Sign in

You're signed outSign in or to get full access.

NI

Nuwellis, Inc. (NUWE)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 revenue was $2.32M, down 9% YoY on lower U.S. console and international sales; gross margin improved to 58.4% (vs. 54.4% YoY) as opex fell 25% and net loss narrowed to $1.47M ($0.44/sh) with a one-time $0.9M gain from the SeaStar settlement .
  • Mix/usage was a bright spot: consumables utilization rose 21% YoY and Critical Care revenue grew 35% YoY; however, the company sold only 3 consoles in Q4 vs. 11 in Q3 .
  • Catalysts: CMS outpatient reimbursement increased nearly 4x to $1,639/day effective Jan 1, 2025, and a JACC: HF reappraisal showed 60% fewer heart failure events at 30 days with Aquadex vs IV diuretics; management expects outpatient expansion to support growth in 2025 .
  • No quantitative guidance provided; management highlighted operating efficiency, clinical evidence, and outpatient reimbursement as 2025 growth drivers; cash was $5.1M at 12/31/24 and no debt .

What Went Well and What Went Wrong

  • What Went Well

    • Consumables-driven utilization and category strength: +21% YoY consumables utilization; Critical Care revenue +35% YoY in Q4 as clinicians increased Aquadex adoption .
    • Margin/efficiency execution: gross margin expanded to 58.4% (from 54.4% YoY) and total opex fell 25% YoY on sustained cost actions; operating loss improved to $(2.4)M from $(3.6)M YoY .
    • Strategic tailwinds: “Effective January 1, 2025, the facility reimbursement fee increased nearly 4x from $413 to $1,639 per day,” and JACC: HF reappraisal showed “a 60% reduction in heart failure events at 30 days” with Aquadex vs IV diuretics .

  • What Went Wrong

    • Top-line decline and console softness: Q4 revenue fell 9% YoY on lower U.S. console and international sales; only 3 consoles were sold in Q4 vs. 11 in Q3 .
    • Category headwinds beyond Critical Care: in Q4, Heart Failure and Pediatrics categories were down 36% and 20% YoY, respectively, on lower console sales .
    • Operational headwind: a voluntary recall of specific blood circuit lots created a ~$150k nonrecurring expense in Q4 .

Financial Results

Quarterly trend (oldest → newest)

MetricQ2 2024Q3 2024Q4 2024
Revenue ($M)$2.2 $2.367 $2.322
Gross Margin (%)67.2% 70.0% 58.4%
SG&A ($M)$3.2 $2.702 $2.911
R&D ($M)$0.558 $0.486 $0.831
Total Opex ($M)$3.8 $3.188 $3.742
Operating Loss ($M)$(2.3) $(1.532) $(2.387)
Net Income (Loss) to Common ($M)$(7.7) $2.358 $(1.468)
Diluted EPS ($/sh)$(18.85) $1.74 $(0.44)
Cash & Equivalents ($M)$1.0 (end Q2) $1.9 (end Q3) $5.1 (12/31)

YoY comparison

MetricQ4 2023Q4 2024
Revenue ($M)$2.551 $2.322
Gross Margin (%)54.4% 58.4%
Operating Loss ($M)$(3.593) $(2.387)
Net Loss to Common ($M)$(7.927) $(1.468)
Diluted EPS ($/sh)$(54.48) $(0.44)

KPIs and drivers

KPIQ2 2024Q3 2024Q4 2024
Consumables Utilization YoY+9% (overall driver) Down YoY overall; mix shift with categories +21%
Critical Care Revenue YoY+28% (down 25% YoY) +35%
Heart Failure Revenue YoY+9% (down 36% YoY) (down 36% YoY)
Pediatrics Revenue YoY(down 10%) +28% (down 20%)
Consoles Sold (units)—11 3
One-time/Unusuals—Warrant liability reval benefit drove NI $150k recall cost; $900k settlement gain

Balance sheet/capital

  • No debt at 12/31/24; cash and equivalents $5.1M; ~4.4M common shares outstanding at 12/31/24 .
  • In Nov 2024, company induced exercises of certain warrants for ~$3.8M gross, plus ~$1.3M additional warrant exercise proceeds; in Q4 also noted SeaStar settlement payments totaling $0.9M by year-end .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Financial guidance2025None disclosedNone disclosed; qualitative growth drivers reiterated (outpatient reimbursement, clinical evidence, new accounts)Maintained (no formal guidance)

