Insulet Corp. (PODD) Q3 2026 Earnings Call Transcript

Operator: Good morning, and welcome to the Insulet Corporation Third Quarter 2026 Earnings Call. As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Clare Trachtman. Vice president, investor relations. Please go ahead.

Clare Trachtman: Good morning. And welcome to our third quarter 2026 earnings call. Joining me today are Ashley A. McEvoy, President and Chief Executive Officer; and Flavia H. Pease, Chief Financial Officer. On the call this morning, we will be discussing Insulet's third quarter results along with our financial outlook for the fourth quarter and full year 2026. With that, let me start our prepared remarks by reminding everyone that certain statements including comments regarding our financial outlook, the anticipated impact of our strategic actions, the potential impact of various regulatory and operational matters, and the macroeconomic environment on our results of operations, contain forward looking statements that involve risks and uncertainties. And, of course, our actual results could differ materially from our current expectations. Please refer to today's press release and our SEC filings for more detail concerning factors. That could cause actual results to differ materially. In addition, on today's call, non GAAP financial measures will be used to help investors understand Insulet's ongoing business performance including adjusted operating income, adjusted EPS, adjusted tax rate, and constant currency revenue. Which is revenue growth excluding the effect of foreign exchange. A reconciliation of certain non GAAP financial measures being discussed today to the comparable GAAP financial measures is included in the accompanying investor presentation and 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 and I will be available to address any questions. Now I would like to turn the call over to Ashley. Ashley?

