Insulet Corporation Stock

All right. Thanks, everybody, for joining. I'm Lee Hambright, U.S. med tech analyst at Bernstein. We are very happy to host Insulet. We've got COO Eric Benjamin. Thank you so much for being here, first of all.

Absolutely. Our pleasure.

So just a reminder, if there's any questions in the room, please submit them through the app. We'll try to work them in, if possible. Maybe, Eric, starting big picture. You've been with Insulet for over a decade. Company's revenue this year will be 10x what it was in the year that you joined. Maybe talk a little bit about how Insulet has evolved over that time? And what feels most different today about the company.

Yes. It's been an incredible 10-year journey, Lee. But I think what's most incredible are the things that haven't changed, which are also the things that make the next decade, Insulet's best. Insulet was founded by a father who looked at injections and tubed insulin pumps and said there had to be a better way. And that drive to find a better way is what fuels all of us at Insulet and me every day, and we show up in order to find innovative ways to deliver better technology to go to market like pioneering into the pharmacy channel.

And that spirit just flows through who we are. So that hasn't changed and is at least as inspiring today as it was a decade ago. Similarly, despite the technology renaissance in AID over the last 5 years. And it has been remarkable what we're now able to do for people with diabetes. The markets that we serve remain large and underpenetrated. There's 1.8 million people who live with type 1 diabetes here in the U.S. and less than half benefit from AID despite it now being recommended in the strongest possible way in ADA guidelines as standard of care.

There's 2.5 million people who live with insulin-intensive type 2 diabetes in the U.S. and about 5% of them benefit from AID despite it now being recommended for consideration in standards of care. And in just the global markets that we serve, there's almost 4 million people who live with type 1 diabetes and only about 25% of them have the benefit of AID, again, despite strengthening guidelines. And so Lee, despite all the progress of the last 5, 10 years, the markets that we're in remain large, underpenetrated and there's just enormous unmet need. And so those things haven't changed. But a few things have. And we are a much larger, much more sophisticated organization than we were when I joined.

We now serve 26 countries around the world 20 with Omnipod 5. And we built manufacturing scale that we can advance -- excuse me, invest in ahead of demand to be ready to deliver growth this year. We're on track to add more customers this year than we had when I joined the company, and that requires scaled sophisticated manufacturing capabilities. And we have the most exciting innovation pipeline we've ever had with Omnipod 6 and type 2 fully closed loop and more to come. So Lee, when we look at our drive to improve lives, the large underpenetrated markets and the sophisticated capabilities we have to drive impact at scale. Our next decade is the best one.

Awesome. Excellent. So lots to dig in on there. Thank you for that. Okay. So starting with -- you reported a really strong Q2, 23% organic growth, solid new customer starts, 20% U.S. Omnipod growth, 33% international Omnipod growth and 140 bps of operating margin expansion. Investor focus, of course, has been on the revised U.S. outlook and the evolving views on the type 2 opportunity. So let's start there. It's been almost 2 months now since the Q2 call. Could you maybe share a little bit your latest thinking on the type 2 opportunity and any early feedback on the corrective actions that you outlined on the Q2 call?

Yes. Lee, maybe 2 things. One, before I jump into type 2. As you said, we delivered a very strong second quarter and the fundamentals of the business and the growth that we're driving are significant. You called out more than 30% revenue growth international and more than 20% customer base growth globally. And so we're proud of the fundamentals of growth that we're executing. We're also -- we remain really excited about the long-term type 2 opportunity. As I said a few minutes ago, there's more than 2.5 million people who live with insulin-intensive or basal bolus requiring type 2 diabetes here in the U.S. And only about 5% of them have the benefit of automated insulin delivery technology today. And what I see out in the real world when I'm out with customers and our team is just the incredible diversity of people who live with type 2 diabetes whose lives are being transformed by AID. I heard about a 100-year-old woman in Maine who was using Omnipod 5. I've heard about folks who live in nursing homes who are benefiting from Omnipod 5. And so Lee, that unmet need is enormous and the diversity of people whose lives are changing is tremendous. And we look at that opportunity and the proven clinical impact and the fact that we drove 40% of our new customer starts in Q2 from type 2. And what we see is large unmet need, large opportunity and a proven market that we can go drive growth in. So our enthusiasm is really high for the type 2 opportunity.

Great. Excellent. Okay. So let's maybe dig in on some of these kind of corrective actions that you outlined on the Q2 call. First of all, you framed this type 2 churn issue as being kind of concentrated in that first 90 days after which retention stabilizes. And you highlighted tweaks to the sampling program as kind of the key leverage point. Maybe can you talk a little bit more about just how you're changing the sampling program and any sort of early signals from that?

Yes. Lee, as I just described, about 40% of our type 2 -- excuse me, about 40% of our new customer starts were coming from type 2 in the second quarter. And as we called out, we had more customers attritting during the first 90 days than we were happy with. And so we are taking 4 actions in order to ensure that customers who start on Omnipod stay durably and continue to have their lives improved by the technology.

And those 4 things include changes to the sampling program, some changes to field incentives to ensure that they're rewarded for durable growth in podders who are continuing to have a good experience, ramping our service teams and accelerating the launch of Omnipod Discover, our digital health platform that also provides insights and education directly back to people with diabetes. And so we're confident that those 4 actions that we're taking together will help us address the higher attrition that we saw in type 2 in the second quarter. Zooming in on sampling for just a second, what we're really doing is we're improving the workflow associated with deploying samples.

We know that having looked at territories across the country and looked at where sampling is being done well and where we have opportunities, we see that when there is a clear protocol for assuring that we get the script written, if there's a prior auth that gets done, that we have the right kind of conversation about coverage and that the customer knows how to get support from Insulet, that, that will be a durable start. And so what we're just pulling through is that playbook all through our commercial footprint to make sure that our sampling goes as well as we know it can.

Got it. It's about like adjudicating the script either before or during the sampling episode so that when the patient is done with the sample, they're ready to get the additional...

You got it. It's just making sure that the customer is ready and supported as they're getting started on the sample to become a long-term customer, and that's what we're pulling through across the country.

Okay. Great. Let's hit all 4 of those actions that you just outlined. So you also mentioned that you tweaked sales force incentives to place greater emphasis on durable starts and early customer success. Those incentive changes can be really powerful drivers of change. Sometimes you get unintended consequences. What specific behaviors are you trying to motivate and maybe talk a little bit more about how you've tweaked those incentives?

Yes. The -- Lee, we are very mindful of wanting to make sure that our field knows exactly what is required of them and that their actions drive the growth and success of Insulet. And we have incredible people in our field teams, and they want that. They show up every day in order to improve the lives of people with diabetes. And so what we're really doing as we adjust these incentives, we're making sure that those early actions are executed well. So we're arming them with the best practices of how do you start a type 2 customer? How do you make sure that they know what needs to happen during that early stage of the journey so that if they need support along the way, they know how to get it? And we're pulling through -- we're arming them with those best practices and adjusting their incentives so that they're focused on continuing to drive growth and the durability of that growth. And we have confidence in those changes that we're making.

Yes. Okay. Great. Okay. I think the next one you mentioned was changes to customer service teams, I think both customer service teams and clinical retention specialists. Maybe can you talk just a little bit about those 2 roles and what you expect from people in those roles?

Yes. I think, Lee, the simple way to think about it is we know that in the first 90 days, a little bit of extra support can go a long way. And so we're making sure that as folks confront their first pod change, their first sensor change, their first vacation, whatever it is, that we are ready to provide a little bit of education about what diabetes is like during those moments and how to get the best from Omnipod during those moments. These are teams that we've actually tested at pilot scale and now that we're scaling. And so we have high confidence in the impact that we'll be able to drive by scaling these and making these available to customers during that first 90-day journey.

Yes. Got it. And these are kind of office-based reaching out by phone to patients kind of thing?

Correct.

Yes, yes. Okay. Great. And then Omnipod Discover was the last one you mentioned. It's going to go into full market release next month, October. You said that Discover can help create a more complete view of each customer and enable personalized 2-way engagement. In practice, how is that data going to change a patient's first 90 days or help clinicians manage patients more effectively?

Yes. Lee, maybe if we just take a quick step back. Omnipod Discover is a 2-part digital health platform. One part is a platform for physicians that provides the information required for a physician to care for a person with diabetes in the most efficient possible way. We've done a lot of testing with health care providers wanting -- seeking to give them back even just a couple of minutes per visit and help them really focus on how can they best help the patients across the desk from them, and we've gotten tremendous feedback from clinicians on that. The second part is different than a lot of these platforms that are in the market today. We designed Omnipod Discover to have a person with diabetes facing interface. And what that does is there's 2 parts to that. Every week, folks who are enrolled get an SMS from us with some insights in the same way if somebody has a fitness tracker or a sleep tracker or something like that, that provides insights.

Every week, we send an SMS with some insights. And those insights look back on the experience that, that customer had during that week and just offer suggestions, reinforcement, support, congratulations. And ultimately, just a little bit of knowledge. And funny enough, yesterday, I got an e-mail from somebody that's been in limited market release. There's about 10,000 -- more than 10,000 people in the U.S. enrolled now. And I got info from somebody who said, look, that little bit of education, knowledge is power.

And they had a more than 20-point improvement in time in range just from learning about their own diabetes from Omnipod Discover and credited Omnipod Discover with the improvement. There was nothing changed from their clinician, nothing changed from their technology. No settings changes, just they're learning a little bit 3 minutes a week from Omnipod Discover. And so what we've seen in the limited market release is both significant clinical impact and retention impact, positive retention impact that as folks learn and get support and education that they stay on Omnipod. And so between now and the end of the year, we are accelerating the full market release so that all of our new customers get enrolled in Omnipod Discover and can get the benefits like the gentleman that I just mentioned.

That's great. That's great. You said 3 minutes a week is that's sort of the average that people engage with the...

That was that particular gentleman. I mean, look, it's a link that you can just click and you'll get a page of insights that says, look, here are the days you went well, here are some patterns that we see and here are some suggestions if you want more information for where you can learn more about your own care.

That's great. So just that engagement clearly could lead to better retention, you would imagine. And you've already noticed that a bit in the limited market release. Is that fair to say?

That's correct. Yes. In the limited market release, we've seen both clinical outcome improvement and retention improvement. And so we're really excited to scale that to full market release between now and the end of the year.

That's great. Excellent. Okay. On the Q2 call, you also talked just a little bit about real-time data to track KPIs. I wonder if you could give us some examples of some of those like leading indicators that you're tracking now.

Yes. Lee, we have the benefit of a cloud-connected system that we get data from every 5 minutes that a pod is connected to a controller. And so we're evolving how we look at that data and use it to understand what's really happening. We know, as an example, that customers will take pod breaks. And they are still our customers, even if they've taken a break, we have -- we know from looking at this that they will come back. But there's business reasons that we may actually want to just look at how many people are activating pods every week, even if that's different than how we think about our customer base. And so we're now sort of reimagining how we use this more real-time data that we have to pay even more attention to trends that we see in the business and to be able to respond faster when we see things changing.

Yes. Okay. Excellent. Excellent. Anything you can share in terms of recent trends coming out of those? Maybe not yet. I don't want to front run Q3, but...

Yes, I was going to say we're not providing an intra-quarter update. As we look at those indicators and our existing KPIs, and we are tracking carefully the 4 interventions that we spoke about, changes to the sampling program, field incentives, scaling support and Omnipod Discover. Look, metrics are aligned with our expectations. We have confidence in the plan that we're executing, and we're watching closely so we can keep driving execution quality on that plan.

Okay. Excellent. So from a modeling perspective, as we all think about how to consider this over time, we know that type 2 annual attrition rate has trended somewhere between 20% and 40%. What do you need to see in the field to give you confidence that attrition could be at the lower end of that range or maybe even lower than the low end of that range over the longer term?

Yes. Lee, maybe 2 things that I'd call out, Lee. The first is we pay a lot of attention, a lot of attention to retention after 90 days because if you think about what is the structural indicator of the health of the business, it's once somebody is a customer, once they're part of the customer base, how long is that relationship going to be. And so part of what gives us confidence and why when you asked about the type 2 opportunity, I said we're really excited about it is that, that retention after 90 days is high. And it has stayed high for type 1. It has stayed high for type 2. And so when I hear your question, we have confidence in the health and durability of the business because that post 90-day retention is already in a place that it's very healthy for both type 1 and type 2. What we're focused on with the 4 actions that we've been talking about is improving that conversion from start to durable. And so we're really focused on how do we get more people from the day they start Omnipod to that 90 days when we know they're going to be long-time customers. And those are the more real-time measures that we're just talking about watching, and we got to execute those 4 things over the next couple of quarters. We said we're going to provide an update on our Q4 call in February. And for now, we're confidently executing that plan.

Okay. Excellent. Excellent. Just thinking about all the scenarios, is there a scenario where type 2 attrition ends up being kind of a little structurally worse than you thought it would be maybe the higher end of that 20% to 40% range, particularly as we get past these early adopters and get into the broader population of people with type 2?

Short answer, we don't see that. And we don't see that there is a risk that type 2 attrition is structurally much worse than we've understood it to be for 2 reasons. The first I just mentioned, which is that the post 90-day retention is strong for type 2. And so that tells us once we get folks there, it's a durable business model. The second thing is, as we've dug into the data, we see that there are opportunities in our execution with the 4 levers that we just talked about to improve that conversion from first start to the 90 days. And so I think from what we see, Lee, we're confident we can address the from start to 90 days, and we already know that beyond 90 days, the retention is strong.

Yes. Okay. Great. So just summing up the type 2 opportunity, I think I hear the conviction that once you get past that first 90 days, these are durable customers, durable users. Where could type 2 IIT penetration go longer term, 3 years, 5 years? I mean, are you willing to talk about just what that range could look like?

Yes. When we did our Investor Day last November, we talked about it getting to the 10% to 15% range from about 5% by 2028. And notwithstanding this conversation about us having more attrition in the first 90 days than we're happy with, the raw number of customers that we're adding so NCS less attrition, we're on track to drive that kind of penetration. And so we're pleased with how the type 2 market is developing. I think when we take a step back and we look beyond that, Lee, we see opportunity for it to go significantly beyond the 10% to 15%. We look at where CGM is today, and that's always a source of inspiration and analog we pay a lot of attention to, and they're about 55% today in the type 2 IIT.

And that's part of what inspires like our type 2 fully closed loop, which is a disruptively simpler system designed to bring AID much deeper into primary care. And in order to do that, we have to take out a lot of the physician burden, which we've designed out of that system and take out a lot of the technology interaction requirements for the person with diabetes, which we've designed out of that system. So I think we draw inspiration from where CGM is at 55% as part of why we're innovating with our type 2 fully closed loop. And we're excited to take it a long way beyond the 10% to 15% that we see it getting to in the 2028 time frame.

Great. Excellent. We'll circle back on that fully closed loop. Just a quick question on basal-only users. Of course, you've got some wood to chop on the type 2 IIT 90-day retention issue before you can start thinking about basal-only users. But you have an indication there and you've got good clinical evidence that AID can improve outcomes versus basal insulin shot. What's your latest thinking on the longer-term opportunity there with basal-only?

We remain optimistic about the long-term opportunity for basal-only. As you probably know, we had about 20% of the people in our SECURE T2D pivotal study that actually were on basal-only and went straight to AID. And as you might expect, we get a number of new customer starts today of customers who are coming straight from basal-only. As you described, our commercial priority today is to penetrate the IIT market, the type 2 basal bolus market. But over time, we see real opportunity in the 3 million people who are taking basal insulin too. And maybe just to characterize that, the people who are already coming on are people with very high A1c for whom AID is life changing. And so back to kind of the core of who we are, we see an opportunity to change lives and continue to unlock another market segment to drive growth over time.

Yes. It does make more sense kind of physiologically for those people, right? As you're giving them insulin when they need it.

As they need it.

Okay. Okay. Quality. Let's just -- one quick question on quality. Your ability to manufacture at scale is obviously key to your competitive moat. A couple of recent medical device corrections have put added focus on quality. What have you learned from those recent issues? And what changes have you made in response?

So Lee, as we shared, we've fully addressed the handling challenges in our factories. What we learned, taking a step back, we learned that there were places in our factories where we were handling sensitive parts of the cannula in ways that allow damage to happen, and that's unacceptable to our customers, and we've addressed it. And we've examined our factories across manufacturing processes to make sure that there aren't other opportunities where similar damage could occur, and we've implemented corrective actions to address that. More broadly, we have just a really strong commitment to quality. We've been on a long-time journey on the belief that, look, we earn our customers every time they put on a pod. And so that trust and the experience is paramount.

And moments like this just redouble our commitment to continuously improving quality for our customers. I think, Lee, the other big picture learning is we also plan our supply chain with enough resilience to be able to get through moments when there's disruption. And this year, despite the disruption, we're proud of the fact that we didn't miss a single shipment to customers. And that's a testament to the supply chain resilience and global capability that we've built.

Yes. Great. Okay. Excellent. Manufacturing these things at scale is not easy. You guys have been doing it for a long time. Okay. Let's hit the pipeline. You've highlighted Omnipod 5 algorithm enhancements plus Discover in 2026, Omnipod 6 next year and the type 2 fully closed-loop algorithm in 2028. Maybe can you just elaborate one by one on why you're excited about those 3?

Yes. As I mentioned earlier, we've got the most exciting innovation pipeline we've ever had, Lee. And the launch earlier this year of our second-generation algorithm -- it gave people an option for a lower target glucose, which gives people an option for tighter glycemic control with no increase in hypoglycemia has been really well received by customers since launch a couple of months ago. In addition to that, we launched the FreeStyle Libre 3 integration, helping Omnipod 5 connect with the 450,000 or so people with diabetes who use FreeStyle Libre 3 Plus here in the U.S.

And we talked a lot about Omnipod Discover and the impact of that will have on people with diabetes and streamlining office visits for health care providers. So 2026 has been a terrific year for innovation at Insulet. We're even more excited about next year with the launch of Omnipod 6, Lee. Omnipod 6 brings a new automated insulin delivery algorithm that delivers more automated insulin with less bolus burden. So it's an opportunity for people to get even better clinical outcomes and interact less with the system. It also has new hardware to -- that gives dramatically improved wear flexibility. We know that true wearable experience, people want to wear it where they can take an injection of insulin. And as sensors have gotten smaller, AID devices had to be closer and closer to sensors, somewhat limiting wear flexibility.

And we've made the investments in the technology and manufacturing to address that Omnipod 6 offering people dramatic wear flexibility, they expect. And finally, it's a single SKU updatable pod. So it simplifies prescribing for health care providers, and it accelerates future innovation to customers by allowing us to push updates directly to pods that are in customers' homes rather than having to put new technology on pods in our factories and ship them through the channel. So we're incredibly excited about Omnipod 6. And finally, we spoke a little bit about our fully closed loop for type 2 already coming in 2028. That system is in pivotal study now. Enrollment is progressing well. And that is a disruptively different technology.

So as I described, that's a technology where the physician does not need to put any information about insulin into the system. So they write a script and the customer goes to the pharmacy to pick it up and the customer starts in a very CGM-like way. So they self-start. We were just doing studies of this in people's homes in Oklahoma, having people self-start on an AID system with no manufacturer or health care provider intervention. They put on the system, wear it for 3 days and live. And that sort of disruptive simplicity is what we know is required in order to break down the barriers to adoption, which are that today -- we're proud of the fact that there's 30,000 writers of Omnipod, but there's more than 100,000 writers of CGM.

And if we want to get penetration in type 2 to where it is in CGM, we know we need to dramatically broaden who can write and that's what we're doing with type 2 fully closed loop system coming in 2028.

Okay. Excellent. Great. Omnipod 6, 1 clarification. The algorithm there is already cleared. You're just waiting on the full system clearance. Is that right? The plan is 2026 -- or 2027, sorry.

Correct. Omnipod 6 will come in 2027. We have gotten the algorithm clearance, and we have the system submission coming up. So we're working through regulatory and working through launch readiness.

And then clarification on fully closed loop. You talked about starting with type 2 here. Why start there? And is there a potential for type 1 fully closed loop?

So we're starting with type 2 because of the opportunity that we just described. I think when we say fully closed loop, what we really mean is a disruptively simple system that does not require input from a physician or from a person with diabetes. And that design profile is what unlocks the 70% of the type 2 TAM, the almost 2 million people who are cared for by primary care. Those primary care providers, we are slowly penetrating them, but it's a few thousand at a time. If we want to unlock tens of thousands of those writers, we need a disruptively simple system. We're starting with type 2 because we can do it, and we see the opportunity and the unmet need to go bring AID technology to those people. We are also advancing what we think of as a hybrid closed-loop system that some people will use as a fully closed loop system and choose not to engage and choose not to bolus.

So we're launching Omnipod 6 as the next step in that regard next year. And we've already said we'll be launching another algorithm update the year after that with continued algorithm improvements to come as we push towards the system doing more and people doing less forever.

Got it. Got it. So recognition that some type 1s want to have that flexibility to bolus when necessary. And I think that's one of the nuances in the conversation about type 1 fully closed loop?

Yes. I think in our research, most type 1s actually want the flexibility to engage. And so we view as we keep building better and better hybrid closed-loop systems -- that will be a system that most people with type 1 will choose and some people with type 2 will choose to want that engagement too. But having the portfolio of a system that it requires much less of both health care provider and person with diabetes is what unlocks almost a 2 million person type 2 TAM that just can't be served with a hybrid closed-loop system where there's more to learn and more to manage.

Yes. Got it. Okay. Let's talk about competition. One of your competitors got FDA clearance for their patch pump just 10 days ago. They're planning for U.S. launch in Q1 of 2027. They've got a 2-piece architecture with some reusable electronics, which means they can do those over-the-air software updates. There's no need to re-pair the Bluetooth during patch changes and there's less waste versus fully disposable option. So maybe just talk a little bit about how you think about those claims or how you respond to those claims. How does the world change with competition?

Yes. Lee, maybe a couple of big picture thoughts before we zoom in. I think first, just back to being a large and underpenetrated TAM, if you look at what's been happening in the market, patch has been the almost sole source of market growth. And so as we see the need to drive more penetration having more players with products that customers want is a good thing to help get technology in the hands of people who need it. And so we think the patch category is going to expand significantly with there being more entrants. Meaning that both AID will expand and patch as a fraction of total AID will expand. And we see that as a good thing for getting technology in the hands of people with diabetes.

I think as we then look ahead, we have confidence in 3 things. The first is that we will sustain technology leadership. There is only 1 fully disposable automated cannula inserted waterproof wearable AID system. And that's Omnipod. And I met a guy at ADA last year, who would climb Mount Denali taking Omnipod with him with the confidence that if he had a problem, he'd have a backup pod, and he could keep going, right, at Mount Denali. So I think the reality is there is a huge amount of security and ease of use that comes with the fully disposable form factor that's a little bit underappreciated until people have lived 1 way or the other with it.

Additionally, we're continuing to innovate. We just talked about our pipeline, Lee, but Omnipod 6 is a tremendous product that we know will be a delight to customers and we're going to keep innovating beyond that, too, with our updates in 2029, and we're already hard at work on stuff beyond that. So we have confidence we're going to sustain technology leadership. The second thing, we talked a little bit about manufacturing and supply chain and readiness to execute at scale. But just to dimensionalize that, we will have added more than 100,000 incremental customers per year in 2025 and 2026. If you just look back on our disclosures. We added more than 100,000 in '25. We've said we'll add more than that in 2026. At 120 pods a year, that's more than 25 million pods worth of capacity that we had ready for incremental demand last year and this year.

And we're ready to keep doing that in 2027 and 2028 to keep driving growth. And so Lee, I think the second big thing that gives us confidence in continuing to sustain and extend market leadership is our operational readiness to keep driving the market and serving the growth that we are creating. And the third piece is we have a large recently expanded talented field team and a beloved brand that's loved by 600,000 podders and respected by health care providers around the world. And we are using our leadership in the market to keep expanding our commercial footprint. And we've recently invested in clinical and competitive selling training for our field because we've been used to selling on form factor.

And the reality is Omnipod 5 delivers life-changing clinical benefits that we haven't been selling all of. So between our confidence in sustaining technology leadership, operational readiness for continued growth at scale and leading commercial footprint that is now even readier to sell clinically and competitively in a more crowded marketplace. We're confident in sustaining and extending leadership.

That's great. Thank you for that. Excellent. So -- the market, of course, is getting a little bit more competitive with 2 more competitors hoping to launch patch pumps in the U.S. by the middle of next year. Some additional new features there, 7-day wear a couple of well-liked algorithms, one offers flexibility to switch between tube and tubeless. One of them has a 300-unit reservoir. Maybe one way to get at the question is, you've been really successful for a long time with 1 form factor, which limits complexity and helps your margins a lot -- as the market gets more competitive, do you see Insulet offering a broader portfolio over time? Or do you think the current approach is the winning approach.

There's a lot of success in simplicity, Lee. And I think what we always work back from what our market needs. And what market needs are improve outcomes, reduce burden and remove barriers to access. And so we just worked back from those 3 things and improving outcomes, we're focused on algorithm innovation to keep improving outcomes. In terms of reducing burden, the fully disposable easy-to-use form factor and algorithms that require less of people. Those are the best ways to reduce burden. And in terms of removing barriers, that's why disruptive innovation like our fully closed loop for type 2, removing barriers to technology by bringing it to tens of thousands of potential new prescribers are so important. And so I think when we just take a step back and we look at what are the market needs and how do we best meet them. We have confidence that the technology and the portfolio that we are working toward are the right ones.

Yes. Okay. Great. Excellent. Just one on pricing. You mentioned on the Q2 call that as new competitors have entered the pharmacy channel, both Insulet and other players have remained disciplined on price so far. Can you just elaborate a little bit on what you're seeing in the pharmacy channel lately?

Lee, as we shared on our Q2 call, the pricing environment is stable. And for us, that means flat to slightly up. So at this point in the year, we are well through -- we're well into negotiations for 2027, and those are proceeding in accordance with our expectations.

Yes. No change expected on that front. Okay. Great. Let's hit international briefly. The international business has been a major source of growth for Insulet. 75% of the OUS DASH installed base has now converted over to Omnipod 5 but there's still plenty of opportunity outside the U.S. Maybe can you frame some of the big drivers of OUS.

Yes. As you mentioned Lee so far through Q2, our international business has been standout growing more than 30% plus year-over-year. As we look ahead to 2027, that is cause we are 75% converted from DASH to Omnipod 5, we'll get a bit less of the price/mix realization that we get from that conversion in 2027. So we'll still get it, but it will be less. And so most of our growth in 2027 will be volume. And we're driving high levels of volume growth today, and we expect to continue doing that in 2027. A couple of catalysts for that. In July, we just entered Spain with Omnipod 5. That's a direct market for us, typically one of the top 5 med tech markets, and that's a great new entrant that we're excited about driving in 2027.

Second, we're launching our Libre 3 integration in both Germany and Canada between now and the end of the year. Those are both markets where sensor of choice is important, and this will be the first time that we have a Libre integration in those markets because Libre 2 was actually not available. And so we're excited about being able to drive some incremental growth in both of those. And finally, we have high share and are focused on continuing to win share to drive new customer start growth year-over-year. And so together, that's what gives us confidence in high level of growth that we communicated as the framework.

While thinking about 2027 and taking a big step back, the market is only 25% penetrated. So we're continuing to work on the more systemic things that have to be done like in the U.K., Peds penetration is now pretty good.

We're focused on helping get adult penetration up. And in other markets, it's sort of different in each one. But we're working on both driving growth, winning share, launching technology and breaking down the systemic barriers to help adoption rise.

Okay. Amazing. Last 2 here, just to close. First, we're expecting LRP update on the Q4 call. Between now and then, what are the real operational metrics that you're monitoring most closely to give you confidence in that refreshed LRP?

Yes. Lee, we're focused on delivering is the short answer. So we are always watching how we're doing on retention, how we're doing on new customer starts and pricing, ASP and utilization, which we've just talked about. So these are the metrics by which we run the business. And in this moment, we're really focused on those. And we're -- as I described, we're also watching some more real-time indicators, especially for retention so that we know that our execution plan, 4 points that we spoke about earlier on retention is having an impact.

Okay. Great. Excellent. So just wrapping up, over the next 12 months, you've got some work to do on several fronts, improving the first 90-day type 2 experience, rolling out Discover, responding to these competitive launches, preparing Omnipod 6, maintaining that strong quality control. What are the couple of 2, 3 milestones that would give you confidence that the company is on track to maintain market leadership?

Lee, what has been true for my whole 10 years at Insulet is that success comes from seeing what needs to happen and then executing those things. And in this case, on the -- how do we address type 2 retention, we see clearly what needs to happen. And those are the 4 things that we've talked about. That's changing the playbook for sampling, that's adjusting field incentives, adding the support during those first 90 days, and it's accelerating the launch of Omnipod Discover in the second half of the year. So we see it, and we're focused on executing it. For Omnipod 6, we see the opportunity for a really impactful launch of Omnipod 6.

As you mentioned, we've already got regulatory clearance for the algorithm, and we're focused on executing the regulatory clearance for the system and getting ready operationally for a really impactful launch. And then we're also focused on getting this fully closed loop for type 2 pivotal study complete and getting that ready for submission in 2027. When we do those things and we deliver the operational metrics we're always focused on, that's what gives me confidence that the next decade is our best, Lee.

Excellent. All right. Great. Well, thanks so much for being here, Eric. We really appreciate it.

Thanks, Lee.

Larry Biegelsen, the medical device analyst at Wells Fargo. And it's my pleasure to host this fireside chat with the management team from Insulet. With us, we have Ashley McEvoy, President and CEO; and Flavia Pease, Executive Vice President and CFO; and Claire Trachtman, Head of Investor Relations. Ashley and Flavia, thanks so much for being here.

Thanks, Larry. Pleasure.

Thanks, Larry.

So Ashley, it's hard not to start with the Q2 update. So -- or update. So let's start there. You took down guidance because of 3 issues: lower retention and utilization in type 2. Lower new starts due to softness in Q1 and less pricing. 2/3 of the change was due to the type 2 issue. And probably the #1 question we've been getting, and my guess is you, why was this such a surprise?

Yes. I mean, Larry, first of all, it's great to be here in Boston, our hometown. Before I get into the timing and the data, let me just first share our perspective on the type 2 market, which we see as a tremendous growth opportunity for Omnipod as well as the AID category. It's the largest TAM in the category with the lowest penetration.

If you look at the 2.5 million people who are using basal/bolus insulin, AID has around a 5% penetration and CGM is well north of 50% plus in that area. In the basal-only population, we have the indication. We haven't yet promoted that and CGM is around 30% penetration. So collectively, that represents about a $28 billion TAM.

The second is the ADA guidelines recommend AID for people with type 2 diabetes because it has a superior clinical and economic value proposition to MDI patients. We pioneered this indication on behalf of the industry. We have tens of thousands of very satisfied podders with type 2 diabetes. And so we are very committed to nailing the first 90 days, so more people can benefit. And as you know, we enjoy a reoccurring revenue business model. So it's really about the lifetime value of the patient.

Now when it comes to timing and the data, Larry, we saw late in quarter 2, some of the trends start to elevate versus our expectations. We did a very strong forensic. We identified with the root cause. We've implemented actions on those. One of the areas that we've innovated on is really the transparency and the frequency of some of our KPIs. Attrition, as one example, is a bit of a lagging indicator. It allows for people to have a pump holiday, if you will. And so we've addressed that of looking at some of a more real lifetime data of our KPIs.

I will tell you, it's early on. It's been less than 30 days, and some of these programs are going to have time before they have a durable effect. So in the headline, I'd say this is an execution challenge, nothing to do with the structural advantage or attraction of the market, and we were acting with urgency.

That's helpful. I mean why was there an uptick? You just mentioned a minute ago, an uptick at the end of Q2. Why do you think there was an uptick?

Yes. We -- I would say it was -- it happened. We saw it trending ahead of our expectations at an elevated rate in quarter 2. And we've identified several root causes of why we saw some elevated attrition levels, and we're taking actions. Those 5 actions I spoke about on the quarter 2 call, I'm happy to elaborate more.

That's helpful. We definitely want to hear about the actions and the progress. Just with first, the math, historically, we've had about a 10% attrition rate in our model for Insulet when you were mostly a type 1 company. You also on the call confirmed that type 2 attrition runs at least double type 1. So it looks like the type 2 attrition is, by our math, close to 40%, which is pretty high. Are we in the right ballpark? And again, maybe now talk about the progress you're making trying to addressing that.

Yes. I mean we -- again, we've been at type 1 for 25 years. We're newer to type 2. When we were setting our expectations, we studied the CGM analogs. Again, they've been at serving the type 2 community, both basal/bolus as well as basal-only for more years than we have. We looked at what good would look like.

And we -- again, as I said, we saw an elevation versus that. They're not near the levels that you mentioned, Larry. But importantly, we're getting after that. And again, we have a recurring revenue model, so it's worth it for us to nail the first 90 days. As I shared, the demand is really strong, and the data will show that once we get them past 90 days, retention rates really stabilize.

So there are several things that we're doing. The first thing is sampling. So we deployed a sample program to, kind of, demystify the fear of trying AID therapy. The vast majority of the volume in AID is coming from the MDI category. And so for some, there's a fear factor of wearing insulin on your body. So we deployed samples. We uncovered when we did a territory analysis that in certain territories that we had a prescription that accompanied the sample. And when we adjudicated the health insurance, we had much higher retention rates. So we've tightened up that best practice and are now deploying that across the country.

The second thing we did is related to our sales force incentives. Again, going from a type 1 company to a type 2, we needed to evolve. We are still ensuring that we have good quality new customer starts, but we're also going to hold them accountable for durable starts, that first month, that first 30 days. I was in the field last week. They're very enthusiastic to win with the company on patient success.

We've augmented our customer service reps to make sure that we have the right, kind of, resourcing and staffing. We've also added clinical retention specialists that we're now deploying in the field. And then we've launched a new data platform, which enables really strong patient engagement and clinician engagement, and that's called Omnipod Discover.

And in our limited market review that we were doing in quarter 2, we had around 12,000 people with diabetes in the program and around 1,600 clinicians. We saw not only just stronger customer satisfaction, but we saw elevated retention levels. So it's worth it for us to nail the first 90 days. We see a tremendous opportunity of growth ahead of us.

That's helpful. Okay. I have to go back to the 40%, which you said was too high because we've used 10% for type 1. And when we talked after the Q2 call, you said that the blend of U.S. attrition is likely higher than mid-teens. So we just tried to back into the 40%. So just -- so help me understand where my assumptions are wrong.

No, I think we said that it's more than double. It's trending more than double that. And we don't disclose what our retention rates are now. It's something that we're looking at maniacally, so I have confidence in that. We're going to talk more about how these programs are progressing on the quarter 3 call.

But we -- importantly, we're looking, Larry, at what our active customer base. All of our data goes to the cloud. So we can see lifetime the health of what our active customer base is and then see the flows in and out. So you'll see us continue to start to drive the business more on real lifetime data sources.

Blended attrition rate, mid-teens, is that a good number? Because that's the number people have in their -- we use in our model.

I think what I would say is the 10% on type 1 is what we've talked about before. And as we said, type 2, we had already assumed that it would be higher than that. It was elevated versus our assumption, and it's not as high as the 40% that you disclosed.

And one on -- basically, your competitors are saying they're not seeing the same issue with type 2 retention. You've probably heard that. Any -- what do you think the disconnect is?

Yes. I mean we were the first -- I think they're very early on. We have a little bit of a head start from them. We were the first to pioneer the indication. Again, we have tens of thousands of very satisfied people with type 2 diabetes using OmniPod. We have very strong demand.

We did some of this when we didn't have really tight governance on our sampling. So we're addressing that. And we're -- I would say we're ahead of the curve of making sure that we deliver delightful customer service the first 90 days and all of our commercial leaders line up to what company success looks like.

Okay. And your guidance for 2026 assumes no improvement from the Q2 trends. Do you think you can start to see a benefit in 2026 from the actions you're taking and therefore, the updated guidance is fairly derisked?

Larry, I think the way we think about guidance is we took a prudent approach. As we said, we are not assuming, as you just stated, any impact of these measures. They will occur over time at different speeds. Some of the things that Ashley mentioned, the change in the commercial incentives and the change in sampling are already being executed, but we expect that they will have an impact by the end of the year.

Discover will go into full market release next month. So the impact is probably more next year. And similarly, with the customer care and retention specialists, we are ramping up their onboarding. So it takes some time to get them onboarded, to get them productive. So the impact will be more next year. So that's why the approach to the guidance is to assume that we are executing on these strategies, but that the impact won't be felt this year and is not contemplated on the guidance.

Got it. More of a maybe check the box question, but GLP-1s continue to be a hot topic, especially for the type 2 population. What gives you confidence that it's this execution issue that you talked about, not GLP-1 usage showing up in your base once patients are a few months in?

I mean, we saw very healthy demand, as I talked about on quarter 2 and year-to-date. And again, they're staying post 90 days, retention stabilizes. So we don't see the use of GLP-1s having an impact on the first 90-day experience. I mean we view GLP-1s as very complementary and not a substitute to insulin. The data and the evidence would show that it can slow the progression by about a year to when insulin is initiated. But we've seen very stable rates of insulin initiation over the past 2 decades where GLP-1s have been indicated for diabetes.

And the unmet need is that the vast majority of people with type 2 on insulin, they are using a GLP-1, but predominantly, their primary source of insulin delivery is MDI. And 2/3 of those are not achieving glycemic control. And so that's why the ADA guidelines recommend AID as the standard of care. And we think that there's a tremendous opportunity ahead for the category as well as Omnipod as a market leader to take advantage of that opportunity for the 5.5 million people on insulin and the vast majority of them not benefiting from AID therapy.

All right. Helpful. So we'll move on.

Sounds good.

So just next topic is quality and manufacturing. Manufacturing scale has been a key advantage for Insulet, but there have been concerns about quality as you scale. You've had 2 Class I pod corrections this year, and investors are taking a closer look at public adverse event data, the MAUDE database, which we know is flawed.

You should say that again, but...

But look, we're getting the question, and I'd be surprised if you're not getting the question. So has anything changed actually operationally? And why are you confident these issues are isolated rather than indicative of a broader quality trend?

Listen, as I mentioned, we weren't proud of those 2 medical device corrections. We did identify root cause analysis. We've implemented interventions to address that. We have a very rigorous post-market surveillance program. I see no new signals or no new quality events.

There were no reported fatalities related to those 2 MDCs. I'm very familiar with the MAUDE database. It's helpful for a surveillance tool. It does not establish causality in adverse events nor does it establish increased -- a change in rates. And any kind of MDR that was associated with fatality, we've assessed it, and we haven't identified any kind of issue related to Omnipod 5 safety.

Okay. Fair enough. I'd be surprised if you're not getting the question, too.

Absolutely.

So I had to ask.

Of course.

You gave some helpful color on 2027 on the Q2 call. I think you said you expect growth next year to be similar or better than the Q4 exit rate, which is mid-teens. And so we're assuming U.S. grows about 10%, international grows about 20%. Is that generally how you're thinking about the base case for next year?

Yes. I think the way you took our framework for 2027 is the correct approach, Larry. We talked about for both total company U.S. and international using the exit rates of the fourth quarter as a consistent way to think of 2027. We're not suggesting any acceleration of growth next year.

If you look at the updated guidance that we provided in the second quarter, it would suggest an exit rate for the total company between 12% and 17% on a constant currency basis. You can apply the same math for international and the U.S. Let me provide a little bit more color on the U.S. and international, what it means on those ranges.

The U.S. at the low end of the guidance would be at a 9% exit in 2026 that would contemplate essentially flat-to-down NCS growth next year, a mid-single-digit share loss of NCS and attrition and retention rates consistent with where we are today and price to be stable versus where we are today. At the top end of the range for the U.S. would suggest an exit of 14%.

Same assumptions around NCS, but it would contemplate attrition and utilization improving slightly and price to be slightly positive. So those are the building blocks as you think about the range for the U.S. When I turn to international, we see continued momentum and opportunity internationally, but at a more, I would say, moderate rate. And the reason for that, we've been talking about we are anniversarying the launch of Omnipod 5 in most of our large markets in Europe. In addition to that, we have been benefiting from price/mix realization as we convert from DASH into Omnipod 5.

We're about 75% converted, Larry, on that installed base. So that price/mix realization will slow down a bit. Having said that, we still have a tremendous opportunity internationally. It will happen over time. We just launched in Spain, as you know, in July. We're also continuing to grow in Saudi and the Middle East.

We have launches planned for Libre 3 in a couple of our large markets in Germany and in Canada. So all of those will continue to fuel momentum in our international business, but it will be at a more moderate pace. So to summarize it, we see our framework for 2027 as a jump-off point, consistent with the growth rates that we will exit 2026.

That's helpful. What's the range for international that exit rate you...

19% to 24%.

19% to 24%. And going back to the U.S., the mid-single-digit share loss for both scenarios. Why is that the right -- what's the thought process behind that? What are the assumptions? There's 3 potential competitors?

So obviously, as you just said, we know the market will become more crowded. We continue to have confidence in the differentiation of Omnipod, and we believe that competitors are going to continue to enhance the attractiveness of AID as a source of growth from MDI.

What we did model is, obviously, we have the benefits of our product launches this year. We did the enhancement on the algorithm of Omnipod 5 as well as our sales force expansion. And we essentially are assuming that those give us no benefit and that it will be offset by the more crowded market next year. So we'll continue to have NCS in actual numbers. It's just that the growth rate of that NCS will be flat to down.

Okay. And the attrition, basically the low end, no improvement in attrition.

Attrition and utilization. And then on the high end would be attrition and utilization, both improved from where they are.

And price stable, I think.

Stable on the low end and slightly positive in the high end.

Got it. Okay. Super helpful. And despite the reduction in the top line outlook, you maintain your operating margin goal of 100 basis points per year. So what's giving you the confidence in that? And why is that the right decision for the business?

We have a really strong financial profile, Larry. We are delivering top-tier growth. We continue to have gross margin expansion behind manufacturing efficiencies. We are disciplined in cost management, and we are investing in the activities that drive long-term growth, like innovation, like commercial capabilities, like the investments in type 2 that Ashley described.

So we are in this envious position where we actually can do both. We can continue to invest in the business to support that top-tier growth that I talked about and we can deliver 100 basis points of margin expansion. In fact, as you know, we actually also increased our adjusted EPS growth target to be better than 30%, showing the earnings power of the business that we have.

Okay. And Dexcom recently committed to a 10% revenue growth floor through 2030, 100 to 150 basis points of margin -- annual margin expansion and pledged at least 50% of annual free cash flow back to -- free cash flow to buybacks. So I guess my question for you, Ashley, is would you consider a similar kind of model algorithm that Dexcom has put out there?

Yes. I mean I would just build off of what Flavia said, which is we are committed to -- again, we're not guiding for '27, but we think that we can deliver like top-tier growth for the industry. We have a very compelling, I think, quality of earnings profile around really strong gross margin on efficiencies in manufacturing, really strong G&A efficiencies that allow us to continue to invest in the business.

And we have a very healthy EBITDA profile with a good attractive runway ahead of us that we are calibrating based upon the investments that we want to keep plowing in to drive category expansion and keep innovating on the S-curve. While investing in capacity, we're standing up our fourth plant. And so we enjoy a reoccurring revenue business model. And we're on the first 90 days, I would tell you, in T2, but that is going to be a meaningful growth opportunity for the industry as well as disproportionately for Insulet.

Maybe just to build on a couple of things, Larry. I think when you look at our financial profile, top-tier growth, with a framework that delivers margin expansion, EPS growth, strong free cash flow. And that puts us in a position from a balance sheet that is, I would say, enviable. We have a lot of flexibility to continue making investments, but we're also disciplined and thoughtful around capital allocation. And so when -- going back to your question, our focus is on long-term shareholder value creation. And we look at all options, and we're committed to continue doing that.

Got it. And when -- remind me of when we're going to get the reset on the LRP?

Post completion of our strategic plan, which is ongoing right now, I think in the second earnings call, we talked about providing an update likely in our fourth quarter earnings call.

Early next year.

Yes.

So Ashley, maybe one high-level question for you. Obviously, sentiment on Insulet has changed recently. What are you going to do to regain investor confidence?

Yes. I mean, listen, it's obviously a good buy opportunity right now. Let me first say that I think that we're undervalued. I mean we have -- one, we're focused on execution and keeping to deliver the profitable growth profile. We see ourselves as having very strong durable competitive advantages. One, it starts with the attractiveness of the end-state market in which we're the market leader.

Our market leadership is a very strong basis of competition. We have a meaningful lead versus others in the category. Three, we have, I would say, the most robust pipeline in our company's history about to hit, not just the next 3 years, but the next 5 years. We enjoy manufacturing and operational scale that we've earned over many years that are going to be very difficult to replicate. And our financial position is really unrivaled, and that gives us flexibility to continue to invest in innovation. And so I think our best years are ahead, and it's a good buy opportunity.

Okay. When you look at the revenue build, new starts, if you have attrition, 10%, 15%, call it, pricing flat, new starts have to grow, otherwise, revenue decelerates. And you said next year, the assumption is flat to down for new starts.

No, let me clarify. Our new customers we will have -- we will add new customers. Flavia was mentioning that the rate at which we're adding new customers, you should assume that, that rate is flat to slightly down. So we will add new customers to our pod business next year.

I got it. But the new NCS new customer starts, I heard flat to down in that 9%.

New customer starts, the growth rate of our new customer starts will be flat to down.

Flat to down.

But we're still adding -- like remembering new customers and...

Yes, we anticipate to extend our customer base next year and extend our customer base share next year.

But I think that if new customer starts are decline flat to down, that the growth slows over time. Is that fair?

Yes, and the growth.

The revenue growth slows over time.

Correct. And as we said, if you look at the parameters that I gave for 2027, it is a slowdown in growth versus 2026.

Okay. Got it. And Ashley, let's turn to the pipeline. You've got 3 major programs, new algorithm this year, Omnipod 6 next year and the type 2 fully closed loop algorithm in '28. How are you thinking about the impact of each?

Larry, I think -- I mean, as the market leader, again, trying to drive -- continue to drive the growth for the category, there's really 3 things that matter to drive adoption from MDI into the category. #1, our clinical outcomes, improving clinical outcomes. #2 is really reducing the burden of diabetes distress. Said differently, this is about improving quality of life.

And the third is around extending access to more prescribers and more patients. And all of our pipeline initiatives address all 3 of those. Beginning with this year, we're launching our second algorithm improvement. It improves time and range. It's a lower set point. It keeps people in automated mode. We're integrating with Libre 3 Plus, which gives us access to a patient pool of over 450,000 patients that are not using AID.

They're predominantly using MDI. And then we're launching our Omnipod Discover platform, which is patient engagement, and that keeps people has stronger retention and stronger engagement. We're then going to follow on next year. We will be on our sixth-generation Omnipod, Larry next year, which will be our third algorithm improvement. Again, we shared data at the ADA a feasibility of -- and we've gotten approval on the algorithm. We're waiting to get approval on systems integration that's forthcoming for our launch next year.

But in essence, it has improved time and range, improved time and tight range with 40% less bolusing. What people love about it, particularly type 1 is the antenna is improved. It lets you have a lot broader wear flexibility for anywhere in your body. And what docs like about it is it's only 1 prescription versus 2 prescriptions.

And then we will be following that with the industry, just like we pioneered for the industry, the type 2 indication, we will be launching the industry's first fully truly closed loop for the type 2 community. It's very analogous to a CGM experience. We shared data again at the ADA on our feasibility. It's in a pivotal clinical trial right now. We showed evidence of 12% -- 12 points of improvement in time and range.

We showed clinically meaningful improvement in A1c reduction, 30% less insulins used, no maintained weight. In addition to that, there's 0 bolus. You don't manually intervene with the product at all. The algorithm does 100% of the work. There's no manual titration. And importantly, there's no settings, which really unlocks the entire primary care audience.

