Good afternoon, ladies and gentlemen, and welcome to the Insulet Corporation First Quarter 2024 Earnings Call. [Operator Instructions] 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 First Quarter 2024 Earnings Call. With me today are Jim Hollingshead, President and Chief Executive Officer; and Ana Maria Chadwick, Chief Financial Officer and Treasurer. Both the replay of this call and the press release discussing our first quarter results and 2024 guidance will be available on the Investor Relations section of our website. Also on our website is our supplemental earnings presentation. We encourage you to reference that document for a summary of key metrics and business updates. Before we begin, we remind 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 and operating margins, 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 from period to period, and we believe they are helpful for others as well. 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. Coming out of the 2023 that saw Insulet emerge as the clear industry leader, we entered 2024 with significant momentum. We were off to a great start in Q1, fueled by continuing strong demand for Omnipod 5. Our global Insulet team continues to execute at a high level, bolstering our confidence in another year of robust revenue growth and margin expansion. Our first quarter revenue results exceeded our expectations for every product line. Given those results and the cascade of innovations that we plan to deliver this year, we have increased our guidance for both top line and operating margin growth. On today's call, I want to do 3 things: provide a high-level review of our Q1 results and the continuing strength of our competitive position in the market; give an update on our broad innovation agenda for 2024 including our efforts to expand the Omnipod 5 platform and our progress in the type 2 market; and discuss our ongoing efforts to capture the value of scale across our business. Starting with financial performance. Our first quarter revenue and margins exceeded our expectations. We achieved total Omnipod revenue growth of 21%, including U.S. growth of 23% and international growth of 15%. In the U.S., we continue to build on our clear leadership in the market, and our Omnipod 5 automated insulin delivery system was #1 in new customer starts by a wide margin. Demand for Omnipod 5 remains very high, and U.S. new customer starts were robust and in line with our expectations. Omnipod 5 is designed to expand the market through its ease of use and easy access, and we continue to succeed in driving market growth. During the quarter, roughly 85% of our new starts came from people…

Thank you, Jim, and good afternoon, everyone. Before I dive into the first quarter financial results, I want to say how excited I am to be part of this outstanding company. Insulet is transforming diabetes management and improving the lives of hundreds of thousands of people while driving strong financial performance. I am confident that we're just getting started, especially with the exciting developments in our pipeline. I look forward to partnering with Jim, our skilled leadership and the rest of Insulet's talented global team to advance our mission for our customers while also delivering robust revenue growth, margin expansion and shareholder value. And above all else, I look forward to helping make a positive impact on people around the world with diabetes. Now on to our first quarter results. First quarter exceeded our expectations, and we generated strong global new customer starts. As a result of our growing customer base, we delivered 23% revenue growth driven by global Omnipod growth of 21%, and our estimated global retention and utilization trends remain stable. Foreign currency was a 50 basis point tailwind for our total revenue on a reported basis compared to first quarter last year. U.S. Omnipod revenue growth was 23%, driven by robust growth on both type 1 and type 2 diabetes customer bases as well as expanding volume through the pharmacy channel. Adoption of Omnipod 5 integrated with G6 continues to be the driving force, and we are excited to have launched our U.S. limited market release with G7, which we expect will accelerate new customer starts in the second half of this year, following our planned full market release this summer. Our U.S. business and related revenue growth are very strong, fueled by Omnipod 5 success and robust demand. With many catalysts ahead of us this year,…

[Operator Instructions] Our first question is from Margaret Kaczor Andrew with William Blair.

Maybe just to start with kind of a big picture question. 2024 certainly seems like a year probably as active as you guys have been with new launches with an eye maybe towards 2025 acceleration in revenues as the new patient starts to accelerate in the back half of this year. So one, I guess, is that how you guys are thinking about it? And then two, is it too forward to think that as new patients start to accelerate in the back half, those can add a step change in new start growth? Or is it going to be more of a steady acceleration as you launch all of these different initiatives in the back half of this year?