Ashley A. McEvoy: Good morning, everyone, and thanks for joining us to discuss our third quarter results. Our teams delivered a strong quarter with U. S. Performance in our guidance range, and international performance that exceeded our plans. As we near the end of the year, we have narrowed our total company full year outlook to the top end of our prior range to reflect this strength. Throughout the quarter, we continued advancing our strategic priorities, strengthening our commercial capabilities and execution, accelerating innovation, and expanding the category by increasing access and building relationships with prescribers Importantly, we made progress against the type 2 action plan we laid out on our quarter 2 call. We are pleased with our progress in the quarter, and I wanna take a step back and provide some broader perspective. Insulet has a strong leadership position in 1 of the largest fastest growing, and most underpenetrated segments in med tech. We are actively extending our leadership in automated insulin delivery, and are confident that Omnipod will continue winning a leading share of MDI converts to AID. Providing the foundation for sustained top tier growth. We are clear eyed and confident about Insulin's near and long term prospects for growth and outsized value creation. Factoring in new competitive products entering the market as well as our own product pipeline. Let's jump into the details starting with our performance. In the third quarter, we achieved revenue of $842 million, up nearly 20% year over year. With approximately 15% growth in The US, and 33% growth internationally. Our increased revenue was supported by over 20% growth in our global customer base, compared to the prior year period. You may recall that we ended last year with more than 600 thousand global customers and we continue to drive a 20% plus growth rate versus year ago levels. This installed base provides a substantial recurring revenue foundation as well as a growing source of real world evidence and data. Globally, new customer starts grew low single digits. versus the year ago period. And year to date, new customer starts have grown low double digits. The majority of people with diabetes who convert from MDI to AID choose Omnipod. And over 85% of Omnipod new customer starts come from MDI. Demonstrating our success growing the category. There continues to be a large delta between CGM and AIDs across our markets. Despite ADA guidelines recommending AID as a standard of care. And we see a significant opportunity to grow the AID market and reduce the burden of diabetes for millions of people worldwide. New customer starts in Q3 were again balanced across type 1 and type 2 globally. With type 2 diabetes patients accounting for over 40% of US starts. We have not observed an impact from increased GLP 1 use on type 2 new starts. And we continue to view GLP ones as complementary to insulin. We delivered record gross margin and expanded operating margin in the quarter, reflecting Insulet's industry leading manufacturing capabilities and ongoing productivity improvements. At the same time, we continue to invest in the company's innovation pipeline, and commercial capabilities. As I mentioned, we have narrowed our full year revenue guidance to the top end of our prior range, reflecting third quarter results and our outlook for continued momentum in the fourth quarter. As we get closer to 2027, we are providing an updated perspective for next year. We expect the pace of innovation across the category to increase next year, including our launch of Omnipod 6. Which will accelerate market growth over time. At the same time, we expect the competitive environment to become more dynamic as new products come on the market. We plan to take a more conservative approach to our 2027 outlook. While we remain highly confident in Insulet's long term growth opportunities. Will walk through what this means in terms of our full year 2026 guidance range, and our updated perspective for 2027. Before I turn towards strategic priorities, I want to note the share repurchase we announced this morning. The board approved a $1 billion increase in our share repurchase authorization. The company expects to allocate $400 million toward repurchase in quarter 4 funded with cash on hand. These plans reflect our confidence in the strength of the Omnipod platform, our robust pipeline, and the company's long term trajectory Insulet has the balance sheet and cash flow to facilitate the repurchases while we continue investing in our future. Now let me turn to the progress we continue to make against our strategic priorities. Strengthening our commercial capabilities and execution, driving innovation, and expanding the category. First, commercial capabilities and execution. We are taking the right actions to build long term relationships with people with type 1 and type 2 diabetes. And the global health care providers who care for them. In Q3, we completed our second US sales force expansion in 2 years. Increasing our footprint by nearly 25% in this latest phase. Our field representatives also completed a new 4-month certification program. Preparing them to communicate the clinical and real world value of Omnipod more effectively. In August, we rolled out the company's first new CRM platform in more than a decade to our US sales team. Optimization is ongoing, and we continue to educate our team on how to make the most of these new capabilities. We expect the new platform to facilitate better targeting, more effective message delivery, faster decision making, and closer collaboration over time. Specific to type 2 diabetes, we have now put in place the action plan we shared with you all on the quarter 2 call. And we are pleased with our progress in improving the quality of starts, the onboarding experience, and the first 90 days of the customer journey. We adjusted our Salesforce compensation so it now adds a customer retention element. And refined our approach for deploying samples. We also continued to strengthen our customer care team by adding clinical specialists focused on retention. We have begun to see an improvement in our sampling program and onboarding, and saw type 2 retention rates improve modestly in the third quarter. We expect to see the impact of these initiatives continue to build over time. Consistent with our type 2 action plan as well as our strategic priority, to accelerate innovation that improves outcomes, We completed the full market release of Omnipod Discover in The US in October. Every day, our products make over 100 million automated dosing decisions and process over 850 million data messages. Giving us 1 of the largest real world diabetes datasets. This data enables Omnipod Discover our proprietary engagement platform, to deliver personalized insights and decision support to strengthen engagement, outcomes, and customer loyalty for people with diabetes and health care providers using Omnipod. During the Omnipod Discover limited market release, we saw stronger retention increased time and range, and 75% of our users reported feeling more confident managing their diabetes. In October, we began onboarding people with diabetes regardless of health care professional enrollment, and we have seen very strong engagement. As of this call, Discover has been adopted by more than 35 thousand users and 5 thousand clinicians. We are in the early innings of this platform, but believe Omnipod Discover will be another differentiator for Insulet as people seek more connected and self managed health solutions. Another recent advancement is our new algorithm enhancement. The most significant improvement to Omnipod 5 since