Q2 2024 Inspire Medical Systems Inc Earnings Call
Ezgi Yagci: 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, August 6, 2024. With that, it is my pleasure to turn the call over to Tim Herbert. Tim?
To 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 August six 2024.
With that it is my pleasure to turn the call over to Tim Herbert Tim.
Timothy Herbert: Thank you, Ezgi, and thank everyone for joining our business update call for the second quarter of 2024. We always start our earnings call by reiterating our commitment to delivering strong and consistent patient outcomes. Our mission is to put the patient first, and we now have over 75,000 patients treated with Inspire Therapy today. With that, let's review our results.
Tim Herbert: Thank you as Gabe and thanks, everyone for joining our business update call for the second quarter of 2024.
Tim Herbert: We always start our earnings call by reiterating our commitment to delivering strong and consistent patient outcomes. Our mission is to put the patient first and we now have over 75000 patients treated with inspire therapy to date.
With that let's review our results.
Timothy Herbert: In the second quarter, we generated revenue of $195.9 million, representing a 30% increase compared to the second quarter of 2023. Second quarter U.S. revenue totaled $187.8 million, a 30% increase over the same period last year. This revenue growth reflects greater therapy adoption as a result of increased market penetration in existing centers, as well as expansion into 81 new implanting centers in the United States and 12 new U.S. sales We now have 1,316 active U.S. centers and 310 sales territories.
In the second quarter, we generated revenue of $195 9 million, representing a 30% increase compared to the second quarter of 2023.
Second quarter U S revenue totaled $187 8, million% to 30% increase over the same period last year. This revenue growth reflects greater therapy adoption as a result of increased market penetration in existing centers as.
Tim Herbert: As well as expansion into 81, new implanting centers in the United States and.
Timothy Herbert: Outside of the U.S., revenue increased 27% to $8.1 million. We saw strength in Germany, Switzerland, the Netherlands, and Belgium as the derogation authorizations allowed us to continue to grow adoption of Inspire Therapy. With this strong start and confidence in our outlook for the remainder of the year, we are increasing our 2024 Revenue Guidance to $788 million, which represents 26 to 28% growth over 2023 revenue of $625 million. Net income for the second quarter was $9.8 million, compared to a net loss of $12 million in the prior year period, representing net income per share of 32 cents, compared to a net loss of $0.41 in the second quarter of 2023, given the strong performance we have seen year to date.
Timothy Herbert: We are raising our diluted net income guidance to $60 to $80 per share for the full year. First, we'd like to highlight some very important business updates.
Timothy Herbert: We are excited to announce EUMDR certification in Europe, which includes full-body MRI compatibility. This is a very significant milestone as approval requires a stringent review of operations quality and regulatory compliance, and we are very proud of our team for this achievement. As a reminder, we obtained derogations in several European countries to help ensure patient access to therapy and product continuity. With this EUMBR certification, we may now submit for approval the Bluetooth Patient Remote, the updated Physician Programmer, and the Inspire 5 Neurostimulation System. Second, we received countrywide reimbursement in France at levels consistent with other European countries. France is the second largest OSA market in Europe.
Timothy Herbert: Our local team is already in place. We are ready to start Rambir's Inspire Case and Jeff Fast Wheat. We received FDA approval for the Inspire5 Neural Stimulation System. This is a significant accomplishment, highlighting many years of development and evaluation. And we are incredibly proud of the hard work across the organization; we are focused on operational readiness and building sufficient inventory to support a soft launch in late 24 and a full launch in 2025. The Inspire 5 Neural Stimulation System incorporates respiratory sensing capabilities into the IP, eliminating the Need to implant the Pressure Sensor.
Timothy Herbert: This will provide benefits to the patient with one fewer component, to the physician with reduced surgical times, and to the company with reduced production costs and complexity. Turning now to market access, we continue to make good progress with the predictor study and analysis. As a reminder, the initial focus of the PREDICTOR study is for patients with a lower BMI who may not have significant lateral wall collapse and therefore may not require the drug-induced sleep endoscopy or DICE.
Speaker Change: The drug induced sleep endoscopy or days.
Timothy Herbert: We expect to continue the analysis and move toward submission of the manuscript to a peer-reviewed publication this fall. Meanwhile, we have already discussed the results with payers and have had several payers update their policies to remove the DICE requirement. We will continue our discussions with other payers to further improve a patient's experience obtaining Inspire Therapy. On the market access front, we are pleased with the proposed 2025 National Medicare Outpatient Payment Rates, which call for a 2% increase, bringing the hospital outpatient rate to $30,198, and a 3% increase, bringing the ASC rate to $25,620. Their proposed physician fee schedule for 2025 calls for a roughly 2% reduction in the Medicare physician fee of $837. However, we would expect the final rule to reflect a higher overall physician reimbursement rate.
Tim Herbert: We expect to continue the analysis and move towards submission of the manuscript to a peer reviewed publication this fall.
Speaker Change: We have already discussed the results with Payors and have had several payers update their policies to remove the data requirement.
Tim Herbert: We will continue our discussions with other payers to further improve a patient's experience in obtaining inspire therapy.
Speaker Change: Staying on the market access front, we are pleased with the proposed 2025 national Medicare outpatient payment rates, which called for a 2% increase bringing the hospital outpatient rate to $30198.
Speaker Change: A 3% increase bringing the ASC rate to 20 $25620.
Speaker Change: Their proposed physician fee schedule for 2025 calls for a roughly 2% reduction to the Medicare physician fee of $837. However, we would expect the final rule to reflect a higher overall physician reimbursement rate.
Timothy Herbert: With respect to our market development activities, we continue to advance our medical education programs, and year-to-date, we have hosted over 150 advanced practice providers and Inspire training programs. The primary focus of this initiative is to improve capacity in both sleep and ENT clinics to meet the strong patient demand we continue to see for Inspire Therapy. In addition, we continue to increase our presence at primary care and cardiology conferences to drive increased awareness of Inspire Therapy.
Speaker Change: With respect to our market development activities, we continued to advance our medical education programs and year to date, we have hosted over 150 advanced practice providers and inspire training programs.
Timothy Herbert: Our direct-to-consumer program remains strong and provides a pathway for patients to connect with the proper health care provider. In the second quarter, our direct-to-consumer spend declined modestly compared to the prior year's period, as we found ways to be more targeted and efficient in our digital advertising, which has contributed to a significant increase in Digital Patient Engagement at a Lower Cost. We continue to advance initiatives to improve the patient experience, and one example is that we now have over 200 centers using digital scheduling to book appointments.
Speaker Change: <unk> was $9 8 million compared to a net loss of $12 million in the prior year period, representing net income per share of 32 cents.
Speaker Change: Compared to a net loss of 41 cents.
Speaker Change: In the second quarter of 2023.
