Insulet Corporation Q2 FY2025 earnings call

Key Points - Ashley highlighted Insulet's position as a differentiated durable-growth company in a large underpenetrated market, with record revenue and new customer starts. Omnipod 5 drove growth in U.S. Type 1, U.S. Type 2, and international markets. - Ana mentioned strong execution across the business, including the expansion of the U.S. sales team, progress in developing the type 2 market, and investment in innovation and the supply chain. - The company emphasized the clinical outcomes of Omnipod 5, with robust results from the SECURE-T2D trial in type 2 diabetes, and continued investment in platform innovation like next-generation algorithms and sensor integrations.

Insulet's second quarter 2025 revenue reached $649 million, marking a 31% year-over-year growth. The U.S. revenue grew by 28.7%, driven by strong demand for Omnipod 5 and expansion of the customer base. International revenue saw a remarkable 38.8% growth, accounting for approximately 30% of the total revenues. This international growth was primarily fueled by continued demand for Omnipod 5 and customer base expansion, with strong performance in key markets such as the U.K., Germany, and France, where customers were shifting from Omnipod DASH to Omnipod 5.

Full-Year Guidance - Raised total company revenue growth guidance to a range of 24% to 27% on a constant currency basis. - U.S. Omnipod revenue guidance is adjusted to 22% to 25%, driven by customer base growth and continued patient conversions from MDI. - International Omnipod revenue guidance is increased to 34% to 37%, with strong growth expected in the U.K., Germany, and France, supported by new sensor integrations and customer upgrades from Omnipod DASH to Omnipod 5. - Gross margin guidance remains around 71%, and adjusted operating margin guidance is set at 17% to 17.5%, with plans to continue investing in supply chain and innovation to support growth.

No specific detailed risks were discussed during the call.

Q: Both the U.S. and international came in nicely ahead. So can you talk about some of the drivers of the upside both in the U.S. and internationally and the trends that you're seeing in those different geographies across new patient growth?

A: Ashley mentioned strong adoption of Omnipod 5 in the U.S. due to clinical outcomes and sensor integrations, strong momentum in U.S. Type 2 driven by sharing clinical evidence and market access, and international growth driven by demand for Omnipod 5 and customer base growth in key markets like the U.K., Germany, and France.

Q: Congrats on quarter and congrats on hiring Claire, she's a well-loved IR person. So a good get. And I wanted to ask on type 2 and the new starts that accelerated this quarter. what do you think kind of drove that acceleration? Can the acceleration kind of continue in the back half of the year? And just kind of get an update on kind of the overall type 2 opportunity here?

A: Ashley said type 2 growth is driven by sharing strong clinical evidence, strong market access with low co-pays, expanding the field force, and sourcing from MDI and competitive users, and expects acceleration to continue.

Q: Congrats on strong quarter. Ashley, you know as we're all trying to get to know you a little bit better here. I think one of my questions just such a strong raise in 2Q here, and 2Q can be a tricky quarter because I think a lot of companies would like to leave a little bit of room for 3Q and 4Q as well. So just your overall framework and how you think about guidance, do you like to set guidance at realistic numbers? Are they numbers that you feel maybe a little aggressive, a little conservative? Just kind of your framework for how you think about guidance, especially after today's strong rate.

A: Ana mentioned they set guidance to hit it, reflecting strong fundamentals and raising guidance due to momentum.

Q: Congrats on the a really strong quarter. Maybe just to focus on the U.S. business, if I take all the pieces of the guidance, it implies about 14% to 22% growth in Q4, if I'm doing my math right, which is a pretty wide range. So can you talk about what gets you to the high end versus like the low end of the range? And how should we think about that in the context of 2026? Is 20% growth still a good way to think about the U.S. business, going forward?

A: Ana said underlying business trends are stable, first half normalized growth rate is 24%, and back-half guidance is strong with momentum continuing.

Q: Nice quarter. Internationally, it sounds like it's going quite well for you with the target on 4 countries. How do you think about expanding those or expanding the footprint as you push further outside the United States?

A: Ashley mentioned continuing penetration in existing stronghold markets like the U.K., France, Germany, and being thoughtful about expanding to other markets with a balanced strategy.

Q: I was hoping you could shed some light on second-half guidance, I think it assumes about 21% selling day adjusted growth versus 30% in the first half. So can you maybe just elaborate on some of the assumptions behind the 2025 guidance? What drives the step down in Q2? Is it conservatism or are there other factors to consider? And you did call out for U.S. Omnipod revenue in Q2, you called out some stocking dynamic and some tailwinds around rebates. So if you can just help us with some of the puts and takes to come up with the underlying growth, that would be helpful.

A: Ana said business is very stable, first half U.S. normalized growth rate is 24%, and guidance is strong due to momentum.

Q: I just want to echo Travis' comments on Claire joining the company, the opportunity to work with her directly and think she'll be a great addition to the team. And I just want to also thank June for all of her support as we've gotten up to speed here on the company. Maybe I'll just ask on a comment that you made kind of towards the latter part of the call around increasing CapEx to support higher demand. Can you maybe go into a little bit more detail there on how demand has shaped up relative to expectations? And if that acceleration in CapEx is a reflection of a view of demand tracking ahead of original expectations and a view that, that can continue here and how we should kind of put those pieces together?

