Nevro Reports Second Quarter 2023 Financial Results, Provides Third Quarter Guidance and Updates Full-Year 2023 Guidance
- Second quarter 2023 worldwide revenue increased by 4% compared to the same period in 2022.
- Painful Diabetic Neuropathy (PDN) indication sales grew by 73% to approximately $19.0 million.
- Third quarter 2023 revenue guidance is set at $95 million to $97 million.
- Full-year 2023 revenue guidance is updated to $410 million to $415 million, representing 1% to 2% constant currency growth over 2022.
- Greg Siller has been appointed as the new Chief Commercial Officer.
- None.
Company Takes Proactive Steps to Improve Commercial Execution and Maximize Growth Opportunities
Recent Business Highlights and Guidance
- Second Quarter 2023 Worldwide Revenue of
$108.8 Million 4% As Reported and Constant Currency Compared to Second Quarter 2022 - Painful Diabetic Neuropathy (PDN) Indication Sales of Approximately
$19.0 Million 73% Compared to Second Quarter 2022 - Second Quarter 2023 U.S. Trial Procedures Increased
4% Compared to Second Quarter 2022, whileU.S. PDN Trial Procedures Represented23% of TotalU.S. Trials in the Quarter - Second Quarter 2023 Net Loss from Operations of
$25.6 Million $3.1 Million - Greg Siller Named as New Chief Commercial Officer
- SENZA-PDN Randomized Controlled Trial Data Presented at the American Diabetes Association 83rd Scientific Sessions Demonstrated Positive Correlation Between Use of High-Frequency (10 kHz) Spinal Cord Stimulation and Reductions in HbA1c (A1C) and Body Weight in Subgroup of Patients with Type 2 Diabetes at 24 Months
- Two Significant Payer Coverage Wins: Florida Blue, the Largest Commercial Payer in Florida Representing 4.6 Million Covered Lives, Updated Their Medical Policy to Include Coverage for Painful Diabetic Neuropathy, Effective June 15, 2023; and Medicare Administrative Contractors Novitas and First Coast Service Options (FCSO) now cover PDN and Non-Surgical Back Pain following the Medicare National Coverage Determination, Effective July 13, 2023
- Provides Third Quarter 2023 Revenue Guidance of
$95 Million $97 Million $410 Million $415 Million 1% to2% Constant Currency Growth Over 2022 - Provides Third Quarter 2023 Non-GAAP Adjusted EBITDA Guidance of Negative
$8 Million $10 Million $25 Million $28 Million
Second Quarter 2023 Financial Overview
Worldwide revenue for the second quarter of 2023 was
International revenue in the second quarter of 2023 was
"While we are encouraged by the early signs of recovery and the long-term outlook of the SCS market, the market recovery will not be linear. We do expect a return to sustained historical market growth rates and are working to lay a stronger foundation in our commercial execution as we transition into our next phase of growth," said Kevin Thornal, Nevro's CEO and President. "With our new Chief Commercial Officer, Greg Siller, on board and looking more importantly to the second half of the year and beyond, we have focused and reengaged our field team very intensely on patient trial growth and referral physician education. While it's early, we've seen some promising initial signs and responsiveness to those efforts."
Mr. Thornal continued, "We are now clearly focused on three key pillars that we believe will improve our commercial execution and deliver significant long-term shareholder return:
- First, we are moving quickly to ensure we have top talent at every position to increase sales productivity and improve physician engagement and have optimized our field teams to enable greater ownership, accountability, and speed to maximize growth opportunities;
- Second, we will focus on increasing market penetration by expanding indications and launching HFX line extensions, such as HFX iQ, while vigorously pursuing a robust R&D pipeline and strong clinical evidence, and by potentially adding to our product portfolio through strategic opportunities; and
- Lastly, we plan to continue to progress on the path to profitability by scaling our
Costa Rica manufacturing facility and improving our operational efficiency."
Mr. Thornal commented further, "The changes resulting from our focus on these three key pillars will require some time to take full effect, and given this and the non-linear recovery in the SCS market, we have adjusted our guidance. However, we believe these changes will generate significant future returns, including improved revenue growth, enhanced margins, and increased operating leverage, setting us up for success in 2024 and beyond. We are enthusiastic about our plan and look forward to executing on our current strategies, driving growth and taking advantage of the meaningful leverage opportunities we have to drive toward profitability and deliver shareholder value."
