Penumbra, Inc. Reports First Quarter 2024 Financial Results
Penumbra, Inc. reported strong financial results for the first quarter of 2024, with revenue reaching $278.7 million, a 15.4% increase over the previous year. The company's U.S. thrombectomy revenue saw a significant growth of 35.2%. The non-GAAP income from operations was $19.3 million, and adjusted EBITDA was $37.6 million with a margin of 13.5%. Penumbra's total revenue growth and U.S. thrombectomy revenue guidance for the full year 2024 are 16-20% and 27-30%, respectively. The company expects continued growth in revenue and gross margin expansion for the year.
Revenue increased by 15.4% to $278.7 million in the first quarter of 2024 compared to the previous year.
U.S. thrombectomy revenue grew by 35.2% in the first quarter of 2024.
Non-GAAP income from operations reached $19.3 million in the first quarter of 2024.
Adjusted EBITDA was $37.6 million with a margin of 13.5% in the first quarter of 2024.
The company's revenue and U.S. thrombectomy revenue guidance for full year 2024 are 16-20% and 27-30%, respectively.
Penumbra expects gross margin expansion and total non-GAAP operating margin expansion in the range of 100 to 150 basis points and 100 to 200 basis points, respectively, in 2024 compared to the previous year.
- None.
Insights
The observed revenue growth for Penumbra in the first quarter, primarily led by its U.S. thrombectomy products, indicates robust demand in this niche segment. The increase of
However, investors should note the decline in revenue from global embolization and access products, especially internationally. This mixed performance could signal competitive pressures or market saturation in specific regions. The
Looking forward, Penumbra's reaffirmation of its full-year guidance suggests confidence in its growth trajectory. It is essential, though, for investors to monitor the company's ability to maintain growth rates within the projected ranges of
Penumbra's specific mention of Computer-Assisted Vacuum Thrombectomy (CAVT) products as a growth driver is significant, highlighting the increasing adoption of advanced medical technologies. The market's favorable response to such innovation is a testament to the evolving healthcare landscape where precision and minimally invasive procedures are highly valued. This trend is expected to continue, potentially benefiting Penumbra's long-term position within the industry.
Another aspect for investors to consider is the anticipated gross margin and operating margin expansion, which signals operational efficiency and possible economies of scale. If achieved, these improvements could reflect positively on Penumbra's profitability and appeal to value-oriented investors. Understanding the balance between R&D investments, which have increased year-on-year and profitability will be critical for assessing the sustainability of Penumbra's growth model.
The decrease in international embolization and access product sales surfaces a potential area of concern. It's important to investigate the cause—whether it's due to regulatory challenges, market dynamics, or competitive disruptions. This issue could have implications for international market strategy and requires strategic adjustments to avoid prolonged negative growth in this segment.
Nonetheless, Penumbra's performance in the highly competitive U.S. market, especially around thrombectomy products, is commendable. This success is indicative of strong product adoption and market penetration. Investors should watch for trends in healthcare spending, regulatory changes and technological advancements as these factors will heavily influence Penumbra's market share and financial performance moving forward.
- Revenue of
$278.7 million 15.4% or15.2% in constant currency1, compared to the first quarter of 2023. U.S. thrombectomy revenue of$150.3 million 35.2% compared to the first quarter of 2023.- Non-GAAP income from operations1 of
$19.3 million - Adjusted EBITDA1 of
$37.6 million 13.5% in the first quarter of 2024. - Cash and marketable investments increased
$24.3 million - Strong growth trends in the first quarter reinforce our total revenue and
U.S. thrombectomy revenue guidance ranges of 16-20% and 27-30% , respectively, for full year 2024.
First Quarter 2024 Financial Results
Total revenue increased to
Gross profit for the first quarter of 2024 was
Total operating expenses, including a
Income from operations was
Full Year 2024 Financial Outlook
The Company reiterates guidance for total revenue for 2024 to be in the range of
1See "Non-GAAP Financial Measures" for important information about our use of non-GAAP measures. |
Webcast and Conference Call Information
Penumbra, Inc. will host a conference call to discuss the first quarter 2024 financial results after market close on Tuesday, May 7, 2024 at 4:30 PM Eastern Time. The conference call can be accessed live over the phone by dialing (888) 596-4144 for domestic and international callers (conference id: 7567226), or the webcast can be accessed on the "Events and Presentations" section under the "Investors" tab of the Company's website at: www.penumbrainc.com. The webcast will be available on the Company's website for at least two weeks following the completion of the call.
