Q4 2023 Penumbra Inc Earnings Call

Operator: Good afternoon, my name is Audra, and I will be your conference operator today. At this time, I would like to welcome everyone to Penumbra's fourth quarter and year-end 2023 conference call. All lines have been placed on mute to prevent any background noise.

Good afternoon, My name is Adrienne and I will be your conference operator today at.

Adrienne: At this time I would like to welcome everyone to the numbers fourth quarter and year end 2023 conference call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session.

Operator: After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number 1 on your telephone keypad. If you would like to withdraw your question, press star 1 again. I would like to introduce Ms. Jee Hamlyn-Harris, Investor Relations for Penumbra. Ms. Hamlyn-Harris, you may begin your conference. Thank you, Operator, and thank you all for joining us on today's call to discuss Penumbra's earnings release for the fourth quarter and full year 2023. A copy of the press release and financial tables, which includes a gap to non-gap reconciliation, can be viewed under the Investors tab on our company website at www.penumbrainc.com. During the course of this conference call, the company will make forward-looking statements pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, including statements regarding financial performance, commercialization, clinical trials, regulatory status, quality compliance, and business trends.

We'd like to ask a question. During this time simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question Press Star one again.

Speaker Change: I would like to introduce MS Jee Hamlyn Harris Investor Relations for Penumbra, Ms. Hamlyn Harris you May begin your conference.

Speaker Change: Thank you operator, and thank you all for joining us on today's call to discuss the numbers earnings release for the fourth quarter and full year 2023.

Speaker Change: The press release and financial tables, which include the GAAP to non-GAAP reconciliation can be viewed under the investors tab on our company website at Www Dot Penumbra, Inc. Dot com during the course of this conference call. The company will make forward looking statements pursuant to the Safe Harbor provisions of the private Securities Litigation Reform Act of 1995.

Speaker Change: Including statements regarding our financial performance commercialization clinical trials regulatory status quality compliance and business trends.

Operator: Actual results could differ materially from those stated or implied by our forward-looking statements due to certain risks and uncertainties, including those referenced in our 10-K for the year ended December 31, 2023, which is scheduled to be filed with the SEC on February 22, 2024. As a result, we caution you against placing undue reliance on these forward-looking statements, and we encourage you to review our periodic filings with the SEC, including the 10-K mentioned earlier, for a more complete discussion of these factors and other risks that may affect our future results or the market price of our stock. Penumbra disclaims any duty to update or revise its forward-looking statements as a result of new information, future events, developments, or otherwise.

Speaker Change: Actual results could differ materially from those stated or implied by our forward looking statements due to certain risks and uncertainties, including those referenced in our 10-K for the year ended December 31, 2023, which is scheduled to be filed with the SEC on February 22 2024.

Speaker Change: As a result, we caution you against placing undue reliance on these forward looking statements I'm encourage you to review our periodic filings with the SEC, including the 10-K previously mentioned for a more complete discussion of these factors and other risks that may affect our future results or the market price at that stuff penumbra.

Speaker Change: Penumbra disclaims any duty to update or revise our forward looking statements as a result of new information future events developments or otherwise.

Jee Hamlyn: On this call, certain financial measures are presented on a non-GAAP basis. The corresponding GAAP measures and a reconciliation of GAAP to non-GAAP financial measures are provided in our posted press release. Non-GAAP operating expenses exclude the amortization of acquired intangible assets and a one-time expense associated with the acquisition of IP, R&D, and stock compensation.

Speaker Change: On this call certain financial measures are presented on a non-GAAP basis, the corresponding GAAP measures and a reconciliation of GAAP to non-GAAP financial measures are provided in the press release non.

non-GAAP operating expenses excludes the amortization of acquired intangible assets and a one time expense associated with the acquisition of IP R&D and adjusted EBITDA excludes a one time expense associated with the acquisition of IP R&D and stock compensation.

Jee Hamlyn: Adam Elsesser, Penumbra's chairman and CEO, will provide a business update. Maggie Ewan, our chief financial officer, will then discuss our financial results for the fourth quarter and full year 2023. And Jason Mills, our executive vice president of strategy, will discuss our 2024 guidance. With that, I would like to turn over the call to Adam Elsesser. Thank you, Jee.

Speaker Change: I don't know sets up the numbers chairman and CEO will provide a business update Maggie Yuen, our Chief Financial Officer will then discuss our financial results for the fourth quarter and full year 2023, and Jason Mills, Our executive Vice President of strategy will discuss our 2020 full guidance with that I would like to turn over the call to Adam Elsesser.

Adam Elsesser: Thank you Keith good afternoon. Thank you for joining <unk> fourth quarter and full year 2023 conference call. Our total revenues for the fourth quarter were $284 7 million a year over year increase of 28, 7% as reported and 27, 9% on a.

Adam Elsesser: Thank you for joining Penumbra's fourth quarter and full year 2023 conference call. Our total revenues for the fourth quarter were $284.7 million. A year over year increase of 28.7% is reported and 27.9% on a constant currency basis. For the full year 2023, our total annual revenues were $1,058,500,000, representing growth of 25% as reported and 24.7% in constant currency over the full year 2022. During the fourth quarter, our global thrombectomy business achieved a record revenue of $190.8 million, growing 42.4% as reported and 41.6% in constant currency on a year-over-year basis. Our global embolization and access revenue was $93.9 million, representing an increase of 7.6% as reported and 6.7% in constant currency over the same period a year ago. Our U.S. thrombectomy business continued driving outsized growth, increasing 46.4% compared to the same quarter a year ago, driven by continued growth with our computer-assisted vacuum thrombectomy, or CAVT products, in U.S. vascular thrombectomies. We also delivered more than 20% year-over-year growth in stroke thrombectomy in the U.S., with RED We expanded our gross margins in the fourth quarter to 65.7%.

Maggie Yuen: Constant currency basis for the full year 2023, our total annual revenues were 1 billion $58 $5 million representing growth of 25% as reported and 24, 7% in constant currency over full year 2022.

Maggie Yuen: During the fourth quarter, our global Thrombectomy business achieved record revenue of $198 million growing 42, 4% as reported and 41, 6% in constant currency on a year over year basis, our global embolization and access revenue was 93.

Maggie Yuen: $3 9 million Rep.

Maggie Yuen: Representing increasing seven 6% as reported and six 7% in constant currency over the same period a year ago.

Maggie Yuen: Our U S. Thrombectomy business continue driving outsized growth, increasing 46, 4% compared to the same quarter a year ago, driven by continued growth with our computer assisted vacuum thrombectomy.

Maggie Yuen: Capt products in U S vascular thrombectomy.

Maggie Yuen: We also delivered more than 20% year over year growth in stroke thrombectomy in the U S with Red 72, with <unk> technology, continuing to set the standard for the market and aspiration catheters and laying the groundwork for Thunderbolt.

Maggie Yuen: We expanded our gross margins in the fourth quarter to 65, 7%, we expect to continuing.

Adam Elsesser: We expect to continue expanding gross margins in 2024 owing to favorable product mix and increasing productivity. While we are making important investments to sustain strong growth into the future, we're also delivering increasing profitability. We delivered another record quarter of profitability in the fourth quarter. Non-GAAP operating income was $37.4 million, representing 13.1 percent of revenue.

Maggie Yuen: Continue to expanding gross margins in 2024, owing to favorable product mix and increasing productivity, while we are making important investments to sustain strong growth into the future. We're also delivering increasing profitability, we delivered another record quarter of profitability in the fourth quarter.

Maggie Yuen: non-GAAP operating income was $37 $4 million, representing 13, 1% of revenue, we posted record adjusted EBITDA of $53 4 million or 18.8.

Adam Elsesser: We posted record-adjusted EBITDA of $53.4 million, or 18.8% of total revenue, and we grew our operating cash balance by $40.3 million sequentially. We expect to expand our operating profitability in 2024 and beyond, all while we pursue the significant opportunity ahead of us in Trombach. 2023 was a watershed year for thrombectomy technology. The defining characteristic of this moment in time in Traubeck is a confluence of CAVT, true second-generation thrombectomy technology, and physicians' broadening recognition that this unique platform technology can now successfully treat the majority of both BTE and arterial clot patients.

Maggie Yuen: 8% of total revenue and we grew our operating cash balance by $43 million sequentially.

Maggie Yuen: We expect to expand our operating profitability in 2024 and beyond all while we pursue the significant opportunity ahead of us and thrombectomy.

Maggie Yuen: 23 was a watershed year for thrombectomy technology.

Maggie Yuen: Defining characteristic about this moment in time and thrombectomy is a confluence of Capt.

Maggie Yuen: True second generation Thrombectomy technology, and physicians broadening recognition that this unique platform technology can now successfully treat the majority of both pte.

Maggie Yuen: And arterial cut patients.

Adam Elsesser: Over the past several months, our expanded base of customers has communicated to us a desire to work together with their hospitals to expand the pathways of care for their thrombectomy patients. In other words, after 20 years of innovation in thrombectomy technology. Now is the time for Penumbra to start doing the next phase of the important work with the health care community to help the vast majority of COT patients who are not yet getting this treatment. To fulfill the promise of this opportunity for our patients and physicians, we are focused on three areas of work, which I began laying out on our third-quarter earnings call. They are innovation, internal readiness, and market access.

Over the past several months, our expanded base of customers have communicated to us desire to work together with their hospital systems to expand the pathways of care for their thrombectomy patients in other words following 20 years of innovation and Thrombectomy technology now is the time.

Maggie Yuen: For penumbra to start doing the next phase of the important work with the health care community to help the vast majority of <unk> patients who are not yet getting this treatment.

Maggie Yuen: To fulfill the promise of this opportunity for our patients and physicians. We are focused on three areas of work, which I began laying out on our third quarter earnings call. They are innovation internal readiness and market access.

Adam Elsesser: These areas of interconnected work are critical to our mission to reach all of these patients. Starting with innovation, Lightning Flash and Lightning Bolt 7 changed the trajectory of treatment for VTE and arterial thrombectomy in the United States during 2023. As many new customers work through the submission process for these transformational products late in the year, we saw the trajectory of our U.S. vascular thrombectomy business accelerate in late November. Coupled with the growth of our commercial team in the U.S., we see this new trajectory as sustainable, as reorder rates for both flash and bolt remain as high as any product we've ever launched in thrombectomy. As we look into 2024 and beyond, the innovation that delivered Flash and Bolt remains at the core of Penumbra. We recently received FDA clearance for Flash 2.0, the first of our four new CAVT products expected over the next 15 months. Flash 2.0 raises the already high bar established just a year ago by lightning flash in VTE thrombectomy, as 2.0 further optimizes the advantages of CAVT and PE and DVT procedures.

These areas are interconnected work are critical to our mission to reach all of these patients starting with innovation Lightning flash and lightning bolt seven change the trajectory of treatment and V T E and arterial thrombectomy in the United States during 2023.

Maggie Yuen: As many new customers worked through the submission process for these transformational products late in the year, we saw the trajectory of our U S vascular thrombectomy business accelerate in late November.

Maggie Yuen: Coupled with the growth of our commercial team in the U S. We see this new trajectory as sustainable as reorder rates for both flash and bolt remain as high as any product we've ever launched and thrombectomy.

Maggie Yuen: As we look into 2024 and beyond the innovation that delivered flashing bolt remains at the core of Penumbra. We recently received FDA clearance for flash to point out the first of our four new CVT products expected over the next 15 months.

Maggie Yuen: <unk> 2.0 raises the already high bar established just a year ago.

Maggie Yuen: With Lightning Flash and V. T E thrombectomy as 2.0 further optimizes the advantages of Capt in PE and DVT procedures.

Adam Elsesser: Further, the next three products will expand the breadth of CABT's utility to more areas of the body and will enhance the safety, speed, and simplicity with which CABT tackles the variety of clot morphology. In addition, Thunderbolt is progressing very well in the thunder study, and we are excited to bring the advantage of CAVT to stroke thrombectomy as well, especially with our increasing market share in stroke aspiration catheters. Further on the innovation front, we are advancing our strategy to leverage the fact that we have a computer chip in every case, dedicated to each individual procedure. Through this important work, we will integrate new technology into the platform that can seamlessly collect valuable information, both procedural and patient-specific. This information will be utilized by physicians in real time and in reflection to further enhance treatment and produce efficiencies in patient care that could pay dividends for patients, physicians, and hospital systems for many years to come. Moving to internal readiness, the fourth quarter was a very important moment in time for Penumbra.

