What changed in this filing

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Item 9A. Controls and Procedures

2025-02-18 compared with 2024-02-08 · 294 added, 286 removed, 1234 unchanged (32% of the section changed)

1 unchanged sentence

Evaluation of Disclosure Controls and Procedures

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.

Based on their evaluation as of December 31, 2023, our Chief Executive Officer and our Chief Financial Officer concluded that our disclosure controls and procedures were effective as of such date for this purpose.

Regulations under the Exchange Act require public companies to maintain “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act.

Disclosure controls and procedures include, without limitation, controls and other procedures that are designed to ensure that information required to be disclosed in the reports that we file or submit under the Exchange Act is accumulated and timely communicated to management, including our Chief Executive Officer (our principal executive officer) and Chief Financial Officer (our principal financial officer), recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms.

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

Based on their evaluation as of December 31, 2024, our Chief Executive Officer and our Chief Financial Officer concluded that our disclosure controls and procedures were effective at a reasonable assurance level as of such date.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting during our last fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

There were no changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the most recently completed fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Management’s Report on Internal Control over Financial Reporting

9 unchanged sentences

Limitation on Effectiveness of Controls

It should be noted that any system of controls, however well designed and operated, can provide only reasonable, and not absolute, assurance that the objectives of the system are met.

It should be noted that any system of controls, including ours, however well designed and operated, can provide only reasonable, and not absolute, assurance that the objectives of the system are met.

The design of any control system is based, in part, upon the benefits of the control system relative to its costs.

8 unchanged sentences

(the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2024, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of DexCom, Inc.

as of December 31, 2023 and 2022, the related consolidated statements of operations, comprehensive income, stockholders’ equity and cash flows for each of the three years in the period ended December 31, 2023, and the related notes and financial statement schedule listed in the Index at Item 15(a) and our report dated February 8, 2024 expressed an unqualified opinion thereon.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2024 and 2023, the related consolidated statements of operations, comprehensive income, stockholders’ equity and cash flows for each of the three years in the period ended December 31, 2024, and the related notes and financial statement schedule listed in the Index at Item 15(a) and our report dated February 14, 2025 expressed an unqualified opinion thereon.

Basis for Opinion

19 unchanged sentences

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.

During the three months ended December 31, 2024, no Section 16 officers or directors adopted , modified, or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement” (each as defined in Item 408 of Regulation S-K of the Exchange Act).

ITEM 9C - DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS

4 unchanged sentences

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 Business Ethics,” 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://investors.dexcom.com/governance/governance-documents.

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

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 the Audit Committee of the Board of Directors required by this Item is incorporated by reference to the sections of the Proxy Statement entitled “Committees of the Board and Meetings” and “Meetings of the Board of Directors;

Director Attendance.”

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.

Anti-Hedging” 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 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.”

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 “Executive Compensation,” “2024 Summary Compensation Table,” “Grants of Plan-Based Awards for 2024,” “Outstanding Equity Awards at December 31, 2024,” “2024 Option Exercises and Stock Vested,” “Executive Nonqualified Deferred Compensation Plan,” “Severance and Change in Control Arrangements,” “2024 Director Compensation Table,” “Risks from Compensation Policies and Practices,” “Chief Executive Officer Pay Ratio,” “Compensation Committee Interlocks and Insider Participation,” and “Compensation Committee Report.”

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

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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 the section in the Proxy Statement entitled “Corporate Governance - Director Independence”.

The information required by this Item with respect to director independence is incorporated by reference to the section in the Proxy Statement entitled “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 Independent Registered Public Accounting Firm.”

The information concerning principal accountant fees and services required by this Item is incorporated by reference to the section in the Proxy Statement entitled “Proposal No.

2 – Ratification of Independent Registered Public Accounting Firm.”

ITEM 15 - EXHIBIT AND FINANCIAL STATEMENT SCHEDULES

11 unchanged sentences

3.2 Amended and Restated Bylaws of DexCom, Inc.

8-K 000-51222 May 21, 2021 3.3

10-Q 000-51222 October 24, 2024 3.1

4.1 Form of Specimen Certificate for DexCom, Inc.

17 unchanged sentences

10-Q 000-51222 April 27, 2016 10.36

10.3* DexCom, Inc.

Executive Deferred Compensation Plan.

6 unchanged sentences

10-K 000-51222 February 11, 2021 10.43

10.6* DexCom, Inc.

Incentive Bonus Plan.

9 unchanged sentences

10-K 000-51222 February 9, 2023 10.18

10.10* DexCom, Inc.

Amended and Restated Severance and Change in Control Plan.

000-51222 May 19, 2023 10.1

8-K 000-51222 May 19, 2023 10.1

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

2 unchanged sentences

10.12* 2015 Employee Stock Purchase Plan and forms of subscription agreements.

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

10-K 000-51222 February 8, 2024 10.12

10.13** 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 .

10-K 000-51222 February 8, 2024 10.14

10.14** Warrant Termination Agreement between DexCom, Inc.

and Bank of America, N.A., dated February 13, 2024.

8-K 000-51222 February 15, 2024 10.1

10.15* Severance Agreement and General Release, dated October 22, 2024, between DexCom, Inc.

and Teri Lawver.

10.16** Confidential Settlement and Patent License Agreement , dated December 20, 2024, between Abbott Diabetes Care Inc.

and DexCom, Inc.

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

19.1* Insider Trading Policy.

21.1 List of Subsidiaries.

8 unchanged sentences

97.1* Compensation Recovery Policy.

10-K 000-51222 February 8, 2024 97.1

101.INS Inline XBRL Instance Document X

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/s/ KAREN DAHUT Director February 14, 2025

/s/ RIMMA DRISCOLL

Director February 8, 2024

/s/ RIMMA DRISCOLL Director February 14, 2025

Rimma Driscoll

1 unchanged sentence

HELLER Director February 14, 2025

/s/ BARBARA E.

