Announces Additional Restructuring Steps to
Advance Strategy and Accelerate Profitability
Raises Adjusted EBITDA Guidance and Reaffirms
Revenue Guidance for Full-Year 2024
Promotes Christofer
Christoforou to Chief Operating Officer
REDWOOD
CITY, Calif., May 7, 2024
/PRNewswire/ -- Nevro Corp. (NYSE: NVRO), a global medical device
company that is delivering comprehensive, life-changing solutions
for the treatment of chronic pain, today reported its first quarter
2024 financial results. The company also announced additional
restructuring steps to advance its strategy and accelerate
profitability, raised its adjusted EBITDA guidance and reaffirmed
its revenue guidance for the full-year 2024, and announced that
Christofer Christoforou has been
promoted to the newly created Chief Operating Officer (COO)
role.
"We are pleased with our first quarter performance which
demonstrates our continued focus on executing our three-pillar
strategy of commercial execution, market penetration and profit
progress. Worldwide revenue and adjusted EBITDA both came in ahead
of our expectations," said Kevin
Thornal, Nevro's CEO and President. "In addition, we are
excited with the progress we are making on ramping up our nascent
sacroiliac joint business, with more than 220 physicians trained
thus far on Nevro1™, one of our three SI joint products."
Thornal continued, "Based on our first quarter performance, the
additional restructuring steps we are taking to make Nevro a
stronger and healthier company, and our outlook for the remainder
of this year, we are raising our adjusted EBITDA guidance to a
range of a loss of $5 million to
positive $2 million and reaffirming
our revenue guidance of $435 million
to $445 million for the full-year
2024."
"Also, I'm thrilled that Chris is stepping into the Chief
Operating Officer role. He has been with Nevro for eight years and
is a valuable member of our leadership team. Chris' experience,
skillset and strong track record of success will be instrumental as
we drive further operational efficiencies, expand margins and
continue to focus on delivering innovative treatment therapies for
patients suffering from chronic pain," Thornal added.
First-Quarter 2024 Financial Highlights and Recent Business
Developments
- For the first quarter of 2024 (as compared with the first
quarter of 2023):
- Worldwide revenue grew to $101.9
million, an increase of 5.8% as reported and 5.6% on a
constant currency basis.
- U.S. trial procedures decreased approximately 5.1%, largely in
line with the company's expectations.
- Reported a first quarter 2024 net loss from operations of
$35.8 million; first quarter 2024
adjusted EBITDA was a loss of $9.6
million. Refer to the financial table at the end of this
release for GAAP to non-GAAP reconciliations, definitions and
further information regarding the use of non-GAAP metrics.
- Nevro also announced that Christofer
Christoforou has been promoted to the role of COO effective
immediately. Christoforou joined the company in 2016 and most
recently served as Senior Vice President, Technical Operations. In
addition to his current responsibilities, which include leading the
company's manufacturing processes and innovation, research and
development efforts, Christoforou will have oversight of clinical
and regulatory affairs and quality assurance. For Christoforou's
complete biography, please visit the Leadership Team section on
Nevro's corporate website.
- As previously announced on February 28,
2024, Nevro received FDA 510(k) clearance to use its
sacroiliac (SI) joint fusion system, Nevro1™, without the need for
a fixation screw and featuring integrated lateral
transfixation.
- 24-month data from SENZA-PDN randomized controlled trial (RCT)
for improved sensory function and protective sensation in the feet
of patients receiving 10 kHz SCS was published in the Journal of
Diabetes Science & Technology, with results demonstrating
unique, disease-modifying improvement in sensory function that
potentially lowers the risk of diabetes-related ulcerations and
traumatic amputations.
- Nevro introduced its new solution for patients who do not have
a compatible iPhone that helps increase access to the benefits of
HFX iQ 10kHz Therapy™.
- Enrollment in Nevro's PDN Clinical Sensory Study ("PDN Sensory
Study") now stands at 143 patients, ahead of the company's
expectations. As a result of this robust enrollment combined with
strong outcomes demonstrated in its SENZA-PDN RCT, the company is
pausing enrollment in the PDN Sensory Study to allow for an interim
primary endpoint analysis of all subjects who are randomized from
this existing cohort. While the results of the analysis may
indicate restarting enrollment in the future, Nevro's goal is to
bring trial results to publication as soon as possible for the
benefit of patients and review for inclusion in therapeutic
guidelines.
