Penumbra, Inc.

Ladies and gentlemen, good afternoon. My name is Abby and I'll be your conference operator today. At this time, I would like to welcome everyone to Penumbra's second quarter 2025 conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during that time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, press star 1 a second time. Thank you. And I would like to introduce Ms. Cecilia Furlong, Business Development and Investor Relations for Penumbra. Ms. Furlong, you may begin your conference.

Thank you, Operator, and thank you all for joining us on today's call to discuss Penumbra's earnings release for the second quarter of 2025. A copy of the press release and financial tables, which includes a gap to non-gap reconciliation, can be viewed under the Investors tab on our company website at www.penumbrainc.com. During the course of this conference call, the company will make forward-looking statements pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, including statements regarding our financial performance, commercialization, clinical trials, regulatory status, quality, compliance, and business trends. Actual results could differ materially from those stated or implied by our forward-looking statements due to certain risks and uncertainties including those referenced in our 10-K for the year ended December 31st, 2024, filed with the SEC. As a result, we caution you against placing undue reliance on these forward-looking statements, and we encourage you to review our periodic filings with the SEC, including the 10-K previously mentioned, for more complete discussion of these factors and other risks that may affect our future results or the market price of our stock. Penumbra disclaims any duty to update or revise our forward-looking statements as a result of new information, future events, developments, or otherwise. On this call, financial results for revenue and gross margin are presented on a GAAP basis while operating expenses, operating income, and adjusted EBITDA are presented on a non-GAAP basis. The corresponding GAAP measures and a reconciliation of GAAP to non-GAAP financial measures are provided in our posted press release. Non-GAAP operating expenses and operating income exclude amortization of acquired intangible assets of $2.4 million, an impairment of our immersive healthcare business of $76.9 million in the second quarter of 2024, and adjusted EBITDA excludes impairment expenses, stock compensation expense, depreciation and amortization, provision for income taxes, and interest income expenses. Adam Elsesser, Penumbra's Chairman and CEO, will provide a business update. Maggie Yuen, our Chief Financial Officer, will then discuss our financial results for the second quarter of 2025. And Jason Mills, our Executive Vice President of Strategy, will discuss our updated 2025 guidance. With that, I would like to turn over the call to Adam Elsesser.

