Q4 2025 Inspire Medical Systems Inc Earnings Call [BACKUP]

February 11, 2026

Tim Herbert: Continues to improve year over year, and the 2025 data to date has shown a 0.5% occurrence of device explants and a 1.5% occurrence of revisions. With respect to the Inspire 5 US launch, the team has made significant progress in the Q4, and we are excited to report that physician training is complete, contracting is over 95% complete for our centers, and sleep sync onboarding is complete for over 90%, bringing the total to over 90% of our centers implanting Inspire 5 today. We expect to have stable product inventory for Inspire 5 through all 2026, and we anticipate transitioning the existing Inspire 4 IPG line to Inspire 5 later in 2026. Switching to our quarterly results, we are very pleased with the strong revenue performance and cost discipline we delivered in the Q4, which enabled us to deliver positive operating incomes and earnings.

Timothy Herbert: Continues to improve year over year, and the 2025 data to date has shown a 0.5% occurrence of device explants and a 1.5% occurrence of revisions. With respect to the Inspire 5 US launch, the team has made significant progress in the Q4, and we are excited to report that physician training is complete, contracting is over 95% complete for our centers, and sleep sync onboarding is complete for over 90%, bringing the total to over 90% of our centers implanting Inspire 5 today. We expect to have stable product inventory for Inspire 5 through all 2026, and we anticipate transitioning the existing Inspire 4 IPG line to Inspire 5 later in 2026. Switching to our quarterly results, we are very pleased with the strong revenue performance and cost discipline we delivered in the Q4, which enabled us to deliver positive operating incomes and earnings.

Tim Herbert: We ended the year with 295 US territories and 275 US field clinical representatives. As we enter 2026, we are being more strategic in our approach to territory management and optimizing our model through targeted territory consolidation and increased field clinical reps. We hired 7 field clinical reps in the quarter, consistent with our strategy to get the ratio closer to one-to-one territory manager to field clinical rep. On patient marketing, we had a very strong finish to 2025 regarding patient demand for Inspire therapy, including a significant increase in Q4 in social media activity. We believe that this increase is related to the incremental growth investments we made in the back half of 2025. The WISER Program, which is a government initiative requiring prior authorization of Medicare cases in 6 pilot states, kicked off in mid-January of 2026.

Timothy Herbert: We ended the year with 295 US territories and 275 US field clinical representatives. As we enter 2026, we are being more strategic in our approach to territory management and optimizing our model through targeted territory consolidation and increased field clinical reps. We hired 7 field clinical reps in the quarter, consistent with our strategy to get the ratio closer to one-to-one territory manager to field clinical rep. On patient marketing, we had a very strong finish to 2025 regarding patient demand for Inspire therapy, including a significant increase in Q4 in social media activity. We believe that this increase is related to the incremental growth investments we made in the back half of 2025. The WISER Program, which is a government initiative requiring prior authorization of Medicare cases in 6 pilot states, kicked off in mid-January of 2026.

Tim Herbert: To date, many Medicare cases have been submitted and approved; however, there have also been denials for multiple reasons, including medical criteria inconsistencies in the AI software as well as coding. We continue to provide prior authorization support to our centers as they work through the WISER implementation, and we'll update you as we have more information. But the WISER program has affected Medicare patient procedures in these six states in Q1. With respect to our R&D initiatives, we recently began testing a prior authorization feature in sleep sync, which will provide a simplified uploading of patient data to support preparation of prior authorization submissions. We believe this is an important initiative to enhance patient access to Inspire therapy, and we continue to look for additional ways to increase the utility of sleep sync.

Timothy Herbert: To date, many Medicare cases have been submitted and approved; however, there have also been denials for multiple reasons, including medical criteria inconsistencies in the AI software as well as coding. We continue to provide prior authorization support to our centers as they work through the WISER implementation, and we'll update you as we have more information. But the WISER program has affected Medicare patient procedures in these six states in Q1. With respect to our R&D initiatives, we recently began testing a prior authorization feature in sleep sync, which will provide a simplified uploading of patient data to support preparation of prior authorization submissions. We believe this is an important initiative to enhance patient access to Inspire therapy, and we continue to look for additional ways to increase the utility of sleep sync.

Tim Herbert: We are also excited to announce that we recently received FDA approval for 3 Tesla MRI compatibility. In addition, in 2026, one of our primary product development programs will be Inspire 6, which will include sleep detection and auto activation, meaning the device will turn itself on when the patient falls asleep and turn itself off when the patient awakens, maximizing therapy adherence. In summary, we remain focused on the patient to continue the growth and the adoption of Inspire therapy. We will execute our growth strategy of driving high-quality patient flow and increasing the capacity of our provider partners to effectively treat and manage more patients.

Timothy Herbert: We are also excited to announce that we recently received FDA approval for 3 Tesla MRI compatibility. In addition, in 2026, one of our primary product development programs will be Inspire 6, which will include sleep detection and auto activation, meaning the device will turn itself on when the patient falls asleep and turn itself off when the patient awakens, maximizing therapy adherence. In summary, we remain focused on the patient to continue the growth and the adoption of Inspire therapy. We will execute our growth strategy of driving high-quality patient flow and increasing the capacity of our provider partners to effectively treat and manage more patients.

Tim Herbert: Our key strategies include training advanced practice providers, certifying additional surgeons qualified to implant Inspire therapy, and driving the adoption of SleepSync and our digital tools, all of which are embedded strategy in our commercial team's objective in enhancing patient access to Inspire therapy. Looking ahead, we are excited about our future, and we believe that we have the appropriate strategies in place to drive long-term stakeholder value, and we are focused on addressing reimbursement, as I described above. Looking beyond 2026, we continue to take actions to position the company for profitable growth. As we close 2025, I would like to thank Rick Buchholz for as many years at Inspire. With the close of 2025, Rick will move on to his new opportunity, and we wish him well. He joined Inspire in 2014 and was a key contributor to bringing Inspire to where it is today.

Timothy Herbert: Our key strategies include training advanced practice providers, certifying additional surgeons qualified to implant Inspire therapy, and driving the adoption of SleepSync and our digital tools, all of which are embedded strategy in our commercial team's objective in enhancing patient access to Inspire therapy. Looking ahead, we are excited about our future, and we believe that we have the appropriate strategies in place to drive long-term stakeholder value, and we are focused on addressing reimbursement, as I described above. Looking beyond 2026, we continue to take actions to position the company for profitable growth. As we close 2025, I would like to thank Rick Buchholz for as many years at Inspire. With the close of 2025, Rick will move on to his new opportunity, and we wish him well. He joined Inspire in 2014 and was a key contributor to bringing Inspire to where it is today.

Tim Herbert: With that, it is also my pleasure to introduce you to Matt Osberg for his initial earnings call at Inspire.

Timothy Herbert: With that, it is also my pleasure to introduce you to Matt Osberg for his initial earnings call at Inspire.

Matt Osberg: Thank you, Tim, and good afternoon, everyone. I'm excited to be part of the Inspire team, and I look forward to getting to know each of you in the coming months. Now let's review our 2025 Q4 and full year financial results. Q4 revenue increased 12% to $269 million, and full year revenue increased 14% to $912 million, with both increases primarily driven by growth at existing centers and new center additions. Q4 and full year operating margin improved primarily due to sales leverage and a higher sales mix of Inspire 5 systems. As expected, Q4 and full year income tax was a significant benefit, primarily driven by the previously disclosed release of the company's income tax valuation allowance of our net deferred tax assets in Q4 of 2025. Q4 net income per diluted share increased $3.51 to $4.66.

Matthew Osberg: Thank you, Tim, and good afternoon, everyone. I'm excited to be part of the Inspire team, and I look forward to getting to know each of you in the coming months. Now let's review our 2025 Q4 and full year financial results. Q4 revenue increased 12% to $269 million, and full year revenue increased 14% to $912 million, with both increases primarily driven by growth at existing centers and new center additions. Q4 and full year operating margin improved primarily due to sales leverage and a higher sales mix of Inspire 5 systems. As expected, Q4 and full year income tax was a significant benefit, primarily driven by the previously disclosed release of the company's income tax valuation allowance of our net deferred tax assets in Q4 of 2025. Q4 net income per diluted share increased $3.51 to $4.66.

Matt Osberg: Full year net income per diluted share increased $3.09 to $4.89. Fourth quarter adjusted net income per diluted share increased $0.51 to $1.65. Full year adjusted net income per diluted share increased $0.80 to $2.42. Fourth quarter operating cash flow was $52 million, bringing the full year total operating cash flow to $117 million. We completed $50 million of share repurchases in the fourth quarter, bringing the full year total to $175 million, and we ended the quarter with $405 million in cash and investments. Our strong cash position allows us to remain focused on making investments to drive profitable growth. Turning to our 2026 outlook, we are revising our full year revenue outlook to be in the range of $950 million to 1 billion, representing 4% to 10% growth.

Matthew Osberg: Full year net income per diluted share increased $3.09 to $4.89. Fourth quarter adjusted net income per diluted share increased $0.51 to $1.65. Full year adjusted net income per diluted share increased $0.80 to $2.42. Fourth quarter operating cash flow was $52 million, bringing the full year total operating cash flow to $117 million. We completed $50 million of share repurchases in the fourth quarter, bringing the full year total to $175 million, and we ended the quarter with $405 million in cash and investments. Our strong cash position allows us to remain focused on making investments to drive profitable growth. Turning to our 2026 outlook, we are revising our full year revenue outlook to be in the range of $950 million to 1 billion, representing 4% to 10% growth.

Matt Osberg: This range reflects the expected impact on our first quarter from coding uncertainty, as well as the range of outcomes that exist by adopting CPT Code 64582 with the Dash 52 modifier and the related physician reimbursement rates for the full year. The low end of our outlook contemplates a 50% discount to the physician fee, while the high end of our outlook contemplates a 10% discount. As we progress through the first half of the year, we expect to gain further insights on the professional fee associated with the use of this modifier. Additionally, we expect adjusted operating margin in the range of 6% to 8%, net income per diluted share in the range of $1.23 to $1.81, and adjusted net income per diluted share in the range of $1.85 to $2.35.

Matthew Osberg: This range reflects the expected impact on our first quarter from coding uncertainty, as well as the range of outcomes that exist by adopting CPT Code 64582 with the Dash 52 modifier and the related physician reimbursement rates for the full year. The low end of our outlook contemplates a 50% discount to the physician fee, while the high end of our outlook contemplates a 10% discount. As we progress through the first half of the year, we expect to gain further insights on the professional fee associated with the use of this modifier. Additionally, we expect adjusted operating margin in the range of 6% to 8%, net income per diluted share in the range of $1.23 to $1.81, and adjusted net income per diluted share in the range of $1.85 to $2.35.

Matt Osberg: Our outlook assumes an effective tax rate of 44% to 49% and an adjusted effective tax rate of 26% to 28%. As we are in a situation where our pre-tax income is a relatively small base, certain discrete tax charges can have a material impact on our tax rate. Due to the fact that we have a significant amount of stock-based compensation outstanding and due to the volatility of our stock price, the tax impact of stock-based compensation on our effective tax rate can be material and could have significant variability from year to year, including moving from a tax expense to a tax benefit between years. Therefore, we have excluded the tax impact of stock-based compensation in our adjusted income tax expense and our adjusted effective tax rate.

Matthew Osberg: Our outlook assumes an effective tax rate of 44% to 49% and an adjusted effective tax rate of 26% to 28%. As we are in a situation where our pre-tax income is a relatively small base, certain discrete tax charges can have a material impact on our tax rate. Due to the fact that we have a significant amount of stock-based compensation outstanding and due to the volatility of our stock price, the tax impact of stock-based compensation on our effective tax rate can be material and could have significant variability from year to year, including moving from a tax expense to a tax benefit between years. Therefore, we have excluded the tax impact of stock-based compensation in our adjusted income tax expense and our adjusted effective tax rate.

To date has shown up.

5% occurrence.

Device X plant and a one 5% occurrence of revisions.

With respect to the inspire five U S launch the team has made significant progress in the fourth quarter and we are excited to report that physician training is complete contracting is over 95% complete for our centers.

<unk> Onboarding is complete program, 90%, bringing the total to over 90% of our centers implanting inspire five to date.

Matt Osberg: The ultimate amount of tax impact will primarily be determined by the difference in the value of the stock at the grant date as compared to the vesting date for RSUs and PSUs, or the grant date versus the exercise date for options. We expect the tax impact from stock-based compensation will be concentrated in the first quarter of the year, as that is when the majority of the vesting of our RSUs and PSUs occur. Our outlook assumes estimated weighted average diluted shares outstanding of approximately $29.4 million and capital expenditures between $45 million and 50 million. Looking at the cadence of the year, due to the expected impact on our first quarter for coding uncertainty, we expect revenue in the first quarter of 2026 to be approximately flat to prior year.

Matthew Osberg: The ultimate amount of tax impact will primarily be determined by the difference in the value of the stock at the grant date as compared to the vesting date for RSUs and PSUs, or the grant date versus the exercise date for options. We expect the tax impact from stock-based compensation will be concentrated in the first quarter of the year, as that is when the majority of the vesting of our RSUs and PSUs occur. Our outlook assumes estimated weighted average diluted shares outstanding of approximately $29.4 million and capital expenditures between $45 million and 50 million. Looking at the cadence of the year, due to the expected impact on our first quarter for coding uncertainty, we expect revenue in the first quarter of 2026 to be approximately flat to prior year.

