SAN JOSE, CALIFORNIA — Eargo, Inc. (Nasdaq: EAR) has released its financial results for the fourth quarter of 2022, ending on December 31st, 2022. Eargo reported net revenues of $12.9 million, compared to $10.1 million for the same period in 2021 and $7.9 million in the third quarter of 2022. Gross systems shipped in the fourth quarter were 8,863, up from 7,767 in the previous year. Eargo also reported a GAAP operating loss of $23.9 million for the fourth quarter of 2022, compared to $45.2 million in 2021 and $26.0 million in the third quarter of 2022.
Eargo’s cash and cash equivalents were at $101.2 million as of December 31st, 2022, and its prior debt balance was fully extinguished following the closing of the rights offering in November 2022. Christian Gormsen, President and CEO, praised the company’s achievements in 2022: “We settled our DOJ investigation and cleared our SEC filing delinquency, recapitalized the business through a major financing, added Patient Square Capital as our majority shareholder, and made meaningful progress against our most important business priorities.”
Gormsen also highlighted the company’s launch of Eargo 7 in February 2023. He stated that the company had made significant progress in 2022 towards becoming a true omni-channel business.
“Perhaps most impactful to the future of Eargo was the progress we made on our strategic evolution into a true omni-channel business, led by our entry into the physical retail space through a partnership with Victra, one of America’s largest wireless retailers. Given the challenging circumstances, we believe Eargo has made significant progress in 2022, and we are excited about the continued evolution of our business in 2023.”
–Christian Gormsen, Eargo President & CEO
In the fourth quarter of 2022, Eargo shipped 8,863 hearing devices to its retail partner Victra, for in-person customer sales at its approximately 1,500 store locations across the United States. Eargo recognized revenue upon shipment to Victra.
Eargo also resumed accepting insurance benefits as a method of direct payment in certain limited circumstances, which resulted in revenue recognition.
Q4 2022 Results
Net revenue for the fourth quarter of 2022 was $12.9 million, an increase from $10.1 million in the previous year. Gross profit for the fourth quarter of 2022 was $6.2 million, compared to $2.4 million in the fourth quarter of 2021. Gross margin was 47.7% for the fourth quarter of 2022, compared with 24.0% in the same period in 2021. Total operating expenses were $30.0 million, or 232.6% of net revenues for the fourth quarter of 2022, compared with $47.6 million, or 473.6%, in the fourth quarter of 2021.
The decrease in total operating expenses was primarily due to a net decrease in headcount, lower stock-based compensation, lower media spend, and lower professional fees related to the DOJ investigation and compliance matters.
The company has decided not to provide commentary on its full-year 2022 financial results in its latest earnings release. The decision was made due to the challenging year-over-year comparison resulting from the impact of the DOJ investigation, and investors are advised to refer to the company’s Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, and other filings with the Securities and Exchange Commission for a detailed discussion of the results.
About Eargo
Eargo, Inc. is a medical device company that aims to improve hearing health. Their virtually invisible, rechargeable, completely-in-canal hearing aids are FDA-regulated and designed to address the challenges of traditional hearing aid adoption, including social stigma, accessibility, and cost. Eargo’s differentiated approach allows consumers to purchase their products online, at retail locations, or over the phone, and receive personalized consultation and support from hearing professionals via phone, text, email, or video chat. Eargo hearing aids are offered to consumers at approximately half the cost of competing hearing aids purchased through traditional channels in the United States. Their seventh-generation device, Eargo 7, is an FDA 510(k) cleared, self-fitting over-the-counter hearing aid that includes Sound Adjust+ with Comfort and Clarity Modes, which focuses on noise reduction and adapting to the user’s environment and needs.
Source: Eargo
