Dexcom Reports First Quarter 2019 Financial Results

SAN DIEGO--(BUSINESS WIRE)-- DexCom, Inc. (Nasdaq: DXCM) today reported its financial results as of and for the quarter ended March 31, 2019.

First Quarter 2019 Highlights:

• Revenue grew 52% versus the same quarter of the prior year to $280.5 million
• U.S. revenue growth of 45% and international revenue growth of 79%
• Demonstrated additional real-world clinical benefits driven by Dexcom real-time CGM, as described in recent scientific publications:
  • Actionable, predictive low glucose alerts with the Dexcom G6 enable further reductions in hypoglycemia, independent of screen view frequency¹
  • Data sharing via Dexcom Share and Follow is associated with improved time in range and device utilization in children and adolescents with diabetes²

“Dexcom is off to a great start in 2019, with our growth testifying to the rising awareness and excitement around real-time CGM and Dexcom’s new G6 technology,” said Kevin Sayer, Dexcom’s Chairman, President and CEO. “Given the strength of our performance thus far, we are pleased to raise our full-year growth outlook.”

2019 Annual Guidance

Dexcom updated its revenue, gross profit and operating margin expectations for full fiscal year 2019:

• Revenue of $1.25 billion to $1.3 billion
• Gross profit margin of 64% to 65%
• Non-GAAP operating margin of approximately 6%
• Non-GAAP adjusted EBITDA margin of approximately 18%

First Quarter 2019 Financial Results

Revenue: In the first quarter of 2019, worldwide revenue grew 52% to $280.5 million, up from $184.4 million in the first quarter of 2018. The growth was driven by increasing volumes across all channels in conjunction with the rising global awareness of the benefits of real-time CGM.

Gross Profit: Gross profit totaled $168.8 million or 60.2% of sales for the first quarter of 2019, compared to $118.9 million or 64.5% of sales in the first quarter of 2018.

Operating Loss: GAAP operating loss for the first quarter of 2019 was $14.4 million, compared to a GAAP operating loss of $30.7 million for the first quarter of 2018.

Non-GAAP operating loss* for the first quarter of 2019 was $7.6 million, compared to a non-GAAP operating loss of $28.7 million for the first quarter of 2018. The first quarter 2019 non-GAAP amount excludes $6.4 million of business transition and related costs and the first quarter 2018 non-GAAP amount excludes $2.0 million of such costs.

Net Loss and Net Loss per Share: GAAP net loss was $26.9 million, or $0.30 per share, for the first quarter of 2019, compared to a GAAP net loss of $24.2 million, or $0.28 per share, for the same quarter of 2018.

Non-GAAP net loss* was $4.6 million, or $0.05 per share, for the first quarter of 2019, compared to a non-GAAP net loss of $26.3 million, or $0.30 per diluted share, for the same quarter of 2018. The first quarter 2019 non-GAAP amount excludes $6.4 million of business transition costs, $11.3 million of non-cash interest expense related to Dexcom’s senior convertible notes, and a $4.2 million loss related to equity investments.

Cash and Liquidity: As of March 31, 2019, Dexcom held $1.358 billion in cash and marketable securities and maintained full availability on its $200.0 million revolving credit facility. The cash balance includes the net proceeds from Dexcom’s fourth quarter 2018 convertible notes offering and represents significant financial and strategic flexibility as Dexcom continues to expand production capacity and explore new market opportunities.

* See the tables below for a reconciliation of these GAAP and non-GAAP financial measures.

¹ Puhr S, Derdzinski M, Parker AS, Welsh JB, Price DA. Real-World Hypoglycemia Avoidance With a Predictive Low Glucose Alert Does Not Depend on Frequent Screen Views. J Diabetes Sci Technol. 2019:1932296819840691. [publication forthcoming, presented at ATTD in February 2019]; Puhr S, Derdzinski M, Welsh JB, Parker AS, Walker T, Price DA. Real-World Hypoglycemia Avoidance with a Continuous Glucose Monitoring System’s Predictive Low Glucose Alert. Diabetes Technol Ther. 2019;21(4):155-158. [published online March 30, 2019]

² Welsh JB, Derdzinski M, Parker AS, Puhr S, Jimenez A, Walker T. Real-Time Sharing and Following of Continuous Glucose Monitoring Data in Youth. Diabetes Therapy. 2019;10(2):751-755. [published online January 30, 2019]

Conference Call

Management will hold a conference call today starting at 4:30 p.m. (Eastern Time). The conference call will be concurrently webcast. The link to the webcast will be available on the DexCom, Inc. website at www.dexcom.com by navigating to “About Us,” then “Investor Relations,” and then “Events and Presentations,” and will be archived for future reference. To listen to the conference call, please dial (800) 446-1671 (US/Canada) or (847) 413-3362 (International) and use the confirmation number “47626298” approximately five minutes prior to the start time.

Statement Regarding Use of Non-GAAP Financial Measures

Dexcom reports non-GAAP financial measures in addition to, and not as a substitute for, or superior to, financial measures calculated in accordance with GAAP. Our financial measures under GAAP include certain non-cash collaborative research and development fees, business transition and related costs, income and expense related to our equity investment in Tandem Diabetes Care, Inc., and certain interest expense related to our senior convertible notes, as shown in the itemized reconciliation between GAAP and non-GAAP financial measures included in this press release. 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.

These non-GAAP measures may be different from non-GAAP measures used by other companies. In addition, these non-GAAP measures are not based on any comprehensive set of accounting rules or principles. We believe that non-GAAP measures have limitations in that they do not reflect all of the amounts associated with our results of operations as determined in accordance with U.S. GAAP and that these measures should only be used to evaluate our results of operations in conjunction with the corresponding GAAP measures. We encourage investors to carefully consider our results under GAAP, as well as our supplemental non-GAAP information and the reconciliation between these presentations, to more fully understand our business.

About DexCom, Inc.

DexCom, Inc., headquartered in San Diego, California, is developing and marketing continuous glucose monitoring systems for use by people with diabetes and by healthcare providers.

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. All forward-looking statements and reasons why results might differ included in this press release are made as of the date of this release, based on information currently available to Dexcom, deal with future events, are subject to various risks and uncertainties, and actual results could differ materially from those anticipated in those forward-looking statements. The risks and uncertainties that may cause actual results to differ materially from Dexcom’s current expectations are more fully described in Dexcom’s Annual Report on Form 10-K for the period ended December 31, 2018, as filed with the Securities and Exchange Commission on February 21, 2019. Except as required by law, Dexcom assumes no obligation to update any such forward-looking statement after the date of this report or to conform these forward-looking statements to actual results.

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