What changed in this filing

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Item 9A. Controls and Procedures

2024-02-08 compared with 2023-02-09 · 394 added, 404 removed, 1126 unchanged (41% of the section changed)

1 unchanged sentence

Evaluation of Disclosure Controls and Procedures

Regulations under the Securities Exchange Act of 1934 require public companies to maintain “disclosure controls and procedures,” which are defined to mean a company’s controls and other procedures that are designed to ensure that information required to be disclosed in the reports that it files or submits under the Securities Exchange Act of 1934 is accumulated and timely communicated to management, including our Chief Executive Officer and Chief Financial Officer, recorded, processed, summarized, and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms.

Regulations under the Exchange Act, require public companies to maintain “disclosure controls and procedures,” which are defined to mean a company’s controls and other procedures that are designed to ensure that information required to be disclosed in the reports that it files or submits under the Exchange Act, is accumulated and timely communicated to management, including our Chief Executive Officer and Chief Financial Officer, recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms.

Our management, including our Chief Executive Officer and our Chief Financial Officer, conducted an evaluation as of the end of the period covered by this report of the effectiveness of our disclosure controls and procedures.

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Management’s Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rule 13a-15(f) under the Securities Exchange Act of 1934.

Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rule 13a-15(f) under the Exchange Act.

Our internal control over financial reporting is designed to provide reasonable assurance to our management and Board of Directors regarding the preparation and fair presentation of published financial statements.

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors and Stockholders of DexCom, Inc.

To the Stockholders and the Board of Directors of DexCom, Inc.

Opinion on Internal Control Over Financial Reporting

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ITEM 9B - OTHER INFORMATION

Trading Plans

During the three months ended December 31, 2023, the following Section 16 officers and directors adopted or terminated a “Rule 10b5-1 trading arrangement” (as defined in Item 408 of Regulation S-K of the Exchange Act):

Name Title Action

Aggregate Number of Shares to be Sold (1)

Expiration Date (2)

Matthew Dolan

Executive Vice President, Strategy, Corporate Development and Dexcom Labs Adoption 12/15/2023 15,326

Executive Vice President, Global Revenue Adoption 12/15/2023 31,253

Girish Naganathan

Executive Vice President, Chief Technology Officer Adoption 11/20/2023 5,137

Executive Vice President and Managing Director, Dexcom Ventures Adoption 11/27/2023 15,000

Executive Vice President, Global Operations Adoption 12/4/2023 28,430

Chairperson, President and Chief Executive Officer Adoption 12/12/2023 100,965

Executive Vice President, Chief Human Resources Officer Adoption (3)

12/12/2023 12,825

Executive Vice President, Chief Human Resources Officer Termination (3)

12/12/2023 4,708

Executive Vice President, Chief Financial Officer Adoption 11/21/2023 6,863

(1) The actual number of shares sold may depend on the net shares vested as a result of tax withholding obligations, the vesting of certain performance-based stock units, the number of shares purchased under employee stock purchase plans, one or more limit orders, as applicable, and therefore, may not be determinable at this time.

(2) Except as indicated by footnote, each trading arrangement permitted or permits transactions through and including the date listed in the table.

(3) Represents the modification, as described in Rule 10b5-1(c)(1)(iv) under the Exchange Act, of a written plan adopted on December 12, 2023 that was intended to satisfy the affirmative defense conditions of Rule 10b5-1(c), as then in effect, under the Exchange Act.

Each of the Rule 10b5-1 trading arrangements that were adopted in the above table are in accordance with our insider trading policy and actual sale transactions made pursuant to such trading arrangements will be disclosed publicly in Section 16 filings with the SEC in accordance with applicable securities laws, rules and regulations.

No Section 16 officers or directors adopted , modified, or terminated a “non-Rule 10b5-1 trading arrangement” (as defined in Item 408 of Regulation S-K of the Exchange Act) during the three months ended December 31, 2023.

ITEM 9C - DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS

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We have adopted a written code of ethics for financial employees that applies to our principal executive officer, principal financial officer, principal accounting officer, controller and other employees of the finance department designated by our Chief Financial Officer.

This code of ethics, titled the “Code of Conduct and Ethics for Chief Executive Officer and Senior Finance Personnel,” is publicly available on our Internet website at https://dexcom.gcs-web.com/corporate-governance.

This code of ethics, titled the “Code of Conduct and Business Ethics,” is publicly available on our Internet website at https://dexcom.gcs-web.com/corporate-governance.

The information contained on our Internet website is not incorporated by reference into this Annual Report on Form 10-K.

The information concerning the Audit Committee of the Board of Directors required by this Item is incorporated by reference to information set forth in the Proxy Statement.

When required by the rules of Nasdaq, or the SEC, we will disclose any future amendment to, or waiver of, any provision of the code of ethics for our principal executive officer and principal financial officer or any member or members of our board of directors on our website within four business days following the date of such amendment or waiver.

The information concerning the Audit Committee of the Board of Directors required by this Item is incorporated by reference to the section of the Proxy Statement entitled “Committees of the Board and Meetings - Audit Committee.”

The information concerning material changes to the procedures by which stockholders may recommend nominees to the Board of Directors required by this Item is incorporated by reference to information set forth in the Proxy Statement.

The information concerning the Company’s insider trading policies and compliance with Section 16(a) required by this Item is incorporated by reference to the sections of the Proxy Statement entitled “Insider Trading Policy” and Delinquent Section 16(a) Reports, respectively.

ITEM 11 - EXECUTIVE COMPENSATION

The information required by this Item concerning executive compensation and our Compensation Committee is incorporated by reference to information set forth in the Proxy Statement under the heading “Executive Compensation.”

The information required by this Item concerning executive compensation and our Compensation Committee is incorporated by reference to the sections in the Proxy Statement entitled “Compensation Discussion and Analysis,” “2023 Summary Compensation Table,” “Grants of Plan-Based Awards,” “Outstanding Equity Awards at December 31, 2023,” “2023 Option Awards Exercises and Stock Vested,” “Executive Nonqualified Deferred Compensation Plan,” “Employment, Severance and Change in Control Arrangements,” “2023 Director Compensation,” “Risks from Compensation Policies and Practices,” “Chief Executive Officer Pay Ratio,” “Compensation Committee Interlocks,” and “Compensation Committee Report.”

ITEM 12 - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The information required by this Item is incorporated by reference to information set forth in the Proxy Statement under the headings “Principal Stockholders and Stock Ownership by Management” and “Equity Compensation Plan Information.”

The information required by this Item is incorporated by reference to the sections in the Proxy Statement entitled “Security Ownership of Certain Beneficial Owners and Management” and “Equity Compensation Plan Information.”

ITEM 13 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

The information required by this Item with respect to director independence is incorporated by reference to information set forth in the Proxy Statement.

The information concerning certain relationships and related transactions required by this Item is incorporated by reference to the section in the Proxy Statement entitled “Certain Transactions.”

The information required by this Item with respect to director independence is incorporated by reference to the section in the Proxy Statement entitled “Corporate Governance - Director Independence”.

The information concerning certain relationships and related transactions required by this Item is incorporated by reference to the section in the Proxy Statement entitled “Certain Transactions With Related Persons.”

ITEM 14 - PRINCIPAL ACCOUNTANT FEES AND SERVICES

The information concerning principal accountant fees and services required by this Item is incorporated by reference to the section in the Proxy Statement entitled “Ratification of Selection of Independent Registered Public Accounting Firm.”

ITEM 15 - EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

ITEM 15 - EXHIBIT AND FINANCIAL STATEMENT SCHEDULES

(a) The following documents are filed as part of this Annual Report:

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Financial Statement Schedules.

For the three fiscal years ended December 31, 2022, Schedule II – Valuation and Qualifying Accounts.

Schedule II – Valuation and Qualifying Accounts .

Financial statement schedules not listed above have been omitted because information required to be set forth therein is not applicable, not required, or the information required by such schedules is shown in the consolidated financial statements or the notes thereto.

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Restated Certificate of Incorporation of DexCom, Inc.

8-K 000-51222 May 21, 2021 3.1

8-K 000-51222 June 10, 2022 3.1

Amended and Restated Bylaws of DexCom, Inc.

8-K 000-51222 May 21, 2021 3.3

Form of Specimen Certificate for Registrant’s common stock.

Form of Specimen Certificate for DexCom, Inc.

common stock.

S-1/A 333-122454 March 24, 2005 4.01

Indenture, dated as of November 30, 2018, between DexCom, Inc.

Indenture, dated November 30, 2018, between DexCom, Inc.

Bank National Association (including the form of 0.75% Convertible Senior Notes due 2023).

8-K 000-51222 December 3, 2018 4.1

Indenture, dated as of May 14, 2020, between DexCom, Inc.

Indenture, dated May 14, 2020, between DexCom, Inc.

Bank National Association (including the form of 0.25% Convertible Senior Notes due 2025).

8-K 000-51222 May 15, 2020 4.1

Indenture, dated May 5, 2023, between DexCom, Inc.

Bank Trust Company, National Association (including the form of 0.375% Convertible Senior Notes due 2028).

8-K 000-51222 May 5, 2023 4.1

Description of Securities Registered Under Section 12 of the Exchange Act.

10-K 000-51222 February 11, 2021 4.04

Offer letter between DexCom, Inc.

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10-Q 000-51222 April 27, 2016 10.36

Industrial Net Lease, Broadway dated April 28, 2016, by and between PRA/LB, L.L.C.

and DexCom, Inc.

10-Q 000-51222 August 2, 2016 10.39

Executive Deferred Compensation Plan.

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10-K 000-51222 February 13, 2020 10.40

Form of Indemnity Agreement between Registrant and each of its directors and executive officers.*

Form of Indemnity Agreement between DexCom, Inc.

and each of its directors and executive officers.

10-K 000-51222 February 11, 2021 10.43

DexCom Incentive Bonus Plan.*

Incentive Bonus Plan.

8-K 000-51222 March 17, 2021 10.1

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and Kilroy Realty, L.P., as amended on August 18, 2010 and October 1, 2014.

Amendment Number One to Non-Exclusive Distribution Agreement, between RGH Enterprises, Inc.

and DexCom, Inc., dated March 29, 2011, as amended on March 28, 2013, December 4, 2013, and April 30, 2016.**

Amended and Restated Non-Exclusive Distribution Agreement with Diabetes Management and Supplies, LLC, dated August 10, 2015, as amended on April 7, 2022.**

Distribution Services Agreement dated November 7, 2015 between DexCom, Inc.

and AmerisourceBergen Drug Corporation, as amended on November 1, 2018 and December 2, 2022.**

Amended and Restated Non-Exclusive Distribution Agreement with Byram Healthcare dated February 1, 2016.**

Standard Form of Agreement dated May 2, 2016, by and between DexCom, Inc.

and Skanska USA Building Inc.

and Standard Form of Agreement dated May 1, 2017, by and between DexCom, Inc.

and Skanska USA Building Inc.

Amendment No.

1 to Collaboration and License Agreement dated October 25, 2016 by and between DexCom, Inc.

and Verily Life Sciences LLC (formerly Google Life Sciences LLC), as amended on November 20, 2018.**

Severance and Change in Control Plan and form of participation agreement.*

Amended and Restated 2015 Equity Incentive Plan and forms of award agreements.*

10-K 000-51222 February 9, 2023 10.09

Fourth Amendment to Office Lease between DexCom, Inc.

and Sequence Tech.

Center CA LLC, dated September 9, 2019, as amended on October 21, 2019 and May 25, 2021, and December 23, 2022.**

2015 Employee Stock Purchase Plan, amended on December 13, 2019 and form of subscription agreement.*

Office Lease between DexCom, Inc.

and GC Pacific Court Center Owner, LLC, dated January 31, 2020, as amended on November 17, 2020, and forms of certificates.

Center CA LLC, dated September 9, 2019, as amended on October 21, 2019, May 25, 2021, and December 23, 2022.

10-K 000-51222 February 9, 2023 10.18

Amended and Restated Severance and Change in Control Plan.

000-51222 May 19, 2023 10.1

First Amendment to Second Amended and Restated Credit Agreement, dated June 1, 2023 by and between DexCom, Inc.

and JPMorgan Chase Bank National Association.

10-Q 000-51222 July 27, 2023 10.06

2015 Employee Stock Purchase Plan and forms of subscription agreements.

Amended and Restated 2015 Equity Incentive Plan and forms of award agreements.

Amended and Restated Collaboration and License Agreement, dated November 20, 2018, by and between DexCom, Inc.

and Verily Life Sciences LLC (formerly Google Life Sciences LLC).

Procedures and Guidelines Governing Securities Trades by Company Personnel .

List of Subsidiaries.

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Section 1350 and Securities Exchange Act Rule 13a-14(b).

Compensation Recovery Policy.

101.INS Inline XBRL Instance Document X

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Sayer and Jereme M.

