Nevro (NVRO) Reports Prelim Q4 Results

Nevro Corp. (NYSE: NVRO), a global medical device company that is delivering comprehensive, life-changing solutions for the treatment of chronic pain, today announced its preliminary, unaudited fourth-quarter and full-year 2023 revenue results. The company also announced a restructuring, including laying off 5% of its workforce, that will be substantially complete by the end of the first quarter of 2024. The vast majority of layoffs affected internally focused employees and not customer-facing personnel in the field.

Financial Highlights

• Fourth-quarter 2023 worldwide revenue of approximately $116.0 million grew 2% as reported and 1% constant currency compared with fourth-quarter 2022
• Full-year 2023 worldwide revenue of approximately $425.0 million, representing 5% growth reported and 4.5% on a constant currency basis
• Painful Diabetic Neuropathy indication (PDN) Q4 sales of approximately $22.4 million grew 29% over 2022, bringing full-year 2023 PDN sales to $77.9 million and 63% growth over full-year 2022

Preliminary, Unaudited Fourth-Quarter 2023 Revenue Results

Preliminary, unaudited fourth-quarter 2023 worldwide revenue is expected to be approximately $116.0 million, an increase of 2% as reported and 1% on a constant currency basis, compared with $113.8 million in the fourth quarter of 2022. PDN represented approximately $22.4 million in revenue and 20% of worldwide permanent implant procedures in the fourth quarter of 2023.

Preliminary, unaudited fourth-quarter 2023 U.S. revenue is expected to be approximately $101.5 million, reflecting growth of 2% compared with $99.8 million in the fourth quarter of 2022. Fourth-quarter 2023 U.S. trial procedures were down approximately 1% versus the prior-year quarter and in line with the company's expectations. Fourth-quarter 2023 U.S. PDN trial procedures represented approximately 24% of total U.S. trial volume.

Preliminary, unaudited fourth-quarter 2023 international revenue is expected to be approximately $14.5 million, an increase of 3% as reported and a decrease of 1% on a constant currency basis, compared with $14.1 million in the fourth quarter of 2022.

Preliminary, Unaudited Full-Year 2023 Revenue Results

Nevro's preliminary, unaudited full-year 2023 worldwide revenue is expected to be approximately $425.0 million, an increase of 5% as reported, or an increase of 4.5% on a constant currency basis, compared with $406.4 million for full-year 2022. Worldwide revenue for 2023 includes approximately $77.9 million of revenue for PDN, compared with $48.0 million for full-year 2022. Preliminary, unaudited full-year 2023 U.S. revenue is expected to be approximately $366.5 million, reflecting growth of 5% over $348.2 million in 2022. Preliminary, unaudited full-year 2023 international revenue is expected to be approximately $58.5 million, an increase of 0.5% as reported, or flat on a constant currency basis, compared with $58.2 million in 2022.

"We are pleased with our preliminary fourth-quarter 2023 revenue which exceeded our expectations and demonstrates that our commercial realignment and execution are delivering stronger and more consistent growth," said Kevin Thornal, Nevro's CEO. "Also, we are excited to enter the fast-growing sacroiliac joint space through our recent acquisition of Vyrsa Technologies, which allows us to leverage one of our greatest assets – our commercial team. As we look ahead, we remain focused on delivering on our three key pillars of commercial execution, market penetration and profit progress."

Nevro expects to report its complete fourth-quarter and full-year 2023 financial results and provide 2024 financial guidance in February 2024.

Restructuring

The company also announced a restructuring, including laying off 63 employees, or 5% of its total number of employees, that will be substantially complete by the end of the first quarter of 2024. The layoffs affect employees in corporate, sales and marketing, and operations positions but are largely focused on internally facing roles within the organization.

"This restructuring supports our strategy and allows us to focus our investments to further position Nevro for long-term growth and profitability. This was a difficult decision that impacts some of our team members who have been committed to our mission. We appreciate their dedication and contributions to Nevro," Thornal said. "As we look ahead, we remain focused on bringing innovative products to market, working closely with physicians treating patients living with chronic pain and creating value for all our stakeholders."

Nevro expects the restructuring to have a $14 million to $15 million positive impact on its full-year 2024 adjusted EBITDA, which will be largely offset by normal operating expense increases, including inflation, merit increases and other acquisition-related expenses. Excluding acquisition-related operating expenses, the company expects 2024 operating expenses to be approximately flat compared with 2023 operating expenses. In addition, GAAP operating expenses in the first quarter of 2024 will reflect a $5 million to $6 million restructuring charge. The company will provide more details on the restructuring during its fourth-quarter 2023 earnings call in February.

Nevro to Participate in J.P. Morgan 42^nd Annual Healthcare Conference

As previously announced, members of Nevro's management team will participate in the J.P. Morgan 42^nd Annual Healthcare Conference on Thursday, January 11, 2024. The company's formal presentation will begin at 8:15 am PST (11:15 am EST).

A live webcast of the formal presentation and Q&A session, as well as an archived recording, will be available on the Events and Presentations page in the Investors section of the company's website at www.nevro.com.

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