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Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_____________________________________________________
Form 10-Q
 _____________________________________________________
☒QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2024
OR
☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File Number 001-33462
___________________________________________________________
INSULET CORPORATION
(Exact name of Registrant as specified in its charter)
__________________________________________________________________________________________________
Delaware 04-3523891
(State or Other Jurisdiction of
Incorporation or Organization)		 (I.R.S. Employer
Identification No.)
100 Nagog ParkActonMassachusetts 01720
(Address of Principal Executive Offices) (Zip Code)
Registrant’s Telephone Number, Including Area Code: (978) 600-7000
________________________________________________________________________________________________________
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ☒     No  ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  ☒    No  ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. 
Large accelerated filer☒Accelerated filer☐
Non-accelerated filer☐Smaller reporting company☐
Emerging growth company☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ☐    No  ☒

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, $0.001 Par Value Per SharePODDThe NASDAQ Stock Market, LLC

As of August 1, 2024, the registrant had 70,115,482 shares of common stock outstanding.


TABLE OF CONTENTS
 
Condensed Consolidated Balance Sheets (Unaudited) as of June 30, 2024 and December 31, 2023
Condensed Consolidated Statements of Income (Unaudited) for the three and six months ended June 30, 2024 and 2023
Condensed Consolidated Statements of Comprehensive Income (Unaudited) for the three and six months ended June 30, 2024 and 2023
Condensed Consolidated Statements of Stockholders' Equity (Unaudited) for the three and six months ended June 30, 2024 and 2023
Condensed Consolidated Statements of Cash Flows (Unaudited) for the six months ended June 30, 2024 and 2023

Table of Contents
PART I - FINANCIAL INFORMATION
Item 1.
Condensed Consolidated Financial Statements (Unaudited)
INSULET CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(in millions, except share and per share data)June 30, 2024December 31, 2023
ASSETS
Current Assets
Cash and cash equivalents$821.0 $704.2 
Accounts receivable trade, less allowance for credit losses of $2.8 and $2.5
249.0 240.2 
Accounts receivable trade, net — related party99.6 119.5 
Inventories430.9 402.6 
Prepaid expenses and other current assets148.3 116.4 
Total current assets1,748.8 1,582.9 
Property, plant and equipment, net677.9 664.9 
Other intangible assets, net98.5 98.7 
Goodwill51.7 51.7 
Deferred tax assets
141.1 1.8 
Other assets (includes $23.4 and $31.3 at fair value)
163.6 188.2 
Total assets$2,881.6 $2,588.2 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities
Accounts payable$76.8 $19.2 
Accrued expenses and other current liabilities365.0 373.7 
Accrued expenses and other current liabilities — related party6.3 8.9 
Current portion of long-term debt37.9 49.4 
Total current liabilities486.0 451.2 
Long-term debt, net1,359.9 1,366.4 
Other liabilities37.3 37.9 
Total liabilities1,883.2 1,855.5 
Commitments and contingencies (Note 12)
Stockholders’ Equity
Preferred stock, $.001 par value, 5,000,000 authorized; none issued and outstanding
— — 
Common stock, $.001 par value, 100,000,000 authorized; 70,112,039 and 69,907,289 issued and outstanding
0.1 0.1 
Additional paid-in capital1,140.6 1,102.6 
Accumulated deficit(137.9)(378.0)
Accumulated other comprehensive (loss) income
(4.4)8.0 
Total stockholders’ equity998.4 732.7 
Total liabilities and stockholders’ equity$2,881.6 $2,588.2 
The accompanying notes are an integral part of these condensed consolidated financial statements.
3
Table of Contents
INSULET CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
 
 Three Months Ended June 30,Six Months Ended June 30,
(in millions, except share and per share data)2024202320242023
Revenue$341.2 $287.3 $671.1 $548.6 
Revenue from related party147.3 109.2 259.1 206.0 
Total revenue488.5 396.5 930.2 754.6 
Cost of revenue157.6 131.6 292.5 249.2 
Gross profit330.9 264.9 637.7 505.4 
Research and development expenses53.9 55.1 104.1 105.2 
Selling, general and administrative expenses222.4 178.7 422.1 341.4 
Operating income
54.6 31.1 111.5 58.8 
Interest expense, net
(11.0)(9.7)(21.7)(19.1)
Interest income
9.3 7.3 18.7 13.8 
Other expense, net
(1.8)(0.2)(2.5)(0.4)
Income before income taxes
51.1 28.5 106.0 53.1 
Income tax benefit (expense)
137.5 (1.2)134.1 (2.0)
Net income
$188.6 $27.3 $240.1 $51.1 
Earnings per share:
Basic$2.69 $0.39 $3.43 $0.73 
Diluted$2.59 $0.39 $3.32 $0.73 
Weighted-average number of common shares outstanding
(in thousands):
Basic70,062 69,741 70,010 69,662 
Diluted73,802 70,142 73,771 70,119 
The accompanying notes are an integral part of these condensed consolidated financial statements.
4
Table of Contents
INSULET CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(UNAUDITED)
 Three Months Ended June 30,Six Months Ended June 30,
(in millions)2024202320242023
Net income$188.6 $27.3 $240.1 $51.1 
Other comprehensive (loss) income, net of tax:
Foreign currency translation adjustment(1.1)(2.4)(7.7)(0.7)
Unrealized (loss) gain on cash flow hedges, net of tax
(2.8)2.8 (4.7)(3.0)
Other comprehensive (loss) income, net of tax
(3.9)0.4 (12.4)(3.7)
Comprehensive income
$184.7 $27.7 $227.7 $47.4 
The accompanying notes are an integral part of these condensed consolidated financial statements.
