VAPOTHERM INC (VAPO)·Q2 2024 Earnings Summary

Executive Summary

• Q2 2024 delivered modest top-line growth with net revenue of $16.9M (+5.3% YoY), a stronger gross margin at 49.1% (vs. 42.8% YoY), and a narrower Adjusted EBITDA loss of $2.9M; however, sequential revenue declined vs. Q1 and the company remained loss-making with EPS of -$2.22 .
• Disposables were the growth engine: U.S. disposables revenue rose 25.9% YoY, driving overall disposables revenue up 13.9% YoY, tied to increased COPD adoption following the HYPERACT study; capital and international revenue were weaker YoY .
• Operating expenses rose to $17.6M due to merger-related costs, although non-GAAP cash OpEx fell to $12.1M, consistent with Path to Profitability initiatives; unrestricted cash fell to $2.9M, highlighting liquidity pressure .
• No formal quantitative guidance was provided; strategic backdrop shifted with the definitive merger agreement announced June 17 (going private at $2.18/share), a near-term stock reaction catalyst and potential balance sheet reset (debt-to-preferred conversion and new preferred equity) .

What Went Well and What Went Wrong

What Went Well

• Strong disposables momentum: U.S. disposables revenue +25.9% YoY and worldwide disposables +13.9% YoY, underpinned by COPD adoption and HVT 2.0 platform penetration .
• Margin improvement: gross margin reached 49.1% in Q2 vs. 42.8% YoY, driven by improved efficiency in Mexico operations .
• Adjusted EBITDA loss narrowed meaningfully to -$2.9M from -$6.4M YoY, reflecting cost actions; management reiterated Path to Profitability execution .
  • “We are seeing increased adoption of our technology on COPD patients since the results of the HYPERACT study were presented at the 2024 Critical Care Congress.” — Joseph Army, President & CEO .

What Went Wrong

• Revenue softness sequentially: net revenue fell to $16.9M in Q2 from $19.1M in Q1 as disposables volumes declined sequentially and capital revenue softened .
• International headwind: international revenue decreased 15.0% YoY due to lower disposables sales in distributor markets, partially offsetting U.S. strength .
• Liquidity tightened: unrestricted cash decreased to $2.9M at quarter-end from $9.7M at FY23-end, with continued net losses (-$14.3M) and elevated interest expense impacting cash flows .

Financial Results

Headline Metrics (Sequential Trajectory)

Year-over-Year Comparison (Q2 2024 vs. Q2 2023)

Segment/Product Mix

Geography Mix

KPIs

Guidance Changes

Earnings Call Themes & Trends

Note: We did not find a Q2 2024 call transcript in our document system; attempted internet retrieval yielded no verifiable transcript content. Trendlyne lists an earnings conference call date, but transcript details are unavailable .

Management Commentary

• “I’m pleased our U.S. disposables revenue grew by nearly 26%... We are seeing increased adoption of our technology on COPD patients since the results of the HYPERACT study were presented...” — Joseph Army, President & CEO .
• “Gross profit and gross margin... increases... primarily due to the improved efficiency of our Mexico operation.” — Q2 release .
• “We made significant progress on all of our key objectives... prepare for next year’s launch of our Access365 home ventilation solution...” — Q1 release .
• “We made significant progress on our Path to Profitability Initiatives in 2023... excited... HYPERACT clinical trial...” — Q4 release .

Q&A Highlights

• Q2 2024 earnings call transcript not available via our document tools; internet attempts did not yield a reliable full transcript for citation. No Q&A themes can be verified at this time .

Estimates Context

• S&P Global consensus estimates were unavailable due to missing CIQ mapping for VAPO at the time of retrieval; we attempted to fetch EPS, revenue, and EBITDA consensus for Q2 2024 but could not obtain data. Therefore, we cannot assess beats/misses versus Wall Street consensus for Q2 2024 [SpgiEstimatesError from GetEstimates call].
• Reported results: EPS -$2.22 and revenue $16.884M; comparison to consensus cannot be made reliably without S&P Global data .

Key Takeaways for Investors

• Disposables-led growth and improved gross margin support the near-term operating narrative, but sequential revenue softness and persistent net losses underscore execution risk and sensitivity to volume mix .
• International distributor weakness (disposables decline) offset U.S. strength; watch for stabilization in international disposables to sustain growth momentum .
• Margin gains from Mexico efficiency are tangible; continued cost discipline helped narrow Adjusted EBITDA losses, an important proof point for Path to Profitability .
• Liquidity remains tight with unrestricted cash at $2.9M; the go-private transaction is a key catalyst to recapitalize and de-risk the balance sheet (debt-to-preferred conversion plus new equity capital) .
• Near-term trading: narrative likely driven by M&A progress and any operational updates on disposables and gross margin; absence of guidance and limited disclosure on forward metrics raises uncertainty until post-merger strategic plans are detailed .
• Medium-term thesis: leverage HYPERACT-driven COPD adoption and HVT 2.0 installed base to drive recurring disposables; monitor Access365 home ventilation pathway and post-merger investment capacity to fund growth .
• Risk flags: elevated interest expense, ongoing net losses, international distributor performance, and execution timelines on home ventilation and integration post-merger .

Sources: Q2 2024 8-K and Exhibit 99.1 press release , Q1 2024 8-K , Q4 2023 8-K , and PR Newswire merger announcement .