(NVRO) 2023 Q2 法說會逐字稿

Ladies and gentlemen, good afternoon. My name is Abby, and I will be your conference operator today. At this time, I would like to welcome everyone to Nevro's Second Quarter 2023 Financial Results Conference Call. All lines have been placed on mute to prevent any background noise. (Operator Instructions) Thank you. And I would now like to turn the call over to Greg Chodaczek for introductory remarks. Please go ahead.

女士們、先生們，下午好。我叫艾比，今天我將擔任你們的會議操作員。此時，我謹歡迎大家參加 Nevro 2023 年第二季度財務業績電話會議。所有線路均已靜音，以防止任何背景噪音。 （操作員說明）謝謝。現在我想將電話轉給格雷格·喬達切克 (Greg Chodaczek) 進行介紹性發言。請繼續。

Thanks, Abby. Good afternoon, and welcome to Nevro's Second Quarter 2023 Earnings Conference Call. With me today are Kevin Thornal, CEO and President; and Rod MacLeod, Chief Financial Officer. On today's call, Kevin will discuss second quarter business results, and Rod will conclude with detailed financials and guidance before we open up the call for questions. Please note there are also slides available related to Nevro's second quarter performance on their Investor Relations website in the Events and Presentations section.

謝謝，艾比。下午好，歡迎參加 Nevro 2023 年第二季度收益電話會議。今天與我在一起的有首席執行官兼總裁凱文·索納爾 (Kevin Thornal)；羅德·麥克勞德（Rod MacLeod），首席財務官。在今天的電話會議上，凱文將討論第二季度的業務業績，羅德將在我們開始提問之前提供詳細的財務數據和指導。請注意，在其投資者關係網站的“活動和演示”部分中還提供了與 Nevro 第二季度業績相關的幻燈片。

Earlier today, Nevro released its financial results for the second quarter ended June 30, 2023. A copy of the earnings release is available on the Investor Relations section of Nevro's website at nevro.com. This call is being broadcast live over the internet to all interested parties on August 1, 2023, and an archived copy of this webcast will be available on Nevro's Investor Relations website.

今天早些時候，Nevro 發布了截至 2023 年 6 月 30 日的第二季度財務業績。收益報告的副本可在 Nevro 網站 nevro.com 的投資者關係部分獲取。此次電話會議將於 2023 年 8 月 1 日通過互聯網向所有感興趣的各方進行直播，並且該網絡廣播的存檔副本將在 Nevro 的投資者關係網站上提供。

Before we begin, I would like to remind everyone that comments made on today's call may include forward-looking statements within the meaning of the federal securities laws. Results could differ materially from those expressed or implied as a result of certain risks and uncertainties. Please refer to Nevro's SEC filings, including the annual report on Form 10-K filed on February 21, 2023, for a detailed presentation of risks. The forward-looking statements in this call speak only as of today, and the company undertakes no obligation to update or revise any of these statements.

在開始之前，我想提醒大家，今天電話會議中發表的評論可能包括聯邦證券法含義內的前瞻性陳述。由於某些風險和不確定性，結果可能與明示或暗示的結果存在重大差異。請參閱 Nevro 向 SEC 提交的文件，包括 2023 年 2 月 21 日提交的 10-K 表格年度報告，了解風險的詳細介紹。本次電話會議中的前瞻性陳述僅代表今天的情況，公司不承擔更新或修改任何這些陳述的義務。

In addition, management will refer to adjusted EBITDA, a non-GAAP measure used to help investors understand Nevro's ongoing business performance. Non-GAAP adjusted EBITDA excludes interest, taxes, and noncash items such as stock-based compensation and depreciation and amortization as well as litigation-related expenses, certain litigation charges and credits and other adjustments such as restructuring charges. Please refer to the GAAP to non-GAAP reconciliation tables within the earnings release.

此外，管理層將參考調整後的 EBITDA，這是一種非 GAAP 衡量標準，用於幫助投資者了解 Nevro 的持續業務績效。非公認會計原則調整後的 EBITDA 不包括利息、稅收和非現金項目，例如股票薪酬、折舊和攤銷，以及訴訟相關費用、某些訴訟費用和抵免以及重組費用等其他調整。請參閱收益報告中的 GAAP 與非 GAAP 調節表。

And now it's my pleasure to turn the call over to Kevin.

現在我很高興將電話轉給凱文。

Thanks, Greg, and good afternoon, everyone. We appreciate you joining us. It's hard to believe that 3 months have already passed for me as CEO. It's been very busy and productive as I've gotten to know our organization and assess the pathway forward to continue to win in the SCS market and fully capitalize on the opportunities ahead of us. As I said on our last call, my top priorities will be to build on the significant progress the company has made, professionalizing the organization, establishing a manufacturing plant in Costa Rica, bringing new indications to market, and launching innovative new product platforms like iQ.

謝謝格雷格，大家下午好。我們感謝您加入我們。很難相信我擔任首席執行官已經三個月了。這是非常忙碌和富有成效的，因為我了解了我們的組織並評估了繼續在 SCS 市場獲勝並充分利用我們面前的機會的前進道路。正如我在上次電話會議上所說，我的首要任務將是在公司已取得的重大進展的基礎上，實現組織的專業化，在哥斯達黎加建立製造工廠，將新的適應症推向市場，並推出iQ 等創新的新產品平台。

During the last 3 months, I've spent significant time in the field meeting with our sales teams, customers, and key opinion leaders in the U.S. and internationally. I've learned a lot already. Our customers believe in our superior technology and want to partner with a company that's easy to do business with and people in the field that partner with their care teams.

在過去的 3 個月中，我花了很多時間與我們在美國和國際上的銷售團隊、客戶和關鍵意見領袖進行現場會議。我已經學到了很多東西。我們的客戶相信我們卓越的技術，並希望與易於開展業務的公司以及與其護理團隊合作的領域人士合作。

Our products in 10-kilohertz therapy are highly differentiated and our HFX iQ launch has been well received. We also have a great pipeline of new products currently being developed by our R&D and clinical teams that we intend to launch in the coming years. Our team is talented, determined, resilient and mission-driven. However, we have areas for improvement and need to be laser-focused in these key areas that remove our business forward.

我們的 10 kHz 治療產品具有高度差異化，我們的 HFX iQ 推出受到了好評。我們的研發和臨床團隊目前正在開發大量新產品，我們計劃在未來幾年推出。我們的團隊才華橫溢、意志堅定、堅韌不拔、有使命感。然而，我們還有需要改進的地方，需要集中精力在這些關鍵領域，以推動我們的業務向前發展。

Our must-dos are focused on three key pillars for success, which are: first, commercial execution. We have not performed commercially to the levels that we consider world-class in a market that demands excellence in sales force execution. Starting with the hiring of Greg Siller to the CCO role, we are moving quickly to ensure we have A+ talent at every position to increase sales productivity, improve physician engagement, and maximize the growth opportunity in this business.

我們必須做的事情集中在成功的三個關鍵支柱上，它們是：第一，商業執行。在一個要求卓越銷售人員執行力的市場中，我們的商業表現尚未達到我們認為的世界一流水平。從聘請 Greg Siller 擔任 CCO 職位開始，我們正在迅速採取行動，確保每個職位都擁有 A+ 人才，以提高銷售效率、提高醫生參與度並最大限度地利用該業務的增長機會。

We are also focused on improving our sales rep performance per quota, rightsizing some of our sales territories, and filling open territories faster. These changes, coupled with aligning the goals of our internal and external teams will improve our sales productivity and enhance our customer experience.

我們還致力於提高銷售代表的配額績效、調整部分銷售區域的規模以及更快地填補空缺區域。這些變化，加上我們內部和外部團隊目標的協調，將提高我們的銷售效率並增強我們的客戶體驗。

Second, market penetration. We will continue to expand indications with strong clinical evidence such as our ongoing SENTRY study for PDN, pursue HFX line extensions, and support our robust R&D pipeline development. We will also consider augmenting our product portfolio through strategic opportunities.

第二，市場滲透。我們將繼續利用強有力的臨床證據擴大適應症，例如我們正在進行的 PDN SENTRY 研究，追求 HFX 產品線延伸，並支持我們強大的研發管線開發。我們還將考慮通過戰略機會擴大我們的產品組合。

Lastly, profit progress. We will continue to scale our Costa Rica manufacturing facility, improve our operational efficiency, and streamline internal processes.

最後，盈利進展。我們將繼續擴大哥斯達黎加製造工廠的規模，提高運營效率並簡化內部流程。

On the commercial front, Greg Siller recently joined as our new Chief Commercial Officer. Greg's proven track record of success and his passion for building high-performing commercial organizations will be instrumental as we continue to focus on accelerating revenue growth, developing underpenetrated markets such as painful diabetic neuropathy and nonsurgical back pain, and launching new products, including our new HFX iQ system.

在商業方面，格雷格·西勒 (Greg Siller) 最近加入我們，擔任新任首席商務官。格雷格（Greg）的成功記錄和他對建立高績效商業組織的熱情將發揮重要作用，因為我們將繼續專注於加速收入增長，開發滲透不足的市場（例如痛苦的糖尿病神經病變和非手術背痛）以及推出新產品，包括我們的新產品HFX iQ 系統。

Greg is off to a fast start and is already having a positive impact on our commercial organization. He has realigned our sales reporting structure, so the teams are working closer together with one common goal, providing the best service and clinically proven stimulating therapy to our clinicians and their patients. This change sets us up for success in future quarters. I'm confident that Greg's appointment will further bolster our ability to capitalize on the growth opportunities in front of us and accelerate our market performance.