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INSULET CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(UNAUDITED)

Three Months Ended June 30, 2024
 Common StockAdditional
Paid-in
Capital		Accumulated
Deficit
Accumulated Other Comprehensive Loss
Total
Shareholders’
Equity
(dollars in millions)Shares
(in thousands)		Amount
Balance at March 31, 202470,020 $0.1 $1,117.6 $(326.5)$(0.5)$790.7 
Exercise of options to purchase common stock41 — 1.1 — — 1.1 
Issuance of shares for employee stock purchase plan40 — 6.0 — — 6.0 
Stock-based compensation expense— — 17.0 — — 17.0 
Restricted stock units vested, net of shares withheld for taxes11 — (1.1)— — (1.1)
Net income— — — 188.6 — 188.6 
Other comprehensive loss, net of tax— — — — (3.9)(3.9)
Balance at June 30, 202470,112 $0.1 $1,140.6 $(137.9)$(4.4)$998.4 


Three Months Ended June 30, 2023
 Common StockAdditional
Paid-in
Capital		Accumulated
Deficit		Accumulated Other Comprehensive IncomeTotal
Shareholders’
Equity
(dollars in millions)Shares
(in thousands)		Amount
Balance at March 31, 202369,694 $0.1 $1,047.3 $(560.5)$15.9 $502.8 
Exercise of options to purchase common stock73 — 6.3 — — 6.3 
Issuance of shares for employee stock purchase plan23 — 5.5 — — 5.5 
Stock-based compensation expense— — 13.1 — — 13.1 
Restricted stock units vested, net of shares withheld for taxes14 — (1.5)— — (1.5)
Net income— — — 27.3 — 27.3 
Other comprehensive income— — — — 0.4 0.4 
Balance at June 30, 202369,804 $0.1 $1,070.7 $(533.2)$16.3 $553.9 
The accompanying notes are an integral part of these condensed consolidated financial statements.
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Six Months Ended June 30, 2024
 Common StockAdditional
Paid-in
Capital		Accumulated
Deficit
Accumulated Other Comprehensive Income (Loss)
Total
Shareholders’
Equity
(dollars in millions)Shares
(in thousands)		Amount
Balance at December 31, 202369,907 $0.1 $1,102.6 $(378.0)$8.0 $732.7 
Exercise of options to purchase common stock96 — 6.9 — — 6.9 
Issuance of shares for employee stock purchase plan40 — 6.0 — — 6.0 
Stock-based compensation expense— — 31.2 — 31.2 
Restricted stock units vested, net of shares withheld for taxes69 — (6.1)— — (6.1)
Net income— — — 240.1 — 240.1 
Other comprehensive loss, net of tax— — — — (12.4)(12.4)
Balance at June 30, 202470,112 $0.1 $1,140.6 $(137.9)$(4.4)$998.4 


Six Months Ended June 30, 2023
 Common StockAdditional
Paid-in
Capital		Accumulated
Deficit
Accumulated Other Comprehensive Income
Total
Shareholders’
Equity
(dollars in millions)Shares
(in thousands)		Amount
Balance at December 31, 202269,511 $0.1 $1,040.6 $(584.3)$20.0 $476.4 
Exercise of options to purchase common stock183 — 12.3 — — 12.3 
Issuance of shares for employee stock purchase plan23 — 5.5 — — 5.5 
Stock-based compensation expense— — 25.2 — — 25.2 
Restricted stock units vested, net of shares withheld for taxes87 — (12.9)— — (12.9)
Net income— — — 51.1 — 51.1 
Other comprehensive loss— — — — (3.7)(3.7)
Balance at June 30, 202369,804 $0.1 $1,070.7 $(533.2)$16.3 $553.9 
The accompanying notes are an integral part of these condensed consolidated financial statements.
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INSULET CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
Six Months Ended June 30,
(in millions)20242023
Cash flows from operating activities
Net income$240.1 $51.1 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization38.0 35.3 
Stock-based compensation expense31.2 25.2 
Deferred income taxes
(139.2)0.3 
Non-cash interest expense3.8 3.0 
Provision for credit losses0.6 2.0 
Other4.5 0.7 
Changes in operating assets and liabilities:
Accounts receivable(11.2)(27.1)
Accounts receivable — related party19.9 (18.2)
Inventories(30.3)(62.7)
Prepaid expenses and other assets(15.7)(19.8)
Accounts payable56.4 74.5 
Accrued expenses and other liabilities(11.4)(19.7)
Accrued expenses and other liabilities — related party(2.6)(0.1)
Net cash provided by operating activities184.1 44.5 
Cash flows from investing activities
Capital expenditures(44.6)(26.2)
Investments in developed software(4.3)(3.9)
Acquisition of intangible assets— (25.1)
Acquisition of a business— (3.0)
Cash paid for investments— (7.0)
Net cash used in investing activities(48.9)(65.2)
Cash flows from financing activities
Repayment of equipment financings(12.2)(9.9)
Repayment of financing lease(5.9)— 
Repayment of term loan(2.5)(2.5)
Repayment of mortgage(1.2)(1.1)
Proceeds from exercise of stock options6.9 12.3 
Proceeds from issuance of common stock under employee stock purchase plan6.0 5.5 
Payment of withholding taxes in connection with vesting of restricted stock units(6.1)(12.9)
Other— (0.3)
Net cash used in financing activities(15.0)(8.9)
Effect of exchange rate changes on cash and cash equivalents(3.4)— 
Net increase (decrease) in cash, cash equivalents and restricted cash116.8 (29.6)
Cash, cash equivalents and restricted cash at beginning of period
704.2 689.7 
Cash, cash equivalents and restricted cash at end of period
$821.0 $660.1 
The accompanying notes are an integral part of these condensed consolidated financial statements.
