10-K – 2026-02-12 – dxcm-20251231.htm

Terms of the Amended Credit Agreement
In June 2023, we entered into the First Amendment to the Second Amended and Restated Credit Agreement, as amended, or the Amended Credit Agreement, which we had previously entered into in October 2021. The Amended Credit Agreement is a five-year revolving credit facility, or the Credit Facility, that provides for an available principal amount of $ 200.0 million which can be increased up to $ 500.0 million at our option subject to customary conditions and approval of our lenders. The Amended Credit Agreement will mature on October 13, 2026. Borrowings under the Amended Credit Agreement are available for general corporate purposes, including working capital and capital expenditures.
The following table sets forth information related to availability and outstanding borrowings on our Amended Credit Agreement as of December 31, 2025:

(In millions)
Available principal amount $ 200.0  
Letters of credit sub-facility 25.0  
Outstanding borrowings —  
Outstanding letters of credit 7.9  
Total available balance $ 192.1  

Revolving loans under the Amended Credit Agreement bear interest at our choice of one of three base rates plus a range of applicable rates that are based on our leverage ratio. The minimum and maximum range of applicable rates per annum with respect to any ABR Loan, Term Benchmark Revolving Loan, or RFR Revolving Loan, each as defined in the Amended Credit Agreement under the captions “ABR Spread”, “Term Benchmark”, and “RFR Spread”, or “Unused Commitment Fee Rate”, respectively, are outlined in the following table:

Range ABR Spread Term Benchmark/RFR Spread Unused Commitment Fee Rate
Minimum 0.375 %
1.375 %
0.175 %

Maximum 1.000 %
2.000 %
0.250 %

Our obligations under the Amended Credit Agreement are guaranteed by our existing and future wholly-owned domestic subsidiaries, and are secured by a first-priority security interest in substantially all of the assets of Dexcom and the guarantors, including all or a portion of the equity interests of our domestic subsidiaries and first-tier foreign subsidiaries but excluding real property and intellectual property (which is subject to a negative pledge). The Amended Credit Agreement contains covenants that limit certain indebtedness, liens, investments, transactions with affiliates, dividends and other restricted payments, subordinated indebtedness and amendments to subordinated indebtedness documents, and sale and leaseback transactions of Dexcom or any of its domestic subsidiaries. The Amended Credit Agreement also requires us to maintain a maximum leverage ratio and a minimum fixed charge coverage ratio. We were in compliance with these covenants as of December 31, 2025.
As of December 31, 2025, we have other guarantee facilities related to certain international operations that are partially collateralized, which are included in non-current “Other assets” on our consolidated balance sheets. These facilities are not significant to the consolidated financial statements.
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5. Leases and Other Commitments

Leases

We have leases for certain machinery and facilities, including office, manufacturing and warehouse space facilities under various domestic and international operating and finance lease arrangements. We also have land leases in Penang, Malaysia that expire through 2082 and in Athenry, Ireland that expire in 3023 for the build-out of our international manufacturing facilities. Our leases, excluding our land leases in Malaysia and Ireland, have remaining lease terms of up to fifteen years . Some of the leases include one or more options to extend the leases for up to five years per option. Our lease terms include options to extend or terminate the lease when it is reasonably certain that we will exercise that option.
The following table sets forth the maturities of our operating and finance lease liabilities as of December 31, 2025:

(In millions) Operating Leases (1)
Finance Leases
2026 $ 25.9   $ 9.7  
2027 21.4   7.8  
2028 16.5   5.8  
2029 9.9   5.5  
2030 9.0   5.7  
Thereafter 28.9   48.9  
Total future lease cost 111.6   83.4  
Less: Imputed interest ( 16.6 ) ( 22.9 )
Present value of future payments 95.0   60.5  
Less: Current portion ( 21.6 ) ( 6.7 )
Long-term portion $ 73.4   $ 53.8  

(1) Total future lease cost excludes $ 9.3 million of legally binding minimum lease payments for leases signed but not yet commenced.

