INSP - Earnings call transcript Q1 2024 | Inspire Medical Systems, Inc.

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Operator

Good afternoon. My name is Dilem, and I'll be your conference operator today. At this time, I'd like to welcome everyone to the Inspire Medical Systems First Quarter 2024 Conference Call. [Operator Instructions] I'll now hand the call over to your first speaker, Ezgi Yagci, the Vice President of Investor Relations at Inspire.

You may begin the conference.

Ezgi Yagci

thank for and call. in Dilem, you, you participating all today's Thank

or over broadcast live that, turn the or contains the to time-sensitive call X, Herbert. you conference undue those released the meaning me and except which XXXX. available relating business, laws. for statements, we our statements, required Financial to our statements actual Buchholz, we cause Securities of financial Chairman and All the upon to Tim speaks without information, A forward-looking should Officer. any will limitation, make including estimates various website. On and by description whether XX-Q, as the and results Executive Form condition, events the is in disclaims today, our Joining federal or Tim Tim? press Herbert, forward-looking results securities risks results to earlier on our financial intention Inspire this Rick in or and May changes projections our copy and of it risks financial any uncertainties update This Chief SEC of not are based uncertainties. Exchange assumptions. full release with to March these otherwise. months X that ended Officer; of the these and access future and pleasure and XXXX. Earlier materially forward-looking including this information financial operations, reliance XXXX revise the because are statements. These call filed obligation, financial see filings could place XX, market current management for a differ. Accordingly, is events material my operational Commission, our Please statements within investments outlook year or of afternoon Chief new call, involve on today, only With and law, with as

Timothy Herbert

and the earnings thanks, and Ezgi, XXXX. business call our commitment for start you, our patient by consistent everyone, to strong call update our of quarter always Thank first reiterating joining outcomes. for We delivering

first, quarter, therapy celebrated mission thrilled XX,XXX Inspire in XX-year of Last to look we let's With with and forward week, to patients we apnea. with increase and $XXX therapy patients advancing XXXX. the sleep the untreated FDA Our major over results. only date. been anniversary for the ahead, to review And representing technology have the put that, the milestone million, with a years treated beginning. to revenue growing approving we obstructive generated quarter we is the therapy. This that the first XX% a of Inspire the our adoption the In many is patient of first are compared

the This U.S. increase a penetration existing quarter over States $XXX.X revenue XX% revenue First patient centers totaled centers million, reflects period as U.S. and well year. increased into the United implanting growth in XX increased position in expansion as new market therapy. derogation in a since allowed XX last new strong same to the U.S., $X.X in continue us and grow the The very Germany, of rebound to in territories. Outside increased to report has to sales We're process late adoption revenue quarter. Europe million. derogation receiving awareness, XXX% the primarily happy fourth Inspire in

remainder XXXX revenue the are the represents receive delivered XX% to diligently teens $XXX growth we of while over the million obtain $XXX.X high million to to and increasing seasonality of expected XX%. indicated earnings in outlook team $XXX to MDR we our we pronounced for mid-XXXX. On XXXX EU approval, the Finally, to first we more diligently which holding which million. call, our our and growth revenue With range, seasonality to to start worked within XX% work strong to guidance quarter, the continue last year, revenue this in of expect and mid-

quarter million share loss in of first XXXX. to first $X.XX of was $X.XX, net $XX compared the period, per for compared a in to representing the $XX.X year the loss Our million quarter net prior the

we market As our $X.XX for for expect expect XXXX. further leverage Switching $X.XX guidance to full first-time business few profitable XXXX. operating continues we discussion now the income be per are share initiating our year full the developments. to of to on a mature, and key year net Therefore, to diluted

and results therapy. our weight First, opportunity will view that be to complementary for potential reduce our and market patients reinforce trial provide Inspire mechanism GLP-Xs for the to may qualify their SURMOUNT-OSA a

the XX designed As likely a higher more wall the to of higher significant is would generally as nerve. with BMI is the collapse loss, treated in with new is identify of the experienced those replace not for therapy. Therefore, used completed for sleep Inspire that that intended such wall mean we many patients. experience effectively collapse, subset assurance in Inspire. patients the their weight for regards the nerve lateral with of Patients they who experience which of SURMONT-OSA hypoglossal study approach the become patients of Inspire a sleep [ stimulation airway to therapy therapy, patients, identify a them a to hypoglossal had the SURMOUNT-OSA ], stimulation. collapse of We which available. On headline are allow portion qualify wall are with these to lateral BMI for currently baseline, not trial, the look have believe which trial, qualify from reviewing patients benefit to to including the results study when forward If to the of and candidates quality results a of predictor tone-based we treat Inspire a BMI GLP-X who they endoscopy enrollment with detailed to lateral are who use related procedure, the to would experience likely a collapse endoscopy note, is reduction

and and amount BMI this have previously identifying who may collapse the endoscopy. predictor OSA a on not patients phase, with are With therefore, tongue-based we data lateral the and, sleep consistent populations analysis ultra with predominantly have results initial in the not focus require discussed, with lower wall We are is a that early our significant study prize obstructions.

