Inogen reports growth, but it’s unable to fulfill some orders

GOLETA, Calif. – Inogen reported $93.1 million in total revenue for the third quarter of 2021, up 25.3% from the same period last year. 

By business segment, it reported $36.3 million in revenue for domestic direct-to-consumer sales, up 24.6%; and $12.1 million for rentals, up 61.3%. 

“I continue to be pleased with the sustained demand we are seeing for our market-leading portable oxygen concentrators, in spite of the challenging supply chain environment,” said Nabil Shabshab, president and CEO. “We are working diligently to source critical components and help provide patients with access to our products, while navigating higher costs and supply chain constraints associated with the semiconductor chip shortage.” 

Inogen credited sustained demand, improved average selling prices and the reduced impact of the COVID-19 pandemic for revenue growth in the third quarter. 

The company noted, however, that it was unable to fulfil some orders, particularly in its domestic business-to-business channel, due to supply chain constraints. Sales for that channel were $22.8 million in the third quarter, down 1.1% from the same period last year. 

Inogen expects the semiconductor chip shortage to continue to have a negative impact on its ability to manufacture products, as these chips are used across all its POCs, in batteries and printed circuit boards. 

“The company will continue to work with its manufacturing partners and explore other open-market avenues to procure necessary semiconductor chips, but it expects challenges in terms of supply and pricing inflation until supply meets demand and prices stabilize,” it stated in a press release. “If the company is unable to obtain sufficient supply, it could be forced to further slowdown or temporarily halt production.” 

Inogen also expects increased costs of goods sold per unit in the fourth quarter due to cost inflation of materials and labor throughout the supply chain. It expects $5 million to $7 million of higher material costs associated with open-market purchases of chips for full year 2021. 

“Based on its assessment and industry feedback, the company still believes that these supply shortages and increased costs may continue through the second quarter of 2022,” it stated. “In addition, the increased cost of goods sold per unit in the first and second quarters of 2022 is expected to be higher than the cost increase expected in the fourth quarter of 2021 based on the information known to date.” 

Inogen isn’t providing detailed guidance for full year 2021 due to uncertainty, but it expects total revenue in the fourth quarter to be similar to revenue in the fourth quarter of 2020 and adjusted EBITDA and operating and net losses to be negative. Additionally, it expects operating and net losses for full year 2021.