Inogen Announces Fourth Quarter 2020 Financial Results
Inogen, a medical technology company, reported Q4 2020 revenue of $74 million, down 6.3% year-over-year, primarily impacted by COVID-19. Domestic B2B sales rose 17.9% to $24.2 million, while rental revenue surged 71.7% to $9.4 million. The company incurred a net loss of $5.1 million and had cash reserves of $231.2 million with no debt. For 2021, Inogen refrained from providing financial guidance due to market uncertainties but anticipates improvements in domestic sales and rental revenue despite expected declines in international and direct-to-consumer sales.
- Domestic B2B sales increased 17.9% to $24.2 million.
- Rental revenue grew 71.7% to $9.4 million.
- Cash reserves of $231.2 million with no debt.
- Increased patients on service by 27.3%.
- Total revenue decreased 14.8% for the full year 2020.
- International B2B sales decreased 20.4% in Q4 2020.
- Direct-to-consumer sales dropped 25.2% in Q4 2020.
- Unable to provide financial guidance for 2021.
Inogen, Inc. (NASDAQ: INGN), a medical technology company offering innovative respiratory products for use in the homecare setting, today reported financial results for the three- and twelve-month periods ended December 31, 2020.
Fourth Quarter 2020 Highlights
-
Total revenue of
$74.0 million , down6.3% from the same period in 2019, primarily due to the impacts of the COVID-19 pandemic -
Domestic business-to-business sales of
$24.2 million , up17.9% from the same period 2019 -
Rental revenue of
$9.4 million , up71.7% from the same period in 2019 -
Net loss of
$5.1 million and Adjusted EBITDA of$3.0 million (see accompanying table for reconciliation of GAAP and non-GAAP measures) -
Cash, cash equivalents, and marketable securities were
$231.2 million with no debt outstanding as of December 31, 2020
Full Year 2020 Highlights
-
Total revenue of
$308.5 million , down14.8% versus 2019, primarily due to the impacts of the COVID-19 pandemic -
Increased focus on rentals leading to a
32.3% increase in rental revenue, primarily due to a27.3% increase in patients on service and an improved rental gross margin of52.1% in 2020 compared to34.1% in 2019 -
$22.1 million increase in cash, cash equivalents, and marketable securities as of December 31, 2020 compared to December 31, 2019
“While the COVID-19 pandemic continued to have a significant effect on our business in the fourth quarter of 2020, primarily in the direct-to-consumer and international business-to-business sales channels, we are pleased with the rebound in performance that we saw in our domestic business-to-business channel which exhibited double-digit growth in the fourth quarter of 2020 over the comparable period of the prior year,” said Inogen’s newly appointed President and Chief Executive Officer, Nabil Shabshab. “Additionally, our recent focus on the rental channel produced strong operating performance with rental revenue growing significantly in the fourth quarter of 2020 versus the comparable period in the prior year.”
Fourth Quarter 2020 Financial Results
Total revenue for the three months ended December 31, 2020 declined
Domestic business-to-business sales in the fourth quarter of 2020 increased
International business-to-business sales in the fourth quarter of 2020 decreased by
Direct-to-consumer sales decreased
Rental revenue in the fourth quarter of 2020 increased to
Total gross margin was
Total operating expense increased to
The Company reported an operating loss for the three months ended December 31, 2020 of
In the fourth quarter of 2020, the Company reported a net loss of
As of December 31, 2020, the Company had cash, cash equivalents, and marketable securities were
Financial Outlook for 2021
Because of the unprecedented market uncertainties, the Company is unable to provide guidance for the full year 2021. Given the uncertain scope and duration of the COVID-19 pandemic, the Company is unable to estimate the impact on its financial results, including revenue, net income or loss, and Adjusted EBITDA estimates for such period.
As the Company saw in the fourth quarter of 2020, demand has increased so far in the first quarter of 2021 from the Company’s domestic HME partners in part, due to increased demand for POCs as hospital systems and stationary oxygen concentrator supply have been strained to keep up with the rapid increase in COVID-19 cases. While the Company does not know how long this increased need for POCs will continue, the Company expects its domestic business-to-business sales to increase in the first quarter of 2021 versus the comparative period in the prior year. In addition, the Company expects its rental revenue to grow in the first quarter of 2021 compared to the same period in the prior year due to increased patients on service, higher billable patients as a percent of total patients on service, and higher average reimbursement rates. However, the Company also expects its international business-to-business and direct-to-consumer sales channels in the first quarter of 2021 to decrease compared to the same period in the prior year as a result of the continued COVID-19 impact on these channels.
