INGN - Earnings call transcript Q2 2024

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Operator

Welcome to Inogen's Second Quarter 2024 Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded today, August 6, 2024. I would now like to turn the call over to Ryan Peterson of Investor Relations.

Ryan Peterson

Thank you all for participating in today's call.

Joining me are President and CEO, Kevin Smith; and CFO, Mike Bourque. financial the released XXXX. quarter Inogen today, results second for of Earlier package. earnings the along company's financial in is with Relations supplemental This available the Investor release section of a website

supply will As the include statements a full our and expectations year and regarding prospects for and growth information financial our related strategic reminder, for and presented our initiatives, to the expectations market about on our on term forward-looking for including, our progress without the in XXXX, business statements, products innovation, limitation, and demand our XXXX beyond, short both products, our including strategy today the term. long results for

The involve in more available forward-looking Commission. that XXXX. periodic forward-looking on forth These based as risks are with this are set our in Exchange August information reports are Securities only predictions X, filed and to the statements statements uncertainties and currently of recent most in call detail us today's date, and

and obligation may be results except to required by disclaim may statements forward-looking vary, as Actual these law. update we any

in posted presentations in detailed to files more historical statements Relations company's Investor Please our financial these for of investor refer information. have website. section We the the

expenses on call, conjunction investors financial by also certain the for a are and management results. financial certain indicative information that that both U.S. present not core During operating measures believes excluding non-GAAP items GAAP measures financial will Management with information basis. of in other and we non-GAAP taken Inogen's provide noncash useful

non-GAAP release. presented tables uses our GAAP decisions. and between business are evaluate measures and in understand, and operating to earnings Reconciliations manage our Management make U.S. within non-GAAP internally results

call Inogen's and With President that, CEO, Kevin to Smith. over will the I turn

Kevin Smith

you second conference for thank quarter and XXXX our afternoon, Good call. joining

pipeline. will our review top growth, innovation outlook. today's provide financials X and will priorities: line to a progress our strategic on full then of driving for our Mike expanding the advancing path line our profitability I turn updates call, our to towards I During and

provide quarter I X% updates and from priorities, the on growth quarter million I strong to year-over-year strategic results. second would achieved XXXX second our $XX quarter like XXXX. our of reflecting XX% total Before We revenue, growth briefly highlight first in

the our strong reflective of in team performance quarter worldwide. from execution commercial Our was

leadership also now with excited place. and completed are have We our the executive move transition team forward to in concrete

Turning to growth on by was highlighting initiatives, driving start highlight I line The on updates channels. business-to-business growth. our strategic our our will progress top of the and quarter in

existing our health do our highest an job to Inogen and cost Our and attractive differentiated a make worldwide. We and host a team total services new offerings value-added of continues digital stellar believe resonate POC building lowest POCs, the to that partner. offers customers relationships and with quality us the with strengthening serve as customers

to saw in differentiated complemented the channel a growth we we nicely addition, execution. quarter, related In but our in sales channel our by XX% sequential in recent generation reflects modest our base strong sequential This competitive our and on BXB declines rep and the a which growth. progress exit again generated lead also from productivity. channel, saw our was improving commercial tailwind driven In This direct-to-consumer growth overall offerings the year-over-year market.

and reminder, more force year-over-year operating As a we with a a basis. downsized are efficient on sales

our programs. work are and channel. to continuing we we are Across We we patient-first approach high-margin making business, this progress about our now previously the optimize the and are excited pilot attractive as announced to continue through to hospital also

our rental hospitals initiatives in hospital practitioners. individual addition in channel targets to The

the targeting can over duration care receive earlier we able their Our we patients payments. hospitals, are in to increasing access which pathway,

the our insurance rentals. both execute to sales cash in initiatives Our patient-first channel of reps cross-training involves and DTC sales

them receive who wants everyone POC can Our that is to easily. goal receive Inogen quickly ensure and to an

are encouraging the place. and are they to updates those formally as providing more seeing put programs in look We results forward on

on profitability our made meaningful EBITDA Switching is milestone tenure product please be first a at to thoughtfully exciting durable EBITDA reaching our advances pathway in profitability time, profitability profitability significant sustained adjusted report step progress of support where continue sustainable of in over to portfolio. Inogen. But growth. right to I'm do in note in we my quarter with This as adjusted to direction. thrilled and an the current to will a the pipeline path our will see Over innovation we necessarily not linear invest and we quarter.

