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01/11 00:06
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call reveals strong financial performance with market share gains, particularly in the VTE market. The product development and business updates are optimistic, especially with Thunderbolt's potential. The sales force split and new products are expected to drive growth, and the company is on track for a 70% margin by 2026. However, cautious guidance for the thrombectomy market and lack of specific timelines for Thunderbolt's FDA review temper the positivity. Overall, the sentiment is positive, with a likely stock price increase between 2% to 8%.
Total Revenue $339.5 million, representing a year-over-year growth of 13.4% on a reported basis and 12.7% on a constant currency basis. The growth was driven by strong execution by the commercial team, continuous innovation, and increased adoption of novel technologies.
U.S. Thrombectomy Revenue $188.5 million, a year-over-year increase of 22.6%. This growth was led by 42% year-over-year growth in the U.S. VTE franchise, supported by the clinical benefits of Flash 2.0 and Bolt 12, which drove market penetration and competitive conversions.
Gross Margin 66%, compared to 54.4% in Q2 2024. The increase was due to the absence of a one-time $33.4 million Immersive Healthcare inventory write-off in 2024. Excluding the write-off, the gross margin slightly increased year-over-year.
International Revenue Decreased by 3.2% reported and 5.8% in constant currency year-over-year, primarily due to a decline in China revenue. However, excluding China, international thrombectomy revenue grew by 14.4%.
Embolization and Access Business Revenue $109.2 million, a year-over-year increase of 13.9% reported and 12.8% in constant currency. This growth was primarily driven by the launch of the new XL product.
Operating Income $40.8 million or 12% of revenue, compared to an operating loss of $1.6 million in Q2 2024. The improvement was due to the absence of the one-time $33.4 million Immersive Healthcare inventory write-off and increased operating profit.
Adjusted EBITDA $61.4 million or 18.1% of total revenue, compared to $13 million or 4.3% in Q2 2024. The increase was driven by strong operating profitability.
Cash, Cash Equivalents, and Marketable Securities $424.6 million, an increase of $45.7 million sequentially, driven by strong operating profitability.
Launch of RUBY XL: RUBY XL is a larger, softer, and longer coil that allows Penumbra to participate in 20% of the market previously untapped. Early performance indicates strong interest and ramping benefits expected in the latter half of the year.
Introduction of RED 72 SILVER LABEL: Enhanced trackability of this product has generated strong physician interest and adoption in the neurovascular segment.
Thunderbolt: Currently under FDA review, with high anticipation for its introduction to the neurovascular field.
U.S. Thrombectomy Business Growth: Revenue increased by 22.6% year-over-year, driven by strong adoption of the CAVT portfolio, including Flash 2.0 and Bolt 12.
International Market Performance: International revenue decreased by 3.2% due to challenges in China, but other regions showed growth. Headwinds in China are expected to ease in the second half of 2025.
Gross Margin Improvement: Gross margin reached 66%, with a target of over 70% by the end of 2026. Sequential margin expansion is expected in the second half of 2025.
Expansion of Sales Force: Added over 50 embolization sales reps and 40 vascular clinical specialists to focus on thrombectomy and embolization growth.
Clinical Trials and Data Generation: Completed enrollment in STORM-PE trial for acute intermediate high-risk PE and launched STRIDE II study to demonstrate benefits of latest CAVT technology.
Focus on Long-Term Growth: Investments in innovation, clinical studies, and market access initiatives to enhance competitive positioning and address unmet needs in thrombectomy and embolization.
Regulatory Risks: The company is in an active process with the FDA regarding the Thunderbolt product, which could delay its introduction to the neurovascular field.
Geopolitical and Market Risks: Revenue from international regions decreased, particularly in China, due to unspecified headwinds. Although the company expects these headwinds to ease, they currently impact growth.
Operational Risks: The company has made significant investments in separate thrombectomy and embolization sales teams, which could lead to variability in product mix and operational inefficiencies during the ramp-up phase.
Product Launch Risks: The launch of new products like RUBY XL and Thunderbolt involves risks related to market adoption, inventory management, and competitive positioning.
Economic Risks: The company faces potential variability in gross margins due to product mix and international market dynamics, which could impact profitability.
Revenue Guidance: The company has increased its total revenue guidance for 2025 to a range of $1.355 billion to $1.370 billion, representing 13% to 15% year-over-year growth.
U.S. Thrombectomy Growth: Guidance for U.S. thrombectomy growth remains at 20% to 21% compared to 2024 levels.
Gross Margin Target: The company expects to achieve a gross margin profile of over 70% by the end of 2026, with sequential margin expansion anticipated in the second half of 2025 due to favorable product mix and productivity improvements.
Operating Margin Expansion: Operating margin expansion is expected to outpace gross margin expansion for the foreseeable future as the company prioritizes delivering profitable growth.
International Revenue Growth: Headwinds in China are expected to ease in the second half of 2025, leading to a return to growth across all international regions.
Clinical Trials and Product Launches: The company plans to present results from the STORM-PE trial at a major medical conference in the fall of 2025. Additionally, the STRIDE II clinical study has been launched to demonstrate the benefits of the latest generation CAVT technology.
Neurovascular Business: The company is actively working with the FDA on the Thunderbolt product and expects to provide updates soon. The neurovascular portfolio will continue to see investments in innovation, spanning aspiration, access, and embolization.
The selected topic was not discussed during the call.
The earnings call reflects positive sentiment, with strong financial performance, increased revenue guidance, and optimistic growth in various segments like thrombectomy and embolization. The Q&A highlights favorable reception of clinical data and minimal impact from tariffs. However, conservative Q4 guidance and lack of clarity on FDA approval specifics slightly temper expectations. Overall, the company's strategic initiatives and market position suggest a positive outlook for stock price movement.
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