So we think that, that will really open up. And clearly, there are things that we're spending money on that we haven't disclosed yet that we will make sure that we keep addressing these 3 fundamental areas that are going to unlock really adoption for this category.

And on the fully closed loop, it's -- you're obviously pursuing type 2. Some of your competitors are doing type 1 and type 2. What's the plan for type 1? And how do you avoid kind of being at a competitive disadvantage when they have that?

Yes. No, important question, Larry. Let me clarify. So we view our portfolio of having like the industry's best hybrid closed loop and having the best industry's truly fully closed loop. Omnipod 6, which is our hybrid closed loop that we're launching next year, again, I mentioned that we'll have 40% less bolusing. We're working on another algorithm improvement to that, which will be bolus optional, and that would be a really nice application predominantly for the type 1 community that always wants to have bolus optionality.

We don't call that a fully closed loop because our definition of fully closed loop is what we are launching in the United States in 2 years, predominantly for the type 2. Some type 1s might use it, and that really is no bolusing.

And no mealtime announcement.

And no mealtime announcements, no set points, no [ manual ] intervention, and you can train at home for less than 40 minutes. So that's a big unlock for the type 2 community, but we will also have a solution of a bolus optionality version on hybrid closed loop for the type 1 community.

Okay. And you recently received a clearance for the Omnipod 6 algorithm.

That's correct.

What needs to be done from a regulatory standpoint to launch the system?

Yes, really -- the team is executing according to plan. We're doing systems integration right now and validation, and we're doing launch readiness and pleased to share that for next year.

But you still need to get some -- there's still a clearance.

Yes, we got our algorithm approved, and now we're working on our systems validation that does not have approval yet.

Okay. And then maybe we didn't talk about pricing much. It's -- so Flavia, you talked about next year being stable in the U.S., I think less price outside the U.S. I think the concern has been mostly in the U.S. with more entrants in the pharmacy channel. Just give us a refresher on why you're not concerned.

Yes, Larry. We continue to experience a very preferred position in the pharmacy channel. We -- even as we adjusted slightly our outlook for price for the U.S. this year, we still believe we're going to have positive price in the U.S. As I provided the framework for 2027, I said flattish to slightly up, depending if you're on the low end or the high end.

And what gives us confidence in that is a couple of things. One, we have contemplated a more competitive environment. Having said that, from all the conversations that we have had with PBMs so far, there is no signal of any significant change in the pricing dynamics. So even as competitors have already launched in the pharmacy channel, we haven't seen any change. The environment has remained disciplined.

As we talk to PBMs and work on formulary for 2027, we haven't seen any change. More broadly, going further into the future, what gives us confidence is a couple of things. The value proposition of Omnipod 5 and AID therapy in general is still very compelling for payers and for providers. When we source from MDI, we deliver a significant clinical and economic benefit of AID therapy.

We have a preferred position. We have built that position over almost a decade. We are not playing for exclusionary positions. We believe in open access, and we believe we're going to continue to win based on the strength of the clinical and product that we provide, the clinical evidence and the product features that we provide. And we're going to continue to innovate. And with this innovation that we're going to launch, we believe it's going to continue to drive value for the category.

Okay. That's helpful. Ashley, one more question, just on a strategy question. Just curious, you've got one competitor that's vertically integrated. The rest are pure-play pump companies and pure-play CGM companies. What are your thoughts on vertical integration in the diabetes space? Are there benefits? Are there trade-offs?

Yes. I mean, Larry, I would tell you, as a market leader, what we've learned is that prescribers and patients want choice always. So we want to be the world's best AID therapy, and we partner with the world's best sensor company. People -- some people are on iOS, some people are on Android. And we deliver a highly integrated customer experience, taking the best of those.

And Ashley, international, you talked -- Flavia talked about slowing growth next year, but you still have a long runway. What are some of the new geographies you're going to enter next year?

Thank you. I mean we've had, I would say, extraordinary growth in international. We raised our guidance this year to 30% to 32%. A lot of that was driven, obviously, by bringing Omnipod 5 to new patients with type 1. We're going to see really strong growth, but more moderated growth at a moderated pace, not really due to one launch. We're going to launch new countries. I mentioned Spain. I mentioned going deeper into Saudi Arabia.

We also have integration with Libre 3 Plus, which opens up a lot of sensor activity. And so we're going to have very attractive profitable growth, just not at the high levels that we're coming off of an anniversary of a launch.

Asia?

We're assessing those, but right now.

It was on the road map.

It's on the road map. We're assessing. We've done a lot of work, but I would tell you, we see so much opportunity. It's on our road map in U.S. type 1, U.S. type 2, OUS type 1. We are filing an indication for -- in the markets that we compete on type 2.

And obviously, we have a plant in Malaysia. We have a plant in China that we're always assessing to make sure we've got a good durable value proposition there and what's the phasing of that.

Okay. Well, we covered a lot of ground. We got 1.5 minutes left. You can go over if you want. But Ashley, I wanted to give you the last word, give you an opportunity to say anything, communicate anything that we didn't have a chance to discuss or just summarize.

Thank you, Larry. I think that I always think about maybe what are some things that are maybe not fully appreciated. And I think that the AID -- I've been in health care for 30 years and automated insulin delivery is one of the most attractive end state markets in the med tech industry. And we're still early on in the innings.

And I think, listen, market leadership has been earned over years, and we know that we take that as a huge responsibility that we have to continue to execute to extend that lead. And a lot of that is innovation. You've heard we have one of the best innovation pipelines in the company's history. A lot of that is commercially. What we've demonstrated is we've expanded our prescriber base. We've expanded new patients.

We have the largest field force. We've just retrained all of our field clinically. So we're selling not just on passion and the differentiator of the pod, but those 4 algorithm improvements that are coming down and then making sure that we can say yes to demand day 1, not multiple years later, but day 1. And we produce at scale in the tens and tens of millions. And given our reoccurring revenue model, we enjoy just like an unrivaled cash position to be able to continue to invest. So it's a great buy opportunity. Thank you, Larry.

Good morning, and welcome to the Insulet Corporation Second Quarter 2026 Earnings Call. [Operator Instructions] As a reminder, this conference call is being recorded.

I would now like to turn the conference over to your host, Clare Trachtman, Vice President, Investor Relations.

Good morning, and welcome to our second quarter 2026 earnings call. Joining me today are Ashley McEvoy, President and Chief Executive Officer; Flavia Pease, Chief Financial Officer; and Eric Benjamin, Chief Operating Officer. On the call this morning, we will be discussing Insulet's second quarter results, along with our financial outlook for the third 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 EBITDA, 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, Eric and myself will be available to address questions. Now I'd like to turn the call over to Ashley. Ashley?

Good morning, everyone, and thank you for joining us. We delivered another quarter of strong revenue growth, expanding profitability, and solid cash flow generation. Our performance reflected the strength of our differentiated business model and our team's dedication to improving the lives of people with diabetes around the world.

Total company revenue grew 23% year-over-year on a constant currency basis, exceeding our expectations. We saw strong demand for Omnipod across both the U.S. and international markets, along with a benefit from favorable price/mix. Importantly, we delivered growth this quarter while continuing to meaningfully improve profitability.

Second quarter adjusted operating margin increased 140 basis points year-over-year, supported by increased manufacturing productivity and the benefits of scale. Adjusted earnings per share increased approximately 42%, driven by our strong revenue growth and disciplined operating performance.

Demand remained healthy with new customer starts rebounding from the seasonal slowdown in quarter 1. Global new customer starts increased both sequentially and year-over-year, resulting in our second highest quarter ever and contributing to 23% growth in our global customer base.

In the U.S., we continue to source more than 85% new customer starts from MDI users, and over 40% of new customer starts were people with type 2 diabetes. Internationally, Omnipod 5 became the #1 insulin pump for new users in Australia. We also recently launched in Spain, marking our entry into an important new market and further expanding our global reach.

We continued to expand our prescriber base, with more than 32,000 health care providers in the U.S. now prescribing Omnipod up 27% year-over-year. This growing provider adoption reflects our success in expanding awareness of AID and broadening access to Omnipod across both Type 1 and Type 2 diabetes.

At the same time, this quarter has reinforced that we are still learning how to best serve the Type 2 market. While we have more than 25 years of experience serving people with Type 1 diabetes, we are still in the early stages of bringing Omnipod 5 to the Type 2 community. As we gain more experience in the Type 2 market, we've developed a deeper understanding of the unique needs and behaviors of these Podders. We recognize that we need to adapt our commercial model to better serve this community.

Specifically, we are seeing lower rates of utilization and retention among Type 2 customers, and these trends were more pronounced this quarter than we anticipated. As we've gathered additional data and experience, we have a better understanding of these dynamics and are now incorporating learnings into our assumptions and outlook. Over the past 9 months, we have driven significant growth in our Type 2 starts, particularly through our DTC activations and sampling programs. Both initiatives have proven effective in getting people started.

However, getting started is not enough. Customers, particularly Type 2 customers, need more support to get fully onboarded and for continuity of therapy. The first 90 days on therapy are critical for helping patients become comfortable and confident with the technology and to establish the habits and practices that then lead them to realize the full benefit of Omnipod.

There are a number of key moments when our teams need to provide Type 2 Podders with a more personal higher tech support, like when they're onboarding their first pod activation, their first pod change and the first time that they're refilling their prescriptions. As a result, we're taking a number of actions to enhance our commercial model and customer support.

First, we are expanding our customer care team that supports the onboarding experience, including helping customers navigate the insurance process. Second, we're changing our sales force compensation structure to prioritize and reward longer-term retention, not just new customer starts. Third, we're refining our approach to how we deploy samples to better identify patients who are most likely to benefit from Omnipod and support these customers during the sample process to improve conversion, retention and long-term success.

And finally, we are rolling out new technology platforms like Omnipod Discover, which has shown promising early results during its limited market release. This cloud-based platform helps providers and patients identify trends, personalize therapy and make more informed treatment decisions. Early data is providing a glimpse into how Discover may positively influence both clinical outcomes and retention, giving us confidence in its ability to support long-term therapy success. Adoption of Omnipod Discover continues to grow, with more than 12,000 people with diabetes and over 1,600 health care professionals using the platform today.

Alongside this progress, we are accelerating the development of a modern customer data and engagement platform. By bringing together the data across our interactions with health care professionals and patients, we're building a more complete, 360-degree view of each customer. This will enable highly personalized 2-way engagement, allowing us to better anticipate needs, tailor support and improve the overall customer experience. Over time, we expect these capabilities will help to optimize adoption, utilization, retention and lifetime value while supporting better outcomes for the people we serve. We're confident that over time, these actions will help improve long-term success for our Type 2 Podders.

Importantly, our data show that once type 2 customers remain on Omnipod for the first 90 days, retention rates stabilize, a trend that we also see in our Type 1 population as patients gain confidence with the technology and experience the benefits of Omnipod. That's why my conviction in the long-term Type 2 opportunity remains high. While the ADA recommends AID as the standard of care, we've just begun the conversion process. Today, just over 5% of the approximately 2.5 million U.S. adult basal-bolus insulin users have converted to AID. Additionally, there are approximately 3 million basal-only insulin users who may also benefit from AID therapy.

While we're still in the very early stages of Type 2 adoption, the opportunity is substantial with significant runway ahead. Interest in Omnipod is strong among both patients and clinicians, which translated into healthy new customer starts, with Type 2 representing more than 40% of new customer starts in the second quarter. As we refine our commercial and support model and leverage new technology platforms like Omnipod Discover, we believe we can drive better outcomes, improve retention and expand AID adoption across this large and underpenetrated market.

With that context, let me now turn to our updated outlook. We're updating our full year revenue outlook to incorporate the utilization and retention trends we are seeing within our Type 2 customer base and to reflect the time required for the actions we are taking to translate into improved customer success.

We now expect 2026 total company revenue growth of 20% to 22% and U.S. Omnipod growth of 17% to 19%. We are raising our international revenue growth outlook to 30% to 32%, reflecting the strength of our first half performance and our sustained momentum.

As CEO, I take accountability for our reduced U.S. outlook. As we've gained experience in the Type 2 market, we've developed a deeper understanding of certain dynamics that were not fully reflected in our initial planning assumptions. We should have identified the issue sooner, and I'm confident in our ability to better serve the Type 2 community and in the long-term opportunity ahead. We're acting decisively to enhance our commercial and customer service model, and we will continue to be transparent about what we're learning and how those learnings shape our actions and outlook.

As we review our plans for '27 and beyond, we believe it's appropriate to revisit certain assumptions underlying our longer-term revenue outlook given the additional data and experience we've gained, particularly in the Type 2 market. We expect to provide an updated view on our long-range outlook on our fourth quarter call. This will give us time to incorporate additional learnings from the actions that we're taking to improve outcomes for our Type 2 customers.

That said, while we're reassessing our specific long-range revenue growth expectations, we remain highly confident in the significant long-term opportunity ahead and our ability to create value over time. We continue to see a path to delivering top-tier revenue growth, meaningful margin expansion, strong earnings growth and positive free cash flow generation.

Importantly, we continue to have strong conviction in the long-term opportunity and in our ability to win in this market. That confidence is grounded in 5 key pillars. First, we're the market leader in one of the fastest-growing segments in med tech. AID remains significantly underpenetrated across both Type 1 and Type 2 diabetes. And we believe category growth will continue to be driven by conversion from MDI to AID therapy. As new players enter the tubeless AID market, we expect increased awareness to expand the overall category and support broader adoption, further extending our leadership position.

Second, we're advancing one of the most robust innovation road maps in our 25-year-old history, to strengthen our competitive position and expand the community we can serve. We expect to deliver annual algorithm enhancements over the next 4 years, beginning with our latest launch in the second quarter. We're encouraged by the early adoption and positive feedback we receive from both Podders as well as health care providers.

One example is Darla from New Mexico, who lived with Type 1 diabetes for more than 40 years. After spending 2 decades on injections and then another 2 decades using a traditional tube pump, she switched to Omnipod 5 2 years ago. Darla told us she values the freedom and discretion of Omnipod's tubeless design and smartphone control. And after using our new 100-milligram per deciliter glucose target for the past few weeks, she reports tighter glucose control and more time and range. In her words, "I can feel the difference. I would never go back to a tube pump."

Looking ahead, we're advancing the next generation of innovation across our pipeline. At ADA, we presented pivotal STRIVE data supporting Omnipod 6. We delivered improved time and range and time and tight range across people with Type 1 and Type 2 diabetes, while maintaining Omnipod 5's proven safety profile. And the bolus optional phase users held strong results while requiring significantly less bolusing, shifting to work from the user to the algorithm.

Additionally, what we've learned about the Type 2 market further reinforces our conviction and our design of our breakthrough fully closed loop system, which requires no bolusing, no settings and no manual titration. This directly addresses the unmet need for an AID for Type 2s that it's simpler to start, easier to sustain and less burdensome for both patients as well as providers.

Enrollment in EVOLVE, our pivotal study, is progressing well, and we continue to expect a 510(k) submission in 2027. While the program remains in development, the clinical results to date are encouraging and support its potential to improve utilization and retention over time, and broaden access to AID, particularly among the 70% of Type 2 patients managed in primary care.

The third pillar is expanding our commercial capabilities to accelerate AID adoption and reach new patient populations. We're investing behind our market-leading brand, DTC activations, professional education, sales force expansion and initiatives to improve access and affordability. We continue to work closely with payers to expand access to Omnipod and make it easier for patients to start and stay on therapy. During the quarter, we added coverage for an additional 6.5 million lives and reduced barriers to therapy by simplifying prior authorization requirements for approximately 10 million lives.

Fourth, we have an unmatched manufacturing network. Our scale and operational expertise represent a significant competitive advantage that will take time and substantial investment for others to replicate.

Fifth and finally, the strength of our recurring revenue business model generates strong cash flow, giving us significant financial flexibility to continue investing in innovation, our commercial capabilities and our manufacturing network, while maintaining disciplined capital allocation.

So let me close with this. This quarter reflects both the progress we've made across our business and the important insights we've gained as we deepen our understanding of our Type 2 customers. We're listening carefully, learning and acting decisively. Above all, we're committed to improving how we execute to benefit global Podders and our business.

Looking ahead, we're confident in the future. With a differentiated platform, a strong innovation pipeline and an exceptional team, we're well positioned to improve the lives of more people living with diabetes while creating long-term value for all of our stakeholders.

With that, I'll turn it over to Flavia to review the financials.

Thank you, Ashley, and good morning, everyone. The Insulet team delivered another strong quarter with $802 million in total revenue, an increase of 23.5% on a reported basis and 22.7% on a constant currency basis. U.S. Omnipod revenue grew 20% during the quarter, driven by continued demand across both Type 1 and Type 2 customers. International Omnipod revenue grew over 35% on a reported basis and 33% on a constant currency basis, driven primarily by volume and continued favorable price/mix realization.

Second quarter adjusted gross margin was 72.9%, up 320 basis points year-over-year. Adjusted gross margin performance was driven by continued manufacturing productivity gains across our [ Acton ] and Malaysia facilities, positive pricing and increased volumes.

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 program, 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 U.S. sales force expansion as well as continued investments in customer support and market development initiatives. Importantly, we continue to balance these investments with disciplined expense management.

Second quarter adjusted operating margin was 19.3%, up 140 basis points year-over-year, reflecting strong revenue growth, expanding scale across the business and disciplined execution against our investment priorities. Our ability to continue expanding margins while investing behind innovation, commercial capabilities and future growth opportunities is a key differentiator of Insulet and remains central to our long-term value creation strategy.

Second quarter net interest expense was $9.9 million, and our second quarter adjusted tax rate was 19.8%. Second quarter adjusted EPS was $1.36, up 41.5% from $1.17 in the prior year, with adjusted EPS increasing at nearly twice the rate of revenue growth. This performance highlights the earnings leverage inherent in our business model as revenue growth continues to translate into disproportionately stronger EPS growth.

Turning to cash and liquidity. We ended the quarter with $535 million in cash and investments and the full $500 million available under our revolving credit facility. Year-to-date, we have generated $145 million of free cash flow, reflecting investments in working capital, inventory and manufacturing capacity to support future growth.

Turning to our full year outlook. As Ashley discussed, we are updating our full year revenue outlook to reflect revised retention and utilization assumptions, primarily within our Type 2 customer population. Given this change, I want to walk you through the key assumptions embedded in our updated guidance.

First, our updated outlook assumes current retention and utilization trends to continue through the second half of the year. This revised assumption accounts for approximately 2/3 of the change to our prior guidance. Second, as highlighted last quarter, NCS started the year slower than anticipated. Additionally, while we continue to expect pricing to be positive, it will be at slightly lower level than previously anticipated. This reflects the timing and mix of commercial investments that support customer access and long-term growth, rather than any change in the competitive pricing dynamics. Together, these factors account for the remaining 1/3 of our guidance update.

Taking these assumptions into account, we now expect full year constant currency revenue growth of 20% to 22% for total company and 21% to 23% for total Omnipod. Foreign exchange is expected to contribute approximately 100 basis points to both measures.

For the U.S., we now expect Omnipod revenue growth of 17% to 19% for the full year. We are increasing our full year outlook for international Omnipod to 30% to 32% on a constant currency basis, reflecting strong performance year-to-date and continued momentum across our markets. Foreign exchange is expected to contribute approximately 300 basis points to international growth.

Turning to the third quarter. We expect Omnipod revenue growth of 18% to 20% and total company revenue growth of 17.5% to 19.5%. On a reported basis, foreign exchange is expected to be a headwind of approximately 50 basis points to both measures. In the U.S., we expect Omnipod revenue growth of 14% to 16%. And internationally, we expect Omnipod revenue growth of 28% to 30%. On a reported basis, foreign exchange is expected to be a headwind of approximately 200 basis points to international growth.

Now turning to operating margin. We remain committed to increasing profitability and continue to expect to drive approximately 100 basis points of operating margin expansion in 2026. Below operating income, we expect approximately $40 million of net interest expense and a non-GAAP tax rate of 20% to 21%. We continue to expect approximately 70 million shares outstanding and now anticipate adjusted EPS growth of at least 30% for the full year.

We expect free cash flow to be down modestly from 2025 levels, which reflects the impact from the medical device correction, but still healthy, supported by strong earnings growth and margin expansion and offset by increasing capital expenditures associated with our manufacturing expansion plan.

While we are reassessing the pace of revenue growth, we remain confident in the substantial opportunity to expand Omnipod globally and deliver top-tier growth. We continue to expect adjusted operating margin to expand by approximately 100 basis points annually and adjusted EPS to grow at a CAGR of more than 25%, while continuing to generate strong free cash flow.

As we continue to assess the impact of the actions we are taking to improve retention and utilization, it is premature to provide formal 2027 guidance today. However, we believe it is important to share some preliminary thoughts on how to think about 2027.

Based on the midpoint of our third quarter and full year guidance ranges, we expect total company constant currency revenue growth to exit 2026 in the mid-teens. Our objective in 2027 is to deliver growth consistent with or better than that exit rate, supported by new product launches and the benefits of our sales force expansion. I would note that this preliminary view does not assume any benefit from the actions we are taking to improve retention and utilization. We will provide formal 2027 guidance along with our updated views on our long-term growth outlook on our fourth quarter earnings call.

To close, we delivered another quarter of strong top line growth, continued margin expansion, robust earnings growth and meaningful free cash flow generation. While we are adjusting our revenue assumptions to reflect the additional insights we have gained in the Type 2 market, our confidence in the opportunity ahead remains high. We serve a large and underpenetrated global market, continue to take share and remain committed to investing behind innovation while increasing profitability. We believe this combination positions Insulet to create significant long-term value for shareholders while helping more people with diabetes around the world.

With that, operator, please open the call for questions.

[Operator Instructions] Our first question comes from Robbie Marcus from JPMorgan.

Really wanted to focus on current trends in '27 update here. It sounds like Type 2 is the big issue. So maybe, Ashley and Flavia, you can kind of walk us through exactly what's changed since ADA. It's -- at ADA, the comments were pretty positive. What happened since then in your learnings? When did you really start to see Type 2 fall off in terms of attrition?

And on '27, it sounds like you still feel like you can accelerate a bit off of exit trends. There's a big view out there, and investors are worried, hitting the share price about oncoming [ patch pump ] competition and potentially pricing in the pharmacy channel. So within the comments on '27, maybe you could walk us through what you're assuming for competition and pricing. And with an exit rate in the U.S. around 10%, what gives you confidence that you could accelerate? Why not take the opportunity to perhaps lower the bar here with '27?

Yes, Robbie. Listen, thank you for the question. I'm going to handle that first part, and then I'll turn it over to Flavia talk about '27. And let me kind of first start with just I appreciate that this new outlook comes as a change from the past comments and what I was speaking about. And I just need to acknowledge upfront that we should have understood some of these Type 2 trends sooner and done a better job of adapting our commercial and customer service model to the needs of this really important customer base, which is the Type 2. And as CEO, I take accountability for that.

As I mentioned in my opening remarks, we've been serving the Type 1 community for 25 years, and we're about 20 months in to serving the Type 2 community. So let me get specific on some of the timing and the context.

So in quarter 2, as the quarter started to progress, we did see some emerging trends in retention and utilization, specifically among the Type 2 community. And so we dug into the data, and this is what we uncovered. Demand for Type 2 is really strong, as evidenced in quarter 2 on the customer base as well as NCS. We then looked at retention data and what we identified is past 90 days, they start to get more comfortable, they get more confident and start to realize the benefit of AID therapy, and retention stabilizes. Our opportunity is to get much better at the first 90 days of onboarding.

We've identified these issues. And as I shared in my opening remarks, we are taking decisive actions in quarter 3 to get people to have better success. But I'll tell you, it's going to take a little bit of time for these actions to translate into improved customer success. So that's why we've updated our guidance to reflect that the trends that we saw in quarter 2, specifically related to the Type 2 community, on utilization and retention, that they continue in the back half of the year until we have sustained evidence that these are really going to have improved outcomes.

And I would just kind of wrap, Robbie, before we get to '27 is, listen, I've got absolute conviction in the long-term health of this business. I think that this is an execution challenge. I don't see anything structurally different in the marketplace. Again, this is not due to pricing. This is due to competition. This isn't due to GLP-1. This is due to our execution in serving the Type 2 community in the first 90 days. So on that, let me turn this to Flavia, who will talk a bit about '27.

Thank you, Ashley. Robbie, as we mentioned, it would be premature at this point to provide guidance for 2027, but we did want to provide some color. To your specific question, our outlook does contemplate competitive entrants in 2027. However, we remain highly confident on our competitive position. Omnipod's differentiated form factor is only getting better with the algorithm innovations that we continue to launch, starting this year with the enhancements to Omnipod 5, next year with Omnipod 6, and then in 2028, with fully closed loop for Type 2. The outlook also assumes stable price and that is consistent with what we've seen in marketplace.

You asked us -- or you asked a question around the philosophy on the guidance. We believe that it does reflect what we're seeing in the marketplace today. It does not contemplate improvements from the actions that Ashley described. And we believe that, that's a prudent way for us to establish this preliminary view for 2027.

Our next question comes from Travis Steed from Bank of America.

I think maybe I'd kind of follow up on the first question. First of all, what gives you the confidence things can stabilize and reaccelerate in 2027 just given you're still kind of working through some of the Type 2 stuff today? Why go ahead and assume that reaccelerates in '27?

And it seems like the exit rate for the U.S. Omnipod growth is around kind of 9% in the guidance. Is that how you also think about the '27 view for U.S. I know you commented on global, but just curious if that applies to the U.S. Omnipod growth. And kind of what you're assuming on the competition piece for '27 given you're still kind of above the market?

Travis, let me start and then I'll turn it to Flavia. To your question on stabilization, again, the focus for today's conversation is around Type 2 and the learning that we've gleaned on Type 2 and what we're doing about it. We have not assumed that all of the actions that we're taking right now in quarter 3 are going to be baked into the guidance going forward. So we've assumed that the run rates on utilization and retention that we experienced in Type 2 remain constant in the balance to go.

Now we have confidence that those actions are going to have an impact, and we're going to be keeping a keen eye. Again, the several things that are very new and different of changing sales force compensation, going from new customer starts to retention, improving our data platform. As I mentioned, we launched our Omnipod Discover. We've got about 12,000 people with Type 2 using that. We've got early data back on that in the limited market release. It's showing not just really strong customer satisfaction, but also very improved retention rates.

And then clearly, making sure that we have a strengthened customer experience, and we've refined our sampling program. And as Flavia mentioned, that we've got -- we're preparing for innovation as we go.

So that's what gives us confidence that we're going to end this year, albeit off of our original guidance by a point, but really healthy, strong med tech revenue growth, expanding operating margins and very strong cash flow generation. So I'm going to turn it to Flavia to talk about exit rates for next year.

Sure. And Travis, just a couple of things. One, the range we provided is relatively wide. And the 9% is the bottom of the range, but the top of that range is 14%. So the midpoint is 12%. And it does contemplate the impact of the new product launches as well as the full benefit of our sales force expansion, which will accrue into 2027.

So we believe, again, it's a prudent approach, as Ashley said. And we'll provide additional insights in our fourth quarter earnings call.

Our next question comes from Larry Biegelsen from Wells Fargo.

I guess, Ashley, I'll just ask one on the Type 2. Maybe if you could share some of the metrics on utilization and retention with us. And why are you confident the actions will have an impact? I mean, is it plausible that just Type 2 patients are different from Type 1?

Yes, Larry, let me -- thank you for [indiscernible] let me kind of share what we've been learning in some areas that, obviously, the whole pod community, what inspires us to better serve these folks, and also some of the challenging aspects of -- in our learning curve. And then really importantly, what are we doing about it? And what KPIs are we going to be looking at to make sure that we're making progress?

I would first start with why we're so encouraged and inspired to serve this community. It's a large, underpenetrated TAM. There's a significant unmet need in this community. We have really strong science, and ADA guidelines are on our side. We do have synergy and learning from 25 years serving the Type 1 community. And as we sit here in August, we have tens of thousands of Type 2ers who are using pod and getting fantastic results.

Just last week, I was in the field at one of the largest safety net hospitals in Boston, and over -- they serve over 40,000 people with diabetes, and 90% of their cohort are people with Type 2 diabetes. And what I heard loud and clear is if they have a CGM, if they have full control, if they're somewhat engaged in their diabetes and they have medical coverage, all of them can benefit from AID therapy. That's what drives us.

Now listen, some of the challenges in the Type 2 community are the following: a different kind of emotional burden. Our Type 1 community often refers at their point of diagnosis like a tidal wave that happens to them. The type 2 community says, you know what, it's more like a rising flood. It's slow and progressive, and I did this. They're higher comorbidity rates, there's a different payer mix. 60% in Type 2s are on Medicare or Medicaid, whereas Type 1 is around 60% commercial. And listen, slower path to insulin. And predominantly, it's the PCP that is really writing for them.

And with that in mind, that's what's led us to the actions I spoke about in my opening remarks. That, coupled with our innovation coming within 2 years, which really unlocks the Type 2 community, it's specifically designed, it's CGM-like, you put it on. There's no bolusing. There's no settings. There's no manual titration. This is really going to unlock the 70% of Type 2s who are seen in primary care. So that's what gives us confidence and makes us resolute to go deliver masterful customer service the first 90 days, just like we do with the Type 1 community.

Our next question comes from Jeff Johnson from Baird.

Maybe 2 questions here, if I could squeeze them together. But just one, Ashley, as you talk about those T2s that are tougher to stay adherent, any early evidence that you can go back to some of those patients, address those needs and you've brought them back into the fold? I guess what has worked, if anything, so far in trying to reverse some of that adherence issue, number one?

Number two, you talked about pricing maybe a little bit less positive in your assumption for this year. There was a big Blue payer that recently rolled back pharmacy access for some of your tube pump competitors. I guess my question there is, is that evidence of you throwing kind of your rebate weight around? Are you using some added rebate dollars to maybe push exclusivities in some markets on the pharmacy side? Or how should we anticipate your pricing comments or how should we interpret, I'm sorry, your pricing comments with this change we saw from one of the big Blue payers here recently?

Yes. Thank you for the 2 questions, Jeff. Let me address your last question first, and then I'll have Eric address a little bit of what we've been doing to smooth out some of the pain points in the Type 2 community. As Flavia mentioned, our price realization in the United States has been stable to slightly up. And we've been, again, very disciplined in our pricing. We've been continuing to -- because we think that wins for the category, as new contenders have entered into the pharmacy, our pricing strategy is extremely disciplined.

And we, as I mentioned in my opening remarks, we continue to experience coverage wins on access as well as really reducing the barriers of prior authorizations. As I shared, we had 10 million reductions of prior authorization.

So I would tell you, our strategy is working. It's good for Insulet, it's good for patients and it's good for the category. So on the Type 2s, I would just open with demand, again, is very strong. We're getting a lot of demand, a lot of people interested and a lot of people on Pod. And we're keeping them retention rates stabilize for Type 2. Our opportunity and all of our learning been around those early pain points the first 90 days. So Eric is going to elaborate a little bit on that.

Jeff, just a couple of builds in terms of what we've seen in our ability to keep folks [ a little bit ] to engage and why the actions that we're taking, we believe, will be effective there. The first, we've had success reengaging with customers, and we are scaling some things that we've had at pilot scale to provide proactive support and help our Type 2 customers through those early moments of truth, a first Pod change, a first refill or a first service interaction. So we've actually had those at pilot scale. We've proven that they work. And now we're scaling them rapidly as we have learned during the quarter that it's important that we do so.

We've also seen that we can adjust some of how we go to market in the field to make sure that the support that we provide with prior authorization and benefits check as easy and as seamless as folks needed to be because we know that that's really important to the Type 2 customer as well.

And finally, as Ashley mentioned, we've seen really encouraging early data from Omnipod Discover and the impact that it has on outcome satisfaction and retention. And it puts success metrics, right, in the palm of the hands of the people who are using Omnipod to help them see the benefits of therapy and stay engaged. So we do have strong early proof points that give us confidence in the actions that we're taking to have an impact on the important metrics that we need to drive. I'll just hand to Flavia for a quick [ build ]. .

Yes. And Jeff, just specifically to address your question about the Blues, we are not taking any positions that would result in exclusionary positions in access. So that was not something that was initiated by us, and we don't believe in that. So I just want to specifically address your question.

Our next question comes from Matt Taylor from Jefferies.

I just wanted to double-click on some of the questions that were asked about the specific metrics, the retention rates. Could you characterize that at all the difference that you're seeing in the early 90-day retention between Type 1 and Type 2? And in the changes that you're making, what kind of early success that you had in changing those rates, just so we can understand the quantum of the deltas there?

Yes, Matt. I would -- what Eric really alluded to. So we are seeing differences in retention and modest differences in utilization in our Type 2 community relative to the Type 1. I would then first kind of need to underscore that we're in a reoccurring revenue business model, and so it's really worth the investment to go, and the time, to get them successfully through this 90-day onboarding period because of the lifetime value of these people being on insulin. And so again, I come back to there's -- we've proven that there's healthy demand. It really is those first 90 days.

And as Eric mentioned, it's, number one, making sure as we get them on a sample, is making sure that we do the right kind of adjudication on medical coverage, so that's really seamless. It's holding their hand for many of what we call their firsts. It could be their first pod change, it could be the first time they actually have to go pick up their prescription. It could be the first time that they're going to take a vacation. We've identified, let's say, 10 of these pain points that we need to offer very strong encouragement to keep them on pod.

And as Eric mentioned, we just completed our limited market release of a very modern new customer data platform that will have several new modules that we're pulling forward on our road map. It's called Omnipod Discover. And again, we have 1,600 clinicians who are using Discover and 12,000 patients. And basically, what Discover is it gives [ real, live-time ] data to patients. It shows the insulin trends that they're getting. It initiates a really clear conversation they can have with their clinician. Caregivers can have access to that, which is very beneficial. And ultimately, not only does it give them more confidence and more control it results in better satisfaction, and we've seen early data of meaningfully improved retention rates in this community.

Secondly, it's just sales force compensation, our biggest investment in our [ P&L is ] our field, we have the largest sales force in the industry. And we are evolving, in addition to new customer starts, to hold them accountable. But also retention. This is [indiscernible] the first 45 days. That's going to have a meaningful result. And again, really managing those first 90 days.

Our next question comes from Marie Thibault from BTIG.

I just wanted to try to understand a little bit more what you're building in for potential competition coming, I think, late in the year. And a little more detail on sort of the time line for when some of these efforts in the Type 2 population might start to show up. I know there's obviously a 90-day kind of cycle before they're coming back. So I want to understand both what's being built into the guidance for competition. And any time lines on when we'll see updates on this?

Yes, Marie. Let me take your second one on T2 and then I'll speak also about competition and turn it to Flavia. For T2, as I shared, we, again, 20 months into this, we've identified some trends in quarter 2 that accelerated. We're taking action right now. We thought it was prudent to not take those actions into the updated guidance that we're providing today. So the updated guidance assumes that the trends that we saw related to attrition and utilization specifically in the Type 2 community in quarter 2 do not improve, and in the balance to go.

And we just thought that that was a prudent approach. It gives the team time to really see the cause and effect of these interventions. We are monitoring this monthly, and we'll make any kind of adaptations, again, as we learn how to master this community and customer service the first 90 days.

As it relates to competition, I'll turn it to Flavia.

Sure. And just again, to summarize, in terms of our preliminary views for next year, just reinforce, it does not assume any acceleration of the market exit rate. It does not assume any improvement from the actions, as Ashley just mentioned. It does assume competition based on what we know so far. And it also assumes a stable pricing environment.

And again, what we will benefit from is the impact of the new product launches as well as the sales force expansion that we just completed.

Our next question comes from Richard Newitter from Truist Securities.

Apologies if this is a little repetitive and may have been answered. So I just want to get a better understanding. You guys have initiatives to try to improve retention and utilization. And a lot of that new feel can be very impactful and crucial during the first 90-day period of onboarding. So should we be thinking that within the next 3 months, you'll see whether or not those initiatives that had their intended impact and that is going to be what leads you to believe whether there's something more structural about this patient population versus Type 1 and that's going to inform kind of your go-forward view?

I guess I'm just trying to make sure I understand how much of a handle you think you'll have on the underlying market dynamics as this is somewhat new territory for the industry. And when?

Yes, Rich. I mean, again, I want to first start with we view the Type 2 community as a very attractive customer. Again, we have a reoccurring revenue model. It's worth the investment upfront, specifically the first 90 days, to deliver the right kind of onboarding experience so they stay on therapy. It's good for the category, it's good for patient care, it's good for outcomes.

Again, we are getting a lot of success. I have to mention that we have tens of thousands of people using Pod right now with very strong clinical outcomes and very strong satisfaction. So I would characterize what we're experiencing as an execution challenge, Rich, not anything structurally related to the market.

Again, demand we've seen 20 months into the launch is very healthy and very strong. I mentioned my field experience that clinicians and patients are waiting to go benefit from AID therapy because we do have strong science and we do have strong hub utilization. And so I think really, it has to do with just the timing.

I'm going to come and give specificity. We're implementing these programs right now. Eric mentioned, we've had a customer experience support team since the launch. We've added more resources. We've strengthened a lot of their engagement to address the pain points, specifically around insurance and getting -- reducing that barrier. Interestingly enough, we're doing this because we have efficiencies in the business, so this is not a net incremental cost to our business.

And I'm just allowing some time to see the impact of those. And that's why we were very prudent with guidance to not assume that these are going to have an immediate impact. And we -- the guidance assumes that the utilization and retention trends that we experienced in quarter 2 continue on for the balance half of the year.

Clearly, we aim to beat that and do better. But this is an emerging customer base, and we're very committed to serving them just as well as we're serving our Type 1 community.

Our next question comes from Jon Block from Stifel.

Joe Federico on for Jon. Maybe just like almost a follow-up on that last point. I wanted to just ask how you're viewing the returns from the Type 2 spending at this point, and balancing top line growth goals versus just profitability. The T2 returns arguably changed a lot with these somewhat new retention dynamics and the market taking longer to cultivate. So I'm just curious how you're viewing that spend going forward.

Yes, Joe. Again, I'm going to come back to that I think the Type 2 customer base is strategically very important to us and very attractive to us. We've been 20 months since our Type 2 indication. You can look at our performance this quarter in aggregate. We delivered 23% revenue growth. We have expanding operating margins. Our EPS was nearly 2x what revenue growth is. That's all while supporting the Type 2 community.

And again, we have very strong demand with the Type 2s. And once we get them on pod post the 90 days, retention rates stabilize. We have a very attractive reoccurring revenue model and they are on insulin, unfortunately, for a lifetime.

And so our key focus is around the 90 days. We think we can do so in a capital-efficient manner. We always look at our cost to acquire. We look at our cost to serve. Clearly, some of the lifetime value measures right now aren't as attractive as what we anticipate they will be. And I would just say some of the short-term trends are absolutely not reflective of what the long-term opportunity is.

Yes. Let me build, Ashley talked about the customer lifetime value. When we think also about the cost to acquire and cost to serve the Type 2 population, the good news is the actions that we are implementing and that Ashley described, they're not going to have a negative impact on these metrics. Our cost to acquire is stable even as we expand our sales force. And we continue to drive efficiencies in our cost to serve even as we redeploy and add some additional customer care support.

The actions we are taking, whether it is the updated incentives for the sales force that Ashley described or optimizing our sampling program and leveraging, obviously, our really recently launched Discover platform, these are already embedded in our baseline. So they're really not going to have a -- not going to create a headwind on the service cost for the Type 2 population.

And maybe just to close, in the medium term, we have high conviction that the fully closed loop for Type 2 will actually meaningfully change both the customer lifetime value as well as the cost to serve that population. Our fully closed loop has been uniquely designed to address some of these challenges that we have been discussing. So we feel really good about the outlook.

Our last question comes from Kieran Ryan from Deutsche Bank.

I was wondering if you can maybe just clarify, I think there's -- the words retention and utilization have both been used here. But it sounds like this is much more of a retention dynamic than necessarily your Type 2 users who are staying on pod just using it less than you originally expected. Is that fair to say?

And then maybe just any commentary you might have on how this retention looks between patients that are getting treated by [ endos ] versus PCPs? And anything we should be thinking about as far as how the type of prescriber might play in here?

Yes, Kieran. Let me first talk about -- you're correct, retention is one that we're seeing a little bit more variability than we had expected. Utilization was slightly down, but it's really retention that we're talking about. And I would tell you, obviously, [ endos ] are the most comfortable with AID therapy in the Type 2 community. So early on, we're getting most of our scripts from endos. We've seen that evolve over the past couple of months as we've expanded our field force on their called-on universe as well as activated DTC. So our mission is to really get PCPs comfortable and confident with the benefits of AID therapy.

I will tell you though, the onboarding experience really is similar regardless of what clinician is recommending them. And so that's why tools that Eric mentioned around a customer data platform like Omnipod Discover, that is available to both endos as well as primary care.

I'll tell you, endos and PCPs love it. They get to see the insulin trend. They get -- lets them show them exactly how our algorithm is working. So we've gotten really good feedback with that. It gets them both more confident and comfortable in engaging with the community. And then from a patient perspective, we start to see that they, again, can see their own data and get a lot more confident and comfortable, and also willingness to engage with us to get encouragement and ask for any kind of clarifying questions.

So I'm going to pause there because I know Eric wants to add another comment.

Kieran, just a quick build. The other thing is we observed that prescribers who are the most comfortable prescribing AID do have better retention, and they're off of the sales force expansion that we've just done, which helps us call on and serve another several thousand health care providers, also gives us a way to keep better serving this community. And so that is a key part of the strategy going forward.

Thank you. That concludes our call today.

Thank you.

Ladies and gentlemen, this concludes today's conference. Thank you for your participation, and have a wonderful day. You may all disconnect.

Good morning. Welcome to Baird and Insulet recap of the 86 session of the American Diabetes Association Annual Meeting. With us today, we're thrilled to have Dr. Trang Ly, Senior Vice President and Chief Medical Officer; at Insulet. I do have to read one disclosure before we get started here, and that is to please refer to the event calendar published research or Baird's website for important disclosures regarding the companies discussed during this event. Dr. Ly, good to see you. Thanks for doing this again.

Great to see you Johnson.

Yes. Always a good time to go through this. I think we were talking to. It's our sixth webcast, a few at ATTD, a few here at ADA. So it's always a fun time.

Always.

All right. Well, let's get started. First question. And unfortunately, we have to start here. But just on the recall that was announced a couple of weeks ago, second recall in 10 weeks. I'd love to just hear from you. You're out there, I'm sure, talking to docs a lot over the last couple of weeks. Just how has the response been from the physician community and even the patient community, if you've touched anything there?

Yes. I've heard back from both doctors and patients, and people are generally very understanding and actually very appreciative that we proactively find these issues and communicate appropriately to both patients and physicians. I think it just shows that our company cares a lot about patient safety and quality. And when we find an issue, we notify patients and do the right thing. And I think that means a lot to patients.

Yes. No, that's a fair comment. How much has that been talked about here at this show? I've been frankly, a little surprised. I haven't heard really any chatter about it. We've had a couple of investor events with you and others at the company. It's barely come up. Is this something that you've heard much about here in your event?

Honestly, no one's asked me about it.

Okay. Good. And from a sales rep perspective, any -- have they been distracted at all? Have they still been able to be in the field selling? Or is it really holding hands and talking about what the issues have been?

There's been no discussion really since after the first initial days, there's been really no further discussion about it. I was actually just in the field on Wednesday, Thursday, just before the conference. And I was in New Orleans territory, and it's just really fantastic to see how much we've grown. We are definitely #1 in the region around here. And not one of the providers asked me about the recall. We were really -- it was all about what is the future innovation that's coming. It just happened to also be the time that we had released the Omnipod 5 algorithm enhancement. So a lot of the discussion was about that and then what was coming at ADA.

Yes. Well, we'll get into all that, I'm sure. You just -- as you talk about being in the field, I didn't have this on my list of questions, but I think you guys recently expanded your sales force by about 25%. Are you going into yourself going into new offices, primary care offices? What's that experience like? Are doctors open to thinking about using a system when they haven't prescribed in the past?

Yes. I'll just share, and actually, I just found out this fun fact just this week. So not that long ago, our very first rep in this region used to take care of both Mississippi and Louisiana, the entire two states with our very first rep. And today, just in the Louisiana region, we have six territories. And so what that means is that as we commercially expand, it's not just a matter of going in further into white space, but it means we can have deeper conversations with our physicians and give them more attention and time.

And it means our reps are spending less time on the road, which is really wonderful to see. And I would say I'm really impressed with the amount of interest that we see from primary care providers who want to be offering more state-of-the-art technology for their patients. And so I'm genuinely sort of surprised and pleasantly surprised by the interest and enthusiasm from new providers.

Yes, that's great. Well, maybe we'll -- as we get into the fully closed loop part of the discussion, maybe we'll talk then a little more about the primary care angle and things like that. But let's move on to more positive topics. On pipeline, I know you've had the O5 enhancements that came out a couple of weeks ago, the O6 next-generation Omnipod launching next year, some of the data came out on that. I referenced the fully closed loop for type II. A lot of things to talk about.

But let's -- I think instead of going O5 enhancements, let's first go to STRIVE and the next-generation Omnipod, Omnipod 6 that should launch next year. I guess I'll just open-ended question. Just what do you think the key highlights were? Was it time and range? Was it reduction in boluses? Just talk us through what you thought the highlights from STRIVE were.

Yes, all those things. So I would say just to provide investors a little bit of background, this was primarily a safety study for Omnipod 6 versus Omnipod 5. So we know Omnipod 5 is a really fantastic algorithm. And when we want to deliver more insulin with our next-gen algorithms, we want to make sure that it's not generating more hypoglycemia than prior generations. So what we did was we recruited current users of Omnipod 5 who are already spending a large majority of time at the lowest target, so already reasonably well controlled.

And then we wanted to make sure that Omnipod 6 for these patients at the lowest target of a 100 would not induce more hypoglycemia. And so it was designed as a noninferiority study primarily looking at safety. And so we met those primary outcomes of non-inferiority for safety. So no additional time under 70, under 54. And the improvement in time and range was a 4% uplift up to a 4% uplift in time and range. And so we saw people coming in at 73% already on Omnipod 5 coming up to 77% time in range.

Those were the type I adults.

That was type 1 adults and then time and type range increased by 7%. So really impressive findings. But as you mentioned, there was the additional phase called the bolus optional phase. This was a 4- to 6-week optional phase where we asked our users to deliberately bolus 3 times or fewer than 3 times a day.

So they could bolus 0, 1 or 2 times a day. And the reason why we did that was to really induce a situation where they were bolusing less and allowing the algorithm to deliver more insulin. And so what we shared this week was that even when people were bolusing less that they were able to achieve consistent time in range and time and type range between Omnipod 6 and with usual bolusing and then Omnipod 6 with fewer boluses. So it was a 40% reduction in boluses and similar time in range. So overall, really impressive results, and I can't wait to launch it.

Yes, for sure. And I think a couple of things there I want to unpack. But on that latter point on the fewer boluses, you're still at 3 boluses versus 5, I think, in this study, again, that big reduction. But remind, especially investors, I'm sure physicians get this more -- understand this better than investors do. This is an evolution towards fully closed loop, and this isn't the final algorithm. Obviously, we'll talk about the EVOLVE study. We'll talk about some feasibilities in type 1 fully closed loop that you're getting ready to start. But you've got to kind of move down that road. And if you go from 5 to 3 here, you learn some stuff from the algorithm. And now a year or 2 from now, maybe you have a stronger algorithm and even more on the fully closed loop side.

That's right. Yes. So we see this as progression towards fully closed loop, which is where the field is headed. And what that means, practically speaking, is that with every generation of our algorithm, we're going to be delivering more insulin so that the patient has to do less. So with our -- what we showed with Omnipod 6 was that the system, the automated delivery component increased and the total daily insulin did not increase. So essentially, we're doing more patients less, progressing towards less burden for the user.