Sylvain, jointly and severally, his attorneys-in-fact, each with the power of substitution, for him in any and all capacities, to sign any amendments to this Report on Form 10-K and to file same, with exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, hereby ratifying and confirming all that each of said attorneys-in-fact, or his substitutes, may do or cause to be done by virtue hereof.

Sylvain, jointly and severally, his or her attorneys-in-fact, each with the power of substitution, for him or her in any and all capacities, to sign any amendments to this Annual Report on Form 10-K and to file same, with exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, granting unto each of said attorneys-in-fact and agents, full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection therewith, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that each of said attorneys-in-fact, or his substitutes, may do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

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/s/ KAREN DAHUT Director February 8, 2024

/s/ RIMMA DRISCOLL

Director February 8, 2024

Rimma Driscoll

/s/ BRIDGETTE P.

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/s/ KYLE MALADY Director February 8, 2024

SKYLER Director February 9, 2023

TOPOL Director February 8, 2024

Index to Consolidated Financial Statements

Report of Independent Registered Public A ccounting Firm

Report of Independent Registered Public Accounting Firm

Consolidated Balance Sheets

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors and Stockholders of DexCom, Inc.

To the Stockholders and the Board of Directors of DexCom, Inc.

Opinion on the Financial Statements

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The Company estimates reductions for pharmacy rebates based on contractual arrangements, estimates of products sold subject to rebate, known events or trends and channel inventory data.

Auditing management’s determination of transaction price including variable consideration involved a high degree of subjectivity in evaluating management’s estimates.

Auditing management’s determination of variable consideration relating to pharmacy rebates involved a high degree of subjectivity in evaluating management’s estimates.

In estimating pharmacy rebates, management applies contracted rates to estimates of products sold subject to rebate, known market events or trends and channel inventory data.

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Our audit procedures also included, among others, evaluating the significant assumptions and the accuracy and completeness of the underlying data used in management’s calculations.

This included testing contractual rates, management’s estimates of products sold subject to rebate, and inventory held by third parties at the end of the period, through a combination of underlying data validation by inspection of source documents, agreement to underlying contracts, review for consistency against historical data, and review of trending of inventory held at third parties versus inventory sold into the channel.

In addition, we inspected the results of the Company’s retrospective review analysis of pharmacy rebates claimed and evaluated the estimates made based on historical experience.

This included testing contractual rates, management’s estimates of products sold subject to rebate, and inventory held by third parties at the end of the period, through a combination of underlying data validation by inspection of source documents, agreement to underlying contracts, and review for consistency against historical data.

In addition, we inspected the results of the Company’s analysis of pharmacy rebates claimed and evaluated the estimates made based on historical experience.

/s/ Ernst & Young LLP

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Consolidated Balance Sheets

(In millions, except par value data) (As Adjusted)*

(In millions, except par value data)

Current assets:

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Additional paid-in capital 3,514.6 2,258.1

Accumulated other comprehensive income (loss) ( 11.6 ) 0.5

Accumulated other comprehensive loss ( 16.7 ) ( 11.6 )

Retained earnings 1,021.4 479.9

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Total liabilities and stockholders’ equity $ 6,264.5 $ 5,391.7

* We adjusted our 2021 amounts to reflect the simplified convertible instruments accounting guidance, which we adopted on a full retrospective basis.

All periods presented have also been adjusted to reflect the four -for-one stock split.

Refer to Note 1, “Organization and Significant Accounting Policies,” to the consolidated financial statements for further information.

See accompanying notes

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2023 2022 2021

(In millions, except per share data) (As Adjusted)* (As Adjusted)*

(In millions, except per share data)

Revenue $ 3,622.3 $ 2,909.8 $ 2,448.5

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Collaborative research and development fee — — 87.1

Amortization of intangible assets 7.5 3.7 2.5

Selling, general and administrative 1,185.4 1,007.7 810.5

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Operating income 597.7 391.2 265.8

Interest expense ( 18.6 ) ( 18.8 ) ( 17.7 )

Loss on extinguishment of debt — ( 0.1 ) —

Income from equity investments 0.2 11.6 —

Interest and other income (expense), net 18.0 ( 1.7 ) 16.1

Other income (expense), net

112.7 ( 0.4 ) ( 9.0 )

Income before income taxes 710.4 390.8 256.8

Income tax expense (benefit) 49.6 39.9 ( 251.8 )

Income tax expense 168.9 49.6 39.9

Net income $ 541.5 $ 341.2 $ 216.9

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Shares used to compute diluted net income per share 425.5 427.5 428.8

* We adjusted our 2021 and 2020 amounts to reflect the simplified convertible instruments accounting guidance, which we adopted on a full retrospective basis.

All periods presented have also been adjusted to reflect the four -for-one stock split.

Refer to Note 1, “Organization and Significant Accounting Policies,” to the consolidated financial statements for further information.

See accompanying notes

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2023 2022 2021

(In millions) (As Adjusted)*

(As Adjusted)*

(In millions)

Net income $ 541.5 $ 341.2 $ 216.9

Other comprehensive income (loss), net of tax:

Other comprehensive loss, net of tax:

Translation adjustments and other ( 9.2 ) ( 9.8 ) ( 1.0 )

Unrealized loss on marketable debt securities ( 2.3 ) ( 1.7 ) ( 0.2 )

Total other comprehensive income (loss), net of tax ( 12.1 ) ( 2.7 ) 0.9

Unrealized gain (loss) on marketable debt securities 4.1 ( 2.3 ) ( 1.7 )

Total other comprehensive loss, net of tax ( 5.1 ) ( 12.1 ) ( 2.7 )

Comprehensive income $ 536.4 $ 329.1 $ 214.2

* We adjusted our 2021 and 2020 amounts to reflect the simplified convertible instruments accounting guidance, which we adopted on a full retrospective basis.

Refer to Note 1, “Organization and Significant Accounting Policies,” to the consolidated financial statements for further information.

See accompanying notes

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(In millions) Shares Amount

Balance at December 31, 2019 (As Adjusted)* 366.4 $ 0.4 $ 1,675.6 $ 2.3 $ ( 695.7 ) $ ( 100.0 ) $ 882.6

ASU 2020-06 Convertible Debt Full Retrospective Adoption — — ( 242.3 ) — 67.8 — ( 174.5 )

Balance at December 31, 2020 384.4 0.4 1,726.5 3.2 ( 78.2 ) ( 100.0 ) 1,551.9

Issuance of common stock under equity incentive plans 2.9 — — — — — —

1 unchanged sentence

Tax benefit related to Senior Convertible Notes — — ( 2.0 ) — — — ( 2.0 )

Repurchase and conversions of 2022 Notes 13.5 — 112.9 — — — 112.9

Conversions of 2023 Notes 1.4 — 32.6 — — 24.6 57.2

Benefit of note hedge upon conversions of 2023 Notes ( 1.0 ) — 130.8 — — ( 130.8 ) —

Share-based compensation expense — — 113.4 — — — 113.4

Collaborative research and development fee — — 87.1 — — — 87.1

Net income — — — — 216.9 — 216.9

Other comprehensive income, net of tax — — — 0.9 — — 0.9

Balance at December 31, 2020 (As Adjusted)* 384.4 0.4 1,726.5 3.2 ( 78.2 ) ( 100.0 ) 1,551.9

Other comprehensive loss, net of tax — — — ( 2.7 ) — — ( 2.7 )

Balance at December 31, 2021 388.0 0.4 2,108.7 0.5 138.7 ( 206.2 ) 2,042.1

Issuance of common stock under equity incentive plans 1.6 — — — — — —

Issuance of common stock for Employee Stock Purchase Plan 0.3 — 22.5 — — — 22.5

Issuance of common stock in connection with achievement of regulatory approval milestone, net of issuance costs 2.9 — ( 189.3 ) — — 189.2 ( 0.1 )

Purchases of treasury stock ( 6.6 ) — — — — ( 557.7 ) ( 557.7 )

Tax benefit related to Senior Convertible Notes — — ( 0.4 ) — — — ( 0.4 )

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Share-based compensation expense — — 126.5 — — — 126.5

Collaborative research and development fee — — 87.1 — — — 87.1

Capitalization of sales-based milestones — — 152.4 — — — 152.4

Net income — — — — 341.2 — 341.2

Other comprehensive loss, net of tax — — — ( 12.1 ) — — ( 12.1 )

Balance at December 31, 2021 (As Adjusted)* 388.0 0.4 2,108.7 0.5 138.7 ( 206.2 ) 2,042.1

Balance at December 31, 2022 386.3 $ 0.4 $ 2,258.1 $ ( 11.6 ) $ 479.9 $ ( 595.0 ) $ 2,131.8

Issuance of common stock under equity incentive plans 1.4 — — — — — —

Issuance of common stock for Employee Stock Purchase Plan 0.3 — 26.6 — — — 26.6

Issuance of common stock in connection with achievement of regulatory approval milestone, net of issuance costs 2.9 — ( 189.3 ) — — 189.2 ( 0.1 )

Purchases of treasury stock ( 6.6 ) — — — — ( 557.7 ) ( 557.7 )

Issuance of common stock in connection with achievement of sales-based milestone, net of issuance costs 3.7 — ( 323.4 ) — — 323.2 ( 0.2 )

Purchases of treasury stock, including excise tax ( 6.3 ) — ( 0.2 ) — — ( 689.0 ) ( 689.2 )

Tax benefit related to Senior Convertible Notes — — ( 4.4 ) — — — ( 4.4 )

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Benefit of note hedge upon conversions of 2023 Notes ( 12.2 ) — 1,496.5 — — ( 1,490.3 ) 6.2

Purchase of capped call transactions, net of tax — — ( 76.3 ) — — — ( 76.3 )

Share-based compensation expense — — 150.8 — — — 150.8

Capitalization of sales-based milestones — — 152.4 — — — 152.4

Net income — — — — 541.5 — 541.5

1 unchanged sentence

Balance at December 31, 2023 385.4 $ 0.4 $ 3,514.6 $ ( 16.7 ) $ 1,021.4 $ ( 2,451.1 ) $ 2,068.6

* We adjusted our 2021 and 2020 amounts to reflect the simplified convertible instruments accounting guidance, which we adopted on a full retrospective basis on January 1, 2020.

All periods presented have also been adjusted to reflect the four -for-one stock split.

Refer to Note 1, “Organization and Significant Accounting Policies,” to the consolidated financial statements for further information.

See accompanying notes

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2023 2022 2021

(In millions) (As Adjusted)* (As Adjusted)*

(In millions)

Operating activities

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Realized (gain) loss on equity investment ( 1.9 ) ( 0.2 ) ( 11.6 )

Deferred income taxes (including benefit from valuation allowance release) ( 21.6 ) 15.8 ( 260.5 )

Deferred income taxes

( 55.0 ) ( 21.6 ) 15.8

Other non-cash income and expenses ( 83.9 ) 34.7 43.6

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Proceeds from issuance of convertible notes, net of issuance costs 1,230.6 — —

Repurchase of convertible notes — — ( 282.6 )

Purchases of capped call transactions

( 101.3 ) — —

Payments for conversions of senior convertible notes

( 787.3 ) — —

Other financing activities 1.5 ( 17.3 ) ( 9.9 )

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2023 2022 2021

(As Adjusted)*

Supplemental disclosure of non-cash investing and financing transactions:

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Cash paid during the year for income taxes $ 212.3 $ 114.2 $ 16.8

* We adjusted our 2021 and 2020 amounts to reflect the simplified convertible instruments accounting guidance, which we adopted on a full retrospective basis.

Refer to Note 1, “Organization and Significant Accounting Policies,” to the consolidated financial statements for further information.

See accompanying notes

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We have reclassified certain amounts previously reported in our financial statements to conform to the current presentation.

Amortization expense related to intangible assets has been presented separately from selling, general and administrative expenses in our consolidated statement of operations.

We determine the functional currencies of our international subsidiaries by reviewing the environment where each subsidiary primarily generates and expends cash.

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dollars using period-end exchange rates for assets and liabilities and average exchange rates for each period for revenue, costs and expenses.

We include translation-related adjustments in comprehensive income and in accumulated other comprehensive income (loss) in the equity section of our consolidated balance sheets.

We record gains and losses resulting from transactions with customers and vendors that are denominated in currencies other than the functional currency and from certain intercompany transactions in interest and other income (expense), net in our consolidated statements of operations.

On June 10, 2022, the Company effected a four -for-one forward stock split of its common stock to shareholders of record as of May 19, 2022.

The par value of the common stock remains $ 0.001 per share.

All share and per share information has been retroactively adjusted to reflect the stock split for all periods presented.

We include translation-related adjustments in comprehensive income and in accumulated other comprehensive loss in the equity section of our consolidated balance sheets.

We record gains and losses resulting from transactions with customers and vendors that are denominated in currencies other than the functional currency and from certain intercompany transactions in other income (expense), net in our consolidated statements of operations.

