Deborah R. Gordon - Insulet Corp. Patrick J. Sullivan - Insulet Corp. Michael L. Levitz - Insulet Corp. Shacey Petrovic - Insulet Corp.

David Ryan Lewis - Morgan Stanley & Co. LLC Jeffrey D. Johnson - Robert W. Baird & Co., Inc. Matthew Taylor - Barclays Capital, Inc. Michael Weinstein - JPMorgan Securities LLC Margaret M. Kaczor - William Blair & Co. LLC Ryan Blicker - Cowen & Co. LLC Kyle William Rose - Canaccord Genuity, Inc. Tao L. Levy - Wedbush Securities, Inc. Danielle J. Antalffy - Leerink Partners LLC Jayson T. Bedford - Raymond James & Associates, Inc. Suraj Kalia - Northland Securities, Inc. Steven Lichtman - Oppenheimer

Good afternoon, ladies and gentlemen, and welcome to the Insulet Corporation Third Quarter 2017 Earnings Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session, and instructions will follow at that time. As a reminder, this conference call is being recorded. I would like to turn the conference over to your host, Deborah Gordon, Vice President, Investor Relations and Corporate Communications. Deborah R. Gordon - Insulet Corp.: Thank you, Kevin. Good afternoon and thank you for joining us for our third quarter 2017 earnings call. Joining me today are Patrick Sullivan, Chairman and Chief Executive Officer; Shacey Petrovic, President and Chief Operating Officer; and Michael Levitz, Senior Vice President and Chief Financial Officer. The replay of this call will be archived on our website, and our press release discussing our third quarter 2017 results and fourth quarter and full-year guidance is also available in the IR section of our website. Before we begin, I would like to inform you that certain statements made by Insulet during the course of this call may be forward-looking and involve known and unknown risks and uncertainties that may cause actual results to be materially different from any future results implied by such statements. Such factors include those referenced in our Safe Harbor statement, in our third quarter earnings release, and in the company's filings with the SEC. With that, I'll turn the call over to Pat. Patrick J. Sullivan - Insulet Corp.: Thank you, Deb. Good afternoon, everyone, and thank you for joining us in the call today. I'll begin with a brief review of our third quarter performance and the progress we're making on our three key initiatives. Specifically, number one, completing product development on Dash, our next-generation Omnipod technology platform; number two, transitioning to direct distribution in Europe; and three, establishing our U.S. manufacturing operations. Mike will provide more detail on our third quarter financial results and on our guidance for Q4 and full-year 2017, Shacey will then provide comments on our commercial and R&D progress, we'll then open the call up for questions. I'd like to first recognize that November is National Diabetes Awareness Month. We are very proud of what we do every day to simplify life for people with diabetes. The Omnipod provides simple and elegant technology that reduces the burden of managing the disease, improves quality of life, and delivers better health outcomes for patients. Next Monday, we will take part in the Closing Bell ceremony at NASDAQ to increase diabetes awareness. For the third quarter, every area of our business delivered outstanding performance. Total revenue for the third quarter was $122 million, a year-over-year revenue growth of 28% and $8 million above the midpoint of our guidance range. U.S. Omnipod revenue was $70 million, up 17% year-over-year, International revenue was $32.5 million, up 70% year-over-year, and Drug Delivery was $19 million, up 19% year-over-year. Our gross margin was 60.5%, an improvement of 180 basis points from our Q3 of last year, and we remain completely confident in our ability to drive gross margin towards 70% in 2021. As a result of our better than expected performance and our positive outlook for the remainder of this year, we're raising full-year revenue guidance to a range of $456 million to $459 million, a $13 million increase from the midpoint of our previous guidance, and 25% year-over-year growth. During the quarter, we made significant progress on the development of our Omnipod Dash system. Dash is the technology platform for all of our future innovations, including our concentrated insulin programs with Eli Lilly and the Horizon Automated Glucose Control System. Shacey will provide you more commentary on Dash. We continue to drive sustained outstanding improvements on the manufacturing and supply chain, which are positively impacting our gross margin and product quality. Since 2015, the operations team, working closely with our contract manufacturer, has doubled the pod production per day. And now our daily pod production is at an all-time high, ensuring we continue to meet our customers' needs as our installed base continues to grow. Over just the past three years, the ops team has delivered a greater than 75% reduction in scrap, and is focused on providing the highest quality products to every customer, every time, all the time. We are on schedule to establish our new state-of-the-art manufacturing facility in Massachusetts. We held a groundbreaking ceremony several weeks ago with over 400 attendees, including Massachusetts Governor, Charlie Baker, as the keynote speaker. This new facility will provide increased capacity, and importantly, second source redundancy to our current contract manufacturer, all part of our supply chain risk mitigation strategy. We are building a world-class manufacturing facility that will set a new standard in the industry. The first highly automated line is scheduled to be placed in service in the early 2019. We recently announced our decision to transition to direct distribution of the Omnipod system in Europe beginning July 1, 2018. Selling direct rather than through a distributor allows us to be closer to our customer and maintain control over our existing and future markets. This transition will result in international market input for our product development pipeline and a significant improvement in revenue and gross margins. We're excited about this opportunity and have full steam ahead in establishing our European operations. We're pleased with the progress we've made, and we remain confident in our ability to successfully transition the business by the middle of next year. We are well on our way to achieve our 2021 targets of $1 billion in revenue, gross margin approaching 70%, and above market profitability. We are pleased with our accomplishments to date, are excited for the opportunities to continue our strong growth trajectory, and we remain focused on creating shareholder – value for our shareholders. With that, I'll turn the call over to Mike. Mike? Michael L. Levitz - Insulet Corp.: Thank you, Pat. I will review our third quarter results and then discuss our fourth quarter and full-year 2017 guidance. As I review our results, unless otherwise stated, all commentary regarding changes will be on a year-over-year basis. We are very pleased to report third quarter revenue growth of 28%, with revenue of $121.8 million, compared to $94.9 million. All three of our product lines contributed meaningfully to this growth. We exceeded the midpoint of our stated guidance by $8 million, with the majority of the beat coming from International Omnipod, on strong momentum across our European markets, including continued strong growth in newer markets such as France. The remainder of the beat in the third quarter was led by the U.S. Omnipod, also on continued strong momentum. Our gross margin increased over 180 basis points to 60.5%, primarily from improvements we've made over the last year to our manufacturing and supply chain operations, as well as improvements to product quality, offset in part by unfavorable mix due to higher international distributor sales. We are very pleased to reach above 60% for the first time at Insulet, which is a direct result of the team's tremendous execution in driving both quality and efficiency. Our operating expenses increased to $71.6 million, compared to $53.2 million. This increase in spending reflects head count that we've added over the last year to support the growth in our business, such as increased investment in product innovation and our commercial and operational infrastructure. This increase also includes investment to support our assumption in mid-2018 of direct commercial support for Omnipod in Europe, and is consistent with our previously stated plans. We ended the quarter with over $275 million in cash and investment, compared to approximately $300 million at the end of last year. The decrease from last year is a result of our capital expenditures, primarily associated with investments in our U.S. manufacturing project and other investments in global supply chain and contract manufacturing operation to supply the significant growth of our business. Our cash and investments also reflect continued strong days sales outstanding, as well as stable inventory levels even with the growth of our business. We are in a strong financial position, as we continue to make strategic investments in support of our near and longer-term organic growth opportunities. I will now update you on our 2017 outlook. For the full year, given our better than expected revenue to date and strong momentum across the business, we are raising our revenue outlook to be in the range of $456 million to $459 million, up on both the low and high-end from our previous range of $440 million to $450 million. The $13 million raise at the midpoint is largely associated with exceptional Omnipod demand in international markets and continued strong demand in the U.S. market. The revised guidance compares to 2016 revenue of $367 million, and now represents growth of 25% at the midpoint. At a product line level, we expect full year U.S. Omnipod revenue in the range of $267 million to $269 million, representing growth of 17% at the midpoint. We expect International Omnipod in the range of $117 million to $118 million, representing growth of 64% at the midpoint. And we expect Drug Delivery to be approximately $72.5 million, in line with our previously stated revenue range and representing growth of 11%. For the fourth quarter of 2017, we expect revenue in the range of $123 million to $126 million, compared to $103.6 million and representing growth of 20% at the midpoint. At a