Speaker Change: The weighted average number of diluted shares outstanding in the second quarter was $30 4 million.
Speaker Change: Excluding the impact of any share repurchases that we may effect over the remainder of 2024, we now expect the full year diluted shares outstanding to be approximately $35 million to $36 million.
Speaker Change: Our total cash and investments were 466 million at June 30.
Speaker Change: This strong cash position allows us to remain focused on executing our growth strategies.
Speaker Change: We continue to expect to generate positive cash flow for the full year 2024.
Speaker Change: Moving on to 2024 guidance with the strong trends we are seeing in our business. We now expect full year revenue to be in the range of $788 million to $798 million.
Speaker Change: Representing an increase of 26% to 28% compared to full year 2023 revenue.
Speaker Change: We continue to expect full year gross margin to be in the range of 83% to 85%.
Speaker Change: Sure.
Speaker Change: We also continue to expect to activate 52 to 56, New U S centers and established 12 to 14, New U S sales territories during each remaining quarter in 2024.
Speaker Change: Given the strong momentum in our business and our improving operating leverage we expect the diluted net income for the full year 2024 will be between.
Speaker Change: 60% to 80 per share.
Speaker Change: Lastly, given our strong financial performance and outlook, we are excited to announce a $150 million share repurchase authorization.
Speaker Change: In conclusion, our strong performance and business momentum provide us with confidence in our outlook for the remainder of 2024.
Speaker Change: With that our prepared remarks are concluded dilemma you may now open the line for questions.
Speaker Change: Thank you Sir as a reminder to ask a question you will need to press star one on your telephone.
Speaker Change: To withdraw your question. Please press star one again.
Speaker Change: Please standby, while we compile the Q&A roster.
Speaker Change: Also as a reminder, we ask that you. Please refrain to one question and one follow up and if time permits we'll be more than happy to take more questions.
Speaker Change: Okay.
Speaker Change: And I show. Our first question comes from the line of Robbie Marcus from Jpmorgan. Please go ahead.
Robbie Marcus: Oh, great. Thanks for taking my questions and congrats on a fantastic quarter here.
Robbie Marcus: Ravi.
Robbie Marcus: Tim.
Robbie Marcus: Coming off a great quarter, so I wanted to try and ask this in a positive way here.
Speaker Change: There has been.
Speaker Change: One disappointing quarter, one good quarter, another disappointing quarter really good quarter here with second quarter.
Speaker Change: Help us understand if any of this was catch up of recouped procedures from first quarter and if not how.
Speaker Change: How do we think about the go forward on a fundamental basis is this the new normal do you think you fixed all of the compensation and sales force issues and now we're back to normal just give us a sense of sort of what you think the underlying in second quarter was in the go forward.
Speaker Change: Gotcha, well I want to back up a little bit and remember we have the challenges in the third quarter last year that did have reflect a really strong Q4, and we talked about the impact that had on the Q1, which is a little bit of a residual going all the way back to the third quarter. We believe we had a strong Q1.
Speaker Change: That had us in the right momentum going forward and then we demonstrated that into Q2 and we do have the momentum with the with the team going forward. We certainly have the patient demand, which has always been there and really important to us, but when you look back at the prior authorization challenges we have all of that resolved that we've had.
Robbie Marcus: Some real positives on that front.
Speaker Change: Yes, we have confidence moving forward and hence we have <unk>.
Speaker Change: <unk> increased our revenue guide and in both Q1 and Q2 to reflect the positivity, we have going into the rest of the year.
Speaker Change: Great.
Speaker Change: Down the P&L Rick.
Speaker Change: The profitability was impressive here and Youre raising the EPS guide for the year, you talked about better productivity on the digital advertising, but how do we think about where the rest of the savings coming are coming from you are clearly being more productive with the sales force and the expenses here.
Speaker Change: Off of the revenue.
Speaker Change: So just help us understand where it's coming from and again same thing how sustainable are they into 'twenty five and beyond thanks.
Speaker Change: Yes. Thanks, Ravi, Yes, we're really focused on continuing to drive the topline growth and growing therapy adoption.
Speaker Change: And we continue to make investments in what I would say is we continue to invest in our top line growth, but we are getting leverage operating leverage from our business model.
Speaker Change: If you look at a couple of larger items.
Speaker Change: DTC.
Speaker Change: A year ago in the second quarter was 17% of our revenue in the second quarter was 12% of our revenue, but we're taking a more targeted approach and we're seeing savings.
Speaker Change: And so we expect to continue to drive leverage off of DTC.
Speaker Change: As well as R&D.
Speaker Change: Was down from a year ago.
Speaker Change: And as a reminder, in the second quarter of 2023, we had an expense of about $3 million for prelaunch inventory with inspire five in R&D.
Speaker Change: We did not have that in the second quarter of this year. So we also did focus inspire five shifting from from development efforts to operational readiness.
Speaker Change: So between the combination of top line and some of those items in the Opex.
Speaker Change: Drove.
Speaker Change: $5 million of operating income, which were very proud of and very proud of the overall team's effort in the second quarter.
Speaker Change: I appreciate it thank you very much.
Speaker Change: Thank you one moment for our next question.
Speaker Change: And I show. Our next question comes from the line of Richard <unk> from <unk> Securities. Please go ahead.
Richard <unk>: Alright, thanks for taking the questions and congrats on the quarter.
Speaker Change: Maybe just thinking about the back half year end and with the updated guide.
Richard: Should we be thinking about U S utilization because.
Richard <unk>: I think theres some seasonality in the third quarter and any help you can give us on the cadence, particularly around the U S and I'm. Just wondering if you can give us any signal as to whether or not you know utilization should be increasing sequentially every quarter.
Speaker Change: By my calculation, you should be increasing on a year over year basis in the back half by mid single digit utilization growth.
Speaker Change: But I'd also presupposes that you've come in line with your <unk>.
Speaker Change: Do you.
Speaker Change: New account adds and that exceeded handily in the second quarter. So maybe just.
Speaker Change: Kind of walk us through the puts and the takes and bring it back utilization cadence and growth sequentially and year over year. Thanks.
Speaker Change: Sure going back to.
Speaker Change: Consensus is kind of what you are indicating there to rich's.
Speaker Change: Year to date, we have exceeded consensus by $12 million and we've raised our first half of the year guidance by $13 million.
Speaker Change: And we put forth guidance that we have a high degree of confidence in.
Speaker Change: As you know historically, we do have seasonality in the first quarter and the composition of our full year revenue generally builds throughout the year.
Speaker Change: And so with that said, our aspiration is to increase utilization sequentially and year over year.
Speaker Change: Going forward.
Speaker Change: Okay.
Speaker Change: That's pretty clear and helpful. Thank you.
