UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

_____________________________________________________


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, ~~2020~~2021


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number 001-33462

INSULET CORPORATION

(Exact name of Registrant as specified in its charter)

Delaware

04-3523891

(State or Other Jurisdiction of
Incorporation or Organization)

(I.R.S. Employer
Identification No.)

100 Nagog Park

Acton

Massachusetts

01720

(Address of Principal Executive Offices)

(Zip Code)

Registrant’s Telephone Number, Including Area Code: (978) 600-7000

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.001 Par Value Per Share	PODD	The NASDAQ Stock Market, LLC

As of July 30, ~~2020,~~2021, the registrant had ~~65,650,528~~68,873,869 shares of common stock outstanding.

TABLE OF CONTENTS


PART I. FINANCIAL INFORMATION

Item 1. Condensed Consolidated Financial Statements			3
Condensed Consolidated Balance Sheets (Unaudited) as of June 30, 2021 3 0 ~~, 2020~~ and December 31, ~~2019~~2020			3
Condensed Consolidated Statements of Operations (Unaudited) for the three and six months ended Ju neJune 30,~~, 2020~~ 2021 and ~~2019~~2020			4
Condensed Consolidated Statements of Comprehensive (Los s )Income (Unaudited) for the three and six months ended June 30, ~~2020~~2021 and ~~2019~~2020			5
Condensed Consolidated Statements of Stockholders' Equity (Unaudited) for the three and six months ended June 3 0 ~~, 2020~~ 30, 2021 and ~~2019~~2020			6
Condensed Consolidated Statements of Cash Flows (Unaudited) for the six months ended June 3 0 ~~, 2020~~ 30, 2021 and ~~2019~~2020			8
Notes to Condensed Consolidated Financial Statements (Unaudited)			9
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			17
Item 3. Quantitative and Qualitative Disclosures About Market Risk			24
Item 4. Controls and Procedures			2425

PART II. OTHER INFORMATION
Item 1. Legal Proceedings			2526
Item 1A. Risk Factors			2526
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			26
Item 3. Defaults Upon Senior Securities			26
Item 4. Mine Safety Disclosures			26
Item 5. Other Information			26
Item 6. Exhibits			2627
Signatures			2728

Table of Contents

PART I - FINANCIAL INFORMATION


Item 1.			Condensed Consolidated Financial Statements (Unaudited)

INSULET CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(UNAUDITED)


(in millions, except share and per share data)	(in millions, except share and per share data)	June 30, 2020		December 31, 2019		(in millions, except share and per share data)	June 30, 2021		December 31, 2020
ASSETS	ASSETS					ASSETS
Current Assets	Current Assets					Current Assets
Cash and cash equivalents	Cash and cash equivalents	$	779.1	$	213.7	Cash and cash equivalents	$	854.6	$	907.2
Short-term investments	Short-term investments	65.3		162.4		Short-term investments	17.5		40.4
Accounts receivable trade, less allowance for credit losses of $4.6 and $3.8		78.0		69.3
Accounts receivable trade, less allowance for credit losses of $3.7 and $2.9 (Note 16)						Accounts receivable trade, less allowance for credit losses of $3.7 and $2.9 (Note 16)	100.3		83.8
Inventories	Inventories	103.7		101.0		Inventories	197.8		154.3
Prepaid expenses and other current assets	Prepaid expenses and other current assets	59.6		44.6		Prepaid expenses and other current assets	82.7		63.0
Total current assets	Total current assets	1,085.7		591.0		Total current assets	1,252.9		1,248.7
Long-term investments		23.5		58.4
Property, plant and equipment, net	Property, plant and equipment, net	423.2		399.4		Property, plant and equipment, net	505.5		478.7
Other intangible assets, net	Other intangible assets, net	10.9		13.2		Other intangible assets, net	33.4		28.7
Goodwill	Goodwill	39.6		39.8		Goodwill	39.9		39.8
Other assets	Other assets	43.8		41.1		Other assets	92.0		77.0
Total assets	Total assets	$	1,626.7	$	1,142.9	Total assets	$	1,923.7	$	1,872.9
LIABILITIES AND STOCKHOLDERS’ EQUITY	LIABILITIES AND STOCKHOLDERS’ EQUITY					LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities	Current Liabilities					Current Liabilities
Accounts payable	Accounts payable	$	35.6	$	54.5	Accounts payable	$	49.3	$	54.1
Accrued expenses and other current liabilities	Accrued expenses and other current liabilities	98.8		103.2		Accrued expenses and other current liabilities	143.1		138.1
Current portion of long-term debt						Current portion of long-term debt	20.9		15.6
Total current liabilities	Total current liabilities	134.4		157.7		Total current liabilities	213.3		207.8
Convertible debt, net		910.2		887.9
Long-term debt, net						Long-term debt, net	1,235.2		1,043.7
Other liabilities	Other liabilities	18.8		21.4		Other liabilities	16.1		17.8
Total liabilities	Total liabilities	1,063.4		1,067.0		Total liabilities	1,464.6		1,269.3
Commitments and contingencies (Note 9)
Commitments and contingencies (Note 10)						Commitments and contingencies (Note 10)	0		0
Stockholders’ Equity	Stockholders’ Equity					Stockholders’ Equity
Preferred stock, $.001 par value, 5,000,000 authorized; NaN issued and outstanding	Preferred stock, $.001 par value, 5,000,000 authorized; NaN issued and outstanding	—		—		Preferred stock, $.001 par value, 5,000,000 authorized; NaN issued and outstanding	0		0
Common stock, $.001 par value, 100,000,000 authorized; 65,604,347 and 62,685,492 issued and outstanding		0.1		0.1
Common stock, $.001 par value, 100,000,000 authorized; 68,610,078 and 66,017,444 issued and outstanding						Common stock, $.001 par value, 100,000,000 authorized; 68,610,078 and 66,017,444 issued and outstanding	0.1		0.1
Additional paid-in capital	Additional paid-in capital	1,227.6		749.0		Additional paid-in capital	1,149.6		1,264.3
Accumulated deficit	Accumulated deficit	(660.8)		(672.0)		Accumulated deficit	(691.3)		(666.3)
Accumulated other comprehensive loss		(3.6)		(1.2)
Accumulated other comprehensive income						Accumulated other comprehensive income	0.7		5.5
Total stockholders’ equity	Total stockholders’ equity	563.3		75.9		Total stockholders’ equity	459.1		603.6
Total liabilities and stockholders’ equity	Total liabilities and stockholders’ equity	$	1,626.7	$	1,142.9	Total liabilities and stockholders’ equity	$	1,923.7	$	1,872.9

The accompanying notes are an integral part of these condensed consolidated financial statements.

Table of Contents

INSULET CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)


		Three Months Ended June 30,						Six Months Ended June 30,							Three Months Ended June 30,				Six Months Ended June 30,
(in millions, except share and per share data)	(in millions, except share and per share data)	2020		2019		2020		2019		(in millions, except share and per share data)	2021		2020		2021		2020
Revenue		$	226.3	$	177.1	$	424.3	$	336.7
Revenue (Related Party Transactions Note 16)										Revenue (Related Party Transactions Note 16)	$	263.2	$	226.3	$	515.5	$	424.3
Cost of revenue	Cost of revenue	83.8		60.7		154.9		113.6		Cost of revenue	80.5		83.8		165.3		154.9
Gross profit	Gross profit	142.5		116.4		269.4		223.1		Gross profit	182.7		142.5		350.2		269.4
Research and development expenses	Research and development expenses	34.2		33.0		69.7		65.5		Research and development expenses	40.1		34.2		80.8		69.7
Selling, general and administrative expenses	Selling, general and administrative expenses	80.8		75.8		164.7		142.7		Selling, general and administrative expenses	116.3		80.8		226.8		164.7
Operating income	Operating income	27.5		7.6		35.0		14.9		Operating income	26.3		27.5		42.6		35.0
Interest expense, net	Interest expense, net	(11.1)		(5.8)		(21.2)		(10.6)		Interest expense, net	(16.4)		(11.1)		(29.8)		(21.2)
Other income, net		1.0		0.1		1.0		2.3
Income before income taxes		17.4		1.9		14.8		6.6
Income tax expense		(3.0)		(0.5)		(2.5)		(0.8)
Net income		$	14.4	$	1.4	$	12.3	$	5.8
Loss on extinguishment of debt										Loss on extinguishment of debt	(40.1)		0		(40.1)		0
Other income (expense), net										Other income (expense), net	1.8		1.0		(0.8)		1.0
(Loss) income before income taxes										(Loss) income before income taxes	(28.4)		17.4		(28.1)		14.8
Income tax benefit (expense)										Income tax benefit (expense)	3.4		(3.0)		3.1		(2.5)
Net (loss) income										Net (loss) income	$	(25.0)	$	14.4	$	(25.0)	$	12.3

Net income per share:
Net (loss) income per share:										Net (loss) income per share:
Basic	Basic	$	0.22	$	0.02	$	0.19	$	0.10	Basic	$	(0.37)	$	0.22	$	(0.38)	$	0.19
Diluted	Diluted	$	0.22	$	0.02	$	0.19	$	0.09	Diluted	$	(0.37)	$	0.22	$	(0.38)	$	0.19
Weighted-average number of common shares outstanding:
Weighted-average number of common shares outstanding (in thousands):										Weighted-average number of common shares outstanding (in thousands):
Basic	Basic	64,370,791		59,844,991		63,627,231		59,601,365		Basic	66,696		64,371		66,406		63,627
Diluted	Diluted	65,578,513		61,486,325		64,970,187		61,332,451		Diluted	66,696		65,579		66,406		64,970

The accompanying notes are an integral part of these condensed consolidated financial statements.

Table of Contents

INSULET CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME

(UNAUDITED)

Three Months Ended June 30, Six months ended June 30,
(in millions) 2020 2019 2020 2019
Net income $ 14.4 $ 1.4 $ 12.3 $ 5.8
Other comprehensive income (loss), net of tax:
Currency translation adjustment 0.6 (0.4) (2.8) (1.2)
Unrealized (loss) gain on available-for-sale debt securities (0.4) 0.7 0.4 1.3
Total other comprehensive income (loss), net of tax 0.2 0.3 (2.4) 0.1
Comprehensive income $ 14.6 $ 1.7 $ 9.9 $ 5.9


	Three Months Ended June 30,				Six Months Ended June 30,
(in millions)	2021		2020		2021		2020
Net (loss) income	$	(25.0)	$	14.4	$	(25.0)	$	12.3
Other comprehensive (loss) income, net of tax:
Foreign currency translation adjustment	(1.8)		0.6		(3.9)		(2.8)
Unrealized loss on cash flow hedges	(0.6)		0		(0.6)		0
Unrealized gain (loss) on available-for-sale debt securities, net of tax	(0.1)		(0.4)		(0.3)		0.4
Total other comprehensive (loss) income, net of tax	(2.5)		0.2		(4.8)		(2.4)
Comprehensive (loss) income	$	(27.5)	$	14.6	$	(29.8)	$	9.9

The accompanying notes are an integral part of these condensed consolidated financial statements.

Table of Contents

INSULET CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(UNAUDITED)

Three Months Ended June 30, ~~2020~~2021

Common Stock Additional
Paid-in
Capital Accumulated
Deficit Accumulated Other Comprehensive Loss Total
Shareholders’
Equity
(in millions, except share data) Shares Amount
Balance at March 31, 2020 63,057,874 $ 0.1 $ 737.9 $ (675.2) $ (3.8) $ 59.0
Issuance of common stock 2,369,668 — 477.5 — — 477.5
Exercise of options to purchase common stock 131,542.0 — 5.1 — — 5.1
Issuance of employee stock purchase plan 18,685 — 2.9 — — 2.9
Stock-based compensation — — 5.8 — — 5.8
Restricted stock units vested, net of shares withheld for taxes 26,578 — (1.6) — — (1.6)
Net income — — — 14.4 — 14.4
Other comprehensive income — — — — 0.2 0.2
Balance at June 30, 2020 65,604,347 $ 0.1 $ 1,227.6 $ (660.8) $ (3.6) $ 563.3


	Common Stock			Additional Paid-in Capital		Accumulated Deficit		Accumulated Other Comprehensive Income		Total Shareholders’ Equity
(dollars in millions)	Shares (in thousands)	Amount
Balance at March 31, 2021	66,213	$	0.1	$	1,248.3	$	(666.3)	$	3.2	$	585.3
Exercise of options to purchase common stock	121	—		4.7		—		—		4.7
Issuance of shares for employee stock purchase plan	17	—		3.8		—		—		3.8
Stock-based compensation expense	—	—		9.0		—		—		9.0
Restricted stock units vested, net of shares withheld for taxes	17	—		(1.2)		—		—		(1.2)
Extinguishment of conversion feature on 1.375% Notes, net of issuance costs	—	—		(737.7)		—		—		(737.7)
Issuance of shares for debt repayment	2,242	—		622.7		—		0		622.7
Net loss	—	—		—		(25.0)		—		(25.0)
Other comprehensive loss	—	—		—		—		(2.5)		(2.5)
Balance at June 30, 2021	68,610	$	0.1	$	1,149.6	$	(691.3)	$	0.7	$	459.1

Three Months Ended June 30, ~~2019~~2020

Common Stock Additional
Paid-in
Capital Accumulated
Deficit Accumulated Other Comprehensive Loss Total
Shareholders’
Equity
(in millions, except share data) Shares Amount
Balance at March 31, 2019 59,638,439 $ 0.1 $ 905.8 $ (679.2) $ (3.1) $ 223.6
Exercise of options to purchase common stock 447,214 — 14.6 — — 14.6
Issuance for employee stock purchase plan 27,613 — 2.0 — — 2.0
Stock-based compensation — — 8.3 — — 8.3
Restricted stock units vested, net of shares withheld for taxes 36,660 — (0.4) — — (0.4)
Net income — — — 1.4 — 1.4
Other comprehensive income — — — — 0.3 0.3
Balance at June 30, 2019 60,149,926 $ 0.1 $ 930.3 $ (677.8) $ (2.8) $ 249.8


	Common Stock			Additional Paid-in Capital		Accumulated Deficit		Accumulated Other Comprehensive Loss		Total Shareholders’ Equity
(dollars in millions)	Shares (in thousands)	Amount
Balance at March 31, 2020	63,058	$	0.1	$	737.9	$	(675.2)	$	(3.8)	$	59.0
Issuance of common stock	2,370	—		477.5		—		—		477.5
Exercise of options to purchase common stock	131	—		5.1		—		—		5.1
Issuance of shares for employee stock purchase plan	19	—		2.9		—		—		2.9
Stock-based compensation expense	—	—		5.8		—		—		5.8
Restricted stock units vested, net of shares withheld for taxes	26	—		(1.6)		—		—		(1.6)
Net income	—	—		—		14.4		—		14.4
Other comprehensive income	—	—		—		—		0.2		0.2
Balance at June 30, 2020	65,604	$	0.1	$	1,227.6	$	(660.8)	$	(3.6)	$	563.3

~~The accompanying notes are an integral part of these condensed consolidated financial statements.~~

~~Table of Contents~~

~~Six Months Ended June 30, 2020~~

Common Stock Additional
Paid-in
Capital Accumulated
Deficit Accumulated Other Comprehensive Loss Total
Shareholders’
Equity
(in millions, except share data) Shares Amount
Balance at December 31, 2019 62,685,492 $ 0.1 $ 749.0 $ (672.0) $ (1.2) $ 75.9
Adoption of ASU 2016-13 (Note 1) — — — (1.1) — (1.1)
Issuance of common stock 2,369,668 — 477.5 — — 477.5
Exercise of options to purchase common stock 304,374 — 11.3 — — 11.3
Issuance for employee stock purchase plan 18,685 — 2.9 — — 2.9
Stock-based compensation — — 13.7 — — 13.7
Restricted stock units vested, net of shares withheld for taxes 226,128 — (26.8) — — (26.8)
Net income — — — 12.3 — 12.3
Other comprehensive loss — — — — (2.4) (2.4)
Balance at June 30, 2020 65,604,347 $ 0.1 $ 1,227.6 $ (660.8) $ (3.6) $ 563.3

~~Six Months Ended June 30, 2019~~

Common Stock Additional
Paid-in
Capital Accumulated
Deficit Accumulated Other Comprehensive Loss Total
Shareholders’
Equity
(in millions, except share data) Shares Amount
Balance at December 31, 2018 59,188,758 $ 0.1 $ 898.5 $ (683.6) $ (2.9) $ 212.1
Exercise of options to purchase common stock 716,687 — 23.6 — — 23.6
Issuance for employee stock purchase plan 27,613 — 2.0 — — 2.0
Stock-based compensation — — 14.1 — — 14.1
Restricted stock units vested, net of shares withheld for taxes 216,868 — (7.9) — — (7.9)
Net income — — — 5.8 — 5.8
Other comprehensive income — — — — 0.1 0.1
Balance at June 30, 2019 60,149,926 $ 0.1 $ 930.3 $ (677.8) $ (2.8) $ 249.8

The accompanying notes are an integral part of these condensed consolidated financial statements.