product line level, we expect fourth quarter U.S. Omnipod revenue in the range of $71.5 million to $73.5 million and representing growth of 15% at the midpoint. We expect International Omnipod in the range of $33 million to $34 million, representing growth of 61% at the midpoint, and we expect Drug Delivery to be approximately $18.5 million. This represents a decline of 6% due to some timing between Q3 and Q4, however, again, on a full-year basis, we continue to expect Drug Delivery revenue to be in line with our previously stated guidance. On gross margin, we are reaffirming our expectation to 2017, full-year gross margin will approach 60%, up significantly compared to our reported 57.5% last year. This reflects the substantial operational improvements we've made, partially offset by the unfavorable mix from faster growing international distributor revenue. We are pleased with the tremendous progress we have made in margin expansion, and we are very confident of reaching our longer-term goal of approaching 70% gross margin. To achieve our revenue growth and profitability goals, we will continue to invest in our business, including commercial, research and development, and infrastructure investment. We expect full-year 2017 operating expenses to increase between 26% and 28% from 2016, which includes initial spending to expand our European infrastructure, and is in line with our previous guidance. As Pat mentioned, our plans to assume direct commercial responsibility over our European Omnipod operations are on track, and represent a tremendous opportunity to drive continued expansion of both revenue and profitability. We continue to expect the transition to a direct business in Europe will drive a material increase in our revenue run rate in the second half of 2018, driven by European end user pricing, which while on average is lower than pricing in the U.S., is approximately 50% higher than our historic distributor pricing. We also expect this to drive an increase in total company gross margin by approximately 400 basis points on a full-year basis, with half of that expected for calendar year 2018, assuming the midyear transition. Lastly, on the strength of our growing business, continued operational improvements, and our exciting innovation strategy, we remain on track to deliver sustainably positive EBIT beginning next year and driving to above-market profitability over the coming years in line with our stated goals and objectives. I will now turn the call over to Shacey. Shacey Petrovic - Insulet Corp.: Thanks, Mike. Third quarter results were once again terrific, with strong momentum heading into the fourth quarter. Our commercial strategies continue to drive robust revenue growth and an increase in our global installed base. The progress we've made with our innovation pipeline is exciting, and I'll share more about that in a moment. And as Pat noted, our manufacturing and operational strategies continue to drive improvements in product quality, across-the-board efficiencies, and expansion of our margins. As a reminder, because of Omnipod's recurring revenue model, installed base growth is the best predictor of revenue growth. And installed base is an estimate because about half of our U.S. customer base and the majority of our international customer base goes through third-party distributors. In Q3, we grew our U.S. installed base approximately 15% year-over-year as expected, and we grew our international installed base more than 60%, exceeding our expectations. Combined, this represents year-over-year growth in our global installed base of approximately 30% as of the end of the third quarter, which drove our strong company revenue growth. As a result of the tremendous growth we're experiencing internationally, we now anticipate growing our worldwide installed base approximately 30% for the full year, up from our prior year-over-year expectation of 25%. We are reaffirming expected growth of 15% in our U.S. installed base, and we are raising our estimate of the international installed base growth to approaching 60% from our prior assumption of 40%. Our U.S. revenue growth continues to be fueled by increasing the footprint of our field sales team, marketing efforts to raise awareness, and our drive to broaden market access. These will be areas in which we continue to invest because they are clearly paying off. We are improving brand awareness, increasing advocacy and utilization among physicians, and because of Omnipod's low upfront cost and product advantages, we are expanding Medicaid access. Bolstering our efforts is the strong and growing body of clinical evidence supporting the many benefits of Omnipod. At the recent European Association for the Study of Diabetes conference, we shared real-world Omnipod user data from almost 39,000 U.S. patients, who also used our data management system Insulet Provided Glooko. The takeaway was clear, Omnipod patients do better than the national average, with an estimated A1c for Podders of 8.1%. This insight could be particularly helpful for payers who include A1c as an important performance measure. We now have more than 50,000 Omnipod customers, well over half of our U.S. installed base, using Insulet Provided Glooko. This enables incredibly rich, large population, real-world data sets to demonstrate the value of Omnipod to payers, clinicians, and to end users. At the same time, we continue to make notable progress on our innovation roadmap, particularly with our Omnipod Dash system. Dash is designed to provide users with an unparalleled ease of use through mobile technology, while the most visible change is the sleek, compact, touchscreen Dash PDM. The most notable change is in what you can't see, the Bluetooth connectivity. This connectivity liberates the data in our PDM and pod to provide all of our Dash customers with unique meaningful benefits. For the payer, this means access to aggregate diabetes and outcomes data on their specific membership populations through their Omnipod Dashboards. For the clinician, this means less time training patients on pump therapy and immediate access to their diabetes data for streamlined office workflow and improved interactions with their patients. And for the patients, this means insulin delivery control at their fingertips, easy access to their pod therapy information on their PDMs or on their mobile phone, and the ability to share their diabetes data with caregivers via our Dash View mobile app. Their Omnipod PDM data will be an app on their phones right where they view their CGM data or their health and fitness data. We are very pleased to report that we have successfully completed our summative (18:17) human factor studies for Dash, and based on early feedback, we are confident our customers will love this new product platform, which will transform the way they manage their diabetes. We are on track to submit our 510(k) to the FDA around the end of this year and anticipate a limited market launch mid next year. This marks a very important milestone for Insulet, since Dash is the platform for our future product innovations, including concentrated insulins and our Horizon Automated Glucose Control System. We continue to make great progress on our Omnipod Horizon development program. We now have 118 patients including pediatrics, adolescents, and adults monitored with our Horizon algorithm. We are currently underway with our third IDE, which is taking place under normal living conditions, in a hotel setting with the patients spending a longer time in our hybrid closed-loop phase. The study results continue to demonstrate that our Horizon algorithm performs very well, and is safe during the day and night across all age groups. Turning to our International business, we have made substantial progress expanding our European infrastructure. We are building a strong foundation for a successful transition of our Omnipod business on July 1 of next year. We are rapidly hiring high caliber talent in Europe to ensure we have the bench strength and expertise to deliver international market expansion over the near and longer term. This past quarter, we focused on key functions such as commercial, IT, quality, and regulatory affairs. We will be ready to assume full control of the business and deliver continuity of care for every Omnipod user and clinician in Europe. In the meantime, we are experiencing rapid growth in our international installed base, with our largest markets including Canada, France, Germany, and the United Kingdom, all contributing to the outstanding installed base growth. Remarkably, we launched in France just one year ago or just about a year ago, and it remains a significant contributor to our international growth, representing about a third of our total European installed base. This change to a direct business model allows us to control our International business, which we see as a strategic imperative, because it will give us better insights to the market needs and ensure that we deliver innovation that supports and best meets those needs. In the near term, based on the difference between our distributor pricing and average customer pricing in Europe, it expands margins and is quickly accretive. And in the longer term, this move means we can accelerate our international expansion and new market entries. This is an exciting opportunity to drive value for Insulet, for our shareholders, and importantly, for our growing global customer base. Lastly, results of our Drug Delivery business remain strong supported by the market's continued adoption of Amgen's Neulasta Onpro kit, which reached 56% of all U.S. Neulasta doses at the end of the third quarter. We remain excited about our partnership with Amgen. And more generally, we remain excited about our prospects of working with pharmaceutical partners for the delivery of other non-insulin therapies that can benefit from the comfort and convenience of our pod. We continue to believe Drug Delivery represents an attractive opportunity for long-term growth. In closing, I am incredibly proud of what our team has accomplished in a relatively short period of time. We have driven improved performance across the board and established a strong foundation for long-term growth and success. With that, I'll turn the call back to Pat. Patrick J. Sullivan - Insulet Corp.: Shacey, thank you very much. Operator, now, let's open the call up for questions.

