Despite this, it projects to add another 52-56 new centers per quarter for the remainder of FY22. It did note the 52 is slightly behind cadence, as new center openings were delayed due to regulatory headwinds. The company added another 52 implanting centers to its US accounts, now booking revenue from 785 centers. Longer term, we expect gross margins to return to the prior guidance levels of about 85%." Earnings catalysts for post announcement drift
#HUMMINGBIRD OUTLINE FULL#
For this reason, along with the higher cost of certain component parts, we are lowering our full year 2022 gross margin guidance to between 83% and 85%. The amount of the charges, if any, will depend on the timing of the introduction of the new leads and remotes, both in the U.S. " a potential inventory obsolescence charge on any remaining stimulation and sensing leads and patient remotes may occur in the second half of 2022.
#HUMMINGBIRD OUTLINE BLUETOOTH#
On the most recent figures, INSP's cash position looks to provide more than adequate runway of almost 24 quarters at the current run rate, and around 40 quarters on a blended analysis, as seen in the table below.ĭata: HB Insights Estimates INSP SEC Filingsįinally, management commented on its decision to introduce new silicone leads and the new Bluetooth enabled remote. It also left the quarter with $196 million in cash on a $28 million cash burn for the year to date. Despite the uptick in revenue guidance, the company also forecasts gross margins to tighten by ~100-200bps and come in at 83-85%, down from 85-86% previously. It now expects top-line growth of ~52% YoY, calling for $354-$362 million at the top, up from $344 million at the upper end. The momentum enabled management to revise guidance upward. This led to a loss per share of $0.53 vs. INSP bought this down to a $14.5 million net loss for the period which is a regression from last year's $13.1 million. Return on investment curling up since FY20 and looks to print a positive return in coming periods on this trajectory As seen on the chart below, quarterly return on the company's invested capital, whilst still in the red, has pushed upwards since FY20 and looks to surface into the black over the coming periods.Įxhibit 2. In fact, the uptick in operating spend signifies the company's stance on investing into its core business and working towards obtaining a positive return on this allocation. The lift in OPEX is tied to an increase in the salesforce headcount, increased marketing spend and product development. The growth in operating spend falls in line with figures we've observed in those of INSP's peers who've reported Q2 earnings. Moving down the P&L, OPEX printed at ~$92 million and was up 57% for the year. Management project the average selling price to curl up throughout FY22 and FY23 to a level of $24,900. This is the pull-through of price increases that management started in May.
The company realized an ~80bps pricing tailwind with an average US selling price of $24,100 in the period. Ex-US revenue saw ~700bps of YoY growth in constant currency terms, however declined 300bps due to an 11% reduction in forex rates. Management noted that growth was underpinned by higher device utilization at existing sites, helped by the addition new implanting centers and greater number of territory managers. The bolus of revenue stemmed from US sales of ~$88 million, up 78% YoY from ~$50 million. Quarterly turnover saw a 73% YoY gain to $91 million and 32% on a sequential basis. Second quarter earnings came in strong with upsides versus consensus at the top and bottom line. Q2 earnings add to further upside potential Here's the moving parts of the INSP investment debate.
We note a number of earnings and regulatory catalysts look yet to be priced into an already strengthening stock price, and observe the market's price of INSP shares is currently fair and reasonable.
With upside in both revenue and the bottom line versus consensus, the stock is well placed to drift north post-announcement, after having caught a bid since May. ( NYSE: INSP) buy following its Q2 FY22 earnings.
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