AtriCure at Goldman Sachs Conference: Strategic Growth Insights

On Monday, 09 June 2025, AtriCure Inc (NASDAQ:ATRC) participated in the Goldman Sachs 46th Annual Global Healthcare Conference. The discussion, led by CFO Angie Weirich, highlighted AtriCure’s promising growth trajectory and strategic initiatives, while also addressing challenges such as international growth impact on margins and competition from new technologies.

Key Takeaways

• AtriCure reaffirmed its full-year revenue growth guidance of 11% to 13%.
• The company aims to reach $1 billion in revenue by 2030.
• PFA technology is impacting the adoption of AtriCure’s CONVERGE procedure, but CONVERGE remains a reliable option for persistent AFib cases.
• International growth is outpacing the US, affecting gross margins.
• The company is focused on organic growth, with a cautious approach to acquisitions.

Financial Results

• AtriCure reported a 14% revenue growth in Q1, exceeding expectations.
• The company maintains its revenue growth guidance of 11% to 13% for the year.
• Gross margin is expected to see modest improvement, with international growth impacting margins negatively.
• Adjusted EBITDA margin is guided at 9%.
• Long-term goals include doubling the adjusted EBITDA margin and reaching $1 billion in revenue by 2030.

Operational Updates

• CONVERGE: Although PFA adoption has slowed CONVERGE’s growth, AtriCure anticipates renewed interest as EPs recognize PFA’s limitations.
• Appendage Management: The AtriClip business is thriving, with new products like the Flex Mini and Pro Mini driving growth.
• Pain Management: Strong growth is fueled by new product launches, such as Cryosphere Plus and Max Probes, with a focus on procedural time reduction.
• Open Ablation: Continues to perform well, with investments in preventative treatments.

Future Outlook

• AtriCure anticipates a deceleration in revenue growth due to pressures in the minimally invasive segment.
• Margin expansion is expected through SG&A leverage and natural R&D leverage as clinical trials conclude.
• Strategic priorities include market expansion through innovation and maintaining leadership in key markets.

Q&A Highlights

• PFA Impact: Hospitals are integrating PFA, creating initial distractions, but AtriCure positions CONVERGE as a durable solution for persistent AFib.
• Sales Strategy: The sales team focuses on educating about PFA limitations and promoting CONVERGE for post-PFA failures.
• Capital Allocation: Emphasis on organic growth, with potential acquisitions considered carefully to avoid negative impacts on financial trajectory.

For a detailed understanding of AtriCure’s strategies and financial performance, please refer to the full transcript.

Full transcript - Goldman Sachs 46th Annual Global Healthcare Conference:

David Lewis, Analyst: Well, I’ll go ahead and get started here. I think it’s one of the final presentations today. It’s nice to be in a room with a window. So I think that is a is a bonus. So I wanna wanna welcome Angie Weirich, Chief Financial Officer of AtriCure.

As has been the case in all these meetings, we welcome welcome everyone’s participation here. From the audience, just just wave at me, we’ll get you a mic so those on the webcast participating can can make sure to hear any questions. So I I I thought it’d a good opportunity. We’ve had a little bit of time since your analyst meeting in in in late March, and then you’ve had one quarter of results since then. Maybe just kind of talk to us about some of the reflections you have on the in the analyst meeting, how some of your investor conversations have gone since then or what are the topics that you think people kind of digested as you expected, and what are some of the things that you think may have gone underappreciated?

Angie Weirich, Chief Financial Officer, AtriCure: Okay. Well, I would just start by saying thanks for having us at the conference. The goal of our analyst and investor day, which we held at the March, really was to drive home the point about the breadth of opportunity at AtriCure. So the existing portfolio of products, the large markets in which we serve in, but then also to illuminate the pipeline of r and d activities that we’ve got between product development and clinical science, which I think then gets to one of your questions, which is what really resonated with investors and those that were there with our with our covering analysts as well. And I would say anytime you hear from a customer, so we had two cardiac surgeons who really brought to life the LEAPS clinical trial and our BOXNOAF trial and talking about what this means to be focused not just on disease state of afib, but getting into preventative care in cardiac surgery, I think really brought to life the reason why we’re doing these trials and what they see firsthand.

