Shockwave Medical Inc. (NASDAQ:SWAV)

Reported Net Income (Loss)

From December 31, 2019, through to December 31, 2021, the company experienced consecutive net losses, with values of -$51,109 thousand, -$65,699 thousand, and -$9,136 thousand respectively. There is a notable trend of decreasing losses over these three years, indicating an improvement in financial performance. However, a significant positive shift occurred by December 31, 2022, when the net income sharply increased to $215,996 thousand, marking a substantial turnaround. This upward momentum continued into 2023, with net income reported at $147,278 thousand, which, although lower than 2022, remains strongly positive compared to prior years.

Adjusted Net Income (Loss)

The adjusted net income followed a highly similar trend to the reported net income over the same period. The adjusted losses for 2019, 2020, and 2021 were -$51,074 thousand, -$65,725 thousand, and -$9,347 thousand respectively, mirroring the pattern of decreasing losses. In 2022, the adjusted net income showed a dramatic increase to $215,331 thousand, closely aligning with the reported figure. By 2023, the adjusted net income was $148,438 thousand, slightly higher than the reported net income for that year but consistent with the overall positive trend.

Overall Observations

The financial data reveals a company transitioning from significant losses to robust profitability within the span of five years. The close alignment between reported and adjusted net income suggests transparency and consistency in the company's financial adjustments. The extraordinary increase in net income in 2022 indicates a possible one-time event or operational turnaround that substantially improved earnings. While the 2023 figures show a slight decline from 2022, the net profitability remains strong, marking a sustained positive financial shift relative to earlier years.

Net Profit Margin

The net profit margin demonstrates a significant improvement over the analyzed period. Initially, in 2019 and 2020, the margins were deeply negative, around -119% and -97%, indicating substantial losses relative to revenue. By 2021, the margin approached break-even with a minor negative value close to -4%. Notably, in 2022, the margin turned positive, reaching approximately 44%, before moderating to around 20% in 2023. The alignment between reported and adjusted figures throughout indicates consistency in underlying profitability trends despite adjustments.

Return on Equity (ROE)

The ROE followed a parallel trajectory to net profit margin, transitioning from large negative values in 2019 and 2020 (approximately -27% and -29%) toward near breakeven in 2021 (-3.8%). Thereafter, ROE shifted dramatically positive, peaking around 42% in 2022, before declining to approximately 22% in 2023. This pattern reflects a turnaround from significant equity losses to strong returns, followed by some reduction in profitability. Adjusted and reported ROE figures are closely aligned throughout.

Return on Assets (ROA)

ROA showed a similar recovery pattern, starting significantly negative at approximately -22% in 2019 and worsening slightly in 2020 to about -24%. By 2021, losses had narrowed substantially to near -2.6%. The metric then increased sharply to around 33% in 2022, before decreasing to roughly 9% in 2023. The notable jump in 2022 signals improved asset utilization leading to profitability, with some decline in 2023 suggesting either asset growth outpacing income or lower income efficiency. Reported and adjusted ROA values remain consistent across years.

General Observations

Across all analyzed dimensions, the company demonstrated a pronounced turnaround from substantial losses in 2019 and 2020 to profitability by 2022. The peak financial performance in 2022 across margins, ROE, and ROA was followed by a partial decline in 2023, though results remained positive and improved relative to earlier years. The close correspondence between reported and adjusted figures suggests that adjustments have minimal impact on the overall financial trajectory. Overall, these trends indicate a successful recovery phase with some stabilization or normalization in 2023.

The financial performance demonstrates significant fluctuations over the five-year period analyzed. The reported net income shows a substantial improvement, moving from a considerable loss of approximately US$51.1 million in 2019 to a sizeable profit of around US$215.996 million in 2022, before declining to a profit of US$147.278 million in 2023. A similar pattern is observed in the adjusted net income figures, which track closely with the reported data, reinforcing the overall trend of initial losses transitioning into positive profitability from 2022 onward.

