ATRC - Earnings call transcript Q4 2024

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Operator

Good afternoon, and welcome to AtriCure's Fourth Quarter and Full Year 2024 Earnings Conference Call. This call is being recorded for replay purposes. [Operator Instructions] I would now like to turn the call over to Marissa Bych from the Gilmartin Group for a few introductory comments.

You may begin.

Marissa Bych

Great. you. Thank should copy you press the received release. have now of a earnings By

not please a to you received If have copy, e-mailed you. have to call one XXX-XXXX (XXX)

company's me Before today, remind remarks include you we forward-looking let that begin statements. the

limited AtriCure's for risks trial guidance, franchises growth regarding filings. Forward-looking differ the uncertainties, which but These update including opportunity and statements many expectations statements. control, time-to-time from not and uncertainties statements include, competition, AtriCure's undertakes to described clinical market product any future and materially beyond AtriCure clearances, to, in publicly outcomes. AtriCure's and of and approvals, subject obligation projected. potential risks are initiatives, may financial to no forward-looking numerous expectations from reimbursement those are AtriCure's results are SEC

to in press Additionally, the of share. A per measures, that, most directly call measures financial adjusted CEO. website. And to our currency Mike President comparable measures the over I specifically and is reconciliation and EBITDA with would revenue, Carrel, turn with our non-GAAP like GAAP we release, included refer which adjusted available loss on these to financial non-GAAP constant is

Michael H. Carrel

Marissa. to you joining successful product evidence across launches everyone, today. key trial afternoon, Thank on for clinical continued another Good our demonstrated and year initiatives XXXX profitability, thank was by AtriCure, several new Great. us at franchises. our you, improved and growth, and progress

XX% million open For franchises. with the appendage ablation year, open or performance growth and in we $XXX of pain management revenue outstanding our management, achieved

of financial the million AtriCure's XXXX million to in million. in $XX made remain throughout adjusted full guidance provided we and am outlook in $XXX from We revenue XXXX. our excited I with and $XX year our momentum million January, future. In significant business expanding our to to strong reaffirm pleased strides also We worldwide $XXX for exited profitability, XXXX XXXX EBITDA year, about our

adjusted XXXX now million $XX expect EBITDA nearly performance, million, to year to of Following an deliver full XXXX we margin XXXX. increase of a robust $XX over XX%

cash generation the modest expect for we year. full Additionally, flow

details Before in that an our XX. we and to and the quarter innovative Ohio Day XXXX, to headquarters pipeline We showcasing our on to and more hosting while I fourth plan Analyst facility turn March leading product throughout on our I and at remind Mason, like would event. Investor everyone market are team our for portfolio expansion, review

We University, at lead our trial -X joined and the of leading III Surgery LeAAPS on by will LAAOS and be Cardiac Seminal including is PI the several the Dr. trial; McMaster who physicians, of Whitlock, author Chief the Dr.

is who Clinic lead of as mentioned, surgeon world-class cardiac a a landmark are investigators key in Soltesz, leading our failure. Both the expert clinical the trials on Cleveland surgery. in leaders heart field and from opinion and

have Mercader X also will We and electrophysiologists, Dr. Dr.

their share PFA. perspectives the with procedure market Sood on and to Convergent current experience trends, including

to continued Finally, long-term intend driving we expanding goals financial as on provide growth we and profitability. focus both

more XX% nearly allowed than globally Block engage and the year, in in XXXX, time, Cryo team, have block pain our MAX in cryoSPHERE Now, in therapy. and XX% and physicians business bolstered cryoSPHERE+ which our procedure utilize accounts. In freeze XX%, times probe. existing of grew These new our deeper reduced and customers United quarter. Pain added management reflects the accounts adoption. in cryoSPHERE by meaningful by overall worldwide reduction therapy with performance which highlights updates XX% original the by compared critical XXX commercial nerve in execution with saw States, to launches in as XXX MAX respectively, resulting strong with cryoSPHERE+ products cryo Nerve new and can global innovation us The probes X factor be the drive a into to we franchise, the beginning CryoSPHERE the full on new to quarter advances probe, and turning we a to our XXXX from fourth Management and

improved hospitals We to in pain with for during preferred our support as patients devices multimodal We are with the includes staff that a they management at also observed clinical postoperative efforts on the received and therapy our patient are often increased Cryo support the believe closest pain. a staff postoperative recovery. Nerve to Block recovery this solution strategy that exceptional engage feedback managing as

launch are that devices. our developing we as cryoSPHERE the our evidence new pain demonstrated Looking as on by focused forward well supports economic probes value of into XXXX, management further continuing the

use additional therapy exploring forward block expand will Day and well look sternotomy also We market to sharing at procedures. addressable lower are extremity into insights cryo for and as Analyst beyond our Investor such nerve cases this more We well. as our amputations, which thoracotomy

our to atrial the Moving franchises treatment of for fibrillation.

quarter, by franchise driven Clamp acceleration in fourth growth XXXX, open Our XX% in grew XX% which in than more driven also saw in XX% was EnCompass worldwide by the sales. growth to EnCompass. We an

methodically launch States. worked existing both accounts extended This to capitalized EnCompass impact adoption. United is smaller and a product of the early and factor throughout launch physicians to team Our the Short and in configuration increase new form on the the of the reach Clamp has States and United the EnCompass in XXXX