Equally so, hearing from two EPs who were at the forefront of using PFA catheters, I think it’s illuminating. Investors have heard from Mike and I both that, you know, what we believe CONVERGE over a long term basis will be successful amidst a significant amount of pressure today, but hearing from EPs, their firsthand experience. And I think doctor Su did a nice job also of actually showing here’s what a map looked like for a patient that I tried PFA on. I looked like I had great results, but then fast forward six months later, this is what I’m seeing in my practice. So I think the firsthand from anytime you have customers who speak, I think that that really resonates.

All of that was wrapped up with this bolder kind of longer term financial trajectory. And I would say we’re proud to be along with the steps of improving profitability along with double digit revenue growth. It’s a mixed, you know, feedback from the investor community on what we could do from a top line perspective and making sure that that’s our focus, which it is.

David Lewis, Analyst: And, you know, one of the areas where where I get questions or as as as I get the stories, you have the two businesses that sort of compete with other things out there that look less invasive, whether that’s CONVERGE and PFA or or other endovascular ablation or appendage management and watchman type Yeah. Type procedures. If I if I one of the if I look on the PFA side, I think, you know, three years ago, the sort of continuum for patients with AFib was drugs, drugs, drugs, ablation, ablation, then maybe surgery.

Angie Weirich, Chief Financial Officer, AtriCure: Yes.

David Lewis, Analyst: And now drugs is off the table, basically line therapy, but it also seems like now it’s gonna be CFA PFA PFA RF RF. Where where does, like, converge or surgery fit in in sort of in in this new treatment paradigm?

Angie Weirich, Chief Financial Officer, AtriCure: It’s such a great question. I think you’re exactly right. Today, with PSA being so fast, so much faster than existing catheters, comparable safety, an EP looks at a patient and says, why wouldn’t I try this? And I would likely try it multiple times. I think what we’re seeing in accounts that had early experience with PFA was it worked or it appeared to work.

And if you think about where we really are focused with CONVERGE, long standing persistent AFib patients, Their hearts have been remodeled to such an extent that catheters may have some effect, but over time, it’s not a durable option. That’s exactly what the CONVERGE clinical trial proved, and this is the experience that we’re seeing from EPs in the field. Look. The longer I follow this patient who I tried and looked like I had a great block from the PFA, now it’s coming back, and I’ve got to do something else. What we think CONVERGE ultimately will be is you’ve tried a couple times with catheters, try to do what you can least invasive, and then move on to CONVERGE, which is such a good durable option for those long standing persistent AFib patients.

David Lewis, Analyst: And CONVERGE had a really good start. I think we were talking about this earlier. Yeah. If you look if you go back to the subsequent to the PMA and then the initial launch, I think you were generally significantly outperforming expectations and had a really good start that has sort of leveled off or not not not sustained. How do you think of I mean, sometimes these product launches do go through rapid adoption, flattening, reacceleration.

And and as you kind of think about where we are in that, what talk us through that evolution. Like, what gets to that reacceleration point?

Angie Weirich, Chief Financial Officer, AtriCure: Yeah. I think we faced two main challenges following the PMA approval and initial launch of CONVERGE. The being the excitement coming out of COVID for this label. A lot of accounts wanted to start programs, and we saw a nice uptake in new account openings. I think what we found from that was the logistics of the procedure involving a surgeon and an EP, making sure that the patient has a good experience through that full paradigm, the full treatment, that we needed to do some work there, and that’s what we were focused on in 2023 and 2024.

Then you you’re hit with the hurdle of PFA comes to United States, catheters, and every EP wants to try this. They’re getting that into their accounts, and we see quite a bit of distraction. For the earlier comment, every EP wants to try it quicker. Same safety. So it’s kind of like a why not?

Why wouldn’t I try this? So we believe longer term. The logistics part, I think we made great progress on, and we feel like we’ve got a good algorithm going forward and have done a lot of nice work within existing Converge accounts. And that’s not work that we have to repeat kinda when the PFA pressure is up. I think when PFA you know, they have EPs who have the experience of seeing the impact on patients over a longer term basis.

