InspireMD Q1 2026 Earnings Call - U.S. CGuard Prime Recall Forces Revenue Guidance Withdrawal

Operator: Morning and welcome to InspireMD’s first quarter 2026 earnings conference call. Currently, all participants are in listen-only mode. We will facilitate a question and answer session towards the end of today’s call. As a reminder, this call is being recorded for replay purposes. Joining us today from InspireMD are Marvin Slosman, Chief Executive Officer; Michael Lawless, Chief Financial Officer; and Shane Gleason, Chief Commercial Officer. During this call, management will make forward-looking statements which are based upon management’s current expectations, beliefs, and projections, many of which, by their nature, are inherently uncertain. These forward-looking statements involve risks and uncertainties that may cause actual results to differ materially from those expressed in such forward-looking statements.

More information about these risks, please refer to the risk factors described in InspireMD’s most recently filed periodic report on Form 10-K and Form 10-Q, or any updates in its current report on Form 8-K filed with the U.S. Securities and Exchange Commission and InspireMD’s press release that accompanies these calls, particularly the cautionary statements made in it. During the call today, the company may discuss certain non-GAAP financial measures. For more detailed discussion of these non-GAAP financial measures and historical reconciliations to the most comparable GAAP measures, please refer to the company’s earnings release. This call contains time-sensitive information that is accurate only as of today, May 4, 2026. Except as required by law, InspireMD disclaims any obligation to publicly update or revise any information to reflect events or circumstances that occur after this call.

It is now my pleasure to turn the call over to Marvin Slosman, Chief Executive Officer. Marvin, please go ahead.

Marvin Slosman, Chief Executive Officer, InspireMD: Thank you, operator, and good morning, everyone. Starting with our Q1 results, our first quarter revenue of $3.4 million was a strong start to 2026, representing growth of over 120%. This performance reflects what we continue to see globally: robust and growing demand for the CGuard implant, driven by its highly differentiated clinical profile and strong physician demand. Before I go any further, I want to directly address the decision to pause commercialization for the CGuard Prime 135 delivery system, which we announced last week in coordination with the FDA. While we recognize this action represents a clear setback from our commercial momentum in the U.S., let me be very clear on three important points. First, this action is not related to the safety or performance of the CGuard stent implant, which continues to demonstrate best-in-class clinical outcomes.

Second, this was a proactive decision based on feedback from our controlled U.S. launch, where we identified opportunities to further enhance the technical performance and physician experience of the delivery system. Third, we are confident this is a temporary and correctable issue, and we have a clear path forward to restoring and expanding our U.S. commercial opportunity. Importantly, this reflects our long-standing philosophy. We prioritize clinical excellence and physician confidence over speed of commercialization. We believe taking this step now ultimately strengthens our long-term market position. In parallel, we’re advancing an important and near-term solution pursuing FDA approval of our original CGuard delivery system that has already been successfully used in more than 70,000 cases globally, as well as in the majority of the cases in the successful C-GUARDIANS clinical trial.

Our ongoing discussions with FDA are positive and constructive. We anticipate FDA approval in the third quarter of 2026, which would enable us to reenter the U.S. market with a proven and highly reliable platform. Despite this temporary pause in the United States, the fundamentals of our business remain strong. Strong physician excitement and belief in CGuard, continued strong international growth. Our TCAR strategy remains fully on track and unaffected by this voluntary action. We continue to anticipate FDA approval of the CGuard Prime 80 system for TCAR procedures in the second half of this year, which we believe could potentially double our U.S. addressable market. Furthermore, we’re pleased to have received FDA approval to initiate the CGUARDIANS III clinical trial, which will evaluate the company’s next generation SwitchGuard neuroprotection system with the CGuard Prime 80 for use in TCAR procedures.

