DexCom, Inc. ( DXCM Quick Quote DXCM - Free Report) reported first-quarter 2021 adjusted earnings per share (EPS) of 33 cents, which beat the Zacks Consensus Estimate of 31 cents by 6.5%. However, the bottom line declined 25% on a year-over-year basis. Revenue Details
Total revenues grew 24.7% to $505 million on a year-over-year basis and surpassed the Zacks Consensus Estimate by 4.6%. 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.
Revenues at the Sensor and other revenue segment (84% of total revenues) climbed 30.6% on a year-over-year basis to $424.3 million. Hardware revenues (16%) inched up 0.7% year over year to $80.7 million.
U.S. revenues (75% of total revenues) increased 30.4% on a year-over-year basis to $381.2 million. International revenues (25%) climbed 9.8% year over year to $123.8 million.
Gross profit in the quarter under review totaled $343.9 million, up 34.1% year over year. DexCom generated gross margin (as a percentage of revenues) of 68.1%, which expanded 480 basis points (bps) year over year.
Research and development expenses amounted to $109.4 million in the quarter, up 49.7% year over year. Selling, general and administrative expenses totaled $188.6 million in the reported quarter, up 25.9% year over year.
The company reported total operating expenses of $298 million, up 33.7% year over year. The company reported operating income of $45.9 million, up 36.6% from the prior-year quarter. Operating margin (as a percentage of revenues) of 9.1% contracted 80 bps year over year. Financial Position
The company exited the first quarter with $2.63 billion in cash, cash equivalents and marketable securities, compared to $2.71 billion in the preceding quarter.
On the basis of robust first-quarter performance DexCom has decided to raise its 2021 revenue guidance, while reiterating the previous guidance for adjusted gross margin and adjusted operating margin.
The company expects revenues to be $2.26-$2.36 billion, reflecting growth of 17-22% from the previous year. The Zacks Consensus Estimate for the same is pegged at $2.31 billion. While adjusted gross margin is anticipated to be about 65%, adjusted operating margin is estimated to be around 13%. Wrapping Up
DexCom exited the first quarter on a strong note, wherein both earnings and revenues beat the Zacks Consensus Estimate. Impressive contribution from the Sensor and other revenue segment, and domestic and international revenue growth were key catalysts. Expansion in gross margin 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. Apart from making significant advancements with respect to strategic objectives, DexCom ended the quarter with new patient additions as well. Meanwhile, cut-throat competition in the market for blood & glucose monitoring devices remains a concern. Zacks Rank
Currently, DexCom carries a Zacks Rank #5 (Strong Sell).
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