Insulet Corporation

Good morning and welcome to the Insula Corporation fourth quarter and full year 2025 earnings call. As a reminder, this conference call is being recorded. I would now like to turn the conference over to your host, Claire Trackman, Vice President, Investor Relations.

Good morning and welcome to our fourth quarter and full year 2025 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 Inflict's fourth quarter and full year results, along with our financial outlook for the first 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 for the first quarter and full year 2026, the anticipated impact of our strategic actions, The potential impact of various regulatory and operational matters in the macroeconomic environment on the results of operations 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 in our SEC filing 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 INFLIT's ongoing business performance, including adjusted operating income, adjusted EPS, adjusted EBITDA, adjusted tax rates, 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 which are both 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, Blavia, Eric, and myself will be available to address any questions. Now I'd like to turn the call over to Ashley. Ashley?

Thank you and good morning, everyone. I'm pleased to share that we closed 2025 with another strong quarter, recording our 10th consecutive year of 20% or greater constant currency revenue growth. This consistent track record reflects the strength of our durable recurring revenue, profitable business model, and the breadth and depth of our competitive moats. Our strong clinical evidence and real-world outcomes continue to earn prescriber and patient confidence and the consistency of our execution, along with the deep commitment of the Insulet team to finding a better way for people living with diabetes, has enabled us to deliver enhanced value to all of our stakeholders. I want to start by thanking our Insulet employees around the world. 2025 was a year of significant progress at Insulet, and the entire organization delivered on our goals without missing a beat. Your dedication to our mission fills me with confidence today and well into our future. Our results in the fourth quarter are a testament to the reliability, consistency, and broad appeal of Omnipod, coupled with the strength of our strategy and execution. Total company revenues were $784 million, advancing 29% constant currency. US revenues of $568 million increased 28% and international revenues of $214 million grew 42% constant currency. This strong finish to the year enabled us to surpass $2.7 billion in revenue for the full year, more than doubling our revenue base over the last three years and delivering approximately 30% year-over-year constant currency growth. Our annual performance of 1.9 billion or 27% growth in the US and 754 million or 39% constant currency growth in international markets highlights the progress and the impact we're making as we continue to unlock more of our $30 billion plus total addressable market. We achieved record new customer starts across both the US and international in the fourth quarter and for the full year. with the vast majority coming from people transitioning from multiple daily injections. This reflects growing provider confidence, which, as I just mentioned, is driven by strong clinical evidence and consistent real-world outcomes. Importantly, it also reinforces that Insulet is not only the market leader in AID, but also the clear driver of overall market expansion, and we intend to maintain this leadership position. Turning to our key markets and starting with our largest, U.S. Type 1, where we continue to focus on extending our leadership. The U.S. Type 1 market is a more than $9 billion opportunity with AID penetration at just 40%, which is well behind CGM penetration of 70%. In 2025, we delivered year-over-year growth in Type 1 new customer starts in both the fourth quarter and the full year. driven by strong patient and prescriber preference for Omnipod. In fact, both Type 1 and Type 2 users in the US named Omnipod 5 their favorite pump in 2025. Omnipod's strong clinical evidence, broad access, affordability, and ease of use are enabling us to expand well beyond traditional endocrinology channels. Our US prescriber base now includes more than 30,000 healthcare professionals up approximately 28% year-over-year. The strength and reach of our commercial teams position this segment to remain a meaningful and consistent contributor to our global customer growth. Momentum in the U.S. Type 2 continues to build as well. In the fourth quarter, Type 2 new customer starts grew significantly, both sequentially and year-over-year, rapidly expanding our Type 2 user base. This acceleration reflects strong clinical and real-world outcomes, continued investment and demand generation, and the recent ADA guideline update recommending AID for people with type 2 who require insulin. Our type 2 prescriber base grew 62% in 2025 to now more than 6,500 clinicians. Most people with type 2 diabetes are being managed in primary care settings. Therefore, expanding beyond endocrinology represents a meaningful and sustainable growth opportunity. In a Type 2 market of more than 12 billion, where AID penetration remains below 5%, which is far behind roughly 55% of CGM adoption, stronger education, improved outcomes, and increasing access are already accelerating adoption. Importantly, we are unlocking this opportunity in a strategic and capital efficient way. Our US sales force, which is the largest in the industry, reaches high prescribing offices that treat both type 1 and type 2 diabetes, giving us confidence in our ability to unlock the next 5% to 10% of type 2 penetration efficiently. Our growing type 2 customer base continues to surface powerful stories about the impact Omnipod 5 can have, including the experience of Virkis. He knew something was wrong when he began experiencing pain in his feet and arms, and an urgent care visit led him to an unexpected diagnosis of type 2 diabetes. After reviewing insulin delivery options with his doctor, Virkis chose Omnipod because he shared, I really love the mission and the promise that was exuded from Omnipod. to add normalcy to my diabetes and to show that my life can still be balanced and that this brand, this family will always be there and will forever evolve as medical technology does. Stories like Verkey's, combined with the growing excitement among both healthcare professionals and people with type 2 diabetes, continue to strengthen our conviction in this significant type 2 market opportunity. Looking ahead, we expect to expand penetration even further with the launch of our fully closed-loop offering planned in 2028, which will enable us to reach and serve the broader primary care population. Additionally, pharmacy access remains a critical differentiator in the US, making it easier for people with diabetes to start and stay on therapy. Over the past decade, we've built strong relationships with payers and PBMs across the U.S., backed by clinical and economic evidence that continues to resonate. We have the broadest access in the market, available at approximately 48,000 U.S. pharmacies and covered for more than 90% of insured lives, or about 300 million of the 317 million insured people. Our offering is affordable, with most users paying about a dollar a day through our pay-as-you-go model and preferred formulary position. And we continue to invest in programs designed to further reduce the remaining barriers to access, including efforts to simplify the prior authorization process for providers, particularly among primary care prescribers who treat large numbers of people with type 2 diabetes. Omnipod also continued to drive stand out international performance, fueled by strong year-over-year and sequential growth in new customer starts, along with continued positive price mix realization, driven by conversion from Omnipod Dash to Omnipod 5. We continue to see solid performance across our established European markets, supported by new sensor integrations, such as our launch with Dexcom G7 in Germany. Our OmniPod 5 launches in Canada and Australia also delivered robust growth. In Canada, we secured reimbursement, recognizing OmniPod 5's value in half of all provinces, helping drive more than 60% growth in new customer starts. And in Australia, new customer starts more than tripled following the launch of OmniPod 5. Our global expansion will continue in 2026, with Omnipod 5 and Omnipod Discover recently launching in the Middle East. In addition, Spain, our newest market, is expected to launch Omnipod 5 later this year. Volume remains the primary driver of our international growth, and the ongoing transition from Omnipod Dash to Omnipod 5 will continue to support positive price mix realization. Pricing contributed high single-digit