252131AM9 Filings — Dexcom, Inc.

252131AM9 Filings — Dexcom, Inc. - FilingSpy

10-Q · Quarter ended Jun 30, 2026 · SEC filing ↗

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Original filing text

Management's Discussion and Analysis

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 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 “we,” “us,” “our,” the “company,” or “Dexcom” refer to DexCom, Inc. and its subsidiaries. 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. 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 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 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 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) — % 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 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 Three Months Ended June 30, 2026 2025 (In millions) United States International Total United States International Total Distributor $ 893.5 $ 208.9 $ 1,102.4 $ 800.0 $ 177.8 $ 977.8 Direct 39.9 166.1 206.0 41.0 138.3 179.3 Total revenue $ 933.4 $ 375.0 $ 1,308.4 $ 841.0 $ 316.1 $ 1,157.1 Three Months Ended June 30, 2026 Compared to Three Months Ended June 30, 2025 Revenue The revenue increase was primarily driven by increased sales volume of our disposable sensors due to the continued growth of our worldwide customer base. We added approximately 600,000 to 700,000 net customers, excluding Stelo customers, to our worldwide customer base in 2025. The increase was also driven by favorable revenue per customer primarily due to payor mix and utilization. These favorable impacts were partially offset by channel and product mix and rebate eligibility. Cost of sales & Gross profit The increase in gross profit and gross profit margin percentage in the second quarter of 2026 compared to the second quarter of 2025 was primarily driven by increased sales volume, G7 15 Day benefits, improved manufacturing efficiencies, higher production volumes, and a more favorable manufacturing mix, which resulted in better absorption of fixed costs. The increase in gross margin was attributable to the implementation of additional quality testing and material validation efforts relative to the prior year. These favorable impacts were offset by higher excess and obsolete inventory charges primarily associated with the planned discontinuation of G6 manufacturing. Cost of sales increased primarily due to higher sales volumes. 31 Table of Contents Three Months Ended June 30, 2026 Compared to Three Months Ended June 30, 2025 Research and development expense Research and development expense was relatively flat due to the timing of project spend. We continue to believe that focused investments in research and development are critical to our future growth and competitive position in the marketplace, and to the development of new and enhanced products and services that are central to our core business strategy. Selling, general and administrative expense Selling, general and administrative expense increased primarily due to $12.1 million in incremental investments in advertising and marketing costs, $6.7 million in higher compensation and related costs, and $6.3 million in higher facilities-related costs. Other income (expense), net Other income (expense), net, decreased primarily due to $11.1 million in lower interest and dividend income, $10.3 million in net foreign currency losses, and $9.6 million in net losses on equity investments. The decrease in interest income was driven by a decrease in the average invested balances and changes in market interest rates. Income tax expense The income tax expense recorded for the three months ended June 30, 2026 and June 30, 2025 was primarily attributable to income tax expense from normal, recurring operations. The decrease in our effective tax rate for the three months ended June 30, 2026 compared to the same period in 2025 is primarily attributable to the commencement of our Malaysia tax holiday and higher pretax income in the current period. 32 Table of Contents Results of Operations Financial Overview Six Months Ended June 30, 2026 Compared to Six Months Ended June 30, 2025 Six Months Ended June 30, 2026 - 2025 (In millions, except per share amounts) 2026 % of Revenue (1) 2025 % of Revenue (1) $ Change % Change Revenue $ 2,500.3 100 % $ 2,193.1 100 % $ 307.2 14 % Cost of sales 920.0 37 % 915.3 42 % 4.7 1 % Gross profit 1,580.3 63.2 % 1,277.8 58.3 % 302.5 24 % Operating expenses: Research and development 298.3 12 % 293.4 13 % 4.9 2 % Selling, general and administrative 708.4 28 % 638.1 29 % 70.3 11 % Total operating expenses 1,006.7 40 % 931.5 42 % 75.2 8 % Operating income 573.6 23 % 346.3 16 % 227.3 66 % Other income, net 13.4 1 % 49.1 2 % (35.7) (73) % Income before income taxes 587.0 23 % 395.4 18 % 191.6 48 % Income tax expense 138.4 6 % 110.2 5 % 28.2 26 % Net income $ 448.6 18 % $ 285.2 13 % $ 163.4 57 % Basic net income per share $ 1.17 ** $ 0.73 ** $ 0.44 60 % Diluted net income per share $ 1.15 ** $ 