Gross profit for the second quarter of 2023 was
Operating expenses for the second quarter of 2023 were
Net loss from operations for the second quarter of 2023 was
Cash, cash equivalents and short-term investments totaled
Third Quarter and Full-Year 2023 Guidance
Nevro expects third quarter of 2023 worldwide revenue of approximately
The company expects third quarter of 2023 non-GAAP adjusted EBITDA to be a loss of approximately
The company now expects full-year 2023 worldwide revenue of approximately
The company now expects full-year 2023 non-GAAP adjusted EBITDA to be a loss of approximately
An investor presentation for the company's second quarter 2023 financial results is available in the "Investors" section of Nevro's website at www.nevro.com.
Webcast and Conference Call Information
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
Internet Posting of Information
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.
About Nevro
Headquartered in
Senza®, Senza II®, Senza Omnia™, and HFX iQ™ 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, 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, NEVRO, and the NEVRO logo are trademarks or registered trademarks of Nevro Corp. Patents covering Senza HFX iQ and other Nevro products are listed at Nevro.com/patents.
To learn more about Nevro, connect with us on LinkedIn, Twitter, Facebook and Instagram.
Forward-Looking Statements
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 updated full-year 2023 financial guidance; our expectation that the SCS market will return to sustained historical market growth rates; our belief that our three key pillars for our strategic focus will improve our commercial execution and deliver significant long-term shareholder return; our expectation that our strategic changes have the potential to generate significant future returns, including improved revenue growth, enhanced margins, and increased operating leverage, setting us up for success in 2024 and beyond; and the expectation that there will be a meaningful shift in mix to the HFX iQ product throughout 2023, which combined with the ramp-up of our
Nevro Corp. | ||||||||||||||||
Condensed Consolidated Statements of Operations and Comprehensive Loss | ||||||||||||||||
(in thousands, except share and per share data) | ||||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||||
(unaudited) | (unaudited) | |||||||||||||||
Revenue | $ | 108,809 | $ | 104,213 | $ | 205,136 | $ | 192,055 | ||||||||
Cost of revenue | 34,366 | 31,479 | 66,069 | 60,229 | ||||||||||||
Gross profit | 74,443 | 72,734 | 139,067 | 131,826 | ||||||||||||
Operating expenses: | ||||||||||||||||
Research and development | 13,320 | 12,552 | 28,075 | 25,088 | ||||||||||||
Sales, general and administrative | 86,762 | 83,973 | 172,954 | 163,298 | ||||||||||||
Total operating expenses | 100,082 | 96,525 | 201,029 | 188,386 | ||||||||||||
Loss from operations | (25,639) | (23,791) | (61,962) | (56,560) | ||||||||||||
Other income (expense): | ||||||||||||||||
Interest income (expense), net | 1,730 | (1,326) | 3,395 | (2,786) | ||||||||||||
Other income (expense), net | (338) | 368 | (384) | 453 | ||||||||||||
Loss before income taxes | (24,247) | (24,749) | (58,951) | (58,893) | ||||||||||||
Provision for income taxes | 477 | 241 | 802 | 422 | ||||||||||||
Net loss | (24,724) | (24,990) | (59,753) | (59,315) | ||||||||||||
Changes in foreign currency translation adjustment | 336 | (1,411) | 842 | (1,603) | ||||||||||||
Changes in unrealized gains (losses) on short-term | (192) | (261) | 395 | (1,282) | ||||||||||||
Net change in other comprehensive loss | 144 | (1,672) | 1,237 | (2,885) | ||||||||||||
Comprehensive loss | $ | (24,580) | $ | (26,662) | $ | (58,516) | $ | (62,200) | ||||||||
Net loss per share, basic and diluted | $ | (0.69) | $ | (0.71) | $ | (1.67) | $ | (1.69) | ||||||||
