Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2019 | Jul. 26, 2019 | |
Cover page. | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2019 | |
Document Transition Report | false | |
Entity File Number | 000-51222 | |
Entity Registrant Name | DEXCOM INC | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 33-0857544 | |
Entity Address, Address Line One | 6340 Sequence Drive | |
Entity Address, City or Town | San Diego, | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 92121 | |
City Area Code | 858 | |
Local Phone Number | 200-0200 | |
Title of 12(b) Security | Common Stock, $0.001 Par Value Per Share | |
Trading Symbol | DXCM | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 91,185,989 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q2 | |
Entity Central Index Key | 0001093557 | |
Current Fiscal Year End Date | --12-31 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Millions | Jun. 30, 2019 | Dec. 31, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 709.2 | $ 1,137 |
Short-term marketable securities | 668.3 | 248.6 |
Accounts receivable, net | 217.3 | 226.7 |
Inventory | 117.9 | 70.7 |
Prepaid and other current assets | 31.5 | 16.5 |
Total current assets | 1,744.2 | 1,699.5 |
Property and equipment, net | 253.2 | 183.1 |
Operating lease right-of-use assets | 35.8 | 0 |
Goodwill | 18.7 | 18.7 |
Other assets | 14 | 14.7 |
Total assets | 2,065.9 | 1,916 |
Current liabilities: | ||
Accounts payable and accrued liabilities | 196.7 | 147.1 |
Accrued payroll and related expenses | 73.9 | 72.4 |
Operating lease liabilities, current portion | 14.1 | 0 |
Deferred revenue | 3.5 | 2.9 |
Total current liabilities | 288.2 | 222.4 |
Long-term senior convertible notes | 1,034.7 | 1,010.3 |
Operating lease liabilities, net of current portion | 37.2 | 0 |
Other long-term liabilities | 17.5 | 20 |
Total liabilities | 1,377.6 | 1,252.7 |
Commitments and contingencies | ||
Stockholders’ equity: | ||
Preferred stock, $0.001 par value, 5.0 million shares authorized; no shares issued and outstanding at June 30, 2019 and December 31, 2018 | 0 | 0 |
Common stock, $0.001 par value, 200.0 million shares authorized; 92.0 million and 91.2 million shares issued and outstanding, respectively, at June 30, 2019; and 91.1 million and 90.0 million shares issued and outstanding, respectively, at December 31, 2018 | 0.1 | 0.1 |
Additional paid-in capital | 1,620.4 | 1,560.6 |
Accumulated other comprehensive income | 2 | 1.5 |
Accumulated deficit | (834.2) | (798.9) |
Treasury stock, at cost; 0.8 million shares at June 30, 2019 and December 31, 2018 | (100) | (100) |
Total stockholders’ equity | 688.3 | 663.3 |
Total liabilities and stockholders’ equity | $ 2,065.9 | $ 1,916 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Jun. 30, 2019 | Dec. 31, 2018 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 200,000,000 | 200,000,000 |
Common stock, shares issued | 92,000,000 | 91,100,000 |
Common stock, shares outstanding | 91,200,000 | 90,000,000 |
Treasury Stock, Shares | 800,000 | 800,000 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Income Statement [Abstract] | ||||
Revenues | $ 336.4 | $ 242.5 | $ 616.9 | $ 426.9 |
Cost of sales | 129.9 | 88.9 | 241.6 | 154.4 |
Gross profit | 206.5 | 153.6 | 375.3 | 272.5 |
Operating expenses: | ||||
Research and development | 69 | 47.2 | 128 | 92 |
Selling, general and administrative | 138.3 | 111.3 | 262.5 | 216.1 |
Total operating expenses | 207.3 | 158.5 | 390.5 | 308.1 |
Operating loss | (0.8) | (4.9) | (15.2) | (35.6) |
Interest expense | (15) | (4.8) | (29.9) | (9.6) |
Income (loss) from equity investments | 0 | 42.7 | (4.2) | 50.1 |
Interest and other income (expense), net | 6.5 | (3.4) | 13.4 | 0.7 |
Income (loss) before income taxes | (9.3) | 29.6 | (35.9) | 5.6 |
Income tax expense (benefit) | 1.2 | (0.6) | 1.5 | (0.4) |
Net income (loss) | $ (10.5) | $ 30.2 | $ (37.4) | $ 6 |
Basic net income (loss) per share | $ (0.12) | $ 0.34 | $ (0.41) | $ 0.07 |
Shares used to compute basic net income (loss) per share | 91.1 | 88.2 | 90.7 | 87.7 |
Diluted net income (loss) per share | $ (0.12) | $ 0.34 | $ (0.41) | $ 0.07 |
Shares used to compute diluted net income (loss) per share | 91.1 | 89.4 | 90.7 | 88.8 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income (loss) | $ (10.5) | $ 30.2 | $ (37.4) | $ 6 |
Other comprehensive income (loss), net of income taxes: | ||||
Foreign currency translation gain (loss) | (0.1) | 3.6 | (0.1) | 1.3 |
Unrealized income on marketable debt securities | 0.5 | 0 | 0.6 | 0 |
Total other comprehensive income, net | 0.4 | 3.6 | 0.5 | 1.3 |
Comprehensive income (loss) | $ (10.1) | $ 33.8 | $ (36.9) | $ 7.3 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) shares in Millions, $ in Millions | Total | Common Stock | Additional Paid-In Capital | Accumulated Other Comprehensive Income (Loss) | Accumulated Deficit | Treasury Stock |
Beginning Balance (in shares) at Dec. 31, 2017 | 87 | |||||
Beginning Balance at Dec. 31, 2017 | $ 419.4 | $ 0.1 | $ 1,093.7 | $ (2.6) | $ (671.8) | $ 0 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Issuance of common stock under equity incentive plans (in shares) | 1.3 | |||||
Issuance of common stock under equity incentive plans | 1.1 | 1.1 | ||||
Issuance of common stock for Employee Stock Purchase Plan (in shares) | 0.1 | |||||
Issuance of common stock for Employee Stock Purchase Plan | 4.1 | 4.1 | ||||
Share-based compensation expense | 50.2 | 50.2 | ||||
Net income (loss) | 6 | 6 | ||||
Net loss | 1.3 | 1.3 | ||||
Ending Balance (in shares) at Jun. 30, 2018 | 88.4 | |||||
Ending Balance at Jun. 30, 2018 | 482.1 | $ 0.1 | 1,149.1 | (1.3) | (665.8) | 0 |
Beginning Balance (in shares) at Mar. 31, 2018 | 88.1 | |||||
Beginning Balance at Mar. 31, 2018 | 421.7 | $ 0.1 | 1,122.5 | (4.9) | (696) | 0 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Issuance of common stock under equity incentive plans (in shares) | 0.3 | |||||
Issuance of common stock under equity incentive plans | 1 | 1 | ||||
Issuance of common stock for Employee Stock Purchase Plan | 0 | |||||
Share-based compensation expense | 25.6 | 25.6 | ||||
Net income (loss) | 30.2 | 30.2 | ||||
Net loss | 3.6 | 3.6 | ||||
Ending Balance (in shares) at Jun. 30, 2018 | 88.4 | |||||
Ending Balance at Jun. 30, 2018 | 482.1 | $ 0.1 | 1,149.1 | (1.3) | (665.8) | 0 |
Beginning Balance (in shares) at Dec. 31, 2018 | 90 | |||||
Beginning Balance at Dec. 31, 2018 | 663.3 | $ 0.1 | 1,560.6 | 1.5 | (798.9) | (100) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Issuance of common stock under equity incentive plans (in shares) | 1.1 | |||||
Issuance of common stock under equity incentive plans | 0.3 | 0.3 | ||||
Cumulative-effect adjustment from adoption of new lease accounting standard (Note 2) | 2.1 | |||||
Cumulative-effect adjustment from adoption of new lease accounting standard (Note 2) | Accounting Standards Update 2016-02 | 2.1 | |||||
Issuance of common stock for Employee Stock Purchase Plan (in shares) | 0.1 | |||||
Issuance of common stock for Employee Stock Purchase Plan | 4.8 | 4.8 | ||||
Share-based compensation expense | 54.7 | 54.7 | ||||
Net income (loss) | (37.4) | (37.4) | ||||
Net loss | 0.5 | 0.5 | ||||
Ending Balance (in shares) at Jun. 30, 2019 | 91.2 | |||||
Ending Balance at Jun. 30, 2019 | 688.3 | $ 0.1 | 1,620.4 | 2 | (834.2) | (100) |
Beginning Balance (in shares) at Mar. 31, 2019 | 91 | |||||
Beginning Balance at Mar. 31, 2019 | 668.6 | $ 0.1 | 1,590.6 | 1.6 | (823.7) | (100) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Issuance of common stock under equity incentive plans (in shares) | 0.2 | |||||
Issuance of common stock under equity incentive plans | 0.1 | 0.1 | ||||
Issuance of common stock for Employee Stock Purchase Plan (in shares) | 0 | |||||
Issuance of common stock for Employee Stock Purchase Plan | 0 | 0 | ||||
Share-based compensation expense | 29.7 | 29.7 | ||||
Net income (loss) | (10.5) | (10.5) | ||||
Net loss | 0.4 | 0.4 | ||||
Ending Balance (in shares) at Jun. 30, 2019 | 91.2 | |||||
Ending Balance at Jun. 30, 2019 | $ 688.3 | $ 0.1 | $ 1,620.4 | $ 2 | $ (834.2) | $ (100) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Operating activities | ||
Net income (loss) | $ (37.4) | $ 6 |
Adjustments to reconcile net income (loss) to cash provided by operating activities: | ||
Depreciation and amortization | 21.5 | 12.7 |
Share-based compensation | 54.7 | 50.2 |
Non-cash interest expense | 24.5 | 7.5 |
(Income) loss from equity investments | 4.2 | (50.1) |
Other non-cash income and expenses | (1.9) | 4.7 |
Changes in operating assets and liabilities: | ||
Accounts receivable, net | 9.2 | (28.1) |
Inventory | (47.2) | (1) |
Prepaid and other assets | (3.4) | (5) |
Accounts payable and accrued liabilities | 53.9 | 32.9 |
Accrued payroll and related expenses | 1.6 | (2) |
Deferred revenue and other liabilities | (3.4) | 4.9 |
Net cash provided by operating activities | 76.3 | 32.7 |
Cash flows from investing activities: | ||
Purchase of marketable securities | (934.5) | (224.1) |
Proceeds from sale and maturity of marketable securities | 513.8 | 75.4 |
Purchase of other equity investments | (1.2) | (1) |
Purchase of property and equipment | (86.2) | (25.6) |
Net cash used in investing activities | (508.1) | (175.3) |
Cash flows from financing activities: | ||
Net proceeds from issuance of common stock | 5.1 | 5.2 |
Other financing activities | (0.3) | (1.8) |
Net cash provided by financing activities | 4.8 | 3.4 |
Effect of exchange rate changes on cash, cash equivalents and restricted cash | (0.3) | (1.8) |
Decrease in cash, cash equivalents and restricted cash | (427.3) | (141) |
Cash, cash equivalents and restricted cash, beginning of period | 1,137.1 | 441.5 |
Cash, cash equivalents and restricted cash, end of period | 709.8 | 300.5 |
Reconciliation of cash, cash equivalents and restricted cash, end of period: | ||
Total cash, cash equivalents and restricted cash | 1,137.1 | 441.5 |
Supplemental disclosure of non-cash investing and financing transactions: | ||
Acquisition of property and equipment included in accounts payable and accrued liabilities | 7.1 | 6.3 |
Right-of-use assets obtained in exchange for lease liabilities | $ 55.8 | $ 0 |
Organization and Significant Ac
Organization and Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Significant Accounting Policies | Organization and Significant Accounting Policies Organization and Business DexCom, Inc. is a medical device company focused on the design, development and commercialization of continuous glucose monitoring, or CGM, systems for use by people with diabetes and by healthcare providers. Unless the context requires otherwise, the terms “we,” “us,” “our,” the “company,” or “DexCom” refer to DexCom, Inc. and its subsidiaries. Basis of Presentation and Principles of Consolidation We have prepared the accompanying unaudited consolidated financial statements (the “financial statements”) in accordance with U.S. generally accepted accounting principles, or GAAP, for interim financial information and with the instructions to Form 10-Q and Article 10 of Securities and Exchange Commission, or SEC, Regulation S-X. Accordingly, they do not include all of the information and disclosures required by GAAP for complete financial statements. In the opinion of management, all adjustments, which include only normal recurring adjustments considered necessary for a fair presentation, have been included. Operating results for the three and six months ended June 30, 2019 are not necessarily indicative of the results that may be expected for the year ending December 31, 2019 . We expect that revenues we generate from the sales of our products will fluctuate from quarter to quarter. We experience seasonality that is typical in our industry, with lower sales in the first quarter of each year compared to the fourth quarter of the previous year. These financial statements should be read in conjunction with the audited consolidated financial statements and related notes thereto for the year ended December 31, 2018 included in the Annual Report on Form 10-K that we filed with the SEC on February 21, 2019 . These financial statements include the accounts of DexCom, Inc. and our wholly owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. We have reclassified certain amounts previously reported in our financial statements to conform to the current presentation. Use of Estimates The preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the amounts reported in our financial statements and the disclosures made in the accompanying notes. Despite our intention to establish accurate estimates and use reasonable assumptions, actual results may differ from our estimates. Concentration of Credit Risk and Significant Customers Financial instruments which potentially subject us to concentrations of credit risk consist primarily of cash, cash equivalents, short-term investment securities, and accounts receivable. We limit our exposure to credit risk by placing our cash and investments with high credit quality financial institutions. We have also established guidelines regarding diversification of our investments and their maturities that are designed to maintain principal and maximize liquidity. We review these guidelines periodically and modify them to take advantage of trends in yields and interest rates and changes in our operations and financial position. Two of our distributors are significant customers. Each of them accounted for more than 10% of revenue in each of the past three fiscal years and each of them accounted for more than 10% of accounts receivable as of the end of the past two fiscal years. The following table sets forth the percentage of total revenues that the revenues of Distributor A and Distributor B represented for the periods shown. Three Months Ended Six Months Ended 2019 2018 2019 2018 Distributor A 17 % 17 % 16 % 15 % Distributor B 13 % 15 % 12 % 14 % Distributor A and Distributor B accounted for 20% and 12% , respectively, of our accounts receivable as of June 30, 2019 and for 19% and 15% , respectively, of our accounts receivable as of December 31, 2018 . Revenue Recognition We generate our revenue from the sale of our durable systems and disposable sensors (the Components). Our durable systems include a reusable transmitter and receiver. Disposable sensors are sold separately. We also provide free-of-charge software and mobile applications for use with our durable systems and disposable sensors. The initial durable system price is generally not dependent upon the subsequent purchase of any amount of disposable sensors. We sell our durable systems and disposable sensors through two main sales channels: 1) directly to customers who use our products or organizations (the Direct Channel) and 2) to distribution partners who resell our products (the Distributor Channel). In the Direct Channel, we sell the Components to customers and we receive payment directly from customers, organizations and third-party payors. Third-party payors primarily include commercial insurance companies and federal and state agencies (under Medicare and Medicaid programs). Policy elections and ASC Topic 606 practical expedients taken • We report revenue net of taxes collected from customers, which are subsequently remitted to governmental authorities; • We account for shipping and handling activities that are performed after a customer has obtained control of a good as fulfillment costs rather than as separate performance obligations; • We do not assess whether promised goods or services are performance obligations if they are immaterial in the context of the contract with the customer; and • If we expect, at contract inception, that the period between the transfer of control and corresponding payment from the customer will be one year or less, we do not adjust the amount of consideration for the effects of a significant financing component. Contracts and performance obligations We consider customer purchase orders, which in most cases are governed by agreements with distributors or third-party payors, to be contracts with a customer. For each contract, we consider the obligation to transfer Components to the customer, each of which are distinct, to be separate performance obligations. Components are individually priced and can be purchased separately or bundled in a contract. We also provide free-of-charge software, mobile applications and updates for our DexCom Share ® remote monitoring system. The standalone selling prices of our mobile applications and updates are based on an expected cost plus a margin approach. Transaction price Transaction price for the Components reflects the net consideration to which we expect to be entitled. Transaction price is typically based on contracted rates less any estimates of claim denials and historical reimbursement experience, which would include current and future expectations regarding reimbursement contracts, guidelines and payor mix, and less estimated variable consideration adjustments. Variable consideration Rebates. We estimate reductions to our revenues for rebates paid to payors, healthcare providers and distributors. Rebates are based on