Inspire Medical Systems (INSP) Q3 2026 earnings summary

Executive summary

• Q3 revenue was $206.695M, down 7.9% YoY but up 3% sequentially; U.S. strength was offset by international weakness, with coding and reimbursement disruption a primary headwind.

• Project Horizon is redirecting ~$30M of annualized capacity toward growth initiatives, with management targeting a return to growth in 2027.

Financial highlights

• Q3 gross profit was $177.858M; gross margin was 86.0%, up 20 bps YoY, supported by higher Inspire V mix.

• Reported operating loss was $28.716M and net loss was $24.394M; diluted loss per share was $0.84, versus $9.9M net income and $0.34 EPS a year earlier.

• Adjusted operating income was $1.861M, adjusted operating margin 0.9%, adjusted net earnings $4.064M and adjusted diluted EPS $0.14.

• Operating expenses were $206.6M, including $24.1M of Project Horizon restructuring charges and $7.0M of legal settlement expense.

• Nine-month revenue was $611.9M versus $642.9M; net loss was $35.4M versus $9.3M net income.

Outlook and guidance

• FY 2026 revenue guidance narrowed to $850M–$860M from $835M–$875M; adjusted operating margin guidance narrowed to 4.5%–5.5%.

• FY 2026 diluted loss per share is projected at $0.36–$0.10; adjusted diluted EPS is $1.20–$1.40.

• Q4 revenue is expected to increase significantly sequentially in the U.S. and internationally; international revenue is expected to be flat YoY.

• FY 2027 worldwide revenue is expected to grow at a low-single-digit rate, supported by market growth, more stable coding, Project Horizon investments and battery replacements.

• FY 2026 assumptions include adjusted effective tax of 33%–34%, ~28.9M diluted shares and $35M–$40M in capital expenditures.