Earnings call transcript Q2 2023

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Operator

Good afternoon, ladies and gentlemen, and welcome to the Insulet Corporation Second Quarter 2023 Earnings Call. [Operator Instructions].

I would now like to turn the conference over to your host, Deborah Gordon, Vice President, Investor Relations.

Deborah Gordon

Thank you. Good afternoon, and thank you joining us for Insulet's Second Quarter 2023 Earnings Call. Jim Executive and Financial Vice are and Executive Officer. today McMillan, Wayde President me Hollingshead, Chief President Officer; With and Chief

metrics discussing summary website the encourage that Investor business Both the section presentation. of and our this We of Also Relations of second will our on document quarter website. release earnings our guidance on the reference and our quarterly for you available call be key to our a results is replay updates. press and supplemental

limitations Before we certain like currency statements. of non-GAAP such inform revenue of which statements a cautionary forward-looking detailed from to made gross may We'll the in to performance, course to inherent differ constant and explanation statements measures call for growth we the financial the current operating of our namely would the begin, refer and filings you expectations. revenue, discuss could materially and by EBITDA that Insulet our this foreign adjusted Please respect exchange. be with during SEC effect is excluding adjusted also margins, of

other of These helpful performance, period our investors, parties they and believe as with are management to our measures interested operating and measures performance operating in period. we analysts as what measures supplemental align assessing to uses from

which year-over-year otherwise on Additionally, be a the financial basis, reported percentage currency growth will on commentary constant stated, be with rates, all of changes unless regarding dollar a will and basis. exception year-over-year revenue

the I'll turn that, call over Jim. to With

James Hollingshead

while year. successful entire a sustained achieving strong is several on we QX, level, you global joining executing performance and and deliver In of also strong Insulet enjoyed afternoon, The we track and we team another remain thank Good financial quarter continue and and transformative for strategic Deb. key milestones. for another innovation high at Thanks, to momentum, us.

drive penetration launch. X on expanded awareness our clinical opportunity market how of performance, to with I'll consumer-focused the X our a topics: access call, international achievements, Omnipod today's we're innovation and touch massive continuing On main and strong financial and

Starting with performance. financial our

our Our revenue growth Omnipod of growth exceeded second total quarter expectations XX%, of U.S. including XX%. with

total the XX%. company raised these of for year. our we've growth achieved also outlook We Because terrific of results,

to pod-based disrupt FDA-approved insulin as delivery X market the continues only diabetes fully the technology automated Omnipod disposable, system.

offering XX% flagship quarter starts. U.S. record of major be continues growth was Omnipod to new And of Our responsible global new U.S. customer the and revenue our customer another represented driver almost starts. U.S. X and for of

have of our the on to Omnipod Building commercial the are United Kingdom. pleased in X launch success in very completed the U.S., we

are international AID We excited to first system to bring unmatched our our market.

plans for Germany this Omnipod a our X European broader markets in rollout track on launch are staged across to XXXX. with fall in Our

We the quarter. had from first also initiatives X We formidable clinical where in innovation compelling type at year and advanced during X second users. ADA Omnipod our a and type both the real-world X U.S. June data the in for on presented presence we meaningfully new

are and In addition, well. U.S., type randomized France controlled our trials U.S. pivotal X progressing

submitted advance have most we thrilled business of to and FDA lives the our simplify from strategy features XXX(k) offering with year new this of momentum to near side, second clear iOS requested bringing focused entered with our diabetes. our is the the for On and market half the to and X control a mission the app forward term. the our the iPhone. We of to in Omnipod innovation the phone we look people one customers, are to for iOS in to the improve

factor we easy-to-use Omnipod and it innovation. are and the and channel, we broad benefits and delivers. notably, access strong unmatched clear: real-world affordability pharmacy That incredibly excited customer is Central the our clinical about is experience, experience outcomes. are to Its form game-changing drive through simple consumer-focused to everything and do X and why deliver technology, technology an

very broad multiple tubed mix injections attracting customer historical to estimated customers continues is XX-XX Omnipod all pumps to coming Omnipod appeal substantial percentage compared of X legacy and daily age have new was and mix. our In groups. from new split starts an XX-XX QX, the across

impact capture diabetes switches products adoption We MDI, significant was our continue Omnipod community. X to designed of adoption while is tubed brand coming isn't pump only also growing evidence those specifically of what which for. from on pump considerable the from the Omnipod

also retention seeing rates. stable are We

increase QX. where from there the HCPs up which number in of to QX, are Omnipod was XX,XXX wrote in also We over sizable is saw in X,XXX X,XXX That a over X XX,XXX, in who scripts market for a endocrinologists.

at ongoing Omnipod of Podder who Podders said, feedback the very and community, other the changed recently recently and clinic informed his receive has all, have also strongly a we loved us he in from We to with endo is he that never HCPs a He power communicates diabetes X heard type majority they of patients. the cases, AID X. X how looked switching their Omnipod and an by I for to therapy ones illustrated large Omnipod back." from caregivers. clear X, parents to now across The And recommends choose "Since

strategy both Excitingly, where well Omnipod the Omnipod access X see The continue market drive underpenetrated. which adoption and today. our X type in from penetration markets, already the that alone is reinforcing to pump Omnipod to is is contributing type will lead pump Our approximate X of success-building confidence market we XX% core X the in U.S., overall over to vastly XX% it the ability remain to our awareness and of in opportunity type and to to massive.

customers the is to customer on more cost of access. our U.S. the $XX how expanding with month also our United the customers our Omnipod for success, The provides channel pay convenient to pharmacy and patients experience majority pod par affordable, channel, in continue to and remains U.S. simplifies continue to it their a vast access we less pharmacy key channel this The efficient putting MDI. channel. a convenient the And get The than driver States. hear of from for pharmacy through through it overall

We are lives but only outcomes the capturing through our our our clinical and of the advanced opportunity not product's customers simplicity. and also technology convenience improving and market

initiatives. had a we our significantly including at of our fantastic representation and leads quarter, standing advanced number We clinical booth. record theater ADA, This room-only at at our product

time, real-world X for real-world X Omnipod type improved The adolescents presented adults X the children, data data with Omnipod and combined with type We evidence, and, outcomes for demonstrating diabetes first for X. adults real-world overall exactly designed as advanced groups. building and customer are Every lives. included it is we XX,XXX evidence demonstrates algorithm that system improving all working was and individuals real-world undoubtedly day, age that across our