First-Quarter 2024 Financial Results
Worldwide revenue for the first quarter of 2024 was $101.9 million, an increase of 5.8% as reported
and 5.6% on a constant currency basis, compared with $96.3 million in the first quarter of 2023. U.S.
revenue in the first quarter of 2024 was $87.0 million, reflecting growth of 5.7% over
$82.3 million in the first quarter of
2023. The year-over-year increase was primarily due to a mix shift
to the company's newest-generation SCS system, HFX iQ™, and a
higher number of patients that returned to replace their legacy
Nevro SCS implant with an updated Nevro device.
U.S. permanent implant procedures were approximately flat with
first quarter of 2023, while U.S. trial procedures decreased 5.1%
compared with the first quarter of 2023. The year-over-year
decrease in U.S. trials was largely in line with the company's
expectations and primarily driven by softness in U.S. SCS trialing
activity in the first quarter of 2024 as well as the impact of
physician interest in attending Nevro's SI joint fusion training
sessions that take physicians out of their practice, thereby
reducing the number of trial procedures they performed in the
quarter.
International revenue in the first quarter of 2024 was
$14.9 million compared with
$14.0 million in the first quarter of
2023, representing increases of 6.1% and 4.7%, respectively, on a
reported and constant currency basis.
Gross profit for the first quarter of 2024 was $71.5 million compared with $64.6 million in the first quarter of
2023. Gross margin was 70.2% in the first quarter of 2024, an
increase of 310 basis points over 67.1% in the first quarter of
2023. The year-over-year improvement in gross margin was driven
primarily by a shift to higher margin products sourced out of the
company's Costa Rica manufacturing
facility.
Operating expenses for the first quarter of 2024 were
$107.4 million compared with
$100.9 million for the year-ago
period. Operating expenses for the first quarter of 2024
include a $5.5M charge related to the
company's restructuring that was announced in January 2024 as well as two items related to the
company's November 2023 acquisition
of Vyrsa:
- a net $3.5 million charge related
to the change in fair value of the contingent consideration
liability; and
- $0.7 million of expense related
to the amortization of intangibles.
Excluding the aforementioned three items, operating expenses in
the first quarter of 2024 improved by $3.3
million, or 3.3%, compared with the prior-year
quarter, reflecting the benefits from the company's January 2024 restructuring and disciplined
expense management efforts in the current-year period.
Litigation-related legal expenses were $2.8 million for the first quarter of 2024
compared with $3.8 million for the
first quarter of 2023.
Net loss from operations for the first quarter of 2024 was
$35.8 million, or $26.1 million excluding the previously mentioned
restructuring charge and Vyrsa-related acquisition charges,
compared with a net loss of $36.3
million for the first quarter of 2023. Adjusted EBITDA
for the first quarter of 2024 was a loss of $9.6 million compared with a loss of $17.1 million for the first quarter of
2023. Adjusted EBITDA excludes interest, taxes, and
non-cash items such as stock-based compensation and depreciation
and amortization, as well as litigation-related expenses,
certain litigation charges and credits and other adjustments such
as restructuring charges, amortization of intangibles, and
adjustments to the fair value of contingent consideration
liabilities. Refer to the financial table at the end of this
release for GAAP to adjusted (non-GAAP) reconciliations.
Cash, cash equivalents and short-term investments totaled
$281.5 million as of March 31, 2024, a decrease of $41.2 million from December 31, 2023. This decrease was
primarily the result of approximately $26.5
million in customarily higher first-quarter cash outflows, a
$9.8 million Vyrsa-related milestone
payment and $4.4 million of
restructuring-related cash payments.
Full-Year and Second-Quarter 2024 Financial Guidance
Based on its first-quarter 2024 performance and outlook for the
remainder of this year, Nevro continues to expect its full-year
2024 worldwide revenue to be in the range of approximately
$435 million to $445 million.
