Inogen Inc

Previous wording

Forward-looking statements involve known and unknown risks, uncertainties, and other factors that may cause our actual results, performance, or achievements to be materially different from any future results, performance, or achievements expressed or implied by the forward-looking statements. We discuss these risks in greater detail in the sections entitled “Risk Factors” and elsewhere in this Quarterly Report on Form 10-Q and in our Annual Report on Form 10-K filed with the SEC. Given these uncertainties, you should not place undue reliance on these forward-looking statements. Moreover, we operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for us to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. In light of these risks, uncertainties and assumptions, the future events and trends discussed in this Quarterly Report on Form 10-Q may not occur and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements.

Current wording

Forward-looking statements involve known and unknown risks, uncertainties, and other factors that may cause our actual results, performance, or achievements to be materially different from any future results, performance, or achievements expressed or implied by the forward-looking statements. We discuss these risks in greater detail in the sections entitled “Risk Factors” and elsewhere in this Quarterly Report on Form 10-Q and in our Annual Report on Form 10-K filed with the SEC on March 1, 2024. Given these uncertainties, you should not place undue reliance on these forward-looking statements. Moreover, we operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for us to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. In light of these risks, uncertainties and assumptions, the future events and trends discussed in this Quarterly Report on Form 10-Q may not occur and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements.

Previous wording

“Inogen,” “Inogen One,” “Inogen One G3,” “G4,” “G5,” “Oxygen.Anytime.Anywhere,” “Intelligent Delivery Technology,” “Inogen At Home,” the Inogen design, “TIDAL ASSIST,” “TAV,” and “SIDEKICK” are registered trademarks with the United States Patent and Trademark Office of Inogen, Inc. We own pending applications for the marks “Rove,” “Inogen Rove,” “Inogen Rove 4” and “Inogen Rove 6” with the United States Patent and Trademark Office. We own trademark registrations for the mark “Inogen” in Argentina, Australia, Canada, Chile, China, Columbia, Ecuador, South Korea, Malaysia, Mexico, Europe (European Union Registration), the United Kingdom, Iceland, India, Israel, Japan, Kuwait, New Zealand, Norway, Paraguay, Peru, Turkey, Singapore, South Africa, Switzerland, and Uruguay. We own a pending application for the mark “Inogen” in the Dominican Republic. We own a trademark registration for the mark “イノジェン” in Japan. We own trademark registrations for the marks “印诺真” and “艾诺根” in China. We own trademark registrations for the mark “Inogen One” in Australia, Canada, China, South Korea, Mexico, Europe (European Union Registration), and the United Kingdom. We own a trademark registration for the mark “Satellite Conserver” in Canada. We own a trademark registration for the mark “Inogen At Home” in Europe (European Union Registration) and the United Kingdom. We own trademark registrations for the mark “G4” in Europe (European Union Registration) and the United Kingdom. We own trademark registrations for the marks “Inogen Rove 4” and “Inogen Rove 6” in Europe (European Union Registrations) and the United Kingdom. We own trademark registrations for the mark “G5” in Europe (European Union Registration) and the United Kingdom. We own pending applications for the marks “Inogen Rove 4,” and “Inogen Rove 6,” “Rove 4” in Canada, . We own pending applications for the mark “Rove 6” in Canada, Europe (the European Union), and the United Kingdom. We own a trademark application for the Inogen design in Bolivia. We own a trademark registration for the Inogen design in China. We own a trademark registration for the mark “إنوجن” in Saudi Arabia. We own a pending application for the Inogen One G5 design in Brazil. Other service marks, trademarks, and trade names referred to in this Quarterly Report on Form 10-Q are the property of their respective owners. “PHYSIO-ASSIST,” “PHYSIOASSIST,” the Physio-Assist logo, “SIMEOX,” “SIMEOX PRO,” “SIMESOFT,” “PHYSIOWEB,” “PHYSIODATA,” “PHYSIOSERVICES,” and the Pissenlit logo are registered trademarks of Inogen’s wholly-owned subsidiary Physio-Assist. Physio-Assist owns trademark registrations for the mark “PHYSIO-ASSIST” in European Union, France, Japan, United Kingdom, and USA. Physio-Assist owns trademark registrations for the Physio-Assist logo in China, European Union, France, Japan, South Korea, United Kingdom, and USA. Physio-Assist owns trademark registrations for the mark SIMEOX in European Union, France, Japan, Russia, United Kingdo…