proper the education conferences approval, enhancements update at will our we payers to XXXX and advance submission to assuming and track the full in a and continue and programmer, attend to work on with to silicon-based year-to-date, doubles our investments our policies. platform. by primary move E&T XXXX. our which the for commercial report programs. with Staying team increased SleepSync V medical evidenced directly full of continue a of with launch. Bluetooth sleep Highlighting in close patient our with our digital platform and residents happy towards to their that to programs. Further, us operational Inspire connects XXX ensuring on Further, development over cardiology therapy. and peer-reviewed with XXX care our awareness new levels in R&D to of the our forward review as prior approval we ongoing FDA enabling our launches remote, a make is soft -- to the the physician FDA increase the analysis drive we most publication, presence leads Inspire launch We market to are to includes is recently, had technology we we in training our The And continue continue and readiness, inventory SleepSync we activities, which Inspire launch focused are activity,

assist and XX have Key programs with to providers. over nearly with and built awareness a our we very with note the to United over direct-to-consumer the XXX treat evidence, apnea. care our improvement patient strong States. a presence strong the and million is including lives reimbursement is patients excellent detailed that Our to past over patients It first continue FDA-approved proper compelling neurostimulation and X,XXX be of years, continuous important health in evidence have strong tools the connect to sleep journey. closed-loop to only peer-reviewed covered system provides pathway XXX the our real-world worldwide And for to obstructive access clinical publications

Inspire, clinical United commercial and the expansion and therapy global States continue benefit team, markets. including including evidence, of therapy. in can indications world-class At of who have a direct We to therapy patients from numerous we Inspire the increase advance to organization number a adoption built

infrastructure, awareness and continued the invested our also strong we focusing and campaigns, adoption in have heavily drive the and therapy. growth clinical while to on upon on focused continue of therapy research commercial direct-to-consumer medical reimbursement, Inspire education of development, We adoption to patient programs patient summary, trainers remain improving Inspire and outcomes. In and

increasing to will capacity our centers. We growth at opening centers, utilization execute strategy new adding continue of by while existing

in prospects our that With like of place XX-year financials. the excited and As stakeholder remain the we long-term to the confident appropriate drive have for turn strategy Rick our future are that, anniversary call we review about his FDA of approval, celebrate over to I'd to value. we our

Richard Buchholz

XXX% million Thank afternoon, increase the $XXX.X the you, in revenue The of selling was ASP XX% from quarter XX% the the quarter, for is XXXX. we the with in this global first Total million, increase U.S. level million price consistent increase the for expect the generated the XXXX. was average of Tim, the to prior year $X.X at was previous remain a year-over-year. quarter and period. good million, million, and year-over-year first which in Revenue of a quarter $XXX.X and U.S. was outside revenue remainder everyone. first $XXX.X an $XXX from

$XXX.X compared efforts XXXX. This higher outstanding expansion million costs. of compared was general increased loss entrants The Given million metric of to quarter manufacturing for in first cash compared increase and rates to for of corporate was in our not was the to This in increase our was of Gross weighted first quarter the to in future, sales of compared higher period. increased $X.X XX.X do totaled to to first income period, year representing the volumes. period. report and as higher to organization, in shares increase for XX.X%, $X.X in continue driven direct-to-consumer Net Total new the quarter investment in $XX quarter first compared quarter compared XXXX. The million going balances this was a $XXX.X the quarter prior million prior the interest on and were by million by year expenses quarter was year $X.XX, number due marketing to XX.X% of continued the loss the first dividend forward. and per average improved potential Interest ago. development product an first programs, in driven the efficiencies the income million. to first XX% prior we the expect the net share margin $XX.X the of $X.XX operating year planned million,

year full be shares outstanding the to expect We diluted million. XX.X

December XX position our and $XXX The focused Our at of and new were executing to growth remain on existing million centers and strong us XX cash cash centers. was while balance. our volumes with investments March total implanting training procedure at consistent strategy opening increasing allows

cash We expect for continue full to positive to flow year generate the XXXX.

