Insulet Reports Q2 2026 Results: Full Earnings Call Transcript

Insulet (NASDAQ: PODD ) released second-quarter financial results and hosted an earnings call on Wednesday. Read the complete transcript below. This content is powered APIs. For comprehensive financial data and transcripts, visit Access the full call at Summary Insulet Corporation reported a 23% year-over-year revenue growth on a constant currency basis, driven by strong demand for Omnipod across both US and international markets.

The company highlighted its strategic focus on the type 2 diabetes market, acknowledging challenges in retention and utilization, particularly in the first 90 days of onboarding, and outlined several initiatives to improve customer support and retention. Insulet updated its 2026 revenue growth outlook to 20-22%, reflecting current trends in the type 2 market, while raising its international revenue growth outlook to 30-32% due to strong performance. 5% increase in adjusted EPS, showcasing strong profitability alongside revenue growth.

Management expressed confidence in the long-term growth potential, driven by a robust innovation pipeline, including upcoming launches of Omnipod 6 and a fully closed-loop system for type 2, and a strengthened commercial strategy. Full Transcript OPERATOR Good morning and welcome to the Insulet Corporation second quarter 2026 earnings call. As a reminder, this conference call is being recorded. I would now like to turn the conference over to your host, Claire Trachman, Vice President, Investor Relations.

Claire Trachman, Vice President, Investor Relations Good morning and welcome to our second quarter 2026 earnings call. Joining me today are Ashley McEvoy, President and Chief Executive Officer; Flavia Pease, Chief Financial Officer; and Eric Benjamin, Chief Operating Officer. On the call this morning we will be discussing Insulet's second quarter results along with our financial outlook for the third quarter and full year 2026.

With that, let me start our prepared remarks by reminding everyone that certain statements, including comments regarding our financial outlook, the anticipated impact of our strategic actions, the potential impact of various regulatory and operational matters and the macroeconomic environment on our results of operation, contain forward-looking statements that involve risks and uncertainties and, of course, our actual results could differ materially from our current expectations. Please refer to today's press release and our SEC filings for more detail concerning factors that could cause actual results to differ materially.

In addition, on today's call, non-GAAP financial measures will be used to help investors understand Insulet's ongoing business performance, including adjusted operating income, adjusted EPS, adjusted EBITDA, adjusted tax rate and constant currency revenue, which is revenue growth excluding the effect of foreign exchange. A reconciliation of certain non-GAAP financial measures being discussed today to the comparable GAAP financial measures is included in the accompanying investor presentation and available in our earnings release issued this morning, both of which are available on our website.

Additionally, unless otherwise stated, all financial commentary regarding dollar and percentage changes will be on a year-over-year reported basis, with the exception of revenue growth rates which will be on a year-over-year constant currency basis. During the Q&A session this morning, Ashley, Flavia, Eric and myself will be available to address questions. Now I'd like to turn the call over to Ashley. Ashley McEvoy, President & Chief Executive Officer Good morning everyone and thank you for joining us.

We delivered another quarter of strong revenue growth, expanding profitability and solid cash flow generation. Our performance reflected the strength of our differentiated business model and our team's dedication to improving the lives of people with diabetes around the world. Total company revenue grew 23% year over year on a constant currency basis, exceeding our expectations. We saw strong demand for Omnipod across both the US and international markets along with a benefit from favorable price mix.

Importantly, we delivered growth this quarter while continuing to meaningfully improve profitability. Second quarter adjusted operating margin increased 140 basis points year over year, supported by increased manufacturing productivity and the benefits of scale. Adjusted earnings per share increased approximately 42%, driven by our strong revenue growth and disciplined operating performance. Demand remained healthy with new customer starts rebounding from the seasonal slowdown in quarter one.

Global new customer starts increased both sequentially and year over year, resulting in our second highest quarter ever and contributing to 23% growth in our global customer base. In the US we continue to source more than 85% of new customer starts from MDI users and over 40% of new customer starts were people with type 2 diabetes. Internationally, Omnipod 5 became the number one insulin pump for new users in Australia. We also recently launched in Spain, marking our entry into an important new market and further expanding our global reach.

We continue to expand our prescriber base with more than 32,000 healthcare providers in the US now prescribing Omnipod, up 27% year over year. This growing provider adoption reflects our success in expanding awareness of AID and broadening access to Omnipod across both type 1 and type 2 diabetes. At the same time, this quarter has reinforced that we are still learning how to best serve the type 2 market. While we have more than 25 years of experience serving people with type 1 diabetes, we are still in the early stages of bringing Omnipod 5 to the type 2 community.

