Insulet Corporation

Good morning and welcome to the Insulate Corporation first quarter 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 first quarter 2026 earnings call. Joining me today are Ashley McEvoy, President and Chief Executive Officer, Flavia Peace, Chief Financial Officer, and Eric Benjamin, Chief Operating Officer. On the call this morning, we will be discussing Inflict's first quarter results along with our financial outlook for the second quarter and full year 2026. With that, let me start our prepared remarks by reminding everyone that we will make forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on current expectations and assumptions and involve risks and uncertainties. that could cause actual results to differ materially. Please refer to today's press release in our SEC filings, including our most recent Form 10-K and Form 10-Q, for discussion of these risks. We undertake no obligation to update any forward-looking statements. In addition, on today's call, non-GAAP financial measures will be used to help investors understand Inflict's ongoing business performance, including adjusted gross profit, adjusted operating income, adjusted EPS, free cash flow, and constant currency revenue, which is revenue growth excluding the effect of foreign exchange. Reconciliations of the non-GAAP financial measures being discussed today to the comparable GAAP financial measures are included in the accompanying investor presentation and are 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 any questions. Now I'd like to turn the call over to Ashley.

Ashley? Thank you, Claire, and good morning, everyone. we're pleased to report a strong start to 2026 with continued growth momentum, robust margin expansion, and disciplined execution of the strategic priorities we shared at Investor Day. Our first quarter performance clearly reflects the opportunity in our large and under-penetrated markets, the strength of our differentiated technology and compelling clinical outcomes, the scalability of our recurring revenue business model, and the deep expertise and commitment of our teams around the world to finding a better way for people living with diabetes. We also made notable progress on our strategic priorities, which are to accelerate innovation that improves outcomes and unlocks new segments, develop our core markets as the category leader, strengthen our commercial capabilities, build a world-class team to enable our growth ambition, and leverage our financial strength to invest in and scale our business profitably. In the first quarter, we achieved 30% revenue growth, including 28% in the US and 45% internationally. We continue to expand our customer base through new customer starts and enjoy strong retention and loyalty among our potters globally. Leveraging our strong revenue growth, we expanded adjusted operating margin by 110 basis points year over year. Adjusted EPS growth of approximately 40% was driven by our robust top line growth and margin expansion and the benefits of our first quarter share repurchase. This performance reinforces our confidence in the financial growth algorithm we laid out last year. and then our strategy to capture the significant opportunity ahead of us as the market leader and primary driver of category growth in the fast-growing global AID market. As a result, we are raising our full-year 2026 total company revenue growth guidance from 20% to 22% to 21% to 23%. Flavia will share more details on our performance and outlook shortly. But let me first walk you through how we are developing our key markets, driving performance, and advancing our strategic priorities. Starting with the U.S., our growth this quarter was strong, reinforcing our market leadership. We grew new customer starts year over year, led by strong momentum in AID adoption for Type 2, and benefited from positive pricing. We did experience greater than normal seasonality, which we believe was driven by the annual reset of deductibles impacting patient copays and coinsurance. These factors contributed to what appears to be a slower start to the year across the U.S. diabetes category. Improving month-on-month trends over the course of the quarter and into April suggests this was a temporary headwind, and we remain confident in our U.S. outlook for the full year. Our upcoming integration with the Libre 3 Plus sensor this quarter will unlock the benefits of Omnipod 5 for the nearly 450,000 people with diabetes currently using the Libre 3 Plus sensor. In U.S. Type 1, we continue to extend our leadership and drive increased penetration with solid growth in our customer base both annually and sequentially. Commercially, we are upskilling our sales force to strengthen our messaging on clinical performance in the field, and we're deploying tools to optimize physician targeting and conversion while expanding reach and frequency. I remain confident in the opportunity to continue to move people with type 1 diabetes from MDI to AID and drive increased penetration. In U.S. Type 2, we continue to expand the category and accelerate