Nevro Reports First-Quarter 2024 Financial Results
Announces Additional Restructuring Steps to Advance Strategy and Accelerate Profitability
Raises Adjusted EBITDA Guidance and Reaffirms Revenue Guidance for Full-Year 2024
Promotes Christofer Christoforou to Chief Operating Officer
"We are pleased with our first quarter performance which demonstrates our continued focus on executing our three-pillar strategy of commercial execution, market penetration and profit progress. Worldwide revenue and adjusted EBITDA both came in ahead of our expectations," said
Thornal continued, "Based on our first quarter performance, the additional restructuring steps we are taking to make
"Also, I'm thrilled that Chris is stepping into the Chief Operating Officer role. He has been with
First-Quarter 2024 Financial Highlights and Recent Business Developments
- For the first quarter of 2024 (as compared with the first quarter of 2023):
- Worldwide revenue grew to
$101.9 million , an increase of 5.8% as reported and 5.6% on a constant currency basis. U.S. trial procedures decreased approximately 5.1%, largely in line with the company's expectations.- Reported a first quarter 2024 net loss from operations of
$35.8 million ; first quarter 2024 adjusted EBITDA was a loss of$9.6 million . Refer to the financial table at the end of this release for GAAP to non-GAAP reconciliations, definitions and further information regarding the use of non-GAAP metrics.
- Worldwide revenue grew to
-
Nevro also announced thatChristofer Christoforou has been promoted to the role of COO effective immediately. Christoforou joined the company in 2016 and most recently served as Senior Vice President, Technical Operations. In addition to his current responsibilities, which include leading the company's manufacturing processes and innovation, research and development efforts, Christoforou will have oversight of clinical and regulatory affairs and quality assurance. For Christoforou's complete biography, please visit the Leadership Team section onNevro's corporate website. - As previously announced on
February 28, 2024 ,Nevro received FDA 510(k) clearance to use its sacroiliac (SI) joint fusion system, Nevro1™, without the need for a fixation screw and featuring integrated lateral transfixation. - 24-month data from SENZA-PDN randomized controlled trial (RCT) for improved sensory function and protective sensation in the feet of patients receiving 10 kHz SCS was published in the
Journal of Diabetes Science & Technology , with results demonstrating unique, disease-modifying improvement in sensory function that potentially lowers the risk of diabetes-related ulcerations and traumatic amputations. -
Nevro introduced its new solution for patients who do not have a compatible iPhone that helps increase access to the benefits of HFX iQ 10kHz Therapy™. - Enrollment in
Nevro's PDN Clinical Sensory Study ("PDN Sensory Study") now stands at 143 patients, ahead of the company's expectations. As a result of this robust enrollment combined with strong outcomes demonstrated in its SENZA-PDN RCT, the company is pausing enrollment in the PDN Sensory Study to allow for an interim primary endpoint analysis of all subjects who are randomized from this existing cohort. While the results of the analysis may indicate restarting enrollment in the future,Nevro's goal is to bring trial results to publication as soon as possible for the benefit of patients and review for inclusion in therapeutic guidelines.
First-Quarter 2024 Financial Results
Worldwide revenue for the first quarter of 2024 was
International revenue in the first quarter of 2024 was
Gross profit for the first quarter of 2024 was
Operating expenses for the first quarter of 2024 were
- a net
$3.5 million charge related to the change in fair value of the contingent consideration liability; and -
$0.7 million of expense related to the amortization of intangibles.
Excluding the aforementioned three items, operating expenses in the first quarter of 2024 improved by
Litigation-related legal expenses were
Net loss from operations for the first quarter of 2024 was
Cash, cash equivalents and short-term investments totaled
Full-Year and Second-Quarter 2024 Financial Guidance
Based on its first-quarter 2024 performance and outlook for the remainder of this year,
For the second quarter of 2024, the company expects worldwide revenue to be in the range of approximately
An investor presentation for
Webcast and Conference Call Information
As previously announced,
For those parties that do not have internet access, the conference call can be accessed by calling one of the below telephone numbers and providing conference ID 6973396:
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1-888-596-4144 |
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International participant dial-in number: |
1-646-968-2525 |
Internet Posting of Information
About
Headquartered in
Senza®, Senza II®, Senza Omnia®, and HFX iQ™ are the only SCS systems that deliver
SENZA, SENZA II, SENZA OMNIA, OMNIA, HF10, the HF10 logo, 10 kHz Therapy, HFX, the HFX logo, HFX iQ, the HFX iQ logo, HFX Algorithm, HFX CONNECT, the HFX Connect logo, HFX ACCESS, the HFX Access logo, HFX COACH, the HFX Coach logo, HFX CLOUD, the HFX Cloud logo, RELIEF MULTIPLIED, the X logo,
To learn more about
Forward-Looking Statements