As we gain more experience in the type 2 market, we've developed a deeper understanding of the unique needs and behaviors of these Podders. We recognize that we need to adapt our commercial model to better serve this community. Specifically, we are seeing lower rates of utilization and retention among type 2 customers, and these trends were more pronounced this quarter than we anticipated. As we've gathered additional data and experience, we have a better understanding of these dynamics and are now incorporating learnings into our assumptions and outlook.

Over the past nine months, we have driven significant growth in our type 2 starts, particularly through our DTC activations and sampling program. Both initiatives have proven effective in getting people started. However, getting started is not enough. Customers, particularly type 2 customers, need more support to get fully onboarded and for continuity of therapy.

The first 90 days on therapy are critical for helping patients become comfortable and confident with the technology and to establish the habits and practices that then lead them to realize the full benefit of Omnipod. There are a number of key moments when our teams need to provide type 2 Podders with a more personal, higher-touch support, like when they're onboarding, their first Pod activation, their first Pod change, and the first time that they're refilling their prescription. As a result, we're taking a number of actions to enhance our commercial model and customer support.

First, we are expanding our customer care team that supports the onboarding experience, including helping customers navigate the insurance process. Second, we're changing our salesforce compensation structure to prioritize and reward longer-term retention, not just new customer starts. Third, we're refining our approach to how we deploy samples to better identify patients who are most likely to benefit from Omnipod and support these customers during the sample process to improve conversion, retention and long-term success.

And finally, we are rolling out new technology platforms like Omnipod Discover, which has shown promising early results during its limited market release. This cloud-based platform helps providers and patients identify trends, personalize therapy and make more informed treatment decisions. Early data is providing a glimpse into how Discover may positively influence both clinical outcomes and retention, giving us confidence in its ability to support long-term therapy success. Adoption of Omnipod Discover continues to grow with more than 12,000 people with diabetes and over 1,600 healthcare professionals using the platform today.

Alongside this progress, we are accelerating the development of a modern customer data and engagement platform. By bringing together the data across our interactions with healthcare professionals and patients, we're building a more complete 360-degree view of each customer. This will enable highly personalized two-way engagement, allowing us to better anticipate needs, tailor support and improve the overall customer experience. Over time, we expect these capabilities will help to optimize adoption, utilization, retention and lifetime value while supporting better outcomes for the people we serve.

We're confident that over time these actions will help improve long-term success for our Type 2 Podders. Importantly, our data show that once Type 2 customers remain on Omnipod for the first 90 days, retention rates stabilize, a trend that we also see in our Type 1 population. As patients gain confidence with the technology and experience the benefits of Omnipod. That's why my conviction in the long-term Type 2 opportunity remains high.

While the ADA recommends AID as the standard of care, we've just begun the conversion process. S. adult basal-bolus insulin users have converted to AID. Additionally, there are approximately 3 million basal-only insulin users who may also benefit from AID therapy.

While we're still in the very early stages of Type 2 adoption, the opportunity is substantial with significant runway ahead. Interest in Omnipod is strong among both patients and clinicians, which translated into healthy new customer starts, with Type 2 representing more than 40% of new customer starts in the second quarter. As we refine our commercial and support model and leverage new technology platforms like Omnipod Discover, we believe we can drive better outcomes, improve retention, and expand AID adoption across this large and underpenetrated market. With that context, let me now turn to our updated outlook.

We're updating our full-year revenue outlook to incorporate the utilization and retention trends we are seeing within our Type 2 customer base and to reflect the time required for the actions we are taking to translate into improved customer success. S. Omnipod growth of 17 to 19%. We are raising our international revenue growth outlook to 30 to 32%, reflecting the strength of our first half performance and our sustained momentum.

S. outlook. As we've gained experience in the Type 2 market, we've developed a better understanding of certain dynamics that were not fully reflected in our initial planning assumptions. We should have identified the issue sooner and I'm confident in our ability to better serve the Type 2 community and in the long-term opportunity ahead.

We're acting decisively to enhance our commercial and customer service model, and we will continue to be transparent about what we're learning and how those learnings shape our actions and outlook. As we review our plans for '27 and beyond, we believe it's appropriate to revisit certain assumptions underlying our longer-term revenue outlook. Given the additional data and experience we've gained, particularly in the Type 2 market, we expect to provide an updated view on our long-range outlook on our fourth quarter call. This will give us time to incorporate additional learnings from the actions that we're taking to improve outcomes for our Type 2 customers.

