Earnings call transcript: CVRx Q2 2025 results show revenue growth

CVRx Inc. reported its earnings for the second quarter of 2025, revealing a revenue increase but a larger-than-expected loss per share. The company posted a net loss of $0.57 per share, slightly missing the forecast of a $0.52 loss. Revenue, however, exceeded expectations, reaching $13.6 million against a forecast of $13.29 million. Despite the revenue beat, CVRx’s stock saw a slight decline of 0.53% in after-hours trading, closing at $7.56.

Key Takeaways

• CVRx reported a 15% year-over-year revenue increase to $13.6 million.
• The company missed its EPS forecast, reporting a net loss of $0.57 per share.
• Stock dipped 0.53% in after-hours trading following the earnings release.
• The company is expanding its sales territories and implanting centers in the U.S.
• Full-year revenue guidance remains between $55 million and $57 million.

Company Performance

CVRx demonstrated solid revenue growth in the second quarter, with a 15% increase compared to the same period last year. The company’s focus on expanding its presence in the U.S. market, particularly in heart failure treatment, has contributed to this growth. However, the larger-than-expected net loss highlights ongoing challenges in achieving profitability. The company’s U.S. heart failure revenue stood at $12.2 million, underlining its strong market position.

Financial Highlights

• Revenue: $13.6 million, up 15% year-over-year
• Earnings per share: -$0.57, compared to a forecasted -$0.52
• Gross profit: $11.5 million, up 16% year-over-year
• Gross margin: 84%
• Cash and cash equivalents: $95 million

Earnings vs. Forecast

CVRx’s actual earnings per share fell short of expectations, with a reported net loss of $0.57 per share against a forecast of $0.52. The earnings miss represents a 9.62% surprise. In contrast, revenue exceeded forecasts by 2.33%, coming in at $13.6 million compared to the expected $13.29 million. This mixed performance reflects both the company’s growth potential and the challenges it faces in cost management.

Market Reaction

Following the earnings announcement, CVRx’s stock declined by 0.53% in after-hours trading, closing at $7.56. This movement reflects investor concerns over the earnings miss, despite the positive revenue surprise. The stock remains near its 52-week low of $4.30, indicating ongoing market caution. The broader market trends and sector performance will likely influence future stock movements.

Outlook & Guidance

CVRx maintains its full-year revenue guidance of $55 million to $57 million, signaling confidence in its growth strategy. Analyst consensus gathered by InvestingPro suggests potential upside, with price targets ranging from $7 to $14 per share. The company is focusing on expanding its sales territories and enhancing its product offerings. Looking ahead, CVRx aims to improve productivity and continue clinical evidence generation efforts, which are expected to support future growth. The company maintains a strong liquidity position with a current ratio of 14.8, providing ample resources for its expansion plans.

Executive Commentary

Kevin Hekes, CEO of CVRx, stated, "Our sales force stabilization efforts are paying off," highlighting the company’s focus on strengthening its sales team. He added, "We’re steadily moving towards making Barostim a standard of care for the treatment of heart failure," emphasizing the company’s commitment to innovation. Jared O’Shine, CFO, expressed confidence in the company’s strategy, saying, "We continue to believe we have the right team and strategy in place."

Risks and Challenges

• Profitability: The ongoing net losses highlight challenges in achieving profitability.
• Market competition: Increased competition could impact market share and pricing strategies.
• Regulatory hurdles: Navigating FDA discussions and securing approvals for new products remain critical.
• Reimbursement strategies: Changes in Medicare reimbursement could affect revenue streams.
• Sales force productivity: Ensuring effective onboarding and training of new sales representatives is essential for growth.

Q&A

During the earnings call, analysts focused on the productivity of the sales force and the ramp-up of new hires. Questions were raised about the company’s reimbursement code strategy and its potential impact on revenue. Analysts also inquired about the expansion into Tier 3 and 4 accounts, seeking clarity on the company’s growth prospects.

Full transcript - CVRx Inc (CVRX) Q2 2025:

Operator: Good afternoon, ladies and gentlemen. Welcome to today’s CVRx Q2 twenty twenty five Earnings Call. At this time, all participants are in a listen only mode. Later, you will have the opportunity to ask questions during our question and answer session. Also, today’s call is being recorded.