Sure. Okay. And you alluded to this that these were patients who are already using Omnipod 5 at the 110 set point, I think, right? They didn't have the 100 set point at the 110 set point.

They were well controlled. That was clear by the starting HbA1c, I think, on average was 7% in your study. I think what Dr. Forlenza said yesterday makes so much sense, too, is that he could have said, and I'm sure most physicians could have said even before he saw the results of the study, there wasn't going to be a significant change, improvement in time and range because at 7%, that already shows those were well-controlled patients.

But you still got that 3- or 4-point time and range improvement, the 5- or 6-point time and [ tight ] range improvement. So I guess where I'm going with this is I think back to that retrospective review that looked at AID studies, I think there are over 50 studies over the last 5 years, the S curve kind of that shows -- and Omnipod has been a little bit at the lower end of that just because, again, you guys had higher settings, lower time and range.

You are talking about the meta-analysis that was sponsored by Medtronic. I just want to make sure.

I think that's the one you guys have showed it in your own slide deck. The one I'm talking about.

Yes. Yes. I only look at one. It's a [ bias ] analysis.

I understand. And I'm not trying to argue any points about where you are in time and range on that chart. My point is now with these results, you will shoot up near the upper end of that if they keep their analysis similar, that 76%, 77% time and range will sort you at the higher end of that distribution curve.

Yes. Yes.

Yes. And I know it's a very long-winded thing I'm trying to get to here. But what I think you accomplished with STRIVE is as others are moving into the pharmacy channel, as others are coming with 2-piece patch pumps, even though they're semi-disposable, they're 2-piece, they are closing or narrowing the gap. You now have time and range data you can say, "Hey, our time and range is as good or better, even if others or better." Even if maybe you're narrowing you as the competitors are narrowing some of the other areas, you can't come at us now on time and range.

That's right. Yes, that's true. We believe that we have leading performance for algorithm. What I'll just -- in providing a little bit of context, like I know that there is a lot of noise in the marketplace about different timing range, different products. I'll just go back, and this was actually on our website. If you look at pivotal trial results in the other 18 and alpha 14 and over age group, I mean 74% time and range for Omnipod 5. This is the Omnipod 5 pivotal study, has very low hypoglycemia. And this is all on the website for people to see the comparison. And Medtronic was at 75%. And this is for 780G pivotal results.

And so very, very similar results there. And so I actually don't think that there -- even Omnipod 5 today without enhancements, I don't think it would be fair to say that others have better results. I will say that with the enhancements that are coming and with Omnipod 6, we are definitely going to be ahead.

Okay. No, that's good to hear. So there was one other question I had on that. Oh, just the shift towards looking at time and tight range. That's been debated back and forth. I think a lot of people have fallen on one side or the other. Are you going to worry patients too much if you give them a lower number if they see a lower number. Now you're leaning on that data a little bit more. Is time and tight range going to be something we'll start talking about more in the future? Or do you think time and range is still the main metric that a lot of us will look at 2 or 3 years from now?

I think time and range is still the most clinically relevant parameter. I do think as the systems get better in terms of automated insulin delivery, the time and tight range becomes another feature, another parameter we'll look at. And I think as the algorithms get better, it really is like the time and tight range really enables you to see really how much time perhaps your algorithm is able to really keep the hypoglycemia levels low.

And so in terms of algorithm responsiveness and insulin delivery and that tight glucose control, it's just another parameter there. I still think timing range is great. And certainly, I wouldn't be communicating to a patient time and type range. But if you compare these across systems, it's another parameter to examine.

Understood. One other question is on STRIVE, but it kind of goes back to the O5 enhancements as well. When I look at some of the O5 enhancement data that you've shown here recently, I think time and range there did improve from the 110 set point to the 100 set point by a couple of points. It's not too dissimilar from the improvement we saw from O5, 110 set point in your STRIVE data to the O6, which was 2 to 3 points, I think, overall, more than that in the adult type 1. So if the STRIVE O5 users were at 110, if they had been at 100, would we have assumed maybe their time in range would have been higher and the difference between O5 100 set point and O6 100 set point wouldn't have been that different at all? Or can I not compare those two studies?

I think it's harder to compare. I think -- should we talk about Omnipod 5 with enhanced.

Yes, yes. I guess, but maybe help us understand what the differences are between the o5 enhancements that are out now and where O6 is different. Perfect.

Yes. Let's talk about that. So what we announced this week was an algorithm enhancements to Omnipod 5 in the U.S. market. And what this means is a new lower target of 100 and then improved alarm handling so that the patients can stay in automated mode for longer. And I think these are two significant advances in the system. I think with the 100 target and it make sense right, people are -- it's a lowest [ set point ], so you're going to be delivering more insulin earlier, you're going to have more insulin on board.

So you can -- it makes sense to say you can have more time in range. The early data that we showed yesterday was on 79 users of Omnipod who were already using Omnipod 5 and majority of whom were already using that the 110 target. And then what was interesting to me was when they were offered the 100 target actually only 60% of people chose to use it.

So that's an interesting one factor, right, because people think that they're not getting high enough glucose control with Omnipod 5 yet. Not everyone chooses the lowest target all the time. And with that, you're right, we saw a 2% improvement in time in range, 5% improvement time in type range. And if they were using optimized settings up to 83% time in range. Small numbers, but really promising results. I would say the sort of Omnipod 6 incorporates those two changes, but it also has a more significant change in the algorithm in terms of the ability for the core algorithm to deliver up to 50% more insulin if the patient doesn't bolus. And so that's a more significant change in the algorithm, which is why we had to do a clinical study to prove that out. So I would expect more significant changes with Omnipod 6 even if you compare it at the same 100 target.

Yes. Okay. That makes sense. And again, for investors, I'm sure physicians understand this. But right now, the way O5 is designed is when the system delivers a certain amount of insulin, if it's reached its maximum amount that it can deliver, that's when it kicks the patient out of auto mode, right? And so by increasing the amount O6 can automatically deliver on its own, again, the correct -- the time getting kicked out of auto mode should go down, and we saw that.

Yes. Yes. So one of the biggest complaints that we get about Omnipod 5 today, which we've seen with real-world use that we, to be honest, didn't see in the clinical studies is that if people don't bolus consistently, then the system responds to hypoglycemia, but it says, gosh, I've given you a lot of insulin compared to your total daily insulin. You need to check your CGM. We're not going to continue automated insulin delivery until you confirm that everything looks right, then we'll -- we're happy to go back into automated mode.

And I would say the implementation of that was not quite as elegant as we could have designed it. And because of the feedback that we got from a lot of clinicians, "Hey, when my patients don't bolus they get kicked up." And weeks and weeks and not in automated mode. Can you do something about that? Us addressing that change, I think, will mean a lot more patients stay in automated mode. And it means in the real world, they're going to have better outcomes on Omnipod 5 today.

Yes. And I'm sure going back several years ago when O5 first launched, you have a lot of pediatric patients, you guys are uber careful about things, and that was probably the genesis of putting in something like that where it would kick you out to make sure we weren't as confident in CGMs maybe a few years ago as we are today things like that.

I mean we did pediatric studies, Jeff for the MARD of certain sensors were 35.

For sure.

35%. So something we care a lot about, which is how long do you deliver insulin based on what looks like a CGM that is not appropriate.

Well, again, it's all about that evolution and it feels like it takes forever, but it's really only been a couple of few years. So remind me the stat on -- I think with the O5 enhancements, I don't think I'm getting confused with the STRIVE data on O6. The percentage of patients, if they were below 90%...

11% improvement.

Yes, then they went from 85% to 96% or something. Just maybe help on investors because I'm [ going through ] those numbers.

Yes. So you're exactly right. So what we do now in the limited market release we look at people who were not spending over -- we specifically looked at those spending less than 90% time in automated mode. So it was roughly like 84%, but it was an 11% increase in time in automated mode to 95%. And what that means is people can stay in automated mode for longer, they're not getting kicked out as much and it just enables the algorithm to do its thing a lot more. So honestly, when I was talking to people in New Orleans they were more excited about that than the 100 targets, especially in the pediatric population where they're like, I don't always use 110 anyway. So -- but the ability to stay in automated mode for longer was really welcome.

Okay. Great. And last thing I had on O5 enhancements. And again, I think the enhancements not described. I think you've also moved the antenna within the far right, that's an O6. So O6 will have the antenna slightly moved. Theoretically, that should improve, pairing maybe you won't have to, maybe you will, maybe won't have to wear the CGM and the pump on the same side of the body or at least have better connectivity...

It's definitely our design intention to improve connectivity between Pod and CGM. And today, it is important that people wear their devices within line of sight. And what that means, practically speaking, is really as close as possible. So we want people to be able to wear their pods anywhere they want. And so Omnipod 6 will get us closer to that.

Okay. And so we talk about kind of that hardware improvement, maybe more time in automated mode, higher time in range, all of these improvements. I think the comments yesterday from the physician from King's College, stick, click and go or something. Maybe just remind us what he said. Ashley obviously seemed to like that comment. She repeated it a couple of times yesterday. But I do think it's interesting as these 2-piece semi-disposable patches are coming to market over the next 12 or 18 months, still not going to be stick, click and go or whatever that saying was.

Yes. I think you said, Phil, stick and click.

Okay. I know I butchered it, but's okay. Fair enough.

We're so fortunate to work with amazing physicians like Dr. [indiscernible], who sees thousands of patients in his type 1 clinic there. And as many people will know in the U.K., you see everybody in those types of services. So what is important to him and to his clinic is simplicity and ease of use. And it's not rocket science.

You can just imagine the simplest part actually is the one that's going to be most widely adopted. And since the NIH rolled out their funding, Omnipod 5 has done incredibly well and has led to many more users being able to adopt AID. Simplicity to us is a key feature of the product.

And it is no longer about just being tubeless. It's about what is that user experience like. Yesterday, we showed a video of 89-year-old [ River ] being able to do a pod change on his own. And actually Carol, who's an 87-year-old woman who uses Omnipod and she only started using that 3 years ago at the age of 84.

And it's really important to us that our technology can reach the broadest group of patients possible because it shouldn't just be for the very educated people who are willing to put in the work to manage their diabetes. I think everyone with diabetes out there doesn't actually want to be thinking about their diabetes.

And the more we can make the user experience as simple as possible, which I think Omnipod does really well, the more patients we're going to reach. I'll say things that are important, just as a reminder for investors is our auto insertion of the cannula, the fact that when Dr. Hussain says fill, stick and click, he means literally you fill it with insulin, you take the adhesive, you stick it on and then use the PDM to click and then the cannula gets automatically inserted and there's no shops to handle.

And that is a very easy user experience. And that is the product that's going to win in the market. I mean I was with an educator just the other day, and she -- and I walked into her office and she had all the products laid out. And I said, how do you talk about the features and benefits of all the systems. And she said, look, honestly, people don't want to be managing tube. So I I say that Omnipod is the only tubeless product, and that's the one that I pick.

Yes. Yes. And it would be interested in that scenario a year or 2 from now, if having to put 2 pieces together and maybe put it into a docking station or not, are those extra steps that still won't look nearly as simplistic as fill stick and go or whatever.

Yes.

Okay. And then I know you're not a manufacturing person, but I'm going to ask one more that I had in my notes here on Omnipod 6. I think it is going to be configurable over the air as well, right? So today, correct me if I'm wrong, Omnipod comes off the line, Omnipod 5 comes off the manufacturing line compatible with G7. Now it's coming off the line, another run compatible with Libre 3 Plus, but if I'm a Dexcom user and I want to switch to Libre, I can't just use my pods that I got from you last month. I've got to run that inventory down or let's say, Dexcom G8 comes out. All your distributors holding G7 inventory are going to have to run that G7 inventory down because you can't upgrade the pod to G8.

So my point on all that is this should bring some really nice manufacturing efficiencies to the company as well. I'm sure everything you're doing for O6 is for the patient. But on the manufacturing side, it should for the company, have some nice benefits as well.

Yes, absolutely. So we have said that Omnipod 6 will come with over-the-air updates to the pod to really streamline manufacturing and inventory management. And I think it's going to be a massive benefit for patients because they'll be able to get our innovation as quickly as possible just from a software drop and not have to run through all their inventory. So yes, that means streamlined manufacturing, distribution, all of those things. I think it's going to be a great win for the company.

Okay. Great. Should we move on to a fully closed loop?

Yes.

All right. Good. So you're a lot more excited about it than I am, I think I'm not capping anyway. Evolution.

You should be clapping.

I should be clapping I know, but I'm old dated and look see where these things go over time. EVOLUTION 3. You have the EVOLUTION 3 data here -- you are starting the EVOLVE pivotal trial for type 2. It is starting you're enrolling that now. Remind me how long do you think it takes to get fully enrolled in that one? And then let's talk about some of the EVOLUTION 3 data.

Yes. We -- it's just started. It's a big study for us, around 300 people. So we'll be doing that for the majority of this year. Maybe we'll see some data next year as well.

But we would think at least 6 months typically to enroll a 300-patient study.

At least.

So last patient in 6 months plus from now, and then it's a 13-week trial.

It is. It is. For the primary outcome, it is.

It is. Yes. Yes. Yes. No, we're just -- I was trying to figure out the time lines and all that. So...

I know. I know. What we've said is submission in 2027 and launch in 2028.

Yes. Understood. All right. So EVOLUTION 3 was kind of progress from the EVOLUTION 2 study. What was different between 2 and 3? And I still am not quite sure I understand the time and range did come down a little bit in 3 versus 2. Help me understand that a little better.

Yes. So with algorithm development and feasibility studies, it's important for us to test the algorithm broadly in different populations. So what you saw at ATTD was data for EVOLUTION 2, which was we -- although -- so that was a demonstration of fully closed loop in 24 patients with type 2 diabetes. But the settings for that did have to be entered. So we were optimizing the initial settings for what we knew the patient came in on.

And so really, that didn't incorporate a particularly long adaptivity period. And so what you saw there was really more if algorithm was sort of at steady state, what would the outcomes be? And again, pretty small, only 24-person study, we did see 68% time in range, which is really great and low hypoglycemia. And if you recall, we did these chunks of 4 weeks where we were really trying to find the best candidate.

Yes, I think there were 3 different optimization strategies. Is that right in the Q2?

That's right. So it's all about how do we test and learn and do it quickly and innovate and find the best candidate for [indiscernible] algorithm. And so we had to do that first -- so we knew where we were going. And then this particular study was all about really -- it was more about could we start everybody on one single standardized dose and adapt over time to enable us to reach that steady state because if we could remove the need for doctors to enter any settings, that would be a blockbuster product. So it had very different objectives to EVOLUTION 2.

And so what we did was recruit 36 patients for EVOLUTION 3 and they actually a very wide range of insulin requirements coming in from 10 units to 150 units a day. And then everybody started on this one pod that you didn't have to enter any settings in. And even in that first pod, the range of insulin delivery was 24 to 54 units a day in that very first pod. And then over time, we saw that insulin delivery increase.

And actually, I just realized that data was actually insulin use from EVOLUTION 2. But in EVOLUTION 3, the overall outcomes and that we saw was baseline of 61% going up to 66% by week 6, and then if you look at the last 2 weeks, it was 64% time in range. And that's why what we shared in the poster was a comparison of the baseline versus the final 2 weeks exact. I think what it shows though is that the time in range gradually increased over those weeks as the system was adapting to the needs of the user.

And this is what doctors were trying to do in clinical practice, but many times unsuccessfully doing it because it really requires high contact between the doctor and the physician -- sorry, doctor and patient and then really for the patient to really figure out exactly what they're supposed to be getting. So our system can do all of that for the user.

So they didn't have to bolus during the day for any meals and there were no settings to enter and then we did the auto titration over time for the user. So I think that's pretty remarkable. There's no other product on the market that is doing that. Our fully closed loop is really quite differentiated, and I think it's going to be a disruptive technology.

Is the vision still, and it sounds like it is, that when -- well, let me ask it this way. In the EVOLVE study, patients will not enter settings or physicians won't enter settings and you will not bolus. So it will be completely hands off. And so the vision is still where there are 25 million type 2 patients out there in the U.S.

I mean, I guess, let me cut that back down to 2.5 million insulin-intensive type 2s and maybe 3 million basals, whether or not basal would ever need a pump. But there's anywhere from 2.5 million to 5.5 million patients out there with almost no pump use today. If you can get into the primary care channel and say, all you do is put this on, doc, you don't even know how to -- you don't need to know how to set anything, patient, you don't even have to do anything.

That is different than a lot of these bolus optional fully closed-loop algorithms that others are dealing with or developing, which is you can -- maybe if you want better outcomes, you can bolus a couple of times, you can put some settings in. But if you don't want to, then your time. That's what competitors are doing, you guys are trying to go 100% hands off.

That's right.

Yes. Any concern with that, just that I think to some of your competitive systems right now in T1 when you cannot do anything at exercise. That becomes problematic for some patients because they don't have an exercise button, something like that. If you don't give patients any chance to bust with the system, any concern that, that is going to cut off its ability to work for some patients?

Yes, I would say fully closed loop for type 2, this product is all about our type 2 audience who are not getting the care that they deserve today. And that product needs to be as simple as possible. In our studies, people whatever they want, they exercise as much as they want, and we have to prove safety under all of those conditions. This is primarily developed for type 2. So very differentiated, and you can't even compare it as a -- to any other type 1 system out there.

That's how different it is. In terms of our type 1 population, we're going to be leading with Omnipod 6 and continue to do even more studies where we will be delivering more and more and more of that automated insulin delivery. So getting towards more bolus suctional fully closed loop systems. And we have Omnipod 6 as the platform for all of that. And that's where all the things about exercise announcements, and we have that today with activity mode, and our system does a fantastic job of that compared to any other system on the market. So we know how to do all of those things for type 1 already today.

And that type 1 feasibility for fully closed loop is getting underway shortly. Should we expect 2 or 3 feasibilities, 4 or 5 feasibility studies? And I know it's hard to answer that question.

We are the market leaders today, and we know what our patients want, and that is more innovation and fast innovation. And so we will -- we need to prove safety in both adults, adolescents and children. That's really important to us. We know what happens. We've seen what happens in the space if you release products that cause more harm than good. And so we care a lot about safety. So it will be whatever it takes, Jeff, for us to be confident in the overall safety and effectiveness profile before we release it.

Understood. All right. 2 topics, 7 minutes. So let's -- GLP-1s. We got good GGG data this week, and there's a few other GLP-1 studies and other kind of [indiscernible] studies out over this weekend. I don't pay much attention to it as a device guy. But there's a little chatter out there once again this weekend like, "Oh, we're deescalating de-prescribing type 2s. They're not going to be on insulin as much. The type 2 market is going to shrink over time." I mean even with the improvements we saw in [indiscernible] or however you say it, 30% weight loss, I mean, it's fantastic numbers. Where do you think the size of the type 2 market, the insulin using type 2 market goes over the next 3 to 5 years?

Yes. I would say we're extremely positive about this market in terms of our ability to help with our product. I'll say the retatrutide data, the A1c reduction was really no better than tirzepatide and semaglutide. And so we don't really see the core benefit changing at all in terms of diabetes A1c reduction.

So I shared some new data that was just published from [indiscernible] Group yesterday where it showed pretty recent data from Epic Cosmos database that today 41% of people with type 2 are estimated to be on GLP-1 41%, which is pretty high adoption. Yes insulin use was still 26% and if you look at the data from the last 10 years, that means GLP-1 has increased 10 fold in the type 2 space, yet insulin has remained the same. So perhaps in some early -- if you have early diabetes, it can reduce the amount of insulin that you need, but we're not seeing that on a population basis. So I thought that data was really compelling.

And can I -- just for investors, again, that was the first theme letter and Dr. Beck and [ Dr. Hershey ] you said their letter, right? And it showed that even through the end of '25, like you said, using the Epic Cosmo data, even through the end of '25, 41% of patients on GLP-1. So we know a lot of core type 2.

Yes. So we know it's [indiscernible].

Everybody is using it. But in 2007, 26% of type 2 patients were on insulin. And today, in 2026, 26% of patients are on insulin. So the use of insulin by type 2 patients has not decreased even with a significant increase in GLP-1.

That's right. And that's why we're confident that there's a massive market out there of people in need -- that we need to go help.

Yes. Fair enough. All right. I said I had 2. Yes, please.

Yes, just on the GLP-1s, we also did our own research because we care a lot also about what's happening peripherally in this metabolic market. And we shared yesterday current data, also current data in 2025 of people who have type 2 diabetes who have been using GLP-1 consistently for 15 months and looking at their A1c results.

So for those on a GLP-1 alone, so no insulin, 43% had an A1c greater than 7%, so not at target. And those on basal insulin alone, over half were not at target. And for those on GLP-1 and multiple daily injections, 67%, so 2/3 of people were not at target.

Even with the GLP-1.

Even with the GLP-1. So GLP-1 is not cure in type 2 diabetes.

Yes. No, there was another -- and this is a CGM comment, not a pump comment, but a couple of different studies this weekend that showed CGM use, you take off some weight, GLP-1 use, you take off some weight, but GLP-1 plus CGM was faster and greater weight loss. So again, it just seems like technology and GLP-1s can be complementary.

Yes. And just on that note, in our EVOLUTION 3 study, we had patients who were on everything like CGM, GLP-1, MGI, all this complex intensive therapy, but the median A1c coming into the study was 8.1%. So these people are out there not achieving glycemic control. We see this in clinical practice all the time.

Yes. Understood. Any other last topic? I think we're down to a couple of minutes, and I'm supposed to check my phone and see I'm seeing it the next game line move for tonight. But other than checking the line on the game tonight, let me just make sure there's no questions. I don't see any questions that came in. For any investors, JD. Johnson at R.W. Baird, if you have a quick question, but 2 minutes, any last topic we should cover?

I mean I think we've covered everything. So Omnipod 5 with algorithm enhancement, super exciting. STRIVE, which is Omnipod 6, cannot wait to bring that out and then fully closed loop, which you should be applauding. I mean come on, Jeff. I mean it is so different from everything out there. There's nothing like it. We have proven that it can work, and we're in a study, and that's coming.

All right. Well I'm excited for that. Where is ATV next year?

I don't know.

All right. Well, 9 months. We're looking forward to the next one in 9 months. So Dr. Ly, thank you again for your time. It's always a pleasure. Enjoy the conversation, and best of luck. Safe travels back.

Thank you. Thanks everyone.

Good afternoon, everyone, and good morning.

Good afternoon. My name is Steve Lichtman. I'm the medtech analyst here at William Blair covering our next presenter, Insulet Corporation. Before we kick off the presentation, I'm required to inform you that for a complete list of research disclosures or potential conflicts of interest, please visit our website at williamblair.com.

With that, we're happy to have with us today, Eric Benjamin, Executive Vice President and COO; and Clare Trachtman, VP and Head of Investor Relations. After the presentation here, we'll have a breakout up in the [ Jennie A ] room. And with that, I'll turn the mic over to Eric. Thanks.

Thanks, Steve. Good afternoon, everyone. It's a pleasure to be here. My name is Eric Benjamin, Chief Operating Officer at Insulet Corporation, and I have had the pleasure of being part of Insulet for almost 11 years. During this presentation, I'm going to make some forward-looking statements. These are my disclosures, and I'm also going to discuss non-GAAP financial measures.

At Insulet, our vision is a world where diabetes demands less every day, everywhere. Insulin-requiring diabetes is an intensely burdensome disease requiring as many as hundreds of decisions each day from patients about their own self-care, thinking about how to deliver insulin and manage glucose levels when they eat, when they exercise, when they deal with stress, jet lag, even sometimes just moving around the house. And that burden translates into less than acceptable clinical outcomes for a large population of people who take insulin. So it's both burden and outcomes.

And at Insulet, our mission is to improve the lives of people with diabetes, and we do that through our Omnipod technology. Omnipod is a single-piece, fully disposable, wearable, waterproof, automated insulin delivery system that helps automate the insulin that people who need it get from the system.

That includes people like Chloe, shown here in the middle of the page. Chloe has been a Podder since 2021, and she is wearing Omnipod on the side of her arm. Chloe is a competitive gymnast who lives in Ontario, Canada, 12 years old. And she finds that Omnipod lets her focus on her sport and being a kid without fear of the dangerous hypoglycemia or low glucose that had previously plagued her when she was on multiple daily injections.

Omnipod and our current flagship product, Omnipod 5, has been a huge success in the market, making Insulet a global leader in diabetes management. Omnipod 5 was the first automated insulin delivery system that was FDA-cleared for both type 1 and insulin-requiring type 2 diabetes here in the U.S. and is the most requested and prescribed automated insulin delivery system. It's the #1 in new customer starts in the U.S. and #1 in new customer starts in the EU.

Together, these strengths have driven Insulet to approximately $2.7 billion in global revenue in 2025, and we have the privilege of serving more than 600,000 customers in the 25 markets in which we operate. Last month, we reported first quarter 2026 results of approximately 30% constant currency top line growth year-over-year. In addition, we drove approximately 100 basis points of adjusted operating margin expansion and almost 40% year-over-year growth in adjusted earnings per share.

The strength of these results were underpinned by an almost 25% year-over-year increase in our global customer base. In our business, our global customers buy pods on a recurring basis and become reoccurring revenue. That strength of our global customer base growth in our Q1 results drove us to increase our 2026 full year revenue guidance to 21% to 23%, previously 20% to 22%, and maintain guidance down the P&L.

Further reinforcing our confidence in 2026 and in long-term growth are some recent and upcoming strategic highlights. Today, I'm pleased to announce the launch of our second-generation Omnipod 5 algorithm. Additionally, today, we announced that Omnipod 5 is now compatible with the FreeStyle Libre 3 Plus sensor.

The second-generation algorithm is designed to give folks tighter glycemic control and help keep people in automated mode in moments when they need it most, when the system has been working its hardest and folks want to stay in automated mode. Compatibility with FreeStyle Libre 3 Plus makes it even easier for the approximately 450,000 people taking multiple daily injections and already wearing FreeStyle Libre 3 Plus to get started on Omnipod 5. In addition to today's updates, earlier this year, we brought Omnipod 5 to the Middle East. That marks a long-term growth opportunity, particularly in Saudi Arabia, which has high unmet need in diabetes and is a large opportunity over time for our global business.

We also have several upcoming strategic highlights of note. This weekend at the American Diabetes Association conference, we'll be presenting the results from STRIVE, the pivotal study supporting Omnipod 6, our next-generation flagship automated insulin delivery system. Later this year, we'll also be launching the FreeStyle Libre Plus compatibility for Omnipod 5 in Germany and Canada, 2 large important markets in which FreeStyle Libre 3 Plus will be the first Libre compatibility in that market since those markets do not have FreeStyle Libre 2 Plus. That opens up a new target addressable market for us in those 2 large important global markets.

And finally, in the second half of this year, we'll also be entering Spain for the first time. Spain is one of the most important European markets and is a place that we have not yet had presence. So we're excited to bring Omnipod to the people who live with diabetes in Spain in the second half of this year.

In addition to our momentum and our recent success, part of what gives us confidence is the large runway for durable growth in the global diabetes markets. Today, we operate in an approximately $30 billion total addressable market comprised of 3 segments: the U.S. type 1 market; the outside the U.S. type 1 market in the countries in which we serve; and the U.S. type 2 basal bolus or insulin-intensive market.

The U.S. type 1 market is about a $9 billion market that's still only 40% to 45% penetrated, about 40% penetrated. The global type 1 market in the countries in which we serve is about a $10 billion market, and it's only about 25% penetrated today. And the U.S. type 2 basal bolus market is an approximately $12 billion target addressable market that's only approximately 5% penetrated today. Shown on this chart are also the penetration levels of continuous glucose monitoring, or CGM, the partner products that we connect with in order to automate insulin delivery. Those give us inspiration and a perspective on what should be possible for a wearable system like Omnipod 5 as we continue to drive penetration and technology adoption in these large underpenetrated end markets.

Beyond the 3 segments in which we operate today, we are also developing new markets, approximately 8 million people in that $30 billion TAM that I just described. And there are another 9 million people with diabetes that we have the opportunity to bring Omnipod to over time. First, there are about 4 million people who live with insulin-intensive type 2 diabetes in the global markets in which we operate today. Additionally, there are about 3 million people here in the U.S. who live with insulin-requiring type 2 diabetes and take basal injections of insulin.

And finally, there are about 2 million people in large attractive Asian markets that live with type 1 diabetes that could be an opportunity for us over time. So in addition to the 3 underpenetrated markets in which we operate today, over time, we have the opportunity to develop and approximately doubling of the total number of people with diabetes around the world whose lives we can improve with Omnipod technology to about 17 million people globally.

In addition to our results in the large underpenetrated markets in which we operate, we have a history of delivering sustained profitable growth built on market leadership. Over the last 5 years, we've delivered 25% compound annual revenue growth. In that same time, we've expanded adjusted operating margins by approximately 600 basis points. We've grown adjusted earnings per share at approximately 55% compound annual rate. And we've expanded free cash flows by more than $0.5 billion per year. After reaching free cash flow positive in 2023 for the first time, last year in 2025, we drove almost $400 million of free cash flow.

The strength of our execution, the end markets and our confidence in the pipeline of innovation and commercial expansion opportunities ahead of us gives us confidence in the future. Last November, we announced our formula for our long-range plan, guiding to 20% compound annual revenue growth between 2026 and 2028, fueled by continued product leadership and innovation, the large underpenetrated markets in which we serve and strong commercial execution in our markets.

Additionally, we shared that we're expecting approximately 100 basis points of annual adjusted operating margin expansion. This is driven by modest gross margin improvement, continued elevated investment in innovation and leverage from selling and marketing, particularly -- excuse me, from selling and marketing and G&A, particularly G&A. Together, this also drives more than 25% compound annual adjusted earnings per share growth over the planned period and strong continued free cash flow generation.

Innovation is a big part of what drives growth, and I'm excited to talk a little bit about the pipeline that we've shared. I just mentioned today, we announced the enhanced algorithm updates for Omnipod 5 that deliver stronger clinical outcomes and an improved customer experience. In 2027, we'll launch Omnipod 6, our next flagship Omnipod automated insulin delivery system product. That's underpinned by our third-generation algorithm, the automation that automates delivery on behalf of customers, and results for the pivotal study supporting Omnipod 6 will be presented this weekend at the American Diabetes Association conference. In addition to stronger, more advanced automation designed for better outcomes with less effort, Omnipod 6 also improves the wear experience of the product with new hardware technology designed to let folks wear pods flexibly on their body where they choose.

And finally, Omnipod 6 includes a pod that can be updated over the air so that as we launch new technologies, we can accelerate that innovation into the hands of customers. Whereas today with Omnipod 5, we have to put new technology into pods starting in the factory. By updating pods that are already in customers' hands, we can accelerate innovation by as much as 6 to 9 months, the time that today, it takes us to build inventory, get it into the channel, have customers go get a script and get new pods. And as we continue to innovate on the Omnipod 6 platform, we're excited to accelerate that innovation into the hands of customers.

And finally, in 2028, we have a disruptive offering designed to redefine a more accessible automated insulin delivery experience, that $12 billion TAM that I talked about, the type 2 basal bolus opportunity here in the U.S. There are millions of people who live with insulin-requiring type 2 diabetes who are cared for primarily in primary care. As simple as we've made today's technologies with Omnipod 5 and coming with Omnipod 6, they're still too complicated to take broadly into primary care.

The fully closed loop system that we are developing is designed to be as simple to prescribe and for self-start at home as CGM. It's a product that is designed specifically to address the barriers to prescribing and adoption that have -- that are between today's low penetration and our goals of driving elevated penetration in that type 2 market opportunity. I'm excited to share we've begun the pivotal study for that product, and we'll be presenting our final feasibility data for that fully closed loop product for type 2 at the American Diabetes Association conference this weekend.

I've just shared our innovation pipeline. In addition to that pipeline, we're also investing in future platforms that will come beyond 2028, targeting the largest unmet needs in the market. Across that pipeline and those technologies that will come beyond 2028, we'll be investing more than $1 billion in research and development over the next 3 years and in the clinical evidence supporting those programs.

In addition to innovation, we are investing to strengthen our competitive moats, strengthen our commercial execution and how we develop markets, developing the clinical evidence to continue to expand guidelines for both type 1 and type 2 to recommend AID. American Diabetes Association guidelines now recommend AID as early as diagnosis for type 1 and recommend it for those who take insulin and live with type 2. We're working to expand those guidelines globally and continue to strengthen them to make AID standard of care. And we're constantly working to broaden access and affordability around the world and growing the prescriber base so that more people who live with diabetes who are cared for by more prescribers can access this transformative technology.

And finally, because of the levels of growth that we drive, we have to invest ahead to be ready with manufacturing capacity and resilience to serve additional demand that we drive, and we are doing so. Taken together, these investments sustain our top-tier growth while continuing to drive margin expansion.

In sum, we have a really exciting growth runway in the large underpenetrated global diabetes markets that I described across type 1 and type 2 insulin-requiring diabetes. We have deep, defensible, durable moats across our unique, single-piece, fully disposable, automated cannula-inserted, waterproof, controllable by mobile phone technology, the science that supports the clinical outcomes that technology like Omnipod provides, our manufacturing infrastructure and resilience, broad affordable access and our brand that customers connect with.

We have a robust innovation pipeline with innovation launching now, next year with Omnipod 6 and in 2028 with a fully closed loop product for those who live with type 2. We have a disciplined strategy for allocating capital, driving growth that lets us continue to sustain top-tier growth while growing margins. And we have a strong financial position that lets us both invest for growth and continue to drive strong free cash flows. Thank you.

Great. Thanks so much, Eric. So maybe we'll first double-click on the freshest news, the algorithm full rollout today. Algorithm has been the perceived area where Omnipod has trailed competitors. So in what ways do you think today's announcement of the algorithm rollout [ fortify ] you on that issue and turn the algorithm into at least neutral?

Steve, thanks for the question. We are super excited about today's news. Today's algorithm updates have been in limited market release for the last couple of months, and the customer feedback has been strong. And the data on those updates, we're going to present this weekend at the American Diabetes Association conference.

As you described, we know and recognize that the algorithm has been a place that has been perceived as a weakness for Omnipod 5. The clinical evidence says that the clinical outcomes associated with Omnipod 5 are really strong, and we have confidence in that. But the market perception is different.

And we, for the last 8 months or so, have been bringing 2 things to the market, the strength of the clinical outcomes from Omnipod 5 and education to physicians about how to get the best outcomes from Omnipod 5, which includes using the lowest target glucose setting. With today's news, our field is going to be back in front of health care providers sharing how to use the lowest target glucose to get even tighter glycemic control and helping providers see that now there's an option for folks who do want even tighter control, and we'll be continuing to deliver that message through the course of the year.

We're also making the action of the algorithm more transparent with the launch of Omnipod Discover. We recognize that at times, part of the challenge with understanding what Omnipod is doing is we haven't shown exactly what the automation is doing. And so now with the launch of Omnipod Discover, exactly the insulin that is delivered by the algorithm will be visible to clinicians, helping increase their confidence in how the algorithm is working on behalf of customers.

And all of this will be happening this year ahead of the launch of Omnipod 6, our third-generation algorithm with advanced automation designed for even better outcomes and even less use. So we're taking action both from messaging, how our field shows up in offices and making significant technology improvements to make sure that the automated insulin delivery experience is a core strength for Omnipod.

Just following up on that. So in what ways are you exactly able to market this? You talked about obviously educating the physicians. So will this be in seminars? Will there be any DTC enhanced effort? Because this isn't a new pod. So it's a little bit different on that front.

Yes. We can pull all of our levers, and we will. So starting with this weekend, we're going to be presenting data on the performance and the strength of the performance at the ADA conference. And that's an opportunity for clinicians to hear from other clinicians, which is among the most influential ways to help them understand just how impactful this lower set point and the other algorithm improvements that we've made is for patients in their care. So physician-to-physician education is lever 1.

Lever 2, as I described, is our sales team showing up in offices and educating clinicians on how to use that lower target glucose and the other changes that we made to improve the automation experience and how impactful that can be for their patients, office by office. And finally, it is the kind of thing that we are going to market directly to our customers. We listen loudly to what our customers ask for, and the addition of a lower target glucose and the change we've made to the algorithm to keep folks in automated mode more are the two most requested things that we've gotten over the last while since the launch of Omnipod 5. And we're really excited to make our customers aware that those options are there, which we'll do direct by going directly to customers.

I wanted to hit next on an issue that's, of course, been on the minds of investors recently, and that's the quality issues and the 2 recalls, including 1 from last week. So maybe high level, what happened? And why now? What's happening? You guys have been manufacturing Omnipod for obviously many, many years. And then more importantly, can you talk about the changes you made in March and how you can give investors confidence that at a minimum, you'll catch anything new down the line, there won't be another recall?

Yes. So Steve, first, nothing has changed. It's really unfortunate that we've had 2 medical device corrections since the start of 2026. And the first we announced in March was related to tears in the cannula inside the pod, and the correction that we announced a couple of weeks ago was for tears in the cannula between the skin and the bottom of the pod.

And in both cases, we saw a signal in our post-market surveillance. And we investigated, did a comprehensive investigation, identified the affected product, took action to introduce corrective and preventative actions and then communicated with customers, healthcare providers and regulators around the world. In both cases, the root cause was related to handling of the pod during the act in manufacturing. So the way the pods are being handled allowed for the possibility that the cannula would be damaged.

In the case in March, it was in one part of the manufacturing had the potential to damage one part of the cannula, and then the issue 2 weeks ago was a different part of the manufacturing with the possibility of damaging a different part of the cannula. After the March issue, we took a broad look at what we needed to implement from a quality assurance and corrective action perspective. And we made changes then, in March, designed to prevent types of -- any type of this issue from getting to customers. And importantly, none of the product affected by our medical device correction 2 weeks ago was manufactured since changes were made in March. So the changes that we made in March would have prevented the issue that we took action on 2 weeks ago.

So again, moments like this just redouble our commitment to quality. We know that we earn our customers' trust every time they put on a pod. And we've taken a comprehensive look at the manufacturing to implement corrective action, implement enhanced quality controls for prevention. And we've taken a broad look at our complaint signals over the last couple of years to show there's nothing else that we need to take action on at this time, and we didn't see anything else that we need to take action on this time. So we have confidence in the quality of the product that we're making and commitment to serving customers well.

Okay. So on that point, you've -- the look back was pretty comprehensive. So even if -- most importantly, new product isn't going to be affected because of manufacturing changes, we're not going to likely get another headline because you did a comprehensive look already, and that was what last week brought about?

Correct. We have done a comprehensive look. We've made corrective actions. We have confidence in the product that we are making and releasing to customers, and we have communicated transparently and expediently with customers and healthcare providers.

And after our March recall, we saw our business strengthen through the part of the quarter where we were navigating that and had announced it. And the facts with the correction that we announced 2 weeks ago so far is playing out similarly. The understanding from healthcare providers and understanding from patients who appreciate the transparency and expediency with which we are communicating with them and helping them get replacement product.

So I think the other thing that certainly we hear from investors is coming off of 1Q commentary and maybe there's another investor conference over the past couple of months, there's been some concern about your ability to hit that 20% CAGR on the top line through '28 and potential for dips below the 20%. So what gives you confidence in that growth outlook? And maybe we can fold in the competitive dynamics and how -- why, obviously, in your view, you don't think it's going to have effect?

Yes, it's a great question. I hit some of this in my opening remarks in the presentation. We have high confidence in our ability to deliver the 20% compound annual growth that we shared during our long-range plan. And that's underpinned by large underpenetrated end markets, our leading position and continued -- an innovation pipeline and commercial investments that support continued growth.

Maybe a couple of building blocks of what gives us that confidence. I shared that on our Q1 call, we had announced approximately 25% year-over-year growth in our customer base. So as of Q1 2026, we had grown our customer base approximately 25% relative to a year earlier, and that customer base becomes recurring revenue. That 25% growth was on the basis of the level of new starts that we drove in 2025. And we've shared we expect higher new starts in 2026 than in 2025. And indeed, in Q1, we drove year-over-year growth in new customer starts in Q1 2026.

On top of that, we have important growth accelerators coming in the second half of the year. I just described, we are today, launching our second-generation algorithm for Omnipod 5. We are launching the FreeStyle Libre 3 Plus integration, and we're expanding our sales force. In the second half of this year, we'll have expanded our sales force to call on several thousand additional prescribers who care for about 150,000 more people with diabetes. So that's 150,000 more potential customers we'll be calling on in the second half of this year.

So we've got innovation and commercial expansion here in the U.S. helping us drive incremental new customer starts in '26 relative to '25. That becomes customer base growth that drives revenue in 2027 because of our durable model. So we've got growth catalysts for the U.S. this year.

Additionally, in our global business, we have continued growth catalysts as well. We're about 65% of the way through the transition from DASH to Omnipod 5. And as that transition continues, that gives us some continued price uplift tailwind here in 2026.

Additionally, at the beginning of the year, we launched Omnipod 5 in the Middle East. We're launching -- we're entering Spain here in the second half of the year. And we're launching the Omnipod 5 FreeStyle -- excuse me, FreeStyle Libre 3 Plus integration in Canada and in Germany, which are also significant opportunities. So we've got global catalysts in 2026 as well, which help us drive more new customer starts and increase our customer base, setting us up for 2027. So when we look at the building blocks and the levers at our disposal to drive new customer start growth, that's what gives us confidence in the long-range plan.

And on that sales force expansion, because I think probably they become fully sort of operational later this year and driving into '27. You gave some absolute numbers, but in terms of percentages or growth, what percentage expansion is that of the either customer base or sales force itself that you can provide in the U.S.?

We've said it's more than 10% growth in the sales force.

Okay. I was going to hit on type 2, but I don't think we're going to have enough time to hit on that in the minute or so. So maybe just high level, a lot of -- you talked about fully closed loop. A lot of companies, that's sort of the holy grail, everyone is kind of going for it. In the context of -- for Omnipod, what does fully closed loop mean in terms of lack of patient interaction?

What we see and what we're shooting for really is a different product. As I described in my prepared remarks, we are developing a product that is designed to unlock a market that today's technology is too complicated for. And specifically, we are developing a product that requires less prescriber education, less prescriber management once somebody is on therapy and is designed for customers to self-start at home, none of which are true of today's products.

That -- those are the most important market unlocks, and those are supported by a product that doesn't require customers to interact during the 3 days that they're using it. People with diabetes will put on a pod, connect to CGM and live for 3 days in our vision for a fully closed-loop product.

Great. Thanks, Eric. Thanks, Clare.

Good morning, everybody. Travis Steed, the Bank of America medtech analyst. Next up, we are glad to have Insulet here. We have Flavia Pease, Chief Financial Officer. Welcome.

Thank you, Travis. Great to be here. Thank you all for your interest in Insulet. Looking forward to the chat.

Great. Thank you.

Maybe we'll start with seasonality in Q1. The deductibles getting reset. It's not really a new dynamic and other companies haven't called it out. So why was it kind of stronger than what you've kind of seen historically in Q1?

Yes. To your point, deductibles reset every year, and there's normal seasonality in the category. We saw that in 2023 and in 2024. Last year was a little masked. We didn't see the seasonality as we were in the very early stages of our type 2 launch. And so this year, not only we didn't have that tailwind, but it was more pronounced than historical levels. And what we believe is happening with the category is, even though maybe others didn't, let's say, call out specifically. When we look at other diabetes companies that go through the pharmacy, we did see seasonality in their scripts in the first quarter vis-a-vis the fourth quarter. When we look at GLP-1s, when we look at CGMs, when we look at insulin, they all saw the same level of, let's say, sequential step down as we saw in our business.

I think more importantly, though, what we did see is it picked up nicely through the quarter and into April. And so when we take a step back and we try to unpack what happened, there has been some changes in insurance constructs and coverage, especially with Medicare co-pays and coinsurances have increased. And so what we believe happened is as you started the year, people took longer to hit their deductibles and have higher deductibles that they had to work through. And so once that happened, we saw the NCS pick up to more normalized levels again.

I think the other important thing and why we, again, have a conviction and a belief that, that was seasonality, this was really only in new patient starts. When you look at our installed base, there was sequential growth year-over-year -- excuse me, sequential growth quarter-over-quarter. So it's really a dynamic of those new customer starts looking into converting from MDI into AID. We believe that there was a bit of a disproportionate impact of these changes in plans.

The other thing is as our business continues to grow in type 2, that's a more Medicare exposed population. And some of these changes in plans were even more pronounced in the Medicare versus commercial plans.

Okay. That's helpful. U.S. revenue guide for Q2, 18% to 20% was a little bit below what the Street was modeling even adjusting for some of the headwinds that -- what timing headwinds that you talked about. Help us understand kind of the improving sequential trends in the quarter and kind of gives you the kind of the Q2 factors?

Yes. So first -- the first quarter performance in the U.S. and more broadly in the company was very, very strong. Growth in the U.S. was 28%. To your point, there was an impact of some order timing between Q1 and Q2. So a more normalized growth was about $10 million, about 200 basis points. So think of it more of a 26% normalized growth. So that's the first thing that when you look at it, Q2 versus Q1.

Second thing is comps. Last year, the second quarter was the largest quarter in terms of growth for us. So we're comping a very high base. I think importantly also, as our business continues to grow, the percentage might be less, but more importantly, the dollars sequentially higher. So Q2, we're going to see another step-up in dollars in the U.S. vis-a-vis Q1, even if the growth rate is a little bit lower.

I think there's also people are looking at kind of the second half exit rate and kind of what that means for 2027.

Yes. I really want to spend a couple of minutes there because I think there's a lot of questions even as we've been here on the conference around that second half in the high teens? And what does that mean for 2027? Do you have concerns on the ability to deliver on our LRP guidance? So first, it's important to remind everybody, when we had our Investor Day last year and we provided the 20%, it's a CAGR, right? It's a CAGR for 3 years. And this year, we started with our guidance already above that 20%. The guidance was 20% to 22%. We just delivered strong results in Q1 and increased the guidance for the year to now 22% to 24%, is that right? Yes.

No, 21% to 23%, so midpoint 22%. So we're already above the 20% that we had provided for the LRP. And what that means is, we believe the ability for us to deliver on that outlook is going to be driven by catalysts and specifically innovation that plays into continuing to attract people from MDI into AID, more so than a certain exit point in any quarter or any half year. I'd like us all to think about that is it's not linear. If you look even what has happened historically with Insulet, when we launched Omnipod 5, our growth in the U.S. went all the way to 40%, and then it came down. And then we launched into type 2 and the growth accelerated again. Last year, we almost delivered 30%.

So it's really about the innovation catalysts that are going to continue to unlock the different levels of growth rate that you experience. And as you think about this year, next year and 2028 and how do we think about our innovation, let's say, marrying it up to the growth that is going to result. This year, we're launching Omnipod enhancements to our Omnipod 5 algorithm. We're connecting with the Libre 3 sensor, which is going to increase our serviceable market by in the U.S. alone, 550,000 people. And so that's all about continuing to enhance the position that we have in the market with the current installed base and continuing to attract people from MDI into AID.

Next year, I'm sure we're going to talk about there's new competitors entering the tubeless portion of the market with products not, in our view, as differentiated as Omnipod, but maybe an evolution of their own offerings. So as they are coming into the market, we're going to be launching Omnipod 6. That is a new hardware with enhanced wearability, better connectivity and also our third-generation software update with better personalization, less bolusing, better outcomes.

And so as competition comes into the market, we have innovation that is going to continue to allow us to sustain our leadership. And then into 2028, that's when we're going to launch our fully closed loop for type 2, which I love to talk a little bit more about that because we think about that innovation as another one of those big unlocks, similar to Omnipod 5 or similar to the launch of type 2. And that's really going to accelerate or accelerate above the normal our growth rate. That's how we think about it. So yes, this second half, it's not going to be higher than the first half, if you just do the squeeze math. I wouldn't read too much into it in the sense of having concerns about the durability of our growth or the confidence and conviction of our ability to deliver on that 20% CAGR.

