Penumbra, Inc. Reports Fourth Quarter and Full Year 2022 Financial Results

ALAMEDA, Calif., Feb. 23, 2023 /PRNewswire/ -- Penumbra, Inc. (NYSE: PEN), a global healthcare company focused on innovative therapies, today reported financial results for the fourth quarter and full year ended December 31, 2022.

Financial Highlights:

• Revenue of $221.2 million for the fourth quarter of 2022, an increase of 8.4% compared to revenue of $204.0 million for the fourth quarter of 2021, or an increase of 10.5% in constant currency (a non-GAAP measure)¹. US revenue of $157.1 million for the fourth quarter of 2022 was 8.8% above the same period a year ago.
• Revenue of $847.1 million for the full year 2022, an increase of 13.3% compared to revenue of $747.6 million for the full year 2021, or an increase of 15.5% in constant currency¹. US revenue of $591.7 million for the full year 2022 was 12.1% above the same period a year ago.

Fourth Quarter 2022 Financial Results  
Total revenue increased to $221.2 million for the fourth quarter of 2022 compared to $204.0 million for the fourth quarter of 2021, an increase of 8.4%, or 10.5% in constant currency¹. The United States represented 71% of total revenue and international represented 29% of total revenue for the fourth quarter of 2022. Revenue from sales of vascular products grew to $129.7 million for the fourth quarter of 2022, an increase of 14.2% or 15.4% in constant currency¹. US vascular revenue and international vascular revenue increased 12.7% and 23.0%, respectively, compared to the fourth quarter of 2021. Revenue from sales of neuro products grew to $91.5 million for the fourth quarter of 2022,  an increase of 1.2% or 4.4% in constant currency¹. US neuro revenue increased 0.5% while international neuro revenue increased 1.9% compared to the fourth quarter of 2021.

Gross profit for the fourth quarter of 2022 was $138.4 million, or 62.6% of total revenue compared to $125.4 million, or 61.5% of total revenue, for the fourth quarter of 2021. Gross margin is impacted by our ability to scale production capacity to support our expanding portfolio of products, which enabled us to navigate through some macroeconomic factors such as supply chain headwinds in the three months ended December 31, 2022.

Total operating expenses were $133.6 million, or 60.4% of total revenue for the fourth quarter of 2022, including a $2.4 million amortization expense of finite lived intangible assets acquired in connection with the Sixense acquisition. This compares to total operating expenses of $165.5 million for the fourth quarter of 2021, which includes a one-time $25.8 million expense associated with the accelerated vesting of options related to the Sixense acquisition, $15.0 million of non-recurring personnel-related expenses associated with the achievement of R&D milestones for our Thunderbolt product, and a $1.8 million amortization expense of finite lived intangible assets acquired in connection with the Sixense acquisition. Excluding the charges noted above, total non-GAAP operating expenses¹ were $131.2 million, or 59.3% of total revenue for the fourth quarter of 2022, and $123.0 million, or 60.3% of total revenue for the fourth quarter of 2021, respectively.

Income from operations was $4.8 million for the fourth quarter of 2022 compared to loss from operations of $40.1 million for the fourth quarter of 2021. Excluding the charge associated with the amortization expense of finite lived intangible assets acquired in connection with the Sixense acquisition, non-GAAP income from operations¹ was $7.2 million for the fourth quarter of 2022. This compares to non-GAAP income from operations¹ of $2.5 million for the fourth quarter of 2021, which excludes the charges associated with one-time accelerated vesting of options related to the Sixense acquisition, non-recurring personnel-related expenses associated with the achievement of R&D milestones for our Thunderbolt product, and amortization expense of finite lived intangible assets acquired in connection with the Sixense acquisition.

