Q3 2025 CVRx Inc Earnings Call

Speaker #3: Greetings and welcome to the CVR . Third quarter 2020 Earnings Conference Call . At this time , all participants are in a listen only mode .

Speaker #3: A brief question and answer session will follow the formal presentation . If anyone should require operator assistance during the conference , please press Star Zero on your telephone keypad .

Speaker #3: As a reminder , this conference is being recorded . It is now my pleasure to introduce your host , Mike Vallely from ICR healthcare .

Speaker #3: Thank you sir . You may begin .

Speaker #4: Good afternoon . Thank you for joining us today for CBR . Third quarter 2020 Earnings Conference Call . Joining me on today's call are the company's president and chief Executive officer , Kevin Hykes .

Speaker #4: And Chief Financial Officer Jared Oasheim . The remarks today will contain forward looking statements , including statements about financial guidance . These statements are based on plans and expectations as of today , which may change over time .

Speaker #4: In addition , actual results could differ materially due to a number of risks and uncertainties , including those identified in the earnings release issued prior to this call and in the company's SEC filings .

Speaker #4: I would now like to turn the call over to CVR President and Chief Executive Officer Kevin Hykes .

Speaker #5: Thanks , Mike . Good afternoon , everyone , and thank you for joining our third quarter earnings call . Q3 was a strong quarter for CVR .

Speaker #5: We grew revenue by double digits year over year and expanded our commercial footprint . Our newer reps are hitting their stride , driving procedure volumes and building productive relationships with the physicians and apps that manage heart failure .

Speaker #5: Patients in the community . Let me remind you of our three strategic priorities for 2025 . Our first priority is building a world class sales organization that develops sustainable programs with deep therapy , adoption .

Speaker #5: Our sales force transformation is progressing well and turnover is returning to more normal levels . The first wave of the sales reps hired earlier this year are getting up to speed and making meaningful contributions .

Speaker #5: We will continue hiring high quality talent , but at a more measured pace that aligns with our territory . Expansion plans rather than the accelerated hiring that was needed to support the transformation .

Speaker #5: With this foundation in place , we're now concentrating on onboarding the new reps and accelerating their path to productivity . Second , we are targeting centers with the highest potential for sustainable programs and implementing a best practice playbook to drive deep therapy adoption .

Speaker #5: Our refined approach to account targeting guides our expansion strategy , focusing on high potential tier one and tier two accounts . That being said , we're also selectively pursuing pragmatic opportunities in tier three and four accounts where we see committed physician champions , administrative support , and the right fundamentals .

Speaker #5: We added ten net new centers this quarter and are seeing traction with this approach . Our top accounts are demonstrating the deepening adoption that is the hallmark of an established program .

Speaker #5: More than 20% of our active and planning centers achieved three or more implants in Q3 , and our highest performing sites are now implanting more than ten patients per quarter .

Speaker #5: This demonstrates what is possible when committed physician champions and strong institutional support come together . Our third priority is addressing the primary barriers to the adoption of Steam therapy by improving patient access , expanding therapy awareness , and building out our portfolio of clinical evidence .

Speaker #5: As it relates to patient access , we are making headway on multiple fronts . In July , CMS proposed maintaining Barrow steam in New technology .

Speaker #5: APC 1580 . With payment of approximately $45,000 for procedures performed in the outpatient setting . The second rule , proposed in July and finalized on October 31st , is our transition to a category one CPT code , effective January 1st of 2026 .

Speaker #5: The category one designation eliminates the experimental and investigational denials regularly seen with category three CPT codes , improves prior authorization predictability and throughput , and ensures that physicians are paid fairly and consistently for the procedure .

Speaker #5: On the coverage front , we are continuing to see encouraging trends and positive support from Medicare . Medicare Advantage and commercial payers . Taken as a whole , these reimbursement advancements are creating an increasingly solid foundation for patient access and facilitate our work to move neurostim toward standard of care .

Speaker #5: Our awareness efforts are focused on educating clinicians on the appropriate role of Barrow Steam therapy in the treatment of heart failure . We are engaging more deeply with the networks of referral physicians that surround our targeted centers through expanded national , regional and local medical education programs .

Speaker #5: Beyond these , physician focused programs , we've continued to expand our engagement with advanced practice providers or apps with a significant number of app specific educational programs completed year to date .

