Acutus Medical (AFIB) 11 May 232023 Q1 Earnings call transcript

Good afternoon and thank you for standing by. Welcome to the Acutus Medical First Quarter 2023 Conference Call. [Operator Instructions]

I would now like to hand the conference over to your speaker today, Caroline Corner, Investor Relations.

Thank you, operator. quarter call. first Acutus' to XXXX earnings Welcome

Joining Executive Financial Officer; today's call Officer. Roman, Chief is David and me on Takeo Mukai, Chief

PM statements for of based this XX-K. except Form during with call, applicable provided as Acutus' under undertakes required be Acutus' available website, Acutus results today. which management's the on in projections including update section the on with press statements historical the release on website XXXX discussed available and obligation factors by is will may differ under section Statements no the Any this Time. This are the that most these and Acutus website filings Acutus' in detail Factors filed do details Forward-Looking Act encouraged an forward-looking in first section release as Acutus' that include to X-K to call Pacific be XXXX. are more on recent to statements, Private matters risk from to considered are performance, expectations relate X.XX about described are you of statements. Factors of with the www.acutusmedical.com of forward-looking the law. made has Acutus' additional call of future press quarter exhibit the in to the attached today recording financial Reform Risk should Securities call these the as today's includes Acutus under Acutus' cause statements statements All the results not The filings forward-looking also Litigation results. fact Investors also SEC review. SEC, will Form by meaning A within Acutus discussed SEC forward-looking including

David. Now, like to call to turn I over would the

everyone. and Caroline afternoon, you, good Thank

year. Our the how on and of business the outlook imperatives, today on for our include will rest perspective in the our performing prepared updates strategic some key is QX remarks

to increased throughout priority QX a over our and first for a accelerated our the Starting drive commercial of to Biotronik. with utilization quarter on XX% start outside month-over-month procedure increasing got basis. a the the March AcQMap. our full off adoption volumes adoption slow with quarter, procedure procedure and but year-over-year expansion for portfolio by driven on with our continued U.S. commercial basis geographic partner, Overall, volumes volumes

during U.S. QX quarter showed and growth the progress with procedure steady in exited volumes March.

anticipate year are and disposable for trajectory throughout procedures, seeing us and strong trends product AcQMap procedure here a sequentially second on we Importantly, correspondingly, utilization to and in revenue. the encouraging ramp the quarter put volumes back

the growth major Over our short, is in our driver medium product and a development long-term, pipeline. achieving objectives

investments both toward are our our expanding position Our geared addressable and portfolio strengthening opportunity.

launches product most ranging EP multiple first-time keep patients new the these AF to persistent of the redo treatment from us complex segment market, the focused of All on patients. difficult

As regularly procedures. in today we discussed have previously, redo used AcQMap is most

the same Specifically, utilization about XX% of procedure our value segments a portion proposition. procedures and only of time, in and XX% differentiation represent AcQMap these these these underscore cases. total At results clinical procedures redo complex clear OUS has come from ablation of sustained in our segment. and the categories U.S.

as strengthening years, as further primary is segment Over towards pipeline bridging in the next our position cases. re-treatment our the geared use well several into

These around therapy AcQMap their as innovations XX as categories X development include like software, next-generation AcQMap including largely center ablation systems. and The to platforms enter required disposables. software algorithm our new and and well

XXXX the contribute that cadence and course We revenue of new will procedure volume XXXX of and expect to launch increased over utilization, to case. products higher a growth steady per

the features their last to software way when year. ablation later X.X which integrated week AcQMap for an pair approved clearance system software this FDA received for AcQBlate paved We with platform

be additional will pipeline, product of new our to addition clinical to In research. AcQMap adoption critical the

AF of course on that year, patients the release freedom we this AF X UNCOVER that from year. XX% publications presentations persistent study plans showed builds have the data Over in several and of to at

reminder, AF incumbent XX% year cases in de X to show landmark redo XX% persistent treatment range in novo XX% using a for cases. XX% rates success of the systems most As for the studies to and

population RECOVER April, of clinical complex study demonstrated were In retreatment segment an in data EP the evaluated from AcQMap's the published AF online extremely impact in study Europace. the This further patient market. and

enrollment, year. where we X prior this AF utility vein isolation further while the Specifically, procedures year, at showed XX% to at penetration only drive AcQMap's had and population confirm reported $XXX atrial with who differentiation freedom entire category. results before in XX% varying achieved million from freedom or patients expect pulmonary These X results further the market undergone PVI from fibrillation redo into study

