Company: INSP
Filing Date: 2025-05-05
Form Type: 10-Q
Source: 0001609550-25-000020
Chunk: 52

Company: Inspire Medical Systems, Inc.
Filing Date: 2025-05-05
Form: 10-Q
Item: Part I, Item 1
Chunk 52
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 2024. 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 

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approximately $4.0 million. The higher revenue experienced during the first quarter of 2024 was partially due to the recovery of most of the estimated $4.0 million of revenue opportunity from the fourth quarter of 2023.

Cost of Goods Sold and Gross Margin

Cost of goods sold increased $6.0 million, or 24.0%, to $30.7 million for the three months ended March 31, 2025 compared to $24.8 million for the three months ended March 31, 2024. The increase was primarily due to product costs associated with the higher sales volume of our Inspire system experienced during the first quarter of 2025.

Gross margin was 84.7% for the three months ended March 31, 2025 compared to 84.9% for the three months ended March 31, 2024.

Research and Development Expenses

Research and development expenses decreased $1.0 million, or 3.6%, to $27.8 million for the three months ended March 31, 2025 compared to $28.9 million for the three months ended March 31, 2024. This change was primarily due to a decrease of $5.4 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 $3.9 million in compensation and employee-related expenses, mainly as a result of increased headcount and stock-based compensation expense, and an increase of $0.5 million in regulatory and clinical studies expenses and quality compliance fees.

Selling, General and Administrative Expenses

SG&A expenses increased $18.7 million, or 14.9%, to $144.3 million for the three months ended March 31, 2025 compared to $125.6 million for the three months ended March 31, 2024. The primary driver of this change was an increase of $17.4 million in compensation, including salaries, commissions, stock-based compensation, and other employee-related expenses, mainly as a result of increased headcount. In addition, general corporate costs increased $2.7 million primarily due to computer equipment and software expense,