Cover Page
Cover Page - shares | 6 Months Ended | |
Jun. 30, 2023 | Jul. 24, 2023 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2023 | |
Document Transition Report | false | |
Entity File Number | 001-38468 | |
Entity Registrant Name | Inspire Medical Systems, Inc. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 26-1377674 | |
Entity Address, Address Line One | 5500 Wayzata Blvd. | |
Entity Address, Address Line Two | Suite 1600 | |
Entity Address, City or Town | Golden Valley | |
Entity Address, State or Province | MN | |
Entity Address, Postal Zip Code | 55416 | |
City Area Code | 844 | |
Local Phone Number | 672-4357 | |
Title of 12(b) Security | Common Stock, $0.001 par value per share | |
Trading Symbol | INSP | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding (in shares) | 29,335,731 | |
Entity Central Index Key | 0001609550 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q2 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Current assets: | ||
Cash and cash equivalents | $ 467,051 | $ 441,592 |
Investments, short-term | 0 | 9,821 |
Accounts receivable, net of allowance for credit losses of $917 and $36, respectively | 63,500 | 61,228 |
Inventories, net | 20,840 | 11,886 |
Prepaid expenses and other current assets | 8,685 | 5,505 |
Total current assets | 560,076 | 530,032 |
Property and equipment, net | 25,217 | 17,249 |
Operating lease right-of-use assets | 21,368 | 6,880 |
Other non-current assets | 11,585 | 10,715 |
Total assets | 618,246 | 564,876 |
Current liabilities: | ||
Accounts payable | 39,961 | 26,847 |
Accrued expenses | 26,726 | 34,339 |
Total current liabilities | 66,687 | 61,186 |
Operating lease liabilities, non-current portion | 22,054 | 7,536 |
Other non-current liabilities | 146 | 146 |
Total liabilities | 88,887 | 68,868 |
Stockholders' equity: | ||
Preferred Stock, $0.001 par value, 10,000,000 shares authorized; no shares issued and outstanding | 0 | 0 |
Common Stock, $0.001 par value per share; 200,000,000 shares authorized; 29,326,179 and 29,008,368 issued and outstanding at June 30, 2023 and December 31, 2022, respectively | 29 | 29 |
Additional paid-in capital | 880,873 | 820,335 |
Accumulated other comprehensive income (loss) | 103 | (86) |
Accumulated deficit | (351,646) | (324,270) |
Total stockholders' equity | 529,359 | 496,008 |
Total liabilities and stockholders' equity | $ 618,246 | $ 564,876 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Statement of Financial Position [Abstract] | ||
Allowance for credit loss | $ 917 | $ 36 |
Preferred shares, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred shares, authorized (in shares) | 10,000,000 | 10,000,000 |
Preferred shares, issued (in shares) | 0 | 0 |
Preferred shares, outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, authorized (in shares) | 200,000,000 | 200,000,000 |
Common stock, issued (in shares) | 29,326,179 | 29,008,368 |
Common stock, outstanding (in shares) | 29,326,179 | 29,008,368 |
Consolidated Statements of Oper
Consolidated Statements of Operations and Comprehensive Loss (unaudited) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Income Statement [Abstract] | ||||
Revenue | $ 151,092 | $ 91,386 | $ 278,989 | $ 160,768 |
Cost of goods sold | 24,252 | 14,173 | 44,140 | 24,177 |
Gross profit | 126,840 | 77,213 | 234,849 | 136,591 |
Operating expenses: | ||||
Research and development | 30,821 | 14,534 | 56,340 | 26,404 |
Selling, general and administrative | 112,618 | 76,686 | 214,606 | 140,250 |
Total operating expenses | 143,439 | 91,220 | 270,946 | 166,654 |
Operating loss | (16,599) | (14,007) | (36,097) | (30,063) |
Other expense (income): | ||||
Interest and dividend income | (4,922) | (297) | (9,195) | (331) |
Interest expense | 0 | 494 | 0 | 1,021 |
Other expense, net | 61 | 144 | 44 | 189 |
Total other (income) expense | (4,861) | 341 | (9,151) | 879 |
Loss before income taxes | (11,738) | (14,348) | (26,946) | (30,942) |
Income taxes | 214 | 142 | 430 | 242 |
Net loss | (11,952) | (14,490) | (27,376) | (31,184) |
Other comprehensive loss: | ||||
Foreign currency translation gain | 72 | 42 | 177 | 42 |
Unrealized (loss) gain on investments | (1) | (45) | 12 | (188) |
Total comprehensive loss | $ (11,881) | $ (14,493) | $ (27,187) | $ (31,330) |
Net loss per share, basic (in dollars per share) | $ (0.41) | $ (0.53) | $ (0.94) | $ (1.13) |
Net loss per share, diluted (in dollars per share) | $ (0.41) | $ (0.53) | $ (0.94) | $ (1.13) |
Weighted average common shares used to compute net loss per share, basic (in shares) | 29,229,922 | 27,594,874 | 29,160,323 | 27,556,286 |
Weighted average common shares used to compute net loss per share, diluted (in shares) | 29,229,922 | 27,594,874 | 29,160,323 | 27,556,286 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity (unaudited) - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-In Capital | Accumulated Other Comprehensive (Loss) Income | Accumulated Deficit |
Beginning balance (in shares) at Dec. 31, 2021 | 27,416,106 | ||||
Beginning balance at Dec. 31, 2021 | $ 229,048 | $ 27 | $ 508,465 | $ (55) | $ (279,389) |
Stockholders' Equity [Roll Forward] | |||||
Stock options exercised (in shares) | 151,186 | ||||
Stock options exercised | 3,087 | $ 1 | 3,086 | ||
Vesting of restricted stock units (in shares) | 569 | ||||
Withholding taxes on net share settlement of restricted stock units (in shares) | (205) | ||||
Withholding taxes on net share settlement of restricted stock units | (43) | (43) | |||
Issuance of common stock (in shares) | 348 | ||||
Issuance of common stock | 79 | 79 | |||
Stock-based compensation expense | 9,721 | 9,721 | |||
Other comprehensive income (loss) | (143) | (143) | |||
Net loss | (16,694) | (16,694) | |||
Ending balance (in shares) at Mar. 31, 2022 | 27,568,004 | ||||
Ending balance at Mar. 31, 2022 | 225,055 | $ 28 | 521,308 | (198) | (296,083) |
Stockholders' Equity [Roll Forward] | |||||
Stock options exercised (in shares) | 52,383 | ||||
Stock options exercised | 1,549 | 1,549 | |||
Issuance of common stock (in shares) | 314 | ||||
Issuance of common stock | 80 | 80 | |||
Issuance of common stock for employee stock purchase plan (in shares) | 13,743 | ||||
Issuance of common stock for employee stock purchase plan | 2,134 | 2,134 | |||
Stock-based compensation expense | 12,659 | 12,659 | |||
Other comprehensive income (loss) | (3) | (3) | |||
Net loss | (14,490) | (14,490) | |||
Ending balance (in shares) at Jun. 30, 2022 | 27,634,444 | ||||
Ending balance at Jun. 30, 2022 | $ 226,984 | $ 28 | 537,730 | (201) | (310,573) |
Beginning balance (in shares) at Dec. 31, 2022 | 29,008,368 | 29,008,368 | |||
Beginning balance at Dec. 31, 2022 | $ 496,008 | $ 29 | 820,335 | (86) | (324,270) |
Stockholders' Equity [Roll Forward] | |||||
Stock options exercised (in shares) | 142,167 | ||||
Stock options exercised | 7,377 | $ 0 | 7,377 | ||
Vesting of restricted stock units (in shares) | 18,852 | ||||
Withholding taxes on net share settlement of restricted stock units (in shares) | (6,750) | ||||
Withholding taxes on net share settlement of restricted stock units | (1,746) | (1,746) | |||
Issuance of common stock (in shares) | 364 | ||||
Issuance of common stock | 90 | 90 | |||
Stock-based compensation expense | 18,225 | 18,225 | |||
Other comprehensive income (loss) | 118 | 118 | |||
Net loss | (15,424) | (15,424) | |||
Ending balance (in shares) at Mar. 31, 2023 | 29,163,001 | ||||
Ending balance at Mar. 31, 2023 | $ 504,648 | $ 29 | 844,281 | 32 | (339,694) |
Beginning balance (in shares) at Dec. 31, 2022 | 29,008,368 | 29,008,368 | |||
Beginning balance at Dec. 31, 2022 | $ 496,008 | $ 29 | 820,335 | (86) | (324,270) |
Stockholders' Equity [Roll Forward] | |||||
Stock options exercised (in shares) | 285,860 | ||||
Ending balance (in shares) at Jun. 30, 2023 | 29,326,179 | 29,326,179 | |||
Ending balance at Jun. 30, 2023 | $ 529,359 | $ 29 | 880,873 | 103 | (351,646) |
Beginning balance (in shares) at Mar. 31, 2023 | 29,163,001 | ||||
Beginning balance at Mar. 31, 2023 | 504,648 | $ 29 | 844,281 | 32 | (339,694) |
Stockholders' Equity [Roll Forward] | |||||
Stock options exercised (in shares) | 143,693 | ||||
Stock options exercised | 13,113 | 13,113 | |||
Vesting of restricted stock units (in shares) | 9,349 | ||||
Withholding taxes on net share settlement of restricted stock units (in shares) | (3,237) | ||||
Withholding taxes on net share settlement of restricted stock units | (971) | (971) | |||
Issuance of common stock (in shares) | 390 | ||||
Issuance of common stock | 91 | 91 | |||
Issuance of common stock for employee stock purchase plan (in shares) | 12,983 | ||||
Issuance of common stock for employee stock purchase plan | 2,792 | 2,792 | |||
Stock-based compensation expense | 21,567 | 21,567 | |||
Other comprehensive income (loss) | 71 | 71 | |||
Net loss | $ (11,952) | (11,952) | |||
Ending balance (in shares) at Jun. 30, 2023 | 29,326,179 | 29,326,179 | |||
Ending balance at Jun. 30, 2023 | $ 529,359 | $ 29 | $ 880,873 | $ 103 | $ (351,646) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (unaudited) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Operating activities | ||
Net loss | $ (27,376) | $ (31,184) |
Adjustments to reconcile net loss: | ||
Depreciation and amortization | 1,252 | 776 |
Non-cash lease expense | 593 | 519 |
Stock-based compensation expense | 39,792 | 22,380 |
Non-cash stock issuance for services rendered | 181 | 159 |
Other, net | 880 | 53 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (3,116) | (6,207) |
Inventories | (8,954) | (4,625) |
Prepaid expenses and other current assets | (3,791) | (1,917) |
Accounts payable | 11,782 | 3,755 |
Accrued expenses and other liabilities | (7,495) | (2,411) |
Net cash provided by (used in) operating activities | 3,748 | (18,702) |
Investing activities | ||
Purchases of property and equipment | (8,608) | (2,634) |
Proceeds from sales or maturities of investments | 10,000 | 0 |
Purchases of strategic investments | (250) | (10,250) |
Net cash provided by (used in) investing activities | 1,142 | (12,884) |
Financing activities | ||
Payments on long-term debt obligation | 0 | (3,063) |
Proceeds from the exercise of stock options | 20,490 | 4,635 |
Taxes paid on net share settlement of restricted stock units | (2,717) | (43) |
Proceeds from issuance of common stock from employee stock purchase plan | 2,792 | 2,134 |
Net cash provided by financing activities | 20,565 | 3,663 |
Effect of exchange rate on cash | 4 | 26 |
Increase (decrease) in cash and cash equivalents | 25,459 | (27,897) |
Cash and cash equivalents at beginning of period | 441,592 | 214,467 |
Cash and cash equivalents at end of period | 467,051 | 186,570 |
Supplemental cash flow information | ||
Cash paid for interest | 0 | 922 |
Property and equipment included in accounts payable and accrued expenses | $ 2,678 | $ 1,212 |
Organization
Organization | 6 Months Ended |