We will since over improve can customer incredibly data be is real-world experience continue also streamlining while time user to the Omnipod X physician and personalize Our overall cloud powerful workflows. connected. every

our usage our into constantly product which population-level us improve build We will on insight allow have will and already market-leading patterns, unprecedented to offerings to actual differentiation.

and Every usage the day, customer engines. growing rapidly to use of all coaching base, we be able able learn this diagnosis will course from data patterns, experience, are improve through We'll constantly X private, we be our Omnipod to offerings the usage lives. drive from from and way secure their the segment care our building to increasingly customer de-identified data

all we'll better Nobody and be flywheel data preference, on continue it on we'll the put where evidence simply, have data that in diabetes data from includes customer the is product patients itself. can it that a have, experience therapy to the make and will effectively the This we To we lead. more more will builds streamline create workflows, else therapy.

for As we ADA, expect at enrollment X trial Libre of the include Omnipod X XXX Belgium. will participants trial, also to across weeks be CGM, up including begin to MDI, a U.K., mentioned with a France in endpoint currently a matter we of which and with change FreeStyle diabetes will the X using It those controlled XX-week type institutions AXc. with in primary on the XX randomized in

not regulatory support access from perspective, Although we pricing trial and initiatives. our the from expect data to needed this a

to on We system. place the has Libre point integration Abbott's where integrated our along we is with are and far soon that participants study excited will advanced the

announced month. effectiveness. type participants will include study older with safety XX type aged and XX-week diabetes XX next-generation take algorithm, We New will to for and is Zealand and of and AID our X first This place in or X up to years which study last began assess also feasibility a which recruitment designed

algorithm our work informed allows which by strong new is in system than incredibly we data, advance ways usage our envisioned. to Our to more continue had originally even us

for including type the major our during study, enrollment pivotal complete we X end We of by advanced expect which the year. to QX, clinical other programs

participants The the product greater on is DASH expressed can how and participants As have impact making and study it HCPs a type population. the is and after have impressed for an diabetes, be up Omnipod received are we we study HCPs X, people, are a to of trial's on to this their completion. doing reminder, even the largest well on to X type strongly have Omnipod study underserved Omnipod from participants conducted. with are has X game desire people X-month changer feedback we a X this proven confident have stay with encouraging. XXX

in France and premium in Omnipod to with trial. access markets. Dexcom's Once and final prepare our X we on data will our randomized international Omnipod the our soon for Lastly, GX analyze is to track complete, X controlled participant negotiate complete pricing

one of that be many international Omnipod will commercial are support initiatives expect X now this We data providing underway. launches, will our which

do is While pipeline come, is we long today time robust long-term to diabetes know to disrupting sustainable so growth. and a drive management expected innovation to a is necessary Omnipod X for

to will our typically market Omnipod." HCPs commercial and begin limited soon don't our whom GO which us will This also are reach. We expand upon the to that allow "new we will Omnipod U.S. and include call test rollout,

who prevent well of simplified therapy, of X fear new-to-market, in product grant dosing with challenges look in expand insulin. initiation Omnipod forward inform to the XXXX. our the accuracy will addresses which least consistency. at help U.S. will pilot require namely learnings earlier type access million can We as market needles our that as pathway the in the market critical X and GO basal-only our us will program, alone people This barriers from release full and insulin key addressable by

Omnipod pharmacy expected type well model affordable number X X. have our an for market with positioned in business grow DASH not differentiated of type Omnipod including Omnipod X We GO, a very are in space, soon, a the competitive an certainly pay-as-you-go access. form adoption this and to and, channel indication to mention future factor, advantages We

to result, a base. number type continue we As add customer our X of patients to substantial a

with of products. XX% of customer starts During diabetes X Omnipod new QX, our type across an U.S. our people represented portfolio estimated

base our customer Given rate, growing tremendous at type outpacing type the an X. is success Omnipod incredible X of X, far

sequentially. absolute basis, an X new on customer increased However, type our starts

our with Omnipod can X progressing, submission review June and in milestone so is with work iOS innovation major XXX(k) for Omnipod customer look our another The platform FDA's to the achieved forward We we the iOS we expanding option app. to the continuing to base. provide X agency

also Omnipod X, both with with us are of on future CGM integration system which best we market. is to partners, provide advancing the choice AID We allowing our believe the our of efforts CGM firmly

We proposition diabetes. integrations value people our be importantly, improve catalysts expect long-term to with one strengthen us that many of of fuel and these to lives mission to allow will and, execute our simplify our most continue growth the and

to key expand is our a continued portfolio, enabling which growth. continue intellectual We property our asset

as of actively also our defend innovations technologies proprietary and valuable appropriate. We portfolio

investigation, EOFlow's legal case, from action of quickly As determined and on In well further infringement you may took unique that stop the injunction and filed EOFlow's further against the week against last this infringes IP. technologies, secrets suit additional and of patents parties as know, patents trade Insulet's after successfully the and court in EOFlow that prohibiting in continued of we infringing issued our Germany. proprietary distribution our earlier U.S. our court the we other EOFlow an to in misappropriation the an affiliated the Subsequently, product other distributor valuable year, Germany. as

enforce also will will trade our our only patents we protect valuable necessary, not secrets. zealously when We

in we IP and when of will followers have defend on We our in clear misappropriating technically we to attempt not terms we hesitate an it vigorously are scalability, lead see confident up. to or infringing catch a and both

operations. international our to on Moving

to Omnipod X excited U.K. the June. commercially launched are in in We have

fantastic. has While only of time, a market period the it response been been has brief

alone, we almost we throughout considerable Xand including rates, launch, an Following Omnipod those month doubling already our as of number X a on new order customers of customer brand. well as typical users quickly started last both saw

closer beginning of launch have the thrilled Omnipod season remain are to to our our We of this the X rollout technology XXXX, is majority to long provide international for to have those X to for been Germany customers. advanced available European XXXX. in Omnipod who fall, our track end broader in it. staged with on the a goal waiting the By of We

In and closing, in we've have reached the midpoint business. our momentum of incredible XXXX

financial strategic delivering are milestones. achieving performance We strong and key

We our our of signs and innovation X, and Omnipod shows advanced programs have no commercial, and entire clinical slowing business down.

