INGN - Earnings call transcript Q4 2024

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Operator

Welcome to Inogen's Fourth Quarter 2024 Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded today, February 25th, 2025. I would now like to turn the call over to Ryan Peterson, 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 full quarter Inogen XXXX. year today, results fourth for and Earlier is the financial available of release earnings The in website, with the Investor along the supplemental package. company's section Relations

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

as of Securities date, Actual disclaim detail XXXX. our may with most in are predictions recent forward-looking forth periodic XX, statements only today's except statements, statements by call to These forward-looking set and be involve that we on filed are this reports uncertainties us risks information vary, in as required Commission. and law. and based and the any February these forward-looking The to are may more currently Exchange update obligations in available results

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

our results non-GAAP GAAP within U.S. between are presented and in release. Reconciliations earnings tables

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

Kevin Smith

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

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

for steps the made advanced device FDA our significant XXXX a X launched on the POC, clearance latest and company States. year strategic of progress for We was received in the our Inogen. returned our to Rove growth, toward initiatives. We profitability, forward United Simeox

share I to and I'd our collaboration recent in an investment a a entered on collaboration this Before from leader We Medical, Yuwell more global XXXX the like achievements, January announcement, in care XXXX. highlight market. into respiratory exciting

concentrators the part China, agreement, respiratory under As the of distribute in the and large Inogen expediting our brand Yuwell entry market. portable oxygen into Chinese Inogen would fast-growing

the their In addition, brand States. under the in Inogen we will distribute United concentrators oxygen stationary

Inogen, our We support our meaningfully use are of closed to happy collaboration believe is reach a this and stake. in collaboration, to global and time, a in investment our and in portfolio expand growth us support of our allow our This we XXXX, product growth approximately subsidiary representing XXst, broaden of $XX objectives. profitability. commercial invested million transaction on will long-term for ownership Over February X.X% additional valuable announce capital the alongside Yuwell wholly-owned

XXXX Turning accomplishments. our back to

reflecting we For $XX delivered growth over In quarter, we fourth year. the million in year, in the achieved over full revenue, prior representing million X.X% the revenue, year-over-year $XXX over growth. X.X%

This pressure by force. make our new progress customers. channels, with was Our offset business-to-business somewhat in time our channel DTC to current our was and where continue driven growth both we by downsized in primarily related periods sales to

in to channel focus to remains a DTC and X X the to am that the key of going performance confident years. forward, return I positioned we growth are our Improving well continued next

continue profitability, generate sustained to efforts a X advancing product were steps significant forward. adjusted commercial made we objective, strategic profitability, second our where to In and expect EBITDA we operational XXXX, have diligence. XXXX, to In shifting of to able Now driving to reach in carefully quarters later execution we XXXX. in will financial of spend. be driven These managing support organic expect improvements Yuwell in the outlook relative detail call, by EBITDA our will Mike improved of our while efforts collaboration. XXXX adjusted organization our in growth but we

device. Finally, share culmination innovation like clinical our marks regulatory for to would teams. our Simeox In updates December, airway the received clearance effort our significant by FDA a of I on we pipeline. XXX(k) milestone and clearance This

in pursuing United limited reimbursement a and to States, Our are in in focus has for launch targeted device planning XXXX. we the now sites turned the U.S.

suffering bronchiectasis, include COPD with diseases expands retention, Simeox cystic and hypersecretion patients reminder, our portfolio a associated fibrosis. and product mucus lung As from as to such

with Simeox time-consuming patient potential of devices we believe limited POCs to commercial alternative as of the offers our also through the standard therapies, our traditional investment. represents provides same has investment sizable a and for expanding more commercial commercial and of the over a improvements opportunity in for channels us care. sold addressable vest-based being new mobile population a the force. significant our existing Simeox without call Simeox sales each by and current has less point

an by ongoing Additionally, of we capital which intend sale, to sales disposables, followed with us commercialize initial attractive Simeox stream. should revenue through recurring an provide

reimbursements for We to begin will the efforts XXXX. submit first in of Simeox quarter

We X launched POC in back platform. POC, our Rove to October the of latest XXXX. Turning our

Patients connectivity from setting enhanced allow Meanwhile, life feedback mobile. providers this digital support providers distributors made patients to them that health accessibility. appreciate X remote device our received offerings significant and of four nearly on positive and with device. battery we have and new already remain lightweight, in have to its advancements hours We flow patients, and

our several and in ability and that remotely patients launching with the to usage. provide the monitor device of health process will partners updates We are

software receive patients summaries important updates, To receive phone. our fulfill the partners from Inogen principle health patients as of in is to core new The life battery features money. all BXB their our are check our digital and connected principle, increase app, for accessibility for solutions time this and we while including ability such to saving device

