Cover Page
Cover Page - shares | 6 Months Ended | |
Jun. 30, 2020 | Jul. 21, 2020 | |
Cover [Abstract] | ||
Amendment Flag | false | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q2 | |
Entity Central Index Key | 0001093557 | |
Current Fiscal Year End Date | --12-31 | |
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2020 | |
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, $0.001 Par Value Per Share | |
Trading Symbol | DXCM | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 95,742,207 |
Consolidated Balance Sheets (Un
Consolidated Balance Sheets (Unaudited) - USD ($) $ in Millions | Jun. 30, 2020 | Dec. 31, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 530 | $ 446.2 |
Short-term marketable securities | 1,978.8 | 1,087.1 |
Accounts receivable, net | 296.5 | 286.3 |
Inventory | 165.3 | 119.8 |
Prepaid and other current assets | 62.4 | 30 |
Total current assets | 3,033 | 1,969.4 |
Property and equipment, net | 384.3 | 321.3 |
Operating lease right-of-use assets | 71.6 | 71.5 |
Goodwill | 18.7 | 18.6 |
Other assets | 14.2 | 14.2 |
Total assets | 3,521.8 | 2,395 |
Current liabilities: | ||
Accounts payable and accrued liabilities | 315.9 | 256.4 |
Accrued payroll and related expenses | 67.4 | 88.5 |
Operating lease liabilities, current portion | 15.1 | 13.6 |
Deferred revenue | 1.7 | 1.7 |
Total current liabilities | 400.1 | 360.2 |
Long-term senior convertible notes | 1,658.8 | 1,059.7 |
Operating lease liabilities, net of current portion | 73.7 | 72.4 |
Other long-term liabilities | 35.3 | 20.1 |
Total liabilities | 2,167.9 | 1,512.4 |
Commitments and contingencies | ||
Stockholders’ equity: | ||
Preferred stock, $0.001 par value, 5.0 million shares authorized; no shares issued and outstanding at June 30, 2020 and December 31, 2019 | 0 | 0 |
Common stock, $0.001 par value, 200.0 million shares authorized; 96.2 million and 95.4 million shares issued and outstanding, respectively, at June 30, 2020; and 92.4 million and 91.6 million shares issued and outstanding, respectively, at December 31, 2019 | 0.1 | 0.1 |
Additional paid-in capital | 2,079.8 | 1,675.9 |
Accumulated other comprehensive income | 3.5 | 2.3 |
Accumulated deficit | (629.5) | (695.7) |
Treasury stock, at cost; 0.8 million shares at June 30, 2020 and December 31, 2019 | (100) | (100) |
Total stockholders’ equity | 1,353.9 | 882.6 |
Total liabilities and stockholders’ equity | $ 3,521.8 | $ 2,395 |
Consolidated Balance Sheets (_2
Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares | Jun. 30, 2020 | Dec. 31, 2019 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (USD per share) | $ 0.001 | $ 0.001 |
Preferred stock authorized (shares) | 5,000,000 | 5,000,000 |
Preferred stock issued (shares) | 0 | 0 |
Preferred stock outstanding (shares) | 0 | 0 |
Common stock, par value (USD per share) | $ 0.001 | $ 0.001 |
Common stock authorized (shares) | 200,000,000 | 200,000,000 |
Common stock issued (shares) | 96,200,000 | 92,400,000 |
Common stock outstanding (shares) | 95,400,000 | 91,600,000 |
Treasury stock (shares) | 800,000 | 800,000 |
Consolidated Statements of Oper
Consolidated Statements of Operations (Unaudited) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Income Statement [Abstract] | ||||
Revenues | $ 451.8 | $ 336.4 | $ 856.9 | $ 616.9 |
Cost of sales | 167.7 | 129.9 | 316.3 | 241.6 |
Gross profit | 284.1 | 206.5 | 540.6 | 375.3 |
Operating expenses: | ||||
Research and development | 79.9 | 69 | 153 | 128 |
Selling, general and administrative | 136.4 | 138.3 | 286.2 | 262.5 |
Total operating expenses | 216.3 | 207.3 | 439.2 | 390.5 |
Operating income (loss) | 67.8 | (0.8) | 101.4 | (15.2) |
Interest expense | (20.3) | (15) | (35.7) | (29.9) |
Loss on extinguishment of debt | (5.4) | 0 | (5.4) | 0 |
Loss from equity investments | 0 | 0 | 0 | (4.2) |
Interest and other income, net | 4.1 | 6.5 | 8.3 | 13.4 |
Income (loss) before income taxes | 46.2 | (9.3) | 68.6 | (35.9) |
Income tax expense (benefit) | (0.1) | 1.2 | 2.4 | 1.5 |
Net income (loss) | $ 46.3 | $ (10.5) | $ 66.2 | $ (37.4) |
Basic net income (loss) per share (USD per share) | $ 0.49 | $ (0.12) | $ 0.71 | $ (0.41) |
Shares used to compute basic net income (loss) per share (shares) | 93.8 | 91.1 | 92.8 | 90.7 |
Diluted net income (loss) per share (USD per share) | $ 0.48 | $ (0.12) | $ 0.69 | $ (0.41) |
Shares used to compute diluted net income (loss) per share (shares) | 97 | 91.1 | 95.6 | 90.7 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Loss) (Unaudited) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income (loss) | $ 46.3 | $ (10.5) | $ 66.2 | $ (37.4) |
Other comprehensive income (loss), net of tax: | ||||
Translation adjustments and other | 0.5 | (0.1) | (0.2) | (0.1) |
Unrealized gain (loss) on marketable debt securities | (0.7) | 0.5 | 1.4 | 0.6 |
Total other comprehensive income (loss), net of tax | (0.2) | 0.4 | 1.2 | 0.5 |
Comprehensive income (loss) | $ 46.1 | $ (10.1) | $ 67.4 | $ (36.9) |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity (Unaudited) - USD ($) shares in Millions, $ in Millions | Total | Adjustment | Common Stock | Additional Paid-In Capital | Accumulated Other Comprehensive Income (Loss) | Accumulated Deficit | Accumulated DeficitAdjustment | Treasury Stock |
Balance at beginning of period (shares) at Dec. 31, 2018 | 90 | |||||||
Balance at beginning of period at Dec. 31, 2018 | $ 663.3 | $ 2.1 | $ 0.1 | $ 1,560.6 | $ 1.5 | $ (798.9) | $ 2.1 | $ (100) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Issuance of common stock under equity incentive plans (shares) | 1.1 | |||||||
Issuance of common stock under equity incentive plans | 0.3 | 0.3 | ||||||
Issuance of common stock for Employee Stock Purchase Plan (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) | ||||||
Other comprehensive income (loss) | 0.5 | 0.5 | ||||||
Balance at end of period (shares) at Jun. 30, 2019 | 91.2 | |||||||
Balance at end of period at Jun. 30, 2019 | 688.3 | $ 0.1 | 1,620.4 | 2 | (834.2) | (100) | ||
Balance at beginning of period (shares) at Mar. 31, 2019 | 91 | |||||||
Balance at beginning of period 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 (shares) | 0.2 | |||||||
Issuance of common stock under equity incentive plans | 0.1 | 0.1 | ||||||
Share-based compensation expense | 29.7 | 29.7 | ||||||
Net income (loss) | (10.5) | (10.5) | ||||||
Other comprehensive income (loss) | 0.4 | 0.4 | ||||||
Balance at end of period (shares) at Jun. 30, 2019 | 91.2 | |||||||
Balance at end of period at Jun. 30, 2019 | 688.3 | $ 0.1 | 1,620.4 | 2 | (834.2) | (100) | ||
Balance at beginning of period (shares) at Dec. 31, 2019 | 91.6 | |||||||
Balance at beginning of period at Dec. 31, 2019 | 882.6 | $ 0.1 | 1,675.9 | 2.3 | (695.7) | (100) | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Issuance of common stock under equity incentive plans (shares) | 0.8 | |||||||
Issuance of common stock under equity incentive plans | 0.3 | 0.3 | ||||||
Issuance of common stock for Employee Stock Purchase Plan | 6.4 | 6.4 | ||||||
Equity component of 2025 Notes issuance, net of issuance costs | 289.4 | 289.4 | ||||||
Repurchase and conversions of 2022 Notes, net of tax (shares) | 3 | |||||||
Repurchase and conversions of 2022 Notes, net of tax | 53.2 | 53.2 | ||||||
Share-based compensation expense | 54.6 | 54.6 | ||||||
Net income (loss) | 66.2 | 66.2 | ||||||
Other comprehensive income (loss) | 1.2 | 1.2 | ||||||
Balance at end of period (shares) at Jun. 30, 2020 | 95.4 | |||||||
Balance at end of period at Jun. 30, 2020 | 1,353.9 | $ 0.1 | 2,079.8 | 3.5 | (629.5) | (100) | ||
Balance at beginning of period (shares) at Mar. 31, 2020 | 92.3 | |||||||
Balance at beginning of period at Mar. 31, 2020 | 934.5 | $ 0.1 | 1,706.5 | 3.7 | (675.8) | (100) | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Issuance of common stock under equity incentive plans (shares) | 0.1 | |||||||
Equity component of 2025 Notes issuance, net of issuance costs | 289.4 | 289.4 | ||||||
Repurchase and conversions of 2022 Notes, net of tax (shares) | 3 | |||||||
Repurchase and conversions of 2022 Notes, net of tax | 53.2 | 53.2 | ||||||
Share-based compensation expense | 30.7 | 30.7 | ||||||
Net income (loss) | 46.3 | 46.3 | ||||||
Other comprehensive income (loss) | (0.2) | (0.2) | ||||||
Balance at end of period (shares) at Jun. 30, 2020 | 95.4 | |||||||
Balance at end of period at Jun. 30, 2020 | $ 1,353.9 | $ 0.1 | $ 2,079.8 | $ 3.5 | $ (629.5) | $ (100) |
Consolidated Statements of St_2
Consolidated Statements of Stockholders' Equity (Unaudited) (Parenthetical) | 6 Months Ended |
Jun. 30, 2019 | |
Statement of Stockholders' Equity [Abstract] | |
Accounting Standards Update | us-gaap:AccountingStandardsUpdate201602Member |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Operating activities | ||
Net income (loss) | $ 66.2 | $ (37.4) |
Adjustments to reconcile net income (loss) to cash provided by operating activities: | ||
Depreciation and amortization | 28.3 | 21.5 |
Share-based compensation | 54.6 | 54.7 |
Loss on extinguishment of debt | 5.4 | 0 |
Non-cash interest expense | 30.3 | 24.5 |
Realized loss on equity investment | 0 | 4.2 |
Other non-cash income and expenses | 3.5 | (1.9) |
Changes in operating assets and liabilities: | ||
Accounts receivable, net | (10.4) | 9.2 |
Inventory | (45.5) | (47.2) |
Prepaid and other assets | (26.6) | (2.3) |
Operating lease right-of-use assets and liabilities, net | (1.2) | (1.1) |
Accounts payable and accrued liabilities | 56.8 | 53.9 |
Accrued payroll and related expenses | (20.8) | 1.6 |
Deferred revenue and other liabilities | 15.4 | (3.4) |
Net cash provided by operating activities | 156 | 76.3 |
Cash flows from investing activities: | ||
Purchases of marketable securities | (1,740) | (934.5) |
Proceeds from sale and maturity of marketable securities | 849.5 | 513.8 |
Purchases of property and equipment | (91.4) | (86.2) |
Other investing activities | (2.8) | (1.2) |
Net cash used in investing activities | (984.7) | (508.1) |
Cash flows from financing activities: | ||
Proceeds from issuance of convertible notes, net of issuance costs | 1,188.8 | 0 |
Repurchase of convertible notes | (282.6) | 0 |
Net proceeds from issuance of common stock | 6.7 | 5.1 |
Other financing activities | (0.4) | (0.3) |
Net cash provided by financing activities | 912.5 | 4.8 |
Effect of exchange rate changes on cash, cash equivalents and restricted cash | (0.2) | (0.3) |
Increase (decrease) in cash, cash equivalents and restricted cash | 83.6 | (427.3) |
Cash, cash equivalents and restricted cash, beginning of period | 446.4 | 1,137.1 |
Cash, cash equivalents and restricted cash, end of period | 530 | 709.8 |
Reconciliation of cash, cash equivalents and restricted cash, end of period: | ||
Total cash, cash equivalents and restricted cash | 530 | 709.8 |
Supplemental disclosure of non-cash investing and financing transactions: | ||
Common stock issued for repurchase and conversions of senior convertible notes | 1,190 | 0 |
Acquisition of property and equipment included in accounts payable and accrued liabilities | 17 | 7.1 |
Right-of-use assets obtained in exchange for lease liabilities | $ 5.3 | $ 55.8 |
Organization and Significant Ac