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INSULET CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
Note 1. Basis of Presentation and Summary of Significant Accounting Policies
Basis of Presentation
The accompanying financial statements reflect the consolidated income of Insulet Corporation and its subsidiaries (“Insulet” or the “Company”). The unaudited consolidated financial statements have been prepared in United States dollars, in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The preparation of the consolidated financial statements in conformity with GAAP requires management to make use of estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities, and the reported amounts of revenues and expenses. Actual results may differ from those estimates. In management’s opinion, the unaudited consolidated financial statements contain all normal recurring adjustments necessary for a fair statement of the interim results reported. Operating results for the six months ended June 30, 2024 are not necessarily indicative of the results that may be expected for the full year ending December 31, 2024, or for any other subsequent interim period.
The year-end balance sheet data was derived from audited consolidated financial statements. These unaudited consolidated financial statements do not include all of the annual disclosures required by GAAP; accordingly, they should be read in conjunction with the Company’s audited consolidated financial statements contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023.
Related Party Transactions
The Company has a distribution agreement with a related party that contains terms consistent with those prevailing at arm’s length. The spouse of one of the members of the Company’s Board of Directors is an executive officer of the distributor.
Shipping and Handling Costs
Shipping and handling costs included in selling, general and administrative expenses were $4.0 million and $3.5 million for the three months ended June 30, 2024 and 2023, respectively, and were $7.4 million and $5.8 million for the six months ended June 30, 2024 and 2023, respectively.
Fair Value Measurements
Fair value is defined as the price that would be received from the sale of an asset or paid to transfer a liability in the principal or most advantageous market in an orderly transaction between market participants on the measurement date. To measure fair value of assets and liabilities, the Company uses the following fair value hierarchy based on three levels of inputs:
Level 1—observable inputs, such as quoted prices in active markets for identical assets or liabilities;
Level 2—significant other observable inputs that are observable either directly or indirectly; and
Level 3—significant unobservable inputs for which there are little or no market data, which require the Company to develop its own assumptions.
Judgement is involved in estimating inputs, such as discount rates, used in Level 3 fair value measurements. Changes to these inputs can have a significant effect on fair value measurements and amounts that could be realized.
Certain of the Company’s financial instruments, including accounts receivable, accounts payable, accrued expenses and other liabilities, are carried at cost, which approximates their fair value because of their short-term maturity.
Note 2. Revenue and Contract Acquisition Costs
The following table summarizes the Company’s disaggregated revenue:
Three Months Ended June 30,Six Months Ended June 30,
(in millions)2024202320242023
U.S. Omnipod$352.3 $276.8 $670.0 $535.8 
International Omnipod128.1 103.7 243.4 202.3 
Total Omnipod products
480.4 380.5 913.4 738.1 
Drug Delivery8.1 16.0 16.8 16.5 
Total revenue$488.5 $396.5 $930.2 $754.6 
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The percentages of total revenue for customers that represent 10% or more of total revenue were as follows:
Three Months Ended June 30,Six Months Ended June 30,

2024202320242023
Distributor A29 %28 %27 %28 %
Distributor B22 %22 %26 %22 %
Distributor C
23 %17 %22 %16 %
Deferred revenue related to unsatisfied performance obligations was included in the following consolidated balance sheet accounts in the amounts shown:
(in millions)
June 30, 2024December 31, 2023
Accrued expenses and other current liabilities$21.9 $15.4 
Other liabilities2.0 1.9 
Total deferred revenue$23.9 $17.3 
Revenue recognized from amounts included in deferred revenue at the beginning of each respective period was as follows:
Three Months Ended June 30,Six Months Ended June 30,
(in millions)2024202320242023
Deferred revenue recognized$4.0 $2.3 $7.2 $12.2 
Contract acquisition costs, representing capitalized commission costs related to new customers, net of amortization, were included in the following consolidated balance sheet captions in the amounts shown:
(in millions)June 30, 2024December 31, 2023
Prepaid expenses and other current assets$17.7 $16.6 
Other assets34.7 32.0 
Total capitalized contract acquisition costs, net$52.4 $48.6 
The Company recognized $4.4 million and $4.0 million of amortization of capitalized contract acquisition costs during the three months ended June 30, 2024 and 2023, respectively, and recognized $8.6 million and $8.0 million of amortization of capitalized contract acquisition costs during the six months ended June 30, 2024 and 2023, respectively.
Note 3. Accounts Receivable, Net
At the end of each period, accounts receivable were comprised of the following:
(in millions)June 30, 2024December 31, 2023
Accounts receivable trade, net$242.6 $234.5 
Unbilled receivable6.4 5.7 
Accounts receivable, net$249.0 $240.2 
The percentages of total net accounts receivable trade for customers that represent 10% or more of total net accounts receivable trade were as follows:

June 30, 2024December 31, 2023
Distributor A32 %35 %
Distributor B28 %25 %
Distributor C
17 %18 %
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The following table presents the activity in the allowance for credit losses, which is comprised primarily of the Company’s direct consumer receivable portfolio. The allowance for credit losses of other portfolios is insignificant.
