Inspire(US:INSP)2023-05-02 20:06Financial Performance - For the three months ended March 31, 2023, the company generated revenue of $127.9 million with a gross margin of 84.4%, compared to revenue of $69.4 million and a gross margin of 85.6% for the same period in 2022[122]. - Revenue for the three months ended March 31, 2023, increased by $58.5 million, or 84.3%, to $127.9 million compared to $69.4 million for the same period in 2022[143]. - U.S. revenue was $124.5 million, an increase of $58.1 million, or 87.4%, driven by increased utilization and market penetration[145]. - Gross profit rose to $108.0 million, an increase of $48.6 million, or 81.9%, with a gross margin of 84.4%[147][148]. - Operating loss for the three months ended March 31, 2023, was $19.5 million, compared to a loss of $16.1 million in the same period in 2022[147]. Research and Development - The company has invested significantly in research and development, including FDA approvals for pediatric patients with Down syndrome and expanded MRI scan conditions for Inspire therapy[123]. - Research and development expenses increased by $13.6 million, or 115.0%, to $25.5 million, primarily due to higher compensation and ongoing development costs[149]. - The company plans to continue capital expenditures for production equipment and the development of new technologies, including the next generation Inspire neurostimulator[159]. Operational Expansion - The company activated 68 new centers, bringing the total to 973 U.S. medical centers implanting Inspire therapy as of March 31, 2023[126]. - The company has created 17 new U.S. sales territories, bringing the total to 242 as of March 31, 2023[126]. - Selling, general and administrative expenses are expected to increase as the company expands its commercial infrastructure and headcount[139]. Financial Outlook - The gross margin is expected to be in the range of 83% to 85% in 2023, influenced by higher costs of certain component parts and price increases for U.S. customers[135]. - The company anticipates further increases in R&D and SG&A expenditures in 2023, which may exceed revenue growth[158]. - The company expects to incur net losses for the next several years and may require substantial additional funding[127]. Cash Flow and Liquidity - Net cash used in operating activities was $1.3 million, with a net loss of $15.4 million and non-cash charges of $19.2 million[164]. - As of March 31, 2023, cash, cash equivalents, and available-for-sale securities totaled $452.1 million, an increase of $0.6 million from December 31, 2022[154]. - Cash, cash equivalents, and investments as of March 31, 2023, were maintained with financial institutions believed to have sufficient liquidity, although cash balances exceeded insured limits[175]. - Net cash used in investing activities for Q1 2023 was $3.8 million, primarily for purchases of property and equipment[167]. - Net cash provided by financing activities for Q1 2023 was $5.6 million, including $7.4 million from stock option exercises[168]. - There have been no material changes to short-term and long-term cash requirements under contractual obligations since the last annual report[170]. - A hypothetical 1% increase in interest rates would have impacted interest income by approximately $5.2 million for Q1 2023[173]. Supply Chain and Market Conditions - The company experienced supply disruptions due to reliance on single-source suppliers, but managed to avoid significant inventory issues[119]. - The company anticipates continued inflationary pressures impacting labor and raw materials, which may affect customer orders[128]. - Selling, general and administrative expenses rose by $38.4 million, or 60.4%, to $102.0 million, driven by increased headcount and marketing initiatives[150].