Dexcom Reports Second Quarter 2019 Financial Results

SAN DIEGO –

DexCom, Inc. (Nasdaq: DXCM) today reported its financial results as of and for the quarter ended June 30, 2019.

Second Quarter 2019 Highlights:

• Revenue grew 39% versus the same quarter of the prior year to $336.4 million
• U.S. revenue growth of 40% and international revenue growth of 33%
• Featured prominently at the 79th Scientific Sessions of the American Diabetes Association, including numerous academic papers utilizing Dexcom real-time CGM and multiple next-generation automated insulin delivery systems with Dexcom CGM integration

“Dexcom generated another outstanding quarter of growth as physicians and people with diabetes continue to embrace real-time CGM and the demonstrated benefits of Dexcom’s G6 system,” said Kevin Sayer, Dexcom’s Chairman, President and CEO. “In light of our strong first half performance, we are once again pleased to raise our outlook for 2019 and remain confident in Dexcom’s long-term growth opportunity.”

2019 Annual Guidance

Dexcom updated its revenue, operating margin, and adjusted EBITDA expectations and reiterated gross profit guidance for full fiscal year 2019:

• Revenue of $1.325 billion to $1.375 billion (28 - 33% growth) compared to previous expectations of $1.25 billion to $1.30 billion (21 - 26% growth)
• Gross profit margin of 64% to 65%, consistent with prior guidance
• Non-GAAP operating margin of approximately 7% versus previous expectations of 6%
• Non-GAAP adjusted EBITDA margin of approximately 18.5% versus previous expectations of 18%

Second Quarter 2019 Financial Results

Revenue: In the second quarter of 2019, worldwide revenue grew 39% to $336.4 million, up from $242.5 million in the second quarter of 2018. Volume growth in conjunction with strong new patient additions continues to be the primary driver of revenue growth as awareness of real-time CGM increases.

Gross Profit: Gross profit totaled $206.5 million or 61.4% of sales for the second quarter of 2019, compared to $153.6 million or 63.3% of sales in the second quarter of 2018.

Operating Loss/Income: GAAP operating loss for the second quarter of 2019 was $0.8 million, compared to a GAAP operating loss of $4.9 million for the second quarter of 2018.

Non-GAAP operating income* for the second quarter of 2019 was $6.2 million, compared to a non-GAAP operating loss of $2.2 million for the second quarter of 2018. The second quarter 2019 non-GAAP amount excludes $6.7 million of business transition and related costs and the second quarter 2018 non-GAAP amount excludes $2.7 million of such costs.

Net Loss/Income and Net Loss/Income per Share: GAAP net loss was $10.5 million, or $0.12 per share, for the second quarter of 2019, compared to GAAP net income of $30.2 million, or $0.34 per diluted share, for the same quarter of 2018. GAAP net income for the second quarter of 2018 included $42.7 million of income from equity investments.

Non-GAAP net income* was $7.8 million, or $0.08 per diluted share, for the second quarter of 2019, compared to a non-GAAP net loss of $6.5 million, or $0.07 per share, for the same quarter of 2018. The second quarter 2019 non-GAAP amount excludes $6.7 million of business transition and related costs and $11.3 million of non-cash interest expense related to Dexcom’s senior convertible notes. The second quarter 2018 non-GAAP amount excludes $2.7 million of business transition and related costs, $3.3 million of non-cash interest expense related to DexCom’s senior convertible notes, and $42.7 million of income from equity investments.

Cash and Liquidity: As of June 30, 2019, Dexcom held $1.378 billion in cash and marketable securities and our revolving credit facility remains undrawn. The cash balance includes the net proceeds from Dexcom’s fourth quarter 2018 convertible notes offering and 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, Inc. website at www.dexcom.com by navigating to “About Us,” then “Investor Relations,” and then “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 “47626297” 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., headquartered in San Diego, California, is developing and marketing continuous glucose monitoring systems for use by people with diabetes and by healthcare providers.

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. 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 Annual Report on Form 10-K for the period ended December 31, 2018, as filed with the Securities and Exchange Commission on February 21, 2019. 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.