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#Thanks, <UNK>.
Good afternoon, and thank you for joining our first quarter 2018 conference call.
In what is historically a seasonally slower quarter, I'm very proud to say 2018 got off to a great start as we generated total revenue of $79.1 million in the first quarter.
Our record direct-to-consumer sales of $28.7 million in the first quarter of 2018 exceeded our expectations, primarily due to increased sales representative headcount and associated consumer spending.
We're currently ahead of schedule to meet our plan of hiring 240 Cleveland-based employees by 2020, with the majority of those being sales reps.
Given our recent success, our strategy is to steadily hire additional sales representatives throughout 2018 and continue to invest in marketing activities to increase consumer awareness as we believe that it's still our most effective means to drive growth of the direct-to-consumer sales.
In fact, we expect to release a new TV commercial to showcase the benefits of our portable oxygen concentrators in the second quarter.
Further, we initiated a direct-to-consumer pricing trial in the second quarter of 2018 to ensure our products are optimally priced.
We expect to provide an update on this trial on our next earnings call.
First quarter of 2018 domestic business-to-business sales of $28 million was a record for us and exceeded our expectations, primarily due to continued success with our private label partner and traditional home medical equipment providers.
While we are very proud of the success in the first quarter and remain optimistic within the domestic business-to-business channel, it is important to remember that this business can be lumpy quarter-to-quarter.
While we believe the conversion to nondelivery technology is underway, we think this will take 7 to 10 years due to the inherent challenges providers are facing both from an infrastructure and financial perspective.
While sizable South Korean unit orders in the first quarter of 2017 did not repeat in the first quarter of 2018, international revenue of $16.9 million was still strong versus the first quarter of 2017.
Despite the absence of major tender activity, growth was primarily due to continued adoption from our European partners and favorable currency rates.
We believe we remain the preferred provider of portable oxygen concentrators in Europe, and we expect to see long-term opportunity for growth ahead as the market transitions from tank and liquid oxygen systems to nondelivery solutions.
We are also proud of our operations team and supply chain for continuing to steadily increase output to meet our customers' demands.
We have signed a new lease in Richardson, Texas to expand our manufacturing and operations footprint by approximately 23,000 square feet.
Our current Texas manufacturing facility is approximately 37,000 square feet, so this additional space should provide for significant capacity expansion.
Transitioning to the subject of proposed 25% tariff on roughly 1,300 imported Chinese materials and products, we are currently evaluating the potential impact to our supply chain.
While aluminum and steel have received a sizable amount of attention with regards to proposed tariffs, there's no large quantity of either in our products.
We would also like to point out that the majority of aluminum in our product is sourced domestically, so we do not expect there would be a significant impact on our raw material costs associated with any tariffs on aluminum.
However, there are components in our products, such as lithium ion batteries and printed circuit board components, that are currently proposed to be subject to this tariff.
We will continue to monitor these proposals and economic policy changes and take the necessary steps to protect our financial interests and reduce our supply chain risk.
On the topic of competitive bidding around 2019, we have nothing new to report and await information from CMS on the next round of competitive bidding.
Also, we wanted to comment on the recent proposal by CMS to remove HCPCS code E1390 for stationary concentrators from the master list of potential medical devices subject to prior authorization requirements.
In short, there's no change to the actual billing practices based on this announcement, but this announcement confirms that code E1390 will not be subject to a prior authorization requirement given that reimbursement rates are under the $100 per month threshold.
Lastly, there's been no update on either H.
R.
4229 or the interim final rule that would provide retroactive reimbursement relief in noncompetitive bid areas.
Looking ahead, I'm very proud of our Inogen associates and the progress made in what has historically been a seasonally slower quarter.
While we've been engaged in multiple initiatives to fuel future growth, we've accelerated current growth, especially in the domestic direct-to-consumer and business-to-business sales channels.
I'm very pleased with the increased adoption in these markets with our best-in-class and patient-preferred products.
Looking at 2018, we're increasing our full year revenue guidance range to $310 million to $320 million, up from $298 million to $308 million and expect to continue to invest heavily in our sales force, marketing efforts and operations in order to drive portable oxygen concentrator adoption worldwide.
With that, I will now turn the call over to our CFO, Ali <UNK>.
Ali.
Thanks, <UNK>, and good afternoon, everyone.