We expect to have stable product inventory for inspire five through all of 2026, and we anticipate transitioning the existing inspire for IPG lined to inspire five later in 2026.

Switching to our quarterly results. We are very pleased with the strong revenue performance and cost discipline, we delivered in the fourth quarter, which enabled us to deliver positive operating income and earnings.

We ended the year with 295 U S territories, and 275 U S field clinical representatives.

As we enter 2026, we are being more strategic in our approach to territory management and optimizing our model through targeted territory consolidation and increased.

Matt Osberg: Additionally, we expect a net loss in Q1 due to our revenue expectation and forecasted year-over-year higher operating expenses. We expect sequential improvement in both our revenue and net income throughout the year, with Q4 having the highest levels of revenue and profit in the year. Finally, in addition to revenue, we plan to focus more of our communications on measures such as operating income, operating margin, and net income per diluted share, as well as adjusted operating income, adjusted operating margin, and adjusted net income per diluted share. These changes more closely align our reporting with our medical device peer group and give our shareholders a better understanding of our recurring operations.

Matthew Osberg: Additionally, we expect a net loss in Q1 due to our revenue expectation and forecasted year-over-year higher operating expenses. We expect sequential improvement in both our revenue and net income throughout the year, with Q4 having the highest levels of revenue and profit in the year. Finally, in addition to revenue, we plan to focus more of our communications on measures such as operating income, operating margin, and net income per diluted share, as well as adjusted operating income, adjusted operating margin, and adjusted net income per diluted share. These changes more closely align our reporting with our medical device peer group and give our shareholders a better understanding of our recurring operations.

Yield clinical reps.

We hired seven field clinical reps in the quarter can consistent with our strategy to get the ratio closer to one to one territory manager to field clinical rep.

Our patient marketing.

Had a very strong finish to 2025 regarding patient demand for inspire therapy, including a significant increase in the fourth quarter and social media activity.

We believe that this increase is related to the incremental growth investments we made in the back half of 2025.

The wiser program, which is a government initiative requiring prior authorization of Medicare cases in six pilot states kicked off in mid January of 2026.

Matt Osberg: As we have not previously reported on adjusted operating income and adjusted operating margin, we have included a reconciliation of these measures for each quarter and the full year 2025 in our press release and investor presentation. In closing, despite the dynamic reimbursement landscape, our team remains focused on the fundamentals to drive strong performance in the fourth quarter of 2025. As we look ahead to 2026, we will continue to emphasize execution and remain focused on what we can control. I'm excited to be part of the Inspire team and excited about the opportunities we have to drive continued profitable growth and long-term shareholder value. With that, our prepared remarks are concluded. Dilem, you may now open the line for questions.

Matthew Osberg: As we have not previously reported on adjusted operating income and adjusted operating margin, we have included a reconciliation of these measures for each quarter and the full year 2025 in our press release and investor presentation. In closing, despite the dynamic reimbursement landscape, our team remains focused on the fundamentals to drive strong performance in the fourth quarter of 2025. As we look ahead to 2026, we will continue to emphasize execution and remain focused on what we can control. I'm excited to be part of the Inspire team and excited about the opportunities we have to drive continued profitable growth and long-term shareholder value. With that, our prepared remarks are concluded. Dilem, you may now open the line for questions.

To date, many Medicare cases have been submitted and approved however, there have also been denials for multiple reasons, including medical criteria inconsistency in the AI software as well as coding.

We continue to provide prior authorization support towards centers as they work through the wiser implementation and we'll update you as we have more information but.

But the wiser program has affected Medicare patient procedures.

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With respect to our R&D initiatives.

We recently began testing a prior authorization feature in sleep thing, which will provide a simplified uploading of patient data to support preparation of prior authorization submissions.

Operator: Thank you, sir. As a reminder, to ask a question, you will need to press star 11 on your telephone. To withdraw your question, please press star 11 again. We ask that you please limit your questions to no more than one question and one follow-up. Please stand by while we compile the Q&A roster. And our first question comes from the line of Adam Maeder from Piper Sandler. Please go ahead.

We believe this is an important initiative to enhance patient access to inspire therapy and we continue to look for additional ways to increase the utility of sleep thing.

We are also excited to announce that we recently received FDA approval.

Adam Maeder: Hi, Tim, Matt, Ezgi Yagci. Thank you for taking the questions, and apologies for the background noise. I wanted to start on reimbursement, and I guess the first question is just around the physician fee with Gen 5 using the 82 code and the dash 52 modifier, and the 10% to 15% reduction is obviously a wide range. So the question is, when do you expect to have more clarity on exactly where that shakes out from the various payers? I think you said you have a strong case to come out closer to the 10% haircut, so maybe just elaborate on that. And what can the company and the medical societies do from an involvement standpoint in those discussions? Thanks.

For a three Tesla MRI compatibility.

In addition in 2026, one of our primary product development programs.

We'll be inspire six.

Which will include slip detection and auto activation, meaning the device will turn itself on when the patient falls asleep and turn itself off when the patient awakens maximizing therapy adherence.

In summary, we remain focused on the patient to continue the growth and the adoption of inspire therapy, we will execute our growth strategy of driving high quality patient flow and increasing the capacity of our provider partners to effectively treat and manage more patients.

Tim Herbert: Hi, Adam. Thanks very much. I think first off, there's existing policies in place. So step number one is for facilities and professionals to build to the current policy. So this evolution to Dash 52 is going to be a little bit of a process as it kind of works forward. Number two, we want to be proactive, working initially with the MACs, but then eventually also working with commercial payers too. But initially with the MACs, we can describe the differences between Inspire 4 and Inspire 5, the history using Inspire 5 with CPT code 64568 in 2025, and document the reduction in the work performed in 64582 to be able to get alignment with the MACs and, more importantly, to drive consistency.

Timothy Herbert: Hi, Adam. Thanks very much. I think first off, there's existing policies in place. So step number one is for facilities and professionals to build to the current policy. So this evolution to Dash 52 is going to be a little bit of a process as it kind of works forward. Number two, we want to be proactive, working initially with the MACs, but then eventually also working with commercial payers too. But initially with the MACs, we can describe the differences between Inspire 4 and Inspire 5, the history using Inspire 5 with CPT code 64568 in 2025, and document the reduction in the work performed in 64582 to be able to get alignment with the MACs and, more importantly, to drive consistency.

Our key strategies include training advanced practice providers certifying additional surgeons qualified to inspire implant inspire therapy and.

And driving the adoption of sleep, Zhang and our digital tools.

All of which are embedded strategy and our commercial teams objective and enhancing patient access.

To inspire therapy.

Looking ahead, we are excited about our future and we believe that we have the appropriate strategies in place to drive long term stakeholder value and we are focused on addressing reimbursement as I described above.

There can be a 2026, we continue to take actions to position the company for profitable growth.

As we close 2025 I would like to thank grip view holds for his many years at inspire with the close of 2025, Rick will move on to his new opportunity and we wish him well he joined inspire in 2014 and was a key contributor to bringing inspire to where it is today.

Tim Herbert: So yeah, we expect that, and we believe that we're going to work with these societies and with the physician groups to make sure that we can drive that consistency so they have predictability to be able to move forward with implants.

Timothy Herbert: So yeah, we expect that, and we believe that we're going to work with these societies and with the physician groups to make sure that we can drive that consistency so they have predictability to be able to move forward with implants.

Hey.

With that.

It is also my pleasure to introduce you to Matt Osborne for his initial earnings call that inspire.

Operator: Okay. That's helpful. And for the follow-up, I guess maybe just talk about kind of the pathway forward here in terms of Gen 5, and I think you mentioned you're pursuing a dedicated code, just key steps, and timelines in that process. And I guess one question that I have, sorry, to take it on is, why not push the Gen 4 system a little bit more aggressively, just given that the reimbursement is, I'll call it, buttoned up with 64582 until we really have Gen 5 kind of fully situated? Thank you for taking the question.

Thank you Tim and good afternoon, everyone.

I am excited to be part of the inspire team and I look forward to getting to know each of you in the coming months.

Now, let's review, our 2025 fourth quarter and full year financial results.

Fourth quarter revenue increased 12% to $269 million in full year revenue increased 14% to $912 million with bolt increases primarily driven by growth at existing centers and new center additions.

Fourth quarter and full year operating margin improved primarily due to sales leverage and a higher sales mix of inspire five systems.

Tim Herbert: I understand that. I think a couple of things that you talk about in that discussion. Number one, we do want to pursue a new CPT code for the simple reason there has been public discussions that using a Dash 52 Modifier is not a long-term solution. That is really used for special cases, and so that's important for us to be able to address that. Number two, if you look at the payers, we believe that they are going to minimize that reduction because if they're going to pay for an Inspire 5 procedure of a 50% reduction, that could be $350-some compared to $700 for an Inspire 4. So we think commercial will prevail. We will.

Timothy Herbert: I understand that. I think a couple of things that you talk about in that discussion. Number one, we do want to pursue a new CPT code for the simple reason there has been public discussions that using a Dash 52 Modifier is not a long-term solution. That is really used for special cases, and so that's important for us to be able to address that. Number two, if you look at the payers, we believe that they are going to minimize that reduction because if they're going to pay for an Inspire 5 procedure of a 50% reduction, that could be $350-some compared to $700 for an Inspire 4. So we think commercial will prevail. We will.

As expected fourth quarter and full year income tax was a significant benefit primarily driven by the previously disclosed release of the company's income tax valuation allowance of our net deferred tax assets in the fourth quarter of 2025.

Fourth quarter net income per diluted share increased $3 51.

To $4 66.

Full year net income per diluted share increased $3 nine.

To $4 89.

Fourth quarter adjusted net income per diluted share increased 51 to.

To $1 65.

Full year adjusted net income per diluted share increased 80 to $2 42.

Tim Herbert: We believe that we can work with the payers and the societies to get alignment, to be able to continue to offer Inspire 5 because that is a product that has shown effectiveness even as compared to Inspire 4. That being said, to the last part of your discussion, we do have inventory of Inspire 4 available to those physicians and those centers that wish to continue with that by submitting a CPT code now. The timing of that is such that that would come online with a RUC process near 1 January 2028. So that is a two-year period. So it's important that we work through to minimize the reduction with the dash 52 modifier but also have Inspire 4 available.

Timothy Herbert: We believe that we can work with the payers and the societies to get alignment, to be able to continue to offer Inspire 5 because that is a product that has shown effectiveness even as compared to Inspire 4. That being said, to the last part of your discussion, we do have inventory of Inspire 4 available to those physicians and those centers that wish to continue with that by submitting a CPT code now. The timing of that is such that that would come online with a RUC process near 1 January 2028. So that is a two-year period. So it's important that we work through to minimize the reduction with the dash 52 modifier but also have Inspire 4 available.

Fourth quarter operating cash flow was $52 million, bringing the full year total operating cash flow to $117 million.

We completed $50 million of share repurchases in the fourth quarter, bringing the full year total to $175 million and we ended the quarter with $405 million in cash and investments.

Our strong cash position allows us to remain focused on making investments to drive profitable growth.

Turning to our 2026 outlook, we are revising our full year revenue outlook to be in the range of $950 million to $1 billion.

<unk>, 4% to 10% growth.

This range reflects the expected impact on our first quarter from coding uncertainty as well as the range of outcomes that exist by adopting CPT code $645, two with the Dash 52, modifier and the related physician reimbursement rates for the full year.

Operator: Thank you.

Tim Herbert: Thanks, Adam.

Timothy Herbert: Thanks, Adam.

Operator: Thank you. And our next question comes from the line of John Block from Citi. Please go ahead.

John Block: Great. Thanks, guys. Good afternoon. Tim, I guess I'm just curious, at the revision to the 2026 revenue guidance, what's specific to the new reimbursement landscape, the 82 code with the modifier, versus what you're seeing with the WISER program? Because you did call out just some early findings there, some headwinds. So is there a way to delineate one versus the other, or how do we think that through?

Johnathan Block: Great. Thanks, guys. Good afternoon. Tim, I guess I'm just curious, at the revision to the 2026 revenue guidance, what's specific to the new reimbursement landscape, the 82 code with the modifier, versus what you're seeing with the WISER program? Because you did call out just some early findings there, some headwinds. So is there a way to delineate one versus the other, or how do we think that through?

The low end of our outlook contemplates a 50% discount to the physician fee, while the high end of our outlook contemplates a 10% discount.

As we progressed through the first half of the year, we expect to gain further insights on the professional fee associated with the use of this modifier.

Additionally, we expect adjusted operating margin in the range of 6% to 8%.

Tim Herbert: Hi, John. I think the WISER program is the government program to require prior authorizations in 6 pilot states. Now, those 6 states are significant contributors of procedures, and so that's why we're working very diligently to solve the technical challenges with the portal that WISER has implemented. WISER's program didn't allow any implants until 15 January because I think there was awareness that there would be challenges as they fired up the program. So we do see the WISER will be able to get our arms around that and work with our centers to be able to get the prior authorizations once the portal is streamlined and we're able to work through the bug. So a little bit more of just a Q1 phenomenon with the WISER. What was the first question?

