Read on Twitter
2/ The BIG question: Is the thesis on track
Other question:
Is revenue growing?
Are margins stable/expanding?
Profits?
Balance sheet?
New opportunities?
New threats?
Other question:
Is revenue growing?Are margins stable/expanding?Profits?Balance sheet?New opportunities?New threats?
3/ I open 4 browser tabs
Tab 1 - Current company earnings report / shareholder letter
Tab 2 - Previous company earnings report / shareholder letter (check guidance)
Tab 3 - Analyst estimates
Tab 4 - Call Transcript
Tab 1 - Current company earnings report / shareholder letter
Tab 2 - Previous company earnings report / shareholder letter (check guidance)
Tab 3 - Analyst estimates
Tab 4 - Call Transcript
4/ Tabs 1 & 2 - Find the current & previous earnings report
I search "Dexcom Investor Relations"
I click on "press release"
Open the newest quarterly earnings report and last quarter
It can also be a shareholder letter/presentation
I search "Dexcom Investor Relations"
I click on "press release"
Open the newest quarterly earnings report and last quarter
It can also be a shareholder letter/presentation
5/ Tab 3 - Find the quarterly analyst estimates
Open up $DXCM in yahoo finance
The "news" section usually has a link to reports on whether the company beat/met estimates
The "analysis" tab is a good source, but sometimes it updates to the next quarter too quickly
Open up $DXCM in yahoo finance
The "news" section usually has a link to reports on whether the company beat/met estimates
The "analysis" tab is a good source, but sometimes it updates to the next quarter too quickly
6/ Tab 4 - Find a transcript of the earnings call
@themotleyfool transcripts are best
Sometimes links are on Yahoo Finance news
Search "Fool DXCM Transcript" if not
Seekingalpha / NASDAQ are two other free sources
@themotleyfool transcripts are best
Sometimes links are on Yahoo Finance news
Search "Fool DXCM Transcript" if not
Seekingalpha / NASDAQ are two other free sources
7/ In most recent earnings, I check the headline numbers:
Revenue growth: 23% to $569 million
Revenue vs. Wall Street expectations (beat by 1.88%)
non-gaap EPS growth: -21% to $0.91
EPS vs. Wall Street expectations (meet expectation)
Revenue growth: 23% to $569 million
Revenue vs. Wall Street expectations (beat by 1.88%)
non-gaap EPS growth: -21% to $0.91
EPS vs. Wall Street expectations (meet expectation)
8/ Results vs. guidance
Management issued yearly guidance for 2020 in Q3 2020
Revenue +29% to $1.9 billion (actual +31% to $1.93 billion)
Non-GAAP Gross margin 66% (actual 66.7%)
Non-GAAP Operating margin 16% (actual 16.5%)
Management issued yearly guidance for 2020 in Q3 2020
Revenue +29% to $1.9 billion (actual +31% to $1.93 billion)
Non-GAAP Gross margin 66% (actual 66.7%)
Non-GAAP Operating margin 16% (actual 16.5%)
9/ Balance Sheet
$2.71 billion cash
$1.67 billion long-term convertible notes
$2.71 billion cash
$1.67 billion long-term convertible notes
10/
Margins
Use transcript / press release / or calculate yourself
Gross 70.2% vs. 66.8% (gross profit grew faster than revenue)
Non-gaap Operating: 18.3% vs. 22.5% (investigate!)
non-gaap Net: 15.8% vs. 22.9% (investigate!)
Margins
Use transcript / press release / or calculate yourself
Gross 70.2% vs. 66.8% (gross profit grew faster than revenue)
Non-gaap Operating: 18.3% vs. 22.5% (investigate!)
non-gaap Net: 15.8% vs. 22.9% (investigate!)
11/
News from press release?
Building out salesforce (explains operating margin & net margin drop)
Reimbursement in France
News from press release?
Building out salesforce (explains operating margin & net margin drop)Reimbursement in France
12/
Read through transcript:
Gross margin 
from new manufacturing facility
Super bowl commerical
New service center in Lithuania
New manufacturing site in Malaysia
New sensor launching in 2nd half 2021
Enter VC space
Read through transcript:
Gross margin from new manufacturing facilitySuper bowl commericalNew service center in LithuaniaNew manufacturing site in MalaysiaNew sensor launching in 2nd half 2021Enter VC space
13/ Transcript
50% of sales now coming through pharmacy
International sales 35% of revenue
International DTC campaign launching
50% of sales now coming through pharmacyInternational sales 35% of revenueInternational DTC campaign launching
14/
2021 Guidance:
Revenue:
Management expects 15% to 20% growth
Wall Street expects 21%
Margins:
Gross
to 65%
Operating 13%
2021 Guidance:
Revenue:
Management expects 15% to 20% growth
Wall Street expects 21%
Margins:
Gross
to 65%Operating
13%
15/
Management has a long history of under-promising & over-delivering, so I view these numbers as the floor, not the ceiling
Management has a long history of under-promising & over-delivering, so I view these numbers as the floor, not the ceiling
16/
My big takeaways:
Revenue growing
Gross margin expanding
International expansion
Reinvestment year causing bottom-line to look worse
2021 Margins will be weak
Move to pharmacy working
G7 launching in 2021
VC fund adds optionality
THESIS ON TRACK
My big takeaways:
Revenue growingGross margin expandingInternational expansionReinvestment year causing bottom-line to look worse2021 Margins will be weakMove to pharmacy workingG7 launching in 2021VC fund adds optionalityTHESIS ON TRACK
19/ I email financial graphics like these every day for free
Interested?
https://brianferoldi.substack.com/
Interested?
https://brianferoldi.substack.com/