Certain lease agreements require us to return designated areas of leased space to its original condition upon termination of the lease agreement, for which we record an asset retirement obligation and a corresponding capital asset in an amount equal to the estimated fair value of the obligation. In subsequent periods, the asset retirement obligation is accreted for the change in its present value and the capitalized asset is depreciated, both over the term of the associated lease agreement. Asset retirement obligations of $ 20.6  million and $ 17.0  million as of December 31, 2025 and 2024, respectively, are included in other long-term liabilities in our consolidated balance sheets.
The components of lease expense were as follows:

Twelve Months Ended
December 31,
(In millions) 2025 2024 2023
Finance lease cost:
Amortization of finance leases
$ 8.3   $ 7.2   $ 6.5  
Interest on lease liabilities 3.3   3.4   3.2  
Operating lease cost 21.5   22.4   22.9  

Short-term lease cost 5.1   3.8   2.4  
Variable lease cost 8.4   9.0   8.3  
Total lease cost $ 46.6   $ 45.8   $ 43.3  

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Other information related to our leases is as follows:

Twelve Months Ended
December 31,
(Dollars in millions) 2025 2024 2023
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases $ 28.6   $ 27.5   $ 28.1  
Operating cash flows from finance leases 3.3   3.4   3.2  
Financing cash flows from finance leases 6.9   13.0   4.7  
Right-of-use assets obtained in exchange for lease liabilities:
Operating leases 30.4   8.8   7.5  
Finance leases $ 2.4   $ 14.6   $ 4.2  
Weighted average remaining lease term:
Operating leases 5.9 years 4.2 years 5.0 years
Finance leases 12.0 years 12.6 years 14.1 years
Weighted average discount rate:
Operating leases 5.4   % 6.1   % 6.1   %
Finance leases 5.3   % 5.4   % 5.3   %

Amortization of operating lease right-of-use asset included in cash flows from operating activities in our consolidated statements of cash flows was $ 16.7 million, $ 16.7 million, and $ 16.5 million for the twelve months ended December 31, 2025, 2024 and 2023, respectively.

Purchase Commitments

We are party to various purchase arrangements related to our operational, manufacturing, and research and development activities. We had approximately $ 1.25 billion and $ 954.9 million of open purchase orders and other contractual obligations in the ordinary course of business, the majority of which are due within one year , as of December 31, 2025 and December 31, 2024, respectively.
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6. Contingencies

Litigation

We are subject to various claims, complaints and legal actions that arise from time to time in the normal course of business, including commercial insurance, product liability, intellectual property and employment related matters. In addition, from time to time we may bring claims or initiate lawsuits against various third parties with respect to matters arising out of the ordinary course of our business, including commercial and employment related matters.
Due to uncertainty surrounding the securities class action litigation, the derivative actions, and the G6 and G7 Class Action Litigation we are unable to reasonably estimate the ultimate outcome of any of the litigation matters at this time. We intend to defend against these claims vigorously in all of these actions.
We do not believe we are party to any other currently pending legal proceedings, the outcome of which could have a material adverse effect on our business, financial condition, or results of operations. There can be no assurance that existing or future legal proceedings arising in the ordinary course of business or otherwise will not have a material adverse effect on our business, financial condition, or results of operations.
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7. Income Taxes

Income (loss) before income taxes subject to taxes in the following jurisdictions is as follows:

Twelve Months Ended
December 31,
(In millions) 2025 2024 2023
United States $ 961.4   $ 659.8   $ 732.4  
Outside of the United States 127.0   49.2   ( 22.0 )
Total $ 1,088.4   $ 709.0   $ 710.4  

Significant components of the provision for income taxes are as follows:

Twelve Months Ended
December 31,
(In millions) 2025 2024 2023
Current:
Federal $ 37.1   $ 157.4   $ 149.1  
State 7.1   16.5   18.1  
Foreign 25.7   2.7   56.7  
Total current income taxes 69.9   176.6   223.9  
Deferred:
Federal 169.7   ( 55.2 ) ( 93.7 )
State 16.0   ( 2.0 ) 14.6  
Foreign ( 3.5 ) 13.4   24.1  
Total deferred income taxes 182.2   ( 43.8 ) ( 55.0 )
Total $ 252.1   $ 132.8   $ 168.9  

