DexCom Inc. (NASDAQ:DXCM)

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DexCom Inc., adjusted total assets

US$ in thousands

	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018
As Reported
Total assets	5,391,700)	4,863,600)	4,290,500)	2,395,000)	1,916,000)
Adjustments
Add: Operating lease right-of-use asset (before adoption of FASB Topic 842)¹	—)	—)	—)	—)	58,897)
Add: Allowance for doubtful accounts	7,300)	5,400)	7,200)	5,800)	7,200)
Less: Deferred tax assets²	341,200)	220,800)	216,400)	—)	—)
After Adjustment
Adjusted total assets	5,057,800)	4,648,200)	4,081,300)	2,400,800)	1,982,097)

Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).

¹ Operating lease right-of-use asset (before adoption of FASB Topic 842). See details »

² Deferred tax assets. See details »

A consistent upward trajectory in both total assets and adjusted total assets is observed from 2018 through 2022. The most significant period of expansion occurred between 2019 and 2020, where total assets increased by approximately 79%, rising from 2.395 billion to 4.291 billion. This growth phase was followed by more moderate annual increases in 2021 and 2022, resulting in a total asset base of 5.392 billion by the end of the period.

Asset Growth Trends: Total assets grew from 1.916 billion in 2018 to 5.392 billion in 2022, representing a total increase of approximately 181%. Adjusted total assets followed a similar growth pattern, increasing from 1.982 billion to 5.058 billion over the same timeframe.
Adjustment Variance Analysis: A shift in the relationship between total assets and adjusted total assets is evident. In 2018 and 2019, adjusted total assets were slightly higher than the reported total assets. However, beginning in 2020, a reversal occurred, and adjusted total assets remained consistently lower than total assets. This gap widened progressively from 2020 to 2022, with the difference increasing from 209.2 million in 2020 to 333.9 million in 2022.
Relative Adjustment Impact: By 2022, the adjustment resulted in a reduction of approximately 6.2% relative to the total asset value. This indicates an increasing divergence between the standard reporting of assets and the adjusted valuation used for specific analytical purposes.

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DexCom Inc., adjusted current liabilities

US$ in thousands

	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018
As Reported
Current liabilities	1,839,300)	720,800)	614,100)	360,200)	222,400)
Adjustments
Less: Deferred revenue, current	10,100)	2,100)	2,200)	1,700)	2,900)
Less: Accrued warranty, current	12,800)	12,900)	11,700)	7,400)	6,800)
After Adjustment
Adjusted current liabilities	1,816,400)	705,800)	600,200)	351,100)	212,700)

Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).

A consistent and significant upward trajectory in both current liabilities and adjusted current liabilities is observed from 2018 through 2022. The most pronounced acceleration in obligations occurred between 2021 and 2022, where the values more than doubled within a single fiscal year.

Liability Growth Trends: Current liabilities increased from 222,400 thousand US dollars in 2018 to 1,839,300 thousand US dollars by 2022, representing a cumulative increase of approximately 731%. While growth was steady between 2018 and 2021, the jump to 1,839,300 thousand US dollars in 2022 indicates a substantial expansion of short-term financial obligations.
Adjustment Magnitude and Variance: Adjusted current liabilities closely mirror the trajectory of total current liabilities, maintaining a narrow variance throughout the analyzed period. The absolute difference between current and adjusted liabilities grew from 9,700 thousand US dollars in 2018 to 22,900 thousand US dollars in 2022, suggesting that while the adjustment amount is increasing in absolute terms, it is doing so at a much slower rate than the total liabilities.
Proportional Impact of Adjustments: The adjustments represent a marginal percentage of the overall liability structure. In 2018, the adjustment constituted approximately 4.4% of current liabilities, but by 2022, this proportion decreased to approximately 1.2%. This trend indicates that the primary drivers of the liability increase are unrelated to the specific items being adjusted, as the core obligations have grown disproportionately faster than the adjustments.

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DexCom Inc., adjusted total liabilities

US$ in thousands

	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018
As Reported
Total liabilities	3,259,900)	2,612,100)	2,464,000)	1,512,400)	1,252,700)
Adjustments
Add: Operating lease liability (before adoption of FASB Topic 842)¹	—)	—)	—)	—)	58,897)
Less: Deferred tax liabilities²	4,900)	5,900)	—)	—)	—)
Less: Deferred revenue	29,100)	2,100)	2,200)	1,700)	2,900)
Less: Accrued warranty	12,800)	12,900)	11,700)	7,400)	6,800)
After Adjustment
Adjusted total liabilities	3,213,100)	2,591,200)	2,450,100)	1,503,300)	1,301,897)

Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).

¹ Operating lease liability (before adoption of FASB Topic 842). See details »

² Deferred tax liabilities. See details »

A consistent upward trend in both total liabilities and adjusted total liabilities is observed from 2018 through 2022. The most significant increase in obligations occurred between 2019 and 2020, where total liabilities grew by approximately 62.9%, rising from US$ 1,512.4 million to US$ 2,464.0 million. This growth trajectory continued through 2022, resulting in a total liability figure of US$ 3,259.9 million, representing an overall increase of approximately 160% over the five-year period.