Use of Estimates

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quoted prices for identical or similar assets or liabilities in markets that are not active;

and inputs to valuation models or other pricing methodologies that do not require significant judgment because the inputs used in

the model, such as interest rates and volatility, can be corroborated by readily observable market data for substantially the full term of the assets or liabilities.

and inputs to valuation models or other pricing methodologies that do not require significant judgment because the inputs used in the model, such as interest rates and volatility, can be corroborated by readily observable market data for substantially the full term of the assets or liabilities.

Level 3—Uses unobservable inputs that are supported by little or no market activity and that are significant to the determination of fair value.

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We carry our marketable debt securities at fair value with unrealized gains and losses reported as a separate component of stockholders’ equity in our consolidated balance sheets and included in comprehensive income.

Interest income and realized gains and losses on marketable debt securities are included in interest and other income (expense), net in our consolidated statements of operations.

Interest income and realized gains and losses on marketable debt securities are included in other income (expense), net in our consolidated statements of operations.

We carry our marketable equity securities at fair value with realized and unrealized gains and losses reported in income (loss) from equity investments in our consolidated statements of operations.

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We do not generally intend to sell these investments and it is not more likely than not that we will be required to sell the investments before recovery of their amortized cost bases, which may be at maturity.

See Note 3 “Fair Value Measurements” and Short-Term Marketable Securities in Note 4 “Balance Sheet Details” to the consolidated financial statements for more information on our marketable securities.

See Note 3 “Fair Value Measurements” and Short-Term Marketable Securities in Note 4 “Balance Sheet Details and Other Financial Information” to the consolidated financial statements for more information on our marketable securities.

Accounts Receivable and Allowance for Doubtful Accounts

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We limit our exposure to credit risk by placing our cash and investments with a few major financial institutions.

We have also established guidelines regarding diversification of our investments and their maturities that are designed to maintain principal and

maximize liquidity.

We have also established guidelines regarding diversification of our investments and their maturities that are designed to maintain principal and maximize liquidity.

We review these guidelines periodically and modify them to take advantage of trends in yields and interest rates and changes in our operations and financial position.

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Historically, our inventory reserves have been adequate to cover our actual losses.

However, if actual product life cycles, product quality or market conditions differ from our assumptions, additional inventory adjustments that would increase cost of goods sold could be required.

However, if actual product life cycles, product quality or market conditions differ from our assumptions, additional inventory adjustments that would increase cost of sales could be required.

Property and Equipment

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We calculate depreciation using the straight-line method over the estimated useful lives of the assets.

Estimated useful lives are generally three years for computer software and hardware, including internal use software, four to fifteen years for machinery and equipment, and five years for furniture and fixtures.

Leasehold improvements are amortized over the shorter of the estimated useful lives of the assets or the remaining lease term.

Estimated useful lives are generally three to five years for computer software and hardware, including internal use software, four to fifteen years for machinery and equipment, and five years for furniture and fixtures.

Leasehold and land improvements are amortized over the shorter of the estimated useful lives of the assets or the remaining lease term.

Buildings are amortized over the shorter of the ownership of the building or forty years .

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We record goodwill when the fair value of consideration transferred in a business combination exceeds the fair value of the identifiable assets acquired and liabilities assumed.

Goodwill and other intangible assets that have indefinite useful lives are not amortized, but we test them annually for impairment in the fourth quarter of our fiscal year and whenever events or changes in circumstances indicate that it is more likely than not that the fair value is less than the carrying value.

Goodwill and other intangible assets that have indefinite useful lives are not amortized, but are tested annually for impairment during the fourth fiscal quarter and whenever events or changes in circumstances indicate that it is more likely than not that the fair value is less than the carrying value.

Events that would indicate impairment and trigger an interim impairment assessment include, but are not limited to, current economic and market conditions, including a decline in market capitalization, a significant adverse change in legal factors, business climate or operational performance of the business, and an adverse action or assessment by a regulator.

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If the carrying amount of a reporting unit’s goodwill exceeds its implied fair value, we would record an impairment loss equal to the difference.

We recorded no goodwill impairment charges for the twelve months ended December 31, 2022, 2021 or 2020.

The change in goodwill for the twelve months ended December 31, 2022 and 2020 consisted of translation adjustments on our foreign currency denominated goodwill.

The change in goodwill for the twelve months ended December 31, 2021 consisted of goodwill we recorded for acquisitions that were not significant, individually or in the aggregate, and translation adjustments on our foreign currency denominated goodwill.

We recorded no significant goodwill impairment charges for the twelve months ended December 31, 2023, 2022 or 2021.

The change in goodwill for the twelve months ended December 31, 2023 and 2022 primarily consisted of translation adjustments on our foreign currency denominated goodwill.

Intangible Assets and Other Long-Lived Assets

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We file federal and state income tax returns in the United States and income tax returns in various other foreign jurisdictions with varying statutes of limitations.

Due to net operating losses incurred on our U.S.

Federal returns, our income tax returns from inception to date are subject to examination by taxing authorities.

Due to net operating losses incurred, our income tax returns from inception to date are subject to examination by taxing authorities.

We recognize interest expense and penalties related to income tax matters, including unrecognized tax benefits, as a component of income tax expense.

14 unchanged sentences

Comprehensive Income

Comprehensive income consists of two elements, net income and other comprehensive income (loss).

Comprehensive income consists of two elements, net income and other comprehensive loss.

We report all components of comprehensive income, including net income, in our financial statements in the period in which they are recognized.

Total comprehensive income is defined as the change in equity during a period from transactions and other events and circumstances from non-owner sources.

We report net income and the components of other comprehensive income (loss), including foreign currency translation adjustments and unrealized gains and losses on marketable securities, net of their related tax effect to arrive at total comprehensive income.

We report net income and the components of other comprehensive loss, including foreign currency translation adjustments and unrealized gains and losses on marketable securities, net of their related tax effect to arrive at total comprehensive income.

Revenue Recognition

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For each contract, we consider the obligation to transfer Components to the customer, each of which are distinct, to be separate performance obligations.

We also provide free-of-charge software, mobile applications and updates for our Dexcom Share ® remote monitoring system.

The standalone selling prices of Dexcom Share ® are estimated based on an expected cost plus a margin approach.

Transaction Price

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The deferred revenue balances related to performance obligations that will be satisfied after twelve months was $ 7.4 million as of December 31, 2023 and $ 19.0 million as of December 31, 2022.

These balances are included in other

long-term liabilities in our consolidated balance sheets.

These balances are included in other long-term liabilities in our consolidated balance sheets.

Revenue recognized in the period from performance obligations satisfied in previous periods was not material for the periods presented.

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We record these costs in selling, general and administrative expense in our consolidated statements of operations.

Senior Convertible Notes

In August 2020, the FASB issued ASU 2020-06, which simplifies the accounting for convertible debt instruments, amends the guidance on derivative scope exceptions for contracts in an entity’s own equity, and modifies the guidance on diluted earnings per share calculations.

We previously followed in Accounting Standard Codification, or ASC, 470-20, which required us to separate each of our convertible debt instruments at issuance into two units of accounting, a liability component, based on our nonconvertible debt borrowing rate at issuance, and an equity component.

Under ASU 2020-06, we now account for each of our convertible debt instruments as a single unit of accounting, a liability, because we concluded that there were no material conversion features that require bifurcation as a derivative under ASC 815-15 and our convertible debt instruments were not issued at a substantial premium.

Since we adopted ASU 2020-06 using the full retrospective approach, we were required to apply the guidance to all convertible debt instruments we had outstanding as of January 1, 2020.

Upon adoption of ASU 2020-06 as of January 1, 2020, we recognized $ 67.8 million cumulative-effect adjustment to increase retained earnings for the decrease in interest expense and $ 242.3 million decrease in additional paid in capital for the elimination of the equity component.

We have updated these financial statements to reflect the cumulative adjustment for the periods presented.

We have labeled our prior period financial statements and related notes “As Adjusted” to indicate the change required under the new accounting guidance.

Below is a summary of the changes in our consolidated balance sheets we originally reported as of December 31, 2020 and 2021 under the ASC 470-20 legacy guidance compared to our adjusted consolidated balance sheets under the new ASU 2020-06 guidance we adopted and reflective of our four -for-one forward stock split:

Consolidated Balance Sheet As of December 31, 2020

(In millions) As Previously Reported ASU 2020-06 Adjustment Stock Split Adjustment As Adjusted

Deferred tax assets $ 216.4 $ 91.3 $ — $ 307.7

Long-term senior convertible notes 1,667.2 365.9 — 2,033.1

Common stock 0.1 — 0.3 0.4

Additional paid-in-capital 2,125.3 ( 398.5 ) ( 0.3 ) 1,726.5

Accumulated deficit $ ( 202.1 ) $ 123.9 $ — $ ( 78.2 )

Consolidated Balance Sheet As of December 31, 2021

(In millions) As Previously Reported ASU 2020-06 Adjustment Stock Split Adjustment As Adjusted

Deferred tax assets $ 220.8 $ 69.7 $ — $ 290.5

Long-term senior convertible notes 1,702.7 279.1 — 1,981.8

Common stock 0.1 — 0.3 0.4

Additional paid-in-capital 2,504.5 ( 395.5 ) ( 0.3 ) 2,108.7

Retained earnings (accumulated deficit) $ ( 47.4 ) $ 186.1 $ — $ 138.7

Below is a summary of the changes in our consolidated statements of operations for the twelve months ended December 31, 2020 and December 31, 2021 we originally reported at December 31, 2021 under the ASC 470-20 legacy guidance compared to our adjusted balance sheets under the new ASU 2020-06 guidance we adopted and reflective of our four -for-one forward stock split:

Consolidated Statement of Operations Twelve Months Ended December 31, 2020

(In millions, except per share data) As Previously Reported ASU 2020-06 Adjustment As Adjusted

Loss on extinguishment of debt $ ( 5.9 ) $ 5.9 $ —

Interest expense ( 84.7 ) 67.0 ( 17.7 )

Income before income taxes 225.0 72.9 297.9

Income tax expense (benefit) ( 268.6 ) 16.8 ( 251.8 )

Net income 493.6 56.1 549.7

Basic net income per share 1.31 0.15 1.46

Diluted net income per share (1)

$ 1.27 $ 0.06 $ 1.33

Shares used to compute diluted net income per share 389.8 30.6 420.4

(1) Dilutive net income used for diluted net income per share under ASU 2020-06 includes $ 11.1 million add back of interest expense, net of tax, attributable to assumed conversion of senior convertible notes.

Consolidated Statement of Operations Twelve Months Ended December 31, 2021

(In millions, except per share data) As Previously Reported ASU 2020-06 Adjustment As Adjusted

Loss on extinguishment of debt $ ( 1.5 ) $ 1.4 $ ( 0.1 )

Interest expense ( 100.3 ) 81.5 ( 18.8 )

Income before income taxes 173.9 82.9 256.8

Income tax expense 19.2 20.7 39.9

Net income 154.7 62.2 216.9

Basic net income per share 0.40 0.16 0.56

Diluted net income per share (1)

$ 0.39 $ 0.14 $ 0.53

Shares used to compute diluted net income per share 400.4 28.4 428.8

(1) Dilutive net income used for diluted net income per share under ASU 2020-06 includes $ 11.4 million add back of interest expense, net of tax, attributable to assumed conversion of senior convertible notes.

Below is a summary of our consolidated balance sheet as of December 31, 2022 and consolidated statement of operations for the twelve months ended December 31, 2022 under the ASC 470-20 legacy guidance compared to the new ASU 2020-06 guidance we adopted.

Consolidated Balance Sheet As of December 31, 2022

(In millions) As computed under ASC 470-20 ASU 2020-06 Adjustment As reported under ASU 2020-06

Prepaid and other current assets $ 191.5 $ 1.1 $ 192.6

Deferred tax assets 293.1 48.1 341.2

Current portion of long-term senior convertible notes 740.9 31.7 772.6

Long-term senior convertible notes 1,034.9 162.8 1,197.7

Additional paid-in-capital 2,652.2 ( 394.1 ) 2,258.1

Retained earnings $ 231.1 $ 248.8 $ 479.9

Consolidated Statement of Operations Twelve Months Ended December 31, 2022

(In millions, except per share data) As computed under ASC 470-20 ASU 2020-06 Adjustment As reported under ASU 2020-06

Loss on extinguishment of debt $ ( 0.4 ) $ 0.4 $ —

Interest expense ( 101.9 ) 83.3 ( 18.6 )

Income before income taxes 307.1 83.7 390.8

Income tax expense 28.6 21.0 49.6

Net income 278.5 62.7 341.2

Basic net income per share 0.72 0.16 0.88

Diluted net income per share (1)

$ 0.70 $ 0.12 $ 0.82

Shares used to compute diluted net income per share 400.5 27.0 427.5

(1) Dilutive net income used for diluted net income per share under ASU 2020-06 includes $ 11.0 million add back of interest expense, net of tax, attributable to assumed conversion of senior convertible notes.

