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Penumbra, Inc. reports Q4 and full year 2023 financial results

Penumbra, Inc. reported financial results for the fourth quarter and full year ended December 31, 2023.

In the fourth quarter of 2023, the Company made changes to its product revenue categories to provide investors with more meaningful information to understand the performance of its business and strategic direction. The Company will now report its product revenues in the following categories: thrombectomy and embolization and access. The Company is also providing its neuro and vascular product revenues for the fourth quarter and full year 2023 for the last time.

As a one-time appendix to this press release, the Company has included its previously reported revenue for each quarter and year-to-date period of 2023 and 2022 reclassified into these new product categories, including supplemental geographic information.

Fourth quarter 2023 financial results
Total revenue increased to $284.7 million for the fourth quarter of 2023 compared to $221.2 million for the fourth quarter of 2022, an increase of 28.7%, or 27.9% in constant currency1. The United States represented 71.5% of total revenue and international represented 28.5% of total revenue for the fourth quarter of 2023. Revenue from the U.S. increased 29.6% while revenue from our international regions increased 26.4%, or 23.5% in constant currency1. We achieved record revenue from the sales of our global thrombectomy products which grew to $190.8 million for the fourth quarter of 2023, an increase of 42.4%, or 41.6% in constant currency1 over the same period a year ago, driven primarily by the sales of our U.S. thrombectomy products which increased by 46.4% over the same period a year ago. Revenue from the sales of our global embolization and access products grew to $93.9 million for the fourth quarter of 2023, an increase of 7.6%, or 6.7% in constant currency1 from the same period a year ago.

Gross profit for the fourth quarter of 2023 was $187.0 million, or 65.7% of total revenue compared to $138.4 million, or 62.6% of total revenue, for the fourth quarter of 2022. Gross margin is impacted by product mix, regional mix, and production initiatives to support demand and create future efficiencies. As such, with favorable product mix, improvement in productivity, and by leveraging our fixed costs on higher volume of new product sales during the year, our gross margin may be positively impacted in the future.

Total operating expenses, including a $2.4 million amortization expense of finite lived intangible assets acquired in connection with the Sixense acquisition for both periods, were $152.0 million, or 53.4% of total revenue for the fourth quarter of 2023, and $133.6 million, or 60.4% of total revenue for the fourth quarter of 2022. Excluding the charge noted above for both periods, total non-GAAP operating expenses1 were $149.6 million, or 52.5% of total revenue for the fourth quarter of 2023, and $131.2 million, or 59.3% of total revenue for the fourth quarter of 2022.

Income from operations was $35.0 million for the fourth quarter of 2023 compared to income from operations of $4.8 million for the fourth quarter of 2022. Excluding the amortization expense of finite lived intangible assets acquired in connection with the Sixense acquisition of $2.4 million for both periods, non-GAAP income from operations1 was $37.4 million for the fourth quarter of 2023 compared to $7.2 million for the fourth quarter of 2022.

Full year 2023 financial results
Total revenue increased to $1,058.5 million for the year ended December 31, 2023 compared to $847.1 million for the year ended December 31, 2022, an increase of 25.0%, or 24.7% in constant currency1. The United States represented 71.5% of total revenue and international represented 28.5% of total revenue for the year ended December 31, 2023. Revenue from the U.S. increased 28.0% while revenue from our international regions increased 18.0%, or 17.3% in constant currency1. Revenue from the sales of our global thrombectomy products grew to $677.3 million for the year ended December 31, 2023, an increase of 32.5%, or 32.3% in constant currency1 over the same period a year ago, driven primarily by sales of our U.S. vascular thrombectomy products which increased 45.2% over the same period a year ago. Revenue from the sales of our global embolization and access products grew to $381.2 million for the year ended December 31, 2023, an increase of 13.4%, or 13.2% in constant currency1 compared to the year ended December 31, 2022.

Gross profit for the year ended December 31, 2023 was $682.6 million, or 64.5% of total revenue, compared to $535.2 million, or 63.2% of total revenue, for the year ended December 31, 2022. Gross margin is impacted by product mix, regional mix, and production initiatives to support demand and create future efficiencies. As such, with favorable product mix, improvement in productivity, and by leveraging our fixed costs on higher volume of new product sales during the year, our gross margin may be positively impacted in the future.

Total operating expenses for the year ended December 31, 2023 were $609.1 million, or 57.5% of total revenue, which included a one-time $18.2 million expense associated with the acquisition of in-process research and development (“IPR&D”) and a $9.5 million amortization expense of finite lived intangible assets acquired in connection with the Sixense acquisition. This compares to total operating expenses of $529.1 million, or 62.5% of total revenue, for the year ended December 31, 2022, which included a $8.3 million amortization expense of finite lived intangible assets acquired in connection with the Sixense acquisition. Excluding the charges noted above, total non-GAAP operating expenses1 were $581.4 million, or 54.9% of total revenue during the year ended December 31, 2023, and $520.8 million, or 61.5% of total revenue during the year ended December 31, 2022. R&D expenses were $84.4 million for the year ended December 31, 2023, compared to $79.4 million for the year ended December 31, 2022. SG&A expenses were $506.5 million for the year ended December 31, 2023, compared to $449.7 million for the year ended December 31, 2022.

Income from operations was $73.6 million for the year ended December 31, 2023 compared to income from operations of $6.1 million for the year ended December 31, 2022. Excluding the one-time expense associated with the acquired IPR&D of $18.2 million and the amortization expense of finite lived intangible assets acquired in connection with the Sixense acquisition of $9.5 million, non-GAAP income from operations1 was $101.3 million for the year ended December 31, 2023. This compares to non-GAAP income from operations1 of $14.4 million for the year ended December 31, 2022, excluding the amortization expense of finite lived intangible assets acquired in connection with the Sixense acquisition of $8.3 million.

Full year 2024 financial outlook
The Company projects total revenue for 2024 to be in the range of $1,230.0 million to $1,270.0 million, representing year over year growth of 16% to 20% compared to 2023 revenue of $1,058.5 million. The Company also projects the U.S. thrombectomy franchise will grow 27% to 30% year-over-year, primarily driven by its Computer-Assisted Vacuum Thrombectomy (“CAVT”) products. The Company also expects gross margin expansion in the range of 100 to 150 basis points and total non-GAAP operating margin expansion in the range of 100 to 200 basis points in 2024 compared to full year 2023.
MB Bureau

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