Nevro is raising its adjusted EBITDA guidance for the full-year
2024 to a range of negative $5
million to positive $2 million
from its previous guidance range of negative $14 million to negative $8
million. Nevro's revised expectations for full-year 2024
adjusted EBITDA guidance reflects the better-than-anticipated
adjusted EBITDA in the first quarter of 2024, approximately
$10 million in incremental savings in
2024 as a result of the restructuring, and its outlook for the
remainder of this year. The company noted that it expects
$4 million to $5 million in restructuring charges in the second
quarter of 2024.
For the second quarter of 2024, the company expects worldwide
revenue to be in the range of approximately
$106 million to $108 million and adjusted EBITDA to be in the
range of negative $3.5 million to
negative $2.5 million.
Nevro has not provided a quantitative reconciliation of
forecasted adjusted EBITDA to forecasted net income (loss) within
this press release because the company is unable, without making
unreasonable efforts, to calculate certain reconciling items with
confidence. For more information regarding the non-GAAP financial
measures discussed in this press release, please see the
financial table at the end of this release for GAAP to non-GAAP
reconciliations, definitions and further information regarding the
use of non-GAAP metrics.
An investor presentation for Nevro's first-quarter 2024
financial results is available in the "Investors" section of the
company's corporate website at Events & Presentations.
Webcast and Conference Call Information
As previously announced, Nevro will host a conference call today
to discuss its financial results. The call will begin at
1:30 pm PT / 4:30 pm ET. A live webcast and replay of the
conference call will be available in the "Investors" section of the
company's website at Events & Presentations. The webcast can be
accessed 10 minutes prior to the conference call start time.
For those parties that do not have internet access, the
conference call can be accessed by calling one of the below
telephone numbers and providing conference ID 6973396:
U.S. domestic
participant dial-in number (toll-free):
|
1-888-596-4144
|
|
|
International
participant dial-in number:
|
1-646-968-2525
|
Internet Posting of Information
Nevro routinely posts information that may be important to
investors in the "Investor Relations" section of its website at
www.nevro.com. The company encourages investors and potential
investors to consult the Nevro website regularly for important
information about Nevro.
About Nevro
Headquartered in Redwood City,
California, Nevro is a global medical device company focused
on delivering comprehensive, life-changing solutions that continue
to set the standard for enduring patient outcomes in chronic pain
treatment. The company started with a simple mission to help more
patients suffering from debilitating pain and developed its
proprietary 10 kHz Therapy™, an evidence-based, non-pharmacologic
innovation that has impacted the lives of more than 115,000
patients globally. Nevro's comprehensive HFX™ spinal cord
stimulation (SCS) platform includes the Senza® SCS system and
support services for the treatment of chronic pain of the trunk and
limb and painful diabetic neuropathy.
Nevro recently added a minimally invasive treatment option for
patients suffering from chronic sacroiliac joint ("SI joint") pain
and now provides the most comprehensive portfolio of products in
the SI joint fusion space, designed to meet the preferences of
physicians and varying patient needs in order to improve outcomes
and quality of life for patients.
Senza®, Senza II®, Senza
Omnia®, and HFX iQ™ are the only SCS systems that
deliver Nevro's proprietary 10 kHz Therapy™. Nevro's unique support
services provide every patient with HFX Coach™ support throughout
their pain relief journey and every physician with HFX Cloud™
insights for enhanced patient and practice management.
SENZA, SENZA II, SENZA OMNIA, OMNIA, HF10, the HF10 logo, 10 kHz
Therapy, HFX, the HFX logo, HFX iQ, the HFX iQ logo, HFX Algorithm,
HFX CONNECT, the HFX Connect logo, HFX ACCESS, the HFX Access logo,
HFX COACH, the HFX Coach logo, HFX CLOUD, the HFX Cloud logo,
RELIEF MULTIPLIED, the X logo, NEVRO, and the NEVRO logo are
trademarks or registered trademarks of Nevro Corp. Patents covering
Senza HFX iQ and other Nevro products are listed at
Nevro.com/patents.
To learn more about Nevro, connect with us on LinkedIn, X,
Facebook, and Instagram.