Organization and Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Significant Accounting Policies | 1. Organization and Significant Accounting Policies Organization and Business DexCom, Inc. is a medical device company that develops and markets continuous glucose monitoring, or CGM, systems for the management of diabetes by patients, caregivers, and clinicians around the world. 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 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, 2020 are not necessarily indicative of the results that may be expected for the year ending December 31, 2020 . 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 consolidated financial statements should be read in conjunction with the audited consolidated financial statements and related notes thereto for the year ended December 31, 2019 included in the Annual Report on Form 10-K that we filed with the SEC on February 13, 2020 . These consolidated financial statements include the accounts of DexCom, Inc. and our wholly owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. The functional currencies of our international subsidiaries are generally the local currencies. We translate the financial statements of our foreign subsidiaries into U.S. dollars using period-end exchange rates for assets and liabilities and average exchange rates for each period for revenue, costs and expenses. We include translation-related adjustments in comprehensive income (loss) and in accumulated other comprehensive income in the equity section of our consolidated balance sheets. Gains and losses resulting from certain intercompany transactions as well as transactions with customers and vendors that are denominated in currencies other than the functional currency of each entity give rise to foreign exchange gains or losses that we record in interest and other income, net in our consolidated statements of operations. Use of Estimates The preparation of consolidated financial statements in conformity with GAAP requires us to make certain estimates and assumptions that affect the amounts reported in our consolidated financial statements and the disclosures made in the accompanying notes. Areas requiring significant estimates include transaction price, net accounts receivable, excess or obsolete inventories and the valuation of inventory, and accruals for litigation contingencies. Despite our intention to establish accurate estimates and use reasonable assumptions, actual results may differ from our estimates. Accounts Receivable and Allowance for Doubtful Accounts Accounts receivable are generally recorded at the invoiced amount for distributors and at net realizable value for direct customers, which is determined using estimates of claim denials and historical reimbursement experience without regard to aging category. Accounts receivable are not interest bearing. We evaluate the creditworthiness of significant customers based on historical trends, the financial condition of our customers, and external market factors. We generally do not require collateral from our customers. We maintain an allowance for doubtful accounts for potential credit losses. Uncollectable accounts are written off against the allowance after appropriate collection efforts have been exhausted and when it is deemed that a customer account is uncollectable. Generally, receivable balances greater than one year past due are deemed uncollectable. Concentration of Credit Risk Financial instruments which potentially subject us to concentrations of credit risk consist primarily of cash, cash equivalents, short-term marketable 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 We generate our revenue from the sale of our reusable transmitter and receiver, collectively referred to as Reusable Hardware and disposable sensors . We refer to Reusable Hardware and disposable sensors in this section as Components . Policy Elections • 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. We also provide free-of-charge software, mobile applications and updates for our DexCom Share ® remote monitoring system. The standalone selling prices of our free-of-charge software, mobile applications and updates are estimated 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 the contracted rates less an estimate of claim denials and historical reimbursement experience by payor, which include current and future expectations regarding reimbursement rates and payor mix. Variable Consideration Rebates. We estimate reductions for rebates based on contractual arrangements, estimates of products sold subject to rebate, known events or trends and channel inventory data. Product Returns. 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. We generally provide a “ 30 -day money back guarantee” program whereby first-time end-user customers may return Reusable Hardware . Product returns have historically been immaterial. Revenue Recognition The timing of revenue recognition is based on the satisfaction of performance obligations. Substantially all of the performance obligations associated with our Components are satisfied at a point in time, which typically occurs at shipment of our products. 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 sales transactions, 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 related Reusable Hardware component. Our sales of Components include an assurance-type warranty. Judgments and Estimates In determining how revenue should be recognized, a five-step process is used, which requires judgment and estimates that can have a significant impact on the amount and timing of revenue we report. These judgments and estimates include identifying performance obligations in the contract, determining whether the performance obligations are separate, allocating the transaction price to each separate performance obligation, determining the timing of revenue recognition for separate performance obligations and estimating the amount of variable consideration to include in the transaction price. Contract Balances Contract balances represent amounts presented in our consolidated balance sheets when either we have transferred goods or services to the customer or the customer has paid consideration to us under the contract. These contract balances include accounts receivable and deferred revenue. Payment terms vary by contract type and type of customer and generally range from 30 to 90 days. Accounts receivable as of June 30, 2020 included unbilled accounts receivable of $7.2 million . Unbilled accounts receivable consists 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 12 months. We record deferred revenue when we have entered into a contract with a customer and cash payments are received or due prior to transfer of control or satisfaction of the related performance obligation. 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) 2020 2019 2020 2019 Revenue recognized in the period from: Amounts included in contract liabilities at the beginning of the period $ 0.8 $ 2.0 $ 1.3 $ 2.6 Our performance obligations are generally satisfied within 12 months of the initial contract date. The deferred revenue balance related to performance obligations that will be satisfied after 12 months was $5.4 million as of June 30, 2020 and $2.1 million as of December 31, 2019 , and is included in other long-term liabilities in our consolidated balance sheets. 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. Deferred cost of sales are included in prepaid and other current assets in our consolidated 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 consolidated statements of operations. 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. Potentially dilutive common shares consist of shares issuable from restricted stock units, warrants, and our senior convertible notes. Potentially dilutive common shares issuable upon vesting of restricted stock units and exercise of warrants are determined using the average share price for each period under the treasury stock method. Potentially dilutive common shares issuable upon conversion of our senior convertible notes are determined using the if-converted method. 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) 2020 2019 2020 2019 Net income (loss) $ 46.3 $ (10.5 ) $ 66.2 $ (37.4 ) Net income (loss) per common share Basic $ 0.49 $ (0.12 ) $ 0.71 $ (0.41 ) Diluted $ 0.48 $ (0.12 ) $ 0.69 $ (0.41 ) Basic weighted average shares outstanding 93.8 91.1 92.8 90.7 Dilutive potential common stock outstanding: Restricted stock units 0.9 — 1.1 — Warrants 2.3 — 1.7 — Senior convertible notes — — — — Diluted weighted average shares outstanding 97.0 91.1 95.6 90.7 In periods of net losses, we exclude potentially dilutive common shares from the computation of the diluted net loss per share for those periods as the effect would be anti-dilutive. 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) 2020 2019 2020 2019 Restricted stock units — 2.1 0.1 2.1 Warrants 2.9 5.2 3.5 5.2 Senior convertible notes 8.7 9.2 9.0 9.2 Total 11.6 16.5 12.6 16.5 Recent Accounting Guidance Recently Adopted Accounting Pronouncements In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses: Measurement of Credit Losses on Financial Instruments , which amends the impairment model by requiring entities to use a forward-looking approach based on expected losses to estimate credit losses on certain types of financial instruments, including trade receivables and available-for-sale debt securities. This update is effective for annual periods beginning after December 15, 2019, and interim periods within those periods, and early adoption is permitted. Our adoption of ASU 2016-13 at the beginning of the first quarter of 2020 did not have a significant impact on our consolidated financial statements. We are continuing to monitor the impact of the novel strain of coronavirus, SARS-CoV-2 (“COVID-19”) outbreak on expected credit losses. In January 2017, the FASB issued ASU No. 2017-04, Intangibles – Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment (ASU 2017-04). 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 2017-04 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. Our adoption of ASU 2017-04 at the beginning of the first quarter of 2020 did not have a significant impact on our consolidated 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. Our adoption of ASU 2018-13 at the beginning of the first quarter of 2020 did not have a significant impact on our consolidated 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 2018-15). 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 2018-15 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 adopted the new standard on January 1, 2020 on a prospective basis. Our adoption of ASU 2018-15 at the beginning of the first quarter of 2020 did not have a significant impact on our consolidated financial statements, however, the adoption of the standard resulted in an increase in capitalized assets related to qualifying cloud computing arrangement implementation costs incurred after the adoption date. Recently Issued Accounting Pronouncements Not Yet Adopted In December 2019, the FASB issued ASU No. 2019-12, Simplifying the Accounting for Income Taxes, which is intended to simplify various aspects of the income tax accounting guidance, including requirements such as tax basis step-up in goodwill obtained in a transaction that is not a business combination, ownership changes in investments, and interim-period accounting for enacted changes in tax law. ASU 2019-12 is effective for public business entities for fiscal years beginning after December 15, 2020, 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 consolidated financial statements. |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Jun. 30, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | 2. 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 date, 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, 2020 , classified in accordance with the fair value hierarchy: Fair Value Measurements Using (In millions) Level 1 Level 2 Level 3 Total Cash equivalents $ 402.6 $ — $ — $ 402.6 Debt securities, available for sale: U.S. government agencies — 1,600.2 — 1,600.2 Commercial paper — 295.3 — 295.3 Corporate debt — 83.3 — 83.3 Total debt securities, available for sale — 1,978.8 — 1,978.8 Other assets (1) 2.4 — — 2.4 Total assets measured at fair value on a recurring basis $ 405.0 $ 1,978.8 $ — $ 2,383.8 (1) Includes assets which are held pursuant to a deferred compensation plan for senior management, which consist mainly of mutual funds. The following table summarizes financial assets that we measured at fair value on a recurring basis as of December 31, 2019 , classified in accordance with the fair value hierarchy: Fair Value Measurements Using (In millions) Level 1 Level 2 Level 3 Total Cash equivalents $ 110.1 $ 144.9 $ — $ 255.0 Debt securities, available for sale: U.S. government agencies — 676.0 — 676.0 Commercial paper — 248.2 — 248.2 Corporate debt — 162.9 — 162.9 Total debt securities, available for sale — 1,087.1 — 1,087.1 Other assets (1) 0.7 — — 0.7 Total assets measured at fair value on a recurring basis $ 110.8 $ 1,232.0 $ — $ 1,342.8 (1) Includes assets which are held pursuant to a deferred compensation plan for senior management, which consist mainly of mutual funds. There were no transfers between Level 1 and Level 2 securities during the three and six months ended June 30, 2020 and 2019 . There were no transfers into or out of Level 3 securities during the three and six months ended June 30, 2020 and 2019 . 