Q3 2023 Axonics Inc Earnings Call

Ladies and gentlemen, thank you for standing by and welcome to the <unk>.

<unk> third quarter 2023 results conference call.

At this time all participants are in a listen only mode.

The speaker's presentation, there will be a question and answer session to ask a question. During this session you will need to press star one one on your telephone you wouldn't hear an automated message advising.

Your hands raised.

Your question. Please press Star one one again, please be advised that today's conference is being recorded.

I would like now to turn the conference over to Neil.

I'll, let you core exotic Investor Relations. Please go ahead.

Great. Thank you Michelle good afternoon, and thank you for joining <unk> third quarter 2023 results conference call presenting on today's call are Raymond Cohen, Chief Executive Officer, and Carey Keyes, Chief Financial Officer before we begin I'd like to remind listeners that statements made on this conference call that relate.

To future plans events prospects or performance are forward looking statements as defined under the private Securities Litigation Reform Act of 1995.

While these forward looking statements are based on management's current expectations and beliefs. These statements are subject to a number of risks uncertainties assumptions and other factors that could cause results to differ materially from the expectations expressed on this conference call. These risks and uncertainties are disclosed in more detail and Exxon inc's filings with the secure.

<unk> and exchange Commission, all of which are available at Www Dot SEC Dot Gov.

Listeners are cautioned not to place undue reliance on these forward looking statements, which speak only as of today's date October 32023, except as required by law <unk> undertakes no obligation to update or revise any forward looking statements to reflect new information circumstances or unanticipated events.

May arise with that I'd now like to turn the call over to Ray.

Thank you Neil and.

And I would like to welcome everyone. Joining this afternoon's call.

With respect to the third quarter, we had strong companywide execution, we generated solid results in this quarter with revenue at night at $93 1 million, representing an overall increase of 32% compared to the prior year period.

More specifically second on modulation revenue was $73 9 million.

An increase of 30% compared to the prior year period.

This strong level of growth was achieved despite a 42% growth comparison in Q3 of last year, a period, which benefited from the launch of our F 15, recharge free second a modulation system.

Over the last 12 months approximately half of our <unk> revenue growth in the United States has been driven by higher utilization and share of wallet at existing accounts with the other half of our growth coming from the addition of competitive accounts that are now doing business with Exxon X.

Drilling down even further over the last 12 months, our existing customers have grown their SLM procedural volumes in the high teens compared to the prior 12 month period.

We believe this growth represents or reflects the significant unmet need of the people with moderate to severe incontinence physicians enthusiasm for partnering with exon exon S N M and increasing public awareness of advanced therapies, thanks to our DTC campaign.

Internationally, while our <unk> revenue is modest sales of <unk> systems grew by nearly 40% compared to last year as a result of measurable contribution from our recently deployed direct sales force in Australia.

We are working with TGI, which is Australia is competent authority and BSI, our notified body in Europe to gain approval for the F 15, recharge free SLM system and are optimistic that these approvals will have a positive impact on international <unk> revenue in 2024.

The exact timing of these approvals is difficult to predict given the recent changes in the regulatory review process.

Moving onto bulk of med revenue was $19 2 million, an increase of 42% compared to the prior year period.

Results were driven by increasing reorder rates from existing accounts, the onboarding of new accounts and the addition of additional sales personnel primarily focused on promoting spoke of mass.

Our gross margin in the third quarter was 74, 2%, which is up from 72, 8%.

In Q3 of last year.

We also generated $14 million of adjusted EBITDA and nearly $4 million of GAAP net income in the quarter as we continued to realize and benefit from the operating leverage of our business.

Now Terry will discuss our financial performance in further detail in her prepared remarks, but before we go there I would like now to provide several other corporate updates.

We have approximately 415 commercial team members in the United States of which 200 are directly involved in selling our sales management.

The balance of the team our field clinical specialists field marketing specialist and remote therapy support personnel.

Internationally, we have approximately 25 field based personnel located in Western Europe and Australia.

We are well staffed this at this time and expect only a modest increase in our commercial head count heading into 2024.

Turning to the Exxon ex find real relief direct to consumer advertising campaign, we continue to generate more than 10000 qualified leads each month qualified leads are those individuals that complete a symptom question here on our website, telling us about their symptoms and providing contact information.

In addition, many of our customers tell us that patients come into their practices asking about Exxon ex therapy after seeing our ads on television or on the Internet.

The campaign continues to generate goodwill with our physician customers, who are grateful that we are getting the message out to the public.

And that there are advanced therapies available to treat.

Adults.

With these conditions.

We continue to see that over half of the individuals filling out. These questionnaires are treatment naive underscoring the notion that people don't know that it is not a normal part of aging to leak urine or suffer for bowel dysfunction.

Our call Center continues to work diligently to connect qualified leads with urology specialists in their local community.

The DTC program is yielding measurable <unk> and bulk of AD revenue.

An encouraging return on investment.

Given the success of the DTC program, we recently launched new television commercials relating to the conditions of stress urinary incontinence, and bowel dysfunction as well as refreshing our OE commercials.

Other marketing educational and clinical initiatives include but are not limited to our attendance at national and regional medical conferences monthly programs to educate a P. Pes those or Aps NPS in Rins visits to our Irvine campus by physicians Master courses for physicians seeking to <unk>.

Their skills for SM, <unk> bulk Ahmed educational fellows and residency programs Webinars and helping and also helping to facilitate mailings from physicians to patients who may not be aware that there are new products that can address their incontinence symptoms.

Turning to product development initiatives, we continue to expect the foramen finder lead placement technology that we acquired earlier this year to be commercially available in mid 2024, we're also making good progress on our new external trial system that aims to enhance the external trial experience and make it more comfortable for page.

And more convenient for physicians, we have additional initiatives underway that we will not be discussing publicly at this time due to competitive reasons.

So at this point I'd like to turn the call over to Carrie for her detailed review of financial results Gary.

Thanks Ray.

They noted Exxon X generated net revenue of $93 1 million in the third quarter of 2023.

This represented an increase of 32% compared to the prior year period.

Sacral Neuromodulation revenue was $73 9 million of which 98% was generated in the U S.

Welcome at revenue was $19 2 million of which 81% was generated in the U S.

<unk>.

Gross profit in the third quarter of 2023 was $69 1 million.

Representing a gross margin of 74, 2% compared to 72, 8% in the prior year period.

Through the first nine months of 2023, exon X generated a gross margin of 74, 7%.

While we are pleased with these results as you know gross margin is sensitive to overhead absorption manufacturing yields and supply chain disruptions.

These factors into account and given that we are continuing to ramp up the manufacturing lines of BR 20, and 15 seconds modulation products.

We expect gross margin in the fourth quarter of 2023 to range between 74% to 75%.

Operating expenses were $69 8 million in the third quarter of 2023.

Excluding acquisition related expenses. This compares to $59 4 million in the prior year period.

We expect operating expenses of approximately $79 million in the fourth quarter of 2023.

Which is consistent with the $280 million of adjusted operating expenses in 2023 that we have guided to previously.

Net income in the third quarter of 2023 with $3 9 million.

Aided by interest income of just over $4 million.

This result compares to a net loss in the prior year period of $16 $3 million.

In the third quarter of 2023, exon X generated $14 million adjusted EBITDA compared to $3 $3 million in the prior year period.

The attractive financial profile of the company and the inherent operating leverage of our business model continues to be evident in our financial results.

Cash cash equivalents and short term investments were $344 7 million as of September 32023, an increase of $13 2 million compared to June 32023.

Okay.

Turning to fiscal year 2023 guidance, our updated outlook is as follows.

We are increasing total company full year guidance to $362 million up from $358 million. Previously this represents growth of 32% compared to fiscal year 2022.

We anticipate <unk> revenue of $288 5 million.

An increase of 30% compared to fiscal year 2022 and.

<unk> revenue of $73 $5 million, an increase of 42% compared to fiscal year 2022.

That concludes our prepared remarks, I will now turn the call back to Neil.

Great. Thanks Kerry at this time, we are ready to begin the Q&A session. We would like each analyst to have an opportunity to ask a question. So we request that you. Please limit yourself to one question only if you have an additional question. Please reenter the queue and we will take your second question if time permits with that Mitch.

Operator: Ladies and gentlemen, thank you for standing by.

Operator: Welcome to the exonics third quarter, 2023 results conference call. At this time, all participants are in a listen-only mode.

Operator: After the speaker's presentation, there will be a question and answer session. To ask a question during this session, you would need to press star 11. When you're telephone, you would then hear an automated message advising your hands is raised. To withdraw your question, please press star 11 again.

<unk>. Please begin the Q&A session.

Thank you as a reminder to ask a question. Please press star one on your telephone and wait for your name to be announced to withdraw. Your question. Please press star one again please.

Operator: Please be advised that today's conference is being recorded.

Please standby, while we compile the Q&A roster.

Neil Bhalodkar: I would like now to turn the conference over to Neil, Bhalodkar, Exonics Investor Relations. Please go ahead. Thank you, Michelle.

The first question comes from Chris Pasquale with Nephron Research Your line is open.

Raymond Cohen: Good afternoon, and thank you for joining Exonics this third quarter, 2023 results conference call.

Thanks, and congrats on a nice quarter guys.

I wanted to ask about the Stat, you gave around your existing customers growing at a high teens or anything thats really interesting data point.

Raymond Cohen: Presenting on today's call are Raymond Cohen, Chief Executive Officer, and Kari Keese, Chief Financial Officer. Before we begin, I'd like to remind listeners that statements made on this conference call that relate to future plans, events, prospects, or performance are forward-looking statements as defined under the press 30's litigation reform act of 1995. While these forward-looking statements are based on management's current expectations and beliefs, these statements are subject to a number of risks, uncertainties, assumptions, and other factors that could cause results to differ materially from the expectations expressed on this conference call.