0.71 ** $ 0.44 62 % (1) The sum of the individual percentages may not equal the total due to rounding. ** Not meaningful 33 Table of Contents Six Months Ended June 30, 2026 Compared to Six Months Ended June 30, 2025 Six Months Ended June 30, 2026 2025 (In millions) United States International Total United States International Total Distributor $ 1,690.4 $ 422.3 $ 2,112.7 $ 1,520.6 $ 337.2 $ 1,857.8 Direct 75.3 312.3 387.6 70.9 264.4 335.3 Total revenue $ 1,765.7 $ 734.6 $ 2,500.3 $ 1,591.5 $ 601.6 $ 2,193.1 Six Months Ended June 30, 2026 Compared to Six Months Ended June 30, 2025 Revenue The revenue increase was primarily driven by increased sales volume of our disposable sensors due to the continued growth of our worldwide customer base. We added approximately 600,000 to 700,000 net customers, excluding Stelo customers, to our worldwide customer base in 2025. The increase was also driven by favorable revenue per customer primarily due to payor mix and utilization. These favorable impacts were partially offset by channel and product mix and rebate eligibility. Cost of sales & Gross profit The increase in gross profit and gross profit margin percentage in 2026 compared to 2025 was primarily driven by increased sales volume, G7 15 Day benefits, improved manufacturing efficiencies, higher production volumes, and a more favorable manufacturing mix, which resulted in better cost absorption of fixed costs. The increase in gross margin was attributable to the implementation of additional quality testing and material valuation efforts relative to the prior year. These favorable impacts were offset by higher excess and obsolete inventory charges primarily associated with the planned discontinuation of G6 manufacturing. Cost of sales increased primarily due to higher sales volumes. 34 Table of Contents Six Months Ended June 30, 2026 Compared to Six Months Ended June 30, 2025 Research and development expense Research and development expense was relatively flat due to the timing of project spend. We continue to believe that focused investments in research and development are critical to our future growth and competitive position in the marketplace, and to the development of new and updated products and services that are central to our core business strategy. Selling, general and administrative expense Selling, general and administrative expense increased primarily due to $27.2 million in incremental investments in advertising and marketing costs, $22.6 million in higher compensation and related costs, and $11.5 million in higher facilities-related costs. Other income, net Other income, net, decreased primarily due to $20.1 million in lower interest and dividend income and $13.6 million in net foreign currency losses. The decrease in interest income was driven by a decrease in the average invested balances and changes in market interest rates. Income tax expense The income tax expense recorded for the six months ended June 30, 2026 was primarily attributable to income tax expense from normal, recurring operations at an estimated annual effective tax rate of 21.8%, which includes the tax benefit related to the commencement of our Malaysia tax holiday, increased by discrete shortfalls recognized for share-based compensation for employees, net of nondeductible executive compensation. The income tax expense recorded for the six months ended June 30, 2025 was primarily attributable to income tax expense from normal, recurring operations at an estimated annual effective tax rate of 24.3%, increased by discrete shortfalls recognized for share-based compensation for employees, net of nondeductible executive compensation. The decrease in our effective tax rate for the six months ended June 30, 2026 compared to the same period in 2025 is primarily attributable to commencement of our Malaysia tax holiday and higher pretax income in the current period. 35 Table of Contents Liquidity and Capital Resources Overview, Capital Resources, and Capital Requirements Our principal sources of liquidity are our existing cash, cash equivalents and marketable securities, cash generated from operations, proceeds from our senior convertible notes issuances, and access to our Credit Facility. Our primary uses of cash have been for research and development programs, selling and marketing activities, capital expenditures, acquisitions of businesses, and debt service costs. We expect that cash provided by our operations may fluctuate in future periods as a result of a number of factors, including fluctuations in our operating results, working capital requirements and capital deployment decisions. We have historically invested our cash primarily in U.S. dollar-denominated, investment grade, highly liquid obligations of U.S. government agencies, commercial paper, corporate debt, and money market funds. Certain of these investments are subject to general credit, liquidity and other market risks. The general condition of the financial markets and the economy may increase