DexCom, Inc. (Nasdaq: DXCM) today reported its financial results as of and for the quarter ended June 30, 2021.
Second Quarter 2021 Financial Highlights:
- Revenue grew 32% versus the same quarter of the prior year to $595.1 million
- U.S. revenue growth of 26% and international revenue growth of 58%
- GAAP operating income of $101.0 million or 17.0% of revenue, an increase of 200 basis points compared to the second quarter of 2020. Non-GAAP operating income* of $101.5 million or 17.1% of revenue, an increase of 10 basis points over the same quarter of the prior year
Strategic Highlights:
-
In June, reported compelling data demonstrating the efficacy of Dexcom’s current and future CGM platforms:
- The Lancet published results from the ALERTT1 randomized controlled trial demonstrating superior clinical outcomes for users of Dexcom G6 real-time CGM compared to intermittently scanned CGM.1
- The Journal of the American Medical Association (JAMA) published results from the MOBILE randomized controlled trial, demonstrating strong clinical advantages of Dexcom CGM versus the current standard of care in adults with poorly controlled Type 2 diabetes on basal insulin without prandial insulin.2
- Dexcom presented strong preliminary data for its next-generation G7 CGM System at the International Conference on Advanced Technologies & Treatments for Diabetes (ATTD) conference.
- Advanced access to Dexcom CGM for people with diabetes in several regions, including British Columbia as the first Canadian province to establish coverage for Dexcom G6 CGM systems for people with Type 1 diabetes and Type 2 diabetes on intensive insulin therapy.
- After the conclusion of the quarter, announced FDA clearance of Dexcom’s real-time API, furthering the company’s emphasis on interoperable solutions for tailored experiences with Dexcom CGM.
1 Visser et al., “Comparing real-time and intermittently scanned continuous glucose monitoring in adults with type 1 diabetes (ALERTT1): a 6-month, prospective, multicentre, randomised controlled trial,” Lancet, June 2, 2021. ( https://doi.org/10.1016/S0140-6736(21)00789-3). Study results included statistically significant differences in time in range, HbA1c, time spent in severe hypoglycemia, Hypoglycemia Fear, and severe hypoglycemia events.
2 Martens et al., “Effect of Continuous Glucose Monitoring on Glycemic Control in Patients with Type 2 Diabetes Treated with Basal Insulin: A Randomized Clinical Trial,” JAMA, June 2, 2021. (doi:10.1001/jama.2021.7444).
“Dexcom’s second quarter performance was characterized by strong financial results and the continued advancement of our key strategic initiatives,” said Kevin Sayer, Dexcom’s chairman, president and CEO. “Our underlying momentum led to the increased revenue and margin guidance that we reported today and leaves us increasingly excited as we head into the second half of 2021.”
2021 Annual Guidance
Based on the strong second quarter results, Dexcom is increasing its guidance for fiscal year 2021 revenue, Non-GAAP gross profit margin, Non-GAAP operating margin, and Adjusted EBITDA margin to the following levels:
- Revenue of approximately $2.35 - 2.40 billion (22-25% growth)
- Non-GAAP Gross Profit Margin of approximately 67%
- Non-GAAP Operating Margin of approximately 14%
- Adjusted EBITDA Margin of approximately 24%
Second Quarter 2021 Financial Results
Revenue: In the second quarter of 2021, worldwide revenue grew 32% to $595.1 million, up from $451.8 million in the second quarter of 2020. Volume growth in conjunction with strong new customer additions continues to be the primary driver of revenue growth as awareness of real-time CGM increases.
Gross Profit: GAAP gross profit totaled $417.1 million or 70.1% of revenue for the second quarter of 2021, compared to $284.1 million or 62.9% of revenue in the second quarter of 2020.
Non-GAAP gross profit* totaled $417.1 million or 70.1% of revenue for the second quarter of 2020, compared to $289.7 million or 64.1% of revenue in the second quarter of 2020. The second quarter 2020 non-GAAP amount excludes $5.6 million of incremental labor costs incurred as a result of the COVID-19 outbreak.
Operating Income: GAAP operating income for the second quarter of 2021 was $101.0 million, compared to GAAP operating income of $67.8 million for the second quarter of 2020.
Non-GAAP operating income* for the second quarter of 2021 was $101.5 million, compared to non-GAAP operating income of $76.7 million for the second quarter of 2020. The second quarter 2020 non-GAAP amount excludes $7.8 million of incremental costs incurred as a result of the COVID-19 outbreak, primarily related to payroll, consulting support, IT infrastructure and facilities costs.
