DEXCOM INC, 10-K filed on 2/14/2022
Annual Report
v3.22.0.1
Cover Page - USD ($)
$ in Billions
 12 Months Ended
Dec. 31, 2021
Feb. 07, 2022
Jun. 30, 2021
Cover [Abstract]      
Document Type 10-K    
Document Annual Report true    
Document Period End Date Dec. 31, 2021    
Current Fiscal Year End Date --12-31    
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 Well-known Seasoned Issuer Yes    
Entity Voluntary Filers No    
Entity Current Reporting Status Yes    
Entity Interactive Data Current Yes    
Entity Filer Category Large Accelerated Filer    
Entity Small Business false    
Entity Emerging Growth Company false    
ICFR Auditor Attestation Flag true    
Entity Shell Company false    
Entity Public Float     $ 41.1
Entity Common Stock, Shares Outstanding   97,065,634  
Documents incorporated by reference Portions of the registrant’s definitive proxy statement relating to its 2022 Annual Meeting of Stockholders (the “Proxy Statement”) are incorporated by reference in Part III, Items 10 through 14 of this Annual Report on Form 10-K, as specified in the responses to those item numbers. Except with respect to information specifically incorporated by reference in the Form 10-K, the Proxy Statement is not deemed to be filed as part hereof.    
Amendment Flag false    
Document Fiscal Year Focus 2021    
Document Fiscal Period Focus FY    
Entity Central Index Key 0001093557    
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Audit Information
 12 Months Ended
Dec. 31, 2021
Audit Information [Abstract]  
Auditor Name Ernst & Young LLP
Auditor Location San Diego, California
Auditor Firm ID 42
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Consolidated Balance Sheets - USD ($)
$ in Millions
Dec. 31, 2021
Dec. 31, 2020
Current assets:    
Cash and cash equivalents $ 1,052.6 $ 817.6
Short-term marketable securities 1,678.6 1,890.1
Accounts receivable, net 514.3 428.5
Inventory 357.3 234.7
Prepaid and other current assets 81.6 53.9
Total current assets 3,684.4 3,424.8
Property and equipment, net 801.8 515.3
Operating lease right-of-use assets 88.1 93.3
Goodwill 26.5 19.3
Deferred tax assets 220.8 216.4
Intangibles and other assets, net 42.0 21.4
Total assets 4,863.6 4,290.5
Current liabilities:    
Accounts payable and accrued liabilities 573.0 481.1
Accrued payroll and related expenses 125.2 114.3
Short-term operating lease liabilities 20.5 16.5
Deferred revenue 2.1 2.2
Total current liabilities 720.8 614.1
Long-term senior convertible notes 1,702.7 1,667.2
Long-term operating lease liabilities 98.6 101.8
Other long-term liabilities 90.0 80.9
Total liabilities 2,612.1 2,464.0
Commitments and contingencies
Stockholders’ equity:    
Preferred stock, $0.001 par value, 5.0 million shares authorized; no shares issued and outstanding at December 31, 2021 and December 31, 2020 0.0 0.0
Common stock, $0.001 par value, 200.0 million shares authorized; 97.8 million and 97.0 million shares issued and outstanding, respectively, at December 31, 2021; and 96.9 million and 96.1 million shares issued and outstanding, respectively, at December 31, 2020 0.1 0.1
Additional paid-in capital 2,504.5 2,125.3
Accumulated other comprehensive income 0.5 3.2
Accumulated deficit (47.4) (202.1)
Treasury stock, at cost; 0.8 million shares at December 31, 2021 and 0.8 million shares at December 31, 2020 (206.2) (100.0)
Total stockholders’ equity 2,251.5 1,826.5
Total liabilities and stockholders’ equity $ 4,863.6 $ 4,290.5
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Consolidated Balance Sheets (Parenthetical) - $ / shares
Dec. 31, 2021
Dec. 31, 2020
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) 97,800,000 96,900,000
Common stock outstanding (shares) 97,000,000 96,100,000
Treasury stock, at cost (shares) 800,000 800,000
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Consolidated Statements of Operations - USD ($)
shares in Millions, $ in Millions
 12 Months Ended
Dec. 31, 2021
Dec. 31, 2020
Dec. 31, 2019
Income Statement [Abstract]      
Revenue $ 2,448.5 $ 1,926.7 $ 1,476.0
Cost of sales 768.0 646.6 544.5
Gross profit 1,680.5 1,280.1 931.5
Operating expenses:      
Research and development 517.1 359.9 273.5
Collaborative research and development fee 87.1 0.0 0.0
Selling, general and administrative 810.5 620.7 515.7
Total operating expenses 1,414.7 980.6 789.2
Operating income 265.8 299.5 142.3
Interest expense (100.3) (84.7) (60.3)
Loss on extinguishment of debt (1.5) (5.9) 0.0
Income (loss) from equity investments 11.6 0.0 (4.2)
Interest and other income (expense), net (1.7) 16.1 26.4
Income before income taxes 173.9 225.0 104.2
Income tax expense (benefit) 19.2 (268.6) 3.1
Net income $ 154.7 $ 493.6 $ 101.1
Basic net income per share (USD per share) $ 1.60 $ 5.23 $ 1.11
Shares used to compute basic net income per share (shares) 96.7 94.4 91.1
Diluted net income per share (USD per share) $ 1.55 $ 5.06 $ 1.10
Shares used to compute diluted net income per share (shares) 100.1 97.5 92.3
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Consolidated Statements of Comprehensive Income - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2021
Dec. 31, 2020
Dec. 31, 2019
Statement of Comprehensive Income [Abstract]      
Net income $ 154.7 $ 493.6 $ 101.1
Other comprehensive income (loss), net of tax:      
Translation adjustments and other (1.0) 1.1 0.4
Unrealized gain (loss) on marketable debt securities (1.7) (0.2) 0.4
Total other comprehensive income (loss), net of tax (2.7) 0.9 0.8
Comprehensive income $ 152.0 $ 494.5 $ 101.9
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Consolidated Statements of Stockholders' Equity - USD ($)
shares in Millions, $ in Millions
Total
Cumulative Effect, Period of Adoption, Adjustment
Common Stock
Additional Paid-In Capital
Accumulated Other Comprehensive Income (Loss)
Accumulated Deficit
Accumulated Deficit
Cumulative Effect, Period of Adoption, Adjustment
Treasury Stock
Balance at beginning of period (shares) at Dec. 31, 2018     90.0          
Balance at beginning of period at Dec. 31, 2018 $ 663.3 $ 2.1 $ 0.1 $ 1,560.6 $ 1.5 $ (798.9) $ 2.1 $ (100.0)
Increase (Decrease) in Stockholders' Equity [Roll Forward]                
Issuance of common stock under equity incentive plans (in shares)     1.4          
Issuance of common stock under equity incentive plans 0.3     0.3        
Issuance of common stock for Employee Stock Purchase Plan (in shares)     0.2          
Issuance of common stock for Employee Stock Purchase Plan 11.6     11.6        
Tax benefit related to Senior Convertible Notes 0.7     0.7        
Share-based compensation expense 102.7     102.7        
Net income 101.1         101.1    
Other comprehensive income (loss), net of tax 0.8       0.8      
Balance at end of period (shares) at Dec. 31, 2019     91.6          
Balance at end of period at Dec. 31, 2019 882.6   $ 0.1 1,675.9 2.3 (695.7)   (100.0)
Increase (Decrease) in Stockholders' Equity [Roll Forward]                
Issuance of common stock under equity incentive plans (in shares)     1.1          
Issuance of common stock under equity incentive plans 0.3     0.3        
Issuance of common stock for Employee Stock Purchase Plan 15.0     15.0        
Equity component of 2025 Notes issuance, net of issuance costs 289.4     289.4        
Tax benefit related to Senior Convertible Notes (62.5)     (62.5)        
Repurchase and conversions of Notes (in shares)     3.4          
Repurchase and conversions of Notes 87.8     87.8        
Share-based compensation expense 119.4     119.4        
Net income 493.6         493.6    
Other comprehensive income (loss), net of tax 0.9       0.9      
Balance at end of period (shares) at Dec. 31, 2020     96.1          
Balance at end of period at Dec. 31, 2020 1,826.5   $ 0.1 2,125.3 3.2 (202.1)   (100.0)
Increase (Decrease) in Stockholders' Equity [Roll Forward]                
Issuance of common stock under equity incentive plans (in shares)     0.7          
Issuance of common stock under equity incentive plans 0.0              
Issuance of common stock for Employee Stock Purchase Plan 20.3     20.3        
Tax benefit related to Senior Convertible Notes (1.1)     (1.1)        
Repurchase and conversions of Notes (in shares)     0.4          
Repurchase and conversions of Notes 53.3     28.7       24.6
Benefit of note hedge upon conversions of 2023 Notes (in shares)     (0.2)          
Benefit of note hedge upon conversions of 2023 Notes 0.0     130.8       (130.8)
Share-based compensation expense 113.4     113.4        
Collaborative research and development fee 87.1     87.1        
Net income 154.7         154.7    
Other comprehensive income (loss), net of tax (2.7)       (2.7)      
Balance at end of period (shares) at Dec. 31, 2021     97.0          
Balance at end of period at Dec. 31, 2021 $ 2,251.5   $ 0.1 $ 2,504.5 $ 0.5 $ (47.4)   $ (206.2)
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Consolidated Statements of Cash Flows - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2021
Dec. 31, 2020
Dec. 31, 2019
Operating activities      
Net income $ 154.7 $ 493.6 $ 101.1
Adjustments to reconcile net income to cash provided by operating activities:      
Depreciation and amortization 102.0 67.1 48.7
Share-based compensation 113.4 119.4 102.7
Collaborative research and development fee 87.1 0.0 0.0
Loss on extinguishment of debt 1.5 5.9 0.0
Non-cash interest expense 88.7 74.0 49.6
Realized (gain) loss on equity investment (11.6) 0.0 4.2
Deferred income taxes (including benefit from valuation allowance release) (4.9) (277.3) 0.2
Other non-cash income and expenses 43.6 13.7 1.9
Changes in operating assets and liabilities:      
Accounts receivable, net (75.5) (142.3) (60.0)
Inventory (112.2) (114.5) (49.1)
Prepaid and other assets (21.3) (2.4) (7.2)
Operating lease right-of-use assets and liabilities, net (0.1) (0.8) (2.4)
Accounts payable and accrued liabilities 58.0 194.5 109.0
Accrued payroll and related expenses 10.4 26.1 16.0
Deferred revenue and other liabilities 8.7 18.6 (0.2)
Net cash provided by operating activities 442.5 475.6 314.5
Investing activities      
Purchase of marketable securities (2,473.1) (3,058.2) (2,030.4)
Proceeds from sale and maturity of marketable securities 2,666.3 2,250.5 1,196.4
Purchases of property and equipment (389.2) (199.0) (180.0)
Acquisitions, net of cash acquired (30.2) 0.0 0.0
Other investing activities 10.1 (11.3) (1.2)
Net cash used in investing activities (216.1) (1,018.0) (1,015.2)
Financing activities      
Net proceeds from issuance of common stock 20.3 15.3 11.9
Proceeds from issuance of convertible notes, net of issuance costs 0.0 1,188.8 0.0
Repurchase of convertible notes 0.0 (282.6) 0.0
Other financing activities (9.9) (9.4) (1.2)
Net cash provided by financing activities 10.4 912.1 10.7
Effect of exchange rate changes on cash, cash equivalents and restricted cash (1.4) 2.1 (0.7)
Increase (decrease) in cash, cash equivalents and restricted cash 235.4 371.8 (690.7)
Cash, cash equivalents and restricted cash, beginning of period 818.2 446.4 1,137.1
Cash, cash equivalents and restricted cash, end of period 1,053.6 818.2 446.4
Reconciliation of cash, cash equivalents and restricted cash, end of period:      
Cash and cash equivalents 1,052.6 817.6 446.2
Restricted cash 1.0 0.6 0.2
Total cash, cash equivalents and restricted cash 1,053.6 818.2 446.4
Supplemental disclosure of non-cash investing and financing transactions:      
Shares issued for repurchase and conversions of senior convertible notes 157.7 1,350.9 0.0
Shares received under note hedge upon conversion of 2023 Notes (130.8) 0.0 0.0
Acquisition of property and equipment included in accounts payable and accrued liabilities 45.4 35.3 14.2
Supplemental cash flow information:      
Cash paid during the year for interest 11.6 10.6 10.4
Cash paid during the year for income taxes $ 16.8 $ 3.6 $ 4.8
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Organization and Significant Accounting Policies
 12 Months Ended
Dec. 31, 2021
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
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. We have reclassified certain amounts previously reported in our financial statements to conform to the current presentation.
We determine the functional currencies of our international subsidiaries by reviewing the environment where each subsidiary primarily generates and expends cash. For international subsidiaries whose functional currencies are the local currencies, we translate the financial statements 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 and in accumulated other comprehensive income in the equity section of our consolidated balance sheets. We record gains and losses resulting from transactions with customers and vendors that are denominated in currencies other than the functional currency and from certain intercompany transactions in interest and other income (expense), net in our consolidated statements of operations.
Use of Estimates
The preparation of consolidated financial statements in conformity with U.S. generally accepted accounting principles, or 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 rebates, transaction price, the collectibility of accounts receivable, excess or obsolete inventories and the valuation of inventory, accruals for litigation contingencies, and the amount of our worldwide tax provision and the realizability of deferred tax assets. Despite our intention to establish accurate estimates and use reasonable assumptions, actual results may differ from our estimates.
Fair Value Measurements
The authoritative guidance establishes a fair value hierarchy that is based on the extent and level of judgment used to estimate the fair value of assets and liabilities. In general, the authoritative guidance requires us to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. An asset or liability’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the measurement of its fair value. The three levels of input defined by the authoritative guidance are as follows:
Level 1—Uses unadjusted quoted prices that are available in active markets for identical assets or liabilities.
Level 2—Uses inputs other than quoted prices included in Level 1 that are observable, either directly or indirectly, through correlation with market data. These include quoted prices in active markets for similar assets or liabilities; quoted prices for identical or similar assets or liabilities in markets that are not active; and inputs to valuation models or other pricing methodologies that do not require significant judgment because the inputs used in the model, such as interest rates and volatility, can be corroborated by readily observable market data for substantially the full term of the assets or liabilities.
Level 3—Uses unobservable inputs that are supported by little or no market activity and that are significant to the determination of fair value. Level 3 assets and liabilities include those whose fair values are determined using pricing models, discounted cash flow methodologies, or similar valuation techniques and significant judgment or estimation.
We estimate the fair value of most of our cash equivalents using Level 1 inputs. We estimate the fair value of our marketable equity securities using Level 1 inputs and we estimate the fair value of our marketable debt securities using Level 2 inputs. We carry our marketable securities at fair value. We carry our other financial instruments, such as cash and cash equivalents, accounts receivable, prepaid expenses and other current assets, accounts payable and accrued liabilities, at cost,
which approximates the related fair values due to the short-term maturities of these instruments. See Note 3 “Fair Value Measurements” for more information.
Cash and Cash Equivalents
We consider highly liquid investments with a maturity of 90 days or less at the time of purchase to be cash equivalents.
Marketable Securities
We have classified our marketable securities with remaining maturity at purchase of more than three months and remaining maturities of one year or less as short-term marketable securities. We have also classified marketable securities with remaining maturities of greater than one year as short-term marketable securities based upon our ability and intent to use any and all of those marketable securities to satisfy the liquidity needs of our current operations.
We calculate realized gains or losses on our marketable securities using the specific identification method. We carry our marketable debt securities at fair value with unrealized gains and losses reported as a separate component of stockholders’ equity in our consolidated balance sheets and included in comprehensive income. Realized gains and losses on marketable debt securities are included in interest and other income (expense), net in our consolidated statements of operations. We carry our marketable equity securities at fair value with realized and unrealized gains and losses reported in income (loss) from equity investments in our consolidated statements of operations.
We invest in various types of debt securities, including debt securities in government-sponsored entities, corporate debt securities, U.S. Treasury securities, supranational securities, and commercial paper. We do not generally 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. See Note 3 “Fair Value Measurements” and Short-Term Marketable Securities in Note 4 “Balance Sheet Details” for more information on our marketable securities.
Accounts Receivable and Allowance for Doubtful Accounts
Accounts receivable are generally recorded at the invoiced amount, net of prompt pay discounts, 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. Uncollectible accounts are written off against the allowance after appropriate collection efforts have been exhausted and when it is deemed that a customer account is uncollectible. Generally, receivable balances greater than one year past due are deemed uncollectible.
Concentration of Credit Risk and Significant Customers
Financial instruments which potentially subject us to concentrations of credit risk consist primarily of cash, cash equivalents, short-term marketable securities, and accounts receivable. We limit our exposure to credit risk by placing our cash and investments with a few major 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.
The following table sets forth the percentages of total revenue or gross accounts receivable for customers that represent 10% or more of the respective amounts for the periods shown:
RevenueGross Accounts Receivable
 Twelve Months Ended
December 31,		As of December 31,
20212020201920212020
Distributor A28 %23 %17 %16 %19 %
Distributor B12 %11 %12 %11 %10 %
Distributor C21 %18 %10 %13 %12 %
Distributor D18 %11 %*13 %*
* Less than 10%
Inventory
Inventory is valued at the lower of cost or net realizable value on a part-by-part basis that approximates first in, first out. We capitalize inventory produced in preparation for commercial launches when it becomes probable that the product will receive regulatory approval and that the related costs will be recoverable through the commercialization of the product. A number of factors are considered, including the status of the regulatory application approval process, management’s judgment of probable future commercial use, and net realizable value.
We record adjustments to inventory for potential excess or obsolete inventory, as well as inventory that does not pass quality control testing, in order to state inventory at net realizable value. Factors influencing these adjustments include inventories on hand and on order compared to estimated future usage and sales for existing and new products, as well as judgments regarding quality control testing data and assumptions about the likelihood of scrap and obsolescence. Once written down the adjustments are considered permanent and are not reversed until the related inventory is sold or disposed of.
Our products require customized products and components that currently are available from a limited number of sources. We purchase certain components and materials from single sources due to quality considerations, costs or constraints resulting from regulatory requirements.
Historically, our inventory reserves have been adequate to cover our actual losses. However, if actual product life cycles, product quality or market conditions differ from our assumptions, additional inventory adjustments that would increase cost of goods sold could be required.
Property and Equipment
Property and equipment is stated at cost less accumulated depreciation and amortization. We capitalize additions and improvements and expense maintenance and repairs as incurred. We also capitalize certain costs incurred for the development of enterprise-level business and finance software that we use internally in our operations. Costs incurred in the application development phase are capitalized while costs related to planning and other preliminary project activities and to post-implementation activities are expensed as incurred.
We calculate depreciation using the straight-line method over the estimated useful lives of the assets. Estimated useful lives are generally three years for computer software and hardware, including internal use software, four to fifteen years for machinery and equipment, and five years for furniture and fixtures. Leasehold improvements are amortized over the shorter of the estimated useful lives of the assets or the remaining lease term. Buildings are amortized over the shorter of the ownership of the building or forty years. We include the amortization of assets that are recorded under finance leases in depreciation expense. On retirement or disposition, the asset cost and related accumulated depreciation are removed from our consolidated balance sheets and any gain or loss is recognized in our consolidated statements of operations.
We review property and equipment for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. We estimate the recoverability of the asset by comparing the carrying amount to the future undiscounted cash flows that we expect the asset to generate. We estimate the fair value of the asset based on the present value of future cash flows for those assets. If the carrying value of an asset exceeds its estimated fair value, we would record an impairment loss equal to the difference.
Goodwill
We record goodwill when the fair value of consideration transferred in a business combination exceeds the fair value of the identifiable assets acquired and liabilities assumed. Goodwill and other intangible assets that have indefinite useful lives are not amortized, but we test them annually for impairment in the fourth quarter of our fiscal year and whenever events or changes in circumstances indicate that it is more likely than not that the fair value is less than the carrying value. Events that would indicate impairment and trigger an interim impairment assessment include, but are not limited to, current economic and market conditions, including a decline in market capitalization, a significant adverse change in legal factors, business climate or operational performance of the business, and an adverse action or assessment by a regulator.
We perform our goodwill impairment analysis at the reporting unit level, which aligns with Dexcom’s reporting structure and the availability of discrete financial information. We perform the first step of our annual impairment analysis by either comparing a reporting unit’s estimated fair value to its carrying amount or doing a qualitative assessment of a reporting unit’s fair value from the last quantitative assessment to determine if there is potential impairment. We may do a qualitative assessment when the results of the previous quantitative test indicated the reporting unit’s estimated fair value was significantly in excess of the carrying value of its net assets and we do not believe there have been significant changes in the reporting unit’s operations that would significantly decrease its estimated fair value or significantly increase its net assets. If a quantitative assessment is performed the evaluation includes management estimates of cash flow projections based on internal future
projections and/or use of a market approach by looking at market values of comparable companies. Key assumptions for these projections include revenue growth, future gross margin and operating margin growth, and weighted cost of capital and terminal growth rates. The revenue and margin growth are based on increased sales of new and existing products as we maintain investments in research and development. Additional assumed value creators may include increased efficiencies from capital spending. The resulting cash flows are discounted using a weighted average cost of capital. Operating mechanisms and requirements to ensure that growth and efficiency assumptions will ultimately be realized are also considered in the evaluation, including the timing and probability of regulatory approvals for our products to be commercialized. We also consider Dexcom’s market capitalization as a part of our analysis.
