Insulet Corporation (NASDAQ: PODD) (Insulet or the Company), the
global leader in tubeless insulin pump technology with its Omnipod®
brand of products, today announced financial results for the three
months ended June 30, 2023.
Second Quarter Financial Highlights:
- Second quarter 2023 revenue of $396.5 million, up 32.4%, or
32.2% in constant currency1, compared to $299.4 million in the
prior year
- Total Omnipod revenue of $380.5 million, an increase of 33.2%,
or 33.0% in constant currency
- U.S. Omnipod revenue of $276.8 million, an increase of
40.9%
- International Omnipod revenue of $103.7 million, an increase of
16.0%, or 15.5% in constant currency
- Drug Delivery revenue of $16.0 million, an increase of
17.6%
- Gross margin of 66.8%, up 320 basis points. Adjusted gross
margin1 of 66.6% excludes income of $0.8 million associated with
the voluntary medical device correction (MDC) notices issued in
2022
- Operating income of $31.1 million, or 7.8% of revenue, compared
to operating loss of $26.7 million, or (8.9)% of revenue, in the
prior year. Adjusted operating income1 of $30.3 million, or 7.6% of
revenue, excludes income of $0.8 million noted above. Adjusted
operating income in the prior year of $4.0 million, or 1.3% of
revenue, excludes $30.7 million of certain litigation and legal
costs and costs associated with retirement and advisory services of
the former chief executive officer
- Net income of $27.3 million, or $0.39 per diluted share,
compared to net loss of $35.0 million, or $(0.50) per diluted
share, in the prior year. Adjusted net income1 of $26.5 million, or
$0.38 per diluted share, excludes income of $0.8 million noted
above. Adjusted net loss in the prior year of $4.3 million, or
$(0.06) per diluted share, excludes costs of $30.7 million noted
above
- Adjusted EBITDA1 of $61.3 million, or 15.5% of revenue,
compared to $27.6 million, or 9.2% of revenue, in the prior
year
Recent Strategic Highlights:
- Commercially launched Omnipod 5 in the United Kingdom, our
first international Omnipod 5 launch
- Submitted the Omnipod 5 iOS App for the iPhone to the FDA for
510(k) clearance
- Achieved record U.S. and Total Omnipod new customer starts
- Presented additional real-world evidence for Omnipod 5 at the
American Diabetes Association Scientific Sessions demonstrating
improved outcomes for children, adolescents and adults with type 1
diabetes and, for the first time, adults with type 2 diabetes
“Our second quarter achievements demonstrate the strength and
value of our pioneering offerings and dedicated team,” said Jim
Hollingshead, President and Chief Executive Officer. “Omnipod 5
continues to disrupt the diabetes market in the U.S. and has
received a fantastic market response internationally with its
commercial launch in the UK. We are also very well-positioned in
the type 2 market, which is currently driven by Omnipod DASH and
soon to be joined by Omnipod GO and ultimately Omnipod 5. We
continue to deliver on our mission to improve the lives of people
with diabetes, and we are just getting started.”
_______________________________
1 See description of non-GAAP financial
measures contained in this release.
2023 Outlook:
Revenue Guidance (in constant
currency):
- For the year ending December 31, 2023, the Company is raising
its expected revenue growth of 22% to 25% (previously 18% to 22%).
Revenue growth ranges by product line are:
- Total Omnipod of 25% to 28% (previously 21% to 25%)
- U.S. Omnipod of 33% to 36% (previously 27% to 31%)
- International Omnipod of 7% to 10% (previously 6% to 10%)
- Drug Delivery of (50)% to (45)% (previously (55)% to
(45)%)
- For the quarter ending September 30, 2023, the Company expects
revenue growth of 18% to 21%. Revenue growth ranges by product line
are:
- Total Omnipod of 20% to 23%
- U.S. Omnipod of 27% to 30%
- International Omnipod of 2% to 5%
- Drug Delivery of (30)% to (25)%
Gross Margin and Operating Margin
Guidance:
For the year ending December 31, 2023, the Company is
reaffirming its expected gross margin of 65% to 66%, excluding
income of $8.8 million (approximately 50 basis points) associated
with the voluntary MDCs issued in 2022.
