Insulet (NASDAQ:PODD) Beats Expectations in Strong Q2, Stock Soars

Insulin delivery company Insulet Corporation (NASDAQ:PODD) beat Wall Street’s revenue expectations in Q2 CY2025, with sales up 32.9% year on year to $649.1 million. On top of that, next quarter’s revenue guidance ($671.7 million at the midpoint) was surprisingly good and 4.4% above what analysts were expecting. Its non-GAAP profit of $1.17 per share was 26.8% above analysts’ consensus estimates.

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“We delivered robust second quarter results, reflecting our team’s strong performance and the compelling impact and appeal of Omnipod 5 for people living with diabetes,” said Ashley McEvoy, President and CEO.

Company Overview

Revolutionizing diabetes care with its tubeless "Pod" technology, Insulet (NASDAQ:PODD) develops and manufactures innovative insulin delivery systems for people with diabetes, primarily through its Omnipod product line.

Revenue Growth

A company’s long-term sales performance is one signal of its overall quality. Even a bad business can shine for one or two quarters, but a top-tier one grows for years. Luckily, Insulet’s sales grew at an excellent 23.4% compounded annual growth rate over the last five years. Its growth surpassed the average healthcare company and shows its offerings resonate with customers, a great starting point for our analysis.

Long-term growth is the most important, but within healthcare, a half-decade historical view may miss new innovations or demand cycles. Insulet’s annualized revenue growth of 26.9% over the last two years is above its five-year trend, suggesting its demand was strong and recently accelerated.

We can dig further into the company’s sales dynamics by analyzing its constant currency revenue, which excludes currency movements that are outside their control and not indicative of demand. Over the last two years, its constant currency sales averaged 26.4% year-on-year growth. Because this number aligns with its normal revenue growth, we can see that Insulet has properly hedged its foreign currency exposure.

This quarter, Insulet reported wonderful year-on-year revenue growth of 32.9%, and its $649.1 million of revenue exceeded Wall Street’s estimates by 5.8%. Company management is currently guiding for a 23.5% year-on-year increase in sales next quarter.

Looking further ahead, sell-side analysts expect revenue to grow 15.9% over the next 12 months, a deceleration versus the last two years. Despite the slowdown, this projection is commendable and suggests the market is forecasting success for its products and services.

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Operating Margin

Insulet has done a decent job managing its cost base over the last five years. The company has produced an average operating margin of 11.7%, higher than the broader healthcare sector.

Looking at the trend in its profitability, Insulet’s operating margin rose by 11.3 percentage points over the last five years, as its sales growth gave it operating leverage. The company’s two-year trajectory shows its performance was mostly driven by its recent improvements. These data points are very encouraging and show momentum is on its side.

In Q2, Insulet generated an operating margin profit margin of 18.7%, up 7.5 percentage points year on year. This increase was a welcome development and shows it was more efficient.

Earnings Per Share

We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company’s growth is profitable.

Insulet’s EPS grew at an astounding 72.4% compounded annual growth rate over the last five years, higher than its 23.4% annualized revenue growth. This tells us the company became more profitable on a per-share basis as it expanded.

We can take a deeper look into Insulet’s earnings to better understand the drivers of its performance. As we mentioned earlier, Insulet’s operating margin expanded by 11.3 percentage points over the last five years. This was the most relevant factor (aside from the revenue impact) behind its higher earnings; interest expenses and taxes can also affect EPS but don’t tell us as much about a company’s fundamentals.

In Q2, Insulet reported adjusted EPS at $1.17, up from $0.55 in the same quarter last year. This print easily cleared analysts’ estimates, and shareholders should be content with the results. Over the next 12 months, Wall Street expects Insulet’s full-year EPS of $4.24 to grow 12%.

Key Takeaways from Insulet’s Q2 Results

We were impressed by how significantly Insulet blew past analysts’ constant currency revenue expectations this quarter. We were also excited its EPS outperformed Wall Street’s estimates by a wide margin. Zooming out, we think this was a good print with some key areas of upside. The stock traded up 6.3% to $294.72 immediately following the results.

Indeed, Insulet had a rock-solid quarterly earnings result, but is this stock a good investment here? When making that decision, it’s important to consider its valuation, business qualities, as well as what has happened in the latest quarter. We cover that in our actionable full research report which you can read here, it’s free.