AtriCure, Inc.

Good afternoon and welcome to HRAcure's third 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 HRAcure's management. I would now like to turn the call over to Marisa Beisch from the Gilmartin Group for a few introductory comments.

Great, 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. Before we begin today, let me remind you that the company's remarks include forward-looking statements. Forward-looking statements are subject to numerous risks and uncertainties, many of which are beyond HHS's control, including risks and uncertainties described from time to time in HHS 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, competition, reimbursement, and clinical trial outcomes. 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 constant currency revenue, 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.

Great. Good afternoon, and thank you for joining us, everyone. I'm happy to share that our third quarter results, which reflect another strong quarter for AtriCare. We achieved total revenue of $116 million or approximately 18% growth, showing broad-based demand across our portfolio of innovative products for patients with atrial fibrillation and post-operative pain. In addition to our top-line performance, we continue to make progress to expand profitability, producing nearly $8 million of positive adjusted EBITDA for the quarter. We also generated over $16 million in positive cash flow this quarter, marking our second consecutive quarter of positive cash flow. As a result of the strength in our third quarter results, we are raising our full year 2024 revenue guidance and now expect a range of $459 to $462 million, reflecting growth of approximately 15% to 16% over full year 2023. We are also reaffirming our plans to deliver a full year adjusted EBITDA of $26 to $29 million. Turning to updates on our business and highlights in the quarter. starting with our pain management franchise, which grew 36% worldwide, marking another quarter of acceleration in sales. Our performance was led by growth in our international markets and bolstered by the U.S. launch of our CryoSphere Plus probe. We've seen outstanding adoption of this device, which contributed nearly half of our pain management sales in the quarter, and are hearing consistent positive feedback from our physician partners on the 25% reduction in freeze time. We are also excited about the recent launch of our CryoSphere Max Pro, which builds upon the success of CryoSphere Plus. Our Max Pro features a larger 10 millimeter ball tip designed to optimize procedure efficiency by reducing freeze times even further than the CryoSphere Plus. Additionally, we are seeing a growing body of evidence supporting the economic value of cryo nerve block therapy. At the most recent AATS thoracic surgical Oncology Summit in New York City, Dr. Dan Miller, Chief of Thoracic Surgery at the Medical College of Georgia and Georgia Cancer Center, presented robust multi-center data demonstrating a reduction in hospital stay duration by more than one day after cryoablation, representing more than $5,000 of reduced cost, 26% less opioid refill dosage at 90 days for all patients, and 28% less opioid refill dosage at 90 days after cryoablation in chronic opioid users, and total healthcare cost reduction by $8,000 over six months for the cryo-neuroblock patients. As we look back on the past five years, our progress in establishing this therapy has been remarkable, with new innovation leading to reacceleration and growth. Our success in thoracic procedures also gives us confidence and an even broader opportunity for our pain management products as we continue to explore additional applications to expand our addressable markets. Shifting now to our franchises centered on the treatment of atrial fibrillation. Our open ablation franchise grew 16% worldwide, driven by nearly 50% growth in the Encompass clamp in the United States. We are adding accounts and new surgeons with the Encompass clamp and recently completed our first cases in Europe. This device has accelerated treatment in our core market of cardiac surgery, and we look forward to driving sustainable growth with this product worldwide. Next, our appendage management franchise achieved worldwide revenue growth of 18% with outsized contribution from open chest devices. In the United States, we saw a third consecutive quarter of acceleration in sales of open appendage management devices, achieving 20% growth in the third quarter. We believe this acceleration is a testament to the pioneering design, quality, and performance of our AtriaClip devices, which have reached over 600,000 units sold life to date. And on the innovation front, we completed the first cases with our new AtriaClip Flex Mini device following the US launch in the third quarter. The AtriaClip Flex Mini is the smallest profile clip on the market, offering enhanced access and visibility of the appendage. Feedback from early adopters has been overwhelmingly positive, particularly on the enhanced visibility with the device. While still early in the launch, we anticipate Atriclip Flex Mini will drive a strong tailwind for our appendage management franchise well into the future. Internationally, we received an expanded CE mark indication for Atriclip devices to include patients at high risk for thromboembolism. The expanded indication resulted from a wealth of existing robust clinical data on our H-Equip devices through 85 peer-reviewed papers representing over 11,000 patients studied and analyzed. We are also adding clinical evidence and awareness of the benefits of LAA management to our investment in the Leaps Stroke Reduction Trial, the anticipated success of which will expand our global addressable market considerably. The LEAPS trial is expected to show a clear benefit when using atrial foot devices to manage the appendage in patients who undergo cardiac surgery without preoperative AFib diagnosis, a market of well over 1 million patients globally. To date, we have enrolled nearly 3,700 patients, and we are on track to complete enrollment of 6,500 patients in this study by mid-2025. Finally, our hybrid AF therapy remains resilient despite the market effects of broadening PFA adoption. In the third quarter, we saw continued positive trends with a number of accounts performing our convergent procedure as well as new account activations. However, given increased physician time focusing on PFA, we are experiencing pressure on the pace of MIS adoption or ablation and MIS atrial growth in the U.S. We know that hybrid therapy plays a vital role in practice and remains the only therapy with differentiated and durable results for long-standing persistent AF patients. As we have seen in Europe, over time, we expect the broad tailwinds PFA is driving around the awareness and diagnosis of AFib to expand the number of treatable patients for this therapy. To build on that point, we believe that continuous innovation in AFib therapies has grown patient treatment across all markets. Therefore, we are excited to announce that we have entered into an exclusive license and development agreement with an expert in the PFA field to accelerate the introduction of PFA technology to our cardiac surgery devices. Ultimately, we anticipate PFA will be another foundational element of our portfolio of epicardial surgical ablation devices. We expect to announce more details on our PFA development program and clinical progress early next year. In closing, We are incredibly pleased with our third quarter's performance and trajectory of our business as we enter the fourth quarter. Our strong growth stems from investments across the pillars of our business of innovation, clinical science, and education, and is a testament to the strength of our diversified portfolio. Furthermore, recent product introductions and continued efforts to advance standards of care in each of our markets globally have made our entire team excited for the future of Atricare. And with that, I'll turn the call over to Angie Weirich, our Chief Financial Officer.