Further the next three products will expand the breadth of Capt's utility to more areas of the body and will enhance the safety speed and simplicity with which Capt tackles, the variety of plaque morphology and.

Maggie Yuen: In addition, Thunderbolt is progressing very well and the Thunder study and we're excited to bring the advantages of Capt to stroke, thrombectomy, as well, especially with our increasing market share in stroke aspiration catheters.

Maggie Yuen: Further on the innovation front, we are advancing our strategy to leverage the fact that we have a computer chip in every case dedicated to each individual procedure.

Maggie Yuen: Through this important work, we will integrate new technology into the platform that can seamlessly collect valuable information, both procedural and patient specific.

Maggie Yuen: This information will be utilized by physicians in real time and in reflection.

Maggie Yuen: To further enhance treatment and produce efficiencies and patient care that could pay dividends for patients physicians and hospital systems for many years to come.

Maggie Yuen: Moving to internal readiness the fourth quarter.

Maggie Yuen: Very important moment in time for penumbra.

Adam Elsesser: The momentum in CABT with Flash and Bolt in 2023 gave us the opportunity to bring more focus on thrombectomy, as well as more scale and efficiency, to our Bass Filler sales. We augmented the capabilities of the team in some areas and increased the size of the team overall. Much of this hiring was accomplished during the fourth quarter, with continued hiring and significant training taking place throughout the current quarter. In addition to our commercial team in the U.S., we continue to make significant progress on efficient manufacturing at scale, which would benefit our gross margins going forward. Given how early we are in the penetration curve for CABT and thrombectomy, this internal readiness work is timely, important, and will continue to evolve. The third area of WordPress is market access, through which we are developing additional evidence to validate the clinical benefit of our CAVT platform and health economic data with which hospitals can make more informed decisions about treatment paradigms. We believe there are at least 800,000 arterial and VTE thrombectomy patients in the U.S. each year.

Maggie Yuen: The momentum in CABG with flash and bolt in 2023 gave us the opportunity to bring more focus on thrombectomy as well as more scale and efficiency to our vascular sales team.

Maggie Yuen: We augmented the capabilities of the team in some areas and increased the size of the team overall.

Maggie Yuen: Much of this higher and was accomplished during the fourth quarter with continued hiring and significant training taking place throughout the current quarter.

Maggie Yuen: In addition to our commercial team in the U S. We continued to make significant progress on efficient manufacturing at scale, which would benefit our gross margins going forward.

Maggie Yuen: Given how early we are in the penetration curve for CABG and thrombectomy. This internal readiness work as timely important and will continue to evolve.

Maggie Yuen: Third area of work for Us is market access.

Maggie Yuen: Through which we are developing additional evidence to validate the clinical benefit of our <unk> platform and health economic data with which hospital systems can make more informed decisions on treatment paradigms.

Maggie Yuen: We believe there are at least 800000 arterial and venous thrombectomy patients in the U S. Each year.

Adam Elsesser: In order to reach the majority of these patients over the next 5 plus years, our market access work with large hospital systems is critical. With hospital system partners, we are collecting and analyzing real-world data on an increasing number of CABT procedures compared to traditional therapy. These initiatives will focus on DBT-PE for Arterial and Stroke.

Maggie Yuen: In order to reach the majority of these patients over the next five plus years, our market access work with large hospital systems is critical.

Maggie Yuen: With hospital systems partners, we are collecting and analyzing real world data and increasing number of CABG procedures compared to traditional therapies. These initiatives will focus on DVT PE arterial and stroke. We believe this work will validate the getting the cloud.

Adam Elsesser: We believe this work will validate getting the clot out by optimizing safety. Speed and simplicity with CABT are advantageous to the patient, physician, and the hospital system in terms of both clinical outcomes and health economics. The benefits from the work we are doing in these three areas in 2024 will accrue primarily to our U.S. thrombectomy business, given that Flash and Bolt7 have already built momentum, the new products in TABT are coming first to the U.S., and reimbursement is in place for these procedures. In 2024, we project our U.S. thrombectomy business will deliver 27 to 30 percent year-over-year growth. While displacing traditional therapies and first-generation mechanical products will drive part of our growth, we believe the work I just described across these three areas will move more patients into the system to receive CAVT therapy in 2024 and build even more momentum in the U.S. over the next few years. Outside the U.S., our opportunity with CABT is also compelling for future U.S. patients, and we are well into the work with regulatory and reimbursement bodies in Europe, Asia, the Pacific, and Latin America to bring the entire CABT portfolio to patients outside the U.S. as well.

Maggie Yuen: By optimizing safety.

Maggie Yuen: Speed and simplicity with CABG is advantageous to the patient physician and hospital system in terms of both clinical outcomes and health economics.

Maggie Yuen: The benefits from the work we are doing in these three areas in 2024 will accrue primarily to our U S. Thrombectomy business, given that flash and bolt seven have already built momentum the new products and TVT are coming first in the U S and reimbursement is in place for these procedures.

Maggie Yuen: In 2024, we project our U S thrombectomy business will deliver 27% to 30% year over year growth.

Maggie Yuen: While displacing traditional therapies in first generation mechanical products will drive part of our growth. We believe the work I. Just described across these three areas will move more patients into the system to receive CBT therapy in 2024 and build even more momentum in the U S. Over the next few years.

Maggie Yuen: <unk>.

Maggie Yuen: Outside the U S. Our opportunity with CVT is also compelling for future years, and we are well into the work with regulatory and reimbursement bodies in Europe Asia Pacific and Latin America to bring entire CBT portfolio to patients outside the U S as well.

Adam Elsesser: We think we will begin to see the positive impact on our international thrombectomy business in 2025. This strategy, and the timing associated with it, allows us to not only focus on sustaining long-term revenue growth but also increase profitability. For the last 20 years, the Penumbra team has worked very hard to continuously innovate and, in so doing, has built what has become the largest thrombectomy company in the world, removing blood clots from head to toe. This innovation has led to the CABT platform.

Maggie Yuen: We think we will begin to see the positive impact to our international thrombectomy business in 2025.

Maggie Yuen: This strategy and the timing associated with it allows us to not only focus on sustaining long term revenue growth, but also increase in profitability.

Maggie Yuen: For the last 20 years. The Penumbra team has worked very hard to continuously innovate and in so doing has built with its become the largest thrombectomy company in the world removing blood clot from head to toe.

Maggie Yuen: This innovation has led to the <unk> platform.

Adam Elsesser: Now is the time to start the next phase of the strategy, which we have outlined in detail again today. Our successful execution of this strategy will make our technology available to everyone who can benefit. This work will be hard and will not always be a straight line. However, it will be profound and extremely motivating. The company is in the best position we've ever been. The Penumbra team is stronger than at any point in our history.

Maggie Yuen: Now is the time to start the next phase of the strategy, which we have outlined in detail again today.

Maggie Yuen: Our successful execution of this strategy will make our technology available to everyone who can benefit.

Maggie Yuen: This work will be hard and will not always be a straight line.

Wherever it will be profound and extremely motivating.

Maggie Yuen: The company is in the best position we've ever been.

Maggie Yuen: The penumbra team is stronger than at any point in our history.

Adam Elsesser: And over the next few years, our CABT products can positively impact the vast untreated patient population in ways no other technology platform has been able to before. I'll now turn the call over to Maggie to go over our financial results for the fourth quarter and full year 2023. Thank you, Adam. Good afternoon, everyone.

Maggie Yuen: And over the next few years, our CVT products can positively impact the vast untreated patient population in ways no. Other technology platform has been able to before.

Maggie Yuen: I'll now turn the call over to Maggie to go over our financial results for the fourth quarter and full year 2023.

Maggie Yuen: Thank you Adam good afternoon, everyone today, I will discuss our financial results for the fourth quarter and full year of 2023 financial results on this call for revenue and gross margin on a GAAP basis, while operating expenses and operating income on a non-GAAP basis, our corresponding GAAP measures and a reconciliation.

Maggie Ewan: Today, I will discuss the financial results for the fourth quarter and full year of 2020. Financial results on this call for revenue and growth margin on a gap basis, while operating expenses and operating income on a non-gap basis. The corresponding gap measures and our reconciliation of gap to non-gap financial measures are provided in our posted press release.

Maggie Yuen: GAAP to non-GAAP financial measures are provided in our posted press release.

Maggie Ewan: For the fourth quarter ended December 31st, 2023, our total revenues were $284.7 million, an increase of 28.7% reported and 27.9% in constant currency compared to the fourth quarter of 2020. Our geographic mix of sales for the fourth quarter 2023 was 71.5% U.S. and 28.5% international. For the fourth quarter 2023, our US regions reported growth of 29.6%, primarily driven by 46.4% year over year growth in the US. From that, our international regions increased 26.4% reported and 23.5% in constant current. The sequential growth in our total revenue of 5.1% was primarily driven by an increase in our global vast growth from back-to-me business of $12.2 million for 10.1%. Moving to revenue by product.

Maggie Yuen: For the fourth quarter ended December 31, 2023, our total revenues were $284 $7 million, an increase of 28, 7% reported and 27, 9% in constant currency compared to the fourth quarter of 2022.

Maggie Yuen: Our geographic mix of sales for the fourth quarter 2023 was 71, 5% in U S and 28, 5% International.

Maggie Yuen: Fourth quarter 2023, our U S region reported growth of 29, 6%, primarily driven by a 46, 4% Euro video growth in U S. Thrombectomy.

Maggie Yuen: Our international regions increased 26, 4% reported and 23, 5% in constant currency.

Maggie Yuen: The sequential growth in our total revenue of five 1% was primarily driven by an increase in our global vascular thrombectomy business.

$1 2 million or 10, 1%.

Maggie Yuen: Moving to revenue by products.

Maggie Ewan: Starting this quarter, we are providing new revenue disclosures that better align with our business goals. As presented in our press release, we are providing detailed revenue results for our thrombectomy business and our embolization and access business, respectively, in the United States, international, and global. Revenue from our global thrombectomy business grew to $190.8 million in the fourth quarter of 2020, an increase of 42.4% reported and 41.6% in constant currency compared to the same period last year. Revenue from our embolization and access business was $93.9 million in the fourth quarter of 2020.

Maggie Yuen: Starting this quarter, we are providing new revenue disclosures that better align with our business.

Maggie Yuen: As presented in our press release, we are providing detailed revenue results of our thrombectomy business and embolization and access treatment, respectively in the United States International and globally.

Maggie Yuen: Revenue from our global Thrombectomy business grew to $198 million in the fourth quarter of 2023, an increase of 42, 4% reported and 41, 6% in constant currency compared to the same period last year.

Maggie Yuen: Revenue from our embolization and access business was $93 9 million in the fourth quarter of 2023, an increase of seven 6% reported and seven 6% reported and six 7% in constant currency compared to the same period a year ago.

Maggie Ewan: An increase of 7.6% reported and 6.7% in constant currency compared to the same period a year ago. Before turning to our income statement, I will provide fourth-quarter revenue results in the format we had previously used before we transition to the new disclosure format going forward. On a global basis, and compared to the fourth quarter of last year, revenue from alveolar thrombectomy was $133.4 million, an increase of 64 percent. Neurothrombectomy was $57.4 million, an increase of 9 percent.

Maggie Yuen: Before turning to our income statement I will provide fourth quarter revenue results in the form that we had previously used before we transition to the new disclosure format going forward.

Maggie Yuen: On a global basis and compared to the fourth quarter of last year revenue from our vascular from back to me.

$133 $4 million, an increase of 64%.

Zero Thrombectomy was $57 4 million an increase of 9%.

