Nevro reports Q4 and full-year 2023 financial results

Nevro Corp. reported its fourth-quarter and full-year 2023 financial results. The company also provided first-quarter and full-year 2024 financial guidance.

“Our fourth quarter performance reflects continued execution of our three-pillar strategy initiated in the second quarter of 2023,” said Kevin Thornal, Nevro’s CEO and president. “The actions we have taken, including our commercial realignment, strengthening our executive team with talented and experienced leaders, the acquisition of Vyrsa Technologies™ to enter the sacroiliac joint fusion space, debt refinancing, and recent restructuring, among others, further position Nevro for success.”

“I especially want to thank our Nevro team members for their continued focus and dedication to freeing patients from the burden of chronic pain,” Thornal continued. “We are off to a solid start as we enter 2024 and remain focused on advancing our core strategic pillars of commercial execution, market penetration and profit progress to further position our business to deliver value for all our stakeholders and achieve profitable, long-term growth.”

Fourth-quarter 2023 financial results
Worldwide revenue for the fourth quarter of 2023 was $116.2 million, an increase of 2% as reported and on a constant currency basis, compared with $113.8 million in the fourth quarter of 2022. PDN indication sales represented approximately $22.4 million and 20% of worldwide permanent implant procedures in the fourth quarter of 2023.

U.S. revenue in the fourth quarter of 2023 was $101.5 million, reflecting growth of 2% over $99.8 million in the fourth quarter of 2022. U.S. permanent implant procedures increased 3% compared with the fourth quarter of 2022, while U.S. trial procedures decreased approximately 1% compared with the fourth quarter of 2022 which was in line with the company’s expectations. U.S. PDN trial procedures represented approximately 24% of total U.S. trial volume and grew approximately 17% over the fourth quarter of 2022.

International revenue in the fourth quarter of 2023 was $14.7 million compared with $14.1 million in the fourth quarter of 2022, an increase of 4% as reported and flat on a constant currency basis.

Gross profit for the fourth quarter of 2023 was $81.5 million, compared with $75.2 million in the fourth quarter of 2022. Gross margin was 70.1% in the fourth quarter of 2023 compared with 66.1% in the fourth quarter of 2022. The increase in gross margin was primarily driven by the shift to higher margin products as well as lower scrap-related charges in the current period.

Operating expenses for the fourth quarter of 2023 were $93.3 million compared with $94.6 million in the fourth quarter of 2022. The decrease in operating expenses was primarily due to reduced marketing, development, and outside consulting expenses which were partially offset by increased legal costs. The fourth quarter additionally included $3.0 million in one-time expense related to the Vyrsa acquisition. Litigation-related legal expenses were $2.9 million for the fourth quarter of 2023 compared with $1.2 million in the fourth quarter of 2022.

Net loss from operations for the fourth quarter of 2023 was $11.8 million compared with a net loss of $19.4 million in the fourth quarter of 2022. Adjusted EBITDA for the fourth quarter of 2023 was $8.4 million compared with a loss of $1.4 million in the fourth quarter of 2022. Adjusted EBITDA excludes interest, taxes, gain on extinguishment of debt, restructuring charges, litigation-related credits and expenses, gain on extinguishment of debt, and non-cash items such as changes in fair market value of warrants, stock-based compensation, depreciation and amortization. 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.

Cash, cash equivalents, and short-term investments totaled $322.7 million as of December 31, 2023, an increase of $2.5 million from September 30, 2023. Cash activities during the quarter ended December 31, 2023, include $47.0 million in net funds received from the company’s November 2023 debt restructuring as well as $40.0 million in cash paid for the acquisition of Vyrsa.

Full-year 2023 financial results
Nevro’s full-year 2023 worldwide revenue was $425.2 million, an increase of 5% as reported and on a constant currency basis, compared with $406.4 million for full-year 2022. Worldwide revenue for 2023 includes approximately $77.9 million of PDN indication sales compared with $48.0 million for the full-year 2022. U.S. revenue was approximately $366.6 million, reflecting growth of 5% over $348.2 million in 2022. International revenue was $58.6 million, an increase of 1% as reported, or flat on a constant currency basis, compared with $58.2 million in the prior year period. Refer to the financial statements for additional full-year 2023 results and GAAP to non-GAAP reconciliations, definitions and further information regarding the use of non-GAAP metrics.

Net loss from operations for the full year of 2023 was $99.3 million compared to net income from operations of $6.2 million in 2022 which includes $105.0 million of litigation-related credits. Excluding these credits, net loss from operations for 2022 was $98.8 million. Full-year 2023 adjusted EBITDA was negative $17.7 million compared with negative $23.8 million in 2022.

Full-year and first-quarter 2024 financial guidance
Nevro currently expects full-year 2024 worldwide revenue to be in the range of approximately $435 million to $445 million, representing growth of 2% to 5% on a reported and constant currency basis over 2023.

Nevro currently expects full-year 2024 adjusted EBITDA to be a loss of approximately $8 million to $14 million, which compares to an adjusted EBITDA loss of $17.7 million in 2023. As previously announced, Nevro implemented a restructuring in early January. The company continues to expect the restructuring to have a $14 million to $15 million positive impact on its full-year 2024 adjusted EBITDA, which will be largely offset by normal operating expense increases and acquisition-related expenses.

For the first quarter of 2024, the company currently expects worldwide revenue of approximately $97 million to $99 million, representing growth of 1% to 3% on a reported and constant currency basis over the first quarter of 2023.

Nevro currently expects first quarter of 2024 adjusted EBITDA to be a loss of approximately $15 million to $16 million. Adjusted EBITDA in the first quarter of 2024 will exclude a $5 million to $6 million restructuring charge.

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.
MB Bureau