Nevro Reports Second Quarter 2022 Financial Results, Provides Third Quarter 2022 Guidance and Updates Full-Year 2022 Guidance
Nevro Corp. (NVRO) reported Q2 2022 revenue of $104.2 million, marking a 2% increase year-over-year. The company experienced notable 14% growth in U.S. trial procedures. Painful Diabetic Neuropathy (PDN) contributed $11 million in revenue. However, the net loss from operations was $23.8 million, up from $15.8 million a year earlier. Nevro issued Q3 revenue guidance of $97 million to $101 million, and updated full-year guidance to $400 million to $410 million. The company reached a settlement with Boston Scientific, receiving $85 million in cash.
- Q2 2022 revenue increased by 2% year-over-year to $104.2 million.
- U.S. trial procedures grew by 14% compared to prior year.
- PDN contributed approximately $11 million in Q2 revenue.
- Settlement with Boston Scientific resulted in an $85 million cash payment.
- Q2 2022 net loss increased to $23.8 million from $15.8 million year-over-year.
- International revenue decreased by 12% due to COVID-related issues.
- Full-year revenue guidance reduced from $415-$430 million to $400-$410 million.
REDWOOD CITY, Calif., Aug. 3, 2022 /PRNewswire/ -- Nevro Corp. (NYSE: NVRO), delivering comprehensive, life-changing solutions for the treatment of chronic pain, today reported its financial results for the second quarter ended June 30, 2022, provided guidance for the third quarter of 2022 and updated its full-year 2022 guidance.
- Second Quarter 2022 Worldwide Revenue of
$104.2 Million ; Representing2% As Reported and4% Constant Currency Growth Compared to Prior Year and11% As Reported and12% Constant Currency Growth Over Second Quarter of 2019 - Painful Diabetic Neuropathy (PDN) Represented Approximately
$11.0 Million in Revenue in Second Quarter 2022 - Second Quarter 2022 U.S. Trial Procedures Increased
14% Compared to Prior Year and Increased4% Compared to Second Quarter of 2019, while U.S. PDN Trial Procedures Grew to14% of Total U.S. Trials in the Quarter and Grew Sequentially45% over Prior Quarter - Second Quarter 2022 Net Loss from Operations of
$23.8 Million ; Second Quarter 2022 Non-GAAP Adjusted EBITDA Loss of$4.5 Million - Settlement Agreement Reached in Ongoing Intellectual Property Litigations with Boston Scientific
- More Positive Payer Coverage Updates for Treatment of PDN from Several Blue Cross Blue Shield (BCBS) Insurers; Adds Nearly 23 Million Covered PDN Lives, Bringing Total Covered Lives for PDN to Approximately
48% of Addressable U.S. PDN Patients - Clinical Data Presented at American Diabetes Association 82nd Scientific Sessions Reinforce Significant and Durable Benefits of Nevro's HFX 10 kHz Therapy in PDN Patients at 24 Months
- Newly Released Clinical Data Demonstrates Substantial Improvement in Overall Health-Related Quality of Life in Patients with PDN Treated with Nevro HFX 10 kHz Therapy
- Provides Third Quarter 2022 Revenue Guidance of
$97 Million to$101 Million ; Updates Full-Year 2022 Revenue Guidance to$400 Million to$410 Million , Which Now Includes Increased Guidance for the Full-Year PDN Contribution of Approximately$42 Million to$45 Million - Provides Third Quarter 2022 Non-GAAP Adjusted EBITDA Guidance of a Loss of
$6 Million to$9 Million ; Updates Full-Year 2022 Non-GAAP Adjusted EBITDA Guidance to a Loss of$19 Million to$25 Million
Worldwide revenue for the second quarter of 2022 was
U.S. revenue in the second quarter of 2022 was
International revenue in the second quarter of 2022 was
"We were particularly pleased with our growth in the U.S., which was
Mr. Grossman continued, "The recent positive payer coverage updates by several Blue Cross Blue Shield carriers to include PDN patients, which now brings our payer policy coverage to almost
Gross profit for the second quarter of 2022 was
Operating expenses for the second quarter of 2022 were
Net loss from operations for the second quarter of 2022 was
Cash, cash equivalents and short-term investments totaled
As previously announced on August 1, 2022, Nevro and Boston Scientific Corp. reached a settlement agreement in their ongoing intellectual property litigations. Pursuant to the parties' settlement, Nevro will receive a payment from Boston Scientific of
In addition, Nevro granted Boston Scientific a worldwide, non-exclusive, non-transferable license to practice paresthesia-free therapy at frequencies below 1,500 Hz and a covenant not to sue for any features embodied in any current Boston Scientific products for frequencies below 1,500 Hz. Boston Scientific also granted Nevro a worldwide, non-exclusive, non-transferable license under Boston Scientific's asserted patent families and a covenant not to sue for any features embodied in any current Nevro products.
