AI interpretation based on checked source excerpts. Issuer assertions and evidence limitations remain explicit.
Policy quality-scores-3: six equally weighted categories. The overall score requires full coverage. Missing inputs are not zero. Qualitative grades are sourced interpretations, not probabilities. 6/6 · 31/10/2026
Moat56
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
structural advantage · 3/4 · Launched products, FDA-cleared software, established formulary access and substantial active customer adoption demonstrate a current commercialization advantage. Specialized manufacturing investment and know-how support barriers. These issuer disclosures establish achievements, but do not prove technological superiority or a production-cost advantage across competitors.
durability · 2/4 · Accumulated know-how and demanding manufacturing requirements support persistence, but continued innovation and compliance remain necessary. Reciprocal non-exclusive patent licenses support operating freedom rather than exclusive returns. The covenant ending December 20, 2034 does not establish that Dexcom's economic advantage lasts through that date.
customer dependency · 2/4 · Disposable sensors and software supporting insulin management create reasons for continuing use, while the expanding active customer base supports engagement indirectly. The passages do not establish switching penalties, exclusive device dependency or cohort retention. Customer need for CGM cannot automatically be attributed to dependence on Dexcom.
erosion resilience · 2/4 · First-half 2026 revenue and operating income improved despite higher inventory reserve charges, demonstrating some realized resilience. Manufacturing deficiencies and past supply disruptions expose operational fragility. Future Medicare bidding may constrain reimbursement, but scheduled 2028 payment changes are not treated as losses already incurred.
Pricing power44
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
realized pricing · 1/4 · Reported rebate-eligibility offsets, management's acknowledgment of payor pricing pressure and contractual reimbursement adjustments support weak price capture. The disclosures do not isolate selling-price changes from channel or product mix. Revenue growth and improved margins therefore do not establish realized price increases or quantify price deterioration.
retention · 2/4 · The active customer base grew more than 20% to approximately 3.5 million global customers during 2025, alongside a disposable sensor revenue model and subsequent revenue growth. This supports repeat demand indirectly. New additions cannot be separated from retained customers, and no retention rate is inferred.
margin resilience · 3/4 · First-half gross profit rose from $1,277.8 million in 2025 to $1,580.3 million in 2026 as revenue increased from $2,193.1 million to $2,500.3 million, despite higher reserve charges. Disclosed manufacturing efficiencies and fixed-cost absorption support strong observed resilience, without establishing pricing-driven gains or superior competitor economics.
contractual freedom · 1/4 · Contracted rates, reimbursement adjustments and managed-care rebates constrain Dexcom's ability to determine net pricing independently. Broader formulary access supports distribution but does not establish unilateral pricing discretion. Medicare bidding adds a future contractual constraint, with contracting beginning in 2027 and payment changes in 2028.
Predictability94
5 consecutive published 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
- observedAnnualPeriods
- 5.00
Financial strength95
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, an original issuer-reported unadjusted EBIT reconciled to net income, income tax and signed net interest, or reported pretax profit plus reported gross interest expense. Reported EBIT is distinct from GAAP operating income and gross interest. 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.
- debtFcfGrade
- 97.83
- netDebtEbitGrade
- 92.91
- interestCoverageGrade
- 100.00
- currentRatioGrade
- 90.60
- Debt / FCF (x)
- 1.15
- Net debt / operating income (x)
- 0.35
- Interest coverage (x)
- 49.83
- Current ratio (x)
- 1.88
Capital allocation91
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, an original issuer-reported unadjusted EBIT reconciled to net income, income tax and signed net interest, or EBIT calculated from reported pretax profit plus reported gross interest expense; the issuer-reported EBIT is distinct from GAAP operating income and gross interest; 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. ROIC remains undefined for nonpositive invested capital; the explicit asset-return alternative does not change the ROIC chart. Missing financial inputs alone never trigger an alternative. Does not establish acquisition quality or buyback timing.
- 3-year pre-tax operating return (%)
- 19.14
- 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 · Operating cash generation, long-lived asset investment and $600.0 million of first-half 2026 repurchases demonstrate funded deployment, with $1.95 billion of quarter-end liquidity remaining. Higher inventory charges and ongoing equity compensation temper discipline. Acquisition returns and repurchase value creation are not established by spending or authorization alone.
incentive alignment · 2/4 · Implemented PSUs combine revenue and three-year relative shareholder returns; ownership requirements, reported compliance for seasoned NEOs, CEO holding rules and anti-hedging support alignment. Time-based awards, inclusion of unvested RSUs in ownership calculations and below-threshold bonus discretion temper the assessment. Grants are not treated as earned performance outcomes.
execution · 2/4 · Product launches, FDA clearance, broader formulary access, active customer growth and improved first-half 2026 results demonstrate execution through operating outcomes. The manufacturing warning, historical supply disruptions and rising inventory reserve charges establish material shortcomings. Stronger profitability alone does not establish consistently reliable manufacturing or successful remediation.
governance · 3/4 · Adopted declassification, majority voting, proxy access, independent committees and direct internal-audit reporting support strong governance structures. September disclosures add an independent director and committee appointments. The executive chairman arrangement and manufacturing deficiencies limit conclusions about oversight effectiveness; board credentials alone do not demonstrate superior governance outcomes.
