Q3 2024 Insulet Corp Earnings Call
Speaker Change: Good afternoon, ladies and gentlemen, and welcome to the Insulate Corporation third quarter 2024 earnings call. At this time, all participants are in a listen only mode. Later, we will conduct a question and answer session and instructions will follow at that time.
Speaker Change: If anyone should require assistance during the conference, please press star then zero on your touchtone phone.
Speaker Change: As a reminder, this conference call is being recorded. I would now like to turn the conference over to your host, Deborah Gordon, Vice President, Investor Relations.
Deborah Gordon: Thank you. Good afternoon and thank you for joining us for Insula's third quarter 2024 earnings call. With me today are Jim Hollingshead, President and Chief Executive Officer, Ana Marie Chadwick, Chief Financial Officer and Treasurer.
Deborah Gordon: Both the replay of this call and the press release discussing our third quarter results and 2024 guidance will be available on the Investor Relations section of our website.
Deborah Gordon: Also on our website is our supplemental earnings presentation. We encourage you to reference that document for a summary of key metrics and business updates.
Deborah Gordon: Before we begin, we remind you that certain statements made by insulates during the course of this call may be forward-looking and could materially differ from current expectations.
Deborah Gordon: Please refer to the cautionary statements in our SEC filings for a detailed explanation of the inherent limitations of such statements
Deborah Gordon: We'll also discuss non-gap financial measures with respect to our performance, namely adjusted EBITDA and constant currency revenue, which is revenue growth excluding the effect of foreign exchange.
Deborah Gordon: These measures align with what management uses as supplemental measures in assessing our operating performance from period to period, and we believe they are helpful for others as well.
Deborah Gordon: 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. With that, I'll turn the call over to Jim.
Jim Hollingshead: Thank you, Deb. Good afternoon and thank you for joining us. We delivered another strong quarter of financial results and achieved several outstanding milestones throughout our business.
Jim Hollingshead: I am proud of what our team accomplishes every day to create better health outcomes for our customers, set new standards in the management of diabetes, and drive success across our organization.
Jim Hollingshead: The robust momentum we saw in the first half of this year has carried into the back half, putting us on track to close out another impressive year and generate over $2 billion in full-year revenue for the first time in Insolite's history.
Jim Hollingshead: Near the end of August, we received FDA clearance for type 2 label expansion for Omnipod 5, which is a testament to the strength of our submission and powerful clinical data.
Jim Hollingshead: We are excited about our opportunity in the type 2 diabetes market and building upon our strong, established foundation for long-term growth.
Jim Hollingshead: In the third quarter, our global new customer starts grew sequentially and over prior year. This included sequential growth in the U.S. in both the Type 1 and Type 2 populations.
Jim Hollingshead: Internationally, our strong momentum also continued with stable sequential new customer starts, proof of the robust demand we are seeing for Omnipod 5, considering the typical seasonality that occurs during the slower summer months in our international markets.
Jim Hollingshead: Omnipod 5 is winning in every market in which it is offered, and Omnipod is now the number one insulin pump for new pump users in Europe.
Jim Hollingshead: We remain confident in our expectation of sequential and year-over-year new customer starts growth for both the U.S. and international in the fourth quarter.
Jim Hollingshead: We have a clear strategy focused on expanding the Omnipod 5 platform, driving growth in the U.S. in both Type 1 and Type 2, and accelerating international growth and expansion.
Jim Hollingshead: Our recent milestones are key indicators of the progress we continue to make and the momentum across our organization to achieve our strategic goals.
And this momentum is reflected in our strong financial results.
Jim Hollingshead: In Q3, we achieved our highest quarter of total revenue dollars driven by total Omnipod revenue growth of 26%, including U.S. growth of 23% and international growth of 35%.
Jim Hollingshead: and we continue to expand margins as we scale, execute, and drive efficiencies across our global business.
Speaker Change: Ana will take you through the financial details for the quarter and provide an update on guidance.
I will focus my remarks on three key areas.
Speaker Change: First, our Type 2 Label Expansion, the Market Opportunity, and our Commercialization Plans.
Speaker Change: Second, our cascade of innovation and how it supports our strategy to drive growth in both the U.S. and internationally. And third, our customer base and market leadership.
Speaker Change: Let me start with our recent type 2 label expansion, which makes Omnipod 5 the first and only AID system indicator for both type 1 and type 2 diabetes.
Speaker Change: Omnipot 5 continues to be the game-changing offer we thought it would be.
Speaker Change: And now we are bringing all the benefits to individuals with type 2 diabetes that we already deliver to those with type 1, namely unmatched form factor, ease of use, affordability, pay-as-you-go economics, and widespread access through the pharmacy channel.
Speaker Change: All of this together with CGM integration and compatibility with Android and iOS-based smartphones, and most importantly, all while delivering great clinical outcomes and quality of life.
Speaker Change: Omnipod 5's Type 2 Label Expansion further strengthens our growth trajectory.
Speaker Change: In fact, Type 2 users represented over 25% of our U.S. new customer starts in the third quarter as we drove ramping adoption during September.
Speaker Change: In the U.S., our Type 2 indication significantly expands the total addressable market for insulin by making Omnipod 5 commercially available to approximately 6 million people who live with insulin-requiring Type 2 diabetes.
Speaker Change: This market includes 2.5 million people who are insulin-intensive and on multiple daily injections.
Speaker Change: We estimate that market is less than 5% penetrated with the majority of current users using Omnipod.
Speaker Change: The other portion of the market includes over 3 million people that use insulin as a basal-only therapy every day.
Speaker Change: In order to continue expanding our reach to type 2 patients, we are well underway on an initiative to expand our sales force and commercial relationships to align with the immense opportunity at hand.
Speaker Change: We had begun the process of growing our team in anticipation of type two clearance earlier this year, and we continue to expand today.
Speaker Change: This strategy is consistent with our established U.S. commercial playbook, adding feet on the street to build on our existing relationships with endocrinology practices while also broadening our reach into high prescribing PCP practices.
Speaker Change: With this expansion, we expect to reach over 40% of the 2.5 million type 2 insulin-intensive population during 2025, and we will also be able to go deeper into PCP practices where we are already receiving great inbound interest.
Speaker Change: Additionally, we continue to complement our direct selling model with DTC.
Speaker Change: We expect our Type 2 label expansion will make our DTC efforts and awareness initiatives even more efficient.
Speaker Change: Historically, over 50% of our DTC leads are from individuals with type 2 diabetes. And now, we can get those customers quickly onto Omnipod 5.
Speaker Change: We are making all of these investments thoughtfully, and as our Q3 results demonstrate, we are committed to driving further margin expansion.
Speaker Change: Let me now discuss our cascade of innovation and how we continue to strengthen our market-leading position as we expand our Omnipod 5 platform. Last quarter, we announced the full market release of Omnipod 5 with Dexcom's G7 in the U.S. starting with specialty pharmacies and communicated that we would ramp G7-compatible pods broadly through retail pharmacy channels over the following months.
Speaker Change: This approach has proven to be very effective, and G7 customer starts have consistently met our targets.