Forward-Looking Statements
In addition to historical information, this press release
contains forward-looking statements reflecting the current beliefs
and expectations of the company's management, made pursuant to the
safe harbor provisions of the Private Securities Litigation Reform
Act of 1995, including: our second quarter and updated full-year
2024 financial guidance; our belief that the actions we have taken
further position us for success; and our belief that our focus on
our three key strategic pillars will improve our commercial
execution and deliver significant long-term shareholder return.
These forward-looking statements are based upon information that is
currently available to us or our current expectations, speak only
as of the date hereof, and are subject to numerous risks and
uncertainties, including our ability to successfully commercialize
our products; our ability to manufacture our products to meet
demand; the level and availability of third-party payor
reimbursement for our products; our ability to effectively manage
our anticipated growth and the costs and expenses of operating our
business; our ability to protect our intellectual property rights
and proprietary technologies; our ability to operate our business
without infringing the intellectual property rights and proprietary
technology of third parties; competition in our industry;
additional capital and credit availability; our ability to
successfully integrate any additive acquisitions we may make,
including our acquisition of Vyrsa Technologies; our ability to
attract and retain qualified personnel; our ability to accurately
forecast financial and operating results; and product liability
claims. These factors, together with those that are described in
greater detail in our Annual Report on Form 10-K filed on
February 23, 2024, as well as any
reports that we may file with the Securities and Exchange
Commission in the future, may cause our actual results, performance
or achievements to differ materially and adversely from those
anticipated or implied by our forward-looking statements. We
expressly disclaim any obligation, except as required by law, or
undertaking to update or revise any such forward-looking
statements. Nevro's operating results for the period ending
March 31, 2024, are not necessarily
indicative of the company's operating results for any future
periods.
Investor and Media Contact:
Angie McCabe
Vice President, Investor Relations & Corporate
Communications
angeline.mccabe@nevro.com
Nevro
Corp.
|
Condensed
Consolidated Statements of Operations and Comprehensive
Loss
|
(in thousands,
except share and per share data)
|
|
|
|
Three Months
Ended
|
|
|
|
March 31,
|
|
|
|
2024
|
|
|
2023
|
|
|
|
(unaudited)
|
|
Revenue
|
|
$
|
101,899
|
|
|
$
|
96,327
|
|
Cost of
revenue
|
|
|
30,371
|
|
|
|
31,703
|
|
Gross profit
|
|
|
71,528
|
|
|
|
64,624
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
Research and
development
|
|
|
14,828
|
|
|
|
14,755
|
|
Sales, general and
administrative
|
|
|
88,326
|
|
|
|
86,192
|
|
Amortization of
intangibles
|
|
|
737
|
|
|
|
—
|
|
Change in fair value
of contingent consideration
|
|
|
3,471
|
|
|
|
—
|
|
Total operating
expenses
|
|
|
107,362
|
|
|
|
100,947
|
|
Income (loss) from
operations
|
|
|
(35,834)
|
|
|
|
(36,323)
|
|
Other income
(expense):
|
|
|
|
|
|
|
|
|
Interest income
(expense), net
|
|
|
(2,732)
|
|
|
|
1,665
|
|
Change in fair market
value of warrants
|
|
|
13,560
|
|
|
|
—
|
|
Other income
(expense), net
|
|
|
(21)
|
|
|
|
(46)
|
|
Income (loss) before
income taxes
|
|
|
(25,027)
|
|
|
|
(34,704)
|
|
Provision for income
taxes
|
|
|
382
|
|
|
|
325
|
|
Net income
(loss)
|
|
|
(25,409)
|
|
|
|
(35,029)
|
|
Changes in foreign
currency translation adjustment
|
|
|
(255)
|
|
|
|
506
|
|
Changes in unrealized
gains (losses) on short-term investments
|
|
|
(526)
|
|
|
|
587
|
|
Net change in other
comprehensive income (loss)
|
|
|
(781)
|
|
|
|
1,093
|
|
Comprehensive income
(loss)
|
|
$
|
(26,190)
|
|
|
$
|
(33,936)
|
|
Net loss per share,
basic and diluted
|
|
$
|
(0.70)
|
|
|
$
|
(0.98)
|
|
Weighted average shares
used to compute
net loss
per share
|
|
|
36,467,371
|
|
|
|
35,584,685
|
|
Nevro
Corp.
