Insulet grew Q2 revenue 23.5% to $801.7M and beat its guidance, but cut its full-year U.S. Omnipod growth outlook to 17%-19%, citing what it is learning in type 2 diabetes, while pod-correction costs weighed on GAAP margins.
Revenue
$802M
+23.5% YoY
Net income
$95M
+322.2% YoY
Diluted EPS
$1.37
+328.1% YoY
Operating margin
16.2%
Overview
Insulet makes the Omnipod, a small tubeless insulin pump worn on the body and replaced every three days. Because the pod is disposable, most of its revenue repeats: each existing user keeps buying pods. In the second quarter of 2026 (April–June), revenue rose 23.5% to $801.7 million, or 22.7% in constant currency (growth with exchange-rate swings stripped out). That beat the company's own guidance range of 20%–22%. The 10-Q attributes the growth "primarily" to "higher sales volume largely attributable to our growing customer base and, to a lesser extent, higher price."
Two things complicate the picture. First, a quality problem: in March and May Insulet issued two voluntary medical device corrections (a field fix, short of a full recall) for manufacturing issues that "caused a tear in the cannula" (the thin tube that sits under the skin) of certain pods. That cost a net $29.3 million this quarter. Second, and more important for the stock: management cut its full-year U.S. growth outlook to 17%–19% from 20%–22%, saying it is "updating our outlook to reflect what we're learning as we scale in type 2."
Key metrics
Metric
Q2 2026
Q2 2025
YoY Change
Revenue
$801.7M
$649.1M
+23.5%
Revenue growth, constant currency
22.7%
—
—
U.S. Omnipod revenue
$544.1M
$453.2M
+20.1%
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Adjusted figures are the company's own non-GAAP measures from its earnings release; they mainly exclude the device-correction costs in 2026 and a debt-repurchase loss in 2025.
Where the growth came from
U.S. (68% of Omnipod sales): revenue rose 20.1% to $544.1 million, which the 10-Q puts down to "higher sales volume driven by growing our customer base." There was no currency effect, since these are dollar sales. In the U.S., Insulet sells through the pharmacy channel. That means users get the pods the way they would get a prescription, with no large upfront payment for a pump. The 10-Q describes this as the model that "expands access by improving affordability."
The U.S. is also where growth is slowing. From the six-month figures in the 10-Q, U.S. Omnipod revenue grew about 28% in Q1 ($515.6M vs. $401.7M) and 20.1% in Q2. The company's Q3 guidance is 14%–16%.
International: revenue rose 35.5% to $251.8 million. A weaker dollar added 2.7 points, leaving 32.9% in constant currency. The 10-Q says this came from "higher volumes from our growing customer base, and to a lesser extent, a higher average selling price for Omnipod 5, compared with Omnipod DASH." In other words, customers are moving to the newer, pricier automated system. Omnipod 5 launched in five Middle Eastern countries in February and in Spain in July, making Spain the 26th country where Insulet sells Omnipod and the 20th with Omnipod 5.
Drug Delivery fell to $5.8 million from $10.2 million. This line is almost entirely pods sold to Amgen for its Neulasta Onpro kit, and the drop came from "lower order volumes from our partner." At under 1% of revenue, it has little effect on the overall results.
Margins: headline down, underlying up
GAAP operating margin (the share of revenue left after running the business, before interest and tax) fell to 16.2% from 18.7%. The underlying picture is better than that headline for two reasons:
Device-correction costs. The company's non-GAAP reconciliation adds back $25.0 million of correction-related costs at the operating line, $21.9 million of which sits in cost of revenue. Without them, gross margin would have been 72.9% rather than 70.2%. Even with the charge, gross margin rose 0.5 points, which the 10-Q credits to "improved manufacturing efficiencies" and higher volumes.
A flattering prior-year figure. Q2 2025 expenses were reduced by a $10.8 million reversal of stock-based pay forfeited when the former CEO left. That made last year's margin look higher than normal and inflates this year's 33.8% jump in selling, general and administrative (SG&A) costs to $344.8 million. The 10-Q says the rest of that increase came from headcount in commercial, quality and customer-experience teams, market-development spending, and "to a lesser extent," more direct-to-consumer advertising.