During my prepared remarks, I will review our first quarter of 2018 financial performance and then provide details on our increased 2018 guidance.
As <UNK> noted, total revenue for the first quarter of 2018 was $79.1 million, representing 50.6% growth over the first quarter of 2017.
Looking at each of our revenue streams and turning first to our sales revenue.
Total sales revenue of $73.6 million represented 93.1% of total revenue in the first quarter of 2018 and reflected 60.1% growth over the same quarter of the prior year.
Total units sold increased to 45,400 in Q1 2018, up 77.3% from 25,600 in Q1 2017.
Direct-to-consumer sales for the first quarter of 2018 were a record $28.7 million, representing 67.8% growth over the first quarter of 2017, primarily due to increased sales representative headcount and increased marketing expenditures.
Record domestic business-to-business sales of $28 million in Q1 2018 reflected 60.4% growth over Q1 2017, with strong demand from our private label partner and traditional HME providers as more and more providers are adopting portable oxygen concentrators instead of tanks to service their oxygen patients.
International business-to-business sales of $16.9 million in Q1 2018 increased 48% from Q1 2017 and was driven mostly by strong European volume and favorable currency rates.
We are proud of this result, especially since the first quarter of 2017 included sizable unit orders from South Korea that did not repeat in the first quarter of 2018.
Sales in Europe represented 89.5% of international sales in the first quarter of 2018, up from 73.2% in the first quarter of 2017.
Average business-to-business selling prices declined over the same period in the prior year, primarily due to mix related to increased volume from our private label partners and secondarily associated with pricing discounts associated with increased volumes worldwide.
Rental revenue represented 6.9% of total revenue in the first quarter of 2018 versus 12.4% in the first quarter of 2017.
Rental revenue in the first quarter of 2018 was $5.5 million compared to $6.5 million in the first quarter of 2017, representing a decline of 16.3% from the same period in the prior year, primarily due to our continued focus on direct-to-consumer sales versus rentals and a $0.2 million Cures Act benefit in the first quarter of 2017 that did not repeat in the first quarter of 2018.
Rental revenue in the first quarter of 2018 was flat sequentially versus rental revenue in the fourth quarter of 2017.
We note that the first quarter of 2018 represents our most difficult comparable in 2018 given the $0.2 million Cures Act benefit received in the first quarter of 2017, representing a rental revenue headwind of 2.6% in the first quarter of 2018.
Further, net rental patients on service declined 9.2% compared to the first quarter of 2017.
Lastly, rental revenue was negatively impacted by the 1.2% decline in Medicare reimbursement rates for stationary oxygen in noncompetitive bid areas, effective January 1, 2018, due to the updated Medicare fee schedule.
Turning to gross margin.
For the first quarter of 2018, total gross margin was 47.7% compared to 49% in the first quarter of 2017.
The decrease in total gross margin was primarily due to lower sales revenue per unit sold and lower rental gross margin, which was partially offset by lower average cost of sales revenue per unit.
Our sales gross margin was 49.8% in the first quarter of 2018 versus 52.3% in the first quarter of 2017.
The sales gross margin decline was due to a lower consolidated average selling price in the business-to-business channels due to increased sales volume to our private label partner and traditional home medical equipment providers, but was partially offset by increased mix towards direct-to-consumer sales and lower cost of sales revenue.
Rental gross margin was 20% in the first quarter of 2018 versus 25.9% in the first quarter of 2017.
The decrease in rental gross margin was primarily due to the $0.2 million Cures Act benefit received in the first quarter of 2017, which lifted rental margins by 2.3% in that quarter and increased logistics costs in the first quarter of 2018, partially offset by lower depreciation costs.
As for operating expense, total operating expense increased to $29 million in the first quarter of 2018 or 36.7% of revenue versus $20.2 million or 38.4% of revenue in the first quarter of 2017.
We are proud of this operating expense leverage we are showing in spite of the significant investments being made in our sales and marketing infrastructure.
Research and development expense was $1.4 million in the first quarter of 2018 compared to $1.3 million recorded in the first quarter of 2017, primarily due to increased personnel-related expenses.
Sales and marketing expense increased to $18 million in the first quarter of 2018 versus $10.5 million in the comparative period in 2017, primarily due to increased personnel-related expenses as we continued to hire inside sales representatives at our Cleveland facility in addition to increased advertising expenditures.
In the first quarter of 2018, we spent $4.8 million in advertising as compared to $2 million in Q1 2017.
