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INSULET CORP (PODD)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 2025 revenue rose 32.9% to $649.1M, beating consensus (~$612.3M*) and exceeding guidance; adjusted EPS was $1.17 vs. ~$0.92* consensus; GAAP EPS was $0.32, impacted by debt extinguishment and tax items .
  • Omnipod strength across geographies: U.S. Omnipod revenue up 28.7% to $453.2M; International up 45.0% to $185.8M (38.8% cc), with price-mix tailwinds as users shift from DASH to Omnipod 5 .
  • Gross margin was 69.7% (down sequentially vs. Q1’s 71.9% but +190 bps YoY); adjusted operating margin expanded to 17.8%, and adjusted EBITDA margin to 24.3% .
  • Guidance raised: FY25 total revenue growth to 24–27% (cc), U.S. Omnipod to 22–25%, International to 34–37%, adjusted operating margin to 17.0–17.5% (from ~16.5% prior) — a clear positive catalyst .

What Went Well and What Went Wrong

What Went Well

  • Record quarter driven by broad-based demand; new customer starts grew YoY and sequentially in U.S. Type 1 and Type 2 and International; “We grew 31%…with $649,000,000 of revenue…record number of people on pod” — CEO Ashley McEvoy .
  • Type 2 momentum: over 30% of U.S. new starts were Type 2; strong clinical outcomes (SECURE‑T2D, RADIANT) underpin adoption; CFO: “over 85%…came from MDI and over 30% were Type two” .
  • International acceleration: Omnipod 5 conversions ~50% of base (vs. ~40% last quarter), with low double-digit price‑mix realization contribution to growth .

What Went Wrong

  • GAAP EPS fell to $0.32 (vs. $2.59 prior year) due to $84.4M loss on extinguishment of debt and tax items; adjusted EPS improved to $1.17 (vs. $0.55 YoY) .
  • Gross margin moderated sequentially to 69.7% (Q1: 71.9%) amid ~$10M inventory-related charges tied to legacy component write-offs during migration to Omnipod 5; FX also a ~30 bps pressure Q/Q .
  • Drug Delivery revenue remains small ($10.2M) and FY25 outlook implies declines; Q3 guide: (80)%–(75)% YoY; FY25: (30)%–(25)% .

Financial Results

MetricQ4 2024Q1 2025Q2 2025Consensus (Q2 2025)
Revenue ($USD Millions)$597.5 $569.0 $649.1 $612.3*
GAAP Diluted EPS ($)$1.39 $0.50 $0.32 $0.923*
Adjusted Diluted EPS ($)$1.15 $1.02 $1.17 —
Gross Margin (%)72.1% 71.9% 69.7% —
Operating Margin (%)18.3% 15.6% 18.7% —
Adjusted Operating Margin (%)—16.4% 17.8% —
Adjusted EBITDA ($USD Millions)$151.2 $133.9 $157.5 $135.6*

Values marked with * retrieved from S&P Global.

Segment revenue breakdown:

MetricQ4 2024Q1 2025Q2 2025
U.S. Omnipod ($USD Millions)$443.7 $401.7 $453.2
International Omnipod ($USD Millions)$142.0 $152.4 $185.8
Drug Delivery ($USD Millions)$11.8 $14.9 $10.2
Total Omnipod ($USD Millions)$585.7 $554.1 $639.0
Total Revenue ($USD Millions)$597.5 $569.0 $649.1

KPIs:

KPIQ1 2025Q2 2025
U.S. NCS from MDI (%)≈85% ≈85%
Type 2 share of U.S. NCS (%)>30% >30%
U.S. HCPs writing Omnipod 5~25,000 ~25,000 (+~20% YoY)
International Omnipod 5 conversion (% of base)~40% ~50%
Adjusted EBITDA Margin (%)23.5% 24.3%
Free Cash Flow ($USD Millions)$51.5 $229.4 (H1)
Cash & Equivalents ($USD Millions)$1,283.1 (3/31) $1,121.6 (6/30)

Guidance Changes

MetricPeriodPrevious Guidance (as of 5/8/2025)Current Guidance (as of 8/7/2025)Change
Total Revenue Growth (cc)FY 202519%–22% 24%–27% Raised
Total Omnipod Growth (cc)FY 202520%–23% 25%–28% Raised
U.S. Omnipod Growth (cc)FY 202518%–21% 22%–25% Raised
International Omnipod Growth (cc)FY 202527%–30% 34%–37% Raised
Drug Delivery Growth (cc)FY 2025(35)%–(25)% (30)%–(25)% Raised (less negative)
Gross Margin (%)FY 2025~71% ~71% Maintained (reaffirmed)
Adjusted Operating Margin (%)FY 2025~16.5% 17.0%–17.5% Raised
Total Revenue Growth (cc)Q3 2025—22%–25% New
U.S. Omnipod Growth (cc)Q3 2025—21%–24% New
International Omnipod Growth (cc)Q3 2025—33%–36% New
Drug Delivery Growth (cc)Q3 2025—(80)%–(75)% New