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 consolidated 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 often 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. Fair Value of Senior Convertible Notes The fair value, based on trading prices (Level 1), of our senior convertible notes were as follows as of the dates indicated: Fair Value Measurements Using Level 1 (In millions) June 30, 2020 December 31, 2019 Senior Convertible Notes due 2022 $ 151.9 $ 890.8 Senior Convertible Notes due 2023 2,108.2 1,260.0 Senior Convertible Notes due 2025 1,239.2 * Total fair value of outstanding senior convertible notes $ 3,499.3 $ 2,150.8 * Not Applicable For more information on the carrying values of our senior convertible notes , see Note 4, “Debt.” Foreign Currency and Derivative Financial Instruments From time to time we engage in limited hedging transactions to reduce foreign currency risks. The fair values of these derivatives are based on quoted market prices, which are Level 1 inputs, and the derivative instruments are recorded in current assets or current liabilities in our consolidated balance sheets consistent with the nature of the instrument at period end. Derivative gains and losses are included in interest and other income, net in our consolidated statements of operations. As of June 30, 2020 and December 31, 2019 , notional amounts of $25.0 million and $8.0 million , respectively, were outstanding to hedge certain foreign currency risk. The resulting impact from the hedging activity on our consolidated financial statements was not significant for the periods presented. Our foreign currency exposures vary but are primarily concentrated in the British Pound, the Euro, and the Canadian Dollar. We monitor the costs and the impact of foreign currency risks upon our financial results as part of our risk management program. We do not use derivative financial instruments for speculation or trading purposes or for activities other than risk management. We do not require and are not required to pledge collateral for these financial instruments and we do not carry any master netting arrangements to mitigate the credit risk. Assets and Liabilities Measured at Fair Value on a Non-Recurring Basis Certain non-financial assets and liabilities are measured at fair value, usually with Level 3 inputs including the discounted cash flow method or cost method, on a nonrecurring basis in accordance with authoritative guidance. These include items such as non-financial assets and liabilities initially measured at fair value in a business combination and non-financial long-lived assets measured at fair value for an impairment assessment. In general, non-financial assets, including goodwill, intangible assets and property and equipment, are measured at fair value when there is an indication of impairment and are recorded at fair value only when any impairment is recognized. We recorded no significant impairment losses during the three and six months ended June 30, 2020 and 2019 . |
Balance Sheet Details
Balance Sheet Details | 6 Months Ended |
Jun. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Balance Sheet Details | 3. 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: June 30, 2020 (In millions) Amortized Gross Gross Estimated Debt securities, available for sale: U.S. government agencies $ 1,598.7 $ 1.6 $ (0.1 ) $ 1,600.2 Commercial paper 295.3 0.2 (0.2 ) $ 295.3 Corporate debt 83.1 0.2 — $ 83.3 Total debt securities, available for sale $ 1,977.1 $ 2.0 $ (0.3 ) $ 1,978.8 December 31, 2019 (In millions) Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Market Value Debt securities, available for sale: U.S. government agencies $ 675.6 $ 0.4 $ — $ 676.0 Commercial paper 248.1 0.1 — 248.2 Corporate debt 163.0 — (0.1 ) 162.9 Total debt securities, available for sale $ 1,086.7 $ 0.5 $ (0.1 ) $ 1,087.1 As of June 30, 2020 and December 31, 2019 , 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, 2020 and 2019 were not significant. We periodically review our portfolio of debt securities to determine if any investment is impaired due to credit loss or other potential valuation concerns. For the debt securities where the fair value of the investment is less than the amortized cost basis, we have assessed at the individual security level for various quantitative factors including, but not limited to, the nature of the investments, changes in credit ratings, interest rate fluctuations, industry analyst reports, and the severity of impairment. Unrealized losses on available-for-sale debt securities as of June 30, 2020 were not significant and were primarily due to changes in interest rates, including market credit spreads, and not due to increased credit risks associated with specific securities. Accordingly, we have no t recorded an allowance for credit losses. 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 Inventory was as follows as of the dates indicated: (In millions) June 30, 2020 December 31, 2019 Raw materials $ 59.1 $ 64.9 Work-in-process 15.0 11.1 Finished goods 91.2 43.8 Total inventory $ 165.3 $ 119.8 During the three and six months ended June 30, 2020 , we recorded excess and obsolete inventory charges of $1.7 million and $6.8 million , respectively, in cost of sales as a result of our ongoing assessment of sales demand, inventory on hand for each product and the continuous improvement and innovation of our products. 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 sales primarily as a result of our ongoing assessment of sales demand and inventory on hand. Property and Equipment Property and equipment was as follows as of the dates indicated: (In millions) June 30, 2020 December 31, 2019 Building and land (1) $ 15.5 $ 15.5 Furniture and fixtures 13.0 12.8 Computer software and hardware 33.0 32.7 Machinery and equipment 165.2 130.2 Leasehold improvements 120.7 102.5 Construction in progress 158.2 132.6 Total cost 505.6 426.3 Less accumulated depreciation and amortization (121.3 ) (105.0 ) Total property and equipment, net $ 384.3 $ 321.3 (1 ) Represents our finance lease right-of-use assets. Accounts Payable and Accrued Liabilities Accounts payable and accrued liabilities were as follows as of the dates indicated: (In millions) June 30, 2020 December 31, 2019 Accounts payable trade $ 108.4 $ 102.3 Accrued tax, audit, and legal fees 21.4 14.0 Accrued rebates 147.5 93.3 Accrued warranty 9.3 7.4 Other accrued liabilities 29.3 39.4 Total accounts payable and accrued liabilities $ 315.9 $ 256.4 Other Long-Term Liabilities Other long-term liabilities were as follows as of the dates indicated: (In millions) June 30, 2020 December 31, 2019 Finance lease obligations $ 14.0 $ 14.4 Contractual obligations 12.6 — Other liabilities 8.7 5.7 Total other liabilities $ 35.3 $ 20.1 |
Debt
Debt | 6 Months Ended |
Jun. 30, 2020 | |
Debt Disclosure [Abstract] | |
Debt | 4. Debt Senior Convertible Notes The carrying amounts of our senior convertible notes were as follows as of the dates indicated: (In millions) June 30, 2020 December 31, 2019 Principal amount: Senior Convertible Notes due 2022 $ 37.2 $ 400.0 Senior Convertible Notes due 2023 850.0 850.0 Senior Convertible Notes due 2025 1,207.5 — Total principal amount 2,094.7 1,250.0 Unamortized debt discount (414.2 ) (177.2 ) Unamortized debt issuance costs (21.7 ) (13.1 ) Carrying amount of liability component $ 1,658.8 $ 1,059.7 Carrying amount of equity component $ 467.7 $ 242.2 Remaining amortization period of debt discount on the liability component: Senior Convertible Notes due 2022 1.9 years 2.5 years Senior Convertible Notes due 2023 3.4 years 4.0 years Senior Convertible Notes due 2025 5.4 years * * Not Applicable For our senior convertible notes for which the if-converted value exceeded the principal amount, the amount in excess of principal is as follows as of the dates indicated: (In millions) June 30, 2020 December 31, 2019 Senior Convertible Notes due 2022 $ 115.0 $ 486.2 Senior Convertible Notes due 2023 1,272.8 372.4 Total by which the notes ’ if-converted value exceeds their principal amount $ 1,387.8 $ 858.6 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. Three Months Ended Six Months Ended (Dollars in millions) 2020 2019 2020 2019 Cash interest expense: Contractual coupon interest (1) $ 2.4 $ 2.4 $ 4.7 $ 4.7 Non-cash interest expense: Accretion of debt discount 16.5 11.3 28.3 22.6 Amortization of debt issuance costs 1.1 0.9 2.0 1.8 Total interest expense recognized on senior notes $ 20.0 $ 14.6 $ 35.0 $ 29.1 Effective interest rates: Senior Convertible Notes due 2022 5.1 % 5.1 % 5.1 % 5.1 % Senior Convertible Notes due 2023 5.6 % 5.6 % 5.6 % 5.6 % Senior Convertible Notes due 2025 5.5 % * 5.5 % * (1) Interest on the 2022 Notes began accruing upon issuance and is payable semi-annually on May 15 and November 15 of each year. Interest on the 2023 Notes began accruing upon issuance and is payable semi-annually on June 1 and December 1 of each year. Interest on the 2025 Notes began accruing upon issuance and is payable semi-annually on May 15 and November 15 of each year. * Not Applicable 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 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. The 2022 Notes may be settled in cash, stock, or a combination thereof, solely at our discretion. 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. 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. Conversion Rights at the Option of the Holders 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 DexCom’s 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 2022 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 2022 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 DexCom’s 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. Circumstance (1) listed above occurred during the quarter ended June 30, 2020 . On June 29, 2020, DexCom issued a notice of redemption to the holders of its outstanding 2022 Notes which is described below. Conversion Rights at Our Option On or after May 15, 2020, DexCom may redeem for cash all or part of the remaining 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. Repurchase, Conversion, and Redemption of 2022 Notes In May 2020 , we used approximately $282.6 million of the net proceeds from the 2025 Notes offering described below and issued 1,953,067 shares of DexCom common stock to repurchase $260.0 million principal amount outstanding of the 2022 Notes and the associated conversion feature of the repurchased notes (which was recorded in additional paid-in capital). In addition, during the quarter ended June 30, 2020 holders of 2022 Notes with a principal amount of $102.8 million exercised their option to convert their 2022 Notes. We settled these conversions by issuing 1,037,319 shares of our common stock. As a result of the repurchase and conversions of the 2022 Notes, we recorded a $5.4 million loss on extinguishment of debt for the three and six months ended June 30, 2020 . The loss on extinguishment of debt includes the unamortized debt issuance costs for the 2022 Notes. The repurchase and conversions of the 2022 Notes resulted in remaining balances of $37.2 million , $2.8 million and $0.3 million of principal outstanding, debt discount and debt issuance costs, respectively, as of June 30, 2020 . On June 29, 2020, we issued a notice of redemption to the holders of our outstanding 2022 Notes pursuant to which we will redeem the outstanding 2022 Notes for cash at a price of 100% of the principal amount of the 2022 Notes plus accrued and unpaid interest, if any, on July 31, 2020, unless earlier converted. Prior to July 31, 2020, holders of outstanding 2022 Notes are entitled to convert their 2022 Notes to shares of our common stock at a rate of 10.0918 shares per $1,000 principal amount of 2022 Notes. In the event any holder delivers a conversion notice as provided in the indenture related to the 2022 Notes, we intend to satisfy our conversion obligation by delivering shares of our common stock. From July 1, 2020 through July 24, 2020, holders of 2022 Notes with a principal amount of $32.5 million exercised their option to convert their 2022 Notes and we settled these conversions by issuing 327,834 shares of our common stock. 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 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 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. The 2023 Notes may be settled in cash, stock, or a combination thereof, solely at our discretion. We use the if-converted method for assumed conversion of the 2023 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 $174.4 million in additional paid-in capital during 2018. 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. Conversion Rights at the Option of the Holders 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 DexCom’s 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 DexCom’s 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. Circumstance (1) listed above occurred during the quarter ended March 31, 2020 and as a result, the 2023 Notes were convertible at the option of the holder from April 1, 2020 through June 30, 2020; actual conversions during that quarter were not significant. Circumstance (1) listed above also occurred during the quarter ended June 30, 2020 and as a result, the 2023 Notes will remain convertible at the option of the holder from July 1, 2020 through September 30, 2020. Conversion Rights at Our Option 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. 