Financial Data and Key Metrics Changes - Fourth quarter revenue increased by 12% to $269 million, while full year revenue rose by 14% to $912 million, primarily driven by growth at existing centers and new center additions [18] - Fourth quarter net income per diluted share increased by $3.51 to $4.66, and full year net income per diluted share increased by $3.09 to $4.89 [18] - Fourth quarter adjusted net income per diluted share increased by $0.51 to $1.65, and full year adjusted net income per diluted share increased by $0.80 to $2.42 [19] - Operating cash flow for the fourth quarter was $52 million, totaling $117 million for the full year [19] - The company ended the quarter with $405 million in cash and investments, allowing for continued investments in profitable growth [19] Business Line Data and Key Metrics Changes - The Inspire 5 system demonstrated superiority over Inspire 4, with a significant reduction in surgical time and improved inspiratory overlap, leading to a 79.5% responder rate in the Singapore study [11] - Approximately 10,000 Inspire 5 procedures were performed in 2025, providing a basis for professional reimbursement [9] - The company is nearing completion of manufacturing the Inspire 4 systems but has sufficient inventory for centers that may continue using it [9] Market Data and Key Metrics Changes - The company is actively engaging with key government agencies and physician societies regarding the coding of the Inspire 5 procedure, transitioning to CPT code 64582 with a -52 modifier [6][7] - The coding landscape is expected to impact physician willingness to perform the Inspire 5 procedure, potentially limiting the number of cases [8] - The WISeR program, requiring prior authorization for Medicare cases in six pilot states, has affected procedures in the first quarter [13][14] Company Strategy and Development Direction - The company plans to focus on short and long-term initiatives to address reimbursement challenges and drive consistency across the country [8] - A new CPT code is being pursued for long-term reimbursement clarity, with the goal of minimizing reductions associated with the -52 modifier [10][32] - The company aims to enhance patient access to Inspire therapy through training advanced practice providers and certifying additional surgeons [15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the Inspire 5 system's effectiveness and the ability to work with payers to minimize reimbursement reductions [10][102] - The company revised its full year revenue guidance for 2026 to a range of $950 million to $1 billion, reflecting expected impacts from coding uncertainty [20] - Management anticipates sequential improvement in revenue and net income throughout 2026, with the fourth quarter expected to have the highest levels of revenue and profit [24] Other Important Information - The company received FDA approval for 3 Tesla MRI compatibility, enhancing the product's appeal [14] - The Inspire 6 product development program will include features for sleep detection and auto activation, aimed at maximizing therapy adherence [15] Q&A Session Summary Question: Clarity on physician fee with Gen 5 using the 82 code and -52 modifier - Management indicated that clarity on the physician fee is expected as they work with MACs and commercial payers to drive consistency [30] Question: Pathway forward for Gen 5 and pursuing a dedicated code - Management confirmed the pursuit of a new CPT code, emphasizing that the -52 modifier is not a long-term solution [32] Question: Specifics on revenue guidance revision related to reimbursement landscape - Management clarified that the primary reason for revenue reduction is coding uncertainty, with the WISeR program causing some disruption [38] Question: Feedback from physicians regarding the -52 modifier - Management noted that most physicians are in private practice, and those in academic centers are less impacted by the fee reduction [40] Question: Impact of the WISeR program on procedures - Management acknowledged the challenges posed by the WISeR program but expressed confidence in their centers' preparedness for audits [90] Question: Expectations for commercial payers and coding transitions - Management indicated that while commercial payers currently allow billing under 64568, they expect a transition to 64582 with the -52 modifier over time [73]

Financial Data and Key Metrics Changes - Fourth quarter revenue increased by 12% to $269 million, while full year revenue rose by 14% to $912 million, primarily driven by growth at existing centers and new center additions [16] - Fourth quarter net income per diluted share increased by $3.51 to $4.66, and full year net income per diluted share increased by $3.09 to $4.89 [16] - Fourth quarter adjusted net income per diluted share increased by $0.51 to $1.65, and full year adjusted net income per diluted share increased by $0.80 to $2.42 [17] - Operating cash flow for the fourth quarter was $52 million, totaling $117 million for the full year [17] - The company ended the quarter with $405 million in cash and investments, allowing for continued investments to drive profitable growth [17] Business Line Data and Key Metrics Changes - The Inspire 5 system demonstrated superiority over Inspire 4, with a significant reduction in surgical time and improved inspiratory overlap, leading to a 79.5% responder rate in the Singapore study [9][10] - Approximately 10,000 Inspire 5 procedures were performed in 2025, providing a basis for professional reimbursement [7] - The professional fee for CPT code 64568 is approximately 10% less than the reimbursement for CPT code 64582 used for Inspire 4 procedures [7] Market Data and Key Metrics Changes - The company is actively engaging with key government agencies and physician societies regarding the coding of the Inspire 5 procedure, with expectations of transitioning to CPT code 64582 with a -52 modifier [4][5] - The WISeR program, requiring prior authorization of Medicare cases in six pilot states, has begun affecting Medicare patient procedures in the first quarter [12] Company Strategy and Development Direction - The company is focused on developing a new CPT code for the Inspire 5 procedure, with clarity on coding and reimbursement expected to enhance patient care [8][13] - The strategy includes training advanced practice providers, certifying additional surgeons, and driving the adoption of Sleep Sync and digital tools to enhance patient access to Inspire therapy [14] - The company plans to transition the existing Inspire 4 IPG line to Inspire 5 later in 2026, ensuring stable product inventory throughout 2026 [10] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenges posed by the coding of the Inspire 5 procedure and the potential impact on physician willingness to perform the procedure due to reduced professional fees [6] - The company revised its full year revenue guidance for 2026 to a range of $950 million to $1 billion, reflecting the expected impact from coding uncertainty [18] - Management expressed confidence in the long-term growth potential and the strategies in place to drive stakeholder value [15] Other Important Information - The company completed $50 million in share repurchases during the fourth quarter, totaling $175 million for the full year [17] - The company received FDA approval for 3 Tesla MRI compatibility, enhancing the product's appeal [12] Q&A Session Summary Question: What is the expected clarity on the physician fee with Gen 5 using the 82 code and the -52 modifier? - Management indicated that clarity will come as they work with MACs and commercial payers to minimize the reduction in professional fees [25] Question: What is the pathway forward for Gen 5 and the pursuit of a dedicated code? - Management confirmed the pursuit of a new CPT code, emphasizing that the -52 modifier is not a long-term solution [27] Question: How does the WISeR program impact revenue guidance? - Management clarified that the primary reason for revenue reduction is the coding uncertainty, with the WISeR program causing some disruption but not the main issue [29] Question: What percentage of physicians are salary-based versus RVUs? - Management noted that a majority of physicians are in private practice, with academic centers being salary-based, which mitigates the impact of professional fee reductions [32] Question: How does the company plan to manage the impact of the WISeR program? - Management expressed confidence in their ability to navigate the challenges posed by the WISeR program due to their history of working with Medicare [54]