Good afternoon, ladies and gentlemen, welcome to the Insulet Corporation fourth quarter and full year 2022 earnings call. At this time, all participants are in a listen only mode. Later, we will conduct a question and answer session, and instructions will follow at that time. If anyone should require assistance during the conference, please press star then zero on your touch tone telephone. As a reminder, this conference call is being recorded. I would now like to turn the conference over to your host, Deborah Gordon, Vice President, Investor Relations. Thank you. Good afternoon, and thank you for joining us for Insulet's fourth quarter and full year 2022 earnings call. With me today are Jim Hollingshead, President and Chief Executive Officer, and Wayde McMillan, Executive Vice President and Chief Financial Officer. Bret Christensen, our Executive Vice President and Chief Commercial Officer, is also with us for the Q&A portion of our call. Both the replay of this call and the press release discussing our 2022 fourth quarter and full year results and 2023 guidance will be available on the investor relations section of our website. Before we begin, we would like to inform you that certain statements made by Insulet during the course of this call may be forward-looking and could materially differ from current expectations. Please refer to the cautionary statements in our SEC filings for a detailed explanation of the inherent limitations of such statements. We'll also discuss non-GAAP financial measures with respect to our performance, namely adjusted gross margin, adjusted operating margin, Adjusted EBITDA, and constant currency revenue, which is revenue growth excluding the effect of foreign exchange. These measures align with what management uses as supplemental measures in assessing our operating performance. We believe they are helpful to investors, analysts, and other interested parties as measures of our operating performance from period to period. Additionally, unless otherwise stated, all financial commentary regarding dollar and percentage changes will be on a year-over-year reported basis, with the exception of revenue growth rates, which will be on a year-over-year constant currency basis. With that, I'll turn the call over to Jim. Thanks, Deb. Good afternoon, and thank you for joining us. In Q4, the global Insulet team delivered another record quarter of growth, which was a strong end cap to a remarkable 2022. We exceeded our expectations once again, achieving revenue growth of 45% in the U.S. and over 35% for total Omnipod. Our U.S. and global new customer starts were at record levels. 2022 marked our seventh consecutive year of 20%+ revenue growth. This past year, we not only drove consistently strong financial performance, we also achieved a number of critical milestones. We now have roughly 360,000 active global customers on the Omnipod platform, including more than 100,000 customers on Omnipod 5. In fact, during Q4, Omnipod 5 represented over 90% of our U.S. new customer starts. This transformative technology is the leading offer in the market and is proving to be the obvious choice for consumers. The 2022 full market release of our Omnipod 5 automated insulin delivery system was a huge achievement. This is the product our company was founded to make. We continued to build on that momentum throughout the year, adding CE mark approval and quickly extending our label in the U.S. to include pediatric customers down to age two for Omnipod 5, as well as completing the 510(k) submission for our type 2 basal only Pod. During 2022, we also further strengthened our intellectual property moat, representing a culmination of work throughout the year that should protect our innovation capabilities and opportunities for years to come. We made notable advancements in our clinical efforts, including the recent publication of our first look at real-world evidence for Omnipod 5. I'll speak in more detail about the highlights of these accomplishments in a few minutes. I could not be more proud of everything the Insulet team has achieved in advancing our mission to improve the lives of people with diabetes. On top of everything we've achieved during 2022, I am confident our best is yet to come. Omnipod 5 is truly unmatched as an AID system. With Omnipod 5, we have delivered a number of market firsts. It's the only tubeless, waterproof, Pod-based AID system and the first to offer full compatible smartphone control with constant cloud-based connectivity. This means doctors don't have to wait for data to be uploaded when or if a patient visits a physician. With Omnipod 5, customers no longer need to plug in their devices to access their data. Our smart bolus calculator helps patients manage their blood glucose levels and trends, and there are no other AID systems that include the adaptive algorithm that Omnipod 5 has. It works right out of the box and learns each customer's specific usage, and then predicts their trends and automatically personalizes their care. These all are competitive advantages that significantly improve and simplify diabetes management. Omnipod 5 continues to drive customer adoption from all market segments. MDI users are growing at the high end of our forecast, as are those switching from competitive tubed pumps, and the number of current Omnipod customer conversions are exceeding our expectations. In Q4, the percentage of customers coming from MDI and traditional tubed pumps was an estimated 65/35 split compared to our historical 80/20 mix due to significantly more competitive switches. This again speaks to the value Omnipod 5 brings to MDI and traditional tubed pump users. We also continue to win back thousands of customers who had once been podders and returned to us in Q4 to adopt Omnipod 5. Adopters are coming from all age groups. Due to higher than expected demand for Omnipod 5, we increased investments in our support capabilities, primarily within our call centers. These investments have helped drive our customer and product support experience back to historical levels of excellence. This has included taking quick action to address certain complaints regarding the Omnipod DASH and Omnipod 5 handheld devices. We previously announced a medical device correction for Omnipod 5 due to an issue with the controller charging port and cable. The FDA subsequently classified this as a class two correction, and we are in the process of providing replacements to our customers upon request. With respect to the previously announced Omnipod DASH MDC, we expect to complete the replacement of personal diabetes managers within the coming months. I am proud of our global team's focus to ensure these corrective actions were executed with a sense of urgency and care. Consumer-focused innovation is central to everything we do. Omnipod 5 was designed with the user 100% in mind, and the results and feedback we received speak to our shared success. One recent story from a mother of an eight-year-old with diabetes was particularly touching. She said, quote, "Omnipod 5 has given me my life back. I sleep through the night. I feel like me again. Diabetes has moved from the foreground to the background in our daily lives." End quote. This speaks to the power of Omnipod 5 and supports why we designed the product and the customer experience the way we did. A critical element to our continued strong Omnipod growth is an unwavering commitment to expand access and awareness. We're doing this through multiple initiatives. First is through our growing presence in the U.S. pharmacy channel. With low co-pays and broad coverage, access