DEXCOM INCDXCM
DEXCOM INC Debt Disclosure
4. Debt | ||||||||||||||
| Senior Convertible Notes | ||||||||||||||
As of December 31, 2025, the if-converted value of our unsecured senior convertible notes due 2028, or 2028 Notes, did not exceed their outstanding principal amount. As of December 31, 2024, the if-converted value of our 2028 Notes and our unsecured senior convertible notes due 2025, or 2025 Notes, did not exceed their outstanding principal amount.
The carrying amounts of our senior convertible notes were as follows:
| December 31, | |||||||||||
| (In millions) | 2025 | 2024 | |||||||||
| Principal amount: | |||||||||||
2025 Notes | $ | — | $ | 1,207.5 | |||||||
2028 Notes | 1,250.0 | 1,250.0 | |||||||||
| Total principal amount | 1,250.0 | 2,457.5 | |||||||||
| Unamortized debt issuance costs | (9.1) | (16.1) | |||||||||
| Carrying amount of senior convertible notes | $ | 1,240.9 | $ | 2,441.4 | |||||||
The following table summarizes the components of interest expense and the effective interest rates for our senior convertible notes:
| Twelve Months Ended December 31, | |||||||||||||||||
| (In millions) | 2025 | 2024 | 2023 | ||||||||||||||
| Cash interest expense: | |||||||||||||||||
Contractual coupon interest (1) | $ | 7.3 | $ | 7.7 | $ | 9.1 | |||||||||||
| Non-cash interest expense: | |||||||||||||||||
| Amortization of debt issuance costs | 7.0 | 7.2 | 7.3 | ||||||||||||||
| Total interest expense recognized on senior notes | $ | 14.3 | $ | 14.9 | $ | 16.4 | |||||||||||
| Effective interest rate: | |||||||||||||||||
2025 Notes | 0.5 | % | 0.5 | % | 0.5 | % | |||||||||||
2028 Notes | 0.7 | % | 0.7 | % | 0.7 | % | |||||||||||
(1) Interest on the 2025 Notes began accruing upon issuance and was payable semi-annually on May 15 and November 15 of each year until the 2025 Notes matured in November 2025. Interest on the 2028 Notes, began accruing upon issuance and is payable semi-annually on May 15 and November 15 of each year. | |||||||||||||||||
Fair Value of Senior Convertible Notes
The fair value, based on trading prices (Level 1 inputs), of our senior convertible notes were as follows:
| Fair Value Measurements Using Level 1 | |||||||||||
| (In millions) | December 31, 2025 | December 31, 2024 | |||||||||
2025 Notes | $ | — | $ | 1,163.7 | |||||||
2028 Notes | 1,152.1 | 1,122.3 | |||||||||
| Total fair value of outstanding senior convertible notes | $ | 1,152.1 | $ | 2,286.0 | |||||||
Convertible Debt Summary
The following table summarizes key details of the 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) (per $1,000 principal amount) | Conversion Price (per share) | Settlement Methods(3) | ||||||||||||||||||
2025 Notes(4) | May 2020 | November 15, 2025 | 0.25% | $1.21 billion | $1.19 billion | 6.6620 shares | $150.11 | Cash and/or shares | ||||||||||||||||||
| 2028 Notes | May 2023 | May 15, 2028 | 0.375% | $1.25 billion | $1.23 billion | 6.1571 shares | $162.41 | Cash and/or shares | ||||||||||||||||||
(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) Pursuant to the Indenture of the 2025 Notes, on August 15, 2025, we elected to satisfy conversion obligations on or after August 15, 2025 through the combination of cash and/or shares of our common stock. The 2028 Notes may be settled upon conversion in cash, stock, or a combination thereof, solely at our discretion. | ||||||||||||||||||||||||||
(4) The 2025 Notes matured in November 2025 and we repaid the principal of $1.21 billion entirely in cash on the maturity date. | ||||||||||||||||||||||||||
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 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.
2028 Capped Call Transactions
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. The 2028 Capped Calls have an initial cap price of $212.62 per share, subject to adjustments, which represents a premium of 80% over the closing price of our common stock of $118.12 per share on the Nasdaq Global Select Market on May 2, 2023. The cost to purchase the 2028 Capped Calls of $101.3 million was recorded as a reduction to additional paid-in capital in our consolidated balance sheets as the 2028 Capped Calls met the criteria for classification in stockholders’ equity.
