Conference Transcript - INGN 2026-04-14

Mike Madsen, Analyst — Needham and Company LLC

Good morning. Thanks for joining us again at the 25th Annual Needham Healthcare Conference. I'm Mike Madsen, and I lead the MedTech and Diagnostics Equity Research Team at Needham and Company. I'm pleased to introduce Inogen. Presenting from the company today, we have President and CEO Kevin Smith and CFO Jason Richardson. Instead of a standard presentation, we are going to do a Q&A or fireside session. If you have any questions you'd like to ask, you can submit them electronically through the Needham Conference website or feel free to email them to me at mmadson at mediumco.com, and I will do my best to fit them in. So Jason, Kevin, again, thanks for joining us. Jason, I'd like to start with you since you're new to the company. I think this is probably your first time speaking publicly at Ingen. So can you give us a quick introduction to yourself and your background and why you chose to join Ingen?

Jason Richardson, CFO

Yeah, of course. And thanks, Mike. for having us and i first say that i'm excited to be part of the indigent team so as far as my background and experience i've spent 25 years professionally in and around the medtech industry working mostly for larger global medtech organizations and i'd say in the last 12 years have been in various leadership roles within those organizations from segment cfos to chief accounting officer treasurer uh ceo staff and i've also been on a on a handful of boards most of that time was with hilrom which i think you're familiar with um i was i actually was with hilrom kind of from its inception as a public company to when it was acquired by baxter um and kate played some key roles in uh really hilrom having some really nice growth over that time period both organic and inorganic and ultimately was uh able to double over my tenure there uh and and i think the last three years uh i've been really three plus years been at baxter um and most recently as the cfo of the health systems and technology segment and i think you know a big part of the reason i went to baxter was uh to get more deeply into operational experiences between playing a big role in the integration of Hill-ROM to leading some different growth in operational initiatives. So I think the leadership experience, the growth experience, the operational experience are key for kind of this role. But I would add to that that Hill-ROM had a respiratory care franchise as well that I've spent some deep time with over the years, and I think also prepares me well for this role. As far as why I came to Intogen, I would say it's really three things. One, the people. Between the leadership members that I met with, the board members that I met with, I really was impressed with the caliber of the organization. I'd say two, I was impressed with the recent performance. Two straight years, mid-single-digit growth, some pretty significant improvement, adjusted EBITDA, and the expansion of the portfolio from a portfolio oxygen generator company to a more significant respiratory care platform, and increasing the TAM was attractive to me. And I think, three, being able, I feel like Indigen's at an inflection point with a real a real significant opportunity to accelerate growth and accelerate that margin expansion with some of the moves that they've made. And I felt like that's really what I was looking for, the opportunity to contribute to a transformation and really utilize some of the experiences that I've had over the past. And lastly, I'd say seven days in, but I continue to be energized by what I've seen and the opportunity ahead. And I'm looking forward to working with the team.

Mike Madsen, Analyst — Needham and Company LLC

Okay, that's great. And then Kevin, I think, you know, along with Jason, you're hiring Jason, there were some other senior executives that you hired, including chief marketing officer and VP of U.S. business, business sales. So can you maybe just comment quickly on those hires and kind of why those are the right people and the right roles? I don't know if these are new positions that you did previously have. If they are new, maybe why you felt like you needed those roles, the company.

