Core Insights - Inspire Medical Systems reported second-quarter earnings of 45 cents per share, exceeding analyst consensus estimates of 21 cents per share, with quarterly sales of $217.086 million, also surpassing the consensus estimate of $214.480 million [1][2] Financial Guidance - The company lowered its FY2025 GAAP EPS guidance from a range of $2.20-$2.30 to $0.40-$0.50 and reduced sales guidance from $940 million-$955 million to $900 million-$910 million [2] Product Launch and Market Reaction - The full launch of the FDA-cleared Inspire V system in the U.S. is highlighted as a significant milestone, with positive feedback from surgeons and patients regarding the simplified procedure and patient outcomes [3] - Following the earnings announcement, Inspire Medical Systems shares fell by 40.6%, trading at $77.14 [3] Analyst Ratings and Price Targets - Multiple analysts adjusted their price targets for Inspire Medical Systems post-earnings, with JP Morgan downgrading from Overweight to Neutral and lowering the target from $195 to $110, while Stifel maintained a Hold rating with a target reduction from $175 to $140 [4][6] - Piper Sandler maintained an Overweight rating but reduced the price target from $233 to $150, and RBC Capital kept an Outperform rating with a target cut from $215 to $180 [6] - UBS maintained a Buy rating with a target decrease from $270 to $230, while Wells Fargo lowered its Equal-Weight rating target from $174 to $101 [6] - Lake Street maintained a Buy rating with a target reduction from $270 to $150, and Truist Securities downgraded from Buy to Hold with a target cut from $190 to $125 [6]

Financial Data and Key Metrics Changes - The company reported revenue of $201.3 million for Q1 2025, a 23% increase compared to $164 million in Q1 2024 [19] - Net income for the quarter was $3 million, translating to diluted net income of $0.10 per share, compared to a net loss of $10 million or $0.34 per share in the prior year [12][21] - Adjusted EBITDA totaled $33.2 million, representing a 16% adjusted EBITDA margin, compared to $11.9 million and 7% in Q1 2024 [21] - The company reiterated its full-year 2025 revenue guidance of $940 million to $955 million, indicating a growth of 17% to 19% year-over-year [12][22] Business Line Data and Key Metrics Changes - The U.S. revenue for the quarter was $193.6 million, a 24% increase from $155.8 million in the prior year [19] - Revenue outside the U.S. was $7.7 million, reflecting a 6% decrease year-over-year [19] Market Data and Key Metrics Changes - The company noted that European revenue in Q1 2024 benefited from pent-up demand due to supply shortages, which impacted year-over-year comparisons [19] Company Strategy and Development Direction - The company is focused on expanding the limited market release of the Inspire V system and is preparing for a full launch in the U.S. [10][11] - The Inspire V system incorporates advanced sensing capabilities, which are expected to enhance therapy and patient outcomes [11][90] - The company plans to increase investments in medical education and marketing to drive awareness and adoption of Inspire therapy [17][16] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the demand for Inspire therapy, noting that patient flow remains strong despite a transition period for the new system [42][41] - The second quarter is expected to be a transition quarter, with revenue growth anticipated in the mid to high single digits sequentially [14][22] - Management is optimistic about a strong second half of 2025 as the full launch of Inspire V progresses [14][22] Other Important Information - The company has appointed two new Vice Presidents and Senior Medical Directors to enhance its medical education and training efforts [8] - The transition to CPT code 64568 has been incorporated into policies covering approximately 80% of the covered lives, which is expected to facilitate reimbursement [15] Q&A Session Summary Question: What happened with the Q2 revenue guidance and the destock? - Management indicated that increased patient awareness and the transition to Inspire V led to some patient warehousing, affecting Q2 revenue guidance [28] Question: How confident is the company about Inspire IV inventories in the marketplace? - Management stated they have close knowledge of existing inventories and expect high-volume centers to work through their Inspire IV inventory quickly [36] Question: How should investors think about the balance of restocking and pent-up demand? - Management emphasized strong patient outcomes and continued growth in the number of implants, which supports confidence in the second half of the year [41] Question: What is the company's confidence in the manufacturing and reimbursement for Inspire V? - Management expressed confidence in the device's performance and the manufacturing processes, noting that the transition to the new system is well-prepared [50] Question: What is the expected timeline for the transition to Inspire V? - Management reiterated that they expect to complete the transition by the end of the year, with a focus on high-volume centers first [115] Question: How is the marketing strategy for Inspire V evolving? - The company plans to step up direct-to-consumer marketing efforts to increase awareness and educate potential patients about Inspire V [121]

