Executive Summary

Q4 2024 revenue was $1.113B (+8% YoY) with U.S. +4% and International +17%; GAAP EPS was $0.38 and non-GAAP EPS $0.45 as gross margin compressed on a $21M non-cash charge tied to inventory mishandling and lower production yields .
Management reiterated FY2025 targets: revenue $4.60B (+14%), non-GAAP gross margin ~64–65%, non-GAAP operating margin ~21%, and introduced adjusted EBITDA margin guidance ~30%; 15‑day G7 expected to launch in H2 2025 pending FDA clearance “shortly” .
Commercial execution improved: record new customer starts, +50k prescribers added in 2024, and international acceleration (France basal coverage implementation) .
Strategic catalysts: expanding PBM coverage for type 2 non‑insulin (two of the three largest PBMs now covering; >5M lives targeted by year‑end 2025), Stelo OTC traction (140k users in first four months), Oura partnership, and first GenAI feature deployed in Stelo .

What Went Well and What Went Wrong

What Went Well
- Record new customer starts; prescriber base expanded by >50,000 in 2024, improving sales force productivity and depth with primary care .
- International re‑acceleration: Q4 International revenue +17% reported (+19% organic), aided by France basal reimbursement (Dexcom ONE+) and wins in New Zealand .
- Product and platform progress: 15‑day G7 under FDA review with H2 2025 launch plan; GenAI features launched in Stelo; Oura partnership broadens data ecosystem .
What Went Wrong
- Gross margin headwind: Q4 non-cash charge (~$21M) from shipping partner mishandling and yield impact; temporary channel inventory tightness into early Q1 .
- U.S. revenue growth trailed volume due to rebate eligibility and channel mix; management expects the volume‑revenue gap to converge through 2025 .
- DME channel share was pressured earlier in 2024; trends stabilized in Q4 but require sustained execution to rebuild volume through that channel .

Financial Results

YoY comparison: Q4 2023 vs Q4 2024

Metric	Q4 2023	Q4 2024
Revenue ($MM)	$1,034.5	$1,113.5
GAAP Gross Margin (%)	63.5%	58.9%
Non-GAAP Gross Margin (%)	64.2%	59.4%
GAAP Operating Margin (%)	21.0%	17.0%
Non-GAAP Operating Margin (%)	23.5%	18.8%
GAAP Diluted EPS ($)	$0.62	$0.38
Non-GAAP Diluted EPS ($)	$0.50	$0.45

Sequential comparison: Q3 2024 vs Q4 2024

Metric	Q3 2024	Q4 2024
Revenue ($MM)	$994.2	$1,113.5
GAAP Gross Margin (%)	59.7%	58.9%
Non-GAAP Gross Margin (%)	63.0%	59.4%
GAAP Operating Margin (%)	15.3%	17.0%
Non-GAAP Operating Margin (%)	21.3%	18.8%
GAAP Diluted EPS ($)	$0.34	$0.38
Non-GAAP Diluted EPS ($)	$0.45	$0.45

Revenue by Geography (Q4)

Geography	Q4 2023 ($MM)	Q4 2024 ($MM)	YoY Growth
U.S.	$769.1	$802.8	+4%
International	$265.4	$310.7	+17%
Total	$1,034.5	$1,113.5	+8%

Revenue by Component (Q4)

Component	Q4 2023 ($MM)	Q4 2024 ($MM)	Mix (Q4’24)
Sensor & Other	$947.0	$1,068.5	96%
Hardware (Tx/Rx)	$87.5	$45.0	4%
Total	$1,034.5	$1,113.5	—

KPIs and operating metrics

Metric	Q2 2024	Q3 2024	Q4 2024
Active Customers (approx.)	2.5–2.6M (mid‑year est.)	—	>2.8M (year‑end)
Cash, Cash Equivalents & Marketable Securities ($B)	$3.12	$2.49	$2.58
Adjusted EBITDA ($MM)	$283.9	$300.1	$300.1
Adjusted EBITDA Margin (%)	28.3%	30.2%	27.0%
Non‑GAAP Operating Income ($MM)	$195.4	$212.0	$209.5
Non‑GAAP Operating Margin (%)	19.5%	21.3%	18.8%
Stelo Users (approx.)	—	~70k (first months)	>140k (first 4 months)

Notes on non-GAAP adjustments: Q4 2024 non‑GAAP net income excludes $8.0M amortization, $0.9M business transition items, $13.5M IP litigation, and $5.5M tax adjustments; non‑GAAP operating income excludes similar items .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue	FY 2025	$4.60B	$4.60B	Maintained
Non‑GAAP Gross Margin	FY 2025	~64–65%	~64–65%	Maintained
Non‑GAAP Operating Margin	FY 2025	~21%	~21%	Maintained
Adjusted EBITDA Margin	FY 2025	—	~30%	Introduced