Kevin Smith, CEO

Yeah, I know. Thanks for the question, Mike. And in addition to Jason and looking at the talent development and expansion here in the organization, this, adding the CMO as the VP of sales for the B2B, it's a deliberate realignment to reflect the ambitions that we have as an organization and to accelerate the core priorities that we have, driving top-line growth, advancing our path to profitability, and expanding our innovation pipeline. We did have a marketing role that was in the endogen in the past, but this is elevating that up, making it a more strategic role. It's reporting directly into me. Dom is a seasoned operator, as is Corey. Corey is our VP of U.S. sales. He has deep experience in the space. He knows the HME markets. He knows the major players as well as some of the smaller players. And this is us expanding out and upgrading our team to make sure that we are positioned to excel here in the future. But as I mentioned, they're both experienced operators, hit the ground running. They're going to be spending the next couple of weeks here, a few weeks, really deeply understanding the Inogen business, and then they're going to be able to start to add value. If you think about this, and Jason had touched on this also, but we have evolved from a single product company for all intents and purposes, the POC, to now a respiratory care platform, with also the development and the expansion of our digital offering as we go into the future. So bringing in some additional operators here that understand that, that know product launches, that know how to expand out the portfolio and get to rapid sales, to get to that peak sales as quickly as possible. It was definitely beneficial for us. So we've gone from in the low $100 million range from a TAM in the United States now to a $3.4 billion TAM. So we've evolved as a company, and we've got some great talent to go along with.

Mike Madsen, Analyst — Needham and Company LLC

Okay, that's great. Great. And then just want to start out by touching on some of the kind of macro headlines around the war and oil prices. So maybe you can comment on kind of your exposure to oil prices, you know, of the two areas I would think of would be, you know, raw materials like resins as well as freight costs. So maybe you can comment on exposure in those items or anything else from a cost perspective.

Kevin Smith, CEO

Yeah, certainly. We've had limited impact here today to date with this. We do have resin. We have plastic components and parts in our POCs. We have supply arrangements in place that do give us protection. Similarly with our shipping. We don't do a lot of air freights. We don't do a lot of overnight shipping. So our exposure is perhaps a little bit less than others. But if this does continue to carry on for extended periods of time, we see elevated oil prices. There may be an impact in the future, but so far it's been minimal.

Mike Madsen, Analyst — Needham and Company LLC

All right. And then you're moving on to your efforts to diversify the company. So I want to start with the Foxy 5. So this is your new stationary concentrator. Maybe you can just give us an update on the launch and how the product's been received and how you're positioning it relative to the competition.

Kevin Smith, CEO

Yeah. So far, the feedback and the acceptance has been exceptional. We've worked with UL to make the Voxy 5 something that is attractive for our customers. We've made improvements to what the original design was on this and added that to the portfolio. But we've seen – we've had good feedback from the – both from our B2B market, being able to offer an antigen package. We've been able to expand out the number of touches that our sales reps can have. So that's more engagement. You start to think about portfolio sales within that B2B segment. And we've also positioned Voxy 5 within the DTC. But if you remember, this is the expanding out via the portfolio, but it's the same patient, it's the same call point, and it's dropped through to the bottom line within that channel, within the B2B as well as the DTC. Because the same patient that needs a POC also needs to have a stationary concentrator. And there are also patients that need to have a stationary concentrator before they need to have the POC. So it's a nice expansion. nice expansion.

Mike Madsen, Analyst — Needham and Company LLC

Okay. And then, you know, I know that was part of the agreement you have with you all. So you all, the other part of that agreement was that they were going to start selling the Europe POCs in China. So I don't think that's happened yet, but just wanted to see if you could give us an update there, if you have any sense of the timing of when that, you know, when they could get the clearance and start selling it there.

Kevin Smith, CEO

Yeah, we've not, we've not guided towards the exact timing with that yet. We're working through the regulatory process to bring our POC into China. We're working with UL in that process to bring it in. But that is an attractive market for us. There's a high rate of COPD. It's a growing patient population, not just from the smoking that has historically been part of the Chinese culture, but it's also the environmental when we think about the pollution and the impacts from the environment there. It's an attractive opportunity for us. We're excited about this. And remember, we are, as we've mentioned before, broadly here, we're entering the Chinese market as a premium play, as a premium opportunity for the market there. There are POC players. There's a well-established stationary concentrator business. It's more SOC than it is POC today, but that's a growing opportunity, and it's our ability to leverage UL here.

Mike Madsen, Analyst — Needham and Company LLC

Okay, so is the main hurdle just getting the product through the regulatory approvals there?

