DexCom, Inc.
DXCM · Nasdaq
Next quarter
Expected to report Feb 11, 2027 — estimated from last year’s reporting date.
Consensus is $0.71 EPS for Dec 2026 across 10 estimates, ranging $0.67 to $0.76.
DXCM Sep 2026
- 10.61%
- +2.95%
- $0.66
- $0.73
- —
- $1.34B
Reported results
- $1.34B
- 64.29%
- $327.20M
- 24.34%
- $275.10M
- $0.72
Highlights
- Revenue growth: Q3 revenue rose 11% year over year to $1.3445 billion, also up about 2.6% from $1.31 billion in Q2; organic growth was 11%.
- EPS beat: Non-GAAP diluted EPS of $0.73 exceeded the $0.66 consensus by 10.6%; GAAP diluted EPS was $0.72, versus $0.70 a year ago and $0.64 in Q2.
- U.S. momentum: U.S. revenue grew 14% to $969.8 million, while international revenue increased 5% to $374.7 million; management cited share gains and near-record global new patient starts.
- Margin expansion: GAAP operating margin increased to 24.3% from 20.1% a year ago; non-GAAP operating margin rose to 25.3% from 22.6%.
- Higher outlook: Dexcom raised FY2026 revenue guidance to $5.20–$5.25 billion, or approximately 12–13% growth, and lifted non-GAAP operating margin guidance to about 24% and adjusted EBITDA margin to about 32%.
- Coverage catalyst: The CONNECT type 2, non-insulin trial showed a 1.6-point A1c improvement in the CGM arm and a 0.9-point difference versus control; management still expects a Medicare coverage decision this year, with coverage effective around mid-2027.
- G7 15 Day transition: Dexcom is on track to convert nearly 50% of its U.S. customer base by year-end; the updated adhesive has improved 15-day survivability by 4–5 points.
- Capital returns: After completing $1.0 billion of 2026 repurchases, Dexcom authorized another $1.0 billion program for 2027; it ended Q3 with $1.82 billion in cash and marketable securities.
Analysis
Dexcom delivered a stronger operating quarter, with revenue of $1.3445 billion up 11% year over year and about 2.6% sequentially. Non-GAAP diluted EPS of $0.73 beat the $0.66 consensus by 10.6%; GAAP diluted EPS was $0.72. Revenue growth accelerated in the U.S. to 14%, while international growth was 5%, partly reflecting the comparison with reimbursement wins in the second half of 2025. Management said active-base growth was in the upper teens, global new patient starts were near record levels, and the company gained share.
The other defining feature was operating leverage: GAAP operating income grew 35% to $327.2 million, lifting margin to 24.3% from 20.1% a year ago; non-GAAP margin expanded to 25.3%. GAAP net income, however, fell 3% to $275.1 million, as prior-year results included a substantial equity-investment gain in other income. Dexcom raised its full-year revenue range to $5.20–$5.25 billion and increased operating-margin and adjusted EBITDA-margin guidance. The quarter also advanced two longer-term growth levers: evidence and potential coverage expansion for type 2 patients not using insulin, and adoption of the longer-wear G7 15 Day system. Both could support demand, while the Ireland facility ramp is expected to weigh on margins in the near term.
Revenue and patient growth
Dexcom’s Q3 growth was led by the U.S., where revenue reached $969.8 million, up 14% year over year. International revenue was $374.7 million, up 5%; management attributed some of the slower pace to lapping reimbursement wins from the prior-year second half and expects international growth to normalize higher next year. Management said new patient starts were near record levels, with the company tracking toward a record year despite no assumed coverage expansion in its original plan.
- Share and retention: Management reported further U.S. share gains, including among type 2 patients, and said active-base growth was in the upper teens. Retention and utilization were described as stable as the customer mix broadens.
- Pricing and access: Management said it had not seen significant deterioration in pricing in its markets. A pharmacy benefit contract change discussed on the call represents less than 4% of U.S. revenue, and management expects limited financial impact next year, while preparing Dexcom Direct to help patients navigate coverage options.
Operating leverage
Gross profit increased to $864.4 million from $731.4 million, with GAAP gross margin rising to 64.3% from 60.5%. On a non-GAAP basis, gross margin was 65.1%, up from 61.3%, reflecting manufacturing efficiencies, improved freight and quality management, higher production volumes, and G7 15 Day mix. These gains came despite higher inventory reserves, primarily associated with the planned G6 manufacturing discontinuation; Q3 reserves were $33.0 million versus $16.0 million a year earlier.
- Operating income: GAAP operating income rose 35% to $327.2 million, with margin up 420 basis points to 24.3%. Non-GAAP operating income increased to $339.5 million, and margin expanded 270 basis points to 25.3%.
- Investment and earnings mix: GAAP operating expenses increased 10% to $537.2 million, including higher SG&A spending. GAAP net income declined 3% to $275.1 million as other income fell to $7.5 million from $109.8 million, which included an $82.5 million equity-investment gain in Q3 2025.
Coverage and clinical evidence
Dexcom is positioning CONNECT as evidence for broader CGM access among people with type 2 diabetes who do not use insulin. The six-month randomized trial showed a 1.6-point A1c improvement in the Dexcom CGM group and a 0.9-point difference between that group and control. The study was published in The New England Journal of Medicine after the quarter, and Dexcom said it shared the publication with Medicare medical directors evaluating coverage expansion.
- Medicare timing: Management maintained its expectation of a coverage decision this year and said its current plan assumes coverage takes effect around the middle of 2027. It also expects the CONNECT evidence to inform clinical standards.
- Commercial opportunity: Management said non-insulin users are already a meaningful portion of new patient starts, though insulin users remain the largest group. It views current commercial access and clinical awareness as preparation for a broader reimbursement environment.
G7 15 Day and capacity
The G7 15 Day transition is progressing, with Dexcom on track for nearly 50% of its U.S. customer base to move to the system by year-end. Management cited favorable customer and physician feedback on wear time, performance, and the updated patch. It also began commercial production at its Ireland facility, adding capacity and geographic resilience as the company prepares for growth.
- Product rollout: The updated adhesive has improved 15-day survivability by 4–5 points. Dexcom plans a Canadian launch beginning in November and, following Japanese clearance in Q3, a Japan launch in early 2027.
- Near-term margin effect: Ireland’s production start is expected to create a temporary margin headwind in Q4 and into early 2027 while the facility ramps. Management expects the impact to diminish as volumes rise, alongside further benefit from wider G7 15 Day adoption.
Guidance and capital
Dexcom raised the midpoint of its full-year revenue outlook, citing Q3 outperformance partly offset by about $5 million of additional foreign-exchange headwinds since the previous update. The new range implies approximately 10% revenue growth in Q4. Gross-margin guidance was maintained, while operating and adjusted EBITDA margin targets increased.
- FY2026 outlook: Revenue of $5.20–$5.25 billion, approximately 12–13% growth; non-GAAP gross margin of about 64%; non-GAAP operating margin of about 24%; and adjusted EBITDA margin of about 32%.
- Cash and repurchases: The company generated more than $900 million of free cash flow through the first three quarters, according to management, completed its $1.0 billion 2026 buyback, and authorized up to another $1.0 billion of repurchases for 2027. Cash, cash equivalents, and marketable securities totaled $1.82 billion at quarter-end.
- International distribution: Dexcom signed a deal to acquire a partner’s distribution business in its largest remaining distributor market in Europe. The deal has not closed and is expected to close next year, so it had no Q3 or Q4 impact.