KAHN Director February 8, 2024

/s/ KYLE MALADY Director February 14, 2025

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(1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments.

The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the account or disclosures to which it relates.

Estimation of variable consideration for revenue recognition

13 unchanged sentences

Consolidated Balance Sheets

(In millions, except par value data)

(In millions, except share and par value data)

Current assets:

49 unchanged sentences

Research and development 552.4 505.8 484.2

Collaborative research and development fee — — 87.1

Selling, general and administrative 1,285.8 1,185.4 1,007.7

16 unchanged sentences

Net income $ 576.2 $ 541.5 $ 341.2

Other comprehensive loss, net of tax:

Other comprehensive income (loss), net of tax:

Translation adjustments and other 8.6 ( 9.2 ) ( 9.8 )

Unrealized gain (loss) on marketable debt securities 0.1 4.1 ( 2.3 )

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

Total other comprehensive income (loss), net of tax 8.7 ( 5.1 ) ( 12.1 )

Comprehensive income $ 584.9 $ 536.4 $ 329.1

2 unchanged sentences

Common Stock Additional

Capital Accumulated Other Comprehensive Income (Loss) Retained Earnings (Accumulated Deficit) Treasury Stock Total

Capital Accumulated Other Comprehensive Income (Loss) Retained Earnings Treasury Stock Total

Stockholders’

3 unchanged sentences

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 )

2 unchanged sentences

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 — — — ( 2.7 ) — — ( 2.7 )

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

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

1 unchanged sentence

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 )

1 unchanged sentence

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

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

Other comprehensive income, net of tax — — — ( 5.1 ) — — ( 5.1 )

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

3 unchanged sentences

Purchases of treasury stock, including excise tax ( 10.4 ) — — — — ( 749.5 ) ( 749.5 )

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

Conversions of 2023 Notes 12.2 — ( 13.1 ) — — — ( 13.1 )

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 )

Exercise and settlement of warrants 12.5 — ( 1,431.3 ) — — 1,431.3 —

Share-based compensation expense — — 170.4 — — — 170.4

Net income — — — — 576.2 — 576.2

Other comprehensive loss, net of tax — — — ( 5.1 ) — — ( 5.1 )

Other comprehensive income, net of tax — — — 8.7 — — 8.7

Balance at December 31, 2024 390.7 $ 0.4 $ 2,093.8 $ ( 8.0 ) $ 1,597.6 $ ( 1,581.2 ) $ 2,102.6

9 unchanged sentences

Share-based compensation 170.4 150.8 126.5

Collaborative research and development fee — — 87.1

Loss on extinguishment of debt — — 0.1

Non-cash interest expense 7.5 7.8 6.3

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

Deferred income taxes ( 43.8 ) ( 55.0 ) ( 21.6 )

( 55.0 ) ( 21.6 ) 15.8

Other non-cash income and expenses ( 47.3 ) ( 85.8 ) 34.5

13 unchanged sentences

Acquisitions, net of cash acquired — — ( 3.9 )

Purchases of non-marketable equity securities ( 81.3 ) ( 19.5 ) ( 14.5 )

Other investing activities ( 15.5 ) 1.9 0.2

5 unchanged sentences

Purchases of capped call transactions — ( 101.3 ) —

( 101.3 ) — —

Payments for conversions of senior convertible notes — ( 787.3 ) —

( 787.3 ) — —

Other financing activities ( 13.0 ) 1.5 ( 17.3 )

Net cash provided by (used in) financing activities ( 318.6 ) ( 552.5 ) 10.4

Net cash used in financing activities ( 734.8 ) ( 318.6 ) ( 552.5 )

Effect of exchange rate changes on cash, cash equivalents and restricted cash ( 7.4 ) 1.5 ( 5.8 )

20 unchanged sentences

Organization and Business

is a medical device company that develops and markets continuous glucose monitoring, or CGM, systems for the management of diabetes by patients, caregivers, and clinicians around the world.

We are a medical device company primarily focused on the design, development and commercialization of continuous glucose monitoring, or CGM, systems for the management of diabetes and metabolic health by patients, caregivers, and clinicians around the world.

Unless the context requires otherwise, the terms “we,” “us,” “our,” the “company,” or “Dexcom” refer to DexCom, Inc.

44 unchanged sentences

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 and Other Financial Information” to the consolidated financial statements for more information on our marketable securities.

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

Accounts Receivable and Allowance for Doubtful Accounts

69 unchanged sentences

We recorded no significant goodwill impairment charges for the twelve months ended December 31, 2024, 2023 or 2022.

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.

The change in goodwill for the twelve months ended December 31, 2024 and 2023 primarily consisted of the divestiture of our non-diabetes distribution business and translation adjustments on our foreign currency denominated goodwill.

Intangible Assets and Other Long-Lived Assets

Intangible assets are included in intangibles and other assets, net in our consolidated balance sheets.

We amortize intangible assets with a finite life, such as the customer relationships, acquired technology and intellectual property, trademarks and trade name, and other intangibles, on a straight-line basis over their estimated useful lives, which range from one to seven years .

We review intangible assets that have finite lives and other long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.

28 unchanged sentences

Comprehensive Income

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

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

Revenue Recognition

12 unchanged sentences

Variable consideration includes, but is not limited to:

rebates, chargebacks, consideration payable to customers such as specialty distributor and wholesaler fees, product returns provision, prompt payment discounts, and various other promotional or incentive arrangements.

We classify our provisions related to variable consideration as a reduction of accounts receivable when we are not required to make a payment or as a liability when we are required to make a payment.

rebates, chargebacks, product returns provision, and prompt payment discounts.

We classify these items as a reduction of accounts receivable when we are not required to make a payment and as a liability when we are required to make a payment.

We review the adequacy of our estimates for transaction price adjustments and variable consideration at each reporting date.

2 unchanged sentences

We are subject to rebates on pricing programs with managed care organizations, such as pharmacy benefit managers, governmental and third-party commercial payors, primarily in the U.S.

