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Introduction & Market Context
Inogen Inc . (NASDAQ:INGN) released its Q1 2025 financial presentation on May 7, 2025, revealing significant progress in its financial turnaround efforts despite ongoing challenges in its direct-to-consumer business. The respiratory care specialist’s stock closed at $7.17, showing a modest 1.41% gain on the day of the announcement.
The company’s presentation highlighted a continued shift in its business model, with business-to-business channels driving growth while direct-to-consumer sales remain under pressure. This quarter marks a significant milestone as Inogen achieved adjusted EBITDA breakeven for the first time in recent quarters.
Quarterly Performance Highlights
Inogen reported total revenue of $82.3 million for Q1 2025, representing a 5.5% year-over-year increase. On a constant currency basis, revenue growth was even stronger at 7.1%. The company’s business-to-business segments showed robust performance, while direct-to-consumer sales continued to decline.
As shown in the following revenue breakdown by region and category:
Business-to-business sales were the standout performers, with domestic B2B revenue increasing 29.9% to $21.5 million and international B2B revenue growing 22.9% to $32.0 million. Together, these B2B channels now represent 65% of Inogen’s total revenue, underscoring the company’s strategic pivot.
In contrast, direct-to-consumer domestic sales fell 26.8% to $15.0 million, continuing a trend observed in previous quarters. Rental revenue also declined by 7.5% to $13.8 million. These results align with the pattern seen in Q4 2024, where B2B channels showed strong growth while direct-to-consumer sales struggled.
Detailed Financial Analysis
Inogen made substantial progress in reducing its net loss and controlling operating expenses during the quarter. The company’s operating expenses and net loss figures show significant year-over-year improvement:
Total (EPA:TTEF) operating expenses decreased to $44.0 million from $50.6 million in the prior year period, with reductions across all categories. Research and development expenses saw the most dramatic decline, falling to $4.0 million from $6.6 million. Sales and marketing expenses also decreased significantly to $23.8 million from $26.9 million, while general and administrative expenses declined modestly to $16.2 million from $17.1 million.
These cost control measures, combined with revenue growth, helped Inogen narrow its loss from operations to $7.7 million, compared to $16.3 million in Q1 2024. The company’s net loss improved to $6.2 million from $14.6 million in the prior year period.
Perhaps most notably, Inogen achieved a positive adjusted EBITDA of $36,000 for the quarter, a remarkable improvement from the negative $7.6 million reported in Q1 2024:
This achievement represents a significant milestone in the company’s financial recovery and suggests that Inogen is making progress toward its stated goal of approaching adjusted EBITDA breakeven for the full year 2025, as mentioned in previous earnings guidance.
Strategic Initiatives & Business Model Shift
The Q1 2025 results reflect Inogen’s ongoing strategic shift toward business-to-business channels while working to stabilize its direct-to-consumer business. The company appears to be successfully executing its international expansion strategy, with B2B international sales now representing the largest revenue segment at 38.9% of total revenue.
The continued decline in direct-to-consumer sales remains a challenge, but the overall business model appears to be stabilizing as B2B growth more than offsets these declines. This aligns with statements made during the Q4 2024 earnings call, where management discussed expanding into new markets, including China, and enhancing digital health offerings.
Stock-based compensation, while not a primary focus, provides additional insight into Inogen’s operational priorities:
The reduction in stock-based compensation for research and development (from $460,000 to $95,000) and sales and marketing (from $430,000 to $214,000) aligns with the company’s overall cost reduction in these areas. Meanwhile, the increase in general and administrative stock-based compensation (from $1.35 million to $1.67 million) suggests continued investment in executive leadership and administrative functions.
Forward-Looking Statements
While the Q1 2025 presentation did not include explicit forward guidance, the results suggest Inogen is on track with its previously stated 2025 goals of achieving revenue between $352 million and $355 million (representing 5-6% growth) and approaching adjusted EBITDA breakeven.
The positive adjusted EBITDA in Q1 2025 is particularly encouraging, as it indicates the company may be ahead of schedule in its financial recovery. However, the continued decline in direct-to-consumer sales remains a concern that could impact overall growth if not addressed.
Inogen’s focus on respiratory care products, particularly portable oxygen concentrators, positions the company in a growing healthcare segment as the population ages. The company’s branding emphasizes its mission of "improving lives through respiratory care," as illustrated in its corporate imagery:
As Inogen continues to execute its turnaround strategy, investors will be watching closely to see if the company can maintain its improved financial performance while addressing the challenges in its direct-to-consumer business. The achievement of adjusted EBITDA breakeven in Q1 2025 represents a significant milestone that could signal a turning point in Inogen’s financial trajectory.
Full presentation:
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