While the Company expects the COVID-19 pandemic and any potential for further, prolonged lockdowns would have a negative impact on its sales revenue, the Company believes it is prudent to make investments to support its strategy to focus on rentals at the onset-of-care. As part of this strategic initiative, the Company plans to invest to expand its physician sales force and to build the infrastructure to enable it to offer physicians the necessary solutions to better serve their patients’ needs. Furthermore, the Company plans to continue to make investments to broaden its portfolio with innovative products and to support its products with expanded clinical evidence. Given such investment initiatives, the Company expects increased operating expense for the year in 2021. In addition, the Company incurred minimal expenses related to bonus and performance-based stock compensation in 2020, and it expects such costs to increase in 2021 along with certain expenses related to the recent CEO transition.
Conference Call
Individuals interested in listening to the conference call today at 1:30pm PT/4:30pm ET may do so by dialing (877) 841-3961 for domestic callers or (201) 689-8589 for international callers. To listen to a live webcast, please visit the Investor Relations section of Inogen's website at: http://investor.inogen.com/.
A replay of the call will be available beginning February 24, 2021 at 3:30pm PT/6:30pm ET through March 10, 2021. To access the replay, dial (877) 660-6853 or (201) 612-7415 and reference Access Code: 13714750. The webcast will also be available on Inogen's website for one year following the completion of the call.
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. For more information, visit http://investor.inogen.com/.
About Inogen
We are a medical technology company offering innovative respiratory products for use in the homecare setting. We primarily develop, manufacture and market innovative portable oxygen concentrators used to deliver supplemental long-term oxygen therapy to patients suffering from chronic respiratory conditions.
For more information, please visit www.inogen.com.
Cautionary Note Concerning 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 regarding the Company’s expectations related to revenue and operating expenses in 2021, the anticipated impact of the COVID-19 pandemic on the Company’s business, including the impact on supply and demand for the Company’s products in its various business channels, the Company’s operating and sales strategy in respect to the COVID-19 pandemic, expectations regarding international sales and tender activity, expectations regarding changes to reimbursement rates, expectations related to the Company’s physician sales force, expectations for the first quarter of 2021 in the Company’s revenue channels, expectations regarding the Company’s stock-based compensation expenses and other compensation expenses, and expectations related to the Company’s rental strategy and growth prospects. 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 arising from the possibility that Inogen will not realize anticipated revenue; the risks related to the COVID-19 pandemic; the impact of changes in reimbursement rates and reimbursement and regulatory policies; the possible loss of key employees, customers, or suppliers; risks relating to Inogen’s acquisition of New Aera, Inc. and the integration of New Aera’s business and operations within those of Inogen; risks relating to reimbursement coding of the Tidal Assist© Ventilator (TAV); the possibility that Inogen will not realize anticipated revenue from the technology acquired from New Aera or that expenses and costs will exceed Inogen’s expectations; intellectual property risks if Inogen is unable to secure and maintain patent or other intellectual property protection for the intellectual property used in its products; and intellectual property risks relating to the acquisition of New Aera, including the risk of intellectual property litigation. 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; and risks associated with international operations. Information on these and additional risks, uncertainties, and other information affecting Inogen’s business operating results are contained in its Quarterly Report on Form 10-Q for the period ended September 30, 2020, and in its other filings with the Securities and Exchange Commission. Additional information will also be set forth in Inogen’s Annual Report on Form 10-K for the year ended December 31, 2020, to be filed 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.
Use of 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 twelve months ended December 31, 2020 and 2019. 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. For future periods, Inogen is unable to provide a reconciliation of non-GAAP measures without unreasonable effort as a result of the uncertainty regarding, and the potential variability of, the amounts of interest income, interest expense, depreciation and amortization, stock-based compensation, provision for income taxes, and certain other infrequently occurring items, such as acquisition-related costs, that may be incurred in the future.