For the year ending December 31, 2023, the Company expects
operating margin of high-single digits, closer to the high-end of
the range, excluding income of $8.8 million noted above.
Conference Call:
Insulet will host a conference call at 4:30 p.m. (Eastern Time)
on August 8, 2023 to discuss the financial results and outlook. The
link to the live call will be available on the Investor Relations
section of the Company’s website at investors.insulet.com, “Events
and Presentations,” and will be archived for future reference. The
live call may also be accessed by dialing (888) 770-7129 for
domestic callers or (929) 203-2109 for international callers,
passcode 5904836.
About Insulet Corporation:
Insulet Corporation (NASDAQ: PODD), headquartered in
Massachusetts, is an innovative medical device company dedicated to
simplifying life for people with diabetes and other conditions
through its Omnipod product platform. The Omnipod Insulin
Management System provides a unique alternative to traditional
insulin delivery methods. With its simple, wearable design, the
tubeless disposable Pod provides up to three days of non-stop
insulin delivery, without the need to see or handle a needle.
Insulet’s flagship innovation, the Omnipod® 5 Automated Insulin
Delivery System, integrates with a continuous glucose monitor to
manage blood sugar with no multiple daily injections, zero
fingersticks, and can be controlled by a compatible personal
smartphone or the Omnipod 5 Controller. Insulet also leverages the
unique design of its Pod by tailoring its Omnipod technology
platform for the delivery of non-insulin subcutaneous drugs across
other therapeutic areas. For more information, please visit:
insulet.com and omnipod.com.
Non-GAAP Measures:
The Company uses the following non-GAAP financial measures:
- Constant currency revenue growth, which represents the change
in revenue between current and prior year periods using the
exchange rate in effect during the applicable prior year period.
Insulet presents constant currency revenue growth because
management believes it provides meaningful information regarding
the Company’s results on a consistent and comparable basis.
Management uses this non-GAAP financial measure, in addition to
financial measures in accordance with generally accepted accounting
principles in the United States (GAAP), to evaluate the Company’s
operating results. It is also one of the performance metrics that
determines management incentive compensation.
- Adjusted gross margin, adjusted gross margin as a percentage of
revenue, adjusted operating income, adjusted operating income as a
percentage of revenue, adjusted net income, and adjusted diluted
earnings per share, all of which exclude the impact of certain
significant transactions or events, such as legal settlements,
medical device corrections and loss on extinguishment of debt, that
affect the period-to-period comparability of the Company’s
performance, as applicable.
- Adjusted EBITDA, which represents net income (loss) plus net
interest expense, income tax expense (benefit), depreciation and
amortization, stock-based compensation expense and other
significant transactions or events, such as legal settlements,
medical device corrections and loss on extinguishment of debt, that
affect the period-to-period comparability of the Company’s
performance, as applicable, and adjusted EBITDA as a percentage of
revenue.
Insulet presents the above non-GAAP financial measures because
management uses them as supplemental measures in assessing the
Company’s performance, and the Company believes they are helpful to
investors and other interested parties as measures of comparative
performance from period to period. They also are commonly used
measures in determining business value, and the Company uses them
internally to report results.
These non-GAAP financial measures should be considered
supplemental to, and not a substitute for, the Company’s reported
financial results prepared in accordance with GAAP. Furthermore,
the Company’s definition of these non-GAAP measures may differ from
similarly titled measures used by others. Because non-GAAP
financial measures exclude the effect of items that will increase
or decrease the Company’s reported results of operations, Insulet
strongly encourages investors to review the Company’s consolidated
financial statements and publicly filed reports in their
entirety.
Forward-Looking Statement:
This press release contains forward-looking statements
regarding, among other things, future operating and financial
performance, product success and efficacy, the outcome of studies
and trials and the approval of products by regulatory bodies. These
forward-looking statements are based on management’s current
beliefs, assumptions and estimates and are not intended to be a
guarantee of future events or performance. If management’s
underlying assumptions turn out to be incorrect, or if certain
risks or uncertainties materialize, actual results could vary
materially from the expectations and projections expressed or
implied by the forward-looking statements.
