AtriCure (ATRC) 21 Feb 232022 Q4 Earnings call transcript

Good afternoon, and welcome to AtriCure's Q4 2022 Earnings Conference Call. My name is Amy, and I will be your coordinator for the call today. At this time, all participants are in a listen-only mode. [Operator Instructions] As a reminder, this call is being recorded for replay purposes.

I would now like to turn the call over to Marissa Bych from the Gilmartin Group for the few introductory comments.

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-mail 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

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

we Additionally, basis, press specifically release, reported comparable most our directly of currency on is available non-GAAP included constant Reconciliation with share. the these a and per in measures, refer GAAP our which to measures website. loss measures on financial non-GAAP EBITDA revenue adjusted financial is adjusted

Mike? Carrel, I And over Mike turn Executive like President Officer. and the would to Chief call to with that,

for as Thanks growth XXXX we Great. joining revenue, increased our treatment executed postoperative afternoon, across year atrial the you for pain We of management XX%-plus us and thank adoption was portfolio for good and and today. AtriCure. outstanding fibrillation, accelerate solutions management. of an plan delivering appendage our to

of proud I in to lives our whose alone. our commitment platform, to improving strategic to globe impact performance the result our topline of the XXX,XXX patients leverage of drive am and work expanding performance hard investments a drove an XXXX underscores scale making our as whose incredibly over team of also of patient future growth. our We around led while and strong mission

and X% in $XX sequential with year-over-year reflecting strong growth. quarter, revenue, year XX% the ended achieving another million We

Our demonstrated adoption recent our the once enduring management expansion again the by catalysts of the and platform. AtriClip remarkable performance Clamp, of pain across continued depth led franchise, our across strength fourth quarter EnCompass many markets, of

progress we growth XXXX, million shown revenue. in our guidance full as historic our through to revenue commitment above $XXX rates to of $XXX into we reaffirming As million are year

We also EBITDA we breakeven expectation as improvements XXXX build thereafter our our are sustained business. of profitability reaffirming to adjusted achieve annually in with

I with will XXXX. fourth detailed a to now turn year the ablation of more and our our Beginning in full review open business franchise. quarter

innovation U.S. simpler launch of AtriCure Clamp proven of acceleration Our leverages our in the to and to System of procedures. in commercial The approach faster provide in open EnCompass a EnCompass XXXX heart power ablation highlighted with the Clamp performance technology the Ablation at the the driving Synergy an revenue.

expanded built launch adoption open new revenue physicians. throughout the Clamp. conversion EnCompass upon U.S. and we the new as additional procedure from from in Momentum XX% existing of EnCompass Overall, to rapidly to during ablation year reflecting the per tailwinds contributed XXXX, revenue and the approximately

continued the open volumes has the customers and saw around world Globally, and technology in exceptional, our patient we for of growth excited XXXX impact procedure stabilized our as beyond. and advanced from XX% Feedback XXXX been franchise we this are in treatment. ablation

our has the market business steady our growth vastly is decade, of for remains of part this opportunity more a While and than been a significant. driver underpenetrated

surgery ability the further to for confident come. cardiac years market penetrate are in to our We many

products LAA outcomes, with than with the XXXX. widely entered the central also appendage clearance sold unrivaled to more worldwide AtriClip is date. are LAA and management We management. our technology most multiple in market system in the Today, Innovation with used AtriClip success of XXX,XXX enhancements our patient to system first devices to

XXXX AtriClip advance and our of less strength consistent our focusing the invasive and worldwide technology with devices. to in pleased continued easier realizing to use growth are We franchise, on XX%

expand we landmark in XXXX, our clinical LeAAPS of AtriClip management the largest trial, appendage history device FDA one X,XXX of clinical through this initiated trial. cardiac April with to the approval with benefit new trials patients. begin last activities over to In We received

LeAAPS embolism, groundwork prophylactic of cardiac X The surgery do new The two-thirds AtriClip cardiac in which stroke in demonstrated have systemic patients devices primary the ischemic frontier patients in reduction trial stroke who for a prevention. of will study a worldwide. is laying the not over the preoperatively, and endpoint Afib arterial million use represents surgery

a sites are We LeAAPS recently expansion many and announced patient the will trial focused trial of in in on major trial complete. the The take enrollment years now and of enrollment both patient to the first XXXX.

in cardiac we over we all meaningful interim. management to awareness Further, expect of a for the in our will increase believe provide market procedures the this appendage extension trial long-term. addressable However,

more AF where our of of Turning by Hybrid the we made XXXX, than therapy, approval. the since now XX% number to initial accounts progress increasing our over course

ramping cardiac XX now the XX centers in We remains Afib developing in are high. interest therapy top and States United programs adoption the hybrid of in

from are for persistent fibrillation. longstanding impact and the atrial feedback positive with encouraged clinicians the patients We by procedure of this

that continue progress have acceleration resources has particularly than requires challenges, in But significant will a of as world. millions are where staffing systems Cultivating insurmountable, we differentiated solution we believe these growth sticky to the market not environment AF accelerated the anticipated. the deliver is a and we made long-term Despite and patients. are in presented coordination Hybrid for around constraints impacting that in adoption development, slower an therapy hospital of therapy challenges