Greg 起步很快，並且已經對我們的商業組織產生了積極的影響。他重新調整了我們的銷售報告結構，因此各個團隊為了一個共同的目標更加緊密地合作，為我們的臨床醫生及其患者提供最好的服務和經臨床證明的刺激療法。這一變化為我們在未來幾個季度取得成功奠定了基礎。我相信格雷格的任命將進一步增強我們利用面前的增長機會並加速我們的市場表現的能力。

Okay. Let's now turn to our second quarter results and business updates. Although we lowered our second quarter guidance, we continue to move the business forward and lay a stronger foundation for improved commercial execution in future quarters. Nevro's revenue of $108.8 million increased 4% on both the reported and constant currency basis compared to prior year results. Our U.S. perm procedure growth was 8% year-over-year and PDN continues to be a significant growth driver with a strong second quarter increase in revenue of 73% compared to last year.

好的。現在讓我們來看看第二季度的業績和業務更新。儘管我們降低了第二季度的指導，但我們繼續推動業務發展，並為未來幾個季度改善商業執行奠定更堅實的基礎。 Nevro 的收入為 1.088 億美元，按報告和固定匯率計算，與上一年的業績相比增長了 4%。我們的美國燙髮程序同比增長 8%，PDN 仍然是重要的增長動力，第二季度收入與去年相比強勁增長 73%。

As of today, 3 of the 4 main market participants have disclosed their Q2 SCS results, Nevro and one of our competitors reported clear SCS growth. It's evident that the challenges to our market are improving, and although recovery isn't expected to be linear, we expect it to continue to improve in the quarters ahead. Remember, SCS is considered a late or last-line therapy used to relieve patients of their chronic pain when surgeries and more conservative treatment options either don't provide optimal relief or just simply don't work and are not an option.

截至今天，4 個主要市場參與者中的 3 個已披露其第二季度 SCS 業績，Nevro 和我們的競爭對手之一報告了明顯的 SCS 增長。顯然，我們市場面臨的挑戰正在改善，儘管預計復甦不會是線性的，但我們預計未來幾個季度將繼續改善。請記住，SCS 被認為是一種晚期或最後一線療法，用於在手術和更保守的治療方案不能提供最佳緩解或根本不起作用且不是一種選擇時緩解患者的慢性疼痛。

We have seen positive indicators of growth and recovery, including patients entering the pain treatment funnel. As patients make appointments with their pain specialists and continue to move through their treatment pathway, we are confident we'll see more patients who are ready for SCS and the market return to historical growth rates. The nonlinear recovery, along with our recent sales force execution changes, which will take time to fully implement, however, have led us to regauge our guidance for the year. I will come back to this at the end of my prepared remarks.

我們看到了生長和恢復的積極指標，包括進入疼痛治療漏斗的患者。隨著患者與疼痛專家預約並繼續完成治療途徑，我們相信我們將看到更多準備好接受 SCS 的患者，並且市場將恢復到歷史增長率。然而，非線性複蘇以及我們最近的銷售人員執行變化（這需要時間才能完全實施）導致我們重新調整了今年的指導。我將在準備好的發言結束時回到這一點。

In Q2, HFX iQ accounted for approximately 30% of our permanent implant procedures, up from 11% in Q1, and we expect a meaningful shift to our HFX iQ throughout the rest of the year. We continue to receive positive feedback from physicians and patients regarding the ability to deliver personalized pain relief using our HFX algorithm. I'm convinced this technology has the opportunity to differentiate our competitive position further. All of this progress builds on our superior high-frequency paresthesia-free SCS technology.

在第二季度，HFX iQ 約占我們永久種植手術的 30%，高於第一季度的 11%，我們預計今年剩餘時間我們的 HFX iQ 將發生有意義的轉變。我們不斷收到醫生和患者關於使用我們的 HFX 算法提供個性化疼痛緩解能力的積極反饋。我相信這項技術有機會進一步提升我們的競爭地位。所有這些進步都建立在我們卓越的高頻無感覺異常 SCS 技術之上。

Turning now to our PDN business. PDN trials represented approximately 23% of our total U.S. trial volume. That's up from 14% of our total U.S. trial volume in Q2 of last year. Among our permanent implant procedures, PDN represented 18% of total worldwide procedures, resulting in approximately $19 million in PDN indication sales, an increase of 73% compared to $11 million in the second quarter of last year. We attribute this in large measure to the continued PDN referral sales organization expansion, our direct outreach initiatives to physicians and patients, and the general enthusiasm regarding the compelling data and real-world outcomes in these otherwise difficult to treat patients.

現在轉向我們的 PDN 業務。 PDN 試驗約占我們美國試驗總量的 23%。這比去年第二季度美國試驗總量的 14% 有所上升。在我們的永久性植入手術中，PDN 佔全球手術總量的 18%，PDN 適應症銷售額約為 1,900 萬美元，比去年第二季度的 1,100 萬美元增長了 73%。我們將這在很大程度上歸因於PDN 轉診銷售組織的持續擴張、我們對醫生和患者的直接外展活動，以及對這些難以治療的患者的令人信服的數據和現實世界結果的普遍熱情。

We continue to see success with our direct-to-patient marketing for PDN as well. In Q2, approximately 23% of our U.S. PDN trial procedures came from leads generated by our DTC programs. We continue to believe both patient and physician marketing efforts are imperative to drive awareness of the PDN indication.

我們的 PDN 直接面向患者營銷也繼續取得成功。第二季度，我們約 23% 的美國 PDN 試驗程序來自我們的 DTC 計劃產生的潛在客戶。我們仍然相信，患者和醫生的營銷工作對於提高 PDN 適應症的認識至關重要。

On the new indication coverage front, our PDN coverage continues to grow. Florida Blue, the largest commercial payer in Florida represented 4.6 million covered lives, updated their medical policy to include coverage for PDN, which became effective on June 15, and we are very pleased to see that Medicare administrative contractors, Novitas and First Coast Service Options, decided to retire their SCS local coverage determination, or LCD, and cover both PDN and nonsurgical back pain using Medicare national coverage determination or NCD that is already in place.

在新適應症覆蓋範圍方面，我們的 PDN 覆蓋範圍持續增長。 Florida Blue 是佛羅里達州最大的商業付款人，代表了460 萬受保人，更新了他們的醫療政策，將PDN 納入承保範圍，該政策於6 月15 日生效，我們很高興看到Medicare 行政承包商、Novitas 和First Coast Service Options決定取消其 SCS 本地承保範圍確定 (LCD)，並使用已經到位的 Medicare 國家承保範圍確定 (NCD) 承保 PDN 和非手術背痛。

This positive coverage policy development became effective on July 13 and provides immediate access to SCS therapy for PDN and NSBP patients who meet the NCD coverage criteria and have Medicare or Medicare Advantage health plans. This is a huge win for Medicare patients suffering from PDN who have had limited to no access to HFX therapy since FDA approval in July of 2021. The combined increase of coverage represents nearly 24 million covered lives, bringing health plan coverage of PDN to over 205 million covered lives total.

這項積極的承保政策制定於 7 月 13 日生效，為符合 NCD 承保標準並擁有 Medicare 或 Medicare Advantage 健康計劃的 PDN 和 NSBP 患者提供立即獲得 SCS 治療的機會。對於患有PDN 的Medicare 患者來說，這是一個巨大的勝利，自2021 年7 月FDA 批准以來，他們一直無法獲得HFX 治療。覆蓋範圍的增加意味著近2400 萬人受保，使PDN 的健康計劃覆蓋範圍超過205 人。總共覆蓋了 100 萬人。

I want to congratulate our entire government affairs and market access team on this accomplishment and thank them for their significant effort and unrelenting focus on expanding coverage to patients who suffer from these debilitating conditions.

我要祝賀我們整個政府事務和市場准入團隊取得的這一成就，並感謝他們為擴大對患有這些衰弱疾病的患者的覆蓋範圍所做的巨大努力和不懈努力。

In addition to the existing payer coverage policies in place for PDN, we continue to see a high level of case-by-case approvals through the prior authorization process in the appeal of payer prior often isles, including with payers who don't have a positive PDN coverage policy in place. For those PDN cases that have come through our own access group, our rolling 12-month approval rate at the end of Q2 continued to trend around 72%, up from approximately 62% at the end of 2021.

除了現有的 PDN 付款人覆蓋政策外，我們繼續看到，在付款人優先事項上訴中，通過事先授權流程獲得了高水平的逐案批准，包括那些沒有付款人資格的付款人。積極的PDN覆蓋政策到位。對於通過我們自己的接入小組處理的 PDN 案例，我們在第二季度末的 12 個月滾動批准率繼續保持在 72% 左右，高於 2021 年底的約 62%。

By leveraging our strong published clinical data, FDA-approved PDN indication and inclusion in various society guidelines, we have been able to successfully overturn over 50% of these prior of denials. Equally impressive is that through Q2 across all indications, our HFX access team has over 80% approval rate at the initial prior authorization for patients who meet medical necessity for SCS.