Net Income and Net Income per Share: GAAP net income was $62.9 million, or $0.63 per diluted share, for the second quarter of 2021, compared to GAAP net income of $46.3 million, or $0.48 per diluted share, for the same quarter of 2020.
Non-GAAP net income* was $75.4 million, or $0.76 per diluted share, for the second quarter of 2021, compared to non-GAAP net income of $77.1 million, or $0.79 per diluted share, for the same quarter of 2020. The second quarter 2021 non-GAAP amount excludes $20.8 million of non-cash interest expense related to Dexcom’s senior convertible notes and $8.8 million of tax adjustments primarily related to excess tax benefits from stock compensation vesting.
The second quarter 2020 non-GAAP amount excludes $16.5 million of non-cash interest expense related to Dexcom’s senior convertible notes, $7.8 million of incremental costs incurred as a result of the COVID-19 outbreak, and a $5.4 million loss on extinguishment of debt.
Cash and Liquidity: As of June 30, 2021, Dexcom held $2.58 billion in cash, cash equivalents and marketable securities and our revolving credit facility remains undrawn. The cash balance represents significant financial and strategic flexibility as Dexcom continues to expand production capacity and explore new market opportunities.
* See Table E below for a reconciliation of these GAAP and non-GAAP financial measures.
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 Investor Relations website at investors.dexcom.com by navigating to “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 “49591483” approximately five minutes prior to the start time.
Statement Regarding Use of Non-GAAP Financial Measures
This press release and the accompanying tables include non-GAAP financial measures. For a description of these non-GAAP financial measures, including the reasons management uses each measure, and reconciliations of these non-GAAP financial measures to the most directly comparable financial measures prepared in accordance with Generally Accepted Accounting Principles (GAAP), please see the section of the accompanying tables titled “About Non-GAAP Financial Measures” as well as the related Table E.
About DexCom, Inc.
DexCom, Inc. empowers people to take control of diabetes through innovative continuous glucose monitoring (CGM) systems. Headquartered in San Diego, California, Dexcom has emerged as a leader of diabetes care technology. By listening to the needs of users, caregivers, and providers, Dexcom simplifies and improves diabetes management around the world.
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, including statements with respect to the impacts of the COVID-19 pandemic on Dexcom and our outlook for the full year 2021. 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 Quarterly Report on Form 10-Q for the period ended June 30, 2021, as filed with the Securities and Exchange Commission on July 29, 2021. 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.
DexCom, Inc. Table A Consolidated Balance Sheets (In millions, except par value data) |
|||||||||
|
June 30, 2021 |
|
December 31, 2020 |
||||||
Assets |
(Unaudited) |
|
|
||||||
Current assets: |
|
|
|
||||||
Cash and cash equivalents |
$ |
1,158.8 |
|
|
|
$ |
817.6 |
|
|
Short-term marketable securities |
1,426.1 |
|
|
|
1,890.1 |
|
|
||
Accounts receivable, net |
483.5 |
|
|
|
428.5 |
|
|
||
Inventory |
319.3 |
|
|
|
234.7 |
|
|
||
Prepaid and other current assets |
86.5 |
|
|
|
53.9 |
|
|
||
Total current assets |
3,474.2 |
|
|
|
3,424.8 |
|
|
||
Property and equipment, net |
676.0 |
|
|
|
515.3 |
|
|
||
Operating lease right-of-use assets |
94.8 |
|
|
|
93.3 |
|
|
||
Goodwill |
19.1 |
|
|
|
19.3 |
|
|
||
Deferred tax assets |
216.4 |
|
|
|
216.4 |
|
|
||
Other assets |
23.3 |
|
|
|
21.4 |
|
|
||
Total assets |
$ |
4,503.8 |
|
|
|
$ |
4,290.5 |
|
|
Liabilities and Stockholders’ Equity |
|
|
|
||||||
Current liabilities: |
|
|
|
||||||
Accounts payable and accrued liabilities |
$ |
482.0 |
|
|
|
$ |
481.1 |
|
|
Accrued payroll and related expenses |