its launch. Now in full retail across The US. The updated algorithm adds a new 100 milligrams per deciliter target and fewer automated delivery restriction alarms so users stay in automated mode longer. Real world evidence shows users achieve more time in range without a meaningful increase in lows. Reinforcing Omnipod 5's leadership in delivering strong outcomes with a simple, seamless experience. Robust algorithm innovation will continue to be an important focus. With an emphasis on helping more people address their needs in a differentiated manner. Our expansive real world diabetes dataset gives us a unique opportunity to continue building upon our industry leading position while improving outcomes for Omnipod users. We are excited about this flywheel of innovation and patient impact. And what it means for people with diabetes and all our stakeholders. In quarter 2, we expanded sensor choice through our US integration with Freestyle Libre 3+ And as of today, we have extended integration to 10 new markets. The iOS platform for Libre 3+ is underway. With US limited market release expected in quarter 4. Providing access to 450 thousand MDI users. Our teams are executing against this opportunity. At the same time, we are advancing our broader innovation road map including Omnipod 6 and Omnipod fully closed loop for type 2 diabetes. Omnipod 6 adapts to how you bolus with 40% fewer boluses. Adults and adolescents with type 1 diabetes spent 76% of time in range on Omnipod 6. We have submitted the second and final 510(k) for Omnipod 6 and we will continue to expect launch in 2027. We believe we are better prepared for the Omnipod 6 launch than we have been for any launch in our history from customer targeting, and marketing to manufacturing, international expansion. Our fully closed loop system for people with type 2 diabetes is a transformational opportunity to move additional MDI users onto AID. It offers people with type 2 diabetes a user friendly experience nearly identical to CGM. With no user boluses or settings required and training completed at home in less than 40 minutes. Last month at EASD, we highlighted the significance of this innovation with the evolution 3 feasibility study. Which demonstrated adults with type 2 diabetes using both a GLP 1 and CGM saw additional time and range benefits and had no user initiated boluses. We completed enrollment in the EVOLVE pivotal study and we will continue to target a 510(k) submission in 2027 with a planned launch in 2028. Our market leading innovation and R&D spend will drive significant future product differentiation. Now turning to our last strategic priority, expanding access and developing the category. In The US, we continue to extend our prescriber base this quarter with nearly 34 thousand health care providers now prescribing Omnipod. Up more than 20% year over year. Outside of The United States, we successfully launched in Spain which has 175 thousand people with type 1 diabetes, and 200 thousand people with type 2 diabetes on MDI. In The US, we have finalized 1 of our 3 PBM contracts for 2027, and expect to complete the remaining 2 in the next few weeks. Our goal is to maintain broad access to Omnipod and strengthen our leading position across the pharmacy channel. We have a broad based supply chain network across Acton, Malaysia, and in the coming years, Costa Rica, which provides us with the resiliency and capital efficiency to produce tens of millions of pods every year. Our execution against these strategic priorities position us to extend Insulet's leadership position in AID. Even with new products coming to market. And continue to deliver top tier revenue growth and value creation. Omnipod 5 captures the majority of new AID customers today, and AID is 1 of the largest, fastest growing, most underpenetrated segments in med tech. Over the past 5 years, Insulet has driven 2-thirds of global market growth, our SG&A is over half of category spend, and our R&D is nearly half of category spend. Across our markets, there is still a significant delta between AID and CGM penetration. Providing a meaningful opportunity for us to continue to grow the category. Based on our latest survey across 6 countries, Omnipod is the number 1 AID choice among providers, and people with diabetes. Awareness of Omnipod among people on MDI is now 67% in the US, 84% in the UK, and 74% in Canada. Up significantly in each market versus last year and well ahead of other AID brands. Across every market studied, lifestyle fit, and confidence in managing diabetes, ranked among the most important factors associated with patient's choice of AID. And these are the reasons people with diabetes choose Omnipod And it is not just our customers. Prescribers view Omnipod as the most differentiated AID on the market. And Omnipod continues to lead among US health care professionals on key measures preference, prescribing intent, satisfaction, trust, and brand affinity. We continue to strengthen prescriber perception of Omnipod across markets through professional education, clinical evidence, and innovation. At EASD, we presented our largest dataset of international real world data to date. Showing consistent time and range improvements across more than 384 thousand people with type 1 diabetes in 17 countries. And we are not slowing down. Our innovation pipeline is the strongest in the company's history, and provides a clear pathway for us to remain the AID of choice among new, and existing AID users. In addition to our unique form factor and highly differentiated customer experience, we have manufacturing and operating scale and unrivaled financial capacity, which provide durable competitive moats. We invested billions of dollars over decades to build our manufacturing capabilities and scale. Competitors will be producing a fraction of what we make, in their initial years on the market. We will also benefit from our well established market leading position. Insulet has the largest customer base the highest brand awareness, 1 of the largest datasets of real world diabetes evidence, and we are the number 1 most requested and number 1 most prescribed brand for people with diabetes. For all of these reasons, we are going to continue to get a disproportionate share of new starts. And studies show that once people with diabetes convert to an AID, they are unlikely to switch brands. The path forward is clear. We will continue to expand the AID market, and as the AID market grows, we grow. To close, our Q3 results reflect the strength of Insulet's model. We are enhancing the customer experience and onboarding journey, accelerating our innovation road map, and expanding the category. We have outstanding leaders across our company to drive this work. And the progress we have made in Q3 reinforces our confidence in the initiatives we have implemented. 2026 is expected to be our 11th year of 20%+ revenue growth. We are now preparing for Insulet's next chapter, led by the launch of Omnipod 6 and other meaningful innovations, which will again drive our company and category forward. In 2027, reflecting the timing of innovation, and our much larger revenue base, we expect our growth profile will moderate. it is a testament to the strength of our product and opportunity that we expect to still deliver top tier growth on a multibillion dollar revenue base and further expand profitability. We are entering the next phase of market evolution with the scale, customer experience, commercial and manufacturing capabilities, and innovation pipeline to remain differentiated. With that, I will turn the call over to Flavia to walk through the financials and guidance in more detail.