BXB to partners, be now able for service issues, device they removing our need will the remotely diagnose visits. costly repeat For

thank like entire and team with for commitment thrilled during I to to for new our change. Before am XXXX diligence, in I we success leadership confident place, I to going I patients partners team positioned pass of and the the our into move a focus have to fully year am line would Inogen Mike, and their forward. Inogen

on an With to it that, update Mike I will financials. Mike? to turn provide our

Michael Bourque

Unless everyone. Thank noted, and period. to afternoon, prior are all Kevin, year you, good the comparisons financial comparable otherwise

X.X% an primarily prior domestic in Total the lower sales for direct-to-consumer higher of and of revenue compared increase year. new by offset customers and and the XXXX sales, was partially demand $XX.X increase million, was business-to-business international to fourth revenue. driven quarter by rental The

positive points XX positive impact fourth quarter, on XXX and points on impact a the had revenue foreign total For a international basis basis exchange revenue.

compared resellers. in increased $XX.X by to million a primarily comparable prior basis. $XX.X to by customers. Looking Domestic customers increased and period, $XX.X the in from in our in and at million International revenue detailed million the quarter revenue fourth on new to $XX.X business-to-business Europe period partners increase driven more business-to-business XX.X% versus demand XX.X% million revenue driven from an increased demand new

million and $XX.X channel. continue with Direct-to-consumer million profitability to sales efficient from smaller period in team decreased operate more XX.X% the drive as in a $XX.X to prior to we this

be XXXX. the reduction force in year-over-year comparisons in not of mid-XXXX. The effect sales significantly our we reduced As size this of will a early our reflected until reminder, DTC

payers. XX.X% revenue shift to decreased primarily mix million period, by average $XX.X the the billing $XX.X Rental due to private to continued from in prior million lower driven rates

same lower driven discuss material fourth to partially basis costs and in increase operational offset quarter from and year, Sales the Now on increased Total operational a business-to-business primarily XXX gross increasing margin of sales prior by gross sales. mix was revenue XX.X%, in gross efficiencies. raw primarily lower was driven material by period XX.X%, the basis margin by an toward change raw points margins. X,XXX points, costs efficiencies,

Rental revenue net percentage XX.X%, of a reimbursement a lower mix of of gross on private X,XXX a patients points, rental a patients patient margin decrease payer by to and per result compared shift revenue the decline in higher driven service. billed basis of was total as

operating prior million to to on This the to fourth of XXXX decrease in of related XX.X%. expense quarter earn-out the onetime expense. to the certain by million Moving the expenses and a of primarily the quarter, $XX.X changes liabilities and related total fair representing compared value transition was decreased a lower fourth in costs result company. consulting operating as initiatives to period, CEO in decrease taken In the cost-saving of $XX.X

in compared XXXX period negative million in prior loss $X.X comparable of adjusted to $X.XX to had $X.XX was On a quarter we million XXXX. the EBITDA million $XX.X the the the of the to of negative loss of $X.X of and in quarter an year million Adjusted a versus XXXX, of fourth of XXXX of of share compared to reported a an fourth adjusted $XX.X loss quarter compared the we in compared the per $X.XX $XX.X share per $X.X period. XXXX in loss net of a loss quarter fourth diluted $X.XX diluted million loss fourth of fourth GAAP loss quarter net fourth of quarter and a in of XXXX. the a In million a in basis,

to sheet. our balance Moving on

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

with his Yuwell, Inogen, mentioned have Kevin remarks, As part they our invested further collaboration $XX.X sheet. of strengthening in our balance in million as

year. an XXXX performance. business-to-business X.X% sales the Now revenue. full prior in for by the rental direct-to-consumer Total of lower increase increase The offset and to million, international was by full touch year on was and partially increase driven compared domestic revenue of sales, to an year $XXX.X

For and international impact exchange total positive year, impact on a revenue. on revenue XX XX the positive basis foreign points had a basis points full

about impact continue material operational including margin basis and the offset that basis partially gross sales given increasing points amounting and was by overall was primarily XXX from lower gross mix. onetime adjustments raw our will prior points, costs some Total driven XX.X%, channel sales Channel channel XX to margins to by mix year, performance. efficiencies,

$XXX.X year, to XXXX, For compared operating total full a representing decreased million to of the the full decrease for year expense million XX.X%. $XXX.X

