PODD Q3 2026 earnings call transcript, November 4, 2026

Good morning, and welcome to the Insulet Corporation Third Quarter 2026 Earnings Call. As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Claire Trachtman, Vice President, Investor Relations. Please go ahead.

Good morning, and welcome to our Third Quarter 2026 Earnings Call. Joining me today are Ashley McAvoy, President and Chief Executive Officer. and Flavia Peace, Chief Financial Officer. On the call this morning, we will be discussing INFLIT's third quarter results, along with our financial outlook for the fourth 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 tax rates, 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, and I will be available to address any questions. Now I'd like to turn the call over to Ashley. Ashley?

Good morning, everyone, and thanks for joining us to discuss our third quarter results. Our teams delivered a strong quarter with U.S. performance in our guidance range and international performance that exceeded our plan. As we near the end of the year, we've narrowed our total company full-year outlook to the top end of our prior range to reflect this strength. Throughout the quarter, we continued advancing our strategic priorities, strengthening our commercial capabilities and execution, accelerating innovation, and expanding the category by increasing access and building relationships with prescribers. Importantly, we made progress against the Type 2 action plan. We laid out on our quarter two call. We are pleased with our progress in the quarter, and I want to take a step back and provide some broader perspective. Insulin has a strong leadership position in one of the largest, fastest-growing, and most underpenetrated segments in medtech. We are actively extending our leadership in automated insulin delivery and are confident that Omnipod will continue winning a leading share of MDI converts to AID, providing the foundation for sustained top-tier growth. We are clear-eyed and confident about insulin's near- and long-term prospects for growth and outsized value creation, factoring in new competitive products entering the market, as well as our own product pipeline. Let's jump into the details, starting with our performance. In the third quarter, we achieved revenue of $842 million, up nearly 20% year-over-year, with a

of $842 million. Approximately 15% growth in the U.S., and 33% growth internationally. Our increased revenue was supported by over 20% growth in our global customer base, compared to the prior year period. You may recall that we ended last year with more than 600,000 global customers, and we continue to drive a 20%-plus growth rate versus year-ago levels. This installed base provides a sustainable, potential recurring revenue foundation, as well as a growing source of real-world evidence and data. Globally, new customer starts grew low single digits versus the year-ago period, and year-to-date, new customer starts have grown low double digits. The majority of people with diabetes who convert from MDI to AID choose Omnipod, and over 85% of Omnipod new customer starts come from MDI. Demonstrating our success, growing the category. There continues to be a large delta between CGM and AIDs across our markets, despite ADA guidelines recommending AID as a standard of care. And we see a significant opportunity to grow the AID market and reduce the burden of diabetes for millions of people worldwide. New customer starts in quarter three were again balanced across type one and type two globally, with type two diabetes patients and AID. Counting for over 40% of U.S. starts. We have not observed an impact from increased GOP one use on type two new customer starts. And we continue to view GOP ones as complimentary to insulin.

We delivered record gross margin and expanded operating margin in the quarter, reflecting and puts industry leading manufacturing capabilities and ongoing productivity improvements. At the same time, we continue to invest in the company's innovation pipeline, and commercial capabilities. As I mentioned, we've narrowed our full year revenue guidance to the top end of our prior range, reflecting third quarter results and our expectations for continued momentum in the fourth quarter. As we get closer to 2027, we are providing an updated perspective for next year. We expect the pace of innovation across the category to increase next year, including our launch of Omnipod 6, which will accelerate market growth over time. At the same time, we expect the competitive environment to become more dynamic as new products come on the market. We plan to take a more conservative approach to our 2027 outlook while we remain highly confident in Inflit's long-term growth opportunities. Flavia will walk through what this means in terms of our full-year 2026 guidance range and our updated perspective for 2027. Before I turn toward strategic priorities, I want to note the share repurchase we announced this morning. The board approved a billion-dollar increase in our share repurchase authorization. The company expects to allocate $400 million toward repurchases in quarter four funded with cash on hand. These plans reflect our confidence in the strength of the Omnipod platform, our robust pipeline, and the company's long-term trajectory. Inflit has the balance sheet and cash flow