AF population. XX. non-pulmonary In of to identify data an outcomes the present Utilizing on will AcQMap that And in forward RECOVER clinical of we look addition Rhythm study, using to complex AcQMap when expanded further Society on this this technology therapy emerging support AF year's demonstrate This a AcQMap evaluated to persistent the May we is in strong vein identify study Heart AF guide can utilization. AcQMap where expect patients. the triggers use investigators to study to late-breaking special session to science triggers Sunday, at

the engage customers meetings, a user physician-led to group Beyond the presentation, booth at across fulsome partners several world. will business and in with and this during AcQMap users program our have development from opportunities HRS, conference study featuring presentations we for

opportunity offer of insight will to our some We get recently into future and the launched products more development. also pipeline

performance. strengthen to to gears Switching efforts financial our our

these well non-GAAP QX improvement and both in make gross to strengthen cash our steps the position in cover as during to more with in non-GAAP as and extend his remarks continue the cash XXXX continue margin. financial to necessary Takeo topics our will during we burn expenses significant but operating significant declines take overall, year-over-year detail runway. We progress prepared

and of the us stronger year product are execution. clinical and XXXX cadence value of thereafter, the steady the combined start together, data well for foundation all and our new a and position for our with trajectory driven maximize by rest initiatives, launches, to When this future to all we allow with for Putting the are laying this pleased improvement us stakeholders. operational to will commercial business performance

call to With turn will our walk Takeo to I financial now over the through that, results.

Thank you, David and afternoon, good everyone.

our During XXXX results to my update will remarks for year outlook XXXX. today, I as first review as quarter an provide our well full

in up to with first Through quarter. installed to of service base, revenue balance an systems into quarter, rent year, We revenue. new base are placed in globally, from the primarily our and can sequentially first adoption. strong of remaining compared targeted the expect of in driven $X.X service, last The XX% For ago and by the where we year-over-year while year consoles to increase increases ensure installed XX million XX% growth sales other million procedure quarter. first global the disposable continue $X.X net quarter ended the we drive was

Our priority per revenue just remains base. installed volumes, growth rather the and procedure procedure utilization growing in than

did and revenue the left-heart distribution any quarter of was in that year XXXX ago record with by QX $X.X of $XXX,XXX States supply revenue XXXX. million $X.X grew of compared to agreement outside and in up earlier in orders the million continue through from as year. first an back QX quarter the chain revenue XXXX. rents was impacted Service, we remediate other capital disruptions in million the in estimated year AcQMap the United the driven revenue Similar with Disposables of $X.X emerged our first we by not X% to first growth quarter, Medtronic. comparable growth disposables period, access ago to the

resolution full We to are working this the diligently of the price resolve to expect year. by and constraints end continue

gross compared XXX% XX% the quarter in driven the of to improved improvements our the non-GAAP negative volumes. represents of quarter and sequential in Non-GAAP strongest gross was registered and leverage the improvement from fourth our first performance in efficiencies year-over-year sequentially favorable on quarter margins XX% higher in primarily of XXXX. QX improved quarter since XXXX. The XXXX was margin of manufacturing production second by negative This XXXX and in negative

improvement positive XXXX. expect to the XXXX year show margin attention to further path QX gross We continue gross to our improving to and dedicate full margins the will significant for to forecast in and continue of

trajectory yield focused several product efficiency, work volumes gross on through ongoing streams drive driving In improved and reduce bringing remain in improved processes select to addition margins, costs we to this in-house.

quarter a Non-GAAP first operating were the period of XX% expenses down from basis. sequential last million on the same XXXX, slightly in $XX.X approximately and down year

non-GAAP a around full expenses to XXXX. We management continue on as compared benefits year-over-year to XXXX year of to our realize decline expect the and discipline expense basis our

$X per non-GAAP million first net first for Excluding loss $XX.X share loss the specified compared was net or $XX.X per items, XXXX million XXXX quarter of or of quarter for our to non-GAAP a $X.XX of share. the

cash of including at million. the end quarter was XXXX total the cash of equivalents cash Our balance, and $XX.X first restricted

$XX credit first excluding Our cash milestone was XX% versus million retention burn, the in payments the quarter, and prior year. the down employee

first bonuses to higher cash to burn paid as quarter annual The were accrued see tends employees. out

demand. Our purchases supply to support inventory replenished as higher saw we future and first quarter also higher current projected

pleased improvements on we'll in made intense Overall, financial the our optimizing reducing we position. with focus our and drive to are have continue quarterly we burn cash

of and full expansion procedure globally, installed year the in AcQBlate disposable million, of half $XX range expect United volumes XXXX, by AcQMap the XXXX associated the million in and second growth a targeted our be approval $XX For in now we to base to driven States. revenue sales in

continued appreciate to We call turn to Q&A and I now the back support facilitate operator and our interest your will the session.

