Good afternoon, ladies and gentlemen, and welcome to the Insulet Corporation Second Quarter 2024 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. [Operator Instructions] As a reminder, this conference call is being recorded. And I would now like to turn the conference over to your host, Deborah Gordon, Vice President, Investor Relations.

Good afternoon, and thank you for joining us for Insulet's second 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 a replay of this call and the press release discussing our second 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 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. 2024 is shaping up to be another year of rapid growth, fueled by strong demand for Omnipod 5 and our accelerating pace of product innovation. Our financial results in Q2 demonstrate our strong execution and significant momentum across all of our markets, both in the U.S. and internationally, and we remain the clear industry leader in automated insulin delivery. The Insulet team is executing at a high level and with increasing velocity, delivering strong financial performance and advancing our strategic initiatives. These first half results reinforce our confidence in an even stronger second half, and another year of robust revenue growth and margin expansion as we continue to deliver on our mission to simplify and improve the lives of people with diabetes. Second quarter revenue exceeded our expectations across the board. In light of first half results and continued strong momentum, we increased full year guidance for revenue, gross margin, and operating margin. On today's call, I'll update you on three things; our Q2 results and the continuing strength of our competitive position in the market; execution against our 2024 objectives to expand the Omnipod 5 platform globally, and lastly, our ongoing success capturing the value of scale across our business. Starting with financial performance. In Q2, we achieved total Omnipod revenue growth of 26%, including U.S. growth of 27% and international growth of 24%. Omnipod 5 continues to disrupt the diabetes technology landscape. In the U.S., we maintained a strong momentum in new customer starts, achieving sequential growth in Q2, line with our expectations. Our strategy is to drive market expansion through our focus on bringing people out of multiple daily injections onto Omnipod therapy. As a result of that focus, we continue to rapidly increase our customer base,…

Thank you, Jim, and good afternoon, everyone. We have significant momentum throughout our global business and elivered another strong quarter of financial results strategic execution. Most importantly, our global team continues to advance our mission to simplify and improve the lives of people with diabetes. Second quarter results exceeded our expectations. We achieved 23% revenue growth, driven by total Omnipod growth of 26%. Our estimated global retention remained stable. The foreign currency impact on total company revenue on a reported basis was approximately 80 basis points favorable versus our reported guidance. US Omnipod revenue growth was 27%, finishing above the high end of our guidance range. Omnipod 5 integrated with G6 is the primary driver of our strong growth, while our integration with G7 is gaining momentum. We are excited to have launched our US full market release with G7 in June, and we will continue to face into our channel partners over the coming months. I will speak more to this dynamic in a few moments. Our year-over-year US revenue growth was primarily driven by our success expanding our customer base and increasing volume throughout the pharmacy channel, including premium Omnipod. This was partially offset by an estimated $10 million reduction of inventory in the channel as we manage the Omnipod 5 G6 to G7 transition, which was in line with our expectations. US utilization trends were slightly lower than prior year as a result of Omnipod 5's significant ramp in the first full year of launch in 2023. As it relates to our US revenue expectations, we estimate approximately half of our beat versus the high end guidance was due to our strong commercial execution. The other half was due to pricing benefits from channel mix as well as fewer G6 pod returns than anticipated. Our underlying growth…

Thank you. [Operator Instructions] And your first question comes from the line of Robbie Marcus with JPMorgan. Your line is open.

Great. Thanks for taking the question. Congrats on a really nice quarter. I want to ask some clarifying questions here. I'll just get them all in. First, gross margin would have been something closer to 70.5% operating margin and EBITDA would have been materially higher without the onetime charge to write down the inventory. I guess, what was the reason to leave it in and not back it out? I think most companies would have backed it out. And then second, I think there's just a little confusion on the commentary around the new patient ramp in the second half. Maybe you could just add a little clarifying commentary to that? Is it less new patients? Is it related to type 2 specifically? Is it competitive switches? Just make it crystal clear the view and can you grow new patients year-over-year. Thanks a lot. A – Jim Hollingshead: Thanks, Robbie. It's great to have you on the call. Thanks for your question, and thanks for your congrats. I'll start on the new customer start question, and then I'll hand back to Ana to talk about the margin and the onetime charge. So a new customer starts we're trying to describe what we see in the market really, really clearly. And the first thing is had good sequential increase in new customer starts, which was our goal and we hit along those guides. What we're seeing in the market, we're trying to characterize the trend we've seen in the market. So we were up in MDI in both type 1 and type 2. And looking to the quarter, what we see is a dynamic where just in installed base and market-wide, competitive switching for patients already in the installed base is down. And there was some question as we've looked at…