Europe. we fourth In the addition, quarter, during EnCompass launched in Clamp the

representing XXXX. an is from accounts XX% worldwide, over accounts increase Our EnCompass of in now Clamp XXX present in

cardiac expanded We approval FDA leadership that expanding a to our and ablation in progressing of this addressable received next XX-year expected Afib on Clamp an in earlier being further without and our continuing are expansion widely market preoperative devices, in continue elevated pioneer trial we year, reduction of EnCompass prophylactic that Afib for our postoperative our AFib. AtriClip studying the our experience cardiac to show BoxX-NoAF, to trial, support surgery This look To is cardiac a of is success and for to surgery. Building invest their patients clinical science end, fact will we Europe benefits It surgery cardiac procedure. patients surgery, space. prospective and developing treatment. treatment the this clinical continuing forward following of history risk our patients of established in in treating commercial States with XXXX United and in

We begin by in clinical initiating enrolling study will first this and the sites patient XXXX. trial our year later

Turning Afib treatment. to invasive minimally

feel therapy the of AF States. continues in hybrid Our adoption PFA to pressure the United

For XXXX, our X% growth a robust global XX% international by with in tempered States. the hybrid United growth franchise markets, grew in our X%

minimally prioritize States, fourth the Focusing this trends patients. we We AtriClip devices. downward pressure in on the the throughout in of our remain resulting devices these saw use to on continue XXXX, PFA franchise accounts United to anticipate treat quarter, to invasive in

procedure invasive increased our in for our the minimally therapy doubled anticipate in are growth our receive proof experience Europe, States, U.S. remains XXXX business, to long-standing catheter growth treat are -- outlook long-standing of United sustained a AF ablation XXXX hybrid growth which This long-term fibrillation. driven hybrid our by XX% therapy. expanding that seeing we but more the the Convergent in patients And XXXX. patients of our persistent rates XX% from fibrillation. In points with ultimately, was EPi-Sense year atrial solution ablations. growth adoption in with in outside in PFA support to in acceleration patients solid AF option funnel our hybrid atrial for devices the growth However, turn in hybrid our we as lasting a patients pressure hybrid persistent Europe, convergent ahead, technologies as for procedure to only such effective as a

open Now shifting our of AtriClip devices delivered full growth in appendage of XX% growth X% comprised franchise, in to XX%, appendage MIS our our management which revenue year devices. worldwide management and

the sustained XXXX. United in growth with management growth an of States, we are in business momentum acceleration pleased the appendage open achieved throughout We incredibly following our quarter where XX% of fourth the

quarter, our the also AtriClip FLEX-Mini launch fourth we the widened During the U.S. of in

primary also for look devices our devices. with and We we have which FLEX-Mini and XXXX visibility, the positive in strides to to in indications sustained years clip, overwhelmingly sale device. Like for differentiator achieved and growth made of AtriClip increased be procedure FLEX-V reach the visibility XXXX, geographical our procedure Flex we business meaningful the forward of tailwind expect in that In approval China the feedback this Mini, beyond. our with to ramping a many increased received the for AtriClip We come.

surgical an clinical in appendage efficacy appendage XX of and a of CE-Mark countries stroke. guidelines. And global indication for our risk devices, the led and touch in on also expansion improvement the finally, the extend the making of AtriClip of for efforts XA in to peer-reviewed reflect appendage patients. The evidence further exclusion patients grow thromboembolism left at clinical received society's clinical have high over quality for of more updates to and the major our our covering also been than every atrial recommendation AtriClip We practice, in guidelines We to XX,XXX which breadth in believe management want Class market. these demonstrated papers I managing support

progress We atrial of product has prophylactic like with remarkable reduction and opportunities enrolled in with I stroke in full about patients have leading This potential cardiac for this LeAAPS innovation both was over to AtriCure. of surgery. the another FLEX-Mini our for clinical business patients our trial studying markets, undergoing continue to investments expect showing surgical X,XXX enrollment appendage appendage surgery. Currently, providing a market talked management closing, of for growth the the our multiply appendage market as X,XXX in the in appendage Much patients into other XXXX to we new benefit trial the cardiac by management year management and year. patients managing left complete non-Afib globally achievements is future. In millions earlier, the AtriCure such well science undergoing

line drive therapies will clinical continued and for and launched that years the efficacy to profitability, required growth long support We to continue term. the of innovative come, advance several to increased to growth, adoption development our top drive products double-digit

our We reimbursement the value building to championed are have of devices adoption. show increase to economic therapies and using also for evidence efforts

for diversified Officer. Chief I with call like Financial have products that the outcomes for a We deliver future. And portfolio of the into Wirick, meaningfully patients to continued improved physicians, and positioning Angie? Angie to well turn that, us would over strength developed our

Angela Wirick

Mike. Thanks,

open margin or development Gross a of quarter and basis from reflecting was XXXX strong XXXX. enrollment International a franchises. million, the the the XXXX in the of $XXX.X R&D XXXX to markets Sequentially, management increase $XXX.X QX XX.X%, decrease invasive of XXXX, demand for for million, million our worldwide on of fourth revenue and and sales X.X% million, and $X.X exclusive appendage on fourth fourth a constant ablation technology of as with was and LeAAPS fourth increased clinical the our million, our result or mix. Fourth SG&A a points pain favorable pain reported expenses up XX.X% of payment basis quarter XX trial. significant million quarter and of geographic by basis management compared research XX.X% XX.X%, and X.X% revenue strong on fourth fourth PFA currency XX.X% currency fourth quarter and ablation expenses driven as major strength quarter grew constant growth the cash basis co-development well up international XXXX. increased appendage primarily for a Much open $XX.X a continued $X.X from product or totaled increased in of licensing million, U.S. $XX minimally saw XXXX. of agreement quarter revenue continued quarter the XX.X% over XX.X% management, increase when over products. XXXX. We a was $XX.X as less Our quarter across on XXXX, to of management, worldwide from basis the compared reported