Thank you. Our first question comes from David Lewis with Morgan Stanley. David Ryan Lewis - Morgan Stanley & Co. LLC: Good afternoon and congratulations on another great quarter. Pat and team, I know it's early, but I thought maybe we could talk a little about your 2018 qualitatively only because this year, there are two, I think, very big things that could impact next year's numbers, one being the Animas customer program that you've announced, as well as these ex-U.S. go direct dynamics. Can you just talk qualitatively about what those two dynamics could mean for next year in terms of relative growth rates? I mean, should investors expect similar sustained growth into 2018? Could we expect acceleration in these markets given those two kind of exogenous events? Then I got a quick follow-up. Shacey Petrovic - Insulet Corp.: Sure. I'll start maybe by addressing the question regarding Animas. We do have a program in place to help educate Animas users that they have options and can transition to Omnipod, and in fact, we've been working with Dexcom, it's been fun to kind of get that out there and get the word out. But just two things to keep in mind, David, is it's not our target segment. So still this quarter, like every quarter, 80% or more of our new customers are coming from MDI. And I don't really anticipate that that's going to change dramatically next quarter or beyond. And the other thing is just a reminder because of the recurring revenue model, any impact that that might have is going to be kind of over time as opposed to in a particular given quarter or even year. I wouldn't anticipate that because it's not our target segment. I'll make one other comment on Ypsomed, just because you mentioned that, I think that transition is going very well. And we feel like we're on track with everything that we obviously just guided to for the end of the year, but I don't think we're ready to give kind of any substantive guidance for 2018. Michael L. Levitz - Insulet Corp.: The only thing I would add to that, and this is Mike, is just as I said and as we said last quarter, we do expect that the go-direct strategy is going to have a material impact on our run rate for the consolidated business because of the change in business model. And so, in the middle of the year, when we go direct in the second half of 2018, we do expect a significant appreciation in revenue because even though the European pricing is lower than the U.S. pricing on average, because our historic run rate is with our – is based upon our historic distributor pricing, the end user pricing will be a 50% – approximately 50% uplift from that. And so that will result in a significant increase even beyond all the volume increase that we've been describing over the last few years here. And a corresponding impact of the revenue growth will be a significant increase in gross margin, we talked about 400 basis points increase from the change in business model on a full-year basis, and so assuming a midyear impact of 200 basis points. For both of those, we expect would drive a change in the business model, but hopefully, we've given you enough to be able to model that effectively. David Ryan Lewis - Morgan Stanley & Co. LLC: It's very helpful, Mike. And then Shacey, just my quick follow-up here. Just thinking about the quarter, U.S. was strong, but the ex-U.S. number was obviously much better than expected. Just give us a little sense relative to your expectations, what changed here into the back half of the year, I mean, how much of this is the sustainability of the traction in France, and perhaps how much of this is less disruption potentially than you expected with the transition or early part of the transition, or how much of this is other markets that are unrelated to France? Thanks so much. Shacey Petrovic - Insulet Corp.: Yeah. I think I would say, it's those first two that you mentioned. Really, the transition has been going smoothly. And so we have less disruption than we anticipated. And we have continued strong growth across the continent, and in particular, still in France. So both of those things are driving kind of the uptick in the guidance for the rest of the year. Michael L. Levitz - Insulet Corp.: And this is Mike again, I'll just add on to that. We did indicate, since our last call, was shortly after we had just announced that we were going to be going direct, that there was potentially some conservatism built into our guidance that we gave last quarter, just because of the number of unknowns related to the transition. We've been retiring that risk, and as a result, the guidance that we're giving now is less conservative. We felt it was realistic before, this is really realistic and reflects the continued growth and momentum in that business.