Analysis of Liability Adjustments: A divergence in the relationship between reported and adjusted liabilities is evident over the analyzed period. In 2018, adjusted total liabilities were higher than reported total liabilities by US$ 49.197 million. However, starting in 2019, the adjusted figures became consistently lower than the reported totals. This negative variance expanded steadily from US$ 9.1 million in 2019 to US$ 46.8 million by the end of 2022.
Comparative Growth Trends: Adjusted total liabilities mirrored the growth patterns of total liabilities closely, exhibiting a similar spike between 2019 and 2020. Despite the shift in the direction of adjustments after 2018, the adjusted figures remained highly correlated with the reported figures, suggesting that the adjustments represent a relatively small percentage of the total liability balance.
Period-over-Period Stability: Following the substantial increase in 2020, the rate of growth for both metrics moderated in 2021 before accelerating again in 2022. The adjusted total liabilities increased from US$ 1,301.897 million in 2018 to US$ 3,213.1 million in 2022, maintaining a trajectory that aligns with the broader expansion of the corporate liability structure.

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DexCom Inc., adjusted stockholders’ equity

US$ in thousands

	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018
As Reported
Stockholders’ equity	2,131,800)	2,251,500)	1,826,500)	882,600)	663,300)
Adjustments
Less: Net deferred tax assets (liabilities)¹	336,300)	214,900)	216,400)	(100)	100)
Add: Allowance for doubtful accounts	7,300)	5,400)	7,200)	5,800)	7,200)
Add: Deferred revenue	29,100)	2,100)	2,200)	1,700)	2,900)
Add: Accrued warranty	12,800)	12,900)	11,700)	7,400)	6,800)
After Adjustment
Adjusted stockholders’ equity	1,844,700)	2,057,000)	1,631,200)	897,600)	680,100)

Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).

¹ Net deferred tax assets (liabilities). See details »

An upward trajectory in both stockholders' equity and adjusted stockholders' equity is observed from 2018 through 2021, followed by a moderate decline in 2022. The most significant expansion occurred between 2019 and 2020, during which equity levels more than doubled.

Equity Growth Patterns: Stockholders' equity increased from 663.3 million in 2018 to a peak of 2.25 billion in 2021. This growth reflects a substantial increase in the reported book value over the four-year period.
Divergence in Adjusted Equity: A shift in the relationship between reported and adjusted equity is evident. In 2018 and 2019, adjusted stockholders' equity was slightly higher than the reported figure. Starting in 2020, a reversal occurred, and adjusted equity fell significantly below reported equity. This variance increased over time, reaching a maximum difference of 287.1 million by December 31, 2022.
Recent Contraction Trends: A downward trend is noted in 2022. Stockholders' equity decreased by approximately 5.3% compared to 2021, while adjusted stockholders' equity experienced a more pronounced decline of approximately 10.4% during the same period.

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DexCom Inc., adjusted capitalization table

US$ in thousands

	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018
As Reported
Short-term finance lease liabilities	4,200)	3,300)	8,800)	600)	—)
Current portion of long-term senior convertible notes	772,600)	—)	—)	—)	—)
Long-term senior convertible notes	1,197,700)	1,702,700)	1,667,200)	1,059,700)	1,010,300)
Long-term finance lease liabilities	59,600)	57,000)	54,000)	14,400)	7,300)
Total reported debt	2,034,100)	1,763,000)	1,730,000)	1,074,700)	1,017,600)
Stockholders’ equity	2,131,800)	2,251,500)	1,826,500)	882,600)	663,300)
Total reported capital	4,165,900)	4,014,500)	3,556,500)	1,957,300)	1,680,900)
Adjustments to Debt
Add: Operating lease liability (before adoption of FASB Topic 842)¹	—)	—)	—)	—)	58,897)
Add: Short-term operating lease liabilities²	20,500)	20,500)	16,500)	13,600)	—)
Add: Long-term operating lease liabilities³	94,600)	98,600)	101,800)	72,400)	—)
Adjusted total debt	2,149,200)	1,882,100)	1,848,300)	1,160,700)	1,076,497)
Adjustments to Equity
Less: Net deferred tax assets (liabilities)⁴	336,300)	214,900)	216,400)	(100)	100)
Add: Allowance for doubtful accounts	7,300)	5,400)	7,200)	5,800)	7,200)
Add: Deferred revenue	29,100)	2,100)	2,200)	1,700)	2,900)
Add: Accrued warranty	12,800)	12,900)	11,700)	7,400)	6,800)
Adjusted stockholders’ equity	1,844,700)	2,057,000)	1,631,200)	897,600)	680,100)
After Adjustment
Adjusted total capital	3,993,900)	3,939,100)	3,479,500)	2,058,300)	1,756,597)

Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).

¹ Operating lease liability (before adoption of FASB Topic 842). See details »

² Short-term operating lease liabilities. See details »

³ Long-term operating lease liabilities. See details »

⁴ Net deferred tax assets (liabilities). See details »

An analysis of the capitalization structure from 2018 through 2022 reveals a significant expansion in both total debt and overall capital. The organization transitioned from a total reported capital of 1.68 billion USD in 2018 to 4.17 billion USD by the end of 2022, reflecting a substantial increase in the scale of the balance sheet.

