Inspire(US:INSP)2025-05-05 20:27Financial Performance - Revenue for Q1 2025 was $201.3 million, a 22.7% increase from $164.0 million in Q1 2024[20] - Gross profit for Q1 2025 was $170.6 million, compared to $139.3 million in Q1 2024, reflecting a gross margin improvement[20] - Operating loss narrowed to $1.5 million in Q1 2025 from a loss of $15.2 million in Q1 2024[20] - Net income for Q1 2025 was $3.0 million, a significant recovery from a net loss of $10.0 million in Q1 2024[20] - Revenue for the three months ended March 31, 2025, was $201.3 million, a 22.7% increase from $164.0 million in the same period of 2024[125] - The operating loss for the three months ended March 31, 2025, was $1.5 million, significantly improved from a loss of $15.2 million in the same period of 2024[125] - The net income for the three months ended March 31, 2025, was $2.99 million, compared to a net loss of $10.0 million in the same period of 2024[132] - Gross profit for the three months ended March 31, 2025, was $170.6 million, with a gross margin of 84.7%, slightly down from 84.9% in the prior year[170][175] Cash and Assets - Cash and cash equivalents decreased to $53.9 million as of March 31, 2025, down from $150.2 million at the end of 2024[17] - Total assets decreased to $730.8 million as of March 31, 2025, from $808.4 million at the end of 2024[17] - Total liabilities decreased to $95.1 million as of March 31, 2025, from $118.7 million at the end of 2024[17] - As of March 31, 2025, total cash equivalents and investments amounted to $389.896 million, a decrease from $425.997 million as of December 31, 2024[42][44] - Cash, cash equivalents, and available-for-sale debt securities totaled $414.0 million as of March 31, 2025, a decrease of $102.5 million from $516.5 million as of December 31, 2024[182] Investments and Stock Repurchase - The company repurchased $75.0 million worth of common stock during Q1 2025[25] - The company has a share repurchase program authorized for up to $150.0 million, set to expire in August 2026[95] - An accelerated share repurchase agreement was entered into in November 2024, with a prepayment of $75.0 million for 409,043 shares at an average price of $190.29[96][97] - The company repurchased a total of 442,649 shares during the three months ended March 31, 2025, with an average price of $164.23 per share[214] Research and Development - Research and development expenses for Q1 2025 were $27.8 million, slightly down from $28.9 million in Q1 2024[20] - Research and development expenses are expected to increase as the company develops next generation versions of its Inspire system and expands clinical studies[165] - Research and development expenses include costs related to product development and clinical studies, with prelaunch inventory expensed unless regulatory approval is probable[71] Inventory and Expenses - Total inventories rose to $99,727,000 as of March 31, 2025, compared to $80,118,000 at the end of 2024, with finished goods increasing from $57,688,000 to $71,638,000[53] - Advertising expenses decreased from $25,600,000 in Q1 2024 to $20,900,000 in Q1 2025[76] - Total accrued expenses decreased from $49,814,000 at the end of 2024 to $34,333,000 as of March 31, 2025[62] - SG&A expenses rose by $18.7 million, or 14.9%, to $144.3 million for the three months ended March 31, 2025, primarily driven by a $17.4 million increase in compensation[177] Market and Operational Insights - Inspire Medical Systems continues to focus on expanding its innovative solutions for obstructive sleep apnea, with ongoing development of its proprietary Inspire system[27] - The company plans to fully launch its next generation Inspire system ("Inspire V") in the U.S. in 2025, following FDA approval in August 2024[151] - The company anticipates that some patients and physicians are delaying Inspire therapy until Inspire V is available, which may impact consolidated revenue until the full launch[152] - The company experienced supply disruptions in 2023, particularly related to polyurethane-based stimulation leads, which affected European revenue and consolidated revenue[147] - The global economic environment is facing challenges such as inflation and increased costs, which may lead customers to decrease or delay orders for the company's products[157] Tax and Income - The company recorded income tax expense of $1.2 million for the three months ended March 31, 2025, compared to $0.7 million for the same period in 2024[116] - The company had gross federal net operating loss carryforwards of $51.2 million as of December 31, 2024, which are no longer subject to expiration[117] Employee and Compensation - The company’s matching contributions to the employee retirement plan totaled $1.9 million for the three months ended March 31, 2025[94] - The total stock-based compensation expense recognized for the three months ended March 31, 2025, was $1.9 million, compared to $1.5 million for the same period in 2024[94] - The company has unearned stock-based compensation estimated to be expensed through 2028, amounting to $56.7 million for unvested stock options and $171.9 million for unvested RSUs[109][111] Accounting and Compliance - The company is evaluating the impact of recent accounting pronouncements, including ASU 2023-09 and ASU 2024-03, on its financial statement disclosures[86][87] - The company has not experienced material changes in its critical accounting policies and estimates from those described in its Annual Report[199]