Company: INSP
Filing Date: 2025-02-10
Form Type: 10-K
Source: 0001609550-25-000011
Chunk: 75

Company: Inspire Medical Systems, Inc.
Filing Date: 2025-02-10
Form: 10-K
Item: Item 7
Chunk 75
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 during the fourth quarter of 2023, not having received EU MDR certification of our silicone-based stimulation lead and the resulting shortage of polyurethane-based stimulation leads had an estimated adverse impact on European revenue during that period of approximately $4.0 million. The revenue increase experienced during 2024 was partially due to the 

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recovery of most of the estimated $4.0 million of revenue opportunity from the fourth quarter of 2023. Other factors contributing to revenue growth were increased market penetration in existing centers, the expansion of our European sales representatives into new territories and centers, the start of reimbursed procedures in France, increased sales in the Asia Pacific region, and, we believe, increased physician and patient awareness of our Inspire system.

Cost of Goods Sold and Gross Margin

Cost of goods sold increased $26.4 million, or 27.3%, to $123.0 million for the year ended December 31, 2024 compared to $96.6 million for the year ended December 31, 2023. The increase was primarily due to product costs associated with the higher sales volume of our Inspire system experienced during 2024.

Gross margin was 84.7% for the year ended December 31, 2024 compared to 84.5% for the year ended December 31, 2023. This increase was primarily due to increased sales volume and manufacturing efficiencies.

Research and Development Expenses

Research and development expenses decreased $2.4 million, or 2.1%, to $114.1 million for the year ended December 31, 2024 compared to $116.5 million for the year ended December 31, 2023. This change was primarily due to a decrease of $23.6 million in ongoing research and development costs, primarily with respect to our next generation versions of the Inspire neurostimulator and our SleepSync™ platform, partially offset by an increase of $20.1 million in compensation and employee-related expenses, mainly as a result of increased headcount and stock-based compensation expense, and an increase of $1.1 million in regulatory and clinical studies expenses and quality compliance fees.

Selling, General and Administrative Expenses

SG&A expenses increased $77.6 million, or 17.2%, to $529.6 million for the year ended December 31, 2024 compared to $452.0 million for the year ended December 31, 2023. The primary driver of this change was an increase