通過利用我們已發表的強大臨床數據、FDA 批准的 PDN 適應症以及納入各種協會指南，我們已經成功推翻了 50% 以上的先前否認。同樣令人印象深刻的是，到第二季度，我們的 HFX 准入團隊在所有適應症上對滿足 SCS 醫療必要性的患者的初始事先授權的批准率超過 80%。

In June we attended the American Diabetes Association 83rd Scientific Sessions, where Dr. David Klonoff and Dr. Erika Peterson presented important secondary findings from the landmark SENZA PDN-RCT comparing Nevro's proprietary high-frequency SCS plus Conventional Medical Management for the treatment of PDN to Conventional Medical Management alone, a 10-kilohertz SCS implant and reductions in A1C and body weight. For your reference, we've included this ADA abstract data in our 2Q investor slide presentation.

6 月，我們參加了美國糖尿病協會第83 屆科學會議，會上David Klonoff 博士和Erika Peterson 博士介紹了具有里程碑意義的SENZA PDN-RCT 的重要二次發現，比較了Nevro 專有的高頻SCS 加上傳統醫療管理治療PDN 的效果僅常規醫療管理、10 kHz SCS 植入以及 A1C 和體重的降低。為了供您參考，我們已將此 A​​DA 摘要數據包含在第二季度投資者幻燈片演示中。

Dr. Erika Petersen also participated in an ADA symposium on the treatment of painful diabetic neuropathy where she reviewed the long-term 24-month durability of pain relief as well as clinically meaningful improvement in neurological function and quality of life achieved with 10 kilohertz therapy. Impressively, at 2 years, high-frequency spinal cord stimulation from Nevro HFX was associated with significant pain relief with 90% of participants reporting greater than 50% pain reduction.

Erika Petersen 博士還參加了關於疼痛性糖尿病神經病變治療的ADA 研討會，會上她回顧了24 個月的長期疼痛緩解效果，以及通過10 kHz 療法實現的神經功能和生活質量的臨床有意義的改善。令人印象深刻的是，兩年後，Nevro HFX 的高頻脊髓刺激與顯著的疼痛緩解相關，90% 的參與者報告疼痛減輕超過 50%。

We recently received confirmation that this 24-month PDN RCT data has been accepted for publication, and we expect to see this data published in the second half of this year. In addition to these promising results, we've enrolled almost 20 patients in our new PDN SENTRY study, which is the first prospective RCT specifically powered to assess restoration of neurological function as a primary endpoint in patients with intractable PDN.

我們最近收到確認，這份 24 個月的 PDN RCT 數據已被接受發布，我們預計將在今年下半年看到該數據發布。除了這些有希望的結果之外，我們還在新的PDN SENTRY 研究中招募了近20 名患者，這是第一個專門用於評估難治性PDN 患者神經功能恢復作為主要終點的前瞻性隨機對照試驗。

You'll recall that the neurological improvements we observed in the original SENZA-PDN study are unique to 10-kilohertz SCS therapy and have not been reported for any other competitive low-frequency SCS therapy. By restoring sensation in the feet, 10-kilohertz SCS may alleviate this tremendous disease burden, reduce amputations, and enable patients to be more active, all of which would improve overall health and quality of life and, of course, reduce health care costs.

您可能還記得，我們在最初的 SENZA-PDN 研究中觀察到的神經系統改善是 10 kHz SCS 療法所獨有的，並且尚未在任何其他競爭性低頻 SCS 療法中得到報導。通過恢復足部感覺，10 kHz SCS 可以減輕這種巨大的疾病負擔，減少截肢，並使患者更加活躍，所有這些都將改善整體健康和生活質量，當然還可以降低醫療保健成本。

Now before I leave PDN, I wanted to cover one more topic. On our last earnings call, you'll recall that we mentioned that we were evaluating whether we should continue to break out PDN indication sales since there are now two other PDN on-label competitors who do not segment their SCS business at all. Since that call, we received a lot of feedback from analysts and investors on this topic. All of these SCS indications, whether for PDN, nonsurgical back pain, or failed-back and leg used the same SCS technology, utilizing products sold and serviced by the same organization are reimbursed using the same codes used with patients that may have multiple pain areas in etiologies and are developed by the same implanting and are deployed by the same implanting physicians to treat chronic pain.

在離開 PDN 之前，我想再討論一個主題。在我們上次的財報電話會議上，您可能還記得，我們提到我們正在評估是否應該繼續細分 PDN 適應症銷售，因為現在還有另外兩家 PDN 標籤競爭對手根本不細分其 SCS 業務。自那次電話會議以來，我們收到了分析師和投資者關於此主題的大量反饋。所有這些SCS 適應症，無論是PDN、非手術背痛還是背部和腿部失敗，都使用相同的SCS 技術、使用同一組織銷售和服務的產品，並使用與可能有多個疼痛區域的患者使用的相同代碼進行報銷在病因學上，它們是通過相同的植入開發的，並由相同的植入醫生部署來治療慢性疼痛。

Given this, we've decided to continue providing this PDN indication breakout for 2023 reporting purposes. However, beginning with our first quarter of 2024 results, we will not specifically break out PDN, but we will continue to provide qualitative commentary on this important growth indication. As stated last quarter, we are interested in driving overall market share gains and company growth period, and we're doing just that.

鑑於此，我們決定出於 2023 年報告的目的繼續提供此 PDN 指示突破。不過，從 2024 年第一季度業績開始，我們不會具體分解 PDN，但我們將繼續對這一重要增長指標提供定性評論。正如上季度所述，我們有興趣推動整體市場份額的增長和公司的增長期，而我們正在這樣做。

Finally, I wanted to say a few words about our updated guidance. First, do not interpret our guidance as the lack of confidence in the long-term outlook of the SCS market. Our growth drivers are where the company is headed. We believe the market is on a path to recovery and will eventually return to sustained historic growth rates.

最後，我想就我們更新的指南說幾句話。首先，不要將我們的指導解讀為對南海市場的長期前景缺乏信心。我們的增長動力就是公司的發展方向。我們相信市場正在復蘇，並最終將恢復到持續的歷史增長率。

Along with the organizational changes we discussed, the scaling of our Costa Rica manufacturing facility, and our future product line, we believe we can generate significant future returns, including improved revenue growth, enhanced margins, and increased operating leverage, setting us up for success in 2024 and beyond. We are also not providing formal PDN indication guidance for the year, but expect PDN indication sales to be in line with how we have previously discussed the 2023 PDN opportunity.

隨著我們討論的組織變革、哥斯達黎加製造工廠的規模擴大以及未來的產品線，我們相信我們能夠產生顯著的未來回報，包括提高收入增長、提高利潤率和增加運營槓桿，為我們的成功做好準備2024 年及以後。我們也沒有提供今年正式的 PDN 適應症指導，但預計 PDN 適應症銷售將與我們之前討論 2023 年 PDN 機會的方式一致。

We are enthusiastic about our plan and look forward to executing our current strategies, driving growth, and taking advantage of the meaningful leverage opportunities we have to drive towards profitability and deliver shareholder value.

我們對我們的計劃充滿熱情，並期待執行我們當前的戰略，推動增長，並利用我們所擁有的有意義的槓桿機會來推動盈利並創造股東價值。

And with that, I'll pass the call over to Rod to provide further details on our second quarter results and guidance.

接下來，我會將電話轉接給羅德，以提供有關我們第二季度業績和指導的更多詳細信息。

Thanks, Kevin, and good afternoon. I'll begin with our worldwide revenue for the second quarter of 2023, which increased 4% reported and on a constant currency basis compared to the second quarter of 2022. PDN represented 18% of worldwide permanent implant procedures, which resulted in approximately $19 million in PDN indication sales in the second quarter of 2023. This quarter included the same number of selling days as Q2 2022.

謝謝，凱文，下午好。我將從2023 年第二季度的全球收入開始，與2022 年第二季度相比，按固定匯率計算，該收入增長了4%。PDN 佔全球永久性植入手術的18%，帶來了約1900 萬美元的收入2023 年第二季度的 PDN 指示銷售額。該季度的銷售天數與 ​​2022 年第二季度相同。

U.S. revenue in the second quarter of 2023 increased 4% compared to the second quarter of 2022. International revenue in the second quarter of 2023 increased 5% as reported and 4% on a constant currency basis.

與 2022 年第二季度相比，2023 年第二季度的美國收入增長了 4%。據報告，2023 年第二季度的國際收入增長了 5%，按固定匯率計算增長了 4%。

Now moving on to some detail below the top line. Gross margin was 68.4% in the second quarter of 2023 compared to 69.8% in the second quarter of 2022. The full market release of the HFX iQ system continues to progress well, and we expect a meaningful shift in the mix to the HFX iQ product throughout 2023, which, combined with the ramp-up of our Costa Rica facility, is expected to benefit gross margins beginning in the fourth quarter of 2023.

現在繼續討論頂線下方的一些細節。 2023 年第二季度的毛利率為 68.4%，而 2022 年第二季度的毛利率為 69.8%。HFX iQ 系統的全面市場發布繼續進展順利，我們預計 HFX iQ 產品組合將發生有意義的轉變整個2023年，再加上我們哥斯達黎加工廠的擴建，預計將從2023 年第四季度開始提高毛利率。

Looking at operating expenses year-over-year. The increase in operating expenses was primarily due to $3.6 million in personnel-related costs, largely specific to management changes made in the second quarter. Non-GAAP adjusted EBITDA for the second quarter of 2023 was a loss of $3.1 million compared to a loss of $4.5 million in the second quarter of 2022.