to Omnipod 5 and Omnipod DASH is affordable and simpler, which helps drive adoption and makes Omnipod more attractive and accessible, especially during challenging economic times. Second, we priced Omnipod 5 at parity with Omnipod DASH, resulting in our ability to meaningfully expand commercial coverage for Omnipod 5. By year-end, coverage approached 90% of U.S. lives. Additionally, because the vast majority of our U.S. customers pay less than $50 a month through the pharmacy channel, the cost is similar to multiple daily injections, even though our technology offers improved outcomes, glycemic control, and quality of life. Our annuity business model and pharmacy access also benefit physicians and payers. We have eliminated large upfront costs and lengthy lock-in periods. This offers real value to payers compared to traditional tubed pumps sold through the durable medical equipment channel. This is especially true when you consider that on average, individuals in the U.S. change insurance plans every couple of years. I also want to share that we recently notified U.S. Omnipod Classic customers about our plans to phase out that technology by the end of this year, since the vast majority of our customer base no longer is on our legacy product. We value every Omnipod Classic customer and will help them through their transition to either Omnipod 5 or Omnipod DASH. 2022 also was another exciting year for Insulet in terms of advancing our clinical efforts, and that momentum is carrying into 2023. We recently finalized our type 2 pivotal study protocol with the FDA and received IDE approval. We plan to begin enrollment in the three-month study in the coming weeks. This will be the largest clinical study we've conducted to date, enrolling up to 350 people with type 2 diabetes from 20 sites across the U.S. There will be a targeted focus to recruit diverse and underserved populations to demonstrate safety and efficacy of Omnipod 5. Omnipod 5 also opens up new avenues for clinical evidence. Yesterday at ATTD, we shared the first release of real-world evidence for Omnipod 5 with data from more than 31,000 people using the system for at least three months. This kind of data is unmatched by competitors and gives us valuable insights into how people use the product and the outcomes they're achieving. We're able to see which device settings contribute to maximum time in range and minimal hypoglycemia. The data demonstrated glycemic results in line with those observed in our pivotal trials and also reinforced the benefits of our customizable target glucose settings. These are some of the reasons why Omnipod 5 will be a market leader for years to come. Our enthusiasm is shared by a healthcare practitioner who recently said, quote, "The Omnipod 5 real-world data set is striking in that it includes all users since everyone is connected to the cloud-based system. With this large sample and limited selection bias, we see strong time in target range and minimal time below range exceeding glycemic targets on average. This is extremely promising for long-term benefit in the real world." End quote. Our real-world data for Omnipod 5 will be incredibly powerful over time since every user is cloud-connected. For patients, this means we can continue to personalize and improve the overall experience. For physicians, this means we will be able to streamline their workflows. Over time, our intention is to tie that usage data to claims data to further drive Omnipod 5 adoption, as well as build a host of other enhancements, such as population-based health management for payers. Nobody else in diabetes therapy can create evidence from data that includes all patients on therapy. This means that we will have unprecedented insights into actual population level usage patterns, which will allow us to constantly improve our offerings and build on our already market-leading product differentiation. While we are thrilled with the market response to Omnipod 5, winning in the global diabetes market requires a commitment to innovation. Today, we have a strong innovation pipeline that includes our type 2 basal-only Pod, future AID offerings, and digital and data capabilities. Today, our unique form factor and access model are helping us win in the type 2 population in addition to type 1. We deliver a market-leading experience, and as a result, in Q4, individuals with type 2 represented an estimated 15%-20% of our new U.S. customer starts. We expect to build on our leading competitive position in this market, as well as expand our total addressable market with the planned 2024 commercialization of our new basal-only Pod. This will be a unique product for the type 2 market and will provide us with early entry into the treatment experience and help patients become comfortable with the Omnipod on body experience. We believe this innovation will offer users a clear pathway to adopt Omnipod 5 as their insulin needs progress. We estimate the total addressable market for our basal-only Pod is approximately 3 million people in the U.S. alone, doubling our U.S. TAM. We are also making great headway in our development work to integrate Omnipod 5 with Dexcom's G7 and Abbott's Libre systems, and our iOS integration efforts continue to progress very well. We offer the best AID system on the market today, and our future generations of technology, including CGM of choice, will continue to strengthen our leading value proposition. To continue to deliver our unique and leading technology, the key priority for us is our intellectual property. We have significantly expanded our patent portfolio over the last few years, and in this past year, we more than doubled it, both organically and through record patent filings and an acquisition. We acquired the pump and AID patent portfolio of Bigfoot Biomedical, including approximately 400 patents and a large number of global patent applications. Over many years, Bigfoot has developed a strong patent library covering areas such as closed loop technology, smartphone control, secure communications, and improved user experience innovations. Our acquisition of these patent assets adds significant strength to our overall intellectual property portfolio. Additionally, in the fourth quarter, we entered into a mutual agreement with Medtronic not to assert our patents against each other for certain diabetes technologies. With certain exclusions, this agreement applies to both companies' existing products, as well as new products commercialized over the next seven years, and does not permit cloning each other's products. The agreement replaces an earlier one and provides more certainty around covered products and the agreement's duration. Through these efforts, we have created a broad and deep IP moat that positions us incredibly well to build upon our current leading innovative platform and continue to grow our expanding innovation pipeline. Moving on to our international operations, we had a solid year of double-digit revenue growth, even with the ongoing impact of AID competition. We expect to begin to offset those headwinds in 2023 with the launch of Omnipod 5 in the U.K. mid-year and in Germany toward the end of this year, marking the beginning of our staged international rollout. We plan to launch Omnipod 5 more broadly internationally during 2024. Lastly, our global manufacturing capabilities continue to support our long-term growth trajectory and serve as another competitive moat. While macro conditions remain challenging, we continue to support our growing global customer base and the strong demand for Omnipod 5. Our operations team has