Speaker Change: I'm happy to announce the G7 pods are now fully available in retail pharmacies in addition to customers also having the choice of specialty pharmacy, making it even easier to start on Omnipod 5.
Speaker Change: Adding to this cascade of innovation in the U.S., we are on track to launch Omnipod 5 integrated with Abbott's Freestyle Libre 2 Plus sensor by the end of the year.
Speaker Change: We are excited to provide customers expanding options as we have experienced great success in providing ART with a choice of sensors in the UK and the Netherlands with both Abbott and Dexcom CGM offerings.
Speaker Change: At the start of last week, we fully launched the Omnipod 5 iOS app in the U.S. in line with our plans and timing.
Speaker Change: Within hours of our app launch, we became the top downloaded medical app in the iOS app store.
Speaker Change: Integrated with G6, our app offers enhanced capabilities that are unique and huge time savers for plotters, such as a custom foods feature that makes mealtime simpler.
Early feedback has been extremely positive.
Speaker Change: We heard from one of our customers who told us quote being able to do daily activities and need to carry only my personal smartphone Is the smallest piece of normalcy and the biggest relief?
Speaker Change: I'm sitting here crying, just overwhelmed with how much that means. I haven't felt this normal in years, and it means so much."
Speaker Change: The iOS app is just one more advancement that allows our customers to enjoy simplicity, freedom, and healthier lives through our innovative technology.
Speaker Change: Internationally, we are making great progress with our recent launches of Omnipod 5 in France and the Netherlands, and although early, Omnipod 5 is starting to build a growing number of new users in both markets.
Speaker Change: We are on track to launch Omnipod 5 in additional countries starting in early 2025.
Speaker Change: We are also excited to expand our international offerings with additional sensor of choice, further launching Omnipod 5 integrated with Freestyle Libre 2 Plus and introducing the integration with G7 in the first half of 2025.
Speaker Change: Turning now to our customer base and market leadership. We continue to set the standard and be an industry leader with OmniBot 5.
Speaker Change: By the end of the third quarter, approximately 90% of our US customers were already using Omnipod 5, as were approximately 25% of our international customers.
Speaker Change: This is a testament to the power of Omnipod 5. It wins everywhere it goes.
Speaker Change: Our strategy remains focused on bringing people out of multiple daily injections onto Omnipod therapy.
Speaker Change: MDI users are our target market and present a large opportunity as we continue to rapidly increase our customer base and drive overall market expansion.
Speaker Change: Our growth in the third quarter was driven by increasing new customer starts from MDI.
Speaker Change: As a result, over 85% of our U.S. new customer starts came from people previously on MDI.
Speaker Change: We remain the clear market leader due to the highly differentiated nature of Omnipod.
Speaker Change: We have two decades of experience and investments that have led to our growing economies of scale. We have distinct and sustainable competitive advantages, including world-class manufacturing, which allows us to produce tens of millions of high-quality, safety-critical pods.
Speaker Change: Adding to our scale, during the quarter we celebrated the grand opening of our state-of-the-art Malaysian manufacturing facility, which provides further flexibility and strengthens our capabilities. Additionally, widespread access through the U.S. Pharmacy Channel is an important value proposition for our customers.
Speaker Change: This was a multi-year journey requiring significant investments to build the specific expertise and deep infrastructure we have today.
Speaker Change: We are proud that our time and investments have paid off, with nearly 100% of our pods now sold through the Pharmacy Channel, with the number of HCPs writing scripts for Omnipod 5 growing to over 22,000.
Speaker Change: We are excited about where we sit today and the significant growth catalyst that we expect to drive further long-term value creation.
Speaker Change: With that, I will turn the call over to Ana to walk you through our results and guidance.
Ana: Thank you, Jim, and good afternoon, everyone. Our global team continues to execute on our mission, and we delivered another quarter of strong financial results.
Third quarter results exceeded our expectations.
Ana: We achieved 25% revenue growth driven by total Omnipod growth of 26%.
Speaker Change: Our estimated global retention remained stable and utilization was slightly higher than prior year. As Jim mentioned, we grew both global and U.S. new customer starts sequentially.
Speaker Change: Foreign currency had a favorable impact on total company reported revenue of 30 basis points versus our guide.
Speaker Change: U.S. Omnipod growth was 23 percent, finishing near the high end of our guidance range driven by ongoing strong demand for Omnipod 5.
Speaker Change: Our U.S. revenue growth continues to be primarily driven by increased volume resulting from our success expanding our customer base. And the Omnibot 5 integration with G7 is quickly gaining momentum.
Speaker Change: We are excited about the opportunity that our Omnipod 5 type 2 label expansion brings to drive further growth in our business.
Speaker Change: We are seeing an uptick in type 2 new customer starts following the FDA clearance.
Speaker Change: which, given the nature of our annuity model, we expect to contribute meaningfully to revenue starting in 2025.
Lastly, U.S. utilization trends were consistent with the prior year.
Speaker Change: Turning to International, where our team delivered another impressive quarter and once again decisively exceeded our expectations.
Speaker Change: In Q3, we drove growth in all of our international markets.
Speaker Change: We achieved international Omnipod revenue growth of 35%, primarily fueled by continued strong demand for Omnipod 5.
Speaker Change: Last year's launches in the UK and Germany are driving growth in revenue and new customer starts.
Speaker Change: And while still early days, we are seeing increased demand for Omnipod 5 in France and the Netherlands, as well as for our recent integrations with Libre 2+.
Speaker Change: While volume is the largest contributor to revenue growth, international revenue also benefited from higher pricing as new and existing customers adopt Omnipod 5.
Speaker Change: International utilization trends remain slightly elevated versus the prior year due to higher initial Omnipod 5 orders similar to what we saw following the US Omnipod 5 launch.
Speaker Change: We remain well positioned for further growth with more Omnipod 5 launches starting in early 2025.
Speaker Change: On a reported basis, foreign currency was favorable 130 basis points over the prior year and 230 basis points versus our guide.
Speaker Change: Drug delivery revenue was 10 million dollars, which was above our guidance range due to an increase in orders from our partner.
Speaker Change: Gross margin was 69.3%, up 150 basis points, primarily driven by pricing benefits in both the US pharmacy channel and our international markets.
as well as ongoing improved manufacturing efficiencies.
Speaker Change: We continue to drive margin expansion as we scale and execute on our initiatives to drive operational excellence across our business.
Speaker Change: Operating margin of 16.2% and adjusted EBITDA of 23.2% both exceeded our expectations.
Speaker Change: driven by our strong revenue and gross margin performances as well as the operational leverage we are realizing throughout our business.
Speaker Change: From a tax perspective, last quarter, we discussed the release of a portion of our valuation allowance.
Speaker Change: In the third quarter, we released an additional $12 million, resulting in a non-cash tax benefit in the period.
which has been adjusted out for non-GAAP purposes.
Speaker Change: We anticipate releasing the remaining balance of $15 million in the fourth quarter.
Speaker Change: Turning to cash and liquidity, we ended the quarter with approximately $900 million in cash and the full $300 million available under our credit facility.
