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DexCom (DXCM) Q3 Earnings and Revenues Surpass Estimates
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DexCom, Inc.’s (DXCM - Free Report) third-quarter 2020 adjusted earnings of 94 cents per share surpassed the Zacks Consensus Estimate of 64 cents by 46.9%. Moreover, the bottom line improved 44.6% on a year-over-year basis.
Total revenues grew 26.4% to $500.9 million on a year-over-year basis and beat the Zacks Consensus Estimate by 4.9%. Rising volumes across all channels, strong new patient additions and increasing global awareness of the benefits of real-time Continuous Glucose Monitoring (CGM) contributed to the upside.
Segmental Details
Revenues at the Sensor and other revenue segment (81% of total revenues) climbed 28.1% on a year-over-year basis to $406.3 million. Hardware revenues (19%) improved 19.6% year over year to $94.6 million.
Geographical Details
U.S. revenues (80% of total revenues) increased 29.1% on a year-over-year basis to $398.6 million. International revenues (20%) grew 16.9% year over year to $102.3 million.
Adjusted gross profit in the quarter under review totaled $340.7 million, up 37.9% year over year. DexCom generated adjusted gross margin (as a percentage of revenues) of 68%, which expanded 570 basis points (bps) year over year.
Research and development expenses amounted to $87.7 million in the quarter, up 31.5% year over year. Selling, general and administrative expenses totaled $158.6 million in the reported quarter, up 27.7% year over year.
The company reported total operating expenses of $246.3 million, up 29% year over year.
The company reported adjusted operating income of $95 million, up 60.7% from the prior-year quarter. Adjusted operating margin (as a percentage of revenues) of 19%, which expanded 410 bps year over year.
Financial Position
The company exited the third quarter with $530 million in cash and cash equivalents, which improved 27.1% sequentially.
2020 Guidance
DexCom has decided to update full-year 2020 guidance.
The company expects revenues to be around $1.90 billion, reflecting growth of 29% from the previous year. While adjusted gross margin is anticipated to meet or exceed 66% (up from the prior projection of 65%), adjusted operating margin is estimated to be 16% or higher (up from the previous expectation of 14%).
Wrapping Up
DexCom exited the third quarter on a strong note, wherein both earnings and revenues beat the Zacks Consensus Estimate. Impressive contributions from the segments were key catalysts. Expansion in both gross and operating margins is a positive.
Additionally, the glucose monitoring market presents significant commercial opportunity for this company. DexCom’s prospects in alternative markets such as the non-intensive diabetes management space, the hospital, gestational, pre-diabetes and obesity are likely to provide it a competitive edge in the MedTech space.
During the quarter under review, the company created the first-ever registry focused on tracking outcomes of in-hospital real-time CGM use in response to the COVID-19 pandemic. Additionally, DexCom started the Patient Assistance Program to help current U.S. customers who have lost their health insurance coverage as a result of the impact of the pandemic. These developments instill optimism in the stock amid this uncertain period.
Meanwhile, cut-throat competition in the market for blood & glucose monitoring devices remains a concern.
Zacks Rank
Currently, DexCom carries a Zacks Rank of 3 (Hold).
Key Picks
Some better-ranked stocks, which are expected to report earnings soon, are Insulet Corporation (PODD - Free Report) , IDEXX Laboratories, Inc. (IDXX - Free Report) and Quidel Corporation (QDEL - Free Report) .
The Zacks Consensus Estimate for Insulet’s third-quarter 2020 adjusted EPS is currently pegged at 6 cents. The consensus estimate for third-quarter revenues stands at $220.89 million. The company, which currently carries a Zacks Rank #1 (Strong Buy), is expected to release results soon. You can seethe complete list of today’s Zacks #1 Rank stocks here.
IDEXX currently carries a Zacks Rank #2. The Zacks Consensus Estimate for its third-quarter 2020 adjusted EPS is currently pegged at $1.41. The consensus estimate for third-quarter revenues stands at $666.7 million.
The Zacks Consensus Estimate for Quidel’s third-quarter 2020 revenues is pegged at $476.1 million, suggesting year-over-year improvement of 276.4%. The same for EPS stands at $4.58, indicating growth of 554.3% from the year-ago reported figure. The company currently sports a Zacks Rank #1.
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DexCom (DXCM) Q3 Earnings and Revenues Surpass Estimates
DexCom, Inc.’s (DXCM - Free Report) third-quarter 2020 adjusted earnings of 94 cents per share surpassed the Zacks Consensus Estimate of 64 cents by 46.9%. Moreover, the bottom line improved 44.6% on a year-over-year basis.
