Inspire Medical Systems, Inc.

Good afternoon. My name is Dilem, and I'll be your conference operator today. At this time, I'd like to welcome everyone to the Inspire Medical Systems first quarter 2026 conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there'll be a question and answer session. I'll now hand the conference over to your first speaker, Eski Yaja, the Vice President of Investor Relations at Inspire. You may begin the conference.

Thank you, Dilem, and thank you all for participating in today's call. Joining me are Tim Herbert, Chairman and Chief Executive Officer, and Matt Osberg, Chief Financial Officer. Earlier today, we released financial results for the three months ended March 31, 2026. A copy of the press release is available on our website. On this call, management will make forward-looking statements within the meaning of the federal securities laws. All forward-looking statements, including without limitation those relating to our operations, financial results and financial condition, investments in our business, full year 2026 financial and operational outlook, and changes in market access and different aspects of coding or reimbursement are based upon our current estimates and various assumptions. Forward-looking statements involve material risks and uncertainties that could cause actual results or events to materially differ. Accordingly, you should not place undue reliance on these statements. For a discussion of these risks and uncertainties, please see our filings with the Securities and Exchange Commission, including our periodic reports on Form 10-K and 10-Q, as well as the Form 10-Q, which we filed this afternoon with the SEC for the quarter ended March 31st, 2026. INSPIRE disclaims any intention or obligation except as required by law to update or revise any financial projections or forward-looking statements, whether because of new information, future events, or otherwise. This conference call contains time-sensitive information and speaks only as of the live broadcast today, May 4th, 2026. With that, it is my pleasure to turn the call over to Tim Herbert.