well in positioned expand advanced X continue to industry globally are the to access and lead We to innovation. Omnipod

It's leadership and established see gratifying industry our patch best-in-class are our to the that fully in factor. others disposable attempting form follow

are investing for sustained expansion. leadership We widespread international and

our we transforming are life-changing and are drive We innovations to diabetes beginning market. management, only to

turn I Wayde. now the call to will over

Wayde McMillan

guidance finishing and our the and new We financial and customer of Jim. delivered range. once revenue We in above delivered XX% QX, Thanks, global strategic starts. performance end generated progress high again U.S. another of record strong quarter growth

driven of was by growth XX%. Omnipod outperformance Our global

reported a starts was in Personal the Revenue growing charge. a currency and year. revenue, tailwind X driven premium QX to pharmacy volume. last for pharmacy, Omnipod to at growth growth where the new from pods foreign an increasing consecutive compared continues model and X total point contribution range. exceeding a no Omnipod our U.S. record This our U.S. basis, and we was annuity-based revenue with Omnipod DASH of for U.S. be basis On includes the provide Diabetes Omnipod Manager guidance XX XX%, by customer

large new volume benefited part resulted DASH estimated X X refill pharmacies. associated approximately net customers, their in existing with in who Similar an starter retail due kits and Omnipod net received and as Omnipod quarter, some as last quarter orders conversions customer to Omnipod $X in stocking estimated ramp from Classic in million. Omnipod dynamics first benefit million of headwind to an the well initial $XX we from

offset an approximately $XX a benefit net order in This estimate million Omnipod reduction was some and advantage, increased and which driving be remain by channel channel volume as $X our of on another convert actual on the period. DASH total Classic of to a pharmacies customers increase reduction of X. U.S. Omnipod than volume. expected continues and inventory X days Omnipod pharmacy channel, XX% returns and skipping estimated This associated through QX benefit in for an we of to retail with is Omnipod million in more hand in their focused The the represented inventory over competitive this sales

increased continued markets strong revenue revenue point currency and our reported of growth. year. expectations. basis order by XX XX%, DASH Omnipod our of was well of International XXX driven line Omnipod that prior tailwind Growth items basis, with adoption the a recognition associated in combination contributed in as was On basis approximately international with timing foreign a over as points a

Our estimated remain consistent. attrition global and utilization

XXX timing. the guidance above favorable Our our up delivery XX.X%, end XX%, of was to revenue increased approximately fees range production and high due basis margin Gross points.

corrections the we costs medical device included of due Cost last with announced revenue to of estimated lower income $XXX,XXX associated year.

was and slightly favorable revenue, due costs higher-than-expected above our margin gross benefit, including to favorable this expectations manufacturing Excluding mix. XX.X%,

point improved partially offset U.S. continues with X as our a as premium of ramp in growth the These from basis was well associated higher XXX total year-over-year in costs inflation. by pharmacy efficiencies costs decrease and in production, volume expected a portion manufacturing primarily were The higher and larger Omnipod to production, expense. as a become production driven warranty margin gross channel, increase by manufacturing

X.X% $XXX,XXX, to further our margin. medical expenses EBITDA respectively. investments gross Both and growth higher-than-anticipated correction adjustment and Operating higher-than-expected exclude were both revenue above our adjusted to revenue were the support margin business and favorable and and Adjusted expectations device of due our trajectory. operating XX.X%, in up year-over-year drive strong to were

cash pipeline areas This We which growth. and and under to ended and currently other our we capacity long-term the our available. quarter for million the increased $XXX years our expanding cash. sustainable of in X key organization invest to position facility In foundation June, is with financial flexibility strong liquidity. Turning and the extended build us our in gives of on million, all $XXX credit borrowing facility our to

outlook. our Now turning XXXX to

our to revenue year, range the total are expectation to revenue and XX% Omnipod XX% total company to For we a full XX% of XX%. for of growth raising growth

pharmacy of are record we model by the XX%, continued from in customer strong the driven outlook starts and Omnipod, Omnipod coming XX% increasing revenue channel. U.S. to other well new our X adoption For Omnipod revenue our growth from conversions as to both products ongoing and benefits as recurring Omnipod DASH pay-as-you-go from

August we in the full comparison which This U.S. stocking of in the related reminder, accelerated a channel last year, a which and customer volume As conversions have in release, year. the in the part half retail second from X started were includes of of pace second market the to script tougher the Omnipod due large benefits, XXXX. resulting half X of

low XXX expect currency now Omnipod, a For end International we are the basis we currency points. approximately and of estimate XX% foreign growth. favorable impact reported a raising range basis, On X% of to constant our

ongoing DASH AID growth driven expect competitive We will Omnipod partially offset be by by headwinds. adoption,

to X off We international rollout. our kicked are Omnipod have excited

reminder, given to half nature Omnipod of in a launches our XXXX. the growth we the rate start As X the expect of second model, inflecting our in annuity

we of similar now and XX%, of expect our decline low For range raising decline XX% the what a representing Drug experienced to Delivery, end we to a in are dollar XXXX.

margin. XXXX gross Turning to

due to and drivers mix product expected manufacturing. be costs XXXX increasing manufacturing our higher to with Omnipod gross by range We increasing high These mix pharmacy improved to XX%, with and at be associated expect the to sales continue impacts the the Favorable inflation. of volume to adjusted geographical X offset to XX% channel, include margin margin in line in are gross U.S. end. ramp, U.S. consistent volume

to into results factors our many expect stated, previously continue we've we XXXX. to these impact of As

we gradual second the high of However, the in course margin end over the years. coming be expect to to closer We half expect of improvement still the of year the the gross range.