Speaker Change: And then I guess, just you exceeded the.
Speaker Change: The number of new account openings or et cetera.
Speaker Change: This substantially in Q2 I guess.
Speaker Change: Is 52 to 56, the right core.
Speaker Change: Italy number and and.
Speaker Change: How should we think about that I know in the past you've talked about you know your you have a lot more new accounts that are in debates theyre all coming up the curve.
Speaker Change: It is this the right number.
Speaker Change: For the quarterly.
Speaker Change: New account.
Speaker Change: Assumption I just help me understand that you've been beating that handle it for the last few quarters. Thanks.
Rich: Rich and we've been very consistent we haven't changed that guide for quite some time and that does vary quarter to quarter, because we do not open centers until they are ready to open and have <unk>.
Speaker Change: <unk> is in the pipeline ready to go.
Speaker Change: So that's why this quarter, we're in a good position with our.
Speaker Change: Centers, there is always the high patient demand and there is a significant number of centers that wed like to open up with inspire therapy and when they get through other trading programs get through the contractual phase and they are ready to open and they have the patients ready to go we do open them up so that's why there's always been a little bit of fluctuation.
Speaker Change: <unk>.
Speaker Change: In that number, but we're going to hold guide where it is.
Speaker Change: But we're going to continue to.
Speaker Change: The avenues to further.
Speaker Change: Increased patients' ability to find a proper health care provider.
Speaker Change: Thank you.
Speaker Change: Thank you.
Speaker Change: Thank you.
Speaker Change: And I show our next question.
Adam <unk>: Our next question comes from the line of Adam <unk> from Piper Sandler. Please go ahead.
Rick Esky: Hi, Tim Rick Esky, Thank you for taking the questions and congrats on the progress.
Speaker Change: I wanted to start by asking about inspire five and the rollout there and really just hoping to get some more granularity on the U S commercial launch.
Speaker Change: So the first question is when do you expect to start offering that product to customers. It seems like based on your prepared remarks, Thats, a Q4 event, but wanted to confirm how many accounts were you target. Initially just maybe level set us on capacity and inventory levels as you get ready to launch and then finally, just any color around.
Speaker Change: Round pricing and margin with Gen. Five and then had a follow up.
Speaker Change: Gotcha.
Speaker Change: Adam I think the key is.
Speaker Change: It's nice to have the first milestone with the FDA approval that came last week in the air.
Speaker Change: FDA was.
Speaker Change: Worked with us interactively to answer a lot of questions and very proud of the team for years in the development of the inspire five products, but now we need to be ready to launch our.
Speaker Change: The inspire five and into the U S market and the key is making sure that we have sufficient inventories of once we do full launch.
Speaker Change: That.
Speaker Change: We're able to can have continuous supply of products. So we're going to really focus on that in the second half of the year. The purpose of the sulfides is really just in a handful of centers to introduce.
Speaker Change: And to make sure with the with all the operating norms with the physician programmer they would vote.
Speaker Change: With sleep sync in our digital tools and so it will just be a handful of centers that we will use to help with that evaluation and then look to have a full launch in the end of 2025, but very excited about having the approval with the FDA that really allows us to lean in hard on the operational readiness.
Speaker Change: To be able to launch and full launch in 2025, let me hand off to Rick on pricing question.
Rick: Thanks for the question, Adam we're working through our pricing strategy prior to launch as part of our operational readiness.
Speaker Change: But.
Rick: With that said, even with flat pricing inspire five is gross margin accretive.
Adam: Got it thanks for the color guys for the follow up I wanted to.
Adam <unk>: Circle back to the guidance.
Speaker Change: Just kind of unpack that a little bit more so on the top line to 788 to 798.
Speaker Change: I guess could you just comment around the cadence for Q3 versus Q4 I have Q3 consensus.
Speaker Change: On the top line at a 197 million any reaction to that figure and then would also just.
Speaker Change: I'd like to better understand how youre thinking about specifically the U S business versus the O U S business as it relates to the guy thanks for taking the questions.
Speaker Change: Sure I'll take that.
Speaker Change: Given our updated guidance.
Speaker Change: Consensus revenue estimates.
Speaker Change: Are reasonable for the rest of the year.
Speaker Change: As they stand.
Speaker Change: And regarding the split between U S and O U S.
Speaker Change: Oh U S for the full year will still represent between 3% to 4% of our worldwide revenue.
Rick Esky: Thanks, Rick.
Speaker Change: Thank you.
Speaker Change: And our next question comes from the line of Anthony Petrone from Mizuho Group. Please go ahead.
Anthony Petrone: Thanks, and congrats on a strong quarter here, maybe a couple on inspire five and I'll have a quick follow up on <unk>.
Anthony Petrone: On inspire five maybe a little bit on on the funnel you have said in the past Tim that the funnel is still around six months inspire five is going to have a procedure time benefit I think bringing the total procedure time down to a half hour from 60 minutes or so today.
Speaker Change: So where do you think the funnel could go once inspire five is launched and I'll have a quick follow up.
Unnamed Speaker: I think that you bring up a key point, and that's one of our opportunities to improve efficiencies with the ENT and to build capacity. We also mentioned advanced practice.
Speaker Change: I think that you bring up a key point and that's one of our opportunities to improve efficiencies with the MTN to build capacity.
Speaker Change: We also mentioned.
Vance Pratt: Vance Pratt.
Speaker Change: Practice.
Speaker Change: Providers that can help outflow at some of the E&P office base opportunities, but we also have initiatives to help the TNT in the operating room one of them was.
Speaker Change: For patients that are lumpy in mind, not necessarily meaning they need to have a sleep endoscopy procedure, but secondly, with inspire five and reducing the or time that as you as you hint that it allows the E&P to do more procedures in a given day, thereby increasing capacity having over.
Speaker Change: We're all effect of reducing the time.
Speaker Change: A patient has to wait from contacting a physician from two receiving therapy. So absolutely. It will have a positive effect on that overall timing.
Speaker Change: And then a follow up just on <unk>. So the debate is out there I know you mentioned prepared comments that upper BMI.
Speaker Change: Category can come into the sweet spot for hypoglossal nerve.
Speaker Change: Are you seeing any evidence of that sort of out of the gate here.
Speaker Change: There are folks out there obviously on GOP ones.
Speaker Change: For obesity, specifically, there's already obviously, a large co morbid.
Speaker Change: Population out there.
Speaker Change: Are you seeing actual quantitative evidence of this yet and if not.
Speaker Change: How much of a factor do you think it could be.
Speaker Change: In 2025.
Speaker Change: It's going to be significant for patients as we go forward.
Speaker Change: As we're working through the GOP, one investigation and trying to understand that we knew that we had subjective feedback from our physicians that they are seeing patients on a GOP ones. So we went and contracted with a.