worked tirelessly to secure components and build product ahead of our forecasted demand. We remain committed to providing uninterrupted supply and the highest quality product to all our global customers. In closing, the fourth quarter marked a terrific end to a remarkable year of strong financial performance and operational achievements. We have so many exciting opportunities in the years ahead, and the entire Insulet team remains committed to executing our mission and strengthening our long-term growth trajectory. I will now turn the call over to Wayde. Thanks, Jim. 2022 was an exciting year with the U.S. launch of Omnipod 5. The fourth quarter was no exception. We once again delivered strong financial results while advancing our mission. In Q4, we generated 23% revenue growth, finishing above the high end of our guidance range, driven by total Omnipod growth of 36%. On a reported basis for total revenue, foreign currency was a 250 basis point headwind compared to Q4 of last year. U.S. Omnipod revenue growth was 45%, exceeding our guidance range. Revenue growth continues to be driven by our annuity-based model with cumulative record new customer starts and growing U.S. pharmacy volume. This includes an increasing contribution from Omnipod 5 and a premium for the Omnipod 5 and Omnipod DASH pods. Growth in the quarter included an estimated $15 million net volume benefit associated with the Omnipod 5 volume ramp. This was driven primarily by new Omnipod 5 customers, including conversions from Omnipod DASH and Omnipod Classic, where we again benefited from some customers simultaneously getting both their starter kits and first order of refills, as well as some initial stocking in retail pharmacies. This benefit was partially offset by some Omnipod 5 customers skipping a refill as a result of this dynamic. This volume benefit, primarily from conversions, will create a tougher comparison in future years as we expect most existing customers to switch to Omnipod 5 in 2023. During Q4, Omnipod 5 and Omnipod DASH new customer starts combined were 100% of our total U.S. new customer starts. This is an important milestone in our transition to pharmacy as all Omnipod 5 coverage is through the pharmacy channel as is the majority of Omnipod DASH. As a result, our pharmacy channel volume increased to approximately 80% of our total U.S. volume in the fourth quarter. International Omnipod revenue increased 19% in Q4 above our guidance range, driven by Omnipod DASH adoption. On a reported basis, foreign currency was a 13-point headwind over the prior year, which was approximately 3 points favorable versus our guide. As a reminder, our revenue in Q4 of the prior year was impacted by an unfavorable $5 million channel inventory reduction, creating an easier comparison. During Q4, our estimated global attrition and utilization trends remain consistent with prior years, with higher utilization in Q4. Note, we estimated higher utilization in Q3 above historic trends with the volume benefit of the initial Omnipod 5 ramp. Historically, our U.S. utilization has been highest in the fourth quarter of the year. Drug delivery revenue declined 90%, slightly better than our guidance range. Gross margin was 58.8%, representing an approximate 10-point decrease, including a favorable foreign currency impact of approximately 50 basis points. Cost of revenue included a $21 million net charge, or approximately 570 basis points, associated with the voluntary medical device correction. This net charge was comprised of $27 million related to our previously announced Omnipod 5 MDC, partially offset by a $6 million benefit due to a revised estimated costs associated with the Omnipod DASH MDC. Excluding the Q4 MDC net charge, adjusted gross margin was 64.5%, representing a 480 basis point decrease in line with our expectations. Our growing volume in the U.S. pharmacy channel, including the associated premium, positively contributed to gross margin. This was more than offset by expected higher mix of costs due to the ramping of Omnipod 5 and our U.S. manufacturing operations, as well as unfavorable mix from lower drug delivery revenue and a charge associated with the phase out of Omnipod Classic. Operating expenses were above our expectations to support continued higher sales performance and were higher than Q4 of last year as we further invest in our business. Adjusted operating margin and Adjusted EBITDA in Q4 were 11.5% and 19.3% respectively. Both exclude the voluntary medical device correction net charge and a $2 million benefit related to a legal settlement adjustment. Both metrics were impacted year-over-year by gross margin pressures and an increase in operating expenses. Turning to full year results. We delivered total Omnipod revenue growth of 27% and total company revenue growth of 22%, which reflect the incredible demand for Omnipod 5, ongoing contribution from Omnipod DASH throughout our global markets, and the benefit of our annuity-based business model. On a reported basis, foreign currency was unfavorable over the prior year by 360 basis points. In 2022, we achieved adjusted gross margin of 66.2%, down 220 basis points and in line with our expectations. Adjusted operating margin was 9.5%, down 200 basis points, and Adjusted EBITDA margin was 17.2%, down 240 basis points. Both metrics were impacted year-over-year by gross margin pressures and an increase in operating expenses and were slightly higher than our expectations due to our revenue outperformance. Turning to cash and liquidity. We ended the year with $675 million in cash. In addition, during Q4, we further strengthened our financial position by increasing our available borrowings under our credit agreement to $100 million. We remain in a solid position to continue investing in our business. Now, turning to our 2023 outlook. For the full year, we expect total Omnipod revenue growth of 17%-22% and total company revenue growth of 14%-19%. For U.S. Omnipod, we expect revenue growth of 21%-26%, driven by strong Omnipod 5 adoption coming from both new customer starts and conversions from another Omnipod product, as well as the continued adoption of Omnipod DASH and the benefits of our pay-as-you-go business model. We currently expect the cadence of our revenue growth to be more weighted to the first half of the year, given a tougher comparison in the second half of the year, resulting from the Omnipod 5 full market release in the U.S. in August 2022. This includes the related volume benefit from the accelerated pace of customer conversions in the second half of 2022. For international Omnipod, we expect revenue growth of 6%-10%. On a reported basis, we estimate a favorable foreign currency exchange impact of approximately 100 basis points. Growth is mainly driven by ongoing Omnipod DASH adoption, partially offset by AID competitive headwinds. While we're excited to introduce Omnipod 5 to our first international markets later this year, given our annuity model, we are not expecting a material contribution to growth in our international markets for Omnipod 5 in 2023. Lastly, for drug delivery in 2023, we expect a decline of 55%-45%, representing a dollar decline similar to what we experienced in 2022. Turning to 2023 gross margin. We expect a gross margin range of 65%-66%, consistent with 2022 at the high end. We expect a favorable impact from the benefit of increasing volume in the U.S. pharmacy channel and favorable geographical sales mix. These tailwinds are expected to be more than offset by inflation, higher costs associated with our U.S. manufacturing ramp, and product line mix due to