contractual arrangements or statutory requirements, which may vary by product, payor and individual payor plans. Our estimates are based on products sold, historical payor mix and, as available, known market events or trends and channel inventory data. We also take into consideration, as available, new information regarding changes in programs’ regulations and guidelines that would impact the amount of the actual rebates and/or our expectations regarding future payor mix for these programs. Product Returns. We generally provide a “ 30 -day money back guarantee” program whereby first-time end-user customers may return the durable system. In accordance with the terms of their distribution agreements, most distributors do not have rights of return outside of our limited warranty. The distributors typically have a limited time frame to notify us of any missing, damaged, defective or non-conforming products. Our returns have historically been immaterial. Revenue recognition We recognize revenue when control is transferred to our customers. The timing of revenue recognition is based on the satisfaction of performance obligations. Substantially all of the performance obligations associated with the Components are satisfied at a point in time, which typically occurs at shipment. Terms of direct and distributor orders are generally Freight on Board (FOB) shipping point for U.S. orders or Free Carrier (FCA) shipping point for international orders. For certain of our distributors, control transfers at delivery of the product to the customer. In cases where our free-of-charge software, mobile applications and updates are deemed to be separate performance obligations, revenue is recognized over time on a ratable basis over the estimated life of the durable system. Our sales of the durable components of our CGM systems include an assurance-type warranty which is accounted for based on the cost accrual method recognized as expense when the products are sold and is not considered a separate performance obligation. See Note 9, “Business Segment and Geographic Information,” for revenues disaggregated by geographic region and by sales channel. Contract balances The timing of revenue recognition, billing and cash collections results in the recording of trade receivables and deferred revenue in our balance sheets. We recognize a receivable in the period in which our right to the consideration is unconditional. We generally do not have any contracts or performance obligations with a term of more than one year. Payment terms vary by contract type and type of customer and generally range from 30 to 90 days. Accounts receivable as of June 30, 2019 and December 31, 2018 included unbilled accounts receivable of $4.6 million and $5.1 million , respectively. Unbilled accounts receivable consist of revenue recognized for Components we have delivered but not yet invoiced to customers. We expect to invoice and collect all unbilled accounts receivable within twelve months. Substantially all of our deferred revenue as of June 30, 2019 is associated with certain of our free-of-charge software and mobile applications and will be recognized during 2019 . The table below shows revenue that we recognized as a result of changes in the contract liability balances in the periods shown. Three Months Ended Six Months Ended (In millions) 2019 2018 2019 2018 Revenue recognized in the period from: Amounts included in contract liabilities at the beginning of the period $ 2.0 $ 2.0 $ 2.6 $ 1.9 Deferred cost of sales Deferred cost of sales are associated with sales for which revenue recognition criteria are not met but product has shipped and released from inventory. These costs are recognized in cost of sales when the associated revenue is recognized. Deferred cost of sales are included in prepaid and other current assets in our balance sheets. Incentive compensation costs We generally expense incentive compensation associated with our internal sales force when incurred because the amortization period for such costs, if capitalized, would have been one year or less. We record these costs in selling, general and administrative expense in our statement of operations. Leases We adopted Accounting Standards Codification Topic 842 (ASC 842) utilizing the modified retrospective transition method at the beginning of the first quarter of 2019. Under ASC 842, w e determine if an arrangement is a lease at inception. We record operating lease right-of-use assets and liabilities based on the present value of the lease payments over the lease term. In determining the present value of the lease payments, we use our incremental borrowing rate at the lease commencement date. We define the initial lease term to include the construction build-out period but to exclude lease extension periods when we are not reasonably certain to exercise our extension option. We record lease expense on a straight-line basis over the expected lease term. Lease costs which are variable and dependent on a rate, an index, or on usage of the asset are expensed in the period they are incurred. We have facilities lease agreements with lease and non-lease components, such as common area maintenance. We generally account for the lease and non-lease components of these agreements as a single lease component. We account for short-term lease expense on a straight-line basis over the lease term. Net Income (Loss) Per Share Basic net income (loss) per share attributable to common stockholders is calculated by dividing the net income (loss) attributable to common stockholders by the weighted-average number of common shares outstanding during the period. Diluted net income (loss) per share is computed using the weighted average number of common shares outstanding during the period and, when dilutive, potential common share equivalents. Common share equivalents that we calculate using the treasury stock method include outstanding stock options and unvested RSUs that are settleable in shares of common stock and potential common shares from convertible securities that we intend to settle using a combination of shares of our common stock and cash. Common share equivalents that we calculate using the if-converted method include potential common shares from convertible securities that we intend to settle using only shares of our common stock. The following table sets forth the computation of basic and diluted net income (loss) per share for the periods shown. Three Months Ended Six Months Ended (In millions) 2019 2018 2019 2018 Net income (loss) $ (10.5 ) $ 30.2 $ (37.4 ) $ 6.0 Net income (loss) per common share: Basic $ (0.12 ) $ 0.34 $ (0.41 ) $ 0.07 Diluted $ (0.12 ) $ 0.34 $ (0.41 ) $ 0.07 Basic weighted average shares outstanding 91.1 88.2 90.7 87.7 Effect of potentially dilutive stock options — 0.2 — 0.3 Effect of potentially dilutive restricted stock units — 1.0 — 0.8 Diluted weighted average shares outstanding 91.1 89.4 90.7 88.8 Outstanding anti-dilutive securities not included in the diluted net income (loss) per share attributable to common stockholders calculations were as follows: Three Months Ended Six Months Ended (In millions) 2019 2018 2019 2018 Options outstanding to purchase common stock — — — — Unvested restricted stock units 2.1 — 2.1 0.4 Senior convertible notes due 2022 4.0 4.0 4.0 4.0 Senior convertible notes due 2023 5.2 — 5.2 — 2023 Warrants 5.2 — 5.2 — Total 16.5 4.0 16.5 4.4 Recent Accounting Guidance Recently Adopted Accounting Pronouncements In February 2016, the FASB issued Accounting Standards Update (ASU) No. 2016-02, Leases (Topic 842) (ASU 2016-02), which requires a lessee to recognize most leases on the balance sheet as lease liabilities with corresponding right-of-use assets. We adopted ASU 2016-02 utilizing the modified retrospective transition method at the beginning of the first quarter of 2019. See Note 2, “Leases,” for more information on the impact of our adoption of ASU 2016-02 and related disclosures. In August 2017, the FASB issued ASU No. 2017-12, Derivatives and Hedging (ASU 2017-12), which is intended to more closely align hedge accounting with companies’ risk management strategies, simplify the application of hedge accounting, and increase transparency regarding the scope and results of hedging programs. The guidance in this update is applied using a cumulative-effect adjustment to retained earnings at the beginning of the fiscal year of adoption. ASU 2017-12 is effective for public business entities for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Our adoption of ASU 2017-12 at the beginning of the first quarter of 2019 did not have a significant impact on our financial statements. Recently Issued Accounting Pronouncements Not Yet Adopted In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments – Credit Losses (ASU 2016-13), which changes the accounting for recognizing impairments of financial assets. Under the new guidance, credit losses for certain types of financial instruments will be estimated based on expected losses. The new guidance also modifies the impairment models for available-for-sale debt securities and for purchased financial assets with credit deterioration since their origination. ASU 2016-13 is effective for public business entities for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years, and early adoption is permitted. We are currently evaluating the impact that this guidance will have on our financial statements. In January 2017, the FASB issued ASU No. 2017-04, Intangibles – Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment (ASU 2017-14). This new guidance eliminates the requirement to calculate the implied fair value of goodwill to measure a goodwill impairment charge. Instead, entities will record an impairment charge based on the excess of a reporting unit’s carrying amount over its fair value. ASU 2017-14 is effective for public business entities for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years, and early adoption is permitted. We are currently evaluating the impact that this guidance will have on our financial statements. In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement: Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement (ASU 2018-13), which adds and modifies certain disclosure requirements for fair value measurements. Under the new guidance, entities will no longer be required to disclose the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy, or valuation processes for Level 3 fair value measurements. However, public business entities will be required to disclose the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements, and related changes in unrealized gains and losses included in other comprehensive income. ASU 2018-13 is effective for public business entities for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years, and early adoption is permitted. We are currently evaluating the impact that this guidance will have on our financial statements. In August 2018, the FASB issued ASU No. 2018-15, Intangibles - Goodwill and Other – Internal-Use Software: Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement that is a Service Contract (ASU 2018-05). This new guidance requires a customer in a cloud computing arrangement to determine which implementation costs to capitalize as assets or expense as incurred. Capitalized implementation costs related to a hosting arrangement that is a service contract will be amortized over the term of the hosting arrangement, beginning when the module or component of the hosting arrangement is ready for its intended use. ASU 2018-05 is effective for public business entities for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years, and early adoption is permitted. Application of this guidance can be applied either prospectively or retrospectively. We are currently evaluating the impact that this guidance will have on our financial statements. |
Leases
Leases | 6 Months Ended |
Jun. 30, 2019 | |
Leases [Abstract] | |
Leases | Leases Impact of Adoption of ASC 842 We adopted ASC 842 utilizing the modified retrospective transition method through a $2.1 million cumulative-effect adjustment to retained earnings at the beginning of the first quarter of 2019. We will continue to report financial information for fiscal years prior to 2019 under the previous lease accounting standards. We elected the package of practical expedients permitted under the transition guidance in the new standard, which allowed us to carry forward the historical classification of leases that were in place as of January 1, 2019. Under the previous lease accounting standards we were deemed the owner of our Mesa, Arizona building during the construction period. As a result of our adoption of ASC 842, we have de-recognized the estimated fair value of the building shell and the related lease liability as of December 31, 2018 and recorded the difference between the asset and liability as an adjustment to retained earnings at the beginning of the first quarter of 2019. In addition, as a result of our adoption of ASC 842 we recorded operating lease right-of-use assets of $26.7 million , finance lease right-of-use assets of $15.3 million , operating lease liabilities of $40.4 million and finance lease liabilities of $15.9 million in our balance sheet at the beginning of the first quarter of 2019, with no material impact to our statement of operations. Operating lease right-of-use assets and liabilities are presented separately in our consolidated balance sheets. Finance lease right-of-use assets are included in property and equipment and finance lease liabilities are included in accounts payable and accrued liabilities and in other long-term liabilities in our consolidated balance sheets. Information About Our Leases Our corporate headquarters and primary manufacturing facilities are located in San Diego, California. We lease approximately 219,000 square feet of space in San Diego under leases that expire in February and March 2022. We have the option to renew each of these leases for two additional five-year terms. In San Diego we also lease approximately 87,000 square feet of space under a lease that expires in February 2022 with no renewal options and approximately 132,600 square feet of space under a sublease that expires in January 2022. We lease approximately 148,800 square feet of space in Mesa, Arizona under a lease that expires in March 2028. We have the option to renew this lease for four additional five-year terms. We have also entered into other domestic and international operating lease agreements, primarily for office and warehouse space, that expire at various times through September 2029. The components of lease expense for the three and six months ended June 30, 2019 were as follows: (In millions) Three Months Ended Six Months Ended Finance lease cost: Amortization of right-of-use assets $ 0.2 $ 0.5 Interest on lease liabilities 0.2 0.4 Operating lease cost 3.1 5.6 Short-term lease cost 0.7 2.0 Variable lease cost (1) 1.2 2.0 Total lease cost $ 5.4 $ 10.5 (1) Variable lease costs are primarily related to common area maintenance charges and property taxes. Other information related to leases was as shown in the table below. All figures include the leases recorded at the beginning of the first quarter of 2019 as a result of our adoption of ASC 842. (Dollars in millions) Three Months Ended Six Months Ended Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 3.5 $ 6.0 Operating cash flows from finance leases $ 0.2 $ 0.4 Financing cash flows from finance leases $ 0.1 $ 0.3 Right-of-use assets obtained in exchange for lease liabilities: Operating leases $ 10.9 $ 40.3 Finance leases $ — $ 15.5 Weighted average remaining lease term in years: Operating leases 4.0 4.0 Finance leases 13.8 13.8 Weighted average discount rate: Operating leases 5.0 % 5.0 % Finance leases 5.0 % 5.0 % Future minimum lease payments under non-cancellable leases as of June 30, 2019 were as shown in the table below. (In millions) Operating Leases Finance Leases 2019 $ 8.3 $ 0.6 2020 16.8 1.3 2021 16.9 1.3 2022 6.0 1.4 2023 4.2 1.4 Thereafter 5.0 15.3 Total future lease cost 57.2 21.3 Less: Amount representing interest (5.4 ) (6.1 ) Present value of future payments 51.8 15.2 Less: Short-term leases not recorded as a liability (0.5 ) — Revised present value of future lease payments 51.3 15.2 Less: Current portion (14.1 ) (0.5 ) Long-term portion $ 37.2 $ 14.7 |
