Company: INSP
Filing Date: 2025-05-05
Form Type: 10-Q
Source: 0001609550-25-000020
Chunk: 54

Company: Inspire Medical Systems, Inc.
Filing Date: 2025-05-05
Form: 10-Q
Item: Part I, Item 1
Chunk 54
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 offset by proceeds from sales of the Inspire system, proceeds from the exercise of stock options, and interest and dividend income;

•a $1.9 million decrease in prepaid expense and other current assets; and

•a $0.4 million decrease in accounts receivable.

The decrease in working capital was partially offset by the following factors:

•a $19.9 million increase in short-term available-for-sale investments which increased as some long-term available for sale investment moved into the short-term category due to the passage of time;

•a $19.6 million increase in inventory balances, as we increased inventory levels to support higher sales and the anticipated 2025 launch of our next generation Inspire system;

•a $15.5 million decrease in accrued expenses which decreased primarily due to the payment of year-end bonuses and commissions; and

•a $9.6 million decrease in accounts payable due to the timing of vendor invoices.

The primary objective of our investment activities is to preserve our capital for the purpose of funding operations while at the same time maximizing the income we receive from our investments without significantly increasing risk or decreasing availability. To achieve these objectives, our investment policy allows us to maintain a portfolio of certain types of debt securities issued by the U.S. government and its agencies, corporations with investment-grade credit ratings, or commercial paper and money market funds issued by the highest quality financial and non-financial companies. At March 31, 2025, we had $268.0 million in U.S. government securities, $75.6 million in corporate debt securities, $29.8 million in money market funds, and $16.6 million in certificates of deposit, commercial paper, and asset-backed securities. See Note 2 to our unaudited consolidated financial statements in this Quarterly Report for additional information on our investments.

In the three months ended March 31, 2025, our SG&A expenditures increased significantly over the prior year levels, and we anticipate further increases during 2025. Our SG&A expenditures, primarily for increasing headcount and advertising, may exceed any associated increases in revenues, and therefore would reduce our cash flow from operations. We also anticipate R&D expenses will increase during the remainder of 2025, primarily related to the ongoing development of the SleepSync™ platform and next generation products.

We spent $8.4 million on purchases of property and equipment in the three months ended March 31, 2025, mainly on manufacturing equipment and tooling for our next generation Inspire system, development of