DexCom, Inc.
DXCM · Nasdaq
Next quarter
Reports Oct 29, 2026.
Consensus is $0.66 EPS for Sep 2026 across 10 estimates, ranging $0.63 to $0.69.
DXCM Jun 2026
- 14.75%
- +11.95%
- $0.61
- $0.70
- —
- $1.31B
Reported results
- $1.31B
- 63.44%
- $318.30M
- 24.33%
- $249.10M
- $0.64
Highlights
- Revenue: Second-quarter revenue rose 13% year over year to $1.308 billion, up 10% from $1.19 billion in Q1 2026 and 12% organically.
- Earnings beat: Non-GAAP diluted EPS was $0.70 versus consensus of $0.61, a 14.75% surprise; GAAP diluted EPS was $0.64 versus $0.45 a year ago and $0.51 in Q1.
- Margin expansion: GAAP operating income increased 50% year over year to $318.3 million, lifting operating margin to 24.3% from 18.4%; non-GAAP operating margin was 25.1%.
- Geographic growth: U.S. revenue increased 11% to $933.4 million, while international revenue grew 19% to $375.0 million; international growth was 16% organically.
- Gross profit: GAAP gross profit increased 20% to $830.0 million, with gross margin expanding to 63.4% from 59.5% despite $45.6 million of inventory reserve charges.
- Guidance: Dexcom raised the midpoint of 2026 revenue guidance to a $5.18-$5.25 billion range, implying approximately 11%-13% growth, and increased its non-GAAP margin outlooks.
- Product and market expansion: The CONNECT trial showed statistically significant glucose-control improvements for non-insulin-using type 2 diabetes patients, while Dexcom began rolling out a redesigned, AI-enabled Stelo app.
- Capital returns and liquidity: Dexcom repurchased 8.6 million shares for $600.0 million in the first half, held $1.95 billion in cash and marketable securities, and generated $794.8 million of operating cash flow.
Analysis
Dexcom's second quarter was a strong operating print: revenue of $1.308 billion grew 13% year over year and approximately 10% sequentially, while non-GAAP EPS of $0.70 exceeded the $0.61 consensus estimate by 14.75%. GAAP diluted EPS was $0.64, up from $0.45 in Q2 2025 and $0.51 in Q1 2026. Operating income rose 50% year over year to $318.3 million and 25% sequentially from $255.3 million, with margin expanding to 24.3% from 18.4% a year ago and 21.4% in the prior quarter.
The defining feature was operating leverage. Gross margin reached 63.4%, helped by higher volume, G7 15 Day benefits, manufacturing efficiencies and better fixed-cost absorption, although the company recorded $45.6 million of inventory reserves tied largely to the planned G6 manufacturing discontinuation. Growth remained broad, led by international revenue up 19% and continued customer-base expansion, while the CONNECT results and Stelo app relaunch extended the potential market beyond insulin-using diabetes patients. Dexcom also raised its 2026 revenue midpoint and profitability targets, supporting the longer-term outlook presented at Investor Day. Cash generation funded a $600.0 million share repurchase in the first half while leaving substantial liquidity for capacity expansion and strategic opportunities.
Revenue and geographic growth
Revenue growth remained driven by higher disposable-sensor volumes, a larger worldwide customer base and improved revenue per customer from payor mix and utilization. These benefits were partly offset by channel and product mix and rebate eligibility.
- International: Revenue increased 19% year over year to $375.0 million, or 16% organically, outpacing U.S. growth and representing about 29% of total revenue.
- United States: Revenue rose 11% to $933.4 million, including $893.5 million through distributors and $39.9 million through direct channels.
- Channels: Distributor revenue increased 13% to $1.102 billion, while direct revenue rose 15% to $206.0 million.
- Customer base: Management said Dexcom added approximately 600,000 to 700,000 net customers, excluding Stelo customers, during 2025.
Margin expansion
Profitability was the quarter's clearest financial strength. Gross profit grew faster than revenue as volume, G7 15 Day benefits, manufacturing efficiencies and higher production improved fixed-cost absorption. Management said additional quality testing and material validation also contributed to the margin improvement.
- Gross profit: GAAP gross profit rose $141.2 million, or 20%, to $830.0 million; gross margin increased 390 basis points to 63.4%.
- Operating income: GAAP operating income rose $105.7 million, or 50%, to $318.3 million, with operating margin up 590 basis points to 24.3%.
- Non-GAAP profitability: Non-GAAP operating income increased to $328.3 million from $221.8 million, and non-GAAP operating margin reached 25.1% versus 19.2% a year ago.
- Cost headwind: Cost of sales included $45.6 million of inventory reserve charges, compared with $8.8 million in Q2 2025, primarily reflecting G6 discontinuation plans, quality data and forecasted demand.
Earnings and cash generation
Net income benefited from the stronger operating result, though the comparison included a $29.3 million year-over-year deterioration in other income and expense. Lower interest income, foreign-currency losses and equity-investment losses limited the conversion of operating gains into reported earnings.
- Net income: GAAP net income rose 39% year over year to $249.1 million from $179.8 million and increased 25% from $199.5 million in Q1 2026.
- Per share: GAAP diluted EPS was $0.64 versus $0.45 a year ago and $0.51 in Q1; non-GAAP diluted EPS was $0.70 versus $0.48 a year ago.
- Other income: Dexcom recorded $0.8 million of net other expense, compared with $28.5 million of other income a year ago, including a $10.0 million loss from equity investments.
- Operating cash flow: First-half operating cash flow was $794.8 million, up from $486.8 million in the first half of 2025.
Products and longer-term growth
The quarter also advanced Dexcom's effort to broaden CGM beyond its established insulin-using customer base. The CONNECT trial supplied clinical support for non-insulin-using type 2 diabetes adoption, while Stelo's application refresh targets a more consumer-oriented experience.
- CONNECT trial: Dexcom reported clinically meaningful and statistically significant glucose-control improvements for non-insulin-using type 2 diabetes patients using its CGM compared with routine care.
- Stelo: The company initiated the launch of a redesigned app with a more consumer-friendly interface, AI-driven insights and enhanced food-logging capabilities.
- Investor Day: Dexcom presented market opportunities, its innovation strategy and a new long-term financial outlook through 2030.
- Technology investment: Research and development expense increased 3% year over year to $153.0 million, while SG&A rose 9% to $358.7 million, including $12.1 million of additional advertising and marketing spending.
Guidance and capital allocation
Dexcom raised the midpoint of its full-year outlook while directing substantial cash toward repurchases and manufacturing capacity. The balance sheet provides flexibility, although the company expects continued capital spending and has approximately $1.42 billion of open purchase orders, mostly due within one year.
- 2026 revenue: Guidance is now $5.18-$5.25 billion, implying approximately 11%-13% growth.
- 2026 margins: Dexcom expects non-GAAP gross margin of approximately 64%, non-GAAP operating margin of approximately 23.5%-24% and adjusted EBITDA margin of approximately 31.5%-32%.
- Repurchases: Dexcom repurchased 8.6 million shares for $600.0 million in the first half under its new $1.00 billion authorization, leaving $400.0 million available at June 30.
- Liquidity: Cash, cash equivalents and marketable securities totaled $1.95 billion, the revolving credit facility was undrawn, and first-half capital expenditures were $161.3 million.
