Executive Summary / Key Takeaways

• Insulet, the leader in tubeless insulin pump technology with its Omnipod platform, is driving robust growth and expanding profitability by converting individuals from multiple daily injections (MDI) in both Type 1 and Type 2 diabetes markets globally.
• The highly differentiated Omnipod 5 system, with its wearable, disposable patch pump design, ease of use, and expanding sensor and smartphone compatibility, provides a significant competitive moat and fuels strong customer adoption and retention.
• Recent financial results demonstrate accelerating momentum, with Q1 2025 revenue growing 28.8% year-over-year and gross margin expanding to 71.9%, driven by volume, manufacturing efficiencies, and international pricing.
• Management has raised full-year 2025 guidance, projecting total Omnipod revenue growth of 20-23% and total company growth of 19-22%, alongside continued operating margin expansion to approximately 16.5%, reflecting confidence in ongoing execution and strategic investments.
• Key catalysts for future growth include the continued ramp of Omnipod 5 in the U.S. Type 2 market, accelerating international launches, and further platform innovation, while key risks include competitive responses, supply chain stability, and potential tariff impacts.

The Tubeless Revolution: Insulet's Differentiated Approach to Diabetes Management

Insulet Corporation is at the forefront of revolutionizing insulin delivery for people with diabetes through its proprietary Omnipod platform. At its core, Insulet's mission is to simplify and improve the lives of individuals managing insulin-dependent diabetes, moving beyond the traditional burden of multiple daily injections (MDI) or cumbersome tubed pumps. The company's flagship product, Omnipod 5, represents the culmination of decades of innovation, offering a discreet, wearable, and disposable patch pump that delivers continuous insulin therapy. This tubeless design is a fundamental differentiator in the market, providing unparalleled freedom, convenience, and ease of use compared to conventional pump systems.

The Omnipod 5 system is an advanced automated insulin delivery (AID) solution that integrates seamlessly with continuous glucose monitors (CGMs) from leading partners like Dexcom (DXCM) and Abbott (ABT). Its SmartAdjust™ technology automatically adjusts insulin delivery based on CGM readings, aiming to improve glycemic control and reduce the burden of manual management. The system can be controlled directly from a compatible personal smartphone or a dedicated controller, offering flexibility and discretion. This technological edge translates into tangible benefits for users: clinical trials and real-world evidence have demonstrated significant improvements in time-in-range, A1C reduction, and psychosocial outcomes. For instance, the pivotal SECURE-T2D trial showed Omnipod 5 delivered an average A1C reduction of 0.8 in Type 2 patients, with even greater benefits for those with higher baseline A1cs, and importantly, without increasing hypoglycemia risk. Feedback from users consistently highlights the "life-changing," "freedom," and "normalcy" that the tubeless, automated system provides.

Insulet's strategic focus is built upon this differentiated technology. The company aims to sustain profitable growth by expanding its customer base, primarily by converting the vast population of individuals still on MDI therapy. This focus on market expansion, rather than solely competing for existing pump users, has been a key driver of Insulet's success. The company has consistently brought more patients off MDI onto AID therapy than all its competitors combined, a trend that continued through 2024 and into 2025.

The competitive landscape in diabetes technology is dynamic, featuring large diversified players like Medtronic (MDT) and specialized pump and CGM providers like Tandem Diabetes Care (TNDM) and Dexcom. While competitors offer tubed pump systems and integrated AID solutions, Insulet's tubeless form factor stands out. This unique design, coupled with a pay-as-you-go pricing model and widespread access through the U.S. pharmacy channel, creates significant competitive moats. Insulet has invested over a multiyear journey to build deep infrastructure and relationships within the pharmacy channel, resulting in nearly 100% of its U.S. pods being sold this way by Q3 2024. This provides a distinct advantage over competitors whose durable pump models are less suited to this channel and Part D reimbursement. While competitors like MDT may boast larger scale and broader global distribution, and TNDM may focus on specific interoperability features, Insulet's focus on ease of use, discretion, and pharmacy access resonates strongly with patients, particularly those transitioning from MDI. The company's IP portfolio, recently strengthened by a favorable legal judgment and permanent injunction against EOFlow Co., Ltd. in April 2025 for trade secret misappropriation, further protects its technological lead.

Insulet's commitment to innovation extends beyond the core Omnipod 5 system. The company is actively pursuing a "cascade of innovation," including expanding sensor compatibility (Dexcom G7, Abbott FreeStyle Libre 2 Plus) and developing smartphone control apps (iOS with G6, G7). The Omnipod 5 iOS app, launched in the U.S. in late 2024 and fully compatible with G7 in June 2025, has seen rapid adoption, with over 40% of eligible U.S. users switching to the app by Q1 2025. R&D efforts are also focused on future algorithm enhancements (STRIVE study) and fully closed-loop systems (EVOLUTION studies), aiming to further improve glycemic outcomes and simplify management. The U.S. limited market release of Omnipod Discover, a digital platform leveraging data from cloud-connected users to enhance patient and clinician experience, represents an emerging data-driven moat.

Accelerating Momentum and Expanding Horizons

Insulet's strategic execution and technological advantages are clearly reflected in its recent financial performance. The company has achieved a remarkable track record, including nine consecutive years of 20% or more constant currency revenue growth, surpassing $1 billion in revenue in 2021 and over $2 billion in 2024. This momentum continued into the first quarter of 2025, with total revenue reaching $569.0 million, a substantial 28.8% increase year-over-year (29.8% constant currency).