Evidence
We also rely on trade secrets, technical know-how and continuing innovation to develop and maintain our competitive position.
2025 Form 10-K, filed 2026-02-12; technical know-how and continuing 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, filed 2026-02-12; commercial-scale manufacturing investment and personnel · Filed 12/02/2026
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, filed 2026-04-15; 2025 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, filed 2026-04-15; Smart Basal FDA clearance and intended function · 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, filed 2026-04-15; announced 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, filed 2026-04-15; 2025 global active customer growth and manufacturing progress · Filed 15/04/2026
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, filed 2026-02-12; reciprocal non-exclusive Abbott patent 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
53
under the settlement agreement for periods of time which vary depending on the relevant patents or patent applications.
2025 Form 10-K, filed 2026-02-12; dated covenant not to sue and patent-challenge restrictions · Filed 12/02/2026
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, filed 2026-02-12; 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, filed 2026-02-12; historical G7 manufacturing and supply disruptions · Filed 12/02/2026
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, filed 2026-02-12; Medicare bidding contracting in 2027 and payment changes in 2028 · 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, filed 2026-04-15; strategic achievements and management discussion of payor pricing pressure and competition · Filed 15/04/2026
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, filed 2026-07-30; inventory and comparative quarterly and first-half reserve charges · Filed 30/07/2026
Our reportable segment derives revenues from the sale of disposable sensors and our Reusable Hardware.
2025 Form 10-K, filed 2026-02-12; disposable sensor and reusable hardware revenue model · 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, filed 2026-07-30; unaudited comparative statements of operations, units and periods included · Filed 30/07/2026
These favorable impacts were partially offset by channel and product mix and rebate eligibility.
June 2026 Form 10-Q, filed 2026-07-30; disclosed channel, product-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, filed 2026-07-30; explanation of gross-profit and margin improvement · 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, filed 2025-02-18; transaction-price contracted rates and reimbursement adjustments · Filed 18/02/2025
Rebates
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, filed 2025-02-18; managed-care pricing rebates · Filed 18/02/2025
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, filed 2026-07-30; comparative first-half cash flows and acquisition spending · 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, filed 2026-07-30; actual first-half 2026 repurchases · Filed 30/07/2026
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, filed 2026-07-30; second-quarter results and quarter-end liquidity · 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, filed 2026-07-30; share-based compensation expense and unrecognized compensation commitments · 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, filed 2026-02-12; comparative annual long-lived asset expenditures · Filed 12/02/2026
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, filed 2026-04-15; implemented 2025 bonus and equity compensation structure · Filed 15/04/2026
However, the Compensation Committee retains discretion for bonus payouts if the performance achieved is below threshold.
2026 proxy, filed 2026-04-15; below-threshold bonus payout discretion · Filed 15/04/2026
Our stock ownership guidelines require our CEO and our other executive officers to retain ownership of a material amount of our common stock within three years of becoming an executive officer, as follows:
Position
Multiple of Annual Base Salary
CEO
6x
Other Executive Officers
3x
Ownership levels are determined by including shares of common stock owned directly as well as shares underlying unvested time-based RSUs.
2026 proxy, filed 2026-04-15; executive ownership requirements and inclusion of unvested time-based RSUs · Filed 15/04/2026
As of April 1, 2026, all of our NEOs who have served three years or more as executive officers, including the CEO, were in compliance with these stock ownership guidelines.
2026 proxy, filed 2026-04-15; ownership compliance as of April 1, 2026 for NEOs with at least three years of executive service · Filed 15/04/2026
In addition, our CEO is required to retain all shares received as a result of the settlement of any RSUs, net of any applicable tax withholdings, for a period of no less than twelve months from the date of such settlement.
2026 proxy, filed 2026-04-15; CEO post-settlement holding requirement · Filed 15/04/2026
We do not allow employees, officers or directors to hedge our equity securities.
2026 proxy, filed 2026-04-15; prohibition on hedging · 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, filed 2026-04-15; adopted governance structures, board independence and internal audit reporting · Filed 15/04/2026
Kevin Sayer currently serves as our Executive Chairman, while Mark Foletta serves as our Lead Independent Director.
2026 proxy, filed 2026-04-15; executive chairman and lead independent director · Filed 15/04/2026
The Board determined that Mr. Boehnlein qualifies as an independent director pursuant to the Securities Act of 1933, as amended, and the listing standards of the Nasdaq Stock Market, in each case as currently in effect.
September 2026 Form 8-K, filed 2026-09-10; board determination of new director independence · Filed 10/09/2026
The Board also appointed Mr. Boehnlein to serve as a member of the Operations & Innovation Committee and the Audit Committee of the Board, effective immediately.
September 2026 Form 8-K, filed 2026-09-10; new director committee appointments · Filed 10/09/2026
