DexCom Q3 earnings beat estimates, but stock tumbles 16% on weak growth

DexCom (NASDAQ:) reported third-quarter earnings that surpassed analyst expectations, but the company’s stock plummeted 16% as revenue growth slowed significantly.

The continuous glucose monitoring systems maker posted adjusted earnings per share of $0.45, beating the analyst consensus of $0.43. Revenue for the quarter came in at $994.2 million, slightly above the estimated $990.44 million and up 2% YoY.

Despite the earnings beat, DexCom’s revenue growth rate of 2% marked a sharp deceleration from previous quarters, likely contributing to the negative market reaction. U.S. revenue declined 2% YoY, while international revenue grew 12% on a reported basis.

“Dexcom’s third quarter results were in line with our expectations as our team responded quickly to the business dynamics that emerged earlier this year,” said Kevin Sayer, DexCom’s chairman, president and CEO.

The company maintained its full-year 2024 revenue guidance of $4.00-4.05 billion, representing 11-13% organic growth. This outlook is in line with the analyst consensus of $4.01 billion.

DexCom’s GAAP operating income fell to $152.0 million or 15.3% of revenue, a decrease of 580 basis points compared to the same quarter last year. Non-GAAP operating income was $212.0 million or 21.3% of revenue, down 320 basis points YoY.

The company announced the launch of Stelo, an over-the-counter glucose biosensor for adults with prediabetes and type 2 diabetes not on insulin therapy. DexCom also expanded its international presence with product launches in Australia and France.

Additionally, DexCom revealed that Teri Lawver, Executive Vice President and Chief Commercial Officer, will retire at the end of the year. CEO Kevin Sayer will assume leadership of the commercial organization during the search for a new chief commercial officer.