(Reuters) -Medical device maker Dexcom (NASDAQ:DXCM) on Thursday raised its annual revenue forecast and beat quarterly estimates on strong demand for its continuous glucose monitoring (CGM) devices, sending its shares more than 14% higher in extended trading.
Makers of medical products such as bariatric surgery devices and CGM systems have been trying to ease investor concerns over a potential hit to demand from the rising popularity of new GLP-1 diabetes drugs such as Novo Nordisk (NYSE:NVO)'s Ozempic and Eli Lilly (NYSE:LLY)'s Mounjaro.
Dexcom joined larger peer Abbott in saying the use of GLP-1 drugs among diabetes patients could end up increasing demand for CGMs, which track blood sugar levels throughout the day and can transmit glucose readings as frequently as five minutes.
"Physicians are also pursuing CGM as they add GLP-1 as diabetes therapy," said Dexcom CEO Kevin Sayer, adding that the device is given to patients as a scoreboard to let them know how they're doing.
Dexcom's quarterly sales rose 27% to $975 million, surpassing analysts' estimates of $939.24 million, according to LSEG data.
Abbott had also posted strong sales of $1.4 billion for its CGM system FreeStyle Libre in diabetes care.
Dexcom raised its annual revenue forecast to between $3.58 billion and $3.6 billion, compared with its previous range of $3.5 billion to $3.55 billion. Analysts expect annual sales of $3.55 billion.
Excluding items, the company posted a profit of 50 cents for the quarter ended Sept. 30, compared with estimates of 35 cents.
Shares of the California-based company rose to $93 after the bell.