Now at this time, I’d like to turn things over to Mr. Mike Valle with ICR. Mr. Valle, please go ahead, sir.

Mike Valle, IR Representative, ICR: Good afternoon. Thank you for joining us today for CVRx’s Second Quarter twenty twenty five Earnings Conference Call. Joining me on today’s call are the company’s President and Chief Executive Officer, Kevin Hekes and Chief Financial Officer, Jared O’Shine. The remarks today will contain forward looking statements, including statements about financial guidance. These statements are based on plans and expectations as of today, which may change over time.

In addition, actual results could differ materially due to a number of risks and uncertainties, including those identified in the earnings release issued prior to this call and in the company’s SEC filings. I would now like to turn the call over to CVRx’s President and Chief Executive Officer, Kevin Heitz.

Kevin Hekes, President and Chief Executive Officer, CVRx: Thanks, Mike. Good afternoon, and thank you for joining us for our second quarter earnings call. We delivered total revenue of $13,600,000 in the second quarter, a 15% increase over the same quarter last year. U. S.

Heart failure revenue was $12,200,000 We ended the quarter with two forty active implanting centers in The United up from two twenty seven at the end of Q1 twenty twenty five and ’1 hundred and 89 at the 2024. We also expanded to 47 U. S. Sales territories, up from 45 at the end of Q1. Our sales force transformation is proceeding according to plan.

We are largely through the necessary transitions in the sales team that we initiated in Q4 and turnover is returning to normal. Importantly, we have aggressively hired since January to fill the open roles with strong talent. While we are enthusiastic about the team in the field, they are still early in their tenure with more than 35% of territory managers hired since January 1. In addition, over half of our area sales directors have joined in the last twelve months, and all of them bring a significant level of management experience to this team. Overall, the quality of the talent that we’ve attracted has been exceptional, and these new reps and sales leaders are developing their expertise in our technology and clinical data and becoming increasingly comfortable in their regions and territories.

As we near the end of the sales force transformation and as turnover returns to normal, we are shifting our focus from hiring to further optimizing our onboarding and training as we seek to increase the productivity of these new territory managers. We expect territory expansion to resume as territory managers hired early this year become increasingly productive. In parallel, we’re seeing encouraging results from our refined approach to developing sustainable BarrelStim programs. Our strategy of targeting centers based on indicators of potential and applying best practices is showing positive signs of traction and is evolving as we gain deeper insights into what makes accounts successful. We’ve observed that in some instances, the right combination of clinical champion and administrative support may matter as much as heart failure patient volume or new technology adoption history alone.

While we are still primarily focused on adding Tier one and Tier two accounts, some of our most promising recent successes have been with centers that don’t qualify as Tier one or two centers under our current segmentation model. For example, some centers in lower tiers act as satellite centers beneath a Tier one flagship and can serve as a future path into the flagship account. In addition, some centers that were excluded from our segmentation because they were not Cardio MEMS adopters in the past can in fact be good opportunities for Barostim with the right clinical champion and administrative support in place. While our initial segmentation approach will continue to serve as a valuable guide, we will opportunistically add Tier three and four accounts where we are convinced that they can develop a successful Barostim program. We’re identifying the right combination of clinical champions, administrative partners within these accounts and expanding our network to include multiple prescribers per center as well as relationships with referring physicians and advanced practice providers in the surrounding community.

The compensation plan that we implemented earlier this year encourages these program building behaviors and is effectively driving the desired results across the team. The early results of our go to market strategy are encouraging. An increasing number of centers are meeting multiple, if not all four criteria for qualifying as a sustainable BarrelStim program. Our approach to dabbler accounts remains unchanged. We’re making strategic decisions about where to invest resources, either working with underperforming accounts that have the potential to become sustainable programs or stepping back where the opportunity is limited.

This account cleanup helps our utilization and lets our team focus their efforts on accounts where they can have the greatest impact. Our reimbursement strategy continues to advance, reducing one of the main barriers to adoption for this therapy. First, CMS has proposed maintaining the assignment of the Barostim implant procedure to new technology APC-fifteen 80 with its associated payment of approximately $45,000 for procedures performed in the outpatient setting. For the second year in a row, CMS is soliciting comments about the need for a Level six neurostimulator APC. We expect CMS will publish the 2026 Medicare Outpatient Payment System final rule in November, and it will take effect on 01/01/2026.

