Cover Page
Cover Page - shares | 3 Months Ended | |
Mar. 31, 2022 | Apr. 26, 2022 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2022 | |
Document Transition Report | false | |
Entity File Number | 001-38468 | |
Entity Registrant Name | Inspire Medical Systems, Inc. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 26-1377674 | |
Entity Address, Address Line One | 5500 Wayzata Blvd. | |
Entity Address, Address Line Two | Suite 1600 | |
Entity Address, City or Town | Golden Valley | |
Entity Address, State or Province | MN | |
Entity Address, Postal Zip Code | 55416 | |
City Area Code | 844 | |
Local Phone Number | 672-4357 | |
Title of 12(b) Security | Common Stock, $0.001 par value per share | |
Trading Symbol | INSP | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding (in shares) | 27,591,115 | |
Entity Central Index Key | 0001609550 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q1 |
BALANCE SHEETS
BALANCE SHEETS - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 203,291 | $ 214,467 |
Accounts receivable, net of allowance for credit losses of $99 and $99, respectively | 34,544 | 34,179 |
Inventories | 22,198 | 17,231 |
Prepaid expenses and other current assets | 2,444 | 2,660 |
Total current assets | 262,477 | 268,537 |
Investments, long-term | 9,796 | 9,938 |
Property and equipment, net | 9,334 | 8,486 |
Operating lease right-of-use asset | 7,659 | 7,919 |
Other non-current assets | 454 | 204 |
Total assets | 289,720 | 295,084 |
Current liabilities: | ||
Accounts payable | 17,022 | 11,665 |
Accrued expenses | 13,896 | 20,454 |
Notes payable, current portion | 12,250 | 9,188 |
Total current liabilities | 43,168 | 41,307 |
Notes payable, non-current portion | 12,798 | 15,799 |
Operating lease liability, non-current portion | 8,553 | 8,796 |
Other non-current liabilities | 146 | 134 |
Total liabilities | 64,665 | 66,036 |
Stockholders' equity: | ||
Preferred Stock, $0.001 par value, 10,000,000 shares authorized; no shares issued and outstanding | 0 | 0 |
Common Stock, $0.001 par value per share; 200,000,000 shares authorized; 27,568,004 and 27,416,106 issued and outstanding at March 31, 2022 and December 31, 2021, respectively | 28 | 27 |
Additional paid-in capital | 521,308 | 508,465 |
Accumulated other comprehensive loss | (198) | (55) |
Accumulated deficit | (296,083) | (279,389) |
Total stockholders' equity | 225,055 | 229,048 |
Total liabilities and stockholders' equity | $ 289,720 | $ 295,084 |
BALANCE SHEETS (Parenthetical)
BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Statement of Financial Position [Abstract] | ||
Allowance for credit loss | $ 99 | $ 99 |
Preferred shares, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred shares, authorized (in shares) | 10,000,000 | 10,000,000 |
Preferred shares, issued (in shares) | 0 | 0 |
Preferred stock, outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, authorized (in shares) | 200,000,000 | 200,000,000 |
Common stock, issued (in shares) | 27,568,004 | 27,416,106 |
Common stock, outstanding (in shares) | 27,568,004 | 27,416,106 |
STATEMENTS OF OPERATIONS AND CO
STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Income Statement [Abstract] | ||
Revenue | $ 69,382 | $ 40,352 |
Cost of goods sold | 10,004 | 5,981 |
Gross profit | 59,378 | 34,371 |
Operating expenses: | ||
Research and development | 11,870 | 8,154 |
Selling, general and administrative | 63,564 | 41,906 |
Total operating expenses | 75,434 | 50,060 |
Operating loss | (16,056) | (15,689) |
Other expense (income): | ||
Interest income | (34) | (57) |
Interest expense | 527 | 523 |
Other expense, net | 45 | 38 |
Total other expense | 538 | 504 |
Loss before income taxes | (16,594) | (16,193) |
Income taxes | 100 | 23 |
Net loss | (16,694) | (16,216) |
Other comprehensive loss: | ||
Unrealized loss on investments | (143) | (20) |
Total comprehensive loss | $ (16,837) | $ (16,236) |
Net loss per share, basic (in dollars per share) | $ (0.61) | $ (0.60) |
Net loss per share, diluted (in dollars per share) | $ (0.61) | $ (0.60) |
Weighted average common shares used to compute net loss per share, basic (in shares) | 27,517,268 | 27,144,361 |
Weighted average common shares used to compute net loss per share, diluted (in shares) | 27,517,268 | 27,144,361 |
STATEMENTS OF STOCKHOLDERS' EQU
STATEMENTS OF STOCKHOLDERS' EQUITY (Unaudited) - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-In Capital | Accumulated Other Comprehensive Income (Loss) | Accumulated Deficit |
Beginning balance (in shares) at Dec. 31, 2020 | 27,069,276 | ||||
Beginning balance at Dec. 31, 2020 | $ 229,747 | $ 27 | $ 467,038 | $ 29 | $ (237,347) |
Stockholders' Equity [Roll Forward] | |||||
Stock options exercised (in shares) | 133,421 | ||||
Stock options exercised | 3,550 | 3,550 | |||
Issuance and sale of common stock (in shares) | 376 | ||||
Issuance and sale of common stock | 73 | 73 | |||
Stock-based compensation expense | 5,997 | 5,997 | |||
Other comprehensive loss | (20) | (20) | |||
Net loss | (16,216) | (16,216) | |||
Ending balance (in shares) at Mar. 31, 2021 | 27,203,073 | ||||
Ending balance at Mar. 31, 2021 | $ 223,131 | $ 27 | 476,658 | 9 | (253,563) |
Beginning balance (in shares) at Dec. 31, 2021 | 27,416,106 | 27,416,106 | |||
Beginning balance at Dec. 31, 2021 | $ 229,048 | $ 27 | 508,465 | (55) | (279,389) |
Stockholders' Equity [Roll Forward] | |||||
Stock options exercised (in shares) | 151,186 | 151,186 | |||
Stock options exercised | $ 3,087 | $ 1 | 3,086 | ||
Vesting of restricted stock units (in shares) | 569 | ||||
Withholding taxes on net share settlement of restricted stock units (in shares) | (205) | ||||
Withholding taxes on net share settlement of restricted stock units | $ (43) | (43) | |||
Issuance and sale of common stock (in shares) | 348 | ||||
Issuance and sale of common stock | 79 | 79 | |||
Stock-based compensation expense | 9,721 | 9,721 | |||
Other comprehensive loss | (143) | (143) | |||
Net loss | $ (16,694) | (16,694) | |||
Ending balance (in shares) at Mar. 31, 2022 | 27,568,004 | 27,568,004 | |||
Ending balance at Mar. 31, 2022 | $ 225,055 | $ 28 | $ 521,308 | $ (198) | $ (296,083) |
STATEMENTS OF CASH FLOWS (Unaud
STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Operating activities | ||
Net loss | $ (16,694) | $ (16,216) |
Adjustments to reconcile net loss: | ||
Depreciation and amortization | 359 | 234 |
(Accretion) amortization of investment (discount) premium | (1) | 30 |
Accretion of debt discount | 62 | 58 |
Non-cash lease expense | 260 | 171 |
Stock-based compensation expense | 9,721 | 5,997 |
Non-cash stock issuance for services rendered | 79 | 73 |
Other, net | 0 | (8) |
Changes in operating assets and liabilities: | ||
Accounts receivable | (382) | 3,381 |
Inventories | (4,967) | (2,905) |
Prepaid expenses and other current assets | 216 | 356 |
Accounts payable | 5,520 | 1,477 |
Accrued expenses and other liabilities | (6,921) | (3,049) |
Net cash used in operating activities | (12,748) | (10,401) |
Investing activities | ||
Purchases of property and equipment | (1,215) | (1,321) |
Purchases of other investments | (250) | 0 |
Net cash used in investing activities | (1,465) | (1,321) |
Financing activities | ||
Proceeds from the exercise of stock options | 3,087 | 3,550 |
Taxes paid on net share settlement of restricted stock units | (43) | 0 |
Net cash provided by financing activities | 3,044 | 3,550 |
Effect of exchange rate on cash | (7) | 2 |
Decrease in cash and cash equivalents | (11,176) | (8,170) |
Cash and cash equivalents at beginning of period | 214,467 | 190,518 |
Cash and cash equivalents at end of period | 203,291 | 182,348 |
Supplemental cash flow information | ||
Cash paid for interest | 466 | 466 |
Change in property and equipment acquired but not yet paid | $ 284 | $ 1,209 |
Organization
Organization | 3 Months Ended |
Mar. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization | OrganizationDescription of BusinessInspire Medical Systems, Inc. is a medical technology company focused on the development and commercialization of innovative, minimally invasive solutions for patients with obstructive sleep apnea ("OSA"). Our proprietary Inspire system is the first and only United States ("U.S.") Food and Drug Administration ("FDA") approved neurostimulation technology that provides a safe and effective treatment for moderate to severe OSA. Inspire therapy received premarket approval ("PMA") from the FDA in 2014 and has been commercially available in certain European markets since 2011. Japan's Ministry of Health, Labour and Welfare ("MLHW") approved Inspire therapy to treat moderate to severe OSA in 2018 and was formally added to the Japan National Health Insurance Payment Listing in 2021. In 2020, the Australian Therapeutic Goods Administration approved Inspire therapy to treat moderate to severe OSA, and we are currently seeking reimbursement coverage in Australia. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2022 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Basis of Presentation The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the U.S. (“GAAP”) for interim financial reporting and as required by the rules and regulations of the Securities and Exchange Commission (“SEC”). Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (including those which are normal and recurring) considered necessary for a fair presentation of the interim financial information have been included. When preparing financial statements in conformity with GAAP, we must make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, expenses, and related disclosures at the date of the financial statements. Actual results could differ from those estimates. Additionally, the results of operations for the interim periods are not necessarily indicative of the operating results for the full fiscal year or any future periods. For a complete discussion of our significant accounting policies and other information, the unaudited financial statements and notes thereto should be read in conjunction with the audited financial statements included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2021. Cash and Cash Equivalents We consider all highly liquid securities, readily convertible to cash, that have original maturities of 90 days or less from the date of purchase to be cash equivalents. The carrying amount reported in the balance sheets for cash is cost, which approximates fair value. Foreign Currency Sales and expenses denominated in foreign currencies are translated at average exchange rates in effect throughout the year. Foreign currency transaction gains and losses are included in other expense, net, in the statements of operations and comprehensive loss. Assets and liabilities of foreign operations are remeasured at period-end exchange rates with the impacts of foreign currency remeasurement recognized in other expense, net in the statements of operations and comprehensive loss. Investments At both March 31, 2022 and December 31, 2021, our long-term investments consisted of U.S. government securities. Investments are reported at