Debt Obligations and Leveraging Trends: A consistent upward trajectory is observed in both reported and adjusted debt levels. Total reported debt grew from 1.017 billion USD in 2018 to 2.034 billion USD in 2022. The adjusted total debt follows a similar pattern, remaining consistently higher than the reported figures and reaching 2.149 billion USD in 2022. This indicates a steady increase in leverage over the five-year period.
Equity Fluctuations: Stockholders' equity experienced rapid growth between 2018 and 2021, rising from 663.3 million USD to a peak of 2.25 billion USD. However, a reversal occurred in 2022, where reported equity declined to 2.13 billion USD. This contraction is mirrored in the adjusted equity figures, which decreased from 2.057 billion USD in 2021 to 1.84 billion USD in 2022.
Analysis of Capitalization Adjustments: The application of adjustments consistently results in a higher debt profile and a lower equity profile compared to reported values from 2020 onward. Specifically, adjusted total debt exceeds reported debt in every period, while adjusted stockholders' equity fell below reported equity starting in 2020. This divergence suggest a more conservative accounting of the organization's net worth and financial obligations.
Overall Capitalization Growth: The adjusted total capital grew from 1.75 billion USD in 2018 to 3.99 billion USD in 2022. While growth was most aggressive between 2019 and 2020, the general trend reflects a broadening capital base, despite the slight contraction in equity observed in the final year of the analyzed period.

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DexCom Inc., adjusted revenue

US$ in thousands

12 months ended:	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018
As Reported
Revenue	2,909,800)	2,448,500)	1,926,700)	1,476,000)	1,031,600)
Adjustment
Add: Increase (decrease) in deferred revenue	10,900)	(100)	500)	(1,200)	(300)
After Adjustment
Adjusted revenue	2,920,700)	2,448,400)	1,927,200)	1,474,800)	1,031,300)

Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).

A consistent and strong upward trajectory is observed in both reported and adjusted revenue from 2018 through 2022. The financial performance indicates sustained growth in the top line over the five-year period.

Revenue Growth Trends: Reported revenue grew from 1,031,600 thousand US$ in 2018 to 2,909,800 thousand US$ in 2022. This represents a steady year-over-year increase, reflecting an expansion of the revenue base throughout the analyzed period.
Revenue Adjustment Variance: The difference between reported revenue and adjusted revenue is negligible across the time series. For the years 2018, 2019, and 2021, reported revenue slightly exceeded adjusted revenue. Conversely, in 2020 and 2022, adjusted revenue was higher than reported revenue.
Materiality and Impact: The scale of adjustments is immaterial relative to the total volume of revenue. Even the largest variance, observed in 2022 where adjusted revenue exceeded reported revenue by 10,900 thousand US$, represents a small fraction of the total revenue. This suggests that the adjustments made to the revenue figures do not materially alter the overall financial trend or the interpretation of the company's growth performance.

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DexCom Inc., adjusted net income (loss)

US$ in thousands

12 months ended:	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018
As Reported
Net income (loss)	341,200)	154,700)	493,600)	101,100)	(127,100)
Adjustments
Add: Deferred income tax expense (benefit)¹	(21,600)	(4,900)	(277,300)	200)	(2,200)
Add: Increase (decrease) in allowance for doubtful accounts	1,900)	(1,800)	1,400)	(1,400)	(4,300)
Add: Increase (decrease) in deferred revenue	10,900)	(100)	500)	(1,200)	(300)
Add: Increase (decrease) in accrued warranty	(100)	1,200)	4,300)	600)	(2,000)
Add: Other comprehensive income (loss), net of tax	(12,100)	(2,700)	900)	800)	4,100)
After Adjustment
Adjusted net income (loss)	320,200)	146,400)	223,400)	100,100)	(131,800)

Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).

¹ Deferred income tax expense (benefit). See details »

The financial performance between 2018 and 2022 is characterized by a transition from initial losses to sustained profitability, with a notable peak in earnings during the 2020 fiscal year.

Net Income Trajectory: A significant reversal occurred between 2018 and 2019, as reported net income shifted from a loss of 127.1 million US dollars to a profit of 101.1 million US dollars. Profitability accelerated sharply in 2020, reaching a five-year peak of 493.6 million US dollars, before experiencing a contraction in 2021 and a subsequent recovery to 341.2 million US dollars by the end of 2022.
Analysis of Adjusted Net Income: Adjusted net income followed a similar growth trajectory but exhibited lower volatility than reported figures. While the transition to profitability mirrored the reported net income in 2019, the adjusted figures provided a more conservative view of earnings during the 2020 peak, recording 223.4 million US dollars.
Variance Between Reported and Adjusted Results: For the majority of the analyzed period, the variance between reported and adjusted net income remained relatively narrow. However, a substantial divergence is observed in 2020, where reported net income exceeded adjusted net income by approximately 270.2 million US dollars. This indicates the presence of significant non-recurring gains or one-time positive items in the reported results that were excluded to normalize the underlying operational performance.

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