Raising Full Year Revenue, Gross Margin and
Operating Margin Guidance
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, 2024.
Second Quarter Financial Highlights:
- Second quarter 2024 revenue of $488.5 million, up 23.2%, or
23.4% in constant currency1, compared to $396.5 million in the
prior year, exceeds the high end of the Company's guidance range of
18% in constant currency due to revenue outperformance for all
product lines
- Total Omnipod revenue of $480.4 million, an increase of 26.3%,
or 26.5% in constant currency
- U.S. Omnipod revenue of $352.3 million, an increase of
27.3%
- International Omnipod revenue of $128.1 million, an increase of
23.5%, or 24.4% in constant currency
- Drug Delivery revenue of $8.1 million, a decrease of $7.9
million.
- Gross margin of 67.7%, up 90 basis points, compared to gross
margin of 66.8% in the prior year. Gross margin for the current
period includes a charge of $13.5 million relating to certain
inventory components which the Company expects will not be
utilized. This charge negatively impacted gross margin by 280 basis
points
- Operating income of $54.6 million, or 11.2% of revenue, up 340
basis points, compared to operating income of $31.1 million, or
7.8% of revenue, in the prior year. Operating income for the
current period includes the $13.5 million charge noted above, which
negatively impacted operating margin by 280 basis points
- Net income of $188.6 million, or $2.59 per diluted share,
compared to net income of $27.3 million, or $0.39 per diluted
share, in the prior year. Adjusted net income1 of $38.3 million, or
$0.55 per diluted share, excludes $151.7 million of income
resulting from the release of the majority of the Company’s
valuation allowance and a $1.4 million loss associated with an
investment
- Adjusted EBITDA1 of $90.8 million, or 18.6% of revenue, up 310
basis points, compared to $61.3 million, or 15.5% of revenue, in
the prior year
Recent Strategic Highlights:
- U.S. commercial launches:
- Full market release of Omnipod 5 integrated with Dexcom’s G7
sensor
- Limited market release of the Omnipod 5 App for iPhone
- International commercial launches:
- Full market releases of Omnipod 5 integrated with Dexcom’s G6
sensor in the Netherlands and France (also available in the U.K.
and Germany)
- Full market releases of Omnipod 5 with Abbott’s Freestyle Libre
2 Plus sensor in the U.K. and Netherlands; now offering “Sensor of
Choice” in these regions
- Presented data at the American Diabetes Association (ADA)
Scientific Session from the Company’s SECURE-T2D pivotal trial, the
largest, longest and most racially diverse study of AID conducted
in people with type 2 diabetes. The data demonstrate Omnipod 5
improves clinical outcomes and quality of life in people with type
2 diabetes
- Submitted 510(k) to the FDA for Omnipod 5 type 2 diabetes label
expansion2
- Began producing sellable product at the Company’s new
manufacturing facility in Malaysia
“2024 is shaping up to be another year of rapid growth, fueled
by strong Omnipod 5 demand and our accelerating pace of product
innovation,” said Jim Hollingshead, President and Chief Executive
Officer. “Omnipod 5 continues to disrupt the diabetes landscape in
every market in which it is offered, and we are thrilled to have
expanded the Omnipod 5 platform globally with multiple integrations
and product launches. We remain the clear leader in our industry,
and in light of our first half results and our confidence in
delivering an even stronger second half, we have increased our full
year guidance for revenue, gross margin and operating margin. We
are poised for continued profitable growth, while successfully
advancing our mission to simplify and improve the lives of people
with diabetes.”
___________________________
1 See description of non-GAAP financial
measures contained in this release.
2 The Omnipod 5 Automated Insulin Delivery System is not indicated
for use for people with type 2 diabetes. CAUTION: Investigational
device. Limited by Federal law to investigational use.
2024 Outlook:
Revenue Guidance (in constant
currency):
- For the year ending December 31, 2024, the Company is raising
its expected revenue growth to a range of 16% to 19% (previously
14% to 18%). Revenue growth ranges by product line are:
- Total Omnipod of 18% to 21% (previously 15% to 19%)
- U.S. Omnipod of 18% to 21% (previously 17% to 21%)
- International Omnipod of 18% to 21% (previously 12% to
15%)
- Drug Delivery of (50)% to (40)% (previously (60)% to
(50)%)
- For the quarter ending September 30, 2024, the Company expects
revenue growth of 18% to 21%. Revenue growth ranges by product line
are:
- Total Omnipod of 21% to 24%
- U.S. Omnipod of 21% to 24%
- International Omnipod of 21% to 24%
- Drug Delivery of (70)% to (65)% (approximately $3 million to $4
million)
Gross Margin and Operating Margin
Guidance:
For the year ending December 31, 2024, the Company now expects
to be closer to the high-end of the gross margin range of 68% to
69% (previously closer to the mid-point).
