year over year growth
24
%
18
%
(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,
2024
2023
Sensor and other revenue (1) (2)
$
854.3
$
651.9
Year over year growth
31
%
20
%
% of total revenue
93
%
88
%
Hardware revenue (1) (3)
$
66.7
$
89.6
Year over year growth
(26
)%
5
%
% of total revenue
7
%
12
%
Total revenue (4)
$
921.0
$
741.5
Year over year growth
24
%
18
%
(1)
Includes allocated subscription
revenue.
(2)
Includes services, freight, accessories,
non-CGM 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
March 31,
2024
2023
GAAP gross profit
$
561.9
$
462.6
Amortization of intangible assets (1)
7.2
7.2
Non-GAAP gross profit
$
569.1
$
469.8
GAAP operating income
$
101.1
$
47.2
Amortization of intangible assets (1)
10.4
9.0
Business transition and related costs
(2)
3.5
1.1
Intellectual property litigation costs
(3)
25.2
21.3
Non-GAAP operating income
$
140.2
$
78.6
GAAP net income
$
146.4
$
48.6
Business transition and related costs
(2)
3.4
1.0
Depreciation and amortization
52.5
41.6
Intellectual property litigation costs
(3)
25.2
21.3
Share-based compensation
39.0
35.2
Interest expense and interest income
(31.7
)
(17.7
)
Income tax (benefit) expense
(13.9
)
15.9
Adjusted EBITDA
$
220.9
$
145.9
GAAP net income
$
146.4
$
48.6
Amortization of intangible assets (1)
10.4
9.0
Business transition and related costs
(2)
3.5
1.1
Intellectual property litigation costs
(3)
25.2
21.3
Adjustments related to taxes (4)
(57.3
)
(11.5
)
Non-GAAP net income
$
128.2
$
68.5
GAAP net income
$
146.4
$
48.6
Interest expense on senior convertible
notes, net of tax
2.9
1.6
GAAP net income used for diluted EPS,
if-converted (5)
$
149.3
$
50.2
Non-GAAP net income
$
128.2
$
68.5
Interest expense on senior convertible
notes, net of tax
1.2
1.2
Non-GAAP net income used for diluted
EPS, if-converted (5)
$
129.4
$
69.7
DexCom, Inc.
Table E (Continued)
Itemized Reconciliation
Between GAAP and Non-GAAP Financial Measures
(In millions, except per share
data)
(Unaudited)
Three Months Ended
March 31,
2024
2023
GAAP diluted net income per share
(5)
$
0.36
$
0.12
Amortization of intangible assets (1)
0.03
0.02
Business transition and related costs
(2)
0.01
—
Intellectual property litigation costs
(3)
0.06
0.05
Adjustments related to taxes (4)
(0.14
)
(0.03
)
Impact of adjustment to GAAP diluted
shares (6)
—
—
Non-GAAP diluted net income per share
(5) (7)
$
0.32
$
0.17
GAAP diluted weighted-average shares
outstanding
416.7
418.5
Non-GAAP diluted weighted-average shares
outstanding
409.0
407.6
Reconciliation of non-GAAP diluted
weighted-average shares outstanding:
GAAP diluted weighted-average shares
outstanding
416.7
418.5
Adjustment for dilutive impact of senior
convertible notes due 2023 (8)
—
(18.9
)
Adjustment for dilutive impact of senior
convertible notes due 2025 (8)
—
8.0
Adjustment for dilutive impact of senior
convertible notes due 2028 (8)
(7.7
)
—
Non-GAAP diluted weighted-average shares
outstanding
409.0
407.6
(1)
Represents amortization of acquired
intangible assets.
(2)
For the three months ended March 31, 2024,
business transition and related costs are primarily related to the
divestiture of certain non-CGM assets and rent for vacated office
space in San Diego, California. For the three months ended March
31, 2023, business transition and related costs are primarily
related to rent for vacated office space in San Diego,
California.
(3)
We have excluded third-party attorney’s
fees, costs, and expenses incurred by Dexcom exclusively in
connection with Dexcom’s patent infringement litigation against
Abbott Diabetes Care, Inc., as further described in the section
titled “Legal Proceedings” appearing in Dexcom’s Quarterly Report
on Form 10-Q for the three months ended March 31, 2024.
(4)
For the three months ended March 31, 2024,
tax adjustments are primarily related to the tax effect of the
Verily milestone payment, non-GAAP adjustments, and excess tax
benefits from share-based compensation for employees. For the three
months ended March 31, 2023, tax adjustments are primarily related
to the tax effect of non-GAAP adjustments and excess tax benefits
from share-based compensation for employees.
(5)
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.
(6)
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.
(7)
The sum of the non-GAAP per share
components may not equal the totals due to rounding.
(8)
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 April 25, 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 report non-GAAP financial measures in addition to, and not as
a substitute for or as superior to, measures of financial
performance prepared in accordance with GAAP. We use these non-GAAP
financial measures for financial and operational decision making
and period-to-period comparisons. We believe that these non-GAAP
financial measures 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. While we compute non-GAAP financial measures using a
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.
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 measures have limitations in that they
do not reflect all of the amounts associated with our results of
operations as determined in accordance with GAAP and that these
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 Dexcom’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; and
- The effect of foreign currency fluctuations.
Management believes that the presentation of operating results
that exclude 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 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 included in
this press release to the most directly comparable financial
measures prepared in accordance with GAAP.
Our policy is to 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 Dexcom’s patent infringement litigation against
Abbott Diabetes Care, Inc.;
- Litigation settlement costs;
- Gain or loss on extinguishment of debt; and
- 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/20240425938012/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
DexCom (NASDAQ:DXCM)
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