those risks and may affect the value and liquidity of investments and restrict our ability to access the capital markets. Our future capital requirements will depend on many factors, including but not limited to: The evolution of the international expansion of our business and the revenue generated by sales of our approved products and any future products; Our ability to efficiently scale our operations to meet demand for our current and any future products; The success of our research and development efforts; The expenses we incur in manufacturing, developing, selling and marketing our products; The costs, timing and risks of delays of additional regulatory approvals; The costs of filing, prosecuting, defending and enforcing any patent claims and other intellectual property rights; The quality levels of our products and services; The emergence of competing or complementary technological developments; The terms and timing of any collaborative, licensing and other arrangements that we may establish; and The third-party reimbursement of our products for our customers; The rate of progress and cost of our clinical trials and other development activities; The acquisition of businesses, products and technologies and our ability to integrate and manage any acquired businesses, products and technologies. We expect that existing cash and short-term investments and cash flows from our future operations will generally be sufficient to fund our ongoing core business. As current borrowing sources become due, we may be required to access the capital markets for additional funding. As we assess inorganic growth strategies, we may need to supplement our internally generated cash flow with outside sources. In the event that we are required to access the debt market, we believe that we will be able to secure reasonable borrowing rates. As part of our liquidity strategy, we will continue to monitor our current level of earnings and cash flow generation as well as our ability to access the market in light of those earning levels. A substantial portion of our operations are located in the United States, and the majority of our sales since inception have been made in U.S. dollars. As we continue to expand internationally, we will be subject to additional foreign exchange currency risk. See “Foreign Currency Exchange Risk” in Part II, Item 7A of our Annual Report on Form 10-K for the fiscal year ended December 31, 2025, for more information. 36 Table of Contents Main Sources of Liquidity Cash, cash equivalents and short-term marketable securities Our cash, cash equivalents and short-term marketable securities totaled $1.95 billion as of June 30, 2026. None of those funds were restricted and $1.56 billion (approximately 80%) of those funds were located in the United States. Cash flows from Operations For the six months ended June 30, 2026, we had positive cash flows of $794.8 million from operating activities. We anticipate that we will continue to generate positive cash flows from operations for the foreseeable future. Senior Convertible Notes We received net proceeds of $1.23 billion in May 2023 from the 2028 Notes offering. We used $289.9 million of the net proceeds from the offering of the 2028 Notes to purchase capped call transactions and repurchase shares of our common stock in May 2023. We intend to use the remainder of the net proceeds for general corporate purposes and capital expenditures, including working capital needs. We may also use the net proceeds to expand our current business through in-licensing or acquisitions of, or investments in, other businesses, products or technologies; however, we do not have any significant commitments with respect to any such acquisitions or investments at this time. In connection with the 2028 Notes offering, we purchased the 2028 Capped Calls. See Note 4 “Debt” to the condensed consolidated financial statements in Part I, Item 1 of this Quarterly Report on Form 10-Q for more information about our senior convertible notes and the 2028 Capped Calls. Amended Credit Agreement As of June 30, 2026, we had no outstanding borrowings, $8.7 million in outstanding letters of credit, and a total available balance of $191.3 million under the Amended Credit Agreement. We monitor counterparty risk associated with the institutional lenders that are providing the Credit Facility. We currently believe that the Credit Facility will be available to us should we choose to borrow under it. Revolving loans will be available for general corporate purposes, including working capital and capital expenditures. The Amended Credit Agreement will mature on October 13, 2026. See Note 4 “Debt” to the condensed consolidated financial statements in Part I, Item 1 of this Quarterly Report on Form 10-Q for more information on the Amended Credit Agreement. Short-term Liquidity Requirements As of June 30, 2026, our short-term liquidity requirements primarily consist of regular operating costs, interest payments related to our 2028 