EBITDA fourth to $X.X for XXXX, the fourth the for $XX.X the of We adjusted to Turning of XXXX. quarter million positive of adjusted bottom quarter positive compared drove EBITDA million line.

was share Our per $X.XX adjusted fourth loss to a of of for XXXX. and per loss XXXX, $X.XX loss quarter per per the share the $X.XX and was share quarter adjusted of share fourth compared for loss

U.S. increase $XXX.X sales Now and to million. to million, by million, review and approximately was of to both in or and U.S. increased full increased constant on revenue XXXX, basis. Worldwide currency sales international $XX.X propelled EnCompass a XX% $XXX.X reported year on increased XX.X% over XX.X% basis ablation reported results. sales growth XX.X% $XXX.X Clamp XXXX open sales. XX.X% currency constant to an a million,

appendage devices devices. U.S. XXXX appendage finally, $XXX.X stemming million, Cryo reflecting Our management reached with over single-digit a low our growth cryoSPHERE million, growth. And increase year. management by U.S. XX% grew $XX.X probes MAX revenue the the XX.X% in $XX.X and X% open driven during in cryoSPHERE+, from Block management to decline appendage adoption franchise sales a in of U.S. XX.X% MIS release therapies million, was MIS the accelerated Nerve management pain

appendage growth fourth Our our AtriClip growth the appendage pain with were both growth management, open open accelerated management particularly AtriClip of minimally year XXXX. in from ended XX.X%, by geographic all XXXX major across revenue to FLEX-V points XX% our XX% devices. Gross regions, and mix, basis drivers and in management and and was margin invasive the saw contributing and driven XXXX. compared XX ablation, in device of at invasive less franchises favorable a product for International The launch of strong decrease revenue revenue XXXX. of geographic international worldwide decline in quarter with FLEX-Mini minimally

partnership which agreement. Full and operating from $XXX.X development upfront expanded costs to XX.X% the XXXX $XXX.X with or Moving $XX.X increased year XXXX. to includes Research million, expenses associated expenses. in up payment million, by PFA XX.X%, operating our million

XX%, clinical and for market on as from million, XX%. settlements research XXXX, reported benefit organic growth XX% in expansion. expenses When $XX.X SG&A increased approximately we driven SG&A Excluding excluding development pipeline this product and make as by XXXX. expenses approximately was progress development costs legal expenses net increased trial the our charge, or in in

We while investments million. infrastructure for administrative continuing $XX.X million compared generating operating was EBITDA year improvement $XX.X commercial an of sustained $XX.X XXXX adjusted million, throughout initiatives Full R&D growth. to XXXX, and in are our leverage in

working included a share per $XXX.X a that in full in compared we was for investment burn and balance full $XX of loss the a paid position the loss in XXXX ended January, cash with XXXX, Consistent million $XX our year, our PFA of early to cash associated million to share to support $X.XX the to in our respectively. We hold investments XXXX revenue in robust and growth to XXXX. per a $X.XX, to share over $X.XX finally, strong guidance with year we between our fourth quarter. upfront for and cash million outlook turning million Overall, in continue Note burn XXXX future. And arrangement loss technology of for of $X.XX million. capital year results. XXXX. achieve XX% and reflecting $XXX with Our was per expect Adjusted $XXX approximately XX% sheet

tailwinds to our Mike open U.S. open look management headwinds we we at followed for the XXXX As management our MIS to range experience decline appendage expect XXXX, continue will minimally and ablation. and invasive we appendage by mentioned franchises, and our for in remarks, ablation his lead in expect and year-over-year. performance, revenue both pain as And guidance that to management assumes pressure our

on international level growth based outpacing in of continue Finally, our overall we to and expect U.S. U.S. growth outside the penetration markets, XXXX throughout franchises of our size momentum

States. revenue the we with United revenue terms strength launches first margins seasonality typical a to growth In the new by likely with flat our cadence, XXXX to and fourth flat inform relatively of of perspective, of variability quarter in margin to driven we expect quarter product expect XXXX XXXX, international to XXXX. From be compared gross modest

mix operational our to lines offset addition with EnCompass costs Clamp scale. we impact, In be and cost focused savings by material overall initiatives to expect increasing

Turning to operating expenses.

during allocation XXXX. we and $XX cultivation to primary for AtriCure. with drivers capital be milestone XX% expect related revenue to percentage our platform our of million payments XXXX, identification on as focus next of includes PFA a remains the set of Our to R&D progress the roughly growth in which in up Therefore,

moderate a As as adjusted proportion in year excluded leading reminder, are revenue the SG&A milestone profitability. to EBITDA. in across from will Spending payments improvements progresses, to