When approved, this will allow us to offer the full TCAR toolkit. Given the temporary pause in the U.S. commercialization, we have made the decision to withdraw our full year 2026 revenue guidance. We believe this is the most responsible approach while we complete enhancements to the CGuard Prime delivery system and gain more clarity on the specific timing of the approval for our original CGuard platform to our return to the U.S. market. That said, we remain confident in the long-term growth trajectory of the business. During this period, the entire team remains focused on approval of the original CGuard 135, which is already being reviewed by FDA. Approval of the CGuard Prime 80 with a TCAR indication for use with the only currently available neuroprotection system in the market, and completion of design changes and approval of our improved CGuard Prime 135 platform.

Enrollment of the CGUARDIANS III study for clearance of our next generation SwitchGuard neuroprotection system for TCAR procedures. Before closing, let me reiterate the following. We know there is a clear and growing global demand for our CGuard implant, as proven in over 70,000 patients to date with unmatched clinical outcomes. We have taken a proactive step to enhance our delivery system in the U.S. We have a clear path to reenter the U.S. market with a commercially proven product and line extension. We believe we have a stent that can and is redefining carotid intervention, and we remain highly confident in our long-term growth plan. Mike will now talk you through the Q1 results and financial implications of our voluntary field action. Mike?

Michael Lawless, Chief Financial Officer, InspireMD: Thanks, Marvin. For the first quarter of 2026, total revenue was $3.4 million, representing an increase of 122% compared to revenue of $1.5 million for the first quarter of 2025. This growth was driven by the launch of CGuard Prime in the U.S. and increased penetration of international markets with CGuard. U.S. revenue for the first quarter was $1.2 million, driven by the launch of CGuard Prime, representing 36% sequential growth versus the fourth quarter of 2025. Recall that we initiated the controlled commercial launch of CGuard Prime in the third quarter of 2025, we do not yet have year-over-year performance that we can report for U.S. revenue.

International revenue for the first quarter was $2.2 million, reflecting annual growth of 48% compared to $1.5 million for the first quarter of 2025. The majority of international growth was driven by higher unit sales, while changes in foreign exchange rates contributed growth of 11% to our international results. Gross profit for the first quarter of 2026 was $0.7 million or 20.2% of revenue, compared to a gross profit of $0.3 million or 19.1% of revenue for the first quarter of 2025. This increase in gross margin resulted primarily from a favorable shift in revenue mix to U.S. sales, which carry a higher margin than international sales.

Offsetting most of the improvement in the mix in revenue was a $473,000 impairment charge related to excess inventory for which we decided not to extend the useful life. On a non-GAAP basis, which excludes the impact of the impairment charge, adjusted gross profit was $1.2 million or 34.1% of revenue. This adjusted gross margin was below our expectations primarily due to additional compensation expense for the operations team in Tel Aviv, who maintained operations during very difficult conditions throughout the recent conflict. Total operating expenses for the first quarter of 2026 were $14.7 million, an increase of $2.9 million compared to $11.8 million for the first quarter of 2025. This increase was primarily due to higher staffing levels and marketing activities for the U.S. commercial launch of CGuard Prime.

Financial income was $289,000, essentially flat compared to $294,000 for the first quarter of 2025. Net loss for the first quarter of 2026 was $13.7 million or $0.16 per basic and diluted share, compared to a net loss of $11.2 million or $0.22 per basic and diluted share for the same period of 2025. As of March 31, 2026, cash and cash equivalents and marketable securities were $41.6 million compared to $54.2 million at the end of 2025. Turning to the impact of the voluntary action of CGuard Prime and the temporary discontinuation of commercial activity in the U.S.

The decision to initiate the action took place late last week in consultation with FDA after reviewing the technical performance over the duration of the controlled launch. Consequently, we will recognize the financial impact of the U.S. recall of CGuard Prime in the second quarter of 2026, with a reserve for customer returns of approximately $700,000 and a reserve for inventory impairment and remediation costs of approximately $650,000. As a result of the impact of the temporary discontinuation of commercial activity in the U.S. following the action, we withdrew our prior full year 2026 revenue guidance at least until the expected FDA approval of our original CGuard stent delivery system, which we believe will take place in the third quarter of 2026.

