Nevro(US:NVRO)2022-02-24 00:42Financial Data and Key Metrics Changes - Nevro reported worldwide revenue of $102.8 million for Q4 2021, a 6% decrease compared to $109.7 million in the prior year period and a 10% decrease compared to Q4 2019 [56] - U.S. revenue for Q4 2021 was $88.4 million, down 7% from $94.6 million in the prior year and down 10% from $97.9 million in Q4 2019 [57] - International revenue was $14.3 million, a decrease of 5% as reported and 4% on a constant currency basis compared to $15.1 million in the prior year [58] - Gross profit for Q4 2021 was $69.1 million, a decrease of 11% from $78.0 million in the prior year [59] - Net loss from operations for Q4 2021 was $26.2 million, compared to a loss of $0.9 million in the prior year [65] Business Line Data and Key Metrics Changes - Total U.S. permanent implant procedures decreased by 5% in Q4 compared to the prior year, while trial procedures increased by 3% [14] - Worldwide PDN revenue in Q4 was approximately $4 million, with PDN trials growing 93% sequentially compared to Q3 [26] Market Data and Key Metrics Changes - The U.S. SCS market was estimated to be down about 4% year-over-year, while Nevro's U.S. revenues were roughly equal to the full-year 2019 [20] - The company noted that patient reluctance to reengage and healthcare facility restrictions impacted procedure volumes [18] Company Strategy and Development Direction - Nevro is focused on expanding its PDN launch, which is the only FDA-approved high-frequency paresthesia-free therapy for patients with painful diabetic neuropathy [24] - The company plans to expand its PDN referral sales team by around 50% during 2022 to enhance market penetration [35] - Nevro aims to leverage its differentiated high-frequency therapy to capture market share in underpenetrated segments [54] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism that the worst of the COVID impact may be behind the company, with signs of recovery in procedure volumes [21] - The company anticipates a gradual recovery in the SCS market, with expectations for solid growth in the second half of 2022 [17] - Management highlighted the importance of ongoing investments in PDN and NSRBP to drive future growth [66] Other Important Information - The company reported a decrease in cash, cash equivalents, and short-term investments to $362 million as of December 31, 2021, primarily due to cash used in operations [67] - Nevro received FDA approval for its PMA supplement to treat non-surgical refractory back pain, marking a significant milestone for the company [51] Q&A Session Summary Question: Guidance and Core Business Growth - Analyst inquired about the guidance and growth expectations for the core business excluding PDN contributions, and whether significant reimbursement wins are needed to achieve the projected PDN revenue [89] - Management indicated that the guidance reflects conservatism due to lack of visibility but expects growth rates to improve in the latter half of the year [90][92] Question: Q1 Guidance and Omicron Impact - Another analyst asked for clarification on the Q1 guidance and the impact of Omicron on trial rates and cancellations [95] - Management explained that the guidance is based on trial performance and the expectation of recovering some of the canceled cases [96][98] Question: PDN Indication and Market Access - An analyst questioned how the company benefits from the PDN indication now that FDA approvals are based on smaller studies and payers are granting broad coverage [104] - Management responded that they expect more approvals and are making strong cases to payers based on data superiority [110] Question: Backlog and Core Business Impact - An analyst asked about the backlog due to Omicron and whether the PDN launch would have a halo effect on the core back and leg business [116] - Management expressed confidence in recapturing a significant number of patients affected by cancellations and noted early signs of a positive impact from the PDN launch on the core business [118][120]