their estimated fair market values which are based on quoted, active or inactive market prices when available. Any unrealized gains and losses due to interest rate fluctuations and other external factors are reported as a separate component of accumulated other comprehensive loss. We had $0.2 million and $0.1 million of unrecognized loss in accumulated other comprehensive loss at March 31, 2022 and December 31, 2021, respectively. Any realized gains and losses are calculated on the specific identification method and reported net in other expense, net in the statements of operations and comprehensive loss. For both of the three months ended March 31, 2022 and 2021, we recognized $0 of realized gains, net. We reassess our estimated credit losses on investments each reporting period. U.S. government securities and cash equivalents are under a "zero-loss exception" for credit losses, meaning no credit loss risk calculation is necessary on those instruments due to the exceptionally low rate of default, which continues to decrease as the securities approach maturity, which for us is no longer than two years. We record changes in the allowance for credit losses for available-for-sale debt securities with a corresponding adjustment in credit loss expense on the statement of operations and comprehensive loss. No reversal of a previously recorded allowance for credit losses may be made to an amount below zero. The total allowance for credit losses was $0 at both March 31, 2022 and December 31, 2021. Fair Value of Financial Instruments We measure certain financial assets and liabilities at fair value on a recurring basis, including cash equivalents and investments. Fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or a liability. A three-tier fair value hierarchy is established as a basis for considering such assumptions and for inputs used in the valuation methodologies in measuring fair value: Level 1: Observable inputs, such as quoted prices (unadjusted) for identical assets or liabilities in active markets. Level 2: Inputs other than quoted prices in active markets for identical assets and liabilities that are observable either directly or indirectly for substantially the full term of the asset or liability. Level 3: Unobservable inputs that are supported by little or no market activities, which would require us to develop our own assumptions. We use the methods and assumptions described below in determining the fair value of our financial instruments. Money market funds: Fair values of money market funds are based on quoted market prices in active markets. These are included as Level 1 measurements in the tables below. U.S. government securities: Consists of U.S. government Treasury bills with original maturities of less than two years. These are included as a Level 1 measurement in the tables below. The following tables set forth by level within the fair value hierarchy our assets that are measured on a recurring basis and reported at fair value as of March 31, 2022 and December 31, 2021. Assets are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. Fair Value Measurements as of March 31, 2022 Estimated Level 1 Level 2 Level 3 Cash equivalents: Money market funds $ 189,379 $ 189,379 $ — $ — Total cash equivalents 189,379 189,379 — — Investments: U.S. government securities 9,796 9,796 — — Total investments 9,796 9,796 — — Total cash equivalents and investments $ 199,175 $ 199,175 $ — $ — Fair Value Measurements as of December 31, 2021 Estimated Level 1 Level 2 Level 3 Cash equivalents: Money market funds $ 189,369 $ 189,369 $ — $ — Total cash equivalents 189,369 189,369 — — Investments: U.S. government securities 9,938 9,938 — — Total investments 9,938 9,938 — — Total cash equivalents and investments $ 199,307 $ 199,307 $ — $ — There were no transfers between levels during the periods ended March 31, 2022 and December 31, 2021. Concentration of Credit Risk Financial instruments, which potentially subject us to concentrations of credit risk, consist principally of cash equivalents, investments, and accounts receivable. Our investment policy limits investments to certain types of debt securities issued by the U.S. government and its agencies, corporations with investment-grade credit ratings, or commercial paper and money market funds issued by the highest quality financial and non-financial companies. We place restrictions on maturities and concentration by type and issuer. We are exposed to credit risk in the event of a default by the issuers of these securities to the extent recorded on the balance sheets. However, as of March 31, 2022 and December 31, 2021, we limited our credit risk associated with cash equivalents by placing investments with banks we believe are highly creditworthy. We believe that the credit risk in our accounts receivable is mitigated by our credit evaluation process, relatively short collection terms, and dispersion of our customer base. We generally do not require collateral, and losses on accounts receivable have historically not been significant. Accounts Receivable and Allowance for Expected Credit Losses Trade accounts receivable are recorded at the invoiced amount and do not bear interest. Customer credit terms are established prior to shipment with the general standard being net 30 days. Collateral or any other security to support payment of these receivables generally is not required. Each reporting period, we estimate the credit loss related to accounts receivable based on a migration analysis of accounts grouped by individual receivables delinquency status, and apply our historic loss rate adjusted for management's assumption of future market conditions. Any change in the allowance from new receivables acquired, or changes due to credit deterioration on previously existing receivables, is recorded in selling, general and administrative expenses. Write-offs of receivables considered uncollectible are deducted from the allowance. Specific accounts receivable are written-off once a determination is made that the amount is uncollectible. The write-off is recorded in the period in which the account receivable is deemed uncollectible. Recoveries are recognized when received and as a direct credit to earnings or as a reduction to the allowance for credit losses (which would indirectly reduce the loss by decreasing bad debt expense). Inventories Inventories are valued at the lower of cost or net realizable value, computed on a first-in, first-out basis and consisted of the following: March 31, 2022 December 31, 2021 Raw materials $ 5,342 $ 3,119 Finished goods 16,856 14,112 Total inventories, net of reserves $ 22,198 $ 17,231 We regularly review inventory quantities on-hand for excess and obsolete inventory and, when circumstances indicate, incur charges to write down inventories to their net realizable value. The determination of a reserve for excess and obsolete inventory involves management exercising judgment to determine the required reserve, considering future demand, product life cycles, introduction of new products and current market conditions. The reserve for excess and obsolete inventory was $0.4 million and $0.3 million as of March 31, 2022 and December 31, 2021, respectively. Property and Equipment Property and equipment are stated at cost, less accumulated depreciation and amortization and consisted of the following: March 31, 2022 December 31, 2021 Computer equipment and software $ 1,500 $ 1,397 Manufacturing equipment 5,238 4,436 Other equipment 311 249 Leasehold improvements 281 281 Construction in process 5,415 5,175 Property and equipment, cost 12,745 11,538 Less: accumulated depreciation and amortization (3,411) (3,052) Property and equipment, net $ 9,334 $ 8,486 Depreciation is determined using the straight-line method over the estimated useful lives of the respective assets, generally three Impairment of Long-lived Assets Long-lived assets consist primarily of property and equipment and operating lease right-of-use asset and are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If circumstances require that an asset be tested for possible impairment, we compare the undiscounted cash flows expected to be generated by the asset to the carrying amount of the asset. If the carrying amount of the asset is not recoverable on an undiscounted cash flow basis, we determine the fair value of the asset and recognize an impairment loss to the extent the carrying amount of the asset exceeds its fair value. We determine fair value using the income approach based on the present value of expected future cash flows or other appropriate measures of estimated fair value. Our cash flow assumptions consider historical and forecasted revenue and operating costs and other relevant factors. We did not record any impairment charges on long-lived assets during either of the three months ended March 31, 2022 or 2021. Accrued Expenses Accrued expenses consisted of the following: March 31, 2022 December 31, 2021 Payroll related $ 10,565 $ 17,655 Interest 160 160 Product warranty liability 438 468 Operating lease liability, current portion 673 312 Other accrued expenses 2,060 1,859 Total accrued expenses $ 13,896 $ 20,454 The following table shows the changes in our estimated product warranty liability accrual, included in accrued liabilities: Three Months Ended March 31, 2022 2021 Balance at beginning of period $ 468 $ 159 Accruals of warranties issued 11 178 Settlements of warranty claims (41) (71) Balance at the end of the period $ 438 $ 266 Revenue Recognition We recognize revenue in accordance with ASC Topic 606, Revenue from Contracts with Customers ("ASC 606"). Revenues from product sales are recognized when the customer obtains control of the product, which occurs at a point in time, either upon shipment of the product or receipt of the product, depending on shipment terms. Our standard shipping terms are free on board shipping point, unless the customer requests that control and title to the inventory transfer upon delivery. In those cases where shipping and handling costs are billed to customers, we classify the amounts billed as a component of cost of goods sold. Revenue is measured as the amount of consideration we expect to receive, adjusted for any applicable estimates of variable consideration and other factors affecting the transaction price, which is based on the invoiced price, in exchange for transferring products. All revenue is recognized when we satisfy our performance obligations under the contract. The majority of our contracts have a single performance obligation and are short term in nature. Sales taxes and value added taxes in foreign jurisdictions that are collected from customers and remitted to governmental authorities are accounted for on a net basis and therefore are excluded from net sales. Shipping and handling costs associated with outbound freight after control over a product has transferred to a customer are accounted for as a fulfillment cost and are included in cost of goods sold. Variable consideration related to certain customer sales incentives is estimated based