Timothy Herbert: Hi, John. I think the WISER program is the government program to require prior authorizations in 6 pilot states. Now, those 6 states are significant contributors of procedures, and so that's why we're working very diligently to solve the technical challenges with the portal that WISER has implemented. WISER's program didn't allow any implants until 15 January because I think there was awareness that there would be challenges as they fired up the program. So we do see the WISER will be able to get our arms around that and work with our centers to be able to get the prior authorizations once the portal is streamlined and we're able to work through the bug. So a little bit more of just a Q1 phenomenon with the WISER. What was the first question?

Net income per diluted share in the range of $1 23 to $1 81.

And adjusted net income per diluted share in the range of $1 85 to $2 35.

Our outlook assumes an effective tax rate of 44% to 49% and an adjusted effective tax rate of 26% to 28%.

As we are in a situation, where our pretax income is a relatively small base certain discrete tax charges can have a material impact on our tax rate.

Due to the fact that we have a significant amount of stock based compensation outstanding and due to the volatility of our stock price.

The tax impact of stock based compensation on our effective tax rate can be material and could have significant variability from year to year, including moving from a tax expense to a tax benefit between years.

Matt Osberg: So the primary reason for our revenue reduction, though, is the coding uncertainty and the potential shift to the 52 modifier for the remainder of the year. WISER is causing a little bit of disruption in those six states, but the bigger issue is the updated reimbursement guidance.

Matthew Osberg: So the primary reason for our revenue reduction, though, is the coding uncertainty and the potential shift to the 52 modifier for the remainder of the year. WISER is causing a little bit of disruption in those six states, but the bigger issue is the updated reimbursement guidance.

Therefore, we have excluded the tax impact of stock based compensation and our adjusted income tax expense and our adjusted effective tax rate.

The ultimate amount of tax impact will primarily be determined by the difference in the value of the stock at the grant date as compared to the vesting date for RF using psus or the grant date versus the exercise date for options.

John Block: Okay. That's helpful context. I just wanted to, to that last point, make sure that was all embedded in the revision. And then maybe just a quicker follow-up is, Tim, can you remind us, in terms of the physicians, what percent are salary-based, what percent are RVUs? And I'm just curious, anecdotally, any feedback you're getting, right, for those that have built and have built and seen the modifier, what you're hearing from the field, from the physicians, or from the reps. Thanks, guys.

Johnathan Block: Okay. That's helpful context. I just wanted to, to that last point, make sure that was all embedded in the revision. And then maybe just a quicker follow-up is, Tim, can you remind us, in terms of the physicians, what percent are salary-based, what percent are RVUs? And I'm just curious, anecdotally, any feedback you're getting, right, for those that have built and have built and seen the modifier, what you're hearing from the field, from the physicians, or from the reps. Thanks, guys.

We expect the tax impact from stock based compensation will be concentrated in the first quarter of the year as that is when the majority of the vesting of our rsum and psus occurring.

Our outlook assumes estimated weighted average diluted shares outstanding of approximately $29 4 million in capital expenditures between $45 million and $50 million.

Tim Herbert: Sure. I think that a majority of our physicians are private practice. Any physician who's associated with a large medical practice or a large hospital system would be salary-based. Physicians who are part of an academic center tend to be salary-based, so it doesn't have the same level of impact with them, but also, a lot of them are the key opinion leaders that help drive this process. So they will be working with us in detail to try and minimize this reduction of the reimbursement going forward.

Timothy Herbert: Sure. I think that a majority of our physicians are private practice. Any physician who's associated with a large medical practice or a large hospital system would be salary-based. Physicians who are part of an academic center tend to be salary-based, so it doesn't have the same level of impact with them, but also, a lot of them are the key opinion leaders that help drive this process. So they will be working with us in detail to try and minimize this reduction of the reimbursement going forward.

Looking at the cadence of the year due.

Due to the expected impact on our first quarter for coding uncertainty, we expect revenue in the first quarter of 2026 to be approximately flat to prior year.

Additionally, we expect a net loss in the first quarter due to our revenue expectation.

And forecasted year over year higher operating expenses.

We expect sequential improvement in both our revenue and net income throughout the year with the fourth quarter, having the highest levels of revenue and profit in the year.

Matt Osberg: What we've said, John, in the past is that, on average, 30% of our centers are academic centers. I think you can take that as a proxy for implanting surgeons.

Matthew Osberg: What we've said, John, in the past is that, on average, 30% of our centers are academic centers. I think you can take that as a proxy for implanting surgeons.

Finally in addition to revenue we plan to focus more of our communications on measures such as operating income operating margin and net income per diluted share as.

John Block: Okay. Thank you, guys.

Johnathan Block: Okay. Thank you, guys.

Operator: Thank you. And our next question comes from the line of Robbie Marcus from JPMorgan. Please go ahead.

As well as adjusted operating income adjusted operating margin and adjusted net income per diluted share.

Robbie Marcus: Oh, great. Thanks for taking the questions. Just one for me. Tim, I imagine the Q1 kind of flat is based on what you're seeing so far in the quarter. I guess, how do you get comfort with the 4 to 10, especially if the low end is a 50% cut with the 52 modifier? That would probably assume high single to close to double-digit for the rest of the year. How do you get comfortable with that, and why couldn't it be even lower?

Robert Marcus: Oh, great. Thanks for taking the questions. Just one for me. Tim, I imagine the Q1 kind of flat is based on what you're seeing so far in the quarter. I guess, how do you get comfort with the 4 to 10, especially if the low end is a 50% cut with the 52 modifier? That would probably assume high single to close to double-digit for the rest of the year. How do you get comfortable with that, and why couldn't it be even lower?

These changes more closely align our reporting with our medical device peer group and give our shareholders a better understanding of our recurring operations.

As we have not previously reported an adjusted operating income and adjusted operating margin. We have included a reconciliation of these measures for each quarter and the full year 2025 in our press release and Investor presentation.

In closing despite the dynamic reimbursement landscape. Our team remained focused on the fundamentals to drive strong performance in the fourth quarter of 2025 as.

As we look ahead to 2026, we will continue to emphasize execution and remain focused on what we can control.

Tim Herbert: Oh, gotcha. We ran our models, and we based what Ezgi just kind of commented on, the percent of our surgeons that are at academic or large facilities versus private practice, also looking at the timing of any implementation from both Medicare as well as commercial payers with the Dash 52 modifier. And so when we ran through our models, we believe that we're comfortable with the range. And it's our desire to, and we believe that if we can work with the MACs to minimize any reduction on that Dash 52 modifier, that we can be on the higher end of that range.

Timothy Herbert: Oh, gotcha. We ran our models, and we based what Ezgi just kind of commented on, the percent of our surgeons that are at academic or large facilities versus private practice, also looking at the timing of any implementation from both Medicare as well as commercial payers with the Dash 52 modifier. And so when we ran through our models, we believe that we're comfortable with the range. And it's our desire to, and we believe that if we can work with the MACs to minimize any reduction on that Dash 52 modifier, that we can be on the higher end of that range.

I'm excited to be part of the inspire team and excited about the opportunities we have to drive continued profitable growth and long term shareholder value.

With that our prepared remarks are concluded Selim you may now open the line for questions.

Thank you Sir.

As a reminder to ask a question you will need to press star one on your telephone to withdraw your question. Please press star one again.

We ask that you. Please limit your questions to no more than one question and one follow up.

Please standby, while we compile the Q&A roster.

And I show. Our first question comes from the line of Adam <unk> from Piper Sandler. Please go ahead.

Robbie Marcus: All right. I said one, but I got to follow up, and I also apologize, Matt. Welcome and congratulations. Look forward to working with you.

Robert Marcus: All right. I said one, but I got to follow up, and I also apologize, Matt. Welcome and congratulations. Look forward to working with you.

Hi, Tim Matt. Thank you for taking my questions and I apologize for the background noise.

Tim Herbert: Thanks, Robbie.

Timothy Herbert: Thanks, Robbie.

Robbie Marcus: Tim, just a quick follow-up to that. Does that guide 4 to 10 assume that something improves from here on out, or if everything stays the same, do you feel comfortable you could still hit that? And I'll leave it there. Thanks a lot.

Robert Marcus: Tim, just a quick follow-up to that. Does that guide 4 to 10 assume that something improves from here on out, or if everything stays the same, do you feel comfortable you could still hit that? And I'll leave it there. Thanks a lot.

I wanted to start on reimbursement.

The first question is just.

Around the.

The physician fee with Gen five using the <unk> code in the Dash 52, modifier and the 10% to 15% reduction is obviously.

Tim Herbert: Thank you. Well, I think, really, the Dash 52 really hasn't modified right now, hasn't really kicked in right now. And so I think that that's where the range is kind of based on what we believe the impact would be given the variable situations in there with the reimbursement from 10% to 50%. Obviously, the WISER's having a short-term impact in Q1 as we work through the logistics, but I think once we get more clarity, we'll get more comfort around this.

Timothy Herbert: Thank you. Well, I think, really, the Dash 52 really hasn't modified right now, hasn't really kicked in right now. And so I think that that's where the range is kind of based on what we believe the impact would be given the variable situations in there with the reimbursement from 10% to 50%. Obviously, the WISER's having a short-term impact in Q1 as we work through the logistics, but I think once we get more clarity, we'll get more comfort around this.

A wide range. So the question is when do you expect to have more clarity on exactly where that shakes out from the various payers. I think you said you have a strong case to come out closer to the 10% haircut. So maybe just elaborate on that and what can the company and the medical societies.

From an involvement standpoint in those discussions.

Hi, Thanks, very much I think from the first off the existing policies in place so the step number one.

Matt Osberg: Yeah. And Robbie, I'd just add to that. I think you heard in my prepared remarks, the bottom end of that range, is it more of the 50% reduction, and the top end, does it get closer to that 10% reduction? So it kind of depends on how things play out within that range as we see things in the next few months.

Matthew Osberg: Yeah. And Robbie, I'd just add to that. I think you heard in my prepared remarks, the bottom end of that range, is it more of the 50% reduction, and the top end, does it get closer to that 10% reduction? So it kind of depends on how things play out within that range as we see things in the next few months.

As for facilities and professionals to build to the current policy. So this.

Evolution to Dash 52 is going to be a little bit of a process as it kind of works forward number.

Two we want to be proactive working initially with the Max.

But then eventually also working with commercial payers to but initially with the Max we can describe the differences between inspire and inspire five the history using inspire five with CPT codes for <unk> eight in 2025 and.

Robbie Marcus: Thanks a lot.

Robert Marcus: Thanks a lot.

Operator: Thank you. Our next question comes from the line of Travis Steed from Bank of America Securities. Please go ahead.

Travis Steed: Hi, everybody. Just wanted to ask about the pathway to getting a new code. Is there the temporary code, miscellaneous code, that you'd go to while transitioning, and kind of what happens to the doc payment during that process and how you get comfort that the reimbursement of payments couldn't go lower with a new code?

In document.

Duction in the work performed.

And $6 582 to be able to get a lion alignment with the Max and more importantly to drive consistency. So yes, we expect that.

Tim Herbert: Oh, sure. Good question. I think the new code application process is well documented, and I think the application will go in in the near future, and that starts with the initial review with the AMA CPT Panel. And if we get that approved, then it moves on to the RUC process to be able to do the valuation of it. And as you say, that's a valuation process to weigh the time it takes to do the procedure, and they try to get an accurate measure. But in the meantime, we will run with 64582, so we won't be using any kind of miscellaneous code, any kind of temporary code, or any kind of category three code. Right now, our intention is to go to a new category one code through the full process, which includes a RUC.

Timothy Herbert: Oh, sure. Good question. I think the new code application process is well documented, and I think the application will go in in the near future, and that starts with the initial review with the AMA CPT Panel. And if we get that approved, then it moves on to the RUC process to be able to do the valuation of it. And as you say, that's a valuation process to weigh the time it takes to do the procedure, and they try to get an accurate measure. But in the meantime, we will run with 64582, so we won't be using any kind of miscellaneous code, any kind of temporary code, or any kind of category three code. Right now, our intention is to go to a new category one code through the full process, which includes a RUC.

And we believe that we're going to work with the societies and with the physician groups to make sure that we can drive that consistency. So they have predictability to be able to move forward with implants.

Okay. That's helpful.

And for the follow up.

I guess, maybe just talk about kind of the pathway forward here in terms of Gen. Five and I think you mentioned you're pursuing a dedicated code.

Key steps and timelines in that process.

Well I guess, one question that I have sorry to tag it on us.

Why not push the gen four system, a little bit more.

Aggressively just given that the reimbursement is I'll call it for.

$605 eight two until we really have.

Tim Herbert: With that, yes, there's always risk that the RUC would identify a lower payment from where 64582 is today.

Timothy Herbert: With that, yes, there's always risk that the RUC would identify a lower payment from where 64582 is today.

Gen. Five is kind of fully situated thank you for taking up I understand that.

Couple of things and.

That you talked about and that discussion number one we.

Travis Steed: Oh, helpful. And on kind of the ability to still kind of grow earnings and expand margins here with lower revenue growth, I'd assume it's probably a little harder to get leverage. And so just kind of thinking about the puts and takes and how your ability to continue to grow earnings in a slower revenue environment.

We do want to pursue a new CPT code for the simple reason there has been public discussion of that using a dash 52 modifier is not a long term solution that is really used for special cases.

So that's important for us to be able to address that.

Two if you look at the payers.

