All right. Welcome everyone back to the KeyBanc Conference. My name is Brett Fishbein, Senior MedTech Analyst, and I'm pleased to be joined this afternoon by Inogen, who today is represented by Kevin Smith, the CEO. I'll start us off with questions, but as usual, this is a 100% Q&A session for the next 35 minutes, and if there's questions from the audience, you can submit them directly to me under the video box below, and if we have time, I can relay them to Kevin.
Maybe just to kick things off, you know, Kevin, you've been at Inogen for over two years now, and was hoping, you know, you could just update everyone a little bit at a high level around how the first couple of years have gone, so far, and then just maybe how you think about some of the key priorities for the company, over the next few years?
Certainly. Thanks, Brett. You know, really over the last couple of years, we've been focused on first stabilizing the business, looking at the spends, looking at the structure of the organization and focusing on getting ourselves back to profitable growth. We're focused on the top line growth, we're focused on the profitability, as well as building out the innovation pipeline. We've made some strong accomplishments here. You know, we've grown the business in the last two years since I've been here by 10%. We've grown the profit line here. We've returned positive adjusted EBITDA last year for the first time since 2021, so that's a significant milestone and accomplishment. We've also expanded the innovation pipeline.
You know, we've committed to turning Inogen from a single product company into a portfolio play, and that transformation has really started to become a reality this last year. We launched Voxi 5 in the back end of last year, the second half, which is a stationary concentrator building out the portfolio. Now we've also expanded out to include obstructive sleep apnea with the Aurora face masks, getting into the CPAP masks. It's a big opportunity. We're excited about it and leveraging the relationships and the brand that we've built up with Inogen.
I think maybe on that point, you know, we're gonna talk about some of the product launches, but at a high level, I think it's been like a pretty big change with the company moving from focus on a single product category in oxygen therapy and portable oxygen to really a multi-product company across the sleep and respiratory continuum overall. Maybe before like diving into the specific products, just like any more about the decision to diversify the business and how you plan to balance your focus across these different markets.
Yeah, certainly. When we look at expanding the business and, you know, we think about respiratory, we think about sleep, we look at this as an overlap within the home respiratory care space. It is an overlapping patient population. It's an overlapping, you know, customer profile when we think about the supplier, not just Inogen direct, but the HMEs that we work with and the physicians as well that are treating these patients with the pulmonologists. We have overlap with you think about the COPD patient population, it's about a 30% overlap with sleep apnea. Also, when we think about expanding into bronchiectasis and airway clearance, it's similar there as well with about a 30% overlap.
We're taking the TAM that we have going from about a $400 million TAM to about a $3 billion TAM just looking at the U.S. alone. Being able to leverage the Inogen brands, to be able to leverage the commercial organization, the customers and the patients, that is, that's how we're looking at this going forward to create not just a product, but we're looking at solutions across therapeutic areas and developing ultimately an ecosystem for these patients that includes connected care among the devices.
Makes a ton of sense in terms of some of the overlap with the channel, specifically the HMEs and patients. We're definitely gonna unpack a little bit more of the portfolio story, but wanted to start also with a couple of questions on, you know, Q4 and 2026 expectations.
Mm-hmm.
I think on the most recent earnings call, there was some like, you know, near term impacts, and you talked about some like shifting customer orders into 1H. Maybe just like unpack that dynamic a little bit in terms of where you saw some of like the change in, like order timing with customers and how you think that kind of plays into the story in 2026?
Sure. When we looked at going into the end of the quarter, constant conversations, of course, with our customers, particularly looking in this case at the B2B customers within the HMEs. They have capital budgets and allocations that they spend. We had the signals that the certain amount was gonna be spent within the fourth quarter, which is what we're tracking towards. In the prior year, in 2024, we had, you know, we had customers who were going over. We're finding additional CapEx to spend. We expected that we were gonna be able to deliver these, to hit the targets.
We had orders that were in hand, some sizable orders that were asked to be pushed out into the first quarter because they lost the budget, the CapEx budget, and so it was gonna be allocated into the next year. We had a shifting, but it's important to note that this was not a loss of customers. This was not a shrinking of demand. We grew POC demand 20% in 2025. From a unit volume basis, we're up significantly. We've already captured and delivered a number of those orders that flew into or you know, pushed into the H1 year of 2026.