$X.XX $XX million, to loss these adjusted range million to of mind, per approximately to now translating share to we $X.XX. expect EBITDA XXXX With in year adjusted $XX full priorities from an

our cash and position. cash capital moderate balance generation year XXXX, anticipate the full further overall also strengthening for We

from worldwide. heavy to full we comments. the the in Mike. XXXX variable closing, X,XXX year initiatives of begin compensation the was AtriCure, showing a remainder ongoing team We burn As talented increased XXXX for earlier in cash during that payouts, a net share of positive anticipate quarter our Mike's treatment efficiency our XXXX. In We typically see cash reminder, and results like year and product first and needs. of for first outstanding the annual vesting followed back the by XXXX, I'd year operational for quarter launches, generation of reiterate burn growing to turn I'll profitability. And with and excited research our more our across people markets an new call that, patient with impact continued driving than operational cash

Michael H. Carrel

Thank you, Angie.

thanking team driving AtriCure past team. I have them by the Our of year they performance continue this the to like mindset will their throughout without humility beyond. our each confidence in XXXX for been persistence, progress I and our markets and close have that demonstrated not that patient-first utmost possible XXXX. would in would

look at XX. And facility, our products at company many and hosting March. our forward questions. substitute is in our person, we'll to Operator? headquarters hope that, March we investors this team and with see to it Additionally, no turn experiencing for I over you in on event and There analysts to of

Operator

line first from JPMorgan. of [Operator question Instructions] the Lozada with Lily Our comes

Lilia-Celine Lozada

business. has growth Maybe I'll well launch the considering this start the EnCompass with really into at point. pretty up open impressive we're put

So where sort the long your open we would the business growth from say And to you how products continue? this conversion EnCompass? in can legacy of in stand

Michael H. Carrel

population. the cetera. much that products The of physician EnCompass using know, the conversion to or physicians new there before. Patients like go behind Every you veins, get EnCompass Afib patients utilize Yes. difficult for the coming built not from legacy to was is is et that market as we're some out felt cases. the all was They after had through had going growth much surgery. been technology cardiac I into I users it on mean, net the treated has target, think everybody that into of of now -- was where many the them EnCompass. coronary from from pretty -- or additional pretty to bypass too

And is that any point. so users at of this conversion of an again, much all from, pretty net kind coming out new use or growth of but not base, coming of within the or cannibalizing EnCompass expansion

Lilia-Celine Lozada

you And while. of things, then on talked for maybe Europe the of side PFA it the sort been after had MIS on in a market had about stabilizing dynamics

characterize follows So are point? U.S. the those PFA a trajectory Is how at point? non-issue you some And would this now? you that assuming at similar there a dynamics

Michael H. Carrel

we of Yes, are said most I it there. think well. pretty PFA through much piece you the

starting holding get on wanting there new doing physicians using net not the we're and now now their to involved our to to and You're and algorithm technology approach. that areas programs see with anything, adding treatment convergent

So That's why you we're that definitely seeing the in saw Europe. growth.

in think new growth in XX% that, the expansion is happen XXXX saw Convergent sites X ahead the that that net existing expansion to year do pressure much dynamic in to States around within United to going all is But United pretty area. a of the We around area, the remember this that that Europe years the going of States. and that. sites, in You is was the this anticipate platform. And over lot Convergent we and years, feel of X.X

as started as are down that some see back maybe today could and part are to that year. well. to There start usage we early to end some actually So it. But I of no were last to referrals see proof starting we XXXX hopefully, are -- actually of -- anticipate, now this coming do that went see the that that benefit to to beginning mentioned, we are of points. We sites almost starting year,

think same and bright see out lot Europe. we to the it's as a do follow of do there, that pathway So we going points

Operator

William Our with of next Plovanic line question Canaccord. comes from the

William Plovanic

just is related. product First

U.S., the terms increased you million you of rollout then penetration cryo+ in low are the EBITDA you? And by on of terms what kind in In the and and OUS MAX the exactly have of account in and end. of guidance secondly, where EnCompass your a couple on EBITDA,

Just what changed?

Michael H. Carrel

the let and first, second. address the address I'll I'll Angie

it's in mean just we're mostly properly, And the it's that be U.S., different it's actually throughout necessary to countries all going it the Europe. But we're a structurally, OUS, sure reimbursement. positioning starting. there I getting relative it, launch approved doing it's little just the EnCompass slower making because all training. to For than

the So we of really much year, half but start the kick the to anticipate will that, in part. in that beginning back growth not

stages. we're kind through it, it feedback do at bit little there. it's to on We sites kind of super going but reimbursement work take running a to the and to and through early So got to pieces of and it into longer just have sure technology, work great up country utilizing the just the get can make getting

relates progress that. early and better mean doubled X than at some had FLEX-Mini the at that on probably to months into first happened almost beginning had at sites, great FLEX-Mini accounts MAX We we us innings cryo the showed lot launches new lot and versus from actually of the both super really it saw a of we QX, FLEX-Mini, in kind we're analysis the of FLEX-V actually of As the that that looked the we of X those a FLEX-V. on I expected. launches, number of

So and it's progress but X still and early months overall, is at just into because point. absolutely super super excitement this it the innings it's numbers low there,

Angela Wirick

we strength to anticipated. with better closed Yes, out of I'd the the related we XXXX which question guidance, than the way EBITDA on that adjusted Bill, bottom say line kind on the had the

for some the business confident felt range nice in given $XX We range the on are XXXX. to looked could final for we very where and million at XXXX, throughout the like XXXX, that $XX the for numbers came felt floor the we million seeing when raise of efficiencies to kind that

Operator

the from comes of question next Matthew line with Piper O'Brien Our Sandler.