growth in both the fourth quarter and the full year 2025. Our international growth runway remains substantial. The Type 1 market alone exceeds 10 billion, yet only one in four people with diabetes outside the U.S. is using AID therapy. Even a CGM penetration reaches around 65%. As adoption of AID accelerates worldwide, our proven commercial playbook, expanding product portfolio, and growing geographic footprint position us extremely well to continue capturing share, delivering value, and driving sustained international growth. To bring this all together, we have a large under-penetrated TAM across U.S. Type 1, U.S. Type 2, and international markets with significant runway to unlock additional growth in one of the fastest growing categories in MedTech. And our proven track record reinforced by our performance this year underscores our ability to continue to deliver top tier growth and value creation for shareholders. Notably, this top tier growth has allowed us to deliver meaningful margin expansion, even as we continue to invest thoughtfully to extend our competitive advantages in innovation, clinical outcomes, access, brand, and manufacturing. For the year, we achieved record growth and operating margins. delivering 180 basis points of growth margin expansion and 270 basis points of operating margin expansion. We remain committed to investing with discipline, ensuring we sustain the strong growth we are delivering today while also driving continued improvements in profitability. The investments funded by our durable recurring revenue profitable business model and strong financial position fueled significant progress across every aspect of our strategy in 2025. We expanded our global scale this year with launches in nine new countries, launched our G7 CGM integration, increased full phone control adoption to more than 60% of US users, and continued building the foundation for our next generation systems. We also advanced our clinical programs in meaningful ways. We published results from SecureT2D and Radiant, completed the STRIVE study for Omnipod 6, and moved into the next phase of our evolution study supporting our fully closed-loop system for adults with type 2 diabetes. Collectively, these programs further strengthened the scientific foundation behind Omnipod, advancing our algorithms for optimal performance, fortifying the case for broader AID adoption, and enabling continued global expansion. We invested in market development in new, more visible and impactful ways. Our expanded sales force is now more than 25% larger than our nearest competitor. Our DTC campaigns are generating record lead volume and activating new prescribers. And our enhanced insights and analytics capability are helping us optimize our cost to acquire and cost to serve. driving continued expansion in customer lifetime value. These advances and efforts have solidified Omnipod's status as the most requested, most preferred, and most prescribed AID system. Among new customers, 70% of those who walk into a prescriber's office request a brand ask for Omnipod 5. And among existing users, Omnipod 5 maintains the highest net promoter score in the category. Now I want to take a few minutes to walk through how we will continue advancing the long-term strategy we outlined at our 2025 Investor Day to extend our leadership and strengthen patient and physician choice for Omnipod. Innovation remains central to our strategic approach, and in 2026, we will deliver a steady cadence of highly requested enhancements to reinforce our leadership and automated influence delivery. This includes algorithm updates that enable a 100-step point target for tighter glycemic control, increased time in automated mode, and improved responsiveness to enhance both the user experience and clinical outcomes. We will also expand our CGM integrations to include Freestyle Libre 3+, making Omnipod 5 compatible with every major sensor. And we will roll out Omnipod Discover globally. Omnipod Discover is a new data platform that delivers clear, streamlined insights to support efficient healthcare professional review of Omnipod 5 data and enable more confident prescribing. Discover provides users with actionable guidance and reassurance, strengthening engagement and adherence. It also simplifies onboarding, reducing efforts for new users and accelerating the startup experience. Collectively, these enhancements reduce day-to-day effort with fewer device interactions, broader CGM choice, and more actionable insights that help patients and clinicians with confidence. In 2026, we will continue to purposely increase R&D investment to advance our next-generation platforms, including Omnipod 6, as well as our fully closed-loop system for type 2 diabetes and future innovations. this also includes continued progress across our clinical programs with ongoing work and strive and evolution let me take a moment to share more on our next generation platform starting with omnipod 6. this system is designed to address the critical needs of users by meaningfully reducing day-to-day burden and increasing flexibility through improved connectivity expanded flexibility in on-body placement real-time software updates and more personalized automation. It will feature a smarter algorithm to further personalize insulin delivery, with pivotal data to be presented at ADA in June. Importantly, we are designing a single, updatable pod platform that will be compatible across all CGM systems. These capabilities not only improve outcomes and the wearer experience, but also accelerate our innovation cycle as we prepare for launch in 2027. turning next to our fully closed-loop system for people with type 2 diabetes, which is designed to make AID accessible to virtually everyone. As the market leader in AID, it's important that we define what fully closed-loop truly means for patients and providers. It is a system that delivers therapy effortlessly, adapting automatically without any user intervention. no dosing, no mealtime actions, and no required adjustments while the pod is worn. For us, fully closed loop also means redefining the provider experience, requiring no clinician-defined settings to start, and simple enough for a patient to initiate on their own. Reflecting this definition, we believe our fully closed loop system will help address a significant unmet need for the 5.5 million people with type 2 diabetes who are on insulin, only about 25% of whom achieve recommended glucose targets today. We expect to initiate our pivotal evolution study this year, supporting a regulatory filing in 2027 and a commercial launch in 2028. Finally, operational excellence remains a core focus as we work to expand margins in 2026. while continuing to fund our R&D and commercial investments. In 2025, we delivered significant margin expansion driven by scale and ongoing manufacturing productivity, with our Acton and Malaysia facilities ramping ahead of plan. In 2026, we expect additional leverage as we invest in more capacity and further automation. And with the help of AI, we are increasingly tapping into our unique cloud-based data ecosystem to enhance customer service efficiency and satisfaction, reducing our costs to serve while strengthening retention. Taken together, these priorities position us extremely well to execute on our long-term strategy and continue strengthening and driving choice for Omnipod among patients and providers worldwide. All of these investments, strategies, and consistent execution come together in the financial growth algorithm we introduced at our 2025 Investor Day. Our 2026 guidance aligns fully with this growth outlook, and Flavia will walk through the details in a moment. This outlook is supported by our continued investment in innovation, science, market development, demand generation, and manufacturing, balanced with the discipline that has defined our execution over the past several years. We remain committed to delivering market-leading financial performance while investing in the next wave of transformative innovation. We entered 2026 with strong momentum and clear priorities that position us well and give us confidence in achieving our financial goals. To close, 2025 was a year of tremendous growth for Insulet, financial, strategic, and organizational. We expect to build upon this in 2026 as we lighten the burden of living with diabetes for hundreds of thousands of people, and in doing so, drive penetration, increase our scale, and create value for our shareholders. We operate from a position of strength with durable competitive advantages, a large and under-penetrated market, and a purpose-driven, highly motivated team committed to finding a better way. We look forward to extending our leadership in the year ahead and beyond. Thank you for your continued support and interest in Insulate. I'll now turn the call over to Flavia to walk through the financials and guidance in more detail.