to facilitate the repurchases while we continue investing in our future. Now let me turn to the progress we continue to make against our strategic priorities, strengthening our commercial capabilities and execution, driving innovation, and expanding the category. First, commercial capabilities and execution. We are taking the right actions to build long-term relationships with people with type 1 and type 2 diabetes and the global healthcare provider who care for them. In quarter 3, we completed our second U.S. Salesforce expansion in two years, increasing our footprint by nearly 25% in this latest phase. Our field representatives also completed a new four-month certification program, preparing them to communicate the clinical and real-world value of Omnipod more effectively. In August, we rolled out the company's first new CRM platform in more than a decade to a of our U.S. sales team. Optimization is ongoing, and we continue to educate our teams on how to make the most of these new capabilities. We expect the new platform to facilitate better targeting, more effective message delivery, faster decision-making, and closer collaboration over time. Specific to type 2 diabetes, we have now put in place the action plan we shared with you all on the quarter 2 call, and we are pleased with our progress in improving the quality of starts, the onboarding experience, and the first 90 days of the customer journey. We adjusted our Salesforce compensation so it now adds a customer retention element and refined our approach for deploying samples. We also continued to strengthen our customer care team by adding clinical specialists focused on retention. We have begun to see an improvement in our sampling program and onboarding and saw type 2 retention

rates improve modestly in the third quarter. We expect to see the impact of these initiatives continue to build over time. Consistent with our type 2 action plan as well as our strategic priority to accelerate innovation that improves outcomes, we completed the full market release of Omnipod Discover in the U.S. in October. Every day our products make over 100 million automated dosing decisions and process over 850 million data messages, giving us one of the largest real world diabetes data sets. This data enables Omnipod Discover, our proprietary engagement platform, to deliver personalized insights and decision support to strengthen engagement, outcomes, and customer loyalty for people with diabetes and healthcare providers using Omnipod. During the Omnipod Discover limited market release, we saw stronger retention, increased time and range, and three-quarters of our users reported feeling more confident managing their diabetes. In October, we began onboarding people with diabetes regardless of healthcare professional enrollment, and we have seen very strong engagement. As of this call, Discover has been adopted by more than 35,000 users and 5,000 clinicians. We are in the early endings of this platform, but believe Omnipod Discover will be a moment. Another differentiator for insulin as people seek more connected and self-managed health solutions. Another recent advancement is our new algorithm enhancement, the most significant improvement to Omnipod 5 since its launch, now in full retail across the U.S. The updated algorithm adds a new 100 milligrams per deciliter target and fewer automated delivery restriction alarms so users stay in automated mode longer. Real world

evidence shows users achieve more time and range without a meaningful increase in lows. Reinforcing Omnipod 5's leadership in delivering strong outcomes with a simple, seamless experience. Robust algorithm innovation will continue to be an important focus with an emphasis on helping more people address their needs in a differentiated manner. Our expansive real world diabetes data set gives us a unique opportunity to continue building upon our industry-leading position while improving outcomes for Omnipod users. We're excited about this flywheel of innovation and patient impact and what it means for people with diabetes and all our stakeholders. In quarter two, we expanded sensor choice through our U.S. integration with Freestyle Libre 3 Plus, and as of today, we have extended integration to 10 new markets. The iOS platform for Libre 3 Plus is underway. With U.S. limited market release expected in quarter four, providing access to 450,000 MDI users, our teams are executing against this opportunity. At the same time, we are advancing our broader innovation roadmap, including Omnipod 6 and Omnipod fully closed loop for type 2 diabetes. Omnipod 6 adapts to how you bolus with 40% fewer boluses adults and adolescents with type 1 diabetes spent 76% of time and range on Omnipod 6. We have submitted the second and final 510K for Omnipod 6 and continue to expect launch in 2027. We believe we are better prepared for the Omnipod 6 launch than we have been for any launch in our history from customer targeting and marketing to manufacturing and international expansion. Our fully closed loop system for people with type 2 diabetes

is a transformational opportunity to move additional MDI users onto AID. It offers people with type 2 diabetes a user-friendly experience nearly identical to CGM with no user boluses or settings required and training completed at home in less than 40 minutes. Last month at EASD we highlighted the significance of this innovation with the Evolution 3 feasibility study. which demonstrated adults with type 2 diabetes using both a GLP-1 and CGM saw additional time and range benefit and had no user-initiated boluses. We completed enrollment in the Evolve Pivotal study and continue to target a 510k submission in 2027 with a planned launch in 2028. Our market-leading innovation and R&D spend will drive significant future product differentiation. Now, turning to our last strategic priority, expanding access and developing the category. In the U.S., we continue to extend our prescriber base this quarter with nearly 34,000 healthcare providers now prescribing Omnipod, up more than 20% year-over-year. Outside of the United States, we successfully launched in Spain, which has 175,000 people with type 1 diabetes and 200,000 people with type 2 diabetes on MDR. In the U.S., we have finalized one of our three PBM contracts for 2027 and expect to complete the remaining two in the next few weeks. Our goal is to maintain broad access to Omnipod and strengthen our leading position across the pharmacy channel.