Leases | Leases Impact of Adoption of ASC 842 We adopted ASC 842 utilizing the modified retrospective transition method through a $2.1 million cumulative-effect adjustment to retained earnings at the beginning of the first quarter of 2019. We will continue to report financial information for fiscal years prior to 2019 under the previous lease accounting standards. We elected the package of practical expedients permitted under the transition guidance in the new standard, which allowed us to carry forward the historical classification of leases that were in place as of January 1, 2019. Under the previous lease accounting standards we were deemed the owner of our Mesa, Arizona building during the construction period. As a result of our adoption of ASC 842, we have de-recognized the estimated fair value of the building shell and the related lease liability as of December 31, 2018 and recorded the difference between the asset and liability as an adjustment to retained earnings at the beginning of the first quarter of 2019. In addition, as a result of our adoption of ASC 842 we recorded operating lease right-of-use assets of $26.7 million , finance lease right-of-use assets of $15.3 million , operating lease liabilities of $40.4 million and finance lease liabilities of $15.9 million in our balance sheet at the beginning of the first quarter of 2019, with no material impact to our statement of operations. Operating lease right-of-use assets and liabilities are presented separately in our consolidated balance sheets. Finance lease right-of-use assets are included in property and equipment and finance lease liabilities are included in accounts payable and accrued liabilities and in other long-term liabilities in our consolidated balance sheets. Information About Our Leases Our corporate headquarters and primary manufacturing facilities are located in San Diego, California. We lease approximately 219,000 square feet of space in San Diego under leases that expire in February and March 2022. We have the option to renew each of these leases for two additional five-year terms. In San Diego we also lease approximately 87,000 square feet of space under a lease that expires in February 2022 with no renewal options and approximately 132,600 square feet of space under a sublease that expires in January 2022. We lease approximately 148,800 square feet of space in Mesa, Arizona under a lease that expires in March 2028. We have the option to renew this lease for four additional five-year terms. We have also entered into other domestic and international operating lease agreements, primarily for office and warehouse space, that expire at various times through September 2029. The components of lease expense for the three and six months ended June 30, 2019 were as follows: (In millions) Three Months Ended Six Months Ended Finance lease cost: Amortization of right-of-use assets $ 0.2 $ 0.5 Interest on lease liabilities 0.2 0.4 Operating lease cost 3.1 5.6 Short-term lease cost 0.7 2.0 Variable lease cost (1) 1.2 2.0 Total lease cost $ 5.4 $ 10.5 (1) Variable lease costs are primarily related to common area maintenance charges and property taxes. Other information related to leases was as shown in the table below. All figures include the leases recorded at the beginning of the first quarter of 2019 as a result of our adoption of ASC 842. (Dollars in millions) Three Months Ended Six Months Ended Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 3.5 $ 6.0 Operating cash flows from finance leases $ 0.2 $ 0.4 Financing cash flows from finance leases $ 0.1 $ 0.3 Right-of-use assets obtained in exchange for lease liabilities: Operating leases $ 10.9 $ 40.3 Finance leases $ — $ 15.5 Weighted average remaining lease term in years: Operating leases 4.0 4.0 Finance leases 13.8 13.8 Weighted average discount rate: Operating leases 5.0 % 5.0 % Finance leases 5.0 % 5.0 % Future minimum lease payments under non-cancellable leases as of June 30, 2019 were as shown in the table below. (In millions) Operating Leases Finance Leases 2019 $ 8.3 $ 0.6 2020 16.8 1.3 2021 16.9 1.3 2022 6.0 1.4 2023 4.2 1.4 Thereafter 5.0 15.3 Total future lease cost 57.2 21.3 Less: Amount representing interest (5.4 ) (6.1 ) Present value of future payments 51.8 15.2 Less: Short-term leases not recorded as a liability (0.5 ) — Revised present value of future lease payments 51.3 15.2 Less: Current portion (14.1 ) (0.5 ) Long-term portion $ 37.2 $ 14.7 |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Jun. 30, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements Assets and Liabilities Measured at Fair Value on a Recurring Basis We estimate the fair value of our Level 1 financial instruments, which are in active markets, using unadjusted quoted market prices for identical instruments. We obtain the fair values for our Level 2 financial instruments, which are not in active markets, from a primary professional pricing source that uses quoted market prices for identical or comparable instruments, rather than direct observations of quoted prices in active markets. Fair values obtained from this professional pricing source can also be based on pricing models whereby all significant observable inputs, including maturity dates, issue dates, settlement dates, benchmark yields, reported trades, broker-dealer quotes, issue spreads, benchmark securities, bids, offers or other market-related data, are observable or can be derived from, or corroborated by, observable market data for substantially the full term of the asset. We validate the quoted market prices provided by our primary pricing service by comparing the fair values of our Level 2 marketable securities portfolio balance provided by our primary pricing service against the fair values of our Level 2 marketable securities portfolio balance provided by our investment managers. The following table summarizes financial assets that we measured at fair value on a recurring basis as of June 30, 2019 , classified in accordance with the fair value hierarchy. We sold the equity investment in Tandem Diabetes Care, Inc. that we held as of December 31, 2018 during the first quarter of 2019. Fair Value Measurements Using (In millions) Level 1 Level 2 Level 3 Total Cash equivalents $ 410.7 $ 126.2 $ — $ 536.9 Debt securities, available for sale: U.S. government agencies — 531.6 — 531.6 Commercial paper — 98.9 — 98.9 Corporate debt — 37.8 — 37.8 Total debt securities, available for sale — 668.3 — 668.3 Total assets measured at fair value on a recurring basis $ 410.7 $ 794.5 $ — $ 1,205.2 The following table summarizes financial assets that we measured at fair value on a recurring basis as of December 31, 2018 , classified in accordance with the fair value hierarchy. Fair Value Measurements Using (In millions) Level 1 Level 2 Level 3 Total Cash equivalents $ 199.3 $ 66.7 $ — $ 266.0 Equity investment in Tandem Diabetes Care, Inc. 38.0 — — 38.0 Debt securities, available for sale: U.S. government agencies — 173.1 — 173.1 Commercial paper — 36.2 — 36.2 Corporate debt — 1.3 — 1.3 Total debt securities, available for sale — 210.6 — 210.6 Total assets measured at fair value on a recurring basis $ 237.3 $ 277.3 $ — $ 514.6 There were no transfers between Level 1 and Level 2 securities during the three and six months ended June 30, 2019 and 2018 . There were no transfers into or out of Level 3 securities during the three and six months ended June 30, 2019 and 2018 . We hold certain other investments that we do not measure at fair value on a recurring basis. The carrying values of these investments are not significant and we include them in other assets in our balance sheets. It is impracticable for us to estimate the fair value of these investments on a recurring basis due to the fact that these entities are privately held and limited information is available. We monitor the information that becomes available from time to time and adjust the carrying values of these investments if there are identified events or changes in circumstances that have a significant adverse effect on the fair values. Financial liabilities whose fair values we measure on a recurring basis using Level 1 inputs consist of our outstanding 2022 Notes and 2023 Notes. We measure the fair value of the 2022 Notes and 2023 Notes based on their trading prices. The fair value of the 2022 Notes was $638.3 million as of June 30, 2019 and $540.2 million as of December 31, 2018 . The fair value of the 2023 Notes was $996.9 million as of June 30, 2019 and $859.6 million as of December 31, 2018 . For more information on the carrying values and fair values of our 2022 Notes and 2023 Notes, see Note 5, “Debt.” Foreign Currency and Derivative Financial Instruments From time to time we engage in limited hedging transactions to reduce foreign currency risks on certain intercompany balances. The fair values of these derivatives are based on quoted market prices, which are Level 1 inputs. As of June 30, 2019 , we had no |
Balance Sheet Details
Balance Sheet Details | 6 Months Ended |
Jun. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Balance Sheet Details | Balance Sheet Details Short-Term Marketable Securities Short-term marketable securities, consisting of equity securities and debt securities, were as follows as of the dates indicated. We sold the equity investment in Tandem Diabetes Care, Inc. that we held as of December 31, 2018 during the first quarter of 2019. June 30, 2019 (In millions) Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Market Value Debt securities, available for sale: U.S. government agencies $ 531.2 $ 0.4 $ — $ 531.6 Commercial paper 98.8 0.1 — 98.9 Corporate debt 37.8 — — 37.8 Total debt securities, available for sale 667.8 0.5 — 668.3 Total marketable securities $ 667.8 $ 0.5 $ — $ 668.3 December 31, 2018 (In millions) Cost or Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Market Value Equity investment in Tandem Diabetes Care, Inc. $ 2.0 $ 36.0 $ — $ 38.0 Debt securities, available for sale: U.S. government agencies 173.2 — (0.1 ) 173.1 Commercial paper 36.2 — — 36.2 Corporate debt 1.3 — — 1.3 Total debt securities, available for sale 210.7 — (0.1 ) 210.6 Total marketable securities $ 212.7 $ 36.0 $ (0.1 ) $ 248.6 As of June 30, 2019 and December 31, 2018 , all of our debt securities had contractual maturities of less than 12 months. Gross realized gains and losses on sales of our debt securities during the three and six months ended June 30, 2019 and 2018 were not significant. We periodically review our portfolio of debt securities to determine if any investment is other-than-temporarily impaired due to changes in credit risk or other potential valuation concerns. We believe that the investments we held at June 30, 2019 were not other-than-temporarily impaired. Unrealized losses on available-for-sale debt securities at that date were not significant and were due to changes in interest rates, including market credit spreads, and not due to increased credit risks associated with specific securities. We do not intend to sell these investments and it is not more likely than not that we will be required to sell the investments before recovery of their amortized cost bases, which may be at maturity. Inventory (In millions) June 30, 2019 December 31, 2018 Raw materials $ 58.7 $ 30.8 Work-in-process 11.4 11.2 Finished goods 47.8 28.7 Total inventory $ 117.9 $ 70.7 During the three and six months ended June 30, 2019 we recorded excess and obsolete inventory charges of $1.7 million and $3.3 million , respectively, in cost of goods sold as a result of our ongoing assessment of sales demand and inventory on hand for each product line. During the three and six months ended June 30, 2018 we recorded excess and obsolete inventory charges of $3.5 million and $5.5 million , respectively, in cost of goods sold primarily as a result of the approval and launch of our G6 system and our ongoing assessment of sales demand and inventory on hand for each product line. Property and Equipment (In millions) June 30, 2019 December 31, 2018 Building and land $ 15.5 $ 6.0 Furniture and fixtures 10.0 9.0 Computer software and hardware 33.0 29.2 Machinery and equipment 102.2 80.7 Leasehold improvements 95.4 80.7 Construction in progress 96.1 57.3 Total cost 352.2 262.9 Less accumulated depreciation and amortization (99.0 ) (79.8 ) Total property and equipment, net $ 253.2 $ 183.1 Building and Land. Although we do not legally own these premises, under previous lease accounting standards we were deemed the owner of the construction project during the construction period of our manufacturing facility in Mesa, Arizona under a build-to-suit lease arrangement. As a result of our adoption of ASC 842, we de-recognized the estimated fair value of the building shell that was included in “building and land” in our balance sheet as of December 31, 2018 and the related lease liability and recorded the difference between the asset and liability as an adjustment to retained earnings at the beginning of the first quarter of 2019. The June 30, 2019 balance in “building and land” represents our finance lease right-of-use assets as a result of our adoption of ASC 842. Construction in Progress. The increase in construction in progress as of June 30, 2019 compared to December 31, 2018 is primarily due to continued investment in the expansion and automation of our production capabilities. Accounts Payable and Accrued Liabilities (In millions) June 30, 2019 December 31, 2018 Accounts payable trade $ 97.1 $ 75.5 Accrued tax, audit, and legal fees 16.6 11.7 Accrued rebates 55.3 36.1 Accrued warranty 6.8 6.8 Restructuring reserve 1.8 — Other accrued liabilities 19.1 17.0 Total accounts payable and accrued liabilities $ 196.7 $ 147.1 Accrued Rebates. The increase in the balance of accrued rebates as of June 30, 2019 compared with December 31, 2018 is due to increased sales volume in the pharmacy channel and to a lesser extent to pausing payments pending the outcome of ongoing discussions regarding the terms of one of our rebate agreements. Restructuring Reserve. In February 2019, our Board of Directors approved a restructuring plan that will result in the transition of certain of our operations to the Philippines. We estimate that we will incur total pre-tax charges and costs of approximately $9.0 million , primarily for employee severance benefits under both ongoing and one-time benefit arrangements. We expect to incur these costs throughout 2019 but primarily in the first half of 2019, and we expect the restructuring activities to be substantially complete by the end of 2019. Other Long-Term Liabilities (In millions) June 30, 2019 December 31, 2018 Finance lease liabilities $ 14.7 $ 7.3 Deferred rent — 9.4 Other liabilities 2.8 3.3 Total other long-term liabilities $ 17.5 $ 20.0 Our adoption of ASC 842 during the first quarter of 2019 affected the balances of finance lease liabilities and deferred rent. See Note 2, “Leases,” for more information. |
Debt
Debt | 6 Months Ended |
Jun. 30, 2019 | |
Debt Disclosure [Abstract] | |
Debt | Debt Senior Convertible Notes The following table shows the carrying values, fair values, and if-converted values in excess of principal amounts for each of our senior convertible notes. (In millions) June 30, 2019 December 31, 2018 0.75% Senior Convertible Notes due 2022: Principal amount $ 400.0 $ 400.0 Unamortized debt discount (44.2 ) (51.1 ) Unamortized debt issuance costs (5.5 ) (6.3 ) Net carrying amount of Senior Convertible Notes due 2022 350.3 342.6 0.75% Senior Convertible Notes due 2023: Principal amount 850.0 850.0 Unamortized debt discount (156.1 ) (171.8 ) Unamortized debt issuance costs (9.5 ) (10.5 ) Net carrying amount of Senior Convertible Notes due 2023 684.4 667.7 Total net carrying amount of senior convertible notes $ 1,034.7 $ 1,010.3 Fair value of outstanding senior convertible notes: Senior Convertible Notes due 2022 $ 638.3 $ 540.2 Senior Convertible Notes due 2023 996.9 859.6 Total fair value of outstanding senior convertible notes $ 1,635.2 $ 1,399.8 Amount by which the notes' if-converted value exceeds their principal amount: Senior Convertible Notes due 2022 $ 225.5 $ 125.4 Senior Convertible Notes due 2023 97.0 — Total by which the notes' if-converted value exceeds their principal amount $ 322.5 $ 125.4 The following table summarizes the components of interest expense and the effective interest rates for each of our senior convertible notes for the periods shown. (In millions) Three Months Ended Six Months Ended 2019 2018 2019 2018 Interest expense recognized: 0.75% Senior Convertible Notes due 2022: Contractual coupon interest $ 0.8 $ 0.7 $ 1.5 $ 1.5 Accretion of debt discount 3.4 3.3 6.9 6.6 Amortization of debt issuance costs 0.4 0.4 0.8 0.8 Interest expense recognized on 2022 Notes 4.6 4.4 9.2 8.9 0.75% Senior Convertible Notes due 2023: Contractual coupon interest 1.6 — 3.2 — Accretion of debt discount 7.9 — 15.7 — Amortization of debt issuance costs 0.5 — 1.0 — Interest expense recognized on 2023 Notes 10.0 — 19.9 — Total interest expense recognized on senior notes $ 14.6 $ 4.4 $ 29.1 $ 8.9 Effective interest rates: 0.75% Senior Convertible Notes due 2022 5.1 % 5.1 % 5.1 % 5.1 % 0.75% Senior Convertible Notes due 2023 5.6 % — 5.6 % — The discount on the senior convertible notes due 2022 is being amortized through May 15, 2022 . Interest on the 2022 Notes began accruing upon issuance and is payable semi-annually on May 15 and November 15 of each year. The discount on the senior convertible notes due 2023 is being amortized through December 1, 2023 . Interest on the 2023 Notes began accruing upon issuance and is payable semi-annually on June 1 and December 1 of each year. 0.75% Senior Convertible Notes due 2022 In June 2017, we completed an offering of $400.0 million aggregate principal amount of unsecured senior convertible notes with a stated interest rate of 0.75% and a maturity date of May 15, 2022 (the 2022 Notes). The net proceeds from