Thank you, Ashley, and good morning, everyone. The Insulate team had another strong year in 2025 and closed with an impressive fourth quarter, delivering over $780 million in total revenue an increase of 31.2% at reported rates and 29% at constant currency rates. During the quarter, total Omnipod grew 31.3% on a constant currency basis. We generated total revenue of over $2.7 billion in 2025, an increase of 30.7% at reported rates and 29.5% at constant currency rates. For the year, total Omnipod grew 30.3% on a constant currency basis, showcasing sustained global demand for Omnipod 5. Across both fourth quarter and full year, we achieved record new customer starts in the US, international markets, and company-wide, with growth accelerating on both a year-over-year and sequential basis. In the U.S., during the fourth quarter, over 85% of new customer starts came from MDI, and Type 2 represented over 40% of all starts, underscoring the significant expansion of this customer segment. Our estimated global utilization and annualized retention rate remain roughly stable for the fourth quarter and the full year. Now turning to our performance in greater detail. U.S. Omnipod revenue grew 28% in the fourth quarter and 27.2% for the year, above the high end of our guidance range, driven by continued demand for Omnipod 5 across Type 1 and Type 2 customers. As we commented last quarter, U.S. revenue growth during 2025 was impacted by rebate timing and prior year inventory stocking dynamics. Normalizing for these impacts, US growth in the fourth quarter was approximately 30 basis points higher, representing an acceleration from normalized third quarter growth levels. Our international Omnipod business grew 50.7% on a reported basis and 41.7% on a constant currency basis for the fourth quarter. For the full year, international Omnipod revenue grew 44.1% on a reported basis and 39.3% on a constant currency basis. Volume was the primary driver of international Omnipod growth, while positive price mix realization continued to contribute as customers shift from Omnipod Dash to Omnipod 5. As in prior quarters, we witnessed strong growth in the UK, Germany, and France, in addition to the other countries where we have launched Omnipod 5. In 2025, our nine expansion markets collectively deliver growth in line with the UK and Germany combined, reflecting the broad market appeal of Omnipod 5 and benefits to patients globally. Continuing down the P&L, Our fourth quarter growth margin was 72.5%, reflecting a 40 basis point expansion year over year. Our full year 2025 growth margin of 71.6% reflected 180 basis point expansion year over year. This improvement was fueled by robust top-line growth, continued manufacturing productivity gains at our Acton and Malaysia facilities, supported by positive pricing and increased volumes. As mentioned last quarter, Malaysia became margin accretive just one year after coming online. Turning to OPEX, we continue to make purposeful investments to both maintain and extend our leadership. We're fortunate to be in a position where we can meaningfully fund our innovation pipeline and ensure we are first to deliver truly transformational technology to the market. In line with this commitment, we increase R&D spending by 50% in the fourth quarter and 37% for the full year, as we advanced our innovation roadmap and clinical development programs, including our STRIVE and EVOLUTION studies. At the same time, we remain disciplined and targeted in our SG&A investments. We continue to prioritize market development initiatives to unlock AID penetration and demand generation efforts, including expanding our commercial and customer experience teams to drive share and increase retention of our leading AID technology across both type 1 and type 2 diabetes. For the year, we successfully optimized both our cost to acquire and our cost to serve. Two key metrics we remain focused on improving as we enhance customer lifetime value. Fourth quarter adjusted operating margin of 18.7% reflected robust revenue growth, strong growth margins, and continued investment to advance innovation and key commercial strategies. Our full year adjusted operating margin was 17.6% ahead of our most recent guidance. and representing 270 basis points of expansion versus the prior year. As Ashley mentioned, we are well positioned to continue investing robustly for future growth while delivering meaningful margin expansion for years to come. Fourth quarter net interest expense was $9.2 million, an increase of $11 million relative to prior year, primarily driven by the debt refinancing. Full-year net interest expense was $24.7 million, an increase of $22 million compared to the prior year. Again, primarily driven by impact of our senior unsecured notes issued in March. Our fourth quarter non-GAAP adjusted tax rate was 22%, and our full-year non-GAAP adjusted tax rate was 22.3%. Fourth quarter adjusted EPS was $1.55, increasing 35% from $1.15 in the prior year comparable period, while full year 2025 adjusted EPS was $4.97, up 53% from $3.24 in the prior year. During the year, we repurchased approximately 184,000 shares for $59.6 million. Turning to cash and liquidity, we ended the quarter with $716 million in cash and the full $500 million available under our credit facility. We delivered more than $375 million in free