And the highlight of it being a CAGR and not linear, that's more a reflection of the kind of the second half of this year, right, not really a '27?

Correct. I think this year -- if you think about this year, the full year is already above that 20%, right? And first half, second half of this year is different. And then next year might be below the 20% and then the year after might be above again meaningfully. And so I just -- I think it's important in medtech especially, and we've seen this, obviously, in our category and in other categories. Innovation does move the needle. And I think that's what trying to make sure that people connect the dots.

Great. That's helpful. You mentioned expanding the sales force, too. Is that something you're doing ahead of the competition? And kind of what you see about the commercial sales force expansion on the revenue?

Yes. We are expanding our sales force is the second expansion in the last 12 months, actually. And we are doing it less from preparing for competition and more from a, I'll say, a position of strength of continuing to invest in the category and driving that category penetration. This is one of the most important things, I think, to just remind everybody. AID growth is driven by moving people from the sidelines of MDI into AID therapy. 80% of the NCS are coming from MDI, not from me taking share from MiniMed or us taking share from Tandem or vice versa. So in doing that, we need to continue having the ability to drive the category, to drive that penetration. And that's where -- that's the primary impetus for our sales force expansion. It is not in anticipation or to defend against competitive entrants.

In fact, the fact that other pump companies are going to continue talking about AID, continuing to talk about the benefits of going from MDI. It's an opportunity for the category to continue expanding. And then within that category for the tubeless portion of the category to become disproportionate as other people try to have kind of patch-like products.

Maybe the last thing to talk about as we think about the commercial expansion. Why do we have conviction that it is the right thing to do from a returns perspective? Why isn't it diminishing in terms of cost to acquire? If you think about rapid acting insulin prescribing -- prescribers in the U.S., there's about 450,000 of those. About 100,000 of them are the ones that really matter, the ones that are like 80-20, 80% of the volume of prescriptions are concentrated on 100,000 physicians. 40% of those have prescribed an AID device in the last year. So they are familiar with AID therapy. They believed in it. They are comfortable with it.

We only call on 25% of that 40%. And our sales force expansion now is going to allow us to go from 25% to 30%. So there's another 1,500 physicians that we're going to now be able to call on that see another 150,000 people that are eligible for AID therapy. So the impetus or the rationale for the sales force expansion is to continue to be able to increase our reach and frequency and continue to drive the category as we have done for the last 5 years and growing above the category and bringing people from MDI into AID.

That's helpful. And then pricing in pharmacy as more competitors move into the pharmacy channel, can you help us understand why that's not a risk and what you're seeing?

Yes. So we pioneered the pharmacy channel almost 10 years ago and made it really a lot easier for people to start on therapy and for prescribers to get their patients on therapy. As other competitors start entering the channel, whether it's [ Twist ] last year, Tandem announcing that they're going to move some of their installed base. What we've seen is, I would say, disciplined behavior as they enter the channel. Where they're setting up their WACC, which is the -- think of it as the price -- the list price is consistent with where our WACC is slightly discounted for a, I would call it, a less differentiated product, which makes sense. And then the level of discounting that we've seen from their disclosures, it's consistent with the discounting and the rebating of the category. So we have not seen any behavior that would suggest significant discounting. Our price was actually positive in the first quarter, as we said, and we expect it to continue. And I think importantly, Travis, as they entered, it's important to think about how the dynamics happen in the channel.

First and foremost, we continue to be the driver of volume into the category -- into that channel. We win in the end at the doctor's offices. We are winning 2/3 of the prescribing that is happening. We're the #1 most requested and most prescribed AID system. And as long as we continue to do that, we're going to continue being the primary driver of volume into that channel. And I think our innovation and what I just spoke about is what gives us the confidence that we're going to continue winning at the physicians' offices.

And then in addition to that, as they enter the channel, they're entering in a place where we are multiples bigger than they are. So if you think about the dynamics and how you get into formulary and trying to displace competition, it would be very difficult to sort of buy their way to disadvantage us if that makes sense. Now of course, they have a good tailwind as they change from their DME channel into the pharmacy channel. Some of the same benefit we saw when we did that. But other than that, what we have seen in the channel so far, it's a very -- as we expected, disciplined way to enter pharmacy.

And then on the competitors launching patch pump in 2027, starting to close the gap on form factor, what are you trying to do to continue your win rate of new patients?

Yes. So I think the fact that they're trying to come into where we have demonstrated is where patients and physicians with the type of product that wins, which is a fully disposable nonpriming, you don't have to charge automatically inserted device. It's a little bit of, I would say, a reflection that the jury has stated that the form factor that we offer is the preferred most desirable offering in the marketplace. So I think the folks finally decided to acknowledge that they need to try to close the gap as close as they can with us.

And in trying to do that, one is, from what we see, the offering is not -- as they try to move closer, it's not closing the gap fully. And as they try to get closer to us, we continue to distance ourselves from even our current offering today. So we're doing already enhancements in Omnipod 5 with the 100 set point as well as changes into the algorithm to keep people in automated mode longer. In our limited market release, the feedback has been really positive, and we have shown in studies that by just changing the 100 set point, you can get a 5-point enhancement in time and range.

And so even at the current chassis, if you will, hardware with an enhanced algorithm, we are already improving. Next year, we're going to launch Omnipod 6. And at ADA, we're going to review our STRIVE data. And Omnipod 6 is both enhanced hardware and another software algorithm enhancement. It's going to drive more personalization, as I said. It's going to require less boluses, better outcomes. And so as they're, let's say, trying to close the gap, we keep advancing our own offerings and our innovation to ensure that, that separation remains in the marketplace. And we feel very, very confident that our pipeline is differentiated and is going to continue to allow us to win.

On the fully closed loop, you're closing the loop, I think 2028. Other companies are trying to do the same thing. What makes your algorithm continue to get better and differentiate itself?

Yes. I'm glad you asked the question because I think, first, it would be helpful to maybe talk a little bit about what fully closed loop really means. There was a lot of discussion at ATTD, which is a diabetes conference that just happened in Europe, about other people speaking to what they call fully closed loop systems and fully closed loop in type 1. We get questions, why are you doing type 2 only? Are you late? Why don't you have an offering for type 1? And so the first thing that I would say is what others are calling fully closed loop, we believe actually enhanced bolus optional, but still hybrid loop system -- closed-loop systems, which means you still have the ability to bolus. You still have to have settings before you start therapy, which is what we're going to be offering also with Omnipod 6. So we see our innovation on hybrid closed-loop systems continuing to be competitive as to what other people are calling fully closed-loop systems.

Now our type 2 fully closed-loop system that will launch in 2028, it's truly different. What I mean by that is there is no setting. Physicians don't have to tweak with the device before a patient can start. They write a prescription, the person with diabetes or patient goes to the pharmacy, picks up the device, starts on their own. They can get trained on their phone on their homes. And then they put the device on. There's no meal announcements. There's no bolusing. The device doesn't even allow for bolusing. And so think of it as -- we use this analogy of a Waymo versus a Tesla. It's like you do not drive at all as opposed to kind of drive assist.

And the reason why this is important is, especially for the type 2 population, 70% of the folks that have type 2 that basal and bolus, they are seen by PCPs, primary care physicians. Primary care physicians, they -- going back to our expansion of the sales force and what it's going to take to continue to unlock that penetration. They are not going to start type 2s on pumps if they have to do a heavy lift to set them up. They are not comfortable with the technology. They are not going to know to do all those settings. And so having a device that is as easy as CGM to onboard is truly what's going to unlock that big TAM, that total addressable market, to become a serviceable market to allow us to actually have prescribers, be comfortable prescribing and type 2s being easy enough for them to onboard. So that's why we think that's another sort of S-curve inflection point when we launch that truly differentiated product.

And just as a reminder, we presented some data from our feasibility study at ATTD on the fully closed loop. It showed a time in range increase of 24 points from starting an MDI, getting people to time in range of 68%, which is truly compelling for very, very little effort and interaction.

On the LRP, you call it 20% CAGR, but Omnipod 6 is '27, fully closed loop is '28. How should we think about the cadence of that 20% CAGR?

Yes, that's what I was talking about a little bit. It's not linear, right? You asked me about the exit of this year in the second half. So if it's in the high teens, what does that mean for 2027? It means that maybe 2027 is below the 20%, and then it reaccelerates in 2028 as we launch additional innovation. And that, again, is consistent with what we've seen -- you've seen us do in this space with Omnipod 5 launch, really accelerating growth, a little bit of a slowdown in 2024, reaccelerating in type 2. But I think when you look over the last 10 years, we have had 20% or better growth for 10 years in a row. And in addition to the innovation that we are delivering, it's really the fact that we are still in a very underpenetrated category. And the fact that, that innovation does allow the category to be unlocked. It does allow people to move from MDI into AID. And that has been what the history has shown and what we expect to continue.

Okay. Helpful. On -- I think earlier, I meant to ask about retention because there was another topic on the call. So if we can just touch on that, too.

Yes. We talked a little bit about that and retention was said it differently attrition. And as we launched into type 2 last year, we had a hypothesis that attrition for type 2 was going to be a little bit higher than type 1 and we are seeing that happen. I think importantly, it's not different than what we expected. It's playing out pretty much as we expected. And so as our installed base of type 2 grows, attrition could become higher for overall. But I think two important things. One is we're not standing still, right? As we see this attrition in type 2 being higher than in type 1, we are making a lot of -- we're putting in place several interventions to help minimize the impact of attrition in type 2. What we have seen is it's more pronounced in the first 90 days. It's when they're getting used to the device for the first time. They are doing the first pod change. They're learning how to use it. And we have and we're using a lot of AI insights to help have a more proactive outreach to that type 2 population, to reach them as they are getting these critical moments. And we are seeing some really good traction in using predictive tools to interject or interfere before they attrit and then remediate that or hold to them and not let them attrit. And so what we have had with some pilots late last year is really substantiated that the value proposition of those interventions, and we're amping those into 2025 -- 2026, excuse me.

The other thing also is, even as type 2 in the U.S. has slightly higher attrition than type 1 in the U.S., we're actually seeing type 1 internationally get a lot better. And that is a result of moving from DASH into Omnipod 5 and seeing that stickiness of Omnipod 5 really delivering. And so for total company, as we look at attrition or retention inversely, it's actually very stable. It was stable last year and what we're seeing is stability again in 2026.

On margin expansion, 100 basis points a year, is just maybe kind of the levers to get to the 100 basis points? Is there upside to that? Is it more in gross margin or OpEx?

So we have what I would say or describe as a very compelling financial algorithm. When you're growing 20%, then you have best-in-class gross margins in the industry of above 70%, it puts us in a great position to be able to do both, to deliver compelling margin expansion of 100 basis points per year as we guided and continue to make meaningful investments.

To your point, where is the expansion is going to come from. We expect gross margin to continue to moderately increase even now above 70%. And with the top line growing 20%, you can get a lot of margin expansion even as you -- this quarter, we grew R&D 50%, and we still deliver compelling margin expansion. So that algorithm works really well when you have strong top line, compelling gross margin, and it allows you to continue investing to drive that top line and deliver that margin expansion and free cash flow at a very compelling pace.

I wanted to kind of go back and touch on the U.S. new patient starts. We are estimating they were up high single digits year-over-year, which is sequentially decline low double digits, which slowed down in the year-over-year growth rate. Just understanding kind of what drove that slowdown in Q1 on new patient starts? And then how to think about new starts in Q2, 3 and 4 this year?

So as we talk -- we started the discussion talking a little bit about that seasonality. So that is, to your point, the sequential decline in new patient starts. But to your point, still high single-digit growth year-over-year in the U.S., very strong growth in type 2 in the U.S. year-over-year, a little bit flattish to down in type 1. And then internationally, still very compelling growth year-over-year and sequentially. So the seasonality that we talked about was very much a U.S. phenomenon. And so that puts us in a really good position. Year-over-year growth in NCS for total company was still very healthy. And we think as the seasonality doesn't continue into Q2, that we're going to go back to continued strong growth year-over-year and accelerated NCS through the year.

And type 2 new starts specifically, I think we were pretty similar down quarter-over-quarter, but a little more seasonality, how should we think about type 2, especially as you face tougher comps?

Yes. Type 2, to your point, was maybe a little bit more seasonal in terms of sequential decline versus type 1 in the U.S. And that's a little bit of that discussion we had on Medicare. Type 2 population is even more indexed, if you will, on the Medicare channel. And in Type 2 year-over-year, we saw a very, very strong growth. So if you think about it, last year was the first year of our type 2 indication in earnest. And on that high basis of growth last year, we still deliver very compelling growth. So we feel really good about the type 2 continuation as a segment and source of growth in NCS for us going forward.

And then internationally, just touch on how you're balancing kind of investments in the U.S. versus internationally and how you think about OUS growth?

And I'm glad you asked about that because I think a lot of times, people don't give credit to international. It's all about the U.S. And one, our international business is doing incredibly well, third quarter of above 40% growth. Now some of that is price mix realization benefit, which will modulate as we continue to move our DASH installed base into Omnipod 5. We're about 65% through that. So there's still runway to get that price mix benefit realization. But the preponderance of the volume -- continues to be -- has been and will continue to be volume. And the business is very, very healthy. We continue to see even in the markets where we had launched the longest like the U.K., we had record new patient starts in the U.K. as NHS continues to expand, not just access but funding to get people into AID. We continue to see access gains in newer markets like Canada, where we have expansion of coverage in 2 provinces. We have new markets that we're going to enter, like Spain that we're going to launch later this year, Travis. So we feel really, really good about our performance internationally. And I think importantly, a lot of times, people don't give credit because maybe the market -- people think it's not as financially attractive. The margins that we have internationally are very healthy. And you saw us expand margins last year even as the growth internationally was higher than the growth in the U.S. So it shows that ability for us to expand margins even as we grow more outside of the U.S. than in the U.S.

All right. I think we're out of time. Thank you.

Thank you so much.

Good morning, and welcome to the Insulet Corporation First Quarter Earnings Call. As a reminder, this conference call is being recorded.

I would now like to turn the conference over to your host, Clare Trachtman, Vice President, Investor Relations.

Good morning, and welcome to our first quarter 2026 earnings call. Joining me today are Ashley McEvoy, President and Chief Executive Officer; Flavia Pease, Chief Financial Officer; and Eric Benjamin, Chief Operating Officer. On the call this morning, we will be discussing Insulet's first quarter results along with our financial outlook for the second quarter and full year 2026.

With that, let me start our prepared remarks by reminding everyone that we will make forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on current expectations and assumptions and involve risks and uncertainties that could cause actual results to differ materially. Please refer to today's press release and our SEC filings, including our most recent Form 10-K and Form 10-Q for a discussion of these risks. We undertake no obligation to update any forward-looking statements.

In addition, on today's call, non-GAAP financial measures will be used to help investors understand Insulet's ongoing business performance, including adjusted gross profit, adjusted operating income, adjusted EPS, free cash flow and constant currency revenue, which is revenue growth, excluding the effect of foreign exchange. Reconciliations of the non-GAAP financial measures being discussed today to the comparable GAAP financial measures are included in the accompanying investor presentation and are 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, Eric and myself will be available to address any questions.

Now I'd like to turn the call over to Ashley. Ashley?

Thank you, Clare, and good morning, everyone. We're pleased to report a strong start to 2026 with continued growth momentum, robust margin expansion and disciplined execution of the strategic priorities we shared at Investor Day. Our first quarter performance clearly reflects the opportunity in our large and underpenetrated markets, the strength of our differentiated technology and compelling clinical outcomes, the scalability of our recurring revenue business model, and the deep expertise and commitment of our teams around the world to finding a better way for people living with diabetes.

We also made notable progress on our strategic priorities, which are to accelerate innovation, that improves outcomes and unlocks new segments, develop our core markets as the category leader, strengthen our commercial capabilities, build a world-class team to enable our growth ambition, and leverage our financial strength to invest in and scale our business profitably.

In the first quarter, we achieved 30% revenue growth, including 28% in the U.S. and 45% internationally. We continue to expand our customer base through new customer starts and enjoy strong retention and loyalty among our Podders globally. Leveraging our strong rent growth, we expanded adjusted operating margin by 110 basis points year-over-year. Adjusted EPS growth of approximately 40% was driven by our robust top line growth and margin expansion and the benefit of our first quarter share repurchase.

This performance reinforces our confidence in the financial growth algorithm we laid out last year and in our strategy to capture the significant opportunity ahead of us as the market leader and primary driver of category growth in the fast-growing global AID market. As a result, we are raising our full year 2026 total company revenue growth guidance from 20% to 22% to 21% to 23%. Flavia will share more details on our performance and outlook shortly.

But let me first walk you through how we are developing our key markets, driving performance and advancing our strategic priorities. Starting with the U.S., our growth this quarter was strong, reinforcing our market leadership. We grew new customer starts year-over-year led by strong momentum in AID adoption for type 2 and benefited from positive pricing. We did experience greater than normal seasonality, which we believe was driven by the annual reset of deductibles impacting patient co-pays and co-insurance. These factors contributed to what appears to be a slower start to the year across the U.S. diabetes category.

Improving month-on-month trends over the course of the quarter and into April suggests this was a temporary headwind, and we remain confident in our U.S. outlook for the full year. Our upcoming integration with the Libre 3 Plus sensor this quarter will unlock the benefits of Omnipod 5 for the nearly 450,000 people with diabetes currently using the Libre 3 Plus sensor.

In U.S. type 1, we continue to extend our leadership and drive increased penetration with solid growth in our customer base, both annually and sequentially. Commercially, we are upskilling our sales force to strengthen our messaging our clinical performance in the field, and we're deploying tools to optimize physician targeting and conversion while expanding reach and frequency. I remain confident in the opportunities to continue to move people with type 1 diabetes from MDI to AID and drive increased penetration.

In U.S. type 2, we continue to expand the category and accelerate adoption from those using MDI. As expected, our type 2 customer base grew rapidly over the prior year. Supported by our prescriber education initiatives and the ADA guideline update, which established AID as the standard of care. We remain confident in the trajectory for U.S. type 2 AID adoption and in expanding our market leadership position.

Notably, Omnipod's first-mover advantage gives us a head start in understanding the nuances of this market and in designing targeted initiatives to eliminate the barriers for adoption. For example, access and affordability are even more important for adoption in type 2 than in type 1. In fact, our ongoing efforts to increase access and remove prior authorization requirements generated a 4% net access improvement in the first quarter, benefiting an additional 16 million lives. We continue to see a vast opportunity to bring meaningful improvement in both clinical outcomes and quality of life to the millions of people with type 2 diabetes.

Moving outside the U.S. Our international business delivered another standout quarter, driving significant profitable growth and recording our third consecutive quarter of growth above 40%. We achieved 45% constant currency revenue growth supported by continued strong year-over-year and sequential growth and new customer starts. As well as positive price/mix from the ongoing conversion from DASH to Omnipod 5. We are generating robust growth across our largest and most established European markets including the U.K., France and Germany, all of which delivered strong first quarter new customer starts, driven in part by our focus on new prescriber activation.

In the U.K., we achieved record NCS 3 years into our launch, reflecting the success of our strategy to deepen penetration internationally. We also continue to expand access and reinforce the value of Omnipod 5. In Canada, for example, we secured improved reimbursement and new coverage for Omnipod 5 across four provinces further fueling our growth. We now have reimbursement approval for 85% of the Canadian market.

Looking ahead, we remain on track to launch Omnipod 5 in Spain in the second half of the year. Spain has more than 200,000 people with type 1 diabetes, a high rate of CGM adoption and one of the lowest levels of AID penetration in our European markets. And in the second half of this year, we plan to launch Libre 3 Plus in Germany and Canada allowing us to bring Omnipod 5 to new populations as Libre 2 Plus is not available with a pump in either of these markets.

Critically, our rapidly growing scale internationally continues to drive operating leverage and significant margin expansion. Our strategy to deepen our penetration and our largest and most established markets is working, and our execution continues to exceed expectations. We continue to see the AID category expand globally. While our success is attracting competition, this further validates and raises awareness of AID and Omnipod, the most recognized brand in the category. We believe this dynamic is good for the category and good for Insulet.

We are uniquely positioned to meet that worldwide demand at scale, and we are investing in accelerating innovation, strengthening our commercial capabilities, developing our markets, building a world-class team and scaling our global operations to ensure we continue to benefit disproportionately from category growth.

Let me unpack these priorities further. Innovation remains the core driver of our growth strategy. Beginning with this year's launch of our second-generation algorithm coupled with our Libre 3 Plus sensor integration, and the broader rollout of Omnipod Discover, our new data insights platform. First, let me walk through the specific improvements behind the meaningful Omnipod 5 algorithm enhancements we're launching this quarter. And our simulated analysis switching to target glucose setting from 120 milligrams per deciliter to our new 100 milligrams per deciliter option delivered an approximately 5% improvement in time and range. This is better performance through a simple setting change with no added user burden.

Additionally, we improved the algorithm performance, so it now increases the amount of time users spend in automated mode with fewer interruptions during extended high glucose events. This has been a pain point for prescribers and Podders. We are pairing these two launches with an increased focus on clinical education to ensure prescribers understand the strong clinical efficacy and safety profile of Omnipod 5. Algorithm innovation will continue to be a key R&D focus.

In fact, we are increasing investments this year to advance our next generation of products. We are making strong progress on our sixth generation Omnipod paired with our third-generation algorithm, which is planned to launch in 2027. We are sharing data from STRIVE, our Omnipod 6 pivotal study at ADA in June, which will demonstrate continued improvement in automation and clinical outcomes. This gives us confidence in the durability of our market leadership.

Next up is our transformative approach to unlock the type 2 diabetes segment. We are making progress on what we believe will be the first of its kind, truly fully closed loop system for people with type 2 diabetes. We're encouraged by the results from our feasibility study that we presented at ATTD, which highlighted 68% time and range with no boluses. And I'm very pleased to share that just last week, we enrolled our first participant in EVOLVE, our pivotal study to support FDA filing next year and launch in 2028.

These new product investments are designed to help us deliver better outcomes, enhance the user experience and unlock new market segments. Accelerating the shift to simpler, more intuitive insulin delivery and extending our leadership. We also recognize that as this category grows, innovation alone is not enough and we are investing in building a top-notch team and commercial capabilities to expand the AID market, fortify our competitive position and drive rapid adoption.

As part of that effort, we recently appointed Mike Panos as Chief Commercial Officer to lead our global commercial organization. Mike brings a proven track record of building and scaling world-class sales team. Driving market expansion and delivering sustained double-digit growth across leadership categories. Our investments in our brand are also delivering unique commercial value. We have the most recognized brand in the category, which continues to bring in new users and generate traction with prescribers that our sales force doesn't actively target.

We regularly activate our #1 brand to increase category and brand awareness. And this quarter, Omnipod's feature appearance on the TV show scrubs was a resounding success at raising awareness and amplifying representation. After the show, our inboxes were flooded with stories about how meaningful and moving it is to see people with diabetes show up like this. living their lives daily with ease. These moments also drive action like Michelle, who has type 1 diabetes and reached out to one of our support specialists online after watching the episode.

Michelle had a script for Omnipod written 3 years ago, but never move forward. With this nudge, we successfully reengaged her and got her started on Omnipod. Market development remains a top priority. In addition to the progress on market-specific initiatives that I highlighted earlier, we are seeing strong traction with our global KOL engagement and professional education efforts. We doubled the size of our U.S. peer-to-peer education program in 2025 and expanded it by more than 50% year-over-year this quarter.

In Spain, we are investing in key opinion leader education well ahead of the advance to accelerate adoption. As I mentioned earlier, our efforts to improve access, secure new coverage and strengthen our value to payers are yielding tangible benefits to our growth and sustaining our market-leading U.S. coverage of over 90%. These efforts also support the maintenance of our preferred position in the pharmacy channel amid increasing competitive activity, which validates the value of our pioneering pharmacy pay-as-you-go model. Notably, based on the pricing activity we have seen in this channel to date, we continue to expect rational and disciplined pricing and rebate behavior. We remain focused on educating payers on the clinical and economic value of Omnipod to ensure broad high-quality access in all markets.

Finally, scaling global manufacturing and operations continues to be a priority. We remain focused on quality, reliability and customer safety. Our team rapidly responded to execute the voluntary medical device correction in March and implemented targeted fixes for the applicable manufacturing process. Manufacturing disposable, sophisticated electromechanical devices at consumer scale and medical quality is a complex process.

We continue to believe that our ability to meet the unique manufacturing demand of tubeless AID remains a source of strategic and financial advantage. We have market-leading gross margins driven by our ongoing manufacturing productivity improvements. We continue to ramp our capacity and automation investments in Acton, Malaysia and Costa Rica to support future growth.

In summary, we are executing on each pillar of our strategy: accelerating innovation, developing our markets, strengthening commercial capabilities, building a world-class team and scaling global growth profitably. Omnipod continues to be the market leader and the disproportionate driver of AID category growth in the U.S. and abroad. Our investments are focused on extending our leadership by deepening differentiation across our platform while continuing to lighten the burden for people living with diabetes.

Our strong results this quarter are a testament to the strength of our position, our execution and our attractive recurring revenue business model. I remain confident in our outlook for the year. Our strategic path forward and our ability to deliver sustained profitable growth for shareholders and better outcomes for all of our Podders.

With that, I'll turn the call over to Flavia.

Thank you, Ashley, and good morning, everyone. As Ashley highlighted, the Insulet team delivered a strong start to the year. First quarter total revenues of $762 million increased 34% on a reported basis and 30% on a constant currency basis. And total Omnipod revenue grew 33% on a constant currency basis.

In Q1 of 2026, our global customer base grew nearly 25% year-over-year, driven by increased adoption of Omnipod 5 across both the U.S. and international markets. Global new customer starts also increased versus the prior year period with growth both in the U.S. and internationally. MDI conversions continue to be the primary source of new customer starts, and we expect this to remain the case given the significant under penetration across our core markets including U.S. type 1, U.S. type 2 and international type 1 diabetes. Globally, utilization and annualized retention rate remained similar to the prior year period.

Now turning to our performance in greater detail. U.S. Omnipod revenue grew 28% in the first quarter, exceeding the high end of our guidance range. Driven by continued demand for Omnipod 5 across both type 1 and type 2. The quarter included a benefit of approximately $10 million in revenue related to the timing of certain distributor orders which we expect to be consumed in the second quarter. Excluding this impact, underlying U.S. revenue growth was approximately 26% coming in at the high end of our guidance.

First quarter U.S. new customer starts increased year-over-year but declined sequentially. As Ashley noted, we attribute the sequential decline to seasonality, driven by the annual reset of deductibles which impacts patient co-pays and co-insurance. This effect was less evident in 2025, given that we were in the earlier stages of the type 2 launch. Importantly, we saw U.S. new customer starts ramp through the quarter, and that momentum has continued into the second quarter.

International Omnipod strength continued in the first quarter with revenue growth of 59% on a reported basis and 45% on a constant currency basis. Volume remains the primary driver of international Omnipod growth supported by customer expansion across both established and newly launched markets, along with favorable price/mix benefits from the transition of DASH.

Continuing down the P&L, our first quarter GAAP gross margin was 69.5%, and included approximately $12 million of expenses associated with our medical device correction. Our adjusted gross margin was 71%, down 90 basis points year-over-year. During the quarter, we incurred some increased excess and obsolescence costs as we transition to new pod configurations that position us to support Libre 3 Plus sensor integration and upcoming algorithm enhancements. These costs negatively impacted adjusted gross margin by more than 150 basis points. After adjusting for this impact, gross margin performance in the quarter was driven by strong top line growth, continued manufacturing productivity gains and positive pricing.

Turning to OpEx. We continue to invest with intention to both maintain and extend our leadership while remaining disciplined in how we deploy capital. During the quarter, we ramped R&D investments to support our innovation road map and advanced key clinical development programs, including Omnipod 6 and fully closed loop for type 2. These investments position us to continue delivering meaningful innovation over the long run. We also increased SG&A investments as we continue to prioritize market development initiatives to unlock AID penetration and demand generation efforts.

We expect to continue ramping investments in sales and marketing as we expand our sales force during the second quarter and prepare for upcoming product launches including Libre 3 Plus integration and our latest algorithm enhancements. These investments expand our commercial capacity, broaden HCP coverage and enable us to drive additional new customer starts. First quarter adjusted operating margin expanded 110 basis points to 17.5%, driven by strong top line growth and SG&A leverage. Our financial strength allows us to continue to invest for future growth while delivering margin expansion.

First quarter net interest expense was $9.8 million, an increase of $11 million primarily driven by our prior year debt refinancing activities and lower interest income. Our first quarter adjusted tax rate was 19.8%, reflecting a benefit from U.S. R&D tax credits and a favorable mix of earnings. First quarter adjusted EPS was $1.42, up approximately 40% from $1.02 in the prior year period. We are well positioned to continue driving strong earnings growth reflecting the strength of our durable recurring revenue model, our compelling top line trajectory and the operating leverage we are generating.

Turning to cash and liquidity. During the quarter, we repurchased approximately 1.25 million shares for $300 million. We ended the quarter with $480 million in cash and the full $500 million available under our credit facility, and we generated approximately $90 million in free cash flow in Q1, reflecting our strong operating performance in the quarter.

Now turning to our outlook for the second quarter and full year 2026. For the second quarter, we expect Omnipod revenue to grow 21% to 23% and total company revenue to grow 20% to 22%. On a reported basis, foreign currency is expected to contribute approximately 100 basis points of benefit to both growth rates. In the U.S., we expect Omnipod revenue growth of 18% to 20%. This guidance reflects approximately $10 million of revenue that shifted into the first quarter creating a 200 basis point headwind to second quarter growth.

Internationally, we expect Omnipod growth of 28% to 30%. While growth remained strong, as we discussed last quarter, we expect the pace to moderate as we anniversary successful launches from last year. On a reported basis, Foreign currency is expected to provide a favorable impact of approximately 200 basis points on international growth.

Turning to our full year 2026 outlook. We now expect total Omnipod revenue growth of 22% to 24% and total company revenue growth of 21% to 23%, reflecting our strong start to the year. We expect foreign currency to provide a favorable impact of approximately 100 basis points for the full year. For U.S. Omnipod, we continue to expect our revenue to grow 20% to 22%. We expect year-over-year growth in U.S. new customer starts for the year, positive pricing and similar utilization trends. We do expect retention rates to decrease modestly as our type 2 customer base continues to grow, which is why we're investing in programs focused on improving onboarding, engagement and long-term retention.

For international Omnipod, we now expect 2026 revenue to grow 26% to 28%. On a reported basis, we expect a favorable impact of approximately 300 basis points from foreign currency. We expect year-over-year growth in international new customer sites for the year as we penetrate further in current markets and expand Omnipod 5 into new markets. Omnipod 5 is now available in 19 countries, and we will continue to broaden our reach and plan to enter Spain in the second half of 2026.

While volume remains the primary driver of our international revenue growth, our guidance also reflects a benefit from positive price/mix realization. As customers continue to transition from Omnipod DASH to Omnipod 5. Overall, our international growth guidance assumes similar utilization levels and improved retention for 2026 relative to 2025.

Turning to 2026 operating margin. We continue to expect approximately 100 basis points of operating margin expansion for the full year driven by strong top line growth and ongoing gross margin expansion while funding a meaningful step-up in R&D and continued investments in sales and marketing, assessed by leverage in G&A. I would note, this outlook reflects the E&O costs we absorbed in the first quarter as well as incremental raw material and shipping costs driven by the ongoing conflict in the Middle East.

Looking at a few items below our operating income. We expect 2026 net interest expense to total approximately $40 million, an increase of approximately $15 million primarily due to lower interest income. We now expect our 2026 non-GAAP tax rate to be in the range of 21% to 22%, reflecting the lower Q1 tax rate, favorable mix of earnings and improved utilization of foreign tax credits. Based on these factors, we continue to expect adjusted EPS to increase by more than 25% in 2026. We expect free cash flow to be approximately flat from 2025 levels, supported by robust growth and continued margin expansion, partially offset by a ramp-up in capital expenditures to support our continued global manufacturing expansion plans.

To close, we're executing against a clear framework focused on delivering top-tier growth margin expansion and increasing free cash flow. This approach underpins durable long-term value creation while enabling us to expand access to Omnipod for people living with diabetes worldwide.

With that, operator, please open the call for questions.

[Operator Instructions] Our first question comes from David Roman from Goldman Sachs.

Maybe I'll start with a strategic one and then go on to the financials. Ashley, I think you've been in the role now just about a year. Maybe you could help frame the past year, some of your observations here. What's gone in line with your expectations? What's gone better? Where are the areas where you're focused? And how are you kind of framing Insulet now that you've been in the role 12 months?

Yes. Thank you, David, for joining. I was just last week, I'm on my 1 year, and I would say that I'm absolutely more confident now that influence potential than a year ago. You know us really as this high-growth medtech innovator doubling revenue over the past couple of years.

So I would say, first and foremost, on preserving what makes us so special. It's this culture is remarkable and patient focused, entrepreneurial spirit, and really strong competitive moats and really just focusing around how we enhance our capabilities to really double the business once again. So maybe it's just helpful to share some of the areas that we've been getting after as a team to unlock more value.

I would first start with innovation, and this is about doing things in parallel and at pace to continue our role as the tech leader. So let me give you examples. It's really about being first in line to integrate day 1 with sensors like we're doing with the Dexcom 15 day, and we will do with Abbott's upcoming dual analyte sensor.

Algorithms. David, we were slow out of the gate continuously to improve our algorithms. We've addressed that now, and we have 3 algorithm improvements over the next 3 years. Second is really about international and driving profitable growth globally. So I I'm a big believer in going deeper in core markets that matter most versus going broader at this stage. And the U.K. is a great example of this. We're several years in the OP5 launch.

This quarter, we posted record NCS. The third is about our commercial engine and being famous not just as a tech leader, but as a commercial engine. And so we have our second sales force expansion we've done in the past 12 months. It's happening this quarter. And as I've been consistently saying, it's really upskilling our force to sell clinically.

The fourth is really about strengthening our unbelievable foundation on operations as we scale globally. Costa Rica is a really good example of this. We just put in the foundation this quarter. We'll be ready to have a water type building by year-end and go live in 2029. And obviously, it's all about people.

I came here and there was a remarkably talented team -- and I'm just supplementing that team with some new leaders that have run bigger things and know how to scale. So collectively, we can get after doubling the business again. So this is what gives me confidence that we're going to continue to grow the category, serve more Podders and really importantly, continue to increase our earnings power.

You had a second question, David?

Yes. I appreciate all the perspective there, and that does kind of segue to my second question. If you take kind of Q1 performance in the second quarter guidance into consideration, the outlook implies kind of high teens growth in the back half of the year. Can you help us unpack that a little further on a geographic basis and your confidence in the 20% LRT guidance as you exit 2026 potentially below that level and maybe perhaps there's some conservatism in the outlook given the time line where we are in the year?

David, it's Flavia. I'll take that one. So to your point, yes, the midpoint of the guidance will imply second half growth in the high teens. I would first start by saying we're still seeing very, very strong performance in both the U.S. and internationally. And as you saw, we just raised our guidance for international and the total company right now. Last year, there were a different -- and you tried -- you asked me to unpack between the two regions.

So in the U.S. last year, we saw the opposite impact with comps playing a role in how this year, first half, second half compared to last year, first half, second half. In international, we're going to continue having a favorable impact of price/mix realization. But it's going to be at a more moderate pace as we increase penetration of Omnipod size in our international markets. So when we look at the comps, I do think it's also important to look at dollars of growth. When you look at this year in total year, we're actually going to be in line at the midpoint of the guidance with the same level of dollar growth that we delivered last year.

The first half, second half is going to be different. But the primary driver of that is actually currency. If you look at that and look at the numbers on a constant currency basis, we had the currency playing a role in the second half of 2025, that was a tailwind in the first half of 2026 again as a tailwind. So when you adjust for those things, the first half, second half phenomenon gets a little bit more smooth, I would say.

But importantly, let me close where your question was leading to, which is how does this play out in terms of our outlook for next year and beyond that we share with all of you at the RRP. On the sustainability of our 20%, we feel very, very confident in our ability to drive that 20%. And what gives us that confidence, the innovation and commercial catalysts that we're going to continue to execute. This year, we're launching Libre 3 Plus, which as you saw in our prepared remarks, expands our TAM by another 450,000 people with diabetes. We have the algorithm enhancement.

Ashley talked about the ones we're launching this year. We're going to continue with Omnipod 6 next year and then fully closed loop in 2028. And then commercially, in addition to leaning further on selling clinically and competitively, Ashley also just mentioned that we're going to be expanding our sales force this quarter and as you can imagine, the full benefit of that expansion is really only going to be felt mostly next year. So we do see that as another tailwind.

And internationally, similarly, those new product introductions are also going to have a benefit. We're going to launch Libre 3 Plus in Germany and Canada. These are few markets where there's no Abbott sensor. And so that are compatible with our product. So that, again, is another expansion of our serviceable market. In addition to that, we're going to continue to execute on our playbook of increasing access. You saw us just get the benefit of that for Canada this year with expansion of coverage in additional provinces.

We just launched in the Middle East. We're going to be launching in Spain in the second half. So again, we feel very, very confident that we have the right innovation and commercial levers to continue to support the 20% growth that we put out.

Our next question comes from Robbie Marcus from JPMorgan.

I want to follow up on that last question. Flavia, as we think about similar dollar growth this year, that does imply deceleration as the sales base gets lower. and you did mention you're going to be exiting sub-20% in the U.S. in the second half of this year. So I think the question a lot of investors have is, how do you maintain that 20% growth rate over the LRP if you're decelerating into year-end and dollar growth is not increasing year-over-year. Maybe just fill us in on the gaps about 2027 and how that improves? And then I have a follow-up.

So Robbie, I think going back to what I just articulated, we will continue to drive the 20% with the innovations that we're launching. In 2027, we do have Omnipod 6 and the full benefit of the sales force that we're expanding this year that will be a tailwind.

I think -- I mean, Robbie, just maybe what's helpful is kind of our philosophy of how we set guidance. A year ago, I came in and we got the team together. We refined our strategic plan. We racked and stacked a whole portfolio of growth opportunities. And this led us to really a strengthened conviction in the untapped market opportunity Flavia was talking about the high TAM, low penetration.

And quite frankly, our proven track record of unlocking that growth. So this led us to really raise our ambition as a company, which we shared at our IR Day, which is the first one we've done in 10 years in November. And we shared our strategies, our financial algorithm, and then we set our financial targets accordingly. So our goal is to outperform and our quarter 1 results reflect this along with our increasing full year outlook for the year. So this is just really good momentum, and it gives us confidence in our commitments that we shared at our LS Base.

Great. Maybe a quick follow-up. You talked about a slowing market on seasonality and new patient starts in the first quarter. I guess two parts. One, what do you think the market grew? And I know it's hard to give an answer without everybody else reporting yet, but what do you think it grew? Why was it more seasonal than usual? And how do you think your new patient starts U.S. OUS did in first quarter?

Well, obviously, I don't have the market. I mean the market exit, I would tell you, '24 and '25 at an accelerated rate versus prior year. So we're encouraged with the continued momentum listen, quarter 1 started off slow because we had higher than usual quarter 1 seasonality. We attribute this to the reset of deductibles and potentially the ACA transition. But sequentially, every month, we've been getting better. And I feel really good coming out of April as we look to quarter 2 and for the full year.

Our next question comes from Travis Steed from Bank of America.

I wanted to ask about the type 2 retention comps. Just kind of curious what you're seeing there, why kind of call it out slowing? And then when you think about kind of the type 2 opportunity, is kind of this next kind of 5 to 10 points of the penetration curve going to be harder to get the first few points that you've got of the last year? Just kind of curious how the type 2 ramp is going.

Yes. Thank you, Travis. I mean our type 2 momentum remains strong. Our new customer starts in type 2 grew meaningfully both year-over-year in the quarter despite this Q1 seasonality that I spoke about. When we look at our customer base, we expanded both sequentially as well as year-over-year. We're very much, Travis, at the early innings of this. I'd say we're about 5% penetration and CGM is around 55%.

And we are actively preparing for a highly transformative launch where we're going to be sharing our feasibility data at the upcoming ADA called EVOLVE. We've just enrolled our first patient last week. And this will be what I call the industry's first truly fully closed loop system for type 2. And like what do I mean by that? It's a CGM like as you can get and put it on, no bolus, no user interaction, no settings, which unlock the whole primary care physician audience and really Uber user consumer-friendly training. So we specifically designed our fully closed loop to unlock that huge TAM in type 2 where they need it to be a CGM-like experience.

And what about the retention piece?

I would say, listen, we are -- have healthy retentions. We're not seeing any meaningful change of year-over-year. We're getting to know this market, and we're -- I would say we're innovating our customer experience model. But from an aggregate basis, our total company, we still have about 90% retention.

Yes. And Travis, I would say, I think you were alluding to my prepared remarks, I talked a bit about a slight deterioration in the U.S. as we continue to expand into type 2. But this was very much in line with our expectations. It is a different population and the retention or attrition is exactly what we expected it would happen. And we are pleased also to see that internationally, the retention actually as we launched Omnipod in additional markets, has improved meaningfully. And so on a total company basis, as Ashley said, retention remains very stable.

Okay. And then what percent of the new starts were type 2 this quarter? I think I missed that. And then when you think about the seasonality comments, is there any impact on the seasonality from the type 1, type 2 mix or kind of the macro? Just kind of curious to follow up on the seasonality comments.

No. I think, listen, Travis, we had really healthy, I told you, total year-over-year growth. We experienced some softness in Q1 is a slower start for NTS. -- customer base is strong. I often get asked the question about like type 2, and I told you, we've got really strong momentum. I often get asked about like the GLPs, is that slowing down the progress in type 2s, and we did not observe an impact from increased GLP use on type 2 NCS this quarter.

I've always been sharing that we think that GLP-1s are very complementary to AID therapy, not competitive. It's in fact, what we studied in our SECURE-T2D trial. And we see diabetes as a chronic progressive disease and no date that no one has been able to show that you can reverse beta cell decline. So once you get on insulin, AID is really the standard of care for the ADA. And we look again at this huge TAM of 5.5 million people with type 2 diabetes using insulin and yet only 5% or less are using AID. So we really look to unlock this right now and really drive accelerated penetration when we have our fully closed loop launching in 2028.

Go ahead, Eric.

And Travis, just to build on the numbers. The split of type 1, type 2 NCS was about 40% type 2 NCS in the quarter with similar seasonality seen in type 1 and type 2 ever so slightly more in type 2, but consistent across the two segments.

Our next question comes from Larry Biegelsen from Wells Fargo.

I'll just keep it to one, Ashley, and I'm going to try to ask the competition question a little bit differently maybe than it's been asked before. So we understand you believe it will be hard for competitors to manufacture to this pump or ramp the manufacturing. But I don't think you're saying that there won't be any tubeless competition in the future.

So my question is, as your share of tubeless pumps declined from 100% today, I mean, just mathematically has to go down if there's competition, what offsets that to maintain your 20% growth goal? Is it faster overall pump market growth or is it a greater shift from tube to tubeless pumps or both?

I mean thanks, Larry, for the question. The short answer is this is not a market share trading. This is about bringing new people into the category and the category expanding as a whole. I mean we're the market leaders, and we have a substantial distance versus the others. And I fully expect us to sustain share leadership. I was talking about we have no intention of ceding our tech leadership.

Next year, we're going to be on our sixth-generation Omnipod while others attempt to come out with their first. And we know there's been a history of the competition trying to work on tubeless solutions for decades, which really underscores how hard it is, how complex it is to bring these highly disposable devices to market. There's really a graveyard of a lot of failed attempts. We have a head start of really mastering how to develop and manufacture at scale. And this has given us a remarkable cost advantage and scale advantage. And we've got the earnings power to keep growing.

So I think what's really important in this category is to understand that when new entrants enter, all boats rise. this increased promotion and the increased awareness will accelerate category expansion, which is exactly what we're seeing in the type 2. When you look back from 4 years ago, we had about 60% of patients coming from MDI into the AID category, and that number is now 80%. So the category is expanding.

Our next question comes from Matthew O'Brien from Piper Sandler.

I'll ask them both upfront. I hate to beat this dead horse on new customer starts in Q1, Ashley, but I'm going to. You've got a bunch of new competitors in the pharmacy channel. I just want to make sure there wasn't any kind of disruption maybe early in the quarter as they were pushing on the pharmacy side to sort of made it more difficult for you to get patients through the pharmacy channel. and that's why you saw a little bit of softness. And then the second question is there's a lot of investor consternation around the recall. Can you just frame up what you're seeing in the marketplace or from your customers in terms of the recall and the impact it's had on the business and then ability to add new patients?

Yes. No. Thank you, Matt. Let me first be very clear. In quarter 1, we don't think price had an impact. In fact, U.S. pricing for us was positive in quarter 1, and we expect this to continue for the full year. What we've been seeing as others have entered the pharmacy channel pricing, a rebate behavior has been really rational and disciplined. So we are not seeing significant discounting relative to the norm.

Our -- like our strategy is about creating durable high-quality access with broad affordability. So we are not going to trade long-term value for short-term positioning. And I think what's really important to understand that maybe not fully appreciated is the significant size and scale that we benefit from. Our volumes are multiples larger than the nearest competitor. And we don't expect that dynamic to change now or in the foreseeable future.

You put that, coupled with we're the number one prescribed brand and we are the number one requested and this is what gives us confidence for pricing going. So important, but we still lead with a competitive advantage there.

Let me go to your second question, which is about quality and our recent medical device correction. I would say, hey, listen, in our industry, field actions are part of being in a health care industry, but it was an absolute tough moment for us. And patient safety is always our #1 priority. We're monitoring and we're investigating customer complaints routinely. I am proud with how our team rapidly responded to the voluntary medical device in March. We do not believe that the medical device correction did have an impact on NCS in the quarter.

As I discussed, I believe the slower start was really due to the broader quarter 1 seasonality and the reset of the deductibles. Now last week was another tough week with the FDA updating its communication about our MDC to reflect our April 10 update and misreported MDRs as SAEs. And listen, I know this created a bunch of confusion, and we're really not happy about that. What's important to know, though, is no additional adverse events from the MDC have been reported since the April 10 update.

And if anything, taking a step back, I think this really enunciates the high level of complexity of manufacturing sophisticated disposable electromechanical devices at scale. And in our industry, it's not possible to eliminate all risks, but what matters most is how issues are identified and addressed. And in this case, we got after it early. We've implemented targeted corrective actions, and we are going to continue to strengthen and invest in our quality systems and operating controls.

Our next question comes from Jeff Johnson from Baird.

So Ashley, I just wanted to follow up on that pricing comment. You said net pricing was up in the U.S. in 1Q. I just want to make sure that's net. That's not a WACC comment that's actually net of rebates up in 1Q. It sounds like you're expecting that to be true for the year as well.

And just wondering, we're hearing from a couple of our other companies that we speak with that they're expecting pharmacy pricing next year on a net basis to also be up again in '27 over '26. I know that's hard to predict at this point, and you won't know until you know later this year.

But as we're kind of trying to set up our models for the next year or 2, would you still build in kind of flattish pharmacy pricing in the U.S. market over the next couple of years? Would that still be kind of how you'd guide us as we build our market -- our models over the next couple of years?

Yes. I would say consistent with our Investor Day, Jeff, we expect pricing to be positive over the next 3 years. And quarter 1 is a data point, and we expect that to continue in full year '26. Again, it speaks to just the strength of the clinical and the economic value proposition that AID as a category has for payers and for PBMs.

Okay. And again, just to confirm, that's net, not WACC, you're talking?

It is not, Jeff.

Okay. And then just on type 2, I just want to make sure I understand the retention and utilization comments you're making on the U.S. Utilization was stable, retention may be under a little bit of pressure. So is that to imply that if I'm a type 2 patient going on Omnipod 5, I'm using it every day or pretty much normally like a type 1, but just more of those type 2 patients are trying it for 3 months or 6 months and then saying, "maybe it's not for me." So utilization when I'm an 5 user is stable, but more of those type 2s may be dropping out after 3 or 6 or 9 months or whatever, not sticking with it. Is that the way to think about what you're trying to communicate today?

