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Inari Medical, Inc. (NARI)·Q1 2024 Earnings Summary

Executive Summary

  • Q1 2024 revenue was $143.2M (+23.3% YoY; +$11.1M QoQ), driven by continued adoption in core VTE, rapid Emerging Therapies growth, and strong international traction; gross margin was 86.8% .
  • Full-year 2024 revenue guidance was raised to $592.5–$602.5M (from $580–$595M), with management reaffirming the path to sustained operating profitability in H1 2025; Q2 revenue expected flat-to-slightly up sequentially .
  • Non-GAAP operating loss was $5.6M, excluding $6.3M contingent consideration, $2.8M acquisition-related costs, and $2.5M intangible amortization tied to LimFlow; GAAP net loss was $24.2M ($0.42 per share) .
  • International revenue reached ~$9.5M (+120% YoY), the largest sequential dollar increase to date; Emerging Therapies revenue grew 185% YoY to $6.0M, reflecting early traction in chronic venous disease and CLTI (LimFlow) .
  • Near-term stock catalysts: guidance raise, proposed NTAP for LimFlow (~+$16k per case) anticipated to become effective in October, and the PEERLESS RCT readout in 2H 2024 .

What Went Well and What Went Wrong

What Went Well

  • Strong top-line growth: Revenue $143.2M (+23.3% YoY); VTE $137.2M (+20.3% YoY); Emerging Therapies $6.0M (+184.5% YoY) .
  • International momentum: ~$9.5M revenue (+120% YoY), with Europe leading and contributions from LATAM, Canada, and APAC; largest sequential increase to date .
  • Strategic progress and confidence on profitability timeline: “We are reaffirming our expectations to reach sustained operating profitability in the first half of 2025” (CEO) ; guidance raised by ~$10M at midpoint vs ~$5M Q1 beat .

What Went Wrong

  • Increased GAAP operating loss: -$17.2M vs -$5.3M in Q1 2023, driven by expense growth, contingent consideration, acquisition costs, and amortization related to LimFlow .
  • Gross margin compression: 86.8% vs 88.2% prior year on international mix, ramp costs for new products, and product mix .
  • DOJ Civil Investigative Demand (CID) lingering overhang: company continues to cooperate; management does not expect commercial impact, but resolution likely measured in “quarters…if not years” .

Financial Results

MetricQ3 2023Q4 2023Q1 2024Vs Estimates
Revenue ($USD Millions)$126.4 $132.1 $143.2 N/A
Gross Margin %88.5% 87.1% 86.8% N/A
GAAP Operating Income (Loss) ($M)$2.1 $(9.3) $(17.2) N/A
Non-GAAP Operating Income (Loss) ($M)N/A$(0.3) $(5.6) N/A
GAAP Net Income (Loss) ($M)$3.2 $(4.7) $(24.2) N/A
Diluted EPS ($)$0.05 $(0.08) $(0.42) N/A

Note: S&P Global Wall Street consensus estimates were unavailable via tool at time of writing.

Segment Breakdown

Segment Revenue ($USD Millions)Q3 2023Q4 2023Q1 2024
VTE$121.5 $126.7 $137.2
Emerging Therapies$4.9 $5.4 $6.0
Total$126.4 $132.1 $143.2

KPIs and Operating Metrics

KPIQ3 2023Q4 2023Q1 2024
International Revenue ($USD Millions)~$8.0 ~$8.0 ~$9.5
Cash & Short-term Investments ($USD Millions)$351.3 (end Q3 cash+investments) $115.5 (cash $38.6 + ST investments $76.9) ~$102 (CFO commentary)
Cash from Operations ($USD Millions)N/A$35.9 FY 2023 $(12.3) Q1 2024
Gross Margin %88.5% 87.1% 86.8%

Non-GAAP adjustments (Q1 2024): $6.3M contingent consideration, $2.8M acquisition costs, $2.5M amortization .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Revenue ($USD Millions)FY 2024$580–$595 $592.5–$602.5 Raised
Operating Profitability TimingConsolidatedH1 2025 H1 2025 reaffirmed Maintained
Gross MarginFY 2024Mid-80s longer-term; low ~87% near-term (Q4 commentary) “Fairly flat/consistent” with Q1 level (~86.8%) for 2024 (CFO) Maintained (qualitative)
Quarterly PhasingQ2 2024N/AQ2 revenue flat to slightly up sequentially New (qualitative)