Weighted average shares used to compute net loss per share | 35,921,539 | 35,317,766 | 35,753,112 | 35,196,488 | ||||||||||||
Nevro Corp. | ||||||||
Condensed Consolidated Balance Sheets | ||||||||
(in thousands, except share and per share data) | ||||||||
June 30, | December 31, | |||||||
2023 | 2022 | |||||||
(unaudited) | ||||||||
Assets | ||||||||
Current assets | ||||||||
Cash and cash equivalents | $ | 65,186 | $ | 120,373 | ||||
Short-term investments | 264,756 | 254,012 | ||||||
Accounts receivable, net | 69,400 | 78,930 | ||||||
Inventories, net | 120,088 | 99,638 | ||||||
Prepaid expenses and other current assets | 11,918 | 9,984 | ||||||
Total current assets | 531,348 | 562,937 | ||||||
Property and equipment, net | 23,526 | 22,271 | ||||||
Operating lease assets | 11,231 | 13,430 | ||||||
Other assets | 2,807 | 3,164 | ||||||
Restricted cash | 606 | 606 | ||||||
Total assets | $ | 569,518 | $ | 602,408 | ||||
Liabilities and stockholders' equity | ||||||||
Current liabilities | ||||||||
Accounts payable | $ | 30,298 | $ | 26,849 | ||||
Accrued liabilities and other | 47,231 | 52,363 | ||||||
Total current liabilities | 77,529 | 79,212 | ||||||
Long-term debt | 187,489 | 186,867 | ||||||
Long-term operating lease liabilities | 7,551 | 10,296 | ||||||
Other long-term liabilities | 2,199 | 2,157 | ||||||
Total liabilities | 274,768 | 278,532 | ||||||
Stockholders' equity | ||||||||
Common stock, 36,763,038 and 36,203,423 shares issued at June 30, 2023 and December 31, 2022, respectively; 36,080,122 and 35,520,507 shares outstanding at June 30, 2023 and December 31, 2022, respectively | 36 | 35 | ||||||
Additional paid-in capital | 963,521 | 934,132 | ||||||
Accumulated other comprehensive loss | (1,857) | (3,094) | ||||||
Accumulated deficit | (666,950) | (607,197) | ||||||
Total stockholders' equity | 294,750 | 323,876 | ||||||
Total liabilities and stockholders' equity | $ | 569,518 | $ | 602,408 | ||||
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
Reconciliation of actual results: | ||||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||||
(unaudited) | (unaudited) | |||||||||||||||
GAAP Net Loss | $ | (24,724) | $ | (24,990) | $ | (59,753) | $ | (59,315) | ||||||||
Non-GAAP Adjustments: | ||||||||||||||||
Interest (income) expense, net | (1,730) | 1,326 | (3,395) | 2,786 | ||||||||||||
Provision for income taxes | 477 | 241 | 802 | 422 | ||||||||||||
Depreciation and amortization | 1,711 | 1,602 | 3,293 | 3,137 | ||||||||||||
Stock-based compensation expense | 16,166 | 13,377 | 29,726 | 26,785 | ||||||||||||
Litigation-related expenses | 4,934 | 3,953 | 8,688 | 7,629 | ||||||||||||
Restructuring charges | 41 | — | 373 | — | ||||||||||||
Adjusted EBITDA | $ | (3,125) | $ | (4,491) | $ | (20,266) | $ | (18,556) | ||||||||
Reconciliation of guidance: | ||||||||||||||||
Three Months Ended | Year Ended | |||||||||||||||
September 30, 2023 | December 31, 2023 | |||||||||||||||
(Low Case) | (High Case) | (Low Case) | (High Case) | |||||||||||||
GAAP Net Loss | $ | (30,300) | $ | (28,300) | $ | (105,100) | $ | (102,100) | ||||||||
Non-GAAP Adjustments | 20,300 | 20,300 | 77,100 | 77,100 | ||||||||||||
Adjusted EBITDA | $ | (10,000) | $ | (8,000) | $ | (28,000) | $ | (25,000) | ||||||||
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 – 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.
Investors and Media:
Rod MacLeod, CFO
Nevro Corp.
650-433-3247 | rod.macleod@nevro.com
Greg Chodaczek
Gilmartin Group LLC
610-368-6505 | greg@gilmartinir.com
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SOURCE Nevro Corp.
FAQ
What is the revenue growth rate for the second quarter of 2023 compared to the same period in 2022?
How much did Painful Diabetic Neuropathy (PDN) indication sales grow in the second quarter of 2023?
What is the revenue guidance for the third quarter of 2023?
What is the updated full-year 2023 revenue guidance?
Who is the new Chief Commercial Officer of Nevro Corp.?
