Analysis of Profitability Ratios
Profitability ratios measure the company ability to generate profitable sales from its resources (assets).
Profitability Ratios (Summary)
Return on Sales
Return on Investment
DexCom Inc., profitability ratios
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 performance between 2018 and 2022 is characterized by a transition from initial operating losses to a period of sustained profitability and margin stabilization. A significant pivot occurred after 2018, where negative margins across all profitability metrics shifted to positive territory, indicating a successful scaling of operations and improved cost management.
- Gross Profit Margin
- Gross profitability remained consistently high throughout the analyzed period, fluctuating within a narrow range between 63.11% and 68.63%. A peak was observed in 2021, followed by a slight contraction to 64.72% in 2022, suggesting a strong and stable ability to manage direct production costs relative to revenue.
- Operating and Net Profit Margins
- Operating margins underwent a substantial recovery, moving from -18.06% in 2018 to a positive 13.44% by 2022. Net profit margins exhibited higher volatility, peaking sharply at 25.62% in 2020 before declining to 6.32% in 2021 and recovering to 11.73% in 2022. This volatility in net margins suggests the influence of non-operating items or one-time financial events during those years.
- Return on Equity (ROE) and Return on Assets (ROA)
- Both ROE and ROA mirror the trajectory of the net profit margin, starting with negative values in 2018 (-19.16% and -6.63%, respectively) and reaching their zenith in 2020 (27.02% and 11.50%). While both metrics dipped in 2021, there was a notable rebound by 2022, with ROE reaching 16.01% and ROA reaching 6.33%, reflecting an improved efficiency in utilizing shareholder equity and total assets to generate profit.
Overall, the trend indicates a maturation of the business model, moving from a high-spend growth phase into a phase of consistent earnings generation. The stability of the gross margin combined with the recovery of operating and return metrics points toward improved operational leverage.
AI Ask an analyst for more
Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
How can I help you?
Gross Profit Margin
DexCom Inc., gross profit margin calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Gross profit | 1,883,100) | 1,680,500) | 1,280,100) | 931,500) | 663,900) | |
| Revenue | 2,909,800) | 2,448,500) | 1,926,700) | 1,476,000) | 1,031,600) | |
| Profitability Ratio | ||||||
| Gross profit margin1 | 64.72% | 68.63% | 66.44% | 63.11% | 64.36% | |
| Benchmarks | ||||||
| Gross Profit Margin, Competitors2 | ||||||
| Abbott Laboratories | 51.54% | 52.21% | — | — | — | |
| Elevance Health Inc. | 16.79% | 17.09% | — | — | — | |
| Intuitive Surgical Inc. | 67.44% | 69.32% | — | — | — | |
| Medtronic PLC | 67.98% | 65.19% | — | — | — | |
| UnitedHealth Group Inc. | 24.09% | 23.60% | — | — | — | |
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 2022 Calculation
Gross profit margin = 100 × Gross profit ÷ Revenue
= 100 × 1,883,100 ÷ 2,909,800 = 64.72%
2 Click competitor name to see calculations.
The financial performance from 2018 to 2022 is characterized by consistent expansion in both top-line revenue and gross profit, reflecting a significant increase in scale. Revenue grew from 1,031,600 thousand US$ in 2018 to 2,909,800 thousand US$ by 2022, while gross profit rose from 663,900 thousand US$ to 1,883,100 thousand US$ over the same period.
- Revenue and Gross Profit Growth
- A steady upward trajectory is observed in both revenue and gross profit throughout the five-year period. Revenue increased by approximately 182% from 2018 to 2022, while gross profit grew by roughly 184%, indicating that total gross earnings expanded in close alignment with sales growth.
- Gross Profit Margin Volatility
- The gross profit margin exhibited fluctuations within a range of 63.11% to 68.63%. After a marginal decline in 2019, the margin trended upward for two consecutive years, reaching a peak of 68.63% in 2021. This peak was followed by a contraction in 2022, where the margin reverted to 64.72%.
- Cost and Efficiency Analysis
- The expansion of the margin between 2019 and 2021 suggests improved operational efficiencies or enhanced pricing power. Conversely, the decline in 2022 indicates that the cost of goods sold grew at a faster rate than revenue, returning the profitability ratio to a level nearly identical to that of 2018.
AI Ask an analyst for more
Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
How can I help you?