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. 0.25% Senior Convertible Notes due 2025 In May 2020 , we completed an offering of $1.21 billion aggregate principal amount of unsecured senior convertible notes with a stated interest rate of 0.25% and a maturity date of November 15, 2025 (the 2025 Notes). The net proceeds from the offering, after deducting initial purchasers’ discounts and estimated costs directly related to the offering, were approximately $1.19 billion . The initial conversion rate of the 2025 Notes is 1.6655 shares per $1,000 principal amount of notes, which is equivalent to a conversion price of approximately $600.42 per share, subject to adjustments, with a maximum conversion rate of 2.3732 . The 2025 Notes may be settled in cash, stock, or a combination thereof, solely at our discretion. We use the if-converted method for assumed conversion of the 2025 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 $289.4 million in additional paid-in-capital during 2020. No principal payments are due on the 2025 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 2025 Notes includes customary terms and covenants, including certain events of default after which the 2025 Notes may be due and payable immediately. Conversion Rights at the Option of the Holders In the event of a fundamental change (as defined in the indenture related to the 2025 Notes), holders of the 2025 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 2025 Notes, plus any accrued and unpaid interest. Holders of the 2025 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 August 15, 2025 , holders of the 2025 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, 2020 (and only during such calendar quarter), if the last reported sale price of Dexcom’s 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 DexCom’s 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 of business on the scheduled trading day immediately preceding the redemption date; or (4) upon the occurrence of specified corporate transactions. On or after August 15, 2025 , until 5:00 p.m., New York City time, on the business day immediately preceding the maturity date, holders of the 2025 Notes may convert all or a portion of their notes regardless of the foregoing circumstances. Conversion Rights at Our Option DexCom may not redeem the 2025 Notes prior to May 20, 2023 . On or after May 20, 2023 and prior to August 15, 2025, DexCom may redeem for cash all or part of the 2025 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 2025 Notes to be redeemed plus accrued and unpaid interest to, but excluding, the redemption date. Revolving Credit Agreement Terms of the Revolving Credit Agreement On December 19, 2018, we entered into an amended and restated revolving credit agreement which was subsequently amended on May 11, 2020 (as amended, the Credit Agreement). The Credit Agreement provides for available principal amount of $200.0 million which can be increased up to $500.0 million at our option subject to customary conditions and approval of our lenders. Borrowings under the Credit Agreement are available for general corporate purposes, including working capital and capital expenditures. Information related to availability and outstanding borrowings on our Credit Agreement is as follows as of the date indicated: (In millions) June 30, 2020 Available principal amount $ 200.0 Letters of credit sub-facility 10.0 Outstanding borrowings — Outstanding letters of credit 5.4 Total available balance $ 194.6 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 will mature on the earlier to occur of (i) December 19, 2023 or (ii) 91 days prior to the maturity date of the 2022 Notes or (iii) 91 days prior to the maturity date of the 2023 Notes if both (a) the aggregate outstanding principal amount of the 2022 Notes or the 2023 Notes, as applicable, is greater than EBITDA for the period of four consecutive fiscal quarters ending prior to such date and (b) unrestricted domestic cash on hand is less than the aggregate outstanding principal amount of the 2022 Notes or the 2023 Notes, as applicable, plus $100.0 million . Our obligations under the Credit Agreement are guaranteed by our existing and future wholly-owned domestic subsidiaries, and are secured by a first-priority security interest in substantially all of the assets of DexCom and the guarantors, including all or a portion of the equity interests of our domestic subsidiaries and first-tier foreign subsidiaries but excluding real property and intellectual property (which is subject to a negative pledge). The Credit Agreement contains covenants that limit certain indebtedness, liens, investments, transactions with affiliates, dividends and other restricted payments, subordinated indebtedness and amendments to subordinated indebtedness documents, and sale and leaseback transactions of DexCom or any of its domestic subsidiaries. The Credit Agreement also 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, 2020 . |
Contingencies
Contingencies | 6 Months Ended |
Jun. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingencies | 5. Contingencies Litigation On March 28, 2016, AgaMatrix, Inc., or AgaMatrix, filed a patent infringement lawsuit against us in the U.S. District Court for the District of Oregon, asserting that certain of our products infringe three patents held by AgaMatrix. (After filing suit, AgaMatrix reorganized its business and the Court granted AgaMatrix’s motion to substitute the newly created entity WaveForm Technologies, Inc., as the plaintiff following AgaMatrix’s transfer of the three asserted patents to WaveForm.) We 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. 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. Effective March 9, 2020, we reached a confidential global settlement of all the foregoing litigation and proceedings between us and AgaMatrix and WaveForm, which included a one-time payment that has been made by Dexcom . We received licenses to certain intellectual property. All pending litigation and other proceedings between Dexcom and AgaMatrix and WaveForm have been dismissed. As of June 30, 2020 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 believe we are party to any currently pending legal proceedings, the outcome of which could have a material adverse effect on our business, financial condition or results of operations. There can be no assurance that existing or future legal proceedings arising in the ordinary course of business or otherwise will not have a material adverse effect on our business, financial condition or results of operations. |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 6. Income Taxes Our effective tax rate for the six months ended June 30, 2020 was 3.5% , based on an estimated annual effective tax rate of 2.5% and including the impact of certain return to provision adjustments. The income taxes estimated for the year include state and foreign income taxes in jurisdictions where we have no net operating losses. As of June 30, 2020 , we continue to maintain a full valuation allowance against our net deferred tax assets based on our assessment that it is not more likely than not these future benefits will be realized before expiration. We analyze our ability to realize our deferred tax assets quarterly, weighing all available positive and negative evidence of future taxable income. A future release of the valuation allowance will result in a material tax benefit recognized in the quarter of release. |
Stockholders' Equity
Stockholders' Equity | 6 Months Ended |
Jun. 30, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Stockholders' Equity | 7. 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) 2020 2019 2020 2019 Cost of sales $ 4.1 $ 2.4 $ 6.0 $ 4.7 Research and development 9.8 9.2 18.0 17.7 Selling, general and administrative 16.8 18.1 30.6 32.3 Total share-based compensation expense included in net income $ 30.7 $ 29.7 $ 54.6 $ 54.7 As of June 30, 2020 , unrecognized estimated compensation costs related to unvested restricted stock units, or RSUs, and performance stock units, or PSUs, totaled $190.3 million and is expected to be recognized through 2023 . Restricted Stock Units A summary of our RSU and PSU activity for the six months ended June 30, 2020 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, 2019 1.8 $ 96.63 $ 392.0 Granted 0.4 291.68 Vested (0.8 ) 87.53 Forfeited — 107.68 Nonvested at June 30, 2020 1.4 $ 161.58 $ 572.2 The total vest date fair value of RSUs that vested during the six months ended June 30, 2020 was $224.0 million . No PSUs vested during that period. |
Business Segment and Geographic
Business Segment and Geographic Information | 6 Months Ended |
Jun. 30, 2020 | |
Segment Reporting [Abstract] | |
Business Segment and Geographic Information | 8. 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. None of the components of our business meet the definition of an operating segment. 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 CGM systems through a direct sales force in the United States, Canada and some countries in Europe, and through distribution arrangements in the United States, and certain countries in Africa, Asia, Europe, Latin America, and the Middle East, as well as Australia, Canada, and New Zealand . We disaggregate our revenue from contracts by geography and by major sales channel 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, 2020 and 2019 , no individual country outside the United States generated revenue that represented more than 10% of our total revenue. The table below sets forth revenues for the periods shown by our two primary geographical markets, the United States and outside of the United States, based on the geographic location to which we deliver the product. The majority of our long-lived assets are located in the United States. Three Months Ended Three Months Ended (Dollars in millions) Amount % of Total Amount % of Total United States $ 367.1 81 % $ 266.3 79 % Outside of the United States 84.7 19 % 70.1 21 % Total $ 451.8 100 % $ 336.4 100 % Six Months Ended Six Months Ended (Dollars in millions) Amount % of Total Amount % of Total United States $ 659.4 77 % $ 476.8 77 % Outside of the United States 197.5 23 % 140.1 23 % Total revenues $ 856.9 100 % $ 616.9 100 % Revenues by customer sales channel The following table sets forth revenues by major sales channel for the periods shown: Three Months Ended Three Months Ended (Dollars in millions) Amount % of Total Amount % of Total Distributor $ 331.7 73 % $ 221.8 66 % Direct 120.1 27 % 114.6 34 % Total $ 451.8 100 % $ 336.4 100 % Six Months Ended Six Months Ended (Dollars in millions) Amount % of Total Amount % of Total Distributor $ 617.8 72 % $ 409.6 66 % Direct 239.1 28 % 207.3 34 % Total $ 856.9 100 % $ 616.9 100 % |
Organization and Significant _2
Organization and Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Business | Organization and Business DexCom, Inc. is a medical device company that develops and markets continuous glucose monitoring, or CGM, systems for the management of diabetes by patients, caregivers, and clinicians around the world. Unless the context requires otherwise, the terms “we,” “us,” “our,” the “company,” or “DexCom” refer to DexCom, Inc. and its subsidiaries. |
Principles of Consolidation | Basis of Presentation and Principles of Consolidation We have prepared the accompanying unaudited consolidated 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, 2020 are not necessarily indicative of the results that may be expected for the year ending December 31, 2020 . 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 consolidated financial statements should be read in conjunction with the audited consolidated financial statements and related notes thereto for the year ended December 31, 2019 included in the Annual Report on Form 10-K that we filed with the SEC on February 13, 2020 . These consolidated financial statements include the accounts of DexCom, Inc. and our wholly owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. The functional currencies of our international subsidiaries are generally the local currencies. We translate the financial statements of our foreign subsidiaries into U.S. dollars using period-end exchange rates for assets and liabilities and average exchange rates for each period for revenue, costs and expenses. We include translation-related adjustments in comprehensive income (loss) and in accumulated other comprehensive income in the equity section of our consolidated balance sheets. Gains and losses resulting from certain intercompany transactions as well as transactions with customers and vendors that are denominated in currencies other than the functional currency of each entity give rise to foreign exchange gains or losses that we record in interest and other income, net in our consolidated statements of operations. |