increasing Omnipod 5 volume. As we previously stated, we expect many of these factors to impact our results into 2024. We expect gross margin in the first half of the year to be near the lower end of the range, and the second half of the year to be closer to the high end of the range. This improvement will be driven by increasing sales volume, improving manufacturing performance, and timing of the additional costs associated with the Omnipod DASH and Omnipod 5 medical device corrections. We expect operating expenses to rise due to investments in our sales and marketing efforts, including the phased launch of Omnipod 5 in our international markets, as well as expanding our innovation pipeline and clinical efforts and scaling our support functions. We expect operating margin to be in the high single digits, similar to 2022 levels, with significant improvement in the second half of the year over the first half due to timing of investments and improved second half gross margins. We remain committed to margin expansion. We expect to begin to leverage this bolus of investments in 2024 and beyond. For capital expenditures, we expect a lower level than 2022 as we begin to leverage our investments building capacity to date. Turning to our first quarter 2023 revenue guidance, we expect total Omnipod growth of 22%-25% and total company growth of 11%-14%. On a reported basis, we estimate an unfavorable foreign exchange impact of approximately 200 basis points. For U.S. Omnipod, we expect growth of 33%-36%. We expect the core drivers of growth to be the ongoing adoption of Omnipod 5, including the benefits of the U.S. pharmacy channel and our consistent record new customer starts, as well as our annuity model. For international Omnipod, we expect growth of 4%-7%, driven by ongoing Omnipod DASH adoption, partially offset by AID competitive headwinds and estimated order timing. On a reported basis, we estimate an unfavorable foreign exchange impact of approximately 600 basis points. Finally, we expect Q1 drug delivery revenue to be nominal based on the current production schedule. In conclusion, we delivered a strong finish in the fourth quarter and another year of solid financial performance. We achieved many milestones and entered 2023 with a clear strategic focus and momentum in our business. We're incredibly excited about the year ahead and what is to come for our customers and our shareholders as we further execute our global mission. With that, operator, please open the call for questions. Thank you. If you have a question at this time, please press the star then one key on your touch-tone telephone. If your question has been answered or you wish to remove yourself from the queue, please press star one again. We are limiting each participant's question to one. However, please feel free to go back into queue, and if time permits, we will be more than happy to take your follow-up questions at that time. Our first question comes from Robbie Marcus from JP Morgan. Please go ahead. Your line is open. Great. Well, first off, congrats on a really nice quarter. Impressive work. Maybe for my question I'll ask on new patient growth. By my math, it looks like you're somewhere in the low 30% year-over-year with a much better second half versus first half. You know, it's great to see that competitive switches are becoming part of the equation. All age groups, 100% in pharmacy. You're basically ticking off all the right boxes. I guess the question is: how sustainable do you think this trend is? Do you think it's a bit of, you know, early adopters or new converters, or do you think this is the start of a longer duration multi-year trend where Insulet can start to shift towards market leader in terms of new patients and overall market share? Thanks. I'll start with that, Robbie. It's Jim. Thanks for your congrats, by the way. I'll start and then either Wayde or Bret might wanna add color. We're very bullish on Omnipod 5. You know, obviously we're so strong out of the gate here and, as Wayde talked about in his prepared remarks and we talked about last quarter, there are some things going on here with, you know, starter kits. It's hard for us to get a quantitative trend. In terms of the nature of demand, we think it's really strong and we're really bullish. Omnipod 5 is going to be such a revolutionary offer. It's such a great experience for customers, it's delivering such great results that we think demand will continue to persist, not just through 2023, but for the long haul. I'll invite, Bret or Wayde to comment. Sure, Jim, I can jump in. Hi, Robbie. It is as Jim said, a really strong start here in our first 5 reported months with Omnipod 5 and this new platform. We think it's very sustainable, as Jim said. We have significant innovation pipeline to come yet. We'll be bringing, as you know, iOS integration with G7 Libre. We just got the type 2 trial finalized with the FDA, We'll be pursuing an indication for type 2 for Omnipod 5 as well. We're just gonna layer in a lot more innovations over time. That gives us confidence that the platform will continue to grow. Having said that, as Jim called out in our prepared remarks, a big driver of our current growth rate is our converting customers moving from the DME into the pharmacy channel. That's what we called out in the prepared remarks, that will create a bit of a tougher comp for us next year. The new converters, obviously as our current customers, classic Omnipod and DASH customers, convert to Omnipod 5, and we're assuming most of them will be done by the end of 2023. That's the piece that won't be as sustainable because once they convert, they're done. The rest of the business, just doing incredibly well. Record new customer starts, as Jim said, from MDI, from competitive switches. We do think we're at the front edge of a very long multi-year growth cycle. Hey, hey, Robbie, I'll just pile on too since you asked, about new starts. You know, MDI is probably the biggest indicator of it. As Wayde and Jim both said, record MDI, record competitive conversions, record overall new starts. The MDIs, we think is absolutely sustainable. Also, you know, remember we were still optimizing things in Q4. There were some speed bumps with the onboarding process. Access was not maximized, but did get to 90%, which mirrored our new starts, for the quarter. We are just really starting to promote Omnipod 5 in earnest, and you'll see some DTC rolling out. From my standpoint, I think, MDI growth can absolutely sustain throughout the year. Our next question comes from Jeff Johnson from Baird. Please go ahead. Your line is open. Hey, thanks, guys. Good morning, or good afternoon, and congratulations on the quarter. Just wanted to ask a question, I guess, on the international launch of O 5. Obviously, we've now got a couple markets that we know it's coming into here in the second half of this year. You know, Jim, maybe you can just level set us again. I know there's some stricter restrictions on the warranty periods in some of these markets. You're gonna have to pursue reimbursement in some of these markets. There's, you know, cloud-based data, regulations you're wading your way through. I gotta tell you, I mean, over here at ATTD, it was palpable yesterday, the interest in O 5, to the point that I was a little worried for Dr. Ly, with some of the feedback from some of the doctors just on how much they were battling to get her to commit to launching O 5 sooner in a lot of these countries and that. I mean, there is true interest as you guys, I'm sure, well know. So how fast can new patients start MDI wins, competitive