Thanks, Margaret. Great question. We think that the timing of the product launches is really critical to ramping over the course of the year in '24. And so that's why we're really excited to be in LMR and be able to say that we anticipate full release of G7 in the U.S. over the summer and to already be in LMR going really well with our sensor of choice offering with -- including the Libre 2 Plus in Europe. And we do think that both new customer starts continue to accelerate over the course of the year and revenue continues to accelerate, and we'll see the revenue results more strongly in the second half.

Your next question comes from the line of Robbie Marcus with JPMorgan.

Congrats on a really nice quarter. Wanted to ask on what you're seeing competitively in the market, both in type 1 and type 2. Type 2 starts were particularly strong. It sounded like new patient growth wasn't a record but was still very robust, and I think it was expected to be below record given no G7 integration yet or Apple. But would love to hear how you feel you're doing competitively in terms of new patient share and any competitive switching? And also, if I could just tack on. I heard there was destocking in the second quarter. Was there any stocking or destocking in the first quarter? And how do we think about the dollar impact in the second quarter in the U.S.?

I think there's a bunch of things. And let me start with the stocking question and then come back to the competitive question. So stocking, we're only ever going to call that out if there's something unusual. And channel -- the stock in the channel is back to normal. We don't see anything unusual happening, and we're not going to talk about that unless we ever see something change that we think changes the trend or whatever. So that dynamic is totally ordinary in the quarter. So on the competitive position, we feel really strong about our competitive position. We're very, very confident in our competitive position. New customer starts in the first quarter in the U.S. came in right in line with our expectations, and obviously, in Europe did really, really well, which led us to raise our guide. And I think competitively -- give me an opportunity to just say a little bit about how we see the dynamic, which I'll try to be concise with. In the U.S. in type 1, the bulk of the market is still on MDI, as you all know. So we estimate that, as we've said before, 40% of type 1 patients in the U.S. are using some sort of pump technology and 60% are not. Our offering in Omnipod 5 has been designed to convert people off of MDI onto our technology because it's so simple to use, simple to put on, simple to use, simple to stay on, easy to access, great economics and great clinical outcomes. And so that's why we always say MDI is our target market. And from a competitive positioning point of view, we win that battle very, very handily. We clearly lead the market in MDI. And it's really Omnipod 5 that's growing in the market in type 1 for technology because we have such a clear leadership position there. In the remaining 40% that's penetrated, you do see there's a portion of that market which does have some competitive switching. And what we see over and over again and again in this quarter is that we have the net winners in the competitive switching game, and that's a smaller part of the market to begin with. And then it's only a fraction of that market that's up for conversion at any given time because of the 4-year lock-in on the tubed pumps. But we are clearly the net winners in any kind of competitive switching dynamics. So in sum, we lead in type 1, clearly. We lead in type 2, clearly. We lead very clearly in MDI, and we win the competitive switching game in the installed base. And so we feel very confident. Omnipod 5 wins everywhere it goes. And we see that over and over again.

Your next question comes from the line of Jeff Johnson with Baird.

Jim, maybe we can stay on that type 2 point, so forgive me if you've already talked about this, and I think put a good focus on it. But we've seen the ATTD data that suggests GLP-1s might bring heavy insulin users back down into that like 60, 65 unit a day range where you can put them on a pump. We know you guys have shown some strong real-world data on T2 time in range. So some of your competitors. So it sounds like the KOLs are starting to push more and more for getting these type 2 intensives on AIDs as well. And you guys especially have been investing in the primary care channel where I think a lot of that T2 care is delivered. So how close are we getting to the precipice of kind of this inflection in type 2 uptake? And I know it's been going up in your numbers the last few quarters. We can see that. But it seems like we're still maybe not there but getting real close to an inflection not just for the market but maybe your competitive positioning in there with O5 as well.

