10-QPeriod: Q2 FY2021

DEXCOM INC Quarterly Report for Q2 Ended Jun 30, 2021

Filed July 29, 2021For Securities:DXCM

Summary

DexCom Inc. reported a strong second quarter for 2021, with significant year-over-year growth in revenue and profitability. Revenue increased by 32% to $595.1 million, driven by strong sales volume of their continuous glucose monitoring (CGM) systems. This top-line growth translated into substantial improvements in profitability, with gross profit up 47% and operating income up 49%. Key financial highlights include a substantial increase in gross profit margin to 70.1% from 62.9% in the prior year's quarter, demonstrating improved manufacturing efficiencies and pricing power. Net income saw a robust increase of 36% to $62.9 million. The company's balance sheet remains solid, with over $1.15 billion in cash and cash equivalents and no outstanding borrowings on their credit facility, indicating strong liquidity. DexCom continues to invest heavily in research and development, signaling a commitment to future innovation and market leadership in the diabetes management space.

Financial Highlights

50 data points
Beta

Revenue

$595.10M

70.1% Gross Margin

Net Income

$78.40M

13.2% Net Margin

EPS (Diluted)

$0.19

Total Assets

$4.50B

Cash & Equivalents

$1.16B

Free Cash Flow

-$39.60M

Financial Statements
Beta
Revenue$595.10M
Cost of Revenue$178.00M
Gross Profit$417.10M
R&D Expenses$129.10M
SG&A Expenses$186.50M
Operating Expenses$316.10M
Operating Income$101.00M
Interest Expense$4.80M
Net Income$78.40M
EPS (Basic)$0.20
EPS (Diluted)$0.19
Shares Outstanding (Basic)386.90M
Shares Outstanding (Diluted)427.10M

Key Highlights

  • 1Revenue for the second quarter of 2021 increased by 32% to $595.1 million compared to $451.8 million in the same period of 2020.
  • 2Gross profit margin improved significantly to 70.1% from 62.9% in Q2 2020, reflecting manufacturing efficiencies and favorable product mix.
  • 3Operating income rose by 49% to $101.0 million, indicating strong operational leverage.
  • 4Net income increased by 36% to $62.9 million, with diluted earnings per share growing to $0.63 from $0.48 in the prior year's quarter.
  • 5Cash and cash equivalents, along with short-term marketable securities, totaled $2.58 billion as of June 30, 2021, a slight decrease from year-end 2020 but demonstrating a strong liquidity position.
  • 6Research and development expenses increased by 62% to $129.1 million, highlighting significant investment in future product development.
  • 7Selling, general, and administrative expenses increased by 37% to $187.0 million, reflecting increased advertising, marketing, and personnel costs to support growth.

Frequently Asked Questions

DexCom's revenue growth in Q2 2021 was primarily driven by an increase in sales volume of their disposable CGM sensors, attributed to the continued expansion of their global customer base. This growth was partially offset by pricing pressures stemming from changes in their channel strategy and product mix.

DexCom demonstrated significant improvements in profitability. Gross profit increased by 47% and gross profit margin expanded to 70.1% due to increased revenues and manufacturing efficiencies. Operating income grew by 49%, and net income increased by 36%, indicating strong operational leverage and effective cost management.

As of June 30, 2021, DexCom maintained a strong liquidity position with $1.158.8 billion in cash and cash equivalents and $1.426.1 billion in short-term marketable securities, totaling over $2.58 billion in liquid assets. Additionally, the company had no outstanding borrowings on its $200 million revolving credit facility, with $193.6 million available, indicating robust financial flexibility.

DexCom is significantly investing in its future growth, as evidenced by a substantial increase in Research and Development (R&D) expenses. R&D spending rose by 62% year-over-year for the quarter and 56% for the first six months of the year, reflecting a commitment to developing new and updated products and services to maintain its competitive position in the market.