DexCom Shares Retreat Despite Stellar Q4 and Full-Year 2025 Preliminary Earnings

DexCom, Inc. (DXCM) delivered impressive preliminary financial results for Q4 and the full year 2025, yet the market’s reaction has been counterintuitive—stock shares have fallen roughly 2.5% following Monday’s announcement. The company will officially unveil fourth-quarter 2025 earnings on Feb. 12, 2026.

The Numbers Behind the Head-Scratcher

According to preliminary figures, DexCom generated approximately $1.26 billion in total revenues for Q4 2025, representing 13% year-over-year growth that surpassed the Zacks Consensus Estimate of $1.25 billion. Breaking down the revenue streams: U.S. operations contributed $892 million (up 11% YoY), while international markets accelerated faster at 18% growth to roughly $368 million.

On a full-year basis, 2025 total revenues reached an estimated $4.66 billion, up 16% compared to 2024—again outpacing the consensus view of $4.64 billion. What’s particularly noteworthy is how the company navigated profitability amid manufacturing headwinds. The adjusted gross profit margin landed at approximately 61%, with adjusted operating margin sitting at 20-21% for the full year.

Where the Margin Story Gets Interesting

Third-quarter operations faced meaningful pressure from elevated scrap rates and freight cost inflation. However, the company has demonstrated operational discipline through expense leverage, which largely neutralized gross margin compression during 2025. Management has signaled that scrap business factors are normalizing, positioning the company to recover toward healthier margin levels.

Beyond near-term scrap rate improvements, DexCom’s long-term profit margin expansion thesis rests on three pillars: manufacturing efficiency gains, lower complaint rates, and the strategic rollout of higher-margin products. The G7 15-day system launch is expected to deliver material margin benefits beginning in 2026 and extending beyond.

Charting 2026: Measured Optimism

For 2026, management projects total revenues of $5.16-$5.25 billion, translating to 11-13% growth over 2025. The adjusted gross profit margin is forecast to improve into the 63-64% range, while adjusted operating margin should reach approximately 22-23%. This guidance assumes continued sensor volume growth driven by rising CGM adoption among the diabetic population, Stelo expansion across broader audiences, sustained international market penetration, and favorable industry tailwinds.

Market Position and Momentum

DexCom wrapped 2025 with solid execution—delivering revenues ahead of guidance while successfully launching its G7 15-day system. The strengthening clinical validation across the continuous glucose monitoring market has reinforced the company’s competitive moat. With improved manufacturing economics and a pipeline of higher-margin innovations, DexCom appears well-positioned to sustain leadership and extend growth momentum into 2026.

Currently, DXCM carries a Zacks Rank #3 (Hold). Over the past three months, shares have gained 3.6% versus the industry’s 6.3% advance and the S&P 500’s 5.2% rise, reflecting a period of relative underperformance despite operational outperformance.