Inspire Medical Q2 Earnings Beat Expectation, Sales More Than Tripled, Raises FY21 Outlook

  • Inspire Medical Systems Inc INSP generated revenue of $53.0 million in Q2, a 335% Y/Y increase, beating the consensus of $43.87 million.
  • U.S. revenue increased 349% to $49.4 million, and European revenue was up 201% to $3.6 million.
  • The gross margin increased to 85.8% from 84% a year ago, primarily due to higher sales volumes and manufacturing efficiencies.
  • Activated 63 new centers in the U.S., bringing the total to 535 U.S. medical centers implanting Inspire therapy, and above the company's expectation of 36 to 40 new centers.
  • Operating expenses increased to $58.0 million, up 75% Y/Y, reflecting expansion of the U.S. and European sales organizations, direct-to-patient marketing programs, and continued product development efforts, as well as increased general corporate costs.
  • Net loss came in at $(0.48) per share, down from $(0.88) a year ago, beating the consensus of $(0.64).
  • Cash, cash equivalents, and investments were $217.8 million.
  • FY 2021 Guidance: Inspire Medical increased revenue guidance to $210 million - $213 million (prior $192 million - $196 million), representing 82% - 85% Y/Y growth, versus the consensus of $195.62 million.
  • It also raised its gross margin guidance from 84% - 85% to 85% - 86%.
  • For the remainder of 2021, Inspire expects the opening of new U.S. medical centers of 48 - 52 per quarter, compared to the prior guidance of 36 - 40 centers. 
  • The company also increased guidance on adding new territories to adding 10 to 11 new territories per quarter in 2021, compared to the prior guidance of eight to nine territories.
  • SVB Leerink analyst Richard Newitter maintains Outperform rating on Inspire Medical, lowers Price Target to $265.
  • Price Action: INSP shares closed at $187 on Tuesday.
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