Nevro (NVRO) Q2 2024 earnings summary

Executive summary

• Q2 2024 worldwide revenue was $104.2M, down 4.3% year-over-year, with U.S. revenue at $90.7M (down 2.4%) and international revenue at $13.5M (down 15%).

• Net loss from operations was $25.1M, improved from $25.6M last year; net loss narrowed to $19.6M, or $(0.53) per share, compared to $(0.69) per share in Q2 2023.

• Adjusted EBITDA turned positive at $3.0M versus a $3.1M loss in Q2 2023, up 197% year-over-year.

• Strategic review initiated to explore options including partnerships, mergers, or a sale to accelerate growth and diversify the portfolio.

• Recent acquisition of Vyrsa Technologies expanded the SI joint business, diversifying the product portfolio.

Financial highlights

• Gross profit was $67.5M (gross margin 64.8%), including a $6M one-time supplier contract charge; excluding this, gross margin was 70.5%.

• Operating expenses fell to $92.6M, including $4.6M restructuring and $1.7M acquisition/contingent consideration; OpEx down 7–8% year-over-year.

• Cash, cash equivalents, and investments at quarter-end totaled $273.7M, down $7.8M sequentially.

• Interest expense rose to $6.7M in Q2 2024 due to Braidwell Term Loan; interest income steady at $3.3M.

• Arbitration ruling in April 2024 awarded control of a key patent application and $0.2M in damages.

Outlook and guidance

• Full-year 2024 revenue guidance revised to $400M–$405M (down from $435M–$445M), a 5–6% decrease from 2023.

• Full-year gross margin expected at 66% (or 68% excluding the $6M charge); long-term target remains mid-70s%.

• Operating expenses for 2024 expected at $383M, including $10.1M restructuring and $9.4M acquisition-related charges.

• Adjusted EBITDA guidance lowered to -$20M to -$18M for 2024.

• Q3 2024 revenue expected at $92M–$94M; Q3 adjusted EBITDA at -$10M to -$9M.