Maggie Ewan: Vascular embolization was $51.5 million, an increase of 7.3%. Neuroaccess was $33.2 million, an increase of 18.3%. Neuroembolization was $5.9 million, a decrease of 33.8%.

Maggie Yuen: Escolar embolization was $51 $5 million, an increase of seven 3% neuro access was $33 2 million an increase of 18, 8%.

Maggie Yuen: Miro Embolization worth $5 9 million a decrease of 33, 8% and other revenues were $3 $8 million, an increase of 46, 3%.

Maggie Ewan: And other revenues were $3.3 million, an increase of 46.3%. U.S. thrombectomy was our primary growth driver in the fourth quarter and will continue to be in 2024. And we are also being disciplined with our commercial strategy for our embolization portfolio. In sum, we are focused on driving both strong revenue growth and increasing profitability going forward. Turning to gross margin, gross margin for the fourth quarter of 2023 is 65.7%, compared to 62.6% for the fourth quarter of 2022 and 65.6% last quarter.

Maggie Yuen: U S. Thrombectomy was our primary growth driver in the fourth quarter and will be in 2024, and we are also being disciplined with our commercial strategy for our embolization portfolio.

In sum, we are focused on driving both strong revenue growth and increasing profitability going forward.

Maggie Yuen: Turning to gross margin gross margin for the fourth quarter of 2023% to 69, 7% compared to 62, 6% for the fourth quarter of 2022, and 65, 6% last quarter to 300 basis point improvement compared to prior year, driven by higher come back to me product mix well cost.

Maggie Ewan: The 300 basis points improvements compared to the prior year are driven by higher thrombectomy product mix, while cost savings and improvement and productivity and volume leverage have offset labor inflation and material price increases. In 2024, we target improvements of 100 to 150 basis points in gross margin, which reflects continued favorable performance from back-to-me product mix, investment to support new product launches, and variation in regional and distributor mix. Now on to our non-GAAP operating expenses, Non-GAAP Operating Income, Margin, and Adjusted EBITDA. Total operating expense for the quarter was $149.6 million, or 52.5% of revenue, compared to $131.2 million, or 59.3% of revenue for the same quarter last year, and $144.5 million, or 53.3% of revenue for the last quarter.

Maggie Yuen: Savings and improvements in productivity and volume leverage have offset labor inflation and material price increases.

Maggie Yuen: In 2024, we target improvements of 100 to 150 basis points expansion in gross margin.

Maggie Yuen: It reflects continued favorable from back to meet product mix investments to support new product launches and variations in regional and distributor makes it.

Maggie Yuen: Now on to our non-GAAP operating expenses, non-GAAP operating income and margin and adjusted EBITDA.

Maggie Yuen: Total operating expense for the quarter was $149 6 million or 52, 5% of revenue compared to $131 2 million or 59, 3% of revenue for the same quarter last year, and $144 5 million or 53, 3% of revenue for last quarter.

Maggie Yuen: Our research and development expenses for Q4, 2023, or $21 9 million compared to $18 million for Q4 of 2022 and $21 million from last quarter.

Maggie Ewan: Our research and development expenses for Q4 2023 were $21.9 million compared to $18 million for Q4 2022 and $21 million for the last quarter. SG&A expenses for Q4 2023 were $127.6 million, or 44.8% of revenue, compared to $113.3 million, or 51.2% of revenue, for Q4 2022 and $123.5 million, or 45.6% of revenue, last quarter. Increases in the fourth quarter were driven by an increase in headcount for our U.S. commercial business. We recorded operating income of $37.4 million, or 13.1% of revenue, in the fourth quarter of 2023, compared to an operating income of $7.2 million, or 3.3% of revenue for the same period last year, and operating income of $33.2 million, or 12.3% of revenue last quarter. We continue to focus on innovation of our products, commercial evolution of our U.S. sales team to address the increased opportunity in front of us, and market access programs in DBT, stroke, arterial, and PE, all of which support an increased number of patients treated.

Maggie Yuen: SG&A expenses for Q4, 2023 were $127 $6 million of 44, 8% of revenue compared to $113 $3 million or 51, 2% of revenue for Q4, 2022, and $123 $5 million or 45, 6% of <unk>.

Maggie Yuen: Revenue last quarter.

Maggie Yuen: Increases in our fourth quarter were driven by an increase in head count for our U S commercial team.

Maggie Yuen: We recorded operating income of $37 4 million or 13, 1% of revenue in the fourth quarter of 2023 compared to an operating income of $7 2 million or three 3% of revenue for the same period last year and operating income of $33 $2 million on 12.

Maggie Yuen: 3% of revenue last quarter.

Maggie Yuen: We continue to focus on innovation of our products commercial evolution of our U S sales team to address the increased opportunity in front of us and market access programs in DVT stroke arterial MPD all of which supports an increased number of patients treated.

Maggie Yuen: While we continue to spend on these long term projects that will allow us to scale our organization into the future. We also continue to exercise discipline in our other spending the present.

Maggie Yuen: In 2024, we target improvements of 100 to 200 basis point expansion in our operating margin.

Maggie Yuen: We posted record adjusted EBITDA of $53 4 million or 18, 8% of total revenue compared to 10, 5% in the fourth quarter last year.

Maggie Ewan: While we continue to spend on these long-term projects that will allow us to scale our organization into the future, we also continue to exercise self-discipline in our other spend in the present. In 2024, we target improvements of 100 to 200 basis points in our operating market. We posted record adjusted EBITDA of $53.4 million, or 18.8% of total revenue, compared to 10.5% in the fourth quarter last year.

Maggie Yuen: I will now summarize our full year performance for the full year of 2023.

Maggie Yuen: Our total revenue for the year was 1 billion $58 5 million, which represents an increase of 25% reported and 20 footprint was 24, 7% in constant currency compared to full year 2022.

Maggie Yuen: Our geographic makes up sales in the year were 71, 5% in U S and 28, 5% International.

Maggie Yuen: Full year 2023 U S reported a growth of 28% primarily driven by growth from our vascular thrombectomy business up 45, 2% and our international regions increased 18% reported and 17, 3% in constant currency.

Maggie Ewan: I will now summarize our school year performance for the full year of 2023. Our total revenue for the year was $1,058,500,000, which represents an increase of 25% reported and 24.7% in constant currency compared to the full year 2022. Our geographic mix-up sales in the year were 71.5% U.S. and 28.5% international.

Maggie Yuen: Revenue from our global Thrombectomy business for the full year of 2023 or $677 million, an increase of 32, 5% reported and 32, 3% in constant currency.

Maggie Yuen: Revenue from our global Embolization and access business for the full year of 2023 was $381 2 million an increase of 13, 4% reported and 13, 2% in constant currency.

Maggie Ewan: For the full year 2023, U.S. reported growth of 28%, primarily driven by growth from our vascular thrombectomy business of 45.2%, and our international regions increased 18% reported and 17.3% in confidence. Revenue from our global thrombectomy business for the full year of 2023 was $677.3 million, an increase of 32.5% reported and 32.3% in constant current. Revenue from our global embolization and access business for the full year of 2023 was $381.2 million, an increase of 13.4% reported and 13.2% in confidentiality. Revenue from our vascular business for the full year of 2023 was $652.4 million, an increase of 30.6% reported and 30.6% in cost increase. Revenue from our new rural business for the full year of 2023 was $406.1 million, an increase of 16.8% reported and 16.3% in cost increase. Our gross margin for the year was 64.5% of revenue compared to 63.2% of revenue for the full year 2020. We had non-GAAP operating income for the full year of $101.3 million compared to a non-GAAP operating income of $14.4 million for 2020.

Maggie Yuen: Revenue from our vascular business for the full year of 2023 was $652 4 million, an increase of 36% reported and 30.

36% in constant currency.

Maggie Yuen: Revenue from our neuro business for the full year of 2023 was $406 1 million an increase of 16, 8% reported and 16, 8% in constant currency.

Maggie Yuen: Our gross margin for the year was 64, 5% of revenue compared to 63, 2% of revenue for the full year 2022.

Maggie Yuen: We had non-GAAP operating income for the full year up $101 $3 million compared to a non-GAAP operating income of $14 $4 million for 2022.

Maggie Yuen: Our adjusted EBITDA is $176 million or 16, 1% of total revenue compared to seven 7% last year.

Maggie Yuen: Turning to cash flow and balance sheet, we ended the fourth quarter with cash cash equivalence and marketable securities balance of $289 2 million and no debt, which is an increase of $43 million from last quarter. We expect positive operating cash flow trend to continue in 2024.

Maggie Yuen: And now I'd like to turn the call over to Jason to discuss our guidance.

Jason Mills: Thank you Maggie and good afternoon, everyone for 2024, we introduced guidance for total revenue in the range of $1 $230 million to $1 $270 million, representing year over year growth of 16% to 20% compared to $1 $58 $5 million in tow.

Jason Mills: Our adjusted EBITDA is $170.6 million, or 16.1% of total revenue compared to 7.7% last year. Turning to cash flow and balance sheets, we ended the fourth quarter with cash, cash equivalents, and marketable securities balance of $289.2 million and no debt, which is an increase of $40.3 million from last quarter. We expect the positive operating cash flow trend to continue in 2024. And now, I'd like to turn the call over to Jason to discuss our guidance. Thank you, Maggie, and good afternoon, everyone.

Jason Mills: Revenue in 2023, primarily based on currently forecasted orders from our international distributors and timing of new product launches, we expect global revenue growth in the first half of the year to be in the mid teens range. Then we expect growth to accelerate to the high end of our 16% to 20% guidance range or above.

Jason Mills: In the second half of the year, we guide to use thrombectomy revenue growth in the range of 27% to 30% year over year, we expect growth in U S. Thrombectomy to be consistently strong in this range throughout the four quarters of the year, we expect our U S embolization and access.

Jason Mills: Business to contribute low double digit growth in 2024, and therefore in total we expect our U S business to deliver strong consistent growth in the 22% to 25% range throughout the year from a geographical distribution perspective, we expect our U S business.

Jason Mills: For 2024, we introduced guidance for total revenue in the range of $1,230,000,000 to $1,270,000,000, representing year-over-year growth of 16% to 20% compared to $1,058,500,000 in total revenue in 2023. Primarily based on currently forecasted orders from our international distributors and timing of new product launches, we expect global revenue growth in the first half of the year to be in the mid-teens range. Then we expect growth to accelerate to the high end of our 16% to 20% guidance range or above in the second half of the year. We guide to U.S. thrombectomy revenue growth in the range of 27% to 30% year-over-year. We expect growth in U.S. thrombectomy to be consistently strong in this range throughout the four quarters of the year. Additionally, we expect our U.S. embolization and access business to contribute low double-digit growth in 2024. And therefore, in total, we expect our U.S. business to deliver strong, consistent growth in the 22% to 25% range throughout the year.

Jason Mills: To represent 73% to 75% of our global revenue in 2024.

Jason Mills: Outside the United States, we have worked the past two years to expand the foundation for Thrombectomy and our international markets with our legacy products and have made significant progress in 2024 more of our focus will be on a regulatory reimbursement and market access initiatives to bring our.

Jason Mills: <unk> products to patients outside the United States as we do this work this year, we expect our international Thrombectomy revenue in 2024 to grow modestly over 2023 levels and as these initiatives come through we expect to accelerate our international thrombectomy growth in 2025.

Jason Mills: <unk> also on the international front, we are focusing more on driving profitable growth. We plan to continue to be disciplined with our commercial strategy in the near term for our embolization and access products in certain international markets, where prices do not currently reflect the value of our products.

Jason Mills: At the same time, we are continuing our work with international regulatory and reimbursement agencies with our new products in these areas.

Jason Mills: From a geographical distribution perspective, we expect our U.S. business to represent 73% to 75% of our global revenue in 2024. Outside the United States, we have worked for the past two years to expand the foundation for thrombectomy in our international markets with our legacy products and have made significant progress. In 2024, more of our focus will be on regulatory, reimbursement, and market access initiatives to bring our CABT products to patients outside the United States. As we do this work this year, we expect our international thrombectomy revenue in 2024 to grow modestly over 2023 levels. And as these initiatives come through, we expect to accelerate our international thrombectomy growth in 2025. Also, on the international front, we are focusing more on driving profitable growth. We plan to continue to be disciplined with our commercial strategy in the near term for our embolization and access products in certain international markets where prices do not currently reflect the value of our products. At the same time, we are continuing our work with international regulatory and reimbursement agencies with our new products in these areas.