General and administrative expense increased to $9.6 million in the first quarter of 2018 versus $8.3 million in the first quarter of 2017, primarily due to increased personnel-related expenses, but partially offset by a decrease in patent defense costs.
In the first quarter of 2018, we reported an income tax benefit of $1.1 million, up from a $0.1 million benefit in the first quarter of 2017.
Our income tax benefit in the first quarter of 2018 included a $3.3 million decrease in provision for income taxes related to excess tax benefits recognized from stock-based compensation compared to $2.2 million in the first quarter of 2017.
Excluding the stock-based compensation benefit, our non-GAAP effective tax rate in the first quarter of 2018 was 22.5% versus 36.7% in the first quarter of 2017, primarily due to the impact of U.S. federal tax reform.
In the first quarter of 2018, we've reported net income of $10.8 million compared to net income of $5.9 million in the first quarter of 2017.
Earnings per diluted common share was $0.48 in the first quarter of 2018 versus $0.27 in the first quarter of 2017, an increase of 77.8%.
Adjusted EBITDA for the first quarter of 2018 was $15.5 million, which represented a 19.6% return on revenue.
Adjusted EBITDA increased 42.7% in the first quarter of 2018 versus the first quarter of 2017 where adjusted EBITDA was $10.9 million or a 20.7% return on revenue.
Cash, cash equivalents and marketable securities were $188.3 million, an increase of $14.4 million compared to $173.9 million as of December 31, 2017.
Turning to guidance.
We are increasing our full year 2018 guidance range for total revenue to $310 million to $320 million, up from $298 million to $308 million, representing growth of 24.3% to 28.3% versus 2017 full year results.
We expect direct-to-consumer sales to be our fastest-growing channel, domestic business-to-business sales to have a significant growth rate and international business-to-business sales to have a modest growth rate, where the strategy will still be focused on the European market.
We now expect rental revenue to be down approximately 10% in 2018 compared to 2017 due to our continued focus on sales versus rental.
As stated previously, the only known changes to Medicare reimbursement rates in 2018 are a roughly 1.2% decline in monthly stationary rates in noncompetitive bidding areas due to the fee schedule adjustment.
Additionally, we are increasing our full year 2018 GAAP net income and non-GAAP net income guidance range to $38 million to $41 million, up from $36 million to $39 million, representing growth of 80.9% to 95.2% compared to 2017's GAAP net income of $21 million and growth of 33% to 43.5% compared to 2017 non-GAAP net income of $28.6 million.
We are also increasing our guidance range for full year 2018 adjusted EBITDA to $62 million to $67 million, up from $60 million to $64 million, representing growth of 22% to 31.8% versus 2017 full year results.
We still estimate that the decrease in provision for income taxes related to excess tax benefits recognized from stock-based compensation will lead to a decrease in provision for income taxes of approximately $8 million in 2018 based on forecasted stock activity, which would further lower our effective tax rate as compared to the U.S. statutory rate.
Excluding the benefit from the estimated $8 million decrease in provision for income taxes expected in 2018 from stock-based compensation deduction, we expect a non-GAAP effective tax rate of approximately 25%.
We expect our effective tax rate, including stock compensation deductions, to vary quarter-to-quarter depending on the amount of pretax net income and on the timing and size of stock option exercises.
Lastly, we expect net positive cash flow for 2018 with no additional equity capital required to meet our current operating plan.
With that, <UNK> and I will be happy to take the questions.
Yes.
Robbie, it's <UNK>.
I'll take that one.
On the B2B front, we had commented middle of last year that while a lot of the B2B players said they were trialing POCs, we said, look, they've gone down the path far enough and enough of a track record that we felt like really a conversion was underway, even if some players didn't even realize they were converting.
You can only call it a trial so long.
I think that's exactly what we're seeing.
The reimbursement pressure on providers continues to force that conversion.
We saw providers, again, and I've made this comment in the past, but it was true this time around of really all shapes and sizes continue to increase their purchases.
So we continue to have some confidence that the conversion is underway.
And as I've said in the past, too, if you do the math and you say this is a 7- to 10-year conversion cycle, then the rate of adoption has to increase somewhere along that time line or you just don't get there in 7 to 10 years.
So we are seeing the volumes pick up.
We're seeing a few new players to the game, the same old players buying a little bit more.