If the estimated fair value of a reporting unit exceeds the carrying amount of the net assets assigned to that unit, goodwill is not impaired and no further analysis is required. If the carrying value of the net assets assigned to a reporting unit exceeds the estimated fair value of the unit, we perform the second step of the impairment test. In this step we allocate the fair value of the reporting unit calculated in step one to all of the assets and liabilities of that unit, as if we had just acquired the reporting unit in a business combination. The excess of the fair value of the reporting unit over the total amount allocated to the assets and liabilities represents the implied fair value of goodwill. If the carrying amount of a reporting unit’s goodwill exceeds its implied fair value, we would record an impairment loss equal to the difference. We recorded no goodwill impairment charges for the twelve months ended December 31, 2021, 2020 or 2019.
The change in goodwill for the twelve months ended December 31, 2021 consisted of goodwill we recorded for acquisitions that were not significant, individually or in the aggregate, and translation adjustments on our foreign currency denominated goodwill. The change in goodwill for the twelve months ended December 31, 2020 and 2019 consisted of translation adjustments on our foreign currency denominated goodwill.
Intangible Assets and Other Long-Lived Assets
Intangible assets are included in intangibles and other assets, net in our consolidated balance sheets. We amortize intangible assets with a finite life, such as acquired technology, customer relationships, trade names and trademarks, on a straight-line basis over their estimated useful lives, which range from one to seven years. We review intangible assets that have finite lives and other long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. We estimate the fair value of the asset based on the present value of future cash flows for those assets. If the carrying value of an asset exceeds its estimated fair value, we would record an impairment loss equal to the difference.
For transactions other than a business combination, we also capitalize as intangible assets the cost of certain milestones payable by us to collaborative partners and incurred at or after the product has obtained regulatory approval for marketing. The intangible assets associated with these milestones are amortized over the remaining estimated useful life of the underlying asset.
We recorded no intangible asset impairment charges for the twelve months ended December 31, 2021, 2020 or 2019.
Income Taxes
We account for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. The effect of a change in tax rate on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date.
We recognize deferred tax assets to the extent that we believe that these assets are more likely than not to be realized. In making such determination, we consider all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, carryback potential if permitted under tax law and results of recent operations. If we determine that we would be able to realize our deferred tax assets in the future in excess of their net recorded amount, we would make an adjustment to the deferred tax asset valuation allowance, which would reduce the provision for income taxes.
We record uncertain tax positions in accordance with ASC 740 on the basis of a two-step process in which (1) we determine whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position and (2) for those tax positions that meet the more-likely-than-not recognition threshold, we recognize the largest amount of tax benefit that is more than 50 percent likely to be realized upon ultimate settlement with the related tax authority.
We file federal and state income tax returns in the United States and income tax returns in various other foreign jurisdictions with varying statutes of limitations. Due to net operating losses incurred, our income tax returns from inception to date are subject to examination by taxing authorities. We recognize interest expense and penalties related to income tax matters, including unrecognized tax benefits, as a component of income tax expense.
Warranty Accrual
Estimated warranty costs associated with a product are recorded at the time revenue is recognized. We estimate future warranty costs by analyzing historical warranty experience for the timing and amount of returned product, and expectations for future warranty activity based on changes and improvements to the product or process that are in place or will be in place in the future. We evaluate these estimates on at least a quarterly basis to determine the continued appropriateness of our assumptions.
Loss Contingencies
We are subject to certain legal proceedings, as well as demands, claims and threatened litigation that arise in the normal course of our business. We review the status of each significant matter quarterly and assess our potential financial exposure. If the potential loss from a claim or legal proceeding is considered probable and the amount can be reasonably estimated, we record a liability and an expense for the estimated loss and disclose it in our financial statements if it is significant. If we determine that a loss is possible and the range of the loss can be reasonably determined,we do not record a liability or an expense but we disclose the range of the possible loss. We base our judgments on the best information available at the time. As additional information becomes available, we reassess the potential liability related to our pending claims and litigation and may revise our estimates. Any revision of our estimates of potential liability could have a material impact on our financial position and operating results.
Comprehensive Income
Comprehensive income consists of two elements, net income and other comprehensive income (loss). We report all components of comprehensive income, including net income, in our financial statements in the period in which they are recognized. Total comprehensive income is defined as the change in equity during a period from transactions and other events and circumstances from non-owner sources. We report net income and the components of other comprehensive income (loss), including foreign currency translation adjustments and unrealized gains and losses on marketable securities, net of their related tax effect to arrive at total comprehensive income.
Revenue Recognition
We generate our revenue from the sale of disposable sensors and our reusable transmitter and receiver, collectively referred to as Reusable Hardware. We also refer to Reusable Hardware and disposable sensors in this section as Components. We generally recognize revenue when control is transferred to our customers in an amount that reflects the net consideration to which we expect to be entitled.
In determining how revenue should be recognized, a five-step process is used, which includes identifying performance obligations in the contract, determining whether the performance obligations are separate, allocating the transaction price to each separate performance obligation, estimating the amount of variable consideration to include in the transaction price and determining the timing of revenue recognition for separate performance obligations.
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 Dexcom Share® 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
We include an estimate of variable consideration in the calculation of the transaction price at the time of sale, when control of the Components transfers to the customer. Variable consideration includes but is not limited to: rebates, chargebacks, consideration payable to customers such as specialty distributor and wholesaler fees, product returns provision, prompt payment discounts, and various other promotional or incentive arrangements. We classify our provisions related to variable consideration as a reduction of accounts receivable when we are not required to make a payment or as a liability when we are required to make a payment.
Estimates
We review the adequacy of our estimates for transaction price adjustments and variable consideration at each reporting date. If the actual amounts of consideration that we receive differ from our estimates, we would adjust our estimates and that would affect reported revenue in the period that such variances become known. If any of these judgments were to change, it could cause a material increase or decrease in the amount of revenue we report in a particular period.
Rebates
We are subject to rebates on pricing programs with managed care organizations, such as pharmacy benefit managers, governmental and third-party commercial payors, primarily in the U.S. We estimate provisions for rebates based on contractual arrangements, estimates of products sold subject to rebate, known events or trends, and channel inventory data.
Chargebacks
We participate in chargeback programs, primarily with government entities in the U.S., under which pricing on products below negotiated list prices is provided to participating entities and equal to the difference between their acquisition cost and the lower negotiated price. We estimate provisions for chargebacks primarily based on historical experience on a product and program basis, current contract prices under the chargeback programs, and channel inventory data.
Consideration Payable to the Customer
We pay administrative and service fees to certain of our distributors based on a fixed percentage of the product price. These fees are not in exchange for a distinct good or service and therefore are recognized as a reduction of the transaction price. We accrue for these fees based on actual net sales and contractual fee rates negotiated with the customer.
Product Returns
In accordance with the terms of their distribution agreements, most distributors do not have rights of return. 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. We estimate our product returns provision principally based on historical experience by applying a historical return rate to the amounts of revenue estimated to be subject to returns. Additionally, we consider other specific factors such as estimated shelf life of inventory in the distribution channel and changes to customer terms.
Prompt Payment Discounts
We provide customers with prompt payment discounts which may result in adjustments to the price that is invoiced for the product transferred, in the case that payments are made within a defined period. We estimate prompt payment discount accruals based on actual net sales and contractual discount rates.
Various Other Promotional or Incentive Arrangements
Other promotional or incentive arrangements are periodically offered to customers, including but not limited to co-payment assistance we provide to patients with commercial insurance, promotional programs related to the launch of products, or other targeted promotions. We record a provision for the incentive earned based on the number of estimated claims and our estimate of the cost per claim related to product sales that we have recognized as revenue.
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 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.
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 December 31, 2021 included unbilled accounts receivable of $9.6 million. We expect to invoice and collect all unbilled accounts receivable within twelve 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.
Our performance obligations are generally satisfied within 12 months of the initial contract date. The deferred revenue balances related to performance obligations that will be satisfied after 12 months was $16.1 million as of December 31, 2021 and $8.2 million as of December 31, 2020. These balances are included in other long-term liabilities in our consolidated balance sheets. Revenue recognized in the period from performance obligations satisfied in previous periods was not material for the periods presented.
Deferred Cost of Sales
Deferred cost of sales are associated with transactions 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.
Product Shipment Costs
We record the amounts we charge our customers for the shipping and handling of our products in revenue and we record the related costs as cost of sales in our consolidated statements of operations.
Research and Development
We expense costs of research and development as we incur them. Our research and development expenses primarily consist of engineering and research expenses related to our continuous glucose monitoring technology, clinical trials, regulatory expenses, quality assurance programs, materials and products for clinical trials. Research and development expenses primarily consist of employee compensation, including salary, fringe benefits, share-based compensation, and temporary employee expenses. We also incur significant expenses to operate our clinical trials that include clinical site reimbursement, clinical trial product, and associated travel expenses. Our research and development expenses also include fees for design services, contractors, and development materials.
Our CGM systems include certain software that we develop. We expense software development costs as we incur them until technological feasibility has been established, at which time we capitalize development costs until the product is available for general release to customers. To date, our software has been available for general release concurrent with the establishment of technological feasibility and, accordingly, we have not capitalized any development costs.
Collaboration Agreements
We may enter into agreements with collaboration partners for the development and commercialization of our products. These arrangements may include payments contingent on the occurrence of certain events such as development, regulatory or sales-based milestones.
When we account for these agreements, we consider the unique nature, terms and facts and circumstances of each transaction. Below are some example activities and how we account for them:
•Payments to collaboration partners through issuance of common stock as consideration in an asset acquisition are considered share-based payment to non-employees in exchange for goods within the scope of ASC Topic 718, “Compensation - Stock Compensation”. The amount and the timing of the cost recognition of such milestones in our financial statements is driven by the accounting for the specific type of equity instrument under ASC 718 that aligns with the terms of the agreement, including any performance conditions.
•The value associated with in-process research and development (“IPR&D”) in an asset acquisition incurred prior to regulatory approval is expensed as it does not have an alternative future use and is recorded as research and development expense.
•The value associated with IPR&D in an asset acquisition incurred at or after regulatory approval is usually capitalized as an intangible asset and amortized over the periods in which the related products are expected to contribute to future cash flows.
Advertising Costs
We expense costs to produce advertising as we incur them whereas costs to communicate advertising are expensed when the advertising is first run. Advertising costs are included in selling, general and administrative expenses. Advertising expense was $126.4 million, $76.5 million and $33.1 million for the twelve months ended December 31, 2021, 2020 and 2019, respectively.
Leases
We determine if an arrangement is a lease at inception. Lease right-of-use assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease right-of-use assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. The interest rate used to determine the present value of the future lease payments is our incremental borrowing rate, because the interest rate implicit in most of our leases is not readily determinable. Our incremental borrowing rate is estimated to approximate the interest rate on a collateralized basis with similar terms and payments, and in similar economic environments. The operating lease right-of-use asset also includes any lease payments made and excludes lease incentives. We have lease agreements with lease and non-lease components, which are generally accounted for separately. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term. Variable lease payments that do not depend on a rate or index, payments associated with non-lease components, and costs related to leases with terms of less than 12 months are expensed as incurred.
Share-Based Compensation
Share-based compensation expense is measured at the grant date based on the estimated fair value of the award and is recognized straight-line over the requisite service period of the individual grants, which typically equals the vesting period.
We value time-based restricted stock units or RSUs at the date of grant using the intrinsic value method. Certain RSUs granted to senior management vest based on the achievement of pre-established performance or market goals. We estimate the fair value of performance/market-based RSUs at the date of grant using the intrinsic value method and the probability that the specified performance criteria will be met. We update our assessment of the probability that the specified performance criteria will be achieved each quarter and adjust our estimate of the fair value of the performance-based RSUs if necessary. The Monte Carlo methodology that we use to estimate the fair value of market-based RSUs at the date of grant incorporates into the valuation the possibility that the market condition may not be satisfied. Provided that the requisite service is rendered, the total fair value of the market-based RSUs at the date of grant must be recognized as compensation expense even if the market condition is not achieved. However, the number of shares that ultimately vest can vary significantly with the performance of the specified market criteria.
If any of the assumptions used change significantly, share-based compensation expense may differ materially from what we have recorded in the current period.
We account for forfeitures as they occur by reversing any share-based compensation expense related to awards that will not vest.
Net Income Per Share
Basic net income per share attributable to common stockholders is calculated by dividing the net income attributable to common stockholders by the weighted-average number of common shares outstanding during the period. Diluted net income 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. In periods of net losses, we exclude all potentially dilutive common shares from the computation of the diluted net loss per share for those periods as the effect would be anti-dilutive.
The following table sets forth the computation of basic and diluted net income per share for the periods shown.
Twelve Months Ended
December 31,
(In millions)202120202019
Net income$154.7 $493.6 $101.1 
Net income per common share
Basic$1.60 $5.23 $1.11 
Diluted$1.55 $5.06 $1.10 
Basic weighted average shares outstanding96.7 94.4 91.1 
Dilutive potential common stock outstanding:
Restricted stock units0.5 1.0 1.2 
Warrants2.9 2.1 — 
Diluted weighted average shares outstanding100.1 97.5 92.3 
Outstanding anti-dilutive securities not included in the diluted net income per share attributable to common stockholders calculations were as follows:
Twelve Months Ended
December 31,
(In millions)202120202019
Restricted stock units— — 0.2 
Warrants— — 5.2 
Senior convertible notes6.8 7.2 9.2 
Total6.8 7.2 14.6 
Recent Accounting Guidance
Recently Adopted Accounting Pronouncements
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. Our adoption of ASU 2019-12 at the beginning of the first quarter of 2021 did not have a significant impact on our consolidated financial statements.
Recently Issued Accounting Pronouncements Not Yet Adopted
In August 2020, the FASB issued ASU No. 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40). This new guidance is intended to reduce the complexity of accounting for convertible instruments. The guidance also addresses how convertible instruments are accounted for in the diluted earnings per share calculation and requires enhanced disclosures about the terms of convertible instruments. Entities may adopt ASU 2020-06 using either a partial retrospective or fully retrospective method of transition. This ASU is effective for public business entities for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. Early adoption is permitted for fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. We will adopt ASU 2020-06 in the first quarter of 2022, and expect to use the full retrospective method, reflecting the application of the new standard in each prior reporting period. We have started the process of evaluating the impact of the full retrospective adoption of ASU 2020-06 on our consolidated financial statements. We continue to evaluate the effect of ASU 2020-06 on our consolidated financial statements. Under ASU 2020-06, we will account for our senior convertible notes entirely as a liability and will no longer separately account for them with liability and equity components. Therefore, we will no longer recognize a debt discount for the value of the conversion option, instead we will record the face value of our senior convertible notes as a liability on our consolidated balance sheet.
The derecognition of the unamortized debt discount will result in an increase in the Long-term senior convertible notes on our consolidated balance sheet. The elimination of the separation model for the convertible debt instruments is expected to reduce additional paid-in capital. As the separation of the embedded conversion feature will no longer be amortized into income as interest expense, non-cash interest expense will decrease by the full amount of the previous accretion of debt discount, offset by incremental interest expense from amortization of debt issuance costs that were allocated to the equity component. We will finalize our retrospective presentation of our historical financial statements under the new standard in connection with our Form 10-Q filings during fiscal year 2022 and our Form 10-K for the fiscal year ending December 31, 2022.
In October 2021, the FASB issued ASU No. 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers. This guidance is intended improve the accounting for acquired revenue contracts with customers in a business combination. The new guidance requires that the acquirer recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Topic 606. ASU 2021-08 is effective for public business entities for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years, and early adoption is permitted. The amendments should be applied prospectively to business combinations occurring on or after the the adoption date. We are currently evaluating the impact that this guidance will have on our consolidated financial statements.
v3.22.0.1
Development and Other Agreements
 12 Months Ended
Dec. 31, 2021
Commitments and Contingencies Disclosure [Abstract]  
Development and Other Agreements
2. Development and Other Agreements
Collaboration with Verily Life Sciences
On November 20, 2018, we entered into an Amended and Restated Collaboration and License Agreement with Verily Life Sciences LLC (an Alphabet Company) and Verily Ireland Limited (collectively, Verily), which we refer to as the Restated Collaboration Agreement. This replaced our original Collaboration and License Agreement with Verily dated August 10, 2015, as amended in October 2016, including the royalty obligations provisions under that original agreement. Pursuant to the Restated Collaboration Agreement, we and Verily have agreed to continue to jointly develop a certain next-generation CGM product, and potentially one or more additional CGM products, for which we will have exclusive commercialization rights.
The Restated Collaboration Agreement also provides us with an exclusive license to use intellectual property of Verily resulting from the collaboration, and certain Verily patents, in the development, manufacture and commercialization of blood-based or interstitial glucose monitoring products more generally (subject to certain exclusions, which are outside of the CGM field as it is commonly understood). It also provides us with non-exclusive license rights under Verily’s other intellectual property rights to develop, manufacture and commercialize those kinds of glucose monitoring products and certain CGM-product companion software functionalities. The Restated Collaboration Agreement requires us to use commercially reasonable efforts to develop, launch and commercialize the CGM product(s) that are the subject of the collaboration according to certain timing and other objectives, and provides for one executive sponsor from each of Dexcom and Verily to meet periodically and make decisions related to the collaboration (within a limited scope of authority) by consensus.
In consideration of Verily’s performance of its obligations under the joint development plan of the Restated Collaboration Agreement, the licenses granted to us and the amendment of the original agreement, we have made upfront and incentive payments and we will make potential future payments for contingent milestones upon the achievement of certain goals.
In the fourth quarter of 2018, we made an initial payment for an upfront fee of $250.0 million through the issuance of 1,840,943 shares of our common stock. We recorded a $217.7 million charge in our consolidated statements of operations during 2018 relating to the issuance of this common stock because this milestone payment did not meet the capitalization criteria. The value of the charge was based on our closing stock price of $118.28 per share on December 28, 2018, the date on
which we obtained the necessary regulatory approvals and represents the date the performance- based awards were issued. In 2019, we made a cash incentive payments of $3.2 million due to the completion of certain development obligations and we recorded these payments as research and development expense in our consolidated statements of operations.
Upon the first regulatory approval of our next CGM system, a milestone payment equivalent to 736,377 shares of our common stock will become payable. Additional sales-based milestone payments equivalent to 1,288,660 shares of our common stock may become due and payable upon achievement of certain revenue targets. All milestones may be paid in cash or shares of our common stock, at our election. If we elect to make these milestone payments in cash, any such cash payment would be equal to the number of shares that would otherwise be issued for the given milestone payment multiplied by the value of our stock on the date the relevant milestone is achieved, adjusted for stock splits, dividends, and the like. We intend to pay the regulatory and sales-based contingent milestones in shares of our common stock.
We account for the contingent milestones payable in shares of our common stock as equity instruments within the scope of ASC Topic 718. The regulatory and sales-based milestones are accounted for as performance-based awards that vest when the performance conditions have been achieved and will be recognized if and when the achievement of the respective contingent milestones are deemed probable. The value of the contingent milestones is based on our closing stock price of $118.28 per share on December 28, 2018.
In the fourth quarter of 2021, we determined the achievement of the regulatory approval milestone to be probable and recorded an $87.1 million research and development charge in our consolidated statements of operations. This charge is associated with IPR&D obtained in an asset acquisition prior to regulatory approval and therefore does not have an alternative future use. The sales-based milestones are contingent upon the achievement of certain revenue targets for a future commercial product. As of December 31, 2021, we have not determined the achievement of the sales-based milestones to be probable and as such, no cost has been recognized for these milestones.
The Restated Collaboration Agreement will continue until December 31, 2028, unless terminated by either party upon uncured material breach of the Restated Collaboration Agreement by the other party. Upon achievement of the first sales-based milestone event and payment of the corresponding milestone fee by us, the term of the Restated Collaboration Agreement will be extended until December 31, 2033.
v3.22.0.1
Fair Value Measurements
 12 Months Ended
Dec. 31, 2021
Fair Value Disclosures [Abstract]  
Fair Value Measurements
3. Fair Value Measurements
Assets and Liabilities Measured at Fair Value on a Recurring Basis
We estimate the fair value of our Level 1 financial instruments, which are in active markets, using unadjusted quoted market prices for identical instruments.