Of course, how much more of that is gonna be a bit dependent on the CapEx budgets and the allocations that go in this year. Even though we're guiding to flat in the year-over-year in line in the first quarter, we're expecting to continue to see strong demand in the B2B business, both domestic and international. That's growth. When we look at that demand from 20% unit volume in 2025. Those are built off of relationships going deeper, going wider within that B2B business. Those are relationships and that is activity that we can leverage across the portfolio expansion that we've been signaling about here as well.
Just one more question on like the fourth quarter. I think you mentioned 15% growth in OUS customers. Was curious if you could just elaborate kind of like where you're seeing strength outside of the U.S., and a little bit more on just how you think about expansion into new geographies, which I think you mentioned a bunch on the earnings call.
Yeah. Most of our international is coming from our European markets, and we've been continuing to build, gain share, go deeper within our international business. We have also expanded out into new markets internationally. We've opened up some additional markets in Latin America last year, as well as gaining some further traction in Eastern Europe, and we're expanding in Asia Pac. China is a market that is a new market for us that we're working with our partner, Yuwell. We have not entered yet that market. Working through the regulatory process with there, but that is a significant market that is of the future for us, as is Japan. Japan is not yet a market that we're in, so there are some significant opportunities for us to continue to build on international.
Right. Great. Shifting to Q1, you mentioned some of the moving pieces, and just wanted to maybe double-click on some of the like key considerations for the first quarter. I think like order timing, but then some of like the mix considerations with like rental versus B2B, and just kind of like how you expect some of those dynamics in terms of the like sales channels to evolve through the year.
Yeah. When we look at the sales channels and continuing to build out B2B, we've seen those dynamics that are happening within that channel, B2B channel, where specifically when we think about the U.S., where the HMEs are more proactive today in initiating portable oxygen therapy with a POC, with an Inogen for their patients. That creates opportunity for us to continue to grow that business within the POC as they see the greater value in that and as patients continue to demand, as do physicians continue to demand that their patients have a POC.
That also creates some headwinds when we look at our DTP channels and the sales channel and the rental sales channel, because those are primarily Inogen replacing an oxygen tank with a portable concentrator, with the Inogen device. When we look at this going into this year, and you think about those mix, we continue to expect the B2B to grow, to evolve, but we're also adding additional products into these channels. We got the Voxi 5, which is coming in. There's also opportunities. We like what we've been seeing so far in selling the Voxi 5, the direct cash pay channel.
There's also opportunities, of course, to continue on that B2B side when you think about mix and you think about margins to bring in a higher margin product like the Aurora mask.
Maybe a little bit more on that topic. You know, there's kind of the 1Q expectation that's out there, but you've guided 6% growth for, you know, the full year. It seems to have a little bit more of a back-half weighting. Maybe just walk through some of the assumptions embedded in the revenue—like full year revenue guidance, and if you can just speak directionally to how much comes from the core POC business versus continued progress from some of the new categories like Voxi and Aurora.
We do continue to focus on and expect to see growth coming out of our core POC business. We do anticipate that is going to continue to be driven primarily by the B2B when you think about the volume, there, both in the U.S. as well as in our international markets. We have guided toward, as you said there, around that 6% at the midpoint growth of the year. The POC business, the portable oxygen therapy is growing at a low single-digit pace, and we continue to expect to outpace that market, continue to grow. As the year goes on, we expect more contribution coming from the introduced markets.
We haven't guided specifically by product category, but we do expect both the Voxi 5 and the Aurora mask to have a meaningful contribution this year for our growth.
All right. Perfect. You know, just finishing up on the 2026 guidance story. I think, you know, just thinking about adjusted EBITDA, you mentioned the first year since 2021, where you saw a positive result or, you know, positive EBITDA in 2025. Just thinking about 2026, like outside of just revenue growth, and sales leverage, like what you think can help achieve your, you know, your goal of growing adjusted EBITDA this year.
Yeah. You know, first, you know, when we think about gross profit, you know, aside from the revenue growth, to have products that are coming in that are a higher margin, that are accretive to the blended gross margin basis, that's something that is going to be important as we signal being able to add additional products going forward here, at least one on an annualized basis. We are intending to continue to build that profitability profile, adding products that have higher margin, that have that positive, you know, accretive nature to it. We will be able to continue to build up on that adjusted EBITDA and overall profitability into the future.