Our belief is CONVERGE will see growth again.

David Lewis, Analyst: Okay. And and does that mean you’ve throttled back market development efforts with Converge or or Salesforce investment in as as these dynamics unfold, so you’re keeping it warm but not necessarily prioritizing investments.

Angie Weirich, Chief Financial Officer, AtriCure: Yeah. We I would say aren’t prioritizing, but I say that knowing that going into this time frame, we, the company, had made a significant amount of investments in this area, in the sales team in particular. So commercial resources at this point in time are not a priority, making sure that we’re being very diligent when we see rep turnover. Where are the places where we’ve got momentum and makes sense?

In other places, could you wait a while before that is kind of reinvested? From a market development standpoint, we still start accounts. We’re still supporting education programs, and we’ve got new customers. So I think through all of this PFA pressure, we are still seeing an uptake in new accounts, which I think is another bright spot for us.

David Lewis, Analyst: Okay. May maybe toggling some other other parts of the business. You could talk a little bit about appendage management, also an area where there are diversity of of of solutions. Maybe just how that business is going and what you’re seeing as as we see more concomitant procedures get performed on the ablation side. And if there’s any I know in general, we’re talking different patient populations, but there there is a distraction and workflow dynamic to to to navigate here as well.

Angie Weirich, Chief Financial Officer, AtriCure: We don’t I would say when you think about where our AtriClip is used, it’s in a cardiac surgery patient. So you’re you’ve gotta have the procedure for some other reason. You aren’t opening someone’s chest just to manage their appendage. So and the cardiac surgery market is not dying. The number of procedures are very steady, if not growing.

So this is a patient population that AtriCure, you know, with the original founding of the company said, we believe that there will be cardiac surgery for a very long time, and those patients need options. So the concomitant, you know, ablation with WATCHMAN, we don’t see that as much pressure today. We’ve also, in the same time, have continued to innovate. So our appendage management franchise, we’re super excited to have yet another generation of AtriClip that launched at the end of last year. It drove some nice upside in the first quarter results.

I’m talking about the Flex Mini. We’ll also have a minimally invasive version of that clip, the Pro Mini that’s launched here in the second quarter, and that’ll start to contribute as well. I think the benefit of low visibility, so super low profile, significantly smaller than the existing devices on the market, gives the surgeon kind of the best world from being able to see on the patient and not having any kind of adjacent structures impacted. So the other part I would just call out in our in our appendage management franchise is beyond just technology. We’re also studying in cardiac surgery through our LEAPS clinical trial.

The benefit of if your patient’s in cardiac surgery, whether or not they have A fib, you should manage the appendage. It’s a no brainer. Takes a couple minutes to do, and we believe LEAPS will ultimately say, look. There’s a stroke reduction benefit for those patients who don’t have A fib.

David Lewis, Analyst: And and right now, what percentage of cardiac surgery cases use a clip?

Angie Weirich, Chief Financial Officer, AtriCure: If you have if you’re an A fib patient, we believe somewhere between fifty to sixty percent today have their appendage managed with our AtriClip device. If you don’t have A fib, there are still surgeons who believe today, even without leaps, they were kinda on the forefront of this idea of prophylactic clipping. It’s somewhere less than ten percent. Those are kind of best guesses in terms of the estimates of where it’s being used or not.

David Lewis, Analyst: Okay. And is this one of the areas seeing increased resource allocation in in lieu of CONVERGE?

Angie Weirich, Chief Financial Officer, AtriCure: Yes. But our cardiac surgery team, I think the nice thing is when we talk about increased resource allocation, it’s based on case coverage. So you’re not starting a brand new team. This is the same team that’s selling the ablation component of it, talking to surgeons about treating A fib, so they’ll cover both.

David Lewis, Analyst: K. Maybe going into to pain to pain management. Sure. I mean, this is a business that’s done well. Maybe help us think through, like, sustainability of this and and where this where this fits in that same resource prioritization scale.

