- Continuous glucose monitoring (CGM) giant Dexcom recently reported Q4 2018 earnings, stating it broke USD1bn in annual revenue in 2018 while increasing adoption rates, and announcing outsourcing plans.
- Q418 revenue of $338m was in line with the Jan. 7th preliminary announcement (“sales to exceed $331m,” BCM est. $288m).
- Management reiterated sales guidance of 15-20% growth ($1.19-$1.24bn), and set a GM target of 65% with Adj. Op margin of 5.5%, and Adj. EBITDA of 18%.
Analysis and Comments
- A newly announced restructuring initiative is incremental to forecasts and represents upside to future margin expansion prospects. This should help Dexcom drive leverage as it strives for the 2023 15% operating margin target set at the Dec. 2018 analyst day.
- This is one of the leading companies in sectors linked to the diabetes value chain that are likely to benefit.