INGN

Core Business & Channel Strategy

• Core portable oxygen concentrator (POC) unit volume grew over 12% year-over-year, outpacing overall market growth. The company is expanding its U.S. B2B sales force targeting HME partners, with a compelling value proposition of an 8-year product useful life (vs. the 5-year industry standard) and growing real-world clinical outcomes data. Sequential growth in B2B customer volume in Q2 indicates early returns on this investment.
• Structural channel mix shift, where HMEs now prescribe POCs from the start of therapy, is creating tailwinds for B2B but ongoing pressure for DTC and rental segments. Management is conducting a full P&L review to align cost structure with growth priorities and maintain financial discipline.

New Product Innovation & Pipeline

• Voxy (stationary oxygen concentrator, SOC): Shipped over 5,000 units to date, gaining traction with HME partners. Voxy addresses a $300 million U.S. TAM, as nearly all POC patients also use a home SOC, allowing Inogen to capture additional value in its core market.
• Aurora (CPAP masks): Customer count more than doubled sequentially quarter-over-quarter. Positive 90-day clinical trial data showed a strong majority of already-satisfied CPAP users preferred Aurora over their existing masks. The U.S. CPAP market has a $2.2 billion TAM, with each 1% of market share equal to ~$20 million in potential annual revenue.
• CEMIAC (airway clearance therapy): Enrollment for the IMPACT 200 trial is on track to generate clinical data needed for CMS reimbursement; addresses a $500 million U.S. TAM for non-cystic fibrosis bronchiectasis alone.
• Completed enrollment and last patient visit for the Semiox H scope study in China, with statistical results expected later in 2026. Semiox regulatory clearance in China is targeted before year-end.
• Published a new clinical assessment tool (QOTE) for long-term oxygen therapy in a leading peer-reviewed journal, strengthening Inogen's scientific credibility and engagement with global respiratory thought leaders.

Organizational & Capital Updates

• Added Andy Reding as the new Chief Operating Officer, bringing 30 years of med tech operations and commercial experience to support the company's scaled growth.
• Generated $2.9 million in operating cash flow and ended the quarter with $107 million in total cash/equivalent/securities, with no debt outstanding, providing strong liquidity for long-term investment. Repurchased 1.1 million shares for $7.5 million in H1 2026, and management believes the stock is undervalued relative to its fundamentals.
• Adjusted EBITDA for Q2 was $2.4 million, a 15% year-over-year improvement; total gross margin expanded 70 basis points year-over-year to 45.5%, driven by cost savings and lower warranty expenses.

• Full year 2026 revenue guidance was revised downward to a range of $355 million to $361 million, representing ~3% year-over-year growth at the midpoint, from the prior guidance range of $366 million to $373 million. The downward revision reflects continued U.S. channel mix pressure on direct businesses and transitory timing impacts from select international distributor inventory adjustments.
• Q3 2026 reported revenue is expected to be roughly in line with Q3 2025's $92.4 million, reflecting the same headwinds of U.S. channel mix shift and international inventory timing.
• Full year 2026 adjusted EBITDA guidance was raised to approximately $4 million, representing 48% growth over 2025's full year adjusted EBITDA of $2.7 million, as cost discipline and efficiency gains offset top-line headwinds.

Total company revenue for Q2 2026 was $95.1 million, a 3% year-over-year increase. 1. U.S. Sales: $42.3 million, down 2% year-over-year, accounting for ~44.5% of total revenue. Strong high single-digit unit volume growth and mid single-digit B2B revenue growth were offset by structural channel mix headwinds in the direct-to-consumer (DTC) segment. 2. U.S. Rentals: $11.6 million, down 12% year-over-year, accounting for ~12.2% of total revenue. The decline reflects an ongoing structural shift where HMEs now provide POCs to patients at the start of therapy, narrowing the traditional direct rental funnel. 3. International Sales: $41.3 million, up 15% year-over-year, marking the 10th consecutive quarter of double-digit growth, and accounting for ~43.4% of total revenue. Growth was driven by broad geographic expansion, deepened distributor relationships, and new market launches, with foreign exchange adding a positive 240 basis point impact to total revenue.

• Ongoing structural U.S. market channel mix shift is faster than previously anticipated, creating persistent pressure on DTC and rental segment revenue that will partially offset B2B growth in H2 2026.
• Transitory impacts from delayed tenders and distributor consolidation have led some international distributors to manage down inventory in H2 2026, pressuring near-term international revenue growth.
• Gaining CMS reimbursement for new therapies like CEMIAC is a high-stakes process with only one opportunity to submit a strong application, requiring successful completion of multiple clinical trials to meet payer requirements.
• Product gross margin faces ongoing structural pressure from the shift to lower-margin B2B sales from higher-margin DTC sales, as well as modest general inflationary input pressures.

Q: Is the DTC business facing permanent ongoing erosion, or can it stabilize and be supplemented with new product sales to remain viable?

A: The structural channel mix shift has moved faster than expected, creating greater near-term headwinds than anticipated. Management expects DTC to stabilize, and sees opportunities to grow the channel by selling new products including Voxy through it. They forecast overall U.S. business will return to growth in H2 2026 even with ongoing DTC declines, and are evaluating strategic options to improve the underperforming rental business.

Q: What drove gross margin improvement in Q2 despite the structural headwind of shifting to lower-margin B2B sales?

A: Ongoing cost-saving initiatives across the business and lower warranty expenses, a reflection of Inogen's product quality that is particularly valued by B2B partners, offset the mix shift headwind. While mix shift will continue to put modest pressure on margins over time, ongoing cost improvement programs and accretive margins from new products are expected to keep gross margin relatively stable going forward.

Q: What is the current quarterly revenue contribution of Voxy and Aurora, and have their growth expectations changed since the prior guidance?

A: Combined new products contributed just over 100 basis points of total revenue growth in Q2 2026, with Aurora seeing sequential doubling of customer count as expected. Growth trajectories for both products remain on track, and their contribution to full year 2026 revenue embedded in the revised guidance is unchanged from prior assumptions; management expects their contribution to accelerate in H2 2026.

Q: How does Inogen plan to maintain patient and provider stickiness as the business mix shifts to the B2B HME channel?

A: Inogen's strategy focuses on building preference across all three stakeholders: providers, patients, and B2HME partners. The company invests in clinical evidence and tools like QOTE to build brand preference and loyalty with providers, uses digital health connectivity to maintain direct patient engagement, and collaborates with HME partners rather than ceding control of the patient relationship, creating a coordinated ecosystem that retains loyalty across channels.