We estimate provisions for rebates based on contractual arrangements, estimates of products sold subject to rebate, known events or trends and channel inventory data.

We estimate rebates based on contractual arrangements, estimates of products sold subject to rebate, known events or trends and channel inventory data.

We participate in chargeback programs, primarily with government entities in the U.S., under which pricing on products below negotiated list prices is provided to participating entities and equal to the difference between their acquisition cost and the lower negotiated price.

We estimate provisions for chargebacks primarily based on historical experience on a product and program basis, current contract prices under the chargeback programs and channel inventory data.

Consideration Payable to the Customer

We pay administrative and service fees to certain of our distributors based on a fixed percentage of the product price.

These fees are not in exchange for a distinct good or service and therefore are recognized as a reduction of the transaction price.

We accrue for these fees based on actual net sales and contractual fee rates negotiated with the customer.

We estimate chargebacks primarily based on historical experience on a product and program basis, current contract prices under the chargeback programs and channel inventory data.

Product Returns

1 unchanged sentence

The distributors typically have a limited time frame to notify us of any missing, damaged, defective or non-conforming products.

We generally provide a “ 30 -day money back guarantee” program whereby first-time end-user customers may return Reusable Hardware.

We estimate our product returns provision principally based on historical experience by applying a historical return rate to the amounts of revenue estimated to be subject to returns.

We estimate our product returns primarily based on historical experience by applying a historical return rate to the amounts of revenue estimated to be subject to returns.

Additionally, we consider other specific factors such as estimated shelf life of inventory in the distribution channel and changes to customer terms.

1 unchanged sentence

We provide customers with prompt payment discounts, which may result in adjustments to the price that is invoiced for the product transferred, in the case that payments are made within a defined period.

We estimate prompt payment discount accruals based on actual net sales and contractual discount rates.

Various Other Promotional or Incentive Arrangements

Other promotional or incentive arrangements are periodically offered to customers, including but not limited to co-payment assistance we provide to patients with commercial insurance, promotional programs related to the launch of products or other targeted promotions.

We record a provision for the incentive earned based on the number of estimated claims and our estimate of the cost per claim related to product sales that we have recognized as revenue.

We estimate prompt payment discounts based on eligible sales and contractual discount rates.

Revenue Recognition

1 unchanged sentence

We typically determine transfer of control based on when the product is shipped or delivered and title passes to the customer.

In cases where our free-of-charge software, mobile applications and updates are deemed to be separate performance obligations, revenue is recognized over time on a ratable basis over the estimated life of the related Reusable Hardware component.

Our sales of Components include an assurance-type warranty.

Contract Balances

4 unchanged sentences

We expect to invoice and collect all unbilled accounts receivable within twelve months.

We record deferred revenue when we have entered into a contract with a customer and cash payments are received or due prior to transfer of control or satisfaction of the related performance obligation.

We record deferred revenue when cash payments have been received prior to satisfaction of the related performance obligation.

Our performance obligations are generally satisfied within twelve months of the initial contract date.

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.

The deferred revenue balances related to performance obligations that will be satisfied after twelve months were $ 9.5 million as of December 31, 2024 and $ 7.4 million as of December 31, 2023.

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.

Deferred Cost of Sales

Deferred cost of sales are associated with transactions for which revenue recognition criteria are not met but product has shipped and released from inventory.

Deferred cost of sales are included in prepaid and other current assets in our consolidated balance sheets.

2 unchanged sentences

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

Product Shipment Costs

We record the amounts we charge our customers for the shipping and handling of our products in revenue and we record the related costs as cost of sales in our consolidated statements of operations.

Research and Development

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Basic weighted average shares outstanding 393.6 386.0 389.4

Dilutive potential common stock outstanding:

Dilutive potential securities:

Collaborative sales-based milestones 0.2 0.7 —

Restricted stock units and performance stock units 1.1 1.0 2.1

RSUs and PSUs 0.7 1.1 1.0

Senior convertible notes 15.7 26.2 26.9

1 unchanged sentence

Diluted weighted average shares outstanding 412.7 425.5 427.5

Outstanding anti-dilutive securities not included in the diluted net income per share attributable to common stockholders calculations were as follows:

Outstanding anti-dilutive securities not included in the calculations of diluted net income per share attributable to common stockholders were as follows:

Twelve Months Ended

(In millions) 2024 2023 2022

2023 2022 2021

Restricted stock units and performance stock units

RSUs and PSUs 1.3 — 0.4

Recent Accounting Guidance

Recently Adopted Accounting Pronouncements

In October 2021, the FASB issued ASU No.

2021-08, Business Combinations (Topic 805):

Accounting for Contract Assets and Contract Liabilities from Contracts with Customers.

This guidance is intended improve the accounting for acquired revenue contracts with customers in a business combination.

The new guidance requires that the acquirer recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Topic 606.

ASU 2021-08 is effective for public business entities for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years, and early adoption is permitted.

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

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):

In November 2023, the Financial Accounting Standards Board, or FASB, issued Accounting Standards Update, or 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.

The ASU requires disclosure of significant segment expenses that are regularly provided to the chief operating decision maker, or CODM, and included within each reported measure of segment profit or loss.

We adopted ASU 2023-07 in the fourth quarter of 2024 on a retrospective basis, reflecting the application of the new standard in each prior reporting period.

Recently Issued Accounting Pronouncements Not Yet Adopted

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

3 unchanged sentences

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.

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

In November 2024, the FASB issued ASU 2024-03, Disaggregation of Income Statement Expenses .

The ASU requires disaggregated disclosure of certain costs and expenses in the notes of the financial statements.

The ASU is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027, 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 disclosures.

Recent Securities and Exchange Commission Final Rules Not Yet Implemented

On March 6, 2024, the SEC adopted SEC Release Nos.

34-99678, The Enhancement and Standardization of Climate-Related Disclosures for Investors, to require the disclosure of certain climate-related information in registration statements and annual reports, including Scope 1 and 2 emissions and information about climate-related risks that have materially impacted, or are reasonably likely to have a material impact on, a company’s business strategy, results of operations, or financial condition.

