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Inogen (INGN) Q3 Earnings and Revenues Beat Estimates
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Inogen, Inc. (INGN - Free Report) incurred an adjusted loss per share of 18 cents for third-quarter 2022 against the adjusted earnings per share (EPS) of 63 cents in the year-ago period. The figure was narrower than the Zacks Consensus Estimate of a loss of 41 cents per share.
Our projection of adjusted loss per share was 64 cents.
GAAP loss per share for the quarter was 42 cents against the year-earlier EPS of 53 cents.
Revenues in Detail
Inogen registered revenues of $105.4 million for the third quarter, up 13.2% year over year. The figure surpassed the Zacks Consensus Estimate by 8%.
On a constant-currency basis, total revenue for the reported quarter increased by 14.5%.
The third-quarter revenue compares to our estimate of $97.1 million.
Per management, the year-over-year uptick in the top line was primarily driven by higher domestic business-to-business sales and continued strength in the rental channel. However, this was partially offset by lower international business-to-business and direct-to-consumer sales.
Segmental Details
Inogen derives revenues from two sources — rental and sales.
Rental revenues for the reported quarter grossed $14.7 million, up 21.3% from the year-ago period. This figure compares to our Rental revenues’ Q3 projection of $12.9 million.
Sales revenues were $90.7 million, up 11.9% from the prior-year quarter. This figure compares to our Sales revenues’ Q3 projection of $84.2 million.
Revenues by Region & Category
Domestic business-to-business sales for third-quarter 2022 amounted to $42.5 million, up 86.7% on a year-over-year basis.
International business-to-business sales for the reported quarter amounted to $15.1 million, down 30.9% year over year on a reported basis. This primarily resulted from the limited ability to ship internationally due to the expiration of the EU MDD (Medical Devices Directive) certificates.
Domestic direct-to-consumer sales decreased 9.1% year over year to $33 million for the quarter, partially due to higher Medicare reimbursement rates.
These compare to our projections of Q3 revenues of $27.3 million, $21.9 million and $35 million, respectively.
For the quarter under review, Inogen’s gross profit fell 10.3% from the year-ago period to $42.8 million. Gross margin contracted a huge 1061 basis points to 40.6%.
We had projected 40.8% of gross margin for Q3.
Sales and marketing expenses rose 19.2% from the year-ago quarter to $33.7 million. Research and development expenses went up 22% year over year to $4.6 million, while general and administrative expenses surged 59.6% to $14.8 million. Operating expenses of $53.1 million increased 28.5% year over year.
Operating loss totaled $10.3 million against the prior-year quarter’s operating profit of $6.4 million.
Financial Position
Inogen exited third-quarter 2022 with cash and cash equivalents of $209.6 million compared with $223.6 million at the end of the second quarter.
The company ended the quarter with no debt on its balance sheet.
Cumulative net cash used in operating activities at the end of third-quarter 2022 was $22.1 million against net cash provided by operating activities of $17.1 million a year ago.
Guidance
Inogen has provided its outlook for the fourth quarter of 2022.
The company expects total revenues for the quarter to be in the range of $87 million-$92 million, reflecting 14-20% growth year over year. The Zacks Consensus Estimate for the same is currently pegged at $92.8 million.
Our Take
Inogen exited the third quarter of 2022 with better-than-expected results. The robust year-over-year uptick in overall top line as well as rental and sales revenues are impressive. Strength in domestic business-to-business is encouraging. During the earnings call, management confirmed that it is making impressive progress against its subscriber strategy, which delivered strong growth and contributed to solid performance in the third quarter. This raises our optimism about the stock.
Yet, dismal year-over-year bottom-line performances are worrying. A decline in international business-to-business sales with lower domestic direct-to-consumer sales for the quarter is concerning as well. The contraction of gross margin is worrying. Inogen continued to incur operating losses for the third quarter, which does not bode well. Sustained supply-chain headwinds and cost inflation are other areas of concern.
Zacks Rank and Key Picks
Inogen currently has a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader medical space that have announced quarterly results are Elevance Health Inc. (ELV - Free Report) , Medpace Holdings, Inc. (MEDP - Free Report) and Merit Medical Systems, Inc. (MMSI - Free Report) .
Elevance Health, carrying a Zacks Rank #2 (Buy), reported third-quarter 2022 adjusted EPS of $7.53, which beat the Zacks Consensus Estimate by 6.1%. Revenues of $39.63 billion outpaced the consensus mark by 1.3%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Elevance Health has an estimated long-term growth rate of 12%. ELV’s earnings surpassed estimates in all the trailing four quarters, the average being 4.1%.
Medpace Holdings, sporting a Zacks Rank #1, reported third-quarter 2022 EPS of $2.05, which beat the Zacks Consensus Estimate by 39.5%. Revenues of $383.7 million outpaced the consensus mark by 8.1%.
Medpace Holdings has an estimated growth rate of 44.9% for the full-year 2022. MEDP’s earnings surpassed estimates in all the trailing four quarters, the average being 22%.
Merit Medical, flaunting a Zacks Rank #1, reported third-quarter 2022 adjusted EPS of 64 cents, which beat the Zacks Consensus Estimate by 20.8%. Revenues of $287.2 million outpaced the consensus mark by 5.2%.
Merit Medical has an estimated long-term growth rate of 11%. MMSI’s earnings surpassed estimates in all the trailing four quarters, the average being 25.4%.