Jason Mills: In sum, we expect our total international revenue in 2020 forward to be similar to 2023 levels and we think our international revenue will accelerate to double digit growth in 2025 as a final thought as we look beyond the current year as Adam mentioned, we believe our CIBC products will sustain strong growth for.

Jason Mills: The company.

Jason Mills: Over the ensuing years.

Speaker Change: Operator, we can now open the call for questions for the next 35% or 40 minutes.

Speaker Change: Thank you at this time I would like to remind everyone in order to ask a question Press Star then the number one on your telephone keypad.

Speaker Change: We'll go first to Joanne Wuensch at Citi.

Joanne Karen Wuensch: Thank you very much for taking the questions.

Speaker Change: Ask.

Joanne Karen Wuensch: I'm curious I'm going to ask you one.

Joanne Karen Wuensch: We're hearing about increased payer scrutiny on mechanical thrombectomy I'm curious how that may or may not be impacting you and then number two how do we think about.

Joanne Karen Wuensch: That's sort of ongoing profitability metrics I'm finding that comes up.

Joanne Karen Wuensch: More and more unsubtle stocks in Med Tech you know sort of an L. R. P longer term view on gross and operating margins. Thank you.

Speaker Change: Yeah first of all.

Speaker Change: Thanks for the good questions.

Speaker Change: We in fact did not.

Speaker Change: Mechanical thrombectomy, particularly as we see it we have not seen.

Speaker Change: The type of what Youre, calling scrutiny that shows up in other types of procedures that are removing.

Operator: In sum, we expect our total international revenue in 2024 to be similar to 2023 levels, and we think our international revenue will accelerate to double-digit growth in 2025. As a final thought, as we look beyond the current year, as Adam mentioned, we believe our CAVT products will sustain strong growth for the company over the ensuing years. Operator, we can now open the call for questions for the next 35 or 40 minutes. Thank you. At this time, I would like to remind everyone in order to ask a question, press star then the number one on your telephone keypad. We'll go first to Joanne Wuensch at Citi.

Speaker Change: We're moving blood clots in the cases, so we haven't really seen that in fact.

Speaker Change: We thought the opposite this year in arterial there were some increases, particularly interesting increases related to hospital outpatient use so I think we're seeing the opposite.

Speaker Change: As it relates to sort of how do we think about profitability.

We've outlined the beginning on this call our thoughts and plans around how we want to continue to accelerate that by focusing on certain areas, where we're not seeing the same sort of price.

Joanne Karen Wuensch: Thank you very much for taking the questions. Lots to ask. I'm curious, so I'm going to ask two.

Adam Elsesser: One, we're hearing about increased payer scrutiny on mechanical thrombectomy, and I'm curious how that may or may not be impacting you. And then, number two, how do we think about sort of ongoing profitability metrics? I'm finding that comes up more and more on several stocks in MedTech, you know, sort of an LRP, a longer-term view on gross and operating. Thanks. Yeah, first of all, thanks for the good questions. We, in fact, did not. On mechanical thrombectomy, particularly as we see it, we have not seen the type of what you're calling scrutiny that shows up in other types of procedures that aren't removing blood clots in cases.

Speaker Change: Value for some of our embolization and access business. So we're going to be disciplined about it we sort of have if you will the luxury of being disciplined about that because we don't need every last dollar revenue when we have the growth of <unk> in the U S.

And coming to the rest of the world in out years. So.

Speaker Change: I think youll see more and more focus on that without taking away focus on the growth and I think that's an important.

Speaker Change: Youre seeing the beginning of that in the last couple of quarters, and I think youll see that continue pretty strong.

Speaker Change: Thank you.

Speaker Change: Q.

Speaker Change: Okay.

Tobey Lane: And we'll go next to Tobey lanes.

Tobey Lane: Okay.

Tobey Lane: Yes.

Tobey Lane: Hi, This is Lee calling on Celerity also from Wells Fargo can you hear me, Okay, Yes, yes highly.

Adam Elsesser: So we haven't really seen that. In fact, we saw the opposite this year. In arterial, there were some increases, particularly interesting increases related to hospital outpatient use.

Tobey Lanes: Hi, Hi, everyone. Thanks for the question.

Lee: My question is around the 2024 guidance, the 60% to 20% growth.

Adam Elsesser: So I think we're seeing the opposite. As it relates to sort of how we think about profitability, you know, we've outlined the beginning of our thoughts and plans around how we want to continue to accelerate that by focusing on certain areas where, you know, we're not seeing the same sort of price or value for some of our embolization access business, so we're going to be disciplined about it. We sort of have, if you will, the luxury of being disciplined about that because we don't need every last dollar of revenue when we have the growth of CAVT in the U.S. and coming to the rest of the world in our years. So I think you'll see more and more focus on that without taking away focus on growth. I think that's important. You're seeing the beginning of that in the last couple of quarters, and I think you'll see that continue pretty strong. Thank you. And we'll go next, Sylvia Hwang. Hi, this is Leigh, calling in on behalf of Larry Biegelsen from Wells Fargo. Can you hear me okay?

Lee: Mid pointing at 18%.

Speaker Change: That's quite a bit of deceleration and thank you for the color on that.

Lee: The breakdown can you talk a little bit about how to think about the sales cadence through the year just given there's so many different dynamics running through the different segments.

Speaker Change: I have a follow up.

Speaker Change: Yes.

Speaker Change: Absolutely.

Speaker Change: Let me start.

Speaker Change: First.

Speaker Change: Thing I.

Speaker Change: We stand by our comment that we made.

Operator: Yes, hi Leigh. Yeah, hi Leigh. Hi. Hi, everyone. Thanks for the questions. My question's around the 2024 guidance, the 16 to 20% growth, the midpoint being at 18%. That's quite a bit of deceleration.

Leigh: And thank you for the color on the breakdown. Can you talk a little bit about how to think about the sales cadence through the year, just given there are so many different dynamics running through the different segments? And I have a follow-up. Yeah, absolutely, Leigh.

Speaker Change: In a slightly different way, but it's also how we're managing the business you know that's how we see the growth that's where the growth is that's what the excitement around the opportunity to finally do what we set out to do 20 years ago, which is with this platform week, we have visibility we have the strategy.

Jason Mills: Let me start by saying, you know, I stand by the comment that we made at your conference last September when our, and our overall guidance reflects our confidence by projecting that we think 20% growth is achievable. I want to emphasize, though, that we also added a lot more transparency, which you alluded to, by providing guidance for our U.S. thrombectomy business, where we project 27 to 30% growth. And that's probably the most important, the more important number right now, since it focuses on our CABT platform, which is only right now in the U.S. And it also allows us to prepare our international markets in 2024 for our CABT platform in the future, so we can have similar accelerated growth throughout the world in the following years.

Speaker Change: Around making sure we can bring this to everyone who has caught their body from head to toe. We're hearing that from large hospital systems. We're hearing that from customers were seen that in the cases, so we're trying to focus our energies on.

Speaker Change: That opportunity and and it takes some discipline because that hasn't always been the sole focus of the company. So you're seeing that and how we're thinking about our international business or coil and access business with that focus right now but again.

Speaker Change: Thinking about is you know the other parts of our business matter, but the 27 to 30 per cent growth in U S thrombectomy, as our focus and and Jason can follow up.

Jason Mills: And that's how we're thinking about the business. And I acknowledge that there's a lot to digest, because we've given you a lot of different numbers and talked about our business in a slightly different way. But it's also how we're managing the business. You know, that's how we see growth. That's where the growth is. That's what the excitement is around, the opportunity to finally do what we set out to do 20 years ago, which is, with this platform, we have visibility. We have the strategy around making sure we can bring this to everyone who has caught their body from head to toe.

Jason Mills: Just to follow up on that with respect to the cadence. So a couple of things I just want to repeat.

Jason Mills: Go over again, we we commented about that 27% to 30% in U S thrown back to me as well as the entire U S business at 22% to 25% delivering pretty consistent growth.

Jason Mills: In that range through the year. So the cadence Squirrelly is primarily based on distributor order timing to which we have very good visibility.

Adam Elsesser: We're hearing that from large hospital systems. We're hearing that from customers. And we're seeing that in the cases.

Adam Elsesser: So we're trying to focus our energies on that opportunity, and it takes some discipline because that hasn't always been the sole focus of the company. So you're seeing that in how we're thinking about our international business, our coil and access business with that focus right now. But again, what we're thinking about is, you know, the other parts of our business matter, but the 27 to 30 percent growth in U.S. thrombectomy is our focus. And Jason can follow up.

Jason Mills: As well as timing of product launches as well to which we have again really good visibility we believe.

Jason Mills: And so Madam mentioned, we we think that the the U S around back to me number is the number to really look at primarily.

Jason Mills: And we've commented also that our international business should accelerate in 2025, we have a high degree of confidence in that as well.

Speaker Change: Okay. That's helpful. Just that clarification, what you just said <unk>. So you want grilled overall, it's pretty consistent since really that Oh, you asked when you're talking about the distributor tiny that's driving that <unk> <unk> <unk> <unk>.

Jason Mills: Yeah, Leigh, just to follow up on that with respect to the cadence. So there are a couple things I just want to repeat and go over again. We commented on that 27 to 30 percent in U.S. thrombectomy, as well as the entire U.S. business at 22 to 25 percent, delivering pretty consistent growth in that range through the year. So the quarterly cadence is primarily based on distributor order timing, to which we have very good visibility, as well as timing of product launches as well, to which we have, again, really good visibility, we believe. And so, as Adam mentioned, we think that the U.S. thrombectomy number is the number to really look at primarily.

Speaker Change: Hi, 20 per cent or higher.

Speaker Change: That's correct that's correct.

Speaker Change: That's correct and we have we have very good visibility in the end of the timing, it's just how they land throughout the year.

Speaker Change: Got it and just for my follow up can you talk about your Samsung for the U S. National contact me market grass in terms of what seemed in your guidance for both peanuts in Ontario. Thanks.

Speaker Change: Yeah, we we won't give them for specific breakdowns between those two but the assumption on the fundamental basis of that is what I've alluded to now for the last month or so or two that we saw a notable uptick in our trajectory in late November.

Jason Mills: And we've commented also that our international business should accelerate in 2025. We have a high degree of confidence in that as well. Thanks, that's helpful.

Leigh: Just a clarification on what you just said, Jason. So, U.S. growth overall is pretty consistent, so it's really the OUS, where you're talking about the distributor timing, that's driving the mid-teens growth in the first half versus the second half at 20% or higher. Is that the message there?

Speaker Change: <unk> and that that has been consistent it didn't it wasn't a one time event that it you know and that it went up and it stated you know at a different level, which gives us the confidence not only in those projections, but also in the consistency throughout.

Jason Mills: That's correct. That's correct, and we have very good visibility into the timing. It's just how they land throughout the year.

Jason Mills: Got it, thanks. And just for my follow-up, can you talk about your assumption for the U.S. vascular thrombectomy market growth in terms of what's assumed in your guidance for both venous and arterial? Thanks. Yeah, we won't give specific breakdowns between those two, but the assumption, the fundamental basis of that is what I've alluded to now for the last month or so or two, that we saw a notable uptick in our trajectory in late November, and that has been consistent. It wasn't a one-time event.

Speaker Change: Throughout the year and and the reason for that is what we've been saying throughout most of 2023 witches. We had a lot of new customers. We saw a lot of them come through with the you know the end of the last.

Speaker Change: Very last days of November and December.

Speaker Change: December and that's continued and and I think that that momentum is continuing which is why you hear the confidence we have right now in this platform and in this business you add into it the the dialogues, we're having with hospital systems and Ah physicians.