the offering, after deducting initial purchasers’ discounts and costs directly related to the offering, were approximately $389.0 million . The 2022 Notes may be settled in cash, stock, or a combination thereof, solely at our discretion. It is our current intent and policy to settle all 2022 Notes conversions in shares of our common stock. The initial conversion rate of the 2022 Notes is 10.0918 shares per $1,000 principal amount of notes, which is equivalent to a conversion price of approximately $99.09 per share, subject to adjustments. We use the if-converted method for assumed conversion of the 2022 Notes to compute the weighted average shares of common stock outstanding for diluted earnings per share. Since upon conversion by the holders we may elect to settle such conversion in shares of our common stock, cash, or a combination thereof, we accounted for the cash conversion option as an equity instrument classified to stockholders’ equity. As a result, we recognized $72.6 million in additional paid-in-capital during 2017. In the event of a fundamental change (as defined in the indenture related to the 2022 Notes), holders of the 2022 Notes have the right to require us to repurchase for cash all or a portion of their notes at a price equal to 100% of the principal amount of the 2022 Notes, plus any accrued and unpaid interest. Holders of the 2022 Notes who convert their notes in connection with a make-whole fundamental change (as defined in the indenture) or following the delivery by DexCom of a notice of redemption are, under certain circumstances, entitled to an increase in the conversion rate. Prior to 5:00 p.m., New York City time, on the business day immediately preceding February 15, 2022, holders of the 2022 Notes may convert all or a portion of their notes, in multiples of $ 1,000 principal amount, only under the following circumstances: (1) during any calendar quarter commencing after September 30, 2017 (and only during such calendar quarter), if the last reported sale price of common stock for at least 20 trading days (whether or not consecutive) during the period of 30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the applicable conversion price of the Notes on each such trading day; (2) during the five business day period after any five consecutive trading day period in which the trading price per $ 1,000 principal amount of the Notes for each day of that five day consecutive trading day period was less than 98% of the product of the last reported sale price of common stock and the applicable conversion rate of the Notes on such trading day; (3) if we call any or all of the Notes for redemption, at any time prior to the close on business on the scheduled trading day immediately preceding the redemption date; or (4) upon the occurrence of specified corporate transactions. On or after February 15, 2022 , until 5:00 p.m., New York City time, on the business day immediately preceding the maturity date, holders of the 2022 Notes may convert all or a portion of their notes regardless of the foregoing circumstances. DexCom may not redeem the 2022 Notes prior to May 15, 2020. On or after May 15, 2020, DexCom may redeem for cash all or part of the 2022 Notes, at its option, if the last reported sale price of our common stock has been at least 140% of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period ending on, and including, the trading day immediately preceding the date on which DexCom provides notice of redemption. The redemption price will be equal to 100% of the principal amount of the 2022 Notes to be redeemed plus accrued and unpaid interest to, but excluding, the redemption date. No principal payments are due on the 2022 Notes prior to maturity. Other than restrictions relating to certain fundamental changes and consolidations, mergers or asset sales and customary anti-dilution adjustments, the indenture relating to the 2022 Notes includes customary terms and covenants, including certain events of default after which the 2022 Notes may be due and payable immediately. Circumstance (1) listed above occurred during the quarter ended March 31, 2019. As a result, the 2022 Notes became convertible at the option of the holders from April 1, 2019 and remained convertible until June 30, 2019. Holders of 2022 Notes with an insignificant principal amount exercised their option to convert their 2022 Notes during the second quarter of 2019 and we settled these conversions with shares of our common stock. We continue to classify the carrying value of the liability component of the 2022 Notes as long-term debt, and the equity component of the 2022 Notes as permanent equity in our balance sheet as of June 30, 2019 . 0.75% Senior Convertible Notes due 2023 In November 2018, we completed an offering of $850.0 million aggregate principal amount of unsecured senior convertible notes with a stated interest rate of 0.75% and a maturity date of December 1, 2023 (the 2023 Notes). The net proceeds from the offering, after deducting initial purchasers’ discounts and costs directly related to the offering, were approximately $836.6 million . The 2023 Notes may be settled in cash, stock, or a combination thereof, solely at our discretion. It is our current intent and policy to settle all 2023 Notes conversions through combination settlement, satisfying the principal amount outstanding with cash and any note conversion value in excess of the principal amount in shares of our common stock. The initial conversion rate of the 2023 Notes is 6.0869 shares per $1,000 principal amount of notes, which is equivalent to a conversion price of approximately $164.29 per share, subject to adjustments. We use the treasury stock method for assumed conversion of the 2023 Notes to compute the weighted average shares of common stock outstanding for diluted earnings per share. We entered into transactions for a convertible note hedge (the 2023 Note Hedge) and warrants (the 2023 Warrants) concurrently with the issuance of the 2023 Notes. Since upon conversion by the holders we may elect to settle such conversion in shares of our common stock, cash, or a combination thereof, we accounted for the cash conversion option as an equity instrument classified to stockholders’ equity. As a result, we recognized $174.4 million in additional paid-in capital during 2018. Holders of the 2023 Notes have the right to require us to repurchase for cash all or a portion of their notes at 100% of their principal amount, plus any accrued and unpaid interest, upon the occurrence of a fundamental change (as defined in the indenture relating to the notes). We will also be required to increase the conversion rate for holders who convert their 2023 Notes in connection with certain fundamental changes occurring prior to the maturity date or following the delivery by DexCom of a notice of redemption. Holders of the 2023 Notes may convert all or a portion of their notes at their option prior to 5:00 p.m., New York City time, on the business day immediately preceding September 1, 2023, in multiples of $1,000 principal amount, only under the following circumstances: (1) during any calendar quarter commencing after March 31, 2019 (and only during such calendar quarter), if the last reported sale price of common stock for at least 20 trading days (whether or not consecutive) during the period of 30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the applicable conversion price of the 2023 Notes on each such trading day; (2) during the five business day period after any five consecutive trading day period in which the trading price per $1,000 principal amount of the 2023 Notes for each day of that five -day consecutive trading day period was less than 98% of the product of the last reported sale price of common stock and the applicable conversion rate of the 2023 Notes on such trading day; (3) if we call any or all of the 2023 Notes for redemption, at any time prior to the close of business on the scheduled trading day immediately preceding the redemption date; or (4) upon the occurrence of specified corporate transactions. On or after September 1, 2023 , until 5:00 p.m., New York City time, on the second scheduled trading day immediately preceding the maturity date, holders of the 2023 Notes may convert all or a portion of their notes regardless of the foregoing circumstances. DexCom may not redeem the 2023 Notes prior to December 1, 2021. On or after December 1, 2021 and prior to September 1, 2023, DexCom may redeem for cash all or part of the 2023 Notes, at its option, if the last reported sale price of our common stock has been at least 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period ending on, and including, the trading day immediately preceding the date on which DexCom provides notice of redemption. The redemption price will be equal to 100% of the principal amount of the 2023 Notes to be redeemed plus accrued and unpaid interest to, but excluding, the redemption date. No principal payments are due on the 2023 Notes prior to maturity. Other than restrictions relating to certain fundamental changes and consolidations, mergers or asset sales and customary anti-dilution adjustments, the indenture relating to the 2023 Notes includes customary terms and covenants, including certain events of default after which the 2023 Notes may be due and payable immediately. As of the date of these financial statements, we are unaware of any current events or market conditions that would allow holders to convert the 2023 Notes. 2023 Note Hedge In connection with the offering of the 2023 Notes, in November 2018 we entered into convertible note hedge transactions with two of the initial purchasers of the 2023 Notes (the 2023 Counterparties) entitling us to purchase up to 5.2 million shares of our common stock at an initial price of $164.29 per share, each of which is subject to adjustment. The cost of the 2023 Note Hedge was $218.9 million and we accounted for it as an equity instrument by recognizing $218.9 million in additional paid-in capital during 2018. The 2023 Note Hedge will expire on December 1, 2023 . The 2023 Note Hedge is expected to reduce the potential equity dilution upon any conversion of the 2023 Notes and/or offset any cash payments we are required to make in excess of the principal amount of converted 2023 Notes if the daily volume-weighted average price per share of our common stock exceeds the strike price of the 2023 Note Hedge. The strike price of the 2023 Note Hedge initially corresponds to the conversion price of the 2023 Notes and is subject to certain adjustments under the terms of the 2023 Note Hedge. An assumed exercise of the 2023 Note Hedge by us is considered anti-dilutive since the effect of the inclusion would always be anti-dilutive with respect to the calculation of diluted earnings per share. 2023 Warrants In November 2018, we also sold warrants to the 2023 Counterparties to acquire up to 5.2 million shares of our common stock. The 2023 Warrants require net share settlement and a pro rated number of warrants will expire on each of the 60 scheduled trading days starting on March 1, 2024 . We received $183.8 million in cash proceeds from the sale of the 2023 Warrants, which we recorded in additional paid-in capital during 2018. The 2023 Warrants could have a dilutive effect on our earnings per share to the extent that the price of our common stock during a given measurement period exceeds the strike price of the 2023 Warrants. The strike price of the 2023 Warrants is initially $198.38 per share and is subject to certain adjustments under the terms of the warrant agreements. We use the treasury share method for assumed conversion of the 2023 Warrants when computing the weighted average common shares outstanding for diluted earnings per share. Revolving Credit Agreement In December 2018, we entered into a five-year $200.0 million revolving credit agreement (the Credit Agreement) with JPMorgan Chase Bank, NA, as administrative agent, Bank of America, Silicon Valley Bank, Union Bank and Bank of the West. The Credit Agreement provides a $50.0 million sublimit for borrowings in Canadian Dollars, Euros, British Pounds, Swedish Krona, Japanese Yen and any other currency that is subsequently approved by the lenders and a sub-facility of up to $10.0 million for letters of credit. Subject to customary conditions and the approval of any lender whose commitment would be increased, we have the option to increase the maximum principal amount available under the Credit Agreement by up to an additional $300.0 million , resulting in a maximum available principal amount of $500.0 million . However, at this time none of the lenders have committed to provide any such increase in their commitments. Revolving loans under the Credit Agreement bear interest at our choice of one of two base rates plus a range of applicable margin rates that are based on our leverage ratio. The first base rate is the highest of (a) the publicly announced JPMorgan Chase prime rate, (b) the federal funds rate, or (c) the overnight bank funding rate, and the applicable margin rate ranges from 0.375% to 1.000% . The second base rate is a LIBOR-based rate, and the applicable margin rate ranges from 1.375% to 2.000% . We will also pay a commitment fee of between 0.2% and 0.3% , payable quarterly in arrears, on the average daily unused amount of the revolving facility based on our leverage ratio. The Credit Agreement requires us to maintain a maximum leverage ratio and a minimum fixed charge coverage ratio. We were in compliance with these covenants as of June 30, 2019 . We drew no loans under the Credit Agreement during the three and six months ended June 30, 2019 . As of June 30, 2019 , we had no outstanding borrowings, letters of credit totaling $4.4 million , and a total available balance of $195.6 million under the Credit Agreement. |
Contingencies
Contingencies | 6 Months Ended |
Jun. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingencies | Contingencies Litigation On March 28, 2016, AgaMatrix, Inc., or AgaMatrix, filed a patent infringement lawsuit against us in the United States District Court for the District of Oregon, asserting that certain of our products infringe certain patents held by AgaMatrix. On June 6, 2016, AgaMatrix filed a First Amended Complaint asserting the same three patents. On February 24, 2017, the Court granted AgaMatrix’s motion to substitute WaveForm Technologies, Inc., or WaveForm, as the new plaintiff following AgaMatrix’s transfer of the three patents to its newly formed entity. On August 25, 2016, we filed petitions for inter partes review with the Patent Trial and Appeal Board, or PTAB, of the U.S. Patent and Trademark Office seeking a determination that two of the three asserted patents are invalid under U.S. patent law and those petitions were granted on March 6, 2017. On March 8, 2017, we filed a petition for inter partes review with the PTAB seeking a determination that the third of the three asserted patents is invalid under U.S. patent law. This petition was granted on September 15, 2017. The PTAB issued a Final Written Decision for each of the first two patents on February 28, 2018, where the PTAB found the majority of asserted claims from the first patent unpatentable and the remaining claims under review not unpatentable. The PTAB found all claims under review from the second patent not unpatentable. On April 3, 2019, the Federal Circuit affirmed the PTAB’s finding that certain claims were not unpatentable. The PTAB issued a Final Written Decision for the third patent on September 12, 2018, where the PTAB found all claims of the third patent asserted against us in the District of Oregon litigation unpatentable. WaveForm did not appeal this decision. Most activity in the patent infringement lawsuit against us in the District of Oregon was stayed until the PTAB completed the inter partes review proceedings. That stay was lifted on October 10, 2018. The remaining claims and counterclaims will continue with an estimated date of trial in February 2020. It is our position that Waveform’s assertions of infringement have no merit. We have also filed several lawsuits against AgaMatrix. We filed a patent infringement lawsuit against Agamatrix in the United States District Court for the Central District of California, or C.D. Cal., in which a Final Judgment of non-infringement was entered by the C.D. Cal judge on February 23, 2018 and affirmed on appeal by the Federal Circuit on March 7, 2019. AgaMatrix sought attorneys' fees for this lawsuit, which the C.D. Cal. judge granted and entered on February 22, 2019. As of June 30, 2019 , we have accrued an immaterial amount for those fees. The fee decision is currently on appeal to the Federal Circuit. On September 15, 2017, we filed a patent infringement lawsuit against AgaMatrix in the United States District Court for the District of Delaware, asserting certain single-point blood glucose monitoring products of AgaMatrix infringe two patents held by us. In addition, on September 18, 2017, we filed a Complaint against AgaMatrix in the International Trade Commission, referred to as the ITC, requesting that the ITC institute an investigation and issue an order excluding certain products of AgaMatrix from importation into or sale in the United States based on AgaMatrix’s infringement of the same two patents asserted in the Delaware litigation. The investigation was terminated by the ITC on April 4, 2019 with a finding of non-infringement. On May 31, 2019, we filed a Petition for Review with the United States Court of Appeals for the Federal Circuit appealing the ITC’s termination of the investigation and its finding of non-infringement. On September 14, 2018, AgaMatrix filed two petitions for inter partes review for each of the same two patents we asserted in the District of Delaware and the ITC. The PTAB denied AgaMatrix’s petitions. Neither the outcome of these lawsuits nor the amount and range of potential loss associated with the lawsuits can be assessed at this time. Other than the attorneys’ fees described above, as of June 30, 2019 we have accrued no amounts for contingent losses associated with these suits. We are subject to various claims, complaints and legal actions that arise from time to time in the normal course of business, including commercial insurance, product liability and employment related matters. In addition, from time to time, we may bring claims or initiate lawsuits against various third parties with respect to matters arising out of the ordinary course of our business, including commercial and employment related matters. We do not expect that the resolution of these matters would, or will, have a material adverse effect or material impact on our financial position or results of operations. |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Our effective tax rates for the three and six months ended June 30, 2019 were negative rates of 12.9% and 4.2% , compared to negative rates of 2.0% and 7.1% for the same periods of 2018 . The income tax expense in the current periods is foreign income tax in jurisdictions with current taxable income. No income tax benefit was recorded on losses in jurisdictions where valuation allowances are recorded against net deferred tax assets. We maintain a full valuation allowance against our net deferred tax assets as of June 30, 2019 based on our assessment that it is not more likely than not these future benefits will be realized before expiration. |
