Dexcom Reports First Quarter 2022 Financial Results
DexCom, Inc. (Nasdaq: DXCM) reported a 25% revenue growth in Q1 2022, reaching $628.8 million. U.S. revenue rose 18% while international revenue surged 43%. GAAP operating income was $41.3 million (6.6% of revenue), down from the previous year. The company reaffirmed its 2022 revenue guidance of $2.82 - 2.94 billion and outlined strategic initiatives, including the limited launch of the Dexcom G7 in Europe and new market expansions. Cash reserves stood at $2.69 billion, providing strong financial flexibility.
- Revenue increased by 25% year-over-year to $628.8 million.
- International revenue grew by 43%, indicating strong global demand.
- Reiterated 2022 revenue guidance of approximately $2.82 - 2.94 billion.
- GAAP operating income decreased to $41.3 million, down 250 basis points from the previous year.
- Non-GAAP net income declined slightly from $32.5 million to $32.3 million.
First Quarter 2022 Financial Highlights:
-
Revenue grew
25% versus the same quarter of the prior year to on a reported basis and$628.8 million 22% on an organic1 basis. -
U.S. revenue growth of18% and international revenue growth of43% on a reported basis. International revenue growth was33% on an organic1 basis. -
GAAP operating income of
or$41.3 million 6.6% of revenue, a decrease of 250 basis points compared to the first quarter of 2021. Non-GAAP operating income* of or$50.3 million 8.0% of revenue, a decrease of 120 basis points compared with the same quarter of the prior year.
Strategic Highlights:
-
Secured CE Mark for the Dexcom G7 CGM System for people with diabetes age two years and older and initiated a limited launch of G7 in
Europe . - Granted Breakthrough Device Designation by the FDA for the Dexcom CGM Hospital System, providing a more efficient and streamlined review pathway for inpatient Dexcom CGM use.
-
Announced the launch of Dexcom ONE in the
United Kingdom andSpain , setting up these regions to be Dexcom’s first multi-tiered product markets. -
Advanced access to Dexcom CGM for people with diabetes, including new coverage by the
Ontario government for people with type 1 diabetes and TRICARE® adding Dexcom G6 as a brand-name formulary pharmacy benefit.
“Dexcom is off to a great start in 2022, advancing a number of strategic initiatives that strengthen our foundation for long-term growth,” said
____________________
1 Excludes non-CGM revenue acquired in conjunction with Dexcom’s acquisition of its distributor in
2022 Annual Guidance
The company is reiterating guidance for fiscal year 2022 revenue, Non-GAAP Gross Profit Margin, Non-GAAP Operating Margin, and Adjusted EBITDA Margin at the following levels:
-
Revenue of approximately
- 2.94 billion (15$2.82 -20% growth) -
Non-GAAP Gross Profit Margin of approximately
65% -
Non-GAAP Operating Margin of approximately
16% -
Adjusted EBITDA Margin of approximately
25%
First Quarter 2022 Financial Results
Revenue: In the first quarter of 2022, worldwide revenue grew
Gross Profit: Gross profit totaled
Operating Income: GAAP operating income for the first quarter of 2022 was
Non-GAAP operating income* for the first quarter of 2022 was
Net Income and Net Income per Share: GAAP net income was
Non-GAAP net income* was
Cash and Liquidity: As of
* See Table E below for a reconciliation of these GAAP and non-GAAP financial measures.
Conference Call
Management will hold a conference call today starting at
Statement Regarding Use of Non-GAAP Financial Measures
This press release and the accompanying tables include non-GAAP financial measures. For a description of these non-GAAP financial measures, including the reasons management uses each measure, and reconciliations of these non-GAAP financial measures to the most directly comparable financial measures prepared in accordance with Generally Accepted Accounting Principles (GAAP), please see the section of the accompanying tables titled “About Non-GAAP Financial Measures” as well as the related Table E.
