AI interpretation based on checked source excerpts. Issuer assertions and evidence limitations remain explicit.
Policy quality-scores-2: six equally weighted categories. The overall score requires full coverage. Missing inputs are not zero. Qualitative grades are sourced interpretations, not probabilities. 4/6 · 19/10/2026
Moat56
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
structural advantage · 3/4 · Launched CGM products, FDA-cleared software, established formulary access and a substantial active customer base demonstrate a current commercialization advantage supported by manufacturing expertise and investment requirements. Relative technological superiority remains incompletely established.
durability · 2/4 · Technical and manufacturing requirements support persistence, but continuing innovation is necessary. Reciprocal non-exclusive patent licenses protect operating freedom rather than exclusive economics; their dated covenant does not establish moat durability through 2034.
customer dependency · 2/4 · Disposable sensors, an expanding active customer base and integration into insulin management support ongoing engagement indirectly. These disclosures do not establish customer lock-in, switching penalties or cohort retention.
erosion resilience · 2/4 · First-half 2026 revenue and operating income grew despite higher inventory charges, demonstrating some resilience. The FDA warning, past supply disruptions and future Medicare bidding remain material vulnerabilities; future bidding effects are not treated as realized losses.
Pricing power44
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
realized pricing · 1/4 · Disclosed rebate-eligibility offsets and management's acknowledgment of payor pricing pressure support a weak assessment of net-price realization. Contracted reimbursement and rebates constrain capture of product value. The passages do not quantify selling-price changes, and revenue growth is not treated as evidence of price increases.
retention · 2/4 · The active customer base grew more than 20% to approximately 3.5 million, alongside continued sales of disposable sensors and revenue growth. This is indirect evidence of sustained engagement and repeat-demand capacity; new additions cannot be separated from retained customers.
margin resilience · 3/4 · First-half gross profit increased from $1,277.8 million to $1,580.3 million while revenue rose from $2,193.1 million to $2,500.3 million, despite higher inventory reserves. Manufacturing efficiencies and fixed-cost absorption explain resilience; this does not establish pricing-driven improvement or superior competitor economics.
contractual freedom · 1/4 · Contracted rates, reimbursement experience and managed-care rebates constrain pricing terms. Medicare bidding adds a disclosed future constraint, with payment changes scheduled for 2028 rather than already realized.
Predictability94
Five consecutive annual periods. Equal weights: nondeclining revenue frequency; revenue-growth volatility (5–40pp); positive FCF frequency; FCF-margin volatility (3–20pp). Stability indicator, not a growth forecast.
- Nondeclining revenue years (%)
- 100.00
- Revenue growth volatility (pp)
- 4.80
- Positive FCF years (%)
- 100.00
- FCF margin volatility (pp)
- 6.84
Financial strength—
Missing required inputs: debtFcfGrade, netDebtEbitGrade. Equal-weight grades: debt/FCF (1–8x), net debt/earnings before interest and tax (0–5x), interest service (1–12x), current ratio (0.75–2x). Earnings use reported operating income, or reported pretax profit plus reported interest expense when operating income is unavailable. Interest service uses earnings/interest expense; if unavailable, it uses reported operating cash flow/cash interest paid, without relabeling cash paid as accrued expense. Nonpositive cash flow/earnings score 0 for their service component; reported zero interest with a positive numerator scores 100. Net cash scores 100 for net leverage. Missing disclosures remain unavailable. General nonfinancial-company rubric, not a credit rating; exceptional and nonoperating gains are not normalized out. IFRS finance-cost and cash-flow classifications retain their reported scope.
- interestCoverageGrade
- 100.00
- currentRatioGrade
- 90.60
- Interest coverage (x)
- 49.83
- Current ratio (x)
- 1.88
Capital allocation—
Missing required inputs: operatingReturn. Three-year equal-weight indicators: pretax return on average invested capital (0–25%; equity + debt − cash, each year and its prior year), share-count growth (0–5%, lower better), share-based cost/revenue (2–20%, lower better), consolidated FCF/net income (0–1x). Return uses reported operating income or, if unavailable, EBIT calculated from reported pretax profit plus reported interest expense; exceptional/nonoperating gains are not normalized out. Share-based cost uses the reported cash-flow add-back or, if absent, separately reported recognized compensation expense; the latter never becomes an FCF adjustment. Nonpositive net income scores 0 for cash conversion; absent income/FCF stays unavailable. Nonpositive invested capital has no defined return and remains unavailable. Does not establish acquisition quality or buyback timing.