Our next question comes from Jeff Johnson with Baird. Jeffrey D. Johnson - Robert W. Baird & Co., Inc.: Good afternoon. Thanks for taking the questions. I guess two for me this afternoon as well. One, following up on David's question on Animas, I know you've been running that conversion program, but I just want to confirm maybe Shacey with you or Mike, it's probably unlikely Animas users move before they're out of warranty period, otherwise they'd have to start paying out of pocket. So I just – my guess is, we're not going to see a lot from Animas here in the extreme near term, but also on Animas, I think Dexcom had it right last night, they talked about Animas being a popular pump option with pediatric patients. We're hearing upwards of maybe 5,000 to 10,000 pediatric patients in the U.S. on an Animas pump. Does that at all match with your numbers? And why would I not expect over a couple year period all 5,000 or 10,000 of those pediatric patients to come over to Omnipod? Shacey Petrovic - Insulet Corp.: I think your numbers are in the ballpark similar to ours, Jeff. And I think we would expect some of those customers to come over to Omnipod, but I would just reiterate it's not our target segment. So, in any given quarter or year, we don't get the vast majority of our customers coming from tube pumps if they're already comfortable wearing a tube pump, they're probably going to look at all of their options. Most of our customers come from MDI users. And I would agree that this is a transition that's going to happen over the next two years, as opposed to something that's going to create a big bolus in a given quarter or even a given year. Jeffrey D. Johnson - Robert W. Baird & Co., Inc.: All right. Thanks. And then for my follow-up, I think I've asked you guys something like this before, but after seeing Abbott just win pretty broad approval for Libre with somewhat, I don't know, maybe uninspiring data, it seems like we have another example of the FDA being more and more supportive of giving new diabetes devices to the market or getting them to the market as quickly as possible. So in that context, have you guys had any conversations with the FDA about pathways in which you might be able to accelerate Horizon or get that to the market some point before 2019, especially if we have 6.70 (29:03) on the market as a predicate? Shacey Petrovic - Insulet Corp.: We have regular discussions with the FDA. We've had multiple pre-submission discussions with the FDA tied to Horizon, so we're always discussing how to make our clinical and product development pathway as efficient and effective as possible. Other than that, I can't give a lot of color. But I would say that we've had the same type of support and enthusiasm for Dash as well. And they certainly have been very supportive in us getting a submission ready and in terms of helping us get to market as quickly as we can. Jeffrey D. Johnson - Robert W. Baird & Co., Inc.: Thank you.

Our next question comes from Matt Taylor with Barclays. Matthew Taylor - Barclays Capital, Inc.: Hi, thanks for taking the question, and congrats on a good quarter. So the first question I wanted to ask was, one of your competitors or future ones talked about developing a patch pump for type 2 patients? And maybe at a lower cost launching about a year from now, I was wondering if that's also a market you think you could address, it's not one you talked directly to and whether you think that could encroach on your business at all? Shacey Petrovic - Insulet Corp.: Sure, Matt. I would say, we actually talk pretty frequently about the type 2 market, because our partnership with Eli Lilly on concentrated insulins is really designed to address that market. One of the differences between the customer needs with people who live with type 2 versus type 1 is the volume of insulin that they require. And so, in order to keep the great form factor and the small pod form factor that we have, we've partnered with Eli Lilly to concentrate the insulin and get their U100 and U500 approved out of the pod. So those program – U200 rather and U500 approved out of the pod, so those programs are underway and on track, we've made terrific progress, and I think will really help us address that customer segment very nicely. We've got other elements of that customer or that product platform that will also be very appealing. But then I would just point out that, what's really important about launching a patch pump in the United States or anywhere in the globe is about operational excellence and how well you serve the market. And that's where I think some of the advancements and progress that we've made on the manufacturing operations is such a competitive differentiator, because to really do this well and be able to manufacture high quality, high volume product at the rate that we do, that's the differentiator, and I think that is an area where we've clearly shown we can excel. Matthew Taylor - Barclays Capital, Inc.: That's great perspective. And then maybe secondly, as you'd kind of forced through this international transition, it sounds like you've really put a lot of good brackets in place to be able to execute that smoothly and contractually on the Ypsomed side as well for some protection, but what are the guideposts that you would point us to or investors to look for over the next couple quarters, aside from international growth, to understand how well that's going? Shacey Petrovic - Insulet Corp.: Well, I think this quarter, the 60% installed base growth probably speaks for itself. The business continues to really grow rapidly while we work with Ypsomed to transition next year. We're making great progress. We've been really warmly welcomed by the clinical community in Europe. Over the last, I guess, two months really, we held symposiums and product workshops at EASD in Portugal, EASD (32:39) in Austria and at children with diabetes in the UK, so all over Europe, and our events have been standing room only and clinicians have expressed their – really their sincere support and enthusiasm about us establishing a direct presence in the market. So we're thrilled to be making that happen. I think the best indicator of how we're doing is really looking at the installed base growth. Matthew Taylor - Barclays Capital, Inc.: Great. Thank you.