Matthew O'Brien

I follow-up EBITDA. question little on Angie, bit Bill's on can a

but 'XX. as in in did still or what about 'XX, goes. than profitability headwind you bit international better is still the here that little expanding as The 'XX a job same in You have did a far nice bump you

all just a midpoint then do I'm And follow-up. does to getting the where P&L? have of So across have that way hard the range. you leverage having extra I time Because model up a the come the from

Angela Wirick

The on headwind gross our feel will international Yes. margin. mostly

against product out do the you been a for expecting business. That comments, growing international would we outpace both further business, that P&L, the the and as growth. I'd points Clamp said, you're perspective, throughout less at products well the SG&A business we've couple investors because then gross multiple down you different I margin SG&A, some rate that's know, think slightly R&D buffer that efficiency international being growing profile on expect EnCompass a and and new I which as and with have to R&D of U.S. global the might our a driving little benefit U.S. the looks very those of business. efforts some to seeing say the in of a of down manufacturing. scripted slightly line. be below of in launches area that's in for every focused we're our our called the the from seeing almost top

Matthew O'Brien

XX% the these really do Is about number? think growth AtriCure that think X-year forward, of how of future you've teens kick that XX.X% stacks the typically kind XX% it's still of but And around it's Got historically. kind -- is 'XX, some opportunities guys you XX.X% The about little other are I maybe still in it's that that year, Mike, in it. we know revenue in you know that then, for a of talked should bit Or tougher comp kind the until in? start below to I midpoint on going early, conservative. low of guide the below growth range of it's the more growth. level

Michael H. Carrel

Yes, it's a question. great

we're think now about rate for comfortable I just you that right the year, talking now, about. growth talked this right

we're why longer-term more rate that the a looks kind double-digit on on what don't confident some come. a the to rate for you think, growth we've that got solid you I feedback strong in time come Analyst growth to we'll But of like. long Day, give area pretty

Operator

comes Our Marie next from of with Thibault line question the BTIG.

Marie Thibault

quarter. Nice

I talked multi-year FLEX-Mini, strength. only know but months about sustained For X in, it's you

think base So a parse as think we the portion you've a you process. multi-year XXXX, in about XXXX? like you to guide sort of sounds out what will for is that installed way will given It convert think be the conversion there of

Angela Wirick

way I think is this. think the about that right absolutely to

to off to launch a start, the all this to kind of while While accounts, speak. expecting so the is are take a to of we get to great

X of Looking product of or same years back before it effort expecting clip on the accounts FLEX-V a launch one each for majority and multi-year sales FLEX-Mini. our that our and represented so ago, was the in

Marie Thibault

And of on come the of from you conservatism growth of products sort then typically we kind start echoing kind see year. here uplift maybe high-level question of way outlook, kind there a to revenue on the the quantify they of of a -- Is to Matt, impact new coming. being quantify that the a kind know lot uplifts. you've got I assumed typically volume in pricing there pricing of number? with Is that's a way versus to

Angela Wirick

majority is volume-based. growth the assume would of number growth The the Yes.

FLEX-Mini on depending between cryoSPHERE you come kind do the the the where upside or mix those MAX of have in. So

do in an we've So area that guided we where upside is from is to. the range delivering believe that that there

Operator

Stifel. the comes line question from next with Our Wise of Rick

Frederick Wise

GM guidance. did quarter, I was don't more mix, any but Maybe and gross think miss at gross gave it? we could a you highlighted et think recalibrate maybe thinking the our view it and it this just fourth points dive don't our mix, but models, that as ahead? about clearly, for year my quarter. the we're we it I sure our of we maybe, the look point think for, less third look it at from product cetera, margin the XXXX I less XXX fault, you margin. we basis mix than specific But -- into fault, the I little Angie, thoughtfully, to just bit OUS rebasing about that want looking make should than was how

Angela Wirick

question. Yes. Thanks, for the Rick,

around give I said relatively the scripted margin. a target XX% rebasing a comments, We specific flat. think within gross didn't

the are I in we in behind -- margin for product better at now. somewhat throughout U.S., saw do revenue along cost think the enjoying is expect quarter. That driving through we've we're the margins, growing of is of lines component new by of that fourth we a XXXX, the some drivers percentage in we that weakness of offset been contribution and overall efficiency mix highest one international with the manufacturing our to couple areas launches product some years be where within the which overall a mix

we think which for through the full outlook is of of around kind good XXXX I centering XXXX. is year where thinking the So around landed a XX%,

Frederick Wise

R&D? a think I one color charge. And for on the question hoping what's you could R&D, little something was sure What's you if new update well, any could expect time great. update can more time where I of sort line we initiative? out mentioned, of Angie? Analyst take both project And we, are the maybe Day you give any from you as that new concrete the this -- What any a you I'm us base status, and us That's is on us items thoughts, -- R&D other but more the

Angela Wirick

Rick, All try to your going right. and question. answer I'm

You're here. breaking up little a end our on bit

working put charge of organic of R&D So partner charge payment in was for an co-licensing quarter. We're that product we platform. and the a payment, arrangement for our fourth for PFA That and development the that with took fourth which our million the kind would a have $XX R&D. development area upfront in quarter was the

at $XX the that reported around R&D R&D, fourth out organic in put increase XXXX. our of million, which a about quarter over take So would $XX the is million

the a increase million, projects kind in this will development our total or charges XXXX, continuing on trial should of some $XX over -- develop result focused which to seeing and in our about platform were key development I growth throughout that in million of our product R&D, XXXX, across to nice we seeing couple growth of expect year. LeAAPS clinical arrangement, in business. In again, complete nice some milestones say, So you $X

into we and is factored our So would that our at we March. Day expect for R&D be of Analyst percentage expect when about as Investor more forecast give full year, in say a late and to to details XX% the revenue

Operator

& the line Mike comes of Our from next question Needham with Matson Company.

