Inspire Medical Systems Inc at Truist Securities MedTech Conference Summary

The following is excerpted from the question-and-answer section of the transcript.

Question: Richard Newitter - Truist Securities, Inc, - Analyst : <_ALACRA_META_ABSTRACT>Would love to just hear and raise your guidance for the year as well, but. Would love to hear your characterization of how you thought the quarter was relative to your expectations heading in, and how you see the rest of the year playing out. Anything, the puts and the takes that you would call out with four months under the belt? Timothy Herbert - Inspire Medical Systems Inc - Chairman of the Board, President, Chief Executive Officer Absolutely. And thanks for having us here. And it's great to be in Boston with the Celtics winning and keeping you up all night because of the Harleys going down the street and the sirens. But still an exciting time to be here. Q1 showed a lot of positives for us. We're very happy about that. Number one, we always focus on patient outcomes, and that's the key thing we continue to measure. And that's the key thing that's going to keep the growth of Inspire going for years to come is the confidence people have when they receive Inspire therapy that they're going to have the best opportunity to have a positive response. Patient demand remains extremely strong for Inspire. And we do everything we can do, improve our technologies and improve the number of healthcare providers that patients can see to to be reviewed for receiving Inspire therapy. And so the demand just continues to make it remains so strong. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JUNE 18, 2024 / 2:40PM, INSP.N - Inspire Medical Systems Inc at Truist Securities MedTech Conference We know we had seasonality come out of the fourth quarter because we had just a really, really strong fourth quarter as far as implants go. And we knew that people were going to take a little bit of time in January to recover a little bit and then start ramping up as we get to the second -- two-third of the quarter. And that's exactly what we saw. So a little bit of the South start in January, but came back with momentum in February and March, which was tremendous to give us the strong growth that you identified there. But that also gives us the confidence going forward. And with that, we were able to increase our revenue guide for the rest of the year, showing confidence in the demand that we have, and our ability to have patients see healthcare providers and be able to get their surgeries scheduled and and have the benefits of Inspire therapy. So I think that's really important going forward. Further to that, we're able to reach a revenue point with the gross margin that we enjoy to announce that we're going to be profitable for the full year for the first time. And we think that's a tremendous opportunity. We did not want to change our business to become profitable. We wanted to make sure we had a revenue level with our gross margin to become profitable. We still have very high teens investment in our R&D because our pipeline is so strong. And we still have our investments in our DTC, direct to consumer, because that's a key element to building the awareness in both the brand and helping patients come into the process. And again, with the revenue guide, we see increase growth in our revenue going forward that gives us confidence to announce profitability for the year.

Question: Richard Newitter - Truist Securities, Inc, - Analyst : Okay. So little bit of growth.

Question: Richard Newitter - Truist Securities, Inc, - Analyst : All right. Flat, 1.7 per account or per month. And then I guess is there any reason why utilization for the rest of the year shouldn't import in 2Q first, but for the rest of the year as well, shouldn't increase sequentially and then year over year?

Question: Richard Newitter - Truist Securities, Inc, - Analyst : Okay. But just to be clear, there's no reason why that wouldn't grow on a year-over-year basis for the next several quarters.

Question: Richard Newitter - Truist Securities, Inc, - Analyst : Got it. And then you mentioned specifically on the high utilization centers. I'm asking this question to in parallel with the decision to take the utilization disclosure, right, or the way you had been reporting in US utilization off the table in 2025. What are the components of the utilization, whether it's the cohorts that are -- the different types of customers, same store sales and I'm sure there's different types of same-store sales and new accounts, help us think through where the utilization growth is truly coming from, where it's maybe slowing, where it's accelerating and then how that factors into why you're removing that utilization for 2025?

Question: Richard Newitter - Truist Securities, Inc, - Analyst : Are higher rate relative to the other buckets?

Question: Richard Newitter - Truist Securities, Inc, - Analyst : Okay. And what about relative to itself on a --?