In addition, under the final rules, certain disclosures related to severe weather events and other natural conditions will be required in audited financial statements.

The disclosure requirements would have begun phasing in for our reports and registration statements including financial information in the fiscal year ending December 31, 2025, however, in April 2024, the SEC issued an order staying the final rules until the completion of judicial review.

The SEC has since indicated that it intends to establish a new implementation period following the stay order.

We are currently evaluating the impact of this final rule on our disclosures.

Development and Other Agreements

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This replaced our original Collaboration and License Agreement with Verily dated August 10, 2015, as amended in October 2016, including the royalty obligations provisions under that original agreement.

Pursuant to the Restated Collaboration Agreement, we and Verily have agreed to continue to jointly develop a certain next-generation CGM product, and potentially one or more additional CGM products, for which we will have exclusive commercialization rights.

Pursuant to the Restated Collaboration Agreement, we and Verily agreed to jointly develop a certain next-generation CGM product, and potentially additional CGM products, for which we will have exclusive commercialization rights.

The Restated Collaboration Agreement also provides us with an exclusive license to use intellectual property of Verily resulting from the collaboration, and certain Verily patents, in the development, manufacture and commercialization of blood-based or interstitial glucose monitoring products more generally (subject to certain exclusions, which are outside of the CGM field as it is commonly understood).

It also provides us with non-exclusive license rights under Verily’s other intellectual property rights to develop, manufacture and commercialize those kinds of glucose monitoring products and certain CGM-product companion software functionalities.

The Restated Collaboration Agreement requires us to use commercially reasonable efforts to develop, launch and commercialize the CGM product(s) that are the subject of the collaboration according to certain timing and other objectives, and provides for one executive sponsor from each of Dexcom and Verily to meet periodically and make decisions related to the collaboration (within a limited scope of authority) by consensus.

In consideration of Verily’s performance of its obligations under the joint development plan of the Restated Collaboration Agreement, the licenses granted to us and the amendment of the original agreement, we made upfront, incentive, and the product regulatory approval payments, and will make potential payments for contingent sales-based milestones upon the achievement of certain revenue targets.

In connection with the Restated Collaboration Agreement, we developed, launched and commercialized a CGM product in connection with the collaboration.

In consideration of Verily’s performance of its obligations under the joint development plan of the Restated Collaboration Agreement, the licenses granted to us and the amendment of the original agreement, we made upfront, incentive, and the product regulatory approval payments, and payments for contingent sales-based milestones upon the achievement of certain revenue targets.

We account for the contingent milestones payable in shares of our common stock as equity instruments within the scope of ASC Topic 718.

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In the fourth quarter of 2021, we determined the achievement of the regulatory approval milestone to be probable and recorded an $ 87.1 million research and development charge in our consolidated statements of operations.

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.

This charge is associated with in-process research and development 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 2.9 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.

In the fourth quarter of 2022, we received approval from the Food and Drug Administration 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 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 “ Balance Sheet Details and Other Financial Information—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 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.

In the first quarter of 2024, we issued 1.5 million shares of our common stock in connection with our achievement of the second sales-based milestone.

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

Fair Value Measurements

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We validate the quoted market prices provided by our primary pricing service by comparing the fair values of our Level 2 marketable securities portfolio balance provided by our primary pricing service against the fair values provided by our investment managers.

We estimate the fair values of our Level 3 financial instruments based on unobservable inputs and other estimation techniques due to the absence of quoted market prices and inherent lack of liquidity.

The following table summarizes financial assets that we measured at fair value on a recurring basis as of December 31, 2024, classified in accordance with the fair value hierarchy:

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Total debt securities, available-for-sale — 1,973.3 — 1,973.3

Other long-term assets:

Convertible notes receivable — — 10.5 10.5

Other assets (2)

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Total assets measured at fair value on a recurring basis $ 154.8 $ 1,973.3 $ 10.5 $ 2,138.6

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

government-sponsored enterprises or U.S.

government agencies.

(2) Includes assets which are primarily 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, 2023, classified in accordance with the fair value hierarchy:

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Senior Convertible Notes due 2028 1,122.3 1,281.8

Senior Convertible Notes due 2028 1,281.8 —

Total fair value of outstanding senior convertible notes $ 2,286.0 $ 2,544.6

For more information on the carrying values of our senior convertible notes, see Senior Convertible Notes in Note 5 “Debt” to the consolidated financial statements.

For more information on the carrying values of our senior convertible notes, see Note 5 “ Debt—Senior Convertible Notes ” to the consolidated financial statements.

Foreign Currency and Derivative Financial Instruments

We enter into foreign currency forward contracts to hedge monetary assets and liabilities denominated in foreign currencies.

As we conduct business globally in many currencies, we are exposed to foreign exchange rate changes.

To limit this exposure, we enter into foreign currency forward contracts to hedge monetary assets and liabilities denominated in foreign currencies.

Our foreign currency forward contracts are not designated as hedging instruments.

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The resulting impact on our consolidated financial statements from currency hedging activities was not significant for the twelve months ended December 31, 2024, 2023 and 2022.

Our foreign currency exposures vary but are primarily concentrated in the Australian Dollar, the British Pound, the Canadian Dollar, the Euro, and the Malaysian Ringgit.

We monitor the costs and the impact of foreign currency risks upon our financial results as part of our risk management program.

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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.

The carrying values of these investments were $ 119.3 million as of December 31, 2024 and $ 38.5 million as of December 31, 2023.

We include the carrying values of these investments 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.

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

There were no significant impairment losses on assets and liabilities measured at fair value on a non-recurring basis during the twelve months ended December 31, 2024 and 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.

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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

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Total debt securities, available-for-sale $ 1,972.7 $ 1.7 $ ( 1.1 ) $ 1,973.3

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

government-sponsored enterprises or U.S.

government agencies.

December 31, 2023

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government agencies.

