Inspire Medical Systems (NYSE: INSP) reported Q3 EPS of ($0.39), $0.33 better than the analyst estimate of ($0.72). Revenue for the quarter came in at $35.8 million versus the consensus estimate of $22.75 million.

Recent Business Highlights

• Generated revenue of $35.8 million in the third quarter of 2020, a 72% increase over the same quarter last year
• Reported gross margin of 85.5% in the third quarter of 2020, an increase over the 83.4% reported in the same quarter last year
• Activated 42 new centers in the third quarter of 2020, bringing the total to 370 U.S. medical centers implanting Inspire therapy
• Created seven new sales territories in the third quarter of 2020, bringing the total to 98 U.S. sales territories
• New Category I CPT code specifically for hypoglossal nerve stimulation approved at the October American Medical Association (AMA) meeting

“We are extremely pleased with the strong performance demonstrated throughout our business in the third quarter,” said Tim Herbert, President and Chief Executive Officer of Inspire Medical Systems. “The 72% year-over-year revenue growth achieved in the third quarter reflects our strong restart once the shutdown from the COVID-19 pandemic lessened. While our growth includes patients who were delayed in receiving Inspire therapy due to the pandemic, we are especially excited about the increase in patient flow enabled by the significant increase in implant and diagnostic procedures, physician contacts, and prior authorization submissions. Therefore, based on our strong performance in the third quarter and the encouraging implant activity trends we are seeing, Inspire is increasing its full year 2020 revenue guidance to between $110 million and $112 million, an increase from our prior guidance of $88 million to $92 million.”

“The significant momentum in our business is being driven by multiple key factors, including the addition of a substantial number of new centers and territories, and broader commercial and Medicare insurance coverage,” continued Mr. Herbert. ”The 42 new U.S. implanting centers we added in the third quarter was well above our prior guidance of 20 to 24 new centers per quarter in 2020, and reflects a carry-over from centers unable to open in the second quarter due to COVID-19. Further, we created seven new sales territories in the third quarter in the U.S. We expect that these new centers and territories will have a beneficial impact on our long-term growth."

GUIDANCE:

Inspire Medical Systems sees FY2020 revenue of $110-112 million, versus the consensus of $90.19 million.

• Given the positive trends during the third quarter, Inspire is increasing its full year 2020 revenue guidance to between $110 million to $112 million, representing growth of approximately 34% to 37% over full year 2019 revenue of $82.1 million. Gross margin for full year 2020 is now anticipated to be in the range of 84% to 85%. This compares to the prior revenue guidance of $88 million to $92 million and gross margin guidance of 82% to 84%.
• In addition, Inspire is increasing its guidance around the opening of new U.S. medical centers to a range of 28 to 30 in the fourth quarter, as compared to the prior guidance of 20 to 24 centers per quarter in 2020. The Company is maintaining its full year 2020 guidance of adding six to seven new territories per quarter for the fourth quarter.

For earnings history and earnings-related data on Inspire Medical Systems (INSP) click here.