converts, those kind of things ramp in the international markets relative to what we've seen so strong here out of the gate in the U.S.? Thanks. Thanks, Jeff. We know there's a lot of pent-up demand for Omnipod 5 and just tons of interest. Actually, we talked to Trang, and we heard a little bit about the pressure she was under in the session. You know, obviously, we wanna get Omnipod 5 into every market we can as fast as we can. You know, it's both because it's a great growth opportunity for us, really because it's such a benefit to customers. And, we know, you know, just the things we see here and the feedback we're getting from customers, it's changing people's lives. It's such a great experience. It's so simple to use. We wanna move just as fast as we can, first thing. We have announced that we're gonna do the U.K. in the middle of the year and Germany by the end of the year. There's a bunch of reasons for that. They're both obviously, large and important markets. There's some things we can do to execute there a little more quickly. We're working really hard in the background to be able to continue. You know, to continue to get into markets as quickly as we can. We, we wanna be able to reach all those patients. Obviously it's in our interest to do it, but it's really, we need to get to those patients and help them. It's really exciting. You know, I think specific to your question, every market has a little bit of a different set of regulations around, you know, once people have been put on a pump or when can they switch and that sort of thing. I think as a general rule, you know, with the caveat that every market's a little different, as a general rule, it won't be as easy to get onto Omnipod 5 for an existing tubed pump user as it is in the U.S., because in the U.S. obviously we have the pharmacy channel benefit. We're in a different category of reimbursement, so people can switch over to pharmacy reimbursement and get on Omnipod 5. They can use our free trial. That ability to switch has been a huge growth driver for us in the U.S. You know, in a lot of the European markets it'll be a little bit stickier. Those markets are still really under-penetrated. You know, the standard patient in all of those European markets is still an MDI. There are a bunch of people who are self-injecting, who are waiting for the innovation to come. You know, it's just really exciting for us. We wanna move as fast as we can, and when we get into market, as Wayde said, you know, we have to guide a little bit. We have to be a little bit cautious about how we guide on things like revenue because our model is somebody converts to Omnipod 5, and then as you know, there's an annuity ramp, you know? The revenue builds as people get on product and then they use pods. We have to be a little bit mindful of how we guide on the revenue impact. We think there's really important under-penetrated markets across all of the markets we're in, and we're moving just as fast as we can to meet that need. Our next question comes from Jayson Bedford from Raymond James. Please go ahead. Your line is open. Good afternoon. Thanks and congrats. Maybe just a simple question here, just looking at the volume and the revenue growth. 80% of volume through the pharmacy, is there a ceiling to that number? Where can that go? Thanks. Hey, Jayson. I'll take that one. This is Bret. You know, it's. There could be, but it's not in the same way that you might see with other companies, because remember, we do have a Part D indication from CMS, which means all of our Medicare business goes through the pharmacy channel. Medicaid business goes through the pharmacy channel. All Omnipod 5 business goes through the pharmacy channel. You know, really there's not a ceiling, except for the fact that we do still have DME contracts with our legacy product, which of course we announced we will phase out at the end of the year, and then a little bit with DASH. Outside of that, you know, if you just look past those products with Omnipod 5 and beyond, there really is not a ceiling to the volume that we can hit in the pharmacy channel. You know, all of Omnipod 5 will go through the pharmacy channel and all of Medicare, Medicaid. We're gonna be much higher than I think most companies in diabetes. Don't know if we'll ever get quite to 100%, but don't see a ceiling that prevents us from getting there. Our next question comes from Larry Biegelsen from Wells Fargo. Please go ahead. Your line is open. Good afternoon. Thanks for taking the question, and congratulations on a really strong quarter here. I wanted to shift gears and ask about the basal-only pod. You've submitted the 510(k). When do you expect approval? You know, mid 2023, is that reasonable? How quickly do you expect to commercialize it? You know, do you expect a similar kind of LMR to what we saw with Omnipod 5? You know, what kind of contribution are you expecting this year and next year? Just lastly, and sorry for all the questions, who's the sweet spot for this product? You know, which patients do you think are ideal? Thanks for taking the question. Thanks, Larry. I'll start. I'm gonna start with the back end of your question and ask Bret to comment on the front end of your questions. We think the sweet spot customer is a person with type 2 diabetes who's currently doing daily injections or has not started daily injections. Because they've been putting it off because they have a needle phobia or they see, they see the inconvenience of trying to do it or they are on daily injections, but they're missing their daily injections because they don't like doing it. What basal-only does is it gets upstream in the patient progression for people with type 2 diabetes. People with type 2 diabetes, as a, you know, as a general rule, have a lot going on. They have a lot to manage. We think there's real power with that customer at that stage of, you know, transitioning into or having just transitioned into insulin usage where we can really radically simplify their experience, make sure they get their daily insulin with high convenience, ease of use, no felt needles. We think there's a lot of power in it. The research we've done shows that there's power in it and we expect it to really meet a need in that part of the market. Importantly, those customers will use Omnipod, the Omnipod platform. They'll get used to the on body experience. Almost every person with type 2 diabetes who needs insulin progresses in their needs for insulin, they go from, say, you know, once daily basal to intensive insulin need, which is a basal bolus, which is Omnipod 5. We're moving upstream with an offer that genuinely simplifies the experience for those people, gets them ready to transition as their needs transition onto Omnipod 5. Bret, if you could pick up the other part of Larry's question, that'd be great. Yeah, absolutely. Larry, first part of your question around, you know, timing and clearance, of course we won't, we won't comment on that except for that we have said that it is with the FDA, we're happy with that. We won't speculate on when we'll get approval. We did say we'd start commercialization likely in 2024. We will surely launch in a limited fashion, just as we did with Omnipod 5 DASH. We just think that's a best practice. There's a lot we want to learn. We want to scale manufacturing. We want to refine the commercial model. We've got to build access, remember, with this product, so we're having conversations today with payers, those are going well. You should expect that we'll launch in a limited fashion. We'll probably start in the call point where