We have a broad-based supply chain network across Acton, Malaysia, and in the coming years, Costa Rica, which provides us with the resiliency and capital efficiency to produce tens of millions of pods every year. Our execution against these strategic priorities position us to extend influence leadership position in AID, even with new products coming to market, and continue to deliver top-tier revenue growth and value creation. Omnipod 5 captures the majority of new AID customers today, and AID is one of the largest, fastest-growing, most underpenetrated segments in medtech. Over the past five years, Insolid has driven two-thirds of global market growth. Our SG&A is over half of category spend, and our R&D is nearly half of category spend. Across our markets, there is still a significant delta between AID and CGM penetration, providing a meaningful opportunity for us to continue to grow the category. Based on our latest survey across six countries, Omnipod is the number one AID choice among providers and people with diabetes. Awareness of Omnipod among people and MDI is now 67% in the U.S., 84% in the U.K., and 74% in Canada, up significantly in each market versus last year and well ahead of other AID brands. Across every market studied lifestyle fit and confidence in managing diabetes ranked among the most important factors associated with patient's choice of diabetes. AID, and these are the reasons people with diabetes choose Omnipod. And it's not just our customers. Prescribers view Omnipod as the most differentiated AID on the market. Omnipod continues to lead among U.S. healthcare professionals on key measures, preference, prescribing intent, satisfaction, trust, and brand affinity.

We continue to strengthen prescriber perception of Omnipod. across markets through professional education, clinical evidence, and innovation. At EASD, we presented our largest data set of international, real-world data to date, showing consistent time and range improvements across more than 384,000 people with type 1 diabetes in 17 countries. And we are not slowing down. Our innovation pipeline is the strongest in the company's history and provides a clear pathway for us to remain the AID of choice among new and existing AID users. In addition to our unique form factor and highly differentiated customer experience, we have manufacturing and operating scale and unrivaled financial capacity, which provide durable competitive moats. We invested billions of dollars over decades to build our manufacturing capabilities and scale. Competitors will be producing a fraction of what we make in their initial years on that kind of manual. market. We will also benefit from our well established market leading position. Inflit has the largest customer base, the highest brand awareness, one of the largest data sets of real world diabetes evidence. And we are the number one most requested and number one most prescribed brand for people with diabetes. For all of these reasons, we are going to continue to get a disproportionate share of new starts. And studies show that once people with diabetes convert to an AID, they are unlikely to switch brands. The path forward is clear. We will continue to expand the AID market. And as the AID market grows, we grow. To close, our quarter three results reflect the strength of Insulet's model. We are enhancing the customer experience and onboarding journey, accelerating our innovation roadmap, and expanding the category. We have outstanding leaders

across our company to drive this work, and the progress we've made in quarter three reinforces our confidence in the initiatives we've implemented. 2026 is expected to be our 11th consecutive year of 20% plus revenue growth. We are now preparing for Insulet's next chapter, led by the launch of Omnipod 6 and other meaningful innovations, which will again drive our company and category forward. In 2027, we are preparing for Insulet's next chapter, and we are preparing for Insulet's next chapter, and we will be preparing for Insulet's next chapter. 2027, reflecting the timing of innovation and our much larger revenue base, we expect our growth profile will moderate. It's a testament to the strength of our product and opportunity that we expect to still deliver top-tier growth on a multi-billion-dollar revenue base and further expand profitability. We are entering the next phase of market evolution with the scale, customer experience, commercial and manufacturing capabilities, and innovation pipeline to remain differentiated. With that, I will turn the call over to Flavia to walk through the financials and guidance in more detail. Thank you, Ashley, and good morning, everyone. The Insolent team delivered another strong quarter with total revenue of $842 million, an increase of 19.2% on a reported basis and 19.6% on a constant currency basis. Total company performance was supported by