Tim Herbert: Thanks. I think we've had good cost discipline over the last several quarters. We'll continue to do that. Again, we're going to be working the reimbursement as a priority to minimize that payment. And if we minimize that payment, we get to the higher end of our range. Obviously, we're able to get leverage from those numbers. But we're going to be diligent with our spending, and as we learn more about that reduction, being able to be flexible.

Timothy Herbert: Thanks. I think we've had good cost discipline over the last several quarters. We'll continue to do that. Again, we're going to be working the reimbursement as a priority to minimize that payment. And if we minimize that payment, we get to the higher end of our range. Obviously, we're able to get leverage from those numbers. But we're going to be diligent with our spending, and as we learn more about that reduction, being able to be flexible.

We believe that that they are going to minimize that reduction.

Because if they're going to pay for and inspired by procedure over 50%.

A reduction that could be $350 compared to $700 for an inspire for us. So we think calmer heads will prevail. We will we believe that we can work.

With the payers and the societies to get alignment to be able to continue to offer.

Travis Steed: Good. Thank you.

Tim Herbert: Thanks, Travis.

Timothy Herbert: Thanks, Travis.

Inspire five because that is a product that has shown.

Operator: Thank you. And our next question comes from the line of David Rescott from Baird. Please go ahead.

<unk>, even as compared to inspire for it.

David Rescott: Oh, great. Thanks. I heard the comments around the initiatives to minimize this actual reduction applied to the professional fee, and wondering if there's any appetite to minimize, from your end, the impact that hospitals will see. I think pricing potentially could be a lever there. So wondering if, at all, that is something you're thinking about and generally how we should be thinking about device pricing in 2026?

That being said to the last part of your discussion.

We do have inventory evidenced firepower available to those physicians in those centers that wish to continue with that.

By submitting a CPT code now.

The timing of that is such that that would come online with a rock processed near January one 2028.

That is a two year period.

Important that was worked through minimized.

Reduction with <unk> 52 modifier.

But also have inspire for available.

Tim Herbert: Great. Thank you, David. I think, for pricing, I think, going back with 64582, it aligns pretty well with where our current pricing model is. So as it stands today, we believe we're going to just have consistent product pricing going forward, but that's certainly always something that we can review.

Timothy Herbert: Great. Thank you, David. I think, for pricing, I think, going back with 64582, it aligns pretty well with where our current pricing model is. So as it stands today, we believe we're going to just have consistent product pricing going forward, but that's certainly always something that we can review.

Thank you.

Thanks, Tom.

Thank you.

And I show. Our next question comes from the line of Jon Block from Stifel. Please go ahead.

Great. Thanks, guys good afternoon.

I guess I'm, just curious of the revision to the 2026 revenue guidance.

Specific to the new reimbursement landscape into the <unk> code modifier.

Bruce is what Youre seeing with the larger program because you did call out just some early findings there were some headwinds so.

David Rescott: Okay. And I think maybe midway through last year, when you lowered the 2025 guide, there was a comment about maybe some newer centers that were meant to be coming online or getting trained on the system were getting delayed. So wondering just how you're thinking about your installed base, we'll call it, of trained accounts on the Inspire system and how those progressed throughout 2025 and then how that impacts the ramp that you will see from a utilization perspective as some of the delays, we'll say, of newer centers coming online progressed throughout 2025. Thank you.

They're a way to delineate one versus the other or how do we think that through.

Hi, John I think the.

Wiser program as the government program to require prior authorizations.

And six pilot states now those six states are significant contributors procedures.

And so that's why we're working very diligently to solve the technical challenges with the portal that wiser has implemented and wiser program didn't allow any implants until January 15th because I think there is awareness if there would be challenges as they fired up the program. So.

Tim Herbert: Great. As you recall, David, back last year, we held back on opening centers in the first half of the year and wrapped that up more diligently in the second half of the year. And I think we're going to want to keep that rate moving forward. Obviously, it will have impact based on the reduction of the physician fee, but we want to be able to maintain that rate, if you will. So the centers that came on late in the year are brought on with the expectation to have strong utilization and be able to move forward.

Timothy Herbert: Great. As you recall, David, back last year, we held back on opening centers in the first half of the year and wrapped that up more diligently in the second half of the year. And I think we're going to want to keep that rate moving forward. Obviously, it will have impact based on the reduction of the physician fee, but we want to be able to maintain that rate, if you will. So the centers that came on late in the year are brought on with the expectation to have strong utilization and be able to move forward.

We do see.

The wiser will be able to get around and get our arms around that and work with our centers to be able to get the prior authorization once the port of the streamlined and we're able to work through the bugs so little bit more of just a Q1 <unk>.

Nominal with the wiser ones the principles okay.

Okay.

And for a revenue reduction though.

Putting uncertainty and the potential shift to the 52 modifier for the remainder of the year wiser is causing a little bit of disruption in those six states.

But the bigger issue is the updated reimbursement guidance.

Okay. No. That's helpful color. Thanks, I just wanted to that last point and make sure that was all embedded in the revision and then maybe just a quick follow up is and can you remind us in terms of the physicians like what percent are salary based what percent of our views and I'm just curious anecdotally any feedback you're getting it right for those that are build in.

Operator: Thank you. And our next question comes from the line of Larry Biegelsen from Wells Fargo. Please go ahead.

Robbie Marcus: Good afternoon. Thanks for taking the question. Welcome, Matt. Share two for me. Tim, could you talk about the clarification you got this week or within the last week? Who was it from? What did it say that led you to the conclusions you provided today? And I had one follow-up.

Lawrence Biegelsen: Good afternoon. Thanks for taking the question. Welcome, Matt. Share two for me. Tim, could you talk about the clarification you got this week or within the last week? Who was it from? What did it say that led you to the conclusions you provided today? And I had one follow-up.

Build and seem to modify or like what youre hearing from the field from physicians or from our reps. Thanks, guys sure I think the majority of our physicians are.

Tim Herbert: Really, we just have been, as we said before, we've been working with all the societies, all the agencies to be able to identify and gain clarity on the coding. We still contend that 64568 is a descriptor that most closely matches the Inspire 5 procedure. There's an economic discussion in there now that showed that that's not being supportive, especially with the number of procedures that we perform. So without getting too specific into the details of who went and how, we have got to the point that we know that 64582 will be the code going forward, including with that dash 52 modifier.

Timothy Herbert: Really, we just have been, as we said before, we've been working with all the societies, all the agencies to be able to identify and gain clarity on the coding. We still contend that 64568 is a descriptor that most closely matches the Inspire 5 procedure. There's an economic discussion in there now that showed that that's not being supportive, especially with the number of procedures that we perform. So without getting too specific into the details of who went and how, we have got to the point that we know that 64582 will be the code going forward, including with that dash 52 modifier.

<unk> practice any physician, who is associated with a large medical practice or a large hospital system would be salary base.

Physicians, who are part of an academic centers tend to be salary base. So it doesn't have the same level of impact with them, but there are also a lot of them are the key opinion leaders that helped drive this process. So they will be working with us in detail to try to minimize this reduction of the.

Of the reimbursement going forward.

What we've said John in the past is that on average 30% of our centers are academic centers.

Thank you can I take that as a proxy for implanting surgeons.

Robbie Marcus: Thanks. Tim, can you talk about competition? We all saw the Nyxoah Q4 results. There was probably some stocking there, but we do see a lot of posts on LinkedIn. So what are you assuming in the guidance from the impact of competition? And just secondly, do you know if they're going to have to use the 52 modifier or there'll be any difference in their reimbursement? Thank you.

Lawrence Biegelsen: Thanks. Tim, can you talk about competition? We all saw the Nyxoah Q4 results. There was probably some stocking there, but we do see a lot of posts on LinkedIn. So what are you assuming in the guidance from the impact of competition? And just secondly, do you know if they're going to have to use the 52 modifier or there'll be any difference in their reimbursement? Thank you.

Okay. Thank you guys.

Thank you.

And our next question comes from the line of Robbie Marcus from Jpmorgan. Please go ahead.

Oh, great. Thanks.

Thanks for taking my questions.

Just one for me.

Tim I imagine the first quarter guide of flat.

Tim Herbert: Thanks, Larry. I will not comment on their coding strategy. You'll have the opportunity, I'm sure, to ask both of those companies on their respective strategies. But as far as what we see out in the field, we have great confidence in our technology, especially the Inspire 5 and the data that we have seen both from Singapore and the limited market release and the early experience, and the safety profile has been strong. So yes, you're saying one-off opening of a center here and there, but we did build a little impact into our guide for competition, but we still believe that we're in a very strong position from an overall market.

Timothy Herbert: Thanks, Larry. I will not comment on their coding strategy. You'll have the opportunity, I'm sure, to ask both of those companies on their respective strategies. But as far as what we see out in the field, we have great confidence in our technology, especially the Inspire 5 and the data that we have seen both from Singapore and the limited market release and the early experience, and the safety profile has been strong. So yes, you're saying one-off opening of a center here and there, but we did build a little impact into our guide for competition, but we still believe that we're in a very strong position from an overall market.

<unk>.

Based on what Youre seeing so far in the quarter I guess, how do you get comfort with the four to 10, especially if the low end is a 50% cut with the $5 two modifier.

That would probably assume high single to close to double digit for the rest of the year, how do you get comfortable with that and why couldn't it be even lower.

Oh Gotcha, we ran our models and we base what is he just kind of comment today on the percent of our surgeons that are academic or large facilities versus private practice also looking at the timing of any implementation from both Medicare as well as <unk>.

Operator: Thank you.

Tim Herbert: Thanks, Larry.

Timothy Herbert: Thanks, Larry.

Actual payers with the Dash 52, modifier and so when we ran through our models, we believe that we're comfortable with with the range.

Operator: Thank you. And our next question comes from the line of Chris Pasquale from Nephron Research. Please go ahead.

Chris Pasquale: Thanks. Tim, could you talk about your expectation for commercial payers? You talked about providers billing with whatever the most recent guidance was. We obviously know the MACs have gone away from 68, but I would imagine that it varies on the commercial side. Do you expect some of the large payers to continue to allow cases to be submitted under 68, or do you expect them also to go to 82 with the modifier?

It's our desire to and we believe that if we can work with the Macs to.

Minimize any reduction on that.

Dash 50 to modify our debt.

We can be on the higher end of that range.

Alright, I said, one, but I've got a follow up and I also apologize Matt welcome and congratulations look forward to working with you.

Tim just a quick follow up to that.

Tim Herbert: No, I think currently, they do allow 64568. That is their policy, and we, of course, have to bill to their policy. Now, the difference, Chris, with commercial payers, including Medicare Advantage, remember, these are all prior authorized. And so when they're prior authorized, we do have the specific CPT code in the prior authorization, including per their policy. So it's a little bit of a lesser impact on commercial payers initially. But in time, we do believe that they will transition over to 64582 and likely to include the Dash 52 modifier. And at that point, we do have to work with them on their global contracts to make sure that they have the proper physician reimbursement.

Timothy Herbert: No, I think currently, they do allow 64568. That is their policy, and we, of course, have to bill to their policy. Now, the difference, Chris, with commercial payers, including Medicare Advantage, remember, these are all prior authorized. And so when they're prior authorized, we do have the specific CPT code in the prior authorization, including per their policy. So it's a little bit of a lesser impact on commercial payers initially. But in time, we do believe that they will transition over to 64582 and likely to include the Dash 52 modifier. And at that point, we do have to work with them on their global contracts to make sure that they have the proper physician reimbursement.

Does does that guide four to 10 assume that something improves from here on out or if everything stays the same do you feel comfortable you can still hit that and I'll leave it there. Thanks a lot. Thank you.

Thanks.

The <unk> 52, really Hasnt modified right now hasn't really kicked in right now and so I think that that's why the range is kind of based on what we believe the impact would be given that variable.

Situations in there with.

The reimbursement from 10% to 50% obviously the wife is having a short term impact in Q1, as we work through the logistics, but.

Once we get more clarity, we'll give more comfort around this and Ravi I'd just add to that I think you heard in my prepared remarks, the bottom end of that range is it more than a 50% reduction in the top and as you get closer to that 10% reduction. So it kind of depends on how things play out within that range over then as we see.

Chris Pasquale: Okay. And then your territory count is down by 40, I believe, from a year ago. How much of that was sort of intentional or rethinking of the US sales organization? And can you give us an update on the number of centers those reps are serving? Your rep-to-center ratio over time had stayed relatively stable. Did you expand your installed base in 2025? Any numbers there would be great.

See things in the next few months.

Okay.

Thanks, a lot.

Thank you.

And I show. Our next question comes from the line of Travis Steed from Bank of America Securities. Please go ahead.

Everybody just wanted to ask about the pathway to getting a new code.

The temporary code a miscellaneous code that you'd go to all transitioning and kind of what happens with the Doc payment.

Tim Herbert: Gotcha. It is intentional. We know that as we were ramping up territories, we were more strategic with the numbers that you quoted to more closely align with strategic territories to allow improved utilization and improved use of the team. But with each of those decisions, we also were adding field clinical reps so we can have the field clinical reps work one-on-one with the centers on case management and training, and we can have the territory managers working out front with referrals, adding centers, adding capacity, and keeping the commitment of the surgeons and the practices. So really kind of a focus on the role of the territory managers and an expanded role for the field clinical reps. So that is an intentional move that we made. And then.

