Executive Summary

Q1 2025 revenue grew 12% YoY to $1.036B with organic growth of 14%; U.S. revenue +15% YoY and International +7% YoY. Gross margin stepped down due to expedited freight and supply normalization; non-GAAP operating margin was 13.8% .
Versus Wall Street consensus, revenue beat ($1.036B vs $1.017B*) while non-GAAP EPS modestly missed ($0.32 vs $0.33*). Management reaffirmed FY revenue ($4.60B, +14%) and operating/EBITDA margins but lowered non-GAAP gross margin to ~62% .
Strategic catalysts: FDA clearance of G7 15 Day (MARD 8.0%) with H2 launch plan, broader PBM coverage (2 of 3 now; third expected in summer), and a new $750M share repurchase authorization .
Inventory rebuild drove incremental costs (chartered flights) and tariff-related supply-chain inflation; management quantified ~225bps full-year gross margin headwind (75bps Q1 result, ~100bps freight, ~50bps tariffs, ~25bps FX) yet maintained FY operating and EBITDA margins .

What Went Well and What Went Wrong

What Went Well

Record new patient adds, with notable acceleration from type 2 non-insulin users after PBM coverage expansions; U.S. revenue +15% YoY to $750.5M .
FDA clearance of G7 15 Day with industry-leading accuracy (MARD 8.0%); management expects H2 launch with pump partner compatibility and payer coverage work underway .
Share repurchase authorization up to $750M, enhancing capital allocation flexibility amid $2.70B cash/marketable securities at quarter-end .

Quotes:

“Dexcom delivered a quarter of strong revenue results and unlocked significant new type 2 coverage.” — Kevin Sayer .
“Our lines as we exited the quarter were running at some record output.” — Jacob Leach .
“We are excited to announce a $750 million share repurchase program today.” — Jereme Sylvain .

What Went Wrong

Gross margin compression: GAAP GM 56.9% (vs 61.0% Q1’24) and non-GAAP GM 57.5% (vs 61.8%); incremental costs for expedited logistics and inventory normalization .
International revenue grew 7% YoY (below some expectations), with timing “choppiness” around coverage wins; strength noted in France and Japan but uneven cadence near term .
Non-GAAP operating margin declined to 13.8% (from 15.2% Q1’24) despite lower IP litigation expenses, reflecting freight/tariff/FX headwinds and continued OpEx investment to support growth .

Financial Results

Metric	Q1 2024	Q3 2024	Q4 2024	Q1 2025
Revenue ($USD Billions)	$0.921	$0.994	$1.114	$1.036
GAAP Diluted EPS ($)	$0.36	$0.34	$0.38	$0.27
Non-GAAP Diluted EPS ($)	$0.32	$0.45	$0.45	$0.32
GAAP Gross Margin (%)	61.0%	59.7%	58.9%	56.9%
Non-GAAP Gross Margin (%)	61.8%	63.0%	59.4%	57.5%
GAAP Operating Margin (%)	11.0%	15.3%	17.0%	12.9%
Non-GAAP Operating Margin (%)	15.2%	21.3%	18.8%	13.8%
Adjusted EBITDA ($USD Millions)	$220.9	$300.1	$300.1	$230.4

Segment breakdown (Geography):

Geography	Q1 2024 ($MM)	Q1 2025 ($MM)	YoY Growth	% of Total (Q1 2025)
U.S.	$653.2	$750.5	+15%	72%
International	$267.8	$285.5	+7%	28%
Total	$921.0	$1,036.0	+12%	100%

Revenue components:

Component	Q1 2024 ($MM)	Q1 2025 ($MM)	YoY Growth	% of Total (Q1 2025)
Sensor & Other	$854.3	$997.2	+17%	96%
Hardware	$66.7	$38.8	-42%	4%
Total	$921.0	$1,036.0	+12%	100%

Selected KPIs:

KPI	Q4 2024	Q1 2025
Cash, Cash Equivalents & Marketable Securities ($B)	$2.58	$2.70
Organic Revenue Growth YoY (%)	—	14%
Largest PBMs Covering CGM for All Diabetics (count)	2	2; third expected in summer
Stelo App Downloads (cumulative)	—	200,000+

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue	FY 2025	$4.60B (+14%)	$4.60B (+14%)	Maintained
Non-GAAP Gross Profit Margin	FY 2025	~64%–65%	~62%	Lowered
Non-GAAP Operating Margin	FY 2025	~21%	~21%	Maintained
Adjusted EBITDA Margin	FY 2025	~30%	~30%	Maintained

Drivers of gross margin change: ~75bps from Q1 results; ~100bps from expedited global freight; ~50bps from tariff-related supply-chain inflation; ~25bps from USD fluctuations .

