Insulet (NASDAQ:PODD) reported third-quarter 2018 results after the market closed on Thursday. The leader in tubeless insulin pump technology delivered revenue growth of 24% year over year and turned in positive earnings for the first time in its history. 

Shares declined 1.8% on Friday. They've gained 28.3% in 2018 through Nov. 2, versus the S&P 500's 3.5% return.

Insulet's results: The raw numbers


Q3 2018

Q3 2017

Year-Over-Year Change


$151.1 million

$121.8 million


Operating income

$6.9 million

$2.0 million


Net income

$1.7 million

($2.2 million)


Earnings per share (EPS)

$0.03 ($0.04) N/A

Data source: Insulet. 

Revenue came in at the high end of the company's guidance of $144.5 million to $151.5 million. For context, revenue growth was 12% last quarter, suppressed because of excess inventory in Europe when the company transitioned to a direct sales operations for international Ommipod on July 1. The first quarter saw revenue growth of 21%, and Q4 2017 experienced 26% growth.

For more context -- though long-term investors shouldn't pay too much attention to Wall Street's near-term estimates -- analysts had been looking for a loss of $0.23 per share on revenue of $149.4 million. So Insulet beat the top-line expectation and crushed the earnings consensus.

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

Image source: Insulet.

What happened with Insulet in the quarter? 

  • U.S. Omnipod's revenue jumped 17% from the year-ago quarter to $82 million.
  • International Omnipod's revenue soared 55% to $50.2 million. 
  • Drug delivery's revenue edged down 2% to $18.9 million.
  • Gross margin came in at 67.5%, up 700 basis points (7 percentage points) from the year-ago quarter. This metric has been making steady gains, largely driven by increasing manufacturing and operational efficiencies. 

What management had to say

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

Our team's ongoing commitment to operational excellence and our expanding opportunities for growth are demonstrated in our strong third-quarter performance. We grew revenue 24%, achieved gross margin expansion of 700 basis points, and generated both positive operating and net income for the first time in Insulet's history. We gained traction through the quarter in our direct European operations, successfully launched the limited commercial release of our next-generation Omnipod DASH system and made great progress in both our market access initiatives and the buildout of our U.S. manufacturing facility.

Looking ahead

Insulet had a good quarter, particularly with respect to the bottom line, with quarterly profitability coming sooner than many investors were probably expecting. 

The company revised upward its previous full-year 2018 revenue guidance. It now expects revenue in the range of $558 million to $563 million, representing growth of 20% to 21% over the $463.8 million in revenue it generated in 2017. Its previous outlook was for revenue in the range of $547 million to $562 million.

Sullivan said in the earnings call that the company is "on track to deliver positive operating income for the full year for the very first time in Insulet's history." He also noted on the call that the company is making "great progress" on its Omnipod Horizon development program, adding that "our Horizon automated insulin delivery system will be controlled by an app on the user's own mobile phone."

Lastly, investors should know that Sullivan is retiring as CEO and chairman of the board at the end of the year. Shacey Petrovic, the company's current COO and president, will take over as CEO effective Jan. 1 and remain as president. Timothy Scannell, who has served as a board member for four years, will become chairman, also effective Jan. 1.

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