• Revenue: $239.7 million for Q4 2024, a 25% increase from Q4 2023.
• US Revenue: $231.6 million for Q4 2024, a 22% increase from Q4 2023.
• International Revenue: $8.1 million for Q4 2024, a 163% increase year over year.
• Gross Margin: 85% for Q4 2024.
• Operating Expenses: $171.8 million for Q4 2024, an 11% increase from Q4 2023.
• Net Income: $35.2 million for Q4 2024, a 15% net income margin, compared to $14.8 million in Q4 2023.
• Diluted Net Income Per Share: $1.15 for Q4 2024, compared to $0.49 in Q4 2023.
• Adjusted EBITDA: $62.7 million for Q4 2024, a 26% adjusted EBITDA margin.
• Operating Cash Flow: $69 million for Q4 2024, $130 million for the full year 2024.
• Total Cash and Investments: $517 million as of December 31, 2024.
• Full Year Revenue: $802.8 million for 2024, a 28% increase from 2023.
• Full Year Net Income: $53.5 million for 2024, a 7% net income margin.
• Full Year Diluted Net Income Per Share: $1.75 for 2024, compared to a net loss of $0.72 per share in 2023.
• 2025 Revenue Guidance: $940 million to $955 million, representing 17% to 19% growth year over year.
• 2025 Gross Margin Guidance: 84% to 86%.
• 2025 Diluted Net Income Per Share Guidance: $2.10 to $2.20.

• Warning! GuruFocus has detected 6 Warning Signs with INSP.

Release Date: February 10, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Inspire Medical Systems Inc (NYSE:INSP) achieved its first full year of profitability in 2024, with a net income of $53.5 million compared to a net loss in 2023.
• The company reported a 25% increase in revenue for Q4 2024 compared to the same period in 2023, reaching $239.7 million.
• Inspire Medical Systems Inc (NYSE:INSP) received FDA approval for the Inspire V neurostimulator, which simplifies the implantation process and reduces production complexity and cost.
• The company expanded its market presence by adding 72 new US centers and 12 new US sales territories in Q4 2024.
• Inspire Medical Systems Inc (NYSE:INSP) has a strong cash position with $517 million in cash and investments as of December 31, 2024, allowing for continued investment in growth strategies.

Negative Points

• The company received a civil investigative demand from the Department of Justice regarding its marketing, promotion, and reimbursement practices.
• Despite profitability, Inspire Medical Systems Inc (NYSE:INSP) does not expect to be profitable in Q1 2025 due to revenue seasonality.
• The full launch of the Inspire V neurostimulator is contingent on building sufficient inventory, which may delay its widespread availability.
• Operating expenses increased by 11% in Q4 2024 compared to the same period in 2023, primarily due to sales organization expansion and increased corporate costs.
• The company faces potential challenges with the reimplementation of DISE requirements by UnitedHealthcare, which could impact patient qualification processes.

Q & A Highlights

Q: Can you provide insights into the EPS guidance and the DOJ CID investigation? A: Richard Buchholz, CFO, explained that the company is committed to improving annual operating margins, with sequential improvement expected after Q1. Regarding the DOJ CID, Timothy Herbert, CEO, stated that the company is cooperating with the investigation and remains committed to ethical business practices.

Q: How has the digital scheduling tool impacted patient volumes at centers? A: Timothy Herbert, CEO, noted that the digital scheduling tool has significantly streamlined the appointment process, leading to increased patient engagement. The company plans to expand this program in 2025.

Q: What is the impact of Inspire V on physician reimbursement and procedure adoption? A: Timothy Herbert, CEO, stated that Inspire V reduces surgical time and complexity, which should encourage more surgeons to adopt the therapy. The reimbursement is expected to be consistent on a time-adjusted basis, allowing surgeons to perform more cases.

Q: How should we think about the phasing of revenues and expenses with the Inspire V launch? A: Richard Buchholz, CFO, indicated that while Q1 estimates are comfortable, sequential revenue growth is expected throughout the year. The company will continue investing in R&D and expanding its footprint, with profitability following revenue growth.

Q: What is the company's strategy for increasing utilization at established centers? A: Richard Buchholz, CFO, mentioned that the company plans to expand its footprint of territories and centers, focusing on increasing throughput and leveraging existing infrastructure to drive growth.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.