Good afternoon, ladies and gentlemen, and welcome to the Insolent Corporation 4th Quarter and Full Year 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. If anyone should acquire assistance during the conference, please press star, then zero on your touchtone telephone. As a reminder, this conference call is being recorded. I would now like to turn the conference over to your host, June Lazaroff, Senior Director, Investor Relations. Please go ahead.

Good afternoon, and thank you for joining us for Insulet's fourth quarter and full year 2024 earnings call. With me today are Jim Hollingshead, President and Chief Executive Officer, and Audemaria Chadwick, Chief Financial Officer and Treasurer. Both the replay of this call and the press release discussing our fourth quarter and full year results, as well as our 2025 guidance, are available on the Investor Relations section of our website. Also on our website is our supplemental earnings presentation. Before we begin, we remind you that certain statements made during the course of this call may be forward-looking and could materially differ from current expectations. Please refer to the cautionary statements in our SEC filings for a detailed explanation of the inherent limitations of such statements. We will also discuss non-GAAP financial measures with respect to our performance, including constant currency revenue, which is revenue growth excluding the effect of foreign exchange, adjusted EBITDA, non-GAAP effective tax rate, and free cash flow. These measures align with the supplemental measures that management uses in assessing our operating performance from period to period, and we believe they are helpful for others as well. 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 will turn the call over to Jim.