No, thanks for the question. I think what we're learning in the patient journey of being type 2, again, we're sourcing the predominant amount from MDI is a little bit of the ongoing support. It takes them to get them on to pod and the reinforcing support that we need to do really early on. And then it smooths out, and really, there's a learning agility that has to happen early on. And then what we're finding is really good brand loyalty and really good retention over time. It is a bit of a current class in what we said in type 1. But overall, very encouraged with the progress that we've had about 18 months into this launch.

Do you want to add anything, Eric, to that?

No, I think exactly as you described, we're seeing, as you laid out, utilization for type 2, stable, pretty similar to type 1 and retention that drop off, particularly early, getting folks accustomed to wearing the product as Ashley described, is a little bit different. And so we're learning and evolving our model and how we get folks successfully on so that they can stay enduring happy successful customers on Omnipod.

Next question comes from Jayson Bedford from Raymond James.

Just on the 2Q international growth guide, it implies a bit more of a deceleration than I would have thought given it was obviously a very strong 1Q. Comps not too much difference. So I guess my question is, one, is there any stocking impact in 1Q that may be related to some of the new international countries? And then two, just outside of the comp, what weighs on 2Q international growth?

Yes. Jayson, I'll take that. So in international, while as I said, price/mix realization will continue to be positive, the pace of it will moderate a little bit as we sort of anniversary some of these launches and continue the evolution of our installed base from DASH to Omnipod 5. The dollars will continue to be sequentially increasing quarter-over-quarter on a constant currency basis, but the growth rate, as you pointed out, will decelerate.

Our next question comes from Shagun Singh from RBC.

I just had a quick follow-up. The $10 million in revenue that shifted into Q1. Can you just elaborate on what the nature of that was. And then with respect to my question, Ashley, I was hoping you could talk a little bit more on the commercial front. You guys are looking -- you guys are strengthening your message around the algorithm, time and range. You've called out three algorithm launches in the 3 years, how meaningful are those upgrades and the U.S. sales force expansion, any way to think about the pace of that? And should we expect you to continue to do that throughout '26?

Let me kind of start with your first one. We had about $10 million just from some inventory from -- that was coming in quarter 1. It went actualized. So it will come out of quarter 2. But you'll see -- I mean, quarter 2, we have a really strong call. We had 29% growth last year. So we do have a stronger comp, but we see momentum continuing in the U.S. I think it's important that I just spend a brief moment of -- you've heard me talk a lot about what are we doing commercially to strengthen our engine. And there's a couple of things that I would share, Shagun, to your point.

Number one is investing in our field. It's our #1 P&L item and making sure that we are upskilling our force to sell clinically in addition to their beautiful passion of selling our disruptive form factor. We've just retrained and retested all of our reps. We actually have the largest sales rep force in the category. And then we are expanding our call points with improved targeting and segmentation and improving our reach and frequency with an expanding prescriber base.

To your point about clinically, they've gotten really good momentum of selling our optimized setting, improving time and range. They're going to be out there this quarter talking about our new lower set point at 100 as well as keeping people more in automated mode. We're integrating with Libre 3 Plus, which brings with us 450,000 users from MDI that are on Libre 3 who are not on Omnipod into our portfolio.

You can look at our website, Shagun, I would say, where we're listing all of our updated clinical evidence relative to what's available in the industry. So please take a look at that. And then obviously, maintaining our competitive advantage in market access and affordability is a second lever.

The third, you heard me talk about this in my remarks, is really about getting our clinical performance out there. We've doubled the amount of our professional events in the past quarter. In fact, we've significantly invested in 2020, we were around 50 a year. We elevated that to about $100 to $1.50 a couple of years ago. We executed 500 peer-to-peer education programs in 2025, really all about clinical performance.

And the last really is about this brand. It was really cool to see us kind of being dropped into culture on scrubs. We got a lot of feedback of making the category really accessible to a lot more people. And this is what we will continue to do to grow the category.

So thanks for the question, Shagun.

Our last question will come from Matt Taylor from Jefferies.

I wanted to ask one on the tailwinds that you called out in '27, specifically on Omnipod 6. Do you expect that launch, I guess, to drive just increased share gains and customer starts? Or could you actually get price mix benefits from the launch of Omnipod 6 as well?

I mean, listen, this is going to be our sixth generation. It's really to sure -- to continue to extend our leadership and deliver our role of continuing to build the category and bring people in from MDI. It will have our third algorithm improvement.

And again, I come back to the simplicity if you're on MDI, how to keep it really simple. And so this new algorithm is going to have greater automation, it's going to have less bolusing, it's going to have a reduced user interaction, it was designed exactly to bring more people into the category. We're going to have some of our data shared at the ADA coming up in June of our stride, which will show about our clinical performance.

But the fun thing maybe underappreciated ads I would share is sensors have gotten really small and our Omnipod 6 also has dramatic improvement in what we call over-the-air improvement so that people can wear it on multiple places of their body. We get a lot of feedback on that. And importantly, we're also moving to a single-pod chassis, which allows prescribers to only write 1 script versus 2 scripts regardless of your sensor, and it clearly has a big impact on our supply chain and simplification.

Thank you for the question, Matt. Listen, let me just thank everybody for your questions and engagement. And we are very encouraged by the momentum of the business that we're seeing, and we look forward to updating you on our continued progress. Thanks so much.

Ladies and gentlemen, this concludes today's conference. Thank you for your participation, and have a wonderful day. You may all disconnect.

All right. Good afternoon from Barcelona. Good morning, I think, in the states where most of you are. Welcome to what I think I'm going to call our third annual podcast webcast here from the floor of the ATTD conference. I think 2 years ago, we started this in Florence, last year in Amsterdam. And this year, where are we? We're in Barcelona. And God willing, maybe we'll do one from Paris next year. It's not a bad thing to come to this meeting in such fantastic location.

With us, we've got Insulet's Chief Medical Officer, Dr. Trang Ly. Trang, good to see you again. Thanks for taking the time.

Nice to see you. Of course.

All right. I do have to read one disclosure here for everyone. Please refer to the event calendar published research or Baird's website for important disclosures regarding the companies discussed during this event. With that, why don't we jump into it? I think we've got about 35, 40 minutes or so we'll spend here.

Let's start with the elephant in the room. A little bit of news last night, a medical device recall, urgent letter went out. There has been some manufacturing issues with some lots of Omnipod 5. I think there are 18 adverse events or serious adverse events. So Dr. Ly, I mean, we'd love to hear from you what happened? And then I've got maybe a couple of follow-up questions on how you're hearing doctors responding to this issue in the field.

Yes. Thanks, Jeff, and really great to be here. As part of our routine post-market surveillance and monitoring, we look thoroughly at the complaints coming back from customers and customer feedback. And through that process, we uncovered a manufacturing defect. And the issue is that there was a small tear detected inside the pod in the cannula, which is the tubing that carries the insulin. And as a consequence of that, insulin that is supposed to be infused inside the body is actually leaking in the pod, which leads to under delivery of insulin for the patient. And in the worst-case scenario, prolonged under infusion can cause high blood glucose levels and in the case of patients with diabetes can lead to diabetic ketoacidosis and hospitalization. So that's the issue that can potentially cause harm for patients.

And the reason why we notified patients is that if they encounter this issue in multiple pods that is the -- where a serious harm can occur. So we wanted to let patients know the affected lot numbers. So there is a lookup tool on our website where they can come and enter in their lot numbers and then we tell them whether their lot is affected or not. And then we -- of course, we replace those pods for our patients. And then on top of that, we're making improvements to our manufacturing and our quality release of lots so that our patients can be assured of the safety and effectiveness of our product. And that's the most important thing is really the safety of our patients.

And is it safe to assume of the 18 adverse events that were called out, those were all hospitalizations for DKA or most of them?

Yes. So we would count an adverse event if patients had high blood glucose levels and needed to go to hospital. So whether they were in hospital for a couple of hours or a few hours or they were hospitalized for diabetic ketoacidosis and needed days of infusion, it all would count. So yes, there were cases of hospitalization and diabetic ketoacidosis and then those patients recovered.

Yes. And we know -- I mean, I've covered medical devices for 23 years. You've lived in the world of medical devices, most of your career, I believe. So medical devices do cause problems as much as they solve and can be life-saving devices, they can also cause issues, so not unusual. We've seen CGM recalls here in the last year or 2. We've seen pump issues in the past. So I guess -- and I know you're not a manufacturing person, but was it something contained to one line you could find that something was out of spec or something and can be corrected easily. This isn't something that investors, physicians, patients will have to worry about moving forward. Just generally, and again, I'm sure you're limited in what you could say, but...

Yes. What we did let our patients know is that this affected only a very small number of pods. We said 1.5% of pods that were produced in the last year. So this is a very small issue. It's -- people can be assured that the pods that are not recalled are very safe to use.

Okay. All right. And then I'm assuming -- I know when you and I spoke the last couple of days, you obviously couldn't say anything about this until the news broke last night. But I'm assuming as a company, you've probably been investigating this for at least a few days, if not longer. So that's potentially given you some interactions with physicians, I'm sorry, some of your customers. Just has there been any feedback from customers, a loss of confidence, a concern about prescribing Omnipod 5 in the future, anything like that?

I've really only spoken to doctors last night externally since this news came out. And I think people who have been in this space for a long time, physicians do understand that these devices are not perfect. As you mentioned, in the space, there have been several issues from the big companies. And it just goes to show that this space, it's really hard to produce products at scale of high quality for our patients, whether that's CGM or pumps. And I think what people really appreciate is the transparency of the issue. I think people are understanding, and I don't think that they would lose confidence in our product and would not stop prescribing.

Yes. Did that safety mechanism fail in this 1.5% of pods, I just...

No, no, no.

Okay. I guess one other question or not even a question, I guess, a point, it came to mind to me just as you were giving your answer, I think back to your Analyst Day and investors are going to think I'm throwing you a softball here. I'm just being too nice here. But I think back to your Analyst Day, you guys build up such goodwill with your pediatric patients and just the whole Insulet experience of caring for your patients that I got to think that reputation can help carry you through these kind of issues.

Yes. Well, I think -- exactly, but that doesn't even need to be said, right? Like we...

No, no, but my point being, patients love you, love your company. They know you're looking out for their best interest that when something goes wrong, it's not like, oh, it's these guys again. I mean I think you built up so much goodwill. My point is I think that helps you and protect you in a time like this.

Yes, for sure, for sure. But I think in these cases, companies have to be transparent and have communicate exactly what the risk is and how to protect patients from that. I think people -- it's a very serious condition, whether it's underdosing of insulin, overdose, it is a community where the delivery of insulin has such a narrow therapeutic window that, that precision of insulin delivery is so important. And that's something we take great pride in. And I think it's to the credit of the teams that when we detected this signal, we went and investigated clearly and we found the issue and we notified our patients as soon as we could.

Okay. Well, let's maybe move on to happier times or what we really came here to talk about or what I thought we came here to talk about initially. It all starts with the EVOLUTION 2 trial. That is the kind of latest and greatest from Insulet. You published those trial results just a couple of days ago in your symposium. And just to remind investors, that trial is really the second feasibility trial on the path towards fully closed loop in type 2 diabetes. So the EVOLUTION trial, 24 patients. Maybe why don't you just hit us with kind of your view of what the highlights were, and then I have a few questions on it.

Yes. So just on Wednesday at our symposium, we shared results from 24 patients, adults living with type 2 diabetes. And these were adults who were in New Zealand who've been using an investigational product of our latest Omnipod, fully closed loop for type 2 diabetes product. And results were excellent, 68% time in range and very low hypoglycemia. And this will be the basis of the algorithm that is going to be used in the EVOLVE pivotal study. That's our pivotal trial for our fully closed loop type 2 product that's going to start this year. And as we mentioned at Investor Day, that will be the product that is launched in 2028.

And what I'll share is that it was one study in a series of studies that we've done. We -- actually, 2 years ago in Florence, we shared results from EVOLUTION 1, which was fully closed loop in both type 1 and type 2 diabetes, small numbers, 12 type 1, 8 type 2, and we got pretty good results, and we've spent the last couple of years refining that algorithm and getting it to the best place it can be so that we could enter studies last year. And we -- what Dr. de Bock talked about on Wednesday was really testing several iterations of the fully closed loop so that we could push efficacy as much as possible. So you could see timing range increased, and we got 66 with the first version, 68 with the second and the third one, we were back down to 66. And the combination that we picked had the highest efficacy, highest timing range, but also very safe with low hypoglycemia. So that will be the basis going into all future studies.

Okay. Fair enough. And yes, you brought up the kind of open concept of the study where you were able to toggle that algorithm. I'm sure there's more scientific term than that, but you were able to make some changes to that algorithm and see in the field during the study how that impacted. Is that different than past studies? I don't remember seeing you kind of change things midstream. And I think is that -- I would assume that's a positive iteration of how comfortable you are with the algorithm or how comfortable you are making changes like that on a short-term basis?

Yes. I think we're just getting better and better with our capabilities. Our computer modeling and computer simulation has gotten better, so we can have better predictability in terms of what certain settings changes can affect outcomes. And then on a research and development side, we were also able to really set parameters that were broad enough where we could really test that full spectrum of how much insulin to deliver.

Sometimes when you deliver a lot of insulin, if you deliver a lot, but it's no longer effective, you can cause issues such as unnecessary weight gain for someone with type 2 and actually put them at risk for more hypoglycemia. So getting that recipe just right in terms of safety and efficacy is really what feasibility studies should be about. And they need to be in real-world situations and have a broad range of patients, which not all companies do. But we're really committed to testing things in very heterogeneous populations so that we can really understand how these products will work in the real world because that's where it matters for our patients.

Yes. Fair enough. Can I just ask one question and a couple of investors who are probably on this webcast pushed back a little bit on me when I published that data on Wednesday. The hypo readings, 0.04% at baseline. I think in the algo of the middle of the 3, the one that you've chosen to stick with, that percentage hypoglycemia went up to 0.14%, so up 0.1%. How is that in the context of like what you worry about or don't worry about? Is 0.14%, 0.1% increase clinically almost nonexistent? Is that...

Yes, it's clinically negligible. Yes, it's a tiny amount. So it's not...

Yes. I mean just when I look at some of the other trials out there, I see 1%, 1.3% in hypo and things like that. I was surprised I got pushback on, is that a risk? Is that a concern? But you would see that as a very -- let me ask you it this way, I phrased it to investors. To me, that's going to be seen as a good number by doctors, not as a bad number. Do you agree with that?

That's right. Yes, that's a low number.

Okay. Okay. Fair enough. You also mentioned type 1. Obviously, we know after the first EVOLUTION study, you decided to focus first on type 2. Maybe did get a signal on a little bit higher hypo in the type 1 population, so you wanted to refine some things. I think one of the nuggets you put in your Wednesday slide was that there are still some type 1 fully closed loop efforts continuing this year, maybe even some feasibility trials, things like that.

As you have that open concept in type 2, and we're able to iterate on the fly as you did and now that you've started type 1 fully closed loop again, it seems to me like the path -- you can run 2 paths at once here, the type 2 path and the type 1. And even in your Analyst Day, while you kind of laid out the '25 through '27 or '28...

'28.

Through '28, but there could be things beyond '28. That type 1 fully closed loop may not be dramatically beyond that '28 window that you kind of went up to in your Analyst Day. So I'm sure you won't confirm a type 1 fully closed loop time for us. But just help us understand what your efforts in type 1 are going to look like over the next few years.

Yes. I think when we think about fully closed loop, I'll just share that our vision of fully closed loop is different to what other companies are saying. And for fully closed loop for type 2, our product has no meal announcement, no boluses, no settings. And what that means is easier onboarding for clinicians and ease of use and simplicity for the patient. All they have to do is take the adhesive off, put the pod on, sensor on and then off they go. Omnipod takes care of the rest. And that is visionary. And like we had doctors come up saying, can you really do that, Trang?

So you're essentially raising the bar for what the definition of fully closed loop is.

Yes. Exactly. And we think that's possible in type 2 because of the safety profile and the risk of hypoglycemia is less and the risk of DKA, diabetic ketoacidosis is less in type 2. So we think it's a doable process. And that's why we're investing in a large clinical trial to get this product to market. And we really feel that it will unlock a huge market that is out there that's not accessing automated insulin delivery today.

So I would say in type 1, I think we're going to definitely continue advancing hybrid closed loop, and we've talked about the enhancements with Omnipod 5 today and also next-generation hybrid closed loop with Omnipod 6 and then continuing on the hybrid closed loop side in terms of making things more and more bolus optional.

How I see it is that every time we iterate for our hybrid closed loop side, we're going to be doing more of the automated insulin delivery and then there is going to release that burden for the patients. I don't think any company is going to be able to go from like where we are today all the way to fully closed loop for type 1 for all patients. But I do see that there will be a spectrum. There's going to be patients who want to engage and want bolus in their system and products like Omnipod 6 is going to allow them to do it. And then there's going to be patients who want to set it and forget it and not engage. And they might have a different set of outcomes with that product.

And so getting that recipe just right for our type 1s is something that we're working on, and we are conducting studies this year on that. But as you know, the risk of hypoglycemia in our type 1s is greater. And what we care about is our children and our little ones. And I'm always thinking about, okay, if we give that little [ cramming ] bolus when we detect a meal, how is that going to work in my little 2-year-old. That's what I'm thinking about. So that safety of that algorithm is really important. So we've got to make sure that it's safe enough before we go into a pivotal study.

Yes. I think one thing I've noticed at this meeting, especially as there's been a big focus from some of your competitors and you on fully closed loop. One thing I've noticed is people are starting to choose their words very carefully. They're calling some things fully closed loop. And I think some are calling them fully closed loop that would not meet your definition. But I also think some are starting to use terms like meal announcement optional or optional meal announcements, things like that.

Like bolus optional.

Fat bolus optional, exactly. I'm starting to hear those terms. But I think that can still be a fantastic improvement for a lot of these type 1s, right? I mean they don't have bolus if they don't want to. They don't have to put in 12 different things at the start of the pump. You don't have to tweak the settings as frequently. I mean there's still a lot of simplification that can happen between type 1 AID use today and fully closed loop never have to touch it. There's still a lot of benefit that can come.

Absolutely. Yes, that's right. And we're committed to our patients all the way along that path.

Yes. All right. Fair enough. Anything else on EVOLUTION, on fully closed loop that we should talk to? I do want to move over to some of the 2026 Omnipod improvements that you're launching and maybe even Omnipod 6.

Yes. I would just say I'm just really proud of the team and really proud of the fact that it was a very heterogeneous population, total insulin requirements going all the way up to 200 units a day. And I think that -- our approach to clinical studies is different from the other companies, and it's a really robust data set that I'm proud of.

All right. One thing I did think of -- I'm sorry, I said last question, but as you get type 2 approved, let's say, you get the type 2 fully closed loop approved in 2028 or launched in 2028, that would be a separate prescription, right? The physician would have to write a prescription for that pump as opposed to a standard O5.

Yes.

In that case, and I know you would never advocate for off-label use. But if a physician had a patient, let's say, was 26 years old, didn't want a bolus or maybe was very in tune with his or her diabetes and could take some breaks at times. The physician could write that prescription for that type 1 patient, I would assume, and you could have like a fully closed-loop option for type 1 in that year. Again, not that you would advocate that, but it could happen that way.

It's off-label, and we need to better understand the safety profile of the product in type 1s, and we'll need to include that in labeling. So more to come there. But right now, it's intended to only be for type 2 diabetes.

Okay. All right. Let's move on to some of the launches that are happening this year. You've got some algorithm improvements. You've got the 100-milligram per deciliter set point. Is that out in the U.S.? Now I can't remember.

It's a limited market release.

Limited market release now, yes. Is that going to launch anywhere outside the U.S. anytime soon, number one? But number two, just the 100-milligram setting, what does that bring for patients?

So that will be U.S. only this year. And what it brings for patients is another option for them to have tighter glucose control. So I think the way we explained it on Wednesday was it's not just another option because if you -- you can imagine that when you design an algorithm, you could set certain constraints so maybe there's not much difference in insulin delivery. But what we actually showed people was a simulation where we conducted if someone had chosen 120 versus 110 versus 100. And actually, today, looking at all of our users across the world, only about half of our users use our lowest target of 110. So there's a lot of people using 120 and higher because they're quite rightly afraid of hypoglycemia. So they might want to set their targets a little bit higher.

And so what we showed is if you move from 120 to 100, just a simple toggle that you can actually gain up to nearly 5% time in range improvement. And actually, the algorithm can deliver up to 12% more automated insulin, which is really quite remarkable from just one toggle change where the patient doesn't have to do anything. I think that's going to be a really welcome change for patients. And then -- and also competitively, I think it's also going to be important to make it a much more competitive system in the marketplace.

And then we also announced another change, which is the maximum insulin delivery alert. So one of the -- so we care a lot about safety and the alert is exactly, as I described, like when we've delivered what we think is a lot of insulin for this patient based on their history, we tell the patient, we're like, hey, it's -- we've been delivering a lot of insulin in the last few hours. You might want to check your blood glucose level because maybe the pod is not on the body or maybe your CGM is overreading or this is an unusual situation for you.

But what we found in the real world is that in the majority -- in the vast majority of cases, it was because people had missed boluses, multiple boluses where they should have bolus. And so in that scenario, people tend to reach what we call limited mode. And in the -- with the change, what it means is that people who tend to not bolus frequently, we're going to keep them in automated mode for longer and they're going to have fewer interruptions. And I think that will be a welcome change for both patients and clinicians. It's one of the objections that we often hear from clinicians about adolescents and teens.

Yes. If they don't bolus, then they kind of get kicked out of automated mode?

That's right, yes. And then they forget to go back.

Okay. Let's say they forget 1 or 2 meals in a row and they get kicked out. What do they have to do to get back into kind of closed...

It's actually just a simple toggle of going back into automated mode, but life gets busy and people forget. But we can tell all of this from our data actually. So that is what gives us a lot of confidence.

And wasn't there in the algo improvements this year? I know there's going to be some changes in Omnipod 6 as well. But for this year, some increased algorithm responsiveness, too? Or is that the high?

It is more responsive to a missed meal bolus. So when you set a 100 target, it means that the algorithm is going to kick in and give you more insulin on that upswing, so as...

We saw the downswing kind of in that...

That's right. So it just flattens everything a little bit. So there is that improvement, but it really is just those 2 changes. And then with Omnipod 6, there'll be even more enhanced algorithm changes for a missed meal boluses.

Would you think as this algorithm gets out in the user base and then as we'll go talk in a few minutes about Omnipod 6 next year?

Yes.

Do we start to see in your real-world data a little tick higher in average time in range and then next year, another tick higher. Does it manifest as that?

Yes. Yes. And we actually have seen that already through just our messaging of optimized settings. So in the last year, we've really focused on helping clinicians use our product effectively to gain even more time in range for their patients. So we looked at, okay, what are the settings that are correlated with the best outcomes. And we've armed our salespeople with those numbers and tools and formulas to really go help our clinicians, get the best outcomes from Omnipod 5. And what we've seen is actually an increase in usage of our lowest target. And it's kind of new still, but in certain markets where we've been more aggressive with the optimized settings, messaging, we're getting better outcomes.

Okay. All right. Good. On to Omnipod 6?

Yes.

Yes. All right. So that's 2027. You do have the STRIVE trial to get to Omnipod 6. I think has it wrapped up or it's close to wrapping up?

It's wrapped up.

It's wrapped up. So we will see that data for the first time at ADA in New Orleans, I think, is that where...

That's right, ADA, yes.

Yes, I'm not happy with that. Just down in New Orleans, it's hot down there. But we are going to see that data for the first time. You were going to submit the 510(k) this year. That is still on track and launch in -- somewhere in early to mid-2027. Is that my understanding on Omnipod 6?

I can't remember when we said in 2027.

I kind of slipped the early in there. I was hoping you'd fall for it.

You know I don't fall for that.

I know. I know. Okay. So we'll launch it sometime in 2027. And better connectivity, the improved algo that has some self-learning, some patient-specific kind of stuff. Let's maybe talk about both the better connectivity and that improved algo.

Yes. Yes. So we're always looking to get better at everything at algorithm performance, on-body connectivity. It will also have over-the-air updates as well for pod, which is better for -- in terms of inventory control and getting innovation faster out for patients. So we're super excited. STRIVE was a really unique study. It is a crossover design between Omnipod 5 and Omnipod 6. And we -- when we're in discussions with FDA, it's also about what's important for us in terms of getting innovation out fast to our patients. So what is of utmost importance.

And when we think about algorithms that are delivering more insulin, safety is really critical. And so the data, just to be clear, is that we actually enriched the population for pediatrics and children down to the age of 2 because really that is a risky population, and we needed to make sure that the algorithm changes were suitable for that age group. So more data to come, but just wanted to share that it's a unique study design crossover with Omnipod 5.

The algorithm improvements that will come with Omnipod 6 relative to this slightly more aggressive. I don't know if those are the words you'd use, mealtime changes that are coming this year. Would you qualify the algorithm changes on Omnipod 6 even bigger?

They're more significant, yes, than what's coming this year, yes.

More significant, yes, so we should see -- and again, that would manifest the way we look at things as theoretically an increased time in range once we get that Omnipod 6 algorithm out there.

That's what it's designed to do. That's right. And I would say that Omnipod 6 is our next-generation platform and for hybrid closed loop. So really, it's not just algorithm changes, but all those other things to really enhance that user experience. We're also improving onboarding as well. And we also announced that we'll be bringing phone control to international markets with Omnipod 6, so which is one of the most requested features in our international markets.

And just on the better connectivity, I mean, I think it's still -- we still hear at times you have to have the CGM and the pump on the same side of the body and things like that. Those are the kind of issues that should be improved with Omnipod 6.

That's right.

Okay. And maybe just on the over-the-air kind of updates that can come with Omnipod 6. I understand why that is good for you as a company. You can hold less inventory. You don't have to build up inventory of a specific pod that does one thing and then have to build inventory of a next-gen pod. But for patients, the benefit there, I'd assume, is they don't have to work through inventory that sits in their house or sitting wherever.

Yes. Absolutely, that is the benefit. So we had a patient in a trial contact me and she said, "Trang, when are these pods coming? Should I start working through my stockpile of pods in the closet?" So I think people who live with diabetes need to think about all the things we don't need. We've to think about, Jeff, is like do we have enough supplies and what happens if something catastrophic happens. And so they -- so getting through -- they might have 6 months' supply at home. And so being able to do an over-the-air update means delivering faster innovation to our patients, and that's a wonderful thing.

Yes. All right. All right. Beyond '27 then we've got '28, we have the FCL to look forward to. I think Eric at the Analyst Day threw out some kind of beyond '28 targets or theoretically some things you could look at increased insulin capacity, form factor improvements, things like that. How much -- we now know Sequel has a 300-unit pump out there, not really a patch, obviously, but it's out there. I think of -- who is it, not Medtrum, who is it here that has a 300-unit pump? Is it a patch pump? Is it Medtrum? Yes, I know they're probably not on your radar screen. There's a few -- do you need to get to 300 units in a patch device, I guess, would be my question, especially as type 2 penetration starts to grow where obviously, insulin utilization is higher, insulin capacity needs to be higher for some.

I don't think it's necessary. When we look at our SECURE-T2D study, when patients came in, they were on very high doses of insulin, and we saw a 29% reduction in their insulin needs just because when you're delivering it through a patch pump like pod, they're getting much more physiological insulin delivery. So because of that, it hasn't been a constraint for us in delivering great automated insulin delivery for our type 2 users.

Okay. And what would it take to shrink the size of the Omnipod? Is that just a general change in electronics? And as things get smaller and faster, you can maybe shrink that down? Is that something when we think about form factor changes that Eric mentioned?

Yes, I think people are always asking, we ask our patients what they want. They want smaller pods. They want things to last for a long time. So that's not a mystery, and that's what people want. I do think we -- it's something we've got teams of engineers working on it. I think it is hard to do. And I think what's really unique about our product today that nobody else has is our auto cannula insertion where the patient doesn't have to manage any needles. They don't have to press any buttons. They don't have to have the right pressure. That cannula just fires in automatically, needle retracts, cannula stays in the body, patient doesn't need to do anything.

And the fact that, that sits inside the pod with our reservoir and works perfectly that -- and it lasts for 3 days and then patients have to change it, all of that actually really helps insulin infusion to be effective and efficient actually. Because what we've seen with data for infusion sets you -- that last a long time is actually you get higher glucose values when you hit day 5, day 6, and you actually need more insulin on those outer days as well. So I actually think there's a lot of really great clinical benefits of our 3-day podware design.

Okay. You say that, and then my next question though is going to be, I did catch or we did catch, I should give credit to Dan and Maggie on my team, they caught a report in a -- I believe it was a New Zealand article somewhere in the last week or 2 that you are maybe working on an extended wear Omnipod version that could go out to 5 or 6 days. I don't think it was 7 or 10 days. I think it was 5 or 6. I would assume that's for your lower-insulin consumers, but that would add to convenience. Is there -- what are the challenges in maybe going from 3 days to 4 or 5 or 6 days with an Omnipod?

Yes. I think a great job on picking up that study. Yes, we want to make sure that when we do extend it, that it doesn't raise additional issues. So we're looking at how does the skin tolerate the extended wear, how does the product work? These are all part of our R&D activities that we do all the time. And Eric did talk about it at Investor Day that was in that beyond '29 and beyond period. So yes, we have an active R&D group.

Any issues at all with like infusion site patency or anything? Is that one of the issues after you get beyond 3 days? Or is it more of the adhesive and keeping a pod on for more than 3 days?

Yes. Scientifically speaking, there could be some patency issues in terms of can there be some scar tissue start developing and so starting to block the infusion set. When I was at Stanford and doing extended wear infusion set studies, we didn't see that issue up until like day 5, day 6. And that's when you started seeing glucose levels rise and insulin needs increasing. So I wouldn't expect that for day 4, day 5. But I would just set expectations that part of what we do in clinical studies is really like pushing the boundaries of things. It doesn't mean we're going to deliver a product that's going to go to the duration of the study.

All right. Fair enough. And you also mentioned in your prior answer, the auto cannula insertion. I think one of the biggest, I wouldn't say differentiating factors, but probably one of the biggest differentiating factors of your system. One of the stronger IP areas, I believe you have or at least I feel like you've probably enforced with some companies over the years. But that does open the door -- not open the door, but it opens the door to my question about competition. We've got a lot of 2-piece semi-disposable patches coming over the next couple of years. How do you view kind of the clinical utility of having to put together a 2-piece patch even if it has a similar footprint of an Omnipod, that versus a single piece fully disposable on and off kind of Omnipod 5?

Yes. I think ease of use and simplicity is an advantage of Omnipod, and I think it is underappreciated. We showed this really a durable video of a 7-year-old doing a pod change on Wednesday. And the fact that a 7-year-old can do it on their own is -- just speaks to the simplicity of the product. And that's really important when you're trying to grow the market and you're trying to penetrate in type 2 diabetes and get this technology out to the community where there -- we're not going to be able to spend hours and hours of one-on-one training with people.

So I think that's where the field is headed. It's about breaking down barriers to getting AID out to the community, out to people who need it. And the complexity of older pump technology, older tubed pump technology, it means that there is a heavy burden on clinics and trainers and on patients to be trained on all these products. So I think our simplicity means that it's easier to train. People can do virtual training. They can self-train, which is really neat. And with our fully closed-loop type 2 product, it's going to be a user-led training rather than primarily physician or CDE-led training. So that's another difference in our approach as well.

Yes. Fair enough. Yes. No, I guess the last question, I think we're getting close on time. But as you kind of ended there, what do you see and how far into the future are we, especially on type 2 or how far into the future do we have to look where you're at fully closed loop, the physician doesn't have to put any inputs into the pump to start. The physician doesn't even need to know what a carb ratio is or anything like that. We've got easy to titrate starting boluses, things like that. And now you've got a single piece fully disposable.

You don't have to teach a patient to put 2 pieces together, make sure there's no insulin leaking, how to charge one part or another. I mean there's going to be some with those competitive products, I think, that you'd still have to train there. You could have a single piece fully disposable, fully closed loop needs absolutely 0 inputs. I mean, can a primary care physician 3 years from now, 4 years from now start to just write a prescription and know nothing about pumps almost and basically not even have to see the patient, put it on, not even make sure the patient can deal with it, it's just write the prescription and go?

Because it will be so safe and so effective that they'll be able to do that. Yes, that is the vision.

Are we -- that's the vision. Are we thinking that's the 10-year vision? Or could you see as we get to evolve -- and yes.

That's the 2028 vision.

Yes, you think you could get there that soon?

Yes.

And again, I'm throwing you a little softball, but it almost needs to be that single piece fully disposable, almost like a consumer device that you put it on and do nothing other than go to your phone, toggle a couple of things and it works.

I mean this is why we're the market leader and we're growing the market in type 2. It's because we can do it today to some extent, but it's going to be even easier in the future.

Yes. Fair enough. Good. What else should we talk about? Anything? We've got 3 minutes left, I think.

We're going to talk about fully closed loop like others?

Others, yes. I mean, yes, okay, let's -- I'll give you a chance to riff on what you think of -- we saw some Vivera data this week.

Yes. What do you think of it?

Well, look, the time in range data looks really, really good. I know you have your views on Freckmann's paper and on whether that time in range is real or not real or not you. I know some in the industry outside of MiniMed have those concerns. I do think -- and I'd love your view on this. I do think when they ran the several thousand, I think it was patient crossover from Simplera to Instinct as a sensor, and they showed they had the same time in range, it makes me question a little bit Freckmann's view of the world that the MiniMed sensor overestimates time in range. Do you still feel that way after seeing that crossover data from MiniMed?

Yes, I think we need to digest it all. But I think what Dr. Viral Shah did say yesterday was that the instinct sensor did allow them to stay in automated mode for longer and therefore, enable the algorithm to work, which is similar to some of the changes we're making with Omnipod 5 there. So I think Freckmann's work is still really important because that does call into question some of the claims that our competitors are making in terms of performance and aggressiveness of the algorithm and really how much of it is algorithm versus sensor.

And actually, there was a paper that was presented here by Dr. Pavlou coming out of Sufyan Hussain's Group in London, where they showed A1c outcomes for patients who were on Omnipod 5 versus Medtronic. Actually, the A1c outcomes were about the same in the real world, even though there was a big difference in the time in range outcome. So I think it really still shows that Omnipod 5 in the real world works quite well.

In terms of other company fully closed loops, I would say these were pretty small studies that were shared this week. And the results are exciting overall, just as exciting as our fully closed loop. And it's a space where people are going to be following the innovation closely, and we're going to be delivering better outcomes for patients, and that's super exciting.

Yes. No, I think and this is maybe my concluding thoughts, and I wrote this in a note to investors yesterday or the day before. This meeting to me feels like -- and you may not remember this or have it in the same kind of time line as I do, but Vienna 2018 because Vienna 2018, you guys were just talking about Horizon, Tandem was just talking about PLGS and maybe getting to that in control was still at UVA, but being prior to that becoming Control-IQ as their algorithm. I think Medtronic had just launched 780 at that point.

But it feels like that's 2018. And I think by 2021, 2022, 3 or 4 years later, type 1 penetration had really kicked off because AIDs were real, the hybrid closed-loop system. And I feel like we're kind of right there in type 2, where you can see where the ball is going now. It's much clearer today than a year or 2 ago of what's going to happen in type 2 and how that market now does really have a chance to really penetrate, I think, on the pump side because we're seeing all these iterative changes and you can just kind of now see where the data is going and designs and everything.

Yes. For sure. It's super exciting. I would say there's still a ton of opportunity in type 1. And if you look at how successful our CGM partners have been in growing that market, a ton of opportunity in both type 1 and type 2. And I think as the market leader, we need to continue innovation and bring even better outcomes, but also make this technology accessible to many more patients, but that's super exciting.

I think my point was type 1 now, we already know, it's going from 40 to something a heck of a lot higher than 40. There's still some questions on type 2, but it feels like to me, looking at that data, you can see that type 2 is a real opportunity now.

For sure, for sure. Yes, that's right.

Well, I think our time is up. So Dr. Ly, thank you for the time. It's always wonderful. And hopefully, we'll get to do this again.

Hopefully.

All right. Thanks all.

Thanks everyone.

Have a good rest of your Friday and a good weekend. Take care.

Good morning, and welcome to the Insulet Corporation's Fourth Quarter and Full Year 2025 Earnings Call. As a reminder, this conference call is being recorded. I would now like to turn the conference over to your host, Clare Trachtman, Vice President, Investor Relations.

Good morning, and welcome to our fourth quarter and full year 2025 earnings call. Joining me today are Ashley McEvoy, President and Chief Executive Officer; Flavia Pease, Chief Financial Officer; and Eric Benjamin, Chief Operating Officer.

On the call this morning, we will be discussing Insulet's fourth quarter and full year results along with our financial outlook for the first 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 for the first quarter and full year 2026, the anticipated impact of our strategic actions, the potential impact of various regulatory and operational matters and the macroeconomic environment on the 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 EBITDA, 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, which are both 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, Eric and myself will be available to address any questions.

Now I'd like to turn the call over to Ashley. Ashley?

Thank you, and good morning, everyone. I'm pleased to share that we closed 2025 with another strong quarter recording our tenth consecutive year of 20% or greater constant currency revenue growth. This consistent track record reflects the strength of our durable recurring revenue, profitable business model and the breadth and depth of our competitive moats. Our strong clinical evidence and real-world outcomes continue to earn prescriber and patient confidence and the consistency of our execution along with the deep commitment of the Insulet team to finding a better way for people living with diabetes has enabled us to deliver enhanced value to all of our stakeholders.

I want to start by thanking our Insulet employees around the world. 2025 was a year of significant progress at Insulet and the entire organization delivered on our goals without missing a beat. Your dedication to our mission fills me with confidence today and well into our future.

Our results in the fourth quarter are a testament to the reliability, consistency and broad appeal of Omnipod, coupled with the strength of our strategy and execution. Total company revenues were $784 million, advancing 29% constant currency. U.S. revenues of $568 million increased 28% and international revenues of $214 million grew 42% constant currency. This strong finish to the year enabled us to surpass $2.7 billion in revenue for the full year, more than doubling our revenue base over the last 3 years and delivering approximately 30% year-over-year constant currency growth.

Our annual performance of $1.9 billion or 27% growth in the U.S. and $754 million or 39% constant currency growth in international markets highlights the progress and the impact we're making as we continue to unlock more of our $30 billion-plus total addressable market. We achieved record new customer starts across both the U.S. and international in the fourth quarter and for the full year, with the vast majority coming from people transitioning from multiple daily injections. This reflects growing provider confidence which, as I just mentioned, is driven by strong clinical evidence and consistent real-world outcomes.

Importantly, it also reinforces that Insulet is not only the market leader in AID, but also the clear driver of overall market expansion, and we intend to maintain this leadership position.

Turning to our key markets and starting with our largest U.S. type 1 where we continue to focus on extending our leadership. The U.S. type 1 market is a more than $9 billion opportunity with AID penetration at just 40%, which is well behind CGM penetration of 70%. In 2025, we delivered year-over-year growth in type 1 new customer starts in both the fourth quarter and the full year, driven by strong patient and prescriber preference for Omnipod.

In fact, both type 1 and type 2 users in the U.S. named Omnipod 5 their favorite pump in 2025. Omnipod's strong clinical evidence, broad access, affordability and ease of use are enabling us to expand well beyond traditional endocrinology channels. Our U.S. prescriber rate now includes more than 30,000 healthcare professionals, up approximately 28% year-over-year.

The strength and reach of our commercial teams position this segment to remain a meaningful and consistent contributor to our global customer growth. Momentum in the U.S. type 2 continues to build as well. In the fourth quarter, type 2 new customer starts grew significantly, both sequentially and year-over-year, rapidly expanding our type 2 user base. This acceleration reflects strong clinical and real-world outcomes, continued investment in demand generation and the recent ADA guideline update recommending AID for people with type 2 who require insulin.

Our type 2 prescriber base grew 62% in 2025 to now more than 6,500 clinicians. Most people with type 2 diabetes are being managed in primary care settings. Therefore, expanding beyond endocrinology represents a meaningful and sustainable growth opportunity. In a type 2 market of more than $12 billion where AID penetration remains below 5%, which is far behind roughly 55% of CGM adoption, stronger education, improved outcomes and increasing access are already accelerating adoption.

Importantly, we are unlocking this opportunity in a strategic and capital-efficient way. Our U.S. sales force, which is the largest in the industry, reaches high-prescribing offices that treat both type 1 and type 2 diabetes, giving us confidence in our ability to unlock the next 5% to 10% of type 2 penetration efficiently. Our growing type 2 customer base continues to surface powerful stories about the impact Omnipod 5 can have, including the experience of Verquise.

He knew something was wrong when he began experiencing pain in its feet and arms and an urgent care visit led them to an unexpected diagnosis of type 2 diabetes. After reviewing insulin delivery options with his doctor, Verquise chose Omnipod because he shared, "I really love the mission and the promise that was exuberated from Omnipod to add normalcy to my diabetes and to show that my life can still be balanced." And that this brand, this family will always be there and will forever evolve as medical technology does.

Stories like Verquise, combined with the growing excitement among both healthcare professionals and people with type 2 diabetes, continue to strengthen our conviction in a significant type 2 market opportunity.

Looking ahead, we expect to expand penetration even further with the launch of our fully closed-loop offering planned in 2028, which will enable us to reach and serve the broader primary care population. Additionally, pharmacy access remains a critical differentiator in the U.S., making it easier for people with diabetes to start and stay on therapy. Over the past decade, we've built strong relationships with payers and PBMs across the U.S., backed by clinical and economic evidence that continues to resonate. We have the broadest access in the market available in approximately 48,000 U.S. pharmacies and covered for more than 90% of insured lives or about 300 million of the 370 million insured people.

Our offering is affordable with most users paying about $1 a day through our pay-as-you-go model and preferred formulary position. And we continue to invest in programs designed to further reduce the remaining barriers to access, including efforts to simplify the prior authorization process for providers, particularly among primary care prescribers who treat large numbers of people with type 2 diabetes.

Omnipod also continued to drive standout international performance. Fueled by strong year-over-year and sequential growth in new customer starts, along with continued positive price/mix realization driven by conversion from Omnipod DASH to Omnipod 5. We continue to see solid performance across our established European markets, supported by new sensor integrations such as our launch with DexCom G7 in Germany. Our Omnipod 5 launches in Canada and Australia also delivered robust growth. In Canada, we secured reimbursement, recognizing Omnipod 5's value in half of all provinces, helping drive more than 60% growth in new customer starts.

And in Australia, new customer starts more than tripled following the launch of Omnipod 5. Our global expansion will continue in 2026 with Omnipod 5 and Omnipod Discover recently launching in the Middle East. In addition, Spain, our newest market, is expected to launch Omnipod 5 later this year.

Volume remains the primary driver of our international growth and the ongoing transition from Omnipod DASH to Omnipod 5 will continue to support positive price/mix realization. Pricing contributed high single-digit growth in both the fourth quarter and the full year 2025. Our international growth runway remains substantial. The type 1 market alone exceeds $10 billion. Yet only 1 in 4 people with diabetes outside the U.S. is using AID therapy, even if CGM penetration reaches around 65%.

As adoption of AID accelerates worldwide, our proven commercial playbook, expanding product portfolio and growing geographic footprint position us extremely well to continue capturing share, delivering value and driving sustained international growth. To bring this all together, we have a large underpenetrated TAM across U.S. type 1, U.S. type 2 and international markets with significant runway to unlock additional growth in one of the fastest-growing categories in med tech. And our proven track record reinforced by our performance this year underscores our ability to continue to deliver top-tier growth and value creation for shareholders.

Notably, this top-tier growth has allowed us to deliver meaningful margin expansion, even as we continue to invest thoughtfully to extend our competitive advantages in innovation, clinical outcomes, access, brand and manufacturing. For the year, we achieved record growth and operating margins, delivering 180 basis points of gross margin expansion and 270 basis points of operating margin expansion. We remain committed to investing with discipline, ensuring we sustain the strong growth we are delivering today while also driving continued improvements in profitability.

The investments funded by our durable recurring revenue profitable business model and strong financial position, fueled significant progress across every aspect of our strategy in 2025. We expanded our global scale this year with launches in 9 new countries, launched our G7 CGM integration, increased full phone control adoption to more than 60% of U.S. users and continued building the foundation for our next-generation systems.

We also advanced our clinical programs in meaningful ways. We published results from SECURE-T2D and RADIANT, completed the STRIVE study for Omnipod 6 and moved into the next phase of our EVOLUTION study supporting our fully closed loop system for adults with type 2 diabetes. Collectively, these programs further strengthen the scientific foundation behind Omnipod, advancing our algorithms for optimal performance, fortifying the case for broader AID adoption and enabling continued global expansion.

We invested in market development in new, more visible and impactful ways. Our expanded sales force is now more than 25% larger than our nearest competitor. Our DTC campaigns are generating record lead volumes and activating new prescribers. And our enhanced insights and analytics capability are helping us optimize our cost to acquire and cost to serve, driving continued expansion in customer lifetime value. These advances and efforts to solidify Omnipod's status as the most requested, most preferred and most prescribed AID system.

Among new customers, 70% of those who walk into a prescriber's office request a brand ask for Omnipod 5 and among existing users, Omnipod 5 maintains the highest Net Promoter Score in the category.

Now I want to take a few minutes to walk through how we will continue advancing the long-term strategy we outlined at our 2025 Investor Day to extend our leadership and strengthen patient and physician choice for Omnipod. Innovation remains central to our strategic approach. And in 2026, we will deliver a steady cadence of highly requested enhancements to reinforce our leadership in automated insulin delivery. This includes algorithm updates that enable a 100-step point target for tighter glycemic control, increased time in automated mode and improved responsiveness to enhance both the user experience and clinical outcomes.

We will also expand our CGM integrations to include FreeStyle Libre 3, making Omnipod 5 compatible with every major sensor, and we will roll out Omnipod Discover globally.

Omnipod Discover is a new data platform that delivers clear, streamlined insights to support efficient healthcare professional review of Omnipod 5 data and enable more confident prescribing. Discover provides users with actionable guidance and reassurance, strengthening engagement and adherence. It also simplifies onboarding, reducing efforts for new users and accelerating the start-up experience. Collectively, these enhancements reduce day-to-day effort with fewer device interactions, broader CGM choice and more actionable insights that help patients and clinicians with confidence.

In 2026, we will continue to purposely increase R&D investment to advance our next-generation platforms, including Omnipod 6 as well as our fully closed-loop system for type 2 diabetes and future innovations. This also includes continued progress across our clinical programs with ongoing work in STRIVE and EVOLUTION. Let me take a moment to share more on our next-generation platform, starting with Omnipod 6.

This system is designed to address the critical needs of users by meaningfully reducing day-to-day burden and increasing flexibility through improved connectivity, expanded flexibility in on-body placement, real-time software updates and more personalized automation. It will feature a smarter algorithm to further personalize insulin delivery with pivotal data to be presented at ADA in June. Importantly, we are designing a single updatable pod platform that will be compatible across all CGM systems. These capabilities not only improve outcomes and the wear experience but also accelerate our innovation cycle as we prepare for launch in 2027.

Turning next to our fully closed-loop system for people with type 2 diabetes, which is designed to make AID accessible to virtually everyone. As the market leader in AID, it's important that we define what fully closed loop truly means for patients and providers. It is a system that delivers therapy effortlessly, adapting automatically without any user intervention. No dosing, no meal time actions and no required adjustments while the pod is worn. For us, fully closed loop also means redefining the provider experience, requiring no clinician defined settings to start and simple enough for a patient to initiate on their own.