Jun. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization | OrganizationDescription of BusinessInspire Medical Systems, Inc. is a medical technology company focused on the development and commercialization of innovative, minimally invasive solutions for patients with obstructive sleep apnea ("OSA"). Our proprietary Inspire system is the first and only United States ("U.S.") Food and Drug Administration ("FDA") approved neurostimulation technology that provides a safe and effective treatment for moderate to severe OSA. Inspire therapy received premarket approval ("PMA") from the FDA in 2014 and has been commercially available in certain European markets since 2011. Japan's Ministry of Health, Labour and Welfare ("MLHW") approved Inspire therapy to treat moderate to severe OSA in 2018 and was formally added to the Japan National Health Insurance Payment Listing in 2021. In 2020, the Australian Therapeutic Goods Administration approved Inspire therapy to treat moderate to severe OSA, and we are currently seeking reimbursement coverage in Australia. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2023 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Basis of Presentation The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the U.S. (“GAAP”) for interim financial reporting and as required by the rules and regulations of the Securities and Exchange Commission (“SEC”). Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (including those which are normal and recurring) considered necessary for a fair presentation of the interim financial information have been included. When preparing financial statements in conformity with GAAP, we must make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, expenses, and related disclosures at the date of the financial statements. Actual results could differ from those estimates. Additionally, the results of operations for the interim periods are not necessarily indicative of the operating results for the full fiscal year or any future periods. All intercompany accounts and transactions have been eliminated in consolidation. For a complete discussion of our significant accounting policies and other information, the unaudited consolidated financial statements and notes thereto should be read in conjunction with the audited financial statements included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022. Follow-On Public Offering On August 15, 2022, we completed a follow-on offering that included our offer and sale of 1,150,000 shares of common stock at a public offering price of $215.00 per share. We received net proceeds of $243.8 million after deducting underwriting discounts, commissions, and offering expenses. Cash and Cash Equivalents We consider all highly liquid securities, readily convertible to cash, that have original maturities of 90 days or less from the date of purchase to be cash equivalents. The carrying amount reported in the consolidated balance sheets for cash is cost, which approximates fair value. Foreign Currency Our functional and reporting currency is the U.S. dollar. Our subsidiaries have functional currency in Euro and Yen. The consolidated financial statements are translated to U.S. dollars. Non-monetary assets and liabilities denominated in foreign currencies are translated at rates of exchange in effect at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are translated using the exchange rate prevailing at the balance sheet date. Sales and expenses denominated in foreign currencies are translated at exchange rates in effect on the date of the transaction. Foreign currency transaction gains and losses and the impacts of foreign currency remeasurement are recognized in other expense, net in the consolidated statements of operations and comprehensive loss. For both of the three-month periods ended June 30, 2023 and 2022, we recognized $0.1 million of gains, net. For the six-month periods ended June 30, 2023 and 2022, we recognized $0.0 million and $0.2 million of gains, net, respectively. Any unrealized gains and losses due to translation adjustments are included in accumulated other comprehensive income (loss) within stockholders' equity in the consolidated balance sheets. We had $0.1 million of unrecognized gain in our accumulated other comprehensive income (loss) balance as of both June 30, 2023 and December 31, 2022. Investments At December 31, 2022, our investments consisted of U.S. government securities. Investments are reported at their estimated fair market values which are based on quoted, active or inactive market prices when available. Any unrealized gains and losses due to interest rate fluctuations and other external factors are reported as a separate component of accumulated other comprehensive loss within stockholders' equity. We had $0.0 million and $0.2 million of unrecognized loss in our accumulated other comprehensive income (loss) balance at June 30, 2023 and December 31, 2022, respectively. Any realized gains and losses are calculated on the specific identification method and reported net in other expense, net in the consolidated statements of operations and comprehensive loss. For the three and six months ended June 30, 2023 and 2022, we recognized $0 of realized losses, net. We reassess our estimated credit losses on investments each reporting period. U.S. government securities and cash equivalents are under a "zero-loss exception" for credit losses, meaning no credit loss risk calculation is necessary on those instruments due to the exceptionally low rate of default, which continues to decrease as the securities approach maturity, which for us is no longer than one year. We record changes in the allowance for credit losses for available-for-sale debt securities with a corresponding adjustment in credit loss expense on the consolidated statement of operations and comprehensive loss. No reversal of a previously recorded allowance for credit losses may be made to an amount below zero. The total allowance for credit losses was $0 at both June 30, 2023 and December 31, 2022. Fair Value of Financial Instruments We measure certain financial assets and liabilities at fair value on a recurring basis, including cash equivalents and investments. Fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or a liability. A three-tier fair value hierarchy is established as a basis for considering such assumptions and for inputs used in the valuation methodologies in measuring fair value: Level 1: Observable inputs, such as quoted prices (unadjusted) for identical assets or liabilities in active markets. Level 2: Inputs other than quoted prices in active markets for identical assets and liabilities that are observable either directly or indirectly for substantially the full term of the asset or liability. Level 3: Unobservable inputs that are supported by little or no market activities, which would require us to develop our own assumptions. We use the methods and assumptions described below in determining the fair value of our financial instruments. Money market funds: Fair values of money market funds are based on quoted market prices in active markets. These are included as Level 1 measurements in the tables below. U.S. government securities: Consists of U.S. government Treasury bills with original maturities of less than one year and are based on quoted prices in active markets. These are included as Level 1 measurements in the table below. The following tables set forth by level within the fair value hierarchy our assets that are measured on a recurring basis and reported at fair value as of June 30, 2023 and December 31, 2022. Assets are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. Fair Value Measurements as of June 30, 2023 Estimated Level 1 Level 2 Level 3 Cash equivalents: Money market funds $ 419,942 $ 419,942 $ — $ — Total cash equivalents 419,942 419,942 — — Investments: Total investments — — — — Total cash equivalents and investments $ 419,942 $ 419,942 $ — $ — Fair Value Measurements as of December 31, 2022 Estimated Level 1 Level 2 Level 3 Cash equivalents: Money market funds $ 390,846 $ 390,846 $ — $ — Total cash equivalents 390,846 390,846 — — Investments: U.S. government securities 9,821 9,821 — — Total investments 9,821 9,821 — — Total cash equivalents and investments $ 400,667 $ 400,667 $ — $ — There were no transfers between levels during the periods ended June 30, 2023 and December 31, 2022. Concentration of Credit Risk Financial instruments, which potentially subject us to concentrations of credit risk, consist principally of cash equivalents, investments, and accounts receivable. We maintain the majority of our cash and cash equivalents in accounts with major U.S. and multi-national financial institutions, and our deposits at certain of these institutions exceed insured limits. Market conditions can impact the viability of these institutions. In the event of failure of any of the financial institutions where we maintain our cash and cash equivalents, there can be no assurance that we will be able to access uninsured funds in a timely manner or at all. Our investment policy limits investments to certain types of debt securities issued by the U.S. government and its agencies, corporations with investment-grade credit ratings, or commercial paper and money market funds issued by the highest quality financial and non-financial companies. We place restrictions on maturities and concentration by type and issuer. We are exposed to credit risk in the event of a default by the issuers of these securities to the extent recorded on the consolidated balance sheets. However, as of June 30, 2023 and December 31, 2022, we limited our credit risk associated with cash equivalents by placing investments with banks we believe are highly creditworthy. We believe that the credit risk in our accounts receivable is mitigated by our credit evaluation process, relatively short collection terms, and dispersion of our customer base. We generally do not require collateral, and losses on accounts receivable have historically not been significant. Accounts Receivable and Allowance for Expected Credit Losses Trade accounts receivable are recorded at the invoiced amount and do not bear interest. Customer credit terms are established prior to shipment with the general standard being net 30 days. Collateral or any other security to support payment of these receivables generally is not required. Each reporting period, we estimate the credit loss related to accounts receivable based on a migration analysis of accounts grouped by individual receivables delinquency status, and apply our historic loss rate adjusted for management's assumption of future market conditions. Any change in the allowance from new receivables acquired, or changes due to credit deterioration on previously existing receivables, is recorded in selling, general and administrative expenses. Write-offs of receivables considered uncollectible are deducted from the allowance. Specific accounts receivable are written-off once a determination is made that the amount is uncollectible. The write-off is recorded in the period in which the account receivable is deemed uncollectible. Recoveries are recognized when received and as a direct credit to earnings or as a reduction to the allowance for credit losses (which would indirectly reduce the loss by decreasing bad debt expense). Inventories Inventories are valued at the lower of cost or net realizable value, computed on a first-in, first-out basis and consisted of the following: June 30, 2023 December 31, 2022 Raw materials $ 4,118 $ 5,645 Finished goods 16,722 6,241 Total inventories, net of reserves $ 20,840 $ 11,886 We expense prelaunch inventory as research and development expense in the period incurred unless objective and persuasive evidence exists that regulatory approval and subsequent commercialization of a product candidate is probable and where we also expect the future economic benefit from the sales of the product candidate to be realized. At both June 30, 2023 and December 31, 2022, there was $0 included in inventory related to prelaunch inventory. We regularly review inventory quantities on-hand for excess and obsolete inventory and, when circumstances indicate, incur charges to write down inventories to their net realizable value. The determination of a reserve for excess and obsolete inventory involves management exercising judgment to determine the required reserve, considering future demand, product life cycles, introduction of new products and current market conditions. The reserve for excess and obsolete inventory was $3.0 million and $2.7 million as of June 30, 2023 and December 31, 2022, respectively. Property and Equipment Property and equipment are stated at cost, less accumulated depreciation and amortization and consisted of the following: June 30, 2023 December 31, 2022 Computer equipment and software $ 2,152 $ 1,729 Manufacturing equipment 6,856 5,974 Other equipment 1,761 535 Leasehold improvements 2,086 2,064 Construction in process 18,523 11,857 Property and equipment, cost 31,378 22,159 Less: accumulated depreciation and amortization (6,161) (4,910) Property and equipment, net $ 