– Financial Tables Follow –
Consolidated Balance Sheets |
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(amounts in thousands) |
||||||||
|
|
|
|
|
|
|
||
|
|
December 31, |
|
December 31, |
||||
|
|
2020 |
|
2019 |
||||
Assets |
|
|
|
|
|
|
||
Current assets |
|
|
|
|
|
|
||
Cash and cash equivalents |
|
$ |
211,962 |
|
$ |
198,037 |
|
|
Marketable securities |
|
|
19,257 |
|
|
|
11,057 |
|
Accounts receivable, net |
|
|
29,717 |
|
|
|
34,325 |
|
Inventories, net |
|
|
24,815 |
|
|
|
35,664 |
|
Income tax receivable |
|
|
2,048 |
|
|
|
2,976 |
|
Prepaid expenses and other current assets |
|
|
17,898 |
|
|
|
10,160 |
|
Total current assets |
|
|
305,697 |
|
|
|
292,219 |
|
Property and equipment, net |
|
|
28,230 |
|
|
|
19,438 |
|
Goodwill |
|
|
33,165 |
|
|
|
32,954 |
|
Intangible assets, net |
|
|
68,797 |
|
|
|
77,533 |
|
Operating lease right-of-use asset |
|
|
8,827 |
|
|
|
5,855 |
|
Deferred tax asset - noncurrent |
|
|
14,467 |
|
|
|
14,452 |
|
Other assets |
|
|
2,669 |
|
|
|
4,888 |
|
Total assets |
|
$ |
461,852 |
|
|
$ |
447,339 |
|
Liabilities and stockholders' equity |
|
|
|
|
|
|
||
Current liabilities |
|
|
|
|
|
|
||
Accounts payable and accrued expenses |
|
$ |
33,712 |
|
|
$ |
30,730 |
|
Accrued payroll |
|
|
7,091 |
|
|
|
6,215 |
|
Warranty reserve - current |
|
|
5,740 |
|
|
|
4,923 |
|
Operating lease liability - current |
|
|
1,931 |
|
|
|
2,014 |
|
Deferred revenue - current |
|
|
6,994 |
|
|
|
5,478 |
|
Income tax payable |
|
|
1,242 |
|
|
|
821 |
|
Total current liabilities |
|
|
56,710 |
|
|
|
50,181 |
|
Warranty reserve - noncurrent |
|
|
8,654 |
|
|
|
7,648 |
|
Operating lease liability - noncurrent |
|
|
8,078 |
|
|
|
4,702 |
|
Earnout liability - noncurrent |
|
|
26,940 |
|
|
|
26,559 |
|
Deferred revenue - noncurrent |
|
|
11,822 |
|
|
|
13,541 |
|
Deferred tax liability - noncurrent |
|
|
25 |
|
|
|
87 |
|
Total liabilities |
|
|
112,229 |
|
|
|
102,718 |
|
Stockholders' equity |
|
|
|
|
|
|
||
Common stock |
|
|
22 |
|
|
|
22 |
|
Additional paid-in capital |
|
|
273,521 |
|
|
|
263,252 |
|
Retained earnings |
|
|
75,605 |
|
|
|
81,434 |
|
Accumulated other comprehensive income (loss) |
|
|
475 |
|
|
|
(87 |
) |
Total stockholders' equity |
|
|
349,623 |
|
|
|
344,621 |
|
Total liabilities and stockholders' equity |
|
$ |
461,852 |
|
|
$ |
447,339 |
|
Consolidated Statements of Comprehensive Income (Loss) |
||||||||||||||||
(unaudited) |
||||||||||||||||
(amounts in thousands, except share and per share amounts) |
||||||||||||||||
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|
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|
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|
|
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|
|
|
||||
|
|
Three months ended |
|
Twelve months ended |
||||||||||||
|
|
December 31, |
|
December 31, |
||||||||||||
|
|
2020 |
|
2019 |
|
2020 |
|
2019 |
||||||||
Revenue |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Sales revenue |
|
$ |
64,628 |
|
|
$ |
73,473 |
|
|
$ |
280,189 |
|
|
$ |
340,546 |
|
Rental revenue |
|
|
9,350 |
|
|
|
5,444 |
|
|
|
28,298 |
|
|
|
21,397 |
|
Total revenue |
|
|
73,978 |
|
|
|
78,917 |
|
|
|
308,487 |
|
|
|
361,943 |
|
Cost of revenue |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cost of sales revenue |
|
|
35,850 |
|
|
|
41,908 |
|
|
|
156,764 |
|
|
|
175,974 |
|
Cost of rental revenue, including depreciation of |
|
|
4,069 |
|
|
|
3,087 |
|
|
|
13,543 |
|
|
|
14,108 |
|