Table of Contents

Six Months Ended June 30, 2021


	Common Stock			Additional Paid-in Capital		Accumulated Deficit		Accumulated Other Comprehensive Income		Total Shareholders’ Equity
(dollars in millions)	Shares (in thousands)	Amount
Balance at December 31, 2020	66,017	$	0.1	$	1,264.3	$	(666.3)	$	5.5	$	603.6
Exercise of options to purchase common stock	164	—		6.2		—		—		6.2
Issuance of shares for employee stock purchase plan	17	—		3.8		—		—		3.8
Stock-based compensation expense	—	—		17.6		—		—		17.6
Restricted stock units vested, net of shares withheld for taxes	170	—		(27.3)		—		—		(27.3)
Extinguishment of conversion feature on 1.375% Notes, net of issuance costs	—	—		(737.7)		—		—		(737.7)
Issuance of shares for debt extinguishment	2,242	—		622.7		—		—		622.7
Net loss	—	—		—		(25.0)		—		(25.0)
Other comprehensive loss	—	—		—				(4.8)		(4.8)
Balance at June 30, 2021	68,610	$	0.1	$	1,149.6	$	(691.3)	$	0.7	$	459.1

Six Months Ended June 30, 2020


	Common Stock			Additional Paid-in Capital		Accumulated Deficit		Accumulated Other Comprehensive Loss		Total Shareholders’ Equity
(dollars in millions)	Shares (in thousands)	Amount
Balance at December 31, 2019	62,685	$	0.1	$	749.0	$	(672.0)	$	(1.2)	$	75.9
Adoption of ASU 2016-13 (1)	—	—		—		(1.1)		—		(1.1)
Issuance of common stock	2,370	—		477.5		—		—		477.5
Exercise of options to purchase common stock	304	—		11.3		—		—		11.3
Issuance of shares for employee stock purchase plan	19	—		2.9		—		—		2.9
Stock-based compensation expense	—	—		13.7		—		—		13.7
Restricted stock units vested, net of shares withheld for taxes	226	—		(26.8)		—		—		(26.8)
Net income	—	—		—		12.3		—		12.3
Other comprehensive loss	—	—		—		—		(2.4)		(2.4)
Balance at June 30, 2020	65,604	$	0.1	$	1,227.6	$	(660.8)	$	(3.6)	$	563.3

(1) The Company recorded a cumulative effect adjustment to retained earnings to reflect the adoption of Accounting Standards Update 2016-13, Credit Losses (Topic 326). Refer to Note 2 of Item 8 of our Annual Report on Form 10-K for the year ended December 31, 2020.

The accompanying notes are an integral part of these condensed consolidated financial statements.

Table of Contents

INSULET CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)


		Six Months Ended June 30,							Six Months Ended June 30,
(in millions)	(in millions)	2020		2019		(in millions)	2021		2020
Cash flows from operating activities	Cash flows from operating activities					Cash flows from operating activities
Net income		$	12.3	$	5.8
Net (loss) income						Net (loss) income	$	(25.0)	$	12.3
Adjustments to reconcile net income to net cash provided by operating activities:	Adjustments to reconcile net income to net cash provided by operating activities:					Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	Depreciation and amortization	18.8		11.0		Depreciation and amortization	28.0		18.8
Non-cash interest		22.3		15.4
Stock-based compensation		13.7		14.1
Non-cash interest expense						Non-cash interest expense	23.5		22.3
Stock-based compensation expense						Stock-based compensation expense	17.6		13.7
Loss on extinguishment of debt						Loss on extinguishment of debt	40.1		0
Provision for credit losses	Provision for credit losses	2.6		2.0		Provision for credit losses	2.1		2.6
Other	Other	—		(0.6)		Other	1.1		0
Changes in operating assets and liabilities:	Changes in operating assets and liabilities:					Changes in operating assets and liabilities:
Accounts receivable	Accounts receivable	(13.8)		(7.0)		Accounts receivable	(19.5)		(13.8)
Inventories	Inventories	(2.8)		(14.0)		Inventories	(45.0)		(2.8)
Prepaid expenses and other assets	Prepaid expenses and other assets	(14.0)		(1.5)		Prepaid expenses and other assets	(30.0)		(14.0)
Accounts payable, accrued expenses and other current liabilities		(13.9)		(3.5)
Other liabilities		(2.4)		(1.3)
Net cash provided by operating activities		22.8		20.4
Accounts payable						Accounts payable	(4.4)		(9.8)
Accrued expenses and other liabilities						Accrued expenses and other liabilities	(5.3)		(6.5)
Net cash (used in) provided by operating activities						Net cash (used in) provided by operating activities	(16.8)		22.8
Cash flows from investing activities	Cash flows from investing activities					Cash flows from investing activities
Capital expenditures	Capital expenditures	(51.7)		(91.9)		Capital expenditures	(52.8)		(51.7)
Acquisition of intangible assets	Acquisition of intangible assets	(0.5)		(5.0)		Acquisition of intangible assets	(3.8)		(0.5)
Purchases of investments	Purchases of investments	(37.9)		(39.1)		Purchases of investments	0		(37.9)
Receipts from the maturity or sale of investments	Receipts from the maturity or sale of investments	170.7		104.2		Receipts from the maturity or sale of investments	22.5		170.7
Net cash provided by (used in) investing activities	Net cash provided by (used in) investing activities	80.6		(31.8)		Net cash provided by (used in) investing activities	(34.1)		80.6
Cash flows from financing activities	Cash flows from financing activities					Cash flows from financing activities
Proceeds from issuance of debt, net						Proceeds from issuance of debt, net	489.5		0
Payment of debt issuance costs						Payment of debt issuance costs	(4.0)		0
Repayment of convertible debt						Repayment of convertible debt	(460.8)		0
Repayment of equipment financings						Repayment of equipment financings	(6.4)		0
Repayment of mortgage						Repayment of mortgage	(1.0)		0
Proceeds from issuance of common stock, net of issuance costs	Proceeds from issuance of common stock, net of issuance costs	477.5		—		Proceeds from issuance of common stock, net of issuance costs	0		477.5
Proceeds from exercise of stock options and issuance of common stock under employee stock purchase plan	Proceeds from exercise of stock options and issuance of common stock under employee stock purchase plan	14.2		25.6		Proceeds from exercise of stock options and issuance of common stock under employee stock purchase plan	10.0		14.2
Payment of withholding taxes in connection with vesting of restricted stock units	Payment of withholding taxes in connection with vesting of restricted stock units	(26.8)		(7.9)		Payment of withholding taxes in connection with vesting of restricted stock units	(27.3)		(26.8)
Net cash provided by financing activities		464.9		17.7
Net cash (used in) provided by financing activities						Net cash (used in) provided by financing activities	0		464.9
Effect of exchange rate changes on cash	Effect of exchange rate changes on cash	(2.9)		(0.3)		Effect of exchange rate changes on cash	(1.7)		(2.9)
Net increase in cash, cash equivalents and restricted cash		565.4		6.0
Cash, cash equivalents and restricted cash at beginning of period		213.7		113.9
Cash, cash equivalents and restricted cash at end of period		$	779.1	$	119.9
Net (decrease) increase in cash, cash equivalents and restricted cash						Net (decrease) increase in cash, cash equivalents and restricted cash	(52.6)		565.4
Cash, cash equivalents and restricted cash at beginning of period (Note 3)						Cash, cash equivalents and restricted cash at beginning of period (Note 3)	922.0		213.7
Cash, cash equivalents and restricted cash at end of period (Note 3)						Cash, cash equivalents and restricted cash at end of period (Note 3)	$	869.4	$	779.1

Supplemental cash flow information:
Supplemental noncash information:						Supplemental noncash information:
Purchases of property and equipment included in accounts payable and accrued expenses	Purchases of property and equipment included in accounts payable and accrued expenses	$	4.5	$	3.0	Purchases of property and equipment included in accounts payable and accrued expenses	$	5.6	$	4.5
Purchases of intangible assets included in accounts payable and accrued expenses						Purchases of intangible assets included in accounts payable and accrued expenses	$	3.5	$	0

The accompanying notes are an integral part of these condensed consolidated financial statements.

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INSULET CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

Note 1. Basis of Presentation and Summary of Significant Accounting Policies

Basis of Presentation

The accompanying financial statements reflect the consolidated operations of Insulet Corporation and its subsidiaries (“Insulet” or the “Company”). The unaudited consolidated financial statements have been prepared in United States dollars, in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The preparation of the consolidated financial statements in conformity with GAAP requires management to make use of estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities, and the reported amounts of revenues and expenses. Actual results may differ from those estimates. In management’s opinion, the unaudited consolidated financial statements contain all normal recurring adjustments necessary for a fair statement of the interim results reported. Operating results for the three and six months ended June 30, ~~2020~~2021 are not necessarily indicative of the results that may be expected for the full year ending December 31, ~~2020,~~2021, or for any other subsequent interim period.

The year-end balance sheet data was derived from audited consolidated financial statements. These unaudited consolidated financial statements do not include all of the annual disclosures required by GAAP; accordingly, they should be read in conjunction with the Company’s audited consolidated financial statements contained in the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2019.~~2020.

~~Accounts Receivable~~Cloud Computing Arrangements

As of June 30, 2021 and ~~Allowance~~December 31, 2020, the Company had net capitalized implementation costs of $44.5 million and $24.2 million, respectively. Amortization expense recorded for ~~Credit Losses~~

~~Trade accounts receivable consist of amounts due from third-party payors, customers~~the three months ended June 30, 2021 and ~~intermediaries~~2020 was $0.8 million and ~~are presented at amortized cost. The allowance~~$0.2 million, respectively, and $1.3 million and $0.5 million for ~~credit losses reflects an estimate of losses inherent in~~ the ~~Company’s accounts receivable portfolio determined based on historical experience, specific allowances for known troubled accounts~~six months ended June 30, 2021 and ~~other available evidence. Accounts receivable are written off when management determines they are uncollectable.~~

The allowance for credit losses is measured on a collective (pool) basis when similar risk characteristics exist. The Company has identified the following portfolio segments and measures the allowance for credit losses using the following methods:

~~Direct Customer Receivables~~—The Company measures expected credit losses on direct customer receivables using an aging methodology. The risk of loss for direct customer receivables is higher than other portfolios. The Company relies on third-party payors to accept and timely process claims and on direct consumers to have the ability to pay. The estimate of expected credit losses considers historical credit loss information that is adjusted for current conditions and supportable forecasts.

~~Distributor Receivables~~—The Company measures expected credit losses on distributor receivables using an individual reserve methodology. The risk of loss in this portfolio is low based on the Company’s historical experience. The estimate of expected credit losses considers payment history as well as credit ratings of the distributors, in addition to current conditions and supportable forecasts.

~~National Healthcare System Receivables~~—The Company measures expected credit losses on national healthcare system receivables using an individual reserve methodology. The risk of loss in this portfolio is low based on the Company’s historical experience. The estimate of expected credit losses considers historical credit loss information that is adjusted for current conditions and supportable forecasts.2020, respectively.

Shipping and Handling Costs

Shipping and handling costs are included in selling, general and administrative expenses and were ~~$1.9~~$2.6 million and ~~$2.3~~$1.9 million for the three months ended June 30, ~~2020~~2021 and ~~2019,~~2020, respectively, and were ~~$3.8~~$4.7 million and ~~$4.9~~$3.8 million for the six months ended June 30, 2021 and 2020, ~~and 2019,~~ respectively.

Derivative Instruments

The Company is exposed to certain risks relating to its business operations. Risks that relate to interest rate exposure are managed by using interest rate swaps. The Company recognizes derivative instruments as either assets or liabilities at fair value on the consolidated balance sheet. Changes in a derivative financial instrument’s fair value are recognized in earnings unless specific hedge criteria are met, in which case changes in fair value are recognized as adjustments to other comprehensive income. The Company has designated its interest rate swap contracts as cash flow hedges.

Fair Value Measurements

Fair value is defined as the price that would be received from the sale of an asset or paid to transfer a liability in the principal or most advantageous market in an orderly transaction between market participants on the measurement date. To measure fair value of assets and liabilities, the Company uses the following fair value hierarchy based on three levels of inputs:

Level 1—observable inputs, such as quoted prices in active markets for identical assets or liabilities;

Level 2—significant other observable inputs that are observable either directly or indirectly; and

Level 3—significant unobservable inputs for which there are little or no market data, which require the Company to develop its own assumptions.

~~Table of Contents~~

Certain of the Company’s financial instruments, including cash and cash equivalents, accounts receivable, accounts payable, accrued expenses and other liabilities are carried at cost, which approximates their fair value because of their short-term maturity. See Notes 3 and 8 for financial assets and liabilities held at carrying amount on the consolidated balance sheet and Note 4 for investments measured at fair value on a recurring basis.

~~Reclassification~~

Table of ~~Prior Period Amounts~~Contents

~~Certain reclassifications have been made to prior period amounts to conform to the current period financial statement presentation. A portion of facility~~Advertising Costs

The Company expenses advertising costs ~~and certain information technology costs have been allocated from selling, general and administrative to research and development~~as they are incurred. Advertising expenses ~~based on square foot and system usage, respectively. In addition, certain quality assurance costs~~ were ~~reclassified from research and development expenses to selling, general and administrative expenses. The net impact of these adjustments was a $0.7~~$12.0 million and ~~$1.3~~$2.9 million ~~increase to research and development expenses and a corresponding decrease to selling, general and administrative expenses~~ for the three months ended June 30, 2021 and 2020, respectively, and were $21.4 million and $5.6 million for the six months ended June 30, 2021 and 2020, ~~respectively~~. ~~There was no change to previously reported operating or net income.~~ ~~Further, the Company reclassified the $1.6 million chang~~e in unbilled receivables from the change in accounts and unbilled receivables to the change in prepaid expenses and other assets in the prior year statement of cash flows. This reclassification had no effect on previously reported net cash provided by operating activities.respectively.