Thank you, Cecilia. Good afternoon. Thank you for joining Penumbra's second quarter 2025 conference call. In the second quarter, we generated total revenue of $339.5 million, representing underlying year-over-year growth of 13.4% on a reported basis and 12.7% on a constant currency basis. Our second quarter performance reflected extraordinary ongoing execution by our commercial team against our strategy. Together with our focus on continuous innovation, clinical and health economic data generation, together with the work physicians are doing to further expand the total number of patients treated globally with our novel technologies. Our U.S. thrombectomy business led overall growth in the quarter, with results reflecting strong continued adoption and ramping utilization of our CAVT portfolio. while our U.S. embolization and access business, as well as our international business, delivered solid growth ahead of expectations. Second quarter U.S. thrombectomy revenue increased 22.6% year-over-year to $188.5 million, led by 42% year-over-year growth in our USVTE franchise. As the clinical benefits of FLASH 2.0 and BOLT 12 continue to support and drive further market penetration and competitive conversions. Below the top line, gross margin of 66% was in line with our prior announced expectation as we executed on our planned accelerated RubyXL inventory build. We began shipments of XL at the end of the second quarter and enter the third quarter well positioned from an inventory standpoint to meet the strong interest in Excel we've seen in the field to date. We remain on track and are well positioned to achieve a gross margin profile of over 70% by the end of 2026 and expect operating margin expansion to outpace gross margin expansion for the foreseeable future as we prioritize delivering profitable growth and an expanding profitability profile. Turning to our U.S. peripheral business, our second quarter thrombectomy performance reflected the competitive strength and clinical benefits of our comprehensive current CAVD portfolio, spanning FLASH 2.0, BOLT 6X, BOLT 7, and BOLT 12, alongside purposeful and focused execution by our commercial team. We treated more VTE patients in the quarter than in any prior period supported by our team's relentless focus and prioritization on improving patient outcomes, driving conversions from anticoagulation, lytics, and other mechanical thrombectomy platforms to CAVT in both PE and DBT. In arterial, the clinical benefits of our modulated aspiration technology in BOLT7 and BOLT6X continue to support and drive physician conversions from open surgery or the use of lytics to CAVT. Based on our consistent success and our clear view of the opportunity ahead in peripheral thrombectomy, we strategically invested in the build-out of a separate peripheral embolization sales force so as to provide heightened focus in thrombectomy and embolization, We have added over 50 embolization sales reps and over 40 vascular clinical specialists. With these new hires in place, we will be able to have a team solely focused on our thrombectomy business, as well as a separate team focused on launching RubyXL and driving long-term growth in our embolization business. Adding to the information we provided on our last earnings call, RubyXL is a larger, softer, and longer coil than other commercially available coils and allows us to now participate quite effectively in about 20% of the current market that we have not been able to in the past. With the early performance of RubyXL, we expect to see ramping benefits from our investment in our commercial team through the back half of the year and beyond, with our thrombectomy team well positioned to exclusively focus on continuing to address the significant unmet need in the treatment of clot burden throughout the body, and our new EMBO team able to focus on providing our comprehensive choral portfolio to physicians and hospitals. As our team drives adoption of our technology on a day-to-day basis, and account-by-account basis. We are simultaneously focused on positioning CAVT for long-term growth while enhancing our competitive position. Advancing the field through technology innovation and high-quality clinical data generation is our priority. During the quarter, we completed enrollment in STORM-PE, our prospective multicenter randomized controlled trial evaluating CAVT plus anticoagulation versus anticoagulation alone for the treatment of acute intermediate high-risk PE. We are committed to running trials which hold the potential to fundamentally shift patient treatment, and STORM-PE has the potential to provide level one evidence to help inform PE treatment and impact standard of care. Enrollment in STORM-PE completed ahead of schedule, and we look forward to presenting the results from the trial at a major medical conference this fall. On the arterial side, we recently announced the launch of our STRIDE II clinical study. Our initial STRIDE study, when she incorporated primarily older generation technology demonstrated compelling results, including a 98.2% 30-day limb salvage rate. With Stride 2, we intend to both expand the patient sample size and broaden the geographic enrollment base in comparison to Stride, with Stride 2 focused on demonstrating the benefits of our latest generation CAVT technology. Looking forward, we will continue to invest and high-quality clinical studies in tandem with our market access initiatives to highlight the significant benefits and value proposition of our differentiated current and forthcoming products. Shifting to our neurovascular business, our U.S. stroke thrombectomy franchise delivered another solid performance, growing ahead of the underlying stroke market. In its first full quarter on the market, Red 72 Silver Label, with its enhanced trackability, continued to generate strong physician interest and saw ramping adoption and utilization. Regarding Thunderbolt, we are currently in an active process with the FDA and will provide additional updates as soon as possible. We remain very excited to introduce Thunderbolt to the neurovascular field. At SNIS earlier this month, there was a great deal of discussion about distal occlusions in stroke. We heard many physicians confirm that our RED43 aspiration catheter is the preferred device to treat patients with distal occlusions. Finally, there was a lot of discussion among physicians about embolizing the middle menagerie artery, or MMA, as it is commonly known. and the unique properties of our swift coil that allows for the safest treatment modality. It is estimated that there are more patients that could be treated in this category than traditional cerebral aneurysms. We are focused on investing in further innovation across our diversified neural portfolio, spanning aspiration, access, and embolization. In summary, Our second quarter results reflect solid execution by our team as we continue to deliver long-term growth in multiple underpenetrated markets. We are committed to continuing to transform patient care across these markets and are excited to introduce new innovative products in the months and years ahead. I'll now turn the call over to Maggie to cover our financial results for the second quarter of 2025.