Thanks, Jeff. Great question. We are really excited about the opportunity for AID in the type 2 market. And as we know, we're already the clear leader in that market with Omnipod DASH. So in the pump market with Omnipod DASH, very clear leader. And you all know we don't promote Omnipod 5 because we don't have the label. So we don't promote Omnipod 5 in the type 2 market. But it gets written off label fairly frequently, as you can kind of reverse engineer out of our numbers. That's why we're so excited to be getting so close to filing with the FDA for a label extension. Because right now, we're out in the market with one arm tied behind our back. And we have a very firm conviction that as we get that label extension, we'll be able to drive dramatic growth in the use of Omnipod 5 specific -- not just AID obviously but Omnipod 5 specifically in that market. So we're getting very close. As we said about the pivotal trial, we've not just completed enrollment, but we have last patient through the trial. So we're in the process of gathering, cleaning, the normal steps of pivotal. We're gathering, cleaning the data. We're preparing our FDA filing. We're well on track to file. We've given guidance that we will file by the end of the year. We are very well on track to do that. And based upon what we've seen from our competitors, we're clearly out in front of everybody else in that market. But also remember, Omnipod 5, the offering itself is going to be -- it has a very clear right to win in the type 2 space because of its ease of use, its discretion, its availability in the pharmacy channel, its great outcomes, which we'll demonstrate further with data in type 2. So we are very, very bullish on the type 2 market. It continues to be a very clear unmet need, and we feel like we have what will be the best offering in the market. And we'll probably be there first.

Your next question comes from the line of Michael Polark with Wolfe Research.

Maybe a quick follow-up on type 2 there. Is it the expectation that we'll see data from the SECURE trial at ADA?

Yes, Michael, thanks for the question. It's our intent to show data from the STeP trial at ADA and with a specific focus on showing the subset analysis of people who are on GLP-1s in that data. Yes.

And your next question comes from the line of Travis Steed with Bank of America.

I wanted to follow up on the Q2 guidance. It looks like the guidance you gave is sequentially down, but you said in the prepared remarks you expect sequential growth in the second quarter offset by the wholesalers taking down the G6 inventory. And curious if you could help quantify what that guide assumes for the impact of the G6 inventory piece so we can kind of get the underlying Q2 guidance.

Travis, this is Ana. Thanks for the question. I think the main point here is to take a step back, and as you look at the U.S., we not only reaffirmed our full year guidance. We actually are taking up the low end. And as I mentioned in my prepared remarks, as we have all these cascade of new product launches, both in the U.S. and international, we're making assumptions. And as we do that, the key here is to remember that we believe the second half will be greater growth than the first, but we continue to expect the growth. And I think to call the exact timing is we're giving our best estimate. But the key important thing is that we're raising overall guidance for revenue, including international and the low end in the U.S.

And your next question comes from the line of Larry Biegelsen with Wells Fargo.

Jim, I wanted to circle back on new patient starts in the U.S. I heard robust U.S. type 1 and type 2 new starts in Ana's prepared remarks. Were new patients starts up year-over-year in Q1 in the U.S.? And do you still expect new starts to grow year-over-year in 2024? And talk about why you see G7 as a driver of new starts growth in the second half of the year.

Thanks, Larry. Year-over-year in Q1, overall new starts were not up, but MDI was up for us. So that gives you a sense of our strength in bringing customers out of MDI into the market. We expect sequential growth over the course of the year in new customer starts in the U.S. As I said before, I expect a record for us in the U.S. and globally in NCS for 2024. And what was the last part of your question, Larry?

Just conceptually understand why G7 integration is a driver of that new start growth.