Nevro continues to have exclusivity of frequency ranges between 1.5 kHz and 100 kHz, including its best-in-class 10 kHz Therapy.
During the second quarter, a number of coverage updates among Blue Cross Blue Shield (BCBS) insurers were made to explicitly cover PDN. Combined, these BCBS updates represent nearly 23 million commercially insured covered lives with approximately
- Effective April 28, 2022, BCBS Idaho, the largest commercial payer in Idaho representing approximately 559 thousand covered lives, updated their policy to specifically cover PDN.
- Effective May 27, 2022, BCBS Hawaii (HMSA), the largest commercial payer in Hawaii representing approximately 786 thousand covered lives, updated their policy to specifically cover PDN.
- Effective May 29, 2022, BCBS Alabama, the largest commercial payer in Alabama representing approximately 2.5 million covered lives, updated their policy to specifically cover diabetic neuropathy and peripheral neuropathy.
- Effective July 1, 2022, Premera Blue Cross, the largest health plan in the Pacific Northwest (Washington and Alaska) representing approximately 2.5 million covered lives, updated their policy to specifically cover PDN.
- Effective August 1, 2022, Health Care Services Corporation (HCSC) updated their SCS policy to explicitly cover PDN. HCSC is an independent licensee of Blue Cross Blue Shield and the parent company of BCBS Texas, Illinois, Oklahoma, New Mexico, and Montana, which represents over 16 million covered lives.
Nevro continues to monitor and evaluate the impact the global response to the COVID pandemic has had, and will continue to have, on its operations and financial results. This guidance is highly sensitive to the company's assumptions regarding the pace and sustainability of COVID recovery and its related impacts on patient willingness to seek elective care, healthcare facility restrictions and healthcare facility staffing limitations, all of which are difficult to predict. If these assumptions differ from the actual pace of COVID recovery and its impact on the company's markets, then the company may need to change or withdraw this guidance in the future.
Nevro expects third quarter of 2022 worldwide revenue of approximately
The company expects third quarter of 2022 non-GAAP adjusted EBITDA to be a loss of approximately
Nevro now expects full-year 2022 worldwide revenue of approximately
The company now expects full-year 2022 non-GAAP adjusted EBITDA to be a loss of approximately
An investor presentation for the company's second quarter 2022 financial results is available in the "Investors" section of Nevro's website at www.nevro.com.
As previously announced, Nevro management will host a conference call starting at 1:30 pm PT / 4:30 pm ET today. Investors interested in listening to the call may do so by dialing (888) 330-2443 in the U.S. or +1 (240) 789-2728 internationally, using Conference ID: 3583097. A live webcast, as well as an archived recording, will also be available in the "Investors" section of Nevro's website at: www.nevro.com.
Nevro routinely posts information that may be important to investors in the "Investor Relations" section of its website at www.nevro.com. The company encourages investors and potential investors to consult the Nevro website regularly for important information about Nevro.
Headquartered in Redwood City, California, Nevro is a global medical device company focused on delivering comprehensive, life-changing solutions that continue to set the standard for enduring patient outcomes in chronic pain treatment. The company started with a simple mission to help more patients suffering from debilitating pain and developed its proprietary 10 kHz Therapy, an evidence-based, non-pharmacologic innovation that has impacted the lives of more than 80,000 patients globally.
Nevro's comprehensive HFX™ spinal cord stimulation (SCS) platform includes a Senza SCS system and support services for the treatment of chronic trunk and limb pain and painful diabetic neuropathy. Senza®, Senza II®, and Senza Omnia™ are the only SCS systems that deliver Nevro's proprietary 10 kHz Therapy. Nevro's unique support services provide every patient with an HFX Coach™ throughout their pain relief journey and every physician with HFX Cloud™ insights for enhanced patient and practice management.