cash flow for 2025, a 24% increase over last year. 2025 free cash flow included approximately a $70 million tax benefit related to the one big beautiful bill. As a reminder, free cash flow includes capital expenditures, which grew meaningfully in the fourth quarter to $135 million, reflecting our continued investment in manufacturing capacity. This included further expansion of our Malaysia operations, With additional lines coming online as well as the start of development of our new facility in Costa Rica, which is expected to be operational in 2029. These investments strengthen our global footprint. Advanced our automation initiatives and position us to support industry leading growth while continuing to expand margins over time. Now turning to our outlook for the first quarter and full year 2026. For the first quarter, we expect Omnipod revenue to grow 28 to 30% with total company growth of 25 to 27%. On a reported basis, foreign currency is expected to provide a favorable impact of about 200 basis points to both measures. In the US, we anticipate Omnipod growth of 24 to 26%. And in our international business, we expect Omnipod growth of 37 to 39%. On a reported basis, foreign currency is expected to contribute a favorable impact of roughly 1,100 basis points to international growth. Turning to our full year 2026 outlook. We expect our total Omnipod revenue to grow 21 to 23%, and our total company revenue to grow 20 to 22%. We expect a favorable impact of 100 basis points from foreign currency for the year. Our guidance reflects continued top tier market leading growth, but I know you will all ask me, why is growth decelerating? Just a couple of quick notes on this. First, this year we will be anniversaring the first full year of the U.S. launch of Omnipod for Type 2, which was a significant contributor to last year's performance. In addition, we're beginning to annualize several of our international launches, which continue to ramp well but create more challenging year-over-year comparisons. These year-over-year comp dynamics are reflected in our 2026 guidance. For U.S. Omnipod, we expect our revenue to grow 20 to 22% driven by increased penetration from MDI users and competitive gains. We expect year-over-year growth in U.S. new customer stocks for the year, and we assume similar trends in pricing, utilization, and retention as we saw in 2025. For international Omnipod, we expect 2026 revenue to grow 24 to 26%. On a reported basis, we expect a favorable impact of approximately 300 basis points from foreign currency. We expect year-over-year growth in international new customer starts for the year, as we penetrate further in current markets and expand Omnipod 5 into new markets. Omnipod 5 is now available in 19 countries, including five recent additions in the Middle East. And we will continue to broaden our reach and plan to enter Spain by late 2026. While volume remains the primary driver of our international revenue growth, our guidance also reflects a benefit from positive price mix realization as customers continue to transition from Omnipod Dash to Omnipod 5. Overall, our international growth guidance assumes stable utilization and slightly improving retention from 2026 relative to 2025. Turning to 2026 operating margin. In line with the annual guidance we provided at our recent investor day, we expect to drive approximately 100 basis points of operating margin expansion for the full year, reflecting strong top line growth, modest gross margin expansion, a significant step up in R&D investments to fuel our innovation pipeline, and leverage SG&A spend. Looking at a few items below our operating income. We expect 2026 2026 net interest expense to total approximately 40M dollars primarily due to lower interest income. And we expect 2026 non gap tax rate to be in the range of 22 to 23%. Our team is actively focused on assessing potential opportunities to optimize our interest expense and tax rate over time. Turning to Shares Outstanding and EPS. I'm pleased to share that the Board has approved an additional $350 million share repurchase authorization. We expect to deploy approximately $300 million of this authorization in the first quarter of 2026. Our strong balance sheet gives us the flexibility to continue allocating capital in line with our longstanding principles. Investing for growth, while delivering long-term value for our shareholders. Based on our current share count and repurchase plans, we expect the 2026 ending balance of our diluted share count to be around 70 million shares. Based on these factors, we expect 2026 adjusted EPS to increase by more than 25%. we expect free cash flow to be approximately flat from 2025 levels, supported by robust growth and continued margin expansion, partially offset by a ramp up in capital expenditures to support our continued global manufacturing expansion plans. As I just mentioned, 2025 free cash flow included approximately $70 million related to a tax benefit from the one big beautiful bill. Our team remains steadfast in its commitment to driving top-tier growth, expanding margins, and increasing profitability and free cash flow. These efforts are central to our long-term value creation strategy and enable us to reach and serve more people with diabetes around the world. With that, operator, please open the line for questions.