Our next question comes from Mike Weinstein with JPMorgan. Michael Weinstein - JPMorgan Securities LLC: Thanks and congratulations on another strong quarter. Let me just ask a couple questions. Just on France, what do you think your market share is now? Shacey Petrovic - Insulet Corp.: I would guess, somewhere around 30%, 35% would be my guess. Mike, we said it before, we have less insight into Europe than we do into United States, and even so, we don't generally track market share against other pumps, we're looking at kind of the total opportunity there from a type 1 diabetes standpoint. Michael Weinstein - JPMorgan Securities LLC: Okay. Michael Weinstein - JPMorgan Securities LLC: And I've heard your comment again that I think 80% of your patients are MDI, you've generally said 70% to 80% last couple of years. We got numbers from J&J when they announced they're exiting the business, that basically imply that their U.S. installed base has shrunk by about close to 20,000 patients since the end of 2015. You don't think you've gotten a fair amount of those patients, it would seem that those patients went somewhere, and it doesn't look like Medtronic's business necessarily benefited from it. So, I'm just kind of wondering that their installed base has declined as much as it has over the last year and a half, two years. Where had those patients gone, and are you not getting more of those patients than maybe you think? Shacey Petrovic - Insulet Corp.: Well, I think there's probably those patients included in the 20% or so of our patients that come from pumps. I'm just saying that the vast majority in our target segment is the 80% that come from MDI, and we – really, our strategy and what we consider ourselves and I think what is clearly evident in the numbers is that we are a category grower, not a share taker. That's not our strategy, it's not our approach. Patrick J. Sullivan - Insulet Corp.: And I would just add, Mike... Michael Weinstein - JPMorgan Securities LLC: Okay. But that 80% number, where do you get that from? Shacey Petrovic - Insulet Corp.: We track that, so every new patient that comes on, we get a prescription and categorize and track where they're coming from. Patrick J. Sullivan - Insulet Corp.: And we don't – this is Pat, we don't have visibility on the 20% that are coming from pumps, which pump they're coming from. Shacey Petrovic - Insulet Corp.: That's right. We just know whether they're coming from pump therapy or MDI. Michael Weinstein - JPMorgan Securities LLC: Got you. Okay. Thank you. Shacey Petrovic - Insulet Corp.: Sure.

Our next question comes from Matt O'Brien with Piper Jaffrey.

Hi. Good afternoon. This is JP (35:32) on for Matt. Thanks for taking the question. I wanted to ask on the international strength, I know you had some incentives in place when you negotiated your agreement for the remainder of – through July. Did that go through July, or was it – did it go through the end of this year? I just want to make sure there wasn't some sort of bogey that they had to hit internationally maybe they pulled forward some sales, some clarification there? Shacey Petrovic - Insulet Corp.: No. We don't want – first of all, we track their installed base, right. So that's what I reported out on, and obviously that was very strong. So even independent of their revenue and I think they were roughly in line, but no, there wasn't anything particular that they needed to achieve with this transition this quarter. Patrick J. Sullivan - Insulet Corp.: Yeah. Because their contract goes through June 30 of next year, and so both parties contractually bound by that agreement, there were no modifications to it or anything. Shacey Petrovic - Insulet Corp.: And the incentive is actually tied to the sales that happened 12 months after the termination of the agreement, so...

Okay. It's good to know. And then on the cost side of things, I know you started incurring some costs internationally. And as we all look out in our models, we'll bump up revenue and gross margins starting Q3, Q4 next year. Can you help us walk through maybe break out some of the costs you're already incurring in this quarter and next quarter to ramp, and so here (37:01) we can get on a good run rate for second half of next year? Michael L. Levitz - Insulet Corp.: Absolutely. This is Mike. So, a couple of things, we indicated last quarter in the call where we saw the operating expense run rate would go, and we also raised our operating expense expectations in 2017, and we raised it by about 5 points of growth, and we said that was to reflect the spend this year to really get things off the ground even though we've been planning for this as a contingency for quite some time, we really ramped this up this year. So, about 5 points off of last year's OpEx is roughly $10 million give or take. So I think that's what – it's fair from what we said last quarter that that would indicate for 2017. And what we talked about for 2018 is, we said $45 million to $50 million of operating expense run rate when we get into a full up and running in the middle of the year. The way that's going to work is, we are ramping up now, we will be ramping up more in the first half of next year. And so, we'll be having more of the expenses before we get the pricing and margin that comes once we go direct in the second half of the year.

And then is there any update on Medicare? Patrick J. Sullivan - Insulet Corp.: Sure. This is Pat. We remain very confident that we're going to secure Medicare reimbursement. From my perspective, it's just a matter of time. We have the complete support of many members of Congress, the professional and medical societies. And we remain very confident that we're going to get Medicare reimbursement. I just can't give you an exact time.

Got it. Thank you.

Our next question comes from Margaret Kaczor with William Blair. Margaret M. Kaczor - William Blair & Co. LLC: Good afternoon, guys. Thanks for taking the question. The first one for me is on France. And I'm curious if you guys have any sense of the rate of change and market penetration of comps in general that you've seen since you entered. And how many of those patients that you've seen in France are coming from MDI? Shacey Petrovic - Insulet Corp.: That's a great question, Margaret. Unfortunately, I mean, this is exactly one of the reasons why we feel like it's a strategic imperative to get closer to our international markets, because we don't have this level of market insight that you're asking about in France. We're gaining it as we meet with clinicians, et cetera, and we've got a ton of research underway in preparation for all of this, but I can't give you that insight that you're looking for today. But next year, I probably will or sometime as we get a little bit closer to the transition. Margaret M. Kaczor - William Blair & Co. LLC: But I would assume that you guys do think that you're accelerating the adoption of comps, given the... Shacey Petrovic - Insulet Corp.: Yes. Margaret M. Kaczor - William Blair & Co. LLC: ... success you've had internationally. Shacey Petrovic - Insulet Corp.: Yes. Patrick J. Sullivan - Insulet Corp.: In general, Europe is – the penetration rates are lower than it is in the United States. The attrition rate is also lower than it is in the United States. So it's... Shacey Petrovic - Insulet Corp.: And we have heard from clinicians that there's a large number of patients coming from multiple daily injections to the pod in France. I just don't know the specific numbers. Margaret M. Kaczor - William Blair & Co. LLC: Yeah. And then just as a follow-up maybe to the Animas question, I know Animas wasn't going to be maybe as big of a contributor in terms of patient adds each quarter, but as you focus a little bit on that population, is there any chance that that's going to distract you from typical patient adds, and is there going to be any impact on the P&L? Thanks. Shacey Petrovic - Insulet Corp.: There will not be distraction. Most of this activity is actually handled internally. So the program went out through digital channels from both Dexcom and us. And that has increased our call volume, but most of that work is really handled by the internal team as opposed to the field team, who remain focused on our target segment, which is multiple daily injection users. In terms of impact to the P&L, I don't think there's any impact to the P&L either. Mike, you should confirm that. Michael L. Levitz - Insulet Corp.: Yeah. Really, it's just as what we said from a... Shacey Petrovic - Insulet Corp.: Yeah. Michael L. Levitz - Insulet Corp.: ...guidance perspective. And we think there are a number of opportunities to grow this business, and not only is MDI our traditional grower, but this is a nice opportunity. So it's all a net positive. Shacey Petrovic - Insulet Corp.: And the beauty of a recurring revenue model, because we can get people a low cost or no cost pathway onto the system, because of the low upfront cost.

