Nevro Corp. (NYSE:NVRO) Q3 2023 Earnings Call Transcript

Rod MacLeod: Yes. Appreciate the question but like I said, we are not providing guidance into 2024 for the full-year, let alone for quarters at this point. What I will say though is that we continue to be excited about the costs that are coming out of our Costa Rica plant. And we believe that we have got a good pathway to continue to drive those costs down and that should help with margins. And as we do move forward, we anticipate that we will receive pricing benefit from our iQ product as that mix increases. So, not going to get a whole lot more granular than that at this point, but that is the sort of color that we can provide at this time.

Unidentified Analyst: And then just more qualitative one, just as we think about maybe some of the regions where the commercial structure was more just realigned as opposed to having turnover and the salesforce, can you give us any color as to what the performance in 3Q looked like for those regions versus some of the ones where there was more disruption?

Kevin Thornal: Yes, I don’t think we will get into territory by territory, but I will just say in general, we feel really great about bringing Greg in and ensuring that we have A plus talent at every single position, whether that is someone who has been here for 10 years or 10-days. The expectations for our sales organization is extremely high. The bar to get in is extremely high. And once here, the expectations continue to be extremely high. And so, a typical turnover in med device that is highly competitive, it would be 10% to 20%, and we definitely were in that range previously. With our enhanced comp plan, with the alignment of the teams that we have closer to the customer working together with the management responsibilities occurring closer to the customer and giving power to those that are closest to the customer, we are seeing, not only pockets, but obviously, our expectations for this quarter, we did better than what we would have thought.

So, while we are not declaring victory, I do like where we are going. We have another quarter here that is absorbing some of these changes, but I feel good about Greg and his team and what they have done to be able to set us up for success, not only for this quarter, but also, really as we head into 2024.

Operator: There are no further questions at this time. I will turn it back to the presenters. My apologies. We do have one more question from David Turkaly with JMP Securities.

David Turkaly: Kevin, I might just want to press a little bit on the M&A side. Do you think you could stay focused on in the core pain markets or are you open to other areas, let’s say, in the neuromod or bioelectronic medicine arena?

Kevin Thornal: As I alluded to in the prepared remarks, the biggest asset we have in this organization, outside of our technology, our biggest expenses is our sales force. And what we want to do is ensure that we keep them focused on the same call points where they are headed today. The last thing we wanted to do is add more places they have go to new doctors they don’t already know. So the focus has been on dropping something into the bag that they can leverage those relationships they already have. And spend more time in each of those locations before getting in the car and spending windshield time between the next position. I would just say a little bit more clearly, what would be great is, each of our sales reps, when they show up at a physician’s office in the morning, can I look at the staff and say, boy, this is going to be a great morning.

I will be with you all morning doing X, Y, Z procedures with you, and then we will have lunch and then I will head on to the next place versus bouncing from 1 SCS case to another, doctor to doctor, right? I mean, our sales force, whenever they are in front of a windshield, they are not in front of a customer, in front of a patient. And so, leveraging the sales force and dropping something to the call point they already have, it is the number one priority and the targets that we are looking at.