Second, the transition to category one CPT codes in January 2026 represents a significant milestone that will directly benefit our commercial efforts. The proposed Medicare physician fee schedule released July 15 specified 11 work RVUs for the Barostim implant procedure, translating to a national average physician payment of approximately $550 consistent with our expectations. Overall, the transition to a Category one code will eliminate the experimental and investigational denials regularly seen with Category three codes, improve prior authorization predictability and ensure that physicians are paid fairly and consistently for procedure. These reimbursement updates follow the positive development of 10/01/2024, when Barostim was assigned to a higher paying MS DRG for inpatient procedures. Together, these three reimbursement improvements over the past nine months underscore the value of Barostim and reinforce its role in the heart failure care continuum.

Moving to our clinical strategy. Our clinical evidence generation efforts are gaining momentum on multiple fronts as we continue building the robust data foundation necessary to support Barrostim’s adoption as a standard of care. Our discussions with FDA on a Category B IDE randomized controlled trial design are progressing. The proposed trial would include patients with an ejection fraction of up to 50% and an NT proBNP up to 5,000. Assuming we reach agreement with FDA on a trial design, we will then approach CMS to seek coverage for the procedures performed in the trial on Medicare patients as this coverage is a prerequisite for moving forward with the trial.

As appropriate, we will provide additional updates. Beyond the randomized controlled trial, we continue to develop additional clinical evidence through investigator sponsored research, multicenter trials and real world data. This directly supports our commercial efforts by strengthening the foundation of evidence to support physician adoption of the therapy. This further demonstrates our continued commitment to advancing the science behind baroreceptor neuromodulation. As a reminder, our final area of focus is on building awareness of Barostim.

We continue to implement these efforts through a variety of educational programs at the local, regional and national level with physicians and advanced practice providers or APPs. We increased our focus on APPs starting in Q1 with over 100 educational programs being completed year to date. These events are driving strong interest and awareness in Barrostim therapy from community based APPs who manage most of our indicated heart failure patients on a day to day basis. We believe these efforts are meaningful in moving Barrostim towards standard of care given that these providers are instrumental in managing potential Barrostim patients in the community. We are looking forward to attending the Heart Failure Society of America meeting this September, one of the most important heart failure meetings of the year, which gives us a great opportunity to connect with key opinion leaders and physicians and to continue to raise awareness of Barostim therapy.

To wrap up, we delivered a solid second quarter with revenue growth in line with our guidance and expectations. Our work to transform the sales force is progressing well, and we’re building momentum in the development of sustainable BarrelStim programs. The positive developments in reimbursement and clinical evidence set us up well for continued growth in the future. Now, I’d like to turn the call over to Jared for a financial review.

Jared O’Shine, Chief Financial Officer, CVRx: Thank you, Kevin. Let me walk through our second quarter financial results. Revenue was $13,600,000 for the three months ended 06/30/2025, an increase of $1,800,000 or 15% over the prior year period. Revenue generated in The U. S.

Was $12,200,000 for the three months ended 06/30/2025, an increase of $1,600,000 or 15% over the prior year period. Heart failure revenue in The US totaled $12,100,000 and $10,500,000 for the three months ended 06/30/2025 and 2024 respectively. Heart failure revenue units in The US totaled $3.87 and $3.39 for the three months ended 06/30/2025 and 2024 respectively. The increases were primarily driven by continued growth in The U. S.

Heart failure business as a result of the expansion into new sales territories, new accounts and increased physician and patient awareness of Barostim. As of 06/30/2025, the company had a total of two forty active implanting centers in The U. S. As compared to two twenty seven as of 03/31/2025. Active implanting centers are customers that have completed at least one commercial heart failure implant in the last twelve months.

The number of sales territories in The US increased by two to a total of 47 during the three months ended 06/30/2025. Revenue generated in Europe was $1,300,000 for the three months ended 06/30/2025, an increase of $200,000 or 19 percent over the prior year period. Total revenue units in Europe decreased to 61 for the three months ended 06/30/2025 compared to 63 in the prior year period. The number of sales territories in Europe remained consistent at five for the three months ended 06/30/2025. Gross profit was $11,500,000 for the three months ended 06/30/2025, an increase of $1,500,000 or 16% over the prior year period.