Timothy Herbert: Gotcha. It is intentional. We know that as we were ramping up territories, we were more strategic with the numbers that you quoted to more closely align with strategic territories to allow improved utilization and improved use of the team. But with each of those decisions, we also were adding field clinical reps so we can have the field clinical reps work one-on-one with the centers on case management and training, and we can have the territory managers working out front with referrals, adding centers, adding capacity, and keeping the commitment of the surgeons and the practices. So really kind of a focus on the role of the territory managers and an expanded role for the field clinical reps. So that is an intentional move that we made. And then.

That process and how do you get comfort.

The reimbursement payments couldn't go lower with a new code.

Oh sure good question I think.

New code application process is well documented.

And I think the.

Application will go in the near future in that.

Starts with the initial review with the AMA CPT panel.

If we get that approved then it moves on to the rough process to be able to do that.

The valuation of it and as you say that the valuation process to weigh the time it takes to do the procedure.

And they try to get an accurate measure, but in the meantime, we will run with six or 582. So we won't be using any kind of miscellaneous code any kind of temporary code or any kind of category three code.

Right now our intention is to go to a new <unk>.

Chris Pasquale: The second question?

Tim Herbert: Generally, it's maybe five centers per territory.

Timothy Herbert: Generally, it's maybe five centers per territory.

Category, one code through the full process, which includes.

Rock and with that yes, there's always risks.

That the Rockwood identify.

Chris Pasquale: Okay. Thank you.

A lower payment from where it sits where 582 is today.

Tim Herbert: Thanks, Chris.

Timothy Herbert: Thanks, Chris.

Operator: Thank you. And our next question comes from the line of Anthony Petrone from Mizuho Americas. Please go ahead.

Okay helpful.

On the kind of the ability to kind of grow earnings and expand margins here with lower revenue growth I assume it's probably a little harder to get leverage.

Anthony Petrone: Thanks, and good evening, everyone. I'll stay on topic here. Maybe, Tim, you mentioned there in your prepared remarks, you're going to need a certain level of claims data to make the determination on whether you're at the lower or upper end of the 10% to 50% pro-fee cut. So I'm wondering, how much claims data do you need? Will you have that in hand by the end of Q1, or does that bleed into Q2? Because then it kind of sets up a moving target in terms of guidance. And then I'll have one quick follow-up.

So just kind of thinking about like the puts and takes and how your ability to continue to grow earnings.

Lower revenue environment.

Thanks, I think we've had good cost discipline over the last several quarters, we will continue to do that.

Again, we're going to be work in the reimbursement.

As a priority to minimize that payment and if we minimize that payment will get to the higher end of our range, obviously, we're able to get leverage from.

Tim Herbert: I think that it'd be nice to have some data by the time we get to the Q1 call, but it also is in regards to the policies getting updated with the MACs. And again, our leading statement is we need to bill to the most current policy, so we'll be working with the MACs, and some of those may not have the modifier in place yet. So we're going to watch that to see how we can pick up that data and minimize the reduction in that surgeon fee, but we may not have full exposure to that by the time we get to the Q1 call.

Timothy Herbert: I think that it'd be nice to have some data by the time we get to the Q1 call, but it also is in regards to the policies getting updated with the MACs. And again, our leading statement is we need to bill to the most current policy, so we'll be working with the MACs, and some of those may not have the modifier in place yet. So we're going to watch that to see how we can pick up that data and minimize the reduction in that surgeon fee, but we may not have full exposure to that by the time we get to the Q1 call.

Those numbers, but we're going to be diligent with our spending and as we learn more about the reduction being able to be flexible.

Okay. Thank you thanks.

Thanks Charles.

Thank you.

And I show. Our next question comes from the line of David <unk> from Baird. Please go ahead.

Great. Thanks.

The comments around.

The initiatives to minimize this.

Actual.

Reduction applied to the professional fee.

And wondering if.

Anthony Petrone: I guess, how many MACs already have the mapping to the 52 modifier? I think it's 3 of 7, and I guess you're waiting on the other 4 to actually have that 52 modifier in place?

There is any.

To minimize it.

From year end the impact.

The impact of hospitals.

We will see I think pricing potentially could be.

Tim Herbert: No, currently, Anthony, currently in the policies, none of the MACs have a mapping to a dash 52. There is some commentary with one of the MACs, but currently, we're billing 64582 with those MACs, and we're going to be working closely with them to communicate when or if they're going to implement the dash 52.

Timothy Herbert: No, currently, Anthony, currently in the policies, none of the MACs have a mapping to a dash 52. There is some commentary with one of the MACs, but currently, we're billing 64582 with those MACs, and we're going to be working closely with them to communicate when or if they're going to implement the dash 52.

Never there so wondering if at all of that is.

Something youre thinking about and generally how we should be thinking about device pricing in 2006.

Great. Thank you David I think for for pricing I think we are.

Going back with 64582 airlines pretty well with where our current pricing model is.

Anthony Petrone: And then, real quick, just to follow up, would be, you have some evidence here, initial observation, that there could be a smaller reduction based on the surgical skill. You had that in the prepared comments. It almost reads like there's a dual path here that you'll pursue a new coding structure on one path, but then sort of show evidence here that the reduction should be lower. Is that the right way to think about it, or is this just a one-track path that you're pursuing a new code? Thanks.

So as it stands today that we believe we're going to just have consistent product pricing going forward, but that certainly is something that is something that we can review.

Okay and I think.

Maybe midway through.

Last year.

When you lowered the 25 guide there was a comment about maybe some some newer centers that were meant to be coming online are getting trained on the system.

Tim Herbert: No, you are absolutely correct. It's a dual path. There's a short-term address to current situation with 64582 and when the dash 52 modifier gets implemented, and then long-term, it is go to a whole new Category 1 CPT code. But that code would be in place 1 January 2028.

Timothy Herbert: No, you are absolutely correct. It's a dual path. There's a short-term address to current situation with 64582 and when the dash 52 modifier gets implemented, and then long-term, it is go to a whole new Category 1 CPT code. But that code would be in place 1 January 2028.

We're getting delayed.

I'm wondering just how youre thinking about your installed base, we'll call. It of trained accounts on the inspire system and how those progressed throughout 2025, and then how that impacts the rash.

Anthony Petrone: Thanks.

Ramp that you will see from utilization perspective, as some of the delays will say of newer centers coming online progress throughout 2025. Thank you great.

Operator: Thank you. And our next question comes from the line of Richard Newitter from Truist. Please go ahead.

Tim Herbert: Hi. Thanks for taking the questions. Maybe just the first. I guess it was asked earlier as to whether or not there was a CPT3 code, maybe a dual track while you pursue your CPT1. And I'm curious as to why you're not pursuing that. The reason being, I would have thought that at least would have allowed you to pivot away from any modifier requirements, and you get to go back to a stable, appropriate payment system, at least during 2027. So just help me understand why that isn't a viable or worthwhile path while you're pursuing the CPT1 as well that doesn't go into effect into 2028, and then have a follow-up. Yep. I understand, Richard. Thanks for that. A category three code, if applied for and awarded, could take effect on 1 January 2027. And the word I would remove from your description is the word stable.

Richard Newitter: Hi. Thanks for taking the questions. Maybe just the first. I guess it was asked earlier as to whether or not there was a CPT3 code, maybe a dual track while you pursue your CPT1. And I'm curious as to why you're not pursuing that. The reason being, I would have thought that at least would have allowed you to pivot away from any modifier requirements, and you get to go back to a stable, appropriate payment system, at least during 2027. So just help me understand why that isn't a viable or worthwhile path while you're pursuing the CPT1 as well that doesn't go into effect into 2028, and then have a follow-up. Yep. I understand, Richard. Thanks for that. A category three code, if applied for and awarded, could take effect on 1 January 2027. And the word I would remove from your description is the word stable.

You recall, David back last year, we held back on opening incentives in the first half of the year and wrap that up more diligently in the second half of the year and I think we're going to want to keep that rate moving forward.

Obviously, it will have impact based on the reduction of the physician fee, but we want to be able to may.

Maintain that rate if you will but so are the centers that came on late in the year.

Are brought on.

With the expectation.

Have.

<unk> have strong utilization and be able to move forward.

Thank you.

And I show. Our next question comes from the line of Larry Big Olson from Wells Fargo. Please go ahead.

Hi, good afternoon, Thanks for taking the question welcome Matt.

There are two for me Tim could you talk about the clarification you got this week or within the last week, who was it from what does it say that led you to the conclusions you provided today and I had one follow up.

Tim Herbert: What we would enter into at that point is an environment where we would not have defined reimbursement, and that would be variable across the board, introducing a new category three code similar to if we were to use a miscellaneous code. So we made the choice to stay the course with a category one code long-term. We know that we have clarity on facility reimbursement, that if we went to a category three code, we would not have that clarity. That's the most important part because that's how we get paid, and the facilities get the reimbursement from those centers. We're looking at a range of reimbursement for the professional fee, and again, we're targeting to minimize that risk in the short term that will carry us through 2027.

Timothy Herbert: What we would enter into at that point is an environment where we would not have defined reimbursement, and that would be variable across the board, introducing a new category three code similar to if we were to use a miscellaneous code. So we made the choice to stay the course with a category one code long-term. We know that we have clarity on facility reimbursement, that if we went to a category three code, we would not have that clarity. That's the most important part because that's how we get paid, and the facilities get the reimbursement from those centers. We're looking at a range of reimbursement for the professional fee, and again, we're targeting to minimize that risk in the short term that will carry us through 2027.

Really we just have been as we've said before we've been working with other societies all of the agencies.

To be able to.

Identify and gain clarity on the coding.

We still contend that 64568 is a descriptor that most closely matches the inspire five procedure.

There is a economic discussion in there now that that show that that's not being supportive and especially with the number of procedures that we've performed so without getting too specific into the details of who went on how we have.

Got to the point that we know that <unk> two will.

We will be in the code going forward, including with <unk> 52 modifier.

Robbie Marcus: Okay. Thanks for that. And then just did you guys provide a US/OUS breakout? I may have just missed it. I couldn't find it in the press release.

Richard Newitter: Okay. Thanks for that. And then just did you guys provide a US/OUS breakout? I may have just missed it. I couldn't find it in the press release.

Thanks, Tim can you talk about competition, we all saw the Knicks.

Our Q4 results there was probably some stocking there, but we do see a lot of posts on Linkedin. So what are you assuming in the guidance from the impact of competition and and just secondly, do you know if they're going to have to use the 52 modifier where there'll be any difference.

Tim Herbert: Where are the numbers?

Timothy Herbert: Where are the numbers?

Tim Herbert: It should be in the press release, but I'll have to check. It'll be in the K when we file later this week if it's not in the press release. Next question.

Timothy Herbert: It should be in the press release, but I'll have to check. It'll be in the K when we file later this week if it's not in the press release. Next question.

In their reimbursement thank you. Thanks.

Thanks, Larry.

I will not comment on their coding strategy that youll have the opportunity I'm sure to ask both of those companies on their respective.

Operator: Thank you. And our next question comes from the line of Shagun Singh from RBC. Please go ahead.

Strategies, but as far as what we see out in the field, we have great confidence in our technology, especially of the inspire five and the data that we have seen both in Singapore and the limited market release and the early experience and the safety profile has been strong so, yes, youre, saying, a one off opening of us.

Ezgi Yagci: Thank you so much for taking the question. Just one from me. Do you think we could see a broader negative impact from this WISER program? It does focus on wasteful and inappropriate service reduction that HNS is now a part of. Thank you.

Shagun Singh: Thank you so much for taking the question. Just one from me. Do you think we could see a broader negative impact from this WISER program? It does focus on wasteful and inappropriate service reduction that HNS is now a part of. Thank you.

Tim Herbert: Yeah. I think that we have a long history working with Medicare, and there's a parallel program with RAC audits. I think you maybe heard that term, where there are third parties that will come into facilities, and they will audit their Medicare cases to make sure that they have the proper documentation, and those patients that have received treatment are on-label. So over the years, we've been very diligent at training all centers to make sure that they're prepared for RAC audits. And so while the WISER program has a little bit of a challenge getting started, we believe we will be in good shape because we've already had facilities that are very diligent in making sure they have proper documentation and proper patient selection to make sure that they are on-label candidates for Inspire.

Timothy Herbert: Yeah. I think that we have a long history working with Medicare, and there's a parallel program with RAC audits. I think you maybe heard that term, where there are third parties that will come into facilities, and they will audit their Medicare cases to make sure that they have the proper documentation, and those patients that have received treatment are on-label. So over the years, we've been very diligent at training all centers to make sure that they're prepared for RAC audits. And so while the WISER program has a little bit of a challenge getting started, we believe we will be in good shape because we've already had facilities that are very diligent in making sure they have proper documentation and proper patient selection to make sure that they are on-label candidates for Inspire.

Center here and there, but we did build.

A little impact into our guide for competition, but we still believe that we're in a very strong position.

From an overall market.

Thank you.

Right.

Thank you.

And I show. Our next question comes from the line of Chris Pasquale from Nephron Research. Please go ahead.

Thanks, Tim could you talk about your expectation for commercial payers, you talked about provider's billing with whatever the most recent guidance was we obviously know the Max.

<unk> has gone away from six years, but I would imagine that it varies on the commercial side do you expect some of the large payers to continue to allow.

Cases to be submitted under six eight or do you expect them also to go to <unk> with a modifier.