Kevin Smith, CEO

It is. It's coming in as an ex-Chinese company going through the regulatory process. We're working through that, the appropriate documentation, testing, and so forth that is necessary there for China. But we are, you know, we're excited about what that will bring us.

Mike Madsen, Analyst — Needham and Company LLC

And then moving on to Simiox, maybe you could just give us a quick reminder on what the product is and the market opportunity, and then where things stand with launching it in the U.S. and obtaining reimbursement coverage.

Kevin Smith, CEO

Yeah, so the semi-ox is an expansion out from the oxygen therapy, which is our POCs and the SOC line. Similar overlapping patient population, but it's airway clearance. So it's bronchiectasis, more specifically non-CF, so non-cystic fibrosis bronchiectasis. Airway clearance, so you have patients who have sticky mucus that's developed in the airways. The traditional therapy for that is either going to be a PEP or OPEP-type device, which are very ineffective with large portions of the population, or stepping up to something like a vest technology, the HFCWOs, which is an externally worn device that can be effective with clearing the mucus. The way that the Simiox works is through a tube that the patient uses in their mouth to breathe in and out of, and it applies through the waveforms. Basically, what it does is a similar action, a similar result that you would get from the vest, but it breaks up the sticky mucus, makes it more movable, allows the patients to clear it comfortably on their own without having to wear a device, without having to have bulky technology to go along with it. We have that on the market in the European countries today. We have seen success with that. We're working towards the reimbursement in Europe as well as the reimbursement in the United States. We have a clinical trial that is ongoing in the European markets that will allow us to go after specific markets there. Think about the big five and so forth within Europe. And within the United States, while we have clearance from the FDA, we're working towards the process to file for reimbursement with CMS. And that is we require a couple of clinical trials in order to do that. One, safety efficacy. Another trial, which does a comparative trial. We're working through that process. We're enrolling actively here in the states with the first trial. We haven't guided towards specifying the timeline for that, but this does expand our TAM, gives us about a $500 million growth with high single digit market expansion and subtractive gross margins. This is one that is going to be very nice to create it for us. It's a razor, razor blade model, which is different for an engine. And we're excited about this one, too.

Mike Madsen, Analyst — Needham and Company LLC

And then just moving on to the other market that you're entering is the CPAP market with your Aurora mask family. So why enter the CPAP mask market? And how are you positioning these products relative to the market leaders in that market?

Kevin Smith, CEO

Yeah, so there's CPAP similar to SEMIOX when we think about the overlap with COPD. That's our core patients, the COPD patient population that are on long-term oxygen therapy. When we think about that expansion, and I know I'm going a little bit backwards here, but SEMIOX, there's that overlap of about 30% of the patient population roughly that has bronchiectasis and needs airway clearance. You know, arguably, there's also evidence that suggests it's further than that and the necessity for airway clearance outside of the bronchiectasis diagnosis. But then if you roll forward here to consider Aurora and the CPAP masks, it's a growing market. It is a $2.2 billion TAM in the United States. And there's also that overlap within our core patient population of about a 20 to 30 percent overlap. So it's a nice extension. We're leveraging the sales organization that we have, the logistics that we have, the marketing teams that we have. It's the same physician that's prescribing the CPAP machines and masks as it is the physician that's prescribing long-term oxygen therapy and also the bronchiectasis diagnosis. These are the pulmonologists for the most part. Those overlap within the HMEs. We know there are thousands of HMEs out there, and there's strong overlap within the HMEs that support patients that are on CPAPs, those sleep-related patients, as well as the oxygen therapy. So it's a good way for us to leverage what we have. And the way that we're approaching the market and positioning ourselves, we took the time to make sure that we are able to deliver a high-quality product that can be differentiated and will come with patient preference. We ran the clinical trials ahead of time, looking at three cohorts of patients and wanted to validate that what we were doing was worthy of the antigen name, had the same quality, that standard that we have as antigen, and would also be able to support patient preference. We were very excited with the data that came out in that. We have a publication which will be coming out soon, presented at a sleep conference. And we like the feedback that we've been seeing so far.

