Will DXCM Deliver Q4 Earnings Beat on G7 Stabilization, Volume Growth?

DexCom, Inc. DXCM is scheduled to report fourth-quarter 2025 results on Feb. 12, after the closing bell.

In the last reported quarter, the company’s adjusted earnings per share (EPS) of 61 cents surpassed the Zacks Consensus Estimate by 7%.

Let us check out the factors that might have shaped DXCM’s performance prior to the announcement.

DXCM’s Q4 Estimates

The Zacks Consensus Estimate for revenues is pegged at $1.25 billion, indicating an increase of 12.4% from the prior-year quarter’s level. The consensus mark for earnings is pinned at 65 cents, indicating growth 44.4% year over year.

For the fourth quarter of 2025, DexCom anticipates a sequential improvement in performance, supported by easing G7 deployment issues, improving supply chain stability, and a rebound in U.S. new customer starts.

DXCM’s Strong Preliminary Q4 Results

On Jan. 12, DexCom reported strong preliminary results for the fourth quarter.

Per the preliminary report, DexCom expects fourth-quarter 2025 total revenues of approximately $1.26 billion, up 13% from the same period in 2024. U.S. revenues are projected to be $892 million, suggesting 11% growth year over year, while international revenues are expected to rise 18% to around $368 million.

Factors to Note Before DXCM’s Q4 Earnings Report

Normalization in G7 Performance and New Customer Starts

One of the most critical factors shaping DexCom’s fourth-quarter performance is likely to be the recovery in new customer starts following the G7 deployment and quality-related disruptions seen earlier in 2025.

Management acknowledged that third-quarter new starts were slightly below record levels due to sensor deployment issues, but noted that these challenges have largely been addressed. With improved sensor performance reaching physician offices, replenished educational samples, and more constructive field feedback, new-start momentum in the United States is likely to have improved in the fourth quarter, with management signaling a return toward record levels.

Gross Margin Trajectory as Supply Chain Pressures Ease

Another key factor influencing the fourth quarter results is likely to be the direction of gross margins as temporary manufacturing and logistics headwinds begin to ease. In the third quarter, margins were pressured by elevated scrap rates tied to heightened quality controls and higher freight costs. Management indicated that both factors improved sequentially from the second quarter and are expected to improve further in the fourth quarter as scrap rates decline and shipping transitions back toward more cost-efficient ocean freight.

While margins are unlikely to fully normalize until 2026, the fourth-quarter results are likely to reflect incremental improvement, making margin progression an important area to monitor.

International Momentum and Broader Type 2 Adoption

DXCM’s fourth-quarter earnings performance is also likely to have been shaped by sustained international momentum and continued adoption across the type 2 diabetes population. Third-quarter results showed accelerating international growth, supported by recent coverage expansions in markets such as France and Canada.

At the same time, broader access among type 2 basal and non-insulin users continued to diversify new customer additions. Management highlighted that utilization rates remain solid across these cohorts and that existing coverage alone provides a meaningful growth runway. The company’s ability to convert this access into incremental volume in the fourth quarter is likely to have played a meaningful role in shaping the earnings outcome.

Seasonality and Exit-Rate Signals Heading Into 2026

Another factor investors are likely to focus on in the fourth quarter earnings is the underlying exit-rate trajectory after adjusting for normalizing seasonality. Management highlighted that DexCom’s business has been undergoing a structural shift in seasonal patterns, with the fourth quarter now contributing a smaller share of full-year revenues while the first quarter increasingly benefits from stronger seasonality.

As a result, headline fourth-quarter growth may appear more modest on a two-year stack basis, even if underlying patient growth remains solid. Investors are therefore likely to look beyond reported growth rates and focus on trends in user growth, pricing stability, and volume-revenue convergence to assess whether the fourth quarter sets up a healthy baseline for low-double-digit growth in 2026.

DexCom, Inc. Price and EPS Surprise

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

What the Zacks Model Unveils

Our proven model predicts an earnings beat for DexCom this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. This is exactly the case here, as you will see below.

Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is +3.08%. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.

Zacks Rank: The company carries a Zacks Rank #3 at present.

Other Stocks Worth a Look

Here are some other medical product stocks worth considering, as these also have the right combination of elements to post earnings beat this reporting cycle.

Masimo MASI has an Earnings ESP of +8.04% and a Zacks Rank #2 at present. The company is set to release fourth-quarter 2025 results on Feb. 26. You can see the complete list of today’s Zacks #1 Rank stocks here.

MASI’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 12.39%. According to the Zacks Consensus Estimate, MASI’s fourth-quarter EPS is expected to decline 20.6% from the year-ago reported figure.

Veracyte VCYT has an Earnings ESP of +7.98% and a Zacks Rank #2 at present. The company is expected to release fourth-quarter 2025 results soon. 

VCYT’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 45.12%. The Zacks Consensus Estimate for the company’s fourth-quarter EPS suggests a decline of 13.9% from the year-ago quarter’s figure.

Merit Medical MMSI has an Earnings ESP of +2.09% and a Zacks Rank of 2 at present. The company is set to release second-quarter fiscal 2026 results on Feb. 24.

MMSI’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 14.09%. The Zacks Consensus Estimate for MMSI’s fourth-quarter EPS implies an improvement of 3.2% from the year-ago reported figure.

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

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