on Moving guidance. to XXXX

strong $XXX million our of in year XXXX the business, XX%, be in are to to of $XXX to an revenue expect revenue. to trends increase range full XX% With full we representing compared we year the seeing now million,

full XX%. year to XX% be margin expect gross We to in of range the

We during to expect to each XX new XX U.S. territories remaining activate sales centers continue in quarter established XX new XXXX. U.S. and to to XX

our guide by a centers financial we our While expand footprint more territories, and adoption to relevant we early is tracking continue and in are metric profitability new our starting in believe opening said, we'll as metrics. to share. or that in will XXXX, provide With forward. revenue no center will longer growth we per And and we guidance territory going such, earnings performance

leverage, year our conclusion, full improving share our prepared momentum the and Given momentum expect between With strong per $X.XX for XXXX we and diluted our $X.XX ], remainder share. outlook in with In income are to the now net will Ghulam [ performance the the the confidence per XXXX. our concluded. us be of our remarks provide you line strong questions. may for in for business that, open business

Operator

Danielle of compile we And our roster. [Operator I from while UBS. the comes show question from the Please first Antalffy standby line Instructions] Q&A

Danielle Antalffy

the very like But in did QX utilization little modeling. strong. sequential U.S. I guess historically. XX% the QX don't than on this in looks comment very, with if in come a decline question Listen, I on know mean growth, less bit quick it streetness versus performance you a I the has was it actually Just quarter. in been below it could expectations.

some maybe sort with the new some but dynamic and mix. Medicare requiring importantly, So potentially to that's on private see appliances. is example, great you're the most of oral anything and them pay private side opinion And the -- seeing of documentation pay for versus UnitedHealth from around

a but color U.S. Sorry, that lot, performance. was any more just on

Timothy Herbert

Danielle. Thanks,

the expected did a QX a got strong the little a we I we Yes, we year knew lead coming We well. of in QX the offset seasonality inventory talk did quarter. in last bit and about shipping we're had with silicon think it. I have some that strong as

the seasonality. to do be into private tie team therapy. going expected therefore, confidence increase The concerns a pay we prior specifically well. forward authorizations come we be our to to strong to we the see year, as expected in team did where utilization have do over continuing the oral the move appliance understand higher being and able UnitedHealthcare we we So And guidance. We and in and with held seasonality. the The XX% with some the of

authorization we don't in, hard significant on any forward at pushback the with of prior moving our and United is it We the any document to feel Don't see we're we has in are going believe impact very closely, tracking year. this a we business. for Again, position the as good and that work point. rest

Operator

And I from line Robbie question the our of comes Marcus show JPMorgan. from next

Unknown Analyst

ads, had, the U.S., by, a seasonality, the Robbie. about from adds of question up raising and largely follow-up you I the we despite guess, say, center by something seeing U.S. bit the driven what confidence a raise fair utilization, first as much? to experience guide the multiple quarter This on the a this [ I so heightened into second are to end dock is Alan OUS, on that this beat gives did for ]? And I'd think guidance you should by that of you

Timothy Herbert

Well, I all of think the it's above.

We the see as uptick in we see board. move I the through think do good utilization for across demand therapy the year. do we

for have half, forward on product centers utilization. I United increase within the and confidence with the we that going guide, opened latter we number to of demand the drive States with to continue have focusing think confidence did but increased the up more the the

Operator

And I of America. of the from line show from Bank our next comes question Steed Travis

Travis Steed

with last I It's the really improvement in I you haven't think even when if guess of it's which had new seen U.S. of centers of some this out is line when the do kind the utilization you slowing. you exclude about the there. just second quarter, of is year, -- kind prior center issues. half

rep use or report new something older the of curious, just any or metrics So curious And going on? there track longer with you're is changes going on centers some maturing centers you're also of utilization. we no kind to adding why to going the

Timothy Herbert

Right.

ago the the that of second I gives as -- think start if the kind confidence up quarter, through leads. I consistent silicone to guide take with and our back we think that again where come the move tend a into year. on We back half back and we continues to the out increase look as pretty to into of with you we where we to be shipments first QX and were you be were we're QX have and utilization year able when know focus, we inventory and the we to of always ramping seasonality the moving effect us

profitability very I for we committing think and on start we're reporting of company -- as look kind and mature. now the on reporting at as to we and start revenue on to as focus we happy company maturing we the

to for do well. profitability for and to going business I and is able also us proprietary to and out really of become But reasons report some that key think to be number ads of important we I a that a there. to it's the number new people the model able as to less helping centers to be feel there's on sure proper that think really information be people the provide we're making for

Operator

question comes of Thank Sandler. you. the Adam Maeder And I from show next our Piper line from

Adam Maeder

start question. wanted with to I guidance a

that you business? both primarily So -- it to should and guys the spread are across OUS OUS. Is just attributing we that U.S. wanted raised guidance, better we understand, are -- to the I

you're of, revenue Thanks. one trends us you're And on the cures that. to give willing provide through to for color, follow-up. quarter. I $XXX well. I Tim, million QX have there Street as comment guess, that And help a then any that I at into willing Just kind far then consensus did the thus QX think have

Timothy Herbert

good. sounds That Okay.

