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Nevro (NVRO) Q2 Earnings Surpass Estimates, Revenues Lag
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Nevro Corp.’s (NVRO - Free Report) reported loss per share of 62 cents for the second quarter of 2021, narrower than the loss of $1.21 reported in the year-ago quarter. Loss per share was also narrower than the Zacks Consensus Estimate of a loss of 71 cents.
Revenues in Detail
Nevro registered revenues of $102.3 million in the second quarter, up 81.5% year over year. The figure but lagged the Zacks Consensus Estimate by 2.1%.
At constant exchange rate (CER), revenues improved 80% year over year. On a sequential basis, second-quarter revenues improved 15%.
Quarterly Highlights
In the quarter under review, international revenues were $17.3 million, up 222% year over year on a reported basis and 191% at CER. Despite this stupendous revenue uptick, the international business continued to be adversely impacted by pandemic-led issues, including both patient behavior and healthcare facility restrictions.
U.S. revenues for the quarter totaled $85 million, up 67% year over year. Total U.S. permanent implant procedures during the reported quarter increased 60% while trial procedures rose 45%. Despite an improvement in revenues, trial and permanent implant volumes were primarily affected by a persistent reluctance of new patients to seek interventional therapies for chronic pain compared with the pre-pandemic levels.
In the quarter under review, Nevro’s gross profit rose 98.5% to $69.9 million. Gross margin expanded 588 basis points (bps) to 68.4%.
Sales, general & administrative expenses rose 22.8% to $73.9 million. Research and development expenses went up 13.6% year over year to $11.9 million. Total operating expenses of $85.7 million increased 21.4% year over year.
Operating loss in the reported quarter totaled $15.8 million compared with the total operating loss of $35.4 million in the year-ago quarter.
Financial Position
Nevro exited the second quarter of 2021 with cash and cash equivalents, and short-term investments of $397.5 million compared with $576.4 million at the end of the first quarter. Total debt (including short-term debt) at the end of the second quarter of 2021 was $146.4 million compared with $315 million at the end of the first quarter.
Guidance
Due to continued pandemic-led uncertainties, Nevro provided its financial outlook for the third quarter of 2021 only and withdrew its previously provided full-year guidance.
The company projects third-quarter 2021 global revenues in the range of $90-$93million, indicating a 14-17% decrease from the comparable numbers reported in the prior year. The Zacks Consensus Estimate for the same is pegged at $116.8 million.
Our Take
Nevro exited the second quarter of 2021 with narrower-than-expected loss. Robust worldwide revenues, driven by impressive domestic and international performances, are encouraging. Uptick in permanent implant and trial procedures augurs well for the company. The FDA’s approval of 10 kHz High Frequency Spinal Cord Stimulation therapy for the treatment of chronic pain associated with Painful Diabetic Neuropathy buoys investor optimism. Full U.S. market launch of Omnia powered by HFX Connect and the new Trial Stimulator Module is also appreciative. Gross margin expansion bodes well for the stock.
On the flip side, lower-than-expected revenues in the reported quarter are disappointing. Continued pandemic-borne adversities and unpredictability are concerning as well. Although the company posted a narrower year-over-year operating loss, this continuous loss trend is worrisome.
Zacks Rank and Key Picks
Nevro currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the broader medical space that have announced their quarterly results are Encompass Health Corporation (EHC - Free Report) , West Pharmaceutical Services, Inc. (WST - Free Report) and Bio-Rad Laboratories, Inc. (BIO - Free Report) .
Encompass Health, carrying a Zacks Rank #2 (Buy), reported second-quarter 2021 adjusted EPS of $1.17, which beat the Zacks Consensus Estimate by 15.8%. Second-quarter revenues of $1.3 billion outpaced the consensus mark by 1.5%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
West Pharmaceutical reported second-quarter 2021 adjusted EPS of $2.46, which surpassed the Zacks Consensus Estimate by 41.4%. Second-quarter revenues of $723.6 million outpaced the Zacks Consensus Estimate by 8.7%. It currently carries a Zacks Rank #2.
Bio-Rad reported second-quarter 2021 adjusted EPS of $3.54, surpassing the Zacks Consensus Estimate by 86.3%. Revenues of $715.9 million surpassed the Zacks Consensus Estimate by 17.3%. It currently sports a Zacks Rank #1.