Speaker Change: Third party to do an independent review of claims data and we actually have provided several of the slides in our updated deck that you can find.
Speaker Change: On our website and I think that really kind of highlights the number of patients that have dual claims.
Speaker Change: Meaning when they receive inspire therapy, they're also actively on a GOP one therapy and the number over the last two years with significant up over 1500.
Speaker Change: Patients. So we're already seeing evidence of that right now and we're going to make sure that we continue to communicate with our physicians to take advantage.
Speaker Change: These therapies because again, we believe these GOP ones are complementary to.
Speaker Change: To inspire and will help patients qualify for.
Speaker Change: <unk> for inspire therapy.
Speaker Change: No Anthony that data is not all encompassing at the claims data from from one provider. So 500 is a huge number but that may not be capturing all of the patients.
Speaker Change: On G. L. P. Once receiving inspire therapy today, but we thought it was helpful.
Speaker Change: Helpful data.
Speaker Change: The lease to share with you guys and it's in our updated deck.
Speaker Change: Thank you.
Speaker Change: Thank you.
Speaker Change: Thank you.
Danielle <unk>: And I show. Our next question comes from the line of Danielle <unk> from UBS. Please go ahead.
Danielle: Hey, good afternoon, guys. Thanks, so much for taking the question congrats on a really good quarter here.
Danielle: A question for you on surgeon capacity and it came up a little bit with inspired by it but I think there's more to it right and I guess maybe.
Speaker Change: Give us some color here on where do you guys think you are in this process of freeing up capacity at the E&P level and really just getting more mind share of getting them to commit more of their time.
Greg: Inspire therapy I'm guessing inspire five alone it's helpful. But it's not the only thing maybe talk a little bit more about some of the other initiatives there and how you guys are progressing against those and I'll just leave it at that one question. Thanks, So much Greg.
Greg: Daniel It's a great question I think it's twofold.
Speaker Change: Taking care of them building efficiencies from their office setting and seeing patients initially, but also improving their capacity in the operating room and what we find is that there are advanced practice providers.
Danielle: That can do a lot of the early work, helping patients understand what inspires about what to expect in the education part of it and on the opposite end after surgery, helping them with the early titration and.
Danielle: And the programming of the device. So we can free up the E&P to really focus their time on being in the operating room, which is the probably the number one priority.
Danielle: Number two in the operating room, it's about gaming experience getting comfortable with the procedure and having.
Danielle: Confidence so they know they can reduce their own operating room time.
Danielle: I can confidently speak to patients.
Danielle: And then we help them out a little bit predictor.
Danielle: <unk> predictor and eliminating dyes for low BMI patients is one initiative, we can really help them out to not require them to be in an operating room to do sleep endoscopy.
Danielle: And then of course as you mentioned inspire five it's going to reduce.
Danielle: The overall or time.
Danielle: This also culminated with proper reimbursement as well so when the doctors get comfortable that the reimbursement level for the amount of time they spend in the operating room.
Speaker Change: Is sufficient then they can commit more of their practice to inspire and I think that's what you're saying when you see a demand open up 81, new centers in the quarter.
Speaker Change: Grow the utilization quarter over quarter that really is reflective of the increased physician awareness and desire to increase their capacity.
Danielle: Thank you thank.
Danielle: Thank you.
Danielle: Thank you.
Michael <unk>: And I show. Our next question comes from the line of Michael <unk> from Jefferies. Please go ahead.
Michael <unk>: Hey, good afternoon, and thanks for taking the questions.
Michael: Hey, Michael.
Michael: Hey, so maybe for Rick just to start on gross margin and Opex control really nice progress. There can you give us any any help on how to think about trends in the back half of the year, particularly around both <unk> and <unk>.
Rick Esky: Yes sure. Thanks for the question Michael So.
Speaker Change: Now that we are providing earnings per share.
Speaker Change: And we also provide gross margin guidance of 83% to 85%.
Danielle: Second quarter Opex growth was 12%.
Speaker Change: But based on our earnings per share revised guidance of 68 per share and our revised revenue guidance that implies that our year over year opex growth will be 17%.
Danielle: Over 2023 so.
Danielle: In 2023, our total Opex was $568 million in the.
Danielle: Growth in Opex, it would be roughly around 17% or so year over year growth and that'll be a ratable increase over the next couple of quarters.
Speaker Change: Great. Thanks, and maybe one for you on predictor you had some positive commentary around some of these early conversations you've had with payers some of whom have already updated their policies is it fair to read that as kind of what you've seen so far in terms of the data looks.
Speaker Change: Successful enough to convince some of these payers and now it's really just a matter of time for waiting for the publication and then we can start to see some of the large payers follow suit.
Speaker Change: Yes, I think thats exactly true I think that.
Danielle: Our focus is going to remain on low BMI patients, primarily patients who have a BMI less than 32 again, it's back with our discussion of our GOP wants and lateral wall collapse in patients with a low BMI just don't have that lateral wall collapse and therefore.
Speaker Change: It's intuitive that they just won't need a sleep endoscopy and that's what the data supports in our discussions with some of their patients and they are open to those discussions those discussions, but we've had other payors earlier removes the requirement for days because remember the FDA does not specify sleep.
Speaker Change: Be it only specify as patients have the proper anatomy and we're seeing some payors kind of align around that but we remain very active with with a lot of the payers.
Danielle: With all changes, including the increase in IHI the increase in the BMI. Most recently you may have saw United healthcare removed there.
Michael: Requirement to trial trial oral appliances now, while we manage that with the prior authorization process certainly that's a benefit to patients, but they also improved and clarify the language around patients being able to refuse CPAP not necessarily failing a travel CPAP so weak.
Michael: Continue to work with all the payers too.
Danielle: Maximize clarity across all payers and improve the experience for patients.
Tim Herbert: Great. Thank you Tim.
Speaker Change: Thank you.
Speaker Change: Thank you.
Speaker Change: And I show. Our next question comes from the line of Chris Pasquale from me from Research. Please go ahead.
Chris Pasquale: Thanks, and congrats on the quarter guys. The operating leverage in particular was great to see as I look at the ratio of new territories to center ads.
Chris Pasquale: In the first half of last year, you added about one new territory for every four new centers and it's kind of what you guided to historically it was one for every six.
Speaker Change: Here are some more efficient use of the salesforce is that sustainable or did you just not seeing as many good candidates in terms of new Rep adds.
Speaker Change: If it is sustainable because what we've also done is increase the number of field clinical reps.
Speaker Change: So we have.
Speaker Change: Larger support staff in each of the territories to help with case coverage.
Speaker Change: As well as working through some of the titration and some of that training. So we're just finding ways to leverage it and be more efficient and I don't think long term, we're going to really significantly increase.
Speaker Change: The ratio but.