Speaker #5: These events are driving substantial interest and awareness in Barrow steam therapy . Among community based apps who manage most of our indicated heart failure patients .

Speaker #5: On a day to day basis . During the quarter , we also had a significant presence at the Heart Failure Society of America meeting , one of the largest global heart failure conferences where we hosted a multidisciplinary symposium with over 125 attendees .

Speaker #5: Our clinical evidence portfolio supporting Barrow therapy continues to grow , and we are seeing an increasing flow of independent , peer reviewed publications being submitted from our implanting centers and reporting positive patient outcomes .

Speaker #5: Recently , we've seen single center studies showing significant improvements in Barrow in patients , including a reduction in hospitalizations , reduced arrhythmia burden , and a positive impact on the ability to uptitrate and optimize guideline directed medical therapy .

Speaker #5: Also , our discussions with FDA around a potential new randomized controlled trial are progressing positively . We submitted our IDE application in mid-October and expect to receive feedback from FDA in late November .

Speaker #5: If we can reach agreement with FDA on the IDE protocol . We will then approach CMS to apply for category B IDE coverage .

Speaker #5: A second and necessary condition in order for us to move forward with the trial , we're pleased with our third quarter performance . The momentum we're building reflects our investments in team development and go to market execution with an increasingly broad and strong contribution across our account and territory base .

Speaker #5: In fact , in the third quarter , we had more sales reps contributing implants than in any quarter in the company's history . We're seeing the consistent , methodical progress needed to establish Barrestin as a standard of care for heart failure patients .

Speaker #5: Now , I'd like to turn the call over to Jared for a financial review .

Speaker #6: Thanks , Kevin . Let me walk through our third quarter financial results . Revenue was $14.7 million for the three months ended September 30th , 2025 , an increase of $1.3 million , or 10% , over the three months ended September 30th , 2020 .

Speaker #6: For revenue generated in the US was $13.5 million for the three months ended September 30th , 2025 . An increase of $1.2 million , or 10% , over the three months ended September 30th , 2020 .

Speaker #6: For revenue units in the US totaled 420 and 394 for the three months ended September 30th , 2025 and 2024 , respectively . The increases were primarily driven by continued growth in the US heart failure business .

Speaker #6: As a result of the expansion into new sales territories , new accounts , and increased physician and patient awareness of Barrow Steam . As of September 30th , 2025 , the company had a total of 250 active , implanting centers in the US , compared to 240 as of June 30th , 2025 .

Speaker #6: Active implanting centers are customers that have completed at least one commercial heart failure implant in the last 12 months . The number of sales territories in the US increased by three to a total of 50 during the three months ended September 30th , 2025 .

Speaker #6: Revenue generated in Europe was $1.2 million for the three months ended September 30th , 2025 , an increase of $0.1 million , or 12% , over the three months ended September 30th , 2020 .

Speaker #6: For . Total revenue units in Europe decreased to 50 for the three months ended September 30th , 2025 , compared to 56 in the prior year period .

Speaker #6: The number of sales territories in Europe remained consistent at five for the three months ended September 30th , 2025 . Gross profit was $12.8 million for the three months ended September 30th , 2025 , an increase of $1.5 million , or 15% , over the three months ended September 30th , 2020 .

Speaker #6: Four . Gross margin increased to 87% for the three months ended September 30th , 2025 , compared to 83% for the three months ended September 30th , 2020 .

Speaker #6: For . Gross margin for the three months ended September 30th , 2025 was higher due to an increase in the average selling price and a decrease in the cost per unit , primarily due to an increase in manufacturing efficiencies , R&D expenses increased $0.6 million , or 26% , to $3.1 million for the three months ended September 30th , 2025 , compared to the three months ended September 30th , 2020 .

Speaker #6: For . This change was driven by a $0.5 million increase in compensation expenses and a $0.2 million increase in consulting expenses , partially offset by a $0.2 million decrease in clinical trial expenses .

Speaker #6: SG&A expenses increased $0.2 million , or 1% , to $21.9 million for the three months ended September 30th , 2020 . Five , compared to the three months ended September 30th , 2020 .

Speaker #6: For . This change was primarily driven by a $0.2 million increase in consulting expenses , a $0.2 million increase in travel expenses , and a $0.2 million increase in non-cash stock based compensation expense , partially offset by a $0.2 million decrease in advertising expenses and a $0.2 million decrease in compensation expenses .

