Adjustments for Non-Cash Items (USD, thousands)

Stock-Based Compensation (USD, thousands)

Changes in Working Capital (USD, thousands)

Capital Expenditures (CapEx) (USD, thousands)

Proceeds from / Repayments of Debt (USD, thousands)

Share Repurchases (USD, thousands)

Dividend Payments (USD, thousands)

Net Change in Cash (USD, thousands)

f65a8dc33f7fb13c73973c3b32df77ab3b695070d5ff019d1eb188f2147e7322

United States

- All Other Countries

Total Revenue

c5dee953b9a404eca6e7bbb6197c90ac77aa78e12e9274d88571e58f0a21b75b

Total Revenue (USD, thousands)

Cost of Goods Sold (COGS) (USD, thousands)

Selling, General, and Administrative Expenses (SG&A) (USD, thousands)

Research and Development (R&D) (USD, thousands)

Depreciation and Amortization (D&A) (USD, thousands)

Interest Expense (USD, thousands)

Operating Income (EBIT) (USD, thousands)

Net Income (USD, thousands)

Earnings Per Share (EPS) - Basic (USD)

Earnings Per Share (EPS) - Diluted (USD)

df56dc854f1e105ff133be5df5b971759ac175716807f9a3bcb60500e8732263

Current Assets (USD, thousands)

Cash and Cash Equivalents (USD, thousands)

Accounts Receivable (USD, thousands)

Inventory (USD, thousands)

Non-Current Assets (USD, thousands)

Property, Plant, and Equipment (PP&E) (USD, thousands)

Current Liabilities (USD, thousands)

Accounts Payable (USD, thousands)

Accrued Expenses (USD, thousands)

Shareholders' Equity (USD, thousands)

Retained Earnings (USD, thousands)

Common Stock (USD, thousands)

Additional Paid-in Capital (USD, thousands)

1a106eb325d328b2c2ef0ce9fc1ec27ca9a5118ea995d9064f962693630d32f0

Number of new U.S. centers that implant Inspire therapy (count)

Number of total U.S. centers that implant Inspire therapy (count)

Number of new U.S. sales territories (count)

Number of total U.S. sales territories (count)

Average BMI of patients treated with Inspire therapy (body mass index)

586899f9644c04e1215158300b46a063fd12107b07a8d60cc37479a23596d1c0

Cash and cash equivalents (USD, thousands)

Investments, short-term (USD, thousands)

Accounts receivable, net (USD, thousands)

Inventories, net (USD, thousands)

Prepaid expenses and other current assets (USD, thousands)

Total current assets (USD, thousands)

Investments, long-term (USD, thousands)

Property and equipment, net (USD, thousands)

Operating lease right-of-use assets (USD, thousands)

Other non-current assets (USD, thousands)

Total assets (USD, thousands)

Accounts payable (USD, thousands)

Accrued expenses (USD, thousands)

Total current liabilities (USD, thousands)

Operating lease liabilities, non-current portion (USD, thousands)

Other non-current liabilities (USD, thousands)

Total liabilities (USD, thousands)

Additional paid-in capital (USD, thousands)

Accumulated other comprehensive income (USD, thousands)

Accumulated deficit (USD, thousands)

Total stockholders' equity (USD, thousands)

Total liabilities and stockholders' equity (USD, thousands)

f4384abaf4e63e51f5de0e92d091ac60e1d5074a0824b3d2736797287496694c

Revenue (USD, thousands)

Cost of goods sold (USD, thousands)

Gross profit (USD, thousands)

Research and development expense (USD, thousands)

Selling, general and administrative expense (USD, thousands)

Total operating expenses (USD, thousands)

Operating income (loss) (USD, thousands)

Interest and dividend income (USD, thousands)

Other expense, net (USD, thousands)

Total other income (USD, thousands)

Income (loss) before income taxes (USD, thousands)

Income taxes (USD, thousands)

Net income (loss) (USD, thousands)

5edd731db6e5cbf3ee2ed9491d6dfaceb2ee4b4fed99c713468d72bc475a9dac

Net income (loss) [USD, thousands]

Depreciation and amortization [USD, thousands]

Accretion of investment discount [USD, thousands]

Stock-based compensation expense [USD, thousands]

Provision (benefit) for estimated credit losses [USD, thousands]

Other non-cash expenses [USD, thousands]

Net cash provided by operating activities [USD, thousands]

Purchases of property and equipment [USD, thousands]

Purchases of investments [USD, thousands]

Proceeds from sales or maturities of investments [USD, thousands]

Purchases of strategic investments [USD, thousands]

Net cash used in investing activities [USD, thousands]

Proceeds from the exercise of stock options [USD, thousands]

Accelerated share repurchase of common stock [USD, thousands]

Payment of taxes on net share settlement of equity awards [USD, thousands]

Net cash (used in) provided by financing activities [USD, thousands]

Effect of exchange rate on cash [USD, thousands]

(Decrease) increase in cash and cash equivalents [USD, thousands]