Reflecting this definition, we believe our fully closed loop system will help address a significant unmet need for the 5.5 million people with type 2 diabetes who are on insulin, only about 25% of whom achieved recommended glucose targets today. We expect to initiate our pivotal EVOLUTION study this year, supporting a regulatory filing in 2027 and a commercial launch in 2028.

Finally, operational excellence remains a core focus as we work to expand margins in 2026, while continuing to fund our R&D and commercial investments. In 2025, we delivered significant margin expansion driven by scale and ongoing manufacturing productivity with our Acton and Malaysia facilities ramping ahead of plan. In 2026, we expect additional leverage as we invest in more capacity and further automation. And with the help of AI, we are increasingly tapping into our unique cloud-based data ecosystem to enhance customer service efficiency and satisfaction, reducing our cost to serve while strengthening retention.

Taken together, these priorities position us extremely well to execute on our long-term strategy and continued strengthening and driving choice for Omnipod among patients and providers worldwide. All of these investments, strategies and consistent execution come together in the financial growth algorithm we introduced at our 2025 Investor Day. Our 2026 guidance aligns fully with this growth outlook, and Flavia will walk through the details in a moment.

This outlook is supported by our continued investment in innovation, science, market development, demand generation and manufacturing balanced with the discipline that has defined our execution over the past several years. We remain committed to delivering market-leading financial performance while investing in the next wave of transformative innovation. We entered 2026 with strong momentum and clear priorities that position us well and give us confidence in achieving our financial goals.

To close, 2025 was a year of tremendous growth for Insulet, financial, strategic and organizational. We expect to build upon this in 2026 as we lighten the burden of living with diabetes for hundreds of thousands of people and in doing so, drive penetration, increase our scale and create value for our shareholders. We operate from a position of strength with durable competitive advantages, a large and underpenetrated market and a purpose-driven, highly motivated team committed to finding a better way.

We look forward to extending our leadership in the year ahead and beyond. Thank you for your continued support and interest in Insulet. I'll now turn the call over to Flavia to walk through the financials and guidance in more detail.

Thank you, Ashley, and good morning, everyone.

The Insulet team had another strong year in 2025 and closed with an impressive fourth quarter, delivering over $780 million in total revenue, an increase of 31.2% at reported rates and 29% at constant currency rates. During the quarter, total Omnipod grew 31.3% on a constant currency basis. We generated total revenue of over $2.7 billion in 2025, an increase of 30.7% at reported rates and 29.5% at constant currency rates.

For the year, total Omnipod grew 30.3% on a constant currency basis, showcasing sustained global demand for Omnipod 5. Across both fourth quarter and full year, we achieved record new customer starts in the U.S., international markets and company-wide, with growth accelerating on both a year-over-year and sequential basis.

In the U.S., during the fourth quarter, over 85% of new customer starts came from MDI and type 2 represented over 40% of all starts, underscoring the significant expansion of this customer segment. Our estimated global utilization and annualized retention rate remained roughly stable for the fourth quarter and the full year.

Now turning to our performance in greater detail. U.S. Omnipod revenue grew 28% in the fourth quarter and 27.2% for the year, above the high end of our guidance range, driven by continued demand for Omnipod 5, across type 1 and type 2 customers. As we commented last quarter, U.S. revenue growth during 2025, was impacted by rebate timing and prior year inventory stocking dynamics. Normalizing for these impacts, U.S. growth in the fourth quarter was approximately 30 basis points higher representing an acceleration from normalized third quarter growth levels.

Our international Omnipod business grew 50.7% on a reported basis and 41.7% on a constant currency basis for the fourth quarter. For the full year, International Omnipod revenue grew 44.1% on a reported basis and 39.3% on a constant currency basis. Volume was the primary driver of international Omnipod growth, while positive price/mix realization continue to contribute as customers shift from Omnipod DASH to Omnipod 5.

As in prior quarters, we witnessed strong growth in the U.K., Germany and France, in addition to the other countries where we have launched Omnipod 5. In 2025, our 9 expansion markets collectively delivered growth in line with the U.K. and Germany combined, reflecting the broad market appeal of Omnipod 5 and benefits to patients globally.

Continuing down the P&L, our fourth quarter gross margin was 72.5%, reflecting a 40 basis point expansion year-over-year. Our full year 2025 gross margin of 71.6% reflected a 180 basis point expansion year-over-year. This improvement was fueled by robust top line growth, continued manufacturing productivity gains at our Acton and Malaysia facilities, supported by positive pricing and increased volumes. As mentioned last quarter, Malaysia became margin accretive just 1 year after coming online.

Turning to OpEx. We continue to make purposeful investments to both maintain and extend our leadership. We are fortunate to be in a position where we can meaningfully fund our innovation pipeline and ensure we are first to deliver truly transformational technology to the market. In line with this commitment, we increased R&D spending by 50% in the fourth quarter and 37% for the full year, as we advanced our innovation road map and clinical development programs, including our STRIVE and EVOLUTION studies.

At the same time, we remain disciplined and targeted in our SG&A investments. We continue to prioritize market development initiatives to unlock AID penetration, and demand generation efforts, including expanding our commercial and customer experience teams to drive share and increase retention of our leading AID technology across both type 1 and type 2 diabetes. For the year, we successfully optimized both our cost to acquire and our cost to serve. Two key metrics we remain focused on improving as we enhance customer lifetime value.

Fourth quarter adjusted operating margin of 18.7% reflected robust revenue growth, strong gross margins and continued investment to advance innovation and key commercial strategies. Our full year adjusted operating margin was 17.6%, ahead of our most recent guidance and representing 270 basis points of expansion versus the prior year. As Ashley mentioned, we are well positioned to continue investing robustly for future growth while delivering meaningful margin expansion for years to come.

Fourth quarter net interest expense was $9.2 million, an increase of $11 million relative to prior year, primarily driven by the debt refinancing. Full year net interest expense was $24.7 million, an increase of $22 million compared to the prior year. again, primarily driven by impact of our senior unsecured notes issued in March.

Our fourth quarter non-GAAP adjusted tax rate was 22%, and our full year non-GAAP adjusted tax rate was 22.3%.

Fourth quarter adjusted EPS was $1.55, increasing 35% from $1.15 in the prior year comparable period. While full year 2025 adjusted EPS was $4.97, up 53% from $3.24 in the prior year.

During the year, we repurchased approximately 184,000 shares for $59.6 million.

Turning to cash and liquidity. We ended the quarter with $760 million in cash and the full $500 million available under our credit facility. We delivered more than $375 million in free cash flow for 2025, a 24% increase over last year. 2025 free cash flow included approximately a $70 million tax benefit related to the One Big Beautiful Bill. As a reminder, free cash flow includes capital expenditures which grew meaningfully in the fourth quarter to $135 million, reflecting our continued investment in manufacturing capacity. This included further expansion of our Malaysia operations, with additional lines coming online as well as the start of development of our new facility in Costa Rica, which is expected to be operational in 2029.

These investments strengthen our global footprint, advance our automation initiatives and position us to support industry-leading growth while continuing to expand margins over time.

Now turning to our outlook for the first quarter and full year 2026. For the first quarter, we expect Omnipod revenue to grow 28% to 30% with total company growth of 25% to 27%. On a reported basis, foreign currency is expected to provide a favorable impact of about 200 basis points to both measures. In the U.S., we anticipate Omnipod growth of 24% to 26% and in our international business, we expect Omnipod growth of 37% to 39%. On a reported basis, foreign currency is expected to contribute a favorable impact of roughly 1,100 basis points to international growth.

Turning to our full year 2026 outlook. We expect our total Omnipod revenue to grow 21% to 23% and our total company revenue to grow 20% to 22%. We expect a favorable impact of 100 basis points from foreign currency for the year. Our guidance reflects continued top-tier market-leading growth, but I know you will all ask me, why is growth decelerating? Just a couple of quick notes on this.

First, this year, we will be anniversarying the first full year of the U.S. launch of Omnipod for type 2, which was a significant contributor to last year's performance. In addition, we're beginning to annualize several of our international launches, which continue to ramp well but create more challenging year-over-year comparisons. These year-over-year comp dynamics are reflected in our 2026 guidance.

For U.S. Omnipod, we expect our revenue to grow 20% to 22% driven by increased penetration from MDI users and competitive gains. We expect year-over-year growth in U.S. new customer starts for the year and we assume similar trends in pricing, utilization and retention as we saw in 2025.

For international Omnipod, we expect 2026 revenue to grow 24% to 26%. On a reported basis, we expect a favorable impact of approximately 300 basis points from foreign currency. We expect year-over-year growth in international new customer starts for the year as we penetrate further in current markets and expand Omnipod 5 into new markets. Omnipod 5 is now available in 19 countries, including 5 recent additions in the Middle East, and we will continue to broaden our reach and plan to enter Spain by late 2026.

While value remains the primary driver of our international revenue growth, our guidance also reflects a benefit from positive price/mix realization, as customers continue to transition from Omnipod Dash to Omnipod 5. Overall, our international growth guidance assumes stable utilization and slightly improving retention from 2026 relative to 2025.

Turning to 2026 operating margin. In line with the annual guidance we provided at our recent Investor Day, we expect to drive approximately 100 basis points of operating margin expansion for the full year, reflecting strong top line growth, modest gross margin expansion, a significant step-up in R&D investments to fuel our innovation pipeline and leverage SG&A spend.

Looking at a few items below our operating income. We expect 2026 net interest expense to total approximately $40 million primarily due to lower interest income, and we expect 2026 non-GAAP tax rate to be in the range of 22% to 23%. Our team is actively focused on assessing potential opportunities to optimize our interest expense and tax rate over time.

Turning to shares outstanding and EPS. I'm pleased to share that the Board has approved an additional $350 million share repurchase authorization. We expect to deploy approximately $300 million of this authorization in the first quarter of 2026. Our strong balance sheet gives us the flexibility to continue allocating capital in line with our long-standing principles, investing for growth while delivering long-term value for our shareholders. Based on our current share count and repurchase plans, we expect the 2026 ending balance of our diluted share count to be around 70 million shares.

Based on these factors, we expect 2026 adjusted EPS to increase by more than 25%. We expect free cash flow to be approximately flat from 2025 levels, supported by robust growth and continued margin expansion, partially offset by a ramp-up in capital expenditures to support our continued global manufacturing expansion plan. As I just mentioned, 2025 free cash flow included approximately $70 million related to a tax benefit from the One Big Beautiful Bill.

Our team remains steadfast in its commitment to driving top-tier growth, expanding margins and increasing profitability and free cash flow. These efforts are central to our long-term value creation strategy and enable us to reach and serve more people with diabetes around the world.

With that, operator, please open the line for questions.

[Operator Instructions] Our first question today comes from the line of Jeff Johnson from Baird.

Congratulations on a strong close to the year. Ashley, I just want to start from a high level maybe with the first question here. You're a couple of months away from your 1-year anniversary leading insulin. Stock has had a great run in the first 6 months of your tenure. It's faced maybe some challenges here in the last 5 or 6 months. What do you think is the most underappreciated part of the insulin story at this point, especially from an investor perspective?

Yes. Jeff, thanks for the question. And it's great to see Insulet continue to execute and live into our commitments that we shared in November at our Investor Day. I would highlight 4 key areas. I'll -- number 1 is our tech lead, which we'll continue to innovate off of. I'll come back to that. I would say, number 2 is our growing commercial prowess. I'll come back to that. Three is our manufacturing at scale and 4 is our financial strength. So I'll start with just our tech lead.

As we shared, we've invested over $3 billion to get here. Omnipod 5 were just 3.5 years into the launch into the U.S., 2.5 years in places like the U.K. and Germany, and we continue to post record NCS. This knowledge, this experience and this tech lead really continue to prove the leadership that's resulted in #1 most prescribed and #1 most requested. And importantly, in my opening remarks, I've really shared how we've built this meaningful pipeline that really addresses the biggest unmet needs in the market. And you heard us touch around really 2 algorithm improvements starting this actually weekend.

We launched a limited market release with Omnipod 5 with a lower step point, advanced automated mode. It connects with Libre 3. We're going to be launching our new data platform. So that will be going out into full market release in a couple of months. We will be launching our third-generation algorithm with Omnipod 6. As we mentioned in our opening remarks, we're going to be posting the data and the algorithm at the ADA. This is a meaningful advancement in personal automation as well as over-the-air connectivity as well as on the pod placement with a lot of variability, which is important for patients as well as a 1 pod.

And you're going to hear us talk about -- there's been a lot of noise, if you will, in the industry, which is really good things for patients around this fully closed loop. We believe that we are in a class by ourselves of how we're going to define what fully closed loop really means. I'll come back to that in [indiscernible], but it's a very strong pipeline. And then our commercial prowess, I think, is really underappreciated. We have the largest sales force in the industry. we're going to evolve that sales force for messaging from selling on simplicity and ease of use and our highly differentiated technology to our strength of clinical performance. I'll come back to that.

And then as Flavia has mentioned in opening remarks, 30,000 prescribers with Omnipod, which is up 28%, a very strong brand loyalty, and we continue to have unparalleled access and affordability. We manufacture at scale. It is 1 thing to get regulatory approval, it's different than to manufacture. We produce tens of millions of pods with high-quality, medical-grade quality at consumer electronic scale. And when we say something, we execute on what we're going to say, I'm really pleased with the team is building out Malaysia. We're already margin accretive in Malaysia and Acton, we improved productivity, and we've already started to break ground in Costa Rica.

And last is just the financial wherewithal. I mean not only our recurring revenue model, 70% gross margin, expanding operating margin, EPS above revenue and cash flow positive. So those are perhaps underappreciated tenets of the Insulet company. Thanks for the question, Jeff.

Your next question comes from the line of Robbie Marcus from JPMorgan.

Congrats on a good quarter. I wanted to ask -- I guess it's limited to one. I wanted to ask on new patient start trends, U.S. and outside the U.S. And we've seen some of your competitors stumble a bit on new patient adds recently. How are you thinking -- you mentioned record new patient starts. I believe that's the U.S. and outside the U.S., but you could clarify that if I'm wrong. How are you thinking about finding sources of sustainability in the new patient growth? Type 2 is clearly a home run for you in the U.S. How do you keep that growing and getting larger and larger and continuing to win there? And then same question outside the U.S., you've been moving into new geographies. How do you sustain your #1 share there and continue to grow that over time?

Thank you, Robbie. Yes, we did -- as I mentioned before, I think at Investor Day, we enjoy very balanced growth from the U.S. and OUS. We did enjoy record new customer starts in the U.S. as well as OUS. And our role as the category leader, as we shared, we've generated about 65% of the market growth has come from Insulet. And that really -- the primary source of our volume are coming from people not in the category and those are people on multiple daily injections. And so we engineer our innovations to address -- to bring new customers into the market.

We do enjoy about 10% of our comp to switching, and we are switching from competitive AID, but our primary source is coming from MDI. And that -- we can go into type 1 where we continue to improve new customer starts and post new records in type 1, both in the U.S. as well as OUS. In the U.S., that's backed by strong ADA guidelines. We mentioned that 40% of people in AID therapy, there's still a lot of room when CGM has 70% penetration. There's a 30-point spread. So backed by science, making the education to really educate on our very strong clinical performance as well as just kind of the unparalleled access and affordability in type 1.

Type 2, Robbie, you mentioned we're at the nascent stage at 5% penetration. We have a very strong value proposition. We have very strong science. You're going to hear us talk more about kind of our strategic pivot, taking advantage of the largest channel of the #1 sales force in the U.S. of migrating from really sharing our differentiated technology into proven clinical outcomes. It's something, quite frankly, we own. There's a bit of a misperception in the marketplace that we have to correct the stance and set the record straight, which is in addition to our, if you will, preferred form factor and preferred user experience, we have very robust clinical performance on A1c reduction and improved time and range, not just in our clinical trials, but importantly, in two independent studies just recently that compared AID systems.

Omnipod A1c was unsurpassed and our time and range was similar. So we're going to take that message and that science to the largest channel of our P&L, which is our field force. Thanks for the question, Robbie.

Our next question comes from the line of David Roman from Goldman Sachs.

Maybe just to follow-up on Robbie's question here. Can you help us reconcile script trends to what you're seeing in reported revenue? I think this is a dynamic that caused quite a lot of noise intra-quarter. So can you maybe size up how new patient start trends and volume growth compares to revenue? And if script data is not the right barometer, what should investors be using to track performance? Then I have 1 financial follow-up.

Sure. Let me just turn to Flavia. Flavia, go ahead.

David, thank you for the question. Yes, we know there have been a lot of questions around script beta during the fourth quarter. So I think as a reminder, and we talked a little bit about this in the JPMorgan conference in January. The best -- if you were going to use script data, the best would be to use total pads and that's the best reflection of the future revenue outlook. It's not -- if the total pod data is not available, you can use total scripts. It will not capture potential changes to longer script fills going from a 30-day to a 60-day to a 90-day but it's also a good second best option.

And then finally, you can use NBRx, but there's a little bit of noise on NBRx because of samples and also different channels. Specialty channel was not captured there as you use IQVIA data. And then finally, in the fourth quarter, there's a little bit of, I'll say, seasonality where you see higher volume going through wholesale with specialty pharma than in other cap quarters, which is not necessarily captured in script data, but affects revenue. So there are a few items that folks have to take into consideration when they extrapolate from scripts into dollars of revenue.

Okay. And then are you willing to provide the difference between new patient start growth and overall revenue performance?

No. We'll continue to provide, I would say, qualitative commentary on our -- the strength of our new customer starts, and we talk about them. Ashley just mentioned the strong performance in both U.S. and OUS and the continued growth that we see as we continue to expand penetration of AID, but we're not going to provide specificity on new customer stock growth rates.

Your next question comes from the line of Larry Biegelsen from Wells Fargo.

Congrats on the strong finish here. Yes, I'm going to ask, I think, Jeff's question maybe a little bit differently. So Ashley, you're guiding to 21% to 23% Omnipod growth for 2026, and you gave a 3-year LRP of 20% recently. So my question is how are you feeling about being able to sustain the 20% growth in light of new competition? And anything new you can hop on why you think investor concerns around competition overblown? Do you think it's going to be harder for new companies to scale or compete directly with Insulet in the patch pump market? Or do you think their entries will have a rising tide effect?

Thank you, Larry, for the question. And again, I'm really pleased to see the confidence in the company even increase since our Investor Day that we shared in November. As we come as a company at a self load to the position of market leadership, performance trumps everything. And again, I'll go back to some elements that I think are maybe underappreciated. Getting regulatory approval is not really the definition of impact. And we have this 25-year head start with, again, $3 billion of investment that's enabled us a lot of knowledge, a lot of tech know-how, a lot of experience on scale. And I think in this marketplace, if you look at history, there's been a lot of attempts because it is an attractive market.

But I will tell you there are a lot of barriers to entry. And those really come down to manufacturing at scale with high quality. It has to go to continuing to innovate with clinical performance and really unlocking the TAM. What's going to enable us to deliver the top-tier performance is by continuing to bring new users into this category and our pipeline is specifically designed to bring new users from MDI into the category.

And I think the biggest unmet need for us is to really start to improve the acumen among the clinical base, particularly in the U.S., of our strong clinical performance. So in addition to being #1 prescribed and #1 most requested, predominantly because of our differentiated form factor and user experience, we also want them to know and be well aware of just the strong proven clinical performance, both efficacy and safety and unsurpassed in the category. I think that will be new information for many more clinicians. And then I'm going to come back to just continuing to build on our commercial prowess, as we go, Larry.

Again, I think this company has been known as being really good at technology and really good at the supply chain, what's perhaps underappreciated is this evolving commercial of having the largest sales force, selling on science, very strong. We're bringing new prescribers into the category. We have this beloved brand that we are activating. When we activate DTC, we generate record new leads into the category. We're converting those leads into brand loyalty, they become new Omnipod podders. And then we continue to have unparalleled access and affordability.

We've been at this pharmacy for 9 years and we've built remarkable relationships with the payers and the PBMs because we have very strong clinical and economic evidence and we're going to take that strength and continue because 100% of our portfolio is in pharmacy. So while others may be at the 10% or 30%, Omnipod has been at it for 9 years. and we'll continue to have unparalleled access and affordability. So thank you for the question, Larry.

One final add is also the financial strength that we have. We have best-in-class gross margin, which has built through these investments that Ashley talked about over the years, we have free cash flow positive. And that strength allows us to continue investing in the business while at the same time being able to expand margins. And that investment is in innovation. It is in unlocking the market with AID penetration and is also in capacity to invest ahead of demand when you are in a disposable form factor construct.

Yes, Eric sitting here, as we shared, Larry, we got $1 billion that we're going to invest in R&D just for the next 3 years. And we also are planning new next-generation platforms beyond the 3-year window to stay ahead.

Your next question comes from the line of Michael Polark from Wolfe Research.

I have a question on one of your sensor partners. So G7 is moving to 15-day from 10 day. Is this a different pod for Insulet or is this the same pod? And if it's a different part, can you comment on the company's readiness to provide integration with the 15-day sensor? I'm just -- I'm remembering back to 2024, it took some time for the G7 pod to become widely available and kind of, I think, suppressed starts for a period of time before it was widely available. And so I'd like to understand the dynamics around the move from DexCom to 15 days.

Thank you, Mike. And here's Eric, why don't you talk about our sensor integration?

Mike, thanks for the question. As a reminder, we were actually ready with the 15-day launch day 1 with DexCom. So Omnipod 5 is compatible with the 15-day G7 now, and that's a great experience for customers. Then one of the key things that we've been focused on, as you know, Mike, is accelerating sensor integration for customers. We were ready day 1 with the 15 day. As Ashley mentioned earlier, we began the limited market release of our Freestyle Libre plus integration just recently, and we're excited to bring back to market in the first half of 2026. And then looking ahead to Omnipod 6 recognizing this need to evolve even faster with the market part of why we're designing 1 pod that can be updated in market for faster innovation.

So that with Omnipod 6, we can always push the latest technologies directly to pods that customers have. So we're accelerating innovation and sensor integrations now, pleased to be on market with Dexcom 15-day and ensuring that we're positioned to do that going forward.

Your next question comes from the line of Travis Steed from Bank of America.

You talked about changing your guidance philosophy. So I just wanted to make sure we had understanding of how you kind of set this year's guidance versus prior years? And kind of what's been kind of baked in into 2026 versus kind of what's left for upside? And also do you expect record new starts in Q1 as well?

Thanks, Travis. Flavia, over to you.

Yes. Travis, we continue to set guidance with a full intent to deliver. That has not changed. The guidance that we provided today reflects a balanced view of our outlook at this point. And we will experience normal seasonality in the first quarter, which has been the case historically between fourth quarter and first quarter. But outside of that, we are very confident and pleased to be able to provide an outlook of 25% to 27% for the first quarter and 20% to 22% for the full year.

Your next question comes from the line of Joanne Wuensch from Citigroup.

ADA is going to be here before we know it. Is there anything in particular that we should look forward to there? And I'm also trying to key in on when are we going to get a line of sight on some of the clinical steps for Omnipod 6?

Yes. Thank you, Joanne, for the question. So let me maybe just key up one of the things that we'll be sharing at the ADA, which is our -- from our -- data from our feasibility study, EVOLUTION, which is around what we're calling are fully closed loop, which not all fully closed loops meet the definition of our definition. And I think it's important, I'm going to spend a little bit of time on this quickly and then Eric will cover the others. We are designing, as the market leader with our big eyes focused on the underserved type 2 market in the United States, where we have 5% penetration, and there's 5.5 million people on insulin that we would like to be on AID therapy since the ADI guidelines recommended therapy as the standard of care.

We have designed our fully closed loop to address the biggest barriers for those patients with type 2 to get on to AID therapy. It starts with our algorithm, which will be including no user intervention. It requires no dosing. It has no mealtime interactions, no adjustments for the pod worn. There's 2 other areas that are really important to the type 2 user base who 1 is the clinicians. And the clinicians, this will require no defined settings at start, which is a big barrier right now to the primary care prescribing that just don't have the time to go input all of those settings.

And then third, Joanne, the big unlock is patients don't have to do 2-hour training. This is something that they can initiate on their own. So our combination of really modernizing the training so that they can do it at home on their own time, without 2 hours, really unlocking prescriber or adoption, not having to put in setting really important for the primary care audience, which is really who's going to be managing patients who have type 2 diabetes. And then third, really a very CGM-like experience for people with type 2 diabetes. So we're going to be sharing our data from our feasibility in -- at the ADA. But in addition to that, we have some -- our third-generation algorithm on Omnipod 6 that Eric will touch on.

Joanne, just building on Ashley's comments about what's coming at the upcoming congresses. So ATDD will be showing the evolution data, as Ashley just described on our way towards that truly transformative fully closed loop system to unlock primary care. We'll also be showing some health economic data showing favorable outcomes and ER visits for the unique fully exposable experience that is Omnipods compared to tube pumps. So really excited for what's coming at ATDD.

Looking ahead to ADA, that's where we'll be publishing the pivotal results from STRIVE. That's the pivotal that supports Omnipod 6, excited to be reporting that out. And in addition, Ashley mentioned this earlier, but there are more independent third-party studies comparing clinical results of on-market AID systems coming out. And in 2 recent of those, Omnipod has shown unsurpassed A1c. And similar time and range to those reporting time and range using an iCGM sensor. And so 1 of the other things that we're paying attention to is that it's really important to interpret clinical data based on A1c. And it's hard to compare across studies that don't use an iCGM sensor for time and range. And so there's more of those studies coming out, and you'll see us talking about those too.

Your next question comes from the line of Richard Newitter from Truist.

Congrats on the quarter. Maybe the first one, just your type 2 mix, I think you said you actually year at about 40% of the new patient starts. I guess that would seem to imply that your type 1 segment maybe saw moderating growth leveling off in the single-digit range. I guess, is that the right way to think of it going forward? And if so, what is that? Is that share? Is that just the market kind of has started to moderate and we're getting near maturity? And then I have a follow-up.

Yes. I'll start and maybe, Eric, can add. So yes, we had very strong type 2 performance in the fourth quarter, and there was a continuation of that strength throughout the year. We had record new customer starts for both U.S. and international, both year-over-year and sequentially. To your point, Richard, type 1, it grew nicely year-over-year, and it was comparable to the third quarter, which was a record quarter for us in [indiscernible]. The level of penetration, obviously, in type 1 is higher than Type 2. And as we continue to bring AID into those markets, you will see accelerating growth in type 2 just given that it's 5% today versus type 1 at 40% penetration of AID.

But we continue to source a lot of our volume from MDI, as we talked about, 85% and that's really our strategy to drive that penetration in those customer segments and internationally, which is also still very underpenetrated. Eric?

Yes. Richard, thanks for the question. I think as Flavia described, type 1 in the U.S. is more penetrated. And the level of new customer starts in the market is high. And so it continues to be a significant driver of growth. Ashley described it well. We've got a balanced growth portfolio. And type 1 is a big part of that. Type 2, the level of new customer starts in the market has been low, and we are accelerating that as we launch Omnipod 5 with type 2 and did so over the course of 2025, which is why you saw that mix grow.

You also saw our type 1 new customer starts outside the U.S. grow significantly year-over-year. And those 3 levers, U.S. Type 1, U.S. Type 2 International Type 1 are going to contribute a balanced contribution to our growth over time.

Okay. That's helpful. And maybe can you -- following up to Travis' question, can you put some assumption bars or around the upper and lower end of your range? Or maybe said another way, what would have to happen to the biggest needle mover in your assumption set to be at the upper end or above?

Well, we provided a guidance range. So to me, that is the upper and lower end of the bar that you're describing, Richard, and I think we, obviously, as I said earlier, we continue to set guidance with the intent of delivering and this is our best outlook at this point, given where we are in the year. obviously, if we can advance AID penetration even further and faster, that will translate into us being closer to the top end of the range.

Thank you, Richard, for the question. We have time for one more question.

Certainly, your final question comes from the line of Danielle Antalffy from UBS.

Congrats on a strong end to the year, ladies plus Eric. So my question is on the competitive moat. Ashley, you touched on this earlier. I do think it's underappreciated. I specifically wanted to see if you could talk a little bit about the sampling at the physician's office and sort of if you could walk through how this works, like who trains the patient to ensure they get the optimal experience and I appreciate it's still early, but what are you seeing for capture rates with that program?

Thank you, Danielle, for the question. And I guess just for context, again, I think the company is best known for just having really differentiated technology and investing ahead of the curve in supply chain and maybe pioneering this pharmacy pay-as-you-go model. And what I would like to see at the end of this year is a better appreciation of the commercial prowess that we've been building over the past couple of years. So we have been expanding our sales force. We expanded it around 25% last year. We're continuing to do that. We call on over 17,000, so full coverage of the endos, really 10,000 of the highest prescribers. And what we're evolving is our messaging, as I mentioned earlier, in addition to selling what they've come to love, which is really this differentiated technology platform that's simple and easy to use.

It's why it's the gateway to the category to new users. It's easy for them to explain is also coming to educate on our really strong clinical performance. And we will continue that messaging in 2026. To make it easy to get people on pod, we're really the only AID offering that can get people on a sample. So right in the practice, they can go put a pod. It's a very capital-efficient way for us to initiate trial. We've gotten a lot of really good feedback both from young children as well as grandparents, around once it's kind of that moment of delight. Once they try it on, they get the WOW factor and we have very strong conversion ratios.

In addition to the called-on universe, we also have the Starling brand is what I say, that I think is a bit underappreciated where we activate directly to consumer, make them aware of the category, make them aware of Omnipod 5 and people go in and ask the doctor for that. And they specifically ask for Omnipod, and that's a new category user. And we -- those then become new patients, but they also become new prescribers. And that's why you heard us talk about when we ended the year, we had 30,000 prescribers writing for Omnipod, which is up 28%. And we're going to continue that flywheel of really creating the market and creating demand for Omnipod. Thank you for the question, Danielle.

And this concludes our question-and-answer session and today's conference call. We thank you for your participation, and you may now disconnect.

Hello, everyone. I'm Robbie Marcus, the med tech analyst at JPMorgan. Very happy to host our next session with Insulet. CEO, Ashley McEvoy, will do a presentation followed by some Q&A.

Thank you, Robbie. Good morning, everyone. It's a pleasure to be here. I am Ashley McEvoy, President and CEO of Insulet and really looking forward to sharing our story and why we are so energized about the present and importantly, the future. Before we begin, please note our safe harbor statement available on our website, which includes important information about risks and uncertainties.

So at Insulet, our vision is simple and powerful, and that is to create a world where diabetes demands less every day, everywhere. Our mission is born of empathy, driven by ingenuity, proven by science and reflects what drives all of us at Insulet, which is really to transform the lives of people with diabetes every day. Let me take a bit of a moment to just introduce you to Eric. Eric was not surprised by his Type 2 diabetes diagnosis at 27, given his family history. And while a CGM helped reduce his A1c to 7.5%, he still struggled with time and range.

After starting Omnipod 5 in early '25, his A1c dropped to 6.5% and his time in range raised to 90%, which he calls a real game changer. Today, Eric leads an active life playing competitive softball, even pickleball and running and credits Omnipod 5 for giving him the control that enables his lifestyle.

In net, Eric gets to just say yes, to what matters most. For 25 years, Insulet has been finding a better way, a journey that has taken us from the disruptor to the market leader in automated insulin delivery. I'm going to refer to automated insulin delivery for Brevity to the AID category. Our breakthrough in AID system, Omnipod 5, launched just over 3 years ago, and it quickly has become the most requested solution among people with diabetes and the most prescribed solution among clinicians. The strength of the Omnipod platform has allowed us to become the clear leader in new customer starts in both the U.S. and Europe. And based on our prior guidance, is expected to result in revenues of approximately $2.7 billion for 2025 and a customer base of over 600,000 podders across 25 markets. Insulet is well positioned to deliver sustained top-tier growth and industry leadership.

Our strength lies in several unique structural advantages that have been built over 25 years, providing durable competitive moats. First is a unique form factor coupled with a highly differentiated technology platform and a highly-scaled manufacturing infrastructure. Second is clinically proven science and outcomes that help strengthen the ADA guidelines, both for patients who have type 1 as well as people with type 2 diabetes.

Third is strong, differentiated brand loyalty, the most requested brands and one of the highest Net Promoter Scores in the category. We enjoy preferred access and affordability, and we are an innovative performance-based culture driven by an experienced leadership team. We showcased this in our November Investor Day.

Our moats provide a strong foundation for existing market leadership and long-term value creation for stakeholders. So let's just start with what we've accomplished in recent years. We are not just the market leader in automated insulin delivery, we are the market driver. Over the past 5 years, we have driven 66% of global market growth. We've achieved a 26% CAGR more than 3x the rate of any other company. We lead in new customer starts and our share has grown from less than 30% in 2020 to 50%.

This proven track record gives us the confidence and fuels our ambition for the future. Our journey from disruptor to leader has positioned insulin with unmatched financial strength, market-leading growth, expanding profitability and accelerating cash flow, all supported by a very healthy balance sheet. Revenue has compounded a 25% CAGR since 2021, driven by robust customer starts, durable retention across both the United States, our largest market as well as international markets.

Our adjusted operating margins have expanded nearly 600 basis points and adjusted EPS has grown significantly faster than revenue. We became cash flow positive in 2023 and have delivered accelerating free cash flow ever since, providing us the flexibility to invest in continued growth and innovation. This proven track record underscores our ability to deliver sustained performance and value creation for shareholders.

Now we're not just seeking to lessen the burden of diabetes. Many people are in this hunt, but we offer a uniquely compelling investment proposition in this market. First, we have a large underpenetrated TAM across the U.S. type 1 community, U.S. type 2 community and international markets with significant runway to unlock additional growth in one of the fastest-growing segments in medtech.

Second, as I just mentioned, we have durable competitive moats, a unique form factor coupled with a highly differentiated technology platform and a highly scaled manufacturing infrastructure. As I mentioned, very strong brand loyalty, clinically proven technologies preferred access and affordability and an experienced leadership team and performance purpose-driven culture. Third, we have a market-leading pipeline designed to advance the standard of care with multiple new product launches over the next 3 years.

Fourth, Insulet is strongly positioned to successfully execute our strategic plan, focused on penetrating our 3 core markets: U.S. Type 1, OUS Type 1 and U.S. Type 2 through market development and demand generation. We operate from a position of unrivaled strength with a healthy balance sheet supported by strong steady cash flow generation, which gives us the financial flexibility and resilience that enables us to fuel innovation and continue to support top-tier growth. The combination of all of these factors is the why we are in a class by ourselves. So let's talk about the TAM.

In the United States, people with Type 1 diabetes represent more than a $9 billion market. And AID penetration is just 40%, lagging well behind CGM penetration of around 70%, and so around a 30-point differential. In OUS Type 1 diabetes represents more than a $10 billion market and only 1 out of 4 people with diabetes is on AID therapy, with CGM representing around 65% penetration, so around a 40-point delta.

And in the United States with Type 2 diabetes, it represents around a $12 billion market and AID has less than 5% penetration where CGM penetration is trending around 55%, so we're around a 50-point differential. Together, this makes our total addressable market more than $30 billion, representing approximately 8 million people with diabetes in these 3 core segments. And our ambition is to serve even more people with diabetes, which more than doubles our total addressable market from 8 million to 7 million people with diabetes.

Now starting with our OUS markets. We will build off of our strong Type 1 infrastructure, equity and success as we expand into Type 2 diabetes. In the U.S., we'll take our learnings and capabilities and apply them to the Type 2 basal-only community, which will allow us to reach another 3 million people with diabetes. And last, in targeted Asian markets, together, there are around 2 million people living with Type 1 diabetes. And importantly, this does not even include the Type 2 community living with diabetes in these markets. headline. This is a large underpenetrated TAM and why AID has been 1 of Medtech's fastest-growing segments. This TAM gives us confidence in continued market attractiveness. So our leadership position wasn't earned overnight. It's the result of decades of focused investment built around competitive moats, which are quite difficult to replicate. First is our technology and our manufacturing mode.

Over the last 25 years, we've invested more than $3 billion in R&D and manufacturing, delivering Omnipod, the first tubeless wearable solution, offering unmatched freedom, ease of use and robust clinical outcomes. It remains the only scaled tubeless wearable AID solution in the market. Our highly automated global manufacturing and supply infrastructure enables us to consistently produce high-quality devices at scale with a cost advantage. We produce tens of millions of pods every year.

Second, we enjoy access and affordability as a competitive moat. We pioneered this pharmacy pay-as-you-go model, which reduces the friction for prescribers and users and broadens access and support adherence. We'll continue to innovate that business model. Third is our brand loyalty moat. We've built deep connections with our potters, creating an engaged community that advocates for Omnipod and strengthens our brand. This loyalty drives industry lead satisfaction and retention rates and have been validated by numerous external recognitions from people with diabetes as well as health care providers, including the #1 most requested and most prescribed AID in the United States. We enjoy the highest Net Promoter Score in our category. We have the highest consumer awareness among multiple day injection users and 70% of people with diabetes who request a brand ask for Omnipod.

Collectively, these moats give us high confidence and durability of our top-tier growth, sustained market leadership and strong returns on investment. Diabetes remains a complex and burdensome condition despite insulin therapy. Most individuals fail to achieve ADA recommended A1c targets, and diabetes-related distress is widespread.

Furthermore, 90% of people using insulin are not benefiting from AID despite guidelines recommendations, this leaves a significant gap in care as well as outcomes. We are focused on delivering innovation that lessens the pressing burden of diabetes for patients, improves outcomes and simplifies the process of prescribing and accessing Omnipod, enabling us to bring these benefits to the millions of people taking insulin.

In 2026, we will deliver several of the most requested updates to Omnipod 5 to strengthen our #1 position. These include automation improvement, full CGM integration and simplified data and insights. In 2027, we will launch Omnipod 6, which will dramatically reduce the burden of managing diabetes with improved connectivity, real-time updates to customers and more personalized automation designed to enhance clinical outcomes. In 2028, we will launch our fully closed loop system for people with Type 2 diabetes that eliminates manual inputs and simplifies therapy for millions, aligned with ADA guidelines and addressing the unmet needs of 5.5 people with diabetes on insulin where only 25% are achieving recommended glucose targets.

Beyond our 3-year period, we are looking at bringing fully closed loop to Type 1. We're looking at our next-generation platforms. as well as addressing other areas with big unmet needs into the category. Now I'm going to touch on each of these innovations. This year, we'll be delivering several of the most trusted updates to strengthen our position as the most loved prescribed AID system in the U.S. First, an enhanced algorithm designed to deliver better glycemic control and reduce device interactions to simplify daily use and improve algorithm responsiveness to prolong hyperglycemia to prevent the highs. Second is integration with FreeStyle Libre Plus, a leading sensor that provides patient choice and simplify conversations with health care providers when starting patients on Omnipod 5. And third, Omnipod Discover. It's a new data platform for streamline insights to provide succinct health care professional review of Omnipod data. designed to make it easier to prescribe and optimize care. Discover uses machine learning to provide insights and reassurance directly to users and gives them greater comments.

It also streamlines onboarding, simplifying the process of starting on Omnipod. These events will strengthen our leadership position as the #1 customer preferred, most prescribed AID system bringing in new users from the MDI therapy category and expanding the AID category and expanding our market share. In 2027, we will launch Omnipod 6, a product designed to improve outcomes, offer seamless connectivity, provide a platform for accelerating continued innovation, and streamlining prescribing Omnipod health care professionals. It will have a smaller algorithm to personalize insulin delivery designed to improve outcomes.

We will have our pivotal study, which is now complete, and we will be sharing data at the ADA in June of this year. It will also have enhanced connectivity designed to improve the wear experience through greater location flexibility. This has been a key ask from many of our powders. And it will have an updatable single pod that can be updated over the air and works across all CGM systems. So let me get a little bit of context here.

This will allow us to go from 2 SKUs to 1 master SKU, and it will be compatible with all sensors, eliminating the need for us to manufacture sensor-specific SKUs. It will also help accelerate our integrations with the latest generation sensors on their way. This simplifies the prescribing behavior for clinicians as well as patients. This is a big deal because it strengthens our innovation capabilities and improves our cost to serve. And in 2028, I'm pleased to share we will be launching our fully closed-loop system for people with Type 2 diabetes.

It's designed to make AID accessible virtually everyone, addressing a significant unmet need for the 5.5 million people on insulin. Today, only 25% of these patients achieve recommended glucose targets, and 70% of these people are cared for in primary care, who are lower prescribers of AID therapy. Our fully closed loop system is designed to change exactly that. It's an AID system designed to allow primary care physicians to offer AID to their patients on insulin, consistent with updated ADA guidelines that now recommend AID as the preferred option for adults with insulin requiring Type 2 diabetes.

It will have intelligent real-time automation, no meal announcements, carb counting or manual input. You just put it on, connect to your CGM and live. It will simplify prescribing and management, eliminating all inputs dramatically resist the complexity for clinicians, making Omnipod as easy to prescribe and manage as CGM even for primary care providers. It will simplify onboarding for people with diabetes starting as simple as picking a prescription or a sample kit and enjoying the benefits of audited insulin from home on their own schedule. It will enable a consistent commercial advantage. This simplicity improves our user experience and significantly lowers the commercial investment required to drive adoption.

It helps us to continue to expand access, designed to improve clinical outcomes and unlock access for the 1 million who have never considered AID therapy. It also serves as a key catalyzer of growth in our strategic plan. While our initial focus is the Type 2 basal bolus market, the primary care ready simplicity of fully closed loop enables us to target the broader Type 2 basal market over time. Our fully closed loop for Type 2 represents a game-changing opportunity to improve outcomes for millions expand our reach, accelerate our growth in one of the largest and most underpenetrated segments of diabetes care. We expect to start the pivotal this year submit our regulatory filing in '27 and launch in 2028.

So innovation is clearly 1 aspect of our growth strategy. Over the next 3 years, we're evolving how we go to market to drive increased category penetration and expand market share. Starting with the Type 1 in the U.S. Today, around 40% of people with Type 1 use automated insulin delivery. By 2028, we aim to drive penetration above 50% through 3 commercial levers: one, leveraging demand generation for AID to raise awareness and drive advocacy for clinical practice to reflect updated clinical guidelines, and bring more people from MDI therapy into the category, driving market growth and clearly earning our fair share of market share; the second is around strengthening commercial execution and excellence to improve execution, broadening reach, improving frequency, improving prescriber engagement and optimized channel strategies. And last, it's about creating a superior user experience, making starting and staying on Omnipod as easy and affordable as possible.

In Type 2, where we were the first to secure this indication in the U.S., we have an enormous opportunity to leverage our strong foundation in Taiwan built over 25 years and create type 2 AID market, with a goal to more than double penetration by 2028. Our approach is tailored to the unique clinical context, patient journey and prescriber base in the Type 2 community. And we will achieve this with 3 commercial levers. The first is positioning Omnipod as the standard of care for patients with type 1 diabetes -- type 2 diabetes, generating incident interest among endocrinologists and primary care providers through direct-to-consumer, engagement and patient demand, driving adoption and awareness of the updated ADA guidelines so they translate into clinical practice.

The new ADA 2026 standards of care now recommend AID as the preferred insulin delivery system for all individuals with Type 1, for all people with Type 2 diabetes on multiple daily injections, and they now advise AID for people with Type 2 on basal insulin who are not meeting glycemic controls. Additionally and importantly, they have removed previous initiation and maintenance requirements, improving access and flexibility for patients and clinicians. The second lever is creating a differentiated Type 2 user experience, building confidence and supporting patients in starting and staying on Omnipod through tailored onboarding and education.

And the third lever is removing barriers to adoption, demonstrating Omnipod's robust clinical and economic value to continue to improve access and reimbursement. Another strategic growth driver at Insulet is globalization. In the markets where we operate OUS, there are approximately 4 million people living with Type 1 diabetes. About 80% are in Europe and 20% across Canada, Australia and the Middle East. Category penetration in these markets is only around 25% where CGM penetration is around 65%, so around a 40-point differential despite engaged payers and clinicians, mature health care systems and significant unmet need.

Our primary focus is to drive market growth through market development and win share through demand generation powered by our proven playbook. By executing on these initiatives, we aim to get to 30% to 35% penetration by 2028. A key step change to achieving this goal is bringing Omnipod 5 to more markets. Today, Omnipod 5 is present in 14 markets, and we're expanding our reach to 6 additional markets in '26, predominantly within the Middle East and then with Spain. Over the longer term, we're beginning to develop the global market to bring the benefits of Omnipod to another 4 million people with diabetes. Our success unlocking this opportunity in the U.S. and early conversations with key opinion leaders in major European markets gives us the confidence in our ability to unlock this large underpenetrated TAM over time.

We have a proven track record of profitable international growth, and we look forward to capitalizing on our experience and our competitive advantages. All of these investment strategies and execution come together in our financial growth algorithm which we shared at our Investor Day in November. Through 2018, we forecast revenue will grow at a CAGR of approximately 20%, driven by increased penetration in our core markets. We expect adjusted operating margin expansion of approximately 100 bps per year as leverage and efficiency build throughout the P&L.

And finally, we are forecasting adjusted EPS to grow faster than revenue at a 25%-plus CAGR, supported by continued strong free cash flow generation. We are leading today and reinvesting meaningful to extend that lead. Innovation remains at the core of our success. We plan to invest more than $1 billion in R&D over the next 3 years, fueling breakthrough technologies, expanding our platform. We are strengthening our competitive moats through sharper commercial execution and access strategies that lower friction, accelerate starts, reduce service costs and deepen customer loyalty. We are widening the gap operationally by expanding capacity in Acton, Massachusetts, Malaysia and Costa Rica and advancing automation to increase resiliency, reduce unit costs and reinforce our manufacturing cost and quality advantage.

The outcome we invest to pull further ahead and sustain our top-tier growth while continuing to deliver margin and expansion. To close, let me begin -- let me end with where I started, and that is that we are finding a better way for 25 years, and we will continue to find a better way. That journey has taken us from a disruptor to now the market leader. In our existing markets, we see large underpenetrated $30 billion TAM, and we have line of sight to even more. Today, we operate from a position of strength, with deep moats across technology, science, manufacturing, access and brand.

This enables us to help even more people with diabetes worldwide and capture this remarkable opportunity. Our robust innovation pipeline will allow us to address the biggest unmet needs in the category and the barriers to prescribing and help drive AID adoption in our existing markets and unlock new market opportunities. Backed by our strong financial position, disciplined execution, we are investing in sustaining top-tier growth and enhancing profitability. Importantly, this enables us to serve many more podders like Eric. Thank you for your time and your interest today.

All right. I'll invite Robbie to come join me and my leadership team, Flavia Pease, my CFO; and Eric Benjamin, our COO, welcome.

Well, good. Maybe we could start with sort of how you feel about slit and your position in the market versus competition. You're at an interesting crossroads where you're clearly the market leader in patch pumps. You've been in the pharmacy for many years now, both in commercial and Medicare where no one else is. And now everybody seems to be coming with the patch pump. and I guess it's flagging to have everybody want to copy you. But how do you feel about where you sit today and your ability to remain where you sit today versus the competition?

Yes. Thank you, Robbie. Let me first start with -- I mean this is a company that's put up 20% growth for the past 10 years, and we've shared in November that we have strong conviction to continue to deliver 20% growth at a 70% margin with 100 bps of operating margin expansion and a healthy flow. And that is really going to enable us, I'd say, a couple of key things to stay ahead. Number one, we have a large underpenetrated market, and 90% of people who are using insulin are not using AID therapy. And so it's no wonder that the market attractive is still there.

Now what we enjoy is Omnipod from an innovation point of view is in a class by itself. It's a highly differentiated technology platform. We've invested ahead of the curve. We've invested $3 billion in R&D and manufacturing to build a world-class manufacturing footprint with automated advanced automation that enables us to scale with a cost advantage. We're going to continue to innovate and stay ahead of the curve as now market leader we enjoy, I'd say, a unique perspective into what are the biggest unmet needs in the marketplace and what are the biggest barriers to prescription and prescribing behavior. We have a market-leading pipeline over the next 3 years, starting with this year, that addresses each of those unmet needs. So that's about innovation and again, manufacturing at scale. What you may not know about is really our commercial. So you may know us as a pioneering the pay-as-you-go model. And yes, we enjoy preferred access and affordability, and we'll continue to maintain that. But we've also been investing in our commercial engine, and how we expand the prescriber base.