Notes, capital expenditures for the development of our manufacturing facilities and office spaces, and short-term material cash requirements as described below. As of June 30, 2026, we had a working capital ratio of 1.73 and a quick ratio of 1.36, which indicates that our current assets are sufficient to cover our short-term liabilities. We expect to incur significant capital expenditures for the next year as we continue to invest in equipment and our manufacturing facilities. We believe that our cash, cash equivalents, and marketable securities balances, projected cash contributions from our commercial operations, and borrowings under our Credit Facility will be sufficient to meet our anticipated seasonal working capital needs, all capital expenditure requirements, material cash requirements as described herein, and meet other liquidity requirements associated with our operations for at least the next 12 months. We currently intend to continue to use cash to repurchase shares of our common stock, including pursuant to the 2026 Share Repurchase Program, or for other strategic initiatives that strengthen our foundation for long-term growth. Long-term Liquidity Requirements Our long-term liquidity requirements primarily consist of interest and principal payments related to our 2028 Notes, capital expenditures for the development of our manufacturing facilities and office spaces, and long-term material cash requirements as described below. As of June 30, 2026, we had a debt-to-assets ratio of 0.19, which indicates that our total assets are sufficient to cover our debts. As demand grows for our products, we will continue to expand global operations to meet demand through investments in manufacturing and operations. We expect to meet our long-term liquidity requirements from our main sources of liquidity as described above to support our future operations, capital expenditures, acquisitions, and other liquidity requirements associated with our operations beyond the next 12 months. Further, we expect to allocate at least 50% of cash generated from operations, net of planned capital expenditures, to share repurchases over the course of our long-range plan. 37 Table of Contents As of June 30, 2026, we have outstanding senior convertible notes classified as long-term that will mature in May 2028. However, the outstanding principal of our senior convertible notes could be converted into cash and/or shares of our common stock prior to maturity once certain conditions are met. See Note 4 “Debt—Senior Convertible Notes” to the condensed consolidated financial statements in Part I, Item 1 of this Quarterly Report on Form 10-Q for information on conversion rights prior to maturity. Material Cash Requirements From time to time in the ordinary course of business, we enter into a variety of purchase arrangements including but not limited to, purchase arrangements related to capital expenditures, components used in manufacturing, and research and development activities. As of June 30, 2026, we had approximately $1.42 billion of open purchase orders and contractual obligations in the ordinary course of business, the majority of which are due within one year. Our obligations under the 2028 Notes include both principal and interest payments. Prior to the maturity of the 2028 Notes in May 2028, the notes may be converted into cash and/or shares of our common stock if certain conditions are met. Any conversion prior to maturity may result in repayment of the principal amounts due under the 2028 Notes sooner than the scheduled repayment. As market conditions warrant, we may, from time to time, repurchase our outstanding debt securities or shares of our common stock, including pursuant to the 2026 Share Repurchase Program, in the open market, in privately negotiated transactions, by exchange transaction or otherwise. Such repurchases, if any, will depend on prevailing market conditions, our liquidity and other factors and may be commenced or suspended at any time. The amounts involved and total consideration paid may be material. See Note 7 “Stockholders’ Equity—Share Repurchase Program and Treasury Shares” to the condensed consolidated financial statements in Part I, Item 1 of this Quarterly Report on Form 10-Q for more information about our 2026 Share Repurchase Program. See Note 4 “Debt” to the condensed consolidated financial statements in Part I, Item 1 of this Quarterly Report on Form 10-Q for more information about the terms of the Amended Credit Agreement, our senior convertible notes, and the 2028 Capped Calls. We are party to various leasing arrangements, primarily for office, manufacturing and warehouse space that expire at various times through 2040, including any renewal options that we are reasonably certain to exercise. We also have land leases in Penang, Malaysia that expire in 2082 and Athenry, Ireland that expire in 3023 related to our international manufacturing facilities. We anticipate incurring significant expenditures related to the build-out of our manufacturing facilities and investment in equipment. See Note 5 “Leases and Other Commitments—Leases” to the consolidated financial statements in Part II, Item 8 of our Annual Report on Form 10-K for the fiscal year ended December 31, 2025 for more information about our leases. There were no material changes to our lease obligations during the six months ended June 30, 2026. 