Thank you, June. Good afternoon, and thank you for joining us. We concluded an incredible year with a very strong fourth quarter, achieving several milestones across the business, as well as every one of our growth and margin objectives. We continue to see robust demand and momentum for Omnipod V, now available to both Type I and Type II patients in the U.S. and continue to expand rapidly in international markets. 2024 marked our ninth consecutive year of 20% or more constant currency revenue growth, and we generated over $2 billion in revenue for the first time in Insulet's history. For context, we first achieved $1 billion in full-year revenue in 2021. In just three years, we have doubled our top line. We also delivered on our plan to grow both U.S. and international new customer starts sequentially and year-over-year in the fourth quarter. This resulted in year-over-year new customer start growth for the second half of the year in both U.S. and international markets. We also grew new customer starts in both Type I and Type II populations in the U.S. And I am pleased to share that we have an estimated 500,000 global customers using Omnipod. And of these, 365,000 are active global Omnipod 5 users. Reaching a half a million customers is a tremendous milestone that our entire team is proud to have achieved and elevates us to a stronger position for future growth and value creation, giving our recurring revenue model, which is supported by high customer retention and continuing new customer growth. Our ongoing achievements are proof of the overwhelming acceptance and widespread adoption of Omnipod 5 and have positioned us with strong momentum as we enter 2025 and look out over the longer-term horizon. We have great confidence in our objectives to continue growing and executing our strategic plans across our U.S. and international markets. Anna will take you through what this means in terms of our financial outlook. But first, I will highlight our initiatives and progress made across our three strategic focus areas. First, our work to advance the the Omnipod 5 platform through our cascade of innovation fueled by data. Second, our strategy to lead ongoing growth for both Type 1 and Type 2 in the US. And third, our commitment to drive access to Omnipod 5 internationally, starting with our cascade of innovation, which includes our broad compatibility with smartphones and sensors. The work to develop and establish these compatibilities from our platform has allowed us to strengthen and expand our market-leading position with Omnipod 5. will continue to be a driver looking forward in october we launched the omnipod 5 ios app in the u.s integrated with g6 and we have heard from many new users that ios was one of the key factors in choosing omnipod 5. our ios app offers enhanced capabilities that are unique and time savers for potters including our custom foods feature which makes mealtimes simpler feedback has remained extremely positive, including phrases like life-changing, freedom, and normalcy. Since launching iOS, over 25% of U.S. Omnipod 5 users have switched to using their iPhone, and we remain on track to launch iOS with G7 in the first half of this year. In November, we are proud to have launched Omnipod 5 integrated with Abbott's Freestyle Libre 2 Plus sensor in the U.S. We also continue to ramp Omnipod 5 with Dexcom's G7 in retail pharmacy. In the fourth quarter, over 90% of U.S. customers and over 30% of our international customers were using Omnipod 5. These are significant achievements given that we fully launched Omnipod 5 in the U.S. in mid-2022 and had only launched in four international markets as of the end of 2024. We are proud to have delivered terrific customer-centric innovation, which has helped us meet customers where they are and bring them on to our technology. In 2024, we saw more Omnipod 5 technology integrations and launches than in the prior three years combined. It is no coincidence that our revenue essentially doubled in that same period. Omnipod 5 is the most connected tubeless automated insulin delivery, or AID, system on the market. Today, I am also excited to announce our next leap forward in diabetes management with the U.S. limited market release of Omnipod Discover, a new value-added service for HCPs and patients to track data, identify utilization and health trends, and discuss these dynamics together. Omnipod Discover is a digital platform connecting clinicians and their patients for personalized data management, insulin usage insights, and learning materials to optimize patient engagement improvement and outcomes. The Omnipod Discover platform will be integrated and accessible across devices from a clinician's workstation or a patient's smartphone. We look forward to sharing user experience updates as we roll this out over the coming months and quarters. In clinical trials, last week our secured T2D manuscript was published. These findings support our indication for Omnipod 5 use in adults with type 2 diabetes and will be leveraged to transform the lives of millions of people. Additionally, results from our RADIAN study will be shared at the Advanced Technology and Treatments for Diabetes conference in Amsterdam next month. Our STRIVE study, which will test further enhancements to our world-class Smart Adjust algorithm, will also commence enrollment next month. And our investment in fully closed-loop algorithm research continues with our evolution studies, with the next phase commencing later this year. These trials are further evidence of our commitment to continue to advance our technology platforms, which we validate through clinical evidence. Turning to our second strategic focus area, leading ongoing growth in the U.S. for type 1 and type 2. We have long offered the best technology on the market for type 1 and are incredibly excited to continue expanding into type 2. In the fourth quarter, consistent with the prior quarters, over 85% of our U.S. new customer starts were from people previously on MDI. This is a tremendous testament to the value and simplicity we bring to people living with diabetes. Since we received FDA clearance for type 2 label expansion for Omnipot 5 in August, we have been working relentlessly to build our market leadership position in the type 2 diabetes market. As a reminder, we are the first to market in AID for the type 2 indication. It's a very important opportunity for us and for millions of patients living with type 2 diabetes who need insulin. For the fourth quarter, type 2 users represented over 30% of our U.S. new customer starts as we ramped adoption in this patient population. In the U.S., our type 2 indication has significantly expanded the total addressable market for insulin by making Omnipot 5 commercially available to over 5.5 million people who live with insulin requiring type 2 diabetes. This market includes 2.5 million people who are insulin-intensive and on MDI. We estimate that this market is less than 5% penetrated, with the majority of current pump users using Omnipod. The other portion of the market includes approximately 3 million people that use insulin on a basal-only therapy every day, and that market is barely penetrated. This creates a tremendous long runway of opportunity, and we are leveraging our proven commercialization playbook to drive reach and awareness. To expand our reach, we are growing our U.S. sales force to engage more patients and prescribers. As we discussed last quarter, this expansion involves adding more feet on the street and is not a wholesale change to our sales organization. We expect this expansion to increase the reach of our direct sales to over 40% of the 2.5 million type 2 insulin intensive population in 2025. To date, we have filled over three quarters of our expanded sales roles and we expect the majority of those roles to be trained by the end of the first quarter. Our team is hard at work to increase the number of US HCPs engaging with type 2 patients and prescribing omnipot therapy. We saw an increase of over 20% in HCPs prescribing for type 2 sequentially in the fourth quarter. As we invested in our sales and marketing efforts through the fourth quarter, we also saw an increase in new DTC leads from individuals with type 2 diabetes and we are having great success getting those customers quickly onto Omnipod 5. We are proud and motivated by the progress we made in the fourth quarter and we remain committed to advancing both type 1 and type 2 commercial efforts in the U.S. Turning to our third strategic focus area of international expansion, our international business is also making great progress. We continue to reach more patients in UK and Germany, and we're seeing strong early adoption in France and the Netherlands. This is a testament to the power of Omnipod 5. It wins everywhere it goes. We are accelerating international launches. In January, Omnipod 5 with G6 and Libre 2 Plus became commercially available in five new European countries, Italy, Denmark, Finland, Norway, and Sweden, and we plan to launch in five additional countries over the course of this year. We are also on track to expand our sensor integration starting with our rollout of G7 with first international launches planned in the UK and Netherlands this quarter and more markets to follow through the year, providing OmniPhot 5 with more sensor options for people with diabetes. In closing, we had a terrific year and our achievements are proof that we are continuing to build on our lead. As we advance through 2025, we will remain relentlessly focused on driving the diabetes industry forward with Omnipod 5. We have brought more patients from MDI to AID technology than all of our competitors combined over the last several years, including in 2024. Our time and investments have paid off, with the number of HCPs writing scripts for Omnipod 5 growing to nearly 24,000. We have over two decades of experience and distinct competitive moats. Our form factor is unique and has proven very difficult to replicate. It took us years to build a patch pump product at scale with quality, high yield, safety, and very well protected IP. Our form factor has allowed us to deliver widespread affordable access with pay-as-you-go economics through the pharmacy channel. The majority of our U.S. customers now have a copay of $30 or less a month, which is essentially a dollar a day or less. And given we are the only insulin pump in the diabetes space with Medicare Part D reimbursement, many of our customers pay $0 copay. And with the limited market release of Omnipod Discover, data will continue to be an emerging moat for us. Every Omnipod 5 customer is connected to the cloud, and we are able to use data to improve our algorithms, to improve customer experience, and optimize outcomes. Given these deep modes, which we continue to strengthen, we see ourselves as a category of one. As we celebrate 25 years of Insulet, I want to acknowledge our global team, from operations for getting our new Malaysia site up and running ahead of schedule, to our field and customer service teams serving and supporting our 500,000 customers, our clinical team for their amazing work that supported our Type 2 FDA clearance, and all of Team Insulet for bringing their best selves to work every day and living our mission to improve the lives of people with diabetes. Thank you all for an incredible year. We are more excited than ever about the path ahead. With that in mind, today we are announcing that we will host an Investor Day at our Acton, Massachusetts headquarters on June 5th. We will provide further details in the upcoming weeks and months, and we hope many of you can join us. With that, I will turn the call over to Anna to walk you through our results and guidance.