About
Cautionary Statement Regarding Forward-Looking Statements
This press release contains forward-looking statements that are not purely historical regarding Dexcom’s or its management’s intentions, beliefs, expectations and strategies for the future, including statements with respect to the impacts of the COVID-19 pandemic on
Table A Consolidated Balance Sheets (In millions, except par value data) (Unaudited) |
|||||||
|
|
|
|
||||
Assets |
|
|
As Adjusted* |
||||
Current assets: |
|
|
|
||||
Cash and cash equivalents |
$ |
716.0 |
|
|
$ |
1,052.6 |
|
Short-term marketable securities |
|
1,972.2 |
|
|
|
1,678.6 |
|
Accounts receivable, net |
|
544.5 |
|
|
|
514.3 |
|
Inventory |
|
342.2 |
|
|
|
357.3 |
|
Prepaid and other current assets |
|
171.7 |
|
|
|
81.6 |
|
Total current assets |
|
3,746.6 |
|
|
|
3,684.4 |
|
Property and equipment, net |
|
856.5 |
|
|
|
801.8 |
|
Operating lease right-of-use assets |
|
82.3 |
|
|
|
88.1 |
|
|
|
26.6 |
|
|
|
26.5 |
|
Intangibles, net |
|
31.4 |
|
|
|
31.5 |
|
Deferred tax assets |
|
290.8 |
|
|
|
290.5 |
|
Other assets |
22.8 |
|
|
10.5 |
|
||
Total assets |
$ |
5,057.0 |
|
|
$ |
4,933.3 |
|
Liabilities and Stockholders’ Equity |
|
|
|
||||
Current liabilities: |
|
|
|
||||
Accounts payable and accrued liabilities |
$ |
603.1 |
|
|
$ |
573.0 |
|
Accrued payroll and related expenses |
|
84.7 |
|
|
|
125.2 |
|
Short-term operating lease liabilities |
|
20.9 |
|
|
|
20.5 |
|
Deferred revenue |
|
2.7 |
|
|
|
2.1 |
|
Total current liabilities |
|
711.4 |
|
|
|
720.8 |
|
Long-term senior convertible notes |
|
1,965.9 |
|
|
|
1,981.8 |
|
Long-term operating lease liabilities |
|
93.3 |
|
|
|
98.6 |
|
Other long-term liabilities |
|
97.1 |
|
|
|
90.0 |
|
Total liabilities |
|
2,867.7 |
|
|
|
2,891.2 |
|
Commitments and contingencies |
|
|
|
||||
Stockholders’ equity: |
|
|
|
||||
Preferred stock, |
|
— |
|
|
|
— |
|
Common stock, |
|
0.1 |
|
|
|
0.1 |
|
Additional paid-in capital |
|
1,996.6 |
|
|
|
2,109.0 |
|
Accumulated other comprehensive income (loss) |
|
(6.1 |
) |
|
|
0.5 |
|
Retained earnings |
|
236.0 |
|
|
|
138.7 |
|
|
|
(37.3 |
) |
|
|
(206.2 |
) |
Total stockholders’ equity |
|
2,189.3 |
|
|
|
2,042.1 |
|
Total liabilities and stockholders’ equity |
$ |
5,057.0 |
|
|
$ |
4,933.3 |
|
* |
|
We adjusted our 2021 amounts to reflect the simplified convertible instruments accounting guidance (ASU 2020-06), which we adopted on a full retrospective basis. |
Table B Consolidated Statements of Operations (In millions, except per share data) (Unaudited) |
|||||||
|
Three Months Ended
|
||||||
|
2022 |
|
2021 |
||||
|
|
|
As Adjusted* |
||||
Revenue |
$ |
628.8 |
|
|
$ |
505.0 |
|
Cost of sales |
|
230.7 |
|
|
|
161.1 |
|
Gross profit |
|
398.1 |
|
|
|
343.9 |
|
Operating expenses: |
|
|
|
||||
Research and development |
|
135.9 |
|
|
|
109.4 |
|
Selling, general and administrative |
|
220.9 |
|
|
|
188.6 |
|
Total operating expenses |
|
356.8 |
|
|
|
298.0 |
|
Operating income |
|
41.3 |
|
|
|
45.9 |
|
Interest expense |
|
(4.6 |
) |
|
|
(4.7 |
) |
Income from equity investments |
|
0.2 |
|
|
|
— |
|
Interest and other income (expense), net |
|
(0.8 |
) |
|
|
0.1 |
|
Income before income taxes |
|
36.1 |
|
|
|
41.3 |
|
Income tax benefit |
|
(61.2 |
) |
|
|
(15.2 |
) |
Net income |
$ |
97.3 |
|
|
$ |
56.5 |
|
|
|
|
|
||||
Basic net income per share |
$ |
1.00 |
|
|
$ |
0.59 |
|
Shares used to compute basic net income per share |
|
97.2 |
|
|
|
96.3 |
|
Diluted net income per share |
$ |
0.93 |
|
|
$ |
0.56 |
|
Shares used to compute diluted net income per share |
|
107.2 |
|
|
|
104.6 |
|
* |
|
We adjusted our 2021 amounts to reflect the simplified convertible instruments accounting guidance (ASU 2020-06), which we adopted on a full retrospective basis. |
Table C Revenue by Geography (Dollars in millions) (Unaudited) |
|||||||
|
Three Months Ended
|
||||||
|
2022 |
|
2021 |
||||
|
$ |
451.2 |
|
|
$ |
381.2 |
|
Year over year growth |
|
18 |
% |
|
|
30 |
% |
% of total revenue |
|
72 |
% |
|
|
75 |
% |
|
|
|
|
||||
International revenue |
$ |
177.6 |
|
|
$ |
123.8 |
|
Year over year growth |
|
43 |
% |
|
|
10 |
% |
% of total revenue |
|
28 |
% |
|
|
25 |
% |
|
|
|
|
||||
Total revenue (1) |
$ |
628.8 |
|
|
$ |
505.0 |
|
Year over year growth |
|
25 |
% |
|
|
25 |
% |
(1) |
|
The sum of the revenue components may not equal total revenue due to rounding. |
Table D Revenue by Component (Dollars in millions) (Unaudited) |
|||||||
|
Three Months Ended
