Overview of the Company’s Financial Performance

Insulet Corporation, a leading medical device company, has reported strong financial results for the three months ended March 31, 2025. The key highlights are:

• Total revenue increased by 28.8% to $569.0 million, driven by higher sales volume and growth in the customer base. Constant currency revenue growth was 29.8%.
• U.S. revenue from Omnipod products grew by 26.4% to $401.7 million, primarily due to volume growth and the impact of pharmacy wholesaler orders.
• International revenue from Omnipod products increased by 32.2% to $152.4 million, excluding a 3.9% unfavorable currency impact. This was driven by higher volumes from new customers and the launch of Omnipod 5 in additional markets.
• Drug Delivery revenue increased by 71.3% to $14.9 million due to higher orders from the company’s partner.
• Gross margin improved by 240 basis points to 71.9%, primarily due to manufacturing and supply chain efficiencies.
• Research and development expenses increased by 18.7% to $59.6 million to support continued investment in Omnipod and pipeline products.
• Selling, general and administrative expenses increased by 30.5% to $260.6 million, mainly due to headcount additions to enhance customer support and business growth.
• Adjusted EBITDA, a non-GAAP measure, increased by 50.0% to $133.9 million.
• The company’s effective tax rate increased to 26.4% from 6.2% in the prior year period, primarily due to non-deductible charges from debt extinguishment.
• Free cash flow, another non-GAAP measure, was $51.5 million, compared to $65.5 million in the prior year period.

Revenue and Profit Trends

Insulet has delivered strong revenue growth across its business segments. The U.S. Omnipod business saw a 26.4% increase, driven by volume growth and the impact of pharmacy wholesaler orders. International Omnipod revenue grew by 32.2% (excluding currency impact), benefiting from new customer additions and the launch of Omnipod 5 in additional markets.

The company’s gross margin improved by 240 basis points to 71.9%, reflecting better manufacturing and supply chain efficiencies. However, the effective tax rate increased significantly due to non-deductible charges related to debt extinguishment.

Insulet continued to invest in research and development, with a 18.7% increase in R&D expenses to support its product pipeline. Selling, general and administrative expenses also grew by 30.5% as the company expanded its customer support and business operations.

Overall, Insulet delivered strong Adjusted EBITDA growth of 50.0%, demonstrating its ability to translate revenue growth into profitability. However, free cash flow declined compared to the prior year period, primarily due to working capital outflows.

Strengths and Weaknesses

Strengths:

• Dominant position in the Omnipod insulin delivery system, with strong volume growth in both the U.S. and international markets
• Improving gross margins through manufacturing and supply chain efficiencies
• Continued investment in R&D to drive innovation and pipeline development

Weaknesses:

• Increasing selling, general and administrative expenses to support business growth
• Higher effective tax rate due to non-deductible charges
• Decline in free cash flow generation compared to the prior year

Outlook

Insulet provided the following outlook for the full year 2025:

• Expect strong U.S. revenue growth driven by the benefits of the recurring revenue model and continued volume growth of Omnipod 5
• Anticipate higher international Omnipod revenue due to volume growth from new customers and the launch of Omnipod 5 in additional markets
• Gross margin is expected to be approximately 71.0%, with improvements from manufacturing efficiencies and volume/pricing benefits, partially offset by the impact of tariffs
• Research and development spending is expected to increase as the company continues to invest in its innovation and clinical pipeline
• Selling, general and administrative expenses are expected to rise due to investments in the operating structure, including headcount additions to support customer service, sales, quality, regulatory, and international expansion

Overall, Insulet appears well-positioned to maintain its growth momentum, driven by the continued success of the Omnipod platform and the global expansion of its Omnipod 5 product. The company’s focus on improving manufacturing efficiencies and investing in its product pipeline should help sustain its competitive advantage. However, the company will need to carefully manage its increasing operating expenses to maintain profitability and cash flow generation.