Speaker Change: Our commitment to drive margin expansion, profitable growth, and positive free cash flow is paying off, resulting in our ability to invest in our business and strengthen our overall financial profile.
Now, turning to our Outlook.
starting with our fourth quarter revenue.
Speaker Change: We expect total Omnipod revenue growth of 13-16% and total company growth of 12-15%.
Speaker Change: For U.S. Omnipot, we expect growth of 9 to 12%. As a reminder, in the fourth quarter of 2023, we benefited from two stocking dynamics totaling an estimated 30 to $40 million.
Speaker Change: On a normalized basis, underlying growth in the fourth quarter of 2024 is expected to be approximately 21% in the midpoint of the guidance range.
Speaker Change: For International Omnipot, we expect growth of 30 to 33 percent.
Speaker Change: On a reported basis, we now assume a favorable foreign currency impact of 100 basis points.
Speaker Change: Finally, we expect 4th quarter drug delivery revenue to be approximately $7-8 million.
Speaker Change: As a result of our fourth quarter revenue expectations, we now expect the following for the full year.
Speaker Change: We are once again raising our expectations for total Omnipod revenue growth to a range of 21 to 22 percent and total company revenue growth to a range of 20 to 21 percent.
Speaker Change: putting us over two billion dollars of total revenue for the year.
Speaker Change: For U.S. Omnipot, we are raising the low end of our revenue guidance range and now expect growth of 19 to 21%.
Speaker Change: For International Omnibud, we are raising our revenue growth expectations to a range of 25 to 27 percent.
Speaker Change: On a reported basis, we now assume a 100 basis point tailwind from foreign currency.
Speaker Change: Our outlook for our international business is strengthened by the success we are achieving with Omnipod 5.
Speaker Change: Lastly, for drug delivery, our outlook has improved and we now expect a smaller decline in the range of 5 to 10 percent.
Turning to 2024 Gross and Operating Margins.
Speaker Change: Given our strong performance to date and confidence in our outlook, we now expect gross margin to be approximately 69 percent.
Speaker Change: We also remain committed to driving further operating margin expansion as we continue to gain efficiencies across our organization and improve our operating leverage, even as we continue to heavily invest for the long-term profitable growth.
Speaker Change: As a result, we are once again raising Operating Margin Guidance another 50 basis points to approximately 14.5%.
in the closing.
Insulet continues to be the market leader.
Speaker Change: Our expanding profitability and free cash flow drive our ability to continue to invest in our many growth catalysts.
Speaker Change: Our cascade of innovation and market expansion strengthens our long runway for sustainable, profitable growth.
With that, Operator, please open the line for questions.
Speaker Change: Thank you. If you have a question at this time, please press the star then the one on your touchtone telephone. If your question has been answered or you wish to remove yourself from the queue, please press star one again.
Speaker Change: We are limiting each participant's question to one, however, please feel free to go back into the queue, and if time permits, we will be more than happy to take your follow-up questions at that time.
Speaker Change: Our first question comes from Travis Steed from Bank of America. Please go ahead, your line is open.
Speaker Change: Our next question comes from Robbie Marcus from J.P. Morgan. Please go ahead. Your line is open.
Speaker Change: Oh, great. Thanks for taking the questions. Congrats on a really nice third quarter.
My one question, this quarter Europe really stood out.
sizable beat you said it was number one
Speaker Change: and Pricing Help. So I just wanted to help clarify a few things. Is that number one?
Speaker Change: in just the countries you're selling in or is that number one overall in Europe, which would be really impressive. How do we think about the magnitude of new patient growth? And if you wanna throw US in there as well, happy to hear that. And how do we think about the benefit of price and how sustainable is that and how much more is to go in Europe? Thanks a lot.
Speaker Change: Thanks Ravi, thanks for the question and thanks for your congrats. The number one is in the markets we serve in Europe so that's what we're number one across and the reason we think that's impressive is because of course we don't have Omnipod 5 yet in all the markets we serve so in the countries where we're present internationally Omnipod 5 is the number one pump.
Speaker Change: and so we had a really strong quarter that way. The magnitude of the growth has been terrific. So, you know, UK and Germany continue strong. Netherlands and France are really just ramping.
Speaker Change: and we expect that to continue. So we're really pleased with the new customer starts growth in Europe.
Speaker Change: You had a second question on the US. I'm gonna turn to Ana, but maybe somebody can remind me what the second part of the US was.
Speaker Change: Yeah, maybe I'll touch on pricing and international. The way to think about it is markets where we've been...
Speaker Change: present with Omnipod 5 a little bit longer like the UK and Germany are getting to that anniversary time period. So just to remind you, where we've launched Omnipod 5, we've gone to those health ministries and they have given us a premium for that because they see the value.
Speaker Change: bump in a year-over-year variance, but new ones are going to be ramping up. So bottom line is we anticipate to see price accretion in the international markets as we move into 2025. Maybe the other part of the question?
was just on magnitude of new patient growth.
Oh.
Speaker Change: Yeah, so new patient growth in Europe was stable in the quarter, which was terrific because we would normally see
Speaker Change: some cyclicality, some, you know, some seasonality in the summer months in Europe. So stable, really strong new customer starts with France, in particular, just beginning to ramp. So we were pleased with that.
Speaker Change: and then in the U.S. we had really good new customer starts, strong, clear and strong sequential growth in the U.S. in both type 1 and type 2 with leading the way with MDI.
Speaker Change: Our next question comes from Jeff Johnson from Baird. Please go ahead, your line is open.
Jeff Johnson: Thank you, good afternoon. Look, I don't want to steal Larry's 2025 guidance question, so let me start with a higher-level question if I could. Jim, over the past year or two in the U.S., you know, I think we've been adding probably four to five points of T1 penetration each year and maybe half a point or a bit more of T2.
Jeff Johnson: When I look at your business, or maybe even more broadly, I guess, across the industry, when I think about manufacturers, when I think about payers, when I think about HCPs,
Jeff Johnson: Is the bandwidth there that a T2 annual penetration moves to 2 or 3 points in a year or two? You know, does 4 to 5 points of T1, 2 to 3 of T2, does that equal 6, 7 points of penetration each year for the market? Or is that going to be something less because 1 plus 1 isn't 2 because there's...
Jeff Johnson: you know, I don't know, prior off headwinds, there's capacity constraints on manufacturing fronts, doctors only have so much chair time. Can the industry really handle kind of this this potential uptick in T2 and keep the T1 penetration going at the same pace it's been going here the last year or two? Thanks.
Speaker Change: Thanks Jeff that's that's a great question it's a little bit of a complicated question so let me just answer it from from our point of view and what we're doing.
Speaker Change: You know, we continue to lead and extend Type 1. We continue to drive MDI growth in Type 1. We're the very clear leaders. So we intend to continue to be the leader and extend our lead in the Type 1 market, which, of course, drives penetration because we're the player that's clearly leading in MDI and growing the market.
Speaker Change: On the type 2 side, we see that as an additive opportunity.
Speaker Change: You know, the penetration in Type 2 is very low for AID in Type 2.
