Shares of Dexcom surged almost 20 percent Friday after the San Diego company posted better-than-expected financial results thanks to growing adoption of continuous glucose monitors in the U.S. and overseas.
Revenue gains in the quarter were driven by what analysts believe is a near-record number of new patients domestically g up for the company’s wearable glucose monitors. Dexcom’s glucose monitors enable people with Type 1 and insulin-taking Type 2 diabetes to track their blood sugar without finger pricks.
U.S. third-quarter sales increased 17 percent compared with the same quarter last year.
Overseas sales rose 22 percent year over year. Dexcom has yet to see any impact from any global economic slowdown, which had worried investors, said Jeff Johnson, senior research analyst with RW Baird & Co. in a research note.
“Third quarter results checked a lot of boxes,” said Johnson.
The company rang up $770 million in revenue for the quarter. Adjusted net income came in at $112 million, or 28 cents per share.
Wall Street analysts had forecast sales of $751 million and adjusted earnings of 24 cents per share.
While third-quarter results were solid, Dexcom executives highlighted the momentum from new products heading into next year.
The company is rolling out its next-generation glucose monitor— the G7. It is 60 percent smaller, with a more convenient sensor regime, improved smartphone app, and performance and accuracy gains.
The G7 has launched in the United Kingdom, Ireland, , Austria and Hong Kong. Regulators in the U.S. had questions about software in the G7 system, which delayed the launch in America. But the company answered the U.S. Food and Drug istration’s inquiry, and Dexcom believes regulators could authorize the G7 domestically by year-end.
About 1.8 million people in the U.S. have Type 1 diabetes, with about 60 percent using continuous glucose monitors, according to RW Baird. But across the globe, 38 million people have Type 1 diabetes, and only about 20 percent use wearable monitors.
There are also 30 million people in the U.S. with Type 2 diabetes, with roughly 10 percent of them taking insulin. Type 2 patients typically don’t require glucose monitors, and they are not usually reimbursed by insurance unless they’re taking insulin.
But Dexcom contends continuous glucose monitors could benefit Type 2 patients in tracking their blood sugar — which could significantly expand the market.
“We believe (the G7) is the product of the future for Dexcom,” said Chief Executive Kevin Sayer in a conference call with analysts. “We are working diligently to make that product accessible to a much broader population, not only the intensive insulin-using population but moving into people with Type 2 diabetes on basal insulin only, noninsulin-using Type 2s, gestational, hospital, metabolic health and beyond.”
Looking ahead, Dexcom raised its full-year revenue guidance to $2.895 billion, which would be an 18 percent gain over 2021.
Dexcom’s shares added $19.62 on Friday to close at $120.87 on the Nasdaq exchange.
