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DexCom (DXCM) Q2 Earnings Match Estimates, Revenues Miss
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DexCom, Inc. (DXCM - Free Report) reported second-quarter 2022 adjusted earnings per share (EPS) of 17 cents, in line with the Zacks Consensus Estimate. The bottom line declined 10.5% on a year-over-year basis.
GAAP net income per share in the quarter was 12 cents, compared with the year-ago quarter’s figure of 19 cents per share.
Revenue Details
Total revenues grew 17% (16% on an organic basis) to $696.2 million on a year-over-year basis but missed the Zacks Consensus Estimate by 0.1%. Rising volumes across all channels, along with strong new customer additions owing to 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 revenues segment (86% of total revenues) climbed 21% on a year-over-year basis to $597.7 million. Hardware revenues (14%) declined 2% year over year to $98.5 million.
Geographical Details
U.S. revenues (73% of total revenues) increased 11% on a year-over-year basis to $511 million. International revenues (27%) surged 39% year over year to $185.2 million.
Gross profit in the quarter under review totaled $449.5 million, up 7.8% year over year. DexCom generated a gross margin (as a percentage of revenues) of 64.6%, which contracted 550 basis points (bps) year over year.
Research and development expenses amounted to $121.7 million in the quarter, down 5.7% year over year. Selling, general and administrative expenses totaled $248.9 million in the reported quarter, up 33.5% year over year.
The company reported total operating expenses of $372.5 million, up 17.8% from the prior-year figure. Operating margin (as a percentage of revenues) of 11.1% contracted 590 bps year over year.
Financial Position
The company exited the second quarter with $2.75 billion in cash, cash equivalents and marketable securities, compared with $2.69 billion in the preceding quarter.
Total assets in the second quarter amounted to $5.2 billion, compared with $5.06 billion on a sequential basis.
2022 Guidance Reaffirmed
DexCom tightened its revenue guidance for 2022 from $2.82-$2.94 billion to $2.86-$2.91 billion. The Zacks Consensus Estimate for the same stands at $2.92 billion.
The company reiterated the 2022 guidance for adjusted gross margin and adjusted operating margin.
While adjusted gross margin is anticipated to be about 65%, adjusted operating margin is estimated to be around 16%.
Wrapping Up
DexCom exited second-quarter 2022 on a decent note, wherein earnings met the Zacks Consensus Estimate and revenues missed the same slightly. Impressive contributions from the Sensor segment and domestic and international revenue growth were the key catalysts.
Additionally, the glucose monitoring market presents significant commercial opportunities for the 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 continued advancements with respect to key strategic objectives, DexCom ended the quarter with new patient additions as well. The company launched its latest CGM, DexCom ONE, in the United Kingdom and Spain during the second quarter. It also received CE Mark for an updated sensor algorithm, making the latest G7 sensor technology available to international markets. These developments are likely to support the future growth of the company.
Nevertheless, contraction in both gross and operating margins is a woe. Apart from this, cut-throat competition in the market for blood & glucose monitoring devices remains a concern.
Estimates for Lantheus have improved from earnings of $3.04 to $3.08 for 2022 and $3.33 to $3.62 for 2023 in the past 30 days. LNTH has surged 156.6% so far this year.
Lantheus delivered an earnings surprise of 77.82%, on average, in the last four quarters.
ShockWave Medical’s earnings per share estimates have improved from $1.84 to $2.02 for 2022 and from $2.82 to $2.95 for 2023 in the past 30 days. SWAV has declined 19.1% so far this year.
ShockWave Medical delivered an earnings surprise of 189.99%, on average, in the last four quarters.
Alkermes’ earnings per share estimates have improved from breakeven to 4 cents for 2022 and from 56 cents to 59 cents for 2023 in the past 30 days. ALKS has gained 19.6% so far this year.
Alkermes delivered an earnings surprise of 350.48%, on average, in the last four quarters.
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DexCom (DXCM) Q2 Earnings Match Estimates, Revenues Miss
DexCom, Inc. (DXCM - Free Report) reported second-quarter 2022 adjusted earnings per share (EPS) of 17 cents, in line with the Zacks Consensus Estimate. The bottom line declined 10.5% on a year-over-year basis.