Basis of Presentation | Basis of Presentation and Principles of Consolidation We have prepared the accompanying unaudited consolidated 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, 2020 are not necessarily indicative of the results that may be expected for the year ending December 31, 2020 . 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 consolidated financial statements should be read in conjunction with the audited consolidated financial statements and related notes thereto for the year ended December 31, 2019 included in the Annual Report on Form 10-K that we filed with the SEC on February 13, 2020 . These consolidated financial statements include the accounts of DexCom, Inc. and our wholly owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. The functional currencies of our international subsidiaries are generally the local currencies. We translate the financial statements of our foreign subsidiaries into U.S. dollars using period-end exchange rates for assets and liabilities and average exchange rates for each period for revenue, costs and expenses. We include translation-related adjustments in comprehensive income (loss) and in accumulated other comprehensive income in the equity section of our consolidated balance sheets. Gains and losses resulting from certain intercompany transactions as well as transactions with customers and vendors that are denominated in currencies other than the functional currency of each entity give rise to foreign exchange gains or losses that we record in interest and other income, net in our consolidated statements of operations. |
Use of Estimates | Use of Estimates The preparation of consolidated financial statements in conformity with GAAP requires us to make certain estimates and assumptions that affect the amounts reported in our consolidated financial statements and the disclosures made in the accompanying notes. Areas requiring significant estimates include transaction price, net accounts receivable, excess or obsolete inventories and the valuation of inventory, and accruals for litigation contingencies. Despite our intention to establish accurate estimates and use reasonable assumptions, actual results may differ from our estimates. |
Accounts Receivable and Allowance for Doubtful Accounts | Accounts Receivable and Allowance for Doubtful Accounts Accounts receivable are generally recorded at the invoiced amount for distributors and at net realizable value for direct customers, which is determined using estimates of claim denials and historical reimbursement experience without regard to aging category. Accounts receivable are not interest bearing. We evaluate the creditworthiness of significant customers based on historical trends, the financial condition of our customers, and external market factors. We generally do not require collateral from our customers. We maintain an allowance for doubtful accounts for potential credit losses. Uncollectable accounts are written off against the allowance after appropriate collection efforts have been exhausted and when it is deemed that a customer account is uncollectable. Generally, receivable balances greater than one year past due are deemed uncollectable. |
Concentration of Credit Risk | Concentration of Credit Risk |
Revenue Recognition | Revenue Recognition We generate our revenue from the sale of our reusable transmitter and receiver, collectively referred to as Reusable Hardware and disposable sensors . We refer to Reusable Hardware and disposable sensors in this section as Components . Policy Elections • 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. We also provide free-of-charge software, mobile applications and updates for our DexCom Share ® remote monitoring system. The standalone selling prices of our free-of-charge software, mobile applications and updates are estimated 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 the contracted rates less an estimate of claim denials and historical reimbursement experience by payor, which include current and future expectations regarding reimbursement rates and payor mix. Variable Consideration Rebates. We estimate reductions for rebates based on contractual arrangements, estimates of products sold subject to rebate, known events or trends and channel inventory data. Product Returns. 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. We generally provide a “ 30 -day money back guarantee” program whereby first-time end-user customers may return Reusable Hardware . Product returns have historically been immaterial. Revenue Recognition The timing of revenue recognition is based on the satisfaction of performance obligations. Substantially all of the performance obligations associated with our Components are satisfied at a point in time, which typically occurs at shipment of our products. 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 sales transactions, 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 related Reusable Hardware component. Our sales of Components include an assurance-type warranty. Judgments and Estimates In determining how revenue should be recognized, a five-step process is used, which requires judgment and estimates that can have a significant impact on the amount and timing of revenue we report. These judgments and estimates include identifying performance obligations in the contract, determining whether the performance obligations are separate, allocating the transaction price to each separate performance obligation, determining the timing of revenue recognition for separate performance obligations and estimating the amount of variable consideration to include in the transaction price. Contract Balances Contract balances represent amounts presented in our consolidated balance sheets when either we have transferred goods or services to the customer or the customer has paid consideration to us under the contract. These contract balances include accounts receivable and deferred revenue. Payment terms vary by contract type and type of customer and generally range from 30 to 90 days. Accounts receivable as of June 30, 2020 included unbilled accounts receivable of $7.2 million . Unbilled accounts receivable consists 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 12 months. We record deferred revenue when we have entered into a contract with a customer and cash payments are received or due prior to transfer of control or satisfaction of the related performance obligation. 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) 2020 2019 2020 2019 Revenue recognized in the period from: Amounts included in contract liabilities at the beginning of the period $ 0.8 $ 2.0 $ 1.3 $ 2.6 Our performance obligations are generally satisfied within 12 months of the initial contract date. The deferred revenue balance related to performance obligations that will be satisfied after 12 months was $5.4 million as of June 30, 2020 and $2.1 million as of December 31, 2019 , and is included in other long-term liabilities in our consolidated balance sheets. 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. Deferred cost of sales are included in prepaid and other current assets in our consolidated 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 consolidated statements of operations. |
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. Potentially dilutive common shares consist of shares issuable from restricted stock units, warrants, and our senior convertible notes. Potentially dilutive common shares issuable upon vesting of restricted stock units and exercise of warrants are determined using the average share price for each period under the treasury stock method. Potentially dilutive common shares issuable upon conversion of our senior convertible notes are determined using the if-converted method. |
Recent Accounting Guidance | Recent Accounting Guidance Recently Adopted Accounting Pronouncements In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses: Measurement of Credit Losses on Financial Instruments , which amends the impairment model by requiring entities to use a forward-looking approach based on expected losses to estimate credit losses on certain types of financial instruments, including trade receivables and available-for-sale debt securities. This update is effective for annual periods beginning after December 15, 2019, and interim periods within those periods, and early adoption is permitted. Our adoption of ASU 2016-13 at the beginning of the first quarter of 2020 did not have a significant impact on our consolidated financial statements. We are continuing to monitor the impact of the novel strain of coronavirus, SARS-CoV-2 (“COVID-19”) outbreak on expected credit losses. In January 2017, the FASB issued ASU No. 2017-04, Intangibles – Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment (ASU 2017-04). 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 2017-04 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. Our adoption of ASU 2017-04 at the beginning of the first quarter of 2020 did not have a significant impact on our consolidated 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. Our adoption of ASU 2018-13 at the beginning of the first quarter of 2020 did not have a significant impact on our consolidated 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 2018-15). 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 2018-15 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 adopted the new standard on January 1, 2020 on a prospective basis. Our adoption of ASU 2018-15 at the beginning of the first quarter of 2020 did not have a significant impact on our consolidated financial statements, however, the adoption of the standard resulted in an increase in capitalized assets related to qualifying cloud computing arrangement implementation costs incurred after the adoption date. Recently Issued Accounting Pronouncements Not Yet Adopted In December 2019, the FASB issued ASU No. 2019-12, Simplifying the Accounting for Income Taxes, which is intended to simplify various aspects of the income tax accounting guidance, including requirements such as tax basis step-up in goodwill obtained in a transaction that is not a business combination, ownership changes in investments, and interim-period accounting for enacted changes in tax law. ASU 2019-12 is effective for public business entities for fiscal years beginning after December 15, 2020, 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 consolidated financial statements. |
Organization and Significant _3
Organization and Significant Accounting Policies (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Revenue Recognized from Contract 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) 2020 2019 2020 2019 Revenue recognized in the period from: Amounts included in contract liabilities at the beginning of the period $ 0.8 $ 2.0 $ 1.3 $ 2.6 |
Schedule of Basic and Diluted Net Earnings (Loss) per Share | 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) 2020 2019 2020 2019 Net income (loss) $ 46.3 $ (10.5 ) $ 66.2 $ (37.4 ) Net income (loss) per common share Basic $ 0.49 $ (0.12 ) $ 0.71 $ (0.41 ) Diluted $ 0.48 $ (0.12 ) $ 0.69 $ (0.41 ) Basic weighted average shares outstanding 93.8 91.1 92.8 90.7 Dilutive potential common stock outstanding: Restricted stock units 0.9 — 1.1 — Warrants 2.3 — 1.7 — Senior convertible notes — — — — Diluted weighted average shares outstanding 97.0 91.1 95.6 90.7 |
Schedule of Outstanding Anti-dilutive Securities Excluded from Diluted Net Income (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) 2020 2019 2020 2019 Restricted stock units — 2.1 0.1 2.1 Warrants 2.9 5.2 3.5 5.2 Senior convertible notes 8.7 9.2 9.0 9.2 Total 11.6 16.5 12.6 16.5 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Fair Value Disclosures [Abstract] | |