So I think currently they do allow us six or 506 eight that is there.

Policy and we of course have to build to their policy now the difference Chris with.

Operator: Thank you. One moment while we compile the Q&As. And I share our next question comes from the line of Danielle Antalffy from UBS. Please go ahead.

Commercial payers, including.

Medicare advantage remember these are all prior authorized and so when their prior authorized we do have the specific CPT code and the prior authorization including per their policy.

It's a little bit of a lessor.

Impact on commercial payers initially, but in time, we do believe that they will transition over to six or 502 and likely to.

Tim Herbert: Danielle, are you there? I think she fell off the line now, so. All right. We'll see if she comes back on. So let's go to the next question.

Timothy Herbert: Danielle, are you there? I think she fell off the line now, so. All right. We'll see if she comes back on. So let's go to the next question.

Include the Das 52, modifier and at that point, we do have to work with them.

Global contracts to make sure that they have the proper.

Physician reimbursement.

Operator: Thank you. And our next question comes from the line of Michael Sarcone from Jefferies. Please go ahead.

Okay.

And then your territory count is down by 40, I believe from a year ago.

How much of that was.

Michael Sarcone: Hey. Good afternoon, and thanks for taking the questions. Really just one from me. Maybe you can give us the latest and greatest on what you're seeing in terms of GLP-1s and what, if any, headwinds you have baked into guide.

Sort of intentional or rethinking of the U S sales organization and can you give us an update on the number of centers. Those reps are serving your your rep to center ratio over time had stayed relatively stable did you expand your install base and 25 any numbers there would be great got.

Tim Herbert: Absolutely. We do put a little basis into the guide if we track. As we talked before, we had our survey from last year, and we look to continue to expand that knowledge. But we do know patients are trying GLP-1s for multiple reasons. The high BMI patients, we think that's a really important step because they can lose weight and qualify for Inspire, and the data is coming in a little bit to see what percentage actually resolves their sleep apnea. So we still believe that GLP-1s will be a tailwind for us, and we work with our centers to make sure that they are taking care of their patients, keeping in contact with the patients, and if appropriate, putting them on a GLP-1 to lose weight with a secondary benefit, which is a reduction in sleep apnea.

Timothy Herbert: Absolutely. We do put a little basis into the guide if we track. As we talked before, we had our survey from last year, and we look to continue to expand that knowledge. But we do know patients are trying GLP-1s for multiple reasons. The high BMI patients, we think that's a really important step because they can lose weight and qualify for Inspire, and the data is coming in a little bit to see what percentage actually resolves their sleep apnea. So we still believe that GLP-1s will be a tailwind for us, and we work with our centers to make sure that they are taking care of their patients, keeping in contact with the patients, and if appropriate, putting them on a GLP-1 to lose weight with a secondary benefit, which is a reduction in sleep apnea.

Gotcha.

It is intentional we know that as well.

There are ramping up territories, we were more strategic with the numbers that you've quoted.

To more closely align with our strategic territories to allow.

Improved utilization.

And improved <unk>.

So the team, but with each of those decisions. We also are adding skilled clinical reps. So we can out of the field clinical reps worked one on one with the centers that case management and training and we can have the territory managers working out front with referrals, adding centers, adding capacity and keeping that.

Commitment of the surgeons and the practices, so really kind of a focus on the role of the territory managers and an expanded role.

Michael Sarcone: Thanks, Tim.

Tim Herbert: Good. Thank you.

Timothy Herbert: Good. Thank you.

For the field clinical reps so yeah. It is intentional.

Operator: Thank you. And I share our next question comes from the line of Danielle Antalffy from UBS. Please go ahead.

Move that we made.

And then the second question again.

Generally they generally as maybe five centers per territory.

Ezgi Yagci: Hi. Is this working now?

Shagun Singh: Hi. Is this working now?

Tim Herbert: Yes, it is, Danielle.

Timothy Herbert: Yes, it is, Danielle.

Ezgi Yagci: Okay. Sorry. I don't know what's going on today, but technology is not my friend, so I am sorry about that. Thank you guys so much for taking the question. Appreciate a lot of this call has been about reimbursement and impact there, but I'm actually curious about, because this seems like an unfortunate situation to me where you've got what seems like a growing funnel of patients that want to get this procedure, and now if you don't have doctors that are as willing to do it, I'm just curious how you guys are working with whether it's your centers, the patients, to manage these patients who are coming into the system but maybe are finding this bottleneck of physicians that actually want to treat the patients because it feels like the front of the funnel is not necessarily slowing. So I'm just sorry.

Shagun Singh: Okay. Sorry. I don't know what's going on today, but technology is not my friend, so I am sorry about that. Thank you guys so much for taking the question. Appreciate a lot of this call has been about reimbursement and impact there, but I'm actually curious about, because this seems like an unfortunate situation to me where you've got what seems like a growing funnel of patients that want to get this procedure, and now if you don't have doctors that are as willing to do it, I'm just curious how you guys are working with whether it's your centers, the patients, to manage these patients who are coming into the system but maybe are finding this bottleneck of physicians that actually want to treat the patients because it feels like the front of the funnel is not necessarily slowing. So I'm just sorry.

Okay. Thank you.

Yes.

Thank you.

And I show. Our next question comes from the line of Anthony Petrone from Mizuho Americas. Please go ahead.

Thanks, and good evening, everyone I'll stay on topic here, maybe Tim you mentioned there in your prepared remarks.

Youre going to need a certain level of claims data to make the determination on whether youre at the lower upper end of the 10% to 50%.

Profi cut so I'm wondering like how much claims data do you need.

You have that in hand by the end of <unk> or does that bleed into <unk>. Because then it kind of sets up a moving target in terms of guidance and then I'll have one quick follow up.

Ezgi Yagci: That's a kind of convoluted question, but I'm just curious if you can comment on that?

Shagun Singh: That's a kind of convoluted question, but I'm just curious if you can comment on that?

I think that it would be nice to have some data by the time, we get to the Q1 call. But it also is in regards to the policy is getting updated with the Macs and again, our leading statement is we need to build to the most current policy. So we'll be working with the Macs.

Tim Herbert: Got it. Okay. So what drives us at Inspire is Inspire 5 is a rock-solid product, and we show the clinical evidence to it. We know the benefits that patients can have because we have clinical data both from Singapore as well as from our new product launch in the US. And so that's what drives the employees here in that we know that we have an ability to help patients with their disease. Secondly, that we do know there's variability in the professional fee reduction with any Dash 52 Modifier. So as that transitions into the program, with the strength of the Inspire 5 data and with the experience of having 10,000 procedures performed with Inspire 5 in the year 2025, we have very good experience to work with the payers to minimize that reduction, but we need to put that in play.

Timothy Herbert: Got it. Okay. So what drives us at Inspire is Inspire 5 is a rock-solid product, and we show the clinical evidence to it. We know the benefits that patients can have because we have clinical data both from Singapore as well as from our new product launch in the US. And so that's what drives the employees here in that we know that we have an ability to help patients with their disease. Secondly, that we do know there's variability in the professional fee reduction with any Dash 52 Modifier. So as that transitions into the program, with the strength of the Inspire 5 data and with the experience of having 10,000 procedures performed with Inspire 5 in the year 2025, we have very good experience to work with the payers to minimize that reduction, but we need to put that in play.

Some of those may not have the modifier in place yet so we're going to watch that to see.

How we can pick up that data and to minimize the reduction in that.

Surgeon fee, but we may not have full exposure to that by the time, we get to the Q1 call.

I guess, how many Max already have the mapping to the 52 modifier or is it I think it's three of seven.

And I guess, you're waiting on the other Florida.

To actually have that 50, commodified space that Anthony currently and the policies none of the Macs have a map into a dash 52.

There is some commentary with one of the Max but currently.

Billings were 582 with those maxson will going to be working closely with them to communicate.

Tim Herbert: And even though we do have Inspire 4 units available for those centers, we will continue to push 5. That being said, going back a little bit to a previous question, we do know centers that are able to continue to move forward, and so we will focus and lean in on those centers while we work with payers at some of the private practice to minimize the impact from the professional fee reductions. So yeah. So Danielle, we keep up the fight. And what works is we have strength on the front end of the funnel, and we got a really good product to be able to work with.

Timothy Herbert: And even though we do have Inspire 4 units available for those centers, we will continue to push 5. That being said, going back a little bit to a previous question, we do know centers that are able to continue to move forward, and so we will focus and lean in on those centers while we work with payers at some of the private practice to minimize the impact from the professional fee reductions. So yeah. So Danielle, we keep up the fight. And what works is we have strength on the front end of the funnel, and we got a really good product to be able to work with.

When or if theyre going to implement the <unk> 52.

And then real quick just a follow up would be you have some evidence here initial observation that there should there could be a smaller reduction.

On the surgical skill you had that in the prepared comments it almost reads like Theres a dual path here that you will pursue a new coding structure on one path.

Then sort of show evidence here that the reduction should be lower is that the right way to think about it.

Or is this just a one track past that you are pursuing a new code.

Ezgi Yagci: Yeah. Okay. I mean, is there a scenario where you have centers that are willing to take more patients? I mean, I guess I'm just trying to understand what happens to the patient that gets referred to a physician, and they're like, "Oh, we're not doing that anymore because we don't get paid enough." I mean, I know that wouldn't be the conversation, actually, but where does the patient go?

Shagun Singh: Yeah. Okay. I mean, is there a scenario where you have centers that are willing to take more patients? I mean, I guess I'm just trying to understand what happens to the patient that gets referred to a physician, and they're like, "Oh, we're not doing that anymore because we don't get paid enough." I mean, I know that wouldn't be the conversation, actually, but where does the patient go?

You're absolutely correct. We are it's a dual path, there's a short term address.

Address the current situation with fixed for five years to when the Das 50 to modify our gets implemented and that long term. It is going to a whole new category, one CPT code, but that.

Currently in place January one 2028.

Tim Herbert: That's a valid statement because what's clear here with the clarity, we got clarity of coding, and we got clarity in the facility reimbursement. The reimbursement for the facility actually increased $1,000 from last year. The reimbursement is strong at facilities. In those centers where we may be a salary-based surgery, we believe that we can bring more patients to those facilities if some of the private practice physicians are more challenged based on the economics. But we're going to work all avenues very diligently.

Timothy Herbert: That's a valid statement because what's clear here with the clarity, we got clarity of coding, and we got clarity in the facility reimbursement. The reimbursement for the facility actually increased $1,000 from last year. The reimbursement is strong at facilities. In those centers where we may be a salary-based surgery, we believe that we can bring more patients to those facilities if some of the private practice physicians are more challenged based on the economics. But we're going to work all avenues very diligently.

Thanks.

Yeah.

Thank you.

I show. Our next question comes from the line of Richard New Winter from tourists. Please go ahead.

Hi, Thanks for taking the questions.

Maybe just the first I guess it was asked earlier as to whether or not there was a CPT III code, maybe a dual track, while you're pursuing CPT, one and I'm curious as to why youre not pursuing that the reason being I would've thought that at least would have allowed you to pivot away from any modifier.

<unk> requirement and you get to go.

Go back to a stable appropriate payment system at least during 2027. So just help me understand why that isn't.

Ezgi Yagci: Okay. Thank you so much.

Shagun Singh: Okay. Thank you so much.

Operator: Thank you. And I share our next question comes from the line of Danielle Matkowskyj from Evercore ISI. Please go ahead.

A viable or worthwhile path, while you're pursuing CPT, one as well that doesn't go into effect into 2028, and then I have a follow up.

Tim Herbert: Oh, no. Danielle, did we lose you?

Timothy Herbert: Oh, no. Danielle, did we lose you?

I understand Richard Thanks for that.

Operator: If you have your phone on mute, please unmute you.

Danielle Matkowskyj: Hey.

A category III code, if applied for and awarded.

Operator: Sorry. Can you hear me all right?

Danielle Matkowskyj: Yep. Yep.

Operator: Sorry about that. Sorry about that. Thanks for taking my questions. I had two. The first is on the math. I'm curious the exercise you're running on the physician fee and how that could impact the business. Is it mostly survey work, or how do you do this? I guess I'm just curious, with the revenue guidance, there's a 6% delta between the low versus high end compared to, on the physician fee, 10% to 50%, a potential 40% delta. So I guess how do you run the exercise of figuring out what physician fee cut leads to what type of impact on your business?

Danielle Matkowskyj: Sorry about that. Sorry about that. Thanks for taking my questions. I had two. The first is on the math. I'm curious the exercise you're running on the physician fee and how that could impact the business. Is it mostly survey work, or how do you do this? I guess I'm just curious, with the revenue guidance, there's a 6% delta between the low versus high end compared to, on the physician fee, 10% to 50%, a potential 40% delta. So I guess how do you run the exercise of figuring out what physician fee cut leads to what type of impact on your business?

Could take effect January one 2027.

And the word I would remove from your description is the word stable.

And what we would enter into at that point is is that.

Where we would not have defined reimbursement and that would be variable across the board introducing a new category III code similar to if we were to use a miscellaneous code. So we made the choice to.

Tim Herbert: Sure. A little bit continuation and expansion of the last question. And Danielle, so we look at this saying we know there are centers that will remain consistent, and we may be able to drive more patients to those centers because, as an example, the surgeon may be salary-based, if you will. Academic centers aren't affected so much by the professional fee because they're salary-based, so we can continue working in those areas. In some of the ASCs, if a surgeon is a partial owner, they are less dependent on the professional fee than they are the set-up service fee. So there's avenues in there that we can continue to pursue.

