DexCom(US:DXCM)2020-04-29 02:55Financial Data and Key Metrics Changes - In Q1 2020, DexCom reported revenue of $405 million, a 44% increase compared to Q1 2019, reflecting over $120 million in absolute dollar growth [9][20] - Gross profit for Q1 2020 was $258.7 million, representing a gross margin of 63.9%, up from 60.2% in Q1 2019, indicating a 370 basis point improvement [22] - Operating income was $43.3 million, or 10.7% of revenue, compared to a loss of $7.6 million in Q1 2019, showing a year-over-year improvement of nearly 1,300 basis points [25] - Net income for Q1 2020 was $41.4 million, or $0.44 per share, with a strong cash position of over $1.5 billion at the end of the quarter [26] Business Line Data and Key Metrics Changes - The U.S. business grew by 39% in Q1 2020 compared to Q1 2019, with significant growth across durable medical equipment, pharmacy, and Medicare channels [21] - The international business experienced a 63% growth on a constant currency basis, generating $112.8 million in revenue, which is an increase of over $25 million from the previous quarterly high [21] Market Data and Key Metrics Changes - The COVID-19 pandemic began to impact new patient opportunities in mid-March, but the company noted a strong performance in new patient additions prior to that [9][18] - The transition to telemedicine has been beneficial, with over 70% of historical new patient additions self-training using provided resources, indicating a shift in patient management [14][29] Company Strategy and Development Direction - DexCom is focusing on enhancing telemedicine capabilities and has seen increased interest in its CGM technology due to its connectivity features [44][45] - The company is committed to expanding its manufacturing capabilities, including plans for a third manufacturing site in Malaysia to support international market growth [36] - DexCom aims to leverage data platforms to improve patient and clinician engagement, particularly in a telehealth environment [32] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the underlying demand for CGM technology despite the uncertainties created by COVID-19, noting that the company remains bullish on its business prospects [28][45] - The company has temporarily suspended its 2020 guidance due to the unpredictable economic environment but indicated that first-quarter performance exceeded expectations [28][30] Other Important Information - DexCom has implemented a financial assistance program for patients affected by COVID-19, providing up to two 90-day supply shipments for $45 each [13] - The FDA has allowed the use of DexCom G6 in hospital settings, which could enhance demand for the product during the pandemic [16][55] Q&A Session Summary Question: Impact of COVID-19 on Q2 expectations - Management acknowledged a decline in new patient starts in April but noted a slight rebound, emphasizing the importance of telehealth in patient management [41][45] Question: Long-term expectations for patient management post-COVID - Management believes that the shift to telehealth will favor CGM adoption, as patients will be more focused on managing their diabetes effectively [48][50] Question: Hospital use of CGM and data collection - Management is gathering data from hospital use of CGM during COVID-19 to potentially accelerate broader approval for hospital use in the future [53][55] Question: G7 clinical trial delays - Management explained that the six-month delay for the G7 trial is due to logistical challenges and emphasized the importance of executing a high-quality study [58][60] Question: Patient support program and coverage mix - Management acknowledged the challenges in predicting the impact of patient transitions from commercial to Medicaid coverage due to rising unemployment [61][64]