Until expected FDA approval of the original CGuard stent system, we expect to have no commercial activity in the U.S. market, and our source of revenue during that time will be sales of the CGuard system in international markets. Given the strong U.S. market receptivity to the CGuard stent, despite the deployment issues of the Prime delivery system, we expect the U.S. customer response to the introduction of the original CGuard system to be very positive following the anticipated FDA approval. This concludes our prepared remarks. We will now open the call for questions. For the Q&A segment, we’ll be joined by Shane Gleason, InspireMD’s Chief Commercial Officer. Operator?

Operator: Thank you. If you would like to ask a question, please press star one one on your telephone. You will then hear an automated message advising your hand is raised. If you would like to remove yourself from the queue, press star one one again.

We also ask that you wait for your name and company to be announced before proceeding with your question. One moment while we compile the Q&A roster. Our first question today will be coming from the line of Frank Takkinen of Lake Street Capital Markets. Please go ahead.

Frank Takkinen, Analyst, Lake Street Capital Markets: Great. Thank you for taking the questions. Hi, guys. I wanted to start with just some clarification around the process to get CGuard Prime back on the market. Where do you stand in resolving the challenges internally? When can that be complete, when can that get resubmitted? Given the product’s been on the market, is there any chance for some sort of expedited review with the FDA to get that on market as soon as possible to meet your first half 2027 deadline?

Marvin Slosman, Chief Executive Officer, InspireMD: Frank, thanks for the question. We appreciate it. We have already begun a very extensive process in remediating some of these technical challenges for the delivery system. We’ve identified those early on. We understand the root cause. We’ve already taken action to solve those. It’s now a matter of completing the V&V testing and all of the associated work to get that done and get that resubmitted to FDA. The timeline for approval of those changes remains somewhat uncertain. Whether it remains in the statutory category of a design change or expedited is still to be determined. Those two time frames are different, obviously.

In terms of our confidence in understanding the problem and having solved the issue technically, we have a very clear understanding of that and have already made all the progressive steps to be very confident that this design change will work and will work much better and give us the technical response that we’re looking for. You know, at the end of the day, we want a reproducible success in the delivery system, and a delivery system candidly that’s worthy of the best-in-class implant that we know that we have in the market. We’re very encouraged and optimistic that we’ll be able to deliver this in early 2027 or sooner.

Frank Takkinen, Analyst, Lake Street Capital Markets: Got it. Very helpful. With the legacy delivery system working through the approval process, how quickly can you relaunch the new delivery system in relation to maybe VAC committees, scaling up manufacturing capacity? Once you do get that approval in hand, how quickly could we start to see that revenue come back?

Marvin Slosman, Chief Executive Officer, InspireMD: Yeah, Frank, our expectation is that once we have approval, we will be ready and set to launch the original CGuard. As you know, this product is the one that we sell outside the U.S., we’re full steam ahead on manufacturing capacity. There’s no limitations to speak of there. Shane and the team will be working over the next 90 days or so to continue to work through the accounts. We’ve opened all of the VAC-related topics and really put a very clear plan together as to how we can relaunch as quickly as possible. There are no constraints at this point other than getting the approval completed, which we anticipate to be in the August window.

Frank Takkinen, Analyst, Lake Street Capital Markets: Okay. That’s helpful. Maybe just one last one, and I appreciate all the time. As you work through this transition period, how should we think about OpEx trending through this time? As it relates to OpEx, just maybe talk about retaining key talent through this transit period.

Marvin Slosman, Chief Executive Officer, InspireMD: Michael, you wanna take that one?

Michael Lawless, Chief Financial Officer, InspireMD: Yeah, sure. Yeah. I think we expect to see OpEx continue to increase slightly as we move through the year. We will be making investments in R&D, you know, with the C-GUARDIANS 3 clinical trial kicking off very soon. There will be some increased expenditures in R&D as a result of that. As far as selling and marketing and G&A, I would expect those to be relatively stable. I think we’re gonna probably put a pause on in terms of head count investment until we, you know, have a little more clarity about the timeline for FDA approval for CGuard. I think that’s the general path you should expect to see with OpEx.

