Inspire Medical Systems’ third quarter results were well received by the market, supported by robust adoption of the Inspire V system and operational discipline. Management highlighted that growth was primarily driven by increased patient volume, positive clinical feedback, and continued expansion of the U.S. and international customer base. CEO Tim Herbert emphasized, “We are excited and energized by the strong performance of the Inspire V system and the clinical feedback on the simplified procedure and comfort settings has been tremendously positive.” The company also benefited from higher gross margins due to favorable product mix, despite increased marketing expenses.
Is now the time to buy INSP? Find out in our full research report (it’s free for active Edge members).
Inspire Medical Systems (INSP) Q3 CY2025 Highlights:
- Revenue: $224.5 million vs analyst estimates of $220.2 million (10.5% year-on-year growth, 1.9% beat)
- EPS (GAAP): $0.34 vs analyst estimates of -$0.19 (significant beat)
- Adjusted EBITDA: $44.08 million vs analyst estimates of $24.72 million (19.6% margin, 78.3% beat)
- The company reconfirmed its revenue guidance for the full year of $905 million at the midpoint
- EPS (GAAP) guidance for the full year is $0.95 at the midpoint, beating analyst estimates by 78.1%
- Operating Margin: 4.3%, down from 7% in the same quarter last year
- Sales Volumes rose 13.6% year on year (23.8% in the same quarter last year)
- Market Capitalization: $2.38 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 From Inspire Medical Systems’s Q3 Earnings Call
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Travis Steed (Bank of America Securities) asked about prospects for 2026 growth. CEO Tim Herbert stated that Inspire expects growth to accelerate following the Inspire V rollout, but formal guidance will come in January after year-end planning.
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Adam Maeder (Piper Sandler) requested clarity on how quickly centers will fully transition to Inspire V. Herbert responded that most high-volume centers will be using Inspire V by year-end, though some centers will continue to use Inspire IV for specific economic or regulatory reasons.
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Robert Marcus (JPMorgan) inquired about sustainability of expense control. Herbert and CFO Rick Buchholz explained that while R&D and marketing investments remain strategic priorities, operating leverage should improve as Inspire V adoption grows.
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Danielle Antalffy (UBS) asked about efforts to ramp lower-volume centers. Herbert described targeted initiatives using Inspire V’s simplified procedure to reengage ENT surgeons and expand provider capacity, with early results expected to be more pronounced in 2026.
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Larry Biegelsen (Wells Fargo) questioned the impact of new competitors and market growth assumptions. Herbert indicated competition is in early stages and not yet significantly affecting Inspire’s growth, but the company will monitor competitive dynamics closely.
Catalysts in Upcoming Quarters
In the coming quarters, our analysts will watch (1) the pace at which centers complete the transition to Inspire V and the resulting impact on procedure volumes, (2) the effect of upcoming reimbursement changes on both provider adoption and patient eligibility, and (3) ongoing developments in GLP-1 therapy usage and its influence on OSA diagnosis rates. Execution on expanding provider training and further integration of digital tools like SleepSync will also be important markers of Inspire’s ability to sustain growth.
Inspire Medical Systems currently trades at $81.79, up from $73.64 just before the earnings. In the wake of this quarter, is it a buy or sell? The answer lies in our full research report (it’s free for active Edge members).
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