Thank you very much. So G7 will be a tailwind for us once we get to full market release because of the nature of prescriptions, new customer prescriptions for CGM in the U.S. market. So I know you all look at this. But if you go look at new customer scripts for CGM, G7 has overtaken G6. And so you guys have always used -- heard me use this metaphor of fishing in a stocked pond. We've done obviously very, very well fishing in the G6 pond and have led the new starts with G6. And in the quarter, I think you can see from our new customer starts, it has not been a headwind for us to have the G7 out of the market and be so well adopted because what we found -- and with new customer starts right in line with our expectation, what we found is that if people want to be on Omnipod 5, they'll stay on the G6 or if they want to start AID on Omnipod 5, they go get a G6. So that hasn't been a headwind. But G7 will be a tailwind because there are more and more patients out there on a G7. And as we've said all along on the Omnipod 5 ride since we've launched, the CGM -- our CGM partners pave road for us. And so DexCom is now paving the road with G7. We need to get a car on that road, right? So that's why the timing of G7 launch is really important to us, and we want to get on market with it with full release as quickly as we can. And that's why we believe G7 will be a tailwind in the second half and will drive more new customer starts in the second half because we'll add G7 to the portfolio.

Your next question comes from the line of Patrick Wood with Morgan Stanley.

You guys have mentioned a few times learnings in type 2 and that side of things. And so I guess my basic question is -- and I know you've been investing there, and you've just upped the guide on the margin side of things. But these are very different patients, and PCPs are very different and require a different amount of training. As we ramp through the back half of this year and into next year, do you think there's like an investment cycle again needed from you guys in driving that type 2 market, particularly on the service and sort of support side?

Thanks, Patrick. It's a great question. That's part of the purpose of the commercial pilot, is to get out in the real world and see how those practices operate because historically, our call point has been endocrinology practices. And so we're out calling on primary care and specifically on primary care who, when you look at their scripting behavior overall with things like CGM and insulin, look more like endo practices than like true general practices, right? And so we've been out in the world calling on those practices to see how they manage patients, how they manage diabetes therapy. And we've learned a lot. And what we want to do out of that learning, coupled with the portfolio that we'll bring to market, is to figure out this -- kind of the term of the right selling motion. So that will include what's the right sales rep design, so the role description for that sales rep, what's the right support. Right now, we have quoted reps paired up with clinical service manager reps, who do both. Does that mix of rep look the same? Is it different? What's the reach? What's the so-called share of voice and design and commercial model? I think the reason we're so bullish on what we've learned out of the pilot is, first of all, as we've said in the past, Omnipod as a platform is so simple to use that often the phenomenon is when we walk into those practices and say, "We're here to talk about an insulin pump," their first reaction is we don't do insulin pumps because they're too complicated. And then we show them Omnipod GO, and they say, "Wait a minute. That's an insulin pump." And it's so simple to use that it leads to a more holistic…

Your next question comes from the line of Matt Taylor with Jefferies.

I guess I was wondering if you could comment on pump market growth just with all the enhancements going on with integrations and technologies across the space. Can you comment on whether you think the market growth is accelerating or you think it will accelerate in the coming quarters or next year?

Thanks, Matt. We think that you can see the normal cyclicality in the market, but the market is growing, first. And there's 2 drivers of market growth. The first one is the widespread adoption of CGM. And the second big driver of market growth is Omnipod 5 because it makes it so simple to come on to AID. And so as we continue to lead in MDI with a very clear leadership in the MDI position, those MDI patients are market growth for AID, and we are leading the way there. So the technology itself is driving market growth, and our CGM partners are doing it, and we're leading the way in AID.

Your next question comes from the line of Matthew O'Brien with Piper Sandler.

This is Phil on for Matt. And just to circle back to Travis' question from before because I'm not sure that was explicitly clear as it relates to Q2. For total Omnipod, can you confirm that Q2 growth will be sequentially up if you back out this wholesaler dynamic? And then just for some who are listening who might not be familiar, can you talk about the fact that G6 pods are different than G7 pods?