|
||||||
|
2022 |
|
2021 |
||||
Sensor and other revenue (1) (2) |
$ |
543.2 |
|
|
$ |
424.3 |
|
Year over year growth |
|
28 |
% |
|
|
31 |
% |
% of total revenue |
|
86 |
% |
|
|
84 |
% |
|
|
|
|
||||
Hardware revenue (1)(3) |
$ |
85.6 |
|
|
$ |
80.7 |
|
Year over year growth |
|
6 |
% |
|
|
1 |
% |
% of total revenue |
|
14 |
% |
|
|
16 |
% |
|
|
|
|
||||
Total revenue (4) |
$ |
628.8 |
|
|
$ |
505.0 |
|
Year over year growth |
|
25 |
% |
|
|
25 |
% |
(1) |
|
Includes allocated subscription revenue. |
(2) |
|
Includes services, freight, accessories, Non-CGM acquired revenue, etc. |
(3) |
|
Includes transmitter and receiver revenue. |
(4) |
|
The sum of the revenue components may not equal total revenue due to rounding. |
Table E Itemized Reconciliation Between GAAP and Non-GAAP Financial Measures (In millions, except per share data) (Unaudited) |
|||||||
|
Three Months Ended
|
||||||
|
2022 |
|
2021 |
||||
|
|
As Adjusted* |
|||||
GAAP operating income |
$ |
41.3 |
|
|
$ |
45.9 |
|
Amortization of acquired intangible assets |
|
2.0 |
|
|
|
0.5 |
|
Intellectual property litigation costs (1) |
|
7.0 |
|
|
|
— |
|
Non-GAAP operating income |
$ |
50.3 |
|
|
$ |
46.4 |
|
|
|
|
|
||||
GAAP net income |
$ |
97.3 |
|
|
$ |
56.5 |
|
Depreciation and amortization |
|
36.8 |
|
|
|
20.9 |
|
Intellectual property litigation costs (1) |
|
7.0 |
|
|
|
— |
|
Income from equity investments (2) |
|
(0.2 |
) |
|
|
— |
|
Share-based compensation |
|
29.1 |
|
|
|
28.0 |
|
Interest expense and interest income |
|
3.6 |
|
|
|
4.2 |
|
Income tax benefit |
|
(61.2 |
) |
|
|
(15.2 |
) |
Adjusted EBITDA |
$ |
112.4 |
|
|
$ |
94.4 |
|
|
|
|
|
||||
GAAP net income |
$ |
97.3 |
|
|
$ |
56.5 |
|
Amortization of acquired intangible assets |
|
2.0 |
|
|
|
0.5 |
|
Intellectual property litigation costs (1) |
|
7.0 |
|
|
|
— |
|
Income from equity investments (2) |
|
(0.2 |
) |
|
|
— |
|
Adjustments related to taxes (3) |
|
(73.8 |
) |
|
|
(24.5 |
) |
Non-GAAP net income |
$ |
32.3 |
|
|
$ |
32.5 |
|
|
|
|
|
||||
GAAP net income |
$ |
97.3 |
|
|
$ |
56.5 |
|
Interest expense on senior convertible notes, net of tax |
|
2.8 |
|
|
|
1.7 |
|
GAAP net income used for diluted EPS, if-converted |
$ |
100.1 |
|
|
$ |
58.2 |
|
|
|
|
|
||||
GAAP diluted net income per share (4) |
$ |
0.93 |
|
|
$ |
0.56 |
|
Amortization of acquired intangible assets |
|
0.02 |
|
|
|
0.01 |
|
Intellectual property litigation costs (1) |
|
0.07 |
|
|
|
— |
|
Income from equity investments (2) |
|
— |
|
|
|
— |
|
Adjustments related to taxes (3) |
|
(0.74 |
) |
|
|
(0.25 |
) |
Impact of adjustment to GAAP diluted shares (5) |
|
0.03 |
|
|
|
0.01 |
|
Non-GAAP diluted net income per share (6) |
$ |
0.32 |
|
|
$ |
0.33 |
|
|
|
|
|
||||
GAAP diluted weighted-average shares outstanding |
|
107.2 |
|
|
|
104.6 |
|
Non-GAAP diluted weighted-average shares outstanding (7) |
|
100.4 |
|
|
|
99.4 |
|
Reconciliation of non-GAAP diluted weighted-average shares outstanding: |
|
|
|
||||
GAAP diluted weighted-average shares outstanding |
107.2 |
|
|
104.6 |
|
||
Adjustment for dilutive impact of senior convertible notes due 2023 (7) |
|
(4.8 |
) |
|
|
(5.2 |
) |
Adjustment for dilutive impact of senior convertible notes due 2025 (7) |
|
(2.0 |
) |
|
|
— |
|
Non-GAAP diluted weighted-average shares outstanding (7) |
|
100.4 |
|
|
|
99.4 |
|
* |
|
We adjusted our 2021 amounts to reflect the simplified convertible instruments accounting guidance (ASU 2020-06), which we adopted on a full retrospective basis. The adoption eliminates the non-cash interest expense related to the conversion features of the convertible notes beginning in the first quarter of 2020. |
(1) |
|
Represents costs related to a patent infringement lawsuit. |
(2) |
|
Represents a gain from the sale of an equity investment. |
(3) |
|
For the three months ended |
(4) |
|
Net income used for calculating diluted earnings per share for the three months ended |
(5) |
|
The adjustment for the three months ended |
(6) |
|
The sum of the non-GAAP diluted net income per share components may not equal the totals due to rounding. |
(7) |
|
The non-GAAP diluted weighted-average shares outstanding for the three months ended |
ABOUT NON-GAAP FINANCIAL MEASURES
The accompanying press release dated
