# DEXCOM INC (DXCM)

Informational only - not investment advice.

CIK: 0001093557
SIC: 3841 Surgical & Medical Instruments & Apparatus
SIC breadcrumb: [Manufacturing](/division/D/) > [SIC Major Group 38](/major-group/38/) > [SIC 3841 Surgical & Medical Instruments & Apparatus](/industry/3841/)
Latest 10-K filed: 2026-02-12
SEC page: https://www.sec.gov/edgar/browse/?CIK=1093557
Filing source: https://www.sec.gov/Archives/edgar/data/1093557/000109355726000027/dxcm-20251231.htm

## At a glance

FY2025 · period end 2025-12-31 · filed 2026-02-12 · accession 0001093557-26-000027 · source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001093557.json

| Metric | Value | FY | Provenance |
| --- | ---: | ---: | --- |
| Revenue | 4,662,000,000 USD | 2025 | verified |
| Net income | 836,300,000 USD | 2025 | verified |
| Assets | 6,339,900,000 USD | 2025 | verified |
| Free cash flow | 1,077,200,000 USD | 2025 | computed |
| Net margin | 17.94% | 2025 | computed |
| Operating margin | 19.56% | 2025 | computed |
| Revenue YoY | +15.60% | 2025 | computed |
| ROE | 30.46% | 2025 | computed |

Computed values are grepcent-computed from the verified facts above and may differ from ratios the company itself reports. Free cash flow = operating cash flow − capital expenditures. Net margin = net income ÷ revenue. Operating margin = operating income ÷ revenue. Revenue YoY = FY2025 revenue ÷ FY2024 revenue − 1 (consecutive fiscal years only). ROE = net income ÷ period-end stockholders' equity.

Peer groups: [Medical devices and instruments](/compare/medical-devices/) · SIC 3841 Surgical & Medical Instruments & Apparatus

No market price, no rating, no forecast on this site. Not investment advice.

## Peer comparisons including DXCM

- Medical devices and instruments: [peer review](/compare/medical-devices/) · [market-risk page](/compare/medical-devices/risk/)

### Peer percentile fingerprint

| Ratio | DXCM | Peer median | Percentile | N |
| --- | ---: | ---: | ---: | ---: |
| Net margin | 17.9% | -6.0% | 89 | 63 |
| Operating margin | 19.6% | -2.7% | 90 | 63 |
| Revenue growth | 15.6% | 13.6% | 59 | 64 |
| FCF margin | 23.1% | 0.2% | 94 | 63 |
| ROE | 30.5% | -9.1% | 96 | 58 |
| ROA | 13.2% | -4.8% | 91 | 65 |
| Liabilities / equity | 1.31 | 0.89 | 63 | 63 |
| Current ratio | 1.88 | 3.23 | 19 | 65 |

Percentile = share of the N covered peers reporting that ratio whose value is lower (ties counted half); computed among grepcent-covered companies in SIC industry 3841 Surgical & Medical Instruments & Apparatus, not the whole market. A higher percentile means a higher value of the ratio, not a better company. Ratios with fewer than 8 reporting peers are omitted. Latest reported values per company; fiscal periods may differ. Descriptive arithmetic - not a score, rating, or ranking.

## Selected Fundamentals
| Metric | Value | Unit | FY | Filed |
| --- | ---: | --- | ---: | --- |
| Revenue | 4662000000 | USD | 2025 | 2026-02-12 |
| Net income | 836300000 | USD | 2025 | 2026-02-12 |
| Assets | 6339900000 | USD | 2025 | 2026-02-12 |

## Financials

Annual standardized facts from SEC companyfacts as of latest extracted filing date 2026-02-12. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001093557.json. Derived margins, ratios, and free cash flow are computed from the extracted annual SEC facts.