Let me start on the pods, and then I'll ask Ana to comment, go back to the Q2 financials. So the G6, G7 pods, when we get to full release of -- for the G7 integration. Those will be backwards compatible pods. So the current pods only -- can only connect with G6. But when we launch G7, the G7 pods will be G7 and G6 pods and be backwards compatible. So what that will mean for a customer or a user is that if they want to stay on the G6, they'll be able to stay on the G6 because the pods will work with it, but it will also accept G7. And so it will be kind of a sensor of choice within the Dexcom family of CGM. Ana, do you want to take the...

Sure. Listen, I'll take another stab at here the 2Q guidance. And I just -- once again, I want to put it in overall perspective for the year. We're taking up our guidance in the U.S., even in the low end. And we expect overall that sequential growth to be there, as I stated. And I think the key point to mention here is we made our best assumption here as we have this transition of product out in the market. And we called our best estimate, and we will update as we progress through the year. But we feel very confident over the entire calendar year with the guide we've given.

Your next question comes from the line of Jayson Bedford with Raymond James.

I guess I have a question on international. I think you mentioned that first and second half growth would be in the, I think you said, 13% to 15% range. Just given the annuity model, given the new products, geographies, why wouldn't second half growth be higher than first half?

Thank you for the question. Listen, as I mentioned here, we took the entire guidance up 500 basis points, and that's given what Jim referred to. I mean the adoption we're seeing on Omnipod 5 is phenomenal and great. We're going to be in more markets as well. And the markets -- all of these European markets have slightly different dynamics. Some of them are in 4-year cycles, so on and so forth. So we feel good with the guidance that we're giving. And in anything that's new, our goal and the philosophy of this team and my philosophy is we want to give you numbers that we could hit. We definitely don't want to miss. So that's kind of the philosophy in which the spirit -- and we felt the 500 basis point guide up was significant. We will learn a lot more as we go through the next few months and as we learn more of these launches, and we will update accordingly.

Your next question comes from the line of Steve Lichtman with Oppenheimer & Co.

So yes, just building on that last question, you've given the annuity model. Really nice to see this near-term outperformance. And assuming it's led by steeper ramp in new starts, are there any new start metrics you can provide from outside of the U.S.? And are you getting a higher price point for O5 outside of the U.S., so this is a mix opportunity as well?

Sure. We don't -- as you know, Steve, we don't give guidance on actual numbers and so on. But we did try to allude, I think, in the prepared remarks to the fact that Omnipod 5 is out of the gate so strong in the U.K. and Germany that already in Europe, more than half of our new customer starts are Omnipod 5. So that will give you some color on the strength of the adoption. We'll launch in France over the summer. And then the France -- we're in Netherlands in LMR, and we'll get to FMR in the Netherlands, and then we'll launch in France over the summer. And there's a ramp, as you all know, to the dynamic. And so that's how you should expect to see it. If we ramp in those countries the way we are, we'll see a revenue impact. And depending on how quickly we can get France actually launched, which will happen -- we've given summer as kind of a range. That will have more or less effect within the year. But we expect to have great adoption in France because Omnipod DASH has been so successful and it's so demanded by patients. So just to give you a color on kind of the starts dynamic for us. In terms of ASP, yes, we've been very successful in negotiating for a premium on Omnipod 5 relative to Omnipod DASH in our European markets. That's different from what we did in the U.S., as you know, where we launched Omnipod 5 effectively at price parity. But in Europe, we want to take advantage of the fact that Omnipod 5 is new technology, and that's been an important component of each individual country launches to go in and negotiate for reimbursement that's more commensurate with the value, the additional value that Omnipod 5 creates. And so there is a mix impact on revenue as we get Omnipod 5 into each of those markets. It's a little -- the actual premium itself is a little different by market. But so far, we've been very successful in securing a premium for Omnipod 5.

Your next question comes from the line of Joanne Wuensch with Citi.

I have 2. And the first one is I want to make sure I have an idea of what to expect when Libre 2 is integrated with Omnipod 5 and how you think about launching that and uptake. And then the second one is in addition to the type 2 clinical data at ADA, what else should we be looking for?

