Acutus Medical (AFIB) 7 Aug 232023 Q2 Earnings call transcript

Good day, and thank you for standing by, and welcome to the Acutus Medical Second Quarter 2023 Earnings Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded.

I would now like to turn the conference over to your speaker today, Caroline Corner of Investor Relations. Please go ahead.

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

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

release press the statements SEC the as historical on in may differ also in section Acutus' this statements This forward-looking the filings that the X-K Factors do Act the forward-looking that include the the to to call most are exhibit be XXXX. with Private matters discussed from under with considered relate of described Form Acutus' in statements. SEC, today attached of Form of made call Acutus' Factors detail to Reform should Securities under these cause statements an statements All are discussed section results not including XX-K. forward-looking Risk recent Litigation factors facts will in the filed more meaning within and risk forward-looking

provided based law. update statements except forward-looking obligation during to required for these including expectations projections Acutus no today. applicable by management's Any of as on performance, undertakes call, are statements, this future as

p.m. Acutus' Acutus press financial the also www.acutusmedical.com be encouraged to Acutus' the of call Time. release on section recording results about today's Pacific Investors X:XX website, details includes SEC will and available additional under which results. available on website Acutus' quarter you are is Acutus' XXXX also with website filings, the has second by review. A Acutus'

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

everyone. good Thank you, Caroline, afternoon, and

procedure physician the thanks highest of highest of our base, I'm strategic on utilization, to quarter, including report achieving achieved disciplined focus major and and our this very our installed our objectives. I'm number we record to with users, several console highest team's committed have AcQMap pleased thrilled partners achievements, global level progress the volumes,

the momentum remarks to and of updates balance of overview to our drive business second XXXX growth today review plans of will on into continue and our a prepared results through include in the key imperatives, our quarter XXXX. an Our

of first AcQMap. our with utilization to drive Starting and top priority

our XXX trend procedures globally, of the During the and procedures strong incremental of XX% volumes procedure last prior earnings continued discussed we compared our volume study. in year on on recorded up AcQMap following acceleration QX, we highest sequentially. representing growth traction the the The RECOVER call to XX% with AF record, totaling publication

well procedure expand and strategy Our per of categories drive improve new the users number growth. our contributing to addressable to are experience launches account as to physician positively as product through same account user increase utilization all

AcQMap also Recent X.X software user that such workflow and to as procedure enhancements included have experience procedural launches increased helped volumes. bolster

users Specifically, of former five technology strongest upgrades quarters. introduced we AcQMap. year. note reengage to saw accounts add has new as our embraced existing the product these our well over over in as U.S., performance have cohorts been ability in at particular past A users Both the the of and

benefit following from year. our the when portfolio indicator is to this modalities. good expansion performance in Biotronik a portfolio think adoption the AcQMap's support physician systems. our driving successful we their it also ablation expand AcQMap conjunction outside broader dynamics market and approaches comes PFA as targeted other last U.S., U.S. more system geographic as what new U.S. to as strategy workflow preference expect we evolve or pulsed in And a base the a and U.S. proven well well ability of to to to full as multiple of strategic ablation include field is utilizing and context with strong The with reorganization business our the ablation streamline manufacturers' resources commercial Outside in is as cases our installed offering continued partner,

pipeline. development long-term our achieving and growth objectives is product to our Essential strategy

and opportunity persistent complex expanding patients market, segment today organic Our from ahead. all our our in product first-time multiple launches Upcoming investments EP geared patients. our ranging are the AF strengthen the strengthening the addressable of to position toward position redo difficult both most

clearance be the AcQMap fourth and received in for we X, release Importantly, this expect entering to market in early full quarter we year. July, XXX(k) of

As previously, more pickup if an the AcQMap by launches impact we following our two in significant and launch procedure I volumes mentioned encouraged to of are have very X.X software our expect business. on equal, the next not

improve procedural significantly of of advanced the the AcQMap efficiency and system. clinical X automation expands capabilities and the leveraging to AcQMap algorithms platform, utility