Michael Matson

be what I want would other more ask know a the don't need that PFA open trials? regulatory to putting both it on I quarter. to but the And if to capability I there? just degree would you to to and I think PMA? MIS tell like in And us what's PFA last I are agreement to path the like planning you think and you on data, what products? the run know, people there, know So, Would position is into announced XXX(k) you're would one

Michael H. Carrel

Yes.

roll it's and I of details some anticipate at Those think clinical of more do the get the answer will device. be do question, and clearance first We're questions the of I out. We'll both other high-level Clamp this. kind a kind into have when some wind great for that more going Analyst would Day. run our up the then EPi-Sense of But the go and when products to on time trials to anticipate rolling evidence PMA first-in-human to in sure. those well, mean, at we out we our process the would that PMA we into we to through some Analyst go a line the around, kick those Day around need will of products EnCompass will our into kind particular, of we off other kind openXXXXclamps and granular a as and of into and for It Mike. also

that the anticipate going have that Analyst So piece for a broad But do this. to we through you're to yes, a of kind Day. better we'll have process kind for you milestone-based go PMA of on front at

Michael Matson

Day in that but interesting ask -- the that And we to use was more of imagine terms going that you the some hear include trial wanted mentioned the I thought and then it's the detail just BoxX-NoAF timing. more will. also then to we'll design, about of Investor as I But it for at ablation, well. this on Maybe AtriClip.

So seems another addition like to expand it in LeAAPS? AtriClip well the could way as use you of

Michael H. Carrel

enrolled go in actually the is Yes, LeAAPS. question. very view, a that and into we be at patient It's great population going give more I'll high-level some details it's to a will meeting. similar

Afib, kind takes be looking it effectively different that to patient. The have and every on at those we're several focus endpoints. going to of don't is it almost cardiac So surgery pre-op patients

Afib benefit home patient the they're the managed. when because the the as And to and lead term typically, the trial. We'll the not patients The out terms have can believe the hopefully say, last to that within having postop able that at a come Afib to the going the of in looking that again, evidence look reduction. longer can only system of clip and actually to bend going going clinical there's good post-op economic of at that fibrillation as that we're the basically this particular like And reduction to those also reduce to of first results kind lots patients that, endpoint that because we a looking term and that longer-term get actually patients that more and patient of precursor very in longer combination X to also population those think clinical benefit progression curve also. to Afib Afib that atrial that have the show at in the we be stunt can also in of they quickly to to years is post-operative and or be Afib many we ablation significant so is amount well, but of are

quite substantially, that's in each And our obviously, going area. exciting market of a to both within number the then novel, and of so really amount expands the It be really terms it's patients procedure. presence

Dr. the into trial. we at So And go meeting. you more said, we're detail about pretty excited the much like will

to PIs as Soltesz both answer we'll that and questions present and well. be and then Dr. able on Whitlock are trial, both on it

Operator

Our question Citizens comes of with Stauder next from line Danny JMP. the

Daniel Stauder

Great. Yes.

invasive softness for in the on first, minimally just XXXX. So expected

you bear But on for a in outlook be what's contemplate case 'XX. there of talked MIS? what give early rebound range idea sales the guidance cautious potentially XXXX? You any that baked could includes How MIS? great. us would just in The an just of is your terms in Or about for color

Angela Wirick

both ablation are that devices AtriClip our consistent of in and with growth guide hybrid the either year those at a full assuming range, the for Danny, businesses MIS the scripted points see we Yes. no of U.S. comments XXXX. decline, but is there

improvement, as through on given pressure. the and just XXXX and expect think devices when enter half assumes but most to that we going the -- year, of is PFA into start market we're that full year, categories we would those I product the somewhat see for an the first the the it time to second the think when X year-over-year. year half you is guide of see of a decline

Daniel Stauder

Great. on And just follow-up pain management. one

Just you indications, training? what's postamputation what pathway? would surgeon anything of on potentially? timing new the there And could education Do the Or the specifically the need side? really in be clinical Anything it pain, there terms great. more and just is be

Michael H. Carrel

labeling management. already We Yes. pain for the have

today of in So very that labeling kind we're something and kind in comfortable pain pain. actually have we that. But feel about very good we of That's our nerve actually peripheral are area, to to we're the effectively, go developing a market. more detail we'll But device new Analyst into and a have that new after go device going in at particular this Day. and

again, of franchise into size seen existing patients probably have. have in certain pain why very have more player excellent terms that detail another we've unique about that And that XXX seen, and the be what been for upon there. at of been and the of data looking on we're it results like market much overall results only that it. And area, what management about are in of X physicians they've large doing about we're the some on We million it's we in very looks It's are where the to We've we to and expand dollar already the capabilities this get now. the kind But excited multi-hundred market. years of going procedure. to

for grow us to after. a go we whole it's come and that an like, years So to area feel we many can for brand-new area

