DEXCOM INC

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If we or our suppliers or distributors fail to comply with ongoing regulatory requirements, including responding to the FDA warning letter, or if we have unanticipated problems with our products, the products could be subject to restrictions or withdrawal from the market.

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Any product for which we obtain marketing approval, clearance or authorization (and the activities related to its production, distribution, and promotion, sale, and marketing) are subject to continual review and periodic inspections by the FDA and other regulatory bodies, which may include inspection of our manufacturing processes, complaint handling and adverse event reporting, post-approval clinical data and promotional activities for such product. The FDA’s Medical Device Reporting, or MDR, regulations require that we report to the FDA any incident in which our product may have caused or contributed to a death or serious injury, or in which our product malfunctioned and, if the malfunction were to recur, it would likely cause or contribute to a death or serious injury.

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If the FDA determines that there is a reasonable probability that a device intended for human use would cause serious, adverse health consequences or death, the agency may issue a cease distribution and notification order and a mandatory recall order. We may also decide to recall a product voluntarily if we find a material deficiency, including unacceptable risks to health, manufacturing defects, design errors, component failures, labeling defects, or other issues. Recalls of our products could divert the attention of our management and have an adverse effect on our reputation, financial condition, and operating results.

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We and certain of our suppliers are also required to comply with the FDA’s Quality System Regulation, or QSR, and other regulations which cover the methods and documentation of the design, testing, production, control, selection and oversight of suppliers or contractors, quality assurance, labeling, packaging, storage, complaint handling, shipping and servicing of our products. The FDA may enforce the QSR through announced (through prior notification) or unannounced inspections, such as the inspections described below.

Previous report

Compliance with ongoing regulatory requirements can be complex, expensive and time-consuming. Failure by us or one of our suppliers or distributors to comply with statutes and regulations administered by the FDA, competent authorities and other regulatory bodies, or failure to take adequate response to any observations, including the warning letter described below, could result in, among other things, any of the following actions:

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•warning letters or untitled letters that require corrective action;

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•delays in approving, or refusal to approve, our CGM systems;

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•fines and civil or criminal penalties;

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•unanticipated expenditures;

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•FDA refusal to issue certificates to international governments needed to export our products for sale in other countries;

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•suspension or withdrawal of clearance or approval by the FDA or other regulatory bodies;

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•product recall or seizure;

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•administrative detention;

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•interruption, partial suspension, or complete shutdown of production;

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•interruption of the supply of components from our key component suppliers;

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•operating restrictions;

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•court consent decrees;

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•FDA orders to repair, replace, or refund the cost of devices;

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•injunctions; and

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•criminal prosecution.

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From time to time, the FDA issues Form 483 findings related to our operations and may issue warning letters or take other administrative or enforcement actions for noncompliance with FDA laws and regulations. In March 2025, we received an FDA warning letter following inspections of our facilities in San Diego, California, and Mesa, Arizona. In the warning letter, the FDA cited deficiencies in the response letters sent by us to the FDA following the Form 483, List of Investigational Observations that was delivered to us in connection with the inspection of our San Diego, California facility that occurred from October 2024 through November 2024, and the inspection of our Mesa, Arizona facility that occurred in June 2024. The warning letter describes observed non-conformities in manufacturing processes and our quality management system. We take the matters identified in the warning letter seriously and have already submitted responses to the Form 483 and to the FDA warning letter. While the warning letter does not restrict our ability to produce, market, manufacture or distribute products, require recall of any products, nor restrict our ability to seek FDA 510(k) clearance of new products, we may fail to satisfy these regulatory requirements to the FDA’s satisfaction, and any failure to do so could result in the foregoing occurring.

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While we intend to undertake certain corrective actions and provide regular updates to the FDA, we cannot give any assurances that the FDA will be satisfied with our response or as to the date we expect to resolve the matters included in the FDA warning letter. Until the issues cited in the warning letter are resolved to the FDA’s satisfaction, additional legal or regulatory action may be taken without further notice, including as described above.

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The potential effect of the warning letter and these other events can in some cases be difficult to quantify and could harm our reputation and cause our product sales and profitability to suffer. In addition, we believe events that could be classified as reportable events pursuant to MDR regulations are generally underreported by physicians and users, and any underlying problems could be of a larger magnitude than suggested by the number or types of MDRs filed by us. Furthermore, our key component suppliers may not currently be or may not continue to be in compliance with applicable regulatory requirements.

