10-QPeriod: Q2 FY2022

DEXCOM INC Quarterly Report for Q2 Ended Jun 30, 2022

Filed July 28, 2022For Securities:DXCM

Summary

DexCom, Inc. reported robust revenue growth in its Q2 2022 filing, demonstrating continued expansion in its core business. Revenue increased by 17% year-over-year for the quarter and 20% for the six-month period, driven by strong sales volume of their continuous glucose monitoring (CGM) systems, particularly in international markets. While gross profit also saw an increase, the gross profit margin slightly decreased due to price and channel mix shifts. Despite the revenue growth, operating income and net income saw a decline compared to the prior year. This was primarily attributed to increased selling, general, and administrative (SG&A) expenses, driven by higher advertising, marketing, and compensation costs, as well as increased research and development expenses related to new product development and headcount. The company ended the period with a strong cash position of $2.75 billion. A significant subsequent event noted is the authorization of a $700 million share repurchase program, indicating a commitment to returning value to shareholders.

Financial Highlights

53 data points
Beta

Revenue

$696.20M

64.6% Gross Margin

Net Income

$50.90M

7.3% Net Margin

EPS (Diluted)

$0.12

Total Assets

$5.22B

Cash & Equivalents

$736.40M

Free Cash Flow

$81.30M

Financial Statements
Beta
Revenue$696.20M
Cost of Revenue$246.70M
Gross Profit$449.50M
R&D Expenses$121.70M
SG&A Expenses$248.90M
Operating Expenses$372.50M
Operating Income$77.00M
Interest Expense$3.60M
Net Income$50.90M
EPS (Basic)$0.13
EPS (Diluted)$0.12
Shares Outstanding (Basic)392.50M
Shares Outstanding (Diluted)421.40M

Key Highlights

  • 1Revenue increased by 17% year-over-year to $696.2 million for the three months ended June 30, 2022.
  • 2Revenue for the six months ended June 30, 2022 increased by 20% to $1,325.0 million.
  • 3Gross profit increased by 8% for the quarter and 11% for the six-month period, although gross profit margin slightly declined.
  • 4Operating income decreased by 24% year-over-year for the quarter due to increased operating expenses.
  • 5Net income decreased by 35% for the quarter, primarily due to higher SG&A and R&D expenses.
  • 6The company ended the period with $2.75 billion in cash, cash equivalents, and short-term marketable securities.
  • 7A $700 million share repurchase program was authorized subsequent to the reporting period.

Frequently Asked Questions

Dexcom reported a 17% year-over-year increase in revenue for the three months ended June 30, 2022, reaching $696.2 million. This growth was primarily driven by an increase in sales volume of their disposable sensors due to a growing worldwide customer base.

The decline in operating income and net income was primarily due to increased operating expenses. Selling, general, and administrative (SG&A) expenses rose significantly, driven by higher advertising, marketing, and compensation costs. Research and development expenses also increased, largely due to higher headcount and costs associated with new product development.

Dexcom maintained a strong liquidity position, ending the second quarter of 2022 with $2.75 billion in cash, cash equivalents, and short-term marketable securities. The company also generated positive cash flow from operations for the six-month period.

Yes, subsequent to the end of the quarter, Dexcom's Board of Directors authorized a share repurchase program of up to $700 million of its outstanding common stock, with repurchases expected to be completed by June 30, 2023. This indicates a commitment to returning capital to shareholders.