A month has gone by since the last earnings report for Inspire Medical Systems (INSP). Shares have added about 57.6% in that time frame, outperforming the S&P 500.
But investors have to be wondering, will the recent positive trend continue leading up to its next earnings release, or is Inspire due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
INSP Q3 Earnings Beat Estimates, Gross Margin Expands
Inspire Medical delivered adjusted earnings per share 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.
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.
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%.
SG&A expenses jumped 21.8% year over year to $158.9 million. R&D 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 earnings per share 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 earnings per share 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.
How Have Estimates Been Moving Since Then?
Since the earnings release, investors have witnessed a flat trend in fresh estimates.
The consensus estimate has shifted 7.95% due to these changes.
VGM Scores
At this time, Inspire has a great Growth Score of A, though it is lagging a bit on the Momentum Score front with a B. However, the stock has a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Inspire has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Inspire Medical Systems, Inc. (INSP): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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