Thank you, Jim, and good afternoon, everyone. We are pleased to conclude a very strong year, financially, clinically, and operationally. Looking ahead to 2025, we are optimistic for another exciting year. For the full year of 2024, we delivered revenue of 2.1 billion dollars, which represented growth of 22 percent over prior year and marked the ninth consecutive year of 20 percent or more constant currency revenue growth for insolid. The revenue growth was comprised of U.S. Omnipod growth of 21 percent and international omnipod constant currency growth of 27 percent gross margin was an impressive 69.8 percent and operating margin was 14.9 percent for the full year our estimated global utilization and retention trends remain stable versus prior year our results demonstrate the ongoing strength of our platform and the dedication of our teams who executed our vision of getting more patients on Omnipod in every geography we serve, culminating in tremendous recent milestone of 500,000 active global customers. In our fourth quarter, we achieved 17% total revenue growth and our highest quarter of total revenue dollars. We delivered on our plan to grow both U.S. and international new customers start sequentially and over prior year, resulting in year-over-year growth in new customer starts for the second half of the year. We also grew new customer starts sequentially and year-over-year in both Type 1 and Type 2 markets in the U.S. Let me now provide more details on the fourth quarter results. U.S. Omnipod revenue grew 12.4 percent, just above the high end of our guidance range, driven by ongoing strong demand for Omnipod 5. As a reminder, the fourth quarter of 2023 included two stocking dynamics, which totaled an estimated $30 to $40 million, and impacted our fourth quarter of 2024 growth rate by approximately 1,100 basis points. US revenue growth was driven primarily by increasing volume as we continued expanding our customer base. As Jim discussed, we are extending the Omnipod 5 platform through our cascade of innovations, which will support continued customer growth. Additionally, the ramp in Type 2 new customer starts that we experienced after the FDA clearance in August continued throughout the fourth quarter. We expect the Type 2 label expansion to contribute meaningfully to revenue in 2025, and it presents a significant long-term growth opportunity for our business given our annuity based model turning to international markets our team delivered another exceptional quarter achieving 33.1 revenue growth which was at the high end of our guidance growth was driven by continued strong demand and adoption of omnipot 5. on a reported basis foreign currency was a 40 basis point tailwind over the prior year which was approximately 60 basis points on favorable versus our guide we continue to drive strong omnipot 5 growth in the uk and germany we're also pleased with the early momentum we're seeing in omnipot 5 adoption across france and the netherlands along with positive feedback from our recent libra 2 plus integrations with our recent launches of Omnipod 5 in Italy and the Nordics, and future market launches planned, international will play an increasingly pivotal role in our growth strategy. Turning to drug delivery, revenue grew 34.1% and was above our guidance range due to an increase in orders from our partner. In addition to our strong revenue growth for the fourth quarter, we are pleased to deliver for exceptional gross margin expansion. Fourth quarter gross margin was 72.1%, up 120 basis points over prior year, primarily driven by US volume through the pharmacy channel, Omnipod 5 pricing in international markets, and improved manufacturing efficiencies. We continue to drive margin expansion as we scale and execute our initiatives to drive operational excellence across our global business. Operating expenses increased in line with our expectations as we invested in our business to support our strong growth trajectory, including gearing up for near-term launches globally. We once again grew R&D dollars as we continued to fund our pipeline of innovation. operation. Operating margin was 18.3%, and adjusted EBITDA margin was 25.3%. While down from prior year due to the benefits of the stocking dynamics last year, we are very pleased with these strong margin results. From a tax perspective, in the fourth quarter, we released approximately 17 million dollars of our valuation allowance resulting in a non-cash tax benefit which has been adjusted out for non-GAAP purposes our non-GAAP effective tax rate for the fourth quarter was 25 percent and the full year was 24 turning to cash and liquidity we ended the year with over $950 million in cash and cash equivalents, and the full $300 million available under our credit facility. Our free cash flow for the year was $305 million, a milestone that represents our commitment to and execution on delivering a premium financial profile as we continue generating cash and investing in the business for long-term profitable growth. Now turning to our 2025 outlook. For the full year, we expect total Omnipod revenue growth of 17% to 21% and total company revenue growth of 16% to 20%. As a reminder, our revenue growth guidance is on a constant currency basis. For U.S. Omnipod, we expect revenue growth of 16 to 20%, driven by strong Omnipod 5 adoption as we continue to build our recurring revenue model by growing Type 1 and ramping Type 2. We also expect benefits from G7, Libre 2+, and iOS as customers continue to move from MDI to our AID technology. We anticipate U.S. new customer starts will grow on a year-over-year basis. Our guidance for U.S. revenue assumes similar trends in pricing, utilization, and retention for 2025 relative to 2024. For international Omnipod, we expect revenue growth of 22 to 26 percent on a reported basis we are assuming an unfavorable foreign currency impact of approximately 300 basis points we expect continued growth in the uk and germany as those markets benefit from new integrations and customers continuing to upgrade from omnipot dash to omnipot five. We also expect France and the Netherlands to continue to ramp and contribute more meaningfully to our growth in 2025. And we expect the recent country launches in Italy and the Nordics to also ramp throughout the year. We anticipate international new customer starts will also grow year over year. Volume is expected to be the primary driver of our international revenue growth. Consistent with trends we saw in 2024, we expect international revenue to also benefit from pricing as new customers adopt our technology and existing customers upgrade from Omnipod Dash to Omnipod 5. Our international guidance assumes a modest benefit from pricing and stable utilization and retention trends from 2025 relative to 2024. Lastly, for drug delivery, we expect a 45% to 55% decline. Turning to 2025 gross margin, as we previously communicated, we expect modest improvement going forward as compared to prior years, which reflected the benefit of pricing as we shifted to the pharmacy channel. For the full year, we expect gross margin of approximately 70.5%. This guidance reflects the continued build in scale and manufacturing efficiencies, including our Malaysia facility becoming slightly accretive in the back half of the year. We expect these benefits to gross margin to be partially offset by the ramp of our lower margin international business. Additionally, our gross margin guidance assumes that our business will not be materially impacted by tariffs. We are very pleased to have a robust manufacturing position here in the U.S. complemented by manufacturing sites in China and Malaysia. Our supply chain strategy includes developing regionally located dual source for materials which provides us with resiliency. This strategy has demonstrated success over prior challenging supply chain environments and offers us great optionality and adaptability in the current environment. Naturally, this is something that we are continuously monitoring. For the year, we're guiding operating margin of approximately 16.5%, which reflects 160 basis points of expansion over 2024. We expect to continue to expand margins while further investing in R&D, which we will continue to fund with more dollars on a year-over-year basis given our exciting pipeline of innovation. Our operating margin guidance also includes investments in sales and marketing, particularly as we develop the type 2 market and continue to grow our type 1 customer base. We have many catalysts for growth in 2025 and considerable opportunities to drive further margin expansion over the near and long term, coming from scaling the business efficiently, even with continued investments in our robust innovation pipeline and commercial efforts. Consistent with historical patterns, we expect growth margin and operating margin to be lower in the first half of the year and improve in the second half for 2025 we expect our effective tax rate to be 20 to 25 percent we expect capital expenditures to be slightly higher in 2025 compared with 2024 as we continue to expand and optimize our manufacturing and supply chain operations as well as support our global expansion Additionally, we expect to continue generating positive free cash flow annually and strengthening the cash position on our balance sheet through organic growth and profitability. Turning to our first quarter 2025 guidance, we expect total company revenue growth of 22 to 25 percent. For U.S. Omnipod, we expect growth of 21 to 24 percent. As a reminder, the first quarter of prior year included 20 to 25 million of unfavorable stocking dynamics. Adjusting for this, our first quarter U.S. Omnipod growth is in the mid-to-high teams. For international Omnipod, we expect growth of 28 to 31 percent. On a reported basis, we estimate an unfavorable foreign exchange impact of approximately 400 basis points. And we expect truck delivery revenue to decline 5% to 10%. In conclusion, we are very pleased with our recent progress and immensely excited for the year ahead. Underpinned by our innovative technology, significant investments in growth, and product differentiation, wide competitive modes, and unparalleled feedback from providers and patients, we are positioned to continue leading the insulin delivery field and changing the lives of people with diabetes for the better. Furthermore, we will do all of this while generating strong growth, executing on our plans for growth margin and operating margin expansion, and improving our profitability and free cash flow profile to enable continued investments in key growth catalysts. To summarize, we are optimistic about the future and the long-term value we are creating. I look forward to sharing even more of these topics during our investor day in June. With that, operator, we will open the line for questions.

