Inspire Medical Systems (NYSE: INSP) easily blew past Wall Street predictions in Q2, though the company is scaling back its gross margin projections.
Minneapolis-based Inspire Medical is the maker of a minimally-invasive, implantable, pacemaker-like device that uses neurostimulation to treat obstructive sleep apnea. It lost $14.5 million, or 53¢ per share, off $91.4 million in sales for the quarter ended June 30, 2022 — versus a loss of $13.1 million, or 48¢ per share, off $53 million in sales for the same quarter a year before.
The results handily beat the expectations of Wall Street analysts, who had expected a loss of 62¢ per share off $78.28 million in revenue.
“The Inspire team executed extremely well during the second quarter, continuing the rebound from the first quarter that was challenged by both COVID and our normal seasonality. Moreover, our strong second quarter performance overcame several challenges common across the medical technology sector, including supply chain issues, staffing shortages and economic concerns, further highlighting the team’s resiliency and commitment to the patient,” Inspire Medical Systems CEO Tim Herbert said in a news release.
Besides the strong rebound, Herbert pointed to ongoing technology and digital development activities and positive reimbursement tailwinds. As a result, Inspire Medical officials now expect the company to bring in $354 million to $362 million in revenue this year, up from the company’s previous $336 million to $344 million revenue guidance.
Inspire Medical Systems recently scored two FDA approvals. The first involved expanded, full-body MRI compatibility. The second had to do with new stimulation and sensing silicone leads that company officials think will enable improved manufacturability, easier system implantation, increased long-term performance, and enhanced reliability.
The company plans to launch the new leads later this year. There are also plans for a full U.S. launch of the company’s Bluetooth-enabled patient remote to support its SleepSync program.
The new launches, though, could make some of the company’s present inventory obsolete. The inventory challenges, along with higher costs of certain component parts, led Inspire Medical officials to reduce their full-year gross margin guidance to 83% to 85%, from the previous guidance of 85% to 86%.
Investors reacted by sending INSP shares down more than 2% to $210.50 apiece in after-hours trading.