Nevro(US:NVRO)2022-08-07 03:27Financial 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]