Recently Adopted Accounting Standards

Effective January 1, ~~2020,~~2021, the Company adopted Accounting Standards Update ~~(“ASU”~~("ASU") ~~2016-13,~~2019-12, ~~Credit Losses~~Income Taxes (Topic ~~326)~~740): Simplifying the Accounting for Income Taxes ~~(“ASU 2016-13”)~~. ASU 2016-13 requires financial assets measured at amortized cost, such as the Company’s trade receivables and contract assets, to be presented net of expected credit losses, which may be estimated based on relevant information such as historical experience, current conditions and future expectation for each pool of similar financial assets. The new guidance also requires enhanced disclosures related to trade receivables and associated credit losses. The Company adopted ASU 2016-13 using the modified retrospective method, whereby the guidance is applied prospectively as of the date of adoption and prior periods are not restated. The cumulative effect of adopting ~~ASU 2016-13~~ ~~resulted in a $1.1 million increase to the opening balance of accumulated deficit upon adoption related to an increase~~2019-12 eliminates certain exceptions in the ~~allowance~~current guidance regarding the approach for ~~credit losses on accounts receivable.~~

~~The following table presents~~intraperiod tax allocations, the ~~activity~~methodology for calculating income taxes in an interim period and the ~~allowance~~recognition of deferred tax liabilities for ~~credit losses for the~~ ~~three and six months ended June 30, 2020, comprised primarily of our direct consumer receivable portfolio. The allowance for credit losses of other portfolios is insignificant.~~

(in millions) Three Months Ended June 30, 2020 Six Months Ended June 30, 2020
Credit losses at the beginning of the period $ 4.1 $ 3.8
Effect of adoption — 1.1
Credit losses at the beginning of the period after adoption 4.1 4.9
Provision for expected credit losses 2.0 2.6
Write-offs charged against allowance (1.6) (3.1)
Recoveries of amounts previously written-off 0.1 0.2
Credit losses at the end of the period $ 4.6 $ 4.6

~~Effective January 1, 2020, the Company adopted ASU 2017-04,~~ ~~Simplifying the Test for Goodwill Impairment~~ (“ASU 2017-04”). ASU 2017-04 requires an entity to measure the impairment of goodwill assigned to a reporting unit as the amount by which the carrying value of the assets and liabilities of the reporting unit, including goodwill, exceeds the reporting units’ fair value.outside basis differences. The adoption of this guidance ~~had no~~did not have a significant impact on ~~the~~our consolidated financial statements.

Note 2. Revenue and Contract Acquisition Costs

The following table summarizes the Company’s disaggregated ~~revenues:~~revenue:


		Three Months Ended June 30,						Six Months Ended June 30,							Three Months Ended June 30,				Six Months Ended June 30,
(in millions)	(in millions)	2020		2019		2020		2019		(in millions)	2021		2020		2021		2020
U.S. Omnipod	U.S. Omnipod	$	128.8	$	98.1	$	245.4	$	184.2	U.S. Omnipod	$	150.5	$	128.8	$	293.8	$	245.4
International Omnipod	International Omnipod	73.2		62.7		146.3		119.6		International Omnipod	91.6		73.2		181.5		146.3
Total Omnipod	Total Omnipod	202.0		160.8		391.7		303.8		Total Omnipod	242.1		202.0		475.3		391.7
Drug Delivery	Drug Delivery	24.3		16.3		32.6		32.9		Drug Delivery	21.1		24.3		40.2		32.6
Total		$	226.3	$	177.1	$	424.3	$	336.7
Total revenue										Total revenue	$	263.2	$	226.3	$	515.5	$	424.3

~~During both the three and six months ended June 30, 2020, the Company had two customers that represented 21% of total revenue.~~ During the three and six months ended June 30, ~~2019,~~2021, the Company had ~~one customer~~two customers that in aggregate represented ~~12%~~26% and 25% of total revenue, respectively. During both the three and six months ended June 30, 2020, the Company had two customers that in aggregate represented 21% of total ~~revenue, respectively.~~revenue.

~~Table~~At June 30, 2021, the Company had two customers that in aggregate accounted for 26% of ~~Contents~~

consolidated net accounts receivable, compared with one customer that accounted for 15% of consolidated net accounts receivable at December 31, 2020.

Deferred revenue related to unsatisfied performance obligations was included in the following consolidated balance sheet accounts in the amounts shown:


(in millions)	(in millions)	June 30, 2020		December 31, 2019		(in millions)	June 30, 2021		December 31, 2020
Accrued expenses and other current liabilities	Accrued expenses and other current liabilities	$	5.0	$	3.2	Accrued expenses and other current liabilities	$	3.2	$	5.4
Other liabilities	Other liabilities	0.9		1.0		Other liabilities	1.4		1.0
Total deferred revenue	Total deferred revenue	$	5.9	$	4.2	Total deferred revenue	$	4.6	$	6.4

~~Revenue recognized during~~During the three ~~and six~~ months ended June 30, 2021 and 2020, the Company recognized $0.2 million and $0.1 million of revenue, respectively, that was included in deferred revenue at the beginning of ~~2020 was $0.1 million and $1.6 million, respectively. Revenue recognized during~~each period. During the ~~three and~~ six months ended June 30, ~~2019~~2021 and 2020, the Company recognized $3.9 million and $1.6 million of revenue, respectively, that was included in deferred revenue at the beginning of ~~2019 was $0.2 million and $1.1 million, respectively.~~each period.

Contract acquisition costs, representing capitalized commission costs related to new customers, net of amortization, were included in the following consolidated balance sheet captions in the amounts shown:

(in millions) June 30, 2020 December 31, 2019
Prepaid expenses and other current assets $ 9.9 $ 9.5
Other assets 19.7 19.9
Total capitalized contract acquisition costs, net $ 29.6 $ 29.4

~~The Company had unbilled receivables of $22.3 million and $13.5 million at June 30, 2020 and December 31, 2019, respectively.~~


(in millions)	June 30, 2021		December 31, 2020
Prepaid expenses and other current assets	$	12.3	$	11.0
Other assets	24.4		21.9
Total capitalized contract acquisition costs, net	$	36.7	$	32.9

The Company recognized $3.0 million and $2.6 million of amortization of capitalized contract acquisition costs during the three months ended June 30, 2021 and 2020, respectively. The Company recognized $6.0 million and $5.1 million of amortization of capitalized contract acquisition costs during the ~~three and~~ six months ended June 30, 2021 and 2020, respectively.

The Company ~~recognized $2.1~~had unbilled receivables of $18.0 million and ~~$4.1~~$11.6 million ~~of amortization of capitalized contract acquisition costs during the three and six months ended~~at June 30, ~~2019,~~2021 and December 31, 2020, respectively.

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Note 3. Cash and Cash Equivalents

The following table provides a summary of cash and cash equivalents:


(in millions)	June 30, 2021		December 31, 2020
Cash	$	238.9	$	164.6
Money market mutual funds	612.9		739.8
Restricted cash	2.8		2.8
Total cash and cash equivalents	854.6		907.2
Restricted cash included in other assets	14.8		14.8
Total cash, cash equivalents, and restricted cash shown in the consolidated statements of cash flows	$	869.4	$	922.0

The restricted cash included in other assets on the consolidated balance sheet is held as a compensating balance against long-term borrowings.

All cash and cash equivalents ~~and the level~~are Level 1 in the fair value ~~hierarchy in which those measurements fall:~~hierarchy.

June 30, 2020 December 31, 2019
(in millions) Total Level 1 Level 2 Total Level 1
Level 2 ⁽¹⁾
Cash $ 470.3 $ 470.3 $ — $ 85.3 $ 85.3 $ —
Money market mutual funds 305.9 305.9 — 115.5 115.5 —
Commercial paper — — — 10.0 — 10.0
Restricted cash 2.9 2.9 — 2.9 2.9 —
Total cash and cash equivalents $ 779.1 $ 779.1 $ — $ 213.7 $ 203.7 $ 10.0

⁽¹⁾~~Fair value was determined using market prices obtained from third-party pricing sources.~~

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Note 4. Investments

The Company’s ~~short-term and long-term~~ investments in debt securities had maturity dates that range from one month to ~~two years~~six months at June 30, ~~2020~~2021. Realized gains or losses for both the three and six months ended June 30, ~~2020~~2021 and ~~2019~~2020 were insignificant.

The following table provides amortized costs, gross unrealized gains and losses, fair values and the level in the fair value hierarchy for the Company’s ~~investments at June 30, 2020 and December 31, 2019:~~investments:


(in millions)	(in millions)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value		Level 1		Level 2 ⁽¹⁾		(in millions)	Amortized Cost		Gross Unrealized Gains		Fair Value		Level 1		Level 2 (1)
June 30, 2020
June 30, 2021														June 30, 2021
U.S. government and agency bonds	U.S. government and agency bonds	$	60.1	$	0.5	$	—	$	60.6	$	60.6	$	—	U.S. government and agency bonds	$	15.0	$	0	$	15.0	$	15.0	$	0
Corporate bonds	Corporate bonds	0.8		—		—		0.8		—		0.8		Corporate bonds	2.0		0		2.0		0		2.0
Certificates of deposit	Certificates of deposit	3.9		—		—		3.9		—		3.9		Certificates of deposit	0.5		0		0.5		0		0.5
Commercial Paper		—		—		—		—		—		—
Total short-term investments	Total short-term investments	$	64.8	$	0.5	$	—	$	65.3	$	60.6	$	4.7	Total short-term investments	$	17.5	$	0	$	17.5	$	15.0	$	2.5

December 31, 2020														December 31, 2020
U.S. government and agency bonds	U.S. government and agency bonds	$	20.7	$	0.3	$	—	$	21.0	$	15.4	$	5.6	U.S. government and agency bonds	$	35.1	$	0.2	$	35.3	$	35.3	$	0
Corporate bonds	Corporate bonds	2.0		—		—		2.0		—		2.0		Corporate bonds	2.8		0.1		2.9		0		2.9
Certificates of deposit	Certificates of deposit	0.5		—		—		0.5		—		0.5		Certificates of deposit	2.2		0		2.2		0		2.2
Total long-term investments		$	23.2	$	0.3	$	—	$	23.5	$	15.4	$	8.1

December 31, 2019
U.S. government and agency bonds		$	94.7	$	0.3	$	—	$	95.0	$	85.0	$	10.0
Corporate bonds		51.0		0.1		—		51.1		—		51.1
Certificates of deposit		6.3		—		—		6.3		—		6.3
Commercial Paper		10.0		—		—		10.0		—		10.0
Total short-term investments	Total short-term investments	$	162.0	$	0.4	$	—	$	162.4	$	85.0	$	77.4	Total short-term investments	$	40.1	$	0.3	$	40.4	$	35.3	$	5.1

U.S. government and agency bonds		$	52.9	$	0.1	$	(0.1)	$	52.9	$	42.9	$	10.0
Corporate bonds		2.8		—		—		2.8		—		2.8
Certificates of deposit		2.7		—		—		2.7		—		2.7
Total long-term investments		$	58.4	$	0.1	$	(0.1)	$	58.4	$	42.9	$	15.5

⁽¹⁾Fair value was determined using market prices obtained from third-party pricing sources.

Note 5. Inventories

At the end of each period, inventories were comprised of the following:


(in millions)	(in millions)	June 30, 2020		December 31, 2019		(in millions)	June 30, 2021		December 31, 2020
Raw materials	Raw materials	$	33.7	$	23.3	Raw materials	$	45.7	$	30.7
Work-in-process	Work-in-process	37.2		40.3		Work-in-process	40.1		59.6
Finished goods	Finished goods	32.8		37.4		Finished goods	112.0		64.0
Total inventories	Total inventories	$	103.7	$	101.0	Total inventories	$	197.8	$	154.3

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Note 6. Goodwill and Other Intangible Assets, Net

The change in the carrying amount of goodwill for the six months ended June 30, ~~2020~~2021 was as follows:


	(in millions)
Goodwill at December 31, ~~2019~~2020	$	39.8
Foreign currency translation	~~(0.2)~~0.1
Goodwill at June 30, ~~2020~~2021	$	~~39.6~~39.9

~~Table of Contents~~

The gross carrying amount, accumulated amortization and net book value of intangible assets at the end of each period were as follows:

June 30, 2020 December 31, 2019
(in millions) Gross Carrying Amount Accumulated Amortization Net Book
Value Gross Carrying Amount Accumulated Amortization Net Book
Value
Customer relationships ⁽¹⁾
$ 9.9 $ (3.3) $ 6.6 $ 9.9 $ (2.8) $ 7.1
Internal-use software 11.2 (7.8) 3.4 12.0 (6.8) 5.2
Intellectual property 1.0 (0.1) 0.9 1.0 (0.1) 0.9
Total $ 22.1 $ (11.2) $ 10.9 $ 22.9 $ (9.7) $ 13.2

⁽¹⁾ ~~Includes customer relationships acquired from the Company’s former European distributor. See Note 9.~~


	June 30, 2021						December 31, 2020
(in millions)	Gross Carrying Amount		Accumulated Amortization		Net Book Value		Gross Carrying Amount		Accumulated Amortization		Net Book Value
Customer relationships	$	43.4	$	(20.9)	$	22.5	$	43.3	$	(18.3)	$	25.0
Internal-use software	19.0		(9.5)		9.5		11.4		(8.6)		2.8
Intellectual property	1.6		(0.2)		1.4		1.1		(0.2)		0.9
Total intangible assets	$	64.0	$	(30.6)	$	33.4	$	55.8	$	(27.1)	$	28.7

Amortization expense for intangible assets was ~~$0.7~~$1.8 million and ~~$0.6~~$0.7 million for the three months ended June 30, ~~2020~~2021 and ~~2019,~~2020, respectively. Amortization expense for intangible assets was ~~$1.5~~$3.5 million and ~~$1.2~~$1.5 million for the six months ended June 30, 2021 and 2020, ~~and 2019,~~ respectively. ~~Amortization expense associated with intangible assets included on the Company’s balance sheet as of June 30, 2020 is expected to be as follows:~~

Years Ending December 31, (in millions)
2020 (remaining) $ 1.3
2021 2.2
2022 1.6
2023 1.2
2024 1.1
Thereafter 3.5
Total $ 10.9

Note 7. Accrued Expenses and Other Current Liabilities

The components of accrued expenses and other current liabilities were as follows:


(in millions)	(in millions)	June 30, 2020		December 31, 2019		(in millions)	June 30, 2021		December 31, 2020
Employee compensation and related costs	Employee compensation and related costs	$	32.6	$	45.9	Employee compensation and related costs	$	49.3	$	53.1
Professional and consulting services						Professional and consulting services	22.9		19.1
Accrued rebates	Accrued rebates	10.3		7.5		Accrued rebates	20.6		13.1
Supplier purchases	Supplier purchases	4.7		2.4		Supplier purchases	4.5		7.1
Value added taxes payable	Value added taxes payable	3.9		1.8		Value added taxes payable	2.9		5.0
Deferred revenue		5.0		3.2
Income taxes payable						Income taxes payable	2.1		5.0
Accrued interest						Accrued interest	1.2		1.8
Other	Other	42.3		42.4		Other	39.6		33.9
Accrued expenses and other current liabilities	Accrued expenses and other current liabilities	$	98.8	$	103.2	Accrued expenses and other current liabilities	$	143.1	$	138.1

Product Warranty Costs

The Company provides a four-year warranty on Personal Diabetes Managers (“PDMs”) sold in the United States and Europe and a five-year warranty on PDMs sold in Canada and may replace Pods that do not function in accordance with product specifications. The Company estimates its warranty obligation at the time the product is shipped based on historical experience and the estimated cost to service the claims. Since the Company continues to introduce new products and versions, the anticipated performance of the product over the warranty period is also considered in estimating warranty reserves. Warranty expense is recorded in cost of revenue in the consolidated statements of operations. Cost to service the claims reflects the current product cost.

