Financial Performance - Total revenue for Q1 2023 was $96.3 million, a decrease of 7.5% compared to Q4 2022's revenue of $104.2 million[68] - U.S. sales for Q1 2023 were $82.3 million, down from $99.8 million in Q4 2022, representing a decline of 17.6%[68] - International sales for Q1 2023 were $14.0 million, a slight decrease from $14.1 million in Q4 2022[68] - Revenue increased to $96.3 million for the three months ended March 31, 2023, up 10% from $87.8 million in the same period of 2022[115] - Gross profit rose to $64.6 million, a 9% increase from $59.1 million year-over-year, with a consistent gross margin of 67%[116] - R&D expenses increased by 18% to $14.8 million, primarily due to a rise in personnel costs[117] - SG&A expenses grew by 9% to $86.2 million, driven by higher travel and personnel costs[118] - Interest income surged to $3.3 million, up from $0.1 million, reflecting higher average investment return rates[119] - Net cash used in operating activities was $29.3 million for the three months ended March 31, 2023, compared to $28.4 million for the same period in 2022, reflecting a slight increase in cash outflow[127] - The company recorded net losses of $35.0 million in Q1 2023, with inventory increasing by $14.3 million and accounts payable decreasing by $4.0 million[128] - Investing activities included net purchases of short-term investments totaling $22.1 million in Q1 2023, compared to net proceeds of $51.7 million from short-term investments in Q1 2022[129] - Cash used in financing activities was $2.3 million in Q1 2023, primarily due to tax withholdings, down from $7.3 million in Q1 2022[130] Market and Product Development - The global spinal cord stimulation (SCS) market is estimated to be approximately $2.3 billion, with the company aiming to expand its market share through superior 10 kHz Therapy[66] - The company received FDA approval for 10 kHz Therapy for chronic intractable pain of the lower limbs in July 2021 and for non-surgical back pain in January 2022, enhancing its product offerings[81][82] - The company plans to continue significant investments in U.S. commercial infrastructure and R&D to support future regulatory submissions and product expansions[70] - The SENZA-PDN study is one of the largest RCTs in spinal cord stimulation with 216 randomized patients, evaluating the efficacy of 10 kHz Therapy for PDN[94] - The company launched its latest generation SCS system, HFX iQ™, in the fourth quarter of 2022, with a full market launch in the first quarter of 2023[93] - The company is investing in R&D to expand into new indications and improve product outcomes, with ongoing clinical trials for PDN and NSBP[93] Challenges and Risks - The COVID-19 pandemic has negatively impacted the demand for elective procedures, with the global SCS therapy market estimated to have decreased by approximately 5% to 10% in 2021[72] - The company faces challenges from macroeconomic conditions, including inflation, supply chain issues, and lower consumer confidence, which may affect elective procedure demand[78] - The company has faced challenges with negative coverage decisions from private insurers, which may impair revenue growth[90] - The company continues to work on expanding payor coverage for its 10 kHz Therapy for PDN and NSBP, a process that may take years and could be costly[91] - Market risks related to interest rates, market prices, and foreign currency exchange have not changed materially since December 31, 2022[138] Financial Obligations and Investments - The company has an accumulated deficit of $642.2 million as of March 31, 2023, primarily due to investments in the development of Senza products and 10 kHz Therapy[70] - The company has minimum annual purchase commitments of $12.8 million for the remainder of 2023 and $19.8 million for each year from 2024 to 2026[135] - Contractual obligations include interest payments of $5.2 million due for the remainder of 2023 and 2024, with total payments of $192.4 million due in 2025[136] - The company plans to vertically integrate manufacturing capabilities at a facility in Costa Rica, with lease obligations of approximately $3.9 million over the term[134] - The company is committed to pay $2.9 million in the next year under a service agreement[135] Coverage and Reimbursement - The company has favorable National Coverage Determination (NCD) and reimbursement by Medicare for chronic back and leg pain, but local MACs can establish their own policies for newer indications like PDN and NSBP[84] - As of the third quarter of 2022, approximately 54% of the addressable US PDN population is covered under a formal policy for PDN, representing about 43.5 million commercially-insured covered lives[87] - Effective January 10, 2023, BCBS New Jersey updated their medical policy to explicitly cover PDN, representing approximately 3.7 million covered lives[89] Manufacturing and Supply Chain - The company is vertically integrating the assembly of its products to mitigate reliance on third-party manufacturers, with a facility in Costa Rica operational since mid-2022[71] - The impact of the COVID-19 pandemic continues to affect operations, alongside costs related to product commercialization and R&D activities[127]