- 3-year average dilution (%)
- 0.08
- 3-year average SBC / revenue (%)
- 3.94
- cashConversionGrade
- 100.00
Management56
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
capital discipline · 2/4 · Actual cash generation, investment in long-lived assets and $600 million of first-half 2026 repurchases demonstrate funded capital deployment; approximately $1.95 billion of liquidity remained at quarter-end. Higher inventory reserves and ongoing equity compensation temper the assessment. Repurchase value creation and acquisition returns are not established.
incentive alignment · 2/4 · Implemented PSUs link compensation to revenue and multi-year relative shareholder returns, with holding requirements, ownership guidelines and anti-hedging safeguards. Actual vesting is disclosed separately from grants. Time-based awards and discretion to pay below bonus thresholds temper alignment; actual ownership compliance is unavailable.
execution · 2/4 · Product launches, clearance, broader access, active customer growth and improved 2026 financial results demonstrate achievements. The FDA warning, historical supply disruptions and increasing inventory reserves establish material execution shortcomings. Assessment uses operating outcomes rather than management reputation.
governance · 3/4 · Adopted board declassification, majority voting, proxy access, independent standing committees, internal audit reporting and a lead independent director support strong governance structures. The executive chair arrangement and manufacturing deficiencies limit conclusions about oversight effectiveness. Securities allegations remain unproven and are not treated as misconduct findings.
Evidence
During the year, we introduced Dexcom G7 15 Day in the United States, extending sensor wear time for our customers and establishing our highest level of accuracy to date.
2026 proxy / 2025 operational highlights / G7 15 Day launch · Filed 15/04/2026
We also advanced our software capabilities, including the FDA clearance of Dexcom Smart Basal, which is designed to support customers and clinicians with basal insulin titration and management.
2026 proxy / operational highlights / Smart Basal FDA clearance · Filed 15/04/2026
In addition, we made meaningful progress expanding access this past year, particularly in the United States where we announced coverage for all people with diabetes with the national formularies of the three largest PBMs.
2026 proxy / operational highlights / national formulary coverage · Filed 15/04/2026
These efforts supported growth of our active customer base by more than 20% to approximately 3.5 million global customers, while continued progress at our Ireland manufacturing facility strengthened our foundation for long term global scale.
2026 proxy / operational highlights / active customer growth · Filed 15/04/2026
We also rely on trade secrets, technical know-how and continuing innovation to develop and maintain our competitive position.
2025 Form 10-K / intellectual property / know-how and innovation · Filed 12/02/2026
Developing and maintaining commercial-scale manufacturing facilities has and will continue to require the investment of substantial additional funds and the hiring and retention of additional management, quality assurance, quality control and technical personnel who have the necessary manufacturing experience.
2025 Form 10-K / commercial-scale manufacturing investment · Filed 12/02/2026
We granted Abbott and its affiliates, and Abbott and its affiliates granted us and our affiliates, a worldwide, royalty-free, non-exclusive, fully paid-up license to certain patents and patent applications relating to analyte sensing, including to all the patents asserted in the settled litigation.