~~The following table is a summary~~ Reconciliations of the ~~activity related to~~changes in the Company’s product warranty ~~liability:~~liability were as follows:


		Three Months Ended June 30,						Six Months Ended June 30,							Three Months Ended June 30,				Six Months Ended June 30,
(in millions)	(in millions)	2020		2019		2020		2019		(in millions)	2021		2020		2021		2020
Product warranty liability at beginning of period	Product warranty liability at beginning of period	$	8.3	$	6.3	$	8.5	$	6.4	Product warranty liability at beginning of period	$	6.7	$	8.3	$	6.7	$	8.5
Warranty expense	Warranty expense	2.7		3.1		5.2		5.3		Warranty expense	2.3		2.7		4.9		5.2
Warranty claims settled	Warranty claims settled	(2.9)		(2.8)		(5.6)		(5.1)		Warranty claims settled	(2.5)		(2.9)		(5.1)		(5.6)
Product warranty liability at the end of period	Product warranty liability at the end of period	$	8.1	$	6.6	$	8.1	$	6.6	Product warranty liability at the end of period	$	6.5	$	8.1	$	6.5	$	8.1

1312

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Note 8. ~~Convertible~~ Debt ~~Net~~

The components of ~~outstanding convertible~~ debt consisted of the following:


(in millions)	(in millions)	June 30, 2020		December 31, 2019		(in millions)	June 30, 2021		December 31, 2020
1.375% Convertible Senior Notes, due November 2024		$	402.5	$	402.5
0.375% Convertible Senior Notes, due September 2026		800.0		800.0
1.375% Convertible Senior Notes due November 2024						1.375% Convertible Senior Notes due November 2024	$	32.1	$	402.5
0.375% Convertible Senior Notes due September 2026						0.375% Convertible Senior Notes due September 2026	800.0		800.0
Term loan due May 2028						Term loan due May 2028	500.0		0
Equipment financing due May 2024						Equipment financing due May 2024	19.2		22.2
Equipment financing due November 2025						Equipment financing due November 2025	33.0		36.4
5.15% Mortgage due November 2025						5.15% Mortgage due November 2025	68.7		69.7
Unamortized debt discount	Unamortized debt discount	(274.0)		(294.8)		Unamortized debt discount	(179.9)		(252.5)
Debt issuance costs	Debt issuance costs	(18.3)		(19.8)		Debt issuance costs	(17.0)		(19.0)
Total convertible debt, net		$	910.2	$	887.9
Total debt						Total debt	1,256.1		1,059.3
Less: current portion						Less: current portion	20.9		15.6
Total long-term debt						Total long-term debt	$	1,235.2	$	1,043.7

1.375% Convertible Senior Notes

During the three months ended June 30, 2021, the Company repurchased $370.4 million in principal ($305.7 million net of discount and issuance costs) of its 1.375% Convertible Senior Notes due November 2024 (“1.375% Notes”) for $460.8 million in cash and the issuance of 2.2 million shares with a fair value of $622.7 million. The debt repurchase resulted in a $40.1 million loss on extinguishment, including cash paid to the note holders as an inducement to convert and transaction costs.

Senior Secured Credit Agreement

In May 2021, the Company entered into a senior secured credit agreement (the “Credit Agreement”), which includes a $500 million seven year senior secured term loan B (the “Term Loan”) for net proceeds of $489.5 million, which was used to fund the cash portion of the repurchase of the 1.375% Notes discussed above. The Term Loan bears interest at a rate of LIBOR plus 3.25%, with a 0.50% LIBOR floor, and contains leverage and fixed charge coverage ratio covenants, both of which are measured upon the occurrence of future debt. In addition, the Term Loan contains other customary covenants, none of which are considered restrictive to the Company’s operations.

Under the same agreement, the Company obtained a $60 million three year senior secured revolving credit facility (the “Revolving Credit Facility”), which bears interest at a rate of LIBOR plus an applicable margin of 2.75% to 3.25% based on the Company’s net leverage ratio. The Revolving Credit Facility contains a covenant to maintain a certain leverage ratio when there are amounts outstanding, in addition to other customary covenants, none of which are considered restrictive to the Company’s operations. NaN amount was outstanding under the Revolving Credit Facility at June 30, 2021.

Borrowings under the Credit Agreement are guaranteed by the Company’s wholly owned domestic subsidiaries, and are secured by substantially all assets of the Company and of each subsidiary guarantor, subject to certain exceptions. Additionally, borrowings under the Credit Agreement are senior to all of the Company’s unsecured indebtedness, including the convertible notes.

Fair Value of Debt

The carrying amount and the estimated fair value of the Company’s ~~convertible~~ debt ~~which is based on the Level 2 quoted market prices,~~ were as follows:


		June 30, 2020						December 31, 2019							June 30, 2021				December 31, 2020
(in millions)	(in millions)	Carrying Value		Estimated Fair Value ⁽¹⁾		Carrying Value		Estimated Fair Value ⁽¹⁾		(in millions)	Carrying Value		Estimated Fair Value		Carrying Value		Estimated Fair Value (1)
1.375% Convertible Senior Notes, due November 2024		$	315.2	$	512.8	$	306.9	$	512.8
0.375% Convertible Senior Notes, due September 2026		595.0		867.0		581.0		840.0
1.375% Convertible Senior Notes due November 2024 (1)										1.375% Convertible Senior Notes due November 2024 (1)	$	26.6	$	95.8	$	323.9	$	1,104.2
0.375% Convertible Senior Notes due September 2026 (1)										0.375% Convertible Senior Notes due September 2026 (1)	623.8		980.9		609.2		902.0
Term loan due May 2028 (2)										Term loan due May 2028 (2)	486.7		$	500.6	$	0	$	0
Total	Total	$	910.2	$	1,379.8	$	887.9	$	1,352.8	Total	$	1,137.1	$	1,577.3	$	933.1	$	2,006.2

⁽¹⁾Convertible debt is classified as Level 2 in the fair value hierarchy. Fair value was determined using ~~market prices obtained from third-party pricing sources.~~the Company’s quoted stock price and the contractual conversion rate.

(2) Term debt is classified as Level 1 in the fair value hierarchy. Fair value was determined using quoted market prices.

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The fair values of the mortgage and equipment financings approximate their carrying values.

Note 9. Derivative Instruments

The Company manages interest rate exposure through the use of interest rate swap transactions with financial institutions acting as principal counterparties. In May 2021, the Company entered into 2 interest rate swap agreements that expire on April 30, 2025. Under the interest rate swap agreements, the Company receives variable rate interest payments and pays fixed interest rates on a total notional value of $480 million of its Term Loan. As a result of the interest rate swaps 96% of the Term Loan exposed to interest rate risk from changes in LIBOR is fixed at a rate of 4.20%. The Company has designated the interest rate swaps as cash flow hedges.

The fair value of interest rate swaps, which are classified as Level 2 in the fair value hierarchy, represent the estimated amounts the Company would receive or pay to terminate the contracts and is determined using industry standard valuation models and market-based observable inputs, including credit risk and interest rate yield curves. At June 30, 2021, the fair value of the interest rate swaps was a liability of $0.7 million.

Note 9.10. Commitments and Contingencies

Legal Proceedings

Between May 5, 2015 and June 16, 2015, 3 class action lawsuits were filed by shareholders in the U.S. District Court, for the District of Massachusetts, against the Company and certain then current and former executives of the Company. NaN suits subsequently were voluntarily dismissed. Arkansas Teacher Retirement System v. Insulet, et al., 1:15-cv-12345, ~~(“ATRS”)~~ alleged that the Company (and certain then current and former executives) committed violations of Sections 10(b) and 20(a) and Rule 10b-5 of the Securities Exchange Act of 1934 by making allegedly false and misleading statements about the Company’s business, operations and prospects. On February 8, 2018, the parties executed a binding stipulation of settlement, under which all claims were released, and a payment was made into an escrow account for the plaintiffs and the class they purport to represent. On August 6, 2018, the Court issued an order approving the ~~settlement, but took~~settlement. On June 25, 2021, the Court issued an order on the plaintiffs’ motion for fees and expenses, ~~under advisement, which motion remains pending.~~a final judgement approving the settlement, and an order of dismissal with prejudice. The Company had previously accrued fees and expenses in connection with this matter for the amount of the final settlement liability that was not covered by insurance, the amount of which was not material to the Company’s consolidated financial statements.

In addition, on April 26, 2017, a derivative action (Walker v. DeSisto, et al., 1:17-cv-10738) ~~(“Walker”)~~ was filed, and on October 13, 2017, a second derivative action (Carnazza v. DeSisto, et al., 1:17-cv-11977) ~~(“Carnazza”)~~ was filed, both on behalf of the Company, each by a shareholder in the U.S. District Court for the District of Massachusetts against the Company (as a nominal defendant) and certain individual then current and former officers and directors of the Company. The allegations in the actions are substantially similar to those alleged in the securities class action. The actions seek, among other things, damages, disgorgement of certain types of compensation or profits, and attorneys’ fees and costs. On July 11, 2018, the parties executed a binding stipulation of settlement, under which all claims were released, and a payment of attorneys’ fees and reimbursement of expenses will be paid to plaintiffs’ counsel, subject to the Court’s approval. On July 13, 2018, the plaintiffs filed a motion for preliminary approval of the settlement. On June 28, 2021, the Court issued an order preliminarily approving the proposed settlement ~~which is pending.~~and scheduling a hearing to decide whether the proposed settlement should be finally approved for September 9, 2021. The Company expects that such fees and expenses payable to plaintiff’s counsel will be covered by the Company’s insurance.

In June 2020, Roche Diabetes Care, Inc. (“Roche”) filed a patent infringement lawsuit against the Company in the United States District Court for the District of Delaware alleging that the Company’s manufacture and sale of its Omnipod Insulin Management System, ~~Omnipod Starter Kit~~including OmniPods, Personal Diabetes Managers, and ~~Omnipod 10 Pod Pack~~other components of the system, and kits in the United States infringed Roche’s now-expired U.S. Patent 7,931,613. Roche is seeking monetary damages and attorneys’ fees and costs. Since the patent expired in 2019, Roche is not seeking injunctive relief and the lawsuit will have no impact on ongoing sales of the Company’s products. The Company believes that it has meritorious defenses to Roche’s claims and intends to vigorously defend against them. The court has set a trial date of July 25, 2022. At this time, based on available information regarding this litigation, the Company is unable to reasonably assess the ultimate outcome of this case or determine an estimate, or range of estimates, of potential ~~losses. The court has not yet set a schedule for the case.~~losses, which could be material.

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In July 2020, the Company filed a patent infringement claim against Roche Diabetes Care Limited (“Roche Ltd.”) in the United Kingdom alleging that Roche Ltd.’s manufacture and sale of the ~~Accu-Chek®~~Accu-Chek® Solo insulin pump and its consumable components infringes European Patent No. 1 335 764 in the United Kingdom. The Company iswas seeking an injunction to last until expiry of the patent and monetary damages. A trial was held in May 2021 and the judge ultimately sided with Roche Ltd. on non-infringement and invalidity of the patent, which was slated to expire in August 2021. Accordingly, no injunction was issued and no monetary damages were awarded.

The Company is, from time to time, involved in the normal course of business in various legal proceedings, including intellectual property, contract, employment and product liability suits. Other than as described above, the Company does not expect the outcome of these proceedings, either individually or in the aggregate, to have a material adverse effect on its results of operations.

~~Fees to Former European Distributor~~

~~Following the expiration~~Table of an agreement with a former European distributor on June 30, 2018, the Company was required to pay a quarterly per-unit fee for Omnipod sales to certain customers of the former European distributor for a one-year period through June 30, 2019. The Company recognized a liability and an associated intangible asset for this fee as qualifying sales occurred. The methodology applicable for determining the total fee under the distribution agreement is subject to an active arbitration proceeding in Switzerland. The final amount of the fee could vary significantly depending on the number of customers who count for purposes of calculating the fee under the terms of the agreement. The Company estimates that the final aggregate fee is in the range of $5 million to $55 million. As of both June 30, 2020 and December 31, 2019, the Company had $2.7 million accrued related to this matter. The associated gross intangible asset was $7.8 million at both June 30, 2020 and December 31, 2019.Contents

Note ~~10.~~11. Accumulated Other Comprehensive ~~Loss~~Income (Loss)

Changes in the components of accumulated other comprehensive ~~loss,~~income (loss), net of tax, were as follows:


		Three Months Ended June 30, 2020										Six Months Ended June 30, 2020											Three Months Ended June 30, 2021								Six Months Ended June 30, 2021
(in millions)	(in millions)	Foreign Currency Translation Adjustment		Unrealized Gain on Available-for-sale Securities		Accumulated Other Comprehensive Loss		Foreign Currency Translation Adjustment		Unrealized Gain on Available-for-sale Securities		Accumulated Other Comprehensive Loss		(in millions)	Foreign Currency Translation Adjustment		Unrealized Gain on Available-for-sale Securities		Unrealized Loss on Cash Flow Hedges		Accumulated Other Comprehensive Income		Foreign Currency Translation Adjustment		Unrealized Gain on Available-for-sale Securities		Unrealized Loss on Cash Flow Hedges		Accumulated Other Comprehensive Income
Balance at beginning of period	Balance at beginning of period	$	(5.0)	$	1.2	$	(3.8)	$	(1.6)	$	0.4	$	(1.2)	Balance at beginning of period	$	3.1	$	0.1	$	0	$	3.2	$	5.2	$	0.3	$	0	$	5.5
Other comprehensive income (loss)		0.6		(0.4)		0.2		(2.8)		0.4		(2.4)
Other comprehensive loss before reclassifications														Other comprehensive loss before reclassifications	(1.8)		(0.1)		(1.0)		(2.9)		(3.9)		(0.3)		(1.0)		(5.2)
Amounts reclassified to net loss														Amounts reclassified to net loss	$	0	$	0	$	0.4	$	0.4	$	0	$	0	$	0.4	$	0.4
Balance at the end of period	Balance at the end of period	$	(4.4)	$	0.8	$	(3.6)	$	(4.4)	$	0.8	$	(3.6)	Balance at the end of period	$	1.3	$	0	$	(0.6)	$	0.7	$	1.3	$	0	$	(0.6)	$	0.7


		Three Months Ended June 30, 2019										Six Months Ended June 30, 2019											Three Months Ended June 30, 2020				Six Months Ended June 30, 2020
(in millions)	(in millions)	Foreign Currency Translation Adjustment		Unrealized Gain on Available-for-sale Securities		Accumulated Other Comprehensive Loss		Foreign Currency Translation Adjustment		Unrealized Gain on Available-for-sale Securities		Accumulated Other Comprehensive Loss		(in millions)	Foreign Currency Translation Adjustment		Unrealized Gain on Available-for-sale Securities		Accumulated Other Comprehensive Loss		Foreign Currency Translation Adjustment		Unrealized Gain on Available-for-sale Securities		Accumulated Other Comprehensive Loss
Balance at beginning of period	Balance at beginning of period	$	(3.0)	$	(0.1)	$	(3.1)	$	(2.2)	$	(0.7)	$	(2.9)	Balance at beginning of period	$	(5.0)	$	1.2	$	(3.8)	$	(1.6)	$	0.4	$	(1.2)
Other comprehensive income		(0.4)		0.7		0.3		(1.2)		1.3		0.1
Other comprehensive income (loss)														Other comprehensive income (loss)	0.6		(0.4)		0.2		(2.8)		0.4		(2.4)
Balance at the end of period	Balance at the end of period	$	(3.4)	$	0.6	$	(2.8)	$	(3.4)	$	0.6	$	(2.8)	Balance at the end of period	$	(4.4)	$	0.8	$	(3.6)	$	(4.4)	$	0.8	$	(3.6)