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If we obtain regulatory approval to market and sell a product, the FDA or a foreign regulatory authority may still impose significant restrictions on the indicated uses or how the product may be marketed, or may contain requirements for costly post-marketing testing or surveillance to monitor the safety or effectiveness of the product. Later discovery of previously unknown problems with our products, including software bugs, unanticipated adverse events or adverse events of unanticipated severity or frequency, manufacturing problems, or failure to comply with regulatory requirements such as the QSR, MDR reporting, or other post-market requirements may result in restrictions on such products or manufacturing processes, withdrawal of the products from the market, voluntary or mandatory recalls (through corrections or removals), fines, suspension of regulatory approvals, product seizures, injunctions, the imposition of civil or criminal penalties, or criminal prosecution. In addition, our distributors have rights to create marketing materials for their sales of our products, and may not adhere to contractual, legal or regulatory limitations that are imposed on their marketing efforts.

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We cannot guarantee that the 2025 Share Repurchase Program will be fully consummated or that such program will enhance the long-term value of our share price.

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In April 2025, our Board of Directors authorized and approved the 2025 Share Repurchase Program, which provides for the repurchase of up to $750.0 million of our outstanding common stock, with a repurchase period ending no later than June 30, 2026. Repurchases of our common stock under the 2025 Share Repurchase Program may 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 timing of any repurchases will depend on market conditions and will be made at our discretion. The 2025 Share Repurchase Program does not obligate us to repurchase any dollar amount or number of shares of our common stock, and the program may be extended, modified, suspended, or discontinued at any time.

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The 2025 Share Repurchase Program could affect the price of our common stock and increase the volatility thereof. Price volatility may cause the average price at which we repurchase our common stock in a given period to exceed the stock’s price at a given point in time. There can be no assurance that the timeframe for repurchases under our 2025 Share Repurchase Program or that any repurchases conducted thereunder will have a positive impact on our stock price or earnings per share. Important factors that could cause us to discontinue or decrease share repurchases under the 2025 Share Repurchase Program include, among others, unfavorable market conditions; the market price of our common stock; the nature of other investment or strategic opportunities presented to us from time to time; our ability to make appropriate, timely, and beneficial decisions as to when, how, and whether to repurchase shares under the 2025 Share Repurchase Program; and the availability of funds necessary to fulfill such repurchases. As of September 30, 2025, we have repurchased 2.4 million shares of our common stock for $187.2 million under the 2025 Share Repurchase Program.

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If we experience decreasing prices for our products and we are unable to reduce our expenses, including the per unit cost of producing our products, there may be a material adverse effect on our business, results of operations, financial condition and cash flows.

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We have experienced, and anticipate that we will continue to experience, decreasing prices for our products due to pricing pressure from managed care organizations and other third-party payors.

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In the United States and other countries, government and private sector access to health care products continues to be a subject of focus, and efforts to reduce health care costs are being made by third-party payors. Most of our customers rely on third-party payors, including government programs and private health insurance plans, to cover the cost of the G6, G7 and Dexcom One. We expect that these continuing cost reduction and containment measures could result in lower prices for these products and lower reimbursement rates, as well as could lead to patients being unable to obtain approval for coverage or payment from these third-party payors resulting in costs being shifted to patients for these products. Additionally, we may experience pricing pressure if our products are increasingly subject to competitive bidding processes, which include substantial costs and managerial time to prepare bids and proposals for contracts that may not be awarded to us or may be split among competitors. For example, in June 2025, the Centers for Medicare & Medicaid Services published a proposed rule that would subject continuous glucose monitors to the competitive bidding process, which could negatively impact our reimbursement and result in price decreases. To the extent these cost containment efforts are not offset by greater patient access to our products, our revenue may be reduced and our business may be harmed.

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In addition to decreased pricing, we may be unable to reduce our expenses, including the cost of sourcing materials, logistics and the cost to manufacture our products. If the prices for our products decrease and/or if we are unable to offset the effects of general inflation on our operating costs through increases in the prices for our products, our business, results of operations, financial condition and cash flows will be adversely affected.