Q3 2025 Inogen Inc Earnings Call
Welcome to in third quarter 2025 earnings conference call. At this time, all participants are in a listen-only mode, following management, prepared remarks, we will hold a Q&A session,
To ask a question at that time. Please press star followed by 1 on your touchtone phone.
If anyone has difficulty hearing the conference, please press star zero for operator assistance.
Today. November 5th, 2025.
I'd now like to turn the call over to Lorna Williams, Senior vice president of investor relations and strategic planning, please go ahead.
Thank you all for participating in today's call joining me are president and CEO Kevin Smith and CFO Mike. Fork earlier today, nigen relief Financial results for the third quarter of 2025
the earnings release is available in the investor relations section of the company's website, along with a supplemental Financial package.
As a reminder, the information presented today will include forward-looking statements, including without limitation statements about our growth prospects and strategy for 2025 and Beyond.
Expectations related to our financial results for the fourth quarter and full year 2025.
Progress of our strategic initiatives, including Innovation, our expectations regarding the market for our products.
And our business and supply, and demand for our products.
And both the short term, and long term.
the forward-looking statements in this call are based on information currently available to us as of today's date, November 5th, 2025
These forward-looking statements are only predictions and involve risks and uncertainties that are set forth in more details. In our most recent periodic reports filed with the Security and Exchange Commission.
Actual results May Vary and we disclaim any obligation to update these 4 looking statements, except as it may be required by law.
During the call, we will also present certain financial information on a non-gaap basis.
Management believes that non-gaap Financial measures taken in conjunction with us. Gaap Financial, measures provide useful information in both management and investors by excluding certain non-cash items and other expenses that are not indicative of indigenous core operating results.
Management uses non-gaap measures internally to understand manage and evaluate our business and make operating decisions.
Reconciliations between us, gaap and non-gaap results are presented in tables within our earnings release.
With that, I will turn the call over to nigen president and CEO Kevin Smith.
Good afternoon, and thank you for joining our third quarter 2025 conference call.
Today, I'll share more detail on our progress across our 3, strategic priorities driving Topline growth advancing profitability and expanding our Innovation pipeline.
Towards Mike will provide further Financial details and our updated Outlook.
Our first strategic priority is to drive Topline growth and I am pleased to report that this quarter marked. Our seventh consecutive period of mid single digit Revenue growth. As we delivered over 92 million dollars in total revenue,
Continued Market conversions from portable oxygen tanks to PC's fuel the year-over-year unit. Growth of more than 15% reflecting steady execution and increasing market adoption.
Our domestic B2B Channel, delivered, strong performance with 7% year-over-year. Growth driven by discipline commercial execution and a differentiated market-leading product portfolio.
International B2B was a standout contributor achieving 19% year-over-year growth as we advance our strategy to expand into high opportunity Global markets. The team has continued to do a great job, deepening, DME relationships and securing International tenders. These efforts are enhancing our brand visibility expanding our reach and reinforcing our position. As a trusted, Global oxygen therapy partner
International expansion remains a key. Pillar of our long-term growth strategy. The global COPD Market is large and growing, and the need for long-term. Oxygen therapy is underdiagnosed and we see significant opportunity to leverage our portfolio. Breath brand reputation and local Partnerships to reach more patients, outside the US.
As Health Systems, continue shifting care into the home. We believe International markets will be a sustained growth driver for energy in the years ahead.
Collectively these results bolster confidence as we execute our turnaround strategy.
With 7 consecutive quarters of mid single digit growth. We are establishing a track record of consistent, and execution and delivery.
We are reiterating Revenue guidance for the year.
Looking ahead. We remain focused on accelerating growth, within the large and underpenetrated COPD Market, which represents the 600 million long-term conversion opportunities.
Our second key priority.
To a combination of operational, excellence and discipline cost management. We continue to strengthen our financial Foundation. This quarter
And the third quarter, we delivered, meaningful operating leverage with operating expenses down 1.4% year-over-year and adjusted ibida of 2.3 million.
This marks our third consecutive quarter of adjusted ebit of profitability and the fifth adjusted ebit of profitable quarter out of the last 6 high leveling, the durability of our model and consistency of execution.
We also generated positive operating cash flow of 2.2 million or 4.6 million dollars, excluding 1-time legal, and settlement expenses demonstrating improved working, capital efficiency, improved and cost control.
Given this inflection point. We now expect full year adjusted evida to be approximately 2 million dollars compared to our prior expectation of break. Even
This upward revision reflects sustained Revenue growth operating, discipline and continued progress towards sustainable profitability.
We have made all of this progress while continuing to prioritize our R&D and expand our Innovation pipeline, our last strategic priority.
