Segment Reporting and Revenue Disaggregation
We operate our business as one operating segment. An operating segment is defined as a component of an enterprise for which separate discrete financial information is available and evaluated regularly by the chief operating decision maker ("CODM") in deciding how to allocate resources and in assessing performance. Our CODM is the Company's President, Chief Executive Officer, and Chair of the Board of Directors. Reportable segment information is consistent with how management reviews the business, makes investing and resource allocation decisions and assesses operating performance. Our segment revenues are derived from the sales of our product, the Inspire system, to hospitals and ambulatory surgery centers in the U.S. and in select countries in Europe and the Asia Pacific region. We do not have any intra-entity sales or transfers.
Our CODM uses consolidated net income (loss) as the measure of profit or loss. Our CODM assesses performance for the segment and allocates resources and monitors budget versus actual results using consolidated net income (loss) and operating income (loss). The monitoring of budget versus actual results are used in establishing management's compensation. The measure of segment assets is reported on the balance sheet as total consolidated assets.
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| | Year Ended December 31, |
| | 2025 | | 2024 | | 2023 |
| Revenue | | $ | 911,981 | | | $ | 802,804 | | | $ | 624,799 | |
| Less: (a) | | | | | | |
| Cost of goods sold | | 133,225 | | | 122,986 | | | 96,576 | |
| Research and development expense | | 103,165 | | | 114,128 | | | 116,536 | |
| Selling, general and administrative expense (excluding advertising expense) | | 509,712 | | | 434,669 | | | 351,632 | |
| Advertising expense | | 114,925 | | | 94,938 | | | 100,326 | |
| Operating income (loss) | | 50,954 | | | 36,083 | | | (40,271) | |
| Other income (b) | | (14,743) | | | (22,370) | | | (20,365) | |
| Income taxes | | (79,725) | | | 4,944 | | | 1,247 | |
| Segment net income (loss) | | 145,422 | | | 53,509 | | | (21,153) | |
| Reconciliation of profit or loss | | | | | | |
| Adjustments and reconciling items | | — | | | — | | | — | |
| Consolidated net income (loss) | | $ | 145,422 | | | $ | 53,509 | | | $ | (21,153) | |
(a) The significant expense categories and amounts align with the segment-level information that is regularly provided to our chief operating decision maker.
(b) Other income represents the consolidated amounts for interest and dividend income, interest expense, and other expense, net, as shown on our consolidated statements of operations and comprehensive income (loss).
For the years ended December 31, 2025, 2024, and 2023, depreciation and amortization expense was $14.0 million, $6.6 million, and $2.8 million, respectively, and is included within the segment expense captions of cost of goods sold, research and development expense, and selling, general and administrative expense.
For the years ended December 31, 2025, 2024, and 2023, stock-based compensation expense was $130.3 million, $116.0 million and $82.5 million, respectively, and is included within the segment expense captions of cost of goods sold, research and development expense, and selling, general and administrative expense.
Revenue by geographic region is as follows:
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| | Year Ended December 31, |
| | 2025 | | 2024 | | 2023 |
| United States | | $ | 872,086 | | | $ | 771,040 | | | $ | 606,178 | |
| All other countries | | 39,895 | | | 31,764 | | | 18,621 | |
| Total revenue | | $ | 911,981 | | | $ | 802,804 | | | $ | 624,799 | |
Long-lived tangible assets by geographic location were as follows:
| | | | | | | | | | | | | | |
| | December 31, |
| | 2025 | | 2024 |
| United States | | $ | 96,850 | | | $ | 71,008 | |
| All other countries | | 1,022 | | | 917 | |
| Total long-lived tangible assets | | $ | 97,872 | | | $ | 71,925 | |