INSP - Earnings call transcript Q4 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 would like to welcome everyone to the Inspire Medical Systems Fourth Quarter and Full Year 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.

conference. the begin may You

Ezgi Yagci

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

are and Joining and Herbert, Tim me Chairman Chief Officer. Rick Chief Financial Buchholz, Officer; Executive

and A copy the released for financial website. Earlier on is of ended today, XXXX. the press we X XX, December XX available results our release months

outlook events year Accordingly, and Please various changes financial and statements. afternoon, Exchange which on material earlier are the you see Securities On of undue these including disclaims to whether could SEC our by we XXXX without laws. access, results our statements results differ. securities not any statements, based These including, our operational risks otherwise. condition, the any required and obligation, and as or should and estimates limitation, except operations, update reliance of the information, to actual law, management relating projections in that Inspire uncertainties events financial XX-K, cause All current and make market our and involve statements forward-looking a our upon will call, description in Form with or new assumptions. future of Commission, materially federal or this within meaning with forward-looking financial uncertainties. these place because intention statements, filed for to filings those business, this the or investments forward-looking financial risks or full revise

as XX, broadcast February contains call XXXX. of speaks time-sensitive the conference information live only This and today,

Herbert. Tim? the turn With Tim to pleasure that, it to my over is call

Timothy Herbert

our quarter the XXXX. full you, and and joining business call update for everyone, fourth Thank Ezgi, thanks, year for

and approval Inspire of which compatibility; important device XX,XXX of year the France; milestones, approval, of medical our regulation the reimbursement filled therapy, Inspire included FDA including U.S. country-wide was with MRI the full surpassing XXXX neurostimulator; approval profitability. XXX first Union V peer-reviewed full exceeding European publications; treated in with patients many body

change Kelly, leadership quality We new and of our expanded of to marketing who U.S. and fueling continue our Jason teams. sales to future Growth our role assumed strengthen Strategy Chief Chief was organizational We the Quality Weatherby and team recently growth. Manufacturing the Carlton Officer, promoted and will lead Officer announced regulatory aimed chain, supply at created an and the to newly transitioned Randy and Patient assurance medical is teams. clinical society leadership and focus the to another Ban with by The our key outcomes communications organization Access continue role year teams. team execution energized of evidence Development, and also relationships. tasked therapy and a in of will and we and look international on enhancing enhancements, lead strong these XXXX. research leading development Executive increasing access, forward patient Vice new leader our to of President Therapy and opinion welcome Randy

in the that we of revenue quarter Earlier compared a the representing XXXX. fourth million, increase generated XX% of $XXX.X year, to preannounced we

to that $XXX we improve XXXX. compared in XXXX in full share per generated income in profitability of we year XXXX. XXXX. was quarter XX% represented share period, representing per of of our with net the our are in our a Given diluted profitability net the loss to income million first million diluted year, $XX.X XX% of for full of this, to we excited XXXX $XXX in cash the year $X.XX With income revenue flow prior year-over-year. and million quarter the Further, million, million operating fourth performance, of share to was $X.XX compared we for guidance announce to full to strong reiterating year growth are per $XX.X $XXX $X.XX $X.XX to fourth plan Net compared

the in in such, share. expect As XXXX, income $X.XX be we to net $X.XX per range to of diluted

fewer you Inspire the designed V benefit Inspire the neurostimulator, enhancements, sleep the surgical to activation the that physician of and future capability tracking. lead. This device with neurostimulation the in to patient feature A to production system. the implant with it component and performance reduced for company device provide and is As provides is cost. key the need the Further, XXXX, to sleep sensing auto feature the the internal for approval V detection one for time including eliminating to to pressure we FDA incorporates know, received respiratory with reduced V complexity software-based sensing Inspire

implanted been with positive. systems in the device both Inspire We and V in experience early have and U.S., gained Singapore with the already valuable has feedback

the are with of U.S. experience further primary the expected we full move and sites at market procedures gain will during continue as in release limited with to timing our the our we continuing towards in The to U.S. We the inventory support the factor V building launch launch demand additional sufficient year. driving remains Inspire U.S., full

was professional of We few be IV specifically that procedures cases. the pressure stimulation and only system, date, namely ago authorization current approval CPT the of performed neural used Inspire incorporated in will lead. in and V Inspire XXXX code years reflects emphasize XXXXX cases elimination to implanting appropriately code in CPT describes code years utilized by prior used the to our and the X sensing to The carriers. since for Inspire For insurance was accurately with the want code originally XXXXX stimulator and X all CPT the the XXXXX fee procedure, X all received work the reduced implanting CPT V XXXXX the from lead. U.S. first Inspire continue a

additional sensing reduction up with will of and and not surgeons for procedure encourage Inspire reimbursement with comfort a it discomfort where believe free rate sensing for Inspire been basis. surgeons placement benefits will typically surgeon result The placing the Inspire source in long ENT of comparable has therapy. as Further, not perform V is We the in to time-adjusted cases confidence the lead associated the more on a time will surgical operate. the of to surgical time adopt a believe they surgeon lead the we resulting surgeon