逐年查看運營費用。運營費用的增加主要是由於 360 萬美元的人事相關成本，主要是由於第二季度的管理層變動。 2023 年第二季度非 GAAP 調整後 EBITDA 虧損 310 萬美元，而 2022 年第二季度虧損 450 萬美元。

Cash, cash equivalents, and short-term investments totaled $329.9 million as of June 30, 2023. This represents a decrease during the second quarter of 2023 of $11.8 million. Uses of cash were in line with normal business operations as well as our projections, and we continue to manage our working capital and are very comfortable with our balance sheet to fund operations.

截至 2023 年 6 月 30 日，現金、現金等價物和短期投資總額為 3.299 億美元。這意味著 2023 年第二季度減少了 1,180 萬美元。現金的使用符合正常業務運營以及我們的預測，我們將繼續管理我們的營運資金，並對我們的資產負債表為運營提供資金感到非常滿意。

Turning now to guidance. It's important to note that we will be using non-GAAP financial measures to describe our outlook for the business. Please see the financial tables in our press release issued today for GAAP to non-GAAP reconciliations.

現在轉向指導。值得注意的是，我們將使用非公認會計準則財務指標來描述我們的業務前景。請參閱我們今天發布的新聞稿中有關 GAAP 與非 GAAP 調節的財務表格。

We expect third quarter worldwide revenue of approximately $95 million to $97 million, which represents a decrease of 4% to 6% on a constant currency basis. We expect third quarter of 2023 non-GAAP adjusted EBITDA to be a loss of approximately $8 million to $10 million. We expect worldwide revenue for full year 2023 of approximately $410 million to $415 million, an increase of 1% to 2% over prior year.

我們預計第三季度全球收入約為 9500 萬至 9700 萬美元，按固定匯率計算下降 4% 至 6%。我們預計 2023 年第三季度非 GAAP 調整後 EBITDA 將虧損約 800 萬至 1000 萬美元。我們預計 2023 年全年全球收入約為 4.1 億至 4.15 億美元，比上年增長 1% 至 2%。

We expect full year 2023 non-GAAP adjusted EBITDA to be in the range of negative $25 million to negative $28 million, which compares to a non-GAAP adjusted EBITDA loss of $23.8 million in 2022.

我們預計 2023 年全年非 GAAP 調整後 EBITDA 將在負 2500 萬美元至負 2800 萬美元之間，而 2022 年非 GAAP 調整後 EBITDA 虧損為 2380 萬美元。

In closing, we made good progress in the second quarter and remain on track to drive growth and scale profitably in our core business in the years ahead. We are in a great position strategically with best-in-class SCS technologies, remaining share gain opportunity, future growth opportunities in PDN, NSPT, and our new HFX iQ platform, superior clinical data, and the opportunity to improve our commercial execution. We look forward to aggressively attacking the significant opportunities to drive the performance of the business the rest of the year.

最後，我們在第二季度取得了良好進展，並將在未來幾年繼續推動核心業務的增長和盈利規模擴大。我們在戰略上處於有利地位，擁有一流的 SCS 技術、剩餘的份額增長機會、PDN、NSPT 的未來增長機會、我們新的 HFX iQ 平台、卓越的臨床數據以及改善我們商業執行的機會。我們期待著在今年剩餘時間裡積極抓住推動業務業績的重大機會。

That concludes our prepared remarks. I'll turn the call back over to Greg to moderate the Q&A session.

我們準備好的發言到此結束。我會將電話轉回格雷格以主持問答環節。

Thanks, Rod. In order to get through the question queue efficiently and take as many questions as we can, we ask you to please limit yourself to one question and a brief related follow-up question. You can rejoin the queue, and if time allows, we will take additional questions. Abby, we are ready for Q&A.

謝謝，羅德。為了有效地完成問題隊列並回答盡可能多的問題，我們要求您只回答一個問題和一個簡短的相關後續問題。您可以重新加入隊列，如果時間允許，我們將回答其他問題。艾比，我們準備好進行問答了。

Thank you. (Operator Instructions) We will take our first question from Shagun Singh with RBC.

謝謝。 （操作員說明）我們將接受 RBC Shagun Singh 提出的第一個問題。

Hi, good afternoon. This is Avi on for Shagun. Just overall, talking about 2023 guidance, how did you arrive at the new guidance range? And overall, what's your guidance philosophy? Is this a guide that you think is conservative or allows you to be at a place where you can be interest progress throughout the year? Thank you.

嗨，下午好。這是 Shagun 的 Avi。總的來說，談到 2023 年指導，您是如何得出新的指導範圍的？總的來說，您的指導理念是什麼？您認為這是一份保守的指南，還是讓您能夠全年保持進步？謝謝。

Yes. Thanks for the question. If you look at the previous two quarters, all four of us that the biggest part of the SCS market reported positive growth. This is the first quarter since those last two quarters where one of us reported flat. We were up 4%. One of the other competitors was up significantly, but one of the others was flat to negative in the U.S. per the reports. And so that gives us a little bit of caution just to think about the market. And we said it's going to be a nonlinear recovery and so each quarter by quarter may be a little different on that recovery journey.

是的。謝謝你的提問。如果你看看前兩個季度，我們這四個作為 SCS 市場最大部分的公司都報告了正增長。這是自過去兩個季度以來我們中的一個季度業績持平的第一個季度。我們上漲了 4%。據報導，其他競爭對手之一的股價大幅上漲，但其他競爭對手之一在美國的股價持平甚至出現負值。因此，這讓我們在考慮市場時需要謹慎一些。我們說過這將是一個非線性複蘇，因此每個季度的複甦之旅可能會略有不同。

The second part is, if you look at the changes that we did during the second quarter with bringing in Greg Siller, the new Chief Commercial Officer, who got off to a fast start and has made the appropriate changes that we've done in the past at other organizations that we know will be successful. It does take some time for those changes to sort of take hold and get the sort of the teams in the field working as one unified unit as well as filling some of those open territories with speed and making sure people are getting trained and effective out in the field. Those are really the two reasons which made us change our guidance for the remainder of 2023.

第二部分是，如果你看看我們在第二季度所做的改變，引入了新任首席商務官格雷格·西勒(Greg Siller)，他起步很快，並做出了我們在第二季度所做的適當改變。過去我們知道將會成功的其他組織。這些變化確實需要一些時間才能生效，讓現場的團隊作為一個統一的單位工作，并快速填充一些開放區域，並確保人們在工作中接受培訓並發揮作用。場。這確實是我們改變 2023 年剩餘時間指導的兩個原因。

We will take our next question from Anthony Petrone with Mizuho Group. Your line is now open.

我們將回答瑞穗集團的安東尼·佩特龍 (Anthony Petrone) 提出的下一個問題。您的線路現已開通。

Hi, thanks. And maybe just to dig in a little bit to maybe the second half implied guide and fully understand that PDN beginning in 2024 is going to go away here. But if we just assume PDN is basically flat in 3Q and 4Q, and that would be conservative considering that it's still growing. The implied math sort of shakes out to a core outlook that's sort of down in the low double digits for a blended time frame of 3Q and 4Q. So maybe between just underlying market and competition, if we barbell those two themes, what's really sort of impacting the second half more so? And then the quick follow-up would be just on sales force restructuring and replenishment in the core SCS division. Is that also at play when we look at the back half guidance? Thanks.

你好謝謝。也許只是深入挖掘一下後半部分暗示的指南，並充分理解從 2024 年開始的 PDN 將在這裡消失。但如果我們僅僅假設 PDN 在第三季度和第四季度基本持平，那麼考慮到它仍在增長，那就太保守了。隱含的數學結果有點動搖了核心前景，在第三季度和第四季度的混合時間範圍內，核心前景下降了兩位數。因此，也許在基礎市場和競爭之間，如果我們對這兩個主題進行限制，那麼到底是什麼對下半年的影響更大呢？然後，快速的後續行動將是核心 SCS 部門的銷售隊伍重組和補充。當我們查看後半部分指導時，這也在起作用嗎？謝謝。

Yes, I'll answer the second part and then turn it to Rod for the numbers on the first part and the implied math that you said.

是的，我將回答第二部分，然後將其交給羅德，以獲取第一部分的數字以及您所說的隱含數學。

Yes, with the sales force execution, what we're really doing is aligning the people that are in the field underneath the closest manager that's in each of those regions or territories. Previous to that, we had different reporting structures, reporting to different leaders within the organization. So now compiling together so that they're operating and making decisions for each territory, that's the big change. And it will take some time for that to sort of take effect.

是的，通過銷售人員的執行，我們真正要做的是將每個地區或地區最接近的經理領導下的現場人員進行協調。在此之前，我們有不同的報告結構，向組織內的不同領導者報告。所以現在匯集在一起​​，以便他們針對每個領域進行運營和決策，這是一個巨大的變化。這需要一些時間才能生效。

But the positive outlook on that, I'm a big believer that putting power to those closest to customers what drives meaningful results because every city is not the same. Every territory is not the same. The decisions that need to be made to drive growth in each of those territories is different versus a peanut butter spread across the whole nation or the whole world for that matter. And so that's going to take some time though. People have new managers, they have new teammates, new bosses. We know that this is the right thing to do, specifically as we look about -- look at strategic opportunities maybe in the future, we've got to organize ourselves ready to be able to scale, not only in the SCS market but anything else for the future as well.

