Medical technology company Inspire Medical Systems (NYSE: INSP) reported Q3 2026 results exceeding the market’s revenue expectations, but revenue fell by 7.9% year on year to $206.7 million. The company expects the full year’s revenue to be around $855 million, close to analysts’ consensus estimates. Its non-GAAP profit of $0.14 per share was 54.1% above analysts’ consensus estimates.

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“We are pleased to have delivered sequential growth in the third quarter, with U.S. performance coming in ahead of our expectations. Results suggest that, despite some lingering headwinds, there is greater comfort among implanting physicians with the current coding dynamic. We will stay disciplined in our education initiatives and focused on executing our strategic priorities as we finish out 2026 and plan for a return to growth in 2027,” said Tim Herbert, Chairman and CEO of Inspire Medical Systems.

Revenue growth

A company’s long-term revenue performance can indicate its overall quality. Any business can have short-term success, but a top-tier one grows for years. Inspire Medical Systems’s 34.4% annualized revenue growth over the last five years was strong. Its growth beat the average healthcare company and shows its offerings resonate with customers.

Long-term growth is the most important, but within healthcare, a half-decade historical view may miss new innovations or demand cycles. Inspire Medical Systems’s annualized revenue growth of 8% over the last two years is below its five-year trend, but the results were still respectable.

This quarter, Inspire Medical Systems’s revenue fell by 7.9% year on year to $206.7 million but beat Wall Street’s consensus estimates by 1.1%.

Looking ahead, sell-side analysts expect revenue to remain flat over the next 12 months, according to S&P, a deceleration versus the last two years. This projection is underwhelming and indicates its products and services will see some demand headwinds.

Adjusted operating margin

Inspire Medical Systems was roughly breakeven when averaging the last five years of quarterly operating profits, a poor result for a healthcare business.

On the positive side, Inspire Medical Systems’s adjusted operating margin rose by 16.6 percentage points over the last five years, as its revenue growth provided operating leverage.

This quarter, Inspire Medical Systems generated a negative 13.9% adjusted operating margin.

Earnings per share

Revenue trends explain a company’s historical growth, but the long-term change in earnings per share, or EPS, points to the profitability of that growth. For example, a company could inflate its revenue through excessive spending on advertising and promotions.

Inspire Medical Systems’s full-year EPS flipped from negative to positive over the last five years. This is a positive sign and marks a critical point in the company’s development.

In Q3, Inspire Medical Systems reported adjusted EPS of $0.14, down from $0.38 in the same quarter last year. Despite falling year on year, the result comfortably exceeded analysts’ consensus estimates. Over the next 12 months, Wall Street expects Inspire Medical Systems’s full-year EPS to shrink by 23.9% from $2.03 to $1.55, according to S&P.

Key takeaways from Inspire Medical Systems’s Q3 results

An EPS beat and full-year EPS guidance above Wall Street’s consensus made this a decent quarter for Inspire Medical Systems, with key metrics ahead of expectations. The market appeared to be hoping for more, and shares edged lower 1.4% to $66.23 immediately after the results.

To assess whether Inspire Medical Systems is an attractive investment at the current price, consider its valuation, business quality and latest quarterly results. Read our full research report here (it’s free).