Penumbra Inc Q1 FY2024 earnings call

• Revenue growth: Strong start with U.S. thrombectomy up 35.2% and international thrombectomy up 10.7%, confident in 27%-30% U.S. thrombectomy and 16%-20% overall growth in 2024.
• Margin expansion: Ahead of schedule for 100-150 basis point gross margin expansion in 2024, aiming for over 70% within 24-30 months; on track for 100-200 basis point operating margin expansion.
• Product launches: Fully launched Lightning Flash 2.0 in late April, on track to launch three additional CVT products in next 12 months, including one before end of 2024.
• Clinical trials: Enrollment in THUNDER study for stroke going well, expecting to gain share ahead of Thunderbolt launch.
• Commercial team: Optimized commercial team in place to drive growth, with new hires to support product launches.

Total revenues for the first quarter were $278.7 million, a year-over-year increase of 15.4% (15.2% on constant currency). Geographic mix: 75.2% U.S. and 24.8% international. Global thrombectomy revenue grew to $187.7 million, up 29.5% (29.3% constant currency) with U.S. growth 35.2% and international 10.7%. Embolization and access revenue was $91 million, down 5.7% (6% constant currency) primarily due to international market decline. Gross margin in Q1 2024 was 65%, a 240 basis point improvement from Q1 2023, on track for 100-150 basis point expansion in 2024.

• Revenue: Expect 27%-30% U.S. thrombectomy growth and 16%-20% overall in 2024; first half mid-teens, second half accelerating to high end of range or above. Embolization and access: mid-single-digit growth in U.S., flat internationally, strengthening to low teens by Q4.
• Margins: Reiterate 100-150 basis point gross margin expansion and 100-200 basis point operating margin expansion each quarter.

• Litigation: One-time settlement of wage and hour claims due to technical violations in California wage and hour laws, a onetime event.

Q: On OUS sales improvement and margins, A: Jason Mills discussed international cadence escalation, new product launches in Europe, and margin levers including product mix and SG&A scalability.

Q: On litigation, A: One-time settlement of wage and hour claims due to technical violations in California laws.

Q: On U.S. thrombectomy growth drivers, A: Jason Mills discussed current market growth, product momentum, and commercial team impact.

Q: On Flash 2.0 benefits, A: Adam Elsesser explained Flash 2.0 optimizes clot removal speed and simplicity without larger catheters, driving pent-up demand.

Q: On Thunderbolt trial, A: Adam Elsesser stated enrollment is progressing but exact timing left open as trials can be unpredictable.