greater the case and and fostering deeper for those scale along takeaways, EPs directly required implement to working growth teams partnership spent between care with efficiencies tactics nuances to have We time to understand surgeons sites. substantial logistics with across with

providing the the early foundation We will future and comprehensive for growth. to XXXX focus stages programs build expect continue on to have we in of many for adoption support the

the XXXX helped delivering achieve patients XXX we XX% to in growth worldwide U.S. traction Nerve early business, as in Finally, temporary an and after importantly, our franchise. Block Cryo enlarged pain our Nerve and dramatically nearly outstanding relief We pain management continues therapy XX,XXX in with purchasing Europe saw be in to over launched XXXX. Cryo thoracic our reach we surgery. Block Australia. Most sites have contributor

markets, our remains Like a us. significant other of front opportunity in

addition as management expand and to management with resources, studies on continue business pain pain. of developing data part of enhanced of focused our We clinical Block remain commercial the standard-of-care technology, the Cryo economic Nerve and postoperative for a

Cryo past, As Block indicated thoracic the beyond also have we in surgery. promise shows Nerve

are you progress. future on applications investigating existing to our updating We look with forward sternotomy actively our in we device, and cryoSPHERE

XXXX for year I AtriCure. In outstanding summary, was reiterate would like that an to

catalysts offer products proven substantial unmet and our in show growth are diverse, results needs. solutions Our our and that differentiated with markets

by forward As physician building both our into leveraging are the and unique new upon adjacent cultivating we we look markets technology relationships have developed. and XXXX, we

the relationships better the opportunity if is long-term over which globally. intended My successful, patient which trial, in for practice entire our elevated better stroke earlier to We comments surgery clinical guidelines define undergoing inform patients AtriClip prevention treatment see trial, AtriCure, and touched is cardiac strength market cardiac clinical to an of and platform stroke. substantial the surgery in planned for unlocks to well This with on and surgery LeAAPS, risk the leverage outcomes. ground-breaking billion for cardiac $X

existing the our an current temporary The device our between business solutions for to are I and to expansion use than double opportunity along relief. more our into existing management of market our the also natural pain enhance sternotomy with makes of management procedures, and management. provide business pain cardiac mentioned pain this cryoSPHERE elevating surgery synergy but potential we exciting pain

or clinical Additionally, an is HEAL-IST first trial. treatment in announced by HEAL-IST inappropriate of symptoms or rate is using no the sinus exercise. world there patient IST contributing procedures. ablation palpitations inability the affects are heart the currently tachycardia, of debilitating and hybrid the It of studying condition. sleep XXXX, we distressing people treated approved treatments in to and this patients around or with heart for elevated characterized millions effective IST, the that was to

XXXX, and excited clinical driving IST. opportunity parallel focused provide device remain therapy to development trial. additional the with for sites with the of to the a the significant many a the patient solution to this on for new of another market enrollment in We in unlock along patients are potential therapy We and dedicated

and underpenetrated and is meaningful we markets proven the realize at of ability platform. unaddressed AtriCure our core in to diversified have patients growth Treating from our

research solve unmet to to believe solutions will needs yield these will day. to We persistence innovate in growth benefiting patients and addition our and continue long-term every

more I over turn now details regarding our Financial Angie call performance. for Officer, financial our Wirick, will Chief to the

Thanks Mike.

fourth XXXX fourth and to revenue continued basis the XX.X% was on EnCompass management healthy of quarter quarter increased compared a basis management Our XX.X% quarter revenue fourth currency the the of from products. across U.S. a increase enhanced launch XX.X% $XX.X of appendage from $XX a when on reported constant product XXXX. Clamp, activity lines, million of by reflecting XXXX, the our pain and million, strength worldwide

International appendage revenue a compared or basis up products XXXX. in a grew quarter international markets key $X.X totaled up basis XX.X% the million, on a by XXXX. management as worldwide highlighted over X.X% growth $XX.X XX.X% to of and strong sales Activity QX million currency constant on Sequentially, fourth robust reported in fourth drove quarter.

supply basis inflationary primarily products Gross lower margin The XX%, for quarter by XXXX the points of of quarter the sales from and down XXX driven decline fourth was and was fourth XXXX. pressures. margin chain

line. bottom the to Turning

with EBITDA adjusted XXXX partially $X is to offset fourth improvement $X.X The pleased with result for moderated XXXX. for a costs of margin. administrative in operating of very fourth quarter by the leverage to quarter and topline in the selling We positive adjusted million strong million had our of pressure adjusted compared spend, quarter growth are We gross EBITDA negative fourth and notable EBITDA of our result.

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

constant XX.X% Worldwide a as factors full $XXX.X million, macroeconomic XX.X% year increase created $XX.X a currency on and year we the XX% The markets to basis reported review stabilization million, or XXXX, and XX.X% constant international globally. to headwinds a increased on Now COVID to currency basis an from saw our U.S. million. progressed sales in but XX.X% on in other early XXXX $XXX.X increased impact of revenue sales result. while basis. was environment