We are also gonna continue to focus on gross profit, looking at both our OpEx and cost discipline and spending discipline, but then also ways to improve the margins in our core business, both looking at the level of support that we need from comparative data, clinical data to support the higher ASP, as well as to be able to take cost out of the cost of goods, both in the BOM as well as the labor and overhead. We've made good progress over the years with a disciplined approach, and we're gonna continue to refine that.
Super. Just thinking a little bit longer term, you know, on the most recent call, you provided 2026 guidance and, you know, also updated some long-term financial goals and, you know, notably, you know, talked about achieving high single-digit revenue growth, at some point over the next three to five years and continued growth in adjusted EBITDA as well.
Mm-hmm.
Maybe just, like, you have the new product story, but just kind of like what gives you confidence in taking that next step up, you know, from mid-single-digit growth to high single-digit growth in that three to five-year period?
Yes. It, it's gonna relate back to that leverage that we have when we think about these patients. We're focused not just on bringing a product, but bringing quality products that reflect the Inogen brand, the Inogen innovation acceptance, and so putting that patient first in what we are delivering. Taking that into consideration when we look at going from where we are today or where we were yesterday, let's say, with a $400 million TAM and now going into $3 billion TAM, and then we add more when you consider the Simeox, which will be once we have that reimbursement here in the United States and beyond. Our ability to grow both on the top line as well as the bottom line is baked into that.
We are focused on being that home respiratory care company, that portfolio play and designing the ecosystem around that. We're looking for loyalty, for brand loyalty as well as preference, both from the patient standpoint, the extended family standpoint and the caregiver standpoint, while adding value back to the HMEs or business partners. We, you know, believe that we'll be able to deliver this, and we have confidence as we continue to expand this, more opportunities, higher TAM and an additional growth in the future.
All right, awesome. Let's shift a little bit to the different product areas. I wanna ask a couple of questions about, you know, the core POC category.
Mm-hmm
You know, a couple of the other new products. Just thinking about, you know, core POC, you kinda mentioned like a low single digit market growth rate, but that Inogen can grow above that. Just wanted to ask, just to put that into context, like where you think we are in regards to current penetration of POCs in context of the overall TAM, and how long of a runway you see for, like, continued penetration increasing, supporting at least like a level of growth in the market before considering any, like, excess performance from Inogen.
Yeah. When we look at it from a market-by-market standpoint, you know, we talked about that stat, the POC market, you know, growing low single digits%, $400 million, roughly in there. We have opportunities to continue to grow beyond the market because we're not just looking at new patients that are coming in, but also being able to change out what existing patients have, both from an oxygen tank to perhaps another option that they may have selected with a POC that isn't serving the patient in the best way that Inogen could be able to service those patients. But within the U.S., it's gonna be from continuing to build on that share.
We are investing in clinical data generation, clinical evidence to be able to support a higher preference for the Inogen device, as well as looking at where patients are targeted in their disease states and how do we get to those patients earlier in their disease progression versus waiting for that exacerbation. We're investing in that to be able to continue to grow for the long term. Of course, on the international side, you know, we have good penetration in the European markets, but there still is conversion on a market-by-market basis from liquid oxygen to portable oxygen as the preferred opportunity for patients.
As I mentioned as well too, some of those growth coming from new markets that are not yet, you know, even tapped into on the international basis.
Yeah. Maybe just a quick follow-up on that topic.
Yeah.
You know, how do you think about OUS and international penetration, like in context of that high single-digit growth target, you know, really specifically for the POCs? I'm just, I guess, wondering like how accretive you think OUS POC growth could be to overall Inogen growth in that three to five-year planning period.
Yeah. There's opportunity for us to continue to grow, especially when we're thinking about the geographic expansion into new markets. The other that we have to make sure that we consider on the outside the U.S., the OUS. Now I know we're talking specifically about POCs here, but opportunities as well with Simeox to gain reimbursements outside the United States. We also do see the opportunity to continue to innovate, and we do have plans organically to continue to innovate in that POC space. In that same ecosystem that we're talking about here, with the connectivity piece and create that ecosystem of connected technology, that applies outside the United States. That'll give us opportunity to continue to penetrate and to grow.