Product Shipment Costs

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We expense costs of research and development as we incur them.

Our research and development expenses primarily consist of engineering and research expenses related to our continuous glucose monitoring technology, clinical trials, regulatory expenses, quality assurance programs, materials and products for clinical trials.

Research and development expenses primarily consist of employee compensation, including salary, fringe benefits, share-based compensation, and temporary employee expenses.

We also incur significant expenses to operate our clinical trials that include clinical site reimbursement, clinical trial product, and associated travel expenses.

Our research and development expenses also include fees for design services, contractors, and development materials.

Our CGM systems include certain software that we develop.

Our research and development expenses primarily consists of engineering and research expenses related to our sensing technology, clinical trials, regulatory expenses, quality assurance programs, employee compensation, and business process outsourcers.

Our technology includes certain software that we develop.

We expense software development costs as we incur them until technological feasibility has been established, at which time we capitalize development costs until the product is available for general release to customers.

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Lease right-of-use assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease.

Operating lease right-of-use assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term.

The interest rate used to determine the present value of the future lease payments is our incremental borrowing rate, because the interest rate implicit in most of our leases is not readily determinable.

Our incremental borrowing rate is estimated to approximate the interest rate on a collateralized basis with similar terms and payments, and in similar economic environments.

The operating lease right-of-use asset also includes any lease payments made and excludes lease incentives.

We have lease agreements with lease and non-lease components, which are generally accounted for separately.

Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option.

Lease expense for lease payments is recognized on a straight-line basis over the lease term.

Variable lease payments that do not depend on a rate or index, payments associated with non-lease components, and costs related to leases with terms of less than 12 months are expensed as incurred.

Lease right-of-use assets and liabilities with terms of more than 12 months are recognized at commencement date based on the present value of lease payments over the lease term.

The discount rate used to determine the present value is our collateralized incremental borrowing rate unless the interest rate implicit in the lease is readily determinable.

For operating leases, lease expense is recognized on a straight-line basis within operating expenses over the lease term.

For finance leases, lease expense is recognized as interest and depreciation;

interest using the effective interest method and depreciation on a straight-line basis over the shorter of the estimated useful lives of the assets or, in the instance where title does not transfer at the end of the lease term, the lease term.

Short-term leases with lease terms of 12 months or less are not recorded on the balance sheet and are recognized on a straight line basis over the lease term.

Operating lease right-of-use assets and lease liabilities are presented separately in our consolidated balance sheets.

Finance lease right-of-use assets are included in property and equipment and finance lease liabilities are included in accounts payable and accrued liabilities and in other long-term liabilities in our consolidated balance sheets.

Our lease agreements may contain lease components and non-lease components.

For certain asset classes, we have elected to account for both of those components as a single lease component.

We use a portfolio approach to account for the right-of-use assets and liabilities associated with certain machinery and equipment leases.

Variable lease payments may include payments associated with non-lease components, payments that do not depend on a rate or index, or other costs.

Variable lease payments are recognized in the period in which the obligation for those payments are incurred.

Share-Based Compensation

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Certain RSUs granted to senior management vest based on the achievement of pre-established performance or market goals.

We estimate the fair value of performance/market-based RSUs at the date of grant using the intrinsic value method and the probability that the specified performance criteria will be met.

We update our assessment of the probability that the specified performance criteria will be achieved each quarter and adjust our estimate of the fair value of the performance-based RSUs if necessary.

The Monte Carlo methodology that we use to estimate the fair value of market-based RSUs at the date of grant incorporates into the valuation the possibility that the market condition may not be satisfied.

Provided that the requisite service is rendered, the total fair value of the market-based RSUs at the date of grant must be recognized as compensation expense even if the market condition is not achieved.

We estimate the fair value of these performance/market-based RSUs, or PSUs, at the date of grant using the intrinsic value method and the probability that the specified performance criteria will be met.

We update our assessment of the probability that the specified performance criteria will be achieved each quarter and adjust our estimate of the fair value of the PSUs if necessary.

The Monte Carlo methodology that we use to estimate the fair value of PSUs at the date of grant incorporates into the valuation the possibility that the market condition may not be satisfied.

Provided that the requisite service is rendered, the total fair value of the PSUs at the date of grant must be recognized as compensation expense even if the market condition is not achieved.

However, the number of shares that ultimately vest can vary significantly with the performance of the specified market criteria.

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Diluted net income per share is computed using the weighted average number of common shares outstanding during the period and, when dilutive, potential common share equivalents.

Potentially dilutive common shares consist of shares issuable from restricted stock units, or RSUs, performance stock units, or PSUs, warrants, and our senior convertible notes.

Potentially dilutive common shares consist of shares issuable from RSUs, PSUs, warrants, our senior convertible notes, and collaborative sales-based milestones.

Potentially dilutive common shares issuable upon vesting of RSUs, PSUs, and exercise of warrants are determined using the average share price for each period under the treasury stock method.

4 unchanged sentences

2023 2022 2021

(In millions, except per share data) As Adjusted As Adjusted

(In millions, except per share data)

Net income $ 541.5 $ 341.2 $ 216.9

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Dilutive potential common stock outstanding:

Collaborative sales-based milestones

Restricted stock units and performance stock units 1.1 1.0 2.1

Warrants 10.2 11.5 8.4

Senior convertible notes 26.2 26.9 28.3

Warrants 11.5 10.2 11.5

Diluted weighted average shares outstanding 425.5 427.5 428.8

1 unchanged sentence

Twelve Months Ended

(In millions)

2023 2022 2021

(In millions) As Adjusted As Adjusted

Restricted stock units 0.4 — 0.1

Restricted stock units and performance stock units

Recent Accounting Guidance

Recently Adopted Accounting Pronouncements

In August 2020, the FASB issued ASU No.

2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40) .

This new guidance is intended to reduce the complexity of accounting for convertible instruments.

The guidance also addresses how convertible instruments are accounted for in the diluted earnings per share calculation and requires enhanced disclosures about the terms of convertible instruments.

Entities may adopt ASU 2020-06 using either a partial retrospective or fully retrospective method of transition.

This ASU is effective for public business entities for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years.

Early adoption is permitted for fiscal years beginning after December 15, 2020, including interim periods within those fiscal years.

We adopted ASU 2020-06 in the first quarter of 2022 using the full retrospective method, reflecting the application of the new standard in each prior reporting period.

Recently Issued Accounting Pronouncements Not Yet Adopted

In October 2021, the FASB issued ASU No.

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The amendments should be applied prospectively to business combinations occurring on or after the adoption date.

Any impact this guidance will have on our consolidated financial statements is dependent on when and if we complete future business combinations.

We adopted ASU 2021-08 in the first quarter of 2023 and there was no impact to our consolidated financial statements.

Recently Issued Accounting Pronouncements Not Yet Adopted

In November 2023, the FASB issued Accounting Standards Update (ASU) 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures .

The ASU expands public entities’ segment disclosures by requiring disclosure of significant segment expenses that are regularly reviewed by the CODM and included within each reported measure of segment profit or loss, an amount and description of its composition for other segment items, and interim disclosures of a reportable segment’s profit or loss and assets.

The ASU also allows, in addition to the measure that is most consistent with U.S.

GAAP, the disclosure of additional measures of segment profit or loss that are used by the CODM in assessing segment performance and deciding how to allocate resources.

All disclosure requirements under ASU 2023-07 are also required for public entities with a single reportable segment.

The ASU is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, on a retrospective basis, with early adoption permitted.

We are currently evaluating the impact of this standard on our consolidated financial statements and disclosures.

In December 2023, the FASB issued ASU 2023-09, Improvements to Income Tax Disclosures .

The ASU requires greater disaggregation of information about a reporting entity's effective tax rate reconciliation as well as information on income taxes paid.

The ASU applies to all entities subject to income taxes and is intended to help investors better understand an entity’s exposure to potential changes in jurisdictional tax legislation and assess income tax information that affects cash flow forecasts and capital allocation decisions.

The ASU is effective for annual periods beginning after December 15, 2024, with early adoption permitted.

The ASU should be applied on a prospective basis although retrospective application is permitted.

We are currently evaluating the impact of this standard on our consolidated financial disclosures.

Development and Other Agreements

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Upfront and Incentive payments

In the fourth quarter of 2018, we made an initial payment for an upfront fee of $ 250.0 million through the issuance of 7,363,772 shares of our common stock.

In the fourth quarter of 2018, we made an initial payment for an upfront fee of $ 250.0 million through the issuance of 7.4 million shares of our common stock.

We recorded a $ 217.7 million charge in our consolidated statements of operations during 2018 relating to the issuance of this common stock because this milestone payment did not meet the capitalization criteria.

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This charge is associated with IPR&D obtained in an asset acquisition prior to regulatory approval and therefore does not have an alternative future use.

In the first quarter of 2022, we received regulatory approval and issued 2,945,508 shares of our common stock in connection with our achievement of the related milestone.

In December 2022, we received FDA approval and determined the achievement of the sales-based milestones to be probable.

In the first quarter of 2022, we received regulatory approval and issued 2.9 million shares of our common stock in connection with our achievement of the related milestone.

In the fourth quarter of 2022, we received FDA approval and determined the achievement of the sales-based milestones to be probable.

As such, we capitalized the full value of the sales-based milestones, $ 152.4 million, as an intangible asset.

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The value of the sales-based milestones is based on:

1) 5,154,640 shares of our common stock, as agreed upon in November 2018 and 2) our closing stock price on December 28, 2018 of $ 29.57 per share.

1) 5.2 million shares of our common stock, as agreed upon in November 2018 and 2) our closing stock price on December 28, 2018 of $ 29.57 per share.

December 28, 2018 is the date on which we obtained the necessary regulatory approvals and represents the date the performance- based awards were issued.

The intangible asset will be amortized using the straight-line method over its estimated useful life of 64 months through March 2028.

The related amortization expense is recognized in Cost of Sales in our consolidated

statements of operations and disclosed in Note 4 “Intangibles, Net” to the consolidated financial statements in Part II, Item 8 of this Annual Report.

The related amortization expense is recognized in cost of sales in our consolidated statements of operations and disclosed in Note 4 “Intangibles, Net” to the consolidated financial statements in Part II, Item 8 of this Annual Report.

In the fourth quarter of 2023, we issued 3.7 million shares of our common stock in connection with our achievement of the first sales-based milestone.

See the effective tax rate reconciliation in Note 8 “Income Taxes” to the consolidated financial statements for more information on the tax benefits related to the collaboration agreement milestone share-based payments for the periods presented.

All milestones may be paid in cash or shares of our common stock, at our election.

If we elect to make these milestone payments in cash, any such cash payment would be equal to the number of shares that would otherwise be issued for the given milestone payment multiplied by the value of our stock on the date the relevant milestone is achieved, and adjusted to give effect to any stock splits, dividends, or similar events.

We intend to pay the sales-based contingent milestones in shares of our common stock.

The Restated Collaboration Agreement will continue until December 31, 2028, unless terminated by either party upon uncured material breach of the Restated Collaboration Agreement by the other party.

Upon achievement of the first sales-based milestone event and payment of the corresponding milestone fee by us, the term of the Restated Collaboration Agreement will be extended until December 31, 2033, unless terminated by either party upon uncured material breach of the Restated Collaboration Agreement by the other party.

We intend to pay the remaining sales-based contingent milestone in shares of our common stock.

Upon achievement of the first sales-based milestone event and payment of the corresponding milestone fee by us in December 2023, the term of the Restated Collaboration Agreement was extended from December 31, 2028 to December 31, 2033.

Fair Value Measurements

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Corporate debt — 360.6 — 360.6

Supranationals — — — —

Total debt securities, available-for-sale — 2,157.8 — 2,157.8

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Total assets measured at fair value on a recurring basis $ 331.1 $ 2,157.8 $ — $ 2,488.9

(1) Includes debt obligations issued by U.S.

government-sponsored enterprises or U.S.

government agencies.

(2) Includes assets which are held pursuant to a deferred compensation plan for senior management, which consist mainly of mutual funds.

The following table summarizes financial assets that we measured at fair value on a recurring basis as of December 31, 2022, classified in accordance with the fair value hierarchy:

4 unchanged sentences

government agencies (1)

— 1,530.7 — 1,530.7

Commercial paper — 119.4 — 119.4

Corporate debt — 163.8 — 163.8

Supranationals — 54.0 — 54.0

Total debt securities, available-for-sale — 1,813.9 — 1,813.9

Other assets (2)

10.2 — — 10.2

Total assets measured at fair value on a recurring basis $ 386.1 $ 1,858.7 $ — $ 2,244.8

(1) Includes debt obligations issued by U.S.

government-sponsored enterprises or U.S.

government agencies.