XXXX. Clamp of The $XX.X commercial sales launch growth drove to XX% over U.S. million the or open EnCompass ablation

benefit continued in half noted surgery pricing cardiac previous we penetration growth with roughly accounts estimate the remaining the of of have the that calls, annual EnCompass market. we from As for the from

therapy. management from by sales in approximately where AF new procedures, adoption. MIS X% decline we a franchise with U.S. In XXXX, adoption legacy to offset of revenue in accelerated reflecting pain U.S. for along million continued $XX million, EPi-Sense the groundwork existing grew to in was $XX.X accounts account our XX.X% growth increasing activity lay Hybrid

saw appendage we and XXXX appendage strong by $XXX.X XXXX, was million over U.S. Flex increase or propelled our attachment in U.S. driven rates sales Finally, XX% Similar in open AtriClip V pain revenue international management by ablation, as device. and XXXX, trends reached largely products. growth management management our activity to

from the points Gross the was a sales decrease year margin costs XXXX. XX.X%, lower where ended of margin basis a The of inflationary to and decline for shift mix we XX at impact gross saw products. primarily

to costs explore margin. We improve measures reduce continued gross and to

costs XX%. to associated costs. of operating forward spend, After $XXX.X full to headcount product operating from of $XXX.X increase were IPR&D value clinical across as from aMAZE items an compared of to recorded comparability, expenses these special PMA. organization, an fair and The strategic operating impact Moving increase consideration our the removing XXXX, In and with XXXX contingent year the investments impacts the as in million project asset development to of well expand expenses. we impairment in inflationary the million, for adjustment the the resulted

in remain with SG&A pleased are We R&D. costs driving operating in XXXX efficiency while investments our maintaining the on focused in leverage and and

million adjusted million XXXX $X.X to $X.X year Full in XXXX. was compared EBITDA loss

position million investments. loss was We Adjusted XXXX in with and in on per earnings and to and $X.XX the respectively. Our and share ended compared per $XXX hand, cash of a future opportunities loss capital $X.XX share XXXX. fund working flexibility XXXX $X.XX, $X.XX strong investments per of to was share

in outlook full XXXX turning with the Consistent million our to of $XXX Now to for XX% finally between growth January, revenue million we expect XX% for over to reflecting our results. announcement in XXXX. year year, achieve early $XXX and

for pain business the outlined exceptional similar our management in management Mike MIS in As our open from call, ablation have activity we drivers from XXXX anticipate ablation and with continued foundation drivers strong success. leading growth appendage very in we both the multiple performance, long-term modest as globally and contribution strengthen contribution and earlier

for outlook our point important is last This XXXX. to

we expectations is our reset this it area focus AF therapy, business. program While on development for for growth to of we Hybrid believe short-term prudent

our efforts and the will long-term come. growth ultimately, years are are accelerated lead focus that we to confident in to MIS Our expectations unchanged ablation in and

with to be fourth We cadence quarter prior also the will believe in saw general first with seasonality COVID XXXX those revenue trends likely pandemic aligning inform to flat XXXX. we of quarter our to revenue

perspective, be geographic our a XXXX results product From margin and by gross recent mix. anticipate to we caused in variability with line margin with

percentage We continue R&D meaningful further label and enhanced development to approximately expenses, revenue R&D XXXX XX%. spend maintaining support make at to of to innovative expansion, and as investments product our a market reimbursement XX% within

technology more across in This within our level trials enrollment advances along sites of clinical our investment contemplates as with heavy platforms. activate many XXXX

spend leverage We efficiencies and as grow. SG&A investments as continue in target to XXXX scale we are moderating in we

and year growth key breakeven. to EBITDA revenue adjusted be in investments expect strategic mind, XXXX we full strong With

clear. Our XXXX investment priorities are in

support We overall the catalysts capital. with of growth of are many our preservation balancing

clinical and site XXXX in while on with is focus Our improving and enrollment, to our profitability. with patient trials new focusing enhance platforms advance leverage robust expansion technology

to growth. future continue investments maintain sheet in solid which a balance enables our We these

cash breakeven variable to heavier first compensation driven is other needs be the Further, our timing consistent of the historical XXXX we achieve each the decrease adjusted loss and quarter is operational share expected normally that adjusted cadence, with EBITDA vesting guidance EBITDA our quarterly by start heavier in to first the burn payments, for as and a For quarter results, year. progresses, year. the of quarter year will

We our guide to EBITDA translates expand of loss an XXXX to adjusted determination for success. to business per long-term managing thoughtfully and $X.XX. XXXX for approximately share $X.XX impact enter adjusted with Our patient are our

turn call point, comments. to Mike the closing this will At back I for

the thoughtfully next investing we across Thank populations company the as you, continue impact to market and of of expand us, began markets [indiscernible] our front Angie. a against opportunities patient in strong adjacent to XXXX many also significant in was ways, time. the year and phase executing over while

over in by business the historical coming growth We a rates. in will XXXX the on together last the our continuing upon building mindset. are foundation of commitment to totality ensure growth The created the continue long-term and and our decades with delivering today above success future have we to and we innovate will decade revenue over

to showcase to as future planning We scale the of between our are just calculate investing benefits operational balance a our excited profitability. and for expanding as the and we strike

with I And will questions. turn to that, it Operator? over

Instructions] [Operator

J.P. first Our question Morgan. comes from Robbie Marcus with

open. line is Your

could track take nice spend the you Hi. Congrats and Thanks was a Maybe was you it bit to the more commentary could for taking little questions. to in it to your how below hear a start, short-term. bit MIS wondering time thought on will disappointing I growth? the back new be? it. fallen if expectations on do quarter. a long has for And think it to Why start where on you resume with