And we, right now, call it 27,000 prescribers because of our highly simplified user-friendly form factor, with proven science and a very discrete form factor, we are able to be almost the gateway to the category and attract new prescribers in the category, so much so that our prescriber base 25% through quarter 3 last year. And in attracting new prescribers, we're also going to active patients to bring them into our category. And we shared in quarter 3 by activating the patients to go at their clinician, we're getting more than the fair share of Omnipod scripts, and we're getting more prescribers into the category.

And then I come to the strength of our balance sheet with revenue -- a reoccurring revenue model of 20%. 100% bps of operating margin expansion. We will continue to invest in innovation and commercial capability and very thoughtful deliberate globalization, Robbie, that gives really optimism to live into the commitment that we shared in November.

So in terms of new patient growth, U.S. and outside the U.S. and great trends, but sort of different positions. In the U.S., you launched Omnipod 5, what is it, 2 years ago, and you're still actually throughout 2025, accelerated new patient growth on the back of integration with the leading CGM and iOS. So one, how should we think about new patient growth going forward in the U.S.? And then let's talk about afterwards outside the U.S. is you were kind of coming from one hand tied behind your back without integration and Omnipod 5 has had a great launch there and phenomenal growth.

So maybe speak to sort of slightly different time points of entry and how you feel about sustainability of new patient growth in each geography?

Yes, I would start -- I think we have a very balanced growth pile. If you look at the data we shared through quarter 3, the U.S. is our largest market. We continue to enjoy new customer starts in the U.S. We continue to pursue penetration in Type 2. That's enabling performance in the U.S., our largest market in the high 20% in terms of our revenue performance. OUS before we launched Omnipod 5, we were enjoying revenue growth between 10% and 12%. In recent years, with the launch of Omnipod 5, you're now starting to see that revenue CAGR go to the high 30%.

We're around 600,000 potters of a customer base. We have really strong retention rates. We're able to use the data that we get every 5 minutes from our patients to make sure that we can do our part to keep them on therapy. And so I think we have a healthy balance from a geographic point of view, Robbie. I think we have a healthy balance from an indication of Type 1 and Type 2. And quite frankly, we're focused on really building the category to get more people from MDI into the category. And since we have such a differentiated technology, we're going to get 1 of our fair share of new customer starts.

I want to touch on the third quarter earnings call, you talked about maybe a shift in guidance strategy. And I know we've talked about this, and I'm on the same page as you. I know what you're thinking, but a lot of investors just heard they're not going to be in 2026 with the new guidance velocity. We'll have smaller beats and give a little more appropriate guidance. And so that was the investor focus. Maybe I'll just open up to you and clarify, what exactly do you mean by the new guidance philosophy and why the shift? .

Thanks, Robbie. Yes, I think what we intend to is to continue to provide guidance with a high degree of confidence of achieving and hopefully beating. We do want to share guidance that reflects a balanced view of our outlook and contemplates both known upsides and potential downsides at a time that we provide that guidance. So I think it's a continuation of the strength of the business, and we will continue to beat and -- meet and hopefully beat earnings. There has been some noise in past earning calls around with the severity and significance of the beats perhaps in the past, where there was a lot of questions around the business slowing down as you went throughout the year. And so I think that's one of the things that we want to evolve from and focus investors in really understanding the strength of the business and the confidence that we have.

Got it. Very clear. Ashley, you mentioned the balance sheet. And I think this is one point I arc on with investors is the 4 so manufacturers of insulin pumps, 3 of them either lose money or don't make much money and then Insulet makes a good amount of money with several hundred million of free cash flow per year, probably over the next 3, 4 years. So how can you use that to further put a gap between you and the competition? Patch pumps are very expensive if competition wants to invest here and move into the patch pumps. But what can you do to always stay one step ahead? .

Yes, I'll start and I'll invite Eric join me. I mean I would say -- I say that we've invested $3 billion to get to where we are, and that's enabled us to be a market leader and produce tens of millions of pods of strength. It allows us to invest. We've announced that we're building a plan for, and it allows us to invest to stay ahead of the curve. It enables us to stay ahead from a innovation point of view to really have a pipeline that meets the highest areas of unmet need and reduces the barriers to prescribe, again, to drive category penetration. And we know because of our brand loyalty that we will get more than our fair share. I would say, looking ahead, Robbie, there might be more entrants into the category, but comparability is not true. I think that when you bought even with new entrants, we'll enjoy -- continue to be a class by itself. And it's -- we've invested 25 years to get to be this disruptor. And we're going to continue to invest very thoughtfully with very strong ROI to make sure that we continue to be the pacesetter of the category. Anything you want to add, Eric, to that?

Maybe a couple of quick perspectives. You said it well, Ashley, but we've spent 25 years and invested $3 billion to create the differentiated technology platform that is Omnipod. And as a reminder, that's a fifth generation wearable. And so we've iterated through each of those technologies. Before Omnipod 5, we were on the fourth generation of Omnipod, building highly reliable auto inserted, fully disposable, waterproof, wearable insulin therapy. And then we spent years adding the technology to connect to multiple CGMs to deliver personalized, automated insulin delivery and great clinical outcomes and get all of that technology into our fifth generation wearable insulin delivery system that is Omnipod 5.

And so Robbie, the way we think about it is exactly as you teed it up, doing that well to create a market-leading technology requires investment. And we've spent $2 billion in cumulative R&D to get here, and we shared at Investor Day. We're going to spend another $1 billion over the next 3 years to deliver the market-leading pipeline that Ashley described in her opening remarks. The end to that, as Ashley said a few minutes ago, because of our high gross margins, we're able to invest in that innovation. We're also able to invest to scale our commercial investments, so that becomes an additional note as we keep broadening the prescriber base and introduce them the market-leading fifth-generation wearable technology, that's the standard that they expect from the industry as we brought the category. And so as we keep broadening our commercial footprint, setting the expectation in the market for a fifth generation proven technology of AID, that becomes an additional moat that we can keep investing in over time.

Well, great. We're out of time. Thanks for a great discussion. Thanks, everybody, for joining.

Good morning, everyone, and welcome to Insulet's 2025 Investor Day. I'm Clare Trachtman, Vice President of Investor Relations. And on behalf of the entire team, I'd like to thank you all for joining us this morning, both in the room and online.

We have an exciting program for you today. The leadership team will share our long-term strategy and innovation road map, along with our financial outlook for 2025 through 2028. Before we dive in, we do have a few housekeeping items. Let me start 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.

As a result, our actual results could differ materially from our current expectations. Please refer to our SEC filings for more details concerning factors that could cause results to differ materially. We will be discussing a few of our latest products, which are investigational use and have not yet been cleared by the regulatory authorities.

In addition, some products we will be discussing are not yet available in all regions. You can find the list of these products here. In addition, non-GAAP financial measures will be used to help investors understand Insulet's ongoing business performance, including adjusted operating margin, adjusted EPS and others.

A reconciliation of certain non-GAAP financial measures to the comparable GAAP financial measures is included in the investor presentation. As we move on to the agenda, we're proud to present a compelling lineup of presentations from our executive leadership team, complemented by inspiring stories from our guest speakers and concluding with the Q&A. We'll take a short 15-minute break at approximately 10:20 and plan to wrap up the formal presentations by 12:30.

For those of you joining us here in Acton, Grab and Go box lunches will be available following the presentations, and we have manufacturing tours available for those who signed up. With that, I'd like everyone to turn their attention to the screen for a short video before handing things over to our President and CEO, Ashley McEvoy. Thank you again for joining us today. We truly appreciate your interest in Insulet.

[Presentation]

Well, good morning. Thanks for joining us today, and welcome to Insulet's 25th anniversary of our company and our 2025 Investor Day. And for us, this is like a first in a decade. So while investor days are focused on the future, I promise you we will get to that soon enough. I'd like to start by honoring the past, partly because it's our 25th anniversary and partly because I'm excited to share the special qualities that have shaped this company since its founding. Now it isn't lost on me as a new CEO talking history, but it's impossible to spend time with the Insulet team and all of our Podders worldwide without seeing how this journey has defined the company we are today and the company we will become.

Let me share a remarkable story for the past 25 years. It's really a story of ambition and disruption and ingenuity. One of our founders had a bold vision to challenge the market leader. Back then, we were a tiny start-up with the feisty focus determined to really disrupt the incumbent. Does that sound familiar? Industries, this is how industries are born and how they evolve.

Over the last 25 years, our company has achieved remarkable feats. Through ingenuity and the marriage of technology, we launched Omnipod in 2003 and we followed on by Omnipod 2 Eros, DASH and now for over 3 years in the United States, Omnipod 5. Each generation has marked a breakthrough in technology that has brought us ever closer to really making life with diabetes, dare I say, normal. Soon, we'll expand to many more places around the world. The power of this engineering marvel has made the market leader, which is the Omnipod right now, made us the market leader in the U.S. and has helped grow our community to over 600,000 Podders globally with revenue of $2.7 billion.

I believe before you look to the future, you must honor the past. We've recently had one of our founders, John Brooks, right here on campus. He retold the story of Omnipod's origins. John's vision was quite simple. He wanted his child with type 1 diabetes to feel as normal as possible. Able to swim, shower, go on sleepovers and not be tethered by tubes or electronics.

In John's heart in mind, he knew there has to be a better way. So what started with a sketch on a napkin has turned into a multibillion dollar market-leading Omnipod brand that you know today. Thanks to John's vision, tenacity and steely eyed resiliency, we are now carrying that baton forward. So one thing that fervently is true from the founding to where we are today is our North Star. We will find a better way. When I joined Insulet, everyone I met, whether it be in the plant or in labs or customer service or even in the field echoed this humble, open-minded belief that we can find a better way.

We're going to bottle that spirit and carry it forward for the next 25 years. With this as our North Star, we refined our vision and our mission. Our vision is clearer than ever. We create a world where diabetes demands less every day, everywhere. Diabetes is still daunting. It's a major cause of mortality and morbidity in the world. And if we can help people with diabetes feel just as normal as possible, diminishing the disease into the background, we will have done our job.

So I've been very fortunate because I've been involved in some companies that have incredible purpose and value. But really, what's unique here at Insulet is I can feel it, I can see it, it's personal and every Insulet employee I meet. So our mission, our mission embodies what we aspire to do on a daily basis. Whether that be our employees who've been here for 6 weeks, 6 months or 25 years. Our mission resonates where we've been and where we're committed to going. We are born of empathy and we are driven by ingenuity, and we are proven by science, and we transform the lives of people with diabetes.

Simply put, a little bit profound and a very humble calling. For this, this is what guides us every day to be where we need to be paying attention to, to serve more Podders all around the world, and it will guide our future. Because you see at Insulet, what guides us is empathy led science-driven innovation. Omnipod 5 is the most recent product of our commitment to ingenuity, impact and intimacy. It's the world's first tubeless wearable automated insulin delivery system. It's a 70-piece engineering marvel that puts the therapy and the sensors and the algorithm and the connectivity, all into a disposable patch, the size of an AirPod case and lets you control it with your phone.

It's simple enough that kids and seniors alike can handle it on their own. But above all, Omnipod 5 is a pod. It's the only pod-based automated insulin delivery in the U.S. Now the form factor is core to our origins, but now this is a smart connected device delivering medicine for Podders all around the world. Podders tell us all the time, it almost feels like I don't have diabetes anymore. Well, that's the goal. That's what Omnipod delivers, peace of mind, freedom from the constant worry that you are one oversight away from an emergency.

Our clinical data confirms this RADIANT and SECURE-T2D, our most recent flagship studies show proven outcomes, reduced A1c increased time and range, lower insulin usage, less hypoglycemia and improved quality of life. But the real magic achieves these results without making a person feel like a patient. So after Omnipod, Romy's [indiscernible] was able to sleep through the night and Garrett got his time back and Anna was able to be a kid again. In order for Romy and Garrett and Anna to become Podders, we needed to ensure that we made access as easy as possible.

At Insulet, we are fierce advocates for access and affordability. Innovation isn't just reserved for our technology. It's our ethos and it extends to every aspect of our business and one of the most innovative strategic decisions in our history, was to pioneer our pay-as-you-go pharmacy model. Where you see insulin pumps have historically been sold as a durable medical equipment, a channel, I'd say poorly suited for a pod.

So starting in 2015, we set out to create a better way. It took many years of concerted advocacy. But today, all of our U.S. powders pick up their Omnipod 5 prescriptions in the same place as their insulin. And the more than 47,000 pharmacies around the country. This channel makes it easy to start and to stay on therapy. There are no upfront costs no multi-thousand dollar barriers. Most patients, in fact, pay around $1 a day. And for many, the cost is zero.

We have coverage with more than 300 million lives in the United States and Omnipod was the first pump covered with Medicare Part D. We are taking this proven market development playbook and deploying it globally. To deliver Omnipod at scale across the world, we've had to rethink our supply chain from the ground up. For many years, pods were handmade and then they were later hand assembled.

With our growth and the demands of a device put on every 3 days, we will produce more than 7x more pods this year than we did 10 years ago. The solution has been relentless automation of every aspect of our business.

We've invested more than $1 billion to build one of the most advanced automated manufacturing systems in medtech, with proprietary solutions to produce a highly complex electromechanical device at medical standards and consumer electronic scale. For those of you here in person, you're going to be able to go check out our place in Acton. And you will see very similar to what you see in Acton, you'll see it in Malaysia. And we have created a scalable cost-efficient supply chain that delivers durable advantage rules both in quality, reliability and cost.

Our approach to access makes AID readily available and our approach to manufacturing meets ensures that we can meet all of the consumer demand. But it's the power of our Podders and the power of our brand that fuels our engine. Today, Omnipod is the most requested and most prescribed brand of automated insulin delivery in the U.S., and it is #1 in new customer starts, both in the U.S. as well as the EU. The demand -- this kind of demand has grown the Podder population for more than 600,000 strong.

But you know what distinguishes our brand is the trust that we've built and the loyalty that had is earned within the Podder community. And in turn, Podders, their passion and their engagement really infuse our brand and that helps us with relevance and authenticity and that drives deep personal connections which fuel our growth. Now let me show you how this has culminated in industry-leading performance results for our business.

To put it simply, we are not just the market leader, we are the market driver. Over the last 5 years, insulin has driven 66% of the global market growth. We have grown 26% in our revenue CAGR more than 3x the growth of any rate of any company in the market. We are the leader in new customer starts and from less than a 30% share in 2020, we are now approaching 50% global revenue share, and we're confident we can continue to lead. This proven performance gives us the confidence and a renewed ambition for what the future will be. There is so much more we can do even in the markets in which we already play.

In the U.S., our type 1 market, which is more than a $9 billion market, AID penetration is 40%, well lagging behind CGM penetration of 70%. In our OUS type 1 market, which is more than a $10 billion market, only 1 out of 4 people with diabetes is on AID therapy. Where CGM penetration is around 65%. And as you know, we are just getting started in the type 2 basal-bolus market in the United States, which is around a $12 billion market with less than 5% penetration.

Later in the day, you'll meet Carolyn Sleeth, our Head of the U.S., our largest market, and a Podder herself and she will walk you through our strategy to drive penetration in the U.S. type 1 market as well as all of the learning we've gotten to drive the type 2 market in the U.S., building on our remarkable strength built over 25 years of serving people with type 1.

And Eric Benjamin, I'm pleased to share our newly elevated Chief Operating Officer. He's going to share what our innovation road map is and how our strategy to grow, expand internationally and globalize insulin. Together, what you'll hear are our efforts to help more people with diabetes drive growth in the market to $9 billion by 2028. So in total, we see this as a $30 billion total addressable market with low AID penetration and a significant opportunity for us to grow. This market opportunity represents our ability to transform 8 million people with diabetes.

Now what you may not have line of sight to, which we have line of sight to, are an additional 9 million colleagues and people with diabetes that we have the opportunity to serve around the world. And that would double our total addressable market from 8 million to 17 million people with diabetes. So let's first take a look at outside the United States. Similar to the U.S., where we built on our strong foundation of type 1 when we entered with type 2, we have line of sight to take type 2 to the OUS market. This would add another 4 million people with diabetes that we could serve.

Now in the U.S., we will take our learnings and capabilities apply them to the type 2 basal-only community, which will allow us to serve another 3 million people with diabetes. And last, is Asia and the millions of people in Asia that have diabetes and are in need of care. There are more than 2 million people with type 1 diabetes. So in total, if you look at the 8 million people with diabetes and markets we already serve and you add another $9 million, and this doesn't include the people in Asia who have type 2 diabetes, we're still assessing that approach. You can see that this TAM gets larger.

Now clearly, this is not in our immediate 3-year road map. We have this on our longer-term road map. But when we look to the future, what gives us confidence is this remarkable opportunity and where we play overall in the unique landscape and how we plan to build on our competitive moats. So I'd like to take a moment to share where I believe we sit in the global marketplace. And what is I like to say, what's our unique piece of real estate. I see us at the nexus of 3 distinct industries and at the top of the game in each of these industries, the ones that create the most enduring value. We -- you could say they represent what we look like on their best day. Many of you are probably the most familiar with medtech.

Medtech is where engineering marvel meets technology, and it's about ingenuity. It's about smarter, less invasive devices and more personalized solutions. Health care, it's about impact. It's about getting after the biggest areas of unmet clinical need like diabetes and metabolic disorder, which are the leading causes of morbidity and mortality in the world. It's about being science-backed and evidence-driven, partnering with clinicians to advance the standard of care.

Now the last is consumer. We're all consumers. I can go into your cupboards and see what everybody is shopping and buying. Some call it consumer staples, some call it consumer health. This is about intimacy. This is about the power of brand and a lifetime partnership. Powerful brands in this space understand the daily habits and practices and rituals and they understand how to deliver superior performance that people can count on.

Because of this unique positioning, we hold in the marketplace, we need to ensure that we're masterful in all of these areas, in innovation and building evidence and working closely, with clinicians on how to advance the standard of care. So the latest science is reflected in clinical practice and cultivating brand love with superior connections with our Podders. And when we live into this, we will have built a beloved brand and business that will have enduring trust and when you have enduring trust, you have enduring value. And when you have enduring value, we will deliver above-market industry performance consistently.

Now let me take you a little bit inside the company and share what I believe is Insulet's secret sauce. To realize these massive opportunities, we are doubling down on what has differentiated Insulet and what makes us unique. We're investing to extend our leadership and enhance our ability to find a better way and really make sure that this culminates in 6 critical elements, again, I call the Insulet difference.

The first is around a purpose-driven team who's relentlessly determined to find a better way for people with diabetes. The second is innovation born of empathy with a strong legacy of disrupting transformative, disrupting the category and bringing transformative solutions. The third is a fierce commitment to eliminating barriers to care, deepening access in current markets and expanding globally. The fourth is superior science, health care professional partnerships, patient advocacy, using this advantage to shape guidelines and advance the standard of care for patients. Fifth, it's our beloved brand and commercial excellence. It's passionate Podders and health care professionals who've seen, heard and feel that they are absolutely intimate at every touch point on the latest science. Six, it's about our technical and manufacturing superiority. We design and deliver millions of engineering marvels with unmatched speed and quality.

I'd like to share more on the first 3 of these Insulet differences. And later today, you will hear from Eric Benjamin, our Chief Operating Officer; Dr. Trang Ly, our Chief Medical Officer; and Manoj Raghunandanan, our Chief Growth Officer. So let's start with our people. We have a unified team with a very strong sense of purpose with deep industry experience and functional expertise, this team is well aligned to Insulet's unique position with experiences in medtech, in health care and in consumer and is fully equipped with the skills and the capabilities needed to deliver on our vision and our ambition.

Beyond these leaders at every level and across every function, we are surrounded by our highly engaged employee community. Their experiences with diabetes care foster the empathy that fuels the search for a better way. While I am incredibly proud to represent the people at Insulet, I'm even more excited about what we are collectively going to create for the future.

As I said earlier, this is where the innovation comes in, take a deep breath, get ready. We haven't talked about innovation in our pipeline in a while. So as I said earlier, each generation of our technology has marked a true breakthrough in making life with diabetes a little more normal and bringing Omnipod to even more people around the world.

What's coming next delivers on that same high bar, but we're moving a little faster now. So starting in 2026, another big step forward for Omnipod 5. First, we're adding a lower target and extending Podder's time and automation operation intended to enhance time and range and usability. And then in the first half of 2026, Omnipod 5 will connect with all of the major CGMs, yes, we will be launching with Libre 3 Plus.

And then we will be bringing a new data platform called Discover, you can see it next door that will really provide actionable insights to both health care professionals as well as our Podders.

In 2027, I'm pleased to announce that we will be launching Omnipod 6. The next-generation hybrid closed loop for type 1 and type 2 with an improved adaptive algorithm that makes the pod even easier to use. We anticipate Omnipod 6 will significantly expand our market, both in type 1 as well as type 2. And then in 2028, we need like the drum roll, pa rum pum pum pum. Okay, we are pleased to launch a new revolutionary fully closed loop system for people with Type 2.

Our fully closed loop marks a step change in simplicity, in ease of use, a fully automated system that is ready to use out of the box. This technology will greatly reach greatly expand our reach with both the endocrinology community and also importantly, the primary care physician community and unlock that much larger share of the $12 billion type 2 market that I shared earlier.

Omnipod 6 and our fully closed loop offering, they reflect our vision of patient-centric innovation and an innovation that's designed to deliver a better way, better outcomes, better quality of life and better availability. Eric, who has been working on product for 10-plus years, is going to share with you our pipeline through 2028 and a little bit beyond.

As I mentioned at Insulet, we have a fierce commitment to eliminating barriers to care not just in the United States but around the world. And as the leader in AID, it's our responsibility to grow the market to get those colleagues from MDI on to AID. We're doubling down to where we're strong in markets which have large patient populations of people with diabetes. They have attractive access and attractive reimbursement while efficiently allowing other markets to draft off of their successful growth.

We will always take a disciplined approach to entering new markets. Across the board, we are committed to further investments in health economics, market access, public policy that will ensure that we're able to continue to fuel that category growth and allow more people with diabetes around the world to benefit from AID therapy and most importantly, the Omnipod brand.

Now I've had a chance to walk you through our core strategies, our innovation, our investments and what makes us unique. Now I'd like to share with you how this will culminate of what our business will look like over the next 3 years.

You've heard me talk about the opportunity to increase AID penetration and our $30 billion total addressable market. Over the next 3 years, we will drive AID penetration across all 3 markets in which we serve. This will help grow the market from $8 billion today from $6 billion today, rather, to $9 billion in 2028. And clearly, we intend to take more than our fair share.

We plan to grow our Podder base from a community to over 1 million. And could you imagine 1 million Podders for whom we have created a world where diabetes demands less every day, everywhere.

From a financial perspective, this will support an approximately 20% revenue CAGR over the next 3 years. And thanks to our scalable reoccurring revenue business model, we plan to deliver 100 basis points of annual operating margin expansion. Flavia Pease, our Chief Financial Officer, will take you through our financial algorithm in detail later in the day.

So let me close by taking you back to the big picture. There is a large underpenetrated TAM with significant runway to unlock additional growth for the AID markets, which is one of the fastest-growing categories in all of medtech. Insulet benefits from a very strong competitive moats across scalable manufacturing, strong brand loyalty, scientific rigor, innovative market access strategies and an experienced leadership team that you're going to meet today with a winning culture and I would say, creating an enviable leadership position in the marketplace.

Insulet has robust innovation with a multiyear platform. We have 3 new product launches slated for the next 3 years. These innovations will drive deeper penetration in our core markets and unlock that additional total addressable opportunity that I spoke about. We operate from a position of strength with a healthy balance sheet supported by strong, steady cash flow generation, it provides us with financial flexibility and resilience. And this enables us to fuel our innovation and to support our own growth.

We are strongly positioned to succeed and to execute this strategic plan, driving sustained top-tier performance, top-tier revenue growth, enhanced profitability and robust cash flow generation. We are backed by science. We are pioneered by empathy and inspired by our Podder community, and we are united by one belief. We will find a better way. That belief has brought us here, and it will guide us forward.

Now I am delighted to introduce a very special guest, a former colleague of mine a dedicated father, a division 1 all American athlete, a former C-suite executive with Starbucks, Sorry, Duncan, and a remarkable man who has lived with diabetes for over 28 years and has been a Podder for 17 of those years. I'm incredibly pleased and grateful to welcome Michael Conway.

Ashley, thank you for that wonderful introduction, and good morning. It's my pleasure to be here with you this morning to share my story of the impact that Insulet has had on my life. So the year was 1997, and everything was falling into place. I was 31 years old. I was a former athlete as Ashley said, I was a rising executive actually just a few weeks away from my first expat assignment in Brussels. I was married for 5 years, and we were looking forward to starting a family. I had so much to look forward to. However, something just wasn't right. And I didn't know what it was.

Looking back now, I had all the symptoms. I was thirsty. I was losing weight. And when I went to the doctor, the diagnosis was swift and it was clear, you have type 1 diabetes. My world came to a screeching halt. What does this mean? I had so many questions. Could I go on this international assignment, in fact, beyond that, what would my life be like? I had no idea. I remember like it was yesterday, I got back in the car. My wife was waiting for me, and I shared the diagnosis and we sat there in the parking lot, and we cried because we didn't know what the future would hold, where do we go from here.

Well, those first 10 years was all about figuring it out how to balance things, how to balance living my life while living with diabetes. While I'm glad to say I was able to get and go on that first international assignment, and I continue to grow and advance my career, which added more pressure and more complexity to my life in managing diabetes. But I also chose not to share broadly for fear the stigma would have in the workplace, and I just want it to be discrete. So what that meant was I had to sneak into the bathroom to dose myself insulin and to check my blood sugar.

And worse yet, there were times when I'd be in a business meeting much like this, and I didn't want to get up and walk out and so I didn't and you know that's not good either. So I had to balance meetings, travel, my health, fitness and now kids. It was a constant tension. And I have to say, I was barely getting by.

So when I return to the states after my second international assignment in Switzerland, my endocrinologist suggested once again, that I should consider a pump. And I was ready to tell her once again, no, that's not for me. But then she described something that was different, a new tubeless pump I felt like someone was finally starting to ask the question that I was asking myself, is there a better way? There has to be a better way.

This was transformational because it wasn't a pump. It was a pod. It sounded perfect and actually sounded like it was made just for me. It was simple to use. There were no needles at freedom from tube so that I could maintain my active life and also be discrete.

So I immediately signed up I transition to Omnipod, and 17 years later, I'm still a loyal user. Honestly, I can't imagine using anything else. This was transformation that I could feel in every part of my life. Diabetes start to feel a little bit smaller, and I could focus more on living my life.

So since starting Omnipod, my life and career just kept moving forward. I rose to the executive level, both at Johnson & Johnson, where I met Ashley and also at Starbucks. I lived in or had responsibility for international markets, almost the entire time with the last few years running international for Starbucks. Over that same time, Insulet just kept innovating. Now I'm using Omnipod 5 with Dexcom, and I've got even more freedom, fewer devices to deal with, more integration. Now I've got just the phone, my Apple Watch, managing my diabetes was even more simple, and I could even be more discrete.

And actually, I can spend more time looking at my colleagues, engaging with my family members and less time worrying about the devices and looking at the devices. So what once felt like a limitation became empowerment through technology. So here we are today. Amazingly, 28 years later since diagnosis I raised the son and a daughter who were both now young adults. I've maintained an active lifestyle. I've managed a global career. And most importantly, I'm proud to share that because of Omnipod and my own commitment to my health I have no complications typically expected with someone who had diabetes for nearly 3 decades. I attribute this to being blessed to live in an era of breakthrough technology and I have deep gratitude for the innovators who are driving change, which is why I'm here today.

So I would imagine by hearing the story, you would assume that I would have shared this many times before. But the fact is today is the first time I've shared the story. I have never shared my story outside with my family members and close friends and certainly not in any environment as public as this. However, I could not think of a better moment and opportunity to share my story with you, the investors. So you can hear how grateful I am for the impact that Insulet has had on my life.

I want to ensure that Insulet thrives because if they do, I do. Thank you very much. And now I'd like to introduce Eric Benjamin.

Michael, thank you for inspiring all of us at Insulet to find a better way. Good morning. I'm Eric Benjamin, Chief Operating Officer. I've had the privilege of being with Insulet for the last 10 years as we've repeatedly found a better way to make diabetes demand less. In 2015, when I joined, our product pipeline was empty, in part because we were still learning to manufacture third-generation Omnipod reliably and cost effectively. So we prioritized R&D investments in those areas.

In contrast to the Insulet that I joined, today, we have world-class innovation capabilities fueled by significant R&D investment. So it's with great pleasure that today, I get to tell you more about the exciting future of Omnipod and how our empathy led science-backed innovation continues to make lives easier, unlock growth, and extend leadership in automated insulin delivery.

As Ashley shared, 25 years ago, Insulet was a small team with a bold idea, to make insulin delivery tubeless and truly wearable. In 2003, we earned FDA clearance for the first generation Omnipod. In 2005, the second version launched commercially. Omnipod Eros launched in 2013, our third generation and the first that was ready for scale.

In 2018, we secured Medicare Part D coverage a breakthrough that made Omnipod more accessible than ever and a big step in transitioning to a purpose-built pay-as-you-go business model. Later in 2018, came Omnipod DASH, a leap in consumer-like usability and connectivity. 4 years later in 2022, Omnipod 5 became the first and only tubeless, wearable, automated insulin delivery system cleared by the Food and Drug Administration. As you saw from Ashley, Omnipod 5 is the device that people with diabetes have been waiting for to adopt AID, phone controlled, easy to use, affordable and AID that fits into life and delivers great clinical outcomes.

Omnipod 5 has accelerated category adoption, fueled market leadership, as people who would not otherwise have adopted technology, start on Omnipod from MDI. I recently heard about a physician who after 50 years of using MDI, finally tried Omnipod, telling us he never thought a pump was for him and didn't even realize a tubeless version was available.

Breakthroughs didn't stop with Omnipod 5. Last year, Omnipod 5 expanded the type 2 diabetes, opening an entirely new market. In parallel, we continue to improve Omnipod's CGM integration, smartphone connectivity and geographic availability, to bring technology to more people on more devices in more countries around the world. We've gone from disruptor to industry leader now focused on accelerating impactful innovation for customers including leveraging AI to write hundreds of thousands of lines of software.

25 years of continuous innovation and a global R&D community of more than 1,000 engineers and scientists has produced a strong intellectual property portfolio as we develop novel solutions to our customers' toughest problems and continuously improve our unique technology like automated cannula insertion, we protect these valuable inventions.

To date, Insulet has more than 700 patent applications pending and more than 900 active patents worldwide, covering a range of innovations, spanning design, data, connectivity and clinical functionality. This portfolio has allowed Insulet to defend its valuable technologies time and again and is an important moat around the Omnipod platform and the products that we're innovating today.

At Insulet, we innovate differently. We aspire to make technology so compelling that people with diabetes know instinctively that they want it and later tell others, it changed my life.

Last year, I was on vacation with my wife and 3 daughters. And my middle daughter, Madeline, made friends with another little girl in the pool. When the 2 girls got out, we learned they were both named Madeline. And the other Madeline wore Omnipod 5. My wife casually mentioned that I worked at Insulet, not saying what I did. And they spend the next 10 minutes enthusiastically telling us how Omnipod 5 had changed their lives. Parents slept through the night, Madeline confidently went to school. We ran over them twice more that weekend. And each time they were overflowing with gratitude that they felt compelled to share.

To make products that have this kind of impact on people, we are relentlessly focused on innovating to enhance clinical outcomes broaden availability and improved quality of life. These deceptively simple objectives guide every product and innovation decision that we make and compel us to tackle the most challenging design problems to deliver simpler, better products.

Omnipod 5 is the best example of how we do this. We compressed hundreds of thousands of lines of software for an AID system and CGM connectivity to fit on every disposable pod, thereby enabling a true wearable AID experience, just a pod and a sensor on the body. We put a SIM card in every controller, streamlining office visits for health care providers and creating a digital ecosystem that gives every customer access to the latest Omnipod 5 controller updates with just the push of a button.

We simplified the user experience, planning ahead to be ready for people living with type 2 diabetes. And we made the algorithm adaptable and unconnected to manual inputs so that everyone, even those cared for outside of experienced specialty diabetes clinics could experience consistent life-changing clinical benefits from Omnipod 5.

Together, these choices have given hundreds of thousands of Podders like Madeline, more freedom to swim, to dance and to go about their lives with more joy and less worry.

As a result, Omnipod 5 is the #1 AID system in new customer starts in the U.S. and in Europe. We have a first-mover advantage bringing the technology to those who live with type 2 diabetes. And we've grown our prescriber base to more than 27,000 clinicians in a market that has about 8,000 specialists. And the future is even brighter, with significant advancements coming in each of the next 3 years.

In 2026, Omnipod 5 gets better with AID improvements, Libre 3 Plus connectivity in our new data platform, Omnipod Discover. In 2027, we plan to launch Omnipod 6, a step change in tubeless, automated insulin delivery. And targeting launch in 2028 will deliver a fully closed-loop AID system for those living with type 2 diabetes, an AID system is so simple that we aspire for every prescriber of insulin to be able to offer the benefits of AID to their patients.

Together, these products are designed to make insulin therapy more effective, more accessible and more human and bring the benefits of Omnipod to hundreds of thousands more people. Starting with 2026, another big step for Omnipod 5 with smarter automation, broader accessibility and deeper insights. We're adding a 100-milligram per deciliter target glucose and extending users' time and automated operation. These changes are designed to offer customers better glycemic control, fewer device interactions and greater confidence. Second, full CGM integration. In the first half of 2026, Omnipod 5 will connect with all major CGMs, including Abbot's FreeStyle Libre 3 Plus. Offering sensor choice helps make Omnipod 5 more accessible to customers and it streamlines conversations between health care providers and patients when deciding to start Omnipod.

And third, we're introducing Omnipod Discover, a new data platform that gives customers and health care providers actionable insights. Discovery uses machine learning to identify trends, efficiently highlights ways for health care providers to optimize care and inform self-care for Omnipod 5 users. It also streamlines the process of starting on Omnipod to make that even easier. These enhancements make Omnipod 5 smarter, more available and make the entire diabetes management experience more connected, more human and more effective.

Then we take a giant step forward with Omnipod 6, another ingenious improvement designed for better, more personalized clinical outcomes, ease of use and connectivity. all delivered on a foundation for faster innovation. Omnipod 6 features an algorithm that learns from each user's unique insulin requirements, designed to deliver better performance and outcomes, especially for those who bolus less. It will also offer improved connectivity to support greater reliability and wear flexibility for users as CGMs get smaller. We're also introducing a new app and controller experience designed to make setup, training and daily use simpler and more intuitive than ever.

And finally, a new pod. One pod that works across all CGM systems and features, simplifying logistics for Insulet and prescriptions for health care providers and most importantly, is designed to allow us to push new innovation such as future CGM integrations directly to pods in the field. By eliminating manufacturing and channel stocking, we aspire to bring technology to customers as much as 6 to 9 months faster. And by further simplifying the process of prescribing Omnipod, we enable more prescribers to write AID. Development of Omnipod 6 is progressing quickly. We have fully enrolled STRIVE, the pivotal study for the algorithm and expect results and regulatory filing in 2026, paving the way for launch in 2027. Like Omnipod 5, Omnipod 6 will target indications for both type 1 and type 2 insulin-requiring diabetes.

Omnipod 6 not only strengthens our competitive position, it further simplifies the Omnipod experience, thereby expanding the AID market and accelerating the adoption of advanced technology. Omnipod 6 is a huge step forward for people living with type 1 and type 2 diabetes, but there is still more we can do to make the technology better, simpler and more accessible. Today, prescribing, training and managing insulin therapy remains complex and time-consuming. Even endocrinologists can find the process challenging. And for the many primary care physicians who manage approximately 70% of basal bolus type 2, can prevent them from prescribing AID altogether. Fully closed loop is the solution to unlock dramatic category expansion in type 2, but not just any fully closed loop system can do it.

Last year, I visited a busy primary care clinic in Nashville. An energetic PharmD was curious about Omnipod, and I was there for her second meeting with our team. In the first, she had seen the simple operation of the pod and was struck by the elegance of automatic cannula insertion and the wearable tubeless experience. And we were back that day to explain the process of prescribing and patient training so that she could get started offering Omnipod 5 in her clinic. She listened attentively, but then hesitated when she saw the pump order form that goes with a prescription and heard about patient training, unsure that her supervising primary care physician colleagues would sign off despite her readiness to provide ongoing care. Omnipod fully closed loop for type 2 solves these problems. It's designed to make AID accessible to virtually everyone. With an algorithm that adjusts intelligently in real time, there is no need for meal announcements, carb counting or manual input by users. Put it on, connect to CGM and live.

By eliminating all inputs to start the device, prescribing and managing AID is dramatically simplified for prescribers. And finally, we aim to enable customers to pick up a prescription or even start with a sample kit in an office and enjoy the benefits of automated insulin from the comfort of their own home on their own schedule. This improves the experience and dramatically reduces the commercial investment that we have to make to drive growth in this large market. We're moving at pace to make fully closed loop for type 2 a reality.

As you heard on our third quarter call, we've already completed enrollment for EVOLUTION 2, our safety and feasibility study, and we plan to start the pivotal study in 2026. We're targeting a regulatory submission in 2027 and launch in 2028. Our fully closed loop system for type 2 is designed to improve clinical outcomes and unlock access to AID for millions of people who have never considered AID as a treatment option. It will reduce the burden of managing type 2 diabetes and give patients and providers a therapy that's effective, empowering and fits in their lives and busy practices. While our initial focus will be the type 2 basal-bolus market, the simplicity of a system designed for primary care also enables us to target the type 2 basal market over time.

True to our ethos, we are relentlessly finding a better way for people living with type 2 diabetes. But wait, there's more. Beyond 2028, we continue solving the toughest problems to push the boundaries of what's possible in diabetes management by investing in next-generation platforms. During the planned period, we'll be investing in fully closed loop for type 1, leveraging the learning from our type 2 fully closed loop program. We expect the road to fully closed loop will be iterative with significant improvements delivered over time. We're also excited to be working on a new pod hardware platform. Both of these are investment areas over the next 3 years that we'll launch beyond 2028.

And finally, we are constantly listening to Podders and health care providers to deeply understand their daily frictions and have ongoing technology research targeted at the highest areas of unmet need, including higher insulin capacity, form factor improvements and longer wear. As always, we'll approach these challenges with empathy and ingenuity, always relentlessly seeking a better way.

So let me leave you with a few things. Insulet's approach to innovation is rooted in empathy, guided by customer intimacy and powered by ingenuity. We solve the hardest technology problems to deliver the best, simplest products. Second, with the launch of Omnipod 5 enhancements, Omnipod 6 and fully closed loop for type 2 diabetes, we expect to extend our leadership with the aim of improving outcomes, breaking down barriers to adoption and unlocking new segments of our total addressable market. And finally, we are already investing in next-generation platforms that will launch beyond 2028, including a fully closed loop for type 1 and a new pod hardware platform.

As Ashley reminded us this morning, Insulet was built on one simple belief. There has to be a better way. I'm partnering with our teams every day to make our ideas real, impactful, reliable and scalable so that everyone living with diabetes can benefit from Omnipod. I'm now pleased to welcome Dr. Trang Ly, who will explain how our science and outcomes are helping everyone indeed see that there has to be a better way. Thank you.

[Presentation]

Good morning, everyone. 9 years ago, at our last Investor Day, I shared a vision for AID. It was ambitious, but still in its infancy. And today, 3 years after Omnipod 5 launch, its impact is tangible, and we're continuing to push the boundaries of innovation.

Our Omnipod story is far from complete. As a pediatric endocrinologist, I've witnessed the transformative impact of our innovation in the lives of people with diabetes worldwide. And this morning, I'll present robust Omnipod 5 safety and efficacy data supporting our indications for both type 1 and type 2. And I'll also share how we're advancing the sites to unlock even greater possibilities. We're still early in the global AID adoption curve, and that represents a tremendous opportunity for growth and impact.

So let's start first with type 1 diabetes. Omnipod 5 has transformed treatment through simplicity, innovation and durable performance. the RADIANT study proved that more children and adults could have reached glycemic goals versus MDI. Here, you could see that everyone started the trial with an A1c above 8%. And not only does this signify a suboptimally managed group of patients, it also describes the majority of the 1 million people in the U.S. who are not using AID.

Patients were then randomized to either start Omnipod 5, shown here with the solid black line or stay on injections, shown here by the solid purple line. And at 3 months, patients on Omnipod 5 lowered their A1c to 7.2%, a level that was maintained through 6 months. Patients on MDI remained at 8% until 3 months when they switched to Omnipod 5 and also achieved a favorable reduction. And this improvement is significant. It reduces rates of diabetes complications and premature death.

And it supports an AID first approach in type 1. It's a proof that can overcome the clinician's resistance to recommending technology to a broad population. We also have data supporting how Omnipod 5 has redefined what's possible for managing type 2 diabetes. In our SECURE-T2D study, we enrolled insulin-dependent patients on MDI or basal insulin and then started them on Omnipod 5 for 3 months.

And importantly, we allowed continuation of their GLP-1. The results were overwhelmingly positive. The overall population reduced their A1c by 0.8%, which is remarkable. And even more so is the 2.1% reduction for patients whose baseline A1c was 9% or higher. And to underscore this significance a 2% reduction in A1c is equal to 3.5 years of extended life for a person with type 2 diabetes. And you may be wondering what about those on a GLP-1. Here, you can see that the results were similar where the patients were on a GLP-1 or not, which in practice means that people need both, both the GLP-1 and better insulin treatment. And it's not an either/or phenomenon. This A1c improvement, combined with improved timing range, reduction in insulin and minimal weight gain, are clearly positive results. These are not incremental improvements. They represent a seismic shift in diabetes care.

Beyond our clinical trials, our real well performance demonstrates excellent results for a broad range of patients. These data represents people whose baseline A1c range from 7% greater than 14%, and all were able to achieve levels lower than 8%. And this is not only redefined expectations to how diabetes can be managed, it also accelerated our algorithm innovation by giving us valuable real-world insights. And it enabled us to develop robust in silico methods with digital twins to precisely predict how algorithm changes will affect outcomes and reduce the burden of human trials, another unique strategic advantage.

At Insulet, we know what it takes to build the best algorithms for optimal performance. And with that, we're generating the evidence we need to unlock innovation and accelerate adoption. Right now, STRIVE, our pivotal study for Omnipod 6, is investigating the ability to enable patients to have even tighter glycemic control, and results will be shared at ADA next year. And the next major advancement for patients and for Insulet growth is a fully closed-loop system for people with type 2 diabetes, and we're pleased to report great progress on this front. We're in the middle of our feasibility studies, EVOLUTION 2 and simple use and new results will be shared at ATTD in March.

We're about to start EVOLUTION 3 shortly and expect to commence our pivotal trial in 2026. These studies will validate safety and efficacy for our next growth phase, shape clinical guidelines and inform payer policies. And we can't wait for this innovation to reach patients. With all of this evidence, I'm pleased to report a strong impact on clinical guidelines, but it did take us a while to get there. In 2021, the guidelines for using AID in diabetes care were weak. But since then, the generation of evidence from Insulet and others have resulted in the strong language we see today.

AID is now the preferred insulin delivery method in type 1 diabetes and the guidelines for type 2 are also stronger because of secure T2D. And we expect the language to be even further strengthened in 2026, clearly endorsing the safety and efficacy of AID for all people with diabetes. And as these guidelines evolve, Omnipod is ideally positioned for accelerated adoption as it remains the simplest product to start and onboard.

But today, there remains a shortfall in AID adoption for type 1, leaving too many patients at risk. So these recent claims data that came from the end of 2023 show that only 1 in 5 children and 1 in 4 adults are meeting glycemic goals of 7%. AID use is also not where we want it to be. The black lines show only 47% of children and 22% of adults use both CGM and pumps. So despite the availability of proven therapies like ours with grade A evidence, AID is still far from reaching the majority of patients. Disappointing certainly, but it's an opportunity that drives us because every day without AID is another day patients spend accumulating risk of complications.

And the story is even more alarming for people with type 2 diabetes. This is a large and underserved population and the outcomes are worsening. There's more than 30 million people with type 2 diabetes in the U.S. alone with 5.5 million on insulin. The latest U.S. National Health survey results show that people are being diagnosed younger with even more advanced disease. So despite there being more than $50 billion spent on diabetes medications, the outcomes for people with type 2 are not improving. What we also see in clinical practice is that A1c continues to rise as the disease progresses even if you're on a GLP-1. And these data from 23,000 real-world users of semaglutide showed that A1c trends increase over time despite maintenance of weight loss. And this presents a unique opportunity for Omnipod 5 to work in a complementary way with GLP-1 to positively impact glucose management.

With clear evidence that Omnipod 5 delivers superior outcomes for type 1 and type 2 diabetes, our efforts are focused on closing the gap between incredible data and clinical practice. With a goal to overcome clinical inertia, one of the biggest barriers we see is the bias that persists amongst clinicians. Many still believe that AID is only for highly engaged individuals or that multiple daily injections is good enough. And share of mind is another barrier that presents an opportunity to drive an understanding that it's the simplicity and efficacy of Omnipod 5 that makes it suitable for everyone living with diabetes.

I recently met an endocrinologist in suburban Chicago, and I asked her for her opinion on the use of pumps in type 2. And she told me that she would only consider it if patients were on multiple daily injections and they had renal failure. I nearly fell off my chair. It was just so shocking to me that she only saw AID as a late-stage therapy rather than a proven intervention that could prevent renal failure in the first place. And while I was able to broaden her awareness, it was a great reminder that we have to take HCPs on a journey using education, training and experiential learning to enable them to see the broad use and benefits of Omnipod.

And then the third barrier is in experience. Overcoming inertia won't come from data alone. Clinicians need to see tangible and repeated positive outcomes. And this is certainly an area where we shine. We can accelerate behavior change by making it easier for clinicians to start patients on AID and experience those results firsthand. And you heard Eric speak about how our innovation pipeline will do just that, significantly expanding the universe of Omnipod prescribers.

To close, Omnipod has an abundance of evidence supporting its use and the guidelines clearly endorse AID as first-line therapy for type 1 diabetes from diagnosis and should also be offered for type 2. And while real-world practice lags behind the data, that simply signals that there's also so much opportunity. We're continuing to invest in clinical evidence to validate our innovation as well as shape guidelines and change clinical practice. And I look forward to sharing our progress in the future.

I'd now like to welcome Michelle Nemeth and Rusty Segan to the stage. 9 years ago to describe AID, I shared the analogy of driving with cruise control. It was a good analogy, but looking back, it doesn't quite capture the burden of disease. And it's beyond my wildest streams to see where we are with Omnipod 5 today, and I'm so proud to welcome Michelle and Rusty to share their story.

[Presentation]

Good morning. Thank you, Trang, and really the entire Insulet family for having us. I'm Rusty. I'm a general surgeon. My bride, Michelle, she's a neonatologist. But today, we're here as Zoey and Phebe's mom and dad. The video you saw is who Zoey is now. It's her full of joy life, confident but to understand how transformational Omnipod 5 has been, you have to understand where we started.