Speaker Change: I think we're going to continue to focus on that.
Speaker Change: Great and then the GOP one data and then.
Speaker Change: Hey, Chris This is Ed yes, sorry, it's important to note that we actually did have 12 day activations in the quarter.
Chris Pasquale: Reactivated one.
Speaker Change: <unk> Center, so I think the ratios that you are backing into maybe a little off.
Speaker Change: Okay.
Chris Pasquale: And then the GOP one data in the back of the deck is very helpful. The money Slide for me is the last one where you show the before and after and it seems to support the conclusion that more patients are going to come into your target zoned and drop out once the dust is settled I guess the question then it doesn't really speak to is whether there could be some disruption.
Speaker Change: Or an air pocket at some point as patients get on drug therapy, and then wait to see where they're going to end up and whether it's going to resolve their apnea. How do you think about that risk in.
Speaker Change: Those conversations started to change post the surmount OSA results.
Speaker Change: Yes, I think that the key is going to be for patients who are newly diagnosed.
Speaker Change: And they want to go on a GOP one I think the slip community to sleep physicians I've really talked about that they're going to start them on CPAP and the GOP. One at the same time because of sleep physician does not want to accept the liability of a patient going nine to 12 months.
Michael: To lose weight and to see if they resolve their sleep apnea and that money slide that youre talking about the back of the deck did talk about the benefit.
Speaker Change: Nine to 12 months of being on therapy to have significant weight loss. So I think that starting patients on the CPAP and <unk> ones at the same time, it's really going to help any air pocket and then I think that when patients are not successful or refuse CPAP, then theyre going to be ready to come over.
Speaker Change: To inspire therapy, and you won't see the airgas air gap from that standpoint, the other practical stand standpoint as mentioned earlier in the call. We're running about six months from the time to call to the time, a patient receives an implant and within that.
Speaker Change: That window that capacity with the anti surge as we have sufficient.
Speaker Change: Ill patient population that we're working to take care of.
Speaker Change: I don't think Youll really see any kind of <unk> air gap even visible.
Speaker Change: That's helpful. Thanks, Tim.
Chris Pasquale: Thank you Chris.
Speaker Change: Thank you.
Speaker Change: And I show. Our next question comes from the line of Brent <unk> from Keybanc capital markets. Please go ahead.
Brent: Hey, guys. Thank you so much for taking the questions a lot of good ones already asked but I'll follow up on the inspire five rollout with just one more question just curious I mean, we have like a general sense of the timing.
Speaker Change: At some point in late 2024 that will start but maybe if you can just talk a little bit more about what the limited market launch actually includes in terms of like engaging in training. The initial accounts and then maybe like Directionally, how much of the installed base would actually be participating in the LMR and finally like any key milestones that you would want to see to indicate that you are ready to.
Speaker Change: Move on to the full launch next year.
Speaker Change: I think it's going to be a very simple limited launch is going to be a few centers and we want to measure positive experience with the device with other external has been in the program or the remote.
Speaker Change: And that and proving out the training and getting some.
Speaker Change: Experience with that but it's not going to be an extensive <unk>.
Speaker Change: Limited launch, it's going to be just a few centers.
Speaker Change: And the key milestones as just having a positive experience with with the device.
Speaker Change: Alright, and then just a really quick follow up here, obviously like the number of new centers added this quarter was well above the guidance and what we would typically expect to see but.
Speaker Change: Revenue guidance for the full year is coming up.
Speaker Change: Maybe not.
Speaker Change: As much as you would expect to see apples to apples with the number of new centers.
Speaker Change: Just curious like one topic over the past year or two has been an increased number of secondary sites of service, where you may be adding centers at face value, but not necessarily opening a ton of new capacity. So maybe if you could just touch on kind of like the balance between secondary sites of service that we are in that 81 number versus new doctors.
Speaker Change: Yeah on overall basis Brett.
Speaker Change: We're still seeing significant growth in hospitals.
Speaker Change: <unk> is being used more frequently sometimes at a second site of service.
Speaker Change: At the end of the second quarter.
Speaker Change: About 24% of our overall centers are secondary sites of service.
Brett: Alright got it thank you so much.
Speaker Change: Okay.
Speaker Change: Thank you.
David <unk>: And I show next question comes from the line of David <unk> from Baird. Please go ahead.
Speaker Change: Oh, great. Thanks for taking my questions. Congrats on the strong quarter here I wanted to go back on some of your comments around utilization New Center adds I think just I guess, depending on the way you slice it looks like utilization in Q3 last year was down sequentially and I think if I heard you right.
Speaker Change: Youre expecting utilization to increase sequentially in Q3 this year is that right.
Speaker Change: And can you just help us think about if that is the case why why we should expect a sequential increase in utilization in Q3.
Speaker Change: Yes, I mean, we said that.
Speaker Change: That's our goal aspiration is to increase utilization sequentially in year over year, just like we did in the second quarter.
Speaker Change: And there are a lot of positive items, we talked about in our prepared remarks about that gives us confidence for the rest of the year.
Speaker Change: Not only in Europe with countrywide reimbursement in France.
Speaker Change: And commercial payers continuing to adjust their policies for expanded indications.
Tim Herbert: Tim briefly touched on the reversal of the oral appliance therapy requirement and the continued.
Tim Herbert: Progress, we're making with our DTC programs and so again.
Tim Herbert: We put forth guidance that we have high degree of confidence in and we want to we want to increase utilization.
Speaker Change: Okay, great. Okay. So thats, a maybe a worldwide number rather than something specific to these to the U S is that correct.
Speaker Change: No U S.
Speaker Change: We expect our we want to and our goal is to increase utilization in the U S.
Unnamed Speaker: Okay, that's helpful. Maybe just on the P&L again, heard the comments around the total year-over-year OPEX growth, and we can kind of back into what's implied in the second half of the year. I'm curious, you know, just looking at the cadence in the back half relative to the first half, should we be thinking about?
Speaker Change: Okay. That's helpful. Maybe just on the P&L again I heard the comments around the total year over year Opex growth and you can kind of back into what's implied in the second half of the year I am curious.
Speaker Change: Just looking at the <unk>.
Speaker Change: And in the back half relative to the first half should we be thinking about.
Speaker Change: Depending on where the models kind of shake out a positive kind of net income number a positive EPS number for Q3.
Speaker Change: Or is that just in the numbers there. Thank you.
Speaker Change: Yeah the way we.
Speaker Change: We reframed add up 17% growth in opex year over year basis.
Speaker Change: And when I mentioned kind of incremental.
Speaker Change: Four.
Speaker Change: We're expecting about.
Speaker Change: Right.
Speaker Change: Opex in Q2 was $161 million and if you increase opex sequentially $9 million each quarter that gets you to a 17% growth in opex.
