DexCom Inc. (NASDAQ:DXCM)

The financial data reveals several notable trends and shifts over the five-year period examined.

Goodwill

Goodwill values remained relatively stable from 2018 to 2020, fluctuating marginally between $18.6 million and $19.3 million. A significant increase occurred in 2021, when goodwill rose sharply to $26.5 million, followed by a slight decrease to $25.7 million in 2022.

Intangible Assets

There is a marked introduction and substantial increase in intangible assets starting in 2022. Prior to that year, no values were reported for intangible assets. In 2022, the gross carrying amount of intangibles escalated dramatically to $195.5 million from zero in preceding years, accompanied by the recognition of a substantial intangible asset specifically labeled as "Verily intangible asset" valued at $152.4 million.

Specific Intangible Asset Categories

Several subcategories of intangible assets appear distinctly in 2022, including customer relationships ($24.1 million), acquired technology and intellectual property ($14.6 million), trademarks and trade name ($4.2 million), and other intangibles ($0.2 million). These components collectively contribute significantly to the total intangible asset base.

Accumulated Amortization

Accumulated amortization was recorded for the first time in 2021 at approximately $11.3 million, increasing almost twofold to $22.2 million in 2022. This reflects the increasing recognition of amortization expenses associated with the intangible assets acquired or recorded during this period.

Net Carrying Amounts

The net carrying amount of intangibles rose from zero before 2021 to $31.5 million in 2021 and then jumped significantly to $173.3 million in 2022 after accounting for accumulated amortization.

Goodwill and Intangibles Combined

The combined total of goodwill and intangibles saw a substantial rise from approximately $19 million in 2020 to $58 million in 2021, followed by a dramatic increase to $199 million in 2022. This growth is primarily driven by the acquisition or recognition of significant intangible assets in the latest reporting period.

Overall, the data indicates a strategic expansion or acquisition event around 2021–2022 that led to a significant increase in intangible assets, notably the Verily intangible asset, substantially boosting the company's intangible asset base and total goodwill and intangibles. This transition is also accompanied by the onset and increase of accumulated amortization, reflecting the increasing amortization expense recognized on these assets. Goodwill remained relatively consistent before experiencing growth concurrent with the rise in intangibles, suggesting a significant transaction influencing the company’s asset composition during the final two years reported.

Total Assets

The reported total assets exhibited a consistent upward trend over the five-year period, increasing from approximately $1.92 billion at the end of 2018 to about $5.39 billion by the end of 2022. This represents nearly a 181% increase. The adjusted total assets, which exclude goodwill, closely mirror this trend, rising from roughly $1.90 billion to $5.37 billion in the same period. The marginal difference between the reported and adjusted values suggests that goodwill constitutes a relatively small portion of total assets throughout these years.

Stockholders’ Equity

Reported stockholders’ equity also demonstrated significant growth from $663.3 million in 2018 to $2.13 billion by the end of 2022, reflecting more than a threefold increase. Adjusted stockholders’ equity values followed a similar pattern, moving from approximately $644.6 million to $2.11 billion over the same timeframe. This parallel movement reinforces the conclusion that goodwill adjustments had limited impact on equity figures.

Overall Trends and Insights

The steady and substantial increases in both total assets and stockholders’ equity indicate considerable expansion in the company’s asset base and net worth during these years. The close alignment between reported and goodwill-adjusted figures suggests limited reliance on intangible assets, particularly goodwill, to drive balance sheet growth. This could imply that asset growth is predominantly supported by tangible or measurable assets. The equity growth pace, although substantial, slightly tapers off towards 2022 compared to the previous years, which may warrant further review to understand underlying causes such as profitability, dividend policies, or capital restructuring.

Total Asset Turnover

The reported total asset turnover ratio shows an initial increase from 0.54 in 2018 to 0.62 in 2019, followed by a notable decline to 0.45 in 2020. Subsequently, it rises moderately to 0.50 in 2021 and further to 0.54 in 2022, returning to the 2018 level. The adjusted total asset turnover follows a nearly identical pattern, with very slight differences in 2021 (0.51 adjusted versus 0.50 reported), indicating that goodwill adjustments have minimal impact on the asset turnover metric.

Financial Leverage

The reported financial leverage decreased steadily from 2.89 in 2018 to 2.16 in 2021, indicating a gradual reduction in the reliance on debt or liabilities relative to equity. However, in 2022, there is a reversal as the ratio climbs back up to 2.53. The adjusted financial leverage follows the same pattern but consistently remains marginally higher than the reported figures throughout the period, suggesting that goodwill adjustments slightly increase the leverage assessment.