Excluding noncash in of million XXXX, impairment decreased charge $XX.X expense onetime the operating X.X%.

year the adjusted $X.XX loss On $XXX.X XXXX a For for basis, in compared full and the loss the per the million loss million $XX.X to year $X.XX net GAAP net of in $X.XX $XX.X to $X.XX million a we of full and compared adjusted an $XX.X full XXXX loss a year, share for year loss year full of loss in of diluted versus per we of XXXX. of compared million of XXXX. a to share an the had diluted a full loss XXXX reported

$X.X a for negative $XX.X million the the year negative full was a year EBITDA full to Adjusted million compared for XXXX.

year-over-year progress in maintain net loss, the with and XXXX, approach we loss pleased and net we demonstrated adjusted very EBITDA going diligent on to are spending We GAAP adjusted will forward. a

now and On discuss quarter financial note, XXXX will full year outlook. that first I our

quarter we be of quarter first first to $XX expect $XX XXXX. relative growth For revenue the to XXXX, the range in to X% reported million million, to reflecting X% the

year For of to XXXX. $XXX XXXX, in the growth the X% of to million, the X% reported range revenue full $XXX to year we relative million to reflecting expect be full

to for the margins. product to on strategy into we gross lines, a full generate trends XX% in goal XXXX. and to Also, drive and expenses our the of adjusted to range full margins introduction our to EBITDA associated positive to approach in Turning Based result costs year XX% breakeven in and expect is as of business-to-business manage continue profitable our our Simeox with diligently leverage the as business. we this our of year XXXX channel for be growth, strategy, Yuwell

be cost improvements while by growth to We to our driven structure. top and expense leverage expect future existing operating profitability management line we

proposed turn Before to back make I recently note tariffs. regarding would Kevin, I to line like a the

monitoring government the been in and commentary a we have comprehensive Our actions, closely conducting analysis situation. of team and has been diligent

will facilities manageable. are our Given believe Plano, in that located any primary be headwinds manufacturing Texas, possible we

appropriate. as the U.S. keep federal other on to and from this entities will front our communications stakeholders We government continue informed and follow

To share my the remarks, would like to year ahead. I optimism conclude my for

sustainable great with with management portfolio financial a product and spending, have and well. And team believe diligent as attractive, we we profile approach We a an will to Inogen. achieve

the with I will that, remarks. Kevin back And closing for pass to call

Kevin Smith

our very I'm of Mike. performance. you, XXXX Thank proud

world. significant remarkable the to drove for I We into beyond sharing were of results dedication the deliver patients we XXXX Our and to resilience and our our innovate confident respiratory continuing that team. our look and carry progress. will forward and by future around momentum growth while am product

Operator? questions. With for up that, I it will open

Operator

Blair. Kaczor And from question our with first Margaret comes William

Max Smock

I the tonight. be Any Margaret for guide the agreement just throughout sense. in on on wanted helpful the and puts overall Max to in Yuwell guide. of It's that the contemplated takes XXXX? start guide What's terms in on would

right you Any believe you And synergies margin, had leverage there? to then in terms ask be second Yuwell just of of headwind through greater expecting color my a that great. know Can I part, be upfront. you I'll guys but would you're would mentioned gross said some I operating talk just the margin. some

Michael Bourque

Mike. Max, take first at of of margin this that I'll part question, in impacts our that or gross terms in is Yuwell even least guidance.

impact in is XXXX. Yuwell revenue just mind, we We But in last some that this expectation in for significant our do Our results have keep won't a deal week. closed there. have

in a us while get take to running a to lot going have But and up it's there. don't we there. So

relates about helpful. something this prepared -- margin might impact really the that Yuwell I gross remarks me let comment my add to be made to The in --

there's a looking couple of XXXX. they margins having items in that adds up. amount but onetime we're of don't And a our terms lot, everything in on impact at So gross a to

reference those our products I really and Yuwell of terms made kind be implemented lines. the into comment impact laying Simeox the groundwork is So to introductions the of and Yuwell the for and to rolled other product in

in That, to purchase sheet. still that sitting years combination, our not material it felt of basis to those some addition significant made mention XXX points, previous we to of about was important so in guidance terms was on raw balance Both but amount our impact. those amounts, of in in premiums

guidance lot that's would not again, of in a we terms that into terms of built Yuwell, So the in our guidance. impact revenue XXXX, see of

Kevin Smith

Yes.

sorry is just I supply Max, bit think the other is asked thing this I'd also Kevin, a about that, you add to chain. on the

with respective well. mature us some are materials. in their with you'd to purchasing purchasing potential the leveraging we about power continue that as similar and here for raw think And components of our asked I we our there's purchasing power where as relationship businesses

