Inspire Medical Systems, Inc. INSP delivered first-quarter 2026 adjusted earnings per share (EPS) of 10 cents, flat year over year. The figure beat the Zacks Consensus Estimate of a loss of 36 cents by 127.8%.
INSP’s Q1 Revenues in Detail
Inspire Medical registered revenues of $204.6 million in the first quarter, up 1.6% year over year. The figure beat the Zacks Consensus Estimate by 2.9%.
Per management, the revenue growth was primarily driven by increased market penetration, offset by the adverse effects of reimbursement disruption and the Wasteful and Inappropriate Service Reduction (WISeR) program.
As of March 31, 2026, INSP operated 284 U.S. sales territories and employed 288 field clinical representatives compared with 295 territories and 275 representatives at the end of 2025.
Inspire Medical Systems, Inc. Price, Consensus and EPS Surprise
Inspire Medical Systems, Inc. price-consensus-eps-surprise-chart | Inspire Medical Systems, Inc. Quote
INSP’s Margin Analysis
In the first quarter, Inspire Medical’s gross profit increased 3.7% year over year to $176.9 million. The gross margin expanded 180 basis points (bps) to 86.5%.
Selling, general and administrative expenses increased 5.5% year over year to $152.2 million. Research and development expenses decreased 7.1% year over year to $25.8 million. Operating expenses of $178 million increased 3.4% year over year.
Adjusted operating profit totaled $0.3 million, up from an adjusted operating loss of $1.5 million in the prior-year quarter.
Inspire Medical’s Financial Position
Inspire Medical exited first-quarter 2026 with cash and cash equivalents and short-term investments of $399.7 million compared with $404.6 million at 2025-end.
Cumulative net cash provided by operating activities at the end of first-quarter 2026 was $12.8 million, against net cash used in operating activities of $6.7 million a year ago.
INSP Lowers 2026 Outlook
Inspire Medical has updated its revenue and EPS outlook for 2026.
The company has lowered its revenue guidance to $825 million-$875 million (representing a decline of 4-10% from 2025 levels) from the previously projected $950 million-$1 billion. The Zacks Consensus Estimate is pegged at $960.9 million.
INSP expects its adjusted EPS for 2026 to be in the band of $0.75-$1.25, down from prior guidance of $1.85-$2.35. The Zacks Consensus Estimate is pegged at $1.82.
Our Take on Inspire Medical’s Q1 Results
Inspire Medical exited the first quarter of 2026 with better-than-expected results. The company delivered modest top-line growth, margin expansion and improved operating cash flow, highlighting disciplined cost management and a favorable product mix shift toward Inspire V. Meanwhile, continued pressure from reimbursement-related disruptions is weighing on near-term visibility.
Insipre Medical’s shares fell 16.4% during after-hours trading yesterday, likely due to a lowered sales outlook for 2026. The company’s shares have lost 40.5% in the year-to-date period compared with the industry’s 19.1% decline. However, the S&P 500 Index has gained 6.5% in the same period.
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The adoption of Inspire V remains strong despite ongoing coding and reimbursement uncertainty. Progress was made during the quarter, particularly on the Medicare side, where the introduction of a C-code has improved clarity for facilities. However, the broader reimbursement landscape remains fragmented, especially across commercial payers, creating friction in procedure volumes.
These challenges, along with the rollout of the WISeR program, weighed on performance. Management stated that coding uncertainty and WISeR reduced first-quarter revenues by approximately $20 million, primarily by slowing prior authorization submissions and delaying procedures. This dynamic is expected to intensify in the second quarter due to a lag effect before improving in the back half of the year as providers gain confidence in billing practices.
As a result, Inspire Medical lowered its full-year 2026 revenue guidance, reflecting headwinds from reimbursement-related factors. While GLP-1 therapies may be contributing modestly to near-term pressure, management emphasized that the primary driver of the guidance revision is reimbursement disruption.
Looking ahead, the company expects sequential improvement through 2026, with the fourth quarter projected to be the strongest. Inspire Medical remains focused on establishing a new CPT code by 2028 and continues to invest in product innovation and clinical evidence, positioning the business for a return to growth in 2027.
INSP’s Zacks Rank & Key Picks
Inspire Medical currently carries a Zacks Rank #4 (Sell).
Some better-ranked stocks in the broader medical space that have announced quarterly results are West Pharmaceutical Services, Inc. WST, Intuitive Surgical ISRG and Cardinal Health, Inc. CAH.
West Pharmaceutical reported first-quarter 2026 EPS of $2.13, which beat the Zacks Consensus Estimate by 26.8%. Revenues of $844.9 million surpassed the Zacks Consensus Estimate by 8.5%. It currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
West Pharmaceutical has a long-term estimated growth rate of 13.9%. WST’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 19.37%.
Intuitive Surgical reported first-quarter 2026 adjusted EPS of $2.50, beating the Zacks Consensus Estimate by 20.19%. Revenues of $2.77 billion surpassed the Zacks Consensus Estimate by 6.2%. It currently carries a Zacks Rank of 2 (Buy).
Intuitive Surgical has a long-term estimated growth rate of 14.9%. ISRG’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 16.82%.
Cardinal Health, carrying a Zacks Rank of 2 at present, reported third-quarter fiscal 2026 adjusted EPS of $3.17, which beat the Zacks Consensus Estimate by 13.2%. Revenues of $60.94 billion missed the Zacks Consensus Estimate by 2.3%.
Cardinal Health has a long-term estimated growth rate of 15.6%. CAH’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 10.27%.
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This article originally published on Zacks Investment Research (zacks.com).
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