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DexCom, Inc. (DXCM - Free Report) reported second-quarter 2023 adjusted earnings per share (EPS) of 34 cents, which beat the Zacks Consensus Estimate of 22 cents by 54.5%. The company reported earnings of 17 cents per share in the prior-year quarter.
DXCM registered GAAP net income per share of 28 cents, up from the year-ago quarter’s figure of 12 cents.
Shares of DexCom were up 2.8% in after-hours trading on Jul 27, following better-than-expected quarterly results. The stock gained 61.3% year to date compared with the industry’s growth of 15.5%. The broader S&P 500 Index has moved up 20.2% in the same period.
Image Source: Zacks Investment Research
Revenue Details
Total revenues grew 25% (26% on an organic basis) to $871.3 million on a year-over-year basis and beat the Zacks Consensus Estimate by 4.1%. Strong revenue growth was driven by rising volumes on the back of increasing global awareness of the benefits of real-time Continuous Glucose Monitoring and strong customer additions.
Segmental Details
Sensor and other revenues(89% of total revenues) increased 30% on a year-over-year basis to $778 million. Hardware revenues (11%) decreased 5% year over year to $93.3 million.
Geographical Details
U.S. revenues (71% of total revenues) increased 21% on a year-over-year basis to $616.6 million. International revenues (29%) improved 38% (40% on an organic basis) year over year to $254.7 million.
Margin Analysis
Gross profit totaled $546.4 million, up 21.6% from the prior-year quarter’s level. DexCom reported gross margin (as a percentage of revenues) of 62.7%, which contracted approximately 180 basis points year over year.
Research and development expenses amounted to $119.3 million, down 2% year over year. Selling, general and administrative expenses totaled $297.3 million, up 19.4% year over year.
The company reported total operating expenses of $418.3 million, up 12.3% from the prior-year period’s number. Operating margin (as a percentage of revenues) was 14.7%, expanding 360 bps year over year.
Financial Position
DXCM exited the second quarter with $3.64 billion in cash, cash equivalents and marketable securities compared with $2.57 billion in the preceding quarter.
Total assets amounted to $6.82 billion compared with $5.52 billion on a sequential basis.
2023 Guidance
DexCom raised its revenue guidance for 2023 but reiterated the earnings outlook. The company now expects revenues in the range of $3.5-$3.55 billion, implying 17-21% year-over-year growth. The Zacks Consensus Estimate for the same is pegged at $3.46 billion. Previously, DXCM expected revenues in the range of $3.4-$3.515 billion.
The company continues to expect adjusted gross margin of approximately 63% versus 62-63% previously. Adjusted operating margin is anticipated to be approximately 17%, up from the previous projection of 16.5%.
Wrapping Up
DexCom exited second-quarter 2023 on a strong note, wherein both earnings and revenues beat estimates. Impressive contributions from the Sensor segment, and domestic and international revenue growth were the key catalysts. Moreover, expansion of coverage for CGM systems during the quarter supported growth that is likely to continue for the rest of 2023. The availability of new sensors like G6 & G7 in new international markets is also boosting revenue growth.
Additionally, the glucose monitoring market presents significant commercial opportunities for the company. DexCom’s prospects in alternative markets such as non-intensive diabetes management, hospital, gestational, pre-diabetes and obesity are likely to provide it with a competitive edge in the MedTech space.
Apart from making continued advancements in terms of its key strategic objectives, the company continued to have strong new patient additions in the quarter.
The expansion of gross and operating margins buoys optimism. However, cut-throat competition in the market for blood & glucose monitoring devices remains another concern.
Some other top-ranked stocks in the broader medical space that have announced quarterly results are Abbott Laboratories (ABT - Free Report) , Elevance Health, Inc. (ELV - Free Report) and Intuitive Surgical, Inc. (ISRG - Free Report) .
Revenues of $9.98 billion outpaced the consensus mark by 2.9%.
Abbott has a long-term estimated growth rate of 5.1%. ABT’s earnings surpassed estimates in each of the trailing four quarters, delivering an average surprise of 12.4%.
Elevance Health reported second-quarter 2023 adjusted EPS of $9.04, which beat the Zacks Consensus Estimate by 2.5%. Revenues of $43.38 billion surpassed the Zacks Consensus Estimate by 4.5%. The company currently carries a Zacks Rank #2.
ELV has a long-term estimated growth rate of 12.1%. Its earnings surpassed estimates in each of the trailing four quarters, delivering an average surprise of 2.8%.
Intuitive Surgical reported second-quarter 2023 adjusted EPS of $1.42, which beat the Zacks Consensus Estimate by 7.6%. Revenues of $1.76 billion surpassed the consensus mark by 1.4%. The company currently carries a Zacks Rank #2.
ISRG has a long-term estimated growth rate of 14.5%. Its earnings surpassed estimates in three of the trailing four quarters and missed once, delivering an average surprise of 4.2%.
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DexCom (DXCM) Q2 Earnings Beat Estimates, Volumes Remain Strong
DexCom, Inc. (DXCM - Free Report) reported second-quarter 2023 adjusted earnings per share (EPS) of 34 cents, which beat the Zacks Consensus Estimate of 22 cents by 54.5%. The company reported earnings of 17 cents per share in the prior-year quarter.