On the company's adjusted basis, operating margin rose to 19.3% from 17.8%. Research and development rose 20.0% to $88.1 million, in line with revenue, driven by Omnipod 6 (the next-generation system) and a fully closed-loop system for type 2 diabetes. A closed-loop system doses insulin automatically, without the user entering meals.
Why net income quadrupled
The jump from $22.5 million to $95.0 million in net income, and from $0.32 to $1.37 in EPS, mostly reflects a one-off cost in the prior year, not a fourfold rise in profitability. In Q2 2025 Insulet recorded an $84.4 million loss on extinguishment of debt: it paid $377.6 million in cash to buy back $294.7 million of convertible notes. That loss did not recur. Adjusted EPS, which excludes both years' one-offs, rose 41.5% to $1.66 from $1.17. That is the better measure of the underlying improvement. The share count also fell: diluted shares were 69.4 million, down from 70.7 million, after a $300 million accelerated buyback completed in Q1.
Takeaway: The quarter beat guidance, but the cut to the U.S. forecast is what matters more. International is now carrying the growth: full-year international guidance went up to 30%–32% while U.S. guidance went down to 17%–19%. Management tied the U.S. cut to lessons from scaling in type 2 diabetes, which is the biggest long-term opportunity for Omnipod and so the part of the business that most needs to work.
Cash, balance sheet and the device corrections
For the first half, free cash flow (operating cash flow minus capital spending) was $145.4 million, down from $229.4 million. The 10-Q cites a $94.5 million working-capital outflow, including a $76.9 million rise in receivables "driven by the timing of distributor orders in the United States," and higher capital spending ($56.8M vs. $30.9M), which includes the first investment in a new plant in Costa Rica. Cash fell to $534.9 million from $716.1 million, mainly because of the $300 million buyback. Total debt was steady at $948.4 million. (After quarter-end, a September 21 8-K disclosed an amendment that replaced the $475 million of outstanding term loans with new term loans on substantially similar terms.)
The company estimates the two device corrections will cost $60–$70 million in total. It has recorded $41.0 million so far this year, and expects most of the rest in 2026, with some in 2027 for "incremental manual quality inspections" until automated inspection systems are in place. The 10-Q also flags a risk from tariffs: none significant is expected for 2026 gross margin, but "the elimination of the current exemption for certain medical devices would have a material impact on our results of operations in future years."
Guidance and outlook
Updated guidance from the August 5 earnings release (revenue growth in constant currency):
Q3 2026
FY 2026 (new)
FY 2026 (prior, May 6)
U.S. Omnipod
14%–16%
17%–19%
20%–22%
International Omnipod
28%–30%
30%–32%
26%–28%
Total Omnipod
18%–20%
21%–23%
22%–24%
Total revenue
17.5%–19.5%
20%–22%
21%–23%
Adjusted operating margin
—
~100 bps YoY expansion
~100 bps YoY expansion
Adjusted EPS growth
—
>30%
>25%
The 10-Q also guides full-year net interest expense to about $40 million, up because of lower interest income on a smaller cash balance.
Our read: the forecast raises profit expectations while lowering U.S. revenue expectations. So far, a stronger international business and better manufacturing costs are making up for a slower U.S. business. The U.S. growth path has stepped down quarter by quarter: about 28% in Q1, 20% in Q2 and a guided 14%–16% in Q3. Yet the U.S. is still two-thirds of Omnipod revenue, and type 2 diabetes is where the long-term growth argument rests. Neither the 10-Q nor the release explains what the type 2 "learnings" are. That leaves open whether the problem is slower patient uptake, retention, or pricing and access, and until that is clear, the U.S. number carries most of the uncertainty. Things to watch in Q3: whether U.S. growth lands inside 14%–16%, whether the device-correction costs stay within the $60–$70 million estimate, and any detail on type 2 adoption. The type 2 closed-loop system, now in the EVOLVE pivotal study, is aimed at a 510(k) filing (the FDA clearance route for devices similar to ones already on the market) in 2027.