I Germany, strong, but when which rebound good going strong think that derogation momentum the we're we bit in at have seeing seeing we're did look We a Europe. it, with little progress a in forward effect there, too. is of

the So the performing very is States. well the United European as in team team is

revenue, some So which is to is growth international complementary well, I element in there think a wonderful.

Richard Buchholz

Rick. this that, Adam, too. to is Yes. I'll add

have far year of our the in first as we year. full the that the revenue, generally seasonality as historically, then throughout experienced quarter. So And builds composition

the the be I say would -- increase in in half So seen mainly of should guidance would year. second the the

Adam Maeder

I And it. confused. I'm guys, a got I I little apologize. guess

guidance across both forward, the raise that attributable OUS geographies. both kind going which So correct? of the business it those you U.S. spread and is to Is

Richard Buchholz

will a be quarterly additional the to quarter. in not see we're don't catch-up the There an and OUS we OUS little have see quarter. first But a did Yes. into from expect give -- we bit Outside perspective, some lesser a -- catch-up we But we first U.S. strong XXXX, did extent. guidance some but U.S., to perspective. from

we growth not U.S. sequential we're the to -- U.S., look So we the good outside any continued but forward outside guiding towards numbers

Adam Maeder

funnel Okay. much down going Are Or the do you the folks to look impact data thinking procedure. Will wanted think in with either did may, from I an to any how of to follow-up. try ask ask Inspire reps? pretty expected just patient before field came impact And going hearing docs no want you're about fairway. I 'XX, the about in you to there's anything a GLP-X to I be a potentially as or forward SURMONT-OSA, if with the half to funnel? potential the 'XX. in back

Timothy Herbert

docs we BMI the patients GLP-Xs, so use the be we the and other able therefore, patients Yes, get talk being are to around the out with we high able Inspire. endoscopy have do weight reported GLP who there and and to X tend discussions field. take We sleep and screened for with lose hear our to know to qualify to

on to the reports of rest forward early get very but look as to and days. through year. early, we that focus So move the positive do we that on continuing

Operator

our of show comes from I from And question Stanley. next Titchmarsh the line Kallum Morgan

Kallum Titchmarsh

recent insurance Just the on know of early the as syndrome seen as commercial and well. interest the as from to patients kicked in March. down update. hear you've or about policies I some BMI in, pediatric any high those momentum population well HI Curious

Now for they're in scope coverage.

color would be initial there any on Just great. progress

Timothy Herbert

you much. Thank very

a I process to natural that think we because index the for high be to bring to progress see of prior in the high step in forward. with that's receive able them more and approval. And we're those some the to AHI, apnea-hypopnea able move authorizations patients move

the today to change a just and that to wall patients treat we do those allow the with versus screen but very up important still it's that's collabs use we to warning sleep we With out. to down remember, still BMI and tongue-based high approval, lateral XX, BMI a

And the we news is So that just the a can care fun talked leverage of the about. perhaps that's advantage BMI with that we with that as but an not we GLP-Xs pediatric that with to there. the significant It's take population. really yet, group about something impact high

children's with opening there, grow we the able participate to to awareness additional to continue are We Inspire. hospitals up be and

as we're population some So well. to see with that starting movement

Operator

Rescott next from our from question Baird. line the comes David And of

David Rescott

XXXX the guidance of cadence have year. the deliver wanted a the kind you the to Or big what targeted that positive drivers back-end QX think we positive potential or of And should Maybe are that? where in kind gave I profit the how know a full some the as loaded the rest is. year? about of the losses to kind of for of of positive of previously, profit wondering on that that to you a quarter more the piece of outweighs just DTC have when the behind pretty talked more that wondering about do some spend you in bigger expect in think follow I be through we kind well. you that QX, up year, you

Richard Buchholz

take I'll that Rick. it's David, question.

the are in and mentioned, So we've XXXX And million, past, little $XXX advertising go conversion. we'll DTC $XX centers, we moderate, XXXX, increased first continue we adding DTC. from new more after about million in that as that a digital our with because talked nearly as on demand, hopefully quarter, the improve over again, those bit was in But patients the for patients, will yes, year-over-year. targeted increase spend investments. spent in physicians focusing rate really we flat qualified But be and to about

we of continue DTC revenue, from So percentage spend as to spend a to profitability XXXX. R&D high increase teens standpoint, versus flat continue revenue. will will be

