Financial Trends -- 7/10
Revenue re-accelerated to +15.6% at $4.66B after bottoming at +2% in Q3 2024 (the post-guide-down
nadir). Non-GAAP gross margin recovered from 57.5% in Q1 2025 to 63.5% in Q4 2025, back to late-2023
levels. Non-GAAP operating margin hit a record 26.3% in Q4 2025. FCF surged +71% to $1.08B, crossing
$1B for the first time. The Q2 2024 guide-down remains a credibility penalty, but the recovery arc
across revenue, margins, and cash flow is convincing.
Weight: 25%
FY25 Revenue
$4.66B
+15.6% YoY | Bottomed +2% Q3 24
FY25 Non-GAAP EPS
$2.09
+27.4% YoY | Record Q4 at $0.68
Q4 25 Non-GAAP Op Margin
26.3%
Record quarter | +750 bps YoY
FY25 Free Cash Flow
$1,077M
+71% YoY | 23.1% FCF margin
Annual Financial Summary ($M, FY ends December)
| Metric | FY2020 | FY2021 | FY2022 | FY2023 | FY2024 | FY2025 |
|---|---|---|---|---|---|---|
| Total Revenue | $1,926.7M | $2,448.5M | $2,909.8M | $3,622.3M | $4,033.0M | $4,662.0M |
| Rev YoY | — | +27.1% | +18.8% | +24.5% | +11.3% | +15.6% |
| US Revenue | $1,509.5M | $1,849.4M | $2,142.0M | $2,625.3M | $2,889.8M | $3,334.9M |
| US Rev YoY | — | +22.5% | +15.8% | +22.6% | +10.1% | +15.4% |
| Intl Revenue | $417.2M | $599.1M | $767.8M | $997.0M | $1,143.2M | $1,327.1M |
| Intl Rev YoY | — | +43.6% | +28.2% | +29.8% | +14.7% | +16.1% |
| GAAP Gross Profit | $1,280.1M | $1,680.5M | $1,883.1M | $2,288.9M | $2,438.2M | $2,801.9M |
| GAAP Gross Margin | 66.4% | 68.6% | 64.7% | 63.2% | 60.5% | 60.1% |
| Non-GAAP Gross Profit | $1,288.2M | $1,680.5M | $1,885.5M | $2,317.5M | $2,494.3M | $2,833.2M |
| Non-GAAP Gross Margin | 66.8% | 68.6% | 64.8% | 64.0% | 61.9% | 60.8% |
| GAAP Op Income | $299.5M | $265.8M | $391.2M | $597.7M | $600.0M | $911.8M |
| GAAP Op Margin | 15.5% | 10.9% | 13.4% | 16.5% | 14.9% | 19.6% |
| Non-GAAP Op Income | $319.4M | $370.7M | $485.1M | $718.6M | $757.1M | $969.3M |
| Non-GAAP Op Margin | 16.6% | 15.1% | 16.7% | 19.8% | 18.8% | 20.8% |
| Adj EBITDA | $506.5M | $578.9M | $751.6M | $1,014.5M | $1,105.0M | $1,348.6M |
| Adj EBITDA Margin | 26.3% | 23.6% | 25.8% | 28.0% | 27.4% | 28.9% |
| Non-GAAP EPS | $3.10 | $2.66 | $0.87 | $1.52 | $1.64 | $2.09 |
| Non-GAAP EPS YoY | — | -14.2% | -67.3% | +74.7% | +7.9% | +27.4% |
| GAAP Diluted EPS | $5.06 | $1.55 | $0.82 | $1.30 | $1.42 | $2.09 |
| Cash From Ops | $475.6M | $442.5M | $669.5M | $748.5M | $989.5M | $1,440.7M |
| CapEx | $-199.0M | $-389.2M | $-364.8M | $-236.6M | $-358.8M | $-363.5M |
| Free Cash Flow | $276.6M | $53.3M | $304.7M | $511.9M | $630.7M | $1,077.2M |
| FCF YoY | — | -80.7% | +471.9% | +68.0% | +23.2% | +70.8% |
| FCF Margin | 14.4% | 2.2% | 10.5% | 14.1% | 15.6% | 23.1% |
| Buybacks | — | — | $-557.7M | $-688.7M | $-750.0M | $-500.0M |
| Non-GAAP Shares (M) | — | 400.4M | 408.6M | 407.3M | 405.0M | 397.8M |
Note: Share count jumped in FY2022 due to 4:1 stock split (June 2022); pre-split EPS is not
directly comparable. FY2020 non-GAAP shares not available in Daloopa. FCF = CFO + CapEx
(simple definition). No buybacks prior to FY2022.