Thanks, Joanne. Libre 2, we're very excited. As you can imagine, we're very excited to get our Libre 2 integration into market in LMR. So far, we're having great results with the patient experience in both the U.K. and the Netherlands. And as you know, the Libre 2 form factor, that sensor for our partner, Abbott, is their most adopted sensor. And so it opens up an entirely new kind of side to the market for us, kind of serviceable addressable market, if you want to think in those terms of all of those Libre 2 users who may, therefore, also want to go on to an AID system in Omnipod 5. And Omnipod 5 is so simple to use, and the form factor is so great that we think it will have very high appeal to that Libre 2 user population. So we're very, very excited to get it out to market. Great to see the early results. Turning to GLP-1 and ADA data. There will be other things we'll show at ADA. We're going to show -- we'll show some subset analysis out of our pivotal trial. I'm sure we'll show an update on our real-world evidence, which has consistently shown that we deliver fantastic time in range, along with very low hypoglycemia in increasingly large populations of real-world data sets, and we'll have some other studies that we haven't yet discussed. No later than ADA, you should see us report an update on our analysis of GLP-1, which I alluded to briefly in our prepared comments. Because it's in real claims data, you can see that people who adopt GLP-1s are more likely to adopt insulin in the same year. And so we'll be documenting that with the robust presentation of the claims data, which is very exciting.

Your next question comes from the line of Danielle Antalffy with UBS.

Congrats on a great start to the year. Just a quick question on the new patient starts from competitive switches. Jim, I know you guys talked last quarter about the fact that one of your competitors was holding on to their installed base a little bit more. Just curious what you -- has that gotten worse? You have another competitive launch happening. Wondering if they're also holding a little bit tighter to their installed base. And how do you see this evolving? Is this something that we should be thinking an 85-15 MDI competitive switch split? And I appreciate that MDI is the key to the growth story, but just curious about what you're...

Yes, it's a great question, Danielle. The first thing I would say just quickly is, on the 85-15, that was actually a pretty subtle shift in mix. That is a mix percentage, and it was fairly subtle. And we tend to give you guys -- we have an estimation on that. We don't have perfect insight into those mix data that we give on MDI versus competitive T1, T2. There's kind of an estimation range in those. And so I wouldn't over-index on the modeling in what we reported. It was a pretty subtle shift. Having said that, what we see -- I can't really speak to the challenges our competitors face in retaining the customers in their installed bases. What we see consistently both with our own proprietary market research, which we put in place in the last few quarters, and also with third-party data is that we are the clear net winners in the competitive switch game. So if you're a manufacturer, you can typically get a sense of how many customers you're converting from, from a competitor. But you don't often have great insight into what your loss rate is. And so we put in place a market analysis that allows us to better estimate that. And it's a very consistent dynamic for us since we launched Omnipod 5 that we are the net winners in that game. So we gain way more customers than we lose, both head-to-head with our competitors and then obviously overall in the market. And so that just speaks to how strong our competitive position is with Omnipod 5. It's clearly the best offer on the market, and that's what the market says with those results.

Your next question comes from the line of Bill Plovanic with Canaccord Genuity.

Just really wanted to go back to type 2 and Omnipod GO, and I don't know if I missed this. Did you give any detail on timing for full market release? And if not, are you kind of waiting for the O5 to be available before you roll out so you have a full product set? And then with the ATTD data with time in range on the AID, I was wondering if some of this data has been driving kind of a shift in the market there as well.

