Inogen, Inc

for us. There is an existing population of tanks in Brazil, as well as POCs. There's other POCs that are in the market. So we're not the first entrant that is in there, but we are entering in, of course, as the premium brand in Brazil. We have partnerships with local HMEs that exist also in other markets who are familiar with us and know how to position the Inogen brand. We're looking forward to the growth coming out of there, but this is one that will continue to develop over time with market access.

Okay, got it. And then net rental patients at the end of the first quarter had a steeper decline than the recent trends. Could you walk us through what drove the acceleration this quarter and how we should be thinking about this channel through the remainder of the year?

Yeah, when we look at the rental program, we talked about, and I'm going to bucket this first if we step back, and you think about the dynamics that are happening within the markets that we have been planning for and strategizing and optimizing the channels. But the shift that we see from within the U.S., which is where, of course, rental is, from the oxygen tanks to the POCs, It has an impact on both the headwind on the DTC as well as the rental patients, which is also creating that tailwind for us within the B2B channels. It allows us to have additional pull-through with other technology, the products with the Aurora masks, the Voxy 5, and eventually the Semiox. But that is one that is still under pressure as we go through the year. We do expect to see total U.S. back end of the year growth, which certainly we can talk through, but we'll see that pressure continue within the rental channel.

Okay, got it. And then how is early 2026 VOC C5, how's the ramp tracking against your expectations? Are you beginning to see pull-through benefits with HMEs that are bundling VOC C5 alongside the POC?

Yeah, we are. We like the signs that we're seeing so far in the market. The feedback has been very good. We are seeing pull-through and attachment rates. So this is lining up with our expectations and supports the view that we have for this in the long term.

Okay, got it. Thank you for taking our questions.

Thanks, Anderson.

And next we'll move to Mike Mattson with Needham & Company.

Yeah, thanks for taking my questions. I guess I'll start with a couple macro ones. So just wanted to get your take on the impact of kind of the elevated oil prices that we're seeing, any material impact expected there. And then I wanted to see if you have any sales into the Middle East. I know you're selling in Europe, but I didn't know if that included the Middle East. Um, and you know, if so, like how, you know, how significant is that?

Hey, Mike, uh, yeah. Thank you for the question again. I'll start and then Jason, if there's anything to add, please, uh, please do from the, from the macro level with the impact on the oil, you know, we're not seeing anything for ourselves that is, uh, that is outsized from the rest of the industry. You know, there are some implications, certainly with surcharges that happen with logistics. It's less of an impact for us than perhaps some others. We don't, if this carries on, you know, we may start to see more impact as the year goes through. But today, it's not a significant piece. When you also look at petroleum-based components and products, we think about resin material. We do have some of the material within our POCs. However, we do have supply agreements in place that protect us in the near term. We wouldn't expect to see an impact there unless this does carry on for beyond within a quarter. It's not a big deal if we start seeing this carry on throughout the year. We may see additional impact from that. And then to the business in the Middle East, we do have business in the Middle East. The majority of our international business is still coming from the European markets. We are not impacted by this yet. We have been focused on making sure that we can continue to serve our patients, make sure that our team and partners are safe, which they all are. But so far, this hasn't been a negative impact. Jason, anything else there?

No, I think that's right. And I think we've even scenarioed kind of current prices from an oil standpoint. We feel like even because of the timing that Kevin mentioned, because of the limited freight that we have, you know, that we'd be able to, we would expect to be able to offset it at current levels for 2026.

Okay, got it. And then wondering if you could give us an update on the CPAP mask launch, you know, how is that going and, you know, what kind of feedback are you getting from customers?

Yeah, Mike, it's been very good for us. It's meeting and exceeding the expectations. And of course, it is the early stages, introducing the Aurora masks to the market. Fortunately, we're able to come to the market with clinical data that supports patient preference and the quality of the mask that gives us a leg up as far as early adoption. But one of the things that we've liked so far is extremely high reorder rates from the customers that have started the process with Aurora, take the samples, start to get patients on them, place an order. We've seen those reorder rates coming in on a monthly basis at a very high level. So that tells us that it's sticky, and this is a good signal for us.

Okay, got it. And then, you know, just looking at your adjusted net loss, if I'm remembering correctly, when I glance at the press release, but a lot of companies are poor tonight, but I think it was flat to maybe even down from, from last year on an adjusted basis. Um, I know EBITDA was, was not the same, but, you know, can you maybe just talk about what's, what's happening there and what, you know, why weren't getting more kind of leverage, I guess, or, or cost savings from a, you know, OPEX perspective or whatever.

Yeah, I'll take that one. I mean, I think what first quarter in particular, we accelerated some of our clinical evidence investments, particularly around Semiox. And we also had moved forward the timing of some advertising spend to try to generate some additional business over the back half of the year. But, you know, as we've mentioned before, we're managing OPEX to kind of make sure that we end up in a position of growing EBITDA over the course of the year.

Okay, got it. And then the advertising... Yeah, go ahead. Sorry.

No, I was going to say the other thing I would highlight, though, is like we talked about in the prepared works, which is the gross margin expansion, which I think is really critical for us as we think about some of the mixed pressures we see in the market. I think some of the other levers that we're pulling to improve margins, leverage, the volume that we're seeing are really important to us moving forward.

Okay. Got it. The advertising spending that you mentioned, is that geared at the consumer business or is that geared at like the B2B side of things?

Yeah, the advertising spend is geared historically more towards the direct-to-consumer business, although it does benefit broadly across all of the markets, creating brand awareness. However, we have been revising that strategy, the channels, how we do that marketing. And broadening that out to include both the HCPs, the HMEs. This is now a much more sophisticated marketing project going forward. And that's one of the benefits, too, that when we added Dominic here to the team, he brings a lot of that expertise and that savviness to the team here.

Okay. Got it. Thank you.

Thanks, Mike.

And there are no further questions at this time. I would like to turn the floor back to Kevin Smith for closing remarks.

So before we wrap up, I want to highlight one core theme that underpins our strategy, innovation, which is the engine driving our future growth. Early feedback on our new products, Aurora, Voxy, Semiox, it's all been positive. Confirming these innovations address key market needs. This progress stems from strategic investments in our pipeline, and we aim to launch one new product per year as part of our long-term plan. These efforts strengthen our position for broader reach and sustained growth. While we are still early in this journey, the momentum we are building today gives us real confidence and excitement about what lies ahead. And I would also like to formally recognize and express my gratitude to the entire Inogen team. Your dedication to patient care, consistent execution, and collective contributions has been essential to our ongoing transformation. I value the energy and commitments you bring every day, and I'm proud of what we've built together. Thank you.

Thank you. This does conclude today's teleconference. We thank you for your participation. You may disconnect your lines at this time.