Release Date: July 30, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- DexCom Inc DXCM reported strong second-quarter 2026 revenue growth of 13% year-over-year, with international revenue growing 19%.
- The company's CONNECT trial for type 2 non-insulin patients showed a 0.9% A1c improvement over the control group, with 97% median CGM usage, strengthening the case for expanded reimbursement.
- Gross margin improved significantly to 64.1% in Q2 2026, up 400 basis points year-over-year, driven by manufacturing efficiencies and the G7 15-day system transition.
- DexCom Inc (DXCM) secured coverage for all people with diabetes across the four largest commercial PBMs, expanding access to over 7 million type 2 non-insulin patients.
- The company raised its full-year 2026 revenue guidance to $5.18-$5.25 billion and increased operating margin guidance to 23.5%-24%, reflecting strong execution and cost discipline.
- DexCom Inc (DXCM) was selected by the FDA for the Tempo digital device pilot, positioning the company to expand into prediabetes screening and metabolic health.
- The G7 15-day system is on track to convert nearly 50% of US customers by year-end, with improving Net Promoter Scores for three consecutive quarters.
- DexCom Inc (DXCM) generated over $600 million in free cash flow in the first half of 2026, more than double the prior year, and repurchased approximately $600 million in stock.
Negative Points
- DexCom Inc (DXCM) faces foreign exchange headwinds, with an expected $15 million impact on international revenue in the second half of 2026.
- The company's international growth faces tougher comparables in Q3 2026, which could moderate growth rates in the near term.
- DexCom Inc (DXCM) anticipates increased operating expenses in Q3 2026 due to hiring and training costs associated with the Ireland manufacturing facility launch.
- The CMS coverage decision for type 2 non-insulin patients is not expected until mid-2027, leaving a significant revenue opportunity delayed.
- International new patient starts declined sequentially in Q2 2026, partly due to tender timing, indicating potential volatility in OUS growth.
- The Nutrasense acquisition is expected to contribute minimal top-line revenue, with non-CGM revenue less than a few million dollars annually.
- DexCom Inc (DXCM) faces ongoing challenges in physician education and awareness regarding existing reimbursement coverage, which could slow adoption.
- The company's gross margin is expected to peak in Q3 2026 and then step down as the Ireland factory begins production, limiting near-term margin expansion.
Q & A Highlights
Q: What were the key drivers behind the strong US new patient starts in Q2, and how sustainable is the double-digit growth in the US CGM market?
A: Jereme Sylvain (CFO) noted that Q2 new patient starts were in line with the record set in Q1, with a sequential uptick in the US. The growth was broad-based across all patient segments, including Type 1, Type 2 intensive, basal, and non-insulin. This was driven by improved customer satisfaction (rising NPS scores for G7 15-day), expanded coverage, and efforts to reduce friction like prior authorizations. Jake Leach (CEO) added that there are still approximately 9 million people in the US with CGM coverage who are not yet using it, providing a robust runway for growth before the anticipated CMS expansion for non-insulin Type 2 patients in mid-2027.
Q: What were the headline results from the CONNECT trial for Type 2 non-insulin patients, and what is the expected timeline for CMS coverage?
A: Jake Leach (CEO) highlighted that the CONNECT trial showed a 1.6% A1c improvement for the CGM group, a 0.9% difference versus control, and over five more hours per day in range. Median CGM usage was 97%, and the largest relative A1c improvement was in the GLP-1-only cohort. The data has been submitted to CMS, and while a decision is expected before the end of 2026, the company's base case assumes coverage takes effect in the middle of 2027. Leach emphasized the data strengthens the case for reimbursement and is being used globally to drive access.
Q: Can you provide an update on the G7 15-day conversion rate and its impact on gross margin?
A: Jereme Sylvain (CFO) stated the transition to G7 15-day is progressing in line with expectations, with the goal of converting nearly 50% of the US customer base by year-end. The margin benefit is starting to contribute in Q2 and will increase in Q3 and Q4 as more patients adopt it. However, the full-year gross margin guidance of ~64% includes a headwind from turning on the new Ireland manufacturing facility in Q3, which will temporarily increase per-unit costs. The underlying efficiency gains from 15-day are expected to be a multi-year tailwind, with a more significant step-up in 2027.
Q: What is the significance of being selected for the FDA's Tempo digital device pilot, and what does it mean for prediabetes?
A: Jake Leach (CEO) explained that Tempo is an innovative regulatory framework that allows for faster market release of digital health technologies under enforcement discretion. For DexCom, it enables quicker innovation on its glucose health program and screening techniques for prediabetes, which has a large undiagnosed population. Leach clarified that Tempo is not directly tied to CMS coverage decisions but is a framework to get technology into users' hands, complementing the broader CMS Access program for early-stage cardiometabolic conditions.
Q: How is the company addressing physician awareness of the existing commercial coverage for Type 2 non-insulin patients?
A: Jereme Sylvain (CFO) detailed that the sales force is using tools like historical claims adjudication by payer to show physicians exactly where coverage exists in their practice. This, combined with the CONNECT study data and the Stelo product for patients without coverage, is helping to educate the hundreds of thousands of prescribers. The team is seeding the message about future CMS coverage while being mindful to communicate that it does not exist yet, using Stelo as an immediate option for those patients.
Q: What is driving the significant operating expense leverage, and is this level sustainable?
A: Jereme Sylvain (CFO) confirmed that the operating leverage is ahead of plan, leading to raised guidance. The leverage is a result of cost discipline and technology investments. However, he cautioned that Q3 will see increased investments in Ireland as the company hires and trains manufacturing staff before production begins, which will temporarily impact margins. The underlying levers for operating leverage are expected to continue contributing over time.
Q: What are the key drivers for sustaining strong international growth in the second half of the year?
A: Jake Leach (CEO) pointed to the significant opportunity as coverage expands, noting that the company is still working through insulin-intensive coverage in several top OUS markets before even addressing basal and non-insulin populations. New tender wins and the launch of products like DexCom Flex in Germany are providing access to new patient populations. Jereme Sylvain (CFO) acknowledged that Q3 comps are tougher internationally but noted that excluding FX, organic growth is less impacted.
Q: Is the timeline for the G8 sensor still on track, and what is the strategic rationale for the NutriSense acquisition?
A: Jake Leach (CEO) confirmed the G8 timeline is intact, with large clinical trials preparing to start. The G8 is expected to be a step-change in accuracy and reliability, is half the size of G7, and is a multi-analyte platform. Regarding NutriSense, Leach explained the acquisition brings CGM-guided nutrition insights and coaching, which will be integrated across the product portfolio to drive engagement and outcomes. Jereme Sylvain (CFO) added that the revenue impact is immaterial, as most of NutriSense's revenue was already CGM pass-through, and the primary value is the technology.
Q: Could CMS coverage for Type 2 non-insulin patients include requirements like A1c verification?
A: Jake Leach (CEO) stated that such requirements are not consistent with his discussions with CMS. He argued that CGM benefits all patients regardless of their starting A1c, and that imposing thresholds would be inconsistent with past CMS decisions and the broad commercial coverage already in place. He believes the CONNECT data will continue to evolve standards of care to recommend CGM for all people with diabetes.
Q: Can you elaborate on the "excellent product performance" mentioned in the prepared remarks?
A: Jake Leach (CEO) attributed the strong performance to rising NPS scores for three consecutive quarters, driven by improvements in the G7 15-day system, including the algorithm, wear time, and customer service. He noted that complaint levels have come down following last year's out-of-box failure challenges. Jereme Sylvain (CFO) added that the improvement is visible in the gross
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
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