Three Months Ended June 30,Six Months Ended June 30,
(in millions)2024202320242023
Credit losses at beginning of year$3.5 $3.1 $2.5 $2.5 
Provision for expected credit losses(0.6)0.8 0.6 2.0 
Write-offs charged against allowance(0.1)(0.9)(0.3)(1.6)
Recoveries of amounts previously reserved— 0.1 — 0.2 
Credit losses at the end of period
$2.8 $3.1 $2.8 $3.1 
Note 4. Inventories
At the end of each period, inventories were comprised of the following:
(in millions)June 30, 2024December 31, 2023
Raw materials$141.1 $118.2 
Work in process95.7 60.6 
Finished goods194.1 223.8 
    Total inventories$430.9 $402.6 
Amounts charged to the consolidated statements of income for excess and obsolete inventory, including related to the decision not to commercialize Omnipod GO, were $11.9 million and $0.2 million for the three months ended June 30, 2024 and 2023, and were $14.5 million and $2.4 million for the six months ended June 30, 2024 and 2023, respectively.
Note 5. Cloud Computing Costs
Capitalized costs to implement cloud computing arrangements at cost and accumulated amortization were as follows: 
(in millions)June 30, 2024December 31, 2023
Short-term portion$28.2 $26.4 
Long-term portion126.1 116.9 
Total capitalized implementation costs154.3 143.3 
Less: accumulated amortization(48.2)(36.6)
Capitalized implementation costs, net$106.1 $106.7 
Amortization expense was $6.5 million and $5.0 million for the three months ended June 30, 2024 and 2023, respectively, and was $12.6 million and $9.3 million for the six months ended June 30, 2024 and 2023, respectively.
Note 6. Goodwill and Other Intangible Assets, Net
The carrying amount of goodwill was $51.7 million at both June 30, 2024 and December 31, 2023.
The gross carrying amount, accumulated amortization and net book value of intangible assets at the end of each period were as follows:
June 30, 2024December 31, 2023
(in millions)
Gross
Carrying Amount		Accumulated AmortizationNet
Book Value		Gross
Carrying Amount		Accumulated AmortizationNet
Book Value
Customer relationships$43.2 $(32.2)$11.0 $43.2 $(30.9)$12.3 
Internal-use software47.5 (14.6)32.9 43.1 (13.9)29.2 
Developed technology27.4 (4.0)23.4 27.4 (3.0)24.4 
Patents36.2 (5.0)31.2 36.2 (3.4)32.8 
Total intangible assets$154.3 $(55.8)$98.5 $149.9 $(51.2)$98.7 
Amortization expense for intangible assets was $2.4 million and $2.7 million for the three months ended June 30, 2024 and 2023, respectively, and was $4.8 million and $5.1 million for the six months ended June 30, 2024 and 2023, respectively.
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Note 7. Investments
Equity Securities
Refer to “Assets Measured at Fair Value on a Non-Recurring Basis” in Note 10 for disclosures regarding investments in equity securities without readily determinable fair values.
Debt Securities
During the three months ended June 30, 2023, the Company made a strategic investment in debt securities of a privately held entity in the amount of $5.0 million, which is included in other assets on the consolidated balance sheets. The debt securities mature in December 2024 unless converted earlier. The amortized cost basis of the debt securities was $5.0 million at both June 30, 2024 and December 31, 2023. The amount of interest earned on the investment for the three and six months ended June 30, 2024 and 2023 was insignificant. Refer to Note 10 for the fair values.
Other
During the six months ended June 30, 2023, the Company made a strategic investment in a privately held entity in the amount of $2.0 million. The investment is a debt security with embedded derivatives and is accounted for by applying the fair value option, as this approach best reflects the underlying economics of the transaction. The fair value of the investment is calculated using a combination of the market approach and income approach methodologies and is reported within other assets on the consolidated balance sheets. During three and six months ended June 30, 2024, a $1.8 million unrealized loss on the investment was recorded in other expense, net in the consolidated statements of income. Refer to Note 10 for the fair values.
Note 8. Accrued Expenses and Other Current Liabilities
The components of accrued expenses and other current liabilities were as follows:
(in millions)June 30, 2024December 31, 2023
Accrued rebates$132.6 $144.0 
Employee compensation and related costs91.2 122.0 
Professional and consulting services50.3 34.1 
Other90.9 73.6 
Accrued expenses and other current liabilities$365.0 $373.7 
Product Warranty Costs
The Company provides a four-year warranty on Personal Diabetes Managers (“PDMs”) and Controllers sold in the United States and Europe and a five-year warranty on PDMs sold in Canada and may replace Pods that do not function in accordance with product specifications. The Company estimates its warranty obligation at the time the product is shipped based on historical experience and the estimated cost to service the claims. Cost to service the claims reflects the current product cost, reclaim costs, shipping and handling costs and direct and incremental distribution and customer service support costs. Since the Company continues to introduce new products and versions, the anticipated performance of the product over the warranty period is also considered in estimating warranty reserves. Warranty expense is recorded in cost of revenue in the consolidated statements of income. Reconciliations of the changes in the Company’s product warranty liability were as follows: 
Three Months Ended June 30,Six Months Ended June 30,
(in millions)2024202320242023
Product warranty liability at beginning of period$11.3 $39.2 $10.3 $62.1 
Warranty expense5.7 3.3 11.2 8.8 
Change in estimate(0.4)(0.8)(0.4)(8.8)
Warranty fulfillment(5.0)(20.4)(9.5)(40.8)
Product warranty liability at the end of period$11.6 $21.3 $11.6 $21.3 
During the fourth quarter of 2022, the Company issued two voluntary medical device correction notices (“MDCs”), one for its Omnipod DASH PDM relating to its battery and the other for its Omnipod 5 Controller relating to its charging port and cable. During the six months ended June 30, 2023, the Company revised the estimated liability for these MDCs by $8.8 million. This change in estimate primarily resulted from lower shipping costs for replacement DASH PDMs and lower expected distribution costs for Omnipod 5 Controllers. The liability related to the MDCs included in product warranty liability at December 31, 2023 was insignificant and no amount was remaining as of June 30, 2024.