Total revenues grew 26.4% to $500.9 million on a year-over-year basis and beat the Zacks Consensus Estimate by 4.9%. Rising volumes across all channels, strong new patient additions and increasing global awareness of the benefits of real-time Continuous Glucose Monitoring (CGM) contributed to the upside.
Segmental Details
Revenues at the Sensor and other revenue segment (81% of total revenues) climbed 28.1% on a year-over-year basis to $406.3 million. Hardware revenues (19%) improved 19.6% year over year to $94.6 million.
Geographical Details
U.S. revenues (80% of total revenues) increased 29.1% on a year-over-year basis to $398.6 million. International revenues (20%) grew 16.9% year over year to $102.3 million.
DexCom, Inc. Price, Consensus and EPS Surprise
DexCom, Inc. price-consensus-eps-surprise-chart | DexCom, Inc. Quote
Margin Analysis
Adjusted gross profit in the quarter under review totaled $340.7 million, up 37.9% year over year. DexCom generated adjusted gross margin (as a percentage of revenues) of 68%, which expanded 570 basis points (bps) year over year.
Research and development expenses amounted to $87.7 million in the quarter, up 31.5% year over year. Selling, general and administrative expenses totaled $158.6 million in the reported quarter, up 27.7% year over year.
The company reported total operating expenses of $246.3 million, up 29% year over year.
The company reported adjusted operating income of $95 million, up 60.7% from the prior-year quarter. Adjusted operating margin (as a percentage of revenues) of 19%, which expanded 410 bps year over year.
Financial Position
The company exited the third quarter with $530 million in cash and cash equivalents, which improved 27.1% sequentially.
2020 Guidance
DexCom has decided to update full-year 2020 guidance.
The company expects revenues to be around $1.90 billion, reflecting growth of 29% from the previous year. While adjusted gross margin is anticipated to meet or exceed 66% (up from the prior projection of 65%), adjusted operating margin is estimated to be 16% or higher (up from the previous expectation of 14%).
Wrapping Up
DexCom exited the third quarter on a strong note, wherein both earnings and revenues beat the Zacks Consensus Estimate. Impressive contributions from the segments were key catalysts. Expansion in both gross and operating margins is a positive.
Additionally, the glucose monitoring market presents significant commercial opportunity for this company. DexCom’s prospects in alternative markets such as the non-intensive diabetes management space, the hospital, gestational, pre-diabetes and obesity are likely to provide it a competitive edge in the MedTech space.
During the quarter under review, the company created the first-ever registry focused on tracking outcomes of in-hospital real-time CGM use in response to the COVID-19 pandemic. Additionally, DexCom started the Patient Assistance Program to help current U.S. customers who have lost their health insurance coverage as a result of the impact of the pandemic. These developments instill optimism in the stock amid this uncertain period.
Meanwhile, cut-throat competition in the market for blood & glucose monitoring devices remains a concern.
Zacks Rank
Currently, DexCom carries a Zacks Rank of 3 (Hold).
Key Picks
Some better-ranked stocks, which are expected to report earnings soon, are Insulet Corporation (PODD - Free Report) , IDEXX Laboratories, Inc. (IDXX - Free Report) and Quidel Corporation (QDEL - Free Report) .
The Zacks Consensus Estimate for Insulet’s third-quarter 2020 adjusted EPS is currently pegged at 6 cents. The consensus estimate for third-quarter revenues stands at $220.89 million. The company, which currently carries a Zacks Rank #1 (Strong Buy), is expected to release results soon. You can see the complete list of today’s Zacks #1 Rank stocks here.
IDEXX currently carries a Zacks Rank #2. The Zacks Consensus Estimate for its third-quarter 2020 adjusted EPS is currently pegged at $1.41. The consensus estimate for third-quarter revenues stands at $666.7 million.
The Zacks Consensus Estimate for Quidel’s third-quarter 2020 revenues is pegged at $476.1 million, suggesting year-over-year improvement of 276.4%. The same for EPS stands at $4.58, indicating growth of 554.3% from the year-ago reported figure. The company currently sports a Zacks Rank #1.
Zacks’ 2020 Election Stock Report:
In addition to the companies you learned about above, we invite you to learn more about profiting from the upcoming presidential election. Trillions of dollars will shift into new market sectors after the votes are tallied, and investors could see significant gains. This report reveals specific stocks that could soar: 6 if Trump wins, 6 if Biden wins.
Check out the 2020 Election Stock Report >>