AtriCure(ATRC) - 2025 Q2 - Quarterly Results

Executive Summary AtriCure reported strong Q2 2025 financial results driven by innovation and portfolio expansion, with significant revenue growth, improved profitability, and a major clinical trial milestone Second Quarter 2025 Highlights AtriCure reported strong second quarter 2025 results, marked by significant revenue growth, improved net loss, and increased Adjusted EBITDA, alongside the completion of a major clinical trial - Worldwide revenue reached $136.1 million, an increase of 17.1% year over year (16.5% on a constant currency basis)[6] - Net loss improved to $6.2 million, an improvement of $1.8 million year over year[6] - Adjusted EBITDA was $15.4 million, an increase of $7.6 million year over year[6] - The company generated $17.9 million of cash in the quarter[6] - Completed enrollment of all 6,500 patients in the LeAAPS trial[6] CEO Commentary CEO Michael Carrel emphasized that the strong Q2 results are a testament to AtriCure's innovation and the expanding impact of its product portfolio, particularly the AtriClip platform and cryoSPHERE devices, which are driving adoption and improving patient outcomes - The stellar results reflect the power of innovation and the growing impact of the expanding portfolio, especially the AtriClip platform and cryoSPHERE device offerings[2] - New technologies are driving deeper adoption, reduced procedure times, and improved patient outcomes, leading to increasing momentum[2] - The company is optimistic about delivering strong growth and expanding profitability in the second half of 2025 and beyond[2] Second Quarter 2025 Financial Results AtriCure's Q2 2025 financial results show robust revenue growth across segments, improved net loss, and strong non-GAAP performance, despite a slight gross margin decrease Revenue Performance AtriCure achieved a total revenue of $136.1 million in Q2 2025, representing a 17.1% increase year-over-year, driven by robust growth in both U.S. and international markets across key product lines Q2 2025 Total Revenue Overview | Metric | Q2 2025 | Q2 2024 | YoY Change | YoY Change (Constant Currency) | | :----- | :------ | :------ | :--------- | :----------------------------- | | Total Revenue | $136.1 million | $116.3 million | 17.1% | 16.5% | U.S. Revenue U.S. revenue grew by 15.7% to $110.6 million, primarily driven by strong sales in open ablation, pain management, and appendage management product lines U.S. Revenue by Product Line (Q2 2025 vs Q2 2024) | Product Line | Q2 2025 (in thousands) | Q2 2024 (in thousands) | YoY Change | | :----------- | :--------------------- | :--------------------- | :--------- | | Open ablation | $36,468 | $30,760 | 18.5% | | Minimally invasive ablation | $7,839 | $11,828 | -33.7% | | Pain management | $21,168 | $15,006 | 41.1% | | Appendage management | $45,108 | $37,945 | 18.9% | | Total U.S. Revenue | $110,583 | $95,539 | 15.7% | - U.S. revenue growth was primarily driven by sales across key product lines, including the AtriClip FLEX·Mini device for appendage management, the EnCompass clamp for open ablation, and the cryoSPHERE MAX probe for post-operative pain management[3] International Revenue International revenue surged by 23.3% to $25.6 million, with significant growth across all product franchises and geographic regions International Revenue by Product Line (Q2 2025 vs Q2 2024) | Product Line | Q2 2025 (in thousands) | Q2 2024 (in thousands) | YoY Change | | :----------- | :--------------------- | :--------------------- | :--------- | | Open ablation | $10,349 | $9,170 | 12.9% | | Minimally invasive ablation | $2,372 | $1,764 | 34.5% | | Pain management | $2,033 | $1,241 | 63.8% | | Appendage management | $10,802 | $8,555 | 26.3% | | Total International Revenue | $25,556 | $20,730 | 23.3% | - International revenue increased by 23.3% (19.9% on a constant currency basis) to $25.6 million, realizing significant growth across all franchises and geographic regions[3] Profitability and Net Loss AtriCure demonstrated improved profitability in Q2 2025, reducing its loss from operations and net loss per share compared to the prior year, despite a slight decrease in gross margin due to product mix Q2 2025 Profitability Metrics | Metric | Q2 2025 (in thousands) | Q2 2024 (in thousands) | YoY Change | | :----- | :--------------------- | :--------------------- | :--------- | | Gross Profit | $101,482 | $86,844 | 16.8% | | Gross Margin | 74.5% | 74.65% | -0.15 percentage points | | Loss from Operations | $(6,192) | $(7,168) | Improved by $976 | | Net Loss | $(6,190) | $(8,008) | Improved by $1,818 | | Basic and Diluted Net Loss Per Share | $(0.13) | $(0.17) | Improved by $0.04 | - Gross margin for the second quarter 2025 was 74.5%, a decrease of 15 basis points from the second quarter 2024, reflecting less favorable geographic and product mix[3] Non-GAAP Financial Measures (Q2) In Q2 2025, AtriCure reported significant improvements in its non-GAAP financial metrics, with Adjusted EBITDA more than doubling and adjusted loss per share substantially decreasing compared to the prior year Q2 2025 Non-GAAP Financial Metrics | Metric | Q2 2025 | Q2 2024 | YoY Change | | :----- | :------ | :------ | :--------- | | Adjusted EBITDA | $15.4 million | $7.8 million | Increased by $7.6 million | | Adjusted Loss Per Share | $(0.02) | $(0.17) | Improved by $0.15 | 2025 Financial Guidance AtriCure has updated its full-year 2025 financial guidance, projecting increased revenue and Adjusted EBITDA, alongside an improved adjusted loss per share 2025 Financial Guidance AtriCure has raised its financial outlook for the full year 2025, projecting higher revenue and Adjusted EBITDA, alongside an improved adjusted loss per share and modest cash flow generation Full Year 2025 Financial Guidance | Metric | Projected Full Year 2025 | | :----- | :----------------------- | | Revenue | $527 million to $533 million | | Adjusted EBITDA | $49 million to $52 million | | Adjusted Loss Per Share | $(0.34) to $(0.39) | - Management expects modest cash flow generation for the full year 2025[5] Company Overview This section provides an overview of AtriCure's core business in Afib and pain management technologies, along with important disclosures regarding forward-looking statements and associated risks About AtriCure AtriCure, Inc. is a leading innovator in surgical treatments for atrial fibrillation (Afib), left atrial appendage (LAA) management, and post-operative pain management, serving a global market of over 59 million Afib patients. The company's portfolio includes FDA-approved devices and minimally invasive therapies - AtriCure provides innovative technologies for the treatment of Afib and related conditions, which affect more than 59 million people worldwide[8] - Key products include the FDA-approved Isolator Synergy™ Ablation System for persistent Afib, the widely sold AtriClip Left Atrial Appendage Exclusion System, Hybrid AF™ Therapy, and cryoICE cryoSPHERE probes for pain relief[8] Forward-Looking Statements This section serves as a cautionary note, indicating that statements regarding future events are forward-looking and subject to various risks and uncertainties that could cause actual results to differ materially from projections - Except for historical information, certain statements are forward-looking and subject to risks, uncertainties, and assumptions that could cause actual results to differ materially from projections[9] - Risks include market acceptance, negative clinical data, competition, regulatory approvals, impacts of rising healthcare costs, and the ability to manage intellectual property rights, as detailed in SEC filings[9] Use of Non-GAAP Financial Measures This section explains AtriCure's use of non-GAAP financial measures to provide supplemental insights into operational performance, emphasizing their limitations and the need for GAAP reconciliation Use of Non-GAAP Financial Measures AtriCure uses non-GAAP financial measures like constant currency revenue, Adjusted EBITDA, and Adjusted loss per share to provide supplemental insights into its financial performance, believing these metrics offer a more comparable view of operational results by excluding certain non-operating or non-recurring items. Investors are cautioned to review GAAP reconciliations and not rely solely on non-GAAP measures - Non-GAAP financial measures are provided to supplement GAAP statements, offering additional and meaningful assessments of revenue and operational results[10][11] - These measures have limitations as analytical tools and should not be considered in isolation or as a substitute for GAAP financial results[16] Constant Currency Revenue Definition Constant currency revenue is a non-GAAP metric used to evaluate growth by adjusting for the non-operating impact of foreign currency exchange rate fluctuations - Constant currency revenue is a non-GAAP measure calculated by applying previous period foreign currency exchange rates to comparable periods to better measure comparability of results[11] - Management analyzes revenue on a constant currency basis to evaluate growth, as changes in foreign currency exchange rates have a non-operating impact[11] Adjusted EBITDA Definition Adjusted EBITDA is a non-GAAP measure reflecting core business operations by excluding non-cash and non-recurring charges from net loss - Adjusted EBITDA is calculated as net loss before other income/expense, income tax expense, depreciation and amortization, share-based compensation, and non-recurring charges[12] - Non-recurring charges include acquisition costs, acquired-in-process research and development (IPR&D), legal settlement costs, impairment of intangible assets, and changes in fair value of contingent consideration liabilities[12] - Management uses Adjusted EBITDA for strategic and annual operating planning, believing it reflects ongoing core business operations[14] Adjusted Loss Per Share Definition Adjusted loss per share is a non-GAAP metric that modifies net loss per share by excluding specific non-cash and non-recurring adjustments - Adjusted loss per share is a non-GAAP measure that calculates net loss per share before non-cash adjustments for fair value of contingent consideration liabilities, acquired IPR&D, legal settlement costs, impairment of intangible assets, and debt extinguishment[15] Condensed