Risks and uncertainties include, but are not limited to adverse
changes in general economic conditions as well as risks associated
with public health crises and pandemics, government actions and
restrictive measures implemented in response, supply chain
disruptions, delays in clinical trials, and other impacts to the
business, customers, suppliers, and employees; dependence on a
principal product platform; ability to maintain and grow the
Company’s customer base; ability to scale the business to support
revenue growth, maintain an effective sales force and expand
distribution network; ability to secure and retain adequate
coverage or reimbursement from third-party payors; impact of
healthcare reform laws; impact of competitive products,
technological change and product innovation; ability to design,
develop, manufacture and commercialize future products; inability
to maintain or enter into new license or other agreements with
respect to continuous glucose monitors, data management systems or
other rights necessary to sell current product and/or commercialize
future products; challenges to the future development of the
Company’s non-insulin drug delivery product line; international
business risks, including regulatory, commercial and logistics
risks; supply problems or price fluctuations with sole source or
third-party suppliers on which the Company is dependent; failure to
retain key suppliers; ability to protect intellectual property and
other proprietary rights and potential conflicts with the
intellectual property of third parties; extensive government
regulation applicable to medical devices as well as complex and
evolving privacy and data protection laws; adverse regulatory or
legal actions relating to the Omnipod System or future products;
failure of the Company’s contract manufacturer or component
suppliers to comply with the U.S. Food and Drug Administration’s
quality system regulations; potential adverse impacts resulting
from a recall, or discovery of serious safety issues, or product
liability lawsuits relating to off-label use; the potential
violation of anti-bribery/anti-corruption laws; breaches or
failures of the Company’s product or information technology
systems, including by cyberattack; unfavorable results of clinical
studies, including issues with third parties conducting any
studies, or future publication of articles or announcement of
positions by diabetes associations or other organizations that are
unfavorable; the concentration of manufacturing operations and
storage of inventory in a limited number of locations; loss of
employees or inability to identify and recruit new employees; risks
associated with potential future acquisitions or investments in new
businesses; ability to generate sufficient cash to service
indebtedness or raise additional funds on acceptable terms or at
all; the volatility of the trading price of the Company’s common
stock; risks related to the conversion of outstanding Convertible
Senior Notes; and potential limitations on the Company’s ability to
use net operating loss carryforwards.
For a further list and description of these and other important
risks and uncertainties that may affect the Company’s future
operations, see Part I, Item 1A - Risk Factors in the most recent
Annual Report on Form 10-K filed with the Securities and Exchange
Commission, which the Company may update in Part II, Item 1A - Risk
Factors in Quarterly Reports on Form 10-Q the Company has filed or
will file hereafter. Any forward-looking statement made in this
release speaks only as of the date of this release. Insulet does
not undertake to update any forward-looking statement, other than
as required by law.
©2023 Insulet Corporation. Omnipod,
Omnipod DASH, Omnipod GO and Omnipod 5 are registered trademarks of
Insulet Corporation.