98.1 |
|
|
|
114.3 |
|
|
||
Short-term operating lease liabilities |
18.8 |
|
|
|
16.5 |
|
|
||
Deferred revenue |
1.8 |
|
|
|
2.2 |
|
|
||
Total current liabilities |
600.7 |
|
|
|
614.1 |
|
|
||
Long-term senior convertible notes |
1,710.7 |
|
|
|
1,667.2 |
|
|
||
Long-term operating lease liabilities |
107.1 |
|
|
|
101.8 |
|
|
||
Other long-term liabilities |
87.7 |
|
|
|
80.9 |
|
|
||
Total liabilities |
2,506.2 |
|
|
|
2,464.0 |
|
|
||
Commitments and contingencies |
|
|
|
||||||
Stockholders’ equity: |
|
|
|
||||||
Preferred stock, $0.001 par value, 5.0 million shares authorized; no shares issued and outstanding at June 30, 2021 and December 31, 2020 |
— |
|
|
|
— |
|
|
||
Common stock, $0.001 par value, 200 million shares authorized; 97.5 million and 96.7 million shares issued and outstanding, respectively, at June 30, 2021; and 96.9 million and 96.1 million shares issued and outstanding, respectively, at December 31, 2020 |
0.1 |
|
|
|
0.1 |
|
|
||
Additional paid-in capital |
2,193.6 |
|
|
|
2,125.3 |
|
|
||
Accumulated other comprehensive income |
2.8 |
|
|
|
3.2 |
|
|
||
Accumulated deficit |
(98.9 |
) |
|
|
(202.1 |
) |
|
||
Treasury stock, at cost; 0.8 million shares at June 30, 2021 and December 31, 2020 |
(100.0 |
) |
|
|
(100.0 |
) |
|
||
Total stockholders’ equity |
1,997.6 |
|
|
|
1,826.5 |
|
|
||
Total liabilities and stockholders’ equity |
$ |
4,503.8 |
|
|
|
$ |
4,290.5 |
|
|
DexCom, Inc. Table B Consolidated Statements of Operations (In millions, except per share data) (Unaudited) |
|||||||||||||||
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
||||||||||||
|
2021 |
|
2020 |
|
2021 |
|
2020 |
||||||||
Revenues |
$ |
595.1 |
|
|
$ |
451.8 |
|
|
$ |
1,100.1 |
|
|
$ |
856.9 |
|
Cost of sales |
178.0 |
|
|
167.7 |
|
|
339.1 |
|
|
316.3 |
|
||||
Gross profit |
417.1 |
|
|
284.1 |
|
|
761.0 |
|
|
540.6 |
|
||||
Operating expenses: |
|
|
|
|
|
|
|
||||||||
Research and development |
129.1 |
|
|
79.9 |
|
|
238.5 |
|
|
153.0 |
|
||||
Selling, general and administrative |
187.0 |
|
|
136.4 |
|
|
375.6 |
|
|
286.2 |
|
||||
Total operating expenses |
316.1 |
|
|
216.3 |
|
|
614.1 |
|
|
439.2 |
|
||||
Operating income |
101.0 |
|
|
67.8 |
|
|
146.9 |
|
|
101.4 |
|
||||
Interest expense |
(25.2) |
|
|
(20.3) |
|
|
(50.0) |
|
|
(35.7) |
|
||||
Loss on extinguishment of debt |
— |
|
|
(5.4) |
|
|
— |
|
|
(5.4) |
|
||||
Interest and other income, net |
0.9 |
|
|
4.1 |
|
|
1.0 |
|
|
8.3 |
|
||||
Income before income taxes |
76.7 |
|
|
46.2 |
|
|
97.9 |
|
|
68.6 |
|
||||
Income tax expense (benefit) |
13.8 |
|
|
(0.1) |
|
|
(5.3) |
|
|
2.4 |
|
||||
Net income |
$ |
62.9 |
|
|
$ |
46.3 |
|
|
$ |
103.2 |
|
|
$ |
66.2 |
|
|
|
|
|
|
|
|
|
||||||||
Basic net income per share |
$ |
0.65 |
|
|
$ |
0.49 |
|
|
$ |
1.07 |
|
|
$ |
0.71 |
|
Shares used to compute basic net income per share |
96.7 |
|
|
93.8 |
|
|
96.5 |
|
|
92.8 |
|
||||
Diluted net income per share |
$ |
0.63 |
|
|
$ |
0.48 |
|
|
$ |
1.04 |
|
|
$ |
0.69 |
|
Shares used to compute diluted net income per share |
99.6 |
|
|
97.0 |
|
|
99.5 |
|
|
95.6 |
|
||||
DexCom, Inc. Table C Revenue by Geography (Dollars in millions) (Unaudited) |
|||||||||||||||
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
||||||||||||
|
2021 |
|
2020 |
|
2021 |
|
2020 |
||||||||
U.S. revenue |
$ |
461.5 |
|
|
$ |
367.1 |
|
|
$ |
842.7 |
|
|
$ |
659.4 |
|
Year over year growth |
26 |
% |
|
38 |
% |
|
28 |
% |
|
38 |
% |
||||
% of total revenue |
78 |
% |
|
81 |
% |
|
77 |
% |
|
77 |
% |
||||
|
|
|
|
|
|
|
|
||||||||
International revenue |
$ |
133.6 |
|
|
$ |
84.7 |
|
|
$ |
257.4 |
|
|
$ |
197.5 |
|
Year over year growth |
58 |
% |
|
21 |
% |
|
30 |
% |
|
41 |
% |
||||
% of total revenue |
22 |
% |
|
19 |
% |
|
23 |
% |
|
23 |
% |
||||
|
|
|
|
|
|
|
|
||||||||
Total revenue (1) |
$ |
595.1 |
|
|
$ |
451.8 |
|
|
$ |
1,100.1 |
|
|
$ |
856.9 |
|
Year over year growth |
32 |
% |
|
34 |
% |
|
28 |
% |
|
39 |
% |
||||
(1) The sum of the revenue components may not equal total revenue due to rounding.
