Inspire Medical Systems (INSP) is a company that was brought to the board by MountainTom and I have occasionally discussed, most recently in March ( https://discussion.fool.com/update-on-insp-34168235.aspx ). They are not SAAS, but I continue to occasionally update everyone in case there are others out there interested in other companies that are still pretty high growth.
When COVID hit, the company was confident but I was certainly concerned whether they could continue growth with elective surgeries being put on pause, etc. Q2 revenue dropped versus the previous year. However, they just released Q3 revenue and it is a blowout. Q3 revenue was 72% higher than last year. Meanwhile, they increased gross margin up to 85%. Part of this was due to the ‘backlog’ of surgeries that were delayed from Q2. However, they think that is basically done, and Q4 will be almost ‘normal’. They raised guidance that implies Q4 will have revenue growth of 55% versus the year-ago quarter. So not too shabby! The stock is up 23% this morning. I think most importantly, it seems clear that they are aggressively expanding despite of COVID.
Yearly revenue growth is only going to be 34-37% for 2020 vs 2019, but I wonder if that will increase next year.