Financial Data and Key Metrics Changes - The company reported revenue of $201.3 million for Q1 2025, a 23% increase compared to $164 million in Q1 2024 [10][17] - Net income for the quarter was $3 million, translating to diluted net income of $0.10 per share, compared to a net loss of $10 million or a loss of $0.34 per share in the same period last year [10][19] - Adjusted EBITDA was $33.2 million, representing a 16% margin, up from $11.9 million and a 7% margin in Q1 2024 [19] - The company ended the quarter with $414 million in cash and investments, despite a reduction due to $75 million in share repurchases [20] Business Line Data and Key Metrics Changes - The U.S. revenue for the quarter was $193.6 million, a 24% increase from $155.8 million in the prior year [17] - Revenue outside the U.S. was $7.7 million, reflecting a 6% decrease year-over-year, attributed to prior pent-up demand from supply shortages [17] Market Data and Key Metrics Changes - The company is expanding the limited market release of the Inspire V system in the U.S. and is preparing for a full launch [9][10] - The transition to CPT code 64568 has been incorporated into policies covering approximately 80% of the 300 million covered lives, including commercial payers and Medicare [13] Company Strategy and Development Direction - The company aims to drive high-quality patient flow and increase provider capacity through the addition of advanced practice providers and certified surgeons [16] - A focused patient marketing and education program will be initiated to promote the Inspire V system, with an emphasis on digital scheduling tools [14][15] - The company plans to submit for regulatory approval of the Inspire V system in Europe and Asia this year while continuing to provide the Inspire IV system during the review process [13] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the full-year revenue guidance of $940 million to $955 million, representing a 17% to 19% growth year-over-year [10][20] - The second quarter is expected to be a transition quarter with mid to high single-digit sequential revenue growth, followed by a strong second half of 2025 [12][20] - Management noted that the demand for Inspire therapy remains strong, with many patients waiting for the new device [12][39] Other Important Information - The company hosted over 300 physicians in Inspire programs during Q1, including training for new ENT residents and sleep fellows [15] - The Inspire V system incorporates new technical capabilities that will allow for future therapy enhancements, including sleep detection [9] Q&A Session Summary Question: What happened with the Q2 revenue guidance and the destock? - Management indicated that increased awareness of the Inspire V technology led to patient warehousing, affecting Q2 revenue expectations, but they expect to make up for this in Q3 and Q4 [26][27] Question: How confident is the company about Inspire IV inventories in the marketplace? - Management stated they have close knowledge of existing inventories and expect high-volume centers to work through their Inspire IV inventory quickly [32][33] Question: What is the company's confidence in the Inspire V launch regarding manufacturing and reimbursement? - Management expressed confidence in the device's performance and the manufacturing processes, noting that the transition to the new CPT code has been well received [45][48] Question: How does the company plan to onboard generalist ENTs during the full market launch? - The company plans to involve both academic and general practice ENTs in the training programs to ensure a smooth transition to Inspire V [60][61] Question: What is the expected impact of operating expenses on profitability? - Management indicated that they will continue to invest in operating expenses to drive revenue growth, with expectations for revenue to outpace operating expense growth [68] Question: How is the company addressing the lower professional fee associated with the new CPT code? - Management believes that the simplicity of the new procedure will outweigh the lower fee, and they are monitoring physician acceptance closely [72][74]

Core Insights - Inspire Medical Systems reported a year-over-year revenue growth of 23% in Q1 2025, reaching $201.3 million, compared to $164.0 million in Q1 2024 [4][11] - The company achieved a net income of $3.0 million in Q1 2025, a significant improvement from a net loss of $10.0 million in the same period last year [7][11] - Inspire surpassed 100,000 patients receiving its therapy and is set to launch the Inspire V system in the U.S. [3][4] Financial Performance - Revenue for Q1 2025 was $201.3 million, a 23% increase from $164.0 million in Q1 2024 [4][11] - U.S. revenue was $193.6 million, reflecting a 24% increase year-over-year, while international revenue decreased by 6% to $7.7 million [4] - Gross margin for Q1 2025 was 84.7%, slightly down from 84.9% in Q1 2024 [4] Operating Expenses and Profitability - Operating expenses increased by 11% to $172.1 million in Q1 2025, up from $154.5 million in the prior year, primarily due to investments in the U.S. sales organization [5] - The operating loss improved to $1.5 million in Q1 2025, compared to a loss of $15.2 million in Q1 2024, indicating better revenue growth and operating leverage [6] - Adjusted EBITDA for Q1 2025 was $33.2 million, compared to $11.9 million in the same quarter last year [7][26] Guidance and Future Outlook - Inspire maintains its full-year 2025 revenue guidance of $940 million to $955 million, representing a growth of 17% to 19% over 2024 [9] - The company has increased its diluted net income per share guidance for 2025 to between $2.20 and $2.30, up from the previous range of $2.10 to $2.20 [9]