Thank you. If you have a question at this time, please press the star then 1 on your touchtone telephone. If your question has been answered or you wish to remove yourself from the queue, please press the star 1 again. We are limiting each participant's question to one. However, please feel free to go back into queue, and if time permits, we will be more than happy to take your follow-up questions at that time. And our first question comes from Robbie Marcus at JPMorgan.

Oh, great. Thanks for taking the questions. Congrats on a good quarter. I wanted to ask about Type 2. My rough math points to about 50% growth year-over-year, 30% growth quarter-over-quarter in Type 2 patients in the U.S. Just want to see if that's ballpark right and how to think about what it's contributing and the trajectory throughout 2025, given the great exit point in 2024. Thanks.

Thanks, Robbie. Thanks for the question, and thanks for your congrats. As you know, We're not breaking out specific numbers on NCS and growth rates by the two categories. I will say that ever since we had the launch, ever since we got the label in August, we've had a really nice response from the market. As you know, we've always had Type 2 as an important part of our business, especially with Omnipod Dash. We had a lot of off-label use with Omnipod 5 before we got the label, and we've seen a really nice ramp. And that's how Type 2 got to 30% of new customers starts, even with both Type 1 and Type 2 growing. in the quarter. So, but we're not going to break out the actual splits on the growth rates.

And comments on 25 and how you think it'll progress, maybe just qualitatively?

Yeah, we're very bullish on 25 overall, and we're really happy with the near-term results we're seeing in type 2. Obviously, to have it grow to that percentage of mix, even in the balance of continuing to grow our new customer starts in type 1, you know, it's really good early response. We're seeing growth in prescribers. We're targeting prescribers for type 2. And so, as we said, we saw a clear lift in Q4 for doctors writing for type 2. So, saw growth in that. And we're just finishing the expansion of the sales force, getting us into more call points. So, we'd be reaching significantly more type 2 patients in those call points. So, we think type 2 is a big growth driver for us in 25 and in the years beyond, given the size of the market. And given, of course, that we're first to market with a label, which gives us a clear advantage.

We'll go next to Jeff Johnson at Baird.

