Nevro Corp. (NYSE:NVRO) Q2 2020 Earnings Conference Call - Final Transcript

Aug 05, 2020 • 04:30 pm ET


Nevro Corp. (NYSE:NVRO) Q2 2020 Earnings Conference Call - Final Transcript


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Good afternoon, and welcome to Nevro's Second Quarter 2020 Conference Call.

I'd now like to introduce Juliet Cunningham, Nevro's Vice President of Investor Relations. Please go ahead, Ms. Cunningham.

Juliet Cunningham

Good afternoon, and thank you. Welcome to Nevro's Second Quarter 2020 Earnings Conference Call. With me today are Keith Grossman, Chairman, CEO and President; and Rod MacLeod, Chief Financial Officer. The format of our call today will be a discussion of second quarter trends and business results from Keith, followed by detailed financials from Rod and then we'll open up for questions. Earlier today, Nevro released its financial results for the second quarter, which ended June 30, 2020. A copy of our earnings press release is available on our Investor Relations website. This call is being broadcast live over the Internet to all interested parties on August 5, 2020, and an archived copy of this webcast will be available on our Investor Relations website.

Before we begin, I'd like to remind everyone that comments made on today's call may include forward-looking statements within the meaning of federal securities laws. Our actual results could differ materially from those expressed or implied as a result of certain risks and uncertainties. Please refer to our SEC filings, including our Form 10-Q to be filed later today for a detailed presentation of risks. In addition, we'll refer to adjusted EBITDA, which is a non-GAAP measure, that is used to help investors understand Nevro's ongoing business performance. Please refer to the GAAP to non-GAAP reconciliation table, including in our earnings press release.

And now I'd like to hand over to Keith.

Keith Grossman

Thank you, Juliet. Good afternoon, everyone. Thanks for joining us today. Today, we reported second quarter 2020 worldwide revenue of $56.4 million, which, while below prior year, is significantly above our initial COVID-adjusted expectations as well as those of our analyst consensus estimates. As I said on our last earnings call in early May, we expected the second quarter to be extremely challenging, given the global pandemic. At the beginning of the quarter, many areas of the world were under shelter-in-place restrictions and elective surgery procedures were, of course, severely restricted. This led to a rapid and steep decline in our business, particularly in the month of April. As the quarter progressed, however, we were pleasantly surprised by the pace of improvements in U.S. trials, permanent implant procedures and sales. In fact, in the month of June, we returned to procedure volumes in the U.S. that were roughly even with June of the prior year, and this pace of recovery has continued in the month of July.

Also, as expected, international volumes during the second quarter of 2020 were severely impacted with OUS revenue decreasing by 65% year-over-year on a constant currency basis. We continue to believe that international markets, particularly the U.K. and Australia, are likely to recover at a more uneven pace compared to the U.S., but we have seen some encouraging early signs of recovery in July. SCS procedures are performed, as most