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, 2024, the estimated market values of our short-term debt securities with contractual maturities up to 12 months and up to 18 months were $ 1.73 billion and $ 247.7 million, respectively.

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.

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For debt securities where the fair value of the investment is less than the amortized cost basis, we have assessed at the individual security level for various quantitative factors including, but not limited to, the nature of the investments, changes in credit ratings, interest rate fluctuations, industry analyst reports, and the severity of impairment.

Unrealized losses on available-for-sale debt securities at December 31, 2023 were primarily due to increases in interest rates, including market credit spreads, and not due to increased credit risks associated with specific securities.

Unrealized losses on available-for-sale debt securities at December 31, 2024 were primarily due to changes in interest rates, including market credit spreads, and not due to increased credit risks associated with specific securities.

Accordingly, we have not recorded an allowance for credit losses.

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Equity Investments

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.

During the twelve months ended December 31, 2024, unrealized gains or losses on equity investments were not significant.

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

Realized gains from the sale of an equity investment were not significant for the twelve months ended December 31, 2024, 2023 and 2022.

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allowance for doubtful accounts ( 9.2 ) ( 9.3 )

( 9.3 ) ( 7.3 )

Total accounts receivable, net $ 1,005.7 $ 973.9

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accumulated depreciation and amortization ( 678.3 ) ( 509.4 )

( 509.4 ) ( 363.2 )

Total property and equipment, net $ 1,339.9 $ 1,113.1

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(In millions)

Thereafter 1.5

Total $ 103.4

(In millions) 2024 2023

Long-term investments $ 38.5 $ 19.0

Non-marketable equity securities $ 119.3 $ 38.5

Long-term deposits 13.8 14.4

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Interest and dividend income $ 134.2 $ 135.0 $ 23.8

$ 135.0 $ 23.8 $ 1.7

Interest expense ( 19.0 ) ( 20.3 ) ( 18.6 )

( 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 ( 6.2 ) ( 2.0 ) ( 5.6 )

( 3.9 ) ( 5.8 ) ( 3.4 )

Total other income (expense), net $ 109.0 $ 112.7 $ ( 0.4 )

$ 112.7 $ ( 0.4 ) $ ( 9.0 )

Senior Convertible Notes

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Senior Convertible Notes due 2028 1,250.0 1,250.0

Senior Convertible Notes due 2028 1,250.0 —

Total principal amount 2,457.5 2,457.5

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Senior Convertible Notes due 2028 — 33.6

Senior Convertible Notes due 2028 33.6 —

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

The following table summarizes the components of interest expense and the effective interest rates for each of our senior convertible notes for the periods shown:

The following table summarizes the components of interest expense and the effective interest rates for our senior convertible notes for the periods shown:

Twelve Months Ended

(In millions) 2024 2023 2022

2023 2022 2021

Cash interest expense:

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Senior Convertible Notes due 2028 0.7 % 0.7 % *

(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.

(1) Interest on our unsecured senior convertible notes due 2023, or the 2023 Notes, began accruing upon issuance and was payable semi-annually on June 1 and December 1 of each year until the 2023 Notes matured on December 1, 2023.

Interest on our unsecured senior convertible notes due 2025, or the 2025 Notes, began accruing upon issuance and is payable semi-annually on May 15 and November 15 of each year.

Interest on our unsecured senior convertible notes due 2028, or 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.

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.

The 2023 Notes matured on December 1, 2023 and are no longer outstanding.

* Not applicable as no notes were outstanding in the relevant period.

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)

The following table summarizes key details of the 2023 Notes, 2025 Notes, and 2028 Notes:

Senior Convertible Notes Offering Completion Date Maturity Date Stated Interest Rate Aggregate Principal Amount

Issued Net Proceeds (1)

Initial Conversion Rate (2)

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Conversion Price

Settlement Methods (3)

2023 Notes November 2018

(per share) Settlement Methods (3)

2023 Notes (4)

November 2018

December 1, 2023

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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.

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

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

(3) The 2025 Notes and 2028 Notes may be settled in cash, stock, or a combination thereof, solely at our discretion.

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

(4) The 2023 Notes matured on December 1, 2023 and are no longer outstanding.

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.

No principal payments are due on any of our 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 indentures 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

In connection with the offering of the 2023 Notes, in November 2018 we entered into convertible note hedge transactions with two of the initial purchasers of the 2023 Notes (the “2023 Counterparties”) entitling us to purchase up to 20.7 million shares of our common stock at an initial price of $ 41.07 per share, each of which is subject to adjustment.

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.

In connection with the offering of the 2023 Notes, in November 2018 we entered into convertible note hedge transactions, or the 2023 Note Hedge, with two of the initial purchasers of the 2023 Notes, which we refer to as the 2023 Counterparties, entitling us to purchase up to 20.7 million shares of our common stock.

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 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.

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 in 2023.

2023 Warrants

In November 2018, we also sold warrants to the 2023 Counterparties to acquire up to 20.7 million shares of our common stock.

The 2023 Warrants require net share settlement and a pro rated number of warrants will expire on each of the 60 scheduled trading days starting on March 1, 2024.

In November 2018, we also sold warrants, or the 2023 Warrants, to the 2023 Counterparties to acquire up to 20.7 million shares of our common stock.

The 2023 Warrants required net share settlement and a pro-rated number of warrants expired on each of the 60 scheduled trading days following March 1, 2024.

We received $ 183.8 million in cash proceeds from the sale of the 2023 Warrants, which we recorded in additional paid-in capital during 2018.

The 2023 Warrants could have a dilutive effect on our earnings per share to the extent that the price of our common stock during a given measurement period exceeds the strike price of the 2023 Warrants.

The strike price of the 2023 Warrants is initially $ 49.60 per share and is subject to certain adjustments under the terms of the warrant agreements.

The 2023 Warrants could have had a dilutive effect on our earnings per share to the extent that the price of our common stock during a given measurement period exceeded the strike price of the 2023 Warrants.