For the year ending December 31, 2024, the Company is raising
its expected operating margin to approximately 14.0% (previously
approximately 13.5%).
Conference Call:
Insulet will host a conference call at 4:30 p.m. (Eastern Time)
on August 8, 2024 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, is a tubeless automated insulin delivery system,
integrated with a continuous glucose monitor to manage blood sugar
with no multiple daily injections, zero fingersticks, and can be
fully controlled by a compatible personal smartphone in the U.S. or
by 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 exclude the impact of certain significant
transactions or events, such as legal settlements, medical device
corrections, gains (losses) on investments 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 plus net interest
expense, income tax expense, depreciation and amortization,
stock-based compensation expense and other significant transactions
or events, such as legal settlements, medical device corrections,
gains (losses) on investments 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 our
dependence on a principal product platform; the impact of
competitive products, technological change and product innovation;
our ability to maintain an effective sales force and expand our
distribution network; our ability to maintain and grow our customer
base; our ability to scale the business to support revenue growth;
our ability to secure and retain adequate coverage or reimbursement
from third-party payors; the impact of healthcare reform laws; our
ability to design, develop, manufacture and commercialize future
products; 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; our ability to protect
intellectual property and other proprietary rights; potential
conflicts with the intellectual property of third parties; our
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 our current product
and/or commercialize future products; worldwide macroeconomic and
geopolitical uncertainty as well as risks associated with public
health crises and pandemics, including government actions and
restrictive measures implemented in response, supply chain
disruptions, delays in clinical trials, and other impacts to the
business, our customers, suppliers, and employees; international
business risks, including regulatory, commercial and logistics
risks; the potential violation of anti-bribery/anti-corruption
laws; the concentration of manufacturing operations and storage of
inventory in a limited number of locations; supply problems or
price fluctuations with sole source or third-party suppliers on
which we are dependent; failure to retain key suppliers or other
manufacturing issues; challenges to the future development of our
non-insulin drug delivery product line; failure of our contract
manufacturer or component suppliers to comply with the U.S. Food
and Drug Administration’s quality system regulations; 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 current or future Omnipod
products; potential adverse impacts resulting from a recall,
discovery of serious safety issues, or product liability lawsuits
relating to off-label use; breaches or failures of our product or
information technology systems, including by cyberattack; 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 our
indebtedness or raise additional funds on acceptable terms or at
all; the volatility of the trading price of our common stock; risks
related to the conversion of outstanding Convertible Senior Notes;
and potential limitations on our ability to use our net operating
loss carryforwards.
For a further list and description of these and other important
risks and uncertainties that may affect our future operations, see
Part I, Item 1A - Risk Factors in our most recent Annual Report on
Form 10-K filed with the Securities and Exchange Commission, which
we may update in Part II, Item 1A - Risk Factors in Quarterly
Reports on Form 10-Q we have 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.
©2024 Insulet Corporation. Omnipod is a registered trademark of
Insulet Corporation. All rights reserved. All other trademarks are
the property of their respective owners.
