Vapotherm (VAPO) Misses Q4 EPS by 13c, Revenues Beat; Offers 1Q Revenue Guidance Below Consensus

February 24, 2021 4:46 PM EST

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Vapotherm (NYSE: VAPO) reported Q4 EPS of ($0.67), $0.13 worse than the analyst estimate of ($0.54). Revenue for the quarter came in at $40.9 million versus the consensus estimate of $37.18 million.

Fourth Quarter 2020 Summary

  • Net revenue for the fourth quarter of 2020 was $40.9 million, representing a 214.4% increase over the prior year period
  • Gross margin was 50.6% in comparison to gross margin of 45.1% in the fourth quarter of 2019

“We are pleased with our progress in 2020, which has positioned us well for continued long-term growth beyond the COVID pandemic. During 2020, we saw increased worldwide awareness of High Velocity Therapy, significant growth in the number of new ED Gold and Silver accounts in the U.S., and 72.8% growth in our worldwide installed base of Precision Flow systems,” said Joe Army, President and CEO of Vapotherm. “In 2021, we will focus on educating our Customers on how to use High Velocity Therapy for Patients experiencing Type II respiratory distress, increasing our worldwide installed base, and launching new products worldwide.”


Vapotherm sees Q1 2021 revenue of $82-88 million, versus the consensus of $89.76 million.

COVID-19 has driven dramatic increases in our installed base and awareness of the benefits our technology, which will enable us to produce long-term growth post pandemic. Due to the significant and rapid changes in COVID-19 related hospitalizations, forecasting the demand for both our capital and disposables in the near term remains challenging. From an overall business standpoint, we are addressing this variability by positioning ourselves to respond quickly to changes in demand. This was a significant focus during 2020, and we believe we are positioned well to respond quickly to COVID-19 driven increases or decreases in demand. From a financial outlook standpoint, we are providing a range of outcomes based on a set of assumptions derived from the best information available to us at this time.

To start 2021, we saw near peak COVID-19 related hospitalizations across the U.S. and Europe resulting in demand for our capital and disposables at levels we experienced in late 2020. Beginning in mid-January of 2021, we saw a decrease in U.S. hospitalizations from the peak experienced in early January and reduced COVID-19 related demand for our products. In addition, we have not seen meaningful flu related cases or hospitalizations in the U.S. quarter to date which is a trend we expect to continue throughout 2021. Typically, U.S. disposable utilization rates are the highest in the first quarter each year due to the impact of the flu.

Beginning in the second quarter of 2021, we expect that there will be very limited budget dollars available for capital equipment and, as a result, we expect capital sales to decrease significantly year over year given the COVID-19 driven demand we experienced in 2020. In addition, our current expectations are that vaccination efforts will be successful and will result in a declining number of COVID-19 cases and hospitalizations over the last three quarters of the year thereby reducing COVID-19 related demand for our disposables as well. Despite this, we expect that disposables will show year over year growth in the U.S due to an increased installed base and greater awareness of our ability to treat the symptoms of respiratory distress in all patients, including those in Type II respiratory distress. Lastly, given the significant expected year over year decrease in sales and production volumes, especially related to capital equipment, we expect gross margins to decrease in 2021 before improving again in 2022 to levels above 2020.

For fiscal 2021, we expect revenue in the range of $82 million to $88 million, which represents a two-year compound annual growth rate of 33% at the mid-point of this range.

For the first quarter of 2021, we expect revenue in the range of $30 million to $33 million.

For fiscal 2021, we expect gross margin to be in the range of 46% and 48%.

For fiscal 2021, we expect operating expenses to be in the range of $97 million to $99 million.

We are still in a highly dynamic environment given the impact of COVID-19 and should our expectations regarding COVID-19 or other aspects of our operating results not play out as anticipated, it could result in materially different financial results than what we are currently expecting.

For earnings history and earnings-related data on Vapotherm (VAPO) click here.

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