on the amounts expected to be paid based on the agreement with the customer using probability assessments. We offer customers a limited right of return for our product in case of non-conformity or performance issues. We estimate the amount of our product sales that may be returned by our customers based on historical sales and returns. As our historical product returns to date have been immaterial, we have not recorded a reduction in revenue related to variable consideration for product returns. See Note 9 for disaggregated revenue by geographic area. Cost of Goods Sold Cost of goods sold consists primarily of acquisition costs for the components of the Inspire system, overhead costs, scrap and inventory obsolescence, warranty replacement costs, as well as distribution-related expenses such as logistics and shipping costs, net of shipping costs charged to customers. The overhead costs include the cost of material procurement, depreciation expense for production equipment, and operations supervision and management personnel, including employee compensation, stock-based compensation, supplies, and travel. Research and Development Research and development expenses consist primarily of product development, clinical and regulatory affairs, quality assurance, consulting services, and other costs associated with products and technologies in development. These expenses include employee compensation, including stock-based compensation, supplies, materials, consulting, and travel expenses related to research and development programs. Clinical expenses include clinical trial design, clinical site reimbursement, data management, travel expenses, and the cost of manufacturing products for clinical trials. Stock-Based Compensation We maintain an equity incentive plan to provide lon g-term incentives for eligible employees, consultants, and members of the board of directors. The plan allows for the issuance of restricted stock units ("RSUs"), performance stock units ("PSUs"), and non-statutory and incentive stock options to employees, and RSUs, PSU's, and non-statutory stock options to consultants and directors. We also offer an employee stock purchase plan ("ESPP") which allows participating employees to purchase shares of our common stock at a discount through payroll deductions. We have not granted any stock-based awards to our consultants. We recognize equity-based compensation expense for awards of equity instruments based on the grant date fair value of those awards in accordance with ASC Topic 718, Stock Compensation ("ASC 718"). ASC 718 requires all equity-based compensation awards, including grants of RSUs, PSUs, and stock options, to be recognized as expense in the statements of operations and comprehensive loss based on their grant date fair values. We estimate the fair value of stock options using the Black-Scholes option pricing model and the fair value of RSUs and PSUs is equal to the closing price of our common stock on the grant date. The fair value of each purchase under the employee stock purchase plan is estimated at the beginning of the offering period using the Black-Scholes option pricing model. Stock-based compensation expense is recognized on a straight-line basis over the vesting term for stock options and RSUs, and over the vesting and performance period based on the probability of achieving the performance objectives for PSUs. We account for award forfeitures as they occur. Advertising Expenses We expense the costs of advertising, including promotional expenses, as incurred. Advertising expenses were $15.5 million and $9.0 million during the three months ended March 31, 2022 and 2021, respectively. Leases Operating leases are included in operating lease right-of-use ("ROU") asset, accrued expenses, and operating lease liability – non-current portion in our balance sheets. ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. In determining the present value of lease payments, we use our incremental borrowing rate based on the information available at the lease commencement date as the rate implicit in the lease is not readily determinable. The determination of our incremental borrowing rate requires management judgment based on information available at lease commencement. The operating lease ROU assets also include adjustments for prepayments, accrued lease payments, and exclude lease incentives. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise such options. Operating lease cost is recognized on a straight-line basis over the expected lease term. Lease agreements entered into after the adoption of ASC 842 that include lease and non-lease components are accounted for as a single lease component. Lease agreements with a noncancelable term of less than 12 months are not recorded on our balance sheets. Income Taxes We account for income taxes using the liability method. Under this method, deferred tax assets and liabilities are determined based on the differences between the financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates that will be in effect when the differences are expected to reverse. Valuation allowances against deferred tax assets are established, when necessary, to reduce deferred tax assets to the amounts expected to be realized. As we have historically incurred operating losses, we have recorded a full valuation allowance against our net deferred tax assets, and there is no provision for income taxes other than minimal state taxes and an accrual for uncertain tax benefits. Our policy is to record interest and penalties expense related to uncertain tax positions as other expense in the statements of operations and comprehensive loss. Comprehensive Loss Comprehensive loss consists of net loss and changes in unrealized gains and losses due to interest rate fluctuations and other external factors on investments classified as available-for-sale. Accumulated other comprehensive loss is presented in the accompanying balance sheets as a component of stockholders' equity. Loss Per Share Basic net loss per share is computed by dividing the net loss by the weighted average number of shares of common stock outstanding during the period. Diluted net loss per share is computed by dividing the net loss by the weighted average number of shares of common stock and dilutive potential shares of common stock outstanding during the period. Because we have reported a net loss for all periods presented, diluted net loss per share is the same as basic net loss per share as all potentially dilutive shares consisting of outstanding stock options, unvested RSUs and PSUs, and shares issuable under our employee stock purchase plan were antidilutive in those periods. Recent Accounting Pronouncements We have reviewed and considered all recent accounting pronouncements that have not yet been adopted and believe there are none that could potentially have a material impact on our business practices, financial condition, results of operations, or disclosures. |
Investments
Investments | 3 Months Ended |
Mar. 31, 2022 | |
Investments, Debt and Equity Securities [Abstract] | |
Investments | Investments Our investments are classified as available-for-sale and consist of the following: March 31, 2022 Amortized Unrealized Gross Aggregate Cost Gains Losses Fair Value Long-Term: U.S. government securities $ 9,994 $ — $ (198) $ 9,796 Long-term investments $ 9,994 $ — $ (198) $ 9,796 December 31, 2021 Amortized Unrealized Gross Aggregate Cost Gains Losses Fair Value Long-Term: U.S. government securities $ 9,993 $ — $ (55) $ 9,938 Long-term investments $ 9,993 $ — $ (55) $ 9,938 As of March 31, 2022 and December 31, 2021, we had no investments with a contractual maturity of greater than two years. Currently, we do not intend to sell the investments and it is not more likely than not that we will be required to sell the investments before recovery of their amortized cost bases, which may be maturity. We do not consider those investments to be other-than-temporarily impaired as of March 31, 2022. At the end of each reporting period, we evaluate potential credit impairment on available-for-sale securities in an unrealized loss position, based on the expected cash flows to be collected and the yield-to-maturity on those securities. Securities with a valuation allowance for expected credit losses and deemed uncollectible are permanently written-down, and a reversal out of the valuation allowance occurs. |
Leases
Leases | 3 Months Ended |
Mar. 31, 2022 | |
Leases [Abstract] | |
Leases | Leases We lease approximately 70,000 square feet of office space for our corporate headquarters under non-cancelable operating leases. The leases expire May 31, 2028 with options to renew for one additional period of five years at the then-prevailing market rate. The exercise of the lease renewal options are at our sole discretion and were not included in the lease term for the calculation of the ROU asset and lease liability when the leases commenced as they were not reasonably certain of exercise. In addition to base rent, we also pay our proportionate share of the operating expenses, as defined in the leases. These payments are made monthly and adjusted annually to reflect actual charges incurred for operating expenses, such as common area maintenance, taxes, and insurance. In conjunction with the leases, the landlord agreed to provide total rent abatement of $2.3 million. The following table presents the lease balances within the balance sheets: March 31, 2022 December 31, 2021 Right-of-use assets: Operating lease right-of-use asset $ 7,659 $ 7,919 Operating lease liabilities: Accrued expenses 673 312 Operating lease liability, non-current portion 8,553 8,796 Total operating lease liabilities $ 9,226 $ 9,108 As of March 31, 2022, the remaining lease term was 6.2 years and the weighted average discount rate was 5.3%. The operating cash outflows from our operating leases were less than $0.1 million for both of the three-month periods ended March 31, 2022 and 2021. |
Long-Term Debt
Long-Term Debt | 3 Months Ended |
Mar. 31, 2022 | |
Long-term Debt, by Current and Noncurrent [Abstract] | |
