Welcome to Inogen's Fourth Quarter 2025 Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded today, February 24, 2026. I would now like to turn the call over to Lorna Williams, Senior Vice President, Investor Relations and Strategic Planning.

Thank you for participating in today's call. Joining me are President and CEO, Kevin Smith; and CFO, Mike Bourque. Earlier today, Inogen released financial results for the fourth quarter and full year 2025. The earnings release is available in the Investor Relations section of the company's website, along with a supplemental financial package. Please note, we have also published a new investor presentation on our investor website, which contains forward-looking statements and long-term financial goals. As a result, the information presented today will include forward-looking statements, including, without limitation, statements about our growth prospects and strategy for 2026 and beyond, expectations related to our financial results for the first quarter and full year 2026; progress on our strategic initiatives, including innovation, our expectations regarding the market for our products and our business and supply and demand for our products in both the short-term and long-term. The forward-looking statements in this call are based on information currently available to us as of today's date, February 24, 2026. These forward-looking statements are only predictions and involve risks and uncertainties that are set forth in more detail in our most recent periodic reports filed with the Securities and Exchange Commission. Actual results may vary, and we disclaim any obligation to update these forward-looking statements, except as may be required by law. During the call, we will also present certain financial information on a non-GAAP basis. 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 noncash items and other expenses that are not indicative of Inogen's core operating results. Management uses non-GAAP measures internally to understand, manage and evaluate our business and make operating decisions. Reconciliations between U.S. GAAP and non-GAAP results are presented in tables within our earnings release. With that, I will turn the call over to Inogen's President and CEO, Kevin Smith.

Good afternoon, and thank you for joining our fourth quarter 2025 conference call. I want to use today's call to recap our 2025 success, outline progress on our strategic initiatives and share why I am confident in delivering improving performance in 2026 and beyond. Our focus remains anchored on 3 priorities: driving top line growth; advancing profitability; and expanding our innovation pipeline. Let me start by discussing our recent results. We delivered approximately $82 million in total revenue in the fourth quarter and nearly $349 million for the full year, reflecting 4% year-over-year growth and meeting our goals to deliver mid-single-digit growth for 2025. Although we experienced a shift in the timing of a few orders from the fourth quarter into the first half of 2026 due in part to capital and budgeting constraints from certain customers, it was not a loss of customers, and our underlying market fundamentals remain encouraging. Unit volumes grew more than 20% year-over-year in the fourth quarter and for the full year, driven by continued demand for our products and the conversion from traditional portable oxygen tanks to POCs. Looking forward, we are well positioned to continue building on the progress made in 2025 to drive revenue growth and penetrate the substantial market opportunities in front of us. In the U.S., we're investing deliberately to educate both patients and providers on the economic and clinical benefits of Inogen products. Our products are engineered to a fundamentally different standard than competing POC manufacturers and oxygen tanks. We believe our superior reliability, extended life cycles and better patient outcomes justify our premium positioning today and going forward. We are also seeing positive early traction with our newer products in the U.S., including Voxi 5, Simeox and our Aurora CPAP masks, which I will touch on shortly. Growth…

Thank you, Kevin, and good afternoon, everyone. Unless otherwise stated, all financial comparisons presented refer to the prior year comparable period. I will now walk through the results, starting with the income statement, cash flow and then ending with guidance. Please note that today, we are updating our revenue reporting structure to provide investors with insights into more meaningful trends in our business. This change reflects the evolution from a single platform, single disease state company to a diversified respiratory care platform serving multiple disease states across COPD, sleep apnea and broader respiratory conditions. I will detail our revenue performance and our new reporting structure, which includes U.S. sales, international sales and U.S. rentals. A reconciliation of our revenue results from the prior reporting structure to the new reporting structure is available in the supplemental financial tables on the Investor Relations website. Total revenue for the fourth quarter of 2025 was $81.7 million, an increase of 2% on a reported basis. Total revenue for the full year 2025 was $348.7 million, an increase of 4% on a reported basis, primarily driven by higher growth in international POC sales of 18.4%, partially offset by lower U.S. sales and U.S. rentals. U.S. sales for the fourth quarter were $36.1 million, down 5.1% from $38 million in the prior year. From a product mix perspective, our U.S. business remains predominantly POC revenue today, but we're seeing the early stages of diversification. Voxi posted strong sequential growth from Q3, demonstrating solid commercial traction despite being in the very early stage of launch. As we execute our 2026 commercial plan, we expect Voxi to emerge as a more meaningful growth driver for the U.S. business. On the POC side, we experienced a shift of large customer orders out of Q4 into the first half of…