Thank you. We will now begin the question and answer session. If you would like to ask a question, please press star one in your telephone keypad. If you would like to withdraw your question, simply press star one again. Our first question today comes from the line of Jeff Johnson from Baird. Your line is open.

Thank you. Good morning, everyone, and congratulations on a strong close to the year. Ashley, I just want to start from a high level maybe with the first question here. You're a couple months away from your one-year anniversary leading Insulint. You know, stock has had a great run in the first six months of your tenure. It's faced maybe some challenges here the last five or six months. What do you think is the most underappreciated part of the Insulint story at this point, especially from an investor perspective? Thank you.

Yeah. Good morning, Jeff. Thanks for the question. And it's great to see Insulint continue to execute and live into our commitments that we shared in November at our investor day. I would highlight four key areas. Number one is our tech lead, which we'll continue to innovate off of. I'll come back to that. I would say number two is our growing commercial prowess. I'll come back to that. Three is our manufacturing at scale. And four is our financial strength. So I'll start with just our tech lead. As we share, we've invested over $3 billion to get here. Omnipod 5, we're just three and a half years into the launch into the U.S., two and a half years in places like the U.K. and Germany, and we continue to post record NCF. This knowledge, this experience, and this tech lead really continue to prove the leadership that's resulted in number one most prescribed and number one most requested. And importantly, in my opening remarks, I really shared how You know, we've built this meaningful pipeline that really addresses the biggest unmet needs in the market. And you heard us touch around really two algorithm improvements starting this actually weekend. We launched a limited market release with Omni Top 5 with a lower set point, advanced automated mode. It connects with Libre 3. We're going to be launching our new data platform. So that was going out into full market release in a couple months. We will be launching our third generation algorithm with Omnipod 6. As we mentioned in our opening remarks, we're going to be posting the data and the algorithm at the ADA. This is a meaningful advancement in personal automation, as well as over-the-air connectivity, as well as on-the-bod placement with a lot of variability, which is important for patients, as well as a one pod. And you're going to hear us talk about there's been a lot of noise, if you will, in the industry, which is really good things for patients around this fully closed loop. We believe that we are in a class by ourselves of how we're going to define what fully closed loop really means. I'll come back to that in inquiry. But it's a very strong pipeline. And then our commercial prowess, I think, is really underappreciated. We have the largest sales force in the industry. We are going to evolve that sales force for messaging from selling on simplicity and ease of use and our highly differentiated technology to our strength of clinical performance. Come back to that. And then as Flavia was mentioning in her opening remarks, 30,000 prescribers with Omnipod, which is up 28%. Very strong brand loyalty, and we continue to have unparalleled access and affordability. We manufacture at scale. This one thing to get regulatory approval, it's different than to manufacture. We produce tens of millions of pods with high quality, medical grade quality at consumer electronic scale. And when we say something, we execute on what we're going to say. I'm really pleased. Building out Malaysia, we're already margin accretive in Malaysia. In Acton, we've improved productivity, and we've already started to break ground in Costa Rica. And last is just the financial wherewithal. And, you know, not only our recurring revenue model, 70% growth margin, expanding operating margin, EPS above revenue, and cash flow positive. So those are perhaps underappreciated tenets of the insulate company. Thanks for the question, Jeff.

Your next question comes from a line of Robbie Marcus from JP Morgan. Your line is open.

Oh, great. Good morning and congrats on a good quarter. I wanted to ask, I guess it's limited to one. I wanted to ask on new patient star trends, U.S. and outside the U.S. And, you know, we've seen some of your competitors stumble a bit on new patient ads recently. You mentioned record new patient starts. I believe that's a U.S. and outside the U.S., but you could clarify that if I'm wrong. How are you thinking about finding sources of sustainability in the new patient growth? Type 2 is clearly a home run for you in the U.S. How do you keep that growing and getting larger and larger and continuing to win there? And then same question outside the U.S. You've been moving into new geographies. How do you sustain your number one share there and continue to grow that over time? Thanks.