Speaker Change: and we saw a nice lift in September so we feel really good about our position there as the first and only player with an indication for use in AIG in the type 2 space. In terms of the penetration number, we can certainly grow both and we will grow both.
Speaker Change: The Type 2 will take some market development, but we're already seeing a lift.
Speaker Change: And we think over the next handful of years penetration can grow in type 2, 2x, or 3x over the span, maybe beyond. It's early days and so we'll be leading and developing that market and we'll continue to lead and develop both type 1 and type 2.
Speaker Change: Our next question comes from Travis Steed from Bank of America. Please go ahead. Your line is open.
Speaker Change: Hey, thanks for getting me back on. Not to steal Larry's thunder, but I know you're not going to guide on 2025 in this call, but I would like higher level like to think about kind of the opportunity you've got with new patient starts in 2025 with type 2. Just kind of all the puts and takes on 25 that you're thinking at this point and one of your competitors talking about competitive dynamics would love to hear how you're thinking about the competitive landscape as you move into 25 as well. Thank you.
Speaker Change: Great, I'll start with the guidance and maybe Jim will jump in with some of this competitive dynamics but
We're really excited with with our growth prospects and where we're here positioned as we're coming to an end here in the fourth quarter.
Speaker Change: We're really excited with our growth prospects and where we're here positioned as we're coming to an end here in the fourth quarter. We are, as you indicated here, we're going to return to the industry standard of providing guidance as we get to the February marks.
Speaker Change: We are as you indicated here, we're going to return to the industry standard of providing guidance as we get to the February March of our annual cycles.
Speaker Change: And at that point, we'll be able to provide the best and most complete picture, but just to give you some color at.
Thank you.
Speaker Change: And at that point, we'll be able to provide the best and most complete picture. But just to give you some color, and I'll start here with revenue, which is what drives our entire P&L here. You're very well aware of the cascade of innovations, really in the U.S., they really launched here in the second half. And that's where you've seen the sequential new customer starts up, taking those types of things. As you know, we're in the annuity model, so most of that revenue growth will come as we
Speaker Change: And I'll start here with revenue, which is what drives our entire P&L here.
Speaker Change: You're very well aware of the Cascade of innovation is really in the U S. State really launched here in the second half and Thats, where <unk> seen the sequential new customer start to uptick in those types of things as you know we are in the annuity model. So most of that revenue growth will come as we move into 2025 and then for the international.
Speaker Change: And then for the international markets, I started talking about some markets where we launched earlier will go through that anniversary cycle and new ones will start ramping. So again, those are the key dynamics I touched already on a little bit of price in the international markets where we're going to see greater strength. In the U.S., we believe the majority of our growth will come from the base customer start that we're growing right now as we grow our NCS. So again, we feel very well positioned and we'll provide you a lot more color as we move into February.
Speaker Change: I started talking about some markets.
Where we launched earlier, we'll go through that anniversary cycle on new ones will start ramping. So again those are the key dynamics I touched already on a little bit of price in the international markets, where we're going to see.
Speaker Change: Greater strength in the U S. We believe the majority of our growth will come from the base customers start.
That we're growing right now as we grew our NCS. So again, we feel very well positioned and will provide you a lot more color as we move into February.
Speaker Change: Yeah. Thanks, Thanks, Ann I'll, just chime in on the competitive dynamic Travis.
Speaker Change: Yeah, thanks. I'll just chime in on the competitive dynamic, Travis. You know, we do have one competitor that comments a lot on the competitive dynamics on the market, and I'll just say, here's what we know.
Speaker Change: We do have one competitor that comment a lot on the on the competitive dynamics in the market and I will just say here's what we know.
Speaker Change: <unk> industry, leading retention remains very high and stable.
We have industry-leading retention that remains very high and stable.
Speaker Change: And with regard to that one kind of noisy competitor, we've actually two quarters in a row now seen an uptick of conversions coming from them onto Omnipod five so that's why we know.
Speaker Change: And with regard to that one kind of noisy competitor, we've actually, two quarters in a row now, seen an uptick of conversions coming from them onto Omnipod 5.
Speaker Change: So that's what we know. I would just remind everybody, and by the way, OmniPod 5 is so differentiated that we have continued to enjoy, ever since launch, competitive conversions coming onto the platform because patients find it easy to use. It has all the advantages we've talked about.
Speaker Change: I would just remind everybody by the way I mean, five five is so differentiated that we have continued to enjoy ever since launch competitive conversions coming onto the platform because patients find it easy to use it has all the advantages we've talked about but I'll just remind everybody that our focus is actually on driving growth in the market by focusing on bringing people who are on MDI multiple daily.
Speaker Change: But I'll just remind everybody that our focus is actually on driving growth in the market by focusing on bringing people who are on MDI, multiple daily injections, onto Omnipod 5 therapy.
Speaker Change: <unk> onto Omnipod five therapy, and we are the very clear leader in the MDI part of the market.
Speaker Change: Ever since we launched Omnipod five in August of 2022 every quarter, we have added more patients coming off of MDI onto AIG therapy with Omnipod five than all of our competitors combined.
Speaker Change: That dynamic continues very clearly today.
Speaker Change: Our next question comes from Michael <unk> from Wolfe Research. Please go ahead. Your line is open.
Speaker Change: Our next question comes from Michael Pollark from Wolf Research. Please go ahead, your line is open.
Speaker Change: Hey, good afternoon. Thank you I have a question on type two the commercial preparation there maybe it's a two parter one on the the field force investment can you quantify kind of.
Speaker Change: Hey, good afternoon. Thank you. I have a question on Type 2, the commercial preparation there. Maybe it's a two-parter. One, on the the field force investment, can you quantify kind of
Speaker Change: Cumulatively when you get through this cycle, how much you're expanding the rep base by that's.
Speaker Change: cumulatively when you get through this cycle how much you're expanding the rep base by that's
Speaker Change: Part one part two then is on the Doctor side I heard.
Speaker Change: Part 1. Part 2 then is on the doctor side. I heard in the U.S. 22,000 HDPs are prescribing Omnipod 5. I'm curious for like
Speaker Change: In the U S 22000.
Speaker Change: Hep's prescribing Omnipod five I'm curious for like.
Speaker Change: Type two do you have a sense for how many of those folks have ever written a dash script kind of just interested what the share of wallet opportunity might be for type two versus just getting those hcp's to REIT type two for the first time. Thank you so much.
Speaker Change: Type 2, do you have a sense for how many of those folks have ever written a dash script? Kind of just interested what the share of wallet opportunity might be for Type 2 versus just getting those HCPs to write Type 2 for the first time. Thank you so much.
Speaker Change: Thanks, Mike Great questions I don't want to get into actually quantifying in say head count or spend it's the spending as contemplated in our guidance and our margin guide.
Speaker Change: Thanks Mike, great questions. I don't want to get into actually quantifying and say headcount or spend. The spending is contemplated in our guide and in our in our margin guide. But let me frame and answer your question this way, which is
Speaker Change: But what I let.
Let me frame an answer your question this way, which is what we're doing is we are extending our current commercial model into more accounts and we've gotten a lot better in 2024 are targeting according to opportunity. So you know that most of our call point historically has been with endocrinology practices and what we're doing is taking our current commercial.