And so will increased that gained leverage utilization. in be

guiding that we're We second And per of bottom $X.XX forth the so line we'd on we're that the we guidance, But earnings for to broken profitable the line. in corner, new and about, but the be $X.XX year. quarter half we to profitable that which that which of and the for the the be we is excited down mentioned now turned bottom excited year, the before share year. put profitability ability haven't to we're full for about

Operator

from Mizuho. from And line I of show the next Petrone Anthony our comes question

Anthony Petrone

here that XQ XQ? did follow-up. you play Inspire extend a you a XQ us well. the extend pushout quarter? of the And that How hope of getting have V, in little just into quick little in out I'll that for Thanks afternoon, everyone dynamic bit U.S. could a bit, do saw on maybe in explore can think in that pause maybe sort is the doing dynamic this there's in One to of

Timothy Herbert

and put with turning with running program make we're our don't in package together this soft we No, and year the We Sure. any FDA, and and review and progress see launch Inspire delay. launch our the the later 'XX. fully it's V in a are with full we like

very launching. So portfolio that we Inspire V excited remain the about still very, we'll be

Anthony Petrone

back to us, bit mandibular -- with yet a greatly maybe devices. that a to seems has there. repositioning minor FDA. the expanded sort coverage did to They of little have set step coverage is going And the like and It label UnitedHealthcare to one just preemptive expanded expanded match greatly step level

on it So a from bit push/pull on coverage any from Do think seems mandibular, side, slight this opportunity overall the is just expansive maybe you there. standpoint. like flip just little the but there's hiccup a great an -- an

So push with through specifically? that play remainder United the pull the does how of and year out

Timothy Herbert

Yes. Thank you.

the I AHI that UnitedHealthcare. agree think a have the that mandibular very advancement as the the as we documentation that And that's we good into documentation think there. for care make -- sure I outweighs therapy. far the proper and providers the go observation authorizations with we population, the to or specifically that that well pediatric authorization upside health you put and works our oral prior devices make to the And prior to appliance think that team that, that high

appliances, from the and pediatric a don't secondarily see especially that then the the significant we see oral So upside good high AHI population. we do documenting with with challenge but

observation. yes, great So Thanks.

Operator

show Chris from the Nephron. question line Pasquale I And comes next our from of

Christopher Pasquale

one on quick Predictor. One

the disclose that present to headline publication. to prior or plans results data any Just

Timothy Herbert

position work think ASM, in will going public is the sleep be meeting which probably we of I Where the We'll a don't publication as June, a timing to have to at present road. in looking presentation and stand we're we conference with a be for parallel. the Sure. there, we but down today the

summer soon as that we meeting. with ISS as So can. AAO we possibly early we'll look later still push to out get will fall the for But or the information in

Christopher Pasquale

Okay draw the seeing about distinction Just that BMI and patient guys still an -- patients treating day-to-day this accurate on ADHERE all? surmount. who that you population, in the the you to then if around at XX. to baseline the label I When want you expansion, between Do was shifted study a since you a average patients at Or at look you're think think the that's basis? has and of just circling registry, your are know back reflection your were commercially? current

Timothy Herbert

think I observation again. good No,

have I a think the not saw the that we is the And reflects of the and it the trial BMI sleep consistent and very STAR with collapse with the registry. that's reports in significant started patient our XX. patient endoscopy trial lateral wall consistent BMI and in at have with whose the X,XXX-patient patients BMI SURMOUNT-OSA ADHERE that do the

So [indiscernible] and tongue-based predominantly patients they with effectively that you weight, would they lax expose, lapse be expect to be as lateral wall Inspire. and [ lose can the collapse ] those so treated

So very when data the consistency to data that forward from really out, and good I think look very, additional hopefully, it comes saw seeing we the summer.

Operator

Newitter from our And I line Richard Truist Securities. show next question comes of from the

Richard Newitter

the guess, anticipated for people V. time it there in guidance update? something that, or there's physicians anticipating is as first provided for. about and guess launch or, the I about risk And that just then transient delay is solution, out you've was however a Inspire to come same -- V the relative it's is thinking V. that and b, are treatment Inspire last potentially timing waiting How be, existing a, I preparing the you to you that is on contemplated the something in just might thought Inspire an consumers whether or Maybe on

Timothy Herbert

Rich.

first to yes. The your answer question is first

will is Number but the this large our -- a about we We not marketing earnings running program plan with call. patients risk what be yes, launch. are line until at of in X of talked we full and our always last with it, there's the on being aware

of risk believe technology going waiting patients is new warehousing, we for so or to the very low. be the very, you And if will,

to aware from with have impact moderate haven't delay products receive Certainly, who severe certainly we're that that, not have had therapy. perspective. monitor motivated experienced we'll untreated of we've We sleep of going that. a as experience this to we but that apnea, significant that any patients to kind have past that's very we do But believe

