Eargo’s Q2 revenue slides amid decline in hearing-aid shipments – MedTech Dive

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By the numbers

 

Q2 net revenue: $7.25M

68% year-over-year decrease

 

Gross systems shipped: 4,455

Compared to 12,548 in the prior year period

 

Gross profit: $2.51M

85% year-over-year decrease

Eargo said it posted a second-quarter revenue drop of 68% after shipments of its hearing-aid devices declined.

CEO Christian Gormsen noted on an earnings call on Monday that the company expected volume drops and the negative financial comparisons to 2021 “clearly” reflected the company’s decision to no longer accept insurance as a form of direct payment. The company’s gross shipments slid to 4,455 in the quarter, compared to 12,548 in the year-earlier period.

Along with the move to no longer accept insurance, the company said in its earnings report that the revenue decline in the quarter was due to “a decrease in average selling price, and an increase in sales returns rate,” as the company operated on a cash-pay basis only in the three months ended June 30.

Eargo stopped accepting insurance as a direct payment in December amid an investigation by the U.S. Department of Justice. The DOJ alleged that Eargo submitted unsupported hearing loss-related diagnosis codes on reimbursement claims to the Federal Employees Health Benefits Program (FEHBP), the largest employer-sponsored insurance plan in the world.

The company settled with the DOJ for $34.37 million in April, while it didn’t admit any wrongdoing.

Gormsen told investors that regaining coverage for FEHBP will be a top priority, as well as increasing the company’s retail presence. Eargo is also awaiting a finalized rule from the Food and Drug Administration that would allow for hearing aids to be sold over the counter.

The CEO …….

Source: https://www.medtechdive.com/news/eargo-q2-2022-decline-hearing-aid-shipments/629162/