Full Year 2022 Financial Results  
Total revenue increased to $847.1 million for the year ended December 31, 2022 compared to $747.6 million for the year ended December 31, 2021, an increase of 13.3%, or 15.5% in constant currency¹. The United States represented 70% of total revenue and international represented 30% of total revenue for the year ended December 31, 2022. Revenue from the sales of vascular products grew to $499.4 million for the year ended December 31, 2022, an increase of 22.1%, or 23.6% in constant currency¹. US vascular revenue increased 16.0%, while international vascular revenue increased 62.2% compared to the year ended December 31, 2021. Revenue from the sales of neuro products grew to $347.7 million for the year ended December 31, 2022, an increase of 2.7%, or 5.6% in constant currency¹. US neuro revenue increased 4.2%, and international neuro revenue increased 1.1% compared to the year ended December 31, 2021.

Gross profit for the year ended December 31, 2022 was $535.2 million, or 63.2% of total revenue, compared to $475.4 million, or 63.6% of total revenue, for the year ended December 31, 2021. Gross margin is impacted by our ability to scale production capacity to support our expanding portfolio of products, which enabled us to navigate through some macroeconomic factors such as labor shortages, inflation, and supply chain headwinds in the twelve months ended December 31, 2022.

Total operating expenses for the year ended December 31, 2022 were $529.1 million, or 62.5% of total revenue, including a $8.3 million amortization expense of finite lived intangible assets acquired in connection with the Sixense acquisition. This compares to total operating expenses of $482.9 million, or 64.6% of total revenue, for the year ended December 31, 2021, which includes a one-time $25.8 million expense associated with the accelerated vesting of options related to the Sixense acquisition, $15.0 million of non-recurring personnel-related expenses associated with the achievement of R&D milestones for our Thunderbolt product, and a $1.8 million amortization expense of finite lived intangible assets acquired in connection with the Sixense acquisition. Excluding the charges noted above, total non-GAAP operating expenses¹ were $520.8 million, or 61.5% of total revenue during the year ended December 31, 2022, and $440.3 million, or 58.9% of total revenue during the year ended December 31, 2021, respectively.

Income from operations was $6.1 million for the year ended December 31, 2022 compared to loss from operations of $7.5 million for the year ended December 31, 2021. Excluding the charge associated with the amortization expense of finite lived intangible assets acquired in connection with the Sixense acquisition, non-GAAP income from operations¹ was $14.4 million for the year ended December 31, 2022. This compares to non-GAAP income from operations¹ of  $35.0 million for the year ended December 31, 2021, excluding the charges associated with the one-time accelerated vesting of options related to the Sixense acquisition, non-recurring personnel-related expenses associated with the achievement of R&D milestones for our Thunderbolt product, and amortization expense of finite lived intangible assets acquired in connection with the Sixense acquisition.

Full Year 2023 Financial Outlook  
Penumbra projects total revenue for 2023 to be $1 billion or more, representing year over year growth of at least 18%, which is an acceleration from 2022 revenue of $847 million.

Webcast and Conference Call Information  
Penumbra, Inc. will host a conference call to discuss financial results for the fourth quarter and year ended December 31, 2022 after market close on Thursday, February 23, 2023 at 4:30 PM Eastern Time. The conference call can be accessed live over the phone by dialing (888) 330-2443 for domestic callers and international callers (conference id: 4604622), or the webcast can be accessed on the "Events" section under the "Investors" tab of the Company's website at: www.penumbrainc.com. The webcast will be available on the Company's website for at least two weeks following the completion of the call.

About Penumbra  
Penumbra, Inc., headquartered in Alameda, California, is a global healthcare company focused on innovative therapies. Penumbra designs, develops, manufactures and markets novel products and has a broad portfolio that addresses challenging medical conditions in markets with significant unmet need. Penumbra supports healthcare providers, hospitals and clinics in more than 100 countries. The Penumbra logo is a trademark of Penumbra, Inc. For more information, visit www.penumbrainc.com and connect on Twitter and LinkedIn.

