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Nevro (NVRO) Q1 Earnings and Revenues Surpass Estimates
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Nevro Corp. (NVRO - Free Report) reported a loss per share of 98 cents for the first quarter of 2023, flat compared with the year-ago quarter. However, the loss per share was narrower than the Zacks Consensus Estimate of a loss of $1.06.
Our projection of loss per share was $1.07.
Revenues in Detail
Nevro registered worldwide revenues of $96.3 million in the first quarter, up 9.7% year over year on a reported basis. The figure exceeded the Zacks Consensus Estimate by 1.1%.
At constant exchange rate (CER), revenues were up 11% year over year.
The first-quarter revenue compares to our estimate of $95.7 million.
Worldwide revenues in the reported quarter include approximately $15.6 million of Painful Diabetic Neuropathy (PDN) indication sales, representing 16% of worldwide permanent implant procedures.
Quarterly Highlights
In the quarter under review, international revenues were $14 million, down 4.1% year over year on a reported basis. However, international revenues improved 1% at CER.
This figure compares to our first-quarter projection of $13.8 million.
U.S. revenues for the quarter totaled $82.3 million, up 12.4% year over year. This figure compares to our first-quarter projection of $81.8 million.
Total U.S. permanent implant procedures increased 19%, while U.S. trial procedures increased 9%. U.S. PDN trial procedures surged 88% from the prior-year quarter.
In the quarter under review, Nevro’s gross profit rose 9.4% to $64.6 million. However, the gross margin contracted 18 basis points to 67.1%.
Sales, general & administrative expenses increased 8.7% to $86.2 million. Research and development expenses went up 17.7% year over year to $14.8 million. Total operating expenses of $100.9 million increased 9.9% year over year.
The total operating loss in the reported quarter totaled $36.3 million compared with a total operating loss of $32.8 million in the year-ago quarter.
Financial Position
Nevro exited the first quarter of 2023 with cash and cash equivalents and short-term investments of $341.8 million compared with $374.4 million at the end of 2022. Long-term debt at the end of first-quarter 2023 was $187.2 million compared with $186.9 million at the end of 2022.
As of Mar 31, 2023, 36,376,936 shares were issued and 35,694,020 shares were outstanding.
Guidance
Nevro has provided its financial outlook for the second quarter and reiterated its financial outlook for 2023.
For the second quarter, Nevro expects its worldwide revenues to be in the range of $110 million-$112 million, reflecting growth of 6-8% year over year at CER. The Zacks Consensus Estimate for the same is pegged at $110.4 million.
The company continues to expect its 2023 worldwide revenues in the range of $445 million to $455 million, reflecting reported growth of 10-12% from the comparable figure of 2022 both on a reported basis and at CER. The Zacks Consensus Estimate for the same is pegged at $450.5 million.
Full-year 2023 worldwide revenue guidance continues to include approximately $75 million-$85 million of PDN indication sales, reflecting reported growth of 56-77% from the comparable reported figure of 2022.
Our Take
Nevro exited the first quarter of 2023 with better-than-expected results. An improvement in overall top-line results and robust domestic revenues are impressive. An uptick in total U.S. permanent implant procedures and U.S. trial procedures is promising. The improvement in U.S. PDN trial procedures is also encouraging.
In March, Nevro initiated the U.S. full market launch of its Senza HFX iQ spinal cord stimulation (SCS) system, following the completion of a successful limited market release. The system is currently the only SCS System that uses artificial intelligence to optimize and maintain pain relief using individual patient responses. Positive feedback from physicians and patients regarding the ability to deliver personalized pain relief using Nevro’s big data-backed HFX algorithm raises optimism about the stock.
On the flip side, dismal bottom-line performances are disappointing. Lower international revenues on a reported basis are discouraging as well. The sustained operating loss incurred by Nevro also raises our apprehension. The contraction of the gross margin also does not bode well. Nevro continues to face an unstable business environment due to inflation and supply-chain pressures, which further raises our apprehension.
Zacks Rank and Other Key Picks
Nevro currently carries a Zacks Rank #2 (Buy).
A few other top-ranked stocks in the broader medical space that have announced quarterly results are Edwards Lifesciences Corporation (EW - Free Report) , Intuitive Surgical, Inc. (ISRG - Free Report) and Johnson & Johnson (JNJ - Free Report) .
Edwards Lifesciences, carrying a Zacks Rank #2, reported first-quarter 2023 adjusted earnings per share (EPS) of 62 cents, beating the Zacks Consensus Estimate by 1.6%. Revenues of $1.46 billion outpaced the consensus mark by 4.7%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Edwards Lifesciences has a long-term estimated growth rate of 6.8%. EW’s earnings surpassed estimates in two of the trailing four quarters, missed the same in one and broke even in the other, the average being 1.2%.
Intuitive Surgical, having a Zacks Rank #2, reported first-quarter 2023 adjusted EPS of $1.23, which beat the Zacks Consensus Estimate by 3.4%. Revenues of $1.70 billion outpaced the consensus mark by 6.9%.
Intuitive Surgical has a long-term estimated growth rate of 13%. ISRG’s earnings surpassed estimates in two of the trailing four quarters and missed the same in the other two, the average being 1.9%.
Johnson & Johnson reported first-quarter 2023 adjusted earnings of $2.68 per share, beating the Zacks Consensus Estimate by 6.8%. Revenues of $24.75 billion surpassed the Zacks Consensus Estimate by 5%. It currently carries a Zacks Rank #2.
Johnson & Johnson has a long-term estimated growth rate of 5.5%. JNJ’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 3.9%.