Note ~~11.~~12. Interest Expense, Net

Interest expense, net was as follows:


		Three Months Ended June 30,						Six Months Ended June 30,							Three Months Ended June 30,				Six Months Ended June 30,
(in millions)	(in millions)	2020		2019		2020		2019		(in millions)	2021		2020		2021		2020
Contractual coupon interest		$	2.2	$	2.5	$	4.3	$	4.9
Contractual interest, net of interest rate swaps										Contractual interest, net of interest rate swaps	$	6.8	$	2.2	$	10.5	$	4.3
Accretion of debt discount	Accretion of debt discount	10.5		7.1		20.9		14.0		Accretion of debt discount	10.7		10.5		21.7		20.9
Amortization of debt issuance costs	Amortization of debt issuance costs	0.7		0.7		1.4		1.4		Amortization of debt issuance costs	1.0		0.7		1.8		1.4
Capitalized interest	Capitalized interest	(1.6)		(2.6)		(3.2)		(6.0)		Capitalized interest	(1.9)		(1.6)		(3.8)		(3.2)
Interest expense, net of portion capitalized	Interest expense, net of portion capitalized	11.8		7.7		23.4		14.3		Interest expense, net of portion capitalized	16.6		11.8		30.2		23.4
Interest income	Interest income	(0.7)		(1.9)		(2.2)		(3.7)		Interest income	(0.2)		(0.7)		(0.4)		(2.2)
Interest expense, net	Interest expense, net	$	11.1	$	5.8	$	21.2	$	10.6	Interest expense, net	$	16.4	$	11.1	$	29.8	$	21.2

Note 13. Stock-Based Compensation Expense

Compensation expense related to stock-based awards was recorded as follows:


	Three Months Ended June 30,				Six Months Ended June 30,
(in millions)	2021		2020		2021		2020
Cost of revenue	$	0.1	$	0.1	$	0.2	$	0.2
Research and development expenses	2.0		2.3		3.9		5.0
Selling, general and administrative expenses	6.9		3.4		13.5		8.5
Total	$	9.0	$	5.8	$	17.6	$	13.7

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Note ~~12. Stock-Based Compensation~~

~~Compensation expense related to stock-based awards was recorded as follows:~~

Three Months Ended June 30, Six Months Ended June 30,
(in millions) 2020 2019 2020 2019
Cost of revenue $ 0.1 $ 0.3 $ 0.2 $ 0.6
Research and development expenses 2.3 2.4 5.0 4.2
Selling, general and administrative expenses 3.4 5.6 8.5 9.3
Total $ 5.8 $ 8.3 $ 13.7 $ 14.1

~~Note 13.~~14. Income Taxes

The Company’s effective tax rate for the three and six months ended June 30, ~~2020~~2021 was 12.1% and 11.2%, compared with 17.2% and 17.0%~~, compared with 25.6% and 12.3%~~ for the three and six months ended June 30, ~~2019.~~2020, respectively. Income tax benefits have not been recorded for losses in jurisdictions where valuation allowances exist against net deferred tax ~~assets, primarily in the United States. As of June 30, 2020 and December 31, 2019, the~~assets. The Company ~~maintained~~had a full valuation allowance against its ~~U.S.~~ net deferred tax assets ~~based on~~in the ~~determination that it is not more likely than not these future benefits will be realized.~~United Kingdom and the United States at June 30, 2021, and a full valuation allowance against its net deferred tax assets in the United States at December 31, 2020. The Company had no0 uncertain tax positions at both June 30, ~~2020~~2021 and December 31, ~~2019.~~

In April 2020, new interpretations of a German tax law related to intellectual property and withholding tax were released. The Company is evaluating whether these new interpretations, applicable to corporate multinationals, will have an impact on the consolidated financial statements.2020.

Note ~~14.~~15. Net (Loss) Income Per Share

Basic net (loss) income per share is computed by dividing net (loss) income by the weighted average number of common shares outstanding for the period. Diluted net (loss) income per share is computed using the weighted average number of common shares outstanding and, when dilutive, common share equivalents from outstanding stock options and restricted stock units (using the treasury-stock method), and potential common shares from the Company’s convertible notes (using the if-converted method). The weighted-average number of common shares used in the computation of basic and diluted net income per share were as follows:


		Three Months Ended June 30,			Six Months Ended June 30,				Three Months Ended June 30,		Six Months Ended June 30,
(in millions)		2020	2019	2020	2019
(in thousands)						(in thousands)	2021	2020	2021	2020
Weighted average number of common shares outstanding, basic	Weighted average number of common shares outstanding, basic	64,370,791	59,844,991	63,627,231	59,601,365	Weighted average number of common shares outstanding, basic	66,696	64,371	66,406	63,627
Stock options	Stock options	1,086,474	1,479,713	1,129,985	1,513,886	Stock options	0	1,087	0	1,130
Restricted stock units	Restricted stock units	121,248	161,621	212,971	217,200	Restricted stock units	0	121	0	213
Weighted average number of common shares outstanding, diluted	Weighted average number of common shares outstanding, diluted	65,578,513	61,486,325	64,970,187	61,332,451	Weighted average number of common shares outstanding, diluted	66,696	65,579	66,406	64,970

The number of common share equivalents excluded from the computation of diluted net (loss) income per share because either the effect would have been anti-dilutive, or the performance criteria related to the units had not yet been met, were as follows:

Three Months Ended June 30, Six Months Ended June 30,
2020 2019 2020 2019
1.25% Convertible Senior Notes — 5,910,954 — 5,910,954
1.375% Convertible Senior Notes 4,319,429 4,319,429 4,319,429 4,319,429
0.375% Convertible Senior Notes 3,528,400 — 3,528,400 —
Unvested restricted stock units 298,600 426,550 356,577 421,776
Stock options 66,855 181,132 52,069 231,289
Total 8,213,284 10,838,065 8,256,475 10,883,448


	Three Months Ended June 30,		Six Months Ended June 30,
(in thousands)	2021	2020	2021	2020
1.375% Convertible Senior Notes due November 2024	3,657	4,319	3,988	4,319
0.375% Convertible Senior Notes due September 2026	3,528	3,528	3,528	3,528
Restricted stock units	283	299	364	357
Stock options	788	67	809	52
Total	8,256	8,213	8,689	8,256

Note 16. Related Party Transactions

In February 2021, the Company entered into a distribution agreement, the terms of which are consistent with those prevailing at arm's-length. The spouse of one of the members of the Company’s Board of Directors is an executive officer of the distributor. During the three and six months ended June 30, 2021, the Company recorded $3.3 million and $5.5 million, respectively, of net revenues from the distributor. At June 30, 2021, the Company had $1.3 million of net accounts receivable due from the distributor on its condensed consolidated balance sheet.

Note 17. Subsequent Events

In July 2021, $20.0 million in principal of 1.375% Notes were converted into approximately 215,000 shares.

In July 2021, the Company entered into a $43.1 million equipment financing transaction secured by machinery and equipment associated with one of its highly automated manufacturing lines located in Acton, Massachusetts. The equipment financing has a term of 7 years and an interest rate of approximately 4.25%.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and the accompanying notes included in this quarterly report. The following discussion may contain forward-looking statements that reflect our plans, estimates and beliefs, ~~and involve~~which are subject to risks, uncertainties and assumptions. Our actual results could differ materially from those discussed in these forward-looking statements. Factors that could cause or contribute to these differences include those discussed under the headings “Risk Factors” and “Forward-Looking Statements” in both our annual report on Form 10-K for the year ended December 31, ~~2019~~2020 and in this quarterly report.

Overview

We are primarily engaged in the development, manufacture and sale of our proprietary Omnipod^® System (“Omnipod”), ~~an innovative,~~a continuous insulin delivery system for people with insulin-dependent diabetes. There are two primary types of insulin therapy practiced today: multiple daily injection (“MDI”) therapy using syringes or insulin pens; and pump therapy using insulin pumps. Insulin pumps are used to perform continuous subcutaneous insulin infusion, or insulin pump therapy, and typically use a programmable device and an infusion set to administer insulin into a person’s body. Insulin pump therapy has been shown to provide people with insulin-dependent diabetes with numerous advantages relative to MDI therapy. The Omnipod System features a small, lightweight, self-adhesive disposable tubeless Omnipod device (“Pod”) that is worn on the body for up to three days at a time; and its wireless companion, the handheld Personal Diabetes Manager. The Omnipod System, which features discreet and easy-to-use devices communicates wirelessly, provides for virtually pain-free automated cannula insertion and eliminates the need for traditional ~~MDI~~multiple daily injection therapy, using syringes or insulin pens, or the use of traditional pump and tubing. We believe that the Omnipod System’s unique proprietary design and features allow people with insulin-dependent diabetes to manage their diabetes with unprecedented freedom, comfort, convenience and ease.

In addition to the diabetes market space, we have partnered with pharmaceutical and biotechnology companies to tailor the Omnipod System technology platform for the delivery of ~~non-insulin~~ subcutaneous drugs across other therapeutic areas. Most of our drug delivery revenue currently consists of sales of ~~Pods~~pods to Amgen for use in the Neulasta^® Onpro^® kit, ~~an innovative~~a delivery system for Amgen’s white blood cell booster to help reduce the risk of infection after intense chemotherapy.

Our mission is to improve the lives of people with diabetes. To assist in achieving this mission, we are focused on the following key strategic imperatives:

•expanding access and awareness;

•delivering consumer-focused innovation;

•~~ensuring the best customer experience globally;~~

•~~expanding~~growing our global ~~footprint;~~addressable market; and

•driving operational excellence.

Our long-term financial objective is to sustain profitable growth. To achieve this goal, we expect our efforts in ~~2020~~2021 to focus primarily on our planned launch of the ~~pivotal trial in the United States for~~ Omnipod® 5 ~~powered by Horizon™~~Automated Insulin Delivery System (“Omnipod 5”), which is currently under review with the U.S. Food and Drug Administration (“FDA”). This review is taking longer than we had anticipated. We now expect to receive FDA clearance and launch our ~~automated insulin delivery system.~~ limited commercial release in the second half of the year, most likely late in the fourth quarter. This shift in timing is not expected to have a material impact on 2021 revenue.

In addition, we continue our efforts to expand the Omnipod 5 indication to preschoolers ages two to six, however the timing of our FDA submission is contingent upon the timing of Omnipod 5 clearance. We are now planning for this expanded indication in 2022. In addition, we completed enrollment in our Type 2 feasibility study and plan to conduct additional studies with the goal to further expand Omnipod 5’s indication to Type 2 users.

In order to support our continued growth and the ~~expected~~planned launch of Omnipod 5, ~~in the first half 2021,~~ we continue to focus on adding capacity to our U.S. manufacturing plant. During the ~~first~~ quarter, ~~of 2020,~~ we began producing salable product on our ~~second~~third highly automated manufacturing ~~line in the U.S. and~~line.

In 2021, we ~~plan to install a third line in the second half of 2020, on which production is expected in 2021.~~

~~Additionally, in 2020, we had planned to further roll out our~~launched Omnipod DASH^TM® Insulin Management System (“Omnipod DASH”), our next generation digital mobile Omnipod platform, in ~~Europe and Canada and enter five new countries in Western Europe and the Middle East~~Canada. We are also continuing to expand internationally in a targeted and strategic manner. During the ~~commercial sale~~first quarter of ~~Omnipod and~~2021, we increased our global ~~footprint. We~~footprint by expanding into Turkey and we also expect to enter Australia this year. Further, we are still committed to the further roll out of Omnipod DASH and to entering new countries, although the timing has shifted to early 2021 primarily due to the coronavirus pandemic discussed under Recent Developments below. This change in expected timing will not have a material impactworking on our ~~2020 revenues since we did not expect these actions~~strategy to ~~have a meaningful contribution~~enter additional markets in ~~2020, although they are expected to contribute to our long-term growth.~~new regions.

Finally, we plan to continue our product development efforts and expand awareness of and access to our products. Achieving the above strategic imperatives is expected to require additional investments in certain initiatives and personnel, as well as enhancements to our supply chain operation capacity, efficiency and effectiveness.

~~Recent Developments~~

A novel strain of coronavirus (“COVID-19”) was identified in China in December 2019, and subsequently declared a pandemic by the World Health Organization in March 2020. The COVID-19 outbreak in China resulted in abnormally low production at our contract manufacturer in China during the first two months of the year, which resulted in incremental depreciation expense for under-utilized plant capacity for those two months. In response to this outbreak, we took measures to ensure our ability to continue to provide product to our customers, including providing manufacturing incentives to our contract manufacturer in China and utilizing expedited, but more costly, shipping measures to transport product from China. In addition, we implemented strict screening and additional sanitation measures.

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China, where we manufacture a significant portion of our products, has begun to experience recovery from COVID-19 and we have been able to produce at normal capacity since March. Additionally, our second highly automated manufacturing line in our U.S. manufacturing plant has provided additional manufacturing redundancy to help mitigate manufacturing risks stemming from COVID-19. Once fully ramped, we expect the two highly-automated lines in our U.S. manufacturing plant to provide us with capacity in the U.S. that is equivalent to all our current lines in China. Refer to ~~Item 1A. Risk Factors~~ ~~for a discussion of COVID-19 risks.~~

Results of Operations

Three Months Ended June 30,
(dollars in millions) 2020 2019 Percent
Change Currency
Impact
Constant
Currency⁽¹⁾
Revenue:
U.S. Omnipod $ 128.8 $ 98.1 31.3 % — % 31.3 %
International Omnipod 73.2 62.7 16.7 % (3.0) % 19.7 %
Total Omnipod 202.0 160.8 25.6 % (1.2) % 26.8 %
Drug Delivery 24.3 16.3 49.1 % — % 49.1 %
Total $ 226.3 $ 177.1 27.8 % (1.0) % 28.8 %
Revenue


	Three Months Ended June 30,
(dollars in millions)	2021		2020		Percent Change		Currency Impact		Constant Currency (1)
U.S. Omnipod	$	150.5	$	128.8	16.8	%	—	%	16.8	%
International Omnipod	91.6		73.2		25.1	%	11.7	%	13.4	%
Total Omnipod	242.1		202.0		19.9	%	4.3	%	15.6	%
Drug Delivery	21.1		24.3		(13.2)	%	—	%	(13.2)	%
Total revenue	$	263.2	$	226.3	16.3	%	3.8	%	12.5	%


	Six Months Ended June 30,
(dollars in millions)	2021		2020		Percent Change		Currency Impact		Constant Currency (1)
U.S. Omnipod	$	293.8	$	245.4	19.7	%	—	%	19.7	%
International Omnipod	181.5		146.3		24.1	%	10.7	%	13.4	%
Total Omnipod	475.3		391.7		21.3	%	4.0	%	17.3	%
Drug Delivery	40.2		32.6		23.3	%	—	%	23.3	%
Total revenue	$	515.5	$	424.3	21.5	%	3.7	%	17.8	%

(1)

Six Months Ended June 30,
(dollars in millions) 2020 2019 Percent
Change Currency
Impact
Constant
Currency⁽¹⁾
Revenue:
U.S. Omnipod $ 245.4 $ 184.2 33.2 % — % 33.2 %
International Omnipod 146.3 119.6 22.3 % (3.2) % 25.5 %
Total Omnipod 391.7 303.8 28.9 % (1.3) % 30.2 %
Drug Delivery 32.6 32.9 (0.9) % — % (0.9) %
Total $ 424.3 $ 336.7 26.0 % (1.1) % 27.1 %

⁽¹⁾Constant currency revenue growth is a non-GAAP financial measure which should be considered supplemental to, and not a substitute for, our reported financial results prepared in accordance with GAAP. See “Management’s Use of Non-GAAP Measures.”

