Inspire Medical Systems Q2 2025 slides: Revenue growth continues with Inspire V launch

Introduction & Market Context

Inspire Medical (TASE:BLWV) Systems (NYSE:INSP) presented its Q2 2025 corporate update on August 4, 2025, highlighting continued revenue growth and the successful launch of its next-generation Inspire V system. The company, which specializes in neurostimulation therapy for obstructive sleep apnea (OSA), reported Q2 2025 revenue of $217.1 million, representing an 11% increase year-over-year, though growth has moderated from the 23% increase seen in Q1.

Following the earnings release, Inspire’s stock rose 3.41% to close at $126.10, with an additional 1.93% gain in aftermarket trading, reflecting positive investor sentiment despite the slowing growth rate. The company continues to target the significantly underpenetrated OSA market, estimated at over $10 billion in the U.S. alone.

Financial Performance Highlights

Inspire Medical Systems has maintained an impressive growth trajectory, with annual revenue increasing from $29 million in 2017 to $803 million in 2024, representing a compound annual growth rate (CAGR) of 58% from 2018 to 2024. The company achieved a gross margin of 84% in Q2 2025, consistent with its historical performance.

As shown in the following chart of annual revenue and gross margin performance:

For the full year 2025, Inspire has provided guidance of $900-910 million in revenue, representing approximately 12-13% growth over 2024, with gross margins expected to remain strong at 84-86%. The company also projects EPS of $0.40-$0.50 for the year, though more recent earnings reports suggest this may be conservative, with updated guidance pointing to $2.20-$2.30 per share.

The company’s quarterly revenue growth, while still positive, shows signs of moderating from the explosive growth of previous years:

Product Innovation and Market Opportunity (SO:FTCE11B)

Inspire’s growth strategy centers on its innovative neurostimulation therapy for OSA, which offers an alternative for the approximately 700,000 patients annually who fail to comply with CPAP therapy. The company estimates that about 500,000 of these patients are eligible for Inspire therapy, creating a substantial addressable market.

The company’s therapy works by delivering mild stimulation to key airway muscles during sleep, allowing the airway to remain open. The system consists of three components working together:

In May 2025, Inspire fully launched its next-generation Inspire V system in the U.S., featuring significant improvements over previous versions:

The company has also developed SleepSync™, a digital health platform designed to improve patient engagement and care coordination:

Strategic Growth Initiatives

Inspire has outlined a comprehensive growth strategy focused on six key elements to drive continued expansion in the OSA market:

The company has achieved significant market penetration milestones, with over 100,000 patients receiving Inspire therapy to date. This represents substantial progress but still indicates less than 5% penetration of the estimated $10+ billion U.S. market opportunity.

As illustrated in the following overview, Inspire has established itself as a first mover and innovation leader in the OSA neurostimulation space:

Forward-Looking Statements

Looking ahead, Inspire Medical Systems is focused on balancing growth with profitability. The company’s transition from the rapid expansion phase to more moderate but sustainable growth is evident in its financial projections and strategic initiatives.

Key metrics that investors should monitor include:

1. Adoption rates of the new Inspire V system

2. International expansion progress, particularly in Europe and Asia

3. Integration and utilization of the SleepSync™ digital health platform

4. Gross margin sustainability as the product mix evolves

5. Progress toward consistent profitability

While the company faces potential challenges including slowing growth rates, international revenue declines (down 6% in Q1 2025), and reimbursement code changes, its strong market position, high patient satisfaction rates, and continued innovation provide a solid foundation for future performance.

The company’s key financial and operational metrics underscore its significant progress and remaining market opportunity:

With a proven management team, strong intellectual property portfolio, and continued focus on innovation, Inspire Medical Systems appears well-positioned to maintain its leadership in the OSA therapy market, though investors should be mindful of the transition to a more moderate growth phase as the company matures.

Full presentation:

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