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Nevro (NVRO) Q1 Earnings and Revenues Surpass Estimates
Nevro Corp. (NVRO - Free Report) reported a loss per share of 98 cents for the first quarter of 2023, flat compared with the year-ago quarter. However, the loss per share was narrower than the Zacks Consensus Estimate of a loss of $1.06.
Our projection of loss per share was $1.07.
Revenues in Detail
Nevro registered worldwide revenues of $96.3 million in the first quarter, up 9.7% year over year on a reported basis. The figure exceeded the Zacks Consensus Estimate by 1.1%.
At constant exchange rate (CER), revenues were up 11% year over year.
The first-quarter revenue compares to our estimate of $95.7 million.
Worldwide revenues in the reported quarter include approximately $15.6 million of Painful Diabetic Neuropathy (PDN) indication sales, representing 16% of worldwide permanent implant procedures.
Quarterly Highlights
In the quarter under review, international revenues were $14 million, down 4.1% year over year on a reported basis. However, international revenues improved 1% at CER.
This figure compares to our first-quarter projection of $13.8 million.
U.S. revenues for the quarter totaled $82.3 million, up 12.4% year over year. This figure compares to our first-quarter projection of $81.8 million.
Total U.S. permanent implant procedures increased 19%, while U.S. trial procedures increased 9%. U.S. PDN trial procedures surged 88% from the prior-year quarter.
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 9.4% to $64.6 million. However, the gross margin contracted 18 basis points to 67.1%.
Sales, general & administrative expenses increased 8.7% to $86.2 million. Research and development expenses went up 17.7% year over year to $14.8 million. Total operating expenses of $100.9 million increased 9.9% year over year.
The total operating loss in the reported quarter totaled $36.3 million compared with a total operating loss of $32.8 million in the year-ago quarter.
Financial Position
Nevro exited the first quarter of 2023 with cash and cash equivalents and short-term investments of $341.8 million compared with $374.4 million at the end of 2022. Long-term debt at the end of first-quarter 2023 was $187.2 million compared with $186.9 million at the end of 2022.
As of Mar 31, 2023, 36,376,936 shares were issued and 35,694,020 shares were outstanding.
Guidance
Nevro has provided its financial outlook for the second quarter and reiterated its financial outlook for 2023.
For the second quarter, Nevro expects its worldwide revenues to be in the range of $110 million-$112 million, reflecting growth of 6-8% year over year at CER. The Zacks Consensus Estimate for the same is pegged at $110.4 million.
The company continues to expect its 2023 worldwide revenues in the range of $445 million to $455 million, reflecting reported growth of 10-12% from the comparable figure of 2022 both on a reported basis and at CER. The Zacks Consensus Estimate for the same is pegged at $450.5 million.
Full-year 2023 worldwide revenue guidance continues to include approximately $75 million-$85 million of PDN indication sales, reflecting reported growth of 56-77% from the comparable reported figure of 2022.
Our Take
Nevro exited the first quarter of 2023 with better-than-expected results. An improvement in overall top-line results and robust domestic revenues are impressive. An uptick in total U.S. permanent implant procedures and U.S. trial procedures is promising. The improvement in U.S. PDN trial procedures is also encouraging.
In March, Nevro initiated the U.S. full market launch of its Senza HFX iQ spinal cord stimulation (SCS) system, following the completion of a successful limited market release. The system is currently the only SCS System that uses artificial intelligence to optimize and maintain pain relief using individual patient responses. Positive feedback from physicians and patients regarding the ability to deliver personalized pain relief using Nevro’s big data-backed HFX algorithm raises optimism about the stock.
On the flip side, dismal bottom-line performances are disappointing. Lower international revenues on a reported basis are discouraging as well. The sustained operating loss incurred by Nevro also raises our apprehension. The contraction of the gross margin also does not bode well. Nevro continues to face an unstable business environment due to inflation and supply-chain pressures, which further raises our apprehension.
Zacks Rank and Other Key Picks
Nevro currently carries a Zacks Rank #2 (Buy).
A few other top-ranked stocks in the broader medical space that have announced quarterly results are Edwards Lifesciences Corporation (EW - Free Report) , Intuitive Surgical, Inc. (ISRG - Free Report) and Johnson & Johnson (JNJ - Free Report) .
Edwards Lifesciences, carrying a Zacks Rank #2, reported first-quarter 2023 adjusted earnings per share (EPS) of 62 cents, beating the Zacks Consensus Estimate by 1.6%. Revenues of $1.46 billion outpaced the consensus mark by 4.7%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Edwards Lifesciences has a long-term estimated growth rate of 6.8%. EW’s earnings surpassed estimates in two of the trailing four quarters, missed the same in one and broke even in the other, the average being 1.2%.
Intuitive Surgical, having a Zacks Rank #2, reported first-quarter 2023 adjusted EPS of $1.23, which beat the Zacks Consensus Estimate by 3.4%. Revenues of $1.70 billion outpaced the consensus mark by 6.9%.
Intuitive Surgical has a long-term estimated growth rate of 13%. ISRG’s earnings surpassed estimates in two of the trailing four quarters and missed the same in the other two, the average being 1.9%.
Johnson & Johnson reported first-quarter 2023 adjusted earnings of $2.68 per share, beating the Zacks Consensus Estimate by 6.8%. Revenues of $24.75 billion surpassed the Zacks Consensus Estimate by 5%. It currently carries a Zacks Rank #2.
Johnson & Johnson has a long-term estimated growth rate of 5.5%. JNJ’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 3.9%.