Q1 2024 AtriCure Inc Earnings Call

Okay.

Operator: Good afternoon, and welcome to AtriCure's first quarter 2024 earnings conference call. This call is being recorded for replay purposes, and at this time, all participants are in listen-only mode. We will be facilitating a question-and-answer session following prepared remarks from AtriCure's management team. I would now like to turn the call over to Marissa Bych from the Gilmartin Group for a few introductory comments.

Speaker Change: Good afternoon, and welcome to April curious with first quarter 2024 earnings Conference call.

Speaker Change: Call is being recorded for replay purposes and at this time all participants are in listen only mode.

Speaker Change: We will be facilitating a question and answer session. Following prepared remarks from each of curious management.

MRSA Place: Now I'd like to turn the call over to MRSA place from the.

MRSA Place: Gilmartin group for a few introductory comments.

Marissa Elizabeth Bych: Thank you. By now, you should have received a copy of the earnings press release. If you have not received a copy, please call 513-644-4484 to have one emailed to you.

MRSA Place: Thank you.

MRSA Place: By now you should have received a copy of the earnings press release.

MRSA Place: If you have not received a copy please call 5136444484, I can have one emailed to you.

Marissa Elizabeth Bych: Before we begin today, let me remind you that the company's remarks include forward-looking statements. Such statements are subject to numerous risks and uncertainties, many of which are beyond AtriCure's control, including risks and uncertainties described from time to time in AtriCure's SEC filings. These statements include, but are not limited to, financial expectations and guidance, expectations regarding the potential market opportunity for AtriCure's franchises and growth initiatives, future product approvals, clearances, reimbursement, and clinical trial outcomes.

MRSA Place: Before we begin today, let me remind you that the company's remarks include forward looking statements.

MRSA Place: Forward looking statements are subject to numerous risks and uncertainties many of which are beyond <unk> control, including risks and uncertainties described from time to time and age or cure that SEC filing.

MRSA Place: These statements include but are not limited to financial expectations and guidance.

Patients regarding the potential market opportunity for HRS franchises and growth initiatives future product approval clearance as reimbursement and clinical trial outcome.

Marissa Elizabeth Bych: AtriCure's results may differ materially from those projected. AtriCure undertakes no obligation to publicly update any forward-looking statements. Additionally, we refer to non-GAAP financial measures. Specifically, revenue reported on a constant currency basis, adjusted EBITDA, and adjusted loss per share. A reconciliation of these non-GAAP financial measures with the most directly comparable GAAP measures is included in our press release, which is available on our website. And with that, I would like to turn the call over to Mike Carroll, president and CEO.

MRSA Place: <unk> results may differ materially from those projected a trickier undertakes no obligation to publicly update any forward looking statement.

MRSA Place: Additionally, we refer to non-GAAP financial measures, specifically revenue reported on a constant currency basis, adjusted EBITA and adjusted loss per share.

MRSA Place: A reconciliation of these non-GAAP financial measures with the most directly comparable GAAP measures is included in our press release, which is available on our website.

MRSA Place: And with that I would like to turn the call over to Mike Carrel, President and CEO.

Michael H. Carrel: Thank you, Marissa. Good afternoon, everyone. And thank you for joining us today. I am pleased to report a strong start to 2024 as we expand our global impact on patients with atrial fibrillation and postoperative pain. In the first quarter, we achieved total revenue of $109 million, reflecting 16% growth from the first quarter of 2023, driven by steady demand and activity across our franchises and geographies. In addition, we improved gross margins and expanded profitability with a nearly 50% increase in adjusted EBITDA in the first quarter of 2024 compared to the first quarter of 2023.

Michael H. Carrel: Thank you Marissa and good afternoon, everyone and thank you for joining US today I'm pleased to report a strong start to 2024 as we expand our global impact on patients with atrial fibrillation in post operative pain in.

Michael H. Carrel: In the first quarter, we achieved total revenue of $109 million, reflecting 16% growth from the first quarter of 2023, driven by steady demand and activity across our franchises and geographies.

Michael H. Carrel: In addition, we improved gross margins and expanded profitability with a nearly 50% increase in adjusted EBITDA in the first quarter of 2024 compared to the first quarter of 2023.

As we continue efforts to grow adoption across our portfolio. We are reiterating expectations to generate full year 2020 for revenue of $459 million to $466 million, reflecting 15% to 17% year over year growth. We are also reaffirming our plans to deliver a full year adjusted EBITDA.

Michael H. Carrel: As we continue efforts to grow adoption across our portfolio, we are reiterating expectations to generate full-year 2024 revenue of $459 to $466 million, reflecting 15% to 17% year-over-year growth. We are also reaffirming our plans to deliver a full-year adjusted EBITDA of $26 to $29 million, with annual improvement thereafter.

Michael H. Carrel: 26% to $29 million with annual improvements thereafter.

Michael H. Carrel: We remain confident in our strategy to invest in innovation and growth while driving increasing profitability and cash flow generation. As I think about the future of AtriCure, our strong growth outlook is the result of many years of innovation, clinical investment, and market development initiatives. As you all know, AtriCure is the leader in the treatment of advanced atrial fibrillation, and we are number one in each of our multi-billion dollar markets. As we uphold this position, we do not take competition lightly.

Michael H. Carrel: We remain confident in our strategy to invest in innovation and growth, while driving increasing profitability and cash flow generation.

Michael H. Carrel: As I think about the future of <unk>, our strong growth outlook as a result of many years of innovation.

Michael H. Carrel: Clinical investments and market development initiatives.

Michael H. Carrel: As you all know <unk> is the leader in the treatment of advanced atrial fibrillation, and we're number one in each of our multibillion dollar markets.

Michael H. Carrel: As we uphold disposition, we do not take competition lightly.

Michael H. Carrel: We have long anticipated that our success, marked by consistent double-digit growth within vastly under-penetrated disease states, would invite new entrants into the market. In fact, we have intentionally executed a strategy that involves market expansion and development activities for over a decade in anticipation of some competition, which we are beginning to see today. We believe competition validates the immense opportunity still ahead for our business. And, of course.

Michael H. Carrel: We have long anticipated that our success.

Michael H. Carrel: By consistent double digit growth within vastly underpenetrated disease States we're in.

Michael H. Carrel: New entrants into the markets.

Michael H. Carrel: In fact, we are intentionally execute our strategy.

Michael H. Carrel: <unk> market expansion and development activities for over a decade and anticipation of some competition, which are which we are beginning to see today.

Michael H. Carrel: We believe competition validates the immense opportunity still ahead for our business.

Michael H. Carrel: We expect new market entrants to be able to generate business by entering our market because we know that physicians try new products. That said, we are confident in our long-term prospects because we know that competition creates greater therapy awareness and stimulates strong long-term market growth. For example, look at the TAVR and percutaneous appendage management markets. Over the past 15 years, new entrants have helped grow those markets and driven multi-billion dollar franchises. Our confidence is also founded in the exceptional quality and safety of our innovative products, which are further supported by compelling clinical outcomes.

Michael H. Carrel: And of course, we expect new market entrants to be able to generate business by entering our markets. We know that physicians try new products.

Michael H. Carrel: That said, we are confident in our long term prospects because we know the competition creates greater therapy awareness and stimulate strong long term market growth.

Michael H. Carrel: For example, look at tableau and percutaneous appendage management markets over the past 15 years, new entrants have helped grow those markets and drive multibillion dollar franchises.

Michael H. Carrel: Our confidence is also founded in the exceptional quality and safety of our innovative products products, which are further supported by compelling clinical outcomes.

Michael H. Carrel: We will continue to differentiate AtriCure from the field by investing in innovation, which you will see this year through our recent Cryosphere Plus launch and upcoming AtriCleflex mini launch, both of which we expect to be game-changing technology. And we will keep investing in market-expanding clinical evidence in support of our technology, such as the only stroke trial ever done for concomitant cardiac surgery in our LEAPS trial. Lastly, one of our greatest long-term differentiators is the deep knowledge and strength of our commercial and education team. We have over 400 field personnel globally.

Michael H. Carrel: We will continue to differentiate <unk> from the field by investing in innovation, which you will see this year through our recent craft beer plus launch and upcoming <unk> flex many launch both of which we expect to be game changing technologies.

Michael H. Carrel: And we will keep investing in market expanding clinical evidence in support of our technology, such as the only stroke trial ever done for concomitant cardiac surgery and our leaps trial.

Michael H. Carrel: Lastly, one of our greatest long term differentiators is the deep knowledge and strength of our commercial and education teams.

Michael H. Carrel: We have over 400 field personnel globally.

Michael H. Carrel: Building and Strengthening Relationships with Cardiac and Thoracic Surgeons and EPs. We will continue to invest across these differentiators in our business, innovation, clinical science, and field expertise to enable AtriCure to remain a market leader. Looking forward, we expect to stay several steps ahead of our peers in the market and development act, and market development and expansion. To date, our investments have culminated in a robust cadence of innovation and the launch of multiple growth drivers in our business.

Building and strengthening relationships with cardiac and thoracic surgeons and EPS.

Michael H. Carrel: We will continue to invest across these differentiators in our business.

Michael H. Carrel: Innovation clinical science and field expertise to enable <unk> to remain a market leader looking.

Michael H. Carrel: Looking forward, we expect to stay several steps ahead of our peers in the market and development and.

Michael H. Carrel: And market development and expansion.

Michael H. Carrel: To date, our investments have culminated in a robust cadence of innovation and the launch of multiple growth drivers of our business.

Michael H. Carrel: More recently, in our open ablation franchise, we have had tremendous success with our Encompass plant. The Encompass clamp leverages the proven technology of our Synergy ablation system to provide simpler and faster ablations in open heart procedures. This increased procedure efficiency over legacy solutions continues to drive exceptional adoption of this device, opening up new opportunities for growth. We are pleased to see Encompass highlighted at the recent AATS meeting in Toronto in many papers and presentations.

Michael H. Carrel: More recently in our open up ablation franchise, we've had tremendous success with our encompass climber the.

Michael H. Carrel: The encompass clamp leverages the proven technology of our synergy ablation system to provide simpler and faster ablation and open heart procedures.

Michael H. Carrel: This increased procedure efficiency over legacy solutions continues to drive exceptional adoption of this device and opening up new opportunities for growth. We are pleased to see encompass highlighted at the recent Ats meeting in Toronto across many papers and friendly.

Michael H. Carrel: Presentations.

Michael H. Carrel: We are committed to making concomitant treatment the standard of care for patients undergoing cardiac surgery and still see significant opportunity ahead in both pre-op AFib patients and eventually post-op AFib reduction. Building on this, we anticipate EU MDR approval and the European launch of the Encompass clamp in the back half of 2024, further expanding the impact of this outstanding product. Our founding mission is to advance the treatment of atrial fibrillation, leading to the development of standalone, minimally invasive treatments for patients.

Michael H. Carrel: We are committed to making concomitant treatment the standard of care for patients undergoing cardiac surgery and still see significant opportunity ahead in both Preop afib patients and eventually post op Afib reduction.

Michael H. Carrel: Building on this we anticipate EU <unk> approval in the European launch of the encompass clamp in the back half of 2024 further expanding the impact of this outstanding product.

Michael H. Carrel: Our founding mission is to advance the treatment of atrial fibrillation, leading to the development of Standalone minimally invasive treatments for patients.

Michael H. Carrel: Our hybrid AF therapy is an important extension of our expertise in effective treatment and is the only approved standalone treatment for longstanding persistent AFib. The evidence is clear that the most effective way to treat those patients is with a combined epicardial and endocardial approach, making our hybrid AF therapy complementary to all catheter-based technology. I am pleased to see the strength of our fourth quarter 2023 results carried into the first quarter of this year, resulting in increasing adoption across a growing base of accounts.

Michael H. Carrel: Our hybrid <unk> therapy, as an important extension of our expertise and effective treatment and is the only approved standalone treatment for long standing persistent afib.

Michael H. Carrel: The evidence is clear that the most effective way to treat those patients.

Michael H. Carrel: As with the combined epoch, cardio and endocardial approach, making our hybrid <unk> therapy complementary to all catheter based technologies.

Michael H. Carrel: I am pleased to see the strength of our fourth quarter 2023 results carried into the first quarter of this year, resulting in increasing adoption across a growing base of accounts.

