Inogen Announces Second Quarter 2024 Financial Results

About this update from Inogen, Inc

GOLETA, Calif. --(BUSINESS WIRE)-- Inogen, Inc. (Nasdaq: INGN ), a medical technology company offering innovative respiratory products for use in the homecare setting, today announced financial results for the quarter ended June 30, 2024 . “I am proud of the performance of our team in the first half of 2024. We have made meaningful progress on our strategic initiatives, driving top-line growth and advancing the profile of the business toward profitability,” said Kevin Smith , President and Chief Executive Officer. “We will also continue to advance our innovation pipeline and look forward to delivering best-in-class products to more respiratory patients around the world.” Second Quarter 2024 Financial Results Second quarter total revenue increased 6.1% to $88.8 million from $83.6 million in the second quarter of 2023, primarily driven by higher demand and new customers in international and domestic business-to-business sales, partially offset by lower direct-to-consumer sales and rental revenue. Total gross margin was 48.1% in the second quarter of 2024 versus 40.7% in the comparative period in 2023. The increase was driven primarily by lower premiums paid for components and favorable adjustments to reserves, partially offset by sales channel mix. Total operating expense for the quarter was $49.8 million compared to $45.8 million in the second quarter of 2023, representing an increase of 8.7%. The increase was primarily due to higher personnel-related expenses. GAAP net loss for the second quarter of 2024 was $5.6 million compared to GAAP net loss of $9.8 million in the second quarter of 2023. Adjusted net loss was $1.6 million compared to adjusted net loss of $5.8 million in the second quarter of 2023. Adjusted EBITDA was a positive $1.3 million in the second quarter of 2024 compared to a negative $3.2 million in the second quarter of 2023. Cash, cash equivalents, marketable securities and restricted cash were $121.2 million as of June 30, 2024 , and no debt outstanding. Reconciliations of adjusted EBITDA and adjusted net loss for the three and six months ended June 30, 2024 and 2023 are provided in the financial schedules that are a part of this press release. An explanation of these non-GAAP financial measures is also included below under the heading “Reconciliation of U.S. GAAP to Other Non-GAAP Financial Measures.” 2024 Financial Outlook Inogen expects revenue for the full year 2024 to range from approximately $325 million to $330 million , which represents approximately 3% to 5% growth over the Company’s prior year revenue. Quarterly Conference Call Information On Tuesday, August 6, 2024 the Company will host a conference call at 2:00 pm Pacific Time / 5:00 pm Eastern Time . Individuals interested in listening to the conference call may do so by dialing: US domestic callers (877) 841-3961 Non-US callers (201) 689-8589 Please reference Inogen to join the call. A live audio webcast and archived recording of the conference call will be available to all interested parties through the News / Events page on the Inogen Investor Relations website. This webcast will also be archived on the website for 6 months. A replay of the call will be available approximately three hours after the live webcast ends and will be accessible through August 13, 2024 . To access the replay, dial (877) 660-6853 or (201) 612-7415 and reference Conference ID: 13747098. Inogen has used, and intends to continue to use, its Investor Relations website, http://investor.inogen.com/ , as a means of disclosing material non-public information and for complying with its disclosure obligations under Regulation FD. About Inogen Inogen, Inc. (Nasdaq: INGN) is a leading global medical technology company offering innovative respiratory products for use in the homecare setting. Inogen supports patient respiratory care by developing, manufacturing, and marketing innovative best-in-class portable oxygen concentrators used to deliver supplemental long-term oxygen therapy to patients suffering from chronic respiratory conditions. Inogen partners with patients, prescribers, home medical equipment providers, and distributors to make its oxygen therapy products widely available allowing patients the chance to remain ambulatory while managing the impact of their disease. For