Following year. the to ablation by catheter we the U.S. sensing of the AcQMap FORCE on are track launch, AcQBlate the end X system and gain approval for

response We expect FDA the quarter. submit third our of PMA to by end the

new FDA that cross-functional to devices Biotronik, legislation this letter regarding into electromechanical year. ensure with required response with compliance for cybersecurity went partner, effect collaboration Our earlier our

We the corresponding extensive work and are gating remediation items address the confident key assessment, to approval. validation

and of our opportunity. of single mapping differentiated while AcQMap's foundational we further to complemented The clinical to our XXXX, session, solution, mapping also AcQMap conforming the enter launch U.S. portfolio is, therefore, addressable offer noncontact will which launch AcQMap be because launch a expect we mapping when software additional component adds workflow. to XX is us in software physicians' we benefits by and integrate it a As features and ablation XX a contact This to to allowing capability midyear. expanding a bring upcoming expand traditional all complete critical

expect to with target which of our portfolio we Xx approximately our to to we gain the of product bidirectional By look catheter, which substantially market the second to portfolio. $X billion across feature market, today's capabilities. half of expanded, have geographies nearly we will approval of enabling XXXX, we end steering the is next-generation us expect XXXX, multiple AcQBlate participate addressable As also in

market our outlook past expanding new is discussing drive XXXX consistent in performance with to performance product XXXX combination and growth of been year. accelerated the strengthened gives confidence the The with launches us over commercial we've in continued and the

Switching gears strengthen to our our financial efforts to performance.

well XXXX expenses QX progress as margin. year-over-year improvement declines gross with significant operating non-GAAP non-GAAP in both our as make during cash to We burn in significant continue and

quarter, to supply the support to long forward time some did demand. decision the lead on to During ensure inventory increasing make adequate we pull items purchases

these cover financial this more take together, our performance year Putting strengthen the in we detail to prepared continue our remarks. during is momentum will financial steps business our But his of and the position overall, are capital palpable. pleased Takeo the resources. necessary we to all half in optimize topics first with and our

complex positioning trajectory exceptionally and build us stakeholders. clinical with the to initiatives, allow all improvement by When leadership our the laying product the driven combined data diagnosis treatment will commercial arrhythmias are value for steady to and for cadence execution. a future of of We operational well launches, new long-term and foundation releases is us this business in maximize

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

Thank and afternoon, David, good you, everyone.

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

revenue net $X.X primarily quarter, higher to $X.X second The increases million quarter the capital year-over-year second disposable For conversions increase and of driven compared and sales, was in the XXXX. by in million revenue. other rent XX% of service,

to We installed and entire with and represents from we revenue XX remaining forward placed the strategy performance systems new installed to in our of base targeted date reflects quarter we base globally, Through XX strong expect drive second are quarter our quarter year procedure growth adoption. of quarter. an into consoles on while set of we where the up sequentially ended execution the ago. ensure focus to a continue last global year, largest company's can balance net service second the the The

XX% is and revenue volume, the utilization volumes quarter priority driven second and evidenced with Disposables growth by a XXXX, installed period the remains of positive revenue agreement and heart driving the XXXX through by of in growth growing just per QX this our compared procedure of strategy record million in Medtronic. quarter And $X.X our procedure left Our in QX rather as than returns procedure results. distribution second access to or base.