Adam Elsesser: It went up, and it stayed at a different level, which gives us confidence, not only in those projections, but also in the consistency throughout the year. And the reason for that is what we've been saying throughout most of 2023, which is that we had a lot of new customers. We saw a lot of them come through at the end, the very last days of November and into December, and that's continued.

Speaker Change: You know which is just.

Speaker Change: Nothing we've ever been able to add before it gives us an awful lot of confidence that we're headed in the right direction.

Speaker Change: What are they just add to that a little bit and referencing again the U S. Thrombectomy growth of 27 to 30 per cent. We that includes V. T E arterial coronary and stroke and while we're really excited about counteraction.

Jason Mills: And I think that momentum is continuing, which is why you hear the confidence we have right now in this platform and in this business. And you add to that the conversations we're having with hospital systems and physicians, which is just nothing we've ever been able to have before. It gives us an awful lot of confidence that we're headed in the right direction. Lady, just to add to that a little bit, in referencing again the U.S. thrombectomy growth of 27 to 30 percent, that includes VTE, arterial, coronary, and stroke. And while we're really excited about cataracts in our stroke portfolios, with those, the growth rates implied for those thrombectomy franchises in the U.S. are lower than that range, VTE and arterial are expected to grow well above that range.

Speaker Change: Stroke proposals with those the growth rates implied for those thrombectomy franchises in the U S are lower than that range B T. E. An arterial are expected to grow well above that range part of that strong growth is market growth, which is healthy and.

Speaker Change: Market growth is best observed in arrears, I think but it's still healthy growth and in addition to that we expect of course to add to our share throughout the year.

Speaker Change: Thanks for calling next we'll go next to Bill.

Speaker Change: Ken Accordingly.

Bill: [noise] take care. Thanks, good evening and thanks for taking my question just just some clarity here so.

Jason Mills: Part of that strong growth is market growth, which is healthy. Again, market growth is best observed in arrears, I think, but it's still healthy growth. And in addition to that, we expect, of course, to add to our share throughout the year. Hey, Gary.

Bill: At the U S or I'm back to me you know you lunched slash starting early last year you lodged bold soon.

Bill: Soon thereafter, so as we go into the first half of the year, it's actually pretty easy comps as you keep the growth going.

William Plovanic: Thanks. Good evening, and thanks for taking my question. Just some clarification here. So as we look at the U.S. thrombectomy market, you launched flash starting early last year, and you launched bolt soon thereafter. So as we go into the first half of the year, it's actually pretty easy comps as you keep the growth going. It sounds like you're going to keep the growth going.

Bill: Sounds like you know you're going to keep the girls growing and then in the back half of 24 at least in the U S. It's it's the sales force changes they really kind of help that grows continue in terms of the market access and all the work you've done on that it might it might thinking about that correctly and then I have a follow up.

William Plovanic: And then in the back half at 24, at least in the U.S., it's the sales force changes that really kind of help that growth continue in terms of market access and all the work you've done on that. Am I thinking about that correctly? Then I have a follow-up. Yeah, hey, Bill, it's Jason.

Bill: Yeah, Hey, Bill, it's Jason all start and maybe item can chime in I.

Jason Mills: We had a really strong first quarter last year with flash, especially early on with our existing customers and we actually I had quite a bit of success with new customers early and not launch as well of course that continued so I don't know if there are any particular comps to point out that.

Jason Mills: I'll start and maybe Adam can chime in. We had a really strong first quarter last year with flash, especially early on with our existing customers. And we actually had quite a bit of success with new customers early in that launch as well, of course, that continued. So I don't know if there are any particular comps to point out that, you know, one quarter outweighing another.

Jason Mills: One quarter outweighing, another and that's why we have a pretty.

Jason Mills: Good confidence in the consistency with which those grow and the other thing I would point out is launching lightning flashed 2.0, well actually a full launch later this quarter really will impact things until you get into the second quarter and the other products.

Jason Mills: And that's why we have pretty good confidence in the consistency with which those grow. The other thing I would point out is launching lightning flash 2.0, likely a full launch later this quarter, really won't impact things until you get into the second quarter. And the other product launches, we're not factoring in too much through the year, just to sort of be conservative on that as well. Okay, thanks. And then on just Thunderbolt, I think, you know, some comments you made earlier in the year, is that now pushing into 2026 in terms of contributing to the US thrombectomy business? And thanks for taking my question. Yeah, Bill, it's a great question. You know, obviously, I'm going to be careful to not give any kind of specificity on a trial that's still ongoing. I think I learned my lesson the last time, so I'm going to resist.

Jason Mills: Launches were not factoring in too much through the year, just to sort of be conservative on that as well.

Speaker Change: Okay. Thanks, and then on just Thunderbolt. They think some comments you made I think earlier in the year.

Jason Mills: Is that now pushing into 2026 in terms of contributing to the U S for him back to my business and thanks for taking my questions.

Speaker Change: Yeah, they'll it's a great question, you know I I I.

Speaker Change: Hinsley I I'm going to be careful to you know give any kind of specificity on a trial that still ongoing I I think I learned my lesson last time, so I'm going to.

Speaker Change: Resist the trial is going well, we're enrolling Ah well the cases are going well.

Adam Elsesser: The trial is going well. We're enrolling well. The cases are going well. We said during that time when we were resetting expectations around the timing of Thunderbolt that we had not put in our number for 24 or 25, any revenue from Thunderbolt. And so that was what we said then. And that's still true.

Speaker Change: We said during that time, when we were resetting expectations around the timing of Thunderbolt that we have not put in our number for 24 or 25 any thunderbolt revenue.

Speaker Change: So that's that was what we said then that's still true whether or not it comes or not you know, we'll we'll deal with that at the time, but we're not counting on Thunderbolt revenue until twenty-six anyway, and I said that you know over a year ago or whenever that last was so that states consistent so.

Adam Elsesser: Whether or not it comes or not, you know, we'll deal with that at the time, but we're not counting on Thunderbolt revenue until 26 anyway, and I said that over a year ago or whenever that last was. So that stayed consistent. So this is the growth that we're talking about in CAVT, you know, with Flash and Bolt and the new products going forward, and obviously, our stroke growth, which was, you know, if I want to, it was significant in the fourth quarter. We continue to take share. A lot of that is really just the extraordinary success, and continued success, of REDD-72 with Sendit, which is, as I said, just setting the standard. That is the catheter of choice now.

Speaker Change: This is the growth that we're talking about is in theory T is on you know with flash and bolt and the new products going forward and obviously, our shrimp gross which was you know if I Wanna you know it's significant in the fourth quarter. We continued to take chair a lot of that is really just on the.

Speaker Change: The extraordinary success continued success of Red 72 would send it which is as I said just sit in the standard that that is the catheter choice now we've gained more and more sure and I think it's setting the table for Thunderbolt, because again, you need that cat that her first and then you can use thunderbolt afterwards.

Adam Elsesser: We've gained more and more market share, and I think it's setting the table for Thunderbolt because, again, you need that catheter first, and then you can use Thunderbolt afterwards. So, again, we remain very optimistic about the sort of one-two punch there with those two products. In a point of clarification on international business, if I could, is, are you going to discontinue selling some products in some countries in the first half of this year? Is that some of the delays and kind of the downdraft in the U.S.?

Speaker Change: Again, we remain very optimistic about the sort of one two punch there with those two products.

Speaker Change: Hanging up and a point of clarification on their national it's like that is are you going to discontinue selling some products in some countries in the first half of this year is that with some of the delays and kind of the the downdraft. You know you I said, thanks for taking my questions.

Speaker Change: What we said was that.

Speaker Change: In our embolization and access business, there are certain countries, where reimbursement pricing isn't commiserate with sort of the value of the product and we're not it's not a profitable business. So we are using this opportunity Ah if you will with the success that we've having where.

Adam Elsesser: Thanks for taking my questions. What we said was that in our embolization and access business, there are certain countries where reimbursement pricing just isn't commensurate with sort of the value of the product, and we're not; it's not a profitable business. So we are using this opportunity, if you will, with the success that we're having where we don't need to do that, and they can use products that are more consistent with what they want to pay for. And so, yes, the answer is there are certain areas and countries that that is true.

Speaker Change: We don't need to do that and they can use products that are more commiserate with what they want to pay for it.

Speaker Change: And so yeah. The answer is there are certain areas and countries that that is true. So we were going to focus on profitability in those markets.

Adam Elsesser: So we are going to focus on profitability in those markets. And we'll take our next question from Robbie Marcus at J.P. Morgan. Oh, great. Thanks for taking the time to answer the question. I want to ask, and I don't want to belittle 29% growth at all because it's a great growth rate, but this is the first time you've missed street numbers since the IPO. And I would say at our conference in January, you didn't comment on the quarter, but you did sound pretty robust. So what happened during the quarter that you ended up missing the midpoint of your guidance range and the sell side numbers?

Robbing Marcus: We'll take our next question from robbing Marcus J P. Morgan.

Speaker Change: Oh, great. Thanks for taking my questions.

Marcus: I wanted to ask and you know I don't want to belittle 29 per cent growth at all because it's a great growth rate, but this is the first time, you've missed street numbers since the I P O and I would say it you know at our conference in January.

Speaker Change: Didn't comment on the corner, but you did sound pretty robust so.

Marcus: What happened during the quarter at that you ended up missing you know at the mid point of your guidance range in the south side numbers.

Robbie Marcus: Yes, what you just said is true, but our Q4 revenue number was within our guidance but obviously fell just shy of the consensus number. However, what led to my excitement at your conference, and what's led to my excitement every single day since then, is the very fact that, and I said it again today, we saw a notable uptick in our trajectory in late November, and that's continued since then, which gives us the visibility, Robbie, and the confidence to guide our U.S. thrombectomy business to see a 27% to 30% growth in the U.S That's what I don't like about it.

Speaker Change: Yes, what you just said is true, but our you know our queue for revenue number it was within our guidance, but obviously fell just shy of the consensus number.

Speaker Change: However.

Speaker Change: Led to my excitement at your conference with led to my excitement you know every single day. Since then in the now is.

Speaker Change: You know sort of the fact that.

Speaker Change: And I said it again today, we saw a notable uptick in our trajectory in late November.

Speaker Change: And that has continued since then.

Speaker Change: [noise] gives us the visibility Robbie and the confidence to guide our youth thrombectomy business to see a 27% to 30 per cent growth in the U S. This year.

Speaker Change: That's what's I'd be like about that that gives us an extraordinary amount of confidence about 2024.

Adam Elsesser: That gives us an extraordinary amount of confidence about 2024 and beyond with the success of this. And we were waiting for this moment. All these new accounts were coming in. And we saw that sort of moment happen. So what's it not to be like?

Speaker Change: And beyond with the the except you know the success of this and we were waiting for this moment you know all these new accounts were coming they were you know and we saw that sort of moment happened. So what's not to be like and yes, I acknowledge without a doubt that there's a couple of million dollars short from the <unk>.

Adam Elsesser: And yes, I acknowledge without a doubt that there's a couple of million dollars short of the consensus still within our guide. But I will assure you our entire team here is totally focused on 2024 and succeeding with this CAVT platform. Great and maybe to follow up on a question from before about cadence. You know, the U.S., he said, should be within the guidance range pretty much throughout the year. OUS, lower at the beginning, higher at the end due to stocking. How do we think about the amount of stocks that were in the different quarters?

Speaker Change: <unk> still within our guide, but I will assure you our entire team here is.

Speaker Change: Totally focused on 2024.

Speaker Change: And succeeding.

Speaker Change: With the Capt platform.

Speaker Change: Great and maybe a follow up on a question from before about cadence.

Speaker Change: You know the U S. You said should be within the guidance range pretty much throughout the year, Oh U S lower at the beginning hi area and due to stocking.

Speaker Change: How do we think about the amount of stocking that we're in a different quarters because when we just look from the outside we see much more difficult comps in the back part of the year versus the first in higher dollar values. So how do we think about what the amount of stocking is so we can get a sense of underlying volume.