We use these non-GAAP financial measures for financial and operational decision making and as a means to evaluate period-to-period comparisons. We believe that they provide useful information about operating results, enhance the overall understanding of our operating performance and future prospects, and allow for greater transparency with respect to key metrics used by senior management in our financial and operational decision making. Our non-GAAP financial measures exclude amounts that we do not consider part of ongoing operating results when planning and forecasting and when assessing the performance of the organization and our senior management. We compute non-GAAP financial measures using the same consistent method from quarter to quarter and year to year. We may consider whether other significant items that arise in the future should be excluded from our non-GAAP financial measures.
We report non-GAAP financial measures in addition to, and not as a substitute for, or superior to, measures of financial performance prepared in accordance with Generally Accepted Accounting Principles (GAAP). These non-GAAP financial measures are not based on any comprehensive set of accounting rules or principles, differ from GAAP measures with the same names, and may differ from non-GAAP financial measures with the same or similar names that are used by other companies. We believe that non-GAAP financial measures should only be used to evaluate our results of operations in conjunction with the corresponding GAAP financial measures. We encourage investors to carefully consider our results under GAAP, as well as our supplemental non-GAAP information and the reconciliations between these presentations, to more fully understand our business.
Management believes that presentation of operating results that excludes these items provides useful supplemental information to investors and facilitates the analysis of our core operating results and comparison of operating results across reporting periods. Management also believes that this supplemental non-GAAP information is therefore useful to investors in analyzing and assessing our past and future operating performance.
Table E reconciles the non-GAAP financial measures in the press release to the most directly comparable financial measures prepared in accordance with Generally Accepted Accounting Principles (GAAP).
We exclude the following items from non-GAAP financial measures for non-GAAP gross profit, non-GAAP operating income (loss), non-GAAP net income (loss), and non-GAAP net income (loss) per share:
- Amortization of acquired intangible assets
- Collaborative research and development fees associated with milestone and incentive payments under our collaborative research and development arrangements paid or payable by issuing shares of our common stock
- Business transition and related costs associated with acquisition, integration and business transition activities, including severance, relocation, consulting, leasehold exit costs, third party merger and acquisition costs, and other costs directly associated with such activities
- COVID-19 costs associated with the COVID-19 outbreak related to taking the necessary precautions for essential personnel to operate safely both in person as well as remotely. Costs incurred include items like incremental payroll costs, consulting support, IT infrastructure and facilities related costs
- Income or loss from equity investments
- Intellectual property litigation costs
- Litigation settlement costs
- Loss on extinguishment of debt associated with our senior convertible notes
- Adjustments related to taxes for the excluded items above, as well as excess benefits or tax deficiencies from stock-based compensation, and the quarterly impact of other discrete items
Adjusted EBITDA excludes non-cash operating charges for share-based compensation, depreciation and amortization as well as non-operating items such as interest income, interest expense, loss on extinguishment of debt, income and loss from equity investments, and income tax expense or benefit. For the reasons explained above, adjusted EBITDA also excludes non-cash collaborative research and development fees, business transition and related costs, COVID-19 costs, litigation settlement costs, and intellectual property litigation costs.
View source version on businesswire.com: https://www.businesswire.com/news/home/20220428005374/en/
INVESTOR RELATIONS CONTACT:
Senior Director - Investor Relations and Corporate FP&A
investor-relations@dexcom.com
(858) 200-0200
MEDIA CONTACT:
(619) 884-2118
Source:
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