Revenue re-accelerated from +11.3% in FY2024 to +15.6% in
FY2025, reaching
$4,662M. The recovery from
the Q2 2024 guide-down is clear: total growth bottomed at +2% in Q3 2024 and has steadily
re-accelerated through 2025. International revenue grew +16.1% to
$1,327M, with management viewing the
international opportunity as potentially larger than the US over time.
Margin Trajectory
| Metric | FY2021 (Peak) | FY2024 | FY2025 | Q4 25 (Record) | Peak-to-FY25 |
|---|---|---|---|---|---|
| Non-GAAP Gross Margin | 68.6% | 61.9% | 60.8% | 63.5% | -780 bps |
| Non-GAAP Op Margin | 15.1% | 18.8% | 20.8% | 26.3% | +570 bps |
| Adj EBITDA Margin | 23.6% | 27.4% | 28.9% | 33.5% | +530 bps |
Non-GAAP gross margin recovered sharply from 57.5% (Q1 25)
to 63.5% (Q4 25) -- back to Q2 2023 levels. Q4 2025 was the first YoY improvement
in the cycle (+410 bps YoY). Non-GAAP operating margin of 26.3% in Q4 2025 was the best in
company history, up 750 bps YoY, driven by revenue scale and operating leverage. 2026 guidance
of 63-64% non-GAAP GM reflects continued benefit from G7 15-day sensor economics.
Full-year non-GAAP gross margin of 60.8% remains well below
the FY2021 peak of 68.6%. The structural shift toward lower-priced channels (Stelo,
DME) and products has compressed the margin profile vs. pre-2024 levels. The GAAP GM of 60.1%
in FY2025 is the lowest since pre-2020. Ireland facility ramp will add OpEx pressure through
2026 before moving to COGS in 2027.
Quarterly Revenue Trends (Q1 2023 through Q4 2025)
| Metric | Q1 23 | Q2 23 | Q3 23 | Q4 23 | Q1 24 | Q2 24 | Q3 24 | Q4 24 | Q1 25 | Q2 25 | Q3 25 | Q4 25 |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Total Revenue | $741.5M | $871.3M | $975.0M | $1,034.5M | $921.0M | $1,004.3M | $994.2M | $1,113.5M | $1,036.0M | $1,157.1M | $1,209.3M | $1,259.6M |
| Total Rev YoY | — | — | — | — | +24.2% | +15.3% | +2.0% | +7.6% | +12.5% | +15.2% | +21.6% | +13.1% |
| US Revenue | $526.0M | $616.6M | $713.6M | $769.1M | $653.2M | $731.9M | $701.9M | $802.8M | $750.5M | $841.0M | $851.9M | $891.5M |
| US Rev YoY | — | — | — | — | +24.2% | +18.7% | -1.6% | +4.4% | +14.9% | +14.9% | +21.4% | +11.0% |
| Intl Revenue | $215.5M | $254.7M | $261.4M | $265.4M | $267.8M | $272.4M | $292.3M | $310.7M | $285.5M | $316.1M | $357.4M | $368.1M |
| Intl Rev YoY | — | — | — | — | +24.3% | +7.0% | +11.8% | +17.1% | +6.6% | +16.0% | +22.3% | +18.5% |
Revenue growth bottomed at +2.0% in Q3 2024 and re-accelerated
to +21.6% in Q3 2025 before normalizing to +13.1% in Q4 2025. US revenue hit a
nadir of -1.6% in Q3 2024 (the guide-down quarter) but recovered to double-digit growth
by Q1 2025. International grew 22.3% in Q3 2025, the fastest quarterly rate in the trailing
12 quarters, with France, Germany, and the UK as standout markets.
Quarterly Margin and Profitability Trends
| Metric | Q1 23 | Q2 23 | Q3 23 | Q4 23 | Q1 24 | Q2 24 | Q3 24 | Q4 24 | Q1 25 | Q2 25 | Q3 25 | Q4 25 |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Non-GAAP Gross Profit | $469.8M | $553.5M | $630.4M | $663.8M | $569.1M | $638.1M | $625.9M | $661.2M | $596.2M | $695.9M | $741.3M | $799.8M |
| Non-GAAP GM % | 63.4% | 63.5% | 64.7% | 64.2% | 61.8% | 63.5% | 63.0% | 59.4% | 57.5% | 60.1% | 61.3% | 63.5% |
| Non-GAAP Op Income | $78.6M | $158.4M | $238.9M | $242.7M | $140.2M | $195.4M | $212.0M | $209.5M | $143.1M | $221.8M | $272.9M | $331.5M |
| Non-GAAP Op Margin % | 10.6% | 18.2% | 24.5% | 23.5% | 15.2% | 19.5% | 21.3% | 18.8% | 13.8% | 19.2% | 22.6% | 26.3% |
| Adj EBITDA | $145.9M | $232.6M | $314.5M | $321.5M | $220.9M | $283.9M | $300.1M | $300.1M | $230.4M | $327.6M | $368.4M | $422.2M |
| Adj EBITDA Margin % | 19.7% | 26.7% | 32.3% | 31.1% | 24.0% | 28.3% | 30.2% | 27.0% | 22.2% | 28.3% | 30.5% | 33.5% |
| Non-GAAP EPS | $0.17 | $0.34 | $0.50 | $0.49 | $0.32 | $0.43 | $0.45 | $0.45 | $0.32 | $0.48 | $0.61 | $0.68 |
Non-GAAP gross margin inflected YoY in Q4 2025 for the first
time in the cycle: 63.5% vs 59.4% a year ago (+410 bps). Q1-Q4 2025 showed a clear
sequential recovery pattern: 57.5% to 60.1% to 61.3% to 63.5%. Non-GAAP EPS rose from $0.32
in Q1 2025 to a record
$0.68 in Q4 2025, driven by both
margin expansion and revenue growth.
