Nevro Reports Second-Quarter 2024 Financial Results
Initiates Process Aimed at Accelerating Growth, Diversifying Product Portfolio and Maximizing Stockholder Value
Revises Full-Year 2024 Revenue Guidance to a Range of
Provides Third-Quarter 2024 Guidance
"Our second-quarter 2024 results were primarily driven by ongoing softness in the
"Over the past year, we implemented our strategy that includes tightening our commercial execution which we still need to improve upon, acquired an SI joint company that allowed us to expand into an adjacent market that is earlier in the care continuum, aligned our cost structure more closely with our business and strengthened our balance sheet," said Thornal. "In light of the evolving market dynamics, our Board of Directors and senior management team have begun a process aimed at building on our growth and diversification strategy with the goal of accelerating profitability and maximizing stockholder value. We have retained advisors, and over the next several months, we will move aggressively to explore broader options beyond our current standalone path that may help us accelerate achievement of our goals."
"Importantly, we are in a solid financial position and remain committed to bringing innovative products to our customers that treat patients suffering from chronic pain. Our customer-facing team is one of our largest assets, and they remain dedicated to partnering with our physicians to provide exceptional patient care," added Thornal.
Second-Quarter 2024 Financial Highlights
(As compared with second-quarter 2023)
- Worldwide revenue was approximately
$104.2 million , down 4.3% as reported and 4.2% on a constant currency basis.U.S. revenue was$90.7 million , down 2.4%.- International revenue was
$13.5 million , down 15.0% as reported and 14.5% on a constant currency basis.
-
U.S. trial procedures decreased approximately 9.5% mainly due to competitive pressures and ongoing softness in the coreU.S. SCS market during the quarter. - Net loss from operations was
$19.6 million ; adjusted EBITDA was$3.0 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. -
Nevro presented a biomechanical analysis at theAmerican Society of Pain & Neuroscience 2024 Annual Conference showing that Nevro1™, one of the company's sacroiliac joint (SI) fusion products, provides a significantly better opportunity for robust arthrodesis of the SI joint compared to competing devices as it relates to fixation, invasiveness and fusion surface area.
Second-Quarter 2024 Financial Results
Worldwide revenue for the second quarter of 2024 was
International revenue in the second quarter of 2024 was
Gross profit for the second quarter of 2024 was
Operating expenses for the second quarter of 2024 were
Litigation-related legal expenses were
Net loss from operations for the second quarter of 2024 was
Adjusted EBITDA for the second quarter of 2024 was
Cash, cash equivalents and short-term investments totaled
Full-Year and Third-Quarter 2024 Financial Guidance
Based on its second-quarter 2024 performance and outlook for the remainder of this year,
The company is revising its full-year 2024 adjusted EBITDA guidance to a range of negative
For the third quarter of 2024,
Conference Call and Webcast
The company will also host a conference call today beginning at
The live webcast and replay of the conference call will be available in the Investor Relations section of the company's website at Events & Presentations. The webcast can be accessed 10 minutes prior to the conference call's start time.
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 9453183:
|
1-(888) 596-4144 |
International participant dial-in number: |
1-(646) 968-2525 |
An investor presentation for
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 revised full-year 2024 financial guidance and our third quarter 2024 financial guidance; our belief that the actions we have taken and intend to take will further position us for growth, success, profitability and value creation; our belief that evaluating and/or engaging in strategic opportunities will help us diversify and grow our business, which we believe may position us to accelerate our goals of profitability and maximizing shareholder value; and our beliefs with regards to the SCS market and factors impacting our results, including the duration in which those factors will continue to impact our results. 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; our ability to successfully evaluate and execute on potential strategic opportunities; 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
Condensed Consolidated Statements (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 |
|
$ |
104,161 |
|
|
$ |
108,809 |
|
Cost of revenue |
|
|
36,694 |
|
|
|
34,366 |
|
Gross profit |
|
|
67,467 |
|
|
|
74,443 |
|
Operating expenses: |
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|
|
|
|
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Research and development |
|
|
14,117 |
|
|
|
13,320 |
|
Sales, general and administrative |
|
|
76,774 |
|
|
|
86,762 |
|
Amortization of intangibles |
|
|
737 |
|
|
|
— |
|
Change in fair value of contingent consideration |
|
|
960 |
|
|
|
— |
|
Total operating expenses |
|
|
92,588 |
|
|
|
100,082 |
|
Loss from operations |
|
|
(25,121) |
|
|
|
(25,639) |
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Other income (expense): |
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|