It's good news.
What we like is that it's fairly well diversified across the customers.
So we're pleased, but there's no real secret or aha other than that people are progressing down that curve to convert their business.
Now as I said in my opening remarks, it's still going to be lumpy in their starts and stops.
There's inherent barriers and hurdles for the B2B community to convert their business and some run into cash flow issues during a conversion or they hit a credit crunch, so we expect this will continue to be lumpy.
We're pleased with what we saw, but we continue to be cautious about our expectations because we don't want to be left holding the bag.
So I think you'll see us continue to be a little on the cautious side in our estimate, but we do feel there's a conversion taking place.
Now on the direct-to-consumer side, the results are driven by our increased hiring.
I mentioned that the hiring in Cleveland is going, I'll say, not according to plan, but ahead of plan.
We found that it's a great market.
We're very pleased with the talent that we're finding there.
So it has allowed us to hire.
If you were to compare our 3-year plan, we're ahead of that plan, if you look at it on a linear basis.
And we hired pretty heavily at the end of last year.
Those people are now contributing.
As you go into the first quarter, you've got ---+ the very first people we hired actually are seasoned reps or at the end of curve.
The people hired at the very end of the year are still relatively new in the first quarter, but they climbed that curve.
So primarily, the results are based on our hiring increase.
There's some productivity improvement in there.
But if you looked at the contribution of productivity versus headcount and sales capacity, sales capacity is the bigger driver.
Yes, sure.
As we've said before and as <UNK> just said, we don't want to get ahead of this market conversion.
And we know that there are underlying fundamentals that make it difficult for the B2B community to continue to adopt POCs.
And because of that, we just want to make sure that we're cautious with the guidance that we put out there on the B2B side of the business.
International, obviously, is a lumpy business.
Q4 was pretty weak for us.
And Q1, obviously, rebounded quite nicely.
But just given the fact that, that business can be driven by tenders and the timing of purchases, again, we don't want to get out ahead of the ---+ our European partners and their use of POCs.
Obviously, there was an additional headwind on the rental side of the business.
As we've continued to focus the team on cash sales, you'll see ---+ we do expect rentals to now decline, so we did factor that into the guidance as well.
And the direct-to-consumer sales, obviously, was a fantastic start to the year, and we feel great about how that segment has been performing.
But again, it's down to how many people can we hire, particularly in Cleveland where the majority of the growth is coming, and making sure that we put out achievable guidance.
Margaret, it's <UNK>.
I'll take that one.
We've always measured the curve on our new sales reps, and we've said it's about a 4- to 6-month time frame for them to get to the end-of-curve steady state.
In all of the locations where we hired new classes, we measure against that curve.
So all the reps that we hired in a given class, their first month we measure against what would be the normal month 1, month 2, 3, 4, et cetera.
So you have pretty good data around that.
I'm pleased to say the folks in Cleveland are at or a little better than the historical curve.
I've also said in the past couple of calls, we've invested pretty heavily in training, which has helped us to improve that onboarding curve a little bit.
So certainly, we're at least at par, if not, a little better, on that 4- to 6-month end-of-curve journey.
Now your second question on the second quarter, you do have to remember that the comps in the second quarter are a little tougher than the first quarter comps.
So that's kind of where we landed where we did.
That's with respect to looking at the baseline, and not all baselines are equal.
So hopefully that makes sense to you.
Yes.
Just to expand on that a little bit.
I mean, particularly in the back half of 2017, we saw accelerating growth on that direct-to-consumer sales line, and we ended the year with fourth quarter of 2017 being up almost 58% compared to the fourth quarter of 2016.
So the comps do get tougher for us throughout the year versus our traditional seasonality where the second and the third quarter are tougher.
So the first quarter was certainly the easiest comp for us on the direct-to-consumer sales channels, where growth in the previous year was only of about 28%.
Yes.
Margaret, we actually have always run our direct-to-consumer commercials.
So that's no different.
We are going to launch a new version of the commercial in the second quarter of this year.
But we've been running our own ---+ we tweak them to refresh them.
Sometimes, you can wear out a commercial.
So throughout our past, really, 10-year history, we've always refreshed the commercial every so often just to keep it different, just like we run some different stations and different programming from time to time to keep it fresh.
But that's really what we've done, and we'll continue to do that.
But you should see a new commercial here before the end of the second quarter.