Outside it is, it's gonna be, again, it's a bit market by market on what the level of penetration is, but there's new markets that we can enter in and continue to drive that growth. When you think about longer range, you'll start to see a little bit more of that, you know, of a blend between U.S. and international. We've seen a lot of the growth supported by international here for the last couple of years.
Got it. Makes sense, and definitely interesting. Just like one more on, you know, the POCs in terms of the channels. It seems like B2B relative to direct to consumers, like, has become a little bit of a bigger part of the mix. I just wanted to ask, like, if you have any bias towards a specific channel or if you feel as a company that you're relatively agnostic. Maybe, like, similarly, if there's any change in just how you think about, like, customer concentration with some of the larger DME providers as compared to going direct to consumer.
We are committed to making sure that every patient who wants to get an Inogen gets an Inogen. That's the channel strategy that we have reflects that. That not every patient is going to be able to get one through their HME or even to get one through their insurance coverage. You think about the DTC is gonna continue to be important. As we expand out our portfolio and bring new products into the portfolio, not every product is gonna fit within each one of our channels in the same way. That's something that will be important to consider as we continue to build this out, what that channel strategy is. It's going to be reevaluated for each product. Where does this fit? Where might this not fit?
We think about bringing in, you know, the Simeox device, for example, and what's the best way to introduce that into the market. This is gonna require clinical data. This is something with our sales team getting in front of the physicians, talking about, comparisons with other technologies and standard of care, and that's something that organically would benefit us from being directly involved in that approach. The B2B, the HME partners, you know, you've got a larger concentration, of course. You know, you've got the 80/20 rule, right? That you know, sits out there with patients. We want to be exceptional partners for our B2B customers. We've had conversations with them.
They're involved in how we're designing and developing the digital connectivity pieces, and we're also allowing them to influence, asking them to influence our innovation and in our portfolio to make sure that we are the best partners that we can, and we work with them to make sure that every patient who would benefit from an Inogen to get one.
I mean, I think that also makes a lot of sense and, clearly, like, trying to shift toward more of a partnership strategy with, you know, those providers. I think that kind of fits into the rest of the product story and portfolio evolution. Maybe just, like, touching on Voxi. I think, you know, you've mentioned in the past that Inogen was only addressing part of the patient setup with portable oxygen. Maybe just talk a little bit more about, like, the value from an HME perspective, of having a single stop shop for portable and stationary oxygen and how that changes your strategic positioning with those DME customers.
Yeah. We think from an HME standpoint, you know, our view is when you think about portable oxygen concentrators, Inogen is synonymous with a POC. Typically, patients and physicians are asking for an Inogen. This is feedback we get from our HME customers as well as what we hear from physicians and patients as well. Being able to provide a very not just a capable, but a preferred stationary concentrator to the patients, both of them coming from Inogen, and in the future, having devices connected, there's value that is in there, both from the patient standpoint as well as the serviceability from the HME.
Because the HME, if they are calling on one company to be their provider and help them with a particular patient, we can cover both aspects of that. We can interrogate the devices for, you know, for any issues, help the HMEs with training. Parts and service and repairs coming from one location in the United States, it makes it simple for them, and that's one of the things we're trying to do, is make it as easy as possible for both our patients and our partners.
Maybe, like, along the same lines, just thinking more about, like, Voxi and the rollout of the product. Just, like, a little bit more about how you think about the commercialization of the product, or the path to it becoming a more meaningful contributor to total company performance. Just, like, any factors that you think would influence the pace of adoption, for the product as you roll it out.
Yeah. As it becomes accepted and, you know, as, you know, standard, and this is how we would, you know, we're moving towards this, you know, how we market it and so forth, where it is a package, it is Inogen. Inogen is taking care of the patient's needs. You know, we can leverage that with our HME partners. We have to add the value, we have to have the quality, and we have that. We bring those to them. In that process, you know, we can talk about, you know, portfolio of acquisition. We can leverage the purchasing power of both technologies versus one technology. We know that the HMEs have, you have a desire to increase their margins.
We have a desire to also improve our margins, improve our sales. By combining these together as well as additional technologies in the future, you know, we can leverage each of those and not just benefit ourselves, but benefits the HMEs as well as the patients.
