Insulet (PODD) - 2025 Q2 - Quarterly Results

Executive Summary & Highlights Second Quarter 2025 Financial Highlights Insulet reported robust second-quarter 2025 financial results, with total revenue increasing 32.9% year-over-year to $649.1 million, surpassing guidance, driven by strong Omnipod revenue growth and international expansion, while GAAP net income decreased due to prior-year tax benefits and current-year debt extinguishment losses Financial Performance Summary | Metric | Q2 2025 (Millions USD) | Q2 2024 (Millions USD) | YoY Change (%) | Constant Currency YoY Change (%) | | :----------------------- | :--------------------- | :--------------------- | :------------- | :------------------------------- | | Revenue | | | | | | Total Revenue | $649.1 | $488.5 | 32.9% | 31.3% | | Total Omnipod Revenue | $639.0 | $480.4 | 33.0% | 31.4% | | U.S. Omnipod Revenue | $453.2 | $352.3 | 28.7% | 28.7% | | International Omnipod Revenue | $185.8 | $128.2 | 45.0% | 38.8% | | Drug Delivery Revenue | $10.2 | $8.1 | 25.7% | 25.7% | | Profitability | | | | | | Gross Margin | 69.7% | 67.8% | +190 bps | | | Operating Income | $121.1 | $54.5 | +750 bps (as % of revenue) | | | Adjusted Operating Income | $115.8 | N/A | +670 bps (as % of revenue) | | | Net Income | $22.5 | $188.6 | -88.1% | | | Adjusted Net Income | $83.7 | $38.3 | +118.5% | | | Diluted EPS | $0.32 | $2.59 | -87.6% | | | Adjusted Diluted EPS | $1.17 | $0.55 | +112.7% | | | Adjusted EBITDA | $157.5 | $90.9 | +570 bps (as % of revenue) | | Recent Strategic Highlights Insulet advanced its Omnipod 5 platform with expanded compatibility and international availability, launched a unique marketing collaboration, presented strong clinical data, and undertook significant financial restructuring - Omnipod 5 App for iPhone compatible with Dexcom's G7 Continuous Glucose Monitor (CGM) sensor fully available in the U.S[3] - Integrated Omnipod 5 with Dexcom's G7 CGM sensor in Germany and Abbott's FreeStyle Libre 2 Plus CGM sensor in Australia[3] - Collaborated with Marvel to launch comic book hero, Dyasonic, who lives with type 1 diabetes[3] - Presented strong clinical data at the American Diabetes Association (ADA) Scientific Session from SECURE-T2D and RADIANT trials, showing improved glycemic outcomes for type 2 diabetes patients using Omnipod 5[3] - Initiated redemption for remaining $380 million principal of convertible notes and refinanced Term Loan B[3] - Advanced sustainability efforts, detailed in Insulet's 2024 Sustainability Report[3] CEO Commentary CEO Ashley McEvoy highlighted robust second-quarter results, attributing success to strong team performance and the compelling impact of Omnipod 5, expressing confidence in future growth and value creation for stakeholders - CEO Ashley McEvoy stated, "We delivered robust second quarter results, reflecting our team's strong performance and the compelling impact and appeal of Omnipod 5 for people living with diabetes" She expressed confidence in the company's ability to grow and create value for all stakeholders[4] Financial Outlook 2025 Guidance Insulet raised its full-year 2025 revenue guidance to 24%-27% constant currency growth (up from 19%-22%) and increased its adjusted operating margin guidance to 17.0%-17.5% (up from ~16.5%), with Q3 2025 revenue guidance set at 22%-25% constant currency growth Full-Year and Q3 2025 Guidance | Metric (Constant Currency) | Q3 2025 Guidance (as of 8/7/2025) | FY 2025 Guidance (as of 8/7/2025) | FY 2025 Prior Guidance (as of 5/8/2025) | | :------------------------- | :--------------------------------- | :-------------------------------- | :-------------------------------------- | | U.S. Omnipod Revenue Growth | 21% - 24% | 22% - 25% | 18% - 21% | | International Omnipod Revenue Growth | 33% - 36% | 34% - 37% | 27% - 30% | | Total Omnipod Revenue Growth | 24% - 27% | 25% - 28% | 20% - 23% | | Drug Delivery Revenue Growth | (80)% - (75)% | (30)% - (25)% | (35)% - (25)% | | Total Revenue Growth | 22% - 25% | 24% - 27% | 19% - 22% | | Gross Margin | N/A | ~71.0% | ~71.0% | | Adjusted Operating Margin | N/A | 17.0% - 17.5% | ~16.5% | Company Information About Insulet Corporation Insulet Corporation is a Massachusetts-headquartered medical device company specializing in tubeless insulin pump technology, primarily through its Omnipod product platform, offering automated blood sugar management and adapting its technology for non-insulin subcutaneous drug