INSULET CORP

Previous wording

Our mission is to improve the lives of people with diabetes. We are primarily engaged in the development, manufacture and sale of our proprietary Omnipod platform, a continuous insulin delivery system for people with insulin-dependent diabetes. The Omnipod platform includes: the most recent generation Omnipod 5 and its predecessors Omnipod DASH and Classic Omnipod, all of which eliminate the need for multiple daily injections using syringes or insulin pens or the use of pump and tubing. Omnipod 5, which builds on our Omnipod DASH mobile platform, is a tubeless automated insulin delivery system, that integrates with continuous glucose monitors (“CGM”) to manage blood sugar and is fully controlled by a compatible personal smartphone or Omnipod 5 Controller. The CGMs are sold separately by third parties. Omnipod DASH features a secure Bluetooth enabled Pod that is controlled by a smartphone-like Personal Diabetes Manager (“PDM”) with a color touch screen user interface.

Current wording

Our mission is to improve the lives of people with diabetes. We are primarily engaged in the development, manufacture, and sale of our proprietary Omnipod product platform, a continuous insulin delivery system for people with insulin-dependent diabetes. The Omnipod platform primarily includes our most recent generation Omnipod 5 and its predecessor Omnipod DASH, which eliminate the need for multiple daily injections using syringes or insulin pens or the use of pump and tubing. Omnipod 5, which builds on our Omnipod DASH mobile platform, is a tubeless automated insulin delivery system that integrates with continuous glucose monitors (“CGM”) to manage blood sugar and is fully controlled by a compatible personal smartphone or Omnipod 5 Controller. It is indicated for type 1 diabetes and, in the United States, for type 2 diabetes for ages 18 and up. The CGM is sold separately by third parties. Omnipod DASH features a secure Bluetooth enabled Pod that is controlled by a smartphone-like Personal Diabetes Manager (“PDM”) with a color touch screen user interface.

Previous wording

Our financial objective is to sustain profitable growth. To achieve this, we launched Omnipod 5 in the United States in 2022, and in the United Kingdom and Germany in June and August 2023, respectively. Most recently, in June 2024, we launched our full market releases of Omnipod 5 in the Netherlands and France. We are working on further building our international teams and advancing our regulatory, reimbursement, and market development efforts so we can bring Omnipod 5 to additional international markets.

Current wording

Our financial objective is to sustain profitable growth. To achieve this, we announced the launch of Omnipod 5 in the following nine additional countries this year: Italy, Denmark, Finland, Norway, Sweden, Australia, Belgium, Canada and Switzerland. Additionally, we are working on further building our international teams and advancing our regulatory, reimbursement, and market development efforts so we can bring Omnipod 5 to additional international markets.

Previous wording

During the six months ended June 30, 2024, we completed participant enrollment in our RADIANT study in France, the U.S, and Belgium, which is our Omnipod 5 with Libre 2 randomized controlled trial. Similar to the randomized control trial that we completed in the U.S. and France for Omnipod 5 with DexCom’s G6 CGM, the objective is to provide data to support our pricing and market access initiatives as we roll out Omnipod 5 with multiple sensors across our international markets.

Current wording

We have completed the randomized portion of our RADIANT study in France, the United Kingdom, and Belgium, which is our Omnipod 5 with Libre 2 randomized controlled trial. Similar to the randomized control trial that we completed in the United States and France for Omnipod 5 with DexCom’s G6 CGM, the objective is to provide data to support our pricing and market access initiatives as we roll out Omnipod 5 with multiple sensors across our international markets. We also continue to expand market access and awareness of Omnipod products through our direct to consumer advertising programs and through growing our presence in the U.S. pharmacy channel, where access to Omnipod 5 and Omnipod DASH is simpler and affordable, as no up-front investment is required.

Previous wording

We also continue to focus on our product development efforts, including automated insulin delivery (“AID”) offerings, such as choice of smartphone integration and CGM, and enhancing the customer experience through digital product and data capabilities. In June 2024, we began our full market release of Omnipod 5 with Dexcom’s G7 CGM in the United States. Similarly, in June 2024 we launched our full market release of Omnipod 5 with Libre 2 Plus for individuals aged two years and older with type 1 diabetes in both the U.K. and the Netherlands, where we now offer sensor of choice (integration with either Abbott’s Freestyle Libre 2 Plus sensor or Dexcom’s G6 CGM). Omnipod 5 integration with Dexcom’s G6 CGM is also available in the U.K. and Germany. Additionally, in June 2024, we launched a limited market release in the U.S. of our Omnipod 5 app for iPhone compatible with Dexcom’s G6 CGM, and in October we launched our U.S. full market release.