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Current wording

“Inogen,” “Inogen One,” “Inogen One G3,” “G4,” “G5,” “Oxygen.Anytime.Anywhere,” “Intelligent Delivery Technology,” “Inogen At Home,” the Inogen design, color dandelion design are registered trademarks with the United States Patent and Trademark Office of Inogen, Inc. We own pending applications for the marks “Rove,” “Inogen Rove,” “Inogen Rove 4” and “Inogen Rove 6” with the United States Patent and Trademark Office. We own trademark registrations for the mark “Inogen” in Argentina, Australia, Canada, Chile, China, Columbia, Ecuador, South Korea, Malaysia, Mexico, Europe (European Union Registration), the United Kingdom, Iceland, India, Israel, Japan, Kuwait, New Zealand, Norway, Dominican Republic, Peru, Turkey, Singapore, South Africa, Switzerland, and Uruguay. We own a trademark registration for the mark “イノジェン” in Japan. We own trademark registrations for the marks “印诺真” and “艾诺根” in China. We own trademark registrations for the mark “Inogen One” in Australia, Canada, China, South Korea, Mexico, Europe (European Union Registration), and the United Kingdom. We own a trademark registration for the mark “Satellite Conserver” in Canada. We own a trademark registration for the mark “Inogen At Home” in Europe (European Union Registration) and the United Kingdom. We own trademark registrations for the mark “G4” in Europe (European Union Registration) and the United Kingdom. We own trademark registrations for the marks “Inogen Rove 4” and “Inogen Rove 6” in Europe (European Union Registrations) and the United Kingdom. We own trademark registrations for the mark “G5” in Europe (European Union Registration) and the United Kingdom. We own pending applications for the marks “Inogen Rove 4” and “Inogen Rove 6” in Canada. We own a trademark application for the Inogen design in Bolivia. We own a trademark registration for the Inogen design in China. We own a trademark registration for the mark “إنوجن” in Saudi Arabia. We own a pending application for the Inogen One G5 design in Brazil. Other service marks, trademarks, and trade names referred to in this Quarterly Report on Form 10-Q are the property of their respective owners. “PHYSIO-ASSIST,” “PHYSIOASSIST,” the Physio-Assist logo, “SIMEOX,” “SIMEOX PRO,” “SIMESOFT,” “PHYSIOWEB,” “PHYSIODATA,” “PHYSIOSERVICES,” and the Pissenlit logo are registered trademarks of Inogen’s wholly-owned subsidiary Physio-Assist. Physio-Assist owns trademark registrations for the mark “PHYSIO-ASSIST” in European Union, France, Japan, United Kingdom, and USA. Physio-Assist owns trademark registrations for the Physio-Assist logo in China, European Union, France, Japan, South Korea, United Kingdom, and USA. Physio-Assist owns trademark registrations for the mark SIMEOX in European Union, France, Japan, Russia, United Kingdom, and USA. Physio-Assist owns trademark registrations in France for the mark “PHYSIOASSIST,” “SIMESOFT,” “SIMEOX PRO,” “PHYSIOWEB,” “PHYSIODATA,” “PHYSIOSERVICES,” and the Pissenlit logo.

Previous wording

There have been no material changes in our critical accounting policies and estimates in the preparation of our consolidated financial statements during the three months ended March 31, 2024 compared to those disclosed in our Annual Report on Form 10-K for the year ended December 31, 2023, as filed with the SEC on March 1, 2024.

Current wording

There have been no material changes in our critical accounting policies and estimates in the preparation of our consolidated financial statements during the three and six months ended June 30, 2024 compared to those disclosed in our Annual Report on Form 10-K for the year ended December 31, 2023, as filed with the SEC on March 1, 2024.

Previous wording

Invest in our oxygen product offerings to develop innovative products and expand clinical evidence. We incurred $6.6 million and $5.3 million in the three months ended March 31, 2024 and 2023, respectively, in research and development expenses, and we intend to continue to make such investments in the foreseeable future.