adoption from those using MDI. As expected, our Type 2 customer base grew rapidly over the prior year, supported by our prescriber education initiative and the ADA guideline update, which established AID as the standard of care. We remain confident in the trajectory for U.S. Type 2 AID adoption and in expanding our market leadership position. Notably, Omnipod's first mover advantage gives us a head start in understanding the nuances of this market and in designing targeted initiatives to eliminate the barriers for adoption. For example, access and affordability are even more important for adoption in Type 2 than in Type 1. In fact, our ongoing efforts to increase access and remove prior authorization requirements generated a 4% net access improvement in the first quarter. benefiting an additional 16 million lives. We continue to see a vast opportunity to bring meaningful improvement in both clinical outcomes and quality of life to the millions of people with type 2 diabetes. Moving outside the U.S., our international business delivered another standout quarter, driving significant profitable growth and recording our third consecutive quarter of growth above 40%. We achieved 45% constant currency revenue growth, supported by continued strong year-over-year and sequential growth in new customer starts, as well as positive price mix from the ongoing conversion from Dash to Omnipod 5. We are generating robust growth across our largest and most established European markets, including the UK, France, and Germany, all of which delivered strong first quarter new customer starts driven in part by our focus on new prescriber activation. In the UK, we achieved record NCF three years into our launch, reflecting the success of our strategy to deepen penetration internationally. We also continue to expand access and reinforce the value of Omnipod 5. In Canada, for example, we secured improved reimbursement and new coverage for Omnipod 5 across four provinces, further fueling our growth. We now have reimbursement approval for 85% of the Canadian market. Looking ahead, we remain on track to launch Omnipod 5 in Spain in the second half of the year. Spain has more than 200,000 people with type 1 diabetes, a high rate of CGM adoption, and one of the lowest levels of AID penetration in our European markets. And in the second half of this year, we plan to launch Libre 3 Plus in Germany and Canada, allowing us to bring Omnipod 5 to new populations as Libre 2 Plus is not available with a pump in either of these markets. Critically, our rapidly growing scale internationally continues to drive operating leverage and significant margin expansion. Our strategy to deepen our penetration in our largest and most established markets is working, and our execution continues to exceed expectations. We continue to see the AID category expand globally. While our success is attracting competition, this further validates and raises awareness of AID and Omnipod, the most recognized brand in the category. We believe this dynamic is good for the category and good for Insulet. We are uniquely positioned to meet that worldwide demand at scale, and we are investing in accelerating innovation, strengthening our commercial capabilities, developing our markets, building a world-class team, and scaling our global operations to ensure we continue to benefit disproportionately from category growth. Let me unpack these priorities further. Innovation remains the core driver of our growth strategy. beginning with this year's launch of our second generation algorithm, coupled with our Libre 3 Plus sensor integration and the broader rollout of Omnipod Discover, our new data insights platform. First, let me walk through the specific improvements behind the meaningful Omnipod 5 algorithm enhancements we're launching this quarter. In our simulated analysis, switching the target glucose setting from 120 milligrams per deciliter to our new 100 milligrams per deciliter option delivered an approximately 5% improvement in time and range. This is better performance through a simple setting change with no added user burden. Additionally, we improved the algorithm performance so it now increases the amount of time users spend in automated mode with fewer interruptions during extended high glucose events. This has been a pain point for prescribers and potters. We are pairing these two launches with an increased focus on clinical education to ensure prescribers understand the strong clinical efficacy and safety profile of Omnipod 5. Algorithm innovation will continue to be a key R&D focus. In fact, we are increasing investments this year to advance our next generation of products. We are making strong progress on our sixth generation Omnipod paired with our third generation algorithm, which is planned to launch in 2027. We are sharing data from STRIVE, our Omnipod 6 pivotal study at ADA in June, which will demonstrate continued improvement in automation and clinical outcomes. This gives us confidence in the durability of our market leadership. Next up is our transformative approach to