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Inspire makes implantable sleep-apnea devices. It expects low-single-digit revenue growth in 2027, before new billing codes take effect in 2028; sales and adjusted operating profit remain below last year.
Inspire Medical Systems, Inc. (NYSE: INSP) makes implantable neurostimulation systems for obstructive sleep apnea. Its business is concentrated in the United States, where coding and reimbursement uncertainty has affected sales of its Inspire V system.
The table compares the three months ended September 30. Amounts are USD millions, except per-share figures.
| Results | 2026 | 2025 |
|---|---|---|
| Revenue | 206.7 | 224.5 |
| Operating income (loss), GAAP | (28.7) | 9.6 |
| Adjusted operating income | 1.9 | 10.9 |
| Net income (loss), GAAP | (24.4) | 9.9 |
| Diluted EPS, GAAP | (0.84) | 0.34 |
| Operating cash flow, GAAP | 46.4 | 68.5 |
Revenue rose 3% from Q2's $200.6 million but fell 7.9% from a year earlier. Gross margin improved to 86.0%, from 85.8%, supported by a higher mix of Inspire V sales.
Adjusted operating income excludes $24.1 million of restructuring, $7 million of expense for a proposed pixel-tracking class-action settlement and $3.6 million of selected legal fees. It also reverses a $4.1 million stock-compensation benefit from employee share forfeitures. Adjusted net income was $4.1 million, or $0.14 a share, after the related tax adjustments.
Announced on August 3, Project Horizon aims to redirect approximately $30 million of annualized operating spending into growth initiatives. It combines organizational changes with production consolidation and investments intended to improve the patient journey.
The Q3 charge of $24.1 million included $21.1 million of noncash equipment impairments and $3.1 million of severance. The company expects approximately $25 million of total pretax charges, within the original $20 million to $25 million range.
Most actions were completed in Q3, with substantial completion expected by year-end. A $1.5 million severance accrual remained at September 30, mostly payable in Q4 and early 2027.
The 2026 revenue forecast is $850 million to $860 million, versus August's $835 million to $875 million. Both ranges have a $855 million midpoint. The adjusted operating margin range narrowed to 4.5% to 5.5% from 4% to 6%.
Adjusted EPS is forecast at $1.20 to $1.40, versus $1.05 to $1.45. GAAP EPS is forecast at a loss of $0.36 to $0.10, versus a loss of $0.42 to a profit of $0.17. Capital spending remains forecast at $35 million to $40 million.
Inspire anticipates low-single-digit revenue growth in 2027. Its November presentation gives no exact percentage or dollar range for that year.
Inspire says the American Medical Association approved new codes in September 2026 for single-lead devices that stimulate a tongue nerve to treat sleep apnea. The codes take effect on January 1, 2028. The company expects Medicare's proposed valuations in July 2027 and final valuations in November 2027. Until the new codes take effect, procedures continue under existing billing arrangements.
At September 30, Inspire held $190.8 million of cash and cash equivalents, $137.2 million of short-term investments and $125.1 million of long-term investments, totaling $453.1 million. The balance sheet showed no borrowing balance.
Operating cash flow for the first nine months rose to $82.5 million from $64.5 million. Cash capital spending was $26.4 million, versus $27.8 million.
Q3 operating cash flow fell to $46.4 million from $68.5 million. The prior-year quarter benefited from collections delayed by a temporary invoicing-portal issue in Q2 2025, which makes that quarterly comparison less straightforward than the year-to-date improvement.
Analysis INSP
Inspire expects modest growth in 2027, ahead of new billing codes in 2028. Our comparison examines the unchanged annual sales midpoint and the profit pressure beyond restructuring.