(2) Includes assets which are held pursuant to a deferred compensation plan for senior management, which consist mainly of mutual funds.

There were no transfers into or out of Level 3 securities during the twelve months ended December 31, 2023 and 2022.

We hold certain other investments that we do not measure at fair value on a recurring basis.

The carrying values of these investments are $ 19.0 million as of December 31, 2022 and $ 4.5 million as of December 31, 2021.

We include them in other assets in our consolidated balance sheets.

It is impracticable for us to estimate the fair value of these investments on a recurring basis due to the fact that these entities are privately held and limited information is available.

We monitor the information that becomes available from time to time and adjust the carrying values of these investments if there are identified events or changes in circumstances that have a significant effect on the fair values.

Fair Value of Senior Convertible Notes

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Senior Convertible Notes due 2025 1,262.8 1,314.9

Senior Convertible Notes due 2028 1,281.8 —

Total fair value of outstanding senior convertible notes $ 2,544.6 $ 3,451.1

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The duration of these contracts is generally one month .

The derivative gains and losses are included in interest and other income (expense), net in our consolidated statements of operations.

The derivative gains and losses are included in other income (expense), net in our consolidated statements of operations.

As of December 31, 2023 and December 31, 2022, the notional amounts of outstanding foreign currency forward contracts were $ 71.0 million and $ 62.0 million, respectively.

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In general, non-financial assets, including goodwill, intangible assets, and property and equipment, are measured at fair value when there are indicators of impairment and are recorded at fair value only when an impairment is recognized.

We hold certain other investments that we do not measure at fair value on a recurring basis.

The carrying values of these investments are $ 38.5 million as of December 31, 2023 and $ 19.0 million as of December 31, 2022.

We include them in other assets in our consolidated balance sheets.

It is impracticable for us to estimate the fair value of these investments on a recurring basis due to the fact that these entities are privately held and limited information is available.

There were no significant impairment losses during the twelve months ended December 31, 2023.

During the fourth quarter 2022, we vacated a leased building and made it available for sublease, resulting in an impairment of its asset group which consisted primarily of leasehold improvements and right-of-use asset.

We recorded $ 23.0 million in impairment losses during the twelve months ended December 31, 2022.

See Note 6 “Leases” to the consolidated financial statements for more information.

There were no significant impairment losses during the twelve months ended December 31, 2021 and 2020.

Balance Sheet Details

See Note 6 “Leases and Other Commitments” to the consolidated financial statements for more information.

There were no significant impairment losses during the twelve months ended December 31, 2021.

Balance Sheet Details and Other Financial Information

Short-Term Marketable Securities

8 unchanged sentences

Corporate debt 360.8 0.1 ( 0.3 ) 360.6

Supranationals — — — —

Total debt securities, available-for-sale $ 2,157.4 $ 1.3 $ ( 0.9 ) $ 2,157.8

4 unchanged sentences

government agencies (1)

$ 1,535.1 $ 0.2 $ ( 4.6 ) $ 1,530.7

Commercial paper 119.6 — ( 0.2 ) 119.4

Corporate debt 164.3 — ( 0.5 ) 163.8

Supranationals 54.1 — ( 0.1 ) 54.0

Total debt securities, available-for-sale $ 1,819.0 $ 0.2 $ ( 5.3 )

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As of December 31, 2023, the estimated market value of our short-term debt securities with contractual maturities up to 12 months was $ 2.16 billion.

As of December 31, 2021, the estimated market value of our short-term debt securities with contractual maturities up to 12 months and up to 18 months was $ 1.36 billion and $ 320.7 million, respectively.

As of December 31, 2022, the estimated market value of our short-term debt securities with contractual maturities up to 12 months was $ 1.81 billion.

Gross realized gains and losses on sales of our short-term debt securities for the twelve months ended December 31, 2023, 2022 and 2021 were not significant.

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During the twelve months ended December 31, 2023, 2022 and 2021, we had no unrealized gains or losses recognized during the reporting period on equity investments.

Realized gains from the sale of an equity investment were $ 0.2 million and $ 11.6 million for the twelve months ended December 31, 2022 and 2021, respectively.

Realized gains from the sale of an equity investment were not significant for the twelve months ended December 31, 2023, 2022 and 2021.

Accounts Receivable

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Accounts receivable $ 983.2 $ 720.6

Less allowance for doubtful accounts ( 7.3 ) ( 5.4 )

allowance for doubtful accounts

( 9.3 ) ( 7.3 )

Total accounts receivable, net $ 973.9 $ 713.3

10 unchanged sentences

Prepaid inventory 31.5 67.8

Deferred compensation plan assets 15.2 10.2

Income tax receivables 13.6 38.9

3 unchanged sentences

(In millions) 2023 2022

$ 26.9 $ 15.6

Land and land improvements $ 34.5 $ 26.9

Furniture and fixtures 36.9 32.6

4 unchanged sentences

Total cost 1,622.5 1,418.8

Less accumulated depreciation and amortization ( 363.2 ) ( 231.5 )

accumulated depreciation and amortization

( 509.4 ) ( 363.2 )

Total property and equipment, net $ 1,113.1 $ 1,055.6

(1) Represents finance lease right-of-use assets.

Depreciation expense related to property and equipment for the twelve months ended December 31, 2023, 2022 and 2021 was $ 147.4 million, $ 144.1 million and $ 96.3 million, respectively.

13 unchanged sentences

Total 4.1 $ 195.5 $ ( 61.0 ) $ 134.5

(1) See Note 2 “Development and Other Agreements” to the consolidated financial statements in Part II, Item 8 of this Annual Report for more information.

(2) Excludes Verily intangible asset.

December 31, 2022

1 unchanged sentence

(in years) Gross Carrying Amount Accumulated Amortization Net Carrying Amount

Verily intangible (1)

5.3 $ 152.4 $ ( 2.4 ) $ 150.0

Customer relationships 3.3 24.1 ( 8.7 ) 15.4

Acquired technology and intellectual property (2)

1.7 14.6 ( 9.6 ) 5.0

Trademarks and trade name 3.5 4.2 ( 1.3 ) 2.9

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Total 4.9 $ 195.5 $ ( 22.2 ) $ 173.3

(1) See Note 2 “Development and Other Agreements” to the consolidated financial statements in Part II, Item 8 of this Annual Report for more information.

(2) Excludes Verily intangible asset.

The following table presents the total amortization expense of finite-lived intangible assets for the twelve months ended December 31, 2023, 2022 and 2021:

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(In millions)

Thereafter 7.1

Total $ 134.5

Other assets were $ 47.1 million and $ 10.5 million as of December 31, 2022 and December 31, 2021, respectively.

The increase in other assets is primarily due to an increase in long-term equity investments in privately held entities, long-term prepaid assets, and term deposits.

(In millions) 2023 2022

Long-term investments $ 38.5 $ 19.0

Long-term deposits 14.4 16.2

Other assets 22.1 11.9

Total other assets $ 75.0 $ 47.1

Accounts Payable and Accrued Liabilities

(In millions) As Adjusted

(In millions) 2023 2022

Accounts payable trade $ 276.4 $ 237.9

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Accrued warranty 12.6 12.8

Contractual obligations — 15.0

Income tax payable

Deferred compensation plan liabilities 15.2 10.2

Other accrued liabilities 40.5 39.7

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Deferred revenue, long-term 7.4 19.0

Deferred tax liabilities 4.9 5.9

Asset retirement obligation

Other tax liabilities 38.7 32.7

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Total other long-term liabilities $ 125.6 $ 128.3

Other Income (Expense), Net

Twelve Months Ended

(In millions) 2023 2022 2021

Interest and dividend income

$ 135.0 $ 23.8 $ 1.7

Interest expense

( 20.3 ) ( 18.6 ) ( 18.8 )

Income from equity investments 1.9 0.2 11.6

Loss on extinguishment of debt — — ( 0.1 )

Other expense, net

( 3.9 ) ( 5.8 ) ( 3.4 )

Total other income (expense), net

$ 112.7 $ ( 0.4 ) $ ( 9.0 )

Senior Convertible Notes

The carrying amounts of our senior convertible notes were as follows as of the dates indicated:

(In millions) As Adjusted

(In millions) 2023 2022

Principal amount:

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Senior Convertible Notes due 2025 1,207.5 1,207.5

Senior Convertible Notes due 2028 1,250.0 —

Total principal amount 2,457.5 1,982.3

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Senior Convertible Notes due 2025 56.1 33.6

Senior Convertible Notes due 2028 33.6 —

Total by which the notes’ if-converted value exceeds their principal amount $ 89.7 $ 1,395.1

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Twelve Months Ended

(In millions)

2023 2022 2021

(Dollars in millions) As Adjusted As Adjusted

Cash interest expense:

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Senior Convertible Notes due 2023 (2)

1.1 % 1.1 % 1.1 %

Senior Convertible Notes due 2025 0.5 % 0.5 % 0.5 %

Senior Convertible Notes due 2028 0.7 % * *

(1) Interest on the 2022 Notes began accruing upon issuance and was payable semi-annually on May 15 and November 15 of each year.

(1) Interest on the 2023 Notes began accruing upon issuance and is payable semi-annually on June 1 and December 1 of each year.

Interest on the 2025 Notes began accruing upon issuance and is payable semi-annually on May 15 and November 15 of each year.

Interest on the 2028 Notes began accruing upon issuance and is payable semi-annually on May 15 and November 15 of each year.

(2) The effective interest rate presented represents the rate applicable for the period outstanding.

Our $ 400.0 million aggregate principal amount of unsecured senior convertible notes issued in June 2017 with a stated interest rate of 0.75 % and maturity date of May 15, 2022 (the 2022 Notes) were repurchased and converted by August 2020.

The Senior Convertible Notes due 2023 matured on December 1, 2023 and all outstanding principal was settled as described below.

* Not applicable as no notes were outstanding at this date.

Repurchase, Conversion, and Redemption of 2022 Notes

In May 2020, we used approximately $ 282.6 million of the net proceeds from the 2025 Notes offering described below and issued 7,812,268 shares of Dexcom common stock to repurchase $ 260.0 million principal amount outstanding of the 2022 Notes and the associated conversion feature of the repurchased notes (which was recorded in additional paid-in capital).

Holders of $ 140.0 million in aggregate principal amount of the 2022 Notes elected conversion at their option during the twelve months ended December 31, 2020.

We settled these conversions by issuing 5,649,988 shares of our common stock.

0.75 % Senior Convertible Notes due 2023

In November 2018, we completed an offering of $ 850.0 million aggregate principal amount of unsecured senior convertible notes with a stated interest rate of 0.75 % and a maturity date of December 1, 2023 (the “2023 Notes”).

The net proceeds from the offering, after deducting initial purchasers’ discounts and costs directly related to the offering, were approximately $ 836.6 million.

The initial conversion rate of the 2023 Notes is 24.3476 shares per $1,000 principal amount of notes, which is equivalent to a conversion price of approximately $ 41.07 per share, subject to adjustments.

We entered into transactions for a convertible note hedge (the “2023 Note Hedge”) and warrants (the “2023 Warrants”) concurrently with the issuance of the 2023 Notes.

The 2023 Notes may be settled in cash, stock, or a combination thereof, solely at our discretion.

We use the if-converted method for assumed conversion of the 2023 Notes to compute the weighted average shares of common stock outstanding for diluted earnings per share.

No principal payments are due on the 2023 Notes prior to maturity.

Other than restrictions relating to certain fundamental changes and consolidations, mergers or asset sales and customary anti-dilution adjustments, the indenture relating to the 2023 Notes includes customary terms and covenants, including certain events of default after which the 2023 Notes may be due and payable immediately.

For the twelve months ended December 31, 2021, holders of $ 57.7 million in aggregate principal amount of the 2023 Notes elected conversion at their option.

We settled these conversions by issuing a combination of common stock and treasury stock.

We issued 1,403,112 shares to settle the converted 2023 Notes during the twelve months ended December 31, 2021, of which 794,588 shares were issued out of treasury stock.

We received 967,380

shares of common stock from the exercise of a portion of the 2023 Note Hedge that we purchased concurrently with the issuance of the 2023 Notes, as described below.

For the twelve months ended December 31, 2022, holders of $ 17.5 million in aggregate principal amount of the 2023 Notes elected conversion at their option.

We settled these conversions using treasury stock.

We issued 425,552 treasury shares to settle the converted 2023 Notes.

We received 287,492 shares of common stock from the exercise of a portion of the 2023 Note Hedge that we purchased concurrently with the issuance of the 2023 Notes, as described below.

Conversion Rights at the Option of the Holders

Holders of the 2023 Notes have the right to require us to repurchase for cash all or a portion of their notes at 100 % of their principal amount, plus any accrued and unpaid interest, upon the occurrence of a fundamental change (as defined in the indenture relating to the notes).

