DexCom, Inc. (NASDAQ: DXCM) stock fell over 1.2% on 1st August 2019 (As of 11:24 am GMT-4; Source: Google finance) after the company posted better than expected results for the second quarter of FY 19. DXCM has reported the Non-GAAP net income of $7.8 million for the second quarter of 2019, compared to a non-GAAP net loss of $6.5 million for the same quarter of 2018. As of June 30, 2019, DXCM held $1.378 billion in cash and marketable securities and our revolving credit facility remains undrawn
DXCM in the second quarter of FY 19 has reported the adjusted earnings per share of 8 cents, beating the analysts’ estimates for the adjusted earnings per share to breakeven, according to the Zacks Consensus Estimate. The company had reported the adjusted revenue growth of 39 percent to $336.4 million in the second quarter of FY 19, beating the analysts’ estimates for revenue of $302.2 million. Volume growth in conjunction with strong new patient additions continues to be the primary driver of revenue growth as awareness of real-time CGM increases. On a geographic basis, the revenue growth continued to be strong in both the US and O-US businesses, which grew at 40% and 37% respectively on a constant currency basis in the second quarter.
The second quarter gross profit was $206.5 million or 61.4% of revenue, representing 120 basis points sequential improvement over the first quarter of 2019, while increasing our G6 capacity and was in line with the expectations. On a year-over-year basis, gross margin was negatively impacted by the ongoing investments to drive capacity expansion as well as the increasing mix in both the O-US and pharmacy channels.
Meanwhile, DXCM has made a number of investments in the quarter toward the development of G7 as the company continues to prepare for launch. The company made good progress in the quarter which triggered a small incentive charge of $3.2 million to Verily for accelerating development work.
Even as the company continues with the worldwide rollout of the G6 system, the company is beginning to invest aggressively in the product and manufacturing innovation, which will ensure rapid introduction of our G7 product when launched.
Second, the company incurred duplicative costs within the customer service organization as the company ramp the operations in Manila. The company remain willing to incur these costs through this transition and believe the company have built a world-class team in the DexCom Manila location.