delivery - Insulet Corporation (NASDAQ: PODD) is a global leader in tubeless insulin pump technology with its Omnipod brand of products[1] - The Omnipod Insulin Management System provides a unique alternative to traditional insulin delivery methods with a simple, wearable, tubeless disposable Pod for up to three days of non-stop insulin delivery[1] - The Omnipod 5 Automated Insulin Delivery System integrates with a continuous glucose monitor to manage blood sugar, controllable by a compatible smartphone or Omnipod 5 Controller[7] - Insulet also leverages its Omnipod technology platform for the delivery of non-insulin subcutaneous drugs across other therapeutic areas[7] Conference Call Details Insulet will host a conference call on August 7, 2025, at 8:00 a.m. Eastern Time to discuss its financial results and outlook, with access available via the Investor Relations section of the company's website or by dialing in - Date: August 7, 2025[6] - Time: 8:00 a.m. (Eastern Time)[6] - Access: Live webcast on investors.insulet.com ("Events and Presentations") or by phone (domestic: (888) 770-7129, international: (929) 203-2109, passcode: 5904836)[6] Investor Relations & Media Contacts Contact information for Insulet's Investor Relations and Corporate Communications departments is provided for inquiries - Investor Relations: June Lazaroff, Senior Director, Investor Relations, (978) 600-7718, jlazaroff@insulet.com[17] - Media: Angela Geryak Wiczek, Senior Director, Corporate Communications, (978) 932-0611, awiczek@insulet.com[17] Non-GAAP Financial Measures Explanation of Non-GAAP Measures Insulet utilizes non-GAAP financial measures as supplemental tools for management to assess performance and for investors to compare results across periods, emphasizing that these measures should not replace GAAP results and may differ from those used by other entities - Management uses non-GAAP financial measures as supplemental measures in assessing the Company's performance[9] - These measures are helpful to investors and other interested parties as measures of comparative performance from period to period and are commonly used in determining business value[9] - Non-GAAP financial measures should be considered supplemental to, and not a substitute for, the Company's reported financial results prepared in accordance with GAAP[10] - The Company's definition of these non-GAAP measures may differ from similarly titled measures used by others, and investors are encouraged to review consolidated financial statements in their entirety[10] Non-GAAP Definitions The report defines several non-GAAP financial measures, including constant currency revenue growth, adjusted gross margin/operating income/net income/diluted EPS, adjusted EBITDA, and free cash flow, each excluding specific non-recurring or non-cash items - Constant currency revenue growth: Represents the change in revenue between current and prior year periods using the exchange rate in effect during the applicable prior year period[12] - Adjusted gross margin, adjusted operating income, adjusted net income, and adjusted diluted earnings per share: Exclude the impact of certain significant transactions or events, such as legal settlements, medical device corrections, gains (losses) on investments, and loss on extinguishment of debt[12] - Adjusted EBITDA: Represents net income plus net interest expense, income tax expense, depreciation and amortization, stock-based compensation expense, and other significant transactions or events affecting period-to-period comparability[12] - Free cash flow: Defined as net cash provided by operating activities less capital expenditures[12] Forward-Looking Statements & Risks Forward-Looking Statement Disclaimer The press release contains forward-looking statements about future performance, product success, and regulatory approvals, which are based on management's current beliefs and assumptions, but are not guarantees, and actual results could differ materially due to underlying risks and uncertainties - This press release contains forward-looking statements regarding future operating and financial performance, product success and efficacy, the outcome of studies and trials, and the approval of products by regulatory bodies[11] - These statements are based on management's current beliefs, assumptions, and estimates and are not intended to be a guarantee of future events or performance[11] - Actual results could vary