What we're doing is we are extending our current...
Speaker Change: commercial model into more accounts. And we've gotten a lot better during 2024 at targeting according to opportunity. So you know that most of our call point historically has been with endocrinology practices. And what we're doing is taking our current commercial model into extending that into also high writing PCP practices. And so maybe to put some scale on it, I would say.
Speaker Change: Model into extending that into also high writing PCP practices and so maybe to put some scale on I would say we think in our current call point, we reached roughly 30% or so of type two users who are on insulin intensive MDI type therapy, and as we extend into those high writing practice.
Speaker Change: We think in our current call point, we reach roughly 30% or so of type 2 users who are on insulin-intensive MDI-type therapy. And as we extend into those high-riding practices,
Speaker Change: We'll get to north of 40% of those type two MDI insulin using patients now we also will extend our current call point treat some basal only patients in that high rating PCP has a higher mix of basal only patients and so we will get some more of those patients as well, but that might give you a sense of the scale of the expansion here from from.
Speaker Change: We'll get to north of 40% of those type 2 MDI insulin using patients.
Speaker Change: Now, we also will extend, so, you know, our current call point treats some basal-only patients and that high-riding PCP has a higher mix of basal-only patients, and so we'll get to more of those patients as well. But that might give you a sense of the scale of the expansion here, from reaching about 30% of those type 2 intensive users to about 40% of those type 2 users.
Speaker Change: Reaching about 30% of those type two intensive users to about 40% of this type to users and then just as a reminder, we've actually expanded the sales force is very consistent thing for us to do to expand the sales force. So we've successfully done some expansion in 'twenty four and now we're planning to extend the same very robust commercial model.
Speaker Change: And then just as a reminder, we've actually expanded the Salesforce. It's a very consistent thing for us to do to expand the Salesforce. So we've successfully done some expansion in 24, and now we're planning to extend the same very robust commercial model in Q4 and into 25.
Speaker Change: In Q4 and into 'twenty five.
Speaker Change: Our next question comes from Danielle <unk> from UBS. Please go ahead. Your line is open.
Speaker Change: Our next question comes from Danielle Antalfi from UBS. Please go ahead, your line is open.
Speaker Change: Hey, good afternoon, guys. Thanks, so much for taking the question and congrats on a really strong quarter here.
Speaker Change: Just a quick question as we think about the Q4 guidance and how youre thinking about.
Speaker Change: The U S. Omnipod line items, specifically it does come in at the midpoint below consensus, but you just beat the consensus number. So just wanted to make sure we're <unk>.
Speaker Change: Considering everything and what is usually a seasonally stronger quarter from a deductible perspective to make sure I'm not missing anything there. Thanks, so much Greg.
Speaker Change: Great. Thanks, Danielle for your question absolutely correct.
Speaker Change: At the midpoint, our U S. Omnipod guidance is below consensus and it reflects I just want to remind everyone. It's a 21% growth on a normalized basis for the stocking activities that we saw a year ago.
Speaker Change: But at the high end of our guide.
Speaker Change: We are in line with the consensus falls within that line and and it reflects actually that U S. Omnipod will have grown more than 20% on each quarter of the 2024 calendar year.
Speaker Change: We see a lot of great traction and drivers.
Speaker Change: We see the trajectory and we're really well positioned here.
Speaker Change: Our guidance really reflects our best available information at the moment and that's that's what we're giving you all.
Speaker Change: No.
Speaker Change: Very excited and very well positioned to be a.
Speaker Change: At the midpoint of our full year guidance range at the 20% Mark for us.
Speaker Change: Our next question comes from Patrick Wood from Morgan Stanley. Please go ahead. Your line is open.
Danielle Antalfi: Perfect. Thank you so much yeah, just just one for me and apologize if you already hippest minerals is juggling a lot of calls today.
Danielle Antalfi: The type two side of things.
Speaker Change: Obviously label pledge you said that there was an improvement speaks through the quarter I'm. Just curious initial feedback from patients on a you got some experience in that market already but any learnings that surprised you that would inform our thinking about what the ramp up that curve could look like as you move into next year just yet.
Speaker Change: Feet on the ground.
Speaker Change: Are you feeling it and has there been anything that surprised you versus your previous expectations. Thanks.
Speaker Change: Thanks, Patrick Thanks, very much for the question.
Speaker Change: Did I would first I'll, just say I was so proud of our team because we didn't expect a label we didn't expect the clearance until later in Q4, and we got it with a months ago in Q3, and so I was really proud of our team's ability to pull together and get everything done that we needed to get done to launch with clearance and so that was terrific.
Speaker Change: And we did see a lift in September.
Speaker Change: From MDI in the MDI patients that are coming from type two so it was a nice lift on the type two side I think that what we've learned both in the month of September but also over the course of our Omnipod go pilot as we as we went into other practices and really tested that model out is that.
Speaker Change: First there are just a lot of type two patients out there in the world who are on insulin therapy that might be on a <unk> and they still struggle with glycemic control Theres still have any once he is out of control. So theres a lot of demand there and the secured CTD trial showed really clearly that those patients can benefit and the other thing we've learned is.
Speaker Change: Those practices, maybe so I would say high writing PCP practices that maybe have not prescribed pumps historically, they really have a keen interest to understand AI technology and they haven't even keener interest once they see omnipod because they have a preexisting.
Speaker Change: Conception that pumps are big.
Speaker Change: Hard to use tubes things with cannula needle and so on and when they see omnipod. They see how simple it is when we see that out in good already as we promote and we saw interestingly even with our investigators who took part in security Treaty that was one of the things that was really prominently mentioned by our investigation sites is how simple omnipod fiber.
Speaker Change: For them and for many of them how that was counter to their expectation. So those are pleasant surprises.
Speaker Change: And we're very very bullish on continuing to develop that market and drive growth given the need the clinical need for people, who are not controlled even though they might be on insulin <unk> already and given the interest the doctors are showing and the ease of use of Omnipod five.
Speaker Change: Our next question comes from Larry <unk> from Wells Fargo. Please go ahead. Your line is open.
Speaker Change: Good afternoon. Thanks for taking the question I guess, Jeff Jeff to Smart and I do have a follow up on the question Danielle.
Speaker Change: Asked earlier, but just different.
Speaker Change: <unk> here, so Jim the Q4 underlying U S. Omnipod growth as you said, it's about 21% which does imply.
Speaker Change: Deceleration from Q3, if we adjust for the stocking a.
Speaker Change: A year ago I think in Q3, so how should we think about the 21% underlying growth in the context of 2025 does the type two launch helped maintain or accelerate the U S. Omnipod growth off of the Q4 underlying growth. Thank you.
Yeah, I'll start with that one.
Speaker Change: So again growth over 20%.
Speaker Change: We're excited by that.
Speaker Change: The thing to remember is a lot of these mcs sequential and growth. We are experiencing also out of our type two.
Speaker Change: Given our annuity model, we're going to see more of that benefit as we progress through the quarters here into 2025 so.