and show does more data on add the come feel when persistent Yeah. of of business from came overall to more. clinically has just we same More lot epicardial the data benefits are. kind about itself MIS that the to CONVERGE in that Really by to longstanding a actually the been not Obviously, And out endocardial from the trial fair way the patients. terms question. continues endocardial ablation, kind ablation work And of exceptional. it out you where -- we

very get the why of running? us. I little longer out which to that it comes think and made, us Robbie the is is it's going. up and I be this in bit question great for that's to So, to face the proven it comments that get there a fair taking bit data that a to have of down some And little a there, kind logistics longer of on really, stickiness continues,

closely getting on to do long-term, I'd groups of going There we're something or to patient a It or kind and that surgery this is that and electrophysiology funnel. this patients isn't be come having getting kind just and going relative lot And whether and patients flow then say, very not are of, that with to benefit thing confidence. to pushback is of to to their more going a that that through whether going working has kind of not have that. we're that's together and really facing in global this

our that patient but really we've do part the now, to on the during On individual top good is longer I number. lot groups longer. getting feel different expected. to on do you a but of think coordinate a COVID longer of to to that the that, the ramp-up it's upfront to us sites that, of which each to going through process, than a of of you're kind bit of good when that, a and staffing set of through XX% working get like running includes And COVID work the to that about us people I impact and guidance through little even why I take taken a handle us think that's up we we work then got XX% training, little where really and we're site get the effect year trying like coming had underestimated get their staffing to side, how out numbers to is that's weak taking and move attention two get hybrid going activity feel their attention on working the because them actually get and we've logistics and historical it at that this above hard and bit

weak an those you side, that additional our come point make to of on going have at hopefully, really back going sites, that from that parts it faster. we revenue some and even a and upside quarter to would that so, upside But with and relative to numbers like in And of we other growing might give ton it see I term our we're get you but accelerate is to the in aspect does progress some fast obviously, really business. date, XXXX hybrid these a long a to exact I love it growth feel of can't side.

be that lower appreciate Thanks. and it. Appreciate with speak you through thinking now that. could guidance business year? with about range maybe line different we reallocating to Maybe expectations. that items dovetail I the And Great. should to MIS the the revenue within how

Yeah.

I'll through individual go yeah, -- franchise. So each

you when that part of the So rolling franchise, out open really continue to to good year, the I think as beginning lap see one from year going about we of kind ablation EnCompass. we're think the strength open off this

surgeons great our getting about We their patients on part exceeded We're are that we internally. making of saving seeing benefit. that otherwise adoption. has It and really traction a were easier it ablations those had business. and for in surgery cardiac performing We feel lot good that not expectations all time we're patients

And it's particular that we XXXX beyond, there's that and a in that think and on kind room so, lot side. and beyond growth, both for of of mark met

that's major So driver. going to be definitely one growth

Block to of a It's in business the really Number growth people coverage. part very business for driver we our two to Cryo case add expanding. continue is, lot of Nerve going We're on that to new robust help be because a need continues us. into

number XXX penetrate we're but different market, to in just -- and to terms in today and the and of we're over just beginning we that procedures. sites, of physicians As all mentioned, I sites not

growth, overall. think a going for to think we us. nice same not it's the us but do strong to percentage that So, that year Maybe year growth robust going growth for that's really be another be we

much really guidance into our We're sternotomy. not relative to including

-- we for much country. relationships to single that I long groundwork really really in about we sticky I on next because As with but pretty beyond, in have the revenue cardiac the we're surgeon call, a really be we're excited going the as every know year sternotomy, this my period we're well time. of mentioned mentioned that incredibly year script, and so And market laying doing it's

a they're marries the And it strong business surgery field. to -- with for really well very of a cardiac really us. growth for be overall in that's continues our working kind also of performer collaboratively and to and going it's very very feel us solid Clip the be for like then So, a team driver

of growth the So big order, this drivers kind are for year. that of in say, us I'd some

into definitely of continue to of that we and a starting to we've you we're XXXX. leadership before we're real and kind internationally, this kind like more Asia. right then both as benefits saw Europe going tangible to see and of couple of become the COVID, that's new a And of quarter, part We see years put starting meaningful there ago business, in seen, that our feel in

the Great. taking Thanks for questions.

Yeah.

And question our Thank next you. for Piper One with moment from comes Sandler. next Matt question. O'Brien

Your open. line is

expect us on starting [ph] Matt. was growth the good we how more play management? Obviously, driver this bit out I taking XX%. Sam about could moving could is it last Thanks for little And question. off, our This guess, throughout a give a What pain year, year? could for forward? coming you on in information