We'll see you next time. Bye. Customer-based growth of more than 20%, low single-digit growth in new customer starts, and stable pricing. We also saw a modest improvement in retention during the quarter, while utilization remained stable. Our strong top-line performance, combined with continued operating leverage, drove significant profitability gains, with adjusted gross margin expending 200 basis points, adjusted operating margin expending 490 basis points, and adjusted EPS increasing 60%. In the US, Omnipod revenue grew 14.7% during the quarter, driven by continued demand across both Type 1 and Type 2, with our customer base growing in the high teens, and new customers start flat compared to prior year. US pricing was down slightly in the quarter, but remains flat year-to-date, and we continue to expect positive pricing for the full year. International Omnipod revenue grew 31.7% on a reported basis and 33% on a constant currency basis, driven primarily by volume and continued favorable price mix realization. Results in the quarter reflected a 250 basis point benefit from reserve adjustments, including approximately $3 million in France, related primarily to our clawback accrual, and approximately $2 million in Canada, related to reserve releases and updated program assumptions. Third quarter adjusted gross margin was 74.2% up 200 basis points year over year. Our continued gross margin expansion reflects the productivity gains we are realizing across our global operations. And the scale of our manufacturing model remains a significant competitive advantage. Turning to operating expenses. Within R&D, we continue to invest in our

power. pipeline in support of the upcoming launch of Omnipod 6 in 2027 and advancing our fully closed loop for type 2 diabetes, 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 US sales force expansion, as well as continued investments in market development and customer support, including initiatives to strengthen the type 2 customer experience and support adoption and retention. Importantly, we continue to balance these investments with discipline expense management. Third quarter adjusted operating margin was 22% up 490 basis points year over year, reflecting strong revenue growth and gross margin expansion, as well as benefit from lower annual employee bonus accruals. These results demonstrate the operating leverage in our model and our ability to drive meaningful earnings growth while investing in innovation, commercial capabilities and continued category growth. Third quarter net interest expense was $12.1 billion and our adjusted tax rate was 20.2%. Adjusted EPS in the quarter was $1.99, up 60% from $1.24 in the prior year, significantly outfacing revenue growth. Turning to cash and liquidity. During the quarter, we upsize our corporate revolver to $750 million and refinance our term loan B, reducing the rate by 25 basis points. We ended the quarter with $584 million in cash and investments and the full $750 million available under our revolver. Year to date, we have generated $212 million of free cash flow, reflecting

investments in working capital, inventory, and manufacturing capacity to support growth. As Ashley mentioned, the Inflate Board of Directors has approved a $1 billion increase in our share repurchase program. The company plans to allocate $400 million toward repurchases in fourth quarter, which we expect to fund with excess cash. The strength of the company's cash generation gives us the flexibility to return capital. to shareholders while maintaining our growth investment. Turning to our updated full year outlook, we have narrowed our revenue guidance to the high end of our prior range and now expect full year constant currency revenue growth of 21 to 22% for total company and 21 and a half to 22 and a half for total omnipot. Foreign exchange is expected to positively contribute approximately 100 basis points to omnipot and total company growth. Our outlook reflects our third quarter performance and expectations for the balance of the year. While we saw encouraging indicators from the actions we took to strengthen onboarding and customer support in Q3, we're not assuming any additional benefit to our financial results for the remainder of the year. We are seeing early contributions from Omnipod Discover, and our broader data and engagement capabilities, which we believe will have a meaningful impact in 2027 and beyond. For the US, we now expect Omnipod revenue growth of 17.5 to 18.5% for the full year, which reflects year over year NCS growth, positive pricing and fourth quarter attrition and utilization remaining similar to Q3 levels. For international

Omnipod, we now expect 2026 revenue growth of 32 to 33% on a constant currency basis, reflecting strong performance year to date, continued momentum across our markets, as well as a price mix benefit, which contributed high single digits to grow. Foreign exchange is expected to positively contribute approximately 300 basis points to international growth. Based on our full year guidance, we would expect fourth quarter total company revenue growth of 13.5 to 17% and total omnipot revenue growth of 13 to 16.5%. On a reported basis, foreign exchange is not expected to have a meaningful impact on either measure. In the US, we expect omnipot revenue growth of 10 to 13.5% and international innovation. We expect omnipot revenue growth of 21 to 24%. On a reported basis, foreign exchange is expected to be a headwind of approximately 50 basis points to international growth. Now turning to operating margin. Given our outperformance in the third quarter, we now expect to drive approximately 150 basis points of adjusted operating margin expansion in 2026. Given by continued growth margin improvement and discipline operating leverage. Below operating income, we expect net interest and other expense to total 40 to 45 million dollars and a non-gap tax rate of 20 to 20.5%. We continue to expect approximately 70 million shares outstanding and adjusted EPS growth of more than 30% for the full year.