Angie Weirich, Chief Financial Officer, AtriCure: Yeah. So the our pain management business, one of the key things that we did when we not launched the dedicated probe in 2019 was to start a completely new team. Cardiac surgery reps have some crossover, so there are some thoracic procedures that our reps were in. What we found was there was a bigger interest in thoracic, pure thoracic procedures. Think lung resection and said, we need a dedicated team, pain specialists who know this device, who know the pain paradigm incredibly well, and ramped up a team pretty quickly in that particular area.

That team has been working with the same product up until last year. So Gen two and Gen three with our Cryosphere Plus and Cryosphere Max Probes, which launched in the middle of last year, I think what you saw with both of them bringing time reduction to a procedure was a ramp in revenue growth. So what we’ve heard consistently is time and money in these procedures matters, so being able to reduce kinda time and procedure clearly reignited this thoracic market. It was already at one of our top leading growth markets, but this is an area where I think you saw new and continued expanding usage within our existing customers. So what we’re seeing, though, in pain management is we had great success in the thoracic cavity.

So thoracic procedures, also looking at sternotomy, reducing time really impacts, you know, the ability for a surgeon to say, I wanna keep a chest open for another ten minutes as opposed to thirty minutes, impacts that market. It also led us to think about other markets such as amputations. So below the knee amputations, we’ve developed a purpose driven device for those procedures, the Cryo XT, which we just got five ten k clearance and will launch later this year. So kinda talked about what we’ve done. I would say at each point, the commercial team building, the new product innovation, and expanded markets tells us that this is a market an area of our business that will continue to see really strong growth for a long period of time.

And we’re not stopping there. We’re looking at procedures where we think our pain management devices could have a difference. So if you think of a surgical procedure, exposed nerve, you know, bigger nerve size, that’s where AtriCure really differentiates from other solutions on the market.

David Lewis, Analyst: And and what would be an example of that?

Angie Weirich, Chief Financial Officer, AtriCure: Amputation amputations is one. So but thinking beyond that and other procedures where there might be some benefit, so stay tuned. Wanna share any of those? I I don’t. There’s no late breaking news at this point.

So

David Lewis, Analyst: No news or no news that you wanna share?

Angie Weirich, Chief Financial Officer, AtriCure: No no news at this point. Okay.

David Lewis, Analyst: Maybe just wrapping up by segment on on the open ablation business. I mean, I think last year, there was a flurry of various concerns about clamps and market share and and and Medtronic’s potential impact here. Maybe how how has this kinda trended? And you’ve done well in the open ablation business, and Encompass has done really well. So

Angie Weirich, Chief Financial Officer, AtriCure: Yeah. The concerns let me start with the concerns, I think, for Medtronic are more on the AtriClip side and thinking, does that potentially impact your broader market, both AtriClip as well as your open ablation? You know, Medtronic is, you know, a competitor in that space, but not making big investments there. The revolution in cardiac surgery A fib treatment was the encompass clamp. That took a very difficult procedure.

So treating A fib and the legacy Cox Maze procedure, forty five minutes, incredibly difficult to do. Very skilled surgeons had no problem with it, but it was a barrier that we found from time to time of different surgeons didn’t like to have to get the access to the heart to be able to do the fulsome procedure. Encompass democratized treatment. Encompass made it really easy to slide the clamp in place to be able to do a nice lesion set and do something for those patients. So, we continue to invest and innovate.

You don’t see that from, you know, anybody else out there. This is an area of the field that we’re completely dedicated to. We’re also excited, very similar to our appendage management business, to be studying preventative treatments for cardiac surgery patients. So this is evolving the market to to go beyond if you have A fib in cardiac surgery, saying there’s a benefit to patients who don’t have A fib either on an acute basis. So post op A fib, there’s a significant percentage of cardiac surgery patients who will develop postoperative A fib.

So doing something to reduce your chances, effectively treating you as if you had A fib going into the procedure, as well as development of A fib over a long term basis. Encompass makes that possible. You can do the clinical trial, but if in the end you have a procedure that’s incredibly difficult to do, adoption’s probably not gonna be there. Encompass helps us get there.

David Lewis, Analyst: Okay. May maybe just kind of wrapping this together. I think, you know, for this year, you’ve guided to eleven percent to thirteen percent. Top line growth, you obviously started the year above that at fourteen percent, recognizing there’s still uncertainty probably where the minimally invasive business bottoms. We’re still and hard to know exactly what part of the PFA curve we’re in, but still in in the ramp ramping phase.

