Name: DexCom Inc. (NASDAQ:DXCM) | Cash Flow Statement
Creator: Stock Analysis on Net

Cash Flow Statement

The cash flow statement provides information about a company cash receipts and cash payments during an accounting period, showing how these cash flows link the ending cash balance to the beginning balance shown on the company balance sheet.

The cash flow statement consists of three parts: cash flows provided by (used in) operating activities, cash flows provided by (used in) investing activities, and cash flows provided by (used in) financing activities.

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DexCom Inc., consolidated cash flow statement

US$ in thousands

12 months ended:	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018
Net income (loss)	341,200)	154,700)	493,600)	101,100)	(127,100)
Depreciation and amortization	155,900)	102,000)	67,100)	48,700)	29,100)
Share-based compensation	126,500)	113,400)	119,400)	102,700)	101,900)
Collaborative research and development fee	—)	87,100)	—)	—)	—)
Loss on extinguishment of debt	—)	1,500)	5,900)	—)	—)
Non-cash interest expense	6,300)	88,700)	74,000)	49,600)	17,900)
Non-cash collaborative research and development fee through issuance of common stock	—)	—)	—)	—)	217,700)
Unrealized gain on equity investment	—)	—)	—)	—)	(36,000)
Realized (gain) loss on equity investment	(200)	(11,600)	—)	4,200)	(44,100)
Deferred income taxes, including benefit from valuation allowance release	(21,600)	(4,900)	(277,300)	200)	(2,200)
Other non-cash income and expenses	34,700)	43,600)	13,700)	1,900)	6,900)
Accounts receivable, net	(199,900)	(75,500)	(142,300)	(60,000)	(93,200)
Inventory	49,300)	(112,200)	(114,500)	(49,100)	(25,500)
Prepaid and other assets	(131,600)	(21,300)	(2,400)	(7,200)	(3,000)
Operating lease right-of-use assets and liabilities, net	(5,800)	(100)	(800)	(2,400)	—)
Accounts payable and accrued liabilities	295,100)	58,000)	194,500)	109,000)	56,200)
Accrued payroll and related expenses	8,500)	10,400)	26,100)	16,000)	23,800)
Deferred revenue and other liabilities	11,100)	8,700)	18,600)	(200)	800)
Changes in operating assets and liabilities	26,700)	(132,000)	(20,800)	6,100)	(40,900)
Adjustments to reconcile net income (loss) to cash provided by operating activities	328,300)	287,800)	(18,000)	213,400)	250,300)
Net cash provided by operating activities	669,500)	442,500)	475,600)	314,500)	123,200)
Purchase of marketable securities	(2,266,300)	(2,473,100)	(3,058,200)	(2,030,400)	(452,500)
Proceeds from sale and maturity of marketable securities	2,127,800)	2,666,300)	2,250,500)	1,196,400)	392,100)
Purchases of property and equipment	(364,800)	(389,200)	(199,000)	(180,000)	(67,100)
Acquisitions, net of cash acquired	(3,900)	(30,200)	—)	—)	(11,300)
Other investing activities	(14,300)	10,100)	(11,300)	(1,200)	(1,000)
Net cash used in investing activities	(521,500)	(216,100)	(1,018,000)	(1,015,200)	(139,800)
Net proceeds from issuance of common stock	22,500)	20,300)	15,300)	11,900)	10,800)
Purchases of treasury stock	(557,700)	—)	—)	—)	(100,000)
Proceeds from issuance of convertible notes, net of issuance costs	—)	—)	1,188,800)	—)	836,600)
Repurchase of convertible notes	—)	—)	(282,600)	—)	—)
Proceeds from sale of warrants	—)	—)	—)	—)	183,800)
Purchase of convertible note hedge	—)	—)	—)	—)	(218,900)
Other financing activities	(17,300)	(9,900)	(9,400)	(1,200)	(1,900)
Net cash provided by (used in) financing activities	(552,500)	10,400)	912,100)	10,700)	710,400)
Effect of exchange rate changes on cash, cash equivalents and restricted cash	(5,800)	(1,400)	2,100)	(700)	1,800)
Increase (decrease) in cash, cash equivalents and restricted cash	(410,300)	235,400)	371,800)	(690,700)	695,600)
Cash, cash equivalents and restricted cash, beginning of period	1,053,600)	818,200)	446,400)	1,137,100)	441,500)
Cash, cash equivalents and restricted cash, end of period	643,300)	1,053,600)	818,200)	446,400)	1,137,100)

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).

The financial data indicates a strong trajectory of growth in cash generation from operations, transitioning from a period of net losses in 2018 to consistent profitability and increasing cash flows through 2022. Operating cash flow demonstrated a steady upward trend, growing from 123.2 million US dollars in 2018 to 669.5 million US dollars by 2022, suggesting a robust ability to generate liquidity from core business activities.

Operating Activity and Earnings Quality: Net income exhibited volatility, moving from a loss of 127.1 million US dollars in 2018 to a peak of 493.6 million US dollars in 2020, before stabilizing at 341.2 million US dollars in 2022. A notable divergence exists between net income and net cash provided by operating activities, primarily driven by substantial non-cash add-backs. Depreciation and amortization increased consistently from 29.1 million US dollars in 2018 to 155.9 million US dollars in 2022, reflecting significant growth in the company's asset base.
Investment and Capital Expenditure Trends: Investing activities were characterized by aggressive capital expenditure and active management of marketable securities. Purchases of property and equipment rose sharply from 67.1 million US dollars in 2018 to a peak of 389.2 million US dollars in 2021, indicating a period of intensive infrastructure expansion. The company also maintained a high volume of turnover in marketable securities, with annual purchases frequently exceeding 2 billion US dollars between 2019 and 2022, offset by similar proceeds from sales and maturities.
Financing and Capital Structure: Financing activities were dominated by the strategic use of convertible notes and equity management. Significant cash infusions were realized through the issuance of convertible notes in 2018 (836.6 million US dollars) and 2020 (1.188 billion US dollars). A pivot in capital allocation is observed in 2022, where the company shifted toward returning value to shareholders, as evidenced by a substantial purchase of treasury stock totaling 557.7 million US dollars, contributing to a net cash outflow from financing activities of 552.5 million US dollars that year.
Liquidity and Working Capital Dynamics: The cash position fluctuated significantly, ending 2022 at 643.3 million US dollars. Working capital management showed variability; while accounts receivable generally increased, creating a cash drag, this was offset in 2022 by a significant increase in accounts payable and accrued liabilities, which rose to 295.1 million US dollars. This suggests an increased reliance on supplier credit to fund operations during the final year of the period analyzed.

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