Current wording

We also continue to focus on our product development efforts, including automated insulin delivery (“AID”) offerings, such as choice of smartphone integration and CGM, and enhancing the customer experience through digital product and data capabilities.

Previous wording

Total revenue for the three months ended September 30, 2024 increased $111.2 million, or 25.7%, to $543.9 million, compared with $432.7 million for the three months ended September 30, 2023. Total revenue for the nine months ended September 30, 2024 increased $286.8 million, or 24.2%, to $1,474.1 million, compared with $1,187.3 million for the nine months ended September 30, 2023. Constant currency revenue growth of 25.4% and 23.9% for thethree and nine months ended September 30, 2024, respectively, was primarily drivenby higher volume largely attributable to our growing customer base and, to a lesser extent, higher price.

Current wording

Total revenue for the three months ended March 31, 2025 increased $127.3 million, or 28.8%, to $569.0 million, compared with $441.7 million for the three months ended March 31, 2024. Constant currency revenue growth of 29.8% was primarily drivenby higher sales volume largely attributable to our growing customer base and, to a lesser extent, an increase in inventory days on hand at distributors.

Previous wording

Revenue from the sale of Omnipod products in the U.S. increased $75.0 million, or 23.4%, to $395.6 million for the three months ended September 30, 2024, compared with $320.6 million for the three months ended September 30, 2023. This increase primarily resulted from higher volume driven by growing our customer base. To a lesser extent, the revenue increase was driven by a higher average selling price, due to a wholesale acquisition cost (“WAC”) increase implemented during the second quarter of 2024. Revenue from the sale of Omnipod products in the U.S. for the three months ended September 30, 2024 included $171.3 million of related party revenue, compared with $112.0 million for the three months ended September 30, 2023. The $59.3 million increase resulted from growth through the pharmacy channel.

Current wording

Revenue from the sale of Omnipod products in the U.S. for the three months ended March 31, 2025 included $148.5 million of related party revenue, compared with $111.8 million for the three months ended March 31, 2024. The $36.7 million increase resulted from growth through the pharmacy channel.

Previous wording

For full year 2024, we expect strong U.S. revenue growth primarily driven by continued volume growth of Omnipod 5 due to an increase in our customer base and the benefits of our recurring revenue model, partially offset by a decrease in estimated inventory days-on-hand at distributors. A higher average selling price for Omnipod 5, resulting from our annual WAC increases and growth in the pharmacy channel, is also expected to contribute to the year over year increase in revenue.

Current wording

For full year 2025, we expect strong U.S. revenue growth primarily driven by the benefits of our recurring revenue model and continued volume growth of Omnipod 5.

Previous wording

Revenue from the sale of Omnipod products in our international markets increased $36.6 million, or 36.1%, to $138.0 million for the three months ended September 30, 2024, compared with $101.4 million for the three months ended September 30, 2023. Excluding the 1.3% favorable impact of currency exchange, the remaining 34.8% increase in revenue wasprimarily due to higher volumes from the launches of Omnipod 5 in the U.K. and Germany in the prior year, driven by our growing customer base and, to a lesser extent, the favorable impact of conversions to Omnipod 5 as users generally obtain both their starter kit and refills simultaneously. A higher average selling price for Omnipod 5, compared with Omnipod DASH and Classic Omnipod, also contributed to the revenue increase.

Current wording

Revenue from the sale of Omnipod products in our international markets increased $37.1 million, or 32.2%, to $152.4 million for the three months ended March 31, 2025, compared with $115.3 million for the three months ended March 31, 2024. Excluding the 3.9% unfavorable impact of currency exchange, the remaining 36.1% increase in revenue was primarily due to higher volumes from our growing customer base, largely resulting from the prior year launches of Omnipod 5 and, to a lesser extent, from an increase in estimated inventory days-on-hand at distributors to support our 2025 Omnipod 5 launches. A higher average selling price for Omnipod 5, compared with Omnipod DASH and Classic Omnipod, also contributed to the revenue increase.

Previous wording

For full year 2024, we expect higher International Omnipod revenue due to continued volume growth driven by new customers and conversions to Omnipod 5 primarily due to the launches of Omnipod 5 in the U.K. and Germany in the prior year.

Current wording

For full year 2025, we expect higher International Omnipod revenue due to continued volume growth driven by new customers and higher price resulting from conversions to Omnipod 5 primarily due to the launch of Omnipod 5 in France and the Netherlands, growth from the prior year launches in Germany and the United Kingdom, and the continued roll out of Omnipod 5 in additional markets.