Long-Term Debt | . Long-Term Debt In March 2019 we amended our $24.5 million term loan and security agreement, which we refer to as our credit facility. The debt was interest only until April 1, 2022 and matures on March 1, 2024. The basic interest rate is the 30-day U.S. LIBOR rate, subject to a floor of 7.60%. The agreement provides a mechanism for determining an alternative interest rate to replace the U.S. LIBOR rate upon the occurrence of certain circumstances. In addition to the principal and interest payments, we are required to pay a final payment fee of 3.50% on all amounts outstanding, which is being accreted using the effective interest rate method over the term of the credit facility and shall be due at the earlier of maturity or prepayment. Borrowings are prepayable at our option in whole, subject to a prepayment fee of 1.00%. As of March 31, 2022, we had $24.5 million outstanding under our credit facility. The credit facility includes affirmative and restrictive covenants and events of default, including the following events of default: payment defaults, breaches of covenants, judgment defaults, cross defaults to certain other contracts, certain events with respect to governmental approvals if such events could cause a material adverse change, a material impairment in the perfection or priority of the lender's security interest or in the value of the collateral, a material adverse change in the business, operations, or condition of us or any of our subsidiaries, and a material impairment of the prospect of repayment of the loans. Upon the occurrence of an event of default, a default increase in the interest rate of an additional 5.00% could be applied to the outstanding loan balance and the lender could declare all outstanding obligations immediately due and payable and take such other actions as set forth in the loan and security agreement. Our obligations under the credit facility are secured by a first priority security interest in substantially all of our assets, other than our intellectual property. There are no financial covenants contained in the loan and security agreement. We were in compliance with the affirmative and restrictive covenants as of March 31, 2022. |
Employee Retirement Plan
Employee Retirement Plan | 3 Months Ended |
Mar. 31, 2022 | |
Retirement Benefits [Abstract] | |
Employee Retirement Plan | Employee Retirement PlanWe sponsor a defined contribution employee retirement plan covering all of our full-time employees. The plan allows for eligible employees to defer a portion of their eligible compensation up to the maximum allowed by IRS Regulations. Beginning January 1, 2022, we elected to begin making voluntary matching contributions to the plan. We match 50% of the first 6% of each participating employee's contribution, up to 3% of eligible earnings. Our match contributions are made to funds designated by the participant, none of which are based on Inspire common stock. Discretionary contributions to the plan totaled $0.7 million for the three months ended March 31, 2022. |
Stock-Based Compensation
Stock-Based Compensation | 3 Months Ended |
Mar. 31, 2022 | |
Share-based Payment Arrangement [Abstract] | |
Stock-Based Compensation | Stock-Based Compensation We adopted the 2007 Stock Incentive Plan (the "2007 Plan") in November 2007, which terminated in accordance with its terms in November 2017; however, the outstanding stock options may continue to be exercised in accordance with their terms. Immediately following the termination of the 2007 Plan, we adopted the 2017 Stock Incentive Plan (the "2017 Plan"), which contains substantially similar terms and conditions as the 2007 Plan. Upon the IPO, no further grants were made under the 2017 Plan and we adopted the 2018 Stock Incentive Plan (the "2018 Plan"). The purpose of the 2018 Plan is to promote the interest of our company and our stockholders by aiding in attracting and retaining employees, officers, consultants, independent contractors, and directors capable of assuring the future success of our business and to afford such persons an opportunity to acquire a proprietary interest in our company. The board of directors may amend, alter, suspend, discontinue, or terminate the 2018 Plan at any time with the approval of our stockholders. A total of 1,386,809 shares of common stock were initially reserved for issuance under the 2018 Plan, and this share reserve will automatically be supplemented each January 1, commencing on January 1, 2019 and ending on and including January 1, 2028, by an amount of shares equal to the lesser of: a) 739,631 shares, b) 4% of the shares outstanding on the final day of the immediately preceding fiscal year and c) such smaller number of shares as determined by the board of directors. As of March 31, 2022, there were 3,953,906 shares reserved for issuance under the 2018 Plan, of which 1,605,667 shares were available for issuance. The following table presents the components and classification of stock-based compensation expense: Three Months Ended March 31, 2022 2021 Stock options $ 7,761 $ 5,657 Restricted stock units 565 19 Performance stock units 1,010 — Employee stock purchase plan 385 321 Total stock-based compensation expense $ 9,721 $ 5,997 Cost of goods sold $ 124 $ 79 Research and development 1,767 1,040 Selling, general and administrative 7,830 4,878 Total stock-based compensation expense $ 9,721 $ 5,997 Stock-based compensation expense is recognized on a straight-line basis over the vesting term for stock options and RSUs, and over the performance period based on the probability of achieving the performance objectives for PSUs, and is reduced by actual forfeitures as they occur. If there are any modifications or cancellations of the underlying unvested securities, we may be required to accelerate, increase, or cancel any remaining unearned stock compensation expense. Future stock-based compensation expense and unearned stock-based compensation will increase to the extent that we grant additional stock-based awards. Stock Options Options are granted at the exercise price, which is equal to the closing price of our stock on the date of grant. The stock options granted to employees include a four one three A summary of stock option activity and related information is as follows: Options Weighted Average Weighted Average Aggregate Intrinsic Outstanding at December 31, 2021 2,646,235 $ 80.41 7.1 $397,015 Granted 281,554 $ 228.40 Exercised (151,186) $ 20.74 $29,820 Forfeited/expired (13,388) $ 160.44 Outstanding at March 31, 2022 2,763,215 $ 98.37 7.3 $437,730 Exercisable at March 31, 2022 1,510,689 $ 49.56 6.3 $312,906 The aggregate intrinsic value of options exercised is the difference between the estimated fair market value of our common stock at the date of exercise and the exercise price for those options. The aggregate intrinsic value of outstanding options is the difference between the closing price as of the date outstanding and the exercise price of the underlying stock options. As of March 31, 2022, the amount of unearned stock-based compensation to be expensed from now through the year 2026 related to unvested employee and non-employee director stock options is $94.2 million, which we expect to recognize over a weighted average period of 2.5 years. We estimate the fair value of stock options on the date of grant using the Black-Scholes option pricing model using the fair market value of our common stock on the date of grant and a number of other assumptions. These assumptions include estimates regarding the expected term of the awards, estimates of the stock volatility over a duration that approximates the expected term of the awards, estimates of the risk-free rate, and estimates of expected dividend rates. The fair value of options granted to employees and non-employee directors was estimated as of the grant date using the Black-Scholes option pricing model using the following assumptions : Three Months Ended March 31, 2022 2021 Expected term (years) 6.25 6.25 Expected volatility 56.6 - 56.9% 55.2 - 55.7% Risk-free interest rate 1.75 - 2.40% 0.79 - 1.4% Expected dividend yield 0.0% 0.0% Weighted average fair value $125.75 $109.27 Expected Term — Due to our limited amount of historical exercise, forfeiture, and expiration activity, we have opted to use the "simplified method" for estimating the expected term of options, whereby the expected term equals the arithmetic average of the vesting terms and the original contractual term of the option. We will continue to analyze our expected term assumption as more historical data becomes available. Expected Volatility — Due to our limited operating history and a lack of company specific historical and implied volatility data, we have incorporated our historical stock trading volatility with those of a group of similar companies that are publicly traded for the calculation of volatility. When selecting this peer group of public companies on which we have based our expected stock price volatility, we generally selected companies with comparable characteristics to it, including enterprise value, stages of clinical development, risk profiles, position within the industry, and with historical share price information sufficient to meet the expected life of the stock-based awards. We will continue to analyze the historical stock price volatility assumption as more historical data for our common stock becomes available. Risk-Free Interest Rate — The risk-free rate assumption is based on the U.S. government Treasury instruments with maturities similar to the expected term of our stock options. Expected Dividend Yield — The expected dividend assumption is based on our history of not paying dividends and our expectation that we will not declare dividends for the foreseeable future. Restricted Stock Units RSUs are share awards that entitle the holder to receive freely tradable shares of our common stock upon vesting. The RSUs cannot be transferred and the awards are subject to forfeiture if the holder’s employment terminates prior to the release of the vesting restrictions. The RSUs generally include a three A summary of RSUs and related information is as follows: Restricted Stock Units Weighted Average Aggregate Intrinsic Value (in thousands) Unvested at December 31, 2021 2,275 $ 201.51 $ 524 Granted 59,496 $ 230.60 Vested (569) $ 201.51 Forfeited (417) $ 227.53 Unvested at March 31, 2022 60,785 $ 229.80 $ 15,603 The fair value of the RSUs is equal to the closing price of our common stock on the grant date. The aggregate intrinsic value of RSUs outstanding was based on our closing stock price on the last trading day of the period. As of March 31, 2022, there was $13.4 million of unrecognized stock-based compensation expense related to RSUs that is expected to be recognized over a weighted average period of 2.9 years. Performance Stock Units During the quarter ended March 31, 2022, the Company granted PSUs to officers and key employees. The number of PSUs that will ultimately be earned is based on our performance relative to a pre-established goal for the three three A summary of PSUs and related information is as follows: Performance Stock Units Weighted Average Aggregate Intrinsic Value (in thousands) Unvested at December 31, 2021 — $ — $ — Granted 78,351 $ 227.53 Unvested at March 31, 2022 78,351 $ 227.53 $ 20,112 There were no PSUs granted prior to 2022. The fair value of the PSUs is equal to the closing price of our common stock on the grant date. As of March 31, 2022, there was $23.1 million of unrecognized stock-based compensation expense related to outstanding PSUs that is expected to be recognized over a period of approximately 3.0 years. Employee Stock Purchase Plan Our employee stock purchase plan ("ESPP") allows participating employees to purchase shares of our common stock at a discount through payroll deductions. The plan is available to all of our U.S.