Given our scaling to market opportunities, unpenetrated with our continue clinical market and position and functions. efforts commercial, and investments in operating to our expenses rise leadership large we expect support innovation

operating reaffirming the closer range. and are digits expect high be We of adjusted end it our to high of margin the guide of to single

committed and over half beyond. gross We to also to of in year investments first investments in margin second and second improvement expansion We due timing XXXX the half improved and our of half remain expect the the anticipate leveraging profit.

to at lower XXXX. a capital than to We continue be expect level expenditures

Turning XXXX to our third quarter guidance. revenue

Omnipod and XX% XX% XX% We expect total to growth of XX%. of to company total growth

For U.S. of Omnipod, we XX% growth expect XX%. to

guiding Our growth the of benefits drivers continued customer new we customer momentum, sequential remain strong start as Omnipod accelerate the our the including and QX. adoption of well growth in U.S. our X, benefits as model. result, the as annuity are pharmacy same: the new strong dollar to a and, continue sequentially strong With channel, ongoing starts to of

X% we estimate International reported points. DASH X%, On adoption from launch, Omnipod X a expect our by headwinds. approximately of of partially growth increasing a For Omnipod, driven basis, offset and favorable contribution competitive we AID exchange Omnipod a to by basis modest impact ongoing XXX foreign

Drug XX% expect we to QX XX%. of Delivery a Finally, decline revenue

also long-term areas business value and to new and financial we long-term deliver in of and throughout We're our creation. drive critical sustainable are key revenue delivering achieving another growth sustainable growth. on customer order investing In strong year Insulet conclusion, further starts track while in global performance, milestones for solid positioning to growth

With please the open operator, for call that, questions.

Operator

Instructions]. [Operator

Biegelsen Fargo. question first Wells comes Our from from Larry

Lawrence Biegelsen

Congrats quarter on another here. nice

as of some half Wayde start seeing you no year. in down, slowing lapping Jim, second but comps said, heard this of say I to tough So going you're signs you're the

is X 'XX -- The I'm Omnipod, Omnipod half sorry, XX%. growth second implied about worldwide

momentum you at do grower the are you XXXX? about yourself as keep XX%-plus beyond a see Do how pod? And GLP-Xs? you thinking how So going these

James Hollingshead

of Omnipod we and any Thanks -- a obviously for new momentum demand for pause. quarter. We age your in kind the all lot for said. seeing across The Thanks, had your for has thanks terrific. too, the X and Larry. to starts congrats, record be We see continues customer Omnipod We're as question. not starts X groups, of

the the you're question this he you to And to Wayde actually question, second Wayde so that but I can know so beyond bullish I'm growth. me we're going work because a 'XX the to throw guide there half. numbers very through on asking want for ask to

Wayde McMillan

Sure. Thanks, you're Jim. And Larry, exactly right.

of for. quarters. Omnipod over months so here XX exciting a few And completing account of X, the see ramp to the been almost are things it's onetime incredibly We couple we've first got to

you as customers, What's similar increased the If contribution benefiting this first They're of hand half Omnipod out. and some XXXX, different first got quarters significant some X $XX pharmacy. getting second X called quarter, the those we inventory quarter. from that of scripts in customers we're return And from the X, recall, in we're converting now days is seeing million. a the as to in benefit the reduction reserves on in we well

lot out, implied So the Omnipod dynamics as end a the call and playing QX at as range. you in of a QX up out But strong first in we guide, of high U.S. for year XX% the the really for we've X. ramp got

we're rates. grow really continuing X these Omnipod [indiscernible] about so excited at And here to

Operator

next Our JPMorgan. from comes from Marcus Robbie question

Robert Marcus

the to question use. today, maybe I'll moves I my And type on, quarter. diabetes, your relevant Jim, good, I X particularly guess, be really thought it address this, to you if stocks well in given just view be diabetes in waste it I the would a to increased on more would but want the congratulations nice on stocks, GLP-X particularly hate add as

in data There good was some today cardiovascular obesity.

overall business. GLP-Xs and Just frame impact to may help and your basal insulin. how diabetes intensive may your or the X any it just And investors not impact to views type and progression on

James Hollingshead

I interest. Robbie. high question Sure. know a of Thanks, it's

it's every We therapies and with with for said type with type people help up the type to get to pharmaceutical think X see diabetes. So we to we've continue diabetes. people with X before, people companies diabetes, terrific day as living X innovate

is it's happening we that So innovation across all fronts. think terrific

while, has generation drug actually been has is obviously, a this big a to off impact having from they're And latest class and additional of GLP-Xs out clearly a of GLP-X existing really the the efficacy but class. for And start.

Having all think really that innovation we're TAM. we our that, So doesn't said it confident good. impact is

just give diabetes around a billion X.X reasons There is to type you first the of grow. problem enormous. is living have the people world, to type with are diabetes why, and the diabetes. that And with than global them number X X of X couple more continues Most

So as and it's massive massively the U.S. population. globally a unmet need a medical in and underserved

thing. first the that's So

at The are second offerings, also need X who you is, million diabetes thing insulin X.X today. when our look even in people intensive the there therapy U.S. alone, with type living

So plus X.X to that's us intensive a market therapy where Omnipod and relevant to has condition U.S. million TAM in so basal with target with for help bolus, their soon X. people DASH in Omnipod progressed them whose

of and cetera. the because its market. that in win market maybe is the market in has in the channel to just mid-single right we're so scratching single et penetration a that of platform low surface and simplicity And Pump its digits, the And that digits. access Omnipod

that the published third point we was X GLP-X that lot that used which using. of population. That ago. in to And an own terms thing drugs was long with in class has all-comer trial Omnipod type saw of ATTDs feasibility know also We that insulin. X that population the A already is in X study our coexisted other I'd of trial, that we

from benefit many that Omnipod in were got the many, those GLP-Xs trial. And of patients X still using great has who

of the our our we're huge of when Omnipod Omnipod So with who we label have help we GLP-Xs a platform market need confident see changing people And X. we our don't the that get TAM. very and

Operator

next comes Blair. Our Kaczor question William from from Malgorzata

Malgorzata Kaczor

comments bit I to the little sizable But midpoint benefits. relative deeper quite a guide, listed the variety and Larry. is I this U.S. know quarter, of of appreciate on your beat guidance the I into you the a the obviously, wanted go to to

give each guess, But can range? just you're the meaningful, patient a Insulet sequential some of a rough increases impacts traditional I And atypical whether sense, how more kind that of seeing percentage a new those on you guidance meaningful adds us year? is then maybe is in for to basis,

Wayde McMillan

can X% But is still first on start of between ramp our have end the we the from year's our off high business guide. I or a to just tough range. and insight end, the little Omnipod comp part give the the more high and and in you to Margaret, last guidance to the the reason really, of accelerated about and bit QX result guidance, low durable end how headwind X Okay. annuity related one that Depending question impact the being your headwind in benefits XX% continuing think at XX% to confidence model rates at growth and of a we the grow the QX, at these factor. in

range doing build gives starts. assumes And see new confidence high to continue level in that. of momentum momentum. quarters, record which the end customer so And customer several got to continue given have starts we've new that second into And today, our we've had we'll momentum record for us the half here. we're The high to we going