Free Cash Flow ($M)
Free Cash Flow ($M, Annual)
| Metric | FY2020 | FY2021 | FY2022 | FY2023 | FY2024 | FY2025 |
|---|---|---|---|---|---|---|
| Cash From Operations | $475.6M | $442.5M | $669.5M | $748.5M | $989.5M | $1,440.7M |
| Capital Expenditures | $-199.0M | $-389.2M | $-364.8M | $-236.6M | $-358.8M | $-363.5M |
| Free Cash Flow | $276.6M | $53.3M | $304.7M | $511.9M | $630.7M | $1,077.2M |
| FCF YoY | — | -80.7% | +471.9% | +68.0% | +23.2% | +70.8% |
| FCF Margin | 14.4% | 2.2% | 10.5% | 14.1% | 15.6% | 23.1% |
FY2025 FCF of $1,077M surpassed $1B for the first time, up
+71% YoY. FCF margin expanded from 15.6% to 23.1%. CFO of
$1,441M was up 46% YoY. CapEx
remained roughly flat at
$364M. Q3 2025 saw an outsized $579M
quarterly FCF (47.9% margin), likely reflecting working capital timing that reversed in Q4.
Buybacks of $500M in FY2025 reduced non-GAAP diluted shares to
397.8M (-1.8% YoY).
Acceleration / Deceleration Analysis
Revenue Growth Acceleration (YoY change in growth rate, quarterly):
- Q2 24 vs Q1 24: -890 bps (massive deceleration, the guide-down quarter)
- Q3 24 vs Q2 24: -1,330 bps (nadir -- US went negative YoY)
- Q4 24 vs Q3 24: +560 bps (beginning of recovery)
- Q1 25 vs Q4 24: +490 bps (re-acceleration continues)
- Q2 25 vs Q1 25: +270 bps (continued improvement)
- Q3 25 vs Q2 25: +640 bps (strong comp-aided bounce)
- Q4 25 vs Q3 25: -850 bps (normalization off easy comps)
Annual Revenue Growth Trajectory:
- FY2023: +24.5% -> FY2024: +11.3% -> FY2025: +15.6%
- FY2025 re-acceleration of +430 bps after -1,320 bps deceleration in FY2024
Non-GAAP EPS Growth Acceleration:
- FY2022: -67.3% -> FY2023: +74.7% -> FY2024: +7.9% -> FY2025: +27.4%
- Strong re-acceleration in FY2025 driven by margin recovery and revenue growth
Share Count: Declining ~1.8% annually via buybacks (405.0M to 397.8M FY24 to FY25). $750M new buyback program announced Q1 2025.
2026 Guidance
| Metric | FY2025 Actual | FY2026 Guide (Low) | FY2026 Guide (High) | Implied YoY |
|---|---|---|---|---|
| Revenue | $4,662M | $5,160M | $5,250M | +11% to +13% |
| Non-GAAP Gross Margin | 60.8% | 63% | 64% | +200 to +300 bps |
| Non-GAAP Op Margin | 20.8% | 22% | 23% | +120 to +220 bps |
| Adj EBITDA Margin | 28.9% | 30% | 31% | +110 to +210 bps |
Key 2026 drivers: G7 15-day sensor broadly available across all US channels
as of Jan 2026 (margin accretive -- fewer sensors per patient-year, lower COGS/patient).
Lower freight costs and favorable product mix. Ireland facility investment in OpEx through 2026
before moving to COGS in 2027. Coverage assumption predominantly unchanged -- Medicare T2
non-insulin coverage not included in guidance. Investor day planned for May 2026.