Return on Equity (ROE)

The reported ROE demonstrates significant volatility over the five-year period. It starts with a negative return of -19.16% in 2018, indicating a loss to shareholders. This sharply improves to a positive 11.45% in 2019 and further increases to a peak of 27.02% in 2020, before collapsing again to 6.87% in 2021. In 2022, the ROE recovers to 16.01%. The adjusted ROE values closely mirror the reported figures, with minor increases in magnitude, reflecting the minor effect of goodwill adjustment on equity profitability calculations.

Return on Assets (ROA)

The reported ROA parallels the ROE trend but with lower values, starting from -6.63% in 2018, rising to 4.22% in 2019, peaking at 11.5% in 2020, then dropping to 3.18% in 2021, and recovering somewhat to 6.33% in 2022. The adjusted ROA is consistently slightly below the reported ROA but follows the same trajectory. This pattern indicates fluctuating operational efficiency over the period, with the most favorable performance in 2020 and weaker returns in 2018 and 2021.

Overall Observations

The data reveals a cycle of performance marked by improvement between 2018 and 2020, with peaks in profitability and asset utilization, followed by setbacks in 2021 and partial recovery in 2022. Financial leverage declined steadily for the initial four years, potentially reflecting deleveraging efforts, before increasing in the latest period. Adjustments for goodwill have a minimal effect across all metrics, suggesting goodwill does not significantly distort the financial ratios analyzed. The fluctuations in ROE and ROA suggest variability in both profitability and efficiency, which may warrant further examination of underlying operational factors or market conditions.

Total Assets

There is a consistent upward trend in both reported and adjusted total assets from 2018 to 2022. Reported total assets increased from approximately 1.92 billion US dollars in 2018 to about 5.39 billion US dollars in 2022, reflecting significant asset growth over the five-year period. Adjusted total assets, which presumably exclude goodwill, follow a similar pattern, rising from roughly 1.90 billion US dollars in 2018 to 5.37 billion US dollars in 2022. The slight difference between reported and adjusted totals suggests the presence of goodwill, but its impact on the asset base does not drastically alter the overall growth trend.

Total Asset Turnover

The reported total asset turnover ratio shows some fluctuation during the period. It started at 0.54 in 2018, increased to 0.62 in 2019, but then declined sharply in 2020 to 0.45. Afterward, the ratio exhibited a modest recovery, rising to 0.50 in 2021 and further to 0.54 in 2022. The adjusted total asset turnover ratio mirrors this pattern closely, with nearly identical values each year, indicating that goodwill adjustments do not materially affect asset utilization efficiency. Overall, the trend suggests initial improvement in asset utilization until 2019, a decline in 2020, possibly due to external factors impacting operational efficiency, followed by gradual recovery in subsequent years.

Summary of Insights

The data highlight robust growth in asset base over the period analyzed, with total assets nearly tripling, which may be indicative of investments, acquisitions, or organic expansion. Despite this asset growth, the efficiency in generating revenue from these assets, as measured by total asset turnover, experienced volatility. The peak in 2019 suggests strong operational performance, while the drop in 2020 could reflect challenges encountered during that year. The recovery in 2021 and 2022 points to a restoration of asset productivity, returning to levels comparable to those seen in 2018. The minimal difference between reported and adjusted figures indicates that goodwill does not have a significant distorting effect on the company's overall asset efficiency metrics.

The financial data reveals several notable trends over the five-year period ending in 2022. Total assets, both reported and goodwill adjusted, displayed a consistent upward trajectory. Reported total assets increased from approximately $1.916 billion in 2018 to $5.392 billion in 2022, while adjusted total assets followed a similar path, rising from around $1.897 billion to $5.366 billion in the same period. This growth suggests a significant expansion in the company's asset base.

Stockholders’ equity also exhibited substantial growth during the period, although with some fluctuations toward the end. Reported equity rose from $663.3 million in 2018 to a peak of $2.252 billion in 2021 before declining slightly to $2.132 billion in 2022. Adjusted stockholders’ equity mirrored this pattern, increasing from $644.6 million in 2018 to $2.225 billion in 2021 and then decreasing to $2.106 billion in 2022. These changes indicate that while the company expanded its equity base sharply, there was a modest reduction in equity in the most recent year analyzed.

Financial leverage ratios, both reported and adjusted, showed a steady decline from 2018 through 2021, indicating a reduction in the relative amount of debt financing compared to equity. Reported financial leverage declined from 2.89 in 2018 to 2.16 in 2021. However, in 2022, leverage increased to 2.53, suggesting a reversal in the declining trend and an increased reliance on debt financing relative to equity. Adjusted financial leverage followed the same pattern, moving from 2.94 in 2018 down to 2.17 in 2021 before rising to 2.55 in 2022.