About Penumbra
Penumbra, Inc., headquartered in
Non-GAAP Financial Measures
In addition to financial measures prepared in accordance with
Constant Currency. The Company's constant currency revenue disclosures estimate the impact of changes in foreign currency rates on the translation of the Company's current period revenue as compared to the applicable comparable period in the prior year. This impact is derived by taking the current local currency revenue and translating it into
Non-GAAP operating expenses, non-GAAP income from operations, non-GAAP net income, and non-GAAP diluted EPS. The adjustments to the GAAP financial measures reflect the exclusion of:
- the effect of the amortization of finite lived intangible assets acquired in connection with the Sixense acquisition over their estimated useful lives;
- the excess tax benefits associated with share-based compensation arrangements; and
- non-recurring litigation related expenses.
Adjusted EBITDA. The Company's adjusted EBITDA reflects the exclusion from GAAP net income of:
- non-cash operating charges such as stock-based compensation and depreciation and amortization;
- non-operating items such as interest income, interest expense, and provision for (benefit from) income taxes; and
- non-recurring litigation related expenses.
Full reconciliation of these non-GAAP measures to the most comparable GAAP measures is set forth in the tables below.
Our management believes the non-GAAP financial measures disclosed in this press release are useful to investors in assessing the operating performance of our business and provide meaningful comparisons to prior periods and thus a more complete understanding of our business than could be obtained absent this disclosure. Specifically, we consider the change in constant currency revenue as a useful metric as it provides an alternative framework for assessing how our underlying business performed excluding the effect of foreign currency rate fluctuations. We consider non-GAAP operating expenses, non-GAAP income from operations, non-GAAP net income, and non-GAAP diluted EPS useful metrics as they provide an alternative framework for assessing how our underlying business performed excluding the amortization expense of finite lived intangible assets acquired in connection with the Sixense acquisition, the excess tax benefits associated with share-based compensation arrangements, and expenses related to certain litigation matters that we have determined are not a normal or recurring part of our business, including settlement costs and legal fees. Further, we consider adjusted EBITDA a useful metric as it provides an alternative framework for assessing how our underlying business performed excluding non-cash operating charges such as stock-based compensation and depreciation and amortization, non-operating items such as interest income, interest expense, and provision for (benefit from) income taxes and non-recurring litigation related expenses.
The non-GAAP financial measures included in this press release may be different from, and therefore may not be comparable to, similarly titled measures used by other companies. These non-GAAP measures should not be considered in isolation or as alternatives to GAAP measures. We urge investors to review the reconciliation of these non-GAAP financial measures to the comparable GAAP financial measures included in this press release, and not to rely on any single financial measure to evaluate our business.
Forward-Looking Statements
Except for historical information, certain statements in this press release are forward-looking in nature and are subject to risks, uncertainties and assumptions about us. Our business and operations are subject to a variety of risks and uncertainties and, consequently, actual results may differ materially from those projected by any forward-looking statements. Factors that could cause actual results to differ from those projected include, but are not limited to: failure to sustain or grow profitability or generate positive cash flows; failure to effectively introduce and market new products; delays in product introductions; significant competition; inability to further penetrate our current customer base, expand our user base and increase the frequency of use of our products by our customers; inability to achieve or maintain satisfactory pricing and margins; manufacturing difficulties; permanent write-downs or write-offs of our inventory; product defects or failures; unfavorable outcomes in clinical trials; inability to maintain our culture as we grow; fluctuations in foreign currency exchange rates; potential adverse regulatory actions; and the potential impact of any acquisitions, mergers, dispositions, joint ventures or investments we may make. These risks and uncertainties, as well as others, are discussed in greater detail in our filings with the Securities and Exchange Commission ("SEC"), including our Annual Report on Form 10-K for the year ended December 31, 2023 filed with the SEC on February 22, 2024. There may be additional risks of which we are not presently aware or that we currently believe are immaterial which could have an adverse impact on our business. Any forward-looking statements are based on our current expectations, estimates and assumptions regarding future events and are applicable only as of the dates of such statements. We make no commitment to revise or update any forward-looking statements in order to reflect events or circumstances that may change.
