DexCom (DXCM -1.75%) reported its second-quarter 2025 results on July 30, 2025, delivering an upbeat performance highlighted by a revenue beat and continued expansion in the key type 2 diabetes market. The maker of continuous glucose monitoring (CGM) systems posted GAAP revenue of $1.16 billion, above the analyst estimate of $1.12 billion, and Non-GAAP earnings per share (EPS) of $0.48 versus the $0.44 consensus. Despite the margin headwinds from elevated freight and supply chain costs, the quarter reflected ongoing success in launching new features and growing its user base. Management raised its full-year revenue outlook, signaling confidence in strong demand for the remainder of fiscal 2025.
| Metric | Q2 2025 | Q2 2025 Estimate | Q2 2024 | Y/Y Change |
|---|---|---|---|---|
| EPS (Non-GAAP) | $0.48 | $0.44 | $0.43 | 11.6 % |
| Revenue (GAAP) | $1.16 billion | $1.12 billion | $1.004 billion | 15.2 % |
| Operating Income (GAAP) | $212.6 million | $158 million | 34.6 % | |
| Gross Margin (Non-GAAP) | 60.1 % | 63.5 % | (3.4 pp) | |
| Net Income (Non-GAAP) | $193 million | $174 million | 10.9 % |
Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in Q1 2025 earnings report.
Business Profile and Strategic Focus
DexCom develops and sells continuous glucose monitoring (CGM) systems, which help people with diabetes track their blood sugar levels in real time. Its flagship products include the Dexcom G6 and G7 sensor platforms as well as the Stelo, an over-the-counter CGM device. These tools eliminate the need for traditional finger stick testing and support better diabetes management through frequent, automated readings delivered to smartphones and other devices.
The business relies on steady innovation, regulatory approvals, and broad insurance coverage to reach more patients. Recent priorities include launching advanced products like the G7 15 Day CGM and Stelo, expanding reimbursement to capture a larger share of type 2 diabetes patients (especially those not using insulin), and driving adoption in international markets. Strategic partnerships and operational investments in manufacturing and logistics are also central to scaling the company's reach.
Quarter in Review: Revenue, Markets, and Operational Developments
The latest quarter brought a 15% increase in consolidated revenue (GAAP), reaching $1.16 billion and beating expectations by nearly $33 million. U.S. sales grew 15 % to $841 million, while international revenue rose 16% to $316 million on a reported basis. Sensor and other recurring revenue now comprise 97% of total sales, up from 94% a year ago, reflecting high demand and growing patient retention. Hardware revenue, representing only 3% of sales, declined 31%.
One of the most important trends is the rising contribution from patients with type 2 diabetes. Record new patient starts were reported, helped by expanded coverage for non-insulin users. Management highlighted that these patients are now a "material portion" of new starts, and the third major Pharmacy Benefit Manager (PBM) carrier will begin covering Dexcom CGM for all diabetes patients in the second half of 2025. This expansion could bring access to nearly 6 million people with type 2 diabetes not using insulin by the end of the year.
Innovation remains a key focus. The U.S. Food and Drug Administration (FDA) approved the Dexcom G7 15 Day CGM System. This version promises longer sensor wear and higher accuracy for users, and the launch is slated for the second half of the year. Stelo, the over-the-counter CGM, continues to gain traction, with more than 200,000 app downloads as of June 2025. Its contribution to revenue growth in FY2025 is expected to be 2–3%. The Stelo also broadened its reach through distribution on Amazon, marking a meaningful step for direct-to-consumer expansion.
Challenges emerged primarily in margin performance. Non-GAAP gross margin declined to 60.1% from 63.5% a year ago, driven by higher freight costs, tariffs, and continued use of expedited shipping as DexCom restocked inventory. The company estimates these pressures will abate in the second half, but expects non-GAAP gross margin for the full year to remain below historical levels. Notably, operating margin on a GAAP basis improved, but non-GAAP operating margin slipped to 19.2%. Adjusted EBITDA was $327.6 million, up 15% year-over-year.
Operationally, management asserts that manufacturing output reached record levels and that inventory was being rebuilt after prior supply shortfalls. DexCom continued proactive engagement with the FDA to address compliance matters; as of the end of the first quarter, these regulatory issues had not disrupted product approvals or market launches. There were no dividends declared or raised this quarter.
Looking Ahead: Guidance, Strategy, and Watchpoints
Management raised full-year revenue guidance to $4.60–4.63 billion, projecting 14–15% growth. Non-GAAP gross margin is expected at approximately 62%, non-GAAP operating margin at roughly 21%, and adjusted EBITDA at 30% for the fiscal year. Leadership stated that margin improvement will be gradual as logistics costs decrease and supply chains normalize with higher internal inventory, as discussed on a non-GAAP basis. The updated outlook accounts for ongoing investments and cost discipline, with non-GAAP margin recovery expected as expedited shipping tapers off.
The focus for the remainder of fiscal 2025 will be on launching the G7 15 Day CGM in the U.S, scaling up Stelo, and building on new market access for type 2 diabetes patients. CEO transition planning for early 2026 is underway, with President and COO Jake Leach named to succeed the current CEO.
Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.