The net profit margins, both reported and adjusted, mirror these income trends. Initially, margins were markedly negative, reflecting deep losses with values near -119% in 2019 and improving slightly to around -97% in 2020. By 2021, the margins had nearly reached neutrality, standing just below zero at approximately -3.85% reported and -3.94% adjusted. A notable turnaround is evident in 2022, where margins surged to around 44%, indicating strong profitability. However, in 2023, margins receded to about 20%, suggesting a reduction in profitability though remaining solidly positive.

Net Income Trends

Reported and adjusted net incomes display a marked recovery from heavy losses in 2019 and 2020 to significant net profits in 2022 and 2023, indicating a successful transition in financial health and operations over the period.

Profit Margins

Margins reinforce the income trends, revealing initially unsustainable negative returns improving dramatically to profitable levels post-2021, with a peak in 2022 followed by a reduction in 2023.

Comparison of Reported and Adjusted Data

The close alignment of reported and adjusted net income and margin figures suggests limited impact from adjustments, implying that the core operations drove the underlying performance trends.

Overall Financial Health

The data indicates a company emerging from loss-making phases into a period of profitability, albeit with some moderation in the latest period, highlighting both growth and some variability in earnings quality or operational efficiency.

Net Income (Loss) Trends

From 2019 through 2021, the reported net income figures exhibit significant negative values, indicating consistent losses during this period. The magnitude of losses appears to decrease notably in 2021 compared to the prior two years, moving from approximately -65 to -9 million US dollars. A sharp positive turnaround occurs in 2022, with reported net income increasing dramatically to over 215 million US dollars, followed by a slight decline in 2023 to approximately 147 million US dollars. The adjusted net income values closely correspond to the reported net income figures, indicating minimal adjustments applied and validating the observed trend of initial losses shifting to profitability from 2022 onward.

Return on Equity (ROE) Patterns

The reported return on equity (ROE) mirrors the profit and loss trends, beginning with substantial negative returns in 2019 and 2020, with values near -27% to -29%, indicating that the company was generating losses relative to shareholder equity. The ROE improves significantly in 2021, moving to a smaller negative of around -4%. This improvement culminates in a strong positive ROE in 2022 at over 42%, reflecting profitable operations and effective utilization of equity capital. The ROE decreases to approximately 22% in 2023 but remains robust and positive. Adjusted ROE values align closely with the reported figures, reinforcing the consistency of these results after adjustment.

Summary Insights

The data indicate a company transitioning from a multi-year period of losses and negative equity returns toward a phase of considerable profitability and positive returns on equity starting in 2022. The sharp turnaround in net income and ROE reflects successful operational improvements or other favorable factors contributing to financial performance. Although the net income and ROE values decline somewhat in 2023 relative to 2022, they remain significantly above the pre-2022 levels, suggesting sustained profitability. The minor differences between reported and adjusted figures suggest adjustments had minimal impact on the overall financial trends.

The analysis of the reported and adjusted financial data over the five-year period indicates significant variability in the company's profitability and return on assets. Initially, both reported and adjusted net income figures demonstrate substantial losses, gradually decreasing in magnitude through the fiscal years 2019 to 2021. Specifically, the net losses diminished from approximately -$51.1 million and -$51.1 million in 2019 to about -$9.1 million and -$9.3 million in 2021, respectively.

Starting in 2022, there is a pronounced turnaround, with the company realizing a substantial net income, exceeding $215 million on both reported and adjusted bases. This positive trend continues into 2023, although net income decreases to around $147 million, representing a decline of roughly 31.7% compared to the previous year but remaining significantly higher than the earlier loss years.

Examining return on assets (ROA), both reported and adjusted figures follow a similar trajectory. ROA was deeply negative in 2019 and 2020, indicating inefficient asset utilization amid net losses. By 2021, ROA improved markedly, nearing break-even levels at around -2.6%. In 2022, ROA experienced a dramatic rebound to over 33%, correlating with the shift to profitability observed in net income. In 2023, ROA declined to approximately 9.4%, reflecting the reduced yet still positive profitability relative to assets.

These trends suggest the company underwent a significant operational or financial transformation starting in 2022, dramatically improving its income and asset returns. Despite the reduced profitability in 2023 relative to 2022, the results remain substantially improved compared to the initial years reported. The close alignment between reported and adjusted figures indicates consistency in the underlying financial reporting and adjustments applied.