Market Impact and Competition - The COVID-19 pandemic has negatively impacted the global SCS therapy market, which decreased by approximately 5% to 10% throughout 2021[186]. - The global market for spinal cord stimulation (SCS) therapy was estimated at approximately $2.3 billion in 2022, with the United States accounting for about 80% of this market[205]. - The company faces significant competition from established players like Medtronic, Boston Scientific, and Abbott Laboratories, which have launched new SCS systems and have greater resources[208]. - The company’s competitive position may be adversely affected if competitors independently develop similar technologies or if trade secrets are disclosed[288]. - The company’s future product commercialization may be adversely affected by litigation outcomes, which could strain financial resources[276]. Regulatory Approvals and Compliance - The company received FDA approval for the management of chronic intractable pain of the lower limbs associated with painful diabetic neuropathy (PDN) in July 2021 and for non-surgical back pain (NSBP) in January 2022[198]. - The company has received FDA approval for its Senza PMA application, but there is no assurance that this approval will be maintained, which could impact commercial distribution[229]. - The company obtained EU Medical Devices Regulation certification effective January 31, 2023, but any substantial changes to products may require further assessment and could delay growth[234]. - The company must maintain compliance with complex and stringent regulatory requirements, which could lead to unexpected costs or restrictions on operations[230]. - The company is subject to extensive governmental regulation, including compliance with the FDA and EU Medical Devices Regulation, which could impact the ability to market and sell products[304][315]. Financial Performance and Risks - The company incurred net losses of $131.4 million and $83.1 million for the years ended December 31, 2021, and 2020, respectively, with an accumulated deficit of $607.2 million as of December 31, 2022[213]. - The company achieved a net income of $3.0 million for the year ended December 31, 2022, but continues to expect losses as it builds its U.S. commercial operations[213]. - The company’s stock price has experienced significant volatility, which may impact shareholders' ability to resell shares at favorable prices[189]. - The company may incur substantial additional debt in the future, which could intensify existing financial risks[354]. - The company faces potential increases in tax obligations due to recent changes in U.S. federal income tax laws and proposed changes in European countries[369]. Sales and Marketing Challenges - The company is substantially dependent on continued market acceptance in the United States for its 10 kHz Therapy, which is still in the early stages of commercialization[198]. - The company has incurred significant costs to build its sales force in the United States and expects these costs to continue as it initiates its commercial rollout for the PDN and NSBP markets[198]. - The company emphasizes the importance of educating physicians on the benefits and proper use of its 10 kHz Therapy to drive market acceptance and sales growth[204]. - The company is working to expand payor coverage for its 10 kHz Therapy in patients with diabetic peripheral neuropathy (PDN) and non-surgical back pain (NSBP), but faces challenges in achieving broad acceptance[220]. - The company’s ability to grow revenue may be impaired by negative coverage and reimbursement decisions from private insurers[220]. Intellectual Property and Legal Risks - The company is involved in ongoing lawsuits related to intellectual property disputes, which could divert significant resources and hinder commercialization efforts[185]. - The company faces significant risks related to securing necessary patent protections, which could allow competitors to market similar products without incurring substantial development costs[225]. - The company is at risk of intellectual property disputes, which could divert