Inspire Medical Systems’ second quarter results were marked by improved coding clarity and cost discipline, which management credited as key drivers behind the company’s outperformance versus Wall Street expectations. Despite a year-on-year revenue decline, CEO Tim Herbert pointed to effective navigation of the evolving reimbursement landscape as a critical factor, stating the company delivered “adjusted operating income and positive cash flow ahead of expectations through continued disciplined cost management.” The quarter also benefited from increased adoption of the new Inspire V system and targeted support for high-volume centers, as Inspire worked to stabilize operations and address the temporary disruption caused by earlier coding changes.
Is now the time to buy INSP? Find out in our full research report (it’s free for active Edge members).
Inspire Medical Systems (INSP) Q2 CY2026 Highlights:
- Revenue: $200.6 million vs analyst estimates of $194.7 million (7.6% year-on-year decline, 3% beat)
- Adjusted EPS: $0.14 vs analyst estimates of -$0.25 (significant beat)
- Adjusted EBITDA: $38.9 million vs analyst estimates of $27.68 million (19.4% margin, 40.5% beat)
- The company slightly lifted its revenue guidance for the full year to $855 million at the midpoint from $850 million
- Management raised its full-year Adjusted EPS guidance to $1.25 at the midpoint, a 25% increase
- Operating Margin: -0.3%, up from -1.5% in the same quarter last year
- Market Capitalization: $1.74 billion
While we enjoy listening to the management’s commentary, our favorite part of earnings calls is the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Inspire Medical Systems’s Q2 Earnings Call
- Jonathan Block (Stifel) asked about the impact of physician fee reductions in two MAC regions and the pace of coding education. CEO Tim Herbert explained that education efforts are minimizing reductions and that the company is working through its highest-volume centers, expecting most to be up to speed in the third quarter.
- Adam Maeder (Piper Sandler) requested more detail on Project Horizon’s growth investments and timing. Herbert responded that most initiatives target patient flow and will have a more substantial impact in 2027, with some benefits possible by late 2026.
- Anthony Petrone (Mizuho Americas) inquired about the backlog of procedures and the future of the WISeR program. Herbert confirmed that procedure volumes are recovering as coding comfort improves and that the company is prepared for potential changes to WISeR, with C-codes now incorporated.
- Richard Newitter (Truist Securities) asked about GLP-1 drugs’ impact and whether Project Horizon capacity would help expand the physician base. Herbert said GLP-1s have not materially affected Inspire demand and that new investments will support both center and physician expansion.
- Daniel Markowitz (Evercore ISI) questioned the effectiveness of center education programs and international growth drivers. Herbert shared that volumes rebound as centers gain billing confidence and highlighted Continental Europe, especially France, for recent international strength.
Catalysts in Upcoming Quarters
Looking ahead, our team will be monitoring (1) the pace at which U.S. centers adapt to the new coding environment and resume pre-disruption procedure volumes, (2) the execution and measurable impact of Project Horizon’s investments in patient flow and digital engagement, and (3) further international growth, particularly in European markets with recent reimbursement wins. Additionally, clarity on CMS reimbursement rates and adoption of new clinical evidence into practice will be key indicators for Inspire’s trajectory.
Inspire Medical Systems currently trades at $60.51, up from $52.22 just before the earnings. Is there an opportunity in the stock? Find out in our full research report (it’s free).
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