Richard Newitter

Got it. on provide the what going And going are you one and to just aren't forward. maybe follow-up --

and are sounds longer going the openings you trend like analysts account you're understand guys providing no what to investment you So 'XX, if that towards to for that's openings of the community to in new right, to provide in it the will continue but help is remainder going are starting how utilization 'XX, business? utilization going end? And the what and you and new account provide

Timothy Herbert

revenue be top discussions profitability importantly, you. on we'll to industry. And to That's forward. think really growth But line line focus across line, bottom and continue going focusing well more our consistent be top is the on with correct. going reported what we're going is I to as be the as with

Operator

question Shagun And I from the show of comes our RBC. next Singh line from

Shagun Singh Chadha

I patient down on could trends then in meaningful just that and that just there's wondering potential and was I OSA on Inspire about wondering it you wondering speeding lastly, operating And And V any how readout. in gotten good pretty specifically talk was and this diagnoses. PREDICTOR V, was times up impact We've study if if potentially on Inspire funnel. study, then PREDICTOR the utilization. if on could you some just any had can feedback take very I update on driving increase

I out of drivers a DTC. GLP-Xs, AFIB, previously you've think called like bunch

increase in general PCPs, there's think I the et amongst awareness cetera.

seeing So you're on front? diagnosis anything -- just the

Timothy Herbert

them I all. got Fantastic.

Okay.

operating that will lead, a to V, going reduction specifically Inspire time now INSPIRE room do time, surgeon, for because incorporated the the in which the we remove with sensing is be pressure inside expect to So neurostimulator. operating yes, V have

product the less one needs it's to that implant. surgeon So

that's And going believe a significant have so we to reduction. that

it Inspire of today XX And down believe past and could between the between we V, go OR and minutes. our with in to time XX talked being XX XX have We minutes. average

reduction time procedure. a So perform the the to in significant

to going the accepted, that's as think we well for patient So the be as very both well surgeon.

of Secondly, as that through it specific a patient as takes funnel get time and part Inspire the to add provider, from scheduled the contact key to upon of goes, time the could far It drug-induced we care for a patient the months endoscopy. to the the know received process is anywhere and the and time. surgeon. scheduling perform significant a to depending diagnostic in X therapy, health go sleep of X a amount middle

we for with can OR time will believe with patients. can in patient the improvement to then And that we talking don't we're that we but time And be hopefully, those can awareness. therapy. And on with So from drugs sleep sleep a data alternative be contact to practitioner, patients have patients reduce an we likely not keep able have really necessarily heart when the to show analysis the for patients apnea. to and to of that those We with believe will failure they patients continue in go the creates have show endoscopy, awareness as obstructive create. elements working diabetes, BMIs for to TV need can such we on an general a Oprah higher number diagnosed to apnea, those BMI the their predictor meaning identify that. finally, in the a for and the the population But the show the review endoscopy, only if significant with low sleep can GLP-X experience, of obstructive receiving trends about going sleep

that believe will apnea. diagnostic we sleep obstructive rate of So increase the

they aware sleep. are how of patients well Secondly,

phones. watches that smart There quality will your have We the that of coming track out were are sleep.

believe societies opportunity the continue apnea aware the and to just the that Inspire. generally, will and for we sleep increase. more their So quality awareness for risk of sleep, diagnostic in therefore, become the of

Operator

Stifel. Block from from John question show And next I our comes line of the

Jonathan Block

I'm there? on one, update by expect changing for you the other Maybe Any board just beat the do privates, XXXX. higher on guys coverage end of the to update a guidance be policies to the the about continue Rick, first the you curious most profitability and then AHI? any just for year, And shift BMI solid and gears, follow-up, And just whole story. raise

upside proportionally to flow dollar? business. just So through into take if $X.XX the let's at, upside Or move should back Do of line $X.XX and one to don't hypothetically, to you and the not that? of $XXX ended $XXX that plow year those to it How bottom to handle revenue the on top higher potential is you the things it you that targets. sort I'm the where curious incremental line the know, the midpoint. I just see the say million are million going

Timothy Herbert

me one John, off Yes. to then let and take first the Rick. hand it

to to an to sending them progress. sure the with implemented. of of the are although FDA end make good the very care the approvals go with we program, with you through the and get as and year, process payers have indication that process reviewed is for a active policies challenging by to like of of communications the aware always payers policies meet their to through out most have to Medicare far the be of encouraging able be new able go, each the meet the updated have are to taken and We CMS, As making MAC, fixed to MAC to they would the update because them update run

is and but pushing year. of getting rest mentioned for through to continue a that expect policies bit the the the So you of we delay have always as Medicare well little commercial there, responded keep a quite to