2025 Form 10-K / intellectual property risks / reciprocal Abbott licenses · Filed 12/02/2026
As part of the agreement, each party, on behalf of itself and its affiliates, also entered into a covenant not to sue until December 20, 2034, and agreed on behalf of themselves and their affiliates to refrain from challenging the patents and patent applications licensed
2025 Form 10-K / intellectual property risks / covenant not to sue · Filed 12/02/2026
Condensed Consolidated Statements of Operations (Unaudited) Three Months Ended June 30, Six Months Ended June 30, (In millions, except per share data) 2026 2025 2026 2025 Revenue $ 1,308.4 $ 1,157.1 $ 2,500.3 $ 2,193.1 Cost of sales 478.4 468.3 920.0 915.3 Gross profit 830.0 688.8 1,580.3 1,277.8 Operating expenses: Research and development 153.0 148.2 298.3 293.4 Selling, general and administrative 358.7 328.0 708.4 638.1 Total operating expenses 511.7 476.2 1,006.7 931.5 Operating income 318.3 212.6 573.6 346.3 Other income (expense), net (0.8) 28.5 13.4 49.1 Income before income taxes 317.5 241.1 587.0 395.4 Income tax expense 68.4 61.3 138.4 110.2 Net income $ 249.1 $ 179.8 $ 448.6 $ 285.2 Basic net income per share $ 0.65 $ 0.46 $ 1.17 $ 0.73 Shares used to compute basic net income per share 382.2 392.1 383.7 391.6 Diluted net income per share $ 0.64 $ 0.45 $ 1.15 $ 0.71 Shares used to compute diluted net income per share 390.1 408.2 391.8 407.8 See accompanying notes 5 Table of Contents DexCom, Inc.
June 2026 Form 10-Q / unaudited statements of operations · Filed 30/07/2026
For example, in March 2025, we received an FDA warning letter following inspections of our facilities in San Diego, California, and Mesa, Arizona relating to observed non-conformities in manufacturing 14 processes and our quality management system.
2025 Form 10-K / manufacturing / March 2025 FDA warning letter · Filed 12/02/2026
33 We have experienced manufacturing and inventory challenges for G7 in the past that resulted in disruptions in our ability to supply certain markets, including in the U.S.
2025 Form 10-K / manufacturing risks / realized G7 supply disruptions · Filed 12/02/2026
Inventory (In millions) June 30, 2026 December 31, 2025 Raw materials $ 232.7 $ 257.6 Work-in-process 107.0 105.0 Finished goods 386.7 266.5 Total inventory $ 726.4 $ 629.1 We recorded inventory reserve charges of $45.6 million and $8.8 million, during the three months ended June 30, 2026 and 2025, respectively, and $84.2 million and $37.0 million during the six months ended June 30, 2026 and 2025, respectively.
June 2026 Form 10-Q / inventory / reserve charges · Filed 30/07/2026
In late 2025, CMS extended the DMEPOS competitive bidding program to include our CGMs and receivers, with contracting beginning in 2027 and payment changes taking effect in 2028.
2025 Form 10-K / reimbursement risks / Medicare bidding implementation · Filed 12/02/2026
•Although many third-party payors have adopted some form of coverage policy for continuous glucose monitoring devices, our products do not always have such coverage, including simple broad-based contractual coverage with third-party payors, and we frequently experience administrative challenges in obtaining coverage or reimbursement for our products.
2025 Form 10-K / reimbursement risks / coverage limitations and administrative challenges · Filed 12/02/2026
Strategic Achievements • Announced broader coverage in the United States with the national formularies of the three largest pharmacy benefit managers now covering Dexcom CGM for anyone with diabetes • Launched Dexcom G7 15 Day CGM system in the United States • Received FDA clearance for Dexcom Smart Basal, becoming the first and only CGM-integrated basal insulin dosing optimizer Fiscal 2025 Compensation Overview Given the focus on reducing healthcare costs, trends in the healthcare industry and changing regulation, the pricing pressure from payors, and increased competition, we anticipated that it would be challenging to maintain a rapid rate of growth during fiscal 2025; nevertheless, we expected our business to achieve: •substantial increases in revenue; •increases to our operating income; and •various performance goals to maintain and advance our technology advantage and commercial deployment.
2026 proxy / strategic achievements and compensation overview / payor pressure and competition · Filed 15/04/2026
These favorable impacts were partially offset by channel and product mix and rebate eligibility.
June 2026 Form 10-Q / results of operations / channel mix and rebate eligibility offsets · Filed 30/07/2026
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.
June 2026 Form 10-Q / cost of sales and gross profit / manufacturing and volume drivers · Filed 30/07/2026
These charges are recorded in cost of sales and reflect reserves established through our ongoing evaluation of quality control data, the planned discontinuation of G6 manufacturing, forecasted demand, analysis of risk exposure, and the continued improvement and innovation of our products.