in of drive our sales a rental operating programs our channels of are business. improvements our the variety a margins in for we optimize in we to are host position to go-forward initiatives part operating executing These of During profile. to DTC higher including continue quarter, areas these of

the these are We of the through excited financials. take about but following they will begin time prospects initiatives, to

direct-to-consumer the our operating consumers affect to channel, These heavily Turning as November TV to and approach advertising further relies expense primarily where increases costs reach costs experienced leads. generate on we expect in which sales election. and advertising we

share product market our and to make continue would forward the We to meaningful progress to I look innovation bringing FDA U.S. Finally, on pipeline. to toward updates like clearance. the Simeox

provide We they will become as available. updates

Moving to portfolio. our POC

in the flow the new of of X life offers of POC, fourth service We POC up the a oxygen the X half generation market. year. setting, expect newest lightest the Rove in back weight the X production to years in highest continue the to the The in a patients launch Rove

treatment. as mission on with to and they These opportunity representative mobility our an therapy innovations oxygen of to maintain of provide are undergo patients quality life

our digital continue possible. we easy in as as maintain to and offerings to remain devices utilize Inogen Additionally, to ensure invest

of I progress towards to am would has team that, made our the say our like quarter. significant With proud initiatives the strategic in I

now detailed to continue our will over more turn near long-term We will Mike results. the of and to call a success. to Mike? position I review for financial Inogen

Michael Bourque

was the increase of sales prior the Total business-to-business comparable was by $XX.X comparisons higher by for sales, to and Thank good partially offset to are revenue. the period. XXXX otherwise an domestic Unless compared all increase The year you, revenue noted, Kevin, million, and direct-to-consumer international of X.X% driven prior rental lower and year. quarter afternoon, everyone. primarily financial second

second had total impact the impact on exchange quarter, revenue. on For points basis XX and points international basis revenue negative a foreign XX a negative

to quarter Looking more on revenue XX.X% headcount. business-to-business XX.X% Direct-to-consumer primarily in at detailed increased the driven by period revenue basis. from second million a million Domestic $XX.X sales $XX.X lower representative decreased prior period to new to driven prior customers. in revenue International increased versus volumes XX.X% period. compared with the million in $XX.X increased and $XX.X comparable the million million by to $XX.X $XX.X existing business-to-business million

primarily business, and new average by Rental existing rates shift $XX.X million increased volumes to X.X% was million the driven to prior driven lower billing $XX.X revenue domestic the Similar period, to our by with payers. primarily mix in to customers. private the decreased due increase from

XX.X%, points Now well driven margin year, from a in period of the XXX components reserves which lower on benefit as adjustments to points. by primarily basis to basis onetime approximately Total margins. same the premiums discuss was increasing gross as favorable drove our gross prior for paid XXX

in percentage margin by of XX.X%, Sales of decline driven private back gross volumes. be payers. basis We increase shift margin in of XXX by half XX.X%, built revenue a in was expect basis premium of towards gross primarily was gross components mix price margins the low points, X,XXX Rental patients the an revenue the year. a and in to reduction to mid-XXs driven a points increased and the decrease

of Moving operating The representing on to increase period, increased expense In the quarter, prior due primarily compared second X.X%. the due thoughtfully. by third-party to the $XX.X operating to higher expenses lower increase an $XX.X relationship exit offset consulting expense. in of in our million to total as manage expenses, spend was we this to and area personnel-related marketing our partially sales million

the higher GAAP second net of given had share of with elevated a XXXX, per of adjusted loss of second we a trend million loss presidential On advertisements television of an and adjusted basis, to $X.XX. advertising that $X.XX. diluted election net saw million continue also season, reported diluted $X.X expenses half. We the In $X.X we we of expect per costs quarter share U.S. and the associated into and a loss loss

to to period. prior closely in quarter Adjusted expenses managing the a we as performance quarters. EBITDA half viewed of necessarily second are should and EBITDA upcoming into of loss not said, the our positive as of pleased adjusted continue year $X.X million positive back compared our the was be That We're report $X.X million year. predictive

