Inspire Medical Systems Reports 32.5% Revenue Growth, Turnaround in Profitability in Q3 2024

Inspire Medical Systems, Inc. reported significant financial improvements in its third quarter and year-to-date results for 2024, reflecting a robust growth trajectory in revenue and profitability. For the three months ended September 30, 2024, the company generated revenue of $203.2 million, a 32.5% increase from $153.3 million in the same period of 2023. For the nine months ended September 30, 2024, revenue reached $563.1 million, up 30.3% from $432.3 million year-over-year. This growth was primarily driven by increased sales of the Inspire system, the first FDA-approved neurostimulation technology for moderate to severe obstructive sleep apnea (OSA).

Gross profit for the third quarter of 2024 was $170.8 million, reflecting a gross margin of 84.1%, consistent with the previous year. The nine-month gross profit also saw an increase to $476.1 million, with a gross margin of 84.5%, up from 84.1% in 2023. Operating income turned positive at $14.3 million for the third quarter, a substantial recovery from an operating loss of $13.5 million in the same quarter of 2023. Year-to-date, the company reported a net income of $18.3 million, a significant turnaround from a net loss of $35.9 million in the prior year.

Inspire's total assets increased to $796.2 million as of September 30, 2024, compared to $676.8 million at the end of 2023. Total stockholders' equity rose to $696.6 million, up from $572.5 million. The company reported a decrease in current assets to $582.5 million, down from $593.7 million at the end of 2023, primarily due to a reduction in cash and cash equivalents.

The company has also made strategic advancements, including the FDA approval of its next-generation Inspire system in August 2024, expected to launch fully in 2025. Additionally, Inspire expanded its U.S. sales territories to 323, adding 13 new territories in the third quarter, and activated 66 new medical centers, bringing the total to 1,371.

Research and development (R&D) expenses for the third quarter decreased to $26.1 million, down from $29.1 million in 2023, while selling, general, and administrative (SG&A) expenses increased to $130.4 million, up from $113.2 million, primarily due to rising headcount and advertising costs. The company anticipates further increases in SG&A expenses as it expands its commercial infrastructure.

In terms of cash flow, Inspire reported net cash provided by operating activities of $61.1 million for the nine months ended September 30, 2024, a significant increase from $7.4 million in the same period of 2023. The company also authorized a share repurchase program of up to $150 million in August 2024, although no shares have been repurchased as of the reporting date.

Inspire Medical Systems continues to navigate a competitive landscape while focusing on innovative solutions for OSA, with ongoing litigation and market challenges posing potential risks to its operations.