Timothy Herbert: Sure. A little bit continuation and expansion of the last question. And Danielle, so we look at this saying we know there are centers that will remain consistent, and we may be able to drive more patients to those centers because, as an example, the surgeon may be salary-based, if you will. Academic centers aren't affected so much by the professional fee because they're salary-based, so we can continue working in those areas. In some of the ASCs, if a surgeon is a partial owner, they are less dependent on the professional fee than they are the set-up service fee. So there's avenues in there that we can continue to pursue.

Stay the course with a category one code long term.

We know that we have clarity on facility reimbursement that if we went to a category III code, we would not have that clarity. That's the most important part because thats, how we get paid.

And the facilities.

Get the reimbursement from those centers and we're looking at a range of reimbursement for the professional fee and again, we're targeting.

To minimize that risk in the short term that will carry us through a 27.

Okay. Thanks for that and then just did you guys provide a U S. O U S. Breakout I may have just missed it I couldn't find it in the press release.

Tim Herbert: The area that the surgeons that are at the greatest challenge are those private practice physicians who get their operating rights or privileges and get OR time from a large hospital, but they get paid on their own professional fee. Those are the surgeons that are at the most risk because we're asking them to do a procedure that doesn't pay them for their time spent on it. Now, that's why we have good argument and rationale to justify a lower reduction from the professional fee to be able to support those physicians. So it's not just a straight math equation across a reduction. The professional fee does not have the same impact across all centers.

Timothy Herbert: The area that the surgeons that are at the greatest challenge are those private practice physicians who get their operating rights or privileges and get OR time from a large hospital, but they get paid on their own professional fee. Those are the surgeons that are at the most risk because we're asking them to do a procedure that doesn't pay them for their time spent on it. Now, that's why we have good argument and rationale to justify a lower reduction from the professional fee to be able to support those physicians. So it's not just a straight math equation across a reduction. The professional fee does not have the same impact across all centers.

But the numbers should be in the press release.

Okay.

It'll be in the K when we file.

I don't know if that's right.

Okay.

Next question.

<unk>.

Thank you.

And I show our next question.

Comes from the line of Shagong. Thank from RBC. Please go ahead.

Thank you so much for taking the question just one for me do you think we could see a broader negative impact from this visor program. It does focus on these tool and appropriate service reduction.

And that <unk> is now part of thank you.

Matt Osberg: The other thing I'd add to that, Danielle, is we called out that there is an impact on Q1 just for some of the coding uncertainty that we've seen that's compounding the range as well, and making that a little bit wider.

Matthew Osberg: The other thing I'd add to that, Danielle, is we called out that there is an impact on Q1 just for some of the coding uncertainty that we've seen that's compounding the range as well, and making that a little bit wider.

I think that we have a long history.

Working with Medicare and there is there is a.

Parallel.

Program with rack audits I think you've heard that term.

Operator: Got it. That's helpful. And then my follow-up, as I look at the high end of the revenue guidance, can you help me understand what the cadence would look like in that scenario? Is it fair to assume we'd be exiting the year at something like mid-teens% growth? And would that contemplate some sort of catch-up? As you said, some of the patients might be redirected to other centers. Or can you just help us understand how we get to the high end of the guidance?

Danielle Matkowskyj: Got it. That's helpful. And then my follow-up, as I look at the high end of the revenue guidance, can you help me understand what the cadence would look like in that scenario? Is it fair to assume we'd be exiting the year at something like mid-teens% growth? And would that contemplate some sort of catch-up? As you said, some of the patients might be redirected to other centers. Or can you just help us understand how we get to the high end of the guidance?

Where there are third parties that will come in two facilities and they will audit their Medicare cases to make sure that they have the proper documentation to add those patients that have received treatment are on label. So over the years, we've been very diligent at training all centers to make sure that they are prepared for.

Our rack audits and so while the wiser program has a little bit of a challenge getting started we believe we will be in good shape because we've already.

Tim Herbert: Yeah. I think you described it pretty good. Maybe we describe it more as comfort. And I think as we get additional clarity and it minimizes the risk of reimbursement of what they're going to be paid once we have data, then we can get back into leaning in harder. So we would expect acceleration in the second half of the year. And we believe that if we can get the data, that we'll be able to show improved reimbursement, and then the surgeons will be more comfortable making the determination to commit more of their time and more of their operating room time for Inspire.

Timothy Herbert: Yeah. I think you described it pretty good. Maybe we describe it more as comfort. And I think as we get additional clarity and it minimizes the risk of reimbursement of what they're going to be paid once we have data, then we can get back into leaning in harder. So we would expect acceleration in the second half of the year. And we believe that if we can get the data, that we'll be able to show improved reimbursement, and then the surgeons will be more comfortable making the determination to commit more of their time and more of their operating room time for Inspire.

Have facilities that are very diligent in making sure they have proper documentation and proper patient selection to make sure that they are.

Our label candidates for inspire.

Thank you.

One moment, while we compile the Q&A.

Operator: Helpful. Thank you.

Danielle Matkowskyj: Helpful. Thank you.

Tim Herbert: Thanks, Danielle.

Timothy Herbert: Thanks, Danielle.

Operator: Thank you. And I share our next question comes from the line of Patrick Wood from Morgan Stanley. Please go ahead.

And our next question comes from the line of Danielle <unk> from UBS. Please go ahead.

Matt Osberg: Beautiful. Thanks. Just two quick ones from me. First one, I know you guys don't guide to it, but just a sense for OUS. I understand why we've all been focused, obviously, on the US at the moment, but the relative guide going forward and the sense of the contribution in 2026 that you guys expect from OUS to be helpful.

Patrick Wood: Beautiful. Thanks. Just two quick ones from me. First one, I know you guys don't guide to it, but just a sense for OUS. I understand why we've all been focused, obviously, on the US at the moment, but the relative guide going forward and the sense of the contribution in 2026 that you guys expect from OUS to be helpful.

Yeah, Hey are you there.

I think she.

I think she fell off the line so I will see if he comes back on.

Tim Herbert: Thank you. I know that. Go ahead. You want to jump in?

Timothy Herbert: Thank you. I know that. Go ahead. You want to jump in?

Let's go to the next question.

Ezgi Yagci: So I actually have the numbers for Rich's earlier question. To answer your question, Patrick, 4 to 5% OUS contribution roughly for the full year 2026. Q4, US revenue was $256.9 million, 95% of revenue OUS, $12.1 million, and full year was $872.1 million US, $39.9 million OUS.

Shagun Singh: So I actually have the numbers for Rich's earlier question. To answer your question, Patrick, 4 to 5% OUS contribution roughly for the full year 2026. Q4, US revenue was $256.9 million, 95% of revenue OUS, $12.1 million, and full year was $872.1 million US, $39.9 million OUS.

Thank you.

And I show our next question.

Comes from the line of Michael Sarcone Me from Jefferies. Please go ahead.

Hey, good afternoon, and thanks for taking the question.

Really just one for me maybe you can give us the latest and greatest on what Youre seeing in terms of GOP ones and what if any headwinds you have baked into guide.

Absolutely, we do put a little basis into the guide if we <unk>.

Matt Osberg: Amazing. Thank you. And then just really quickly, I know we sort of touched on the commitment to moving to Inspire 5, but if you wanted to switch back a little more durably to Inspire 4, let's say for a little longer period of time, do you have things like the contract set up, the manufacturing supply chain bits enabling you to do that if you chose to go down that pathway, or is there something preventing you from doing that?

Matthew Osberg: Amazing. Thank you. And then just really quickly, I know we sort of touched on the commitment to moving to Inspire 5, but if you wanted to switch back a little more durably to Inspire 4, let's say for a little longer period of time, do you have things like the contract set up, the manufacturing supply chain bits enabling you to do that if you chose to go down that pathway, or is there something preventing you from doing that?

Track and as we talked before we had our survey from last year than we are.

Look to continue to expand that knowledge.

But we do know patients are trying.

GOP wants for multiple reasons.

The high BMI patients, we think that's a really important step because they can lose weight and.

Tim Herbert: Well, I think that as you looked at our inventory numbers on the tables that you see, we do carry a significant inventory, and the majority of that is Inspire 4. So we have the ability to carry forward with 4, and in the time, it'll take us to get to the new CPT code. But we don't believe centers in the US will really go back to Inspire 4. I think once physicians and centers experience Inspire 5, they are comfortable with the procedure, not putting in the pressure-sensing lead, the reduced work to do the Inspire 5 procedure, and then the outcomes associated with Inspire 5. I think people are going to be careful about going back to Inspire 4. But that being said, there were centers that are high volume that were doing Inspire 4 late in the year.

Timothy Herbert: Well, I think that as you looked at our inventory numbers on the tables that you see, we do carry a significant inventory, and the majority of that is Inspire 4. So we have the ability to carry forward with 4, and in the time, it'll take us to get to the new CPT code. But we don't believe centers in the US will really go back to Inspire 4. I think once physicians and centers experience Inspire 5, they are comfortable with the procedure, not putting in the pressure-sensing lead, the reduced work to do the Inspire 5 procedure, and then the outcomes associated with Inspire 5. I think people are going to be careful about going back to Inspire 4. But that being said, there were centers that are high volume that were doing Inspire 4 late in the year.

Qualify for inspire and the data is coming in a little bit to see what percentage actually resolves are as good or bad news. So we still believe that <unk> will be.

Tailwind for us and.

We worked with those centers to make sure that they are.

Taking care of their patients keeping in contact with the patients and if appropriate putting them on a GOP wanda to lose weight with a secondary benefit.

Which is a reduction in sleep apnea.

Thanks, Tim.

Thank you.

And I show. Our next question comes from the line of Danielle <unk> from UBS. Please go ahead.

Hi is this working now yes. It is okay, sorry, I don't know what's going on today, but technology is not my friends. So I am sorry about that thank you guys. So much for taking the question.

Tim Herbert: To answer your other question, our ability to go back and fire up the line and restart making piece parts associated with Inspire 4, it does get a little bit limited on parts obsolescence as we transition to 5. So we do have inventory to carry us forward, but yeah, we want to transition over to full production on Inspire 5.

Timothy Herbert: To answer your other question, our ability to go back and fire up the line and restart making piece parts associated with Inspire 4, it does get a little bit limited on parts obsolescence as we transition to 5. So we do have inventory to carry us forward, but yeah, we want to transition over to full production on Inspire 5.

Appreciate a lot of this call has been about reimbursement and the impact there, but I'm actually curious about.

It seems like an unfortunate situation to me, where you've got what seems like a growing funnel of patients that want to get this procedure and now if you don't have doctors that are willing to do and I'm. Just curious how you guys are working with whether it's your centers. The patients can manage these patients who are <unk>.

Matt Osberg: Totally got it. Thanks, guys.

Patrick Wood: Totally got it. Thanks, guys.

Tim Herbert: Thank you.

Timothy Herbert: Thank you.

Operator: Thank you. And I share our next question comes from the line of Brett Fishbin from KeyBanc Capital Markets. Please go ahead.

Coming into the system, but maybe are finding this bottleneck of physicians that actually want to treat the patients because it feels like the front of the funnel is not necessarily slowing so I'm sorry, that's like a kind of convoluted question, but I'm just curious if you can comment on that.

Brett Fishbin: All right, guys. Thanks for taking the questions, and welcome, Matt. Just maybe switching gears a little bit here. Just on the Q4 earnings number, I think maybe a little bit lost. You guys grew EPS over 40%, and it was really well above expectations and the implied guidance coming out of last quarter. So curious where you saw incremental expense leverage relative to what you were planning on with the full-year guidance coming out of Q3.

Got it okay. So what drives us at inspire inspire five is a rock solid product.

We show the clinical evidence to it and we know the benefits that patients can have because we have clinical data both from Singapore as well as from our.

Matt Osberg: Yeah. I'll start, and as you might add in here. So I think what you saw in the fourth quarter was a beat in expectations kind of throughout the P&L. Revenue was better than we expected. Gross profit margin was better than we expected as we had a higher percentage of Inspire 5. And then as Tim said in his prepared remarks, we did have good cost discipline. We were thoughtful about our spending and spent less than we had anticipated. So compile all that. Obviously, we've got the significant tax benefit, but even you adjust that out, all of those contributed to the beat in Q4.

Matthew Osberg: Yeah. I'll start, and as you might add in here. So I think what you saw in the fourth quarter was a beat in expectations kind of throughout the P&L. Revenue was better than we expected. Gross profit margin was better than we expected as we had a higher percentage of Inspire 5. And then as Tim said in his prepared remarks, we did have good cost discipline. We were thoughtful about our spending and spent less than we had anticipated. So compile all that. Obviously, we've got the significant tax benefit, but even you adjust that out, all of those contributed to the beat in Q4.

New product launch in the U S.

And so that's what drives the employees here and that we know that we have an ability to help patients with their disease.

Leave that we do know there's variability in the professional fee reduction with any data 52 modifiers, so as that transitions into the program with the strength of the inspire five data and with the experience of having 10000 press.

Procedures performed with inspire five in the year 2025, we have very good experience to work with the payers to minimize that reduction, but we need to put that in play.

