Redwood City, Calif.-based Nevro, which makes the Senza spinal cord stimulation device, posted losses of -$14.7 million, or -50¢ per share, on sales of $68.4 million for the 3 months ended March 31. That represents a 54.4% widening of losses on sales growth of 64.3% compared with Q1 2016.
Analysts on Wall Street were looking for earnings of -26¢ on sales of $68.7 million. The results pushed NVRO shares down -13.4% to $74.73 apiece today in pre-market trading.
President & CEO Rami Elghandour said the revenue miss came down to “growing pains” as the company looks to expand its footprint in the pain management market.
“In the U.S. we saw strong growth from our most recent classes of hires to reach their 4th and 5th quarters in the field. However, our Q1 results were affected by greater-than-expected seasonality coupled with growing pains relating to scaling. Specifically, the expansion of our sales management team did not keep pace relative to the rapid growth rates we’ve experienced,” Elghandour said, according to a Seeking Alpha transcript. “Over the past 2 quarters we’ve added to our sales management team. With our expanded team we are resourced to maintain focused on our existing accounts as we scale. As always, we are focused on continuous improvement and will continue to strengthen and support our team. Our U.S. sales team has done a tremendous job of driving rapid market adoption and we remain confident in our team and our business both this year as well as over the long-term.”
Nevro added 39 U.S. reps during the quarter, taking the total to 232, he said.
The company affirmed its sales outlook for the rest of the year, saying it still expects to put up sales of $310 to $320 million.