Current wording

Invest in our oxygen product offerings to develop innovative products and expand clinical evidence. We incurred $5.6 million and $4.3 million in the three months ended June 30, 2024 and 2023, respectively, and $12.2 million and $9.6 million in the six months ended June 30, 2024 and 2023, respectively, in research and development expenses, and we intend to continue to make such investments in the foreseeable future.

Previous wording

Our future financial performance will be driven in part by the growth in sales of our POCs, Simeox airway clearance, and, to a lesser extent, sales of batteries, other accessories, and our Inogen At Home stationary oxygen concentrators. We plan to grow our system sales in the coming years through multiple strategies including: improving sales force productivity, hiring additional sales representatives directly, investing in consumer and physician awareness and advocacy through increased sales and marketing efforts, expanding our clinical evidence, expanding our sales infrastructure and efforts outside of the United States, expanding our business-to-business sales through key strategic partnerships, and enhancing our product offerings through additional product launches. While we believe HME providers are still in the process of converting their business model to a non-delivery model through the purchase of POCs, growth has been challenged due to HME restructuring efforts, lack of access to available credit, provider capital expenditure constraints, and risk of potential changes in reimbursement rates.

Current wording

Our future financial performance will be driven primarily by the growth in sales of our POCs, Simeox airway clearance, and, to a lesser extent, sales of batteries, other accessories, and our Inogen At Home stationary oxygen concentrators. We plan to grow our system sales in the coming years through multiple strategies including: improving sales force productivity, hiring additional sales representatives directly, investing in consumer and physician awareness and advocacy through increased sales and marketing efforts, expanding our clinical evidence, expanding our sales infrastructure and efforts outside of the United States, expanding our business-to-business sales through key strategic partnerships, and enhancing our product offerings through additional product launches. While we believe HME providers are still in the process of converting their business model to a non-delivery model through the purchase of POCs, growth has been challenged due to HME restructuring efforts, lack of access to available credit, provider capital expenditure constraints, and risk of potential changes in reimbursement rates.

Previous wording

Our direct-to-consumer sales processes involve numerous interactions with the individual patient, their physician and the physician’s staff, and includes an in-depth analysis and review of our product, the patient’s diagnosis and prescribed oxygen therapy, including procuring an oxygen prescription. The patient may consider whether to finance the product through an Inogen-approved third party or purchase the equipment. Product is not deployed until both the prescription and payment are secured. Once a full system is deployed, the patient has 30 calendar days to return the product. Approximately 6-11% of consumers who purchase a system return the system during this 30-day return period.

Current wording

Our direct-to-consumer sales processes involve numerous interactions with the individual patient, their physician and the physician’s staff, and includes an in-depth analysis and review of our product, the patient’s diagnosis and prescribed oxygen therapy, including procuring an oxygen prescription. The patient may consider whether to finance the product through an Inogen-approved third party or purchase the equipment. Product is not deployed until both the prescription and payment are secured. Once a full system is deployed, the patient has 30 calendar days to return the product. Approximately 7-11% of consumers who purchase a system return the system during this 30-day return period.

Previous wording

We sold approximately 33,900 systems in the three months ended March 31, 2024 and 26,900 systems for the same period in 2023. The increase in the current period was primarily due to the result of increased demand from resellers. We continue to focus on optimizing profitability in our direct-to-consumer channel, driving sales productivity with an efficiently scaled sales organization.

Current wording

We sold approximately 41,300 systems in the three months ended June 30, 2024 and 34,100 systems for the same period in 2023. We sold approximately 75,200 systems in the six months ended June 30, 2024 and 61,000 for the same period in 2023. The increase in the current period was primarily due to the result of increased demand from resellers. We continue to focus on optimizing profitability in our direct-to-consumer channel, driving sales productivity with an efficiently scaled sales organization.

Previous wording

Rental revenue decreased in the three months ended March 31, 2024 compared to the three months ended March 31, 2023, primarily due to a higher rental revenue adjustments and lower average reimbursement rates per patient resulting from the change in mix of payors toward private insurance from Medicare. Medicare reimbursement rates for oxygen therapy have increased annually each January as they are subject to Consumer Price Index adjustments. We plan to add new rental patients on service in future periods through multiple strategies, including expanding our prescriber sales teams, expanding our direct-to-consumer marketing efforts, investing in patient and physician awareness and advocacy, expanding clinical evidence, and securing additional insurance contracts.

