Inogen Inc (INGN) Reports Decline in 2023 Revenue and Widening Net Loss
Revenue: Full-year revenue declined to $315.7 million in 2023 from $377.2 million in 2022.
Net Loss: GAAP net loss widened to $102.4 million for the full year, compared to $83.8 million in the previous year.
Gross Margin: Gross margin slightly decreased to 40.1% in 2023 from 40.7% in 2022.
Operating Expenses: Total operating expenses slightly decreased to $236.1 million in 2023 from $238.8 million in 2022.
Adjusted EBITDA: Negative adjusted EBITDA of $37.8 million for 2023, compared to negative $13.5 million in 2022.
Liquidity: Cash, cash equivalents, and marketable securities stood at $128.5 million as of December 31, 2023, with no debt.
Outlook: Inogen expects revenue of $73 to $74 million for the first quarter of 2024, indicating a slight growth compared to the first quarter of 2023.
On February 27, 2024, Inogen Inc (NASDAQ:INGN), a leading medical technology company specializing in portable oxygen concentrators, released its 8-K filing, detailing its financial performance for the fourth quarter and full-year ended December 31, 2023. The company reported a decrease in total revenue for the year, primarily due to declines in direct-to-consumer and business-to-business sales, though this was partially offset by higher rental revenue.
Financial Performance and Challenges
Inogen's total revenue for the fourth quarter was $75.9 million, a decrease from $88.1 million in the same period of the previous year. The company attributed the decline to a decrease in domestic business-to-business sales and direct-to-consumer sales. Despite this, Inogen managed to improve its total gross margin to 37.1% in the fourth quarter of 2023, up from 33.5% in the comparative period in 2022, thanks to lower premiums paid for components and reduced labor and overhead costs.
However, the company's GAAP net loss for the fourth quarter of 2023 was $26.6 million, compared to a GAAP net loss of $56.6 million in the fourth quarter of 2022. The adjusted net loss for the fourth quarter of 2023 was $19.4 million, compared to an adjusted net loss of $13.0 million in the fourth quarter of 2022. The negative adjusted EBITDA of $17.3 million in the fourth quarter of 2023, compared to a negative $10.6 million in the fourth quarter of 2022, reflects ongoing challenges in profitability.
Financial Achievements and Industry Importance
Despite the challenges, Inogen's management remains focused on positioning the business for revenue growth and long-term profitability. The company's efforts to control costs are evident in the reduced total operating expense for the quarter, which was $57.1 million compared to $88.0 million in the fourth quarter of 2022. This reduction was primarily due to the loss on disposal of an intangible asset in the prior-year period, partially offset by changes in fair value of the earnout liabilities and certain one-time costs.
In the medical devices and instruments industry, maintaining a strong balance sheet is crucial. Inogen's liquidity position, with $128.5 million in cash, cash equivalents, and marketable securities and no debt, is a significant achievement that provides the company with the financial flexibility to navigate market conditions and invest in growth opportunities.
Key Financial Metrics
Key financial metrics from Inogen's income statement, balance sheet, and cash flow statement highlight the company's financial health and operational efficiency. The slight decrease in gross margin and the widening net loss underscore the need for Inogen to enhance its sales strategy and manage costs effectively. The company's cash flow from operations also reflects the challenges faced, with a net cash used in operating activities of $3.2 million for the year.
As Inogen looks ahead to the first quarter of 2024, it expects modest revenue growth, which will be an important metric for investors to monitor. The company's ability to achieve this growth amidst ongoing market challenges will be critical for its future success.
Management Commentary
"I am excited for the future of Inogen. As we progress into 2024, we are focused on positioning the business for revenue growth and long-term profitability while advancing our innovation pipeline and working to bring Physio-Assist to the U.S. market," said Kevin Smith, President and Chief Executive Officer.
In conclusion, Inogen Inc (NASDAQ:INGN) faces headwinds with decreased sales and a challenging market environment. However, the company's improved gross margin, strong liquidity position, and management's commitment to strategic growth initiatives may provide a foundation for recovery and long-term value creation for shareholders.
Explore the complete 8-K earnings release (here) from Inogen Inc for further details.
This article first appeared on GuruFocus.