Frank Takkinen, Analyst, Lake Street Capital Markets: Great. Thank you.

Shane Gleason, Chief Commercial Officer, InspireMD: Thank you. One moment for the next question. Our next question will be coming from the line of Adam Maeder of Piper Sandler. Please go ahead.

Adam Maeder, Analyst, Piper Sandler: Hi, good afternoon. Thank you for taking the questions. I actually wanted to pick up on one of the questions that Frank just asked around VAC. I just wanted to confirm the existing customer base, the users of CGuard Prime, those centers should be grandfathered in with the CGuard original delivery system. You can hit the ground running immediately upon FDA clearance. Did I hear that correctly, Marvin?

Marvin Slosman, Chief Executive Officer, InspireMD: Yeah. Why don’t we have Shane maybe clarify that point? Because he’s been working through that with the team.

Shane Gleason, Chief Commercial Officer, InspireMD: Yeah. Happy to. I think the short answer is, this is one of those where all politics is local applies, but that’s something that our team in the field is staying close to. You’re exactly right. In a lot of those cases, what they really approved is the stent. You can probably imagine that the team has been out there having a lot of conversations over the last couple of working days here. What we’re hearing is that many of them don’t want to lose access today, and all of them are looking forward to gaining access as soon as it’s available. You know, the process will look a little bit different at each and every center like it does just for the VAC process in general.

We expect receptivity to be able to plug right back in.

Adam Maeder, Analyst, Piper Sandler: Okay. I appreciate the color, Shane. Thanks for all that. I guess it’s a related question, but as you think about, you know, any potential impacts to prospective customers, you know, while you don’t have a delivery system, while you’re not selling into the U.S. market, are you able to advance those conversations with prospective accounts? Or does this also kind of put a temporary moratorium on that process?

Shane Gleason, Chief Commercial Officer, InspireMD: I think there’s probably the best way to put it is that there are some things that you can discuss and others you can’t. Clinical data results, those are things that are fair game. Specific, you know, price lists, things like that are things that you can’t do until you have that until you have CGuard, for example, or CGuard Prime and the 80 shaft approved. We can remain engaged and again, kind of follow the rules of each site that we have and, you know, continue to engage with customers that way. From talking to the physicians and centers that we have, they kind of fall into really 1 of 2 different buckets.

One is they’re disappointed to be losing access to what they have today, and they’ll welcome it back as soon as they can get it. The other one is those who understand, who may have had challenges and are looking forward to getting a more reliable system. In both of those cases, there’s a lot of receptivity to bringing us in, whether they’ve started using us or not at this point, when we get those other products available.

Marvin Slosman, Chief Executive Officer, InspireMD: Adam, let me just add one quick comment to your question there and Shane’s answer. Although the launch of CGuard Prime was controlled to a certain extent, our marketing of that device was very broad and quite aggressive. I think that the market in general understands the value of the CGuard implant. On balance, I think over the last several months, we’ve created a tremendous amount of interest and demand. Although we’ll be limited in our ability to sell the product, I think that awareness is clearly going to create a tailwind once we get back in the market with CGuard first and then CGuard Prime. Also remember that the CGuard device was used in the majority of the C-GUARDIANS PMA trial.

We have a lot of familiarity out there within the investigator base that participated in that.

Adam Maeder, Analyst, Piper Sandler: Okay, perfect. I will leave it there, and I’ll hop back in the queue. Thank you.

Marvin Slosman, Chief Executive Officer, InspireMD: Thanks, Adam.

Operator: Thank you. As a reminder, if you would like to ask a question, please press star one one on your telephone. One moment for the next question. Our next question is coming from the line of Anthony Vendetti of Maxim Group. Your line is open.