Gross margin was 84% for each of the three months ended June 2024. R and D expenses decreased $300,000 or 11% to $2,500,000 for the three months ended 06/30/2025 compared to the prior year period. This change was driven by a $300,000 decrease in compensation expenses. SG and A expenses increased $2,200,000 or 11% to $23,400,000 for the three months ended 06/30/2025 compared to the prior year period. This change was primarily driven by a $1,400,000 increase in compensation expenses, a $800,000 increase in travel expenses and a $400,000 increase in non cash stock based compensation expense, partially offset by a $500,000 decrease in advertising expenses.

Interest expense increased $500,000 for the three months ended 06/30/2025 compared to the prior year period. This increase was driven by the interest expense on higher levels of borrowings under the term loan agreement. Other income net increased 200,000 for the three months ended 06/30/2025 compared to the prior year period. This increase was primarily driven by more interest income on our interest bearing accounts. Net loss was $14,700,000 or $0.57 per share for the three months ended 06/30/2025 compared to a net loss of $14,000,000 or $0.65 per share for the prior year period.

Net loss per share was based on 26,100,000.0 weighted average shares outstanding for the three months ended 06/30/2025 and 20 one point 6,000,000 weighted average shares outstanding for the prior year period. As of 06/30/2025 cash and cash equivalents were $95,000,000 Net cash used in operating and investing activities was $8,000,000 for the three months ended 06/30/2025 as compared to $10,200,000 for the prior year period. Now turning to guidance. For the full year of 2025, we narrowed our revenue and operating expense guidance. We now expect total revenue between $55,000,000 and $57,000,000 We continue to expect full year gross margin between 8384% and we now expect operating expenses between $96,000,000 and $98,000,000 For the 2025, we expect to report total revenue between $13,700,000 and $14,700,000 With that, I’ll turn the call back to Kevin for closing remarks.

Kevin Hekes, President and Chief Executive Officer, CVRx: Thank you, Jared. Looking ahead, I’m confident about the direction of our business and the momentum that we are building. Our sales force stabilization efforts are paying off. Our strategic focus on sustainable BarrelStim programs is gaining traction, and we’re making solid progress on clinical evidence, therapy awareness, and reimbursement. With strong fundamentals and a remarkably predictable and effective therapy, we’re steadily moving towards making Barostim a standard of care for the treatment of heart failure.

Before we open the line for questions, I’m excited to announce that Brent Binkowski was appointed to our newly created Chief Operating Officer role and will be joining CVRx in August. He will be responsible for research and development, operations, regulatory affairs and quality at CVRx. Brett brings over twenty years of leadership experience in medical devices with expertise in implantable devices covering interventional cardiology, radiology and urology. His experience building world class teams and scaling businesses will be of great value to the company. Now, I’d like to open the line for questions.

Operator?

Operator: Thank you, Mr. We go first this afternoon to John Young of Canaccord.

John Young, Analyst, Canaccord: Thanks for taking the question. I just want to go over the narrowed guidance maybe. And just maybe you could walk us through how the narrowed guidance contemplates the ramp of 35% of the new territory managers that are new that you highlighted in the call commentary. Thank you.

Jared O’Shine, Chief Financial Officer, CVRx: Yes, appreciate the question, John. Yes, I mean, with narrowing the end to be 55 to $57,000,000 it really only moves the midpoint by about $500,000 It’s not too dissimilar to our approach in prior years, where we start to bring that range of 3,000,000 down to a range of $2,000,000 as we go from Q2 to Q3. And it really just does come back to how quickly we’re getting this new team up to speed and getting them productive. We continue to believe we have the right team and strategy in place, And now it’s simply focusing on getting those reps up that productivity curve as quickly as possible.

John Young, Analyst, Canaccord: And Jared, maybe as a follow-up to there for that one. Commentary you guys gave on Tier three and four accounts where you have this clinical champion and then admin support as well. How do you guys measure that? I understand Tier one and Tier two, you guys have a lot of data for targeting and all that too. But for these Tier three and four accounts that have this characteristic, does the rep need to go in and find this out for themselves?

And could this further slow the commercial process? Thanks again for taking the questions.