Let off profitability me hand [ response Rick on ]. to

Richard Buchholz

have John, and and philosophy on -- first our across of But focused center metrics. changed guidance all, all also improving utilization. we we goes guidance we're capacity our Sure. not of that stayed

continue utilization, business let we continue to to make as investments that, And our it be in long-term we our so improve for known growth. to want

profitable announce the has our be and been revenue GAAP Our OpEx we we're basis. -- year would growth for to a growth, revenue outpacing on that has full excited

yes, see this and make but that our at margin to those our could continue to as not we with improved OpEx leverage, growing investments point. quite As not guiding we're as gross we XX% revenue, fast

Operator

Partners. from And from line I comes next show Leerink our Mike the of Kratky question

Michael Kratky

make The where a see GLP-Xs the is could first secondary we impact of heard negative from on that there the you scenario have at more could business? think SURMONT-OSA ADA one, endpoints some could KOLs a or you've maybe

Timothy Herbert

going arm If bit forward, question, the of line the I that's is But alone. think therapy seeing it's you AHI From and what struggle. that I detailed the data think look was a was the understand put on that little I top data to show. to to be a think reduction -- we that forward look specific just XX% going hard the if I data, at in in hypothesize to

come that what it's that patients they're addressing of their that can as those weight pretty able help we into the with indicative to think walk I shows summer a we thereby and lateral expect lap. lose higher BMI

you'll of specific look to different be BMI. details, reductions So after move ranges lose specifically [ then see they and the AHI months as same more I of to and able summer the groups at at into think able weight BMI more look with ] different we the of be specific of

that data, look about really with but show that line going is data forward to be So talked to GLP-Xs Inspire. what complementary be will that seeing to in to we've believe these

Jonathan Block

of represent what a in potential you or Understood. this does of longer Got that commercial I FDA some it. And like the of wearable approval got earlier watch extent in know of any XQ. upside guidance? might term launch maybe their source of get for your seems then there it year, the to term? a impact near mentioned devices. just separately, Samsung you consideration Is either that then And that

Timothy Herbert

new a guide. are days specifically, general existence been I we've we to awareness classic continue it's come which out, I into medtech And is our early don't and working for think but I know watches of drive cardiologists have continue lot as our -- really and key technologies the still don't our the well spend time. practitioners some marketing in for to smart included referral the and driving referrals. bets our to time think programs to with networks, outreach to

dealing But a aren't to the future will believe they specifically that do we guide into for were have positive our sure. that down technologies. in to with we specific So impact able that be pin the new

Operator

a show Jefferies. line I Sarcone from And of question from the comes next Michael

Michael Sarcone

Just one me. for

competitive on it So a when stress supine a U.S. competitor or detailing like you've and seems they U.S. point across the non-supine some maybe both released positioning in positive they front, results differentiation to start as the good data of and overseas, they're got data going

an to could had physicians, conversations take potential be to Just you on those detail get meaningful wanted that your your or have how on efforts thoughts counter with claims?

Timothy Herbert

has impact. And any been No We've We we Inspire. with don't supine AHI physicians problem. our about launched when since think XXXX. it talking

we're inside and when this fact, the I on worked AHI. XXXX, In Medtronic focused back supine on late in 'XXs project

in tongue we devices, program affects sleep program on -- other side. When than phenomenon. supine if harder So position. supine, new And back we a -- you Gravity our this when lay apnea. case. is not a the worst it pulled you gravity words, your In lay

because have STAR supine energy That's true when overstimulated, at. items care is you we patients programmed non-supine, specific our in might what they and required to are what AHI. they in we treatment being we And site, and of supine that's on So trial. sure levels about what certain know with making treat to equal are both then roll that's -- programs that in had argue their that we that

-- company. the laser-sharp focused We've So not supine concern. this focused the been a is started on we AHI day since

Operator

next Wells the Biegelsen Larry Fargo. from line our from question show I comes And of

Larry Biegelsen

and thinking about broad be how it on And very the beyond this Rick, me, see answer. rate? year? short to a for will we strokes Any question profitability one maybe profitability Well, goals be tax should the progress.