Thank you, Robbie. Uh, yeah, we, we did, as I mentioned before, I think in Investor Day, we enjoy very balanced growth from the US and OUS. We did enjoy record new customer starts in the US, um, as well as OUS. And, you know, our role as the category leader, you know, as we shared, we've, we've generated about 65% of the market growth has come from Insulet. And that really is the primary source of our volume are coming from people not in the category. And those are people on multiple daily injections. And so we engineer our innovations to address, to bring new customers into the market. We do enjoy about 10% of our customers switching, and we are switching from competitive AID, but our primary source is coming from, you know, MDI. And that, you know, we can go into type one, where we continue to improve new customer starts and post new records in type one. both in the U.S. as well as OUS. In the U.S., that's backed by strong ADA guidelines. You know, we mentioned that 40% of people on AID therapy, there's still a lot of room when CGM has 70% penetration. There's a 30-point spread. So backed by science, making the education to really educate on our very strong clinical performance as well as just kind of the unparalleled access and affordability in type 1. Type 2, Robby, you mentioned we're at the nascent stages, 5% penetration. We have a very strong value proposition. We have very strong science. You're going to hear us talk more about kind of our strategic pivot, taking advantage of the largest channel of the number one sales force in the U.S., of migrating from really sharing our differentiated technology into proven clinical outcomes. It's something, quite frankly, you know, we own. There's a bit of a misperception in the marketplace that we have to correct and stand firm. and set the record straight, which is in addition to our, if you will, preferred form factor and preferred user experience, we have very robust clinical performance on A1C reduction and improved time and range, not just in our clinical trials, but importantly in two independent studies just recently that compared AID systems Omnipods A1C was unsurpassed and our timing range was similar. So we're going to take that message and that science to the largest channel of our piano, which is our field force. Thanks for the question, Robbie.

Your next question comes from a line of David Roman from Goldman Sachs. Your line is open.

Thank you. Good morning, everyone. Maybe just sort of follow up on Robbie's question here. Can you help us reconcile a script trend to what you're seeing in reported revenue? I think this is a dynamic that caused quite a lot of noise in for quarters. So can you maybe size up how new patients start trends and volume growth compares to revenue? And if script data is not the right barometer, what should investors be using to track performance? Then I have one financial follow-up.

Sure, let me just turn to Flavia. Go ahead, Flavia.

Good morning, David. Thank you for the question. Yes, we know there had been a lot of questions around script data during the fourth quarter. So I think as a reminder, and we talked a little bit about this at the J.P. Morgan conference in January, the best, if you were going to use script data, the best would be to use total pods. And that's the best reflection of the future revenue outlook. If not, if the total pod data is not available, you can use total scripts. It will not capture potential changes to longer script fills, you know, going from a 30-day to a 60-day to a 90-day. But it's also a good second best option. And then finally, you can use NBRX, but there's a little bit of noise on NBRX because of samples and also different channels. Specialty channel is not captured there as you use IQ via data. And then finally, in the fourth quarter, there's a little bit of, I'll say, seasonality where you see higher volume going through wholesale with specialty pharma than in other quarters, which is not necessarily captured in script data, but affects revenue. So there are a few items that folks have to take into consideration when they extrapolate from scripts into dollars of revenue.

Okay. And then are you willing to provide the difference between new patient start growth and overall REVENUE PERFORMANCE?

NO, WE'LL CONTINUE TO PROVIDE I'LL SAY QUALITATIVE COMMENTARY ON THE STRENGTH OF OUR NEW CUSTOMER STARTS AND WE TALK ABOUT THEM. ASHLEY JUST MENTIONED THE STRONG PERFORMANCE IN BOTH U.S. AND OUS AND THE CONTINUED GROWTH THAT WE SEE AS WE CONTINUE TO EXPAND PENETRATION OF AID BUT WE'RE NOT GOING TO PROVIDE specificity on new customers' stock growth rates.

Your next question comes from a line of Larry Beagleson from Wells Fargo. Your line is open.

Good morning. Thanks for taking the question and congrats on the strong finish here. Yeah, I'm going to ask, you know, I think Jeff's question may be a little bit differently. So, Ashley, you're guiding to 21% to 23% OmniPod growth for 2026, and You gave a three-year LRP of 20% recently. So my question is, how are you feeling about being able to sustain the 20% growth in light of new competition? And anything new you can offer on why you think investor concerns around competition are overblown? Do you think it's going to be harder for new companies to scale or compete directly with Insulet in the patch pump market? Or do you think their entries will have a rising tide effect? Thank you.

Thank you, Larry, for the question. And again, I'm really pleased to see the confidence in the company even increase since our investor day that we shared in November. You know, as we come as a company out of self mode to the position of market leadership, you know, performance trumps everything. And again, I'll go back to some elements that I think are maybe underappreciated. Getting regulatory approval is not really the definition of impact. And we have this 25 year head start with, again, $3 billion of investment that's enabled us a lot of knowledge, a lot of tech know-how, a lot of experience on scale. And I think in this marketplace, if you look at history, there's been a lot of attempts because it is an attractive market. But I will tell you, there are a lot of barriers to entry. And those really come down to manufacturing at scale with high quality. It has to go to continuing to innovate with clinical performance, and really unlocking the TAM. What's going to enable us to deliver the top-tier performance is by continuing to bring new users into this category. And our pipeline is specifically designed to bring new users from MDI into the category. And I think the biggest unmet need for us is to really start to improve the acumen among the clinical base, particularly in the U.S., of our strong clinical performance. In addition to being number one prescribed and number one most requested, predominantly because of our differentiated form factor and user experience, we also want them to know and be well aware of just the strong, proven clinical performance, both efficacy and safety, and unsurpassed in the category. I think that will be new information for many more clinicians. And then I'm going to come back to just continuing to build on our commercial prowess as we go, Larry. Again, I think this company has been known as being really good at technology and really good at the supply chain, what's perhaps underappreciated is this evolving commercial of having the largest sales force selling on science, very strong. We're bringing new prescribers into the category. We have this beloved brand that we are activating. When we activate DTC, we generate record new leads into the category. We're converting those leads into brand loyalty. They become new Omnipod potters. And then we continue to have unparalleled access and affordability. We've been at this pharmacy for nine years, and we've built remarkable relationships with the payers and the PBMs because we have very strong clinical and economic evidence. And we're going to take that strength and continue because 100% of our portfolio is in pharmacy. So while others may be at the 10% or 30%, Omnipod's been at this for nine years and will continue to have unparalleled access and affordability. So Thank you for the question, Larry.