Income taxes paid are as follows:

Twelve Months Ended
December 31,
(In millions) 2025
Federal
$ 68.0  
State
10.6  
Foreign
15.8  
Total
$ 94.4  

Significant loss and tax credit carryforwards and years of expiration are as follows:

December 31, Year of Expiration
(In millions) 2025 2024
Net operating loss:
Federal $ 3.8   $ 12.1   2028
California 162.0   162.0   2037
Other states 5.1   5.8   2028

Tax credits:
Federal

Foreign tax credits 1.2   0.1   2032
California R&D credits 134.6   124.9   Indefinite
California AMT Credits $ 0.5   $ 0.5   Indefinite

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Utilization of net operating losses and credit carryforwards is subject to an annual limitation due to ownership change limitations provided by Section 382 and 383 of the Internal Revenue Code of 1986, as amended, and similar state provisions. An ownership change limitation occurred in February 2009 resulting in an immaterial amount of U.S. research and development tax credits that will expire unused, and therefore, are not reflected in the credit carryforwards above or in the related deferred tax assets in the table below.
Significant components of our deferred tax assets and liabilities as of December 31, 2025 and 2024 are shown below. Significant judgment is required to evaluate the need for a valuation allowance against deferred tax assets. We review all available positive and negative evidence, including projections of pre-tax book income, earnings history, reliability of forecasting, and reversal of temporary differences. A valuation allowance is established when it is more likely than not that some or all of the deferred tax assets will not be realized. Realization of deferred tax assets is dependent upon future earnings in applicable tax jurisdictions.

December 31,
(In millions) 2025 2024
Deferred tax assets:
Net operating loss carryforwards $ 12.6   $ 14.4  
Capitalized research and development expenses 103.6   265.0  
Tax credits 85.6   79.2  
Share-based compensation 20.6   22.5  
Fixed and intangible assets 187.3   263.6  
Accrued liabilities and reserves 86.8   87.4  
Convertible debt 11.3   16.0  

Total gross deferred tax assets 507.8   748.1  
Less: valuation allowance ( 160.7 ) ( 221.9 )
Total net deferred tax assets 347.1   526.2  
Deferred tax liabilities:
Fixed assets and acquired intangibles assets ( 45.8 ) ( 59.3 )
Net unrealized gain on equity investments
( 18.4 ) —  
Other —   ( 0.3 )
Total deferred tax liabilities ( 64.2 ) ( 59.6 )
Net deferred tax assets (liabilities) $ 282.9   $ 466.6  

We maintain a valuation allowance of $ 160.7 million against our California research and development tax credits, foreign tax credits, and certain foreign intangible assets. During the year ended December 31, 2025, the valuation allowance decreased by $ 61.2 million primarily in connection with the intra-entity transfer of certain intellectual property and the generation of California research and development tax credits.
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The reconciliation between our effective tax rate on income from continuing operations and the statutory rate, after the adoption of ASU 2023-09 on a prospective basis, is as follows:

Twelve Months Ended
December 31,
(In millions) 2025

U.S. Federal Statutory Rate $ 228.6   21.0   %
Increase (Decrease) Resulting From:
State and Local Income Tax, Net of Federal Income Tax Effect 16.4   1.5   %

Foreign Tax Effects
Ireland

Change in Rate
63.6   5.8   %
Change in Valuation Allowance
( 74.5 ) ( 6.8 ) %
Other 5.8   0.5   %
Malaysia

Foreign rate differential
( 14.8 ) ( 1.4 ) %
Other
8.9   0.8   %
Other foreign jurisdictions
6.7   0.6   %

Effect of Cross-Border Taxes
3.0   0.3   %

Tax Credits
Research and development credits
( 13.6 ) ( 1.2 ) %

Changes in Valuation Allowance 0.4   —   %

Nontaxable or Nondeductible Items
Stock and officers compensation 16.1   1.5   %
Other 2.5   0.2   %