Schedule of 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, 2020 , classified in accordance with the fair value hierarchy: Fair Value Measurements Using (In millions) Level 1 Level 2 Level 3 Total Cash equivalents $ 402.6 $ — $ — $ 402.6 Debt securities, available for sale: U.S. government agencies — 1,600.2 — 1,600.2 Commercial paper — 295.3 — 295.3 Corporate debt — 83.3 — 83.3 Total debt securities, available for sale — 1,978.8 — 1,978.8 Other assets (1) 2.4 — — 2.4 Total assets measured at fair value on a recurring basis $ 405.0 $ 1,978.8 $ — $ 2,383.8 (1) Includes assets which are held pursuant to a deferred compensation plan for senior management, which consist mainly of mutual funds. The following table summarizes financial assets that we measured at fair value on a recurring basis as of December 31, 2019 , classified in accordance with the fair value hierarchy: Fair Value Measurements Using (In millions) Level 1 Level 2 Level 3 Total Cash equivalents $ 110.1 $ 144.9 $ — $ 255.0 Debt securities, available for sale: U.S. government agencies — 676.0 — 676.0 Commercial paper — 248.2 — 248.2 Corporate debt — 162.9 — 162.9 Total debt securities, available for sale — 1,087.1 — 1,087.1 Other assets (1) 0.7 — — 0.7 Total assets measured at fair value on a recurring basis $ 110.8 $ 1,232.0 $ — $ 1,342.8 (1) Includes assets which are held pursuant to a deferred compensation plan for senior management, which consist mainly of mutual funds. |
Schedule of Estimated Fair Values of Debt Instruments | The fair value, based on trading prices (Level 1), of our senior convertible notes were as follows as of the dates indicated: Fair Value Measurements Using Level 1 (In millions) June 30, 2020 December 31, 2019 Senior Convertible Notes due 2022 $ 151.9 $ 890.8 Senior Convertible Notes due 2023 2,108.2 1,260.0 Senior Convertible Notes due 2025 1,239.2 * Total fair value of outstanding senior convertible notes $ 3,499.3 $ 2,150.8 * Not Applicable For more information on the carrying values of our senior convertible notes , see Note 4, “Debt.” The carrying amounts of our senior convertible notes were as follows as of the dates indicated: (In millions) June 30, 2020 December 31, 2019 Principal amount: Senior Convertible Notes due 2022 $ 37.2 $ 400.0 Senior Convertible Notes due 2023 850.0 850.0 Senior Convertible Notes due 2025 1,207.5 — Total principal amount 2,094.7 1,250.0 Unamortized debt discount (414.2 ) (177.2 ) Unamortized debt issuance costs (21.7 ) (13.1 ) Carrying amount of liability component $ 1,658.8 $ 1,059.7 Carrying amount of equity component $ 467.7 $ 242.2 Remaining amortization period of debt discount on the liability component: Senior Convertible Notes due 2022 1.9 years 2.5 years Senior Convertible Notes due 2023 3.4 years 4.0 years Senior Convertible Notes due 2025 5.4 years * * Not Applicable |
Balance Sheet Details (Tables)
Balance Sheet Details (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Short-term Marketable Securities | Short-term marketable securities, consisting of equity securities and debt securities, were as follows as of the dates indicated: June 30, 2020 (In millions) Amortized Gross Gross Estimated Debt securities, available for sale: U.S. government agencies $ 1,598.7 $ 1.6 $ (0.1 ) $ 1,600.2 Commercial paper 295.3 0.2 (0.2 ) $ 295.3 Corporate debt 83.1 0.2 — $ 83.3 Total debt securities, available for sale $ 1,977.1 $ 2.0 $ (0.3 ) $ 1,978.8 December 31, 2019 (In millions) Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Market Value Debt securities, available for sale: U.S. government agencies $ 675.6 $ 0.4 $ — $ 676.0 Commercial paper 248.1 0.1 — 248.2 Corporate debt 163.0 — (0.1 ) 162.9 Total debt securities, available for sale $ 1,086.7 $ 0.5 $ (0.1 ) $ 1,087.1 |
Schedule of Inventory | Inventory was as follows as of the dates indicated: (In millions) June 30, 2020 December 31, 2019 Raw materials $ 59.1 $ 64.9 Work-in-process 15.0 11.1 Finished goods 91.2 43.8 Total inventory $ 165.3 $ 119.8 |
Schedule of Property and Equipment | Property and equipment was as follows as of the dates indicated: (In millions) June 30, 2020 December 31, 2019 Building and land (1) $ 15.5 $ 15.5 Furniture and fixtures 13.0 12.8 Computer software and hardware 33.0 32.7 Machinery and equipment 165.2 130.2 Leasehold improvements 120.7 102.5 Construction in progress 158.2 132.6 Total cost 505.6 426.3 Less accumulated depreciation and amortization (121.3 ) (105.0 ) Total property and equipment, net $ 384.3 $ 321.3 (1 ) Represents our finance lease right-of-use assets. |
Schedule of Accounts Payable and Accrued Liabilities | Accounts payable and accrued liabilities were as follows as of the dates indicated: (In millions) June 30, 2020 December 31, 2019 Accounts payable trade $ 108.4 $ 102.3 Accrued tax, audit, and legal fees 21.4 14.0 Accrued rebates 147.5 93.3 Accrued warranty 9.3 7.4 Other accrued liabilities 29.3 39.4 Total accounts payable and accrued liabilities $ 315.9 $ 256.4 |
Schedule of Other Long-Term Liabilities | Other long-term liabilities were as follows as of the dates indicated: (In millions) June 30, 2020 December 31, 2019 Finance lease obligations $ 14.0 $ 14.4 Contractual obligations 12.6 — Other liabilities 8.7 5.7 Total other liabilities $ 35.3 $ 20.1 |
Debt (Tables)
Debt (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of Carrying Values and Estimated Fair Values of Debt Instruments | The fair value, based on trading prices (Level 1), of our senior convertible notes were as follows as of the dates indicated: Fair Value Measurements Using Level 1 (In millions) June 30, 2020 December 31, 2019 Senior Convertible Notes due 2022 $ 151.9 $ 890.8 Senior Convertible Notes due 2023 2,108.2 1,260.0 Senior Convertible Notes due 2025 1,239.2 * Total fair value of outstanding senior convertible notes $ 3,499.3 $ 2,150.8 * Not Applicable For more information on the carrying values of our senior convertible notes , see Note 4, “Debt.” The carrying amounts of our senior convertible notes were as follows as of the dates indicated: (In millions) June 30, 2020 December 31, 2019 Principal amount: Senior Convertible Notes due 2022 $ 37.2 $ 400.0 Senior Convertible Notes due 2023 850.0 850.0 Senior Convertible Notes due 2025 1,207.5 — Total principal amount 2,094.7 1,250.0 Unamortized debt discount (414.2 ) (177.2 ) Unamortized debt issuance costs (21.7 ) (13.1 ) Carrying amount of liability component $ 1,658.8 $ 1,059.7 Carrying amount of equity component $ 467.7 $ 242.2 Remaining amortization period of debt discount on the liability component: Senior Convertible Notes due 2022 1.9 years 2.5 years Senior Convertible Notes due 2023 3.4 years 4.0 years Senior Convertible Notes due 2025 5.4 years * * Not Applicable |
Schedule of Converted Value of Notes | For our senior convertible notes for which the if-converted value exceeded the principal amount, the amount in excess of principal is as follows as of the dates indicated: (In millions) June 30, 2020 December 31, 2019 Senior Convertible Notes due 2022 $ 115.0 $ 486.2 Senior Convertible Notes due 2023 1,272.8 372.4 Total by which the notes ’ if-converted value exceeds their principal amount $ 1,387.8 $ 858.6 |
Schedule of Components of Interest Expense and Effective Interest Rates of Senior Convertible Notes | 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. Three Months Ended Six Months Ended (Dollars in millions) 2020 2019 2020 2019 Cash interest expense: Contractual coupon interest (1) $ 2.4 $ 2.4 $ 4.7 $ 4.7 Non-cash interest expense: Accretion of debt discount 16.5 11.3 28.3 22.6 Amortization of debt issuance costs 1.1 0.9 2.0 1.8 Total interest expense recognized on senior notes $ 20.0 $ 14.6 $ 35.0 $ 29.1 Effective interest rates: Senior Convertible Notes due 2022 5.1 % 5.1 % 5.1 % 5.1 % Senior Convertible Notes due 2023 5.6 % 5.6 % 5.6 % 5.6 % Senior Convertible Notes due 2025 5.5 % * 5.5 % * (1) Interest on the 2022 Notes began accruing upon issuance and is payable semi-annually on May 15 and November 15 of each year. Interest on the 2023 Notes began accruing upon issuance and is payable semi-annually on June 1 and December 1 of each year. Interest on the 2025 Notes began accruing upon issuance and is payable semi-annually on May 15 and November 15 of each year. * Not Applicable |
Schedule of Availability and Outstanding Borrowings on Credit Agreement | Information related to availability and outstanding borrowings on our Credit Agreement is as follows as of the date indicated: (In millions) June 30, 2020 Available principal amount $ 200.0 Letters of credit sub-facility 10.0 Outstanding borrowings — Outstanding letters of credit 5.4 Total available balance $ 194.6 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of 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) 2020 2019 2020 2019 Cost of sales $ 4.1 $ 2.4 $ 6.0 $ 4.7 Research and development 9.8 9.2 18.0 17.7 Selling, general and administrative 16.8 18.1 30.6 32.3 Total share-based compensation expense included in net income $ 30.7 $ 29.7 $ 54.6 $ 54.7 |
Schedule of Restricted Stock Units | A summary of our RSU and PSU activity for the six months ended June 30, 2020 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, 2019 1.8 $ 96.63 $ 392.0 Granted 0.4 291.68 Vested (0.8 ) 87.53 Forfeited — 107.68 Nonvested at June 30, 2020 1.4 $ 161.58 $ 572.2 |
Business Segment and Geograph_2
Business Segment and Geographic Information (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Segment Reporting [Abstract] | |
Schedule of Revenue from External Customers by Geographic Areas | The table below sets forth revenues for the periods shown by our two primary geographical markets, the United States and outside of the United States, based on the geographic location to which we deliver the product. The majority of our long-lived assets are located in the United States. Three Months Ended Three Months Ended (Dollars in millions) Amount % of Total Amount % of Total United States $ 367.1 81 % $ 266.3 79 % Outside of the United States 84.7 19 % 70.1 21 % Total $ 451.8 100 % $ 336.4 100 % Six Months Ended Six Months Ended (Dollars in millions) Amount % of Total Amount % of Total United States $ 659.4 77 % $ 476.8 77 % Outside of the United States 197.5 23 % 140.1 23 % Total revenues $ 856.9 100 % $ 616.9 100 % |
Schedule of Disaggregation of Revenue | The following table sets forth revenues by major sales channel for the periods shown: Three Months Ended Three Months Ended (Dollars in millions) Amount % of Total Amount % of Total Distributor $ 331.7 73 % $ 221.8 66 % Direct 120.1 27 % 114.6 34 % Total $ 451.8 100 % $ 336.4 100 % Six Months Ended Six Months Ended (Dollars in millions) Amount % of Total Amount % of Total Distributor $ 617.8 72 % $ 409.6 66 % Direct 239.1 28 % 207.3 34 % Total $ 856.9 100 % $ 616.9 100 % |
Organization and Significant _4
Organization and Significant Accounting Policies - Narrative (Details) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2020 | Dec. 31, 2019 | |
Organization And Summary Of Significant Accounting Policies [Line Items] | ||
Sales returns coverage period | 30 days | |
Unbilled accounts receivable | $ 7.2 | |
Noncurrent deferred revenue | $ 5.4 | $ 2.1 |
Amortization period for incentive compensation costs | 1 year | |
Minimum | ||
Organization And Summary Of Significant Accounting Policies [Line Items] | ||
Contract payment term | 30 days | |
Maximum | ||
Organization And Summary Of Significant Accounting Policies [Line Items] | ||
Contract payment term | 90 days |
Organization and Significant _5
Organization and Significant Accounting Policies - Revenue Recognition from Contract with Customers (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Revenue recognized in the period from: | ||||
Amounts included in contract liabilities at the beginning of the period | $ 0.8 | $ 2 | $ 1.3 | $ 2.6 |
Organization and Significant _6
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, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Net income (loss) | $ 46.3 | $ (10.5) | $ 66.2 | $ (37.4) |
Net income (loss) per common share | ||||
Basic (USD per share) | $ 0.49 | $ (0.12) | $ 0.71 | $ (0.41) |
Diluted (USD per share) | $ 0.48 | $ (0.12) | $ 0.69 | $ (0.41) |
Basic weighted average shares outstanding (shares) | 93.8 | 91.1 | 92.8 | 90.7 |
Diluted weighted average shares outstanding (shares) | 97 | 91.1 | 95.6 | 90.7 |
Restricted stock units | ||||
Net income (loss) per common share | ||||
Effect of potentially dilutive stock options (shares) | 0.9 | 0 | 1.1 | 0 |
Warrants | ||||
Net income (loss) per common share | ||||
Effect of potentially dilutive stock options (shares) | 2.3 | 0 | 1.7 | 0 |
Senior convertible notes | ||||
Net income (loss) per common share | ||||
Effect of potentially dilutive stock options (shares) | 0 | 0 | 0 | 0 |
Organization and Significant _7
Organization and Significant Accounting Policies - Anti-dilutive Securities Excluded from Calculation of Net Income (Loss) per Share (Details) - shares shares in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from computation of net loss per share (shares) | 11.6 | 16.5 | 12.6 | 16.5 |
