Inspire Medical (NYSE: INSP) stock has fallen more than 40% today on Q2 results that included a significantly reduced outlook.
The company previously projected adjusted earnings per share to range between $2.20 to $2.30 in 2025. However, it now forecasts between 40¢ and 50¢ for the full year. Inspire also reduced its sales guidance from between $940 million and $955 million to between $900 million and $910 million.
This slash, announced yesterday after market close, comes as Inspire faces certain headwinds, along with $1.7 million in litigation-related legal expenses. Those costs represent legal-related expenses related to a U.S. Dept. of Justice investigation and a patent infringement suit filed against Nyxoah.
Shares of INSP fell more than 19% to $129.95 apiece in post-market trading after releasing the earnings report yesterday. By midday today, shares fell more than 40% to $76.01 apiece.
“Importantly, we believe the operational headwinds are temporary, and actions are underway to address them,” said Tim Herbert, Inspire chair and CEO. “We remain steadfast in our commitment to serving the many patients who struggle with untreated moderate to severe [obstructive sleep apnea], delivering strong patient outcomes and executing on our strategy to drive profitable growth and value creation for all stakeholders.”
The results for Inspire still beat The Street but next-gen system launch timeline is pushed back
The Minneapolis-based developer of implantable neuromodulation technology for treating sleep apnea reported losses of $3.6 million. That equals 12¢ per share on sales of $217.1 million for the three months ended June 30, 2025.
Inspire recorded a large bottom-line slide into the red on a sales increase of 10.8%.
Adjusted to exclude one-time items, earnings per share came in at 45¢. That landed 25¢ ahead of expectations on Wall Street. Sales also eclipsed projections as experts forecast $214.3 million in revenue.
Highlights for the quarter included the launch of the Inspire V next-generation sleep apnea therapy system.
“The full launch of our FDA-cleared Inspire V system in the U.S. is an important milestone for Inspire. We have been receiving strong positive feedback from both surgeons and patients who value the simplified procedure and excellent patient outcomes enabled by this next generation technology,” Herbert said. “In the near future, we look forward to presenting the clinical evidence collected to date.”
“The broad enthusiasm for Inspire V gives us confidence that it will be a growth engine for the company. However, the U.S. commercial launch is progressing slower than expected, and the timeline to complete the full transition to Inspire V has been pushed forward, which will impact financial results for the year.”
Truist analysts led by Richard Newitter downgraded their rating of INSP shares to Hold from Buy, saying it was difficult to parse out what was transient in the Q2 report.
Meanwhile, Baird analysts David Rescott and Tommy Han stuck with an Outperform while revising down their price target: “We think a return to more normalized growth levels in 2026 (which management pointed to) is achievable.”