resources and hinder commercialization efforts[271]. - The company may need to indemnify customers and suppliers against third-party intellectual property claims, potentially incurring substantial costs[278]. - The company faces ongoing legal challenges regarding its intellectual property, including oppositions filed by Boston Scientific and Medtronic in the EU and a claim in German courts, which may require significant management time and financial resources[280]. Operational and Supply Chain Risks - The company must maintain high levels of inventory, which could consume resources and lead to cash flow issues[189]. - The company is vulnerable to supply chain disruptions and price fluctuations due to dependence on third-party manufacturers and suppliers[185]. - The company has established internal manufacturing capabilities at its facility in Costa Rica, but remains dependent on third-party manufacturers and suppliers, which exposes it to supply shortages and price fluctuations[240]. - The company relies on third-party, single-source, and sole-source suppliers for critical components, and any loss of these suppliers could harm its business[246]. - Any interruption or delay in obtaining products from third-party suppliers could impair the company's ability to meet customer demand and result in lost sales[245]. Future Growth and Strategic Planning - The company plans to continue investing in the commercialization of its Senza system and 10 kHz Therapy, which will require substantial cash resources and may necessitate seeking additional funding[291]. - The company’s ability to grow revenues may be adversely affected if it fails to attract and retain qualified sales personnel[227]. - Future growth will impose significant added responsibilities on management, including the need to identify, recruit, train, and integrate additional employees[250]. - The company’s future success relies on developing and obtaining regulatory approval for additional chronic pain indications for Senza and introducing new products or enhancements in a timely manner[344]. - The ability to identify and anticipate physician and patient needs, develop new products, and comply with regulatory requirements are critical for the success of new product offerings[347]. Compliance and Cybersecurity - The company is subject to various healthcare and data privacy laws, and non-compliance could result in material adverse effects on its business[333]. - The company is subject to the EU General Data Protection Regulation (GDPR), which imposes significant accountability obligations and potential fines of up to €20 million or 4% of global turnover for non-compliance[321]. - Cybersecurity risks have increased due to the reliance on internet technology and remote work, potentially disrupting operations and affecting business results[371]. - The company has not experienced significant system failures or security breaches to date, but any future incidents could materially disrupt operations[374]. - Non-compliance with regulatory requirements could lead to severe consequences, including product recalls, loss of regulatory approvals, and increased operational costs[307][309].

Nevro Corporation (NYSE:NVRO) Q4 2022 Earnings Conference Call February 16, 2023 4:30 PM ET Company Participants Julie Dewey - Chief Corporate Communications and Investor Relations Officer Keith Grossman - Chairman, CEO and President Rod MacLeod - Chief Financial Officer Conference Call Participants Joanne Wuensch - Citibank Chris Pasquale - Nephron Vik Chopra - Wells Fargo Brandon Vazquez - William Blair Robbie Marcus - J.P. Morgan Dave Rescott - Truist Securities Simran Kaur - Piper Sandler Operator Good ...

Nevro Corporation (NYSE:NVRO) Q3 2022 Earnings Conference Call November 2, 2022 4:30 PM ET Company Participants Julie Dewey - Chief Corporate Communications & IR Officer Keith Grossman - Chairman, CEO & President Roderick MacLeod - CFO Conference Call Participants Simran Kaur - Piper Sandler & Co. Joanne Wuensch - Citi Devin Geiman - Nephron Research David Rescott - Truist Securities Brandon Vazquez - William Blair & Company Nathan Treybeck - Wells Fargo Securities Robert Marcus - JPMorgan Chase & Co. David ...

3Q 2022 Earnings Presentation N O VE M BER 2 , 2 0 2 2 Dania Forward-Looking Statements In addition to historical information, this presentation contains forward-looking statements reflecting the company's current beliefs and expectations of management made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, including: our full year 2022 financial guidance; our belief that we will continue to see a gradual overall trend of SCS market recovery, which we expect to c ...

