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 September 30, 2024.
“We continued to make significant progress on our strategic priorities in the third quarter. Our results demonstrate our team’s strong commercial and operational execution,” said Kevin Smith, President and Chief Executive Officer. “As we move into the fourth quarter, we remain focused on driving growth, continuing innovation, and advancing towards sustainable profitability.”
Third Quarter 2024 Financial Results
Total revenue in the third quarter of 2024 increased 5.8% to $88.8 million from $84.0 million in the third quarter of 2023, primarily driven by higher demand and new customer gains across the domestic and international business-to-business channels, which were partially offset by lower direct-to-consumer sales and rental revenue.
Total gross margin was 46.5% in the third quarter of 2024 versus 40.2% in the comparative period in 2023. The increase was driven primarily by lower raw material costs, that were partially offset by sales channel mix.
Total operating expense for the third quarter of 2024 was $49.1 million compared to $80.5 million in the third quarter of 2023, representing a decline of 39.0%. The decline can be attributed to the one-time goodwill impairment charge in the prior year period.
GAAP net loss for the third quarter of 2024 was $6.0 million compared to $45.7 million in the third quarter of 2023. Adjusted net loss for the third quarter of 2024 was $2.6 million compared to $8.5 million in the third quarter of 2023.
Adjusted EBITDA was a positive $0.5 million in the third quarter of 2024 compared to a negative $5.5 million in the third quarter of 2023.
Cash, cash equivalents, marketable securities and restricted cash were $124.3 million as of September 30, 2024, an increase of $3.0 million from the second quarter of 2024, with no debt outstanding.
Reconciliations of adjusted EBITDA and adjusted net loss for the three and nine months ended September 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 now expects revenue for the full year 2024 to range from approximately $329 million to $331 million, which represents approximately 4% to 5% growth over the Company’s prior year revenue.
Quarterly Conference Call Information
On Thursday, November 7, 2024 the Company will host a conference call at 2:00 p.m. Pacific Time / 5:00 p.m. Eastern Time to discuss its third quarter 2024 financial results.
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 November 14, 2024. To access the replay, dial (877) 660-6853 or (201) 612-7415 and reference Conference ID: 13749319.
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 nine months ended September 30, 2024, and September 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.
Consolidated Statements of Comprehensive Loss (unaudited) (amounts in thousands, except share and per share amounts) | |||||||||||||||
Three months ended September 30, | Nine months ended September 30, | ||||||||||||||
2024 | 2023 | 2024 | 2023 | ||||||||||||
Revenue | |||||||||||||||
Sales revenue | $ | 74,929 | $ | 67,973 | $ | 212,449 | $ | 192,203 | |||||||
Rental revenue | 13,905 | 15,994 | 43,175 | 47,561 | |||||||||||
Total revenue | 88,834 | 83,967 | 255,624 | 239,764 | |||||||||||
Cost of revenue | |||||||||||||||
Cost of sales revenue | 39,592 | 42,708 | 113,156 | 118,700 | |||||||||||
Cost of rental revenue, including depreciation of $3,247 and $3,364, for the three months ended and $9,554 and $9,680 for the nine months ended, respectively | 7,898 | 7,495 | 24,016 | 22,523 | |||||||||||
Total cost of revenue | 47,490 | 50,203 | 137,172 | 141,223 | |||||||||||
Gross profit | 41,344 | 33,764 | 118,452 | 98,541 | |||||||||||
Operating expense | |||||||||||||||
Research and development | 3,518 | 4,489 | 15,712 | 14,126 | |||||||||||