Our next question comes from Doug Schenkel with Cowen. Ryan Blicker - Cowen & Co. LLC: Hi, this is Ryan on for Doug. Thanks for taking my questions. Maybe starting with one on Horizon. Dexcom, in their call yesterday, talked about having a clear path to getting a factory calibrated version of their G6 sensor on the market by the end of 2018. Is there any chance that you would be able to use that sensor as part of your first Horizon launch, or should we continue to think about it as the once-per-day calibrated G6? Shacey Petrovic - Insulet Corp.: There is a chance and we're working very closely with Dexcom. So as they develop, we'll get our hands on that technology and do what we can to incorporate it and do technical feasibility. But right now, focused on G5 and G6, so once-a-day calibration in terms of the product development program. Ryan Blicker - Cowen & Co. LLC: Got it. And then maybe one on Drug Delivery. Is there anything you can say about progress with your existing Drug Delivery partners? And if not, do you believe one or more of your partners will be in a position to provide a public update in 2018? Thank you. Shacey Petrovic - Insulet Corp.: It's tough to say. I think, unfortunately, we are under very tight confidentiality agreements with our pharmaceutical partners, and these are longer-term programs. There's a lot involved in the clinical and technical feasibility in terms of determining whether or not molecules are suited for the pod, and also if these molecules pass their early clinical endpoints. And so all of that is the work that's underway. We're certainly eager to be able to update everybody on the progress that we're making in a more tangible way. But at this point, we really can't do that, and I don't – I can't tell you today if there's going to be an update in 2018. But nonetheless, I don't want that to be taken as a diminishment of enthusiasm because we really are excited about this business, it's just a longer-term growth driver, and I think if we fast forward five to seven years, it's going to be a significant contributor in terms of a more diverse revenue stream. I just think it's going to be – it takes a while.

Our next question comes from Kyle Rose with Canaccord. Kyle William Rose - Canaccord Genuity, Inc.: Great. Thank you very much for taking the question. Can you hear me all right? Patrick J. Sullivan - Insulet Corp.: Gotcha. Kyle William Rose - Canaccord Genuity, Inc.: I just wanted to dovetail off the previous question about the Drug Delivery there while we're on the topic. I believe on this call last year, on the Q3 call, you talked about somewhere around you have five partnerships that are somewhere along the lines of four to five years to potentially come into market, is that still fair? Obviously, we've got one year down, so maybe it's still three to four years, so we're still – Lilly's still going to be the first partner that hits the market at some point in 2019? Shacey Petrovic - Insulet Corp.: That's true of Lilly being the first partner, and I think it's generally true of the pipeline. The reason why we don't really give specific numbers of deals is not because we are not trying to be transparent, it's just that they're not – it's not really all that helpful or that indicative. You could have a partner like Amgen, which is a commercial product and a large scale, more near-term opportunity, or we could have a dozen really early stage technical feasibility agreements that have a lot more risk associated with them in terms of whether or not they need their endpoints and actually become revenue-generating opportunities for us. So we didn't want to mislead all of you in terms of the number of deals as they get larger versus the risk/reward of that, and that's why we stopped giving that insight, but generally, still a number of deals, still Lilly be the first and we're looking forward to updating everybody in terms of the progress that we make as soon as we can become public with these partnerships. Kyle William Rose - Canaccord Genuity, Inc.: Great. I appreciate the extra color there. And then two quick questions, one, any expectation, obviously, you're building out a major infrastructure internationally to support that transition. But you've got a major new product launch with Dash coming in mid-2018. Just any expectations for investments in the U.S. operations, feet on the street clinical reps, so we think about exiting 2017 and in the first half of 2018 to start for the launch? And then secondarily, can you just give us a refresh on the timelines for Horizon? You talked about the third IDE now, when can we expect (46:03) get approval? Shacey Petrovic - Insulet Corp.: Sure. So in terms of increasing the sales footprint, I mean, we're always evaluating that, we're about a year out from when we first – when we last expanded the sales force and so that's approaching productivity in exactly where we expected to be. And so, we're always evaluating that, and I don't think we're prepared to exactly give guidance on the key investments in 2018, but certainly, we'll make sure that we are appropriately, commercially resourced for a successful launch of Dash in 2018, but we'll give you more color on that in February. And then I think the other question was around Horizon timing. We're on track with our clinical development just as we expected. And as we do, as we did with Dash and we do with all of our development programs, we're going to review the data that comes out of this IDE, and any insights that come in and we'll adjust accordingly. But so far, it's going very well, progressing nicely, and we're excited about its performance. So no change in terms of end of 2019, early 2020 in terms of the guidance at this point, but I would just point out, two years out, so we're working hard and we're going to keep you guys updated as we make progress. But over the next couple of years, we're going to bring really meaningful innovation to the market with Dash and with concentrated insulin. I mean, it's really – Dash is really a giant leap forward with mobile capabilities and serious user experience enhancements, and we're really excited about that. For the first time ever, people are going to be able to see and use their Omnipod data on their mobile phone, and payers are going to get data analytics, and physicians, they're going to get population analytics in a way that we hadn't before, so we're really excited about that in the meantime. And the other thing that's happening, just as it relates to Horizon, which is I think something that could potentially impact how we think about the program is, we're learning a lot in the market about the needs for automated insulin delivery, what it takes to launch these systems really effectively, how to train users and clinicians efficiently, and how to get market access. So there's just a lot of ground that is being hoed right now, frankly by another, and we're really fortunate to be able to take those lessons and incorporate them into our program. Kyle William Rose - Canaccord Genuity, Inc.: Great. Thank you very much for taking the questions. Shacey Petrovic - Insulet Corp.: Thanks.