The strike price of the 2023 Warrants was initially $ 49.60 per share, subject to certain adjustments under the terms of the warrant agreements.

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.

On February 13, 2024, we entered into a warrant termination agreement with one of the 2023 Counterparties to terminate outstanding warrants to purchase an aggregate of 10.3 million shares of our common stock.

In consideration of the termination of these warrants, we delivered 6.0 million shares of our common stock to the holder.

During the first quarter of 2024, a portion of the 2023 Warrants was exercised and we issued 1.9 million shares of our common stock in addition to the aforementioned 6.0 million shares issued in connection with the warrant termination agreement.

During the second quarter of 2024, the remaining portion of the 2023 Warrants was exercised and we issued 4.6 million shares of our common stock in connection with the exercise.

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.

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

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

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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

The 2023 Notes matured on December 1, 2023 and all outstanding principal was settled.

There was no conversion activity for the 2025 Notes or 2028 Notes for the twelve months ended December 31, 2024.

See the following table for the details of conversion activity for the 2023 Notes for the fiscal year ended December 31, 2023:

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

1/1/2023 - 12/31/2023

$ 774.8 million

2023 Notes $ 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.

Holders of our outstanding 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 applicable indenture relating to the notes).

We are also 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

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:

Summary of Conversions Rights at the Option of the Holders for the 2025 Notes and 2028 Notes, which we refer to collectively as the Notes

Conversion Rights at the Option of the Holders 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 August 15, 2025 and February 15, 2028 for the 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 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

Holders of the Notes may convert all or a portion of their Notes regardless of the foregoing circumstances prior to the close of business on the business day immediately preceding the maturity date for the 2025 Notes and prior to the close of business on the second scheduled trading day immediately preceding the maturity date for the 2028 Notes

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

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

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

Conversion Right at Our Option (1)

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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.

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

Dexcom has the right to redeem the 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 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”).

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

The Amended Credit Agreement is a five-year revolving credit facility, or the 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 Amended Credit Agreement will mature on October 13, 2026.

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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 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

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

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

Minimum 0.375 %

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We were in compliance with these covenants as of December 31, 2024.

As of December 31, 2023, we also have a guarantee facility related to our international operations which is collateralized by a $ 5.5 million term deposit that is included in non-current “Other assets” on our consolidated balance sheets.

As of December 31, 2024, we have no other material guarantee facilities or lines of credit.

Leases and Other Commitments

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 Malaysia, have remaining lease terms of up to seventeen years .

We also have land leases in Penang, Malaysia that expire through 2082 and in Athenry, Ireland that expire in 3023 for the build-out of our international manufacturing facilities.

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

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

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2028 15.9 5.4

2028 14.2 5.4

Thereafter 6.9 54.6

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Based on the results of the recoverability test, we determined that the undiscounted cash flows of the asset group were below its carrying value.

We determined the fair value of the asset group by discounting the estimated future cash flows using level 3 fair value inputs under ASC 820 as described in Note 1.

We determined the fair value of the asset group by discounting the estimated future cash flows using level 3 fair value inputs under ASC 820 as described in Note 1 “ Organization and Significant Accounting Policies—Intangible Assets and Other Long-Lived Assets ”.

As a result of the impairment test, we recorded a non-cash charge of $ 23.0 million for the twelve months ended December 31, 2022 in the “ Selling, general and administrative ” caption of our consolidated statements of operations.

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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 .

We had approximately $ 954.9 million and $ 793.0 million of open purchase orders and contractual obligations in the ordinary course of business, the majority of which are due within one year , as of December 31, 2024 and December 31, 2023, respectively .

Contingencies

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Between June 2021 through the year ended December 31, 2024, 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.

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

On December 20, 2024, we and Abbott entered into a settlement and patent cross license agreement (the “Settlement Agreement”) to resolve all outstanding patent litigation between the parties (the “Litigation”).

Under the terms of the Settlement Agreement, we granted Abbott and its affiliates, and Abbott and its affiliates granted Dexcom and its affiliates, a worldwide, royalty-free, non-exclusive, fully paid-up license to certain patents and patent applications relating to analyte sensing, including to all the patents asserted in the Litigation.

The Settlement Agreement does not obligate us or Abbott to pay any royalties or any other form of financial compensation.

As part of the Settlement Agreement, each party, on behalf of itself and its affiliates, has also (i) entered into a covenant not to sue until December 20, 2034;

and (ii) agreed on behalf of themselves and their affiliates to refrain from challenging the patents and patent applications licensed under the Settlement Agreement for periods of time which vary depending on the relevant patents or patent applications.

Due to uncertainty surrounding the securities class action litigation and the derivative action, we are unable to reasonably estimate the ultimate outcome of any of the litigation matters at this time.

We intend to defend against these 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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(In millions) 2024 2023 2022

2023 2022 2021

United States $ 659.8 $ 732.4 $ 463.5

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(In millions) 2024 2023 2022

2023 2022 2021

Federal $ 157.4 $ 149.1 $ 32.6

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California R&D credits 124.9 111.9 Indefinite

California AMT Credits

$ 0.5 $ — Indefinite

California AMT Credits $ 0.5 $ 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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Net deferred tax assets (liabilities) $ 466.6 $ 416.6

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.

In 2024, we further analyzed the prior year intra-entity asset transfer of certain intellectual property between two of our wholly owned foreign subsidiaries.

As a result, we reclassified the specific intellectual property from a patent to patent rights according to Irish law.

This changed the applicable enacted statutory tax rate from capital gains to passive at 25%.There was no impact to the income statement as the change in rate was fully offset by a change in valuation allowance.

The total ending deferred tax asset as of December 31, 2024 is $ 142.4 million, which remains fully offset by a valuation allowance.

We maintain a valuation allowance of $ 221.9 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.

During the year ended December 31, 2024, the valuation allowance decreased by $ 42.4 million primarily due to the change in tax rate applied to the fair value of certain intellectual property located in Ireland in connection with the intra-entity transfer of this property, partially offset by the generation of California research and development tax credits.