Moving on balance to our sheet.

with equivalents, of no debt As securities of we June million $XXX.X had cash, XX, outstanding. restricted XXXX, and cash marketable cash

revenue to the our expectations to $XXX we X% the line back year our within share progress I million, million X% I XXXX. $XXX today, our on the revenue year reflecting for first the year turn and to to expect full half XXXX of growth. business would in like year-over-year Based Before full in to trends be Kevin, approximately

to I the in mid-XXs the remarks. with as Kevin closing the mentioned that, expect addition, I back for In of And earlier, to gross in year. pass be will half the call back margins to we low

Kevin Smith

was of in to I CFO for the we transition of role, excited time place. XXXX the new first as team half our to management Mike am The Inogen and welcomed have

respiratory determination look therapy our their as you to the our care second expand continue open progress approach disease. patients that, forward maintain will will best-in-class of updating to XXXX. deliver in Operator? respiratory to for to the With and for steadfast with it patients We that we remains questions. half team around Our impact into on globe, I up we

Operator

from JPMorgan. first Instructions] Marcus Robbie is question [Operator with Our

Lilia-Celine Lozada

bit you actually thinking progression And thinking force productivity Hoping Robbie. DTC. commercial size give of is XXXX? sales a the little the How over on the color should about ramping This here? force. in be organization with starting we how for sales you the Maybe the are from Lilly about of on could of

Kevin Smith

question. Yes. Sure. Kevin. the This one, I'll that Thanks start with for Mike. is

range. in So is I the organization, or recent at XXX XXX indicated call as the side our DTC call, -- our sales it last was we in to believe a in

believe of unless a going outside training And size the not the what and we to that we organization in to so have size to grow. order of we tenure that need varies with comfortable comment good building they it so team that the But of forward. that forth we're We have is on size significantly. are that that that continue going team to

to patient-first an have trying do other here the than We're out about Inogen productivity. seeing we're as go pilot them. any of positive Within but patient that who as have easy referenced as well. POC that talking to an within to on had focused revenue increasing metrics that Inogen we we We're to get we that today, into traction We're make are going it POC. wants individual not as channel, DTC come for possible

that us we continue efficient. making smooth grow we're the and And help So to going to future. that's in believe

Lilia-Celine Lozada

the about talked strategy. you business, the of side rental hospital the on then And Great.

bit progressing can a have and So we be those big for of should how opportunity can relative be been efforts individual on you how give how more to you practitioners? this an about color thinking

Kevin Smith

results well you at at -- little Certainly, The referenced to sales -- the in bit team as going little bit Lilly. the It's actually continue is from happy upstream, look this before, that, think that this now channel, even further that rental and just a further upstream. is third-party out The prepared the offices team, hospital when looking in-house offices. That to as that purely -- a an you is, a going going that's is organization an is what color, the with we're hospital with going were a that additional we're achieving. referrals physicians' build. into so satisfied but is as prescribers. had scaled for that. partnered But about So I've pilot, us to And the opportunity that side, some the team very right? there. remarks bit, the We're although those gain previously back we with but to we

of by time oxygen, they're the the set patient up center. the as hospital, often they're leaves coming a tank with the So out

period, now. of we into the get X to we're financial that I We phase a be them already but sales away We executing that of are but set go referrals are, in the hospital, quarter. can as but we capitated efficient one, falling able flow-through right into here some in with I'll with with with into fully don't see on see as an they wouldn't that billing that capture coming months the a eating the they've number for until that go pilot patient meaningful remind we're to we prescriber expect more further the downstream, patients per is, you, patients call with and get had if Plus this statements, of have sales team before reps. that POC, those trying That Inogen coming is to out a billing. hospital, day that up the

Operator

question is James Beer next Blair. Our with William from

James Beers

I say, Were lumpier there during on Jimmy is sense start the that at a also related saw Is exiting domestic, maybe, some the the this I improved relationships Margarate. internationally. on confidence Respironics tailwind first you the BXB on give on And know maybe us end? your market looking international to continuing getting could that market. Congrats also of for parse your saw, know you BXB on be at a OUS. you on And off then just on wanted you you also and rate? mentioned tends strength out? This better the just any little good I it quarter. can quarter? a large tenders then first to to