Previous wording

Cost of revenue for the three months ended September 30, 2024 increased $27.4 million, or 19.7%, to $166.8 million, compared with $139.4 million for the three months ended September 30, 2023. Gross margin was 69.3% for the three months ended September 30, 2024, compared with 67.8% for the three months ended September 30, 2023. The 150 basis point increase in gross margin was primarily drivenby pricing benefits in both the U.S. pharmacy channel and in our international markets and improved manufacturing efficiencies, partially offset by higher costs due to inflation.

Current wording

Cost of revenue for the three months ended March 31, 2025 increased $25.1 million, or 18.6%, to $160.0 million, compared with $134.9 million for the three months ended March 31, 2024. Gross margin was 71.9% for the three months ended March 31, 2025, compared with 69.5% for the three months ended March 31, 2024. The 240 basis point increase in gross margin was primarily driven by improved manufacturing and supply chain efficiencies and, to a lesser extent, volume.

Previous wording

Selling, general and administrative expenses for the three months ended September 30, 2024 increased $53.4 million, or 29.6%, to $234.1 million, compared with $180.7 million for the three months ended September 30, 2023. This increase was primarily attributable to year-over-year headcount additions to support commercial and international growth, to sustain Omnipod 5 and due to a $15.9 million increase in advertising expense. To a lesser extent, the increase was a result of our new organizational structure that is designed to accelerate innovation and commercialization and higher legal fees.

Current wording

Selling, general and administrative expenses for the three months ended March 31, 2025 increased $60.9 million, or 30.5%, to $260.6 million, compared with $199.7 million for the three months ended March 31, 2024. This increase was primarily attributable to year-over-year headcount additions to enhance customer product support, support our business growth, and engineering support for enhancements to our products. To a lesser extent, the increase was due to an increase in advertising expense.

Previous wording

We expect selling, general and administrative expenses to increase in 2024 compared with 2023 due to investments in our operating structure, primarily headcount additions, particularly in the areas of sales and engineering, to facilitate continued growth. We also plan to make additional investments to support the Omnipod platform, including market acceptance, access and awareness, as well as to support the phased launch of Omnipod 5 in our international markets and to defend our intellectual property.

Current wording

We expect selling, general and administrative expenses to increase in 2025 compared with 2024 due to investments in our operating structure, primarily headcount additions, particularly in the areas of customer product support, sales, quality and regulatory support, international expansion and engineering support to facilitate continued growth globally. We also plan to make additional investments to continue to support the Omnipod platform and the phased launch of Omnipod 5 in our existing international markets and prepare for expansion into new countries.

Previous wording

Adjusted EBITDA represents net income plus net interest expense (income), income tax expense (benefit), 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 our performances, as applicable. We present Adjusted EBITDA because management uses it as a supplemental measure in assessing our performance, and we believe that it is helpful to investors and other interested parties as a measure of our comparative performance from period to period. Adjusted EBITDA is a commonly used measure in determining business value and we use it internally to report results.

Current wording

Adjusted EBITDA represents net income plus net interest expense (income), income tax expense (benefit), 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, which affect the period-to-period comparability of our performances, as applicable. We present Adjusted EBITDA because management uses it as a supplemental measure in assessing our performance, and we believe that it is helpful to investors and other interested parties as a measure of our comparative performance from period to period. Adjusted EBITDA is a commonly used measure in determining business value and we use it internally to report results.

Previous wording

To finance our operations and global expansion, we have periodically issued convertible senior notes, which are convertible into our common stock. As of September 30, 2024, the following Convertible Notes were outstanding:

Current wording

To finance our operations and global expansion, we have periodically issued convertible senior notes, which are convertible into our common stock. As discussed in note 9, in March and April 2025, we repurchased $420 million in principal of our Convertible Senior Notes. Subsequent to these transactions, the following Convertible Senior Notes were outstanding:

Previous wording

We have a $300.0 million senior secured revolving credit facility (the “Revolving Credit Facility”), which expires in 2028. At September 30, 2024, no amount was outstanding under the Revolving Credit Facility. The Revolving Credit Facility contains a covenant to maintain a specified leverage ratio when there are amounts of at least 35% of the aggregate Revolving Credit Facility outstanding. It also contains other customary covenants, none of which are considered restrictive to our operations. Additionally, we have a Term Loan B (“Term Loan”), which matures in 2031, that contains covenants restricting or limiting our ability to incur additional indebtedness, make asset dispositions, create or permit liens, sell, transfer or exchange assets, guarantee certain indebtedness, and make acquisitions and other investments.

