Inspire Medical Systems, Inc. (NYSE: INSP) (Inspire), a medical
technology company focused on the development and commercialization
of innovative, minimally invasive solutions for patients with
obstructive sleep apnea, today reported financial results for the
quarter and year ended December 31, 2023.
Recent Business Highlights and Full Year 2024
Guidance
- Generated revenue of $192.5 million in the fourth quarter
of 2023, a 40% increase over the same quarter last year, and
revenue of $624.8 million in full year 2023, a 53% increase
over full year 2022
- Achieved gross margin of 85.4% in the fourth quarter of
2023
- Reported net income of $14.8 million and diluted net income per
share of $0.49 in the fourth quarter of 2023
- Activated 78 new U.S. centers in the fourth quarter of 2023,
bringing the total to 1,180 U.S. medical centers providing Inspire
therapy
- Created 13 new U.S. sales territories in the fourth quarter of
2023, bringing the total to 287 U.S. sales territories
- Reaffirms full year 2024 revenue to be in the range of
$775 million to $785 million, which would represent
year-over-year growth of approximately 24% to 26%
"We are thrilled with our strong performance in the fourth
quarter, growing revenue 40% year-over-year and delivering over $14
million in net income. Our growth continues to be driven primarily
by higher utilization at existing sites and was complemented by the
addition of 78 new U.S. implanting centers and 13 new sales
territories," said Tim Herbert, President, and Chief Executive
Officer of Inspire Medical Systems. "During the quarter, we worked
diligently with commercial payers to update coverage policies for
our expanded indications, and we achieved several important
milestones, including surpassing 60,000 patients treated with
Inspire therapy and reporting our first quarter of operating
income. We expect this strong operating leverage to continue and to
reach profitability for the second half of 2024.”
Fourth Quarter 2023 Financial Results
Revenue was $192.5 million for the three months ended
December 31, 2023, a 40% increase from $137.9 million in the
corresponding period in the prior year. U.S. revenue for the
quarter was $189.4 million, an increase of 41% as compared to
the prior year quarter. Fourth quarter revenue outside the U.S. was
$3.1 million, a decrease of 16% as compared to the fourth
quarter of 2022.
Gross margin was 85.4% for the three months ended December 31,
2023, compared to 83.9% for the corresponding prior year period.
This increase was driven by increased volume and higher
manufacturing yields.
Operating expenses increased to $155.2 million for the
fourth quarter of 2023, as compared to $116.1 million in the
corresponding prior year period, an increase of 34%. This increase
primarily reflected ongoing investments in the expansion of the
U.S. sales organization, direct-to-patient marketing programs,
continued product development efforts, as well as increased general
corporate costs.
Net income was $14.8 million for the fourth quarter of
2023, as compared to $3.2 million in the corresponding prior
year period. The diluted net income per share for the fourth
quarter of 2023 was $0.49 per share, as compared to $0.10 in the
prior year period.
Full Year 2023 Financial Results
Revenue was $624.8 million for full year 2023, a 53%
increase from $407.9 million in the prior year. U.S. revenue
for the full year was $606.2 million, an increase of 54% as
compared to the prior year. Full year 2023 revenue outside the U.S.
was $18.6 million, an increase of 43% as over full year
2022.
Gross margin was 84.5% for full year 2023, compared to 83.8% for
full year 2022.
Operating expenses were $568.5 million compared to $389.3
million for full year 2022, an increase of 46%.
Net loss was $21.2 million compared to $44.9 million for full
year 2022, a 53% improvement.
As of December 31, 2023, cash, cash equivalents, and investments
increased to $469.5 million from $451.4 million on
December 31, 2022.
Full Year 2024
Guidance
Inspire is maintaining its full year 2024 revenue guidance of
between $775 million to $785 million, which represents
growth of 24% to 26% over full year 2023 revenue of
$624.8 million.
Gross margin for the full year is anticipated to be in the range
of 83% to 85%.