Raymond Cohen: These risks and uncertainties are disclosed in more detail in Exonics filings with the Securities and Exchange Commission, all of which are available at www. SEC.gov. Listeners are caution not to place undue reliance on these forward-looking statements, which speak only as of today's date, October 30, 2023, except as required by law, Exonics undertakes no obligation to update or revise any forward-looking statements to reflect new information, circumstances, or unanticipated events that may arise.

Above what we think the overall market is growing and I'm curious what do you think the biggest drivers of that had been are you able to really direct the DTC efforts to those accounts and so you are helping to funnel patients there or do you think that it's really a function of.

Having Exxon X technology at those accounts and having a more appealing therapy to offer to those patients.

Thanks, Chris I. Appreciate the question I think it's a multi faceted answer to your question. It's not just one thing.

Our objective is to go deep in all of the current accounts that we have and when I say go deep I mean, there is a number of initiatives that we're dealing with first of all we'd like to see that the handout.

<unk> very similar to the symptom questionnaire that we provided on our website. So if every patient that walks in the door to our urology Gynecology office gets a question here then they're going to score themselves immediately and if they are moderate to severe just pops right off the page then they can get counseled appropriately I think every single customer that we have Dewey.

Raymond Cohen: With that, I'd now like to turn the call over to Ray. Thank you, Neil.

Not yet not everyone, but it's a big initiative on our field force.

Raymond Cohen: And I would like to welcome everyone joining this afternoon's call. With respect to the third quarter, we had strong company-wide execution, we generated solid results in this quarter with revenue at $93.1 million, representing an overall increase of 32%, compared to the prior year period. More specifically, segment modulation revenue was $73.9 million, an increase of 30% compared to the prior year period. This strong level of growth was achieved despite a 42% growth comparison in Q3 of last year, a period which benefited from the launch of our F-15 recharge-free segment modulation system.

The other thing is our clinical specialists spend a lot of time with the office staff talking about how to move patients more efficiently through the care pathway and also once they get an external trial to make sure that they get scheduled efficiently for permanent implant right. So that's key.

<unk> of course, as a part of it but it's a small part of it because as we have mentioned many times with a lot of the patients who are treatment naive and it takes quite a while for them to work their way through the care pathway, having said that as I mentioned in my prepared remarks.

We are getting a nice return on that investment today, but here. We are it's October 23, we started this process back in April of 'twenty, two as I recall, so it's taking some time, but it is starting to work so I think that of.

Raymond Cohen: Over the last 12 months, approximately half of our FNM revenue growth in the United States has been driven by high utilization and share of wallet at existing accounts, with the other half of our growth coming from the addition of competitive accounts that are now doing business with electronics. Drilling down even further, over the last 12 months, our existing customers have grown their FNM procedural volumes in the high teens compared to the prior 12-month period.

Of course, getting better clinical results and being sure that and our customers.

Coming aware of those results unlike.

The way it used to be back in the day before <unk> was in the market. This is another big part of the equation. If physicians are are aware that these patients are doing extremely well with our technology.

Raymond Cohen: We believe this growth represents or reflects the significant unmet need of the people with moderate to severe incontinence, physicians' enthusiasm for partnering with exonics on SNM, and increasing public awareness of advanced therapies thanks to our DPC campaign. Internationally, while our SNM revenue is modest, sales of SNM systems grew by nearly 40 percent compared to last year as a result of measurable contribution from our recently deployed direct sales force in Australia. We are working with TGA, which is Australia's component authority, and BSI are notified body in Europe to gain approval for the S15 recharge-free SNM system, and are optimistic that these approvals will have a positive impact on international SNM revenue in 2024. The exact timing of these approvals is difficult to predict given the recent changes in the regulatory review process.

Then obviously, they're that much more motivated to talk to the next person about sacral Neuromodulation and lastly, we clearly having bolcom Ed.

As part of the portfolio. Our armamentarium also helps us as well so it's about presence of mind.

It's about people thinking about the products that we have to offer so it's a really good question, but I would tell you is a lot of things involved in that.

And one of the marketing initiatives also is that we do what's called these <unk> events, where we have these nurses coming in every every month. There is a program someplace in the United States, which is typically attended by about 50 people 50 nurses and they're able to then get insights into what's working in other accounts and things of that nature. So.

There is a big long laundry list of things, Chris that we're doing now I'll just finish by saying we are thrilled.

To see this kind of growth.

Our existing customers and this really gives us the confidence that the market is really growing its untapped and in our hands. It is going to continue to grow we can't speak to what our competitors doing or not doing but in our own hands. It's clear.

Raymond Cohen: Moving on to bulk amidst, revenue was 19.2 million dollars, an increase of 42 percent compared to the prior year period. Results were driven by increasing reorder rates from existing accounts, the onboarding of new accounts, and the addition of additional sales personnel primarily focused on promoting spokesmen. Our gross margin in the third quarter was 74.2 percent, which is up from 72.8 percent in Q3 of last year. We also generated 14 million dollars of adjusted EBIDA, and nearly 4 million of GAP net income in the quarter as we continue to realize and benefit from the operating leverage of our business.

This gives us a lot of confidence about some of the things we've been saying about the underserved market.

The underserved population and the potential to grow this market.

That's helpful. Thanks, Please sandy for the next question.

The next question comes from Larry <unk> with Wells Fargo. Your line is open.

Good afternoon, and thanks for taking the question Greg Congrats on a nice quarter here.

Kari Keese: Now, Carrie will discuss our financial performance in further detail in her prepared remarks.

Just at a high level, taking a step accurate over one third share now what are the drivers to market leadership in the U S. For you how long do you think it will take and is there any reason you can't grow <unk> revenue by 25% next year. Thanks for taking the question.

Raymond Cohen: But before we go there, I'd like now to provide several other corporate updates. We have approximately 415 commercial team members in the United States, of which 200 are directly involved in selling or sales management. The balance of the team are field clinical specialists, field marketing specialists, and remote therapy support personnel. Internationally, we have approximately 25 field-based personnel located in Western Europe and Australia, where well staff is at this time and expect only a modest increase in our commercial headcount heading into 2024.

Thanks, Larry I appreciate the question.

So look we're not backing off kind of what we've been talking about in terms of this general notion of 25% Exxon X growth in SME revenue year over year and in the neighborhood of 15% growth in the market right. So we're confident about that and we will continue and I think if you just run.

The numbers out there.

We're going to get there.

Raymond Cohen: Turning to the exonix find real relief direct to consumer advertising campaign, we continue to generate more than 10,000 qualified leads each month. Qualified leads are those individuals that complete a symptom questionnaire on our website, telling us about their symptoms and providing contact information. In addition, many of our customers tell us that patients come into their practices asking about exonix therapy after seeing our ads on television or on the internet. The campaign continues to generate goodwill with our physician customers who are grateful that we are getting the message out to the public and that there are advanced therapies available to treat adults with these conditions.

I mean of course, I would like it to happen sooner than later, but if we get there by the end of 2025, then that would be fantastic right. So I think everything is moving in the right direction.

And we're pleased with the results and we're just going to keep executing the game plan.

Thank you please standby for the next question.

The next question comes from Travis Steed with Bank of America Securities. Your line is open.

Hi, Thanks for the question and congrats on the margin upside this quarter.

Ill focus my question on the margins just curious if you can elaborate on some of the stuff you're doing.

Raymond Cohen: Now, we continue to see that over half of the individuals filling out these questionnaires are treatment naïve, underscoring the notion that people don't know that it's not a normal part of aging to leak urine or suffer from bowel dysfunction. Our call center continues to work diligently to connect qualified leads with urology specialists in their local community. The DTC program is yielding measurable SNM and bulk of ed revenue with an encouraging return on investment.

The margin expansion this quarter and how you can push that in 2024 and then.

It sounds like you are raising gross margin for Q4, but any additional color behind that.

<unk> was <unk> 73 to 74 now youre at 70% to 75.

When a common carrier sure Hey, Tavis.

Yes, we have got some meaningful improvements to our gross margin as you've stated.

We've had and expect to continue to see some choppiness quarter to quarter.

Raymond Cohen: Given the success of the DTC program, we recently launched new television commercials relating to the conditions of stress urinary incontinence and bowel dysfunction as well as refreshing our OAB commercials.

We are still getting to that even.

Production capacity.

And the end of Q2, we had some line of sight to.

Certain yield and supply chain issues. So we had previously guided to 73% 74% in the second half.

Raymond Cohen: Other marketing educational and clinical initiatives include but are not limited to our attendance at national and regional medical conferences, monthly programs to educate APPs, those are APs and P's and RNs, visits to our Irvine campus by physicians, master courses for physicians seeking to better their skills for SNM and or bulk of ed, educational fellows and residency programs, webinars and helping and also helping to facilitate mailings from physicians to patients who may not be aware that there are new products that can address their incontinence symptoms. Turning to product development initiatives, we continue to expect the foraymen find their lead placement technology that we acquired earlier this year to be commercially available in mid-2024. We also make good progress on our new external trial system that aims to enhance the external trial experience and make it more comfortable for patients and more convenient for physicians.

We do feel that these items are fairly squared away at this point and have updated the guide to 74% to 75% as you mentioned for Q4 and we do note that Q3 came in at 74, 2% the high end of that previous guide.

So longer term, we do think there is they are.

Several ways to continue to continue to improve gross margin.

I do not think 75% is the cap.

For now we just need to keep executing refining our process and supply chain have longer production runs and you continue to optimize.