INSULET CORPORATION
CONDENSED CONSOLIDATED
STATEMENTS OF INCOME (UNAUDITED)
Three Months Ended June
30,
Six Months Ended June
30,
(dollars in millions, except per share
data)
2024
2023
2024
2023
Revenue
$
488.5
$
396.5
$
930.2
$
754.6
Cost of revenue
157.6
131.6
292.5
249.2
Gross profit
330.9
264.9
637.7
505.4
Research and development expenses
53.9
55.1
104.1
105.2
Selling, general and administrative
expenses
222.4
178.7
422.1
341.4
Operating income
54.6
31.1
111.5
58.8
Interest expense, net
(1.7)
(2.4)
(3.0)
(5.3)
Other expense, net
(1.8)
(0.2)
(2.5)
(0.4)
Income before income taxes
51.1
28.5
106.0
53.1
Income tax benefit (expense)
137.5
(1.2)
134.1
(2.0)
Net income
$
188.6
$
27.3
$
240.1
$
51.1
Earnings per share:
Basic
$
2.69
$
0.39
$
3.43
$
0.73
Diluted
$
2.59
$
0.39
$
3.32
$
0.73
Weighted-average number of common
shares outstanding (in thousands):
Basic
70,062
69,741
70,010
69,662
Diluted
73,802
70,142
73,771
70,119
RECONCILIATION OF DILUTED NET
INCOME (UNAUDITED)
Three Months Ended June
30,
Six Months Ended June
30,
(in millions, except share and per
share data)
2024
2023
2024
2023
Net income
$
188.6
$
27.3
$
240.1
$
51.1
Add back interest expense, net of tax
attributable to assumed conversion of convertible senior notes
2.5
—
4.9
—
Net income, diluted
$
191.1
$
27.3
$
245.0
$
51.1
INSULET CORPORATION
CONDENSED CONSOLIDATED BALANCE
SHEETS (UNAUDITED)
(dollars in millions)
June 30, 2024
December 31, 2023
ASSETS
Cash and cash equivalents
$
821.0
$
704.2
Accounts receivable, net
348.6
359.7
Inventories
430.9
402.6
Prepaid expenses and other current
assets
148.3
116.4
Total current assets
1,748.8
1,582.9
Property, plant and equipment, net
677.9
664.9
Goodwill and other intangible assets,
net
150.2
150.4
Deferred tax assets
141.1
1.8
Other assets
163.6
188.2
Total assets
$
2,881.6
$
2,588.2
LIABILITIES AND STOCKHOLDERS’
EQUITY
Accounts payable
$
76.8
$
19.2
Accrued expenses and other current
liabilities
371.3
382.6
Current portion of long-term debt
37.9
49.4
Total current liabilities
486.0
451.2
Long-term debt, net
1,359.9
1,366.4
Other liabilities
37.3
37.9
Total liabilities
1,883.2
1,855.5
Stockholders’ equity
998.4
732.7
Total liabilities and stockholders’
equity
$
2,881.6
$
2,588.2
INSULET CORPORATION
NON-GAAP RECONCILIATIONS
(UNAUDITED)
CONSTANT CURRENCY REVENUE
GROWTH
Three Months Ended June
30,
(dollars in millions)
2024
2023
Percent Change
Currency Impact
Constant Currency
Revenue:
U.S. Omnipod
$
352.3
$
276.8
27.3 %
— %
27.3 %
International Omnipod
128.1
103.7
23.5 %
(0.9) %
24.4 %
Total Omnipod
480.4
380.5
26.3 %
(0.2) %
26.5 %
Drug Delivery
8.1
16.0
(49.4) %
— %
(49.4) %
Total
$
488.5
$
396.5
23.2 %
(0.2) %
23.4 %
Six Months Ended June
30,
(dollars in millions)
2024
2023
Percent Change
Currency Impact
Constant Currency
Revenue:
U.S. Omnipod
$
670.0
$
535.8
25.0 %
— %
25.0 %
International Omnipod
243.4
202.3
20.3 %
0.6 %
19.7 %
Total Omnipod
913.4
738.1
23.8 %
0.2 %
23.6 %
Drug Delivery
16.8
16.5
1.8 %
— %
1.8 %
Total
$
930.2
$
754.6
23.3 %
0.2 %
23.1 %
INSULET CORPORATION
NON-GAAP RECONCILIATIONS
(UNAUDITED)
ADJUSTED GROSS MARGIN,
OPERATING MARGIN, NET INCOME, DILUTED EPS
Three Months Ended June 30,
2024
(dollars in millions)
Income before Income
Taxes
Net Income(3)
Net Income, Diluted
Diluted Earnings (Loss) per
Share
GAAP
$
51.1
$
188.6
$
191.1
$
2.59
Unrealized loss on investments(1)
1.8
1.4
1.4
$
0.02
Tax matters(2)
—
(151.7)
(151.7)
$
(2.06)
Non-GAAP
$
52.9
$
38.3
$
40.8
$
0.55
Six Months Ended June 30,
2024
