DexCom, Inc.
CEO : Mr. Kevin Ronald Sayer
Quarterly earnings growth(YoY,%)
| Period | Revenue | Operating Income | EPS | Release Date |
|---|---|---|---|---|
| 2023 Q2 | 25.2% YoY | 66.4% | 130.8% | 2023-07-27 |
Kevin Sayer says,
Q2 Organic Revenue Growth
- Q2 organic revenue growth of 26% compared to Q2 2022
G7 Launch and Positive Feedback
- G7 launch gaining momentum with positive feedback from customers and clinicians
- G7 offers improved ease of use, discrete form factor, faster warm-up time, and redesigned software platform
- Majority of G7 users are new to Dexcom
- 8,000 physicians in the US are now prescribing G7 who were previously not prescribing Dexcom
Reimbursement for G7
- All major PBMs now cover Dexcom G7, strengthening the position as the most covered CGM brand
- Majority of customers pay less than $20 per month out of pocket in the pharmacy channel
Expansion of Coverage for Basal Insulin Users
- CMS decision to expand Medicare coverage for people with type 2 diabetes using basal insulin only
- Commercial payers quickly followed suit with greater than 60% commercial coverage for the basal population
- Physicians prescribing Dexcom to basal patients for better outcomes
- Highest new patient quarter within the Medicare channel in Q2
International Expansion
- Share gains accelerated in Q2 with expansion into 6 new markets
- G7 launch in Canada and regulatory clearance received
- DexCom ONE rollout in Argentina marks initial entrance into Latin America
Evidence of Dexcom CGM’s Impact
- Studies demonstrate Dexcom CGM’s ability to drive greater health and economic outcomes
- Real-world study of adults with type 2 diabetes not using insulin showed a 40% increase in time in range and improvement in A1c levels
- High levels of engagement and utilization of Dexcom CGM in type 2 studies
Future Plans and Product Launch
- Increased LRP and plan to launch a product specifically for people not on insulin utilizing G7 hardware and custom software experience
- Expect to launch early next year with a 15-day wear time and cash pay option
- New product provides a glimpse into future plans to serve larger populations with tailored experiences
Jereme Sylvain says,
Revenue Growth
- Q2 2023 worldwide revenue was $871 million, representing a growth of 26% on an organic basis compared to Q2 2022.
- U.S revenue totaled $617 million, a growth of 21% compared to Q2 2022.
- International revenue grew 38%, totaling $255 million in Q2 2023.
New Customer Growth
- The company achieved another record new customer star quarter in Q2 with continued momentum in the U.S.
- The G7 launch and recently finalized CMS coverage provided a new tailwind to the Medicare business in the U.S.
International Expansion
- International organic revenue growth was 40% for the second quarter.
- The company has consistently taken market share across its footprint in recent quarters and gained international market share for the ninth straight quarter.
- In the U.K market, the company experienced acceleration in growth, posting one of the highest growth rates in recent years.
- The company expanded connectivity leadership in the U.K market as Insulet extended their launch of Omnipod 5, powered by the G6 system.
Gross Margin
- Q2 2023 gross profit was $553.5 million or 63.5% of revenue, slightly lower than Q2 2022.
- The decline in gross margin was expected as G7 production scaled up, but cost profile will gradually improve with increased production volumes.
- The Malaysia facility recently initiated commercial production, and similar dynamic is expected as production scales up in the near-term.
Guidance and Financial Position
- Full year 2022 revenue guidance is raised to a range of $3.50 billion to $3.55 billion, representing growth of 20% to 22% for the year.
- Non-GAAP gross margin guidance is 63%, representing the high-end of the previous guidance range.
- Non-GAAP operating margin is projected to be approximately 17% and adjusted EBITDA margin of 26.5% for fiscal year 2023.
- The company closed Q2 with over $3.6 billion of cash and cash equivalents, leaving them in a strong financial position.
Q & A sessions,
Revenue Growth and Market Share
- Q2 was the highest revenue quarter ever for the company
- Record new customer starts worldwide
- Gained market share in nearly every major reimbursed geography
G7 Launch and International Expansion
- G7 product launched in 13 international markets
- Built broad reimbursement in the U.S.
- G7 app had five flawless upgrades
Financial Performance
- Operating expense leverage of over 450 basis points
- Doubled earnings per share year-over-year
- Posted one of the largest free cash flow quarters in company’s history
Challenges and Opportunities in the Market
- Basal launch presents a big opportunity as it addresses the needs of a new patient group
- Challenges in document gathering and distribution for Medicare patients
- CJM adoption and awareness are more positive now compared to when the company initially launched
- Education and expansion into the primary care physician market are ongoing efforts
Guidance and Outlook
- Raised guidance due to strength in international markets and coverage/access wins in the U.S.
- Expectation of a good back half of the year with derisked base case
- No significant stocking, revenue growth driven by patient growth and market share gains
No bad stock 