And your next question comes from the line of Jeff Johnson with Baird. Your line is open. Q – Jeff Johnson: Thank you. Jim, maybe I can ask one clarifying question on your new starts and I do have one of the questions that implied fourth quarter guidance. But on the new starts, I think I heard you saying that your new starts were up sequentially, I just want to confirm that and make sure that the US, global or what number is that? And is that everything combined, kind of the MDI plus competitive convert, you put it on a lot of new starts overall to the company. We're up either US or globally and then like I said, I have one question on the fourth quarter. A – Jim Hollingshead: Yeah. So yeah, so Jeff, thank you for the question. New starts were up, both in the US sequentially and internationally sequentially. Just to be clear.

Okay, that's helpful. And then just on the implied fourth quarter guidance, either for Ana or for you, Jim. When I look at the U.S. Omnipod guidance, depending on what I pick is the midpoint or the point -- I decided to in 3Q within your guidance, the implied kind of the fourth quarter U.S. Omnipod growth probably where from low single-digits to low double-digits, the bigger range there because we're taking a point estimate in 3Q. You obviously had anywhere from 6 to 9 points depending on how much we count the pull forward into 4Q 2023 last year, that's kind of a year-over-year headwind. When I put all that in the hopper, it seems like you're kind of talking about fourth quarter U.S. Omnipod growth in the low to mid-teens. One, is that a reasonable way to think about how you're thinking about adjusted U.S. Omnipod growth? And is that where we should be thinking about as kind of a stepping off point for 2025? Or is there other things in 2025, like type 2 in that, that can maybe take you above that low to mid-teens U.S. Omnipod growth? Thank you.

Jeff, I'll start with that. Thanks for the question. You are absolutely correct. There are absolutely a lot of puts and takes, especially in the fourth quarter. The important thing to recall here is that our overall guidance for the year continues to be strong, and I know you're referring here specific to the U.S. with that high end of our guidance at that 21%. So, we raised the volume at 18% up to the 21%. I do want to mention something as we think of 2025, which we are not providing guidance during this call. We'll wait until we wrap-up the fourth quarter. We have a lot of things transpiring here, as Jim mentioned in the second half of the year. G7, we have iOS. We have Libre 2 Plus. We have the international that it's really ramping incredibly nicely and more countries ahead and we have the type 2 label extension. Once we have more clarity into the later part of the year, we'll come back and provide that additional guidance.

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

Good afternoon. Thanks for taking the question. Hey Jim, one clarification on new starts for me. Did you say overall U.S. starts -- new starts to be up in Q3 and Q4?

Yes. So, Larry, I know we're actually going to get a lot of clarifying questions on this. I'll just -- let me see if I can characterize it clearly. I'll give it another try. So, we expect sequential growth in the U.S. in new customer starts in Q3 and then again in Q4. And that's consistent with what we've said over the course of the last two quarters, where we expect the second half to be stronger and sequentially stronger two, three, four -- Q2, Q3, Q4 over the course of the year. And the ramp characteristics remain the same. The big tailwind driver for us is G7 and then we have other tailwinds coming. I think that one question that I'm sure people are asking themselves is what does that mean in terms of where we land. And there's two things that have changed in the quarter. One is, as I said, there's a smaller portion of the market overall is competitive switching, although we continue to win clearly in competitive switching. And the other thing is, as we said in the prepared comments, is our G7 launch is going very well through the specialty pharmacy channel and the ramp is good. Demand is good. We're servicing it really well. But we made the decision because of that to not disrupt the customer experience and the channel experience to let inventory flow more naturally into that channel. And so both of those things create a little bit -- I would say, a little bit of a change in our outlook on total new customer starts in the second half. And so as Ana characterized in her comments, we expect a steep ramp, but the ramp in the second half is probably a little bit less steep than we had been expecting before. Now where that lands in terms of total year new customer starts, is hard to characterize each of those -- each of those two dynamics are kind of hard to quantify neither of them is that big. But combined, what we're expecting is a less steep ramp in the second half, but still a really good ramp in the second half in new customer starts in the U.S.