SleepSync screens. log feature provide of may access upgrade, longer operational or care programming tablet this system in is is their laptops to programming system health States. Inspire provide access is further data A no new the assist laptop goal the the decision-making. efficient With United and launched to the to improved to and required providers reducing for new care key in patient complexities. this their SleepSync patient system in to that programming utilize has fully more tablets, Inspire been The provider or health The own simply

The ENT in primary development and continue capacity focus demand our and the fellows to both meet With our in to market continue see to we of to XXX we practice medical training improve respect and hosted advanced our to we Inspire ENT APP, at strong therapy. advance programs. for providers, clinics or provider, sleep activities, XXX initiative sleep education practice is advanced XXXX, patient XXX residents programs, over Inspire

broad therapy for with care provide as and Inspire offers care in In and education of XXXX, conferences, patients ongoing continuing we advancements initiating resident, care a we to We medical website programs, marketing continued therapy plan to medical health training, and our increase fellowship in well our and awareness a support awareness Inspire and adoption participation primary provider a pathway care. program. cardiology focus primary patient cardiology to education are connect our through program and to and in the APP as deliver adviser that education programs the including making

advertising In strategy, XXXX, lower cost. we be a with goal designed of invest targeted. example of Inspire our a to significant further marketing robust has connect outreach our and with programs which patient's a to plan contributed one ability And in In and patient the increase therapy awareness enhancing at in with programs to beyond, our digital care XXXX we health engagement to improving more continue is to patient a provider.

behalf to example patients. exciting submit online with have is prospective appointment tool, used the using experience Advisor centers currently improve in XXXX. plan expand care and this Care providers on by tool qualified our of An to to to Program scheduling, program We digital requests this we directly health electronic patient XXX an

we updating policies FDA commercial On label. our to expanded payer front, continue progress the to make access our market

assisting we provide have regard, patient facilitate Inspire obtaining in team to prior ability steadily from this this we Additionally, by prior to to therapy patients expanded authorization our authorization access In our coverage payers. decisions enhance assistance.

provide intend On cooperate and Before a the CID Rick, the the our reimbursement call products. to one would demand XX, civil relating and I update. practices Justice. January The to we received investigation additional marketing, from to the with the fully We of requests information like Department turn with requested. information to provide I promotion associated investigative over

applicable procedures, committed in business and our and We compliance conducting to of compliance are programs remain confident the and with regulations. we laws our strength ethically and in

we summary, focused In continue therapy. adoption the to growth the remain patient of Inspire and on

We effectively to manage higher of treat driving patients. and strategy increasing will partners of capacity execute quality flow provider patient growth our our and more the

are providers, advanced tools, and objective of Our the increase our capacity. adoption embedded SleepSync Inspire key to commercial practice certifying digital of additional which strategies team's and to include qualified implant therapy all provider adding driving surgeons strategies our and

place ahead, and that strategy stakeholder we long-term have excited are to the future confident we in remain about our value. appropriate Looking drive

his like review I'd our the call that, turn for of financials. over to Rick With to

Richard Buchholz

Thank you, afternoon, everyone. Tim, and good

an for in in Revenue U.S. $XXX.X $X.X year was the year-over-year. the the million, quarter the $XXX.X revenue which XX% increase generated $XXX.X $XXX.X increase quarter of million, a from quarter XXX% million the outside the revenue was a Total U.S. XX% in the fourth million was from XXXX. was of increase million, prior period.

U.S. U.S. sales quarter, total Gross was as quarter centers, margin XX to well XXX XX%. territories, the XX territories. fourth as centers sales to U.S. In we the U.S. new the new in total active added bringing X,XXX bringing the

compared expenses offset costs, due was sales the a partially R&D reduction quarter increase $XXX.X our as operating fourth were million, education for increase an planned XX% in general This year-over-year. to XXXX. expansion and the quarter of expenses million $XXX.X by increased and in patient of and primarily of to organization marketing the Total corporate

net the margin net XX% or period. year to per Interest million Net the year year Operating prior share period. a the the income totaled and prior quarter of fourth for of compared $XX.X $X.XX compared diluted period. compared to income quarter million income net million in $XX.X in million in represented income $X.X in prior in to quarter was for This and the totaled income margin income quarter income to the million $XX.X million XXXX. compared dividend X% $X.X $X.XX net $X.X or of the

or million a $XX.X quarter adjusted adjusted of in compared a totaled quarter million adjusted EBITDA outstanding million. weighted EBITDA of of or margin XX% XX% fourth fourth The was Adjusted XX.X shares the the XXXX. in average to in $XX the number margin diluted EBITDA quarter EBITDA

cash cash announce during generated us $XXX to quarter, full our to to growth and to million million excited year strategies. flow $XX that allows focused are We in strong executing our XX. balances on bringing $XXX we the the cash at million increasing position and operating total investment fourth total The remain December