We obtain the fair values for our Level 2 financial instruments, which are not in active markets, from a primary professional pricing source that uses quoted market prices for identical or comparable instruments, rather than direct observations of quoted prices in active markets. Fair values obtained from this professional pricing source can also be based on pricing models whereby all significant observable inputs, including maturity dates, issue dates, settlement dates, benchmark yields, reported trades, broker-dealer quotes, issue spreads, benchmark securities, bids, offers or other market related data, are observable or can be derived from, or corroborated by, observable market data for substantially the full term of the asset. We validate the quoted market prices provided by our primary pricing service by comparing the fair values of our Level 2 marketable securities portfolio balance provided by our primary pricing service against the fair values provided by our investment managers.
The following table summarizes financial assets that we measured at fair value on a recurring basis as of December 31, 2021, classified in accordance with the fair value hierarchy:
Fair Value Measurements Using
(In millions)Level 1Level 2Level 3Total
Cash equivalents$791.4 $40.0 $— $831.4 
Debt securities, available-for-sale:
U.S. government agencies— 1,210.6 — 1,210.6 
Commercial paper— 189.7 — 189.7 
Corporate debt— 224.3 — 224.3 
Supranationals— 54.0 — 54.0 
Total debt securities, available-for-sale— 1,678.6 — 1,678.6 
Other assets (1)
7.0 — — 7.0 
Total assets measured at fair value on a recurring basis$798.4 $1,718.6 $— $2,517.0 
(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, 2020, classified in accordance with the fair value hierarchy:
Fair Value Measurements Using
(In millions)Level 1Level 2Level 3Total
Cash equivalents$491.5 $150.0 $— $641.5 
Debt securities, available-for-sale:
U.S. government agencies— 1,570.4 — 1,570.4 
Commercial paper— 258.8 — 258.8 
Corporate debt— 60.9 — 60.9 
Total debt securities, available-for-sale— 1,890.1 — 1,890.1 
Other assets (1)
3.4 — — 3.4 
Total assets measured at fair value on a recurring basis$494.9 $2,040.1 $— $2,535.0 
(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 into or out of Level 3 securities during the twelve months ended December 31, 2021 and 2020.
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 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 inputs), of our senior convertible notes were as follows as of the dates indicated:
Fair Value Measurements Using Level 1
(In millions)December 31, 2021December 31, 2020
Senior Convertible Notes due 2023$2,589.6 $1,936.4 
Senior Convertible Notes due 20251,432.9 1,219.2 
Total fair value of outstanding senior convertible notes$4,022.5 $3,155.6 
For more information on the carrying values of our senior convertible notes, see Senior Convertible Notes in Note 5 to the consolidated financial statements.
Foreign Currency and Derivative Financial Instruments
From time to time we use foreign currency contracts to manage foreign currency risks. Our foreign currency contracts are not designated as hedges and, therefore, changes in the fair values of these derivatives are recognized in earnings, thereby offsetting the current earnings effect of the related foreign currency assets and liabilities. 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 (expense), net in our consolidated statements of operations.
As of December 31, 2021 and December 31, 2020, notional amounts of $40.0 million and $48.0 million, respectively, were outstanding to hedge certain foreign currency risk. The resulting impact on our consolidated financial statements from currency hedging activities was not significant for the twelve months ended December 31, 2021, 2020 and 2019.
Our foreign currency exposures vary but are primarily concentrated in the Australian Dollar, the British Pound, the Canadian Dollar, the Euro and the Malaysian Ringgit. 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
In accordance with authoritative guidance, we measure certain non-financial assets and liabilities at fair value on a non-recurring basis. These measurements are usually performed using the discounted cash flow method or cost method and Level 3 inputs. 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 are indicators of impairment and are recorded at fair value only when an impairment is recognized. We recorded no significant impairment losses during the twelve months ended December 31, 2021, 2020 and 2019.
v3.22.0.1
Balance Sheet Details
 12 Months Ended
Dec. 31, 2021
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Balance Sheet Details
4. Balance Sheet Details
Short-Term Marketable Securities
Short-term marketable securities, consisting of available-for-sale debt securities, were as follows as of the dates indicated:
December 31, 2021
(In millions)Amortized
Cost		Gross
Unrealized
Gains		Gross
Unrealized
Losses		Estimated
Market
Value
Debt securities, available-for-sale:
U.S. government agencies$1,212.1 $— $(1.5)$1,210.6 
Commercial paper189.8 — (0.1)189.7 
Corporate debt224.6 — (0.3)224.3 
Supranationals54.1 — (0.1)54.0 
Total debt securities, available-for-sale$1,680.6 $— $(2.0)$1,678.6 
December 31, 2020
(In millions)Amortized
Cost		Gross
Unrealized
Gains		Gross
Unrealized
Losses		Estimated
Market
Value
Debt securities, available-for-sale:
U.S. government agencies$1,570.4 $0.1 $(0.1)$1,570.4 
Commercial paper258.7 0.1 — 258.8 
Corporate debt60.9 — — 60.9 
Total debt securities, available-for-sale$1,890.0 $0.2 $(0.1)$1,890.1 
As of December 31, 2021, the estimated market value of our debt securities with contractual maturities up to 12 months and up to 18 months were $1.36 billion and $320.7 million, respectively. As of December 31, 2020, all of our debt securities had contractual maturities of less than 12 months. Gross realized gains and losses on sales of our debt securities for the twelve months ended December 31, 2021, 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 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 at December 31, 2021 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 not 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.
Equity Investments
During the twelve months ended December 31, 2021, 2020 and 2019, we had no unrealized gains or losses recognized during the reporting period on equity investments. Realized gains from the sale of an equity investment were $11.6 million for the twelve months ended December 31, 2021.
Accounts Receivable
December 31,
(In millions)20212020
Accounts receivable$519.7 $435.7 
Less allowance for doubtful accounts(5.4)(7.2)
Total accounts receivable, net$514.3 $428.5 
Reserve for prompt payment cash discounts recorded against accounts receivable, excluding allowance for doubtful accounts, was $13.7 million, $15.9 million, $4.6 million as of December 31, 2021, 2020, and 2019, respectively.
Inventory
December 31,
(In millions)20212020
Raw materials$145.2 $69.9 
Work-in-process16.2 14.2 
Finished goods195.9 150.6 
Total inventory$357.3 $234.7 
During the twelve months ended December 31, 2021, 2020 and 2019, we recorded excess and obsolete inventory charges of $28.1 million, $24.4 million and $14.1 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.
The raw materials inventory balance of $145.2 million as of December 31, 2021 includes $5.5 million of pre-launch inventory related to our next CGM product.
Prepaid and Other Current Assets
Prepaid and other current assets were $81.6 million and $53.9 million as of December 31, 2021 and 2020, respectively. The increase in prepaid assets is driven primarily due to an increase in software and inventory related prepaid expenses.
Property and Equipment
December 31,
(In millions)20212020
Land (1)
$15.6 $15.6 
Building (1)
49.1 49.2 
Furniture and fixtures30.7 15.3 
Computer software and hardware52.7 35.7 
Machinery and equipment272.9 198.9 
Leasehold improvements251.6 135.8 
Construction in progress 360.7 219.0 
Total cost1,033.3 669.5 
Less accumulated depreciation and amortization(231.5)(154.2)
Total property and equipment, net$801.8 $515.3 
(1) Represents finance lease right-of-use assets.
Depreciation expense related to property and equipment for the twelve months ended December 31, 2021, 2020 and 2019 was $96.3 million, $64.0 million and $46.9 million, respectively.
Loss on disposal of property and equipment during the twelve months ended December 31, 2021, 2020 and 2019 recorded in operating expenses was $24.5 million, $13.6 million and $10.5 million, respectively.
 Intangibles and Other Assets, Net
We recorded net intangible assets of $22.6 million, consisting primarily of customer-related relationships, as result of an acquisition in the third quarter of 2021.
Accounts Payable and Accrued Liabilities
December 31,
(In millions)20212020
Accounts payable trade$196.0 $163.3 
Accrued tax, audit, and legal fees40.7 15.3 
Accrued rebates 260.5 247.0 
Accrued warranty12.9 11.7 
Contractual obligations15.0 — 
Other accrued liabilities 47.9 43.8 
Total accounts payable and accrued liabilities$573.0 $481.1 
Accrued Payroll and Related Expenses
December 31,
(In millions)20212020
Accrued wages, bonus and taxes$91.8 $87.7 
Other accrued employee benefits33.4 26.6 
Total accrued payroll and related expenses$125.2 $114.3 
Accrued Warranty
Warranty costs are reflected in our statements of operations as cost of sales. Reconciliations of our accrued warranty costs for the twelve months ended December 31, 2021, 2020 and 2019 were as follows:
Twelve Months Ended
December 31,
(In millions)202120202019
Beginning balance$11.7 $7.4 $6.8 
Charges to costs and expenses41.5 41.3 32.7 
Costs incurred(40.3)(37.0)(32.1)
Ending balance$12.9 $11.7 $7.4 
Other Long-Term Liabilities
December 31,
(In millions)20212020
Finance lease obligations$57.0 $54.0 
Contractual obligations— 12.6 
Deferred tax liabilities5.9 — 
Other liabilities27.1 14.3 
Total other long-term liabilities$90.0 $80.9 
v3.22.0.1
Debt
 12 Months Ended
Dec. 31, 2021
Debt Disclosure [Abstract]  
Debt
5. Debt
Senior Convertible Notes
The carrying amounts of our senior convertible notes were as follows as of the dates indicated:
December 31,
(Dollars in millions)20212020
Principal amount:
Senior Convertible Notes due 2023$792.3 $850.0 
Senior Convertible Notes due 20251,207.5 1,207.5 
Total principal amount1,999.8 2,057.5 
Unamortized debt discount(282.7)(371.1)
Unamortized debt issuance costs(14.4)(19.2)
Carrying amount of liability component$1,702.7 $1,667.2 
Carrying value of equity component$449.4 $461.0 
Remaining amortization period of debt discount on the liability component:
Senior Convertible Notes due 20231.9 years2.9 years
Senior Convertible Notes due 20253.9 years4.9 years
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:
December 31,
(In millions)20212020
Senior Convertible Notes due 2023$1,797.3 $1,077.5 
Senior Convertible Notes due 2025141.8 — 
Total by which the notes’ if-converted value exceeds their principal amount$1,939.1 $1,077.5 
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.
Twelve Months Ended
December 31,
(Dollars in millions)202120202019
Cash interest expense:
Contractual coupon interest (1)(2)
$9.3 $9.3 $9.3 
Non-cash interest expense:
Accretion of debt discount83.0 68.6 45.8 
Amortization of debt issuance costs4.4 4.0 3.7 
Total interest expense recognized on senior notes$96.7 $81.9 $58.8 
Effective interest rates:
Senior Convertible Notes due 2022 (2)
*5.1 %5.1 %
Senior Convertible Notes due 20235.6 %5.6 %5.6 %
Senior Convertible Notes due 20255.5 %5.5 %*
(1) Interest on the 2022 Notes began accruing upon issuance and was 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.
(2) The effective interest rate presented represents the rate applicable for the period outstanding. Our $400.0 million aggregate principal amount of unsecured senior convertible notes issued in June 2017 with a stated interest rate of 0.75% and maturity date of May 15, 2022 (the 2022 Notes) were repurchased and converted by August 2020.
* Not applicable as no notes were outstanding at this 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). Holders of $140.0 million in aggregate principal amount of the 2022 Notes elected conversion at their option during the twelve months ended December 31, 2020. We settled these conversions by issuing 1,412,497 shares of our common stock.
As a result of the repurchase and conversions of the 2022 Notes, we recorded a loss on extinguishment of debt of $5.9 million for the twelve months ended December 31, 2020. The loss on extinguishment of debt included the unamortized debt issuance costs for the 2022 Notes.
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.
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.
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 $171.6 million in additional paid-in capital, net of debt issuance costs, during 2018.
Holders of $57.7 million in aggregate principal amount of the 2023 Notes elected conversion at their option during the twelve months ended December 31, 2021. We settled these conversions by issuing a combination of common stock and treasury stock. We issued 350,778 shares to settle the converted 2023 Notes during the twelve months ended December 31, 2021, of which 198,647 shares were issued out of treasury stock. As a result of the elected conversions, we recorded a loss on extinguishment of debt of $1.4 million. We received 241,845 shares of common stock from the exercise of a portion of the 2023 Note Hedge that we purchased concurrently with the issuance of the 2023 Notes, as described below.
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 quarters ended December 31, 2020, March 31, 2021, June 30, 2021, and September 30, 2021. As a result, the 2023 Notes were convertible at the option of the holder from January 1, 2021 through December 31, 2021. Circumstance (1) listed above also occurred during the quarter ended December 31, 2021 and as a result, the 2023 Notes will remain convertible at the option of the holder from January 1, 2022 through March 31, 2022. See above for a description of conversion activity related to the 2023 Notes.
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. See above for a description of conversion activity related to the 2023 Notes and shares received as the result of exercising a portion of the 2023 Note Hedge.
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.
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.
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, net of debt issuance costs, during 2020.
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
In October 2021, we entered into a Second Amended and Restated Credit Agreement (the Amended Credit Agreement), which amended and restated the credit agreement we had previously entered into in December 2018 and amended in May 2020 (the Credit Agreement). The Amended Credit Agreement is a five-year revolving credit facility that provides for an 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. The Amended Credit Agreement will mature on October 13, 2026. Borrowings under the Amended Credit Agreement are available for general corporate purposes, including working capital and capital expenditures.
Information related to availability and outstanding borrowings on our Amended Credit Agreement is as follows as of the date indicated:
December 31,
(In millions)2021
Available principal amount $200.0 
Letters of credit sub-facility25.0 
Outstanding borrowings — 
Outstanding letters of credit7.3 
Total available balance$192.7 
Revolving loans under the Amended Credit Agreement bear interest at our choice of one of three base rates plus a range of applicable rates that are based on our leverage ratio. The first base rate is the Alternate Base Rate (“ABR”) and loans comprising each ABR borrowing shall bear interest at the ABR plus the applicable rate between 0.375% to 1.000%. The ABR is the highest of (a) the prime rate last quoted by The Wall Street Journal, (b) the Federal Reserve Bank of New York (“NYFRB”) rate plus one half of 1%, and (c) the Adjusted London Interbank Offered Rate (“LIBO Rate”) for a one month interest period plus 1%. The second base rate is the Term Benchmark rate and loans comprising each Term Benchmark borrowing shall bear interest at the Adjusted LIBO Rate, the Adjusted Euro Interbank Offered Rate (“EURIBOR Rate”), the Adjusted Stockholm Interbank Offered Rate (“STIBOR Rate”), the Adjusted Canadian Dollar Offered Rate (“CDOR”), Adjusted Australian Dollar (“AUD”) Rate, the Adjusted Bank Bill Benchmark Rate (“BKBM Rate”) or the Adjusted Tokyo Interbank Offered Rate (“TIBOR Rate”), as applicable based on the currency denomination borrowed, plus the applicable rate between 1.375% to 2.000% . The third base rate is the Daily Simple RepoFunds Rate (“RFR”) and loans comprising each Daily Simple RFR Loan shall bear interest at a rate per annum equal to the applicable Daily Simple RFR plus the applicable rate between 1.375% to 2.000% plus an additional 0.0326%. We will also pay a commitment fee of between 0.175% and 0.250%, payable quarterly in arrears, on the average daily unused amount of the revolving facility based on our leverage ratio.
Our obligations under the Amended 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 Amended 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 Amended 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 December 31, 2021.
v3.22.0.1
Leases And Other Commitments
 12 Months Ended
Dec. 31, 2021
Leases [Abstract]  
Leases And Other Commitments
6. Leases And Other Commitments
Leases
We lease office, manufacturing and warehouse space facilities under various domestic and international non-cancellable operating and finance lease arrangements. We also have a land lease in Penang, Malaysia, that expires in 2080, for the build-out of our international manufacturing facility. Our leases, excluding our land lease in Penang, Malaysia, have remaining lease terms of up to nineteen years, some of which include one or more options to extend the leases for up to five years per option. Options to extend the lease are included in the lease liability if they are reasonably certain of being exercised. Leases are classified as operating or financing at lease commencement.
Operating lease right-of-use assets and lease liabilities are presented separately in our consolidated balance sheets. Finance lease right-of-use assets are included in property and equipment and finance lease liabilities are included in accounts payable and accrued liabilities and in other long-term liabilities in our consolidated balance sheets.
As of December 31, 2021, the maturities of our operating and finance lease liabilities were as shown in the table below:
(In millions)Operating LeasesFinance Leases
2022$25.7 $6.3 
202325.2 6.4 
202423.5 5.4 
202522.5 4.8 
202622.3 4.9 
Thereafter17.2 64.0 
Total future lease cost (1)
136.4 91.8 
Less: Imputed interest (17.3)(31.5)
Present value of future payments119.1 60.3 
Less: Current portion(20.5)(3.3)
Long-term portion$98.6 $57.0 
Certain lease agreements require us to return designated areas of leased space to its original condition upon termination of the lease agreement, for which we record an asset retirement obligation and a corresponding capital asset in an amount equal to the estimated fair value of the obligation. In subsequent periods, the asset retirement obligation is accreted for the change in its present value and the capitalized asset is depreciated, both over the term of the associated lease agreement. Asset retirement obligations of $7.4 million and $4.5 million as of December 31, 2021 and 2020, respectively, are included in other long-term liabilities in our consolidated balance sheets.
The components of lease expense for the twelve months ended December 31, 2021, 2020 and 2019 were as follows:
Twelve Months Ended
December 31,
(In millions) 202120202019
Finance lease cost:
Amortization of right-of-use assets$4.1 $2.0 $1.1 
Interest on lease liabilities3.0 1.9 0.8 
Operating lease cost23.3 18.4 12.2 
Short-term lease cost (1)
2.3 1.3 3.5 
Variable lease cost (2)
6.0 4.2 3.9 
Total lease cost$38.7 $27.8 $21.5 
(1) Short-term lease cost is primarily related to temporary office space associated with the transition of certain operations to the Philippines.
(2) Variable lease costs are primarily related to common area maintenance charges and property taxes.
Other information related to our leases is as follows:
Twelve Months Ended
December 31,
(Dollars in millions)202120202019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases$23.3 $18.3 $14.3 
Operating cash flows from finance leases1.9 0.7 0.8 
Financing cash flows from finance leases9.9 8.5 0.5 
Right-of-use assets obtained in exchange for lease liabilities:
Operating leases13.1 33.5 80.6 
Finance leases$6.4 $41.7 $15.5 
Weighted average remaining lease term:
Operating leases5.5 years6.1 years6.2 years
Finance leases15.9 years23.3 years13.3 years
Weighted average discount rate:
Operating leases5.0 %5.0 %5.0 %
Finance leases5.1 %5.0 %5.0 %
Amortization of operating lease right-of-use asset included in cash flows from operating activities in our consolidated statements of cash flows was $18.0 million for the twelve months ended December 31, 2021, $12.4 million for the twelve months ended December 31, 2020 and $9.1 million for the twelve months ended December 31, 2019.
Purchase Commitments
We are party to various purchase arrangements related to our manufacturing and research and development activities. We had approximately $324.1 million as of December 31, 2021 and $335.6 million as of December 31, 2020 of open purchase orders and contractual obligations in the ordinary course of business, the majority of which are due within one year
Leases And Other Commitments
6. Leases And Other Commitments
Leases
We lease office, manufacturing and warehouse space facilities under various domestic and international non-cancellable operating and finance lease arrangements. We also have a land lease in Penang, Malaysia, that expires in 2080, for the build-out of our international manufacturing facility. Our leases, excluding our land lease in Penang, Malaysia, have remaining lease terms of up to nineteen years, some of which include one or more options to extend the leases for up to five years per option. Options to extend the lease are included in the lease liability if they are reasonably certain of being exercised. Leases are classified as operating or financing at lease commencement.
Operating lease right-of-use assets and lease liabilities are presented separately in our consolidated balance sheets. Finance lease right-of-use assets are included in property and equipment and finance lease liabilities are included in accounts payable and accrued liabilities and in other long-term liabilities in our consolidated balance sheets.
As of December 31, 2021, the maturities of our operating and finance lease liabilities were as shown in the table below:
(In millions)Operating LeasesFinance Leases
2022$25.7 $6.3 
202325.2 6.4 
202423.5 5.4 
202522.5 4.8 
202622.3 4.9 
Thereafter17.2 64.0 
Total future lease cost (1)
136.4 91.8 
Less: Imputed interest (17.3)(31.5)
Present value of future payments119.1 60.3 
Less: Current portion(20.5)(3.3)
Long-term portion$98.6 $57.0 
Certain lease agreements require us to return designated areas of leased space to its original condition upon termination of the lease agreement, for which we record an asset retirement obligation and a corresponding capital asset in an amount equal to the estimated fair value of the obligation. In subsequent periods, the asset retirement obligation is accreted for the change in its present value and the capitalized asset is depreciated, both over the term of the associated lease agreement. Asset retirement obligations of $7.4 million and $4.5 million as of December 31, 2021 and 2020, respectively, are included in other long-term liabilities in our consolidated balance sheets.