Additional cadence commentary: management expects Q1 2025 revenue to decline ~8–9% sequentially vs Q4 (seasonality), with gross margin stepping back modestly Q4→Q1 on typical seasonality; adjusting for Q4 one‑time charges, Q1 gross margin would be slightly ahead of Q4 .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q‑2 and Q‑1)	Current Period (Q4 2024)	Trend
Sales force productivity & new starts	Q2: disruption from realignment; lowered guide . Q3: record new starts, +35k prescribers since expansion .	Another record new customer starts; prescriber base +50k in 2024; improved productivity .	Improving
DME channel share	Q2: share loss, pharmacy mix shift . Q3: stabilization late in quarter .	Stabilized; focus on channel‑agnostic execution and rebuilding DME volume .	Improving
Rebate eligibility (ASP headwind)	Q2: accelerated vs plan (3x G6), Q3 peak anticipated .	Impact stepped down in Q1 and minimal through 2025 .	Easing
Gross margin drivers	Q3: $24.6M non‑cash inventory build charge; 63.0% non‑GAAP GM .	~$21M non‑cash charge (shipping mishandling, yield); rebuilding supply; 2025 GM +200 bps expected .	Mixed near‑term; improving ’25
15‑day G7	Q3: submitted to FDA .	“Tail end” of review; H2 2025 launch; pump integration lift is small vs G6→G7 .	Advancing
Stelo OTC & AI	Q2: launch planned; ~1% FY24 revenue . Q3: launched, ~70k users; ~50% subscriptions .	>140k users in 4 months; Amazon channel in Q1; first GenAI feature live; Oura integration work underway .	Accelerating
International access	Q2: France basal coverage secured; Japan direct . Q3: Dexcom ONE+ in France; Japan momentum .	France basal implementation strong; New Zealand coverage uptick; broader access runway .	Positive
R&D pipeline (G8, multi‑analyte)	—	G8 in development; smaller wearable, multi‑analyte capability discussed .	Expanding

Management Commentary

“We ended 2024 with more than 2.8 million customers globally… an increase of approximately 25%… driven by momentum… and improving execution in the field… another quarter of record new customer starts.” — Kevin Sayer, CEO .
“Two of the three largest PBMs now cover Dexcom CGM for anybody with diabetes… by the end of the year, Dexcom will have coverage for more than 5 million people with type 2… not on insulin… We initiated a randomized controlled trial for people with type 2… not on insulin…” — Kevin Sayer .
“Gross margin was negatively impacted by a $21 million noncash charge… mishandled by one of our shipping partners… and new build configurations that lowered our production yield… expect levels back to normal by the end of the first quarter.” — Jereme Sylvain, CFO .
“We anticipate total [2025] revenue to be $4.6 billion (+14%)… non‑GAAP gross margin 64–65%, non‑GAAP operating margin ~21%, adjusted EBITDA ~30%… assumes a second half launch of our 15‑day G7 system.” — Jereme Sylvain .

Q&A Highlights

Volume vs revenue gap in U.S.: Gap narrowed Q4 vs Q3; expected to converge through 2025 as rebates lap and channel mix stabilizes; patient base up ~25% exiting 2024, guiding to 14% revenue growth (core G/D ~12–13%) .
DME channel: Share stabilized; focus on field alignment and channel‑agnostic routing; partnerships emphasized; price not the focal issue—volume is; Stelo also offered via DME partners .
15‑day G7: FDA review near the end; H2 2025 launch targeted; pump integration lift smaller vs G6→G7; presenting clinical data at ATTD; durability and standard costs broadly similar to 10‑day with margin benefits over time .
PBM coverage and type 2 non‑insulin economics: Unit economics per transaction similar across cohorts; per‑user‑per‑year lower on utilization; gross/operating margins not expected to degrade; RCT enrollment targeted H1 2025 with initial readouts late 2025 to support broader coverage (incl. CMS) .
2025 cadence: Q1 expected −8–9% seq.; gross margin typical seasonality, but adjusting for Q4 one‑time items implies Q1 slightly ahead of Q4; margin expansion in 2H as scale/yields improve and 15‑day begins to contribute .

Estimates Context

Wall Street consensus (S&P Global) for Q4 2024 revenue/EPS was unavailable during this session due to API rate limits, so we cannot quantify beat/miss versus consensus at this time. Values would normally be retrieved from S&P Global and compared to actuals; please advise if you want us to refresh and insert the consensus comparison once accessible.

Key Takeaways for Investors

Near‑term: Q4 delivered solid top‑line and record new starts but margin compression from a discrete non‑cash charge; expect Q1 seasonal step‑down and gross margin normalization as inventory and yields recover .
FY2025 setup: Reiterated $4.6B revenue (+14%) and margin targets; catalysts include H2 15‑day G7 launch, easing rebate headwinds, DME stabilization, and International access gains .
Stelo optionality: Rapid user adoption, expanding channels (Amazon, DME, B2B), GenAI insights and Oura integration could broaden TAM without impairing gross/operating margins per transaction .
Channel/ASP dynamics: Pharmacy mix and rebate eligibility weighed on U.S. ASPs in 2024; management expects convergence of revenue and volume growth through 2025 as these effects lap and mix stabilizes .
International momentum: France basal reimbursement and other access wins support OUS growth outpacing U.S. in the guide, adding diversification and scale benefits .
Medium‑term thesis: Scale and product cost reduction (incl. 15‑day), plus mix shift to higher‑margin installed base and international expansion, underpin the pathway back to ~65% gross margins and ~21% operating margins .

Appendix: Additional Data Points

Q4 GAAP net income $151.7M; non‑GAAP net income $177.8M; Adjusted EBITDA $300.1M .
Balance sheet: Cash, cash equivalents and marketable securities $2.58B; revolver undrawn .
FY 2024 revenue $4.033B (+11% YoY); GAAP operating margin 14.9%; non‑GAAP operating margin 18.8% .
Non‑GAAP policy excludes amortization, business transition, COVID-19 credits, equity investment gains/losses, IP litigation costs, and related tax adjustments .

DEXCOM INC (DXCM)·Q4 2024 Earnings Summary