| Metric | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| Revenue | 573,300,000 | 718,500,000 | 1,031,600,000 | 1,476,000,000 | 1,926,700,000 | 2,448,500,000 | 2,909,800,000 | 3,622,300,000 | 4,033,000,000 | 4,662,000,000 |
| Net income | -65,600,000 | -50,200,000 | -127,100,000 | 101,100,000 | 549,700,000 | 216,900,000 | 341,200,000 | 541,500,000 | 576,200,000 | 836,300,000 |
| Operating income | -63,900,000 | -42,500,000 | -186,300,000 | 142,300,000 | 299,500,000 | 265,800,000 | 391,200,000 | 597,700,000 | 600,000,000 | 911,800,000 |
| Gross profit | 378,400,000 | 492,100,000 | 663,900,000 | 931,500,000 | 1,280,100,000 | 1,680,500,000 | 1,883,100,000 | 2,288,900,000 | 2,438,200,000 | 2,801,900,000 |
| Diluted EPS |  | -0.58 | -1.44 | 1.10 | 1.33 | 0.53 | 0.82 | 1.30 | 1.42 | 2.09 |
| Operating cash flow | 56,200,000 | 92,000,000 | 123,200,000 | 314,500,000 | 475,600,000 | 442,500,000 | 669,500,000 | 748,500,000 | 989,500,000 | 1,440,700,000 |
| Capital expenditures | 55,700,000 | 66,000,000 | 67,100,000 | 180,000,000 | 199,000,000 | 389,200,000 | 364,800,000 | 236,600,000 | 358,800,000 | 363,500,000 |
| Share buybacks | 0.00 | 0.00 | 100,000,000 | 0.00 | 0.00 | 0.00 | 557,700,000 | 688,700,000 | 750,000,000 | 500,000,000 |
| Assets | 402,800,000 | 904,100,000 | 1,916,000,000 | 2,395,000,000 | 4,290,500,000 | 4,933,300,000 | 5,391,700,000 | 6,264,500,000 | 6,484,500,000 | 6,339,900,000 |
| Liabilities | 119,000,000 | 484,700,000 | 1,252,700,000 | 1,512,400,000 | 2,464,000,000 | 2,891,200,000 | 3,259,900,000 | 4,195,900,000 | 4,381,900,000 | 3,593,900,000 |
| Stockholders' equity |  |  | 663,300,000 | 882,600,000 | 1,551,900,000 | 2,042,100,000 | 2,131,800,000 | 2,068,600,000 | 2,102,600,000 | 2,746,000,000 |
| Cash and cash equivalents | 94,500,000 | 441,500,000 | 1,137,000,000 | 446,200,000 | 817,600,000 | 1,052,600,000 | 642,300,000 | 566,300,000 | 606,100,000 | 917,700,000 |
| Free cash flow | 500,000 | 26,000,000 | 56,100,000 | 134,500,000 | 276,600,000 | 53,300,000 | 304,700,000 | 511,900,000 | 630,700,000 | 1,077,200,000 |

### Ratios

ROE and ROA use period-end equity/assets. Liabilities / equity uses total liabilities divided by stockholders' equity. Current ratio uses current assets divided by current liabilities when both are reported.

| Metric | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| Net margin | -11.44% | -6.99% | -12.32% | 6.85% | 28.53% | 8.86% | 11.73% | 14.95% | 14.29% | 17.94% |
| Operating margin | -11.15% | -5.92% | -18.06% | 9.64% | 15.54% | 10.86% | 13.44% | 16.50% | 14.88% | 19.56% |
| Return on equity |  |  | -19.16% | 11.45% | 35.42% | 10.62% | 16.01% | 26.18% | 27.40% | 30.46% |
| Return on assets | -16.29% | -5.55% | -6.63% | 4.22% | 12.81% | 4.40% | 6.33% | 8.64% | 8.89% | 13.19% |
| Liabilities / equity |  |  | 1.89 | 1.71 | 1.59 | 1.42 | 1.53 | 2.03 | 2.08 | 1.31 |
| Current ratio | 2.73 | 5.36 | 7.64 | 5.47 | 5.58 | 5.11 | 1.99 | 2.84 | 1.47 | 1.88 |

## As-reported value updates

6 tracked differences above grepcent's stated thresholds were found between the earliest XBRL-filed value and the value currently on file for the same fiscal period.