Our at first [Operator question of Marie the BTIG. line comes from Thibault Instructions]

comes question from Our next Plovanic at Genuity. Canaccord William

tonight. Congrats start the just It's If on for I could John quarter. timing the AcQBlate. Bill for update on on for just

I about the second know plans long approval? that be? for for out market release? should How but half How timing we And launch? limited any Just -- think any called could the specific the then you

the guidance year we full on our second for half last AcQBlate call, So the as the of said in year. approval our contemplated

is expectation we what March. unchanged in had that from So shared

is market a of is a AcQBlate since bit different a on XXXX, the because way probably obviously, and product. used already completely in new-to-market reminder, limited would United March a for market States As the little approach benefits has Europe been outside the we and release approved

AcQMap in those which through we procedures today very approval, or you have know, relates go growing additional we is obviously, be us when for that AcQBlate. feedback the their there with our of utilization with new But catheter a process obviously an you it highest as will any have given to would we other start So will categories. accounts critical accounts consistent adoption where primary sit product. toward -- we from to to And that as committee by launch integration ablation where targets

outlook XXXX. AcQBlate current contemplates in a our So contribution fairly from modest

PMA average also we remind The of, now FDA would AcQBlate submitted October XXX right review just had at I thing the you time XXX last running we one of between calendar as The is -- had and in year. days.

we So remain of if place an a use good confident kind that probably through expected of Obviously, and the diligently worked second responses approval year. at that's that and land mark the remediation through and working launch an FDA sort benchmark, the half of receive XX-day you approval. as have in deficiency you also are in a to very the

million. And $X.X you around number? at then on just comfort that level the talk QX, the just about is currently Street Can

Yes.

the negatively So $XXX,XXX. bit results on the challenges which had in quarter of call a our about little first impacted supply we talked extent the chain to range

There materials. we to support and resumed to actively our we are just to those earlier the future of everybody, those call time since a this no were when raw And our challenges. AcQMap are Those rebuild materials continuing was of resolving year related catheter. around late chain in supply probably supply some here reground basket to inventory raw of chain right dynamics We March demand. have receiving time period

that shortages resolved second be fully We quarter the the year. of through will confident are they very balance supply not in resolve here chain but will the

So we is, I think would only thing than QX the out other did better about as expected. you a QX point bit little

little outlook bit the our for year. are We a here raising

That We the half half. half second quarter thought those of at you dynamics, XX% may more the the supply the XX% -- first second may weighting of year. that more the some and the -- in like we'd first XX% in about in range had first revenue call a on half, in we look commented balance half. Given the see our to of on of on the chain quarter half be a of XX%, back first weighting being a number fourth

all first demand thing I quarter the certain not just at has back is, The the supply orders mention want impacted for chain to last inability or to the on of customers end dynamics the at supply product.

of AcQMap We do losing patients no the seen there because we not specific are subset is procedure the other lost a many where treated. have as volumes. used very business in for options that we Where of not are see transient, really cases being

we get So orders those are filled. seeing

canceled. seeing We orders are purchase not be

So are us -- we year. the the gives in build confidence throughout that's what revenue in

comes question Margaret from next Kaczor William Our from Blair.

for [indiscernible] on is Margaret. This

So sitting the accelerator the quarter, trajectory in pushing with about more of and terms kind installed base of talked I base of think at a now. focus installed the the the after making XXX it of you've

So through could bit or rest expectation you a users? the with your your just then of number with high the in some lower centers ramp year coming the of expected? than walk throughout first us with approach And volume those the quarter

Sure.

in procedures quarter to rationalize our growth, first for focus did the on revenue utilization in XXX So where growth and procedure. we accounts installed clarify first procedure maybe volume base quarter to in was we just XX the to base and console We per installed did drive the quarter. continue higher can in and look the something, first

things that revenue is per the of One we standout the big really for we not talk one us in growth metrics metric the That is we of was our of the call of ultimately was key an that believe that business. quarter case that about significant first a in indicator -- did the health on this quarter. really the the

not do base company an reporting base our XXXX. the installed recognize went grow something of performance We installed business. really it health to the the the since it's in of minds, to is envision I the we've attention indicator In public. and the or been here

progressive installed base. in We exit with expect and growth that XXXX we quarter XXXX will the each through

and Our to AcQMap be a categories penetration has differentiation focus, revenue for the procedure. driving has growth, procedure clear into increased driving greater where however, on volume driving

got in volume at accounts early of things look the start kind that are to And the slow We a if of some going off you on high second call had how we in we had kind about quarter, here very the utilization that talked year. year. lower the to

more a levers of a volumes the volume into is increased seen significant over driving types. utilization drive procedure in pick-up growth that little you And within AcQMap dig primary procedure further, have users if QX. We high to bit course our across of

de redo, So second redo, first persistent. novo

users is on per bringing second The new account.