Mike Madsen, Analyst — Needham and Company LLC

But this is us being able to leverage the same patient, the same physician, and the same customer base when you think about the B2Bs. sure and just you said the tam is 2.2 billion but i think you more recently have commented on you know the segment of that that's kind of the new patient setup because that's probably where you have more opportunity it's harder to get a patient existing patient to switch masks so how big do you think that portion of the market is yeah that portion of the market is it's been estimated in reports that we see, Mike, at $400 million to $500 million, $600 million.

Kevin Smith, CEO

I've seen some go to the high end. We are focused on the $400 million and the conservative approach there. Those are the patients that are the early startups. We see it being roughly around 30% of that population, but more conservatively, $400 million, because it depends, of course, throughout the year when that patient is going to be diagnosed. That is, when a patient is on a mask, once they get comfortable with a CPAP mask, it's hard to get them to change to something else. You've got a good night's sleep. You're happy with it. It's sticky. They stay with it. When we did our clinical trial, we looked at patients that were already happy with the mask that they had, put them on the antigen mask, and went through the process to evaluate the effectiveness of that and their preferences they went through. We were very happy that they strongly preferred ours and indicated that they would switch to ours, but that is what we're not realistically, though, going after this 2.2 billion to start. We're going after those new patient startups, and those will build up and add all the time.

Mike Madsen, Analyst — Needham and Company LLC

Okay, and then the other thing I think you're working on is adding or enhancing the connectivity of your oxygen concentrators, so can you maybe give us an update there? And what are the benefits to both the patients and the HME customers from doing that or offering that?

Kevin Smith, CEO

Yeah, certainly. So where we are, first of all, to be clear, all of our POCs have connectivity today. They have Bluetooth enabled. They can connect to smartphones. We have an app that we have developed with the patients. We're expanding that out. We're We're introducing additional robustness in the future to this connectivity, and we're continuing to add features and benefits that will support the patients, the physicians, as well as the B2B. So when we look at this from a patient standpoint, we're looking at having fewer disruptions to the therapy. We're looking at them being able to reorder supplies, to be able to update some of their insurance information and so forth that they need to do and interact with the POCs. That's today. I'm not talking so much about the futures here right now, but it enables additional benefits. For the physicians, the goal here is to get to the TAMs and to the RPMs. So that is creating preference and loyalty and also additional revenue streams in the future. But in the near term here that's available today also for the DMEs is that they have the ability to look at device health. They can look at POCs that are going to need service soon, predictive data that's coming out of that. And so they can do route planning with their technicians and their drivers and so forth and put that into the plan rather than have to worry about an emergency call over the weekend where they're paying a technician additional money to take care of and service a patient. So all of this is part of us creating this ecosystem and enabling not just the connectivity and the individual touch points, but a broad-based view of attacking loyalty and preference for Inogen.

Mike Madsen, Analyst — Needham and Company LLC

Okay, got it. And then moving on to the DTC rental business. So this went through, there was a period of strong growth for a few years, but the last few years, it's slowed down and it's actually been declining. So what happened there? And, you know, can you get this business back to sustainable growth?

Kevin Smith, CEO

So when we're looking at the direct business and the rental business, which is Inogen as an HME for all effective purposes here, and if I step back for a second, the POC continues broadly to demand is increasing. Total volume has increased a little more than 20% when we look at 25 from a unit volume basis. But we're growing in other areas. were growing in the B2B business. What we see is the dynamics that are linked together, where the HMEs historically have been more willing to give a patient an oxygen tank when they are prescribed portable oxygen therapy. Historically, we saw just a few years ago where it was 30%, 40% of the patients on the new starts were given a POC. 60% to 70% of those patients were given an oxygen tank historically. Today, we've seen that flip on its head. And now it is 60% of the patients that are engaged with an HME are being given a POC. You see that reflected in our growth. But at the same time, that's a headwind for the rental business, as well as our DTC cash-based business. Because the primary customer in those direct models are patients that are given an oxygen tank and are self-advocating to say, no, I want to have a POC. But where more of those patients are starting out with a POC, it creates a bit of a headwind in one channel or two channels while it creates a tailwind in another channel.