Well, market. definitely in growth expect continued we that

are about so XX or We now. at people

started. sitting we you ago, about four getting If back that -- therapy were -- kind were just that was we look of years

years. going group XX accounts over volumes of get into week people to people X So, and to people to from grow continue We're every new that we've up to we those and accounts. open the last gone because deeper four as kind case more add deeper

to we're percentage going not the see mentioned, As same growth. I

looking those I don't that if standpoint, think each for. larger of accounts but see we'll from we scale business. I we are as just anticipate still that's what growth the individual robust numbers that getting know you're that that do within

that, it. more to for go sure not where detail with looking you're I'm If than

you CONVERGE a do I And quarter? was could lot point future? just of sort covered of us That's when inflection estimate a us did guess more when bit would it able could on see one the be but you And previously, MIS. in from the you give on think this information we what good. I -- to past little more

did down of but the our with recall, start what the quarter. record. of year-over-year, fourth I'll one you Sam, We Yeah. CONVERGE was on slightly if XXXX in were strongest fourth quarter

on So, but down able overall within seeing activity I the within the We of down in think quarter. of then a workflow accounts do a of reaching quarter development and kind of year-over-year the earlier. scale, number challenge and being that to procedures a mass repeatedly we're number we're program -- the the sequentially fourth meaning the and saw has throughout been patients logistics a year the good accounts, definitely within and that challenge, bigger that's Mike referred to

at look to I'm the we want from we're than give is as build programs. you in from electrophysiologists, time tell this I you What not points, a -- And take not had want gotten does put that and the - expected. feedback we is inflection they but cardiologists time They and more effort, ready both to surgeons, to we've can date. it

date. exact predict the can't I So,

absolutely in ablation, ablation by millions driver tight itself. patients paper of add terms can and well I after fibrillation. that a that patients of of little there atrial from going is at least -- be growth epicardial endocardial And now but than decade. these after year be as the set bit liaison going get is I are is just persistent have longstanding us believe you study, from do share you the to endocardial shows this are with twice these for end much This more running, to that What sites up study the and the we if durable a as to to paper

combination prove And is to and out the really So, that. powerful. more more is data coming

this to is sticky our be be going this year standpoint, is building really think even a from though so, us. And to we going long-term, for year

so Thank you much. Great.

moment from our with Plovanic you. Thank for Bill question And One Canaccord. next next our question. comes

Your line open. is

you me Thanks. Can hear okay? Good Great. evening.

Perfect. Yeah.

Great. Thanks.

So, foundational you're on the it. piggyback just of year, building the question, MIS commentary to a

I year-over-year think expectations the XX% been rate. in or to growth XX% have probably XX%

year? are it's we what the popping XX%, the on you it, that up that it's think about flat And Does building building? mean of XX%? I words accounts? you're the a do stickiness. focused other that year keeps mean one How does you're growth the Because with If is up specifically think in

seems getting and it might started then off. you're So, like they trail accounts

expectation just what is then kind So, curious to that it? you of and how get

Really question. fair Yeah.

for that important that hybrid there's thing assuming way we the guidance is that -- the the I think the we well So, it, businesses about our think growth the and the That's when that year, think to build we're is XX%, business. that. to about -- and business for below driving the most build really XX% our to are of kind other that's

drive our consistent so, And the these hope to board. kind logistics volumes that really that be and sites those across and of of that the that some more and case flow at kind to point is obviously get begin there's upside sticky get some get to they patient through and

to of having the at corporate that commit this absence consistency rate near not point. to kind I'm in But being yet, ready of growth

Cryo we going in growth Nerve Clip built So, likely solid to and significantly that and Block below the that that rate it's guidance above be that is you up, then obviously, ablation going open to the terms how corporate are -- be and that below of having tells a our year. the

not We sitting Cryo you'd maybe an on the overall quite the above high that have Block kind growthy historically as as a said And from overall, standpoint, but quite on see you're open ablation of side. going exceeded tune be in the Nerve we've to the this bit digits. Obviously, that that it's single year. side of

a And follow-up then on Okay. expenses.

one-time and are quarter? received And Your those in Or highest of questions. there's is you. if benefit QX I'm this SG&A, baseline revenue I the future? mean from fourth we that's the thinking be And a should the the any pretty in nominally interesting for Thank it to drop quarter. just curious of that see you more QX my

Bill, benefited of was one-time million of benefit a the tune ago $X let's years the that collection quarter. one had item, say, roughly, a there that one of receivable reserved to several been

spend our us that some We to also one quarter. little fourth some better Travel have the in mind, just against of of in areas saw, the in a comes that side. expense is leverage cases, favorable of on cut the bit kind

spend Cryo I historically, the team, back kind that year the and with will a moderate to year like part international think a We goes. pattern feel as add at and investments robust the globally really and of Nerve And good as well. support solid for on can bit about the good entering we're then you we year growth couple our look would be then team adding SG&A case Block continue the is, and our within the areas with higher within selective the cardiac say drive that percentage of like the within we're on feel as a sales entering year. teams on really more of we'll touched but year look Mike to a -- little start team then

Great. you. Thank

Thank you. next our next with from One question our question. comes And moment for Thibault Marie BTIG.