we exist today, which is mostly endocrinology and some of the high writing primary care physicians. Then we'll figure out, you know, how we tackle this population as they do reside with primary care family practice doctors. Some with endocrinology as well. We're excited about the product. We think it fills a clear need, and it's gonna be really exciting, but we're refining the commercial model and the launch plans right now. Our next question comes from Matt Taylor from Jefferies. Please go ahead. Your line is open. Hey, guys. Thanks for taking my question, and congrats on a good result. I wanted to ask you kind of a conceptual question. Investors have asked us this, and I'd be curious to hear your answer. You know, just with all of the new diabetes drugs and the weight loss drugs, I think in the most extreme form of this argument, people would say, "Oh, these are gonna, you know, cure diabetes, and potentially have an impact on your market and demand for pumps." I guess, what would you say to investors who have that question about whether the, you know, whole classes of new drugs could actually impact the market? Does it curb your opportunity at all, or do you think that it's just sort of a sideshow? Thanks, Matt. I'll start with that. The first thing is we're thrilled to see innovation in the diabetes space. You know, that's why we get out of bed every day. We wanna help people with diabetes. We wanna make sure they get the care they need. We want to simplify their lives. We want to improve their outcomes. To see a lot of companies innovating in the space, whether it's drug companies, device companies, you know, data companies, We're really happy to see that kind of innovation for the same people we're trying to help. That's all a positive. In terms of all the, you know, all these new drugs, you know, it's early days to see. I mean, obviously, there have been a lot of noise and results in the market around it. I think it's early days to know how they will impact the progression. You know, really, they're aimed at people with type 2 diabetes, and, they may or may not impact the progression of disease. I think if you look at some of the clinical studies, what you see is in many cases, the people in the clinicals, for those drugs were actually also insulin users, which is an interesting dynamic. But what I keep coming back to is there are half a billion people on, you know, on the planet with diabetes. Most of them have type 2 diabetes. Everywhere the Western diet goes, type 2 diabetes follows. It's a massive unmet global medical need. I don't think it's gonna have a material impact on our business. There's so many people for us to help. It's a massively under-penetrated market. As happy as we are to see people get help with new innovations, our goal is to continue to innovate our platform, and, we think there will be more than enough people for us to sustain quite a lot of growth as we help them. Matt, Jim said it, you know, it, the value proposition of our basal-only pod is not, it's not to compete with the GLP-1s and these great drugs that are out now, like tirzepatide, Mounjaro. You know, we think that it's a complement to those. Jim said it. Many of those patients in those clinical studies were on insulin. We know and we hear from physicians all the time that patients do not get on insulin soon enough. That's the goal here with the basal-only pod is to remove the needle phobia, to improve adherence, and to complement, in many cases, these drugs that are already helping people with type 2 diabetes, and we think there's a clear spot for it. Again, we'll learn all of that in our limited release and as we launch the product. Our next question comes from Travis Steed from Bank of America. Please go ahead. Your line is open. Hey, congrats on a good quarter. I did wanna ask about the patents. There's been a lot of movement in the patents on your side lately in the last few weeks. Is that more about protecting the current portfolio, or is it more about building a pipeline? Are you expecting the space to get more litigious over the course of the next two years? Also wanted to ask about say leverage the bolster investments, and how you thought about kind of margin kind of beyond 2023, if you could get back to the kind of normal couple hundred basis points of margin expansion. Thanks, Travis, and thanks for your congrats. I'll start with the IP stuff, and then I'll ask Wayde to comment on the margin side. It's, you know, it's a little bit of both. We're really bullish on our IP, and we've been working all year, actually for months before that. We've had a concerted effort this year to make sure that we are not just shoring up our IP position, but growing our IP position. We've done that as I said in the prepared comments. We've done that through a number of avenues, including organically. We filed a record number of patents this year, and then we made some settlements. We made the settlement with Medtronic to shore up our position and to create some certainty, then the acquisition of patents. As you know, with IP, it's both and. Right? The more IP you have, the better position you are in terms of, you know, playing defense. But also the better position you are in terms of commercializing, you know, sort of ideating, creating new offerings and commercializing them. We think it's put us in a great position on both of those. You know, specific to Bigfoot Biomedical, they had a very rich, very rich set of intellectual property patents and filed patents, granted patents and filed patents that we find really interesting from an innovation point of view. It's both and in terms of offense and defense. Hey, Jim, I can pick up on the margin piece of the question. So Travis, as you said, we've, you know, we've been committed to margin expansion, and we've had to hit pause here for a couple of years, and that's mainly driven by the macroeconomic pressures that many businesses have felt. From an investment strategy standpoint, we had a choice to make, and we decided that instead of reducing our investment in commercial expansion and research and development, that we would continue to invest through this inflationary cycle. Even though we're paying higher costs for components and it's putting pressure on our gross margins, in addition to some of the business model challenges, like with Omnipod 5 at a slightly higher cost and our U.S. manufacturing facility taking some time to hit an inflection point and still a higher cost facility for us, we decided to continue to invest heavily in our leadership position. That is just because of this large market opportunity that Jim just referenced. We've got a really strong leadership position to build on here, and we want to make sure that we're as best positioned as possible. You're right, Travis, we included in our prepared remarks that continued commitment, and we think that given the investments that we're making up till now and through 2023, will put us in a position to start to leverage gross margins and operating margins again starting in 2024. Our next question comes from Josh Jennings from Cowen. Please go ahead. Your line is open. Hey, thanks. Thanks very much. Good evening. Wanted to ask about the type 2 opportunity in the U.S. or just the current business of 15% to 20% of new patient starts. Are you seeing either DASH conversions to Omnipod 5 in that segment, or are you seeing of that 15% to 20% new patient starts Omnipod 5 accounting for a big slug of that? How are you thinking about or what's baking the guidance for Omnipod 5 and type 2 before you have clinical data and on-label