Penumbra, Inc. | ||||
Condensed Consolidated Balance Sheets | ||||
(unaudited) | ||||
(in thousands) | ||||
March 31, 2024 | December 31, 2023 | |||
Assets | ||||
Current assets: | ||||
Cash and cash equivalents | $ 223,114 | $ 167,486 | ||
Marketable investments | 90,360 | 121,701 | ||
Accounts receivable, net | 191,989 | 201,768 | ||
Inventories | 398,366 | 388,023 | ||
Prepaid expenses and other current assets | 31,194 | 36,424 | ||
Total current assets | 935,023 | 915,402 | ||
Property and equipment, net | 75,744 | 72,691 | ||
Operating lease right-of-use assets | 185,845 | 188,756 | ||
Finance lease right-of-use assets | 30,234 | 31,092 | ||
Intangible assets, net | 68,421 | 71,056 | ||
Goodwill | 166,103 | 166,270 | ||
Deferred taxes | 84,661 | 85,158 | ||
Other non-current assets | 33,814 | 25,880 | ||
Total assets | $ 1,579,845 | $ 1,556,305 | ||
Liabilities and Stockholders' Equity | ||||
Current liabilities: | ||||
Accounts payable | $ 32,454 | $ 27,155 | ||
Accrued liabilities | 106,549 | 110,555 | ||
Current operating lease liabilities | 11,520 | 11,203 | ||
Current finance lease liabilities | 2,280 | 2,231 | ||
Total current liabilities | 152,803 | 151,144 | ||
Non-current operating lease liabilities | 194,537 | 197,229 | ||
Non-current finance lease liabilities | 23,098 | 23,680 | ||
Other non-current liabilities | 5,876 | 5,308 | ||
Total liabilities | 376,314 | 377,361 | ||
Stockholders' equity: | ||||
Common stock | 39 | 39 | ||
Additional paid-in capital | 1,062,470 | 1,047,198 | ||
Accumulated other comprehensive loss | (4,838) | (3,151) | ||
Retained earnings | 145,860 | 134,858 | ||
Total stockholders' equity | 1,203,531 | 1,178,944 | ||
Total liabilities and stockholders' equity | $ 1,579,845 | $ 1,556,305 | ||
Penumbra, Inc. | ||||
Condensed Consolidated Statements of Operations | ||||
(unaudited) | ||||
(in thousands, except share and per share amounts) | ||||
Three Months Ended March 31, | ||||
2024 | 2023 | |||
Revenue | $ 278,655 | $ 241,398 | ||
Cost of revenue | 97,516 | 90,326 | ||
Gross profit | 181,139 | 151,072 | ||
Operating expenses: | ||||
Research and development | 24,626 | 19,986 | ||
Sales, general and administrative | 144,412 | 123,078 | ||
Total operating expenses | 169,038 | 143,064 | ||
Income from operations | 12,101 | 8,008 | ||
Interest and other income, net | 2,525 | 644 | ||
Income before income taxes | 14,626 | 8,652 | ||
Provision for income taxes | 3,624 | 90 | ||
Net income | $ 11,002 | $ 8,562 | ||
Net income per share: | ||||
Basic | $ 0.28 | $ 0.22 | ||
Diluted | $ 0.28 | $ 0.22 | ||
Weighted average shares outstanding: | ||||
Basic | 38,717,334 | 38,186,342 | ||
Diluted | 39,387,359 | 39,075,388 | ||
Penumbra, Inc. | ||||
Reconciliation of GAAP Operating Expenses and GAAP Income from Operations to Non-GAAP Operating Expenses and Non-GAAP | ||||
(unaudited) | ||||
(in thousands) | ||||
Three Months Ended March 31, | ||||
2024 | 2023 | |||
GAAP operating expenses | $ 169,038 | $ 143,064 | ||
GAAP operating expenses includes the effect of the following items: | ||||
Non-recurring litigation related expenses | 4,823 | — | ||
Amortization of finite lived intangible assets acquired | 2,380 | 2,380 | ||
Non-GAAP operating expenses | $ 161,835 | $ 140,684 | ||
GAAP income from operations | $ 12,101 | $ 8,008 | ||
GAAP income from operations includes the effect of the following items: | ||||
Non-recurring litigation related expenses | 4,823 | — | ||
Amortization of finite lived intangible assets acquired | 2,380 | 2,380 | ||
Non-GAAP income from operations | $ 19,304 | $ 10,388 | ||
1See "Non-GAAP Financial Measures" for important information about our use of non-GAAP measures. | ||||
Penumbra, Inc. | ||||||||
Reconciliation of GAAP Net Income and GAAP Diluted EPS to Non-GAAP Net Income and Non-GAAP Diluted EPS1 | ||||||||
(unaudited) | ||||||||
(in thousands, except share and per share amounts) | ||||||||
Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | |||||||
Net income | Diluted EPS | Net income | Diluted EPS | |||||
GAAP net income | $ 11,002 | $ 0.28 | $ 8,562 | $ 0.22 | ||||
GAAP net income includes the effect of the following items: | ||||||||
