• Q1 adjusted EBITDA margin of 9.9% was impacted by 230 basis points from accelerated investments and a non-operational FX remeasurement charge, with additional unfavorable FX movements affecting operational performance.

• Free cash flow was a use of $90 million in Q1, driven by separation and standalone build-out activities, though excluding these items, it was positive.

• The extra week in the fiscal calendar contributed 4-6 points to Q1 growth, meaning underlying growth was lower at low double digits, which may not be sustainable in Q2.

• Simplera sensor currently carries lower margins than legacy sensors, and while yields are improving, the mix impact continues to pressure gross margins in the near term.

• Potential for patient deferrals ahead of the MiniMed Fit patch pump launch, as patients may wait for the new form factor, which could impact near-term pump sales.

• Dependence on successful execution of TSA exits and standalone capabilities, with 17 of 160 TSAs exited so far, posing operational risks during the transition.

Q & A Highlights

Q: What are the key updates on the pipeline programs, specifically MiniMed Fit, Vivera, and the next-generation sensor? A: Que Dallara, CEO, provided several significant pipeline updates: MiniMed Fit's 510(k) filing was completed ahead of schedule, with a full U.S. launch expected by summer 2027; enrollment in the Vivera fully closed-loop algorithm U.S. pivotal trial was completed ahead of schedule, with a U.S. launch expected in the second half of calendar 2027; and the next-generation extended wear sensor received IDE approval from the FDA, with a pivotal trial set to begin in October. Additionally, MiniMed Flex received CE mark approval ahead of schedule, with a European launch expected in November.

Q: Can you provide more detail on the Q1 financial results and the factors impacting adjusted EBITDA margin? A: Chad Spooner, CFO, reported Q1 revenue of $843 million, up 15.8% organically, with U.S. growth of 13.1% and international growth of 16.9%. Adjusted EBITDA was $83 million, a margin of 9.9%. This included an approximate 230 basis points impact from two specific items: an $8 million pull-forward of planned investments (90 bps impact) and a $12 million non-operational FX remeasurement charge (140 bps impact). Excluding these items, adjusted EBITDA margin would have been 12.2%. The company reaffirmed its full-year adjusted EBITDA margin guidance of approximately 16%.

Q: How is the launch of MiniMed Flex performing in the U.S., and what is driving its success? A: Que Dallara, CEO, stated that the U.S. launch of MiniMed Flex, which began shipping in late June, has been very successful. U.S. new pumps sold increased by over 20% year-over-year, with the majority of Flex sales going to MDI patients new to pump therapy, followed by competitive conversions. The company also saw a 24% increase in new MiniMed prescribers. The success is attributed to the product's smaller, more discreet form factor, 300-unit insulin reservoir, seven-day extended infusion sets, and the clinically validated SmartGuard algorithm.

Q: What is the company's strategy for the Type 2 diabetes market, and what are the trends in adoption and retention? A: Que Dallara, CEO, noted that approximately 40% of new U.S. starts come from Type 2 patients, a trend that continued in Q1. Retention is improving across both Type 1 and Type 2 populations, driven by product innovations like larger reservoirs and longer wear times, as well as programs like StartRight and Stay Right. Real-world data published on over 6,500 Type 2 patients using the SmartGuard algorithm showed they achieved an average time in range well above ADA guidelines without bolusing, with those using recommended settings achieving 82% time in range.

Q: How is the international business performing, and what is driving growth in that region? A: Que Dallara, CEO, reported international organic growth of 16.9%, with Western Europe, the largest international market, growing in the high teens. Growth was driven by increased availability of new sensors, with Simplera sensor supply tripling year-over-year. The European commercial launch of the Instinct 15-day sensor began in July, leading to significant increases in pump sales, including over 50% growth in the U.K. and over 20% growth in France. The company also had its first full quarter of the European launch of MiniMed Go, resulting in several MDI tender wins.

Q: What is the company's updated financial guidance for fiscal 2027? A: Chad Spooner, CFO, raised the fiscal 2027 organic revenue growth outlook to approximately 10.5%, up from prior guidance of approximately 10%. This includes the expected one to 1.5 percentage point benefit from the Q1 extra week. The company reaffirmed its adjusted EBITDA margin guidance of approximately 16%. The increased revenue outlook is supported by accelerating U.S. growth, strength in international markets, and successful product launches.

Q: Can you elaborate on the cash flow performance and the impact of separation activities? A: Chad Spooner, CFO, reported that Q1 operating cash flow was a use of $49 million, and free cash flow was a use of $90 million. However, separation and standup-related activities consumed $111 million of cash during the quarter. Excluding those items, the company generated $21 million of positive free cash flow. The company ended the quarter with approximately $207 million of cash, no debt, and an undrawn $500 million revolver. Cash generation is expected to improve meaningfully as separation activities roll off.

Q: How is the company thinking about the launch capacity for MiniMed Fit, and what is the path to approval? A: Que Dallara, CEO, stated that the company is preparing for the commercial launch of Fit and is running multiple scenarios to be ready for early approval. They are planning for additional capacity beyond the previously stated 20,000 patients at launch. Regarding the approval timeline, the company cannot predict the agency's process but is hopeful for early approval and will be ready to launch commercially as soon as approval is received. Chad Spooner, CFO, confirmed that the $162 million milestone payment for Fit is not included in the fiscal 2027 forecast.

Q: What are the expectations for the European launch of MiniMed Flex, and how might it impact the business? A: Que Dallara, CEO, stated that the European launch of MiniMed Flex, expected in November, will be similar to the U.S. experience, with plenty of capacity and a rollout in waves of countries. The launch will initially be with the Simplera sensor, followed by Instinct. Chad Spooner, CFO, added that waiting mode has been incorporated into the OUS forecast, but strong momentum in certain Western European countries from Instinct adoption is helping offset any potential deferrals.

Q: How is the company addressing competitive pressures in the international market? A: Que Dallara, CEO, expressed confidence in the company's competitive position internationally, citing strong new pump starts in contested markets like France (up 20%) and the U.K. (up 50%). The company believes its new products, including the MiniMed Flex pump and new CGM sensors, will perform well even in competitive markets. The company's commercial infrastructure, reimbursement capabilities, and clinical evidence

For the complete transcript of the earnings call, please refer to the full earnings call transcript .