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Nevro (NVRO) Q2 Earnings Surpass Estimates, Revenues Lag
Nevro Corp.’s (NVRO - Free Report) reported loss per share of 62 cents for the second quarter of 2021, narrower than the loss of $1.21 reported in the year-ago quarter. Loss per share was also narrower than the Zacks Consensus Estimate of a loss of 71 cents.
Revenues in Detail
Nevro registered revenues of $102.3 million in the second quarter, up 81.5% year over year. The figure but lagged the Zacks Consensus Estimate by 2.1%.
At constant exchange rate (CER), revenues improved 80% year over year. On a sequential basis, second-quarter revenues improved 15%.
Quarterly Highlights
In the quarter under review, international revenues were $17.3 million, up 222% year over year on a reported basis and 191% at CER. Despite this stupendous revenue uptick, the international business continued to be adversely impacted by pandemic-led issues, including both patient behavior and healthcare facility restrictions.
U.S. revenues for the quarter totaled $85 million, up 67% year over year. Total U.S. permanent implant procedures during the reported quarter increased 60% while trial procedures rose 45%. Despite an improvement in revenues, trial and permanent implant volumes were primarily affected by a persistent reluctance of new patients to seek interventional therapies for chronic pain compared with the pre-pandemic levels.
Nevro Corp. Price, Consensus and EPS Surprise
Nevro Corp. price-consensus-eps-surprise-chart | Nevro Corp. Quote
Margin Trend
In the quarter under review, Nevro’s gross profit rose 98.5% to $69.9 million. Gross margin expanded 588 basis points (bps) to 68.4%.
Sales, general & administrative expenses rose 22.8% to $73.9 million. Research and development expenses went up 13.6% year over year to $11.9 million. Total operating expenses of $85.7 million increased 21.4% year over year.
Operating loss in the reported quarter totaled $15.8 million compared with the total operating loss of $35.4 million in the year-ago quarter.
Financial Position
Nevro exited the second quarter of 2021 with cash and cash equivalents, and short-term investments of $397.5 million compared with $576.4 million at the end of the first quarter. Total debt (including short-term debt) at the end of the second quarter of 2021 was $146.4 million compared with $315 million at the end of the first quarter.
Guidance
Due to continued pandemic-led uncertainties, Nevro provided its financial outlook for the third quarter of 2021 only and withdrew its previously provided full-year guidance.
The company projects third-quarter 2021 global revenues in the range of $90-$93million, indicating a 14-17% decrease from the comparable numbers reported in the prior year. The Zacks Consensus Estimate for the same is pegged at $116.8 million.
Our Take
Nevro exited the second quarter of 2021 with narrower-than-expected loss. Robust worldwide revenues, driven by impressive domestic and international performances, are encouraging. Uptick in permanent implant and trial procedures augurs well for the company. The FDA’s approval of 10 kHz High Frequency Spinal Cord Stimulation therapy for the treatment of chronic pain associated with Painful Diabetic Neuropathy buoys investor optimism. Full U.S. market launch of Omnia powered by HFX Connect and the new Trial Stimulator Module is also appreciative. Gross margin expansion bodes well for the stock.
On the flip side, lower-than-expected revenues in the reported quarter are disappointing. Continued pandemic-borne adversities and unpredictability are concerning as well. Although the company posted a narrower year-over-year operating loss, this continuous loss trend is worrisome.
Zacks Rank and Key Picks
Nevro currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the broader medical space that have announced their quarterly results are Encompass Health Corporation (EHC - Free Report) , West Pharmaceutical Services, Inc. (WST - Free Report) and Bio-Rad Laboratories, Inc. (BIO - Free Report) .
Encompass Health, carrying a Zacks Rank #2 (Buy), reported second-quarter 2021 adjusted EPS of $1.17, which beat the Zacks Consensus Estimate by 15.8%. Second-quarter revenues of $1.3 billion outpaced the consensus mark by 1.5%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
West Pharmaceutical reported second-quarter 2021 adjusted EPS of $2.46, which surpassed the Zacks Consensus Estimate by 41.4%. Second-quarter revenues of $723.6 million outpaced the Zacks Consensus Estimate by 8.7%. It currently carries a Zacks Rank #2.
Bio-Rad reported second-quarter 2021 adjusted EPS of $3.54, surpassing the Zacks Consensus Estimate by 86.3%. Revenues of $715.9 million surpassed the Zacks Consensus Estimate by 17.3%. It currently sports a Zacks Rank #1.