-based full-time employees. Participating employees may purchase common stock, on a voluntary after-tax basis, at a price equal to 85% of the lower of the closing market price per share of our common stock on the first or last trading day of each stock purchase period. The plan provides for six-month purchase periods, beginning on January 1 and July 1 of each calendar year. A total of 277,362 shares of common stock were initially reserved for issuance under the ESPP, and this share reserve will automatically be supplemented each January 1, commencing on January 1, 2019 and ending on and including January 1, 2028, by an amount of shares equal to the lesser of: a) 184,908 shares, b) 1% of the shares outstanding on the final day of the immediately preceding calendar year and c) such smaller number of shares as the board of directors may determine. As of March 31, 2022, 929,504 shares were available for future issuance under the ESPP. The current purchase period under the ESPP began on January 1, 2022 and ends June 30, 2022. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes At both March 31, 2022 and December 31, 2021, a valuation allowance was recorded against all deferred tax assets due to our cumulative net loss position. We recorded income tax expense of $0.1 million and $0.0 million in the three months ended March 31, 2022 and 2021, respectively. The nominal income tax expense in those periods reflects minimal state income tax expense and an accrual for uncertain tax benefits. As of December 31, 2021, our gross federal net operating loss carryforward was $286.3 million, which will expire at various dates beginning in 2028. In addition, net operating loss carryforwards for state income tax purposes of $198.2 million that include net operating losses will begin to expire in 2023. We also have gross research and development credit carryforwards of $6.7 million as of December 31, 2021, which will expire at various dates beginning in 2033. Utilization of the net operating loss carryforwards may be subject to an annual limitation due to the ownership change limitations provided by Section 382 of the Internal Revenue Code of 1986 and similar state provisions. We have not performed a detailed analysis to determine whether an ownership change has occurred. Such a change of ownership would limit our utilization of the net operating losses and could be triggered by subsequent sales of securities by us or our stockholders. Realization of the deferred tax assets is dependent upon the generation of future taxable income, if any, the amount and timing of which are uncertain. Based on available objective evidence and cumulative losses, we believe it is more likely than not that the deferred tax assets are not recognizable and will not be recognizable until we have sufficient taxable income. Accordingly, the net deferred tax assets have been fully offset by a valuation allowance. We had $0.1 million of gross unrecognized tax benefits as of each of March 31, 2022 and December 31, 2021. We file income tax returns in the applicable jurisdictions. The 2018 to 2020 tax years remain open to examination by the major taxing authorities to which we are subject. We do not expect a significant change to our unrecognized tax benefits over the next 12 months. |
Segment Reporting and Revenue D
Segment Reporting and Revenue Disaggregation | 3 Months Ended |
Mar. 31, 2022 | |
Segment Reporting [Abstract] | |
Segment Reporting and Revenue Disaggregation | Segment Reporting and Revenue Disaggregation We operate our business as one reporting segment. An operating segment is defined as a component of an enterprise for which separate discrete financial information is available and evaluated regularly by the chief operating decision maker, or decision-making group, in deciding how to allocate resources and in assessing performance. Segment information is consistent with how management reviews the business, makes investing and resource allocation decisions and assesses operating performance. We sell our Inspire system to hospitals and ambulatory surgery centers in the U.S. and in select countries in Europe through a direct sales organization, and in Japan through a distributor. Revenue by geographic region is as follows: Three Months Ended March 31, 2022 2021 United States $ 66,426 $ 37,769 All other countries 2,956 2,583 Total revenue $ 69,382 $ 40,352 All of our long-lived assets are located in the U.S. |
Loss Per Share
Loss Per Share | 3 Months Ended |
Mar. 31, 2022 | |
Earnings Per Share [Abstract] | |
Loss Per Share | Loss Per Share Basic net loss per share is computed by dividing the net loss by the weighted average number of shares of common stock outstanding during the period. Diluted net loss per share is computed by dividing the net loss by the weighted average number of shares of common stock and dilutive potential shares of common stock outstanding during the period. Because we have reported a net loss for all periods presented, diluted net loss per share is the same as basic net loss per share as all of the following potentially dilutive shares were antidilutive in those periods. The following common stock-based awards were excluded from the computation of diluted net loss per common share for the periods presented because including them would have been anti-dilutive: March 31, 2022 2021 Common stock options outstanding 2,763,215 2,750,375 Unvested restricted stock units 60,785 2,275 Unvested performance stock units 78,351 — Shares issuable under the ESPP 5,435 5,785 Total 2,907,786 2,758,435 |
Subsequent Event
Subsequent Event | 3 Months Ended |
Mar. 31, 2022 | |
Subsequent Events [Abstract] | |
Subsequent Event | Subsequent Event On April 27, 2022, Inspire invested $10.0 million in a minority interest of the private company EnsoData, Inc. This investment is intended to support the advancement of our digital health platform. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2022 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the U.S. (“GAAP”) for interim financial reporting and as required by the rules and regulations of the Securities and Exchange Commission (“SEC”). Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (including those which are normal and recurring) considered necessary for a fair presentation of the interim financial information have been included. When preparing financial statements in conformity with GAAP, we must make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, expenses, and related disclosures at the date of the financial statements. Actual results could differ from those estimates. Additionally, the results of operations for the interim periods are not necessarily indicative of the operating results for the full fiscal year or any future periods. For a complete discussion of our significant accounting policies and other information, the unaudited financial statements and notes thereto should be read in conjunction with the audited financial statements included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2021. |
Cash and Cash Equivalents | Cash and Cash Equivalents We consider all highly liquid securities, readily convertible to cash, that have original maturities of 90 days or less from the date of purchase to be cash equivalents. The carrying amount reported in the balance sheets for cash is cost, which approximates fair value. |
Foreign Currency | Foreign CurrencySales and expenses denominated in foreign currencies are translated at average exchange rates in effect throughout the year. Foreign currency transaction gains and losses are included in other expense, net, in the statements of operations and comprehensive loss. Assets and liabilities of foreign operations are remeasured at period-end exchange rates with the impacts of foreign currency remeasurement recognized in other expense, net in the statements of operations and comprehensive loss. |
Investments | Investments At both March 31, 2022 and December 31, 2021, our long-term investments consisted of U.S. government securities. Investments are reported at their estimated fair market values which are based on quoted, active or inactive market prices when available. Any unrealized gains and losses due to interest rate fluctuations and other external factors are reported as a separate component of accumulated other comprehensive loss. We had $0.2 million and $0.1 million of unrecognized loss in accumulated other comprehensive loss at March 31, 2022 and |
Fair Value of Financial Instruments | Fair Value of Financial Instruments We measure certain financial assets and liabilities at fair value on a recurring basis, including cash equivalents and investments. Fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or a liability. A three-tier fair value hierarchy is established as a basis for considering such assumptions and for inputs used in the valuation methodologies in measuring fair value: Level 1: Observable inputs, such as quoted prices (unadjusted) for identical assets or liabilities in active markets. Level 2: Inputs other than quoted prices in active markets for identical assets and liabilities that are observable either directly or indirectly for substantially the full term of the asset or liability. Level 3: Unobservable inputs that are supported by little or no market activities, which would require us to develop our own assumptions. We use the methods and assumptions described below in determining the fair value of our financial instruments. Money market funds: Fair values of money market funds are based on quoted market prices in active markets. These are included as Level 1 measurements in the tables below. U.S. government securities: Consists of U.S. government Treasury bills with original maturities of less than two years. These are included as a Level 1 measurement in the tables below. |
Concentration of Credit Risk | Concentration of Credit Risk Financial instruments, which potentially subject us to concentrations of credit risk, consist principally of cash equivalents, investments, and accounts receivable. Our investment policy limits investments to certain types of debt securities issued by the U.S. government and its agencies, corporations with investment-grade credit ratings, or commercial paper and money market funds issued by the highest quality financial and non-financial companies. We place restrictions on maturities and concentration by type and issuer. We are exposed to credit risk in the event of a default by the issuers of these securities to the extent recorded on the balance sheets. However, as of March 31, 2022 and December 31, 2021, we limited our credit risk associated with cash equivalents by placing investments with banks we believe are highly creditworthy. We believe that the credit risk in our accounts receivable is mitigated by our credit evaluation process, relatively short collection terms, and dispersion of our customer base. We generally do not require collateral, and losses on accounts receivable have historically not been significant. |
Accounts Receivable and Allowance for Expected Credit Losses | Accounts Receivable and Allowance for Expected Credit Losses Trade accounts receivable are recorded at the invoiced amount and do not bear interest. Customer credit terms are established prior to shipment with the general standard being net 30 days. Collateral or any other security to support payment of these receivables generally is not required. |
