Insulet (NASDAQ:PODD) reported strong first-quarter 2018 financial results after the market close on Thursday. 

The drug delivery company, which is a leader in tubeless insulin pump technology with its Omnipod Insulin Management System, delivered revenue growth of 21% year over year -- exceeding its guidance -- and narrowed its loss per share to $0.11 from $0.17 in the year-ago period.

Shares of Insulet have been pumping up investors' portfolios. They're up 100% for the one-year period through Thursday, crushing the S&P 500's total return of 12.2%.

Insulet's results: The raw numbers

Metric

Q1 2018

Q1 2017

Year-Over-Year Change

Revenue

$123.6 million

$101.7 million

21%

Operating income

--

($5.3 million)

100%

Net income

($6.6 million)

($10.0 million)

N/A

Earnings per share (EPS)

($0.11) ($0.17) N/A

Data source: Insulet. 

Revenue exceeded the company's guidance of $119 million to $123 million. Insulet doesn't provide earnings guidance. For context, revenue grew 25%, 26%, 28%, and 26%, respectively, in the first through fourth quarters last year. For full-year 2017, revenue jumped 26% to $463.8 million. So while revenue growth was robust in the reported quarter, it has slowed a bit. 

Insulet achieved breakeven from an operating profitability standpoint. CFO Michael Levitz reaffirmed on the earnings call that the company expects full-year 2018 operating margins in the low-single-digit percentage range. 

For additional context -- though long-term investors shouldn't give too much importance to Wall Street's near-term estimates -- analysts had been looking for a loss of $0.19 per share on revenue of $121.7 million. So Insulet comfortably beat both the top and bottom line consensus. 

A two-pane panel with upper one showing an Omnipod on a woman's lower stomach and the lower one showing the handheld control device.

Image source: Getty Images.

What happened with Insulet in the quarter? 

  • U.S. Omnipod's revenue increased 18% year over year to $70.3 million.
  • International Omnipod's revenue soared 53% to $38.4 million.
  • Drug delivery's revenue declined 12% to $14.9 million. 
  • Gross margin was 61.4%, up 300 basis points (3.0 percentage points) from the year-ago quarter, due to continued improved manufacturing and operational performance. In the second quarter of last year, Insulet increased its long-term gross margin target from 65% to 70% due to its plans to transition in July 2018 to a direct distribution model in Europe.
  • Secured in-network coverage with UnitedHealthcare for Omnipod, effective April 2018.
  • Received Medicare coverage eligibility under the Part D prescription drug benefit, providing access pathway to 450,000 individuals with Type 1 diabetes who have Medicare/Medicaid coverage. This presents a massive growth opportunity, as it opens up access to about one-third of the U.S. market.
  • Secured Medicare formulary coverage with two Part D plan sponsors, effective April 2018.
  • Submitted Omnipod DASH, the company's next-generation mobile platform, for Food and Drug Administration (FDA) clearance.
  • Established key European operational and commercial arrangements for transition to direct operations on July 1.

What management had to say

Here's what CEO Patrick Sullivan had to say in the press release:

We are expanding our opportunities for growth and driving continued operational excellence. We have significantly expanded market access for Omnipod, made substantial progress on our innovation roadmap, and strengthened our global commercial footprint. We are building on last year's momentum and look forward to another year of substantial growth and achieving positive operating income in 2018 for the first time in Insulet's history.

Looking ahead

Continuing last year's momentum, Insulet posted a strong start to 2018. The company issued its second quarter outlook as follows: revenue of $130 million to $134 million, representing growth of 18% to 22% year over year.

Insulet also revised upward the lower range of its full-year 2018 revenue guidance, which it established last quarter, citing growing global Omnipod demand and confidence in its commercial execution. For 2018, the company now expects revenue in the range of $565 million to $580 million, up from $560 million to $580 million, and representing growth of 22% to 25% over 2017.

Beth McKenna has no position in any of the stocks mentioned. The Motley Fool recommends Insulet and UnitedHealth Group. The Motley Fool has a disclosure policy.