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Inogen (INGN) Q4 Earnings Miss Estimates, Gross Margin Improves
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Inogen, Inc. (INGN - Free Report) reported an adjusted loss per share of 83 cents for fourth-quarter 2023, which is wider than the adjusted loss per share of 57 cents in the year-ago period. The Zacks Consensus Estimate was pegged at a loss of 65 cents per share.
GAAP loss per share for the quarter was $1.14, narrower than the year-ago loss of $2.47 per share.
Revenues in Detail
Inogen registered revenues of $75.9 million for the fourth quarter, down 13.8% year over year. The figure missed the Zacks Consensus Estimate by 2.8%.
On a constant-currency basis, total revenues for the reported quarter decreased 14.3%.
Per management, the year-over-year decrease in the top line primarily resulted from lower domestic business-to-business sales and lower direct-to-consumer revenues. However, this was partially offset by strong growth in rental and international business-to-business sales.
Full-Year Results
Inogen recorded total revenues of $315.7 million in 2023, down 16.3% year over year. In 2023, the adjusted loss per share was $2.08 compared with $1.15 in the prior-year quarter.
Segmental Details
Inogen derives revenues from two sources — rental and sales.
Rental revenues for the reported quarter grossed $16.5 million, up 10.6% from the year-ago period. Per management, an increase in the total number of rental patients on service resulted in the upside.
Sales revenues were $59.4 million, down 18.8% from the prior-year quarter.
Revenues by Region & Category
Domestic business-to-business sales for fourth-quarter 2023 amounted to $18.1 million, down 33.6% on a year-over-year basis.
International business-to-business sales for the reported quarter amounted to $21.5 million, up 4.0% year over year on a reported basis and 2.6% on a constant-currency basis.
Domestic direct-to-consumer sales decreased 21.6% year over year to $19.8 million for the fourth quarter.
Margins
For the quarter under review, Inogen’s gross profit fell 4.5% from the year-ago period to $28.2 million. However, the total gross margin expanded 360 basis points to 37.1%.
Sales and marketing expenses decreased 10.3% from the year-ago quarter to $25.7 million, while Research and development expenses increased 13.1% year over year to $6.7 million. General and administrative expenses were $24.7 million compared with $1.3 million in the year-ago quarter. The significant increase is likely due to the Physio-Assist acquisition, which was completed in September 2023.
Total operating expenses of $57.1 million decreased 35.0% year over year. The decrease was primarily due to the loss on disposal of an intangible asset of $52.2 million in the prior-year period, partially offset by the change in fair value of earn-out liabilities and certain onetime costs related to CEO transition and bad debt expense.
Total operating loss totaled $29.0 million compared with the prior-year quarter’s operating loss of $58.5 million.
Financial Position
Inogen exited fourth-quarter 2023 with cash and cash equivalents of $128.5 million compared with $138 million at the third-quarter end.
The company ended the quarter with no debt on its balance sheet.
Cumulative net cash used in operating activities at the end of fourth-quarter 2023 was $3.2 million compared with $37.5 million in the year-ago period.
Guidance
Inogen has provided guidance for the first quarter of 2024.
For the first quarter of 2024, the company expects its total revenues between $73 million and $74 million. The Zacks Consensus Estimate currently stands at $80.8 million.
Our Take
Inogen exited the fourth quarter of 2023 with better-than-expected revenues. The robust year-over-year uptick in rental revenues and international business-to-business sales were impressive. The expansion of the adjusted gross margin also bodes well.
In September 2023, Inogen completed the acquisition of Physio-Assist SAS, which expanded its global respiratory care presence by addressing a sizeable, growing and underserved airway clearance market opportunity.
On its fourth-quarter earnings call, management informed about the company’s pursuit of regulatory clearance of PhysioAssist to introduce it to the markets of the United States. The company also observed that its recent sales were in part driven by the full launch of Rove 6 in Europe, which is progressing well with its expectations.
Yet, wider-than-expected loss per share and dismal year-over-year top-line and bottom-line performances were worrying. A decline in domestic business-to-business and domestic direct-to-consumer sales was concerning as well. Inogen continued to incur operating losses for the fourth quarter, which did not bode well.
Some better-ranked stocks in the broader medical space that have announced quarterly results are Cencora, Inc. (COR - Free Report) , Elevance Health, Inc. (ELV - Free Report) and Cardinal Health, Inc. (CAH - Free Report) .
Cencora, carrying a Zacks Rank of 2 (Buy), reported first-quarter fiscal 2024 adjusted EPS of $3.28, beating the Zacks Consensus Estimate by 14.7%. Revenues of $72.25 billion outpaced the consensus mark by 5%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Cencora has a long-term estimated growth rate of 8.6%. COR’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 6.7%.
Elevance Health reported fourth-quarter 2023 adjusted EPS of $5.62, beating the Zacks Consensus Estimate by 1.3%. Revenues of $42.45 billion outpaced the consensus mark by 1.5%. It currently carries a Zacks Rank #2.
Elevance Health has a long-term estimated growth rate of 12%. ELV’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 3.1%.
Cardinal Health reported second-quarter fiscal 2024 adjusted EPS of $1.82, beating the Zacks Consensus Estimate by 16.7%. Revenues of $57.45 billion surpassed the Zacks Consensus Estimate by 1.1%. It currently carries a Zacks Rank #2.
Cardinal Health has a long-term estimated growth rate of 15.9%. CAH’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 15.6%.
