Release Date: February 13, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- DexCom Inc (DXCM, Financial) reported an 8% organic revenue growth in Q4 2024, aligning with their guidance.
- The company expanded its global customer base by 25% in 2024, reaching over 2.8 million users.
- DexCom Inc (DXCM) achieved significant coverage expansion, with two of the three largest PBMs now covering CGM for all diabetes patients.
- The launch of the over-the-counter product, Stelo, saw strong demand with over 140,000 users in the first four months.
- International revenue grew by 17% in Q4 2024, driven by new access wins and expanded product availability.
Negative Points
- US revenue growth was impacted by rebate eligibility, negatively affecting growth by several points in Q4.
- Gross profit margin decreased to 59.4% from 64.2% in Q4 2023, partly due to a $21 million noncash charge.
- Operating income decreased to 18.8% of revenue in Q4 2024 from 23.5% in the same quarter of 2023.
- The company is managing channel inventory tightly due to disruptions, expecting normalization by the end of Q1 2025.
- DexCom Inc (DXCM) faces challenges in expanding coverage for the remaining 20 million type 2 diabetes patients not on insulin in the US.
Q & A Highlights
Q: Kevin, can you provide an update on the sales force and DME issues identified earlier in the year?
A: Kevin Sayer, CEO: We've made significant progress. Our sales force has become more productive, adding 50,000 prescribers over the year. The prescriptions per healthcare professional have increased, indicating improved productivity. Our DME channel share has stabilized, and we've worked closely with partners to enhance growth opportunities.
Q: How should we think about the convergence of volume and revenue growth in the US for 2025?
A: Jereme Sylvain, CFO: We expect the gap between volume and revenue growth to narrow throughout 2025. As we lap rebate dynamics in Q1, the convergence will begin, with further alignment expected by the end of the year. The delta between volume and price will decrease, reflecting improved channel stability.
Q: Can you discuss the impact of type 2 diabetes coverage on revenue growth and profitability?
A: Jereme Sylvain, CFO: The unit economics remain similar across disease states, with no significant impact on profitability. However, type 2 users typically have lower retention and utilization rates. We expect revenue per patient to adjust accordingly, but gross and operating margins should remain stable.
Q: What is the status of the 15-day G7 sensor approval and launch?
A: Jake Leach, COO: We are nearing the end of the FDA review process and expect approval soon. The launch is planned for the second half of 2025, focusing on securing coverage and ensuring pump integration. We will present clinical data at the ATTD conference next month.
Q: How do you plan to sustain international growth, and what are the key drivers?
A: Kevin Sayer, CEO: Our focus is on expanding access in large international markets where CGM is approved. We aim to increase penetration in type 1 and type 2 intensive insulin markets and build the case for basal insulin coverage. Growth will primarily come from established markets with proven CGM technology.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