Total Assets

Steady and significant growth each year, with reported and adjusted figures closely aligned.

Stockholders' Equity

Marked increase until 2021, followed by a slight decline in 2022, similarly reflected in both reported and adjusted data.

Financial Leverage

Decreasing trend through 2021, pointing to reduced financial risk, but an uptick in 2022 suggests greater debt reliance.

Overall, the data illustrates a company that has expanded its asset and equity bases substantially over the period, improving its capital structure by decreasing financial leverage until 2021. The increase in leverage in 2022 warrants further scrutiny to understand the factors driving increased debt usage and its potential impact on financial stability.

The reported and adjusted stockholders' equity values demonstrate a consistent upward trend from 2018 through 2021, with the reported figure increasing from approximately $663.3 million to $2.2515 billion, and the adjusted figure following a similar pattern from around $644.6 million to $2.225 billion. This growth reflects a significant enhancement in the company's equity base over the four-year span. However, in 2022, both reported and adjusted stockholders' equity experienced a slight decline, with reported equity decreasing to approximately $2.132 billion and adjusted equity to about $2.106 billion. This marks a reversal in the prior growth trend and potentially indicates challenges or changes affecting equity during that period.

Return on equity (ROE) metrics, both reported and adjusted, show notable volatility over the analyzed years. The initial ROE in 2018 was negative, around -19.16% reported and -19.72% adjusted, suggesting that the company incurred losses relative to shareholder equity during that year. Subsequently, there was a marked improvement in 2019, with ROE turning positive to approximately 11.45% reported and 11.7% adjusted, indicating a substantial recovery and profitability enhancement.

The highest ROE values were observed in 2020, reaching roughly 27% for both reported and adjusted figures, signifying the most efficient use of equity in generating profits in the period reviewed. Following this peak, ROE declined sharply in 2021 to near 7%, indicating a reduction in profitability relative to equity. In 2022, ROE improved again to approximately 16%, showing a rebound though not reaching the prior peak levels of 2020.

Comparing the reported and adjusted data, the values are very close across all years, with adjusted figures marginally lower or higher depending on the metric, indicating that goodwill adjustments had a relatively minor effect on the overall equity and profitability measurements. The consistent proximity of these figures suggests stability in the accounting treatments and limited impact of goodwill on equity valuation and performance ratios during the timeframe.

Stockholders’ Equity Trends

Strong growth through 2021 followed by a slight decrease in 2022.

Return on Equity Patterns

Initial negative performance in 2018, considerable improvement in 2019, peak profitability in 2020, decline in 2021, and partial recovery in 2022.

Effect of Goodwill Adjustments

Minimal differences between reported and adjusted figures, indicating stable valuation impact.

The financial data over the years from 2018 to 2022 indicates several key trends in the company's asset base and profitability as measured by Return on Assets (ROA), both reported and goodwill adjusted.

Total Assets

The reported total assets exhibit consistent growth throughout the period. Starting at approximately $1.92 billion in 2018, total assets increased substantially to around $5.39 billion by the end of 2022. This represents nearly a threefold increase over five years. The adjusted total assets, which presumably exclude goodwill or intangible asset effects, follow a very similar pattern, slightly lower in absolute terms but mirroring the upward trajectory closely. This steady asset growth indicates ongoing investment or acquisition activity and expansion of asset holdings.

Return on Assets (ROA)

The reported ROA shows notable volatility over the examined period. In 2018, the company experienced a negative ROA of -6.63%, implying a loss relative to asset levels. However, 2019 saw a reversal to positive territory at 4.22%. The peak ROA occurred in 2020, reaching 11.5%, suggesting improved asset utilization or profitability that year. Subsequently, ROA declined to 3.18% in 2021 before rising again to 6.33% in 2022. This fluctuating pattern may point to variable operational performance or the impact of strategic initiatives over time. The adjusted ROA figures closely replicate the reported values, differing only marginally, which suggests that goodwill adjustments have minimal effect on the overall profitability ratios in this data set.

Comparison and Insights

The close alignment between reported and adjusted figures for total assets and ROA indicates that goodwill or related intangible asset adjustments are not significantly distorting the company’s reported financial position or profitability measures. The continuous asset growth paired with fluctuating but overall positive ROA in recent years implies that while the company has been scaling its operations, it has faced varying efficiency or profitability challenges. The peak ROA in 2020 could relate to one-time gains or operational improvements, followed by a dip likely influenced by external or internal factors impacting performance in 2021. The recovery in 2022 suggests a return toward improved utilization and earnings generation relative to assets.