Operating Profit Margin
DexCom Inc., operating profit margin calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Operating income (loss) | 391,200) | 265,800) | 299,500) | 142,300) | (186,300) | |
| Revenue | 2,909,800) | 2,448,500) | 1,926,700) | 1,476,000) | 1,031,600) | |
| Profitability Ratio | ||||||
| Operating profit margin1 | 13.44% | 10.86% | 15.54% | 9.64% | -18.06% | |
| Benchmarks | ||||||
| Operating Profit Margin, Competitors2 | ||||||
| Abbott Laboratories | 19.16% | 19.56% | — | — | — | |
| Elevance Health Inc. | 4.94% | 5.15% | — | — | — | |
| Intuitive Surgical Inc. | 25.35% | 31.89% | — | — | — | |
| Medtronic PLC | 18.15% | 14.89% | — | — | — | |
| UnitedHealth Group Inc. | 8.83% | 8.40% | — | — | — | |
| Operating Profit Margin, Sector | ||||||
| Health Care Equipment & Services | 9.26% | 9.13% | — | — | — | |
| Operating Profit Margin, Industry | ||||||
| Health Care | 18.74% | 18.04% | — | — | — | |
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 2022 Calculation
Operating profit margin = 100 × Operating income (loss) ÷ Revenue
= 100 × 391,200 ÷ 2,909,800 = 13.44%
2 Click competitor name to see calculations.
Between 2018 and 2022, a significant transition occurred in operational efficiency and profitability. The organization moved from a period of substantial operating losses to a state of consistent profitability, underpinned by a steady and continuous increase in total revenue.
- Revenue Growth Trends
- Revenue demonstrated a consistent upward trajectory over the five-year period, rising from US$ 1.03 billion in 2018 to US$ 2.91 billion by the end of 2022. This reflects a sustained expansion of market reach or product adoption.
- Operating Income Performance
- A stark reversal in operating results is observed, shifting from an operating loss of US$ 186.3 million in 2018 to a profit of US$ 391.2 million in 2022. While the trend was generally positive, a temporary contraction occurred in 2021, during which operating income fell to US$ 265.8 million from the US$ 299.5 million reported in 2020, before rebounding in the final year of the period.
- Operating Profit Margin Analysis
- The operating profit margin showed significant volatility during the transition to profitability. After starting at -18.06% in 2018, the margin climbed rapidly to a peak of 15.54% in 2020. A subsequent decline to 10.86% in 2021 suggests an increase in operating expenses relative to revenue growth during that specific year. The recovery to 13.44% in 2022 indicates a renewed improvement in operational leverage and cost control.
AI Ask an analyst for more
Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
How can I help you?
Net Profit Margin
DexCom Inc., net profit margin calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Net income (loss) | 341,200) | 154,700) | 493,600) | 101,100) | (127,100) | |
| Revenue | 2,909,800) | 2,448,500) | 1,926,700) | 1,476,000) | 1,031,600) | |
| Profitability Ratio | ||||||
| Net profit margin1 | 11.73% | 6.32% | 25.62% | 6.85% | -12.32% | |
| Benchmarks | ||||||
| Net Profit Margin, Competitors2 | ||||||
| Abbott Laboratories | 15.88% | 16.42% | — | — | — | |
| Elevance Health Inc. | 3.87% | 4.46% | — | — | — | |
| Intuitive Surgical Inc. | 21.25% | 29.85% | — | — | — | |
| Medtronic PLC | 15.90% | 11.97% | — | — | — | |
| UnitedHealth Group Inc. | 6.25% | 6.06% | — | — | — | |
| Net Profit Margin, Sector | ||||||
| Health Care Equipment & Services | 7.05% | 7.14% | — | — | — | |
| Net Profit Margin, Industry | ||||||
| Health Care | 14.65% | 15.24% | — | — | — | |
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 2022 Calculation
Net profit margin = 100 × Net income (loss) ÷ Revenue
= 100 × 341,200 ÷ 2,909,800 = 11.73%
2 Click competitor name to see calculations.
Revenue demonstrated a consistent upward trajectory from 2018 through 2022, growing steadily from 1.03 billion US$ to 2.91 billion US$. Despite this linear growth in top-line performance, net profitability exhibited significant volatility throughout the five-year period.
- Profitability Transition and Peak
- A transition from negative to positive earnings occurred between 2018 and 2019, as the net profit margin moved from -12.32% to 6.85%. This upward momentum peaked in 2020, where the net profit margin reached 25.62%, coinciding with a net income high of 493.6 million US$.
- Margin Contraction and Recovery
- A sharp decline in profitability was observed in 2021, with the net profit margin falling to 6.32% despite a continued increase in revenue. This indicates a period of increased operational costs or non-operating expenses relative to sales. A partial recovery followed in 2022, with the margin improving to 11.73% and net income rising to 341.2 million US$.
- Revenue-to-Profit Correlation
- While revenue growth remained constant and positive, net income did not follow a proportional growth pattern. The divergence between increasing revenue and fluctuating net profit margins suggests that profitability has been influenced by factors beyond simple sales volume growth.
AI Ask an analyst for more
Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
How can I help you?
