The paragraph introduces the Insulet Corporation's Fourth Quarter and Full Year 2024 Earnings Call. The call, which is in listen-only mode, includes a question-and-answer session later. June Lazaroff, Senior Director of Investor Relations, introduces key speakers Jim Hollingshead, President and CEO, and Ana Maria Chadwick, CFO and Treasurer. The call's replay, press release, and 2025 guidance are available on the company's Investor Relations website, alongside supplemental earnings information. The call includes forward-looking statements with inherent limitations, discussed in SEC filings, and covers non-GAAP financial measures used by management for assessing operating performance, deemed helpful for others.

The paragraph discusses Insulet's successful financial performance and growth, highlighting that 2024 marked the ninth consecutive year of achieving over 20% constant currency revenue growth, with revenue exceeding $2 billion for the first time. The company has expanded its Omnipod 5 product to both type 1 and type 2 diabetes patients in the U.S. and internationally. Insulet achieved significant milestones, including doubling its revenue in three years and increasing new customer starts both sequentially and year-over-year. The company now has an estimated 500,000 global customers, with 365,000 using Omnipod 5, underscoring strong customer retention and a promising outlook for future growth.

The paragraph highlights the successful adoption and strategic initiatives of the Omnipod 5 platform as the company heads into 2025, showcasing confidence in their growth plans across U.S. and international markets. Three key strategic focus areas are outlined: enhancing the Omnipod 5 through continuous innovation with smartphone and sensor compatibility, driving U.S. growth for type 1 and type 2 diabetics, and expanding international access. The launch of the Omnipod 5 iOS app in the U.S., integrated with the G6 sensor, has been well-received, leading to 25% of U.S. users switching to iPhone. The company is set to launch integration with the G7 sensor early in the year and has introduced compatibility with Abbott's FreeStyle Libre 2 Plus. Currently, over 90% of U.S. and 30% of international customers use Omnipod 5.

The paragraph highlights key achievements and future developments for Omnipod 5, a tubeless automated insulin delivery system. Since its U.S. launch in mid-2022 and expansion to four international markets by the end of 2024, Omnipod 5 has driven significant revenue growth. The company introduces Omnipod Discover, a digital platform for healthcare providers and patients to collaborate on data management and treatment optimization. Clinical successes include the publication of the SECURE-T2D manuscript supporting type 2 diabetes use and ongoing trials like the RADIANT, STRIVE, and EVOLUTION studies, aimed at enhancing algorithms and advancing diabetes management technologies.

The paragraph discusses Insulet's strategic focus on expanding its presence in the U.S. diabetes market, particularly for type 2 diabetes. The company highlights its success with Omnipod 5, which received FDA clearance for type 2 diabetes and now represents over 30% of new U.S. customer starts. This expansion has significantly increased Insulet's total addressable market to over 5.5 million people requiring insulin, including 2.5 million on multiple daily injections and an underpenetrated market of 3 million using basal-only insulin therapy. Insulet is leveraging its commercialization strategies and expanding its sales force to enhance product reach and market awareness.

The company is expanding its sales force to increase its reach to over 40% of the 2.5 million insulin-intensive type 2 diabetes population by 2025. They have filled the majority of the new sales roles, with training expected to be complete by the end of the first quarter. The fourth quarter saw a 20% increase in healthcare providers prescribing Omnipod therapy for type 2 patients and a boost in direct-to-consumer leads, transitioning many to Omnipod 5. International expansion is progressing well, with the recent launch of Omnipod 5 in several European countries, including the U.K., Germany, France, and the Nordics. The company plans further expansion and sensor integration, starting with the G7 launch in the U.K. and Netherlands, offering more options for diabetes management.

The paragraph highlights the achievements of Insulet over the past year, emphasizing their leadership in the diabetes industry with their Omnipod 5 technology. They have successfully shifted many patients to AID technology and seen significant growth in healthcare professionals prescribing Omnipod 5. With over two decades of experience, Insulet has developed a unique and hard-to-replicate patch pump product that is widely accessible and affordable. They are the only insulin pump with Medicare Part D reimbursement, offering low or no co-pays for many customers. The limited release of Omnipod Discover is enhancing their data-driven approach to improving customer experience and outcomes. The company celebrates its 25th anniversary by acknowledging the contributions of its global team and their mission to improve the lives of people with diabetes.

