NEVRO CORP [NVRO] Filings

10-Q 1 nvro-20220930.htm 10-Q 10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2022

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number: 001-36715

Nevro Corp.

(Exact name of registrant as specified in its charter)

Delaware

56-2568057

(State or other jurisdiction of
incorporation or organization)

(I.R.S. Employer
Identification No.)

1800 Bridge Parkway

Redwood City, CA

(Address of principal executive offices)

94065

(Zip Code)

(650) 251-0005

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol	Name of each exchange on which registered
Common Stock, $0.001 par value per share	NVRO	The New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☒	Accelerated filer	☐

Non-accelerated filer	☐	Smaller reporting company	☐

		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of October 25, 2022, there were 35,430,089 shares of the registrant’s common stock, par value $0.001 per share, outstanding.

Nevro Corp.

TABLE OF CONTENTS


		Page

PART I—FINANCIAL INFORMATION		3

Item 1. Condensed Consolidated Financial Statements (unaudited)		3

Condensed Consolidated Balance Sheets as of September 30, 2022 and December 31, 2021		3

Condensed Consolidated Statements of Operations and Comprehensive Loss for the three and nine months ended September 30, 2022 and 2021		4

Condensed Consolidated Statements of Stockholders’ Equity for the three and nine months ended September 30, 2022 and 2021		5

Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2022 and 2021		6

Notes to Condensed Consolidated Financial Statements		7

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		21

Item 3. Quantitative and Qualitative Disclosures About Market Risk		34

Item 4. Controls and Procedures		34

PART II—OTHER INFORMATION		34

Item 1. Legal Proceedings		34

Item 1A. Risk Factors		34

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		34

Item 3. Defaults Upon Senior Securities		35

Item 4. Mine Safety Disclosures		35

Item 5. Other Information		35

Item 6. Exhibits		36

SIGNATURES		38

PART I—FINANCIAL INFORMATION

Item 1. Condensed Consolidated Financial Statements

Nevro Corp.

Condensed Consolidated Balance Sheets

(unaudited)

(in thousands, except share and per share data)


	September 30,			December 31,
	2022			2021
Assets
Current assets
Cash and cash equivalents	$	130,839		$	34,710
Short-term investments		256,057			327,317
Accounts receivable, net of allowance for doubtful accounts of $1,222 and $1,385 at September 30, 2022 and December 31, 2021, respectively		69,572			70,475
Inventories		98,525			93,517
Prepaid expenses and other current assets		11,080			5,185
Total current assets		566,073			531,204
Property and equipment, net		21,173			20,664
Operating lease assets		14,497			17,577
Other assets		3,163			4,493
Restricted cash		606			606
Total assets	$	605,512		$	574,544
Liabilities and stockholders’ equity
Current liabilities
Accounts payable	$	31,839		$	31,999
Accrued liabilities		43,388			45,517
Other current liabilities		5,071			4,687
Total current liabilities		80,298			82,203
Long-term debt		186,559			151,310
Long-term operating lease liabilities		11,624			15,402
Other long-term liabilities		2,096			22,013
Total liabilities		280,577			270,928
Commitments and contingencies (Note 6)
Stockholders’ equity
Preferred stock, $0.001 par value, 10,000,000 shares authorized at September 30, 2022 and December 31, 2021; zero shares issued and outstanding at September 30, 2022 and December 31, 2021		—			—
Common stock, $0.001 par value, 290,000,000 shares authorized at September 30, 2022 and December 31, 2021; 36,107,515 and 35,709,570 shares issued at September 30, 2022 and December 31, 2021, respectively; 35,424,599 and 35,026,654 shares outstanding at September 30, 2022 and December 31, 2021, respectively		35			35
Additional paid-in capital		917,946			928,138
Accumulated other comprehensive income (loss)		(5,041	)		(364	)
Accumulated deficit		(588,005	)		(624,193	)
Total stockholders’ equity		324,935			303,616
Total liabilities and stockholders’ equity	$	605,512		$	574,544

The accompanying notes are an integral part of these condensed consolidated financial statements.

Nevro Corp.

Condensed Consolidated Statements of Operations and Comprehensive Loss

(unaudited)

(in thousands, except share and per share data)


	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2022			2021			2022			2021
Revenue	$	100,466		$	93,205		$	292,521		$	284,145
Cost of revenue		31,164			28,575			91,393			87,235
Gross profit		69,302			64,630			201,128			196,910
Operating expenses
Research and development		14,030			11,553			39,118			34,956
Sales, general and administrative		78,190			79,521			241,488			226,673
Certain litigation charges (credits)		(105,000	)		20,000			(105,000	)		20,000
Total operating expenses		(12,780	)		111,074			175,606			281,629
Income (Loss) from operations		82,082			(46,444	)		25,522			(84,719	)
Interest income		1,128			99			1,553			559
Interest expense		(1,608	)		(3,688	)		(4,819	)		(15,939	)
Other income (expense), net		391			30			844			(515	)
Income (Loss) before income taxes		81,993			(50,003	)		23,100			(100,614	)
Provision for income taxes		485			72			907			612
Net income (loss)		81,508			(50,075	)		22,193			(101,226	)
Other comprehensive loss:
Changes in foreign currency translation adjustment		(1,690	)		(401	)		(3,293	)		(651	)
Changes in unrealized gains on short-term investments, net		(102	)		(8	)		(1,384	)		(127	)
Net change in other comprehensive loss		(1,792	)		(409	)		(4,677	)		(778	)
Comprehensive income (loss)	$	79,716		$	(50,484	)	$	17,516		$	(102,004	)
Net income (loss) per common share
Basic	$	2.30		$	(1.44	)	$	0.63		$	(2.91	)
Diluted	$	2.22		$	(1.44	)	$	0.63		$	(2.91	)
Weighted average number of shares used to compute net income (loss) per share
Basic		35,402,086			34,878,443			35,265,193			34,774,423
Diluted		37,338,945			34,878,443			35,501,609			34,774,423