38 Table of Contents Cash Flows As of June 30, 2026, we had $1.95 billion in cash, cash equivalents and short-term marketable securities, which is a decrease of $51.7 million compared to $2.00 billion as of December 31, 2025. The following table sets forth a summary of our cash flows and the primary changes in cash flows for the periods shown. See the condensed consolidated financial statements in Part I, Item 1 of this Quarterly Report on Form 10-Q for the complete condensed consolidated statements of cash flows for these periods. Six Months Ended June 30, (In millions) 2026 2025 $ Change Net cash provided by operating activities $ 794.8 $ 486.8 $ 308.0 Net cash provided by investing activities 31.3 36.6 (5.3) Net cash provided by (used in) financing activities (632.3) 10.8 (643.1) Effect of exchange rate changes on cash, cash equivalents and restricted cash (7.7) 18.8 (26.5) Increase in cash, cash equivalents and restricted cash $ 186.1 $ 553.0 $ (366.9) Six Months Ended June 30, 2026 Compared to Six Months Ended June 30, 2025 Operating Cash Flows $163.4 million increase in net income $94.0 million increase in net changes in operating assets and liabilities primarily due to the timing of sales and customer collections in accounts receivables Investing Cash Flows $41.2 million increase in cash used for an acquisition in the second quarter of 2026 Financing Cash Flows $603.6 million increase in cash used to repurchase our common stock $37.6 million increase in payments for taxes related to net share settlement of equity awards Recent Accounting Guidance See Note 1 “Organization and Significant Accounting Policies” to the condensed consolidated financial statements in Part I, Item 1 of this Quarterly Report on Form 10-Q for more information regarding recently issued accounting pronouncements and the potential impact on our condensed consolidated financial statements, if any.

Legal Proceedings

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. Securities Class Actions Between August 21 and October 9, 2024, three substantially similar putative class action complaints were filed against us and certain of our executive officers in the United States District Court for the Southern District of California. On December 13, 2024, the court appointed lead plaintiff and consolidated the three actions (now captioned In re Dexcom, Inc. Class Action Securities Litigation, Lead Case No.: 24-cv-1485-RSH-VET). On January 27, 2025, lead plaintiff filed a consolidated complaint. The consolidated complaint alleges violations of the Exchange Act against us and certain of our current and former executive officers for allegedly making false and misleading statements between April 28, 2023 and July 25, 2024, with respect to our expected revenue for fiscal 2024 and ability to capitalize on our growth potential. On March 13, 2025, we filed a motion to dismiss the consolidated complaint. On May 14, 2025, the court granted the motion to dismiss with leave to amend. On May 28, 2025, lead plaintiff filed an amended consolidated complaint. On June 11, 2025, we filed a motion to dismiss the amended consolidated complaint. On September 9, 2025, the court granted in part and denied in part the motion to dismiss. On October 7, 2025, defendants answered the amended consolidated complaint. On October 10, 2025, defendants filed a motion for judgment on the pleadings as to the two surviving challenged statements. On January 7, 2026, the court granted defendants’ motion for judgment on the pleadings with leave to amend. On February 6, 2026, lead plaintiff filed a second amended consolidated complaint. On February 20, 2026, we filed a motion to dismiss the second amended complaint. On March 20, 2026, we filed a reply in support of the motion. The court has not scheduled any oral argument on the motion. On October 27, 2025, a putative class action complaint was filed against us and certain of our executive officers in the United States District Court for the Southern District of New York (captioned Prime v. Dexcom, Inc., et al, Case No.: 1:25-cv-08912). The complaint alleges violations of the Exchange Act against us and certain of our executive officers for allegedly making false and misleading statements between July 26, 2024 and September 17, 2025, with respect to the accuracy, reliability, and functionality of our G7 device, as well as our enhancements to and manufacturing of the device. A lead plaintiff has been appointed and filed an amended complaint on April 10, 2026. On June 9, 2026, we filed a motion to dismiss the amended complaint. Lead plaintiff’s deadline to