But what are some of the puts and takes for the balance of the year that that contribute to the implied deceleration in performance from q one to the rest of the year?

Angie Weirich, Chief Financial Officer, AtriCure: Yeah. I think early in the year, not as likely to to wanna raise. I’d say probably the biggest headwind would have been our minimally invasive business and, you know, was a bit the the pressure that we experienced was a bit more than we had anticipated in the first quarter. That being said, there were a couple areas of the business that ultimately outperformed our expectation. Two product launches, our AtriClip Flex Mini as well as our Cryosphere Max, both led to, you know, overall results, the 14% overall growth.

And those are things that we expect, you know, as the year continues to be areas where there’s upside to the overall guide.

David Lewis, Analyst: And and when you say that the minimally invasive dynamic came in below expectations, is that you know, you where were were was that primarily primarily just the rate of PFA adoption that that surprised you?

Angie Weirich, Chief Financial Officer, AtriCure: Yes. Because it’s hard for us to judge. It’s not been a linear trajectory here. We find accounts are incredibly distracted as they’re trying to get PFA into their hospitals, trying to figure out the workflow, how exactly that’ll be applied. And then once they have PFA technology, it’s using them on patients.

So they tend to say, okay. I’m gonna hold on doing the CONVERGE procedure. My workflow now will ask to do another one or two PFA catheter ablations before I move on to CONVERGE. So part of this is trying

David Lewis, Analyst: Work workflow being kind of the patient treatment continuum? Okay.

Angie Weirich, Chief Financial Officer, AtriCure: Correct. So and what you heard at our analyst investor day from two EPs, they basically said, look. About a year ago, I stopped referring everybody for CONVERGE. I wanted to try PFA on those patients. What I ultimately saw was effective in the near term.

So looked as if I had a great block on that patient six to nine months later. Sometimes a year later, that patient has reoccurred with their A fib, and I’ve gotta do something more fulsome for them.

David Lewis, Analyst: And and have you thought about doing you know, I I know I know this is a a push and pull between your customers, but I wanna use PFA. Yeah. So you don’t you don’t wanna, you know, necessarily deflate what your customers are doing, what they’re interested in. But at the same time, for these patients, PFA, it doesn’t really have anything to do with efficacy. It has to do with speed and speed and efficiency and maybe maybe safety.

So if you’re not doing any more aggressive marketing or clinical research to demonstrate the this segment of the population and why PFA is not the right tool for them?

Angie Weirich, Chief Financial Officer, AtriCure: Yeah. It’s such an astute question. I think that’s the balance our sales team has to strike with the customer. Even with the best clinical data, more aggressive marketing, will it change somebody’s appetite for wanting to try? And I think we’re of the mind likely an EP is gonna continue to try.

You know, we find that they’ll say, well, but in my hands, I see that study, but in my hands, I think I could potentially have better outcomes. So we’re focused much more on, okay. So try PFA. It’s super exciting. This has brought great speed to your program.

Their your patient funnel is expanding. You’re reaching many more patients. What happens when you have failures? What are you going to do next? That’s where our team is really focused with customers.

So what comes next after that point?

David Lewis, Analyst: Okay. Maybe we turn to margins. Sure. Your gross margin guidance for the year contemplates modest improvement

Angie Weirich, Chief Financial Officer, AtriCure: Yeah.

David Lewis, Analyst: Year over year. I mean, I probably some puts and takes in there. I know it’s early in the year. That that’s a hard line item to move. But help help us think about the trajectory of gross margins to the balance of 2025.

Angie Weirich, Chief Financial Officer, AtriCure: Yeah. The the stiffest headwind that we face is an international business that’s outpacing US growth, and it is exceptional growth. We take the top line benefit over kind of the impact to margin, but that’s the biggest headwind that we face.

David Lewis, Analyst: And how big a difference is there roughly?