Overall process with expected higher volumes.

EBITDA margins as well.

Yeah on EBITDA margins.

I think this Q3 marks the sixth consecutive quarter of adjusted positive EBITDA. So.

There is no reason that those trends continue and we think that the.

Raymond Cohen: We have additional initiatives underway that we will not be discussing publicly at this time due to competitive reasons.

The results are being driven by the natural operating leverage in the business model.

Kari Keese: So at this point, I'd like to turn the call over to Carrie for her detailed review of financial results. [inaudible] 1%. Operating expenses were $69.8 million in the third quarter of 2023, excluding acquisition related expenses, this compares to $59.4 million in the prior year period. We expect operating expenses of approximately $79 million in the fourth quarter of 2023, which is consistent with the $280 million of adjusted operating expenses in 2023 that we have guided to previously.

For Q4, we made the remark of $79 million for <unk>.

<unk> Opex.

If you look at the adjusted Opex, meaning.

Just backing out the nonrecurring acquisition related costs and the one time.

<unk> IP R&D charge, you can really see the steady increase quarter to quarter in that adjusted Opex number. So we think that trend will continue and the Q4 Opex guide is slightly higher.

And as we expect some increased spend in Q4 four.

Higher commissions more spend on certain marketing initiatives and product development initiatives, but.

The overall Q2 thousand 23, Opex number at $2 80.

Is right in line with consensus Trucker Cohen.

Great. Thank you.

Please standby for the next question.

The next question comes from Richard <unk> with <unk> Securities. Your line is open.

Alright, thanks for taking the questions and congrats on the quarter.

Maybe just following up on the on the margins here.

For 2024 looking ahead.

Do you still feel comfortable getting to 20% plus.

EBITDA margin.

I'm just wondering if you could give us a sense as to timing.

Timing or cadence of Opex as we think out the next couple of quarters with the fourth quarter. It looks like there's a little bit of deleveraging.

I think your implied sales growth is going to grow a little bit below opex just trying to think.

Should we be thinking about the operating leverage year over year.

Disproportionately weighted in any part of the year next year.

Yes.

I can give you some general comments, but we would rather wait to talk about 2024 until we finished Q4.

Kari Keese: Net income in the third quarter of 2023 was $3.9 million aided by interest income of just over $4 million. This result compares to a net loss in the prior year period of $16.3 million. In the third quarter of 2023, Axonics generated $14 million of adjusted EBITDA compared to $3.3 million in the prior year period. City Attractive Financial Profile of the Company and the inherent operating leverage of our business model continues to be evident in our financial results. Cash, cash $144.7 million as of September 30, 2023, an increase of $13.2 million compared to June 30, 2023.

<unk>.

As you know consensus is $105 million.

In the quarter in terms of the total revenue. So I think we've provided some pretty good inputs that one can riddle out what <unk>.

Adjusted EBITDA is going to look like and so forth in terms of cadence for next year I think we've been very very clear.

And really tried to.

Message. This beginning earlier this year that Q1 is the softest quarter for a company like Exxon X given that our product is an elective.

Represents an elective procedure. So we see that Q1 will be the lightest quarter Q2 is always strong and then you hoped that Q3 is roughly.

Roughly equivalent to what Youre able to do in Q2, given that there is momentum in the business. But then you have the holidays to deal with and then of course Q4 is the strongest quarter of the year. So that's kind of the way that we've seen it work out.

Kari Keese: Starting to fiscal year 2023 guidance, our updated outlook is as follows. We are increasing total company's full-year guidance to $362 million up from $358 million previously. This represents growth of 32% compared to fiscal year 2022. We anticipate SNM revenue of $288.5 million an increase of 30% compared to fiscal year 2022 and bulk amid revenue of $73.5 million an increase of 42% compared to fiscal year 2022.

The last couple of years okay.

There was a product launch that was a big deal in 2022.

That may be skewed the numbers a bit heavily in a particular quarter, but that's about it.

That's the cadence that we expect and we don't see us slipping back if that's part of the question that you're asking right in other words.

Given the increasing revenue and the ability for us to manage things in terms of our build plan and all the rest of the things that Gary was talking about I think we're in pretty good shape, but we'd rather wait if you don't behind until early next year.

Kari Keese: That concludes our prepared remarks.

Likely the January February period, and will provide solid guidance for 2024 at that time, but I appreciate the question Richard.

Neil Bhalodkar: I will now turn the call back to Neil. Great. Thanks, Kerry.

Operator: At this time, we are ready to begin the Q&A session. We would like each analyst to have an opportunity to ask a question. So we requested you please limit yourself to one question only. If you have an additional question, please re-enter the queue and we will take your second question if time permits.

Thank you.

Please standby for our next question.

The next question comes from Adam <unk> with Piper Sandler Your line is open.

Operator: With that, Michelle, please begin the Q&A session. Thank you. As a reminder to ask a question, please press store 11 on your telephone and wait for your name to be announced. To withdraw your question, please press store 11 again.

Hi, good afternoon, congrats on the nice quarter and thank you for taking the question.

And then maybe go a little bit.

Script here and ask about the international business and.

Specifically the comments on F 15.

If I look at my sacral Neuromodulation model, which admittedly is not perfect I shall be or U S market at a little more than $100 million and I have your market share at roughly mid single digits.

Christopher Pasquale: Please question comes from Chris. With net front research, your line is open. Thanks, and congrats on a nice quarter, guys. We wanted to ask about the state you gave around your existing customers growing at a high-teens rate. I think that's a really interesting data point above what we think the overall market is growing. I'm curious, what do you think the biggest drivers of that have been? Are you able to direct the DTC efforts to those accounts, and so you're helping the funnel patients there, or do you think that it's really a function of having the exonics technology at those accounts and having a more appealing therapy to offer to those patients?

Internationally I'm curious if you could comment on those figures and with a product like <unk> in the market I mean, how quickly do you think you can go more on the offensive.

Like we've seen here in the United States, Thanks for taking the questions.

Yeah. Thanks, Adam I appreciate the question.

To start with.

Youre talking about we have.

In effect, 10% of the personnel internationally that we have in the United States right. So I mean, you've got we've got to kind of start there.

I think we're appropriately staffed considering the modest revenue we currently have.

Christopher Pasquale: Thanks, Chris. I appreciate the question. I think it's a multi-faceted answer to your question. It's not just one thing. You know, our objective is to go deep in all of the current accounts that we have. And when I say go deep, I mean, there's a number of initiatives that we're dealing with. First of all, we'd like to see that they hand out questionnaires very similar to the symptom questionnaire that we provide on our website.

In order for us to compete.

And to really grow our business internationally, we need the nonrenewable SM product, we need that product approved.

With that approval I think we're in a much better positioned to compete honestly.

Christopher Pasquale: So if every patient that walks in the door to a urology, or you're going to call the office, gets a questionnaire, then they're going to score themselves immediately. And if they're moderate to severe, it just pops right off the page. You know, then they can get counseled appropriately. I think, you know, is every single customer that we have doing that not yet, not everyone, but it's a big initiative at our field force.

In the in these various different markets.

I can't.

I don't know what Medtronic International number is the only thing that we know was that it represented about 10% of the overall revenue. According to public remarks that they made back in 2018, when we were first going public so.

As you know, we don't have Privy to that information and I haven't heard any hard numbers.

Christopher Pasquale: The other thing is our clinical specialist spend a lot of time with the office staff talking about how to move patients more efficiently through the care path. And also once they get an external trial to make sure that they get scheduled efficiently for permanent implant. Right. So that's key. DTC, of course, is a part of it, but it's a small part of it because as we have mentioned many times, a lot of the patients are treatment naive, and it takes quite a while for them to work their way through the care pathway.

So I don't know if it's as robust as you described and just to remind people who may not be as aware.

The issue internationally as Youre dealing primarily with singer single payer systems.

Who have budgets.

That don't provide a lot of money for products that are just a quality of life.

Products right. So that's the issue that Theres these caps.

Whether its canada, or the UK or the Netherlands or other markets, we might talk about.

Christopher Pasquale: Having said that, as I mentioned in my prepared remarks, we are getting a nice return on that investment today. But here we are, you know, it's October of 23. We started this process back in April of 22, as I recall. So, you know, it's taking some time, but it is starting to work. So I think that, you know, of course getting better clinical results. And being sure that and our customers becoming aware of those results, unlike the way it used to be back in the day before exonix was in the market, this is another big part of the equation.

Australia is a little more of a laissez faire market, which is why we're focused now with a direct sales people sales force there and we're focused on that so.

This shouldn't take too much longer right I think thats. The point I was trying to get across in my remarks, Adam was that.

We're down the path we are engaged with these regulatory bodies.

We fully expect to get this product approved there is no showstoppers per se.

But things have changed a lot internationally in terms of the MTR requirements and even PGA requirements down under so we're working on it and hopefully we can get the approval in our hands.

Christopher Pasquale: If physicians are aware that these patients are doing extremely well with our technology. Then obviously there are that much more motivated to talk to the next person about segment of my relation. And lastly, we clearly having bulk of it as part of the portfolio or arm and material also helps us as well. So it's about presence of mind. It's about people thinking about the products that we have to offer. So it's a really good question.

In a matter of months as opposed to a longer period of time than that so.

But youll see.

Revenue increasing for us once these products get approved internationally and hopefully.

This could become more measurable part of our SNF business going forward.

That question Adam.

Thanks Ray.

Please standby for the next question.

Christopher Pasquale: But I would tell you is a lot of things involved in that. And I mentioned, you know, one of the marketing initiatives also is that we do what's called these APP events where we have these nurses coming in every every month. There's a program from place in the United States, which is typically attended by about 50 people, 50 nurses. And they're able to then get insights into what's working and other accounts and things of that nature.

