INSP Stock Gains Following Q3 Earnings Beat, Gross Margin Expands

Inspire Medical Systems, Inc. INSP delivered adjusted earnings per share (EPS) of 38 cents in third-quarter 2025, down 36.7% year over year. The figure compares with the Zacks Consensus Estimate of a loss of 15 cents.

INSP’s Revenues in Detail

Inspire Medical registered revenues of $224.5 million in the third quarter, up 10.5% year over year. The figure beat the Zacks Consensus Estimate by 1.6%.

Per management, the overall revenue growth was primarily driven by increased market penetration and increased physician and patient awareness of the Inspire system. However, this was partially offset by ENT surgeon capacity constraints and some U.S. patients and physicians delaying Inspire therapy until Inspire V is available at their location or while they trial GLP-1 medications.

Shares of this company gained nearly 7.2% in today’s pre-market trading.

Inspire Medical’s Segment Details

Inspire Medical’s operations consist of two geographic regions — the United States and All other countries.

In the quarter under review, U.S. revenues of $214.4 million reflected an increase of 9.5% from the year-ago quarter on a reported basis.

As of Sept. 30, 2025, INSP had 336 U.S. sales territories and 268 field clinical representatives, compared with 335 U.S. sales territories and 230 field clinical representatives as of Dec. 31, 2024.

Revenues from All other countries totaled $10.1 million, up 37.3% year over year on a reported basis.

Inspire Medical Systems, Inc. Price, Consensus and EPS Surprise

Inspire Medical Systems, Inc. price-consensus-eps-surprise-chart | Inspire Medical Systems, Inc. Quote

INSP’s Margin Analysis

In the third quarter, Inspire Medical’s gross profit increased 12.8% year over year to $192.7 million. The gross margin expanded 179 basis points (bps) to 85.8%.

Selling, general and administrative expenses jumped 21.8% year over year to $158.9 million. Research and development expenses decreased 7.2% year over year to $24.2 million. Operating expenses of $183.1 million increased 17% year over year.

Operating profit totaled $9.6 million, reflecting a 32.6% plunge from the year-ago quarter. The operating margin in the third quarter contracted 275 bps to 4.3%.

Inspire Medical’s Financial Position

Inspire Medical exited third-quarter 2025 with cash and cash equivalents and short-term investments of $322.6 million compared with $300.9 million at the second-quarter end.

Cumulative net cash provided by operating activities at the end of third-quarter 2025 was $64.5 million compared with $61.1 million a year ago.

INSP’s Outlook

Inspire Medical has reiterated its revenue outlook for 2025 and raised its EPS outlook.

The company continues to project revenues in the range of $900 million-$910 million (representing growth of 12-13% from 2024 levels). The Zacks Consensus Estimate is pegged at $904.2 million.

INSP now expects its EPS for 2025 to be between 90 cents and $1.00, up from the prior outlook of 40 cents and 50 cents. The Zacks Consensus Estimate is pegged at $1.03.

Our Take on Inspire Medical

Inspire Medical exited the third quarter of 2025 with better-than-expected results. The robust improvement of the top line and strength in year-over-year geographical revenues were impressive. The increased market penetration and increased physician and patient awareness of the Inspire system during the reported quarter were encouraging. The gross margin expansion bodes well for the stock.

Per management, INSP is making progress with the U.S. launch of the Inspire V system, with more than 75% of centers ready to transition to Inspire V. This looks promising for the stock.

However, the dismal bottom-line performance was disappointing. The contraction of the operating margin does not bode well for the stock.

INSP’s Zacks Rank and Key Picks

Inspire Medical currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader medical space that have announced quarterly results are Boston Scientific Corporation BSX, West Pharmaceutical Services, Inc. WST and HCA Healthcare, Inc. HCA.

Boston Scientific, carrying a Zacks Rank of 2 (Buy), reported third-quarter 2025 adjusted EPS of 75 cents, beating the Zacks Consensus Estimate by 5.6%. Revenues of $5.07 billion outpaced the consensus mark by 1.9%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Boston Scientific has a long-term estimated growth rate of 16.4%. BSX’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 7.4%.

West Pharmaceutical reported third-quarter 2025 adjusted EPS of $1.96, beating the Zacks Consensus Estimate by 17.4%. Revenues of $804.6 million surpassed the Zacks Consensus Estimate by 2.4%. It currently carries a Zacks Rank #2.

West Pharmaceutical has a long-term estimated growth rate of 9.8%. WST’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 15.5%.

HCA Healthcare reported third-quarter 2025 adjusted EPS of $6.96, beating the Zacks Consensus Estimate by 23.2%. Revenues of $19.16 billion surpassed the Zacks Consensus Estimate by 3.6%. It currently sports a Zacks Rank #1.

HCA Healthcare has a long-term estimated growth rate of 12.3%. HCA’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 12.4%.

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This article originally published on Zacks Investment Research (zacks.com).

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