Angie Weirich, Chief Financial Officer, AtriCure: Depend depending on the country, whether or not we’re working with distributors, you could be talking about 10 to 40 points on margin. So it is meaningful for the overall company. Even though international is around 20% of our business, it does have an impact there. Nice tailwinds that are helping margin are some of the new product launches where part of our objective in R and D is improved pricing. You’re building new differentiated technology and also improve kind of the manufacturing aspect of it.

The pricing and typically the focus on the manufacturing cost generally means it’s an improved margin.

David Lewis, Analyst: Okay. And and where can where can this go? I mean, the gross margin they’re they’re they’re Converge is probably declining probably gross margin headwind. Yes. Internationally, having bigger is gross margin headwind.

Yep. Tariffs, I don’t think you have much of an impact. That’s maybe negligible. And then you have on one side, then you have maybe scale, efficiency. Do have other other product mix opportunities?

Like, what what are the positives and negatives?

Angie Weirich, Chief Financial Officer, AtriCure: I I think you just outlined. Okay. Think all incredibly well. It’s like you’re you’re an operator at one point in time.

David Lewis, Analyst: Sales, but trying. So

Angie Weirich, Chief Financial Officer, AtriCure: No. You you hit it. I’d say the to the balance, mix will have an impact, I’d say, but the there used to be a point in time in NaturaCure’s kinda life where Converge was was significantly disconnected from a lot of our other products. When you think about the newer product launches that we’ve had, we’re we’re driving margins that are getting closer to a converged margin. So even with the pressure there, I’d say US margins are improving.

The international side, we’re improving. I’d say that that one’s a I again, I would take top line growth over kind of the impact to margin any day and continue to be really focused and intentional when we bring products to market on the pricing in those countries.

David Lewis, Analyst: And how do you think about that top line versus You’ve crossed the chasm. Right? You are profitable. You I know you have objectives to be meaningfully more profitable.

You set out at the LRP, but how do you, like, how do you you’re you’re at a point nine nine you’re 9% adjusted EBITDA margin in in your guidance. So small moves in that in can really have a significant impact. So how do you how do you think about those trade offs? Because it doesn’t sound like growing double digits on the top line automatically gives you operating leverage.

Angie Weirich, Chief Financial Officer, AtriCure: Yeah. I would agree with that. I think the expansion of top line is just one component. What you’re seeing, though, is leverage in SG and A leading up to this time frame. This is an area where AtriCure had invested significantly.

We touched on kind of building out a fully new sales team for Cryo Nerve Block in advance of the PMA for CONVERGE, we rapidly expanded that team, you know, and made sure that we were prepared to launch in the in the right way. This was also a period of time where cardiac surgery were focused on training doctors and building out that team as well. As I think forward and think about some of the big catalysts and initiatives, we’re in a great place, which is you’ve got established teams where you can hand over the clinical data, you can hand over the new products, and you’ve got a team that’s ready to go. You’re not building something out. You’re augmenting based on pace of growth.

So top line expansion is part of it. You’re gonna see leverage through SG and A. That’s a big area. Modest improvements to gross margin. That’s kinda what we contemplated as we thought through kind of the next five years.

And then r and d very naturally will start to see leverage. Over the past several years, r and d has escalated pretty significantly. The LEAPS clinical trial is one of the big drivers there. Even with some of the newer trials like VOXNOAF, they don’t rival the spend that we’ve got on LEAP, so you’ll see some natural leverage. But our focus as a company is grow, grow, grow, make sure that we’ve got ways to continue to hold a really steady and good growth rate.

David Lewis, Analyst: And and and on the SG and A point, can you give us a little bit more flavor on the leverage in S and M versus g and a? You know, some companies at your scale have lots of inefficiencies in g and a and big opportunities there. Where where does it where where where are the biggest potential sources of leverage?

Angie Weirich, Chief Financial Officer, AtriCure: I think it’s probably between the two. There is within g and a, and we’re starting to see that very practically, I’d say, day to day here over time. I’d say that represents itself in the numbers maybe in a bigger way. Within our SMT, I think we found more leverage within training. I think COVID made us think about training our customers in a different way.