Flavia H. Pease: Thank you, Ashley, and good morning, everyone. The Insulet team delivered another strong quarter. With total revenue of $842 million an increase of 19.2% on a reported basis and 19.6% on a constant currency basis. Total company performance supported by customer base growth of more than 20%, low single digit growth in new customer starts, and stable pricing. We also saw a modest improvement in retention during the quarter, while utilization remained stable. Our strong top line performance combined with continued operating leverage, drove significant profitability gains. With adjusted gross margin expanding 200 basis points adjusted operating margin expanding 490 basis points, adjusted EPS increasing 60%. In The US, Omnipod revenue grew 14.7% during the quarter, driven by continued demand across both type 1 and type 2, with our customer base growing in the high teens and new customer starts flat compared to prior year. US pricing was down slightly in the quarter, but remained flat year to date, and we continue to expect positive pricing for the full year. International Omnipod revenue grew 31.7% on a reported basis, and 33% on a constant currency basis. Driven primarily by volume and we will continue favorable price mix realization. Results in the quarter reflected a 250-basis point benefit from reserve adjustments. Including approximately $3 million in France, related primarily to our clawback accrual and approximately $2 million in Canada related to reserve releases and updated program assumptions. Q3 adjusted gross margin was 74.2%, up 200 basis points year over year. Our continued gross margin expansion reflects the productivity gains we are realizing across our global operations. And the scale of our manufacturing model remains a significant competitive advantage. Turning to operating expenses. Within R&D, we continue to invest in our pipeline in support of the upcoming launch of Omnipod 6 in 2027, and advancing our fully closed loop for type 2 diabetes. As well as progressing on our next generation technologies and clinical programs. Within SG&A, year over year growth was driven primarily by our previously discussed US sales force expansion. As well as continued investments in market development and customer support. Including initiatives to strengthen the type 2 customer experience, and support adoption and retention. Importantly, we continue to balance these investments with disciplined expense management. Q3 adjusted operating margin was 22% up 490 basis points year over year, reflecting strong revenue growth and gross margin expansion, as well as benefits from lower annual employee bonus accruals. These results demonstrate the operating leverage in our model, and our ability to drive meaningful earnings growth while investing in innovation, commercial capabilities, and we will continue category growth. Q3 net interest expense was $12.1 million, and our adjusted tax rate was 20.2%. Adjusted EPS in the quarter was $1.99, up 60% from $1.24 in the prior year. Significantly outpacing revenue growth. Turning to cash and liquidity. During the quarter, we upsized our corporate revolver to $750 million and refinance our term loan b, reducing the rate by 25 basis points. We ended the quarter with $584 million in cash and investments, and the full $750 million available under our revolver. Year to date, we have generated $212 million of free cash flow reflecting investments in working capital, inventory, and manufacturing capacity to support growth. As Ashley mentioned, the Insulet Board of Directors has approved a $1 billion increase in our share repurchase program. The company plans to allocate $400 million toward repurchases in fourth quarter, which we expect to fund with excess cash. The strength of the company's cash generation gives us the flexibility to return capital to shareholders while maintaining our growth investments. Turning to our updated full year outlook, we have narrowed our revenue guidance to the high end of our prior range. And now expect full year constant currency revenue growth of 21% to 22% for total company and 21.5% to 22.5% for total Omnipod. Foreign exchange is expected to positively contribute approximately a 100-basis-point to Omnipod and total company growth. Our outlook reflects our third quarter performance and expectations for the balance of the year. While we saw encouraging indicators from the actions we took to strengthen onboarding and customer support in Q3, we are not assuming any additional benefit to our financial results for the remainder of the year. We are seeing early contributions from Omnipod Discover and our broader data and engagement capabilities. Which we believe will have a meaningful impact in 2027 and beyond. For The US, we now expect Omnipod revenue growth of 17.5% to 18.5% for the full year, which reflects year over year NCS growth positive pricing, and fourth quarter attrition and utilization remaining similar to Q3 levels. For international Omnipod, we now expect 2026 revenue growth of 32% to 33% on a constant currency basis. Reflecting strong performance year to date continued momentum across our markets, as well as a price mix benefit, which contributed high single digit to growth. Foreign exchange is expected to positively contribute approximately 300 basis points to international growth. Based on our full year guidance, would expect fourth quarter total company revenue growth of 13.5% to 17% and total Omnipod revenue growth of 13% to 16.5%. On a reported basis, foreign exchange is not expected to have a meaningful impact on either measure. In The US, we expect Omnipod revenue growth of 10% to 13.5%, and internationally, we expect Omnipod revenue growth of 21% to 24%. On a reported basis, foreign exchange is expected to be a headwind of approximately 50 basis points to international growth. Now turning to operating margin. Given our outperformance in the third quarter, we now expect to drive approximately 150 basis points of adjusted operating margin expansion in 2026. Driven by continued gross margin improvement and disciplined operating leverage. Below operating income, we expect net interest and other expense to total $40 million to $45 million and a non GAAP tax rate of 20% to 20.5%. We continue to expect approximately 70 million shares outstanding and adjusted EPS growth of more than 30%. For the full year. We expect free cash flow to be approximately $275 million in 2026, primarily reflecting higher capital expenditures and the impact of the MDCs working capital uses. These impacts are expected to be partially offset by strong earnings growth and margin expansion. Turning to 2027. We are still working through our annual planning process, and we will provide formal guidance on our fourth quarter call in February. But I want to share our latest thinking. We now expect 2027 total company growth to be modestly below the mid teens framework we had provided on our Q2 call. As we plan to take a more conservative approach to our outlook and also factor in a tougher comparison and less price mix benefit internationally. Our view of The US is broadly consistent with what we shared last quarter. We expect to guide toward the lower end of our prior framework. Reflecting a more measured assumption for market growth and the impact of new competition. Along with stable retention, pricing, and utilization, and limited contribution from our new product launches, and our expanded sales force. Internationally, our updated view reflects the tremendous year we are having which creates a more difficult comparison for 2027. As well as reduced benefit from price mix as more than 80% of our international customers who have converted to Omnipod 5. We will also anniversary several large country launches. We continue to see healthy underlying demand internationally, supported by robust growth in customer base. With that said, we expect international growth in 2027 to moderate meaningfully from 2026. We remain committed to delivering top tier revenue growth and expanding profitability. And we look forward to sharing our formal 2027 guidance in February. To close, we delivered another quarter of strong growth and significant margin expansion. While advancing our strategic priorities. We remain focused on strengthening our commercial capabilities accelerating innovation and expanding the category to drive durable, profitable growth. We are focused on executing against significant global opportunity ahead, and we look forward to updating you on our continued progress on our next call. With that, operator, please open the call for questions.