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

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Income taxes at effective rates $ 132.8 $ 168.9 $ 49.6

$ 168.9 $ 49.6 $ 39.9

The following table summarizes the activity related to our gross unrecognized tax benefits:

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Balance at January 1, 2022

Increases related to prior year tax positions

Decreases related to prior year tax positions

Increases related to current year tax positions

Balance at December 31, 2022 52.0

Decreases related to prior year tax positions

Increases related to prior year tax positions

Increases related to current year tax positions

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Of the total unrecognized tax benefits at December 31, 2024, 2023, and 2022, $ 40.7 million, $ 37.0 million and $ 32.5 million, respectively, would affect our annual effective tax rate if recognized.

Also included in the balance of unrecognized tax benefits at December 31, 2023 is $ 0.2 million of tax benefits that, if recognized, would result in adjustments to other tax accounts, primarily deferred tax assets.

Interest and penalties are classified as a component of income tax expense and were not material for any period presented.

Although the timing and outcome of audit settlements are uncertain, it is unlikely there will be a significant reduction of the uncertain tax benefits in the next twelve months.

The indirect effect of the unrecognized tax benefits that, if recognized, would affect our annual effective tax rate is not material for all years presented.

Also, the amount of unrecognized tax benefits that, if recognized, would result in adjustments to other tax accounts, is not material for all years presented.

Interest and penalties are classified as a component of income tax expense and are not material for all years presented.

Although the timing and outcome of audit settlements are uncertain, we do not anticipate a significant change to the unrecognized tax benefits in the next twelve months.

Due to our global business activities, we file income tax returns and are subject to routine compliance audits in numerous jurisdictions, including those material jurisdictions listed in the following table.

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United States (Federal and state) 1999 - 2024

Germany 2019 - 2023

United Kingdom 2021 - 2024

Canada 2019 - 2023

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.

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.

Malaysia 2021 - 2024

Ireland 2023 - 2024

We currently operate under a Special Corporate Income Tax Preferential rate in the Philippines, which is in effect for the next 10 years.

The prior tax holiday ended in 2023.

The impact of the both the tax holiday and preferential rate is immaterial for all years presented.

We have been granted a tax incentive by the Malaysian Investment Development Authority (MIDA) in Malaysia, which provides for a tax holiday of up to 15 years, 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 2024, 2023, or 2022.

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Determination of the amount of unrecognized deferred tax liability on these unremitted earnings is not practicable.

The Organization for Economic Co-operation and Development has a framework to implement a global minimum corporate tax of 15% for companies with global revenues and profits above certain thresholds (referred to as Pillar 2), with certain aspects of Pillar 2 effective January 1, 2024 and other aspects effective January 1, 2025.

While it is uncertain whether the United States will enact legislation to adopt Pillar 2, certain countries in which we operate have adopted legislation, and other countries in which we operate are in the process of introducing legislation to implement Pillar 2.

We have assessed the impact of Pillar 2 on our financial statements and the impact is immaterial.

In June 2024, the State of California enacted S.B.

167, which suspends the use of net operating losses (“NOLs”) for the tax period from January 1, 2024 to December 31, 2026 for net business income of $1.0 million or more, as well as limits the utilization of research and development tax credits to $5.0 million each year.

The State of California also passed S.B.

175 to provide for a potential early sunset of NOLs in either 2025 or 2026 if necessary.

We have analyzed the effect of both these laws on our financial statements.

We are estimating $ 2.8 million utilization of our California research and development tax credits for tax year ending December 31, 2024, resulting in a corresponding valuation allowance release of the same amount.

Employee Benefit Plans and Stockholders’ Equity

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Conversely, if the proceeds from the sale are less than the average price we paid to acquire the shares, we record a decrease in additional paid-in capital to the extent of increases previously recorded for similar transactions and a decrease in retained earnings for any remaining amount.

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.

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

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

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Shares repurchased under the 2023 Share Repurchase Program — 4.7 —

Shares repurchased under the 2024 Share Repurchase Program 10.4 — —

Shares repurchased with 2028 Notes proceeds — 1.6 —

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 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”).

Shares issued in connection with 2023 Warrants ( 12.5 ) — —

2024 Share Repurchase Program

In July 2024, our Board of Directors authorized and approved a share repurchase program of up to $ 750.0 million of our outstanding common stock, with a repurchase period ending no later than June 30, 2025 (the “2024 Share Repurchase Program”).

Repurchases of our common stock under the 2024 Share Repurchase Program were permitted to be made from time to time in the open market, in privately negotiated transactions or by other methods, including through the use of trading plans intended to qualify under Rule 10b5-1 under the Exchange Act, at our discretion, and in accordance with the limitations set forth in Rule 10b-18 promulgated under the Exchange Act and other applicable federal and state laws and regulations.

The 2024 Share Repurchase Program was completed in August 2024.

We repurchased 10.4 million shares of our common stock for $ 750.0 million under the 2024 Share Repurchase Program.

2023 Share Repurchase Program

In October 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.

to repurchase $ 500.0 million of our common stock.

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 2023 Share Repurchase Program was completed in December 2023.

2022 Share Repurchase Program

In July 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”).

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

The 2022 ASR concluded on September 1, 2022.

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

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

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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.

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

Other Treasury Share Activity

During the twelve months ended December 31, 2024, we issued 12.5 million treasury shares to settle the 2023 Warrants.

See Note 5 “Debt—Senior Convertible Notes” to the consolidated financial statements for more information.

During the twelve months ended December 31, 2024, we issued 1.5 million treasury shares in connection with our achievement of the second sales-based milestone under the Restated Collaboration Agreement.

See Note 2 “Development and Other Agreements—Collaboration with Verily Life Sciences” to the consolidated financial statements for more information.

Equity Award Activity

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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.

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

Twelve Months Ended

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Total tax benefit related to share-based compensation expense $ 43.8 $ 40.0 $ 43.2

$ 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.