Operator

And our with JPMorgan. next Marcus question comes Robbie from

K. Gong

another by guide, the Allen is had How the I OUS, but specifically, different question BXB, This cetera? how on modest think the U.S., much we on guide should a about okay, Robbie. et of breakdown segments? is for driven DTC, contribution, between the Yuwell, being

Michael Bourque

think -- haven't I mean, answer sorry, way guided don't question, of -- by we that best to gross first margin channel. the to all, I we revenue

intended to year. that in we give in done haven't We not terms of general feel that a doing now. the for think the for But past. -- I you We're on what how guidance approach revenue the

of in So in XX%. around saw lot I XXXX, we a our business, of combined BXB growth think,

see part of terms not being at but our we in major a the that BXB growth, rate. continuing of So business that

did made about more We you lot that? of of that out the factors we've reps. talked the into our we cost business, guidance at decision we a conscious business, terms of DXC a how look The that kind revenue when the year, have in past other channel for profitable, in make the thing to DXC how took

count had previous lower So we've in significantly the is than years. rep

of as of first result we reduction a revenue. in XXXX out. XXXX we way that that, a through expect That similar to a seeing So the saw in continue play half you're

So in we to challenged on other DXC continue a we'll where revenue year-over-year to lines. words, count point is the until consistent rep that basis, be on the get

the the first in see year. we'll what that's So half of

a we in are that build terms we've those guidance number. of few at revenue So out that do things looked how

piece rental is I part mention the in our business. that of The other of this didn't that, business

going revenue significant changes business. see near to look at we working see improve a business more anticipated term. that more lot in either in of don't doing that be any try on short generate of in significant the you to don't that But of the looking lot rental a terms that revenue. term, at things near significant Again, business, in we But we're channel we're there's are movers. profitable make any of to in changes term, like to and needle the terms -- So the that when things

we So revenue that's guidance. approach how our

K. Gong

the you of the get kind balance of quarter to like fourth quarter of And you're year? guide, the question, to us think from seems the seasonally maybe flattish how through it. how but should the first rest then we perspective? kind then cadence do Got first. from second of about gave the guide And cadence It we a

Michael Bourque

yes, in did So of terms provide QX, we that.

I I significant, at think changes. if look we're -- any not expect not you -- guess,

we also and at quarters at have in from look QX. challenges do We you years and and a our traditionally, quarters previous you'll our strongest seasonality revenue QX QX DTC see strongest and our If look perspective. QX

So I probably to quarters at and good would and the that and that, expect say a would of in see continue QX to terms challenged be would it QX way as terms -- in quarters of seasonality those terms in of by nothing in again, the QX strong -- cadence, being QX lower look quarters. significant to are our in

Operator

comes question And with Stifel. Blackman Matthew our from next

Colin Clark

involved channels I that is be to there? in leverage one This you is similar their call the the you selective that points? how for on channels? going going Colin Anything on about and to sell the and wanted to Simeox to be on Or be it all a portfolio you're that Is going same are to introduce to there can would across incremental U.S. And helpful. and investment with it Matt. quick Yuwell start to

Kevin Smith

Sure.

at both concentrator sense stationary significant you offering to to opportunities go we the for stationary us so channels. that our the rental for we concentrator, with opportunities today, starting So off segments, look do products BXB have able in BXB. for the we -- the We're the where oxygen across where have the see will that -- see be oxygen opportunities branded is don't a similar which as on Inogen. the we There's when Yuwell

those gives us So to components. of both the potential that sell

on know we similar a have don't rental people know impact partners. business we it's maybe and when a the POC, channel, a concentrator. positive others business, margin an place or an It in network, a supply our rental that through broadly with BXB stationary may with concentrator to our will have our not Inogen rental a time impact also every And you may need that on portable a or our patient thing

package and And sell an it's to BXB. also the DTC cash for to those So the opportunity both there's the us rental able be in opportunity of have up our these in for and to channel.

leveraging So to add not sales or having the sales salespeople existing organization, if additional you will. functions,

So more rep. throughput, more productivity per

Colin Clark

you. particular. a And quick follow-up rentals in Got on

the about private you Is changing you talked payer soon? movement, shift don't guys what's payer. You really that mix a if towards anytime me And dynamic that mind asking? see behind

Kevin Smith

Certainly.

really, Medicare plans. we're been into moving look more when -- the shift the of Medicare at that more traditional that Advantage, towards Medicare have shift the So patients we on dynamic from it's mix and seeing Advantage