In addition to historical information, this press release contains forward-looking statements reflecting the current beliefs and expectations of the company's management, made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, including: our second quarter and updated full-year 2024 financial guidance; our belief that the actions we have taken further position us for success; and our belief that our focus on our three key strategic pillars will improve our commercial execution and deliver significant long-term shareholder return. These forward-looking statements are based upon information that is currently available to us or our current expectations, speak only as of the date hereof, and are subject to numerous risks and uncertainties, including our ability to successfully commercialize our products; our ability to manufacture our products to meet demand; the level and availability of third-party payor reimbursement for our products; our ability to effectively manage our anticipated growth and the costs and expenses of operating our business; our ability to protect our intellectual property rights and proprietary technologies; our ability to operate our business without infringing the intellectual property rights and proprietary technology of third parties; competition in our industry; additional capital and credit availability; our ability to successfully integrate any additive acquisitions we may make, including our acquisition of Vyrsa Technologies; our ability to attract and retain qualified personnel; our ability to accurately forecast financial and operating results; and product liability claims. These factors, together with those that are described in greater detail in our Annual Report on Form 10-K filed on
Investor and Media Contact:
Vice President, Investor Relations & Corporate Communications
angeline.mccabe@nevro.com
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Condensed Consolidated Statements of Operations and Comprehensive Loss |
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(in thousands, except share and per share data) |
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Three Months Ended |
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2024 |
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2023 |
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(unaudited) |
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Revenue |
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$ |
101,899 |
|
|
$ |
96,327 |
|
Cost of revenue |
|
|
30,371 |
|
|
|
31,703 |
|
Gross profit |
|
|
71,528 |
|
|
|
64,624 |
|
Operating expenses: |
|
|
|
|
|
|
|
|
Research and development |
|
|
14,828 |
|
|
|
14,755 |
|
Sales, general and administrative |
|
|
88,326 |
|
|
|
86,192 |
|
Amortization of intangibles |
|
|
737 |
|
|
|
— |
|
Change in fair value of contingent consideration |
|
|
3,471 |
|
|
|
— |
|
Total operating expenses |
|
|
107,362 |
|
|
|
100,947 |
|
Income (loss) from operations |
|
|
(35,834) |
|
|
|
(36,323) |
|
Other income (expense): |
|
|
|
|
|
|
|
|
Interest income (expense), net |
|
|
(2,732) |
|
|
|
1,665 |
|
Change in fair market value of warrants |
|
|
13,560 |
|
|
|
— |
|
Other income (expense), net |
|
|
(21) |
|
|
|
(46) |
|
Income (loss) before income taxes |
|
|
(25,027) |
|
|
|
(34,704) |
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Provision for income taxes |
|
|
382 |
|
|
|
325 |
|
Net income (loss) |
|
|
(25,409) |
|
|
|
(35,029) |
|
Changes in foreign currency translation adjustment |
|
|
(255) |
|
|
|
506 |
|
Changes in unrealized gains (losses) on short-term investments |
|
|
(526) |
|
|
|
587 |
|
Net change in other comprehensive income (loss) |
|
|
(781) |
|
|
|
1,093 |
|
Comprehensive income (loss) |
|
$ |
(26,190) |
|
|
$ |
(33,936) |
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Net loss per share, basic and diluted |
|
$ |
(0.70) |
|
|
$ |
(0.98) |
|
Weighted average shares used to compute net loss per share |
|
|
36,467,371 |
|
|
|
35,584,685 |
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Condensed Consolidated Balance Sheets |
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(in thousands, except share and per share data) |
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2024 |
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2023 |
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(unaudited) |
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Assets |
|
|
|
|
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Current assets |
|
|
|
|
|
|
|
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Cash and cash equivalents |
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$ |
90,303 |
|
|
$ |
104,217 |
|
Short-term investments |
|
|
191,180 |
|
|
|
218,506 |
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Accounts receivable, net |
|
|
76,918 |
|
|
|
79,377 |
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Inventories, net |
|
|
120,789 |
|
|
|
118,676 |
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Prepaid expenses and other current assets |
|
|
13,414 |
|
|
|
10,145 |
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Total current assets |
|
|
492,604 |
|
|
|
530,921 |
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Property and equipment, net |
|
|
24,708 |
|
|
|
24,568 |
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Operating lease assets |
|
|
7,764 |
|
|
|
8,944 |
|
|
|
|
38,324 |
|
|
|
38,164 |
|
Other intangible assets, net |
|
|
26,617 |
|
|
|
27,354 |
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Other assets |
|
|
5,427 |
|
|
|
5,156 |
|
Restricted cash |
|
|
606 |
|
|
|
606 |
|
Total assets |
|
$ |
596,050 |
|
|
$ |
635,713 |
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Liabilities and stockholders' equity |
|
|
|
|
|
|
|
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Current liabilities |
|
|
|
|
|
|
|
|
Accounts payable |
|
$ |
21,208 |
|
|
$ |
22,520 |
|
Contingent liabilities, current portion |
|
|
220 |
|
|
|
9,836 |
|
Accrued liabilities and other |
|
|
45,346 |
|
|
|
51,019 |
|
Total current liabilities |
|
|
66,774 |
|
|
|
83,375 |
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Long-term debt |
|
|
214,763 |
|
|
|
211,471 |
|
Long-term operating lease liabilities |
|
|
3,136 |
|
|
|
4,634 |
|
Contingent liabilities, non-current portion |
|
|
15,564 |
|
|
|
12,257 |
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Warrant liability |
|
|
15,179 |
|
|
|
28,739 |
|
Other long-term liabilities |
|
|
2,093 |
|
|
|
2,092 |
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Total liabilities |
|
|
317,509 |