$XXX.X year-over-year over growth. XXXX, U.S. a XX% while a For totaled million, year-over-year in increase million, revenue $XXX.X XX% a XXXX. $XX.X million the the outside was revenue year U.S. revenue totaled increase full $XXX XX% million,

per for X% Operating full to year a XXXX. compared year to of income net of full XXXX. adjusted X% Adjusted per a XX% $XX.X for a compared in $X.XX totaled totaled EBITDA $XX.X an Net million million $XXX.X net for $XX.X full a margin, in margin million X% of year million operating XXXX million adjusted compared EBITDA XXXX, to a in to XXXX. of loss net loss totaled loss $XX.X $X.XX income loss income EBITDA was income Full a and XXXX, adjusted year net EBITDA XXXX, compared million diluted $XX.X margin net share for margin. share

to on XXXX guidance. Moving

to compared revenue, $XXX to be an revenue of million to in XX% year $XXX year We XX% and of the XX%. continue full year to the margin million, range XX% gross in to representing full to to full increase we range expect of be XXXX and expect

be We expect between for will diluted net year $X.XX $X.XX per share. income the to XXXX full

centers. discussed, longer report As on previously or guide we'll no to

our territories sense clinical However, provide to organization is to we give how a will representatives of you forward. continue and going field scaling, commercial

color additional Although we to not guidance, formal would provide like on XXXX.

that reported reached to and profitability, rate have we tax primarily related Now roughly in be XXXX we expect to XX% local our state taxes.

diluted of remainder over of full impact we share shares XX expect the that million. year Excluding the the outstanding to any XXXX, make approximately repurchases we complete be

with XXXX. our conclusion, and in momentum In business outlook us our strong for confidence provide performance

that, for concluded. questions. you the may now Dilem, open our prepared are With remarks line

Operator

Steed Instructions] America [Operator our I from from line comes Bank of question the Travis first of share Securities.

Travis Steed

ask I CID to wanted guidance? should kind a built of as guidance. profitability And I'm to there's the assuming about we here, also about EPS thinking, into well. assume to then linear first DOJ I conservatism wanted EPS the XXXX the some ask path

Richard Buchholz

throughout Sure. On from earnings part we'll the QX, committed in of question. our to per a have improvement improving basis. margin on sequential Travis, guidance, expect I'll take not year. to the quarterly QX on do that but revenue our we've the then be we first annual are had quarter, profitable the a And we thereafter operating seasonality basis share to traditionally first year-over-year given

Travis Steed

CID? DOJ the on And

Timothy Herbert

It's obviously received that XX. It's active. new. We January Absolutely. very

only there's committed working continue and can improve to not the We the that working our important products. will laws inquiry the the provide with in We're lives the we interfere with compliance detail high-quality to ethically to value conducting work But do that doing our investigation regulations information so partners, provide. and necessary. who and customers much applicable medical of we're provide committed So that's anticipate our business we're patients with to to and other need and with devices.

noticed, So remains as investigation the ongoing.

at As or comments we don't time. additional such, have details this

Operator

And I our Antalffy question next from Danielle line the comes from UBS. show of

Danielle Antalffy

about growth automated a the online that or right impact more seen volume on maybe on And it. scheduling, a little reimbursement, patient those of XXX mischaracterizing to is question it, sorry the volumes. perspective scheduling on you talk Or at seen however centers, at doing one perspective? the you to follow-up quick centers those centers? kind are what characterize streamlined to that's or and topic. process. bit Inspire V What you've seen from wanted way ask Maybe through I the the accelerate Tim, a if I'm around have up ability follow you favorite from what growth a question work having your the commentary Have

Timothy Herbert

No problem.

a back it little take bit. Let's

We it take centers, at technology, as the in into and the requests we streamlined to send big make to years to up Therefore, that scheduling initiative tracking success using direct story. in did we do about us linkage ended started few as center year been patient compared a You've for XXX wanted pilot centers appointment. the while, what ability And measure that with of this the to to is the digital the a appointment ago. program we appointments And the a patient patient. be continue number would it's center to and using the year participating to via start by of phone patient's a of digital the we meaning normal we're process. And significant direct directly has between saw Care ramp program. improve the advantage XXXX, that we really calls the pathway, an to scheduling, the advantage or which through e-mail Program and a the Advisor

to pilot So a pushing we based on we're keep years the success program ago. the that saw program couple of going of