|
|
|
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Interest income (expense), net |
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|
(3,424) |
|
|
|
1,730 |
|
Change in fair market value of warrants |
|
|
9,504 |
|
|
|
— |
|
Other income (expense), net |
|
|
(272) |
|
|
|
(338) |
|
Loss before income taxes |
|
|
(19,313) |
|
|
|
(24,247) |
|
Provision for income taxes |
|
|
262 |
|
|
|
477 |
|
Net loss |
|
|
(19,575) |
|
|
|
(24,724) |
|
Changes in foreign currency translation adjustment |
|
|
43 |
|
|
|
336 |
|
Changes in unrealized gains (losses) on short-term investments |
|
|
(150) |
|
|
|
(192) |
|
Net change in other comprehensive income (loss) |
|
|
(107) |
|
|
|
144 |
|
Comprehensive loss |
|
$ |
(19,682) |
|
|
$ |
(24,580) |
|
Net loss per share, basic and diluted |
|
$ |
(0.53) |
|
|
$ |
(0.69) |
|
Weighted average shares used to compute |
|
|
36,936,867 |
|
|
|
35,921,539 |
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Condensed Consolidated Balance Sheets (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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|
|
|
|
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Cash and cash equivalents |
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$ |
74,702 |
|
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$ |
104,217 |
|
Short-term investments |
|
|
198,991 |
|
|
|
218,506 |
|
Accounts receivable, net |
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|
74,273 |
|
|
|
79,377 |
|
Inventories, net |
|
|
126,096 |
|
|
|
118,676 |
|
Prepaid expenses and other current assets |
|
|
12,125 |
|
|
|
10,145 |
|
Total current assets |
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|
486,187 |
|
|
|
530,921 |
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Property and equipment, net |
|
|
24,559 |
|
|
|
24,568 |
|
Operating lease assets |
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|
22,401 |
|
|
|
8,944 |
|
|
|
|
38,209 |
|
|
|
38,164 |
|
Other intangible assets, net |
|
|
25,881 |
|
|
|
27,354 |
|
Other assets |
|
|
5,492 |
|
|
|
5,156 |
|
Restricted cash |
|
|
606 |
|
|
|
606 |
|
Total assets |
|
$ |
603,335 |
|
|
$ |
635,713 |
|
Liabilities and stockholders' equity |
|
|
|
|
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Current liabilities |
|
|
|
|
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Accounts payable |
|
$ |
22,938 |
|
|
$ |
22,520 |
|
Accrued liabilities and other |
|
|
38,922 |
|
|
|
45,297 |
|
Short-term debt |
|
|
37,841 |
|
|
|
— |
|
Contingent liabilities, current portion |
|
|
1,864 |
|
|
|
9,836 |
|
Other current liabilities |
|
|
369 |
|
|
|
5,722 |
|
Total current liabilities |
|
|
101,934 |
|
|
|
83,375 |
|
Long-term debt |
|
|
180,558 |
|
|
|
211,471 |
|
Long-term operating lease liabilities |
|
|
23,890 |
|
|
|
4,634 |
|
Contingent liabilities, non-current portion |
|
|
14,856 |
|
|
|
12,257 |
|
Warrant liability |
|
|
5,676 |
|
|
|
28,739 |
|
Other long-term liabilities |
|
|
2,168 |
|
|
|
2,092 |
|
Total liabilities |
|
|
329,082 |
|
|
|
342,568 |
|
Stockholders' equity |
|
|
|
|
|
|
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Common stock, |
|
|
37 |
|
|
|
36 |
|
Additional paid-in capital |
|
|
1,019,741 |
|
|
|
992,762 |
|
Accumulated other comprehensive income (loss) |
|
|
(1,131) |
|
|
|
(243) |
|
Accumulated deficit |
|
|
(744,394) |
|
|
|
(699,410) |
|
Total stockholders' equity |
|
|
274,253 |
|
|
|
293,145 |
|
Total liabilities and stockholders' equity |
|
$ |
603,335 |
|
|
$ |
635,713 |
|
|
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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) |
|
$ |
(19,575) |
|
|
$ |
(24,724) |
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Non-GAAP Adjustments: |
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Interest (income) expense, net |
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|
3,424 |
|
|
|
(1,730) |
|
Provision for income taxes |
|
|
262 |
|
|
|
477 |
|
Depreciation and amortization |
|
|
2,014 |
|
|
|
1,711 |
|
Stock-based compensation expense and other equity related charges |
|
|
13,332 |
|
|
|
16,166 |
|
Amortization of intangibles |
|
|
737 |
|
|
|
— |
|
Change in fair value of contingent consideration |
|
|
960 |
|
|
|
— |
|
Change in fair market value of warrants |
|
|
(9,504) |
|
|
|
— |
|
Litigation-related expenses |
|
|
834 |
|
|
|
4,934 |
|
Restructuring charges |
|
|
4,555 |
|
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|
41 |
|
Supplier renegotiation charge |
|
|
6,000 |
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|
|
— |
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Adjusted EBITDA |
|
$ |
3,039 |
|
|
$ |
(3,125) |
|
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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GAAP Net Loss |
|
$ |
(32,900) |
|
|
$ |
(31,600) |
|
|
$ |
(110,400) |
|
|
$ |
(107,100) |
|
Non-GAAP Adjustments |
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|
22,900 |
|
|
|
22,600 |
|
|
|
90,400 |
|
|
|
89,100 |
|
Adjusted EBITDA |
|
$ |
(10,000) |
|
|
$ |
(9,000) |
|
|
$ |
(20,000) |
|
|
$ |
(18,000) |
|
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.
- Supplier contract renegotiation charge – The company excluded one-time costs associated with the renegotiation of a supplier contract.
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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