Key Highlights

  • Revenue fell 7.9% to USD 206.7 million from USD 224.5 million, with gross Margin of 86.0% by our calculation.
  • Selling, general and administrative expense rose 16% to USD 184.4 million, including restructuring charges of USD 22.8 million.
  • The operating loss was USD 28.7 million versus income of USD 9.6 million, and net loss was USD 24.4 million.
  • Restructuring charges totaled USD 24.1 million, and cash ended the nine-month period at USD 190.8 million.

Quarter in Numbers

Inspire Medical Systems, Inc. (NYSE:INSP), a medical technology company that makes an implantable therapy for obstructive sleep apnea, reported third-quarter 2026 Revenue of USD 206.7 million versus USD 224.5 million. Cost of Goods Sold fell to USD 28.8 million from USD 31.8 million, leaving Gross Profit of USD 177.9 million versus USD 192.7 million and a gross margin of 86.0% versus 85.8% by our calculation. Research and Development expense fell to USD 22.2 million from USD 24.2 million, while selling, general and administrative expense rose to USD 184.4 million from USD 158.9 million.

Total operating expenses were USD 206.6 million versus USD 183.1 million, resulting in an operating loss of USD 28.7 million versus Operating Income of USD 9.6 million. Net interest and Dividend income was USD 3.9 million versus USD 4.0 million. The loss before income taxes was USD 25.0 million versus Earnings of USD 13.6 million, and the income tax was a benefit of USD 0.6 million versus an expense of USD 3.6 million. The net loss was USD 24.4 million, or USD 0.84 per share, versus net earnings of USD 9.9 million, or USD 0.34.

Project Horizon

The company incurred USD 24.1 million of pre-tax restructuring charges in the quarter under Project Horizon, of which USD 1.3 million was in research and development and USD 22.8 million in selling, general and administrative expense. They consisted of USD 3.1 million of employee severance and termination benefits and USD 21.1 million of non-cash asset Impairment charges. The company projects total pre-tax restructuring charges of about USD 25 million, with annualized cost savings of about USD 30 million. Most actions were completed in the third quarter and all are projected to be substantially complete by the end of 2026.

By our calculation, excluding the restructuring charges the operating loss would have been about USD 4.6 million, and selling, general and administrative expense would have risen about 1.7%.

Nine Months and Reimbursement

For the nine months, revenue was USD 611.9 million versus USD 642.9 million, operating loss was USD 30.3 million versus operating income of USD 4.8 million, and the net loss was USD 35.4 million, or USD 1.23 per share, versus earnings of USD 9.3 million, or USD 0.31. The nine-month tax provision was USD 15.9 million versus USD 6.0 million.

On the call, management discussed reimbursement developments. A temporary billing framework is in place, and management anticipates that centers keep using it through 2027, and the proposed 2027 hospital outpatient and ambulatory surgery center payment rule from CMS, issued in July, showed a significant increase, although management said it would confirm only when the final rule is published.

Cash and Restructuring Indicators

Cash and cash equivalents were USD 190.8 million at the end of the nine-month period, up from USD 112.8 million a year earlier by our calculation. Items to track include revenue trends after the decline, savings from Project Horizon, the final CMS payment rule, selling expense levels and tax charges.