Thank you, Mike. Building off the 2026 guidance Mike described, we are also pleased to share our long-term financial goals today. Fitting with our strategic priorities for the business, we are working to improve revenue growth, profitability and our innovation engine. We are excited to share that as we execute those priorities, we see a path to achieving high single-digit revenue growth and reaching 10% or better adjusted EBITDA over the next 3 to 5 years. And as I mentioned earlier, launching at least 1 new product per year going forward. We look forward to updating you on the progress towards these goals over the course of this year and beyond. Before we open it up for questions, let me step back and frame what we have accomplished over the last 2 years in this turnaround and what it means for Inogen going forward. When I look at the financial recovery, the numbers tell a clear story. We've achieved average revenue growth of 5% over the last 2 years, which is a meaningful turnaround from the 16% decline in 2023. We delivered 7 of 8 quarters of mid-single-digit revenue growth, which shows we've stabilized the business and built consistent momentum. Gross margin expanded to over 44% in 2025, up 411 basis points from 2023. At the same time, we reduced total adjusted net loss to $8 million in 2025 versus $48.3 million in 2023, and we did that while continuing to invest in the new products that are going to drive our future. But the more important story is the strategic transformation in 2025 was the year we fundamentally transformed Inogen from a single product oxygen company into a diversified respiratory care platform with meaningful presence across oxygen therapy, sleep therapy, airway clearance and digital health. We also delivered strong international growth that validates our global expansion strategy and returned to profitability for the first time in 4 years. 2026 is about translating the strong foundation into future growth. We have the strategy, products, market dynamics and financial strength to execute, and I am confident in the path forward. With that, operator, please open the call for questions.

[Operator Instructions] Our first question today is coming from Anderson Schock from B. Riley Securities.

So first, you attributed the fourth quarter miss to multiple large customer orders shifting into the first half of this year. Can you help us understand the magnitude of these orders? And of what shifted, how much has already been shipped in the first quarter versus is expected in the second?

Yes. So Anderson, this is Mike. We haven't really -- I think we talked about at the pre-release that we figured it was maybe a couple of hundred basis points of impact. But we really haven't gotten into the specific dollar amounts to that. But what I would say is that, what's an important thing is that, we have received some of those orders to date. But we did talk about having these orders spread out over the first half of the year. So some of those items will continue to sprinkle in as we go through the first half of the year as opposed to just in the first quarter.

Yes. And maybe, Anderson, if I can just add a little bit here. So, if we -- because I think there's some important dynamics here that we should -- that we need to consider as well. So POC demand is up nearly 20% in 2025, and we expect that to continue to be up in 2026. So the HMEs are now more likely to provide a POC to patients. And our research tells us that in 2019, they were a little bit under 30% -- excuse me, a little under 40% for new starts for portable oxygen. Patients were getting a POC compared to tanks. Now we see that has shifted and it's about 60% of those patients are getting a POC on a new start basis. And this is -- it's an important dynamic because while this is a good shift for the B2B, it creates some headwinds in some other areas of the business. But when we talk about the growth going forward, we look at Q1, we look at beyond, this is -- we continue to expect the B2B channel to grow. We expect to have mid-single-digit growth in Q1 for B2B and for the full year in B2B, and that's specific for the POC business. So again, while that is a good shift, creates some headwinds in the POC -- excuse me, in the DTC and the rental business, -- while we're committed to those, it's an important dynamic. So when we think about that shift, that shift that happened from Q4 into Q1, as Mike said, it's not just going to be in Q1, it's going to be sprinkled throughout the year. But even where we're guiding to the Q1 revenue that we have here, that doesn't give the proper illustration for where we see the B2B continue to grow.