Okay. So Jim thanks. And so margins, that's what I wanted to ask about. If I take out the onetime charge in the second quarter, your gross margin in the first half, I think, was about 70%. The implied -- even with keeping the one-time charge in, it's about 68.5%. So why the lower -- lower gross margin in the second half versus the underlying first half? And how should we think about the benefit to your gross margin from Malaysia beyond 2024? Thanks.

Yes. Let me jump into that. So in the first quarter, we had gross margin of 69.5%, and now we have 67.7%. So that gets us shy of the 69%. And in the second half, we expect to be, as you can imagine, we're guiding to the full 69%. So that's going to be higher than the 69% to make the overall. So that guidance, I just want to be clear, contemplates that contemplates that 70 -- for the full year 70 basis points of pressure, we did not back that out from our guidance. We kept the Omnipod GO charge that we took this quarter in our guidance. So hopefully, helps answer the question. Malaysia has a more limited impact. So as it's starting to produce product. And we expect to get more of that benefit, as we move into 2025 and the first full year of running operations.

And your next question comes from the line of Margaret Kaczor with William Blair. Your line is opens.

Hi. Good afternoon, folks. Thanks for taking my questions. I guess one on International and one in the U.S., and apologies for having both in here. But internationally, obviously, you're seeing a tremendous amount of traction. So can you give us some sense around how much of the beaten guidance range this quarter is related to new patient adds in these two countries, the two new countries that you are in? Are seeing kind of this change in MDI starts just in general, where you can start to say, hey, this is a market trend. This isn't just, hey, we're taking competitive switches or more new patient adds, which I'm sure is part of it. But just trying to get a sense of what's going on, on the ground? And is it happening similar as we saw in the U.S. a few years ago. And then just on the U.S. side and this is a clarification question that may be helpful may not. But the change in competitive converts, historically, 20% of new patient adds or competitive converts. Now you're saying it's 15%. So the delta seems pretty minor 5% but correct me if I'm wrong on that. Thank you.

Yeah. Thanks, Margaret. I'll take both of those. On international, we're so pleased with Omnipod 5 internationally. It clearly wins wherever we're able to take it. The U.K. launch continues to go extremely well. The Germany launch is going extremely well and off a very strong performance in previous quarters, we -- both of those countries continue to perform ahead of expectation. We've just launched in France. It's very early. France is a really big market for us, but we know we have big demand, and we're rolling that out. We have patients on product and that's beginning to ramp. And then the other launch is, of course, the Netherlands. And -- when we launched the Netherlands, that was our first -- when we entered that country, entered it with our sensor of choice offering, which is G6 and Libre 2, and we took that center of choice offering into the UK, where we were already on market with G6, and that offering is going great. So these are largely MDI growth, driven growth phenomenon in all of those countries. As you know, internationally, most people who are on technology are locked into their contracts. And so it's largely MDI new-to-market customers. Many of them are already on a CGM because CGM paves a road for us, but they're largely new to market pumpers, and we're really, really pleased with the performance, and it makes us very bullish as we continue to roll out Omnipod 5 internationally. On the US dynamic, yes, I mean we're trying to characterize it. It's a little bit odd. We know there's lots of questions about what's going on out there. But you're right, the mix shift is -- that kind of percentage mix shift. That's consistent with what we had last quarter, 85-15. But as we look at the market, what we see as a trend now where just total base of competitive switching out there is smaller. It's a smaller part of the market. It's never been our focus in the business. It's not our focus. Now our focus is market growth. But that 85-15 split is actually not that big a deal. We just want to characterize the dynamic. MDI, we were up in MDI type 1 in the US., up in MDI in type 2, and we very clearly lead in MDI. Although we also win in competitive switching, that's a smaller part of our market and a lower emphasis for us strategically.

