DXCM · 10-Q · 2026Q3 · Full report

Gross Margin Drivers

DEXCOM INC · 2026-10-29 · Importance 59 · Surprise 48 · No source text

Nine-month gross profit increased $435.5 million, from $2,009.2 million in 2025 to $2,444.7 million in 2026, and third-quarter gross profit increased $133.0 million to $864.4 million. Gross margin improved with higher sales volumes, G7 15 Day benefits, manufacturing efficiencies, higher production volumes, favorable manufacturing mix, and better fixed-cost absorption. Additional quality testing and material validation efforts also contributed to the margin increase. Higher inventory reserves related primarily to the planned G6 manufacturing discontinuation and increased enhanced product replacement program costs partially offset these benefits.

Key facts

• Nine-month 2026 gross profit was $2,444.7 million, compared with $2,009.2 million in the first nine months of 2025, an increase of $435.5 million. source
• Third-quarter 2026 gross profit was $864.4 million, up 18% from the same period in 2025. source
• Third-quarter 2026 gross profit increased due primarily to sales volume, G7 15 Day benefits, improved manufacturing efficiencies, higher production volumes, and a more favorable manufacturing mix that improved fixed-cost absorption. source
• Nine-month 2026 gross-profit and margin growth was driven by sales volume, G7 15 Day benefits, improved manufacturing efficiencies, higher production volumes, and a more favorable manufacturing mix that improved fixed-cost absorption. source
• Third-quarter 2026 gross margin increased due to additional quality testing and material validation efforts relative to the prior year. source

Impact estimates