Richard Buchholz

Right.

we're and overall profitable and to XXXX, for we And to backwards we're not tax XXXX but we'll -- be guidance on it for providing not here So be that. we're profitable as XXXX, go far expecting to XXXX, effective expect give as more for thereafter. going rate, color for so

recognize of We a that will get NOLs that. to on have lot we

more for provide purposes effective call. tax clarity the on the we'll so in rates model, of And future

Operator

Markets. Brett Fishbin question the of next Capital our line comes from from show I KeyBanc

Unknown Analyst

is Liz on This for actually Brett.

one some guys your on you strategy DTC it's Could Just progressing? provide broader me. been for how updates and

Timothy Herbert

and of really we program back ago, We've our our targeted we're couple of DTC focusing and as that's refinement demographic successful. our a quarters very you how go been to about -- Absolutely. talked more

we grow were consistent and to program. Rick we XXXX, leverage that capturing with in pretty from for continue mentioned, grow DTT. We But our beyond DTC as we're stayed as seeing revenue where

placements quite digital into media, shown as targeted national TV now to We as social we're but both with getting that's effective. continue also with well buys be

program our population. as our to commercial find since specific continue better the years will ago XX learn evolve we to more So has and ways XXXX patient out DTC in evolved and reach to approval

Operator

comes line next from our Michael of Wolfe Polark question from And I the Research. show

Michael Polark

Apologies if was the but adds creations or sales XX this, territory -- ]. I missed [ quarter in force sales

metric the of of in curious, think [ XX ] to year the for for anything I above I kind been guide there? below. to long this was guiding 'XX is a seems XQ for trend, just is I'm adding the quarterly just versus And and each the see reaffirmed quarter deviation a ]. flag But XX was that it because guide and year. and the you slight XX were typically time, a had like you've just guide, XX that you I asked touch to timing, [ a

be any on helpful. would one So this color

Timothy Herbert

No, have [indiscernible]. they to would be to

I it's think the the, timing.

the -- we is. the think are I territory based on focus where where need new we our new centers and adds adding

new quarter. of And target so we number don't specifically a per territories

was who to maybe always, on to able just that know, territory, We bit guide but Michael? we to a the forward. focus going Did a our of have yet. of there's And bit continue of reinforced Did forward. not follow-up in change first there little early? a add little I you a be so going as will in quarter-to-quarter, and from lot new a fluctuation ready quarter timing jump and you

Operator

Oppenheimer. show comes in the from Suraj from I question last our queue Kalia And

Suraj Kalia

the So Tim, of right a of couple questions. it. you away, pose them get hopefully, I'll gist and

and terms First recent low AHI was with non-supine. right, paper in responder Tim, non-supine, supine and a foremost, of versus highlighting rates there reduction Inspire quite supine

on help supine you if the reconcile could guess I titration a comment based about position. your current So

OSA second of what and CPAP. love complementarity obese us I But at at the just is? is is severe, more coin the your the the why understand of question perspective is also, on paper get nerve That right? obese by if the overweight that. to other that. Tim, the effect could. into, to Shouldn't get the it the I understand commentary question. looking say, And MF same side understand off help coming let's we quickly, to volume obese XXx consensus token, hypoglossal I that looking and love of one the category. patients side all that's of severely one I'd to be coin glips I'd of we So about aren't

Timothy Herbert

much, [indiscernible]. Thank very you

Going back to that paper. look go and at

always I talked AHI. about evidence our think the focus subjective is was supine some that was of and around yes, core not it But evidence.

supine. fact, out our AHI clinical and -- we studies, only in In not literally supine screened did have or who were patients

that evaluated company, a is and that we way believe the challenging more with that's that since in So gravity very forward. key supine going we'll clear evaluating to the beginning focus the trial. been for STAR that It's all focus We've treat, been through. that but continue of the we Inspire on to

mechanism more stimulation I to BMI obstruction, this And a wall GLP-Xs higher have tongue-based treat patients clap. about is a designed action. about it's we've know on Secondly, talked complementary, not wall collapse, [ ] bit. the of the lateral being the hypoglossal quite of lateral

your and class designed lower reduction don't they GLP-X have same the BMI patients them level complementary is, So what treat what to question, I does. we higher can simply the not get the GLP-Xs two the relax of -- mechanism, belief other. think lower not Inspire walls. And see become have lateral you'll the a to is bring to we and the AHI trial BMI patients BMI each as who be That's by wall and tongue-based -- the know a that a have to from the complementary do fact SURMOUNT-OSA how to That's collapse. that lateral are

Suraj. thanks very for that, So much

Operator

This session like remarks. to conference. I'd now turn for the for concludes closing it the to Q&A Tim back

Timothy Herbert

today. for you all call joining Thank the

unmatched their and the and in success. As to to continued health always, element motivation as our further continued I'm we commitment our team is team's for most as consistent The business important grateful their of focused to all efforts the as I and Asia. on well employees patients and of hard expanding the remains thank teams for work remain wish employees care enthusiasm, our to growing successful U.S., Europe dedicated the outcomes. the Inspire to achieve patient

we updates on the For all the of Thank your you to and continued with in look Inspire, interest forward appreciate you much. all providing you we very further of ahead. call, support months

Operator

concludes conference call. This today's

disconnect. now may You

Inspire Medical Systems (INSP) 7 May 242024 Q1 Earnings call transcript