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

Hey, I wanted to clarify a couple of things from the earlier questions. So Jim, did you say new starts can grow year-over-year in the second half of the year? And also I wanted to clarify, you were commenting on demand is good, but you made a decision to disrupt the customer experience and let inventory grow naturally. So that creates a [indiscernible] in the outlook in the second half? So I really wanted to understand kind of what you make...

Travis, It's -- I hope I didn't say it that way. I meant the exact opposite of what you just said, which is we don't want to disrupt customer experience. So what's going on with the specialty pharmacy launch, we've used that kind of specialty pharmacy approach a couple of times in the past, especially as we entered pharmacy. We've actually upgraded the way do it, so with this launch. And with -- this is the first time that we've brought kind of a new compatibility to the Pod into the same channel under the same reimbursement code. And so figuring out how to feather that in and focus our built inventory on new customers has been what we've been designing to do. And we decided to take that into pharma -- into the specialty pharmacies because it allows us to focus on new starts rather than driving a lot of conversion in the base, which doesn't grow our customer base, right? So by taking it through specialty pharmacy, we're focusing on growing our new customer base, which is really important to the business and brings new customers into the market. And as we did that, it wasn't fair to us as we planned it because it was the first time what dynamic would be. The dynamic is great. We're actually really well able to service very strong demand for G7 through specialty pharmacies. And saying that, I should also point out, those specialty pharmacies, the most of them were through multiple pharmacies there through kind of a hub service that we've set up. And most of them are not visible to third-party data. So if people are out there trying to watch our new customer starts, they won't be able to see most of our G7 starts through other reporting mechanisms, for example, like IQVIA. So demand is really good, and it's flowing so well and we can flex it. And so that customer experience has been great. Therefore, we've decided not to force inventory into the retail channel, which would be potentially disruptive both for our channel partners and for customers. So we're going through specialty pharmacy. It's going very well, and we're going to let the inventory transition in retail at a more natural pace. So that's why it's really because of a new customer -- we want to deliver the strongest possible customer experience, and we're happy with how specialty pharmacy is going. So that's on that question. On the first part of your question, year-over-year growth, I think we expect during the second half to cross over into year-over-year growth, it's hard to call exactly when that happens. But the expectation is yes, we get year-over-year growth in the second half.

And your next question comes from the line of Michael Polark with Wolfe Research. Your line is open.

Thank you. Okay. I'll ask a follow-up on the Type 2 update. The decision to prioritize 05 over go, I'm interested -- is your expectation that that the SECURE-T2D label or data will allow you to market both the MDI and basal-only population? That's one question. And then the second piece is pricing? Would you expect kind of patient-agnostic pricing for this product? And the third is -- I heard about the investments in the back half to set the stage for the Type 2 launch next year. Any way to frame how much you expect to expand head count through this process? Thank you so much.

Thanks, Mike. Thanks for the question. The first thing is, yes, I don't want to get too far in front of the FDA on the actual label, but the label we anticipate would allow us to market to both intensive insulin and basal insulin users. So that's the aim. And SECURE-T2D backs that up because 20% of the participants in SECURE-T2D were basal-only users, and they have fantastic results. And so the goal of Omnipod 5 is to get out there and help people who are on insulin who need better control because of the fantastic smart adjust algorithm and its ability to -- as you know, we adjust both basal and adjust for real-time bolus. And so that's the goal. And therefore, if we're able to achieve that labeling, we can help basal-only patients with Omnipod 5. And I know that know that you the initial plan was to start people on Omnipod GO and then as their insulin needs change get them on to Omnipod 5. And the beauty of this strategy is that we don't have to wait to have people going to Omnipod 5. Contingent on FDA labeling, which we expect, and I don't want to get in front of it and all those caveats, we think we can just -- we don't have to wait for Omnipod 5, we just take it to market as Omnipod 5 and meet the needs of a very wide range of patients than we were going to be able to meet. So we're excited about that. And Ana forgotten already the second part of your question. So...