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Note 9. Debt
The components of debt consisted of the following:
(in millions)
June 30, 2024December 31, 2023
Equipment Financing due May 2024
$— $2.7 
Equipment Financing due November 2025
12.5 15.2 
5.15% Mortgage due November 2025
62.1 63.3 
0.375% Convertible Senior Notes due September 2026
800.0 800.0 
Equipment Financing
10.5 12.7 
Term Loan due May 2028
485.0 487.5 
Revolving Credit Facility expires June 2028— — 
Equipment Financing due July 2028
26.2 29.0 
Finance lease obligation
16.2 22.9 
Unamortized debt discount(5.6)(6.4)
Debt issuance costs(9.1)(11.1)
Total debt, net1,397.8 1,415.8 
Less: current portion37.9 49.4 
Total long-term debt, net$1,359.9 $1,366.4 
0.375% Convertible Senior Notes
The Company’s 0.375% Convertible Senior Notes due September 2026 (the “Convertible Notes”) have an effective interest rate of 0.76%. The components of interest expense related to the Convertible Notes for the were as follows:
Three Months Ended June 30,Six Months Ended June 30,
(in millions)
2024202320242023
Contractual interest expense
$0.7 $0.7 $1.5 $1.5 
Amortization of debt issuance costs
0.8 0.8 1.5 1.5 
  Total interest recognized on the Convertible Notes
$1.5 $1.5 $3.0 $3.0 
As of June 30, 2024 and December 31, 2023, unamortized issuance costs associated with the Convertible Notes were $6.6 million and $8.2 million, respectively.
The Convertible Notes are convertible into cash, shares of the Company’s common stock, or the combination of cash and shares of common stock, at the Company’s election, at an initial conversion rate of 4.4105 shares of common stock per $1,000 principal amount of the notes, which is equivalent to a conversion price of $226.73 per share, subject to adjustment under certain circumstances. The notes will be convertible at the holder’s election, from June 1, 2026 through August 28, 2026 and prior to then under certain circumstances as set forth in the agreement. Additionally, on or after September 6, 2023, the Company may redeem for cash all or a portion of the Convertible Notes, if its stock price has been equal to or greater than $294.75 for at least 20 of the prior 30 consecutive trading days including the date which the Company provides notice of redemption.
Additional interest of 0.5% per annum is payable if the Company fails to timely file required documents or reports with the Securities and Exchange Commission (“SEC”). If the Company merges or consolidates with a foreign entity, the Company may be required to pay additional taxes. The Company determined that the higher interest payments and tax payments required in certain circumstances were embedded derivatives that should be bifurcated and accounted for at fair value. The Company assessed the value of the embedded derivatives at each balance sheet date and determined they had nominal value.
In conjunction with the issuance of the Convertible Notes, the Company purchased Capped Calls on the Company’s common stock with certain counterparties to reduce the potential dilution to its common stock (or, in the event the conversion is settled in cash, to provide a source of cash to settle a portion of its cash payment obligation) if, at the time of conversion, its stock price exceeds the conversion price under the Convertible Notes. The Capped Calls have an initial strike price of $335.90 per share, which represents a premium of 100% over the last reported sale price of the Company’s common stock of $167.95 per share on the date of the transaction. The Capped Calls cover 3.5 million shares of common stock and are recorded within stockholders’ equity on the consolidated balance sheets.
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Equipment Financing
In 2023, the Company entered into an arrangement under which the Company may obtain up to $24.0 million of financing for manufacturing equipment. The Company is involved in the construction of the manufacturing equipment; accordingly, it is included in property, plant and equipment on the consolidated balance sheet at both June 30, 2024 and December 31, 2023. The Company’s obligation reflects payments made to date by the third-party bank to the equipment manufacturer, net of discount and less repayment of principal. The financing obligation will mature 36 months following completion of construction.
Senior Secured Credit Agreement
In January 2024, the Company amended its Term Loan due May 2028 to bear interest at a rate of Secured Overnight Financing Rate (“SOFR”) plus 3.0%, with a 0% SOFR floor. At the same time, the Company amended its Revolving Credit Facility such that outstanding borrowings bear interest at a rate of SOFR plus an applicable margin of 2.375% to 3.0% based on the Company’s net leverage ratio and credit rating.
In August 2024, the Company amended its Term Loan to bear interest at a rate of SOFR plus 2.5% and extended the term to August 2031.