In the third quarter, this included our work to launch the voxi 5 demonstrating that. That our partnership with UL, medical continues to enable portfolio expansion and drive our broader. Respiratory Care ambitions.
Let me share more about voxy 5. Our newest stationary oxygen concentrator. This product launch is progressing. Well and we're seeing positive early Market reception, particularly in our B2B Channel where we pre previously did not have a stationary offering.
This is an important Milestone, as our DME Partners, typically provide new patients, with both stationary and portable oxygen concentrators.
Having 2 strong products in the portfolio. Allows us to reach new customers and deepen relationships with existing partners.
As a reminder, vxy 5 is a meaningful extension of our oxygen therapy portfolio complementing. Our portable Solutions and enabling us to serve a broader range of patients in the Home Care setting.
This product reflects the strength of our Innovation Pipeline and our ability to deliver high-quality cost-effective Solutions.
The device provides 1 to 5 liters per minute of continuous flow oxygen in a compact quiet and durable design, making it an excellent option for patients, who need a reliable and affordable, second unit to use in multiple rooms.
Lastly, turning the semi, oh, our solution for Effective and fatigue-free, bronchial decongestion. We recently began our limited market release of semi-active earlier this year.
It is the first step in our process to build support for reimbursement and Advance our efforts towards Broad commercialization.
We have thoughtfully laying the groundwork for a scalable and sustainable commercial launch.
Over time this could position simios as a differentiated solution. That enhances, patient outcomes, deepens our engagement with clinicians and expands our participation across the broader. Respiratory Care. Continuum.
To conclude The Innovation. We deliver this quarter, reflects our ongoing commitments to advancing Respiratory Care through meaningful product. Developments greater affordability and better outcomes for patients, who rely on oxygen therapy every day.
With that, I will pass the call over to Mike for an overview of our financial results. Mike
thank you. Kevin and good afternoon everyone. Unless otherwise stated all Financial comparisons presented refer to the prior year comparable period.
I will now walk you through the results, starting with the income statement, cash flow, and then ending with guidance.
Hello revenue for the third quarter of 2025 was 92.4 Million, an increase of 4% on a reported basis.
the increase was primarily driven by higher demand from our International and domestic business to business sales,
Looking at third quarter Revenue in more detail basis. Domestic business to business Revenue, increased 6.6% to 24.9 million versus 23.4 million in the prior period driven by increased demand.
And international business to business Revenue, increased 18.8% to 38.4 million, compared to 32.3 million in the prior period.
Primarily driven by higher demand and a successful expansion into new geographies.
Direct to Consumer sales decreased 17.9% to 15.8 million from 19.2 million in the prior period.
Leaner, operating model.
Over the past 12 to 24 months, we have taken meaningful steps to streamline DTC operations prioritizing efficiency, productivity and profitability.
We anticipate that DTC performance will stabilize over the next few quarters as we, establish a foundation for broadening. Our product portfolio in this channel.
We believe that these initiatives will serve as catalysts to long-term growth.
Rental Revenue decreased 4.4% to 13.3 million. From 13.9 million in the prior period, primarily driven by a higher mix of lower private payer reimbursement rates,
Now, I want to discuss the third quarter, gross margins.
Total gross margin was 44.7% in the third quarter of 2025, decreasing 182 basis points from the same period in the prior year.
primarily driven by increased business to business sales as a percentage of total revenue.
Moving on to operating expense in the third quarter of 2025, total operating expense decreased to 48.4 million compared to 49.1 million in the prior period representing a decrease of 1.4%, reflecting effective cost structure management and ongoing savings initiatives.
due to the timing of planned expenses for the advancement of clinical trials related to seameo commercialization
We continue to expect ongoing operating expenses in the second half to be slightly higher than the first half of the year, reflecting investments in product development and commercialization.
And the third quarter of 2025, we reported a gap, net loss of 5.3 million, that included, 1-time legal and settlement expenses of approximately 1.8 million compared to a loss of 6 million dollars in the prior period.
this resulted in a loss, but diluted share of 20 cents in the third quarter of 2025
Versus a loss of 25 cents per share in the prior period.
On an adjusted basis.
We had a net loss of 0.5 million in the third quarter of 2025 compared to a loss of 2.6 million in the prior period and an adjusted loss. Per diluted share of 2 cents in the third quarter of 2025 compared to a loss of 11 cents in the prior period.
Adjusted IA was a positive 2.3 million in the third quarter of 2025 compared to a positive 0.5 million dollars in the prior period.
Moving on to our balance sheet as of September 30th 2025 we had cash cash equivalents marketable Securities and restricted cash of 124.5 million with no debt outstanding.