Business Segment and Geographic
Business Segment and Geographic Information | 6 Months Ended |
Jun. 30, 2019 | |
Segment Reporting [Abstract] | |
Business Segment and Geographic Information | Business Segment and Geographic Information Reportable Segments An operating segment is identified as a component of a business that has discrete financial information available and for which the chief operating decision maker must decide the level of resource allocation. In addition, the guidance for segment reporting indicates certain quantitative materiality thresholds. We currently consider our operations to be, and manage our business globally within, one reportable segment, which is consistent with how our President and Chief Executive Officer, who is our chief operating decision maker, reviews our business, makes investment and resource allocation decisions, and assesses operating performance. Disaggregation of Revenue DexCom is domiciled in the United States. We sell our durable systems and disposable sensors through a direct sales force in the United States, Canada and some countries in Europe, and through distribution arrangements in the United States, Canada, Australia, New Zealand, and in some countries in Europe, Asia, Latin America, the Middle East and Africa. We disaggregate our revenue from contracts by major sales channel and geography as we believe they best depict how the nature, amount and timing of revenues and cash flows are affected by economic factors. Revenues by geographic region During the three and six months ended June 30, 2019 and 2018 , no country outside of the United States generated revenue that represented more than 10% of our total revenue. The following tables set forth revenues disaggregated by our two primary geographical markets, United States and outside of the United States, based on the geographic location to which we deliver the Components: Three Months Ended Three Months Ended (In millions) Amount % of Total Amount % of Total Revenues: United States $ 266.3 79 % $ 189.6 78 % Outside of the United States 70.1 21 % 52.9 22 % Total revenues $ 336.4 100 % $ 242.5 100 % Six Months Ended Six Months Ended (In millions) Amount % of Total Amount % of Total Revenues: United States $ 476.8 77 % $ 335.0 78 % Outside of the United States 140.1 23 % 91.9 22 % Total revenues $ 616.9 100 % $ 426.9 100 % Revenues by customer sales channel The following tables set forth revenues disaggregated by customer sales channel: Three Months Ended Three Months Ended (In millions) Amount % of Total Amount % of Total Revenues: Distributor $ 221.8 66 % $ 158.4 65 % Direct 114.6 34 % 84.1 35 % Total revenues $ 336.4 100 % $ 242.5 100 % Six Months Ended Six Months Ended (In millions) Amount % of Total Amount % of Total Revenues: Distributor $ 409.6 66 % $ 276.7 65 % Direct 207.3 34 % 150.2 35 % Total revenues $ 616.9 100 % $ 426.9 100 % |
Stockholders' Equity
Stockholders' Equity | 6 Months Ended |
Jun. 30, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Stockholders' Equity | Stockholders’ Equity Share-Based Compensation Expense The following table summarizes share-based compensation expense, net of capitalized amounts, for the periods shown. Three Months Ended Six Months Ended (In millions) 2019 2018 2019 2018 Cost of sales $ 2.4 $ 2.4 $ 4.7 $ 4.6 Research and development 9.2 8.2 17.7 16.7 Selling, general and administrative 18.1 15.0 32.3 28.9 Total share-based compensation expense included in net income (loss) $ 29.7 $ 25.6 $ 54.7 $ 50.2 As of June 30, 2019 , unrecognized estimated compensation costs related to unvested restricted stock units, or RSUs, and performance stock units, or PSUs, totaled $161.7 million and is expected to be recognized through 2022 . Restricted Stock Units A summary of our RSU and PSU activity for the six months ended June 30, 2019 is as follows: Weighted Average Aggregate Grant Date Intrinsic (In millions, except weighted average grant date fair values) Shares Fair Value Value Nonvested at December 31, 2018 2.7 $ 69.19 $ 319.0 Granted 0.6 141.76 Vested (1.1 ) 66.81 Forfeited (0.1 ) 82.19 Nonvested at June 30, 2019 2.1 $ 91.60 $ 320.5 The total vest date fair value of RSUs that vested during the six months ended June 30, 2019 was $149.2 million . No PSUs vested during that period. |
Organization and Summary of Sig
Organization and Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Organization and Business DexCom, Inc. is a medical device company focused on the design, development and commercialization of continuous glucose monitoring, or CGM, systems for use by people with diabetes and by healthcare providers. Unless the context requires otherwise, the terms “we,” “us,” “our,” the “company,” or “DexCom” refer to DexCom, Inc. and its subsidiaries. Basis of Presentation and Principles of Consolidation We have prepared the accompanying unaudited consolidated financial statements (the “financial statements”) in accordance with U.S. generally accepted accounting principles, or GAAP, for interim financial information and with the instructions to Form 10-Q and Article 10 of Securities and Exchange Commission, or SEC, Regulation S-X. Accordingly, they do not include all of the information and disclosures required by GAAP for complete financial statements. In the opinion of management, all adjustments, which include only normal recurring adjustments considered necessary for a fair presentation, have been included. Operating results for the three and six months ended June 30, 2019 are not necessarily indicative of the results that may be expected for the year ending December 31, 2019 . We expect that revenues we generate from the sales of our products will fluctuate from quarter to quarter. We experience seasonality that is typical in our industry, with lower sales in the first quarter of each year compared to the fourth quarter of the previous year. These financial statements should be read in conjunction with the audited consolidated financial statements and related notes thereto for the year ended December 31, 2018 included in the Annual Report on Form 10-K that we filed with the SEC on February 21, 2019 . |
Principles of Consolidation | Basis of Presentation and Principles of Consolidation We have prepared the accompanying unaudited consolidated financial statements (the “financial statements”) in accordance with U.S. generally accepted accounting principles, or GAAP, for interim financial information and with the instructions to Form 10-Q and Article 10 of Securities and Exchange Commission, or SEC, Regulation S-X. Accordingly, they do not include all of the information and disclosures required by GAAP for complete financial statements. In the opinion of management, all adjustments, which include only normal recurring adjustments considered necessary for a fair presentation, have been included. Operating results for the three and six months ended June 30, 2019 are not necessarily indicative of the results that may be expected for the year ending December 31, 2019 . We expect that revenues we generate from the sales of our products will fluctuate from quarter to quarter. We experience seasonality that is typical in our industry, with lower sales in the first quarter of each year compared to the fourth quarter of the previous year. These financial statements should be read in conjunction with the audited consolidated financial statements and related notes thereto for the year ended December 31, 2018 included in the Annual Report on Form 10-K that we filed with the SEC on February 21, 2019 . |
Reclassification | We have reclassified certain amounts previously reported in our financial statements to conform to the current presentation. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the amounts reported in our financial statements and the disclosures made in the accompanying notes. Despite our intention to establish accurate estimates and use reasonable assumptions, actual results may differ from our estimates. |
Concentration of Credit Risk and Significant Customers | Concentration of Credit Risk and Significant Customers Financial instruments which potentially subject us to concentrations of credit risk consist primarily of cash, cash equivalents, short-term investment securities, and accounts receivable. We limit our exposure to credit risk by placing our cash and investments with high credit quality financial institutions. We have also established guidelines regarding diversification of our investments and their maturities that are designed to maintain principal and maximize liquidity. We review these guidelines periodically and modify them to take advantage of trends in yields and interest rates and changes in our operations and financial position. |
Revenue Recognition | Revenue Recognition We generate our revenue from the sale of our durable systems and disposable sensors (the Components). Our durable systems include a reusable transmitter and receiver. Disposable sensors are sold separately. We also provide free-of-charge software and mobile applications for use with our durable systems and disposable sensors. The initial durable system price is generally not dependent upon the subsequent purchase of any amount of disposable sensors. We sell our durable systems and disposable sensors through two main sales channels: 1) directly to customers who use our products or organizations (the Direct Channel) and 2) to distribution partners who resell our products (the Distributor Channel). In the Direct Channel, we sell the Components to customers and we receive payment directly from customers, organizations and third-party payors. Third-party payors primarily include commercial insurance companies and federal and state agencies (under Medicare and Medicaid programs). Policy elections and ASC Topic 606 practical expedients taken • We report revenue net of taxes collected from customers, which are subsequently remitted to governmental authorities; • We account for shipping and handling activities that are performed after a customer has obtained control of a good as fulfillment costs rather than as separate performance obligations; • We do not assess whether promised goods or services are performance obligations if they are immaterial in the context of the contract with the customer; and • If we expect, at contract inception, that the period between the transfer of control and corresponding payment from the customer will be one year or less, we do not adjust the amount of consideration for the effects of a significant financing component. Contracts and performance obligations We consider customer purchase orders, which in most cases are governed by agreements with distributors or third-party payors, to be contracts with a customer. For each contract, we consider the obligation to transfer Components to the customer, each of which are distinct, to be separate performance obligations. Components are individually priced and can be purchased separately or bundled in a contract. We also provide free-of-charge software, mobile applications and updates for our DexCom Share ® remote monitoring system. The standalone selling prices of our mobile applications and updates are based on an expected cost plus a margin approach. Transaction price Transaction price for the Components reflects the net consideration to which we expect to be entitled. Transaction price is typically based on contracted rates less any estimates of claim denials and historical reimbursement experience, which would include current and future expectations regarding reimbursement contracts, guidelines and payor mix, and less estimated variable consideration adjustments. Variable consideration Rebates. We estimate reductions to our revenues for rebates paid to payors, healthcare providers and distributors. Rebates are based on contractual arrangements or statutory requirements, which may vary by product, payor and individual payor plans. Our estimates are based on products sold, historical payor mix and, as available, known market events or trends and channel inventory data. We also take into consideration, as available, new information regarding changes in programs’ regulations and guidelines that would impact the amount of the actual rebates and/or our expectations regarding future payor mix for these programs. Product Returns. We generally provide a “ 30 -day money back guarantee” program whereby first-time end-user customers may return the durable system. In accordance with the terms of their distribution agreements, most distributors do not have rights of return outside of our limited warranty. The distributors typically have a limited time frame to notify us of any missing, damaged, defective or non-conforming products. Our returns have historically been immaterial. Revenue recognition We recognize revenue when control is transferred to our customers. The timing of revenue recognition is based on the satisfaction of performance obligations. Substantially all of the performance obligations associated with the Components are satisfied at a point in time, which typically occurs at shipment. Terms of direct and distributor orders are generally Freight on Board (FOB) shipping point for U.S. orders or Free Carrier (FCA) shipping point for international orders. For certain of our distributors, control transfers at delivery of the product to the customer. In cases where our free-of-charge software, mobile applications and updates are deemed to be separate performance obligations, revenue is recognized over time on a ratable basis over the estimated life of the durable system. Our sales of the durable components of our CGM systems include an assurance-type warranty which is accounted for based on the cost accrual method recognized as expense when the products are sold and is not considered a separate performance obligation. See Note 9, “Business Segment and Geographic Information,” for revenues disaggregated by geographic region and by sales channel. Contract balances The timing of revenue recognition, billing and cash collections results in the recording of trade receivables and deferred revenue in our balance sheets. We recognize a receivable in the period in which our right to the consideration is unconditional. We generally do not have any contracts or performance obligations with a term of more than one year. Payment terms vary by contract type and type of customer and generally range from 30 to 90 days. Accounts receivable as of June 30, 2019 and December 31, 2018 included unbilled accounts receivable of $4.6 million and $5.1 million , respectively. Unbilled accounts receivable consist of revenue recognized for Components we have delivered but not yet invoiced to customers. We expect to invoice and collect all unbilled accounts receivable within twelve months. Substantially all of our deferred revenue as of June 30, 2019 is associated with certain of our free-of-charge software and mobile applications and will be recognized during 2019 . The table below shows revenue that we recognized as a result of changes in the contract liability balances in the periods shown. Three Months Ended Six Months Ended (In millions) 2019 2018 2019 2018 Revenue recognized in the period from: Amounts included in contract liabilities at the beginning of the period $ 2.0 $ 2.0 $ 2.6 $ 1.9 Deferred cost of sales Deferred cost of sales are associated with sales for which revenue recognition criteria are not met but product has shipped and released from inventory. These costs are recognized in cost of sales when the associated revenue is recognized. Deferred cost of sales are included in prepaid and other current assets in our balance sheets. Incentive compensation costs We generally expense incentive compensation associated with our internal sales force when incurred because the amortization period for such costs, if capitalized, would have been one year or less. We record these costs in selling, general and administrative expense in our statement of operations. |