DXCM registered GAAP net income per share of 28 cents, up from the year-ago quarter’s figure of 12 cents.
Shares of DexCom were up 2.8% in after-hours trading on Jul 27, following better-than-expected quarterly results. The stock gained 61.3% year to date compared with the industry’s growth of 15.5%. The broader S&P 500 Index has moved up 20.2% in the same period.
Image Source: Zacks Investment Research
Revenue Details
Total revenues grew 25% (26% on an organic basis) to $871.3 million on a year-over-year basis and beat the Zacks Consensus Estimate by 4.1%. Strong revenue growth was driven by rising volumes on the back of increasing global awareness of the benefits of real-time Continuous Glucose Monitoring and strong customer additions.
Segmental Details
Sensor and other revenues(89% of total revenues) increased 30% on a year-over-year basis to $778 million. Hardware revenues (11%) decreased 5% year over year to $93.3 million.
Geographical Details
U.S. revenues (71% of total revenues) increased 21% on a year-over-year basis to $616.6 million. International revenues (29%) improved 38% (40% on an organic basis) year over year to $254.7 million.
Margin Analysis
Gross profit totaled $546.4 million, up 21.6% from the prior-year quarter’s level. DexCom reported gross margin (as a percentage of revenues) of 62.7%, which contracted approximately 180 basis points year over year.
Research and development expenses amounted to $119.3 million, down 2% year over year. Selling, general and administrative expenses totaled $297.3 million, up 19.4% year over year.
The company reported total operating expenses of $418.3 million, up 12.3% from the prior-year period’s number. Operating margin (as a percentage of revenues) was 14.7%, expanding 360 bps year over year.
Financial Position
DXCM exited the second quarter with $3.64 billion in cash, cash equivalents and marketable securities compared with $2.57 billion in the preceding quarter.
Total assets amounted to $6.82 billion compared with $5.52 billion on a sequential basis.
2023 Guidance
DexCom raised its revenue guidance for 2023 but reiterated the earnings outlook. The company now expects revenues in the range of $3.5-$3.55 billion, implying 17-21% year-over-year growth. The Zacks Consensus Estimate for the same is pegged at $3.46 billion. Previously, DXCM expected revenues in the range of $3.4-$3.515 billion.
The company continues to expect adjusted gross margin of approximately 63% versus 62-63% previously. Adjusted operating margin is anticipated to be approximately 17%, up from the previous projection of 16.5%.
Wrapping Up
DexCom exited second-quarter 2023 on a strong note, wherein both earnings and revenues beat estimates. Impressive contributions from the Sensor segment, and domestic and international revenue growth were the key catalysts. Moreover, expansion of coverage for CGM systems during the quarter supported growth that is likely to continue for the rest of 2023. The availability of new sensors like G6 & G7 in new international markets is also boosting revenue growth.
Additionally, the glucose monitoring market presents significant commercial opportunities for the company. DexCom’s prospects in alternative markets such as non-intensive diabetes management, hospital, gestational, pre-diabetes and obesity are likely to provide it with a competitive edge in the MedTech space.
Apart from making continued advancements in terms of its key strategic objectives, the company continued to have strong new patient additions in the quarter.
The expansion of gross and operating margins buoys optimism. However, cut-throat competition in the market for blood & glucose monitoring devices remains another concern.
DexCom, Inc. Price, Consensus and EPS Surprise
DexCom, Inc. price-consensus-eps-surprise-chart | DexCom, Inc. Quote
Zacks Rank and Other Stocks to Consider
Currently, DexCom carries a Zacks Rank #2 (Buy).
Some other top-ranked stocks in the broader medical space that have announced quarterly results are Abbott Laboratories (ABT - Free Report) , Elevance Health, Inc. (ELV - Free Report) and Intuitive Surgical, Inc. (ISRG - Free Report) .
Abbott, carrying a Zacks Rank of 2 at present, reported second-quarter 2023 adjusted earnings per share (EPS) of $1.08, which beat the Zacks Consensus Estimate by 3.8%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Revenues of $9.98 billion outpaced the consensus mark by 2.9%.
Abbott has a long-term estimated growth rate of 5.1%. ABT’s earnings surpassed estimates in each of the trailing four quarters, delivering an average surprise of 12.4%.
Elevance Health reported second-quarter 2023 adjusted EPS of $9.04, which beat the Zacks Consensus Estimate by 2.5%. Revenues of $43.38 billion surpassed the Zacks Consensus Estimate by 4.5%. The company currently carries a Zacks Rank #2.
ELV has a long-term estimated growth rate of 12.1%. Its earnings surpassed estimates in each of the trailing four quarters, delivering an average surprise of 2.8%.
Intuitive Surgical reported second-quarter 2023 adjusted EPS of $1.42, which beat the Zacks Consensus Estimate by 7.6%. Revenues of $1.76 billion surpassed the consensus mark by 1.4%. The company currently carries a Zacks Rank #2.
ISRG has a long-term estimated growth rate of 14.5%. Its earnings surpassed estimates in three of the trailing four quarters and missed once, delivering an average surprise of 4.2%.