Carrying Value
At the end of each period, the carrying value of the Company’s debt was comprised of the following:
(in millions)
June 30, 2024December 31, 2023
Term Loan
$477.7 $479.2 
Convertible Notes
793.3 791.8 
Equipment financings
49.0 59.3 
Mortgage
61.6 62.6 
Finance lease obligation
16.2 22.9 
  Total debt, net
$1,397.8 $1,415.8 
Note 10. Financial Instruments and Fair Value
Financial Instruments Disclosed at Fair Value
The following tables provide a summary of the significant financial instruments that are disclosed at fair value on a recurring basis as of June 30, 2024 and December 31, 2023:
Fair Value Measurements at June 30, 2024
(in millions)Level 1Level 2Level 3Total
Term Loan(1)
$487.1 $— $— $487.1 
Convertible Notes(2)
— 875.8 — 875.8 
Equipment financings(3)
— — 49.0 49.0 
Mortgage(3)
— — 61.6 61.6 
Total
$487.1 $875.8 $110.6 $1,473.5 
Fair Value Measurements at December 31, 2023
(in millions)Level 1Level 2Level 3Total
Term Loan(1)
$490.2 $— $— $490.2 
Convertible Notes(2)
— 928.7 — 928.7 
Equipment financings(3)
— — 59.3 59.3 
Mortgage(3)
— — 62.6 62.6 
Total
$490.2 $928.7 $121.9 $1,540.8 
(1) Fair value was determined using quoted market prices.
(2) Fair value was determined using market prices obtained from third-party pricing sources.
(3) Fair value approximates carrying value and was determined using the cost basis.

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Assets Measured at Fair Value on a Recurring Basis
The following tables provide a summary of assets that are measured at fair value on a recurring basis as of June 30, 2024 and December 31, 2023:
Fair Value Measurements at June 30, 2024
(in millions)Level 1Level 2Level 3Total
Cash(1)
$117.0 $— $— $117.0 
Money market mutual funds(1)
598.5 — — 598.5 
Term deposits(1)
— 105.5 — 105.5 
Interest rate swaps(2)
— 16.7— 16.7
Debt securities(3)
— — 4.74.7
Other investments(3)
— — 2.02.0
Total assets
$715.5 $122.2 $6.7 $844.4 
Fair Value Measurements at December 31, 2023
(in millions)Level 1Level 2Level 3Total
Cash(1)
$103.7 $— $— $103.7 
Money market mutual funds(1)
547.0 — — 547.0 
Term deposits(1)
— 53.5 — 53.5 
Interest rate swaps(2)
— 22.8 — 22.8 
Debt securities(3)
— — 4.7 4.7 
Other investments(3)
— — 3.8 3.8 
Total assets
$650.7 $76.3 $8.5 $735.5 
(1) Cash and cash equivalents are carried at face amounts, which approximate their fair values.
(2) Fair value represents the estimated amounts the Company would receive or pay to terminate the contracts and is determined using industry standard valuation models and market-based observable inputs, including credit risk and interest rate yield curves. The fair value of the swaps is included in other assets on the consolidated balance sheets.
(3) Fair value is determined using industry standard valuation models and market-based unobservable inputs, including credit spread and risk free rate ranging from 3.8% to 5.6%.
Judgement is involved in estimating inputs, such as discount rates, used in Level 3 fair value measurements. Changes to these inputs can have a significant effect on fair value measurements and amounts that could be realized. There were no changes in the fair values of the Level 3 debt securities during the three and six months ended June 30, 2024 or the three and six months ended June 30, 2023.
Below is a reconciliation of changes in fair value of other investments for both the three and six months ended June 30, 2024. There were no changes in the fair value of other investments during the three and six months ended June 30, 2023.
(in millions)Other Investments
Balance at beginning of both periods
$3.8 
Purchases— 
Unrealized loss included in other expense, net
(1.8)
Balance at the end of both periods
$2.0 
Assets Measured at Fair Value on a Non-Recurring Basis
As of June 30, 2024 and December 31, 2023, the total carrying value of the Company’s investments in equity securities without readily determinable fair values was $9.7 million and was included within other assets on the consolidated balance sheets. These investments are carried at cost less impairment, if any. If an observable price change in orderly transactions for the identical or similar investment in the same issuer is identified, the investments are measured at fair value as of the date that the observable transaction occurred and categorized as Level 2 in the fair value hierarchy. As of both June 30, 2024 and December 31, 2023 cumulative gains were $0.8 million.
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Note 11. Derivative Instruments
The Company manages interest rate exposure through the use of interest rate swap transactions with financial institutions acting as principal counterparties. Under the Company’s interest rate swap agreements that expire on April 30, 2025, the Company receives variable rate interest payments and pays fixed interest rates of 0.95% and 0.96% on a total notional value of $480.0 million of its Term Loan. The Company has designated the interest rate swaps as cash flow hedges.
As of June 30, 2024, the Company estimates that $16.7 million of net gains related to the interest rate swaps included in accumulated other comprehensive income will be reclassified into the statement of income over the next 12 months. When recognized, gains and losses on cash flow hedges reclassified from accumulated other comprehensive income (loss) are recognized within interest expense, net in the consolidated statement of income.
Note 12. Commitments and Contingencies
Legal Proceedings
The Company is, from time to time, involved in the normal course of business in various legal proceedings, including intellectual property, contract, employment, and product liability suits. The Company does not expect the outcome of these proceedings, either individually or in the aggregate, to have a material adverse effect on its results of operations.
Letters of Credit
As of June 30, 2024, the Company had $16.8 million of letters of credit outstanding, primarily under its $20.0 million uncommitted letter of credit facility to backstop bank guarantees for the same amount. The bank guarantees primarily serve as security for the newly constructed manufacturing building in Malaysia until the Company purchases the property. The Company pays interest on outstanding borrowings and commitment fees on the maximum amount available to be drawn under the letters of credit at a rate of between 1.65% and 2.25%, depending on the Company’s credit rating. The letters of credit include customary covenants, none of which are considered restrictive to the Company’s operations. The Company had letters of credit outstanding totaling $20.9 million as of December 31, 2023.