There was a period of time where you couldn’t be with customers, and so you found any way that you possibly could. We talked about mobile labs on many earnings call, bringing training to customers. Then we took took a couple steps back and said, what’s the most impactful? What was great about was being able to bring the training, but a one on one has a very different flavor than you’re in a room packed full of surgeons or EPs or health care practitioners who are around these patients, and you’re hearing firsthand, oh, these are the challenges that I faced when I started a CONVERGE program or when I was a cardiac surgery surgeon learning how to do a Cox maze procedure. These were some of the things.

I think we found just more efficient ways that were driven less about cost savings and more about how can be most impactful from an education standpoint. And we’ve long said education is an area where we think we differentiate in market.

David Lewis, Analyst: Okay. And maybe just I wanna come back to the LRP in a But as you think about 2025, like, you had a good first quarter above the full year guidance. Have you kind of thought about the puts and takes in the 11% to 139% operating margin? If you ended up at like 129%, would you say would you guys be happy with that, or did you you set this guidance, was it kinda like, you know, let’s keep this in check, we’re trying to be conservative?

Angie Weirich, Chief Financial Officer, AtriCure: Yeah. Our philosophy on guard guidance is not to be happy with achieving the range that we gave out. Our philosophy on guidance is to guide to numbers that investors feel really good about our ability to achieve while there’s still being upside, so reason to beat. And I think if you looked out at the company over a very long period of time, that has manifested itself in the performance of the company.

David Lewis, Analyst: Okay. And and on the the LRP, I mean, 2030 is a long way way away. And and I and I and I know there was sort of a a revenue number that that that that that tells a story. But, like, if you thought about, we wanna get out and do this LRP. We wanna give a multiyear give investors a window into what we see as a multiyear outlook.

What what were you what was really the what were you trying to achieve with that? Because, like, on the one hand, I I say, okay. Stocks are under pressure. People are questioning the growth rate. This is a way to kind of manage perspective on what long term growth growth could be, but you you still embedded an acceleration in the outer years to get there.

So, like, how did how did you think about laying that out?

Angie Weirich, Chief Financial Officer, AtriCure: Yeah. Part of 2030 being the target is internally many years ago, Mike Carroll, our CEO, set out a vision 2030 for the company, and it was a rallying cry to say, we can and will accelerate growth. We’re coming out of COVID. We’ve invested in a lot of different areas. AtriCure can and will accelerate growth and be prepared.

Think further out to the future than you ever have. You think about it. Pre COVID, we were 200,000,000 or so in revenue, and it was we have everything it’ll take to get to a billion dollars by the end of this decade, so prepare yourself. And that meant different things across every sing single function within the company. So part of this was linking to and we brought people to Cincinnati, Ohio.

Wanted them to feel kind of what we feel and see every day as a company and the excitement that we have. So part of that was bringing the investment community in on, look. This is what we’re driving towards as a company. So part of the acceleration that you see in the LRP between now and 2030 is things like the clinical trials, box no AF, where prophylactic ablation, not likely to have a big uptick before you see data, but the nice thing about that particular trial is you get data in two different forms. It’s following postoperative AFib, so thirty days post every patient.

We’re gonna know, did it have a benefit to those patients? So that likely says you’re gonna see data within a short period of time once you’ve finished enrollment, which we hope is pretty rapid. You’ll also follow those same patients for three years and see what the benefit is. Part of that is, I think, when we get data, that will push more of the surgeon community to do this, to to consider preventative treatment.

David Lewis, Analyst: K. And and maybe just on adjusted EBITDA and free cash flow, both of which inflect significantly over the LRP from where you are today from, you know, more than doubling your adjusted EBITDA margin. Maybe we Yeah. Maybe we could start with that. Talk us through how you if I kind of put together what you talked about previously is R and D, kinda starting to see natural leverage Yep.

Modest gross margin expansion. It seems to put a lot of onus on SG and A leverage to get there. Is that a fair way to look at it?

Angie Weirich, Chief Financial Officer, AtriCure: I think it depends on when you we are counting between r and d and and SG g and a. You know, what is true modest leverage. I mean, I think naturally, r and d, we’re not cutting programs. We’re investing pretty heavily here. But LEAPS is such a unique clinical trial, and the spend associated with that is very unique.

