AtriCure, Inc. Q1 FY2025 earnings call

Management Statement and Operational Highlights

• Financial Performance: Total revenue for the first quarter was $124 million, a 14% growth. Adjusted EBITDA was $9 million, an improvement of over 200% from Q1 2024.
• Analyst and Investor Day: Outlined vision to lead in multi-billion dollar markets with investments in R&D, clinical research, and therapy development. Key opinion leaders discussed LeAAPS trial, BoxX-NoAF trial, and Hybrid AF therapy.
• Business Updates:
  • Appendage Management: Worldwide revenue up 19%, AtriClip Flex Mini adoption accelerated, 510k clearance for AtriClip Pro Mini, LeAAPS trial enrollment nearing 5,500 patients with plan to complete 6,500 patient enrollment in Q3.
  • Afib Ablation: Open ablation growth led by EnCompass clamp, development of PFA-enabled EnCompass clamp, BoxX-NoAF trial approved and to begin later in the year.
  • Pain Management: 39% growth driven by cryoSPHERE MAX and cryoSPHERE+ probes, cryoXT probe cleared for amputations to address phantom and residual limb pain.

Segment Performance

• Appendage Management: Worldwide revenue grew 19%, with 23% growth in open AtriClip devices and 7% growth in MIS appendage management devices. In the U.S., the AtriClip Flex Mini contributed over 15% of U.S. open appendage management revenue. Total revenue contribution from appendage management was significant.
• Afib Ablation Franchises: Open ablation franchise grew 14%, with EnCompass clamp sales up over 47%. Minimally invasive Afib treatment had nearly 50% growth in Europe for Hybrid AF therapy but faced pressure in the U.S. due to PFA catheters.
• Pain Management: Grew 39% in the first quarter, driven by cryoSPHERE MAX and cryoSPHERE+ probes, with a 12% increase in total accounts. The cryoXT probe received FDA clearance for extremity amputations, expanding the addressable market.

Guidance

• Full year 2025 revenue expected $517 million to $527 million, reflecting 11%-13% growth over 2024.
• Raised adjusted EBITDA guidance to $44 million to $46 million.
• Second quarter expected mid-single-digit sequential growth; minimal sequential improvement in U.S. MIS ablation and MIS appendage management.
• Guidance considers potential modest impacts from tariffs, with majority of suppliers based in the U.S.

Risks

• Tariffs and Trade Restrictions: Could have modest impact on gross margin, though majority of suppliers are U.S.-based.
• Competition: In the medical device space, which could affect market share and adoption of products.
• Clinical Trials: Uncertainty in clinical trial outcomes and regulatory approvals.

Question and Answer

Q: Clarify on tariff impact and sourcing.

A: Angela Wirick stated tariffs would have a very modest impact, with majority of suppliers in the U.S., affecting gross margin by tens of basis points.

Q: Appendage management acceleration.

A: Michael Carrel said acceleration was due to AtriClip Flex Mini's small profile and positive feedback from physicians, with net new accounts and surgeons adopting it.

Q: Guide real quick, why not take up low end of range.

A: Angela Wirick said it's early in the year, and SG&A leverage is expected to continue driving EBITDA upside.

Q: Pain management penetration.

A: Angela Wirick said accounts using cryo nerve block products are growing, with goal to expand to 1,200-1,300 accounts in U.S. and half that internationally.

Q: MIS business decline and recovery.

A: Michael Carrel said pressure from PFA is expected to continue, but Convergent procedure growth in Europe and EnCompass clamp success in U.S. could lead to recovery.