Ledger: /company/DXCM/revisions/


## Quarterly

Quarterly standardized facts from SEC companyfacts as of latest extracted filing date 2026-07-30. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001093557.json.

Flow metrics use discrete quarter-length periods from 10-Q/10-Q/A filings. Q4 revenue and net income are derived only when annual FY and nine-month YTD facts exist for the same fiscal year; derived Q4 values are labeled. EPS Q4 is not derived.

| Quarter | End date | Revenue | Net income | Diluted EPS | Method |
| --- | --- | ---: | ---: | ---: | --- |
| 2022-Q3 | 2022-09-30 |  |  | 0.24 | reported discrete quarter |
| 2023-Q1 | 2023-03-31 |  |  | 0.12 | reported discrete quarter |
| 2023-Q2 | 2023-06-30 |  |  | 0.28 | reported discrete quarter |
| 2023-Q3 | 2023-09-30 | 975,000,000 | 120,700,000 | 0.29 | reported discrete quarter |
| 2023-Q4 | 2023-12-31 | 1,034,500,000 | 256,300,000 |  | derived Q4 = FY annual - nine-month YTD |
| 2024-Q1 | 2024-03-31 | 921,000,000 | 146,400,000 | 0.36 | reported discrete quarter |
| 2024-Q2 | 2024-06-30 | 1,004,300,000 | 143,500,000 | 0.35 | reported discrete quarter |
| 2024-Q3 | 2024-09-30 | 994,200,000 | 134,600,000 | 0.34 | reported discrete quarter |
| 2024-Q4 | 2024-12-31 | 1,113,500,000 | 151,700,000 |  | derived Q4 = FY annual - nine-month YTD |
| 2025-Q1 | 2025-03-31 | 1,036,000,000 | 105,400,000 | 0.27 | reported discrete quarter |
| 2025-Q2 | 2025-06-30 | 1,157,100,000 | 179,800,000 | 0.45 | reported discrete quarter |
| 2025-Q3 | 2025-09-30 | 1,209,300,000 | 283,800,000 | 0.70 | reported discrete quarter |
| 2025-Q4 | 2025-12-31 | 1,259,600,000 | 267,300,000 |  | derived Q4 = FY annual - nine-month YTD |
| 2026-Q1 | 2026-03-31 | 1,191,900,000 | 199,500,000 | 0.51 | reported discrete quarter |
| 2026-Q2 | 2026-06-30 | 1,308,400,000 | 249,100,000 | 0.64 | reported discrete quarter |

## Filed narrative (10-K & 10-Q)

## Business

Verbatim Item 1 Business section from DXCM's latest 10-K: [/company/DXCM/business/](/company/DXCM/business/).

## Risk Factors

Verbatim Item 1A Risk Factors from DXCM's latest 10-K: [/company/DXCM/risk-factors/](/company/DXCM/risk-factors/).

## Latest quarter (10-Q)

Latest 10-Q source: https://www.sec.gov/Archives/edgar/data/1093557/000109355726000143/dxcm-20260630.htm

Extracted structurally from real Item 2 body heading to real Item 3/4 boundary. Published MD&A gate trimmed front/tail over-capture.
Confidence: high
Filing date: 2026-07-30
Report date: 2026-06-30