Jared O’Shine, Chief Financial Officer, CVRx: Yeah, appreciate that question too, John. No, it is not something that we put on to the reps themselves. It’s all data that we’re tracking internally and providing to the reps as part of that playbook that we’ve talked about. So, since Kevin joined, we talked about implementing these go to market playbooks that we’re giving to these reps. And in there, it includes all the data on heart failure diagnoses, number of cardio MEMS procedures done, MitraClips, Watchman, all of that data to help rank the accounts between tiers one, two, three and four.

And it’s based on that data that we’re giving them a guide as to which accounts we want them to open. But it also helps them understand which accounts may be more receptive to our therapy than others.

John Young, Analyst, Canaccord: Got it. Thanks again.

Operator: Thank you. We go next now to Robbie Marcus of JPMorgan.

John Young, Analyst, Canaccord: Hi. This is actually Rohin on for Robbie. Thanks for taking our question. Just want to follow-up on the prior question regarding the Salesforce reorg and kind of the progress that you’ve made in the second quarter and what’s contemplated for the balance of the year. Obviously, bringing the midpoint down off of a conservative range, just want to get a sense first, like how you’re thinking about the ramp and the cadence and what sort of assumptions you’re making around improvement.

Jared O’Shine, Chief Financial Officer, CVRx: Yeah, I can maybe touch on the guidance piece and then maybe Kevin can talk a little bit more about the Salesforce updates, Ron. So within the guidance, we’re still assuming that we’re gonna be able to activate more territories on a quarterly basis. So in Q2, we activated two new territories going from 45 to 47. We are anticipating with the reps that we hired in the first half of the year that we can start to get back on track to adding three territories per quarter. And then also within there, starting to see productivity within our accounts start to ramp up as we go into Q3 and Q4.

A large part of that guidance and the range that exists, the top end assumes that we’re gonna see more of those reps get productive and maybe at a higher level. And the lower end assumes that maybe you see a couple of those reps get productive and maybe not quite the same level. But it really just comes down to all of these new people that we brought on board, how quickly we can get them up to speed and productive in the back half of the year.

Kevin Hekes, President and Chief Executive Officer, CVRx: Yeah, and Brian, Kevin here. I’ll take the second part of the question. So I would say the terminations have returned to normal through the course of the second quarter. The hiring continues, as that obviously follows the terminations. But that is also close to being complete as well.

So we would expect our rate of turnover to be very close to sort of typical industry averages, 10% to 20% on an annual basis, as we go through the back half of the year. So we’re pleased, again, thrilled with the talent we’ve been able to attract that has continued unabated. And we’re starting to see the first of those hires back in early twenty twenty five begin to contribute to the revenue line. And so we’ll be watching closely as we get into the back half of the year. Obviously, a lot of time and energy spent onboarding that new talent and getting them as productive as possible as quickly as possible.

John Young, Analyst, Canaccord: Got it. Thanks for that. And I had a follow-up on gross margin. Based on our estimates, you came a little bit ahead in the quarter at 84.3%. Just want to understand why you chose to keep the guidance consistent.

Is there anything that implies kind of a decline from here in the back half? Just things to keep in mind as we model that. Thanks.

Jared O’Shine, Chief Financial Officer, CVRx: Yes, not much of a story here, Rowan. So I think we’ve been consistently in that 83% to 84% range. I think we beat in the second quarter by a little bit, probably due more to price than to cost. But as we continue to produce more and more units, we could see that cost number come down as well. I don’t think we moved to the number enough in the second quarter to adjust the full year guide of the 83% to 84%.

But still feeling pretty good about being able to continue similar numbers in Q3 and Q4.

John Young, Analyst, Canaccord: Thank you. You.

Operator: You. We go next now to Matthew O’Brien of Piper Sandler.

Rohin, Analyst, JPMorgan: Hey, this is Samantha on for Matt. Thanks so much for taking our question. I guess, yeah, we want to continue the conversation on the Salesforce and kind of, the adjustments and how they’re trending. I know you mentioned that the first hires begin to contribute to the revenue line. Was that more of a Q2 or is that more recently in July?

And how quickly do you anticipate the rest can get up to productivity as well?

Kevin Hekes, President and Chief Executive Officer, CVRx: Yeah, sure. Thank you. I appreciate the question. So I think we’ve pretty consistently said it takes between six and twelve months for a territory manager to get up to speed. Those that have a background in cardiovascular medicine or heart failure do so more quickly.