Current wording

Rental revenue decreased in the three months ended June 30, 2024 compared to the three months ended June 30, 2023, primarily due lower average reimbursement rates per patient resulting from the change in mix of payors toward private insurance from Medicare. Medicare reimbursement rates for oxygen therapy have increased annually each January as they are subject to Consumer Price Index adjustments. We plan to add new rental patients on service in future periods through multiple strategies, including expanding our prescriber sales teams, expanding our direct-to-consumer marketing efforts, investing in patient and physician awareness and advocacy, expanding clinical evidence, and securing additional insurance contracts.

Previous wording

We had approximately 51,800 and 45,800 oxygen rental patients as of March 31, 2024 and March 31, 2023, respectively. Management focuses on patients on service as a leading indicator of likely future rental revenue; however, actual rental revenue recognized is subject to a variety of other factors, including billable patients as a percentage of patients on service, reimbursement levels by payor, patient location, the number of capped patients, write-offs for uncollectible balances, and rental revenue adjustments.

Current wording

We had approximately 51,900 and 48,900 oxygen rental patients as of June 30, 2024 and June 30, 2023, respectively. Management focuses on patients on service as a leading indicator of likely future rental revenue; however, actual rental revenue recognized is subject to a variety of other factors, including billable patients as a percentage of patients on service, reimbursement levels by payor, patient location, the number of capped patients, write-offs for uncollectible balances, and rental revenue adjustments.

Previous wording

We rely significantly on reimbursement from Medicare and private payors, including Medicare Advantage plans and Medicaid, for our rental revenue. For the three months ended March 31, 2024 and 2023, approximately 58.4% and 73.8%, respectively, of our rental revenue was derived from Medicare’s traditional fee-for-service reimbursement programs. For additional discussion of our reliance on third-party reimbursement and the impact of the recent Medicare reimbursement proposals, see the discussion in the subsection entitled "Third-Party Reimbursement" in Item 1 of our Annual Report on Form 10-K and the section entitled “Risk Factors” in our Annual Report on Form 10-K filed with the SEC on March 1, 2024.

Current wording

We rely significantly on reimbursement from Medicare and private payors, including Medicare Advantage plans and Medicaid, for our rental revenue. For the three months ended June 30, 2024 and 2023, approximately 57.0% and 70.2%, respectively, and for the six months ended June 30, 2024 and 2023, approximately 57.7% and 72.1%, respectively, of our rental revenue was derived from Medicare’s traditional fee-for-service reimbursement programs. For additional discussion of our reliance on third-party reimbursement and the impact of the recent Medicare reimbursement proposals, see the discussion in the subsection entitled "Third-Party Reimbursement" in Item 1 of our Annual Report on Form 10-K and the section entitled “Risk Factors” in our Annual Report on Form 10-K filed with the SEC on March 1, 2024.

Previous wording

For these reasons, we expect sales gross margin percentage to fluctuate over time based on the sales channel mix, product mix, and changes in average selling prices and manufacturing cost per unit.

Current wording

We expect sales gross margin percentage to fluctuate over time based on the sales channel mix, product mix, and changes in average selling prices and manufacturing cost per unit.

Previous wording

Cost of rental revenue consists primarily of depreciation expense, consumable disposables, logistics costs, and service costs for rental patients, including rework costs, material, labor, and freight.

Current wording

Cost of rental revenue consists primarily of depreciation expense, consumable disposables, logistics costs, and service costs for our rental equipment, including rework costs, material, labor, and freight.

Previous wording

Sales revenue increased $7.2 million for the three months ended March 31, 2024 from the three months ended March 31, 2023, an increase of 12.9% from the comparable period. The increase was primarily attributable to higher international and domestic business-to-business sales. We sold approximately 33,900 oxygen systems during the three months ended March 31, 2024 compared to approximately 26,900 oxygen systems sold during the three months ended March 31, 2023, an increase of 26.0%.