Robbie Marcus: Because when we just look from the outside, we see much more difficult comps in the back part of the year versus the first and higher dollar values. So how do we think about what the amount of stocking is so we can get a sense of underlying volume? Thanks. Yeah, it's a great question. Let me just make sure our terminology is sort of right, if you will. We don't really do stockings, you know, as that word is sort of sometimes considered and used. What we're talking about in most of these international markets, not all because we're direct in parts of Europe and so on, but it's really distributor orders, and distributors tend to order them slightly differently.

Speaker Change: Yeah. That's a great question, let me just make sure our terminology is sort of right. If you will we don't really do stocking you know as that word is sort of sometimes considered a news what we're talking about in most of these international markets not all cause we're directing parts of Europe, and so on but.

Speaker Change: Israeli distributor orders distributors tend to order.

Speaker Change: They all are slightly different you know some have different ordering patterns. We've seen this now.

Adam Elsesser: You know, some have different ordering patterns. We've seen this now. They're not linear.

Speaker Change: They're not they're not linear you know they don't order every week. They order you know most of the time quarter by quarter, but sometimes even less than that and then they they didn't then go sell it we get those the order in notes forecasted orders from them, we don't give them numbers, we get those in advance and from those.

Adam Elsesser: You know, they don't order every week. They order, you know, most of the time, quarter by quarter, but sometimes even less than that. And then they then go sell it.

Adam Elsesser: We get those orders and those forecasted orders from them. We don't give them numbers. We get those in advance. And from those projected forecasted orders, we then put them into our number. On the thrombectomy side, all of those folks, you know, I should say the vast majority of those folks know that CABT is coming. So obviously, they're going to be careful and not order as much product when they know a better generation is coming because they don't want to be left with excess inventory.

Speaker Change: Projected forecasted.

Speaker Change: Orders, we then put it into our number.

Speaker Change: All on the thrombectomy side all of those folks you know I used to tell you. The vast majority of the folks know that's C. A b T is coming so obviously, they're gonna be careful and and not order as much product when they know better generation is coming cause they don't want to be left with excess.

Adam Elsesser: That's just obvious and common sense, so we're taking that into account and being thoughtful about it. The other part of it relates to the coil business, the embolization access business, and I've already sort of addressed that, that this is an opportunity now for us to focus that business in a way that allows us to retain our growth and profitability without really losing anything in the long, long run. So some of those are sort of, you know, dipping away or are negative, and we're just putting that into a lot of transparency, which again brings me back to our latest technology and the growth curve that we're having because not only are we going to continue to have that for a number of years, we think, in the U.S., but we think that will be replicated in international markets when those products get there. That's sort of a good thing.

Speaker Change: Sorry.

Speaker Change: Obvious and common sense, so, we're taking that into account and being thoughtful.

Speaker Change: Thoughtful about it the other part of it.

Speaker Change: Relates to the coal business, the embolization access business and I've already sort of address that that this is an opportunity now with us to focus that business.

Speaker Change: In a way that.

Speaker Change: Allows us to retain our growth and profitability.

Speaker Change: That really losing anything in a long long run. So some of those are sort of you know dipping away or are negative and we're just putting that into into you know a lot of transparency winter.

Speaker Change: Which again brings me back to you know the best measure is our latest technology and the growth curve that we're having because not only are we going to continue to have that for number of years. We think in the U S. We think that will be replicated in international markets. When those products get there. That's a good thing so we're getting the business.

Robbie Marcus: So we're getting the business ready to go in those international markets where we can have that kind of growth, too. Thanks. And Adam, if I could just sneak in the size of those discontinued country sales.

Speaker Change: Ready to go in those international markets, where we can have that kind of growth too.

Speaker Change: Thanks, and Adam if I could just sneak in the size of those discontinued country sales. Thanks.

Adam Elsesser: When you add it all up, it gets you to the numbers that we were alluding to. I don't think calling out each country, and the size feels right on a public call, those are great partners and great countries, and I think we can get to the same number without calling them out country by country, but I appreciate the question. Thanks a lot.

Speaker Change: Yeah.

Adam Elsesser: When you add it all up you know it gets you to the numbers that we were alluding to I don't think by calling out each country is you know and the size feels right on a public call. You know those are great partners in great countries, and and I I I think we can get to the same number without calling in a country by country, but I appreciate.

Adam Elsesser: The question.

Robbie Marcus: Thanks. Thanks, Robbie. We'll move next to penal tickering at Deutsche Bank. Hey, good afternoon.

Speaker Change: Thanks, a lot thanks.

Speaker Change: Thanks take care of them.

Speaker Change: Almost next to Pinochet Green at Deutsche Bank.

Speaker Change: Hey, all good afternoons.

Penal Tickering: One quick clarification. Just looking at the comments from sort of 3Q of at least 20% growth for 2024 and then guidance today, is the only difference between your commentary previously and where we are today just slower international growth because you're focused on profitability? Or is there something else?

Speaker Change: Clarification Ah just looking at the comments are sort of three Q of at least 20% growth of 2024, and then guidance today is the only difference between the commentary previously and where we are today is just slower congressional growth because you're focused on profitability or is there anything else.

Jason Mills: Yeah, I think you've got it. That question implies really focusing on the 27 to 30 percent growth in U.S. thrombectomy, as well as taking that a step further with the entire portfolio of neuroaccess, embolization, et cetera, at 22 to 25 percent growth. And yes, the discipline we've talked about here with respect to certain international markets and timing is something we've been working on now for a little while, and we've seen a little bit of in 2023. So we have pretty good visibility into this, but I think that is the difference that you've noted. Okay, great. And then can we talk about the sales force for a minute? How many sales guys have you hired?

Speaker Change: Yeah, I I think you've got it right.

Speaker Change: That question implies he really focusing on.

Speaker Change: Both the 27% to 30% growth in U S thrombectomy as well as taking that a step further with the entire portfolio of neuro access embolization et cetera at 22 to 25 per cent growth and yes. The discipline, we've talked about here with respect to certain international.

Speaker Change: Markets and timing.

Speaker Change: Is is something we've been working on now for a little while and we've seen a little bit of as well in 2023. So we have pretty good visibility into this but I think that is the the difference that you've noted.

Speaker Change: Great and then we're talking about the Salesforce for for for a minute. How many sales guys, who get hired was a cadence of the hiring throughout the last 12 months.

Penal Tickering: What was the cadence of that hiring throughout the last 12 months? Where is the sales force for these new reps ramping up versus the demand? And do you have the right sales force today in order to meet your 24 guidance, or do you need to hire more? And then last question, are you seeing any churn of seasoned salespeople because of the new ads, or is it looking pretty good? I will try to write them all down.

Speaker Change: Whereas a sales force was new reps ramping up versus the demand and do you have the right salesforce today in order to meet your twenty-four guidance or do you need to hire more and our last question are you seeing any churn of seasons salesforce, because the new ads or is it looking pretty good.

Speaker Change: Yeah, there was I I tried to write them all down there's a long list of questions. So let me if I Miss one of the specific ones. Please.

Adam Elsesser: There's a long list of questions, so let me know if I miss one of the specific ones; please re-ask it. As I said in the prepared remarks, most but not all of the hiring is done; the majority of it is. Now we're focused on getting them all trained and operating. I will tell you from years of doing this.

Speaker Change: <unk>.

Speaker Change: As I said in the prepared remarks, most but not all of the hiring is done the majority of it is now we're focused on getting them all trained and operated I will tell you.

Speaker Change: From <unk>.

Speaker Change: Years of doing this this was the most seamless.

Adam Elsesser: This was the most seamless as it related to, you know, moving around territories, bringing in new folks than any other expansion we've had. And that's in large part because our team, I think, very maturely and under, you know, sort of, you know, as professionals, understood that they would actually benefit more in the long run as will our patients by having the ability to focus on fewer accounts. We had a lot to do. We have very large territories, much larger than our competitors, which is also why we don't give out our Salesforce numbers.

Speaker Change: As it related to you know moving around territory is bringing in new folks than any other expansion, we've had and that's in large part because our team I think very materially in under you know sort of a professional understood that they will actually benefit more.

Speaker Change: More in the long run.

Speaker Change: As will our patients by having the ability of focus on less accounts, we had a lot to do we have a very large territory is much larger than our competitors, which is also why we don't give out our sales force numbers.

Adam Elsesser: And that has been part of our advantage. It stays that way, but with all of the work ahead and these two big launches and the growth ahead, we just needed more people. You know, we probably should have done it a day or two earlier. Had that happened, it would have turned out differently.

Speaker Change: And that has been part of our advantage.

Speaker Change: That way, but with all of the work ahead and these two big launches in the growth ahead, we just needed more people, we probably should have done it.

Speaker Change: A day or two earlier, you know had that happened you know.

Speaker Change: Would have turned out differently.

Speaker Change: But it it's it's gone really really well and it's been a sort of Ah Ah Ah remarkable interact sort of integration. The other thing and part of the reason for that is we have attracted the sort of most talented most seasoned sales reps from other.

Adam Elsesser: But it's gone really, really well, and it's been a sort of remarkable interaction, sort of integration. The other thing, and part of the reason for that, is that we have attracted the sort of most talented, most seasoned sales reps from other peripheral vascular companies that we've ever attracted. And I think part of that is just, you know, the success of the CAVT products and what they know and hear so that the professionalism, the ability to move in and pick up quickly has been pretty remarkable. So it's gone well. You know, it obviously takes some effort to train them and get them started and so on.

Speaker Change: Other peripheral vascular companies that we've ever attracted and I think part of that is just you know on the success of of the C V T products and what they know and here so that the professionalism the ability to move in and pick up quickly.

Speaker Change: It's been pretty remarkable so.

Speaker Change: It's gone well, obviously takes some effort to train them and get them started and so on.

Adam Elsesser: You know, we've had training classes and all that, but in the long run, I think it's been one of the easiest things. As it relates to, you know, our current projected growth, this is the team that will get us there. Obviously, as that continues to go and the market access projects that we're working on bear fruit, we might need to, you know, evolve that as well. But for now, through this year, I think we're in really good shape. Great. Thanks so much.

Speaker Change: [noise] training classes, and all that but in the long run I think it's been one of the easiest things as it relates to you know our current projected growth. This is this is the team that will get US there obviously as that continues to go in the market access projects that we're working on bear fruit.

Speaker Change: We might need to you know about that as well, but for now through this year I think we're in really good shape.

Speaker Change: Thanks, so much thank you.

Penal Tickering: Thank you. We'll take our next question from Matthew O'Brien at Piper Sandler. Hi, this is Samantha on format.

Speaker Change: We'll take our next question from Matthew O'brien at Piper Sandler.

Samantha: Oh this is Samantha.

Samantha: Thank you for taking our question. I guess first, I would like to touch on go back and touch on guidance a bit. So I guess the lower end of the revenue guidance is 16%. What does that scenario consider or bacon compared to the top end of the revenue guidance? Yeah, I'll start and then Adam can join in.

Matthew O'brien: Thank you for taking a question I guess, the first thing I'd like to add.

Samantha: <unk> tied into that can I get the lower end with a retinue by 16%.

Samantha: What does that scenario.

Speaker Change: Compared to.

Speaker Change: At the top end of the range.

Jason Mills: Obviously, we have a range for U.S. thrombectomy where there's a low end, and a range for our U.S. business, which would contemplate our expectations for what U.S. embolization and access do that also has a low end, 27% and 22% respectively. And, you know, it's probably hard on a call where we have finite time to go through every detail on what drives the low or the higher end or above of each one of those numbers. But in every event, it is, you know, market growth. It is, you know, things like that internationally. I think we have pretty good visibility, but, of course, you know, you just let the year play out. So I don't think there's anything demonstrable to point out between the low and upper end. It's just, you know, execution at the end of the day. Great! Thank you so much.

Speaker Change: Yeah, I'll start and then Adam can joy and obviously, we have a range for U S thrombectomy, where there's a low end and arrange for U S business, which would contemplate our expectation for what U S. Embolization had access to that also has a low and 27% in 2002 per cent respectively.

Adam Elsesser: And you know, it's probably hard on a call or or we have a finite time to go through every detail on what drives the lower the higher end or above of of each one of those numbers, but in in every event. It is you know market growth. It is you know things like that in.