Penalty / Modifier Assessment
| Factor | Impact | Detail |
|---|---|---|
| Q2 2024 guide-down credibility | -0.50 | ~40% stock decline; management credibility still rebuilding |
| Gross margin structural compression | -0.25 | GAAP GM 60.1% in FY25 vs 64.7% in FY22; channel/product mix shift permanent |
| 2026 growth deceleration guidance | -0.25 | 11-13% guided vs 15.6% in FY25; normalizing well below 20%+ pre-shock |
| Competitive threat from Abbott Libre 3 | -0.25 | Intensifying US competitive pressure from Abbott in CGM market |
| Revenue re-acceleration from trough | +0.50 | +2% Q3 24 to +21.6% Q3 25; FY25 +15.6% organic growth |
| Margin recovery and record Q4 | +0.50 | Non-GAAP GM 57.5% to 63.5% Q1-Q4 25; Op margin record 26.3% Q4 |
| FCF inflection above $1B | +0.25 | $1,077M FCF (+71% YoY), 23.1% FCF margin -- first year above $1B |
| Uncaptured growth catalysts | +0.25 | Medicare T2NI pending (not in guide); G7 15-day intl rollout; Stelo scaling |
| Installed base growing ~20% | +0.25 | Volume mid-to-upper teens even after price/mix headwinds; 6M T2NI lives covered |
Net modifier impact: +0.25 pts (-1.25 penalties offset by
+1.75 positives). Base score of 7.5 adjusted to 7.0 after the -0.5 credibility penalty.
The recovery arc is convincing -- revenue re-accelerating, margins inflecting, FCF surging --
but the Q2 2024 guide-down remains a material credibility event and revenue growth is rebasing
to a lower structural level (11-13% in 2026 vs 20%+ pre-shock). The pipeline of uncaptured
catalysts (Medicare T2NI, G7 15-day international, Stelo) provides upside optionality.
Transcript Context
The Q2 2024 Guide-Down and Recovery: After delivering +24% organic growth in
Q1 2024, DXCM slashed full-year revenue guidance in Q2 2024, triggering a ~40% stock decline.
US revenue decelerated from +24% to -1.6% in Q3 2024 due to: (1) rebate eligibility shifts
compressing unit-to-revenue growth, (2) mid-year sales force restructuring, and (3) higher mix
of lower-priced channels. The recovery has been gradual but convincing -- total growth bottomed
at +2% and recovered to 13-22% through 2025.
Growth Catalysts: G7 15-day broadly available across all US channels (Jan 2026).
8.0% MARD -- best accuracy in industry. Extends wear time (margin accretive). Stelo OTC
contributing incrementally; 3 largest PBMs now covering DXCM for all diabetes types. International
opportunity with Q3 2025 intl growth hitting 22% (France, Germany, UK standouts). Type 2
non-insulin: ~6M lives covered by end of 2025 via commercial PBMs; Medicare NCD for T2NI pending
(RCT readout mid-2026).
Risks: Competitive threat from Abbott Libre 3 intensifying in the US. GAAP
gross margin still below pre-2023 levels despite Non-GAAP recovery. Ireland facility ramp
pressures OpEx through 2026. Stock split in 2022 complicates long-run EPS comparisons (non-GAAP
EPS of $2.09 in FY2025 is back to FY2021 levels on a split-adjusted basis). Revenue growth
normalizing well below pre-shock 20%+ trajectory.
Score Rationale
Score of 7/10 reflects a company with clearly improving financial trends -- revenue re-accelerating off a trough, margins inflecting positively, and FCF surging -- but one that has not yet fully recovered to prior growth/margin levels and carries a credibility penalty from the 2024 guide-down.
Bull case (what pushes toward 8+):
- Revenue re-accelerated from +2% trough to +15.6% FY2025
- Non-GAAP GM recovered 600 bps Q1-to-Q4 2025; op margin hit record 26.3% in Q4
- FCF surpassed $1B for the first time (+71% YoY)
- Multiple growth catalysts not yet in 2026 guidance (Medicare T2NI, G7 intl, Stelo)
- Installed base growing ~20% provides durable volume tailwind
What holds it at 7:
- Q2 2024 guide-down was a material credibility event; stock near 52-week lows
- 2026 guidance of 11-13% implies growth normalizing below pre-shock 20%+ levels
- GAAP gross margin 60.1% in FY2025 vs 64.7% in FY2022 -- structural compression
- Abbott Libre 3 competitive threat building in the US
- Ireland facility ramp adds near-term cost pressure
- Non-GAAP EPS of $2.09 only back to split-adjusted FY2021 levels
Data sourced from Daloopa (company_id: 6704) and DexCom earnings call transcripts (Q3 2024 through Q4 2025). All financials in USD. Fiscal year ends December.