Mike Madsen, Analyst — Needham and Company LLC

Okay, yeah. So just because it's a headwind there, but, you know, it's being offset by winds on the DTC sales side. That's right. Because ultimately the POCs have to come from somewhere, right? So, okay. And then so speaking of DTC sales, let me focus there for a minute. So, you know, that, and I'm talking, you know, the consumer sales element, that's also been declining. So is that due to sort of the same reason that you just described?

Kevin Smith, CEO

It is. It's that headwind. It's more of the patients that have a POC to start with, you know, from their HME, have the endogen coming from the HME versus who will need to reach out to us to get one directly. But we do still continue to see opportunities, and we're refining that business. We've invested in making sure that we have the right size of the organization, the right level of spend within that organization to get us to the point where we can get back to profitable sales. But it's not only going to come from POCs in the future with the DTC. It's also going to come from other technologies that we can put through there. We are selling the Voxys, for example, today through the DTC channel. We see opportunities to continue to build that out and refine the way that we're approaching that marketing there with social media and looking at, you know, at extended caregivers, family members and so forth, not just the patients themselves.

Mike Madsen, Analyst — Needham and Company LLC

Okay. All right. And so all these new products that you're launching, you mentioned Voxy5, then Simeox and CPAP masks, those will all be available through that DTC channel as well, correct?

Kevin Smith, CEO

And when we're evaluating markets, product launches, we're going to be looking at this as what is the best channel for each product category that we have and the opportunities that are within there. And if we look at DTC, there is an opportunity for the Aurora masks to go through the DTC channel as well. But that's a much smaller percentage of the CPAP mask business. Patients that are paying out-of-pocket cash for that are mostly those patients who are noncompliant, so they're not having insurance reimbursement because they use it less frequently than they should be using it. But there is an opportunity there for cash pay. The bigger market for that one, of course, is going to be within the B2B HME channel. But Simeox, as we evolve that and launch that, it is a missionary sale from the beginning with this, differentiated technology, but there'll be opportunities in DTC as well.

Mike Madsen, Analyst — Needham and Company LLC

Okay. And then moving to domestic B2B sales. So you already addressed this to some degree, I think, but it sounds like these larger national and regional companies are really in the midst of shifting a lot of their patients to POCs. Is that fair? And, you know, what, I guess, what happens when they get to, you know, the majority, vast majority of the patients being on a POC and they have a fleet of POCs?

Kevin Smith, CEO

Does that, you know, does the demand kind of slow down or is there going to be a replacement market where these things, you know, only last, you know, five years or something have to be replaced or? yeah it's we've got a little bit of ways before we go to uh you know for that saturation of the market where it starts to become a replacement only market and the way that we are approaching this is is one and thinking about this is one that's you know roughly 40 percent of the new patients starts or receiving a tank and not a poc so there's still opportunity to continue to build and to grow uh within that we know that there are thousands of hmes that are out there you've got the small mom and pops you've got the big the big national ones you have regional players in between they're not all created equal they're not all focused in the same way so we have the opportunity to continue to build and grow within there without it even being just a market share within other poc manufacturers but we're also innovating and setting ourselves apart for the future not just for you know where we look at uh inogen as a competitor to uh to tanks and other technologies But also, how do we leverage innovation that we have planned in the future to speed up some of the replacement market when it ultimately gets to that? Because now we're offering more advanced technology with potentially better outcomes as well.

Mike Madsen, Analyst — Needham and Company LLC

OK. And then what about the pricing trends and specifically with POCs and that in this channel? you know is it is it stable is there still a lot of pricing you know headwinds and competition there i understand you guys have kind of the best you know product with the best you know durability but is that enough to kind of allow you to continue to capture share yeah we have a strong feeling that there's differentiation and it matters.

