Inspire(US:INSP)2025-11-03 23:00Financial Data and Key Metrics Changes - Total revenue for Q3 2025 was $224.5 million, a 10% increase from $203.2 million in Q3 2024 [15] - U.S. revenue was $214.4 million, up 9% from $195.8 million in the prior year [15] - Gross margin improved to 85.8% from 84.1% year-over-year, driven by increased sales volume and a favorable sales mix of Inspire 5 [15] - Operating income decreased to $9.6 million from $14.3 million in the prior year [16] - Net income for the quarter was $9.9 million, down from $18.5 million year-over-year [16] - Adjusted EBITDA was $44 million, slightly down from $44.5 million in the prior year [17] - The company increased its earnings per share guidance to $0.90-$1, up from $0.40-$0.50 previously [9] Business Line Data and Key Metrics Changes - Inspire 5's U.S. launch showed significant progress, with physician training over 98% complete and contracting over 90% complete for centers [8] - The Inspire 5 system demonstrated an 87% inspiratory overlap with patients' breathing, indicating strong clinical performance [5] - The company reported a 20% reduction in surgical times based on clinical studies [4] Market Data and Key Metrics Changes - Revenue outside the U.S. was $10.1 million, a 37% increase year-over-year [15] - The Centers for Medicare & Medicaid Services (CMS) finalized an 11% increase in the physician fee schedule for CPT code 64568, effective January 1, 2026 [10] Company Strategy and Development Direction - The company remains focused on patient outcomes and innovation, investing in clinical evidence and medical education [4] - Strategies include training advanced practice providers and increasing the capacity of provider partners to treat more patients [13] - The company is optimistic about the future, with plans to drive long-term stakeholder value [14] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the durability of growth heading into 2026, with an early indication of 10%-11% growth for next year [22] - The company is mindful of near-term factors such as inventory transitions and competitive activity but remains focused on executing its growth strategy [23] - Management highlighted the positive impact of GLP-1s on patient flow into clinics, which could benefit Inspire therapy [12] Other Important Information - The company completed $50 million in share repurchases during the quarter, totaling $125 million year-to-date [17] - The company ended the quarter with $411 million in cash and investments, allowing for continued investment in growth strategies [17] Q&A Session Summary Question: Thoughts on 2026 planning and cadence - Management is focused on finishing Q4 strong and is still early in the 2026 planning process, indicating potential accelerated growth from Q3 [22] Question: Trends in business for October and Q4 guidance - Management noted strong trends with Inspire 5 and expects to see consistent execution and operational benefits from tighter integration across departments [28] Question: Transitioning centers to Inspire 5 - Management confirmed that while many centers are transitioning to Inspire 5, some will continue to use Inspire 4 for economic reasons [32] Question: Operating expenses and sustainability - Management indicated that while there is a focus on expense control, investments in R&D and marketing will continue, with a disciplined approach to spending [36] Question: Impact of new competitors on market growth - Management stated that it is early days for new competitors and they will continue to monitor the situation closely [64] Question: Economic considerations for centers using Inspire 4 - Management clarified that economic factors are more related to site of service reimbursement rather than physician reimbursement rates [82] Question: Operating expenses trend for 2026 - Management expects a slight increase in DTC spending but does not anticipate it to grow at the same rate as revenue [83]