Operator

of Antalffy UBS. question with line next the from comes Our Danielle

Danielle Antalffy

Mike, any better the have about. ablation good open to you number CABG it's market. which But way don't adding runway, help surgeon just left sense business. you're a you guys growth to perspective or from been year the talked way incremental get are whether if in are is a trying super your penetrated unlock of be what you and runway super how runway of market, has the a it's where And know each ahead successful frame EnCompass sort and guys there's surgeons I would the this, today frame if to to we you helpful. of I'm of penetration in enabling CABG user

Michael H. Carrel

answer I because the I'm and it reasked had as earlier question to actually glad Lilly forgot well, it. think you asked I

and just history very And it's a question. lesson. fair So quick good maybe a

change penetration label back was market able about guidelines. our obviously years, look We're we XX in you XXXX. around And then If XX%. to got in this

You've change reimbursement also seen over in a X years. dramatic the last

of easier introduction the seen to make it to You've EnCompass use.

which When lot things is, of still, pull product together, all about at seen in easier-to-use that. and guidelines that the Afib recent patients procedural changes, low. U.S., today, given with of probably in the given today, get sitting treated we're go incredibly that better Guideline a and significantly So an into as the reimbursement, reimbursement change what of time. about reduces you still is you've XX% pre-op

first at an in years, get are significantly just lower Those Those closer approved next still OUS. runway we for can meaningfully within Clamp XX% numbers look huge got just a the our there's X-plus you U.S. pretty when there. the to and patients Afib So we foremost, basis. And EnCompass that numbers OUS are

not to Xx the market. market that, Afib room So pre-op of runway just we market you think is we'll the the look And add well. as Day. for talk trying Analyst size but Afib to I'm on in about that punt that a when everything that, it's post-op there's area, then international of at about of a again, you that top that's lot when

huge you that, look as of relative when runway And so the to market there's a part well. that at

going person XX. we've in everybody got decades March of growth, to and when overall, detail we're with look be more and excited on you Ohio worth think Mason, we come you in So to it at when to talk

Danielle Antalffy

few the U.S., the the years don't side helpful. here a little for then given was the something here but about doing could be I you for different a it's be in convert copied anything thinking Europe Europe. U.S. than can you translatable is could that Europe see -- the but curious there's know That's behind, bit products on bit give not in logistics MIS EP. a the the appreciate just is Great. the in call, and happening Okay. on like you're Is I of to Europe. what's cardiac the touched in if often dynamics faster there as surgeon Europe. that U.S., that if you ramp that I seeing U.S. in the new it success business the And on that's things, between potentially in

Michael H. Carrel

Interesting hit rates out running a they to of time. Well, logistics but actually technology, think I great actually see sites mean, XX%-plus not non-responders, PFA, I'm in the respond and started less and marker paroxysmal talking a is and have which that people And eventually, well. or for is us you in PFA, them. responding about U.S. excited U.S. early PFA quarters for seeing in super more ablations, I seeing it they enough, come sites you were that than really you have see X persistent if to until the that X about talk worked not that up and that X don't to they knocking about. funnel in anyway, growth and applicable, about through in trained they're row X what a lot Europe is effectively are the XX% onslaught year, catheter in the kind is though, What of kind of X you're of before we

the ask patient. time. have in develop why because to start specifically And in at develop do else And are point to patient for it so hitting that's funnel, of that really they they the nothing and more started is that new programs to have what going Europe they to they've top with themselves, that

the as funnel. It mentioned, X super the the this, very are to they've Yes, you're to even time it's people in doing doing respond But So first-line adopted, or to it their that the quickly persistent Europe, get going States, enormous in some kind nonresponder even of of funnel for rate seeing top to they're levels United maybe the close trying and over persistent kind of to you the which the means be as do that catheters. is of years, don't it then for market PFA and have patient that, the kind been if to the therapy. in through has same is at long-standing in that X or they're of high. and kind patients line the going

that's beyond. mirrors you're Europe dynamic then to going going that and XXXX XXXX. start back. they X see a going that do X, And to some just more, to that kind so to even, is go take think back XXXX to to And and time to see treated into why The we catheter X the come if think go X, through I or that's this -- that year of get in for that later it's going to patients them were to might and you're start

Operator

Our next the question Kalia with comes Oppenheimer. of Suraj from line

Suraj Kalia

Perfect.

the guideposts past consistently commentary put about think of deeper some around few account if understand can quantify we for is have Mike, as we your for how you of deeper should about the same-store that you penetration. deeper maybe account sales? the concentration so So the that in talked calls could store new it penetration, better it Maybe Just kind U.S., things one about us customer accounts.

