CVRx, Inc. Q2 FY2025 earnings call

• Sales force transformation: Sales force turnover returning to normal, with over 35% of territory managers hired since January 1 and over half of area sales directors joining in the last 12 months. Focus shifting to onboarding and training to increase productivity.
• Barostim programs: Strategy of targeting centers based on potential and best practices showing traction. Identifying Tier 3 and 4 accounts with clinical champions and administrative support. Compensation plan driving desired results.
• Reimbursement: CMS proposed maintaining Barostim implant procedure assignment to new technology APC 1580 with $45,000 payment. Transition to Category 1 CPT codes in January 2026 to eliminate experimental denials. Positive developments in Medicare inpatient MSDRG assignment.
• Clinical strategy: Discussions with FDA on category B IDE randomized controlled trial design progressing. Developing clinical evidence through investigator-sponsored research, multicenter trials, and real-world data.
• Awareness building: Implementing educational programs at local, regional, and national levels, focusing on advanced practice providers with over 100 programs completed year-to-date, and preparing for Heart Failure Society of America meeting in September.

Total revenue for Q2 2025 was $13.6 million, a 15% increase from the same quarter last year. U.S. Heart Failure revenue was $12.2 million. Europe revenue was $1.3 million, a 19% increase from the prior year period. Gross profit was $11.5 million for Q2 2025, an increase of $1.5 million or 16% over the prior year period. Gross margin was 84% for both Q2 2025 and 2024. U.S. heart failure revenue totaled $12.1 million for Q2 2025, up from $10.5 million in Q2 2024, with 387 units sold compared to 339 in the prior year. Europe had total revenue units of 61 in Q2 2025, down from 63 in the prior year.

• Full year 2025 revenue guidance: $55 million to $57 million.
• Full year 2025 operating expenses guidance: $96 million to $98 million.
• Q3 2025 revenue expectation: $13.7 million to $14.7 million.
• Full year gross margin expectation: 83% to 84%.

• Reimbursement uncertainties: While progress is made, there remains potential for changes or challenges in CMS rulings and commercial payer coverage.
• Sales force productivity risks: Ensuring new territory managers hired since January reach full productivity as expected.
• Market adoption challenges: Overcoming barriers in physician awareness and evidence generation to drive broader adoption of Barostim therapy.

Q: On the Level 6 code solicitation by CMS, what's the outlook?

A: CMS solicited comments for the second year, and while there's a slim chance of getting a Level 6 code this year, we're comfortable staying in the new tech APC 1580 as there's no statutory limit to staying there and we can build procedure volume and evidence.

Q: Talk about center additions and attrition in Q2?

A: Q2 results were a combination of fewer sunsetted dabbler accounts and more accounts with higher potential added, with a range of 8-12 accounts added quarterly.

Q: How do lower tiered centers acting as referral centers impact adoption?

A: Some lower tier centers act as satellites to Tier 1 flagship accounts, providing a path to larger accounts, and are worth considering as they can lead to entry into flagship accounts through demonstrating success in satellite centers.

Q: What are headwinds to material inflection in top line with tenured sales force and improved reimbursement?

A: Reimbursement friction will reduce, but challenges remain in changing medical practice, including awareness and evidence generation, which are long-term barriers to overcome.