We expect free cash flow to be approximately 275 million dollars in 2026 primarily reflecting higher capital expenditures and the impact of the MDCs and working capital uses. These impacts are expected to be partially offset by strong earnings growth and margin expansion. Turning to 2027. We're still working through our annual planning process. And we'll provide formal guidance on our fourth quarter call in February. But I want to share our latest thinking. We now expect 2027 total company growth to be modestly below the mid-teens framework we had provided on our Q2 call. As we plan to take a more conservative approach to our outlook and also factor in a tougher comparison and less prioritization. Our view of the US is broadly consistent with what we shared last quarter. We expect to guide toward the lower end of our prior framework, reflecting a more measured assumption for market growth and the impact of new competition, along with stable retention, pricing and utilization, and limited contribution from our new product launches. and our expanded sales force. Internationally, our updated view reflects the tremendous year we're having, which creates a more difficult comparison for 2027, as well as reduced benefit from price mix, as more than 80% of our international customers will have converted to Omnipod 5. will also anniversary several large country launches.

We continue to see healthy underlying demand internationally, supported by robust growth in customer base. With that said, we expect international growth in 2027 to moderate meaningfully from 2026. We remain committed to delivering top-tier revenue growth and expanding profitability, and we look forward to sharing our formal 2027 guidance in February. To close, we deliver another quarter of strong growth and significant margin expansion, while advancing our strategic priorities. We remain focused on strengthening our commercial capabilities, accelerating innovation, and expanding the category to drive durable, profitable growth. We are focused on executing against the significant global opportunity ahead, and we look forward to updating you on our continued progress on our next call. With that, operating

provider, please open the call for questions. Thank you. We will now begin the question and answer session. I would like to remind participants that this call is being recorded, and a digital replay will be available on the NCLIT website. We ask that you please help us respect time by limiting to one question and one follow-up. If you would like to ask a question, please press star one to raise your

hand. To withdraw your question, please press star one again. We ask that you pick up your handset when asking a question to allow for optimum sound quality. And if you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Your first question comes from the line of Matt Taylor from Jefferies. Your line is open. Please go ahead.

pacing of innovation and when OmniPod 6 will be coming to the market. You know, as market leader, we're clear eyed around the state of new competitive entrance coming. And so we are going to be really thoughtful as we guide for the outlook for next year. Now, I still have absolute confidence that we're going to deliver top tier revenue performance, as well as expanded profitability going forward. Maybe just as a follow up, it looks like you didn't include some of the upside that you said, you know, limited contribution. contributions from new products, the sales force, and just assuming stable retention versus any improvement from type two. I guess maybe you could speak to what could drive some upside. And if you've, you know, really included much from your pipeline in the, in the initial thoughts on 27th. Yeah, no, thanks. I mean, I think Flavia said an open remark a little bit of what some of the going in assumptions that our latest thinking took into consideration. So, you know, I'm really pleased with our. Salesforce expansion that we conducted in quarter three. We increased that 25%. Again, that's going to pay dividends in quarters and years to come. I'm really pleased with a new CRM platform that we've implemented over 10 years, the first in 10 years. Again, we're going to equip the field with all these new tools. Again, that will build over time. Again, very pleased with how this field in quarter three with speed and intentionality got after the type two action plans. While you heard in my opening remarks,

we saw some early green shoots around those. Retention did improve, but we are building a more modest build over a period of time. And that's what we mean by having a bit of a conservative outlook. We also understand when our innovation is going to hit. We also understand the impact that some of the new competitive entrants will have. So taking that all into consideration, we've been really deliberate on our guide for 27. Again, it's not our official guide because we'll be coming back in quarter four. It's really our latest Thank you. Thank you. Great. Thanks so much. Your next question comes from the line of Travis Stead from Bank of America. Your line is open. Please go ahead. Hey, thanks for the question. I guess I wanted to clarify. You said U.S. towards the lower end of the range in 27. Is that high single digits or is it double digits for the U.S. in 27? Just want to make sure that's clear given the

guide towards the lower end of the framework that we provided in Q2, and we'll provide formal guidance in February with precise ranges. What was the lower end of the framework in Q2? Is that high single digits or double digits? Yeah, the prior range was 9 to 14%. Okay, thank you. I'll stick to the one question.