Michael H. Carrel: As we expected, 2024 is shaping up to be a pivotal year for standalone treatment of AFib, with the availability of multiple PFA catheter technologies in the US highlighting this attractive and vastly underserved market. We are finding that physician interest in PFA technology encourages robust conversations and approaches to treating AFib and the varying needs of patients across the spectrum of this progressive disease. Our hybrid approach is complementary to PFA.

Michael H. Carrel: As we expected 2024 shaping up to be a pivotal year for standalone treatment of Afib with the availability of multiple PFA catheter technologies in the U S. Highlighting this attractive and vastly underserved market.

Michael H. Carrel: We are finding that physician interest and PFA technology encourages robust conversations on approaches to treating afib and the varying needs of patients across the spectrum of this progressive disease.

Michael H. Carrel: Our hybrid approach is complimentary to PFS and we believe the focus on more efficient endocardial ablation is a tailwind for everyone in the market long term.

Michael H. Carrel: And we believe the focus on more efficient endocardial ablation is a tailwind for everyone in the market long term. In fact, we have several customers already using endocardial PFA catheters in the second stage of their hybrid procedures, further validating our thoughts that PFA is part of a rising tide in this market. As we move through 2024, we remain focused on targeted efforts to support accounts as they develop hybrid AF therapy programs.

Michael H. Carrel: In fact, we have several customers already using endocardial PFA catheters in the second stage of their hybrid procedures further validating our thoughts the PFA is part of a rising tide in this market.

Michael H. Carrel: As we move through 2024, we remain focused on targeted efforts to support accounts as they develop hybrid <unk> therapy programs.

Michael H. Carrel: In addition, we're in the early stages of the launch of our steerable EpiSense device in Europe, providing another catalyst for this franchise in our international market. Our emphasis on innovation also extends to our appendage management franchise. Over a dozen years ago, we set out to transform the standard of care for patients with atrial fibrillation by offering a safer and more reliable method to exclude the appendage.

Michael H. Carrel: In addition, we are.

In the early stages of the launch of our cerebral epicentre device in Europe, providing another catalyst for this franchise and our international markets.

Michael H. Carrel: Okay.

Michael H. Carrel: Our emphasis on innovation also extends to our appendage management franchise franchise over a dozen years ago, we set out to transform the standard of care for patients with atrial fibrillation by offering a safer and more reliable method to exclude the appendage today, our <unk> products are the most widely used dependent.

Michael H. Carrel: Today, our AtriClip products are the most widely used appendage management devices in the world, with more than half a million devices sold. Given the strength and long-standing contribution of our AtriClip platform, we understand that the competitive dynamics in this market are top of mind for investors. However, we are pleased to continue driving healthy adoption in this business, marked by over 15% growth in our U.S. Open Appendage Management business in the first quarter and record sales of our AtriFlex V device, even in the presence of competitive device trialing.

Michael H. Carrel: Management devices in the world with more than a half a million devices sold.

Given the strength and longstanding contribution of our <unk> platform, we understand the competitive dynamics in this market are top of mind for investors.

Michael H. Carrel: However, we are pleased to continue driving healthy adoption in this business marked by over 15% growth in our U S. Open appendage management business in the first quarter and record sales of our <unk> Flex V device, even in the presence of competitive device trailing.

Michael H. Carrel: We are already seeing the availability of a competitive device yield in-depth discussions about treating the appendage, allowing us to highlight the advantages of our AtriClip technology. Over the long term, we expect this to promote therapy awareness in ways that we could not do on our own. In the short term, we are ready to compete and remain focused on delivering differentiated solutions. To that end, we are preparing for another significant innovation in this market with our Atriclip Flex Mini device, which is on track for FDA clearance and commercial launch later this year. The Atriclip Flex Mini builds on the solid foundation of our Atriclip technology, known for ease of use, unparalleled safety, and outstanding closure results, with a substantially smaller profile in this new device.

Michael H. Carrel: We are already seeing the availability of a competitive device yield in depth discussions on treating the appendage, allowing us to highlight the advantages of our <unk> technology.

Michael H. Carrel: Over the long term, we expect this to promote therapy awareness in ways that we could not do on our own.

Michael H. Carrel: In the short term, we are ready to compete and remain focused on delivering differentiated solutions to that end. We are preparing for another significant innovation in this market with our <unk> flex many device, which is on track for FDA clearance and commercial launch later this year.

Michael H. Carrel: The <unk> flex many builds on the solid foundation of our <unk> technology.

Michael H. Carrel: One for ease of use unparalleled safety and.

Michael H. Carrel: And outstanding closure results with a substantially smaller profile and this new device.

Michael H. Carrel: We also view our market opportunity for appendage management as multiples of where we began dozens of years ago. The investment in our LEAPS clinical trial has the potential to dramatically expand the use of the AtriCoop devices as the standard of care for all patients undergoing cardiac surgery, which represents over 1.5 million patients per year globally. The LEAPS clinical trial is investigating the use of the AtriClip products in patients without preoperative AFib diagnosis, seeking to demonstrate a clinically meaningful reduction in ischemic and systemic arterial embolism. If successful, this massive clinical trial, along with existing robust clinical evidence, would further separate our products from all other surgical left atrial appendage management devices.

Michael H. Carrel: We also view our market opportunity for appendage management is multiples of where we began dozens of years ago, a dozen years ago.

Michael H. Carrel: The investment in our leaps clinical trial has the potential to dramatically expand the use of the <unk> devices as the standard of care for all patients undergoing cardiac surgery, which represents over one 5 million patients per year globally.

Michael H. Carrel: The Leafs clinical trial is investigating the use of the <unk> products and patients without preoperative afib diagnosis seeking to demonstrate a clinically meaningful reduction in ischemic and systemic arterial embolism.

Michael H. Carrel: If successful this massive clinical trial, along with existing robust clinical evidence would further separate our products for all other surgical left atrial appendage management devices.

Michael H. Carrel: Enrollment in the LEAPS clinical trial has continued rapidly, with almost 2,300 enrollments today, driven by strong demand for patient inclusion across 77 sites in the U.S. and Canada. We anticipate the first patient enrollment in our European sites in the coming weeks, and we now expect a complete full enrollment of 6,500 patients by the middle of 2025.

Michael H. Carrel: Enrollment in the Leafs and the leaps clinical trial has continued rapidly with almost 2300 enrollments today driven by strong demand for patient inclusion across 77 sites in the U S and Canada.

Michael H. Carrel: We anticipate the first patient enrollment in our European sites in the coming weeks and we now expect to complete full enrollment.

Michael H. Carrel: <unk> 6500 patients by the middle of 2025.

Michael H. Carrel: Beyond our offerings in AFib, we have been successful in creating and expanding our pain management franchise, where our Cryosphere product line provides temporary relief from post-operative pain. Since launching in 2019, adoption of the cryosphere probe has been remarkable, with over 60,000 cryo-nerve block procedures performed to date. The momentum behind commercial adoption of the CryoSphere probe speaks to the meaningful reduction in pain patients experience following thoracic surgery.

Michael H. Carrel: Beyond our offerings in a fib, we have been successful in creating and expanding our pain management franchise, where our cryo sphere product line provides temporary relief from post operative pain.

Michael H. Carrel: Since launching in 2019 adoption of the crowd Vsphere probe has been remarkable with over 60000 crowd nerve block procedures performed to date.

Michael H. Carrel: The momentum behind commercial adoption of the Crossfire probe speaks to the meaningful reduction in pain patients experience following thoracic surgery.

Michael H. Carrel: As this therapy continues to grow, we are making investments in clinical data to support a comprehensive value proposition for both patients and physicians. At the same time, we are actively improving our current technology to advance therapy adoption. Recently, we announced the limited launch of our Cryosphere Plus device, which features new insulation technology to reduce freeze times by 25 percent. The limited launch is progressing well, the feedback has been excellent, and we remain on track for a full-scale launch by the end of this quarter.

Michael H. Carrel: As this therapy continues to grow we are making investments in clinical data to support a comprehensive value proposition for both patients and physicians.

At the same time, we are actively improving our current technology to advance therapy adoption <unk>.

Michael H. Carrel: Recently, we announced at the limited launch of our <unk> plus device, which features new installation technology to reduce <unk> by 25%.

Michael H. Carrel: The limited launch is progressing well the feedback has been excellent and we remain on track for a full scale launch by the end of this quarter.

Michael H. Carrel: As Cryosphere Plus makes its debut, we are completing studies to show the benefits of our new Cryosphere Max probe, which incorporates this new insulation technology and features a larger ball tip. We expect the CryoSphere Max Probe to show even further reduction in ablation and procedure time and expect to launch the CryoSphere Max Probe late in 2024.

Michael H. Carrel: As crowds surplus makes its debut.

Michael H. Carrel: We're completing studies to show the benefits of our new Cryo sphere, Max probe, which incorporates this new installation technology and features a larger volta.

Michael H. Carrel: We expect the <unk> probe to show even further reduction in our ablation and procedure time and expect to launch the Crossfire Max probe late in 2024.

Michael H. Carrel: We are confident that the improvements we are making will strengthen the case for adoption in an expanded set of use cases, including the sternotomy market. As we innovate and execute against our current market opportunity, we are researching additional market-expanding applications for crown-near-block therapy and look forward to updating you on our progress.

We are confident that the improvements we are making will strengthen the case for adoption and an expanded set of use cases, including the sternotomy market.

Michael H. Carrel: As we innovate and execute against our current market opportunity. We are researching additional market expanding applications for crown near block therapy, and look forward to updating you on our progress.

Speaker Change: In closing I.

Michael H. Carrel: I would like to reiterate my earlier comments. We have made investments across multiple growth vectors that will enable AtriCure to remain a market leader. And we expect to stay several steps ahead of peers in market development and expansion. Over the past decade, our company has consistently delivered outstanding growth, even in the context of pressure in different markets. Looking forward, we remain positioned to penetrate each of our markets meaningfully and sustainably, driving durable growth and leverage throughout our organization.

Speaker Change: I would like to reiterate my earlier comments, we have made investments across multiple growth vectors that will enable <unk> to remain a market leader and we expect to stay several steps ahead of peers in the market development and expansion over.

Speaker Change: Over the past decade, our company has consistently delivered outstanding growth even in the context of pressure in different markets.

Speaker Change: Looking forward, we remain positioned to penetrate each of our markets meaningfully and sustainably driving durable growth and leverage throughout our organization.

Michael H. Carrel: I believe the future at AtriCure is even more compelling now than ever before, with New Market Entrance validating this position. Therefore, as we look forward into 2024, we remain focused on expanding the reach of our solutions for patients with advanced forms of AFib, managing the left atrial appendage in patients undergoing cardiac surgery, and reducing post-operative pain. We are also eager to launch several new products across our markets and expand our clinical research initiatives, all while continuing our efforts to improve profitability in our business. And with that, I'll turn the call over to Angie Wirick, our Chief Financial Officer. Angie? Thank you.

Speaker Change: I believe the future of <unk> is even more compelling now than ever before.

Speaker Change: With new market entrants validating this position.

Speaker Change: Therefore, as we look forward into 2024, we remain focused on expanding the reach of our solutions for patients with advanced forms of Afib managing the left atrial appendage in patients undergoing cardiac surgery and reducing postoperative pain.

Speaker Change: We're also eager to launch several new products across our markets and expand our clinical research initiatives, all while continuing our efforts to improve profitability in our business and with that I'll turn the call over to Andrew <unk>, Our Chief Financial Officer Angie.

Angela L. Wirick: Our first quarter 2024 worldwide revenue of $108.9 million increased 16.4% on a reported basis and 16.3% on a constant currency basis when compared to the first quarter of 2023. We saw strong growth across franchises and geographies, demonstrating the diversified growth drivers of our business in each of our markets globally.

Andrew: Thank you Mike.

Our first quarter 2024 worldwide revenue of $108 $9 million increased 16, 4% on a reported basis and 16, 3% on a constant currency basis, when compared to the first quarter of 2023.

Andrew: We saw strong growth across franchises and geographies demonstrating the diversified growth drivers of our business in each of our markets globally sequentially.

Angela L. Wirick: sequentially, worldwide sales grew $2.3 million, or 2.2% over the fourth quarter of 2023. First quarter 2024 US revenue was $90.2 million, a 15.4% increase from the first quarter of 2023. Open Ablation product sales were $29.3 million compared to $25.1 million, up 16.5% over the first quarter of 2023 and propelled by ongoing adoption of our Encompass clamp across both new and existing accounts. U.S. sales of appendage management products were $35.9 million, up 11% over the first quarter of 2023.

