What Inogen (INGN) Said on Its Q3 Earnings Call

Key Points

• Revenue fell 2.4% to $77.2 million as a 3.8% increase in U.S. sales was more than offset by a 9% decline in international sales, driven by weaker spending and inventory management among large European customers. Portable oxygen concentrator volume rose nearly 6%.
• After selling its U.S. oxygen rental business, Inogen plans a cost-reduction program targeting $20 million in annualized savings by the end of 2027. The sale and planned cuts are expected to lower annualized operating expenses by more than $40 million versus the pre-sale run rate.
• Inogen forecast fourth-quarter revenue of $65 million to $68 million and full-year revenue of $298 million to $301 million, alongside a full-year adjusted net loss of $7 million to $8 million. Its GAAP loss from continuing operations widened to $14.8 million, including a $10.6 million noncash goodwill impairment.

Inogen NASDAQ: INGN reported lower third-quarter revenue as weaker spending by large European customers offset a return to growth in U.S. sales. The respiratory care company also outlined a $20 million annualized cost-reduction program following the sale of its U.S. oxygen rental business.

Revenue from continuing operations fell 2.4% to $77.2 million from $79.1 million a year earlier. On a constant-currency basis, revenue declined 3.2%, Chief Financial Officer Jason Richardson said on the company’s Nov. 5 earnings call.

New CEO Andy Reding said U.S. sales grew year over year for the first time since the fourth quarter of 2024, but acknowledged that the overall results fell short of the company’s objectives. “These results are not where they need to be, and we’re taking action to improve them,” he said.

U.S. Growth Offset by European Softness

U.S. sales rose 3.8% to $42.2 million, supported by distributor demand and new products. Richardson said distributors were increasing the number of new patients starting on portable oxygen concentrators, or POCs.

International sales fell 9% to $34.9 million, primarily because several large European customers reduced capital spending and managed their inventories. Richardson said the company expects that trend to continue in the fourth quarter after strong demand in the first half of the year.

Across the business, POC unit volume increased nearly 6% year over year to 51,900 units in the quarter. Reding said volume was up 9.5% for the year to date. New products contributed approximately 250 basis points of revenue growth in the quarter, according to management.

Adjusted gross margin declined to 44.2% from 45.9% a year earlier. Richardson attributed the decline primarily to lower international sales, partially offset by manufacturing cost improvements. Adjusted operating expenses fell 4.4% to $35.3 million.

Rental Sale and Cost Reductions

Inogen completed the sale of its U.S. oxygen rental business on Nov. 2 for estimated cash consideration of up to $24.8 million, which it expects to receive in the first half of 2027. The business was classified as discontinued operations for the third quarter, and prior comparable periods were recast.

Richardson said the transaction would simplify the company and allow it to direct resources toward higher-priority opportunities. Inogen also plans to implement a separate cost-reduction program beginning in the fourth quarter, targeting approximately $20 million in annualized savings by the end of 2027 relative to annualized year-to-date operating expenses.

The company expects to complete the first $10 million of those reductions before the end of 2026. Most of the savings are expected to come from selling, general and administrative expenses. Together, the program and divestiture are expected to reduce annualized operating expenses by more than $40 million compared with the run rate before the sale, Richardson said.

Loss and Outlook

The GAAP loss from continuing operations widened to $14.8 million from $3.6 million a year earlier. The latest result included a $10.6 million noncash goodwill impairment, which Richardson said primarily reflected a decline in Inogen’s stock price that pushed its market capitalization below stockholders’ equity.

Management gave conflicting descriptions of adjusted net results: Reding cited a $0.4 million adjusted net loss from continuing operations, while Richardson described $0.4 million of adjusted net income. Richardson also reported an adjusted net loss of $0.02 per diluted share, compared with earnings of $0.04 a year earlier.

Inogen ended the quarter with $97.7 million in cash equivalents, marketable securities and restricted cash, and no debt outstanding. It expanded its share repurchase authorization by $15 million to a total of $45 million in connection with the rental sale.

For the fourth quarter, Inogen forecast revenue of $65 million to $68 million. Its full-year continuing-operations outlook calls for revenue of $298 million to $301 million and an adjusted net loss of $7 million to $8 million. Richardson said the company is shifting its preferred earnings metric from adjusted EBITDA to adjusted net earnings following the divestiture.

Reding, who joined Inogen as chief operating officer in July, said the company would focus on commercial execution, product development and operating performance. He also said Inogen is expanding into adjacent sleep and airway-clearance markets, where its Aurora and Voxi products are beginning to contribute growth. The company did not take live questions on the call.

About Inogen (NASDAQ:INGN)

Inogen, Inc is a medical technology company that develops, manufactures and markets portable oxygen concentrators for people who require long-term supplemental oxygen therapy. Its devices separate oxygen from ambient air and deliver concentrated oxygen without the need for traditional compressed-gas or liquid-oxygen tanks.

The company's product portfolio has included the Inogen One portable oxygen concentrator line, as well as stationary and related oxygen therapy products. These systems are designed to support mobility and independence for patients with chronic respiratory conditions while offering features such as rechargeable batteries, portability and various oxygen-delivery settings.

Founded in 2001 and headquartered in Goleta, California, Inogen sells its products through direct-to-consumer channels, health-care providers, distributors and other commercial partners.

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