Insulet Pumps Out 25% Revenue Growth, Edges Up 2017 Guidance

Insulet (PODD -0.05%) reported first-quarter 2017 earnings after the market closed on Monday.

The drug delivery company, which is a leader in tubeless insulin pump technology with its Omnipod Insulin Management System, delivered revenue growth of 25% -- which exceeded its guidance -- while its loss per share narrowed slightly. The company also edged up the lower end of its revenue guidance range for full-year 2017. 

Insulet's stock has gained 39% for the one-year period through the regular trading session on Monday, versus the S&P 500's total return of 19%. 

Insulet's results: The raw numbers 

Data source: Insulet.

Results adjusted for discontinued operations exclude the loss in the first quarter of 2016 from the company's Neighborhood Diabetes supplies business, which it sold in that quarter.

Revenue exceeded the company's guidance of $96 million to $99 million. Insulet doesn't issue earnings guidance. For additional context -- though long-term investors shouldn't place too much weight on Wall Street's near-term estimates -- analysts were looking for a loss of $0.15 per share on revenue of $97.8 million. So Insulet's earnings fell a bit short of Wall Street's expectations, while its revenue beat the consensus.

Image source: Getty Images.

What happened with Insulet in the quarter?

• U.S. Omnipod's revenue jumped 18% year over year to $59.7 million.
• International Omnipod's revenue soared 63% to $25.1 million.
• Drug delivery's revenue grew 12% to $16.9 million. Growth in this business continued to be largely driven by Amgen's Neulasta Onpro kit, which includes Insulet's Omnipod tech. CEO Patrick Sullivan said on the earnings call that Amgen said sales of its Neulasta Onpro kit represented over 50% of the U.S. Neulasta doses at the end of the first quarter of 2017.
• Gross margin was 58.4%, up 420 basis points (4.2 percentage points) from the year-ago period, driven by improved manufacturing and operational execution. The company remains on track to achieve its long-term gross margin target of 65%, Sullivan said on the call.
• In February, the company purchased a facility in Acton, Massachusetts, that will be used to expand Omnipod manufacturing and capacity beginning in 2019. At the time of the purchase, Insulet said the facility will provide capacity for it to manufacture up to 70% more pods on a single line with up to 90% fewer workers as compared to the total of its four current manufacturing lines at its contract manufacturer, Flextronics, in China. 

What management had to say

Here's what Sullivan had to say in the press release about Insulet's quarter:

Every area of our business showed strong momentum and outstanding performance in the first quarter. We continued to execute on our commercial and operational strategies and made great headway on our key initiatives, including our manufacturing and supply chain efforts. This operational progress is driving high product quality, which supports a strong and always improving customer experience. We are investing in innovation to ensure our significant product differentiation and strong business model continue to position Insulet for success in the diabetes and drug delivery markets. 

Looking ahead

Insulet had a solid quarter. The company edged up the lower end of its revenue guidance range for full-year 2017 and established second-quarter guidance as follows: 

Data source: Insulet.

For context, Wall Street was estimating going into the earnings release that Insulet's second-quarter revenue would come in at $104.6 million.