What happened
Shares of DexCom (DXCM 0.10%) were trading up by 13.9% as of 11:55 a.m. ET Friday. The big gain came after the diabetes-care technology company announced its third-quarter results following the market close on Thursday.
DexCom reported Q3 revenue of $769.6 million, up 18% year over year. It posted earnings of $101.2 million, or $0.24 per diluted share, based on generally accepted accounting principles (GAAP). In the prior-year period, it recorded GAAP earnings of $87.3 million, or $0.21 per diluted share.
Analysts' consensus estimate for DexCom's Q3 non-GAAP earnings had been $0.24 per share. It easily beat those expectations with non-GAAP earnings of $111.9 million, or $0.28 per diluted share.
In addition, the company tweaked its full-year guidance. For 2022, DexCom now projects revenue of between $2.88 billion and $2.91 billion. It previously forecast revenue in the range of $2.86 billion to $2.91 billion. However, it now expects its non-GAAP gross profit margin to be around 64%, slightly lower than the previous outlook of 65%.
So what
DexCom's Q3 update could help convince investors that the company can navigate an uncertain macroeconomic environment better than most. There's one especially important key to DexCom's success: the new G7 continuous glucose monitoring (CGM) system. The company launched the G7 device in the United Kingdom, Ireland, Germany, Austria, and Hong Kong in the third quarter.
The only negative for DexCom in Q3 was the strong U.S. dollar. The company's small decrease in its gross profit margin guidance was primarily due to currency-exchange headwinds.
Now what
DexCom CEO Kevin Sayer said in the Q3 conference call that the G7 could receive U.S. regulatory clearance before the end of 2022. That should position the company well to continue delivering strong growth in 2023 and beyond.
