10-QPeriod: Q1 FY2018

DEXCOM INC Quarterly Report for Q1 Ended Mar 31, 2018

Filed May 2, 2018For Securities:DXCM

Summary

DexCom, Inc. (DXCM) reported its first quarter 2018 financial results, highlighting significant revenue growth driven by increased sales volume of its continuous glucose monitoring (CGM) systems, particularly disposable sensors. While revenue increased by 29.6% year-over-year to $184.4 million, the company continued to operate at a net loss of $24.2 million for the quarter, an improvement from the $41.7 million loss in the prior year period. This loss is attributed to ongoing investments in research and development and selling, general, and administrative expenses to support business expansion. The company maintained a strong liquidity position with $533.9 million in cash, cash equivalents, and marketable securities as of March 31, 2018, and $195.6 million available under its revolving credit facility. DexCom stated its belief that its current resources will be sufficient to fund operations through at least May 2, 2019. Despite the continued net loss, the revenue growth and improving operational efficiency, as indicated by a stable gross profit margin, suggest positive momentum for the company in the expanding diabetes technology market.

Financial Highlights

48 data points
Beta

Revenue

$184.40M

64.5% Gross Margin

Net Income

-$24.20M

-13.1% Net Margin

EPS (Diluted)

$-0.07

Total Assets

$896.80M

Cash & Equivalents

$420.70M

Free Cash Flow

-$24.00M

Financial Statements
Beta
Revenue$184.40M
Cost of Revenue$65.50M
Gross Profit$118.90M
R&D Expenses$44.80M
SG&A Expenses$104.80M
Operating Expenses$149.60M
Operating Income-$30.70M
Interest Expense$4.80M
Net Income-$24.20M
EPS (Basic)$-0.07
EPS (Diluted)$-0.07
Shares Outstanding (Basic)349.20M

Key Highlights

  • 1Revenue increased by 29.6% to $184.4 million in Q1 2018 compared to $142.3 million in Q1 2017.
  • 2Net loss improved to $24.2 million ($0.28 per share) in Q1 2018 from $41.7 million ($0.49 per share) in Q1 2017.
  • 3Gross profit margin remained strong at 64% in Q1 2018, slightly down from 66% in Q1 2017, impacted by inventory charges.
  • 4Selling, general, and administrative expenses increased by $18.4 million, primarily due to higher sales-related costs, headcount, and marketing efforts.
  • 5Research and development expenses decreased slightly due to lower share-based compensation expenses.
  • 6The company maintained substantial liquidity with $533.9 million in cash, cash equivalents, and marketable securities.
  • 7DexCom believes its liquidity position is sufficient to fund operations through at least May 2, 2019.

Frequently Asked Questions

DexCom's revenue increased by 29.6% to $184.4 million in the first quarter of 2018, compared to $142.3 million in the same period of 2017. This growth was primarily driven by higher sales volumes of disposable sensors and durable systems.

No, DexCom reported a net loss of $24.2 million ($0.28 per diluted share) for the first quarter of 2018. While this represents an improvement from the $41.7 million net loss ($0.49 per diluted share) in the first quarter of 2017, the company continues to invest heavily in growth, leading to ongoing losses.

As of March 31, 2018, DexCom had $533.9 million in cash, cash equivalents, and marketable securities. Additionally, the company had $195.6 million available under its revolving credit facility. The company believes these resources are sufficient to fund operations through at least May 2, 2019.

SG&A expenses increased by $18.4 million year-over-year. This increase was primarily due to higher sales-related costs, including increased headcount and marketing expenses to support revenue growth and product commercialization, as well as additional salaries, bonus costs, consulting expenses, and software license costs.