10-QPeriod: Q1 FY2021

DEXCOM INC Quarterly Report for Q1 Ended Mar 31, 2021

Filed April 29, 2021For Securities:DXCM

Summary

DexCom, Inc. (DXCM) reported its first-quarter 2021 financial results, demonstrating robust top-line growth and significant improvements in profitability. Total revenue reached $505.0 million, a 25% increase year-over-year, driven by higher sales volumes of disposable sensors. The company successfully managed its cost of sales, leading to a substantial increase in gross profit to $343.9 million, with a gross profit margin of 68.1%, up from 63.3% in the prior year's quarter. This expansion in gross profit, coupled with controlled operating expenses, resulted in a strong operating income of $45.9 million, up 37% year-over-year. The company also reported a significant jump in net income to $40.3 million, more than doubling from $19.9 million in the first quarter of 2020. This translates to a diluted net income per share of $0.41. Despite a slight decrease in cash, cash equivalents, and short-term marketable securities from the end of the previous fiscal year to $2.63 billion, Dexcom's liquidity remains strong, with $193.6 million available under its revolving credit facility and no outstanding borrowings.

Financial Highlights

50 data points
Beta

Revenue

$505.00M

68.1% Gross Margin

Net Income

$56.50M

11.2% Net Margin

EPS (Diluted)

$0.14

Total Assets

$4.39B

Cash & Equivalents

$734.20M

Free Cash Flow

-$71.90M

Financial Statements
Beta
Revenue$505.00M
Cost of Revenue$161.10M
Gross Profit$343.90M
R&D Expenses$109.40M
SG&A Expenses$188.60M
Operating Expenses$298.00M
Operating Income$45.90M
Interest Expense$4.70M
Net Income$56.50M
EPS (Basic)$0.15
EPS (Diluted)$0.14
Shares Outstanding (Basic)385.20M
Shares Outstanding (Diluted)418.40M

Key Highlights

  • 1Revenue increased by 25% to $505.0 million for the three months ended March 31, 2021, compared to $405.1 million for the same period in 2020.
  • 2Gross profit increased by 34% to $343.9 million, and gross profit margin improved to 68.1% from 63.3% in the prior year.
  • 3Operating income saw a 37% increase, reaching $45.9 million.
  • 4Net income more than doubled, increasing by 103% to $40.3 million ($0.41 diluted EPS), compared to $19.9 million ($0.21 diluted EPS) in Q1 2020.
  • 5Research and Development expenses increased by 50% to $109.4 million, reflecting continued investment in product development.
  • 6Selling, General, and Administrative expenses rose by 26% to $188.6 million, primarily due to increased advertising and marketing costs.
  • 7The company maintained a strong liquidity position, with cash, cash equivalents, and short-term marketable securities totaling $2.63 billion as of March 31, 2021.

Frequently Asked Questions

DexCom's revenue growth of 25% to $505.0 million was primarily driven by increased sales volume of their disposable sensors due to the continued growth of their worldwide customer base. This was partially offset by pricing pressure resulting from changes in their channel strategy and product mix.

Profitability improved significantly due to an increase in gross profit margin to 68.1% from 63.3% in the prior year, driven by higher revenues and manufacturing efficiencies. This, combined with controlled operating expenses, led to a substantial increase in operating income and net income.

As of March 31, 2021, DexCom maintained a strong liquidity position with $2.63 billion in cash, cash equivalents, and short-term marketable securities. Additionally, the company had $193.6 million available under its revolving credit facility with no outstanding borrowings.

Research and Development expenses increased by 50% to $109.4 million, indicating continued investment in future product development and innovation. Selling, General, and Administrative expenses increased by 26% to $188.6 million, primarily due to higher advertising and marketing costs to support growth.