Your line is open.

have and I uplift can understand revenue Mike of Thanks know details open as you've like XX% in XXXX. growth. here questions for sustained. I the want growth ablation. to evening. wanted how on Hi, be far Angie. this one contributed us ask well to it I taking that past, volume in both that to making given some that as up And price I the know

all help of that much if in terms How into you've So, your of I some continue? how us accounts, of are that price of can where this longer of device. we reach many can your with kind uplift accounts? gone with if And you wonder understand

you numbers. about think about let Angie of across patients the as the only data XX% pricing even it. those of in Yet that early we're Yeah. I'll there, of the XX% this out in to it's I really and might a up we're start, than industry, level beginnings treatment When I'll on kind of and some still is all treating an treatment. the we more guideline market still, Afib the questions. cardiac and one surgery think When think societies. less the follow then market, best it coming More be say

needed pieces to that the of make behind was, we thing that one the it the do of for surgeons that? to normally you Well, easier get big one perform you feedback number how improve don't was heart. And received

it much and sinus over which them targeted and make by seen development easier has the towards of EnCompass, that going we've kind those ablation combine oblique benefits. little that transverse the making it through to four so, audience market, do been and quicker, of is do those years it very behind heart for really bit on and now a a to the get and was for then in patients And for robust all and with

undergoing hopefully, is And to get we're to are so, of that getting day surgery our patients going some that to we and XX% cardiac think XX%, that over take are goal treated. Afib with

significant that And got in think there. us, sits we've so, a of front huge opportunity market I

that getting months when far applies And -- market we're how because we've not we too growth, ahead to only aggressively. our our to XX% don't of the XX% in want really six nine guidance at ourselves to I had put to for just

out, year give very we really the using basis. sense this out that to of working product that how well. now that maybe patients helping were see long-term to had. confident wanted not these are of other to feeling some ablation any more devices any what products than finding shakes it kind we look that are use easier can an of the doing some could so, in ablation kind it's like other we are But Surgeons we surgeons on annualized it do and before And

as to So, multiple rolling we're in learning of it different kind we're we're able out. expand and ways,

been ahead a a long think time. And with years we've out hopefully, help product, for strong great patients So, of it's many, growth and these ourselves that and of get we'll very that. to many XX% I well, got us received

accounts in the pretty Yeah. of in reach, about rate when we Marie, half high accounts the one-third revenue. the then in the to the started second as of XXXX terms early just over we open we'll when meaningful on of we're is benefit in a as in have of think a throughout lap launch continued in ended you really the that order that year accounts number more the U.S. -- conviction ablation of the year. percentage the And launch EnCompass

follow-up you. on Thank really the That's ask cryo I'll of you. guess both Okay. expansion. here helpful, I my

to the exploration us you more What on that you're see from does might lot. doing remind start mentioned sternotomy. the meaningful market? some like? we And sizing You look when of And Thanks in also opportunity? can that revenue a sternotomy

the start I'll with So, sizing.

CABG -- of we've XXX,XXX a believe thoracic So, from to overall. years, feedback for sternotomy kind this their a a customers about their about to and of market sternotomy benefit versus XXX,XXX pain? pain There's we've tremendous there's lot much just procedures. in been To the looking several States give there. XXX,XXX is that sternotomy to at they between And there's add relative the procedures got thoracic procedures alone. the or our been studying the we of how what procedures CABG the United you What is we're difference comparison, pain amount

us, that than overall the So, people we and surgery. with opportunity And doubles -- obviously it the that's it size increases more market of have performing vast. so for relationships

I the and States mean, accounts globally. of we have relationships in almost in those one every United

it we work, we free that making sure and should everybody before it understood really good got access and over the The and year And it or market. it first, foremost. rolling we've Like to that ability effective way patients roll so, ablate? very benefit where work, penetrate does we're how studied that the be to clinically that that we've have we really could last is, and out out safe spins do first so, into

out deep So, and the with our learned around country, team tested from has really KOLs done dives that.

different sites in that is a select so those number phase learn in now, to it is that can than nerve. we best the out the right application from sites is, Next of we're different a to thoracic for it's of about terms part we're it. step of which going It the roll

pain learn that, helping of and get things from patient improve do of them and that. we what last terms So, as for hospital the out that scores how the their does long in such overall benefit

aggressively really early things are in over the number of part the months roll it accounts so. these first those feedback, small launch we're next a XXXX. really six half out more Based go then and big study that to on of will a to into or of really So, year going little begin the the back course of

All right. you. Very helpful. Thank

moment question. One next for our you. Thank

Needham. Our next question comes from Matson with Mike

open. is line Your

one Yeah. Thanks the questions. on gross taking ask wanted to for my margin. I

Angie, inflation had maybe you into XXXX I it could some to XXXX. things be that expect you some said -- So, there's and potential you think of still issues carry the flat in in but mix like XXXX, for

Mike. right, That's

a bit some markets two exited overall quarters more a the XXXX, as became And revenue, come hit increases cost activity that nice a of we with gross in margin. saw cryoSPHERE really we the think our a kind last to bit international and I bigger were across by As our hit supply chain. of does EnCompass our of percentage

reduce spring cost then areas to example, cost So, probe. be that we've production the in about first cryoSPHERE where the out to and year with more but to pretty our here and XX% in really to upside as full XXXX, have EnCompass, within expectation, think our close of production. targeted in really as been team kind we ways the recently the continues XX%, of up and range, evaluate both lean our lean will for coming

it to issues remaining even be maybe just -- could be But think clear, in you some those flat think you still place? of Okay. with

Yes. Correct.