Some traditional that view to -- on Medicare administration be the Medicare, to Advantage dependent future future. we that seeing the anticipate of that that versus near in is in they continue how but going is how is continue on and current the something going that

Operator

with comes Our Mike from next question Needham. Matson

Joseph Conway

Maybe Simeox. on is This Mike. first around just Joseph for couple the

anything the I out of think, you you more towards some readout the guys, I Just future, trying -- the little I have up to guess can just a know kind looking eventual in a that evidence are in frame us? at there launch. data like maybe Europe. understand clinical generating for is pathway bit

about. good pipe, something would down if coming know the there's be So to that

of And strategy private Can get with guess, KOL just us you're insurers broadly And one framing I'll up engagement after the explanation brief maybe to another engaging just reimbursement? how of of you Medicare have around then then I that. before give maybe kind more Simeox. you

Kevin Smith

I'll And start Mike. with that,

of PhysioAssist in We have would do Simeox, aimed Europe, be small data that the communications to populations, patient work timing and trials, going particularly that going by the reimbursement, mostly that key going those typically prior including We're Europe. sets ongoing generating towards on as we multicenters, had out part some Europe, discussions acquisition data with So Europe. do trial, the multicountries that the has studies expanding that -- be additional have of on been a well CMS. reimbursement be is clinical we've that been have in single the in U.S., center early to that our some in to is with one opinion for reimbursement we engagement which towards on of leaders and determined generating as

Our that make goal Simeox marketplace. sure is in we reimbursement maximize for the to U.S.

as more as CMS. we than possible a concerned maximize assuring that So that with quick response getting from we're

that, by the we I for So mean, to submit in X reimbursement. year have opportunities calendar

and X You have you have X. July January

opinion the we engaging with key identified are So in thought leaders. the We've leaders country.

could engaging teams the Europe, those believe we marketing team as populations physicians thought available to how patient CMS. talking medical as relevant with here, well impact we Our talking and like Simeox, of have are patients talking data some necessary what data about to and about and for ultimately our with leaders reimbursement both from be is that's what would going the about the

that the is been that's That's Officer our Medical a process our engaging. mapped out. that in Chief of and teams process are -- So

physicians to that side, payers. us private payers through private give needs submitted getting you reimbursement to Those some look sort to the company. private engagement for side, happen and process starting And there, the are at the start a will from insurers we in of denied. to order prescriptions. with reimbursement is also to prior the CMS the to go private of to foundation the Those having what get insurance be are On private have to there typically

wanting of that bit I'll a to we reimbursement that sequence to at process, back maximize through those. it's right as the that CMS again, things, make dance go putting You with But and overall doing we're not series reimbursement. sure appeals a the there's risk. But of make a point a an to and sure

Joseph Conway

put force. are just, you makes about curious more you guess that prescriber if talk I referral Great. could broadly, was at sales last Okay. look just whether kind of all And the at time guys -- Yes, the I that does some same on just big the picture, I it it, like sense. trends XXXX on year? at or guess, could seeing look numbers it the sales around sales start you look the force force, any then of at the versus start here the of of just year. maybe size that what

It sounded that like your guys' rightsizing in comments do some there. still there's to

what at some first So I'm in just here pruning terms looking more curious in half are you of the that XXXX, be of guess, done? like, I to needs

Kevin Smith

then there's Well, make one to we if talked -- we just and thing me X the sure missed I've that aspects on it's the that clear, -- it's question, when let is see something the reduced about. channel channel -- the is beginning we in the the direct-to-patients, One That the is where headcount of or on That XXXX. at DTC channel. direct-to-the-customers. in started from DTP Colin,

was had that That a in 'XX. rebaseline we year

the 'XX of more 'XX So be be comparison physician's an prescription calling the that DTC the half fewer first is offices to year-on-year are meaning that that of a year. do sales back comparison, to first in unfavorable The we the in that half the half equivalent where year is compared compared of the a an will the reps half first have prior channel, on referral the pull standpoint. reps will channel. from of prescriber In

relationship We at building the team third-party those directly reps, relationship a away we physician. that smaller much downsize the with referrals did for beginning who that had have the going in-house a did brought sales we We -- sales was beginning with like effective at it reps Those of hire the force the a of been of and year. out year.

we're different make to talking there. clear want just sure things that X I that So about it's

Operator

that, conclude for with further participation. And no there thank your And at does this this time. teleconference. are We questions today's you

disconnect time. your at lines may this You

Inogen (INGN) 25 Feb 252024 Q4 Earnings call transcript