Just one final add is also the financial strength that we have. We have best-in-class gross margin, which has built through these investments that Ashley talked about over the years. We have free cash flow positive, and that strength allows us to continue investing in the business while at the same time being able to expand margins. And that investment is in innovation, it is in unlocking the market with AID penetration and is also in capacity to invest ahead of demand when you are in a disposable form factor construct.

Yeah, Eric sitting here, you know, as we shared, Larry, we've got a billion dollars that we're going to invest in R&D in just the next three years. And we, you know, we also are planning new next generation platforms beyond the three-year window to stay ahead.

Your next question comes from a line of Michael Pollack from Wolf Research. Your line is open.

Hey, good morning. Thank you for taking the question. I have a question on one of your sensor partners. So, G7 is moving to 15-day from 10-day. Is this a different pod for Influit, or is this the same pod? And if it's a different pod, can you comment on the company's readiness to provide integration with the 15-day sensor? I'm just, I'm remembering back to 2024, it took some time for the G7 pod to become widely available, and it kind of, I think, suppressed starts for a period of time before It was widely available, and so I'd like to understand the dynamics around the move from Dexcom to 15-day. Thank you.

Thank you, Mike. And here's Eric. Why don't you talk about our sensor integration?

Mike, thanks for the question. As a reminder, we were actually ready with the 15-day launch day one with Dexcom. So Omnipod 5 is compatible with the 15-day G7 now, and that's a great experience for customers. Then one of the key things we've been focused on, as you know, Mike, is accelerating sensor integration for customers. We were ready day one with the 15-day. As Ashley mentioned earlier, we began the limited market release of our Freestyle Libre Plus integration just recently, and we're excited to bring that to market in the first half of 2026. And then looking ahead to Omnipod 6, recognizing this need to evolve even faster with the market. It's part of why we're designing one pod that can be updated in market for faster innovation so that with Omnipod 6, we can always push the latest technologies directly to pods that customers have. So we're accelerating innovation and sensor integrations now. Pleased to be on market with Dexcom 15-day and assuring that we're positioned to do that going forward.

Your next question comes from a line of Travis Steed from Bank of America. Your line is open.

Hey, thanks for the question. You talked about changing your guidance philosophy. So just wanted to make sure we had an understanding of how you kind of set this year's guidance versus prior years and kind of what's been kind of baked in into 2026 versus kind of what's left for upside. And also, do you expect record new starts in Q1 as well?

Thanks, Travis.

Yeah, hi, Travis. Good morning. We continue to set guidance with a full intent to deliver. That has not changed. The guidance that we provided today reflects a balanced view of our outlook at this point. And we will experience normal seasonality in the first quarter, which has been the case historically between fourth quarter and first quarter. But outside of that, we are very confident and pleased to be able to provide an outlook of 25 to 27% for the first quarter and 20 to 22% for the full year.

Thank you. Our next question comes from a line of Joanne Wench from Citigroup. Your line is open.

Good morning, and thank you so much for taking the question. ADA is going to be here before we know it. Is there anything in particular that we should look forward to there? And I'm also trying to key in on when are we going to get a line of sight on some of the clinical steps for Omnipod 6. Thank you.

Yeah, thank you, Joanne, for the question. So let me maybe just tee up one of the things that we'll be sharing at the ADA, which is data from our feasibility study evolution, which is around what we're calling our fully closed loop, which not all fully closed loops meet the definition of our definition. And I think it's important, I'm going to spend a little bit of time on this quickly, and then Eric will cover the others. You know, we are designing as the market leader with our big eyes focused on the underserved type two market in the United States, where we have 5% penetration, and there's five and a half million people on insulin. that we would like to be on AID therapy since the ADA guidelines recommended AID therapy as the standard of care, we have designed our fully closed loop to address the biggest barriers for those patients with type 2 to get onto AID therapy. It starts with our algorithm, which will be including no user intervention. It requires no dosing. It has no mealtime interactions, no adjustments while the pod is worn. There's two other areas that are really important to the Type 2 user base. One is the clinicians. And the clinicians, this will require no defined settings at start, which is a big barrier right now to the primary care prescribing base that just don't have the time to go input all of those settings. And then third, Joanne, the big unlock is patients don't have to do two-hour training. You know, this is something that they can initiate on their own. So our combination of really modernizing the training so that they can do it at home on their own time without two hours, really unlocking prescriber adoption, not having to put in settings, really important for the primary care audience, which is really who's going to be managing patients who have type 2 diabetes. And then third, really a very CGM-like experience for people with type 2 diabetes. So we're going to be sharing our data from our feasibility at the ADA. But in addition to that, we have some our third generation algorithm in Omnipod 6 that Eric will touch on.