The next question comes from Mike <unk> with Wolfe Research Your line is open.

Hey, good afternoon. Thank you for taking the question just on recharge free versus rechargeable mix in the quarter. The dimensions in recent quarters was done.

Christopher Pasquale: So, you know, there's a big long laundry list of things, Chris, that we're doing now I'll just finish by saying we're thrilled to see this kind of growth from our existing customers. And this really gives us the confidence that the market is really a growing. It's untapped and in our hands, it's going to continue to grow. We can't speak to what our competitors are doing or not doing. But in our own hands, it's clear that this gives us a lot of confidence about some of the things we've been saying about the underserved market. They underserved population and the potential to grow this. Market. That's helpful. Thank you. Please stand by for the next question.

Third one third recharge free.

Versus rechargeable seeing any change there and I guess.

Just curious if any new insights as to what patients are preferring in the field.

Thank you Mike I appreciate the question it's interesting.

We all.

We'd like to attribute.

Whether somebody goes rechargeable and not rechargeable two patient preference.

But I would tell you.

Based upon.

Dozens and dozens of conversations I've had directly with our customers that it is not so much patient preference, it's exactly whatever the doctor guides them to which is which is determines what they ultimately wind up with.

Which is why we try to remind our customers that with the new our 'twenty, you're talking about a recharging interval of one hour every six months to 12 months.

Lawrence Biegelsen: The next question comes from Larry Beegelsen with Wells Fargo. Your line is open. Good afternoon. Thanks for taking the question. Great. Congrats on the nice quarter here. Great. Just at a high level, taking step back here at over one-third share now. What are the drivers to market leadership in the U.S, for you? How long do you think it'll take? Is there any reason you can't grow SNM revenue by 25 percent next year?

That makes a rechargeable product not rechargeable really because they don't do anything they just schedule the patient back in.

Lawrence Biegelsen: Thanks for taking the question. Thanks, Larry. Appreciate the question. So, look, we're not backing off kind of what we've been talking about in terms of this general notion of 25 percent exonics growth in SNM revenue year by year, and in the neighborhood of 15 percent growth in the market. We're confident about that and we will continue. I think if you just run the numbers out, then we're going to get there. Of course, I'd like it to happen sooner than later, but if we get there by the end of 2025, then that would be fantastic, right? So, I think everything is moving in the right direction and we're pleased with the results and we're just going to keep executing the game plan. Thank you.

Operator: Please stand by for the next question.

Excuse me Neal.

Ladies and gentlemen, please standby.

Hi.

Travis Steed: The next question comes from Travis Steve with Bank of America Securities. Your line is so thin. Thanks for the question and congrats on the margin upside this quarter. And I'll focus on my question on the margins. Just curious, you can elaborate on some of the stuff you're doing to get the margin expansion this quarter and how you can push that into 2024. And then it did sound like you were raising gross margin for Q4 a bit.

Ladies and gentlemen, please stand by.

Ladies and gentlemen, please standby.

Travis Steed: I don't know if there's any additional color behind that. I mean, before it was 73 to 74 and now you're at 74 to 75. What a common concern. Sure. Hey, Travis. Yeah, we have had some meaningful improvements to our gross margin as we've stated. We've had and expect to continue to see some choppiness a quarter to quarter. As you know, we're still getting to that even production capacity. And then the Q2, we had some line of sight to certain yield and supply chain issues.

Okay.

Ladies and gentlemen, please standby.

Travis Steed: So we had previously guided to 73 to 74 percent in the second half. We do feel that these items are fairly squared away at this point. And have updated the guide to 74 to 75 percent as you mentioned for Q4. And we do know if that Q3 came in at 74.2 percent the high end of that previous guide. So longer term, we do think there's several ways to continue to improve gross margin.

Michelle we're back on.

Are you there yes.

Okay. So should we go ahead and continue yes.

Yes, Mike is still his line is still open for questions.

Sorry about that.

Okay.

Okay. So so Michelle we're live now again.

Yes, Okay, Alright, apologies I think we had a power outage here.

Travis Steed: We do not think 75 percent as the cap. And for now, we just need to keep executing, refining our process and supply chain, have longer production runs, and continue to optimize the overall process with expected higher, and EBA.Margians as well? Yeah, on EBA.Margians, I think this Q3 marks the sixth consecutive quarter of adjusted positive EBA. So, you know, there's no reason that this trend should continue. We think that the results are being driven by, you know, the natural operating leverage in the business model.

In Irvine, California, sorry about that so Mike's question was about the split between rechargeable and Nonreturnable and I was just.

Kind of going down the path of explaining that as a company we're agnostic.

But it's more about physician preference it seems to us than patient preference.

And.

The fact that the recharging interval.

<unk> is a significantly long.

And not burdensome for people.

But nevertheless.

It's tough to erase the perception that physicians have but because for 20 years. The only thing they knew with a non rechargeable device from our competitor.

Travis Steed: For Q4, we made the remark of $79 million for expected OPEX. You know, if you look at adjusted OPEX, meaning just backing out the non-recurring acquisition related costs and the one-time acquired IPR and D charge, you can really see the steady increased quarter to quarter in that adjusted OPEX number. So, we think that trend will continue. The Q4 OPEX guide is slightly higher. You know, as we expect, some increase spend in Q4 for, you know, higher commissions, more spend on certain marketing initiatives and product development initiatives. But the overall Q220-23 OPEX number at 280 is right in line with consensus for comfort with. Great. Thank you. Please stand by for the next question.

So, but the direct answer to your question Mike is that it's now about 75% non rechargeable and about 25% rechargeable. So F 15 continues to gain in popularity.

Product is working great people are highly satisfied with the product.

<unk>.

Well, okay, either way as long as they are.

Doing business with Axon X.

We're happy to get the business, regardless of which device they want to implant.

Helpful. Thank you.

Thanks, and bye for the next question.

Our next question comes from <unk>, <unk> with RBC capital markets.

And I do apologize his line.

Did disconnect. Please standby for the next question.

Richard Newitter: The next question comes from Richard Newider with truest securities. Your line is open. Hi. Thanks for taking the questions. Congrats on the quarter. Maybe just following up on the margins here. For 2024, looking ahead, you're still so comfortable getting to, you know, a 20% plus evidom margin. And I'm just wondering if you could give us a sense as the, you know, timing or cadence of OPEX as we think out the next couple of quarters.

The next question comes from Mike Mattson with Needham and company. Your line is open.

Yeah, Thanks, great to see that continue.

<unk> coal committed.

I was just wondering in terms of the R&D pipeline is there any opportunity to.

Create enhancement and three formulations of that product.

Richard Newitter: You know, specifically with the fourth quarter, it looks like there's a little bit of bee-lovering as I think your applied sales growth is going to grow a little bit below OPEX. You know, I'm just trying to think, you know, should be thinking about the operating leverage year of a year, you know, disproportionately weighted in any part of the year next year.

Are there any opportunities for indication expansions or maybe going into additional international markets.

So with respect to bulk them Ed.

We have a pretty robust business internationally Mike.

In fact.

I think it was 81% of the bulk of that revenue.

Raymond Cohen: Now, you know, I can give you some general comments, but, you know, we would rather wait to talk about 2024 until we finish Q4. You know, as you know, consensus is $105 million in the quarter in terms of total revenue. So, you know, I think we've provided some pretty good inputs that one can riddle out what, what adjusted EBITDA is going to look like and so forth. In terms of cadence for next year, I think we've been very, very clear and really tried to message this beginning earlier this year that Q1 is the softest quarter for a company like Exxonix, given that, you know, our product is an elective represents an elective procedure.

Just checking on me on this number 19%, 19% international so 81% in the United States.

So almost 20% of the business in the quarter came from international markets and we're selling in quite a few countries.

So that that will continue.

At the moment.

We got heads down we're just focused on continued adoption and utilization of bulk node.

We we are pants or not on fire to try to do more things with that product.

Going really well and I think the key thing for US now is just kind of continuing to get the word out.

On the.

And it's fast becoming first line therapy for women with stress urinary incontinence. So.

Raymond Cohen: So, you know, we see that Q1 will be the lightest quarter. Q2 is always strong and then you hope that Q3 is roughly equivalent to what you're able to do in Q2, given that there's momentum in the business, but then you have the holidays to deal with. And then of course, Q4 is the strongest quarter of the year. So, that's kind of the way that we've seen it work out the last couple of years.

I think that pretty well answers the question as directly as I can.

Yes, I appreciate it thanks.

Mike Please.

Please standby for the next question.

Okay.

The next question comes from David Risk Scott with Baird. Your line is open.

Raymond Cohen: Okay, you know, there was a product launch that was a big deal in 2022 that may be skewed the numbers a bit heavily in a particular quarter, but that's about that's the cadence that we expect. And we don't see us slipping back if that's part of the question that you're asking right in other words, you know, given the increasing revenue and the ability for us to manage things in terms of our build plan and all the rest of things they carry was talking about. I think we're in pretty good shape, but we'd rather wait if you don't mind until early next year.

Hey, guys. Thanks for taking the questions and congrats on the strong quarter here.

Ray you I think in the prepared remarks, you called out a modest increase in head count heading into 2024.

Sorry entirely sure where the street is for next year, but we're kind of in that mid teens opex growth outlook into 2024 I'm. Just wondering if you could provide any more color on really how you're thinking about or qualifying this modest increase in head count next year. Thank you.

Raymond Cohen: Likely, you know, the January or February period will provide, you know, solid guidance for 2024 at that time, but I appreciate the question, Richard. Thank you.