~~Revenue~~

Total revenue for the three months ended June 30, ~~2020~~2021 increased ~~$49.2~~$36.9 million, or ~~27.8%~~16.3%, to ~~$226.3~~$263.2 million, compared with ~~$177.1~~$226.3 million for the three months ended June 30, ~~2019.~~2020. Constant currency revenue growth of ~~28.8%~~12.5% was primarily driven by higher volume and, to a lesser extent, favorable sales channel mix.

Total revenue for the six months ended June 30, ~~2020~~2021 increased ~~$87.6~~$91.2 million, or ~~26.0%~~21.5%, to ~~$424.3~~$515.5 million, compared with ~~$336.7~~$424.3 million for the six months ended June 30, ~~2019.~~2020. Constant currency revenue growth of ~~27.1%~~17.8% was primarily driven by higher volume and, to a lesser extent, favorable sales channel mix.

U.S. Omnipod

U.S. Omnipod revenue for the three months ended June 30, ~~2020~~2021 increased ~~$30.7~~$21.7 million, or ~~31.3%~~16.8%, to ~~$128.8~~$150.5 million, compared with ~~$98.1~~$128.8 million for the three months ended June 30, ~~2019.~~2020. This increase was primarily due to higher volumes driven by growing our customer base, and to a lesser extent, an increase ~~in days-on-hand inventory at distributors due to both continued growth of DASH adoption and COVID-19. The increase was also~~ due to growth through the pharmacy channel, where Pods have a higher average selling price due in part to the fact that we offer the PDM for no charge. This increase was partially offset by a decrease in days-on-hand inventory at distributors since COVID-19 supply chain urgency has normalized.

U.S. Omnipod revenue for the six months ended June 30, ~~2020~~2021 increased ~~$61.2~~$48.4 million, or ~~33.2%~~19.7%, to ~~$245.4~~$293.8 million, compared with ~~$184.2~~$245.4 million for the six months ended June 30, ~~2019.~~ 2020.This increase was primarily due to higher volumes driven by growing our customer base, and to a lesser extent, an increase ~~in days-on-hand inventory at distributors due to both continued growth of DASH adoption and COVID-19. The increase was also~~ due to growth through the pharmacy channel, where Pods have a higher average selling price due in part to the fact that we offer the PDM for no charge. For full year ~~2020,~~2021, we expect strong U.S. Omnipod revenue growth driven by ~~continued market penetration and~~ volume growth of Omnipod DASH, primarily in the pharmacy ~~channel. We expect this revenue~~channel, benefits of our efforts to drive expanded access and awareness, and further growth ~~to be partially offset by the impact of lower new~~in our Omnipod ~~starts stemming from COVID-19.~~customer base.

International Omnipod

International Omnipod revenue for the three months ended June 30, ~~2020~~2021 increased ~~$10.5~~$18.4 million, or ~~16.7%~~25.1%, to ~~$73.2~~$91.6 million, compared with ~~$62.7~~$73.2 million for the three months ended June 30, ~~2019.~~2020. Excluding the ~~3.0% unfavorable~~11.7% favorable impact of currency exchange,

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the remaining ~~19.7%~~13.4% increase in revenue was primarily driven by higher volumes as we continue to expand awareness and access to the Omnipod.

International Omnipod revenue for the six months ended June 30, 2021 increased $35.2 million, or 24.1%, to $181.5 million, compared with $146.3 million for the six months ended June 30, 2020. Excluding the 10.7% favorable impact of currency exchange, the remaining 13.4% increase in revenue was primarily driven by higher volumes as we continue to expand awareness and access to the Omnipod, ~~and, to~~partially offset by a ~~lesser extent, an increase~~decrease in days-on-hand inventory at distributors ~~due to COVID-19.~~

International Omnipod revenue for the six months ended June 30, 2020 increased $26.7 million, or 22.3%, to $146.3 million, compared with $119.6 million for the six months ended June 30, 2019. Excluding the 3.2% unfavorable impact of currency exchange, the remaining 25.5% increase in revenue was primarily driven by higher volumes as we continue to expand awareness and access to the Omnipod and, to a lesser extent, an increase in days-on-hand inventory at distributors due to COVID-19. Similar to in the U.S, for thesince COVID-19 supply chain urgency has normalized. For full year ~~2020,~~2021, we expect higher International Omnipod revenue due to continued volume growth and market ~~penetration.~~penetration aided by the full launch of Omnipod DASH throughout our international markets. We expect this revenue growth to be

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partially offset by the lagging impact of lower new ~~Omnipod~~customer starts in 2020 and the first half of 2021 stemming from ~~COVID-19.~~COVID-19 and related challenges.

Drug Delivery

Drug Delivery revenue for the three months ended June 30, ~~2020 increased $8.0~~2021 decreased $3.2 million, or ~~49.1%~~13.2%, to ~~$24.3~~$21.1 million, compared with ~~$16.3~~$24.3 million for the three months ended June 30, ~~2019,~~2020, due to ~~increased demand driven by COVID-19 and shift~~elevated volume in the ~~timing of production between~~prior year due to the ~~first and second quarter.~~COVID-19 pandemic.

Drug Delivery revenue for the six months ended June 30, ~~2020 was relatively level~~2021 increased $7.6 million, or 23.3%, to $40.2 million, compared with $32.6 million for the six months ended June 30, ~~2019~~2020, du.e to increased demand for Amgen’s Neulasta® Onpro® kit which includes our pods. For full year ~~2020,~~2021, we expect ~~Drug Delivery~~drug delivery revenue to ~~increase due to a higher demand forecast resulting from COVID-19.~~decline or grow slightly dependent upon forecasted demand.

Operating Expenses


		Three Months Ended June 30,														Six Months Ended June 30,													Three Months Ended June 30,
		2020						2019						2020								2019						2021	2020
(dollars in millions)	(dollars in millions)	Amount		Percent of Revenue		Amount		Percent of Revenue		Amount		Percent of Revenue		Amount		Percent of Revenue		(dollars in millions)	Amount		Percent of Revenue			Amount		Percent of Revenue
Cost of revenue	Cost of revenue	$	83.8	37.0	%	$	60.7	34.3	%	$	154.9	36.5	%	$	113.6	33.7	%	Cost of revenue	$	80.5	30.6		%	$	83.8	37.0	%
Research and development expenses	Research and development expenses	$	34.2	15.1	%	$	33.0	18.6	%	$	69.7	16.4	%	$	65.5	19.5	%	Research and development expenses	$	40.1	15.2		%	$	34.2	15.1	%
Selling, general and administrative expenses	Selling, general and administrative expenses	$	80.8	35.7	%	$	75.8	42.8	%	$	164.7	38.8	%	$	142.7	42.4	%	Selling, general and administrative expenses	$	116.3	44.2		%	$	80.8	35.7	%


	Six Months Ended June 30,
	2021				2020
(dollars in millions)	Amount		Percent of Revenue		Amount		Percent of Revenue
Cost of revenue	$	165.3	32.1	%	$	154.9	36.5	%
Research and development expenses	$	80.8	15.7	%	$	69.7	16.4	%
Selling, general and administrative expenses	$	226.8	44.0	%	$	164.7	38.8	%

Cost of Revenue

Cost of revenue for the three months ended June 30, ~~2020 increased $23.1~~2021 decreased $3.3 million, or ~~38.1%~~3.9%, to ~~$83.8~~$80.5 million, compared with ~~$60.7~~$83.8 million for the three months ended June 30, ~~2019.~~2020. Gross margin was 69.4% for the three months ended June 30, 2021, compared with 63.0% for the three months ended June 30, ~~2020, compared with 65.7% for the three months ended June 30, 2019.~~2020. The ~~270~~640 basis point ~~decrease~~increase in gross margin was primarily ~~due to start-up~~driven by improved manufacturing and supply chain efficiencies, 130 basis points of favorable foreign currency exchange, a 120 basis point decrease in COVID-19 related costs, and inefficiencies related to our new U.S. manufacturing operations, and $3.4 million for recruiting and screening expenses, expedited shipping costs and manufacturing incentives associated with our contract manufacturer in China as a result of the coronavirus pandemic. This decrease was partially offset by a higher average selling price due to growth in the pharmacy channel. These increases were partially offset by expected higher production costs as we continue to scale U.S. manufacturing.

Cost of revenue for the six months ended June 30, ~~2020~~2021 increased ~~$41.3~~$10.4 million, or ~~36.4%~~6.7%, to ~~$154.9 million,~~165.3, compared with ~~$113.6~~$154.9 million for the six months ended June 30, ~~2019.~~2020. Gross margin was 67.9% for the six months ended June 30, 2021, compared with 63.5% for the six months ended June 30, ~~2020, compared with 66.3% for the six months ended June 30, 2019.~~2020. The ~~280~~440 basis point ~~decrease~~increase in gross margin was primarily ~~due to start-up costs~~driven by improved manufacturing and inefficiencies related to our new U.S. manufacturing operations as well as two months of higher depreciation expense for under-utilized plant capacity, recruiting and screening expenses, expedited shipping costs and manufacturing incentives totaling $6.5 million associated with our contract manufacturer in China as a result of the coronavirus pandemic. This decrease was partially offset bysupply chain efficiencies, higher average selling price due to growth in the pharmacy ~~channel. We expect~~channel, 120 basis points of favorable foreign currency exchange, and a 110 basis point decrease in COVID-19 related costs. These increases were partially offset by expected higher production costs as we continue to scale U.S. manufacturing. For full year ~~2020~~2021, we expect gross margin to be ~~approximately 63%~~in the range of 68% to 69%, which reflects ~~an estimated $7 to $10 million~~expected revenue growth both in the U.S. and internationally, including in the pharmacy channel, and the benefits of ~~costs resulting from the coronavirus pandemic, in addition to start-up costs and inefficiencies as we continue to ramp up our U.S. manufacturing operations, partially offset by~~ continued improvements in ~~our global~~ manufacturing and supply chain ~~operations and the move into the pharmacy channel in the United States.~~operations. In addition, we expect to benefit from lower COVID-19 related costs.

Research and Development Expenses

Research and development expenses for the three months ended June 30, ~~2020~~2021 increased ~~$1.2~~$5.9 million, or ~~3.6%~~17.3%, to ~~$34.2~~$40.1 million, compared with ~~$33.0~~$34.2 million for the three months ended June 30, ~~2019.~~2020. This increase was primarily due to ~~spend related~~year-over-year headcount additions to support our continued investment in development of Omnipod ~~5, partially offset by reduced spend on Omnipod DASH, which was launched in the prior year period.~~products.

Research and development expenses for the six months ended June 30, ~~2020~~2021 increased ~~$4.2~~$11.1 million, or ~~6.4%~~15.9%, to ~~$69.7~~$80.8 million, compared with ~~$65.5~~$69.7 million for the six months ended June 30, ~~2019.~~ 2020.This increase was primarily due to ~~spend related~~year-over-year headcount additions to support our continued investment in development of Omnipod ~~5, partially offset by reduced spend on Omnipod DASH, which was launched in the prior year period.~~products. We expect research and development ~~spending~~spend for the full year ~~2020~~2021 to increase compared with ~~2019.~~2020 as we continue to invest in advancing our innovation and clinical pipeline.

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Selling, General and Administrative Expenses

Selling general and administrative expenses for the three months ended June 30, ~~2020~~2021 increased ~~$5.0~~$35.5 million, or ~~6.6%~~43.9%, to ~~$80.8~~$116.3 million, compared with ~~$75.8~~$80.8 million for the three months ended June 30, ~~2019.~~2020. This increase was primarily attributable to ~~investments in initiatives~~year-over-year headcount additions, mainly to support ~~our growth,~~international expansion, information technology, sales, and customer service personnel, an

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increase in direct to consumer advertising spend, as well as ~~headcount year over year, primarily associated with the expansion of~~a shift in resources and certain costs from our ~~U.S. sales force. These increases were partially offset by~~Omnipod 5 clinical efforts to our commercial strategy as we mature as a ~~decrease in travel and entertainment expenses due to reduced activity resulting from COVID-19.~~company.

Selling general and administrative expenses for the six months ended June 30, ~~2020~~2021 increased ~~$22~~$62.1 million, or ~~15.4%~~37.7%, to ~~$164.7~~$226.8 million, compared with ~~$142.7~~$164.7 million for the six months ended June 30, ~~2019~~2020. . This increase was primarily attributable to ~~investments in customer support and other initiatives~~year-over-year headcount additions, mainly to support international expansion, information technology, sales, and customer service personnel, an increase in direct to consumer advertising spend, a shift in resources and certain costs from our ~~growth,~~Omnipod 5 clinical efforts to our commercial strategy as we mature as a company, as well as ~~headcount year over year, primarily associated with the expansion of our U.S. sales force. These increases were partially offset by a decrease in travel and entertainment expenses due~~commercial costs related to ~~reduced activity resulting from COVID-19.~~international expansion. We expect selling, general and administrative expenses ~~for the full year 2020~~ to increase in 2021 compared with ~~2019~~2020 due to expansion of our ~~U.S.~~ sales force, direct-to-consumer advertising, investments to expand market acceptance and ~~customer support personnel~~access for our products, and investments in our operating structure to facilitate ~~our~~operational efficiencies and continued growth.

Non-Operating Items

Interest Expense, Net

Net interest expense increased $5.3 million to $16.4 million for the three months ended June 30, 2021, compared with $11.1 million for the three months ended June 30, ~~2020, compared with $5.8 million for the three months ended June 30, 2019.~~2020. This increase was driven by ~~a $3.4~~$4.6 million ~~increase in non-cash~~of cash interest expense associated with ~~our 0.375% Notes issued~~the $500 million senior secured term loan B (the “Term Loan”) entered into in ~~September 2019,~~May 2021, and the mortgage and equipment financings that occurred in the fourth quarter of 2020 and a ~~$1.2 million decrease in interest income due to lower market rates and a shift in a portion of our investment portfolio to more liquid investments~~ ~~and a $1.0 million decrease in capitalized interest primarily due to the placement of our first U.S. manufacturing line into service during the second quarter of 2019.~~

Net interest expense increased $10.6 million to $21.2 million for the six months ended June 30, 2020, compared with $10.6 million for the six months ended June 30, 2019. This increase was driven by a $6.9 million increase in non-cash interest expense associated with our 0.375% Notes issued in September 2019 and a $2.8 million decrease in ~~capitalized interest primarily due to the placement of our first U.S. manufacturing line into service during the second quarter of 2019, as well as a $1.5~~$0.5 million decrease in interest income due to lower market rates and a shift in a portion of our investment portfolio to more liquid investments.