Your next question comes from the line of Robbie Marcus.

than category average near 90% coming from MDI. We look at kind of the fundamentals of the category and we see a very large TAM that's under penetrated that's very broad based. We look at type 1 UF, we look at type 2 UF, and then we look at OUF type 1. All of the penetration rates for the category are well below CGM. So we believe we have meaningful headroom ahead for this category. Now, when we think about 2027, we think the category is going to expand with new entrants. We think that we are going to be building off of a very strong customer base entering 2027. We have the largest customer base in the industry. As I mentioned, it grew 20% in quarter three. That's really the customer base KPIs what you're going to take to the bank. We've shown some, I said, very modest improvement in the type two U.S. in quarter three. We expect that to build over time. And again, for NCS, we are going to be the leader in NCS. Of course, we're going to lose a couple share points as competitors come in to enter this space. But again, I'm really confident that in this moderated growth profile for Insulate, it still will command top tier growth with expanded profitability. I think you had a second question, Ravi.

Yeah, thanks. Ashley. I think on the last quarter call, you had mentioned 20% plus EPS growth for 2027. I didn't hear that comment today. Is that still a valid comment? Thanks a lot.

Hey, Ravi, it's Flavia. I'll take that one. Obviously, we're not guiding yet for 2027, but we continue to have confidence in our previous remarks of growing EPS 25%. over our horizon. Your next question comes from the line of Johnson Johnson from Baird. Your line is open. Please go ahead.

that as a backdrop, absolutely growth will moderate next year. Again, it will still be very competitive top tier growth OUS. And that's because we're going to anniversary some of these big country launches. And we're going to not have the favorability of a one time price mix realization. And we're really going to be preparing our markets for the innovation coming their way of the new sensor integration, the new phone control, as well as Omnipod 6. So onto that, maybe you want to

your first question about global. I'm just going to reiterate that we're going to issue formal guidance in February of next year. But let me recap what we said in the call today, which is for the total company, we would expect the growth next year or to guide next year to be modestly below mid-teams, which was the framework we provided in the second quarter. That's for total company. For the US, we expect to guide at the low end of the framework we had provided in the second quarter. And then, to your point, Jeff, we expect the growth internationally to moderate meaningfully from where we are today. I'm not going to provide specifics until we got in February, so I'll let you guys interpret what those mean. Fair enough. And just for a follow-up, again, kind of a clarifying question, but is the T1 attrition rate still kind of sitting in the US close to that 10% range? And I know you said maybe a very slight improvement on T2 retention. We've all tried to back in on your comments last quarter what that T2 attrition rate might be looking like in the US as of last quarter. I think we were all, well, I know our math was getting us around 25 to 30%. Is that 25 to 30% T2 attrition rate a fair number? And could you quantify, did you improve that a couple points or anything in the quarter just to help us out understand how much progress might've been made thus far? Thank you. Yeah, Jeff, let me kind of first just like take everybody back to kind of what drives our business model. And the most important KPI is how many customers we have. And our customer base grew 20% in the quarter. And in the United States, it grew high teens. And that is a really healthy measure. And again, we saw, you know, globally stable pricing.

And our consumption patterns, which is the amount of volume that our customers are using, were very close and mirrored the customer base number. Again, a very healthy measure. As I shared in our quarter two call, we did see some erosion in that quarter on attrition in the type two population. Our type one population is very consistent to the measure that you shared. And we did see green shoots. We saw improvement monitoring. Modest improvement and our key to retention trends. And we also, again, saw when we think about going forward, we look at kind of structurally no difference than what we've called on the TAM and the penetration rate for the type two marketplace. So I call these execution challenges that we've now addressed. And I believe that they will have a full confidence that they're going to have meaningful value as we build into next year.