Thank you. Good afternoon, guys. Congrats on the quarter as well. So, Jim, I wanted to ask another question on T2, more of maybe a qualitative question. You know, as we've talked to a lot of thought leaders over the past six to 12 months on type two, it seems like especially at the KOL level, there's a lot of excitement. I think what we heard coming out of the security T2D data is why would I not get everybody on all of my IIT T2s on an AID, just like I think I have to on my T1. I'd love to hear kind of how you're hearing the next layer down of docs talk about T2 at this point. You know, maybe those endos who aren't the thought leaders in the space or the PCPs. Is that excitement to use an AID system in Type 2 also growing in that user population, or I'm sorry, the prescriber population? Thank you.

Thanks, Jeff. Yeah, we're getting great feedback on Omnipod 5 in Type 2. You know, The first thing I'll say is patients love Omnipot-5, and as you know, we saw that in our clinical trial. Even our investigators were surprised at how easy Omnipot-5 proved to be to use for the participants in the trial. Most of those patients wanted to stay on Omnipot-5, and we're seeing that as we got in the market. And as we talked about over 2024, as we got close to getting the label, some endos were already writing Omnipot 5 off-label, but some endos in our call point were waiting for the indication. So we saw a clear lift as we got the indication for use. And more and more as physician practices, as the HCPC Omnipot 5 in the real world, see it in their hands, put it on a patient, you know, we're very bullish on the adoption that we're seeing already. And obviously those MDI patients who are using, you know, frequent injections of insulin, And it's a real, it really removes the burden for them to go on Omnipod 5. But we know physicians who are also already putting it on basal-only patients because the algorithm is just so adaptive to the patient's needs. So there is an education process here. We do have to go develop this market. It has not until now really been expected to use pump therapy, insulin pump therapy in the type 2 patient population. And so we have to go out and drive awareness, drive education, show how easy it is to use. but the early reception is really, really strong. And I'll note that the ADA just updated their guidelines to suggest, you know, patients should use, type 2 patients on intensive insulin therapy should be offered AID therapy. And, of course, we're the only one on the market with the label. So that should drive growth for us, and we're getting great early reception.

We'll move next to Travis Steed at Bank of America.

Hey, thanks for taking the question. I wanted to ask on the Q1 U.S. guidance. I think you said excluding all the stocking, it was kind of mid to high teens in Q1. Just kind of a little lower than I was thinking, and just want to make sure if that's just conservatism or kind of how you're building up the Q1 guide for U.S.

Yes, great. Travis, this is Anna. You're absolutely correct. the normalized guidance for the de-stalking events back in 1Q of 2024 bring us to the mid to high teams. And that is also to consider that we do have that seasonality between the fourth quarter in the U.S. and the first quarter. But more importantly, our guidance philosophy has not changed, and that is in line with the 16 to 20 percent that we're guiding for the full year.

We'll go next to Michael Pollack at Wolf Research.

Hey, good afternoon. Thank you for taking the question. The guidance construction question, this Salesforce expansion that you're three-quarters of the way through, how impactful is this to the guide, meaning kind of what can you just go get today in the guide versus what do you need from these incremental heads to contribute to the U.S. growth this year?

Thanks for the question, Mike. The guide includes, you know, our planned rollout, and the hiring's done really, really well in our Salesforce expansion. As a reminder, it's not a separate force for T2 versus T1. It's the same selling model into more call points. So we're just expanding territories, expanding rep headcount, you know, very, very well-established commercial model. And so the fact that we've already, through the quarter, already hired 75% of those heads, we're training them and we're filling those at pace. you know, the guide encompasses an assumption that those reps are in place in a timely fashion.

We'll go next to Issy Kirby at Redburn Atlantic.

Hi, guys. Thanks for taking my question. I just wanted to ask about type 2 again and some of the early adopters that you're seeing, both from a patient and physician perspective. Is there anything standing out in terms of who is adopting pump therapy in the type 2 cohort earlier? And then perhaps just touch upon your marketing strategy and getting these direct consumer leads going. We'd love to hear some more color on what we're doing there. Thanks.

Sure. Thanks, Izzy. It's great to hear from you. Yeah, I'm not sure there's a clear pattern emerging yet about different segments of type 2 patients. What we're seeing is really strong reception across the board. Obviously, as I said before, in our kind of existing call points of endocrinology, some of those physician practices were waiting for the label. And so So we're seeing a really clear type 2 Omnipod 5 adoption in those type 2 practices. And then as we reach down into that layer of PCPs who are writing rapid-acting insulin and a lot of CGM, we're also seeing really strong reception there. So I don't think there's yet a distinction about which patients are adopting. I think it probably does tilt to the intensive insulin using the MDI type 2 patients. But as we get more experience, we'll be able to give more color on that point. Then on the DTC, I think it's really powerful. As we've said before a couple of times, Omnipod 5 lends itself so well to direct-to-consumer promotion because it's so easy to use and it's so easy to adopt and train for and so So it's much easier for us. We have a clear advantage over our pump competitors to go out and talk about Omnipod 5 because patients can see it and visualize how easy it is to use. But in the past, without having the indication for use for Omnipod 5 for type 2, we were generating a lot of leads from type 2 patients when they saw our DTC, but we couldn't actually offer them Omnipod 5 or route them to a physician who would offer them Omnipod 5 because we only had the label for Omnipod Dash. So now what we're seeing is already an improved yield, if you want to think about it that way, where patients see our DTC, they happen to be a type 2 patient, they come on and we can actually help them get onto Omnipot 5. And so, you know, we've been saying for a while that we think we get better yields out of our DTC, and it's clearly paying dividends for us to be able to promote in that way. So we're reaching more physician practices through the Salesforce expansion, and we're reaching more type 2 patients who might be seeing a physician that we're not calling on. And both arms of that promotional strategy, I think, are paying off.