So those are factors. really the major

had remarks, assuming the as things other end attrition prepared the or couple utilization. major well. our see we're don't to pharmacy a volume get to channel. we've customers more the DME by channel. pharmacy That existing the moved moving continue still from quarter of more each so we've utilization, has impact into in of the and we out good a second any high lot continues We'll channel the attrition premium benefit. into called We we and contribution that think as see that benefit to at half A grown As about stable is our converting to in

prepared from our year. a significant volume so is our now XX% as remarks, increase said of pharmacy we in time And channel, again, in last the this

reduce premium to second will a benefit to quarter. continue half, in number that and starting lesser because will customers each is extent here we're but So it the benefiting converting be to of us us the

by think the in as recall, year. existing to in a this We will of end end we have wane And through those channel lesser second X think 'XX, of customers extent, you conversions be most and a half. pharmacy to the and, Omnipod that the will done most planned be through here to of benefit we be of our converting the

again, the on at a to growing the the And continue of again. rate. we when But largest growth our is are that and, this based new to major is see growth, are our by those our we rate you throughout customer So contributor growth changes customer half base second starts volume which growing. look with far, volume the business year

of tailwinds strong momentum in to us annuity on guide, strong our model. business, lots the So based here help continue

Operator

from Pasquale from comes question Chris next Nephron Our Research.

Christopher Pasquale

about quarter. Congrats talk how U.K. much taking to the to footprint just there. inflection. OX on And example, but I little the and current we time international the Omnipod Curious model at U.S. business launch I installed it a the represents. led flow X to of look comment Germany the if your through, rollout growth a the wanted and some bit about and pretty base understand International the immediate

So why earlier than couldn't the of we see year U.S.? next something outside half back

James Hollingshead

color. maybe will provide that I'll Chris. some one then start Thanks, Wayde and with

you. Omnipod we're going really in the story launch excited just It's X So I'll well. really X about U.K. with the share

work their one waiting our we a a huge across It -- with get therapy. disco markets our customers people They markets. to many There's set in over put demand glitter get had up actually of up Omnipod they brought was on therapy. European X celebration. all ball clinics really was as decorations put up so and on and And closely office much pent-up of so all for to the

order rate said doubled. we our prepared in as has remarks, And our

So a really U.K. off in We're it's the excited about great start Germany. to

we markets, broken think different a -- of the haven't out haven't find we haven't numbers lot but materially I materially specific those medtech for percentages, we don't markets. those the you'd them broken to As from out.

in the of every little European U.S. terms a markets, growth market the different. the growth In versus is in bit

One of or U.S., at on the were in the of the that's customer growth of maybe anticipated our end had of because such main reason an the X and reasons, the we it end expectations, in all sources the pharmacy above with was channel. U.S. Omnipod the the high effect high

can into a contract. a locked are you're with the customers a over And pump, a markets, So of your U.S., are contract in in you tubed on pharmacy if European most benefit. locked cross the into into who therapy

in And conversions have our new that's us customer competitive many allowed what's what -- so that's U.S., to in the so starts.

but are for European different the a patients little on less a it's who therapy. it's flexible In everywhere, markets,

to have for contract wait up. they So to come their typically

of our are our customers therefore, So and most who new upgrades new customer from getting were own starts some products. to are therapy

it's a And whatever converting cycle. who in bringing a they're we'll starts annual but customer in cycle it's new some that are whether X-year then is, cycle, X-year in markets, the converting, be

when available, It pumps. relevant come competitive to the But off us the targets really So move for that of flow. they they're of dynamic changes just changes.

Operator

Our from from Baird. next Jeff comes question Johnson

Jeffrey Johnson

you that to away next all do rates know I of on about we're a pieces play think headwind guiding I deeper feel returns. million year. trying and into go of and in we year, for kind you're maybe heading the moving not to of talked in million, Wayde, is you out, a quarter, next much reduction growth But year? year U.S. inventory this left that next obviously, that into couple the maybe you get as to think this How as out, to channel $X $XX of

there's up of keep stayed you But the out that year, behavior OX. has period a start you on there. months getting in know pretty lot I behavior part then of doubling a like inventory And every patient it when now and first the better change so doesn't of this of maybe consistent going quarter whole for X-month X seem calling

of this the it bit of little away that headwind me, to a side of you neutralizing like So should factors maybe drop and kind net tailwind. those on X almost keep feels

You comps? also starting-off premium a of year was drop-off little about? the of in bit next little on my be all as get very you to be against Is number could get we guess less upgrade XX% about to you mid-XX% but that is point guiding for pharmacy, maybe that strong I U.S. headwinds to a a to point back on growth DME seem low crazy that talking you a think year. this that from to business half that the tough of those comps. that how So Omnipod of Obviously, I the think get

Wayde McMillan

moving, of a about dynamics several talk guidance more certainly out lot here bit to a called happy and Jeff, them. and little you've of

of touch again make them on sure So clear. -- and each them we it's why don't just

glad up, something we about it channel So And are I'm as hand, have pharmacy one that the think days we and is because be the control seeing obviously don't on distribution inventory you more brought that we channel. efficient. over the

QX And what and saw year, of a $X a days. it summarize We've hand. to days seen of then on Omnipod really a X. us inventory inventory In headwind to just stable pretty million until date was so we've we quarter last inventory up when build we saw maybe with bit so And days we reduction estimated saw this in for a last stable quarter. inventory