Non-recurring litigation related expenses | 4,823 | 0.12 | — | — | ||||
Amortization of finite lived intangible assets acquired | 2,380 | 0.06 | 2,380 | 0.06 | ||||
Tax effect on the non-GAAP adjustments above2 | (1,736) | (0.04) | (558) | (0.01) | ||||
Excess tax benefits related to stock compensation awards | (287) | (0.01) | (1,440) | (0.04) | ||||
Non-GAAP net income | $ 16,182 | $ 0.41 | $ 8,944 | $ 0.23 | ||||
GAAP diluted EPS | $ 0.28 | $ 0.22 | ||||||
Non-GAAP diluted EPS | $ 0.41 | $ 0.23 | ||||||
Weighted average shares outstanding used to compute: | ||||||||
GAAP diluted EPS | 39,387,359 | 39,075,388 | ||||||
Non-GAAP diluted EPS | 39,387,359 | 39,075,388 | ||||||
1See "Non-GAAP Financial Measures" for important information about our use of non-GAAP measures. | ||||
2For the three months ended March 31, 2024 and 2023, management used a combined federal and state tax rate of | ||||
Penumbra, Inc. | ||||
Reconciliation of GAAP Net Income to Adjusted EBITDA and Adjusted EBITDA Margin1 | ||||
(unaudited) | ||||
(in thousands, except for percentages) | ||||
Three Months Ended March 31, | ||||
2024 | 2023 | |||
GAAP net income | $ 11,002 | $ 8,562 | ||
Adjustments to GAAP net income: | ||||
Depreciation and amortization expense | 7,519 | 6,575 | ||
Interest income, net | (2,891) | (554) | ||
Provision for income taxes | 3,624 | 90 | ||
Stock-based compensation expense | 13,569 | 12,766 | ||
Non-recurring litigation related expenses | 4,823 | — | ||
Adjusted EBITDA | $ 37,646 | $ 27,439 | ||
Revenue | $ 278,655 | $ 241,398 | ||
Adjusted EBITDA | $ 37,646 | $ 27,439 | ||
Adjusted EBITDA margin | 13.5 % | 11.4 % | ||
1See "Non-GAAP Financial Measures" for important information about our use of non-GAAP measures. | ||||
Penumbra, Inc. | ||||||||||||||
Reconciliation of Revenue Growth by Geographic Regions to Constant Currency Revenue Growth1 | ||||||||||||||
(unaudited) | ||||||||||||||
(in thousands, except for percentages) | ||||||||||||||
Three Months Ended March 31, | Reported Change | FX Impact | Constant Currency Change | |||||||||||
2024 | 2023 | $ | % | $ | $ | % | ||||||||
$ 209,644 | $ 171,879 | $ 37,765 | 22.0 % | $ — | $ 37,765 | 22.0 % | ||||||||
International | 69,011 | 69,519 | (508) | (0.7) % | (640) | (1,148) | (1.7) % | |||||||
Total | $ 278,655 | $ 241,398 | $ 37,257 | 15.4 % | $ (640) | $ 36,617 | 15.2 % | |||||||
Penumbra, Inc. | ||||||||||||||
Reconciliation of Revenue Change by Product Categories and Geographic Regions to Constant Currency Revenue Growth1 | ||||||||||||||
(unaudited) | ||||||||||||||
(in thousands, except for percentages) | ||||||||||||||
Three Months Ended March 31, | Reported Change | FX Impact | Constant Currency Change | |||||||||||
2024 | 2023 | $ | % | $ | $ | % | ||||||||
Thrombectomy | $ 187,703 | $ 144,980 | $ 42,723 | 29.5 % | $ (309) | $ 42,414 | 29.3 % | |||||||
Embolization and Access | 90,952 | 96,418 | (5,466) | (5.7) % | (331) | (5,797) | (6.0) % | |||||||
Total | $ 278,655 | $ 241,398 | $ 37,257 | 15.4 % | $ (640) | $ 36,617 | 15.2 % | |||||||
Three Months Ended March 31, | Reported Change | FX Impact | Constant Currency Change | |||||||||||
2024 | 2023 | $ | % | $ | $ | % | ||||||||
Thrombectomy | ||||||||||||||
$ 150,284 | $ 111,189 | $ 39,095 | 35.2 % | $ — | $ 39,095 | 35.2 % | ||||||||
International | 37,419 | 33,791 | 3,628 | 10.7 % | (309) | 3,319 | 9.8 % | |||||||
Total Thrombectomy | 187,703 | 144,980 | 42,723 | 29.5 % | (309) | 42,414 | 29.3 % | |||||||
Embolization and Access | ||||||||||||||
59,360 | 60,690 | (1,330) | (2.2) % | (1,330) | (2.2) % | |||||||||
International | 31,592 | 35,728 | (4,136) | (11.6) % | (331) | (4,467) | (12.5) % | |||||||
Total Embolization and Access | 90,952 | 96,418 | (5,466) | (5.7) % | (331) | (5,797) | (6.0) % | |||||||
Total | $ 278,655 | $ 241,398 | $ 37,257 | 15.4 % | $ (640) | $ 36,617 | 15.2 % | |||||||
1See "Non-GAAP Financial Measures" for important information about our use of non-GAAP measures. | ||||
Investor Relations
Penumbra, Inc.
510-995-2461
investors@penumbrainc.com
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FAQ
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