Note 13. Stock-Based Compensation Expense
Compensation expense related to stock-based awards was recorded as follows:
Three Months Ended June 30,Six Months Ended June 30,
(in millions)2024202320242023
Cost of revenue$0.3 $0.1 $0.4 $0.2 
Research and development expenses2.1 3.3 4.2 6.1 
Selling, general and administrative expenses14.6 9.7 26.6 18.9 
Total$17.0 $13.1 $31.2 $25.2 
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Note 14. Accumulated Other Comprehensive Income
Changes in the components of accumulated other comprehensive income, net of tax, were as follows:
Three Months Ended June 30, 2024Six Months Ended June 30, 2024
(in millions)Foreign Currency Translation Adjustment
Unrealized Loss on Securities
Unrealized Gain on Cash Flow Hedges
Accumulated Other Comprehensive Loss
Foreign Currency Translation Adjustment
Unrealized Loss on Securities
Unrealized Gain on Cash Flow Hedges
Accumulated Other Comprehensive Income (Loss)
Balance at beginning of period$(21.1)$(0.3)$20.9 $(0.5)$(14.5)$(0.3)$22.8 $8.0 
Other comprehensive loss before reclassifications (1)
(1.1)— (9.4)(10.5)(7.7)— (17.9)(25.6)
Amounts reclassified to net income (1)
— — 6.6 6.6 — — 13.2 13.2 
Balance at the end of period$(22.2)$(0.3)$18.1 $(4.4)$(22.2)$(0.3)$18.1 $(4.4)
Three Months Ended June 30, 2023Six Months Ended June 30, 2023
(in millions)Foreign Currency Translation Adjustment
Unrealized Loss on Securities
Unrealized Gain on Cash Flow HedgesAccumulated Other Comprehensive IncomeForeign Currency Translation Adjustment
Unrealized Loss on Securities
Unrealized Gain on Cash Flow HedgesAccumulated Other Comprehensive Income
Balance at beginning of period$(15.3)$— $31.2 $15.9 $(17.0)$— $37.0 $20.0 
Other comprehensive (loss) income before reclassifications(2.4)— 7.9 5.5 (0.7)— 6.5 5.8 
Amounts reclassified to net income— — (5.1)(5.1)— — (9.5)(9.5)
Balance at the end of period$(17.7)$— $34.0 $16.3 $(17.7)$— $34.0 $16.3 
(1) Presented net of income taxes, the amounts of which are insignificant.
Note 15. Income Taxes
The Company’s effective tax rate was 269.2% and 126.6% for the three and six months ended June 30, 2024, respectively. During the quarter ended June 30, 2024, the Company evaluated the potential realization of its deferred tax assets and determined that it is more likely than not it will realize substantially all of its net deferred tax assets. The Company weighted positive and negative evidence to assess the recoverability of its deferred tax assets, including cumulative income (loss) position, revenue growth, current profitability and expectations regarding future forecasted income. Accordingly, during the three and six months ended June 30, 2024, the Company recorded a tax benefit of $146.9 million and $153.5 million, respectively, from the release of the valuation allowance, of which $136.4 million relates to a discrete tax benefit arising from the expected realization of deferred tax assets in future years. The remainder relates to the tax effects of income generated during each period.In addition, during the three and six months ended June 30, 2024, the Company recorded a discrete tax benefit of $4.8 million associated with a U.S. federal research and development tax credit recovery project for tax years 2017 through 2021.
The Company’s effective tax rate was 4.2% and 3.8% for the three and six months ended June 30, 2023, respectively after consideration of the utilization of deferred tax assets, primarily operating loss carryforwards and the related impact to the valuation allowance.
At June 30, 2024, the Company maintains a $20.5 million partial valuation allowance, primarily related to certain state credit carryforward and state net operating loss carryforward deferred tax assets because the Company believes it is not more likely than not to realize the benefits of its state tax credits before expiration.
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Note 16. Earnings Per Share
Basic earnings per share is computed by dividing net income by the weighted average number of common shares outstanding for the period. Diluted earnings per share is computed using the weighted average number of common shares outstanding and, when dilutive, common share equivalents. The computation of basic and diluted earnings per share was as follows:
Three Months Ended June 30,Six Months Ended June 30,
(in millions, except share and per share data)
2024202320242023
Net income
$188.6 $27.3 $240.1 $51.1 
    Add back interest expense, net of tax
2.5 — 4.9 — 
Net income, diluted
$191.1 $27.3 $245.0 $51.1 
Weighted average number of common shares outstanding, basic (in thousands)70,062 69,741 70,010 69,662 
Convertible Notes
3,528 — 3,528 — 
Stock options
140 318 157 356 
Restricted stock units
72 83 76 101 
Weighted average number of common shares outstanding, diluted (in thousands)
73,802 70,142 73,771 70,119 
Earnings per share
    Basic
$2.69 $0.39 $3.43 $0.73 
    Diluted
$2.59 $0.39 $3.32 $0.73 
The number of common share equivalents excluded from the computation of diluted earnings per share because either the effect would have been anti-dilutive, or the performance criteria related to the units had not yet been met, were as follows:
Three Months Ended June 30,Six Months Ended June 30,
 (in thousands)
2024202320242023
Convertible Notes
— 3,528 — 3,528 
Restricted stock units
471 231 457 235 
Stock options
286 157 249 156 
Total757 3,916 706 3,919 
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and the accompanying notes included in this quarterly report. The following discussion may contain forward-looking statements that reflect our plans, estimates and beliefs, which are subject to risks, uncertainties and assumptions. Our actual results could differ materially from those discussed in these forward-looking statements. Factors that could cause or contribute to these differences include those discussed under the headings “Risk Factors” and “Forward-Looking Statements” in both our Annual Report on Form 10-K for the year ended December 31, 2023 and in this quarterly report.
