Dexcom Reports Increased Net Income Amidst Revenue Guidance Cut

Dexcom has announced a net income of $143.5 million for the recent quarter, a notable increase from $115.9 million during the same period last year. However, the company has revised its revenue expectations for the third quarter, projecting between $975 million and $1 billion due to "certain unique items impacting 2024 seasonality." This adjustment comes as Dexcom updates its full fiscal year revenue guidance to a range of $4 billion to $4.05 billion, down from the previously forecasted $4.20 billion to $4.35 billion. During the earnings call, CEO Kevin Sayer attributed the revenue shortfall to several factors, including a restructuring of the sales team, fewer new customer acquisitions than anticipated, and lower revenue per user. He noted that some of the decline was linked to customers utilizing rebates for the new continuous glucose monitor (CGM), the G7. Additionally, Dexcom reported underperformance in the durable medical equipment (DME) channel, which has impacted revenue. Analysts expressed concern over the significant drop in guidance, with JPMorgan's Robbie Marcus highlighting the unexpected disruption caused by the sales force restructuring. Sayer acknowledged that the company is falling short of new patient targets and has lost high-revenue customers in the DME sector. He also mentioned that the G7's rebate eligibility process has accelerated compared to its predecessor, the G6. Finance Chief Jereme Sylvain indicated that these factors contribute to a potential $300 million shortfall in the company's revenue guidance for the year. He emphasized the importance of transparency regarding the financial outlook for the remainder of the year.