The paragraph announces that Insulet will host an Investor Day at their Acton, Massachusetts headquarters on June 5, with further details to follow. Ana Chadwick then discusses Insulet's successful financial performance, highlighting a 22% revenue growth to $2.1 billion in 2024, marking their ninth consecutive year of at least 20% growth. She reports strong U.S. and international growth, impressive gross and operating margins, and stable global utilization and retention trends. With 500,000 active global Omnipod customers, Insulet also achieved 17% revenue growth in Q4, surpassing guidance with strong U.S. and international market demand, especially for Omnipod 5.

In the fourth quarter of 2023, the company experienced significant financial dynamics, with stocking activities estimated at $30-40 million impacting the fourth quarter of 2024 growth rate by 1,100 basis points. U.S. revenue growth was primarily driven by increased volume and an expanding customer base. The Omnipod 5 platform is being extended, contributing to customer growth, and the FDA clearance for type 2 diabetes products promoted further growth. Internationally, the company achieved 33.1% revenue growth, mainly due to strong demand and the adoption of Omnipod 5 in markets like the U.K., Germany, France, and the Netherlands, with further European expansion planned. The Drug Delivery division also saw a 34.1% revenue increase due to higher partner orders. Overall, the company reported significant gross margin expansion, reaching 72.1%, largely driven by U.S. performance.

The paragraph discusses a company's financial performance and future outlook. It highlights strong operating and adjusted EBITDA margins, despite a decrease from the previous year. The company released a $17 million valuation allowance for tax benefits and reported non-GAAP tax rates for the fourth quarter and full year. It ended the year with substantial cash reserves and free cash flow, indicating a strong financial position. Looking ahead to 2025, the company expects significant revenue growth driven by the Omnipod 5 adoption and related technology. Revenue guidance is provided on a constant currency basis for U.S. Omnipod and total company revenue.

The company anticipates year-over-year growth in new customer starts and U.S. revenue with stable pricing, utilization, and retention trends in 2025. International Omnipod revenue is expected to grow by 22% to 26%, with a 300 basis point foreign currency impact. Growth in the U.K. and Germany will be driven by upgrades from Omnipod DASH to Omnipod 5. France, the Netherlands, Italy, and the Nordics are expected to contribute to growth. Volume will primarily drive international revenue growth, with a modest pricing benefit and stable usage trends. The Drug Delivery segment is projected to decline by 45% to 55%. The company expects a gross margin of about 70.5%, reflecting scale and efficiency improvements, particularly from its Malaysia facility, although international operations may offset some margin benefits. Tariffs are not expected to impact the business significantly.

The company is pleased with its strong U.S. manufacturing presence, complemented by sites in China and Malaysia, with a resilient supply chain strategy. They aim for an operating margin of approximately 16.5% in 2024, focusing on expanding margins while investing in R&D and sales and marketing, particularly for type 2 and type 1 markets. Growth catalysts and margin expansion opportunities are anticipated for 2025. A fluctuating margin pattern is expected, with lower margins in the first half and improvements in the second half of the year. The effective tax rate for 2025 is projected to be 20% to 25%, with slightly higher capital expenditures compared to 2024 to support expansion. The company predicts continued positive free cash flow and improved cash position through organic growth. For the first quarter of 2025, the company forecasts revenue growth of 22% to 25%, with U.S. Omnipod expected to grow by 21% to 24%.

The company is seeing strong growth in its U.S. and International Omnipod sales, with adjusted U.S. growth in the mid-to-high teens and International growth expected at 28% to 31%. Despite an unfavorable foreign exchange impact, the company remains optimistic about the future. They plan to continue leading in insulin delivery through innovation, investment, and differentiation, aiming for gross and operating margin expansion and improved profitability. They also express confidence in their long-term value creation and anticipation for their Investor Day in June. During the Q&A session, JPMorgan's Robbie Marcus inquires about growth in type 2 patients, estimating significant growth year-over-year and quarter-over-quarter, although specific numbers are not disclosed.

