Dexcom (Nasdaq:DXCM) today announced that it’s raising its 2023 financial guidance following strong first-quarter financial results.
Shares of DXCM dipped 3.7% to $119 apiece after the market closed. MassDevice’s MedTech 100 Index — which includes stocks of the world’s largest medical device companies — finished the day up 0.2%.
The San Diego-based continuous glucose monitor technology developer posted profits of $48.6 million. That equals 12¢ per share on sales of $741.5 million for the three months ended March 31, 2023.
Dexcom reported a 50% bottom-line slide on sales growth of 17.9%. The company attributed sales growth to strong new customer additions. Dexcom noted this continues to drive revenue growth as awareness of real-time CGM increases.
Highlights in the quarter included the U.S. launch of the next-generation Dexcom G7 CGM, initiated with a Super Bowl commercial. The company also finalized coverage for G7 with the Centers for Medicare and Medicaid Services (CMS) in February. Earlier this month, the company got a boost from new CMS changes that expand access to its CGMs.
Adjusted to exclude one-time items, earnings per share totaled 17¢. That landed 2¢ ahead of projections on Wall Street. Sales topped expectations, too, as analysts forecast $720.7 million in revenue.
“Dexcom is off to a great start in 2023, executing on several key initiatives including the launch of Dexcom G7 in the United States,” said Kevin Sayer, Dexcom chair, president and CEO. “Given the strength of our first quarter results and an expanding market opportunity with new CGM coverage now available, we are pleased to raise our 2023 revenue guidance.”
Dexcom projects revenues to land between $3.4 billion and $3.515 billion for the full year. That represents 17% to 21% growth year over year. It also marks an increase from the previous guidance for between $3.35 billion and $3.49 billion.
The analysts’ view
BTIG analysts Marie Thibault and Sam Eiber called it a “strong quarter” for Dexcom. They also highlighted upbeat commentary on the early U.S. G7 launch, the interest in basal-only CGM and adoption via Dexcom ONE.
The analysts said a particularly encouraging note came on Dexcom’s earnings call. The company said doctors new to the company are already prescribing G7. Additionally, the company secured payor coverage “quickly” and all major pharmacy benefit managers should cover G7 by the end of the second quarter.
Finally, the analysts noted a potential upcoming development in establishing basal-only coverage. They maintained their “Buy” rating for Dexcom.
“We continue to think [Dexcom’s] outlook for revenue contribution from basal-only is conservative and management acknowledged there is pent-up demand from these patients,” the analysts wrote. “The company is talking with U.S. private payors about establishing basal-only coverage and our own opinion is that wins may start occurring later this year.
“We think the increase in 2023 revenue guidance is conservative, a prudent approach early in the year.”