In addition, during each quarter of 2024, the Company expects to
activate 52 to 56 new U.S. medical centers implanting Inspire
therapy and add 12 to 14 new U.S. sales territories.
Webcast and Conference Call
Inspire’s management will host a conference call after market
close today, Tuesday, February 6, 2024, at 5:00 p.m. Eastern Time
to discuss these results and answer questions.
To access the conference call, please preregister on
https://register.vevent.com/register/BI4da0fb8e7625480f8890c3e09699bec4.
Registrants will receive confirmation with dial-in details.
A live webcast of the event can be accessed on
https://edge.media-server.com/mmc/p/9hhddszn/. A replay of the
webcast will be available on https://investors.inspiresleep.com
starting approximately two hours after the event and archived on
the site for two weeks.
About Inspire Medical Systems
Inspire is a medical technology company focused on the
development and commercialization of innovative, minimally invasive
solutions for patients with obstructive sleep apnea. Inspire’s
proprietary Inspire therapy is the first and only FDA-approved
neurostimulation technology that provides a safe and effective
treatment for moderate to severe obstructive sleep apnea.
For additional information about Inspire, please visit
www.inspiresleep.com.
Forward Looking Statements
This press release contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of
1995. All statements other than statements of historical facts are
forward-looking statements, including, without limitation,
statements regarding full year 2024 financial outlook, our
expectations to activate new U.S. medical centers and add new
territories per quarter in 2024 and the impact of such additions,
our expectations regarding operating leverage and profitability
during 2024, and our strategy and investments to grow and scale our
business. In some cases, you can identify forward-looking
statements by terms such as ‘‘may,’’ ‘‘will,’’ ‘‘should,’’
‘‘expect,’’ ‘‘plan,’’ ‘‘anticipate,’’ ‘‘could,’’ “future,”
“outlook,” “guidance,” ‘‘intend,’’ ‘‘target,’’ ‘‘project,’’
‘‘contemplate,’’ ‘‘believe,’’ ‘‘estimate,’’ ‘‘predict,’’
‘‘potential,’’ ‘‘continue,’’ or the negative of these terms or
other similar expressions, although not all forward-looking
statements contain these words.
These forward-looking statements are based on management’s
current expectations and involve known and unknown risks and
uncertainties that may cause our actual results, performance, or
achievements to be materially different from any future results,
performance, or achievements expressed or implied by the
forward-looking statements. Such risks and uncertainties include,
among others, estimates regarding the annual total addressable
market for our Inspire therapy in the U.S. and our market
opportunity outside the U.S.; future results of operations,
financial position, research and development costs, capital
requirements and our needs for additional financing; commercial
success and market acceptance of our Inspire therapy; the impact of
macroeconomic trends; general and international economic,
political, and other risks, including currency, inflation, stock
market fluctuations and the uncertain economic environment; our
ability to achieve and maintain adequate levels of coverage or
reimbursement for our Inspire system or any future products we may
seek to commercialize; competitive companies and technologies in
our industry; our ability to enhance our Inspire system, expand our
indications and develop and commercialize additional products; our
business model and strategic plans for our products, technologies