Let's talk a little bit more about Simeox as well, you know, the airway clearance product. I think the biggest topic there is about, you know, obtaining reimbursement. Maybe just update the audience on kind of like what you think CMS needs to see for that to take place and just how you think about the progression toward a positive coverage decision.
Typically CMS is and there's nothing that is so prescriptive to say, "You check these boxes, you have reimbursement." Yeah, but generally speaking, you want to come in with a couple of clinical trials that are done in the United States and the U.S. patient population to be able to demonstrate the effectiveness of the therapy as well as comparing yourselves to other therapy that is already in the space, the standard of care or a comparative therapy. We have one trial that is running and enrolling right now for the U.S. reimbursement. We have another one that will be kicking off here slowly. We're doing these intentionally in order.
Those will be able to demonstrate the effectiveness that we want to have to be able to demonstrate the compliance with the therapy and as well as some other key data points that we want to be able to demonstrate both to CMS, but then also build the evidence beyond CMS within these trials to be able to go to private payer organizations to be able to demonstrate the health economic aspects that we need to make the arguments as to why we should get the level of reimbursement that we're asking for, and also preference in that. It is a strategy that we're taking a very deliberate approach and generating that data.
We can leverage outside the U.S. data, but we need to have a couple of clinical trials here in the U.S. Those are up and running, or at least the first one is. The second one, we know where we're going. We know who the PI is. We're just, you know, working through the timeframe to get that done. But once we submit that, you know, then we'll be on the clock, of course, with CMS, and we'll be able to to leverage that as well with the private payer organizations.
I think we'll look forward to additional updates on that.
Yeah.
Yeah, I mean, timing with CMS decisions is always uncertain. I think what's interesting is you've kind of pointed out a $500 million US TAM for the category with a higher growth profile than the you know, POC space and, you know, talked about high single-digit market growth. Maybe just a little bit more about how you think about the long-term strategy behind the product, assuming you get a favorable reimbursement decision at some point, just how you think Simeox ultimately can contribute to the company and to the growth profile.
We see, you know, clinical data, of course, it has to, you know, it has to prove out. We believe it will based off of the experience that we've had so far in Europe as well as the limited market release and that we've had here in the United States. The opportunity we did, as you mentioned, talk about this $500 million TAM. High margin profile potential if we're able to achieve a similar reimbursement rate that you see with the HFCWO with the vests out there. This is a razor blade. This starts to become a little bit easier and predictive in the future when you think about the disposable component as well as the capital component.
We're also designing our trials in such a way that we can have follow-on trials where we can look to expand out the indications. What we want to have, we have a broad indication for use, but we don't want to have such a narrow indication or a narrow coverage, let's say, where, you know, where we're limited with the patient populations that we can reach. We believe that we have the potential with Simeox to broaden that out versus the existing therapies that are on the market today.
We're taking that approach, so it's a very, as I said, it's a very deliberate approach as we do this, and we want to do it right because if you get yourself pigeonholed early, it's harder to get out of that hole down the road. It's a very thoughtful, methodical approach. Simeox has the potential to be transformative, not just for Inogen, certainly for our shareholders, but also for the patients. We believe that, you know, based off of the surveying and as well as the experience that we have in Europe, that it'll be a preferred therapeutic option for patients that have bronchiectasis and potentially other airway clearance issues.
Then, you know, on that note, kind of thinking about larger TAMs, the other tangible, you know, physical product area that you've started to, you know, really talk about and move into is, you know, sleep therapy. You mentioned, you know, +$2 billion TAM. Before getting into that, maybe just I'll, I'd be interested a little bit more about the decision to enter this category. You know, I think it's attractive and large category, but, you know, maybe a little bit more competitive. Maybe just like a little bit around your decision to enter that space and also around like the partnership that you have in that area.
When I came and joined Inogen, we started to look at the options, and that was early on looking at how do we diversify our portfolio? How do we leverage the success and the innovation that's in the Inogen POC into other therapeutic areas? One of the early ones that came up for us was sleep apnea and looking at the mask, looking at what is that patient overlap. That's the first thing that we looked at is where is the overlap? Where do we have the same call points? Where can we leverage the Inogen brand name as well as the call points, the patient populations, the HMEs, the customers? This was pretty clear with the sleep apnea that that was one of the areas.