Angela Wirick

and you a The think worldwide. if grew Suraj, than was XX% growth some to XX%. So of about Raj, EnCompass was comments, franchise, the ablation a product majority that I open more yet of that think as if growth our talked you we from account U.S., EnCompass look scripted about

that -- being do Block think accounts majority when you in growing adding franchise, of isn't U.S. Again, plus Block within growth. our users to management penetration the new double-digit kind of XX% we're added think revenue that about Nerve and Cryo was just our Cryo the our yet those within This new increased we seeing base. And kind pain account the accounts. of U.S., in Nerve the was similar, So

focused increasing expanding they even these and finding treated. of patient about patient adoption is that space, team install making they use incredibly we're and what space each our sure going physician where deep less think customer yes, I that use So is, and applicable when it's really really ultimately and users therapies existing sure gets selection that every and who's are making with

Suraj Kalia

Got rate. a RF, Europe. indicated. your say, more let's about responder and have treat number curiosity, follow I on to out you want fundamentally say PFA touch-ups in XX% comments Appreciate You with treat it. and of to repeat you the PF, Mike, believe let's just it. question I was Danielle's up Mike, right? certain catheters with just

repeat You a touch-up. have

opening Your bit these change The this Help quite for us comments is a will to Are to substrate talking different to for these talking is be PFA going TAM about new And funnel is you a to up, AtriCure's Are a what patients? about understand modified. you in AtriCure. already new be who patients that is products? able come going if back repeat ablation? tackle going RF so have about so, products? what be

Michael H. Carrel

these could it. get other and the how PFA works can't that lot way terms be to areas working could exactly not it. nonresponders Yes. really really the or RF, is of be that with that doesn't well And and going out of with about what doesn't PFA has responded as benefit big to that is Convergence to set an alone, I that after. When the many talked attacking into endocardial in we getting that sandwiching atrium, of it with randomized you're trials What happen. happen catheter mean, basis. you not where is. you that benefit I seeing to we're the you substrate, and or both you're to clinical endocardial is here is you're we're think in aren't because field just back we've what really it tissue the depth fat why perfectly or stand-alone where epicardium. you're see coming patients of epicardially regular relative the of on today patient kind It referring come they kind through pads demonstrated as that the And up there That's a It is in epicardially veins. endocardially There just wall about. a Afib ablating

DEEP captured You and you've results demonstrated And both the the That's map that five do on acute shows actually on our AtriCure plays year, where have long or epicardium. back -- you but it, showing when at sides. wind of where DEEP at from coming may you getting it's see years, a endocardially, That's comes you procedure it up in. an from reconnections that both just the our big. at years where procedure incredibly three super and come Convergent durability, one durable you not show from we've Convergent but

failed referring the term. on times critical the area go epicardium Afib that's demonstrate to in of and to after becomes it to row, these when several in patients that a reduction So a is durability endocardial what have the long catheter I'm that

the I a answer appreciate So kind you on and of hopefully, that detailed gives that, more question.

Operator

a O'Brien follow-up have Piper We question line with of the Matthew from Sandler.

Matthew O'Brien

to the be done is of trying here. I'm enrollment this by Mike, run to missing the the goes. you to going Day, going as it Analyst far mentioned so I'm front end year LeAAPS trial keep as

that I think then Are headwind if you're of any that get to expecting X-year follow-up, year looks? to going we next finishes enrollment any that's And add I trial. to think remember correctly. up? there revenue X,XXX kind patients Is a interim almost as I

Michael H. Carrel

X,XXX no patients get there's answer you will. Half which There's left one an X,XXX go. of or patients is that about those last that I'll to about AtriClip, Yes. first, that think trial, half if them revenue won't headwind.

at that frankly, you are then amount overall of already some that of treating -- de prophylactically, a patients kind lost minimis when revenue it's Quite the actually some of sites so AtriClip. revenue. And the it's look fact arm the and you have of get doesn't that in those those

or anticipate really whatsoever. whether that impact the on revenue be to no We there's into et case this cetera. year So even don't year, next

enrolled that timing fully said, they an As is event-driven kind do said, It third what in relates That latter patient. being year, the is there being part the sometime from the it, follow-up kind last a to sometime. you of X-year of in anticipate call the trial. it like probably of we of quarter

when able of to to at full the look It's get when to be get the events. that we'll events. we we to number of reduction powered full the number show So

that that's to obviously to is is will we'll time those get number update to get for something events. We the of those is it earlier could X-years the everybody that. relative something So take on to sure. numbers that anticipated And

get and that's look a about to when We But when in events want will have sure I've on going to anticipate based this all of that, to at get just front. an the that before, ability on trial to on I the do the to follow-up go make to don't call the have to number. believe enough early and differentiation then we we we We to of of way half powering that the XX% you're the a talked a final show trial stage. going out

Matthew O'Brien

an make right. I VT sure I done more one said to there far aren't sure just as I'm -- I want every one, a then you make And to into ablation -- year? sorry. I domestically clip understanding like VT think maybe quick it. as isn't ablation that. goes Got just wanted mention was that you other or cases? Did something I cases ton expansion understood. And ablation of If

Michael H. Carrel

ablation -- a today when obviously in the but all I basis AtriClip is concomitant with VT. cardiac I'm clip done -- mention a sole surgery don't I I with a -- used procedure. about like going in to must anything on mean, ablations not convergent our VT a on that. used, didn't We and is conjunction deep clip during AtriClip it's don't I the therapy when case have or that. time been a -- -- That concomitant the the mishearing now. didn't to mention That's

Operator

back and to gentlemen, further would like closing call Mike in to the the queue. questions over no I remarks. Ladies turn for I'm now showing

Michael H. Carrel

evening, what's tell to person Great. seeing look Bye are everybody XX. again, great excited a March on forward And to to on everyone. We Have XXXX you seeing in can I in Hopefully, Ohio come. appreciate that we joining. everybody XX. you forward about March look Mason, and now.

Operator

Ladies concludes Thank today's your conference call. and gentlemen, participation. you for that

You now may disconnect.

AtriCure (ATRC) 12 Feb 252024 Q4 Earnings call transcript