Inspire Medical Systems reported a strong finish to 2025 with 12% revenue growth in Q4, driven by the Inspire V system launch and expansion at existing and new centers. Despite a dynamic reimbursement landscape, the company achieved significant net income and adjusted EBITDA growth, positioning itself for 2026 with a revised revenue outlook.
Fourth quarter revenue increased 12% to $269.1 million, driven by growth at existing centers and new center additions.
positiveFull year revenue increased 14% to $912.0 million, primarily driven by growth at existing centers and new center additions.
positiveGross margin increased 160 bps to 86.6% in Q4 and 70 bps to 85.4% for the full year, primarily due to increased sales volume and a higher sales mix of the Inspire V system.
positiveOperating cash flow was $52.5 million in the fourth quarter and $117.0 million for the full year.
positiveFDA approval for 3.0T MRI compatibility for the Inspire V system was achieved.
positiveFull year 2026 revenue outlook revised to $950 million to $1.0 billion, representing a 4% to 10% growth, a widened and revised range reflecting the estimated impact on Q1 for coding uncertainty and the transition to CPT code 64582 with a -52 modifier.
attentionFull year 2026 adjusted operating margin outlook revised to 6% to 8%, indicating potential pressure on profitability.
attentionNet income per diluted share for full year 2026 outlook revised to $1.23 to $1.81, and adjusted net income per diluted share to $1.85 to $2.35, reflecting the impact of coding uncertainty and reimbursement changes.
attentionFull year 2025 net income per diluted share was $4.89, but the 2026 outlook range is significantly lower.
attentionInventories increased from $80.1 million in FY2024 to $145.3 million in FY2025, a significant jump outpacing revenue growth.
attentionMargin expansion indicates improving profitability and operational efficiency. Measured in basis points (bps): 100 bps = 1.0%.
Forward-looking guidance is subject to change and does not constitute a guarantee. Actual results may differ materially from these estimates.
Special items are non-recurring events that may distort period-over-period comparisons. Analysts typically adjust for these when calculating normalized earnings.
We are very excited with the strong finish to 2025. The team made excellent progress with the Inspire V launch, with clinical insights from the early phase of commercial adoption continuing to validate positive patient outcomes and improvements in therapy delivery.
Despite the dynamic reimbursement landscape, our strong fourth quarter execution positions us well as we enter 2026.
While we are disappointed with this result, this clarification provides direction for us going forward, and we will work with payers, including the MACs, government agencies, commercial payers and physician societies to attempt to minimize the impact to the physician fee from this change.
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Operational metrics provide insight into business drivers and customer engagement beyond traditional financial measures.