We also explored through surveying, anonymous, you know, data sources, trying to evaluate whether we could leverage Inogen. Would it be accepted? How would people look at this if we brought a product to market? We're very happy with those results. We saw an opportunity for ourselves, and we saw that there was a desire to have additional products in there. There are additional players. There are good quality players, but there's room for more. We believe that there's opportunity for us to position ourselves well and take some market with, you know, some market share here.
Identifying Yuwell as our partner to help make sure that we have the right design, we have high-quality products, they are exceptional and we can leverage their expertise, we can leverage their R&D, we can leverage the work that they've already done. When we brought the Inogen, actually the Aurora mask to market. We did last year a trial on this before making the commercial launch because we wanted to assure ourselves that it was worthy of the Inogen name and that it had the right design. The results that we had from that exceeded our expectations, and it's enabling us to gain some traction here early on.
There's room for us to continue to innovate in that space, and Yuwell is the right partner for us going forward. As you said, you know, with the TAM that's in there, it's an exciting TAM. Every 1% is about a $20 million opportunity for Inogen, and we don't intend to be a 1% player.
No, for sure. I think it's a very large market. It's attractive. It's more fragmented than some of the other areas you play in. You know, maybe there's one or two companies with a lot of share, but then a lot of share that can be gained or move around. I guess, like, the question that I'd be interested in is just I've heard you talk a little bit about patient comfort and, you know, mask design. So, like, what do you think differentiates or, like, what are kind of the key selling points of Aurora that you think could support, like, something above, you know, 1% share, you know, eking higher over time?
Yeah. That, you know, having a good quality mask is. That is really the ticket, yeah, to play, right? It's in HME, sleep lab is not going to want to offer something to a patient if they don't believe that the patient is going to appreciate it, that the patient is going to be compliant. They have to in order for them to be reimbursed. That is a bare minimum. The other part of this is the ecosystem that we are talking about creating here.
Even without the digital components in here, we set that aside for a second, leveraging the Inogen brand name, the Inogen reputation for quality that overlap within both the patient populations as well as within the HMEs that do both sleep and respiratory care. This is something that we can bring in, that we can leverage, and we'll continue to evolve and develop. When you think about the mask, there are certain things that you just have to have the right pieces in place. It has to be durable. It has to have the right comfort level, otherwise you're not gonna have the compliance. We've ticked those boxes. Now it's also up to being the right partner and being able to leverage the Inogen brand name and grow from there.
We think we've got a good first step with all of those in place.
Just maybe bringing this all together, an interesting current portfolio, and I think you've also mentioned, like, a target of one new product or more per year, and you've also called out, you know, like, higher margin areas and clinical differentiation as the kind of key tenets or criteria that you wanna fill with the new product. Maybe just thinking about, like, those, I'll call it, criteria, where do you currently see white space over time for future product launches?
We see opportunities for ourselves, and we're bucketing broadly here when we think about, you know, overlap within the COPD patient population. We have opportunities to continue to develop and bring new technologies within that space. Also within our core business, we have a pipeline of innovation and development, which is gonna create further separation and brand preference and also be able to, you know, working towards, you know, I don't wanna get too far ahead here, but there's opportunities for us to think about expanding patient populations within the technology and looking at the reimbursement structure there as well. We've invested in clinical data generation. We have a good team that's in place.
The opportunity for us is not just within the products, but also within the technology, the data that's gonna surround us in creating that, you know, that connected care ecosystem.
We're coming up on time here. I'll save my balance sheet question for next time. Wanna thank Kevin, you know, very much for joining us today. Thank you to everyone in the audience who's listening in. Just wanted to give you know, the final 30 seconds to see if there's anything else you'd like to highlight or a message you wanna leave the investors with before we sign off.
Yeah, thanks. Thanks, Brett. You know, the one thing I think I would just like to reiterate is that, you know, when I came in here looking at and initiating this turnaround with Inogen, we've made a lot of progress towards this. We've got back to growth, being able to deliver growth to the shareholders, both from a revenue standpoint as well as getting to a positive adjusted EBITDA standpoint on our way to a sustainable profitability. We've expanded the pipeline. We said we were gonna turn Inogen from a single product company into a platform play, and we've been able to deliver that. Now we're in the execution phase on this and excited for the future. Thank you, Brett.
All right. Well, I think that's a great note to leave everyone with. Thanks again for everyone listening.