01—Abstract
Summary
Summary of the 10-K filed February 18, 2025. Cited figures are marked; the original filing is the authoritative source.
DexCom (DXCM) closed fiscal 2024 with revenue of $4.03 billiona, up 11% year over year, driven primarily by higher disposable sensor volume as the worldwide customer base grew by roughly 500,000 to 600,000 net users (excluding Stelo).
Gross margin contracted to 60.5% from 63.2%, reflecting pricing headwinds from greater rebate eligibility, unfavorable product and channel mix, higher freight costs, and non-cash inventory charges. Operating income was essentially flat at $600.0 millionb (up 0.4%) as operating expenses grew 9%, while net income rose 6% to $576.2 million and diluted EPS reached $1.42 versus $1.30. Operating cash flow was strong at $989.5 million, up 32%, supporting continued capital investment in manufacturing (capex of $358.8 million, including new facilities in Malaysia and Athenry, Ireland).
Balance sheet and capital allocation were active during the year. Cash, cash equivalents and short-term marketable securities totaled $2.58 billionc, and the company repurchased $750 million of stock under its 2024 program. Total convertible debt principal is $2.46 billion, with $1.2 billion (2025 Notes) classified as current due November 2025, which the company may need to address through cash, share settlement, or refinancing.
The revolving credit facility ($200 milliond, undrawn) matures in October 2026. The company reported no outstanding borrowings and was in covenant compliance at year end.
Key risks highlighted include G7 manufacturing and inventory challenges that disrupted supply to certain markets, intensifying competition (including Abbott's Libre, Medtronic, and emerging Chinese competitors and adjunctive CGMs gaining Medicare coverage), pricing pressure from payors and rebates, GLP-1 drugs as a potential competitive and complementary force, and ongoing securities class action and derivative litigation filed in late 2024. The Abbott patent dispute was resolved via a royalty-free cross-license settlement in December 2024, removing a significant overhang.
02—Key points
Key Highlights
- Revenue grew 11% to $4.03 billion, with disposable sensors representing about 95% of revenue, and international sales (28% of total) growing 15%.
- Gross margin compressed about 270 basis points to 60.5% due to rebates, channel and product mix, freight costs, and $43.3 million in inventory-related charges.
- Operating income was nearly flat at $600.0 million as operating expense growth of 9% (R&D up 9%, SG&A up 8%) absorbed most of the gross profit gains.
- Net income rose 6% to $576.2 million; diluted EPS of $1.42 compared with $1.30 in 2023.
- Operating cash flow increased 32% to $989.5 million, while capital expenditures nearly doubled... rising to $358.8 million to fund manufacturing expansion in Malaysia and Ireland.
- Company ended the year with $2.58 billion in cash and short-term securities against $2.46 billion of convertible notes, with $1.2 billion of 2025 Notes due November 2025 classified as current.
- Settled all patent litigation with Abbott on December 20, 2024 via a royalty-free cross-license; securities class action and derivative suits filed in 2024 remain pending.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2024, Dexcom Inc kept $0.14.
- Revenue$4.03B100.0%
- Cost of revenue−$1.59B39.5%
- Gross profit$2.44B60.5%
- Operating costs−$1.84B45.6%
- Operating income$600.0M14.9%
- Interest, other & tax−$23.8M0.6%
- Net income$576.2M14.3%
Where FY2024 revenue went
$4.03B- Cost of revenue: $1.59B, 40% of revenue
- SG&A: $1.29B, 32% of revenue
- Net income: $576.2M, 14% of revenue
- R&D: $552.4M, 14% of revenue
- Interest, other & tax: $23.8M, 0.6% of revenue
Kept 14% as net income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2024filed February 18, 2025Financial Statements
FY2024 against FY2023
| Line item | FY2024FY2023 | Change |
|---|---|---|
| Revenue | $4.03B$3.62B | +11.3% |
| Cost of Revenue | $1.59B$1.33B | +19.6% |
| Gross Profit | $2.44B$2.29B | +6.5% |
| R&D Expenses | $552.40M$505.80M | +9.2% |
| SG&A Expenses | $1.29B$1.19B | +8.5% |
| Operating Expenses | $1.84B$1.69B | +8.7% |
| Operating Income | $600.00M$597.70M | +0.4% |
| Interest Expense | $14.90M$16.40M | −9.1% |
| Net Income | $576.20M$541.50M | +6.4% |
| EPS (Basic) | $1.46$1.40 | +4.3% |
| EPS (Diluted) | $1.42$1.30 | +9.2% |
| Shares Outstanding (Basic) | 393.60M386.00M | +2.0% |
| Shares Outstanding (Diluted) | 412.70M425.50M | −3.0% |
05—Questions
Frequently Asked Questions
How did DexCom's profitability trend in 2024?
Revenue grew faster than gross profit, so gross margin fell to 60.5% from 63.2%. Operating income was roughly flat at $600.0 million because operating expenses rose 9%. Net income increased 6% to $576.2 million, helped by lower income tax expense (effective tax rate fell to about 19% from 24%).
What is driving the risk around G7 supply?
The company disclosed recent manufacturing and inventory challenges for the G7 system that disrupted supply to certain markets, including the U.S. Management cannot predict when these will be fully remedied. Continued shortfalls could reduce sales, market share, and growth prospects, and the company must also scale capacity significantly to meet demand.
How much debt does DexCom have and when is it due?
Convertible senior notes total $2.46 billion principal: $1.21 billion of 0.25% notes due November 2025 and $1.25 billion of 0.375% notes due May 2028. The 2025 Notes are classified as current. The $200 million revolving credit facility was undrawn at year-end and matures in October 2026. The company may settle conversions in cash, shares, or a combination.
What competitive and reimbursement pressures does DexCom face?
Competitors include Abbott (Libre), Medtronic, Roche, and emerging Chinese players. Adjunctive CGMs from competitors now qualify for Medicare coverage following CMS's 2021 rule, and payors are pushing rebates and formulary tiers that pressure pricing. The company also flags GLP-1 drugs as both a companion product and a potential competitive threat.
Is DexCom returning capital to shareholders?
Yes, through buybacks rather than dividends. The company repurchased $750 million of stock under its 2024 program, completed in August 2024, and had no repurchases in the fourth quarter. The company has never paid cash dividends and does not expect to, and its credit agreement restricts dividend payments.
06—Continue