PART I—FINANCIAL INFORMATION [Item 1. Condensed Consolidated Financial Statements (unaudited)](index=3&type=section&id=Item%201.%20Condensed%20Consolidated%20Financial%20Statements%20%28unaudited%29) Unaudited Q3 2022 financials show net income growth from a litigation credit, assets at **$605.5 million**, and ASU 2020-06 adoption impacting debt [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets reached **$605.5 million** as of Sep 30, 2022, driven by cash growth, with liabilities and equity also increasing Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | Sep 30, 2022 | Dec 31, 2021 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $130,839 | $34,710 | | Total current assets | $566,073 | $531,204 | | Total assets | $605,512 | $574,544 | | **Liabilities & Equity** | | | | Total current liabilities | $80,298 | $82,203 | | Long-term debt | $186,559 | $151,310 | | Total liabilities | $280,577 | $270,928 | | Total stockholders' equity | $324,935 | $303,616 | [Condensed Consolidated Statements of Operations and Comprehensive Loss](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) Q3 2022 revenue grew 8% to **$100.5 million**, with a **$105 million** litigation credit driving **$81.5 million** net income Q3 2022 vs Q3 2021 Performance (in thousands, except per share data) | Metric | Q3 2022 | Q3 2021 | | :--- | :--- | :--- | | Revenue | $100,466 | $93,205 | | Gross Profit | $69,302 | $64,630 | | Income (Loss) from operations | $82,082 | $(46,444) | | Certain litigation charges (credits) | $(105,000) | $20,000 | | Net income (loss) | $81,508 | $(50,075) | | Diluted EPS | $2.22 | $(1.44) | Nine Months Ended Sep 30, 2022 vs 2021 Performance (in thousands, except per share data) | Metric | Nine Months 2022 | Nine Months 2021 | | :--- | :--- | :--- | | Revenue | $292,521 | $284,145 | | Gross Profit | $201,128 | $196,910 | | Income (Loss) from operations | $25,522 | $(84,719) | | Certain litigation charges (credits) | $(105,000) | $20,000 | | Net income (loss) | $22,193 | $(101,226) | | Diluted EPS | $0.63 | $(2.91) | [Condensed Consolidated Statements of Cash Flows](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Nine months ended Sep 30, 2022, saw **$38.1 million** net cash from operations, a significant improvement from prior year Cash Flow Summary (Nine Months Ended Sep 30, in thousands) | Cash Flow Activity | 2022 | 2021 | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $38,098 | $(26,722) | | Net cash provided by investing activities | $63,832 | $235,947 | | Net cash used in financing activities | $(3,831) | $(172,657) | | Net increase in cash, cash equivalents and restricted cash | $96,129 | $36,288 | [Notes to Condensed Consolidated Financial Statements](index=7&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Notes detail ASU 2020-06 adoption, revenue by geography, and the **$105 million** Boston Scientific litigation credit - The company adopted ASU 2020-06 on January 1, 2022, which simplifies accounting for convertible instruments, resulting in a **$34.3 million** increase to long-term debt, a **$48.3 million** reduction to additional paid-in capital, and a **$14.0 million** reduction to the accumulated deficit[27](index=27&type=chunk)[28](index=28&type=chunk) Revenue by Geography (in thousands) | Region | Q3 2022 | Q3 2021 | Nine Months 2022 | Nine Months 2021 | | :--- | :--- | :--- | :--- | :--- | | United States | $86,130 | $78,052 | $248,393 | $237,806 | | International | $14,336 | $15,153 | $44,128 | $46,339 | | **Total** | **$100,466** | **$93,205** | **$292,521** | **$284,145** | - Revenue from the Painful Diabetic Neuropathy (PDN) indication, approved in July 2021, accounted for **13%** of worldwide permanent implant procedures in Q3 2022, generating approximately **$13.4 million** in revenue[32](index=32&type=chunk) - In August 2022, Nevro settled its intellectual property litigation with Boston Scientific, receiving a net payment of **$85.0 million** and a **$20.0 million** verdict release, totaling a **$105.0 million** credit[53](index=53&type=chunk)[65](index=65&type=chunk)[143](index=143&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=21&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Q3 2022 revenue growth, profitability from a **$105 million** litigation credit, and investments in new indications and R&D [Overview and Recent Developments](index=21&type=section&id=Overview%20and%20Recent%20Developments) Nevro focuses on chronic pain with Senza SCS, expanding indications to PDN and NSBP, and recently gained FDA approval for Senza HFX iQ - Nevro is focused on its Senza® spinal cord stimulation (SCS) system, featuring proprietary 10 kHz Therapy for chronic pain[89](index=89&type=chunk) - Recent FDA approvals include expanded labeling for Painful Diabetic Neuropathy (PDN) in July 2021 and Non-Surgical Back Pain (NSBP) in January 2022[89](index=89&type=chunk) - The company received FDA approval for its