Overview
Our mission is to improve the lives of people with diabetes. We are primarily engaged in the development, manufacture and sale of our proprietary Omnipod platform, a continuous insulin delivery system for people with insulin-dependent diabetes. The Omnipod platform includes: the most recent generation Omnipod 5 and its predecessors Omnipod DASH and Classic Omnipod, all of which eliminate the need for multiple daily injections using syringes or insulin pens or the use of pump and tubing. Omnipod 5, which builds on our Omnipod DASH mobile platform, is a tubeless automated insulin delivery system, that integrates with continuous glucose monitors (“CGM”) to manage blood sugar and is fully controlled by a compatible personal smartphone or Omnipod 5 Controller. The CGMs are sold separately by third parties. Omnipod DASH features a secure Bluetooth enabled Pod that is controlled by a smartphone-like Personal Diabetes Manager (“PDM”) with a color touch screen user interface.
Our financial objective is to sustain profitable growth. To achieve this, we launched Omnipod 5 in the United States in 2022, and in the United Kingdom and Germany in June and August 2023, respectively. Most recently, in June 2024, we launched our full market releases of Omnipod 5 in the Netherlands and France. We are working on further building our international teams and advancing our regulatory, reimbursement, and market development efforts so we can bring Omnipod 5 to additional international markets.
In June 2024, we submitted our 510(k) for an expanded indication of Omnipod 5 for type 2 diabetes to the U.S. Food and Drug Administration (“FDA”) for 510(k) clearance. Due to the positive results of our Omnipod 5 type 2 pivotal trial and the learnings from our Omnipod GO pilot, we made a strategic decision to drive growth in the type 2 diabetes market with Omnipod 5 and, accordingly, during the second quarter, we decided not to move forward with the commercialization of Omnipod GO.
During the six months ended June 30, 2024, we completed participant enrollment in our RADIANT study in France, the U.S, and Belgium, which is our Omnipod 5 with Libre 2 randomized controlled trial. Similar to the randomized control trial that we completed in the U.S. and France for Omnipod 5 with DexCom’s G6 CGM, the objective is to provide data to support our pricing and market access initiatives as we roll out Omnipod 5 with multiple sensors across our international markets.
We also continue to focus on our product development efforts, including automated insulin delivery (“AID”) offerings, such as choice of smartphone integration and CGM, and enhancing the customer experience through digital product and data capabilities. In June 2024, we began our full market release of Omnipod 5 with Dexcom’s G7 CGM in the United States. Similarly, in June 2024 we launched our full market release of Omnipod 5 with Libre 2 Plus for individuals aged two years and older with type 1 diabetes in both the U.K. and the Netherlands, where we now offer sensor of choice (integration with either Abbott’s Freestyle Libre 2 Plus sensor or Dexcom’s G6 CGM). Dexcom’s G6 CGM is also available in the UK and Germany. Additionally, in June 2024, we launched a limited market release of Omnipod 5 with our iOS app for iPhone in the United States.
Finally, we continue to take steps to strengthen our global manufacturing capabilities. During the three months ended June 30, 2024, we began producing sellable product at our newly constructed manufacturing plant in Malaysia. This plant provides us with increased capacity to satisfy our growing demand, supports our international expansion strategy, and is expected to drive higher gross margins over time.
Results of Operations
Factors Affecting Operating Results
Our Pods are intended to be used continuously for up to three days, after which it may be replaced with a new disposable Pod. The unique patented design of the Omnipod allows us to provide Pod therapy at a relatively low or no up-front investment in regions where reimbursement allows for it and our pay-as-you-go pricing model reduces the risk to third-party payors. As we grow our customer base, we expect to generate an increasing portion of our revenues through recurring sales of our disposable Pods, which provide recurring revenue.
During the three and six months ended June 30, 2024, we recorded a charge of $13.5 million related to certain inventory components which we no longer expect to utilize following the strategic decision to not move forward with the commercialization of Omnipod GO discussed above.
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We continue to experience challenges stemming from the global supply chain disruption; however, while there is no guarantee of future performance, to date we have been able to successfully mitigate this disruption and ensure uninterrupted supply to our customers by increasing our inventory levels and taking other measures. While our mitigation efforts and inflation have and are expected to continue to negatively impact gross margins and net income throughout the year, we intend to continue to work to improve productivity to help offset these costs.
Revenue
Three Months Ended June 30,
(dollars in millions)20242023Percent
Change		Currency
Impact
Constant
Currency (1)
U.S. Omnipod$352.3 $276.8 27.3 %— %27.3 %
International Omnipod128.1 103.7 23.5 %(0.9)%24.4 %
Total Omnipod480.4 380.5 26.3 %(0.2)%26.5 %
Drug Delivery8.1 16.0 (49.4)%— %(49.4)%
Total revenue$488.5 $396.5 23.2 %(0.2)%23.4 %
Six Months Ended June 30,
(dollars in millions)20242023Percent
Change		Currency
Impact
Constant
Currency (1)
U.S. Omnipod$670.0 $535.8 25.0 %— %25.0 %
International Omnipod243.4 202.3 20.3 %0.6 %19.7 %
Total Omnipod913.4 738.1 23.8 %0.2 %23.6 %
Drug Delivery16.8 16.5 1.8 %— %1.8 %
Total revenue$930.2 $754.6 23.3 %0.2 %