and business, including our implementation thereof; our ability to
accurately forecast customer demand for our Inspire system and
manage our inventory; our dependence on third-party suppliers,
contract manufacturers and shipping carriers; consolidation in the
healthcare industry; our ability to expand, manage and maintain our
direct sales and marketing organization, and to market and sell our
Inspire system in markets outside of the U.S.; risks associated
with international operations; our ability to manage our growth;
our ability to increase the number of active medical centers
implanting Inspire therapy; our ability to hire and retain our
senior management and other highly qualified personnel; risk of
product liability claims; risks related to information technology
and cybersecurity; risk of damage to or interruptions at our
facilities; our ability to commercialize or obtain regulatory
approvals for our Inspire therapy and system, or the effect of
delays in commercializing or obtaining regulatory approvals; FDA or
other U.S. or foreign regulatory actions affecting us or the
healthcare industry generally, including healthcare reform measures
in the U.S. and international markets; and the timing or likelihood
of regulatory filings and approvals. Other important factors that
could cause actual results, performance or achievements to differ
materially from those contemplated in this press release can be
found under the captions “Risk Factors” and "Management's
Discussion and Analysis of Financial Condition and Results of
Operations“ in our Annual Report on Form 10-K for the fiscal year
ended December 31, 2022, as updated in our Quarterly Report on Form
10-Q for the quarter ended September 30, 2023 to be filed with
the SEC, and as such factors may be updated from time to time in
our other filings with the SEC, which are accessible on the SEC’s
website at www.sec.gov and the Investors page of our website at
www.inspiresleep.com. These and other important factors could cause
actual results to differ materially from those indicated by the
forward-looking statements made in this press release. Any such
forward-looking statements represent management’s estimates as of
the date of this press release. While we may elect to update such
forward-looking statements at some point in the future, unless
required by applicable law, we disclaim any obligation to do so,
even if subsequent events cause our views to change. Thus, one
should not assume that our silence over time means that actual
events are bearing out as expressed or implied in such
forward-looking statements. These forward-looking statements should
not be relied upon as representing our views as of any date after
the date of this press release.
Investor & Media ContactEzgi YagciVice
President, Investor Relationsezgiyagci@inspiresleep.com
617-549-2443
Inspire Medical Systems,
Inc.
Consolidated Statements of Operations and
Comprehensive Income (Loss) (unaudited)
(in thousands, except share and per share
amounts)
|
|
Three Months Ended December 31, |
|
Year EndedDecember 31, |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
Revenue |
|
$ |
192,508 |
|
|
$ |
137,900 |
|
|
$ |
624,799 |
|
|
$ |
407,856 |
|
Cost of goods sold |
|
|
28,054 |
|
|
|
22,152 |
|
|
|
96,576 |
|
|
|
66,115 |
|
Gross profit |
|
|
164,454 |
|
|
|
115,748 |
|
|
|
528,223 |
|
|
|
341,741 |
|
Operating expenses: |
|
|
|
|
|
|
|
|
Research and development |
|
|
31,052 |
|
|
|
21,248 |
|
|
|
116,536 |
|
|
|
68,645 |
|
Selling, general and administrative |
|
|
124,105 |
|
|
|
94,835 |
|
|
|
451,958 |
|
|