GAAP net income per share in the quarter was 12 cents, compared with the year-ago quarter’s figure of 19 cents per share.
Revenue Details
Total revenues grew 17% (16% on an organic basis) to $696.2 million on a year-over-year basis but missed the Zacks Consensus Estimate by 0.1%. Rising volumes across all channels, along with strong new customer additions owing to 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 revenues segment (86% of total revenues) climbed 21% on a year-over-year basis to $597.7 million. Hardware revenues (14%) declined 2% year over year to $98.5 million.
Geographical Details
U.S. revenues (73% of total revenues) increased 11% on a year-over-year basis to $511 million. International revenues (27%) surged 39% year over year to $185.2 million.
DexCom, Inc. Price, Consensus and EPS Surprise
DexCom, Inc. price-consensus-eps-surprise-chart | DexCom, Inc. Quote
Margin Analysis
Gross profit in the quarter under review totaled $449.5 million, up 7.8% year over year. DexCom generated a gross margin (as a percentage of revenues) of 64.6%, which contracted 550 basis points (bps) year over year.
Research and development expenses amounted to $121.7 million in the quarter, down 5.7% year over year. Selling, general and administrative expenses totaled $248.9 million in the reported quarter, up 33.5% year over year.
The company reported total operating expenses of $372.5 million, up 17.8% from the prior-year figure. Operating margin (as a percentage of revenues) of 11.1% contracted 590 bps year over year.
Financial Position
The company exited the second quarter with $2.75 billion in cash, cash equivalents and marketable securities, compared with $2.69 billion in the preceding quarter.
Total assets in the second quarter amounted to $5.2 billion, compared with $5.06 billion on a sequential basis.
2022 Guidance Reaffirmed
DexCom tightened its revenue guidance for 2022 from $2.82-$2.94 billion to $2.86-$2.91 billion. The Zacks Consensus Estimate for the same stands at $2.92 billion.
The company reiterated the 2022 guidance for adjusted gross margin and adjusted operating margin.
While adjusted gross margin is anticipated to be about 65%, adjusted operating margin is estimated to be around 16%.
Wrapping Up
DexCom exited second-quarter 2022 on a decent note, wherein earnings met the Zacks Consensus Estimate and revenues missed the same slightly. Impressive contributions from the Sensor segment and domestic and international revenue growth were the key catalysts.
Additionally, the glucose monitoring market presents significant commercial opportunities for the 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 continued advancements with respect to key strategic objectives, DexCom ended the quarter with new patient additions as well. The company launched its latest CGM, DexCom ONE, in the United Kingdom and Spain during the second quarter. It also received CE Mark for an updated sensor algorithm, making the latest G7 sensor technology available to international markets. These developments are likely to support the future growth of the company.
Nevertheless, contraction in both gross and operating margins is a woe. Apart from this, cut-throat competition in the market for blood & glucose monitoring devices remains a concern.
Zacks Rank and Stocks to Consider
Currently, DexCom carries a Zacks Rank #3 (Hold).
Some better-ranked stocks from the pharma/biotech sector include Lantheus (LNTH - Free Report) , ShockWave Medical (SWAV - Free Report) and Alkermes (ALKS - Free Report) . While Lantheus and ShockWave Medical sport a Zacks Rank #1 (Strong Buy), Alkermes carries a Zacks Rank of 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Estimates for Lantheus have improved from earnings of $3.04 to $3.08 for 2022 and $3.33 to $3.62 for 2023 in the past 30 days. LNTH has surged 156.6% so far this year.
Lantheus delivered an earnings surprise of 77.82%, on average, in the last four quarters.
ShockWave Medical’s earnings per share estimates have improved from $1.84 to $2.02 for 2022 and from $2.82 to $2.95 for 2023 in the past 30 days. SWAV has declined 19.1% so far this year.
ShockWave Medical delivered an earnings surprise of 189.99%, on average, in the last four quarters.
Alkermes’ earnings per share estimates have improved from breakeven to 4 cents for 2022 and from 56 cents to 59 cents for 2023 in the past 30 days. ALKS has gained 19.6% so far this year.
Alkermes delivered an earnings surprise of 350.48%, on average, in the last four quarters.