Sales and marketing | 26,361 | 26,091 | 78,914 | 81,438 | |||||||||||
General and administrative | 19,257 | 17,011 | 54,956 | 50,487 | |||||||||||
Impairment charges | — | 32,894 | — | 32,894 | |||||||||||
Total operating expense | 49,136 | 80,485 | 149,582 | 178,945 | |||||||||||
Loss from operations | (7,792 | ) | (46,721 | ) | (31,130 | ) | (80,404 | ) | |||||||
Other income (expense) | |||||||||||||||
Interest income, net | 1,041 | 1,801 | 3,777 | 4,972 | |||||||||||
Other income (expense) | 687 | (398 | ) | 964 | 176 | ||||||||||
Total other income, net | 1,728 | 1,403 | 4,741 | 5,148 | |||||||||||
Loss before provision (benefit) for income taxes | (6,064 | ) | (45,318 | ) | (26,389 | ) | (75,256 | ) | |||||||
Provision (benefit) for income taxes | (101 | ) | 401 | (258 | ) | 638 | |||||||||
Net loss | (5,963 | ) | (45,719 | ) | (26,131 | ) | (75,894 | ) | |||||||
Other comprehensive income (loss), net of tax | |||||||||||||||
Change in foreign currency translation adjustment | 1,654 | (752 | ) | 333 | (575 | ) | |||||||||
Change in net unrealized gains on foreign currency hedging | — | 33 | — | 40 | |||||||||||
Less: reclassification adjustment for net losses included in net loss | — | 13 | — | 13 | |||||||||||
Total net change in unrealized gains on foreign currency hedging | — | 46 | — | 53 | |||||||||||
Change in net unrealized gains on marketable securities | 203 | 49 | 161 | 182 | |||||||||||
Total other comprehensive income (loss), net of tax | 1,857 | (657 | ) | 494 | (340 | ) | |||||||||
Comprehensive loss | $ | (4,106 | ) | $ | (46,376 | ) | $ | (25,637 | ) | $ | (76,234 | ) | |||
Basic net loss per share attributable to common stockholders (1) | $ | (0.25 | ) | $ | (1.97 | ) | $ | (1.11 | ) | $ | (3.28 | ) | |||
Diluted net loss per share attributable to common stockholders (1) (2) | $ | (0.25 | ) | $ | (1.97 | ) | $ | (1.11 | ) | $ | (3.28 | ) | |||
Weighted average number of shares used in calculating net loss per share attributable to common stockholders: | |||||||||||||||
Basic common shares | 23,751,168 | 23,231,217 | 23,589,836 | 23,129,795 | |||||||||||
Diluted common shares | 23,751,168 | 23,231,217 | 23,589,836 | 23,129,795 | |||||||||||
(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 nine months ended September 30, 2024 and September 30, 2023, diluted loss per share is the same as basic. |
Consolidated Balance Sheets (unaudited) (amounts in thousands, except share and per share amounts) | |||||||
September 30, 2024 | December 31, 2023 | ||||||
Assets | |||||||
Current assets | |||||||
Cash and cash equivalents | $ | 105,690 | $ | 125,492 | |||
Marketable securities | 14,973 | 2,979 | |||||
Restricted cash | 3,591 | — | |||||
Accounts receivable, net | 34,233 | 42,241 | |||||
Inventories, net | 23,320 | 21,840 | |||||
Income tax receivable | 964 | 669 | |||||
Prepaid expenses and other current assets | 9,783 | 13,846 | |||||
Total current assets | 192,554 | 207,067 | |||||
Property and equipment, net | 46,598 | 50,316 | |||||
Goodwill | 10,170 | 10,057 | |||||
Intangible assets, net | 33,762 | 34,591 | |||||
Operating lease right-of-use asset | 19,017 | 20,338 | |||||
Other assets | 4,071 | 3,825 | |||||
Total assets | $ | 306,172 | $ | 326,194 | |||
Liabilities and stockholders' equity | |||||||
Current liabilities | |||||||
Accounts payable and accrued expenses | $ | 27,028 | $ | 30,142 | |||
Accrued payroll | 14,285 | 11,066 | |||||
Warranty reserve - current | 9,492 | 9,628 | |||||
Operating lease liability - current | 2,777 | 3,653 | |||||
Earnout liability | 11,830 | 10,000 | |||||
Deferred revenue - current | 6,984 | 7,980 | |||||
Income tax payable | — | 27 | |||||
Total current liabilities | 72,396 | 72,496 | |||||
Long-term liabilities | |||||||
Warranty reserve - noncurrent | 16,183 | 13,850 | |||||