Inventories | We regularly review inventory quantities on-hand for excess and obsolete inventory and, when circumstances indicate, incur charges to write down inventories to their net realizable value. The determination of a reserve for excess and obsolete inventory involves management exercising judgment to determine the required reserve, considering future demand, product life cycles, introduction of new products and current market conditions. |
Property and Equipment | Depreciation is determined using the straight-line method over the estimated useful lives of the respective assets, generally three |
Impairment of Long-lived Assets | Impairment of Long-lived Assets Long-lived assets consist primarily of property and equipment and operating lease right-of-use asset and are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an |
Revenue Recognition | Revenue Recognition We recognize revenue in accordance with ASC Topic 606, Revenue from Contracts with Customers ("ASC 606"). Revenues from product sales are recognized when the customer obtains control of the product, which occurs at a point in time, either upon shipment of the product or receipt of the product, depending on shipment terms. Our standard shipping terms are free on board shipping point, unless the customer requests that control and title to the inventory transfer upon delivery. In those cases where shipping and handling costs are billed to customers, we classify the amounts billed as a component of cost of goods sold. Revenue is measured as the amount of consideration we expect to receive, adjusted for any applicable estimates of variable consideration and other factors affecting the transaction price, which is based on the invoiced price, in exchange for transferring products. All revenue is recognized when we satisfy our performance obligations under the contract. The majority of our contracts have a single performance obligation and are short term in nature. Sales taxes and value added taxes in foreign jurisdictions that are collected from customers and remitted to governmental authorities are accounted for on a net basis and therefore are excluded from net sales. Shipping and handling costs associated with outbound freight after control over a product has transferred to a customer are accounted for as a fulfillment cost and are included in cost of goods sold. Variable consideration related to certain customer sales incentives is estimated based on the amounts expected to be paid based on the agreement with the customer using probability assessments. We offer customers a limited right of return for our product in case of non-conformity or performance issues. We estimate the amount of our product sales that may be returned by our customers based on historical sales and returns. As our historical product returns to date have been immaterial, we have not recorded a reduction in revenue related to variable consideration for product returns. |
Cost of Goods Sold | Cost of Goods Sold Cost of goods sold consists primarily of acquisition costs for the components of the Inspire system, overhead costs, scrap and inventory obsolescence, warranty replacement costs, as well as distribution-related expenses such as logistics and shipping costs, net of shipping costs charged to customers. The overhead costs include the cost of material procurement, depreciation expense for production equipment, and operations supervision and management personnel, including employee compensation, stock-based compensation, supplies, and travel. |
Research and Development | Research and Development Research and development expenses consist primarily of product development, clinical and regulatory affairs, quality assurance, consulting services, and other costs associated with products and technologies in development. These expenses include employee compensation, including stock-based compensation, supplies, materials, consulting, and travel expenses related to research and development programs. Clinical expenses include clinical trial design, clinical site reimbursement, data management, travel expenses, and the cost of manufacturing products for clinical trials. |
Stock-Based Compensation | Stock-Based Compensation We maintain an equity incentive plan to provide lon g-term incentives for eligible employees, consultants, and members of the board of directors. The plan allows for the issuance of restricted stock units ("RSUs"), performance stock units ("PSUs"), and non-statutory and incentive stock options to employees, and RSUs, PSU's, and non-statutory stock options to consultants and directors. We also offer an employee stock purchase plan ("ESPP") which allows participating employees to purchase shares of our common stock at a discount through payroll deductions. We have not granted any stock-based awards to our consultants. We recognize equity-based compensation expense for awards of equity instruments based on the grant date fair value of those awards in accordance with ASC Topic 718, Stock Compensation ("ASC 718"). ASC 718 requires all equity-based compensation awards, including grants of RSUs, PSUs, and stock options, to be recognized as expense in the statements of operations and comprehensive loss based on their grant date fair values. We estimate the fair value of stock options using the Black-Scholes option pricing model and the fair value of RSUs and PSUs is equal to the closing price of our common stock on the grant date. The fair value of each purchase under the employee stock purchase plan is estimated at the beginning of the offering period using the Black-Scholes option pricing model. Stock-based compensation expense is recognized on a straight-line basis over the vesting term for stock options and RSUs, and over the vesting and performance period based on the probability of achieving the performance objectives for PSUs. We account for award forfeitures as they occur. |
Advertising Expenses | Advertising ExpensesWe expense the costs of advertising, including promotional expenses, as incurred. |
Leases | Leases Operating leases are included in operating lease right-of-use ("ROU") asset, accrued expenses, and operating lease liability – non-current portion in our balance sheets. ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. In determining the present value of lease payments, we use our incremental borrowing rate based on the information available at the lease commencement date as the rate implicit in the lease is not readily determinable. The determination of our incremental borrowing rate requires management judgment based on information available at lease commencement. The operating lease ROU assets also include adjustments for prepayments, accrued lease payments, and exclude lease incentives. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise such options. Operating lease cost is recognized on a straight-line basis over the expected lease term. Lease agreements entered into after the adoption of ASC 842 that include lease and non-lease components are accounted for as a single lease component. Lease agreements with a noncancelable term of less than 12 months are not recorded on our balance sheets. |
Income Taxes | Income Taxes We account for income taxes using the liability method. Under this method, deferred tax assets and liabilities are determined based on the differences between the financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates that will be in effect when the differences are expected to reverse. Valuation allowances against deferred tax assets are established, when necessary, to reduce deferred tax assets to the amounts expected to be realized. As we have historically incurred operating losses, we have recorded a full valuation allowance against our net deferred tax assets, and there is no provision for income taxes other than minimal state taxes and an accrual for uncertain tax benefits. Our policy is to record interest and penalties expense related to uncertain tax positions as other expense in the statements of operations and comprehensive loss. |
Comprehensive Loss | Comprehensive Loss Comprehensive loss consists of net loss and changes in unrealized gains and losses due to interest rate fluctuations and other external factors on investments classified as available-for-sale. Accumulated other comprehensive loss is presented in the accompanying balance sheets as a component of stockholders' equity. |
Loss Per Share | Loss Per Share Basic net loss per share is computed by dividing the net loss by the weighted average number of shares of common stock outstanding during the period. Diluted net loss per share is computed by dividing the net loss by the weighted average number of shares of common stock and dilutive potential shares of common stock outstanding during the period. Because we have reported a net loss for all periods presented, diluted net loss per share is the same as basic net loss per share as all potentially dilutive shares consisting of outstanding stock options, unvested RSUs and PSUs, and shares issuable under our employee stock purchase plan were antidilutive in those periods. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements We have reviewed and considered all recent accounting pronouncements that have not yet been adopted and believe there are none that could potentially have a material impact on our business practices, financial condition, results of operations, or disclosures. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Accounting Policies [Abstract] | |
Schedule of assets and liabilities measured at fair value on a recurring basis | The following tables set forth by level within the fair value hierarchy our assets that are measured on a recurring basis and reported at fair value as of March 31, 2022 and December 31, 2021. Assets are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. Fair Value Measurements as of March 31, 2022 Estimated Level 1 Level 2 Level 3 Cash equivalents: Money market funds $ 189,379 $ 189,379 $ — $ — Total cash equivalents 189,379 189,379 — — Investments: U.S. government securities 9,796 9,796 — — Total investments 9,796 9,796 — — Total cash equivalents and investments $ 199,175 $ 199,175 $ — $ — Fair Value Measurements as of December 31, 2021 Estimated Level 1 Level 2 Level 3 Cash equivalents: Money market funds $ 189,369 $ 189,369 $ — $ — Total cash equivalents 189,369 189,369 — — Investments: U.S. government securities 9,938 9,938 — — Total investments 9,938 9,938 — — Total cash equivalents and investments $ 199,307 $ 199,307 $ — $ — |
Schedule of inventory | Inventories are valued at the lower of cost or net realizable value, computed on a first-in, first-out basis and consisted of the following: March 31, 2022 December 31, 2021 Raw materials $ 5,342 $ 3,119 Finished goods 16,856 14,112 Total inventories, net of reserves $ 22,198 $ 17,231 |