Leases | Leases We adopted Accounting Standards Codification Topic 842 (ASC 842) utilizing the modified retrospective transition method at the beginning of the first quarter of 2019. Under ASC 842, w e determine if an arrangement is a lease at inception. We record operating lease right-of-use assets and liabilities based on the present value of the lease payments over the lease term. In determining the present value of the lease payments, we use our incremental borrowing rate at the lease commencement date. We define the initial lease term to include the construction build-out period but to exclude lease extension periods when we are not reasonably certain to exercise our extension option. We record lease expense on a straight-line basis over the expected lease term. Lease costs which are variable and dependent on a rate, an index, or on usage of the asset are expensed in the period they are incurred. We have facilities lease agreements with lease and non-lease components, such as common area maintenance. We generally account for the lease and non-lease components of these agreements as a single lease component. We account for short-term lease expense on a straight-line basis over the lease term. |
Net Income (Loss) Per Share | Net Income (Loss) Per Share Basic net income (loss) per share attributable to common stockholders is calculated by dividing the net income (loss) attributable to common stockholders by the weighted-average number of common shares outstanding during the period. Diluted net income (loss) per share is computed using the weighted average number of common shares outstanding during the period and, when dilutive, potential common share equivalents. Common share equivalents that we calculate using the treasury stock method include outstanding stock options and unvested RSUs that are settleable in shares of common stock and potential common shares from convertible securities that we intend to settle using a combination of shares of our common stock and cash. Common share equivalents that we calculate using the if-converted method include potential common shares from convertible securities that we intend to settle using only shares of our common stock. |
Recent Accounting Guidance | Recent Accounting Guidance Recently Adopted Accounting Pronouncements In February 2016, the FASB issued Accounting Standards Update (ASU) No. 2016-02, Leases (Topic 842) (ASU 2016-02), which requires a lessee to recognize most leases on the balance sheet as lease liabilities with corresponding right-of-use assets. We adopted ASU 2016-02 utilizing the modified retrospective transition method at the beginning of the first quarter of 2019. See Note 2, “Leases,” for more information on the impact of our adoption of ASU 2016-02 and related disclosures. In August 2017, the FASB issued ASU No. 2017-12, Derivatives and Hedging (ASU 2017-12), which is intended to more closely align hedge accounting with companies’ risk management strategies, simplify the application of hedge accounting, and increase transparency regarding the scope and results of hedging programs. The guidance in this update is applied using a cumulative-effect adjustment to retained earnings at the beginning of the fiscal year of adoption. ASU 2017-12 is effective for public business entities for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Our adoption of ASU 2017-12 at the beginning of the first quarter of 2019 did not have a significant impact on our financial statements. Recently Issued Accounting Pronouncements Not Yet Adopted In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments – Credit Losses (ASU 2016-13), which changes the accounting for recognizing impairments of financial assets. Under the new guidance, credit losses for certain types of financial instruments will be estimated based on expected losses. The new guidance also modifies the impairment models for available-for-sale debt securities and for purchased financial assets with credit deterioration since their origination. ASU 2016-13 is effective for public business entities for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years, and early adoption is permitted. We are currently evaluating the impact that this guidance will have on our financial statements. In January 2017, the FASB issued ASU No. 2017-04, Intangibles – Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment (ASU 2017-14). This new guidance eliminates the requirement to calculate the implied fair value of goodwill to measure a goodwill impairment charge. Instead, entities will record an impairment charge based on the excess of a reporting unit’s carrying amount over its fair value. ASU 2017-14 is effective for public business entities for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years, and early adoption is permitted. We are currently evaluating the impact that this guidance will have on our financial statements. In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement: Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement (ASU 2018-13), which adds and modifies certain disclosure requirements for fair value measurements. Under the new guidance, entities will no longer be required to disclose the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy, or valuation processes for Level 3 fair value measurements. However, public business entities will be required to disclose the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements, and related changes in unrealized gains and losses included in other comprehensive income. ASU 2018-13 is effective for public business entities for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years, and early adoption is permitted. We are currently evaluating the impact that this guidance will have on our financial statements. In August 2018, the FASB issued ASU No. 2018-15, Intangibles - Goodwill and Other – Internal-Use Software: Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement that is a Service Contract (ASU 2018-05). This new guidance requires a customer in a cloud computing arrangement to determine which implementation costs to capitalize as assets or expense as incurred. Capitalized implementation costs related to a hosting arrangement that is a service contract will be amortized over the term of the hosting arrangement, beginning when the module or component of the hosting arrangement is ready for its intended use. ASU 2018-05 is effective for public business entities for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years, and early adoption is permitted. Application of this guidance can be applied either prospectively or retrospectively. We are currently evaluating the impact that this guidance will have on our financial statements. |
Organization and Summary of S_2
Organization and Summary of Significant Accounting Policies (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedules of Concentration of Risk, by Risk Factor | The following table sets forth the percentage of total revenues that the revenues of Distributor A and Distributor B represented for the periods shown. Three Months Ended Six Months Ended 2019 2018 2019 2018 Distributor A 17 % 17 % 16 % 15 % Distributor B 13 % 15 % 12 % 14 % |
Contract with Customer, Asset and Liability | The table below shows revenue that we recognized as a result of changes in the contract liability balances in the periods shown. Three Months Ended Six Months Ended (In millions) 2019 2018 2019 2018 Revenue recognized in the period from: Amounts included in contract liabilities at the beginning of the period $ 2.0 $ 2.0 $ 2.6 $ 1.9 |
Schedule of Earnings Per Share, Basic and Diluted | The following table sets forth the computation of basic and diluted net income (loss) per share for the periods shown. Three Months Ended Six Months Ended (In millions) 2019 2018 2019 2018 Net income (loss) $ (10.5 ) $ 30.2 $ (37.4 ) $ 6.0 Net income (loss) per common share: Basic $ (0.12 ) $ 0.34 $ (0.41 ) $ 0.07 Diluted $ (0.12 ) $ 0.34 $ (0.41 ) $ 0.07 Basic weighted average shares outstanding 91.1 88.2 90.7 87.7 Effect of potentially dilutive stock options — 0.2 — 0.3 Effect of potentially dilutive restricted stock units — 1.0 — 0.8 Diluted weighted average shares outstanding 91.1 89.4 90.7 88.8 |
Outstanding anti-dilutive securities not included in diluted net loss per share | Outstanding anti-dilutive securities not included in the diluted net income (loss) per share attributable to common stockholders calculations were as follows: Three Months Ended Six Months Ended (In millions) 2019 2018 2019 2018 Options outstanding to purchase common stock — — — — Unvested restricted stock units 2.1 — 2.1 0.4 Senior convertible notes due 2022 4.0 4.0 4.0 4.0 Senior convertible notes due 2023 5.2 — 5.2 — 2023 Warrants 5.2 — 5.2 — Total 16.5 4.0 16.5 4.4 |
Leases (Tables)
Leases (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Leases [Abstract] | |
Components of lease expense | The components of lease expense for the three and six months ended June 30, 2019 were as follows: (In millions) Three Months Ended Six Months Ended Finance lease cost: Amortization of right-of-use assets $ 0.2 $ 0.5 Interest on lease liabilities 0.2 0.4 Operating lease cost 3.1 5.6 Short-term lease cost 0.7 2.0 Variable lease cost (1) 1.2 2.0 Total lease cost $ 5.4 $ 10.5 (1) Variable lease costs are primarily related to common area maintenance charges and property taxes. Other information related to leases was as shown in the table below. All figures include the leases recorded at the beginning of the first quarter of 2019 as a result of our adoption of ASC 842. (Dollars in millions) Three Months Ended Six Months Ended Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 3.5 $ 6.0 Operating cash flows from finance leases $ 0.2 $ 0.4 Financing cash flows from finance leases $ 0.1 $ 0.3 Right-of-use assets obtained in exchange for lease liabilities: Operating leases $ 10.9 $ 40.3 Finance leases $ — $ 15.5 Weighted average remaining lease term in years: Operating leases 4.0 4.0 Finance leases 13.8 13.8 Weighted average discount rate: Operating leases 5.0 % 5.0 % Finance leases 5.0 % 5.0 % |
Future minimum lease payments, operating leases | Future minimum lease payments under non-cancellable leases as of June 30, 2019 were as shown in the table below. (In millions) Operating Leases Finance Leases 2019 $ 8.3 $ 0.6 2020 16.8 1.3 2021 16.9 1.3 2022 6.0 1.4 2023 4.2 1.4 Thereafter 5.0 15.3 Total future lease cost 57.2 21.3 Less: Amount representing interest (5.4 ) (6.1 ) Present value of future payments 51.8 15.2 Less: Short-term leases not recorded as a liability (0.5 ) — Revised present value of future lease payments 51.3 15.2 Less: Current portion (14.1 ) (0.5 ) Long-term portion $ 37.2 $ 14.7 |
Future minimum lease payments, finance leases | Future minimum lease payments under non-cancellable leases as of June 30, 2019 were as shown in the table below. (In millions) Operating Leases Finance Leases 2019 $ 8.3 $ 0.6 2020 16.8 1.3 2021 16.9 1.3 2022 6.0 1.4 2023 4.2 1.4 Thereafter 5.0 15.3 Total future lease cost 57.2 21.3 Less: Amount representing interest (5.4 ) (6.1 ) Present value of future payments 51.8 15.2 Less: Short-term leases not recorded as a liability (0.5 ) — Revised present value of future lease payments 51.3 15.2 Less: Current portion (14.1 ) (0.5 ) Long-term portion $ 37.2 $ 14.7 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Value Hierarchy for Financial Assets | The following table summarizes financial assets that we measured at fair value on a recurring basis as of June 30, 2019 , classified in accordance with the fair value hierarchy. We sold the equity investment in Tandem Diabetes Care, Inc. that we held as of December 31, 2018 during the first quarter of 2019. Fair Value Measurements Using (In millions) Level 1 Level 2 Level 3 Total Cash equivalents $ 410.7 $ 126.2 $ — $ 536.9 Debt securities, available for sale: U.S. government agencies — 531.6 — 531.6 Commercial paper — 98.9 — 98.9 Corporate debt — 37.8 — 37.8 Total debt securities, available for sale — 668.3 — 668.3 Total assets measured at fair value on a recurring basis $ 410.7 $ 794.5 $ — $ 1,205.2 The following table summarizes financial assets that we measured at fair value on a recurring basis as of December 31, 2018 , classified in accordance with the fair value hierarchy. Fair Value Measurements Using (In millions) Level 1 Level 2 Level 3 Total Cash equivalents $ 199.3 $ 66.7 $ — $ 266.0 Equity investment in Tandem Diabetes Care, Inc. 38.0 — — 38.0 Debt securities, available for sale: U.S. government agencies — 173.1 — 173.1 Commercial paper — 36.2 — 36.2 Corporate debt — 1.3 — 1.3 Total debt securities, available for sale — 210.6 — 210.6 Total assets measured at fair value on a recurring basis $ 237.3 $ 277.3 $ — $ 514.6 |
Balance Sheet Details (Tables)
Balance Sheet Details (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Short Term Marketable Securities, Available for Sale | Short-Term Marketable Securities Short-term marketable securities, consisting of equity securities and debt securities, were as follows as of the dates indicated. We sold the equity investment in Tandem Diabetes Care, Inc. that we held as of December 31, 2018 during the first quarter of 2019. June 30, 2019 (In millions) Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Market Value Debt securities, available for sale: U.S. government agencies $ 531.2 $ 0.4 $ — $ 531.6 Commercial paper 98.8 0.1 — 98.9 Corporate debt 37.8 — — 37.8 Total debt securities, available for sale 667.8 0.5 — 668.3 Total marketable securities $ 667.8 $ 0.5 $ — $ 668.3 December 31, 2018 (In millions) Cost or Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Market Value Equity investment in Tandem Diabetes Care, Inc. $ 2.0 $ 36.0 $ — $ 38.0 Debt securities, available for sale: U.S. government agencies 173.2 — (0.1 ) 173.1 Commercial paper 36.2 — — 36.2 Corporate debt 1.3 — — 1.3 Total debt securities, available for sale 210.7 — (0.1 ) 210.6 Total marketable securities $ 212.7 $ 36.0 $ (0.1 ) $ 248.6 |
Inventory | Inventory (In millions) June 30, 2019 December 31, 2018 Raw materials $ 58.7 $ 30.8 Work-in-process 11.4 11.2 Finished goods 47.8 28.7 Total inventory $ 117.9 $ 70.7 |
Property, Plant and Equipment | Property and Equipment (In millions) June 30, 2019 December 31, 2018 Building and land $ 15.5 $ 6.0 Furniture and fixtures 10.0 9.0 Computer software and hardware 33.0 29.2 Machinery and equipment 102.2 80.7 Leasehold improvements 95.4 80.7 Construction in progress 96.1 57.3 Total cost 352.2 262.9 Less accumulated depreciation and amortization (99.0 ) (79.8 ) Total property and equipment, net $ 253.2 $ 183.1 |
Accounts Payable and Accrued Liabilities | Accounts Payable and Accrued Liabilities (In millions) June 30, 2019 December 31, 2018 Accounts payable trade $ 97.1 $ 75.5 Accrued tax, audit, and legal fees 16.6 11.7 Accrued rebates 55.3 36.1 Accrued warranty 6.8 6.8 Restructuring reserve 1.8 — Other accrued liabilities 19.1 17.0 Total accounts payable and accrued liabilities $ 196.7 $ 147.1 |
Other Liabilities | Other Long-Term Liabilities (In millions) June 30, 2019 December 31, 2018 Finance lease liabilities $ 14.7 $ 7.3 Deferred rent — 9.4 Other liabilities 2.8 3.3 Total other long-term liabilities $ 17.5 $ 20.0 |
Debt (Tables)
Debt (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of Carrying Values and Estimated Fair Values of Debt Instruments | The following table shows the carrying values, fair values, and if-converted values in excess of principal amounts for each of our senior convertible notes. (In millions) June 30, 2019 December 31, 2018 0.75% Senior Convertible Notes due 2022: Principal amount $ 400.0 $ 400.0 Unamortized debt discount (44.2 ) (51.1 ) Unamortized debt issuance costs (5.5 ) (6.3 ) Net carrying amount of Senior Convertible Notes due 2022 350.3 342.6 0.75% Senior Convertible Notes due 2023: Principal amount 850.0 850.0 Unamortized debt discount (156.1 ) (171.8 ) Unamortized debt issuance costs (9.5 ) (10.5 ) Net carrying amount of Senior Convertible Notes due 2023 684.4 667.7 Total net carrying amount of senior convertible notes $ 1,034.7 $ 1,010.3 Fair value of outstanding senior convertible notes: Senior Convertible Notes due 2022 $ 638.3 $ 540.2 Senior Convertible Notes due 2023 996.9 859.6 Total fair value of outstanding senior convertible notes $ 1,635.2 $ 1,399.8 Amount by which the notes' if-converted value exceeds their principal amount: Senior Convertible Notes due 2022 $ 225.5 $ 125.4 Senior Convertible Notes due 2023 97.0 — Total by which the notes' if-converted value exceeds their principal amount $ 322.5 $ 125.4 |