Thanks, Bill. We haven't given timing on Omnipod GO. And obviously, we haven't yet filed Omnipod 5. And so the commercial pilot is intended to make sure that we have enough learning in place to put the right commercial model in place. And we'll figure out exactly how we'll bring the portfolio. So we have not updated on timing for Omnipod GO, but you can -- I think you can easily envision that with a portfolio of products, the commercial model looks different than with a single product, right? So I'll put it that way, I think. With the ATTD data, to me, the real-world evidence that we were able to show makes it really clear that the Omnipod 5 algorithm is a world-class algorithm. It produces fantastic results, clinical results. It produces it across age groups, across demographics. And as we've said before, one of the things that's unique about our real-world evidence is that it's from all comers. And so it's not only from highly engaged patients who upload their data. It's from all patients who are on Omnipod 5. And so when it has robust results, you can sort of see it as extra robust because it's a clear view into every corner of the user population. And on top of that, what it shows is we produce great time in range, as I said, but we continue to have very low hypoglycemia in our algorithm, which is a big competitive advantage for us. So that data is helping us now out in the field as we talk to physicians and continue to introduce Omnipod 5 to new users to demonstrate just how clinically effective Omnipod 5 is on top of and in addition to its great ease of use.

Your next question comes from the line of Marie Thibault with BTIG.

I'll move away from the top line here and focus on margins. You had excellent operating margin again this quarter. I wanted to ask a little bit about the near-term cadence. Saw that you raised the guidance but also heard that you're expecting some incremental expansion of the sales force. So just any guidance on a quarterly cadence on that metric.

Yes, this is Ana. Thanks for the question. We're in a really strong position as we look at our operating margin. And I'll break it down. From a gross margin perspective, we did that 69.5%. That's very strong. We look to have strength on that as we progress through the year. Now from an operating perspective, what we need to balance out here is the investments because we want to really position ourselves into the future. And as Jim and I have talked, it is kind of a good problem to have. And we have a cadence around analyzing our investments and making sure there's that rigor of those returns. So as we sit here, yes, we see upward mobility here in our margins. And at the same time, we want to be prudent in our capital allocation to continue to fuel the growth, and as you mentioned here, the sales force and the different investments in our product and product features and other things. So it's a real balance, and we will continue to drive margins up as our priority and continue to prioritize our investments.

Your next question comes from the line of Chris Pasquale with Nephron.

Jim, I wanted to understand your GLP-1 comment better. The thesis around GLP-1 use in type 2 is that it would help those patients take a couple of steps back on the disease progression escalator, if you will. So maybe the insulin use can be delayed, or if they're already on insulin, they can use less. And now you're talking about the transition to insulin use actually being accelerated. So do you think being on a GLP-1 is really making them more likely to need insulin? Or is what you're picking up there just that these patients were not engaging with their disease previously and now they are and GLP-1s are the catalyst to get them more active?

Yes. Great question, Chris. Yes, obviously, we'd be speculating. So just to -- and we'll be publishing an update that we'll give you one more detail. So I don't want to steal the thunder of what we'll put out. So you can also look at the slides, and we can have a better conversation about it. But I'd just say we'd have to speculate what's actually happening. It's -- the analysis is based on claims data. And so it's very robust. It's very large end claims data. And what it shows is that for those patients who adopt GLP-1, they are much more likely to also adopt insulin in the same year. And given what we see -- and so I'm not going to speculate just for a second, okay? Given what we see with GLP-1s, we know GLP-1s lower A1c. So I think the dynamic is more likely the second -- your second suggestion, which is patients go in, they get put on a GLP-1 because their A1cs are really high. And then either they drop off of the GLP-1, which we'll also have some information on that in our deck, or they stay on GLP-1, but they haven't resolved their A1c issue. And therefore, they also go on insulin. And so that's what we see in the claims data, but we can assert out of the claims data what's actually happening in the clinic. And I'm sure it's different for every patient. But at the population level, that's the very clear and striking dynamic.

Your next question comes from the line of Mike Kratky with Leerink Partners.

This is Brett on for Mike. Just wanted to go back to the guide, I guess, on the high and the low end in particular. What are some of the assumptions in terms of just the G7 launch like? Does it take a certain time in the summer that that's going to launch to hit the high end of the guide or the midpoint of the guide? Or is there anything that we should be thinking about in terms of timing there? And then with that, just overall attrition and then the timing of the France launch as well, if there's any swing factors there in the OUS guide.

