10-QPeriod: Q2 FY2018

DEXCOM INC Quarterly Report for Q2 Ended Jun 30, 2018

Filed August 1, 2018For Securities:DXCM

Summary

DexCom, Inc. (DXCM) reported a significant increase in revenue for the second quarter and first six months of 2018, driven by higher sales volumes of its continuous glucose monitoring (CGM) systems. Revenue for the three months ended June 30, 2018, was $242.5 million, a 42% increase year-over-year, and for the six months ended June 30, 2018, revenue was $426.9 million, a 36% increase year-over-year. Despite revenue growth, the company reported an operating loss of $4.9 million for the quarter, though this was an improvement from the $13.6 million loss in the prior year's quarter. Net income for the quarter was $30.2 million, a substantial improvement from $2.9 million in the prior year, largely due to a significant unrealized gain from an equity investment in Tandem Diabetes Care, Inc. Key financial highlights include a gross profit margin of 63% for the quarter, which decreased from 69% in the prior year due to increased cost of sales and inventory charges. The company's cash position remains strong, with $300.2 million in cash and cash equivalents as of June 30, 2018. DexCom also highlighted its G6 system's recent FDA approval, which is expected to drive future growth. The company's liquidity is considered sufficient to fund operations through at least August 1, 2019.

Financial Highlights

50 data points
Beta

Revenue

$242.50M

63.3% Gross Margin

Net Income

$30.20M

12.5% Net Margin

EPS (Diluted)

$0.09

Total Assets

$1.01B

Cash & Equivalents

$300.50M

Free Cash Flow

$31.10M

Financial Statements
Beta
Revenue$242.50M
Cost of Revenue$88.90M
Gross Profit$153.60M
R&D Expenses$47.20M
SG&A Expenses$111.30M
Operating Expenses$158.50M
Operating Income-$4.90M
Interest Expense$4.80M
Net Income$30.20M
EPS (Basic)$0.09
EPS (Diluted)$0.09
Shares Outstanding (Basic)352.80M
Shares Outstanding (Diluted)357.60M

Key Highlights

  • 1Revenue increased by 42% year-over-year to $242.5 million for the three months ended June 30, 2018.
  • 2Gross profit for the quarter was $153.6 million, with a gross margin of 63%.
  • 3The company reported a net income of $30.2 million for the quarter, significantly up from $2.9 million in the prior year, boosted by an equity investment gain.
  • 4Operating expenses, particularly Selling, General & Administrative (SG&A), increased due to higher headcount and marketing costs.
  • 5Cash and cash equivalents stood at $300.2 million as of June 30, 2018, with total assets reaching $1,007.5 million.
  • 6The company has $195.6 million available under its revolving credit agreement.
  • 7DexCom received FDA approval for its G6 system in March 2018, positioning it for future growth.

Frequently Asked Questions

DexCom's revenue for the three months ended June 30, 2018, was $242.5 million, representing a 42% increase compared to $170.6 million in the same period of 2017. This growth was primarily driven by increased sales volume of disposable sensors and durable systems.

DexCom reported a net income of $30.2 million for the quarter ended June 30, 2018. This significant increase from the prior year's net income of $2.9 million was substantially influenced by a $42.7 million unrealized gain from its equity investment in Tandem Diabetes Care, Inc. Despite this net income, the company reported an operating loss of $4.9 million for the quarter.

As of June 30, 2018, DexCom had $300.2 million in cash and cash equivalents and $606.1 million in cash, cash equivalents, and marketable securities. The company reported working capital of $665.2 million and believes its resources are sufficient to fund operations through at least August 1, 2019. Additionally, $195.6 million remains available under its revolving credit agreement.

Selling, General, and Administrative (SG&A) expenses increased by $25.5 million compared to the prior year's quarter, primarily due to higher headcount and increased marketing costs to support revenue growth and product commercialization. Research and development expenses saw a modest increase, mainly driven by higher salaries and facilities costs.