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Inogen (INGN) Q4 Earnings Miss Estimates, Gross Margin Improves
Inogen, Inc. (INGN - Free Report) reported an adjusted loss per share of 83 cents for fourth-quarter 2023, which is wider than the adjusted loss per share of 57 cents in the year-ago period. The Zacks Consensus Estimate was pegged at a loss of 65 cents per share.
GAAP loss per share for the quarter was $1.14, narrower than the year-ago loss of $2.47 per share.
Revenues in Detail
Inogen registered revenues of $75.9 million for the fourth quarter, down 13.8% year over year. The figure missed the Zacks Consensus Estimate by 2.8%.
On a constant-currency basis, total revenues for the reported quarter decreased 14.3%.
Per management, the year-over-year decrease in the top line primarily resulted from lower domestic business-to-business sales and lower direct-to-consumer revenues. However, this was partially offset by strong growth in rental and international business-to-business sales.
Full-Year Results
Inogen recorded total revenues of $315.7 million in 2023, down 16.3% year over year. In 2023, the adjusted loss per share was $2.08 compared with $1.15 in the prior-year quarter.
Segmental Details
Inogen derives revenues from two sources — rental and sales.
Rental revenues for the reported quarter grossed $16.5 million, up 10.6% from the year-ago period. Per management, an increase in the total number of rental patients on service resulted in the upside.
Sales revenues were $59.4 million, down 18.8% from the prior-year quarter.
Revenues by Region & Category
Domestic business-to-business sales for fourth-quarter 2023 amounted to $18.1 million, down 33.6% on a year-over-year basis.
International business-to-business sales for the reported quarter amounted to $21.5 million, up 4.0% year over year on a reported basis and 2.6% on a constant-currency basis.
Domestic direct-to-consumer sales decreased 21.6% year over year to $19.8 million for the fourth quarter.
Margins
For the quarter under review, Inogen’s gross profit fell 4.5% from the year-ago period to $28.2 million. However, the total gross margin expanded 360 basis points to 37.1%.
Sales and marketing expenses decreased 10.3% from the year-ago quarter to $25.7 million, while Research and development expenses increased 13.1% year over year to $6.7 million. General and administrative expenses were $24.7 million compared with $1.3 million in the year-ago quarter. The significant increase is likely due to the Physio-Assist acquisition, which was completed in September 2023.
Total operating expenses of $57.1 million decreased 35.0% year over year. The decrease was primarily due to the loss on disposal of an intangible asset of $52.2 million in the prior-year period, partially offset by the change in fair value of earn-out liabilities and certain onetime costs related to CEO transition and bad debt expense.
Total operating loss totaled $29.0 million compared with the prior-year quarter’s operating loss of $58.5 million.
Financial Position
Inogen exited fourth-quarter 2023 with cash and cash equivalents of $128.5 million compared with $138 million at the third-quarter end.
The company ended the quarter with no debt on its balance sheet.
Cumulative net cash used in operating activities at the end of fourth-quarter 2023 was $3.2 million compared with $37.5 million in the year-ago period.
Guidance
Inogen has provided guidance for the first quarter of 2024.
For the first quarter of 2024, the company expects its total revenues between $73 million and $74 million. The Zacks Consensus Estimate currently stands at $80.8 million.
Our Take
Inogen exited the fourth quarter of 2023 with better-than-expected revenues. The robust year-over-year uptick in rental revenues and international business-to-business sales were impressive. The expansion of the adjusted gross margin also bodes well.
In September 2023, Inogen completed the acquisition of Physio-Assist SAS, which expanded its global respiratory care presence by addressing a sizeable, growing and underserved airway clearance market opportunity.
On its fourth-quarter earnings call, management informed about the company’s pursuit of regulatory clearance of PhysioAssist to introduce it to the markets of the United States. The company also observed that its recent sales were in part driven by the full launch of Rove 6 in Europe, which is progressing well with its expectations.
Yet, wider-than-expected loss per share and dismal year-over-year top-line and bottom-line performances were worrying. A decline in domestic business-to-business and domestic direct-to-consumer sales was concerning as well. Inogen continued to incur operating losses for the fourth quarter, which did not bode well.
Inogen, Inc Price, Consensus and EPS Surprise
Inogen, Inc price-consensus-eps-surprise-chart | Inogen, Inc Quote
Zacks Rank and Key Picks
Inogen currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader medical space that have announced quarterly results are Cencora, Inc. (COR - Free Report) , Elevance Health, Inc. (ELV - Free Report) and Cardinal Health, Inc. (CAH - Free Report) .
Cencora, carrying a Zacks Rank of 2 (Buy), reported first-quarter fiscal 2024 adjusted EPS of $3.28, beating the Zacks Consensus Estimate by 14.7%. Revenues of $72.25 billion outpaced the consensus mark by 5%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Cencora has a long-term estimated growth rate of 8.6%. COR’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 6.7%.
Elevance Health reported fourth-quarter 2023 adjusted EPS of $5.62, beating the Zacks Consensus Estimate by 1.3%. Revenues of $42.45 billion outpaced the consensus mark by 1.5%. It currently carries a Zacks Rank #2.
Elevance Health has a long-term estimated growth rate of 12%. ELV’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 3.1%.
Cardinal Health reported second-quarter fiscal 2024 adjusted EPS of $1.82, beating the Zacks Consensus Estimate by 16.7%. Revenues of $57.45 billion surpassed the Zacks Consensus Estimate by 1.1%. It currently carries a Zacks Rank #2.
Cardinal Health has a long-term estimated growth rate of 15.9%. CAH’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 15.6%.