Well, you know I would say.

Model is probably in the neighborhood of 5% or so.

If it was 10% not so modest right.

Operator: Please stand by for our next question.

Where we're covering literally the entire United States I mean, we don't have areas of the country, where we don't have representation.

Adam Maeder: The next question comes from Adam Maeder with Piper Sandler. Your line is open. Hi, good afternoon, congrats on the nice quarter and thank you for taking the question.

We're even maybe Alaskan last remaining state in the Union.

We have a representative now in Hawaii, selling Gulf broke them out and second a modulation. So we've got good coverage, but we we are now doubling down in certain territories around the United States, where.

Raymond Cohen: I'm going to maybe go a little bit off script here and ask about the international business and raise specifically the comments on F-15. If I look at my sacred modulation model which admittedly is not perfect, I show the OUS market at a little more than $100 million and I have your market share at roughly mid-single digits internationally. I'm curious if you could comment on those figures and with a product like F-15 in the market.

For one reason or another are competitor may have more business than we do.

That we're not getting our fair share and and those are the markets that we're really looking to invest more in terms of personnel. So we make sure we call on all of those folks that are not doing business with us.

What I would say is that we we have very good data at this point, we know exactly who's doing sacral neuromodulation, the United States, We know from third party billing data.

Raymond Cohen: I'm the offensive like we've seen here in the United States. Thanks, Dick, and the questions. Yeah, thanks Adam. I appreciate the question. You know, to start with, you know, you're talking about we have, in effect, 10% of the personnel internationally that we have in the United States, right? So, I mean, you got to, we got to kind of start there. I think we're appropriately staffed considering the modest revenues that we currently have.

How many procedures. They are doing we know a lot of stuff that we just didn't have this information you know years ago.

So we know where.

We're pretty focused now and the key thing for US is we want to bring some bigger users. If you may people that have higher volume to the party.

That really helps move the meter so I think at this point, considering where less than well were almost four years now almost four years now commercial in the United States.

Raymond Cohen: In order for us to compete and to really grow our business internationally, we need the non-rechargeable S&M product. We need that product approved. You know, with that approval, I think we're in a much better position to compete, honestly, in these various different markets. I think it is. The only thing that we know was that it represented about 10% of their overall revenue according to public remarks that they made back in 2018 when we were first going public.

That I think we've made phenomenal progress during this period of time and I'm really excited about the next 18 to 24 months and what we can accomplish during that period.

Please standby for the next question.

The next question comes from Kristen Stewart with C. L. King Your line is open.

Raymond Cohen: So, as you know, we don't have privy to that information and I haven't heard any hard numbers. So, I don't know if it's as robust as you described and just to remind people who may not be as aware, the issue internationally is you're dealing primarily with single pay or systems who have budgets that don't provide a lot of money for products that are just a quality of life products, right? So, that's the issue that there's these caps and you know whether it's Canada or the UK or the Netherlands or other markets we might talk about.

Hi, Thanks for taking my question and congrats on a good quarter.

Wondering if you could just go into a little bit more detail on the new external trialing system and sorry, if I missed this but any thoughts on timing for that.

So.

Yes.

Okay.

In terms of timing, we're working diligently to be able to get that filed with the FDA in mid 2024.

And assuming standard statutory timelines the product hopefully will be in the market by the end of next year. So it does take some time as you can imagine the product is now fully developed but we've got to do all the validation and verification testing and that's required and making the filing so.

Raymond Cohen: Australia is a little more of a laissez-faire market which is why we're focused now with the direct sales people, the sales force there and we're focused on that. So, but this shouldn't take too much longer, right? I think that's the point I was trying to get across in my remarks, Adam, was that, you know, we're down the path, right? We are engaged with these regulatory bodies and we fully expect to get this product approved.

This is Bob.

The product is designed to eliminate a lot of the cables and things that are being used today make it much more streamlined lower profile and most importantly, we said this publicly before the ability for patients to be able to take a shower. When they are undergoing that that three day typically three days.

Raymond Cohen: There's no show-stoppers per se, but things have changed a lot internationally in terms of the MDR requirements and even TGA requirements down under. So, we're working on it and hopefully we can get the approval in our hands in a matter of months as opposed to longer period of time than that. So, but you'll see, you know, revenue increasing for us once these products get approved internationally and hopefully, you know, this could become a more measurable part of our SNM business going forward. Appreciate that question, Adam. Thanks, Ray.

Strong trial so I.

I can tell you there's a normal amount of enthusiasm amongst our customer base, who have heard about the new.

Mike Polark: Please stand by for the next question. The next question comes from Mike Polark with Wolf Research. Your line is open.

Product and I think the combination of the frame and finder and the new external trial system. I mean these things in combination should should really helped I think kristen the piece of the puzzle here or the message that we're really trying to get out to not only the investing public and our shareholders.

But also to our customers that <unk>.

<unk> elite innovator in this space, we're the ones that are driving the market forward coming up with new things and trying to make things more streamlined et cetera et cetera.

Operator: Good afternoon. Thank you for taking the question. Just on recharge free versus rechargeable mix in the quarter. The mentions in recent quarters has been like two thirds one third recharge free versus rechargeable. Seeing any change there and I guess curious if any new insights as to what patients are preferring in the field. Thank you, Mike. I appreciate the question. It's interesting that we all would like to attribute whether somebody goes rechargeable and not rechargeable to patient preference.

And the message that we pay to our customers and I'd say to shareholders, if you're going to bet that onyx sonics, because we're not stopping and.

We're listening very intently to feedback from our customers and we're nimble enough to be able to react and when we talk about one of our key values being thoughtful innovation, that's really where it comes from right is listening asking questions listening and then taking it under advisement in making the changes so I think that.

<unk> modulation has undergone a renaissance in our hands.

And we will continue to push the envelope forward in terms of making this as easily as possible.

Caregivers and patients to get the symptom relief that they're looking for so I appreciate the question.

Operator: But I would tell you based upon dozens and dozens of conversations I've had directly with our customers that it's not so much patient preference. It's exactly whatever the doctor guides them to, which is which is determines what they ultimately wind up with. You know, which is why we try to remind our customers that with the new R20, you're talking about every charging interval of one hour every six to 12 months. I mean, that makes a rechargeable product not not rechargeable really because they don't do anything.

I draw your picture, but.

It's difficult to do.

Over the phone line, but.

But.

We'll be having a lot more information about this in the coming year.

Thanks very much.

Thank you Ursula please.

Please standby for the next question.

The next question comes from Chicken scene with RBC capital markets. Your line is open.

Operator: They just schedule the patient back in. Excuse me, Neil. Ladies and gentlemen, please stand by. Michelle, we're back on. Are you there? Yes. Okay, so shall we go ahead and continue? Yes, Mike is still his line is still open for questions. Sorry about that. Okay, so Michelle, we're live now again? Yes. Okay, all right. Apologies. I think we had a power out of cheer in Irvine, California. So sorry about that. So Mike's question was about the split between rechargeable and non rechargeable, and I was just, you know, kind of going down the path of explaining that the company were agnostic, but it's more about physician preference.

Great. Thank you so much and I'm, so sorry, I dropped, but congratulations on a strong quarter and it does look like you have a lot of momentum going into 'twenty four.

Just wondering if you can maybe talk to us about how you think about adjacencies or call points that electronics could potentially expand into.

Even even though there is a lot of runway right now with your current businesses, but you add bulk Ahmed that's going now truly well.

Just how do you think of <unk> does that make sense urology women's health, how do you think about it more broadly and then separately just how do you think about Exxon extra <unk> would you be open to interest from other players. Thank you for taking the question.

If I decode the last part of your message I think Youre asking me with axon X be open to being acquired by a larger company I think thats. The question is that how you heard it now okay.

Okay.

My my answer to that would be Exxon X. The stock is for sale every minute of every day and people. We encourage people to buy it. So you can buy a little bit a lot a bit or the whole bit.

And I think that.

That would be my reaction to that.

That question I mean.

None of US are here for lifetime deployment, we're here to create shareholder value that's.

That's the game and so we're certainly open.

It's not something we think about we just focus on the execution of our business.

The other question you asked is really it's really a big question and difficult to kind of get one's arms around it I mean, we're constantly looking at different things.

We have a lot of folks coming to us they saw that we acquired <unk>, we acquired the frame and finder. So we get a lot of inbounds as you might imagine our main focus is in the incontinence field and we're trying to stay straight down the fairway with respect to that so we've been evaluating a number of other potential.

Products that could add to the bag that are strategic in nature would move the meter.

We don't want to fill the bag up with a bunch of miscellaneous stuff right thats inexpensive that doesn't make sense for us.

So we're going to be judicious.

And thoughtful about what we do.

And.

We'll just go from there in terms of Adjacencies such that if that means what else can we do with neuro stimulation.

I think that we said numerous times that.

We do not anticipate getting into an adjacent business utilizing us more stimulation of the platform that but that does not make sense different call points.

Different businesses completely so we're going to stick to our knitting and just kind of straight days period ahead, we've got a good business.

Operator: It seems to us than patient preference. And, you know, the fact that the recharging interval is significantly long and not burdensome for people. But nevertheless, you know, it's tough to erase the perceptions that physicians have, but because for 20 something years, the only thing they knew was a non rechargeable device from our competitor. So, but the direct answer to your question, Mike, is that it's now about 75% and non rechargeable and about 25% rechargeable.

We have such an underappreciated I should say untapped market.

With a combination between etsy why patients who've been differentially diagnosed or who have moderate to severe forms of stress urinary incontinence or urge urinary incontinence patients going into the bathroom and time and movies or music tens of millions of patients out there and I think our DTC efforts really underscore.