And this pretty few inventory settled quarter. we saw on reduction out that days hand, point. a then we But thought was that days that, again at again

out, they're to we factor So But it. forward that come going if we and the predict guidance we'll down where pharmacy don't back. see we're is settles if or because our this distribution of that curious channel can't days couple into a see

days we from know. So hand inventory here, in don't

However, we we than several a do it quarters. have days lower past over trending the few see seen

some is that we of could come so see And back. that potential there

we X curious the mentioned it how this play another would scripts. was You dynamic to that see Again, out. were

the it, But total result consistent Classic that As over seen the we're of remember, the has second growth and converting said, a through of Omnipod Omnipod here ramp of to X. to be expecting down Omnipod been it customers benefit of most benefit. have you and our in half, or benefit pretty on starting side on that in And from that side XXXX. half the we DASH is to of

been the the quarters, days reserve. as enough, increase by X than interesting benefit offset So that well our hand to last more has as reductions returns some are in inventory

those haven't And total seen dynamics a wash benefit as basically so really because all out. other net it each we

to if XXXX. expect and don't in hand, we we'll see X script reserves, changes don't we point, in return into don't increases moving see more would benefit but to extent much a move any inventory a days your to we to as any assume lesser So continue we forward, see that we we and will,

metric. things growth, to start our part be we those the still think of Jeff, going all that largest new together, is customer So by the far,

volume tough those here attrition the and And to with utilization even on and really at that's a consistent customer that's customer it be range. And business. and the half, guiding pretty volume others confidence in new end second And gives here. highlight really at base what for starts, to growing be these strong accelerate we is XX% rates, is what you how we high would from our comps the us at of focused

Operator

Our comes Jayson Raymond from from next question James. Bedford

Doyle Shell

Shell on higher had Classic with Omnipod in for Classic seeing conversion? I moving Jayson. just discontinued? question This to are quick that users the is a we Omnipod Glenn Omnipod regard the to are it's from X. And you attrition as And Where

Wayde McMillan

Yes, Glenn. this start one, to Sure, happy Glenn.

of Omnipod to So X the we Omnipod or either are through U.S. most the exchange in DASH Classic

end wait our the determination see to the our so a to by said that, the is year where And product the of in we U.S. at Having plan discontinue going we're and U.S. move make there. to and customers that final have we're the announced in

our been time. they've Obviously, that and But all we're customers to care to of Omnipod DASH got to going us options some of move had Omnipodders, our great for take with X.

lot move DASH. both for X, we channel now DASH it to Omnipod that on Omnipod pharmacy levels coverage to in the our former for the have Given Classic is easier and a customers

And are higher attrition seeing not so rate. we a

or our strong. attrition at the Omnipod us product that has and rates to In estimates both customers and really converting with X. Classic DASH to cases, either seen In we've early show really are our fact, staying the Classic accelerated that been

Operator

from comes of America. Steed from Bank Travis Our next question

Travis Steed

you up clarification, numbers U.S. got I put the like A adjustments, that I gave quick to When all XX% in Wayde. growth.

to the number that for all to clarify right, I what sure that wanted make was accounted Just adjustments.

the And that about it implied the next as like around the you the some if guide, the for think then point XXXX about somewhere and growth. U.S. guide, you're lapping QX you starting looks QX comps? on year to XX% right tougher way think of at Is look

Wayde McMillan

quarter you for $X with on quite basis percentage this which may million, tracking adds to wasn't the couple be But points quarter. net XX%. which basis you headwind a on I of of a normalized about thinking Travis, the just

it benefit So does us.

quarter. get is the you're this think headwind because that's benefit I a we of heading net do direction that

benefits what But guess was just your I question if us. of maybe out second for the you're would comp focus implied guide adding in tough the And I also for the QX. that half, on

QX. just QX to of guide at We we So and point. QX course, this don't do

QX that that's Thanks, is strong the in of given that, the And the QX Travis. near the end XX% business as you in the our momentum close at But implied should XX% range. XX% implied the end the well. of be for range guide, at expectation high we here, high to in for have and the range

Operator

Joanne Wuensch from Citigroup. Our comes next question from

Joanne Wuensch

And little timing integration with benefit you may the those integration be the what the and the about GX to a the next come steps bit application, iOS -- what I'm along, LX. of curious the do once with you think franchise? think

James Hollingshead

app about iOS X We're really And the at the said excited said as we remarks with all is as and programs. in of the FDA. Thanks, we prepared those know, Joanne. ADA, you filed

clearance as can. and we're be then so as soon waiting practically for as And soon as can, we we'll prepping there launch we

So that, really requested excited very about feature.

in there the It's customers of pull On there not specifically, made who that X a interesting. one, back. decision have lot to are out Omnipod

carry just they want so have to and carrying out are there's And talk controller when their the lot phone. They a their physicians who -- not I in patients both. to to I'm when field, of

big a requested that's feature. so And

some there Omnipod sure X. -- on iOS who that, people Having said to are come there are for to waiting I'm

big will us boost, and certainly it's for a customer So such us for with us satisfier to hard a certainly think customer great give and that but continue we rates us to that do retention what be estimate is, and it'll experience. help

So really bullish on we're that.

get just to to we really both really, we We the really with FreeStyle, With and want of X -- get with quickly FreeStyle -- to and want programs them. the sensor are can our on working GX a as the Abbott we're with of obviously, proceeding of family as with well of and well. with and great collaboration both choice them, Dexcom hard, X sensors, partners, working

U.K. study to hard We're doing that with goes those really to very or Libre the the know, them As forecast to timings far talk be talk as X FreeStyle we're market we about get But those -- about be of along things. as But fairly we quickly working in embarking can. partnership for both you we that we're don't on and on it's with to well, obvious timings bullish that. have

is other really that think for it's them GX, you positioned, of very good when and launch a -- quick family to geographies. you particularly we And boost about a And when good in sensors, a think very Libre FreeStyle customer the think us. a Obviously, both very, off provide of experience. well about

can kind of And so choice for to us they and sustained to we customers. us, for to experience they as be as growth our think provide that we provide provide great a customer able quickly

Operator

from Steve comes question Lichtman next Our Oppenheimer. from

Steven Lichtman

use type that On even in formal labeling calling prescriber X driving Omnipod the there? you're was X expansion? notable. the HCP that's Is you what increase, of more thought on are these seeing or is about before organic? HCPs Can sort talk it this And sequential prescriber I you increase of

James Hollingshead

that. heartened Thanks, see Steve. Yes, to we're really

are a it. of there that think driving I number things

for a one is seeing the confidence experience. is product of prescriptions writing and HCPs. with of increasing Omnipod as the just whole first we're so as And an accessible Omnipod X The across range X

see and physicians writing you'll So scripts. the endocrinologists

practitioners, nurse scripts. writing physician assistants see You'll extenders, those physician

Omnipod interest what that's the And X, prescribing to broad. the expansion all across ease of I'll our tell you, is in So it's because easy seeing very of population. of of And robust board. thing for. write the an use And it's it's really we're the

for is educators. example, platforms And team which phenomenal in so weekend in just was conference our just And we as just diabetes product conference, an over and Houston X. interest at ADCES the the the in had Omnipod the down

workshops than bigger attendance space beyond attendance. the of of like showcases All -- sort better kind of was and what our room-only room standing were