25,217 $ 17,249 Depreciation is determined using the straight-line method over the estimated useful lives of the respective assets, generally three Strategic Investments For equity securities without readily determinable fair values, we have elected the measurement alternative under which we measure these investments at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer. These securities are presented within other non-current assets on the consolidated balance sheets. The balance of equity securities without readily determinable fair values was $10.8 million and $10.5 million as of June 30, 2023 and December 31, 2022, respectively. There were no adjustments to the carrying amount during either of the six months ended June 30, 2023 or 2022. Impairment of Long-lived Assets Long-lived assets consist primarily of property and equipment and operating lease right-of-use asset and are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If circumstances require that an asset be tested for possible impairment, we compare the undiscounted cash flows expected to be generated by the asset to the carrying amount of the asset. If the carrying amount of the asset is not recoverable on an undiscounted cash flow basis, we determine the fair value of the asset and recognize an impairment loss to the extent the carrying amount of the asset exceeds its fair value. We determine fair value using the income approach based on the present value of expected future cash flows or other appropriate measures of estimated fair value. Our cash flow assumptions consider historical and forecasted revenue and operating costs and other relevant factors. We did not record any impairment charges on long-lived assets during either of the six months ended June 30, 2023 or 2022. Accrued Expenses Accrued expenses consisted of the following: June 30, 2023 December 31, 2022 Payroll related $ 22,552 $ 30,398 Product warranty liability 760 920 Operating lease liabilities, current portion 1,315 1,336 Other accrued expenses 2,099 1,685 Total accrued expenses $ 26,726 $ 34,339 The following table shows the changes in our estimated product warranty liability accrual, included in accrued liabilities: Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Balance at beginning of period $ 741 $ 438 $ 920 $ 468 Provisions for warranty 151 110 283 121 Settlements of warranty claims (132) (60) (443) (101) Balance at the end of the period $ 760 $ 488 $ 760 $ 488 Revenue Recognition We derive our revenue from sales of our products in the U.S. and internationally. Customers are primarily comprised of hospitals and ambulatory surgery centers, with distributors being used in certain international locations where we do not have a direct commercial presence. Revenues from product sales are recognized when the customer obtains control of the product, which occurs at a point in time, either upon shipment of the product or receipt of the product, depending on shipment terms. Our standard shipping terms are free on board shipping point, unless the customer requests that control and title to the inventory transfer upon delivery. In those cases where shipping and handling costs are billed to customers, we classify the amounts billed as a component of cost of goods sold. Revenue is measured as the amount of consideration we expect to receive, adjusted for any applicable estimates of variable consideration and other factors affecting the transaction price, which is based on the invoiced price, in exchange for transferring products. All revenue is recognized when we satisfy our performance obligations under the contract. The majority of our contracts have a single performance obligation and are short term in nature. Sales taxes and value added taxes in foreign jurisdictions that are collected from customers and remitted to governmental authorities are accounted for on a net basis and therefore are excluded from net sales. Shipping and handling costs associated with outbound freight after control over a product has transferred to a customer are accounted for as a fulfillment cost and are included in cost of goods sold. Variable consideration related to certain customer sales incentives is estimated based on the amounts expected to be paid based on the agreement with the customer using probability assessments. We offer customers a limited right of return for our product in case of non-conformity or performance issues. We estimate the amount of our product sales that may be returned by our customers based on historical sales and returns. As our historical product returns to date have been immaterial, we have not recorded a reduction in revenue related to variable consideration for product returns. See Note 9 for disaggregated revenue by geographic area. Cost of Goods Sold Cost of goods sold consists primarily of acquisition costs for the components of the Inspire system, overhead costs, scrap and inventory obsolescence, warranty replacement costs, as well as distribution-related expenses such as logistics and shipping costs, net of shipping costs charged to customers. The overhead costs include the cost of material procurement, depreciation expense for production equipment, and operations supervision and management personnel, including employee compensation, stock-based compensation, supplies, and travel. Research and Development Research and development expenses consist primarily of product development, clinical and regulatory affairs, quality assurance, consulting services, and other costs associated with products and technologies in development. These expenses include employee compensation, including stock-based compensation, supplies, materials, prelaunch inventory, consulting, and travel expenses related to research and development programs. Clinical expenses include clinical study design, clinical site reimbursement, data management, travel expenses, and the cost of manufacturing products for clinical studies. We expense prelaunch inventory as research and development expense in the period incurred unless objective and persuasive evidence exists that regulatory approval and subsequent commercialization of a product candidate is probable and where we also expect the future economic benefit from the sales of the product candidate to be realized. Prelaunch inventory expenses were $3.0 million and $0.0 million during the three months ended June 30, 2023 and 2022, respectively and $3.0 million and $0.0 million during the six months ended June 30, 2023 and 2022, respectively. Stock-Based Compensation We maintain an equity incentive plan to provide lon g-term incentives for eligible employees, consultants, and members of the board of directors. The plan allows for the issuance of restricted stock units ("RSUs"), performance stock units ("PSUs"), and non-statutory and incentive stock options to employees, and RSUs, PSUs, and non-statutory stock options to consultants and directors. We also offer an employee stock purchase plan ("ESPP") which allows participating employees to purchase shares of our common stock at a discount through payroll deductions. We recognize equity-based compensation expense for awards of equity instruments based on the grant date fair value of those awards as expense in the consolidated statements of operations and comprehensive loss. We estimate the fair value of stock options using the Black-Scholes option pricing model and the fair value of RSUs and PSUs is equal to the closing price of our common stock on the grant date. The fair value of each purchase under the employee stock purchase plan is estimated at the beginning of the offering period using the Black-Scholes option pricing model. Stock-based compensation expense is recognized on a straight-line basis over the vesting term for stock options and RSUs, and over the vesting and performance period based on the probability of achieving the performance objectives for PSUs. We account for award forfeitures as they occur. Advertising Expenses We expense the costs of advertising, including promotional expenses, as incurred. Advertising expenses were $25.3 million and $18.0 million during the three months ended June 30, 2023 and 2022, respectively, and $48.9 million and $33.5 million during the six months ended June 30, 2023 and 2022, respectively. Leases Operating leases are included in operating lease right-of-use ("ROU") asset, accrued expenses, and operating lease liability – non-current portion in our consolidated balance sheets. ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. In determining the present value of lease payments, we use our incremental borrowing rate based on the information available at the lease commencement date as the rate implicit in the lease is not readily determinable. The determination of our incremental borrowing rate requires management judgment based on information available at lease commencement. The operating lease ROU assets also include adjustments for prepayments, accrued lease payments, and exclude lease incentives. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise such options. Operating lease cost is recognized on a straight-line basis over the expected lease term. Lease agreements that include lease and non-lease components are accounted for as a single lease component. Lease agreements with a noncancelable term of less than 12 months are not recorded on our consolidated balance sheets. Income Taxes We account for income taxes using the liability method. Under this method, deferred tax assets and liabilities are determined based on the differences between the financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates that will be in effect when the differences are expected to reverse. Valuation allowances against deferred tax assets are established, when necessary, to reduce deferred tax assets to the amounts expected to be realized. As we have historically incurred operating losses, we have recorded a full valuation allowance against our net deferred tax assets, and there is no provision for income taxes other than minimal state and foreign taxes, which includes a foreign tax provision relating to uncertain tax positions. Our policy is to record interest and penalties expense related to uncertain tax positions as other expense in the consolidated statements of operations and comprehensive loss. Comprehensive Income (Loss) Comprehensive income (loss) consists of net loss and changes in unrealized gains and losses due to interest rate fluctuations and other external factors on investments classified as available-for-sale, and foreign currency translation adjustments. Accumulated other comprehensive income (loss) is presented in the accompanying consolidated balance sheets as a component of stockholders' equity. Loss Per Share Basic net loss per share is computed by dividing the net loss by the weighted average number of shares of common stock outstanding during the period. Diluted net loss per share is computed by dividing the net loss by the weighted average number of shares of common stock and dilutive potential shares of common stock outstanding during the period. Because we have reported a net loss for all periods presented, diluted net loss per share is the same as basic net loss per share as all potentially dilutive shares consisting of outstanding stock options, unvested RSUs and PSUs, and shares issuable under our employee stock purchase plan were antidilutive in those periods. Recent Accounting Pronouncements We have reviewed and considered all recent accounting pronouncements that have not yet been adopted and believe there are none that could potentially have a material impact on our business practices, financial condition, results of operations, or disclosures. |
Investments
Investments | 6 Months Ended |
Jun. 30, 2023 | |
Investments, Debt and Equity Securities [Abstract] | |
Investments | Investments We had no investments as of June 30, 2023. Our investments as of December 31, 2022 were classified as available-for-sale and consisted of the following: December 31, 2022 Amortized Unrealized Gross Aggregate Cost Gains Losses Fair Value Short-Term: U.S. government securities $ 9,998 $ — $ (177) $ 9,821 Short-term investments $ 9,998 $ — $ (177) $ 9,821 |