DexCom, Inc. Table D Revenue by Component (Dollars in millions) (Unaudited) |
|||||||||||||||
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
||||||||||||
|
2021 |
|
2020 |
|
2021 |
|
2020 |
||||||||
Sensor and other revenue (1) (2) |
$ |
494.5 |
|
|
$ |
364.5 |
|
|
$ |
918.8 |
|
|
$ |
689.5 |
|
Year over year growth |
36 |
% |
|
40 |
% |
|
33 |
% |
|
46 |
% |
||||
% of total revenue |
83 |
% |
|
81 |
% |
|
84 |
% |
|
80 |
% |
||||
|
|
|
|
|
|
|
|
||||||||
Hardware revenue (1)(3) |
$ |
100.6 |
|
|
$ |
87.3 |
|
|
$ |
181.3 |
|
|
$ |
167.4 |
|
Year over year growth |
15 |
% |
|
15 |
% |
|
8 |
% |
|
16 |
% |
||||
% of total revenue |
17 |
% |
|
19 |
% |
|
16 |
% |
|
20 |
% |
||||
|
|
|
|
|
|
|
|
||||||||
Total revenue (4) |
$ |
595.1 |
|
|
$ |
451.8 |
|
|
$ |
1,100.1 |
|
|
$ |
856.9 |
|
Year over year growth |
32 |
% |
|
34 |
% |
|
28 |
% |
|
39 |
% |
||||
(1) Includes allocated subscription revenue.
(2) Includes services, freight, accessories, etc.
(3) Includes transmitter and receiver revenue.
(4) The sum of the revenue components may not equal total revenue due to rounding.
DexCom, Inc. Table E Itemized Reconciliation Between GAAP and Non-GAAP Financial Measures (In millions, except per share data) (Unaudited) |
|||||||||||||||
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
||||||||||||
|
2021 |
|
2020 |
|
2021 |
|
2020 |
||||||||
GAAP gross profit |
$ |
417.1 |
|
|
$ |
284.1 |
|
|
$ |
761.0 |
|
|
$ |
540.6 |
|
COVID-19 costs (1) |
— |
|
|
5.6 |
|
|
— |
|
|
7.8 |
|
||||
Non-GAAP gross profit |
$ |
417.1 |
|
|
$ |
289.7 |
|
|
$ |
761.0 |
|
|
$ |
548.4 |
|
|
|
|
|
|
|
|
|
||||||||
GAAP operating income |
$ |
101.0 |
|
|
$ |
67.8 |
|
|
$ |
146.9 |
|
|
$ |
101.4 |
|
Amortization of acquired intangible assets |
0.5 |
|
|
0.6 |
|
|
1.0 |
|
|
1.2 |
|
||||
Business transition and related costs (2) |
— |
|
|
0.5 |
|
|
— |
|
|
0.3 |
|
||||
COVID-19 costs (1) |
— |
|
|
7.8 |
|
|
— |
|
|
11.0 |
|
||||
Litigation settlement costs (3) |
— |
|
|
— |
|
|
— |
|
|
6.1 |
|
||||
Non-GAAP operating income |
$ |
101.5 |
|
|
$ |
76.7 |
|
|
$ |
147.9 |
|
|
$ |
120.0 |
|
|
|
|
|
|
|
|
|
||||||||
GAAP net income |
$ |
62.9 |
|
|
$ |
46.3 |
|
|
$ |
103.2 |
|
|
$ |
66.2 |
|
Business transition and related costs (2) |
— |
|
|
0.5 |
|
|
— |
|
|
0.3 |
|
||||
COVID-19 costs (1) |
— |
|
|
7.8 |
|
|
— |
|
|
11.0 |
|
||||
Depreciation and amortization |
23.5 |
|
|