Omnipod experience our us. product, pump so the seeing of reach just use a that the compared for prescribers of advantage of Pod that's tubed broad And and the huge easy expansion is market. the and why platform, which competitors, demonstrates the Because product X ease we're to the the course, of in is,

Wayde McMillan

as type pick can of X the up I question on part Steve's well. Jim, And

seen you our last running from As making We've our of saw X up in tick-up XX% the reported results type starts, XX%. to what XX% X quarters. in we've new customer and here, that's at a in been

still are yet. writing a for HCPs new market you with said, But as type start for good are we DASH. That record seeing so partially driven customer X And quarter, customer new type is starts. X. by We cannot

we know, not the label. As do you have

And so means. we condone by any don't it

start as our and that X touched prepared And patients. label we Jim on and market so FDA Omnipod -- working the get for X or to X team pivotal is on type trial hard, X can that incredibly Omnipod in type submit completed type X to his for for to our remarks, get

do bring it certainly to core And X X we're that. diabetes with that as to hard lot certainly we strategy. so to, of our as working type we a is like Omnipod people with would to can And and

Operator

Jennings comes Cowen. question from TD from next Our Josh

Joshua Jennings

end-of-warranty helpful, for to those about past wanted a starts Any conversions. ask any would Omnipod patient a new conversions versus thinking conversions just on have you trending? just reference middle-of-warranty then successes Do DTCs being historic of X? just segment I be data you pump how in potentially, And the on are too. the that's how direct-to-consumer with and as about and competitive conversions campaign

Wayde McMillan

can question for or and with direct-to-consumer that pass the DTC an Josh, one Jim to start our on update new customer on Sure. it I strategy. start

So strong we continue conversions. competitive see to

that we Although changed in elevated has numbers above continues Omnipod somewhat, of reported mix saw the certainly number total strong competitive and be to conversions X. our the the levels before

about there like just data tell customers our us not. set. we just or track from don't don't they're that actually whether the in so they're if not a That's of break pump we warranty. competitive specific numbers not warranty or them part you know And out We in for -- converting from

to estimates, don't to or of make we We out-of-warranty. give Josh, have in-warranty too on stretch it any to be you, even quantify that try that. would but So much for a insight color

maybe Jim, then, a bit strategy? on And little our DTC

James Hollingshead

I'll us, just includes for mix and investment and out and us, of Thanks One mean Yes. we reach robust effective question, for tool that very flag return the on program. TV We that a consumers, social. customers a really thing strong DTC is we DTC that is our have have confident the in DTC that a right? just very way we're for doesn't Josh. to

streaming or It include includes includes what TV. called broadcast And it media. influencers. is It will over-the-top more

with we We so good have on. to and levers a which And so of campaign pull really active on. really have and sense influencers a

really confident down in dialing the good very able up team to based it we're I'm upon getting And results. and produce, at is what our and

you'll so continue campaigns. And see to DTC doing us

might to, us up ramp approach to need TV periodically see You mix but it. have a as like a on we we we effective feel very broad and very

Operator

Our from Sandler. comes Piper next from Matthew O'Brien question

Matthew O'Brien

I little know we're a getting here. late

side, and then Jim, and for talk about the -- XX-XX XX-XX, drivers if was the was think, conversions growth or MDI I now I as ago, between key Just X last it quarters Wayde volume you just think the being on the I quarter, split back X think or business XX-XX.

convert And in ability of lot don't the for, seeing pumpers something kind the you getting denominator in of but like your or are it's to So because and market asking bigger, know what I know competitive is I Medtronic that. if now? right being I'm a any slowdown

And if population that of strong, when as OX for patient X time of about fair? those the you is MDI this not Just last year the seems is then talk stronger, first groups like trajectory the from it enthusiasm than it, patients. maybe launched

James Hollingshead

Omnipod Thanks, competitors. of pump lot our to any a enthusiasm X, kind of the seeing pause competitive conversions in garner and Matt. we tubed continue We're both of not for from

across demand really is And interestingly. demand really all so groups strong. age is really strong. Physician the patient And it's

And the you question me? the second And of forgotten so no repeat question. your already pause, for your I've half great positioning. half Can of second

Wayde McMillan

Yes.

-- ahead, Matt. was think I just it go

Matthew O'Brien

even stronger? it is MDIs, within OX around enthusiasm the Sorry,

James Hollingshead

enthusiasm well If business more the and even X is the and Within record and changing MDI the percentage accepted. very the is starts. the we're new we're terrific, think adopted broadly not is mix We're stronger. right? seeing so We're on top, so MDI? very, for just is just seeing because positioned, customer anything, And Omnipod -- Yes. I momentum of

in I'll is why for unless one a a week, do last point, so really better for competitor they does and it. specifically details, not They converted pump, everybody I've writing for around And your they that, the have better probe I somebody but better. to experience. just And a on the Omnipod just asks and not better." just just have pump clinic from competitive just started outcomes, X I writing field sitting this pediatric out who's But been me, give And and good. you us an I was a at Omnipod in competitors said for example. she long X main with the "Listen, of was I'm to physician time. our for so

so a really how of And good the think terms for I the that's sign market. in of learning curve us

across it's in, the a is driving. a MDI. X, outcomes momentum I kind think ton how see Here, we And including sources of and of just real-world a learned market what customers, Omnipod about age has to year see great of groups easy across lot all

Operator

question next UBS. comes from from Danielle Our Antalffy

Danielle Antalffy

I the Wayde, benefit a and the looking patients different at think, it's, offset X giving some the qualitatively, appreciate the to on question, here. deliver Congrats But could XXXX. continuing for for headwinds tailwinds you. for And potential from I from is guidance strong new in every again, really you're that XXXX. not just of scripts this results added comp perspective

to want these correctly. And are just about thinking we sure make offsets

giving GO. be walk GX maybe Like integration, through but tailwinds about qualitatively [indiscernible], will us that the think tailwind perspective from to appreciating So thinking you -- coming and have in international XXXX. LX, the not how timing, a headwinds