Our next question comes from Tao Levy with Wedbush. Tao L. Levy - Wedbush Securities, Inc.: Great. Thanks. Good afternoon. (48:36). Shacey Petrovic - Insulet Corp.: Hey, Tao. Tao L. Levy - Wedbush Securities, Inc.: Hey. Maybe the first, you talked about how you've hosted some events already in Europe. Was that in coordination with Ypsomed, or are you guys kind of just – you're doing these events on your own to generate interest? Shacey Petrovic - Insulet Corp.: Well, I guess, coordinated, meaning, of course, they knew we were doing that and I think they were in attendance of all, if not most of those events, but no, we didn't actually kind of fund them and execute them together. Tao L. Levy - Wedbush Securities, Inc.: Okay, so I mean, is it possible that some of the growth that you're seeing internationally is the result of additional marketing events that now both parties are reporting on? Shacey Petrovic - Insulet Corp.: I don't think so. I think those – first of all, most of those happened in the last month. So, I don't think they're... Tao L. Levy - Wedbush Securities, Inc.: Okay. Shacey Petrovic - Insulet Corp.: ...driving significant – and they were clinician-oriented with the exception of one that happened last week, they were clinician-oriented events. (49:36) Patrick J. Sullivan - Insulet Corp.: Just getting enough to chat, right. Shacey Petrovic - Insulet Corp.: Yeah. Patrick J. Sullivan - Insulet Corp.: So we're new into the European market, and I think hosting those types of events gives us access and face time with clinicians and patients. Tao L. Levy - Wedbush Securities, Inc.: Yeah. Got you. And then just any update on France on the reimbursement front? I thought there's a chance that they might reduce reimbursement to there. And if they do, will you lower your sales price to Ypsomed, so that they'd continue to be incentivized to sell the product there? Shacey Petrovic - Insulet Corp.: Our pricing to Ypsomed is an aggregate across the continent. So I don't think we would lower it... Tao L. Levy - Wedbush Securities, Inc.: Okay. Shacey Petrovic - Insulet Corp.: ...because of (50:17) market, but there's – we feel as if reimbursement is in good shape there. So... Tao L. Levy - Wedbush Securities, Inc.: Okay. Thank you. Shacey Petrovic - Insulet Corp.: You're welcome.

Our next question comes from Danielle Antalffy with Leerink Partners. Danielle J. Antalffy - Leerink Partners LLC: Hey, good afternoon, guys. Thanks so much for taking the question, and congrats on another great quarter. Shacey Petrovic - Insulet Corp.: Thanks, Danielle. Danielle J. Antalffy - Leerink Partners LLC: No problem. Two quick questions. One on the U.S. Omnipod business, one on International. So first on the U.S., Shacey, you still are outperforming at least our expectations and I think consensus expectations in the U.S. What are you seeing in that business? It sounds like the installed base grew as you expected. So is it higher utilization, are you getting higher ASPs, is the distributor mix changing, what's going on there that's driving some of the better than expected performance? Shacey Petrovic - Insulet Corp.: I'd say there's incremental improvements across kind of all of those things. Net utilization or so (51:12), I don't think we see users using more pods in a given time period. But we continue to see healthcare practitioner utilization rates improve. We continue to see great growth on the installed base and likely moving some needle on attrition, although it's an estimate and I couldn't give you a specific there. But we're just thinking great progress on market access and product quality and resulting improving the customer experience. So that's – and then we've had some positive channel mix, too, so all of that is driving continued favorability with that business. Danielle J. Antalffy - Leerink Partners LLC: Got it. That's helpful. And then shifting to International, and when you guys do go direct there, I think the last country where you went direct in a similar manner, correct me if I'm wrong, was Canada? And... Shacey Petrovic - Insulet Corp.: Yeah. Danielle J. Antalffy - Leerink Partners LLC: ...I'm wondering and you highlighted that, today, is the strong growth driver. So I'm wondering if you could give some color on how you saw the installed base growth accelerate in Canada, and whether that might be a proxy for what we could see when you take over in Europe. Thanks so much. Shacey Petrovic - Insulet Corp.: Sure. Yeah, Canada for us has been a terrific success. We bought that distribution back from GSK now, I guess, two years ago, little over two years ago. And we've just seen the market really step function change and our growth in terms of new product or new patient starts there, and a really strong team, really smooth transition of that business. So we did view Canada very much as kind of a indicator of can we do this, and how would we do this, and so I think we've got a great blueprint there in terms of how we're going to successfully transition the markets in Europe. I think the other thing is, the markets in Europe are very discrete. We've said it before, but maybe not on this call yet, there's really four major markets that account for 70-plus percent of the business, and when you add the Nordics, then you're up to almost 95% of the business. So it's a really concentrated business, and several of those markets are served by third-party distributors, and so just a pretty straightforward, discrete business that we need to transfer, but Canada was certainly proof in principle that we can do this, and we know how to do it successfully and ensure patient continuity of care. Danielle J. Antalffy - Leerink Partners LLC: All right. Thanks so much. Shacey Petrovic - Insulet Corp.: Thanks, Danielle.

Our next question comes from Jayson Bedford with Raymond James. Jayson T. Bedford - Raymond James & Associates, Inc.: Good afternoon and congrats on the progress. So, just a couple, on the international growth, you grew at north of 20% quarter-on-quarter in Europe over the summer months, and it seems like there's always a sequentially lift in the international business in 3Q, but this quarter certainly was more pronounced, it was off a larger base. So, my question is, were there any new countries that Ypsomed sold to in the third quarter here, or was there any new reimbursement that was added that could kind of explain the sequential jump? Shacey Petrovic - Insulet Corp.: No, Jayson, there were no new countries added, and we don't anticipate entering into any new countries until after we have transitioned the business in Europe, continued strong growth in some of our newer countries like France, and then just really strong growth across the continent in some of the countries that I mentioned, but no – nothing changed in terms of the market dynamics that drove that. Jayson T. Bedford - Raymond James & Associates, Inc.: Okay. And can you remind us when did Ypsomed start selling Omnipod in France? Michael L. Levitz - Insulet Corp.: It was the middle of last year. This is Mike. It was... Shacey Petrovic - Insulet Corp.: July? Michael L. Levitz - Insulet Corp.: Yeah. It was the – I think towards the end of Q2 roughly. Shacey Petrovic - Insulet Corp.: Yeah. Michael L. Levitz - Insulet Corp.: I mean it really materially impacted – the significant part of the growth really happened in the latter half of the year and then just continued to accelerate through the beginning of this year. Shacey Petrovic - Insulet Corp.: Yeah. Jayson T. Bedford - Raymond James & Associates, Inc.: Okay. And just as a follow-up, the Drug Delivery business in the fourth quarter, the implied guidance is down year-over-year, quarter-on-quarter. You mentioned, Mike, something around the timing of orders. Can you just explain what went on there, and then also, is this a segment that you would expect to return to growth in 2018? Michael L. Levitz - Insulet Corp.: Well, I think it's fair to say consistent – there's nothing new in terms of our description of the Drug Delivery business in that over the last couple years, we've said that we work with – Amgen is the largest piece of it. We work with them on their forecast to try and even out the production throughout the year, it's not a perfect science, there's always timing that works with the timing of shipments between quarters, we saw that last year between Q3 and Q4, we saw it this year between Q3 and what we expect for Q4. The guidance for the year has not changed at all. So there's just puts and takes, it's not a perfect science in terms of getting it even by quarter, but the guidance we gave at the beginning of the year, and we've confirmed here, implies just over $18 million a quarter if you spread it perfectly even, which is pretty much in line with what we're saying for the fourth quarter. So there's really nothing to speak of there. As it relates to 2018, we'll be giving the guidance for that in February, but what I will say about 2018 is just we're very, very pleased with the momentum that we have this year, and we're very excited going into next year, so we're looking forward to February.