15.3 |
|
|
44.4 |
|
|
28.3 |
|
||||
Litigation settlement costs (3) |
— |
|
|
— |
|
|
— |
|
|
6.1 |
|
||||
Loss on extinguishment of debt (5) |
— |
|
|
5.4 |
|
|
— |
|
|
5.4 |
|
||||
Share-based compensation |
31.6 |
|
|
30.7 |
|
|
59.6 |
|
|
54.6 |
|
||||
Interest expense and interest income |
24.8 |
|
|
16.7 |
|
|
49.1 |
|
|
26.1 |
|
||||
Income tax (benefit) expense |
13.8 |
|
|
(0.1) |
|
|
(5.3) |
|
|
2.4 |
|
||||
Adjusted EBITDA |
$ |
156.6 |
|
|
$ |
122.6 |
|
|
$ |
251.0 |
|
|
$ |
200.4 |
|
|
|
|
|
|
|
|
|
||||||||
GAAP net income |
$ |
62.9 |
|
|
$ |
46.3 |
|
|
$ |
103.2 |
|
|
$ |
66.2 |
|
Amortization of acquired intangible assets |
0.5 |
|
|
0.6 |
|
|
1.0 |
|
|
1.2 |
|
||||
Business transition and related costs (2) |
— |
|
|
0.5 |
|
|
— |
|
|
0.3 |
|
||||
COVID-19 costs (1) |
— |
|
|
7.8 |
|
|
— |
|
|
11.0 |
|
||||
Litigation settlement costs (3) |
— |
|
|
— |
|
|
— |
|
|
6.1 |
|
||||
Non-cash interest expense (4) |
20.8 |
|
|
16.5 |
|
|
41.3 |
|
|
28.3 |
|
||||
Loss on extinguishment of debt (5) |
— |
|
|
5.4 |
|
|
— |
|
|
5.4 |
|
||||
Adjustments related to taxes (6) |
(8.8) |
|
|
— |
|
|
(37.3) |
|
|
— |
|
||||
Non-GAAP net income |
$ |
75.4 |
|
|
$ |
77.1 |
|
|
$ |
108.2 |
|
|
$ |
118.5 |
|
|
|
|
|
|
|
|
|
||||||||
GAAP diluted net income per share |
$ |
0.63 |
|
|
$ |
0.48 |
|
|
$ |
1.04 |
|
|
$ |
0.69 |
|
Amortization of acquired intangible assets |
0.01 |
|
|
0.01 |
|
|
0.01 |
|
|
0.01 |
|
||||
Business transition and related costs (2) |
— |
|
|
0.01 |
|
|
— |
|
|
— |
|
||||
COVID-19 costs (1) |
— |
|
|
0.08 |
|
|
— |
|
|
0.12 |
|
||||
Litigation settlement costs (3) |
— |
|
|
— |
|
|
— |
|
|
0.06 |
|
||||
Non-cash interest expense (4) |
0.21 |
|
|
0.17 |
|
|
0.42 |
|
|
0.30 |
|
||||
Loss on extinguishment of debt (5) |
— |
|
|
0.06 |
|
|
— |
|
|
0.06 |
|
||||
Adjustments related to taxes (6) |
(0.09) |
|
|
— |
|
|
(0.37) |
|
|
— |
|
||||
Non-GAAP net income per share (7) |
$ |
0.76 |
|
|
$ |
0.79 |
|
|
$ |
1.09 |
|
|
$ |
1.24 |
|
|
|
|
|
|
|
|
|
||||||||
GAAP diluted weighted-average shares outstanding |
99.6 |
|
|
97.0 |
|
|
99.5 |
|
|
95.6 |
|
||||
Non-GAAP diluted weighted-average shares outstanding |
99.6 |
|
|
97.0 |
|
|
99.5 |
|
|
95.6 |
|
||||
(1) Represents costs associated with the COVID-19 outbreak related to taking the necessary precautions for essential personnel to operate safely both in person as well as remotely.