|
|
|
342,568 |
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Stockholders' equity |
|
|
|
|
|
|
|
|
Common stock,
37,369,746 and 37,044,390 shares issued at
and
shares outstanding at 2023, respectively |
|
|
36 |
|
|
|
36 |
|
Additional paid-in capital |
|
|
1,004,348 |
|
|
|
992,762 |
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Accumulated other comprehensive loss |
|
|
(1,024) |
|
|
|
(243) |
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Accumulated deficit |
|
|
(724,819) |
|
|
|
(699,410) |
|
Total stockholders' equity |
|
|
278,541 |
|
|
|
293,145 |
|
Total liabilities and stockholders' equity |
|
$ |
596,050 |
|
|
$ |
635,713 |
|
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GAAP to Non-GAAP Adjusted EBITDA Reconciliation |
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(unaudited) |
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(in thousands) |
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The following table presents a reconciliation of GAAP net loss, as prepared in accordance with |
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Reconciliation of actual results: |
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Three Months Ended |
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2024 |
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2023 |
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(unaudited) |
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GAAP Net Income (Loss) |
|
$ |
(25,409) |
|
|
$ |
(35,029) |
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Non-GAAP Adjustments: |
|
|
|
|
|
|
|
|
Interest (income) expense, net |
|
|
2,732 |
|
|
|
(1,665) |
|
Provision for income taxes |
|
|
382 |
|
|
|
325 |
|
Depreciation and amortization |
|
|
2,053 |
|
|
|
1,582 |
|
Stock-based compensation expense and other equity related charges |
|
|
11,674 |
|
|
|
13,560 |
|
Amortization of intangibles |
|
|
737 |
|
|
|
— |
|
Change in fair value of contingent consideration |
|
|
3,471 |
|
|
|
— |
|
Change in fair market value of warrants |
|
|
(13,560) |
|
|
|
— |
|
Litigation-related expenses |
|
|
2,801 |
|
|
|
3,754 |
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Restructuring charges |
|
|
5,523 |
|
|
|
332 |
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Adjusted EBITDA |
|
$ |
(9,596) |
|
|
$ |
(17,141) |
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Reconciliation of guidance: |
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Three Months Ended |
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Year Ended |
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(Low Case) |
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(High Case) |
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|
(Low Case) |
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(High Case) |
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|
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|
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|
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GAAP Net Loss |
|
$ |
(28,500) |
|
|
$ |
(27,500) |
|
|
$ |
(94,000) |
|
|
$ |
(87,000) |
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Non-GAAP Adjustments |
|
|
25,000 |
|
|
|
25,000 |
|
|
|
89,000 |
|
|
|
89,000 |
|
Adjusted EBITDA |
|
$ |
(3,500) |
|
|
$ |
(2,500) |
|
|
$ |
(5,000) |
|
|
$ |
2,000 |
|
Management uses certain non-GAAP financial measures, most specifically adjusted EBITDA, as a supplement to GAAP financial measures to further evaluate the company's operating performance period over period, analyze the underlying business trends, assess performance relative to competitors and establish operational objectives.
Management believes it is important to provide investors with the same non-GAAP metrics it uses to evaluate the performance and underlying trends of the company's business operations to facilitate comparisons to its historical operating results and evaluate the effectiveness of its operating strategies. Disclosure of these non-GAAP financial measures also facilitates comparisons of the company's underlying operating performance with other companies in the industry that also supplement their GAAP results with non-GAAP financial measures.
EBITDA is a non-GAAP financial measure, which is calculated by adding interest income and expense, net; provision for income taxes; and depreciation and amortization to net income. In calculating non-GAAP adjusted EBITDA, the company further adjusts for the following items:
- Stock-based compensation expense and other equity-related charges – The company excludes non-cash costs related to the company's stock-based plans, which include stock options, restricted stock units and performance-based restricted stock units as these expenses do not require cash settlement from the company.
- Amortization of intangibles – The company excludes amortization of intangibles from the acquisition of businesses.
- Change in fair value of contingent consideration – The company excludes the changes in the fair value of its contingent consideration liability.
- Change in fair market value of warrants – The company excludes the changes in the fair value of its warrant liability.
- Litigation-related expenses – The company excludes legal and professional fees as well as charges and credits associated with certain legal matters, which management considers not related to the underlying operating performance of the business.
- Restructuring charges – The company excludes charges incurred as a direct result of restructuring programs, such as salaries and other compensation-related expenses.
Full-year guidance excludes the impact of foreign currency fluctuations.
The non-GAAP financial measure should not be considered in isolation from, or as a replacement for, the most directly comparable GAAP financial measures, as it is not prepared in accordance with
Amounts may not add due to rounding.
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