Schedule of Interest Expense | The following table summarizes the components of interest expense and the effective interest rates for each of our senior convertible notes for the periods shown. (In millions) Three Months Ended Six Months Ended 2019 2018 2019 2018 Interest expense recognized: 0.75% Senior Convertible Notes due 2022: Contractual coupon interest $ 0.8 $ 0.7 $ 1.5 $ 1.5 Accretion of debt discount 3.4 3.3 6.9 6.6 Amortization of debt issuance costs 0.4 0.4 0.8 0.8 Interest expense recognized on 2022 Notes 4.6 4.4 9.2 8.9 0.75% Senior Convertible Notes due 2023: Contractual coupon interest 1.6 — 3.2 — Accretion of debt discount 7.9 — 15.7 — Amortization of debt issuance costs 0.5 — 1.0 — Interest expense recognized on 2023 Notes 10.0 — 19.9 — Total interest expense recognized on senior notes $ 14.6 $ 4.4 $ 29.1 $ 8.9 Effective interest rates: 0.75% Senior Convertible Notes due 2022 5.1 % 5.1 % 5.1 % 5.1 % 0.75% Senior Convertible Notes due 2023 5.6 % — 5.6 % — |
Business Segment and Geograph_2
Business Segment and Geographic Information (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Segment Reporting [Abstract] | |
Revenue from External Customers by Geographic Areas | The following tables set forth revenues disaggregated by our two primary geographical markets, United States and outside of the United States, based on the geographic location to which we deliver the Components: Three Months Ended Three Months Ended (In millions) Amount % of Total Amount % of Total Revenues: United States $ 266.3 79 % $ 189.6 78 % Outside of the United States 70.1 21 % 52.9 22 % Total revenues $ 336.4 100 % $ 242.5 100 % Six Months Ended Six Months Ended (In millions) Amount % of Total Amount % of Total Revenues: United States $ 476.8 77 % $ 335.0 78 % Outside of the United States 140.1 23 % 91.9 22 % Total revenues $ 616.9 100 % $ 426.9 100 % |
Disaggregation of Revenue | The following tables set forth revenues disaggregated by customer sales channel: Three Months Ended Three Months Ended (In millions) Amount % of Total Amount % of Total Revenues: Distributor $ 221.8 66 % $ 158.4 65 % Direct 114.6 34 % 84.1 35 % Total revenues $ 336.4 100 % $ 242.5 100 % Six Months Ended Six Months Ended (In millions) Amount % of Total Amount % of Total Revenues: Distributor $ 409.6 66 % $ 276.7 65 % Direct 207.3 34 % 150.2 35 % Total revenues $ 616.9 100 % $ 426.9 100 % |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Share based compensation expense | Share-Based Compensation Expense The following table summarizes share-based compensation expense, net of capitalized amounts, for the periods shown. Three Months Ended Six Months Ended (In millions) 2019 2018 2019 2018 Cost of sales $ 2.4 $ 2.4 $ 4.7 $ 4.6 Research and development 9.2 8.2 17.7 16.7 Selling, general and administrative 18.1 15.0 32.3 28.9 Total share-based compensation expense included in net income (loss) $ 29.7 $ 25.6 $ 54.7 $ 50.2 |
Restricted Stock Units | Restricted Stock Units A summary of our RSU and PSU activity for the six months ended June 30, 2019 is as follows: Weighted Average Aggregate Grant Date Intrinsic (In millions, except weighted average grant date fair values) Shares Fair Value Value Nonvested at December 31, 2018 2.7 $ 69.19 $ 319.0 Granted 0.6 141.76 Vested (1.1 ) 66.81 Forfeited (0.1 ) 82.19 Nonvested at June 30, 2019 2.1 $ 91.60 $ 320.5 |
Organization and Summary of S_3
Organization and Summary of Significant Accounting Policies - Additional Information (Detail) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2019USD ($) | Jun. 30, 2018USD ($) | Jun. 30, 2019USD ($)customer | Jun. 30, 2018USD ($) | Dec. 31, 2018USD ($) | |
Organization And Summary Of Significant Accounting Policies [Line Items] | |||||
Number of customers | customer | 2 | ||||
Percentage of revenue | 10.00% | ||||
Percentage of accounts receivable | 10.00% | 10.00% | |||
Sales returns coverage period | 30 days | ||||
Unbilled accounts receivable | $ 4.6 | $ 4.6 | $ 5.1 | ||
Deferred revenue recognized | $ 2 | $ 2 | $ 2.6 | $ 1.9 | |
Amortization period for incentive compensation costs | 1 year | ||||
Distributor A | |||||
Organization And Summary Of Significant Accounting Policies [Line Items] | |||||
Percentage of revenue | 17.00% | 17.00% | 16.00% | 15.00% | |
Percentage of accounts receivable | 20.00% | 20.00% | 19.00% | ||
Distributor B | |||||
Organization And Summary Of Significant Accounting Policies [Line Items] | |||||
Percentage of revenue | 13.00% | 15.00% | 12.00% | 14.00% | |
Percentage of accounts receivable | 12.00% | 12.00% | 15.00% |
Organization and Significant _2
Organization and Significant Accounting Policies - Revenue Recognition from Contract with Customers (Details) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019USD ($) | Jun. 30, 2018USD ($) | Jun. 30, 2019USD ($)SalesChannel | Jun. 30, 2018USD ($) | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||
Number of sales channels | SalesChannel | 2 | |||
Deferred revenue recognized | $ | $ 2 | $ 2 | $ 2.6 | $ 1.9 |
Organization and Significant _3
Organization and Significant Accounting Policies - Earnings Per Share, Basic and Diluted (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Net income (loss) | $ (10.5) | $ 30.2 | $ (37.4) | $ 6 |
Net income (loss) per common share: | ||||
Basic (in USD per share) | $ (0.12) | $ 0.34 | $ (0.41) | $ 0.07 |
Diluted (in USD per share) | $ (0.12) | $ 0.34 | $ (0.41) | $ 0.07 |
Basic weighted average shares outstanding (in shares) | 91.1 | 88.2 | 90.7 | 87.7 |
Diluted weighted average shares outstanding (in shares) | 91.1 | 89.4 | 90.7 | 88.8 |
Stock options | ||||
Net income (loss) per common share: | ||||
Effect of potentially dilutive stock options (in shares) | 0 | 0.2 | 0 | 0.3 |
Unvested restricted stock units | ||||
Net income (loss) per common share: | ||||
Effect of potentially dilutive stock options (in shares) | 0 | 1 | 0 | 0.8 |
Organization and Significant _4
Organization and Significant Accounting Policies - Anti-dilutive securities not included in calculation of net loss per share (Details) - shares shares in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from computation of net loss per share | 16.5 | 4 | 16.5 | 4.4 |
Options outstanding to purchase common stock | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from computation of net loss per share | 0 | 0 | 0 | 0 |
Unvested restricted stock units | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from computation of net loss per share | 2.1 | 0 | 2.1 | 0.4 |
2023 Warrants | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from computation of net loss per share | 5.2 | 0 | 5.2 | 0 |
Senior convertible notes due 2022 | Senior convertible notes | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from computation of net loss per share | 4 | 4 | 4 | 4 |
Senior convertible notes due 2023 | Senior convertible notes | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from computation of net loss per share | 5.2 | 0 | 5.2 | 0 |
Leases - Narrative (Details)
Leases - Narrative (Details) $ in Millions | 6 Months Ended | ||
Jun. 30, 2019USD ($)ft²renewal_term | Jan. 01, 2019USD ($) | Dec. 31, 2018USD ($) | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Operating lease right-of-use assets | $ 35.8 | $ 26.7 | $ 0 |
Finance lease right-of-use asset | 15.3 | ||
Operating lease liabilities | 51.8 | 40.4 | |
Finance lease liability | $ 15.2 | 15.9 | |
Accumulated Deficit | Accounting Standards Update 2016-02 | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Cumulative-effect adjustment to retained earnings | $ 2.1 | ||
Building | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Leased square footage | ft² | 87,000 | ||
Lessee leasing arrangements, operating leases, number of renewal terms | renewal_term | 0 | ||
Leased Buildings -6350 Sequence Drive | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Leased square footage | ft² | 132,600 | ||
Leased Buildings -6340 Sequence Drive, 6310 Sequence Drive, 6290 Sequence drive | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Leased square footage | ft² | 219,000 | ||
Lessee leasing arrangements, operating leases, number of renewal terms | renewal_term | 2 | ||
Leased Buildings -232 South Dobson Road | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Leased square footage | ft² | 148,800 | ||
Lessee leasing arrangements, operating leases, number of renewal terms | renewal_term | 4 | ||
Lessee, operating lease, renewal term | 5 years |
Leases - Components of lease ex
Leases - Components of lease expense (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended |
Jun. 30, 2019 | Jun. 30, 2019 | |
Finance lease cost: | ||
Amortization of right-of-use assets | $ 0.2 | $ 0.5 |
Interest on lease liabilities | 0.2 | 0.4 |
Operating lease cost | 3.1 | 5.6 |
Short-term lease cost | 0.7 | 2 |
Variable lease cost | 1.2 | 2 |
Total lease cost | $ 5.4 | $ 10.5 |
Leases - Other information rela
Leases - Other information related to leases (Details) $ in Millions | 3 Months Ended | 6 Months Ended |
Jun. 30, 2019USD ($) | Jun. 30, 2019USD ($) | |
Cash paid for amounts included in the measurement of lease liabilities: | ||
Operating cash flows from operating leases | $ 3.5 | $ 6 |
Operating cash flows from finance leases | 0.2 | 0.4 |
Financing cash flows from finance leases | 0.1 | 0.3 |
Right-of-use assets obtained in exchange for lease liabilities: | ||
Operating leases | 10.9 | 40.3 |
Finance leases | $ 0 | $ 15.5 |
Weighted average remaining lease term in years: | ||
Operating leases | 4 years | 4 years |
Finance leases | 13 years 9 months 18 days | 13 years 9 months 18 days |
Weighted average discount rate: | ||
Operating leases | 5.00% | 5.00% |
Finance leases | 5.00% | 5.00% |
Leases - Future minimum lease p
Leases - Future minimum lease payments under non-cancellable leases (Details) - USD ($) $ in Millions | Jun. 30, 2019 | Jan. 01, 2019 | Dec. 31, 2018 |
Operating Leases | |||
2019 | $ 8.3 | ||
2020 | 16.8 | ||
2021 | 16.9 | ||
2022 | 6 | ||
2023 | 4.2 | ||
Thereafter | 5 | ||
Total future lease cost | 57.2 | ||
Less: Amount representing interest | (5.4) | ||
Present value of future payments | 51.8 | $ 40.4 | |
Less: Short-term leases not recorded as a liability | (0.5) | ||
Revised present value of future lease payments | 51.3 | ||
Less: Current portion | (14.1) | $ 0 | |
Long-term portion | 37.2 | $ 0 | |
Finance Leases | |||
2019 | 0.6 | ||
2020 | 1.3 | ||
2021 | 1.3 | ||
2022 | 1.4 | ||
2023 | 1.4 | ||
Thereafter | 15.3 | ||
Total future lease cost | 21.3 | ||
Less: Amount representing interest | (6.1) | ||
Present value of future payments | 15.2 | $ 15.9 | |
Less: Short-term leases not recorded as a liability | 0 | ||
Revised present value of future lease payments | 15.2 | ||
Less: Current portion | (0.5) | ||
Long-term portion | $ 14.7 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) | Jun. 30, 2019 | Dec. 31, 2018 | Jun. 30, 2018 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Abstract] | |||
Cash equivalents | $ 536,900,000 | $ 266,000,000 | |
Debt securities, available-for-sale | 668,300,000 | 210,600,000 | |
Transfers between Level 1 and Level 2 securities | 0 | $ 0 | |
Transfers into or out of Level 3 securities | 0 | $ 0 | |
Fair Value, Inputs, Level 1 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Abstract] | |||
Cash equivalents | 410,700,000 | 199,300,000 | |
Debt securities, available-for-sale | 0 | 0 | |
Fair Value, Inputs, Level 2 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Abstract] | |||
Cash equivalents | 126,200,000 | 66,700,000 | |
Debt securities, available-for-sale | 668,300,000 | 210,600,000 | |
Fair Value, Inputs, Level 3 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Abstract] | |||
Cash equivalents | 0 | 0 | |
Debt securities, available-for-sale | 0 | 0 | |
U.S. government agencies | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Abstract] | |||
Debt securities, available-for-sale | 531,600,000 | 173,100,000 | |
U.S. government agencies | Fair Value, Inputs, Level 1 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Abstract] | |||
Debt securities, available-for-sale | 0 | 0 | |
U.S. government agencies | Fair Value, Inputs, Level 2 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Abstract] | |||
Debt securities, available-for-sale | 531,600,000 | 173,100,000 | |
U.S. government agencies | Fair Value, Inputs, Level 3 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Abstract] | |||
Debt securities, available-for-sale | 0 | 0 | |
Corporate debt | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Abstract] | |||
Debt securities, available-for-sale | 37,800,000 | 1,300,000 | |
Corporate debt | Fair Value, Inputs, Level 1 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Abstract] | |||
Debt securities, available-for-sale | 0 | 0 | |
Corporate debt | Fair Value, Inputs, Level 2 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Abstract] | |||
Debt securities, available-for-sale | 37,800,000 | 1,300,000 | |
Corporate debt | Fair Value, Inputs, Level 3 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Abstract] | |||
Debt securities, available-for-sale | 0 | 0 | |
Commercial paper | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Abstract] | |||
Debt securities, available-for-sale | 98,900,000 | 36,200,000 | |
Commercial paper | Fair Value, Inputs, Level 1 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Abstract] | |||
Debt securities, available-for-sale | 0 | 0 | |
Commercial paper | Fair Value, Inputs, Level 2 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Abstract] | |||
Debt securities, available-for-sale | 98,900,000 | 36,200,000 | |
Commercial paper | Fair Value, Inputs, Level 3 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Abstract] | |||
Debt securities, available-for-sale | 0 | 0 | |
Equity investment in Tandem Diabetes Care, Inc | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Abstract] | |||
Equity investment in Tandem Diabetes Care, Inc. | 38,000,000 | ||
Equity investment in Tandem Diabetes Care, Inc | Fair Value, Inputs, Level 1 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Abstract] | |||
Equity investment in Tandem Diabetes Care, Inc. | 38,000,000 | ||
Equity investment in Tandem Diabetes Care, Inc | Fair Value, Inputs, Level 2 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Abstract] | |||
Equity investment in Tandem Diabetes Care, Inc. | 0 | ||
Equity investment in Tandem Diabetes Care, Inc | Fair Value, Inputs, Level 3 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Abstract] | |||
Equity investment in Tandem Diabetes Care, Inc. | 0 | ||
Senior Notes | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Abstract] | |||
Fair value of outstanding senior convertible notes: | 1,635,200,000 | 1,399,800,000 | |
Senior convertible notes due 2022 | Senior Notes | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Abstract] | |||
Fair value of outstanding senior convertible notes: | 638,300,000 | 540,200,000 | |
Senior convertible notes due 2023 | Senior Notes | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Abstract] | |||
Fair value of outstanding senior convertible notes: | 996,900,000 | 859,600,000 | |
Foreign Exchange Forward | Designated as Hedging Instrument | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Abstract] | |||
Outstanding currency hedging transactions | 0 | ||
Fair Value, Measurements, Recurring | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Abstract] | |||
Total assets measured at fair value on a recurring basis | 1,205,200,000 | 514,600,000 | |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 1 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Abstract] | |||
Total assets measured at fair value on a recurring basis | 410,700,000 | 237,300,000 | |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 2 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Abstract] | |||
Total assets measured at fair value on a recurring basis | 794,500,000 | 277,300,000 | |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 3 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Abstract] | |||
Total assets measured at fair value on a recurring basis | $ 0 | $ 0 |
Balance Sheet Details - Short T
Balance Sheet Details - Short Term Marketable Securities, Available for Sale (Detail) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | |
Debt securities, available for sale: | |||||
Amortized Cost | $ 667.8 | $ 667.8 | $ 210.7 | ||
Gross Unrealized Gains | 0.5 | 0.5 | 0 | ||
Gross Unrealized Losses | 0 | 0 | (0.1) | ||
Estimated Market Value | 668.3 | 668.3 | 210.6 | ||
Total marketable securities | |||||
Cost or Amortized Cost | 212.7 | ||||
Gross Unrealized Gains | 36 | ||||