Those that have a background in program building, new therapy introductions get up to speed more quickly. And those that inherit a territory that has a quality mix of accounts are able again to contribute more quickly. Conversely, those that have none of those three things are going to take closer to twelve months to begin to contribute. So I think we’re starting to see the first of those well positioned reps with highly relevant backgrounds start to contribute here in the tail end of the second quarter. We’d expect them to sort of continue in the back half of the year to ramp up, as some of the other new hires who have less experience or who have more work to do in a territory that doesn’t have the same quality of accounts, it’ll take them longer, as you can imagine.

Rohin, Analyst, JPMorgan: Thank you. And we had just one more on operating expenses, specifically SG and A. I think that came in just a little bit higher than we were modeling for the quarter. How should we think about that line item for the rest of the year as we’re modeling out here?

Jared O’Shine, Chief Financial Officer, CVRx: Yeah, thanks for the question, Sam. So that came in a bit higher than what we saw in the second quarter. But Q2 is typically where we see the highest level of SG and A, just based one time events, whether it’s marketing events that are going on during that time period, or other spend. So, we would anticipate that number to be coming down and is reflected as such in our guidance for the full year.

Rohin, Analyst, JPMorgan: Thank you.

John Young, Analyst, Canaccord: Yep. We’ll

Operator: go next now to Brandon Vasquez of William Blair.

Brandon Vasquez, Analyst, William Blair: Hey, thanks for taking the question, everyone. One of the sales reps first, as you look at that cohort specifically that are maybe less than 12 on job, mean, I you guys have talked about this a little bit, but maybe spend a minute just talking about how that cohort’s productivity has ramped recently. Is it in line with your expectations? Is there anything either surprising to the positive or the negative as those new reps are reengaging in some of the territories that maybe had a little bit of noise through this period?

Kevin Hekes, President and Chief Executive Officer, CVRx: Sure, Brandon. Thanks. I’ll take that. So I would say it is progressing as difficult as it is to predict specifically how fast a given rep will get up to speed in a given territory. I think we’re pleased with what we’re seeing.

We would not have expected much contribution for any of those reps hired since January at this point. So we’re pleased to see some early sort of green shoots from some of them. But I think that’s really the work in the back half of the year is getting them as many of them up to speed as we can, regardless of their backgrounds or the territories that they’re sitting in. We’ve added resources and focus to our sales training effort and broadened our curriculum. So lots of time shifting from hiring, really, to now training and onboarding and accelerating productivity.

Brandon Vasquez, Analyst, William Blair: Okay. And then maybe on the reimbursement side, a lot of good updates in between hit now and last quarter with the proposed rates from CMS. But maybe you guys can spend a minute just talking about going deeper into what denial rates are like, what part of the process can be difficult now with a temporary code, and then what part of it specifically you think can get a lot easier now in January when you get a category one code. We’ve seen this before in the medical device world. So just curious how you guys are viewing it today and how it might improve starting in January.

Thanks.

Kevin Hekes, President and Chief Executive Officer, CVRx: Got it. Yeah, thank you. So a couple of different ways to answer that. I think today as a category three therapy, we see 100% denials, as would anyone with a category three code. We have also mentioned, though, we have done a very effective job in appealing those denials.

And we believe we’re doing better than average across the various payer segments in securing ultimately approval for our therapy. So we’re happy with where we are. On January 1, the category three code goes away and becomes a category one code. And there’s two important elements to that. The first is that the payer’s ability to automatically deny coverage because of an experimental status, the category three status, that goes away.

And they’re forced to use a human being to review each and every prior authorization and deny it on the basis of medical necessity as evaluated by a human. And so that makes it much more, obviously, complex and expensive for them to do, and requires that level of intervention. So as you’ve seen with other therapies perhaps, we believe that while there will certainly still be prior authorizations required, the rate of approvals, the speed of the approvals, and the predictability of approval will improve, we think significantly as of the first of the year. The second piece is that the formalization of physician payment, which up until now has been negotiated on a payer by payer basis, that’s another significant step forward. And we’re pleased with where we landed, 11 work RVUs is where we thought we would land, given the SVS survey.

So we’re pleased that physicians who are for the subset of physicians who are paid for those procedures based on RVUs, they now have consistent predictable payment, which is not something we could always say up until now, which you can’t often say with a category three. So two really important steps forward in January.