The paragraph discusses the positive market response following the launch of a product and obtaining a label in August, particularly for type 2 diabetes management with Omnipod DASH and Omnipod 5. Type 2 diabetes has become a significant part of new customer starts, accounting for 30%, alongside growth in type 1. Although the specific growth rates are not disclosed, Jim Hollingshead expresses optimism for 2025, citing an increase in prescribers for type 2, a sales force expansion, and new call points, aiming to reach more type 2 patients. The product's label-first market advantage is seen as a key growth driver. Additionally, Jeffrey Johnson notes enthusiasm among thought leaders and key opinion leaders (KOLs) for using advanced integrated diabetes (AID) technology for insulin-treated type 2 patients.

The paragraph discusses the positive reception and growing adoption of the Omnipod 5 Automated Insulin Delivery (AID) system among healthcare providers and patients with type 2 diabetes. Jim Hollingshead notes that both patients and physicians are finding the system easy to use, with many patients preferring to continue its use after initial trials. The market for insulin pump therapy in type 2 diabetes is still developing, as it has not traditionally been used, but increasing awareness and education are driving its acceptance. The American Diabetes Association has updated its guidelines to recommend AID therapy for type 2 patients on intensive insulin therapy, further supporting its adoption.

The paragraph features a discussion about a company's growth strategy and financial guidance. Ana Chadwick confirms that their Q1 U.S. guidance, excluding a destocking event, shows a growth projection in the mid- to high teens percentage range. This aligns with their full-year guidance of 16% to 20% growth, considering seasonal variations between Q4 and Q1. Jim Hollingshead mentions that their ongoing sales force expansion, where 75% of new hires are already made, is part of the growth strategy. The expansion involves increasing sales territories and representatives, which impacts their growth projection by ensuring that these reps are in place and trained promptly.

In the paragraph, Issie Kirby asks about early adoption of pump therapy among type 2 diabetes patients and the marketing strategy for reaching direct-to-consumer leads. Jim Hollingshead responds that there isn't a clear pattern yet in which type 2 patients are adopting the Omnipod 5 pump, although there is strong adoption in both endocrinology and primary care settings. He notes that it may be more popular among those using intensive insulin therapies. The direct-to-consumer marketing strategy is effective due to the Omnipod 5's ease of use and training, offering a competitive edge over other pump products.

The paragraph discusses the success of Omnipod 5, especially after it gained approval for use by type 2 diabetes patients, allowing the company to connect these patients with appropriate physicians. This change has improved the efficiency of their direct-to-consumer (DTC) strategy and increased their reach to physician practices. The conversation then shifts to the international market, emphasizing the advantages of Omnipod 5, such as its discreet, wearable design and effectiveness in glycemic control, which contribute to its widespread adoption and success globally, particularly in European markets.

The paragraph discusses the wide range of sensor options available for patients, specifically highlighting the integration and rollout of the G7 sensor in the U.K. and Netherlands. It mentions the shift of some users from Omnipod DASH to Omnipod 5 and notes that many current pump users are bound by contracts. Importantly, Omnipod 5 is gaining traction among patients who previously avoided pumps due to perceived difficulty, thereby expanding the market. The rollout in various countries, including the U.K., Germany, France, and the Netherlands, is reportedly successful. The paragraph also briefly mentions the Omnipod Discover platform, which is in an early limited market release phase, with positive feedback and utilization trends expected to continue this year.

The paragraph discusses the positive response and high Net Promoter Scores for the Omnipod Discover platform from both physicians and patients. It highlights the platform's cloud-based accessibility, which allows patients to monitor their insulin usage and provides tips and tricks, enhancing their therapy experience. Physicians can access their patients' data, facilitating improved communication and streamlined reporting. This functionality is expected to improve patient care, streamline workflows, and increase market retention and share. The paragraph concludes with a transition to a question from Larry Biegelsen about type 2 diabetes patient statistics related to new platform starts.

In the paragraph, Jim Hollingshead responds to questions about the growth prospects of Omnipod 5 in the type 1 and type 2 diabetes markets. He emphasizes the company's strategic focus on expanding both markets, highlighting that Omnipod 5 is a platform product suitable for insulin users with either type 1 or type 2 diabetes. Hollingshead notes the larger potential of the type 2 market, which is 3.5 times the size of the type 1 market, and mentions that only about 40% of the type 1 market is currently penetrated. He expresses confidence in growing beyond a 30% mix and stresses their commitment to advancing R&D investments. The operator then introduces Marie Thibault from BTIG, who has questions about margin guidance and investment in R&D.