Senza, Senza II, Senza Omnia, HFX, HXF Coach, HFX Cloud, HFX Connect, Nevro and the Nevro logo are trademarks of Nevro Corp.
To learn more about Nevro, connect with us on LinkedIn, Twitter, Facebook and Instagram.
In addition to historical information, this press release contains forward-looking statements reflecting the company's current beliefs and expectations of management made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, including: our third quarter and full-year 2022 financial guidance, including our expectations for PDN revenue in 2022; our belief that the recent positive payer coverage updates by several Blue Cross Blue Shield carriers to include PDN patients will significantly increase patient access to our 10 kHz Therapy; our belief that our recent FDA approval for treating NSBP patients further differentiates our high-frequency, paresthesia-free SCS technology and uniquely positions us to deliver relief to the many patients in need of our HFX solution to free them from the burden of chronic pain; our belief that we have laid a very strong foundation for attractive future growth, and the challenges to our market will continue to subside; and our belief that we will receive FDA approval of our Costa Rica facility in the second half of 2022. 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 attract and retain qualified personnel; 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 February 23, 2022, as well as any reports that we may file with the Securities and Exchange Commission in the future, may cause our actual results, performance or achievements to differ materially and adversely from those anticipated or implied by our forward-looking statements. We expressly disclaim any obligation, except as required by law, or undertaking to update or revise any such forward-looking statements. Nevro's operating results for the second quarter ended June 30, 2022 are not necessarily indicative of our operating results for any future periods.
Nevro Corp. Condensed Consolidated Statements of Operations and Comprehensive Loss | ||||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||
(unaudited) | (unaudited) | |||||||||||||||
Revenue | $ | 104,213 | $ | 102,330 | $ | 192,055 | $ | 190,940 | ||||||||
Cost of revenue | 31,479 | 32,344 | 60,229 | 58,660 | ||||||||||||
Gross profit | 72,734 | 69,986 | 131,826 | 132,280 | ||||||||||||
Operating expenses: | ||||||||||||||||
Research and development | 12,552 | 11,869 | 25,088 | 23,403 | ||||||||||||
Sales, general and administrative | 83,973 | 73,880 | 163,298 | 147,152 | ||||||||||||
Total operating expenses | 96,525 | 85,749 | 188,386 | 170,555 | ||||||||||||
Loss from operations | (23,791) | (15,763) | (56,560) | (38,275) | ||||||||||||
Other income (expense): | ||||||||||||||||
Interest income (expense), net | (1,326) | (5,541) | (2,786) | (11,791) | ||||||||||||
Other income (expense), net | 368 | (88) | 453 | (545) | ||||||||||||
Loss before income taxes | (24,749) | (21,392) | (58,893) | (50,611) | ||||||||||||
Provision for income taxes | 241 | 198 | 422 | 540 | ||||||||||||
Net loss | (24,990) | (21,590) | (59,315) | (51,151) | ||||||||||||
Changes in foreign currency translation adjustment | (1,411) | 62 | (1,603) | (250) | ||||||||||||
Changes in unrealized gains (losses) on short-term investments | (261) | 28 | (1,282) | (119) | ||||||||||||
Net change in other comprehensive loss | (1,672) | 90 | (2,885) | (369) | ||||||||||||
Comprehensive Loss | $ | (26,662) | $ | (21,500) | $ | (62,200) | $ | (51,520) | ||||||||
Net loss per share, basic and diluted | $ | (0.71) | $ | (0.62) | $ | (1.69) | $ | (1.47) | ||||||||
Weighted average shares used to compute net loss per share, basic and diluted | 35,317,766 | 34,808,389 | 35,196,488 | 34,721,551 | ||||||||||||
Nevro Corp. Condensed Consolidated Balance Sheets | ||||||||
June 30, | December 31, | |||||||
2022 | 2021 | |||||||
(unaudited) | ||||||||
Assets | ||||||||
Current assets | ||||||||
Cash and cash equivalents | $ | 109,010 | $ | 34,710 | ||||
