Dexcom Reports Revenue Shortfall and Adjusts Guidance for 2024
- Dexcom reported disappointing results, leading to a 40% drop in its stock price.
- The company attributed the weaker performance to changes in its salesforce.
- Investors are concerned about the future outlook given the recent guidance.
Dexcom has reported a revenue of $1 billion for the recent quarter, falling short of the $1.04 billion anticipated by LSEG. 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." Additionally, Dexcom has updated its full fiscal year guidance, now forecasting revenue between $4 billion and $4.05 billion, a decrease from the previous estimate of $4.20 billion to $4.35 billion. During the earnings call, CEO Kevin Sayer attributed the revenue challenges to a restructuring of the sales team, a lower-than-expected influx of new customers, and reduced revenue per user. He noted that some of the shortfall was linked to customers utilizing rebates for the new continuous glucose monitor (CGM), the G7. Furthermore, the company reported underperformance in the durable medical equipment (DME) channel, which has been particularly impactful. JPMorgan analyst Robbie Marcus expressed surprise at the significant drop in guidance, questioning the extent of disruption caused by the sales force restructuring. Sayer acknowledged that the company is "short a large number of new patients" compared to expectations. He also highlighted the loss of high-revenue customers in the DME sector and noted that G7 rebate eligibility was achieved three times faster than with the previous G6 model. Dexcom's finance chief, Jereme Sylvain, indicated that these factors contribute to a $300 million shortfall at the top end of the company's guidance for the year, emphasizing the need for transparency regarding the financial outlook for the remainder of the year.