Kevin Smith

do to add would one want And Mike, with start like maybe, and to color? you that

Michael Bourque

I'll part Kevin, first the take that question. of Sure.

of onetime BXB results in any terms -- broad-based our orders repeatable. call from we the question both new were Jimmy, and in So believe we of channels The in We could existing didn't owners demand out onetime your receive of result that not tenders. and really terms customers. that on large any

that answer we first wasn't there So call to orders. question, really no, anything outsized

Kevin Smith

there we those to internationally. the continued build -- And do Yes. opportunity see

on For the side see that feel at see the but our I we've and know, said, of don't see this I new can business reason, a that that times, things, we'll of gained market. because but internationally. tailwind as this is there. adding this in certainly domestic exit are the that to built And do growth. we is, that as onetime We've existing is be gained tailwind also relationships see the certainly the exit, of that it chunky from being growth competitor some U.S. We deals We've some pretty Mike as that customers. additional customers. certainly, gained we

James Beers

Great. a That's touch gears I bit. guidance. switching wanted to helpful. little And maybe on

now digits, last grew year. of X% first growing high mean call X% quarter, this you're the half You quarter. I it, in the single

guide half think to deceleration easier now stay comps. the I a similar despite implies in second the

look more business outlook to long conservative and we then right the the why sort for maybe this So going of you XXXX forward? model range term, and growth maybe as should what's of

Michael Bourque

question. that Jimmy, thank you for

talk with half First philosophy. pleased in I'll saying start XXXX. off our had just of bit by all, a we're really -- first we're the also little about we I'll strong guidance

philosophy to number, So achievable able our and guidance is in be to ranges, to it. we to that meet exceed really set commit prudent or want

we're In terms headwinds based seasonality what second election. therefore, guidance the seeing of half is of year our year the guidance guidance, the and for, full anticipating normal on we're the national beyond say,

result more obtain expensive, we difficult to we're placed. Advertising, to be being and may expecting that good believe may be slots, ads unless

as leads may a have result fuel advertising we the So changes. of

really that's DXC impact second and the of business, for year. half driving So an we our that as of what's guidance see the kind to that

James Beers

helpful. was That Great.

Michael Bourque

-- of about your your future. question other of question in kind Now terms

So comment kind point. kind move not going to this of determine we'll of of really the what as talked to we've terms time, this going stick at AOP the beyond what and into our But of we progress or we forward, And at get we kind guidance. think XXXX guidance type on we in forward. of we're process towards year, of rest about

Operator

question next with Our Stifel. is Blackman Matthew from

Colin Clark

on your And think return on fastest-growing in-house. prescriber the that business for would could rental that productivity do I to see we this the even This in you to business. XXXX? the near channel wanted efforts in term brought thinking for How to about ramping? or specifically What chop about productivity you is left Colin being Matt. start the ramp there?

Michael Bourque

our in start. you going on as see just But the some we going time, I maybe payers, of at expand on point towards on that on think to had. I'll of Basically, Medicare. it's we're can it, questions rental helpful what's Colin, kind less private the seeing then and trend what's business we give other still view in this in

the rate patient reimbursement Advantage. lower relates per month Part to shifting Medicare the trend the payers versus to of that Medicare. So on private

of new we over compared stayed but attrition somewhat QX to, look say, past As with our at up the last patients. has few quarters we're consistent patients-on-service, patient-on-service year, offsetting

more patients, seeing we're what So is CAP patients. less therefore, bill

margin Those are also the obviously, of as but rental top kind dynamics on business, impacting our impacting our gross line, are the downs drop those well.

the we're funnel. maybe channel. add more of on billable you kind can We to patients some adding this how here are color approaching Kevin, on focused

Kevin Smith

so to we're the And more into get opportunity opportunities right, get more certainly. revenue that to channel, patient call, before sales that And also of per planners at pilots referrals up the then -- hospital. discharge opportunities going hospital a go able that per be if to patient. sales more and the capitated period, working that looking months food enters the to billing have Yes, will, further will rep, at back you the chain, more to through per

So comment see to with will that accretiveness. good that point that do other on future the I we as in ones time, specific we opportunities. see do continue but the for build at to how this of channel compare there won't to the opportunities