We will also be required to increase the conversion rate for holders who convert their 2023 Notes in connection with certain fundamental changes occurring prior to the maturity date or following the delivery by Dexcom of a notice of redemption.

Holders of the 2023 Notes may convert all or a portion of their notes at their option prior to 5:00 p.m., New York City time, on the business day immediately preceding September 1, 2023, in multiples of $1,000 principal amount, only under the following circumstances:

(1) during any calendar quarter commencing after March 31, 2019 (and only during such calendar quarter), if the last reported sale price of Dexcom’s common stock for at least 20 trading days (whether or not consecutive) during the period of 30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter is greater than or equal to 130 % of the applicable conversion price of the 2023 Notes on each such trading day;

(2) during the five business day period after any five consecutive trading day period in which the trading price per $1,000 principal amount of the 2023 Notes for each day of that five -day consecutive trading day period was less than 98 % of the product of the last reported sale price of Dexcom’s common stock and the applicable conversion rate of the 2023 Notes on such trading day;

(3) if we call any or all of the 2023 Notes for redemption, at any time prior to the close of business on the scheduled trading day immediately preceding the redemption date;

(4) upon the occurrence of specified corporate transactions.

On or after September 1, 2023, until 5:00 p.m., New York City time, on the second scheduled trading day immediately preceding the maturity date, holders of the 2023 Notes may convert all or a portion of their notes regardless of the foregoing circumstances.

Circumstance (1) listed above occurred during the quarters ended December 31, 2021, March 31, 2022, June 30, 2022, and September 30, 2022.

As a result, the 2023 Notes were convertible at the option of the holder from January 1, 2022 through December 31, 2022.

Circumstance (1) listed above also occurred during the quarter ended December 31, 2022 and as a result, the 2023 Notes will remain convertible at the option of the holder from January 1, 2023 through March 31, 2023.

See above for a description of conversion activity related to the 2023 Notes.

Conversion Rights at Our Option

Dexcom did not have a right to redeem the 2023 Notes prior to December 1, 2021.

On or after December 1, 2021 and prior to September 1, 2023, Dexcom may redeem for cash all or part of the 2023 Notes, at its option, if the last reported sale price of our common stock has been at least 130 % of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period ending on, and including, the trading day immediately preceding the date on which Dexcom provides notice of redemption.

The redemption price will be equal to 100 % of the principal amount of the 2023 Notes to be redeemed plus accrued and unpaid interest to, but excluding, the redemption date.

Convertible Debt Summary

The following table summarizes the key details for our unsecured senior convertible notes due 2023 (the “2023 Notes”), unsecured senior convertible notes due 2025 (the “2025 Notes”), and unsecured senior convertible notes due 2028 (the “2028 Notes”):

Senior Convertible Notes

Offering Completion Date

Maturity Date

Stated Interest Rate

Aggregate Principal Amount

Net Proceeds (1)

Initial Conversion Rate (2)

(per $1,000 principal amount)

Conversion Price

Settlement Methods (3)

2023 Notes November 2018

December 1, 2023

$ 850.0 million

$ 836.6 million

24.3476 shares

Cash and/or shares

2025 Notes May 2020

November 15, 2025

$ 1.21 billion

$ 1.19 billion

6.6620 shares

Cash and/or shares

2028 Notes May 2023

$ 1.25 billion

$ 1.23 billion

6.1571 shares

Cash and/or shares

(1) Net proceeds is calculated by deducting the aggregate principal amount from the initial purchasers’ discounts and estimated costs directly related to the offering.

(2) Subject to adjustments as defined in the indentures.

(3) The senior convertible notes may be settled in cash, stock, or a combination thereof, solely at our discretion.

We use the if-converted method for assumed conversion of our senior convertible notes to compute the weighted average shares of common stock outstanding for diluted earnings per share.

No principal payments are due on the senior convertible notes prior to maturity.

Other than restrictions relating to certain fundamental changes and consolidations, mergers or asset sales and customary anti-dilution adjustments, the indenture relating to our senior convertible notes include customary terms and covenants, including certain events of default after which the senior convertible notes may be due and payable immediately.

2023 Note Hedge

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The cost of the 2023 Note Hedge was $ 218.9 million and we accounted for it as an equity instrument by recognizing $ 218.9 million in additional paid-in capital during 2018.

The 2023 Note Hedge will expire on December 1, 2023.

converted 2023 Notes if the daily volume-weighted average price per share of our common stock exceeds the strike price of the 2023 Note Hedge.

The 2023 Note Hedge expired on December 1, 2023.

The 2023 Note Hedge is expected to reduce the potential equity dilution upon any conversion of the 2023 Notes and/or offset any cash payments we are required to make in excess of the principal amount of converted 2023 Notes if the daily volume-weighted average price per share of our common stock exceeds the strike price of the 2023 Note Hedge.

The strike price of the 2023 Note Hedge initially corresponds to the conversion price of the 2023 Notes and is subject to certain adjustments under the terms of the 2023 Note Hedge.

An assumed exercise of the 2023 Note Hedge by us is considered anti-dilutive since the effect of the inclusion would always be anti-dilutive with respect to the calculation of diluted earnings per share.

See above for a description of conversion activity related to the 2023 Notes and shares received as the result of exercising a portion of the 2023 Note Hedge.

See below for a description of conversion activity related to the 2023 Notes and shares received as the result of exercising the remaining portion of the 2023 Note Hedge.

2023 Warrants

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We use the treasury share method for assumed conversion of the 2023 Warrants when computing the weighted average common shares outstanding for diluted earnings per share.

0.25 % Senior Convertible Notes due 2025

In May 2020, we completed an offering of $ 1.21 billion aggregate principal amount of unsecured senior convertible notes with a stated interest rate of 0.25 % and a maturity date of November 15, 2025 (the “2025 Notes”).

The net proceeds from the offering, after deducting initial purchasers’ discounts and estimated costs directly related to the offering, were approximately $ 1.19 billion.

The initial conversion rate of the 2025 Notes is 6.6620 shares per $1,000 principal amount of notes, which is equivalent to a conversion price of approximately $ 150.11 per share, subject to adjustments.

The 2025 Notes may be settled in cash, stock, or a combination thereof, solely at our discretion.

We use the if-converted method for assumed conversion of the 2025 Notes to compute the weighted average shares of common stock outstanding for diluted earnings per share.

No principal payments are due on the 2025 Notes prior to maturity.

Other than restrictions relating to certain fundamental changes and consolidations, mergers or asset sales and customary anti-dilution adjustments, the indenture relating to the 2025 Notes includes customary terms and covenants, including certain events of default after which the 2025 Notes may be due and payable immediately.

2028 Capped Call Transactions

In May 2023, in connection with the offering of the 2028 Notes, we entered into privately negotiated capped call transactions (the “2028 Capped Calls”) with certain financial institutions.

The 2028 Capped Calls will cover, subject to anti-dilution adjustments substantially similar to those applicable to the 2028 Notes, the number of shares of our common stock that will initially underlie the 2028 Notes.

The 2028 Capped Calls are expected generally to reduce potential dilution to our common stock upon conversion of the 2028 Notes and/or offset any cash payments that we are required to make in excess of the principal amount of converted 2028 Notes, as the case may be, with such reduction and/or offset subject to a cap.

The 2028 Capped Calls have an initial cap price of $ 212.62 per share, subject to adjustments, which represents a premium of 80 % over the closing price of our common stock of $ 118.12 per share on the Nasdaq Global Select Market on May 2, 2023.

The cost to purchase the 2028 Capped Calls of $ 101.3 million was recorded as a reduction to additional paid-in capital in our consolidated balance sheets as the 2028 Capped Calls met the criteria for classification in stockholders’ equity.

Conversion Activity for Senior Convertible Notes

For the 2023 Notes, Circumstance 1 as listed below occurred during the quarters ended December 31, 2022, March 31, 2023, and June 30, 2023.

As a result, the 2023 Notes were convertible at the option of the holders from January 1, 2023 through August 31, 2023.

Circumstance 5 was applicable to the 2023 Notes beginning September 1, 2023.

The 2023 Notes matured on December 1, 2023 and were completely settled.

See the following table for the details on the conversion activity:

Fiscal Period

Converted Notes Aggregate Principal Amount Converted Shares Issued for Settlement Shares Received from Exercise of 2023 Note Hedge

1/1/2022 - 12/31/2022

$ 17.5 million

1/1/2023 - 12/31/2023

$ 774.8 million

Conversion Rights for Senior Convertible Notes

Holders of our senior convertible notes have the right to require us to repurchase for cash all or a portion of their notes at 100 % of their principal amount, plus any accrued and unpaid interest, upon the occurrence of a fundamental change (as defined in the indenture relating to the notes).

We will also be required to increase the conversion rate for holders who convert their notes in connection with certain fundamental changes occurring prior to the maturity date or following the delivery by Dexcom of a notice of redemption.

The following table outlines the conversion options related for each of our senior convertible notes:

Summary of Conversions Rights at the Option of the Holders for the 2023, 2025, and 2028 Notes (“Notes”)

Conversion Rights at the Option of the Holders

In the event of a fundamental change (as defined in the indenture related to the 2025 Notes), holders of the 2025 Notes have the right to require us to repurchase for cash all or a portion of their notes at a price equal to 100 % of the principal amount of the 2025 Notes, plus any accrued and unpaid interest.

Holders of the 2025 Notes who convert their notes in connection with a make-whole fundamental change (as defined in the indenture) or following the delivery by Dexcom of a notice of redemption are, under certain circumstances, entitled to an increase in the conversion rate.

Prior to 5:00 p.m., New York City time, on the business day immediately preceding August 15, 2025, holders of the 2025 Notes may convert all or a portion of their notes, in multiples of $1,000 principal amount, only under the following circumstances:

(1) during any calendar quarter commencing after September 30, 2020 (and only during such calendar quarter), if the last reported sale price of Dexcom’s common stock for at least 20 trading days (whether or not consecutive) during the period of 30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter is greater than or equal to 130 % of the applicable conversion price of the Notes on each such trading day;

(2) during the five business day period after any five consecutive trading day period in which the trading price per $1,000 principal amount of the Notes for each day of that five day consecutive trading day period was less than 98 % of the product of the last reported sale price of Dexcom’s common stock and the applicable conversion rate of the Notes on such trading day;

(3) if we call any or all of the Notes for redemption, at any time prior to the close of business on the scheduled trading day immediately preceding the redemption date;

(4) upon the occurrence of specified corporate transactions.

On or after August 15, 2025, until 5:00 p.m., New York City time, on the business day immediately preceding the maturity date, holders of the 2025 Notes may convert all or a portion of their notes regardless of the foregoing circumstances.

Conversion Rights at Our Option

Dexcom may not redeem the 2025 Notes prior to May 20, 2023.

On or after May 20, 2023 and prior to August 15, 2025, Dexcom may redeem for cash all or part of the 2025 Notes, at its option, if the last reported sale price of our common stock has been at least 130 % of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period ending on, and including, the trading day immediately preceding the date on which Dexcom provides notice of redemption.

Holders of the Notes have the ability to convert all or a portion of their notes in multiples of $1,000 principal amount, at their option prior to 5:00 p.m., New York City time, on the business day immediately preceding September 1, 2023, August 15, 2025, and February 15, 2028 for the 2023 Notes, 2025 Notes, and 2028 Notes, respectively, only under the following circumstances:

Circumstance 1 (1)

During any calendar quarter commencing after the applicable period (and only during such calendar quarter), if the last reported sale price of Dexcom’s common stock for at least 20 trading days (whether or not consecutive) during the period of 30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter is greater than or equal to 130 % of the applicable conversion price for the Notes on each applicable trading day

Circumstance 2

During the five business day period after any five consecutive trading day period in which the trading price per $1,000 principal amount of the Notes for each trading day of that five consecutive trading day period was less than 98 % of the product of the last reported sale price of Dexcom’s common stock and the applicable conversion rate of the Notes on each such trading day

Circumstance 3

If we call any or all of the Notes for redemption, at any time prior to the close of business on the scheduled trading day immediately preceding the redemption date (only with respect to the notes called or deemed called for redemption)

Circumstance 4

Upon the occurrence of specified corporate events

Circumstance 5 (2)

For the 2023 Notes and 2028 Notes, until 5:00 p.m., New York City time, on the second scheduled trading day immediately preceding the maturity date (for the 2025 Notes, it is until the business day immediately preceding the maturity date), holders of the Notes may convert all or a portion of their notes regardless of the foregoing circumstances

(1) Circumstance 1 is available after the calendar quarter ending March 31, 2019, September 30, 2020, and September 30, 2023 for the 2023 Notes, 2025 Notes, and 2028 Notes, respectively.

(2) Circumstance 5 is available on or after September 1, 2023, August 15, 2025, and February 15, 2028 for the 2023 Notes, 2025 Notes, and 2028 Notes, respectively.