The components of lease expense for the twelve months ended December 31, 2021, 2020 and 2019 were as follows:
Twelve Months Ended
December 31,
(In millions) 202120202019
Finance lease cost:
Amortization of right-of-use assets$4.1 $2.0 $1.1 
Interest on lease liabilities3.0 1.9 0.8 
Operating lease cost23.3 18.4 12.2 
Short-term lease cost (1)
2.3 1.3 3.5 
Variable lease cost (2)
6.0 4.2 3.9 
Total lease cost$38.7 $27.8 $21.5 
(1) Short-term lease cost is primarily related to temporary office space associated with the transition of certain operations to the Philippines.
(2) Variable lease costs are primarily related to common area maintenance charges and property taxes.
Other information related to our leases is as follows:
Twelve Months Ended
December 31,
(Dollars in millions)202120202019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases$23.3 $18.3 $14.3 
Operating cash flows from finance leases1.9 0.7 0.8 
Financing cash flows from finance leases9.9 8.5 0.5 
Right-of-use assets obtained in exchange for lease liabilities:
Operating leases13.1 33.5 80.6 
Finance leases$6.4 $41.7 $15.5 
Weighted average remaining lease term:
Operating leases5.5 years6.1 years6.2 years
Finance leases15.9 years23.3 years13.3 years
Weighted average discount rate:
Operating leases5.0 %5.0 %5.0 %
Finance leases5.1 %5.0 %5.0 %
Amortization of operating lease right-of-use asset included in cash flows from operating activities in our consolidated statements of cash flows was $18.0 million for the twelve months ended December 31, 2021, $12.4 million for the twelve months ended December 31, 2020 and $9.1 million for the twelve months ended December 31, 2019.
Purchase Commitments
We are party to various purchase arrangements related to our manufacturing and research and development activities. We had approximately $324.1 million as of December 31, 2021 and $335.6 million as of December 31, 2020 of open purchase orders and contractual obligations in the ordinary course of business, the majority of which are due within one year
v3.22.0.1
Contingencies
 12 Months Ended
Dec. 31, 2021
Commitments and Contingencies Disclosure [Abstract]  
Contingencies
7. Contingencies
Litigation
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, intellectual property 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.
During the fiscal year ended December 31, 2021, we and certain Abbott entities served complaints for patent infringement, validity and other patent related actions against each other in multiple jurisdictions, inside and outside the United States. We intend to vigorously pursue our claims and defenses in these cases to protect our intellectual property and to defend against Abbott’s infringement allegations.
We do not believe we are party to any other 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.
v3.22.0.1
Income Taxes
 12 Months Ended
Dec. 31, 2021
Income Tax Disclosure [Abstract]  
Income Taxes
8. Income Taxes
Income (loss) before income taxes subject to taxes in the following jurisdictions is as follows:
Twelve Months Ended
December 31,
(In millions)202120202019
United States$235.3 $270.7 $119.1 
Outside of the United States(61.4)(45.7)(14.9)
Total$173.9 $225.0 $104.2 
Significant components of the provision for income taxes are as follows:
Twelve Months Ended
December 31,
(In millions)202120202019
Current:
Federal$5.7 $— $— 
State8.3 6.1 1.0 
Foreign10.1 2.6 1.9 
Total current income taxes24.1 8.7 2.9 
Deferred:
Federal5.5 (198.8)— 
State(3.4)(51.4)— 
Foreign(7.0)(27.1)0.2 
Total deferred income taxes(4.9)(277.3)0.2 
Total$19.2 $(268.6)$3.1 
Significant loss and tax credit carryforwards and years of expiration are as follows:
December 31,Year of Expiration
(In millions)20212020
Net operating loss:
Federal$38.0 $169.1 2027
California236.3 236.3 2029
Other states21.3 36.1 2029
UK102.4 113.2 Indefinite
Tax credits:
Federal
R&D credits80.1 73.1 2026
Foreign tax credits1.5 — 2031
California R&D credits$81.4 $66.2 Indefinite
On June 29, 2020, California’s Governor Newsom signed AB 85 into law, suspending California net operating loss utilization and imposing a $5.0 million cap on the amount of business incentive tax credits companies can utilize, effective for tax years 2020 through 2022. As a result of the legislation, we are utilizing $2.2 million of California research and development credits for the tax year ended December 31, 2021.
Utilization of net operating losses and credit carryforwards is subject to an annual limitation due to ownership change limitations provided by Section 382 and 383 of the Internal Revenue Code of 1986, as amended, and similar state provisions. An ownership change limitation occurred as a result of the stock offering completed in February 2009. The limitation will result in approximately $1.8 million of U.S. research and development tax credits that will expire unused. The related deferred tax
assets have been removed from the components of our deferred tax assets as summarized in the table below. The tax benefits related to the remaining federal and state net operating losses and tax credit carryforwards may be further limited or lost if future cumulative changes in ownership exceed 50% within any three-year period.
Significant components of our deferred tax assets and liabilities as of December 31, 2021 and 2020 are shown below. Significant judgment is required to evaluate the need for a valuation allowance against deferred tax assets. We review all available positive and negative evidence, including projections of pre-tax book income, earnings history, reliability of forecasting, and reversal of temporary differences. A valuation allowance is established when it is more likely than not that some or all of the deferred tax assets will not be realized. Realization of deferred tax assets is dependent upon future earnings in applicable tax jurisdictions.
December 31,
(In millions)20212020
Deferred tax assets:
Net operating loss carryforwards$53.0 $69.2 
Capitalized research and development expenses49.3 53.6 
Tax credits105.5 101.1 
Share-based compensation13.3 13.0 
Fixed and intangible assets26.4 16.9 
Accrued liabilities and reserves105.5 110.3 
Collaborative agreement milestone accrual (1)
21.9 — 
Other 0.5 — 
Total gross deferred tax assets375.4 364.1 
Less: valuation allowance(69.9)(55.5)
Total net deferred tax assets305.5 308.6 
Deferred tax liabilities:
Fixed assets and acquired intangibles assets(42.5)(36.3)
Convertible debt discount(48.1)(55.9)
Total deferred tax liabilities(90.6)(92.2)
Net deferred tax assets (liabilities)$214.9 $216.4 
(1) This amount is related to the $87.1 million charge recorded in the fourth quarter of 2021 associated with our Restated Collaboration Agreement with Verily, as discussed in Note 2 to the consolidated financial statements.
The current year change in net deferred tax assets of $1.5 million is primarily comprised of purchase accounting adjustments of $7.3 million recorded in goodwill and $0.5 million tax effect of unrealized loss on investments recorded in other comprehensive income, offset by $4.9 million of deferred tax benefit recorded through income tax expense and $1.1 million of convertible debt adjustments recorded as a reduction to additional paid-in capital.
We maintain a valuation allowance of $69.9 million against our California research and development tax credits, foreign tax credits, and certain foreign intangible assets.
The reconciliation between our effective tax rate on income (loss) from continuing operations and the statutory rate is as follows:
Twelve Months Ended
December 31,
(In millions)202120202019
U.S. federal statutory tax rate$36.5 $47.3 $21.9 
State income tax, net of federal benefit5.6 3.2 (2.3)
Permanent items26.2 13.1 1.0 
Research and development credits(28.9)(24.4)(10.8)
Foreign tax credit(3.7)— — 
Foreign rate differential(0.1)(0.1)5.6 
Stock and officers compensation(20.4)(28.7)(14.7)
Change in statutory tax rates(10.0)(4.1)— 
Other(0.4)0.1 (1.0)
Change in valuation allowance14.4 (275.0)3.4 
Income taxes at effective rates
$19.2 $(268.6)$3.1 
We have elected to account for Global Intangible Low-Taxed Income (“GILTI”) in the period the tax is incurred.
The following table summarizes the activity related to our gross unrecognized tax benefits:
(In millions)
Balance at January 1, 2019$25.9 
Decreases related to prior year tax positions(0.9)
Increases related to current year tax positions4.5 
Balance at December 31, 201929.5 
Decreases related to prior year tax positions (0.9)
Increases related to current year tax positions8.0 
Balance at December 31, 202036.6 
Increases related to prior year tax positions0.4 
Increases related to current year tax positions9.8 
Balance at December 31, 2021$46.8 
Of the total unrecognized tax benefits at December 31, 2021, 2020, and 2019, $29.5 million, $23.5 million, and $0, respectively, would reduce our annual effective tax rate if recognized. Interest and penalties are classified as a component of income tax expense and were not material for any period presented. Although the timing and outcome of audit settlements are uncertain, it is unlikely there will be a significant reduction of the uncertain tax benefits in the next twelve months.
Due to our global business activities, we file income tax returns and are subject to routine compliance audits in numerous jurisdictions, including those material jurisdictions listed in the following table. The U.S. net operating losses generated since 1999 and utilized in recent years are open for examination. The years remaining subject to audit, by major jurisdiction, are as follows:
JurisdictionFiscal Year
United States (Federal and state) 1999 - 2021
Germany 2016 - 2021
United Kingdom 2016 - 2021
Canada 2017 - 2021
We operate under a tax holiday in the Philippines, which is effective through December 31, 2023, and may be extended for another three years if certain additional requirements are satisfied. The tax holiday is conditional upon remaining in good standing, committing no violation of Philippine Economic Zone Authority Rules and Regulations, pertinent circulars and directives. The impact of this tax holiday was immaterial in in 2021 and 2020. We have been granted an investment tax
allowance incentive by the Malaysian Investment Development Authority (MIDA) in Malaysia, which is effective through December 31, 2025. The tax incentive had no effect on foreign taxes during 2021 or 2020.

We have approximately $15.3 million of undistributed earnings attributable to operations in our controlled foreign corporations as of December 31, 2021. We assert that any foreign earnings will be indefinitely reinvested. Accordingly, we have not recorded a liability for taxes associated with these undistributed earnings. If we determine that all or a portion of such foreign earnings are no longer indefinitely reinvested, we may be subject to additional foreign withholding taxes and U.S. state income taxes. Determination of the amount of unrecognized deferred tax liability on these unremitted earnings is not practicable.
v3.22.0.1
Employee Benefit Plans and Stockholders' Equity
 12 Months Ended
Dec. 31, 2021
Share-based Payment Arrangement [Abstract]  
Employee Benefit Plans and Stockholders' Equity
9. Employee Benefit Plans and Stockholders’ Equity
401(k) Plan
We have a defined contribution 401(k) retirement plan (the 401(k) Plan) covering substantially all employees in the United States that meet certain age requirements. Employees who participate in the 401(k) Plan may contribute up to 90% of their compensation each year, subject to Internal Revenue Service limitations and the terms and conditions of the plan. Under the terms of the 401(k) Plan, we may elect to match a discretionary percentage of contributions. We match 50% of contributions up to 5% of annual compensation. Total matching contributions were $9.9 million, $6.7 million and $4.8 million for the twelve months ended December 31, 2021, 2020 and 2019, respectively.
Employee Stock Purchase Plan (“ESPP”)
Under the 2015 Employee Stock Purchase Plan (the 2015 ESPP), amended in December 2019, eligible employees may purchase shares of our common stock at semi-annual intervals through periodic payroll deductions during defined Offering Periods. Payroll deductions may not exceed 10% of the participant’s cash compensation subject to certain limitations, and the purchase price will be 85% of the lower of the fair market value of the common stock at either the beginning of the applicable Offering Period or the Purchase Date. A total of 1.5 million shares of common stock are reserved for issuance under the 2015 ESPP. The 2015 ESPP shall continue until the earlier to occur of (a) termination of the 2015 ESPP by our Board of Directors, (b) issuance of all of the shares of common stock reserved for issuance under the plan, or (c) May 28, 2025.
We issued 59,810, 89,194 and 150,408 shares of common stock under the 2015 ESPP during the twelve months ended December 31, 2021, 2020 and 2019, respectively. As of December 31, 2021, approximately 0.8 million shares remained available for future issuance under the 2015 ESPP.
Equity Incentive Plans
In May 2015, we adopted the Amended and Restated 2015 Equity Incentive Plan (the 2015 Plan), which replaced our 2005 Equity Incentive Plan and provides for the grant of incentive and nonstatutory stock options, restricted stock, stock bonuses, stock appreciation rights, restricted stock units or RSUs, and performance stock units or PSUs to employees, directors or consultants of the Company. On May 30, 2019, our stockholders approved an increase to the maximum number of shares that may be issued under the 2015 Plan.
We are authorized to issue up to 9.8 million shares of our common stock under the 2015 Plan. As of December 31, 2021, approximately 4.2 million shares remained available for future issuance under the 2015 Plan.
RSU awards typically vest in annual installments over three or four years and vesting is subject to continued service. PSUs are granted to a group of senior officers and the number of shares of our common stock to be received at vesting will range from 0% to 200% of the target award based on the achievement of pre-established performance and market goals. PSUs vest three years from the date of grant, subject to continued employment through that date.
Treasury Stock
Repurchased shares of our common stock are held as treasury shares until they are reissued or retired. When we reissue treasury stock, if the proceeds from the sale are more than the average price we paid to acquire the shares we record an increase in additional paid-in capital. Conversely, if the proceeds from the sale are less than the average price we paid to acquire the shares, we record a decrease in additional paid-in capital to the extent of increases previously recorded for similar transactions and a decrease in retained earnings for any remaining amount.
We issue new shares of common stock to satisfy RSU and PSU vesting under our employee equity incentive plans. We repurchased 0.8 million shares of our common stock in 2018. No shares of our common stock were repurchased during 2019 or 2020. Treasury stock increased by 43,198 net shares during 2021 as a result of shares received from the exercise of a portion of the 2023 Note Hedge less the issuance of shares to settle the converted 2023 Notes. We have not yet determined the ultimate disposition of our treasury shares and consequently we continue to hold them as treasury shares rather than retiring them.
Stock Options
We have not granted any stock options since 2010. As of December 31, 2021 and December 31, 2020, we had no stock options outstanding. The total intrinsic value of stock options exercised during the twelve months ended December 31, 2020 and 2019 was $7.9 million and $7.4 million, respectively.
Equity Award Activity
A summary of RSU and PSU activity under the 2015 Plan for the twelve months ended December 31, 2021, 2020 and 2019 is as follows:
Nonvested RSU and PSU Activity
(In millions except weighted average grant date fair value)Shares Available for GrantSharesWeighted 
Average
Grant Date
Fair Value		Aggregate
Intrinsic Value
Balance at December 31, 20183.2 2.7 $69.19 
Additional shares authorized2.2 — 
Granted(0.7)0.7 144.37 
Vested— (1.4)69.45 
Forfeited0.2 (0.2)83.45 
Balance at December 31, 20194.9 1.8 96.63 $392.0 
Granted(0.5)0.5 300.36 
Vested— (1.0)92.07 
Forfeited0.1 (0.1)137.44 
Balance at December 31, 20204.5 1.2 183.51 430.6 
Granted(0.4)0.4 351.32 
Vested— (0.7)137.90 
Forfeited0.1 (0.1)279.12 
Balance at December 31, 20214.2 0.8 $307.86 $411.3 
The total vest-date fair value of RSUs and PSUs that vested during the twelve months ended December 31, 2021, 2020 and 2019 was $284.5 million, $331.8 million and $207.2 million, respectively. As of December 31, 2021, 0.7 million unvested RSUs and 0.1 million unvested PSUs were outstanding under the 2015 Plan.
Share-based Compensation
Our share-based compensation expense is associated with RSUs, PSUs, and the 2015 ESPP. The following table summarizes the share-based compensation expense included in our consolidated statements of operations for the periods shown.
Twelve Months Ended
December 31,
(In millions)202120202019
Cost of sales$8.5 $14.6 $9.0 
Research and development41.0 37.8 33.5 
Selling, general and administrative63.9 67.0 60.2 
Total share-based compensation expense$113.4 $119.4 $102.7 
We value RSUs at the date of grant using the intrinsic value method. We estimate the fair value of PSUs at the date of grant using the intrinsic value method and the probability that the specified performance criteria will be met. We estimate the fair value of ESPP purchase rights on the date of grant using the Black-Scholes option pricing model and the assumptions below for the specified reporting periods.
 Twelve Months Ended
December 31,
202120202019
Risk free interest rate
0.06% - 0.07%
0.13% - 0.95%
1.72% - 2.55%
Dividend yield— %— %— %
Expected volatility of Dexcom common stock
36% - 45%
51% - 63%
40% - 51%
Expected life (in years)0.50.51
At December 31, 2021, unrecognized estimated compensation costs related to RSUs, PSUs, and the 2015 ESPP totaled $157.8 million and are expected to be recognized through 2024.
v3.22.0.1
Business Segment and Geographic Information
 12 Months Ended
Dec. 31, 2021
Segment Reporting [Abstract]  
Business Segment and Geographic Information
10. 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
We disaggregate revenue by geographic region and by major sales channel. We have determined that disaggregating revenue into these categories achieves the ASC Topic 606 disclosure objectives of depicting how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors.
Dexcom is domiciled in the United States. We sell our CGM systems through a direct sales force in United States, Australia, Canada, New Zealand, 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.
Revenue by geographic region
During the twelve months ended December 31, 2021, 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 revenue 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 components. The majority of our long-lived assets are located in the United States.
Twelve Months Ended December 31,
202120202019
(Dollars in millions)Amount%
of Total		Amount%
of Total		Amount%
of Total
United States$1,849.4 76 %$1,509.5 78 %$1,161.5 79 %
Outside of the United States599.1 24 %417.2 22 %314.5 21 %
Total revenue$2,448.5 100 %$1,926.7 100 %$1,476.0 100 %
Revenue by customer sales channel
The following table sets forth revenue by major sales channel for the twelve months ended December 31, 2021, 2020 and 2019:
Twelve Months Ended December 31,
202120202019
(Dollars in millions)Amount%
of Total		Amount%
of Total		Amount%
of Total
Distributor$2,024.3 83 %$1,437.6 75 %$1,011.6 69 %
Direct424.2 17 %489.1 25 %464.4 31 %
Total revenue$2,448.5 100 %$1,926.7 100 %$1,476.0 100 %
v3.22.0.1
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
 12 Months Ended
Dec. 31, 2021
SEC Schedule, 12-09, Valuation and Qualifying Accounts [Abstract]  
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
DexCom, Inc.
SCHEDULE II – VALUATION AND QUALIFYING ACCOUNTS
(In millions)
Allowance for doubtful accounts
Balance at December 31, 2018$7.2 
Provision for doubtful accounts0.9 
Write-offs and adjustments(3.0)
Recoveries0.7 
Balance at December 31, 2019$5.8 
Allowance for doubtful accounts
Balance at December 31, 2019$5.8 
Provision for doubtful accounts3.2 
Write-offs and adjustments(2.1)
Recoveries0.3 
Balance at December 31, 2020$7.2 
Allowance for doubtful accounts
Balance at December 31, 2020$7.2 
Provision for doubtful accounts(1.4)
Write-offs and adjustments(0.5)
Recoveries0.1 
Balance at December 31, 2021$5.4 
v3.22.0.1
Organization and Significant Accounting Policies (Policies)
 12 Months Ended
Dec. 31, 2021
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Basis of Presentation
Basis of Presentation and Principles of Consolidation
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. We have reclassified certain amounts previously reported in our financial statements to conform to the current presentation.
We determine the functional currencies of our international subsidiaries by reviewing the environment where each subsidiary primarily generates and expends cash. For international subsidiaries whose functional currencies are the local currencies, we translate the financial statements 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 and in accumulated other comprehensive income in the equity section of our consolidated balance sheets. We record gains and losses resulting from transactions with customers and vendors that are denominated in currencies other than the functional currency and from certain intercompany transactions in interest and other income (expense), net in our consolidated statements of operations
Principles of Consolidation
Basis of Presentation and Principles of Consolidation
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. We have reclassified certain amounts previously reported in our financial statements to conform to the current presentation.
We determine the functional currencies of our international subsidiaries by reviewing the environment where each subsidiary primarily generates and expends cash. For international subsidiaries whose functional currencies are the local currencies, we translate the financial statements 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 and in accumulated other comprehensive income in the equity section of our consolidated balance sheets. We record gains and losses resulting from transactions with customers and vendors that are denominated in currencies other than the functional currency and from certain intercompany transactions in interest and other income (expense), net in our consolidated statements of operations.
Use of Estimates
Use of Estimates
The preparation of consolidated financial statements in conformity with U.S. generally accepted accounting principles, or 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 rebates, transaction price, the collectibility of accounts receivable, excess or obsolete inventories and the valuation of inventory, accruals for litigation contingencies, and the amount of our worldwide tax provision and the realizability of deferred tax assets. Despite our intention to establish accurate estimates and use reasonable assumptions, actual results may differ from our estimates.
Fair Value Measurements
Fair Value Measurements
The authoritative guidance establishes a fair value hierarchy that is based on the extent and level of judgment used to estimate the fair value of assets and liabilities. In general, the authoritative guidance requires us to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. An asset or liability’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the measurement of its fair value. The three levels of input defined by the authoritative guidance are as follows:
Level 1—Uses unadjusted quoted prices that are available in active markets for identical assets or liabilities.
