Inogen (INGN) Q2 Earnings Beat Estimates, Revenues Down Y/Y
Inogen, Inc. INGN incurred an adjusted loss per share of 25 cents for second-quarter 2023, wider than the adjusted loss per share of 2 cents in the year-ago period. However, the Zacks Consensus Estimate was pegged at a loss of 64 cents per share.
GAAP loss per share for the quarter was 42 cents, wider than the year-earlier loss of 15 cents per share.
Revenues in Detail
Inogen registered revenues of $83.6 million for the second quarter, down 19.1% year over year. The figure lagged the Zacks Consensus Estimate by 10.3%.
On a constant-currency basis, total revenues for the reported quarter decreased 18.5%.
Per management, the year-over-year decrease in the top line primarily resulted from lower international and direct-to-consumer sales. However, this was partially offset by an increase in domestic business-to-business sales and rental revenues.
Segmental Details
Inogen derives revenues from two sources — rental and sales.
Rental revenues for the reported quarter grossed $15.3 million, up 8.6% from the year-ago period. Per management, continued growth in rental patients on service and higher Medicare reimbursement rates resulted in the upside. However, this was partially offset by rental revenue adjustments, which were part of Inogen’s work to improve collections processes and clean up aged receivables. This figure compares to our Rental revenues’ second-quarter projection of $14.9 million.
Sales revenues were $68.3 million, down 23.5% from the prior-year quarter. This figure compares to our Sales revenues’ second-quarter projection of $78.4 million.
Revenues by Region & Category
Domestic business-to-business sales for second-quarter 2023 amounted to $18.3 million, up 62.9% on a year-over-year basis. Our projection for the same was $18.7 million.
International business-to-business sales for the reported quarter amounted to $23.3 million, down 37.8% year over year on a reported basis. Our model estimate for the metric was $30.1 million.
Domestic direct-to-consumer sales decreased 34.1% year over year to $26.8 million for the quarter. Our estimate for the same was $29.7 million.
Inogen, Inc Price, Consensus and EPS Surprise
Inogen, Inc price-consensus-eps-surprise-chart | Inogen, Inc Quote
Margins
For the quarter under review, Inogen’s adjusted gross profit fell 23.9% from the year-ago period to $37.3 million. The adjusted gross margin contracted 280 basis points to 44.6%.
Sales and marketing expenses decreased 11.5% from the year-ago quarter to $26.9 million. Research and development expenses decreased 29.2% year over year to $4.3 million, while general and administrative expenses increased 15.2% to $14.6 million. Adjusted operating expenses of $45.8 million decreased 6.8% year over year.
Adjusted operating loss totaled $8.5 million compared with the prior-year quarter’s adjusted operating loss of $0.2 million.
Financial Position
Inogen exited second-quarter 2023 with cash and cash equivalents of $167.7 million compared with $164.1 million at the end of first quarter.
The company ended the quarter with no debt on its balance sheet.
Cumulative net cash used in operating activities at the end of second-quarter 2023 was $2.3 million compared with $12.6 million a year ago.
Guidance
Inogen has provided its outlook for the full year.
The company expects its total revenues to be between $315 million and $320 million. The Zacks Consensus Estimate for the same currently stands at $381.9 million.
Our Take
Inogen exited the second quarter of 2023 with better-than-expected earnings. The robust year-over-year uptick in rental revenues and domestic business-to-business sales was impressive.
Last month, Inogen entered into a definitive agreement to acquire Physio-Assist SAS with the aim of diversifying its Respiratory Product portfolio and expanding market opportunities in the rest of the world and potentially in the United States. During the quarter, Inogen introduced Rove 6 in the United States, a portable oxygen concentrator now with an eight-year expected service life. These developments look promising for the stock.
Yet, lower-than-expected revenues and dismal year-over-year top-line and bottom-line performances were worrying. A decline in international business-to-business and domestic direct-to-consumer sales was concerning as well. The contraction of adjusted gross margin was worrying. Inogen continued to incur operating losses for the second quarter, which did not bode well.
Zacks Rank and Stocks to Consider
Inogen currently has a Zacks Rank #4 (Sell).
Some better-ranked stocks in the broader medical space that have announced quarterly results are DexCom, Inc. DXCM, Integer Holdings Corporation ITGR and Intuitive Surgical, Inc. ISRG.
DexCom, carrying a Zacks Rank of 2 (Buy), reported second-quarter 2023 adjusted EPS of 34 cents, beating the Zacks Consensus Estimate by 54.6%. Revenues of $871.3 million outpaced the consensus mark by 4.1%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
DexCom has a long-term estimated growth rate of 42.9%. DXCM’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 28.8%.
Integer Holdings reported second-quarter 2023 adjusted EPS of $1.14, beating the Zacks Consensus Estimate by 15.2%. Revenues of $400 million surpassed the Zacks Consensus Estimate by 8.9%. It currently carries a Zacks Rank #2.
Integer Holdings has a long-term estimated growth rate of 12.1%. ITGR’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 8.4%.
Intuitive Surgical reported second-quarter 2023 adjusted EPS of $1.42, beating the Zacks Consensus Estimate by 7.6%. Revenues of $1.76 billion surpassed the Zacks Consensus Estimate by 1.4%. It currently carries a Zacks Rank #2.
Intuitive Surgical has a long-term estimated growth rate of 15.7%. ISRG’s earnings surpassed estimates in three of the trailing four quarters and missed once, the average surprise being 4.2%.
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