- Total Revenue: $116 million, reflecting over 15% growth.
- Adjusted EBITDA: Nearly $8 million positive for the quarter.
- Positive Cash Flow: Over $8 million generated in the quarter.
- Pain Management Franchise Growth: 25% in Q2 2024.
- Open Ablation Franchise Growth: 15% worldwide.
- Appendage Management Franchise Growth: 15% worldwide, with US open chest devices growing nearly 17%.
- US Revenue: $95.5 million, a 12.5% increase from Q2 2023.
- Open Ablation Product Sales: $30.8 million, up 13.9% over 2023.
- US Appendage Management Products Sales: $37.9 million, up 11.8% over Q2 2023.
- Minimally Invasive Ablation Sales: $11.8 million, up 4% over Q2 2023.
- Pain Management Sales: $15 million, reflecting 19.2% growth over Q2 2023.
- International Revenue: $20.7 million, up 29.4% on a reported basis.
- European Sales: $12.6 million, up 33.6%.
- Asia-Pacific and Other International Markets Sales: $8.1 million, up 23.5%.
- Gross Margin: 74.7%, a decrease of approximately 170 basis points compared to Q2 2023.
- Total Operating Expenses: $94 million, a 15.7% increase from Q2 2023.
- Research and Development Expenses: 17% increase from Q2 2023.
- SG&A Expenses: 15% increase.
- Adjusted Loss Per Share: $0.17, compared to $0.12 in Q2 2023.
- Cash and Investments: $114 million at the end of Q2 2024.
- Full-Year Revenue Guidance: Revised to $456 million to $461 million, reflecting approximately 15% growth over 2023.
- Full-Year Adjusted EBITDA Guidance: $26 million to $29 million.
Release Date: July 30, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- AtriCure Inc (ATRC, Financial) achieved total revenue of $116 million, reflecting over 15% growth.
- The company generated nearly $8 million in positive adjusted EBITDA for the quarter.
- AtriCure Inc (ATRC) reached an exciting milestone with positive cash flow generation of over $8 million.
- The pain management franchise grew 25% in the second quarter of 2024.
- The company received FDA clearance for the AtriClip Flex Mini, a new generation device expected to achieve rapid adoption.
Negative Points
- Gross margin decreased by approximately 170 basis points compared to the second quarter of 2023.
- Total operating expenses increased by $12.8 million, or 15.7%, from the second quarter of 2023.
- The company experienced a slight decline in minimally invasive appendage management products.
- Interest in PFA catheters within certain hospital systems led to pressure in hybrid therapy results for the quarter.
- The company revised its full-year guidance to $456 million to $461 million, reflecting a lower contribution from US MIS ablation and MIS appendage management products.
Q & A Highlights
Q: Can you give us your refreshed thoughts on the long-term impact of PFA on the business? Is your thinking still that PFA can be complementary to your technologies?
A: Michael Carrel, President, Chief Executive Officer, Director: We believe PFA has a positive impact as it brings more patients into the treatment funnel. While PFA is faster, its effectiveness and safety are still in question. We see it as complementary to our hybrid therapy, especially for patients who fail PFA treatments. This trend is already evident in Europe, and we expect similar outcomes in the US.
Q: On the open side of the appendage management business, how have the dynamics evolved this quarter with competition in the market?
A: Michael Carrel, President, Chief Executive Officer, Director: The market is growing, and competition has validated the market opportunity. We saw an acceleration to 17% growth in our open appendage management business. Our new Flex Mini device, with its smaller profile, is expected to drive further growth once fully launched.
Q: Can you describe the pricing strategy for the new Flex Mini device upon launch?
A: Angela Wirick, Chief Financial Officer: With each new innovation, we aim to improve overall ASP. The Flex Mini will follow this strategy, reflecting its benefits and advanced features.
Q: How are you thinking about the market opportunity in China following the clearance for AtriClip?
A: Michael Carrel, President, Chief Executive Officer, Director: We see a significant opportunity in China, which performs over 200,000 cardiac surgeries annually. While we don't expect much impact on revenue this year, we anticipate growth in 2025 and beyond as we build on our existing market share in ablation.
Q: Can you provide more details on the pressures impacting the Converge and AtriClip sides of the business? Have these pressures bottomed out?
A: Angela Wirick, Chief Financial Officer: The pressures started late in the first quarter and became pronounced in the second quarter due to the distraction caused by PFA technology. We expect this to persist through the rest of the year. Our guidance reflects a prudent approach, anticipating recovery beyond 2024.
Q: How are you thinking about the mid- to long-term outlook for the open ablation business, particularly with the ENCOMPASS clamp?
A: Angela Wirick, Chief Financial Officer: We are bullish on the open ablation business, driven by the ENCOMPASS clamp. The US market is only 30-40% penetrated, and we see significant growth potential as we deepen adoption within existing accounts and broaden it to new ones.
Q: Are you seeing any complementary use of PFA in the endovascular side of the Converge procedure?
A: Michael Carrel, President, Chief Executive Officer, Director: We are starting to see some accounts using both PFA and Converge. We anticipate that PFA failures will lead to more hybrid procedures, including Converge, in 2025 and beyond.
Q: Can you talk about the competitive dynamics in the AtriClip market? Have you seen sites drop the competitive product?
A: Michael Carrel, President, Chief Executive Officer, Director: We have not lost any accounts due to competition. Some sites have trialed competitive products but have returned to using AtriClip. Our robust growth in this franchise indicates strong market position.
Q: How are international sales performing, particularly in China?
A: Angela Wirick, Chief Financial Officer: We see sustained growth in international markets, driven by underpenetration and new technologies. In China, we work with distributors and see solid business performance. The AtriClip launch will complement our ablation technology and drive future growth.
Q: Can you provide more details on the growth dynamics in the pain management franchise?
A: Angela Wirick, Chief Financial Officer: Growth is driven by both new physician usage and higher utilization within existing accounts. The introduction of cryoSPHERE-plus and the upcoming cryoSPHERE MAX have reinvigorated the market, addressing previous concerns about procedure time.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