Level 2—Uses inputs other than quoted prices included in Level 1 that are observable, either directly or indirectly, through correlation with market data. These include quoted prices in active markets for similar assets or liabilities; quoted prices for identical or similar assets or liabilities in markets that are not active; and inputs to valuation models or other pricing methodologies that do not require significant judgment because the inputs used in the model, such as interest rates and volatility, can be corroborated by readily observable market data for substantially the full term of the assets or liabilities.
Level 3—Uses unobservable inputs that are supported by little or no market activity and that are significant to the determination of fair value. Level 3 assets and liabilities include those whose fair values are determined using pricing models, discounted cash flow methodologies, or similar valuation techniques and significant judgment or estimation.
We estimate the fair value of most of our cash equivalents using Level 1 inputs. We estimate the fair value of our marketable equity securities using Level 1 inputs and we estimate the fair value of our marketable debt securities using Level 2 inputs. We carry our marketable securities at fair value. We carry our other financial instruments, such as cash and cash equivalents, accounts receivable, prepaid expenses and other current assets, accounts payable and accrued liabilities, at cost,
which approximates the related fair values due to the short-term maturities of these instruments. See Note 3 “Fair Value Measurements” for more information.
Cash and Cash Equivalents
Cash and Cash Equivalents
We consider highly liquid investments with a maturity of 90 days or less at the time of purchase to be cash equivalents.
Marketable Securities
Marketable Securities
We have classified our marketable securities with remaining maturity at purchase of more than three months and remaining maturities of one year or less as short-term marketable securities. We have also classified marketable securities with remaining maturities of greater than one year as short-term marketable securities based upon our ability and intent to use any and all of those marketable securities to satisfy the liquidity needs of our current operations.
We calculate realized gains or losses on our marketable securities using the specific identification method. We carry our marketable debt securities at fair value with unrealized gains and losses reported as a separate component of stockholders’ equity in our consolidated balance sheets and included in comprehensive income. Realized gains and losses on marketable debt securities are included in interest and other income (expense), net in our consolidated statements of operations. We carry our marketable equity securities at fair value with realized and unrealized gains and losses reported in income (loss) from equity investments in our consolidated statements of operations.
We invest in various types of debt securities, including debt securities in government-sponsored entities, corporate debt securities, U.S. Treasury securities, supranational securities, and commercial paper. We do not generally 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.
Accounts Receivables and Allowance for Doubtful Accounts
Accounts Receivable and Allowance for Doubtful Accounts
Accounts receivable are generally recorded at the invoiced amount, net of prompt pay discounts, 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. Uncollectible accounts are written off against the allowance after appropriate collection efforts have been exhausted and when it is deemed that a customer account is uncollectible. Generally, receivable balances greater than one year past due are deemed uncollectible.
Concentration of Credit Risk and Significant Customers
Concentration of Credit Risk and Significant Customers
Financial instruments which potentially subject us to concentrations of credit risk consist primarily of cash, cash equivalents, short-term marketable securities, and accounts receivable. We limit our exposure to credit risk by placing our cash and investments with a few major 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.
Inventory
Inventory
Inventory is valued at the lower of cost or net realizable value on a part-by-part basis that approximates first in, first out. We capitalize inventory produced in preparation for commercial launches when it becomes probable that the product will receive regulatory approval and that the related costs will be recoverable through the commercialization of the product. A number of factors are considered, including the status of the regulatory application approval process, management’s judgment of probable future commercial use, and net realizable value.
We record adjustments to inventory for potential excess or obsolete inventory, as well as inventory that does not pass quality control testing, in order to state inventory at net realizable value. Factors influencing these adjustments include inventories on hand and on order compared to estimated future usage and sales for existing and new products, as well as judgments regarding quality control testing data and assumptions about the likelihood of scrap and obsolescence. Once written down the adjustments are considered permanent and are not reversed until the related inventory is sold or disposed of.
Our products require customized products and components that currently are available from a limited number of sources. We purchase certain components and materials from single sources due to quality considerations, costs or constraints resulting from regulatory requirements.
Historically, our inventory reserves have been adequate to cover our actual losses. However, if actual product life cycles, product quality or market conditions differ from our assumptions, additional inventory adjustments that would increase cost of goods sold could be required.
Property and Equipment
Property and Equipment
Property and equipment is stated at cost less accumulated depreciation and amortization. We capitalize additions and improvements and expense maintenance and repairs as incurred. We also capitalize certain costs incurred for the development of enterprise-level business and finance software that we use internally in our operations. Costs incurred in the application development phase are capitalized while costs related to planning and other preliminary project activities and to post-implementation activities are expensed as incurred.
We calculate depreciation using the straight-line method over the estimated useful lives of the assets. Estimated useful lives are generally three years for computer software and hardware, including internal use software, four to fifteen years for machinery and equipment, and five years for furniture and fixtures. Leasehold improvements are amortized over the shorter of the estimated useful lives of the assets or the remaining lease term. Buildings are amortized over the shorter of the ownership of the building or forty years. We include the amortization of assets that are recorded under finance leases in depreciation expense. On retirement or disposition, the asset cost and related accumulated depreciation are removed from our consolidated balance sheets and any gain or loss is recognized in our consolidated statements of operations.
We review property and equipment for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. We estimate the recoverability of the asset by comparing the carrying amount to the future undiscounted cash flows that we expect the asset to generate. We estimate the fair value of the asset based on the present value of future cash flows for those assets. If the carrying value of an asset exceeds its estimated fair value, we would record an impairment loss equal to the difference.
Goodwill and Intangible Assets and Other Long-Lived Assets
Goodwill
We record goodwill when the fair value of consideration transferred in a business combination exceeds the fair value of the identifiable assets acquired and liabilities assumed. Goodwill and other intangible assets that have indefinite useful lives are not amortized, but we test them annually for impairment in the fourth quarter of our fiscal year and whenever events or changes in circumstances indicate that it is more likely than not that the fair value is less than the carrying value. Events that would indicate impairment and trigger an interim impairment assessment include, but are not limited to, current economic and market conditions, including a decline in market capitalization, a significant adverse change in legal factors, business climate or operational performance of the business, and an adverse action or assessment by a regulator.
We perform our goodwill impairment analysis at the reporting unit level, which aligns with Dexcom’s reporting structure and the availability of discrete financial information. We perform the first step of our annual impairment analysis by either comparing a reporting unit’s estimated fair value to its carrying amount or doing a qualitative assessment of a reporting unit’s fair value from the last quantitative assessment to determine if there is potential impairment. We may do a qualitative assessment when the results of the previous quantitative test indicated the reporting unit’s estimated fair value was significantly in excess of the carrying value of its net assets and we do not believe there have been significant changes in the reporting unit’s operations that would significantly decrease its estimated fair value or significantly increase its net assets. If a quantitative assessment is performed the evaluation includes management estimates of cash flow projections based on internal future
projections and/or use of a market approach by looking at market values of comparable companies. Key assumptions for these projections include revenue growth, future gross margin and operating margin growth, and weighted cost of capital and terminal growth rates. The revenue and margin growth are based on increased sales of new and existing products as we maintain investments in research and development. Additional assumed value creators may include increased efficiencies from capital spending. The resulting cash flows are discounted using a weighted average cost of capital. Operating mechanisms and requirements to ensure that growth and efficiency assumptions will ultimately be realized are also considered in the evaluation, including the timing and probability of regulatory approvals for our products to be commercialized. We also consider Dexcom’s market capitalization as a part of our analysis.
If the estimated fair value of a reporting unit exceeds the carrying amount of the net assets assigned to that unit, goodwill is not impaired and no further analysis is required. If the carrying value of the net assets assigned to a reporting unit exceeds the estimated fair value of the unit, we perform the second step of the impairment test. In this step we allocate the fair value of the reporting unit calculated in step one to all of the assets and liabilities of that unit, as if we had just acquired the reporting unit in a business combination. The excess of the fair value of the reporting unit over the total amount allocated to the assets and liabilities represents the implied fair value of goodwill. If the carrying amount of a reporting unit’s goodwill exceeds its implied fair value, we would record an impairment loss equal to the difference. We recorded no goodwill impairment charges for the twelve months ended December 31, 2021, 2020 or 2019.
The change in goodwill for the twelve months ended December 31, 2021 consisted of goodwill we recorded for acquisitions that were not significant, individually or in the aggregate, and translation adjustments on our foreign currency denominated goodwill. The change in goodwill for the twelve months ended December 31, 2020 and 2019 consisted of translation adjustments on our foreign currency denominated goodwill.
Intangible Assets and Other Long-Lived Assets
Intangible assets are included in intangibles and other assets, net in our consolidated balance sheets. We amortize intangible assets with a finite life, such as acquired technology, customer relationships, trade names and trademarks, on a straight-line basis over their estimated useful lives, which range from one to seven years. We review intangible assets that have finite lives and other long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. We estimate the fair value of the asset based on the present value of future cash flows for those assets. If the carrying value of an asset exceeds its estimated fair value, we would record an impairment loss equal to the difference.
For transactions other than a business combination, we also capitalize as intangible assets the cost of certain milestones payable by us to collaborative partners and incurred at or after the product has obtained regulatory approval for marketing. The intangible assets associated with these milestones are amortized over the remaining estimated useful life of the underlying asset.
We recorded no intangible asset impairment charges for the twelve months ended December 31, 2021, 2020 or 2019.
Income Taxes
Income Taxes
We account for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. The effect of a change in tax rate on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date.
We recognize deferred tax assets to the extent that we believe that these assets are more likely than not to be realized. In making such determination, we consider all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, carryback potential if permitted under tax law and results of recent operations. If we determine that we would be able to realize our deferred tax assets in the future in excess of their net recorded amount, we would make an adjustment to the deferred tax asset valuation allowance, which would reduce the provision for income taxes.
We record uncertain tax positions in accordance with ASC 740 on the basis of a two-step process in which (1) we determine whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position and (2) for those tax positions that meet the more-likely-than-not recognition threshold, we recognize the largest amount of tax benefit that is more than 50 percent likely to be realized upon ultimate settlement with the related tax authority.
We file federal and state income tax returns in the United States and income tax returns in various other foreign jurisdictions with varying statutes of limitations. Due to net operating losses incurred, our income tax returns from inception to date are subject to examination by taxing authorities. We recognize interest expense and penalties related to income tax matters, including unrecognized tax benefits, as a component of income tax expense.
Warranty Accrual
Warranty Accrual
Estimated warranty costs associated with a product are recorded at the time revenue is recognized. We estimate future warranty costs by analyzing historical warranty experience for the timing and amount of returned product, and expectations for future warranty activity based on changes and improvements to the product or process that are in place or will be in place in the future. We evaluate these estimates on at least a quarterly basis to determine the continued appropriateness of our assumptions.
Loss Contingencies
Loss Contingencies
We are subject to certain legal proceedings, as well as demands, claims and threatened litigation that arise in the normal course of our business. We review the status of each significant matter quarterly and assess our potential financial exposure. If the potential loss from a claim or legal proceeding is considered probable and the amount can be reasonably estimated, we record a liability and an expense for the estimated loss and disclose it in our financial statements if it is significant. If we determine that a loss is possible and the range of the loss can be reasonably determined,we do not record a liability or an expense but we disclose the range of the possible loss. We base our judgments on the best information available at the time. As additional information becomes available, we reassess the potential liability related to our pending claims and litigation and may revise our estimates. Any revision of our estimates of potential liability could have a material impact on our financial position and operating results.
Comprehensive Income
Comprehensive Income
Comprehensive income consists of two elements, net income and other comprehensive income (loss). We report all components of comprehensive income, including net income, in our financial statements in the period in which they are recognized. Total comprehensive income is defined as the change in equity during a period from transactions and other events and circumstances from non-owner sources. We report net income and the components of other comprehensive income (loss), including foreign currency translation adjustments and unrealized gains and losses on marketable securities, net of their related tax effect to arrive at total comprehensive income.
Revenue Recognition
Revenue Recognition
We generate our revenue from the sale of disposable sensors and our reusable transmitter and receiver, collectively referred to as Reusable Hardware. We also refer to Reusable Hardware and disposable sensors in this section as Components. We generally recognize revenue when control is transferred to our customers in an amount that reflects the net consideration to which we expect to be entitled.
In determining how revenue should be recognized, a five-step process is used, which includes identifying performance obligations in the contract, determining whether the performance obligations are separate, allocating the transaction price to each separate performance obligation, estimating the amount of variable consideration to include in the transaction price and determining the timing of revenue recognition for separate performance obligations.
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 Dexcom Share® 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
We include an estimate of variable consideration in the calculation of the transaction price at the time of sale, when control of the Components transfers to the customer. Variable consideration includes but is not limited to: rebates, chargebacks, consideration payable to customers such as specialty distributor and wholesaler fees, product returns provision, prompt payment discounts, and various other promotional or incentive arrangements. We classify our provisions related to variable consideration as a reduction of accounts receivable when we are not required to make a payment or as a liability when we are required to make a payment.
Estimates
We review the adequacy of our estimates for transaction price adjustments and variable consideration at each reporting date. If the actual amounts of consideration that we receive differ from our estimates, we would adjust our estimates and that would affect reported revenue in the period that such variances become known. If any of these judgments were to change, it could cause a material increase or decrease in the amount of revenue we report in a particular period.
Rebates
We are subject to rebates on pricing programs with managed care organizations, such as pharmacy benefit managers, governmental and third-party commercial payors, primarily in the U.S. We estimate provisions for rebates based on contractual arrangements, estimates of products sold subject to rebate, known events or trends, and channel inventory data.
Chargebacks
We participate in chargeback programs, primarily with government entities in the U.S., under which pricing on products below negotiated list prices is provided to participating entities and equal to the difference between their acquisition cost and the lower negotiated price. We estimate provisions for chargebacks primarily based on historical experience on a product and program basis, current contract prices under the chargeback programs, and channel inventory data.
Consideration Payable to the Customer
We pay administrative and service fees to certain of our distributors based on a fixed percentage of the product price. These fees are not in exchange for a distinct good or service and therefore are recognized as a reduction of the transaction price. We accrue for these fees based on actual net sales and contractual fee rates negotiated with the customer.
Product Returns
In accordance with the terms of their distribution agreements, most distributors do not have rights of return. 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. We estimate our product returns provision principally based on historical experience by applying a historical return rate to the amounts of revenue estimated to be subject to returns. Additionally, we consider other specific factors such as estimated shelf life of inventory in the distribution channel and changes to customer terms.
Prompt Payment Discounts
We provide customers with prompt payment discounts which may result in adjustments to the price that is invoiced for the product transferred, in the case that payments are made within a defined period. We estimate prompt payment discount accruals based on actual net sales and contractual discount rates.
Various Other Promotional or Incentive Arrangements
Other promotional or incentive arrangements are periodically offered to customers, including but not limited to co-payment assistance we provide to patients with commercial insurance, promotional programs related to the launch of products, or other targeted promotions. We record a provision for the incentive earned based on the number of estimated claims and our estimate of the cost per claim related to product sales that we have recognized as revenue.
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 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.
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 December 31, 2021 included unbilled accounts receivable of $9.6 million. We expect to invoice and collect all unbilled accounts receivable within twelve 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.
Our performance obligations are generally satisfied within 12 months of the initial contract date. The deferred revenue balances related to performance obligations that will be satisfied after 12 months was $16.1 million as of December 31, 2021 and $8.2 million as of December 31, 2020. These balances are included in other long-term liabilities in our consolidated balance sheets. Revenue recognized in the period from performance obligations satisfied in previous periods was not material for the periods presented.
Deferred Cost of Sales
Deferred cost of sales are associated with transactions 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.
Product Shipment Costs
Product Shipment Costs
We record the amounts we charge our customers for the shipping and handling of our products in revenue and we record the related costs as cost of sales in our consolidated statements of operations.
Research and Development
Research and Development
We expense costs of research and development as we incur them. Our research and development expenses primarily consist of engineering and research expenses related to our continuous glucose monitoring technology, clinical trials, regulatory expenses, quality assurance programs, materials and products for clinical trials. Research and development expenses primarily consist of employee compensation, including salary, fringe benefits, share-based compensation, and temporary employee expenses. We also incur significant expenses to operate our clinical trials that include clinical site reimbursement, clinical trial product, and associated travel expenses. Our research and development expenses also include fees for design services, contractors, and development materials.
Our CGM systems include certain software that we develop. We expense software development costs as we incur them until technological feasibility has been established, at which time we capitalize development costs until the product is available for general release to customers. To date, our software has been available for general release concurrent with the establishment of technological feasibility and, accordingly, we have not capitalized any development costs.
Collaboration Agreements
Collaboration Agreements
We may enter into agreements with collaboration partners for the development and commercialization of our products. These arrangements may include payments contingent on the occurrence of certain events such as development, regulatory or sales-based milestones.
When we account for these agreements, we consider the unique nature, terms and facts and circumstances of each transaction. Below are some example activities and how we account for them:
•Payments to collaboration partners through issuance of common stock as consideration in an asset acquisition are considered share-based payment to non-employees in exchange for goods within the scope of ASC Topic 718, “Compensation - Stock Compensation”. The amount and the timing of the cost recognition of such milestones in our financial statements is driven by the accounting for the specific type of equity instrument under ASC 718 that aligns with the terms of the agreement, including any performance conditions.
•The value associated with in-process research and development (“IPR&D”) in an asset acquisition incurred prior to regulatory approval is expensed as it does not have an alternative future use and is recorded as research and development expense.
•The value associated with IPR&D in an asset acquisition incurred at or after regulatory approval is usually capitalized as an intangible asset and amortized over the periods in which the related products are expected to contribute to future cash flows.
Advertising Costs
Advertising Costs
We expense costs to produce advertising as we incur them whereas costs to communicate advertising are expensed when the advertising is first run. Advertising costs are included in selling, general and administrative expenses. Advertising expense was $126.4 million, $76.5 million and $33.1 million for the twelve months ended December 31, 2021, 2020 and 2019, respectively.
Leases
Leases
We determine if an arrangement is a lease at inception. Lease right-of-use assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease right-of-use assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. The interest rate used to determine the present value of the future lease payments is our incremental borrowing rate, because the interest rate implicit in most of our leases is not readily determinable. Our incremental borrowing rate is estimated to approximate the interest rate on a collateralized basis with similar terms and payments, and in similar economic environments. The operating lease right-of-use asset also includes any lease payments made and excludes lease incentives. We have lease agreements with lease and non-lease components, which are generally accounted for separately. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term. Variable lease payments that do not depend on a rate or index, payments associated with non-lease components, and costs related to leases with terms of less than 12 months are expensed as incurred.
Share-Based Compensation
Share-Based Compensation
Share-based compensation expense is measured at the grant date based on the estimated fair value of the award and is recognized straight-line over the requisite service period of the individual grants, which typically equals the vesting period.
We value time-based restricted stock units or RSUs at the date of grant using the intrinsic value method. Certain RSUs granted to senior management vest based on the achievement of pre-established performance or market goals. We estimate the fair value of performance/market-based RSUs at the date of grant using the intrinsic value method and the probability that the specified performance criteria will be met. We update our assessment of the probability that the specified performance criteria will be achieved each quarter and adjust our estimate of the fair value of the performance-based RSUs if necessary. The Monte Carlo methodology that we use to estimate the fair value of market-based RSUs at the date of grant incorporates into the valuation the possibility that the market condition may not be satisfied. Provided that the requisite service is rendered, the total fair value of the market-based RSUs at the date of grant must be recognized as compensation expense even if the market condition is not achieved. However, the number of shares that ultimately vest can vary significantly with the performance of the specified market criteria.
If any of the assumptions used change significantly, share-based compensation expense may differ materially from what we have recorded in the current period.
We account for forfeitures as they occur by reversing any share-based compensation expense related to awards that will not vest.
Net Income Per Share
Net Income Per Share
Basic net income per share attributable to common stockholders is calculated by dividing the net income attributable to common stockholders by the weighted-average number of common shares outstanding during the period. Diluted net income 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. In periods of net losses, we exclude all potentially dilutive common shares from the computation of the diluted net loss per share for those periods as the effect would be anti-dilutive.
Recent Accounting Guidance
Recent Accounting Guidance
Recently Adopted Accounting Pronouncements
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. Our adoption of ASU 2019-12 at the beginning of the first quarter of 2021 did not have a significant impact on our consolidated financial statements.
Recently Issued Accounting Pronouncements Not Yet Adopted
In August 2020, the FASB issued ASU No. 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40). This new guidance is intended to reduce the complexity of accounting for convertible instruments. The guidance also addresses how convertible instruments are accounted for in the diluted earnings per share calculation and requires enhanced disclosures about the terms of convertible instruments. Entities may adopt ASU 2020-06 using either a partial retrospective or fully retrospective method of transition. This ASU is effective for public business entities for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. Early adoption is permitted for fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. We will adopt ASU 2020-06 in the first quarter of 2022, and expect to use the full retrospective method, reflecting the application of the new standard in each prior reporting period. We have started the process of evaluating the impact of the full retrospective adoption of ASU 2020-06 on our consolidated financial statements. We continue to evaluate the effect of ASU 2020-06 on our consolidated financial statements. Under ASU 2020-06, we will account for our senior convertible notes entirely as a liability and will no longer separately account for them with liability and equity components. Therefore, we will no longer recognize a debt discount for the value of the conversion option, instead we will record the face value of our senior convertible notes as a liability on our consolidated balance sheet.