Speaker #6: Interest expense increased $0.5 million for the three months ended September 30th , 2020 . Five , compared to the three months ended September 30th , 2020 .

Speaker #6: Four . This increase was driven by the interest expense on higher levels of borrowings under the Term Loan Agreement with Innovative Capital Partners .

Speaker #6: Other income , net was $0.9 million for the three months ended September 30th , 2024 and 2025 . These balances consisted of interest income on our interest bearing accounts , net loss was $12.9 million , or $0.49 per share , for the three months ended September 30th , 2025 , compared to a net loss of $13.1 million , or $0.57 per share , for the three months ended September 30th , 2020 .

Speaker #6: Four . Net loss per share was based on 26.2 million weighted average shares outstanding for the three months ended September 30th , 2025 , and 22.8 million weighted average shares outstanding for the three months ended September 30th , 2024 .

Speaker #6: As of September 30th , 2025 , cash and cash equivalents were $85.1 million . Net cash used in operating and investing activities was $10 million for the three months ended September 30th , 2025 , compared to $10.4 million for the three months ended September 30th , 2020 .

Speaker #6: Four . Now , turning to guidance for the full year of 2025 , we now expect total revenue between $55.6 million and $56.6 million , compared to prior guidance of 55 million to $57 million .

Speaker #6: We now expect full year gross margin between 85% and 86% compared to prior guidance of 83% to 84% , and we now expect operating expenses between 98 million and $99 million compared to the prior guidance of 96 million to $98 million .

Speaker #6: For the fourth quarter of 2025 . We expect to report total revenue between $15,000,016 million . One additional note is that our existing registration statement is scheduled to expire on November 15th , 2025 .

Speaker #6: As part of good Corporate Housekeeping , we plan to refresh our registration statement in connection with the filing of our Q3 10-q , which is expected to be filed tomorrow morning .

Speaker #6: With that , I'll now turn the call back over to Kevin for closing remarks .

Speaker #5: Thank you, Jared. Looking ahead, we now have the fundamentals in place to positively impact the lives of a meaningful number of heart failure patients and to create significant value in doing so.

Speaker #5: Our sales team is becoming more productive , and we're seeing positive signals from payers across the board . Our clinical evidence is expanding and our awareness efforts are gaining traction .

Speaker #5: Financially , we're demonstrating improving operating leverage in our business model as we scale . Combined with our strong cash position , this gives us the resources and runway necessary to execute our strategy .

Speaker #5: Now , I'd like to open the line for questions . Operator .

Speaker #3: Thank you . We will now be conducting a question and answer session . If you would like to ask a question , please press star one on your telephone keypad .

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Speaker #3: While we pull for questions . Our first question comes from John Young with Canaccord Genuity . Please proceed with your question .

Speaker #7: Hi , Kevin , thanks for taking my question and congratulations on the quarter . To start on the guidance . I appreciate the narrowed range , but perhaps you could walk us through why you cut the higher end , given that it sounds like reps are starting to hit their stride from your commentary .

Speaker #7: Are you expecting more of a benefit in 2026 than from there ? Productivity . Is there anything you're seeing today in the business that led to that as well ?

Speaker #7: Thank you .

Speaker #6: Hey , John , happy to cover that one . Yeah , we were really happy with the results . We saw in Q3 .

Speaker #6: We're starting to see more of those new reps on the US side get up that productivity curve . But you know we know the work is not yet done in that arena .

Speaker #6: And we don't don't want to get too far ahead of ourselves . So the performance , you know , that we saw in Q3 , we saw that continue into October .

Speaker #6: That gives us the confidence and the guidance that we set out by raising the midpoint of the old guidance that we had previously issued.

Speaker #7: Thank you . And then just on 2026 , I'm not sure if you are willing to give any commentary yet , but it looks like the street smiling about 18.5% growth in 26 .

Speaker #7: Are you comfortable with that level at this point?

Speaker #6: Yeah , it's a good question . You know , we're coming off a year where , you know , the midpoint of the updated range will be a growth of about 10% compared to 2024 .

Speaker #6: So , you know , having that as our baseline , we're still anticipating to continue to invest in this business where we're going to be adding more sales reps , activating more territories and continuing to invest in the rest of the business .

Speaker #6: I think as we march into 2026 , you know , we're starting to target growth kind of in the mid-teens to see it accelerate from the growth rates .