Schedule of property and equipment | Property and equipment are stated at cost, less accumulated depreciation and amortization and consisted of the following: March 31, 2022 December 31, 2021 Computer equipment and software $ 1,500 $ 1,397 Manufacturing equipment 5,238 4,436 Other equipment 311 249 Leasehold improvements 281 281 Construction in process 5,415 5,175 Property and equipment, cost 12,745 11,538 Less: accumulated depreciation and amortization (3,411) (3,052) Property and equipment, net $ 9,334 $ 8,486 |
Schedule of accrued expenses | Accrued expenses consisted of the following: March 31, 2022 December 31, 2021 Payroll related $ 10,565 $ 17,655 Interest 160 160 Product warranty liability 438 468 Operating lease liability, current portion 673 312 Other accrued expenses 2,060 1,859 Total accrued expenses $ 13,896 $ 20,454 |
Schedule of Product Warranty Liability | The following table shows the changes in our estimated product warranty liability accrual, included in accrued liabilities: Three Months Ended March 31, 2022 2021 Balance at beginning of period $ 468 $ 159 Accruals of warranties issued 11 178 Settlements of warranty claims (41) (71) Balance at the end of the period $ 438 $ 266 |
Investments (Tables)
Investments (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Investments, Debt and Equity Securities [Abstract] | |
Components of Investments Available-for-sale | Our investments are classified as available-for-sale and consist of the following: March 31, 2022 Amortized Unrealized Gross Aggregate Cost Gains Losses Fair Value Long-Term: U.S. government securities $ 9,994 $ — $ (198) $ 9,796 Long-term investments $ 9,994 $ — $ (198) $ 9,796 December 31, 2021 Amortized Unrealized Gross Aggregate Cost Gains Losses Fair Value Long-Term: U.S. government securities $ 9,993 $ — $ (55) $ 9,938 Long-term investments $ 9,993 $ — $ (55) $ 9,938 |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Leases [Abstract] | |
Lease Balances within the Balance Sheets | The following table presents the lease balances within the balance sheets: March 31, 2022 December 31, 2021 Right-of-use assets: Operating lease right-of-use asset $ 7,659 $ 7,919 Operating lease liabilities: Accrued expenses 673 312 Operating lease liability, non-current portion 8,553 8,796 Total operating lease liabilities $ 9,226 $ 9,108 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of stock-based compensation expense recognized | The following table presents the components and classification of stock-based compensation expense: Three Months Ended March 31, 2022 2021 Stock options $ 7,761 $ 5,657 Restricted stock units 565 19 Performance stock units 1,010 — Employee stock purchase plan 385 321 Total stock-based compensation expense $ 9,721 $ 5,997 Cost of goods sold $ 124 $ 79 Research and development 1,767 1,040 Selling, general and administrative 7,830 4,878 Total stock-based compensation expense $ 9,721 $ 5,997 |
Summary of the company's stock option activity and related information | A summary of stock option activity and related information is as follows: Options Weighted Average Weighted Average Aggregate Intrinsic Outstanding at December 31, 2021 2,646,235 $ 80.41 7.1 $397,015 Granted 281,554 $ 228.40 Exercised (151,186) $ 20.74 $29,820 Forfeited/expired (13,388) $ 160.44 Outstanding at March 31, 2022 2,763,215 $ 98.37 7.3 $437,730 Exercisable at March 31, 2022 1,510,689 $ 49.56 6.3 $312,906 |
Summary of weighted average assumptions for fair value of options granted | The fair value of options granted to employees and non-employee directors was estimated as of the grant date using the Black-Scholes option pricing model using the following assumptions : Three Months Ended March 31, 2022 2021 Expected term (years) 6.25 6.25 Expected volatility 56.6 - 56.9% 55.2 - 55.7% Risk-free interest rate 1.75 - 2.40% 0.79 - 1.4% Expected dividend yield 0.0% 0.0% Weighted average fair value $125.75 $109.27 |
Schedule of restricted stock units activity | A summary of RSUs and related information is as follows: Restricted Stock Units Weighted Average Aggregate Intrinsic Value (in thousands) Unvested at December 31, 2021 2,275 $ 201.51 $ 524 Granted 59,496 $ 230.60 Vested (569) $ 201.51 Forfeited (417) $ 227.53 Unvested at March 31, 2022 60,785 $ 229.80 $ 15,603 |
Summary of PSU's and related information | A summary of PSUs and related information is as follows: Performance Stock Units Weighted Average Aggregate Intrinsic Value (in thousands) Unvested at December 31, 2021 — $ — $ — Granted 78,351 $ 227.53 Unvested at March 31, 2022 78,351 $ 227.53 $ 20,112 |
Segment Reporting and Revenue_2
Segment Reporting and Revenue Disaggregation (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Segment Reporting [Abstract] | |
Schedule of revenue by geographic region | Revenue by geographic region is as follows: Three Months Ended March 31, 2022 2021 United States $ 66,426 $ 37,769 All other countries 2,956 2,583 Total revenue $ 69,382 $ 40,352 |
Loss Per Share (Tables)
Loss Per Share (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Earnings Per Share [Abstract] | |
Schedule of dilutive securities excluded from computations of diluted weighted average shares outstanding | The following common stock-based awards were excluded from the computation of diluted net loss per common share for the periods presented because including them would have been anti-dilutive: March 31, 2022 2021 Common stock options outstanding 2,763,215 2,750,375 Unvested restricted stock units 60,785 2,275 Unvested performance stock units 78,351 — Shares issuable under the ESPP 5,435 5,785 Total 2,907,786 2,758,435 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Investments (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | |
Accounting Policies [Abstract] | |||
Unrecognized loss in accumulated other comprehensive loss | $ 200,000 | $ 100,000 | |
Realized gains, net | 0 | $ 0 | |
Allowance for credit losses | $ 0 | $ 0 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Fair Value of Financial Instruments (Details) - Recurring basis - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Cash equivalents: | ||
Total cash equivalents | $ 189,379 | $ 189,369 |
Investments: | ||
Total investments | 9,796 | 9,938 |
Total cash equivalents and investments | 199,175 | 199,307 |
U.S. government securities | ||
Investments: | ||
Total investments | 9,796 | 9,938 |
Money market funds | ||
Cash equivalents: | ||
Total cash equivalents | 189,379 | |
Level 1 | ||
Cash equivalents: | ||
Total cash equivalents | 189,379 | 189,369 |
Investments: | ||
Total investments | 9,796 | 9,938 |
Total cash equivalents and investments | 199,175 | 199,307 |
Level 1 | U.S. government securities | ||
Investments: | ||
Total investments | 9,796 | 9,938 |
Level 1 | Money market funds | ||
Cash equivalents: | ||
Total cash equivalents | 189,379 | |
Level 2 | ||
Cash equivalents: | ||
Total cash equivalents | 0 | 0 |
Investments: | ||
Total investments | 0 | 0 |
Total cash equivalents and investments | 0 | 0 |
Level 2 | U.S. government securities | ||
Investments: | ||
Total investments | 0 | 0 |
Level 2 | Money market funds | ||
Cash equivalents: | ||
Total cash equivalents | 0 | |
Level 3 | ||
Cash equivalents: | ||
Total cash equivalents | 0 | 0 |
Investments: | ||
Total investments | 0 | 0 |
Total cash equivalents and investments | 0 | 0 |
Level 3 | U.S. government securities | ||
Investments: | ||
Total investments | 0 | $ 0 |
Level 3 | Money market funds | ||
Cash equivalents: | ||
Total cash equivalents | $ 0 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Inventories (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Accounting Policies [Abstract] | ||
Raw materials | $ 5,342 | $ 3,119 |
Finished goods | 16,856 | 14,112 |
Total inventories, net of reserves | 22,198 | 17,231 |
Reserve for excess and obsolete inventory | $ 400 | $ 300 |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies - Property and Equipment (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | |
Property and Equipment | |||
Property and equipment, cost | $ 12,745 | $ 11,538 | |
Less: accumulated depreciation and amortization | (3,411) | (3,052) | |
Property and equipment, net | 9,334 | 8,486 | |
Depreciation and amortization expenses | 400 | $ 200 | |
Computer equipment and software | |||
Property and Equipment | |||
Property and equipment, cost | 1,500 | 1,397 | |
Manufacturing equipment | |||
Property and Equipment | |||
Property and equipment, cost | 5,238 | 4,436 | |
Other equipment | |||
Property and Equipment | |||
Property and equipment, cost | 311 | 249 | |
Leasehold improvements | |||
Property and Equipment | |||
Property and equipment, cost | 281 | 281 | |
Construction in process | |||
Property and Equipment | |||
Property and equipment, cost | $ 5,415 | $ 5,175 | |
Minimum | |||
Property and Equipment | |||
Estimated useful lives | 3 years | ||
Maximum | |||
Property and Equipment | |||
Estimated useful lives | 5 years |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies - Accrued Expenses (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Accounting Policies [Abstract] | ||
Payroll related | $ 10,565 | $ 17,655 |
Interest | 160 | 160 |
Product warranty liability | 438 | 468 |
Operating lease liability, current portion | 673 | 312 |
Other accrued expenses | 2,060 | 1,859 |
Total accrued expenses | $ 13,896 | $ 20,454 |
Summary of Significant Accoun_9
Summary of Significant Accounting Policies - Product Warranty Accrual (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Accounting Policies [Abstract] | ||
Balance at beginning of period | $ 468 | $ 159 |
Accruals of warranties issued | 11 | 178 |
Settlements of warranty claims | (41) | (71) |
Balance at the end of the period | $ 438 | $ 266 |
Summary of Significant Accou_10
Summary of Significant Accounting Policies - Advertising Expenses (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Advertising Expenses | ||
Advertising expenses | $ 15.5 | $ 9 |
Investments (Details)
Investments (Details) - USD ($) | Mar. 31, 2022 | Dec. 31, 2021 |
Debt Securities, Available-for-sale [Line Items] | ||
Investments with maturity greater than one year | $ 0 | $ 0 |
Long-term Debt | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 9,994,000 | 9,993,000 |
Unrealized Gross Gains | 0 | 0 |
Unrealized Gross Losses | (198,000) | (55,000) |
Fair Value | 9,796,000 | 9,938,000 |
U.S. government securities | Long-term Debt | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 9,994,000 | 9,993,000 |
Unrealized Gross Gains | 0 | 0 |
Unrealized Gross Losses | (198,000) | (55,000) |
Fair Value | $ 9,796,000 | $ 9,938,000 |
Leases - Narrative (Details)
Leases - Narrative (Details) ft² in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2022USD ($)ft²renewal_option | Mar. 31, 2021USD ($) | |
Leases [Abstract] | ||
Operating lease, office space (square feet) | ft² | 70 | |
Number of renewal options | renewal_option | 1 | |
Renewal term | 5 years | |
Incentive from landlord, rent abatement | $ 2,300 | |
Remaining lease term | 6 years 2 months 12 days | |
Discount rate | 5.30% | |
Operating lease payments (less than) | $ 100 | $ 100 |