Danielle Antalffy

you down guess, ask, doing bit? talk reimbursement a they're your little from in little bit the Okay. I then a I I reimbursement, come about the this and about of on I what far. hearing we the the and commentary it physicians physician is That's have procedure fee one And a does maybe Or to know just is I V happy helpful. could is? about, you've I And appreciate you talk mean, should physicians as spoken you're physician provided that reimbursement. the if Inspire things thus barrier, past, whether with

Timothy Herbert

We it's Absolutely. don't going barrier. Thanks, a Danielle. to believe be

In fact, be the we opportunistic. think going it's opposite. to It's

next already the the chest the able the strengths, centers focus Singapore saw anymore," with cases implanting can sensing States feedback that, they key not time. to the had with V, ENTs V think allowing they're do the remove we And day. that surgeons, accomplishment every the in and patients United with that Therefore, pressure purpose of the reimbursement, lead more there's V, is day. Inspire electrodes, of work, a of neurostimulator. and so that the just we IV wall in progress implanting their them And reduced is that is with I placing feedback on that the a on placement that's reduced the in have pressure the was where not exactly and reduction "Wow, Inspire of of time-adjusted rate, tunneling was be consistent work to we which operate And we sensing to barrier lead patient, right but Inspire in ENT cases the it and going the that, the the date. be placing believe kind of The case. to we're will between the and to to surgical it's

ambulatory higher. the for And centers actually reimbursement is surgical

for ASC, a Inspire there's to the those have more to a to bring surgeons cases in ASC. able So who stake their be benefit

think we a So it's don't to going be barrier.

and I that course, about early think we talk physicians But barrier further don't progress. the as into we this on, a will think limited rates. full once there's be will move into launch, quickly a launch of

ENTs them advanced topic streamline help we And focuses the more is on to fee If And to talk surgical that I professional have that's sure thereby bit to in educate we really through about practice. what their able patient in efficiencies with time physician and we the can the APPs, or or to this, the flow a when the APPs taking Inspire, able providers, year add talk the of are about last performing reimbursement. care patients practice what maximizing office, talked surgeon of their practice. help implant making to one the or the reimbursement navigate quite be that ensure the the about

So as Inspire don't a we as into we to think be the IV progress we barrier it's or V move into going Inspire year.

Operator

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

Robert Marcus

profitability. nice Very

Timothy Herbert

thanks, Robbie.

Robert Marcus

going the Maybe think historicals? first during negative phasing good V you a us the for want and we to maybe and year? expenses the we full the Inspire in Rick, revenues how considering to year, through launch for that sometime limited a to in think of how do want you from And about do the go the we are of as You margin versus Street should how is about talked quarter, year? but think this you quarter EPS first spot about a start launch

Richard Buchholz

don't in improvement year consensus. going we first Thanks, And with to year the QX well continue we about estimates. comfortable sequential the to did revenue we this V our do some of given in have generally, And throughout discuss in make expansion normally continue seasonality investments Inspire footprint. But in we our comments the Robbie. as our quarter. But our to after business are as earlier we're dynamics, with we R&D Yes, launch make see QX. expect

We will with continue probably adding sales line guiding be going trend. but it be to territories and will adding our centers. historical We're generally, to not it, in

increase continue that, revenue, of year. increase will So But expenses the growth we'll sequential the follow. profitability in to throughout with

Robert Marcus

anything, of latest one see labels got added I field, and up, the how apnea. you're sleep in And you it's the the just clinical fitting one I equation. Great. if for it wanted see it on maybe the what, the to Inspire seeing know just but into to on bring just discussions GLP-Xs. painful to

Timothy Herbert

spent because Robbie. difficult lot talking as don't subject it. of about Thanks, a We see time Sure. GLP-X we a

really distribution to able patients tailwind understand coming. be strategy on you sleep label, still is. was seen it's reduce believe and help the flats just we're That or the plan trying it's physicians their what weight the and able to going we I and stated, going to how be it we be to lose covered Inspire. educate being is what As said, and to to It but think came really qualify wall lateral to haven't realized the for just yet,

continue for wouldn't them Inspire qualify weight believe benefit that and We this help is a patients to to whereby they lose for for Inspire.