Question: Richard Newitter - Truist Securities, Inc, - Analyst : So there's one way?

Question: Richard Newitter - Truist Securities, Inc, - Analyst : There's plenty of capacity there.

Question: Richard Newitter - Truist Securities, Inc, - Analyst : Can you give us even a teaser of what those potential metrics might be?

Question: Richard Newitter - Truist Securities, Inc, - Analyst : And just to be clear, right, because some investors have asked, but are they taking away the monthly utilization number, even if it's for high level positive reasons? Taking away because that number is going to or about to move into a decline. I guess --

Question: Richard Newitter - Truist Securities, Inc, - Analyst : But they're talking about a '25.

Question: Richard Newitter - Truist Securities, Inc, - Analyst : Okay. So it's not necessarily because --

Question: Richard Newitter - Truist Securities, Inc, - Analyst : You see something that is on the horizon that could lead to a decline. You're just -- you're maturing, your business is maturing and the types of accounts that are driving, the utilization, don't match up necessarily to this holistic utilization calculation. And that's not the metric that people should be looking at.

Question: Richard Newitter - Truist Securities, Inc, - Analyst : And then the next question I'm going to ask is just a little bit more, your philosophy and approach to guidance whether or not that's changed at all. And in the context of the level of visibility that you have and how much or what the time frame of visibility is, are you generally able to see backlog orders out six months, nine months, or the full year. So that gives you a level of confidence in whatever full year outlook you provide, can you give us a sense because you don't give quarterly guidance. So can you give us a sense of what kind of visibility you have, whether it's your prior authorization.

Question: Richard Newitter - Truist Securities, Inc, - Analyst : And what percent you go through?

Question: Richard Newitter - Truist Securities, Inc, - Analyst : Tim, some of the higher volume accounts that are continuing to ramp where capacity is not necessarily limitation, where are they right now in terms of number of procedures, whether it's per month or per year? What are some of the higher volume community-based private practices trending at right now?

Question: Richard Newitter - Truist Securities, Inc, - Analyst : So you've got I think four -- I think of it as four main buckets for driving capacity expansion or increased capacity utilization in your installed base or through your installed base. They have inspired five, which is probably going to come in late `24, 2025 that's going to be faster throughput, shorter procedure time that's like mechanical if you will. You've got the predictor study which will help over time, maybe eliminating the requirement of DISE in the percentage of your population. I think you've said two-third -- it could reduce two-third of DISE used in your volume mix. And then you have those other items that maybe are closer at hand that you were saying more doctors per account, you're getting changing practice management, working with division of labor with sleep physicians and the ENTs opening up their time to do stuff. So you have a lot of efforts there, but the timing of when they hit, it feels like those latter to you're working on now, but it seems like that's a swab, takes time for that to work. And then the things that we all can see, that like our immediate throughput increases, those feel a little bit further '25. '26. So is there enough that you can affect with that the more position more physicians per account, the things that you're doing right now? To drive enough capacity expansion to continue the growth. curve. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JUNE 18, 2024 / 2:40PM, INSP.N - Inspire Medical Systems Inc at Truist Securities MedTech Conference

Question: Richard Newitter - Truist Securities, Inc, - Analyst : But so what you soft launch win?

Question: Richard Newitter - Truist Securities, Inc, - Analyst : I want to touch on GLP-1. We have surmounted OSA's presentation at the upcoming ADA conference this Friday. We don't know exactly what level of detail we're going to get, but would love to just maybe hear, was your reaction to the headline data that we saw from that trial. And what are you expecting out of this weekend?

Question: Richard Newitter - Truist Securities, Inc, - Analyst : So is it fair to say you're focused on some threshold of a responder rate, which is the percentage of patients below in HI 15? Is that just not relevant based what you said?

Question: Richard Newitter - Truist Securities, Inc, - Analyst : But those aren't patients who would have been treating anyway.