Andrew: Sequentially worldwide sales grew $2 $3 million or two 2% over the fourth quarter of 2023.

Andrew: First quarter 2024 U S revenue was $90 2 million, a 15, 4% increase from the first quarter of 2023.

Andrew: Open ablation product sales were $29 $3 million compared to $25 1 million up 16, 5% over the first quarter 2023, and propelled by ongoing adoption of our encompass clamp across both new and existing accounts.

U S sales of appendage management products were $35 $9 million up 11% over the first quarter of 2023.

Angela L. Wirick: We saw robust growth in our Atriclip Flex-V device, driving our open appendage management products to an overall growth rate of approximately 15.4%. As Mike noted in his comments, our strong first quarter growth in open appendage management products is against the backdrop of accounts choosing to trial the Medtronic device. However, our appendage management franchise revenue saw pressure from a decline in our minimally invasive appendage management products, primarily from a reduction in Lariat system sales where we have a very limited base of users and following an outstanding fourth quarter of growth in our MIS Atriclip products.

Andrew: We saw robust growth in our <unk> Flex V device driving our open appendage management products to an overall growth rate of approximately 15, 4%.

As Mike noted in his comments, our strong first quarter growth in open appendage management products is against the backdrop that included accounts choosing to trial the Medtronic device.

Andrew: However, our appendage management franchise revenue saw pressure from a decline in our minimally invasive appendage management products, primarily from a reduction in lariat system sales, where we have a very limited base of users and following an outstanding fourth quarter of growth in our MSA chocolate products.

Angela L. Wirick: Paying management sales were $12.7 million, up 15.1% over the first quarter of 2023, and with limited revenue contribution from our new Cryosphere Plus probe. Finally, minimally invasive ablation sales were $12.3 million, up 27.8% over the first quarter of 2023. Similar to the end of 2023, our results this quarter reflect an increasing demand for our hybrid AF therapy, with more accounts adopting this treatment for advanced AFib patients. International revenue totaled $18.6 million, up 21.5% on a reported basis and up 21.1% on a constant currency basis as compared to the first quarter of 2023. European sales accounted for $11.3 million, up 20.7%, and Asia Pacific and other international markets accounted for $7.3 million in international sales, up 22.9%.

Andrew: Pain management sales were $12 $7 million up 15, 1% over the first quarter of 2023 and with limited revenue contribution from our new cryo scare plus probe.

Andrew: Finally, minimally invasive ablation sales were $12 $3 million up 27, 8% over the first quarter of 2023.

Andrew: Similar to the end of 2023, our results this quarter reflect an increasing demand for our hybrid <unk> therapy with more accounts adopting this treatment for advanced Afib patients.

Andrew: International revenue totaled $18 $6 million up 21, 5% on a reported basis and up 21, 1% on a constant currency basis as compared to the first quarter of 2023 Euro.

Andrew: European sales accounted for $11 $3 million up, 27% and Asia Pacific and other international markets accounted for $7 $3 million in international sales up 22, 9%.

Angela L. Wirick: We are excited by the continued strength of our international business across franchises and geographies and see pathways for accelerated growth to extend throughout 2024. Gross margin for the first quarter of 2024 was 74.7%, up 21 basis points from the first quarter of 2023. The increase was driven primarily by both product and geographic mix, along with operational efficiency.

Andrew: We are excited by the continued strength of our international business across franchises and geographies and see pathways for accelerated growth to extend throughout 2024.

Gross margin for the first quarter 2024 was 74, 7% up 21 basis points from the first quarter of 2023. The increase was driven primarily by both product and geographic mix along with operational efficiencies.

Angela L. Wirick: Now moving on to operating expenses for the quarter. For comparability of operating costs, my remarks will exclude the $4 million gain on legal settlement recorded as an offset to SG&A in the first quarter of 2023. Operating expenses increased $12.8 million, or 16.1%, from $79.4 million in the first quarter of 2023 to $92.2 million in the first quarter of 2024. Overall, the change was a result of our continued investments in research and development activities, which increased approximately 29% from the first quarter of 2023, reflecting robust enrollment in our LEAPs clinical trial and progress on several research and product development initiatives. We saw leverage within SG&A as expenses increased by approximately 13% from the first quarter of 2023.

Andrew: Now moving on to operating expenses for the quarter for comparability of operating costs. My remarks will exclude the $4 million gain on legal settlement recorded as an offset to SG&A in the first quarter of 2023.

Andrew: Operating expenses increased $12 $8 million or 16, 1% from $79 $4 million in the first quarter of 2023 to <unk> $92 $2 million in the first quarter of 2024.

Andrew: Overall, the change was a result of our continued investments in research and development activities, which increased approximately 29% from the first quarter 2023, reflecting.

Andrew: Robust enrollment in our leaps clinical trial and progress on several research and product development initiatives.

Andrew: We saw leverage within SG&A as expenses increased by approximately 13% from the first quarter of 2023 and as we navigate the remainder of 2024, we will prioritize investments in research and development to ensure our future with an enhanced pipeline of products and clinical evidence balanced with our commitment to realize increasing.

Angela L. Wirick: And as we navigate the remainder of 2024, we will prioritize investments in research and development to ensure a future with an enhanced pipeline of products and clinical evidence, balanced with our commitment to realize increasing economies of scale to expand profitability. Now turning to the bottom line, we drove Adjusted EBITDA of $2.8 million for the first quarter 2024 compared to Adjusted EBITDA of $1.9 million for the first quarter 2023, an increase of approximately 46%.

Andrew: <unk> scale to expand profitability.

Andrew: Now turning to the bottom line, we drove adjusted EBITDA of $2 $8 million for the first quarter 2024, compared to adjusted EBITDA of $1 $9 million for the first quarter 2023 for an increase of approximately 46%.

Angela L. Wirick: Our loss per share was $0.28 in the first quarter of 2024 compared to a loss per share of $0.14 in the first quarter of 2023, while the adjusted loss per share for each period was $0.25 and $0.23, respectively. We ended the first quarter with $106 million in cash and investments, reflecting our normal pattern of a heavy burn, heavy first quarter burn driven by share vesting, variable compensation payments, and operational needs.

Andrew: Our loss per share was 28 cents in the first quarter 2024 compared to a loss per share of <unk> 14 in the first quarter 2023, while the adjusted loss per share each period was 25.

Andrew: And 23, respectively.

Andrew: We ended the first quarter with $106 million in cash and investments, reflecting our normal pattern of a heavy burn heavy first quarter burn driven by share vesting variable compensation payments and operational needs. We.

Angela L. Wirick: We expect to generate positive cash flows for the remainder of 2024, resulting in a modest overall burn for the year, which is consistent with our guidance earlier this year. We remain in a very solid position with our balance sheet to fund the current and future operating needs of the business. And now closing with our outlook for 2024. As Mike mentioned, we are reiterating our expectations for full-year revenue of $459 to $466 million, reflecting growth of 15 to 17% over the full year 2023. Underlying procedure trends and the operating environment remain stable in our key markets worldwide.

Andrew: We expect to generate positive cash flows for the remainder of 2024, resulting in a modest overall burn for the year, which is consistent with our guidance earlier this year.

Andrew: We remain in a very solid position with our balance sheet to fund the current and future operating needs of the business.

Andrew: And now closing with our outlook for 2024 as Mike mentioned, we are reiterating our expectations for full year revenue of $459 million to $466 million, reflecting growth of 15% to 17% over the full year 2023.

Andrew: Underlying procedure trends and the operating environment remains stable in our key markets worldwide. Therefore, we expect to see sequential revenue growth from the first to second quarter that is in line with historical seasonality in our business.

Angela L. Wirick: Therefore, we expect to see sequential revenue growth from the first to second quarter that is in line with historical seasonality in our business. In other words, we expect to see mid-single-digit to upper-single-digit growth on a sequential basis. From a margin perspective, we continue to expect 2024 gross margin to be in line with 2023 gross margin with the potential for varying impacts from cost savings initiatives, product, and geographic mix. As I stated earlier in my comments and on previous calls, our primary focus with capital allocation is to incubate the next set of growth drivers for AtriCure.

Andrew: In other words, we expect to see mid single digit to upper single digit growth on a sequential basis.

Andrew: From a margin perspective, we continue to expect 2020 for gross margin to be in line with 2023 gross margin with the potential for varying impacts from cost savings initiatives product and geographic mix.

Andrew: As I stated earlier in my comments and on previous calls our primary focus with capital allocation is to incubate. The next set of growth drivers for <unk> care.

Angela L. Wirick: Therefore, we expect to maintain R&D as a percentage of revenue at roughly 19 to 20% in 2024. Additionally, our spending across SG&A will moderate in proportion to revenue as the year progresses, providing leverage and sustained improvement to profitability. With this in mind, we are reiterating our expectations for full year 2024 adjusted EBITDA of $26 to $29 million, translating to an adjusted loss per share of approximately $0.74 to $0.82. We expect the remaining improvement to full year 2024 adjusted EBITDA over full year 2023 will occur in the third and fourth quarters of 2024, largely based on the timing and expansion of R&D costs from the comparable quarters in 2023

Andrew: Therefore, we expect to maintain R&D as a percentage of revenue at roughly 19% to 20% in 2024.

Andrew: Our spending across SG&A will moderate in proportion to revenue as the year progresses, providing leverage and sustained improvement of profitability.

Andrew: With this in mind, we are reiterating our expectations for full year 2024, adjusted EBITDA of 26% to $29 million.

Andrew: Translating to an adjusted loss per share of approximately 74 to <unk> 82.

Andrew: We expect the remaining improvement to full year 2024, adjusted EBITDA over full year 2023.

Andrew: Will occur in the third and fourth quarters of 2024, largely based on timing and expansion of R&D costs from the comparable quarters in 2023.

Angela L. Wirick: Overall, the first quarter 2024 results demonstrate the strength and depth of our product portfolio. We are extremely pleased with our performance and the advancements of many impactful initiatives across the globe, along with increasing profitability in 2024. Now, I will turn the call back to Mike.

Overall, the first quarter 2024 results demonstrate that the strength and depth of our product portfolio portfolio. We are extremely pleased with our performance and the advancements of many impactful initiatives across the globe, along with increasing profitability in 2024.

Now I will turn the call back to Mike.

Michael H. Carrel: We've begun 2024 on a solid footing across our business with strong growth on both top and bottom lines while delivering on many key product and clinical milestones which will drive growth for years to come. I would like to thank the entire AtriCure team for your commitment to our patient-first mission and to continue to live our values every day as we work together to build an even brighter future for our business. We have the unique opportunity to both advance and further expand our markets as we work to heal the lives of those affected by AFib and Pain After Surgery. And with that, I'll turn it over to the operator. To ask a question, please

Michael H. Carrel: Thank you Angie.

Michael H. Carrel: We have begun 2024, and a solid footing across our business with strong growth on both top and bottom line, while delivering on many key product and clinical milestones, which will drive growth for years to come.

Michael H. Carrel: I would like to thank the entire <unk> team for your commitment to our patient first mission.

Michael H. Carrel: Continue to live our values every day as we work together to build an even brighter future for our business.

Michael H. Carrel: We have the unique opportunity to both advance and further expand our markets as we work to heal the lives of those affected by Afib.

Michael H. Carrel: In pain after surgery, and with that I'll turn it over the operator for questions.

Operator: To ask a question, please press star one on your telephone and wait for your name to be announced. To withdraw your question, please press star 1 1 again. In the interest of time, we ask that you please limit yourself to one question and one follow-up. Please stand by while we compile the Q&A roster. Our first question comes from Robbie Marcus with J.P. Morgan. Your line is open.

Speaker Change: To ask a question. Please press star one one on your telephone and wait for your name to be announced to withdraw your question. Please press star one again.

Speaker Change: In the interest of time, we ask that you. Please limit yourself to one question and one follow up please.

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

Speaker Change: Our first question comes from Robbie Marcus with Jpmorgan. Your line is open.

Robert Justin Marcus: Oh, great. Thanks for taking the question. Congratulations on a good quarter here. Maybe I could start on the guidance. You beat revenue versus the street by 2 million, looks like. Missed EBITDA just slightly by a million, yet kept guidance on the top line reiterated for the year. So maybe just walk us through the thought process there and how you think about the guidance in light of the first quarter.