So our continue with to sites. work we

back. sites seen early try I again, continue qualify early the that monitor to conducting have helping we and the We of it's single to for lose pretty success But And work are still and we'll Inspire, and patients think haven't tailwind several on. weight yet. and measure report

Operator

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

Christopher Pasquale

Rick, profitability. 'XX in great progress you made on

look doesn't at kind 'XX we I As to year. but for it's year, margins last of implying that the know same seem said like improve the I you guidance, you're it the committed leverage saw

'XX. big buckets So when was down in spending, for think we R&D the about

expect up think I any going Should what of is to you flatten of else was DTC said guidance gave? that here? the in kind that to out. really implied Or you those we earnings guys ramp

Richard Buchholz

Sure. to $XX $X.XX that as expect continue we percentage expecting guidance revenue. OpEx roughly so mid-teens $X.XX the will tax And outpace we will roughly mentioned will R&D growth. With of to also growth to do revenue of rate be a run be year-over-year, our flat per XX%. probably that million. share, DTC, Chris, we're

does margin. imply will with single-digit it low operating so income guidance that have our we And

penetrated improving annual our going number we are growth. our some in improvement. we potential lowly improvement. as committed the invest as as to centers. So long-term We're are to But well will very margin But there surgeons of as market be to well in continue

And So this we longer-term a on believe reach basis, still margins. for in still term. operating long we XX% that the we're can

Christopher Pasquale

going to launch, cost not production? that near-term And is Or initial that there factor? a when Is on with impact margin V of gross do be through you transition, sort should inventory of we that higher that make think coming the any about? is Inspire

Richard Buchholz

to gross XX% We No, annual factor. a to margin not XX%. did our increase guidance

this there's include And tailwind any that at a does If margin see gross the Inspire V. so time. from short-term items, in don't that we

Operator

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

Anthony Petrone

on V, Tim. Inspire couple Maybe a

ended the to X,XXX the States? little United can centers, year launched you per in the when many many how will over centers at have Singapore. that States Inspire in be point? Just fully V in point And on the you how be at daily what expect doing at you and think United actually sites they early that this cases And share Like, all bit United sites throughout at adopter it Can about a doing just States what do day? is in are share are those the the sites? follow-up the quick you uptick we cases

Timothy Herbert

Absolutely. Thanks.

we've I think the key going is be and And in did they've month, of then, continues keep XX. Singapore started market planned product, the earlier. And they a we up we more full couple mentioned building I and our we additional launch mentioned again, earlier next opened just as our done as they're there. had the additional but to the in think, limited complete accomplished move of in Since with earlier. that is sites limiting we'll forward, we're Pittsburgh, -- planned, release cases of couple first factor a several the year Then XX ramping to progressing that that since to we group. the a

positive. market release. a we during to increase real centers the that's number learning So But quite as bit of the continue limited we're

broadly launch launch, keep quantities and scaling will the we LMR through product. we to when the the we'll do full have So the up year, proper

Operator

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

Richard Newitter

comfortable second what to the past in half might congrats in with look on just and that back had of Can first with and V. just you spoken feel that I that you the half, this the I'll due I part about a magnitude quarter. quick Inspire first guess XQ try reconcile ones, half us versus the maybe just first, understand half like? you comment the think profit weighting squeeze two help to

utilization guess, And utilization you're but about I just or said just an second, to us? in giving exactly anymore, in drive that is in that, established in parse at out looking guidance there you you're not could increase growth I what talk you your center means? know centers then that just you anything can growth that XX-K, utilization. for

Richard Buchholz

regarding our Again, breakdown. annual to expect seasonality. guidance. the on don't speak We much provide like we too quarterly Sure. guidance, do we But

are where thereafter. comfortable growth have with QX, We and expect we are sequential estimates to at,

have still of We're Inspire You our we but increase in V we But we're adequate has have back on sure There's on company. from sequential sequential standpoint. expecting revenue inventory really the excited. past look to revenue a what done one the been. signing we're in the not our on hand. is can growth the historically lot that, parts off continued with history launch and a largest moving in launch, making have the This of biggest product our is very as

so And going. launch the full get to excited we're

forward. expand you but on and territories our much But of we didn't specify we longer reps metrics, launch that going to assuming Inspire those And going in done and give we've we're assuming utilization, field line throughput. but an update then Rich, are on V we to guidance we that's historically. sales your say footprint centers, did we're providing second the guidance, continue clinical in question, But in our we're so generally our reps but what assumptions, no and with to not our really much impact will

Richard Newitter

just But there's because half, be guidance Okay. first to prior versus on major clear, no V. second in of years Inspire seasonality current your difference half

Richard Buchholz

year, No. have the year. our it and because resets we I right, mean throughout builds in historicals, the builds generally throughout revenue QX that seen then you've seasonality

Operator

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

David Rescott

from here. year to finish of the them us, upfront. both ask I'll the on maybe and Congrats Two

something curious And accretive heard you then maybe specific in that if or obviously, parse the have broadly. growth. the the whether comments could is You, to year on the cadence full out not international should which your for be maybe P&L. think you P&L tax bigger for is and assumption pieces on the comments for spend. is just on But a income, curious of heard the the what interest when I the component XXXX, I'm about

Richard Buchholz

Sure. Thanks for your questions.

