Inspire Medical Systems Inc. reported first‑quarter 2026 revenue of $204.6 million, up 1.6% from $201.3 million in Q1 2025, and an adjusted earnings per share of $0.10, a $0.46 beat over the consensus estimate of –$0.36. The company’s revenue also surpassed the consensus estimate of $198.74 million by $5.86 million.
Gross margin rose to 86.5% from 84.4% in the prior year, driven by a higher mix of the Inspire V system, but adjusted operating margin was only 0.2%, a sharp decline from 2.5% in Q1 2025, reflecting the impact of coding and reimbursement uncertainty.
The company said coding and reimbursement uncertainty, coupled with the federal WISeR prior‑authorization program, cost it roughly $20 million in Q1 revenue and is expected to generate a $120 million to $150 million headwind for the full year.
Accordingly, Inspire lowered its full‑year 2026 revenue outlook to $825 million–$875 million, down from the previous $950 million–$1 billion, and adjusted diluted EPS guidance to $0.75–$1.25, versus the prior $1.85–$2.35 range.
Tim Herbert, chairman and CEO, said, "Our first quarter results reflect revenue growth and improved adjusted operating income and cash flow. We remain focused on the factors within our control, including prioritizing revenue‑generating activities and maintaining disciplined cost management, while continuing targeted investments to support long‑term growth." Matthew Osberg, CFO, added, "Revenue increased 1.6% to $204.6 million, primarily driven by increased market penetration. In the first quarter, we experienced disruption related to coding and reimbursement challenges and the WISeR program, and we estimate that these items adversely impacted revenue by approximately $20 million."
Analysts responded to the lowered guidance by cutting price targets: Truist Financial lowered its target to $50, Mizuho cut to $55, and RBC Capital lowered to $45, reflecting concerns about the company’s ability to meet its revised growth expectations.
Despite the headwinds, management remains confident in long‑term demand for its neurostimulation therapy and is actively working with stakeholders to resolve coding and reimbursement uncertainties, suggesting that the current challenges are temporary and that the company’s core product pipeline remains robust.
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