ITEM 2 - MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This Quarterly Report on Form 10-Q, including the following Management’s Discussion and Analysis of Financial Condition and Results of Operations, contains forward-looking statements that are not purely historical regarding Dexcom’s or its management’s intentions, beliefs, expectations and strategies for the future. These forward-looking statements fall within the meaning of the federal securities laws that relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as “may,” “will,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “intend,” “potential” or “continue” or the negative of these terms or other comparable terminology. Forward-looking statements are made as of the date of this Quarterly Report on Form 10-Q, deal with future events, are subject to various risks and uncertainties, and actual results could differ materially from those anticipated in those forward looking statements. The risks and uncertainties that could cause actual results to differ materially are more fully described under “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025 filed with the SEC on February 12, 2026, together with any updates identified under “Risk Factors” in Part II, Item 1A of this Quarterly Report on Form 10-Q, elsewhere in this Quarterly Report on Form 10-Q, and in our other reports filed with the SEC. We assume no obligation to update any of the forward-looking statements after the date of this Quarterly Report on Form 10-Q or to conform these forward-looking statements to actual results. You should read the following discussion and analysis together with our condensed consolidated financial statements and related notes in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Overview

[[GREPCENT_TABLE]]
[["","Who We Are"],["","We are a medical device company primarily focused on the design, development and commercialization of continuous glucose monitoring, or CGM, systems for the management of diabetes and metabolic health by patients, caregivers, and clinicians around the world.We received approval from the Food and Drug Administration, or FDA, and commercialized our first product in 2006. We launched our latest generation systems, the Dexcom G7 Continuous Glucose Monitoring System, or G7, in 2023, and the Dexcom G7 15 Day Continuous Glucose Monitoring System, or G7 15 Day, in late 2025. In August 2024, we launched Stelo, our biosensor designed for adults with prediabetes and Type 2 diabetes who do not use insulin, as the first over-the-counter glucose biosensor in the U.S.Unless the context requires otherwise, the terms \u201cwe,\u201d \u201cus,\u201d \u201cour,\u201d the \u201ccompany,\u201d or \u201cDexcom\u201d refer to DexCom, Inc. and its subsidiaries."]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["","Global Presence"],["","We have built a direct sales organization in North America and certain international markets to call on health care professionals, such as endocrinologists, physicians and diabetes educators, who can educate and influence patient adoption of continuous glucose monitoring. To complement our direct sales efforts, we have entered into distribution arrangements in North America and several international markets that allow distributors to sell our products."],["","Future Developments"],["","Product Development: We plan to develop future generations of technologies that are focused on improved performance and convenience and that will enable intelligent insulin administration. Over the longer term, we plan to continue to develop and improve networked platforms with open architecture, connectivity and transmitters capable of communicating with other devices. We also intend to expand our efforts to accumulate CGM patient data and metrics and apply predictive modeling and machine learning to generate interactive CGM insights that can inform patient behavior."],["","Partnerships: We continue to support partnerships with insulin pump companies and companies or institutions developing insulin delivery systems, including automated insulin delivery systems. With the introduction of Stelo, we are also pursuing and supporting development partnerships with consumer technology product companies that seek to provide metabolic health insights to their customers."],["","New Opportunities: We are also exploring how to extend our offerings to other opportunities, including for people with pre-diabetes, people who are obese, people who are pregnant, and people in the hospital setting. Eventually, we may apply our technological expertise to products beyond glucose monitoring."]]
[[/GREPCENT_TABLE]]

27

Table of Contents

Critical Accounting Estimates

The discussion and analysis of our financial condition and results of operations are based on our condensed consolidated financial statements, which we have prepared in accordance with GAAP. The preparation of these condensed consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements as well as the reported revenue and expenses during the reporting periods. On an ongoing basis, we evaluate our estimates and judgments. We base our estimates on historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

We believe that the estimates, assumptions and judgments involved in the accounting policies described in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of our Annual Report on Form 10-K for the fiscal year ended December 31, 2025, have the greatest potential impact on our financial statements, so we consider them to be our critical accounting policies and estimates. There were no material changes to our critical accounting estimates during the six months ended June 30, 2026.