Your next question comes from the line of Larry Beigelson from Wells Fargo. Your line is open. Please go ahead.

our field for sales compensation program from in addition to incenting them on NCF, but also incenting them on quality of staying into the franchise, particularly the first month. And again, that's a newer program. We're going to see benefits of that in quarters to come. And then importantly, you know, as I shared in my opening remarks, we've launched Omnipod Discover, which is our new data platform, Larry. And again, we now have in full market release 35,000 people with diabetes using Omnipod Discover, and we now have over 5,000 clinicians. I will tell you, I was in the field on Friday in a safety net hospital with 1,500 patients on Medicaid. They're seeing remarkable retention trends used on this patient engagement platform. Again, I believe that that will build over time. So I think we have the right strategies. I'm seeing, I think our strategies have momentum. I think that these are going to build over time. So we are just as masterful at serving this customer base as we have been for the past 23 years of the type one community. So when I think about next year, Larry, again, I'm going to start with what I was sharing with Robbie. We have a very strong, growing, leading customer base, the largest customer base in the industry that has been growing in a phenomenal pace in 2026. When I think about next year, I still think we're going to have the leadership tips. Share in the customer base. I still think we'll expand our share and customer base. We will continue to bring people into the category. We will be the NCS share leader. But yes, of course, we're going to lose a couple share points with some of the competitive entrants coming in. And again, we're going to play upon the strength of our of the of our customer base and the retention efforts we're doing and the continued improvement that we continue to do with as category leader. We've

bring the majority of the volume from the MDI category into into the AID. And if you have any other kind of specific questions, Larry, happy to get you on the on the follow up call on some of the numbers you were asking about. That's perfect. Thank you so much.

Your next question comes from the line of Matthew O'Brien from Piper Sandler. Your line is open. Please go ahead.

Your next question comes from the line of Michael Pollard.

It will be intact with our strategy. Overall, we think in the United States, it'll be stable pricing.

Your next question comes from the line of Jason Bedford from Raymond James. Your line is open. Please go ahead.

Yeah, Joanne, thank you for the question. You know, I think it's helpful to, you know, as market leader, we've done a lot of work the past year kind of understanding what the biggest unmet needs in the market are, how are we positioned versus what's coming into the market, and what matters most. That's right. to people with diabetes as well as prescribers. And as I said in my remarks, the number one thing that people with diabetes are looking for as well as prescribers is lifestyle fit quality of life. This is a chronic progressive disease that people it they never get a break from it. And so that is what that's really what's enabled omnipot to capture the market leadership. And we're going to play from our position of strength as we launch our sixth generation of omnipot next year. What we've learned is it's going to give more durability and different things around burning и lacking here. What I've learned is it's a scary thing because I actually I don't think it's going to happen as perhaps when the we have improved clinical outcomes. The early data that we shared has people with type 1 diabetes at 76% time and range with 40% less bolstine, which is a lot less manual intervention. And again, it's going to be connected with the latest sensors. We're going to have phone control available OUS and we will be launching this in the United States as well as outside the United States simultaneously. This is a first in the company and we've had the benefit of time to really

prepare. To master how we sell our clinical evidence, how we sell our lifestyle fit and quality of life, how we really equip our field as well as our peer to peer education to really have a leadership share of voice of making sure that prescribers and people with diabetes are aware of this meaningful innovation. Thanks for the question, Joanne.

There are no further questions at this time and I will hand it back to Ashley Maxwell.

Thank you, Joanne, for closing remarks. Listen, thanks everyone for joining. You know, you heard our reminder of the strength of this market that we are the leader in. It's one of the largest, fastest growing, most underpenetrated segments in medtech. We always know when it's helpful to have the market on your side. And we've got full conviction that we're going to continue to win more than our fair share of converts, you know, given our really unique user experience. Our unbelievable manufacturing scale. As I mentioned, we've invested billions over the years. We produce tens and tens of millions of pods a year. And then our other durable advantages. We're on the precipice of a remarkable innovation agenda ahead of us, beginning with Omnipod 6 and then what we believe will be the industry's first fully closed loop, which will be a transformation for Type 2 and bring more people from the MDI category into this industry. And we're just going to continue. Focusing on improving outcomes and reducing the burden of living with diabetes and serving more and more people. Couldn't be more pleased with all my colleagues around the world of Team PODD and their maniacal focus on patients. Thanks so much.

This concludes today's call. Thank you for attending. You may now disconnect.