但從積極的角度來看，我堅信將權力交給那些最接近客戶的人才能帶來有意義的結果，因為每個城市都是不一樣的。每個地區的情況都不一樣。與在整個國家或全世界傳播花生醬相比，推動每個地區增長所需做出的決策是不同的。但這需要一些時間。人們有了新的經理、新的隊友、新的老闆。我們知道這是正確的做法，特別是當我們考慮未來的戰略機會時，我們必須組織起來，準備好擴大規模，不僅在南海市場，而且在其他任何市場也為了未來。

So I'll turn it to Rod to do the implied math and the other question that you asked.

所以我會把它交給羅德來做隱含的數學和你問的其他問題。

Hi, Anthony. This is Rod. The first is your math is directionally right using those assumptions. We do think PDN continues to be a growth driver for us. We've seen good sequential growth quarter-over-quarter with that business. We also continue to see NSBP as a growth driver, and we're all seeing ourselves as well as our competitors out there continuing to push NSBP. But fundamentally, your math is right.

嗨，安東尼。這是羅德。首先，使用這些假設，您的數學方向是正確的。我們確實認為 PDN 仍然是我們的增長動力。我們看到該業務環比增長良好。我們還繼續將 NSBP 視為增長動力，並且我們都看到自己以及我們的競爭對手繼續推動 NSBP。但從根本上來說，你的數學是正確的。

As Kevin mentioned, we're sitting here after two pretty strong quarters in Q4 and Q1 of growth in the industry. And as you mentioned, we've -- 2 of the 3 posted growth in the second quarter, with one being flat to maybe down a little bit in the U.S. And with that and our sales force execution that we have in place, that's how the guidance is kind of playing out for the second half of the year.

正如凱文提到的，在第四季度和第一季度行業增長兩個相當強勁的季度之後，我們坐在這裡。正如您所提到的，我們——三者中的兩個在第二季度實現了增長，其中一個在美國持平甚至可能略有下降。有了這一點以及我們現有的銷售人員執行力，這就是如何該指導意見將在今年下半年發揮作用。

Your next question comes from the line of Adam Maeder with Piper Sandler.

你的下一個問題來自 Adam Maeder 和 Piper Sandler。

This is Cimarron on for Adam. I want to dig into Q3 a little bit. So it looks like the Q3 guide implies revenues down about 12% sequentially. And I understand there is a seasonality component with the business, but this is maybe a bit steeper of a quarter-over-quarter sequential step down than we've seen historically. So can you walk us through the puts and takes for Q3? And how do you weigh other dynamics like competition, HFX iQ launch, and just underlying market recovery in this quarter.

這是亞當的西馬龍。我想深入研究一下第三季度。因此，第三季度指南似乎意味著收入環比下降約 12%。據我所知，該業務存在季節性因素，但這可能比我們歷史上看到的季度環比下降幅度更大一些。那麼您能給我們介紹一下第三季度的看跌期權嗎？您如何權衡其他動態，例如競爭、HFX iQ 的推出以及本季度的基本市場復甦。

Yes. Sure, Cimarron. So yes, seasonality definitely in Q3 has historically been one of the lowest quarters throughout the year before the Q4 end of the year where people's insurance plans, right, when their deductibles where we set into the new year. But still going back to the couple of reasons we talked about in the script and also answered on the first couple of questions. If you go back and look at what happened and transpired with Q2, I started on the 2 days before the last earnings call and about 4 weeks in, 5 weeks in, I made the change at the Chief Commercial Officer role, and we took down guidance for the second quarter.

是的。當然，西馬龍。所以，是的，從歷史上看，第三季度的季節性肯定是第四季度結束之前全年最低的季度之一，人們的保險計劃，對，當我們在新年中設定免賠額時。但仍然回到我們在劇本中討論的幾個原因，並回答了前幾個問題。如果你回頭看看第二季度發生的事情，我從上次財報電話會議前2 天開始，大約4 週、5 週後，我對首席商務官的職位進行了調整，我們取消了首席商務官的職位。第二季度指導。

Obviously, that was 1 month and 1.5 months into the quarter and I knew that we had some things that we needed to change in the organization. So it's either put off some of those changes that we need to make or do it immediately so we can set us up for the future. So bringing Greg in, in the middle of the quarter, obviously gave him time to spend time with the team and really assess what offense we need to play here. So he quickly made those changes with the reorganization of the sales teams and made some changes in the marketing side as well to be able to align our internal and external organizations to be working together as one team versus two separate units.

顯然，那是本季度的 1 個月和 1.5 個月，我知道我們需要在組織中做出一些改變。因此，要么推遲我們需要做出的一些改變，要么立即進行，這樣我們就可以為未來做好準備。因此，在本節中期讓格雷格上場，顯然讓他有時間與球隊共度時光，並真正評估我們在這裡需要打什麼進攻。因此，他很快通過銷售團隊的重組做出了這些改變，並在營銷方面做出了一些改變，以便能夠使我們的內部和外部組織協調一致，作為一個團隊而不是兩個獨立的單位一起工作。

So that all happened towards the back half of second quarter. So if you look at those changes and possible a little bit of disruptions that could occur because of those changes, that's why the Q3 is down sequentially more than it would have been in previous years. Rod, do you want to add to that?

這一切都發生在第二節後半段。因此，如果你看看這些變化，以及由於這些變化可能發生的一些干擾，這就是為什麼第三季度比前幾年連續下降更多的原因。羅德，你想補充一下嗎？

No, I think you covered it. The only thing that I might add is that HFX iQ, which we should receive a bump from in pricing, it's going to take a little while for that mix to ramp up. And we saw it increase or improve in Q2, and we'll see that continue to improve as we go into the third and the fourth quarters.

不，我想你已經涵蓋了。我唯一要補充的是，HFX iQ 的定價應該會有所提高，但這種組合需要一段時間才能提高。我們看到它在第二季度有所增加或改善，當我們進入第三季度和第四季度時，我們會看到這種情況繼續改善。

And your next question comes from the line of Larry Biegelsen with Wells Fargo.

你的下一個問題來自富國銀行的拉里·比格爾森 (Larry Biegelsen)。

Hi, this is Nathan Treybeck calling for Larry. Thanks for taking my questions. You had indicated several times that you plan to diversify Nevro in interventional pain. You talked about new technologies and new indications on your existing technology in all within 3 years. Can you let us know what that will entail and would you raise equity for M&A? Thanks.

大家好，我是內森·特雷貝克 (Nathan Treybeck)，正在呼叫拉里 (Larry)。感謝您回答我的問題。您曾多次表示，您計劃將 Nevro 的介入疼痛業務多元化。您在三年內總共談到了新技術和現有技術的新適應症。您能否告訴我們這將帶來什麼以及您會為併購籌集股本嗎？謝謝。

Yes. So as far as -- I'll answer the new indication question. As you know, we have 20 patients enrolled, as I said on the script, out of the 200 we need for our PDN SENTRY study. Our plan is to withdraw and extract some really good data that will allow us to build on the claims we already have on that indication. So that one is already in play. We've not talked about other indications that we're working on in the background, but we're in the pilot phase of some really interesting other areas of pain that's not been publicly disclosed yet, and we'll do that whenever we get closer to something that's more tangible there. But that's the plan with our superior clinical team that we have.

是的。就目前而言——我將回答新的指示問題。如您所知，正如我在腳本中所說，我們的 PDN SENTRY 研究需要 200 名患者，其中有 20 名患者入組。我們的計劃是撤回並提取一些非常好的數據，這些數據將使我們能夠在該適應症已有的主張的基礎上進一步發展。所以這個已經在發揮作用了。我們還沒有談論我們正在後台研究的其他跡象，但我們正處於一些真正有趣的其他痛苦領域的試點階段，這些領域尚未公開披露，只要我們得到消息，我們就會這樣做更接近那裡更具體的東西。但這是我們優秀臨床團隊的計劃。

I mean look at the clinical results that we've been able to produce over the history of this company, that's a core part of who we are, and we're never going to get away from that. And so think about the things that we're able to find because we're doing that clinical studies. The SENTRY study is an offshoot because we saw these early indications in our first PDN study that allowed us to say, "Hey, you know what, we should explore this further because this is showing really good things for additional claims."

我的意思是看看我們在這家公司的歷史上能夠產生的臨床結果，這是我們的核心部分，我們永遠不會擺脫這一點。因此，請考慮一下我們能夠發現什麼，因為我們正在進行臨床研究。 SENTRY 研究是一個分支，因為我們在第一個PDN 研究中看到了這些早期跡象，這讓我們能夠說：“嘿，你知道嗎，我們應該進一步探索這個問題，因為這為額外的索賠展示了真正的好東西。”

Now as far as new technologies and diversifying, yes, I talked about it in the main pillar that we have to really diversify our revenue. And I'll just say that we're always constantly looking and taking meetings and looking at what should be part of our leveraging our biggest asset we have in this organization, which is our sales force. And we've got great relationships.

現在就新技術和多元化而言，是的，我在主要支柱中談到了我們必須真正實現收入多元化。我只想說，我們總是不斷地尋找和召開會議，並研究如何利用我們在這個組織中擁有的最大資產，即我們的銷售隊伍。我們的關係很好。

We have -- we've said publicly 500 people out in the field. That should be leveraged to be able to service our same call point that we service today with adding stuff in the bag that they're already doing from a procedure standpoint or other areas that the other procedures that could be launched that could help those patients that suffer from chronic pain. So we're not going to steer way far from the ship. We won't do anything stupid, but we're constantly looking for those opportunities. And as far as raising capital, I'll let Rod talk about some of the options that we might have.