Speaker #6: We're seeing in 2025 . And then eventually getting back to those longer term targets of seeing higher , higher growth rates in the mid to 20% .

Speaker #6: But that's out in 2027 and beyond .

Speaker #3: Our next question comes from Matt O'Brien with Piper Sandler . Please proceed with your question .

Speaker #8: Hi, this is Samantha on for Matt today. Thanks so much for taking our question and for a good performance in the quarter.

Speaker #8: Also wanted to touch on the productivity improvements with the sales force . You know , could you give any more color or quantification ?

Speaker #8: How many of the sales reps are kind of getting up to the productivity that you'd like to see , you know , would you say everyone's ramp just any more color there would be great .

Speaker #5: Yeah . Thanks . I'll take that . It's Kevin , so I would say we're we're pleased with what we're seeing from the new reps , particularly those we've hired in the last three quarters .

Speaker #5: As Jared mentioned in his comments, I believe more reps today are active and contributing in the quarter than we've ever seen before.

Speaker #5: So we're seeing them start to come up the curve and understand their roles and get comfortable in their territories and contribute . We're nowhere near yet seeing the full productivity that we would expect from these , these new hires .

Speaker #5: So I think there's still some work to do there . And as we've communicated in the past , depending on the background of the individual and the territory that they're assuming or building from scratch , it can take six to 9 to 12 months for them to really start to contribute .

Speaker #5: But I would say at this point , we're really pleased with what we're seeing . And no reason to think that we won't see continued improvement .

Speaker #8: That's perfect . Thanks . And one more from us . You know , it was great to see the category one code finalized in the physician fee schedule that was published just a few days ago .

Speaker #8: How should we be thinking about the reimbursement changes that are going to be implemented ? Started starting January 1st ?

Speaker #5: Sure . That's a great question . You know , I would say overall , we're thrilled with the developments over the last year in reimbursement and what we see on the on the sort of horizon , you know , we're seeing really strong support from the max for traditional Medicare , improving rates from the Medicare Advantage carriers , some really positive signals , both at the prior auth level as well as at the kind of second and third level reviews , and even at the administrative law judge level .

Speaker #5: Those are each different points during the appeals process where you challenge a payer to cover a case . And we're seeing improving trends in all those areas .

Speaker #5: You know , obviously , category one in January will be an important next step for us that eliminates the payers ability to automatically deny our prior authorizations on the basis of them being experimental .

Speaker #5: So this means as of January 1st , each authorization has to be reviewed by a human clinician . And reason must be given for why it's being denied so that I wouldn't characterize that as an immediate sort of step function change , but it will certainly , as it becomes more and more impactful as we enter the second and third quarter of the year , we will see the friction in the system reduced , and we believe it will result in higher rates of approval and shorter times to those approvals for prior authorizations .

Speaker #8: Great . Thank you .

Speaker #3: Our next question comes from Robbie Marcus with J.P. Morgan . Please proceed with your question .

Speaker #9: Hi . This is actually Rowan on for Robbie . Thanks so much for taking our question . I have a question on margins .

Speaker #9: Gross margin came in a decent clip ahead of expectations in the quarter . And I was just wondering if you can provide some further color on how much of this is due to better pricing versus some of the manufacturing efficiencies that you called out ?

Speaker #9: And is this a new steady state that we should expect heading into 2026? Just from a gross margin perspective?

Speaker #6: Yeah . Hi , Rowan , I think , you know , we tried to call it out in the earlier remarks . It is a mix .

Speaker #6: It's a bit of , you know , increased ASPs and an improvement in the cost per unit ASPs for the quarter were north of 31,000 on the worldwide basis .

Speaker #6: That's a pretty good step up from what we saw Q3 last year , where it was just below 30,000 per unit across the whole across the globe .

Speaker #6: For ASPs . But I do think the bigger chunk that that drove this improvement in Q3 margins was the cost per unit . We're continuing to build more and more units in our facility here in Minneapolis .

Speaker #6: And as a result of that , we're seeing our labor and overhead costs spread over more units . Seeing that cost come down .

Speaker #6: I think the ASP side of the house , we're not ready to just bake it in just yet . Longer term . But , you know , we do think there is promise that we could maintain these levels moving forward .

Speaker #6: And then on the cost side , we do think these are production levels that we're going to continue at or continue to increase upon .