Colin Clark

helpful. then on had really I one gross And That's Understood. margins.

me driving line and forces quarter rental from really cost through higher -- the adjustments inventory of again margin the rolling sales, during onetime the Beyond or can costs quarter? which affected last the step-up off, the of the particularly, walk you driving gross second the

Michael Bourque

Colin. Sure,

an getting what a reserve bit of uptick accounts. little this some from So our adjustments to quarter in terms of we're

consistently part are them always onetime about to and of process in what your margin But went those, question, reevaluating gross our representing typical those the second in we points I'm in basis adjustments, to -- be. QX. favorability sorry, what And closing calling XXX that terms of question? going So other was adjustments of that we're through our estimating the

Colin Clark

sales gross going did the quarter to margin rental which parts understand through line which or off forward? during fall Really that flow

Michael Bourque

margin sales under That's Sure. line. the gross

Operator

Company. from question next with & is Our Needham Mike Matson

Michael Matson

to ask one on kind I wanted in channels. trends just of pricing different the

So domestic with in on BXB particular. I DTC channel? guess, a basis, sales, and this what's international year-over-year happening in BXB, just price

Kevin Smith

we and -- moment it's so got you and there. some we maintain feel with that that. with We've sales. price right start pricing through working there pricing important we particularly been see We Yes, right the go And the see other be But right Yes. It's holding relatively got when -- as we've bit that pressure -- able We pressure the on downward BXB the But on we've compete with messaging stable. with to to have the still there's margin through got see forth. certainly. competitors. when the from lower how on it's channels, in certainly discipline been right we start messaging we've can some in of imaging There's our holding feel we are that. we maintaining But that. to that we pricing resellers the we're that, little that we strategy. that We particularly sales, pull on do some through channels, on there. tight ourselves the certainly to the do at There's to been we've look momentum device a we've price pricing but DTC see on a certainly that when we that, BXB our

Michael Matson

Yes.

wanted in did I product. any check of timing on mentioned to or there of right. All Simeox if apologize some pathway in Were like I the FDA And terms Okay. or anything that? miss then prepared you just this, the updates but there remarks. I

Kevin Smith

No.

and the plan updates look for any to a given would What update as and we should time expect outlook haven't see firm regulatory like. to you line from what one. on that that updates will that, on clearance the the that be then commercialization when timing We timing have we basically

Michael Matson

and a business, do that Okay. been All it's And it know going think And so I the is you so DTC could kind in scaling of rep when headcount back back sales now. that while just forth. on But been growth? take, there's for happen? a to right. potentially And to the guess, what then I get to declining business

Michael Bourque

Yes.

earlier just talk guess that business, in we've I about Mike, perspective, from counts with you rep about Again, high-level that. when on what's a So, going as talked

driving is look much pretty you clearly, that reduction, QX driving what's So -- basis on for the year-to-date. the if a and that year-over-year

benefit some We I'll seeing on that, favorable let rep. decent are seeing seeing we look Kevin effectively, We're basis, cost through pretty on the as that but that's ASPs that, rightsize force. higher well, lot running revenue more a things that of that a we're to We've drop. about selling seeing seeing cut DXC as we that year-over-year comment seeing. what We're per to trying we're but in of you're some seeing there. future and talk want sales but channel. out We're We're and marketing that

Kevin Smith

DTC a getting that's and head got in team right we've feel the in leadership that place, the -- as we the place. reminder, we right and are And year. this count, a Right, with as -- rebaseline

smoothly they to whether be effort have bit get if patient-first, running We enabling here Inogen cash to go -- we've regardless have coverage we easily believe together about and that to sale forward. any able with a talked patient choosing Inogen option. for excellent supporting and that in that, of we've that be pilot team come a an little that potential they that get is easily as program this that get wants been an or POC insurance they're to put that in able we as marketing

that to we So that we're good working on forward. cost structure managing but with there, making on optimize, that the today have through sure feel pilots going the we within the working we're

Operator

today's This conference. There time. are no does further questions at this conclude

time. disconnect You for this you participation. your your may Thank at lines

Inogen (INGN) 6 Aug 242024 Q2 Earnings call transcript