more information, please visit www.inogen.com . Forward-Looking Statements This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including, among others, statements with respect to the business positioned for revenue growth and long-term profitability, advancing the innovation pipeline, and Inogen’s full year revenue expectations. Any statements contained in this communication that are not statements of historical fact may be deemed to be forward-looking statements. Words such as “believes,” “anticipates,” “plans,” “expects,” “will,” “intends,” “potential,” “possible,” and similar expressions are intended to identify forward-looking statements. Forward-looking statements are subject to numerous risks and uncertainties that could cause actual results to differ materially from currently anticipated results, including but not limited to, risks related to its announced management and organizational changes, and risks arising from the possibility that Inogen will not realize anticipated future financial performance or strategic goals. In addition, Inogen's business is subject to numerous additional risks and uncertainties, including, among others, risks relating to market acceptance of its products; competition; its sales, marketing and distribution capabilities; its planned sales, marketing, and research and development activities; interruptions or delays in the supply of components or materials for, or manufacturing of, its products; seasonal variations; unanticipated increases in costs or expenses; risks associated with international operations; and the possibility that Inogen will not realize anticipated revenue from recent or future technology acquisitions or that expenses and costs related thereto will exceed Inogen’s expectations. Information on these and additional risks, uncertainties, and other information affecting Inogen’s business operating results are contained in its Annual Report on Form 10-K for the period ended December 31, 2023 , its Quarterly Report on Form 10-Q for the calendar quarter ended March 31, 2024 and in its other filings with the Securities and Exchange Commission . These forward-looking statements speak only as of the date hereof. Inogen disclaims any obligation to update these forward-looking statements except as may be required by law. Non-GAAP Financial Measures Inogen has presented certain financial information in accordance with U.S. GAAP and also on a non-GAAP basis for the three and six months ended June 30, 2024 , and June 30, 2023 . Management believes that non-GAAP financial measures, taken in conjunction with U.S. GAAP financial measures, provide useful information for both management and investors by excluding certain non-cash and other expenses that are not indicative of Inogen’s core operating results. Management uses non-GAAP measures to compare Inogen’s performance relative to forecasts and strategic plans, to benchmark Inogen’s performance externally against competitors, and for certain compensation decisions. Non-GAAP information is not prepared under a comprehensive set of accounting rules and should only be used to supplement an understanding of Inogen's operating results as reported under U.S. GAAP. Inogen encourages investors to carefully consider its results under U.S. GAAP, as well as its supplemental non-GAAP information and the reconciliation between these presentations, to more fully understand its business. Reconciliations between U.S. GAAP and non-GAAP results are presented in the accompanying tables of this release. For future periods, Inogen is unable to provide a reconciliation of non-GAAP measures without unreasonable effort as a result of the uncertainty regarding, and the potential variability of, the amounts of interest income, interest expense, depreciation and amortization, stock-based compensation, provision (benefit) for income taxes, and certain other infrequently occurring items, such as acquisition-related costs, that may be incurred in the future. Consolidated Statements of Comprehensive Loss (unaudited) (amounts in thousands, except share and per share amounts) Three months ended Six months ended June 30 , June 30 , 2024 2023 2024 2023 Revenue Sales revenue $ 74,425 $ 68,343 $ 137,520 $ 124,230 Rental revenue 14,340 15,292 29,270 31,567 Total revenue 88,765 83,635 166,790 155,797 Cost of revenue Cost of sales revenue 38,320 42,028 