Speaker Change: That would be the main driver here for our confidence in our excitement as we move forward and I don't know if theres, yes, I'll just add.
Speaker Change: As Arnaud said were.
Speaker Change: Our approach to this is to be very transparent with our with our best available estimates and that's that's what we're giving you we felt very confident in our guide and if I go back to the new customer start dynamic.
Speaker Change: Obviously, we had clear sequential new customer start growth in the U S. We just by the way we would have had even without the lift in type two so we had clear sequential growth and NCS in type one we had clear sequential growth in NCS in type two.
Speaker Change: And as we said in our prepared remarks, we expect to have and we said this last quarter, but as we said in our prepared remarks, we expect to have year over year growth for the second half in the U S. So the dynamic is really clear we're confident in our guide the type two growth gives us even more confidence in our guide for Q4, but as you all know with our annuity model that revenue ramp.
Speaker Change: <unk>.
Speaker Change: Into 'twenty five we'll create a ramping effect.
Speaker Change: Yeah.
Our next question comes from Margaret Kayser, Andrew from William Blair. Please go ahead. Your line is open.
Speaker Change: Hey, guys. Thanks for taking the question its actually Jimmy on for Margaret Tonight wanted to touch on operating margins really really strong performance here. This quarter. So maybe can you just talk with some of the points that are that are driving that leverage and then.
Speaker Change: As it relates to your confidence on sustained that into next year.
Speaker Change: Thank you Jamie for that great.
Speaker Change: Sure.
Very we have had delivered very strong margin growth and we feel very strongly that we will continue on as I've said before.
Speaker Change: We're benchmarking here to at least 100 basis points annually of that margin expansion. That's what we've said before and we continue to believe that.
Speaker Change: Some of the key components of that margin as you can tell here came from the gross margin expansion we have had.
Speaker Change: In addition, the scale that we have has.
Speaker Change: Loud us to get some leverage in the in the operating in the base of operating expenses as well. So as we continue to grow we anticipate growth in gross margin and I have also mentioned this before.
Speaker Change: Gross margin, we anticipate the growth to be more moderate as we move forward and the reason for that is we have benefited significantly in the U S from price appreciation as we have moved out of the <unk> into the pharmacy channel and now.
Speaker Change: As Jim mentioned in the prepared remarks, we're really at a 100% of our volume roughly.
Speaker Change: Coming in through the pharmacy channel, so that lift wont be there going forward, but we have many other levers.
Speaker Change: Around.
Speaker Change: <unk> fees around how we.
Speaker Change: Have the volume come from Malaysia, and a lot of other things and in the international markets. We do anticipate some price accretion so.
Speaker Change: Just to wrap it up here, we have benefits coming in from gross margin and in addition to that we have the leverage of our scale as as we leverage our operating expenses.
Speaker Change: Our next question comes from is he Kirby from Redburn Atlantic. Please go ahead. Your line is open.
Speaker Change: Hi, everyone. Thanks for taking my question I, just wanted to ask about the Batesville side of things. Obviously, you had a bit of a change in your strategy as snacks last quarter that so I just wanted to hear about what your.
Speaker Change: Seeing from patients and providers on the nasal side any sign that youre seeing patients who are on basal pops intensifying moving onto omnipod.
Speaker Change: And it's more available to them and then just on tight T. Mo broadly against any anything that moves around retention behavior for these patients.
Speaker Change: Thanks for those questions, let me start with the base oil side.
Speaker Change: We are already we know we already have a number of physicians out in the market who have been writing omnipod five for basal only patients off label before we got the indication for use in Omnipod. Five is just so simple to use and it's very very well suited to those patients for a number of reasons.
Speaker Change: And we will we will obviously promote to those patients the secured <unk> data showed really clearly that basal only patients benefited that population. That's studied population had about 20% of the patients in it for basal only patients and they have the same benefit as patients.
Speaker Change: So we're on multiple daily injections and so.
Speaker Change: We know it's a huge benefit to them and the question is who is out there thats on insulin therapy does not control thats really the target market and that would be both intensive users and basically users and as we extend our reach into those high writing PCP practices will find more and more of those patients. So we're bullish on both sides of the type two market on retention as it really good.
Speaker Change: <unk>.
Speaker Change: Our customer base does include a portion of type two patients are retention has remained strong it's mostly type one but our retention has remained very strong we do anticipate over time that what we'll see is a type two patients that have a lot going on in their lives. They have a lot of Comorbidities I think we will see different sub segments of type two patients and so in different parts of the type two.
Speaker Change: Population I think it's I think it's quite likely that we will see.
Speaker Change: Different usage patterns and maybe some lower retention in parts of the type two population, but all of those patients are incremental to our business first I would say so it's all it's all additional volume. In addition, additional patient growth for us and over time, we will be building more and more customized offerings for type two patients, which is something we'll be doing over the next next few months several.
Speaker Change: <unk> and really worked with the type two patients to make their experience on omnipod five just as simple as possible. So we can give them the same kind of market, leading retention on therapy and experience a therapy that we've given all of our patients historically.
Our next question comes from Mike Mike Kratky from Leerink Partners. Please go ahead. Your line is open.
Mike Kratky: Hi, everyone. Thanks for taking our questions can you provide some additional color on how much of a commercial impact you've seen either positive or negative from some of the CGM integrations that have transpired. This year, both within your own products or competitors getting a bit of a head start how meaningful of an impact would you say these integrations are having on <unk>.
Mike Kratky: New starts or your existing customer base or any commercial dynamics.
Speaker Change: Thanks, Mike I'll start with that and I don't know if anyone want to add some commentary our sensor integrations have been terrific for us and for our patients. So.
Speaker Change: So in the middle of the year in the U S. We launched our <unk> seven integration G. Seven obviously very highly prescribed sensor in the U S market.
Speaker Change: We were really successful with that through specialty pharmacy, and obviously are now fully in retail with a <unk>, 7% and that's been a really material part of our new customer starts we still start a lot of G. Six patients as well in the U S market. So providing choice of sensors has been a big boon to our patients and for and for us in our new customer start growth in Europe, obviously, we've we long.
Speaker Change: And in Europe, initially with the <unk> integration and then we most recently launched a sensor a choice integration in the UK and the Netherlands, and so so in those markets. The customer has a choice between the <unk> sensor in the Libre two plus sensor those markets, both growing really well in both of those both the libre and.
Speaker Change: The G. Six integrations have done very very well for us and we're very excited as we said in our prepared remarks to be bringing the libre two plus sensor integration by the end of the year to the U S. So we will have three sensors available to customers in the U S. And every time, we've launched a new sensor integration. It's been it's provides more choice to our customers, which.
Speaker Change: <unk> is obviously a benefit to them, but it's also giving us tailwind of growth.
Speaker Change: Maybe I'll just add.
Speaker Change: Perspective, with our most recent iOS.
Speaker Change: Launch here with.
Speaker Change: It applies right now in the U S. G six but I mean, the success that we're seeing with the amount of downloads as speed, how our customers are responding to.
Speaker Change: Two it and everything gives us even greater confidence that we will continue in that path to have more of those available through iOS.