That's what the plan is right now, and that's all done by us.
Well, the spend will continue to ramp as we hire new people.
So we've always kind of matched our spend to our sales capacity.
So as we hire more reps, you've got to have more leads or else you choke the reps off and starve them.
So that goes back to that, remember, market penetration, our best estimate if we use the freshest Medicare data is in that roughly 10% range, so being a long way from saturation.
We've shown that we can continue to add sales capacity and continue to increase the spend to drive more leads and keep those new sales reps fully loaded.
So we'll continue to do that.
You'll see the spend increase as we hire reps.
And as an aside, newer reps tend to chew up even more leads.
They don't really have a pipeline, so they've got to generate a pipeline.
So an existing rep in any given month, they may work X number of kind of leads that are already in their bucket and then Y number of new leads.
Brand-new reps that come onboard, it's all new leads, so you have to load them up, and the spend tends to be a little higher to feed them until they get to steady state.
And just to clarify on the cost side.
The cost of the commercial development gets capitalized, and then it will be amortized over the expected life of the commercial.
Yes.
If you look at historical POC growth, and again, we've used the Medicare data to estimate that, the annual POC growth has been in the high teens.
So while I don't have any newer data, I'm using the same ---+ the freshest data is 2016.
I think with the growth rates that we saw, that certainly should be higher than the market growth rate.
So it would lead you to conclude that we have strengthened our share position in the quarter.
Yes.
So I'll take that one, <UNK>.
And certainly, as we've seen over time, we do have pricing pressure, particularly on the B2B side of the business.
We expect that to continue with volume increases throughout 2018, so that is factored into guidance as it has been previously.
And it really will come down to what level of volume increase are we're seeing to justify the ASP declines that we expect in those areas.
When we look at it, really, I mean, it just comes down to this market is ---+ we do believe that they are in a conversion process.
However, we do think that we don't want to get out ahead of that, and we want to make sure that our guidance is very achievable.
On the direct-to-consumer side, certainly, we're continuing to invest in the sales force and continuing to grow that team.
We still expect 2018 to be an investment year for us.
And how the investments have performed so far in expanding the sales team, that has performed very nicely.
I just want to point you again to the fact that throughout the year, our comps get harder on the direct-to-consumer side of the business.
And that's against the normal seasonality that we see in the business.
So looking at Q2 versus Q3 and Q4, Q2 is an easier comp for us on the direct-to-consumer side than Q3 or Q4 versus our typical seasonality in the business.
So certainly, I think that all of those things should be factored into guidance and particularly on the direct-to-consumer side of the business.
Yes.
So when you look at that, while certainly B2B has a lower gross margin profile, it also has much lower operating expenses associated with it.
So when we look at the market opportunity, we look to capture share both on the B2B side and the direct-to-consumer side because we're relatively agnostic on the bottom line.
What we have been doing, though, is continuing to invest in the B2C side because we're still very early in the market penetration curve.
As <UNK> said earlier, 9% or so penetration in the last data as of the end of 2016, we still have a long ---+ we have a long ramp to go to continue to take share both on the direct-to-consumer side as well as the business-to-business side away from the tank-based business model.
So our focus really is to make sure that we maintain a market leadership position and that we continue to grow the market both on direct-to-consumer side and the B2B side and not to drive a specific mix in our business.
Now inherent in guidance in 2018 is that direct-to-consumer sales would be the fastest-growing channel.
So that would actually be a tailwind to gross margin expansion over the course of the year.
Yes.
Mike, it's <UNK>.
I'll take that one.
If you recall, last year, we engaged Foxconn as the manufacturing partner.
So they're now producing our G3 product for European demand.
And what that did is it offloaded considerable demand from our domestic facility in Richardson, Texas.
So that immediately freed up capacity at that site.
And then, as I mentioned in the opening, we have signed an additional lease for 23,000 square feet increased footprint.
It's in Richardson, Texas as well, just around the corner from our current site.
So that gives us significant space for expansion.
So certainly, over the next at least a couple of few years, I'll say, we're in pretty good shape from a capacity standpoint.
It is relatively easy for us to expand our capacity, probably more of a challenge if anything on the supply chain side, not on the footprint side for manufacturing.
The manufacturing sales are relatively easy to replicate, and we've done a good job with our ops team of driving productivity increases year-over-year to increase our capacity as well.
