Key Points
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Third-quarter revenue fell 7.9% year over year to $206.7 million, though it exceeded expectations as stronger U.S. performance offset weaker international results. Operating loss was $28.7 million, while adjusted EPS was $0.14.
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Inspire narrowed its full-year revenue outlook to $850 million–$860 million and said coding and reimbursement challenges reduced third-quarter results by about $30 million, with a potential $120 million impact for 2026. Management expects the billing environment to stabilize and anticipates low-single-digit revenue growth in 2027.
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The company is investing approximately $30 million in annualized savings from Project Horizon into patient access and field support, while advancing the new 2028 CPT code for Inspire V and developing Inspire VI, which could be submitted to the FDA in 2027.
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Inspire Medical Systems (NYSE:INSP) reported third-quarter revenue of $206.7 million, down 7.9% from a year earlier but up 3% sequentially, as stronger-than-expected U.S. performance offset weaker international results. The company said coding and reimbursement challenges continued to weigh on results, though management expressed growing confidence that the disruption is easing.
Chief Executive Officer Tim Herbert said third-quarter revenue and adjusted operating income came in slightly ahead of the company’s expectations. “We are in a much more favorable position with coding than we were just last quarter and are increasingly confident in our path forward,” Herbert said.
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Gross margin rose 20 basis points year over year to 86%, which Chief Financial Officer Matt Osberg attributed primarily to a higher mix of the Inspire V device, which carries a higher gross margin than Inspire IV.
Operating expenses increased $23.5 million from the prior-year period to $206.6 million. The increase included $24.1 million in restructuring charges tied to Project Horizon, $7 million in legal settlement expense and higher legal fees. Those costs were partly offset by lower marketing and stock-based compensation expenses.
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Operating loss was $28.7 million, compared with operating income of $9.6 million a year earlier.
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Adjusted operating income was $1.9 million, compared with $10.9 million in the prior-year quarter.
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Diluted loss per share was $0.84, while adjusted diluted earnings per share was $0.14.
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Adjusted EBITDA margin declined 130 basis points to 18.3%, primarily due to lower revenue.