Speaker Change: And with that.
Speaker Change: We expect to be profitable in the third and fourth quarter.
Speaker Change: Okay, Thanks, and I apologize if that was already asked thank you.
Speaker Change: Thank you.
<unk> Singh: Our next question comes from the line of <unk> Singh from RBC capital markets. Please go ahead.
<unk> Singh: Great. Thank you so much and congratulations.
<unk> Singh: Wondering if you could talk a little bit about how you feel about your business.
Speaker Change: And some of the drivers in 2025.
Speaker Change: You, obviously have the buyer side, you said that could speed up the procedure.
Speaker Change: <unk> benefited from the predictor study that could play out do you expect that in the funnel a potential replacement cycle any comment around that would be really helpful. And then I I guess I'm just wondering does that give you confidence.
Speaker Change: 2025%.
Speaker Change: Growth company beyond that.
Speaker Change: Also up about 27% that you're doing this year and maybe if you don't want to I'm, sorry, 25 question.
Speaker Change: How should we think about it inspired long term growth create any comments that would be really helpful. Thank you.
Speaker Change: Absolutely. Thank you for the question and yes. When you asked the CERP as excited about his business Thats. A question that can go for quite some time to talk about because we're very excited about what the prospects of the company our technology and taking care of patients are safety and efficacy is unmatched and we continue to drive our grow.
Speaker Change: Based on strong patient outcomes and with that and with the limited penetration we have in our target market. We stand at be have profitable growth for years to come and I know you're looking for a specific number that we're not going to go down that pathway, yet, but we do have.
Speaker Change: Great confidence with our technology, both the Implantables with inspire five as well as the accessories with our programmer with our sleep <unk> system with our digital tools.
Speaker Change: Help patients navigate the process our improvements in market access and not to mention the improvements that we're all seeing on the international landscape with the number of patients who are being able to treat continuing to grow. So yes, we're very excited about our future and we continue to invest heavily.
Speaker Change: And our growth.
Speaker Change: And heavily in our technology going forward.
Speaker Change: We do see years of growth ahead of us.
Speaker Change: Just I guess as a follow up on utilization can you tell us where the top quartile customers that tracking.
Speaker Change: Perhaps in your primary centers I'm, just trying to understand the potential here in improving utilization and then have you guys decided on the guidance. How are you going to guide us in 'twenty five and beyond perhaps you can give us great primary versus secondary sites when utilization is.
Speaker Change: Any color would be great. Thank you.
Speaker Change: Sure.
Speaker Change: But I'm going to work backwards on that I think the.
Speaker Change: The information that we're going to provide next year to help you kind of gauge the strength of the company. We are still working on that we will stay in communication with you as we work through the rest of this year, but we will continue to provide the number of centers and reps as we.
Speaker Change: Progress through the year and will be in close communication as far as the top quartile centers. The range of number of centers are a number of implants per month the range is somewhere approaching.
Speaker Change: Two or three quarters or three all the way up to over 17 procedures.
Speaker Change: <unk>. So we continue to push the upper end and we want to continue to move the entire a normal distribution of the group of centers.
Speaker Change: Thank you.
Speaker Change: Thank you.
Speaker Change: Thank you.
Larry: One moment for our next question and our next question comes from the line of Larry Larry <unk> from Wells Fargo. Please go ahead.
Larry Larry: Thanks for taking the question, Congrats Tim and Rick and his ski.
Larry Larry: Hey, Tim and inspire five where where are you in detour in terms of determining the rate CPT code.
Speaker Change: For inspire five whats the process and timeline if you have to go back to the old code.
Speaker Change: What impact do you think that could have and I have one follow up.
Speaker Change: No we're going to have it all ready to go for training and it'll be all very clear for the centers and we have some.
Speaker Change: Work to do with the payers, but we're going to be in a really good shape from reimbursement and theirs.
Speaker Change: No new clothes, though we have to go after.
Speaker Change: Okay. So the current code you are saying.
Speaker Change: Do you have confirmation that you can use the current code.
Speaker Change: I did not I said, we're going to have a plan all laid out and we will have that code part of the training package and we'll have that ready to go when we moved to launch.
Speaker Change: Got it and Rick do you stock or consign, and I'm asking because we spoke to a center. This week. They said they had over 10 inspire for devices on the shelf, we take those devices back from centers or require them to work down their inventory. Thanks.
Speaker Change: Well, we do a lot of those San Jose you talked to that's obviously, a pretty productive account when they have that level of inventory and they likely have a par level that they keep us inventory and we will expect on or is there going to burn down their inventory before they ramp up with five because remember four has the same functionality.
Speaker Change: The inspire five system. So we're not looking at swapping out well, we'll work for they have them.
Speaker Change: Down their inventory.
Tim Herbert: Alright, Thanks, Tim.
Speaker Change: You bet sector.
Speaker Change: Thank you.
Speaker Change: And I show. Our next question comes from the line of Calum touched Marsh from Morgan Stanley. Please go ahead.
Speaker Change: Thanks for taking the question guys I wanted to ask on the <unk> dynamics in the U S alone added in Q2 81, but also it seems the larger number of Activations buses prior trends I would just be helpful. If maybe you could walk through what you saw there and how we should be thinking about this churn for the remainder of the year in light of the maintained guidance. Thanks a lot.
Timothy Herbert: Sure, great question. I think the key to it is that we want to make sure that the territory managers are focusing on centers that can be productive and can take care of patients. And those centers that have not had the ability to take care of patients over the last one or two years, we want to deactivate them. Another key example at the majority of those sites, you just have a physician moving to a different facility, so maybe we're opening one facility, but they've left the old facility that we will deactivate.
Speaker Change: Sure Great question I think the key to it is we want to make sure that the territory managers are focusing on centers that can be productive and can take care of.
Timothy Herbert: And as Ezgi mentioned, we have reactivated centers as well because they want to go out and hire another surgeon to take over the program. And we will restart them, and we will reprogramm them. But in the interim, we don't want the field team to focus too much time on centers that aren't able to take care of patients, so we purposely deactivate them. If you go back in time over the last several years, that's very consistent, what we've kind of done on an annual basis, pretty close to the second quarter, we kind of deactivate. I think we did 25 in the year 2022 and 15 in 2020.
Unnamed Speaker: Thank you.
Speaker Change: Patients and those centers that have not had the ability to take care of patients over the last one or two years, we want to deactivate them. Another key example in the majority of those sites you just have a physician moving to a different facility. So that may be were opening one facility, but they're less.
Speaker Change: The old facility that we will deactivate.
Speaker Change: And as Jim mentioned, we have reactivated incentives as well because they want to go out and hire another surge in to take over the.
