Dexcom ((DXCM)) has held its Q3 earnings call. Read on for the main highlights of the call.
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DexCom’s recent earnings call conveyed a generally positive sentiment, underscored by robust revenue growth and strategic product expansions. The company showcased its advancements in type 2 diabetes continuous glucose monitoring (CGM) coverage and introduced innovative products like the DexCom Smart Basal. Despite these achievements, challenges in managing gross margins and quality issues with the G7 sensor deployment were acknowledged. Overall, the sentiment was buoyed by strong financial performance and strategic progress, even as some operational hurdles were noted.
Strong Revenue Growth
DexCom reported impressive revenue growth in the third quarter of 2025, with worldwide revenue reaching $1.21 billion, marking a 22% increase from the previous year. The U.S. market saw a 21% rise in revenue, while international markets, particularly France and Canada, contributed to a 22% increase. This growth underscores DexCom’s expanding market presence and successful strategies in both domestic and international arenas.
Expansion of CGM Access
Significant strides were made in expanding CGM access, with coverage now available for nearly 6 million type 2 non-insulin users in the U.S. This expansion represents about half of the type 2 non-insulin therapy (NIT) commercial population, highlighting DexCom’s commitment to broadening access to its life-enhancing technologies.
Introduction of DexCom Smart Basal
DexCom introduced the Smart Basal, a titration module designed to simplify basal insulin management. Currently under review with the FDA and for CE Mark, this innovation aims to improve adherence and streamline workflows for healthcare providers, potentially transforming diabetes management.
Successful Launch of Stelo
The launch of Stelo has been a notable success, generating over $100 million in revenue within just 12 months. This product has significantly increased awareness of CGM benefits for metabolic health, further solidifying DexCom’s position in the market.
Record Earnings Per Share
DexCom achieved a record high in quarterly earnings per share, reporting $0.61. This milestone reflects the company’s strong financial health and effective operational strategies.
Gross Margin Pressure
Despite the positive revenue growth, DexCom faced gross margin pressures, with margins decreasing to 61.3% from 63.0% in the previous year. This was attributed to higher-than-expected scrap rates at manufacturing facilities and increased costs related to expedited shipping.
Quality and Deployment Issues
The deployment of the G7 sensor encountered quality issues earlier in the year, which impacted consumer perception and potentially affected new patient starts. Addressing these challenges is crucial for maintaining consumer trust and market growth.
Anticipated Slightly Lower 2026 Growth
DexCom anticipates that its 2026 growth may slightly underperform current Street expectations, primarily due to existing coverage landscapes. This cautious outlook reflects the company’s realistic assessment of market conditions and strategic planning.
Forward-Looking Guidance
During the earnings call, DexCom provided a strong forward-looking guidance, emphasizing its robust financial performance. The company raised its annual revenue guidance to between $4.630 billion and $4.650 billion, reflecting a 15% growth rate. Despite lowering gross margin guidance to 61%, DexCom plans to offset these pressures through operational expense leverage, aiming for non-GAAP operating margins of 20% to 21% and adjusted EBITDA margins of 29% to 30%.
In conclusion, DexCom’s earnings call painted a picture of a company on a solid growth trajectory, driven by strategic product expansions and robust financial performance. While challenges in margin management and product deployment were noted, the overall sentiment remains positive, with forward-looking guidance suggesting continued growth and operational efficiency.