Speaker #6: So that should give us comfort to be able to keep these costs in a similar range moving forward .

Speaker #9: Great , thanks . And I guess I also wanted to clarify a prior point that you may have made . Just kind of heading into 2026 , given the new category one code set to take effect and the favorable rates and extension of the APC payment , it also seems like you have a better grasp on on the commercial organization as you sit here today .

Speaker #9: So is it fair to say that all these kinds of developments, in conjunction, should drive an acceleration in sales growth in 2026? And could you frame that with some of the puts and takes for investors based on how you're thinking about it today?

Speaker #6: Yeah , that's a great kind of summary of what we have going into 2026 . I think , you know , part of this is we're coming off a year from 24 to 25 where we , you know , went through a sales force transformation .

Speaker #6: We really implemented this go to market strategy that was brought forward at the end of 2024 . And we're starting to see some really nice results here in the third quarter .

Speaker #6: And in driving into the end of the year . I think as we're moving into 26 , we are expecting to see a re-acceleration of growth .

Speaker #6: And as I mentioned earlier , kind of initially targeting the mid-teens for what we would expect for growth rates 26 over 2025 , but , you know , we there is potential for for exceeding those expectations .

Speaker #6: If everything lines up for us with the category one taking effect with payers moving in the right direction for prior auth approval rates and the time to those approvals .

Speaker #6: But I think the base case for us at this point is seeing that really go from about 10% to the mid-teens as we move into 2026.

Speaker #9: Great . Thank you .

Speaker #3: Our next question comes from Brandon Vazquez with William Blair . Please proceed with your question .

Speaker #10: Hey guys . Max on for Brandon . Thanks for taking the question . Kevin , you know , you mentioned you guys are focused on getting these newly hired reps up to speed more quickly .

Speaker #10: Can you just touch on how you guys are approaching that and what specifically you’re doing that’s giving you confidence that they will get up to the productivity curve quicker?

Speaker #10: And what's giving you confidence that newer reps that you hire will fall into the same playbook ? And then have a follow up .

Speaker #10: Thanks .

Speaker #5: Sure . Great question . So I would say , you know , it starts with the people that we're hiring . And as we've talked about extensively over the last 18 months , we're really trying to develop a sales team that has program development , that has market development skills , that has sort of a process driven mentality .

Speaker #5: Different than than what you'd often find in an early stage sort of startup environment or at a in a more mature industry where you're fighting for market share .

Speaker #5: So these are people that know how to develop new programs to introduce new therapies . So that's the raw material that goes into it .

Speaker #5: We've made significant investment in our sales training resources . Both the curriculum and and the experts that we've hired that train these reps and have instituted a much more deliberate and systematized sales training process that we believe compresses their time to comfort with our therapy and with their territories and with the process necessary to open up sustainable system account .

Speaker #5: And that differs by person , of course , but we're pleased with what we're seeing , and we're pleased , you know , anecdotally at least today , to see some of these reps getting up to speed much faster than has historically been the case .

Speaker #5: And it's probably a combination of all those things . And it also comes with picking the right accounts . Right . So we think we know enough about this market today that we can be better at selecting where to spend our time to pick the right accounts that can get up to speed , perhaps more quickly than in the past .

Speaker #5: So it's a combination of factors , but we're pleased with what we're seeing .

Speaker #10: Got it . That's helpful . And then Kevin , just on the RCT , can you guys just touch on , you know , additional milestones ?

Speaker #10: You know , what might be left there following the next steps in November and maybe just remind us all what you guys are going after there and what positive results in could mean for the Tam .

Speaker #5: Sure . That's a great question . So as a reminder , so we are in discussions we've submitted an IDE for a very significant randomized controlled trial that would triple our Tam by both moving the F the the ejection fraction cutoff from 35 to 50 and also moving the cutoff for something called Ntprobnp .

Speaker #5: That's a biomarker that describes the stability of heart failure that would move from its current level of 1600 up to 5000 . And so the patients that are in that expanded range have a very similar disease , and we believe will respond similarly to therapy .

Speaker #5: So this represents a pretty compelling , compelling way to expand that indication to an adjacent group of patients who are very much today in the environments that our sales reps are calling on .

Speaker #5: So that's the goal behind the trial . We have submitted the IDE , as I mentioned to FDA , we hope to hear back from them sometime in November .