Current wording

Sales revenue increased $6.1 million for the three months ended June 30, 2024 from the three months ended June 30, 2023, an increase of 8.9% from the comparable period. The increase was primarily attributable to higher demand and new customers in international and domestic business-to-business sales. We sold approximately 41,300 oxygen systems during the three months ended June 30, 2024 compared to approximately 34,100 oxygen systems sold during the three months ended June 30, 2023, an increase of 21.7%.

Previous wording

Domestic business-to-business sales increased 31.3% for the three months ended March 31, 2024 compared to the three months ended March 31, 2023 primarily due to the result of increased demand from new customers and resellers.

Current wording

Domestic business-to-business sales increased 16.5% for the three months ended June 30, 2024 compared to the three months ended June 30, 2023 primarily due to the result of increased demand from new customers and resellers.

Previous wording

Domestic direct-to-consumer rentals decreased 8.3% for the three months ended March 31, 2024 compared to the three months ended March 31, 2023, primarily related to higher rental revenue adjustments and a higher mix of lower private-payor reimbursement rates.

Current wording

Domestic direct-to-consumer rentals decreased 6.2% for the three months ended June 30, 2024 compared to the three months ended June 30, 2023, primarily related to higher mix of lower private-payor reimbursement rates.

Previous wording

Gross margin on sales revenue increased to 44.1% for the three months ended March 31, 2024 from 39.2% for the three months ended March 31, 2023. The increase was primarily due to lower material cost premiums associated with open-market purchases of semiconductor chips used in our batteries and POCs, partially offset by a change in sales mix towards increased business-to-business sales. Total worldwide business-to-business sales revenue accounted for 67.4% of total sales revenue in the three months ended March 31, 2024 versus 56.5% in the three months ended March 31, 2023.

Current wording

Gross margin on sales revenue increased to 48.5% for the three months ended June 30, 2024 from 38.5% for the three months ended June 30, 2023. The increase was primarily due to lower material cost premiums associated with open-market purchases of semiconductor chips used in our POCs and adjustments in reserves, partially offset by a change in sales mix towards increased business-to-business sales. Total worldwide business-to-business sales revenue accounted for 69.6% of total sales revenue in the three months ended June 30, 2024 versus 60.8% in the three months ended June 30, 2023.

Previous wording

Gross margin on rental revenue decreased to 43.7% for the three months ended March 31, 2024 from 54.1% for the three months ended March 31, 2023, primarily due to lower net revenue per rental patient as a result of a decrease in the percentage of patients billed compared to total patients on service, a higher mix shift of private-payor reimbursement and higher rental revenue adjustments.

Current wording

Gross margin on rental revenue decreased to 46.2% for the three months ended June 30, 2024 from 50.5% for the three months ended June 30, 2023, primarily due to lower net revenue per rental patient as a result of a decrease in the percentage of patients billed compared to total patients on service and a higher mix shift of private-payor reimbursement.

Previous wording

Research and development expense increased $1.2 million for the three months ended March 31, 2024 from the three months ended March 31, 2023, an increase of 23.1% from the comparable period. This was due primarily to a $0.8 million increase in amortization of intangible assets.

Current wording

Research and development expense increased $1.3 million for the three months ended June 30, 2024 from the three months ended June 30, 2023, an increase of 30.8% from the comparable period. This was due primarily to a $0.8 million increase in amortization of intangible assets and a $0.8 million increase in product development costs.

Previous wording

Sales and marketing expense decreased $1.5 million for the three months ended March 31, 2024 from the three months ended March 31, 2023, a decrease of 5.3% from the comparable period. This was primarily due to decreases of $1.9 million in personnel-related expenses, $1.0 million in dues, fees and licenses, and $0.5 million in credit card and financing fees, partially offset by an increase of $2.0 million in media and advertising costs. In the three months ended March 31, 2024, we spent $8.4 million in media and advertising costs versus $6.4 million in the comparative period in 2023.

Current wording

Sales and marketing expense decreased $1.3 million for the three months ended June 30, 2024 from the three months ended June 30, 2023, a decrease of 4.8% from the comparable period. This was primarily due to decreases of $3.3 million in consulting and $0.5 million in dues, fees and licenses, partially offset by an increase of $1.8 million in media and advertising costs and $0.6 million in personnel-related expenses. In the three months ended June 30, 2024, we spent $8.5 million in media and advertising costs versus $6.7 million in the comparative period in 2023.