We'll take our next question from Patrick Wood at Morgan Stanley.

Perfect. Thank you so much. I'll keep it to one. I'd love to unpack the OUS side, and you guys gave some really good details there. But, you know, we chatted back in December, you know, mass training going very well to sort of drive its option and clearly having a proper AID solution with Omnipod 5 in the market is really helpful. But I'd love to sort of get a sense for midterm, your view of sustainability there and how much is a function of Omnipod 5 relative to like the speeding up of training, just to unpack that a little bit.

Thanks, Patrick. Yeah, Omnipod 5, and we say this, you know, frequently, Omnipod 5 wins everywhere we take it. And I think it's all of the benefits of Omnipod 5. It's so discreet, wearable, waterproof, disposable, easy to learn to use, provides great glycemic control. It's very unobtrusive. And in most of the markets that we've launched in Europe, we have sensor of choice. And so there's a wide range of sensor of choice for patients, and we'll continue to drive that. As we said in our prepared remarks, we'll be bringing the G7 sensor integration into the UK and Netherlands here in the first quarter and then continue to roll lg7 so very wide choices sensor for patients um and i think it opens up the market you know we do see some conversions from omnipod dash onto omnipod 5 but mostly if you're already on a pump you're locked into a contract even if it's on dash and so what we're seeing is it's omnipod 5 is reaching those mdi patients who have not wanted to try a pump because pumps are seen as difficult and when they see how easy it is to use omnipod 5 and maybe they're already on a CGM and they can just adopt it, it opens up a big portion of the market that previously would not have tried. And that's what we're seeing. And I think it is very sustainable. UK is going well. Germany continues to go well, both past their anniversary, still growing. France and Netherlands, really great early adoption. And already patients on product in our early launch markets, and those are all going really And as we continue to roll out, we'll continue to see Omnipod 5 winning every market we take to is our expectation.

Our next question comes from Margaret. Catch for Andrew with William Blair.

Hi, everyone. This is Macaulay on for Margaret tonight. Thanks for taking our question. Wanted to go a different direction and ask on the discovery platform. Seems like the limited market release has already started, as you mentioned.

So, wondering what the feedback has been thus far, what those utilization trends have been like in the early days, and ultimately, how we should think about that integration rollout moving forward throughout the year yeah thanks my colleague we're really excited about omnipod discover it is early days we're just in limited market release but we have really terrific response from both the physician practices who are using it and from the patients who are using it so you know and we measure all that it's a you know because it's a cloud-based platform we test and measure a lot of responses and we've been running surveys on the users and so on and so you know very high kind of net promoter scores from both practices and the patients and we're really excited to get this out out in the world and into the hands of more and more providers and patients the point behind omnipod discover is it allows us to it's a cloud-based portal it's accessible through a browser so you can see it in your workstation or on your computer if you're in a physician practice patients will typically access it through their smartphone but through any smartphone as long as it has a browser they can they can access the portal and what allows you to see if you're a patient you can see how using your insulin it gives you tips and tricks it tells you about patterns of usage and time and range and and and so on so it really improves the experience gives patients more visibility into their own usage of therapy and then for physicians you can see all your patients in the cloud really streamlined straightforward reporting for physicians to see how their patients are doing and then of course it facilitates conversation so the patient sees the data the physician sees the patient's data, and when they get together, say, in a physician visit, they can talk about, how's your therapy going, what are we seeing? So we're really excited about it. It streamlines workflows for docs and really improves the patient experience on care for patients, and we think it'll drive retention and drive further market share for us.

We'll go next to Larry Bankinson at Wells Fargo.

Good afternoon. Thanks for taking the question. Jim, you've seen the type 2 as a percent of new starts creep up. sequentially now for almost two years each quarter, over 30% now. Do you think you can go above that 35% to 40% where you were with Dash? And it seems like I heard your comment that type one new starts grew also in Q4 in the US. Is the type two launch having a halo effect on type one? Is there any risk that, you know, the focus on type two, you know, has, you know, you take your eye off the ball on type one?

Thanks, Larry. Let me do those in reverse order. You know, it's a huge strategic focus for us to continue to lead growth in both type one and type two. And so, you know, our commercial teams are filled for us. We're focused like a laser on growing both sides of the business. And the beautiful thing about OmniPive 5 is the platform product. So it's the same product for insulin users who are type 1 or type 2 patients, right? So that is a huge emphasis for us this year to continue to be the leader in type 1 and grow the type 1 market and be the first to market in type 2 and grow that as well. In terms of the mix, I think over time we will see type 2 continue to grow as a part of our mix. And obviously, you know this very well, but the total addressable market in type 2 is about three and a half times the size of the total addressable market in type one. There's so much runway left in type one, still only about 40% penetrated, you know, and people in type one are all MDI users. And so, you know, there's 60% of that market ready for their burden to be reduced by Omnipod 5 therapy. The type two is a really big market. So we do think it will grow beyond 30% as a part of our mix. We haven't yet called kind of the ceiling on the mix, but we do expect it to grow well beyond 30% and we expect to continue to grow both sides of the business in type 1 and type 2 with Omnipod 5.

