Free cash flow remains highly volatile, swinging from a 25.9% margin in 2025Q3 to a 1.5% margin in 2026Q1, largely due to inconsistent working capital management and significant stock-based compensation.
| Cash from Operations | 136.53M | 116.98M | 130.25M | 24.65M | 11.57M | -20.12M | -53.05M | -33.38M | -18.69M | -15.79M | -17.95M |
| Operating CF Margin % | - | 12.83% | 16.22% | 3.95% | 2.84% | -8.62% | -45.97% | -40.68% | -36.95% | -55.28% | -109.27% |
| Operating CF Growth % | 3839.63% | -10.19% | 428.32% | 113.1% | 157.5% | 62.07% | -58.93% | -78.54% | -18.38% | 12.02% | - |
| Net Income | 131.14M | 145.42M | 53.51M | -21.15M | -44.88M | -42.04M | -57.2M | -33.24M | -21.83M | -17.51M | -18.53M |
| Depreciation & Amortization | 16.02M | 13.96M | 6.55M | 2.85M | 2.9M | 1.99M | 840K | 1.4M | 393K | 285K | 103K |
| Stock-Based Compensation | 129.93M | 0 | 116.01M | 82.47M | 0 | 0 | 12.82M | 0 | 1.22M | 243K | 248K |
| Deferred Taxes | 1.01M | -88.75M | 0 | 0 | 0 | 0 | -22K | 0 | -53K | 100K | -195K |
| Other Non-Cash Items | -84.48M | 133.73M | -7.51M | 1.27M | 51.74M | 26.79M | 1.4M | 5.04M | 714K | 315K | 180K |
| Working Capital Changes | -57.08M | -87.38M | -37.71M | -40.78M | 1.81M | -6.86M | -10.88M | -6.57M | 861K | 777K | 243K |
| Change in Receivables | -12.21M | -26.23M | -2.6M | -30.22M | -27.02M | -9.24M | -11.84M | -6.48M | -2.84M | -1.77M | -760K |
| Change in Inventory | -66.51M | -65.17M | -46.23M | -22M | 5.34M | -8.75M | -2.65M | -3.17M | 1M | -315K | 612K |
| Change in Payables | 12.9M | -3.75M | 604K | 9.3M | 14.36M | 4.78M | 2.05M | 1.03M | 439K | 1.82M | -480K |
| Cash from Investing | 11.75M | 21.45M | -113.12M | -294.82M | -19.6M | 29.14M | 86.63M | -43.56M | -83.39M | -7.6M | -306K |
| Capital Expenditures | -39.82M | -38.5M | -39.12M | -23.63M | -9.1M | -4.67M | -2.46M | -2.74M | -250K | -412K | -306K |
| CapEx % of Revenue | 4.35% | 4.22% | 4.87% | 3.78% | 2.23% | 2% | 2.13% | 3.34% | 0.49% | 1.44% | 1.86% |
| Acquisitions | 0 | 0 | 0 | 0 | 0 | 0 | -89.08M | 0 | 0 | 0 | 0 |
| Investments | - | - | - | - | - | - | - | - | - | - | - |
| Other Investing | 0 | 0 | 0 | 0 | -10.5M | 0 | 89.08M | 0 | -83.14M | -7.19M | 0 |
| Cash from Financing | -103.17M | -183.45M | -52.39M | 13.95M | 235.08M | 14.95M | 134.06M | 2.5M | 190.38M | 25.66M | 12.81M |
| Debt Issued (Net) | 0 | 0 | 0 | 0 | -24.5M | 0 | 0 | 0 | 8M | 458K | 0 |
| Equity Issued (Net) | -91.73M | -160.41M | -47.23M | 31.11M | 259.62M | 14.95M | 134.06M | 2.5M | 182.38M | 25.2M | 12.81M |
| Dividends Paid | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Share Repurchases | -100.01M | -175.02M | -75M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Other Financing | -11.44M | -23.04M | -5.17M | -17.16M | -43K | 0 | 0 | 0 | 0 | 0 | 0 |
| Net Change in Cash | 45.05M | -45.34M | -35.39M | -256.06M | 227.13M | 23.95M | 167.66M | -74.43M | 88.33M | 2.27M | -5.44M |
| Free Cash Flow | 96.71M | 78.48M | 91.12M | 1.02M | 2.47M | -24.79M | -55.5M | -35.59M | -18.94M | -16.2M | -18.25M |
| FCF Margin % | 10.57% | 8.61% | 11.35% | 0.16% | 0.61% | -10.62% | -48.1% | -43.37% | -37.44% | -56.72% | -111.13% |
| FCF Growth % | 22.65% | -13.88% | 8798.73% | -58.59% | 109.98% | 55.34% | -55.96% | -87.84% | -16.92% | 11.24% | - |
| FCF per Share | 3.37 | 2.64 | 2.98 | 0.03 | 0.09 | -0.91 | -2.13 | -1.49 | -1.30 | -1.20 | -1.46 |
| FCF Conversion (FCF/Net Income) | 0.74x | 0.80x | 2.43x | -1.17x | -0.26x | 0.48x | 0.93x | 1.00x | 0.86x | 0.90x | 0.97x |
| Interest Paid | 133K | 0 | 22K | 0 | 2.32M | 1.89M | 0 | 2.03M | 0 | 0 | 0 |
| Taxes Paid | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
Elective procedure demand sensitivity
As reported in recent financial filings, the relationship between net income and operating cash flow remains highly volatile, with the OCF/NI ratio fluctuating from -1.14 in 2026Q1 to 6.90 in 2025Q3, largely driven by significant non-cash stock-based compensation charges and erratic working capital movements.
The wide divergence between net income and operating cash flow suggests that GAAP earnings are currently an unreliable proxy for the company's actual cash-generating capacity. Investors should monitor the persistent reliance on stock-based compensation, which appears to be a structural feature of the expense base rather than a transitory item.
Based on the company's quarterly cash flow statements, free cash flow margins have exhibited extreme instability, swinging from a peak of 25.9% in 2025Q3 to a negative 7.5% in 2025Q1, reflecting the underlying difficulty in achieving consistent cash conversion during periods of aggressive commercial expansion.
The inability to maintain positive free cash flow suggests that the business model remains in a high-burn phase despite its maturity in the market. This trajectory warrants further investigation into whether the current cost structure can support sustainable cash generation without continued reliance on external capital or equity-based incentives.
According to historical data, working capital changes have frequently acted as a significant drag on cash flow, with a notable $42.6M outflow in 2025Q2, indicating potential inefficiencies in inventory management or delays in the collection cycle as the company scales its U.S. commercial footprint.
The recurring negative impact of working capital on operating cash flow suggests that the company's rapid growth is consuming cash faster than it can be recovered from operations. This trend may indicate that the firm is building inventory in anticipation of demand that has yet to materialize, creating a potential liquidity risk.
As evidenced by recent cash flow statements, the company has prioritized share repurchases, including $75M in 2025Q1 and 2024Q4, even while operating cash flow remained inconsistent, suggesting a management focus on supporting equity valuation rather than prioritizing internal cash preservation during periods of decelerating growth.
The decision to deploy significant cash toward share buybacks while operating cash flow is volatile appears aggressive and may limit the company's financial flexibility. Investors should monitor whether this capital allocation strategy remains sustainable if the current deceleration in revenue growth continues to pressure the firm's cash reserves.
Quick answers to the most common questions about buying INSP stock.
Inspire Medical Systems, Inc. (INSP) generated $117.0M in net cash from operating activities in 2025. This reflects the cash generated directly from core business operations.
Inspire Medical Systems, Inc. (INSP) generated $78.5M in free cash flow in 2025. Free cash flow is the cash left over after capital expenditures, which can be used to pay dividends, repurchase shares, or pay down debt.
Inspire Medical Systems, Inc. (INSP) spent $38.5M on capital expenditures in 2025. CapEx represents the cash invested in physical assets like property, plant, and equipment to maintain or grow the business.
In 2025, Inspire Medical Systems, Inc. (INSP) spent $175.0M on share repurchases. This shows the company's commitment to returning capital to its equity investors.