oppose our motion to dismiss is July 31, 2026. Derivative Actions Between September 13 and April 14, 2025, three putative stockholders filed derivative lawsuits against us and certain of our current and former executive officers and directors in the United States District Court for the Southern District of California. The derivative complaints allege factual allegations largely tracking allegations made in the In re Dexcom, Inc. Securities Class Action Litigation and seek, among other things, damages and restitution to be paid to the Company by the individual defendants, punitive damages, and attorney’s fees and costs. These actions have been consolidated (captioned In Re: Dexcom, Inc. Stockholder Derivative Litigation, Lead Case No.: 24-cv-1645-RSH-VET), and are currently stayed pending a resolution of the motion to dismiss in the In re Dexcom, Inc. Securities Class Action Litigation. On September 25, 2025, an additional derivative lawsuit was filed against us and certain of our current and former executive officers and directors in the Court of Chancery of the State of Delaware. The allegations largely track those made in the In re Dexcom, Inc. Securities Class Action Litigation and seek, among other things, damages and restitution to be paid to the Company by the individual defendants, punitive damages, and attorney’s fees and costs. This action is currently stayed pending a resolution of the motion to dismiss in the In re Dexcom, Inc. Securities Class Action Litigation. 41 Table of Contents On March 24, 2026, Dexcom’s board members and certain of its current and former executives were named as defendants in a complaint filed as a stockholder derivative action in the Southern District of California (captioned Bud & Sue Frashier Family Trust U/A Dated 5/5/98 v. Jacob S. Leach, et al., Case No. 3:26-cv-01852-AGS-SBC. The Company is named as a nominal defendant. The case makes similar allegations to those in the securities class action complaint filed in the Southern District of New York. On May 11, 2026, the parties filed a joint motion and stipulation to stay the action pending the resolution of the securities class action, which the court granted on May 12, 2026. On April 28, 2026, certain current and former members of Dexcom’s board of directors and executives were named as defendants in a complaint filed as a stockholder derivative action in the Southern District of New York (captioned Jerome Malone v. Kevin R. Sayer et al., Case No. 1:26-cv-03527). The Company is named as a nominal defendant. As with the stockholder derivative action filed in the Southern District of California, the case makes similar allegations to those in the securities class action complaint filed in the Southern District of New York. On May 21, 2026, the parties filed a joint motion and stipulation to stay the action pending the resolution of the securities class action, which the court granted on May 26, 2026. G6 and G7 Class Action Litigation Between September 29, 2025, and January 8, 2026, various plaintiffs, purported users of G6 or G7 devices, filed six overlapping putative class action complaints against us. Five of the complaints, which originally were filed as individual actions in federal court (Levens, et al. v. Dexcom, Inc., No. 3:25-cv-02565-BJC-JAC; Estravit v. Dexcom, Inc., No. 3:25-cv-02845-BJC-JAC; Dalora v. Dexcom, Inc., No. 3:25-cv-03210-BJC-JAC; Grisoli, et al. v. Dexcom, Inc., No. 3:25-cv-03488-BJC-JAC; and Dickinson, et al. v. Dexcom, Inc., No. 3:26-cv-00102-BJC-JAC), were consolidated by the Court on May 15, 2026 (and the consolidated litigation is now captioned In re: Dexcom CGM Litigation, No. 3:25-cv-02565-BJC-JAC). The sixth putative class action complaint was filed and remains pending in the Superior Court of Los Angeles County, California (Chatelain v. Dexcom, Inc., No. 25STCV30722). Plaintiffs in all six actions allege they overpaid for G6 and/or G7 devices or components that were worth less than the purchase price because, among other reasons, G6 and/or G7 devices or components they purchased allegedly were adulterated or misbranded under federal law; G6 and/or G7 devices or components they purchased allegedly failed to perform as advertised; and because we allegedly misled patients and providers about the safety, accuracy, efficacy, and reliability of G6 and/or G7 devices or components. Plaintiffs in each action assert various state law consumer protection, express and implied warranty, common law, and Magnuson-Moss Warranty Act claims, and seek, among other things, damages for economic losses, restitution, disgorgement, injunctive relief, and attorneys’ fees and costs. Plaintiffs seek to represent nationwide classes and state-specific subclasses of individuals. Federal Court Consolidated Class Action On May 15, 2026, the Court consolidated the five cases in the United States District Court for the Southern District of California. On May 29, 2026, various groups of plaintiffs’ counsel filed competing motions to appoint