Net interest expense increased $8.6 million to $29.8 million for the six months ended June 30, 2021, compared with $21.2 million for the six months ended June 30, 2020. This increase was driven by $6.2 million of cash interest expense associated with the Term Loan entered into in May 2021, and the mortgage and equipment financings that occurred in the fourth quarter of 2020 and a $1.8 million decrease in interest income due to lower market rates and a shift in a portion of our investment portfolio to more liquid investments.

Loss on Extinguishment of Debt

During the three and six months ended June 30, 2021, we incurred a $40.1 million loss on extinguishment of debt related to the repurchase of a portion of our 1.375% Convertible Senior Notes due November 2024 (“1.375% Notes”). Refer to Note 8 to the consolidated financial statements for additional information.

Other Income (Expense), Net

During the three months ended June 30, ~~2020,~~2021, we had other income, net of ~~$1.0~~$1.8 million, compared with ~~$0.1~~$1.0 million for the three months ended June 30, ~~2019~~.2020. The $0.8 million increase in other income was primarily driven by unrealized foreign currency gains due to the change in exchange rates.

During the six months ended June 30, ~~2020,~~2021, we had other ~~income, net~~expense of ~~$1.0~~$0.8 million, compared with ~~$2.3~~income of $1.0 million for the six months ended June 30, ~~2019,~~2020. The $1.8 million decrease in other income was primarily driven by a ~~$1.8 million insurance recovery for damaged inventory~~unrealized foreign currency losses due to the change in ~~excess of our cost received during the~~ ~~six months ended June 30, 2019~~.exchange rates.

Income Tax Expense, Net

Income tax benefit was $3.4 million for the three months ended June 30, 2021, compared with an income tax expense ~~was~~of $3.0 ~~million and $0.5~~ million for the three months ended June 30, 2020, ~~and 2019, respectively. This resulted~~resulting in effective tax rates of ~~17.2%~~12.1% and ~~25.6%~~17.2% for the three months ended June 30, 2021 and 2020, ~~and 2019,~~ respectively. T~~The~~he decrease in the effective tax rate was primarily driven by the jurisdictional distribution of profits and losses. In the United States, we have net operating loss carryforwards that reduce taxable profits and a ~~shift in expected geographic mix of income.~~full valuation allowance against net deferred tax assets.

Income tax benefit was $3.1 million for the six months ended June 30, 2021, compared with an income tax expense ~~was~~of $2.5 ~~million and $0.8~~ million for the six months ended June 30, 2020, ~~and 2019, respectively. This resulted~~resulting in effective tax rates of ~~17.0%~~11.2% and ~~12.3%~~17.0% for the six months ended June 30, 2021 and 2020, ~~and 2019,~~ respectively. ~~The increase~~The decrease in the e~~ffective~~effective tax rate was primarily driven by the jurisdictional distribution of profits and losses. In the United States, we have net operating loss carryforwards that reduce taxable profits and a ~~shift~~full valuation allowance against net deferred tax assets. Additionally, we have not recorded tax benefits for current year losses in ~~expected geographic mix~~the United Kingdom due to valuation allowance requirements following a transfer of ~~income.~~intellectual property that occurred during the three months ended March 31, 2021.

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Adjusted EBITDA

The table below presents reconciliations of Adjusted EBITDA, a non-GAAP financial measure, to net (loss) income, the most directly comparable financial measure prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”):


		Three Months Ended June 30,						Six Months Ended June 30,							Three Months Ended June 30,				Six Months Ended June 30,
(in millions)	(in millions)	2020		2019		2020		2019		(in millions)	2021		2020		2021		2020
Net income		$	14.4	$	1.4	$	12.3	$	5.8
Net (loss) income										Net (loss) income	$	(25.0)	$	14.4	$	(25.0)	$	12.3
Interest expense, net	Interest expense, net	11.1		5.8		21.2		10.6		Interest expense, net	16.4		11.1		29.8		21.2
Income tax expense		3.0		0.5		2.5		0.8
Income tax (benefit) expense										Income tax (benefit) expense	(3.4)		3.0		(3.1)		2.5
Depreciation and amortization	Depreciation and amortization	9.9		5.9		18.8		11.0		Depreciation and amortization	15.2		9.9		28.0		18.8
Stock-based compensation		5.8		8.3		13.7		14.1
Stock-based compensation expense										Stock-based compensation expense	9.0		5.8		17.6		13.7
Loss on extinguishment of debt										Loss on extinguishment of debt	40.1		—		40.1		—
Adjusted EBITDA	Adjusted EBITDA	$	44.2	$	21.9	$	68.5	$	42.3	Adjusted EBITDA	$	52.3	$	44.2	$	87.4	$	68.5

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Non-GAAP Financial Measures

Management uses the following non-GAAP financial measures:

Constant currency revenue growth ~~measures~~represents the change in revenue between current and prior year periods using a constant currency, the exchange rate in effect during the applicable prior year period. We present constant currency revenue growth because we believe it provides meaningful information regarding our results on a consistent and comparable basis. Management uses this non-GAAP financial measure, in addition to financial measures in accordance with accounting principles generally accepted in the United States (“GAAP”), to evaluate our operating results. It is also one of the performance metrics that determines management incentive compensation.

Adjusted EBITDA represents net income (loss) plus net interest expense, income tax expense (benefit), depreciation and amortization, stock-based compensation and other significant unusual items, as applicable. We present Adjusted EBITDA because management uses it as a supplemental measure in assessing our operating performance, and we believe that it is helpful to investors, ~~securities analysts~~ and other interested parties as a measure of our comparative operating performance from period to period. ~~We recognize~~ Adjusted EBITDA asis a commonly used measure in determining business value and ~~as such,~~we use it internally to report results. ~~It is also one of the performance metrics that determines management incentive compensation.~~

These non-GAAP financial measures should be considered supplemental to, and not a substitute for, our reported financial results prepared in accordance with GAAP. In addition, the above definitions may differ from similarly titled measures used by others. Non-GAAP financial measures exclude the effect of items that increase or decrease our reported results of operations; accordingly, we strongly encourage investors to review our consolidated financial statements in their entirety.

Liquidity and Capital Resources

As of June 30, ~~2020,~~2021, we had ~~$779.1~~$854.6 million in cash and cash equivalents and ~~$88.8~~$17.5 million of investments in marketable securities. Additionally, we have a $60 million three year senior secured revolving credit facility (“Revolving Credit Facility”), which expires in 2024. At June 30, 2021, no amount was outstanding under the Revolving Credit Facility. The Revolving Credit Facility contains a covenant to maintain a certain leverage ratio, in addition to other customary covenants, none of which are considered restrictive to our operations. We believe that our current liquidity will be sufficient to meet our projected operating, investing and debt service requirements for at least the next twelve months. ~~As of June 30, 2020, we had $78.7 million in capital commitments.~~

~~Convertible~~ Debt

To finance our operations and global expansion, we have periodically issued convertible senior notes, which are convertible into our common stock. As of June 30, ~~2020,~~2021, the following notes were outstanding:


Issuance Date	Issuance Date	Coupon	Principal Outstanding (in millions)		Due Date	Initial Conversion Rate per Share of Common Stock	Conversion Price per Share of Common Stock		Issuance Date	Coupon	Principal Outstanding (in millions)		Due Date	Conversion Rate (1)	Conversion Price per Share of Common Stock
November 2017	November 2017	1.375%	$	402.5	November 2024	10.7315	$	93.2	November 2017	1.375%	$	32.1	November 2024	10.7315	$	93.18
September 2019	September 2019	0.375%	800.0		September 2026	4.4105	$	226.7	September 2019	0.375%	800.0		September 2026	4.4105	$	226.73
Total	Total		$	1,202.5					Total		$	832.1

(1) Per $1,000 face value of notes.

In July 2021, $20.0 million in principal of 1.375% Notes were converted into approximately 215,000 shares, which we expect to result in a loss on extinguishment of debt of approximately $2 million.

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During the three months ended June 30, 2021, we obtained a $500 million seven year Term Loan for net proceeds of $489.5 million, which we used to fund the cash portion of repurchase of the 1.375% Notes due November 2024. Additional information regarding our debt ~~issuances~~ is provided in Note 8 to the consolidated financial statements.

Summary of Cash Flows


		Six Months Ended June 30,							Six Months Ended June 30,
(in millions)	(in millions)	2020		2019		(in millions)	2021		2020
Cash provided by (used in):
Cash (used in) provided by:						Cash (used in) provided by:
Operating activities	Operating activities	$	22.8	$	20.4	Operating activities	$	(16.8)	$	22.8
Investing activities	Investing activities	80.6		(31.8)		Investing activities	(34.1)		80.6
Financing activities	Financing activities	464.9		17.7		Financing activities	—		464.9
Effect of exchange rate changes on cash	Effect of exchange rate changes on cash	(2.9)		(0.3)		Effect of exchange rate changes on cash	(1.7)		(2.9)
Net increase in cash and cash equivalents		$	565.4	$	6.0
Net (decrease) increase in cash, cash equivalents and restricted cash						Net (decrease) increase in cash, cash equivalents and restricted cash	$	(52.6)	$	565.4

Operating Activities

Net cash ~~provided by~~used in operating activities of ~~$22.8~~$16.8 million for the six months ended June 30, ~~2020~~2021 was primarily attributable to net ~~income,~~loss, as adjusted for ~~non-cash interest,~~loss on extinguishment of debt, depreciation and amortization, non-cash interest, and stock-based compensation expense, partially offset by a ~~$46.9~~$104.2 million working capital cash outflow. The working capital outflow was driven by a ~~$13.9~~$45.0 million ~~decrease~~increase in ~~accounts payable, accrued expenses and other current liabilities,~~inventories, a ~~$14.0~~$30.0 million increase in prepaid expenses and other assets and a ~~$13.8~~$19.5 million increase in accounts receivable. The ~~decrease~~increase in ~~accounts payable, accrued expenses and other current liabilities~~inventories was driven by a planned inventory build to satisfy demand and the ~~annual payout~~addition of ~~cash bonuses for performance in the prior year.~~our third highly automated manufacturing line. The increase in prepaid expenses and other assets was driven by an increase ~~unbilled revenue resulting~~

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~~from~~in cloud computing implementation costs and an increase in ~~demand~~unbilled revenue resulting from higher percentage of completion for our Drug Delivery product. ~~The $13.8 million~~Finally, the increase in accounts receivable was primarily due to an increase in International Omnipod revenue and sales in the U.S. pharmacy channel, both of which generally have longer payment terms.

Investing Activities

Net cash used in investing activities was $34.1 million for the six months ended June 30, 2021, compared with net cash provided by investing activities ~~was~~of $80.6 million for the six months ended June 30, ~~2020, compared with net cash used in investing activities of $31.8 million for six months ended June 30, 2019.~~2020.

Capital Spending—Capital expenditures were $52.8 million and $51.7 million for the six months ended June 30, 2021 and 2020, respectively, and primarily related to the purchase of equipment to increase our manufacturing capacity. ~~Capital~~We expect capital expenditures for 2021 to increase compared with 2020 as we continue to further invest in our global manufacturing operations to support our growth, as well as investments in our strategic initiatives. We expect to fund our capital expenditures using existing cash and investments.

Purchases and Sales of ~~$91.9~~Investments—Proceeds from maturities of marketable securities were $22.5 million for the six months ended June 30, ~~2019 were primarily associated~~2021, compared with ~~the construction~~net proceeds from maturities of our manufacturing and corporate headquarters facility in Acton, Massachusetts. For the full year 2020, we expect capital expenditures to be relatively consistent with 2019 as we continue to expand manufacturing capacity to support our growth and the launch of Omnipod 5 in the first half of 2021. We expect to fund our capital expenditures using a combination of existing cash and investments as well as cash generated from operations.

~~Purchases and Sales of Investments—Net sales of marketable securities were~~ $132.8 million for the six months ended June 30, ~~2020, compared with $65.1~~2020. The $110.3 million ~~for the six months ended June 30, 2019. The increase in net sales of marketable securities~~decrease was driven by athe prior year shift in a portion of our investment portfolio to investments ~~that are~~ classified as cash equivalents.

Financing Activities

~~Net~~We had no cash provided by financing activities ~~was $464.9 million~~ for the six months ended June 30, ~~2020,~~2021, compared with ~~net cash provided by financing activities of $17.7~~$464.9 million for six months ended June 30, ~~2019.~~2020.

Debt Issuance ~~of Common Stock~~and Repayments—During the six months ended June 30, ~~2020,~~2021, we ~~sold 2.4~~received net proceeds of $489.5 million ~~common shares for $478.7 million in an underwritten registered offering. Net proceeds~~ from the ~~offering were $477.5 million. The proceeds provide us with additional liquidity~~issuance of the Term Loan and used $460.8 million of cash to ~~mitigate risk and allow us to continue investing in~~partially fund the ~~growth~~repurchase of a portion of our ~~business and~~1.375% Notes. Additionally, we spent $6.4 million on principal payments associated with our ~~strategic initiatives.~~equipment financings.

Option Exercises and Payment of Taxes for Restricted Stock Net Settlements—Total proceeds from option exercises ~~were $14.2~~and issuance of employee stock purchase plan shares was $10.0 million and ~~$25.6~~$14.2 million for the six months ended June 30, ~~2020~~2021 and ~~2019,~~2020, respectively. The ~~$11.4~~$4.2 million decrease ~~in proceeds from option exercises~~ was primarily driven by ~~the retirement of~~fewer option exercises by our former ~~executives in the prior year period.~~chief executive officer. Payments for taxes related to net restricted and performance stock unit settlements were ~~$26.8~~$27.3 million and ~~$7.9~~$26.8 million for the six months ended June 30, 2021 and 2020, ~~and 2019,~~ respectively. The $18.9 million increase in payments for taxes related to restricted stock net settlements was primarily due to a higher achievement percentage on performance stock units vested in the first quarter of 2020 compared to the prior year.

~~Commitments and Contingencies~~

Following the expiration of an agreement with a former European distributor on June 30, 2018, we were required to pay a quarterly per-unit fee for Omnipod sales to certain customers of the former European distributor for a one-year period through June 30, 2019. The methodology applicable for determining the total fee under the distribution agreement is subject to an active arbitration proceeding in Switzerland. The final amount of the fee could vary significantly depending on the number of customers who count for purposes of calculating the fee under the terms of the agreement. We estimate that the final aggregate fee for the applicable twelve-month period could be in the range of $5 million to $55 million, of which $5.1 million had been paid as of June 30, 2020.

Legal Proceedings

The significant estimates and judgments related to establishing litigation reserves are discussed under “Legal Proceedings” in Note 9 10to the consolidated financial statements included in this Form 10-Q.

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Off-Balance Sheet Arrangements

As of June 30, ~~2020,~~2021, we had various outstanding letters of credit and bank guarantees totaling ~~$2.9~~$2.8 million, none of which is individually significant. We have restricted cash that serves as collateral for these outstanding letters of credit and bank guarantees that are included in cash and cash equivalents on our consolidated balance sheet.

Critical Accounting Policies and Estimates

The preparation of our consolidated financial statements in conformity with GAAP requires management to use judgment in making estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses, and related disclosure of contingent assets and liabilities.

~~We believe that our~~Our accounting policies for revenue recognition ~~accounts receivable and allowance for credit losses, product warranty~~ and contingencies are based on, among other things, judgments and assumptions made by management that include inherent risks and uncertainties. There have been no significant changes to the above critical accounting policies or in the underlying accounting assumptions and estimates used in such policies from those disclosed in our annual consolidated financial statements and

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accompanying notes included in our Annual Report on Form 10-K for the year ended December 31, ~~2019, except our accounting policy for our allowance for doubtful accounts (now termed allowance for credit losses). As of January 1, 2020, we adopted Accounting Standards Update (“ASU”) 2016-13,~~ ~~Credit Losses (Topic 326), as described in Note 1 to the consolidated financial statements in this Form 10-Q.~~2020.