We generated positive operating cash flow of 2.2 million, or 4.6 million. When, excluding the 1-time, legal settlement of 1.8 million, in related, legal expenses of 6 million,
This performance reflects the overall health of our business and as a result of our commitment to financial discipline and effective expense management.
Kevin mentioned earlier, I will outline our financial outlook for the full year 2025 and Q4.
Remember Q2 and Q3 are typically, I was strongest quarters.
We are reiterating our full year Revenue guidance of 354 to 357 million for the year reflecting approximately 6% year-over-year growth at the midpoint of the range.
This reflects potential puts and takes this quarter, including the pace of stabilization and our GTC business, the timing of some sizable customer orders and our International B2B Channel.
And the continued execution of the boxing launch.
For the full year of 2025, we are now raising adjusted ibida to approximately $2 million.
for the fourth quarter of 2025, we expect reported Revenue,
to be in the range of 87 million to 90 million reflecting approximately, 10% growth at the midpoint relative to the fourth quarter of 2024,
Kevin Curtin exemptions for certain medical devices. We continue to expect. No material impact from tariffs on our gross margin and adjusted ibida.
However, we will closely monitor developments and we'll share updates as appropriate.
Kevin mentioned, we are progressing well on our 3, strategic priorities and are in a great position to finish the year out strong, with an estimated 6% Revenue growth at the midpoint of our guidance range and adjusted ibida of approximately 2 million dollars. And with that, I will pass the call back to Kevin
Thank you, Mike.
Progress this quarter, our focus on operational. Excellence has resulted in the successful launch of new products and meaningful advancements. In our Innovation strategy, the release of voxy 5 significant, enhances our Respiratory Care, portfolio and broadens. Our presence in stationary oxygen therapy.
Concurrently our investments in digital Health product development and Global growth insurer sustained success over the long term.
With this strong foundation in place. We're entering the fourth quarter with confidence focused in a clear path toward delivering growth and creating lasting value for patients partners and shareholders alike.
With that operator, please open a call for questions.
Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue, you may press star C. You may press star 2. If you would like to remove your question from the queue, for participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys.
Thank you. Our first question comes from the line of Mike Matson with needam and Company. Please go ahead.
Hi guys. This is Joseph on for Mike, thanks for taking our questions.
Um, I guess maybe just start out with just congrats on the continued, uh, Improvement in turnaround. Um, I guess focusing on International B2B. Um, is it safe to say that I guess there's a maybe a larger tender uh, in the quarter that drove the market growth. Um, you know, any anyhow, any color on that would be helpful but uh, as well as just, maybe if you could expand on some of the market dynamics, you guys have talked about and and PC's internationally. Um, you know, what are you seeing there? And then I I believe you you guys mentioned additional geographies. So if you could just maybe give a little bit of color on that is is um, you know, is there more planned International expansion is a more, you know expanding within the countries you already in or um you know expanding into brand new countries. Thanks very much.
Hey Joseph, this is Kevin. Thank you for uh, for your question. The, when we look at the uh, International we have, there's not a, uh, a 1-off, a 1 tender, that was contributing to the, to the growth there. We're continuing to build the momentum with our international team. They've done an excellent job on executing our plan.
And building relationships. The growth is coming from uh growing larger share certainly within the uh within our customer base as well as expanding into individual markets.
Primarily this quarter coming from growth within the existing markets, uh, primarily being out of Europe. Now we have also been opening up new markets. We have new markets that will be impacting us going forward, which gives us confidence that we can continue to grow the the international business. Uh, this quarter was in 19% growth it's uh in the future. We see the ability to continue to to uh, to stay in that upper single digit, double digit range, but perhaps not at the same 19% level. Although there are upside opportunities when we think about large markets, that will be opening we've talked before about China, we're not yet in China. We're working through that process, but that represents a very significant opportunity, especially working with our partner, UL, who knows that market quite well and does exceptionally well with the soc business in China. We have other significant markets. I won't go into the, uh, into the details parsing out an individual ones. But we have, we have high confidence both in being able to grow the POC, internationally, as well.
As continue the work towards getting reimbursement for seameo internationally, which would contribute the high marginal force in the future as well.
Okay, great, that's that's all very helpful. Thank you for that Kevin. Um,
I and then maybe I guess just boxy 5. Um, have have sales started there. Um I know you guys said you, you know, you getting into
Um, you know, deeper conversations or relationships. And I know this product is going to help that, but I'm just wondering, are there any B2B sales with Voxy 5 this quarter? Do you expect it to be in Q4, or really more in 2026?
