AtriCure, Inc. Q3 FY2025 earnings call

Michael H. Carrel highlighted a strong third quarter with revenue growth and improved profitability. Product innovation initiatives such as the AtriClip FLEX-Mini, cryoSPHERE MAX, and EnCompass Clamp are driving growth. For appendage management, worldwide revenue growth over 20% is due to increased adoption of AtriClip devices, and enrollment in the LeAAPS trial was completed. In ablation franchises, open ablation growth is strong, with the EnCompass Clamp driving growth in the US and Europe, and the BoxX-NoAF clinical trial started. The pain management franchise saw growth from new product launches like cryoSPHERE MAX and cryoXT, with positive feedback from surgeons.

Third quarter 2025 total revenue was $134 million, reflecting a 16% year-over-year increase. Appendage management worldwide revenue grew over 20%, driven by increasing adoption of AtriClip FLEX-Mini and PRO-Mini devices. Ablation franchises: open ablation growth accelerated to over 18% for the quarter, with international revenue totaling $25 million, up 22% on a reported basis. Pain management franchise grew 28% in the quarter, propelled by sales of cryoSPHERE MAX and cryoSPHERE+ probes, and the launch of cryoXT.

Expect full-year 2025 revenue to be approximately $532 million to $534 million, reflecting 14% to 15% growth compared to 2024. Adjusted EBITDA outlook is raised to approximately $55 million to $57 million for the full year 2025. Full-year 2025 gross margin is expected to be slightly higher than 2024.

Risks include competition, reimbursement issues, and potential differences in clinical trial outcomes that could affect product approvals and market adoption.

Q: John Young asked about the CMS proposal for ablations and the opportunity in Japan.

A: Michael H. Carrel stated the CMS change may not materially impact the EPi-Sense business and that Japan has ~40,000 cardiac surgeries, with recent approvals but near-term revenue not expected.

Q: Lilia-Celine Lozada inquired about open business growth and guidance.

A: Michael H. Carrel said growth in open business is driven by CABG patients using EnCompass, and Angela Wirick added international open growth details.

Q: Marie Thibault asked about appendage management growth sustainability and FLEX-Mini rollout.

A: Michael H. Carrel noted a large opportunity with underpenetrated sites, and Angela Wirick mentioned FLEX-Mini's contribution.

Q: Joseph Conway asked about pain management cryoXT launch and Europe presence.

A: Michael H. Carrel said cryoXT has a limited launch now but will contribute in 2026, and cryoSPHERE is in Europe.

Q: Danielle Antalffy asked about open ablation growth sustainability and WATCHMAN trial impact.

A: Michael H. Carrel said awareness and post-op Afib trial drive growth, and WATCHMAN data boosts appendage management awareness.

Q: Unknown Analyst asked about AtriClip moat and hybrid business softness.

A: Michael H. Carrel said AtriClip has best products and innovation, and hybrid business will see growth as patients fail PFA catheters