Total cost of revenue |
|
|
39,919 |
|
|
|
44,995 |
|
|
|
170,307 |
|
|
|
190,082 |
|
Gross profit |
|
|
34,059 |
|
|
|
33,922 |
|
|
|
138,180 |
|
|
|
171,861 |
|
Operating expense |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Research and development |
|
|
3,674 |
|
|
|
3,628 |
|
|
|
14,080 |
|
|
|
9,401 |
|
Sales and marketing |
|
|
25,389 |
|
|
|
25,544 |
|
|
|
97,520 |
|
|
|
105,550 |
|
General and administrative |
|
|
10,518 |
|
|
|
10,071 |
|
|
|
38,605 |
|
|
|
37,121 |
|
Total operating expense |
|
|
39,581 |
|
|
|
39,243 |
|
|
|
150,205 |
|
|
|
152,072 |
|
Income (loss) from operations |
|
|
(5,522 |
) |
|
|
(5,321 |
) |
|
|
(12,025 |
) |
|
|
19,789 |
|
Other income (expense) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Interest income |
|
|
67 |
|
|
|
835 |
|
|
|
909 |
|
|
|
4,712 |
|
Other income (expense) |
|
|
250 |
|
|
|
249 |
|
|
|
5,836 |
|
|
|
(229 |
) |
Total other income, net |
|
|
317 |
|
|
|
1,084 |
|
|
|
6,745 |
|
|
|
4,483 |
|
Income (loss) before provision (benefit) for income taxes |
|
|
(5,205 |
) |
|
|
(4,237 |
) |
|
|
(5,280 |
) |
|
|
24,272 |
|
Provision (benefit) for income taxes |
|
|
(84 |
) |
|
|
(2,862 |
) |
|
|
549 |
|
|
|
3,322 |
|
Net income (loss) |
|
$ |
(5,121 |
) |
|
$ |
(1,375 |
) |
|
$ |
(5,829 |
) |
|
$ |
20,950 |
|
Other comprehensive income (loss), net of tax |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Change in foreign currency translation adjustment |
|
|
452 |
|
|
|
217 |
|
|
|
857 |
|
|
|
(123 |
) |
Change in net unrealized gains (losses) on foreign currency hedging |
|
|
(244 |
) |
|
|
(612 |
) |
|
|
(82 |
) |
|
|
(1,566 |
) |
Less: reclassification adjustment for net (gains) losses included in net income |
|
|
(140 |
) |
|
|
76 |
|
|
|
(207 |
) |
|
|
872 |
|
Total net change in unrealized gains (losses) on foreign currency hedging |
|
|
(384 |
) |
|
|
(536 |
) |
|
|
(289 |
) |
|
|
(694 |
) |
Change in net unrealized gains (losses) on marketable securities |
|
|
— |
|
|
|
(12 |
) |
|
|
(6 |
) |
|
|
6 |
|
Total other comprehensive income (loss), net of tax |
|
|
68 |
|
|
|
(331 |
) |
|
|
562 |
|
|
|
(811 |
) |
Comprehensive income (loss) |
|
$ |
(5,053 |
) |
|
$ |
(1,706 |
) |
|
$ |
(5,267 |
) |
|
$ |
20,139 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic net income (loss) per share attributable to common stockholders (1) |
|
$ |
(0.23 |
) |
|
$ |
(0.06 |
) |
|
$ |
(0.27 |
) |
|
$ |
0.96 |
|
Diluted net income (loss) per share attributable to common stockholders (1)(2) |
|
$ |
(0.23 |
) |
|
$ |
(0.06 |
) |
|
$ |
(0.27 |
) |
|
$ |
0.94 |
|
Weighted-average number of shares used in calculating net income (loss) per share attributable to common stockholders: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic common shares |
|
|
22,042,288 |
|
|
|
21,878,004 |
|
|
|
21,980,326 |
|
|
|
21,821,104 |
|
Diluted common shares |
|
|
22,042,288 |
|
|
|
21,878,004 |
|
|
|
21,980,326 |
|
|
|
22,241,064 |
|
(1) |
Reconciliations of net income attributable to common stockholders basic and diluted can be found in Inogen’s Annual Report on Form 10-K to be filed with the Securities and Exchange Commission. |
|
(2) |
Due to a net loss for the three and twelve months ended December 31, 2020, and for the three months ended December 31, 2019, diluted loss per share is the same as basic. |
Supplemental Financial Information |
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(unaudited) |
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(in thousands, except units and patients) |