Kevin Smith, CEO

And we've been working towards making sure that we maintain the price that our customers see the value for that and that we have preference from the physicians. One of the evolutions that we have talked about from Intogen going from a single product company, a POC, to a home respiratory care company, that's an important piece. But another part of that is evidence-based, that we are developing evidence-based data to be able to support our continued growth as well as support the value that we are demonstrating. There are some things that we can point to very easily when you look at total cost of ownership. You compare an antigen POC to somebody else's for the B2B market, things like a seat bed that the patient can change on their own without requiring a technician to go out with a tool. We have an eight-year useful life versus a five-year useful life, so that enables the HMEs to depreciate it over a longer period of time and has a potential impact there. And they're serviceable. Not all POCs are serviceable that are available in the market today. Plus, we have seedbed technology. We have some things that are meaningful for us that are important. But the other part of that is the evidence generation and the data and the clinical aspect of work that we're doing here right now, engaging with clinicians. We have clinical trials that are running. We have a fellowship program that we are launching later this year, and as well as KOL engagement, education for physicians. So we're putting in that groundwork to make sure that we continue to separate and differentiate and make sure that the POC market stays far from a commoditized market.

Mike Madsen, Analyst — Needham and Company LLC

Okay, great. I want to move on to some financial questions. So you grew by around 6% in 2024, 4% roughly in 2025. It's probably splitting hairs a bit, but it did slow down a little from 2024 to 2025. And then this year, you're expecting 5% to 7% of these are guidance. So, you know, what caused the modest slowdown last year? And, you know, what do you think is going to drive the stronger growth this year? I imagine part of it's the new products, but, you know, and then why, I guess, why can't, you know, with the CPAP masks and Foxy 5, I mean, why can't it be even faster, I guess, this year?

Kevin Smith, CEO

Yeah. And when we look at the revenue growth from 24 to 25, starting out with that first part, that is really driven by mix. And that mix going more from the rental business and the DTC cash-based business to more of the B2B where that growth is being driven there. There are volume-based discounts within these large HMEs. They pay a different amount than the individual patient is going to pay. So that is reflective there, even though we're continuing to grow from a demand unit volume basis. So we do anticipate continued growth and opportunity within the POC. But in order to get to that 5% to 7% growth as we've guided now, that is based off of our belief and our expectation and that we see the pathway there where we're going to continue to grow beyond the market growth within the POC business, but then also adding in the Voxy 5 and adding in the Aurora masks. And we want to be very thoughtful in how we are approaching those markets and those launches, because the Voxy 5 is going, yes, to the DTC, but it's a little more chunky in the B2B, and that takes a little bit of time to build that up. But the real one that takes the longer runway and we're at the early stages of the growth curve on this in the launch phase is the Aurora Mask. We build those up really one patient at a time. So we do anticipate that to have a meaningful impact this year, but it's going to be more back-end loaned than it is front-end loaned, but that is part of our growth point.

Mike Madsen, Analyst — Needham and Company LLC

Okay, got it. And then looking at the P&L, the gross margin was also down a bit in 25, and I know it's complicated with Inogen because of all the different channels having different margins, But was the decline mainly driven by, you know, just the shift away from the TTC and toward the B2B channel, or was there more to it?

Kevin Smith, CEO

I think you pretty much hit the nail on the head there, Mike. It's mixed. We saw large reports of the revenue come from the B2B channel, where, again, that is a – those volume discounts, they pay less than others.

Jason Richardson, CFO

So we're growing faster than the market from the unit volume basis there, but we are – but more of it is coming from the lower price set. okay and then maybe I would add there too that you know I think a big part of the product launches we've been talking about is a big component of that expanding margin going forward and I would also highlight that you know even with the margin decline adjusted EBITDA moved forward substantially so I think the company's done a good job of managing the full profile of the P&L which we're going to continue to do.