No, I just wanted to add maybe a comment there. When you think of the implications of that decision, it's not just a short-term impact that we just talked about. There is a much longer-term impact. Jim commented on the customer, commercial, all those things that there's also an operational impact in the company with less product life cycles, simpler in terms of our manufacturing capacity and operational and all those things that come along with that. It's going to have its fruits much longer into the 2025.

Yes, we're really excited about being able to go on to the Omnipod 5 platform as the flagship offer there. I remember your other two components, Mike, so quickly on pricing. We don't anticipate -- I mean, Omnipod 5 is already well covered, well reimbursed for people with Type 2 diabetes. There's -- right now, there's no distinction, and we don't expect big commercial changes on that front. We'll see what happens, but we don't expect any disruption. And then on the other side of that, with the sales force, we've been successfully adding sales force heads now for some time. We added some earlier in the year. We'll continue to add sales force. We'll have more to say about the scale of that and the model for that as we get closer to actual launch.

And your next question comes from the line of Matt Taylor with Jefferies. Your line is open.

Hi, thank you for the question. Maybe I could just further get some color and help clarify a couple key things we've been talking about on the call. One is I did want to ask you about -- you mentioned channel mix benefits in this quarter. And I'm wondering if you could talk about the source of those? And I guess just the outlook for that in the US and as a company, as you have a lot of shipping sand in terms of the different channels and how the mix could evolve?

Sure. I'll start with that one. So when you think of the US, and we are very heavily penetrated now in the pharmacy channel, what we have is we ship product and then we have, of course, the wholesalers, the distributors and the PBMs, and at the end, it's the end customers. So how it moves into, which specific distributors with what relationships, and which PBMs with what coverage. That all is hard to call. And now what we're talking about is not huge dollars, what I described in terms of the impact, but we should have some fluctuation in our pricing as we go through that process. So we will continue to refine our models and just continue to get better and better around that. But it's really a simple dynamic of being now so heavy into the pharmacy channel.

And your next question comes from Chris Pasquale with Nephron. Your line is open.

Thanks. I had one on International and one on the GO decision. On OUS, by our math, your International installed base share is well-below where you are in the US. I'm curious though, when we look at that overall international market, what percentage of those patients are in geographies where you have a presence today? In other words, how much of that pie are you really able to compete for?

Yeah. Thanks, Chris. Internationally, as you know, we're only in 24 markets OUS. And the larger markets are obviously the usual suspects of large markets, UK, Germany, France, Nordics. And so we're in the U. with Omnipod 5 now in Germany with full releases and growing really, really well. France, we're just out of the gate with the Omnipod 5 launch in France. And then as we said in the prepared remarks, Nordics is on the list for coming launches. And then -- and you can -- just by population, I think all the medtech markets are fairly similar in terms of total opportunity. So we feel really good about where we are with Omnipod 5. It's clearly winning where we take it. And as we roll it out, we're very bullish on growth, which is what led us to another 600 basis point increase in guide.

And your next question comes from the line of Mike Kratky with Leerink Partners. Your line is open.

Hi, everyone. Thanks for taking our questions. Maybe just a couple on the type 2 launch. First of all, is your plan to implement a full commercial launch in type 2 once you get approval? Or could that be a more sequence launch? And then maybe just a quick one on the basal-only population, but based on the updates today, can you provide some color on the level of demand that you saw for pumps in the basal-only population? And does that change your outlook at all as you think about Omnipod 5?