latest system, Senza HFX iQ™, in October 2022 and plans a limited U.S. release in Q4 2022, followed by a broad launch in early 2023[90](index=90&type=chunk) [Results of Operations](index=28&type=section&id=Results%20of%20Operations) Q3 2022 revenue increased 8% to **$100.5 million**, with a **$105 million** litigation credit significantly boosting operating income Q3 2022 vs Q3 2021 Revenue (in millions) | Region | Q3 2022 | Q3 2021 | % Change | | :--- | :--- | :--- | :--- | | U.S. Revenue | $86.1 | $78.1 | +10% | | International Revenue | $14.3 | $15.2 | -6% | | **Total Revenue** | **$100.5** | **$93.2** | **+8%** | - For Q3 2022, Painful Diabetic Neuropathy (PDN) represented **13%** of worldwide permanent implant procedures, resulting in approximately **$13.4 million** in revenue[139](index=139&type=chunk) - Gross margin was flat at **69%** for both the three and nine months ended September 30, 2022 and 2021[140](index=140&type=chunk)[149](index=149&type=chunk) - The settlement with Boston Scientific resulted in a **$105 million** credit to 'Certain litigation charges (credits)' in Q3 2022, which was the primary driver of profitability for the quarter and nine-month period[143](index=143&type=chunk)[153](index=153&type=chunk) - Interest expense decreased significantly in 2022 due to the adoption of ASU 2020-06, which changed the accounting for the company's 2025 convertible notes[145](index=145&type=chunk)[155](index=155&type=chunk) [Liquidity, Capital Resources and Plan of Operations](index=31&type=section&id=Liquidity%2C%20Capital%20Resources%20and%20Plan%20of%20Operations) Nevro had **$386.9 million** in liquidity as of Sep 30, 2022, with **$38.1 million** cash from operations, sufficient for the next 12 months - The company had cash, cash equivalents, and short-term investments of **$386.9 million** as of September 30, 2022[158](index=158&type=chunk) - Net cash provided by operating activities was **$38.1 million** for the nine months ended Sep 30, 2022, compared to net cash used of **$26.7 million** in the prior-year period[162](index=162&type=chunk)[163](index=163&type=chunk) - The company has minimum annual purchase commitments of **$17.6 million** for each year from 2023 to 2025[170](index=170&type=chunk) - Contractual obligations for the 2025 Notes include annual interest payments of **$5.2 million** for 2023-2024 and a final payment of principal and interest totaling **$192.4 million** in 2025[172](index=172&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=34&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) No material changes in market risk exposures related to interest rates, market prices, or foreign currency exchange since year-end 2021 - There have been no material changes in the company's market risk exposures related to interest rates, market prices, and foreign currency exchange since year-end 2021[174](index=174&type=chunk) [Item 4. Controls and Procedures](index=34&type=section&id=Item%204.%20Controls%20and%20Procedures) Disclosure controls and procedures were effective as of Sep 30, 2022, with no material changes to internal control over financial reporting - The CEO and CFO concluded that the company's disclosure controls and procedures were effective at a reasonable assurance level as of September 30, 2022[176](index=176&type=chunk) - No changes occurred during the quarter that materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[177](index=177&type=chunk) PART II—OTHER INFORMATION [Item 1. Legal Proceedings](index=34&type=section&id=Item%201.%20Legal%20Proceedings) Legal proceedings information, primarily the Boston Scientific settlement, is incorporated by reference from Note 6 of the financial statements - Information regarding legal proceedings is incorporated by reference from Note 6, Commitments and Contingencies, in Part I, Item 1 of the report[179](index=179&type=chunk) [Item 1A. Risk Factors](index=34&type=section&id=Item%201A.%20Risk%20Factors) No material changes to the company's risk factors have occurred since the Annual Report on Form 10-K filed in February 2022 - There have been no material changes to the company's risk factors since the Annual Report filed on February 23, 2022[180](index=180&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=34&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) No unregistered sales of equity securities or use of proceeds from such sales were reported during the period - There were no unregistered sales of equity securities during the reporting period[181](index=181&type=chunk) [Item 3. Defaults Upon Senior Securities](index=35&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) No defaults upon senior securities were reported - None reported[183](index=183&type=chunk) [Item 4. Mine Safety Disclosures](index=35&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not applicable[184](index=184&type=chunk) [Item 5. Other Information](index=35&type=section&id=Item%205.%20Other%20Information) No other information was reported for this item - None reported[185](index=185&type=chunk) [Item 6. Exhibits](index=36&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the quarterly report, including corporate governance documents and officer certifications - Lists exhibits filed with the Form 10-Q, including CEO and CFO certifications required by the Sarbanes-Oxley Act[187](index=187&type=chunk) [Signatures](index=38&type=section&id=SIGNATURES) Official signatures confirm the accuracy and completeness of the quarterly report