Earnings Call Themes & Trends

Topic	Q3 2024 (Prior-2)	Q4 2024 (Prior-1)	Q1 2025 (Current)	Trend
AI/Technology & Platform	Launched Stelo; early OTC positioning	First generative AI feature in glucose biosensing; Oura partnership	Stelo app enhancements (180-day look-back), growing downloads; ongoing deeper Oura integration; generative AI insights rollout	Building feature depth and engagement
Supply Chain & Inventory	Non-cash inventory build charge; tighter channel inventory	Q4 shipping mishandling charge; normalize by end of Q1’25	Expedited freight (chartered flights), inventory rebuild; margin headwinds quantified	Improving supply, cost normalization through year
Tariffs/Macro	—	—	~50bps tariff-related inflation assumed; diversified U.S manufacturing footprint limits direct impact	Prudently modeling indirect cost inflation
Product Performance	G7 expansion; Dexcom ONE+ launch in France	Submitted G7 15 Day to FDA	FDA clearance for G7 15 Day; H2 launch plan; pump partner integration	Platform upgrade catalyst
Regional Trends	International +12% YoY; strong OUS adoption	International +17% YoY; France basal coverage; Japan direct	OUS +7% YoY; pockets of strength (France/Japan); timing “choppiness” around coverage wins	Growing access with uneven quarterly cadence
Regulatory/Legal	—	—	FDA warning letter; corrective actions in process; does not restrict approvals or distribution	Addressing quality systems; no commercial restriction
R&D Execution	—	Initiated RCT for type 2 non-insulin; enrollment near completion	RCT enrollment finishing H1; readout late 2025/early 2026; pursuing CMS and broader coverage	Evidence-building for broader access

Management Commentary

“We started the year by announcing that we had secured access at 2 of the 3 largest PBMs for anyone with diabetes… as of this summer, the third major PBM will also begin covering Dexcom G7 for anyone with diabetes in some of their key formularies.” — Kevin Sayer .
“We expected Q1 gross margin to be below our full year levels… we did have to incur some incremental costs… chartering direct flights to fulfill distribution centers.” — Jereme Sylvain .
“This marks another innovation milestone… performance data demonstrating an MARD of 8.0%.” — Jake Leach on G7 15 Day .
“Given our strong revenue and cash flow growth outlook, we see [the $750M repurchase] as an opportunity to enhance our capital structure.” — Jereme Sylvain .

Q&A Highlights

Supply/inventory: Channel inventory normalized by quarter-end; continued expedited freight to rebuild internal finished goods (target 60–90 days), driving near-term gross margin headwind .
Guidance cadence: Revenue guide held after one quarter; small contribution assumed from 15 Day in H2; beat potential exists with faster coverage/pump integration .
Gross margin trajectory: Low-60s in Q2, moving higher in H2 as freight moderates and scale improves; investor “math” consistent with cadence .
Type 2 non-insulin dynamics: Strong uptake and solid retention where reimbursed; Stelo users showing regular reorders and subscription propensity .
Tariffs/FX: ~$20M indirect cost impact (~50bps) modeled for 2025; diversified U.S manufacturing footprint reduces direct tariff exposure .

Estimates Context

Metric (Q1 2025)	Consensus*	Actual	Notes
Revenue ($USD)	$1,017.4M*	$1,036.0M	Beat
Primary EPS ($)	$0.33*	$0.32	Slight miss
Primary EPS – # of Estimates	22*	—	Coverage breadth
Revenue – # of Estimates	20*	—	Coverage breadth

Values retrieved from S&P Global.*

Key Takeaways for Investors

Revenue beat and robust U.S growth offset gross margin headwinds from expedited logistics; near-term margin pressure quantified and incorporated in FY guide .
Non-GAAP EPS modestly below consensus despite lower IP litigation costs; freight/tariffs/FX the key drivers of the miss, not demand .
FDA-cleared G7 15 Day with superior accuracy supports ASP stability (per-diem reimbursement unchanged), and should provide measured margin tailwinds as adoption grows through H2 and beyond .
Coverage expansion is a major growth lever: 2 of 3 largest PBMs now cover all diabetics; third expected in summer—record new patient momentum should continue, particularly in type 2 non-insulin .
International growth remains constructive but uneven quarter-to-quarter; France (Dexcom ONE basal coverage) and Japan (direct model) are notable bright spots .
Capital returns and balance sheet strength: $750M repurchase authorized with $2.70B liquidity provides flexibility around 2025 converts and strategic uses .
FY 2025 guide looks achievable with upside optionality from faster 15 Day adoption, additional access wins, and cost normalization as expedited freight moderates .

DEXCOM INC (DXCM)·Q1 2025 Earnings Summary