We towards to end to our product key back by supply made expect the on solid normalize and year. also dynamics continue progress of improving the we lines, orders

million other was the from million second million quarter conversions all of revenue in XXXX, rent million $X.X to in revenue capital by second of up driven $X.X in in $X.X Service, regions. of XXXX. the QX and higher $X.X Capital compared quarter

leverage of volumes. of to the quarter margin on in QX to the in quarter sequentially The compared improved the negative production year. efficiencies was be in in XX% XX% and from and in gross by second favorable margins registered prior driven higher first our continues negative the improved gross Non-GAAP improvements improvement manufacturing negative XXX% non-GAAP primarily

XXXX. Improving our a are XXXX margin we on in for be forecasted of in to year-over-year to emphasis gross margin marked with gross us, QX a improvements pace and show positive point path continues

future than production we already will gross experience to As in costs, ramp faster margin. and improvement leading volumes to have continue up overhead started to labor

trajectory, improving processes improved driving addition million of remain In yields this to operating in from approximately were in-house. year. Non-GAAP we the XX% $XX.X expenses XXXX, focused driving same quarter on the and second last period down select volumes bringing efficiency,

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

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

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

was Our the cash from quarter. million prior the $XX.X in XX% burn second down quarter, second year

volumes, launches, of now access by AcQBlate AcQMap For United in procedure revenue to software be the of expect range approval million, distribution positive a in the to from $XX QX XXXX, full a States. year from left and momentum new growth heart revenue driven products in $XX we million

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

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

Hi your to here. bit the to Takeo. little on about first Wanted ask nice guidance. a quarter more understand David. Hi Congrats here

to had this record that a lot volume. nice of wins quarter procedure led that You

You this some back you I'm users, in mentioned revenue reengaging that able year. earlier the recapture And some from cases. PFA to use were assuming former orders

being tell bit you what's about you of can and much on are guidance? sustainable So can little how of that sort these us Anything in cadence assumed here? the a wins

Sure. Thanks, Marie.

that the quarter. through Let results factors of in to the me contributed each walk

tracking - in procedure pretty are was and Right procedure now, the we really closely First one dynamics supply volumes with volumes. another. revenue we face, our given

the the in talked we And will through managing of disruption those were in QX. are resolve, headwinds have this supply of from still supply to about some dynamics we able that some course chain throughout We the quarter, year. face second while we

Importantly, materials resolve will dynamics that's by pick up raw us - we year. have we gives end for supply seeing the key AcQMap what the chain those and confidence for are shipments that of

will we year, Europe the to assumptions to U.S. seasonality procedure relates the in in expect outside here - XX% the actually end for of quarter. it year. but rest volumes. we some the here Europe and into it's Maybe full guidance volumes higher third in by represents the As bit procedure carry some see of about and XX%, the some a little of than back in represents our think resolution with QX, will orders QX I resolve the likely

similar to expect would of as half back fairly the year. in we saw So the the our characterize first we in trends half year of the performance here

year. If half of a the last had the of in on balance revenue first in about back XX% to half you go the with XXXX, we half, first kind basis, to back the year half of XX% of second

was look in in specifically then you XX% came balance coming at the of half, QX. it If and second the the QX, about revenue

out we only similar capital, The year. back is the in fairly here additional that thing the half So here saw you expect I progression year point quarter-to-quarter would last would of year. has ebbs the recorded know, capital. We of have you the in QX quarter a quarter decent capital flows, as first revenue its and on did no here too. We in

a variable the but here environment. relative assumptions the our of given base heroic in of revenue year, making CapEx that capital obviously size we're of total is phasing impact the could the that half around no revenue the So to back

there. Okay. helpful. heroic Nothing That's really

might with expectations? utilization taking bit our little but that, bit to ramp AcQBlate, quickly it and in What about shift Okay. of What timing And for kind should think in for improvements of we committees questions. launch? we approval the is of some expected. a you a we to the like in the go about QX maybe X.X Thanks I then can sounds plus VAC about ask a terms timing are through how that thinking start for the see catheter as

Sure.