number people And here growing This has -- have have users. second is accounts utilization then been fourth back we're and And of is actually a we third the had So installed quarter once seeing the had now a into our used AcQMap we now their re-engaging contributor new as and reasons, the third who up. utilization positive of accounts AcQMap is a the for where multiple variety base. slowed former pick expanding down in that users. is really something going

only installed not that, know RECOVER one. follow-up. it's since results release? sorry a HRS hear excitement but quick your been Was base following first a procedures I or on spread conversations just in And is net weeks then specifically guess, the the next I there And for And the users awareness the you're to more any did amongst trying something during weekend? U.S. what that you at few

the for publication that while. published been data that of think a thank the for RECOVER of get studies for question, AF to was I And reasons. is -- one we've important waiting for that a because of that us you couple

a and only is a of space, of physician engagement. to publication had having First, clinical years know, continuous we've flow data which significant critical sustaining as you in adoption it's the clinical in couple this

over focus complex to really of that strategy well namely which we've aligned so or cases. The refocused bringing on our to past year target market with been been has our second it uniquely the kind is, redo patients,

been So community the going dovetail the and does well market engaging from RECOVER how the year. very we've physician we've data how been to past over with

and HRS But where get that's amount been RECOVER I the that would hosted at users And and of a did attention attention would In accounts. is have replicate of the to booth. the interim, helps expect published the the medium-level significant And is April, see potentially physician U.S. accounts quite It's company really are newer number results former we a meetings. actually bit U.S. look from the even driving as setting. amount great where definitely there say well. our I in some engagement to It since have on a we of to in physicians exploring a users specifically, here we're significant it in as a U.S. we will of something in the users. a RECOVER have results re-engage some community. physician of of to types even And tool those in at

happy thus I've So been with the response. far, very

a will additional be with great go And 'XX key and some evaluating case opportunity is this into use HRS I interest and data going in little to the think for think users. to bit beyond. I us detail users a specific this in AcQMap in some in then prospective drive of our very more

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

I'm me. can back. hope I you hear

Marie. can. Yes, We

your probably sorry. I'm but that. commentary I sorry Okay. some technical of of issues. tons I so about have missed

access hear about the Medtronic is Medtronic early kind of I is this think up any assume kind at service in or feedback the of you of revenue products. we days sales point? the this the should showing about And to early very of wanted ask anything to of that some How on the launch? fair So qualitative it here that the left-heart of

And our have we commercial users been perspective, progressing. been of took the have the over with at given breadth several picked very product. ever standalone very to unsurprisingly, done into have QX. pleased late would product very, with able distribution hands impressed commercial we fantastic we in pace Medtronic a more a is up how Medtronic basis. very been this months, Medtronic with and their So distribution, which partnership past prospective has many getting has over job than depth From of a on And this

our high demand. continuously side, them and their From is our supply deliver can sure meet focus dependable making quality ever-growing and top that we

over we additional the So But Medtronic's on reflect things the resources that we with development ensure going. we how past partnership to agreement can year, investing the growth. are support to overall, pleased I and as of and continue are growth are very here

reporting the shows line a is different in also of a is from little up impact revenue. on the in disposable perspective, -- is the in Just couple a net asset and One the the that sale bit then sales other line March. on in the paid places. the other on in an And income annual on gets where asset basis And to the start that's out -- accrue other statement on we gain. earn-out

Takeo. for follow-up my maybe one As here,

ebbs something it You should of of margins, think it Is are better of a they still about bit quarter How mentioned we margin year? gross some than linear? to that you this in this Is about came gross investments should as that the metric making line? positive bit next How year. we and throughout flows margin we gross and more you're here? first that quarter holding especially think a expected goal

And volumes then are footprint. on saw pleased the support manufacturing higher with basis making portfolio. for have in and And here very the production margin we're across gross our And we primary optimizing and seeing from our gross here. of our last that all there's products efficiencies the X second we a is, comes factors. sequential quarters We really with that it the the X the our progress No, we're positive margins. our

with manufacturing that we're getting definitely, our to the volumes aligns production footprint. more closely So

And improvement quarter, first to hasn't So positive see throughout as margins quarters. changed. we've in gross here stated, we do to expect the on path progressive the that

Thank time, your At program. you for this participation the today's in conclude conference. we

may You disconnect. now