June 2026 Form 10-Q / inventory / reasons for reserves · Filed 30/07/2026
Transaction price is typically based on the contracted rates less an estimate of claim denials and historical reimbursement experience by payor, which include current and future expectations regarding reimbursement rates and payor mix.
2024 Form 10-K / revenue recognition / contracted rates and reimbursement · Filed 18/02/2025
We are subject to rebates on pricing programs with managed care organizations, such as pharmacy benefit managers, governmental and third-party commercial payors, primarily in the U.S.
2024 Form 10-K / revenue recognition / managed-care pricing rebates · Filed 18/02/2025
Our reportable segment derives revenues from the sale of disposable sensors and our Reusable Hardware.
2025 Form 10-K / segment information / disposable sensors and reusable hardware · Filed 12/02/2026
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.
June 2026 Form 10-Q / liquidity / cash flows and deployment · Filed 30/07/2026
During the three and six months ended June 30, 2026, we repurchased 8.6 million shares of our common stock for $600.0 million under the 2026 Share Repurchase Program.
June 2026 Form 10-Q / equity / completed 2026 repurchases · Filed 30/07/2026
Twelve Months Ended December 31, (In millions) 2025 2024 2023 Other segment disclosures Depreciation and amortization (1) $ 251.8 $ 217.7 $ 186.0 Expenditures for long-lived assets $ 363.5 $ 358.8 $ 236.6 Significant noncash items other than depreciation and amortization expense: Deferred income tax expense (benefit) $ 182.2 $ (43.8) $ (55.0) Net (gains) losses on equity investments $ (78.1) $ 1.4 $ (1.9) (1) Includes depreciation and amortization recorded in both cost of sales and operating expenses.
2025 Form 10-K / segment disclosures / expenditures for long-lived assets · Filed 12/02/2026
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.
June 2026 Form 10-Q / financial highlights / operating results and liquidity · Filed 30/07/2026
As a result, with respect to our executive compensation program, in fiscal 2025 the Compensation Committee: •maintained our base salary and target total cash compensation levels for our NEOs generally within the market range of our compensation peer group; •continued to allocate a meaningful proportion of target total cash compensation to our annual cash incentive award plan, which we refer to as our Management Bonus Plan (the “2025 Bonus Plan”); •maintained adjusted revenue and non-GAAP operating margin as the company performance metrics in the 2025 Bonus Plan; •maintained performance-based restricted stock units (“PSUs”) and time-based restricted stock units (“RSUs”) in our equity compensation program, which were granted based on expected future contributions of each executive officer, among other factors; •maintained PSUs at 50% of our CEO’s and 30% of our other NEOs’ total target annual equity compensation to ensure alignment with continued company growth and stockholder return; •maintained one-year adjusted revenue and three-year relative stockholder return as our metrics in our PSUs intended to drive company growth and stockholder return; and •maintained strong governance policies and practices.
2026 proxy / implemented fiscal 2025 compensation design · Filed 15/04/2026
2025 Executive Compensation Policies and Practices at a Glance WHAT WE DO WHAT WE DO NOT DO þ Pay for Performance philosophy and culture þ Majority of pay is “at risk,” delivered via long-term equity and annual cash incentives þ Compensation Committee selects and engages its own independent advisor and all Compensation Committee members are independent directors þ Compensation Committee reviews external competitive market data when making compensation decisions and annually reviews our compensation peer group þ CEO is subject to a one-year post-vesting holding period on all time-based equity awards þ Stock ownership guidelines that apply to our executive officers and our board of directors þ Nasdaq-compliant compensation Clawback Policy þ Annual risk assessment of our compensation program þ Annual Say-on-Pay vote ý No pledging or hedging of Company securities ý No excessive perquisites ý No guaranteed minimum bonuses or equity awards ý No discounted stock options or stock appreciation rights ý Our A&R 2015 EIP prohibits the repricing of stock options or stock appreciation rights without stockholder approval ý No single trigger acceleration of vesting upon a change in control ý No excise tax gross-ups 42 Table of Contents Stockholder Advisory Vote on Executive Compensation At our 2025 annual meeting of stockholders, our stockholders expressed support for our executive compensation program, with approximately 90% of the votes cast (excluding abstentions and broker non-votes) voting in favor of the compensation of our NEOs (commonly known as a “Say-on-Pay” vote).
