INSP · Inspire Medical Systems, Inc.

Inspire Medical Systems reported first quarter 2026 revenue of $204.6 million, a 1.6% increase year-over-year, driven by increased market penetration but partially offset by adverse effects from reimbursement disruption and the WISeR program. Gross margin improved 180 basis points to 86.5%, primarily due to a higher sales mix of the Inspire V system, which carries a higher margin than Inspire IV. Operating expenses rose 3.4% to $178.0 million, driven by higher marketing, legal, and employee costs, partially offset by lower R&D. The GAAP operating loss narrowed slightly to $1.1 million, while adjusted operating income was $0.3 million. Net loss was $11.3 million, or $(0.39) per diluted share, compared to adjusted net earnings of $2.8 million, or $0.10 per diluted share. The effective tax rate spiked to 571.2% due to stock-based compensation shortfalls. Operating cash flow improved significantly to $12.8 million from a use of $6.7 million in the prior year, driven by improved working capital. Cash and investments stood at $399.7 million as of March 31, 2026. Management revised full-year 2026 revenue guidance downward to $825-$875 million, representing a 4%-10% decline from 2025, citing persistent coding and reimbursement uncertainty for the Inspire V system. The company expects these challenges to continue through 2026 but anticipates a return to growth in 2027. Adjusted operating margin is guided at 2%-4%, with GAAP diluted EPS of $0.07-$0.62 and adjusted diluted EPS of $0.75-$1.25. The guidance assumes an effective tax rate of 65%-70% and capital expenditures of $40-$45 million. The company also noted participation in investor meetings in May and June 2026, with presentation materials furnished as Exhibit 99.2.