Leases
Leases | 6 Months Ended |
Jun. 30, 2023 | |
Leases [Abstract] | |
Leases | Leases We lease office space for our corporate headquarters under non-cancelable operating leases. The leases were amended on May 10, 2023 to increase the total space leased to approximately 106,000 square feet and to extend the noncancellable lease term through May 31, 2035, resulting in a non-cash increase in the associated right-of-use asset and lease liability of $15.1 million. The amended lease also includes options to renew for up to two additional periods of five years each at the then-prevailing market rates. The exercises of the lease renewal options are at our sole discretion and were not included in the lease term for the calculation of the ROU assets and lease liabilities as of the lease modification date as they were not reasonably certain of exercise. In addition to base rent, we also pay our proportionate share of the operating expenses, as defined in the leases. These payments are made monthly and adjusted annually to reflect actual charges incurred for operating expenses, such as common area maintenance, taxes, and insurance. The following table presents the lease balances within the consolidated balance sheets: June 30, 2023 December 31, 2022 Right-of-use assets: Operating lease right-of-use assets $ 21,368 $ 6,880 Operating lease liabilities: Accrued expenses 1,315 1,336 Operating lease liabilities, non-current portion 22,054 7,536 Total operating lease liabilities $ 23,369 $ 8,872 Maturities of our lease liability for our operating lease are as follows as of June 30, 2023: 2023 (remaining) $ 1,207 2024 2,457 2025 (2,296) 2026 2,924 2027 3,012 Thereafter 25,335 Total undiscounted lease payments 32,639 Less: imputed interest (9,270) Present value of lease liability $ 23,369 As of June 30, 2023, the remaining lease term was 11.9 years and the discount rate was 4.9%. The operating cash outflows from our operating leases were $0.5 million and $0.1 million for the three-month periods ended June 30, 2023 and 2022, respectively, and $0.9 million and $0.1 million for the six-month periods ended June 30, 2023 and 2022, respectively. |
Long-Term Debt
Long-Term Debt | 6 Months Ended |
Jun. 30, 2023 | |
Long-Term Debt, by Current and Noncurrent [Abstract] | |
Long-Term Debt | Long-Term Debt In March 2019 we amended our $24.5 million term loan and security agreement, which we refer to as our former credit facility. The debt was interest only until April 1, 2022 and was scheduled to mature on March 1, 2024. The basic interest rate was the 30-day U.S. LIBOR rate, subject to a floor of 7.60%. In addition to the principal and interest payments, we were required to pay a final payment fee of 3.50% on all amounts outstanding, which was accreted using the effective interest rate method over the term of the credit facility and was to be due at the earlier of maturity or prepayment. Borrowings were prepayable in whole at our option, subject to a prepayment fee of 1.00%. In August 2022, we prepaid the outstanding principal balance of $19.4 million, the final payment fee of $0.9 million, and the prepayment fee of $0.2 million. As of June 30, 2023 and December 31, 2022, we had no remaining amounts outstanding under our former credit facility. |
Employee Retirement Plan
Employee Retirement Plan | 6 Months Ended |
Jun. 30, 2023 | |
Retirement Benefits [Abstract] | |
Employee Retirement Plan | Employee Retirement PlanWe sponsor a defined contribution employee retirement plan covering all of our full-time employees. The plan allows eligible employees to defer a portion of their eligible compensation up to the maximum allowed by IRS Regulations. Beginning January 1, 2022, we elected to begin making voluntary matching contributions to the plan. We match 50% of the first 6% of each participating employee's contribution, up to 3% of eligible earnings. Our match contributions are made to funds designated by the participant, none of which are based on Inspire common stock. Discretionary contributions to the plan totaled $0.9 million and $0.6 million for the three months ended June 30, 2023 and 2022, respectively, and $2.1 million and $1.3 million for the six months ended June 30, 2023 and 2022, respectively. |
Stock-Based Compensation
Stock-Based Compensation | 6 Months Ended |
Jun. 30, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Stock-Based Compensation | Stock-Based Compensation As of June 30, 2023, there were 4,316,601 shares authorized for issuance under our equity incentive plan, of which 1,583,136 shares were available for future awards. Stock-based compensation expense is recognized on a straight-line basis over the vesting term for stock options and RSUs, and over the performance period based on the probability of achieving the performance objectives for PSUs, and is reduced by actual forfeitures as they occur. If there are any modifications or cancellations of the underlying unvested securities, we may be required to accelerate, increase, or cancel any remaining unearned stock compensation expense. Future stock-based compensation expense and unearned stock-based compensation will increase to the extent that we grant additional stock-based awards. Stock Options Options are granted at the exercise price, which is equal to the closing price of our stock on the date of grant. The stock options granted to employees include a four one three The fair value per share of options is estimated on the date of grant using the Black-Scholes option pricing model. Option Value and Assumptions Six Months Ended June 30, 2023 2022 Weighted average fair value $154.11 $121.74 Assumptions: Expected term (years) 6.25 5.50 - 6.25 Expected volatility 56.6 - 57.4% 56.2 - 56.9% Risk-free interest rate 3.49 - 4.07% 1.75 - 3.04% Expected dividend yield 0.0% 0.0% Expected Term — Due to our limited amount of historical exercise, forfeiture, and expiration activity, we have opted to use the "simplified method" for estimating the expected term of options, whereby the expected term equals the arithmetic average of the vesting terms and the original contractual term of the option. We will continue to analyze our expected term assumption as more historical data becomes available. Expected Volatility — Due to our limited company specific historical and implied volatility data, we have incorporated our historical stock trading volatility with those of a group of similar companies that are publicly traded for the calculation of volatility. When selecting this peer group of public companies on which we have based our expected stock price volatility, we generally selected companies with comparable characteristics, including enterprise value, stages of clinical development, risk profiles, position within the industry, and those with historical share price information sufficient to meet the expected life of the stock-based awards. We will continue to analyze the historical stock price volatility assumption as more historical data for our common stock becomes available. Risk-Free Interest Rate — The risk-free rate assumption is based on the U.S. government Treasury instruments with maturities similar to the expected term of our stock options. Expected Dividend Yield — The expected dividend assumption is based on our history of not paying dividends and our expectation that we will not declare dividends for the foreseeable future. Stock Option Activity Options Weighted Average Weighted Average Aggregate Intrinsic Outstanding at December 31, 2022 2,660,734 $ 112.19 6.9 $372,068 Granted 368,459 $ 265.06 Exercised (285,860) $ 71.68 $58,740 Forfeited/expired (26,915) $ 197.29 Outstanding at June 30, 2023 2,716,418 $ 136.35 6.9 $511,474 Exercisable at June 30, 2023 1,653,502 $ 84.15 5.8 $397,651 The aggregate intrinsic value of options exercised is the difference between the estimated fair market value of our common stock at the date of exercise and the exercise price for those options. The aggregate intrinsic value of outstanding options is the difference between the closing price as of the date outstanding and the exercise price of the underlying stock options. As of June 30, 2023, the amount of unearned stock-based compensation to be expensed from now through the year 2027 related to unvested employee and non-employee director stock options is $118.7 million, which we expect to recognize over a weighted average period of 2.6 years. Restricted Stock Units RSUs are share awards that entitle the holder to receive freely tradable shares of our common stock upon vesting. The RSUs cannot be transferred and the awards are subject to forfeiture if the holder’s employment terminates prior to the release of the vesting restrictions. The RSUs include three Restricted Stock Units Weighted Average Aggregate Intrinsic Value (in thousands) Unvested at December 31, 2022 124,680 $ 213.97 $ 31,404 Granted 98,040 $ 265.70 Vested (28,201) $ 215.38 $ 7,692 Forfeited (6,117) $ 232.82 Unvested at June 30, 2023 188,402 $ 240.07 $ 61,163 The aggregate intrinsic value of unvested RSUs was based on our closing stock price on the last trading day of the period. The aggregate intrinsic value of vested RSUs was based on our closing stock price on the date of vest. As of June 30, 2023, there was $38.9 million of unrecognized stock-based compensation expense related to RSUs that is expected to be recognized over a weighted average period of 2.3 years. Performance Stock Units During each of the quarters ended March 31, 2022 and 2023, we granted PSUs to officers and key employees. The number of PSUs that will ultimately be earned is based on our performance relative to pre-established goals for the three three A summary of PSUs and related information is as follows: Performance Stock Units Weighted Average Aggregate Intrinsic Value (in thousands) Unvested at December 31, 2022 77,472 $ 227.53 $ 19,514 Granted 90,434 $ 263.16 Forfeited (879) $ 227.53 Unvested at June 30, 2023 167,027 $ 246.82 $ 54,224 The fair value of the PSUs is equal to the closing price of our common stock on the grant date. The aggregate intrinsic value of unvested PSUs was based on our closing stock price on the last trading day of the period. As of June 30, 2023, there was $44.6 million of unrecognized stock-based compensation expense related to outstanding PSUs that is expected to be recognized over a weighted-average period of approximately 2.3 years. |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2023 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes At both June 30, 2023 and December 31, 2022, a valuation allowance was recorded against all deferred tax assets due to our cumulative net loss position. We recorded income tax expense of $0.2 million and $0.1 million for the three months ended June 30, 2023 and 2022, respectively, and $0.4 million and $0.2 million for the six months ended June 30, 2023 and 2022, respectively. The nominal income tax expense reflects minimal state and foreign income tax expense in the six months ended June 30, 2023, and minimal state income tax expense and an accrual for uncertain tax positions in the three and six months ended June 30, 2022. As of December 31, 2022, our gross federal net operating loss carryforward was $257.4 million, which will expire at various dates beginning in 2033. In addition, net operating loss carryforwards for state income tax purposes of $183.3 million that include net operating losses will begin to expire in 2024. We also have gross research and development credit carryforwards of $10.1 million as of December 31, 2022, which will expire at various dates beginning in 2033. Utilization of the net operating loss carryforwards and R&D credit carryforwards may be subject to an annual limitation due to the ownership change limitations provided by Section 382 and Section 383 of the Internal Revenue Code of 1986 and similar state provisions. During the three months ended March 31, 2023, we finalized a detailed analysis to determine whether an ownership change has occurred and if a limitation exists. It was determined that December 11, 2018 was the only date that we experienced an ownership change. The study concluded that none of the $126.5 million federal net operating losses and $1.7 million of federal R&D credits that were accumulated on December 11, 2018, will expire unused solely due to the limitations under Section 382 and 383. Realization of the deferred tax assets is dependent upon the generation of future taxable income, if any, the amount and timing of which are uncertain. Based on available objective evidence and cumulative losses, we believe it is more likely than not that the deferred tax assets are not recognizable and will not be recognizable until we have sufficient book income. Accordingly, the net deferred tax assets have been fully offset by a valuation allowance. We had $0.1 million of tax payable on unrecognized tax positions as of each of June 30, 2023 and December 31, 2022. We file income tax returns in the applicable jurisdictions. The 2019 to 2021 tax years remain open to examination by the major taxing authorities to which we are subject. We do not expect a significant change to our unrecognized tax positions over the next 12 months. |
Segment Reporting and Revenue D
Segment Reporting and Revenue Disaggregation | 6 Months Ended |
Jun. 30, 2023 | |
Segment Reporting [Abstract] | |
Segment Reporting and Revenue Disaggregation | Segment Reporting and Revenue DisaggregationWe operate our business as one operating segment. An operating segment is defined as a component of an enterprise for which separate discrete financial information is available and evaluated regularly by the chief operating decision maker, or decision-making group, in deciding how to allocate resources and in assessing performance. Segment information is consistent with how management reviews the business, makes investing and resource allocation decisions and assesses operating performance. We sell our Inspire system to hospitals and ambulatory surgery centers in the U.S. and in select countries in Europe and Japan through a direct sales organization, and in Singapore and Hong Kong through distributors. Revenue by geographic region is as follows: Three Months Ended Six Months Ended June 30, June 30, 2023 2022 2023 2022 United States $ 144,749 $ 87,876 $ 269,234 $ 154,302 All other countries 6,343 3,510 9,755 6,466 Total revenue $ 151,092 $ 91,386 $ 278,989 $ 160,768 All of our long-lived assets are located in the U.S. |
Loss Per Share
Loss Per Share | 6 Months Ended |
Jun. 30, 2023 | |
Earnings Per Share [Abstract] | |
Loss Per Share | Loss Per Share Basic net loss per share is computed by dividing the net loss by the weighted average number of shares of common stock outstanding during the period. Diluted net loss per share is computed by dividing the net loss by the weighted average number of shares of common stock and dilutive potential shares of common stock outstanding during the period. Because we have reported a net loss for all periods presented, diluted net loss per share is the same as basic net loss per share as all of the following potentially dilutive shares were antidilutive in those periods. The following common stock-based awards were excluded from the computation of diluted net loss per common share for the periods presented because including them would have been anti-dilutive: June 30, 2023 2022 Common stock options outstanding 2,716,418 2,751,825 Unvested restricted stock units 188,402 87,509 Total 2,904,820 2,839,334 |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Thousands | 3 Months Ended | |||
Jun. 30, 2023 | Mar. 31, 2023 | Jun. 30, 2022 | Mar. 31, 2022 | |
Pay vs Performance Disclosure | ||||
Net loss | $ (11,952) | $ (15,424) | $ (14,490) | $ (16,694) |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended | 6 Months Ended |
Jun. 30, 2023 shares | Jun. 30, 2023 shares | |
Trading Arrangements, by Individual | ||
Material Terms of Trading Arrangement | On May 19, 2023, John C. Rondoni, Chief Technology Officer, adopted a Rule 10b5-1 trading arrangement that is intended to satisfy the affirmative defense of Rule 10b5-1(c) for the sale of up to 12,992 shares of the Company’s common stock until June 28, 2024. | |
Non-Rule 10b5-1 Arrangement Adopted | false | |
Rule 10b5-1 Arrangement Terminated | false | |
Non-Rule 10b5-1 Arrangement Terminated | false | |
John C Rondoni [Member] | ||
Trading Arrangements, by Individual | ||
Name | John C. Rondoni | |
Title | Chief Technology Officer | |
Rule 10b5-1 Arrangement Adopted | true | |
Adoption Date | May 19, 2023 | |
Arrangement Duration | 406 days | |
Aggregate Available | 12,992 | 12,992 |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2023 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the U.S. (“GAAP”) for interim financial reporting and as required by the rules and regulations of the Securities and Exchange Commission (“SEC”). Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (including those which are normal and recurring) considered necessary for a fair presentation of the interim financial information have been included. When preparing financial statements in conformity with GAAP, we must make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, expenses, and related disclosures at the date of the financial statements. Actual results could differ from those estimates. Additionally, the results of operations for the interim periods are not necessarily indicative of the operating results for the full fiscal year or any future periods. All intercompany accounts and transactions have been eliminated in consolidation. For a complete discussion of our significant accounting policies and other information, the unaudited consolidated financial statements and notes thereto should be read in conjunction with the audited financial statements included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022. |
Cash and Cash Equivalents | Cash and Cash Equivalents We consider all highly liquid securities, readily convertible to cash, that have original maturities of 90 days or less from the date of purchase to be cash equivalents. The carrying amount reported in the consolidated balance sheets for cash is cost, which approximates fair value. |
Foreign Currency | Foreign Currency Our functional and reporting currency is the U.S. dollar. Our subsidiaries have functional currency in Euro and Yen. The consolidated financial statements are translated to U.S. dollars. Non-monetary assets and liabilities denominated in foreign currencies are translated at rates of exchange in effect at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are translated using the exchange rate prevailing at the balance sheet date. Sales and expenses denominated in foreign currencies are translated at exchange rates |
Investments | Investments At December 31, 2022, our investments consisted of U.S. government securities. Investments are reported at their estimated fair market values which are based on quoted, active or inactive market prices when available. Any unrealized gains and losses due to interest rate fluctuations and other external factors are reported as a separate component of accumulated other comprehensive loss within stockholders' equity. We had $0.0 million and $0.2 million of unrecognized loss in our accumulated other comprehensive income (loss) balance at June 30, 2023 and December 31, 2022, respectively. Any realized gains and losses are calculated on the specific identification method and reported net in other expense, net in the consolidated statements of operations and comprehensive loss. For the three and six months ended June 30, 2023 and 2022, we recognized $0 of realized losses, net. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments We measure certain financial assets and liabilities at fair value on a recurring basis, including cash equivalents and investments. Fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or a liability. A three-tier fair value hierarchy is established as a basis for considering such assumptions and for inputs used in the valuation methodologies in measuring fair value: Level 1: Observable inputs, such as quoted prices (unadjusted) for identical assets or liabilities in active markets. Level 2: Inputs other than quoted prices in active markets for identical assets and liabilities that are observable either directly or indirectly for substantially the full term of the asset or liability. Level 3: Unobservable inputs that are supported by little or no market activities, which would require us to develop our own assumptions. We use the methods and assumptions described below in determining the fair value of our financial instruments. Money market funds: Fair values of money market funds are based on quoted market prices in active markets. These are included as Level 1 measurements in the tables below. U.S. government securities: Consists of U.S. government Treasury bills with original maturities of less than one year and are based on quoted prices in active markets. These are included as Level 1 measurements in the table below. |
Concentration of Credit Risk | Concentration of Credit Risk Financial instruments, which potentially subject us to concentrations of credit risk, consist principally of cash equivalents, investments, and accounts receivable. We maintain the majority of our cash and cash equivalents in accounts with major U.S. and multi-national financial institutions, and our deposits at certain of these institutions exceed insured limits. Market conditions can impact the viability of these institutions. In the event of failure of any of the financial institutions where we maintain our cash and cash equivalents, there can be no assurance that we will be able to access uninsured funds in a timely manner or at all. Our investment policy limits investments to certain types of debt securities issued by the U.S. government and its agencies, corporations with investment-grade credit ratings, or commercial paper and money market funds issued by the highest quality financial and non-financial companies. We place restrictions on maturities and concentration by type and issuer. We are exposed to credit risk in the event of a default by the issuers of these securities to the extent recorded on the consolidated balance sheets. However, as of June 30, 2023 and December 31, 2022, we limited our credit risk associated with cash equivalents by placing investments with banks we believe are highly creditworthy. |
Accounts Receivable and Allowance for Expected Credit Losses | Accounts Receivable and Allowance for Expected Credit Losses Trade accounts receivable are recorded at the invoiced amount and do not bear interest. Customer credit terms are established prior to shipment with the general standard being net 30 days. Collateral or any other security to support payment of these receivables generally is not required. Each reporting period, we estimate the credit loss related to accounts receivable based on a migration analysis of accounts grouped by individual receivables delinquency status, and apply our historic loss rate adjusted for management's assumption of future market conditions. Any change in the allowance from new receivables acquired, or changes due to credit deterioration on previously existing receivables, is recorded in selling, general and administrative expenses. Write-offs of receivables considered uncollectible are deducted from the allowance. Specific accounts receivable are written-off once a determination is made that the amount is uncollectible. The write-off is recorded in the period in which the account receivable is deemed uncollectible. Recoveries are recognized when received and as a direct credit to earnings or as a reduction to the allowance for credit losses (which would indirectly reduce the loss by decreasing bad debt expense). |
Inventories | We regularly review inventory quantities on-hand for excess and obsolete inventory and, when circumstances indicate, incur charges to write down inventories to their net realizable value. The determination of a reserve for excess and obsolete inventory involves management exercising judgment to determine the required reserve, considering future demand, product life cycles, introduction of new products and current market conditions. |
Property and Equipment | Depreciation is determined using the straight-line method over the estimated useful lives of the respective assets, generally three |
Impairment of Long-lived Assets | Impairment of Long-lived AssetsLong-lived assets consist primarily of property and equipment and operating lease right-of-use asset and are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If circumstances require that an asset be tested for possible impairment, we compare the undiscounted cash flows expected to be generated by the asset to the carrying amount of the asset. If the carrying amount of the asset is not recoverable on an undiscounted cash flow basis, we determine the fair value of the asset and recognize an impairment loss to the extent the carrying amount of the asset exceeds its fair value. We determine fair value using the income approach based on the present value of expected future cash flows or other appropriate measures of estimated fair value. Our cash flow assumptions consider historical and forecasted revenue and operating costs and other relevant factors. |
Revenue Recognition | Revenue Recognition We derive our revenue from sales of our products in the U.S. and internationally. Customers are primarily comprised of hospitals and ambulatory surgery centers, with distributors being used in certain international locations where we do not have a direct commercial presence. Revenues from product sales are recognized when the customer obtains control of the product, which occurs at a point in time, either upon shipment of the product or receipt of the product, depending on shipment terms. Our standard shipping terms are free on board shipping point, unless the customer requests that control and title to the inventory transfer upon delivery. In those cases where shipping and handling costs are billed to customers, we classify the amounts billed as a component of cost of goods sold. Revenue is measured as the amount of consideration we expect to receive, adjusted for any applicable estimates of variable consideration and other factors affecting the transaction price, which is based on the invoiced price, in exchange for transferring products. All revenue is recognized when we satisfy our performance obligations under the contract. The majority of our contracts have a single performance obligation and are short term in nature. Sales taxes and value added taxes in foreign jurisdictions that are collected from customers and remitted to governmental authorities are accounted for on a net basis and therefore are excluded from net sales. Shipping and handling costs associated with outbound freight after control over a product has transferred to a customer are accounted for as a fulfillment cost and are included in cost of goods sold. Variable consideration related to certain customer sales incentives is estimated based on the amounts expected to be paid based on the agreement with the customer using probability assessments. We offer customers a limited right of return for our product in case of non-conformity or performance issues. We estimate the amount of our product sales that may be returned by our customers based on historical sales and returns. As our historical product returns to date have been immaterial, we have not recorded a reduction in revenue related to variable consideration for product returns. |
Cost of Goods Sold | Cost of Goods Sold Cost of goods sold consists primarily of acquisition costs for the components of the Inspire system, overhead costs, scrap and inventory obsolescence, warranty replacement costs, as well as distribution-related expenses such as logistics and shipping costs, net of shipping costs charged to customers. The overhead costs include the cost of material procurement, depreciation expense for production equipment, and operations supervision and management personnel, including employee compensation, stock-based compensation, supplies, and travel. |
Research and Development | Research and Development Research and development expenses consist primarily of product development, clinical and regulatory affairs, quality assurance, consulting services, and other costs associated with products and technologies in development. These expenses include employee compensation, including stock-based compensation, supplies, materials, prelaunch inventory, consulting, and travel expenses related to research and development programs. Clinical expenses include clinical study design, clinical site reimbursement, data management, travel expenses, and the cost of manufacturing products for clinical studies. We expense prelaunch inventory as research and development expense in the period incurred unless objective and persuasive evidence exists that regulatory approval and subsequent commercialization of a product candidate is probable and where we also expect the future economic benefit from the sales of the product candidate to be realized. Prelaunch inventory expenses were $3.0 million and $0.0 million during the three months ended June 30, 2023 and 2022, respectively and $3.0 million and $0.0 million during the six months ended June 30, 2023 and 2022, respectively. |
Stock-Based Compensation | Stock-Based Compensation We maintain an equity incentive plan to provide lon g-term incentives for eligible employees, consultants, and members of the board of directors. The plan allows for the issuance of restricted stock units ("RSUs"), performance stock units ("PSUs"), and non-statutory and incentive stock options to employees, and RSUs, PSUs, and non-statutory stock options to consultants and directors. We also offer an employee stock purchase plan ("ESPP") which allows participating employees to purchase shares of our common stock at a discount through payroll deductions. We recognize equity-based compensation expense for awards of equity instruments based on the grant date fair value of those awards as expense in the consolidated statements of operations and comprehensive loss. We estimate the fair value of stock options using the Black-Scholes option pricing model and the fair value of RSUs and PSUs is equal to the closing price of our common stock on the grant date. The fair value of each purchase under the employee stock purchase plan is estimated at the beginning of the offering period using the Black-Scholes option pricing model. Stock-based compensation expense is recognized on a straight-line basis over the vesting term for stock options and RSUs, and over the vesting and performance period based on the probability of achieving the performance objectives for PSUs. We account for award forfeitures as they occur. |
Advertising Expenses | Advertising ExpensesWe expense the costs of advertising, including promotional expenses, as incurred. |
Leases | Leases Operating leases are included in operating lease right-of-use ("ROU") asset, accrued expenses, and operating lease liability – non-current portion in our consolidated balance sheets. ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. In determining the present value of lease payments, we use our incremental borrowing rate based on the information available at the lease commencement date as the rate implicit in the lease is not readily determinable. The determination of our incremental borrowing rate requires management judgment based on information available at lease commencement. The operating lease ROU assets also include adjustments for prepayments, accrued lease payments, and exclude lease incentives. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise such options. Operating lease cost is recognized on a straight-line basis over the expected lease term. Lease |
Income Taxes | Income Taxes We account for income taxes using the liability method. Under this method, deferred tax assets and liabilities are determined based on the differences between the financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates that will be in effect when the differences are expected to reverse. Valuation allowances against deferred tax assets are established, when necessary, to reduce deferred tax assets to the amounts expected to be realized. As we have historically incurred operating losses, we have recorded a full valuation allowance against our net deferred tax assets, and there is no provision for income taxes other than minimal state and foreign taxes, which includes a foreign tax provision relating to uncertain tax positions. Our policy is to record interest and penalties expense related to uncertain tax positions as other expense in the consolidated statements of operations and comprehensive loss. |
Comprehensive Income (Loss) | Comprehensive Income (Loss) Comprehensive income (loss) consists of net loss and changes in unrealized gains and losses due to interest rate fluctuations and other external factors on investments classified as available-for-sale, and foreign currency translation adjustments. Accumulated other comprehensive income (loss) is presented in the accompanying consolidated balance sheets as a component of stockholders' equity. |
Loss Per Share | Loss Per Share Basic net loss per share is computed by dividing the net loss by the weighted average number of shares of common stock outstanding during the period. Diluted net loss per share is computed by dividing the net loss by the weighted average number of shares of common stock and dilutive potential shares of common stock outstanding during the period. Because we have reported a net loss for all periods presented, diluted net loss per share is the same as basic net loss per share as all potentially dilutive shares consisting of outstanding stock options, unvested RSUs and PSUs, and shares issuable under our employee stock purchase plan were antidilutive in those periods. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements We have reviewed and considered all recent accounting pronouncements that have not yet been adopted and believe there are none that could potentially have a material impact on our business practices, financial condition, results of operations, or disclosures. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Accounting Policies [Abstract] | |
Schedule of assets and liabilities measured at fair value on a recurring basis | The following tables set forth by level within the fair value hierarchy our assets that are measured on a recurring basis and reported at fair value as of June 30, 2023 and December 31, 2022. Assets are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. Fair Value Measurements as of June 30, 2023 Estimated Level 1 Level 2 Level 3 Cash equivalents: Money market funds $ 419,942 $ 419,942 $ — $ — Total cash equivalents 419,942 419,942 — — Investments: Total investments — — — — Total cash equivalents and investments $ 419,942 $ 419,942 $ — $ — Fair Value Measurements as of December 31, 2022 Estimated Level 1 Level 2 Level 3 Cash equivalents: Money market funds $ 390,846 $ 390,846 $ — $ — Total cash equivalents 390,846 390,846 — — Investments: U.S. government securities 9,821 9,821 — — Total investments 9,821 9,821 — — Total cash equivalents and investments $ 400,667 $ 400,667 $ — $ — |
Schedule of inventory | Inventories are valued at the lower of cost or net realizable value, computed on a first-in, first-out basis and consisted of the following: June 30, 2023 December 31, 2022 Raw materials $ 4,118 $ 5,645 Finished goods 16,722 6,241 Total inventories, net of reserves $ 20,840 $ 11,886 |
Schedule of property and equipment | Property and equipment are stated at cost, less accumulated depreciation and amortization and consisted of the following: June 30, 2023 December 31, 2022 Computer equipment and software $ 2,152 $ 1,729 Manufacturing equipment 6,856 5,974 Other equipment 1,761 535 Leasehold improvements 2,086 2,064 Construction in process 18,523 11,857 Property and equipment, cost 31,378 22,159 Less: accumulated depreciation and amortization (6,161) (4,910) Property and equipment, net $ 25,217 $ 17,249 |
Schedule of accrued expenses | Accrued expenses consisted of the following: June 30, 2023 December 31, 2022 Payroll related $ 22,552 $ 30,398 Product warranty liability 760 920 Operating lease liabilities, current portion 1,315 1,336 Other accrued expenses 2,099 1,685 Total accrued expenses $ 26,726 $ 34,339 |
Schedule of product warranty liability | The following table shows the changes in our estimated product warranty liability accrual, included in accrued liabilities: Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Balance at beginning of period $ 741 $ 438 $ 920 $ 468 Provisions for warranty 151 110 283 121 Settlements of warranty claims (132) (60) (443) (101) Balance at the end of the period $ 760 $ 488 $ 760 $ 488 |
Investments (Tables)
Investments (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Investments, Debt and Equity Securities [Abstract] | |
Components of Investments Available-for-sale | Our investments as of December 31, 2022 were classified as available-for-sale and consisted of the following: December 31, 2022 Amortized Unrealized Gross Aggregate Cost Gains Losses Fair Value Short-Term: U.S. government securities $ 9,998 $ — $ (177) $ 9,821 Short-term investments $ 9,998 $ — $ (177) $ 9,821 |
Leases (Tables)
Leases (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Leases [Abstract] | |
Lease Balances within the Balance Sheets | The following table presents the lease balances within the consolidated balance sheets: June 30, 2023 December 31, 2022 Right-of-use assets: Operating lease right-of-use assets $ 21,368 $ 6,880 Operating lease liabilities: Accrued expenses 1,315 1,336 Operating lease liabilities, non-current portion 22,054 7,536 Total operating lease liabilities $ 23,369 $ 8,872 |
Maturity of Operating Lease Liability | Maturities of our lease liability for our operating lease are as follows as of June 30, 2023: 2023 (remaining) $ 1,207 2024 2,457 2025 (2,296) 2026 2,924 2027 3,012 Thereafter 25,335 Total undiscounted lease payments 32,639 Less: imputed interest (9,270) Present value of lease liability $ 23,369 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Summary of weighted average assumptions for fair value of options granted | The fair value per share of options is estimated on the date of grant using the Black-Scholes option pricing model. Option Value and Assumptions Six Months Ended June 30, 2023 2022 Weighted average fair value $154.11 $121.74 Assumptions: Expected term (years) 6.25 5.50 - 6.25 Expected volatility 56.6 - 57.4% 56.2 - 56.9% Risk-free interest rate 3.49 - 4.07% 1.75 - 3.04% Expected dividend yield 0.0% 0.0% |
Summary of the company's stock option activity and related information | Options Weighted Average Weighted Average Aggregate Intrinsic Outstanding at December 31, 2022 2,660,734 $ 112.19 6.9 $372,068 Granted 368,459 $ 265.06 Exercised (285,860) $ 71.68 $58,740 Forfeited/expired (26,915) $ 197.29 Outstanding at June 30, 2023 2,716,418 $ 136.35 6.9 $511,474 Exercisable at June 30, 2023 1,653,502 $ 84.15 5.8 $397,651 |
Schedule of restricted stock units activity | Restricted Stock Units Weighted Average Aggregate Intrinsic Value (in thousands) Unvested at December 31, 2022 124,680 $ 213.97 $ 31,404 Granted 98,040 $ 265.70 Vested (28,201) $ 215.38 $ 7,692 Forfeited (6,117) $ 232.82 Unvested at June 30, 2023 188,402 $ 240.07 $ 61,163 |
Summary of PSU's and related information | A summary of PSUs and related information is as follows: Performance Stock Units Weighted Average Aggregate Intrinsic Value (in thousands) Unvested at December 31, 2022 77,472 $ 227.53 $ 19,514 Granted 90,434 $ 263.16 Forfeited (879) $ 227.53 Unvested at June 30, 2023 167,027 $ 246.82 $ 54,224 |
Segment Reporting and Revenue_2
Segment Reporting and Revenue Disaggregation (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Segment Reporting [Abstract] | |
Schedule of Revenue by Geographic Region | Revenue by geographic region is as follows: Three Months Ended Six Months Ended June 30, June 30, 2023 2022 2023 2022 United States $ 144,749 $ 87,876 $ 269,234 $ 154,302 All other countries 6,343 3,510 9,755 6,466 Total revenue $ 151,092 $ 91,386 $ 278,989 $ 160,768 |
Loss Per Share (Tables)
Loss Per Share (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Earnings Per Share [Abstract] | |
Schedule of Dilutive Securities Excluded from Computations of Diluted Weighted Average Shares Outstanding | : June 30, 2023 2022 Common stock options outstanding 2,716,418 2,751,825 Unvested restricted stock units 188,402 87,509 Total 2,904,820 2,839,334 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Follow-On Public Offering (Details) $ / shares in Units, $ in Millions | Aug. 15, 2022 USD ($) $ / shares shares |
Subsidiary, Sale of Stock [Line Items] | |
Sale of stock, price per share (in dollars per share) | $ / shares | $ 215 |
Proceeds from sale of stock | $ | $ 243.8 |
Follow-on Offering | |
Subsidiary, Sale of Stock [Line Items] | |
Shares sold (in shares) | shares | 1,150,000 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Foreign Currency (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | |
Accounting Policies [Abstract] | |||||
Foreign currency gains | $ 100,000 | $ 100,000 | $ 0 | $ 200,000 | |
Foreign currency gains included in accumulated other comprehensive loss | $ (100,000) | $ (100,000) | $ (100,000) |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Investments (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||||||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Mar. 31, 2023 | Dec. 31, 2022 | Mar. 31, 2022 | Dec. 31, 2021 | |
Debt Securities, Available-for-sale [Line Items] | ||||||||
Stockholders' equity | $ 529,359,000 | $ 226,984,000 | $ 529,359,000 | $ 226,984,000 | $ 504,648,000 | $ 496,008,000 | $ 225,055,000 | $ 229,048,000 |
Realized losses, net | 0 | $ 0 | 0 | $ 0 | ||||
Allowance for credit losses | 0 | 0 | 0 | |||||
AOCI, Accumulated Gain (Loss), Debt Securities, Available-for-Sale, Including Noncontrolling Interest | ||||||||
Debt Securities, Available-for-sale [Line Items] | ||||||||
Stockholders' equity | $ 0 | $ 0 | $ (200,000) |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies - Fair Value of Financial Instruments (Details) - Recurring basis - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Cash equivalents: | ||
Total cash equivalents | $ 419,942 | $ 390,846 |
Investments: | ||
Total investments | 0 | 9,821 |
Total cash equivalents and investments | 419,942 | 400,667 |
U.S. government securities | ||
Investments: | ||
Total investments | 9,821 | |
Money market funds | ||
Cash equivalents: | ||
Total cash equivalents | 419,942 | |
Level 1 | ||
Cash equivalents: | ||
Total cash equivalents | 419,942 | 390,846 |
Investments: | ||
Total investments | 0 | 9,821 |
Total cash equivalents and investments | 419,942 | 400,667 |
Level 1 | U.S. government securities | ||
Investments: | ||
Total investments | 9,821 | |
Level 1 | Money market funds | ||
Cash equivalents: | ||
Total cash equivalents | 419,942 | |
Level 2 | ||
Cash equivalents: | ||
Total cash equivalents | 0 | 0 |
Investments: | ||
Total investments | 0 | 0 |
Total cash equivalents and investments | 0 | 0 |
Level 2 | U.S. government securities | ||
Investments: | ||
Total investments | 0 | |
Level 2 | Money market funds | ||
Cash equivalents: | ||
Total cash equivalents | 0 | |
Level 3 | ||
Cash equivalents: | ||
Total cash equivalents | 0 | 0 |
Investments: | ||
Total investments | 0 | 0 |
Total cash equivalents and investments | 0 | 0 |
Level 3 | U.S. government securities | ||
Investments: | ||
Total investments | $ 0 | |
Level 3 | Money market funds | ||
Cash equivalents: | ||
Total cash equivalents | $ 0 |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies - Inventories (Details) - USD ($) | Jun. 30, 2023 | Dec. 31, 2022 |
Accounting Policies [Abstract] | ||
Raw materials | $ 4,118,000 | $ 5,645,000 |
Finished goods | 16,722,000 | 6,241,000 |
Total inventories, net of reserves | 20,840,000 | 11,886,000 |
Reserve for excess and obsolete inventory | 3,000,000 | 2,700,000 |
Pre-launch, research and development inventory | $ 0 | $ 0 |
Summary of Significant Accoun_9
Summary of Significant Accounting Policies - Property and Equipment (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | |
Property and Equipment | |||||
Property and equipment, cost | $ 31,378 | $ 31,378 | $ 22,159 | ||
Less: accumulated depreciation and amortization | (6,161) | (6,161) | (4,910) | ||
Property and equipment, net | 25,217 | 25,217 | 17,249 | ||
Depreciation and amortization expenses | 700 | $ 400 | 1,300 | $ 800 | |
Computer equipment and software | |||||
Property and Equipment | |||||
Property and equipment, cost | 2,152 | 2,152 | 1,729 | ||
Manufacturing equipment | |||||
Property and Equipment | |||||
Property and equipment, cost | 6,856 | 6,856 | 5,974 | ||
Other equipment | |||||
Property and Equipment | |||||
Property and equipment, cost | 1,761 | 1,761 | 535 | ||
Leasehold improvements | |||||
Property and Equipment | |||||
Property and equipment, cost | 2,086 | 2,086 | 2,064 | ||
Construction in process | |||||
Property and Equipment | |||||
Property and equipment, cost | $ 18,523 | $ 18,523 | $ 11,857 | ||
Minimum | |||||
Property and Equipment | |||||
Estimated useful lives | 3 years | 3 years | |||
Maximum | |||||
Property and Equipment | |||||
Estimated useful lives | 5 years | 5 years |
Summary of Significant Accou_10
Summary of Significant Accounting Policies - Strategic Investments (Details) - USD ($) $ in Millions | Jun. 30, 2023 | Dec. 31, 2022 |
Accounting Policies [Abstract] | ||
Equity securities without readily determinable fair value | $ 10.8 | $ 10.5 |
Summary of Significant Accou_11
Summary of Significant Accounting Policies - Impairment of Long-lived Assets (Details) - USD ($) | 6 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Accounting Policies [Abstract] | ||
Impairment charges | $ 0 | $ 0 |
Summary of Significant Accou_12
Summary of Significant Accounting Policies - Accrued Expenses (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Accounting Policies [Abstract] | ||
Payroll related | $ 22,552 | $ 30,398 |
Product warranty liability | 760 | 920 |
Operating lease liabilities, current portion | 1,315 | 1,336 |
Other accrued expenses | 2,099 | 1,685 |
Total accrued expenses | $ 26,726 | $ 34,339 |
Summary of Significant Accou_13
Summary of Significant Accounting Policies - Product Warranty Accrual (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Movement in Standard Product Warranty Accrual [Roll Forward] | ||||
Balance at beginning of period | $ 741 | $ 438 | $ 920 | $ 468 |
Provisions for warranty | 151 | 110 | 283 | 121 |
Settlements of warranty claims | (132) | (60) | (443) | (101) |
Balance at the end of the period | $ 760 | $ 488 | $ 760 | $ 488 |
Summary of Significant Accou_14
Summary of Significant Accounting Policies - Research and Development (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Disaggregation of Revenue [Line Items] | ||||
Research and development | $ 30,821 | $ 14,534 | $ 56,340 | $ 26,404 |
Regulatory Pre-Launch of Product Inventory | ||||
Disaggregation of Revenue [Line Items] | ||||
Research and development | $ 3,000 | $ 0 | $ 3,000 | $ 0 |
Summary of Significant Accou_15
Summary of Significant Accounting Policies - Advertising Expenses (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Advertising Expenses | ||||
Advertising expenses | $ 25.3 | $ 18 | $ 48.9 | $ 33.5 |
Investments - Narrative (Detail
Investments - Narrative (Details) - USD ($) | Jun. 30, 2023 | Dec. 31, 2022 |
Investments, Debt and Equity Securities [Abstract] | ||
Investments, available for sale | $ 0 | $ 9,821,000 |
Investments with maturity greater than one year | $ 0 |
Investments - Classified as Ava
Investments - Classified as Available-for-Sale (Details) - USD ($) | Jun. 30, 2023 | Dec. 31, 2022 |
Short-Term: | ||
Amortized Cost | $ 9,998,000 | |
Aggregate Fair Value | $ 0 | 9,821,000 |
Short-term | ||
Short-Term: | ||
Unrealized Gross Gains | 0 | |
Unrealized Gross Losses | (177,000) | |
U.S. government securities | ||
Short-Term: | ||
Amortized Cost | 9,998,000 | |
Aggregate Fair Value | 9,821,000 | |
U.S. government securities | Short-term | ||
Short-Term: | ||
Unrealized Gross Gains | 0 | |
Unrealized Gross Losses | $ (177,000) |
Leases - Narrative (Details)
Leases - Narrative (Details) ft² in Thousands, $ in Millions | 3 Months Ended | 6 Months Ended | |||
May 10, 2023 USD ($) ft² renewal_option | Jun. 30, 2023 USD ($) | Jun. 30, 2022 USD ($) | Jun. 30, 2023 USD ($) | Jun. 30, 2022 USD ($) | |
Leases [Abstract] | |||||
Operating lease, office space (square feet) | ft² | 106 | ||||
Number of renewal options | renewal_option | 2 | ||||
Right-of-use asset obtained in exchange for operating lease liability | $ 15.1 | ||||
Renewal term | 5 years | ||||
Remaining lease term | 11 years 10 months 24 days | 11 years 10 months 24 days | |||
Discount rate | 4.90% | 4.90% | |||
Operating lease payments | $ 0.5 | $ 0.1 | $ 0.9 | $ 0.1 |
Leases - Assets and Liabilities
Leases - Assets and Liabilities (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Right-of-use assets: | ||
Operating lease right-of-use assets | $ 21,368 | $ 6,880 |
Operating lease liabilities: | ||
Accrued expenses | 1,315 | 1,336 |
Operating lease liabilities, non-current portion | 22,054 | 7,536 |
Total operating lease liabilities | $ 23,369 | $ 8,872 |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List] | Accrued expenses | Accrued expenses |
Leases - Maturity of Operating
Leases - Maturity of Operating Lease Liability (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Leases [Abstract] | ||
2023 (remaining) | $ 1,207 | |
2024 | 2,457 | |
2025 | (2,296) | |
2026 | 2,924 | |
2027 | 3,012 | |
Thereafter | 25,335 | |
Total undiscounted lease payments | 32,639 | |
Less: imputed interest | (9,270) | |
Present value of lease liability | $ 23,369 | $ 8,872 |
Long-Term Debt (Details)
Long-Term Debt (Details) - Term loan facility - March 2019 Amendment to Loan and Security Agreement - USD ($) | 1 Months Ended | |||
Aug. 31, 2022 | Mar. 31, 2019 | Jun. 30, 2023 | Dec. 31, 2022 | |
Credit Facility | ||||
Maximum borrowing amount under credit facility | $ 24,500,000 | |||
Final payment percentage | 3.50% | |||
Prepayment fee | 1% | |||
Prepayment of outstanding principal | $ 19,400,000 | |||
Payment for final fee | 900,000 | |||
Prepayment fee | $ 200,000 | |||
Outstanding under credit facility | $ 0 | $ 0 | ||
Minimum | ||||
Credit Facility | ||||
Basic interest rate | 7.60% |
Employee Retirement Plan (Detai
Employee Retirement Plan (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jan. 01, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Retirement Benefits [Abstract] | |||||
Employer matching contribution, percent of employees' contribution | 50% | ||||
Employee contribution, maximum eligible for employer match, percent | 6% | ||||
Employer matching contribution, percent of employees' earnings | 3% | ||||
Employer discretionary contribution | $ 0.9 | $ 0.6 | $ 2.1 | $ 1.3 |
Stock-Based Compensation - Addi
Stock-Based Compensation - Additional Information (Details) $ in Millions | 6 Months Ended |
Jun. 30, 2023 USD ($) shares | |
Stock Options | |
Unearned stock-based compensation | $ | $ 118.7 |
Weighted average recognition period | 2 years 7 months 6 days |
Options | |
Stock Options | |
Service period | 4 years |
Contractual life of stock options | 10 years |
Options | Directors | Minimum | |
Stock Options | |
Service period | 1 year |
Options | Directors | Maximum | |
Stock Options | |
Service period | 3 years |
Options | Vesting after first year of service | |
Stock Options | |
Percentage of shares to vest | 25% |
Options | Vesting in years two through four | |
Stock Options | |
Vesting period | 36 months |
Restricted Stock Units (RSUs) | |
Stock Options | |
Unearned stock-based compensation | $ | $ 38.9 |
Weighted average recognition period | 2 years 3 months 18 days |
Restricted Stock Units (RSUs) | Minimum | |
Stock Options | |
Service period | 3 years |
Restricted Stock Units (RSUs) | Maximum | |
Stock Options | |
Service period | 4 years |
Equity Incentive Plan | |
Stock Options | |
Shares authorized (in shares) | shares | 4,316,601 |
Number of shares available for future awards (in shares) | shares | 1,583,136 |
Stock-Based Compensation - Assu
Stock-Based Compensation - Assumptions Used to Calculate Fair Value of Options (Details) - Options - $ / shares | 6 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Weighted average assumptions | ||
Weighted average fair value (in dollars per share) | $ 154.11 | $ 121.74 |
Expected term (years) | 6 years 3 months | |
Expected dividend yield | 0% | 0% |
Minimum | ||
Weighted average assumptions | ||
Expected term (years) | 5 years 6 months | |
Expected volatility | 56.60% | 56.20% |
Risk-free interest rate | 3.49% | 1.75% |
Maximum | ||
Weighted average assumptions | ||
Expected term (years) | 6 years 3 months | |
Expected volatility | 57.40% | 56.90% |
Risk-free interest rate | 4.07% | 3.04% |
Stock-Based Compensation - Stoc
Stock-Based Compensation - Stock Option Activity (Details) $ / shares in Units, $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2023 USD ($) $ / shares shares | Dec. 31, 2022 USD ($) $ / shares shares | |
Options | ||
Outstanding at beginning of the year (in shares) | shares | 2,660,734 | |
Granted (in shares) | shares | 368,459 | |
Exercised (in shares) | shares | (285,860) | |
Forfeited/expired (in shares) | shares | (26,915) | |
Outstanding at ending of the year (in shares) | shares | 2,716,418 | 2,660,734 |
Exercisable (in shares) | shares | 1,653,502 | |
Weighted Average Exercise Price | ||
Outstanding, beginning of the period (in dollars per share) | $ / shares | $ 112.19 | |
Granted (in dollars per share) | $ / shares | 265.06 | |
Exercised (in dollars per share) | $ / shares | 71.68 | |
Forfeited/expired (in dollars per share) | $ / shares | 197.29 | |
Outstanding, end of the period (in dollars per share) | $ / shares | 136.35 | $ 112.19 |
Exercisable (in dollars per share) | $ / shares | $ 84.15 | |
Weighted Average Remaining Contractual Term (years) | ||
Outstanding | 6 years 10 months 24 days | 6 years 10 months 24 days |
Exercisable | 5 years 9 months 18 days | |
Aggregate Intrinsic Value | ||
Outstanding, beginning of period | $ | $ 511,474 | $ 372,068 |
Exercised | $ | 58,740 | |
Outstanding, end of period | $ | 511,474 | $ 372,068 |
Exercisable at end of period | $ | $ 397,651 |
Stock-Based Compensation - Rest
Stock-Based Compensation - Restricted Stock Units (Details) - USD ($) $ / shares in Units, $ in Thousands | 6 Months Ended |
Jun. 30, 2023 | |
Restricted Stock Units | |
Forfeited (in shares) | (879) |
Weighted Average Grant Date Fair Value | |
Forfeited (in dollars per share) | $ 227.53 |
Aggregate Intrinsic Value | |
Unearned stock-based compensation | $ 118,700 |
Weighted average recognition period | 2 years 7 months 6 days |
Restricted Stock Units (RSUs) | |
Restricted Stock Units | |
Unvested at beginning of period (in shares) | 124,680 |
Granted (in shares) | 98,040 |
Vested (in shares) | (28,201) |
Forfeited (in shares) | (6,117) |
Unvested at end of period (in shares) | 188,402 |
Weighted Average Grant Date Fair Value | |
Unvested at beginning of period (in dollars per share) | $ 213.97 |
Granted (in dollars per share) | 265.70 |
Vested (in dollars per share) | 215.38 |
Forfeited (in dollars per share) | 232.82 |
Unvested at end of period (in dollars per share) | $ 240.07 |
Aggregate Intrinsic Value | |
Unvested at beginning of period | $ 31,404 |
Vested | 7,692 |
Unvested at end of period | 61,163 |
Unearned stock-based compensation | $ 38,900 |
Weighted average recognition period | 2 years 3 months 18 days |
Stock-Based Compensation - Perf
Stock-Based Compensation - Performance Stock Units (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2023 | Mar. 31, 2023 | Jun. 30, 2022 | Mar. 31, 2022 | Jun. 30, 2023 | |
Restricted Stock Units | |||||
Forfeited (in shares) | (879) | ||||
Weighted Average Grant Date Fair Value | |||||
Forfeited (in dollars per share) | $ 227.53 | ||||
Aggregate Intrinsic Value | |||||
Unearned stock-based compensation | $ 118,700 | $ 118,700 | |||
Weighted average recognition period | 2 years 7 months 6 days | ||||
Performance stock units | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Revenue goal, performance period | 3 years | 3 years | |||
Restricted Stock Units | |||||
Unvested at beginning of period (in shares) | 77,472 | 77,472 | |||
Granted (in shares) | 90,434 | ||||
Unvested at end of period (in shares) | 167,027 | 167,027 | |||
Weighted Average Grant Date Fair Value | |||||
Unvested at beginning of period (in dollars per share) | $ 227.53 | $ 227.53 | |||
Granted (in dollars per share) | 263.16 | ||||
Unvested at end of period (in dollars per share) | $ 246.82 | $ 246.82 | |||
Aggregate Intrinsic Value | |||||
Unvested at beginning of period | $ 19,514 | $ 19,514 | |||
Unvested at end of period | $ 54,224 | 54,224 | |||
Unearned stock-based compensation | $ 44,600 | $ 44,600 | |||
Weighted average recognition period | 2 years 3 months 18 days | ||||
Performance stock units | Minimum | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Performance target, percentage | 0% | 0% | |||
Performance stock units | Maximum | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Performance target, percentage | 200% | 200% |
Stock-Based Compensation - Empl
Stock-Based Compensation - Employee Stock Purchase Plan (Details) - Employee Stock Purchase Plan | 6 Months Ended |
Jun. 30, 2023 shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Employee stock purchase plan, percent | 85% |
Number of shares reserved for issuance (in shares) | 1,077,720 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | |
Operating Loss Carryforwards [Line Items] | |||||
Income tax expense | $ 214,000 | $ 142,000 | $ 430,000 | $ 242,000 | |
Significant change to unrecognized tax benefits over the next 12 months | 0 | 0 | |||
Unrecognized tax benefits | 100,000 | 100,000 | $ 100,000 | ||
R&D credit | |||||
Operating Loss Carryforwards [Line Items] | |||||
Credit carryforwards | 1,700,000 | 1,700,000 | 10,100,000 | ||
Federal | |||||
Operating Loss Carryforwards [Line Items] | |||||
Net operating loss carryforwards | $ 126,500,000 | $ 126,500,000 | 257,400,000 | ||
State | |||||
Operating Loss Carryforwards [Line Items] | |||||
Net operating loss carryforwards | $ 183,300,000 |
Segment Reporting and Revenue_3
Segment Reporting and Revenue Disaggregation (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 USD ($) | Jun. 30, 2022 USD ($) | Jun. 30, 2023 USD ($) segment | Jun. 30, 2022 USD ($) | |
Segment Reporting [Abstract] | ||||
Number of operating segments | segment | 1 | |||
Segment Reporting and Significant Customers | ||||
Revenue | $ 151,092 | $ 91,386 | $ 278,989 | $ 160,768 |
United States | ||||
Segment Reporting and Significant Customers | ||||
Revenue | 144,749 | 87,876 | 269,234 | 154,302 |
All other countries | ||||
Segment Reporting and Significant Customers | ||||
Revenue | $ 6,343 | $ 3,510 | $ 9,755 | $ 6,466 |
Loss Per Share (Details)
Loss Per Share (Details) - shares | 6 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Loss Per Share | ||
Antidilutive securities excluded from computation of diluted weighted average shares outstanding (in shares) | 2,904,820 | 2,839,334 |
Common stock options outstanding | ||
Loss Per Share | ||
Antidilutive securities excluded from computation of diluted weighted average shares outstanding (in shares) | 2,716,418 | 2,751,825 |
Unvested restricted stock units | ||
Loss Per Share | ||
Antidilutive securities excluded from computation of diluted weighted average shares outstanding (in shares) | 188,402 | 87,509 |