Our next question comes from Mary Teibel at BPIG.

Good afternoon. Thanks for taking the questions. I wanted to ask here a little bit on the margin guidance. Certainly heard that you are looking to invest in R&D a bit this year but when I look at all the drivers that got you to this really strong on growth margin and operating margin here in Q4, a lot of it looks like sustainable dynamics. And so I'm just kind of curious, nothing to sneeze at this 160 bits of expansion in 2025, but just kind of curious, why not a little bit higher? Thanks for taking the questions.

Yes, great. Absolutely, Liz. We're very excited to grow up margin to 160 basis points. Some amount will come from growth margin, as I've mentioned before, as as we have guided here to gross margin over the 70% at 70.5% which has been a long-standing goal of a company here it but we're looking to invest in R&D we were going to be probably in different parts of the cycle 10 to 12 percent of our revenue will be in R&D we're absolutely looking to sales and marketing especially capitalizing here in the type 2 and in the international launches so so that will be areas that we invest our general and administrative expenses will see leverage and that gives us a confidence to the guide here at sixty and a half percent in the process of doing all of that of course we will continue to expand our profitability and and generate the free free cash flow as well to self-invest. So, we're looking forward to strong margin expansion as we move here in 2025.

We'll go next to Mike Kratke at Larynx Partners.

Hi, everyone. Thanks for taking our question. One follow-up on Type 2. How are you thinking about how the competitive landscape could evolve in Type 2 in 2025? And specifically, is your expectation that you'll have a dominant competitive advantage in that segment of the market, even as other competitors get FDA approval and any specific factors to call out there?

Yeah, Mike, thanks for the question. As we've said before, Omnipod 5, you know, obviously we're first to market, and so our competitors do need to demonstrate and follow with their own clinical data and their own clearances. But we think Omnipod 5 just has inherent advantages overall, you know. So Omnipod 5 is the product that came third to market as AID in Type 1 and yet overtook all of the incumbent competitors. And, you know, ever since we launched Omnipod 5, we brought more people off of MDI than all of our competitors combined. You know, that's been a very consistent trend. That was true in Q4. It was true through all of 2024. And so obviously it's the winning offer in the market. And then take that into type 2, where your typical type 2 patient has a lot going on. They tend to have a lot of comorbidities. You know, that's been a barrier for pump adoption already, is that type 2 patients tend to lead pretty complicated lives just with the burden of conditions that they live with. Omnipod 5 proved in Secure T2D to be so simple to use, it really surprised both the participants and the investigators. So as we go into the type 2 market, we're first to market with the product that overtook all of our existing competitors. So we are very confident in our position and we think we have a clear right to win in the type 2 market, even if our competitors are able to follow and get their own indications.

We'll take Jason Bedford from Raymond James for our next question.

Good afternoon and congrats on the progress here. So maybe just a quick one on the 25 guidance. I appreciate the comment that new customer starts in the U.S. will grow year over year in 25. But I'm just wondering, embedded in this forecast, are you assuming that new type 1 users also grow year over year? or is all the growth coming from the type two things?

Thanks for the question, Jason. Yeah, it's a strategic imperative for us to continue to lead and grow in type one and type two. There's so much runway in type one in the US where the clear market leader overall and clear leader in NCS and we're first to market in type two. So that's a strategic imperative for us. We have not broken out in guidance what those splits look like, but we're focused on growing both markets.

Next, we'll move to Matt Taylor at Jeffries.

Hi, thanks for taking the question. I just wanted to kind of check the box on this one. I think some investors are concerned about competition in the pharmacy channel and pricing, and so I wanted to see if you could give us an update there and maybe kind of answer the question for an investor who might be worried about that in the future. Talk about how you see that playing out and why those aren't major risks for you, how you can defend against that with your mobile.

Yeah, thanks, Matt. We have inherent advantages in the Pharmacy Channel that, you know, kind of, there are multiple sides to that. The first thing is we have a lot of experience now in the Pharmacy Channel. And, you know, we first started our work to enter the Pharmacy Channel in the 20-teens. We signed our first contract seven years ago, I think, 2017, seven and a half years ago, 2017. We then ramped coverage, and it took us a few years to get coverage. We were doing that first with Omnipod Dash and then with Omnipod 5. So we're now 95% covered lives with the pharmacy benefit. We're also the only insulin delivery therapy, the only AID therapy on the market that has Part D reimbursement, which is really, really important. So we get reimbursed through the pharmacy benefit as opposed through the DME HICS-PICS benefit, right? And so that's a clear advantage. And then on top of that, you know, so we have a lot of experience. We've built a lot of muscle and organizational capabilities. We actually have the right reimbursement category. Our product fits the pharmacy channel because, you know, you go and pick up your pods in a box where you get your insulin. And so it's a very straightforward kind of pharmacy-style experience for our customers. And we have relationships with all the PBMs. And then, you know, PBMs make money on volume and rebate, and we do significant volume through the pharmacy channel. So, you know, we have very good relationships, and we also have, you know, beneficial contracts in both directions for us. So we feel very confident in our position. We think pharmacy is a very clear moat. We're very conscious that we have a number of competitors talking about how they can do it. They have to do all those things. They have to build the muscle. They have to get the contracts. They have to get the coverage. they also have an inherent disadvantage in that a durable pump does not fit the pharmacy channel very well. It doesn't fit it in terms of stocking, delivery, patient experience. It doesn't fit it in terms of revenue recognition and co-pay and pay-as-you-go economics. And so, you know, we're conscious that competitors are trying to follow almost everything we do, for that matter. We're very mindful and respectful of our competitors, but we think we have very distinct modes that we've built around the pharmacy channel.

