Summary
DexCom Inc. reported strong revenue growth for the second quarter and first half of 2016, with product revenue increasing by 47.8% and 48.5% year-over-year, respectively. This growth was driven primarily by increased sales volume of disposable sensors and durable systems, indicating continued expansion of their customer base for the G4 PLATINUM and G5 Mobile continuous glucose monitoring (CGM) systems. Despite revenue growth, the company continues to operate at a net loss, with an accumulated deficit of $594.8 million as of June 30, 2016. Management believes current working capital and available credit are sufficient to fund operations through at least June 30, 2017, though future financing needs are acknowledged. The company also highlighted significant increases in operating expenses, particularly in Research & Development and Selling, General & Administrative, reflecting investments in growth, commercialization, and international expansion. A notable event was the customer notification regarding audible alarms and alerts on G4 PLATINUM and G5 Mobile receivers, classified as a voluntary Class 1 recall, which impacted cost of sales due to excess and obsolete inventory charges.
Financial Highlights
50 data points| Revenue | $137.30M |
| Cost of Revenue | $51.80M |
| Gross Profit | $85.50M |
| R&D Expenses | $36.30M |
| SG&A Expenses | $69.30M |
| Operating Expenses | $105.60M |
| Operating Income | -$20.10M |
| Interest Expense | $100K |
| Net Income | -$20.20M |
| EPS (Basic) | $-0.06 |
| Shares Outstanding (Basic) | 334.40M |
| Shares Outstanding (Diluted) | 334.40M |
Key Highlights
- 1Product revenue increased by 47.8% to $137.3 million for Q2 2016 and by 48.5% to $253.5 million for the first six months of 2016, compared to the prior year periods.
- 2Gross profit increased by 29.5% to $85.5 million for Q2 2016 and by 42.7% to $160.6 million for the first six months of 2016.
- 3Operating expenses, particularly R&D and SG&A, saw significant increases (R&D +48.8% Q2, +54.9% H1; SG&A +53.3% Q2, +55.3% H1) reflecting investment in growth and expansion.
- 4The company continues to operate at a net loss, reporting a net loss of $20.2 million for Q2 2016 and $39.4 million for the first six months of 2016.
- 5DexCom entered into a $200 million revolving credit agreement in June 2016, enhancing its liquidity position.
- 6A voluntary Class 1 recall was issued for G4 PLATINUM and G5 Mobile receivers concerning audible alarms and alerts, impacting cost of sales due to inventory charges.
- 7The company stated its belief that existing liquidity and credit facilities are sufficient to fund operations through at least June 30, 2017.