Changes in Unrecognized Tax Benefits 4.4   0.4   %

Other ( 1.4 ) ( 0.1 ) %

Total $ 252.1   23.2   %

State taxes in Colorado and Florida made up the majority (greater than 50%) of the tax effect in the state and local income tax category.
The reconciliation between our effective tax rate on income from continuing operations and the statutory rate for prior years not impacted by the adoption of ASU 2023-09 is as follows:

Twelve Months Ended
December 31,
(In millions) 2024 2023
U.S. federal statutory tax rate $ 148.9   $ 149.2  
State income tax, net of federal benefit 10.2   7.8  
Permanent items 10.5   ( 2.7 )
Research and development credits ( 24.6 ) ( 28.3 )
Foreign tax credit ( 1.2 ) —  
Foreign rate differential 1.6   15.8  
Stock and officers compensation 3.8   5.6  
Collaboration agreement milestone share-based payment ( 32.2 ) ( 72.1 )
Change in statutory tax rates 51.5   19.4  
Intellectual property transfer —   63.9  
Other 6.7   0.3  
Change in valuation allowance ( 42.4 ) 10.0  
Income taxes at effective rates $ 132.8   $ 168.9  

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The following table summarizes the activity related to our gross unrecognized tax benefits:

(In millions)
Balance at January 1, 2023
$ 52.0  
Increases related to prior year tax positions
0.8  
Increases related to current year tax positions
6.6  
Balance at December 31, 2023 59.4  
Increases related to prior year tax positions
0.1  
Increases related to current year tax positions
6.7  
Balance at December 31, 2024 66.2  
Increases related to prior year tax positions
0.2  
Increases related to current year tax positions
5.7  
Decreases related to prior year tax positions
( 3.0 )
Balance at December 31, 2025 $ 69.1  

Of the total unrecognized tax benefits at December 31, 2025, 2024, and 2023, $ 40.8 million, $ 40.7  million and $ 37.0  million, respectively, would affect our annual effective tax rate if recognized. The indirect effect of the unrecognized tax benefits that, if recognized, would affect our annual effective tax rate is not material for all years presented. Also, the amount of unrecognized tax benefits that, if recognized, would result in adjustments to other tax accounts, is not material for all years presented. Interest and penalties are classified as a component of income tax expense and are not material for all years presented.
Due to our global business activities, we file income tax returns and are subject to routine compliance audits in numerous jurisdictions, including those material jurisdictions listed in the following table. The U.S. net operating losses generated since 2007 and utilized in recent years are open for examination. The years remaining subject to audit, by major jurisdiction, are as follows:

Jurisdiction Fiscal Year
United States (Federal and state) 2007 - 2025

United Kingdom 2022 - 2025

Malaysia 2020 - 2025

Ireland 2023 - 2025

We currently operate under a Special Corporate Income Tax Preferential rate in the Philippines, which is in effect through 2031. The prior tax holiday ended in 2023. The impact of both the tax holiday and preferential rate is immaterial for all years presented. We have been granted a tax incentive by the Malaysian Investment Development Authority (MIDA) in Malaysia, which provides for a 0% tax holiday of up to 15 years based on our ability to meet certain conditions. The tax incentive had no effect on foreign taxes during 2023. In July 2025, the Malaysia Investment Development Authority, or MIDA, certified our achievement of the milestones and conditions related to our Malaysia income tax holiday. We have recorded a tax benefit related to the retroactive application of the tax holiday back to January 1, 2024.
We assert that any foreign earnings will be indefinitely reinvested, and accordingly, we have not recorded a liability for taxes associated with these undistributed earnings. If we determine that all or a portion of such foreign earnings are no longer indefinitely reinvested, we may be subject to additional foreign withholding taxes and U.S. state income taxes.
On July 4, 2025, the One Big Beautiful Bill Act, or OBBBA, was signed into law in the U.S., and includes a broad range of tax reform provisions which did not have a significant impact to the effective tax rate. The primary impact of this legislation is a reduction in our U.S. income tax liability and deferred tax asset related to the ability to currently deduct U.S.-based research expenses against U.S. income.
The Organization for Economic Co-operation and Development’s, or OECD, Pillar Two Initiative introduced a 15% global minimum tax for certain multinational groups exceeding minimum annual global revenue thresholds. As of December 31, 2025, the global minimum tax rules enacted in countries in which we operate, including the transitional safe harbor provisions, does not have a material impact on our consolidated financial statements.
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8. Employee Benefit Plans and Stockholders’ Equity