Earnings Call Themes & Trends

TopicQ4 2024 (Prev Q-2)Q1 2025 (Prev Q-1)Q2 2025 (Current)Trend
Platform/data initiativesLimited MR of Omnipod Discover; cloud analytics; iOS app ramp; multi-sensor integrations iOS G6 adoption >40%; limited MR of iOS G7; Discover rolling out iPhone app full availability with Dexcom G7; continued app migration opportunity (~55% still on controller) Expanding digital ecosystem and smartphone control
Supply chain & tariffsDiversified manufacturing (US/China/Malaysia); aiming ~70.5% GM; minimal tariff impact assumed Tariff impact guided ~50 bps; raised GM to ~71% by offsetting via scale Tariff impact now ~20 bps for FY (lower than prior); efficiencies mitigate Resilient supply chain; tariff headwind diminishing
Product performance500k active customers; most prescribed AID; strong NCS in T1 & rising T2 mix NCS up QoQ & YoY in U.S. and Intl; >30% of U.S. NCS T2; >85% from MDI Highest quarter of competitive switches since late 2023; NCS grew YoY & sequentially Broad-based demand; competitive share gains
Regional trendsUK/Germany strong; France/Netherlands early adoption; multi-country launches Canada, Switzerland added; G7 live in UK/Netherlands; price-mix tailwinds International growth 38.8% cc; OP5 conversion ~50%; low double-digit price-mix contribution Sustained international acceleration with OP5 upgrades
Regulatory/legalADA guideline support for AID in T2; Medicare Part D moat —CMS competitive bidding discussion; PODD view: Part D shouldn’t be subject to Part B bidding Favorable positioning; continued engagement
R&D executionSECURE‑T2D published; STRIVE/EVOLUTION program setup RADIANT presented; STRIVE enrollment; integration roadmap advancing STRIDE pivotal, fully closed loop work in EVOLUTION; broader sensor integrations Active pipeline, algorithm advancements

Management Commentary

  • “We grew 31%…with $649,000,000 of revenue and continue to be highly profitable…record number of people on pod” — Ashley McEvoy (CEO) .
  • “Adjusted operating margin was 17.8% and adjusted EBITDA margin was 24.3%…we are raising our adjusted operating margin guidance to 17% to 17.5%” — Ana Maria Chadwick (CFO) .
  • “In The U.S., Omnipod is the most prescribed and most requested AID system…more than 25,000 healthcare providers are prescribing Omnipod 5” — CEO .
  • “International growth was primarily driven by continued demand for Omnipod 5…positive price mix realization also contributed” — CFO .

Q&A Highlights

  • Type 2 launch momentum: >30% of U.S. new starts T2; clinical evidence (SECURE‑T2D, RADIANT) resonating; improved DTC conversion and HCP activation; first mover advantage .
  • Guidance philosophy: Raised FY guide by “three times the beat” in Q2; management intends guidance to be achievable — confidence in momentum .
  • International price‑mix and OP5 conversions: OP5 conversion now ~50% of base; low double‑digit price‑mix contribution this quarter .
  • Tariffs and margins: FY GM reaffirmed ~71%; tariff impact lowered to ~20 bps; FX ~30 bps pressure YoY/QoQ noted .
  • Capex/Capacity: Accelerating manufacturing to meet higher demand; Malaysia ramp becoming accretive in H2 2025 .

Estimates Context

MetricConsensus (Q2 2025)Actual (Q2 2025)Surprise (%)
Revenue ($USD Millions)612.3*649.1 +6.0%*
Primary EPS ($)0.9226*1.17 (Adjusted) +26.8%*
EBITDA ($USD Millions)135.6*143.4* (S&P actual) / 157.5 (Adj EBITDA) +5.7%* (vs. S&P actual)

Values marked with * retrieved from S&P Global. Surprise values calculated from S&P consensus versus company-reported actuals; adjusted EBITDA provided by company .

Implication: Clear beat on revenue and adjusted EPS; EBITDA above consensus, with company’s adjusted EBITDA stronger than S&P’s EBITDA actual basis.

Key Takeaways for Investors

  • Strong beat and guidance raise: Revenue and adjusted EPS beat consensus; FY25 guide raised across U.S., International, and margins — supportive of estimate revisions and positive sentiment .
  • Type 2 is a multi‑year growth engine: >30% of U.S. new starts T2; first‑mover label, strong outcomes, DTC conversion and PCP engagement point to durable incremental demand .
  • International acceleration and price‑mix tailwinds: OP5 conversion (~50%) and sensor integrations (G7/Libre 2 Plus) drive both volume and margin mix; sustained expansion in UK, Germany, France .
  • Margins resilient despite transitory costs: Inventory charges and FX moderated Q2 GM, but FY ~71% reaffirmed; adjusted operating margin now 17.0–17.5% — operating leverage intact .
  • Balance sheet de‑risked: Convertible notes largely extinguished; term loan refinanced (–50 bps); cash $1.12B at quarter‑end; H1 free cash flow $229.4M — supports continued capacity and R&D investments .
  • Near‑term: Expect continued momentum in Q3 (22%–25% cc total) and strong International contribution; watch controller‑to‑app migration and OP5 upgrades for retention/engagement gains .
  • Medium‑term thesis: AID leadership with consumer‑centric form factor, pharmacy Part D moat, expanding digital/data platform (Discover), and algorithm pipeline (STRIDE/EVOLUTION) underpin sustained 20%+ top‑line CAGR and margin expansion .