want the any purchasing in you're on a China you there? risk about, Maybe enter the then, could there of talk and there. what And international seeing just based one to ask about new business. more effect markets take and do And Okay. I strength kind value to you the wanted see of see opportunities temperature any there? Good to to are

really business, and had years the throughout acumen we're both impact going just leadership on positive briefly ago Europe several as overall put is mentioned, international Asia. how in to our and market really a place I we So, -- new and that

on As pretty it any don't basis. prospects we're We're there. at got growth piece a Europe on. relates or market on there's hybrid know of new I if in there, markets every can very whether to in go good We've distributor Cryo Block growth we prospect and the Europe, Nerve early the biggest much stages direct early, just on really started therapies but is the that

seen we've solid so, on the really And franchises strong as -- well. growth Clip

that in quite say I'd that throughout so, frankly there's opportunity And Europe. all

of The open on in States. penetration than rate United it the is side our even lower in is business Europe the

more there. awareness on think there we long-term. even really we've don't we growth that And We to that. can now working more that's years but that is inroads need yet. I We're and of some opportunity good leadership a they several We be there, have strong think that got there's I solid really out, make there's So, think EnCompass there and treating. think good lot there

been our Asian we It's markets, Japan reasonably of be world the continues it's It's solid. of contributor. one -- decreasing, China our actually not has line. with many growth like kind surprisingly in to has portions Australia two saw our this in the That big country increasing. In of was great our also year. a but products number of not a growing market. in solid been

market there a products only got today. of We've solid been it's RF for us. our So, kind

three expansive China. more But we of -- We're to years which and of but strong several growth it think strong coming think an really bit in probably still and share that it's today, ago, place, out we solid it's that, not have working out And we volatile. start as and before solid I a was don't presence years we place have a solid portfolio. with in a see very we're distributor So, some little the a on least very there. have back market at ahead

you. Thank Great. Okay.

from with Suraj for you. next One Oppenheimer. our our next Kalia moment question. comes Thank And question

open. is line Your

you me can right? Angie, Mike, hear all

Suraj. Hey, Yeah.

just so questions. Mike, on up Hey, some picking earlier Perfect.

to and outlook talked have just this And you could juxtapose for outlook if offline hybrid stronger about I was open the I wondering counterintuitive. also, So, in and but I remarks you how indication creep your any lukewarm for the prepared -- forward? somewhat potential the also see see would you hybrid if from PFA? love outlook, juxtapose if has And with do moving open you'll versus way for your to CAPLA anything new you

Yeah.

looked that to to what the to not going trial. think business. almost saw the and effect, long-term, impact patients came they're long-term absolutely that have in persistent we as basically longstanding very The CAPLA endocardial our short-term does fact, And the and CONVERGE by I know into, both says actually on out of in itself that data identical catheter be us. PFA CAPLA, I from So, arm on you've zero have the numbers in were trial durable beneficial

the arm of improvement the In that. saw we significant a in with CONVERGE trial, durability

that endo epicardial CONVERGE incredibly to that afterwards most better long-term add is supportive ablation, So, patients all these itself And further you for you a get it. we not and come were when that think for by that effective complementary endocardial have result. to is and Afib the ablation supports CAPLA CAPLA difficult patients, long-term that out these treat papers that to

out believe And of bullish, I So, going that about that, there. in necessarily out. through be faster. should as once effect I get we we XXXX we made actually logistics be and think logistics XXXX, look long-term. all not and the these workflow look growing is data really supports data this data more the that, XXXX, even because that's as to at is we even we not that year, all And but as that's get worked more This me actually about workflow, year

As it PFA, think complementary. it's I again, relates to

speed for as and RF think technology. to, be and I and initial posterior wall. It of PVI, all And as the is the some PFA are worked at obviously, and being tested same there improve to a effectiveness great safety to and close cryo. really devices you them interesting and almost at out beginning on the improve know, some looked look of of mostly and are is

the that early consistent -- PFA the efficacious patients, came persistent into called RF to cryo. the and look data, RF paroxysmal from out I at wall. it when at and very in you clear look year. even to the reasonably same run study when one and MANIFEST well see very with going study, on posterior works cryo you relative on Actually, and you going it's they're results at just look at the to when A that think they're Europe results that

data of a in and longstanding one but a decisions that more business. and reasonably so, That's demonstrate it people to -- -- just not details to do I have in what aspect our year, got se physicians the those efficacious, it's has it the out. are the that you there's going And significant speed make on more and and shows it But patient we're not safety of posterior close markets ablation. with -- as look at in study, then the wall does per that drop-off then those that's if patients today, is nothing to and comes actually the upon that persistent population, mean

what and endocardial see do other so, numbers did have trying we in are And to consistent with just around studies years out the that again I think -- all for very you studies and ablation. with CONVERGE those there that been

really, ablation to the it RF. work of prospects, some quite emboldens And me the to in needing to long-term through to me growth again, makes epicardial PFA frankly, for our logistics short-term. that again, complementary cryo that to our it So, is

One enough. Mike. question, Fair other

I'm position jumping not gun that. LeAAPS are maybe on here I share, a in can information Mike, So and the appreciate is there to you

correctly, for prevent you how you and everything for do what do LAA. intervene. occlude nothing -- additional And I just Any can thrombus systemic idiopathic how I'm of to the would guys I remember the Thank So, great. reliably rates? How questins. color there you formation mean hypothesize you one embolism. the you these event curious have if do or given endpoints of was, you nature mentioned, else with Mike, you in patients, taking the my Mike. might which systemically, be account

and blood source that operating appendage. other fibrillation like a and the a begin question the the atrial by studied Yeah. in the whether not of place atrium When we and No, or sick is any you caused is when really the get that correctly, allows pool look fair for bit caused natural by it's trial. quite pool which atrium, design that you at it's a one to heart great in for -- to to failure,