(dollars in millions)
Income before Income
Taxes
Net Income(3)
Net Income, Diluted
Diluted Earnings (Loss) per
Share
GAAP
$
106.0
$
240.1
$
245.0
$
3.32
Unrealized loss on investments(1)
1.8
1.4
1.4
$
0.02
Tax matters(2)
—
(158.3)
(158.3)
$
(2.15)
Non-GAAP
$
107.8
$
83.2
$
88.1
$
1.19
Three Months Ended June 30,
2023
(dollars in millions)
Gross Profit
Percent of Revenue
Operating Income
Percent of Revenue
Income before Income
Taxes
Net Income(3)
Diluted Earnings (Loss) per
Share
GAAP
$
264.9
66.8 %
$
31.1
7.8 %
$
28.5
$
27.3
$
0.39
Voluntary MDCs(4)
(0.8)
(0.8)
(0.8)
(0.8)
$
(0.01)
Non-GAAP
$
264.1
66.6 %
$
30.3
7.6 %
$
27.7
$
26.5
$
0.38
Six Months Ended June 30,
2023
(dollars in millions)
Gross Profit
Percent of Revenue
Operating Income
Percent of Revenue
Income before Income
Taxes
Net Income(3)
Diluted Earnings (Loss) per
Share
GAAP
$
505.4
67.0 %
$
58.8
7.8 %
$
53.1
$
51.1
$
0.73
Voluntary MDCs(4)
(8.8)
(8.8)
(8.8)
(8.8)
$
(0.12)
Non-GAAP
$
496.6
65.8 %
$
50.0
6.6 %
$
44.3
$
42.3
$
0.60
(1) Represents non-operating loss
resulting from the fair value adjustment of a strategic debt
investment.
(2) Includes the tax benefit of $146.9
million and $153.5 million for the three and six months ended June
30, 2024, respectively, resulting from the release of the majority
of the Company’s income tax valuation allowance. Both periods also
include a $4.8 million tax benefit related to a research and
development tax credit recovery project for tax years 2017 through
2021.
(3) The tax effect on non-GAAP adjustments
is calculated based on the applicable local statutory tax rates,
including the impact of any valuation allowance.
(4) Represents income resulting from an
adjustment to estimated costs associated with the voluntary medical
device correction (“MDC”) notices issued in the fourth quarter of
2022, which is included in cost of revenue.
INSULET CORPORATION
NON-GAAP RECONCILIATIONS
(UNAUDITED) (CONTINUED)
ADJUSTED EBITDA
Three Months Ended June
30,
Six Months Ended June
30,
(dollars in millions)
2024
Percent of Revenue
2023
Percent of Revenue
2024
Percent of Revenue
2023
Percent of Revenue
Net income
$
188.6
38.6 %
$
27.3
6.9 %
$
240.1
25.8 %
$
51.1
6.8 %
Interest expense, net
1.7
2.4
3.0
5.3
Income tax (benefit) expense
(137.5)
1.2
(134.1)
2.0
Depreciation and amortization
19.2
18.1
38.0
35.3
Stock-based compensation expense
17.0
13.1
31.2
25.2
Voluntary MDCs(1)
—
(0.8)
—
(8.8)
Unrealized loss on investments(2)
1.8
—
1.8
—
Adjusted EBITDA
$
90.8
18.6 %
$
61.3
15.5 %
$
180.0
19.4 %
$
110.1
14.6 %
(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) Represents non-operating loss
resulting from the fair value adjustment a of strategic debt
investment.
INSULET CORPORATION
NON-GAAP RECONCILIATIONS
(UNAUDITED) CONTINUED
REVENUE GUIDANCE
Year Ending December 31,
2024
Revenue Growth
GAAP
Currency Impact
Constant Currency
U.S. Omnipod
18% - 21%
—%
18% - 21%
International Omnipod
18% - 21%
—%
18% - 21%
Total Omnipod
18% - 21%
—%
18% - 21%
Drug Delivery
(50)% - (40)%
—%
(50)% - (40)%
Total
16% - 19%
—%
16% - 19%
Three Months Ended September
30, 2024
Revenue Growth
GAAP
Currency Impact
Constant Currency
U.S. Omnipod
21% - 24%
—%
21% - 24%
International Omnipod
20% - 23%
(1)%
21% - 24%
Total Omnipod
21% - 24%
—%
21% - 24%
Drug Delivery
(70)% - (65)%
—%
(70)% - (65)%
Total
18% - 21%
—%
18% - 21%
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240808840738/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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