Highlights

  • Second quarter 2026 revenue was $200,581 thousand, compared with $217,086 thousand, and net earnings were $314 thousand, or $0.01 per diluted share.
  • On August 3, 2026, Inspire announced Project Horizon, with expected pre-tax restructuring charges of $20 million to $25 million.
  • The company said coding and reimbursement challenges adversely impacted first-half 2026 revenue and are expected to continue through the rest of 2026.
  • Management now expects full-year 2026 revenue of $835 million to $875 million and a third quarter revenue decline of 8% to 10%.

Inspire Medical Systems, Inc. (NYSE: INSP) shares were trading at USD 70.45 on October 27, 2026, down 0.79%, with a relative volume at time of 2.12. The medical technology company announced Project Horizon on August 3, 2026, filed its quarterly report for the period ended June 30, 2026 the same day, and gave updated 2026 guidance on its August 10, 2026 earnings call.

Inspire Medical Systems is incorporated in Delaware and lists its principal executive offices in Golden Valley, Minnesota. It develops and commercializes minimally invasive solutions for obstructive sleep apnea. Its Inspire system is a neurostimulation technology that continuously monitors a patient's breathing and delivers mild hypoglossal nerve stimulation to maintain an open airway, and it is indicated for patients with moderate to severe obstructive sleep apnea. Its fiscal year ends December 31.

Second Quarter 2026 Results

For the three months ended June 30, 2026, unaudited revenue was $200,581 thousand, compared with $217,086 thousand in the same quarter of 2025. The company said the decrease of 7.6% was driven primarily by a decline in U.S. revenue, partially offset by International growth, and that the U.S. decline was driven primarily by coding and reimbursement challenges.

Gross profit was $171,459 thousand, and gross margin was 85.5% compared with 84.0%. The operating loss was $514 thousand, compared with $3,316 thousand. Net earnings were $314 thousand, compared with a net loss of $3,592 thousand. For the six months, revenue was $405,164 thousand and the net loss was $10,980 thousand, or $0.38 per share.

Reimbursement, Litigation and Market Factors

The company said uncertainty around coding and reimbursement for Inspire V from CMS and Medicare Administrative Contractors has adversely impacted revenue, and that it anticipates continued impact in the remainder of 2026. It is seeking a separate CPT code, and there can be no guarantee as to the timing or outcome of the application. The company added that it currently believes revenue is being adversely impacted in the short term by the increasing prevalence and adoption of GLP-1s.

The 10-Q describes a putative securities class action filed against the company and certain executive officers over statements about the Inspire V launch, with an amended complaint filed on July 30, 2026, and two stockholder derivative lawsuits that remain stayed.

Cash, Liquidity and Project Horizon

At June 30, 2026, cash and cash equivalents were $127,761 thousand, short-term investments were $192,923 thousand and long-term investments were $94,480 thousand. Net cash provided by operating activities was $36.1 million for the six months, compared with $4.0 million used in the prior year period.

Project Horizon is intended to create additional investment capacity through aligning resources to revenue growth initiatives, streamlining the organization and consolidating production. The company expects pre-tax restructuring charges of $20 million to $25 million and approximately $30 million of annualized growth investment capacity. On the call, management said approximately 90% of the charges are expected in the third quarter, with $16 million to $20 million being noncash impairment charges related to production equipment at vendors.

2026 Outlook

The 10-Q does not provide numerical guidance. On the August 10, 2026 call, management said it expects full-year revenue of $835 million to $875 million, adjusted operating margin of 4% to 6%, diluted EPS of a loss of $0.42 to earnings of $0.17 and adjusted diluted EPS of $1.05 to $1.45. It estimated a full-year impact from coding and reimbursement and WISeR of $120 million to $130 million and capital expenditures of $35 million to $40 million.

For the third quarter, management said it forecasts a revenue decline of 8% to 10% year over year and approximately breakeven adjusted operating income.