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Insulet Pumps Out 38% Revenue Growth in Q4, Expects 30% Growth in 2016

By Beth McKenna – Feb 26, 2016 at 4:01PM

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The leader in tubeless insulin pump technology signed an agreement with a partner to develop and incorporate the advanced artificial pancreas algorithm into its OmniPod System.

Insulet (PODD -0.77%) reported its fourth-quarter and full-year 2015 earnings after the market closed on Thursday. The drug delivery company, which is a leader in tubeless insulin pump technology with its OmniPod System, posted revenue growth across all four of its product lines and that exceeded its expectations. 

Insulet's key Q4 numbers

Metric

Q4 2015

Q4 2014

Growth (YOY)

Revenue

$100.1 million

$72.6 million

38%

Operating Income

($24 million)

($2.3 million)

(943)%

Net Income

($27.3 million)

($5.4 million)

(406)%

Earnings per share

($0.48)

($0.10)

(380)%

Data source: Insulet.

For the full-year 2015, Insulet's revenue increased 12% year over year to $324.2 million. Operating loss for the year was $60.8 million, compared with an operating loss of $12.3 million in 2014. Net loss for 2015 was $73.5 million, or $1.29 per share, compared with net loss of $51.5 million, or $0.93 per share, in 2014. 

Image source: Insulet.

For the quarter, Insulet had about $12 million of non-recurring expenses, including an approximate $9 million non-cash impairment charge associated with the sale of its Neighborhood Diabetes business to Liberty Medical LLC.

Revenue of $100.1 million in the quarter exceeded the company's guidance of $86 to $96 million. Insulet does not provide earnings guidance. Analysts were looking for an earnings loss of $0.26 per share on revenue of $91.89 million. Insulet comfortably beat revenue expectations, but fell short of the earnings consensus. However, the earnings "miss" was due to the non-recurring expenses of about $12 million.

What happened with Insulet this quarter? 

  • U.S. OmniPod revenue increased 21% to $52.9 million.
  • International OmniPod revenue increased 16% to $15.4 million.
  • Drug delivery generated revenue of $14.7 million, vs. $800,000 for the prior-year period.
  • Neighborhood Diabetes revenue increased 16% to $17.1 million.
  • Closed the sale of its Neighborhood Diabetes supplies business in February 2016 to focus on faster-growing innovative products.
  • Signed an agreement with Mode AGC (Automated Glucose Control LLC) to develop and incorporate the advanced artificial pancreas algorithm into its OmniPod System.
  • Signed a development agreement with Eli Lilly for OmniPod delivery of U200 concentrated insulin, which the company states significantly expands OmniPod's addressable market for Type 1 and Type 2 diabetes.

What management had to say 
Insulet's CEO Patrick Sullivan said in the earnings release:

We are very pleased to deliver 38% revenue growth in the fourth quarter, with increases across all of our product lines. Our results for the quarter and the full year reflect the great progress our team continues to make on our key initiatives, as well as success in further strengthening the foundation to drive long-term growth. Insulet remains committed to expanding awareness and utilization of our revolutionary OmniPod System and improving the lives of those living with diabetes. 

Looking ahead
Insulet introduced guidance for the first-quarter and full-year 2016 as follows:

Period  Revenue Guidance  Pro Forma* Growth YOY 
Q1 2016 $77 million to $80 million 65% at midpoint of range
FY 2016 $330 million to $350 million 30% at midpoint of range

Data source: Insulet. *Pro forma growth-excludes revenue growth contributed by Neighborhood Diabetes in 2015. 

Going into earnings, analysts were estimating that Insulet would post a loss of $0.23 per share on revenue of $83.19 million in the first quarter, and a loss of $0.65 per share on revenue of $363.71 million in 2016. So, Insulet's revenue guidance falls short of the consensus for both the first quarter and full year.

 

Beth McKenna has no position in any stocks mentioned. The Motley Fool recommends Insulet. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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Insulet Corporation Stock Quote
Insulet Corporation
PODD
$229.40 (-0.77%) $-1.78

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