we a the better than expected. had this utilization quite So side, very on encouraged. we've been And has frankly, little bit trended

procedure we and past especially some executed On of over in seeing that X months. the heels in volumes, pickup, have we the are utilization the the software on of the U.S. releases

bit critical software aligning performance procedure had the make that benefits commented simplifying for and we of we of user a I one to the workflow, better the not on that to improvements little experience back go the conventional to business, of AcQMap observed to would were be we things which reflect and more think was and as with extent that customers. difficult our needed ensuring access the the on

is years physicians And the that patients the more Afib prepared remarks my or they one doing as the impact bringing to interest more coming and found many utilizing that who targeted subsequently had pace. that who significant a solutions more is we looking our of is business not software several that were meet a did their mentioned of very Acutus for for consistent simplifying whether and technology on back ago, expected. persistent And market because well system complex at the some to technology in showing expectations here regularly impact an might more procedure was in releases what workflow, than are as I have has upgrades things through had patients

in helping that So the especially is procedure drive U.S. volumes the in higher-than-planned -

we a physicians ultimately growth into help and that customers, use help to something allowing with fits from procedure to basis. how our a that, capture perspective continue becomes AcQBlate truly So as this us will revenue stand-alone Acutus our more also per anywhere XX% performance accelerate from on think to cost XX% and about

and time So see line we expect largely from coming approval in guidance as the we'll sort account base, you that account drive to from the installed think utilize removal to to here, accounts. this we would repositioning look at and the if modest AcQBlate is contribution about in then of adoption QX, our existing have as because fairly reflected process. And largely come a new end of we catalyst our

will on AcQBlate the we AcQBlate given to a the both in later the drive that and approval seeing is be be installed growing some of that, way, adoption as year. outside and launch procedures business we kind XXXX. are the especially as mapping overall in think U.S. the await meaningful in in There still basis. that base will year that when this U.S. AcQBlate the a markets we in helping But really of regular about important But more

That's very you, David. helpful. Thank

Thank you.

Our Canaccord Young next comes from question the line John from Genuity. Go ahead, John

on Plovanic. Bill start cash runway for throughout rest Maybe the about expectations taking cash current for on John Thanks just in It's of our questions. QX, the cash burn burn million. talk and the $XX for the you just XXXX? Can

Sure, John.

XX-Q So that will be shortly. our you'll filed in see

a We here. year continue to at expect least to of have cash

had made capital-related of few incremental and about items. here. inventory have on supply We So, our talked A purchases, burn respect cash $X about we progress to significant reducing the calls. both chain burn, talk as disposals several our here, things we've about with past to cash on million

reflect and demand longer And appropriate the seeing also higher time ensure that items. to of supply have that's of we we're lead that the to some really

inventory you kind as our a hand-to-mouth if and the from and with last As very down through back purchasing to did move initiatives. we go significantly, own - financial more to restructuring respect bring look you went of strategy at our year, much inventory statements we

demand respect see back more our pick a business. us to lot starting we're commercial as Now and offense again, to up play with

lead bringing are of time long of those some We purchases forward items.

that our are the into year in to here, back factors continue is XXXX, both key the and continued see. the and burn, will to improvement we of one of seeing expect gross impact half cash that think margin the in I

trajectory, you we higher that manufacturing of also demand, - a toward just as to overhead on our one so move position, our see we're Because a reduced on but and cash impact number footprint. start - positive volume through it the more is is why not has reduce that material focused driving significantly key that

that looking reduce in-house at processes we are can We to more bring costs.

ensuring are We the key seeing this what the burn to that from right double-digits. on we yields investment, focused to from toggle down mid-teens is driving efficiency the the cash and seeing maximizing, are - that low on because products like in you're something primary that higher rigorously the now of go towards

all physicians has you're color. updates United in the you that's comps been Great. traction growth I seen accounts Thanks color and or these already hearing a procedure nice on the just appreciate where that mapping this, And see seeing volume and/or anything your on Are in taking any you've then both the States, incremental a of your the procedures it you're I'm comments identifiable forward? more you of if place? more correctly, seeing, adding Maybe just like continued going there. in centers terms lot questions. from that's using same our pattern in academic seeing of seems that