Okay. Got it. And then on the move to the new U.S. sales reporting category, so you're blending the growing domestic B2B channel to the declining or historically declining DTC channel. So with the mix driven by B2B orders pushed into the first half and through this year, how did the DTC channel perform in the fourth quarter? And how should we think about the blended growth here going forward?

Yes. So first, I can answer your direct question first in terms of -- we're, of course, moving to that new format. But one of the things that we talked about with the direct-to-consumer channel was that, we're looking at the tough comps during the course of the year related to the fact that we rebased that business about a year ago. What we have seen and what we expected to see was those negative growth numbers continuing to improve each quarter, and that continued into Q4. So if you go back, Q1, we were off 27%. That dropped to 21% in Q2 to 18% in Q3, and then you'll see the numbers in supplemental schedules. Direct-to-consumer was down 15% in Q4, so continue to improve. In terms of that -- the new reporting structure, we -- the change is really to simplify the overall reporting structure and really allow us to focus more on product growth drivers as opposed to how we've done in the past, as you know, sales channels. And that's really, I think, going to be helpful given our new focus on innovation. The change really reflects -- Kevin talked about this, and then we mentioned in our prepared remarks, from a single platform, single disease state company to a more diversified respiratory care platform and crossing multiple disease states, COPD, sleep apnea and broader respiratory conditions, again, as Kevin mentioned. So our goal really is at the end of the day is to provide investors with more meaningful trends in our business. And the last thing I would say, just keeping in mind that not all products are sold in all channels. So I think the old reporting format kind of really is more relevant to the POCs as opposed to some of these other things we're getting into.

Okay. Got it. That's helpful. And then just finally, how should we think about the ramp of revenue from the Aurora mask launch through '26? And what's the go-to-market strategy here? And can you walk us through what gives you confidence that you can carve out share in this market?

So we view this as a transformational strategic decision, really kind of an important step moving again from -- this is somewhat of a repetitive thing, but moving us more from a single product company to broader home respiratory care company, getting into these other areas that we just talked about. As we look at 2026, we're not really necessarily guiding to what the expectation is on a quarter-over-quarter basis. But the expectation is that, we'll probably see, not too much in the first quarter regarding the masks, but as we progress, keeping in mind that Q2 and Q3 are normally our strongest quarters. We expect to start getting traction, but we expect it to be more back-end loaded with the masks.

Yes. And we are primarily going through the -- through our B2B channel with the masks. We've been building out the sales organization, adding some additional headcounts into that area. But when we brought the masks to market prior to that, we conducted a patient satisfaction study, and we had exceptional results with that. We're very happy with how that played out. The early indications that we have from the customers that we've been engaging has been very positive. It's a process to go through because this is a patient preference market. We feel that we have an extremely competitive mask in that market. The early engagements that we've had, the sampling, the feedback from the respiratory therapists that work with the HMEs as well as the initial patient feedback has given us the confidence that we're going to be able to grow that business. Remember, it is a $2.2 billion market here in the United States for the masks. That's a repeatable business. Once a patient gets satisfied, they like a mask, they get a good night sleep, it's hard to get them off of that mask. And the patient study that we did demonstrates that we're able to bring something that's competitive that will be preferred by the -- not just the RTs, but ultimately, of course, by the patients. And remember, every 1% growth in that market is about a $20 million opportunity for Inogen. So we're going to leverage the relationships that we have with the POCs, the Inogen brand name, the reputation for quality, and we're bringing the clinical evidence to support that launch.

Congrats on all the progress.

Your next question today is coming from Mike Matson from Needham & Company.

This is Joseph on for Mike. Maybe one on Simeox. I believe you both said $6 million in 2025 from Simeox. I guess the assumption is that's all international. But I'm curious, was this consistent orders from existing customers kind of flat throughout the year more or less? Or was there a large step-up in second half of the year as more customers have become familiar with the platform? And maybe just on top of that, what are your expectations there, I guess, internationally for growth for Simeox in 2026?