David Lewis, Analyst: How much is that again?

Angie Weirich, Chief Financial Officer, AtriCure: We haven’t quantified, but think, tens of millions of dollars over a number of years. So and if you look at the ramp in r and d over the past two or three years, you can definitively see the impact from leaps. So we started enrollment just two years ago. And from that point on, you saw a pretty big drive increase in r and d. So definitely pressure on SG and A, but I think when you think the life cycle of where we had invested within, particularly in SMT, heavy investments kind of leading up to this time frame.

And each one of the opportunities that we’ve talked about, whether it’s amputations, it’s prophylactic ablation or clipping, you have a ready made sales team where you can hand over kind of these new products or clinical data.

David Lewis, Analyst: And the other opportunities that you don’t wanna tell us about.

Angie Weirich, Chief Financial Officer, AtriCure: There’s just always something more. I think that’s one of the greatest things about AtriCure, things that you didn’t think would be possible. I joined the company in 2014. We were not talking about pain management at that time. This was an A fib company that was cardiac surgery focused, wanted to get into minimally invasive treatments in a more fulsome way, and that someone has an idea somewhere and says, I think we could do this and be incredibly successful.

Our pain management franchise was born in 2019. And when I look at it today, it’s incredible what we’ve done.

David Lewis, Analyst: And and then on on cash flow, I mean, also a very big target for Yeah. For free cash flow conversion moving from about cash flow cash flow breakeven is slightly positive this year. Doubling sales would seem like you will need incremental CapEx over over the LRP period. So so how do you how do you what’s the bridge to the con that that level of free cash

Angie Weirich, Chief Financial Officer, AtriCure: Yeah. The improvement on profitability gets you most of the way there, and there aren’t big structural things, investments that we need to make within CapEx. So the target that we put out there says, look. You can make those types of investments, but there isn’t You don’t need to create a completely new facility that AtriCure is financing. Like, we’ve got everything kinda we need to on that trajectory to make it there.

David Lewis, Analyst: Okay. I’ll close on capital allocation. You know, the the the categories you serve are, I would say, provide good opportunity because they’re in sort of niche in nature. You can own them and have a a strong competitive position, but at the same time, don’t offer obvious adjacencies from an m from an from an m m and a standpoint. Yep.

So how do you think about acquisitions? And to what extent is that a significant part of of of your Mike Mike’s time thinking about other things to bring into the portfolio?

Angie Weirich, Chief Financial Officer, AtriCure: Yeah. We I think we spend, and we’ve got business development, you know, within the company. I think they spend a significant amount of time trying to understand the landscape, who’s out there either developing new products that may have placed somewhere in our markets or if there’s some adjacency. I think we try and understand kind of the landscape in a very deep and detailed way. That being said, while m and a played a bigger role, you know, historically for the company, there’s so many great organic opportunities internally.

It’s just not our focus at this point in time. But, also, say, historically, when the company did m and a, more of an appetite to take on companies that were losing money. You know, we feel very strongly today that if that were the case, that there would be something else within the p and l that we need to give. We do not wanna take steps backwards on our bottom line trajectory.

David Lewis, Analyst: Excellent. Okay. Well, in the couple of time we have left, maybe I’ll turn it back to you. Any any closing remarks or key takeaways that you wanna presentation.

Angie Weirich, Chief Financial Officer, AtriCure: Yeah. I would just I would say the same goal that we had at the analyst investor day, the breadth of opportunity at the company, you know, kind of being the leader in each of the markets that we serve. You’ve also seen a company that has grown its addressable market opportunity significantly, you know, over the last ten years, and we’re not satisfied with stopping there. So continue to drive incredible market expansion, continue to drive double digit revenue growth, and all of that wrapped up now in a new area where we are profitable.

David Lewis, Analyst: Excellent. Well, we very much appreciate you Thank the trip. And for those those sticking around this this evening, we have, at 04:45, a panel with Goldman Sachs Capital Markets on the state of on on the state of dynamics there with respect to health care. So it should be an interesting panel to invite everyone to to join that. Nice.

Angie, thank you for making the trip.

Angie Weirich, Chief Financial Officer, AtriCure: Thank you, David.

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