Adam Elsesser: Nationally I think we are pretty good visibility, but of course, you know you you got the year play out so I I don't think there's anything demonstrable to point out.

Adam Elsesser: Between the lower or upper and it's just you know execution at the end of the day.

Speaker Change: Great. Thank you so much and then.

Maggie Ewan: And then, you know, one thing, I guess, one of the bright spots for us this quarter was that EBIT was higher than we were expecting. Where do you kind of see margins moving in the long term? I think, yeah, we're very pleased with our profitability this year. It kind of demonstrates that we can scale and continue to invest at the same time. In our gross margin, we're continuing to see favorable product mix, so we are on track to our longer-term 70-plus percent margin target, and I'm pretty sure that will pull through to the bottom line.

Speaker Change: Wednesday.

Speaker Change: One of the first that process corner.

Speaker Change: Even with higher.

Speaker Change: Where do you tend to eat.

Speaker Change: Martin moving in a long time.

Speaker Change: I think yeah, we are very pleased with our profitability. This year I mean, it kinda demonstrated that we can scale and continue to invest at the same time I outgrows migraine continuing theme favorable product makes so we are on track to our longer term 70 per cent Michael.

Speaker Change: Tiger and I'm pretty sure that will fit into that bottom line.

Michael Stephen Matson: And we'll continue to invest, but I think we are setting up for very good infrastructure to scale. Thank you. We'll take our next question from Michael Sarkone, Jeff. Hey, good afternoon, and thanks for taking my questions. So just for the first one, do you think you can give us an update on the status of, you know, the VAC processes that you're working through with flash and bolt?

Speaker Change: We will conclude your in that that I think we are setting up our very good infrastructure scale.

Speaker Change: Thank you.

Speaker Change: Thank you thanks.

Michael: We'll take our next question, Sir Michael Sighed Jefferies.

Michael Jefferies: Hey, good afternoon, and thanks for taking my question.

Michael: Well.

Michael Jefferies: So it was for the first one do you think you can give us an update on the status of you know the vac processes that you are working through.

Michael Stephen Matson: We'd just love to get an update there. Yeah. It's a great question.

Michael Jefferies: With flash and bolt would just love to get.

Michael Jefferies: Yeah. It's a great question. So obviously the uptake that we saw starting in late November and continuing.

Adam Elsesser: So, obviously, the uptick that we saw starting in late November and continuing assumes that a lot more of those customers have come on board and started using the products. So, we're just like we said we were in the third quarter, i.e., we're getting through a lot of them. We still have some to go. We're not, obviously, in every account in the country.

Michael Jefferies: Assumes that more a lot more of those customers that come onboard and started using the products. So.

Michael Jefferies: We're we're just like we said we were on the third quarter Ie, we're getting through a lot of those we still have someone to go you know we're not obviously in every account in in the country and we have more coming but Ah being bullis of those came in late November and December which is what we had.

Adam Elsesser: And we have more coming. But a big bolus of those came, you know, in late November and into December, which is what we had hoped for. And now we're seeing the benefit of that. And as we continue, the focus now is, yes, on continuing to get the remainder, but really focusing on moving to getting the physicians up and running and using the product on a regular basis. So, it's a really good phase.

Michael Jefferies: Hope for and now we're seeing the benefit of that and as we continue.

Michael Jefferies: The focus now is yes on continuing getting the remainder, but really focuses on moving to getting the physicians up and running and using the product on a regular basis. So it's a really good phase.

Adam Elsesser: You know, some of that administrative part is done and de-risked, and now we're just enjoying the early text cases. You know, we get texts from reps in their early cases about how they're all going and pictures of clouds and excitement and so on. So, we're moving into that phase, which is a lot more fun than the heavy burden of the administrative load there. That's helpful, thanks Adam. And then, last one for me, could you give us any more color on, you know, the different bells and whistles you've added to Flash 2.0?

Michael Jefferies: That [laughter] administrative part is done and the risks and now we're just enjoying the you know the early tax cases, you know we get texts from wrapped in the early cases, and how they're all going in pictures of cloud and and excitement and so on so so we're moving into that phase.

Michael Jefferies: Which is a lot more fun than.

Michael Jefferies: The heavy burden of the administrative load there.

Speaker Change: That's helpful. Thanks, Adam and then just last one for me could you give us any more color on you know the the different bells and whistles you've added to the flash to Plano I think he said.

Adam Elsesser: I think you said, you know, it optimizes the advantages of CAVT, but anything that could help us crystallize that more? Yeah, I think you would frame it the following way: We get more clots out faster with even less blood loss than before.

Speaker Change: The advantages of C. A V T, but anything that could help us crystallize that more yeah, I think he would frame it the following way, we get more cloud out faster, even less blood loss and before.

Adam Elsesser: Thank you. Thank you. Thank you. All right, thanks, Adam. And next, we'll move to Richard Neuwirter at Truist Security.

Speaker Change: Alright. Thanks. Thanks.

Speaker Change: Thanks.

Speaker Change: An excellent move to Richard New Winter at Trista Securities.

Richard Neuwirter: Hi guys, thanks for taking the question. Maybe just on the guidance and the philosophy there, Adam, Jason, the 2024 guide, particularly with respect to the U.S., you're kind of very accountable on the metrics there, the revenue breakdown. Thank you for that. I guess what I'd like to know, going off Robbie's question earlier, what your philosophy is on guidance this year, last year, and in the fourth quarter? You came close, but it wasn't necessarily upside relative to the guide or the consensus. So how should we think about your approach to this year? And I'm particularly talking about the U.S. thrombectomy numbers because that's where I think you're gonna be graded the hardest. Is this aspirational? Is this a floor? What can you give us in terms of how much cushion is built in and, you know, how you set yourself up for better expectations, management, and execution?

Speaker Change: Hi, guys. Thanks for taking my question, maybe just on the guidance and and the philosophy. There I'm, Jason you know the the 2024 guy, particularly with respect to the U S. You know you're kinda very accountable on on the metrics there the revenue breakdown. Thank you for that I guess.

Speaker Change: What I'd like to know you know growing up Rob. Your question earlier, you know what philosophically is your approach to guidance. This year last year and then the fourth quarter. You know you came close but you know it wasn't necessarily upside relatives.

Speaker Change: To the guide or the consensus so how should we think about your approach to this year and I'm, particularly talking about the U S.

Speaker Change: Vacuuming numbers, because that's where I think you're gonna be graded the hardest.

Speaker Change: Is this aspirational is this is this a a for you know what what can you or can you give us.

Speaker Change: So how much question just built in and and you know how you set you up for a bedroom expectations management and execution. Thank you [noise].

Adam Elsesser: Thank you. So, I would comment that we're running out of time on your pun. The fact that our guide is aspirational and that's the products we sell, I don't think you intended that pun, but I appreciate the effort if you did. The fact is this, we learned a lot. Last year was a great year for us.

Speaker Change: So I would comment, but we're running out of time on your pun.

Speaker Change: That are guided aspirational room, that's the products, we sell I don't think you into ended that fun, but I appreciate.

Speaker Change: Right the effort.

Speaker Change: If you did.

Speaker Change: But the fact is this we learned a lot last year was a great year for US we learned a lot we have not had a year that had the scale of growth and excitement around our product and our company's history and.

Adam Elsesser: We learned a lot. We have not had a year that had the scale of growth and excitement around a product in our company's history. And so, it was really hard to figure that out.

Speaker Change: And so.

Adam Elsesser: You know, how do we get the kind of information that can give proper guidance and so on? And we came really close, and I'm pretty proud of that, given the scale of growth and the transformational aspect of last year. Obviously, it's better to hit the number and move on, but in the long run, it is not as important as having the foundation to continue to grow from year over year. So we've learned a lot, and I think we're going to be more careful and thoughtful about it. We understand these products better. We understand their rhythm, their level of interest.

Speaker Change: It was really hard to figure that out you know how do we get the kind of information that can give proper.

Speaker Change: Proper guidance and so on and we came really close and I'm pretty proud of that given the scale of growth in the transformational aspect of last year.

Speaker Change: Obviously Saturday at the number of move on but in the long run it is not as important as having the foundation.

Speaker Change: To continue to grow from year over year. So we've learned a lot and I think we're going to be more careful.

Speaker Change: Thoughtful about it we understand these products better we understand the rhythm of them the level of interest. We're further into it. So we have a lot more information. So our philosophy is to not guide aspirational Lee.

Adam Elsesser: We're further into it, so we have a lot more information. So our philosophy is to not guide aspirationally, to use your term, but to really guide with the kind of clarity and information that we've done in the past. And again, I think you'll see that in 2024. We'll go next to David Rescott at Baird.

Speaker Change: To use your term, but to really guide with the kind of you know.

Speaker Change: Clarity and information that we've done in the past and again I I think I think you'll see that in 2024.

David Lewis: We'll go next to David mascot at Bird.

David Lewis: Hey guys, thanks for taking the questions. Two questions, I'll ask them both up front. First, I heard you call out Flash 2.0.

David Masciot: Hey, guys. Thanks for taking the questions.

David Lewis: Two questions I'll ask them, both upfront Uhm first I heard you call out Slash 2.0, I think that'd be specific when you talk a little bit about expanding to more areas in the body. So just wondering specifically what some of those those comments kind of mean and then you should be thinking about maybe a bowl to Plano.

David Lewis: I think maybe specifically you talked a little bit about expanding to more areas in the body. So, just wondering specifically what some of those comments kind of mean, and then should we think about maybe a Bolt 2.0? And then my second question, just on international, sounds like obviously 2024 is the big investment year. I think I heard you call out seeing that accelerate in 2025 to a double-digit range. So, just wondering if that growth outlook into 2025 for international is something that would be maybe more creative or just maybe more supportive of the total top-line growth of the company. Thank you. Let me start and then Jason can sort of touch on the question around 25 and so on.

David Lewis: My second question just on international sounds like obviously 2024 is is the big investment you know I think I heard you call out you know as you can that accelerate in 2025 to to the double digit range. Just wondering if if that you know grow without looking at a 2025 four.

David Lewis: International is something that would be maybe a creative or just maybe more supportive of the total top line growth above the company. Thank you.

Speaker Change: Let me, let me start and then Jason can sort of touch on on the the question around 25 and so on.

Adam Elsesser: The products. I'm not going to be more specific than I have been about where we think these products are going to go. What I can tell you is the following. I've had the opportunity to hear about them, to see them, to talk to the folks who are designing them and playing with them. I'm really excited about it.

David Lewis: The products I'm not going to be more specific Ah then I have been about where we think.

David Lewis: What these products are gonna do what.

Adam Elsesser: I can tell you is the following.

David Lewis: I've had the opportunity to hear about them to see him to to talk to the folks who are her designing them and playing with them.

David Lewis: I'm really excited about it.

Adam Elsesser: The goal, again, is simple. We want to be able to go after every kind of clot in as much of the body as we can go; these new products do that. They expand that opportunity to get different types of clots in different parts of the body.

Adam Elsesser: Goal again is simple we wanna be able.

David Lewis: To go after every kind of cloth and as much of the body as we can go.

David Lewis: These new products do that they expand that opportunity to get different types of clot in different parts of the body and you know sometimes both sometimes just one of those.

Adam Elsesser: And, you know, sometimes both, sometimes just one of those. That's the goal. And I can't wait. I think we now have understood this. This platform of CABT has totally changed how we're thinking about this, what we think we can go after, and how we can continue to improve the algorithms.

Adam Elsesser: That's the goal.

Adam Elsesser: And I I can't wait I think we now have understood. This this platform of Capt has totally changed how we're thinking about this what we think we can go after how we can.

Adam Elsesser: Continue to improve the algorithms and so the goal here is to be able to go after clot in any part of the body with a lot of confidence that we can get it out and that's what those products bring us even closer to when those are done we're not going to be done we're gonna keep adding will keep innovating, we'll keep adding 3.04 0.0.

Adam Elsesser: And so the goal here is to be able to go after clots in any part of the body with a lot of confidence that we can get them out. And that's what those products bring us even closer to. But when those are done, we're not going to be done. We're going to keep adding. We'll keep innovating. We'll keep adding 3.0, 4.0, because that's how great technology works.