73,564 75,992 Cost of rental revenue, including depreciation of $3,128 and $3,328 for the three months ended and $6,307 and $6,316 for the six months ended, respectively 7,708 7,563 16,118 15,028 Total cost of revenue 46,028 49,591 89,682 91,020 Gross profit 42,737 34,044 77,108 64,777 Operating expense Research and development 5,616 4,293 12,194 9,637 Sales and marketing 25,617 26,906 52,553 55,347 General and administrative 18,568 14,613 35,699 33,476 Total operating expense 49,801 45,812 100,446 98,460 Loss from operations (7,064 ) (11,768 ) (23,338 ) (33,683 ) Other income (expense) Interest income, net 1,333 1,646 2,736 3,171 Other income, net 134 337 277 574 Total other income, net 1,467 1,983 3,013 3,745 Loss before benefit for income taxes (5,597 ) (9,785 ) (20,325 ) (29,938 ) Provision (benefit) for income taxes (7 ) 41 (157 ) 237 Net loss (5,590 ) (9,826 ) (20,168 ) (30,175 ) Other comprehensive income (loss), net of tax Change in foreign currency translation adjustment (286 ) 7 (1,321 ) 177 Change in net unrealized gains (losses) on foreign currency hedging — 7 — 7 Change in net unrealized gains (losses) on marketable securities (40 ) 64 (42 ) 133 Total other comprehensive income (loss), net of tax (326 ) 78 (1,363 ) 317 Comprehensive loss $ (5,916 ) $ (9,748 ) $ (21,531 ) $ (29,858 ) Basic net loss per share attributable to common stockholders (1) $ (0.24 ) $ (0.42 ) $ (0.86 ) $ (1.31 ) Diluted net loss per share attributable to common stockholders (1) (2) $ (0.24 ) $ (0.42 ) $ (0.86 ) $ (1.31 ) Weighted-average number of shares used in calculating net loss per share attributable to common stockholders: Basic common shares 23,614,970 23,146,117 23,508,284 23,078,244 Diluted common shares 23,614,970 23,146,117 23,508,284 23,078,244 (1) Reconciliations of net loss attributable to common stockholders basic and diluted can be found in Inogen’s Quarterly Report on Form 10-Q to be filed with the Securities and Exchange Commission . (2) Due to a net loss for the three and six months ended June 30, 2024 and June 30, 2023 , diluted loss per share is the same as basic. Consolidated Balance Sheets (unaudited) (amounts in thousands) June 30 , December 31 , 2024 2023 Assets Current assets Cash and cash equivalents $ 97,920 $ 125,492 Marketable securities 19,767 2,979 Restricted cash 3,559 — Accounts receivable, net 36,037 42,241 Inventories, net 24,048 21,840 Income tax receivable 1,050 669 Prepaid expenses and other current assets 12,410 13,846 Total current assets 194,791 207,067 Property and equipment, net 47,022 50,316 Goodwill 9,764 10,057 Intangibles assets, net 33,585 34,591 Operating lease right-of-use asset 19,951 20,338 Other assets 3,806 3,825 Total assets $ 308,919 $ 326,194 Liabilities and stockholders' equity Current liabilities Accounts payable and accrued expenses $ 26,783 $ 30,142 Accrued payroll 13,746 11,066 Warranty reserve - current 9,759 9,628 Operating lease liability - current 3,332 3,653 Earnout liability 11,180 10,000 Deferred revenue - current 7,385 7,980 Income tax payable — 27 Total current liabilities 72,185 72,496 Warranty reserve - noncurrent 15,897 13,850 Operating lease liability - noncurrent 18,106 18,270 Deferred revenue - noncurrent 7,066 8,227 Deferred tax liability - noncurrent 8,070 8,539 Total liabilities 121,324 121,382 Stockholders' equity Common stock 24 23 Additional paid-in capital 324,826 320,513 Accumulated deficit (137,117 ) (116,949 ) Accumulated other comprehensive income (loss) (138 ) 1,225 Total stockholders' equity 187,595 204,812 Total liabilities and stockholders' equity $ 308,919 $ 326,194 Condensed Consolidated Cash Flow (unaudited) (amounts in thousands) Six months ended June 30 , 2024 2023 Cash flows from operating activities Net loss $ (20,168 ) $ (30,175 ) Adjustments to reconcile net loss to net cash provided by (used in) operating activities: Depreciation and amortization 10,610 8,394 Loss on rental units and other assets 2,158 2,138 Gain on sale of former rental assets (63 ) (40 ) Provision for sales revenue returns and doubtful accounts 4,615 4,488 Provision for inventory losses 74 989 Loss on purchase commitments (68 ) — Stock-based compensation expense 4,230 6,705 Deferred income taxes (223 ) — Change in fair value of earnout liability 1,180 — Changes in operating assets and liabilities (405 ) 5,230 Net cash provided by (used in) operating