Yes. Thanks John. last last follow-up And maybe the question. one your on just for question,

for into about access is XXXX. of we on of third As XXXX, extended year entered heart talked and agreement XXXX. through into now. April left a well in over the quarter cash we've certainly we through about the middle having Medtronic probably have talked third That - kind When the of today with the

internal initiatives to make pushing we around in that the out our very continue And progress underlying good through own business. strength

disciplined I several, with level now continue expenses. years. at respect headcount decisions We lowest to make its to in believe our sits very, operating almost several

to is out runway. to making are allowing continue effort which our every cash optimize resources, So, we us push to

out business the comment, can't so. and With in job AcQMap. very again, more usage, procedure And both do incredible are we'll And are I feasible we've continue every the while push we we're will drive using November, cash seeing pattern runway. undertaking I as what to to yes, well been where consistent respect obviously, in say, that done, that, volumes, we has really as a on to about physicians growth in effort think,

rewind - for role, really that as being used super of things I you complex real And I like an had super, the a into aha think moment adjunct how relegated ago, to in been AcQMap kind XX the me, of XX if months was much moved this one to cases. was when system

take those Second, like - different your enough third of reduce, isn't that there fourth or they means centers. third That procedure. at aren't And or so reduce. procedures just many place

big can't on enough build that. You really business a

that So persistent, routine all in for making are everyday more hundreds have combined. this product both making the of been development those we've focus about and first procedures novo segment of of which there AcQMap thousands investments redo in de or complex of been relevant whether still that's market, the cases of

That has differences the procedure volumes. primary in that uptick of the been is resulting one in

AcQMap As but and physician not get playing AcQMap can better they more cases, finding to albeit only way that a extraordinarily can that are - for complex us field. still that complex these a of the put are lack use of use routine, more kind they for us, but on cases, ones that's

trying do utilization. use for this And been with clear really in majority what and to to AcQMap the we've regularly, that is to been factor physicians driving product way we've uptick the of seen primary more continue the that's the launches

Thank Okay. you.

you. Thank

comes from Kaczor ahead, question next Blair. of Margaret. the from William line Our Margaret Go

I that's it PFA of how details is Thanks. business. or that this any pullback a that bit saying accounts? the AcQMap you in wanted versus the acceleration details Are I in accounts of your whether heard AcQMap Thanks guys to you any pullback on Hi. impacting this have that of little being general? usage, an - start those in I first. Good a a PFA. Any to for afternoon. And maybe really earlier guess, used questions. taking in AcQBlate new is comment extent over

asked lot, internally. think from way it's Yes. question our And think way conversation it one if AcQMap here both asking -- a kind a and I might PFA versus or it's the way kind I AcQMap the year is or versus customers, It's like a And of more the PFA? ago, AcQMap great we we continue of question, Margaret. it And that we ask were to on the is said have to you're get so have a I PFA. too probably enhancing is, it ourselves

that what the are need finding But sites abandon is utilizing for that PFA doesn't we're in that mapping.

cases of also Farapulse AcQMap utilizing to case, do did ago a the a outside vein to isolation the center we therapy weeks both Afib couple So, doing and commercial our veins. first with persistent pulmonary pulmonary AcQMap-guided treat with using

- at study Afero We've we done continue, was U.K. using are - AcQMap own done cases looking we now would mapping to system. utilizing use But with has in its launched, running of Brussels We've just [Afero] obviously, with at so the Galaxy. a expect AcQMap PFA. that the

continued AcQMap, utilization So, actually of a we would being incremental expect to of volumes source and that see now. case potentially

but you scenarios you but the where seeing And additional our therapies, some seen where actually this might make you see observation who you cryo of are well. utilization, we've other pullback it - In AcQMap PFA so are market, might far. I'd in fits see reasonable only displace that's is, cohort with PFA depends what have not a some users do in as we using AcQBlate think

with customers' diagnostic a tool very need PFA, and and using be any seeing our the for AcQMap that good in pretty to them. solution then we there a much PFA for need is find still persistent finding So, an while patient incremental are particularly for tool, diagnostic -