Thank you. Your next question comes from Suraj Kalia with Northland Securities. Suraj Kalia - Northland Securities, Inc.: Good afternoon, everyone. Congrats on an excellent quarter. So, Pat and Shacey, let me – for either of you, let me start out. If Libre has issues within the hyperglycemic range as most of the data seems to indicate, would that prevent you all from creating an Omnipod integrated with Libre? And the reason I ask is, we know the numbers for Libre in Europe. I think, so you guys are pretty well aware of the replacement claim they have in the U.S. Just curious if that's on the radar screen if it's even a possibility, what makes sense or what doesn't make sense with such a configuration? Shacey Petrovic - Insulet Corp.: I think you have to ask what does integration mean. We made a strategic decision to kind of go to the mobile phone and really put our data on the mobile phone because all of our customers and all of our market research was indicating that that's where people really wanted their data. It's where, for example, in Europe, customers are viewing and using their Libre data, and it's also where everybody in the United States using G5 and most of the people in Europe using G5 are also going for their data. So, our kind of strategic rationale was put Omnipod on the phone, give our users an integrated experience, so that they can view their Omnipod data right where they view whatever sensor data that they're using and whatever generation of that sensor data that they're using. And so, that's been our approach and I think we're really excited about Dash starting to enable that user experience for our population. We do know in Europe that there are plenty of Omnipod users who are also using Libre and having a great experience. And so, we know that that's happening today, people are really getting a good user experience with both of those products. Suraj Kalia - Northland Securities, Inc.: And Shacey, you mentioned about Dash, am I right in saying that there should not be any DME-based reimbursement issues in some of the criteria that are popping up on the CGM side in terms of the receivers and seeing things on the PDDA (59:06) or your smartphone, those kind of issues are not there on the pump side. Am I right in saying that? Shacey Petrovic - Insulet Corp.: I think that issue that you're describing is primarily tied to Medicare DME reimbursements, and we do not – until Pat secures it, we do not have Medicare reimbursement, so we don't have that problem. Patrick J. Sullivan - Insulet Corp.: Thanks for the dig. No, we were going after either Medicare Part B or Part D, and I think the Omnipod fits more nicely into the Medicare Part D, but we're happy with either one of those reimbursement schemes from CMS and are prepared to deal with it if we need to.

Thank you. Our last question comes from Steven Lichtman with Oppenheimer. Steven Lichtman - Oppenheimer: Thanks. Hi, guys. On the $45 million to $50 million OpEx investment run rate o-U.S. to go direct, how many salespeople does that get you to approximately in comparison what Ypsomed has today on the ground, and where does that feet on the street need to go to in your view over the next few years? Michael L. Levitz - Insulet Corp.: This is Mike. I'll speak to that, and Shacey can add anything if she'd like obviously. So one thing that's really important to understand, and Shacey alluded to this in her comments, about the markets that we're in in Europe. First of all, they're very concentrated, and second of all, they're different from one another. And so, as an example, in France and in a few other markets, you're really dealing in France, so let me call that one out specifically. You're dealing with home health providers. And so, you're not allowed to interact directly with patients, or I should say to sell directly to patients, and so the go-to-market strategy is very different than where you might be, than what you'd see in the United States or what you might see in Canada from a go-to-market. So the number of people you need to have is different. And because we're concentrated in a few core markets, we are in multiple other markets in Europe, much smaller in nature, and those we may continue to use distributors in those markets. So, in terms of the number of people that we might have by country, it really is going to vary based upon the needs in that country. Shacey Petrovic - Insulet Corp.: Yeah. I think Mike is right on. The only thing I would add is, we're going to continue as that business continues to grow as we enter into new markets, we will continually evaluate just as we have in the United States what is the right commercial footprint, so that we can best support that growth and best support our customer base. Steven Lichtman - Oppenheimer: Great. Thanks for that. And then, sorry, I just want one quick clarification. Is any of the $45 million to $50 million here in 2017, or is that separate from some of the stand-up costs you've started on? Michael L. Levitz - Insulet Corp.: So we are having some of the recurring spending starting in 2017, as we've said, we've been establishing operations in Europe, and that will be part of the $45 million to $50 million. But they're also our startup costs. Most of the startup costs, we currently estimate them as we said on the last call, to be about $10 million, most of those will probably be in the first half of 2018. The numbers this year are starting, but they are much smaller in nature. Steven Lichtman - Oppenheimer: Got it. Thanks, Mike. Thanks, Shacey.

And I'm not showing any further question at this time. I would like to turn the conference back over to Patrick Sullivan. Patrick J. Sullivan - Insulet Corp.: Thank you, operator. In closing, I am absolutely thrilled with the outstanding performance this quarter and very proud of the track record of the team of strong quarter-over-quarter growth. The team is dedicated to improving the customer experience, raising the bar on product quality, delivering actual (01:02:47) operational excellence, and creating an organization for long-term success. I'd also like to thank the Insulet employees for their hard work and dedication to ease the burden and improve the lives of people living with diabetes and other diseases. Thank you for joining us on the call today, and we look forward to speaking with you at our fourth quarter earnings call in February.

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