Summary of Conversion Right at Option of the Company for the 2023, 2025, and 2028 Notes

Conversion Right at Our Option (1)

Dexcom may redeem for cash all or part of the Notes, at its option, if the last reported sale price of our common stock has been at least 130 % of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period ending on, and including, the trading day immediately preceding the date on which Dexcom provides notice of redemption.

The redemption price will be equal to 100 % of the principal amount of the Notes to be redeemed plus accrued and unpaid interest to, but excluding, the redemption date

(1) Dexcom does not have the right to redeem the Notes prior to December 1, 2021, May 20, 2023, and May 20, 2026 for the 2023 Notes, 2025 Notes, and 2028 Notes, respectively.

Dexcom has the right to redeem the notes on or after December 1, 2021 and prior to September 1, 2023 for the 2023 Notes, on or after May 20, 2023 and prior to August 15, 2025 for the 2025 Notes, and on or after May 20, 2026 and prior to February 15, 2028 for the 2028 Notes.

Revolving Credit Agreement

Terms of the Revolving Credit Agreement

In October 2021, we entered into a Second Amended and Restated Credit Agreement (the "Amended Credit Agreement"), which amended and restated the credit agreement we had previously entered into in December 2018 and amended in May 2020 (the “Credit Agreement”).

In June 2023, we entered into the First Amendment to the Second Amended and Restated Credit Agreement (the "Amended Credit Agreement"), which we had previously entered into in October 2021.

The Amended Credit Agreement is a five-year revolving credit facility, that provides for an available principal amount of $ 200.0 million which can be increased up to $ 500.0 million at our option subject to customary conditions and approval of our lenders (the “Credit Facility”).

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Revolving loans under the Amended Credit Agreement bear interest at our choice of one of three base rates plus a range of applicable rates that are based on our leverage ratio.

The first base rate is the Alternate Base Rate (“ABR”) and loans comprising each ABR borrowing shall bear interest at the ABR plus the applicable rate between 0.375 % to 1.000 %.

The ABR is the highest of (a) the prime rate last quoted by The Wall Street Journal, (b) the Federal Reserve Bank of New York rate plus one half of 1%, and (c) the Adjusted London Interbank Offered Rate (“LIBO Rate”) for a one month interest period plus 1 %.

The second base rate is the Term Benchmark rate and loans comprising each Term Benchmark borrowing shall bear interest at the Adjusted LIBO Rate, the Adjusted Euro Interbank Offered Rate, the Adjusted Stockholm Interbank Offered Rate, the Adjusted Canadian Dollar Offered Rate, Adjusted Australian Dollar Rate, the Adjusted Bank Bill Benchmark Rate or the Adjusted Tokyo Interbank Offered Rate, as applicable based on the currency denomination borrowed, plus the applicable rate between 1.375 % to 2.000 % .

The third base rate is the Daily Simple RepoFunds Rate (“RFR”) and loans comprising each Daily Simple RFR Loan shall bear interest at a rate per annum equal to the applicable Daily Simple RFR plus the applicable rate between 1.375 % to 2.000 % plus an additional 0.0326 %.

We will also pay a commitment fee of between 0.175 % and 0.250 %, payable quarterly in arrears, on the average daily unused amount of the revolving facility based on our leverage ratio.

The minimum and maximum range of applicable rates per annum with respect to any ABR Loan or, Term Benchmark Revolving Loan, RFR Revolving Loan (as defined in the Amended Credit Agreement) under the captions “ABR Spread”, “Term Benchmark/CDOR Spread”, “RFR Spread”, or “Unused Commitment Fee Rate”, respectively, are outlined in the following table:

Range ABR Spread Term Benchmark/CDOR Spread and RFR Spread Unused Commitment Fee Rate

Minimum 0.375 %

Maximum 1.000 %

Our obligations under the Amended Credit Agreement are guaranteed by our existing and future wholly-owned domestic subsidiaries, and are secured by a first-priority security interest in substantially all of the assets of Dexcom and the guarantors, including all or a portion of the equity interests of our domestic subsidiaries and first-tier foreign subsidiaries but excluding real property and intellectual property (which is subject to a negative pledge).

The Amended Credit Agreement contains covenants that limit certain indebtedness, liens, investments, transactions with affiliates, dividends and other restricted payments, subordinated indebtedness and amendments to subordinated indebtedness documents, and sale and leaseback transactions of Dexcom or any of its domestic subsidiaries.

Amended Credit Agreement also requires us to maintain a maximum leverage ratio and a minimum fixed charge coverage ratio.

The Amended Credit Agreement also requires us to maintain a maximum leverage ratio and a minimum fixed charge coverage ratio.

We were in compliance with these covenants as of December 31, 2023.

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Leases and Other Commitments

We lease office, manufacturing and warehouse space facilities under various domestic and international non-cancellable operating and finance lease arrangements.

We have leases for certain machinery and facilities, including office, manufacturing and warehouse space facilities under various domestic and international operating and finance lease arrangements.

We also have land leases in Penang, Malaysia that expire through 2082 for the build-out of our international manufacturing facility.

Our leases, excluding our land leases in Penang, Malaysia, have remaining lease terms of up to eighteen years .

Our leases, excluding our land leases in Malaysia, have remaining lease terms of up to seventeen years .

Some of the leases include one or more options to extend the leases for up to five years per option.

Options to extend or terminate the lease are included in the lease liability if they are reasonably certain of being exercised.

Leases are classified as operating or financing at lease commencement.

Operating lease right-of-use assets and lease liabilities are presented separately in our consolidated balance sheets.

Our lease terms include options to extend or terminate the lease when it is reasonably certain that we will exercise that option.

As of December 31, 2023, the maturities of our operating and finance lease liabilities were as shown in the table below:

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Long-term portion $ 80.1 $ 58.6

(1) Total future lease cost excludes $ 0.6 million of legally binding minimum lease payments for leases signed but not yet commenced .

Certain lease agreements require us to return designated areas of leased space to its original condition upon termination of the lease agreement, for which we record an asset retirement obligation and a corresponding capital asset in an amount equal to the estimated fair value of the obligation.

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Total lease cost $ 43.3 $ 49.3 $ 38.7

(1) Variable lease costs are primarily related to common area maintenance charges and property taxes .

As the result of the Company’s transition to a flexible working environment, we vacated a building in San Diego during the fourth quarter and made it available for sublease.

As the result of the Company’s transition to a flexible working environment, we vacated a building in San Diego during the fourth quarter of 2022 and made it available for sublease.

This resulted in an impairment indicator.

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Finance leases 5.3 % 5.1 % 5.1 %

Amortization of operating lease right-of-use asset included in cash flows from operating activities in our consolidated statements of cash flows was $ 16.4 million for the twelve months ended December 31, 2022, $ 18.0 million for the twelve months ended December 31, 2021 and $ 12.4 million for the twelve months ended December 31, 2020.

Amortization of operating lease right-of-use asset included in cash flows from operating activities in our consolidated statements of cash flows was $ 16.5 million , $ 16.4 million, and $ 18.0 million for the twelve months ended December 31, 2023, 2022 and 2021, respectively.

Purchase Commitments

We are party to various purchase arrangements related to our manufacturing and research and development activities.

We are party to various purchase arrangements related to our operational, manufacturing, and research and development activities.

We had approximately $ 793.0 million as of December 31, 2023 and $ 442.7 million as of December 31, 2022 of open purchase orders and contractual obligations in the ordinary course of business, the majority of which are due within one year .

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In addition, from time to time we may bring claims or initiate lawsuits against various third parties with respect to matters arising out of the ordinary course of our business, including commercial and employment related matters.

During the year ended December 31, 2022, we and certain Abbott Diabetes Care, Inc.

(“Abbott”) entities served complaints for patent infringement, validity and other patent related actions against each other in multiple jurisdictions, inside and outside the United States.

We intend to vigorously pursue our claims and defenses in these cases to protect our intellectual property and to defend against Abbott’s infringement allegations.

Between June 2021 through the year ended December 31, 2023, we and certain Abbott Diabetes Care, Inc.

(“Abbott”) entities have served patent infringement complaints against each other in multiple jurisdictions against certain continuous glucose monitoring products of each company.

Due to uncertainty surrounding patent litigation procedures initiated by Dexcom and Abbott throughout multiple jurisdictions, we are unable to reasonably estimate the ultimate outcome of any of the litigation matters at this time.

We intend to protect our intellectual property and defend against Abbott’s claims vigorously in all of these actions.

We do not believe we are party to any other currently pending legal proceedings, the outcome of which could have a material adverse effect on our business, financial condition, or results of operations.

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Twelve Months Ended

(In millions)

2023 2022 2021

(In millions) As Adjusted As Adjusted

United States $ 732.4 $ 463.5 $ 318.2

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Twelve Months Ended

(In millions)

2023 2022 2021

(In millions) As Adjusted As Adjusted

Federal $ 149.1 $ 32.6 $ 5.7

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California R&D credits 111.9 96.4 Indefinite

California AMT Credits

$ 0.5 $ — Indefinite

Utilization of net operating losses and credit carryforwards is subject to an annual limitation due to ownership change limitations provided by Section 382 and 383 of the Internal Revenue Code of 1986, as amended, and similar state provisions.

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Realization of deferred tax assets is dependent upon future earnings in applicable tax jurisdictions.

(In millions) As Adjusted

(In millions) 2023 2022

Deferred tax assets:

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Accrued liabilities and reserves 91.0 105.3

Collaborative agreement milestone accrual (1)

Convertible debt 20.6 9.3

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Net deferred tax assets (liabilities) $ 416.6 $ 336.3

(1) This amount is related to the $ 87.1 million charge recorded in the fourth quarter of 2021 associated with our Restated Collaboration Agreement with Verily, as discussed in Note 2 “Development and Other Agreements” to the consolidated financial statements.

We maintain a valuation allowance of $ 78.7 million against our California research and development tax credits and certain foreign intangible assets.

During the year ended December 31, 2022, the valuation allowance increased by $ 8.9 million primarily due to generation of California research and development tax credits.

In August 2023, we completed an intra-entity asset transfer of certain intellectual property between two of our wholly owned foreign subsidiaries to align our structure with the expansion of international business operations.

We recorded a $ 193.2 million deferred tax asset, which represents the difference between the basis of the intellectual property for financial statement and tax purposes, applying the appropriate enacted statutory tax rate.

Based on available evidence, management believes it is not more-likely-than-not that the additional foreign deferred tax asset will be realizable, and is therefore, fully offset by a valuation allowance.

We maintain a valuation allowance of $ 264.3 million against our California research and development tax credits, foreign tax credits, and certain foreign intangible assets.

During the year ended December 31, 2023, the valuation allowance increased by $ 185.5 million primarily due to generation of California research and development tax credits, and establishing a valuation allowance against the fair value of certain intellectual property located in Ireland in connection with the intra-entity transfer of this property.

The reconciliation between our effective tax rate on income (loss) from continuing operations and the statutory rate is as follows:

Twelve Months Ended

2022 2021 2020

(In millions) As Adjusted As Adjusted

(In millions) 2023 2022 2021

federal statutory tax rate $ 149.2 $ 82.1 $ 53.9

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Change in statutory tax rates 19.4 1.0 ( 10.0 )

Intellectual property transfer

Other 0.3 1.3 ( 0.4 )

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Balance at January 1, 2021

Decreases related to prior year tax positions ( 0.9 )

Increases related to current year tax positions 8.0

Balance at December 31, 2020 36.6

Increases related to prior year tax positions

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Balance at December 31, 2022 52.0

Increases related to prior year tax positions

Increases related to current year tax positions

Balance at December 31, 2023 $ 59.4

Of the total unrecognized tax benefits at December 31, 2023, 2022, and 2021, $ 37.0 million, $ 32.5 million and $ 29.5 million, respectively, would affect our annual effective tax rate if recognized.

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Canada 2019 - 2023

We operate under a tax holiday in the Philippines, which is effective through December 31, 2023, and may be extended for another three years if certain additional requirements are satisfied.

We operate under a tax holiday in the Philippines, which is effective through April 30, 2023, and may be extended for another three years if certain additional requirements are satisfied.

The tax holiday is conditional upon remaining in good standing, committing no violation of Philippine Economic Zone Authority Rules and Regulations, pertinent circulars and directives.

The impact of this tax holiday was immaterial in in 2022, 2021, and 2020.

We have been granted a tax holiday by the Malaysian Investment Development Authority (MIDA) in Malaysia, which will not be triggered until we commence operations.

After the expiration of the tax holiday we are still entitled to a preferential rate for a period of 10 years.

Therefore from April 30, 2023 through December 31, 2023 we are still subject to a reduced rate of tax.

The impact of this tax holiday and preferential rate was immaterial in in 2023, 2022, and 2021.

We have been granted an investment tax allowance incentive by the Malaysian Investment Development Authority (MIDA) in Malaysia, which will not be triggered until we meet certain milestones related to the commencement of operations.