Anthony Vendetti, Analyst, Maxim Group: Thank you. I was just wondering, Marvin, if you could talk a little bit about, you know, the decision to voluntarily do the recall here in the U.S., and then the effect, if any, on the European business. Do you expect business to slow down there, based on this voluntary recall? As you work with the FDA, do you anticipate any potential labeling changes, or you think that that’s really not gonna be the issue at this point, or is it too early to tell? Thanks.

Marvin Slosman, Chief Executive Officer, InspireMD: Thanks, Anthony. Let’s start with the OUS market. As you can see from the results in the first quarter, the OUS market is actually standardized in using our original CGuard delivery system, that business continues to grow nicely. The demand is clear that in the OUS market, as we have continued to mature over the years, we’re growing nice share there. The OUS market will continue to operate, we’ll count on that to be a robust part of the overall story. The decision that we made really we felt was necessary both in the short and long term to achieving our objective. You know, you can’t lead in a market of this size, scale, and transition without, you know, 100% confidence in both the implant and the delivery system.

As I said before, we absolutely are committed to having a delivery system that’s worthy of these best-in-class implant results of CGuard. As much as these decisions are somewhat difficult to make, we felt that this was the right time to make it so that we can move forward in an unencumbered way of taking advantage of a market shift candidly to stenting that has been, you know, on the docket for the last 20 years, and we find ourselves in a very unique position of being able to take full advantage of that. We, we wanted the complete story to be able to do that. We feel very good about our TCAR entry with the short shaft indicated CGuard for TCAR procedures and starting our SwitchGuard neuroprotection studies shortly.

As far as changes are concerned, these are simply design and technical changes. There will be no changes to speak of in terms of the use of the product, IFU and otherwise. As I said before, we have a very clear understanding of what needs to be done. We’re confident we can expedite that quickly and get that into the FDA so that we can get things back on track. In the interim, we’ll utilize CGuard and then have CGuard Prime back in the market in both the 135 and the 80.

Anthony Vendetti, Analyst, Maxim Group: Okay, great. Maybe just lastly on the as you were doing the sort of rollout and testing, you know, I guess it was maybe too early to tell, but clearly, I guess these issues with the delivery system weren’t or didn’t manifest itself early on, but now, you know, it’s become an issue in terms of, you know, just like you said, complaints in terms of comfort, but not in terms of your system, but the delivery system. Why do you think it wasn’t picked up earlier? Maybe just a little color on that. Thanks.

Marvin Slosman, Chief Executive Officer, InspireMD: Anthony, it’s a good question. We had limited user experience in the PMA trial. We put CGuard Prime into that fairly late in the process. Once we began to launch this into a broader market, the combination of new user experiences, the combination of a lot of different accessory devices being used with CGuard Prime, you know, just lend itself to a learning curve that we had to appreciate once we had this product fully engaged in the market. That’s why we did a controlled launch to begin with, to keep very close to those details. I think the learning curve was somewhat unfortunate, but I think we got ahead of it early. We understood the core issue and knew what to do to address it.

Unfortunately, we’ve had to take a pause here for a 90 or 100 day window in order to get things put together properly. We felt like under the circumstances, this was the right thing to do so that we can, we can come out of the blocks on the other side of this in a very clear way to continue to grow share.

Anthony Vendetti, Analyst, Maxim Group: Okay, great. Thank you very much. I appreciate it. I’ll hop back in the queue.

Marvin Slosman, Chief Executive Officer, InspireMD: Thank you. Thanks.

Operator: Thank you. There are no more questions in the queue. I would like to go ahead and turn the call back over to management for closing remarks. Please go ahead.

Marvin Slosman, Chief Executive Officer, InspireMD: Thank you very much. I’d like to thank everyone for joining today’s call and the continued support in our mission to lead and transform the carotid interventional market and stroke prevention. We look forward to a lot of success over the next couple of quarters. Thanks very much.

Operator: This does conclude today’s program. Thank you for joining. You may now disconnect.