Current wording

We have a $500 million senior secured revolving credit facility (the “Revolving Credit Facility”), which expires in 2030. At March 31, 2025, no amount was outstanding under the Revolving Credit Facility. The Revolving Credit Facility contains a covenant to maintain a specified leverage ratio when there are amounts of at least 35% of the aggregate Revolving Credit Facility outstanding. It also contains other customary covenants, none of which are considered restrictive to our operations. Additionally, we have a Term Loan B, which matures in 2031, that contains covenants restricting or limiting our ability to incur additional indebtedness, make asset dispositions, create or permit liens, sell, transfer or exchange assets, guarantee certain indebtedness, and make acquisitions and other investments.

Previous wording

Additional information regarding our debt is provided in Note 9 to the consolidated financial statements.

Current wording

In March 2025, we issued $450 million aggregate principal amount of 6.5% senior unsecured notes due April 2033. The notes contain leverage and fixed charge coverage ratio covenants, both of which are measured upon the incurrence of future debt, as well as other customary covenants, none of which we consider restrictive to our operations. Additional information regarding our debt is provided in note 9 to the consolidated financial statements.

Previous wording

$32.6 million increase in accrued expenses and other liabilities and a $20.0 million increase in accounts payable. The increase in inventories was primarily due to a planned inventory build to satisfy our growing demand and, to a lesser extent, to mitigate supply chain risk. The increase in prepaid expenses and other assets was primarily driven by an increase in prepaid income taxes, cloud computing implementation costs and capitalized commissions. The increase in accounts receivable was primarily due to an increase in sales driven by our growing customer base. The increase in accrued expenses and other liabilities was primarily driven by an increase in accrued rebates due to higher revenue subject to pharmacy rebates and an increase in direct-to-consumer advertising spend, partially offset by the annual payout of cash bonuses for performance in the prior year. Finally, the increase in accounts payable was driven by the timing of payments.

Current wording

Net cash provided by operating activities of $63.8 million for the three months ended March 31, 2025 was primarily attributable to net income, as adjusted for loss on extinguishment of debt, depreciation and amortization, and stock-based compensation expense, partially offset by a $65.0 million working capital outflow. The working capital outflow was driven by a $48.7 million decrease in accrued expenses and other liabilities, a $33.4 million increase in accounts receivable, a $12.8 million increase in prepaid expenses and other assets, and a $6.6 million increase in inventories, partially offset by a $36.5 million increase in accounts payable. The decrease in accrued expenses and other liabilities was primarily driven by the annual payout of cash bonuses for performance in the prior year, partially offset by an increase in accrued rebates primarily due to higher revenue subject to pharmacy rebates. The increase in accounts receivable was primarily due to an increase in sales driven by our growing customer base. The increase in prepaid expenses and other assets was primarily driven by prepaid raw materials. The increase in inventories was primarily due to a planned inventory build to satisfy our growing demand. Finally, the increase in accounts payable was driven by the timing of payments.

Previous wording

Net cash used in investing activities was $78.2 million for the nine months ended September 30, 2024, compared with $87.8 million for the nine months ended September 30, 2023.

Current wording

Net cash used in investing activities was $15.7 million for the three months ended March 31, 2025, compared with $24.0 million for the three months ended March 31, 2024.

Previous wording

Capital Spending—Capital expenditures were $71.3 million for the nine months ended September 30, 2024, compared with $46.3 million for the nine months ended September 30, 2023. The $25.0 million increase primarily related to the purchase of machinery, equipment and tooling to increase our manufacturing capacity for our new Malaysia manufacturing facility and continuous improvements at our other owned manufacturing facility. We expect capital expenditures for 2024 to increase compared with 2023 given the timing of spending on machinery, equipment and tooling for our new Malaysia manufacturing facility, as well as the purchase of land and manufacturing facility in Malaysia. We also expect capital expenditure to increase due to investments in our information technology infrastructure and continuous improvements at our other owned manufacturing facility. We expect to fund our capital expenditures using existing cash.

Current wording

Capital Spending—Capital expenditures were $12.3 million for the three months ended March 31, 2025, compared with $22.1 million for the three months ended March 31, 2024. The $9.8 million decrease primarily related to the purchase of machinery, equipment and tooling during three months ended March 31, 2024 for our Malaysia manufacturing facility which began operating mid-2024. We expect capital expenditures for 2025 to increase compared with 2024 as we continue to expand and optimize our manufacturing and supply chain operations as well as support our global expansion. We expect to fund our capital expenditures using existing cash.