Gross Unrealized Losses | (0.1) | ||||
Estimated Market Value | 668.3 | 668.3 | 248.6 | ||
Equity Securities Net Gain | |||||
Net gains recognized during the period on equity securities | 0 | $ 42.7 | (4.2) | $ 50.1 | |
U.S. government agencies | |||||
Debt securities, available for sale: | |||||
Amortized Cost | 531.2 | 531.2 | 173.2 | ||
Gross Unrealized Gains | 0.4 | 0.4 | 0 | ||
Gross Unrealized Losses | 0 | 0 | (0.1) | ||
Estimated Market Value | 531.6 | 531.6 | 173.1 | ||
Commercial paper | |||||
Debt securities, available for sale: | |||||
Amortized Cost | 98.8 | 98.8 | 36.2 | ||
Gross Unrealized Gains | 0.1 | 0.1 | 0 | ||
Gross Unrealized Losses | 0 | 0 | 0 | ||
Estimated Market Value | 98.9 | 98.9 | 36.2 | ||
Corporate debt | |||||
Debt securities, available for sale: | |||||
Amortized Cost | 37.8 | 37.8 | 1.3 | ||
Gross Unrealized Gains | 0 | 0 | 0 | ||
Gross Unrealized Losses | 0 | 0 | 0 | ||
Estimated Market Value | $ 37.8 | $ 37.8 | 1.3 | ||
Equity investment in Tandem Diabetes Care, Inc | |||||
Equity investment in Tandem Diabetes Care, Inc. | |||||
Cost or Amortized Cost | 2 | ||||
Gross Unrealized Gains | 36 | ||||
Gross Unrealized Losses | 0 | ||||
Estimated Market Value | $ 38 |
Balance Sheet Details - Invento
Balance Sheet Details - Inventory (Detail) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Jan. 01, 2019 | Dec. 31, 2018 | |
Finance lease right-of-use asset | $ 15.3 | |||||
Raw materials | $ 58.7 | $ 58.7 | $ 30.8 | |||
Work-in-process | 11.4 | 11.4 | 11.2 | |||
Finished goods | 47.8 | 47.8 | 28.7 | |||
Total inventory | 117.9 | 117.9 | $ 70.7 | |||
Customer Notification Related Inventory Reserve | ||||||
Inventory write-down | $ 1.7 | $ 3.5 | $ 3.3 | $ 5.5 |
Balance Sheet Details - Propert
Balance Sheet Details - Property and Equipment (Details) - USD ($) $ in Millions | Jun. 30, 2019 | Dec. 31, 2018 |
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 352.2 | $ 262.9 |
Less accumulated depreciation and amortization | (99) | (79.8) |
Total property and equipment, net | 253.2 | 183.1 |
Building | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 15.5 | 6 |
Furniture and fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 10 | 9 |
Computer software and hardware | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 33 | 29.2 |
Machinery and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 102.2 | 80.7 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 95.4 | 80.7 |
Construction in progress | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 96.1 | $ 57.3 |
Balance Sheet Details - Account
Balance Sheet Details - Accounts Payable and Accrued Liabilities (Detail) - USD ($) $ in Millions | 5 Months Ended | |
Jun. 30, 2019 | Dec. 31, 2018 | |
Accounts Payable and Accrued Liabilities [Abstract] | ||
Accounts payable trade | $ 97.1 | $ 75.5 |
Accrued tax, audit, and legal fees | 16.6 | 11.7 |
Accrued rebates | 55.3 | 36.1 |
Accrued warranty | 6.8 | 6.8 |
Restructuring reserve | 1.8 | 0 |
Other accrued liabilities | 19.1 | 17 |
Total accounts payable and accrued liabilities | 196.7 | $ 147.1 |
Restructuring charges | $ 9 |
Balance Sheet Details - Other L
Balance Sheet Details - Other Long-Term Liabilities (Details) - USD ($) $ in Millions | Jun. 30, 2019 | Dec. 31, 2018 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Finance lease liabilities | $ 14.7 | $ 7.3 |
Deferred rent | 0 | 9.4 |
Other liabilities | 2.8 | 3.3 |
Total other long-term liabilities | $ 17.5 | $ 20 |
Debt - Schedule of senior conve
Debt - Schedule of senior convertible notes (Details) - USD ($) | 6 Months Ended | ||||
Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | Nov. 30, 2018 | Jun. 30, 2017 | |
Senior Notes [Abstract] | |||||
Net carrying amount of Senior Convertible Notes due 2022 | $ 1,034,700,000 | $ 1,010,300,000 | |||
Senior Notes | |||||
Senior Notes [Abstract] | |||||
Fair value of outstanding senior convertible notes: | 1,635,200,000 | 1,399,800,000 | |||
Amount by which the notes' if-converted value exceeds their principal amount: | 322,500,000 | $ 125,400,000 | |||
Senior Notes | Senior convertible notes due 2022 | |||||
Senior Notes [Abstract] | |||||
Principal amount | 400,000,000 | 400,000,000 | $ 400,000,000 | ||
Unamortized debt discount | (44,200,000) | (51,100,000) | |||
Unamortized debt issuance costs | (5,500,000) | (6,300,000) | |||
Net carrying amount of Senior Convertible Notes due 2022 | 350,300,000 | 342,600,000 | |||
Fair value of outstanding senior convertible notes: | 638,300,000 | 540,200,000 | |||
Amount by which the notes' if-converted value exceeds their principal amount: | 225,500,000 | 125,400,000 | |||
Senior Notes | Senior convertible notes due 2023 | |||||
Senior Notes [Abstract] | |||||
Principal amount | 850,000,000 | 850,000,000 | $ 850,000,000 | ||
Unamortized debt discount | (156,100,000) | (171,800,000) | |||
Unamortized debt issuance costs | (9,500,000) | (10,500,000) | |||
Net carrying amount of Senior Convertible Notes due 2022 | 684,400,000 | 667,700,000 | |||
Fair value of outstanding senior convertible notes: | 996,900,000 | 859,600,000 | |||
Amount by which the notes' if-converted value exceeds their principal amount: | 97,000,000 | $ 0 | |||
Senior Notes | Zero Point Seven Five Percent Senior Convertible Notes | |||||
Senior Notes [Abstract] | |||||
Total net carrying amount of senior convertible notes | $ 1,034,700,000 | $ 1,010,300,000 |
Debt - Schedule of Interest Exp
Debt - Schedule of Interest Expense, Debt (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Debt Instrument [Line Items] | ||||
Accretion of debt discount | $ 24.5 | $ 7.5 | ||
Senior convertible notes due 2022 | ||||
Debt Instrument [Line Items] | ||||
Contractual coupon interest | $ 0.8 | $ 0.7 | 1.5 | 1.5 |
Accretion of debt discount | 3.4 | 3.3 | 6.9 | 6.6 |
Amortization of debt issuance costs | 0.4 | 0.4 | 0.8 | 0.8 |
Total interest expense recognized on senior notes | $ 4.6 | $ 4.4 | $ 9.2 | $ 8.9 |
Effective interest rate | 5.10% | 5.10% | 5.10% | 5.10% |
Senior convertible notes due 2023 | ||||
Debt Instrument [Line Items] | ||||
Contractual coupon interest | $ 1.6 | $ 0 | $ 3.2 | $ 0 |
Accretion of debt discount | 7.9 | 0 | 15.7 | 0 |
Amortization of debt issuance costs | 0.5 | 0 | 1 | 0 |
Total interest expense recognized on senior notes | $ 10 | $ 0 | $ 19.9 | $ 0 |
Effective interest rate | 5.60% | 0.00% | 5.60% | 0.00% |
Senior Notes | Zero Point Seven Five Percent Senior Convertible Notes | ||||
Debt Instrument [Line Items] | ||||
Total interest expense recognized on senior notes | $ 14.6 | $ 4.4 | $ 29.1 | $ 8.9 |
Debt - 0.75% Senior convertible
Debt - 0.75% Senior convertible notes (Details) - Senior Notes | 1 Months Ended | 6 Months Ended | 12 Months Ended | ||
Nov. 30, 2018USD ($)d$ / sharesshares | Jun. 30, 2017USD ($)$ / shares | Jun. 30, 2019USD ($)d | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | |
Senior convertible notes due 2022 | |||||
Debt Instrument [Line Items] | |||||
Interest rate on convertible notes | 0.75% | ||||
Aggregate principal amount | $ 400,000,000 | $ 400,000,000 | $ 400,000,000 | ||
Proceeds from convertible debt | $ 389,000,000 | ||||
Initial conversion price of convertible notes (in dollars per share) | $ / shares | $ 99.09 | ||||
Conversion price in event of fundamental change | 100.00% | ||||
Conversion multiple | $ 1,000 | ||||
Conversion percentage based on last reported sale price | 140.00% | ||||
Debt instrument, redemption price, percentage | 100.00% | ||||
Senior convertible notes due 2023 | |||||
Debt Instrument [Line Items] | |||||
Interest rate on convertible notes | 0.75% | ||||
Aggregate principal amount | $ 850,000,000 | $ 850,000,000 | 850,000,000 | ||
Proceeds from convertible debt | $ 836,600,000 | ||||
Debt instrument, convertible, conversion ratio | 0.0060869 | 0.0100918 | |||
Initial conversion price of convertible notes (in dollars per share) | $ / shares | $ 164.29 | ||||
Conversion price in event of fundamental change | 100.00% | ||||
Conversion multiple | $ 1,000 | ||||
Threshold consecutive trading days | d | 60 | ||||
Conversion percentage based on last reported sale price | 130.00% | ||||
Debt instrument, redemption price, percentage | 100.00% | ||||
Warrants sold to counterparties | shares | 5,200,000 | ||||
Proceeds from issuance of warrants | $ 183,800,000 | ||||
Strike price of warrant | $ / shares | $ 198.38 | ||||
Additional Paid-In Capital | Senior convertible notes due 2022 | |||||
Debt Instrument [Line Items] | |||||
Amount reclassified to stockholders' equity | $ 72,600,000 | ||||
Additional Paid-In Capital | Senior convertible notes due 2023 | |||||
Debt Instrument [Line Items] | |||||
Amount reclassified to stockholders' equity | $ 174,400,000 | ||||
Term of at least 20 trading days during a period of 30 consecutive trading days | Minimum | Senior convertible notes due 2022 | |||||
Debt Instrument [Line Items] | |||||
Threshold consecutive trading days | d | 20 | ||||
Threshold percentage of stock price trigger | 130.00% | ||||
Term of at least 20 trading days during a period of 30 consecutive trading days | Minimum | Senior convertible notes due 2023 | |||||
Debt Instrument [Line Items] | |||||
Threshold consecutive trading days | d | 20 | ||||
Threshold percentage of stock price trigger | 130.00% | ||||
Term of at least 20 trading days during a period of 30 consecutive trading days | Maximum | Senior convertible notes due 2022 | |||||
Debt Instrument [Line Items] | |||||
Threshold consecutive trading days | d | 30 | ||||
Term of at least 20 trading days during a period of 30 consecutive trading days | Maximum | Senior convertible notes due 2023 | |||||
Debt Instrument [Line Items] | |||||
Threshold consecutive trading days | d | 30 | ||||
Term of five business day period after any five consecutive trading day period | Senior convertible notes due 2022 | |||||
Debt Instrument [Line Items] | |||||
Threshold consecutive trading days | d | 5 | ||||
Term of five business day period after any five consecutive trading day period | Senior convertible notes due 2023 | |||||
Debt Instrument [Line Items] | |||||
Threshold consecutive trading days | d | 5 | ||||
Term of five business day period after any five consecutive trading day period | Maximum | Senior convertible notes due 2022 | |||||
Debt Instrument [Line Items] | |||||
Threshold consecutive trading days | d | 5 | ||||
Threshold percentage of stock price trigger | 98.00% | ||||
Term of five business day period after any five consecutive trading day period | Maximum | Senior convertible notes due 2023 | |||||
Debt Instrument [Line Items] | |||||
Threshold consecutive trading days | d | 5 | ||||
Threshold percentage of stock price trigger | 98.00% | ||||
Designated as Hedging Instrument | Senior convertible notes due 2023 | |||||
Debt Instrument [Line Items] | |||||
Convertible note hedge, number of shares | shares | 5,200,000 | ||||
Cost of convertible note hedge recognized in additional paid-in capital | $ 218,900,000 |
Debt - Revolving Credit Agreeme
Debt - Revolving Credit Agreement (Details) - USD ($) | 1 Months Ended | |
Dec. 31, 2018 | Jun. 30, 2019 | |
Line of Credit Facility [Line Items] | ||
Line of credit, current | $ 0 | |
Line of credit facility, remaining borrowing capacity | 195,600,000 | |
Letter of Credit | ||
Line of Credit Facility [Line Items] | ||
Long-term line of credit | $ 4,400,000 | |
Foreign Currency Line of Credit | Letter of Credit | ||
Line of Credit Facility [Line Items] | ||
Line of credit facility, maximum borrowing capacity | $ 50,000,000 | |
Line of Credit | ||
Line of Credit Facility [Line Items] | ||
Debt Instrument, Term | 5 years | |
Long-term line of credit | $ 200,000,000 | |
Line of credit facility, maximum borrowing capacity | 500,000,000 | |
Line of Credit | Letter of Credit | ||
Line of Credit Facility [Line Items] | ||
Line of credit facility, maximum borrowing capacity | 10,000,000 | |
Amount of option to increase the maximum available principal | $ 300,000,000 | |
Minimum | Line of Credit | ||
Line of Credit Facility [Line Items] | ||
Debt instrument, interest rate, stated percentage | 0.375% | |
Line of credit facility, unused capacity, commitment fee percentage | 0.20% | |
Maximum | Line of Credit | ||
Line of Credit Facility [Line Items] | ||
Debt instrument, interest rate, stated percentage | 1.00% | |
Line of credit facility, unused capacity, commitment fee percentage | 0.30% | |
London Interbank Offered Rate (LIBOR) | Minimum | Line of Credit | ||
Line of Credit Facility [Line Items] | ||
Margin on variable rate | 1.375% | |
London Interbank Offered Rate (LIBOR) | Maximum | Line of Credit | ||
Line of Credit Facility [Line Items] | ||
Margin on variable rate | 2.00% |
Contingencies - Litigation (Det
Contingencies - Litigation (Details) | Sep. 14, 2018number_patentsPetition | Feb. 28, 2018number_patents | Sep. 15, 2017number_patents | Mar. 08, 2017number_patents | Feb. 24, 2017number_patents | Aug. 25, 2016number_patents | Jun. 06, 2016number_patents | Jun. 30, 2019USD ($) |
Loss Contingencies [Line Items] | ||||||||
Loss contingencies, patents allegedly infringed, number of inter partes review requested | Petition | 2 | |||||||
Loss contingency accrual | $ | $ 0 | |||||||
AgaMatrix | ||||||||
Loss Contingencies [Line Items] | ||||||||
Loss contingency, patents allegedly infringed, number | 3 | |||||||
Loss contingencies, patents allegedly infringed, number of inter partes review requested | 2 | |||||||
WaveForm Technologies, Inc. | ||||||||
Loss Contingencies [Line Items] | ||||||||
Loss contingency, patents allegedly infringed, number transferred to new plaintiff | 3 | |||||||
Loss contingencies, patents allegedly infringed, number of inter partes review requested | 2 | 3 | 2 | |||||
AgaMatrix | ||||||||
Loss Contingencies [Line Items] | ||||||||
Gain contingency, patents allegedly infringed upon, number | 2 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Income Tax Disclosure [Abstract] | ||||
Effective tax rate | (12.90%) | (2.00%) | (4.20%) | (7.10%) |
Tax benefit for refunds of foreign withholding tax, partially offset by state and foreign tax expense | $ 0 |
Business Segment and Geograph_3
Business Segment and Geographic Information - Additional Information (Detail) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019USD ($) | Jun. 30, 2018USD ($) | Jun. 30, 2019USD ($)Geographical_Marketsegment | Jun. 30, 2018USD ($) | |
Disaggregation of Revenue [Line Items] | ||||
Number of reportable segments | segment | 1 | |||
Number of primary geographical markets | Geographical_Market | 2 | |||
Revenues | $ 336.4 | $ 242.5 | $ 616.9 | $ 426.9 |
Revenue, percentage | 100.00% | 100.00% | 100.00% | 100.00% |
United States | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | $ 266.3 | $ 189.6 | $ 476.8 | $ 335 |
Revenue, percentage | 79.00% | 78.00% | 77.00% | 78.00% |
Outside of the United States | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | $ 70.1 | $ 52.9 | $ 140.1 | $ 91.9 |
Revenue, percentage | 21.00% | 22.00% | 23.00% | 22.00% |
Distributor | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | $ 221.8 | $ 158.4 | $ 409.6 | $ 276.7 |
Revenue, percentage | 66.00% | 65.00% | 66.00% | 65.00% |
Direct | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | $ 114.6 | $ 84.1 | $ 207.3 | $ 150.2 |
Revenue, percentage | 34.00% | 35.00% | 34.00% | 35.00% |
Stockholders' Equity - Share-Ba
Stockholders' Equity - Share-Based Compensation Expense (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Total share-based compensation expense included in net income (loss) | $ 29.7 | $ 25.6 | $ 54.7 | $ 50.2 |
Unrecognized estimated compensation costs | 161.7 | 161.7 | ||
Cost of Sales | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Total share-based compensation expense included in net income (loss) | 2.4 | 2.4 | 4.7 | 4.6 |
Research and Development Expense | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Total share-based compensation expense included in net income (loss) | 9.2 | 8.2 | 17.7 | 16.7 |
Selling General And Administrative | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Total share-based compensation expense included in net income (loss) | $ 18.1 | $ 15 | $ 32.3 | $ 28.9 |
Stockholders' Equity - Restrict
Stockholders' Equity - Restricted Stock Units (Details) - USD ($) $ / shares in Units, shares in Millions | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2019 | Dec. 31, 2018 | |
Unvested restricted stock units | |||
Shares | |||
Nonvested beginning balance (in shares) | 2.1 | 2.1 | 2.7 |
Granted | 0.6 | ||
Vested | (1.1) | ||
Forfeited | (0.1) | ||
Nonvested ending balance (in shares) | 2.1 | ||
Weighted Average Grant Date Fair Value | |||
Weighted average grant date fair value (in dollars per share) | $ 91.60 | $ 69.19 | |
Granted | $ 141.76 | ||
Vested | 66.81 | ||
Forfeited | $ 82.19 | ||
Aggregate intrinsic value | $ 320,500,000 | $ 319,000,000 | |
Total vest date fair value | $ 149,200,000 | ||
Performance Shares | |||
Weighted Average Grant Date Fair Value | |||
Total vest date fair value | $ 0 |
Uncategorized Items - dxcm-2019
Label | Element | Value |
Restricted Cash | us-gaap_RestrictedCash | $ 600,000 |
Restricted Cash | us-gaap_RestrictedCash | $ 300,000 |