10-QPeriod: Q1 FY2023

DEXCOM INC Quarterly Report for Q1 Ended Mar 31, 2023

Filed April 27, 2023For Securities:DXCM

Summary

DexCom Inc. reported a solid first quarter for 2023, demonstrating continued revenue growth with a significant increase of 18% year-over-year, reaching $741.5 million. This growth was primarily driven by increased sales volume of disposable sensors. Despite revenue growth, net income saw a substantial decrease of 50% to $48.6 million compared to the same period in the previous year. This decline was influenced by a significant increase in Selling, General, and Administrative (SG&A) expenses, notably driven by higher advertising and marketing costs and legal expenses related to a patent infringement lawsuit. The company ended the quarter with a strong liquidity position, holding $2.57 billion in cash, cash equivalents, and short-term marketable securities, indicating a healthy financial standing.

Financial Highlights

52 data points
Beta

Revenue

$741.50M

62.4% Gross Margin

Net Income

$48.60M

6.6% Net Margin

EPS (Diluted)

$0.12

Total Assets

$5.52B

Cash & Equivalents

$623.20M

Free Cash Flow

$80.70M

Financial Statements
Beta
Revenue$741.50M
Cost of Revenue$278.90M
Gross Profit$462.60M
R&D Expenses$119.00M
SG&A Expenses$296.40M
Operating Expenses$415.40M
Operating Income$47.20M
Interest Expense$3.70M
Net Income$48.60M
EPS (Basic)$0.13
EPS (Diluted)$0.12
Shares Outstanding (Basic)386.70M
Shares Outstanding (Diluted)418.50M

Key Highlights

  • 1Revenue increased by 18% to $741.5 million for the three months ended March 31, 2023, compared to $628.8 million in the same period of 2022, driven by increased sales volume of disposable sensors.
  • 2Gross profit increased by 16% to $462.6 million, though the gross profit margin slightly decreased to 62.4% from 63.3% year-over-year.
  • 3Operating income saw a modest increase of 14% to $47.2 million.
  • 4Net income decreased by 50% to $48.6 million from $97.3 million in the prior year's quarter.
  • 5Selling, General, and Administrative (SG&A) expenses rose significantly by 35% to $294.6 million, largely due to increased marketing efforts and legal expenses.
  • 6Research and development expenses decreased by 12% to $119.0 million.
  • 7The company ended the quarter with $2.57 billion in cash, cash equivalents, and short-term marketable securities.

Frequently Asked Questions

DexCom reported revenue of $741.5 million for the first quarter of 2023, an 18% increase compared to $628.8 million in the same period of 2022. This growth was primarily driven by higher sales volumes of their disposable sensors.

DexCom's net income decreased by 50% to $48.6 million from $97.3 million in Q1 2022. This decline was primarily due to a substantial increase in Selling, General, and Administrative (SG&A) expenses, which rose by 35% to $294.6 million. This increase was largely attributable to higher advertising and marketing costs associated with global campaigns and increased legal expenses related to a patent infringement lawsuit.

DexCom maintained a strong liquidity position, ending the first quarter of 2023 with $2.57 billion in cash, cash equivalents, and short-term marketable securities. Of this amount, $2.38 billion (approximately 93%) was held in the United States.

Research and development expenses decreased by 12% to $119.0 million in Q1 2023, attributed to lower costs for new CGM equipment setup and validation, as well as reduced third-party and consulting fees. However, Selling, General, and Administrative expenses increased significantly by 35% to $294.6 million, driven by increased marketing and legal expenses. The company views R&D investments as critical for future growth.