The derecognition of the unamortized debt discount will result in an increase in the Long-term senior convertible notes on our consolidated balance sheet. The elimination of the separation model for the convertible debt instruments is expected to reduce additional paid-in capital. As the separation of the embedded conversion feature will no longer be amortized into income as interest expense, non-cash interest expense will decrease by the full amount of the previous accretion of debt discount, offset by incremental interest expense from amortization of debt issuance costs that were allocated to the equity component. We will finalize our retrospective presentation of our historical financial statements under the new standard in connection with our Form 10-Q filings during fiscal year 2022 and our Form 10-K for the fiscal year ending December 31, 2022.
In October 2021, the FASB issued ASU No. 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers. This guidance is intended improve the accounting for acquired revenue contracts with customers in a business combination. The new guidance requires that the acquirer recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Topic 606. ASU 2021-08 is effective for public business entities for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years, and early adoption is permitted. The amendments should be applied prospectively to business combinations occurring on or after the the adoption date. We are currently evaluating the impact that this guidance will have on our consolidated financial statements.
v3.22.0.1
Organization and Significant Accounting Policies (Tables)
 12 Months Ended
Dec. 31, 2021
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Schedules of Percentage of Total Revenues and Accounts Receivable by Customer
The following table sets forth the percentages of total revenue or gross accounts receivable for customers that represent 10% or more of the respective amounts for the periods shown:
RevenueGross Accounts Receivable
 Twelve Months Ended
December 31,		As of December 31,
20212020201920212020
Distributor A28 %23 %17 %16 %19 %
Distributor B12 %11 %12 %11 %10 %
Distributor C21 %18 %10 %13 %12 %
Distributor D18 %11 %*13 %*
* Less than 10%
Schedule of Basic and Diluted Net Income (Loss) Per Share
The following table sets forth the computation of basic and diluted net income per share for the periods shown.
Twelve Months Ended
December 31,
(In millions)202120202019
Net income$154.7 $493.6 $101.1 
Net income per common share
Basic$1.60 $5.23 $1.11 
Diluted$1.55 $5.06 $1.10 
Basic weighted average shares outstanding96.7 94.4 91.1 
Dilutive potential common stock outstanding:
Restricted stock units0.5 1.0 1.2 
Warrants2.9 2.1 — 
Diluted weighted average shares outstanding100.1 97.5 92.3 
Schedule of Outstanding Anti-Dilutive Securities Excluded in Diluted Net Income (Loss) per Share
Outstanding anti-dilutive securities not included in the diluted net income per share attributable to common stockholders calculations were as follows:
Twelve Months Ended
December 31,
(In millions)202120202019
Restricted stock units— — 0.2 
Warrants— — 5.2 
Senior convertible notes6.8 7.2 9.2 
Total6.8 7.2 14.6 
v3.22.0.1
Fair Value Measurements (Tables)
 12 Months Ended
Dec. 31, 2021
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 December 31, 2021, classified in accordance with the fair value hierarchy:
Fair Value Measurements Using
(In millions)Level 1Level 2Level 3Total
Cash equivalents$791.4 $40.0 $— $831.4 
Debt securities, available-for-sale:
U.S. government agencies— 1,210.6 — 1,210.6 
Commercial paper— 189.7 — 189.7 
Corporate debt— 224.3 — 224.3 
Supranationals— 54.0 — 54.0 
Total debt securities, available-for-sale— 1,678.6 — 1,678.6 
Other assets (1)
7.0 — — 7.0 
Total assets measured at fair value on a recurring basis$798.4 $1,718.6 $— $2,517.0 
(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, 2020, classified in accordance with the fair value hierarchy:
Fair Value Measurements Using
(In millions)Level 1Level 2Level 3Total
Cash equivalents$491.5 $150.0 $— $641.5 
Debt securities, available-for-sale:
U.S. government agencies— 1,570.4 — 1,570.4 
Commercial paper— 258.8 — 258.8 
Corporate debt— 60.9 — 60.9 
Total debt securities, available-for-sale— 1,890.1 — 1,890.1 
Other assets (1)
3.4 — — 3.4 
Total assets measured at fair value on a recurring basis$494.9 $2,040.1 $— $2,535.0 
(1) Includes assets which are held pursuant to a deferred compensation plan for senior management, which consist mainly of mutual funds.
Schedule of Fair Value of Senior Convertible Notes
The fair value, based on trading prices (Level 1 inputs), of our senior convertible notes were as follows as of the dates indicated:
Fair Value Measurements Using Level 1
(In millions)December 31, 2021December 31, 2020
Senior Convertible Notes due 2023$2,589.6 $1,936.4 
Senior Convertible Notes due 20251,432.9 1,219.2 
Total fair value of outstanding senior convertible notes$4,022.5 $3,155.6 
For more information on the carrying values of our senior convertible notes, see Senior Convertible Notes in Note 5 to the consolidated financial statements.
v3.22.0.1
Balance Sheet Details (Tables)
 12 Months Ended
Dec. 31, 2021
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Schedule of Short-Term Marketable Securities
Short-term marketable securities, consisting of available-for-sale debt securities, were as follows as of the dates indicated:
December 31, 2021
(In millions)Amortized
Cost		Gross
Unrealized
Gains		Gross
Unrealized
Losses		Estimated
Market
Value
Debt securities, available-for-sale:
U.S. government agencies$1,212.1 $— $(1.5)$1,210.6 
Commercial paper189.8 — (0.1)189.7 
Corporate debt224.6 — (0.3)224.3 
Supranationals54.1 — (0.1)54.0 
Total debt securities, available-for-sale$1,680.6 $— $(2.0)$1,678.6 
December 31, 2020
(In millions)Amortized
Cost		Gross
Unrealized
Gains		Gross
Unrealized
Losses		Estimated
Market
Value
Debt securities, available-for-sale:
U.S. government agencies$1,570.4 $0.1 $(0.1)$1,570.4 
Commercial paper258.7 0.1 — 258.8 
Corporate debt60.9 — — 60.9 
Total debt securities, available-for-sale$1,890.0 $0.2 $(0.1)$1,890.1 
Schedule of Accounts Receivable
December 31,
(In millions)20212020
Accounts receivable$519.7 $435.7 
Less allowance for doubtful accounts(5.4)(7.2)
Total accounts receivable, net$514.3 $428.5 
Schedule of Inventory
December 31,
(In millions)20212020
Raw materials$145.2 $69.9 
Work-in-process16.2 14.2 
Finished goods195.9 150.6 
Total inventory$357.3 $234.7 
Schedule of Property and Equipment
December 31,
(In millions)20212020
Land (1)
$15.6 $15.6 
Building (1)
49.1 49.2 
Furniture and fixtures30.7 15.3 
Computer software and hardware52.7 35.7 
Machinery and equipment272.9 198.9 
Leasehold improvements251.6 135.8 
Construction in progress 360.7 219.0 
Total cost1,033.3 669.5 
Less accumulated depreciation and amortization(231.5)(154.2)
Total property and equipment, net$801.8 $515.3 
(1) Represents finance lease right-of-use assets.
Schedule of Accounts Payable and Accrued Liabilities
December 31,
(In millions)20212020
Accounts payable trade$196.0 $163.3 
Accrued tax, audit, and legal fees40.7 15.3 
Accrued rebates 260.5 247.0 
Accrued warranty12.9 11.7 
Contractual obligations15.0 — 
Other accrued liabilities 47.9 43.8 
Total accounts payable and accrued liabilities$573.0 $481.1 
Schedule of Accrued Payroll and Related Expenses
December 31,
(In millions)20212020
Accrued wages, bonus and taxes$91.8 $87.7 
Other accrued employee benefits33.4 26.6 
Total accrued payroll and related expenses$125.2 $114.3 
Schedule of Accrued Warranty Reconciliations of our accrued warranty costs for the twelve months ended December 31, 2021, 2020 and 2019 were as follows:
Twelve Months Ended
December 31,
(In millions)202120202019
Beginning balance$11.7 $7.4 $6.8 
Charges to costs and expenses41.5 41.3 32.7 
Costs incurred(40.3)(37.0)(32.1)
Ending balance$12.9 $11.7 $7.4 
Schedule of Other Long-Term Liabilities
December 31,
(In millions)20212020
Finance lease obligations$57.0 $54.0 
Contractual obligations— 12.6 
Deferred tax liabilities5.9 — 
Other liabilities27.1 14.3 
Total other long-term liabilities$90.0 $80.9 
v3.22.0.1
Debt (Tables)
 12 Months Ended
Dec. 31, 2021
Debt Disclosure [Abstract]  
Schedule of Carrying Values and Estimated Fair Values of Debt Instruments
The carrying amounts of our senior convertible notes were as follows as of the dates indicated:
December 31,
(Dollars in millions)20212020
Principal amount:
Senior Convertible Notes due 2023$792.3 $850.0 
Senior Convertible Notes due 20251,207.5 1,207.5 
Total principal amount1,999.8 2,057.5 
Unamortized debt discount(282.7)(371.1)
Unamortized debt issuance costs(14.4)(19.2)
Carrying amount of liability component$1,702.7 $1,667.2 
Carrying value of equity component$449.4 $461.0 
Remaining amortization period of debt discount on the liability component:
Senior Convertible Notes due 20231.9 years2.9 years
Senior Convertible Notes due 20253.9 years4.9 years
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:
December 31,
(In millions)20212020
Senior Convertible Notes due 2023$1,797.3 $1,077.5 
Senior Convertible Notes due 2025141.8 — 
Total by which the notes’ if-converted value exceeds their principal amount$1,939.1 $1,077.5 
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.
Twelve Months Ended
December 31,
(Dollars in millions)202120202019
Cash interest expense:
Contractual coupon interest (1)(2)
$9.3 $9.3 $9.3 
Non-cash interest expense:
Accretion of debt discount83.0 68.6 45.8 
Amortization of debt issuance costs4.4 4.0 3.7 
Total interest expense recognized on senior notes$96.7 $81.9 $58.8 
Effective interest rates:
Senior Convertible Notes due 2022 (2)
*5.1 %5.1 %
Senior Convertible Notes due 20235.6 %5.6 %5.6 %
Senior Convertible Notes due 20255.5 %5.5 %*
(1) Interest on the 2022 Notes began accruing upon issuance and was 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.
(2) The effective interest rate presented represents the rate applicable for the period outstanding. Our $400.0 million aggregate principal amount of unsecured senior convertible notes issued in June 2017 with a stated interest rate of 0.75% and maturity date of May 15, 2022 (the 2022 Notes) were repurchased and converted by August 2020.
* Not applicable as no notes were outstanding at this date.
Schedule of Availability and Outstanding Borrowings on Credit Agreement
Information related to availability and outstanding borrowings on our Amended Credit Agreement is as follows as of the date indicated:
December 31,
(In millions)2021
Available principal amount $200.0 
Letters of credit sub-facility25.0 
Outstanding borrowings — 
Outstanding letters of credit7.3 
Total available balance$192.7 
v3.22.0.1
Leases And Other Commitments (Tables)
 12 Months Ended
Dec. 31, 2021
Leases [Abstract]  
Schedule of Maturity of Operating Lease Liabilities
As of December 31, 2021, the maturities of our operating and finance lease liabilities were as shown in the table below:
(In millions)Operating LeasesFinance Leases
2022$25.7 $6.3 
202325.2 6.4 
202423.5 5.4 
202522.5 4.8 
202622.3 4.9 
Thereafter17.2 64.0 
Total future lease cost (1)
136.4 91.8 
Less: Imputed interest (17.3)(31.5)
Present value of future payments119.1 60.3 
Less: Current portion(20.5)(3.3)
Long-term portion$98.6 $57.0 
Schedule of Maturity of Finance Lease Liabilities
As of December 31, 2021, the maturities of our operating and finance lease liabilities were as shown in the table below:
(In millions)Operating LeasesFinance Leases
2022$25.7 $6.3 
202325.2 6.4 
202423.5 5.4 
202522.5 4.8 
202622.3 4.9 
Thereafter17.2 64.0 
Total future lease cost (1)
136.4 91.8 
Less: Imputed interest (17.3)(31.5)
Present value of future payments119.1 60.3 
Less: Current portion(20.5)(3.3)
Long-term portion$98.6 $57.0 
Schedule of Components of Lease Expense and Other Information
The components of lease expense for the twelve months ended December 31, 2021, 2020 and 2019 were as follows:
Twelve Months Ended
December 31,
(In millions) 202120202019
Finance lease cost:
Amortization of right-of-use assets$4.1 $2.0 $1.1 
Interest on lease liabilities3.0 1.9 0.8 
Operating lease cost23.3 18.4 12.2 
Short-term lease cost (1)
2.3 1.3 3.5 
Variable lease cost (2)
6.0 4.2 3.9 
Total lease cost$38.7 $27.8 $21.5 
(1) Short-term lease cost is primarily related to temporary office space associated with the transition of certain operations to the Philippines.
(2) Variable lease costs are primarily related to common area maintenance charges and property taxes.
Other information related to our leases is as follows:
Twelve Months Ended
December 31,
(Dollars in millions)202120202019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases$23.3 $18.3 $14.3 
Operating cash flows from finance leases1.9 0.7 0.8 
Financing cash flows from finance leases9.9 8.5 0.5 
Right-of-use assets obtained in exchange for lease liabilities:
Operating leases13.1 33.5 80.6 
Finance leases$6.4 $41.7 $15.5 
Weighted average remaining lease term:
Operating leases5.5 years6.1 years6.2 years
Finance leases15.9 years23.3 years13.3 years
Weighted average discount rate:
Operating leases5.0 %5.0 %5.0 %
Finance leases5.1 %5.0 %5.0 %
v3.22.0.1
Income Taxes (Tables)
 12 Months Ended
Dec. 31, 2021
Income Tax Disclosure [Abstract]  
Schedule of Income (Loss) before Income Taxes Subject to Taxes
Income (loss) before income taxes subject to taxes in the following jurisdictions is as follows:
Twelve Months Ended
December 31,
(In millions)202120202019
United States$235.3 $270.7 $119.1 
Outside of the United States(61.4)(45.7)(14.9)
Total$173.9 $225.0 $104.2 
Schedule of Components of Income Tax Expense (Benefit)
Significant components of the provision for income taxes are as follows:
Twelve Months Ended
December 31,
(In millions)202120202019
Current:
Federal$5.7 $— $— 
State8.3 6.1 1.0 
Foreign10.1 2.6 1.9 
Total current income taxes24.1 8.7 2.9 
Deferred:
Federal5.5 (198.8)— 
State(3.4)(51.4)— 
Foreign(7.0)(27.1)0.2 
Total deferred income taxes(4.9)(277.3)0.2 
Total$19.2 $(268.6)$3.1 
Schedule of Tax Credit Carryforwards
Significant loss and tax credit carryforwards and years of expiration are as follows:
December 31,Year of Expiration
(In millions)20212020
Net operating loss:
Federal$38.0 $169.1 2027
California236.3 236.3 2029
Other states21.3 36.1 2029
UK102.4 113.2 Indefinite
Tax credits:
Federal
R&D credits80.1 73.1 2026
Foreign tax credits1.5 — 2031
California R&D credits$81.4 $66.2 Indefinite
Schedule of Operating Loss Carryforwards
Significant loss and tax credit carryforwards and years of expiration are as follows:
December 31,Year of Expiration
(In millions)20212020
Net operating loss:
Federal$38.0 $169.1 2027
California236.3 236.3 2029
Other states21.3 36.1 2029
UK102.4 113.2 Indefinite
Tax credits:
Federal
R&D credits80.1 73.1 2026
Foreign tax credits1.5 — 2031
California R&D credits$81.4 $66.2 Indefinite
Schedule of Deferred Tax Assets and Liabilities
Significant components of our deferred tax assets and liabilities as of December 31, 2021 and 2020 are shown below. Significant judgment is required to evaluate the need for a valuation allowance against deferred tax assets. We review all available positive and negative evidence, including projections of pre-tax book income, earnings history, reliability of forecasting, and reversal of temporary differences. A valuation allowance is established when it is more likely than not that some or all of the deferred tax assets will not be realized. Realization of deferred tax assets is dependent upon future earnings in applicable tax jurisdictions.
December 31,
(In millions)20212020
Deferred tax assets:
Net operating loss carryforwards$53.0 $69.2 
Capitalized research and development expenses49.3 53.6 
Tax credits105.5 101.1 
Share-based compensation13.3 13.0 
Fixed and intangible assets26.4 16.9 
Accrued liabilities and reserves105.5 110.3 
Collaborative agreement milestone accrual (1)
21.9 — 
Other 0.5 — 
Total gross deferred tax assets375.4 364.1 
Less: valuation allowance(69.9)(55.5)
Total net deferred tax assets305.5 308.6 
Deferred tax liabilities:
Fixed assets and acquired intangibles assets(42.5)(36.3)
Convertible debt discount(48.1)(55.9)
Total deferred tax liabilities(90.6)(92.2)
Net deferred tax assets (liabilities)$214.9 $216.4 
(1) This amount is related to the $87.1 million charge recorded in the fourth quarter of 2021 associated with our Restated Collaboration Agreement with Verily, as discussed in Note 2 to the consolidated financial statements.
Schedule of Reconciliation between Effective Tax Rate and Statutory Rate
The reconciliation between our effective tax rate on income (loss) from continuing operations and the statutory rate is as follows:
Twelve Months Ended
December 31,
(In millions)202120202019
U.S. federal statutory tax rate$36.5 $47.3 $21.9 
State income tax, net of federal benefit5.6 3.2 (2.3)
Permanent items26.2 13.1 1.0 
Research and development credits(28.9)(24.4)(10.8)
Foreign tax credit(3.7)— — 
Foreign rate differential(0.1)(0.1)5.6 
Stock and officers compensation(20.4)(28.7)(14.7)
Change in statutory tax rates(10.0)(4.1)— 
Other(0.4)0.1 (1.0)
Change in valuation allowance14.4 (275.0)3.4 
Income taxes at effective rates
$19.2 $(268.6)$3.1 
Schedule of Unrecognized Tax Benefits
The following table summarizes the activity related to our gross unrecognized tax benefits:
(In millions)
Balance at January 1, 2019$25.9 
Decreases related to prior year tax positions(0.9)
Increases related to current year tax positions4.5 
Balance at December 31, 201929.5 
Decreases related to prior year tax positions (0.9)
Increases related to current year tax positions8.0 
Balance at December 31, 202036.6 
Increases related to prior year tax positions0.4 
Increases related to current year tax positions9.8 
Balance at December 31, 2021$46.8 
Schedule of Years Remaining Subject to Audit by Major Jurisdiction The years remaining subject to audit, by major jurisdiction, are as follows:
JurisdictionFiscal Year
United States (Federal and state) 1999 - 2021
Germany 2016 - 2021
United Kingdom 2016 - 2021
Canada 2017 - 2021
v3.22.0.1
Employee Benefit Plans and Stockholders' Equity (Tables)
 12 Months Ended
Dec. 31, 2021
Share-based Payment Arrangement [Abstract]  
Schedule of RSU and PSU Activity
A summary of RSU and PSU activity under the 2015 Plan for the twelve months ended December 31, 2021, 2020 and 2019 is as follows:
Nonvested RSU and PSU Activity
(In millions except weighted average grant date fair value)Shares Available for GrantSharesWeighted 
Average
Grant Date
Fair Value		Aggregate
Intrinsic Value
Balance at December 31, 20183.2 2.7 $69.19 
Additional shares authorized2.2 — 
Granted(0.7)0.7 144.37 
Vested— (1.4)69.45 
Forfeited0.2 (0.2)83.45 
Balance at December 31, 20194.9 1.8 96.63 $392.0 
Granted(0.5)0.5 300.36 
Vested— (1.0)92.07 
Forfeited0.1 (0.1)137.44 
Balance at December 31, 20204.5 1.2 183.51 430.6 
Granted(0.4)0.4 351.32 
Vested— (0.7)137.90 
Forfeited0.1 (0.1)279.12 
Balance at December 31, 20214.2 0.8 $307.86 $411.3 
Schedule of Share-Based Compensation Expenses The following table summarizes the share-based compensation expense included in our consolidated statements of operations for the periods shown.
Twelve Months Ended
December 31,
(In millions)202120202019
Cost of sales$8.5 $14.6 $9.0 
Research and development41.0 37.8 33.5 
Selling, general and administrative63.9 67.0 60.2 
Total share-based compensation expense$113.4 $119.4 $102.7 
Schedule of Valuation Assumptions for Employee Stock Purchase Plan We estimate the fair value of ESPP purchase rights on the date of grant using the Black-Scholes option pricing model and the assumptions below for the specified reporting periods.
