Second Quarter 2023 and Recent Business Highlights

All comparisons are to the prior year period unless otherwise noted.

• Reported total revenue of $83.6 million, reflecting a decrease of 19.1%; currency fluctuations accounted for 0.6% of the decrease.
• GAAP net loss of $9.8 million, Adjusted net loss of $5.8 million and Adjusted EBITDA loss of $3.2 million.
• Entered into a share purchase agreement to acquire Physio-Assist to add a sizable, growing, and underserved airway clearance market opportunity in support of the strategy to become a multi-portfolio global respiratory care company.
• Introduced Inogen® Rove 6™ in the United States, a portable oxygen concentrator now with an 8-year expected service life, further strengthening Inogen’s business-to-business and HME value proposition including a very competitive total cost of ownership.

“While disappointed in our second quarter performance, we remain focused on driving execution behind our commercial strategy to continue improving productivity in the direct-to-consumer channel, expanding our presence in the prescriber channel and managing volatility in the lower-margin business-to-business channels,” said Nabil Shabshab, President and Chief Executive Officer. “Importantly, we are making progress on improving Adjusted EBITDA, while making select investments including innovation to organically expand our portfolio in service of new patients and indications beyond COPD. Additionally, the recent agreement to acquire Physio-Assist will allow Inogen to serve patients in need of airway clearance with a clinically differentiated product internationally and eventually in the US. We believe that continued execution behind our commercial and innovation strategies will provide a path to revenue growth in 2024 with a continued focus on a return to profitability.”

Second Quarter 2023 Financial Results

Second quarter total revenue decreased 19.1% to $83.6 million from $103.4 million in the second quarter of 2022, as higher rental revenue and domestic business-to business sales were more than offset by declines in direct-to-consumer sales and international B2B sales.

Total gross margin was 40.7% in the second quarter of 2023 versus 44.7% in the comparative period in 2022. Gross margin declined by 400 basis points as the benefit from lower component costs was more than offset by channel mix and lower average selling prices in the business-to-business segments, namely in the US.

Total operating expense, which includes acquisition and restructuring-related costs, was $45.8 million compared to $49.1 million in the second quarter of 2022, representing a decrease of 6.8%. Total operating expense, excluding one-time costs, declined 11.8% due to disciplined focus on aligning the company infrastructure with its strategy and careful cost management.

GAAP net loss for the second quarter of 2023 was $9.8 million compared to GAAP net loss of $3.4 million in the second quarter of 2022. Adjusted net loss was $5.8 million compared to Adjusted net loss of $0.4 million in the second quarter of 2022. Adjusted EBITDA was a negative $3.2 million in the second quarter of 2023 compared to a positive $3.2 million in the second quarter of 2022.

Cash, cash equivalents and marketable securities were $170.1 million as of June 30, 2023, and no debt outstanding.

A reconciliation of Adjusted EBITDA and Adjusted net loss for the three and six months ended June 30, 2023 and 2022 are provided in the financial schedules that are a part of this press release. An explanation of these non-GAAP financial measures is also included below under the heading “Reconciliation of U.S. GAAP to Other Non-GAAP Financial Measures.”

Financial Guidance

As a result of year-to-date performance and continued pressure in the business-to-business channels, Inogen now expects 2023 annual revenue of $315 million to $320 million and Adjusted EBITDA loss of $20 million to $25 million for the full year.

Quarterly Conference Call Information

Inogen will issue second quarter 2023 financial results after the market closes on Monday, August 7, 2023. On the same day, the Company will host a conference call at 1:30 p.m. Pacific Time / 4:30 p.m. Eastern Time. Individuals interested in listening to the conference call may do so by dialing:

US domestic callers (877) 841-3961
Non-US callers (201) 689-8589

Please reference Inogen to join the call. To listen to a live webcast, please visit the Investor Relations section of Inogen’s website at: http://investor.inogen.com/. This webcast will also be archived on the website for 6 months.