The accompanying notes are an integral part of these condensed consolidated financial statements.

Nevro Corp.

Condensed Consolidated Statements of Stockholders’ Equity

(unaudited)

(in thousands, except share data)

For the three and nine months ended September 30, 2022


						Additional						Accumulated			Total
	Common Stock					Paid-In			Accumulated			Other Comprehensive			Stockholders'
	Shares			Amount		Capital			Deficit			Income (Loss)			Equity
Balances at December 31, 2021		35,026,654		$	35	$	928,138		$	(624,193	)	$	(364	)	$	303,616
Adjustments from adoption of ASU 2020-06		—			—		(48,340	)		13,995			—			(34,345	)
Exercise of common stock options		10,642			—		545			—			—			545
Issuance of common stock upon release of restricted stock units		263,412			—		—			—			—			—
Shares withheld for tax obligations		(107,257	)		—		(7,298	)		—			—			(7,298	)
Stock based compensation		—			—		13,406			—			—			13,406
Net loss		—			—		—			(34,325	)		—			(34,325	)
Change in other comprehensive loss		—			—		—			—			(1,213	)		(1,213	)
Balances at March 31, 2022		35,193,451			35		886,451			(644,523	)		(1,577	)		240,386
Exercise of common stock options		5,100			—		230			—			—			230
Issuance of common stock upon release of restricted stock units		109,742			—		—			—			—			—
Shares withheld for tax obligations		(12,323	)		—		(759	)		—			—			(759	)
Issuance of common stock under employee stock purchase plan		84,837			—		3,414			—			—			3,414
Stock based compensation		—			—		13,376			—			—			13,376
Net loss		—			—		—			(24,990	)		—			(24,990	)
Other comprehensive loss		—			—		—			—			(1,672	)		(1,672	)
Balances at June 30, 2022		35,380,807			35		902,712			(669,513	)		(3,249	)		229,985
Exercise of common stock options		8,749			—		366			—			—			366
Issuance of common stock upon release of restricted stock units		42,038			—		—			—			—			—
Shares withheld for tax obligations		(6,995	)		—		(329	)		—			—			(329	)
Stock based compensation		—			—		15,197			—			—			15,197
Net income		—			—		—			81,508			—			81,508
Other comprehensive loss		—			—		—			—			(1,792	)		(1,792	)
Balances at September 30, 2022		35,424,599		$	35	$	917,946		$	(588,005	)	$	(5,041	)	$	324,935

For the three and nine months ended September 30, 2021


						Additional						Accumulated		Total
	Common Stock					Paid-In			Accumulated			Other Comprehensive		Stockholders'
	Shares			Amount		Capital			Deficit			Income (Loss)		Equity
Balances at December 31, 2020		34,583,064		$	35	$	880,660		$	(492,833	)	$	598	$	388,460
Exercise of common stock options		28,152			—		1,331			—			—		1,331
Issuance of common stock upon release of restricted stock units		99,389			—		—			—			—		—
Shares withheld for tax obligations		(17,886	)		—		(2,801	)		—			—		(2,801	)
Stock based compensation		—			—		9,235			—			—		9,235
Net loss		—			—		—			(29,561	)		—		(29,561	)
Change in other comprehensive loss		—			—

NEVRO CORP [NVRO] Filings
10-Q	[2022-11-02]
10-Q	[2022-08-03]
10-Q	[2022-05-04]
10-K	[2022-02-23]
10-Q	[2021-11-08]
10-Q	[2021-08-04]
10-Q	[2021-05-05]
10-K	[2021-02-24]
10-Q	[2020-11-05]
10-Q	[2020-08-05]
10-Q	[2020-05-05]
10-K	[2020-02-25]
10-Q	[2019-11-06]
10-Q	[2019-08-08]
10-Q	[2019-05-09]
10-K	[2019-02-21]
10-Q	[2018-11-05]
10-Q	[2018-08-02]
10-Q	[2018-05-07]
10-K	[2018-02-22]
10-Q	[2017-11-06]
10-Q	[2017-08-07]
10-Q	[2017-05-08]
10-K	[2017-02-23]
10-Q	[2016-11-07]
10-Q	[2016-08-08]
10-Q	[2016-05-09]
10-K	[2016-02-29]
10-Q	[2015-11-09]
10-Q	[2015-08-06]
S-1	[2015-05-18]
10-Q	[2015-05-11]
10-K	[2015-03-18]
10-Q	[2014-12-02]
S-1	[2014-10-03]