Inspire Medical ((INSP)) has held its Q2 earnings call. Read on for the main highlights of the call.
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The recent earnings call for Inspire Medical Systems presented a mixed sentiment, highlighting significant revenue growth and promising advancements in the Inspire V system. However, these positive developments were somewhat overshadowed by challenges in executing the transition to the new system and a reduction in financial guidance.
Revenue Growth
Inspire Medical reported total revenue for the quarter at $217.1 million, marking an 11% increase from the $195.9 million in the second quarter of 2024. Notably, revenue outside the U.S. saw a 23% year-over-year increase, reaching $9.9 million.
Inspire V Adoption
The adoption of the Inspire V system showed promising early results, with a 20% reduction in surgical times, thereby increasing capacity at centers. Implementation of the system has been completed at over 50% of U.S. centers.
Medicare Reimbursement Updates
The Centers for Medicare & Medicaid Services (CMS) proposed positive increases for Medicare reimbursement for the Inspire system. Surgeon reimbursement is projected to rise to $660, an 11% increase compared to 2024.
Adjusted EBITDA Growth
The company reported an adjusted EBITDA of $44.1 million for the quarter, representing a 14% increase compared to $38.7 million in the prior year period.
Revenue Guidance Reduction
Inspire Medical revised its full-year revenue guidance to a range of $900 million to $910 million, down from the previous $940 million to $955 million, reflecting a 4% reduction at the midpoint.
Net Income Decrease
The quarter saw a net loss of $3.6 million, compared to a net income of $9.8 million in the prior year period, resulting in a loss per share of $0.12.
Challenges in Inspire V Transition
The transition to the Inspire V system faced challenges due to prolonged customer training and IT department approvals, which impacted the rollout schedule.
Impact of Medicare Billing Delays
Delays in software updates for claims submissions affected the adoption of Inspire V for Medicare patients, limiting billing capabilities until July 1.
Forward-Looking Guidance
Looking ahead, Inspire Medical revised its full-year revenue guidance to $900 million to $910 million, reflecting a 12% to 13% growth over 2024. The company adjusted its diluted net income per share guidance to $0.40 to $0.50, down from the previous $2.20 to $2.30. Despite challenges, the company remains focused on expanding its marketing efforts and footprint to drive patient awareness and capacity, aiming for a strong performance in 2026.
In conclusion, the earnings call for Inspire Medical Systems highlighted a mixed sentiment, with notable revenue growth and advancements in the Inspire V system. However, the company faces challenges in transition execution and has adjusted its financial guidance accordingly. Investors will be keenly watching how Inspire Medical navigates these hurdles to achieve its long-term goals.