Regarding foreseeable for OUS revenue. XXXX. worldwide will for of time X% our be trended X% quite revenue, and to the future That has between continue it some into

is it's U.S. pace. the hard as As growing, to quickly keep

Given revenue, change it's our X% that in and expect X% between to don't XXXX. worldwide we of

your then question... And other

Ezgi Yagci

million $XX for the year. it's income, Interest

Richard Buchholz

Did for $X interest you catch roughly million income. quarter million $XX that? per the year, for

Operator

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

Adam Maeder

Inspire drive Tim and question In or been doc start I the capacity. on doc gen OR the in I help unlock kind his Rick, with follow-up. procedure kind times of it's checks, can to consistent. one is cases? congrats a Inspire stack on faster her versus help capacity on you should allocated The has guess do that pretty our But is ensure that the you X. then extra to wanted to other quarter. do I anything the plate? fifth and the gen the how had there is, procedures And that of And device the leverage increased ENT

Timothy Herbert

probably they support implants. that it is talked spend can are -- turns to to ENTs patients, of a partners about key we and with such high-volume with the Yes. CPT patients, what have are are their checks it the codes ENT that you have the to general they ENTs at list in for really ENTs procedures some to a our room to and the No, doing did the The surgeons Inspire think that implanters, teams basis, it end are in And time. minute Inspire. we that's the important also a I procedures is at look look, educate And the with the if the participate on other your that lot out, search efficiencies demanding a ENTs of building performing. in item, your work the be and on of able per can time operating what to navigate own whereas help our competes of procedures higher those that

to we need we so And make the so the more spend efficiencies that OR. they sure build can in time

they then the know that's the where Inspire us and really And an set when year, is is this case in for priority key to come days, morning, they the day. too, this

people and everybody the can even to trays not it's in is they the in it's it's at have The procedure what suite. just and Inspire know It's level. what surgical everybody happening, And OR so reimbursement reimbursement. perform day. high there, an the what down a to know surgeon, know They for equipment for

So that they day for in use what able to cases. be those codes know to

Inspire consistency add they make starting supervisor driving show benefit So the the or in don't such the lights without reduced it's that want of other sure a second hand, risking into V suite OR to the an overtime. about out on the either. time, really that OR case shift and going as understands case they stack and with But days another

going and all the confidence to and the ENTs do the it's to build for Inspire we So really comfort about is building the think so. efficiencies,

Adam Maeder

And Tim. quick guidance. color, one XX% the for to just gross helpful really full year is That's XX% one on for the margin Rick,

gross to pronounced from of kind maybe out assumptions impact of Or specifically guess, gross contributor the kind X gen benefit a launch. the And a some flesh I impact How X to to wanted year? this of Just in we more of the positive key see margin there. margin 'XX? is much do gen

Richard Buchholz

increase of at captured it I that with guidance did our in first in the have full We 'XX basis Inspire by into 'XX XXX tailwind impact, than year given guidance. midpoint. think our But the be And Inspire of in so we've the we're the assumed launch V we V. a And February. would already more points XXXX Sure.

Operator

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

Larry Biegelsen

commercial do talk envision follow-up. and IV Tim, had And patients? nerve both code? centers And a of does and that one about just for could the stimulation you I to Inspire transitioning V? the time logistics of do a work Medicare cranial when you period minute How back for

Timothy Herbert

Sure.

I the sensor, right back. transitioning from eliminating here, to pressure by think we XXXXX we're transitioned years And X XXXXX. ago,

it them done making we've with the build goes and this sure lot worked and at the a that such update the CMS of or payers, still when have so through. their we the software that XXXXX system. ASCs it payers is and still The key to code, that And hospitals or the we the centers in

launch with that. payer IV work CMS to limited both also while policies updated including So using there cases. the we codes. where IV we short question several now they a to work may have to inventory, Inspire are with about include of that make no are Inspire XXXXX, both point, codes, the There's V every codes. your both those period as sites And in on Because, sure Inspire doing are, down fact, time be using centers to have the they

little a it's So bit the of mentioned, the through we of But handholding year by transition end we again, full as upfront. the expect a and year. launch

will payers transitioned be then. the and over all sites by most So

Larry Biegelsen

you the are helpful. potential patients launch assuming in V? for of And Tim, the And competition? before guidance warehousing what That's Inspire of any full

Timothy Herbert

Absolutely.

anything We with I be that inquiry don't academic will to of there very competition, the And you'll own. we quiet. your know have know do that get experimenting that some if some think centers. approval, they on But been it's there.

for we no we're our So into that, include guide, about prepared that and that. question

we that patients know patients that choose that as that may as of lot now, V, we into be forthcoming, also do as to aware well. that to But want we quite want We who a again, guide they of there are believe of up, will think wait. But ramp be we'll and kind to continue will But seeing We our we're that limited wait. yet. very there that build monitor transition and into closely. we don't are that it's to to that V but

