Yahoo Finance Inogen Inc (INGN) Q1 2024 Earnings Call Transcript Highlights: Navigating Market Dynamics with ...
Total Revenue: $78 million, an 8% increase year-over-year.
Direct-to-Consumer Sales: Decreased 15.6% to $20.5 million.
Domestic Business-to-Business Revenue: Increased 31.3% to $16.5 million.
International Business-to-Business Revenue: Increased 37.2% to $26 million.
Rental Revenue: Decreased 8.3% to $14.9 million.
Gross Margin: Increased to 44.1%, up 150 basis points year-over-year.
Net Loss: GAAP net loss of $14.6 million, loss per diluted share of $0.62.
Adjusted EBITDA: Loss of $7.6 million, improvement from a loss of $11.8 million in the prior year.
Cash and Equivalents: $119.8 million, with no debt outstanding.
Q2 Revenue Forecast: Expected to be between $81 million to $84 million.
Release Date: May 07, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
Inogen Inc (NASDAQ:INGN) reported a total revenue of $78 million for Q1 2024, marking an 8% year-over-year growth.
The company saw a significant increase in international and domestic business-to-business sales due to higher volumes from existing and new customers.
Inogen Inc (NASDAQ:INGN) is benefiting from a modest tailwind following a competitor's exit from the U.S. home respiratory market, positioning them to potentially capture additional market share.
Gross margin improved by 150 basis points from the previous year, primarily due to lower average cost of components.
Inogen Inc (NASDAQ:INGN) has a strong balance sheet with $119.8 million in cash, cash equivalents, and marketable securities, and no debt outstanding.
Negative Points
Direct to consumer sales decreased by 15.6% to $20.5 million from $24.3 million in the prior period, driven by a lower representative headcount.
Rental revenue declined by 8.3% to $14.9 million from $16.3 million in the prior period, mainly due to a mix of lower private payer reimbursement rates and higher rental revenue adjustments.
Rental revenue gross margin declined by 1,040 basis points, primarily due to lower net revenue per patient and an unfavorable mix shift from Medicare to private payers.
Inogen Inc (NASDAQ:INGN) reported a GAAP net loss of $14.6 million and a loss per diluted share of $0.62 for Q1 2024.
Adjusted EBITDA was a loss of $7.6 million, although this was an improvement from a loss of $11.8 million in the prior year period.
Q & A Highlights
Q: Can you discuss the impact of the U.S. B2B business dynamics and how they influence the guidance for the second quarter? A: (Kevin Smith - President, CEO) We're not seeing any significant headwinds currently. The capital markets haven't been affecting our business negatively, and we're confident in our ability to meet our forecasts for the upcoming quarters based on a robust, bottom-up forecasting approach.
Q: Was there any impact on the rentals business due to the exit of the third-party support contract for the prescriber channel? How should we think about gross margin in that business going forward? A: (Kevin Smith - President, CEO) Transitioning from the third-party relationship did cause a temporary bump, but we've integrated the high-performing members of that team into Inogen, which is now performing well. (Michael Bourque - CFO) Regarding gross margin, factors like lower Medicare rates and a higher mix of private payers have unfavorably impacted it. We expect some ongoing service costs but aren't providing specific guidance on gross margins at this time.
Q: Can you provide insights into the second quarter guidance by business line, particularly the assumptions for DTC and B2B domestic growth? A: (Kevin Smith - President, CEO) Our guidance reflects current business trends and considers various factors including channel evolution and leadership changes. We're not providing specific guidance at the channel level but are focused on managing the business based on a detailed, bottoms-up forecast.
Q: What is the strategy behind targeting the hospital channel, and how significant is this market for Inogen? A: (Michael Bourque - CFO) Targeting hospitals is strategic because a large percentage of oxygen patients are diagnosed there. Engaging hospitals allows us to capture patients earlier, potentially increasing billing periods and strengthening prescriber relationships. It's a promising opportunity, though still in early stages.
Q: How are you addressing the decline in the DTC business and what are the expectations for this channel? A: (Kevin Smith - President, CEO) The DTC channel has been resized to focus on profitable growth rather than expansion at any cost. We're seeing encouraging signs of higher productivity and are piloting new initiatives to enhance efficiency and customer reach.
Q: Regarding B2B growth, particularly with Philips Respironics exiting the market, do you see an opportunity to adjust pricing given potential shortages of POCs? A: (Kevin Smith - President, CEO) While we've seen minimal impact from Philips' exit, we're prepared to capitalize on any opportunities. We're positioned as a premium brand and are not significantly pressured to compete on price, focusing instead on quality and brand recognition.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