We'll move next to Matthew O'Brien with Piper Sandler.

Hey, this is Phil on for Matt. Thanks for taking our questions and congrats on the really nice Q4. I just wanted to dig into the domestic guidance for the full year, maybe a little bit more, you know, guiding U.S. Omnipod to call it 18%, which is lower than last year, in a year that will, you know, see full contribution from Type 2, iOS, Libre integration.

I guess with these tailwinds why is you know high teens the number you know the right place to set expectations especially as it relates to being the first mover in the you know quite honestly massive type 2 opportunity uh great you know thanks for the question we we do not feel like we're slowing down uh we will for sure be um accelerating uh especially as the year progresses i want to take a step back in the us for a second and comment a little bit on on some dynamics we anticipate our growth to come from volume in 2024 we were not a hundred percent in the pharmacy channel so at the beginning of the year as we progressed through the year so in the earlier quarters and we had some benefit back in 2024 from price and that is not that's a headwind as we look at variance of growth and that normalizes as we go through the year as as of the third quarter pretty much almost 100 percent of our volume was going to pharmacy so that's one consideration there's a little bit of a price headwind but not that there's a headway it's just as you as you do it as a comparison and we're extremely excited by our guidance uh the team internally here is completely uh striving for the highest of our guidance and we will continue to update as the year progresses and and we're

very excited by the 16 to 20 and of course aiming as always for the high end of our guide yeah and I'll just add you know Phil you know we have a pretty strong track record of achieving our goals and so we're we're focused like a laser on continuing to deliver growth we were really happy to deliver our ninth straight year of 20% plus growth on the top line. And we have strong ambitions for continuing to grow the business.

We'll take our next question from Chris Pusquale with Nefron Research.

Thanks. I wanted to push a little bit on the margin guidance. So if my math is right, your 24 gross margin would have been just slightly below 70 and a half, if not for that one-time charge back in 2Q. So guidance is effectively calling it for it to be flat despite Malaysia ramping, despite improved pricing OUS. So can you talk a little bit about the offsets there? And then maybe more importantly, now that you've reached this 70% milestone, how much higher do you think you can get gross margin longer term? Should we expect it to flatten out in this area or is it an opportunity to go meaningfully higher?

Yes, no, great. You know, we're very proud of that achievement of fourth quarter being at 72 percent gross margin and guiding to the 70 and a half and the team has done a fantastic job as I've mentioned before we benefited from tailwinds of pricing that has helped our gross margin expansion and now we're achieving you know an industry leading level here and we're going to continue to push growth at a more uh moderate level and you're absolutely correct uh with the ugly plug go charge uh it gets us close i do want to point a headwind um that um that it's out there as everybody knows our international um pricing is lower than our us and as i thought as we uh materialized in 2024 we grew faster in international than us as a mix and as we look at the full year guidance here for 25 that continues so that presents a little bit of a headwind in terms of gross margin but we're looking to more than offset that by improvements in our manufacturing but by our malaysia facility becoming a creative here into the second half of 2025 and we're really positioned well to continue to drive our growth margin into the future, but I go back and I indicate it's going to be at a much more moderate pace now that we're at the industry-leading levels.

We'll take our next question from Joanne Wunsch at Citi.

Good evening, and thank you for taking the questions.

I'm fascinated by the questions that have been answered or asked so far because it follows our conversations with investors, and so I'm going to pose to you what I'm frequently asked, which is, which is more important over the next 12 to 18 months for revenue growth? Is it type two in the adoption here in the United States, or is it the international opportunity? And would that answer be different if we go past the 18-month time frame? Thank you.

Joanne, that's a great question. And what I'll say is the reason we've laid them – in effect, we've laid that all out as strategic imperative, right? Our three imperatives are to extend, you know, lead with the platform, you know, drive the platform, lead growth in type 1 and type 2 in the U.S., both of those are big markets that have lots of growth available. And then international rollout is big. And so, you know, we haven't, we've very deliberately not tried to, you know, put a premium on geography in terms of growth because there's so much growth opportunity. And what I would say is we're really excited about being able to provide more color on all of that in June at our investor day. So I hope you'll be able to come on June 5th to act in and join us for investor day. This concludes our Q&A section i would like to turn the conference back to jim hollingshead thank you all for joining us today we're really excited about the path for insulate ahead and we look forward to updating you as we make progress against all of these strategic objectives i just want to again reiterate my great gratitude to the entire global insulate team for your dedication and hard work you delivered a ton to our patients in 2024 and i look forward to continuing to reach more patients and grow the business in 25 and beyond thank you everybody ladies and gentlemen this concludes today's conference thank you for your participation and have a wonderful day you may all disconnect