StemCell Therapy

Insulet(NASDAQ:PODD)earlier this month reported first-quarter 2020 results. The tubeless insulin pump specialist's results were quite strong, especially in light of the COVID-19 pandemic.

In 2020, shares of thehealthcare companyare up 10.2% through the end of May, outpacing the broader market, which is down about 5% because of the pandemic. Insulet stock remains a huge winner over the intermediate and long terms. Over the past five years, it's gained 567%, versus the broader market's 60% return.

Here's how the quarter worked out for Insulet and its investors.

Image source: Insulet.

Metric

Q1 2020

Q1 2019

Change

Revenue

Operating income

Net income

Earnings per share (EPS)

Data source: Insulet.

Revenue easily beat Insulet's guidance of growth of 17% to 20% year over year. For context, in the prior quarter, revenue grew 27% year over year.

The year-over-year decline on the bottom line was driven by an increase in interest expense.

Here's what CEO Shacey Petrovic had to say in the press release:

Insulet entered 2020 with positive momentum, making progress toward our strategic objectives and achieving strong revenue growth ahead of expectations. The efficiency and redundancy we have built in our supply chain and manufacturing operations enabled us to meet customer demand without interruption during this challenging time. We believe that our proven, durable annuity business model will continue to generate double-digit revenue growth in 2020. We remain confident we have the right strategic framework to effectively advance our mission, drive sustainable long-term growth throughout our global business, and to continue to create shareholder value.

On the earnings call, CFO McMillan quantified what Petrovic termed the company's "annuity business model," or what others might consider a razor-and-blade model: "Historically, new Omnipod starts within any given quarter contributed approximately 10% of revenue." In other words, the vast majority of quarterly revenue has come from existing Omnipod users purchasing new pods.

The Omnipod has no upfront cost, as it's a pay-as-you-go product, which means sales should hold up better in a recessionary environment relative to products that have considerable upfront costs.

Insulet's Q1 results were quite robust despite headwinds presented by the pandemic.

Unlike many companies, it didn't lower or pull its full-year 2020 guidance. Management reaffirmed its previously issued 2020 outlook of revenue growth of 14% to 18% over 2019. However, it did say that it now expects revenue to come in at the low end of this outlook. The company doesn't issue earnings guidance.

Due to the pandemic, Insulet's U.S. launch of its Omnipod Horizon automated insulin delivery system, which uses aDexCom(NASDAQ:DXCM) continuous glucose monitor (CGM) to dose insulin, has been pushed back. Management now expects this launch to occur in the first half of 2021, rather than in late 2020, Petrovic said on the earnings call.

Go here to read the rest:
This Diabetes Company's Q1 Earnings Reflect the Resiliency of Its Business Model - The Motley Fool

This entry was posted on June 1, 2020 at 6:48 pm and is filed under Diabetes. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed. |