The spike in Cash and Cash Equivalents in Q2 2024 was primarily due to two factors. **First**, DexCom generated strong operating cash flows, with **$488.6 million** in positive cash flows over the six months ended June 30, 2024.  **[0001093557-24-000144_dxcm-20240630.htm:36]**  **Second**, there was a net increase of **$396.6 million** in cash, cash equivalents, and short-term marketable securities, which saw the total liquidity rise from **$2.72 billion** at the end of Q4 2023 to **$3.12 billion** by the end of Q2 2024.  **[0001093557-24-000144_dxcm-20240630.htm:38]** 

Why did Cash and Cash Equivalents spike in Q2 2024?

The rise in **Total Assets** in Q2 2024 was mainly driven by several factors. **Cash and Cash Equivalents** increased significantly, supplemented by higher levels of **Short-term Marketable Securities**. Additionally, there was notable growth in **Prepaid and Other Current Assets** as well as **Property and Equipment, Net**, which reflected continued investments in production capacity and infrastructure. These increases were partly offset by minor declines in other asset categories such as **Goodwill** and **Intangibles, Net**.  **[0001093557-24-000143_dxcmq2202499-1_6302024.htm:3]** **[0001093557-24-000144_dxcm-20240630.htm:4]** 

What contributed to the rise in Total Assets in Q2 2024?

The increase in **Total Liabilities in Q2 2024** was driven by a rise in **Accounts Payable and Accrued Liabilities**, a slight increase in **Long-term Senior Convertible Notes**, and a small uptick in **Other Long-term Liabilities**.  **[0001093557-24-000143_dxcmq2202499-1_6302024.htm:3]** 

What drove the increase in Total Liabilities in Q2 2024?

97397142d3716f8a8d8c3872dae86b28b654071eff6846a0de5137226de2c1b4

Based on the available documents, operating cash flow for Q4 2023 was reported as **$133.60 million**.  **[0001093557-24-000021_dxcm-20231231.htm:155]**  Although another document outlines the year‐over‐year changes for Q4—highlighting factors such as **increased net income, higher depreciation and amortization, elevated share‐based compensation**, alongside significant changes in working capital (for example, more negative shifts in **accounts receivable** and **inventory**)  **[0001093557-24-000021_dxcm-20231231.htm:155]** —it does not directly explain why the Q4 2023 figure is lower relative to other quarters. In summary, the documents do not provide a definitive explanation for why operating cash flow was so low in Q4 2023.

Why was Operating Cash Flow so low in Q4 2023?

In Q2 2024, the high operating cash flow was primarily driven by a **substantial increase in net income**, which rose to **$289.9 million** in 2024 from **$164.5 million** in 2023. This improvement was complemented by **favorable changes in working capital**, including an improvement in accounts receivable (a positive change of **$28.0 million** compared to a negative change previously) and a reduction in the negative impact from inventory (from **$(115.0) million** down to **$(18.4) million**). Additionally, **non-cash adjustments** played a significant role with higher depreciation and amortization (**$104.6 million** versus **$85.3 million**) and increased share-based compensation (**$83.7 million** versus **$74.9 million**) contributing further to the cash flow boost.  **[0001093557-24-000144_dxcm-20240630.htm:8]** 

What contributed to the high Operating Cash Flow in Q2 2024?

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The negative income tax expense of **$(10.10) million** in Q4 2023 appears to have been driven by specific one‐time and deferred tax adjustments. In particular, the company recorded significant **deferred tax adjustments** and a notable amount of **one-time tax adjustments** that, when combined, produced an overall tax benefit for the period.  **[0001093557-24-000021_dxcm-20231231.htm:153]** **[0001093557-24-000021_dxcm-20231231.htm:186]** 

Why was Income tax expense negative in Q4 2023?

The significant jump in **net income** in Q4 2023 was driven by robust **revenue growth**—with total revenue increasing by **27%** to **$1.035 billion**—combined with strong **operating leverage**, where operating expenses grew at half the rate of revenue. This scenario enabled marked improvements in both GAAP and non-GAAP operating income, with GAAP operating income rising to **$216.9 million** and non-GAAP to **$242.7 million**. Additionally, key contributors included favorable **tax adjustments** and the scaling of the **G7 CGM system**, which, despite its higher cost profile, contributed to continued market momentum and improved margins over time.  **[0001093557-24-000020_dxcmq4202399-1_12312023.htm:1]** **[0001093557-24-000020_dxcmq4202399-1_12312023.htm:0]** 

What drove the significant jump in Net income in Q4 2023?

The higher EPS in **Q4 2023** was driven by several key factors. Firstly, there was **revenue growth** of **27%**, which significantly boosted the company's top-line performance. This increase in revenue helped drive a higher **net income**, jumping from **$91.8 million** in Q4 2022 to **$256.3 million** in Q4 2023. Additionally, the company experienced an improvement in **operating income**, rising from **$125.4 million** to **$216.9 million**, reflecting enhanced operational efficiency. These elements collectively contributed to the improved basic net income per share in that quarter.  **[0001093557-24-000020_dxcmq4202399-1_12312023.htm:1]** **[DXCM_3372486_5]** 

What contributed to the higher EPS in Q4 2023?

The provided documents explain the operating income change in Q1 2024 on a year-over-year basis compared to Q1 2023—not the drop from Q4 2023. Specifically, they note that Q1 2024 operating income increased to **$101.1 million** from **$47.2 million** in Q1 2023 due to factors like **revenue growth, operating leverage, improved product mix, and strategic investments**.  **[0001093557-24-000078_dxcmq1202499-1_3312024.htm:0]** **[0001093557-24-000078_dxcmq1202499-1_3312024.htm:1]** **[DXCM_3380791_5]**  There is no information in the documents that directly explains why operating income was lower in Q1 2024 than in Q4 2023 (**$216.90 million** in Q4 2023  **[0001093557-24-000021_dxcm-20231231.htm:153]** ).

Why did Operating income drop so much in Q1 2024?

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a78d25629f5fe58e9e44036185ce52f10314abc333e4f73e01a93ddddb9499d0

73e8681628281ae4b88897cd6b73fe4cbd2335128f44dac4f948b887089a9f6e

Revenue (USD, millions)

Cost of sales (USD, millions)

Gross profit (USD, millions)

Research and development (USD, millions)

Selling, general and administrative (USD, millions)

Total operating expenses (USD, millions)

Operating income (USD, millions)

Other income (expense), net (USD, millions)

Income before income taxes (USD, millions)

Income tax expense (USD, millions)

Net income (USD, millions)

Basic net income per share (USD)

Diluted net income per share (USD)

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Adjustments for Non-Cash Items (USD, millions)

Stock-Based Compensation (USD, millions)

Changes in Working Capital (USD, millions)

Capital Expenditures (CapEx) (USD, millions)

Proceeds from / Repayments of Debt (USD, millions)

Share Repurchases (USD, millions)

Dividend Payments (USD, millions)

Net Change in Cash (USD, millions)

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Distributor Sales

Direct Sales

Disposable Sensors and Other

Reusable Hardware

- Drop-Ship Distributors

- Stocking Distributors

Product Revenue

Development Grant and Other Revenue

Total Revenue

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United States

International

- Outside the United States

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DEXCOM (DXCM)

Financials