activities 1,940 (2,271 ) Cash flows from investing activities Purchases of available-for-sale securities (32,330 ) (12,826 ) Maturities of available-for-sale securities 15,500 10,500 Investment in intangible assets (2,090 ) (494 ) Investment in property and equipment (1,360 ) (3,116 ) Production and purchase of rental equipment (5,651 ) (11,810 ) Proceeds from sale of former assets 111 96 Net cash used in investing activities (25,820 ) (17,650 ) Cash flows from financing activities Proceeds from stock options exercised — 384 Proceeds from employee stock purchases 370 630 Payment of employment taxes related to release of restricted stock (286 ) (488 ) Net cash provided by financing activities 84 526 Effect of exchange rates on cash (217 ) 68 Net decrease in cash, cash equivalents and restricted cash $ (24,013 ) $ (19,327 ) Supplemental Financial Information (unaudited) (in thousands, except units and patients) Three months ended June 30 , Change as reported Constant Currency Change 2024 2023 $ % % Revenue by region and category Business-to-business domestic sales $ 21,287 $ 18,272 $ 3,015 16.5 % 16.5 % Business-to-business international sales 30,531 23,292 7,239 31.1 % 31.4 % Direct-to-consumer domestic sales 22,607 26,779 (4,172 ) -15.6 % -15.6 % Direct-to-consumer domestic rentals 14,340 15,292 (952 ) -6.2 % -6.2 % Total revenue $ 88,765 $ 83,635 $ 5,130 6.1 % 6.2 % Additional financial measures Units sold 41,300 34,100 Net rental patients as of period-end 51,900 48,900 Six months ended June 30 , Change as reported Constant Currency Change 2024 2023 $ % % Revenue by region and category Business-to-business domestic sales $ 37,806 $ 30,857 $ 6,949 22.5 % 22.5 % Business-to-business international sales 56,566 42,264 14,302 33.8 % 33.2 % Direct-to-consumer domestic sales 43,148 51,109 (7,961 ) -15.6 % -15.6 % Direct-to-consumer domestic rentals 29,270 31,567 (2,297 ) -7.3 % -7.3 % Total revenue $ 166,790 $ 155,797 $ 10,993 7.1 % 6.9 % Additional financial measures Units sold 75,200 61,000 Net rental patients as of period-end 51,900 48,900 Reconciliation of U.S. GAAP to Other Non-GAAP Financial Measures (unaudited) (in thousands) Three months ended Six months ended June 30 , June 30 , Non-GAAP EBITDA and Adjusted EBITDA 2024 2023 2024 2023 Net loss (GAAP) $ (5,590 ) $ (9,826 ) $ (20,168 ) $ (30,175 ) Non-GAAP adjustments: Interest income, net (1,333 ) (1,646 ) (2,736 ) (3,171 ) Provision (benefit) for income taxes (7 ) 41 (157 ) 237 Depreciation and amortization 5,345 4,308 10,610 8,394 EBITDA (non-GAAP) (1,585 ) (7,123 ) (12,451 ) (24,715 ) Stock-based compensation 1,814 3,263 4,230 6,705 Acquisition-related expenses 419 467 657 1,021 Restructuring-related and other charges (1) — 201 — 2,010 Change in fair value of earnout liability 610 — 1,180 — Adjusted EBITDA (non-GAAP) $ 1,258 $ (3,192 ) $ (6,384 ) $ (14,979 ) Three months ended June 30 , Net Loss Diluted EPS Non-GAAP Adjusted Net Loss and Diluted EPS 2024 2023 2024 2023 Financial Results (GAAP) $ (5,590 ) $ (9,826 ) $ (0.24 ) $ (0.42 ) Non-GAAP adjustments: Amortization of intangibles 1,188 53 Stock-based compensation 1,814 3,263 Acquisition-related expenses 419 467 Restructuring-related and other charges (1) — 201 Change in fair value of earnout liability 610 — Income tax impact of adjustments (2) — — Adjusted $ (1,559 ) $ (5,842 ) $ (0.07 ) $ (0.25 ) Six months ended June 30 , Net Loss Diluted EPS Non-GAAP Adjusted Net Loss and Diluted EPS 2024 2023 2024 2023 Financial Results (GAAP) $ (20,168 ) $ (30,175 ) $ (0.86 ) $ (1.31 ) Non-GAAP adjustments: Amortization of intangibles 2,120 79 Stock-based compensation 4,230 6,705 Acquisition-related expenses 657 1,021 Restructuring-related and other charges (1) — 2,010 Change in fair value of earnout liability 1,180 — Income tax impact of adjustments (2) — — Adjusted $ (11,981 ) $ (20,360 ) $ (0.51 ) $ (0.88 ) (1) Charges represent the costs associated with workforce reductions and other restructuring-related activities. (2) Income tax impact of adjustments represents the tax impact related to the non-GAAP adjustments listed above and reflects an effective tax rate of 0% for the three and six months ended June 30, 2024 and 2023. View source version on businesswire.com : https://www.businesswire.com/news/home/20240806055307/en/ [email protected] Source: Inogen, Inc.

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