Tim? Thank you, Angie, and thanks, everyone, for joining us today. On the call today, I will start by providing some key takeaways of our first quarter results, including an update on coding and reimbursement. I will also provide some insight into our revised outlook for the year and will then turn it over to Matt, who will provide additional insights on our first quarter and full year financials. We will then open up the call for questions. First, I want to highlight how pleased we are with the team's execution in the first quarter. Despite challenges related to coding and reimbursement uncertainty, as well as the WISER program, the organization delivered revenue growth and improved adjusted operating income and operating cash flow compared to the prior year period. In this environment, it is critical that we focus on the factors within our control. Our first quarter results demonstrate this as well as our focus on prioritizing revenue-generating activities and maintaining disciplined cost management while continuing to make targeted investments to support long-term growth. We believe these actions position the company well, both in the near and long term. As we progressed through the first quarter, we saw many developments with respect to coding and reimbursement and we are diligently working to establish a consistent methodology to coding of the Inspire 5 procedure in the short term. The long-term solution is to establish a new CPT code for a single lead Inspire system. This is a long process, and if approved, we expect this new CPT code to become effective on January 1, 2028. Therefore, we are establishing short-term remedies for the various payers to bridge until the new CPT code is in place. For centers concerned with the Inspire 5 reimbursement, we have inventory of Inspire 4, which has proven itself to be an extremely effective therapy with clear coding and reimbursement. As for coding for Inspire 5 systems, we are working with physicians, centers, and payers to establish clear and consistent coding and reimbursement guidelines, and there was progress in the first quarter. For Medicare patients, the Centers for Medicare and Medicaid Services, or CMS, announced the creation of a C code to be used with Inspire 5 procedures. and the Medicare Administrative Contractors, or MACs, are beginning to incorporate the C code into their local policies. This provides a reliable solution for hospitals and ambulatory surgical centers, and importantly, the facility payment is equal to the Inspire 4 CPT code 64582. Same with Medicare. For physicians, Currently, the MAC lists the Inspire 4 CPT code 64582 without the use of a modifier. As such, the majority of Medicare cases this year have been billed without the use of a modifier, and we will continue to monitor this throughout the year. At this point, the commercial payers continue to list CPT code 64568 for Inspire 5 procedures. There is guidance provided by societies, including a non-binding newsletter from the American Hospital Association recommending the use of an unlisted CPT code, specifically 64999. However, the use of an unlisted code requires manual reviews and additional support from centers. Because of this, many centers and payers may be reluctant to adopt the use of this unlisted code. The good news for commercial payers is each case is prior authorized, meaning the billing code is approved in the prior authorization before the procedure, significantly reducing payment uncertainty for the center. Medicare Advantage is managed by commercial payers, and we recommend consistent coding practices as defined by the payer, and Medicare Advantage patients are also prior authorized. Although challenging, there has been progress in coding and reimbursement, and we've seen initial billing practices being established by physicians and centers in response to the changes in coding. However, we recognize that significant uncertainty remains, and we will continue to support our customers as they navigate the path forward. This coding uncertainty has adversely impacted the number of patients in the pipeline, including the number of prior authorizations submitted to commercial payers as we moved through the first quarter. We expect this trend to reverse and improve in the remainder of the year as we continue to support prior authorizations and build confidence in the coding processes and guidelines. To further support patient access to therapy, we are increasing our assistance to customers by providing additional proactive education relating to prioritization and billing processes, and we are adding to our field reimbursement team. Our goal is to provide as much clarity to our customers as possible to mitigate disruptions to patient access to care. Switching to the WISER program. WISER is a government initiative requiring AI-reviewed prioritization for Medicare cases in six pilot states. And the program kicked off in mid-January of 2026. During the first quarter, the WISER program created prior authorization delays for traditional Medicare procedures in the six WISER states, resulting in a headwind to our first quarter revenue. As we continue to gain experience working with the new systems in these states, we anticipate the headwinds to abate in the remainder of the year. With the ongoing coding and reimbursement challenges and the WISER program impact, we are revising our full-year revenue outlook. In light of our lower revenue outlook, and as we demonstrated in the first quarter, we will continue to be disciplined with our spending and focus on prioritizing revenue-generating activities while still making progress long-term growth investments. In addition to enhancing our support to customers for proactive education and assistance with prioritization and billing processes, we are also prioritizing projects to drive an improved patient care pathway, enhanced marketing effectiveness, improved digital product experience, continued R&D for new product development and operational efficiencies. We believe that these projects in these areas can begin to deliver returns in the second half of 2026 and accelerate in 2027. We continue to remain focused on our commitment to put the patient first and deliver strong patient outcomes. We continue to believe that there is a large untreated population of people struggling with sleep apnea that can benefit from Inspire Therapy, and we continue to be encouraged by the strong adoption of Inspire 5 and the positive data we continue to collect. At the upcoming sleep conference in Baltimore in June, we will be presenting the full results from the Inspire 5 trial conducted in Singapore. While we have previewed some of the early data points, including inspiratory overlap, this is the first time we will be showing the full trial results, including the ability of the new accelerometer-based sensing technology and the safety and efficacy of the Inspire 5 implant. Additionally, the Inspire Adhere trial is now complete. The data from the 5,000-patient cohort will be presented at the sleep conference. This is a real-world cohort demonstrating the effectiveness of INSPIRE as it is delivered today and builds upon our previous safety and efficacy trials. We will further highlight the effects of INSPIRE therapy on cardiovascular outcomes, utilizing a large claims database to retrospectively examine incident cases of cardiovascular disease after INSPIRE implantation as compared to a matched group of patients receiving CPAP therapy and those not receiving treatment. At the CEAP conference, we will present this study on the cardiovascular outcomes along with two other independent studies using two different claims databases to compare the use of various claims databases in the demonstration of improved cardiovascular and respiratory outcomes associated with with Inspire Therapy. In addition, a third independent study from Virginia Commonwealth University was just published in the peer-reviewed journal. The data demonstrated that the Inspire patient cohort had significantly lower odds of stroke, myocardial infarction, atrial fibrillation, acute heart failure, acute respiratory failure, and hospitalization to name a few, within these two years follow-up. These strong results suggest INSPIRE provides systemic cardiovascular and respiratory health benefits and reduces healthcare burden compared to CPAP. We expect further studies to support these findings. We are happy to report that the predictor manuscript has been accepted by a major medical journal and we look forward to the publication in the coming weeks. As you are aware, Predictor is the 600-patient study we conducted to demonstrate alternative screening options to replace the drug-induced sleep endoscopy or DICE procedure for a large subset of eligible patients, improving the patient experience and reducing the timeline to implant. Last but not least, Last month, we published our 2025 patient experience report. Highlighted in the report is the continued improvement in our revision and expant rates, which were 1.7% and less than 1%, respectively, for full year 2024. In summary, we remain focused on providing the best therapy solution for patients and helping our customers navigate what we believe will be a temporary market disruption related to coding and reimbursement and the WISER program. We are actively addressing the challenges posed by this disruption and we remain excited about our product and the market opportunity to improve the lives of our patients as we've already done for over 135,000 patients since our inception. We will continue to take action to position the company for long-term profitable growth, and we believe that we have the right strategies in place to drive long-term stakeholder value. I'll now turn the call over to Matt for his review of our financial performance.