Inspire Medical Systems (INSP) Q2 2026 earnings summary

Executive summary

• Q2 2026 revenue was $200.6 million, down 7.6% year-over-year due to U.S. reimbursement and coding challenges, partially offset by international growth.

• Diluted EPS was $0.01; adjusted diluted EPS was $0.14; net earnings reached $0.3 million.

• Project Horizon, a strategic growth plan, was launched to optimize operations and unlock $30 million in annualized investment capacity for growth initiatives, with $20–$25 million in expected pre-tax restructuring charges.

• Clinical data and independent studies reinforced the safety, efficacy, and cardiovascular benefits of Inspire V therapy, supporting long-term growth.

• Continued commercial expansion included the full U.S. launch of Inspire V and broad adoption of the SleepSync digital health platform.

Financial highlights

• Gross margin improved to 85.5% in Q2 2026, driven by a favorable sales mix toward higher-margin products.

• Adjusted operating margin for Q2 2026 was 1.6%; adjusted EBITDA margin was 19.4%.

• Operating cash flow was $23.2 million for Q2 2026 and $36.1 million year-to-date.

• Cash, cash equivalents, and investments totaled $415.2 million as of June 30, 2026.

• Net earnings margin was 0.2% for Q2 2026.

Outlook and guidance

• Full-year 2026 revenue guidance raised to $835–$875 million, reflecting Q2 performance and ongoing reimbursement disruption.

• Adjusted operating margin expected at 4%–6%; adjusted diluted EPS forecasted at $1.05–$1.45.

• Estimated total impact of coding and reimbursement issues for 2026 is $120 million–$130 million, with sequential improvement expected in the second half.

• Capital expenditures for 2026 expected between $35 million and $40 million.

• Effective tax rate projected at 95–100%; adjusted effective tax rate at 30–41.2%.