Operator: Thank you. We will now begin the question and answer session. I would like to remind participants that this call is being recorded. And a digital replay will be available on the Insulet website. We ask that you please help us respect time by limiting to 1 and 1 follow-up. If you would like to ask a question, please press 1. To raise your hand. To withdraw your question, please press 1 again. We ask that you pick up your handset when asking a question to allow for optimum sound quality. And if you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Your first question comes from the line of Matthew Taylor from Jefferies. Your line is open. Please go ahead.

Matthew Taylor: Thanks. Good morning. Thank you for taking the question. I wanted to start by double clicking on some of your commentary on 2027. And specifically wanted to ask you, you mentioned that some conservatism in the new assumptions, and you also made some changes to fundamental assumptions around market growth and competition. And obviously the tough comps internationally. So I just wanted to understand how much of the 2027 change we should attribute to conservatism versus some of those other fundamental factors, if you could provide some more context.

Ashley A. McEvoy: Yeah. Sure, Matthew. Thanks for the Look forward to seeing you in London in a couple of weeks. I would say, you know, a couple things. Let me just kinda give a broad context to 2026, which will be our baseline going into 2027. You know, we anticipate closing out our 11th consecutive year of 20% revenue growth, which is pretty strong. Again, coming off of a strong Q3, you know, we have very strong trends in our global customer base, which is up about 20%. And some really healthy KPIs when we look at front end and the back end of the funnel. And so we are taking that into consideration as we look at 2027. You know, coming off of that kind of base, we do expect our growth rate to moderate. that is expected. And really, because for 3 areas. 1 is the strength of our base is we are gonna exit 2026. We are looking at our pacing of innovation and when OmniPod 6 will be coming to the market. You know, as market leader, we are clear eyed around the state of new competitive entrants coming. And so we are gonna be really thoughtful, as we guide for the outlook for next year. Now I still have absolute confidence that we are gonna deliver top tier revenue performance. As well as expanded profitability going forward.

Matthew Taylor: And maybe for a follow-up. It looks like you did not include some of the upside that you said, you know, limited contributions from new products to Salesforce. And just assuming stable retention versus any improvement from type 2, I guess maybe you could speak to what could drive some upside and if you have really included much from your pipeline in the initial thoughts on 2027?

Ashley A. McEvoy: Yeah, no, that is fine. I mean, I think David said it remark a little bit of what some of the going-in assumptions that our latest thinking took into consideration. So, you know, I am really pleased with our Salesforce expansion that we conducted in Q3. We increased that 25%. Again, that is gonna pay dividends in quarters and years to come. I am really pleased with the new CRM platform that we have implemented over 10 years. I first in 10 years. Again, we are gonna equip the field with all these new tools. Again, that will build over time. Again, very pleased with how this field in Q3 with speed and intentionality got after the type 2 action plans. While you heard in my opening remarks, we saw some early green shoots around those. You know, retention did improve. But we are building a more modest build over a period of time. And that is what we mean by having a bit of a conservative outlook. We also understand when our innovation is gonna hit. We also understand the impact some of the new competitive entrants will have. So taking that all into consideration, we have been really deliberate on our guide for 2027. Again, it is not our official guide because we will be coming back in quarter 4. it is really our latest thinking. Thank you. Great. Thanks so much.

Operator: Your next question comes from the line of Travis Steed from Bank of America. Your line is open. Please go ahead.

Travis Steed: Hey. Thanks for the question. I guess, wanted to clarify. You said you asked towards the lower end of the range in 2027. Is that high single digits or is it double digits? For The U. S. In 2027? Just want to make sure that is clear. Given the exit rate of 10% to 13.5%. And there was a change in the guidance philosophy back in, like, November 2025 as well to be less conservative. So just wanna make sure I understand kind of the message on the guide philosophy now in terms of kind of the expectations of kind of beating and raising and how conservative this guidance, is now versus prior guidance philosophies.

Ashley A. McEvoy: Yeah. Travis, thanks for the question. I will start with your last question, and Flavia can answer some of the specifics to your first 1. Again, I just have to say I am very pleased with the quarter performance. I am very pleased with 2026. You know, on track to have our 11th consecutive year of, you know, 20%+ growth. We have continued to grow this category. We have been driving 2/3 of the category growth, bringing new patients from MDI into AID. And so we are just being really intentional, for our thinking for next year to say we have a much stronger base this year. We understand the pacing of our innovation. We are very ready and prepared for Omnipod 6 to bring this to you know, thousands and thousands of people around the world. Very pleased with all the prep that we have been doing with that, I have to say. And then just really clear eyed about what coming our way. As market leader, we know what to expect or what the market is, so we are just having a more conservative approach from our outlook as we approach 2027.

Flavia H. Pease: Yeah. Thanks, Ashley. And, Travis, as we said in our prepared remarks, we plan to guide towards the lower end of the framework that we provided in Q2, and we will provide formal guidance in February with precise ranges.

Travis Steed: What was the lower end of the framework? In Q2? Is that high single digits? Or double digits?

Flavia H. Pease: Yeah. The prior range was 9% to 14%. Okay. Thank you. Stick to the 1 question.

Operator: Your next question comes from the line of Robbie Marcus from JPMorgan. Your line is open. Please go ahead.

Robert Marcus: Good morning, and thanks for taking the questions. Maybe just to follow-up on the questions so far. As we think about 2027, and I realize you are not providing the full guide today, but I do think it is an important given the trajectory of US sales particularly. How are you thinking about the market evolving for insulin pumps next year? it is a-- there is a lot of moving pieces. Where you have new patient starts for the market overall, have a lot of competitive products coming, and I think people are struggling with how much will be just straight market share loss of patch pumps versus how much will the category expand. So in the new more conservative outlook you are providing today, you know, how are you thinking about it, and how is that different from the last quarter? Then I have a quick follow-up.