Previous wording

Total other income, net decreased $0.2 million for the three months ended March 31, 2024 from the three months ended March 31, 2023, a decrease of 12.3% from the comparable period.

Current wording

Total other income, net decreased $0.5 million for the three months ended June 30, 2024 from the three months ended June 30, 2023, a decrease of 26.0% from the comparable period.

Previous wording

Income tax expense (benefit) decreased $0.3 million for the three months ended March 31, 2024 from the three months ended March 31, 2023. We continued to record a valuation allowance on the use of deferred tax assets in the current and prior periods. The decrease was attributable to foreign taxes.

Current wording

Income tax expense (benefit) decreased less than $0.1 million for the three months ended June 30, 2024 from the three months ended June 30, 2023. We continued to record a valuation allowance on the use of deferred tax assets in the current and prior periods. The decrease was attributable to foreign taxes.

Previous wording

Our effective tax rate for the three months ended March 31, 2024 increased compared to the three months ended March 31, 2023, primarily due to foreign taxes.

Current wording

Our effective tax rate for the three months ended June 30, 2024 increased slightly compared to the three months ended June 30, 2023, primarily due to foreign taxes.

Previous wording

Net loss decreased $5.8 million for the three months ended March 31, 2024 from the three months ended March 31, 2023, or a decrease of 28.4% from the comparable period. The decrease in net loss was primarily related to an increase in sales revenue and lower operating expense and material cost premiums.

Current wording

Net loss decreased $4.2 million for the three months ended June 30, 2024 from the three months ended June 30, 2023, or a decrease of 43.1% from the comparable period. The decrease in net loss was primarily related to an increase in sales revenue and lower material cost premiums.

Previous wording

Rental revenue decreased $1.3 million for the three months ended March 31, 2024 from the three months ended March 31, 2023, or a decrease of 8.3% from the comparable period. The decrease in rental revenue was primarily related to higher rental revenue adjustments and a higher mix of lower private-payor reimbursement rates, partially offset by higher patients on service.

Current wording

Rental revenue decreased $2.3 million for the six months ended June 30, 2024 from the six months ended June 30, 2023, or a decrease of 7.3% from the comparable period. The decrease in rental revenue was primarily related to higher mix of lower private-payor reimbursement rates, partially offset by higher patients on service.

Previous wording

International business-to-business sales increased 37.2% for the three months ended March 31, 2024 compared to the three months ended March 31, 2023, primarily due to an increase in sales from our partners in Europe. In the three months ended March 31, 2024, sales in Europe as a percentage of total international sales revenue increased to 88.2% versus 81.8% from the comparative period in 2023.

Current wording

International business-to-business sales increased 33.8% for the six months ended June 30, 2024 compared to the six months ended June 30, 2023, primarily due to an increase in demand from our partners in Europe and new customers. In the six months ended June 30, 2024, sales in Europe as a percentage of total international sales revenue slightly increased to 87.4% versus 87.2% from the comparative period in 2023.

Previous wording

Cost of sales revenue increased $1.3 million for the three months ended March 31, 2024 from the three months ended March 31, 2023, an increase of 3.8% from the comparable period, due primarily to an increase in the number of systems sold and partially offset by lower premiums paid for components and lower labor and overhead costs. The first quarter of 2024 included less than $0.1 million of material cost premiums associated with open-market purchases of semiconductor chips used in our batteries and POCs compared to $4.5 million in the first quarter of 2023.

Current wording

Cost of sales revenue decreased $2.4 million for the six months ended June 30, 2024 from the six months ended June 30, 2023, a decrease of 3.2% from the comparable period, due primarily to lower premiums paid for components and lower labor and overhead costs, partially offset by an increase in the number of systems sold. The first half of 2024 included $0.1 million of material cost premiums associated with open-market purchases of semiconductor chips used in our batteries and POCs compared to $8.0 million in the first half of 2023.

Previous wording

Cost of rental revenue increased $0.9 million for the three months ended March 31, 2024 from the three months ended March 31, 2023, an increase of 12.7% from the comparable period. The increase in cost of rental revenue was primarily attributable to an increase in total patients on service, which led to increased service and logistics costs. Cost of rental revenue included $3.2 million of rental asset depreciation for the three months ended March 31, 2024 compared to $3.1 million for the three months ended March 31, 2023.