Earnings Call Themes & Trends

TopicPrevious Mentions (Q3 2023, Q4 2023)Current Period (Q1 2024)Trend
Revenue Growth & PhasingQ4 guide 4% QoQ into Q1; back-half strength expected Q1 +$11M QoQ; Q2 flat-to-slightly up; back-half acceleration Steady growth; seasonal caution in Q2
Gross Margin TrajectoryLow 87% near-term; mid-80s LT profile 86.8% in Q1; “fairly flat” for 2024 Slight compression; stable across 2024
Competitive DynamicsTrialing in 2023; maintained leadership Continued entrants; clear market leader; share resilient Competitive but manageable
RCTs & Evidence (PEERLESS/DEFIANCE/PEERLESS II)PEERLESS enrollment completed; readout 2H24 PEERLESS readout 2H24 confirmed; registry CLOUT 2-year positive Building toward guideline impact
Emerging TherapiesRevCore/ InThrill traction; Artix gen2 in 2024; LimFlow foundational year Venacor limited release; Artix gen2 mid-2024; NTAP proposed for LimFlow Portfolio expansion; early traction
International Expansion~30 countries; France reimbursement; China/Japan target 2024 $9.5M Q1; largest sequential increase; China/Japan by year-end Broadening footprint, accelerating

Management Commentary

  • CEO on profitability: “We are reaffirming our expectations to reach sustained operating profitability in the first half of 2025” .
  • CFO on guidance raise and seasonality: “We are raising our full year 2024 revenue guidance… We expect Q2 revenue to be flat to slightly up sequentially” .
  • CMO on PEERLESS: “PEERLESS…randomizing FlowTriever to catheter-directed thrombolysis… if positive… will go a long way in shifting…towards…mechanical thrombectomy” .
  • CEO on competitive posture: “We remain the clear market leader… we’re going to compete aggressively… and continue to focus on…high-quality data, market development” .
  • CEO on LimFlow NTAP: “CMS proposed…NTAP…add up to an incremental $16,000… We expect to see a final ruling…later this year” .

Q&A Highlights

  • U.S. core VTE growth and market dynamics: Global VTE +20% YoY; U.S. slightly slower off larger base; leadership intact (PE ~4:1 lead; DVT ~1.5–2:1) .
  • Guidance raise drivers: ~$5M Q1 beat; ~$10M midpoint raise reflecting momentum across VTE, Emerging Therapies, and International; seasonal caution in Q2 .
  • Gross margin outlook: Stable around Q1 level for the year; pricing “very stable to up” with bundled toolkit adoption in complex cases .
  • LimFlow commercialization: Foundational year; NTAP proposed for Oct; modest 2024 revenue; broader ramp in 2025 .
  • DOJ CID: Company cooperating; no expected commercial impact; timeline likely measured in years .

Estimates Context

  • S&P Global consensus estimates for Q1 2024 revenue and EPS were unavailable via the tool at time of writing; as a result, beat/miss vs Street cannot be presented. Future comparisons will anchor on S&P Global consensus when available.

Key Takeaways for Investors

  • Guidance raise and reiterated profitability timeline are positive signals; expect modest sequential revenue in Q2, with acceleration in H2 .
  • International and Emerging Therapies are meaningful incremental growth drivers; watch Venacor rollout, Artix gen2 launch, and LimFlow NTAP finalization .
  • Gross margin resilient in mid-to-high 80s despite mix headwinds; pricing stability and bundled toolkits support margin durability .
  • Competitive environment intensifying but leadership defensible given data, portfolio breadth, and commercial scale; PEERLESS readout could be a narrative catalyst .
  • Non-GAAP operating loss reflects acquisition-related items; operating leverage improving over 2024 and into 2025 as foundational investments amortize .
  • Monitor DOJ CID as a headline risk; management expects no commercial impact, but timeline could be extended .
  • Near-term trading: Guidance raise and NTAP proposal support sentiment; any early read-through on PEERLESS at major cardiology meetings in 2H 2024 could drive volatility .