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|
||||
|
|
Three months ended |
|
Twelve months ended |
||||||||||||
|
|
December 31, |
|
December 31, |
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|
|
2020 |
|
2019 |
|
2020 |
|
2019 |
||||||||
Revenue by region and category |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Business-to-business domestic sales |
|
$ |
24,249 |
|
$ |
20,571 |
|
$ |
96,423 |
|
$ |
106,428 |
||||
Business-to-business international sales |
|
|
13,609 |
|
|
|
17,101 |
|
|
|
62,147 |
|
|
|
77,960 |
|
Direct-to-consumer domestic sales |
|
|
26,770 |
|
|
|
35,801 |
|
|
|
121,619 |
|
|
|
156,158 |
|
Direct-to-consumer domestic rentals |
|
|
9,350 |
|
|
|
5,444 |
|
|
|
28,298 |
|
|
|
21,397 |
|
Total revenue |
|
$ |
73,978 |
|
|
$ |
78,917 |
|
|
$ |
308,487 |
|
|
$ |
361,943 |
|
Additional financial measures |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Units sold |
|
|
40,800 |
|
|
|
42,600 |
|
|
|
178,900 |
|
|
|
201,100 |
|
Net rental patients as of period-end |
|
|
32,200 |
|
|
|
25,300 |
|
|
|
32,200 |
|
|
|
25,300 |
|
Reconciliation of U.S. GAAP to Other Non-GAAP Financial Measures |
||||||||||||||||
(unaudited) |
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(in thousands) |
||||||||||||||||
|
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|
|
|
|
|
|
|
|
|
|
|
||||
|
|
Three months ended |
|
Twelve months ended |
||||||||||||
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|
December 31, |
|
December 31, |
||||||||||||
Non-GAAP EBITDA and Adjusted EBITDA |
|
2020 |
|
2019 |
|
2020 |
|
2019 |
||||||||
Net income (loss) |
|
$ |
(5,121 |
) |
|
$ |
(1,375 |
) |
|
$ |
(5,829 |
) |
|
$ |
20,950 |
|
Non-GAAP adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Interest income |
|
|
(67 |
) |
|
|
(835 |
) |
|
|
(909 |
) |
|
|
(4,712 |
) |
Provision (benefit) for income taxes |
|
|
(84 |
) |
|
|
(2,862 |
) |
|
|
549 |
|
|
|
3,322 |
|
Depreciation and amortization |
|
|
4,927 |
|
|
|
4,618 |
|
|
|
18,581 |
|
|
|
13,834 |
|
EBITDA (non-GAAP) |
|
|
(345 |
) |
|
|
(454 |
) |
|
|
12,392 |
|
|
|
33,394 |
|
Stock-based compensation |
|
|
2,092 |
|
|
|
2,199 |
|
|
|
8,203 |
|
|
|
9,129 |
|
Change in fair value of earnout liability |
|
|
1,219 |
|
|
|
810 |
|
|
|
1,053 |
|
|
|
810 |
|
Adjusted EBITDA (non-GAAP) |
|
$ |
2,966 |
|
|
$ |
2,555 |
|
|
$ |
21,648 |
|
|
$ |
43,333 |
|
|
|
Three months ended |
|
Twelve months ended |
||||||||||||
|
|
December 31, 2020 |
|
December 31, 2019 |
|
December 31, 2020 |
|
December 31, 2019 |
||||||||
Non-GAAP international constant currency revenue |
|
(using 2019 FX rates) |
|
(using 2018 FX rates) |
|
(using 2019 FX rates) |
|
(using 2018 FX rates) |
||||||||
International revenues (GAAP) |
|
$ |
13,609 |
|
|
$ |
17,101 |
|
|
$ |
62,147 |
|
|
$ |
77,960 |
|
Foreign exchange impact |
|
|
(586 |
) |
|
|
475 |
|
|
|
(228 |
) |
|
|
3,142 |
|
International constant currency revenues (non-GAAP) |
|
$ |
13,023 |
|
|
$ |
17,576 |
|
|
$ |
61,919 |
|
|
$ |
81,102 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
International revenue growth (GAAP) |
|
|
-20.4 |
% |
|
|
-7.7 |
% |
|
|
-20.3 |
% |
|
|
0.8 |
% |
International constant currency revenue growth (non-GAAP) |
|
|
-23.8 |
% |
|
|
-5.1 |
% |
|
|
-20.6 |
% |
|
|
4.9 |
% |
View source version on businesswire.com: https://www.businesswire.com/news/home/20210224005911/en/
FAQ
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