Dexcom 2025 Q1 Earnings Revenue Growth of 12.5% Despite Net Income Decline

Dexcom (DXCM) reported its fiscal 2025 Q1 earnings on May 01st, 2025. The company achieved a 12.5% increase in total revenue, reaching $1.04 billion, compared to $921 million in the same quarter last year. However, Dexcom's net income declined by 28%, resulting in earnings per share (EPS) of $0.27, down from $0.38 in 2024 Q1. Despite the drop in net income, Dexcom reiterated its 2025 revenue guidance at $4.6 billion, reflecting a 14% growth target. The company maintained its operating margin and adjusted EBITDA margin guidance at approximately 21% and 30%, respectively.

Revenue

Dexcom's revenue saw a 12.5% increase, totaling $1.04 billion in Q1 2025, a significant rise from $921 million in the same period last year. The distributor segment led with revenue of $880 million, while the direct segment contributed $156 million, bringing the total revenue to $1.04 billion.

Earnings/Net Income

Dexcom's earnings per share (EPS) fell 28.9% to $0.27 in Q1 2025 from $0.38 in Q1 2024. The net income decreased 28% to $105.40 million. Despite the revenue growth, the EPS results indicate challenges in maintaining profitability.

Post Earnings Price Action Review

Analysis of post-earnings impact on Dexcom’s stock price reveals varying probabilities of positive returns in different time frames. The 3-day win rate stands at 50%, while the 10-day win rate is 45%, and the 30-day win rate is 55%, suggesting potential short-term gains, particularly within 30 days. Despite this, the maximum return observed over 30 days was modest at 2.45%. This indicates that while there may be opportunities for positive stock movement, the overall gains are generally limited.

CEO Commentary

Kevin Sayer - Executive Chairman, CEO & President: "In Q1 2025, we reported organic revenue growth of 14%, marking our second consecutive quarter of reaccelerating growth. This success stems from strong category demand, access wins, and effective execution by our team. We effectively managed supply dynamics, prioritizing customer care during this transition, with record levels of new customer demand. Our strategic focus includes expanding coverage for type 2 diabetes patients and enhancing our Stelo product. We are optimistic about our positioning and the momentum we've gained, especially with broader coverage anticipated from PBMs, allowing us to strengthen our market presence moving forward."

Guidance

For 2025, Dexcom reiterates its revenue guidance at $4.6 billion, reflecting 14% growth. The company has reduced its non-GAAP gross profit margin guidance to approximately 62%, while maintaining operating margin and adjusted EBITDA margin guidance at around 21% and 30%, respectively. The adjustments consider supply dynamics, increased freight costs, and inflationary pressures from tariffs, with expectations for these impacts to moderate over the year as inventory levels normalize.

Additional News

Dexcom recently announced the FDA clearance of its Dexcom G7 15 Day Continuous Glucose Monitoring System, marking a significant innovation in the diabetes care sector. This new system, cleared for use by individuals aged 18 and above, promises extended wear and improved accuracy, setting a new standard in CGM technology. Additionally, Dexcom has expanded Stelo's distribution footprint by launching on the Amazon storefront, enhancing accessibility for consumers. In conjunction with its strong financial results, Dexcom has initiated a $750 million share repurchase program, demonstrating confidence in its market position and future growth prospects.