Thanks, Mike. In terms of full commercial launch, I mean, what we've done is we've choreographed our plan for the launch in line with what we expect in terms of FDA approval. And so -- we expect FDA approval by the end of the year. And once we have that and with all the other pieces in place in terms of things like sales force training so on, we'll be able to promote in line with that. But we also anticipate, as I said, we'll say more -- we'll give more detail as we get closer to that. We anticipate also expanding our sales reach into nonspecialty channels by adding some feet on the street. And that just gives us more share voice into those markets. And so we'll have more to say about that later. But we do anticipate being able promote as we get clearance. The second side of your question around basal -- thank you. With basal, Omnipod GO product, we were out there looking at how do patients present in the channel. And we saw a number of patient profiles. So we went in with draft patient profile that I won't try to detail. We then -- we added a patient profile to that. And what we found was that there are a lot of patients in the non-specialty channel. There's different patient profiles with type 2 diabetes that need insulin, and there's also a lot of type 1 patients in there. So we're very confident that there's a lot of patients that -- whose needs we can address with Omnipod 5. And if anything, I would say, focusing on to Omnipod 5 makes us even more bullish about our ability to penetrate that market. So we learned a lot as we are in those practices about what's happening in there and which kinds of patients are in there. And we're really excited about taking Omnipod 5 as the flagship product for the patient journey into those channels and to reach those patients.

And your next question comes from the line of Jayson Bedford with Raymond James. Your line is open Q – Jayson Bedford: Hi, good afternoon. I've got 15 clarifying questions. I'm just kidding. Just -- just quickly couple of type 2s. Are you seeing any benefit from the type 2 data that you presented at ADA in late June? And then second, you seem more confident in the timing of type 2 approval for Omnipod 5. Just to be clear, you're confident that reimbursement is in place. There's not going to be a lag in adoption because of reimbursement? Thanks.

Thanks, Jason, and thanks for the non 15 question list. So that -- so on type 2, yes, we're very confident. I mean, type 2 -- Omnipod 5 right now is reimbursed through the pharmacy benefit. There's not a request for which type of diabetes. It's a script that's written for Omnipod 5, and it's very well covered on that basis, and that's why physicians are writing off label for it. We did see an increase in MDI starts for type 2 patients in the quarter. We don't call out whether that's Omnipod DASH, which has the full indication for user, Omnipod 5. We did see some lift in MDI for type 2. We are not promoting Omnipod 5 for type 2 diabetes because we do yet have the indication for use expansion that will allow us to do that. And our reps, as I've said before, have one arm tied behind their back for that. So we're really bullish on that. But we have seen some lift. And we think the coverage should be final. There shouldn't be any delay in coverage for Omnipod 5 in type 2.

And your next question comes from the line of Matthew O'Brien with Piper Sandler. Your line is open. Q – Matthew O'Brien: Thanks for taking the question. I'm so sorry, I do have a clarifying one. What's this inventory tailwind you should be getting in the second half of year? I'd love to know about that. And then my main question is really on the MDI side. If I look at the results for you guys for a couple of your competitors, it looks like the MDI penetration rates are starting to accelerate, first of all, is that true? Secondly, what's driving it? Is it new technologies? And just how durable is it between type 1 and type 2s just given how important it's going to be for you guys going forward as you grow your business? Thanks.

Thanks, Matt. So I'll start with your comment on inventory tailwinds. So as we talked about last quarter, we were anticipating a destocking of about $10 million, which we saw happened during the second quarter. And what we anticipate is during the second half of the year that should come back. And the reason it is all around the G6, G7 transition and how we're managing the channel through that process.

Thanks, Matt. On the MDI question. I won't try to probably together any of our competitors' results. I'll just say that I think it's reasonable to think that MDI penetration in type 1 is accelerating, and we're clearly leading that. So Omnipod 5 is very highly preferred with MDI patients. We continue to grow that space and we continue to win with MDI conversions. I think it's durable for both type 1 and type 2. And the reason I believe that is because the burden of living with diabetes remains very high and because our CGM partners have been out paving road very effectively in front of us for some time. And so, we've said before that we think penetration for AID in the type 1 space can go very high, well above 70% on the back of the pave road from CGM, and we're confident that we're going to be the leader that drives that kind of penetration. And we believe that now you see a lot of adoption in type 2 space with CGMs on an ongoing basis. And so our two partners, Abbott and Dexcom, are out there paving road for us in type 2, and we see a big opportunity to take Omnipod 5 likely as the first-to-market AID system in that space, you see a big opportunity to drive the penetration of Omnipod 5 and type 2 as well.

And your next question comes from the line of Steve Lichtman with Oppenheimer. Your line is open.