The paragraph discusses a strong increase in gross and operating margins in Q4, highlighting sustainable dynamics. Ana Chadwick expresses excitement about achieving a 160 basis point margin expansion by 2025, with a focus on investing in R&D and sales and marketing, particularly in type 2 and international markets. They plan to leverage general and administrative expenses, aiming for a 16.5% margin. This strategy is expected to expand profitability and generate free cash flow for self-investment. In response to a question from Mike Kratky about the competitive landscape in type 2 for 2025, Jim Hollingshead emphasizes the first-mover advantage of Omnipod 5, noting competitors must demonstrate their own clinical data and clearances, while Omnipod 5 has inherent advantages.

The Omnipod 5, which was the third product to enter the market for Automated Insulin Delivery (AID) in type 1 diabetes, has outperformed its competitors and has consistently drawn more people off Multiple Daily Injections (MDI) than all competitors combined. This trend continued throughout 2024. In type 2 diabetes, despite the complexity of patients' health, Omnipod 5 has been easy to use, as demonstrated by the SECURE-T2D study, giving the company confidence in their market position. In response to a question about 2025 guidance, Jim Hollingshead emphasized the company's strategic goal to grow in both type 1 and type 2 markets, noting significant potential in type 1 and their leading position as first to market in type 2. However, specific growth forecasts for type 1 and type 2 have not been shared.

In the paragraph, Jim Hollingshead addresses concerns about competition and pricing in the pharmacy channel by highlighting the company's advantages. He explains that the company has extensive experience in the pharmacy channel, having started work in the 2010s and signed its first contract in 2017. This has led to 95% coverage of lives with pharmacy benefits. They also offer the only insulin delivery and AID therapy with Part D reimbursement, which provides a competitive edge. The company maintains strong relationships and beneficial contracts with PBMs due to significant volume sales through the pharmacy channel, enhancing its market position.

The paragraph discusses a company's confidence in its competitive position, highlighting the challenges competitors face in entering the pharmacy channel, particularly with durable pumps. The company feels it has strong advantages ("moats") in this area. During a Q&A, Phil from Piper Sandler questions why the company is projecting 18% growth for U.S. Omnipod, which is lower than last year, despite positive factors like type 2 iOS Libre integration. Ana Chadwick responds that the company expects growth to be driven by volume and clarifies that the beginning of the year saw some price benefits that won't persist, creating a headwind. She assures that growth will accelerate as the year progresses.

The paragraph discusses the company's performance and future outlook, noting that nearly all of its volume was processed through pharmacies by the third quarter. The company expresses excitement about its guidance, targeting a high growth rate of 16% to 20%. Jim Hollingshead mentions their strong track record of achieving goals, with the company maintaining a nine-year streak of over 20% growth. Chris Pasquale from Nephron Research inquires about margin guidance, noting that the 2024 gross margin would be just below 70.5% without a one-time charge. Ana Chadwick responds by expressing pride in reaching a 72% gross margin in the fourth quarter and guiding to 70.5%, attributing success to pricing tailwinds and an industry-leading achievement, while planning for moderate growth.

The paragraph discusses the growth strategy and challenges faced by the company regarding its Omnipod product. A primary headwind is the lower international pricing compared to the U.S., which affects gross margins as international growth outpaces U.S. growth. However, they plan to offset this with manufacturing improvements at their Malaysia facility by late 2025. Joanne Wuensch from Citi poses a question about the priority for revenue growth: U.S. type 2 diabetes adoption or international opportunities. Jim Hollingshead responds that both markets have significant growth potential, and the company strategically focuses on leveraging the entire platform without prioritizing a specific geography.

The paragraph is part of a conference call where Jim Hollingshead expresses excitement about providing more detailed updates during the Investor Day event scheduled for June 5 in Acton. He thanks the global Insulet team for their dedication and highlights the achievements made in 2024. Hollingshead looks forward to expanding their patient reach and business growth in 2025 and beyond. The operator concludes the session, thanking participants and signaling the end of the call.

This summary was generated with AI and may contain some inaccuracies.