or an on-label decision by the FDA? Thanks for taking the question. Hey, Josh. I'll take the first part of that question, then I can let Wayde comment on guidance. The 15%-20% that we referenced, that's a percentage of all new starts. New starts for us are new to brand, never been on Omnipod. Those are truly coming from either, you know, MDI or a competitive tube pump. That's the percent of all new starts that were type 2 for us. Historically, that's been as high as 40%. It's a lower percentage today, but only because the Omnipod 5 numbers are so high. For the, you know, second half of this past year, we've been spending a lot of time in the field speaking to physicians about Omnipod 5, educating the staff, explaining the algorithm, helping patients get on board. A good portion of our field time has been devoted to the launch of that new product. The raw numbers of type 2 patients new to Omnipod are really not that different. It's just the percentages are down. We think the offering is fantastic. We look forward to this year where, you know, now that physicians are comfortable with Omnipod 5 or writing prescriptions, that we can start to have a portfolio sell in the field and start to talk about the type 2 offering with DASH and the value that Omnipod 5 brings. It's still a fantastic opportunity for us that is really, really under-penetrated and we're excited about. Our next question comes from Margaret Kaczor from William Blair. Please go ahead. Your line is open. Hey, good afternoon, everyone. Thanks for taking the question. I wanted to maybe talk a little bit about the volume benefits that you guys have had, and part of it is obviously the retail pharmacy part is just the upgrades from older generation Omnipod. If we take those two, you know, individually, you've got 80,000 retail pharmacies in the U.S. You know, should all of them have O5? As of what you've seen to date, which ones do, and I guess how is throughput there? Similarly, you know, in terms of the volume benefits of upgrades, you know, where are we right now within that process? If you guys could give us kind of even a rough percentage, and whether or not that should impact the 23 numbers at all, or guidance. Thanks. Sure. Hi, Margaret. I can start with the conversion insights and the volume and then, you know, Bret probably best positioned to talk about the pharmacy expansion, because those are two of the major drivers, which as you know, Margaret, we called out in the prepared remarks. Just to confirm for everyone, we call conversions our existing Omnipodders, whether Omnipod Classic or DASH, who convert over to Omnipod 5, which is a little different than the tube pump market, I think, which calls them upgrades. To be clear, we do not call conversions or upgrades new customers. Those are not factored into our new customer totals, because for us, it's an annuity model. As people move from older products to new generations, you know, we don't call them new shipments or upgrades or whatever others in the market call them. For us, it's just customers converting to the latest technology. Where we're at in that is making great progress. In fact, as Jim had in his prepared remarks, overwhelmingly success here with a lot of our existing customers wanting to move on to Omnipod 5 and frankly, put some of the stress on the system in the first couple of months. A significant conversions. We think, Margaret, that we'll be through most of them by the end of 2023. Just as a reminder, until we get a type 2 indication for Omnipod 5 and maybe even after, DASH is still the product for type 2 customers. We'll still have quite a few Omnipod DASH customers on type 2, and those won't be converting over to Omnipod 5. Those are the major drivers of the volume benefit. You know, obviously the single largest driver for us is new customer starts, and we've had record new customer start quarters for some time in the U.S. That's the major driver of the volume benefit. Also as you mentioned, retail pharmacies, that is also a smaller component of the $50 million ramp benefit we called out here in the quarter as we start to stock retail pharmacies. Bret, do you wanna pick up with that one? Yeah, Margaret, you know, we have talked about the 85,000 or so retail pharmacies in the U.S., you know, we don't report out on how many of those pharmacies have distributed Omnipod, but we do get that information from IQVIA, I'll just say it's substantial. The reason is I don't think it's that important because what's really important to me is how many pharmacies have access to Omnipod 5 and can dispense Omnipod 5. The answer to that is really almost all of them because we've done a really good job building the channel out. We've got product with all the major wholesalers. Those wholesalers supply Omnipod 5 to the pharmacies. You know, as far as the 85,000 retail pharmacies that are out there and how much Omnipod is on the shelf, it's really not that much because when a physician sends a prescription to a pharmacy, it's about 24 hours that a wholesaler will send Omnipod to that retail pharmacy. In most cases, that's how it's happening. In some cases, those retail pharmacies do stock Omnipod when they know they've got regular Omnipod customers picking up their product every month. You know, the channel's really strong, and the reality is that most of those pharmacies have the ability to distribute Omnipod. Our next question comes from Chris Pasquale from Nephron. Please go ahead, your line is open. Yeah, thanks. Congrats on another great quarter, guys. Was hoping you could provide some more detail on when you think you could have G7 integration. Is that something we should expect in the second quarter? The lack of an iOS app has really been sort of an afterthought given how successful the Omnipod 5 launch has been, but you've been working on it for a while now. Is that something we should expect in the next quarter or in 2023? Any clarity there would be great. Thanks. Thanks, Chris, for your question. I'll start. We're working really closely with our partners, both Dexcom and Abbott, on CGM integrations and working really hard on G7. As you know, we don't give advance notice of timelines that we expect or anything like that. I'll just say that we're working really hard. We see them both as extremely important. And we're very bullish on completing integrations across the iCGM space as those iCGMs become available. On iOS, that work continues to go really well. Same answer, we're not reporting on timelines, but that app is I think progressing really, really nicely. As we have more news, we'll give it to you all. Our next question comes from Kyle Rose from Canaccord Genuity. Please go ahead, your line is open. Hi, this is Caitlin on for Kyle. Thanks for taking the question. What's the full impact of pricing in 2023, including the upgrades of everyone to DASH and O5, and can you break that out from a volume mix perspective? Hey, Caitlin, it's Wayde. That's not a metric that we break out. As you highlight, we do benefit from the premium in the pharmacy channel, and that's largely driven by the conversions we have from the DME channel as well as new customers coming on through the pharmacy channel. I'll just remind everybody that part of the headwind that we have in gross margin is because we give the PDM for no charge. As we're significantly ramping up new customers here, that's one of the impacts that the Omnipod 5 product cost impacts our gross margins. Having said that, you know, pricing is a smaller component of our revenue growth. You know, the far larger components are volume, including the