Consolidated Financial Statements This section presents AtriCure's unaudited condensed consolidated statements of operations and balance sheets for Q2 2025 and prior periods, detailing financial performance and position CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS This section presents AtriCure's unaudited condensed consolidated statements of operations for the three and six months ended June 30, 2025 and 2024, detailing revenue, expenses, and net loss under GAAP Condensed Consolidated Statements of Operations (Three Months Ended June 30) | Metric (in thousands) | Q2 2025 | Q2 2024 | | :-------------------- | :------ | :------ | | Total revenue | $136,139 | $116,269 | | Cost of revenue | $34,657 | $29,425 | | Gross profit | $101,482 | $86,844 | | Research and development expenses | $29,284 | $20,416 | | Selling, general and administrative expenses | $78,390 | $73,596 | | Total operating expenses | $107,674 | $94,012 | | Loss from operations | $(6,192) | $(7,168) | | Net loss | $(6,190) | $(8,008) | | Basic and diluted net loss per share | $(0.13) | $(0.17) | Condensed Consolidated Statements of Operations (Six Months Ended June 30) | Metric (in thousands) | YTD Q2 2025 | YTD Q2 2024 | | :-------------------- | :---------- | :---------- | | Total revenue | $259,759 | $225,120 | | Cost of revenue | $65,649 | $57,008 | | Gross profit | $194,110 | $168,112 | | Research and development expenses | $51,812 | $40,261 | | Selling, general and administrative expenses | $154,444 | $145,936 | | Total operating expenses | $206,256 | $186,197 | | Loss from operations | $(12,146) | $(18,085) | | Net loss | $(12,937) | $(21,277) | | Basic and diluted net loss per share | $(0.27) | $(0.45) | CONDENSED CONSOLIDATED BALANCE SHEETS This section provides AtriCure's unaudited condensed consolidated balance sheets as of June 30, 2025, and December 31, 2024, outlining the company's assets, liabilities, and stockholders' equity Condensed Consolidated Balance Sheets (as of June 30, 2025 vs. December 31, 2024) | Metric (in thousands) | June 30, 2025 | December 31, 2024 | | :-------------------- | :------------ | :---------------- | | Assets: | | | | Cash and cash equivalents | $117,796 | $122,721 | | Total current assets | $271,257 | $267,826 | | Total Assets | $608,849 | $609,328 | | Liabilities & Equity: | | | | Total current liabilities | $68,843 | $73,424 | | Total Liabilities | $144,358 | $148,359 | | Total Stockholders' Equity | $464,491 | $460,969 | Reconciliation of Non-GAAP to GAAP Results This section provides detailed reconciliations of AtriCure's non-GAAP financial measures, including Adjusted EBITDA and Adjusted Loss Per Share, to their most directly comparable GAAP equivalents Reconciliation of Non-GAAP Adjusted Income (Adjusted EBITDA) This section provides the reconciliation of GAAP net loss to non-GAAP Adjusted EBITDA for the three and six months ended June 30, 2025 and 2024, detailing adjustments for income tax, depreciation, share-based compensation, and acquired IPR&D Reconciliation of Non-GAAP Adjusted Income (Adjusted EBITDA) (Three Months Ended June 30) | Metric (in thousands) | Q2 2025 | Q2 2024 | | :-------------------- | :------ | :------ | | Net loss, as reported | $(6,190) | $(8,008) | | Income tax expense | $261 | $253 | | Other income (expense), net | $(263) | $587 | | Depreciation and amortization expense | $5,171 | $4,527 | | Share-based compensation expense | $11,371 | $10,391 | | Acquired in-process research & development expense | $5,000 | — | | Non-GAAP adjusted income (adjusted EBITDA) | $15,350 | $7,750 | Reconciliation of Non-GAAP Adjusted Loss Per Share This section presents the reconciliation of GAAP net loss to non-GAAP Adjusted Loss Per Share for the three and six months ended June 30, 2025 and 2024, highlighting adjustments for acquired IPR&D and loss on debt extinguishment Reconciliation of Non-GAAP Adjusted Loss Per Share (Three Months Ended June 30) | Metric (in thousands) | Q2 2025 | Q2 2024 | | :-------------------- | :------ | :------ | | Net loss, as reported | $(6,190) | $(8,008) | | Acquired in-process research & development expense | $5,000 | — | | Loss on debt extinguishment | — | — | | Non-GAAP adjusted net loss | $(1,190) | $(8,008) | | Basic and diluted adjusted net loss per share | $(0.02) | $(0.17) | Additional Information This section provides details for accessing the upcoming conference call to discuss financial results and contact information for investor relations inquiries Conference Call AtriCure will host a conference call to discuss its second quarter 2025 financial results, providing details for accessing the webcast and replay - AtriCure will host a conference call at 4:30 p.m. Eastern Time on Tuesday, July 29, 2025, to discuss second quarter 2025 financial results[6] - The webcast can be accessed via the Investors page of AtriCure's corporate website (https://ir.atricure.com/events-and-presentations/events), with a replay available for 90 days[6][7] CONTACTS This section provides contact information for investor relations inquiries - Investor relations contacts are Angie Wirick (Chief Financial Officer, AtriCure, Inc.) and Marissa Bych (Gilmartin Group)[17]