Speaker Change: Program, and we will restart them and we will re we programme now but in the interim we don't want the field team to focus too much time on centers that aren't able to take care of patients. So we purposely deactivate them. If you go back in time over the last several years, that's very consistent what we've kind of done on.
Speaker Change: On an annual basis pretty close to the second quarter, we kind of deactivate I think we did.
Speaker Change: 25 in the year 2022, and at 15 and 2020 correct. So the <unk>.
Speaker Change: 17 call. It we've done year to date is not really an anomaly.
Paul: Thanks, Paul.
Speaker Change: Thank you.
Paul: Thank you.
Speaker Change: And I show. Our next question comes from the line of Michael Palmer from Wolfe Research. Please go ahead.
Unnamed Speaker: Good afternoon. Thank you. I just have one thread on Gen 5.
Michael Palmer: Hey, good afternoon. Thank you I just have one thread on Gen. Five Rick I heard you say with flat pricing. Its gross margin accretive can you help us think about Gen. Five unit costs versus Gen. Four how much lower are they and then the second part of this is.
Speaker Change: Maybe back to four quarters. There was speculation you might consider a price increase here with gen five.
Speaker Change: Does that thinking stand and if you were to take a price increase with the launch order of magnitude.
Speaker Change: What might that be thank you.
Speaker Change: Yes.
Speaker Change: With our operational readiness, we're still working through those details Mike. So we have determined whether or not there'll be a price increase or continued pricing with that.
Speaker Change: But we are removing the <unk>.
Speaker Change: Sensing.
Speaker Change: Lead that will be now part of the IPG and so we will be removing costs associated with that and so we didn't mentioned it will be accretive even with a flat price, but we haven't quantified that yet.
Speaker Change: Thank you.
Mike: Thanks, Mike.
Jon Block: And I show next question comes from the line of Jon Block from Stifel. Please go ahead.
Jon Block: Thanks, guys. Good afternoon, maybe just two for me Tim how quickly can you move across that they're 200 centers for inspire five training considering just eliminate to lead and simplifies the procedure. When we think about the broader rollout in early 25, I'm guessing you can move pretty quick but maybe if you can quantify and then just longer.
Speaker Change: Term do we have to worry about anything regarding the physician fee. Considering this does simplify the procedure and what that might mean or not mean kind of position and then I'll just ask my follow up.
Timothy Herbert: Very good. Thanks very much. I think 1300. I think, as you kind of hinted there, the training is relatively straightforward, right?
Mike: Good.
Speaker Change: Thanks, very much I think 3500, I think as you cannot hence there the training is relatively straightforward right. We don't want to implant the <unk>.
Timothy Herbert: We don't implant the pressure sensing lead, which is going to be very well accepted by an ear, nose, and throat surgeon, as you can imagine. That's the one part of the surgery that we think is a little bit uncomfortable for an ENT. So we do believe on a capacity front that by removing that sensor, we're going to have more ENTs who want to do the procedure, and it will reduce... So thanks for having me.
Speaker Change: Pressure sensing lead which is going to be very well accepted from my ear nose and throat surgeons as you can imagine thats. The one part of the surgery that we think is a little bit uncomfortable for an E&P. So we do believe on the capacity front that by removing that.
Mike: That sensor that we're going to have more emts, who will want to do the procedure and it will reduce.
Mike: Oh, our time, but I do think that.
Mike: Longer term if people wanted to look at.
Speaker Change: <unk> time to do the procedure and they do a new Ruck survey I think right now the procedures fairly paid and it may take a couple of years for them to to do another ruck survey. So I don't think Youll see any significant change in physician payment for for several years, but certainly they will do a server to make sure it's properly paid.
Speaker Change: On your first question I think the greater challenge.
Speaker Change: As Morris of working through all of the contractual items, because we have pricing agreements with every center and we just need to do contracting updates.
Speaker Change: With all of the centers, but we have a team that can add in.
Mike: Actively work through that process.
Mike: And even though we have 1300 incentives we can efficiently move.
Mike: Move through that so thanks Ryan.
Unnamed Speaker: And then maybe just as a follow-up, you know, Rick, the 2Q24 year-over-year revenue was up about $45 million, almost a 50% drop-through to net income. I mean, just a really impressive drop-through. If I take the midpoint of your 24 guidance, I sort of do that same exercise in the back part of the year, I get way over a dollar back in the back part of, you know, 2H24 in terms of earnings per share.
Speaker Change: So that was really helpful. And then maybe just as a follow up.
Rick Esky: Rick the two to 24 year over year year over year revenue and it was up about 45 million up almost 50% drop through to net income I mean, just really impressive drop through if I take the midpoint of your 24 guidance I wanted to do that same exercise in the back part of the year again way over $1 in the bank.
Speaker Change: Part of Q2 or <unk> 24 in terms of earnings per share. So again really solid EPS power I'm just curious even as a 60 to 80 cents. Just reflects some of your usual conservatism or are there any other areas of spend that you may accelerate as we work our way throughout the balance of 2024.
Unnamed Speaker: So, again, really solid EPS power. I'm just curious, you know, does the $0.60 to $0.80 just reflect some of your usual conservatism, or are there any other areas of spend that you may accelerate as we work our way throughout the balance of 2024? Thanks.
Speaker Change: Yes, Thanks for your question John.
Speaker Change: Part of that driving that number we do have variability in our R&D as a percentage of revenue.
Speaker Change: A year ago was 20% and even in recent quarters. It was high teens. This particular quarter in Q2 was 15% of revenue. So we're continuing to make investments in our R&D.
Speaker Change: In our sleep sync in our and our and our technology platform and so we're.
Mike: Slowing down with investments will also continue to expand and make investments in our commercial organization.
Speaker Change: So.
Speaker Change: We're not slowing down we want to drive top line growth with those investments.
Speaker Change: Thank you.
Mike correctly: And I show. Our next question comes from the line of Mike correctly from Leerink Partners. Please go ahead.
Mike correctly: Hi, everyone. Thanks for taking our questions.
Mike correctly: Can you provide an update on the current backlog of patients that are waiting to get an inspire implant and just to clarify does that backlog specifically refer to patients that have been cleared for inspired post dice and are just waiting for a long time to become available and how would you characterize that backlog of patients.
Timothy Herbert: Yeah, it's a great question, and there are a lot of different definitions out there. But what we, at a high level, talk about is the time it takes somebody, a patient, from contacting our call center through the implant. And we still have that running at about six months, although we're seeing some improvement with that, and by increasing capacity, we can start to lower that down. What is impressive is our ability to track the patients once they go to a sleep endoscopy and reduce the time from sleep endoscopy to implant. And you can imagine if we can start to reduce the number of sleep endoscopies.
Speaker Change: Yes, it's a great question and there's a lot of different definitions in there while we.
Unnamed Speaker: Yeah.