Mike Madsen, Analyst — Needham and Company LLC

Okay. Yeah. And that, that leads into my next question. So the, the new products, um, Foxy five, the Aurora mass and semi-ox, the mass and semi-ox clearly have higher gross margins. Um, and so as those ramp, I'm not so sure on Foxy five, I don't think you guys have commented there, but, um, you know, at a minimum, the, the, the mass and semi-ox should, should drive higher gross margins i would think so it's expectation that you know as we get into the next few years that gross margins can can start to to expand over time yeah and one of the things that we've talked about and you you nail it there with both the aurora masks and the semiacs are nice margin profiles for those accretive to the uh to the blended margin going forward and you we've talked about adding an additional product on an annual basis.

Kevin Smith, CEO

So every year having a new product launch and we are committed going forward that new launches will be accretive to the, to the blended margin. So that will, you know, that'll work towards improving that profile.

Mike Madsen, Analyst — Needham and Company LLC

Okay. And then, you know, to Jason's point on, you know, the EBITDA margins stuff, you know, looking at your OPEX, now this is on a gap basis, but, you know, a drop from $197 million in 24 to $185 million in 25. Can you point to what caused the decline there? I mean, were there any kind of one-time expenses maybe in 24 or was it just simply leverage? I guess it wouldn't be leverage because it's a dollar amount, not a percentage, but I guess what drove that decline?

Kevin Smith, CEO

Yeah, it's kind of a combination, really, of those that you talked about there, we've guided to roughly 6% at the midpoints there. And we expect that to drop through, but we have a mix shift that is happening. We are maintaining the diligence, the discipline that we need to have from an OPEX spend standpoint, but that really is, it's blended throughout that.

Mike Madsen, Analyst — Needham and Company LLC

Okay. And then, you know, just from a cash flow perspective, it looks like your cash flow from operations was positive 6 million and 24, and then it became negative in, you know, 2025. So what drove that change and what's the outlook for, for 26 and beyond? I mean, do you, do you expect to get back the positive cash flow?

Kevin Smith, CEO

Yeah, you know, I think it's a couple of things that are probably important to note there on the 25 is we did have an earnouts payment of $9 million, so just under $10 million. That was related to the physio assist acquisition. And so that was paid in 25. We also had some accounts receivable, higher accounts receivable at the end of the year. That was reflective of orders that were shipping right at the end of the year, and we had some bulky orders there. And then some FTE expenses that's related to, one, to severance payouts. Severance payouts is we're right-sizing the organization, making sure that we got the right number of people in DTC, as an example, as well as some additional ads for us. But those are all one-off things there, and we have been guided towards cash flow here in the future.

Mike Madsen, Analyst — Needham and Company LLC

Okay. All right. And then you do have a good cash position and no debt. I think it's around $120 million as of the end of last year. So I think the board authorized a $30 million share repurchase program. So do you intend to fully utilize that? And have you been active in terms of repurchasing shares at all?

Kevin Smith, CEO

So, yeah, we do believe that our stock price is undervalued. And we've improved the profitability, as Jason had noted a little bit here at the beginning. We've got our strategic repositioning. We've expanded our portfolio. All of these are lining up. We're executing. We're moving forward. But we believe that we're undervalued. So the board has authorized that $30 million share repurchase program that you had mentioned that was authorized on February 24th. and we do intend to execute those buybacks over the next couple of years.

Jason Richardson, CFO

Okay. And we have started the buyback already and we'll give an update when we do our earnings release next month.

Mike Madsen, Analyst — Needham and Company LLC

And then finally, just as you continue to try to diversify the company, is there any potential for you to do any M&A or is that off the table at this point?

Kevin Smith, CEO

Well, our immediate focus here now is the launches that we have and that we've put out with the Aurora masks, with the Voxy 5 semi-ox, getting semi-ox launched. But we are evaluating. We do continuously look at that. It's in our best interest. It's in the shareholder's best interest. And we'll make decisions if we find an opportunity, a target that we believe will increase shareholder value.

Mike Madsen, Analyst — Needham and Company LLC

Great. All right. Well, I think we're almost out of time, and I'm out of questions. So I think we're going to have to wrap up there. I don't see any questions from viewers. So thank you, guys. hope you have some good meetings at our conference appreciate it mike thank you yeah thank you mike