 Twelve Months Ended
December 31,
202120202019
Risk free interest rate
0.06% - 0.07%
0.13% - 0.95%
1.72% - 2.55%
Dividend yield— %— %— %
Expected volatility of Dexcom common stock
36% - 45%
51% - 63%
40% - 51%
Expected life (in years)0.50.51
v3.22.0.1
Business Segment and Geographic Information (Tables)
 12 Months Ended
Dec. 31, 2021
Segment Reporting [Abstract]  
Schedule of Revenue from External Customers by Geographic Areas The table below sets forth revenue 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 components. The majority of our long-lived assets are located in the United States.
Twelve Months Ended December 31,
202120202019
(Dollars in millions)Amount%
of Total		Amount%
of Total		Amount%
of Total
United States$1,849.4 76 %$1,509.5 78 %$1,161.5 79 %
Outside of the United States599.1 24 %417.2 22 %314.5 21 %
Total revenue$2,448.5 100 %$1,926.7 100 %$1,476.0 100 %
Schedule of Disaggregation of Revenue
The following table sets forth revenue by major sales channel for the twelve months ended December 31, 2021, 2020 and 2019:
Twelve Months Ended December 31,
202120202019
(Dollars in millions)Amount%
of Total		Amount%
of Total		Amount%
of Total
Distributor$2,024.3 83 %$1,437.6 75 %$1,011.6 69 %
Direct424.2 17 %489.1 25 %464.4 31 %
Total revenue$2,448.5 100 %$1,926.7 100 %$1,476.0 100 %
v3.22.0.1
Organization and Significant Accounting Policies - Narrative (Details) - USD ($)
 12 Months Ended
Dec. 31, 2021
Dec. 31, 2020
Dec. 31, 2019
Organization And Summary Of Significant Accounting Policies [Line Items]      
Maturity threshold of investments classified to cash equivalents 90 days    
Goodwill impairment charges $ 0 $ 0 $ 0
Intangible asset impairment charges $ 0 0 0
Sales return period 30 days    
Unbilled accounts receivable $ 9,600,000    
Deferred revenue that will be satisfied after 12 months 16,100,000 8,200,000  
Advertising costs $ 126,400,000 $ 76,500,000 $ 33,100,000
Computer software and hardware      
Organization And Summary Of Significant Accounting Policies [Line Items]      
Estimated useful life 3 years    
Furniture and fixtures      
Organization And Summary Of Significant Accounting Policies [Line Items]      
Estimated useful life 5 years    
Minimum      
Organization And Summary Of Significant Accounting Policies [Line Items]      
Useful life of finite-lived intangible assets 1 year    
Customer contract payment terms 30 days    
Minimum | Machinery and equipment      
Organization And Summary Of Significant Accounting Policies [Line Items]      
Estimated useful life 4 years    
Maximum      
Organization And Summary Of Significant Accounting Policies [Line Items]      
Useful life of finite-lived intangible assets 7 years    
Customer contract payment terms 90 days    
Amortization period for incentive compensation costs 1 year    
Maximum | Machinery and equipment      
Organization And Summary Of Significant Accounting Policies [Line Items]      
Estimated useful life 15 years    
Maximum | Building      
Organization And Summary Of Significant Accounting Policies [Line Items]      
Estimated useful life 40 years    
v3.22.0.1
Organization and Significant Accounting Policies - Revenues and Gross Accounts Receivable by Customer (Details) - Customer Concentration Risk
 12 Months Ended
Dec. 31, 2021
Dec. 31, 2020
Dec. 31, 2019
Revenue | Distributor A      
Concentration Risk [Line Items]      
Concentration risk (as a percent) 28.00% 23.00% 17.00%
Revenue | Distributor B      
Concentration Risk [Line Items]      
Concentration risk (as a percent) 12.00% 11.00% 12.00%
Revenue | Distributor C      
Concentration Risk [Line Items]      
Concentration risk (as a percent) 21.00% 18.00% 10.00%
Revenue | Distributor D      
Concentration Risk [Line Items]      
Concentration risk (as a percent) 18.00% 11.00%  
Gross Accounts Receivable | Distributor A      
Concentration Risk [Line Items]      
Concentration risk (as a percent) 16.00% 19.00%  
Gross Accounts Receivable | Distributor B      
Concentration Risk [Line Items]      
Concentration risk (as a percent) 11.00% 10.00%  
Gross Accounts Receivable | Distributor C      
Concentration Risk [Line Items]      
Concentration risk (as a percent) 13.00% 12.00%  
Gross Accounts Receivable | Distributor D      
Concentration Risk [Line Items]      
Concentration risk (as a percent) 13.00%    
v3.22.0.1
Organization and Significant Accounting Policies - Earnings Per Share (Details) - USD ($)
$ / shares in Units, shares in Millions, $ in Millions
 12 Months Ended
Dec. 31, 2021
Dec. 31, 2020
Dec. 31, 2019
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Net income $ 154.7 $ 493.6 $ 101.1
Basic net income per share (USD per share) $ 1.60 $ 5.23 $ 1.11
Diluted net income per share (USD per share) $ 1.55 $ 5.06 $ 1.10
Basic weighted average shares outstanding (shares) 96.7 94.4 91.1
Diluted weighted average shares outstanding (shares) 100.1 97.5 92.3
Restricted stock units      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Dilutive potential common stock outstanding (shares) 0.5 1.0 1.2
Warrants      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Dilutive potential common stock outstanding (shares) 2.9 2.1 0.0
v3.22.0.1
Organization and Significant Accounting Policies - Anti-dilutive Securities (Details) - shares
shares in Millions
 12 Months Ended
Dec. 31, 2021
Dec. 31, 2020
Dec. 31, 2019
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]      
Antidilutive securities excluded from computation of earnings per share (shares) 6.8 7.2 14.6
Restricted stock units      
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]      
Antidilutive securities excluded from computation of earnings per share (shares) 0.0 0.0 0.2
Warrants      
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]      
Antidilutive securities excluded from computation of earnings per share (shares) 0.0 0.0 5.2
Senior convertible notes      
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]      
Antidilutive securities excluded from computation of earnings per share (shares) 6.8 7.2 9.2
v3.22.0.1
Development and Other Agreements - Narrative (Details) - USD ($)
$ / shares in Units, $ in Millions
 3 Months Ended 12 Months Ended
Nov. 20, 2018
Dec. 31, 2021
Dec. 31, 2021
Dec. 31, 2020
Dec. 31, 2019
Dec. 31, 2018
Dec. 28, 2018
Development Agreements [Line Items]              
Collaborative research and development fee   $ 87.1 $ 87.1 $ 0.0 $ 0.0    
Collaborative Arrangement | Verily Life Sciences | Collaborative Arrangement, Initial Payment              
Development Agreements [Line Items]              
Initial payment on collaborative agreement $ 250.0            
Issuance of common stock in connection with acquisition, shares (in shares) 1,840,943            
Collaborative research and development fee   $ 87.1       $ 217.7  
Closing stock price (USD per share)             $ 118.28
Collaborative Arrangement | Verily Life Sciences | Collaborative Arrangement, Approval Milestone              
Development Agreements [Line Items]              
Potential future common stock issuable (shares) 736,377            
Collaborative Arrangement | Verily Life Sciences | Collaborative Arrangement, Milestone Payments              
Development Agreements [Line Items]              
Collaborative research and development fee         $ 3.2    
Potential future common stock issuable (shares) 1,288,660            
v3.22.0.1
Fair Value Measurements - Fair Value Hierarchy of Financial Assets (Details) - USD ($)
$ in Millions
Dec. 31, 2021
Dec. 31, 2020
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Cash equivalents $ 831.4 $ 641.5
Debt securities, available-for-sale 1,678.6 1,890.1
Other assets 7.0 3.4
Total assets measured at fair value on a recurring basis 2,517.0 2,535.0
Level 1    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Cash equivalents 791.4 491.5
Debt securities, available-for-sale 0.0 0.0
Other assets 7.0 3.4
Total assets measured at fair value on a recurring basis 798.4 494.9
Level 2    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Cash equivalents 40.0 150.0
Debt securities, available-for-sale 1,678.6 1,890.1
Other assets 0.0 0.0
Total assets measured at fair value on a recurring basis 1,718.6 2,040.1
Level 3    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Cash equivalents 0.0 0.0
Debt securities, available-for-sale 0.0 0.0
Other assets 0.0 0.0
Total assets measured at fair value on a recurring basis 0.0 0.0
U.S. government agencies    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Debt securities, available-for-sale 1,210.6 1,570.4
U.S. government agencies | Level 1    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Debt securities, available-for-sale 0.0 0.0
U.S. government agencies | Level 2    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Debt securities, available-for-sale 1,210.6 1,570.4
U.S. government agencies | Level 3    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Debt securities, available-for-sale 0.0 0.0
Commercial paper    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Debt securities, available-for-sale 189.7 258.8
Commercial paper | Level 1    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Debt securities, available-for-sale 0.0 0.0
Commercial paper | Level 2    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Debt securities, available-for-sale 189.7 258.8
Commercial paper | Level 3    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Debt securities, available-for-sale 0.0 0.0
Corporate debt    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Debt securities, available-for-sale 224.3 60.9
Corporate debt | Level 1    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Debt securities, available-for-sale 0.0 0.0
Corporate debt | Level 2    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Debt securities, available-for-sale 224.3 60.9
Corporate debt | Level 3    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Debt securities, available-for-sale 0.0 $ 0.0
Supranationals    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Debt securities, available-for-sale 54.0  
Supranationals | Level 1    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Debt securities, available-for-sale 0.0  
Supranationals | Level 2    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Debt securities, available-for-sale 54.0  
Supranationals | Level 3    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Debt securities, available-for-sale $ 0.0  
v3.22.0.1
Fair Value Measurements - Narrative (Details) - USD ($)
 12 Months Ended
Dec. 31, 2021
Dec. 31, 2020
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Transfers in or out of Level 3 securities $ 0 $ 0
Designated as Hedging Instrument | Foreign Exchange Forward    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Notional amount of outstanding hedge to currency risk $ 40,000,000 $ 48,000,000
v3.22.0.1
Fair Value Measurements - Fair Value of Senior Convertible Notes (Details) - Senior Notes - USD ($)
$ in Millions
Dec. 31, 2021
Dec. 31, 2020
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Total fair value of outstanding senior convertible notes $ 4,022.5 $ 3,155.6
Convertible Notes due 2023    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Total fair value of outstanding senior convertible notes 2,589.6 1,936.4
Convertible Notes due 2025    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Total fair value of outstanding senior convertible notes $ 1,432.9 $ 1,219.2
v3.22.0.1
Balance Sheet Details - Short-term Marketable Securities, Available-for-Sale (Details) - USD ($)
$ in Millions
Dec. 31, 2021
Dec. 31, 2020
Condensed Financial Statements, Captions [Line Items]    
Amortized Cost $ 1,680.6 $ 1,890.0
Gross Unrealized Gains 0.0 0.2
Gross Unrealized Losses (2.0) (0.1)
Estimated Market Value 1,678.6 1,890.1
U.S. government agencies    
Condensed Financial Statements, Captions [Line Items]    
Amortized Cost 1,212.1 1,570.4
Gross Unrealized Gains 0.0 0.1
Gross Unrealized Losses (1.5) (0.1)
Estimated Market Value 1,210.6 1,570.4
Commercial paper    
Condensed Financial Statements, Captions [Line Items]    
Amortized Cost 189.8 258.7
Gross Unrealized Gains 0.0 0.1
Gross Unrealized Losses (0.1) 0.0
Estimated Market Value 189.7 258.8
Corporate debt    
Condensed Financial Statements, Captions [Line Items]    
Amortized Cost 224.6 60.9
Gross Unrealized Gains 0.0 0.0
Gross Unrealized Losses (0.3) 0.0
Estimated Market Value 224.3 $ 60.9
Supranationals    
Condensed Financial Statements, Captions [Line Items]    
Amortized Cost 54.1  
Gross Unrealized Gains 0.0  
Gross Unrealized Losses (0.1)  
Estimated Market Value $ 54.0  
v3.22.0.1
Balance Sheet Details - Narrative (Details) - USD ($)
$ in Millions
 3 Months Ended 12 Months Ended
Sep. 30, 2021
Dec. 31, 2021
Dec. 31, 2020
Dec. 31, 2019
Condensed Financial Statements, Captions [Line Items]        
Current available-for-sale securities   $ 1,360.0    
Noncurrent available-for-sale securities   320.7    
Income (loss) from equity investments   11.6 $ 0.0 $ (4.2)
Cash discounts reserve   (13.7) (15.9) (4.6)
Raw materials inventory balance   145.2 69.9  
Pre-launch portion of raw materials inventory balance   5.5    
Prepaid and other current assets   81.6 53.9  
Depreciation expense   96.3 64.0 46.9
Gain (loss) on disposal of machinery and equipment   (24.5) (13.6) (10.5)
Net intangible assets acquired $ 22.6      
Receiver Product Component        
Condensed Financial Statements, Captions [Line Items]        
Inventory write-down   $ 28.1 $ 24.4 $ 14.1
v3.22.0.1
Balance Sheet Details - Accounts Receivable (Details) - USD ($)
$ in Millions
Dec. 31, 2021
Dec. 31, 2020
Organization, Consolidation and Presentation of Financial Statements [Abstract]    
Accounts receivable $ 519.7 $ 435.7
Less allowance for doubtful accounts (5.4) (7.2)
Total accounts receivable, net $ 514.3 $ 428.5
v3.22.0.1
Balance Sheet Details - Inventory (Details) - USD ($)
$ in Millions
Dec. 31, 2021
Dec. 31, 2020
Inventory Disclosure [Abstract]    
Raw materials $ 145.2 $ 69.9
Work-in-process 16.2 14.2
Finished goods 195.9 150.6
Total inventory $ 357.3 $ 234.7
v3.22.0.1
Balance Sheet Details - Property and Equipment (Details) - USD ($)
$ in Millions
Dec. 31, 2021
Dec. 31, 2020
Property, Plant and Equipment [Line Items]    
Total cost $ 1,033.3 $ 669.5
Less accumulated depreciation and amortization (231.5) (154.2)
Total property and equipment, net 801.8 515.3
Land    
Property, Plant and Equipment [Line Items]    
Total cost 15.6 15.6
Building    
Property, Plant and Equipment [Line Items]    
Total cost 49.1 49.2
Furniture and fixtures    
Property, Plant and Equipment [Line Items]    
Total cost 30.7 15.3
Computer software and hardware    
Property, Plant and Equipment [Line Items]    
Total cost 52.7 35.7
Machinery and equipment    
Property, Plant and Equipment [Line Items]    
Total cost 272.9 198.9
Leasehold improvements    
Property, Plant and Equipment [Line Items]    
Total cost 251.6 135.8
Construction in progress    
Property, Plant and Equipment [Line Items]    
Total cost $ 360.7 $ 219.0
v3.22.0.1
Balance Sheet Details - Accounts Payable and Accrued Liabilities (Details) - USD ($)
$ in Millions
Dec. 31, 2021
Dec. 31, 2020
Dec. 31, 2019
Dec. 31, 2018
Organization, Consolidation and Presentation of Financial Statements [Abstract]        
Accounts payable trade $ 196.0 $ 163.3    
Accrued tax, audit, and legal fees 40.7 15.3    
Accrued rebates 260.5 247.0    
Accrued warranty 12.9 11.7 $ 7.4 $ 6.8
Contractual obligations 15.0 0.0    
Other accrued liabilities 47.9 43.8    
Total accounts payable and accrued liabilities $ 573.0 $ 481.1    
v3.22.0.1
Balance Sheet Details - Accrued Payroll and Related Expenses (Details) - USD ($)
$ in Millions
Dec. 31, 2021
Dec. 31, 2020
Organization, Consolidation and Presentation of Financial Statements [Abstract]    
Accrued wages, bonus and taxes $ 91.8 $ 87.7
Other accrued employee benefits 33.4 26.6
Total accrued payroll and related expenses $ 125.2 $ 114.3
v3.22.0.1
Balance Sheet Details - Accrued Warranty (Details) - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2021
Dec. 31, 2020
Dec. 31, 2019
Movement in Standard Product Warranty Accrual [Roll Forward]      
Beginning balance $ 11.7 $ 7.4 $ 6.8
Charges to costs and expenses 41.5 41.3 32.7
Costs incurred (40.3) (37.0) (32.1)
Ending balance $ 12.9 $ 11.7 $ 7.4
v3.22.0.1
Balance Sheet Details - Other Liabilities (Details) - USD ($)
$ in Millions
Dec. 31, 2021
Dec. 31, 2020
Organization, Consolidation and Presentation of Financial Statements [Abstract]    
Finance lease obligations $ 57.0 $ 54.0
Contractual obligations 0.0 12.6
Deferred tax liabilities 5.9 0.0
Other liabilities 27.1 14.3
Total other long-term liabilities $ 90.0 $ 80.9
v3.22.0.1
Debt - Senior Convertible Notes (Details) - USD ($)
 12 Months Ended
Dec. 31, 2021
Dec. 31, 2020
May 31, 2020
Nov. 30, 2018
Senior Convertible Notes        
Carrying amount of liability component $ 1,702,700,000 $ 1,667,200,000    
Senior Notes        
Senior Convertible Notes        
Total principal amount 1,999,800,000 2,057,500,000    
Unamortized debt discount (282,700,000) (371,100,000)    
Unamortized debt issuance costs (14,400,000) (19,200,000)    
Carrying amount of liability component 1,702,700,000 1,667,200,000    
Carrying value of equity component 449,400,000 461,000,000.0    
Senior Notes | Convertible Notes due 2023        
Senior Convertible Notes        
Total principal amount $ 792,300,000 $ 850,000,000.0   $ 850,000,000
Remaining amortization period of debt discount on the liability component: 1 year 10 months 24 days 2 years 10 months 24 days    
Senior Notes | Convertible Notes due 2025        
Senior Convertible Notes        
Total principal amount $ 1,207,500,000 $ 1,207,500,000 $ 1,210,000,000  
Remaining amortization period of debt discount on the liability component: 3 years 10 months 24 days 4 years 10 months 24 days    
v3.22.0.1
Debt - Conversion Value of Convertible Notes (Details) - Senior Notes - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2021
Dec. 31, 2020
Debt Instrument [Line Items]    
Total by which the notes’ if-converted value exceeds their principal amount $ 1,939.1 $ 1,077.5
Convertible Notes due 2023    
Debt Instrument [Line Items]    
Total by which the notes’ if-converted value exceeds their principal amount 1,797.3 1,077.5
Convertible Notes due 2025    
Debt Instrument [Line Items]    
Total by which the notes’ if-converted value exceeds their principal amount $ 141.8 $ 0.0
v3.22.0.1
Debt - Components of Interest Expense and Effective Interest Rates of Senior Convertible Notes (Details) - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2021
Dec. 31, 2020
Dec. 31, 2019
Cash interest expense:      
Contractual coupon interest $ 9.3 $ 9.3 $ 9.3
Non-cash interest expense:      
Accretion of debt discount 83.0 68.6 45.8
Amortization of debt issuance costs 4.4 4.0 3.7
Total interest expense recognized on senior notes $ 96.7 $ 81.9 $ 58.8
Convertible Notes due 2022      
Non-cash interest expense:      
Effective interest rate (as a percent)   5.10% 5.10%
Convertible Notes due 2023      
Non-cash interest expense:      
Effective interest rate (as a percent) 5.60% 5.60% 5.60%
Convertible Notes due 2025      
Non-cash interest expense:      
Effective interest rate (as a percent) 5.50% 5.50%  
v3.22.0.1
Debt - Narrative (Details)
 1 Months Ended 12 Months Ended
Oct. 01, 2021
USD ($)
May 31, 2020
USD ($)
shares
Nov. 30, 2018
USD ($)
d
$ / shares
shares
Dec. 31, 2021
USD ($)
d
trading_day
shares
Dec. 31, 2020
USD ($)
shares
Dec. 31, 2019
USD ($)
Dec. 31, 2018
USD ($)
Jun. 30, 2017
USD ($)
Debt Instrument [Line Items]                
Repurchase of convertible notes   $ 282,600,000   $ 0 $ 282,600,000 $ 0    
Repurchase and conversions of Notes (in shares) | shares   1,953,067            
Loss on extinguishment of debt       (1,500,000) (5,900,000) 0    
Proceeds from issuance of convertible notes, net of issuance costs       0 1,188,800,000 $ 0    
Equity component of 2025 Notes issuance, net of issuance costs         289,400,000      
Senior Notes                
Debt Instrument [Line Items]                
Total principal amount       1,999,800,000 2,057,500,000      
Senior Notes | Convertible Notes due 2023                
Debt Instrument [Line Items]                
Total principal amount     $ 850,000,000 792,300,000 850,000,000.0      
Interest rate on convertible notes (as a percent)     0.75%          
Principal amount exercised       57,700,000        
Loss on extinguishment of debt       $ 1,400,000        
Proceeds from issuance of convertible notes, net of issuance costs     $ 836,600,000          
Conversion ratio     0.0060869          
Conversion price of convertible notes (USD per share) | $ / shares     $ 164.29          
Benefit of note hedge upon conversions of 2023 Notes (in shares) | shares       241,845        
Holder's repurchase price percentage in event of fundamental change (as a percent)       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 | Convertible Notes due 2022                
Debt Instrument [Line Items]                
