Inspire Medical Systems’ first quarter showed strong momentum, as results exceeded Wall Street’s expectations for both revenue and profitability. Management credited the performance to sustained demand for the company’s sleep apnea therapy and the pending full commercial launch of the Inspire V system. CEO Tim Herbert emphasized the milestone of surpassing 100,000 patients treated, adding that “the patient flow remains very, very strong and that’s what’s really encouraging to us, as we look forward.” The quarter also saw gross margin stability and improved operating leverage, which management attributed to disciplined expense growth and preparations for the Inspire V rollout.
Is now the time to buy INSP? Find out in our full research report (it’s free).
Inspire Medical Systems (INSP) Q1 CY2025 Highlights:
- Revenue: $201.3 million vs analyst estimates of $195.2 million (22.7% year-on-year growth, 3.1% beat)
- EPS (GAAP): $0.10 vs analyst estimates of -$0.24 (significant beat)
- Adjusted EBITDA: $32.62 million vs analyst estimates of $16.51 million (16.2% margin, 97.6% beat)
- The company reconfirmed its revenue guidance for the full year of $947.5 million at the midpoint
- EPS (GAAP) guidance for the full year is $2.25 at the midpoint, beating analyst estimates by 4.1%
- Operating Margin: -0.7%, up from -9.3% in the same quarter last year
- Sales Volumes rose 19.9% year on year (28.1% in the same quarter last year)
- Market Capitalization: $3.79 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions Inspire Medical Systems’s Q1 Earnings Call
- Travis Steed (Bank of America Securities) asked about the projected Q2 revenue slowdown and whether inventory destocking would be offset in the second half. CEO Tim Herbert explained that patient warehousing and the transition to Inspire V would impact Q2 but anticipated demand would be captured later in the year.
- Danielle Antalffy (UBS) inquired about visibility into Inspire IV inventory levels and confidence in the back-half weighted guidance. Herbert responded that most centers hold minimal inventory and high-volume centers are expected to work through stock quickly, supporting confidence in the outlook.
- Adam Maeder (Piper Sandler) questioned the Inspire V launch’s readiness across manufacturing, reimbursement, and device performance. Herbert confirmed full regulatory approval, positive provider feedback, and stable manufacturing as reasons for confidence in a smooth rollout.
- Michael Sarcone (Jefferies) asked about physician response to the new CPT code and reimbursement changes for Inspire V. Herbert stated that reduced procedure complexity outweighed lower professional fees, and early feedback from both academic and commercial centers was positive.
- Anthony Petrone (Mizuho Financial Group) sought clarity on whether provider capacity could absorb increased demand in the second half. Herbert emphasized that shorter procedures and new surgeon training would expand capacity, with digital tools like SleepSync supporting higher patient throughput.
Catalysts in Upcoming Quarters
Going forward, the StockStory team will focus on (1) the pace of Inspire V adoption and how quickly providers complete the transition, (2) the impact of increased marketing spend on patient inquiries and conversion rates, and (3) the effectiveness of expanded provider training and digital engagement tools in supporting higher procedure volumes. We will also watch for outcomes data from upcoming clinical presentations and regulatory developments in international markets.
Inspire Medical Systems currently trades at $131.46, down from $159.13 just before the earnings. At this price, is it a buy or sell? The answer lies in our full research report (it’s free).
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