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Inogen (INGN) Q3 Earnings and Revenues Beat Estimates
Inogen, Inc. (INGN - Free Report) incurred an adjusted loss per share of 18 cents for third-quarter 2022 against the adjusted earnings per share (EPS) of 63 cents in the year-ago period. The figure was narrower than the Zacks Consensus Estimate of a loss of 41 cents per share.
Our projection of adjusted loss per share was 64 cents.
GAAP loss per share for the quarter was 42 cents against the year-earlier EPS of 53 cents.
Revenues in Detail
Inogen registered revenues of $105.4 million for the third quarter, up 13.2% year over year. The figure surpassed the Zacks Consensus Estimate by 8%.
On a constant-currency basis, total revenue for the reported quarter increased by 14.5%.
The third-quarter revenue compares to our estimate of $97.1 million.
Per management, the year-over-year uptick in the top line was primarily driven by higher domestic business-to-business sales and continued strength in the rental channel. However, this was partially offset by lower international business-to-business and direct-to-consumer sales.
Segmental Details
Inogen derives revenues from two sources — rental and sales.
Rental revenues for the reported quarter grossed $14.7 million, up 21.3% from the year-ago period. This figure compares to our Rental revenues’ Q3 projection of $12.9 million.
Sales revenues were $90.7 million, up 11.9% from the prior-year quarter. This figure compares to our Sales revenues’ Q3 projection of $84.2 million.
Revenues by Region & Category
Domestic business-to-business sales for third-quarter 2022 amounted to $42.5 million, up 86.7% on a year-over-year basis.
International business-to-business sales for the reported quarter amounted to $15.1 million, down 30.9% year over year on a reported basis. This primarily resulted from the limited ability to ship internationally due to the expiration of the EU MDD (Medical Devices Directive) certificates.
Domestic direct-to-consumer sales decreased 9.1% year over year to $33 million for the quarter, partially due to higher Medicare reimbursement rates.
These compare to our projections of Q3 revenues of $27.3 million, $21.9 million and $35 million, respectively.
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 gross profit fell 10.3% from the year-ago period to $42.8 million. Gross margin contracted a huge 1061 basis points to 40.6%.
We had projected 40.8% of gross margin for Q3.
Sales and marketing expenses rose 19.2% from the year-ago quarter to $33.7 million. Research and development expenses went up 22% year over year to $4.6 million, while general and administrative expenses surged 59.6% to $14.8 million. Operating expenses of $53.1 million increased 28.5% year over year.
Operating loss totaled $10.3 million against the prior-year quarter’s operating profit of $6.4 million.
Financial Position
Inogen exited third-quarter 2022 with cash and cash equivalents of $209.6 million compared with $223.6 million at the end of the second quarter.
The company ended the quarter with no debt on its balance sheet.
Cumulative net cash used in operating activities at the end of third-quarter 2022 was $22.1 million against net cash provided by operating activities of $17.1 million a year ago.
Guidance
Inogen has provided its outlook for the fourth quarter of 2022.
The company expects total revenues for the quarter to be in the range of $87 million-$92 million, reflecting 14-20% growth year over year. The Zacks Consensus Estimate for the same is currently pegged at $92.8 million.
Our Take
Inogen exited the third quarter of 2022 with better-than-expected results. The robust year-over-year uptick in overall top line as well as rental and sales revenues are impressive. Strength in domestic business-to-business is encouraging. During the earnings call, management confirmed that it is making impressive progress against its subscriber strategy, which delivered strong growth and contributed to solid performance in the third quarter. This raises our optimism about the stock.
Yet, dismal year-over-year bottom-line performances are worrying. A decline in international business-to-business sales with lower domestic direct-to-consumer sales for the quarter is concerning as well. The contraction of gross margin is worrying. Inogen continued to incur operating losses for the third quarter, which does not bode well. Sustained supply-chain headwinds and cost inflation are other areas of concern.
Zacks Rank and Key Picks
Inogen currently has a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader medical space that have announced quarterly results are Elevance Health Inc. (ELV - Free Report) , Medpace Holdings, Inc. (MEDP - Free Report) and Merit Medical Systems, Inc. (MMSI - Free Report) .
Elevance Health, carrying a Zacks Rank #2 (Buy), reported third-quarter 2022 adjusted EPS of $7.53, which beat the Zacks Consensus Estimate by 6.1%. Revenues of $39.63 billion outpaced the consensus mark by 1.3%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Elevance Health has an estimated long-term growth rate of 12%. ELV’s earnings surpassed estimates in all the trailing four quarters, the average being 4.1%.
Medpace Holdings, sporting a Zacks Rank #1, reported third-quarter 2022 EPS of $2.05, which beat the Zacks Consensus Estimate by 39.5%. Revenues of $383.7 million outpaced the consensus mark by 8.1%.
Medpace Holdings has an estimated growth rate of 44.9% for the full-year 2022. MEDP’s earnings surpassed estimates in all the trailing four quarters, the average being 22%.
Merit Medical, flaunting a Zacks Rank #1, reported third-quarter 2022 adjusted EPS of 64 cents, which beat the Zacks Consensus Estimate by 20.8%. Revenues of $287.2 million outpaced the consensus mark by 5.2%.
Merit Medical has an estimated long-term growth rate of 11%. MMSI’s earnings surpassed estimates in all the trailing four quarters, the average being 25.4%.