Speaker Change: At a high level talk about is the time it takes somebody.
Speaker Change: Patient from Cox contacting.
Speaker Change: Our call center through to implant and we still have that running at about six months, although we're seeing some improvement with that and by increasing capacity. We can start to lower that down what is impressive is our ability to attract the patients once they go to sleep endoscopy and reduced the time from sleeping.
Speaker Change: Ask me to implant and you can imagine if we can start to reduce the number of sleep endoscopies.
Speaker Change: Based on the predictive results, we can have a significant re.
Speaker Change: A reduction in.
Speaker Change: Their experience that way so a very key focus for the team right now and we closely track patients once they get their insurance approval to make sure they get scheduled.
Speaker Change: In a very expeditious manner, and we can start to track that very closely so very high priority for the team.
Speaker Change: Got it thanks very much.
Mike: Thanks, Mike.
Speaker Change: Thank you.
Speaker Change: And I show. Our next question comes from the line of Suraj Kalia from Oppenheimer <unk> co. Please go ahead.
Suraj Kalia: Can you hear me all right.
Suraj: Suraj how are you.
Speaker Change #111: Congrats on the quarter.
Speaker Change: A couple of questions and ultra will there be a way together I know, it's been a long call.
Speaker Change #103: Maybe I missed.
Speaker Change: Sure.
Speaker Change: Qualitative commentary or quantitative or new stores same store sales.
Speaker Change: Any additional color there would be great and also Tim I'll throw my second question also your way your comments about physicians not wanting.
Speaker Change: Paraphrasing does not wanting to take liability on <unk> and waiting to see nine to 12 months for.
Speaker Change: So the impact I guess help us understand that a little more.
Tim Herbert: I think also nurse them it takes four to six months.
Speaker Change: Through the pipeline and get to a surgery and other three plus months or full calculation.
Speaker Change: And you really don't know if you can respond to hypoglossal nerve.
Tim Herbert: Maybe if you could tie your comments about the liability component would be greatly appreciated. Thank you for taking my questions. Thanks, Ross same store sales go back there first I think we continue as a priority to make sure that we want to increase same store sales increase of utilization at existing sites and I think that is what you are seeing by seeing the increase.
Speaker Change: Utilization on a quarter over quarter basis, certainly year over year and that remember has a little bit of a diluted effect by adding more centers to the denominator and so it really shows that we are growing utilization at existing centers as far as the physicians. They don't want patients to remain left untreated.
Tim Herbert: And so maybe let me backtrack from the word liability a little bit but talk about the desire sleep physicians to take care of patients and they're going to want to start them on a therapy like <unk> right away to be able to move forward.
Speaker Change: As far as inspire goes that we know there is a time that it takes people to get through the process get through sleep endoscopy, a prior authorization and get to surgery, but remember these are patients that have already attempted CPAP and so they've tried therapy. They may be using CPAP to carry them forward, but.
Speaker Change: <unk> properly selected and we've been able to show our safety and efficacy at a very high probability that they will have a strong benefit with inspire therapy and that's why we have over 75000 patients treated with inspire therapy to date.
Speaker Change: Thanks, Suraj, we have time for one last question Don can you queue up.
Stefan: Stefan please.
Speaker Change #102: Sure. Thank you and I'm sure. Our last question comes from the line of Stephanie.
Speaker Change #103: From Bank of America Securities. Please go ahead.
Speaker Change: Hey, its actually Travis steed from MBNA.
Speaker Change: Okay.
Speaker Change: Yes.
Travis Steed: Just wanted to sneak in my mind 10 wasn't wasn't working so.
Speaker Change: I've had several questions Tonight on the sequential increase in utilization and trying to tie that end to the other comments.
Speaker Change #102: You're comfortable with the consensus U S revenue, so I don't I don't know if that's.
Speaker Change #100: That's just the aspiration is to grow sequentially or just.
Speaker Change #101: How do we think about that sequential uptick in utilization this quarter.
Speaker Change: We are going to be in the queue for the rest of the year quarter over quarter sequential increase in utilization that certainly year over year. So we're going to continue to focus on that.
Speaker Change: And.
Speaker Change: That's the mode of the commercial team.
Speaker Change: Okay, but the guidance the comfortable with street, it's not necessarily showing sequential increase correct.
Unnamed Speaker: Okay, perfect. And then one other question I got from investors is just kind of curious if there was anything in Q2 that was one time, you know, Easter timing that came in, or anything, impact of UNH not doing prioritizations, just anything to consider in Q2 that was, you know, one time that we would think about modeling this sequentially.
Speaker Change: We keep those are separate topics, okay perfect and then one other question I got from investors is just kind of curious if there was any anything in Q2 that was one time Easter timing that came in or anything.
Speaker Change: Impact of UNH not doing propositions is there anything to consider in Q2 that was one time that we would think about modeling that sequentially.
Speaker Change: Yes, Travis Great question, we actually went through and tried to look at sales days in what month. The days are in and that Fedex calls because of ice or.
Speaker Change: You had a hurricane this past week. So no. We don't we didn't see anything in the second quarter that really highlights.
Speaker Change: Secondly that I think we had a strong quarter from the team we're very proud of.
Speaker Change: The efforts both in the U S as well as international.
Unnamed Speaker: Okay, great. Thanks a lot.
Speaker Change: Their support.
Timothy Herbert: Thank you. Hey, let me jump in just before we close.
Speaker Change #105: Okay, great. Thanks, a lot.
Speaker Change: Hey, let me jump into just before we close I want to thank everybody for joining the call today and as always we're grateful to the growing team of dedicated inspire employees for their enthusiasm hard work and continued motivation to achieve successful and consistent patient outcomes.
Timothy Herbert: I want to thank everybody for joining the call today, and, as always, we're grateful to the growing team of dedicated Inspire employees for their enthusiasm, hard work, and continued motivation to achieve successful and consistent patient outcomes. The team's commitment to patients remains unmatched and is the most important element to our success. We wish to thank all of our employees as well as the healthcare teams for their continued efforts as we remain focused on further expanding our business in the U.S., Europe, and Asia, and for all of you on the call; we appreciate it.
Speaker Change: Team's commitment to patients remains unmatched and is the most important element to our success.
Speaker Change: I wish to thank all of our employees as well as the health care teams for their continued efforts as we remain focused on further expanding our business in the U S Europe and Asia and for our view on the call. We appreciate your continued.
Speaker Change: Interest and support of inspire and look forward to providing you with further updates in the months ahead. So thank you very much and back to you.
Operator: Thank you, sir. This concludes today's conference call. Thank you for attending. You may now disconnect.
Speaker Change #100: You. Sir This concludes today's conference call. Thank you for attending you may now disconnect.
Speaker Change: Okay.
Speaker Change: Yes.
Speaker Change: [music].