Return on Equity (ROE)
DexCom Inc., ROE calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Net income (loss) | 341,200) | 154,700) | 493,600) | 101,100) | (127,100) | |
| Stockholders’ equity | 2,131,800) | 2,251,500) | 1,826,500) | 882,600) | 663,300) | |
| Profitability Ratio | ||||||
| ROE1 | 16.01% | 6.87% | 27.02% | 11.45% | -19.16% | |
| Benchmarks | ||||||
| ROE, Competitors2 | ||||||
| Abbott Laboratories | 18.90% | 19.75% | — | — | — | |
| Elevance Health Inc. | 16.59% | 16.93% | — | — | — | |
| Intuitive Surgical Inc. | 11.98% | 14.32% | — | — | — | |
| Medtronic PLC | 9.59% | 7.01% | — | — | — | |
| UnitedHealth Group Inc. | 25.87% | 24.09% | — | — | — | |
| ROE, Sector | ||||||
| Health Care Equipment & Services | 18.40% | 17.28% | — | — | — | |
| ROE, Industry | ||||||
| Health Care | 24.82% | 25.44% | — | — | — | |
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 2022 Calculation
ROE = 100 × Net income (loss) ÷ Stockholders’ equity
= 100 × 341,200 ÷ 2,131,800 = 16.01%
2 Click competitor name to see calculations.
The financial performance between 2018 and 2022 is characterized by a transition from initial net losses to a period of fluctuating profitability. While stockholders' equity expanded significantly over the five-year period, the resulting Return on Equity (ROE) exhibited substantial volatility, reflecting inconsistent net income growth relative to the expanding equity base.
- Net Income Trajectory
- A transition from a net loss of US$ 127.1 million in 2018 to a peak net income of US$ 493.6 million in 2020 is observed. This peak was followed by a sharp decline to US$ 154.7 million in 2021, before recovering to US$ 341.2 million by the end of 2022.
- Stockholders' Equity Growth
- Equity demonstrated a strong upward trend for the majority of the analysis period, increasing from US$ 663.3 million in 2018 to a peak of US$ 2.25 billion in 2021. A slight contraction to US$ 2.13 billion was recorded in 2022.
- Return on Equity (ROE) Volatility
- The ROE mirrored the fluctuations in net income, moving from -19.16% in 2018 to a high of 27.02% in 2020. A significant contraction to 6.87% occurred in 2021, driven by the simultaneous decrease in net income and the continued increase in stockholders' equity. The ratio recovered to 16.01% in 2022, indicating a renewed improvement in the efficiency of generating profits from shareholders' capital.
AI Ask an analyst for more
Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
How can I help you?
Return on Assets (ROA)
DexCom Inc., ROA calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Net income (loss) | 341,200) | 154,700) | 493,600) | 101,100) | (127,100) | |
| Total assets | 5,391,700) | 4,863,600) | 4,290,500) | 2,395,000) | 1,916,000) | |
| Profitability Ratio | ||||||
| ROA1 | 6.33% | 3.18% | 11.50% | 4.22% | -6.63% | |
| Benchmarks | ||||||
| ROA, Competitors2 | ||||||
| Abbott Laboratories | 9.31% | 9.40% | — | — | — | |
| Elevance Health Inc. | 5.86% | 6.26% | — | — | — | |
| Intuitive Surgical Inc. | 10.19% | 12.58% | — | — | — | |
| Medtronic PLC | 5.54% | 3.87% | — | — | — | |
| UnitedHealth Group Inc. | 8.19% | 8.15% | — | — | — | |
| ROA, Sector | ||||||
| Health Care Equipment & Services | 7.49% | 7.28% | — | — | — | |
| ROA, Industry | ||||||
| Health Care | 9.66% | 9.46% | — | — | — | |
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 2022 Calculation
ROA = 100 × Net income (loss) ÷ Total assets
= 100 × 341,200 ÷ 5,391,700 = 6.33%
2 Click competitor name to see calculations.
The analysis of the Return on Assets (ROA) from 2018 to 2022 reveals a period of significant volatility in profitability coupled with a consistent expansion of the asset base.
- Net Income Volatility
- A transition from a net loss of US$ 127.1 million in 2018 to profitability in 2019 is observed, with net income peaking at US$ 493.6 million in 2020. This was followed by a sharp contraction to US$ 154.7 million in 2021, before recovering to US$ 341.2 million in 2022.
- Asset Base Expansion
- Total assets grew monotonically throughout the period, increasing from US$ 1.92 billion in 2018 to US$ 5.39 billion in 2022. A substantial acceleration in asset accumulation occurred between 2019 and 2020, where assets increased by approximately 79%.
- ROA Performance and Efficiency
- The ROA mirrored the fluctuations in net income, shifting from -6.63% in 2018 to a peak of 11.50% in 2020, marking the highest point of asset efficiency. A decline to 3.18% in 2021 indicates that the expansion of the asset base outpaced income growth during that fiscal year. The recovery to 6.33% in 2022 suggests a renewed improvement in the ability to generate profit from the enlarged asset portfolio.
AI Ask an analyst for more
Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
How can I help you?