David Lewis: Because that's how great technology works and I think we're setup for a pretty nice run here.

Jason Mills: And I think we're set up for a pretty nice run here. David, thanks for your second question. In my prepared remarks, I talked about the international business, and I mentioned 2025, and you're right. We did say in those prepared remarks that we thought that international revenue could accelerate into the double digits in 2025.

Jason Mills: Yeah, David Thanks for your second question in my prepared remarks, I talked about the international business and I mentioned in 2025, and you're right. We did say in those prepared remarks that we thought the international revenue could accelerate into the double digits in 2025.

Speaker Change: Five and then the next comment that we made was about our C V T products and sustaining strong growth because the reality is even hitting our guidance this year and use thrombectomy and doing really well.

Jason Mills: And then the next comment that we made was about our CEVT products and sustaining strong growth because the reality is even hitting our guidance this year for U.S. thrombectomy and doing really well, the market penetration rates we have, the number of patients we will have helped are still really, really low. We still have a long ways to go. So that comment that I made right on the heels of making the comment about international was intended to talk about the fact that this is, as Adam has mentioned several times in the past, growth that can extend over the next few years, a number of years. And so I'm not going to quantify what we think 2025 looks like yet.

Jason Mills: Mark the market penetration rates, we have the number of patients we will have.

Speaker Change: Helped is still really really low penetration levels, we will have a long ways to go so that comment that I made right on the heels of making that comment about international was intended to talk about the fact that as as as Adam is mentioned several times in the past growth that can.

Jason Mills: Extend over the next two in years a number of years.

Jason Mills: And so I'm not going to quantify what we think 2025 looks like yet we're pretty optimistic about 2024 and beyond.

Michael Stephen Matson: We're pretty optimistic about 2024 and beyond. All right, thank you. We'll go next to Mike Matson at Needham & Company. Yeah, thanks for fitting me in. I guess, you know, first with the efforts outside the U.S. to get these CAVT products on the market, I just want to understand, I know it probably varies by country and whatnot, but it sounds like, generally, you feel like there's the need to get some reimbursement in place. Or is it just that there is reimbursement there, and it's just not enough to cover the cost of the product?

Michael Stephen Matson: Alright, thank you.

Michael Stephen Matson: We'll go next to make mattson at Needham and company.

Michael Stephen Matson: Yeah. Thank thanks for helping me and I guess first with the the efforts outside the U S to get the C V T products on the market I just want to understand I know it probably varies by a country and whatnot, but it sounds like generally you feel like there is the need to get some <unk>.

Michael Stephen Matson: Reimbursement in place as it is.

Michael Stephen Matson: Or is it just that there's reimbursement there and it's just not enough to cover the cost of the products.

Michael Stephen Matson: Yeah, Mike, that's a good question. You know, we're talking about big geographies, you know, many different countries in Europe that have different reimbursement schemes, country by country, same in Latin America and Asia Pacific. So each one is obviously very different.

Michael Stephen Matson: Yeah like that's a good question you know we're talking about large geography as you know many different countries in Europe that have different reimbursement schemes country by country.

Michael Stephen Matson: Latin America, and Asia Pacific. So each one is obviously very different they are gonna be cases in which reimbursement is there for the most basic you know sort of catheter in syringe type system, which is not inexpensive reimbursement you know and then more sophisticated stuff is.

Adam Elsesser: There are going to be cases in which reimbursement is there for the most basic, you know, sort of catheter and syringe type system, which is not an expensive reimbursement, you know, and then more sophisticated stuff is not yet reimbursed because they've never seen it. They don't know what it is, and we have to go through that effort. And then other cases, there's really no reimbursement yet for that procedure at all.

Adam Elsesser: Is not yet reimbursed because they've never seen it they don't know what it is and we have to go through that effort.

Adam Elsesser: And then other cases, there's really no reimbursement yet for that procedure at all so it's a little of each and obviously, we're focusing on some of the larger areas first.

Adam Elsesser: So it's a little of each, and obviously we're focusing on some of the larger areas first, and then we'll continue to do that effort. Not different just, you know, to give some, you know, some context to what we did in stroke many, many years ago. You know, stroke was not reimbursed at all, and ironically, it still isn't in certain countries, and we've been doing that work for the better part of, you know, almost 20 years now.

Adam Elsesser: And then we'll continue to do that effort.

Adam Elsesser: Not different just you know to give some but you know some context to what we didn't stroke. Many many years ago. You know stroke was not reimbursed at all and ironically, He's still is not in certain countries and we've been doing that work for the better part of almost 20 years now.

Adam Elsesser: So I think we know how to do it. It just takes time, and we want to do it right and make sure, because we don't need to rush this because we have the benefit now of growth, particularly in the U.S. Okay, got it. And then just as far as the distributor ordering forecast or patterns you're expecting in 2024, you know, I was wondering, you know, in the commentary around exiting certain markets and certain product categories due to lower pricing, is China a factor in either of those things, either distributor ordering patterns or the markets you're exiting? Because I know there has been some VBP over there in the neurovascular area.

Adam Elsesser: So I think we know how to do it. It just takes time and we want to do it right and make sure because we don't need to rush. This because we have the benefit now of of growth, particularly in the U S.

Adam Elsesser: Okay got it and then just as far as the the distributor ordering a forecast or patterns are expecting in 2024, you know I was wondering you know in the commentary around exiting certain markets and certain product categories due to lower pricing, China a factor in either of those things you know just you.

Adam Elsesser: Ordering patterns or the.

Adam Elsesser: Markets are actually because I know there has been some D. B P over there and the Bachelor area Yeah.

Michael Stephen Matson: Yeah, Mike, that's a really important question. I'm glad you asked it. I just want to maybe remind you and everyone else that we have three different buckets of revenue from China. We have license fees, royalties, and distribution. So that structure, as you know, sometimes created a funny quarter by quarter movement that we've talked about over the last couple of years in the past. But on a longer term basis, that same structure has provided us, I think, a lot of protection from some of the current climate in China.

Speaker Change: Yeah, but Mike that's a really important gretchen I'm glad you have to I just want to maybe remind you and everyone else that we have three.

Michael Stephen Matson: Different buckets of revenue from China, we have license fees royalties and distribution. So that structure is you know sometimes created a funny quarter by quarter movement that we've talked about over the last couple of years.

Michael Stephen Matson: Past, but on a longer term basis that same structure is provided I think a lot of protection.

Michael Stephen Matson: From some of the current climate in China. So we do a pretty good about it you know going forward, we ever really incredible partner in Genesis and.

Adam Elsesser: So we feel pretty good about it. You know, going forward, we have a really incredible partner in Genesis, and we believe that our products, particularly the CAVT platform, can ultimately have an important place in the Chinese market. We have a lot of work to do, but I think we're really set up for that, and we're pretty excited about it. Okay.

Adam Elsesser: And we believe.

Adam Elsesser: Bronx, particularly the C. B C. A b T platform and ultimately have an important place in the Chinese market. We got a lot of work to do but you know.

Adam Elsesser: I think we're really setup for that and we're pretty excited about it.

Speaker Change: Okay got it thank you.

Michael Stephen Matson: Thank you. Thank you. We'll take our final question today from Margaret Kayser at William Blair. Hey, everyone. This is McCaulay on for Margaret. I appreciate you squeezing me in here. Just to kind of put two questions into one.

Speaker Change: Thank you.

Speaker Change: We will take our final question today from Margaret Kayser at William Blair.

Speaker Change: Hi, everyone. This is my collar on for Margaret I. Appreciate you squeeze me in here just to kind of put two two questions into one I I know you mentioned, the 20 per cent growth and you're a stroke a large part of that obviously Sunday, but as we look towards 2024 do you expect.

McCaulay: I know you mentioned the 20% growth in US stroke. A large part of that obviously goes to send it, but as we look towards 2024, do you expect send it to be able to bridge that gap within Nero? Or, I guess, how should we think about the rollout in terms of adoption compared to flash and bolt, which, to your point, might have a longer tailwind?

McCaulay: Send it to be able to to bridge that gap within neuro or how.

McCaulay: How should we think about the roll out in terms of adoption compared.

McCaulay: To flash in both what's your point my <unk> might have a longer a tailwind diamond to throw in a second just any update in terms of Thunder a timeline on the on the trial on the Thunder trial.

Adam Elsesser: And then to throw in the second, just any update in terms of the thunder timeline on the trial, on the thunder trial. Yeah, so let me – I'll start with the last one. I sort of answered that question around the time of the Thunderbolt trial.

Adam Elsesser: Yeah. So let me start with the last one I I sort of answered that question around the Thunderbolt trial, it's going well enrollment continued we aren't counting any of that revenue until 2026. So we've got a ways off but the trial was going well stroke, what we said is <unk>.

Adam Elsesser: It's going well. Enrollment continues. We aren't counting any of that revenue until, you know, 2026. So we've got a ways off, but the trial is going well. Stroke, as we said, is greater than 20%, not 20%.

Adam Elsesser: Later than 20 per cent not 20 per cent that business is really strong and we don't yet have a 100 per cent of the market Ah and so we're gonna continue to go after.

Adam Elsesser: That business is really strong, and we don't yet have 100% of the market. And so we're going to continue to go after those physicians. Word of mouth is now really strong as people, more and more physicians, have used it.

Adam Elsesser: Those positions word of mouth is now really strong as people more and more physicians have used it and the platform to to get some face a clock, we're seeing more and more.

Adam Elsesser: And the platform to get the face of the clock, we're seeing more and more conversion to it. So, yeah, I think 2024 is going to be a good year for our stroke business, and we're going to continue to see some growth there. Obviously, that will continue and get even more when Thunderbolt comes. But in the meantime, it stands as an anticipation of Thunderbolt because, again, you've got to have the catheter there first; then you can use it. So the setup is really kind of perfect for us.

Adam Elsesser: Ah Ah conversion to it so yeah I think 20 2024 is going to be a good year for a stroke business and we're going to continue to see some growth there oddly.

Adam Elsesser: Obviously that will continue and and get even more when thunderbolt comes but in the meantime, it stands as in anticipation of Thunderbolt because again you gotta have the gaffer. Their first then you can use the undergrowth. So the setup is really kind of perfect for us.

Speaker Change: I appreciate it thanks for for a minute ago, yeah. Thanks, Thanks [noise].

Adam Elsesser: I appreciate it. Thanks for sending me in again. Yeah, thanks.

Speaker Change: And that does conclude the question and answer session I'll turn the conference back over 10 minutes Hamlin Harris.

Jee Hamlyn: And that does conclude the question and answer session. I'll turn the conference back over to Ms. Hamlyn Harris. Thank you, operator.

Hamlyn Harris: Thank you operate now Omaha.

Hamlyn Harris: Thank you all again for joining us today.

Hamlyn Harris: We look forward to update it on F X Coca Cola.

Speaker Change: And this concludes today's conference call. Thank you for your participation you may now disconnect.

Operator: On behalf of our management team, thank you all again for joining us today and for your interest in Penumbra. We look forward to updating you on our first call to call. And this concludes today's conference call. Thank you for your participation. You may now disconnect, www.globalonenessproject.org Transcription by ESO, translation by — Please wait.

Speaker Change: Please wait the conference will begin shortly.

Operator: Mmm.

Operator: Mmm.

Operator: Yeah.

Operator: Mhm.

Operator: Yeah.

Operator: Yeah.

Operator: Yeah.

Operator: Yeah.

Operator: Yeah.

Operator: Yeah.

Operator: Yeah.

Operator: Yeah.

Operator: Mhm.

Operator: Mhm.

Operator: Oh.

Operator: Uh-huh.

Operator: Mhm.

Operator: Yeah.

Operator: Oh.

Operator: Yeah.

Operator: The conference will begin shortly. Please wait. The conference will begin shortly. Please wait. The conference will begin shortly.

Operator: Yeah.

Operator: Mhm.

Operator: Mhm.

Operator: Yeah.

Operator: Yeah.

Operator: Uh-huh.