with it strong we XXX patients, it outlook wasn't -- hypothesized, was have you only have powered did ATLAS only the full for it and the year not or one at this. look study so, albeit piece did at looked we And a not but when that and of you

caused pools You been do actually and failure believe after heart relative come appendage we rate that, atrium, rates into because is basically enhance heart. fibrillation appendage, patients the get basically stroke that where at the lead heart a just frankly, combine and blood data we -- at that that's a that to they're out because don't based And caused around pool? surgery, we've of to high do appendage by likely trabeculation or about that Afib to the that atrial The a the cardiac other going the failure. way And because kind in and know is of by for to and have of of when know good that they to whether there kind stroke able blood to their of that that. having look population is we the higher is sourced on mechanistically, and rate quite situated risk the appendage the to with patients a it weak patient that really does

be going time. is this that confident positive trials result. of very have to over It's long a feel we be So, period long a to obviously a proven and trial

that lot last trial. of data is together of but confident that I So, four kind to of of a that there's going front, it's that that successful researching no years we over guarantee described and feel the a the be put a combination over course this very just on

you. Thank

One question Wise Stifel. with from you. moment is Thank Rick final please. And our

open. is line Your

Good evening. Hi, Mike. Hi, Angie.

How the start curious, worse thinking about? or from so companies lot like Do a just the to Just for familiar getting your CONVERGE. you of if about relative are are constraints of far all we've just only some I pressures of of I heard macro headwinds talked year. kind of two staffing aspect like The we're think getting mentioned macro with, you was One, comments staffing was at the me. the you on correctly, really quick heard ones Mike, where I or picture. macro stable? much better feel

the for thing, the on sort side. same maybe more of inflation Angie, it's And cost

You're as start getting some down? after you the to those of Just as getting Angie, worse year, but or that. slowing said, wanted I we are things frame

Yeah.

say say with I'd of last to worse not most I'd around to us the it's it. it's of or As with relative it staffing, very relatively that better. end My comments stable staffing getting relates specifically year.

of relatively part ramping out they're expectations of through overall, a by kind as this I'd to back in our at on miss Omicron any COVID of the we think though, on off would they constraints and new of were to programs patient. was out bit going for impact time the I that on care and hand underappreciated But little the And have that a coming up. we're that getting They're that and starting say coming and thinking the consistent. worse relative time and staffing not COVID their of through work work kind getting logistics means. how point to

of are think and we ramp up time kind there to are just more For get out -- that still I do staffing on us, time the getting And CONVERGE impact logistics that the work. kind constraints back kind of that and need through get some there side energy. of their to to there's

can we I the on getting more with exited just good the out little this that that and the costs as Rick, point our pricing I of seeing, understand our the chain year, early relative bit in I in some feel think such a coming teams bit to cost would we supply like are were that areas feeling we've overall Yeah. cost year where the think relief we of where travel a was kind key area, hand. do I got travel the side, from suppliers. visibility say, from think the at

little areas a So, kind kind there, in the I'd longer coming on have and say, discretionary some handle suppliers from better a the basis. spend are there's term a mix where of bit feeling in, of of more a where

modeling investment in of How significant seems Great. one LeAAPS, -- back could because of I expense the forward? lot. year? we spending, that move R&D? do do follow-up important given think How saw a Mike, think sales saw about clinical the Thanks significant does like about Do and trials, a than we the get XX% -- some it was investment. of Is we going R&D And obviously last in it's we -- it small towards higher XXXX? dollars think just we really. we

Yeah.

the basically look Whether opportunity. success the Angie I the are are maybe that could but mean, I and we of expansion sure kind I'll just undertreated think help to things we LeAAPS make land are modeling trials believe continue well and answer over do They the want one When today like is that market -- let coming think Before I about actually what about; patients that today, be investing the and These question, -- we're going therapies find expand them it's we in markets lay into talked next treated. markets. of well I new philosophically, with we that I with expanding for as -- to that I there. decades existing talked IST, have to new to products sternotomy. clinical on. market define where do

of think next us be allow to and really I a the these really that kind or so into and expand billions. big course of are multiple the over market decade company things robust that

the into positioned first investments. we're believe there. be we making right -- evidence think adoption are when of to And getting not so on is we're actually it's we're first of why they're out uniquely going physicians market level And based matters it also, we the that just to but that the the that's scientific science making areas. clinical the decisions, those So terms the making because differentiation, in and

to to over kind more some the details talk numbers. that, it of Angie With I'll maybe turn of about

percentage expect said the prepared revenue. Yeah. XX% spend we our R&D to of XX% as year, Rick, about for we a remarks,

continuing next over of -- the platform and quarter-to-quarter, revenue off But on years couple little of think bit the a of the variability number. that R&D see the of technology teens. percentage the pace real a we think in trials lens clinical may of will I you clinical of stay as upper to near-term to based advance commitment enrollment, in trial our that expansion a with

you. Thank

Carrel I like back turn would the to remarks. to conference now for Mike closing

We sustainability one. company. after to everybody in us joining interest a for Great. us Again, look at thank an forward great AtriCure. we your Have XXXX. for Thanks our demonstrating growth you for here and outstanding the engine and joining have that

Thank call. conference you participating. today's concludes for This

now disconnect. may You