Yes. Thank you for that question. The Simeox was a steady growth, although we did have in the first quarter into the second quarter of the year, we did have a onetime buy that was Eastern European tender that was for multiple years on the disposable sets that happened in the first quarter. We anticipate still being able to grow that business, of course, on top of that. But we're really happy with the results that we've seen, happy with the feedback that we have and what the data is telling us. We have the clinical trial that is running internationally that will be able to support our European reimbursement submissions. We have a clinical trial that is running that I've mentioned in China, which will be able to support the commercial launch of that. And we've started now, of course, the trial, the first trial that we need to have for reimbursement support here in the United States. We're actively enrolling in that. But that revenue was, of course, primarily outside the United States, and we continue to expect to see that grow. And remember, that $6 million is cash pay. This is out-of-pocket payments in a market that are primarily tax-based health care systems, and that's not usual for patients to want to pay that out of their pocket for a therapy. That gives us confidence. It gives us the -- some of the information that we need to be able to take that to market, both in the United States as well as other markets across the globe, and it gives us confidence that we'll be able to succeed.

Okay. Great. That's helpful. Yes, the cash paid speaks to the therapeutic benefit, you can imagine. I guess maybe just on the EBITDA guidance, the expectations for 2026. I think you said you're guiding towards improvement. I assume that's obviously on a year-over-year basis and not chasing quarterly. But I'm just curious on a quarterly basis, is Inogen targeting or expecting to be EBITDA positive in every quarter in 2026? I know -- I think it's the fourth quarter usually has higher expenses versus the prior 3. So I'm just wondering how you guys are thinking about that.

Yes, Joseph, this is Mike. I guess the first way I would -- first thing I would say about that is keeping in mind that a lot of this starts being driven by the strength of that quarter, right? So again, we look at Q2s and Q3s historically, those are our strongest quarters, and we've been adjusted EBITDA positive in the last 2 years, both of those quarters been cash positive. So it's a little bit -- when we hit Q1 and Q4, it's a little bit more challenging. I think I'm going to answer your question on an overall basis and maybe can help you with the quarterly cadence piece of it. But -- so the way we're looking at adjusted EBITDA in the future, and we're not guiding to a number today, not even on a full year basis, but we remain committed to improving that profitability metrics, generating -- and we do expect to generate positive adjusted EBITDA again this coming year. But I will say this is we need to keep in mind, we do have some additional investments planned in 2026 to further our diversification strategy. We are planning on investing more in R&D in 2026 as opposed to previous years. So that will -- depending on the timing of that, that will impact the impacts of adjusted EBITDA, again, depending on the cadence of those -- the strength of those quarters. So that -- I think that's something to keep in mind. But again, I think if you're looking at the cadence of how we look at each quarter, I think you can look at maybe the historical years, and they should be relatively consistent to what you've seen in previous years. It should be too far off. They'll be a little different, but they shouldn't be too far off.

Okay. That's very helpful. And congratulations on the improvement in profitability this year as well as the transformation in Inogen that's ongoing.

We've reached the end of our question-and-answer session. I'd like to turn the floor back over to Kevin for any further or closing comments.

Thank you very much, and I appreciate the questions that we had here today. But before we end the call, I'd like to highlight that we did announce a share repurchase authorization for $30 million today. This program reflects my confidence in our strategy, our ability to generate cash in the future and that we believe our stock is undervalued. And I'm going to close by recognizing the Inogen team. 2025 was a demanding year that required us to drive operational improvements, launch multiple new products, expand internationally and execute on our 3 strategic initiatives. The progress we've made is a direct result of their dedication and execution, and I'm grateful for their commitment to our mission and to the patients we serve. To our shareholders, thank you for your continued support as we execute this turnaround. We've built a stronger, more diversified and sustainably profitable Inogen, and we look forward to demonstrating that progress throughout the year ahead.

Thank you. That does conclude today's teleconference and webcast. You may disconnect your lines at this time, and have a wonderful day. We thank you for your participation today.