Brett Fishbin: All right. Cool. Then just one follow-up on expenses for 2026. Just curious how you're thinking about overall direct-to-consumer marketing this year relative to 2025. I'm sure as the year progresses, there may be some change based on the reimbursement status, but just in terms of a base case, how you're thinking about that at this point, and then where you're targeting the advertising in 2026 compared to 2025. Thank you.

Even though we do have an inspired about four units.

Available for those centers, we will continue to push five that being said going back a little bit to a previous question. We do know centers that are able to continue to move forward and so we will.

I'll focus on lean into those centers and while we work with payers at some of the private practice too.

Ezgi Yagci: Brett, thanks for the question. Our current thinking is that it'll still be flat to slightly up, but we're going to take a look at that as we go forward here. Advertising mix will be mostly similar to what you've seen in the past, but I think greater focus on social media and more of those types of platforms. We'll still continue to run our TV advertising, but more focus on social media and digital.

Shagun Singh: Brett, thanks for the question. Our current thinking is that it'll still be flat to slightly up, but we're going to take a look at that as we go forward here. Advertising mix will be mostly similar to what you've seen in the past, but I think greater focus on social media and more of those types of platforms. We'll still continue to run our TV advertising, but more focus on social media and digital.

To minimize the impact from the professional fee.

Reductions.

So yes, so Danielle we keep up the fight and what work because we have strength on the front end of the funnel and we got a really good product to be able to work with.

Yeah. Okay. I mean is there a scenario where you have some centers that are willing to take more patients I mean, I guess I'm just trying to understand what happens to the patients that gets referred to a physician and they're like Oh, we're not doing that anymore. Because we don't get paid enough I mean, I know that wouldn't be the conversation actually but.

Matt Osberg: I think Tim said it earlier. We know we've got a wide range of outcomes on the top line. We're going to be thoughtful and flexible about our spending and just make sure that we're tracking that based on where we see revenue coming in.

Matthew Osberg: I think Tim said it earlier. We know we've got a wide range of outcomes on the top line. We're going to be thoughtful and flexible about our spending and just make sure that we're tracking that based on where we see revenue coming in.

And where does the patient count.

That's a valid statement because what was clear here with the clarity we got clarity of coding and we got clarity in the facility reimbursement and the reimbursement for the facility.

Brett Fishbin: All right. Awesome. Thank you so much.

Operator: Thank you. And our last question in the queue comes from the line of Mike Kratky from Leerink Partners. Please go ahead.

Actually increased to $1000 from last year, so reimbursement is strong at facilities.

Mike Kratky: Hi, everyone. Thanks for fitting me in. So for instances where the MACs announced the removal of the 64568 code for OSA back in December and then implants subsequently happened in January, can you quantify what portion of the claims you've seen so far come in have been rejected versus not?

Michael Kratky: Hi, everyone. Thanks for fitting me in. So for instances where the MACs announced the removal of the 64568 code for OSA back in December and then implants subsequently happened in January, can you quantify what portion of the claims you've seen so far come in have been rejected versus not?

And those centers, where we may be a salary based surgery, we believe that we can.

Bring more patients to those facilities.

If some of the private practice.

Physicians are more challenged based on the economics, but we're going to be we're going to work.

<unk> is very diligently.

Tim Herbert: Yes. Little unknown. We have had procedures paid on 64568. We've had procedures paid on 64582. We've had some procedures actually get denied and require clarification. We've had notifications of centers receiving notification of payment at 64568 only to be followed up with an adjustment to the payment level of 64582. So bottom line, it's all over the place. And I think now this is the good, this is the good news as we close the call here is we have the clarity of the code, and so facilities and ASCs know what the reimbursement's going to be. And it's no longer the unknown if it's going to be the new reimbursement's going to be to the improved 64582 with a $1,000 increase. So again, so I think having clarity of the code, having consistency with reimbursement at the centers is really the solid thing.

Timothy Herbert: Yes. Little unknown. We have had procedures paid on 64568. We've had procedures paid on 64582. We've had some procedures actually get denied and require clarification. We've had notifications of centers receiving notification of payment at 64568 only to be followed up with an adjustment to the payment level of 64582. So bottom line, it's all over the place. And I think now this is the good, this is the good news as we close the call here is we have the clarity of the code, and so facilities and ASCs know what the reimbursement's going to be. And it's no longer the unknown if it's going to be the new reimbursement's going to be to the improved 64582 with a $1,000 increase. So again, so I think having clarity of the code, having consistency with reimbursement at the centers is really the solid thing.

Okay. Thank you so much.

Thank you.

And I show. Our next question comes from the line of Daniel Markowitz from Evercore ISI. Please go ahead.

Hello, Daniel did we lose you.

You have your phone on mute. Thank you mutual sorry can you hear me, yes, yes, sorry about that sorry about that thanks for taking my questions. I had two the first is on the math I'm curious to exercise youre running on the physician fee and how that could impact the business is it mostly survey work or how do you do this I guess I'm just curious with the revenue guidance, there's a 6%.

Delta between the low versus high end compared to on the physician fee, 10% to 50% of potential 40% Delta. So I guess, how do you run the exercise of figuring out what physician fee leads to what type of impact on your business.

Sure there will be continuation.

And expansion of the last question.

So we look at this thing.

We know there are centers that will remain consistent and we may be able to drive more patients to those centers because as an example.

Tim Herbert: Then our next step is to really lock down on minimizing the professional fee. We think that we're going to have a good audience, specifically with the MACs, to discuss that with us.

Timothy Herbert: Then our next step is to really lock down on minimizing the professional fee. We think that we're going to have a good audience, specifically with the MACs, to discuss that with us.

Jim maybe salary based.

You will academic centers arent affected so much by the professional fee because they are salary based so we can continue working in those areas in some of the ASC is if a surgeon is a partial owner they are less dependent on the professional fee. Then they are the set of service fee. So theres app.

Mike Kratky: Understood. Thanks, Tim.

Michael Kratky: Understood. Thanks, Tim.

Tim Herbert: Very good. Thanks very much. Hey, as always, I'm 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 the patient remains unmatched and is the most important element of our success. I 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 US, Europe, and Asia. For all you on the call, we really appreciate your continued interest and support of Inspire and look forward to providing you with further updates in the months ahead. So thanks very much, and Dillon, back to you.

Timothy Herbert: Very good. Thanks very much. Hey, as always, I'm 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 the patient remains unmatched and is the most important element of our success. I 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 US, Europe, and Asia. For all you on the call, we really appreciate your continued interest and support of Inspire and look forward to providing you with further updates in the months ahead. So thanks very much, and Dillon, back to you.

And use in there that we can continue to pursue in that area that the searches that are at the greatest challenge are those private practice physicians, who will get their operating rights or privileges and get all of our time from a large hospital, but they get paid on their own professional fee those are the surgeons.

At our at the most risk because we're asking them to do a procedure that doesn't pay them for their time spent on it.

That's why we have good argument and rationale to justify a lower reduction from the professional fee to be able to support those physicians.

Operator: Thank you, sir. This concludes today's conference call. You may now disconnect.

Not just the straight math equation across a reduction of the professional fee does that have the same impact impact across all centers.

Other thing I would add to that Daniel's we called out that there is an impact on Q1, just for some of the coding uncertainty that we've seen that the compounding the the range as well and making that a little bit wider.

Got it that's helpful. And then my follow up as I look at the high end of the revenue guidance can you help me understand what the cadence will look like in that scenario is it fair to assume we would be exiting the year, it's something like mid teens percent growth and then would that contemplate some sort of catch up as you said some of the patients might be.

Redirected to other centers or can you just help us understand how we get to the high end of the guidance.

I think you described it pretty good maybe we describe it more comfort and I think as we get additional clarity and it minimizes the risk of reimbursement on what theyre going to be paid once we have data.

Then we can get back into leaning in harder so we would expect.

Acceleration in the second half of the year and we believe that if we can get the data that we'll be able to show improved reimbursement and then we'll have the surgeons will be more comfortable.

Making the determination to commit more of their time and more of their operating room time for inspire.

Helpful. Thank you thanks Dana.

Thank you.

And I show. Our next question comes from the line of Patrick Wood from Morgan Stanley. Please go ahead.

Beautiful. Thanks, just two quick ones from me.

First one.

I know you guys don't guide to it but just a sense for O U S. I understand why we've all been focused obviously on the you asked a moment, but the relative guide going forward in the sense of the contribution of <unk> 26 that you guys expect from <unk> be helpful.

Thank you I don't know that.

Go ahead, Jeff will actually have the numbers for Rich's earlier question to answer your question.

Patrick 4% to 5% U S contribution roughly for the full year 2026.

For you.

<unk> revenue was $256 9 million, 95% of revenue our U S $12 1 million and full year was $872 1 million USD $39 nine O U S growth.

Amazing. Thank you and then just really quickly I know, we sort of touched on the commitment to moving to inspire five but if you wanted to switch back a little more durably to inspire for let's say for a little longer period of time do you have things like the contract.

The amount of factoring.

Fly chain, that's enabling you to do that if you chose to go down that path way or is that something preventing you from doing that well I think that as you've looked at our inventory numbers on.

The tables that Youll see we do carry a significant inventory the majority of that is inspire for so we have the ability to carry forward with four and.

In the time, it will take us to get to the.

New CPT code, but we don't believe <unk> centers in the U S will really go back to inspire fourth I think once.

Physicians and centers experience inspire five they are comfortable with the procedure and not putting in the <unk>.

Pressure sensing lead to reduced work to do the inspire procedure and then the outcomes associated with inspire five I think people are going to be careful about going back to inspire for it but that being said there were centers that are high volume that we're doing inspire lately inspired for late in the year to answer your other question our ability to.

Go back.

And and and fire up the line and we start making piece parts associated inspire for it does get a little bit limited on parts obsolescence.

As we transition to five so we do have inventory to carry us forward, but yes, we want to transition over to full production on inspire five.

Got it thanks guys.

Thank you.

Our next question comes from the line of Brent <unk> from Keybanc capital markets. Please go ahead.

Alright, guys. Thanks for taking the questions and welcome Matt just maybe switching gears a little bit here just on the fourth quarter earnings number I think maybe a little bit loss of you guys grew EPS over 40% and it was really well above expectations and the implied guidance coming out of last quarter. So curious where you saw incremental expense levers.

Relative to what you were planning on.

Your guidance coming out of <unk>.

Yeah, I'll start and as you might add in here. So I think what you saw in the fourth quarter was a beaten expectations kind of throughout the P&L revenue was better than we expected gross profit margin was better than we expected as we had a higher percentage of inspire five and then.

As Jim said in his prepared remarks, we did have good cost discipline, we are thoughtful about our spending and spent less than we had.

Anticipated so can.

Pile all of that.

We've got the significant tax benefit, but even when you adjust that out.

All of those contributed to the beat in Q4.

Alright, cool and then just one follow up on expenses for 2026, just curious like how you are thinking about overall direct to consumer marketing this year relative to 2025 I'm sure.

Is there may be some change based on the reimbursement status, but just in terms of like a base case, how youre thinking about that at this point and then like where you are targeting advertising in 2026 compared to 25. Thank you.

Alright. Thanks for the question our current thinking is that it will still be flat to slightly up but where we're going to take a look at that as we go forward here.

Advertising mix will be mostly similar to what you've seen in the past, but I think greater focus on.

On social media and you know more of those types of platforms will still continue to run our TV advertising, but not more focus on social media and digital and I think Tim said it earlier.

We've got a wide range of outcomes on the top line, we're going to be thoughtful and flexible about our spending and just make sure that we're tracking that based on where we see revenue coming in.

Awesome. Thank you so much.

Thank you.

And I'm sorry, one last question in the queue comes from the line of Mike Kratky from Leerink Partners. Please go ahead.

Hi, everyone. Thanks for fitting me in so for instances, where the Max announced the removal. The next 4568 code for OSA back in December and then implants. Subsequently happened in January can you quantify what portion of the claims you have seen so far come in have been rejected versus not.

Ah yes.

Lola known we have had procedures paid six or five success, we've had with aegis paid at 64582.

Had some procedures actually get denied and require clarification, we've had notifications of.

Centers, receiving notification of came in at 64568 only to be followed up with an adjustment to the payment level of six or 582. So bottom line. It's all over the place and I think now this is the good. This is the good news is we closed.

The call here is we have the clarity of the code and so facilities in E&C no. What the reimbursement is going to be and it's no longer. The unknown is if it's going to be the.

New reimbursement is going to be to the.

Improved.

Six of our 582 with a $1000.

Increase so again, so I think having clarity of the code having consistency with reimbursement at the centers is really the solid thing and then our next step is to really locked down on minimizing the professional fee.

We think that we're going to have.

A good audience with specifically with the Max.

Two.

Discuss that with us.

Understood. Thanks, Tim.

Very good.

Thanks, very much hey, as always I am grateful to the growing team.

A dedicated inspire employees for their enthusiasm hard work and continued motivation to achieve successful and consistent patient outcomes the team's commitment.

To the patient remains unmatched in its most important element of our success I wish to thank all of our employees as well as the health care teams for their continued effort because we remain focused on further expanding our business in the U S Europe and Asia for all you on the call. We really appreciate your continued interest in <unk>.

Apart of inspire and look forward to providing you with further updates in the months ahead.

Thanks, very much in demand back to you. Thank.

Thank you Sir This concludes today's conference call.

You may now disconnect.

Okay.

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