Conversion Rights for Senior Convertible Notes
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 to our 2028 Notes:
Summary of Conversions Rights at the Option of the Holders for the 2028 Notes, or 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 February 15, 2028 for the 2028 Notes only under the following circumstances: | |||||||
Circumstance 1(1) | During any calendar quarter commencing after the applicable period (and only during such calendar quarter), if the last reported sale price of Dexcom’s common stock for at least 20 trading days (whether or not consecutive) during the period of 30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the applicable conversion price for the Notes on each applicable trading day | |||||||
| Circumstance 2 | During the five business day period after any five consecutive trading day period in which the trading price per $1,000 principal amount of the Notes for each trading day of that five consecutive trading day period was less than 98% of the product of the last reported sale price of Dexcom’s common stock and the applicable conversion rate of the Notes on each such trading day | |||||||
| Circumstance 3 | If we call any or all of the Notes for redemption, at any time prior to the close of business on the scheduled trading day immediately preceding the redemption date (only with respect to the notes called or deemed called for redemption) | |||||||
| Circumstance 4 | Upon the occurrence of specified corporate events | |||||||
Circumstance 5(2) | 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 second scheduled trading day immediately preceding the maturity date | |||||||
(1) Circumstance 1 is available after the calendar quarter ended September 30, 2023 for the 2028 Notes. | ||||||||
(2) Circumstance 5 is available on or after February 15, 2028 for the 2028 Notes. | ||||||||
Summary of Conversion Right at the Option of the Company for the 2028 Notes | ||||||||
Conversion Right at Our Option(1) | Dexcom may redeem for cash all or part of the Notes, at its option, if the last reported sale price of our common stock has been at least 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period ending on, and including, the trading day immediately preceding the date on which Dexcom provides notice of redemption. The redemption price will be equal to 100% of the principal amount of the Notes to be redeemed plus accrued and unpaid interest to, but excluding, the redemption date | |||||||
(1) Dexcom does not have the right to redeem the 2028 Notes prior to May 20, 2026. Dexcom has the right to redeem the 2028 Notes on or after May 20, 2026 and prior to February 15, 2028. | ||||||||
Conversion Activity for Senior Convertible Notes
There was no conversion activity for the 2025 Notes or 2028 Notes for the twelve months ended December 31, 2025.
Amended Credit Agreement | ||||||||||||||
Terms of the Amended Credit Agreement
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. Borrowings under the Amended Credit Agreement are available for general corporate purposes, including working capital and capital expenditures.
The following table sets forth information related to availability and outstanding borrowings on our Amended Credit Agreement as of December 31, 2025:
| (In millions) | |||||
| Available principal amount | $ | 200.0 | |||
| Letters of credit sub-facility | 25.0 | ||||
| Outstanding borrowings | — | ||||
| Outstanding letters of credit | 7.9 | ||||
| Total available balance | $ | 192.1 | |||
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, 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% | 1.375% | 0.175% | ||||||||
| Maximum | 1.000% | 2.000% | 0.250% | ||||||||
Our obligations under the Amended Credit Agreement are guaranteed by our existing and future wholly-owned domestic subsidiaries, and are secured by a first-priority security interest in substantially all of the assets of Dexcom and the guarantors, including all or a portion of the equity interests of our domestic subsidiaries and first-tier foreign subsidiaries but excluding real property and intellectual property (which is subject to a negative pledge). The Amended Credit Agreement contains covenants that limit certain indebtedness, liens, investments, transactions with affiliates, dividends and other restricted payments, subordinated indebtedness and amendments to subordinated indebtedness documents, and sale and leaseback transactions of Dexcom or any of its domestic subsidiaries. The Amended Credit Agreement also requires us to maintain a maximum leverage ratio and a minimum fixed charge coverage ratio. We were in compliance with these covenants as of December 31, 2025.
As of December 31, 2025, we have other guarantee facilities related to certain international operations that are partially collateralized, which are included in non-current “Other assets” on our consolidated balance sheets. These facilities are not significant to the consolidated financial statements.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 12, 2026 | Showing above |
| 2024 | Feb 18, 2025 | |
| 2023 | Feb 8, 2024 | |
| 2022 | Feb 9, 2023 | |
| 2021 | Feb 14, 2022 | |
| 2020 | Feb 11, 2021 | |
| 2019 | Feb 13, 2020 | |
| 2018 | Feb 21, 2019 | |
| 2017 | Feb 27, 2018 | |
About Debt Disclosures
Debt disclosures detail a company's borrowing structure — the types of instruments, interest rates, maturity schedule, and covenant restrictions that define its financial obligations and flexibility. This section is essential for assessing refinancing risk, interest rate exposure, and the margin of safety against financial distress.
Key signals: the maturity schedule reveals concentration risk — large maturities within 1-2 years during tight credit markets can force dilutive refinancing or asset sales. Compare the fair value of debt against carrying amount to gauge whether the market views the company's credit risk differently than the balance sheet suggests. Watch covenant compliance disclosures for tightening cushions, especially leverage and interest coverage ratios. Variable-rate debt exposure quantifies sensitivity to interest rate changes. Secured versus unsecured mix affects recovery rates and future borrowing capacity. Compare net debt-to-EBITDA against industry peers and covenant limits to assess financial health.