Inogen, Inc. Q2 FY2025 earnings call

Top Line Growth

• Sixth consecutive quarter of mid-single-digit growth, with 19% unit volume growth from portable oxygen tank to concentrator conversion.
• Completed Patient-First initiative to strengthen direct-to-consumer sales and rental channels; added new private payers; business-to-business channels saw 18% growth.

Profitability

• Reduced operating expenses by ~5% year-over-year; achieved second consecutive quarter of adjusted EBITDA profitability; expects full-year adjusted EBITDA breakeven in 2025.

Innovation Pipeline

• Launched Voxi 5 stationary oxygen concentrator; advanced clinical trials for Simeox; launched a mobile digital health portal.

Total revenue for the second quarter of 2025 was $92.3 million, an increase of 4% on a reported basis. Domestic business-to-business revenue increased 19.3% to $25.4 million. International business-to-business revenue increased 17.7% to $35.9 million. Direct-to-consumer sales decreased 21.1% to $17.8 million. Rental revenue decreased 8.6% to $13.1 million. Total gross margin was 44.8% in the second quarter of 2025, decreasing 335 basis points from the same period in the prior year but increasing 60 basis points sequentially. Adjusted EBITDA was $2.1 million in the second quarter of 2025 compared to $1.3 million in the prior period.

Full Year 2025

• Reported revenue expected to be in the range of $354 million to $357 million (6% growth at midpoint relative to 2024). Adjusted EBITDA breakeven.

Third Quarter 2025

• Reported revenue expected to be in the range of $91 million to $93 million (4% growth at midpoint relative to third quarter of 2024). Voxi 5 launch to contribute to Q4 growth.

• Forward-looking statements involve risks and uncertainties detailed in periodic reports. Tariffs on medical devices could impact gross margin and adjusted EBITDA, though current exemptions are expected to have no material impact.

Q: Could you talk about the initial demand you've seen for Voxi 5? How should we think about the revenue contribution for this in the back half of the year? And what percent of new Voxi 5 users are also being prescribed one of your POCs alongside it?

A: When we look at Voxi 5, we're excited with what we've seen so far. It's baked into our guidance for the rest of the year. We see opportunity for it to have an impact more in the fourth quarter. Nearly 100% of patients on long-term oxygen therapy have a stationary oxygen concentrator, and portable oxygen concentrators are used with about 23% of that population, so Voxi 5 expands our addressable market.

Q: Do you have any updates on the reimbursement for Simeox? And how should we think about this impacting the timing of a full commercial launch?

A: We are working towards reimbursements, generating health economic and clinical data. We're focused globally. We have not guided on timing externally, but progress is on track. Simeox represents a high-margin opportunity for us in the future.

Q: Can you provide some segment-level commentary just for the balance of the year and how you're thinking about the fundamentals?

A: Second half growth is expected to be 7% at the midpoint of the guidance, with mid-single-digit revenue growth in Q3 and low double-digit revenue growth in Q4. We expect performance stabilizing in Q4 as we've lapsed year-over-year sales force changes in D2C. Voxi launch contributes to Q4 growth.

Q: Could you talk more about some of the drivers behind profitability and your outlook as well as some of the working capital adjustments? And when should we expect for the company to reach free cash flow breakeven?

A: We've had positive adjusted EBITDA in 4 of the 5 last quarters. We generated $1.2 million in cash in Q2, $4.5 million from operations, and $0.5 million free cash flow. We haven't guided on future cash forecasting, but we're comfortable with our cash position and ability to fund the business.

Q: Can you comment at all on the pricing and gross margins of that product and particularly interested in how it compares to the POCs?

A: We don't guide on revenue per channel or specific margins. Voxi 5 fits into segments, improving rental channel profitability and providing a higher-margin sale in DTC. Pricing and margins vary by channel.

Q: Is there a mention of a Simeox trial or something? Is that right? And I guess why are you running the trial?

A: Yes, we have trials for reimbursement, developing health economic data and marketing claims in US and international markets. The trials support getting proper reimbursement and enhancing marketing for Simeox.

Q: Just wondering where things stand with developing or maybe enhancing is a better word, your kind of connectivity features on your products?

A: We're creating an ecosystem to drive brand preference and loyalty. It allows B2B customers to monitor device health and patients to access information, order supplies, etc. We're integrating into connected applications to tie everything into one ecosystem.