我們已經公開表示，有 500 人在現場。應該利用這一點來為我們今天服務的同一呼叫點提供服務，從程序的角度或其他領域添加他們已經在做的東西，可以啟動其他程序來幫助那些患者患有慢性疼痛。所以我們不會遠離船。我們不會做任何愚蠢的事情，但我們會不斷尋找這些機會。至於籌集資金，我會讓羅德談談我們可能有的一些選擇。

Yes, Nathan, really financing, it depends. It depends on if we enter into a deal, what the size and the magnitude and the timing of it is. We're in very good shape from a balance sheet perspective. We have about $330 million on the books in cash, cash equivalents, and short-term investments as of the end of the second quarter. And with a little bit of growth, we find ourselves getting closer to that adjusted EBITDA positive growth territory and then cash flow should be not too far behind that.

是的，內森，真正融資，這要看情況。這取決於我們是否達成交易、交易的規模、程度以及時機。從資產負債表的角度來看，我們的狀況非常好。截至第二季度末，我們的賬面上有約 3.3 億美元的現金、現金等價物和短期投資。隨著一點點的增長，我們發現自己越來越接近調整後的 EBITDA 正增長區域，然後現金流應該不會落後太多。

So we like where we are from an operating perspective, but it really depends on what size of a deal and when it comes along from a financing perspective, what we'd entertain at that point.

因此，從運營角度來看，我們喜歡我們現在的處境，但這實際上取決於交易的規模，以及從融資角度來看，我們當時會考慮什麼。

Okay, thanks. If I could follow up with one more. In terms of just the competitive landscape, you're one of your larger public competitors reported a strong quarter. But in terms of the smaller private competitors like Saluda and Biotronik, would you say you gained or lost share in Q2? What do you think Nevro stacked up?

好的謝謝。如果我能再跟進一個的話。僅就競爭格局而言，您是較大的公開競爭對手之一，報告了強勁的季度業績。但就 Saluda 和 Biotronik 等規模較小的私人競爭對手而言，您認為您在第二季度的份額是增加還是減少了？你認為內夫羅積累了什麼？

Yes. We -- our calculations show that we held steady with the physicians that we already had that implant exclusively Nevro or those accounts that we call splitters that use some of us or of somebody else. Obviously, they're going to try new technology that's out there. But we don't think by our calculations and data that we can get that there were significant impacts on any of us from those two new entrants at this time.

是的。我們的計算表明，我們與醫生保持一致，我們已經擁有專門植入 Nevro 的植入物，或者那些我們稱之為分裂者的帳戶，這些帳戶使用了我們中的一些人或其他人的帳戶。顯然，他們將嘗試現有的新技術。但我們認為，通過我們的計算和數據，我們無法得知這兩個新進入者此時對我們任何人產生了重大影響。

Now to say that I'm an ex-athlete, both NFL and college, and I do not take any competitor lightly, so we'll continue to be vigilant. And some of the changes that we made in our organization and the commercial organization will set us up to be more competitive to not only just tread water and just keep the share we have but our plan is to go out and take share. We're a highly competitive team here, and that's why we're changing our organization and ensuring we have A+ talent in every position so we can go out there and continue to win in this market.

現在要說的是，我是一名前運動員，無論是NFL還是大學運動員，我不會輕視任何競爭對手，所以我們將繼續保持警惕。我們在組織和商業組織中所做的一些改變將使我們更具競爭力，不僅是原地踏步並保持我們擁有的份額，而且我們的計劃是走出去並獲得份額。我們是一支極具競爭力的團隊，這就是為什麼我們要改變我們的組織並確保每個職位都擁有 A+ 人才，這樣我們就可以走出去並繼續在這個市場上獲勝。

And your next question comes from the line of Robbie Marcus with JPMorgan. Your line is open.

你的下一個問題來自摩根大通的羅比·馬庫斯。您的線路已開通。

This is Allen on for Robbie. Just on the first question, clearly, the rest of 2023 is going to be pretty impacted by the commercial changes as you kind of refocus the organization. What level of confidence do you have that the majority of work is going to be behind you by 2024 and that you're going to do a kind of return to a normalized growth rate then?

這是艾倫替羅比發言。就第一個問題而言，很明顯，隨著組織重新調整重點，2023 年剩餘時間將受到商業變化的巨大影響。您對到 2024 年大部分工作將在您身後完成並且屆時您將恢復正常增長率有何信心？

Yes. I mean that was the plan of making the change early here with Greg. And Greg had 17 years at Stryker. Rod and I both came from Stryker as well, where we know how to build world-class sales organizations and bring in our people that we know from other organizations that operate with the same level of intensity, competitiveness, and passion that we all do and all the other leaders that we have on my direct reporting team. We're a highly competitive group in everything that we do.

是的。我的意思是，這就是格雷格儘早做出改變的計劃。 Greg 在 Stryker 工作了 17 年。羅德和我也都來自史賽克，在那裡我們知道如何建立世界一流的銷售組織，並引進我們從其他組織中認識的人員，這些組織的運營強度、競爭力和熱情與我們所有人相同，並且我的直接報告團隊中的所有其他領導者。我們所做的一切都是一個極具競爭力的團隊。

And so we believe that, that 6-month mark is traditionally what it takes new people to sort of get ramped up, specifically if they're top performers, but maybe they're coming from a different side of med tech. And we believe that most of that groundwork is going to be taken care of in 2023. And as I mentioned at the other question, doing it early was the right thing to do for our shareholders, our investors and for all of us as employees so that we can get off to a really good start as we come out of this year.

因此，我們相信，傳統上，新人需要 6 個月才能獲得提升，特別是如果他們是表現最佳的人，但也許他們來自醫療技術的不同方面。我們相信大部分基礎工作將在 2023 年得到解決。正如我在另一個問題中提到的，儘早做這件事對我們的股東、投資者和我們所有員工來說是正確的事情，所以今年結束時我們可以有一個良好的開端。

Got it. And then as a quick follow-up, you referenced confidence that the market kind of returning back to historical growth rates. And I think -- I hope I'm not alone in saying that this idea of historical growth rates is one that's kind of been up in the air because the market has been pretty bumpy, both before and after of the market, after you enter the market, and then the slowdown we saw in the years after leading to COVID. So when you talk about a normalized market growth rate, what are you thinking of?

知道了。然後，作為快速跟進，您提到了對市場恢復到歷史增長率的信心。我認為——我希望不是只有我一個人說歷史增長率的想法有點懸而未決，因為市場在你進入市場之前和之後都相當坎坷。市場，然後是我們在新冠疫情爆發後的幾年裡看到的放緩。那麼，當您談論正常化的市場增長率時，您會想到什麼？

Yes. Typically, the historical rate would be anywhere from like 6% to 9%. And if you look at this quarter and the last two quarters where we all had growth in the previous two quarters. This quarter was, as you mentioned, one -- or the previous question, mentioned, there was one large competitor that had really good double-digit growth. We had 4% growth. And then we had one of our competitors that were flat and then down 4%, we calculate in the U.S. So it's starting to diverge a little bit. But overall, the market is going to show -- likely show growth in this quarter.

是的。通常，歷史利率在 6% 到 9% 之間。如果你看看本季度和過去兩個季度，我們在前兩個季度都有增長。正如您提到的，這個季度是一個——或者之前的問題提到的，有一個大型競爭對手確實實現了兩位數的增長。我們的增長率為 4%。然後我們的一個競爭對手持平，然後下降了 4%，我們在美國計算，所以它開始有點偏離。但總體而言，市場將在本季度出現增長。

And just to go back to those remarks, the nonlinear nature, it's not going to be a straight bottom left to top right graph that we see in some other elective procedures return. It's a little choppy as it's going up and to the right. So it's not just a linear line, but the trajectory is going in the right direction if you look back from the last two to three quarters now.

回到這些評論，非線性本質，它不會是我們在其他一些選修程序中看到的從左下到右上角的直圖。當它向上和向右移動時，它有點不穩定。因此，這不僅僅是一條直線，如果你現在回顧過去的兩到三個季度，軌跡正在朝著正確的方向發展。

(Operator Instructions). And we will take our next question from Brandon Vasquez with William Blair.

（操作員說明）。我們將回答布蘭登·巴斯克斯和威廉·布萊爾提出的下一個問題。

Hello, and thanks for taking my question. Kevin, you had made a brief comment earlier about potentially replacing or filling some open territories as you guys made some commercial changes. Just wanted to, one, clarify, do you have open territories? Is that a result of any higher-than-usual turnover given there's been some volatility in the core market recently or perhaps there's just commercial changes? So curious if you can just give an update on how the sales force has been as their turnover, are you guys having to fill in some open territories? And does that kind of elongate what a recovery could look like since they have to ramp? Thanks

您好，感謝您提出我的問題。凱文，您早些時候曾就在進行一些商業更改時可能替換或填充一些開放區域發表過簡短的評論。只是想，第一，澄清一下，你們有開放的領土嗎？鑑於最近核心市場出現一些波動，這是否是營業額高於平常的結果，或者可能只是商業變化？很好奇，如果您能提供銷售人員營業額的最新情況，你們是否需要填補一些空缺的領域？由於它們必須加速，這種情況是否會延長復甦的時間？謝謝

Yes. No, we're still within those norms of med device turnover that's traditionally the 10% to 20% type range. We only have a handful of territories open. A lot of that is behind us with what we've been doing behind the scenes since our last public announcement was Greg's hiring and quickly bringing in some people that we both have known from even before Stryker and me even before that as well. These are people that we've known that are great, results-driven sales professionals. So we have a handful of sales openings right now.

