Penumbra Inc Q2 FY2025 earnings call

• Adam Elsesser highlighted strong execution in the second quarter, with U.S. thrombectomy leading growth, driven by CAVT portfolio adoption. The company invested in building a separate peripheral embolization sales force. Enrollment was completed in STORM-PE trial evaluating CAVT plus anticoagulation vs anticoagulation alone for acute intermediate high-risk PE. Updates on neurovascular products, including RED 72 SILVER LABEL and Thunderbolt's FDA process. - Maggie Yuen discussed financial results, noting total revenue growth, revenue by region and product, gross margin details, operating expenses (R&D and SG&A), operating income, and cash flow position. - Jason Mills updated guidance, increasing total revenue guidance to $1.355 billion to $1.370 billion with 13%-15% year-over-year growth, while maintaining U.S. thrombectomy and full-year margin guidance.

Total revenue for the second quarter of 2025 was $339.5 million, representing 13.4% year-over-year growth on a reported basis and 12.7% on a constant currency basis. The geographic mix of sales was 76.8% U.S. and 23.2% international. U.S. region reported 19.5% growth, driven by 22.6% growth in the thrombectomy franchise. International regions decreased 3.2% reported and 5.8% in constant currency, primarily due to China revenue decline but other international regions increased. Revenue from global thrombectomy business grew to $230.3 million in Q2 2025, up 13.1% reported and 12.6% constant currency. Embolization and access business revenue was $109.2 million, up 13.9% reported and 12.8% constant currency. Gross margin for Q2 2025 was 66%, in line with prior expectations.

• Total revenue guidance increased to a range of $1.355 billion to $1.370 billion, representing 13% to 15% year-over-year growth. - Maintained guidance for U.S. thrombectomy growth of 20% to 21% compared to 2024 levels. - Maintained guidance for both gross margin and operating margin for full year 2025.

Q: Congrats on a nice quarter here. Adam, I wanted to start with STORM-PE and then ask a Thunderbolt question. So it's good that we're going to see the STORM-PE data this fall. Adam, it's a relatively small study, and we've seen many PE trials with RV/LV ratio as the primary endpoint. So why is this study important? And what impact could it have if positive? And I had one follow-up.

A: Yes. No, it's a great question. As you know, Larry, it's the first randomized study completed that we're aware of in the world comparing anticoagulation and mechanical thrombectomy to anticoagulation alone. So we've seen lots of single-arm studies and other things. It's the first randomized study that has that comparison, which is the question that everyone wants answered. So for that reason alone, it's significant. The size of the study is a testament to the confidence in the product. Obviously, the larger the study, the more room you have to have a difference. You have 100 patients, it's a lot smaller number of patients to show that difference. So it actually is a testament to, I think, the confidence in the study. That being said, I think you're aware, we put together an internationally very renowned group of physicians to -- on the steering committee of this trial, they were the ones who came up with the endpoints and the size of the study and the powering of it all and really -- and these are just not interventionists. These are noninterventionists in the field of treating PE. So I think it's -- again, we'll wait to see the results, but I think it could have a significant impact. And again, the design of the study is a testament to the work of some of the world's experts Q: And our next question comes from the line of Travis Steed with Bank of America. I guess the first question, I'll ask about the sales force split. Why now is the right time? And how you're thinking about the kind of any near-term disruption from that and the kind of the margin question. I know there was a comment kind of made on the mix on margins?

A: Yes. So the -- well, the margin -- the comment I made about margins in my talk was we had said on the last quarter that we were accelerating the build of Ruby XL. So there'd be a onetime quarter impact to do that, which we saw a minor impact. That doesn't go beyond this quarter. And I think we reiterated very clearly that we are on track for our 70-plus percent at the end of 2026. That being said, it is worth noting that the Ruby XL is -- their margin, given the nature of that coil and the price point is actually accretive to our margin. And so that's a positive for us. Why now for the split here. It is essential given the success that we're having in the thrombectomy side on that business and our view of where that continued growth will come, it's a pretty extraordinary opportunity that we really need to have people be able to focus. They can't -- they're selling right now on the thrombectomy side alone into the arterial DVT, PE, coronary and then to add a whole bunch of different types of embolization procedures was a lot for our reps to do and to do it well across all of their customers. So this just makes sense to do it by focus. I think we have been lucky to be able to attract literally some of the best talent there is in the field, and I think it will prove to be great for our thrombectomy business because of that focus. And to be honest, it will be -- allow our peripheral coil business, our embolization business to continue to be successful and probably accelerate growth given the launch of the product and the focus that, that team has. So it makes sense all around.