DexCom Stock Up on Q2 Earnings & Revenue Beat, Margins Rise

DexCom, Inc. DXCM reported second-quarter 2026 adjusted earnings per share (EPS) of 70 cents, which beat the Zacks Consensus Estimate of 61 cents by 14.8%. The company reported adjusted EPS of 48 cents per share in the prior-year quarter.

Revenues increased 13.1% year over year to $1.31 billion and surpassed the consensus mark of $1.30 billion by 1.01%.

DXCM registered GAAP net income per share of 64 cents, up from the year-ago quarter's figure of 45 cents.

Following better-than-expected results and raised guidance, shares of DXCM have risen 8.3% in today's pre-market trading. The stock has gained 12.3% in the year-to-date period against an 11.7% decline in the industry. The broader S&P 500 Index increased 6.6% in the same period.Zacks Investment Research

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DXCM's U.S. Business Delivers Solid Growth

U.S. revenues totaled $933.4 million, up 11% from the year-ago quarter. Growth was supported by strong new-patient additions, share capture and a sequential increase in new customer starts.

Management noted that demand remained broad-based across patient categories. Dexcom also highlighted a substantial untapped opportunity, with roughly 9 million people in the United States already covered for continuous glucose monitoring but not yet using the technology.

Dexcom's International Revenues Outpace U.S. Growth

International revenues increased 19% year over year to $375 million. On an organic basis, international sales advanced 16%, benefiting from reimbursement expansion and stronger adoption in markets such as France and Canada.

The company also broadened its overseas product portfolio with the launch of Dexcom Flex in Germany. The 15-day sensor targets basal-insulin users and people with type 2 diabetes not using insulin in selected markets.

Margin Analysis of DXCM

Adjusted gross profit totaled $838.5 million, up 20.6% from the prior-year quarter's level. DexCom reported an adjusted gross margin (as a percentage of revenues) of 64.1%, up 400 basis points year over year.

Research and development expenses totaled $153 million, up 3.2% year over year. Selling, general and administrative expenses totaled $358.7 million, up 9.4% from the year-ago quarter.

The company reported adjusted operating income of $328.3 million, up 48% from the prior-year period's level. Adjusted operating margin (as a percentage of revenues) was 25.1%, up 590 basis points year over year.

Financial Position of Dexcom

DXCM exited the second quarter with cash, cash equivalents and marketable securities worth $1.95 billion compared with $2.42 billion in the first quarter of 2026.

Story Continues

Cumulative cash provided by operating activities at the end of the second quarter of 2026 was $794.8 million compared with $486.8 million a year ago.

The company repurchased approximately $600 million of shares during the quarter under its $1 billion 2026 authorization and completed the acquisition of Nutrisense.

DexCom, Inc. Price, Consensus and EPS SurpriseDexCom, Inc. Price, Consensus and EPS Surprise

DexCom, Inc. price-consensus-eps-surprise-chart | DexCom, Inc. Quote

DXCM Raises 2026 Revenue and Margin Outlook

DXCM now expects 2026 revenues of $5.18-$5.25 billion compared with the previous range of $5.16-$5.25 billion. The updated guidance implies annual growth of 11-13% and reflects stronger organic growth expectations, partly offset by an anticipated $15 million foreign-exchange headwind in the second half.

The company raised its adjusted gross margin forecast to approximately 64% from 63-64%. It also increased adjusted operating margin guidance to 23.5-24% from 23-23.5% and adjusted EBITDA margin guidance to 31.5-32% from 31-31.5%.

Wrapping Up

DexCom exited the second quarter of 2026 on a strong note, supported by solid revenue growth, continued margin expansion and sustained momentum across its CGM portfolio. The company advanced the rollout of the G7 15 Day system, which is now available to all adult G7 customers in the United States following integration for Tandem pump users, including Mobi. DexCom expects to convert nearly half of its U.S. customer base to the extended-wear system by the end of 2026.

The company also achieved an important international milestone as Health Canada cleared G7 15 Day, marking the product's first regulatory approval outside the United States. DexCom plans to launch the system in Canada during the second half of 2026 and expand it into additional international markets over time, supporting broader access and adoption.

DexCom further strengthened its clinical positioning through the CONNECT randomized trial for people with type 2 diabetes not using insulin. Participants using DexCom CGM achieved a 1.6-percentage-point A1C improvement, spent more than five additional hours per day in the target glucose range and recorded median device usage of 97% over 26 weeks. Looking ahead, the company remains focused on expanding access, advancing product innovation and sustaining long-term growth across global CGM markets.

DXCM's Zacks Rank & Other Stocks to Consider

DXCM currently carries a Zacks Rank #2 (Buy).

Some other top-ranked stocks in the broader medical space are McKesson MCK, Phibro Animal Health PAHC andCardinal Health CAH.

McKesson carries a Zacks Rank #2 at present and has an estimated long-term growth rate of 13.7%. MCK's earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 3.09%. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

McKesson's shares have gained 8.8% against the industry's 12.7% decline in the year-to-date period.

Phibro Animal Health, carrying a Zacks Rank of 2 at present, has an estimated long-term growth rate of 21.5%. PAHC's earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 16.25%.

Phibro Animal Health stock has climbed 44.2% against the industry's 17.1% decline in the year-to-date period.

Cardinal Health, carrying a Zacks Rank of 2 at present, has an estimated long-term growth rate of 17%. CAH's earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 10.27%.

Cardinal Health's shares have lost 2.6% compared with the industry's 3.1% decline in the year-to-date period.

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This article originally published on Zacks Investment Research (zacks.com).

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