Uh huh.

The magnitude of this opportunity.

So quick one when you run ads on television and you've got over 250000 people per quarter.

And this year, we'll be well over 1 million people coming to our website.

Looking for information.

At <unk> Dot com, so that I think also underscores. The fact that this is a really unbelievable market and I think with quite frankly kind of a bit foolish for us to take our eye off the ball. So we're going to continue to go down the path.

Operator: So the 15 continues to gain in popularity. Product is working great. People are highly satisfied with the product. And, you know, we're, we're okay. Either way, which, as long as they're doing business with exonics, we're happy to get to business regardless of which device they want to implant. Oh, full right. Thank you.

Shagun Singh: Please stand by for the next question.

Focus on growing the company growing it profitably in the years to come.

And I do appreciate the questions. Thank you.

Please standby for next question.

Yes.

The next question comes from Anthony <unk> with Mizuho. Your line is open.

Thank you.

Operator: Our next question comes from Shagann Singh with RBC capital markets. Yeah, I do apologize. His line did disconnect.

Greg Congratulations Sharon a strong quarter.

A couple just on an account penetration referencing some statistics from last quarter Europe you mentioned.

Operator: Please stand by for the next question.

Ray last quarter that debt.

The highest volume accounts at Exxon, if youre doing about 50 surgeries a year, just wondering where the average is across the user base.

Michael Matson: The next question comes from Mike Mattson with need of income. Your line is open. Yeah, thanks. Great to see the continued strength with Polka mid. I was just wondering if, you know, in terms of the R&D pipeline, is there any opportunity to, you know, create enhancements, reformulations of that product and you're there any opportunities for indication expansions or maybe going into additional international markets. So, with respect to Polka mid, we have a pretty robust business internationally, Mike.

How many can get up to that 50 upper bound, let's say over the next year or so and then.

And the second quick follow up would be on just bulk of med synergies here.

We got that up to about 20000.

Implants as of last quarter and it certainly seems like there are synergies that are driving I think competitor when just.

Just considering that Medtronic doesn't have it for bags. So how much more runway is there with bulk Ahmed just in terms of that procedure being.

A bigger option for patients and practices, but also potentially a lever to gain share from Medtronic, Thanks, again and congratulations.

Michael Matson: In fact, I think it was 81% of the Polka mid revenue. You guys checking on me on this number. 19% international. So 81% in the United States. So, you know, almost 20% of the business in the quarter came from international markets and we're selling in quite a few countries. So that will continue. You know, at the moment, Mike, we got heads down. We're just focused on continued adoption and utilization of Polka mid.

Yes, Thank you and I appreciate your comments.

Let me, let me clean something up.

I think that.

Either.

Some misinterpretation or a little bit out of context, we have some customers that are doing well over 50 implants a year. So I just wanted to get that point across its they are rare.

And I think we kind of put them in three buckets quite frankly.

One is the.

Well, we use the term the dabbler bucket buckets, which are folks that are doing around one per month right. So that's kind of there's a lot of those docs out there.

Michael Matson: You know, we are, our pants are not on fire to try to do more things with that product. It's going really well. And I think the key thing for us now is just kind of continuing to get the word out. You know, on the product and it's fast becoming first-line therapy for women with stress urinary incontinence.

I mean, any one any one physician that's doing one implant per month.

The ability to do probably three to five times more than that.

With just the TV a little bit of effort right. So.

Raymond Cohen: So, you know, I think that pretty well, you know, answers the question directly. Yeah, appreciate it, thanks. Thank you, Mike.

We're continuing to move those those are physicians up in terms of the volume, which is why we made it a point to talk about the mid to high teens rate of growth on a per account basis, obviously, it's easier to get somebody who's doing 12.

Operator: Please stand by for the next question.

David Rescott: The next question comes from David Rescott with Bayer. Your line is open. Oh, hey guys.

To turn that into 'twenty.

Is to take somebody's doing 60 and turned it into 80 or 90 right. So we are aware of that but.

Raymond Cohen: Thanks for getting the questions and congrats on the store on quarter year. Ray, I think in the prepared remarks you called out a modest increase in headcount heading into 2024. I'm not necessarily sure where the street is for next year, but we're kind of in that mid-teens, you know, apex growth outlook in a 2024. I'm just wondering if you could provide any more color on really how you're thinking about or qualifying this modest increase.

But we are looking to move the <unk> into the medical middle Middle Karakorum category and we are looking at obviously to maximize what we can out of high volume accounts. The key thing for US is to bring some more of those high volume accounts to electronics.

And.

If they were high volume accounts, we came into the market clearly our competitor kind of withdrew their forces if you may and surrounded the castle.

Raymond Cohen: And headcount next year, thank you. Well, you know, I would say, you know, modest is probably in the neighborhood of 5% or so. I mean, if it was 10%, it's not so modest, right? But, you know, we're, we're covering literally the entire United States. I mean, we don't have areas of a country where we don't have representation. I mean, we even, it may be Alaska last remaining, you know, state and the union.

<unk> tried to keep us out of the bigger high volume accounts now we've been able to penetrate quite a few of them, but bolcom Ed has been the key.

For us to get into those capsules.

And to get people using bolcom, Ed and then to play the longer game with.

With them with respect to giving us an opportunity on cycling a modulation. So your your question was implying or asking whether or not bulk of it is helping us to gain share and to gain business from our sacral Neuromodulation standpoint, and the answer is absolutely without a doubt no question, we would not.

Raymond Cohen: We have a representative now in Hawaii selling both Pokemon and circle in the modulation. So we've got good coverage. But we, you know, we are now doubling down in certain territories around the United States where for one reason or another, our competitor may have more business than we do. That we're not getting our fair share and those are the markets that we're really looking to invest more in terms of personnel. So we make sure we call on all those folks that are not doing business with us.

B, where we are today, if we had not made that strategic acquisition and had that product in our line and Youre right. It does clearly separate us from Medtronic <unk> no other business in neurology other than cycling a modulation so.

Now the good news is.

That we only have about half of our bulk and that customers that are doing cycling the modulation with <unk> a bunch of them are doing it with our competitor and some are just doing botox.

Raymond Cohen: So what I would say is that, you know, we, we have very good data at this point. I mean, we know exactly who's doing cyclical modulation in the United States. We know from third party billing data, how many procedures they're doing. We know a lot of stuff that we just didn't have this information, you know, years ago. So, you know, we're, we're, we're pretty focused now. And the key thing for us is that we want to bring some bigger users, if you may, people that have higher volume to the party, that really helps move the meter.

So we're continuing to work on that there's a lot of cross selling initiatives that are that we're doing as a company as you would imagine.

And it's all moving in the right direction I, just think it's just going to take a little more time.

It's difficult to displace a competitor had a monopoly for 25 years right.

And we've talked about the legacy associated with that so.

But.

We're moving in the right direction.

And I think that the.

Raymond Cohen: So I think at this point, considering we're, you know, less than, well, we're almost four years now, almost four years now commercial in the United States. That I think we've made phenomenal progress during this period of time. And I'm really excited about, you know, the next 18 to 24 months and what we can accomplish during that period. Please stand by for the next question.

The words out right when it comes to cycling a modulation, we got the goods patients do really really well with our products they get great support from our team.

So in silver and bulk <unk> works like a charm.

And it is clearly much easier for women, who had stress urinary incontinence to say, yes to bulk them add then to us.

Ling procedure as an example, so hopefully that gave you a pretty fulsome answer Anthony to your question.

Excellent. Thank you so much.

Please standby for the next question.

Kristen Stewart: The next question comes from Kristen Stewart with CLK. Your line is open. Hi, thanks for taking my question and congrats on a good quarter. I was wondering if you could just go into a little bit more detail on the new external trialing system. And sorry if I missed this, but any thoughts on timing for that. So, yes. In terms of timing, we're working diligently to be able to get that filed with the FDA in May 2024.

The next question comes from Callum Titchmarsh with Morgan Stanley. Your line is open.

Kristen Stewart: And, you know, assuming standards, statutory timelines, the product hopefully will be in the market by the end of next year. So it does take some time, as you could imagine, the product is now totally developed. But we've got to do all the validation, verification testing, and that's required and making the filing. So, you know, this is the product is designed to eliminate a lot of these cables and things that are being used today, make it much more streamlined, lower profile, and most importantly, we've said this publicly before, the ability for patients to be able to take a shower, when they're undergoing that, you know, that three-day, typically three-day, external trial.

Yes. Thanks, a lot guys for taking my question just on the DTC campaign, some interesting comments there I'm.

I'm wondering whether there's been some respond demographics or populations that have surprised you or anything thats Barrett from a typical patient type you've seen receive an SLM treatment across the years, yes, I mean, given the goal of these campaigns is to spread awareness I wanted to see whether you've seen anything different in patient mix since commencing thanks a lot.

Thank you for the question.

I wouldn't say that there's anything different about the people responding from deep to DTC from the actual.

Patient demographics of who were actually implanting I would say, it's pretty consistent I think the only difference is that we have more men responding to DTC than actually we have as percentages of our customers that get an implant.

If it turns out maybe 25% of the people enquiring are men.

Got it.

In terms of actual implants, it's less than 15% or somewhere around that number so that would be the only thing I'd call out.

Kristen Stewart: So I could tell you there's a enormous amount of enthusiasm amongst our customer base who have heard about the new product. And I think the combination of the forend and finder and the new external trial system, I mean, these things in combination should really help. And I think, Kristen, the piece of the puzzle here or the message that we're really trying to get out to not only the investing public and our shareholders, but also to our customers, that, you know, exonix is the innovator in this space.