initial volume ramp here, with Omnipod 5 and this two script benefit that we're getting at the early stages here in the first couple quarters. You know, we don't break out that metric for you, but it's something that's been positive for us, and we think it will continue to be positive for us in the pharmacy channel. We have time for one more question. It will come from Matthew O'Brien from Piper Sandler. Please go ahead, your line is open. Great. Thanks for squeezing me in here. Just, you know, and this question might be for Wayde, but Wayde, when I look at the U.S., the absolute dollars in the U.S., from, you know, over the last couple of years here, and I know there's an adjustment for the stocking that we saw in 2022 about, I think it was around $80 million. You're up from 2021 to 2022 about $150 million. When you net that out, that $80 million out, you're $800 million up to about $1 billion, $1.1 billion in 2023. You're up, you know, almost $300 million, you know, year-over-year when you make those, again, those adjustments for stocking. What I'm trying to figure out is, you know, and I know Q2 here was a monster as far as patient adds go, and Q1's gonna be the same thing. Just what does that imply as far as new patient adds on the MDI side, and you're clearly expanding the market? What does that imply as far as market growth goes, and what does that imply in terms of competitive share conversion as well? It seems like there's an acceleration implied there. As well to get there. Then, you know, from an infrastructure perspective, do you have everything in place, manufacturing, customer service, to support this, you know, almost doubling of U.S. Omnipod revenue over a couple-year period? Thanks. Well, you didn't leave a lot on the bone there, Matt. That's a broad question with a lot of areas to answer. You know, I think, and I gotta be honest, I didn't follow the stocking math that you were doing there. That we don't have anything that we track in the order of magnitude that you were talking about there. You know, let me try to get at, I think, what the question is getting at, which is, you know, how are we continuing to grow the business and in particular in the U.S.? You know, 'cause we don't have any hundreds of millions normalization items that you're talking about. From time to time, we will call out increases or decreases in the channel. Just to confirm, for 2022, we had nothing in Q1. In Q2, we had a $7 million channel increase as we started to roll out Omnipod 5. Here in the third and fourth quarter, we've called out this additional script benefit, $16 million in Q3, $15 million in Q4. When you normalize for those, we're talking about a 4% impact in the U.S. Not to the orders of magnitude you were getting at, but something that we certainly wanna be aware of because most of that volume benefit is being driven by converting customers. Just so everybody's aware of what this dynamic is that we keep talking about. It's as we launch Omnipod 5, the new customer will get a starter kit, which is their personal diabetes manager, as well as their initial order of pods. If they also get their first pharmacy script order, they will get, say for example, two months in September. September, they get their initial starter kit, and they get their first order. What we're curious to see is how that would impact our second quarter of Omnipod 5. What we did see is a good percentage of customers actually skip an order and use up those pods. We did see a benefit as well, again, for people getting two scripts in Q4. When you net the two of those out, it was approximately $15 million. That was our estimate. If you, again, if you normalize for those, we're talking about a 4% impact, and that's why we're calling it out. If you go to the part of your question then, Matt, was, you know, are we taking share? Absolutely. There's no question that we're growing at accelerated rates in the United States, way above market growth. As Bret and Jim highlighted earlier in the call, we had record number of competitive switches, which means... You know, in the past, we used to get about 20% of our customers from competitive switches, 80% from multiple daily injection. You see in the metrics we provided here, that's now 65% MDI, 35% competitive switches. Both of those are record numbers. Record number of competitive switches, record number of MDIs, new customers, new to pump therapy coming onto our product. We, we do think that we'll be a share taker for some time to come. We've talked about a lot of the things on the call today that we think are continued drivers of our business that keep us in the leadership position. I'll probably leave it there, Matt. Look forward to catching up with you after the call and see if we can, we can clear any other parts of your question. We have a question from Steve Lichtman from Oppenheimer and Company. Please go ahead, your line is open. Oh, thanks. Thanks for squeezing me in, and congrats everyone. You mentioned on DTC that you'll be putting the foot down here near term. Can you talk a little bit about what your plans are there? What form will it take? When you're planning on kicking that off? Do you see that as a particular opportunity once you get a type 2 label for Omnipod 5? Thanks. Hey, Steve, yeah, it's Bret. Thanks for the question. You know, I don't know if we're putting the foot down, but we are starting to use DTC for Omnipod 5, and you'll start to see that via TV. We've always been strong with social media, digital advertising. And now we'll start TV with Omnipod 5 this quarter, if you haven't seen it already. You'll start to see a little bit of that. We'll see how it goes. You know, as far as the type 2 opportunity goes, we know there's an opportunity to create awareness for sure with type 2. You know, we'll see how that goes with the launch of Basal Pod. We have done DTC for type 2 with a focus on Medicare, free trial, things like that in the past, with the Dash product. You won't see anything with Omnipod 5, of course, until we get a label. Won't see anything with Basal Pod. The focus this quarter will be, DTC for Omnipod 5. This will conclude today's Q&A section. I would like to turn off the conference back to Jim Hollingshead for closing remarks. Thanks, Julian. Hi, Jim. Sorry about that. This is Deb. Oh. Just before you close, I just wanna let everybody know that call to your attention that there was an error in the earnings release. It was in the appendix, in the adjusted EPS reconciliation. One of the EPS adjustments should have been a reduction to EPS, not an addition. Therefore, I just wanna let everybody know that non-GAAP adjusted EPS for the fourth quarter was $0.49 instead of the $0.55 as shown, and we'll be issuing an update shortly. Just note also, there is no change to adjusted EPS for the full year. It's correct as shown. Sorry, Jim. Go ahead. Thanks, Deb. That's a real-time catch, everybody. I hope everybody stayed on the call long enough to get that update. Thanks, Deb. Thanks Julianne for shepherding the call. More importantly, thank you everybody for joining us today. These are remarkable and really exciting times at Insulet. We are just getting started fulfilling our mission to improve the lives of people with diabetes around the world. Omnipod 5 is clearly transforming the diabetes landscape, and we continue to deliver strong financial performance and strengthen our global competitive position. Thank you all, and have a great evening. Ladies and gentlemen, this concludes today's conference. Thank you for your participation, and have a wonderful day. You may all disconnect.