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Financial Data and Key Metrics Changes - Worldwide revenue for Q2 2022 was $104.2 million, a 2% increase year-over-year and an 11% increase compared to Q2 2019 [37] - U.S. revenue was $89 million, up 5% from $85 million in the prior year and up 14% from $78.1 million in Q2 2019 [38] - Gross profit for Q2 2022 was $72.7 million, a 4% increase compared to $70 million in the prior year, with a gross margin of 69.8% [39] - Net loss from operations was $23.8 million, compared to a loss of $15.8 million in the prior year [42] - Non-GAAP adjusted EBITDA for Q2 2022 was a loss of $4.5 million, compared to a loss of $3 million in the prior year [42] Business Line Data and Key Metrics Changes - PDN represented 11% of worldwide permanent implant procedures, contributing approximately $11 million in revenue, an increase of 83% sequentially [23] - Total U.S. permanent implant procedures increased 8% year-over-year and 13% compared to Q2 2019 [13] - Trial procedures increased 14% year-over-year and 4% compared to Q2 2019 [13] Market Data and Key Metrics Changes - U.S. permanent implant procedures for the total market were up 1.5% year-over-year but down 4% compared to the same period in 2019 [20] - Nevro's permanent procedures were up 5% year-over-year and up 13% compared to the same period in 2019, outpacing the market growth by 350 basis points [21] Company Strategy and Development Direction - The company is focusing on expanding its PDN and non-surgical back pain (NSBP) markets, with a strategy to educate and identify patients who are not candidates for surgery [32][34] - The company plans to launch a next-generation product platform leveraging clinical data to enhance therapy delivery [34] - The recent settlement with Boston Scientific is expected to positively impact the company's financials and reduce litigation-related expenses [11][41] Management's Comments on Operating Environment and Future Outlook - Management noted that while there are encouraging signs of recovery, the pace may be slower than anticipated due to staffing issues and market dynamics [9][10] - The company expects total revenue growth for the second half of the year to be between 6% to 11% [48] - Management remains optimistic about the PDN market, expecting revenue contributions to be higher than previously guided [31] Other Important Information - The company has seen a significant increase in patient referrals and engagement, with 55% of surveyed physicians noting higher trial volumes [17] - The cumulative approval rate for PDN cases through the company's access group climbed to 84% [31] - The company is managing inflationary pressures and supply chain challenges while maintaining a focus on growth [51] Q&A Session Summary Question: How does the company view the trade-off between PDN and core SCS sales? - Management believes that PDN has positively impacted core SCS sales, with Nevro's procedures outperforming the market despite broader challenges [58][59] Question: What is the guidance for the second half of the year? - The company expects growth of over 10% in Q4, with continued positive trends in PDN contributing to overall performance [60] Question: Are staffing shortages impacting PDN momentum? - Staffing shortages have affected PDN, but the trial-to-perm conversion curve is not as significantly impacted as with core patients [64][66] Question: What is the status of the PDN referral sales team? - The expansion of the PDN referral sales team to 50 reps has been completed, and they are actively engaging with referring accounts [68] Question: What trends are observed in the international market? - The international business has been more severely impacted by the pandemic, particularly in the U.K. and Australia, but recovery is expected [76] Question: Is there any pricing pressure in the market? - The company continues to experience some pricing pressure, primarily due to a shift in care settings from hospitals to ASCs [100][102]

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UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2022 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 (650) 251-0005 (Registrant's telephone number, including area code) Securities registered pursuant to Section 12(b) of the Act: | Title of each class | Trading Symbol | Name of each exchange ...