The second half of this year into the, uh, into this fourth quarter. We're happy with the results that we've seen so far, the feedback that we've had both from customers, as well as patients and we see this as something that's going to continue to uh, to build and scale. So we've started some of the scaling process here and the uh, the back end of this year, that's already begun. We've had some initial sales coming from and although it's not a material impact yet. We see that coming in 26 and contributing to growth Beyond 26 as well. But it's also when we think of voxy, you know, voxy is not just, the is not just the play in the B2B Market but we really need to think about boxy addressing roughly 90% of the oxygen therapy markets. So when you think about patients that are on long-term oxygen therapy,
There is, you know, somewhere in the mid 20s. You know, we Peg it at around 23% of patients that have a portable oxygen concentrator. But around, 90% of those patients have a stationary oxygen concentrator so that, expands our cam considerably,
Yeah, absolutely, massive opportunity there. Um, well I guess just, you know, based on the guy that looks like fourth quarter is going to see some meaningful Revenue uh growth. So um, congrats on this quarter and the continued progress.
Thanks Joseph.
Our next question comes from the line of Anderson. Shock with B uh B Riley Securities. Please go ahead.
Hey, good morning. Thank you for taking our questions, and congrats on a strong quarter.
So first you've talked about the gross margin decline from the growth in the B2B Revenue mix. But could you talk about the decline in rental, gross margins, this quarter, what's driving this and I guess we excited to see continued pressure on margins in this business going forward.
Anderson. This is my
You know you're right when you talk about gross margin in total um you know as we talked about continue to grow the business and B2B. So we're selling a lot more units, right? If you look at units sales, I think they're up, 20% in the year to date basis units that we put out into the market. Uh, so that is that is the main driver. And we look at that, the total gross margin uh being slightly lower. But in terms of you know specific question on the rental, uh I think if you look at Q3 you probably see more likely good comparators on the rental gross margin but I'll talk a little bit about the uh I'm talking to you today basis when we look at Q3 uh by itself. Uh I think it's a 470 basis point uh lower gross margin than we had last year the main driver of that was a true adjustment. We had a logistic related that we posted in the in the quarter that represents I'm going to say roughly 350 of those 427 days this points. But the remainder of that is really what we've been talking about.
With the rental business, some of the headwinds we've had there that we actually are seeing those headwinds uh stabilized a little bit. And those are being when we look at total Patient Service and the percent of those patients that are on Medicare, that continues to go down and Medicare having a higher reimbursement rate, so that's impacting. Not only the top line is impacting uh gross margin as well. Uh and we the second item that's been ahead when that we've been talking about again that 1 as well is is stabilizing a bit, is when we look at cap patients. So for example
Medicare patients are capped at 36 months we continue to service those patients for the next 24 months until we can we can start building again. Uh that is also started to level off a little bit. So if you're looking at the total gross margin, say from the rental perspective, most of the Q3 uh basis point reduction is related to that uh that Trope adjustment. We booked in the quarter 1 time adjustment, and the rest of that is really related to those headwinds that we've been talking about for the last few quarters.
Okay, got it. Thank you. And then, can you share any updates on the progress towards achieving reimbursement for seameo and the timing of a full commercial launch?
Yeah, with semi apps. We are, you know, we're happy with the progress that we've been making and if we think about this on a global scale, we've been uh enrolling patients in the European trial. That is geared towards advancing the uh you know that pathway to reimbursement in Europe. We've also been enrolling patients in the trial.
The opportunity to feedback that we've had from the first patients using seameo, as well as the kols that are involved with. Uh, with our building, the market is putting those initial blocks in place, have been exceptionally positive, which gives us a a favorable Outlook. So that's something that is exciting. And at the right time we'll give you some more clarity on on timelines.
Okay, got it. Thank you for taking our questions and congrats again on all the progress.
Thanks Anderson.
This. Now, concludes our question and answer session. I would like to turn the floor back over to Kevin Smith for closing comments.
Thank you, operator.
The third quarter was another strong step forward and executing our strategy and advancing in transformation.
We continue to deliver consistent, mid single digit top-line, growth marketing, our seventh consecutive quarter of progress, driven by strength across both our domestic and international B2B channels. At the same time we achieved meaningful Improvement in profitability and strategically. We took important steps to expand and diversify our portfolio.
As we look to the remainder of the year and beyond, our focus is clear: to drive sustained revenue growth, expand margins, and build a stronger, more diversified respiratory platform. We have significant opportunities ahead, and we are confident in our ability to capture them to continue to execute operational excellence.
I want to close by expressing my deep, appreciation for our team, intention your dedication, passion and belief in our mission to improve the lives of respiratory patients. Worldwide are what makes our progress possible?
Thank you for your commitment and your contribution to another successful quarter. We're proud of the of the momentum we've built and energized by what lies ahead.
Thank you.
Ladies and gentlemen, thank you for your participation. This does conclude today's teleconference, you may disconnect your lines and have a wonderful day.