NEVRO CORP [NVRO] Filings

10-Q 1 nvro-20220630.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 June 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 July 26, 2022, there were 35,387,839 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 June 30, 2022 and December 31, 2021		3

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

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

Condensed Consolidated Statements of Cash Flows for the six months ended June 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		20

Item 3. Quantitative and Qualitative Disclosures About Market Risk		32

Item 4. Controls and Procedures		32

PART II—OTHER INFORMATION		33

Item 1. Legal Proceedings		33

Item 1A. Risk Factors		33

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		33

Item 3. Defaults Upon Senior Securities		33

Item 4. Mine Safety Disclosures		33

Item 5. Other Information		33

Item 6. Exhibits		34

SIGNATURES		36

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)


	June 30,			December 31,
	2022			2021
Assets
Current assets
Cash and cash equivalents	$	109,010		$	34,710
Short-term investments		201,813			327,317
Accounts receivable, net of allowance for doubtful accounts of $1,139 and $1,385 at June 30, 2022 and December 31, 2021, respectively		66,903			70,475
Inventories		93,520			93,517
Prepaid expenses and other current assets		12,056			5,185
Total current assets		483,302			531,204
Property and equipment, net		20,790			20,664
Operating lease assets		15,543			17,577
Other assets		3,675			4,493
Restricted cash		606			606
Total assets	$	523,916		$	574,544
Liabilities and stockholders’ equity
Current liabilities
Accounts payable	$	31,298		$	31,999
Accrued liabilities		36,421			45,517
Other current liabilities		4,947			4,687
Total current liabilities		72,666			82,203
Long-term debt		186,256			151,310
Long-term operating lease liabilities		12,930			15,402
Other long-term liabilities		22,079			22,013
Total liabilities		293,931			270,928
Commitments and contingencies (Note 6)
Stockholders’ equity
Preferred stock, $0.001 par value, 10,000,000 shares authorized at June 30, 2022 and December 31, 2021; zero shares issued and outstanding at June 30, 2022 and December 31, 2021		—			—
Common stock, $0.001 par value, 290,000,000 shares authorized at June 30, 2022 and December 31, 2021; 36,063,723 and 35,709,570 shares issued at June 30, 2022 and December 31, 2021, respectively; 35,380,807 and 35,026,654 shares outstanding at June 30, 2022 and December 31, 2021, respectively		35			35
Additional paid-in capital		902,712			928,138
Accumulated other comprehensive income (loss)		(3,249	)		(364	)
Accumulated deficit		(669,513	)		(624,193	)
Total stockholders’ equity		229,985			303,616
Total liabilities and stockholders’ equity	$	523,916		$	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						Six Months Ended
	June 30,						June 30,
	2022			2021			2022			2021
Revenue	$	104,213		$	102,330		$	192,055		$	190,940
Cost of revenue		31,479			32,344			60,229			58,660
Gross profit		72,734			69,986			131,826			132,280
Operating expenses
Research and development		12,552			11,869			25,088			23,403
Sales, general and administrative		83,973			73,880			163,298			147,152
Total operating expenses		96,525			85,749			188,386			170,555
Loss from operations		(23,791	)		(15,763	)		(56,560	)		(38,275	)
Interest income		282			163			425			460
Interest expense		(1,608	)		(5,704	)		(3,211	)		(12,251	)
Other income (expense), net		368			(88	)		453			(545	)
Loss before income taxes		(24,749	)		(21,392	)		(58,893	)		(50,611	)
Provision for income taxes		241			198			422			540
Net loss		(24,990	)		(21,590	)		(59,315	)		(51,151	)
Other comprehensive loss:
Changes in foreign currency translation adjustment		(1,411	)		62			(1,603	)		(250	)
Changes in unrealized gains on short-term investments, net		(261	)		28			(1,282	)		(119	)
Net change in other comprehensive loss		(1,672	)		90			(2,885	)		(369	)
Comprehensive loss	$	(26,662	)	$	(21,500	)	$	(62,200	)	$	(51,520	)
Net loss per share, basic and diluted	$	(0.71	)	$	(0.62	)	$	(1.69	)	$	(1.47	)
Weighted average number of common shares used to compute basic and diluted net loss per share		35,317,766			34,808,389			35,196,488			34,721,551

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 six months ended June 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

For the three and six months ended June 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		—			—			—			—			(459	)		(459	)
Balances at March 31, 2021		34,692,719		$	35		$	888,425		$	(522,394	)	$	139		$	366,205
Exercise of common stock options		5,998			—			305			—			—			305
Issuance of common stock upon release of restricted stock units		133,609			—			—			—			—			—
Shares withheld for tax obligations		(15,142	)		—			(2,314	)		—			—			(2,314	)
Issuance of common stock under employee stock purchase plan		37,753			—			4,648			—			—			4,648
Issuance of common stock from conversion of convertible senior notes due 2021		682,912			1			(1	)		—			—			—
Exercise of bond hedge for convertible senior notes due 2021		(682,916	)		(1	)		1			—			—			—
Stock based compensation		—			—			11,032			—			—			11,032
Net loss		—			—			—			(21,590	)		—			(21,590	)
Other comprehensive loss		—			—			—			—			90			90
Balances at June 30, 2021		34,854,933		$	35		$	902,096		$	(543,984	)	$	229		$	358,376

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

Nevro Corp.

Condensed Consolidated Statements of Cash Flows

(unaudited)

(in thousands)


	Six Months Ended
	June 30,
	2022			2021
Cash flows from operating activities
Net loss	$	(59,315	)	$	(51,151	)
Adjustments to reconcile net loss to net cash used in operating activities
Depreciation and amortization		3,056			2,250
Amortization of operating lease assets		2,034			1,838
Stock-based compensation expense		26,785			20,271

NEVRO CORP [NVRO] Filings
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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]