I think it's going to be really interesting now starting this month actually we will have the first.

A bowel dysfunction or fecal incontinence commercials.

That will be running with a gentleman, who was a patient who talks about.

Him, having add both urinary and fecal incontinence and and how electronics.

Conics therapy has really changed his life, so it'll be interesting to see and we very specifically pick demand.

Kristen Stewart: We're the ones that are driving the market forward coming up with new things and trying to make things more streamlined, et cetera, et cetera. And the message that we say to our customers and say to shareholders, if you're going to bet on electronics, because we're not stopping. And, you know, we're listening very intently to feedback from our customers, and we're, we're nimble enough to be able to react. And when we talk about one of our two values being thoughtful innovation, that's really where it comes from, right, is listening, asking questions, listening, and then taking it under advisement and making the changes.

To do that particularly with commercial and I'll walk out of a woman who also have the same dual continent.

Continent symptoms.

And we're running that commercial as well so this November.

We have for the first time stress urinary incontinence commercial we have dual incontinence commercials, where people were talking about urinary and fecal incontinence same time.

And in addition to the kind of straightforward more generic.

Kristen Stewart: So I think that Sentinel modulation has undergone a renaissance in our hands. And we will continue to push the envelope forward in terms of, you know, making this as easy as possible for caregivers and patients to get to something really that they're looking for. So I appreciate the question.

<unk>.

So you can see that we're trying to get to your question in a way.

We're going to the changing up the messaging and see what kind of response, we get is that any different than what we've seen so far.

I think it was it was time for us to be a little more specific with some of these symptoms.

Raymond Cohen: You know, I draw you a picture, but, you know, it's difficult to do live over the phone line, but we'll be having a lot more information about this in the coming year. Thanks very much. Thank you. Please stand by for the next question.

You can go up and people and we were curious to see how the fecal incontinence.

Drug because talk about people being embarrassed I mean, it's one thing to talk about urinary dysfunction, it's really embarrassing talk about political dysfunction. So.

We do know that about 30% or so of the patients that actually get sacral neuromodulation for urinary urge incontinence have some form of peak one comment to go along with it. So we can draw some of those people in presenting with fecal incontinence as their primary indication it'll be really interesting to see.

Shagun Singh: The next question comes from Shagun Singh with RBC Capital Markets. Your line is open. Great. Thank you so much. And I'm so sorry. I dropped, but, uh, Ray, congratulations on, uh, on a strong quarter, and it does look like you have a lot of momentum going into 24. I was just wondering if you can, you know, maybe talk to us about how you think about adjacencies or call points that exonics could potentially expand into, even though there is a lot of runway right now with your current businesses, but you've had a bulk of it.

How that impacts our business in general so.

That's.

Kind of what we're up to but the demographic.

And why are we on TV <unk> TV is if you look at third party staff Youll find that the people 60 years or older are the ones that are watching our network TV.

Shagun Singh: That's turned out really well. You know, just how do you think of, you know, ITNS does that make sense to yourology, women's health? You know, how do you think about it more broadly? And then separately, just how do you think about exonics strategically? Would you be open to interest from other players? Thank you for taking the question. If I decode the last part of your message, I think you're asking me would Axonics be open to being required by a larger company?

And.

That's why we're on TV because backlog demographic that we're after the average age of a person getting taken a modulation for chronic is 58 years old so.

That that's the case, we tried some screening services and some other fancy stopped in the past and if this doesn't pull as well.

Just a plain vanilla Facebook and.

Shagun Singh: I think that's a question. Is that how you heard it now? Okay. So my answer to that would be, you know, Axonics is focused for sale every minute of every day and people we encourage people to buy it. So you can buy a little bit, a lot a bit, or the whole bit. And I think that, you know, that would be my reaction to that question. I mean, none of us are here for lifetime employment.

And obviously our network TV so.

Please go ahead.

Great I appreciate the color.

Yeah. Thank you please standby for the next question.

The next question comes from Michael Sarcone with Jefferies. Your line is open.

Hey, good afternoon, and thanks for squeezing me in here.

Shagun Singh: You know, we're here to create shareholder value. That's the game. And so we're certainly open. It's not something we think about. We just focus on the execution of our business. The other question you're asked is really, it's really a big question and difficult to kind of get one's arms around it. I mean, we're constantly looking at different things. We have a lot of folks coming to us and they saw that we acquired bulk of ed and we acquired the frame and finder.

Sure.

Just a quick question can you just talk about in the U S. What.

What is rep productivity look like on average and kind of where do you think that can ultimately go.

That's a good question.

So.

We talk publicly early days that when we looked at the head count of our competitor for cycling a modulation their average productivity per rep was about $3 5 million now that was with a monopoly with no competition.

Shagun Singh: So we get a lot of inbound, as you might imagine. Our main focus is in the incontinence field and we're trying to stay straight down the fairway with respect to that. So we've been evaluating a number of other potential products that could add to the bag that our strategic in nature would move the meter. We don't want to throw the bag up where the bunch of miscellaneous stuff, right? That's inexpensive. That doesn't make sense for us.

This year in 2023, we expect average productivity to be a little over $2 $5 million on a per rep basis, and we would expect obviously nice increases consistent with what were guiding in terms of our growth trajectory in 2024. So you.

Can imagine once again, not even finished our fourth year and to see the productivity.

Shagun Singh: So we're going to be judicious and thoughtful about what we do. And we'll just go from there. In terms of adjacent fees, if that means what else could we do with North simulation? I think that we've said numerous times that we do not anticipate getting into an adjacent business utilizing North simulation of a platform that does not make sense. We have different core points, different businesses completely. So we're going to stick to our knitting and just kind of stay straight ahead.

To be as high as it is we're very encouraged by that.

So that's the that's the answer to your question I think you got a rounded up higher obviously for 2024, but that's that's what we're looking at.

Great. Thank you Rick.

Thank you please standby for the next question.

The next question comes from Mike Kratky with Leerink Partners. Your line is open.

Shagun Singh: We've got a good business. We have such underappreciated, I should say, untapped market with a combination between FUI patients who've been differentially diagnosed or who have the moderate to severe forms of stress or in a continent or urgent or incontinence patients can't do the best in the time. I mean, these are tens of millions of patients out there. And I think I do two, three efforts really underscore the magnitude of this opportunity and so forth.

Hi, everyone. Thanks for taking my question. So are you mainly implemented DTC effort and the new television commercials likely initiatives that you'd expect to continue throughout or potentially accelerate in 2024, and then just as a quick follow up how do you kind of balance the trade off in that DTC spending versus committing to more meaningful investment.

The head count side.

Okay.

Well I think I think they're mutually exclusive quite frankly, where once again, we're not looking at DTC as a driver of our business.

Shagun Singh: And when you run ads on television and you've got over 200,000 people per quarter, you know, in this year will be well over a million people coming to our website, looking for information at Find Your Relief.com. So that I think also underscores the fact that this is a really unbelievable market. And I think it would quite frankly kind of a bit foolish for us to take our eye off the ball. So we're going to continue to go down the path and, you know, focus on growing the company, growing it profitably in the years to come. And I do appreciate questions. Thank you.

We kind of look at it like that is the icing on top right and.

We're playing the long game the DTC is about playing the long game for us really.

<unk> programming messages that people are hearing on television.

Anthony Petrone: Please stand by for our next question.

That our ads that are suggesting it's normal two week here and then if you just take my tale of where my panties or whatever but both diapers or whatever it is then everything is great.

So where we're the we're the company that's building the counter programming, but I want to emphasize the DTC is not the driver of our business is all the other initiatives that we've talked about and some of which I mentioned in the script today that are really driving driving the business now having said that our customers really appreciate the fact that we're on the airway.

Raymond Cohen: The next question comes from Anthony Petrone with Mizzouho, your line is open. Great congratulations, Chair and a strong quarter. A couple just on on account penetration referencing some statistics from last quarter. You're up, you mentioned Ray Last Quarter that the highest volume accounts at Axonics are doing about 50 surgeries a year. Just wondering where the average is across the user base and how many can get up to that 50 upper bound, let's say over the next year or so.

And that we're providing messages to folks and some of the.

Some of this is going to be difficult to measure right. There is additional benefit.

We're not everybody is going to fill out a symptom questionnaire.

Not everybody is going to go to the website some of them just walk right into the offices and say asked me about economics and asking about a chronic therapy now of course, when they walk into a customer location that doesn't offer Exxon X and they go tell me about Exxon ex therapy. They go yes, we got that too it's called interesting alright, I'm still waiting for the thank you card from our competitor for doing.

Raymond Cohen: And then the second quick followup would be on just bulk of med synergies here. Got that up to about 20,000 implants as of last quarter. And it certainly seems like there are synergies that are driving, I think, you know, competitor wins just considering that metronik doesn't have it for bags. So how much more runway is there with bulk of med just in terms of that procedure being now a bigger option for patients and practices but also potentially a lever to gain share from metronik.

National TV, but that hasnt been forthcoming.

So in any event hopefully that gives you.

Reasonably colorful answer to your question.

Yes.

Much appreciate it. Thank you. Thank you.

So no further questions at this time I would.

I'd now like to turn the call back to Raymond Cohen for closing remarks.

Thank you operator.

I appreciate your help today so in closing I'd like to say that our mission driven team remains committed to innovating supporting our dedicated physician customers and their patients raising awareness of our best in class therapies, and we're confident that Ixodic will continue to grow rapidly and profitably in the years ahead as we continue to expand and penetrate the under.

