Shares of Inspire Medical Systems (INSP) surged 6.42% in Tuesday's trading session, following the company's impressive third-quarter financial results and updated full-year guidance. The medical device company, known for its innovative sleep apnea treatment, outperformed market expectations and demonstrated strong growth prospects.

Inspire Medical reported a quarterly adjusted earnings per share (EPS) of $0.38, significantly beating the analyst consensus estimate of $(0.19). This represents a remarkable 295.88% surprise to the upside. The company's Q3 revenue reached $224.5 million, surpassing the analyst estimate of $221.1 million and marking a 10.49% increase year-over-year. In response to the strong performance, Inspire Medical raised its full-year outlook, now expecting diluted net income per share to be between $0.90 and $1.00, up from previous estimates.

The company's successful transition to the new Inspire V system appears to be a key driver behind the stock's rally. The system has received positive feedback from clinicians, with reports of 100% successful device implants and reduced surgical times. This transition has not only contributed to revenue growth but also improved gross margins due to lower cost of goods sold. Despite increased operating expenses related to patient marketing and corporate costs, the company's overall financial health remains strong, as evidenced by the completion of a $50 million share repurchase program. Inspire Medical reaffirmed its full-year revenue guidance of $900 million to $910 million and maintained its gross margin guidance at 84% to 86%, further bolstering investor confidence in the company's future prospects.