Robert Justin Marcus: Oh, great. Thanks.

Robert Justin Marcus: Thanks for taking the question congrats on a good quarter here.

Robert Justin Marcus: Maybe I could start on the guidance you beat revenue versus the street by $2 million looks like Mr. EBITDA, just slightly by a $1 million yet.

Robert Justin Marcus: Kept guidance on the topline reiterated for the year. So maybe just walk us through the thought process, there and how youre thinking.

Robert Justin Marcus: About the guidance in light of the first quarter.

Angela L. Wirick: Thanks, Robbie. I'd say just that it's still pretty early in the year. And while we're really pleased with the results of the first quarter, we felt like it was prudent to keep the guide in place. You know, Mike walked through several new product introductions in his comments, as well as, you know, increasing penetration of the market throughout the year as really the big growth drivers as we operate through the remainder of 2024. And we're seeing, you know, really robust momentum in our international business as well, which gives us good confidence in the ability to deliver and perform for the remainder of the year. So it just felt like it was early in the year and prudent to keep that as the guide where we were.

Speaker Change: Thanks, Ravi I'd say, just it's still pretty early in the year and while we're really pleased with the results of the first quarter felt like it was prudent to keep the guide in place.

Mike walked through several new product introductions.

In his comments as well as you know the increasing penetration of the market throughout the year as really the big growth drivers as we operate through remainder of 2024 and we're seeing it.

Speaker Change: A really robust momentum in our international business as well, which gives us good confidence in the ability to deliver and perform for the remainder of the year. So it just felt like it was early in the year and prudent to keep that the guide where we were at.

Robert Justin Marcus: Got it. You talked a bit about AtriClip and the competitor in the market. I was hoping you could go into that a little more. You know, when I look at the results, it's the one line item where you didn't beat in the first quarter. There is obviously a lot of concern out in the market. So I was hoping you could walk through your expectations for that line item for the rest of the year and what you're seeing competitively out there. Thanks a lot.

Speaker Change: Got it.

Speaker Change: You talked a bit about.

Speaker Change: Hey, cliff than the competitor.

Speaker Change: Out in the market I was hoping you could go into that a little more when I look at the results. It's the one line item, where you didn't beat in the first quarter. There is obviously a lot of concern out in the market. So I was hoping you could walk through your expectations for that line item for the rest of the year and what Youre seeing competitively out in the market. Thanks a lot.

Michael H. Carrel: Yeah, I think we're going to tag team that one, Robbie, so I appreciate the question. I know that it's top of mind for a lot of investors. I'll start with just kind of what we're seeing out in the field. As I mentioned in my comments, we definitely see competition and a lot of sites trialing the competition out there. We're not seeing any kind of massive shift in any kind of market share from that standpoint, but we definitely see them in the field. Our team has done a really nice job of understanding what's happening at every one of the accounts, but they've also got relationships with a variety of different accounts around the country.

Speaker Change: Sure, Yes, I think we're going to tag team that one Ravi. So appreciate the question I know that it's top of mind for a lot of investors I'll start with just kind of what we're seeing out in the field as I mentioned in my comments, we definitely see the competition in a lot of sites Trialing the competition out there.

Speaker Change: We're not seeing any kind of massive shift in any kind of market share from that standpoint, but we definitely see them in the field. Our team has done a really nice job of understanding what's happening at every one of the accounts, but they've also got relationships that have a variety of different accounts around the country.

Michael H. Carrel: That being said, as I mentioned in my comments, I feel really confident in both our product that exists today, which we think is by far the best in the market. It's a great product that has been proven from both a safety and efficacy standpoint. I believe most customers understand and believe that, but they're going to try it. I mean, they're human beings.

Speaker Change: Being said as I mentioned in my comments I feel really confident in both our product that exist today, which we think is by far the best in the market.

Speaker Change: It's a great product that has been proven from both a safety and efficacy standpoint, I believe most customers understand and believe that but they're going to try it they're human beings physicians like to try new things and we definitely see sites trying out the new product that they want to kind of see what else is on the market as I mentioned in my comments, it's really important to understand that.

Michael H. Carrel: Physicians like to try new things, and we definitely see sites trying out the new product because they want to kind of see what else is on the market. As I mentioned in my comments, it's really important to understand that I think this drives great conversation. They're going to get some market share on it.

Speaker Change: Think of this drives great conversation.

Michael H. Carrel: Obviously, we understand that, but it drives discussion about managing the appendage. It drives discussion about the guidelines that just came out from both STS and AHA and ACC recently and ERA over in Europe that say you must treat the appendage every time someone has AFib. And obviously, there's a great way to treat the appendage with the Atrial Clip.

Speaker Change: To get some market share, obviously, we understand that but it drives discussion about managing the appendage. It drives discussion about the guidelines that just came out from.

Speaker Change: From both STS at IHA and ACC recently, an era over in Europe, Let's say you must treat the appendage every time someone has afib and obviously there is a great way to treat the appendage with the <unk>. So it drives a really good conversation around treatment of the appendage and then leads into the conversation around well we've got this trial and we're good.

Michael H. Carrel: So, it drives a really good conversation around treatment of the appendage and then leads into the conversation around, well, we've got this trial, and we're getting sites up and running. As you heard, we've got 77 sites up and running on our LEAPS trial from that standpoint. So, yes, we're seeing competition out there. We definitely see them in the field, and we see people trying their product. But overall, I think that we're in a really good position.

Speaker Change: Sites up and running as you heard we got 77 sites up and running on our leaps trial from that standpoint. So yes, we are seeing competition out there we definitely see them in the field.

Speaker Change: And we see people trying trialing their product.

Michael H. Carrel: You saw it in our numbers, with over 15% growth in our open part of our business. I'll let Angie talk a little bit more about kind of how we're projecting and looking at the rest of the year as well.

Speaker Change: But overall I think that we're in a really good position you saw in our numbers with over 15% growth on our open part of our business and I'll, let Andrew talk a little bit more maybe about kind of how we're projecting and looking at the rest of the year as well.

Angela L. Wirick: Yeah, so our guidance for the full company is a growth rate of 15 to 17% for the full year. I think that being said, we understand that there may be some fluctuations in different areas, but as a business, with a very long track record, we've been able to deliver high growth from the business overall. And our expectations when we started the year were that each component of the business, each of our franchises, would start to converge around that corporate growth rate. We still feel like that is intact at this point in time.

Andrew: Yes, so our guidance for the full company is a growth rate of 15% to 17% for the full year I think that being said, we understand that there may be some fluctuations in different areas, but as a business over a very long track record, we've been able to deliver high growth from the business overall, and our expectations, where we started the year that each.

Andrew: A component of the business each of our franchises would start to converge.

Angela L. Wirick: I think, you know, very different from our expectations last year in 2023, where we knew that there would be some areas, some particular franchises that had very outsized growth. And then, you know, others that may be behind, we feel like each area of the business is still converging around that kind of overall corporate growth rate. About 75% of our U.S. appendage management revenue is in our open chest setting. The remaining 25% is in a minimally invasive setting, and we're still seeing nice and strong attachment to our hybrid procedures.

Andrew: That corporate growth rate, we still feel like that is intact at this point in time.

Andrew: I think very different from our expectations last year in 2023, where we knew that there would be some areas. Some particular franchises that had very outsized growth and then others that may be behind we feel like still each area of the business converging around that kind of overall corporate growth rate. So the pressure that you see in the U S appendage management number.

Andrew: In the first quarter.

Andrew: To frame this up about.

Andrew: About 75% of our U S. Appendage management revenue is in our open open chest setting the remaining 25% isn't a minimally invasive setting and we're still seeing nice and strong attachment to our hybrid procedures, but where we've got the competitive device like Mike said, we grew 15, 4% in the first quarter and saw.

Angela L. Wirick: But where we've got the competitive device, like Mike said, we grew 15.4% in the first quarter. It saw really outsized pressure from a reduction in our lariat system revenue, as well as some transition on our MIS atrioclip revenue, which brought the overall U.S. appendage management revenue growth rate down for the quarter.

Andrew: Really outsized pressure from a reduction in our lariat system revenue as well as some transition on our mis HR clip revenue.

Andrew: Which brought the overall U S appendage management revenue growth rate down for the quarter.

Operator: I appreciate it. Thanks a lot.

Speaker Change: I appreciate it thanks a lot.

William John Plovanic: One moment for our next question, and our next question comes from William Plovanic with Canaccord Genuity. Your line is open.

Speaker Change: Thank you.

Speaker Change: One moment for our next question.

Speaker Change: And our next question comes from William <unk> with Canaccord Genuity. Your line is open.

William John Plovanic: Yeah, great. Thanks for taking my question, and good evening. I was wondering, you know, just a little bit more about the Lariat.

William: Yeah, great. Thanks for taking my question and good evening.

William: I was wondering.

William: Just a little bit more on the where you're at I think that's been a business have you discontinued that product in the U S is that going away or is that a one quarter kind of deal and then just competitively have you seen any change in pricing or bundling strategy in.

William: In terms of the penetrate device.

Michael H. Carrel: I think that's been a profitable business. Have you discontinued that product in the U.S.? Is that going away, or is that a one-quarter kind of deal? And then, just competitively, you know, have you seen any change in pricing or bundling strategy in terms of the penetrable? And then, just since we're on that, Mike, how do you think about long-term growth in the LAA market today? Is this going to be a 50% grower, a 15% grower, or a 20% grower? And I'm talking about the U.S.

Speaker Change: And then yes.

Speaker Change: Since we're on that Mike how do you think about long term growth.

Speaker Change: In the La market today is just going to be a 50% grower, 20%, 15% grow 20% and I'm talking about the U S.

Michael H. Carrel: Yeah, I'll start on the first one because I think there are three different questions in there. So the first was about Lariat. As you know, back several years ago, when we did the readout on the trial, while the device actually worked incredibly well for closure, it actually had better closure than any percutaneous device on the market today and also had a great safety record in the trial. And, if you recall, it was a 600 patient trial. It did not meet the end point of reducing AFib.

Speaker Change: Yes, I'll start.

Speaker Change: And the first one so because I think there are three different questions in there. So the first was about Larry it.

Michael H. Carrel: It reduced AFib by 4.3%, and we needed to hit about 8% in order to win the trial and have superiority. As a result, the product has still been on the market under the 510K that it was originally on. People continue to use it, but we weren't adding any new sites. And so what you're seeing now with Larry is we're trying to evaluate what our next steps should be. We know this product is an exceptional product. It works very well.

Speaker Change: As you know back several years ago, when we did the readout on the trial, while the while the device actually worked incredibly well for closure it actually had better closer than any percutaneous device on the market today and also had a great safety record in the trial and if you recall is a 600 patient trial. It did not meet the endpoint of <unk>.

Speaker Change: <unk>, a fair bit reduce afib by four 3% and we needed to hit about 8% in order to win the trial and have superiority.

Speaker Change: So.

Speaker Change: As a result, the product is still been on the market under the 500 10-K that it was originally on people continue to use it but we werent, adding any net new sites and so what youre seeing now with Larry. It is we're trying to evaluate what our next steps. We know this product is an exceptional product it works very well.

Michael H. Carrel: It is a product that does not get left in the bloodstream like you do with the other percutaneous occluder products on the market, but we've got to consider what our next steps with that product would be, and likely would have to run a stroke trial, and I'm not saying we are going to, but that would have to be the logical thing for someone to consider with it at some point in time. We're not shutting it down because it is being used.

Speaker Change: Is a product that does not get left and left in the bloodstream like your view on the other percutaneous <unk> market.

Speaker Change: But we've got to consider what are our next steps with that product and like we would have to run a stroke trial and im not saying, we are going to but that would have to be the logical thing for someone to consider with it at some point in time, we're not shutting it down because it is being used.

Michael H. Carrel: That being said, the pressure is, as you've seen in this market, it's not a lot of revenue, but as you've seen in this market, you've got new products coming out that are in trials. So there was a product called Conformal, and then also the Laminar just came out.

Speaker Change: That being said the pressure is as you've seen in this market, it's not a lot of revenue, but as you've seen in this market you have got new products coming on that are in trials. So there was a protocol between formal and then also the laminar just came out. So many sites are now getting involved in the new trials on the new devices that are coming out and.

