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Inogen(INGN) - 2022 Q4 - Earnings Call Transcript
INGNInogen(INGN)2023-02-24 02:33
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Financial Data and Key Metrics Changes - Total revenue for Q4 2022 was 88.1million,representinga15.388.1 million, representing a 15.3% year-over-year growth from Q4 2021, driven primarily by higher U.S. business sales and rental revenues, partially offset by lower direct-to-consumer sales [50][51] - For the full year 2022, total revenue was 377.2 million, an increase of 5.4% compared to 2021, primarily due to higher international business-to-business sales and rental revenue [52] - The company reported a net loss of 56.6millionforQ42022,withanadjustedlossof56.6 million for Q4 2022, with an adjusted loss of 13 million, and a full-year net loss of 83.8million,withanadjustedlossof83.8 million, with an adjusted loss of 26.2 million [85] Business Line Data and Key Metrics Changes - Domestic B2B revenue increased 164.6% to 27.2millioninQ42022comparedto27.2 million in Q4 2022 compared to 10.3 million in Q4 2021, while domestic direct-to-consumer sales decreased 23.4% to 25.3million[27][79]−Rentalrevenueincreased14.425.3 million [27][79] - Rental revenue increased 14.4% to 14.9 million in Q4 2022 from 13millioninQ42021,benefitingfromhigherMedicarereimbursementratesandincreasedbillablepatients[51]−Forthefullyear,rentalrevenueincreased22.513 million in Q4 2021, benefiting from higher Medicare reimbursement rates and increased billable patients [51] - For the full year, rental revenue increased 22.5% to 56.7 million from 46.3millionin2021[80]MarketDataandKeyMetricsChanges−InternationalB2Bsalesincreased3.146.3 million in 2021 [80] Market Data and Key Metrics Changes - International B2B sales increased 3.1% to 20.7 million in Q4 2022 from 20.1millioninQ42021,withafull−yearincreaseof27.320.1 million in Q4 2021, with a full-year increase of 27.3% to 101.2 million from 79.5millionin2021[28][80]−Foreignexchangehadanegativeimpactof150basispointsonfull−yearrevenueand240basispointsonQ4revenue[29][50]CompanyStrategyandDevelopmentDirection−Thecompanyisfocusingonapatient−centricmodelthatenhancesaccesstoappropriateoxygentherapymodalitiesacrosschannels,aimingforgrowthandprofitability[19][20]−Thegrowthstrategyincludestwovectors:drivingPOC−basedoxygentherapyandexpandingproductofferingstoservemoreadvancedCOPDpatients[16][17]−Thecompanyplanstolaunchnewproducts,Rove4andRove6,in2023,whichareexpectedtoenhanceitsmarketposition[22][39]Management′sCommentsonOperatingEnvironmentandFutureOutlook−Managementexpressedconfidenceinunderlyingcustomerdemandandapromisinghorizonofmarketopportunities,withexpectationstoreachpositiveadjustedEBITDAbyQ42023[49][88]−Thecompanyanticipatesthatsupplychainvisibilitywillimprovethroughout2023,whichshouldcontributetorevenuegrowthinthesecondhalfoftheyear[60][87]−Managementacknowledgedchallengesinthedirect−to−consumerchannelbutisoptimisticaboutscalingeffortsandimprovingproductivity[92]OtherImportantInformation−Thecompanyincurred79.5 million in 2021 [28][80] - Foreign exchange had a negative impact of 150 basis points on full-year revenue and 240 basis points on Q4 revenue [29][50] Company Strategy and Development Direction - The company is focusing on a patient-centric model that enhances access to appropriate oxygen therapy modalities across channels, aiming for growth and profitability [19][20] - The growth strategy includes two vectors: driving POC-based oxygen therapy and expanding product offerings to serve more advanced COPD patients [16][17] - The company plans to launch new products, Rove 4 and Rove 6, in 2023, which are expected to enhance its market position [22][39] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in underlying customer demand and a promising horizon of market opportunities, with expectations to reach positive adjusted EBITDA by Q4 2023 [49][88] - The company anticipates that supply chain visibility will improve throughout 2023, which should contribute to revenue growth in the second half of the year [60][87] - Management acknowledged challenges in the direct-to-consumer channel but is optimistic about scaling efforts and improving productivity [92] Other Important Information - The company incurred 23.8 million in higher material costs associated with semiconductor purchases in 2022, impacting gross margins [31][86] - Total operating expenses for Q4 2022 were 88million,significantlyhigherthan88 million, significantly higher than 45.3 million in Q4 2021, primarily due to a one-time expense related to an intangible asset [55] Q&A Session Summary Question: Can you discuss guidance and potential disruptions? - Management indicated that guidance includes considerations for supply chain disruptions and macro challenges, with expectations for a cautious ramp-up in the first half of 2023 [89][92] Question: How is underlying demand and volume? - Management projected increased volumes and steady demand, with expectations for growth in the back half of the year [66][67] Question: Are there ongoing headwinds in B2B customer access to capital? - Management confirmed that challenges remain regarding B2B customer access to capital, but efforts are being made to normalize ordering patterns [68] Question: What is the status of competitive pricing and customer preferences? - Management noted that some B2B customers had opted for lower-quality competitive products during supply shortages, but there is a return to Inogen due to dissatisfaction with competitors [70] Question: Can you elaborate on the DTC headwinds? - Management explained that the DTC model is evolving, and while there are headwinds, efforts are being made to scale and improve productivity [92]