Current wording

Cost of rental revenue increased $1.1 million for the six months ended June 30, 2024 from the six months ended June 30, 2023, an increase of 7.3% from the comparable period. The increase in cost of rental revenue was primarily attributable to an increase in total patients on service, which led to increased service and logistics costs. Cost of rental revenue included $6.3 million of rental asset depreciation for the six months ended June 30, 2024 compared to $6.3 million for the six months ended June 30, 2023.

Previous wording

As of March 31, 2024, we had cash and cash equivalents of $107.4 million, which consisted of highly liquid investments with a maturity of three months or less. In addition, we held marketable securities of $12.4 million, which had maturities of greater than three months. For the three months ended March 31, 2024 and 2023, we received $0.4 million and $1.0 million, respectively, in proceeds related to stock option exercises and our employee stock purchase plan.

Current wording

As of June 30, 2024, we had cash and cash equivalents of $97.9 million, which consisted of highly liquid investments with a maturity of three months or less. In addition, we held marketable securities of $19.8 million, which had maturities of greater than three months. For the six months ended June 30, 2024 and 2023, we received $0.4 million and $1.0 million, respectively, in proceeds related to stock option exercises and our employee stock purchase plan.

Previous wording

Our principal uses of cash for liquidity and capital resources in the three months ended March 31, 2024 consisted of operating activities of $4.7 million as well as cash used in investing activities of $9.4 million for net purchases of marketable securities, and $4.1 million for additional rental equipment and other property, plant and equipment.

Current wording

Our principal use of our funds for liquidity and capital resources in the six months ended June 30, 2024 consisted of cash used in investing activities of $16.8 million for net purchases of marketable securities and $9.1 million for additional rental equipment, other property, plant and equipment and intangible assets, partially offset by cash provided by operating activities of $1.9 million.

Previous wording

Net cash used in operating activities for the three months ended March 31, 2024 consisted primarily of our net loss of $14.6 million, partially offset by non-cash adjustment items such as depreciation of equipment and leasehold improvements and amortization of intangibles of $5.3 million, stock-based compensation expense of $2.4 million, provision for sales returns and doubtful accounts of $2.2 million, net loss on disposal of rental assets and other assets of $1.2 million, and change in fair value of earnout liability of $0.6 million. The net changes in operating assets and liabilities resulted in a net decrease in cash of $1.5 million.

Current wording

Net cash provided by operating activities for the six months ended June 30, 2024 consisted primarily of our net loss of $20.2 million, partially offset by non-cash adjustment items such as depreciation of equipment and leasehold improvements and amortization of intangibles of $10.6 million, provision for sales returns and doubtful accounts of $4.6 million, stock-based compensation expense of $4.2 million, net loss on disposal of rental assets and other assets of $2.2 million, and change in fair value of earnout liability of $1.2 million. The net changes in operating assets and liabilities resulted in a net decrease in cash of $0.4 million.

Previous wording

Net cash used in operating activities for the three months ended March 31, 2023 consisted primarily of our net loss of $20.3 million, partially offset by non-cash adjustment items such as depreciation of equipment and leasehold improvements and amortization of intangibles of $4.1 million, stock-based compensation expense of $3.4 million, provision for sales returns and doubtful accounts of $2.3 million, net loss on disposal of rental assets and other assets of $1.1 million, and provision for inventory obsolescence and other inventory losses of $0.6 million. The net changes in operating assets and liabilities resulted in a net increase in cash of $2.6 million.

Current wording

Net cash used in operating activities for the six months ended June 30, 2023 consisted primarily of our net loss of $30.2 million, partially offset by non-cash adjustment items such as depreciation of equipment and leasehold improvements and amortization of intangibles of $8.4 million, stock-based compensation expense of $6.7 million, provision for sales returns and doubtful accounts of $4.5 million, net loss on disposal of rental assets and other assets of $2.1 million, and provision for inventory obsolescence and other inventory losses of $1.0 million. The net changes in operating assets and liabilities resulted in a net cash provided by of $5.2 million.