Michael H. Carrel: So many sites are now getting involved in new trials on the new devices that are coming out. And our suspicion is that you're seeing a little bit of pressure on that because it's not a lot, and the sites that were using our products tended to be the more advanced sites that are out there that would tend to be part of some trials like that. So we think that's kind of where maybe some of that pressure is happening on the Lariat product.

Speaker Change: Our suspicion is that youre seeing a little bit of pressure on that because it's not a lot in the sites that were using our products tended to be the more advanced sites that are out there that would tend to be part of some trials like that so we think thats kind of where maybe some of that pressure is happening on malaria product, we're not promoting it we're not pushing in the market, but we have not shut it down either.

Michael H. Carrel: We're not promoting it. We're not pushing it in the market, but we have not shut it down either. As it relates to kind of market dynamics, we're seeing good, consistent pricing in the market, and feel really good about that from that standpoint. It makes a lot of sense from that standpoint.

Speaker Change: As it relates to kind of the kind of market dynamics, we're seeing good consistent pricing in the market and feel really good about that from that standpoint, we think it is.

Speaker Change: It makes a lot of sense from that standpoint, and then finally as we look at the long term rates for our appendage management.

Michael H. Carrel: And then finally, as we look at the long-term rates for appendage management, I'm not gonna give a specific number, but there's a reason we're running the LEAPS trial. The LEAPS trial is about, close to tripling, maybe quadrupling, the size of the overall market for people that can get their appendage managed. That full 1.1 million patients around the globe that are undergoing cardiac surgery, we believe the LEAP trial will demonstrate if you put an AtriCure clip on those patients, prophylactically, or even when they're in AFib, but prophylactically in the trial, you are going to reduce their stroke rate and their incidence of strokes.

Speaker Change: I'm not going to give a specific number but there is a reason we're running beliefs trial, though.

Speaker Change: <unk> trial was about <unk>.

Speaker Change: Close to tripling, maybe quadrupling the size of the overall market for people that can get their appendage managed that full 1 million patients around the globe that are undergoing cardiac surgery. We believe the lead trial will demonstrate if you put in a triplet on those patients prophylactic or even when they are in afib, but prophylaxis in the trial that you are going to reduce their stroke rate in there.

Michael H. Carrel: And we think that will be a big global trend that will happen once that product reads out. That should, in the longer term, drive significant growth of the appendage management business for a very long period of time. And so, without giving a specific number, we do see that this market is less than 20% penetrated in the U.S., when you kind of calculate all those patients, and less than, really between about 5% and 10% on a global basis. So, there is a long way to go before giving a specific growth rate.

Speaker Change: Incidents of strokes and we think that will be a big global trend that will happen once that product reach out that should longer term drive significant growth out of the appendage management business for a very long period of time, and so without giving a specific number we do see that this market is less than 20% penetrated in the U S.

Speaker Change: You can kind of calculate all those patients and less than really between about 5% and 10% on a global basis. So a long way to go without giving a specific growth rate bill.

William John Plovanic: Great. And then a follow-up, if I could, on EpiSense. Has PFA been a distraction? You know, the EpiSense number was great.

Speaker Change: Great and then a follow up if I could.

Speaker Change: <unk> is PFS and a distraction.

Michael H. Carrel: So the question we've been getting asked from investors is, you know, is PFA going to be a distraction? And will those EPs adopt PFA? And it makes it harder for you to kind of get in there and get those new accounts because they're focused on getting trained on other technologies. And then on PFA, what product are you targeting first with PFA in your own portfolio? And thanks for taking my question.

Bill: The episodes number was great. So.

Bill: We've been getting asked from investors is is <unk> going to be a distraction is <unk> adopt PFA.

Bill: And it makes it harder for you to kind of get in there and get those new accounts because they are focused on getting trained and other technologies.

Speaker Change: And then on PFA, what product are you targeting first with PSA in your own portfolio and thanks for taking my questions.

Michael H. Carrel: As it relates to the catheter-based PFAs and the excitement that's out there, as I mentioned in my comments, we think it's actually engaging conversations. It's allowing us to have conversations with EPs that maybe we weren't having before.

Speaker Change: Sure.

Speaker Change: As it relates to the catheter based PFS and the excitement that's out there as I mentioned in my comments, we think it is actually.

Speaker Change: Engaging conversations, it's allowing us to have conversation with EP that maybe we weren't having before we've got several sites as I mentioned that are now actually using PFA in the convergent procedure.

Michael H. Carrel: We've got several sites, as I mentioned, that are now actually using PFA in the convergent procedure, so it's not actually having an impact on us in terms of getting and setting up new sites or any kind of major distraction from that standpoint. It really drives good discussion and conversation around how PFA would work in a hybrid-type setting, and so there's a lot of discussion about that. We believe that discussion and awareness are good.

Speaker Change: So it's not actually having an impact on us in terms of getting in setting up new sites.

Speaker Change: Or any kind of major distraction from that standpoint, it really actually drives good discussion and conversation around or how would PFA work in a hybrid type setting and so there's a lot of discussion about that and so we believe that discussion and awareness is good remember PFA is an efficiency gain more than anything else. When you look at the data.

Michael H. Carrel: Remember, PFA is an efficiency gain more than anything else when you look at the data and the results from all those companies. Converge is an efficiency gain in terms of you reduce the time that someone has to do an ablation when they go in, so you've got double efficiency gains. People recognize the importance of that, and that's actually been a lot and a big part of the conversation relative to that.

Speaker Change: The results from all of those companies converge as an efficiency gain in terms of you reduce the time that someone has to do ablation. When they go in so you've got double efficiency gains people recognize the importance of that and that's actually been a lot and a big part of the conversation relative to that.

Speaker Change: I know there was a second part of the conversation.

Michael H. Carrel: It was PFA general for your own portfolio. What's the first part?

Speaker Change: In general for your own portfolio, what's the first product, yes, I mean, we think PFA can fit really well into every one of our technologies very.

Michael H. Carrel: Yeah, I mean, we think PFA can fit really well into every one of our technologies as an option for people to utilize. As we've mentioned on this call before, we've definitely got programs underway and are making really good progress on that front. And it would be across pretty much our entire portfolio of products.

Speaker Change: Very well as an option for people to utilize as we've mentioned on this call before we've definitely got programs underway and are making really good progress on that front and it would be across pretty much our entire portfolio of products.

Operator: Thank you. One moment for our next question. Our next question comes from Rick Wise with Stiefel. Your line is open.

Speaker Change: Thank you one moment for our next question.

Speaker Change: Our next question comes from Rick Wise with Stifel. Your line is open.

John Glenn McAulay: Hi Mike, Angie, this is John on for Rick today. First question, just curious about price in the quarter and also in the year ahead. You have several product launches. Just curious how that might have factored into growth here and how you're looking at it for the rest of the year.

Speaker Change: Hi, Mike Hi, Angie this is John on for Rick today.

John: First question, just curious about price in the quarter and also in the year ahead, you have several product launches just curious how it might have factored into growth here and how you are looking at it for the rest of the year.

Angela L. Wirick: John, when you think about a couple of the product launches that we outlined on the call, I think we said, you know, the cryosphere plus the newest technology that we're in the process of a limited launch currently in our pain management business, we would expect that to launch at similar prices to the device that's on the market today. There's a time savings benefit. We do think that most accounts will migrate over to this.

Angie: Hey, John when you think about a couple of the product launches that we outlined on the call I think we've said the crius here plus the newest technology that we're in the process of a limited launch currently and our pain management business, we would expect that to launch at similar pricing to the devices on the market today.

Angie: Time savings benefit it we do think that most accounts will migrate over to this and there is actually a cost savings benefit to the company, it's a better gross margin profile.

Angie: Keeping the price the same on that so not going to be a big driver of growth throughout the year I'd say, a chocolate flex, many which would be kind of next step in terms of the launch.

Angela L. Wirick: And there's actually a cost savings benefit to the company. It's a better gross margin profile, but keeping the price the same on that. So it is not going to be a big driver of growth throughout the year. I'd say AtriCote Flex Mini, which would be kind of next up in terms of the launch, to be determined, you know, at a future date when we're closer to the launch on that. The way that we're thinking about this, though, from how that factored into the guide is just looking for the impact from a volume perspective and not an uplift on a pricing perspective.

Angie: To be determined at a future date, when we're closer to the launch on that the way that we're thinking about this though from how that factored into the guide is just looking for that.

Angie: <unk> from a volume perspective, and not an uplift on a pricing perspective at a couple of the products in our European markets, where we've gotten premiums in the U S. The strategy would be the same when we launched the encompass clamp in Europe, it would be at a higher price than our existing devices. So that's been factored into kind of the outlook again minimal.

Angela L. Wirick: You know, with a couple of the products in our European markets where we've gotten premiums in the US, the strategy would be the same when we launched the Encompass Clamp in Europe; it would be at a higher price than our existing devices.

Angela L. Wirick: So that's been factored into kind of the outlook. Again, minimal quantities in 2024, more impactful in 2025. But that has been factored into the overall guide. So taking a step back, when you look at the quality of growth for 2024, we believe most of this is driven by just sheer volume growth as we continue to penetrate each of our markets.

Angie: Quantities in 2024 more impactful in 2025.

Angie: But that has been factored into the overall guide so taking a step back when you look at the quality of growth for 2024. We believe most of this is driven by just sheer volume growth as we continue to penetrate each of our markets.

John Glenn McAulay: Great, that's helpful. And just to follow up, you talked about starting up the first LEAP site in Europe. And I was just curious, you saw pretty strong growth again for OUS and the appendage management business. I'm just curious, maybe how LEAPs can help get the OUS business potentially growing faster, more sites interested, just sort of any thoughts there on appendage management outside the US? Thanks for taking the question.

Speaker Change: Great. That's helpful and just a follow up you talked about starting up the first leap site in Europe.

Speaker Change: And I was just curious you saw pretty strong growth again.

Angie: And the appendage management business I'm, just curious maybe how.

Speaker Change: <unk> can help get the O U S business potentially growing faster more sites interested just sort of any thoughts there on the appendage management outside the U S. Thanks for taking the questions.

Michael H. Carrel: Yeah, I think when we think about the long term impact of LEAPS, the reason we're doing a global trial and including both Europe and Asia in the trial, we're trying to get them up and running fast, because it's enrolled so fast in the US, is because we do want to make these standard of care changes everywhere around the globe. It's that, that's what this trial is meant to be. It's one of the reasons the trial is so large.

Speaker Change: Yeah, I think when we think about long term the impact of Lisa. The reason, we're doing a global trial, including both Europe and Asia and are trying we're trying to get them up and running fast because it is enrolled so fast in the U S.

Speaker Change: Because we do want to make these standard of care changes everywhere around the globe Thats what thats. What this trial is meant to be it's one of the reasons the trials so large.

Michael H. Carrel: And so we're really excited about getting Europe up and running now, and hopefully within the next three to six months, getting some sites in Asia as well. So that can be truly an international trial on that front. And we believe that's going to change adoption rates around the globe. As I mentioned, it's only about 5% penetrated around the globe. And so if we can prove stroke reduction in this patient population, that's obviously a significant benefit for society and for those patients, which we believe can change payer practices in countries throughout the world.

Speaker Change: And so we're really excited about getting Europe up and running now and hopefully within the next three to six months getting some sites in Asia as well so that can be truly an international trial on that front and we believe that's going to change adoption rates around the globe as I mentioned, it's only like 5% penetrated around the globe and so if we can prove stroke reduction in this patient population.

Angie: <unk>, that's obviously a significant benefit for society and for those patients, which we believe can change payer practices in countries throughout the world and that is one of the reasons that we're doing that trial. So I do think that thats going to be a critical piece for us to change care is the leaps trial overall in the short term.

Angie: What we're seeing is just a recognition with all the guideline changes that you've seen first the guidelines in the U S. And then now error just came out recently, where they made a class <unk> guideline that you must manage the appendage, it's basically telling everybody that they need to increase that I believe that guideline changes that we've seen over the last four months.

Michael H. Carrel: I believe that the guideline changes that we've seen over the last four months will probably have a more dramatic effect on our business OUS, just because they're so lowly penetrated at this point in time. It takes time, though, because they've got to work out reimbursement by country and things like that. But I do believe that there's the potential for some impact based on those guidelines.