28

Table of Contents

[[GREPCENT_TABLE]]
[["Overview of Financial Results"],["The most important financial indicators that we use to assess our business are revenue, gross profit, operating income, net income, and operating cash flow."],["Key Highlights for the Three Months Ended June 30, 2026 include the following:"],["Revenue","","","Gross Profit","","","Operating Income","","","Net Income","","","Operating Cash Flow"],["$1.31 billion","","","$830.0 million","","","$318.3 million","","","$249.1 million","","","$269.2 million"],["up 13% from the same period in 2025","","","up 20% from the same period in 2025","","","up 50% from the same period in 2025","","","up 39% from the same period in 2025","","","down 11% from the same period in 2025"]]
[[/GREPCENT_TABLE]]

We ended the second quarter of 2026 with cash, cash equivalents and short-term marketable securities totaling $1.95 billion.

Results of Operations

Financial Overview

[[GREPCENT_TABLE]]
[["Three Months Ended June 30, 2026 Compared to Three Months Ended June 30, 2025"],["","Three Months Ended June 30,","","2026 - 2025"],["(In millions, except per share amounts)","2026","","% of Revenue (1)","","2025","","% of Revenue (1)","","$ Change","","% Change"],["Revenue","$","1,308.4","","","100","%","","$","1,157.1","","","100","%","","$","151.3","","","13","%"],["Cost of sales","478.4","","","37","%","","468.3","","","40","%","","10.1","","","2","%"],["Gross profit","830.0","","","63.4","%","","688.8","","","59.5","%","","141.2","","","20","%"],["Operating expenses:"],["Research and development","153.0","","","12","%","","148.2","","","13","%","","4.8","","","3","%"],["Selling, general and administrative","358.7","","","27","%","","328.0","","","28","%","","30.7","","","9","%"],["Total operating expenses","511.7","","","39","%","","476.2","","","41","%","","35.5","","","7","%"],["Operating income","318.3","","","24","%","","212.6","","","18","%","","105.7","","","50","%"],["Other income (expense), net","(0.8)","","","\u2014","%","","28.5","","","2","%","","(29.3)","","","**"],["Income before income taxes","317.5","","","24","%","","241.1","","","21","%","","76.4","","","32","%"],["Income tax expense","68.4","","","5","%","","61.3","","","5","%","","7.1","","","12","%"],["Net income","$","249.1","","","19","%","","$","179.8","","","16","%","","$","69.3","","","39","%"],["Basic net income per share","$","0.65","","","**","","$","0.46","","","**","","$","0.19","","","41","%"],["Diluted net income per share","$","0.64","","","**","","$","0.45","","","**","","$","0.19","","","42","%"],["(1) The sum of the individual percentages may not equal the total due to rounding."],["** Not meaningful"]]
[[/GREPCENT_TABLE]]

29

Table of Contents

Revenue

We generate our revenue from the sale of disposable sensors and reusable transmitters and receivers. We expect that the revenue we generate from the sales of our products will fluctuate from quarter to quarter. We typically experience seasonality, with lower sales in the first quarter of each year compared to the immediately preceding fourth quarter. This seasonal sales pattern relates to U.S. annual insurance deductible resets and unfunded flexible spending accounts.

Cost of sales

Cost of sales includes direct labor and materials costs related to each product sold or produced, including assembly, test labor and scrap, as well as factory overhead supporting our manufacturing operations. Factory overhead includes facilities, material procurement and control, manufacturing engineering, quality assurance, supervision and management. These costs are primarily salary, fringe benefits, share-based compensation, facility expense, supplies and purchased services. All of our manufacturing costs are included in cost of sales. In addition, amortization of certain licensing related intangibles are also included in cost of sales.

Research and development

Our research and development expenses primarily consist of engineering and research expenses related to our sensing technology, clinical trials, regulatory expenses, quality assurance programs, employee compensation, and business process outsourcers.

Selling, general and administrative

Our selling, general and administrative expenses primarily consist of employee compensation for our executive, financial, sales, marketing, information technology and administrative functions. Other significant expenses include commissions, marketing and advertising, IT software license costs, insurance, professional fees for our outside legal counsel and independent auditors, litigation expenses, patent application expenses and consulting expenses.

