Memorandum

Dexcom reports preliminary 3Q15 revenue of $105 million (all-time record), 52% YOY growth and up 13% sequentially – October 14, 2015

Dexcom just unexpectedly reported 3Q15 “preliminary” worldwide revenue of $105 million, an all-time record and first quarter of sales exceeding $100 million. Revenue rose 52% year-over-year (YOY) and 13% sequentially (the previous all-time record came on 2Q15 revenue of $93 million). These are yet again stellar results, marking 12 straights quarters of 49%+ YOY growth for Dexcom since the launch of G4 in late 2012. Interestingly, 52% YOY growth is Dexcom’s “lowest” since 1Q13 (49%), as YOY growth over the past nine quarters has ranged from 56%-102% - due in large part to the growing base of course! The announcement notes that demand for G5 is “overwhelming,” that the new patient pipeline is the largest ever, and upgrades are expected to complete by the end of 2015. Although initially the reason for the preliminary release wasn’t altogether clear, the announcement offers a clue – that there is a bit of confusion about access: “There has been some noise in the marketplace recently suggesting that certain payers are seeking to delay payment for CGM ... we could not deliver a record quarter in terms [of] revenues without meaningful contribution from all major payers.” In other words, this preliminary release may aim to quell those concerns. The specific results are subject to change before the official report and call on November 4 at 4:30 pm ET, but the strong revenue clearly preps Dexcom to meet its ambitious full-year guidance: revenues of $350-$375 million (36%-46% YOY growth). See our Dexcom 2Q15 report here and check diaTribe early next week for our G5 test drive.

-- by Adam Brown and Kelly Close