Total principal amount   $ 260,000,000           $ 400,000,000
Interest rate on convertible notes (as a percent)               0.75%
Principal amount exercised       $ 140,000,000        
Loss on extinguishment of debt         5,900,000      
Senior Notes | Convertible Notes due 2025                
Debt Instrument [Line Items]                
Total principal amount   $ 1,210,000,000   $ 1,207,500,000 1,207,500,000      
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   600.42 0.0016655          
Recognized additional paid-in capital from cash conversion option         $ 289,400,000      
Holder's repurchase price percentage in event of fundamental change (as a percent)       100.00%        
Proportion of conversion price (as a percent)       130.00%        
Redemption price (as a percent)       100.00%        
Senior Notes | Convertible Notes due 2025 | Maximum                
Debt Instrument [Line Items]                
Conversion ratio     0.0023720          
Line of Credit                
Debt Instrument [Line Items]                
Term of debt instrument 5 years              
Maximum borrowing capacity of revolving credit agreement       $ 200,000,000.0        
Option to increase revolving line of credit $ 500,000,000              
Line of Credit | Minimum                
Debt Instrument [Line Items]                
Unused capacity fee (as a percent)       0.175%        
Line of Credit | Maximum                
Debt Instrument [Line Items]                
Unused capacity fee (as a percent)       0.25%        
Common Stock                
Debt Instrument [Line Items]                
Repurchase and conversions of Notes (in shares) | shares       400,000 3,400,000      
Benefit of note hedge upon conversions of 2023 Notes (in shares) | shares       (200,000)        
Common Stock | Senior Notes | Convertible Notes due 2023                
Debt Instrument [Line Items]                
Repurchase and conversions of Notes (in shares) | shares       350,778        
Treasury stock reissued (in shares) | shares       198,647        
Common Stock | Senior Notes | Convertible Notes due 2022                
Debt Instrument [Line Items]                
Repurchase and conversions of Notes (in shares) | shares       1,412,497        
Additional Paid-In Capital                
Debt Instrument [Line Items]                
Equity component of 2025 Notes issuance, net of issuance costs         $ 289,400,000      
Additional Paid-In Capital | Senior Notes | Convertible Notes due 2023                
Debt Instrument [Line Items]                
Recognized additional paid-in capital from cash conversion option             $ 171,600,000  
Debt Instrument Conversion Term One | Senior Notes | 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 | Convertible Notes due 2023 | Maximum                
Debt Instrument [Line Items]                
Number of trading days | d       30        
Debt Instrument Conversion Term One | Senior Notes | Convertible Notes due 2025 | Minimum                
Debt Instrument [Line Items]                
Number of trading days | trading_day       20        
Proportion of applicable conversion price (as a percent)       130.00%        
Debt Instrument Conversion Term One | Senior Notes | Convertible Notes due 2025 | Maximum                
Debt Instrument [Line Items]                
Number of trading days | trading_day       30        
Debt Instrument Conversion Term Two | Senior Notes | Convertible Notes due 2023                
Debt Instrument [Line Items]                
Number of trading days | d       5        
Debt Instrument Conversion Term Two | Senior Notes | 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 | Convertible Notes due 2025                
Debt Instrument [Line Items]                
Number of trading days | trading_day       5        
Debt Instrument Conversion Term Two | Senior Notes | Convertible Notes due 2025 | Maximum                
Debt Instrument [Line Items]                
Number of trading days | trading_day       5        
Proportion of applicable conversion price (as a percent)       98.00%        
Designated as Hedging Instrument | Senior Notes | 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          
Base Rate | Line of Credit | Minimum                
Debt Instrument [Line Items]                
Basis spread on variable rate (as a percent)       0.375%        
Base Rate | Line of Credit | Maximum                
Debt Instrument [Line Items]                
Basis spread on variable rate (as a percent)       1.00%        
London Interbank Offered Rate (LIBOR) | Line of Credit                
Debt Instrument [Line Items]                
Basis spread on variable rate (as a percent)       1.00%        
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%        
Simple Risk Free Rate (RFR) | Line of Credit                
Debt Instrument [Line Items]                
Basis spread on variable rate (as a percent)       0.0326%        
Simple Risk Free Rate (RFR) | Line of Credit | Minimum                
Debt Instrument [Line Items]                
Basis spread on variable rate (as a percent)       1.375%        
Simple Risk Free Rate (RFR) | Line of Credit | Maximum                
Debt Instrument [Line Items]                
Basis spread on variable rate (as a percent)       2.00%        
Federal Reserve Bank Of New York Rate (NYFRB) | Line of Credit                
Debt Instrument [Line Items]                
Basis spread on variable rate (as a percent)       0.50%        
v3.22.0.1
Debt - Availability and Outstanding Borrowings under Credit Agreement (Details)
$ in Millions
Dec. 31, 2021
USD ($)
Line of Credit Facility [Line Items]  
Total available balance $ 192.7
Line of Credit  
Line of Credit Facility [Line Items]  
Line of credit available 200.0
Outstanding borrowings 0.0
Line of Credit | Letter of Credit  
Line of Credit Facility [Line Items]  
Line of credit available 25.0
Outstanding letters of credit $ 7.3
v3.22.0.1
Leases And Other Commitments - Narrative (Details)
$ in Millions
 12 Months Ended
Dec. 31, 2021
USD ($)
extension_option
Dec. 31, 2020
USD ($)
Dec. 31, 2019
USD ($)
Lessee, Lease, Description [Line Items]      
Finance Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration] Accounts payable and accrued liabilities Accounts payable and accrued liabilities  
Finance Lease, Liability, Noncurrent, Statement of Financial Position [Extensible Enumeration] Other long-term liabilities Other long-term liabilities  
Asset retirement obligations $ 7.4 $ 4.5  
Amortization of operating lease right-of-use asset 18.0 12.4 $ 9.1
Purchase obligations $ 324.1 $ 335.6  
Term of purchase obligations 1 year    
Maximum      
Lessee, Lease, Description [Line Items]      
Remaining lease terms 19 years    
Renewal term 5 years    
Minimum      
Lessee, Lease, Description [Line Items]      
Number of options to extend | extension_option 1    
v3.22.0.1
Leases And Other Commitments - Maturity of Lease Liabilities (Details) - USD ($)
$ in Millions
Dec. 31, 2021
Dec. 31, 2020
Operating Leases    
2022 $ 25.7  
2023 25.2  
2024 23.5  
2025 22.5  
2026 22.3  
Thereafter 17.2  
Total future lease cost 136.4  
Less: Imputed interest (17.3)  
Present value of future payments 119.1  
Less: Current portion (20.5) $ (16.5)
Long-term portion 98.6 101.8
Finance Leases    
2022 6.3  
2023 6.4  
2024 5.4  
2025 4.8  
2026 4.9  
Thereafter 64.0  
Total future lease cost 91.8  
Less: Imputed interest (31.5)  
Present value of future payments 60.3  
Less: Current portion (3.3)  
Finance lease obligations $ 57.0 $ 54.0
v3.22.0.1
Leases And Other Commitments - Lease Cost (Details) - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2021
Dec. 31, 2020
Dec. 31, 2019
Leases [Abstract]      
Amortization of right-of-use assets $ 4.1 $ 2.0 $ 1.1
Interest on lease liabilities 3.0 1.9 0.8
Operating lease cost 23.3 18.4 12.2
Short-term lease cost 2.3 1.3 3.5
Variable lease cost 6.0 4.2 3.9
Total lease cost $ 38.7 $ 27.8 $ 21.5
v3.22.0.1
Leases And Other Commitments - Other Information (Details) - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2021
Dec. 31, 2020
Dec. 31, 2019
Leases [Abstract]      
Operating cash flows from operating leases $ 23.3 $ 18.3 $ 14.3
Operating cash flows from finance leases 1.9 0.7 0.8
Financing cash flows from finance leases 9.9 8.5 0.5
Right-of-use assets obtained in exchange for operating lease liabilities 13.1 33.5 80.6
Right-of-use assets obtained in exchange for finance lease liabilities $ 6.4 $ 41.7 $ 15.5
Weighted average remaining lease term of operating leases 5 years 6 months 6 years 1 month 6 days 6 years 2 months 12 days
Weighted average remaining lease term of finance leases 15 years 10 months 24 days 23 years 3 months 18 days 13 years 3 months 18 days
Weighted average discount rate of operating leases (as a percent) 5.00% 5.00% 5.00%
Weighted average discount rate of finance leases (as a percent) 5.10% 5.00% 5.00%
v3.22.0.1
Income Taxes - Jurisdictions, Net Income (Loss) Subject to Income Taxes (Details) - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2021
Dec. 31, 2020
Dec. 31, 2019
Income Tax Disclosure [Abstract]      
United States $ 235.3 $ 270.7 $ 119.1
Outside of the United States (61.4) (45.7) (14.9)
Income before income taxes $ 173.9 $ 225.0 $ 104.2
v3.22.0.1
Income Taxes - Components of Provision (Details) - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2021
Dec. 31, 2020
Dec. 31, 2019
Current:      
Federal $ 5.7 $ 0.0 $ 0.0
State 8.3 6.1 1.0
Foreign 10.1 2.6 1.9
Total current income taxes 24.1 8.7 2.9
Deferred:      
Federal 5.5 (198.8) 0.0
State (3.4) (51.4) 0.0
Foreign (7.0) (27.1) 0.2
Total deferred income taxes (4.9) (277.3) 0.2
Income taxes at effective rates $ 19.2 $ (268.6) $ 3.1
v3.22.0.1
Income Taxes - Significant Loss and Tax Credit Carryforwards and Years of Expiration (Details) - USD ($)
$ in Millions
Dec. 31, 2021
Dec. 31, 2020
Federal    
Operating Loss Carryforwards [Line Items]    
Net operating loss $ 38.0 $ 169.1
Federal | R&D credits    
Operating Loss Carryforwards [Line Items]    
Tax credits 80.1 73.1
Federal | Foreign tax credits    
Operating Loss Carryforwards [Line Items]    
Tax credits 1.5 0.0
State | California    
Operating Loss Carryforwards [Line Items]    
Net operating loss 236.3 236.3
State | California | R&D credits    
Operating Loss Carryforwards [Line Items]    
Tax credits 81.4 66.2
State | Other states    
Operating Loss Carryforwards [Line Items]    
Net operating loss 21.3 36.1
Foreign | UK    
Operating Loss Carryforwards [Line Items]    
Net operating loss $ 102.4 $ 113.2
v3.22.0.1
Income Taxes - Narrative (Details) - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2021
Dec. 31, 2020
Dec. 31, 2019
Operating Loss Carryforwards [Line Items]      
Research and development tax credits utilized $ 2.2    
Tax credit carryforwards subject to expiration 1.8    
Change in net deferred tax assets 1.5    
Goodwill purchase accounting adjustments 7.3    
Tax effect of unrealized loss on investments 0.5    
Deferred tax expense 4.9    
Convertible debt adjustments 1.1    
Valuation allowance amount 69.9 $ 55.5  
Unrecognized tax benefits that would impact effective tax rate $ 29.5 $ 23.5 $ 0.0
Possible extension period of tax holiday 3 years    
Undistributed foreign earnings $ 15.3    
California and Foreign      
Operating Loss Carryforwards [Line Items]      
Valuation allowance amount $ 69.9    
v3.22.0.1
Income Taxes - Deferred Tax Assets and Liabilities (Details) - USD ($)
$ in Millions
 3 Months Ended 12 Months Ended
Dec. 31, 2021
Dec. 31, 2021
Dec. 31, 2020
Dec. 31, 2019
Deferred tax assets:        
Net operating loss carryforwards $ 53.0 $ 53.0 $ 69.2  
Capitalized research and development expenses 49.3 49.3 53.6  
Tax credits 105.5 105.5 101.1  
Share-based compensation 13.3 13.3 13.0  
Fixed and intangible assets 26.4 26.4 16.9  
Accrued liabilities and reserves 105.5 105.5 110.3  
Collaborative agreement milestone accrual 21.9 21.9 0.0  
Other 0.5 0.5 0.0  
Total gross deferred tax assets 375.4 375.4 364.1  
Less: valuation allowance (69.9) (69.9) (55.5)  
Total net deferred tax assets 305.5 305.5 308.6  
Deferred tax liabilities:        
Fixed assets and acquired intangibles assets (42.5) (42.5) (36.3)  
Convertible debt discount (48.1) (48.1) (55.9)  
Total deferred tax liabilities (90.6) (90.6) (92.2)  
Net deferred tax assets (liabilities) 214.9 214.9 216.4  
Collaborative research and development fee $ 87.1 $ 87.1 $ 0.0 $ 0.0
v3.22.0.1
Income Taxes - Reconciliation between Effective Tax Rate and Statutory Rate (Details) - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2021
Dec. 31, 2020
Dec. 31, 2019
Effective Income Tax Rate Reconciliation, Amount [Abstract]      
U.S. federal statutory tax rate $ 36.5 $ 47.3 $ 21.9
State income tax, net of federal benefit 5.6 3.2 (2.3)
Permanent items 26.2 13.1 1.0
Research and development credits (28.9) (24.4) (10.8)
Foreign tax credit (3.7) 0.0 0.0
Foreign rate differential (0.1) (0.1) 5.6
Stock and officers compensation (20.4) (28.7) (14.7)
Change in statutory tax rates (10.0) (4.1) 0.0
Other (0.4) 0.1 (1.0)
Change in valuation allowance 14.4 (275.0) 3.4
Income taxes at effective rates $ 19.2 $ (268.6) $ 3.1
v3.22.0.1
Income Taxes - Unrecognized Tax Benefits (Details) - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2021
Dec. 31, 2020
Dec. 31, 2019
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward]      
Balance at beginning of period $ 36.6 $ 29.5 $ 25.9
Decreases related to prior year tax positions   (0.9) (0.9)
Increases related to prior year tax positions 0.4    
Increases related to current year tax positions 9.8 8.0 4.5
Balance at end of period $ 46.8 $ 36.6 $ 29.5
v3.22.0.1
Employee Benefit Plans and Stockholders' Equity - Narrative (Details) - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2021
Dec. 31, 2020
Dec. 31, 2019
Dec. 31, 2018
May 30, 2019
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]          
Maximum payroll deductions (as a percent) 10.00%        
Employee purchase price floor (as a percent) 85.00%        
Stock authorized in ESPP (shares) 1,500,000        
Purchases of treasury stock (shares) 43,198 0 0 800,000  
Stock options outstanding (shares) 0 0      
Intrinsic value of options exercised   $ 7.9 $ 7.4    
401(k) Plan          
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]          
Maximum employee contribution (as a percent) 90.00%        
Employer matching contribution (as a percent) 50.00%        
Employee contribution (as a percent) 5.00%        
Total matching contributions $ 9.9 $ 6.7 $ 4.8    
ESPP 2015          
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]          
Issuance of common stock for Employee Stock Purchase Plan (in shares) 59,810 89,194 150,408    
Stock available for issuance for future awards (shares) 800,000        
Unrecognized compensation costs related to unvested restricted stock units $ 157.8        
EIP 2015          
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]          
Stock available for issuance for future awards (shares) 4,200,000 4,500,000 4,900,000 3,200,000  
Stock reserved for issuance (shares)         9,800,000
RSUs and PSUs          
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]          
Fair value of vested awards $ 284.5 $ 331.8 $ 207.2    
RSUs and PSUs | EIP 2015          
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]          
Stock available for issuance for future awards (shares) 4,200,000        
Unvested awards (shares) 800,000 1,200,000 1,800,000 2,700,000  
RSUs | Minimum          
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]          
Vesting period 3 years        
RSUs | Maximum          
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]          
Vesting period 4 years        
RSUs | EIP 2015          
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]          
Unvested awards (shares) 700,000        
PSUs          
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]          
Vesting period 3 years        
PSUs | Minimum          
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]          
Common received vesting percentage 0.00%        
PSUs | Maximum          
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]          
Common received vesting percentage 200.00%        
PSUs | EIP 2015          
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]          
Unvested awards (shares) 100,000        
v3.22.0.1
Employee Benefit Plans and Stockholders' Equity - Shares Available for Grant and RSU and PSU Activity (Details) - USD ($)
$ / shares in Units, shares in Thousands, $ in Millions
 12 Months Ended
Dec. 31, 2021
Dec. 31, 2020
Dec. 31, 2019
Shares Available for Grant      
Vested (shares)   0 0
EIP 2015      
Shares Available for Grant      
Number of shares available for grant at beginning of period (shares) 4,500 4,900 3,200
Additional shares authorized (shares)     2,200
Granted (shares) (400) (500) (700)
Vested (shares) 0    
Forfeited (shares) 100 100 200
Number of shares available for grant at end of period (shares) 4,200 4,500 4,900
EIP 2015 | RSUs and PSUs      
Shares Available for Grant      
Number of shares available for grant at end of period (shares) 4,200    
Shares      
Nonvested at beginning of period (shares) 1,200 1,800 2,700
Granted (shares) 400 500 700
Vested (shares) (700) (1,000) (1,400)
Forfeited (shares) (100) (100) (200)
Nonvested at end of period (shares) 800 1,200 1,800
Weighted  Average Grant Date Fair Value      
Nonvested at beginning of period (USD per share) $ 183.51 $ 96.63 $ 69.19
Granted (USD per share) 351.32 300.36 144.37
Vested (USD per share) 137.90 92.07 69.45
Forfeited (USD per share) 279.12 137.44 83.45
Nonvested at end of period (USD per share) $ 307.86 $ 183.51 $ 96.63
Aggregate Intrinsic Value $ 411.3 $ 430.6 $ 392.0
v3.22.0.1
Employee Benefit Plans and Stockholders' Equity - Share-based Compensation Expenses (Details) - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2021
Dec. 31, 2020
Dec. 31, 2019
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]      
Share-based compensation expense included in operating expenses $ 113.4 $ 119.4 $ 102.7
Cost of sales      
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]      
Share-based compensation expense included in operating expenses 8.5 14.6 9.0
Research and development      
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]      
Share-based compensation expense included in operating expenses 41.0 37.8 33.5
Selling, general and administrative      
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]      
Share-based compensation expense included in operating expenses $ 63.9 $ 67.0 $ 60.2
v3.22.0.1
Employee Benefit Plans and Stockholders' Equity - Valuation Assumptions for Employee Stock Purchase Plan Purchase Rights (Details) - Employee Stock Purchase Plan
 12 Months Ended
Dec. 31, 2021
Dec. 31, 2020
Dec. 31, 2019
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Dividend yield (as a percent) 0.00% 0.00% 0.00%
Expected life (in years) 6 months 6 months 1 year
Minimum      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Risk free interest rate (as a percent) 0.06% 0.13% 1.72%
Expected volatility of common stock (as a percent) 36.00% 51.00% 40.00%
Maximum      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Risk free interest rate (as a percent) 0.07% 0.95% 2.55%
Expected volatility of common stock (as a percent) 45.00% 63.00% 51.00%
v3.22.0.1
Business Segment and Geographic Information - Narrative (Details)
 12 Months Ended
Dec. 31, 2021
segment
Segment Reporting [Abstract]  
Number of reportable segments 1
v3.22.0.1
Business Segment and Geographic Information - Summary (Details) - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2021
Dec. 31, 2020
Dec. 31, 2019
Segment Reporting Information [Line Items]      
Amount $ 2,448.5 $ 1,926.7 $ 1,476.0
% of Total 100.00% 100.00% 100.00%
Distributor      
Segment Reporting Information [Line Items]      
Amount $ 2,024.3 $ 1,437.6 $ 1,011.6
% of Total 83.00% 75.00% 69.00%
Direct      
Segment Reporting Information [Line Items]      
Amount $ 424.2 $ 489.1 $ 464.4
% of Total 17.00% 25.00% 31.00%
United States      
Segment Reporting Information [Line Items]      
Amount $ 1,849.4 $ 1,509.5 $ 1,161.5
% of Total 76.00% 78.00% 79.00%
Outside of the United States      
Segment Reporting Information [Line Items]      
Amount $ 599.1 $ 417.2 $ 314.5
% of Total 24.00% 22.00% 21.00%
v3.22.0.1
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS (Details) - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2021
Dec. 31, 2020
Dec. 31, 2019
Accounts Receivable, Allowance for Credit Loss [Roll Forward]      
Balance at beginning of period $ 7.2 $ 5.8 $ 7.2
Provision for doubtful accounts (1.4) 3.2 0.9
Write-offs and adjustments (0.5) (2.1) (3.0)
Recoveries 0.1 0.3 0.7
Balance at end of period $ 5.4 $ 7.2 $ 5.8
v3.22.0.1
Label Element Value
Accounting Standards Update [Extensible Enumeration] us-gaap_AccountingStandardsUpdateExtensibleList Accounting Standards Update 2016-02 [Member]