Restricted stock units | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from computation of net loss per share (shares) | 0 | 2.1 | 0.1 | 2.1 |
Warrants | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from computation of net loss per share (shares) | 2.9 | 5.2 | 3.5 | 5.2 |
Senior convertible notes | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from computation of net loss per share (shares) | 8.7 | 9.2 | 9 | 9.2 |
Fair Value Measurements - Summa
Fair Value Measurements - Summary (Details) - USD ($) $ in Millions | Jun. 30, 2020 | Dec. 31, 2019 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Abstract] | ||
Cash equivalents | $ 402.6 | $ 255 |
Debt securities, available for sale | 1,978.8 | 1,087.1 |
Other assets | 2.4 | 0.7 |
Total assets measured at fair value on a recurring basis | 2,383.8 | 1,342.8 |
Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Abstract] | ||
Cash equivalents | 402.6 | 110.1 |
Debt securities, available for sale | 0 | 0 |
Other assets | 2.4 | 0.7 |
Total assets measured at fair value on a recurring basis | 405 | 110.8 |
Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Abstract] | ||
Cash equivalents | 0 | 144.9 |
Debt securities, available for sale | 1,978.8 | 1,087.1 |
Other assets | 0 | 0 |
Total assets measured at fair value on a recurring basis | 1,978.8 | 1,232 |
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 |
Other assets | 0 | 0 |
Total assets measured at fair value on a recurring basis | 0 | 0 |
U.S. government agencies | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Abstract] | ||
Debt securities, available for sale | 1,600.2 | 676 |
U.S. government agencies | 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 | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Abstract] | ||
Debt securities, available for sale | 1,600.2 | 676 |
U.S. government agencies | 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 | 295.3 | 248.2 |
Commercial paper | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Abstract] | ||
Debt securities, available for sale | 0 | 0 |
Commercial paper | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Abstract] | ||
Debt securities, available for sale | 295.3 | 248.2 |
Commercial paper | 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 | 83.3 | 162.9 |
Corporate debt | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Abstract] | ||
Debt securities, available for sale | 0 | 0 |
Corporate debt | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Abstract] | ||
Debt securities, available for sale | 83.3 | 162.9 |
Corporate debt | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Abstract] | ||
Debt securities, available for sale | $ 0 | $ 0 |
Fair Value Measurements - Narra
Fair Value Measurements - Narrative (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Transfers between Level 1 and Level 2 securities | $ 0 | $ 0 | $ 0 | $ 0 | |
Transfers into or out of Level 3 securities | 0 | 0 | 0 | 0 | |
Goodwill and intangible asset impairment | 0 | $ 0 | 0 | $ 0 | |
Foreign Exchange Forward | Designated as Hedging Instrument | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Notional amount of derivative instrument | $ 25,000,000 | $ 25,000,000 | $ 8,000,000 |
Fair Value Measurements - Fair
Fair Value Measurements - Fair Value of Convertible Senior Notes (Details) - Senior Notes - USD ($) $ in Millions | Jun. 30, 2020 | Dec. 31, 2019 |
Fair Value Disclosures [Line Items] | ||
Fair value of outstanding senior convertible notes: | $ 3,499.3 | $ 2,150.8 |
Senior Convertible Notes due 2022 | ||
Fair Value Disclosures [Line Items] | ||
Fair value of outstanding senior convertible notes: | 151.9 | 890.8 |
Senior Convertible Notes due 2023 | ||
Fair Value Disclosures [Line Items] | ||
Fair value of outstanding senior convertible notes: | 2,108.2 | $ 1,260 |
Senior Convertible Notes due 2025 | ||
Fair Value Disclosures [Line Items] | ||
Fair value of outstanding senior convertible notes: | $ 1,239.2 |
Balance Sheet Details - Short-t
Balance Sheet Details - Short-term Marketable Securities (Details) - USD ($) $ in Millions | Jun. 30, 2020 | Dec. 31, 2019 |
Debt securities, available for sale: | ||
Amortized Cost | $ 1,977.1 | $ 1,086.7 |
Gross Unrealized Gains | 2 | 0.5 |
Gross Unrealized Losses | (0.3) | (0.1) |
Estimated Market Value | 1,978.8 | 1,087.1 |
U.S. government agencies | ||
Debt securities, available for sale: | ||
Amortized Cost | 1,598.7 | 675.6 |
Gross Unrealized Gains | 1.6 | 0.4 |
Gross Unrealized Losses | (0.1) | 0 |
Estimated Market Value | 1,600.2 | 676 |
Commercial paper | ||
Debt securities, available for sale: | ||
Amortized Cost | 295.3 | 248.1 |
Gross Unrealized Gains | 0.2 | 0.1 |
Gross Unrealized Losses | (0.2) | 0 |
Estimated Market Value | 295.3 | 248.2 |
Corporate debt | ||
Debt securities, available for sale: | ||
Amortized Cost | 83.1 | 163 |
Gross Unrealized Gains | 0.2 | 0 |
Gross Unrealized Losses | 0 | (0.1) |
Estimated Market Value | $ 83.3 | $ 162.9 |
Balance Sheet Details - Narrati
Balance Sheet Details - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | |
Condensed Financial Statements, Captions [Line Items] | |||||
Contractual maturities of debt securities (less than) | 12 months | 12 months | 12 months | ||
Customer Notification Related Inventory Reserve | |||||
Condensed Financial Statements, Captions [Line Items] | |||||
Inventory write-down | $ 1.7 | $ 1.7 | $ 6.8 | $ 3.3 |
Balance Sheet Details - Invento
Balance Sheet Details - Inventory (Details) - USD ($) $ in Millions | Jun. 30, 2020 | Dec. 31, 2019 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Raw materials | $ 59.1 | $ 64.9 |
Work-in-process | 15 | 11.1 |
Finished goods | 91.2 | 43.8 |
Total inventory | $ 165.3 | $ 119.8 |
Balance Sheet Details - Propert
Balance Sheet Details - Property and Equipment (Details) - USD ($) $ in Millions | Jun. 30, 2020 | Dec. 31, 2019 |
Property, Plant and Equipment [Line Items] | ||
Total cost | $ 505.6 | $ 426.3 |
Less accumulated depreciation and amortization | (121.3) | (105) |
Total property and equipment, net | 384.3 | 321.3 |
Building and land | ||
Property, Plant and Equipment [Line Items] | ||
Total cost | 15.5 | 15.5 |
Furniture and fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Total cost | 13 | 12.8 |
Computer software and hardware | ||
Property, Plant and Equipment [Line Items] | ||
Total cost | 33 | 32.7 |
Machinery and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Total cost | 165.2 | 130.2 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Total cost | 120.7 | 102.5 |
Construction in progress | ||
Property, Plant and Equipment [Line Items] | ||
Total cost | $ 158.2 | $ 132.6 |
Balance Sheet Details - Account
Balance Sheet Details - Accounts Payable and Accrued Liabilities (Details) - USD ($) $ in Millions | Jun. 30, 2020 | Dec. 31, 2019 |
Accounts Payable and Accrued Liabilities [Abstract] | ||
Accounts payable trade | $ 108.4 | $ 102.3 |
Accrued tax, audit, and legal fees | 21.4 | 14 |
Accrued rebates | 147.5 | 93.3 |
Accrued warranty | 9.3 | 7.4 |
Other accrued liabilities | 29.3 | 39.4 |
Total accounts payable and accrued liabilities | $ 315.9 | $ 256.4 |
Balance Sheet Details - Other L
Balance Sheet Details - Other Long-Term Liabilities (Details) - USD ($) $ in Millions | Jun. 30, 2020 | Dec. 31, 2019 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Finance lease obligations | $ 14 | $ 14.4 |
Contractual obligations | 12.6 | 0 |
Other liabilities | 8.7 | 5.7 |
Total other liabilities | $ 35.3 | $ 20.1 |
Debt - Senior Convertible Notes
Debt - Senior Convertible Notes (Details) - USD ($) | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2020 | Dec. 31, 2019 | May 31, 2020 | Nov. 30, 2018 | Jun. 30, 2017 | |
Debt Instrument [Line Items] | |||||
Carrying amount of liability component | $ 1,658,800,000 | $ 1,059,700,000 | |||
Senior Notes | |||||
Debt Instrument [Line Items] | |||||
Principal amount | 2,094,700,000 | 1,250,000,000 | |||
Unamortized debt discount | (414,200,000) | (177,200,000) | |||
Unamortized debt issuance costs | (21,700,000) | (13,100,000) | |||
Carrying amount of liability component | 1,658,800,000 | 1,059,700,000 | |||
Carrying amount of equity component | 467,700,000 | 242,200,000 | |||
Senior Notes | Senior Convertible Notes due 2022 | |||||
Debt Instrument [Line Items] | |||||
Principal amount | 37,200,000 | $ 400,000,000 | $ 260,000,000 | $ 400,000,000 | |
Unamortized debt discount | (2,800,000) | ||||
Unamortized debt issuance costs | $ (300,000) | ||||
Remaining amortization period of debt discount on the liability component | 1 year 10 months 24 days | 2 years 6 months | |||
Senior Notes | Senior Convertible Notes due 2023 | |||||
Debt Instrument [Line Items] | |||||
Principal amount | $ 850,000,000 | $ 850,000,000 | $ 850,000,000 | ||
Remaining amortization period of debt discount on the liability component | 3 years 4 months 24 days | 4 years | |||
Senior Notes | Senior Convertible Notes due 2025 | |||||
Debt Instrument [Line Items] | |||||
Principal amount | $ 1,207,500,000 | $ 0 | $ 1,210,000,000 | ||
Remaining amortization period of debt discount on the liability component | 5 years 4 months 24 days |
Debt - Conversion Value of Conv
Debt - Conversion Value of Convertible Notes (Details) - Senior Notes - USD ($) $ in Millions | 6 Months Ended | 12 Months Ended |
Jun. 30, 2020 | Dec. 31, 2019 | |
Debt Instrument [Line Items] | ||
Total by which the notes’ if-converted value exceeds their principal amount | $ 1,387.8 | $ 858.6 |
Senior Convertible Notes due 2022 | ||
Debt Instrument [Line Items] | ||
Total by which the notes’ if-converted value exceeds their principal amount | 115 | 486.2 |
Senior Convertible Notes due 2023 | ||
Debt Instrument [Line Items] | ||
Total by which the notes’ if-converted value exceeds their principal amount | $ 1,272.8 | $ 372.4 |
Debt - Components of Interest E
Debt - Components of Interest Expense and Effective Interest Rates of Senior Convertible Notes (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Cash interest expense: | ||||
Contractual coupon interest | $ 2.4 | $ 2.4 | $ 4.7 | $ 4.7 |
Non-cash interest expense: | ||||
Accretion of debt discount | 16.5 | 11.3 | 28.3 | 22.6 |
Amortization of debt issuance costs | 1.1 | 0.9 | 2 | 1.8 |
Total interest expense recognized on senior notes | $ 20 | $ 14.6 | $ 35 | $ 29.1 |
Senior Convertible Notes due 2022 | ||||
Non-cash interest expense: | ||||
Effective interest rate (as a percent) | 5.10% | 5.10% | 5.10% | 5.10% |
Senior Convertible Notes due 2023 | ||||
Non-cash interest expense: | ||||
Effective interest rate (as a percent) | 5.60% | 5.60% | 5.60% | 5.60% |
Senior Convertible Notes due 2025 | ||||
Non-cash interest expense: | ||||
Effective interest rate (as a percent) | 5.50% | 5.50% |
Debt - Narrative (Details)
Debt - Narrative (Details) | Jun. 29, 2020 | Jul. 24, 2020USD ($)shares | May 31, 2020USD ($)$ / sharesshares | Nov. 30, 2018USD ($)d$ / sharesshares | Jun. 30, 2017USD ($)$ / shares | Jun. 30, 2020USD ($)shares | Jun. 30, 2019USD ($) | Jun. 30, 2020USD ($)dshares | Jun. 30, 2019USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2019USD ($) | Dec. 19, 2018USD ($) |
Debt Instrument [Line Items] | |||||||||||||
Proceeds from issuance of convertible notes, net of issuance costs | $ 1,188,800,000 | $ 0 | |||||||||||
Payments to repurchase convertible notes | 282,600,000 | 0 | |||||||||||
Loss on extinguishment of debt | $ 5,400,000 | $ 0 | 5,400,000 | $ 0 | |||||||||
Equity component of 2025 Notes issuance, net of issuance costs | 289,400,000 | 289,400,000 | |||||||||||
Senior Notes | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Principal amount | 2,094,700,000 | 2,094,700,000 | $ 1,250,000,000 | ||||||||||
Conversion amount | 1,000 | $ 1,000 | |||||||||||
Redemption price (as a percent) | 100.00% | ||||||||||||
Unamortized debt discount | 414,200,000 | $ 414,200,000 | 177,200,000 | ||||||||||
Unamortized debt issuance costs | 21,700,000 | 21,700,000 | 13,100,000 | ||||||||||
Senior Notes | Senior Convertible Notes due 2023 | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Principal amount | $ 850,000,000 | $ 850,000,000 | $ 850,000,000 | 850,000,000 | |||||||||
Interest rate on convertible notes (as a percent) | 0.75% | ||||||||||||
Proceeds from issuance of convertible notes, net of issuance costs | $ 836,600,000 | ||||||||||||
Conversion ratio | 0.0060869 | ||||||||||||
Conversion amount | $ 1,000 | ||||||||||||
Conversion price of convertible notes (USD per share) | $ / shares | $ 164.29 | ||||||||||||
Holder's repurchase price percentage in event of fundamental change (as a percent) | 100.00% | 100.00% | |||||||||||