2026 proxy / compensation policies / holding requirements and safeguards · Filed 15/04/2026
However, the Compensation Committee retains discretion for bonus payouts if the performance achieved is below threshold.
2026 proxy / bonus plan / below-threshold payout discretion · Filed 15/04/2026
Stock Awards Number of Shares Acquired on Vesting (#) Value Realized on Vesting ($)(1) Jacob Leach 33,246 2,662,563 Kevin Sayer 125,543 10,492,234 Jereme Sylvain 28,587 2,283,921 Michael Brown 26,533 2,065,329 Jon Coleman — — Sadie Stern 27,139 2,171,209 (1)The value realized on vesting is determined by multiplying (i) the number of shares that vested during fiscal 2025, times (ii) the closing price of our common stock on the Nasdaq Global Select Market on the applicable vesting date.
2026 proxy / executive stock awards actually vested during 2025 · Filed 15/04/2026
Key Experience and Qualifications: •Executive oversight of strategy and operations •Significant biosensing and diabetes industry experience Education: •Bachelor’s and Master’s degrees in Accounting and Information Systems, Brigham Young University •Certified Public Accountant (inactive) 15 Table of Contents CORPORATE GOVERNANCE Corporate Governance Highlights Our commitment to good corporate governance practices and accountability to stockholders is described below: What We Do and Have Done •Amended our certificate of incorporation to declassify our Board •Implemented a proxy access bylaw provision •Enable our stockholders to amend our bylaws by majority vote •Apply a majority voting standard in uncontested director elections •All directors are independent except for our CEO and Executive Chairman •Enhance Board independence through regular meetings of independent directors and committees without the presence of management •Equip our Lead Independent Director with broad authority and key responsibilities •All members of our standing Board committees – the Audit Committee, the Compensation Committee, the Nominating and Governance Committee, and Technology Committee – are independent •Annual Board, standing committee, and individual director self-evaluations •Stockholders may recommend director nominees to the Nominating and Governance Committee •Established Board oversight of our corporate sustainability practices through our Nominating and Governance Committee •Charters of each committee of the Board clearly establish the committees’ respective roles and responsibilities •Maintain a compliance helpline available to all employees •Our Audit Committee has procedures in place for the anonymous submission of employee complaints on accounting, internal accounting control or auditing matters •Adopted a Code of Conduct and Business Ethics (the “Code of Conduct”) that applies to all of our directors, officers and employees worldwide •Our internal audit function maintains critical oversight over the key areas of our business and financial processes and controls, and reports directly to our Audit Committee •We have adopted stock ownership guidelines for our non-employee directors and executive officers What We Don’t Do •No pledging or hedging of Company securities •No multi-voting or non-voting stock 16 Table of Contents Board Leadership Structure and the Role of the Lead Independent Director Our Board selects its Chairperson based on what our Board believes is in the best interests of our company and our stockholders.
2026 proxy / adopted corporate governance practices · Filed 15/04/2026
Kevin Sayer currently serves as our Executive Chairman, while Mark Foletta serves as our Lead Independent Director.
2026 proxy / board leadership / executive chair and lead independent director · Filed 15/04/2026
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.
June 2026 Form 10-Q / legal proceedings / securities complaint allegations · Filed 30/07/2026
The following table summarizes our share-based compensation expense included in our condensed consolidated statements of operations: Three Months Ended June 30, Six Months Ended June 30, (In millions) 2026 2025 2026 2025 Cost of sales $ 3.1 $ 4.0 $ 5.9 $ 7.2 Research and development 9.7 13.5 21.3 26.3 Selling, general and administrative 26.2 27.8 55.1 46.0 Total share-based compensation expense $ 39.0 $ 45.3 $ 82.3 $ 79.5 As of June 30, 2026, unrecognized estimated compensation costs related to RSUs and PSUs totaled $263.6 million and are expected to be recognized over a weighted-average period of approximately 2.2 years.
June 2026 Form 10-Q / share-based compensation expense and outstanding costs · Filed 30/07/2026