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 2024)Previous Mentions (Q3 2024)Current Period (Q4 2024)Trend
Outpatient reimbursement/expansionNo outpatient code yet; DaVita pilot progressing slowly CMS to raise outpatient pay to $1,639/day effective 1/1/25; planning target accounts; expect top-line acceleration Fourfold outpatient facility reimbursement live 1/1/25; early traction building; updates to follow Positive; commercialization ramp ahead
Clinical evidenceTHT data; efficacy and economic signals Real-world study showing reduced 60-day HF readmissions; continued REVERSE-HF enrollment JACC: HF reappraisal shows 60% fewer HF events vs IV diuretics at 30 days Strengthening evidence base
Console placementsNot detailed11 consoles sold in Q3 3 consoles sold in Q4 Weak sequentially
Category dynamicsPediatric ~30% of rev; mixed trends Peds +28% YoY; adult categories down in summer Critical Care +35% YoY; HF and Peds down 36% and 20% YoY Mixed by category
Trials (REVERSE-HF, Vivian)Vivian software dev ramp expected; REVERSE-HF >1/3 enrolled REVERSE-HF enrollment finish mid-2026; Vivian IDE start targeted end-2025 Timing uncertain; “difficult to gauge” for REVERSE-HF and Vivian Timing pushed/uncertain
Operations/quality——Voluntary recall of specific circuit lots, ~$150k nonrecurring expense One-time headwind resolved

Management Commentary

  • “In 2025, we expect to drive progress on our growth agenda, buoyed by increasing awareness of the clinical evidence for our Aquadex system, enhanced by a favorable change to CMS reimbursement to drive new expansion opportunities in the outpatient setting” — John Erb, interim CEO .
  • “Effective January 1, 2025, the facility reimbursement fee increased nearly 4x from $413 to $1,639 per day... we are opening a new chapter for Nuwellis as we enter the outpatient market for Aquadex Ultrafiltration therapy” — management prepared remarks .
  • On evidence: “Aquadex... reduced heart failure events by 60% at 30 days when compared to those receiving traditional IV diuretics” — JACC: HF reappraisal discussed on call .
  • On cost discipline: SG&A down ~19% YoY; R&D down YoY; total opex down ~25% YoY from efficiency initiatives .

Q&A Highlights

  • Outpatient traction: initial activity with existing accounts setting up outpatient capability; expected to see sites come online in “another month or so” from the call date .
  • Hardware momentum: 3 consoles sold in Q4 vs. 11 in Q3 2024, highlighting the lumpiness in capital sales .
  • Clinical programs: timing for REVERSE-HF enrollment completion and Vivian start remained “difficult to gauge” at this time .
  • Leadership: CEO search underway with an executive search firm; interim CEO does not foresee major strategic shifts; focus on leveraging JACC evidence and outpatient reimbursement .

Estimates Context

  • We attempted to retrieve S&P Global consensus for Q4’24 revenue and EPS but could not access the data due to provider rate limits at the time of query; as a result, we cannot determine beat/miss versus consensus for Q4’24 at this time [SPGI access attempt failed].
  • Given the absence of published numerical guidance and lack of available consensus data, we expect street models to adjust mix assumptions (higher consumables/outpatient, lower consoles) and incorporate the nonrecurring $0.9M gain and $150k recall cost when bridging to normalized EPS .

Key Takeaways for Investors

  • Execution on efficiency: sustained cost reductions drove improved operating loss and narrowed net loss despite revenue softness; monitor whether opex discipline persists as outpatient ramps .
  • Structural tailwind: CMS reimbursement to $1,639/day in outpatient is a meaningful economic catalyst for hospitals and should expand access and use; timing/pace of outpatient buildout is the key 2025 swing factor .
  • Utilization over hardware: Q4 showed strong consumables utilization (+21% YoY) offset by weak consoles; the story increasingly hinges on therapy adoption rather than capital placements near term .
  • Category mix matters: Critical Care strength (+35% YoY) offset declines in Heart Failure and Pediatrics; watch for reacceleration in HF and pediatrics as outpatient pathways and new accounts mature .
  • Clinical validation: JACC: HF reappraisal (60% fewer HF events at 30 days with Aquadex vs IV diuretics) enhances the evidence base to influence guidelines and adoption; continued trial progress remains important .
  • Balance sheet runway: $5.1M cash and no debt at year-end; November warrant exercises and SeaStar settlement enhanced liquidity; monitor cash burn versus outpatient uptake cadence .
  • Watch the cadence: Early 2025 updates on outpatient account activations and category trends are the likely stock catalysts, while any clarity on REVERSE-HF/Vivian timelines would be incremental .

Guidance Changes

  • No formal quantitative guidance was issued; management emphasized outpatient reimbursement, clinical evidence, and operating efficiency as drivers for 2025 .

Supporting Press Releases During Q4 2024 Window

  • CMS outpatient reimbursement reassignment to APC 5242; rate to $1,639/day effective Jan 1, 2025 .
  • Preliminary Q3 results and operating updates (pre-Q4 earnings date) .
  • University of Iowa Stead Family Children’s Hospital adopted Aquadex for pediatric patients .
  • Regained Nasdaq minimum bid price and stockholders’ equity compliance (Dec 19, 2024) .

Notes:

  • Financials and management commentary sourced from the Q4 2024 8-K/press release and the Q4 2024 earnings call transcript .
  • Q3 and Q2 comparative figures and trends from prior press releases and transcripts .
  • Consensus data from S&P Global could not be retrieved at time of analysis due to access limits; therefore, beat/miss vs. Street is not assessed here.