Ashley A. McEvoy: Yeah. No. Robbie, thanks for the question. I appreciate the color you are trying to get clarity on for 2027. And it is helpful if I kind of start with some of the building blocks. Number 1 is the market. And this year, early in the first half of year, this is an AID market that has been performing from a revenue basis, I would say high teens. From a customer basis, I would say mid teens. We, as market leader, have been driving the majority of that expansion and have been delivering revenue and customer base growth higher than those. We have been I will tell you that driving all of the NCS growth for the category coming from MDI I mentioned in my opening remarks, the majority of volume for the AID category comes from MDI, and we have been sourcing higher than category average, near 90% coming from MDI. We look at kind of the fundamentals of the category, and we see a very large TAM that is underpenetrated, that is very broad based. We look at type 1 US. We look at type 2 US, and then we look at OUS type 1. All of the penetration rates for the category are well below CGM. So we believe we have meaningful headroom ahead for this category. Now when we think about 2027, we think the category is gonna expand with new entrants. We think that we are going to be building off of a very strong customer base entering 2027. We have the largest customer base in the industry. As I mentioned, it grew 20%. In Q3. that is really the customer base KPIs, what you are gonna take to the bank. We have shown some, I would say, very modest improvement in the type 2 US. In Q3. We expect that to build over time. Again, for NCS, we are gonna be the leader in NCS, of course, we are gonna lose a couple share points as competitors come in. To enter this space. But again, I am really confident that in this moderated growth profile for insulet, it still will command top tier growth with expanded profitability. I think you had a second question, David.

Robert Marcus: Yeah. Thanks, Ashley. I think on the last quarter call, you had mentioned 20%+ EPS growth for 2027. I did not hear that comment today. It. Is that still a valid comment? Thanks a lot.

Flavia H. Pease: Hey, David. it is Flavia. I will take that 1. Obviously, we are not guiding yet for 2027, but we continue to have confidence in our previous remarks of growing EPS 25% over our horizon.

Operator: Your next question comes from the line of Jeffrey Johnson from Baird. Your line is open. Please go ahead.

Jeffrey Johnson: Thank you. Good morning, everyone. Thought I would ask. I know, you know, most of the focus is on The US, on the pod business for good reason. Outside The U. S, Flavia, you talked about a meaningful slowdown in growth next year. But you talked about maybe the global growth being just slightly below the previously communicated mid teens. So could you suss out for us maybe or just kind of clarify slightly below mid teens for Global, would that still be in the double digits for Global? Would that be the low teens or low double digits? Just how would you maybe qualify that comment about slightly below mid teens for Global? Any other color there? Then I have 1 other follow-up. Thank you.

Ashley A. McEvoy: Yeah. Jeffrey, I will start with the first party question, and Claudia can join in. First of all, I mean, our international OUS team is absolutely on fire. I mean, year to date, they are posting revenue growth of north of 35%. They are on track to, you know, surpass $1 billion this year. And, really, I attribute it to 3 things that they have just been unbelievably focused on. 1 is market access. You know, in countries like The UK, we have the highest penetration rates pediatrics on AID of anywhere in the world. 2 is innovation. They have done an amazing job of upgrading patients from, Dash to Omnipod 5, commanding a premium. which is a reflection of the value of your innovation. And they have mastered that. We are on track to exit 2026 with 80% conversion. And 3, preparing and executing well with new geographic expansions. Omnipod 5 will now be in 20 markets around the world, 6 new launches this year. So with that as a backdrop, absolutely, growth will moderate next year. Again, it would still be very competitive top tier growth, OUS. And that is because we will anniversary some of these big country launches. And we are going to not have the favorability of a 1-time price mix realization. And we are really gonna be preparing our markets for the innovation coming their way of the new sensor integration, the new phone control, as well as Omnipod 6. So with that, maybe you want to-- sure.

Flavia H. Pease: Your first question about global. I am just gonna reiterate that we are gonna issue formal guidance in February of next year. But let me recap what we said in the call today. Which is for the total company, we would expect the growth next year or to guide next year to be modestly below mid teens which was the framework we provided in the second quarter, that is the total company. For The US, expect to guide at the low end of the framework we had provided in the second quarter. And then to your point, Jeffrey, we expect the growth internationally to moderate meaningfully from where we are today. Not gonna provide specifics until we got in February, so let you guys interpret what those mean.

Jeffrey Johnson: Fair enough. And just for a follow-up, again, kind of a clarifying question, But is the T1 attrition rate still kind of sitting in The U. S. close to that 10% range? And I know you said maybe a very slight improvement on T2 retention. We have all trained to back in on your comments last quarter what that T2 attrition rate might be looking like in The U. S. As of last quarter. I think we were all well, I know our math was getting us around 25% to 30%. Is that 25% to 30% T2 attrition rate a fair number? And could you quantify? Did you improve that a couple of points or anything in the quarter just to help us how much progress might have been made thus far? Thank you.