Other income (expense), net

Other income (expense), net consists primarily of interest and dividend income on our cash, cash equivalents and short-term marketable securities portfolio, foreign currency transaction gains and losses resulting from the effects of foreign currency fluctuations, realized and unrealized gains and losses on marketable and non-marketable equity investments, including changes in fair value, and interest expense related to our senior convertible notes.

30

Table of Contents

Three Months Ended June 30, 2026 Compared to Three Months Ended June 30, 2025

[Excerpt truncated for page length; source filing is linked above.]

## Latest 10-K MD&A (excerpt)

Latest 10-K Item 7 source: https://www.sec.gov/Archives/edgar/data/1093557/000109355726000027/dxcm-20251231.htm
Complete FY 2025 MD&A: /company/DXCM/mda/fy2025/

Extracted structurally from real Item 7 body heading to real Item 7A/8 boundary. Published MD&A gate trimmed front/tail over-capture.
Confidence: high
Filing date: 2026-02-12
Report date: 2025-12-31

ITEM 7 - MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This document, including the following Management’s Discussion and Analysis of Financial Condition and Results of Operations, contains forward-looking statements that are not purely historical regarding Dexcom’s or its management’s intentions, beliefs, expectations and strategies for the future. These forward-looking statements fall within the meaning of the federal securities laws that relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as “may,” “will,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “intend,” “potential” or “continue” or the negative of these terms or other comparable terminology. Forward-looking statements are made as of the date of this report, deal with future events, are subject to various risks and uncertainties, and actual results could differ materially from those anticipated in those forward looking statements. The risks and uncertainties that could cause actual results to differ materially are more fully described under “Risk Factors” in Part I, Item 1A of this Annual Report, elsewhere in this Annual Report, and in our other reports filed with the SEC. We assume no obligation to update any of the forward-looking statements after the date of this report or to conform these forward-looking statements to actual results. You should read the following discussion and analysis together with our consolidated financial statements and related notes in Part II, Item 8 of this Annual Report.

Overview

[[GREPCENT_TABLE]]
[["","Who We Are"],["","We are a medical device company primarily focused on the design, development and commercialization of CGM systems for the management of diabetes and metabolic health by patients, caregivers, and clinicians around the world.We received approval from the FDA and commercialized our first product in 2006. We launched our latest generation systems, the G7 in 2023, and the G7 15 Day in late 2025. In August 2024, we launched Stelo, our biosensor designed for adults with prediabetes and Type 2 diabetes who do not use insulin, as the first over-the-counter glucose biosensor in the U.S. Unless the context requires otherwise, the terms \u201cwe,\u201d \u201cus,\u201d \u201cour,\u201d the \u201ccompany,\u201d or \u201cDexcom\u201d refer to DexCom, Inc. and its subsidiaries."]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["","Global Presence"],["","We have built a direct sales organization in North America and certain international markets to call on health care professionals, such as endocrinologists, physicians and diabetes educators, who can educate and influence patient adoption of continuous glucose monitoring. To complement our direct sales efforts, we have entered into distribution arrangements in North America and several international markets that allow distributors to sell our products."],["","Future Developments"],["","Product Development: We plan to develop future generations of technologies that are focused on improved performance and convenience and that will enable intelligent insulin administration. Over the longer term, we plan to continue to develop and improve networked platforms with open architecture, connectivity and transmitters capable of communicating with other devices. We also intend to expand our efforts to accumulate CGM patient data and metrics and apply predictive modeling and machine learning to generate interactive CGM insights that can inform patient behavior."],["","Partnerships: We continue to support partnerships with insulin pump companies and companies or institutions developing insulin delivery systems, including automated insulin delivery systems. With the introduction of Stelo, we are also pursuing and supporting development partnerships with consumer technology product companies that seek to provide metabolic health insights to their customers."],["","New Opportunities: We are also exploring how to extend our offerings to other opportunities, including for people with pre-diabetes, people who are obese, people who are pregnant, and people in the hospital setting. Eventually, we may apply our technological expertise to products beyond glucose monitoring."]]
[[/GREPCENT_TABLE]]

