Executive Summary

Q1 2024 delivered improving fundamentals: revenue rose 7.9% YoY to $19.134M, gross margin expanded to 50.5% (from 35.0% YoY), and Adjusted EBITDA loss narrowed to $(2.449)M, reflecting Path to Profitability execution and Mexico manufacturing efficiency gains .
Mix skewed to U.S. disposables; U.S. revenue +15.9% YoY while International declined 14.1% YoY, with disposables +13.5% YoY overall; installed base and circuit volumes continued to grow .
Liquidity is the near-term risk: unrestricted cash fell to $3.304M; loans were reclassified to current ($111.670M current portion), and stockholders’ deficit widened; forward-looking language highlights going-concern and funding/covenant risks .
Strategic optionality: management is preparing for Access365 home ventilation launch next year (previewed at MEDTRADE Dallas in March) and leveraging favorable HYPERACT trial data to support adoption of HVT 2.0 in acute care settings .
Street estimates: S&P Global consensus for Q1 2024 was unavailable for VAPO via our access; estimate comparisons are therefore omitted (we emphasize actual-vs-prior and sequential trends).

What Went Well and What Went Wrong

What Went Well
- Gross margin strengthened to 50.5% (from 35.0% YoY), driven by improved efficiency at the Mexico operation .
- U.S. disposables and overall U.S. revenue growth were strong; disposables +13.5% YoY, U.S. revenue +15.9% YoY; installed base and consumable utilization grew .
- Adjusted EBITDA loss narrowed to $(2.449)M from $(9.183)M YoY, reflecting ongoing Path to Profitability initiatives; GAAP and non-GAAP cash OpEx both declined YoY .
What Went Wrong
- International revenue declined 14.1% YoY, and capital revenue fell 9.1% YoY; international disposables volumes also declined YoY .
- Liquidity tightened: unrestricted cash dropped to $3.304M from $9.725M at year-end; operating cash outflow was $(6.557)M in Q1 .
- Debt risk elevated: $111.670M of loans classified as current liabilities as of March 31, 2024; stockholders’ deficit increased to $(68.481)M; forward-looking statements emphasize funding, covenant, and going-concern risks .

Financial Results

Sequential trend (last three quarters)

Metric	Q3 2023	Q4 2023	Q1 2024
Revenue ($M)	$15.167	$19.734	$19.134
Gross Margin (%)	39.6%	46.6%	50.5%
GAAP Operating Expenses ($M)	$16.284	$14.227	$15.238
Non-GAAP Cash OpEx ($M)	$12.302	$11.876	$13.189
Adjusted EBITDA ($M)	$(6.076)	$(1.974)	$(2.449)
Net Loss ($M)	$(15.130)	$(10.185)	$(14.836)
Diluted EPS ($)	$(2.38)	$(1.60)	$(2.31)

YoY comparison

Metric	Q1 2023	Q1 2024
Revenue ($M)	$17.731	$19.134
Gross Margin (%)	35.0%	50.5%
GAAP Operating Expenses ($M)	$19.836	$15.238
Non-GAAP Cash OpEx ($M)	$16.385	$13.189
Adjusted EBITDA ($M)	$(9.183)	$(2.449)
Net Loss ($M)	$(18.090)	$(14.836)
Diluted EPS ($)	$(3.56)	$(2.31)

Segment revenue (by product category)

Revenue Category ($M)	Q3 2023	Q4 2023	Q1 2024
Capital (product & lease)	$2.486	$2.733	$3.547
Disposables	$11.170	$15.586	$14.096
Service & Other	$1.511	$1.415	$1.491
Total	$15.167	$19.734	$19.134

Revenue by geography

Geography ($M)	Q3 2023	Q4 2023	Q1 2024
United States	$11.231	$14.686	$15.084
International	$3.936	$5.048	$4.050
Total	$15.167	$19.734	$19.134

Balance sheet and cash flow highlights

Metric	Q3 2023	Q4 2023	Q1 2024
Unrestricted Cash & Equivalents ($M)	$14.418	$9.725	$3.304
Current Portion of Loans Payable, net ($M)	—	—	$111.670
Long-term Loans Payable, net ($M)	$104.425	$107.059	—
Stockholders’ Deficit ($M)	$(47.496)	$(55.334)	$(68.481)
Net Cash Used in Operating Activities ($M, quarterly)	—	—	$(6.557)

KPIs and operating metrics

Installed base (period-end units)

Installed Base (Units)	Q3 2023	Q4 2023	Q1 2024
United States	24,548	24,617	24,802
International	12,889	12,892	13,126
Total	37,437	37,509	37,928

Disposable patient circuits sold (quarterly)

Disposable Circuits Sold	Q3 2023	Q4 2023	Q1 2024
United States (units)	70,420	98,749	94,211
International (units)	33,501	45,137	32,961
Total (units)	103,921	143,886	127,172

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Company Guidance	FY 2024	N/A	No formal quantitative guidance provided in Q1 2024 press release	N/A

Note: Q3 2023 included FY 2023 guidance updates (now historical); no new forward guidance was issued in Q1 2024 materials reviewed .