(2) Business transition and related costs are primarily related to the Restructuring Plan that Dexcom announced on February 21, 2019.
(3) Represents costs associated with a settlement of litigation and proceedings related to a patent infringement lawsuit.
(4) Non-cash interest expense represents accretion of the debt discount associated with our senior convertible notes.
(5)Loss on extinguishment of debt is related to the repurchase and conversions of our Senior Convertible Notes due 2022.
(6) For the three and six months ended June 30, 2021, tax adjustments were primarily related to the excess tax benefits from stock compensation vesting. For the three and six months ended June 30, 2020, there were no tax adjustments due to the valuation allowance against deferred tax assets.
(7) The sum of the non-GAAP net income per share components may not equal the totals due to rounding.
ABOUT NON-GAAP FINANCIAL MEASURES
The accompanying press release dated July 29, 2021 contains non-GAAP financial measures. These non-GAAP financial measures include non-GAAP gross profit, non-GAAP operating income (loss), non-GAAP net income (loss), and non-GAAP net income (loss) per share as well as adjusted EBITDA.
We use these non-GAAP financial measures for financial and operational decision making and as a means to evaluate period-to-period comparisons. We believe that they provide useful information about operating results, enhance the overall understanding of our operating performance and future prospects, and allow for greater transparency with respect to key metrics used by senior management in our financial and operational decision making. Our non-GAAP financial measures exclude amounts that we do not consider part of ongoing operating results when planning and forecasting and when assessing the performance of the organization and our senior management. We compute non-GAAP financial measures using the same consistent method from quarter to quarter and year to year. We may consider whether other significant items that arise in the future should be excluded from our non-GAAP financial measures.
We report non-GAAP financial measures in addition to, and not as a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP. These non-GAAP financial measures are not based on any comprehensive set of accounting rules or principles, differ from GAAP measures with the same names, and may differ from non-GAAP financial measures with the same or similar names that are used by other companies. We believe that non-GAAP financial measures should only be used to evaluate our results of operations in conjunction with the corresponding GAAP financial measures. We encourage investors to carefully consider our results under GAAP, as well as our supplemental non-GAAP information and the reconciliations between these presentations, to more fully understand our business.
Table E reconciles the non-GAAP financial measures in the press release to the most directly comparable financial measures prepared in accordance with Generally Accepted Accounting Principles (GAAP).
We exclude the following items from non-GAAP financial measures for non-GAAP gross profit, non-GAAP operating income (loss), non-GAAP net income (loss), and non-GAAP net income (loss) per share:
- Amortization of acquired intangible assets
- Collaborative research and development fees for milestone and incentive payments under our collaborative research and development arrangements paid by issuing shares of our common stock
- Business transition and related costs associated with acquisition, integration and business transition activities, including severance, relocation, consulting, leasehold exit costs, third party merger and acquisition costs, and other costs directly associated with such activities.
- COVID-19 costs associated with the COVID-19 outbreak related to taking the necessary precautions for essential personnel to operate safely both in person as well as remotely. Costs incurred include items like incremental payroll costs, consulting support, IT infrastructure and facilities related costs
- Litigation settlement costs
- Non-cash interest expense on senior convertible notes for the accretion of the debt discount associated with our senior convertible notes
- Loss on extinguishment of debt associated with repurchases and/or conversions of our senior convertible notes
- Adjustments related to taxes for the excluded items above, as well as excess benefits or tax deficiencies from stock-based compensation, the one-time impact from release of valuation allowance in 2020, and the quarterly impact of other discrete items
Adjusted EBITDA excludes non-cash operating charges for share-based compensation, depreciation and amortization as well as non-operating items such as interest income, interest expense, loss on extinguishment of debt, income and loss from equity investments, and income tax expense or benefit. For the reasons explained above, adjusted EBITDA also excludes non-cash collaborative research and development fees, business transition and related costs, COVID-19 costs, and litigation settlement costs.
View source version on businesswire.com: https://www.businesswire.com/news/home/20210729005240/en/
“Dexcom’s second quarter performance was characterized by strong financial results and the continued advancement of our key strategic initiatives.” - Kevin Sayer, Dexcom’s chairman, president and CEO.
Contacts
INVESTOR RELATIONS CONTACT:
Sean Christensen
Senior Director - Investor Relations and Corporate FP&A
investor-relations@dexcom.com
(858) 200-0200
MEDIA CONTACT:
James McIntosh
(619) 884-2118
