Insulet Corp.

Second quarter revenue was $802 million, up 23.5% year over year on a reported basis and 22.7% on a constant currency basis. Adjusted gross margin was 72.9%, up 320 basis points year over year, and adjusted operating margin was 19.3%, up 140 basis points. Adjusted EPS was $1.66, up 41.5% from $1.17 in the prior year. U.S. Omnipod revenue grew 20% and international Omnipod revenue grew over 35% reported, or 33% constant currency. For full year 2026, Insulet now expects total company constant currency revenue growth of 20% to 22%, total Omnipod growth of 21% to 23%, U.S. Omnipod growth of 17% to 19%, and international Omnipod growth of 30% to 32%. For third quarter 2026, the company guided to total company revenue growth of 17.5% to 19.5%, Omnipod revenue growth of 18% to 20%, U.S. Omnipod growth of 14% to 16%, and international Omnipod growth of 28% to 30%. Management still expects about 100 basis points of operating margin expansion in 2026, adjusted EPS growth of at least 30%, and free cash flow to be down modestly from 2025 levels. The company ended the quarter with $535 million in cash and investments and $500 million available on its revolving credit facility, and year to date generated $145 million of free cash flow.

Ashley McEvoy said the quarter showed strong demand, profitability expansion and cash generation, but also revealed that Insulet needs to better serve type 2 customers in the first 90 days on therapy. She took accountability for not identifying the retention issue sooner and repeatedly framed it as an execution challenge rather than a structural market problem or a pricing/competition issue. Her tone was confident on the long-term type 2 opportunity, citing underpenetration, strong clinician interest, and new tools like Omnipod Discover and a fuller customer data platform to improve onboarding and retention.

Flavia Pease emphasized that operating leverage remained strong even as the company invested in R&D and SG&A. She cited adjusted gross margin of 72.9%, adjusted operating margin of 19.3%, adjusted EPS of $1.66, and net interest expense of $9.9 million, while noting a 19.8% adjusted tax rate. On cash, she said Insulet ended with $535 million in cash and investments, had the full $500 million revolver available, and generated $145 million of free cash flow year to date. She also explained the guidance cut was mainly due to continued type 2 retention/utilization trends, slower-than-expected NCS early in the year, and slightly lower pricing realization, while saying 2027 guidance is premature but preliminary expectations assume stable pricing, competitive entrants, and no benefit yet from the new retention actions.

Analysts focused heavily on what changed in type 2 since ADA, whether the issue is retention versus utilization, and what the 2027 assumptions imply for competition and pricing. Management said the issue emerged in Q2, is concentrated in the first 90 days, and is being addressed with more customer care, revised sales compensation, improved sampling, and Omnipod Discover; they said they do not see a structural market issue or a pricing/competition problem. On 2027, Flavia said the preliminary view assumes competition and stable pricing, but not improvement from the new actions, and that the midpoint implies growth consistent with a 12% exit rate, with a range from 9% to 14% depending on assumptions.