Operator

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

Shagun Singh Chadha

party curious share you of have. investigation. what you what willing or time can share share scope initial to to Just looking have follow-up investigation? anything potential if be this? time just DOJ you third a you potential and next steps your to you and is Are incurred? can in a guess the this around already addition maybe into costs I of Do estimates assessment lines on the Any

Timothy Herbert

work on have will improve we work continue investigation and XX. our the conducting investigation all valued work that ethically, Inspire our patients. policies, January our closely that products. provide details. do lives our so Sure. continue to to again, We're and provide to business compliance laws Again, other we'll received with partners it the with very We the that to the to confidence just and provide in information on, applicable with just stages. anticipate early with in We're regulations. still just committed customers We'll the We do not to the the early can't in interfere we But they the we need. of

Shagun Singh Chadha

you a Got on philosophy. then touch I it. And little hoping can guidance your bit was

exiting note, obviously a XXXX You're pretty XX% on growth. year-over-year high

seems you that. down You're you of law factors going phased then numbers, terms are just teens. launch, But launch. a in a of assuming a It be high like can help what besides another XXXX step it it's large said growth? What of year seems Inspire guiding deliver you it's bit V to to really the of commercial

us thought factored guidance for how through in and help you Inspire maybe what So the think you about V.

Timothy Herbert

in build detailed detailed you. plan Rick of the beginning challenges as Thank We model. the elements even the It's tailwinds We account a built to as far we earlier the take at all you a the many those some and that elements identified as earlier had see identified. well into of year. year.

R&D. invest into same-store increased excited be and to V we'll to to from continue continue expect continuing as we'll Inspire existing invest majority centers forward. growth program work going DTC growth to of to able the to team launching to in at scale and consistent our sales, year. so with open centers. our in And come as we going And progress, and But up about move continue continue talked our we new our growth field Rick as our our about we're the to continue prior again, very year, we

Operator

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

Brett Fishbin

really inventory a market build on like up this And with as the ideally could V was of happening currently on touch ahead Inspire one as stand if I you driver keeps where that wanted. full launch. you barriers fast coming like was you was me. then if the any feels as process of color from there Just for hoping production for It just could more provide timing. bit primary maybe preventing you the this around the

Timothy Herbert

Sure.

implanted or, opening are brand-new an should a that line, say, additional Those brand-new production in have have did here and production active is last It year. this production the line line. U.S. we been line. first Singapore, the sites We in a I year up implants are units off opened

to building are are line. inventory, and We scale that we production starting

line. to So efficiencies to we new capacity that scale up, we you to continue find production with as and we then line, that every continue sure the add make of

working up. that is and So and hard continue produce to today scale there to the team product

once Inspire do the today disrupt able in we Europe approval not do in we continues Inspire States, V. to not production line, the did to again, manufacture because, We IV transition be have which product to United

will needed So be into Inspire the IV future.

just of are process. brand-new building are is qualified. the right we It normal scaling fully process So a line. production a we of setup through process active, It's It's in going the and now.

Brett Fishbin

inventory a weeks Super maybe that to helpful. quick get just in one. general of level of there target Is or trying either really to? on a And dollars you're follow-up like that cases

Timothy Herbert

preventing, we're we what really, want number, a stating specifically Without don't to start-stop.

V, We Inspire to will want have we go. once to transition we but IV,

forward. make we want the limited restart increasing a go But sure to V. scale centers up. go we're a to that up launch do keep want on we as go build keep we to and once and so of to And inventory having have number that to as launch, we going inventory then to not to just start-stop back IV we full Again, and we

about little going we're bit So be a to careful that.

Operator

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

Jonathan Block

a just on Maybe one. follow-up that last

Maybe be fair is in of ramps the year. Inspire this a to trying get overall say, how is look, I'm weighted I XX% could over follow-up. For get back-end think it it is surpassing how you it X we the the And V, about seems talk throughout the XQ, mean there feel conversion how to or you're X% we the cadence going do like evolves think And it certainly quarters? targeting less Tim, quarter? than about to XQ, full I'll for just just procedures it better ask a then I in and third in

Timothy Herbert

generally are up. as to Yes. describing it John, start ramp correctly it I we think you

year. the end be want of to by we the that think transitioned I

we in than quarter think the progress. year and we're it's just grow to through say safe certainly I first the less kind X% of as then

you that. way with describe the generally, So comfortable we're it,

Jonathan Block

just then changes. to UnitedHealthcare pivot, And Okay. coverage

The Do this you them sort go think complete to the it is was stick? little other call blockage. with those like the I way a of Obviously, a they expect surprise? the throughout with What you're the wording implementation a these DISE. XXXX. hoping payers And little Tim? of to reimplementing seemingly, absence do DISE you think awkward, the right, the bit PREDICTOR, of I've changes, got of about it reimplementation of

Timothy Herbert

referring Are like Okay. to you United?