Previous wording

Investments in Developed Software—Investments in developed software were $6.7 million and $6.2 million for the nine months ended September 30, 2024 and 2023, respectively, and primarily related to investments in projects to support our cloud-based capabilities.

Current wording

Investments in Developed Software—Investments in developed software were $3.4 million and $1.9 million for the three months ended March 31, 2025 and 2024, respectively, and primarily related to investments in projects to support our cloud-based capabilities.

Previous wording

Net cash used in financing activities was $7.2 million for the nine months ended September 30, 2024, compared with $15.8 million for the nine months ended September 30, 2023.

Current wording

Net cash provided by financing activities was $277.8 million for the three months ended March 31, 2025, compared with net cash used in financing activities of $14.1 million for the three months ended March 31, 2024.

Previous wording

Proceeds and Repayments from Secured Borrowing—During the nine months ended September 30, 2024, we received $32.6 million of cash advances from a third-party to whom we outsource our insurance claim submissions process in a certain country. Additionally, we repaid $17.2 million of cash advances during the nine months ended September 30, 2024.

Current wording

Proceeds and Repayments from Secured Borrowing—During the three months ended March 31, 2025, we received $15.4 million of cash advances from a third-party to whom we outsource our insurance claim submissions process in a certain country. Additionally, we repaid $13.4 million of cash advances during the three months ended March 31, 2025.

Previous wording

Finance Lease Repayments—During the nine months ended September 30, 2024, we made $6.0 million in finance lease repayments associated with our Malaysia manufacturing facility.

Current wording

Finance Lease Repayments—During the three months ended March 31, 2024, we made finance lease repayments associated with our Malaysia manufacturing facility totaling $5.8 million.

Previous wording

Proceeds from Option Exercises and Shares Issued Under Employee Stock Purchase Plan ("ESPP")—Total proceeds from option exercises and issuance of shares under the ESPP were $13.7 million and $17.9 million for the nine months ended September 30, 2024 and 2023, respectively. The $4.2 million decrease was primarily driven by option exercises by former executives in the prior year.

Current wording

Proceeds from Option Exercises—Proceeds from option exercises were $2.5 million and $5.8 million for the three months ended March 31, 2025 and 2024, respectively. The $3.3 million decrease was primarily driven by option exercises by former executives in the prior year.

Previous wording

Payment of Taxes for Restricted Stock Net Settlements—Payments for taxes related to net restricted and performance stock unit settlements were $7.0 million and $13.1 million for the nine months ended September 30, 2024 and 2023, respectively. The $6.1 million decrease was primarily driven by a lower fair market value of the restricted stock units that vested during the period.

Current wording

Payment of Taxes for Restricted Stock Net Settlements—Payments for taxes related to net restricted and performance stock unit settlements were $21.2 million and $5.0 million for the three months ended March 31, 2025 and 2024, respectively. The $16.2 million increase was primarily driven by a higher fair market value of the restricted stock units that vested during the period.

Previous wording

•our ability to secure and retain adequate coverage or reimbursement from third-party payors; the impact of healthcare reform laws;

Current wording

•our ability to secure and retain adequate coverage or reimbursement from third-party payors;

Previous wording

•international business risks, including regulatory, commercial and logistics risks;

Current wording

•international regulatory, commercial and logistics business risks, including the implementation of tariffs;

Previous wording

•failure to retain key suppliers or other manufacturing issues;

Current wording

•failure to retain key suppliers;

Previous wording

•challenges to future development of our non-insulin drug delivery product line;

Current wording

•challenges to the future development of our non-insulin drug delivery product line;

Previous wording

•failure of our contract manufacturer or component suppliers to comply with the U.S. Food and Drug Administration’s quality system regulations;

Current wording

•our failure or that of our contract manufacturer or component suppliers to comply with the U.S. Food and Drug Administration’s quality system regulations or other manufacturing difficulties;

Previous wording

•potential adverse impacts resulting from a recall, discovery of serious safety issues, or product liability lawsuits relating to off-label use;

Current wording

•potential adverse impacts resulting from a recall, or discovery of serious safety issues, or product liability lawsuits relating to off-label use;

Previous wording

•ability to generate sufficient cash to service our indebtedness or raise additional funds on acceptable terms or at all;

Current wording

•ability to raise additional funds on acceptable terms or at all;

Previous wording

•risks related to the conversion of outstanding Convertible Notes; and

Current wording

•risks related to the conversion of outstanding Convertible Senior Notes.