|
320,688 |
|
Total operating expenses |
|
|
155,157 |
|
|
|
116,083 |
|
|
|
568,494 |
|
|
|
389,333 |
|
Operating loss |
|
|
9,297 |
|
|
|
(335 |
) |
|
|
(40,271 |
) |
|
|
(47,592 |
) |
Other (income) expense: |
|
|
|
|
|
|
|
|
Interest and dividend income |
|
|
(5,870 |
) |
|
|
(3,369 |
) |
|
|
(20,560 |
) |
|
|
(5,050 |
) |
Interest expense |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
1,677 |
|
Other (income) expense, net |
|
|
(73 |
) |
|
|
(241 |
) |
|
|
195 |
|
|
|
49 |
|
Total other income |
|
|
(5,943 |
) |
|
|
(3,610 |
) |
|
|
(20,365 |
) |
|
|
(3,324 |
) |
Income (loss) before income
taxes |
|
|
15,240 |
|
|
|
3,275 |
|
|
|
(19,906 |
) |
|
|
(44,268 |
) |
Income taxes |
|
|
477 |
|
|
|
125 |
|
|
|
1,247 |
|
|
|
613 |
|
Net income (loss) |
|
|
14,763 |
|
|
|
3,150 |
|
|
|
(21,153 |
) |
|
|
(44,881 |
) |
Other comprehensive income
(loss): |
|
|
|
|
|
|
|
|
Foreign currency translation gain |
|
|
144 |
|
|
|
195 |
|
|
|
140 |
|
|
|
89 |
|
Unrealized gain (loss) on investments |
|
|
612 |
|
|
|
82 |
|
|
|
746 |
|
|
|
(120 |
) |
Total comprehensive income
(loss) |
|
$ |
15,519 |
|
|
$ |
3,427 |
|
|
$ |
(20,267 |
) |
|
$ |
(44,912 |
) |
Basic income (loss) per
share |
|
$ |
0.50 |
|
|
$ |
0.11 |
|
|
$ |
(0.72 |
) |
|
$ |
(1.60 |
) |
Diluted income (loss) per
share |
|
$ |
0.49 |
|
|
$ |
0.10 |
|
|
$ |
(0.72 |
) |
|
$ |
(1.60 |
) |
Basic weighted average shares
outstanding |
|
|
29,517,375 |
|
|
|
28,931,271 |
|
|
|
29,302,154 |
|
|
|
28,071,748 |
|
Diluted weighted average
shares outstanding |
|
|
30,236,821 |
|
|
|
30,209,503 |
|
|
|
29,302,154 |
|
|
|
28,071,748 |
|
Inspire Medical Systems,
Inc.
Consolidated Balance Sheets
(unaudited)
(in thousands, except share and per share
amounts)
|
December 31, |
|
|
2023 |
|
|
|
2022 |
|
Assets |
|
|
|
Current assets: |
|
|
|
Cash and cash equivalents |
$ |
185,537 |
|
|
$ |
441,592 |
|
Investments, short-term |
|
274,838 |
|
|
|
9,821 |
|
Accounts receivable, net of allowance for credit losses of$1,648
and $36, respectively |
|
89,884 |
|
|
|
61,228 |
|
Inventories, net |
|
33,885 |
|
|
|
11,886 |
|
Prepaid expenses and other current assets |
|
9,595 |
|
|
|
5,505 |
|
Total current assets |
|
593,739 |
|
|
|
530,032 |
|
Investments, long-term |
|
9,143 |
|
|
|
— |
|
Property and equipment,
net |
|
39,984 |
|
|
|
17,249 |
|
Operating lease right-of-use
assets |
|
22,667 |
|
|
|
6,880 |
|
Other non-current assets |
|
11,278 |
|
|
|
10,715 |
|
Total assets |
$ |
676,811 |
|
|
$ |
564,876 |
|
Liabilities and
stockholders' equity |
|
|
|
Current liabilities: |
|
|
|
Accounts payable |
$ |
38,839 |
|
|
$ |
26,847 |
|
Accrued expenses |
|
39,266 |
|
|
|
34,339 |
|
Total current liabilities |
|
78,105 |
|
|
|
61,186 |
|
Operating lease liabilities,
non-current portion |
|
24,846 |
|
|
|
7,536 |
|
Other non-current
liabilities |
|
1,346 |
|
|
|
146 |
|
Total liabilities |
|
104,297 |
|
|
|
68,868 |
|
Stockholders' equity |
|
|
|
Preferred Stock, $0.001 par value, 10,000,000 shares authorized; no
shares issued and outstanding |
|
— |
|
|
|
— |
|
Common Stock, $0.001 par value, 200,000,000 shares authorized;
29,560,464 and 29,008,368 shares issued and outstanding at
December 31, 2023 and 2022, respectively |
|
30 |
|
|
|
29 |
|
Additional paid-in capital |
|
917,107 |
|
|
|
820,335 |
|
Accumulated other comprehensive income (loss) |
|
800 |
|
|
|
(86 |
) |
Accumulated deficit |
|
(345,423 |
) |
|
|
(324,270 |
) |
Total stockholders' equity |
|
572,514 |
|
|
|
496,008 |
|
Total liabilities and stockholders' equity |
$ |
676,811 |
|
|
$ |
564,876 |
|
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