Cash and cash equivalents at beginning of year [USD, thousands]

Cash and cash equivalents at end of year [USD, thousands]

Property and equipment included in accounts payable and accrued expenses [USD, thousands]

79dd1003474a8cbb94ff7dd29a7edd6a4c451a34a34e4ec97b545b90d7036db9

The surge in **Operating income** in Q4 2024 was primarily driven by several factors. There was a **25% increase in revenue** from **$192.5 million** in Q4 2023 to **$239.7 million** in Q4 2024, with notable contributions from a **22% rise in U.S. revenue** and a **163% increase in revenue outside the U.S.** Additionally, while the gross margin saw a slight decrease from **85.4% to 85.0%**, the operating expenses increased by **11%** due to the expansion of the U.S. sales organization and higher general corporate costs. Together, these factors contributed to the operating income jump from **$9.3 million** in Q4 2023 to **$31.9 million** in Q4 2024.  **[INSP_3415207_4]** **[0001609550-25-000009_insp2024-q4pressreleaseex9.htm:0]** 

Why did Operating income surge in Q4 2024?

The net income turnaround in FY 2024 was driven primarily by **robust revenue growth**—an increase of **28.5%**—which significantly boosted top-line sales. This growth was complemented by an **improved operating income**, as the company experienced a turnaround from a loss to positive operating income by enhancing its gross profit and controlling operating expense growth. Additionally, a substantial **increase in adjusted EBITDA** underscored improved operational efficiency, while lower non-operating expenses and a relatively minor tax impact further solidified the company’s path to profitability.  **[0001609550-25-000009_insp2024-q4pressreleaseex9.htm:1]** **[0001609550-25-000011_insp-20241231.htm:116]** **[0001609550-25-000009_insp2024-q4pressreleaseex9.htm:6]** 

What drove the net income turnaround in FY 2024?

The revenue increase in Q4 2024 was driven by several factors. **Increased market penetration** played a key role, with the company adding **72 new U.S. centers**, bringing the total to **1,435 centers**, and expanding its footprint by creating **12 new U.S. sales territories**, increasing the total to **335 territories**.  **[0001609550-25-000003_insp2024-q4prereleaseex991.htm:0]** **[0001609550-25-000009_insp2024-q4pressreleaseex9.htm:0]** **[INSP_3415207_4]**  **International growth** was another factor, with revenue outside the U.S. rising by **163% year-over-year** to **$8,100 thousand**, aided by broader market penetration, the initiation of reimbursed procedures in France, and growth in the Asia-Pacific region.  **[0001609550-25-000009_insp2024-q4pressreleaseex9.htm:0]** **[INSP_3415207_4]**  Additionally, the **soft launch of the Inspire V neurostimulator**, which saw over **40 implants** in Singapore and the U.S., along with heightened physician and patient awareness, further supported the revenue growth.  **[0001609550-25-000003_insp2024-q4prereleaseex991.htm:0]** **[0001609550-25-000009_insp2024-q4pressreleaseex9.htm:0]** **[INSP_3415207_1]** **[0001609550-25-000011_insp-20241231.htm:116]** **[0001609550-24-000053_insp-20240930.htm:33]** 

What factors contributed to the revenue increase in Q4 2024?

Operating income turned positive in Q2 2024 primarily due to **robust revenue growth** combined with **improved gross margins** and **controlled operating expense increases**. Revenue increased by **30%**, rising from **$151.1 million in Q2 2023** to **$195.9 million in Q2 2024**, which was partly driven by expansion into **81 new U.S. centers** and **12 new U.S. sales territories** as well as growth in key international markets.  **[0001609550-24-000042_insp2024-q2pressreleaseex9.htm:1]** **[INSP_3396803_1]** **[0001609550-24-000044_insp-20240630.htm:31]**  At the same time, gross margins improved from **83.9%** to **84.8%**, and the operating expenses grew at a much slower pace (12% increase compared to the revenue growth), thereby enhancing operating leverage and turning a **$16.6 million loss** into a **$5.1 million profit**.  **[0001609550-24-000042_insp2024-q2pressreleaseex9.htm:1]** **[INSP_3396803_4]** **[0001609550-24-000044_insp-20240630.htm:31]** 

How did Operating income turn positive in Q2 2024?

7a29036021e24115aa2ac662ea749bd1bcca1602f024cbd73e3fa5a30081f06a

Long-term investments spiked in Q3 2024 because **Inspire Medical Systems reallocated its investment portfolio**, significantly increasing its holdings in both **U.S. treasury debt securities** and **corporate debt securities** classified as long-term investments. This strategic move caused the long-term investments to jump from **$9,143 thousand** at the end of 2023 to **$113,425 thousand** as of September 30, 2024, with U.S. treasury debt securities growing from **$4,850 thousand** to **$80,805 thousand** and corporate debt securities rising from **$3,122 thousand** to **$32,197 thousand**.  **[0001609550-24-000053_insp-20240930.htm:9]** **[0001609550-24-000053_insp-20240930.htm:37]** 

Why did long-term investments spike in Q3 2024?