Defined Contribution Plans
We offer various defined contribution plans for U.S. and international employees. The largest defined contribution plan is the 401(k) retirement plan (the 401(k) Plan) covering substantially all employees in the United States that meet certain age requirements. Employees who participate in the 401(k) Plan may contribute up to 90 % of their compensation each year, subject to Internal Revenue Service limitations and the terms and conditions of the plan. Under the terms of the 401(k) Plan, we may elect to match a discretionary percentage of contributions. We match 50 % of contributions up to 6 % of eligible compensation. Total matching contributions under the 401(k) Plan were $ 17.2 million, $ 17.6 million and $ 14.9  million for the twelve months ended December 31, 2025, 2024 and 2023, respectively. Our contributions for other defined contribution plans are not significant for the twelve months ended December 31, 2025, 2024 and 2023.

Employee Stock Purchase Plan (“ESPP”)
The Amended and Restated 2015 Employee Stock Purchase Plan, “A&R 2015 ESPP”, amended and restated in May 2025, permits eligible employees to purchase shares of our common stock at semi-annual intervals through periodic payroll deductions during defined Offering Periods. Payroll deductions may not exceed 15 % of the participant’s cash compensation subject to certain limitations, and the purchase price will be 85 % of the lower of the fair market value of the common stock at either the beginning of the applicable Offering Period or the Purchase Date.
A total of 14.0 million shares of common stock are authorized for issuance under the A&R 2015 ESPP, which includes an additional 8.0  million shares approved by stockholders in May 2025. We issued approximately 0.4 million, 0.4 million and 0.3 million shares of common stock under the A&R 2015 ESPP during the twelve months ended December 31, 2025, 2024 and 2023, respectively. As of December 31, 2025, approximately 9.7 million shares remained available for future issuance under the A&R 2015 ESPP.

Equity Incentive Plans
The Amended and Restated 2015 Equity Incentive Plan, “Amended A&R 2015 EIP”, amended and restated in May 2025, provides for the grant of incentive and nonstatutory stock options, restricted stock, stock bonuses, stock appreciation rights, RSUs, and PSUs to employees, directors or consultants of the Company.
A total of 42.6 million shares of common stock are authorized for issuance under the Amended A&R 2015 EIP, which includes an additional 3.4  million shares approved by stockholders in May 2025. As of December 31, 2025, approximately 14.1 million shares remained available for future issuance under the Amended A&R 2015 EIP.
RSU awards typically vest in annual installments over three or four years and vesting is subject to continued service. PSUs are granted to a group of senior officers and the number of shares of our common stock to be received at vesting will range from 0 % to 200 % of the target award based on the achievement of pre-established performance and market goals. PSUs vest approximately three years from the date of grant, subject to continued employment through that date and certification by the Compensation Committee. We issue new shares of common stock to satisfy RSU and PSU vestings.