77

Critical Accounting Estimates

The discussion and analysis of our financial condition and results of operations are based on our consolidated financial statements, which we have prepared in accordance with GAAP. The preparation of these consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements as well as the reported revenue and expenses during the reporting periods. On an ongoing basis, we evaluate our estimates and judgments. We base our estimates on historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

While our significant accounting policies are described in Note 1 “Organization and Significant Accounting Policies” to the consolidated financial statements in Part II, Item 8 of this Annual Report on Form 10-K, we believe that the following accounting estimates are most critical to a full understanding and evaluation of our reported financial results. Members of our senior management have discussed the development and selection of these critical accounting estimates and their disclosure in this Annual Report on Form 10-K with the Audit Committee of our Board of Directors.

Pharmacy Rebates

We estimate pharmacy rebates based on contractual arrangements, estimates of products sold subject to rebate, known events or trends, and channel inventory data. Pharmacy rebates are the most significant component of variable consideration estimates included in the calculation of the transaction price and most at risk for material adjustment because of the time delay between the recording of the pharmacy rebate and its ultimate settlement, an interval that generally ranges from 30 to 90 days, but can last up to one year. Due to this time lag, in any given period, our adjustments to reflect actual amounts can incorporate changes of estimates related to prior periods.

Historically, adjustments to these estimates to reflect actual results or updated expectations, have not been material to our overall business and generally have been less than 1% of revenue. An increase or decrease of 1% in our estimate of products sold subject to rebate during 2025, holding all other assumptions constant, would increase or decrease revenue by approximately $50.1 million.

Inventory Reserves

We assess the value of our inventory on a quarterly basis and write down inventories to the lower of their cost or net realizable value based on quality control data, obsolescence, or excess relative to our forecasted demand. Significant judgment is applied in evaluating quality control testing data, assessing whether non-conforming inventory can be remediated, reworked, or otherwise partially recovered, and in some cases, estimating our forecasted demand.

If actual market conditions are less favorable than our forecasts, or actual demand from our customers is lower than our estimates, we may be required to record additional inventory write-downs. Similarly, if remediation outcomes differ from our assumptions, additional adjustments may be necessary. Conversely, if actual conditions are more favorable than anticipated, inventory previously written down may be sold, resulting in lower cost of sales and higher income from operations than expected in that period. At December 31, 2025, a 1% change in the inventory reserve expense recognized during the year would not have resulted in a material change in inventory and cost of goods sold.

Income Taxes

We estimate our income taxes based on the various jurisdictions where we conduct business. Significant judgment is required in determining our worldwide income tax provision. The calculation of our tax liabilities involves dealing with uncertainties in the application of complex tax laws and regulations and the potential for future adjustment of our uncertain tax positions by the Internal Revenue Service or other taxing jurisdictions. While we believe we have appropriate support for the positions taken on our tax returns, we regularly assess the potential outcomes of examinations by tax authorities in determining the adequacy of our provision for income taxes. We continually assess the likelihood and amount of potential adjustments and adjust the income tax provision, income taxes payable, and deferred taxes in the period in which the facts that give rise to a revision become known.

78

We use the asset and liability approach to recognize deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the carrying amounts and the tax basis of assets and liabilities as described in Note 1 “Organization and Significant Accounting Policies—Income Taxes” to the consolidated financial statements in Part II, Item 8 of this Annual Report. Significant judgment is required to evaluate the need for a valuation allowance against deferred tax assets. 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. We maintain a valuation allowance on our California research and development tax credits, foreign tax credits and certain foreign intangible assets, as it is more likely than not that those deferred tax assets will not be realized.