I treatment But new appreciate usage, comments. users follow-up And also those routine come helpful. kind of or moving just bit wanted so saying bit saying to more earlier I in And mentioned of is that saying, the wanting paradigm. you seeing of just it's maybe cases and little your early, you hi, comment U.S. some I heard then of on AcQMap you're being use the mentioned That to guess, know online. a little earlier I kind kind I done Okay. a

you per I is of guess, starting really slight color that bit any that old? kind more, XX around kind hey, something I'm or folks months these drivers Thanks. clarity could versus on this saying, and core see X to but are sense then months, give to little and you're that you're of us? account guys Or clinician per where a the months couple So question, tweak getting you a of procedures

Sure.

So let go those. me through each of

being procedures, more we've the procedures routine maybe into market, thought you of so there's vast about XXX,XXX ablation first-time majority category million in the used those of those redo of this way persistent complex. fall if like of and more think and X.X The terms In would for are de novo cases.

had getting fairly and - previously a about kind those we what of had We really was and getting year, transient rhythms, in evaluated and they're beyond small AcQMap again, XX,XXX second percentage. was a nonsustained atrial like found what previously sometimes used transient that of used tachycardias, redos, like only

I recalibrate fact embarked as of But kind software. and where needed with user largely the product key that to of of user think, we map. some experience first that's was interface road we reflection a our And solved be that development gaps

That's much we've real as - as system. improved seen, well as us to a persistent we've significantly into improved procedural So cases. capabilities the brought novo some these user de getting efficiency experience

for business the are is Europe forward. single redos. and we And going procedures cases. seen the U.S. growth in the that be. in pretty that's we driver will need About continue we've do be for obviously largest to lot used now where market the U.S., redo the we Europe, which consistently, the be of especially In And to In key ultimately a XX%

increasingly across adoption good spectrum procedures. seeing are broad an of We

And the but The RECOVER redo time Still into much or definitely concentration pretty seen definitely a persistent. five redos, study decent past more four months. that around we've helped. consistently novo and de moving first hired in that

in the that's which procedure was to the that in target of sort - the benefit We In of late seen study. time publication there and subsequent that all a first in population April. cohort, redo that greatest population that's and study of the pickup have volumes kind

AcQMap it's AcQBlate a to when consistent used then pulmonary we veins, contact de ultimately, strong map and switch to treat trend that between pulmonary you very ablation two Once So XX, as an which very, persistent to do be that continue add established at basis areas and we way. source an us in been expect outside noncontact launch and is novo with vein on and that in - AcQMap solution, increasingly sterling you case which and allows those very to regular we that disease. mapping could seamless X complex isolation a the have be a pretty should the as both AcQMap one very of to well made cases well the do most just

give established just details you or of And clinician Okay. any whether new kind of procedures that that, can support in it's of terms to kind kind thesis an of would of kind clinician, per kind of physician great. be

Yes.

that's we over close ago. at a about per a console year And now, what double were to little per right So pretty probably X-ish tracking in the U.S., month. much procedures we are doing

- that did procedure volumes in base XX. that when XX of we was from last U.S. time U.S. about had level the XXX time, in XX we to U.S. quarter we installed had And gone last installed the our we had in And So the this base has procedures of the

which a uptick nice give So we can pretty per I best metric in are per procedures that. help is is probably you seeing to console I month, corroborate think the what

we cross that thing XXX The I AcQMap did mentioned users over other is globally.

installed even base also seeing terms smaller grab with the We number to in was U.S. the and user base. - number of have are up physicians of our

metrics hopefully, you give - clarity. are some those So those

it. appreciate Really great. That's

further Thank you. time. I at am no this questions showing

this conclude So will today's conference call. for you participating. Thank

disconnect. You may now