Raymond Cohen: Thanks again and congratulations. Yeah, thank you, Anthony. Appreciate your comments. Let me let me clean something up. I think that either some misinterpretation or a little bit out of context, we have some customers that are doing well over 50 implants a year. So I just just want to get that point across. It's there rare. And I think we kind of put them in three buckets quite frankly. One is the well we use the term dabbler bucket bucket, which is folks that are doing around one per month.

Served and Undertreated and continence market in which we participate we remain grateful for the trust physicians patients and shareholders that placement Exxon X and as always I would like to thank my colleagues in Irvine and our team in the field for our diligent efforts for their diligent efforts and dedication to fulfilling the chronic mission of improving the lives of adults.

Within coffee so thank you so much for the call today appreciate all the questions from the analyst community and we look forward to seeing and speaking with you in the weeks and months ahead.

Raymond Cohen: Right. So that's kind of, you know, there's a lot of those docs out there. I mean, anyone, any one physician that's doing one implant per month, they have the ability to do probably three to five times more than that, which just will keep you a little bit of effort. Right. So we're continue to move those physicians up in terms of their volume, which is why we made it a point to talk about the mid to high teens rate of growth on a poor account basis.

This concludes today's conference call. Thank you for participating.

Now disconnect everyone have a great afternoon.

Raymond Cohen: Obviously, it's easier to get somebody who's doing 12 to turn that into 20 than it is to take somebody's doing 60 and turn it into 80 or 90, right. So we're aware of that. But, you know, we are looking to move the dabblers into the middle middle category. And we are looking up obviously to maximize what we can out of high volume accounts. The key thing for us is to bring some more of those high volume accounts to electronics.

Okay.

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Okay.

[music].

Raymond Cohen: And, you know, if they were a high volume account, we came into the market, you know, clearly are a competitor, you know, kind of withdrew their forces if you may and surrounded the castle to try to keep us out of the bigger high volume accounts. Now we've been able to penetrate, you know, quite a few of them, but bulk embed has been the key for us to get into those castles and to get people using bulk embed and then to play the longer game with them with respect to giving us an opportunity on second on modulation.

Raymond Cohen: So your your question was employing or asking whether or not bulk embed is helping us to gain share and to gain the business from a modulation standpoint. And the answer is absolutely without a doubt. No question. We would not be where we are today. If we had not made that strategic acquisition and had that product in our line, and you're right, it does clearly separate us from metronica. There's no other business in urology other than signal modulation.

Raymond Cohen: So now the good news is that we only have about half of bulk embed customers that are doing second on modulation with exotics. A bunch of them are doing it with our competitor and some are just doing both talks. So we're continuing to work on that. There's a lot of cross selling initiatives that we're doing as a company as you would imagine. And it's all moving in the right direction. I just think it's just going to take a little more time.

Raymond Cohen: You know, it's difficult to displace a competitor rather monopoly for 25 years, right? I mean, you know, and we've talked about, you know, the legacy associated with that. So, but, you know, we're moving in the right direction. And I think that the words out, right, when it comes to signal modulation, we got the goods. Patients do really, really well with our products. They get great supports on our team and so on.

Raymond Cohen: So, and bulk embed works like a charm. And it is clearly much easier for a woman who has stressed your inner incontinence to say, yes, to bulk embed, then to usling procedure as an example. So, hopefully that gave you a pretty close on that answer at any key to you, question. Thank you so much.

Operator: Please stand by for the next question.

Kallum Titchmarsh: The next question comes from Kallum Titchmarsh with Morgan Stanley. Your line is open. Thanks a lot guys for taking the question. Just on the DTC campaign, some interesting comments there. I'm wondering whether there's been certain respondent demographics or populations that have surprised you. Anything that's varied from the typical patient type you've seen receive an SNM treatment across the years. Given the goal of these campaigns, it's the spread awareness. I wanted to see whether you've seen anything different in patient mix since commencing me out.

Kallum Titchmarsh: Thanks a lot. Thank you for the question. I wouldn't say that there's anything different about the people responding to DTC, from the actual patient demographics of who we're actually implanting. I would say it's pretty consistent. I think the only difference is that we have more men responding to DTC than actually we have as percentages of our customers that get an implant. It turns out maybe 25% of the people inquiring are men, but in terms of actual implants it's less than 15% or somewhere around that number. That would be the only thing I call out.

Raymond Cohen: I think it's going to be really interesting now starting this month actually. We will have the first bowel dysfunction or fecal incontinence commercials that will be running with a gentleman who's a patient who talks about him having had both urinary and fecal incontinence and how exonics has changed his life. It'll be interesting to see and we specifically picked a man to do that particular commercial. We also have a woman who also has the same dual incontinence symptoms and we're running that commercial as well.

Raymond Cohen: This November we have for the first time a stress urinary incontinence commercial. We have a dual incontinence commercial where people are talking about urinary and fecal incontinence at the same time. In addition to the straight forward more generic OAB ads. You can see that we're trying to get to your question in a way. We're changing up the messaging and see what kind of response we get is in any different than what we've seen so far.

Raymond Cohen: It was time for us to be a little more specific with some of these symptoms and see if we can grow up in people and we're really curious to see how the fecal incontinence ad draws because talk about people being embarrassed. I mean it's one thing to talk about urinary dysfunction. It's really embarrassing to talk about fecal dysfunction. We do know that about 30% or so of the patients that actually get signal modulation for urinary urgent incontinence have some form of fecal incontinence to go along with it.

Raymond Cohen: So we can draw some of those people in presenting with fecal incontinence as their primary indication. It'll be really interesting to see how that impacts our business in general. So that's kind of what we're up to.

Raymond Cohen: But the demographic and why are we on television? Well, we're on television because if you look at third party staffs you'll find that the people 60 years are older are the ones that are watching network television. And that's why we're on television because that's our demographic that we're after the average of age of a person getting signal modulation for exonics 58 years old. So that's the case. We've tried screening services and some other fancy stuff in the past and it just doesn't pull as well as just clean vanilla Facebook and obviously a network television. So that's the story.

Michael Sarcone: Great. Appreciate a couple. Yeah, thank you. Please stand by for the next question.

Raymond Cohen: The next question comes from Michael Sarcone with Jeffries. Your line is open. Hey, good afternoon and thanks for quizzing me in here. Just a quick question. Can you just talk about in the US, what does rep productivity look like on average and kind of, you know, where do you think that could ultimately go? That's a good question. So, you know, we talked publicly early days that when we looked at the head count of our competitors for segment of modulation, their average productivity per rep was about $3.5 million.

Raymond Cohen: Now that was with a monopoly with no competition. This year in 2023, we expect average productivity to be a little over $2.5 million on a per rep basis. And we would expect, obviously, you know, nice increases consistent with what we're guiding in terms of our growth trajectory in 2024. So you could imagine, once again, not even finished our fourth year and to see the productivity to be as high as it is, we're encouraged by that. So that's the answer to your question. I think you've got to round it up higher, obviously, for 2024, but that's what we're looking at.

Mike Krakki: Great. Thank you, Ray. Thank you. Please stand by for the next question.

Raymond Cohen: The next question comes from Mike Krakki with Learing Partners. Your line is open. Hi, everyone. Thanks for saying our question. So are you really implemented DTC efforts and the new television commercials, likely initiatives that you expect to continue throughout or potentially accelerate in 2024? And then just as a quick follow up, how are you going to balance the trade off in that DTC spending versus committing to more meaningful investment in the head count side?

Raymond Cohen: Well, I think there are mutually exclusive, quite frankly. Once again, we're not looking at DTC as a driver of our business. We kind of look at it like that's the icing on top, right? And we're playing the long game. The DTC is about playing the long game for us, really counter programming messages that people are hearing on television that are ads that are suggesting it's normal to leak urine. And if you just take my pill or wear my panties or whatever, but both diapers or whatever it is, then everything is great.

Raymond Cohen: So we're the company that's spending the counter programming. But I want to emphasize that DTC is not the driver of our business. It's all the other initiatives that we've talked about and some of which I mentioned in this script today that are really driving the business. Now, having said that, our customers really appreciate the fact that we're on the airways and that we're providing these messages to folks. And some of this is going to be difficult to measure, right?

Raymond Cohen: There's additional benefits where not everybody's going to fill out a symptom question here. Not everybody's going to go to the website. Some of them just walk right into these offices and say ask me about exonics. And ask me about exonics therapy. Now, of course, when they walk into a customer location that does an offer exonics and they go tell me about exonics therapy, they go, yes, we got that too. It's called Interstim.

Operator: All right, I'm still waiting for the thank you card from our competitor for doing national television, but that hasn't been for a company. In any event, hopefully that gives you a reasonably colorful answer. Thank you for your question. Much appreciated. Thank you.

Operator: I show no further questions at this time.

Raymond Cohen: I would now like to turn the call back to Raymond Cohen for closing your remarks. Thank you operator. I appreciate your help today.

Raymond Cohen: So in closing, I'd like to say that our mission driven team remains committed to innovating, supporting our dedicated physician customers and their patients, raising awareness of our best in class therapies. And we're confident that Axonics will continue to grow rapidly and profitably in the years ahead as we continue to expand and penetrate the underserved and under-treated incontinence markets in which we participate. We remain grateful for the trust, physicians, patients and shoulders at place in Axonics.

Raymond Cohen: And as always, I would like to thank my colleagues and Irvine and our team in the field for our diligent efforts for their diligent efforts and dedication to fulfilling the iconic mission of improving the lives of adults within conflict. So thank you so much for the call today. Appreciate all the questions from the analyst community and we look forward to seeing and speaking with you in the weeks and months ahead.

Operator: This concludes today's conference call. Thank you for participating. You can now disconnect. Everyone have a great afternoon.

Operator: Thank you.