|
Condensed
Consolidated Balance Sheets
|
(in thousands,
except share and per share data)
|
|
|
|
March 31,
|
|
|
December 31,
|
|
|
|
2024
|
|
|
2023
|
|
|
|
(unaudited)
|
|
|
|
|
|
Assets
|
|
|
|
|
|
|
|
|
Current
assets
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
90,303
|
|
|
$
|
104,217
|
|
Short-term
investments
|
|
|
191,180
|
|
|
|
218,506
|
|
Accounts receivable,
net
|
|
|
76,918
|
|
|
|
79,377
|
|
Inventories,
net
|
|
|
120,789
|
|
|
|
118,676
|
|
Prepaid expenses and
other current assets
|
|
|
13,414
|
|
|
|
10,145
|
|
Total current
assets
|
|
|
492,604
|
|
|
|
530,921
|
|
Property and equipment,
net
|
|
|
24,708
|
|
|
|
24,568
|
|
Operating lease
assets
|
|
|
7,764
|
|
|
|
8,944
|
|
Goodwill
|
|
|
38,324
|
|
|
|
38,164
|
|
Other intangible
assets, net
|
|
|
26,617
|
|
|
|
27,354
|
|
Other assets
|
|
|
5,427
|
|
|
|
5,156
|
|
Restricted
cash
|
|
|
606
|
|
|
|
606
|
|
Total
assets
|
|
$
|
596,050
|
|
|
$
|
635,713
|
|
Liabilities and
stockholders' equity
|
|
|
|
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
|
|
|
Accounts
payable
|
|
$
|
21,208
|
|
|
$
|
22,520
|
|
Contingent
liabilities, current portion
|
|
|
220
|
|
|
|
9,836
|
|
Accrued liabilities
and other
|
|
|
45,346
|
|
|
|
51,019
|
|
Total current
liabilities
|
|
|
66,774
|
|
|
|
83,375
|
|
Long-term
debt
|
|
|
214,763
|
|
|
|
211,471
|
|
Long-term operating
lease liabilities
|
|
|
3,136
|
|
|
|
4,634
|
|
Contingent liabilities,
non-current portion
|
|
|
15,564
|
|
|
|
12,257
|
|
Warrant
liability
|
|
|
15,179
|
|
|
|
28,739
|
|
Other long-term
liabilities
|
|
|
2,093
|
|
|
|
2,092
|
|
Total
liabilities
|
|
|
317,509
|
|
|
|
342,568
|
|
Stockholders'
equity
|
|
|
|
|
|
|
|
|
Common stock, $0.001
par value, 290,000,000 shares authorized;
37,369,746 and
37,044,390 shares issued at March 31, 2024
and December
31, 2023, respectively; 36,686,830 and 36,361,474
shares
outstanding at March 31, 2024 and December 31,
2023,
respectively
|
|
|
36
|
|
|
|
36
|
|
Additional paid-in
capital
|
|
|
1,004,348
|
|
|
|
992,762
|
|
Accumulated other
comprehensive loss
|
|
|
(1,024)
|
|
|
|
(243)
|
|
Accumulated
deficit
|
|
|
(724,819)
|
|
|
|
(699,410)
|
|
Total stockholders'
equity
|
|
|
278,541
|
|
|
|
293,145
|
|
Total liabilities and
stockholders' equity
|
|
$
|
596,050
|
|
|
$
|
635,713
|
|
Nevro
Corp.
|
GAAP to Non-GAAP
Adjusted EBITDA Reconciliation
|
(unaudited)
|
(in
thousands)
|
|
The following table
presents a reconciliation of GAAP net loss, as prepared in
accordance with U.S. Generally Accepted Accounting Principles
("GAAP"), to adjusted EBITDA, a non-GAAP financial
measure.