Speaker #5: If we can indeed reach agreement on a trial design , we would then go to CMS and submit for a category B IDE coverage designation , and that's a very necessary second step .

Speaker #5: That means that CMS will agree to pay for the patients who receive our device in this trial. With that second approval, if successful, we would begin center outreach and would anticipate treating the first patients in this trial sometime in the first half of 2026.

Speaker #10: That's great . Thanks for taking the question , guys .

Speaker #5: Sure .

Speaker #3: Our next question comes from Frank Takkinen with Lake Street Capital Market. Please proceed with your question.

Speaker #11: Great . Thanks for taking the questions . I'm going to pick up on the RCT . A little deeper . There , Kevin .

Speaker #11: Maybe talk to how many patients you're thinking will be enrolled in this trial . And then on the category B , do you think you can get a reimbursement rate similar to the ASP that you're currently collecting ?

Speaker #5: Sure . Thanks , Frank . So as I think maybe we mentioned on a prior call , we're we're seeing this trial at roughly around 2000 patients randomized to either therapy or guideline directed medical care .

Speaker #5: That would make it one of the largest cardiovascular device trials ever conducted . So this would be seen as a significant sort of scientific contribution to the field .

Speaker #5: It would likely involve 100 plus centers , given the assumed enrollment rates by center , and it would likely take us about four years to enroll .

Speaker #5: This trial with another 18 months to two years of follow up . After that point . So it would be a significant trial , a significant investment , we believe there's a good likelihood that CMS will , in fact , cover this under a category B .

Speaker #5: I'd designation the the criteria for that designation are clear and are not subjective . And we've designed the trial in a manner that we think would meet those criteria .

Speaker #5: So as it relates to ASPs , I'll let Jared speak to that .

Speaker #6: Yeah . Happy to jump in on that piece , Frank . So our expectation is that CMS would reimburse the hospitals , the exact same rate that they're reimbursing them today in the outpatient setting .

Speaker #6: So if they're being reimbursed $45,000 today under the new tech APC , 1580 , they'd get a similar reimbursement . If these patients are enrolled through the clinical trial .

Speaker #11: Got it . That's great . Thanks . And then I think , Kevin , I heard you speak to the concept of Salesforce is stable now .

Speaker #11: And still intending to grow that Salesforce . You've been in the range of three new sales territories per quarter . Is that the right way to think about it in 2026 ?

Speaker #5: Yeah , I think it is . Thank you . So I think at this point , we're pleased with what we're seeing . But .

Speaker #5: We're still working the kinks out of our system . And we think that's probably the right number of new territories per quarter to model going forward .

Speaker #5: We're hopeful eventually that may increase , but for now , that's the right spot to start .

Speaker #11: Okay , perfect . Thanks for taking the questions .

Speaker #3: Our next question comes from Chase Knickerbocker with Craig-Hallum Capital Group. Please proceed with your question.

Speaker #12: Good afternoon . Thanks for taking the questions . I just wanted to to dig in a little bit more on the guide as well .

Speaker #12: So Q4 implies essentially flat year over year growth and less sequential growth relative to the past 6 or 7 quarters . I guess .

Speaker #12: What are you seeing so far in the quarter through October ? That's the driver here . I'm just kind of having trouble squaring the commentary , you know , that some of the reps are getting up to speed faster .

Speaker #12: Than expected , and I would think with , you , many of your reps now you're getting to you know , that productive kind of six plus months in their territory .

Speaker #12: Point . I'm just kind of having trouble squaring that . Is there conservatism in that guide ? I mean , maybe just kind of speak to the moving pieces ?

Speaker #6: Yeah . Good question . Chase . So , I mean , as comparing year over year , I think we've talked about this the last few quarters , we had a bit of a reset with our top line numbers back in Q1 .

Speaker #6: We've been working to grow that number sequentially. After that, the Salesforce transformation took place. We've been seeing that sequential growth rate in the range of 8% to 10%.

Speaker #6: I think if I look at the guide that's out here for worldwide numbers for Q4 , the midpoint would get us to about 6% sequential growth .

Speaker #6: So, a little bit of a step back. I think what we're seeing is more reps getting up the productivity curve. More territories are becoming active again.

Speaker #6: We just want to make sure that we're kind of through the thick of it here . Before we would get much more aggressive with the numbers coming out .