All right. There's a few questions here, and maybe we'll tag team here between Jim and I. Let me take the guide first. Listen, it goes back to the fundamental. First and foremost, we're increasing our revenue guide. Second point in terms of timing, we are absolutely assuming that as we put the new G7 pods into our channels, there's going to be a reduction of the G6 as it gets sold through the channel. So there is a destocking of that G6, and we have an assumption there, I'll call it, roughly in the $10 million or so. Now the timing of all of this is really hard to call. That's why as I get the question asked, I keep bringing everybody back up to the full year, the second half of the year. But that, I just wanted to clarify because it's been asked a few times, and that's really our underlying assumption. And I want to go back to your second question around international. Can you repeat that?

France launch.

So I'll start. As we've said, the timing of the France launch will be here over the summer. And the teams are ready. They worked out all the pricing, and they're working all the sales force and everything. So we expect, as we mentioned, that every country is slightly different. In France, there tends to be more of this 4-year cycle of contract renewals as people might have been previously in pumps and so on. So we are assuming in our financials more of that uptick into the later half of the year, very -- like later into the year as it ramps and it takes time but really being a tailwind for us in 2025.

Your next question comes from the line of Josh Jennings with TD Cowen.

I wanted to just ask on the pharmacy channel. And so it's enjoyed exclusivity sort of getting patient access through their pharmacy benefit. Our team doesn't think there's really much risk to the current model reimbursement levels that insulin is achieving or securing. But are there any theoretical risk as some of the tubed pump competitors start to open up that channel for patients and just thinking about either reimbursement levels or just the model overall in terms of pump reimbursement into the pharmacy channel?

Thanks, Josh. Really, really good question, and it's something we could have a very complicated conversation about, right? But the very simple answer from our point of view is that what's unique about pharmacy access for Omnipod 5 is that the product fits the channel really, really well. And tubed pumps are durable equipment, and they don't fit the channel very well. So as anybody trying to enter the market and get into the pharmacy channel with some sort of durable equipment plus some consumable thing, it will be very difficult. From them to do it, they'll have to do with lots of workarounds. There's going to be reimbursement challenges. There's going to be scripting challenges and all kinds of things that we could have a much longer conversation about and never say never. We're very mindful of competition. We have a lot of respect for our competitors. But it's taken us several years to build out the scale and scope we have in pharmacy channel. And as we referred to in our prepared remarks, Omnipod 5 is available in retail pharmacy within 5 miles of 85% of the U.S. population. That is going to be very, very difficult for any of our durable pump competitors to replicate. And the overall model of Omnipod 5 with its very easy access, ease of use, ease of setup, get it in a box at the pharmacy where you get your insulin, that model just fits very, very well, and I think the durable pump model does not fit the channel well.

Thank you all so much for your questions. This does conclude our Q&A section. And I would like to turn the conference back to Jim Hollingshead.

Thanks, operator. In closing, we're off to a great start in 2024. We're transforming diabetes care globally with Omnipod 5, which now also includes our limited commercial launches with G7 in the U.S. and with G6 and Libre 2 Plus internationally. We've got a very strong market leadership position, the right product portfolio to address the needs of both the type 1 and the type 2 global markets and a clear and focused strategy to drive continued growth leveraging our significant competitive advantages. Looking ahead, the balance of the year is going to include a number of important milestones for us as we've been through on the call. We expect all of those milestones to help us drive new customer starts and margin expansion in the second half of this year and lay the foundation for significant long-term growth, all of that while continuing to deliver on our mission to simplify the lives of people with diabetes all over the world. I just want to thank the entire global Insulet team for your dedication and passion for our customers and for our mission. You're doing a great job, global Insulet team. Thank you very much. Thanks, everybody, for joining us today, and we look forward to updating you next quarter.

Ladies and gentlemen, this concludes today's conference. Thank you for your participation, and have a wonderful day. You may now disconnect.