Ashley A. McEvoy: Yeah, Jeffrey. Let me kind of first just take everybody back to kind of what drives our business model. And the most important KPI is how many customers we have. And our customer base grew 20% in the quarter. And in The United States, it grew high teens. And that is a really healthy measure. And, again, we saw, you know, globally stable pricing. And our consumption patterns, which is the amount of volume that our customers are using, very close and mirrored the customer base number. Again, a very healthy measure. As I shared in our quarter 2 call, we did see some erosion in that quarter on attrition in a type 2 population. Our type 1 population is very consistent to the measure that you shared. And we did see green shoots. We saw improvement, modest improvement in our T2 retention trends. And we also, again, saw when we think about going forward, we look at kind of structurally no difference than what we have called on the TAM and the penetration rate for the type 2 marketplace. So I call these, you know, execution challenges. That we have now addressed, and I believe that they will have a full confidence that they are gonna have meaningful value as we build into next year.

Operator: Your next question comes from the line of Larry Biegelsen from Wells Fargo. Your line is open. Please go ahead.

Larry Biegelsen: Good morning. Thanks for taking the question. Just on the Type 2 retention and the changes you are making, Ashley, how is the sampling program changing, and how might this impact you know, new customer starts given that you include, you know, samples in new start. I am wondering if having a more stringent sampling process could result in a hit to your new start growth? And just related, you said losing a few share points to new customer starts in 2027. I think that is assumption. In the outlook. Is that conservative enough with 3 new competitors? Thank you.

Ashley A. McEvoy: Larry, thanks for the question. I will start with a bit of some of our Type 2 actions. 1, we implemented a very comprehensive approach to really improve how we are serving our type 2 community. In Q3. And, again, I am very pleased with the speed and the intentionality that our team has addressed this. You know, number 1, you mentioned the sample. And, yes, we have much tighter governance, and the field is now implementing our revised governance policy, which is really around adjudicating health care and making sure we have a script. Fact, I was in the field that had consistently been doing that on Friday, and they were seeing attrition rates, you know, low single digits. So we know that is gonna be a winning playbook as we build over quarter. The second is we have added to our customer care team clinical retention specialists and they are trained. They are up and going. They are having, I think, early green shoots of interaction in terms of quality of engagements. We have also then expanded our field force sales compensation program from addition to incenting them on MCF, but also incenting them on quality of staying into the franchise, particularly the first month. And, again, that is a newer program. We are gonna see benefits of that in quarters to come. And then importantly, you know, as I shared in my opening remarks, we have launched Omnipod Discover, which is our new data platform, Larry. And, again, we now have in full market release 35 thousand people with diabetes, using Omnipod Discover. And we now have over 5 thousand clinicians. I will tell you, I was in the field on Friday. In a safety net hospital with 1.5 thousand patients on Medicaid. They are seeing remarkable retention trends. used for on this patient engagement platform. Again, I believe that will build over time. So I think we have the right strategies. I am seeing. I think our strategies have momentum. I think that these are going to build over time, so we are just as masterful at serving this customer base as we have been for the past 25 years of the type 1 community. So when I think about next year, Larry, again, I am gonna start with what I was sharing with Robbie, we have a very strong growing, leading customer base, the largest customer base in the industry. That has been growing in a phenomenal pace in 2026. When I think about next year, I still think we are gonna have the leadership share in the customer base. I still think we will expand our share and customer base. We will continue to bring people into the category. We will be the NCS share leader, but, yes, of course, we are gonna lose a couple share points with some of the competitive entrance coming in. And, again, we are gonna play upon the screen of our of the. Of our customer base and the retention efforts we are doing. And the continued improvement that we continue to do with. As category leader, we bring the majority of the volume from the MDI category into the AID. And if you have any other kind of specific questions, Larry, happy to get you on the follow-up call on some of the numbers you were asking about.

Larry Biegelsen: that is perfect. Thank you so much.

Operator: Your next question comes from the line of Matthew O'Brien from Piper Sandler. Your line is open. Please go ahead.

Matthew O'Brien: Hi. Good morning. This is Anna on for Matthew. thanks for taking our question here. I just wanted to sort of focus in on those type 2 initiatives that you have got going on. Just any sort of color you can provide on the early indicators that the first 90 day experience is starting to improve durably. I know it is, you know, still early days, but maybe if you could just, yeah, elaborate on some of the leading indicators that are most predictive of durable retention going forward. Thanks.

Ashley A. McEvoy: Anna, thank you for the question. I really do not have a lot to add that I just shared on Larry's question. Again, our strategies are having momentum to improve type 2 retention. it is gonna build over time. We have made meaningful investments in our in our field and these programs that are gonna pay dividends for quarters and years to come.

Operator: Your next question comes from the line of Michael Polark from Wolfe Research. Your line is open. Please go ahead.

Michael Polark: Hey. Good morning. Just 1 for me. Ashley, in your prepared remark, you highlighted 1 PBM agreement updated for 2027, 2 more to finalize here. in the coming weeks. The next mention in your script was about manufacturing scale and scope and I want you to tell me what you are telling me there. The kind of highlighting scale alongside the PBM agreements where you have competition coming. Is there some. Is there a message about pricing in there that I need to hear, or am I not putting the 2 tidbits together and if I am not putting them together correctly, can you tell me what I should take away from that message? Thank you.