Speaker Change: In the future. So I just wanted to add that commentary.
Speaker Change: Our next question comes from Jayson Bedford from Raymond James. Please go ahead. Your line is open.
Speaker Change: Good afternoon Paul.
Speaker Change: For the background noise. So I have a clarification and a question just a clarification.
Speaker Change: On the international strength, you mentioned, the slight uptick in utilization to be clear there was no stocking benefit to quantify this as just the natural occurrence when you launch Omnipod side.
Speaker Change: Clarification. The question is just on your user base in the context of the pricing of 90% of the U S. Users are on Omnipod, 525% in Europe, how high King of Europe European base go in terms of omni clubs five adoption.
Speaker Change: Great I'll take the first part here in terms of our international strength.
Speaker Change: The.
Speaker Change: Utilization uptick.
Speaker Change: We view that nothing to do with stocking. This is entirely to do with when you launch the new products similar to what we saw in the U S. Probably a little smaller degree but people just get maybe a couple two orders at once just to get some backups for for their usage later, so we're seeing some of that similar.
Speaker Change: In the international markets, where we've launched.
Speaker Change: Yes, Thanks, Jason I'll just on the on how high the usage of Omnipod five can go in our international markets I would expect to see a very similar dynamic in international markets.
Speaker Change: We've seen in the U S market, which is omnipod five becomes the idea of choice and including in our own customer base and so over time as we bring on <unk> hundred five across our international markets I think it will be by far the predominant use products in our portfolio.
Speaker Change: But it will there is a little bit we've talked about this before.
Speaker Change: In Europe people are on contracts and so even converting from in most markets even converting from dash onto Omnipod five we'll wait for the contract period to come up is usually a four year or four year reimbursement cycle for them.
Speaker Change: So we wont see a move as quickly but over time, we'll see omnipod five us are clearly leading offer in our portfolio in our international markets and as we said Omnipod five already just with the markets. We've launched in Europe is the number one the number one pump in Europe in the markets, we serve and so you can see the power of it we expect to.
Speaker Change: See really strong new customer starts as well as we get omnipod five rolled out internationally.
Speaker Change: Our next question comes from Matt Taylor from Jefferies. Please go ahead. Your line is open.
Matt Taylor: Hi, Thanks for taking the question.
Speaker Change: I guess I wanted to follow up on the type two it's very good.
Speaker Change: Adding staff.
Speaker Change: Your competitors put out some estimates with market research that they think the market could get to 25% penetration in the three to five year timeframe for intensive type two in the U S and I guess I was just wondering what your thoughts were on that do you agree with that number Directionally do you think thats been the ball.
Parks: Parks have you done any research to confirm that.
Speaker Change: Thanks, Matt It's a great question, we're very bullish on the type two we have such a great opportunity with type two and.
Speaker Change: We're the first to market with AIG and we're the first to market in only AIG and a market.
Speaker Change: With the product that overtook all of the players in the type one market and if anything I have I think we have a clear right to win in the type two market because omnipod <unk> has all of the benefits is so easy to use easy to setup available in pharmacy, where patients get their insulin.
Speaker Change: Z access pay as you go all the things we talked about all the time. So I think we have a very very clear right to win in the type two space.
Speaker Change: The security <unk> data is.
Really remarkable and so we're very bullish on it I think we said earlier in Q&A that over the next handful of years, we think penetration could double or triple in the type two space will be the player that does that is very clear that we are developing the market. We're the ones who lead the market right now we're number one in the market right now and we're very optimistic about growth in this.
Speaker Change: It's early days, we will see where we can take it but we think theres a big growth rate for us over the next few years in type two.
Speaker Change: Our next question comes from Matthew O'brien from Piper Sandler. Please go ahead. Your line is open.
Matthew O'brien: Afternoon. Thanks, so much for taking the question would love to talk about the pharmacy channel a little bit you've had a competitor on the durable side.
Matthew O'brien: And Thats basically the last few quarters, and then yesterday here.
Matthew O'brien: As your competitor also mentioned that they just got their first contract signed so.
Speaker Change: So can you just talk about your ability to defend your position in that channel and then more specifically on the pricing side to make sure because I know, they're going to question on the pricing side.
Matthew O'brien: Once they get bigger and bigger there.
Speaker Change: How do you defend your pricing within the pharmacy channel. Thank you.
Speaker Change: Great question. Thank you I'll just start by saying that we have a very strong position in the pharmacy channel and the reason we do is because omnipod fits the pharmacy channel. So while first as a product. The consumable is the pump. It comes in a box you get into the same place you get your insulin and we have part D reimbursement, which is the pharmacy bent.
Speaker Change: <unk> reimbursement so the product is the channel.
Speaker Change: And it meets all the needs the needs of all the stakeholders in the channel. So it's very easy for patients to use it's very easy for physicians to write because it's full pharmacy reimbursement. They can write a prescription often they can write a prescription and theyre down and sort of a dropdown menu. So that they can just send it to the local pharmacy.
Speaker Change: It's great for payers, because we have very high member satisfaction for payers, who for patients that are going on <unk> five and it's great for Pbms, because we do so much volume through the channel that are PVM partners get a lot of revenue off of our rebate money and so it's a great business system for us and for all of our stakeholders and we're very strongly positioned.
Speaker Change: As far as price goes those are those are negotiations renegotiate or PVM contracts every year, we're very used to it.
Speaker Change: There is a win win there for volume against rebates for US we have great relationships and this is a capability we have built up over several years relationships and contracts, we have many many contracts with pbms and.
Speaker Change: In the industry.
Speaker Change: A reminder to everybody we signed our first <unk> contract in 2016 I'm.
Speaker Change: Alright, let me correct that we started the process of negotiations in 2016, we signed our first contract in 2017. So we've had our contracts with Pbms now for more than seven years, we have a lot of experience in this space and we're very confident in our ability to defend our position.
Speaker Change: Our next question comes from Chris Pasquale from Nephron Research. Please go ahead. Your line is open.
Speaker Change: Thanks.
Speaker Change: Can you guys had mentioned some of the work Youre doing on fully closed loop algorithms. It seems like broadly theres a push across the industry right now to develop offerings that would do a better job, helping those patients who aren't quite as actively engaged with managing their own disease.
Speaker Change: Can you give us an update on where you work on that front stands how youre thinking about it is this a solution for a narrow segment of users or something that has broader applicability and then how close are you to having something that could be ready for commercial use.
Speaker Change: Yes, Thanks, Chris as you know we have we've talked publicly we've talked at Ada about.
Speaker Change: Two separate in parallel algorithm development program, but let me just start by saying something about our current algorithm.
Speaker Change: Omnipod five algorithm is a great algorithm it produces fantastic results.
Speaker Change: You can see from our real World evidence, which includes all of our users in effect that we see all corners of usage.
We have industry, leading time in range with very low hypoglycemia and so.
Speaker Change: Our current algorithm also responded really well to Miss bullishness and if so.
Speaker Change: When when Omnipod <unk>, Mr. <unk> will deliver a significant percentage of total daily insulin to bring the patient back into range. So our current algorithm performs really really well.