Non-GAAP Financial Measures

In addition to financial measures prepared in accordance with U.S. generally accepted accounting principles ("GAAP"), the Company uses the following non-GAAP financial measures in this press release: a) constant currency and b) non-GAAP operating expenses, non-GAAP income from operations, non-GAAP net income and non-GAAP diluted earnings per share ("EPS").

Constant Currency. The Company's constant currency revenue disclosures estimate the impact of changes in foreign currency rates on the translation of the Company's current period revenue as compared to the applicable comparable period in the prior year. This impact is derived by taking the current local currency revenue and translating it into U.S. dollars based upon the foreign currency exchange rates used to translate the local currency revenue for the applicable comparable period in the prior year, rather than the actual exchange rates in effect during the current period. It does not include any other effect of changes in foreign currency rates on the Company's results or business.

Non-GAAP operating expenses, non-GAAP income from operations, non-GAAP net income and non-GAAP diluted EPS. The adjustments to the GAAP financial measures reflect the exclusion of:

• the effect of non-recurring expenses associated with the achievement of R&D milestones for our Thunderbolt product;
• the effects of the one-time expense associated with the accelerated vesting of options and the amortization of acquired finite lived intangible assets over their estimated useful lives in connection with the Sixense acquisition; and
• the tax deficiencies or excess tax benefits associated with share-based compensation arrangements.

Full reconciliation of these non-GAAP measures to the most comparable GAAP measures is set forth in the tables below.

Our management believes the non-GAAP financial measures disclosed in this press release are useful to investors in assessing the operating performance of our business and provide meaningful comparisons to prior periods and thus a more complete understanding of our business than could be obtained absent this disclosure. Specifically, we consider the change in constant currency revenue as a useful metric as it provides an alternative framework for assessing how our underlying business performed excluding the effect of foreign currency rate fluctuations. We consider non-GAAP operating expenses, non-GAAP income from operations, non-GAAP net income and non-GAAP diluted EPS useful metrics as they provide an alternative framework for assessing how our underlying business performed excluding the items referred to above.

The non-GAAP financial measures included in this press release may be different from, and therefore may not be comparable to, similarly titled measures used by other companies. These non-GAAP measures should not be considered in isolation or as alternatives to GAAP measures. We urge investors to review the reconciliation of these non-GAAP financial measures to the comparable GAAP financial measures included in this press release, and not to rely on any single financial measure to evaluate our business.

Forward-Looking Statements  
Except for historical information, certain statements in this press release are forward-looking in nature and are subject to risks, uncertainties and assumptions about us. Our business and operations are subject to a variety of risks and uncertainties and, consequently, actual results may differ materially from those projected by any forward-looking statements. Factors that could cause actual results to differ from those projected include, but are not limited to: the impact of the COVID-19 pandemic on our business, results of operations and financial condition; failure to sustain or grow profitability or generate positive cash flows; failure to effectively introduce and market new products; delays in product introductions; significant competition; inability to further penetrate our current customer base, expand our user base and increase the frequency of use of our products by our customers; inability to achieve or maintain satisfactory pricing and margins; manufacturing difficulties; permanent write-downs or write-offs of our inventory; product defects or failures; unfavorable outcomes in clinical trials; inability to maintain our culture as we grow; fluctuations in foreign currency exchange rates; potential adverse regulatory actions; and the potential impact of any acquisitions, mergers, dispositions, joint ventures or investments we may make. These risks and uncertainties, as well as others, are discussed in greater detail in our filings with the Securities and Exchange Commission (SEC), including our Annual Report on Form 10-K for the year ended December 31, 2022, which we expect to file with the SEC on or before March 1, 2023. There may be additional risks of which we are not presently aware or that we currently believe are immaterial which could have an adverse impact on our business. Any forward-looking statements are based on our current expectations, estimates and assumptions regarding future events and are applicable only as of the dates of such statements. We make no commitment to revise or update any forward-looking statements in order to reflect events or circumstances that may change.

Investor Relations  
Penumbra, Inc.  
510-995-2461  
[email protected]

SOURCE Penumbra, Inc.