Ashley A. McEvoy: Thank you, Mike, for the for the question. I mean, I would say a couple things. We always believe in broad access. it is 1 of, like, our core philosophies. And we pioneered the pharmacy channel. We have a leadership share in the pharmacy channel. We a lot of volume through the pharmacy channel in The United States. And we have outstanding coverage over 98% coverage We have very strong coverage in Medicaid, and we have very strong coverage in Medicare. Also have a meaningful amount of preferred coverage, which means you they have it is much more accessible for our patients. They do not have to have prior authorizations, and we are gonna keep on that strategy. it is a winning strategy for the category. We have seen new competitors come in. They have been very disciplined on pricing. We have unrivaled amount of volume going through this channel, so we will be very We believe in the clinical and economic value of the AID category. So do payers. And I am pleased to see, as expected, we are 1/3 of the way through our negotiations. We expect to complete the others in the next several weeks, and it will be intact with our strategy. Overall, we think in The United States, it will be stable pricing. Thank you.

Operator: Your next question comes from the line of Jayson Bedford. From Raymond James. Your line is open. Please go ahead.

Jayson Bedford: Good morning, and I will I will keep it to 1 as well. Wanted to ask about the interplay between user base and revenue growth. I think you mentioned that The US installed base grew high teens in Q3, which is better than I was thinking. But the fourth quarter revenue guide for The US is 10 to 13%. So I am just wondering why these 2 numbers would not be a bit closer, and maybe you can help us bridge some of these factors.

Ashley A. McEvoy: Yeah. Thank you, Jason. Again, I am really pleased with the strength of our US business. I mean, we are 3 quarters of the way through the year. And year to date, they are posting revenue growth of 20. You know, slightly north of 20%. Clearly, that is gonna moderate a bit in quarter 4 because we have a big comp. Coming into quarter 4. So that is really the simple answer. And, again, The US has been delivering, you know, high teens customer base growth, again, with year to date stable pricing, And that installed base and the consumption, as I mentioned, the consumption, which is the volume that installed base is using, is very consistent to the growth rate of the customer base. And that is what we will be entering 2027 with.

Operator: Your final question comes from the line of Joanne Wuensch from Citibank. Your line is open. Please go ahead.

Joanne Wuensch: Good morning, and thank you so much for taking the question. It sounds like we should really be thinking and focusing on the introduction of Omnipod 6 in 2027 as sort of a competitive response. Can you give us a little bit of an update on the time line, the expectations? In which features about o 6 should we really be focusing on? Thank you.

Ashley A. McEvoy: Yeah. Joanne, thank you for the question. I think it is helpful to. As market leader, we have done a lot of work to past year kind of understanding what the biggest unmet needs in the market are. How are we positioned versus what is coming into the market, and what matters most to people with diabetes as well as prescribers. And as I said in my remarks, the number 1 thing that people with diabetes are looking for as well as prescribers is lifestyle fit. Quality of life. This is a chronic progressive disease. That people-- it-- they never get a break from it. And so that is what. that is really what is enabled Omnipod. To capture market leadership. And we are gonna play from our position of strength as we launch our sixth generation of Omnipod next year What we have learned is it is going to give improved clinical outcomes. The early data that we shared has people with type 1 diabetes at 76% time in range, with 40% less bolusing, which is a lot Less Manual Intervention. And, Again, it is Gonna Be Connected With The Latest Sensors. We are Gonna Have Phone Control available OUS, and we Will Be Launching This In The United States as well as outside The United States simultaneously. This is a first in the company, and we have had the benefit of time to really prepare to master how we sell our clinical evidence, how we sell our lifestyle fit and quality of life, how we really equip our field well as our peer to peer education to really have a leadership share of voice. Of making sure that prescribers and people with diabetes are aware of this meaningful innovation. Thanks for the question, Joanne.

Operator: There are no further questions at this time. And I will hand it back to Ashley A. McEvoy, president and CEO for closing remarks.

Ashley A. McEvoy: Listen. Thanks everyone for joining. You know, you heard our reminder of the strength of this market, that we are the leader in. it is 1 of the largest, fastest growing, most underpenetrated segments in med tech. We always know when it is helpful to have the market on your side. And we have got full conviction that we are gonna continue to win more than our fair share of Converse. You know, given our really unique user experience, our unbelievable scale. As I mentioned, we have invested billions over the years. We produce tens and tens of millions of pods a year, and then our other durable advantages. We are on the precipice of a remarkable innovation agenda ahead of us. Beginning with Omnipod 6, and then our. What we believe will be the industry first fully closed loop, which will be a transformation for type 2 and bring more people from the MDI category into this industry. And we are just gonna continue focusing on improving and reducing the burden of living with diabetes and serving more and more people. Could not be more pleased with all my colleagues around the world of Team Pod, their maniacal focus on patients. Thanks so much.

Operator: This concludes today's call. Thank you for attending. You may now disconnect.