Inspire(US:INSP)2025-08-04 22:00Financial Data and Key Metrics Changes - Total revenue for Q2 2025 was $217.1 million, an 11% increase from $195.9 million in Q2 2024 [23] - U.S. revenue was $207.2 million, a 10% increase from $187.8 million in the prior year [23] - Gross margin decreased to 84% from 84.8% year over year, primarily due to a $2.1 million charge for excess INSPIRE IV subcomponents [23][24] - Operating loss for the quarter was $3.3 million compared to an operating income of $5.1 million in the prior year [25] - Net loss for the quarter was $3.6 million, representing a loss per share of $0.12 compared to net income of $0.32 per share in Q2 2024 [25][26] - Adjusted EBITDA for the quarter was $44.1 million, a 14% increase compared to $38.7 million in the prior year [26] Business Line Data and Key Metrics Changes - The majority of units sold in Q2 were INSPIRE IVs, leading to minimal inventory destocking [9] - The transition to INSPIRE V faced challenges, with many centers not completing necessary training and onboarding [6][7] - Over 50% of U.S. centers have completed the implementation of SleepSync, which is crucial for the transition to INSPIRE V [8] Market Data and Key Metrics Changes - Revenue outside the U.S. was $9.9 million, a 23% increase year over year [23] - The approval of CPT code 64568 for INSPIRE V for Medicare patients was announced in April, but billing could only begin on July 1, impacting the transition [10] Company Strategy and Development Direction - The company is focused on advancing the transition to INSPIRE V and has ramped up marketing and footprint expansion efforts in the second half of the year [11][12] - Investments in digital scheduling and community health talks are aimed at increasing patient awareness and building capacity [12] - The company aims to drive high-quality patient flow and increase provider capacity through training and certification of additional surgeons [21] Management's Comments on Operating Environment and Future Outlook - Management acknowledged challenges in the commercial rollout of INSPIRE V but remains confident in the platform's potential [6][21] - The company adjusted its full-year revenue guidance to $900 million to $910 million, reflecting a 4% reduction at the midpoint from previous guidance [13] - Management expressed optimism about future growth, expecting revenue growth to exceed 12% to 13% in 2026 [38] Other Important Information - The company announced the retirement of Randy Bann, Executive Vice President, Patient Access and Therapy Awareness, effective January 2026 [19][20] - The national average Medicare hospital reimbursement for CPT code 64568 is proposed to increase to $32,000, a 4% increase from 2024 [16] Q&A Session Summary Question: Can you provide more detail on the revised guidance and the headwinds faced? - Management identified the completion of training and the ability to bill Medicare as the primary factors impacting guidance [33][34] Question: Will revenue in 2026 accelerate beyond the 12% to 13% growth expected for 2025? - Management indicated that they expect revenue growth to exceed the current guidance for 2025 due to ongoing investments [38] Question: Can you clarify the EPS guidance change? - The reduction in EPS guidance is primarily due to lower revenue expectations and increased direct-to-consumer spending [42] Question: What is the current uptake of Medicare billing since the software update? - Uptake has been limited as many sites were not fully operational until they could bill Medicare [87] Question: What is driving the 20% increase in patient implants for INSPIRE V? - The increase is attributed to reduced surgical complexity and improved capacity at centers that have transitioned to INSPIRE V [75]