Angie: We'll probably have a more dramatic effect on our business or U S. Just because theres. So lowly penetrated at this point in time. It takes time, though because they've got a workout reimbursement by country and things like that but I do believe that there is a potential to have some impact based on those guideline changes.

Speaker Change: Thanks very helpful.

Operator: Thank you. One moment for our next question. Our next question comes from Marie Thibault with BTIG. Your line is open.

Speaker Change: Thank you one moment for our next question.

Speaker Change: Our next question comes from.

Speaker Change: Reachable with <unk> Your line is open.

Marie Yoko Thibault: Hi, good evening, and thanks for taking the questions. I want to revisit the Lariat and AtriClip discussion just to try to triangulate some of the numbers you offered us. It looks like Lariat and minimally invasive AtriClip had flat growth year over year at about $9 million of U.S. appendage management revenue this quarter. And then AtriClip in the open setting, which is where we're seeing the competition, was about $27 million, which grew 15.5%, you said.

Reachable: Hi, good evening and thanks for taking the questions I wanted to revisit the lariat and atria clip.

Marie Yoko Thibault: Do those numbers sound about right to you? And then, secondly, is that the right way to think about kind of a similar breakdown and growth trend for those two parts for the rest of the year, you know, mid-teens and the open AtriClip and then flat and other appendage management? Just want to make sure that we understand some of those puts and takes.

Reachable: Discussion just to try to triangulate some of the numbers you offered us it looks like lariat, and minimally invasive H clip or flat growth year over year at about $9 million of the U S. Appendage management revenue this quarter, and then ATRA Clifton open setting, which is where we're seeing the competition was about 27 million, which grew $15 <unk>.

Speaker Change: 5% you said.

Speaker Change: Do those numbers sound about right to you and then secondly is that the right way to think about kind of a similar breakdown in growth trend for those two parts for the rest of the year mid teens in the open clip and then flat in other appendage management, just want to make sure that we.

Speaker Change: Understand some of those puts and takes.

Angela L. Wirick: Marie, you are directionally correct on the revenue components, the open AtriClip business, just under $28 million, and the MIS Appendage Management business, a little over $8 million for the quarter at the $35 point, you know, close to $36 million for the quarter. We did actually see our MIS Appendage Management business go down, though, which is largely driven by the Lariat product.

Speaker Change: Murray you are directionally correct on the revenue components, the opened a chocolate business.

Speaker Change: Just under $28 million in the M. I S appendage management business, a little over $8 million for the quarter at 35.

Speaker Change: Close to $36 million for the quarter.

Speaker Change: We did actually see our M. I S. Appendage management business go down that is largely driven by the lariat product or Q1 of last year was kind of an outsized quarter and we have just very few customers. So activity within a pretty small base of customers can skew the results there and following a pretty strong fourth quarter for our Mash's clip.

Angela L. Wirick: Our Q1 of last year was kind of an outsized quarter, and we have just a few customers, so activity within a pretty small base of customers can skew the results there. And following a pretty strong fourth quarter for our MIS AtriClip, we saw a bit of softness in that area of the business in the first quarter. I'd say longer term I would expect Lariat to not be a big driver behind, you know, fluctuations either positive or negative, just based on the comparable quarters in 2023.

Speaker Change: We saw that softness in that area of the business in the first quarter.

Speaker Change: I'd say longer term would expect Larry it to not be a big driver behind fluctuations either to the positive or negative just based on the comparable quarters in 2023.

Angela L. Wirick: And when we think about our MIS AtriClip business, we're still seeing really strong attachment in our hybrid procedures, and I would expect, as you continue to see strong results within our MIS Abolition business, for that to be a bit of a carryover, but in the longer term, I think you'll probably see more of what we've seen in the past from that particular franchise, meaning our Appendage Management franchise. The growth typically has been driven more by the open side of the business, but I think that there's a pathway, given the adoption and trends that we're seeing in MIS Abolition, to see an uplift on our MIS AtriClip in the future.

Speaker Change: When we think about our MSA chocolate business, we're still seeing really strong attachment in a hybrid procedures and would expect as you continue to see strong results within.

Speaker Change: M I S ablation business for that to be a bit of a carry but in the longer term I think you'll see probably more of what we've seen in the past from that particular franchise, meaning our appendage management franchise. The growth typically has been driven more by the open side of the business, but I think that there's a pathway given the adoption and trends that we're seeing in mis ablation to see.

Speaker Change: Uplift on our MSH flip in the future.

Marie Yoko Thibault: Okay, that's really helpful, Angie. Thank you.

Speaker Change: Okay. That's really helpful. Andrew. Thank you and then I wanted to ask about open ablation.

Michael H. Carrel: And then I want to ask about open ablation. That segment was, again, really strong here in the U.S. You know, I think, as of the latest, about half or more of it was the U.S. business was Encompass Clamp. Can you give us an update on the pace of adoption of that new-ish system? It does seem like there's more runway ahead, and I recall there was some price uplift as well, but just wondering where you are on the adoption curve and what growth drivers there are for the volume side. Thanks.

Speaker Change: That that segment was again really strong here in the U S.

Speaker Change: Yes.

Speaker Change: I think as of the latest about half or more of it was of the U S business with encompass clamp can you give us an update on the pace of adoption of that new ish system. It does seem like there's more runway ahead and I recall, there was some price uplift as well, but just wondering where you are in the adoption curve and what growth drivers are there for them.

Speaker Change: On the volume side. Thanks.

Michael H. Carrel: All right. So, another great product here with the Encompass Clamp. It's still a little bit under 50% of the revenue in the first quarter, and we think we're still in pretty early innings when it comes to adoption. For the quarter, over 450 accounts were users of that device, up from the fourth quarter and up from each quarter in 2023. When you think about the kind of number of accounts that we've got in the U.S. in terms of users on our open side, there are still plenty of accounts to bring this to.

Speaker Change: Alright, so another great product here with the encompass clamp. It you are it's still a little bit under 50% of the revenue in the first quarter and we think we're still in pretty early innings. When it comes to adoption are encompassed plant.

Speaker Change: Quarter over 450 accounts for users of that device up from the fourth quarter and up from each quarter. In 2023. When you think about the kind of number of accounts that we've got in the U S. In terms of users on our open side.

Michael H. Carrel: And I'd say even with an existing account, plenty of doctors and surgeons that we could be using the product as well. So that's what we're really targeting in terms of our efforts on the Encompass Clamp rollout. The open chest market, so our cardiac surgery market, still remains vastly underpenetrated. So while we've seen great traction with this device, we sit here today and say there's still plenty of room to grow and are really targeting new users and making sure that adoption happens for every patient that's on the table.

Speaker Change: Still plenty of accounts to bring this to and I'd say, even within existing accounts plenty of doctors surgeons that we could could be using that product as well. So that's what we're really targeting in terms of our efforts on the encompass clamp rollout.

Speaker Change: The open chest markets, our cardiac surgery market still remains vastly underpenetrated. So while we've seen great traction with this device we sit here today and say theres still plenty of room to grow and are really targeting on new users and making sure that adoption happens for every patient that's on the table.

Speaker Change: Yeah.

Speaker Change: Thank you.

Operator: Thank you. One moment for our next question. Our next question comes from Matthew O'Brien with Piper Sandler. Your line is open.

Speaker Change: Thank you one moment for our next question.

Speaker Change: Our next question comes from Matthew O'brien with Piper Sandler Your line is open.

Matthew O'brien: Hi, this is Sam Eiber. Our questions. First, if we could ask a little bit more about the guidance and what that implies for the rest of the year and then also maybe what we can expect sequentially throughout the rest of 2024.

Speaker Change: Hi.

Matthew O'brien: And a question.

Matthew O'brien: First if we can ask a little bit more about the guidance and what that implies for the rest of the year and then also maybe what we can expect sequentially throughout the rest of 2024.

Sam Shimon Eiber: Hey, Sam, we caught the back part of your question. Can you repeat the first part?

Matthew O'brien: Hey, Sam we caught the back part of your question can you repeat the first part.

Sam Shimon Eiber: Sure, yes, I'm just asking about what guidance is implied for the rest of the year.

Sam: Sure Yeah, just asking about what guidance.

Sam: Imply for the rest of the year.

Angela L. Wirick: Oh, okay. Sorry. Thanks. Thanks for repeating that.

Speaker Change: Oh, Okay, sorry, thanks, Thanks for repeating that like we said in the prepared comments our expectation is just given I would say the stability that we're seeing in end user markets. Both in the U S and internationally that we would expect some of the historical patterns that <unk> seen in the business in the past to be present, when you think about sequential growth so that means kind of mid.

Speaker Change: To upper single digit growth from the first to the second quarter of 2024, and again reaffirming the guidance for the full year of the 15% to 17% driven by that you know the whole business.

Angela L. Wirick: Like we said in the prepared comments, our expectation is, just given, I'd say, the stability that we're seeing in end-user markets, both in the US and internationally, that we would expect some of the historical patterns that you've seen in the business in the past to be present when you think about sequential growth. So that means kind of mid to upper single-digit growth from the first to the second quarter of 2024. And again, reaffirming the guidance for the full year of 15 to 17% driven by the full business.

Speaker Change: As we think through that and take to those numbers I think you know understand the interest in each of the components of the business and how that they'll drive I think we've been.

Speaker Change: Youre aware that the company over all of the different growth drivers has been able to to promote very robust growth at HL care and deliver in both meet and exceed our guidance as we've operated throughout the year and we have the same expectations as we think through kind of the operations of the remainder of the year.

Angela L. Wirick: And as we think through that and think through those numbers, I think, you know, understand the interest in each of the components of the business and how they'll drive it. I think we've been, you know, you're aware that the company overall, the different growth drivers have been able to promote very robust growth of AtriCure and deliver both meet and exceed our guidance as we operate throughout the year. And we have the same expectations as we think through the kind of operations for the remainder of the year.

Speaker Change: Great. Thank you and then just one more on the appendage management business also.

Sam Shimon Eiber: Great, thank you. And then just one more on the appendage management business. Also, I guess, how long do you expect this trialing to last? And I know you think this will help grow the market. You know, when do you think you could see that kick in?

Sam: Okay.

Speaker Change: How long do you expect this trial to lap them.

Speaker Change: Yeah.

Sam: That ultimately you think this will help grow the market. When do you think you could see that kick in.

Michael H. Carrel: I think that trialing is going to continue. I mean, we've got a competitor in the market, as we mentioned, and as everybody is well aware, they're going to be in the market, people are going to try them, and some are going to keep using them. And they're going to have some market share relative to that. But, as we talked about, we grew 15% in one of our largest franchises, or 15.4% in the US.

Speaker Change: Yeah, Matt I think the Trialing is going to continue on I mean, we've got a competitor in the market as we mentioned and as everybody is well aware of there going to be in the market people are going to try it and we're going to keep using it.

Speaker Change: And they're going to have some market share relative to that but as we've talked about we did we grew 15% in one of our largest franchises or 15, 4% in the U S and we haven't even kicked in a new product that's going to be introduced later on the year, and obviously leaps coming out kind of in subsequent years after that and future product iterations that we have so we.

Michael H. Carrel: And we haven't even kicked in a new product that's going to be introduced later in the year. And obviously, LEAP's coming out kind of in subsequent years after that and future product iterations we have. So we think that you're already starting to see a little bit of the benefit because they did get some share this quarter, and we still saw some solid, robust growth relative to that. So whether or not we're going to see kind of an uptick on that, we're not going to put that out there right now. I do think that the LEAP trial in the long term plus continued innovation will drive this market up for a long period of time.

Sam: Think that youre already starting to see a little bit of the benefit because they did get some share this quarter and we still saw some some solid robust growth relative to that so.

Sam: Whether or not we're going to see kind of uptick on that we're not going to put that out there right now.

Sam: I do think that the leaps trial long term plus the continued innovation will drive this market out for a long period of time.

Sam: Okay.

Speaker Change: Great. Thank you.

Operator: Thank you. One moment for our next question. Our next question comes from Danielle Antalffy with UBS. Your line is open.

Speaker Change: Thank you one moment for our next question.

Speaker Change: Our next question comes from.

Speaker Change: Danielle <unk> with UBS Your line is open.