A: Ashley said they invest ahead of the curve to meet demand, with new lines in Acton and presence in Malaysia, continuing to invest in the supply chain.

Q: I'm interested in the comment on the recent Medicare proposal around competitive bidding and shifting payment in the DME channel to pay over time. Look, I understand you're not directly exposed here, you have chosen a different business model. And so kind of nothing to say on that. But if this moves forward, the industry stands to change quite a bit, and I'm interested what PODD is thinking about as to how to stay ahead of those potential shifts as you digest what's a very complex suggestion rule from the government.

A: Ashley said they support increased access to technology, available through the pharmacy channel with a pay-as-you-go model, and will continue to gauge with CMS.

Q: Congrats on the quarter. Wondering if you could just comment a little bit on the -- how the T2 indication is potentially allowing you to better compete for type 2 patients versus the competition? And how much of the momentum you're seeing there from last quarter or the last few quarters, is that indication versus converting to marketing initiatives direct to patients?

A: Eric said T2 indication helps build the market with clinical evidence from the SECURE-T2D study, differentiated technology and access help compete, with momentum from bringing evidence to prescribers.

Q: On type 2, I'm sorry if I missed this, but did you break out the proportion of new starts in the U.S. coming from type 2? I think that's usually something we've had from you guys. And then just following on type 2, how should we think about who is prescribing type 2 scripts early doors? Is it leaning more primary care, still very much in the ENDO space? And then what are you seeing in terms of direct-to-consumer leads as well?

A: Ashley said about 1/3 of U.S. new customer starts are from type 2, in the early innings with ENDOs and high-prescribing PCPs, with more to share on Investor Day.

Q: Had a related question on your last comment there. You talked about earlier on this call about 25,000 prescribers, I think. And it sounds like the sales force expansion has been relatively seamless. I was just thinking, Dexcom, I think, calls out 100,000 prescribers in the U.S. Do you think that we'll continue to see that kind of growth towards the Dexcom number over time? Or are you viewing your growth in the future coming more from 'same-store growth'?

A: Ashley said there is room for growth in the U.S., with a new market in type 2, and more to share on Investor Day.

Q: Actually, I think when you first started, there was some fear about operating margin expansion and maybe some of the reinvestments you talked about. And it's interesting, you had significant leverage, especially on the SG&A component of that this quarter. I was wondering, has anything changed there? Did you freeze spending? Did you just change what the strategy and the investment was and you've not yet just implemented it? And how should we think about that kind of going forward?

A: Ashley said strategies remain intact, with investments in innovation, market development, commercial excellence, and global scale.

Q: I wanted to ask about that comment on an acceleration. I think Ana Maria mentioned in competitive conversions in the quarter. Can you just talk a little bit about what drove that? And is that the commentary about MDI acceleration of record new patient numbers in Q2, is that excluding the new competitive conversions? So on its own MDI would have accelerated and then the competitive conversions are on top of that?

A: Eric said MDI and competitive conversions accelerated, driven by innovation, access, execution, and markets.

Q: Congrats on a really strong quarter here. I just wanted to follow up on the primary care physician side of things. And I'm just curious if you guys could talk about, maybe Eric, this is for you; sort of how the go-to-market strategy with primary care differs from endocrinologists? ENDOs have been adopting pumps for a very long time, primary care -- they're dealing with a lot of other things besides their -- in addition to their diabetic patients. So just curious about how heavy the lift is in primary care versus ENDO and sort of how you guys are adapting to that?

A: Ashley and Eric said primary care is in the early innings, with selling of science and support, and education on the experience, differing from endocrinologists.

Q: And congrats on the progress here. Just on the international business, big step-up sequentially, growth accelerated off of an already high level. It didn't sound like it, but was there a notable contribution from any new geographies? And just one other quick one. Thinking of the volume price mix, where are you in terms of 05 adoption within your international base?

A: Ana said Omnipod 5 conversions are up to 50% of the total, with strong growth in core markets.

Q: Maybe just a follow-up on the last question on really impressive overseas growth. If you could talk maybe a little bit about the mix effect of having such a strong outside the U.S. geographical contribution down the P&L, if there is any notable differences in the way that kind of drives the P&L? And then also the way that you scale into some of these geographies in addition to kind of the mix to Omnipod 5, is there a -- I guess a bit of a follow-up to the last question, was there kind of a step-up in, I don't know, new distributorships or significant steps that we can build off of, but that maybe kind of feed back into your views in the back half and how you're thinking about guidance?

A: Ana said market access and development levers drive penetration, with new markets to contribute in upcoming quarters.

Q: This is Carol on for Chris. I just wanted to follow up on the gross margins. It looked like you would have exceeded 71% in the first half if you exclude the inventory charge. And your outlook on tariffs has improved by about 30 bps. And it looks like你 reiterated your margin guidance for the year. So how are you thinking about the second half? And if you see kind of show for any underlying improvement there?

A: Ashley said underlying performance is strong, and the company is on track to deliver a 71% gross margin.