Inspire Medical Systems (INSP) Q1 2026 earnings summary

Executive summary

• Revenue grew 1.6% year-over-year to $204.6 million in Q1 2026, driven by U.S. and international market penetration, but was partially offset by reimbursement and coding challenges and the WISeR program's impact on Medicare cases.

• Gross margin improved to 86.5%, reflecting a favorable sales mix toward higher-margin Inspire V systems.

• Net loss was $11.3 million, primarily due to a significant increase in the effective tax rate and higher SG&A expenses.

• Adjusted operating income and operating cash flow improved compared to the prior year, reflecting disciplined cost management and a focus on revenue-generating activities.

• The company continues to invest in sales and marketing, with territory consolidation and increased field clinical representatives.

Financial highlights

• Q1 2026 revenue: $204.6 million, up 1.6% year-over-year.

• Gross profit: $176.9 million, gross margin 86.5% (up from 84.7% prior year).

• Operating loss narrowed to $1.1 million, with adjusted operating income at $0.3 million and adjusted operating margin at 0.2%.

• Net loss: $11.3 million; adjusted diluted EPS was $0.10.

• Cash, cash equivalents, and investments totaled $399.7 million at quarter-end.

Outlook and guidance

• Full-year 2026 revenue guidance revised to $825–$875 million, reflecting ongoing reimbursement and WISeR headwinds.

• Annual adjusted operating margin expected between 2% and 4%; adjusted diluted EPS forecasted at $0.75–$1.25.

• Estimated total adverse revenue impact from these issues is $120–$150 million for the year.

• Q2 2026 revenue expected to decline 9–11% year-over-year, with an adjusted operating loss of $10–$15 million.

• Capital expenditures anticipated between $40 million and $45 million.