That said, while we're reassessing our specific long-range revenue growth expectations, we remain highly confident in the significant long-term opportunity ahead and our ability to create value over time. We continue to see a path to delivering top-tier revenue growth, meaningful margin expansion, strong earnings growth, and positive free cash flow generation. Importantly, we continue to have strong conviction in the long-term opportunity and in our ability to win in this market. That confidence is grounded in five key pillars.

First, we're the market leader in one of the fastest growing segments in MedTech. AID remains significantly underpenetrated across both Type 1 and Type 2 diabetes, and we believe category growth will continue to be driven by conversion from MDI to AID therapy. As new players enter the tubeless AID market, we expect increased awareness to expand the overall category and support broader adoption, further extending our leadership position. Second, we're advancing one of the most robust innovation roadmaps in our 25-year history to strengthen our competitive position and expand the community we can serve.

We expect to deliver annual algorithm enhancements over the next four years, beginning with our latest launch in the second quarter. We're encouraged by the early adoption and positive feedback we received from both Podders as well as healthcare providers. One example is Darla from New Mexico, who lived with Type 1 diabetes for more than 40 years. After spending two decades on injections and then another two decades using a traditional tubed pump, she switched to Omnipod 5 two years ago.

Darla told us she values the freedom and discretion of Omnipod's tubeless design and smartphone control, and after using our new 100 milligrams per deciliter glucose target for the past few weeks, she reports tighter glucose control and more time in range. In her words, I can feel the difference. I would never go back to a tubed pump. Looking ahead, we're advancing the next generation of innovation across our pipeline.

At ADA, we presented pivotal STRIVE data supporting Omnipod 6, which delivered improved time in range and time in tight range across people with Type 1 and Type 2 diabetes while maintaining Omnipod 5's proven safety profile. In the bolus-optional phase, users held strong results while requiring significantly less bolusing, shifting the work from the user to the algorithm. Additionally, what we've learned about the Type 2 market further reinforces our conviction in our design of our breakthrough fully closed-loop system, which requires no bolusing, no settings, and no manual titration.

This directly addresses the unmet need for an AID for Type 2s that is simpler to start, easier to sustain, and less burdensome for both patients as well as providers. Enrollment in EVOLVE, our pivotal study, is progressing well and we continue to expect a 510(k) submission in 2027. While the program remains in development, the clinical results to date are encouraging and support its potential to improve utilization and retention over time and broaden access to AID, particularly among the 70% of Type 2 patients managed in primary care. The third pillar is expanding our commercial capabilities to accelerate AID adoption and reach new patient populations.

We're investing behind our market-leading brand, DTC activations, professional education, salesforce expansion, and initiatives to improve access and affordability. We continue to work closely with payers to expand access to Omnipod and make it easier for patients to start and stay on therapy. 5 million lives and reduced barriers to therapy by simplifying prior authorization requirements for approximately 10 million lives. Fourth, we have an unmatched manufacturing network.

Our scale and operational expertise represent a significant competitive advantage that will take time and substantial investment for others to replicate. Fifth, and finally, the strength of our recurring revenue business model generates strong cash flow, giving us significant financial flexibility to continue investing in innovation, our commercial capabilities, and our manufacturing network while maintaining disciplined capital allocation. So let me close with this. This quarter reflects both the progress we've made across our business and the important insights we've gained as we deepen our understanding of our Type 2 customers.

We're listening carefully, learning, and acting decisively. Above all, we're committed to improving how we execute to benefit global Podders and our business. Looking ahead, we're confident in the future. With a differentiated platform, a strong innovation pipeline, and an exceptional team, we're well positioned to improve the lives of more people living with diabetes while creating long-term value for all of our stakeholders.

With that, I'll turn it over to Flavia to review the financials. Flavia Pease, Chief Financial Officer Thank you, Ashley, and good morning, everyone. 7% on a constant currency basis. S.

Omnipod revenue grew 20% during the quarter, driven by continued demand across both Type 1 and Type 2 customers. International Omnipod revenue grew over 35% on a reported basis and 33% on a constant currency basis, driven primarily by volume and continued favorable price mix realization. 9%, up 320 basis points year over year. Adjusted gross margin performance was driven by continued manufacturing productivity gains across our Acton and Malaysia facilities, positive pricing, and increased volumes.