Hey, Joanne. Just building on Ashley's comments about what's coming at the upcoming Congresses. So ATDD will be showing the evolution data, as Ashley just described, on our way towards that truly transformative, fully closed-loop system to unlock primary care. We'll also be showing some health economic data showing favorable outcomes in ER visits for the unique fully exposable experience that is Omnipod as compared to tube pumps. So really excited for what's coming at ATTD. Looking ahead to ADA, that's where we'll be publishing the pivotal results from STRIVE. That's the pivotal study that supports Omnipod 6. Excited to be reporting that out. And in addition, you know, Ashley mentioned this earlier, but there are more independent third-party studies comparing clinical results of on-market AID systems coming out. And in two recent of those, Omnipod has shown unsurpassed A1C and similar time and range to those reporting time and range using an ICGM sensor. And so one of the other things that we're paying attention to is that it's really important to interpret clinical data based on A1C, and it's hard to compare across studies that don't use an ICGM sensor for time and range. And so there's more of those studies coming out, and you'll see us talking about those too.

Your next question comes from a line of Richard Newiter from Truist. Your line is open.

Hi, thanks for taking the questions and congrats on the quarter. Maybe the first one, just your type two mix, I think you said you actually figure at about 40% of new patient starts. I guess that would seem to imply that your type one segment maybe saw moderating growth leveling off in the single digit range. I guess, is that the right way to think of it going forward? And it's so, what is that? Is that share? Is that just the market kind of started to moderate and we're getting near maturity? And then follow up, thanks.

Yeah, I'll start and maybe Eric can add. So yeah, we had very strong type two performance in the fourth quarter and there was a continuation of that strength throughout the year. We had record new customer starts for both US and international, both year over year, excuse me, and sequentially. To your point, Richard, Type 1, it grew nicely year over year, and it was comparable to the third quarter, which was a record quarter for us in NCS. The level of penetration, obviously, in Type 1, is higher than type 2. And as we continue to bring AID into those markets, you will see accelerating growth in type 2, just given that it's 5% today versus type 1 at 40% penetration of AID. But we continue to source a lot of our volume from MDI, as we talked about, 85%. And that's really our strategy, to drive that penetration in those customer segments and internationally, which is also still very under-penetrated. Eric?

Yeah, Richard, thanks for the question. I think as Flavia described, Type 1 in the U.S. is more penetrated, and the level of new customer starts in the market is high. And so it continues to be a significant driver of growth. Ashley described it well. We've got a balanced growth portfolio, and Type 1 is a big part of that. type two, the level of new customer starts in the market has been low. And we are accelerating that as we launch OmniPod 5 with type two and did so over the course of 2025, which is why you saw that mix grow. You also saw our type one new customer starts outside the US grow significantly year over year. And those three levers, US type one, US type two, international type one, are gonna contribute a balanced contribution to our growth over time.

Okay, that's helpful, thanks. maybe can you following up to travis's question um can you put some assumption bars or or around the upper and lower ends of your range or maybe said another way what what would have to happen to the biggest needle mover in your assumption set to be at the upper end or above well we provided a guidance range so to me that is the upper and lower end of uh of the you know the the the bars that you're describing richard

And I think we obviously, as I said earlier, we continue to set guidance with the four intent of delivering, and this is our best outlook at this point, given where we are in the year. Obviously, if we can advance AID penetration even further and faster, that will translate into us being closer to the top end of the range.

Thank you, Richard, for the question.

Your next question.

I have one more question.

Certainly. Your final question comes from a line of Danielle Antelfi from UBS. Your line is open.

Hey, good morning, everyone. Congrats on a strong end to the year, ladies plus Eric. So my question is on the competitive moat. Ashley, you touched on this earlier. I do think it's underappreciated. I specifically wanted to see if you could talk a little bit about Danielle Steele- The sampling at the physician's office and sort of if you could walk through how this works like who trains the patient to ensure they get the optimal experience and appreciate it still early, but what are you seeing for for capture rates with that program thanks so much.

Danielle Steele- Thank you Danielle for the question and and I guess just for context, again, I think the company is best known for just having really differentiated technology and investing ahead of the curve and supply chain and maybe pioneering this. you know, pharmacy pay-as-you-go model. And what I would like to see at the end of this year is, you know, a better appreciation of the commercial prowess that we've been building over the past couple years. So we have been expanding our sales force. We expanded it around 25% last year. We're continuing to do that. We call on over 17,000, so, you know, full coverage of the endos, really 10,000 of the highest prescribers. and what we're evolving is our messaging, as I mentioned earlier, in addition to selling what they've come to love, which is really this differentiated technology platform that's simple and easy to use. It's why it's the gateway to the category to new users. It's easy for them to explain. It's also coming to educate on our really strong clinical performance, and we will continue that messaging in 2026. To make it easy to get people on pod, we're really the only AID offering that can get people on a sample. So right in the practice, they can go put a pod. It's a very capital efficient way for us to initiate trial. We've gotten a lot of really good feedback both from young children as well as grandparents around once, it's kind of that moment of delight. Once they try it on, they get the wow factor and we have very strong conversion ratios. In addition to the called-on universe, we also have this darling brand, is what I say, that I think is a bit underappreciated, where we activate directly to consumer, make them aware of the category, make them aware of Omnipod 5, and people go in and ask their doctors for that. And they specifically ask for Omnipod, and that's a new category user. And those then become new patients, but they also become new prescribers. And that's why you heard us talk about when we ended the year, we had 30,000 prescribers writing for Omnipod, which is up 28%. And we're going to continue that five wheel of really creating the market and creating demand for Omnipod. Thank you for the question, Daniel.

And this concludes our question and answer session and today's conference call. We thank you for your participation and you may now disconnect.