Jonathan Block

correct, Yes, I but United. yes, United, I mentioned thought

Timothy Herbert

Yes.

more And a work to working too But they period United. They've over time, think is can United way to them. there's we but understand with have to changes is about. think made supportive need qualify of I so discussions we with what intent many a that. Inspire, with efficiently that, need we're patients communicate understand to PREDICTOR for if with of continue is I who the to

But documenting intent preparing we'll to the The back go is manuscript, don't physicians work are and DISE. that's to think with the be the and and submitted, be in study I force to doing the really job a continue great getting close payers. to able so

with qualified we properly but physician other to That just could has more built up that communication sure but payers there's method think to Inspire system. to specify the going they the into be DISE, the be patient, that. patient. neck what clarify to to are is BMI, But the could diagnose work just for necessarily to so happen for sure could need by using to make we for a be flexibility that have circumference, appropriate that make we're sure it's to DISE, the make I not continue again,

to up the physician it's So make determination. that to

Operator

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

Michael Polark

'XX. disclosure Just one for me, know bigger in the going picture. I center away is

probably years. seen hear you did adds I what in zone the about say last of quarterly Rick, Although, of couple in the we've

a to So center I'm your of disclosure What's goes to, gets just a the latest horizon? like you us of curious, math what there, can potential end I'm the 'XX X,XXX X,XXX there? update centers. What X-year you like? on are or base for look longer-term it square view this planning say, you X- before over at away, might

Timothy Herbert

Yes. Mike. Thank you,

I and we growing. consistent want think keep stay to

same-store of we our and we we with that's at contracts organization, transition grow we well talked our as V national can a get able because help to ASCs have the as group on those sites sales get be lot some centers focused to believe about we utilization and when those of of As increase board. into a to some an in across

you the So And we when adoption. even very in early our expanding. contracts, look early with We're continually stages, we as at very we're ASCs. know, of the of look national at at stages some

go, to be V. advantage have really and the quite we accounts So and long targets to those adopt a a now way we Inspire national and Inspire have specific helping take of group able really those addressing to

Operator

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

Michael Kratky

on on ASCs. Tim, comments to circle those of back the some I'd love

different what in what priorities does setting? economics driving this have adoption of understand fit us strategic So just to that help on extent And an the a, then year? just impact ASCs based into that could among can continued kind your you

Timothy Herbert

Absolutely.

be and of Inspire adopt to I program. limits the ASCs South, in of was ASCs economics challenges think one the down had and able it to strong with we the economics specifically ability adjusted a

due already slightly breakeven more cases, with ASC. their ENTs who to to the It's loss $X,XXX. a there. that to into increases Inspire ASC. actually their there's a they're an the of group situation bring of really new But of unable or can implants the that do most them a And their approximately the Medicare commercial the XXXXX, some in to it Going positive really CPT some to economics. take cases, to impetus private cases code participate of allow reimbursement physicians in and a from locations. ASC takes practice is And at today They the

really going put will certainly to concentrated to think coding help these be change the grow able new I a So help ASCs and effort we're to them, this adoption.

Operator

from Co. question line And comes queue from the Kalia of & I Oppenheimer show our last in Suraj the

Suraj Kalia

you right? can Rick, all Tim, hear me

Timothy Herbert

Suraj. Very good,

Suraj Kalia

the still I Tim, on But some not can your strong Congrats on end investigation. us. to early. more providing commentary Perfect. comments DOJ for appreciate shed the any color It's a you year. about maybe

were them all? XX,XXX of FY patients would how you 'XX, tried many say, have not say Let's implanted CPAP at a in

Timothy Herbert

as payers Medicaid. including requirement I government It's know that have think standard that, the but like pretty well don't very as as have, a we specifically the everybody I takes related very well a to It's that few. physicians hard Medicare seriously. and DOJ payers, hard pretty as

Operator

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

Timothy Herbert

Thank you for all call the joining today. Dilem. Thanks,

outcomes. growing As remains Inspire their motivation enthusiasm, commitment always, to and the to and The our I'm is for grateful important work continued dedicated to successful of patients element success. the hard most employees patient team's to achieve and consistent unmatched team

I remain wish the to teams our Europe Asia. expanding thank for U.S., as further well and as health on all of our as employees care efforts business in the their continued we focused

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

Operator

today's conference This you. call. Thank concludes

You may now disconnect.

Inspire Medical Systems (INSP) 10 Feb 252024 Q4 Earnings call transcript