The tax incentive had no effect on foreign taxes during 2023, 2022, or 2021.

As of December 31, 2023 the tax holiday in Malaysia has not yet been triggered, therefore we are subject to the statutory rate and the related tax expense has been included in total tax expense for 2023.

We have approximately $ 36.5 million of undistributed earnings attributable to operations in our controlled foreign corporations as of December 31, 2023.

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Employee Benefit Plans and Stockholders’ Equity

We have a defined contribution 401(k) retirement plan (the 401(k) Plan) covering substantially all employees in the United States that meet certain age requirements.

Defined Contribution Plans

We offer various defined contribution plans for U.S.

and international employees.

The largest defined contribution plan is the 401(k) retirement plan (the 401(k) Plan) covering substantially all employees in the United States that meet certain age requirements.

Employees who participate in the 401(k) Plan may contribute up to 90 % of their compensation each year, subject to Internal Revenue Service limitations and the terms and conditions of the plan.

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We match 50 % of contributions up to 6 % of eligible compensation.

Total matching contributions were $ 11.1 million, $ 9.9 million and $ 6.7 million for the twelve months ended December 31, 2022, 2021 and 2020, respectively.

Total matching contributions under the 401(k) Plan were $ 14.9 million, $ 11.1 million and $ 9.9 million for the twelve months ended December 31, 2023, 2022 and 2021, respectively.

Our contributions for other defined contribution plans are not significant for the twelve months ended December 31, 2023, 2022 and 2021.

Employee Stock Purchase Plan (“ESPP”)

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The 2015 ESPP shall continue until the earlier to occur of (a) termination of the 2015 ESPP by our Board of Directors, (b) issuance of all of the shares of common stock reserved for issuance under the plan, or (c) May 28, 2025.

We issued 292,552 , 239,240 and 356,776 shares of common stock under the 2015 ESPP during the twelve months ended December 31, 2022, 2021 and 2020, respectively.

We issued approximately 0.3 million, 0.3 million and 0.3 million shares of common stock under the 2015 ESPP during the twelve months ended December 31, 2023, 2022 and 2021, respectively.

As of December 31, 2023, approximately 2.5 million shares remained available for future issuance under the 2015 ESPP.

Equity Incentive Plans

In May 2015, we adopted the Amended and Restated 2015 Equity Incentive Plan (the 2015 Plan), which replaced our 2005 Equity Incentive Plan and provides for the grant of incentive and nonstatutory stock options, restricted stock, stock bonuses, stock appreciation rights, restricted stock units or RSUs, and performance stock units or PSUs to employees, directors or consultants of the Company.

In May 2015, we adopted the Amended and Restated 2015 Equity Incentive Plan (the 2015 Plan), which replaced our 2005 Equity Incentive Plan and provides for the grant of incentive and nonstatutory stock options, restricted stock, stock bonuses, stock appreciation rights, RSUs, and PSUs to employees, directors or consultants of the Company.

On May 30, 2019, our stockholders approved an increase to the maximum number of shares that may be issued under the 2015 Plan.

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PSUs are granted to a group of senior officers and the number of shares of our common stock to be received at vesting will range from 0 % to 200 % of the target award based on the achievement of pre-established performance and market goals.

PSUs vest three years from the date of grant, subject to continued employment through that date.

PSUs vest approximately three years from the date of grant, subject to continued employment through that date and certification by the Compensation Committee .

Share Repurchase Program and Treasury Shares

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The following table summarizes our treasury share activity for the periods shown.

No treasury share activity occurred during the twelve months ended December 31, 2020.

Twelve Months Ended

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Shares repurchased under the 2022 Share Repurchase Program

On July 26, 2022, a duly authorized committee of our Board of Directors authorized and approved a share repurchase program of up to $ 700.0 million of our outstanding common stock, with a repurchase period ending no later than June 30, 2023 (the “Share Repurchase Program”).

Shares of common stock repurchased under the Share Repurchase Program become treasury shares.

Repurchases of our common stock under the Share Repurchase Program may be made from time to time, on the open market, in privately negotiated transactions or by other methods, at our discretion, and in accordance with the limitations set forth in Rule 10b-18 promulgated under the Securities Exchange Act of 1934, as amended, and other applicable federal and state laws and regulations.

On August 1, 2022, we entered into an accelerated share repurchase (“ASR”) agreement with JPMorgan Chase Bank, National Association (“JP Morgan”) to repurchase up to $ 700.0 million of our common stock on an accelerated basis through September 29, 2022.

Shares repurchased under the 2023 Share Repurchase Program

Shares repurchased with 2028 Notes proceeds

On July 26, 2022, a duly authorized committee of our Board of Directors authorized and approved a share repurchase program of up to $ 700.0 million of our outstanding common stock, with a repurchase period that ended on June 30, 2023 (the “2022 Share Repurchase Program”).

Shares of common stock repurchased under the 2022 Share Repurchase Program became treasury shares.

We repurchased approximately $ 557.7 million of our outstanding common stock throughout the duration of the 2022 Share Repurchase Program.

The 2022 Share Repurchase Program and the remaining authorization of approximately $ 142.3 million expired on June 30, 2023.

There were no share repurchases under the 2022 Share Repurchase Program in 2023.

On August 1, 2022, we entered into an accelerated share repurchase agreement (“2022 ASR”) with JPMorgan Chase Bank, National Association (“JP Morgan”) to repurchase up to $ 700.0 million of our common stock on an accelerated basis through September 29, 2022.

On August 3, 2022, we paid $ 700.0 million to JP Morgan and received an initial delivery of approximately 3.0 million shares of common stock.

The final notional amount under the ASR agreement was $ 557.7 million or approximately 6.6 million shares of our common stock based on the daily average volume-weighted average price of our common stock during the term of the ASR for the period from August 1, 2022 to August 31, 2022, less a discount.

The ASR agreement concluded on September 1, 2022.

The ASR was a forward contract indexed to our own common stock.

The forward contract met all of the applicable criteria for equity classification, so we did not account for it as a derivative instrument.

The final notional amount under the 2022 ASR was $ 557.7 million or approximately 6.6 million shares of our common stock based on the daily average volume-weighted average price of our common stock during the term of the 2022 ASR for the period from August 1, 2022 to August 31, 2022, less a discount.

The 2022 ASR concluded on September 1, 2022.

On October 24, 2023, our Board of Directors authorized and approved a share repurchase program of up to $ 500.0 million of our outstanding common stock, with a repurchase period ending no later than October 31, 2024 (the “2023 Share Repurchase Program”).

On October 31, 2023, we entered into an accelerated share repurchase agreement (“2023 ASR”) with Bank of America, N.A.

(“BofA”) to repurchase $ 500.0 million of our common stock on an accelerated basis through December 14, 2023.

On October 31, 2023, we paid $ 500.0 million to BofA and received an initial delivery of approximately 4.7 million shares of common stock.

The final notional amount under the 2023 ASR was $ 500.0 million or approximately 4.7 million shares of our common stock based on the daily average volume-weighted average price of our common stock during the term of the 2023 ASR for the period from November 1, 2023 to December 14, 2023, less a discount.

The 2023 ASR concluded on December 14, 2023.

After completion of the repurchases under the 2023 ASR, no shares remained available for additional repurchases under our 2023 Share Repurchase Program.

The 2022 ASR and 2023 ASR were forward contracts indexed to our own common stock.

The forward contracts met all of the applicable criteria for equity classification, so we did not account for them as a derivative instrument.

We have reflected the shares delivered to us by the financial institution as treasury shares as of the dates they were delivered to us in computing weighted average shares outstanding for both basic and diluted net income per share.

In May 2023, we used a portion of the proceeds of the 2028 Notes to repurchase 1.6 million shares of our common stock for $ 188.7 million, excluding excise tax due under the Inflation Reduction Act of 2022, for an average per share price of $ 118.12 , via privately negotiated transactions, independent of the 2022 Share Repurchase Program.

Repurchased shares of our common stock are held as treasury shares until they are reissued or retired.

We have not yet determined the ultimate disposition of repurchased shares and consequently we continue to hold them as treasury shares rather than retiring them.

Future stock repurchases under the Share Repurchase Program are at the discretion of our management, and authorization of future stock repurchase programs is subject to the final determination of our Board of Directors.

The Share Repurchase Program does not obligate us to repurchase any dollar amount or number of shares, and the program may be extended, modified, suspended, or discontinued at any time.

Stock Options

We have not granted any stock options since 2010.

As of December 31, 2022 and December 31, 2021, we had no stock options outstanding.

The total intrinsic value of stock options exercised during the twelve months ended December 31, 2020 was $ 7.9 million.

Authorization of future stock repurchase programs is subject to the final determination of our Board of Directors.

Equity Award Activity

All periods presented have also been adjusted to reflect the four -for-one stock split.

Refer to Note 1, “Organization and Significant Accounting Policies,” to the consolidated financial statements for further information.

A summary of RSU and PSU activity under the 2015 Plan for the twelve months ended December 31, 2023, 2022 and 2021 is as follows:

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Share-based Compensation

Our share-based compensation expense is associated with RSUs, PSUs, and the 2015 ESPP.

Our share-based compensation expense is associated with RSUs, PSUs, and ESPP.

The following table summarizes the share-based compensation expense included in our consolidated statements of operations for the periods shown.

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Total share-based compensation expense $ 150.8 $ 126.5 $ 113.4

Total tax benefit related to share-based compensation expense

$ 40.0 $ 43.2 $ 71.1

At December 31, 2023, unrecognized estimated compensation costs related to RSUs and PSUs totaled $ 199.5 million and are expected to be recognized over a weighted-average period of approximately 1.7 years.

We value RSUs at the date of grant using the intrinsic value method.

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Expected life (in years) 0.5 0.5 0.5

At December 31, 2022, unrecognized estimated compensation costs related to RSUs, PSUs, and the 2015 ESPP totaled $ 175.5 million and are expected to be recognized through 2026.

Business Segment and Geographic Information

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We have determined that disaggregating revenue into these categories achieves the ASC Topic 606 disclosure objectives of depicting how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors.

Dexcom is domiciled in the United States.

We sell our CGM systems through a direct sales organization and through distribution arrangements that allow distributors to sell our products.

Revenue by geographic region

During the twelve months ended December 31, 2023, 2022 and 2021, no individual country outside the United States generated revenue that represented more than 10% of our total revenue.

The table below sets forth revenue by our two primary geographical markets, the United States and outside of the United States, based on the geographic location to which we deliver the components.

The majority of our long-lived assets are located in the United States.

The following table sets forth revenue by our two primary geographical markets, the United States and International, based on the geographic location to which we deliver the components, for the periods shown:

Twelve Months Ended December 31,

2023 2022 2021

(Dollars in millions) Amount %

(In millions) Amount %

of Total Amount %

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United States $ 2,625.3 72 % $ 2,142.0 74 % $ 1,849.4 76 %

Outside of the United States 767.8 26 % 599.1 24 % 417.2 22 %

International 997.0 28 % 767.8 26 % 599.1 24 %

Total revenue $ 3,622.3 100 % $ 2,909.8 100 % $ 2,448.5 100 %

Revenue by customer sales channel

We sell our CGM systems through a direct sales organization and through distribution arrangements that allow distributors to sell our products.

The following table sets forth revenue by major sales channel for the twelve months ended December 31, 2023, 2022 and 2021:

1 unchanged sentence

2023 2022 2021

(Dollars in millions) Amount %

(In millions) Amount %

of Total Amount %

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Total revenue $ 3,622.3 100 % $ 2,909.8 100 % $ 2,448.5 100 %

Geographic Information

The following table presents our long-lived assets, which consists of property and equipment, net, and operating lease right-of-use assets by geographic region:

(In millions) 2023 2022

United States

$ 544.1 $ 686.1

Other countries

Total long-lived assets

$ 1,184.5 $ 1,135.6

SCHEDULE II – VALUATION AND QUALIFYING ACCOUNTS

(In millions)

Allowance for doubtful accounts

Balance at December 31, 2019 $ 5.8

Provision for doubtful accounts 3.2

Write-offs and adjustments ( 2.1 )

Recoveries 0.3

Balance at December 31, 2020 $ 7.2

Twelve Months Ended

Allowance for doubtful accounts 2023 2022 2021

Balance at December 31, 2020 $ 7.2

Beginning Balance

$ 7.3 $ 5.4 $ 7.2

Provision for doubtful accounts 2.0 2.4 ( 1.4 )

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Recoveries — — 0.1

Balance at December 31, 2021 $ 5.4

Allowance for doubtful accounts

Balance at December 31, 2021 $ 5.4

Provision for doubtful accounts 2.4

Write-offs and adjustments ( 0.5 )

Balance at December 31, 2022 $ 7.3

Ending Balance

$ 9.3 $ 7.3 $ 5.4

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures