Hello, this is the operator. Today's call will begin shortly. Please continue to stand by. Thank you for your patience. Again, this is the operator. Today's call will begin shortly. Please continue to stand by. Thank you for your patience. Good day, and thank you for standing by. Welcome to the Inspire Medical Systems Q1 2022 financial results and business update conference call. At this time, all participants are in listen-only mode. After the speaker's presentation, there'll be a question and answer session. To ask a question during the session, you will need to press star one on your telephone. Please be advised that today's conference is being recorded. If you require any further assistance, please press star zero. I would like to hand the conference over to your speaker today, Ezgi Yagci. Please go ahead. Thank you all for participating in today's call. Joining me are Tim Herbert, President and Chief Executive Officer, and Rick Buchholz, Chief Financial Officer. Earlier today, we released financial results for the three months ended March 31, 2022. A copy of the press release is available on our website. On this call, management will make forward-looking statements within the meaning of the federal securities laws. All forward-looking statements, including without limitation, those relating to our operations, financial results and financial condition, investments in our business, continued effects of the COVID-19 pandemic, full year 2022 financial and operational outlook, and improvements in market access are based upon our current estimates and various assumptions. These statements involve material risks and uncertainties that could cause actual results or events to materially differ. Accordingly, you should not place undue reliance on these statements. See our filings with the Securities and Exchange Commission, including our quarterly report on Form 10-Q, filed with the SEC today for a description of these risks and uncertainties. Inspire disclaims any intention or obligation, except as required by law, to update or revise any financial projections or forward-looking statements, whether because of new information, future events or otherwise. This conference call contains time sensitive information and speaks only as of the live broadcast today, May third, twenty twenty-two. With that, it is my pleasure to turn the call over to Tim Herbert. Tim. Thank you, Ezgi, and thanks everyone for joining the call today for our first quarter 2022 business update. First, today is the fourth anniversary of our initial public offering, and we wish to recognize and thank all the shareholders who have supported Inspire therapy, which has helped almost 25,000 patients address their obstructive sleep apnea. With that, we are pleased to report on a very strong first quarter with a 72% revenue growth over the same period last year. In this first quarter, our business did experience the expected seasonality, but similar to 2021, we experienced the additional challenge from a resurgence in COVID cases. However, the pandemic impact dissipated as we moved through the quarter and Inspire procedures quickly rebounded across the U.S. and Europe to drive the strong results. Our commercial execution leveraged both the existing centers as well as the newly activated hospitals and ambulatory surgical centers. In addition, we continued to improve the process of connecting patients with healthcare providers through our Advisor Care Program, as well as our expanded direct-to-consumer advertising campaign, thereby creating a greater number of appointments for patients seeking Inspire therapy. In the first quarter, we generated worldwide revenue of $69.4 million, again, representing a 72% increase compared to the first quarter of 2021. Seasonality and the COVID resurgence negatively affected procedure volumes early in the quarter, but volumes rebounded nicely as the quarter progressed. As such, we have confidence in the outlook of our business for the remainder of 2022 due to the momentum in the second half of the first quarter, the positive trends in implant activity, and the planned expansion in the number of implanting centers in new territories. Therefore, we are increasing our full year 2022 revenue guidance to a range of $336 million-$344 million from our previous guidance of $318 million-$326 million. This guidance represents an increase of 44%-47% over full year 2021 revenue of $233.4 million. As always, I would like to reiterate that our primary focus remains on patients to ensure that each and every one has the best possible outcome from Inspire therapy. With that, let's now get into the details surrounding the first quarter, beginning with capacity. During the quarter, we added 74 new U.S. implanting centers, ending the period with a net total of 733 centers. Similar to what we have reported over the past several quarters, the rate of growth of new ambulatory surgical centers is slightly higher than that of hospitals. At the end of the first quarter, ASCs made up 22% of all U.S. centers. The number of centers is net of the 25 inactive centers deactivated in the first quarter, as discussed during our Q4 earnings call. We will continue to monitor and ensure the field team is focused on accounts that can provide the greatest benefits to patients moving forward. For the rest of the year, we continue to expect to add between 52 and 56 centers per quarter. Regarding the U.S. sales team, we created 17 new sales territories in the first quarter, bringing our total to 174. While this was ahead of our guidance, we continue to expect to add 11-12 new territories per quarter during the remainder of 2022. We also increased the number of field clinical representatives by adding 14, ending the first quarter with 93. During the rest of the year, we will continue to scale our sales management and training teams to optimize our ongoing expansion and to focus on strong patient outcomes and center productivity. This builds upon the changes that we implemented early during the first quarter, where we expanded our U.S. sales leadership team, which now includes eight area vice presidents and 30 regional managers. As the team grows more comfortable with their roles, we expect higher productivity resulting in more Inspire procedures while maintaining and improving patient outcomes. Turning to reimbursement and coding, the new CPT codes for Inspire have been in place since January 1, which has allowed payers and implanting centers to get the new codes implemented into their systems. There are always some logistical issues when transitioning to the new codes, but the Inspire team did a great job with training implanting centers and working with payers to ensure a smooth transition. These new codes for both the Inspire procedure as well as the drug-induced sleep endoscopy will be an important benefit for Inspire therapy and have a long-term impact. Finally, with the increased cost of components and materials, Inspire is implementing a 5% price increase for all centers in the U.S. beginning in May. We have contractual pricing agreements with all U.S. centers, and therefore, the price increase will be phased in over the next several quarters, and therefore, we expect the impact on 2022 revenue will be minimal. Inspire has not had a price increase for four years, while the facility reimbursement has increased approximately 9% over this time period. Our growth continues to focus around utilization improvements at existing centers and setting utilization targets for newly activated centers. Paramount to this is improving our ability to assist interested patients with making a connection with a qualified healthcare provider. Importantly, our outreach programs continue to be very effective in generating interest in Inspire therapy primarily through the InspireSleep.com website. For the first quarter, the number of visitors to our website was approximately 4.7 million, an increase of 170% year-over-year. From these visits, we had approximately 24,000 physician contacts. To note, these physician contacts represent the calls and emails to the Advisor Care Program or directly to a physician's office and does not include participation in community health talks. As we now have broader geographic physician and facility coverage across the United States, we have adapted our direct-to-consumer project to include national TV advertising buys. This is the key driver behind the significant growth in web activity, especially very early in the year. National buys are significantly more cost-effective and simply provide greater exposure to our potential patient base and include many areas in the U.S. where there has not been any media activity. The growth in web activity leads patients to connect with our Advisor Care Program or ACP, which now serves approximately 80% of our centers. We intend to continue to expand our ACP throughout 2022, which will include many technology advancements to improve our ability to assist patients make appointments as well as to help them through the overall process. With the number of calls and our growing experience with the ACP, we now have a significant data set to determine the key sticking points for patients along their process. Notably is the number of patients who have not had a sleep study for over two years as required by Medicare and many of the commercial insurance payers. We also realize that it can be challenging for patients to quickly obtain another sleep study. Therefore, we are working with our sleep physicians to improve this process and have also begun implementing technologies to add capacity in sleep centers. Recently, we announced partnerships with two private digital health companies, EnsoData and Ognomy, which will further these efforts. EnsoData increases sleep capacity and efficiency with their FDA-approved sleep study analysis platform, EnsoSleep. Using artificial intelligence, EnsoSleep automates the scoring and analysis of in-lab and home sleep testing, allowing clinician time to focus on patients. EnsoSleep is available in over 500 sleep centers in the United States, analyzing over 30,000 sleep studies per month, and many Inspire centers are already using this technology. Ognomy is an early-stage startup built by physicians to increase access to sleep apnea care by shifting diagnosis and treatment from the clinic to patients' homes. At the core is the Ognomy app, which provides the interface between the patient and the sleep physician, allowing clinicians to see and manage patients from any location. Following a digital consultation, the physician can order a home sleep study to be sent directly to the patient. Generally, the patient can receive a completed sleep evaluation and clinician follow-up in just a few days. Moving on. Our international business had a strong quarter, driven by increased procedure volumes in Europe. We remain very optimistic about our European prospects, particularly in Germany. While our international business is not subject to as much seasonality as in the U.S., we did experience procedure delays due to COVID in Germany early in the quarter. As with the U.S., we have seen a strong rebound late in the first quarter, and we expect this momentum to carry forward throughout the year. The team is excited about completing our initial procedures in the United Kingdom during the first quarter and have several additional procedures scheduled. We continue to refine the reimbursement in the UK and will begin training additional centers. Most recently, we have been notified that Inspire therapy has been approved for countrywide reimbursement in France. This is a very positive step following years of developing the clinical evidence necessary. We will work with the French authorities over the next few quarters to determine the proper reimbursement level as we plan for a broader launch of Inspire therapy in France. In Japan, we remain excited about the opportunity, along with our partner, Japan Lifeline, continue to train additional physicians following the first Inspire implant performed at Tokai University in February. Multiple physician teams are now screening for potential patients at about 10 hospitals in Japan. As I stated on our last call, we have entered into agreements with distribution partners in Singapore and Hong Kong. Our initial focus is introducing Inspire therapy in Singapore, working with physicians at Singapore General Hospital. We are pleased to announce that our partner, EASmed, has placed the initial order for product, and the first implants are scheduled for late May. The physicians continue to discuss Inspire with other patients as we expect several more implants yet in the second quarter. Once Singapore is active, the team will continue to initiate Inspire programs in Hong Kong, as well as start the early planning in South Korea. In Australia, we continue to work with the authorities on establishing reimbursement in that country. Turning to R&D. We are very optimistic about our new Bluetooth-enabled patient remote that was approved by the FDA in December. As we said previously, this new version allows information from the implanted neural stimulator and the patient remote to be uploaded to the Inspire Cloud via patient smartphone, making it easier for physicians to monitor Inspire patients. We remain in the soft launch period to provide us with a full system-level test of the patient remote and Inspire Cloud interface. We continue to plan for a full product introduction at the American Academy of Sleep Medicine meeting in June. The Inspire Cloud patient management system continues to expand as we add centers in the U.S. and in Europe. We expect Inspire Cloud will become an important tool for physicians to monitor patients' experiences and outcomes. Later this year, we expect to submit our upgraded physician program for FDA review. This new programmer connects with Inspire Cloud and is key to the next step of providing remote patient programming. During the fourth quarter of 2021, we formally submitted our request for full-body MRI compatibility to the FDA. We continue to interact with the agency during the review and are confident that we will receive approval within the 180-day review period. This approval will not require any changes to the existing Inspire system. Longer term, we continue work on the design for our fifth generation neural stimulator. The Inspire Five device will eliminate the pressure sensor and incorporate something inside the neural stimulator using an accelerometer to measure respiration. We continue to target FDA approval in late 2023. In summary, we continue to experience significant momentum in all key aspects of our business, and our focus on patient outcomes and physician education support our confidence in the continued growth of Inspire. Our core focus for 2022 remains increasing utilization at our existing centers, as well as increasing capacity by opening and training new centers. The continued expansion of our call center and investments in our DTC campaign support these initiatives. We remain extremely excited about the future prospects and are confident that we have the appropriate strategy in place to drive long-term shareholder value. With that, I'd like to turn the call over to Rick for his review of our financials. Thanks, Tim. As Tim noted, the Inspire team delivered a strong first quarter. Total revenue for the first quarter of 2022 was 69.4 million, a 72% increase from the 40.4 million generated in the first quarter of 2021. U.S. revenue in the first quarter was 66.4 million, an increase of 76% from the 37.8 million in the prior year period. In the first quarter, revenue from outside the U.S. increased 14% to 3 million. The growth in the U.S. reflects several factors, including a larger number of implanting centers, expanded direct-to-consumer marketing, and an increased number of territory managers and field clinical representatives. As Tim discussed, we did experience some typical seasonality in our business in the first quarter, and COVID created some early quarter headwinds. The U.S. average selling price in the first quarter was 23,800, which was consistent with the prior year period. The ASP outside the U.S. was 22,200 during the quarter compared to 24,400 in the first quarter of 2021, which was driven primarily by exchange rates. Gross margin in the first quarter improved to 85.6% compared to 85.2% in the prior year period due to manufacturing efficiencies and higher sales volume. Total operating expenses for the first quarter were 75.4 million, an increase of 51% as compared to 50.1 million in the first quarter of 2021. This increase was due to the expansion of our sales organization, increased direct-to-consumer marketing programs, continued product development efforts, and general corporate costs. The increase in operating expenses is reflective of our ongoing plan to drive continued growth and to make investments in key areas of our business. Our net loss for the first quarter was 16.7 million compared to 16.2 million in the prior year period. The net loss per share for the first quarter was 0.61 per share, nearly consistent with the net loss per share of $0.60 in the first quarter of 2021. The weighted average number of shares outstanding for the first quarter was 27.5 million. We anticipate that the weighted average number of shares for the second quarter will be approximately 27.6 million. Moving to the balance sheet. As of March 31, our cash and investments totaled 213 million. This strong cash position allows us to remain focused on executing our growth strategy of increasing procedure volumes at existing centers and training and opening new implanting centers. As we stated earlier, while business conditions have improved, we continue to monitor the impact of the pandemic as we did experience some challenges in January and early February. However, our strong performance and recent implant trends provide us with confidence in our outlook for the remainder of the year. Therefore, we are increasing our full year revenue guidance to a range of 336 million-344 million from our previous guidance of 318 million-326 million. This revised guidance represents 44%-47% growth over full year 2021 revenue. In summary, the key metrics throughout our business remain strong, and we are well positioned to achieve significant long-term growth. We are extremely pleased with our first quarter performance and are excited to continue executing on our growth strategies. With that, our prepared remarks are concluded. Cindy, can you please open up the call for questions? Thank you. To ask a question, you may press star one on your telephone keypad. Our first question comes from the line of Travis Steed from Bank of America. Your line is now open. A little more color on March and April and how you thought about COVID in your full year guidance. I know you don't give Q2 guidance, but should we expect a little bit more of a sequential uptick this quarter given the COVID impact in Q1? Just any color on that would be helpful. Travis, we missed you. How are you? We missed you right at the beginning. Can you repeat? Yeah, I was wanting to get a little more color on March and April and how those are shaping up versus early Q1, and how you thought about COVID impact in the full year guidance, and any sense for Q2. Yeah, absolutely. We, as we mentioned, January always starts out a little slow, especially with our seasonality, but COVID really was focused in the first six weeks in the U.S. and in Germany, and so we had a strong rebound in second half of February and March. That really allowed us to up our guidance. The key to it is, in March, we saw a little bit of a rebound making up those cases and the real growth started in April, but we really like the momentum. We are careful about COVID, but we haven't really built in another concern that we're gonna have another COVID resurgence. We're comfortable where we stand with our ability to connect the patients with the healthcare providers. All right, great. I'd love to get a little more color on the price increase that you're putting through. I'm assuming that's just U.S.-based price increases and any feedback from your customers and, you know, the offset, you know, how are you thinking about some of the cost pressures that you're seeing on your side of the business? Sure. As we talked about, Travis, we just started the price increase this week, actually, on May first, and it's really more of a long-term, more of an impact in 2023. We provide guidance on annual basis, you know, through 2022, but the increase will be phased in over the next several quarters because we have fixed formal pricing agreements in place with all of our customers. We have seen some increased costs of our components and of our materials, but again, those increases have not been significant. You know, with that said, we have not really encountered pricing pressure on our gross margins, and so we're gonna maintain our gross margin guidance of 85%-86% for 2022. Still a little too early to comment on 2023, but we'll update you as we get closer to the end of the year. Great. Thanks, congrats on the quarter. Thanks, Travis. Next question from Robbie Marcus from JPMorgan. Your line is now open. Oh, thanks. I'll add my congratulations as well on a nice quarter. Thanks, Robbie. You know, it’s great you gave the stats on patients visiting the website, and it’s great to see that it’s starting to bear some fruit from the national advertising program. You know, what we can’t tell from that is sort of the feedback you’re getting from patients and from physicians about the continued CPAP supply shortage and manufacturing issues that the two of them are having for different reasons, and how it’s impacting new patients moving into the clinic seeking out Inspire. Anything you could add there, and if there’s, I know you’ve talked about in past quarters how difficult it is to quantify. If there’s any, you know, even qualitative quantification you could add, that’d be great. Yeah, that's exactly what it is. It is. We do get feedback from the call center. We do get feedback from physicians that they are seeing an increase in patients looking for therapy because of the shortage of CPAP and the extended recall that Philips is dealing with. We know it's having an impact. We are certainly communicating now nationally and really focusing on those patients that are unable to benefit from CPAP, which includes those patients under recall. As we said before, we can get those patients approved with their insurance company. We're certainly out communicating with those patients as best as we can. We know it does have a positive impact now as it will going forward. I think the real positive long-term A paradigm change that we're seeing is we are now seeing sleep physicians more, earlier in the process talking about alternative therapies. That really is driven by the fact that they just don't have the CPAP to be able to provide their patients. At the upcoming AASM meeting, American Academy of Sleep Medicine in June, we're really gonna be emphasizing that point with the sleep physicians and making sure that they are aware that there are alternative therapies. Internally, we call that program Win with Sleep and making sure that this community sleep physicians are certainly aware of Inspire and where they can refer their patients to be able to receive Inspire. Great. Maybe just as a follow-up, you know, another really nice quarter in center adds here and what's a difficult quarter, just, you know, with the backdrop of Omicron. Maybe talk about the pipeline you have on new centers, the enthusiasm, and is it predominantly ASCs or are you also seeing some non-ASC centers as well? Thanks. Well, right now we're seeing 22% of our centers are ASCs, and after cleaning up a little bit, that's a little bit of an increase, but it's pretty consistent with where we were in the fourth quarter. Meaning that while ASCs are opening at a slightly higher rate, we are still very active in opening hospitals and really broadening out with some of the national campaigns we have with Ascension and some of the other larger hospital systems, but also getting into the community hospitals as well. So we'll continue to focus on both. There's a lot of enthusiasm out there to be able to take care of patients. Certainly we have the demand from the patient standpoint. With the national awareness campaigns, it really kind of excites areas that previously they just didn't have any TV, they didn't have any of the awareness programs. We're really able to kind of reach a much broader patient group, and that translates into additional centers that wanna make sure that they offer Inspire therapy. Great. Thanks a lot, guys. Thanks, Robbie. Your next question from Amit Hazan from Goldman Sachs. Your line is now open. This is Phil for Amit. Thanks for taking the questions as always. If I could, I think maybe circle back to Travis's question and ask Rick to provide a little bit more, a reminder on kind of the relationship you guys have with your contract manufacturer. We heard some increases in component prices, but I believe that there's sort of a duration or a time parameter in which the contract manufacturer can potentially raise against you guys. Is the pricing increase related to kind of a prospective price increase that you're expecting from your contract manufacturer, even though the GM is obviously strong in this quarter and for the year? Can you- Yeah, we think. Can you give us a little bit more context for that one? Sure. We think that. Well, we always hold at least a one-quarter safety stock of product, if not much greater than that. It's as we start moving forward, we won't see those impacts, probably till later in the year, if in fact they exist. We're gonna continue to work closely with our suppliers to make sure that we control those costs. We know that there are some material costs going up, and that's what started the cost increase. We don't think that's gonna really affect us till later in the year, and we don't think it's gonna have a effect on the gross margin. That's why we're holding guidance on that. We're working closely with our contract manufacturers. Yes, these are multiyear agreements that we have with them. Okay. That's really helpful. Back to the top line and to guidance, I thought it was interesting that pruning the 25 centers inactive and reiterating of the territory and the center assumptions for the year despite lifting the top line. That's obviously an implication on utilization for center. Is there more pruning to be done on you guys' kind of forward view? I guess just ask a quick third one if I can. The visibility of the pipeline, do you feel like there was any sort of remaining backlog, excess backlog that gives you increased confidence to raise by so much more than the beat in the quarter? Thanks so much for taking the questions as always. Absolutely. I think going back to the centers, we continually monitor our centers. Physicians do move, and when they move, if there's not a physician to replace them in that center, it's difficult for that center to continue, so we will put them on hold. We'll continue to monitor centers to make sure that they are as productive as they absolutely can be. No, it's not just a one-time thing to prune 25. I think it's an ongoing thing, and we don't see a significant number going forward. There's always changes in focus at centers, and we want to have the most productive centers moving forward. Again, a lot of excitement with centers, and we are able to kind of see the pipeline. I think for the most part, we worked through a lot of the rebound from January and patients that had to have their cases suspended. There are probably and I'm sure there are some in Europe, but also in different parts of the U.S. to get them rescheduled. We're really seeing strong growth from the web activity, from the contacts, from the Advisor Care Program that gives us the confidence with the momentum to increase the guidance. Did I tackle the third question too? Yeah. That's great. Thanks. You bet, Phil. Your next question from Danielle Antalffy from SVB Leerink. Your line is now open. Hey, good afternoon, guys. Thanks so much for taking the question. Hi, Danielle. Hi. Tim, I was hoping you could talk a little bit about a little bit more about how new centers are ramping. ASCs are becoming a bigger piece of the new centers that you're bringing online every quarter. Just wanted to get a sense of whether you're seeing ASCs ramp faster than prior centers or slower. Any color you can give there, and then I have one follow-up. Okay, absolutely. We do see excitement. A lot of times, new centers are driven by a physician's need to increase capacity to do more cases. In a hospital, they may be limited by the number of OR days that they would have. Oftentimes, we will open up an ambulatory surgical center for a physician group, so they have multiple sites of service. That does give them the flexibility to schedule additional cases and build their own capacity. On the other hand, we also have new centers where they're building new teams of sleep physicians, ENTs at hospitals, and oftentimes they may also have an ambulatory surgical center to open up brand-new programs. We have fellows programs, educational programs that teach the graduating ENTs, if you will, about Inspire, and we let the existing Inspire centers send patients. Just this last week, we met with over 50 ENT fellows. Many are graduating, and when they graduate, they go to their hospital, and they open up their new Inspire center because they have so much Inspire experience. The pipeline is very strong for opening new centers. As we talked about, we're just barely penetrated in the number of centers that one day we'll be offering Inspire. Long way to go there. I'm very excited about that. Got it. Then as you think about the utilization at centers and just how, generally speaking, ASCs, I think are more efficient in pushing procedures through than hospitals and more focused as well. How should we think about the mix of procedure volumes going through ASCs versus hospitals, you know, evolving over the next year or two? Does that matter at all when it comes to, you know, your ability on like you're taking price, for example, so pricing and contracting or, does that not matter? Thanks so much. Well, there's always different contracting rules with ASCs as far as ASCs and third-party payers, right? They need to, excuse me, specifically contract that. We do provide assistance to ambulatory surgical centers, so they have the data necessary to work with UnitedHealthcare, to Aetna, to their primary payers to make sure that they have the proper reimbursement. Then from a Medicare standpoint, the Medicare rates in ambulatory surgical centers are less than hospitals. That can put some challenges in those areas that don't have high reimbursement rates down in the South as an example. We need to work with those ASCs. What they do for the most part is they just make sure that they have balance between the commercial cases and Medicare cases to make sure that it's economical for the ASC, and we're able to do that. I think, what was the first part of your question? Just the evolving mix because ASCs presumably are more efficient at doing procedures and potentially I think could get utilization higher. Tell me if I'm thinking about that incorrectly. No. You know, if the mix will change over time of the procedures, not just centers. Right. Mix of procedures being done at ASCs versus hospital and whether that matters. I'm not sure it does, but. I think we're still growing with the number of ASCs being at 22. I think the overall number of procedures is still growing too, but maybe not there yet. Yeah. While ASCs do provide us the flexibility, the key to it, going back to the two-incision implant and reducing the OR time, is we do see more surgeons scheduling three cases in a day, and that is another way that really allows them to grow their capacity. They just have more flexibility in scheduling at ASC versus competing for OR time at some of the larger hospitals. Right. Okay. Thank you. You bet. Thank you. Your next question from Richard Newth from Truist. Your line is now open. Hi. Thank you for taking the questions, and congrats on the good quarter, guys. Thanks, Rich. Maybe just to start off on the ASC question that you've been getting. I think you said earlier on that ASC growth or your growth in ASCs was slightly higher than the growth that you're experiencing in hospitals with the utilization and efficiencies you just highlighted there. That makes sense. I'm curious, should we expect that delta or the divergence of growth rates to continue to expand? Just trying to get a sense if you know how correlated the ASC adoption is going to be to utilization growth. I think as we said kind of a while back, we do expect that there will be a day that you'll see 50% of the centers being ASCs and even 50% of the procedures being conducted in ASC because Inspire lends itself so well to the outpatient setting. That will be a trend I think will continue to grow and will continue to drive growth moving forward. Okay. I guess just the trend of growth within the ASC setting though, that growth rate relative to, you know, the hospital setting, is that growth rate gonna continue to accelerate, you think, relative to the non-ASC portion of your install base? Yeah, to the hospitals or larger medical centers. I do think that growth rate will continue to grow. The other reason to say that is it's just easier logistics and working contractually to work through the value committee to be able to open up an ASC. I'll ask Rick to comment on the level of penetration we have with some of the larger payers like ASC and USPI, and it's a lot easier for us to open up those centers that allows us to open them quicker. Yeah. Hi, Rich. You know, we've talked about those seven national agreements that we have, and those agreements cover about 1,100 centers. Last quarter, we were about 15% penetrated in those centers. We won't get into all of them, but we're still under 20% of those centers under national agreements. That gives us continued confidence that we have a strong pipeline of center additions going forward. Okay. Thanks for that. On the international front, you guys have a lot of irons in the fire here. You know, they might not all come and contribute all at once in 2022, but as I think about, you know, Hong Kong, Singapore, obviously Japan gaining steam, now France, you know, Germany picking up, post-Omicron. I guess looking into 2023 and beyond, it feels like the international momentum could really be starting to near an inflection point. Can you help us size or quantify that? Correct me if I'm off base here. You know, is it wrong to kind of view 2023 as a step function potentially in the growth rate for international? It just seems like there's too many things starting to combine that wouldn't be the case. Would love a little more color there. Thanks. I think that's fair. I think today we're dominated with the performance in Germany, and Germany makes up the great majority of all of our international revenue. The contribution to global revenue is down to mid-single digits now, and we wanna be able to turn that. Now, we don't wanna slow down the United States' revenue growth, and we just talked about how we're just in the early stages of penetration there, but we certainly wanna increase international and not be just in Germany. We didn't touch on the Netherlands, but they have a great breakthrough in their reimbursement, and we're opening additional centers there. We've always been limited to just two centers, so Netherlands is gonna have growth. We're expecting a decision in Belgium, Austria, Switzerland. Now having a breakthrough in France and the U.K. really kind of gives some excitement to the European team, albeit each of those takes their own time to be able to ramp that growth. I think it's fair to say that it is gonna have a significant growth in the revenue, which we are very happy about. Not to mention, the Asia team is excited too. Doing the first implants in Singapore yet this month is pretty exciting. Great. If I could just squeeze one more in. Rick, just OpEx. How do we think about the, you know, relative to the 1Q OpEx levels, for the rest of the year, increasing and at what pace? Comparable to our previous quarters from a dollar perspective. Okay. Thanks a lot. Your next question from Jon Block of Stifel. Your line is now open. Thanks. Great. Hey, Tim and Rick. Hope all is well. Maybe the first one, Tim, just if you can talk about the national advertising initiative, you know, how do you think that's going? It seems like the web hits really increased, but, you know, what about the quality of those web hits? Do you believe they're converting well further downstream? Any thoughts on, you know, early sort of returns on that sort of, you know, bigger initiative that you guys kicked off earlier this year? Right. Early in the year when we started the national campaign, we cover every territory at once, and so we turned everything on for the first couple weeks, and that's why we saw just a tremendous spike in web hits early in the year. Then what we do is we go into a cyclic mode in different parts of the U.S. where we'll go, like, two weeks on, two weeks off. It's not a continuous run, and that's how we build the efficiencies into it. What we've also done on the web pages, we've introduced some additional filters to help patients determine if they're good candidates and to get them to the right physician. We do have a question in there, a little survey on their experience with CPAP, on their history. Before they call the Advisor Care Program or go directly to a physician's office, that they're able to kind of see if they're a good candidate. That helps improve the quality of the candidates that are going to the centers and really help the long-term conversion rates, if you will. We're trying to do some things on the web activity as well as with the Advisor Care Program to get more quality individuals to the centers. Got it. Very helpful. Then maybe I'll take just another shot from sort of a, you know, an OpEx or an EBITDA perspective. You know, last quarter, you guys turned the corner on adjusted EBITDA, and obviously that was Q4. In, in one Q, you always have the seasonal component. When we think about exiting 2022 or even full year 2023, you know, I don't get any pushback on you guys from top-line growth, but there's you know, some more about the sustainability of turning the corner. When we're exiting 2022, any thoughts on recapturing an EBITDA positive profile? What about full year 2023? Is that the year where we can see turning the corner on a full year basis for adjusted EBITDA? Thank you. Yeah. First, we won't comment really on 2023, John, just because we provide guidance for this year. We've said this before too, you know, profitability is important, but we are still so very early in the penetration of potential centers and the potential number of procedures that we're really focused on making those investments by adding new centers, adding new territory managers, and making other investments that will drive several quarters and years of revenue growth rather than really optimizing our P&L to produce net income in the short term. We did have more leverage in the fourth quarter. We have seasonality and the impact of COVID in the first quarter. Year-over-year, we did show a little bit of leverage compared to the first quarter a year ago. We know it's important. We will continue to focus on our growth strategies and drivers, and we're maintaining our gross margin range of 85%-86%. We'll be watching that, and we know it's important. Fair enough. Thanks, guys. Cindy, are you there? Yes. Your next question from Lei Liu of Wells Fargo. Your line is now open. Hi, it's Lei calling in for Larry. Thanks for taking my question. You had really strong growth, obviously, for Q1. You're expecting the positive momentum to continue. Can you talk about any bottlenecks or rate limiting factor in your production of your devices just given the supply constraints we've heard otherwise across the industry? Yeah. We monitor that extremely closely. The advantage we have is we really only have four or five products, right? With the neurostimulator, the stimulation leads. The neurostimulator and the sensor are two components, a lot of custom components in there that we have a good supply of. We don't have too much risk there. We do have standard electrical components, and that can be challenging for everybody. There have been a couple circumstances that we've had to identify replacement parts and have gone to the FDA to get a 30-day approval, and that's gone very well. We are managing several quarters out to make sure that we stay on top of it. The team's doing really a good job. This goes back to the start of the COVID way back in 2020 when we started looking at where are our sites of manufacturing, what is our supply chain for electrical components as well as raw materials are also challenging if you're not on top of it. Some of the plastics that we used in the patient remote housing as an example. We're able to overcome that because we do hold the safety stock, and we're working out several quarters in advance. Yes, we have the same challenges of everybody. I just think our team is really strong and have really been on top of it and have been able to maintain our safety stock. Got it. You, I think you mentioned earlier you have at least one quarter of inventory in place. Yes. Is that right? Okay, great. I'm not sure if you mentioned this earlier, Tim. Inspire is obviously indicated for post CPAP, but just given the CPAP supply issue in the market, have you seen instances where patients are permitted to leapfrog that and move to Inspire system directly? Okay, maybe a little bit. I think we're careful with that because I don't know if it's called leapfrogging because they just don't have a CPAP device that they can benefit from. In essence, they are not able to receive benefit, and so therefore, they qualify for Inspire. What you're also kind of hinting at a little bit is when does Inspire kind of move up the therapy ladder and be more of a first-line therapy? That day will come, but we need to do some more development and conduct some additional clinical studies to be able to get that. In the meantime, I think your point is strong that we are changing the paradigm of sleep physicians, and they talk about Inspire much quicker than they had in the past. Maybe that's a forced function because they just don't have, CPAP devices to provide those patients. Great observation. Are you seeing the payers being on board with that type of therapy where if the CPAP is not available, they are allowing patients to move Inspire? I guess as you're seeing some patients doing that, is that a tough process? Most payers will allow that, and Okay They're supportive of that because they know the need to treat patients with moderate to severe obstructive sleep apnea because the risks are so significant. Other payers will probably challenge it a little bit more to see if CPAP's available. Again, we have policies, positive policies with most payers and, they're supportive of Inspire. Great. Thanks. Nice quarter. Thanks, Diane. Your next question from Adam Maeder from Piper Sandler. Your line is now open. Hi, Tim. Hi, Rick. Hey. Congrats on the quarter, and thanks for taking the questions here. Appreciate you squeezing me in. Two quick ones from me. First, would just love to hear a little bit more about the partnership investment collaboration with the digital health companies. You know, maybe just a little bit, you know, rationale behind those investments, how quickly you think they can expand capacity, streamline the funnel, and then I had one follow-up on the pipeline. Thanks. Sure. I think it goes back a little bit to what John was asking too about the conversion rates and how do we help people get through the pipeline. As we looked at that data, one of the biggest stumbling blocks is if they need an updated sleep study, 'cause they haven't had one in two years. When we go back, the sleep labs have capacity issues as well. We just needed tools to be able to improve on that. EnsoData's been around for a while. We've known about them. They are well-known in the sleep community. And like I said, they're in over 500 centers and many of our centers already use EnsoData. It doesn't take over the sleep physician's job. What it does is makes them more efficient 'cause it uses their AI to automate the scoring. What they can also do is improve the quality of the scoring because if you're using a level three sleep device that doesn't have sleep parameters, they can actually estimate the total sleep time and not just calculate total time in bed, which is just two factors for AHI. They, the sleep physicians, actually get a higher reimbursement because it's a better quality sleep score. It was natural for us to partner. We will interface technology and so the data will be able to plug into Inspire Cloud. As part of our long-term digital development program to allow physicians to have quick access and easy access to patient management on Inspire Cloud. Ognomy is just a little earlier stage, but it was made by a sleep physician who was skiing and couldn't see his patients. He created an app to streamline that whole process. We think that we're gonna be running a pilot program with that as early as next week, with some of our centers to really help those patients who wanna talk to a doctor about Inspire, but they don't have an updated sleep study. We need to find ways to really effectively and efficiently get those studies done. Really helpful color, Tim. For the follow-up, just quickly on the pipeline. First, full body MRI labeling. Did I hear correctly that's still tracking and just maybe refresh my memory. Should we expect that kind of in the next couple of weeks then if it's 180 days from a Q4 submission? And then on the Gen five IPG, I think I heard that was still tracking to late 2023. Maybe just talk quickly about what's left to do there, you know, prior to submission to FDA. Absolutely. Thanks for taking the question. On the MRI, yes, we've been answering questions. Typically, when you do a 180-day PMA supplement the submission, you typically get FDA questions around day 100. We have received those questions. We've responded to those questions and we go and do clarifications. Hopefully we can work interactively to solve the rest of those questions and we will see FDA come back and approve that here in the second quarter. I don't think you're gonna see in the next couple weeks. That's still our target. Pending any additional questions from the FDA, we expect to stay on that. FDA has been very, very good about doing reviews in a timely fashion and they've been very interactive with us as well. We have a good relationship, and hopefully we can answer all their questions and get the approval yet here in the second quarter, which will really be exciting and really good news for the patients because that goes back and that MRI approval will apply to any patient who has had an Inspire device since the Inspire IV was launched maybe four years ago. Really good news not only for new patients, but patients who have had Inspire for quite some time. The Inspire V device, the key process right there is the application-specific integrated circuit, the ASIC. We do have the second generation in-house. We are evaluating that unit. So far things are good, and if that comes through, that's gonna hold schedule. We're still looking at submitting to the FDA at the end of this year. We have done three pre-subs or pre-submission meetings with the FDA on the Inspire 5, and things are going very well. The FDA is fully on board with our timing for submission. The work that we need to do now is really about a lot of the engineering and production qualification. That's an extensive testing, and we'll take the rest of the year to be able to get that all done. Yes, we're planning still to submit the end of the year. Great. Thanks for the extra color, Tim. You bet, Adam. Your next question from Mike Polark of Wolfe Research. Your line is now open. Good evening. Just two quick ones. Bridge on the guidance, 6% revenue increase to the forecast. The contribution from the price increase versus, you know, increased volume, it sounded like the price increase is gonna phase in such that it's, you know, maybe 1% or 2% of the guidance increase, or is it even that much? I just wanna get the split on the increased outlook, how much of that is the price increase versus volume? It's really not even that, Mike. It's really minimal impact to 2022 as we sit here today because we're just rolling that out, and that will be phased in based on the pricing agreements with each of the customers. Again, it's more of a 2023 item, but we'll keep you posted on that. That's procedure growth. Uh, so it's- Yeah. It's volume growth. 10-4. The follow-up is just a little bit of background as you continue to generate all this inbound interest from your consumer outreach programs to the ACP. Curious if you have any data, whether it be first website visit or first ACP contact for a patient that successfully gets Inspire. How long is that lag? I go to the website, and I go through the whole process, and I get Inspire. On average, how long is that taking? Or, you know, the other measurement would be first contact to ACP. I successfully get through the process, get Inspire. What's the average time that you see in your data? Yeah, it's a great question. Usually from the first ACP contact to implant is on average about four months. We can really get in and look at what are the key factors that are driving that. If you think about, we want patients when they would contact the center to have an appointment certainly within the first 30 days. After they have that initial appointment to get their sleep endoscopy procedure, submit to the insurance company to get their prior authorization approval, and then schedule the operating room time. The key to it is most surgeons can try and get that done in about 30-45 days for scheduling the surgery. That's why we gotta keep pushing to build capacity and going to ASCs and adding a third, if not a fourth case in a given day to reduce that time. We mentioned before another driver in there is the time it takes to get a new sleep study, and that kind of biases those averages. These technology partnerships are just tools to be able to help that. We're going at every different element. Right now, yes, it's running about four months, and we wanna get that shorter. Thanks for the color. Absolutely. Thanks, Mike. Your last question comes from the line of Suraj Kalia of Oppenheimer. Your line is now open. Good afternoon, everyone. Congrats on the quarter. Tim, can you hear me all right? Yes. Can hear you great. Thanks. Perfect. Hey, so Tim, lot of information provided, roughly 2,800 implants in the U.S. in the quarter. If I could just drill down one layer more, how does the split look between sleep-certified otolaryngologists and general otolaryngologists? Maybe also if you could care to share, how does the unit volume split look between ASCs versus the hospital setting? I know 22% are the number of sites, but I'm just curious, how does the unit volume look like? Absolutely. Good great question. Let's go back to the first one. Talk about sleep ENTs or what we call dual board certified ENTs, meaning they have both their ENT degree as well as they went and get boarded in sleep medicine. Those are the sorts a lot of the very early centers. If you go back to the class of 2014, 2015, and the majority of the early adopters are those dual board-certified sleep. Most recently, as we start to transition to the larger payer systems, that's not so much the case, and those are general ENTs partnering with sleep. Can't really give you specific numbers, but I might have to go back and look those up. I think generally, I don't think the dual board certified can stack up to a half. We need to go back and look at that. I think while early on in the early days it was more predominant, I think now you're just seeing so many more centers opening up. With the ASCs leading to your second question, you're just seeing more general ENTs who are very capable of doing the procedure, but they have a strong partnership with sleep to be able to manage the patients long term. Those are the centers that really can be highly productive because they have a team effort. I'll go back and look that up. As far as the ASCs and hospitals, while we're at about 22% of the centers are ASCs, I don't think 22% of the procedures are done in ASCs yet today. That's still an up-and-coming area. We don't have that number in front of us either, but I'm sure it's probably approaching high teens. I think the majority is still done in hospitals today. Fair enough. Tim, if I could just throw this in. I appreciate you guys taking my questions. Uh-huh. Tim, let's say Suraj is in the New Jersey area, right? He's heard an ad on radio or TV for that matter, for Inspire. Great. What is the decision matrix via which Suraj either ends up at Mount Sinai for an Inspire procedure or another ASC, maybe affiliated or not. How does the decision matrix work there, Tim? Yeah. Sorry, go ahead. No, no, go ahead. Finish. I'm just curious also, when you all define a new account, how were the number of procedures by quote-unquote a new account within the first 3-6 months tracking? Gentlemen, thank you for taking my questions, and congrats again. Thanks, Suraj. Absolutely. Decision process. Suraj, when you see an ad and you go to inspiresleep.com website and you educate and watch the videos and decide you want to move forward. You select the center that you want to go to because you'll say, "Find a physician in my area," and you'll select if you wanna go. You're in Jersey, if you wanna go over to Hackensack or if you wanna, depending upon where you are, if you wanna go into the city to one of the academic centers. You actually select it, and you call that phone number on there. When you come to the Advisor Care Program, it identifies that you are calling this specific ASC or this doctor or this hospital, and we work with you if you're a good candidate to get you set up with an appointment at that hospital. Now, there may be other circumstances where that hospital doesn't see a specific insurance or something like that, and then we'd work with you to choose a new center. It is the patient chooses the center. It's not the Advisor Care Program or there's a randomized element to it. We do make sure that it's patient choice on where they go. As far as the second question is, we don't identify a new account until they have cases scheduled and ideally we want the center to have two or three cases scheduled. Then the key is the time to the second group of patients, and that's the key to growing utilization and getting them up and active, is make sure that they have a pipeline of patients, not just we're gonna do one, two cases, see how they do and then start again. We need to build a team and build a process and be able to have the next group of implants done within the probably a month later. It's always the tricky part, like you're highlighting there, that to get centers up and active and get the utilization up quickly, but it always takes a little bit of a startup process. Very good. Thank you. I think, Thanks, Rick. I think that's our last question. I just wanna thank everybody for joining the call today. As always, I'm grateful to the growing team of dedicated and Inspire employees for their enthusiasm, hard work, and continued motivation to achieve successful and consistent patient outcomes. Inspire team's commitment to patients remains unmatched and is the most important element to our success. We wish to thank all of our employees as well as the healthcare teams for their continued efforts as we remain focused on further expanding of our business in U.S., Europe, and now in Asia. For all of you on the call, we appreciate your continued interest in and support of Inspire, especially on this fourth anniversary of our IPO, and look forward to providing you with further updates in the months ahead. Please stay safe and healthy, and thank you very much. This concludes today's conference call. Thank you, everyone. You may now disconnect.