A replay of the call will be available approximately three hours after the live webcast ends and will be accessible through August 14, 2023. To access the replay, dial (877) 660-6853 or (201) 612-7415 and reference Conference ID: 13739327.

Inogen has used, and intends to continue to use, its Investor Relations website, http://investor.inogen.com/, as a means of disclosing material non-public information and for complying with its disclosure obligations under Regulation FD. For more information, visit http://investor.inogen.com/.

About Inogen

Inogen, Inc. (Nasdaq: INGN) is a leading global medical technology company offering innovative respiratory products for use in the homecare setting. Inogen supports patient respiratory care by developing, manufacturing, and marketing innovative best-in-class portable oxygen concentrators used to deliver supplemental long-term oxygen therapy to patients suffering from chronic respiratory conditions. Inogen partners with patients, prescribers, home medical equipment providers, and distributors to make its oxygen therapy products widely available allowing patients the chance to remain ambulatory while managing the impact of their disease.

For more information, please visit www.inogen.com.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including, among others, Inogen’s expectations for improving productivity in the direct-to-consumer channel, expanding our presence in the prescriber channel and managing volatility in the lower-margin business-to-business channels; broadening and diversifying our portfolio through innovation; our 2023 revenue and Adjusted EBITDA expectations. Any statements contained in this communication that are not statements of historical fact may be deemed to be forward-looking statements. Words such as “believes,” “anticipates,” “plans,” “expects,” “will,” “intends,” “potential,” “possible,” and similar expressions are intended to identify forward-looking statements. Forward-looking statements are subject to numerous risks and uncertainties that could cause actual results to differ materially from currently anticipated results, including but not limited to, risks arising from the possibility that Inogen will not realize anticipated revenue or expenses will not decrease; risks related to cost inflation; the risks our innovation pipeline will not produce meaningful results; risks related to our pending acquisition of Physio Assist including on expenses; the impact of changes in reimbursement rates and reimbursement and regulatory policies; and the possible loss of key employees, customers, or suppliers; the risk that expenses and costs will exceed Inogen’s expectations. Information on these and additional risks, uncertainties, and other information affecting Inogen’s business operating results are contained in its Annual Report on Form 10-K for the year ended December 31, 2022, and in its other filings with the Securities and Exchange Commission. Additional information will also be set forth in Inogen’s Quarterly Report on Form 10-Q for the period ended June 30, 2023, to be filed with the Securities and Exchange Commission. These forward-looking statements speak only as of the date hereof. Inogen disclaims any obligation to update these forward-looking statements except as may be required by law.

Non-GAAP Financial Measures

Inogen has presented certain financial information in accordance with U.S. GAAP and also on a non-GAAP basis for the three and six months ended June 30, 2023, and June 30, 2022. Management believes that non-GAAP financial measures, taken in conjunction with U.S. GAAP financial measures, provide useful information for both management and investors by excluding certain non-cash and other expenses that are not indicative of Inogen’s core operating results. Management uses non-GAAP measures to compare Inogen’s performance relative to forecasts and strategic plans, to benchmark Inogen’s performance externally against competitors, and for certain compensation decisions. Non-GAAP information is not prepared under a comprehensive set of accounting rules and should only be used to supplement an understanding of Inogen’s operating results as reported under U.S. GAAP. Inogen encourages investors to carefully consider its results under U.S. GAAP, as well as its supplemental non-GAAP information and the reconciliation between these presentations, to more fully understand its business. Reconciliations between U.S. GAAP and non-GAAP results are presented in the accompanying tables of this release. For future periods, Inogen is unable to provide a reconciliation of non-GAAP measures without unreasonable effort as a result of the uncertainty regarding, and the potential variability of, the amounts of interest income, interest expense, depreciation and amortization, stock-based compensation, provision for income taxes, and certain other infrequently occurring items, such as acquisition-related costs, that may be incurred in the future.

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