Thank you. Good evening, everyone. On the international strength you were seeing versus you're thinking heading into the year, are you seeing better reimbursement and pricing in addition to faster new patient growth? Or is it is it -- all better volume? And can you remind us when you could have a G7 connectivity internationally?

Thanks, Steve. Yes. So what we've done, and we've referred to this in the past, as we launch Omnipod 5, we work really hard to make sure that our reimbursement is commensurate with the additional value that Omnipod 5 creates for the health care system and for patients. And so we've been able to, so far, so good, successfully negotiate a premium for Omnipod 5, where we've launched it. And so it is both volume and a bit of a price benefit. And -- but volumes are very, very good, obviously, with -- the starts are very, very strong for us with Omnipod 5 where we've taken it. And then again, I'm forgetting the second half of the...

The G7 International.

G7, we haven't announced timing. So we're obviously working on it. We have a very effective working G7 integration, which is creating a big tailwind for us in the US, we'll get it into European markets as soon as we can, but we have not yet announced timing.

And your next question comes from the line of Joanne Wuensch with Citibank. Your line is open.

Good evening. Thanks for taking the question and very nice quarter. Yesterday, there was an announcement that I think took a lot of people by surprise, the agreement between Medtronic and Abbott. I would love your opinion on how this changes or doesn't change the AID, and really diabetes delivery landscape. Thanks.

Thanks, Joanne. Yes, we're very happy with our two CGM partners. We have a great relationship with Abbott. We have a great relationship with Dexcom. We're working really well with both of them. We're very excited to announce that we'll be bringing the Libre 2+ integration to the US market by the end of the year. And for us, we have a clear road map for Omnipod 5 platform expansion that includes sensor expansions, and it's full speed ahead. We remain very confident in our competitive position. Omnipod 5 is extremely differentiated from two pumps and will continue to be. And so we're very bullish full speed ahead with both of our partners.

And we have time for one last question. That will be from Bill Plovanic with Canaccord Genuity. Your line is open.

Hey. Great. Thanks for taking my question and congrats on a good quarter. In terms of the gross margin, from shifting over to Malaysia, how much gross margin longer-term benefits should we see from that? And then how much do you pick up by eliminating GO, which potentially was probably a lower gross profit product, I would assume. Just kind of curious what that does for the longer-term GMs. Thanks for taking my questions.

Great. Let me get started on that. So as we commented, we have really strong gross margin once you back out the impact -- the one-time impact of GO. We have stated before and continue to state Malaysia strategic for us. In the first 12 years, we will be accretive. So at the moment, we're ramping, so that will take time. So you can expect that, that will be accretive right at around that one-year mark and will continue to be. And the other point being the product life cycle. So by taking manufacturing time away from shifting lines and all of those things, we'll anticipate that. We're not providing long-term guidance here. So we'll come back and provide more color after we wrap up here in 2024. I do want to take the opportunity to come back to some of the early questions on new customer starts and clarify just to make sure everybody is on the same page. So new on customer starts, we expect sequential growth, second quarter to third quarter, third quarter to fourth quarter that to be true, US, international, of course, globally. And we already talked about all the reasons why that would happen. The question came up around year-over-year. And I want to also reiterate not only globally because it's obvious that international is working so well, but to a lesser extent, but it's there. Our guidance contemplates year-over-year growth in US NCS. So I just wanted to make sure that that was clarified for everyone.

And ladies and gentlemen, this concludes our question-and-answer section. I would now like to turn the conference back to Mr. Jim Hollingshead for closing remarks.

Thank you, operator. In closing, we're very pleased with our Q2 and excited about our coming second half. Our cascade of innovation continues with our G7 tailwind, iOS and Libre 2 coming to the US and we're eagerly anticipating TAM expansion with FDA clearance for Omnipod 5 and type 2. Our international business continues to outperform on the strength of Omnipod 5. All of that led us to raise our guide across the board. And none of that would be possible without our amazing global Insulet team who get up every morning to change the lives of people living with diabetes. Thank you, global team. And thanks for joining us, everybody, today. We look forward to updating you next quarter.

And ladies and gentlemen, this concludes today's conference, and we thank you for your participation. Have a wonderful day, and you may all disconnect.