INSULET CORPORATION
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS (UNAUDITED)
Three Months Ended June
30,
Six Months Ended June
30,
(dollars in millions, except per share
data)
2023
2022
2023
2022
Revenue
$
396.5
$
299.4
$
754.6
$
594.8
Cost of revenue
131.6
109.1
249.2
194.8
Gross profit
264.9
190.3
505.4
400.0
Research and development expenses
55.1
42.6
105.2
85.7
Selling, general and administrative
expenses
178.7
174.4
341.4
303.1
Operating income (loss)
31.1
(26.7
)
58.8
11.2
Interest expense, net
(2.4
)
(8.3
)
(5.3
)
(17.2
)
Other expense, net
(0.2
)
(1.1
)
(0.4
)
(0.8
)
Income (loss) before income
taxes
28.5
(36.1
)
53.1
(6.8
)
Income tax (expense) benefit
(1.2
)
1.1
(2.0
)
(0.4
)
Net income (loss)
$
27.3
$
(35.0
)
$
51.1
$
(7.2
)
Net income (loss) per share:
Basic
$
0.39
$
(0.50
)
$
0.73
$
(0.10
)
Diluted
$
0.39
$
(0.50
)
$
0.73
$
(0.10
)
Weighted-average number of common
shares outstanding (in thousands):
Basic
69,741
69,356
69,662
69,305
Diluted
70,142
69,356
70,119
69,305
INSULET CORPORATION
CONDENSED CONSOLIDATED BALANCE
SHEETS (UNAUDITED)
(dollars in millions)
June 30, 2023
December 31, 2022
ASSETS
Cash and cash equivalents
$
660.1
$
674.7
Accounts receivable, net
250.5
205.6
Inventories
411.3
346.8
Prepaid expenses and other current
assets
99.6
86.9
Total current assets
1,421.5
1,314.0
Property, plant and equipment, net
601.5
599.9
Goodwill and other intangible assets,
net
151.2
127.2
Other assets
211.6
210.0
Total assets
$
2,385.8
$
2,251.1
LIABILITIES AND STOCKHOLDERS’
EQUITY
Accounts payable
$
107.5
$
30.8
Accrued expenses and other current
liabilities
288.3
306.4
Current portion of long-term debt
29.2
27.5
Total current liabilities
425.0
364.7
Long-term debt, net
1,368.6
1,374.3
Other liabilities
38.3
35.7
Total liabilities
1,831.9
1,774.7
Stockholders’ equity
553.9
476.4
Total liabilities and stockholders’
equity
$
2,385.8
$
2,251.1
INSULET CORPORATION
NON-GAAP RECONCILIATIONS
(UNAUDITED)
CONSTANT CURRENCY REVENUE
GROWTH
Three Months Ended June
30,
(dollars in millions)
2023
2022
Percent Change
Currency Impact
Constant Currency
Revenue:
U.S. Omnipod
$
276.8
$
196.4
40.9
%
—
%
40.9
%
International Omnipod
103.7
89.4
16.0
%
0.5
%
15.5
%
Total Omnipod
380.5
285.8
33.2
%
0.2
%
33.0
%
Drug Delivery
16.0
13.6
17.6
%
—
%
17.6
%
Total
$
396.5
$
299.4
32.4
%
0.2
%
32.2
%
Six Months Ended June
30,
(dollars in millions)
2023
2022
Percent Change
Currency Impact
Constant Currency
Revenue:
U.S. Omnipod
$
535.8
$
370.5
44.6
%
—
%
44.6
%
International Omnipod
202.3
184.8
9.5
%
(3.0
)%
12.5
%
Total Omnipod
738.1
555.3
32.9
%
(1.0
)%
33.9
%
Drug Delivery
16.5
39.5
(58.2
)%
—
%
(58.2
)%
Total
$
754.6
$
594.8
26.9
%
(0.9
)%
27.8
%
INSULET CORPORATION
NON-GAAP RECONCILIATIONS
(UNAUDITED)
ADJUSTED GROSS MARGIN,
OPERATING MARGIN, NET INCOME, DILUTED EPS
Three Months Ended June 30,
2023
(in millions)
Gross Profit
Percent of Revenue
Operating Income
Percent of Revenue
Net Income(4)
Diluted Earnings (Loss) per
Share
GAAP
$
264.9
66.8
%
$
31.1
7.8
%
$
27.3
$
0.39
Voluntary medical device
corrections(1)
(0.8
)
(0.8
)
(0.8
)
(0.01
)
Non-GAAP
$
264.1
66.6
%
$
30.3
7.6
%
$
26.5
$
0.38
Six Months Ended June 30,
2023
(in millions)
Gross Profit
Percent of Revenue