Danielle Joy Antalffy: Hey guys, thanks so much for taking the question. Mike, you're going to be so sick of talking about AtriCure after this call, but I am going to ask one more question here, and I'd love a little bit, if you could, more color on where you see the most adoption. I mean, I know Medtronic has barely any presence on the open ablation side of things, but they do have some legacy users there. Is it adoption in open procedures where an AtriCure ablation is being done? Like, is it broad-based trialing, or is it more specific to one area versus one product than another?

Danielle: Hey, guys. Thanks, so much for taking the question.

Speaker Change: Yes.

Danielle: Mike Youre going to be so sick of talking about EG Becker temperature. After this call, but I am going to ask one more question and I'd love a little bit if you could more color on where you see.

Michael H. Carrel: The most adoption I mean, I know Medtronic has barely any presence on the open ablation side of things, but they do have some legacy users there.

Michael H. Carrel: Is it adoption in <unk>.

Michael H. Carrel: Procedures, where nature cure ablation is being done like is it broad based is trialing or is it more specific to one area versus one product.

Michael H. Carrel: Other.

Michael H. Carrel: And maybe to be clear, I mean, they're trying everywhere. I mean, it's all over the country. It's so you're definitely seeing them in markets in almost every market around the country. I would gather that most of it has to do with good relationships. Medtronic has some good relationships at accounts.

Michael H. Carrel: Yeah.

Michael H. Carrel: And maybe to be clear I mean, theyre trailing everywhere I mean, it's all over the country. It's.

Speaker Change: So youre definitely seeing them in markets.

Speaker Change: Almost every market around the country.

Speaker Change: Gathered that most of it has to do with good relationships Medtronic has some good relationships at accounts, that's probably where they have targeted first and gotten into it in terms of where we've noticed but of course, it's definitely happening in.

Michael H. Carrel: That's probably where they've targeted first and gotten into in terms of where we've noticed. But of course, it's definitely happening in procedures where AtriCure's got an ablation going on, and then they're testing out and using the Medtronic product on that front. So we definitely see it there, but it's happening everywhere. I mean, they've done a full launch on it. They've talked about it. They've marketed for it. And so we see them all across the country.

Michael H. Carrel: Procedures, where <unk> got an ablation going on in there.

Michael H. Carrel: Testing out and using the Medtronic product on that front. So we definitely see it there, but it is happening everywhere and they've done a a full launch on that they've talked about it a bit marketed to it.

Michael H. Carrel: And so we see them all across the country.

Danielle Joy Antalffy: Okay, got it. Um, so it doesn't sound like there's any difference in your use and procedures being done where an AtriCure open ablation is also being done. It sounds like you're seeing some docs pick up appenditure in that procedure as well.

Speaker Change: Okay got it.

Speaker Change: So it doesn't sound like there's any difference.

Michael H. Carrel: Just curious using procedures being done where are nature. Your open ablation also being done it sounds like youre seeing some docs pick up appendage or in that procedure as well.

Michael H. Carrel: That will happen, for sure. Yep. Yep. OK. All right. And one quick follow-up on Scourge.

Michael H. Carrel: That does happen for sure.

Speaker Change: Yes, Okay, Alright, and then one quick follow up on for Jimmy and another really good quarter. So just trying to get a sense of how much of this is new center adds versus same store sales I think you guys have talked about.

Danielle Joy Antalffy: I mean, another really good quarter. So just trying to get a sense of how much of this is new center ads versus same-source sales. I think you guys have talked about new center ads, sort of. Not as much of a focus, more focused on driving adoption higher at existing centers. Can you talk about whether that continues? Are you seeing more new centers come on board? Any color there? That would be great. Thanks so much.

Michael H. Carrel: New center adds.

Michael H. Carrel: Sort of.

Michael H. Carrel: Not as much of a focus more focused on driving adoption higher at existing centers can you talk about whether that continues or you're seeing more new centers come onboard any color there that would be great. Thanks, so much.

Michael H. Carrel: Yeah, Danielle, I'd say across the board that the new centers add very little revenue to any individual quarter, and that's true to a T for each of the franchises.

Speaker Change: Yes, Daniel I say across the board the new centers at very little revenue to any individual quarter and thats to a tee for each of the franchises what I think about each each area of the business. We do continue to add accounts I would say in some places like our pain management business at a much faster pace and other areas like our.

Angela L. Wirick: When I think about each area of the business, we do continue to add accounts in some places, like our pain management business, at a much faster pace than other areas, like our EpiSense accounts. That being said, we are adding new accounts just at a slower pace. So the revenue that you're seeing in the first quarter of 2024 is largely from existing customers with some incremental pieces from newer accounts that, over time, will become a much higher revenue contribution.

Michael H. Carrel: <unk> accounts that being said, we are adding new accounts just at a slower pace. So the revenue that youre seeing in the first quarter of 2024 is largely from existing customers with some incremental pieces from newer accounts that over time will become a much higher revenue contribution.

Speaker Change: Thank you.

Operator: Thank you. One moment for our next question. Our next question comes from... Daniel Stauder with Citizens JMP. Your line is open.

Speaker Change: Thank you one moment for our next question.

Speaker Change: Our next question comes from.

Speaker Change: Daniel starter with citizens JMP Your line is open.

Daniel Walker Stauder: Yeah, thanks. So it's my first one for international sales. You know, Encompass Clamp has its European launch later this year, and then I think you said EpiSense will also be introduced internationally, and you're coming off, you know, a strong growth year outside the U.S. in 2023. So just wanted to ask, how should we be thinking about international sales contribution contributions this year, at a high level as we, you know, model and throughout the year?

Daniel Walker Stauder: Yes. Thanks. So this is my first one just on international sales.

Daniel: Compass client patents European launch later this year and then I think you said Epicentral also be introduced internationally.

Daniel: And youre coming off a strong growth year outside the U S.

Daniel: 2023, so just wanted to ask how should we be thinking about international sales contribution contributions this year.

Daniel: High level.

Daniel: Modeling throughout the year.

Angela L. Wirick: Yeah, Danny, when we look at our international business, we're really pleased with the developments and, you know, the activities of that team over the past several years, leading to an accelerated growth rate. You saw that throughout 2023. And that repeated in this first quarter to start 2024.

Speaker Change: Yes, Danny when we look at our international business, just really pleased with the developments and the activities of that team over the past several years, leading to an accelerated growth rate you saw that throughout 2023 and that repeated in this first quarter to start 2024, our expectations are both of those products the <unk>.

Angela L. Wirick: Our expectations are for both of those products, the steerable EpiSense device. We do have the original EpiSense device on the market, but the steerable device, the EpiSense ST, is right now in the process of a launch. We expect that to be a nice catalyst for that business where, you know, they just have done very much fewer converged procedures. So we're hoping that that's a nice catalyst for that area of the business. And then the Encompass clamp, you know, our hope is that that's much later in 2024, once we've gone through EMDR approval and are ready to launch on that.

Speaker Change: <unk> <unk> device, we do have the original IP sense device on the market, but this terrible device Cfe sense S. T is right now in the process of a launch we expect that to be a nice catalyst for that business, where they've just have done very much fewer converge procedures. So we're hoping that that's a nice catalyst for that.

Daniel: Area of the business and then the encompass clamp you know our hope is that that's much later in 2024 once we've been through E. M D. Our approval.

Angela L. Wirick: But our hope is that that's a really solid catalyst for our open ablation business, much like you've seen here in the US. I think we're all aware that pricing is a little bit more sensitive in the international markets, but I think ease of use of the device and the differentiated technology give us a lot of confidence that this is going to be, you know, a really great product for that market. So longer term, we've said, look, US and international generally at the same growth rates, I think you've got a lot of reasons based on historical performance and some of the catalysts in our international markets to say that that might be, you know, a bigger leading edge of growth.

Daniel: And ready to launch on that but our hope is that that's a really solid catalyst for our open ablation business much like you've seen here in the U S. I think we're all aware that pricing, but a bit more sensitivity in the international markets, but I think ease of use of the device and the differentiated technology gives us a lot of confidence that this is going to be.

Daniel: Really great product for that market. So longer term, we said look U S and international generally at the same growth rates I think you've got a lot of reasons based on historical performance in some of the catalysts in our international markets to say that that might be a bigger leading edge of growth.

Daniel Walker Stauder: Great, and then just one follow-up on the pain management side. You know, you've talked about the plus and the max helping with the time aspect, but just wanted to ask more about, you know, progress in getting direct reimbursement. I know there are a handful of studies in this area, but what, in your mind, moves the needle in terms of getting reimbursement for these products?

Speaker Change: Great and then just one follow up on the pain management side.

Michael H. Carrel: Thanks.

Daniel: You talked about the plus and the Max helping with the time aspect, but just wanted to ask more about your progress in gaining direct reimbursement.

Daniel: I know, there's a handful of studies in this area, but what in your mind Neil in terms of gaining reimbursement for these products.

Michael H. Carrel: I think the key to reimbursement for pain management is clinical data, clinical evidence showing a combination of cost savings in some way, whether it's length of stay or fewer calls or return visits back to the ER and hospital. That happened a lot in some of these cases because of the pain that somebody experiences two, three, four weeks out, which is, quite frankly, really helped out by the use of our crown nerve block.

Daniel: I think the key to reimbursement on pain management is clinical data clinical evidence showing a combination of cost savings.

Daniel: In some way whether its length of stay or fewer calls or return visits back to the ER and hospital that happened a lot in some of these cases because of the pain that somebody experiences to <unk>.

Daniel: Three four weeks out that is quite frankly really helped out by the use of our cryo nerve block. In addition to that if there are studies that are being done to kind of demonstrate the true reduction in opioid use.

Michael H. Carrel: In addition to that, if there are studies that are being done to kind of demonstrate the true reduction in opioid use afterwards. We've seen some studies, but I think you've got to have enough studies that are out there. We funded a lot of these studies. It's going to take some time, though. We saw that in cardiac surgery. It took us about eight years, and I know that sounds like a really long time, but through papers that were written over time that were studied to show the benefits of treating AFib at the time of cardiac surgery, you're now starting to see CMS, in the last two years, increase reimbursement quite dramatically for that. And I believe the same thing will happen eventually for pain management, but we just need a lot more studies to be done, and we're helping fund a lot of them.

Daniel: <unk>, we've seen some studies, but I think you've got to have enough.

Daniel: <unk> studies that are out there we funded a lot of these studies.

Daniel: It's going to take some time that we saw that in cardiac surgery. It took us about eight years and I know that sounds like a really long time, but through papers that were written over time that were studied to show the benefits of treating afib at the time of cardiac surgery. You are now starting to see CMS over the last two years increased reimbursement quite dramatically for that and I believe the same thing.

Daniel: Will happen eventually.

Daniel: <unk> pain management, which need a lot more studies to be done and we're helping fund a lot of those.

Speaker Change: Great. Thank you very much.

Speaker Change: Thank you one moment for our next question.

Speaker Change: Okay.

Operator: Great, thank you very much. Thank you. One moment for our next question. Our next question comes from Mike Matson with Needleman Company. Your line is open.

Speaker Change: Our next question comes from Mike Matson with Needham <unk> Company. Your line is open.

Michael Stephen Matson: Yeah, thanks. So Mike, when you were at our conference a few weeks ago, you mentioned that you were working on launching or developing, I guess, clamps that would use PFA for open ablation. I just wanted to see if you could give us an update on that, kind of any timing and what would be required. Is it a new clamp or is it just a new generator?

Michael Stephen Matson: Yes. Thanks.

Michael Stephen Matson: So Mike when you were at our conference a few weeks ago, you mentioned that you're working on watch anything for developing I guess clamps that would use PFA for open ablation.

Michael Stephen Matson: Wanted to see if you could give us an update on that.

Michael Stephen Matson: Kind of any timing.

Michael Stephen Matson: And what would be required.

Michael Stephen Matson: A new clamp or is it just the new generator.

Michael H. Carrel: As we did mention briefly, we have been working on work in that particular area to get a combination of generator and clamp and, quite frankly, other technologies as well to be distributed across our product line. No update on timing. I mean, we believe that we need to have all of the energy sources available for our customers.

Michael Stephen Matson: Okay.

Michael Stephen Matson: And as we did mentioned briefly.

Michael Stephen Matson: We have been working on.

Michael Stephen Matson: Work in that particular area to get a combination of generator and clamp and quite frankly other technologies as well to.