Share Repurchase Program and Treasury Shares
Repurchased shares of our common stock are held as treasury shares until they are reissued or retired. When we reissue treasury stock, if the proceeds from the sale are more than the average price we paid to acquire the shares we record an increase in additional paid-in capital. Conversely, if the proceeds from the sale are less than the average price we paid to acquire the shares, we record a decrease in additional paid-in capital to the extent of increases previously recorded for similar transactions and a decrease in retained earnings for any remaining amount.
We have not yet determined the ultimate disposition of repurchased shares and consequently we continue to hold them as treasury shares rather than retiring them. Authorization of future stock repurchase programs is subject to the final determination of our Board of Directors.
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The following table summarizes our treasury share activity:

Twelve Months Ended
December 31,
(In millions) 2025 2024 2023

Shares received from Note Hedge — — 12.2
Shares issued in connection with the Restated Collaboration Agreement — ( 1.5 ) ( 3.7 )
Shares repurchased under share repurchase programs
7.7 10.4 4.7
Shares repurchased with 2028 Notes proceeds — — 1.6
Shares issued in connection with 2023 Warrants — ( 12.5 ) —

2025 Share Repurchase Program
In April 2025, our Board of Directors authorized and approved a share repurchase program of up to $ 750.0 million of our outstanding common stock, with a repurchase period ending no later than June 30, 2026, or the 2025 Share Repurchase Program. Repurchases of our common stock under the 2025 Share Repurchase Program may be made from time to time in the open market, in privately negotiated transactions or by other methods, including through the use of trading plans intended to qualify under Rule 10b5-1 under the Securities Exchange Act of 1934, as amended, or the Exchange Act, at our discretion, and in accordance with the limitations set forth in Rule 10b-18 promulgated under the Exchange Act and other applicable federal and state laws and regulations. The timing of any repurchases will depend on market conditions and will be made at our discretion. The 2025 Share Repurchase Program does not obligate us to repurchase any dollar amount or number of shares of our common stock, and the program may be extended, modified, suspended, or discontinued at any time.
For the twelve months ended months ended December 31, 2025, we repurchased 7.7 million shares of our common stock for $ 500.0 million under the 2025 Share Repurchase Program.
2024 Share Repurchase Program
In July 2024, our Board of Directors authorized and approved a share repurchase program of up to $ 750.0 million of our outstanding common stock, with a repurchase period ending no later than June 30, 2025 (the “2024 Share Repurchase Program”). Repurchases of our common stock under the 2024 Share Repurchase Program were permitted to be made from time to time in the open market, in privately negotiated transactions or by other methods, including through the use of trading plans intended to qualify under Rule 10b5-1 under the Exchange Act, at our discretion, and in accordance with the limitations set forth in Rule 10b-18 promulgated under the Exchange Act and other applicable federal and state laws and regulations. The 2024 Share Repurchase Program was completed in August 2024. We repurchased 10.4 million shares of our common stock for $ 750.0 million under the 2024 Share Repurchase Program.
2023 Share Repurchase Program
In October 2023, our Board of Directors authorized and approved a share repurchase program of up to $ 500.0 million of our outstanding common stock, with a repurchase period ending no later than October 31, 2024 (the “2023 Share Repurchase Program”). On October 31, 2023, we entered into an accelerated share repurchase agreement (“2023 ASR”) with Bank of America, N.A. to repurchase $ 500.0 million of our common stock. The final notional amount under the 2023 ASR was $ 500.0 million or approximately 4.7 million shares of our common stock based on the daily average volume-weighted average price of our common stock during the term of the 2023 ASR, less a discount. The 2023 ASR concluded on December 14, 2023. The 2023 Share Repurchase Program was completed in December 2023.
The 2023 ASR was a forward contract indexed to our own common stock. The forward contracts met all of the applicable criteria for equity classification, so we did not account for them as a derivative instrument. We have reflected the shares delivered to us by the financial institution as treasury shares as of the dates they were delivered to us in computing weighted average shares outstanding for both basic and diluted net income per share.
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Equity Award Activity
A summary of RSU and PSU activity under the Amended A&R 2015 EIP is as follows:

Nonvested RSU and PSU Activity
(In millions, except weighted average grant date fair value) Shares Available for Grant Shares Weighted 
Average
Grant Date
Fair Value Aggregate
Intrinsic Value
Balance at December 31, 2022 15.3   2.9   $ 94.08  