Operating Income
Percent of Revenue
Net Income(4)
Diluted Earnings (Loss) per
Share
GAAP
$
505.4
67.0
%
$
58.8
7.8
%
$
51.1
$
0.73
Voluntary medical device
corrections(1)
(8.8
)
(8.8
)
(8.8
)
(0.12
)
Non-GAAP
$
496.6
65.8
%
$
50.0
6.6
%
$
42.3
$
0.60
Three Months Ended June 30,
2022
(dollars in millions)
Operating (Loss)
Income
Percent of Revenue
Net Loss(4)
Diluted (Loss) Earnings per
Share
GAAP
$
(26.7
)
(8.9
)%
$
(35.0
)
$
(0.50
)
Legal costs(2)
27.3
27.3
0.39
CEO transition costs(3)
3.4
3.4
0.05
Non-GAAP
$
4.0
1.3
%
$
(4.3
)
$
(0.06
)
Six Months Ended June 30,
2022
(dollars in millions)
Operating Income
Percent of Revenue
Net (Loss) Income(4)
Diluted (Loss) Earnings per
Share
GAAP
$
11.2
1.9
%
$
(7.2
)
$
(0.10
)
Legal costs(2)
27.3
27.3
0.39
CEO transition costs(3)
3.4
3.4
0.05
Non-GAAP
$
41.9
7.0
%
$
23.5
$
0.34
ADJUSTED EBITDA
Three Months Ended June
30,
Six Months Ended June
30,
(dollars in millions)
2023
Percent of Revenue
2022
Percent of Revenue
2023
Percent of Revenue
2022
Percent of Revenue
Net income (loss)
$
27.3
6.9
%
$
(35.0
)
(11.7
)%
$
51.1
6.8
%
$
(7.2
)
(1.2
)%
Interest expense, net
2.4
8.3
5.3
17.2
Income tax expense
1.2
(1.1
)
2.0
0.4
Depreciation and amortization
18.1
15.8
35.3
31.1
Stock-based compensation expense
13.1
8.9
25.2
18.4
Voluntary medical device correction(1)
(0.8
)
—
(8.8
)
—
Legal costs(2)
—
27.3
—
27.3
CEO transition costs(3)
—
3.4
—
3.4
Adjusted EBITDA
$
61.3
15.5
%
$
27.6
9.2
%
$
110.1
14.6
%
$
90.6
15.2
%
(1)
Represents income resulting from an
adjustment to estimated costs associated with the voluntary MDC
notices issued in the fourth quarter of 2022, which is included in
cost of revenue.
(2)
Includes a $20.0 million charge in the
second quarter of 2022 to settle patent infringement litigation
with Roche Diabetes Care, Inc., associated legal fees, and an
estimated liability to settle a contract dispute.
(3)
Represents costs in the second quarter of
2022 associated with the retirement and advisory services of the
former chief executive officer, including $2.3 million of
accelerated stock-based compensation expense.
(4)
The tax effect on non-GAAP adjustments is
calculated based on the applicable local statutory tax rates,
including any valuation allowance.
INSULET CORPORATION
NON-GAAP RECONCILIATIONS
CONTINUED (UNAUDITED)
REVENUE GUIDANCE
Year Ending December 31,
2023
Revenue Growth
GAAP
Currency Impact
Constant Currency
U.S. Omnipod
33% - 36%
—%
33% - 36%
International Omnipod
10% - 13%
3%
7% - 10%
Total Omnipod
26% - 29%
1%
25% - 28%
Drug Delivery
(50)% - (45)%
—%
(50)% - (45)%
Total
23% - 26%
1%
22% - 25%
Three Months Ended September
30, 2023
Revenue Growth
GAAP
Currency Impact
Constant Currency
U.S. Omnipod
27% - 30%
—%
27% - 30%
International Omnipod
10% - 13%
8%
2% - 5%
Total Omnipod
22% - 25%
2%
20% - 23%
Drug Delivery
(30)% - (25)%
—%
(30)% - (25)%
Total
20% - 23%
2%
18% - 21%
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230808973433/en/
Investor Relations:
Deborah R. Gordon Vice President, Investor Relations (978)
600-7717 dgordon@insulet.com
Media:
Angela Geryak Wiczek Senior Director, Corporate Communications
(978) 932-0611 awiczek@insulet.com
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