|
|
Reconciliation of
actual results:
|
|
|
|
Three Months
Ended
|
|
|
|
March 31,
|
|
|
|
2024
|
|
|
2023
|
|
|
|
(unaudited)
|
|
GAAP Net Income
(Loss)
|
|
$
|
(25,409)
|
|
|
$
|
(35,029)
|
|
Non-GAAP
Adjustments:
|
|
|
|
|
|
|
|
|
Interest (income)
expense, net
|
|
|
2,732
|
|
|
|
(1,665)
|
|
Provision for income
taxes
|
|
|
382
|
|
|
|
325
|
|
Depreciation and
amortization
|
|
|
2,053
|
|
|
|
1,582
|
|
Stock-based
compensation expense and other equity related charges
|
|
|
11,674
|
|
|
|
13,560
|
|
Amortization of
intangibles
|
|
|
737
|
|
|
|
—
|
|
Change in fair value
of contingent consideration
|
|
|
3,471
|
|
|
|
—
|
|
Change in fair market
value of warrants
|
|
|
(13,560)
|
|
|
|
—
|
|
Litigation-related
expenses
|
|
|
2,801
|
|
|
|
3,754
|
|
Restructuring
charges
|
|
|
5,523
|
|
|
|
332
|
|
Adjusted
EBITDA
|
|
$
|
(9,596)
|
|
|
$
|
(17,141)
|
|
Reconciliation of
guidance:
|
|
|
|
Three Months
Ended
|
|
|
Year
Ended
|
|
|
|
June 30,
2024
|
|
|
December 31,
2024
|
|
|
|
(Low
Case)
|
|
|
(High
Case)
|
|
|
(Low
Case)
|
|
|
(High
Case)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Net
Loss
|
|
$
|
(28,500)
|
|
|
$
|
(27,500)
|
|
|
$
|
(94,000)
|
|
|
$
|
(87,000)
|
|
Non-GAAP
Adjustments
|
|
|
25,000
|
|
|
|
25,000
|
|
|
|
89,000
|
|
|
|
89,000
|
|
Adjusted
EBITDA
|
|
$
|
(3,500)
|
|
|
$
|
(2,500)
|
|
|
$
|
(5,000)
|
|
|
$
|
2,000
|
|
Management uses certain non-GAAP financial measures, most
specifically adjusted EBITDA, as a supplement to GAAP financial
measures to further evaluate the company's operating performance
period over period, analyze the underlying business trends, assess
performance relative to competitors and establish operational
objectives.
Management believes it is important to provide investors with
the same non-GAAP metrics it uses to evaluate the performance and
underlying trends of the company's business operations to
facilitate comparisons to its historical operating results and
evaluate the effectiveness of its operating strategies. Disclosure
of these non-GAAP financial measures also facilitates comparisons
of the company's underlying operating performance with
other companies in the industry that also supplement their GAAP
results with non-GAAP financial measures.
EBITDA is a non-GAAP financial measure, which is calculated by
adding interest income and expense, net; provision for income
taxes; and depreciation and amortization to net income. In
calculating non-GAAP adjusted EBITDA, the company further adjusts
for the following items:
- Stock-based compensation expense and other equity-related
charges – The company excludes non-cash costs related to the
company's stock-based plans, which include stock options,
restricted stock units and performance-based restricted stock units
as these expenses do not require cash settlement from the
company.
- Amortization of intangibles – The company excludes amortization
of intangibles from the acquisition of businesses.
- Change in fair value of contingent consideration – The company
excludes the changes in the fair value of its contingent
consideration liability.
- Change in fair market value of warrants – The company excludes
the changes in the fair value of its warrant liability.
- Litigation-related expenses – The company excludes legal and
professional fees as well as charges and credits associated with
certain legal matters, which management considers not related to
the underlying operating performance of the business.
- Restructuring charges – The company excludes charges incurred
as a direct result of restructuring programs, such as salaries and
other compensation-related expenses.
Full-year guidance excludes the impact of foreign currency
fluctuations.
The non-GAAP financial measure should not be considered in
isolation from, or as a replacement for, the most directly
comparable GAAP financial measures, as it is not prepared in
accordance with U.S. GAAP.
Nevro has not provided a quantitative reconciliation of
forecasted adjusted EBITDA to forecasted net income (loss) within
this press release because the company is unable, without making
unreasonable efforts, to calculate certain reconciling items with
confidence. These items include, but are not limited to,
stock-based compensation expenses, amortization of intangibles,
change in fair value of contingent consideration, change in fair
value of warrants, and litigation-related expenses.
Amounts may not add due to rounding.
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SOURCE Nevro Corp.