Leases - Assets and Liabilities
Leases - Assets and Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Right-of-use assets: | ||
Operating lease right-of-use asset | $ 7,659 | $ 7,919 |
Operating lease liabilities: | ||
Accrued expenses | 673 | 312 |
Operating lease liability, non-current portion | 8,553 | 8,796 |
Total operating lease liabilities | $ 9,226 | $ 9,108 |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List] | Accrued expenses | Accrued expenses |
Long-Term Debt (Details)
Long-Term Debt (Details) - USD ($) | 1 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2022 | Mar. 27, 2019 | |
Credit Facility | |||
Outstanding under credit facility | $ 24,500,000 | ||
Term loan facility | |||
Credit Facility | |||
Increase in interest rate in default | 5.00% | ||
Term loan facility | March 2019 Amendment to Loan and Security Agreement | |||
Credit Facility | |||
Maximum borrowing amount under credit facility | $ 24,500,000 | ||
Final payment percentage | 3.50% | ||
Prepayment fee | 1.00% | ||
Term loan facility | Minimum | March 2019 Amendment to Loan and Security Agreement | |||
Credit Facility | |||
Basic interest rate | 7.60% |
Employee Retirement Plan (Detai
Employee Retirement Plan (Details) - USD ($) $ in Thousands | Jan. 01, 2022 | Mar. 31, 2022 |
Retirement Benefits [Abstract] | ||
Employer matching contribution, percent of employees' contribution | 50.00% | |
Employee contribution, maximum eligible for employer match, percent | 6.00% | |
Employer matching contribution, percent of employees' earnings | 3.00% | |
Employer discretionary contribution | $ 700 |
Stock-Based Compensation - Addi
Stock-Based Compensation - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2022 | Jan. 01, 2019 | Dec. 31, 2018 | |
Stock Options | |||
Unearned stock-based compensation | $ 94.2 | ||
Weighted average recognition period | 2 years 6 months | ||
Options | |||
Stock Options | |||
Contractual life of stock options | 10 years | ||
Options | Directors | Minimum | |||
Stock Options | |||
Service period | 1 year | ||
Options | Directors | Maximum | |||
Stock Options | |||
Service period | 3 years | ||
Options | Vesting after first year of service | |||
Stock Options | |||
Service period | 4 years | ||
Percentage of shares to vest | 25.00% | ||
Options | Vesting in years two through four | |||
Stock Options | |||
Vesting period | 36 months | ||
Stock Incentive Plan 2018 | |||
Stock Options | |||
Number of shares reserved for issuance (in shares) | 3,953,906 | 1,386,809 | |
Number of additional shares reserved for issuance, maximum (in shares) | 739,631 | ||
Number of additional shares reserved for issuance, percentage, maximum | 4.00% | ||
Number of shares available for issuance (in shares) | 1,605,667 |
Stock-Based Compensation - Stoc
Stock-Based Compensation - Stock-Based Compensation Expense Recognized (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Stock Options | ||
Total stock-based compensation expense | $ 9,721 | $ 5,997 |
Cost of goods sold | ||
Stock Options | ||
Total stock-based compensation expense | 124 | 79 |
Research and development | ||
Stock Options | ||
Total stock-based compensation expense | 1,767 | 1,040 |
Selling, general and administrative | ||
Stock Options | ||
Total stock-based compensation expense | 7,830 | 4,878 |
Stock options | ||
Stock Options | ||
Total stock-based compensation expense | 7,761 | 5,657 |
Restricted stock units | ||
Stock Options | ||
Total stock-based compensation expense | 565 | 19 |
Performance stock units | ||
Stock Options | ||
Total stock-based compensation expense | 1,010 | 0 |
Employee stock purchase plan | ||
Stock Options | ||
Total stock-based compensation expense | $ 385 | $ 321 |
Stock-Based Compensation - St_2
Stock-Based Compensation - Stock Option Activity (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2022 | Dec. 31, 2021 | |
Options | ||
Outstanding at beginning of the year (in shares) | 2,646,235 | |
Granted (in shares) | 281,554 | |
Exercised (in shares) | (151,186) | |
Forfeited/expired (in shares) | (13,388) | |
Outstanding at ending of the year (in shares) | 2,763,215 | 2,646,235 |
Exercisable (in shares) | 1,510,689 | |
Weighted Average Exercise Price | ||
Outstanding, beginning of the period (in dollars per share) | $ 80.41 | |
Granted (in dollars per share) | 228.40 | |
Exercised (in dollars per share) | 20.74 | |
Forfeited/expired (in dollars per share) | 160.44 | |
Outstanding, end of the period (in dollars per share) | 98.37 | $ 80.41 |
Exercisable (in dollars per share) | $ 49.56 | |
Weighted Average Remaining Contractual Term | ||
Outstanding | 7 years 3 months 18 days | 7 years 1 month 6 days |
Exercisable | 6 years 3 months 18 days | |
Aggregate Intrinsic Value | ||
Outstanding, beginning of period | $ 397,015 | |
Exercised | 29,820 | |
Outstanding, end of period | 437,730 | $ 397,015 |
Exercisable | $ 312,906 |
Stock-Based Compensation - Assu
Stock-Based Compensation - Assumptions Used to Calculate Fair Value of Options (Details) - Options - $ / shares | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Weighted average assumptions | ||
Expected dividend yield | 0.00% | 0.00% |
Weighted average fair value (in dollars per share) | $ 125.75 | $ 109.27 |
Minimum | ||
Weighted average assumptions | ||
Expected term (years) | 6 years 3 months | 6 years 3 months |
Expected volatility | 56.60% | 55.20% |
Risk-free interest rate | 1.75% | 0.79% |
Maximum | ||
Weighted average assumptions | ||
Expected volatility | 56.90% | 55.70% |
Risk-free interest rate | 2.40% | 1.40% |
Stock-Based Compensation - Rest
Stock-Based Compensation - Restricted Stock Units (Details) $ / shares in Units, $ in Thousands | 3 Months Ended |
Mar. 31, 2022USD ($)$ / sharesshares | |
Restricted Stock Units | |
Vested (in shares) | (569) |
Aggregate Intrinsic Value | |
Unearned stock-based compensation | $ | $ 94,200 |
Weighted average recognition period | 2 years 6 months |
Restricted stock units | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Service period | 3 years |
Restricted Stock Units | |
Unvested at beginning of period (in shares) | 2,275 |
Granted (in shares) | 59,496 |
Vested (in shares) | (569) |
Forfeited (in shares) | (417) |
Unvested at end of period (in shares) | 60,785 |
Weighted Average Grant Date Fair Value | |
Unvested at beginning of period (in dollars per share) | $ / shares | $ 201.51 |
Granted (in dollars per share) | $ / shares | 230.60 |
Vested (in dollars per share) | $ / shares | 201.51 |
Forfeited (in dollars per share) | $ / shares | 227.53 |
Unvested at end of period (in dollars per share) | $ / shares | $ 229.80 |
Aggregate Intrinsic Value | |
Unvested at beginning of period | $ | $ 524 |
Unvested at end of period | $ | 15,603 |
Unearned stock-based compensation | $ | $ 13,400 |
Weighted average recognition period | 2 years 10 months 24 days |
Stock-Based Compensation - Perf
Stock-Based Compensation - Performance Stock Units (Details) $ / shares in Units, $ in Thousands | 3 Months Ended |
Mar. 31, 2022USD ($)$ / sharesshares | |
Aggregate Intrinsic Value | |
Unearned stock-based compensation | $ 94,200 |
Weighted average recognition period | 2 years 6 months |
Performance stock units | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Revenue goal, performance period | 3 years |
Restricted Stock Units | |
Unvested at beginning of period (in shares) | shares | 0 |
Granted (in shares) | shares | 78,351 |
Unvested at end of period (in shares) | shares | 78,351 |
Weighted Average Grant Date Fair Value | |
Unvested at beginning of period (in dollars per share) | $ / shares | $ 0 |
Granted (in dollars per share) | $ / shares | 227.53 |
Unvested at end of period (in dollars per share) | $ / shares | $ 227.53 |
Aggregate Intrinsic Value | |
Unvested at beginning of period | $ 0 |
Unvested at end of period | 20,112 |
Unearned stock-based compensation | $ 23,100 |
Weighted average recognition period | 3 years |
Performance stock units | Minimum | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Performance target, percentage | 0.00% |
Performance stock units | Maximum | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Performance target, percentage | 200.00% |
Stock-Based Compensation - Empl
Stock-Based Compensation - Employee Stock Purchase Plan (Details) - Employee Stock Purchase Plan - shares | 3 Months Ended | |
Mar. 31, 2022 | Jan. 01, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Employee stock purchase plan, percent | 85.00% | |
Number of shares reserved for issuance (in shares) | 929,504 | 277,362 |
Number of additional shares reserved for issuance, maximum (in shares) | 184,908 | |
Number of additional shares reserved for issuance, percentage, maximum | 1.00% |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | |
Operating Loss Carryforwards [Line Items] | |||
Income tax expense | $ 100,000 | $ 23,000 | |
Unrecognized tax benefits | 100,000 | $ 100,000 | |
Significant change to unrecognized tax benefits over the next 12 months | $ 0 | ||
Federal | |||
Operating Loss Carryforwards [Line Items] | |||
Net operating loss carryforwards | 286,300,000 | ||
State | |||
Operating Loss Carryforwards [Line Items] | |||
Net operating loss carryforwards | 198,200,000 | ||
R&D credit | |||
Operating Loss Carryforwards [Line Items] | |||
Credit carryforwards | $ 6,700,000 |
Segment Reporting and Revenue_3
Segment Reporting and Revenue Disaggregation (Details) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022USD ($)segment | Mar. 31, 2021USD ($) | |
Segment Reporting [Abstract] | ||
Number of reporting segments | segment | 1 | |
Segment Reporting and Significant Customers | ||
Revenue | $ 69,382 | $ 40,352 |
United States | ||
Segment Reporting and Significant Customers | ||
Revenue | 66,426 | 37,769 |
All other countries | ||
Segment Reporting and Significant Customers | ||
Revenue | $ 2,956 | $ 2,583 |
Loss Per Share (Details)
Loss Per Share (Details) - shares | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Loss Per Share | ||
Antidilutive securities excluded from computation of diluted weighted average shares outstanding (in shares) | 2,907,786 | 2,758,435 |
Common stock options outstanding | ||
Loss Per Share | ||
Antidilutive securities excluded from computation of diluted weighted average shares outstanding (in shares) | 2,763,215 | 2,750,375 |
Unvested restricted stock units | ||
Loss Per Share | ||
Antidilutive securities excluded from computation of diluted weighted average shares outstanding (in shares) | 60,785 | 2,275 |
Unvested performance stock units | ||
Loss Per Share | ||
Antidilutive securities excluded from computation of diluted weighted average shares outstanding (in shares) | 78,351 | 0 |
Shares issuable under the ESPP | ||
Loss Per Share | ||
Antidilutive securities excluded from computation of diluted weighted average shares outstanding (in shares) | 5,435 | 5,785 |
Subsequent Event (Details)
Subsequent Event (Details) $ in Millions | Apr. 27, 2022USD ($) |
Subsequent Event | EnsoData, Inc | |
Subsequent Event [Line Items] | |
Investment in private company | $ 10 |