But the real work that you don't see is on the supply chain side, and we've got a team all over that because we don't want to miss the opportunity if the market accelerates and grow.
And as I said, estimating a 7- to 10-year conversion, mathematically, if it does ---+ if you do see that come to fruition, then there would be an adoption acceleration.
So we're prepared for that, and that's why we watch it so closely.
So when you look at the sales gross margin for the direct-to-consumer side of the business, ASP has been relatively flat year-over-year.
So they're actually ---+ with COGS coming down, you see a slight expansion of that gross margin over time because your ASP is flat.
Now remember, we are doing a pricing trial in the second quarter in the direct-to-consumer channel.
So that will determine what's the optimal price for us going forward.
But just looking at the first quarter, certainly, that direct-to-consumer sales gross margin performed nicely with COGS coming down overall and ASP being relatively flat.
When we look at the B2B side, there is always mix even within B2B depending on the customers that buy.
Obviously, our distributor, our private label partner has lower prices in order for them to sell on to the HME community, so mix between them and also other large HME providers versus the smaller HME providers that buy smaller quantities and as a result have higher prices.
Mix within that also is a contributing factor.
So when we outlined those impacts, the first was just mix within the customer and then secondarily was overall price declines associated with the volume increases.
No.
There were no onetime orders like, for example, the South Korean order that we had in the first quarter of 2017.
There was no large international orders like that where it was a new country.
And certainly, we saw providers continuing to adopt worldwide, but there's nothing that we would call onetime in nature or driven by a specific tender or a new market opportunity.
I wanted to start, first, just more broadly on pricing and how you think about that strategically going forward.
<UNK> or Ali, do you feel that there is a real opportunity to accelerate the market growth from a volume standpoint if you do take maybe a broader price cut.
Or are you more or less looking at the DTC side that maybe you deserve a premium given all the brand that you guys have built in the market.
Yes.
One of ---+ as I've said, the biggest barriers to conversion is really the fixed infrastructure that's already in place with the providers that have driven a delivery model since really their existence.
You've got to ---+ to make this nondelivery model work, you've got to face the delivery structure out.
And that takes time and it takes money.
So reducing prices really doesn't help grease the skids.
The other issue, as I mentioned, is just credit line.
So people run into credit and cash flow constraints.
I suppose you could argue that a little price reduction helps that a little bit, but you can't reduce the price enough that it makes that go away.
So no, I don't see reducing prices would significantly increase the adoption in the HME community.
Okay.
And then my second question was just on international.
I think from what I heard is there is no real big tenders.
You didn't have the South Korean order.
It was just a broad-based strong quarter from just kind of your ---+ chugging along.
So is there ---+ so why haven't we ---+ why can't we call an inflection there.
Has your visibility gotten better now that you have more of a direct presence with Foxconn and your ---+ and the distributor you bought there last year.
Do you have better visibility there.
Or is there any reason that you can point to, to call out that acceleration.
Yes.
In the European market ---+ really, international overall, we should just look at it as one bucket.
It is the channel where we are still the farthest from the end users.
So we have limited visibility.
It's not a lot better than it's been in the past.
Really, Foxconn doesn't give us any better visibility just by shipping from one point versus Texas.
It does improve our service significantly.
And the customers are extremely happy with what we've done with Foxconn, but it doesn't improve our visibility.
European markets are very fragmented.
You've got different reimbursement in every country.
Some countries are tender driven; some are not.
And that's why we've said the international sales are what we would call the lumpiest and most unpredictable bucket of all.
We had a quarter ---+ end of the year that things were a little slow.
And then this quarter, they jumped ahead.
If you look at it, on the average, it kind of levels out.
But that's why we're always very careful about making predictions on a market like that where we know inherently that sales are less predictable than anywhere else.
I'd like to close with a few comments on our strategy for 2018.
We expect to continue to seek ways to accelerate the global adoption of portable oxygen concentrators.
We're supporting providers worldwide to convert to a nondelivery model, increasing our direct-to-consumer investments in the United States and pursuing product registration in new and emerging markets.
At the same time, we're still focused on developing innovative oxygen concentrators to stay at the forefront of patient preference and further reduce our product costs as we gain additional scale.
We're excited about the future of oxygen therapy where we see portable oxygen concentrators continuing to grow and becoming the standard of care for ambulatory patients in the next 7 to 10 years.
Thank you for your interest in Inogen.