Earnings Call Themes & Trends

Note: A Q1 2024 earnings call transcript was not available in our document set; themes below reflect Q3–Q4 2023 press materials and Q1 2024 press release.

Topic	Previous Mentions (Q3’23 and Q4’23)	Current Period (Q1’24)	Trend
Manufacturing/Mexico efficiency	Margin lift aided by transition to Mexico; Q3 GM 39.6%, Q4 GM 46.6% .	GM reached 50.5% driven by improved efficiency in Mexico .	Improving gross margin trajectory.
HVT 2.0 adoption	Capital growth tied to HVT 2.0; installed base expanding .	Continued adoption; installed base +2.3% YoY; disposables utilization supportive .	Positive adoption and utilization.
Clinical evidence (HYPERACT)	Accepted for Jan 2024 presentation; favorable non-inferiority focus .	Results presented; therapy as effective as gold standard with superior tolerance per Q4 release .	Strengthening clinical support.
Home ventilation (Access365)	Preparing for home market launch in early 2025 .	Preparing for next year’s Access365 launch; unveiled at MEDTRADE Dallas in March .	Progressing toward launch.
Liquidity/covenants	Cash declines; covenant compliance emphasized .	Cash down to $3.3M; loans classified current; going-concern/funding risks highlighted .	Heightened balance sheet risk.
Revenue mix and regions	International helped Q3/Q4; U.S. mix strong .	U.S. +15.9% YoY; International −14.1% YoY; disposables +13.5% YoY .	U.S.-led growth; Int’l variability.

Management Commentary

“In the first quarter, we made significant progress on all of our key objectives… as we continue to drive further adoption of our technology and prepare for next year’s launch of our Access365 home ventilation solution, which was unveiled at MEDTRADE Dallas in March.” — Joseph Army, President & CEO .
“We believe the combination of the HVT 2.0 platform with [HYPERACT] clinical results will allow us to become the standard of care for patients in respiratory distress who present in the emergency department… building on this in 2024 and getting ready for our launch into the home market in early 2025.” — Joseph Army, President & CEO (Q4 2023 release) .

Q&A Highlights

A Q1 2024 earnings call transcript was not available in our corpus; no Q&A highlights or clarifications beyond press release commentary could be reviewed [ListDocuments: no Q1 2024 transcript found].

Estimates Context

S&P Global/Capital IQ consensus estimates for Q1 2024 (revenue, EPS, EBITDA) were unavailable for VAPO via our access; as a result, we do not present actual vs consensus comparisons. Where possible, we emphasize actuals vs prior-year and sequential performance based on company filings .

Key Takeaways for Investors

Margin inflection continues: GM expanded to 50.5% on manufacturing efficiency in Mexico; sustaining 45–50%+ margins would be a key driver of breakeven math as volumes scale .
U.S. disposables strength offset international softness; installed base growth and disposables utilization are supportive of recurring revenue durability .
Liquidity is tight and the primary near-term risk: cash fell to $3.304M; loans reclassified as current ($111.670M) with a larger stockholders’ deficit; funding and covenant compliance are pivotal near-term watch items .
Operating discipline continues to show up in P&L: GAAP OpEx and non-GAAP cash OpEx declined YoY; Adjusted EBITDA loss narrowed materially YoY .
Clinical and product catalysts: positive HYPERACT data and HVT 2.0 adoption may accelerate consumables pull-through; Access365 home ventilation launch next year is a medium-term catalyst path, pending execution and regulatory/market access .
Trading lens: near term, the tape is likely most sensitive to liquidity actions (financing, covenant updates) and any sequential margin/consumables strength; medium term, the thesis hinges on recurring revenue growth, sustained 40%–50%+ GM, and successful entry into home care .

VAPOTHERM INC (VAPO)·Q1 2024 Earnings Summary