In 2019, Zoey began losing weight, drinking constantly and becoming unusually tired and irritable. By late summer, she was bed wetting and confused. Then on September 18 came the call, I will never forget. Her blood glucose is over 600, you need to go to the ER now. As a physician, I knew exactly what that meant. Head started spinning, but as a mother, I thought my heart break immediately. The carefree life Zoey had lived was suddenly gone. type 1 diabetes will touch everything from a simple snack to play dates, friendships and her growing independents. A childhood sorry, that should have been spontaneous for now become a series of half tubes just to stay safe. And I feared for her future. What about her relationships, having children someday and most of all, her ability to live a joyful life with a full heart. The following 3 days in the hospital were painful and terrifying IVs, fingersticks, injections, endless instructions, calculations and lots of tears. But the truth is the hardest part began when we went home.

Life before Omnipod, that first year was brutal. Every meal was math and fear. Every night, we've set alarms to wake up multiple times just to make sure Zoey was safe. Michelle spent months sitting outside her school in her car outside of dance every play date, just to be ready to rush in for a shot or a rescue for sugar went low. As highly trained specialist physicians, we've both taken care of some of the sickest patients in the world. And yet with our own child, we felt helpless, overwhelmed and terrified.

Zoey was only 6 she just wanted to be like other kids, but diabetes is relentless. It never sleeps, it never pauses, really never lets you forget.

As doctors, we understood the physiology as parents we experienced the total heartbreak, the hundreds of decisions a day, the tears, the frustration the loneliness that we felt when she realized her life suddenly had rules and limits, no one else her age had to even think about. And yet even in the middle of all that, Zoey showed the incredible resilience. She asked for CGM just 2 months after diagnosis. A year later, she said, "Mom and dad, I think I'm ready for the pump." We let her lead, and that led us to Insulet an Omnipod. She wanted a pump, she could dance with, swim with, play with without tubing or fear of getting caught on anything.

DASH gave her, her first real breadth of freedom and at the age of 10 her very first sleep over. Then Omnipod 5 changed everything. It gave her independence, freedom and brought back the joyful spontaneity. It gave her confidence and it gave us, as parents peace.

As you saw in Zoey's video, Omnipod 5 gave her back the one thing every child deserves her childhood, it made diabetes for her and for us, it's smaller, a smaller part of life exactly as the Omnipod promise says. To everyone at Insulet, your work matters. The Omnipod 5 has proven to be reliable, a trustworthy partner and it's been life-changing. You've made our daughter feel safer, healthier and freer. You have proven as relentless as the disease you seek to cure.

With that, we can't thank you enough. So we thought it best to let Zoey have the final words, and I'll share them with you. Zoey, can you please stand up so everyone can see you in the back. I just had my sixth diaversary. Diabetes will always be part of my life, but it is part of -- taught me to appreciate my life. I cherish every childhood memory of fitting in because you never know when things can change.

Even though I've had diabetes for 6 years, I am healthy and happy. I have great friends. I'm in 12 dance classes and a family who loves me. Yes, I am a person with type 1 diabetes, but diabetes does not define me. Thank you very much.

All right. Good morning. My name is Manoj Raghunandanan. I'm the new Chief Growth Officer here at Insulet. And man, if I'm just being honest, I have to tell you, over just the couple of months that I've been here, it's stories like you just heard from the Segan family and from Michael Conway that have moved me from just being excited to join this organization to be inspired and motivated. For people like that, I'm all in, and I'm ready to go. I just wanted to tell you a little bit about where we're headed and what we're planning to do.

As Ashley mentioned, we've moved from being a disruptor in the category to now being the AID leader. And so as we establish this leadership position, we've also established the growth organization. And really, the growth organization is responsible for architecting the growth between where we are today that 20% CAGR that you saw over the next 3 years and beyond. I've had the privilege of bringing health solutions to people around the world for a few years now.

And I can tell you, I have never seen a combination of 3 things like this, differentiated technology, compelling clinical evidence and brand love. This combination is unique and it's an incredible foundation that's going to allow us to accelerate our growth. You saw the TAM charts. I noticed some people wanted to take pictures of those. They're good. But I want to let you know what is our framework here at Insulet to take advantage of that TAM in order to really have a true growth framework. So I'd like to share that with you.

It starts very simply with the foundation of what Insulet is and what it's been, incredible innovation, phenomenal science backing that innovation that allows us to be best in class. That will always be our foundation, and that's what Eric and Trang showed with you earlier.

Then on top of that, we have market development and market development is critically important here. You saw those low penetration numbers for AID. It's our responsibility as the leader in the category to grow that penetration. We have to grow that penetration and we will grow that penetration and we'll do it in a category redefining way.

The next part of our framework is demand generation. When you think about demand generation, this is us finding ways to take more than our fair share. Demand generation is everything, including the incredible sales force that Carolyn leads to what we do on the marketing front to all of our efforts with our HCPs and our KOLs and our leaders so that we can really show our science and demonstrate how we can grow share within the market.

Let me dive a little bit deeper into market development. And really, I want to just tell you a simple story. The reality is we have absolutely redefined the category as it pertains to market development in AID. You think about what we have done in the U.S., the pay-as-you-go model that you know, our sampling programs, our pharmacy access I know you know those things well. But what we've also done is taken this and globalized it. If you look in the U.K., we've been able to get the technology appraisal from NICE, which is the National Institute of Health and Care Excellence.

They've said that for people with diabetes, no less than 50% of them should be on AID therapy. What does that do? It expands the AID market in the U.K. But here's the message, penetration is not where it needs to be, and there's so much more that we can do. If you think about the U.S., Trang just showed you the guidelines that are in place. We need to pull those into standard of care. They're not yet, so that makes it critical for us to intensify our efforts in clinician education and the use of real-world evidence.

And when we look at new markets, as Ashley said, we'll be strategic and we'll be thoughtful about doing it, and we'll pick the right markets. for example, Saudi Arabia. The opportunity here is great. We know there's a large population. We know AID penetration is only at about 5%. And soon, we'll be launching Omnipod 5 as part of a national government tender, which will unlock scale. So that's the message. We have to create access and affordability. But the foundation of what we do in market development really comes down to our science.

First, with guidelines. We have to establish those guidelines. You've heard what we did on type 1. The guideline on type 2 diabetes from the ADA only came out in 2025. It's always good to have guidelines but we need standard of care to match those guidelines. And that's what we'll be working in market development. And we also use things strategically like health economics in order for us to prove that case.

Once you advance the guidelines, then we need to partner to change practice. This is about patient advocacy, it's about thoughtful physician engagement. It's about investing in education to really get the standard of care to change in markets around the world.

The good news is we're seeing progress. We're seeing these previous barriers to type 1 come down, and we've demonstrated over time that we can grow the market. Let's remember, we're not just the market leader we are the market driver and we are the ones who will grow this AID market. Now once we've grown that market, it's critically important for us to think about how can we win that market.

And when I think about how we can win the market, we have this incredible envelope this passport of credibility. It's our brand. When you have a great brand, it first is able to reach people in moments that matter. That's called relevance. Think about the stories you heard today. We're there in those moments that matter relevancy then it's resonance. It's about meeting people with a message that fits the moment that I'm in because we understand their insights better than anybody else.

From that, we're able to create connection. When you create connection time after time, you eventually get followership. I know you're all working hard, you're analysts but you're also consumers, too. There are brands that you care about. There are brands that you are loyal to. There are brands in which you will not buy any other. I ask you how do you think the Segan family feels about this brand? What do you think they tell other people about this brand. This is what's critical. But what I want to show you is we have a brand that not only is powerful in its own right, it stands out in the category.

Let's take a look at some of this data here. We do brand tracking studies on about a quarterly basis to understand from people in our category, how do they feel about our brand, how do they feel about other brands. We look at these customer surveys and we try to see where does Omnipod stand? Well, number one, we have the highest total consumer awareness among MDI users. And why is that important? Those MDI users are the ones outside of the AID market. If they know about our brand, they're more likely to think about our brand when it's time to make a switch. They're more likely to be with us.

Then when we ask people who are using a pump, how do you feel about your product? We have the highest rating for brand trust and love. This is how they feel about us. And we also track a Net Promoter Score. That means we have the highest Net Promoter Score amongst competitive brands. This tells us that now people that are not only using the pod are doing what, they're recommending this pod. And advocacy translates directly into more new customer starts, reinforcing the strength of our demand generation engine. Even our youngest Podders can be advocates.

I just want to tell you a brief story, there is a gentleman named Garrett, who works in radio. He had a young son, his young son had a friend over. And Garrett, as he usually did, because he was a type 1 diabetic, was taking 1 of his daily injections. He was putting in his daily injection, his son's friend came in the room and watched him and wondered what he was doing, and he looked at him a little bit like what are you doing? Before Garrett could even explain the young boy pulled up his shirt and he said, I have a pod, why don't you? Garrett said, "Well, listen, when a 5-year-old checks you like that, you have to kind of think about it." Garrett's now a loyal Podder, and he is one of our biggest advocates. That's what happens when you have a brand like ours. That's what happens when you have technology, science and innovation like Eric and Trang described.

Now listen, I love one-to-one recommendations. They're meaningful and they're powerful. But what's even more important is what we're able to do on a broader scale. Here, you get to see a community that is thriving and growing and influencing with engagement metrics that honestly are on par with best-in-class consumer brands. This online activity multiplies that effect that I just described. Think for a moment, year-to-date, video content across Omnipod social channels, 80 million times it's been viewed. Think about how unique we are in the category. Folks are out there, and I know some of you come on and are using a little hashtag retweets that happens from time to time.

Well, 2.4x more than any of our competitors. People are hashtagging Omnipod, Omnipod 5 and Podders. They are multiplying the effect that we have in the marketplace and more people know about our business. This level of engagement is not typical in medtech or health care. This is that consumer slice of our unique nexus that we own and it's the proof of emotional connection and cultural relevance of our brand.

Now you've seen these metrics, and you might just wonder what is it doing for my business? How is it helping you grow? Let me show you a few more numbers. This one is quite compelling. For people that go into a prescriber office, and they ask for a brand, 70% of the time they're asking for Omnipod. 7 out of 10 people that walk into an office and ask for a brand are asking for this brand. That directly ties to new customer starts. We also do a lot of DTC efforts in order to drive leads. You'll see quarter-over-quarter in the most current quarter Q3, this is. We saw a 50% increase in our leads.

Now we made some investments in order to make that happen, some strategic choices that we were able to do. But these leads, we monitor and we track them. We're actually using AI in order to make sure there are more quality leads, and we're driving down the cost per lead. But those leads get engagement and as they get engagement, we turn them into Podders, and we're always working in order to turn more leads and find more effective ways to turn them into their Podders.

So DTC directly growing leads, but I think perhaps most compelling statistic that there is for what we do DTC and what we do with marketing and our brand to HCPs, but more importantly to DTC in this instance is our impact on nontargeted HCP offices. Those leads I mentioned, 65% of them are coming from nontargeted offices. But the next one is my favorite. About 20% of NCS come from nontargeted HCP offices. What does that mean? That means that somebody heard about our brand, saw our brand, engage with our brand, felt trust with our brand, knew our brand, went into an office that's not currently prescribing and asked for it.

This has the impact of our sales force by going into offices that we're not in and now turning them into a prescribing office. So let's not be mistaken. We have the absolute power with this brand and with really measured and metric ways of DTC to grow our business.

But I want more. I think there is more. We talked about our brand as a tool for brand growth. In my experience, there's an opportunity for us to do more, and that's to turn it from a tool for brand growth to be more about brand love. I'd like to introduce you to Grant.

[Presentation]

That's Grant, receiving his first-ever Omnipod. It's not a PlayStation. It's not an Xbox. That young man is thinking about no more fingersticks, no more injections. That's brand love. For those of you who wonder what brand love does for Grant, imagine what that does for Grant's family, for his parents and for their advocacy. So I'd like to propose to you that we have an opportunity here to turn brand love into a further moat for this business. done well. We can do this. We're well on our way, and I'm convinced that we can do it moving forward.

Now listen, like any kind of good love, we don't want that to be one way. Brand love has to be both ways. And it's important that we show up every single day for our powders. The way in which we do that is by measuring the customer experience. And I will tell you in the growth office part of our mission is we are obsessed with improving the customer experience. We measure their experience all the way from the time they consider to the time that they're thriving.

But the unique benefit that we have here is our data. We have an extreme amount of data that allows us to really pay attention to what they're going through. We have 9 million engagements on our website globally, 250,000 unique HCP interactions. We have 1.7 customer care and product engagements. We have the data that we collect that's happening that's safely stored, responsibly used, we also have 96 million user days in our database.

So as we collect this data in a responsible way, we're able to turn it into a way in which we can better manage their experience Eric talked about how we are relentlessly focused on improving it and making it easier. That's not just our new products. That's improving their experience daily as well.

Let me show you a small example of how we do this. When there's a customer who's thriving, leading that full life with diabetes, we're able to use some of the data in a predictive analytics AI model. There's about 700 data points that we look at. They're on product, but we look at these data points because we think that they're good predictors.

We use an AI model that shows when somebody might be at risk of going off therapy or might be at risk of going off their Omnipod. And you can see from January, we've been working this algorithm and working these analytics and getting better and better and better. What we're able to do is figure out where are they in that journey, what are their tension points, what's the right way that they want to be communicated with. How can we responsibly use the data we have to reach out to them? I'm really excited to share with you that the team in the month of October was able to make sure that 1,000 people did not come off therapy. That's a pretty meaningful number for us.

And as we continue to get better at this, we'll continue to manage more people, keep them on their therapy, keep them healthy. But more importantly, as we think about what we can achieve, we get closer to that journey, and we can improve the experience every day.

Everything I've talked to you about is part of a larger demand generation flywheel. This is the way that we think about it. It includes things like uncovering insights. This is where we use our capabilities in the growth office of insights and analytics and marketing health economics, market access, but we start everything with insights. We develop those resonant campaigns.

We then activate an office and pull through, and Carolyn is going to tell you all about that in her amazing sales force. We manage the customer experience and then we learn and we refine and we learn and we refine and then we put it back into our insights. But what I also want you to know is that we do this in an incredibly responsible way. We metric and measure all aspects of our demand generation. Our CAC is our cost to acquire. We're always paying attention to our cost to acquire. We're optimizing this wherever we can. We're experimenting and learning so that we can get the cost of acquired to be as efficient as it possibly can be.

Then we look at our cost to serve through the customer experience. We look for efficient ways that we can manage this cost to serve down. And if we're able to do that well, then we're able to do what, manage down attrition, if we manage down attrition, we have great lifetime value. This too is a circle that we are always managing so that we can be as efficient and effective and impactful as we need to be, not only on the business but on the P&L. And this entire story is wrapped around an incredible category-leading brand.

So I'd like to leave you with this, really 3 messages. One is that we have industry-leading market development. That's critical in this category. We're the leader in this category. No one is going to grow if we don't grow the category. And so we need to grow that AID market, in order to take advantage of that TAM. We've proven that we can do it, and we're going to continue to do that.

Then there's this idea of demand generation. We have the brand strength. We have precision marketing, -- we now have the ability to use our data responsibly to stay part of that journey. And so that will allow us to win share and maintain customer lifetime value.

And finally, we will always focus on the customer experience, we're going to advance global capabilities here so we can create a repeatable and scalable growth engine. It will be more personalized over time and will absolutely increase our lifetime value over time. So what I want you to know is we're just getting started. There's so much more that we can do. As a growth office, we are confident in our ability to support our markets to deliver sustainable growth to bring long-term value for our shareholders, our customers and our community.

Listen, the opportunities here, they are extraordinary. The landscape for growth is there, and Insulet is clearly ready to lead the transformation of diabetes care globally.

So with that, I think you guys have earned a break. So I want to make sure we give that to you. It's going to be about 15 minutes. You can sit and send e-mails about all the incredible things you just heard about. That's fine. You can also go back into our experience center, if you want to follow up on that a bit, but you will hear some chimes when you need to return to your seat. But thank you for being with us, and thank you for your time.

[Break]

Good morning, and welcome back from the break. I'm Carolyn Sleeth and I lead our U.S. business. I'm pleased to introduce a member of our Podder community Zac Harman, who will share how Omnipod has transformed his experience of living with type 2 diabetes.

[Presentation]

Good morning. I want to talk to you about my journey with diabetes -- began in 1997 when I was diagnosed, like most people, as a musician, musicians are hardheaded. We don't listen. So I'm playing maybe over 150 shows a year. I'm playing in Europe, I'm playing in South America, I'm playing in Canada, I'm playing in Africa, I'm playing in India. I don't have time to plan food. I don't have time to plan, time to check and plus, I don't want to do it because you know what? I didn't feel bad. I felt okay. I'll go to the doctor. I'd have double-digit A1c but I didn't feel bad. They don't know what they're talking about. I'm fine. I'm playing music, I'm doing good, but it all came to an end in 2006 when my son was diagnosed with diabetes. That kind of changed things for me.

So I just needed to make sure that I made enough money. I can keep him with the best medical care. I have a wonderful wife and she was on top of everything and I could continue to play music, and I can do everything I wanted to do because once again, I didn't feel bad, but then that changed. I played a Blues Festival in Sarasota, Florida, and there were about 10,000 people in the audience, and I was wailing. And the next moment I found myself on my back. Passed out because I didn't have time to eat and my blood sugar dropped.

Well, the audience didn't know they thought, well, that's part of the show. But listen, it really was a wake-up call. So we move forward. I have my son is now in college. He's a second year pre-med unit. And he says to me, Dad, you ever thought about a pump. And I'm like, well, no, but I'll talk to my doctor about it. And that's when I found out about Omnipod. My doctor put me on Omnipod. I, for the first time, went to the doctor and my A1c was single digits.

And then as I continued my A1c kept going down, the last time I went, I was 6.5 man. I got to tell you, this is such a game changer. And you really have to understand that for people like me who have a lifestyle that we cannot plan to live and do all the things that a person with our condition should have to do, having Omnipod is everything. Thank you so much.

Thank you, Zac. That was really powerful. Like Zac, I also have diabetes. I've had type 1 for more than 30 years. And 2.5 years ago, I had never heard of Omnipod. My endocrinologist, though I see her regularly, she never told me about pod therapy. I was on a tubed pump, and I struggled to keep my A1c under 7%. But then a corporate recruiter called me and told me about Insulet and this job, and I made the switch to wearing pods, and I felt the night and day difference.

Diabetes started demanding less and life got easier. I now enjoy activities I had given up like swimming with my son. He's five. Last spring, he and I spent a full morning in the ocean in Hawaii playing, and I didn't have to worry about not getting the insulin I needed. It still surprises me that my endo wouldn't have mentioned other options besides my tubed pump.

My story is a very real, very personal example of clinical inertia. And this experience gives me the conviction, the passion to help others living with diabetes, not yet at their best life. And I believe that Insulet is creating a better way for me and for others. We have an immense opportunity in the United States to drive the penetration of the type 1 market and create the type 2 market.

In type 1, adoption of automated insulin delivery is still only around 40%. As Dr. Ly shared, the new clinical guidelines recommending AID for type 1 at diagnosis support broad technology adoption, but they are not enough on their own. So we are working to make AID standard of care in practice in type 1 and change how providers think about therapy.

Moving from you're fine on MDI to there's a better way to manage your diabetes. In type 2, we're building on our strong type 1 foundation as we create a new market. We have regulatory approval and proven outcomes for AID for this population. But this is a market we are developing. There's a different clinical context and patient journey. And only about 5% of people with type 2 diabetes who take basal-bolus insulin use AID today.

So our U.S. strategy is tailored to the two markets we serve, raising penetration in type 1 and creating the type 2 market with the playbook and platform already in place to do it. So where are we today? In the U.S., as the market leader, we are driving the growth of the AID category. We serve more than 385,000 customers in the U.S. And we are capturing over 65% of all new customer starts in the category.

Our U.S. business represents over 70% of Insulet's total revenue with strong and expanding margins. When patients are going on automated insulin delivery, they are coming to Omnipod. We have established ourselves as the #1 most requested and prescribed AID system in the U.S. and the leader in new customer starts since 2023.

As Ashley said, our products are available in more than 47,000 pharmacies. I pick up my Omnipod at my corner drugstore. Our reach extends far beyond endocrinologists. It demonstrates how simple effective technology and affordable pharmacy-based model expand access to care. Today, approximately 40% of people with -- with people with type 1 use AID. And over the next 3 years, we'll use 3 commercial levers to bring innovation to people with diabetes and help penetration reached more than 50% by 2028.

First, we are leveraging demand generation for AID, which raises awareness, brings people into the category and drives market growth. and Omnipod share.

Second, and I'll spend a little more time here on the next slide. We are strengthening our commercial excellence.

And third, we are creating a seamless user experience making getting and staying on Omnipod as easy and affordable as possible. As I said, I want to spend a couple of minutes here on how we are driving commercial excellence with a high-performing team. Now not only do we call on the endocrinologists, approximately 8,000 providers, but we also reached another 10,000 prescribers in primary care.

These are providers who see a lot of people living with diabetes. They're self-style, diabetologists, and they see both type 1 and type 2 in their practices. Endocrinology as a specialty is overwhelmed. There are simply too few medical doctors to care for all the people living with diabetes and metabolic disease in the United States. And many patients don't adhere to their treatment plans, leading to provider frustration and clinical inertia for both patients and providers. Primary care is even more time constrained.

The ones we call on no diabetes, they prescribe rapid-acting insulin and continuous glucose monitoring, but visits are short. They're curious about technology, but they need it to be simple and fit in their workflows. This means there are 2 different sales. In type 1, it's about category adoption and selling the benefits of Omnipod compared to daily injections and tube competitors. In type 2 it's about helping providers believe in AID for this population.

Our team has extraordinary passion and now we are marrying that passion with rigorous commercial execution. We have a prioritized list of sales targets, and we are driving reach and frequency to increase share of voice with high volume and high opportunity providers. We know frequency matters, especially for new riders that we're activating and those with significant volume.

Our people are a key advantage. We attract sales professionals who are results-oriented and motivated to grow a business. Some of our top territory managers come from adjacent health care sectors like dental or vision, people who understand technology sales to a health care provider and know how to sell in the office and support pull-through with patients.

And I will tell you in the office, the conversation has shifted. AID is no longer a choice. And HCP can't feel comfortable letting a person living with Type 1 continue to take multiple daily injections. Too many lows, too many highs. Omnipod 5, an affordable, predictable way to control blood sugar. It's in front of them. And we are leading those conversions and positioning Omnipod 5 as first-line therapy, which people can try with our affordable pay-as-you-go model.

Our team is out talking about real-world evidence that shows that when patients go on Omnipod using the right settings, they get higher than 80% time in range. And when providers see how effective Omnipod is in their patients, they become believers and we get the conversions.

Now let's talk about type 2. The opportunity is immense, and we are well positioned to shape the market. There are a lot of similarities in how type 1 and type 2 patients on multiple daily injections manage their diabetes. There are roughly 2.5 million people with type 2 diabetes in the U.S. taking multiple daily injections. And within that group, AID penetration is only around 5%. And that means 90% of patients who could benefit from AID, are still managing their diabetes manually.

Omnipod was the first AID system cleared for Type 2 in the United States. And critically, Omnipod is covered through Medicare Part D. It's a powerful access advantage. Our leadership is proven in the numbers. We've more than doubled our new customer starts in type 2 over the past 12 months. And we have built the largest Type 2 prescriber base in the category. We've learned a lot in the year that we've been on the market with type 2.

Despite similarities, type 2 has a different clinical context than type 1. Type 2 patients are more clinically complex, they're older with more core morbidities and there's often social stigma around their diagnosis. Their care is also far more fragmented. About 70% of basal bolus type 2 patients are managed primarily by primary care physicians, not endocrinologists.

Many PCPs have limited time and less exposure to pump technology. So familiarity with AID remains low. That's something we will change. Our opportunity is to make AID intuitive for PCPs to prescribe and to integrate it seamlessly into how diabetes is managed. For many people living with type 2 diabetes and their health care providers, insulin has historically been treated as an end of the line therapy.

Type 2 patients have often been living with diabetes for a while. When first diagnosed, they probably tried to manage it using diet and exercise. And physicians have likely spoken about insulin and taking shots almost as a threat. This is something you're going to have to do if you don't eat better. This is something you'll have to do if you don't get more exercise.

Our focus is to shift that narrative and help both patients and physicians to see AID as an opportunity for better care and a better life. We have an enormous opportunity in the type 2 basal bolus population. And we are building the commercial engine to help more than double penetration by 2028.

To win, we're accelerating growth through 3 commercial levers. First, we're driving demand and adoption and capitalizing on it with rigorous commercial execution. Second, we're delivering a best-in-class end-to-end user experience to build patient awareness, improve onboarding and enhance retention. And third, we're removing barriers and demonstrating Omnipod's clinical and economic value.

First, demand generation. When patients succeed on Omnipod, health care providers experience its power and begin to advocate. They speak on our behalf to their peers about the improvement in clinical outcomes their patients see and that it works for patients who weren't considered good candidates for tubed pumps.

Providers often tell us appreciatively that patients ask about Omnipod after seeing it on social media like what Manoj showed us earlier. Our DTC efforts foster patient interest in better managing their diabetes, saving physicians a difficult conversation and making it easier for them to prescribe. This demand generation helps activate new prescribers.

Because of the simplicity of Omnipod, we can bring the technology to those who have not prescribed insulin pumps historically. And we are teaching our team how to win in these sales calls. We pursue this opportunity with flawless commercial execution, driving deeper into the T2 call point. We've strengthened our competitive and clinical selling skills, so our reps can confidently engage a broader set of prescribers. As I mentioned earlier, not only do we have 100% coverage of endocrinologists but our sales team also reaches an additional 10,000 providers caring for people with diabetes.

And our overall reach through media and patient demand extends meaningfully beyond that, to primary care providers who write prescriptions for rapid-acting insulin. And we have invested to equip our teams with improved data access, enabling sharper targeting, we expanded our U.S. field team in 2025, and we are consistently expanding to support our growth ambitions, while optimizing revenue per rep and new customer starts per rep in a territory.

We watch these metrics closely, so we know when it's time to scale further. And we're making it easier for new patients to start on therapy because Omnipod is fully disposable. We can place active Omnipod samples in physician offices, allowing a patient to start therapy the same day they have an appointment. Only Omnipod can do this.

Let me tell you a quick story. One of our territory managers in South Boston told me about a physician that she'd been trying to connect with for a while, a doctor who had never prescribed Omnipod. When she brought Omnipod samples into his clinic last month, he asked to meet with her. Since then, he has put 3 new patients on Omnipod. One, a fairly elderly gentleman, another one, a patient without a smartphone, and another patient, he was actually just starting on basal insulin, but he felt Omnipod would be a good fit.

This alone highlights the diversity of our reach and the range of people who can benefit from Omnipod. As a result, we have seen type 2 experiences snowball. As providers see strong outcomes and how simple Omnipod is to use, they start prescribing it more broadly. Even for people they may have previously assumed wouldn't be comfortable using the technology. And as we scale in type 2, our focus is on creating and delivering a seamless user experience another lever that pulls patients in and keeps them on therapy. That begins with awareness, reinforced through direct-to-consumer engagement.

We are investing in capabilities to support patients as they learn about AID and advocate for themselves to try new technology. Once a patient chooses Omnipod, we've strengthened our onboarding and support systems to ensure a smooth start. And we've built up capabilities to accommodate virtual training for patients.

As Manoj said, we've developed an AI tool that helps us identify when patients are at higher risk of attrition, enabling us to deliver proactive support at these critical milestones. And we're continuing to make the Omnipod experience even more effortless and responsible.

We recently launched the U.S. Pod Takeback program, allowing Podders to recycle their used pods, extending our better way ethos to sustainability as well as diabetes care.

Third, market access, one of the most powerful levers for growth in the United States. Our efforts here have been deliberate and sustained. Omnipod delivers compelling value for the health care system, which has been key in driving our broad coverage in the U.S. Over 300 million lives covered across more than 200 payer plans. Our coverage has largely reduced payer requirements for prior authorization. But of those that still exist, we've implemented tools to simplify this process for both prescribers and patients.

This is driving strong prescriber engagement with approval rates of prior authorization now above 70%. We're broadening co-pay buydowns that make the first step simpler and more affordable, while our dedicated access teams support high-volume clinics through coverage and access challenges.

For payers, we helped lower the economic burden of diabetes care by improving outcomes and reducing costly acute events. Did you know a single severe hypoglycemia can cost as much as $13,000, and a diabetic ketoacidosis event can cost as much as $36,000. The annual cost of Omnipod is a fraction of these numbers.

For people living with diabetes, Omnipod meaningfully improves quality of life. When patients get on therapy, we see a dramatic reduction in diabetes distress and improvement in quality of life scores. That improvement makes Omnipod the preferred choice and keeps patients on therapy. And this retention is reflected in our continued growth in the pharmacy channel. It's proof that when patients succeed, payers see value.

These initiatives are on top of our existing structural advantages that make it easier for people to start on Omnipod than any other AID. The combination of our disposable product and our pay-as-you-go model remains a major differentiator, giving people the freedom to try Omnipod with ease.

To close, we have a large underpenetrated market in the U.S. in both type 1 and type 2 diabetes, and we are uniquely positioned to capture the opportunity. Our aspiration is clear, make AID the standard of care in practice across the full type 1 population and make Omnipod the standard of care for type 2. And our strategy is clear. We're driving growth through demand generation, commercial excellence, market access and development.

And with that, I'm pleased to welcome Eric back up here to tell you about our international market strategy. Thank you.

[Presentation]

I am back. You just heard from Carolyn, how our U.S. business is accelerating penetration in type 1 and creating the type 2 market. I'll now discuss how we're scaling that success globally to strengthen and expand our durable international growth engine. I first got to know our international markets in 2016. Our then distributor was beginning to launch Omnipod Classic into more countries in Europe.

I was responsible for our external supply chain, distribution and logistics at the time. I sat in a small conference room down the road in our Billerica headquarters getting a new higher forecast for France each week, watching new customer starts accelerate. And just staying ahead of back order as we expedited more starter kits and pods to meet rising demand.

France was the first market that showed us the true power of the pond. Omnipod took about 2/3 new customers start share against open-loop tube competitors. And we quickly became the market leader. It's been an instructive lead market for us ever since contributing insights that inform the design and development of Omnipod 5.

These days, I spend time in global markets garnering insights that inform go-to-market strategy around the world. inspiring work by health care providers south of London resembles work of community care providers outside New Orleans. While diabetes care in Hamburg informs what we do in Washington, D.C.

The needs of people with diabetes and their families are consistent around the world despite differing health care and reimbursement structures. And over the last 7 years, we've refined a proven playbook that marries local execution with the universal benefits of Omnipod to drive growth in global markets.

As you've seen from our recent results, the AID opportunity outside the U.S. is significant. Demand for a better way to manage type 1 diabetes is already widespread and over the long term, development of the international type 2 opportunity will significantly expand our addressable market.

Let's start with where we are today. AID adoption is expanding quickly in global markets, and Insulet is growing even faster. We have the privilege of serving more than 220,000 customers outside the U.S. Our international business spans 24 markets, 13 of which have Omnipod 5 and contributes approximately 30% of company revenue at attractive gross margins.

Since the launch of Omnipod 5, we are the #1 AID system for new to pump users in Europe and are rapidly taking share in each market where we launch. In the short time since we really established our direct presence 7 years ago, Insulet has become one of the most recognized names in diabetes care across Europe, Canada and Australia. That progress reflects disciplined execution, building capable local teams, engaging with clinicians and payers and establishing access.

Another key driver has been disrupting the capital sales model established by legacy tube systems. Most of our largest global markets benefit from the unique accessibility of our pay-as-you-go model, fully aligning customer benefits with payer costs.

We've invested in local evidence across European markets to engage key opinion leaders and demonstrate the value of Omnipod 5 and our foundation of strong evidence and broad access is powering adoption.

As Ashley shared, the international insulin delivery markets are large and AID is still underpenetrated at just 25% of people who live with type 1 diabetes. In the markets where we operate, there are approximately 4 million people living with type 1. But 80% of these are in Europe and about 20% are in Canada, Australia and the Middle East.

Penetration is low despite engaged payers and clinicians, mature health care systems and significant unmet need. Our focus is, therefore, to lead market growth through market development and win share through demand generation in our largest markets.

Beyond the plan period, we're beginning to develop the international type 2 market to bring the benefits of Omnipod to another 4 million people. Our success unlocking this opportunity in the U.S. and early conversations with key opinion leaders in major European markets, gives us confidence in our ability to unlock this opportunity over time.

Finally, there's significant unmet need in Asia, where we see future opportunities to reach another 2 million people living with type 1 and more living with type 2 over time. We have a long runway to drive profitable international growth. Our growth internationally is powered by a repeatable playbook built on our core competitive advantages. Our technology, form factor, proven clinical outcomes and pay-as-you-go model enable profitable market entry.

In our scalable, efficient global supply chain and service operations ensure that we can reliably serve markets around the world. Just like in the U.S., the Omnipod brand is quickly becoming a key driver in future competitive moat. When we enter a market with Omnipod 5, we quickly grow share of new customer starts. We achieved this through launching with strong market access that is both affordable and commensurate with the proven clinical value of Omnipod 5.

We then invest to strengthen local commercial excellence, adding sales, clinical trainers, access managers and medical teams while increasing reach with marketing to generate demand. Market development follows with investments in evidence and advocacy to broaden guidelines and expand coverage as we partner with key opinion leaders to lead the change in clinical practice locally.

Finally, we expand our lead through continuous innovation. This disciplined framework marries the global strength of Omnipod with local execution to deliver durable, profitable growth in every market. Europe is where we developed our playbook. We have direct presence in 4 of the 5 largest markets. Access is established and health systems are ready for technology. Investing in the EU 5 is therefore our focus and the largest driver of growth within the plan period driven by market-specific local execution.

We launched Omnipod 5 in the U.K. in summer of 2023 and are the clear market leader, taking the majority of new customer starts and recently securing the #1 position for total market share. Manoj described the expanded NICE guidelines and NHS England funding to broaden eligibility of AID.

We are investing commercially as our team pioneers more efficient group trainings and facilitates care optimization using Omnipod 5's unique cloud data to support NHS England and bringing AID to that expanded population. In France, we are rapidly taking share with Omnipod 5. Just a few weeks ago, we received reimbursement for Omnipod 5 with FreeStyle Libre 2, and we'll be launching this important unlock for the French market shortly.

We also advocated to remove criteria requiring high A1c before accessing Omnipod 5 and streamline the transition from MDI to AID, accelerating market growth in our leadership. In Germany, we're again following our proven playbook, investing commercially to support our recent Omnipod 5 G7 launch and the upcoming launch of Omnipod 5 with Libre 3 in 2026.

In 2026, we plan to enter Spain with Omnipod 5, launching with our unique pay-as-you-go model and a differentiated CGM of Choice offering. As 1 of the top 5 markets in Europe, Spain is an important future market and our entry reflects our priority of investing in the largest scalable opportunities. Europe is our core growth engine internationally. We know it well. And as a market leader, are making tailored investments to drive share growth and market expansion through commercial execution, demand generation and market development.

Beyond Europe, we plan to invest in Canada, Australia and the Middle East with particular focus on Saudi Arabia given the size of the opportunity. We launched Omnipod 5 in Canada and Australia just this year, and adoption has been stronger than anticipated. We're seeing significant increase in new customer starts and revenue as we expand access to Omnipod 5 and continue launching sensor integrations.

We entered the Middle East in 2022 with DASH. We now have direct presence in Saudi Arabia and the UAE, supported by regional distributor partners in other markets. We plan to launch Omnipod 5 in early 2026 and are already seeing signs of strong demand. I recently heard from Celia, a 12-year-old girl who moved to Saudi from the U.S. after using Omnipod 5 for 3 years. Omnipod 5 transformed her and her family's life and the thought of returning to injections made her as anxious as the move.

Her mom Nora is adamant that everyone living with diabetes should have access to Omnipod 5 and in just a few months, everyone in Saudi will. AID penetration in Saudi is low, approximately 5% and despite strong funding and a government focus on improving care for people living with diabetes. We're preparing to invest for scale impact driving penetration and share. These markets are just beginning to contribute as we execute our playbook for growth.

Disciplined investment in local commercial teams, demand generation and access expansion give us a clear path to scale another source of durable, diversified international growth as we improve the lives of nearly 1 million people with diabetes.

We're also beginning work to unlock the international type 2 AID market, which we expect to contribute to growth beyond 2028. Today, there is effectively no access to AID for the approximately 4 million people with basal bolus type 2 in our international markets.

Our initial target population will be the approximately 1.5 million people whose diabetes is higher risk, such as high A1c or early onset type 2. In 2026, we intend to file for a CE Mark to expand the label of Omnipod 5 for use in type 2. This will allow us to gather early clinical experience with key opinion leaders and establish real-world evidence in Europe.

Next, we'll expand that work, investing in health economic and outcomes data required for broad access. Longer term, our goal is to secure coverage in target countries and broaden our commercial focus to include type 2. People living with type 2 diabetes around the world deserve AID therapy. Unlocking the market provides an opportunity for us to build a profitable international growth engine for the next decade and improve millions of lives. Beyond the regions we serve today, Asia is our next target region, offering large markets for growth beyond 2028.

There are roughly 2 million people with type 1 diabetes in Asia and more living with type 2. This is a significant long-term opportunity for which we're laying the groundwork in type 1 diabetes now. With growing CGM use in an established access pathway, we see Japan as an attractive first market in Asia.

We are also evaluating several other large markets and timing for entry. We currently expect Japan to be our first launch in the region as part of our next phase of global growth. To close, we are establishing global leadership in large underpenetrated AID markets as Omnipod 5 drives record adoption and share gains, proving our ability to scale profitability.

Our proven playbook, launch with Access, invest commercially, broaden guidelines and coverage and deliver continuous innovation is delivering today and will sustain durable growth. We're building on our strength in Europe, accelerating commercial execution and focusing investment in the largest opportunities like EU 5 and Saudi Arabia.

And we're preparing to unlock the global type 2 market and enter Asia, extending leadership and fueling profitable growth for years to come.

With that, let me welcome Flavia to tie together what you've heard today and explain how it drives our financial growth algorithm. Thank you.

Well, thank you, Eric, and good morning, everyone.

I'm sure you're feeling as inspired as I am after hearing my colleagues walk through the strategic building blocks that have established Insulet as a market leader and how our continued innovation and execution will drive our future growth.

What I'll do now is connect that to the financial framework that sustains our purpose and creates value for shareholders. While I felt fortunate to support the Insulet team in my previous capacity as a Board member, when the opportunity presented itself for me to join the team, I jumped at it. This is a dream job for a CFO, a differentiated asset with a compelling mission and the opportunity to make a big impact in the lives of people with diabetes.

Since joining, I've seen firsthand how this team lives the Insulet mission every day, which makes it all the more important that we build on our success and run a disciplined, scalable business model. Our financial algorithm reflects our focus on profitably scaling Insulet to continue to bring freedom to millions of people with diabetes and to capitalize on our immense market opportunity.

With the launch of Omnipod 5, Insulet moved from a category disruptor to the clear leader in AID. Revenue has compounded at a 25% CAGR since 2021, reflecting strong new customer starts and durable retention, both here in the United States and internationally. During that same period, adjusted operating margins have expanded nearly 600 basis points and adjusted EPS has grown much faster than revenue.

We became cash flow positive in 2023 and have accelerated free cash flow generation ever since. Now let me tell you, this leadership position was not earned overnight. It is the product of decades of focused investment. Insulet has deployed nearly $2 billion into R&D to develop progressively easier to use and more effective devices. We pioneered our Pharmacy business with a pay-as-you-go model, which is a simpler and more convenient way for people to start therapy, afford therapy and stay on therapy.

And we have invested more than $1 billion into scaling and automating our manufacturing and supply chain infrastructure to more efficiently serve people with diabetes on a global scale. Over this time, we also cultivated a uniquely strong and engaged community with hundreds of thousands of Podders actively using our technology and being advocates for this treatment. That advocacy and engagement is a competitive moat, rooted in the positive experiences that the Podders live every day. Podders will always be our best spokespeople.

Collectively, these competitive advantages give us the confidence in the durability of our growth, our sustained market leadership and the return on the investments we are making today.

Our investments, our strategies and our execution, they all come together on our financial growth algorithm. As I mentioned earlier, this framework reflects our focus on driving profitable growth to create shareholder value. Through 2028, we forecast revenue will grow at a CAGR of approximately 20%, driven by the strategy to increase penetration in our core markets. We expect adjusted operating margin to expand by approximately 100 basis points per year as leverage and efficiency build throughout the P&L. And finally, we are forecasting adjusted EPS to grow faster than revenue at a CAGR of 25% plus with continued strong free cash flow generation.

Let me take you through our winning formula in more detail. Our financial framework, it benefits from operating in a very large and under-penetrated market with the adoption of AID still in its early innings. In the United States, we continue to grow share in type 1 through strong demand generation, ongoing innovation and a user experience that help us retain Podders for years.

We see our type 1 penetration growing from approximately 40% today to 50% to 55% by 2028 and our market share continuing to increase. In Type 2, we're investing in new products in education, evidence and access to unlock adoption in a population with significant unmet needs. At just about 5% penetration today in the United States, we expect our actions to more than double penetration by 2028, at which point we'll still be in the early stages of adoption.

With the launch of our Fully Closed Loop System for Type 2, the long-term growth potential is substantial. And finally, in our third market, Type 1 international, we are deepening penetration where we already operate and entering new attractive markets with our repeatable playbook, as you heard from Eric. We expect penetration rates to increase from approximately 25% today to 30% to 35% by 2028, again, with significant market share gains. So across these 3 segments, we expect overall penetration to increase from 20% to 25% today to 30% to 35% over the next 3 years, further expanding the user base from about 600,000 Podders to over 1 million by 2028.

But in addition to expanding AID penetration, innovation is also at the forefront of our growth strategy. During the next 3 years, we plan to invest over $1 billion in R&D, enabled by our teams here in Acton and in San Diego, who are developing the next-generation technologies to further advance treatment options. This ambitious investment will funnel more dollars towards products that improve outcomes, overcome barriers and create the next markets in diabetes.

As you heard today, our TAM includes millions of people globally who could really benefit from AID, and we today only serve a small portion of that population. Our next-generation products, Omnipod 6 and our Fully Closed Loop for Type 2 will significantly expand both the number of people with diabetes we can serve and the number of physicians who are comfortable prescribing AID.

Over the next 3 years and beyond, we expect our investments to drive meaningful innovation and continue to make AID accessible to a much larger segment of the diabetes population. We are also augmenting our capabilities in how we can drive revenue, scale demand and increase profitably. Manoj mentioned that our focus is on sustaining growth by investing thoughtfully in market development and demand generation. So starting in market development, we're investing in building our capabilities to improve access globally and to ensure that more prescribers understand how our technology can help their patients.

We are confident that these efforts will help unlock an even greater portion of the TAM in the existing markets we are today and then also open up new markets.

Our investments in demand generation are optimizing how we reach and convert new customers, reducing customer acquisition and service costs through more efficient targeting and on-boarding. Let me give you an example. We recently deployed AI support tools in our customer service operations, which enabled us to reduce our global cost per call by 35%, while maintaining very high customer satisfaction and Net Promoter Scores.

These initiatives are focused on strengthening engagement and retention, which then translate into greater loyalty and higher lifetime value across our user base. In addition, we're also focusing on driving efficiency in our G&A functions through leveraging our newly created global business services. We are committed to driving increased profitability through operational excellence, which enables us to expand our adjusted operating margin by approximately 100 basis points annually through 2028.

This is going to be driven by modest gross margin expansion, target commercial investments and optimize G&A. It will then translate in adjusted EPS CAGR of 25% plus, outpacing revenue as we drive SG&A leverage. As you saw in the video before I just came on stage, over the last 25 years, we made significant investments to scale and automate our manufacturing footprint, and we are not stopping.

We see capital investments increasing substantially during the next 3 years to support our future growth. Our U.S. manufacturing hub here in Acton will remain the center of our advanced automation initiatives. We're continuing to make investments in adding capacity, skilled talent with plans to further develop our state-of-the-art manufacturing capabilities. I hope you will take advantage of the tour and be able to see it firsthand. Our Malaysia facility that just opened last year is a 400,000 square foot factory, which adds geographic diversification and significant capacity. We are in the early innings of scaling that site, and we expect to continue to invest in the coming years with the introduction of additional lines. And as we have done before, we will continue to invest ahead of demand to ensure that we have sufficient capacity to support our continued growth.

With that, I'm pleased to share that we'll be adding a new facility in Costa Rica scheduled to come online in 2029. Alongside our site here in Acton as well as Malaysia, this is another key step in building a geographically balanced global manufacturing network. We have spent years perfecting our manufacturing processes and global supply chain network to enhance product quality and drive efficiency. We will continue to advance automation, ensuring that every pod we make meets our high standards of safety, performance and reliability.

Together, these capital investments are strengthening supply chain resilience, supporting margin expansion and enhancing our quality, ensuring that we continue to provide uninterrupted supply chain to our growing customer base.

Moving now to free cash flow, where we are operating from a position of strength with a healthy balance sheet, providing financial flexibility to fuel innovation and support our growth for years to come. Our strong free cash flow generation positions us to stay ahead of competition and capture incremental market share. In addition, we will evaluate selective inorganic opportunities with the potential to accelerate growth and enhance our current capabilities.

To conclude, I'm confident you will agree that we've laid out a compelling investment thesis today. As Trang mentioned, millions of people are still managing Type 1 and Type 2 diabetes with multiple daily injections. So we have a huge opportunity ahead of us. Our markets are large, expanding and still very under-penetrated. Our growth is driven by our powerful innovation engine that is constantly creating new products and capabilities.

Our technology, our supply chain, our market access model and our brand, they're all strong advantages built over decades of investments that are very, very hard to replicate. Together, they create a highly scalable global business model that converts top-tier growth into expanding profitability and strong sustainable cash flows that will fund the next phases of our journey.

As you heard throughout the day, our Ethos drives everything we do. There has to be a better way. It means we never stop improving and innovating. Our technology, our operations, our financial performance, we will continue to raise the bar and look for new ways to help people like Zoe and Michael and Zach live easier and healthier lives. We're really proud of what we have achieved to date, but we are even more excited about the future. Thank you for being with us today and for your continued interest in Insulet. In a moment, we'll open up for Q&A. Please remain seated while we just set up the stage. Thank you.

So we're now going to kick off our Q&A session. Before we get started, let me cover some ground rules, Matt. [Operator Instructions]. With that, now we can begin the Q&A.

Matt O'Brien, Piper Sandler. I'll ask both of them upfront. I would love to start with the guidance on the top line. When I do the math on the penetration rates you're expecting domestically, I'm getting like 20% growth roughly in the U.S. over the next several years. So maybe just deconstruct the growth rate because it seems like maybe you're saying U.S. is a little lower than 20%, OUS is a little higher? But again, just based on the math, it seems like it would actually be better than that.

And then the second question is, what are you assuming in terms of pricing competition? As we go over the next few years and just the confidence in your ability to kind of work these people as they're coming in.

Yes, Matt, thank you for the question. I'll start and then Flavia, you can add about guidance. What we've put forth is approximately 20% revenue CAGR for the next 3 years. And that really reflects, if you think that first chart that I put up there around the $30 billion TAM in the markets that we compete, really driving increased penetration in U.S. Type 1, what Carolyn talked about U.S. Type 2 and then OUS Type 1. We're not getting into the specific splits. We're not giving guidance on the U.S. or OUS.

But we really feel like we're going to take the competitive moat that we've built is what gives us confidence on innovation, globalization, access and affordability. What Manoj talked about, about market development and demand generation winning more than our fair share of market share. And then really what Flavia enunciated, which is our world-class supply chain, which is our moat, and we're going to continue to invest about $1 billion in R&D. So those are really our guiding philosophies, but I'll turn it to Flavia, if you want to add anything on guidance.

Sure. And as I said in the third quarter call, we wouldn't be issuing guidance for 2026 today. We'll wait until our fourth quarter and 2025 full year call in February. But I did say that we would be providing color, which we did. And I think as you look into 2026, you can assume that we will be at or better than the multiyear targets that we provided today.