Operating lease liability - noncurrent | 17,370 | 18,270 | |||||
Deferred revenue - noncurrent | 6,435 | 8,227 | |||||
Deferred tax liability | 8,384 | 8,539 | |||||
Total liabilities | 120,768 | 121,382 | |||||
Stockholders' equity | |||||||
Common stock | 24 | 23 | |||||
Additional paid-in capital | 326,741 | 320,513 | |||||
Accumulated deficit | (143,080 | ) | (116,949 | ) | |||
Accumulated other comprehensive income | 1,719 | 1,225 | |||||
Total stockholders' equity | 185,404 | 204,812 | |||||
Total liabilities and stockholders' equity | $ | 306,172 | $ | 326,194 | |||
Condensed Consolidated Cash Flow (unaudited) (amounts in thousands) | |||||||
Nine months ended September 30, | |||||||
2024 | 2023 | ||||||
Cash flows from operating activities | |||||||
Net loss | $ | (26,131 | ) | $ | (75,894 | ) | |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | |||||||
Depreciation and amortization | 15,924 | 13,008 | |||||
Loss on rental units and other assets | 3,075 | 3,377 | |||||
Gain on sale of former rental assets | (164 | ) | (58 | ) | |||
Provision for sales revenue returns and doubtful accounts | 9,397 | 7,075 | |||||
Provision for inventory losses | (243 | ) | 2,343 | ||||
Loss on purchase commitments | (334 | ) | — | ||||
Stock-based compensation expense | 5,704 | 8,484 | |||||
Deferred income taxes | (244 | ) | — | ||||
Change in fair value of earnout liability | 1,830 | — | |||||
Impairment charges | — | 32,894 | |||||
Changes in operating assets and liabilities | 118 | 8,685 | |||||
Net cash provided by (used in) operating activities | 8,932 | (86 | ) | ||||
Cash flows from investing activities | |||||||
Purchases of available-for-sale securities | (32,333 | ) | (23,750 | ) | |||
Maturities of available-for-sale securities | 20,500 | 10,500 | |||||
Investment in intangible assets | (2,090 | ) | (494 | ) | |||
Investment in property and equipment | (3,031 | ) | (3,824 | ) | |||
Production and purchase of rental equipment | (8,833 | ) | (16,391 | ) | |||
Proceeds from sale of former assets | 272 | 149 | |||||
Acquisition of business, net of cash acquired | — | (29,633 | ) | ||||
Net cash used in investing activities | (25,515 | ) | (63,443 | ) | |||
Cash flows from financing activities | |||||||
Proceeds from stock options exercised | — | 384 | |||||
Proceeds from employee stock purchases | 811 | 1,094 | |||||
Payment of employment taxes related to release of restricted stock | (286 | ) | (504 | ) | |||
Net cash provided by financing activities | 525 | 974 | |||||
Effect of exchange rates on cash | (153 | ) | 149 | ||||
Net decrease in cash, cash equivalents and restricted cash | $ | (16,211 | ) | $ | (62,406 | ) | |
Supplemental Financial Information (unaudited) (in thousands, except units and patients) | ||||||||||||||||||||
Constant | ||||||||||||||||||||
Three months ended | Currency | |||||||||||||||||||
September 30, | Change 2024 vs. 2023 | Change | ||||||||||||||||||
Revenue by region and category | 2024 | 2023 | $ | % | % | |||||||||||||||
Business-to-business domestic sales | $ | 23,352 | $ | 17,288 | $ | 6,064 | 35.1 | % | 35.1 | % | ||||||||||
Business-to-business international sales | 32,328 | 25,613 | 6,715 | 26.2 | % | 26.9 | % | |||||||||||||
Direct-to-consumer domestic sales | 19,249 | 25,072 | (5,823 | ) | -23.2 | % | -23.2 | % | ||||||||||||
Direct-to-consumer domestic rentals | 13,905 | 15,994 | (2,089 | ) | -13.1 | % | -13.1 | % | ||||||||||||
Total revenue | $ | 88,834 | $ | 83,967 | $ | 4,867 | 5.8 | % | 6.0 | % | ||||||||||
Additional financial measures | ||||||||||||||||||||
Units Sold | 43,900 | 35,400 | ||||||||||||||||||
Net rental patients as of period-end | 51,400 | 51,900 | ||||||||||||||||||
Constant | ||||||||||||||||||||
Nine months ended | Currency | |||||||||||||||||||
September 30, | Change 2024 vs. 2023 | Change | ||||||||||||||||||
