Dexcom Raises Full-Year Margin Guidance as Growth Cools
Dexcom posted 13% revenue growth to $1.308 billion in the second quarter, a step down from 15% in the first quarter, even as profitability guidance moved higher for a second straight period.
Dexcom (DXCM), the maker of continuous glucose monitoring systems, reported second-quarter revenue of $1.308 billion, up 13% from a year earlier. Growth decelerated from 15% in the first quarter and landed roughly in line with the 13% pace posted in the fourth quarter of 2024, extending a trend of slowing top-line expansion even as the company's margins continued to widen.
The deceleration was concentrated overseas. International revenue grew 19% year over year (16% organic) in the second quarter, an acceleration from the prior quarter's step-down but still below the 26% growth (17% organic) Dexcom posted in the first quarter, which stood out as the recent high point. U.S. revenue growth held steady at 11%, matching both the first quarter of 2025 and the fourth quarter of 2024.
Profitability kept expanding even as growth slowed. GAAP operating margin rose 590 basis points year over year to 24.3%, a smaller expansion than the 850-basis-point gain Dexcom reported in the first quarter, and the absolute figure remained below the 25.6% margin posted in the fourth quarter of 2024. Non-GAAP operating margin followed the same pattern, expanding 590 basis points to 25.1%, versus an 840-basis-point gain in the prior quarter. Gross margin provided a steadier signal: GAAP gross margin reached 63.4% and non-GAAP gross margin 64.1%, both up from 62.9% GAAP in each of the two preceding quarters, marking a third consecutive quarter of gross margin at or above 63%.
Non-GAAP diluted earnings per share climbed to $0.70 from $0.68 in the fourth quarter of 2024 and $0.56 in the first quarter of 2025, with year-over-year growth accelerating to 46% from $0.48 a year earlier. That marked a slowdown from the 75% year-over-year EPS growth Dexcom posted in the first quarter, when the prior-year base was lower. A new, material item weighed on the non-GAAP adjustment: a $10.0 million loss from equity investments, sharply higher than the $0.4 million loss recorded in the second quarter of 2024 and equal to the entire six-month 2025 impact disclosed, indicating the drag was concentrated in this quarter alone.
Dexcom raised its full-year 2025 outlook across several lines. Revenue guidance moved to $5.18 billion to $5.25 billion from the $5.16 billion to $5.25 billion range reiterated in the first quarter and initially set in January. Non-GAAP operating margin guidance rose for a second consecutive quarter, to 23.5% to 24% from 23% to 23.5% in the first quarter and an initial 22% to 23% in January. Adjusted EBITDA margin guidance was lifted a third straight time, to 31.5% to 32% from 31% to 31.5%, and non-GAAP gross margin guidance was raised to approximately 64% from the 63% to 64% range previously reiterated.
Cash and marketable securities fell to $1.95 billion at quarter-end from $2.42 billion at the end of the first quarter and $2.00 billion at the end of 2024, even as net income rose, as Dexcom stepped up share repurchases; treasury stock climbed to $2.728 billion from $2.0848 billion at the start of the year.
The quarter also brought two disclosures with no precedent in the prior four releases. Dexcom hosted its 2025 Investor Day and introduced a long-term financial outlook running through 2030. The company also announced positive results from the CONNECT randomized controlled trial, which tested continuous glucose monitor use in non-insulin-treated type 2 diabetics, marking its first clinical trial readout disclosed in a quarterly release.