We recognize and measure benefits for uncertain tax positions using a two-step approach as described in Note 1 “Organization and Significant Accounting Policies—Income Taxes” to the consolidated financial statements in Part II, Item 8 of this Annual Report. Significant judgment is required to evaluate uncertain tax positions and is based upon a number of factors, including changes in facts or circumstances, changes in tax law, correspondence with tax authorities during the course of audits and effective settlement of audit issues. Changes in the recognition or measurement of uncertain tax positions could result in material increases or decreases in our income tax expense in the period in which we make the change, which could have a material impact on our effective tax rate and operating results.

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. Significant judgment is required in the determination of the expected outcome (i.e., whether a potential loss is probable, reasonably possible, or remote), as well as in the determination of whether a potential exposure is reasonably estimable. We evaluate the nature of the claim, the stage of the proceedings, prior case outcomes, and input from legal counsel. We base our judgments on the best information available at the time and regularly reassess as new facts emerge.

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[Excerpt truncated for page length; the complete text is on the linked full-MD&A page.]

Read the full FY 2025 MD&A: /company/DXCM/mda/fy2025/
All MD&A years: /company/DXCM/mda/


## MD&A history

Prior-year 10-K MD&A spans are extracted from SEC filings with the same bounded parser used for the latest filing. Each year's full verbatim text is on its own sub-page.

- [FY 2024 MD&A](/company/DXCM/mda/fy2024/): filed 2025-02-18; accession 0001093557-25-000036 (https://www.sec.gov/Archives/edgar/data/1093557/000109355725000036/dxcm-20241231.htm)
- [FY 2023 MD&A](/company/DXCM/mda/fy2023/): filed 2024-02-08; accession 0001093557-24-000021 (https://www.sec.gov/Archives/edgar/data/1093557/000109355724000021/dxcm-20231231.htm)
- FY 2022: filed 2023-02-09; accession 0001093557-23-000024 (https://www.sec.gov/Archives/edgar/data/1093557/000109355723000024/dxcm-20221231.htm); MD&A text quarantined because Item 7 boundaries were low-confidence; no filing narrative is published for this year.
- FY 2021: filed 2022-02-14; accession 0001093557-22-000014 (https://www.sec.gov/Archives/edgar/data/1093557/000109355722000014/dxcm-20211231.htm); MD&A text quarantined because Item 7 boundaries were low-confidence; no filing narrative is published for this year.




## Macro cross-references

Indicators mapped to this company's SIC classification (industry 3841 Surgical & Medical Instruments & Apparatus) by grepcent's deterministic macro-sector crosswalk. A navigational mapping, not a statistical or causal claim.

- [INDPRO](/indicator/INDPRO/): Industrial Production: Total Index
- [TCU](/indicator/TCU/): Capacity Utilization: Total Index
- [PPIACO](/indicator/PPIACO/): Producer Price Index by Commodity: All Commodities
- [GDPC1](/indicator/GDPC1/): Real Gross Domestic Product
- [DGS10](/indicator/DGS10/): Market Yield on U.S. Treasury Securities at 10-Year Constant Maturity
- [FEDFUNDS](/indicator/FEDFUNDS/): Federal Funds Effective Rate
- [CES0500000003](/indicator/CES0500000003/): Average Hourly Earnings of All Employees, Total Private
- [PAYEMS](/indicator/PAYEMS/): All Employees, Total Nonfarm

Macro-to-micro threads including this sector: [Inflation (CPI / PCE / PPI)](/thread/inflation-cpi-pce-ppi/), [US labor market](/thread/us-labor-market/), [Growth & output](/thread/growth-output/), [Money & trade](/thread/money-trade/), [Government finances](/thread/government-finances/), [Sector employment](/thread/sector-employment/), [Industrial orders & inventories](/thread/industrial-orders/), [Trade & external](/thread/trade-external/).

All macro indicators: /indicators/


## For LLMs & downloads

Markdown twin: /company/DXCM.md · JSON record: /company/DXCM.json · verified financials: /company/DXCM/financials.json / /company/DXCM/financials.csv · machine TOC for the whole site: /llms.txt