Company: INSP
Filing Date: 2025-08-04
Form Type: 10-Q
Source: 0001609550-25-000032
Chunk: 28

Company: Inspire Medical Systems, Inc.
Filing Date: 2025-08-04
Form: 10-Q
Item: Part I, Item 1
Chunk 28
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 Medical Systems, Inc. Notes to Consolidated Financial Statements (unaudited) (Table amounts in thousands, except share and per share amounts)

June 30, 2025December 31, 2024Payroll related$27,991 $40,162 Income tax payable1,098 1,612 Product warranty liability550 933 Operating lease liabilities, current portion2,150 1,754 Other accrued expenses8,408 5,353 Total accrued expenses$40,197 $49,814 The following table shows the changes in our estimated product warranty liability accrual, included in accrued liabilities:Three Months Ended June 30,Six Months Ended June 30,2025202420252024Balance at beginning of period$649 $1,388 $933 $1,100 Provisions for warranty6 263 (189)798 Settlements of warranty claims(105)(220)(194)(467)Balance at the end of the period$550 $1,431 $550 $1,431 Revenue Recognition We derive our revenue from sales of our products in the U.S. and internationally. Customers are primarily comprised of hospitals and ambulatory surgery centers, with distributors being used in certain international locations where we do not have a direct commercial presence.Revenues from product sales are recognized when the customer obtains control of the product, which occurs at a point in time, either upon shipment of the product or receipt of the product, depending on shipment terms. Our standard shipping terms are free on board shipping point, unless the customer requests that control and title to the inventory transfer upon delivery. In those cases where shipping and handling costs are billed to customers, we classify the amounts billed as a component of cost of goods sold.Revenue is measured as the amount of consideration we expect to receive, adjusted for any applicable estimates of variable consideration and other factors affecting the transaction price, which is based on the invoiced price, in exchange for transferring products. All revenue is recognized when we satisfy our performance obligations under the contract. The majority of our contracts have a single performance obligation and are short term in nature.Sales taxes and value added taxes in foreign jurisdictions that are collected from customers and remitted to governmental authorities are accounted for on a net basis and therefore are excluded from net sales. Shipping and handling costs associated with outbound freight after control over a product has transferred to a customer are accounted for as a fulfillment cost and are included in cost of goods sold.Variable consideration