Michael Stephen Matson: To be distributed across our product line no update on timing I mean, we believe that we need to have all of the energy sources available for our customers and so we think PFA is an exciting new technology that we're going to make sure that we have incorporated into the procedures that we've basically been a partner for many many years.

Michael H. Carrel: And so we think PFA is an exciting new technology that we're going to make sure that we have incorporated into the procedures that we've basically been a part of for many, many years. But it's too early to give any kind of specific updates on what that looks like. A product like that's going to have to go through some clinical work and regulatory work, et cetera, so there's definitely work to be done on that front. But from a product standpoint, we've made a lot of progress.

Michael Stephen Matson: It's too early to give any kind of specific updates on what that looks like a product like that is going to have to go through some clinical work.

Michael Stephen Matson: And regulatory work et cetera. So there is definitely work to be done on that front, but from a product standpoint, we've made a lot of progress.

Michael Stephen Matson: Okay, thanks. And then just on the LEAPS trial, so obviously doing really well and rolling pretty fast.

Speaker Change: Okay. Thanks, and then just on the leaps trial, so obviously doing really well and rolling pretty fast.

Michael H. Carrel: When and if it's successful, do you think that, you know, it would create kind of a class effect and benefit any of the products, clips that are out there, or do you think it would really be just specific to your nature clip? I mean, I know you would be the one with the indication, but, you know, for stroke or, I guess, prophylactic use. Do you think that would kind of help out your competitor to any degree as well?

Michael Stephen Matson: Do you when and if it's successful.

Michael Stephen Matson: Do you think that.

Michael Stephen Matson: It would create kind of a class effect and benefit.

Michael Stephen Matson: Any of the products clips that are out there or do you think it would really be just specific to <unk> clip I mean, I know you would be the one with the indication but.

Michael Stephen Matson: For stroke, or I guess prophylactic use but.

Michael Stephen Matson: Do you think that would kind of help out your competitor or to any degree as well.

Michael H. Carrel: Well, I mean, to your point, I mean, let's start. We're investing in this trial because we believe it's the right thing to do for patient care for the long term. And number one, it's going to be our product exclusively used. So it's going to be a 6,500 patient trial.

Speaker Change: Well I mean to your point I mean, let's start I mean, we're investing in this trial because we believe it's the right thing to do for patient care for the long term.

Michael Stephen Matson: Number one it's going to be our product exclusively use so it is going to be a 6500 patient trial. The product is going to be used to get the stroke label is going to be the <unk>. That's what we will have the stroke label, our competitor products would not have that.

Michael H. Carrel: The product that is going to be used to get the stroke label is going to be the AtriClip. That's what will have the stroke label. Our competitor products would not have that. Is that a differentiator? Absolutely.

Michael Stephen Matson: There's no question about it that once we're able to get that kind of label, it should be a differentiator. However, if somebody else has a product on the market, and somebody feels like they want to use that product and believe that that product has some benefits, I'm sure there'll be some level of a class effect on that point. At that point, we're talking about 1.5 million patients around the globe that will be using some sort of clip-adjusting cardiac surgery, not including what's going to be used in any other areas.

Michael Stephen Matson: Is that a differentiator absolutely. There is no question about it that once we're able to get that kind of label. It should be a differentiator. However, if somebody else's a product on the market and somebody feels like they wanted to use that product and believe that that product has some benefits to it I'm sure there'll be some level of a class effect on that point at that point, we're talking about one point.

Michael Stephen Matson: 5 million patients around the globe that will be using.

Michael Stephen Matson: Some sort of cliff just in cardiac surgery, not including what's going to be used in any other area. So to me.

Michael Stephen Matson: So to me, obviously, you're going to have competition. I mentioned it earlier. When you build big, multibillion-dollar markets, you're going to have competition, and competition is going to get some level of share during that period of time. We saw it with TAVR. We saw it in the occlusion market. And in both those cases, they created multibillion-dollar markets, and competition was there as well. And then it becomes who's got the best clinical evidence, who's got the best product in the market. Okay, thank you.

Michael Stephen Matson: Obviously youre going to have competition I mentioned it earlier when you build big multibillion dollar markets Youre going to have competition and competition is going to hit some level of share during that period of time, we saw it in <unk>, we saw in the occlusion market and in both those cases, they've created multibillion dollar markets and the competition has been.

Michael Stephen Matson: There as well and then it becomes who's got the best clinical evidence Who's got the best product in the market.

Speaker Change: Okay. Thank you.

Operator: Thank you. One moment for our next question. And our next question comes from Suraj Kalia on behalf of Oppenheimer. Your line is open.

Speaker Change: Thank you one moment for our next question.

Speaker Change: And our next question comes from.

Michael Stephen Matson: So Robert Kelly with Oppenheimer. Your line is open.

Suraj Kalia: Mike, Angie, can you hear me all right? We can hear ya.

Robert Justin Marcus: Good morning, Angie can you hear me all right.

Robert Justin Marcus: We can hear you.

Operator: Perfect. Hey, Mike, a couple of questions your way. One is in terms of a PFA clamp. For OpenEye, I understand, but can you walk us through the...

Robert Justin Marcus: Perfect. Okay. So Mike couple of questions. Your way one is in terms of our PSC clam.

Robert Justin Marcus: For open I understand but can you walk us through the <unk>.

Suraj Kalia: I believe in your prepared remarks, you talked about the complementarity you were seeing with your existing plant with PFA catheters. You know, in long-standing persistent AF, PFA, I believe they have just started clinical trials, right? So we don't have any data yet. And I'm curious if you could just kind of thread the needle for us as to how it is complementary in terms of the clamp and BFA catheter.

Robert Justin Marcus: I believe in your prepared remarks, you talked about the complementarity you were seeing with your existing clients with PSA catheters.

Robert Justin Marcus: And long standing persistent AF.

Robert Justin Marcus: I believe they have just started clinical trials right. So.

Mike: We don't have any data yet and I'm curious if you could just kind of.

Speaker Change: Thread the needle for us too.

Speaker Change: How it is complementary in terms of the clamp NPSA catheters.

Michael H. Carrel: Yeah, the complementary aspect, think of a PFA catheter today if it's going to do the pulmonary veins. That's exactly what is being used and has been used with CONVERGE. When you do a CONVERGE procedure and you do a lot of back wall ablation, in our trial, it was RF. In our upcoming trial and a lot of the usage today, it's with cryo doing just the PVI on it and kind of finishing out the veins. PFA can be used very similarly to that.

Speaker Change: Yes, the complimentary aspect to think of a PSA catheter today, if it is going to do the pulmonary veins thats exactly what is being used and has been used with converge. When you do a converged procedure and you do a lot of the back wall ablation.

Speaker Change: And our trial it was RF and our upcoming trial in a lot of usage today, it's with cryo doing just the PDI on it and kind of finishing up the veins PFA can be used very similar to that so the EPS may choose to use that instead of using their cryo or their RF when they complemented with what they're getting from.

Michael H. Carrel: So the EPs may choose to use that instead of using their cryo or their RF when they complement it with what they're getting from the epicardial surface approach that we bring to the table. We absolutely believe, and it has been shown clinical trial after clinical trial that when you add epicardial to endocardial, you get a much more durable, long-lasting lesion, and you get almost double the success rates as a result of that.

Speaker Change: The at the cardio surface approach that we bring to the table.

Speaker Change: Absolutely believe and has been shown in clinical trial after clinical trial, but when you add up the cardio to endocardial youll get a much more durable long lasting lesion.

Speaker Change: And you get almost double the success rates as a result of that.

Michael H. Carrel: And so you're definitely starting to see people begin to use that both in Europe and in the U.S. to complement what they're doing. They're just kind of using that instead of some other catheter that they would have otherwise used when they were doing the endocardial portion.

Speaker Change: And so youre definitely youre starting to see people begin to use that both in Europe and in the U S to complement what they're doing they're just kind of using that instead of some other catheter that they would have otherwise used when theyre doing the endocardial portion.

Suraj Kalia: So, Mike, just to be clear, and forgive me for belaboring this, the argument being made is that PFA doesn't achieve transminerality.

Speaker Change: So Mike just to be clear and forgive me for belaboring. This the argument being made is that PFS doesn't achieve transmitter reality.

Michael H. Carrel: No, no, I'm not saying PFA. What I'm suggesting is PFA works incredibly well, and we've seen the data from the results in these, and most of them have been for the pulmonary veins. And so Converge does a really good back wall ablation to areas that catheters don't typically get to or get to very well, and that they can't get transmural for a variety of reasons, some of which is the safety reasons, some of which is that there are fat paths and other things, and there are differences between the epicardial surface and the endocardial surface, where the epi and the endo together get a much better result.

Mike: No no I'm, not saying what im suggesting is.

Mike: <unk> works incredibly well and we've seen the data from the results in these and most of them have been for the pulmonary veins and so converge does a really good backlog ablation to areas that catheter is don't typically get to where it gets you very well.

Speaker Change: And that they can't get Trans Mero for a variety of reasons some of which is the safety reasons. Some of which is that there are fat pads and other things and there are differences between the epicardium servicing the endocardial surface, where the <unk> and the <unk> together get a much better results.

Michael H. Carrel: The endocardial products do very well in the pulmonary veins, as you well know, Suraj. And so I'm not saying that they don't get transmural. They get transmural in the veins, for sure. And we've seen that. And I think you've seen that with the PFA technology, that they've been doing a very good job in the veins, for sure.

Speaker Change: The endocardial products do very well doing the pulmonary veins as you well know suraj and so I'm not saying that they don't get trans Merrell, they get trends Merrell and <unk> for sure.

Speaker Change: We've seen that and I think you've seen that with the PFA technology that they've been doing a very good job on the veins for sure.

Suraj Kalia: Got it. And Mike, I know, forgive me, I have to ask, did you quantify the impact of Lariat in the quarter? Obviously, Lariat is MIS, you have Atriclip MIS, you have Atriclip open, and then Tenditure open. Just kind of quantifying these two buckets, what impact did you see from, let's say, from Penditure for Open and Lariat for MIS?

Suraj: Got it and Mike I know.

Speaker Change: Forgive me I have to ask could you quantify that.

Suraj: Impact of Lariat in the quarter, obviously, Larry It is mras you have atrial fib.

Speaker Change: <unk> open and then <unk> open.

Speaker Change: Just kind of quantifying these two buckets what impact you all saw from let's say from <unk>.

Speaker Change: For open and Larry yet for us. Thank you for taking my questions.

Angela L. Wirick: Yeah, Suraj, on the Lariat question, it's roughly 50 basis points of growth impact for the company overall for the quarter when you exclude Lariat. Again, it was an outsized kind of Q1 in 2023. And we saw a decline throughout 2023, and just a very soft first quarter, again, a very limited number of users with this particular product, supported by a 510k clearance, but not other clinical data otherwise. And on the open AtriClip side of our business, I just want to reiterate that we drove growth of 15.4% for the quarter and feel really good about those results.

Larry: Yes, suraj on the Larry a question, it's roughly 50 basis points of growth impact for the company overall for the quarter. When you exclude blurry. It again it was an outsized kind of Q1 in 2023, and we saw a decline throughout 2023 and just a very soft first quarter again are very limited.

Michael H. Carrel: I'm showing no further questions at this time. I would now like to turn it back to Mike Carroll, President and Chief Executive Officer, for closing remarks.

Speaker Change: <unk> of users with this particular product supported by a five 10-K clearer.

Speaker Change: Clearance, but not not other clinical data otherwise.

Speaker Change: The open clip side of our business just would reiterate that we drove growth of 15, 4% for the quarter and feel really good about those results.

Speaker Change: Okay.

Speaker Change: Thank you.

Speaker Change: Thank you.

Speaker Change: I am showing no further questions at this time I would now like to turn it back to Mike Carrel, President and Chief Executive Officer for closing remarks.

Operator: Great. Thank you again everyone for joining us on the call today. Another great quarter for AtriCure and I enjoyed the question and answer session here. Everybody have a great evening. Bye now.

Operator: This concludes today's conference call. Thank you for participating. You may now disconnect.

Michael H. Carrel: Great. Thank you again, everyone for joining us on the call today, another great quarter for <unk> and enjoyed the questions and answer session here everybody have a great evening bye now.

Michael H. Carrel: Okay.

Speaker Change: This concludes today's conference call.

Speaker Change: Thank you for participating you may now disconnect.

Speaker Change: Okay.

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