是的。不，我們仍然處於醫療器械周轉率的標準範圍內，傳統上是 10% 到 20% 的類型範圍。我們只開放了少數地區。自從我們上次公開宣布聘用 Greg 以來，我們一直在幕後做很多事情，並迅速引進一些我們甚至在 Stryker 和我之前就認識的人。據我們所知，這些人都是出色的、以結果為導向的銷售專業人士。所以我們現在有一些銷售空缺。

But yes, any time you make a change with the underperforming reps, even when you put in A+ as star rep there. It does take time to get those relationships built and just start taking share from our competitors. So that's again what's going to take 6 months for us to start seeing some of those territories that we have proactively changed over because we've had some nonperforming territories. And we have some territories that, by the way, are absolutely crushing it in some areas that had higher than our national market share, sometimes double of what our national market share is. So we know we can do it when we have the right people in the right territories.

但是，是的，任何時候你對錶現不佳的代表做出改變，即使你在那裡將 A+ 作為明星代表。建立這些關係並開始從競爭對手那里奪取份額確實需要時間。因此，我們又需要 6 個月的時間才能開始看到我們主動更改的一些區域，因為我們有一些表現不佳的區域。順便說一句，我們有一些地區的市場份額絕對高於我們的全國市場份額，有時甚至是我們全國市場份額的兩倍。因此，我們知道，當我們在正確的地區擁有正確的人員時，我們就能做到這一點。

And your next question comes from the line of Richard Newitter with Truist Securities.

您的下一個問題來自 Truist Securities 的理查德·紐特 (Richard Newitter)。

This is Sam on for Rich. Just one quick one on the market growth rate, 6% to 9%, just to clarify. Is that inclusive of PDN when you say that amount?

這是山姆為里奇辯護的人。只是為了澄清一下市場增長率，6% 到 9%。您說的金額是否包含 PDN？

Yes.

是的。

Okay. And then just as we think about sales force productivity going forward with a lot of the changes getting made up on, how should we think about productivity ramp through 2024? And then how does that relate to what operating leverage the business can see as growth returns to more normalized rates in '24? Thanks for taking my question.

好的。然後，正如我們考慮銷售人員生產力隨著許多變化的彌補而向前發展一樣，我們應該如何考慮到 2024 年生產力的提升？那麼，隨著 24 年增長恢復到更正常化的水平，這與企業可以看到的運營槓桿有何關係？感謝您提出我的問題。

Yes. Thanks, Sam. As far as some of the reorganization that we had out in the sales force and really, it's the realignment to who their managers are and a little bit of an increase and enhancing their comp plan where they're working together as a team to hit their number, the quota that we hand out to them. We had people that were sort of chasing different numbers out there, and now they're aligned to work together closer to the customer, closer to the patient, to make those right decisions that are right for their territory. And that's really the big change that we have.

是的。謝謝，薩姆。就我們在​​銷售隊伍中進行的一些重組而言，實際上是對他們的經理進行了重新調整，並稍微增加和增強了他們的薪酬計劃，他們作為一個團隊共同努力，以實現他們的目標。 number，我們發給他們的配額。我們有一些人在外面追逐不同的數字，現在他們團結起來，更加貼近客戶、貼近患者，做出適合他們領域的正確決策。這確實是我們所面臨的重大變化。

So as far as productivity, having a team that's working together and aligned together, that's always championship winning teams that are out there. It's not those teams that are full of all stars they don't work together. We've seen it in sports for those of us who watch sports, you can see those organizations that have A+ people on their teams, but they don't work together as a team. And this is a team sport, right? Each of ourselves reps can't do it on their own. They have therapy consultants. They have assistant sales reps. They have coaches that talk to the patients post implant. They have to be working together as one oiled machine, and that will bring efficiency as well as the team culture and engagement should increase as well. And so those are more of the things that we expect to get out of them.

因此，就生產力而言，擁有一支齊心協力、團結一致的團隊，總是能夠贏得冠軍的團隊。並不是那些全明星的球隊不在一起工作。對於我們這些觀看體育比賽的人來說，我們已經在體育比賽中看到了這一點，你可以看到那些團隊中有 A+ 人員的組織，但他們並沒有作為一個團隊一起工作。這是一項團隊運動，對嗎？我們每個代表都無法獨自做到這一點。他們有治療顧問。他們有助理銷售代表。他們有教練在植入後與患者交談。他們必須像一台上油的機器一樣一起工作，這將帶來效率以及團隊文化和參與度也應該增加。因此，這些是我們期望從中得到的更多東西。

And then longer term, as I said publicly, being able to add in something more to their sales bag. Eventually will also bring really strong operating leverage because that will allow us to increase the revenue with the same footprint that we have out there today. But obviously, we can never comment on when and how and what we would do on an M&A standpoint, but that's something and why we're constantly taking all these calls and looking to see what would be a right fit for us over the longer term.

然後從長遠來看，正如我公開所說，能夠在他們的銷售包中添加更多東西。最終還將帶來真正強大的運營槓桿，因為這將使我們能夠以與今天相同的足跡增加收入。但顯然，從併購的角度來看，我們永遠無法評論何時、如何以及做什麼，但這就是我們不斷接聽所有這些電話並尋找長期適合我們的原因的原因。

And your next question comes from the line of William Plovanic with Canaccord.

你的下一個問題來自 William Plovanic 與 Canaccord 的對話。

Hi, it's John on for Bill tonight. Thanks for taking our questions. Just a quick one on iQ. I know you mentioned briefly, but are you seeing any ASP benefits? And do these benefits more than offset the ASP derivation you see on older generation products in the U.S.?

嗨，今晚由約翰代替比爾發言。感謝您回答我們的問題。簡單介紹一下 iQ。我知道您簡單地提到過，但是您看到 ASP 的好處了嗎？這些好處是否足以抵消您在美國老一代產品上看到的 ASP 衍生值？

Yes. You're asking about ASP there?

是的。你問的是ASP嗎？

For Rod, yes.

對於羅德來說，是的。

Okay. Sorry, I didn't hear that real thoroughly.

好的。抱歉，我沒聽清楚。

Yes, we're -- so far, we are seeing the sort of pricing that we anticipated for the year. And we're receiving a premium on the iQ product. We are seeing some pricing erosion as we've talked about in prior quarters and that we've seen over the last couple of years with some of our legacy products. And those continue to make up a disproportionate amount of the mix. And so they have a tendency to offset one another. But as iQ continues to become a greater part of our mix as we go throughout the year into Q3 and Q4, we anticipate that the pricing will hold and we'll start to see that show up in margins, particularly in Q4, when we also start to see some of the benefit of -- some of the lower costs from Costa Rica starting to flow through gross margins.

是的，到目前為止，我們看到的是我們今年預期的定價。我們還獲得了 iQ 產品的溢價。正如我們在前幾個季度所討論的那樣，以及我們在過去幾年中看到的一些舊產品的價格下降，我們看到了一些定價下降。這些仍然構成了不成比例的組合。因此它們有相互抵消的傾向。但隨著全年進入第三季度和第四季度，iQ 繼續成為我們產品組合的重要組成部分，我們預計定價將保持不變，我們將開始看到這一點體現在利潤率上，特別是在第四季度，當我們還開始看到一些好處——哥斯達黎加的一些較低成本開始體現在毛利率上。

Great. Thanks, Rob. And Kevin, for you, just when you think about the HFX coaches and how this allow sales reps to be more productive in terms of selling versus managing patients, are we still to be getting agents at the beginning innings in terms of sales productivity for utilizing those coaches and sales rep. Thanks for taking my question.

偉大的。謝謝，羅布。 Kevin，對於您來說，當您想到 HFX 教練以及這如何使銷售代表在銷售和管理患者方面更加高效時，我們是否仍然需要在銷售生產力方面讓代理商在開始階段就利用那些教練和銷售代表。感謝您提出我的問題。

Yes, I'd call it early innings or maybe fourth inning, if you will, that's there, some on call that mid-inning, maybe depending on when you bring in your reliever. So I think that -- yes, I would call it early to mid-innings on that, and we're seeing a lot of success. Now part of the changes that we've made and the realignment is those coaches are now going to be aligned closer with each of those individual territories. So that those coaches work alongside the sales reps as one team and get to know the physicians and what they like and what the patients' pool is, but yes, that allows our sales reps to concentrate on going out and winning new business and taking more cases away from our competitors while the coach is talking to the patients and really taking care of them.

是的，我會稱之為前幾局或第四局，如果你願意的話，就在那裡，有些人在中局待命，也許取決於你何時上場接替投手。所以我認為——是的，我會稱之為早期到中期，我們看到了很多成功。現在，我們所做的改變和重新調整的一部分是這些教練現在將與每個單獨的區域更加緊密地結合在一起。因此，這些教練與銷售代表作為一個團隊一起工作，了解醫生、他們喜歡什麼以及患者群體是什麼，但是，是的，這使我們的銷售代表能夠專注於走出去，贏得新業務並獲得更多業務當教練與患者交談並真正照顧他們時，我們的病例遠離了我們的競爭對手。

And I just want to make sure we're not just talking about money and growth and everything here. The good news is about the coaches is it's better for the patients as well. If our rep is in the OR covering a case, they're not answering the cell phone when a patient calls them. Our coaches are stationary and they're not traveling around and so our coaches have the ability to be able to spend more caring time with those patients. And some of these patients are trying to find optimal pain and really trying to dial in what the right frequencies are for them or the right amplitude or what have you and really talk them through their pain management journey, and they've really appreciated the fact that they can get somebody on the phone more quickly and often than they could if the sales rep wasn't available. So it's better for patients and our customers as well.

