John Block

John Block asked for Insulet's refined thoughts on the potential pump penetration within the Type 2 insulin-intensive (T2II) segment, considering the strong direct-to-consumer (DTC) lead generation and Type 2 patients now representing over 35% of U.S. new starts.

Answer

Ashley McEvoy, President and CEO, highlighted the large, under-penetrated Type 2 market globally and in the U.S. She emphasized Insulet's differentiated approach, leveraging its 25 years of equity with Type 1 prescribers, noting that endocrinologists are increasingly writing more Type 2 scripts for AID. She also mentioned continued investment in science, innovation, frictionless experience, supply chain, and DTC efforts to activate consumers.

John Block asked for refined thoughts on the potential pump penetration within the Type 2 insulin-intensive (T2II) segment, given the strong direct-to-consumer (DTC) lead generation and Type 2 patients already comprising over 35% of U.S. new customer starts.

Answer

Ashley McEvoy (President and CEO) highlighted the large, under-penetrated Type 2 market globally and in the U.S. She emphasized Insulet's differentiated approach: leveraging 25 years of equity with the Type 1 call base, synergistic value, endocrinologists increasingly prescribing for Type 2, continuous investment in science and innovation, ensuring a frictionless experience, strengthening the supply chain, and activating DTC to demystify AID therapy and drive specific Omnipod requests.

John Block inquired about the discrepancy between the $0.05 increase in the 2025 EPS guidance midpoint and the $0.08 higher remeasurement gain compared to the prior year, asking for clarification on what was embedded in the original guidance. He also asked about the drivers of the Q3 performance, distinguishing between market improvement and Henry Schein's execution, and sought early comments on October trends.

Answer

Ron South, Senior Vice President and Chief Financial Officer, clarified that the remeasurement gain was within the expected range, and the guidance increase also reflects sales growth momentum, with non-GAAP operating income growing 4.5% year-over-year (excluding remeasurement gains). Stanley Bergman, Chairman and CEO, stated that markets are generally stable, with Henry Schein gaining market share in distribution, implants, and software, noting stable pricing and increased corporate brand sales. Ron South added that October trends were similar to Q3, with anticipated improvements in diagnostic kit sales and equipment revenues.

John Block questioned the implied sequential decline in MUDX placements for Q4 2025 based on the updated full-year guidance, asking if IDEXX is caught up with orders and for an update on the longer-term goal of 20,000 MUDX placements over five years. He also sought more color on the strong international CAG diagnostic recurring revenue growth of nearly 14%, its drivers, and whether this run rate is sustainable given future tailwinds.

Answer

Andrew Emerson, CFO, confirmed the 6,000 MUDX placement target for 2025 and reiterated the 20,000 over five years goal, noting the strong start. Jay Mazelsky, President and CEO, attributed international growth to the embryonic use of diagnostics, sales force expansion, building out the reference lab network, software localization (e.g., VetConnect Plus), and robust customer support. He expressed confidence in the 13%-16% long-term international growth rate. Emerson added that Q3 international growth included a 100 basis point benefit from equivalent days.

John Block asked about the implied MUDX placement guidance for Q4 2025 (approximately 1,500 systems), whether IDEXX has caught up with orders, and the company's thoughts on the longer-term goal of 20,000 placements over five years given the strong start. He also inquired about the drivers behind the nearly 14% days-adjusted international CAG diagnostic recurring revenue growth, noting it's the highest since COVID and precedes significant MUDX, CancerDx, or new sales rep impact, asking if this is a sustainable run rate.

Answer

Andrew Emerson, CFO, confirmed the 20,000 over five years MUDX placement goal remains, noting the strong start with 6,000 placements targeted for 2025 (the first year of launch), exceeding the initial 4,500 guide. He stated the implied Q4 placements of 1,500-1,600 are a solid trajectory. Jay Mazelsky, President and CEO, attributed international growth to the embryonic use of diagnostics, a translatable sector development approach, increased sales organization (four to five years of investment), a synchronized commercial ecosystem, building out the reference lab network for next-day performance, and software localization. He reiterated the investor day guidance of international opportunity being a couple hundred basis points faster than the U.S. Emerson added that Q3 international business saw a 100 basis point benefit from equivalent days.