Number of trading days | d | 60 | ||||||||||||
Proportion of conversion price (as a percent) | 130.00% | ||||||||||||
Redemption price (as a percent) | 100.00% | ||||||||||||
Stock counterparties to acquire with warrants purchased (shares) | shares | 5,200,000 | ||||||||||||
Proceeds from sale of warrants | $ 183,800,000 | ||||||||||||
Exercise price of warrants or rights (USD per share) | $ / shares | $ 198.38 | ||||||||||||
Senior Notes | Senior Convertible Notes due 2022 | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Principal amount | $ 260,000,000 | $ 400,000,000 | $ 37,200,000 | $ 37,200,000 | 400,000,000 | ||||||||
Interest rate on convertible notes (as a percent) | 0.75% | ||||||||||||
Proceeds from issuance of convertible notes, net of issuance costs | $ 389,000,000 | ||||||||||||
Conversion ratio | 0.0100918 | ||||||||||||
Conversion price of convertible notes (USD per share) | $ / shares | $ 99.09 | ||||||||||||
Holder's repurchase price percentage in event of fundamental change (as a percent) | 100.00% | 100.00% | |||||||||||
Proportion of conversion price (as a percent) | 140.00% | ||||||||||||
Redemption price (as a percent) | 100.00% | ||||||||||||
Principal amount of exercised options to covert | $ (102,800,000) | ||||||||||||
Loss on extinguishment of debt | 5,400,000 | ||||||||||||
Unamortized debt discount | 2,800,000 | $ 2,800,000 | |||||||||||
Unamortized debt issuance costs | 300,000 | 300,000 | |||||||||||
Senior Notes | Senior Convertible Notes due 2022 | Subsequent Event | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Principal amount | $ 32,500,000 | ||||||||||||
Senior Notes | Senior Convertible Notes due 2025 | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Principal amount | $ 1,210,000,000 | $ 1,207,500,000 | $ 1,207,500,000 | $ 0 | |||||||||
Interest rate on convertible notes (as a percent) | 0.25% | ||||||||||||
Proceeds from issuance of convertible notes, net of issuance costs | $ 1,190,000,000 | ||||||||||||
Conversion ratio | 0.0016655 | ||||||||||||
Conversion price of convertible notes (USD per share) | $ / shares | $ 600.42 | ||||||||||||
Holder's repurchase price percentage in event of fundamental change (as a percent) | 100.00% | 100.00% | |||||||||||
Proportion of conversion price (as a percent) | 130.00% | ||||||||||||
Senior Notes | Senior Convertible Notes due 2025 | Maximum | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Conversion ratio | 0.0023732 | ||||||||||||
Line of Credit | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Maximum borrowing capacity of revolving credit agreement | $ 200,000,000 | $ 200,000,000 | $ 200,000,000 | ||||||||||
Option to increase revolving line of credit | $ 500,000,000 | ||||||||||||
Value of unrestricted cash on hand threshold | $ 100,000,000 | ||||||||||||
Line of Credit | Minimum | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Interest rate on convertible notes (as a percent) | 0.375% | 0.375% | |||||||||||
Unused capacity fee (as a percent) | 0.20% | ||||||||||||
Line of Credit | Maximum | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Interest rate on convertible notes (as a percent) | 1.00% | 1.00% | |||||||||||
Unused capacity fee (as a percent) | 0.30% | ||||||||||||
Additional Paid-In Capital | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Equity component of 2025 Notes issuance, net of issuance costs | $ 289,400,000 | $ 289,400,000 | |||||||||||
Additional Paid-In Capital | Senior Notes | Senior Convertible Notes due 2023 | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Recognized additional paid-in capital from cash conversion option | $ 174,400,000 | ||||||||||||
Additional Paid-In Capital | Senior Notes | Senior Convertible Notes due 2022 | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Recognized additional paid-in capital from cash conversion option | $ 72,600,000 | ||||||||||||
Common Stock | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Repurchase and conversions of 2022 Notes, net of tax (shares) | shares | 3,000,000 | 3,000,000 | |||||||||||
Common Stock | Senior Notes | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Repurchase and conversions of 2022 Notes, net of tax (shares) | shares | 1,953,067 | ||||||||||||
Common Stock | Senior Notes | Senior Convertible Notes due 2022 | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Repurchase and conversions of 2022 Notes, net of tax (shares) | shares | 1,037,319 | ||||||||||||
Common Stock | Senior Notes | Senior Convertible Notes due 2022 | Subsequent Event | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Repurchase and conversions of 2022 Notes, net of tax (shares) | shares | 327,834 | ||||||||||||
Debt Instrument Conversion Term One | Senior Notes | Senior Convertible Notes due 2023 | Minimum | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Number of trading days | d | 20 | ||||||||||||
Proportion of applicable conversion price (as a percent) | 130.00% | ||||||||||||
Debt Instrument Conversion Term One | Senior Notes | Senior Convertible Notes due 2023 | Maximum | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Number of trading days | d | 30 | ||||||||||||
Debt Instrument Conversion Term One | Senior Notes | Senior Convertible Notes due 2022 | Minimum | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Number of trading days | d | 20 | ||||||||||||
Proportion of applicable conversion price (as a percent) | 130.00% | ||||||||||||
Debt Instrument Conversion Term One | Senior Notes | Senior Convertible Notes due 2022 | Maximum | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Number of trading days | d | 30 | ||||||||||||
Debt Instrument Conversion Term One | Senior Notes | Senior Convertible Notes due 2025 | Minimum | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Number of trading days | d | 20 | ||||||||||||
Proportion of applicable conversion price (as a percent) | 130.00% | ||||||||||||
Debt Instrument Conversion Term One | Senior Notes | Senior Convertible Notes due 2025 | Maximum | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Number of trading days | d | 30 | ||||||||||||
Debt Instrument Conversion Term Two | Senior Notes | Senior Convertible Notes due 2023 | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Number of trading days | d | 5 | ||||||||||||
Debt Instrument Conversion Term Two | Senior Notes | Senior Convertible Notes due 2023 | Maximum | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Number of trading days | d | 5 | ||||||||||||
Proportion of applicable conversion price (as a percent) | 98.00% | ||||||||||||
Debt Instrument Conversion Term Two | Senior Notes | Senior Convertible Notes due 2022 | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Number of trading days | d | 5 | ||||||||||||
Debt Instrument Conversion Term Two | Senior Notes | Senior Convertible Notes due 2022 | Maximum | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Number of trading days | d | 5 | ||||||||||||
Proportion of applicable conversion price (as a percent) | 98.00% | ||||||||||||
Debt Instrument Conversion Term Two | Senior Notes | Senior Convertible Notes due 2025 | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Number of trading days | d | 5 | ||||||||||||
Debt Instrument Conversion Term Two | Senior Notes | Senior Convertible Notes due 2025 | Maximum | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Number of trading days | d | 5 | ||||||||||||
Proportion of applicable conversion price (as a percent) | 98.00% | ||||||||||||
Designated as Hedging Instrument | Senior Notes | Senior Convertible Notes due 2023 | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Stock issued upon conversion of senior notes (shares) | shares | 5,200,000 | ||||||||||||
Equity component of 2025 Notes issuance, net of issuance costs | $ 218,900,000 | ||||||||||||
Designated as Hedging Instrument | Senior Notes | Senior Convertible Notes due 2025 | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Equity component of 2025 Notes issuance, net of issuance costs | $ 289,400,000 | ||||||||||||
London Interbank Offered Rate (LIBOR) | Line of Credit | Minimum | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Basis spread on variable rate (as a percent) | 1.375% | ||||||||||||
London Interbank Offered Rate (LIBOR) | Line of Credit | Maximum | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Basis spread on variable rate (as a percent) | 2.00% |
Debt - Availability and Outstan
Debt - Availability and Outstanding Borrowings under Credit Agreement (Details) - USD ($) $ in Millions | Jun. 30, 2020 | Dec. 19, 2018 |
Line of Credit Facility [Line Items] | ||
Total available balance | $ 194.6 | |
Line of Credit | ||
Line of Credit Facility [Line Items] | ||
Letters of credit sub-facility | 200 | $ 200 |
Outstanding borrowings | 0 | |
Line of Credit | Letter of Credit | ||
Line of Credit Facility [Line Items] | ||
Letters of credit sub-facility | 10 | |
Outstanding letters of credit | $ 5.4 |
Contingencies - Narrative (Deta
Contingencies - Narrative (Details) | Sep. 15, 2017number_patents | Jun. 30, 2020USD ($) |
Loss Contingencies [Line Items] | ||
Loss contingency accrual | $ | $ 0 | |
AgaMatrix | ||
Loss Contingencies [Line Items] | ||
Number of patents allegedly infringed upon by counterparty | number_patents | 2 |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) | 6 Months Ended |
Jun. 30, 2020 | |
Income Tax Disclosure [Abstract] | |
Effective tax rate (as a percent) | 3.50% |
Estimated annual effective tax rate (as a percent) | 2.50% |
Stockholders' Equity - Share-Ba
Stockholders' Equity - Share-Based Compensation Expense (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Total share-based compensation expense included in net income | $ 30.7 | $ 29.7 | $ 54.6 | $ 54.7 |
Unrecognized estimated compensation costs | 190.3 | 190.3 | ||
Cost of sales | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Total share-based compensation expense included in net income | 4.1 | 2.4 | 6 | 4.7 |
Research and development | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Total share-based compensation expense included in net income | 9.8 | 9.2 | 18 | 17.7 |
Selling, general and administrative | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Total share-based compensation expense included in net income | $ 16.8 | $ 18.1 | $ 30.6 | $ 32.3 |
Stockholders' Equity - Restrict
Stockholders' Equity - Restricted Stock Units (Details) - USD ($) $ / shares in Units, shares in Millions | 6 Months Ended | |
Jun. 30, 2020 | Dec. 31, 2019 | |
Unvested restricted stock units | ||
Shares | ||
Nonvested balance at beginning of period (shares) | 1.8 | |
Granted (shares) | 0.4 | |
Vested (shares) | (0.8) | |
Forfeited (shares) | 0 | |
Nonvested balance at end of period (shares) | 1.4 | |
Weighted Average Grant Date Fair Value | ||
Balance at beginning of period (USD per share) | $ 96.63 | |
Granted (USD per share) | 291.68 | |
Vested (USD per share) | 87.53 | |
Forfeited (USD per share) | 107.68 | |
Balance at end of period (USD per share) | $ 161.58 | |
Aggregate intrinsic value | $ 572,200,000 | $ 392,000,000 |
Total vest date fair value | 224,000,000 | |
Performance Shares | ||
Weighted Average Grant Date Fair Value | ||
Total vest date fair value | $ 0 |
Business Segment and Geograph_3
Business Segment and Geographic Information - Narrative (Details) | 6 Months Ended |
Jun. 30, 2020segment | |
Segment Reporting [Abstract] | |
Number of reportable segments | 1 |
Business Segment and Geograph_4
Business Segment and Geographic Information - Summary (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Disaggregation of Revenue [Line Items] | ||||
Revenues | $ 451.8 | $ 336.4 | $ 856.9 | $ 616.9 |
Proportion of revenue (as a percent) | 100.00% | 100.00% | 100.00% | 100.00% |
Distributor | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | $ 331.7 | $ 221.8 | $ 617.8 | $ 409.6 |
Proportion of revenue (as a percent) | 73.00% | 66.00% | 72.00% | 66.00% |
Direct | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | $ 120.1 | $ 114.6 | $ 239.1 | $ 207.3 |
Proportion of revenue (as a percent) | 27.00% | 34.00% | 28.00% | 34.00% |
United States | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | $ 367.1 | $ 266.3 | $ 659.4 | $ 476.8 |
Proportion of revenue (as a percent) | 81.00% | 79.00% | 77.00% | 77.00% |
Outside of the United States | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | $ 84.7 | $ 70.1 | $ 197.5 | $ 140.1 |
Proportion of revenue (as a percent) | 19.00% | 21.00% | 23.00% | 23.00% |
Uncategorized Items - dxcm-2020
Label | Element | Value |
Restricted Cash | us-gaap_RestrictedCash | $ 600,000 |
Restricted Cash | us-gaap_RestrictedCash | $ 0 |