The pronounced drop in cash during Q3 2024 was primarily due to a **$38.0 million decrease** resulting from significant cash outflows. This decline was largely driven by the **purchase of long-term available-for-sale investments** and an **inventory buildup** to support higher sales, which were partially offset by strong operating cash inflows and financing activities.  **[0001609550-24-000053_insp-20240930.htm:36]** **[0001609550-24-000053_insp-20240930.htm:39]** 

What caused the pronounced drop in cash in Q3 2024?

In Q4 2024, **total liabilities surged by $14,391 thousand** primarily due to a significant increase in **operating lease liabilities (non-current portion)** and **accrued expenses**. Specifically, operating lease liabilities grew by **$5,193 thousand** (from **$24,846 thousand** to **$30,039 thousand**), and accrued expenses rose by **$10,548 thousand** (from **$39,266 thousand** to **$49,814 thousand**), with a partial offset from a decline in other non-current liabilities. This reflects the company's increased lease commitments and higher operating costs associated with expanding its sales infrastructure.  **[0001609550-25-000011_insp-20241231.htm:128]** **[0001609550-25-000011_insp-20241231.htm:116]** 

Why did total liabilities surge in Q4 2024?

d108b1dda2436bddb5598b2b50b2ccfaf2deb71e3847dce91c949526b8eed1f8

The documents indicate that **Q2 2024’s operating cash flow was negative (–78.00  **[0001609550-24-000044_insp-20240630.htm:6]** )**, but they do not explicitly break down the causes for the negative result in that specific quarter. One document discusses several factors affecting operating cash flow over the six‐month period ended June 30, 2024, highlighting the impact of changes in working capital—including **increases in inventories and prepaid expenses** and **decreases in accounts payable and accrued expenses**—as well as improvements in the net loss and rises in non-cash charges.  **[0001609550-24-000044_insp-20240630.htm:39]**  While these factors likely influenced Q2’s decline, a definitive, quarter-specific explanation is not provided in the available documents.  **[0001609550-24-000044_insp-20240630.htm:6]** **[0001609550-24-000044_insp-20240630.htm:39]** 

What caused operating cash flow to turn negative in Q2 2024?

The surge in operating cash flow in Q3 2024 was driven by several factors. First, the company shifted from a net loss to a net income, realizing **$18.3 million** in net income compared to a **$35.9 million** loss previously. Second, there was an increase in non-cash charges, notably in stock-based compensation, which rose to **$83.6 million** from **$64.2 million** in Q3 2023. Finally, favorable changes in operating assets and liabilities, highlighted by an increase in net operating assets by **$40.8 million** (as opposed to a decrease of **$20.9 million** in the previous period), further contributed to the significant improvement in cash flow.  **[0001609550-24-000053_insp-20240930.htm:39]** 

What factors drove the surge in operating cash flow in Q3 2024?

Operating cash flow spiked in Q4 2024 primarily because of **enhanced operational performance**. The company experienced **significant net income growth**, with Q4 2024 net income reaching **$35.2 million** compared to **$14.8 million** in Q4 2023, which directly boosted cash generation.  **[0001609550-25-000009_insp2024-q4pressreleaseex9.htm:0]** **[INSP_3415207_4]**  Additionally, robust **revenue growth**—a **25% increase** to **$239.7 million**—and a **strong gross margin of 85%** further supported higher cash yields.  **[0001609550-25-000009_insp2024-q4pressreleaseex9.htm:0]** **[INSP_3415207_4]**  Furthermore, favorable shifts in operating assets and liabilities, such as improved collections on accounts receivable, higher inventory levels to support increased sales, and elevated accrued expenses related to personnel costs, also contributed to this substantial rise in operating cash flow.  **[0001609550-25-000011_insp-20241231.htm:122]** **[0001609550-24-000053_insp-20240930.htm:39]** 

Why did operating cash flow spike in Q4 2024?

The dramatic increase in **operating cash flow** in FY 2024 was primarily driven by a **shift in net income**—from a **net loss of $21,153 thousand** in FY 2023 to a **net income of $53,509 thousand** in FY 2024—which significantly boosted cash flow. In addition, **non-cash charges** increased notably, with expenses such as **stock-based compensation** rising from **$82,470 thousand** to **$116,007 thousand**, contributing to higher overall non-cash adjustments (increasing from **$86,600 thousand** to **$114,400 thousand**). Finally, the company benefited from **changes in operating assets and liabilities**, including a favorable net decrease in operating assets, which further enhanced the cash flow performance in FY 2024.  **[0001609550-25-000011_insp-20241231.htm:130]** **[0001609550-25-000011_insp-20241231.htm:122]** 

What contributed to the dramatic year-over-year increase in operating cash flow in FY 2024?

What drove the substantial jump in free cash flow in FY 2024?

94b6581479e81cc278b5bf9e333e3660574ee16cde004f5afa6da3643cfb9c63

Inspire Medical Systems Inc (INSP)

Financials