Inspire Medical (NYSE:INSP) today reported first-quarter financial results that came in ahead of the Wall Street forecast.
However, circumstances related to reimbursement coding resulted in significant guidance cuts for the company.
For 2026, Inspire expects adjusted EPS to range between 75¢ and $1.25, a significant decrease from the previous range of $1.85 to $2.35. It projects between $825 million and $875 million in sales, marking a year-over-year decrease of 4% to 10%. The company previously forecast for between $950 million to $1 billion in revenue, which reflected a decrease from the guidance given alongside its preliminary results, due to disruption from uncertainty related to reimbursement.
Shares of INSP tumbled more than 14% to $47.02 apiece after the market closed on Monday, May 4. On Tuesday, May 5, shares prices continued to fall, dipping 16.38% to $45.86 apiece at midday.
Why the guidance changed
Inspire disclosed earlier this year that coding transitioned for its Inspire V implantable neuromodulation procedure for treating sleep apnea. The company received clarification regarding this coding change, meaning physicians should bill the most recent healthcare policies, with the procedure transitioning to CPT code 64582.
According to Inspire, the result proved disappointing. It aims to create a separate CPT code to support “appropriate reimbursement” for Inspire V.
“Despite disruption from the coding and reimbursement uncertainty that arose at the beginning of the year, as well as the implementation of the WISeR program, we continued to advance the adoption of Inspire V given its simplified procedure and advanced features,” said Tim Herbert, Inspire chair and CEO. “As previously discussed, the CPT code used for approximately 10,000 Inspire V cases in 2025 is no longer available for reimbursement of Medicare cases, requiring physicians, centers, and our team to navigate coding alternatives during the quarter. We are proud of the team for delivering solid results and helping physicians and customers navigate through this uncertainty.”
A look at the Inspire Medical results
The Minneapolis-based neuromodulation company reported losses of $11.3 million. That equals 39¢ per share on sales of $204.6 million for the three months ended March 31, 2026.
Inspire recorded a bottom-line slide into the red on a sales increase of 1.6% year-over-year.
Adjusted to exclude one-time items, earnings per share came in at 10¢. That landed 36¢ ahead of expectations on Wall Street. Sales also outperformed estimates, as experts forecast $200 million in revenue.
The company is revising its previously announced revenue outlook to be in the range of $825 million to $875 million, which represents a decline of 4% to 10% compared to 2025. Additionally, Inspire Medical now expects annual adjusted operating margin in the range of 2% to 4%, diluted EPS in the range of $0.07 to $0.62 and adjusted diluted EPS in the range of $0.75 to $1.25.
For 2026, the company anticipates between $1.003 billion and $1.013 billion for another increase of 10%-11%.
“Our first quarter results reflect revenue growth and improved adjusted operating income and cash flow,” Herbert said. “We remain focused on the factors within our control, including prioritizing revenue-generating activities and maintaining disciplined cost management, while continuing targeted investments to support long-term growth, and we believe these actions position the company well in both the near and long term.
“We are continuing to work with key stakeholders to implement solutions that will resolve the coding and reimbursement uncertainty for Inspire V. We expect the challenges caused by this uncertainty to persist through the balance of 2026. That said, we believe that these challenges are temporary, and we expect to return to revenue growth in 2027 by leveraging the strength of the positive clinical outcomes of the Inspire V system.”