Previous wording

For the three months ended March 31, 2024, we invested $12.4 million in the purchase of marketable securities, $4.1 million in the production and purchase of rental assets and other property and equipment, partially offset by $3.0 million we received from maturities of marketable securities.

Current wording

For the six months ended June 30, 2024, we invested $32.3 million in the purchase of marketable securities, $7.0 million in the production and purchase of rental assets and other property and equipment, and $2.1 million in intangible assets, partially offset by $15.5 million we received from maturities of marketable securities.

Previous wording

For the three months ended March 31, 2023, we invested $10.4 million in the purchase of marketable securities and $6.8 million in the production and purchase of rental assets and other property and equipment.

Current wording

For the six months ended June 30, 2023, we invested $14.9 million in the production and purchase of rental assets and other property and equipment, $12.8 million in the purchase of marketable securities and $0.5 million in intangible assets, partially offset by $10.5 million in maturities of marketable securities.

Previous wording

For the three months ended March 31, 2024, net cash provided by financing activities consisted of $0.4 million from the proceeds received from purchases under our employee stock purchase program, partially offset by the payment of employment taxes related to the vesting of restricted stock units of $0.1 million.

Current wording

For the six months ended June 30, 2024, net cash provided by financing activities consisted of $0.4 million from the proceeds received from purchases under our employee stock purchase program, partially offset by the payment of employment taxes related to the vesting of restricted stock units of $0.3 million.

Previous wording

For the three months ended March 31, 2023, net cash provided by financing activities consisted of $1.0 million from the proceeds received from stock options that were exercised and purchases under our employee stock purchase program, partially offset by the payment of employment taxes related to the vesting of restricted stock awards and restricted stock units of $0.5 million.

Current wording

For the six months ended June 30, 2023, net cash provided by financing activities consisted of $1.0 million from the proceeds received from stock options that were exercised and purchases under our employee stock purchase program, partially offset by the payment of employment taxes related to the vesting of restricted stock awards and restricted stock units of $0.5 million.

Previous wording

Our net cash used in operating activities in the three months ended March 31, 2024 was $4.7 million compared to net cash used in operating activities of $6.3 million in the three months ended March 31, 2023. As of March 31, 2024, we had cash and cash equivalents of $107.4 million and marketable securities of $12.4 million.

Current wording

Our net cash provided by operating activities in the six months ended June 30, 2024 was $1.9 million compared to net cash used in operating activities of $2.3 million in the six months ended June 30, 2023. As of June 30, 2024, we had cash and cash equivalents of $97.9 million and marketable securities of $19.8 million.

Previous wording

EBITDA and Adjusted EBITDA are financial measures that are not calculated in accordance with U.S. GAAP. We define EBITDA as net loss excluding interest income, interest expense, taxes and depreciation and amortization. Adjusted EBITDA also excludes stock-based compensation, change in fair value of earnout liability, acquisition-related expenses, and restructuring-related and other charges. Below, we have provided a reconciliation of EBITDA and Adjusted EBITDA to our net loss, the most directly comparable financial measure calculated and presented in accordance with U.S. GAAP. EBITDA and Adjusted EBITDA should not be considered alternatives to net loss or any other measure of financial performance calculated and presented in accordance with U.S. GAAP. Our EBITDA and Adjusted EBITDA may not be comparable to similarly titled measures of other organizations because other organizations may not calculate EBITDA and Adjusted EBITDA in the same manner as we calculate these measures.

Current wording

EBITDA and Adjusted EBITDA are financial measures that are not calculated in accordance with U.S. GAAP. We define EBITDA as net loss excluding interest income, interest expense, taxes and depreciation and amortization. Adjusted EBITDA also excludes stock-based compensation, change in fair value of earnout liability, acquisition-related expenses, and restructuring-related and other charges. Below, we have provided a reconciliation of EBITDA and Adjusted EBITDA to our net loss, the most directly comparable financial measure calculated and presented in accordance with U.S. GAAP. EBITDA and Adjusted EBITDA should not be considered alternatives to a net loss or any other measure of financial performance calculated and presented in accordance with U.S. GAAP. Our EBITDA and Adjusted EBITDA may not be comparable to similarly titled measures of other organizations because other organizations may not calculate EBITDA and Adjusted EBITDA in the same manner as we calculate these measures.