materially from expectations if management's underlying assumptions turn out to be incorrect, or if certain risks or uncertainties materialize[13] Risks and Uncertainties Insulet faces various risks, including dependence on its product platform, intense competition, challenges in maintaining sales and customer base, reimbursement issues, product development hurdles, intellectual property protection, macroeconomic and geopolitical uncertainties, international business risks, manufacturing concentration, supply chain disruptions, regulatory compliance, use of AI tools, and potential recalls or cyberattacks - Dependence on a principal product platform; impact of competitive products, technological change, and product innovation[14] - Ability to maintain an effective sales force, expand distribution network, and grow customer base; securing and retaining adequate coverage or reimbursement from third-party payors[14] - Ability to design, develop, manufacture, and commercialize future products; unfavorable results of clinical studies or negative publications[14] - Ability to protect intellectual property and potential conflicts with third-party IP; inability to maintain or enter new license agreements for CGMs or data management systems[14] - Worldwide macroeconomic and geopolitical uncertainty, public health crises, supply chain disruptions, and international regulatory/commercial/logistics business risks[15] - Concentration of manufacturing operations and storage of inventory; supply problems or price fluctuations with sole source or third-party suppliers[15] - Challenges to the future development of the non-insulin drug delivery product line; failure to comply with FDA quality system regulations or other manufacturing difficulties[15] - Extensive government regulation applicable to medical devices, as well as complex and evolving privacy and data protection laws; use of artificial intelligence tools[15] - Adverse regulatory or legal actions relating to current or future Omnipod products; potential adverse impacts from recalls, safety issues, or product liability lawsuits[15] - Breaches or failures of product or information technology systems, including by cyberattack; ability to attract, motivate, and retain key personnel[15] - Risks associated with potential future acquisitions or investments; ability to raise additional funds; volatility of common stock; and changes in tax laws[15] Condensed Consolidated Financial Statements (Unaudited) Condensed Consolidated Statements of Income The unaudited condensed consolidated statements of income show Insulet's financial performance for the three and six months ended June 30, 2025, compared to 2024, with significant revenue growth but a decrease in net income due to a large loss on extinguishment of debt and a prior-year tax benefit Statements of Income | (dollars in millions, except per share data) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----------------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | | Revenue | $649.1 | $488.5 | $1,218.1 | $930.2 | | Cost of revenue | $196.9 | $157.6 | $356.8 | $292.5 | | Gross profit | $452.2 | $330.9 | $861.3 | $637.7 | | Research and development expenses | $73.4 | $53.9 | $133.0 | $104.1 | | Selling, general and administrative expenses | $257.7 | $222.5 | $518.4 | $422.2 | | Operating income | $121.1 | $54.5 | $209.9 | $111.5 | | Interest expense, net | $(9.5) | $(1.7) | $(8.5) | $(3.0) | | Loss on extinguishment of debt | $(84.4) | — | $(123.9) | — | | Other income (expense), net | $1.3 | $(1.8) | $(0.9) | $(2.5) | | Income before income taxes | $28.4 | $51.1 | $76.5 | $106.0 | | Income tax (expense) benefit | $(5.9) | $137.5 | $(18.6) | $134.1 | | Net income | $22.5 | $188.6 | $57.9 | $240.1 | | Diluted EPS | $0.32 | $2.59 | $0.82 | $3.32 | Reconciliation of Diluted Net Income The reconciliation shows the adjustment from net income to diluted net income, primarily by adding back interest expense, net of tax, attributable to the assumed conversion of convertible notes, which was applicable in 2024 but not 2025 Diluted Net Income Reconciliation | (in millions) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :---------------------------------------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | | Net income | $22.5 | $188.6 | $57.9 | $240.1 | | Add back interest expense, net of tax attributable to assumed conversion of convertible notes | — | $2.5 | — | $4.9 | | Net