Short-term investments | 201,813 | 327,317 | ||||||
Accounts receivable, net | 66,903 | 70,475 | ||||||
Inventories, net | 93,520 | 93,517 | ||||||
Prepaid expenses and other current assets | 12,056 | 5,185 | ||||||
Total current assets | 483,302 | 531,204 | ||||||
Property and equipment, net | 20,790 | 20,664 | ||||||
Operating lease assets | 15,543 | 17,577 | ||||||
Other assets | 3,675 | 4,493 | ||||||
Restricted cash | 606 | 606 | ||||||
Total assets | $ | 523,916 | $ | 574,544 | ||||
Liabilities and stockholders' equity | ||||||||
Current liabilities | ||||||||
Accounts payable | $ | 31,298 | $ | 31,999 | ||||
Accrued liabilities and other | 41,368 | 50,204 | ||||||
Total current liabilities | 72,666 | 82,203 | ||||||
Long-term debt | 186,256 | 151,310 | ||||||
Long-term operating lease liabilities | 12,930 | 15,402 | ||||||
Other long-term liabilities | 22,079 | 22,013 | ||||||
Total liabilities | 293,931 | 270,928 | ||||||
Stockholders' equity | ||||||||
Common stock, 36,063,723 and 35,709,570 shares issued at June 30, 2022 and December 31, 2021, respectively; 35,380,807 and 35,026,654 shares outstanding at June 30, 2022 and December 31, 2021, respectively | 35 | 35 | ||||||
Additional paid-in capital | 902,712 | 928,138 | ||||||
Accumulated other comprehensive loss | (3,249) | (364) | ||||||
Accumulated deficit | (669,513) | (624,193) | ||||||
Total stockholders' equity | 229,985 | 303,616 | ||||||
Total liabilities and stockholders' equity | $ | 523,916 | $ | 574,544 | ||||
Nevro Corp. | ||||||||||||||||||||||||
GAAP to Non-GAAP Adjusted EBITDA Reconciliation | ||||||||||||||||||||||||
(unaudited) | ||||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||
The following table presents a reconciliation of GAAP net loss, as prepared in accordance with U.S. Generally Accepted Accounting Principles ("GAAP"), to Adjusted EBITDA, a non-GAAP financial measure. | ||||||||||||||||||||||||
Reconciliation of actual results: | ||||||||||||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||||||||||||
June 30, | June 30, | |||||||||||||||||||||||
2022 | 2021 | 2019 | 2022 | 2021 | 2019 | |||||||||||||||||||
(unaudited) | (unaudited) | |||||||||||||||||||||||
GAAP Net loss | $ | (24,990) | $ | (21,590) | $ | (28,021) | $ | (59,315) | $ | (51,151) | $ | (72,097) | ||||||||||||
Non-GAAP Adjustments: | ||||||||||||||||||||||||
Interest (income) expense, net | 1,326 | 5,541 | 1,221 | 2,786 | 11,791 | 2,360 | ||||||||||||||||||
Provision for income taxes | 241 | 198 | 358 | 422 | 540 | 698 | ||||||||||||||||||
Depreciation and amortization | 1,602 | 1,189 | 1,150 | 3,137 | 2,331 | 2,275 | ||||||||||||||||||
Stock-based compensation expense | 13,377 | 11,033 | 9,721 | 26,785 | 20,271 | 20,123 | ||||||||||||||||||
Litigation-related expenses | 3,953 | 6,616 | 4,455 | 7,629 | 12,558 | 6,801 | ||||||||||||||||||
Adjusted EBITDA | $ | (4,491) | $ | 2,987 | $ | (11,116) | $ | (18,556) | $ | (3,660) | $ | (39,840) | ||||||||||||
Reconciliation of guidance: | ||||||||||||||||||||||||
Three Months Ended | Year Ended | |||||||||||||||||||||||
September 30, 2022 | December 31, 2022 | |||||||||||||||||||||||
(Low Case) | (High Case) | (Low Case) | (High Case) | |||||||||||||||||||||
GAAP Net loss | $ | 75,000 | $ | 78,000 | $ | (2,000) | $ | 4,000 | ||||||||||||||||
Non-GAAP Adjustments | (84,000) | (84,000) | (23,000) | (23,000) | ||||||||||||||||||||
Adjusted EBITDA | $ | (9,000) | $ | (6,000) | $ | (25,000) | $ | (19,000) | ||||||||||||||||
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 – 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.
- Litigation-related expenses and credits – 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.
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 U.S. GAAP.
Amounts may not add due to rounding.
Investors and Media:
Julie Dewey, IRC
Nevro Corp.
Chief Corp Communications & Investor Relations Officer
650-433-3247 | julie.dewey@nevro.com
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SOURCE Nevro Corp.
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