Wayde McMillan

great headwinds look the Yes. Danielle. tailwinds at next it, right. vastly think It's way for year. you're And to The outweigh I a

had about quarters. really XXXX, think we customer the where for after several sit starts we've strong we new halfway through business today As

momentum the that second So into us great half. gives

half. record year. customer that innovations answer pipeline to have new your a give question year, lie I teed strong teed new If second second then as us to this next significant momentum starts will customer up there, see the think into the in of new continue half starts, great we in And will you the up. of we

'XX timing on We or be haven't given yet. beyond whether 'XX those, or the they'll even

do of customers But layer to over annuity an as increase with model, they those us to but have in, new innovations don't sizable time. start and our accrue start more they help immediate course,

so going And to we're momentum. continue to build

side the strong the outside AID competition of really the obviously, other On the U.S., for international coin, us is on side.

so And remarks usually an is for the contend that our growth in there today rates quarters. had starts update than lower got what a we customer provided we to lower X of as result new next internationally, prepared with we've

the can 'XX. of that for So that into first you for see will international, half continue the guide and our half second

and internationally. inflect the start second X to we're expect countries launching we to Omnipod given But going next year, to internationally, add more half

think second high type low range. we've mid- year the We now And of that single the digits, approaching moved be double half into to digits. digits of single low so next should

next U.S. for providing rate the able internationally. in the model, compete not as side is But And into that XXXX and gives of specific for we'll the what second year. the positioning of guidance. momentum end we're AID really strong year the the into then to at inflecting a think market and of see you we'll feel annuity improving in internationally that half again, so growth be builds better this And an as we

on seeing what we're again, in, be the going our so provide XXXX, We year point. the every call. the like typically can't and XXXX know of at know all we'll and strong, this do to going QX dynamic we for the that it's strong. at We it's give with call color don't we at end end just how such some So of a launch provide into QX We'll here. guidance then numbers

Operator

comes Taylor Our from from Jefferies. next question Matt

Michael Sarcone

commercially I the Matt. Can in question a maybe Sarcone on Mike how market year. just on comment what's And contribution do just next This had full is you XXXX? GO. thinking for ahead financial of about left the you're about release on talk Omnipod to

James Hollingshead

talk Wayde Sure. plan pilot on contribution. I'll I'll about the then start let and financial

dosing bullish we before. thing are about And the getting insulin initiating that and GO call we we're a for those so market world on. necessarily out So are resolves our solves the to of physicians where new phobia. problems and that some It places it's hands really pilot is needle said for new It us the But clinics. people clinics don't point very it those as who resolved therapy, have and in great on a it's and strong for of it's clinics lot because footprint. new of

the waters on And things. and SKUs the out to get We things in to the need clinics. some it so is experience. with other go And use out simple need we GO, we a about of the the do and what to couple which of educate is clinics dosing need incredibly of kind test

hands real of to of the to our we pitch we clinics the have that to correct, in we're on. the selling the sure we see into have world, and the support -- need approach the and hands understand make in we just sure the it So in reps clinics, how going make so

a for because us. commercial it it's giving and we're of time are that And it's things new-to-world -- new some ourselves and kind a new model offer there's about

to saying we're XXXX. in We're what learn, near pilot some commercialize it going we that's and here going the so time ourselves to we're term. then why learn give in adjust And to

want you to about impact. if talk for what Wayde, financial we're modeling And

Wayde McMillan

Yes.

go where to to in going know So GO Matt, Omnipod would is we XXXX. love

so a going want how we're as to It's really difficult fast Jim and release. We internally. scenarios said, GO our this just right. many do to to ramp. Omnipod the financial know got have take will new-to-world market time. But it's product, limited We've We obviously

year, As to models lot going there going XXXX. we're for in that's our this start and to said Jim to help learn us a dial

light give to does it XXXX let's more numbers we'll see And this financial the I Omnipod how when would some point, contributor, think as really time a to material GO to become it I fast contributor ramp. just rates. communicating this going say to it thinking about of starts financial our growth certainly at But we it a guidance, from when that's standpoint. layer just it at it into contribution about concept, not will given our a then, new-to-world be start and talk to we're for But until time. And

Operator

one question, Barclays. And come we have Matt from time it Miksic from last for will

Matthew Miksic

pilot -- Omnipod last launch, on of that pick That's days you Understanding Just for but the demand something expect And that leave maybe just question. one it's up. prepared in any to to just build want I'll is inventories, that we'd go that follow-up. at a numbers. it your sure that of you maybe to sort I'm on be as inventory up

Wayde McMillan

Wayde. is It's can it that limited we're release. fact, Matt. today. in bet, take this through to And certainly and You our lot teams working something one, that market going through are I a learn

key we're to building inventory learnings the optimal or staging GO channel what that things key is launches. support of working or on is the the in of the One

think just right. you're I But qualitatively,

going we're the in the inventory with channel serve to enough like Omnipod have customers. Just to X,

Omnipod limited the so we saw build release X. days like a Omnipod X, And for year, called inventory-on-hand QX we for when out we market did last in

channel to Omnipod with plays there's you Omnipod a let GO, material that has of Assuming amount we'll into out for inventory go same guys GO. the if to know the launch

a The how to teams releases underserved better going an an the go. But internally that market limited needs market see large to program. excited really technology. it's lot. exciting market, We're nonetheless, There's certainly very are a learn

the our owner. mechanics. are natural Omnipod fluid with We our benefits many as We've and auto-injection well as got

of the the nice customers. of for I a done teams really this And job think group have simplifying Omnipod

get We'll as how market releases lot we we'll a the XXXX. say probably release in go. see a so that start more limited into have And to after to full more of market

Operator

back at time. questions further the would Jim conference to no I turn showing Hollingshead. I'm this to like

James Hollingshead

for today. everyone, us joining Thanks,

original And setting milestones further higher the thanks the of made. and sights than we've our proud achieved incredibly team before. are worked and disruptive than progress who ever We our and we've our dedicated expectations to offerings along

Insulet have update has to the are improve enormous our year to value continuing people opportunity a fulfilling and you opportunity while the are look We and substantial drive energized with rapid progress lives pursuing Thank long growth the all around you we we and joining, quarter. world. on the and a Insulet way, of and to shareholders market by the mission for great come diabetes evening. next our over to forward for

Operator

conference. this have Ladies you concludes Thank and and participation, today's a gentlemen, your wonderful for day.

may disconnect. You all

Insulet (PODD) 8 Aug 232023 Q2 Earnings call transcript