Penumbra, Inc. (PEN) Earnings

Management highlights

- Adam Elsesser highlighted strong Q3 results, broad-based execution, and progress in enhancing competitive positioning. U.S. thrombectomy and embolization/access showed growth. International revenue offset China headwinds. Gross margin on track to exceed 70% by 2026. FDA cleared Lightning Bolt 16 and Flash 3.0. Thunderbolt update with ongoing FDA review. - Shruthi Narayan discussed commercial expansion, integration of new peripheral embolization sales team, and STORM-PE trial results showing CAVT superiority in PE treatment. - Maggie Yuen reviewed financial results, gross margin expansion, operating expenses, and cash flow, noting SG&A growth due to sales team build-out.

Guidance

- Raised revenue guidance for the year to $1.375 billion to $1.380 billion. - Reiterated 20%-21% year-over-year growth for U.S. thrombectomy in 2025. - Maintain gross and operating margin expansion guidance for 2025.

Segment performance

Total revenue for the third quarter of 2025 was $354.7 million, representing a 17.8% year-over-year growth on a reported basis and 16.9% on a constant currency basis. U.S. revenue was $275 million, up 21.5% Y/Y, with thrombectomy sales at $192 million, up 18.5% Y/Y. The VTE franchise grew 34% Y/Y. U.S. embolization and access revenue was $83 million, up 29.2% Y/Y. International revenue was $79.7 million, up 6.6% Y/Y or 3% in constant currency. Gross margin was 67.8%, expanding 130 basis points year-over-year. Operating income was $48.8 million, 13.8% of revenue.

Risks & headwinds

Forward-looking statements subject to risks outlined in SEC filings, including those from new information, future events, and uncertainties referenced in the 10-K for the year ended December 31, 2024.

Analyst Q&A

• Q: Congrats on the good quarter. I'll start with Thunderbolt since it's topical. It sounds like you're a lot closer to approval than you were. I assume nothing surprising with the FDA back and forth. But just maybe how you're thinking about the product when it hits the market, how much share you can take and how much -- when investors will see the data from Thunderbolt? Anything else you can share on the FDA process would be helpful if you could have the product approved by year-end or not?

  A: That's great. Thanks, Travis. A lot of nuances to that question. So let me try to cover as much as possible. Let's maybe start with the process and give a little additional color, and then we can talk about at a point in time of what happens subsequently. I know there's been a lot of comments and thoughts around the timing of the process. I want to maybe level set the process and the timing because there's some -- I think, some maybe misunderstanding. Thunderbolt is a brand-new product. It doesn't -- it's not already approved. It doesn't -- it's not just seeking a new indication. So I know in the past, there's been comparables to products that have been already on the market that have a history, that have safety information that obviously, the FDA sees and collects. And all they're looking for is a new indication. That's a different time period usually, and those can be shorter. For products that are brand new, those processes, at least in our experience with the neuro division sometimes take a while. For example, this is not fundamentally different timing than our original RED 72 SILVER LABEL, which was an update on an existing product, but it was a new product with some new materials and so on. And it takes a while because the FDA, and I applaud them for this are incredibly thorough. So there's nothing about this process and timing, but we're feeling at least hopeful and optimistic. Needless to say, without sharing competitive information about what does the launch look like. And obviously, we don't want to do that. We obviously are ready and to launch this product and are excited about it when that time comes that we can do that. So we'll stay optimistic. And again, got to have a little prudence until we have a clearance letter from giving you more sort of detail on that, okay?

• Q: Congratulations on a nice quarter. I wanted to touch on margins here. I'll stay away from the revenue questions. And reiterating gross margin and operating margin guide, just wondering how you're thinking about the ability to drive margins. Is it -- is Thunderbolt going to be a big component to get those moving higher versus where you were thinking originally? And how should we be thinking about the impact of tariffs and how that impacted full year '25 margins?

  A: Let me start briefly and then Maggie can address most of this. All of our CAVT products have very, very strong margins. So all of them, whether it's just Thunderbolt or any of the other areas that we've just spent a lot of time talking about have the ability as that mix changes. The other thing is with our newest coil that we launched, that's also accretive. So I think we're feeling pretty good. But Maggie can maybe go through some of the more specifics.

• Q: Congrats on the nice quarter here, Adam. I wanted to ask about Embo Access, which was -- in the U.S., which was extremely strong in Q3. And in fact, worldwide Embo Access grew faster than worldwide thrombectomy. So was there anything you would characterize as onetime in Q3? How much of the strength was Ruby XL versus Swift, which you called out? And going forward, should we expect Embo Access to now outpace thrombectomy? And I had one follow-up.

  A: Yes. It's a great question. We're really -- to answer the immediate question, there was nothing onetime about this quarter. The two things that were really stood out in the U.S., which was what was driving that -- well, two things around the peripheral part of the business. One, we have a dedicated team for the first time in a while. So their focus is on that. Obviously, over the last few years, our focus with our peripheral team had been split between our coils and our thrombectomy, making it pretty hard to do both well. So I think that bodes well for our future that the integration, as Shruthi said, was really seamless. And I'll be honest, I was incredibly impressed with every member of that team and the leadership of the sales team for getting to allow that to happen that way. It was -- it's not a normal process to be that seamless and it really was. So I think we're in really good shape. I think what this shows is that there's a huge market and appetite for our very distinctive products that are different than others on the market, and I think that will continue. And I said that in my prepared remarks. As it relates to the neuro side, I'm really fascinating to watch that. The growth continues to happen there. The number of cases that people are doing in general for MMA embolization has increased notably. And more and more people are moving to our product because of the safety profile of it compared to more traditional means of treatment. So I think we're pretty optimistic about this business. And I think together with the thrombectomy, they both become equal drivers of growth. Obviously, you're going to see a quarter -- the quarter that you launch a product have slightly bigger growth on a sequential basis. But overall, I think going forward, we're not going to be looking at that business is dragging down our growth. I think both Embo and thrombectomy will be an important part of our growth in '26 and beyond.