Speaker Change: At a population level and for all the individuals using it now having said that we have two programs working on different areas with different concepts.
Speaker Change: One of which I would say is closer to.
Speaker Change: A fully closed loop algorithm, but two both of them have been accelerated because of all the evidence we get off of actual patient usage. So even after the first 30000 patients on Omnipod, which was quarters ago, we were able to see patterns of usage that allowed us to do in silica simulation. So we use our data sciences and big data capabilities to stimulate.
Speaker Change: Adjustments to the algorithm and that's what's allowed us to get into early clinical trials with two different algorithm programs that we've shared some of that data over the course of the last year. So.
Speaker Change: So we see real opportunity to drive improved algorithms and.
Speaker Change: A couple of different approaches.
Speaker Change: And we're happy to be able to accelerate that program, but we also know we're delivering great glycemic control and outcomes in the market right now.
Speaker Change: Our next question comes from Joanne Wuensch from Citi. Please go ahead. Your line is open.
Joanne Wuensch: Oh, Thank you so much for taking the question.
Joanne Wuensch: I'm curious about a couple of things.
Joanne Wuensch: Where to start.
I think I'm, just going to start with the impact of integrating Libre int seven does that create sort of a step up opportunity for you in terms of.
Joanne Wuensch: New patients and can you confirm did you have positive new patient starts this quarter or is that more of a fourth quarter event.
Speaker Change: Year over year. Thanks.
Speaker Change: Thanks Joanne.
Speaker Change: Yes, the integrations with the sensor itself as they give us tailwind G. Seven has been obvious tailwind for us in the U S with our new customer starts and then the Libre two plus launches had been <unk> for us in the U K and in the Netherlands. So those are those are positive for us and as we bring the libre two plus integration to the U S. We think that will create.
Speaker Change: Other growth tailwind opportunity for us and then in terms of growth, we had really clear sequential growth in new customer starts in the U S. In <unk>.
Speaker Change: Both type one and type two MDI grew for both type one and type two.
Speaker Change: And we expect to see as we promised last quarter.
Speaker Change: We said all year, we would have sequential growth every year, we delivered that in Q3 and Q4 in the U S. We will see.
Speaker Change: Sequential growth there will also be year over year growth in new customer starts and collectively Q3 and Q4 in the U S. We expect very clearly to have year over year growth for the second half based upon that dynamic.
Speaker Change: Our next question comes from Matt Mcclintock.
Speaker Change: From Barclays. Please go ahead your line is open.
Speaker Change: Alright, thanks, so much for taking the question.
Speaker Change: So wanted to.
Speaker Change: You mentioned the retention rates.
Speaker Change: And obviously, leading in new patient starts I think.
Speaker Change: Jim you talked about overtaking the other players in the space with with this with your with your pump format.
Speaker Change: Can you talk a little bit about how you measure retention and how.
If at all.
Matt Taylor: Investors can kind of get a sense of how that's trending if it is just rock solid in the mid to upper ninety's or if it's if it moves around a bunch any color would be appreciated. Thanks sure. Thanks, Matt.
Speaker Change #100: Let me start with the data.
Speaker Change #101: Vast majority of our users in the U S market around Omnipod five so thats cloud data. So it's very high fidelity. We can tell when somebody has started we can tell when somebody has stopped so we have really clear data on this.
Speaker Change #101: Retention remains really high.
Speaker Change #101: And so it's it runs in that I'm going to say the low 90% I'm looking around the room and make sure Thats right. So it runs in the low nineties.
Speaker Change #101: It's very stable it really doesn't move very much period over period, it's a very very stable thing.
Speaker Change #101: We're very focused on creating and delivering an experience with our customers that makes it really easy for them to stay on and we're going to build continue to build capabilities in that area, but thats to give you a sense of it it's very stable. It is very very predictable.
Speaker Change #102: Our last question will come from Bill <unk> from Canaccord. Please go ahead. Your line is open yes.
Speaker Change #103: Great. Thanks, Good evening, Thanks for taking my question.
Speaker Change #103: I'd like to just shift gears I mean, if you've been launching the AI system.
Speaker Change #103: Just trying to understand the impact you've seen on the commercial organization I know youre scaling up to maybe go after different customer channels.
Speaker Change #104: But what has been the impact on the service to the patients and has this been a lessening with with the thought of potentially has this been lessening over time, where you're focused more on selling than than in <unk>.
Speaker Change #104: Less on kind of servicing the patient on an ongoing basis.
Thanks.
Speaker Change #105: Thanks, Bill that's a great question actually we're really focused on building.
Speaker Change #105: Clearly differentiated end to end customer experience in fact, the way we talk about this internally is that's actually what we deliver to people. We deliver an end to end customer experience that starts with the moment they might be diagnosed or they might be their child might be diagnosed all the way out to pause for life and we have I think a unique opportunity and a unique capability to do that because of the cloud connectivity.
Speaker Change #105: Of Omnipod five.
Speaker Change #105: And so I think our customer service our customer care, our product support are all really world class.
Speaker Change #105: I'll, just say that when we launched on May five in the U S. In August of 2022, you all might remember that actually we had so much demand that for a period of time, there we had trouble answering the phones and so when we started there was so much demand that we had not really appropriately scaled to support our customers as they got on product and as they get trained.
Those days are behind US, we've got we've scaled our commercial capabilities, we scaled our customer care, we've scaled our inside sales, we scaled our product support and we're laser focused on building the best end to end customer experience for users of Omnipod.
Speaker Change #105: Now and in the future over time, we're really excited about our unique opportunity to do that.
Speaker Change #106: I'm showing no further questions at this time I would like to turn the conference back to Jim Hollingshead.
Jim Hollingshead: Thank you all for joining US today, we have strong sustainable competitive advantages that allow us to deliver market, leading technology market, leading growth and a strong financial foundation that positions us to continue to drive long term value creation.
Jim Hollingshead: Our type two label expansion is a game changer and another major milestone for all stakeholders, including investors employees Hcp's and most importantly, our customers.
I am proud of the work our team is doing to disrupt the diabetes market and improve the lives of people with diabetes, we have a clear strategy to expand the Hanmi 505 platform drive growth in the U S. In both type one and type two and accelerated international growth and expansion. We continue to make significant progress in each of these areas and have strong momentum.
Jim Hollingshead: Across our organization.
Jim Hollingshead: I want to thank all of our Insulet employees for their dedication passion and deep commitment to further our mission to simplify and improve the lives of people with diabetes around the globe.
Jim Hollingshead: Thank you everyone for joining us today, and we look forward to updating you next quarter.
Speaker Change #107: Ladies and gentlemen. This concludes today's conference. Thank you for your participation and have a wonderful day you may all disconnect.
Jim Hollingshead: Okay.
Jim Hollingshead: [music].
Jim Hollingshead: Okay.
Jim Hollingshead: Okay.
Jim Hollingshead: Okay.
Jim Hollingshead: [music].
Okay.
Jim Hollingshead: Okay.
Jim Hollingshead: [music].
Jim Hollingshead: Okay.