The growth was broad-based across the core Omnipod segments. U.S. Omnipod revenue grew 26.4% to $401.7 million, primarily driven by higher sales volume from the expanding customer base. International Omnipod revenue saw even stronger growth, increasing 32.2% (36.1% constant currency) to $152.4 million, fueled by higher volumes from recent Omnipod 5 launches and a favorable impact from the higher average selling price of Omnipod 5 compared to older models. The smaller Drug Delivery segment also saw a significant increase in Q1 2025 revenue, up 71.3% to $14.9 million, due to increased orders from its partner.

Profitability metrics also demonstrated meaningful expansion. Gross margin in Q1 2025 reached 71.9%, a 240 basis point improvement over the prior year, primarily driven by improved manufacturing and supply chain efficiencies and increased volume. Operating expenses increased as the company invested in growth, with R&D up 18.7% and SG&A up 30.5%, reflecting headcount additions for product development, customer support, sales, and international expansion, as well as increased advertising. Despite these investments, operating income rose significantly to $88.8 million, demonstrating operating leverage. Net income in Q1 2025 was $35.4 million, impacted by a $39.5 million loss on extinguishment of debt related to the repurchase of convertible notes.

The effective tax rate in Q1 2025 was 26.4%, higher than the prior year due to non-deductible charges from the debt repurchase, partially offset by stock-based compensation tax benefits. Adjusted EBITDA grew to $133.9 million, up from $89.2 million in Q1 2024.

Liquidity remains strong, with cash and cash equivalents totaling $1,283.1 million at March 31, 2025. The company actively managed its capital structure in Q1 2025, issuing $450.0 million in senior unsecured notes and using proceeds, along with cash on hand and capped call settlements, to repurchase $420.0 million principal amount of its convertible senior notes.

The revolving credit facility was also upsized and extended. These actions enhance financial flexibility and lower the cost of capital, positioning Insulet to fund its growth initiatives, including expected slightly higher capital expenditures in 2025 for manufacturing expansion and global support.

A key strategic catalyst is the expansion into the U.S. Type 2 diabetes market, following FDA clearance for Omnipod 5 in August 2024. This market represents a significant opportunity, estimated to include 2.5 million insulin-intensive MDI users (less than 5% penetrated) and 3 million basal-only users (barely penetrated). Insulet is the first to market with an AID system indicated for Type 2, and early results are promising, with Type 2 users representing over 30% of U.S. new customer starts in Q1 2025. The company is expanding its U.S. sales force to increase reach into this population, aiming to cover over 40% of the insulin-intensive Type 2 market in 2025. The strategic decision to prioritize Omnipod 5 over the Omnipod GO pilot product for Type 2 simplifies the offering and leverages the strengths of the flagship platform.

International expansion is also accelerating. Following successful launches in the U.K. and Germany, Omnipod 5 rolled out in France and the Netherlands in 2024 and in nine additional countries in early 2025, bringing the total to 13 international markets. Further launches, including in the Middle East, are planned. International growth is expected to continue to be strong, driven by new customer starts and conversions to Omnipod 5, which commands a higher average selling price.

Outlook and Risks

Management's confidence in the business trajectory is reflected in the raised full-year 2025 guidance. Total Omnipod revenue growth is now projected at 20-23% (up from 17-21%), and total company revenue growth at 19-22% (up from 16-20%). U.S. Omnipod growth is guided to 18-21%, driven by continued Omnipod 5 adoption in Type 1 and the ramp in Type 2. International Omnipod growth is expected to be even stronger at 27-30%, fueled by new launches and conversions.

Profitability is also expected to improve. Full-year 2025 gross margin is guided to approximately 71% (up from 70.5%), reflecting anticipated benefits from manufacturing efficiencies, volume, and international pricing, partially offset by estimated tariff impacts (approximately 50 basis points). Adjusted operating margin is reaffirmed at approximately 16.5%, representing 160 basis points of expansion over 2024, as the company continues to drive operational leverage while investing in R&D and SG&A. Management expects operating margins to be higher in the second half of the year. The non-GAAP tax rate is expected to be in the 20-25% range.

While the outlook is positive, investors should consider potential risks. Competitive responses, particularly as rivals seek to enter the Type 2 AID market or enhance their own offerings, could impact market share or pricing. Supply chain disruptions, concentration of manufacturing, and potential tariff changes (especially if the medical device exemption is removed) could affect costs and margins. Regulatory hurdles, intellectual property challenges, and the ability to successfully execute multiple product launches and international expansions simultaneously also pose risks. The company's ability to attract and retain key personnel is crucial for sustaining its growth and innovation pace. Macroeconomic and geopolitical uncertainties could also influence market demand and operational stability.

Conclusion

Insulet is executing a compelling growth story driven by its highly differentiated Omnipod platform. The tubeless, wearable design provides a significant competitive advantage, fueling strong adoption among MDI users and positioning the company as a leader in the rapidly expanding AID market. Recent financial performance underscores this momentum, with robust revenue growth and expanding profitability. The strategic focus on the U.S. Type 2 market, accelerating international expansion, and a continuous cascade of innovation provide clear catalysts for future growth. While competitive dynamics and operational risks warrant monitoring, Insulet's strong financial position, proven execution capabilities, and commitment to improving the lives of people with diabetes through innovative technology suggest a positive trajectory for sustained profitable growth. The raised 2025 guidance reflects management's confidence in their ability to capture the significant opportunities ahead.