我只是想確保我們不僅僅談論金錢和增長以及這裡的一切。對於教練來說，好消息是這對患者也有好處。如果我們的代表在手術室處理某個病例，當患者打電話給他們時，他們不會接聽手機。我們的教練是固定的，不會四處走動，因此我們的教練有能力花更多的時間來照顧這些患者。其中一些患者正在嘗試找到最佳的疼痛，並真正嘗試撥入適合他們的正確頻率或正確的幅度或您擁有的東西，並真正與他們談論他們的疼痛管理之旅，他們真的很欣賞這一事實與銷售代表不在時相比，他們可以更快、更頻繁地聯繫某人。因此，這對患者和我們的客戶來說都更好。

(Operator Instructions) Your next question comes from the line of Brad Bowers with Mizuho Securities. Your line is open.

（操作員指令）您的下一個問題來自瑞穗證券的布拉德·鮑爾斯（Brad Bowers）。您的線路已開通。

Hi, thanks for taking one of our questions again. Just wanted to follow up from Mizuho here. We've been talking a lot about a lot of the growth outlook, but I just wanted to hear more about kind of the reimbursement wins that you had. I mean, obviously, they're incremental to all of the coverage that you've gotten on both PDN, nonsurgical back, and on the core business over the years. So I wanted to kind of hear how they're impacting conversations with doctors? And are you kind of -- do you plan on meeting with those new wins and to help drive the U.S. trials higher as well? Thanks for the comment.

您好，感謝您再次提出我們的問題之一。只是想從瑞穗這裡跟進。我們已經談論了很多增長前景，但我只是想听聽更多有關您所獲得的報銷勝利的信息。我的意思是，顯然，它們是多年來您在 PDN、非手術背部和核心業務上獲得的所有覆蓋範圍的增量。所以我想听聽它們如何影響與醫生的對話？您是否計劃迎接這些新的勝利並幫助推動美國的試驗取得更高的成績？感謝您的評論。

Yes. We believe, which we'll never know for sure what turned the tide for someone like First Coast and Novitas. They wouldn't have made that change in decision unless there was clinical data that led them to make that decision. And we believe that we've made the biggest impact regardless of what other press releases or whoever else took the credit for that because there was the RCT data that was out there that allowed them to make that decision based upon the clinical data.

是的。我們相信，但我們永遠無法確切知道是什麼扭轉了像 First Coast 和 Novitas 這樣的公司的潮流。除非有臨床數據引導他們做出這樣的決定，否則他們不會做出這樣的決定。我們相信，無論其他新聞稿或其他任何人將其歸功於此，我們都產生了最大的影響，因為有隨機對照試驗數據，使他們能夠根據臨床數據做出決定。

So we have a team. Our government affairs and medical affairs team is one of the best in the business. I'd put them up against anybody and any of the companies that I've ever worked for or any of our competitors. They are an unbelievable team that work underneath Greg Siller in the commercial organization and are completely aligned with working with our customers to ensure that their patients have access. So yes, that's a big tailwind for us.

所以我們有一個團隊。我們的政府事務和醫療事務團隊是業內最優秀的團隊之一。我會讓他們與我曾經工作過的任何人、任何公司或我們的任何競爭對手進行競爭。他們是一支令人難以置信的團隊，在商業組織中的格雷格·西勒 (Greg Siller) 的領導下工作，並與我們的客戶完全一致，以確保他們的患者能夠獲得治療。所以，是的，這對我們來說是一個很大的推動力。

However, they've been shut down for quite some time and so believe it or not, not all the physicians just read the newspapers and find out about this good news. So it's our team's ability to go out there and educate, and educate the referral pathways in for PDN that need to be sort of prime. And so it's not like immediately that happens in Q3 and Q4, but we're going out there and selling the good news and telling the good news to both the referring physicians as well as the implanting physicians that this is now an available treatment for those patients that were previously didn't have the access, but it doesn't happen overnight. So that's going to take a little bit longer into Q3 and Q4 before we see a ramp-up from those changes.

然而，他們已經關閉相當長一段時間了，所以不管你信不信，並不是所有的醫生都會閱讀報紙並發現這個好消息。因此，我們的團隊有能力走出去，進行教育，並教育 PDN 的推薦途徑，這需要成為首要條件。因此，這不會像第三季度和第四季度那樣立即發生，但我們會出去推銷好消息，並向轉診醫生和植入醫生告訴這個好消息，這現在是這些人的可用治療方法以前無法訪問的患者，但這不會在一夜之間發生。因此，在我們看到這些變化有所增加之前，第三季度和第四季度需要更長的時間。

But think about the areas in which they cover. These are high Medicare populations and really cover a lot of those 205 million people that we now say are covered for PDN. So yes, thanks for recognizing that, that's a big win. It's a big win for patients.

但請考慮一下它們所涵蓋的領域。這些是醫療保險的高人口，並且確實覆蓋了我們現在所說的 PDN 覆蓋的 2.05 億人中的大部分人。所以，是的，感謝您認識到這一點，這是一個巨大的勝利。這對患者來說是一個巨大的勝利。

And your next question comes from the line of Dave Turkaly with JMP Securities.

您的下一個問題來自 JMP 證券公司的 Dave Turkaly。

Hi, good afternoon. On the guidance, I just wanted to clarify, Kevin. You mentioned sort of market growth fluidity but you also say, obviously, there's been some over. I'm just trying to make sure the updated 3Q and implied 4Q include that turnover that you're not anticipating more that you've made those changes and replace the folks and that that is implicit in what you're talking about for 3Q and 4Q right now.

嗨，下午好。關於指導，我只是想澄清一下，凱文。您提到了某種市場增長的流動性，但您也說，顯然，已經有些結束了。我只是想確保更新後的第三季度和隱含的第四季度包括您沒有預期的更多的營業額，您已經做出了這些更改並替換了人員，而這隱含在您所談論的第三季度和現在是第四季度。

Yes. We took that all into consideration as we set the guidance. There may be some macroeconomic things that we can never predict that could be outside of our control. However, we took into -- just like we said in our prepared remarks, that the sort of two quarters of all of us growing; this quarter being the first one where we saw one of our competitors flat to negative in the U.S. gives us a little pause. And then obviously, the changes that we've made. We've got a handful of territories that we're interviewing for and close to some candidates. So we took that into consideration as we set the guidance for the back half of the year.

是的。我們在製定指導方針時考慮了所有這些。可能有一些我們永遠無法預測的宏觀經濟事情可能超出我們的控制範圍。然而，就像我們在準備好的發言中所說的那樣，我們考慮到我們所有人的四分之一的人都在增長；本季度是我們第一次看到我們的競爭對手在美國的業績持平至負值，這讓我們稍稍停頓了一下。顯然，我們所做的改變。我們正在面試一些地區，並且這些地區與一些候選人關係密切。因此，我們在製定下半年的指導時考慮到了這一點。

And for some of the folks that are no longer with you, I imagine you've taken out whatever their contribution was or adjusted those numbers to account for the fact that you might have to start rebuilding a territory maybe from scratch from a lower base.

對於一些不再和你在一起的人，我想你已經去掉了他們的貢獻或調整了這些數字，以考慮到你可能必須從較低的基礎開始重建領土的事實。

Yes. So we're going there just to make sure you understand. So most -- we don't have any territory that have one person only in them, right? So when we lose a rep or more than likely we made the decision that the rep wasn't going to be an A+ player, and we wanted to make a change. There are therapy consultants and assistant sales reps that are often there to be able to keep the business sustained for at least a period of time. But those are areas in which you don't expect a 5% to 7% growth out of because those that are left are just managing the current business that's there. So yes, we took that in consideration as well as we set the Q3 and Q4 guidance.

是的。所以我們去那裡只是為了確保你理解。所以大多數——我們沒有任何一個地區只有一個人，對嗎？因此，當我們失去代表或很可能失去代表時，我們決定該代表不會成為 A+ 玩家，並且我們想要做出改變。治療顧問和助理銷售代表通常能夠維持業務至少一段時間。但這些領域你預計不會有 5% 到 7% 的增長，因為剩下的只是管理現有的業務。所以，是的，我們考慮到了這一點，並製定了第三季度和第四季度的指導。

Thank you.

謝謝。

And there are no further questions at this time. So I would now like to turn the conference back to Mr. Thornal for closing remarks.

目前沒有其他問題。現在我想請索納爾先生致閉幕詞。

Thanks for joining the call, everybody, and I look forward to reporting on our progress on the next call. See you then. Thanks.

感謝大家加入通話，我期待在下次通話中報告我們的進展。回頭見。謝謝。

Ladies and gentlemen, this concludes today's conference, and we thank you for your participation. You may now disconnect.

女士們、先生們，今天的會議到此結束，我們感謝你們的參與。您現在可以斷開連接。