As of December 31, 2024, unrecognized estimated compensation costs related to RSUs and PSUs totaled $ 203.8 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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Business Segment and Geographic Information

Reportable Segments

An operating segment is identified as a component of a business that has discrete financial information available and for which the chief operating decision maker must decide the level of resource allocation.

In addition, the guidance for segment reporting indicates certain quantitative materiality thresholds.

None of the components of our business meet the definition of an operating segment.

We currently consider our operations to be, and manage our business globally within, one reportable segment, which is consistent with how our President and Chief Executive Officer, who is our chief operating decision maker, reviews our business, makes investment and resource allocation decisions, and assesses operating performance.

We manage our business on a global consolidated basis within one reportable segment, which is consistent with how our chief operating decision maker (CODM), our President and Chief Executive Officer, reviews our business, makes investment and resource allocation decisions, and assesses operating performance.

The majority of our revenue is generated in the United States.

The CGM segment derives revenues from the sale of disposable sensors and our Reusable Hardware.

The measures of segment profit or loss that are most consistent with U.S.

GAAP used by the CODM to assess performance and allocate resources are operating income and net income.

Our CODM also reviews total assets, as reported on our consolidated balance sheets, and purchases of property and equipment, as reported on our consolidated statements of cash flows.

Our CODM uses operating income and net income to evaluate income generated from segment assets (return on assets) in deciding whether to reinvest profits into the Company, acquire companies, or invest in other companies.

Operating income is also used to monitor budget versus actual results.

The following table sets forth our segment information for revenue, measures of segment profit or loss, and significant expenses:

Twelve Months Ended

(In millions) 2024 2023 2022

Revenue $ 4,033.0 $ 3,622.3 $ 2,909.8

Cost of sales (1)

1,594.8 1,333.4 1,026.7

Payroll related expenses 767.1 726.9 621.1

Stock-based compensation expense 156.0 136.2 115.4

Marketing expense 298.7 264.6 228.3

Travel related expenses 64.8 55.3 37.6

Supply expenses and clinical trials 64.5 46.5 50.3

Consulting & professional fees 227.8 222.2 196.4

Equipment, office & facility expenses 83.8 84.7 80.3

IT software and data 130.6 106.6 86.5

Depreciation and amortization 39.9 41.9 46.7

Other segment items (2)

Operating income 600.0 597.7 391.2

Other income (expense), net 109.0 112.7 ( 0.4 )

Income before income taxes 709.0 710.4 390.8

Income tax expense 132.8 168.9 49.6

Net income $ 576.2 $ 541.5 $ 341.2

(1) Includes amounts stated in other significant expense captions.

(2) Other segment items are primarily composed of impairment of assets and bad debt expense.

Twelve Months Ended

(In millions) 2024 2023 2022

Other segment disclosures

Depreciation and amortization (1)

$ 217.7 $ 186.0 $ 155.9

Expenditures for long-lived assets $ 358.8 $ 236.6 $ 364.8

Significant noncash items other than depreciation and amortization expense:

Deferred income taxes $ 43.8 $ 55.0 $ 21.6

(1) Includes depreciation and amortization recorded in both cost of sales and operating expenses.

See Note 4 “ Balance Sheet Details and Other Financial Information—Other Income (Expense), Net ” to the consolidated financial statements in Part II, Item 8 of this Annual Report on Form 10-K for information about our interest income and interest expense.

See Note 9 “ Employee Benefit Plans and Stockholders’ Equity—Share-Based Compensation ” to the consolidated financial statements in Part II, Item 8 of this Annual Report on Form 10-K for information about our share-based compensation expense.

Disaggregation of Revenue

We disaggregate revenue by geographic region and by major sales channel.

We disaggregate revenue by major sales channel and by geographic region.

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.

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 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:

See Note 1 “ Organization and Significant Accounting Policies—Concentration of Credit Risk and Significant Customers ” to the consolidated financial statements in Part II, Item 8 of this Annual Report on Form 10-K for information about our major customers that represent 10% or more of our total revenue.

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, 2024, 2023 and 2022:

Twelve Months Ended December 31,

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of Total Amount %

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

International 997.0 28 % 767.8 26 % 599.1 24 %

Distributor $ 3,430.1 85 % $ 3,095.6 85 % $ 2,470.8 85 %

Direct 602.9 15 % 526.7 15 % 439.0 15 %

Total revenue $ 4,033.0 100 % $ 3,622.3 100 % $ 2,909.8 100 %

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:

Revenue by Geographic Region

During the twelve months ended December 31, 2024, 2023 and 2022, no individual country outside the United States generated revenue that represented more than 10% of our total revenue.

Twelve Months Ended December 31,

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of Total Amount %

Distributor $ 3,095.6 85 % $ 2,470.8 85 % $ 2,024.3 83 %

Direct 526.7 15 % 439.0 15 % 424.2 17 %

United States $ 2,889.8 72 % $ 2,625.3 72 % $ 2,142.0 74 %

International 1,143.2 28 % 997.0 28 % 767.8 26 %

Total revenue $ 4,033.0 100 % $ 3,622.3 100 % $ 2,909.8 100 %

Geographic Information

Long-Lived Assets by Geographic Region

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:

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United States $ 464.6 $ 544.1

$ 544.1 $ 686.1

Malaysia 632.1 515.4

Other countries (1)

Total long-lived assets $ 1,402.7 $ 1,184.5

$ 1,184.5 $ 1,135.6

(1) No other individual country represented more than 10% of long-lived assets for the periods presented, except for Ireland with $ 185.7 million of long-lived assets at December 31, 2024.

SCHEDULE II – VALUATION AND QUALIFYING ACCOUNTS

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Beginning Balance $ 9.3 $ 7.3 $ 5.4

$ 7.3 $ 5.4 $ 7.2

Provision for doubtful accounts ( 0.1 ) 2.0 2.4

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Ending Balance $ 9.2 $ 9.3 $ 7.3

$ 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