interim class counsel. The motions are fully briefed and remain pending. It is anticipated that plaintiffs will file an amended consolidated complaint to which we will file a response after the Court resolves the motions to appoint interim class counsel. There currently is not a date-certain deadline for the filing of an anticipated amended consolidated complaint or Dexcom’s response to the same. State Court Class Action The putative class action pending in Los Angeles County Superior Court remains stayed in favor of the federal class actions. The parties must submit a joint status report on the status of the consolidated federal litigation no later than August 19, 2026. We intend to vigorously defend against such claims; however, we cannot be certain of the outcome of our ongoing proceedings and, if determined adversely to us, our business and financial condition may be adversely affected. 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. 42 Table of Contents

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Risk Factors

The following risk factor supplements and, to the extent inconsistent, supersedes, the risk factors disclosed in Part I, Item 1A, “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. Our short and long-term success is subject to numerous risks and uncertainties, many of which involve factors that are difficult to predict or beyond our control. Before making a decision to invest in, hold or sell our common stock, in addition to the information and risk factors set forth in this Quarterly Report on Form 10-Q, stockholders and potential stockholders should carefully consider the risks and uncertainties described in Part I, Item 1A, “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025, which could materially and adversely affect our business, financial condition, results of operations and prospects. In that case, the value of our common stock could decline and stockholders may lose all or part of their investment. Furthermore, additional risks and uncertainties of which we are currently unaware, or which we currently consider to be immaterial, could have a material adverse effect on our business, financial condition, results of operations or prospects. Refer to our disclaimer regarding forward-looking statements at the beginning of Part I, Item 1 of this Quarterly Report on Form 10-Q. We cannot guarantee that the 2026 Share Repurchase Program will be fully consummated or that such program will enhance the long-term value of our share price. In May 2026, our Board of Directors authorized and approved the 2026 Share Repurchase Program, which provides for the repurchase of up to $1.00 billion of our outstanding common stock, with a repurchase period ending no later than June 30, 2027. In connection with the approval of the Share Repurchase Program, our Board of Directors terminated its existing share repurchase program, of which $250.0 million remained available to be repurchased under the program. Repurchases of our common stock under the 2026 Share Repurchase Program may be made from time to time in the open market, in privately negotiated transactions or by other methods, including through the use of trading plans intended to qualify under Rule 10b5-1 under the Exchange Act, at our discretion, and in accordance with the limitations set forth in Rule 10b-18 promulgated under the Exchange Act and other applicable federal and state laws and regulations. The timing of any repurchases will depend on market conditions and will be made at our discretion. The 2026 Share Repurchase Program does not obligate us to repurchase any dollar amount or number of shares of our common stock, and the program may be extended, modified, suspended, or discontinued at any time. The 2026 Share Repurchase Program could affect the price of our common stock and increase the volatility thereof. Price volatility may cause the average price at which we repurchase our common stock in a given period to exceed the stock’s price at a given point in time. There can be no assurance that the timeframe for repurchases under our 2026 Share Repurchase Program or that any repurchases conducted thereunder will have a positive impact on our stock price or earnings per share. Important factors that could cause us to discontinue or decrease share repurchases under the 2026 Share Repurchase Program include, among others, unfavorable market conditions; the market price of our common stock; the nature of other investment or strategic opportunities presented to us from time to time; our ability to make appropriate, timely, and beneficial decisions as to when, how, and whether to repurchase shares under the 2026 Share Repurchase Program; and the availability of funds necessary to fulfill such repurchases. During the three and six months ended June 30, 2026, 8.6 million shares of our common stock were repurchased under the 2026 Share Repurchase Program and no shares were repurchased under the 2025 Share Repurchase Program. 43 Table of Contents