unlock the type 2 diabetes segment. We are making progress on what we believe will be the first of its kind truly fully closed loop system for people with type 2 diabetes. We encouraged by the results from our feasibility study that we presented at ATTD, which highlighted 68% time and range with no boluses. And I'm very pleased to share that just last week we enrolled our first participant in Evolve, our pivotal study to support FDA filing next year and launch in 2028. These new product investments are designed to help us deliver better outcomes, enhance the user experience, and unlock new market segments, accelerating the shift to simpler, more intuitive insulin delivery and extending our leadership. We also recognize that as this category grows, innovation alone is not enough. And we are investing in building a top-notch team and commercial capabilities to expand the AID market, fortify our competitive position, and drive rapid adoption. As part of that effort, we recently appointed Mike Panos as Chief Commercial Officer to lead our global commercial organization. Mike brings a proven track record of building and scaling world-class sales teams, driving market expansion, and delivering sustained double-digit growth across leadership categories. Our investments in our brand are also delivering unique commercial value. We have the most recognized brand in the category, which continues to bring in new users and generate traction with prescribers that our sales force doesn't actively target. We regularly activate our number one brand to increase category and brand awareness. And this quarter, Omnipod's feature appearance on the TV show Scrubs was a resounding success at raising awareness and amplifying representation. After the show, our inboxes were flooded with stories about how meaningful and moving it is to see people with diabetes show up like this, living their lives daily with ease. These moments also drive action like Michelle, who has type one diabetes and reached out to one of our support specialists online after watching the episode. Michelle had a script for Omnipod written three years ago, but never moved forward. With this nudge, we successfully reengaged her and got her started on Omnipod. Market development remains a top priority. In addition to the progress on market-specific initiatives that I highlighted earlier, we are seeing strong traction with our global KOL engagement and professional education efforts. We doubled the size of our US peer-to-peer education program in 2025 and expanded it by more than 50% year-over-year this quarter. In Spain, we are investing in key opinion leader education well ahead of the advance to accelerate adoption. As I mentioned earlier, our efforts to improve access, secure new coverage, and strengthen our value to payers are yielding tangible benefits to our growth and sustaining our market-leading U.S. coverage of over 90%. These efforts also support the maintenance of our preferred position in the pharmacy channel amid increasing competitive activity, which validates the value of our pioneering pharmacy pay-as-you-go model. Notably, based on the pricing activity we have seen in this channel to date, we continue to expect rational and disciplined pricing and rebate behavior. We remain focused on educating payers on the clinical and economic value of Omnipod to ensure broad, high quality access in all markets. Finally, scaling global manufacturing and operations continues to be a priority. We remain focused on quality, reliability, and customer safety. Our team rapidly responded to execute the voluntary medical device correction in March and implemented targeted fixes for the applicable manufacturing process. Manufacturing disposable sophisticated electromechanical devices at consumer scale and medical quality is a complex process. We continue to believe that our ability to meet the unique manufacturing demands of tubeless AID remains a source of strategic and financial advantage. We have market-leading growth margins driven by our ongoing manufacturing productivity improvements. We continue to ramp our capacity and automation investments in Acton, Malaysia, and Costa Rica to support future growth. In summary, we are executing on each pillar of our strategy, accelerating innovation, developing our markets, strengthening commercial capabilities building a world-class team, and scaling global growth profitably. Omnipod continues to be the market leader and the disproportionate driver of AID category growth in the US and abroad. Our investments are focused on extending our leadership by deepening differentiation across our platform while continuing to lighten the burden for people living with diabetes. Our strong results this quarter are testament to the strength of our position our execution, and our attractive recurring revenue business model. I remain confident in our outlook for the year, our strategic path forward, and our ability to deliver sustained profitable growth for shareholders and better outcomes for all of our potters. With that, I'll turn the call over to Flavia.