Speaker #6: You know , I think even at the midpoint , we're talking growth north of $1 million sequentially from Q3 to Q4 .

Speaker #12: Can you maybe speak to kind of how rep tenure has progressed , has any any kind of update to any of the any of the turnover metrics , etc.

Speaker #12: , just kind of health of the Salesforce update ?

Speaker #6: Yeah . So I think we , you know , last gave updates a couple of months ago on the percentage of reps that were hired in 2024 , 2025 .

Speaker #6: We haven't seen significant changes there , I think Kevin alluded to this in his prepared remarks that , you know , we're back to hiring per normal levels .

Speaker #6: We're not out there accelerating our hiring to backfill a bunch of reps that were turned over . And so at this stage , we haven't seen significant movement in those percentages of reps that were hired in 2024 and 2025 .

Speaker #12: And then just lastly .

Speaker #6: And just to close it out , I mean , overall turnover kind of returning back to those normal levels . And I think we've alluded to it in the past , you know , annual turnover levels that we think to be normal are kind of in that range of 10 to 20% .

Speaker #12: Got it . And then just maybe on the ops , any , any sort of engagement around , you know , level six Neurostimulator code outside of the , of the comments you submitted .

Speaker #12: And then second , Jared , just , you know , appreciate those thoughts for 26 . I mean , maybe just also some thoughts on expenses next year .

Speaker #12: Just kind of how , you , you plan to manage the business from an OpEx perspective . As we look at 2026 ?

Speaker #6: Yep . So on the ops side , you know , I think everybody's sitting and waiting for when that final rule will post just to reminder for everybody that CMS did come out this year in the proposed rule back in July , that we would be mapped to the new tech APC 1580 for 2026 .

Speaker #6: We don't expect that to change in the final rule , but there is still a chance for some upside where they could create a level six neurostim code .

Speaker #6: So we're still waiting for that final rule , which we understand could be published any day now . So , you know , we'll come back and give updates on that as information becomes available .

Speaker #6: But there's no additional information behind the scenes. It's all of us just waiting for CMS to release this rule in 2026. Spend.

Speaker #6: So we do anticipate that we're going to continue to see leverage in this model . So if we're modeling mid top line growth with slight improvements on margins , we're not intending all of that gross profit to to be spent within operating expenses .

Speaker #6: So we would expect the opex growth to be at a lower rate than what we're modeling for top line . But again , we'll come out with more detail on that when we finalize guidance for 2026 .

Speaker #3: Our final question comes from Ross Osborne with Cantor Fitzgerald . Please proceed with your question .

Speaker #13: Hey guys . Congrats on the progress and thanks for taking our questions . So maybe just a quick modeling question for us . Your 2025 OpEx guide implies a sequential step down .

Speaker #13: Is that fair to assume the savings will come from the R&D line sequentially ?

Speaker #6: Yeah , it's a good question . So actually , I think we expect that movement would likely happen within G&A sequentially from Q3 to Q4 .

Speaker #6: Q4 is typically a lighter quarter when it comes to trade show and marketing spend . And so we would typically see a little fewer dollars going that bucket in the fourth quarter as compared to the third .

Speaker #6: into

Speaker #13: Okay . Got it . And then looking at your top accounts , doing three or more implants and the highest at greater than ten , are there any structural differences between those averaging three versus ten .

Speaker #13: Or do you think those currently averaging three have the ability to ramp to ten over time ?

Speaker #5: That's a great question . I'll take that . Thanks , Ross . So I would say it's the latter . You know , there are no structural differences there .

Speaker #5: We think this is ultimately the effect of us sort of steadily improving the mix of accounts that we have . And they're their likelihood of adoption .

Speaker #5: And the tools that we're applying to them . This methodical process of of getting the right stakeholders in place , you know . Getting administrative support in place and building a robust and resilient network in these accounts that allows them to build this into how they treat the disease .

Speaker #5: So we're pleased with what we're seeing . No reason to believe that they couldn't all be operating at that level . And in fact , that's our goal .

Speaker #13: Great . Thanks for taking our questions .

Speaker #3: answer session . I would now like to turn the floor back over to Kevin Hykes for closing comments .

Speaker #5: Thank you . Operator and thanks everyone for joining today . We appreciate your continued support and look forward to updating you on our progress next quarter .

Speaker #5: Thank you .