Accounting Standards Issued and Not Yet Adopted

~~In December 2019, the Financial Accounting Standards Board (“FASB”) issued ASU 2019-12,~~ ~~Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes.~~ ASU 2019-12 eliminates certain exceptions in the current guidance regarding the approach for intraperiod tax allocations, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences. This new guidance also simplifies the accounting for franchise taxes and enacted changes in tax laws or rates and clarifies such things as the accounting for transactions that result in a step up in the tax basis of goodwill. The guidance is effective for us beginning in the first quarter of 2021 with early adoption permitted. We are currently evaluating the impact of this guidance on our consolidated financial statements.

In August 2020, the FASB issued ASU 2020-06, Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity, which simplifies the accounting for convertible instruments by eliminating certain separation models. Under ASU 2020-06, a convertible debt instrument will generally be reported as a single liability at its amortized cost with no separate accounting for embedded conversion features. Consequently, the interest rate of convertible debt instruments will be closer to the coupon interest rate. In addition, ASU 2020-06 eliminates the treasury stock method to calculate diluted earnings per share for convertible instruments and requires the use of the if-converted method. The guidance is effective for us beginning in the first quarter of 2022. Based on the carrying value of our convertible debt as of June 30, 2021 and subsequent conversion of 1.375% Notes in July 2021, the adoption of this guidance on January 1, 2022 is expected to result in an approximate $215 million decrease in additional paid in capital from the derecognition of the bifurcated equity component, $155 million increase in debt from the derecognition of the discount associated with ~~early adoption permitted. The adoption~~the bifurcated equity component and $60 million decrease to the opening balance of accumulated deficit, representing the cumulative interest expense recognized related to the amortization of the bifurcated conversion option. We expect to write-off the related deferred tax liabilities with a corresponding adjustment to the valuation allowance, resulting in no net impact to the cumulative adjustment to retained earnings. Adoption of this standard will have no impact on our diluted earnings per share as we calculate earnings per share using the if-converted method. ~~We are currently evaluating the impact of the remaining provisions on our consolidated financial statements.~~

FORWARD-LOOKING STATEMENTS

This quarterly report on Form 10-Q contains forward-looking statements. Forward-looking statements relate to future events or our future financial performance. We generally identify forward looking statements by terminology such as “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “could,” “intends,” “targets,” “projects,” “contemplates,” “believes,” “estimates,” “predicts,” “potential” or “continue” or the negative of these terms or other similar words. These statements are only predictions. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our business, results of operations and financial condition.

The outcomes of the events described in these forward-looking statements are subject to risks, uncertainties and assumptions. These risks and uncertainties include, but are not limited to:

•risks associated with public health crises and pandemics, such as the COVID-19 global pandemic, including the duration of the outbreak, government actions and restrictive measures implemented in response, supply chain disruptions, delays in clinical trials, and other impacts to the business, or on our ability to execute business continuity plans;

•risks associated with our dependence on our principal product platform, the Omnipod System, and our ability to design, develop, manufacture and commercialize future products;

•our ability to reduce production costs and increase customer orders and manufacturing volumes;

•adverse changes in general economic conditions;

•the impact of healthcare reform laws;

•supply problems or price fluctuations with sole source or third-party suppliers on which we are dependent;

•the potential establishment of a competitive bid program for conventional insulin pumps;

•failure to retain key ~~supplies~~suppliers and/or supplier pricing discounts and achieve satisfactory gross margins;

•international business risks, including regulatory, commercial and logistics risks associated with selling our products in Europe ~~in light of the uncertainty related~~due to the separation of the United Kingdom from the European Union (Brexit);

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•our inability to secure and retain adequate coverage or reimbursement from third-party payors for the Omnipod System or future products and potential adverse changes in reimbursement rates or policies relating to the Omnipod System or future products;

•failure to retain key payor partners and their members;

•adverse effects resulting from competition;

•technological change and product innovation adversely affecting our business;

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•changes to or termination of our license to incorporate a blood glucose meter into the Omnipod System or our inability to enter into new license or other agreements with respect to the Omnipod System’s current or future features;

•challenges to the future development of our non-insulin drug delivery product line;

•our ability to protect our intellectual property and other proprietary rights;

•conflicts with the intellectual property of third parties, including claims that our current or future products infringe or misappropriate the proprietary rights of others;

•adverse regulatory or legal actions relating to the Omnipod System or future products;

•failure of our contract manufacturers or component suppliers to comply with the ~~U.S Food and Drug Administration’s~~FDA’s quality system regulations;

•potential adverse impacts resulting from a recall, or discovery of serious safety issues, of the Omnipod System;

•the potential violation of the U.S. Foreign Corrupt Practices Act or any other federal, state or foreign anti-bribery/anti-corruption laws or laws prohibiting “kickbacks” or protecting the confidentiality of health information or other protected personal information, or any challenge to or investigation into our practices under these laws;

•product liability and other lawsuits that may be brought against us, including stemming from off-label use of our product;

•breaches or failures of our product or information technology systems, including by ~~cyber attack;~~cyber-attack;

•reduced retention rates of our customer base;

•unfavorable results of clinical studies relating to the Omnipod System or future products, or the products of our competitors;

•future publication of articles or announcement of positions by diabetes associations or other organizations that are unfavorable to the Omnipod System;

•the concentration of our manufacturing operations and storage of our inventory in a limited number of locations;

•our ability to attract and retain personnel;

•our ability to scale our business to support revenue growth;

•fluctuations in quarterly results of operations;

•risks associated with potential future acquisitions or investments in new businesses;

•our ability to generate sufficient cash to service all of our indebtedness or raise additional funds on acceptable terms or at all;

•the expansion of our distribution network;

•the volatility of the trading price of our common stock;

•risks related to future sales of our common stock or the conversion of any of our convertible debt;

•potential limitations on our ability to use our net operating loss carryforwards; and

•anti-takeover provisions in our organizational documents.

The risk factors discussed in “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, ~~2019~~2020 and in this Quarterly Report could cause our results to differ materially from those expressed in forward-looking statements. In addition, there may be other risks and uncertainties that we are unable to predict at this time or that we currently do not expect to have a material adverse effect on our business. Actual results could differ materially from those projected in the forward-looking statements; accordingly, you should not rely upon forward-looking statements as predictions of future events. We expressly disclaim any obligation to update these forward-looking statements other than as required by law.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

Interest Rate Risk

Our exposure to changes in interest rates is associated with borrowings under our Revolving Credit Facility and our Term Loan, both of which are variable-rate debt. At June 30, 2021, no amounts were outstanding under our Revolving Credit Facility. In May 2021, we entered into two interest rate swap agreements to effectively convert $480 million of our term loan borrowings from a variable rate to

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a fixed rate. These interest rate swaps are intended to mitigate the exposure to fluctuations in interest rates and qualify for hedge accounting treatment as cash flow hedges. A 100 basis point increase or decrease in interest rates relative to interest rates as of June 30, 2021 would decrease or increase our annual earnings, respectively, by approximately $0.2 million.

Refer to “Part II. Item 7A. Quantitative and Qualitative Disclosures About Market Risk” in our Annual Report on Form 10-K for the year ended December 31, ~~2019~~2020 for a discussion of our ~~interest rate risk,~~ market price sensitive instruments and foreign currency exchange risk.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures designed to ensure that information required to be disclosed in reports filed under the Securities Exchange Act of 1934 (“the Exchange Act”), as amended, is recorded, processed, summarized and reported within the specified time periods, and that such information is accumulated and communicated to management, including our chief executive officer and chief financial officer, as appropriate, to allow timely decisions regarding required disclosure.

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Our management, with the participation of our chief executive officer and chief financial officer, evaluated the effectiveness of our disclosure controls and procedures (as defined in ~~the Securities and Exchange Act of 1934~~ Rules 13a-15(e) and 15d-15(e)) under the Exchange Act) as of June 30, ~~2020.~~2021. Based on the evaluation, our chief executive officer and chief financial officer concluded that, as of that date, our disclosure controls and procedures were effective.

Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting during the three months ended June 30, ~~2020~~2021 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II - OTHER INFORMATION

Item 1. Legal Proceedings

Information regarding our material pending legal proceedings, which is incorporated herein by reference, is provided in Note 910 to the consolidated financial statements in this Form 10-Q.

Item 1A. Risk Factors

Please refer to the “Risks Factors” section in our Annual Report on Form 10-K for the year ended December 31, ~~2019~~2020 for a discussion of risks to which our business, financial condition, results of operations and cash flows are subject. ~~Other than as set forth below, there~~There have been no material changes to the risk factors disclosed in the aforementioned Annual Report.

~~Our financial condition and results of operations have been and may to continue to be adversely affected by the recent coronavirus outbreak.~~

A novel strain of coronavirus (COVID-19) was identified in China in December 2019, and subsequently declared a pandemic by the World Health Organization in March 2020. To date, this outbreak, which has surfaced in nearly all regions around the world, and preventative measures taken to contain or mitigate the outbreak, have caused, and are continuing to cause, business slowdown or shutdown in affected areas and disruption in the financial markets globally. This has led to a significant increase in unemployment and a loss of employee-sponsored insurance coverage for many people in the United States. As a result, consumers may reduce their spending and our customer attrition rate may increase, which could have a material adverse effect on our business, sales, financial condition and results of operations.

The COVID-19 pandemic also has the potential to significantly impact our supply chain if the manufacturing plants that produce our products or product components, the distribution centers where we manage our inventory, or the operations of our logistics and other service providers, including third parties that sterilize our products, are disrupted, temporarily closed or experience worker shortages for a sustained period of time. Although China, where we manufacture a significant portion of our product, has begun to experience recovery and we are currently producing at pre-COVID-19 levels, should China suffer a COVID-19 relapse, it could hinder our ability to produce product and have a material adverse effect on our business and results of operations.

The further spread of COVID-19, and the requirements to take action to help limit the spread of the illness, may impact our ability to carry out our business as usual. For example, the COVID-19 pandemic may divert healthcare resources away from the conduct of clinical trials and interruption in the operations of the U.S. Food and Drug Administration and comparable foreign regulatory agencies, which could delay product approval timelines. Further, we could experience limitations on employee resources that would otherwise be focused on the conduct of preclinical studies and clinical trials, including because of sickness of employees or their families, the requirement for employees to avoid contact with large groups of people and the reliance on working from home. The continued spread of COVID-19 may also slow potential enrollment of clinical trials, reduce the number of eligible patients for our clinical trials and impact our ability to recruit principal investigators and site staff. As a result of the COVID-19 pandemic, including related governmental guidance or requirements, many of our employees are working from home, which may negatively impact productivity and cause other disruptions to our business. In addition, if the pandemic continues, we may experience a decline in sales activities, which may hinder new patient starts and negatively impact our revenue growth.

The extent of the impact of the COVID-19 pandemic on our business and financial performance, including our ability to execute our near-term and long-term business strategies and initiatives in the expected time frame, will depend on future developments, including the duration and severity of the pandemic, which are uncertain and cannot be predicted. In addition, the pandemic could cause an economic slowdown of potentially extended duration and lead to a global depression. Any sustained disruption in the capital markets from the COVID-19 pandemic could negatively impact our ability to raise capital. If the macro-economic disruption continues for pro-longed periods, we may need to raise additional capital and capital may not be available on acceptable terms, or at all. While we have a strong balance sheet as of June 30, 2020, in part due to the completion of a public offering of common stock in May 2020, and currently do not need to raise additional capital, should the opportunity arise to raise capital on favorable terms, we may choose to do so in order to minimize this risk. We cannot predict when the macro-economic disruption stemming from the coronavirus will ebb or when the economy will return to pre-coronavirus levels, if at all.

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Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

~~None.~~Subsequent to the three months ended June 30, 2021, we issued securities that were not registered under the Securities Act and were not previously disclosed in a Current Report on Form 8-K or Quarterly Report on Form 10-Q as listed below. All of the securities discussed in this Item 2 were issued in reliance on the exemption from registration under Section 3(a)(9) of the Securities Act of 1933, as amended (the “Securities Act”).

On July 2, 2021, we issued 74,347 shares of our common stock to certain holders of our 1.375% Convertible Senior Notes due 2024 (the “Notes”) upon the conversion of $6.928 million aggregate principal amount of the Notes by such holders.

On July 8, 2021, we issued 98,428 shares of our common stock to certain holders of the Notes upon the conversion of $9.172 million aggregate principal amount of the Notes by such holders.

On July 19, 2021, we issued 42,035 shares of our common stock to certain holders of the Notes upon the conversion of $3.917 million aggregate principal amount of the Notes by such holders.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

None.

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Item 6. Exhibits


Number						Description
~~1.1~~						Underwriting Agreement, dated May 12, 2020, by and among Insulet Corporation and Morgan Stanley & Co. LLC and J.P. Morgan Securities LLC, as representatives of the several underwriters named therein (Incorporated by reference to Exhibit 1.1 to the Company’s Current Report on Form 8-K filed May 15, 2020).

31.1						Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 by Chief Executive Officer.

31.2						Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 by Chief Financial Officer.

32.132.1						Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, by Chief Executive Officer and Chief Financial Officer.

10.1						Credit Agreement, dated as of May 4, 2021, by and among Insulet Corporation, the lenders and other parties thereto and Morgan Stanley Senior Funding, Inc., as administrative agent and collateral agent (Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed May 5, 2021).

101						The following materials from Insulet Corporation’s Quarterly Report on Form 10-Q for the quarter ended June 30, ~~2020~~2021 formatted in iXBRL (Inline eXtensible Business Reporting Language), as follows:

						(i) Condensed Consolidated Balance Sheets (Unaudited) as of June 30, ~~2020~~2021 and December 31, ~~2019~~2020

						(ii) Condensed Consolidated Statements of Operations (Unaudited) for the ~~Three~~three and ~~Six Months Ended~~six months ended June 30, ~~2020~~2021 and ~~2019~~2020

						(iii) Condensed Consolidated Statements of Comprehensive (Loss) Income (Unaudited) for the ~~Three~~three and ~~Six Months Ended~~six months ended June 30, ~~2020~~2021 and ~~2019~~2020

						(iv) Condensed Consolidated Statements of Stockholders’ Equity (Unaudited) for the ~~Three~~three and ~~Six Months Ended~~six months ended June 30, ~~2020~~2021 and ~~2019~~2020

						(v) Condensed Consolidated Statements of Cash Flows (Unaudited) for the ~~Six Months Ended~~six months ended June 30, ~~2020~~2021 and ~~2019~~2020

						(vi) Condensed Notes (Unaudited) to Consolidated Financial Statements

*						This certification shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liability of that Section, nor shall it be deemed to be incorporated by reference into any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934.Furnished herewith.

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


		INSULET CORPORATION (Registrant)

Date:	August ~~6, 2020~~5, 2021	/s/ Shacey Petrovic
		Shacey Petrovic
		Chief Executive Officer (Principal Executive Officer)



Date:	August ~~6, 2020~~5, 2021	/s/ Wayde McMillan
		Wayde McMillan
		Chief Financial Officer (Principal Financial Officer)

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Years Ending December 31,	(in millions)
2020 (remaining)	$	1.3
2021	2.2
2022	1.6
2023	1.2
2024	1.1
Thereafter	3.5
Total	$	10.9