income, diluted | $22.5 | $191.1 | $57.9 | $245.0 | Condensed Consolidated Balance Sheets Insulet's unaudited condensed consolidated balance sheets show an increase in total assets to $3,469.2 million as of June 30, 2025, from $3,087.7 million at December 31, 2024, driven by increases in cash, accounts receivable, and prepaid expenses, while total liabilities also increased due to a rise in the current portion of long-term debt, and stockholders' equity grew to $1,462.9 million Balance Sheet Overview | (dollars in millions) | June 30, 2025 | December 31, 2024 | | :-------------------------------- | :-------------- | :---------------- | | ASSETS | | | | Cash and cash equivalents | $1,121.6 | $953.4 | | Accounts receivable, net | $444.5 | $365.5 | | Inventories | $446.9 | $430.4 | | Prepaid expenses and other current assets | $266.7 | $142.0 | | Total current assets | $2,279.7 | $1,891.3 | | Property, plant and equipment, net | $720.4 | $723.1 | | Other intangible assets, net | $102.3 | $98.5 | | Goodwill | $51.7 | $51.5 | | Other assets | $315.1 | $323.3 | | Total assets | $3,469.2 | $3,087.7 | | LIABILITIES AND STOCKHOLDERS' EQUITY | | | | Accounts payable | $96.1 | $19.8 | | Accrued expenses and other current liabilities | $453.4 | $424.9 | | Current portion of long-term debt | $460.7 | $83.8 | | Total current liabilities | $1,010.1 | $528.4 | | Long-term debt, net | $939.0 | $1,296.1 | | Other liabilities | $57.1 | $51.7 | | Total liabilities | $2,006.3 | $1,876.1 | | Stockholders' equity | $1,462.9 | $1,211.6 | | Total liabilities and stockholders' equity | $3,469.2 | $3,087.7 | Non-GAAP Reconciliations (Unaudited) Constant Currency Revenue Growth In Q2 2025, total revenue grew 32.9% (31.3% in constant currency), with International Omnipod revenue showing the highest growth at 45.0% (38.8% constant currency), and for the six months ended June 30, 2025, total revenue grew 30.9% (30.6% constant currency) Revenue Growth by Segment | (dollars in millions) | 2025 Revenue | 2024 Revenue | Percent Change | Currency Impact | Constant Currency | | :-------------------- | :----------- | :----------- | :------------- | :-------------- | :---------------- | | Three Months Ended June 30, | | | | | | | U.S. Omnipod | $453.2 | $352.3 | 28.7% | —% | 28.7% | | International Omnipod | $185.8 | $128.2 | 45.0% | 6.2% | 38.8% | | Total Omnipod Products | $639.0 | $480.4 | 33.0% | 1.6% | 31.4% | | Drug Delivery | $10.2 | $8.1 | 25.7% | —% | 25.7% | | Total | $649.1 | $488.5 | 32.9% | 1.6% | 31.3% | | Six Months Ended June 30, | | | | | | | U.S. Omnipod | $854.9 | $670.0 | 27.6% | —% | 27.6% | | International Omnipod | $338.1 | $243.4 | 38.9% | 1.4% | 37.5% | | Total Omnipod Products | $1,193.0 | $913.4 | 30.6% | 0.4% | 30.2% | | Drug Delivery | $25.1 | $16.8 | 49.2% | —% | 49.2% | | Total | $1,218.1 | $930.2 | 30.9% | 0.4% | 30.6% | Adjusted Operating Income, Net Income & Diluted EPS This section provides reconciliations of GAAP operating income, net income, and diluted EPS to their adjusted non-GAAP counterparts for various periods, with key adjustments including CEO transition costs, loss on extinguishment of debt, loss on investments, and significant tax matters impacting period-to-period comparability Three Months Ended June 30, 2025 Reconciliation for Q2 2025 | (in millions, except per share data) | GAAP | CEO Transition Costs | Loss on Extinguishment of Debt | Tax Matters | Interest Expense (Convertible Notes) | Non-GAAP | | :--------------------------------- | :--- | :------------------- | :----------------------------- | :---------- | :--------------------------------- | :------- | | Operating Income | $121.1 | $(5.3) | — | — | — | $115.8 | | Income before Income Taxes | $28.4 | $(5.3) | $84.4 | — | — | $107.5 | | Net Income | $22.5 | $(5.5) | $84.1 | $(17.3) | — | $83.7 | | Net Income, Diluted | $22.5 | $(5.5) | $84.1 | $(17.3) | $1.2 | $85.0 | | Diluted Earnings per Share | $0.32 | $(0.08) | $1.16 | $(0.24) | $0.02 | $1.17 | Six Months Ended June 30, 2025 Reconciliation for H1 2025 | (in millions, except per share data) | GAAP | CEO Transition Costs | Loss on Investments | Loss on Extinguishment of Debt | Tax Matters | Interest Expense (Convertible Notes) | Non-GAAP | | :--------------------------------- | :--- | :------------------- | :------------------ | :----------------------------- | :---------- | :--------------------------------- | :------- | | Operating Income | $209.9 | $(5.3) | $4.7 | — | — | — | $209.2 | | Income before Income Taxes | $76.5 | $(5.3) | $7.5 | $123.9 | — | — | $202.6 | | Net Income | $57.9 | $(5.5) | $5.8 | $123.0 | $(23.8) | — | $157.4 | | Net Income, Diluted | $57.9 | $(5.5) | $5.8 | $123.0 | $(23.8) | $2.9 | $160.3 | | Diluted Earnings per Share | $0.82 | $(0.07) | $0.08 | $1.68 | $(0.32) | $0.04 | $2.19 | Three Months Ended June 30, 2024 Reconciliation for Q2 2024 | (dollars in millions) | GAAP | Loss on Investments | Tax Matters | Non-GAAP | | :-------------------- | :--- | :------------------ | :---------- | :------- | | Income before Income Taxes | $51.1 | $1.8 | — | $52.8 | | Net Income | $188.6 | $1.4 | $(151.7) | $38.3 | | Net Income, Diluted | $191.1 | $1.4 | $(151.7) | $40.8 | | Diluted Earnings per Share | $2.59 | $0.02 | $(2.06) | $0.55 | Six Months Ended June 30, 2024 Reconciliation for H1 2024 | (dollars in millions) | GAAP | Loss on Investments | Tax Matters | Non-GAAP | | :-------------------- | :--- | :------------------ | :---------- | :------- | | Income before Income Taxes | $106.0 | $1.8 | — | $107.7 | | Net Income | $240.1 | $1.4 | $(158.3) | $83.2 | | Net Income, Diluted | $245.0 | $1.4 | $(158.3) | $88.2 | | Diluted Earnings per Share | $3.32 | $0.02 | $(2.15) | $1.19 | Diluted Shares The non-GAAP diluted weighted average common shares outstanding for Q2 2025 were 72,514 thousand, an increase from the GAAP figure of 70,652 thousand due to the inclusion of convertible notes, with non-GAAP diluted shares for the six months ended June 30, 2025, at 73,312 thousand Diluted Shares Calculation | (in thousands) | Three Months Ended June 30, 2025 | Six Months Ended June 30, 2025 | | :-------------------------------------------------- | :------------------------------- | :------------------------------- | | GAAP weighted average number of common shares outstanding, diluted | 70,652 | 70,641 | | Convertible notes | 1,862 | 2,671 | | Non-GAAP weighted average number of common shares outstanding, diluted | 72,514 | 73,312 | Adjusted EBITDA Insulet's Adjusted EBITDA for Q2 2025 was $157.5 million (24.3% of revenue), significantly up from $90.9 million (18.6% of revenue) in Q2 2024, and for the six months ended June 30, 2025, it was $291.5 million (23.9% of revenue), compared to $180.0 million (19.4% of revenue) in the prior year, with key adjustments including loss on extinguishment of debt and CEO transition costs in 2025, and a large tax benefit in 2024 Adjusted EBITDA Reconciliation | (dollars in millions) | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :-------------------------- | :------ | :------ | :------ | :------ | | Net income | $22.5 | $188.6 | $57.9 | $240.1 | | Interest expense, net | $9.5 | $1.7 | $8.5 | $3.0 | | Income tax expense (benefit) | $5.9 | $(137.5) | $18.6 | $(134.1) | | Depreciation and amortization | $22.3 | $19.3 | $44.0 | $38.0 | | Stock-based compensation expense | $7.5 | $17.0 | $25.7 | $31.2 | | CEO transition | $5.4 | — | $5.4 | — | | Loss on extinguishment of debt | $84.4 | — | $123.9 | — | | Loss on investments | — | $1.8 | $7.5 | $1.8 | | Adjusted EBITDA | $157.5 | $90.9 | $291.5 | $180.0 | | Adjusted EBITDA as % of Revenue | 24.3% | 18.6% | 23.9% | 19.4% | Free Cash Flow For the six months ended June 30, 2025, Insulet generated $229.4 million in free cash flow, calculated from $260.3 million in net cash provided by operating activities minus $30.9 million in capital expenditures Free Cash Flow Calculation | (in millions) | Six Months Ended June 30, 2025 | | :-------------------------------- | :------------------------------- | | Net cash provided by operating activities | $260.3 | | Capital expenditures | $(30.9) | | Free cash flow | $229.4 | Revenue Guidance (Non-GAAP) Insulet's non-GAAP revenue guidance for FY 2025 projects total revenue growth of 24%-27% in constant currency, with U.S. Omnipod at 22%-25% and International Omnipod at 34%-37%, while Q3 2025 total revenue growth is guided at 22%-25% in constant currency Non-GAAP Revenue Guidance | Revenue Growth (Constant Currency) | Year Ending December 31, 2025 | Three Months Ended September 30, 2025 | | :--------------------------------- | :---------------------------- | :------------------------------------ | | U.S. Omnipod | 22% - 25% | 21% - 24% | | International Omnipod | 34% - 37% | 33% - 36% | | Total Omnipod | 25% - 28% | 24% - 27% | | Drug Delivery | (30)% - (25)% | (80)% - (75)% | | Total | 24% - 27% | 22% - 25% |