Revenue by region and category | 2024 | 2023 | $ | % | % | |||||||||||||||
Business-to-business domestic sales | $ | 61,158 | $ | 48,145 | $ | 13,013 | 27.0 | % | 27.0 | % | ||||||||||
Business-to-business international sales | 88,894 | 67,877 | 21,017 | 31.0 | % | 30.8 | % | |||||||||||||
Direct-to-consumer domestic sales | 62,397 | 76,181 | (13,784 | ) | -18.1 | % | -18.1 | % | ||||||||||||
Direct-to-consumer domestic rentals | 43,175 | 47,561 | (4,386 | ) | -9.2 | % | -9.2 | % | ||||||||||||
Total revenue | $ | 255,624 | $ | 239,764 | $ | 15,860 | 6.6 | % | 6.6 | % | ||||||||||
Additional financial measures | ||||||||||||||||||||
Units Sold | 119,100 | 96,400 | ||||||||||||||||||
Net rental patients as of period-end | 51,400 | 51,900 | ||||||||||||||||||
Reconciliation of U.S. GAAP to Other Non-GAAP Financial Measures (unaudited) (in thousands) | ||||||||||||||||
Three months ended September 30, | Nine months ended September 30, | |||||||||||||||
Non-GAAP EBITDA and Adjusted EBITDA | 2024 | 2023 | 2024 | 2023 | ||||||||||||
Net loss (GAAP) | $ | (5,963 | ) | $ | (45,719 | ) | $ | (26,131 | ) | $ | (75,894 | ) | ||||
Non-GAAP adjustments: | ||||||||||||||||
Interest income, net | (1,041 | ) | (1,801 | ) | (3,777 | ) | (4,972 | ) | ||||||||
Provision (benefit) for income taxes | (101 | ) | 401 | (258 | ) | 638 | ||||||||||
Depreciation and amortization | 5,314 | 4,614 | 15,924 | 13,008 | ||||||||||||
EBITDA (non-GAAP) | (1,791 | ) | (42,505 | ) | (14,242 | ) | (67,220 | ) | ||||||||
Stock-based compensation | 1,474 | 1,779 | 5,704 | 8,484 | ||||||||||||
Acquisition-related expenses | 127 | 960 | 784 | 1,981 | ||||||||||||
Restructuring-related and other charges | — | 1,416 | — | 3,426 | ||||||||||||
Impairment charges | — | 32,894 | — | 32,894 | ||||||||||||
Change in fair value of earnout liability | 650 | — | 1,830 | — | ||||||||||||
Adjusted EBITDA (non-GAAP) | $ | 460 | $ | (5,456 | ) | $ | (5,924 | ) | $ | (20,435 | ) | |||||
Three months ended September 30, | ||||||||||||||||
Net Loss | Diluted EPS | |||||||||||||||
Non-GAAP Adjusted Net Loss and Diluted EPS | 2024 | 2023 | 2024 | 2023 | ||||||||||||
Financial Results (GAAP) | $ | (5,963 | ) | $ | (45,719 | ) | $ | (0.25 | ) | $ | (1.97 | ) | ||||
Non-GAAP adjustments: | ||||||||||||||||
Amortization of intangibles | 1,107 | 205 | ||||||||||||||
Stock-based compensation | 1,474 | 1,779 | ||||||||||||||
Acquisition-related expenses | 127 | 960 | ||||||||||||||
Restructuring-related and other charges (1) | — | 1,416 | ||||||||||||||
Impairment charges | — | 32,894 | ||||||||||||||
Change in fair value of earnout liability | 650 | — | ||||||||||||||
Income tax impact of adjustments (2) | — | — | ||||||||||||||
Adjusted | $ | (2,605 | ) | $ | (8,465 | ) | $ | (0.11 | ) | $ | (0.36 | ) | ||||
Nine months ended September 30, | ||||||||||||||||
Net Loss | Diluted EPS | |||||||||||||||
Non-GAAP Adjusted Net Loss and Diluted EPS | 2024 | 2023 | 2024 | 2023 | ||||||||||||
Financial Results (GAAP) | $ | (26,131 | ) | $ | (75,894 | ) | $ | (1.11 | ) | $ | (3.28 | ) | ||||
Non-GAAP adjustments: | ||||||||||||||||
Amortization of intangibles | 3,227 | 284 | ||||||||||||||
Stock-based compensation | 5,704 | 8,484 | ||||||||||||||
Acquisition-related expenses | 784 | 1,981 | ||||||||||||||
Restructuring-related and other charges (1) | — | 3,426 | ||||||||||||||
Impairment charges | — | 32,894 | ||||||||||||||
Change in fair value of earnout liability | 1,830 | — | ||||||||||||||
Income tax impact of adjustments (2) | — | — | ||||||||||||||
Adjusted | $ | (14,586 | ) | $ | (28,825 | ) | $ | (0.62 | ) | $ | (1.25 | ) | ||||
(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 nine months ended September 30, 2024 and 2023. |
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