Granted ( 1.6 ) 1.6   112.01  
Vested —   ( 1.4 ) 88.57  
Forfeited 0.2   ( 0.2 ) 106.34  
Balance at December 31, 2023 13.9   2.9   105.98   $ 361.2  

Granted ( 1.7 ) 1.7   131.17  
Vested —   ( 1.3 ) 102.09  
Forfeited 0.3   ( 0.3 ) 115.59  
Balance at December 31, 2024 12.5   3.0   121.17   234.1  
Additional shares authorized 3.4   —   —  
Granted ( 2.5 ) 2.5   78.75  
Vested —   ( 1.4 ) 114.95  
Forfeited 0.7   ( 0.7 ) 113.04  
Balance at December 31, 2025 14.1   3.4   $ 94.48   $ 226.3  

The total vest-date fair value of RSUs and PSUs that vested during the twelve months ended December 31, 2025, 2024 and 2023 was $ 106.1 million, $ 174.5 million and $ 157.8 million, respectively. As of December 31, 2025, 3.1 million unvested RSUs and 0.3 million unvested PSUs were outstanding under the Amended A&R 2015 EIP.

Share-Based Compensation
Our share-based compensation expense is associated with RSUs, PSUs, and ESPP. The following table summarizes our share-based compensation expense included in our consolidated statements of operations:

Twelve Months Ended
December 31,
(In millions) 2025 2024 2023
Cost of sales $ 10.9   $ 14.4   $ 14.6  
Research and development 49.2   52.2   45.5  
Selling, general and administrative 99.5   103.8   90.7  
Total share-based compensation expense $ 159.6   $ 170.4   $ 150.8  

Total tax benefit related to share-based compensation expense $ 24.9   $ 43.8   $ 40.0  

As of December 31, 2025, unrecognized estimated compensation costs related to RSUs and PSUs totaled $ 190.7 million and are expected to be recognized over a weighted-average period of approximately 1.7 years.
We value RSUs at the date of grant using the intrinsic value method. We estimate the fair value of PSUs at the date of grant using the intrinsic value method and the probability that the specified performance criteria will be met. We estimate the fair value of ESPP purchase rights on the date of grant using the Black-Scholes option pricing model and the assumptions below:
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Twelve Months Ended
December 31,
2025 2024 2023
Risk free interest rate 3.99 % - 4.31 %
4.80 % - 5.27 %
5.20 % - 5.47 %

Dividend yield —   % —   % —   %
Expected volatility of Dexcom common stock
32 % - 48 %
42 % - 85 %
34 % - 48 %

Expected life (in years) 0.5 0.5 0.5

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9. Business Segment and Geographic Information

We manage our business on a global consolidated basis within one operating and one reportable segment, which is consistent with how our chief operating decision maker (CODM) reviews our business, makes investment and resource allocation decisions, and assesses operating performance. The majority of our revenue is generated in the United States. Our reportable segment derives revenues from the sale of disposable sensors and our Reusable Hardware. Effective September 14, 2025 through December 31, 2025, our President and Chief Operating Officer, assumed the role of interim principal executive officer and CODM. This did not result in a change to our segments.
The measures of segment profit or loss that are most consistent with U.S. GAAP used by the CODM to assess performance and allocate resources are operating income and net income. Our CODM also reviews total assets, as reported on our consolidated balance sheets, and purchases of property and equipment, as reported on our consolidated statements of cash flows.
Our CODM uses operating income and net income to evaluate income generated from segment assets (return on assets) in deciding whether to reinvest profits into the Company, monitor budget versus actual results, acquire companies, or invest in other companies.
The following table sets forth our segment information for revenue, measures of segment profit or loss, and significant expenses:

Twelve Months Ended
December 31,
(In millions) 2025 2024 2023
Revenue $ 4,662.0   $ 4,033.0   $ 3,622.3  
Less:
Cost of sales (1)
1,860.1   1,594.8   1,333.4  
Payroll related expenses 885.0   767.1   726.9  
Stock-based compensation expense 148.7   156.0   136.2  
Marketing expense 310.3   298.7   264.6  
Travel related expenses 64.4   64.8   55.3  
Supply expenses and clinical trials 61.6   64.5   46.5  
Consulting & professional fees 139.0   227.8   222.2  
Equipment, office & facility expenses 92.2   83.8   84.7  
IT software and data 144.3   130.6   106.6  
Depreciation and amortization 39.5   39.9   41.9  
Other segment items (2)
5.1   5.0   6.3  
Operating income 911.8   600.0   597.7  
Other income, net
176.6   109.0   112.7  
Income tax expense 252.1   132.8   168.9  
Net income $ 836.3   $ 576.2   $ 541.5  

(1) Includes amounts stated in other significant expense captions.

(2) Other segment items are primarily composed of impairment of assets and bad debt expense.

Twelve Months Ended
December 31,
(In millions) 2025 2024 2023
Other segment disclosures
Depreciation and amortization (1)
$ 251.8   $ 217.7   $ 186.0  
Expenditures for long-lived assets $ 363.5   $ 358.8   $ 236.6  
Significant noncash items other than depreciation and amortization expense:
Deferred income tax expense (benefit) $ 182.2   $ ( 43.8 ) $ ( 55.0 )
Net (gains) losses on equity investments $ ( 78.1 ) $ 1.4   $ ( 1.9 )

(1) Includes depreciation and amortization recorded in both cost of sales and operating expenses.

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See Note 3 “ Balance Sheet Details and Other Financial Information—Other Income, Net ” for information about our interest income and interest expense.
See Note 8 “ Employee Benefit Plans and Stockholders’ Equity—Share-Based Compensation ” for information about our share-based compensation expense.

Disaggregation of Revenue
We disaggregate revenue by major sales channel and by geographic region. We have determined that disaggregating revenue into these categories achieves the ASC Topic 606 disclosure objectives of depicting how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors.
See Note 1 “ Organization and Significant Accounting Policies—Concentration of Credit Risk and Significant Customers ” for information about our major customers that represent 10% or more of our total revenue.

Revenue by Customer Sales Channel and Geographic Region
We sell our CGM systems through a direct sales organization and through distribution arrangements that allow distributors to sell our products. We also disaggregate our revenue by our two primary geographical markets, the United States and International, based on the geographic location to which we deliver the components.
The following table presents our revenue disaggregated by major sales channel and geographic region:

Twelve Months Ended December 31,

2025 2024 2023
(In millions) United States
International Total United States International Total United States International Total
Distributor $ 3,195.7   $ 763.3   $ 3,959.0   $ 2,824.4   $ 605.7   $ 3,430.1   $ 2,587.2   $ 508.4   $ 3,095.6  
Direct 139.2   563.8   703.0   65.4   537.5   602.9   38.1   488.6   526.7  
Total revenue $ 3,334.9   $ 1,327.1   $ 4,662.0   $ 2,889.8   $ 1,143.2   $ 4,033.0   $ 2,625.3   $ 997.0   $ 3,622.3  

During the twelve months ended December 31, 2025, 2024 and 2023, no individual country outside the United States generated revenue that represented more than 10% of our total revenue.

Long-Lived Assets by Geographic Region
The following table presents our long-lived assets, which consists of property and equipment, net, and operating lease right-of-use assets by geographic region:

December 31,
(In millions) 2025 2024
Ireland
$ 438.8   $ 185.7  
Malaysia 684.4   632.1  
United States 406.1   464.6  
Other countries
108.0   120.3  
Total long-lived assets $ 1,637.3   $ 1,402.7  

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DexCom, Inc.

SCHEDULE II – VALUATION AND QUALIFYING ACCOUNTS

(In millions)

Twelve Months Ended
December 31,
Allowance for doubtful accounts 2025 2024 2023
Beginning Balance $ 9.2   $ 9.3   $ 7.3  
Provision for doubtful accounts 3.3   ( 0.1 ) 2.0  
Write-offs and adjustments —   —   —  
Recoveries —   —   —  
Ending Balance $ 12.5   $ 9.2   $ 9.3  

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