Operator: Thank you. We’ll go next now to Frank Takinen of Lake Street Capital Markets.

Frank Takinen, Analyst, Lake Street Capital Markets: Great. Thanks for taking the questions. I’ll also start in the reimbursement world. Related to the OPPS, I assume you will put forth comments related to a level six code. But maybe take us a little bit deeper into what that may consist of, and if there’s anything in addition you may be asking for in the comment period.

Kevin Hekes, President and Chief Executive Officer, CVRx: Sure. Thanks, Frank. I’ll take that. So we were very pleased for the first time to be starting this process in the Newtek APC 1580. We think that’s a recognition by CMS that we do not belong in level five.

So we were pleased to see that. We were also pleased that CMS, again, the second year, solicited comments on the value of a level six code. And so we think those are both positive signals. We’re going to run the exact same playbook this year that we have in the past. Even if we’re starting in a better place, we’re soliciting comments from physicians, administrators, stakeholders on Capitol Hill in support of this level six code, the same five companies are fighting for it this year that fought for it last year.

And so while there’s some slim chance that they would in fact grant that code this year, we’re very comfortable staying in fifteen eighty. And there’s no reason we can’t stay in that fifteen eighty new tech for a number of years going forward.

Frank Takinen, Analyst, Lake Street Capital Markets: Got it. That’s helpful. And then maybe one on kind of Tier onetwo versus Tier threefour. I assume you’re not going to go in too much detail on composition of additions, but any kind of broad strokes you can provide, like majority were Tier onetwo or majority were Tier threefour? And then any kind of characteristics of expected launch trajectory of those two buckets which may scale quicker?

Jared O’Shine, Chief Financial Officer, CVRx: Yeah, Frank, like you said, I’m not gonna go into the weeds on exact percentages, but what we can say is our go to market strategy and our targeting approach is working. We are seeing a higher percentage of the account ads in Q2 in that tier one and tier two bucket as compared to what we saw in Q1. So, I think the team is listening. They’re understanding the whys behind it. And part of that is driven by the utilization we’re seeing in those accounts because we are seeing higher utilization, more implants, more revenue in tier one and tier two accounts than the others.

So I think they’re understanding that it’s not just something that we’re kind of making up as we go, but that it actually delivers real results. And I think as a result of that, we’re seeing more of those accounts get added each quarter.

Frank Takinen, Analyst, Lake Street Capital Markets: Got it. Okay, that’s helpful. Stop there. Thank you.

Operator: We’ll go next now to Chase Knickerbocker of Craig Hallum.

Chase Knickerbocker, Analyst, Craig Hallum: Good afternoon. Thanks for taking the questions. Kevin, I just want to start on the level six code as well. So you had said kind of a slim chance they do it this year. Can you kind of speak to kind of the feedback that you’ve heard?

Do you just kind of take that commentary from the OPPS and that’s kind of what underlies that kind of slim chance assumption? And then, maybe just longer term, if you do stay in

Jared O’Shine, Chief Financial Officer, CVRx: the new tech APC, do you get

Chase Knickerbocker, Analyst, Craig Hallum: a sense of what kind of CMS is thinking there? Because typically that is a temporary code, right? And is it something where you think you can kind of stay in that for a number of years like you said? Or do you think ultimately they still will kind of do the level six code? Just your overall thoughts there on the OPPS.

Kevin Hekes, President and Chief Executive Officer, CVRx: Sure. So let me I guess, on the first question, we’ve consulted a fair number of experts. As you can imagine, there are instances, we understand, in the past where CMS has made a change over the course of the comment period. We’re an example of that last year, when they moved us from the proposed level five back into 1580. So it happens.

But we’re not certain that this will be the year for that. We’d like to think so. And we’re not going to give up. Conversely, is very few there was not a single instance our experts could find of a company going the other way. So we think the risk of being demoted back to level five is quite low, or would be unexpected.

So that’s the best information we’ve got. In terms of what CMS is thinking, we also know there’s no statutory limit to how long you can stay in 1580. It’s probably driven by how much data they think they need to gather in that specialized data collection mode before they can assign a different category, or create a new one, as we’re requesting. So hard to tell where their heads are at, but not surprising. And again, we’d be just fine staying in fifteen eighty for another few years as we continue to build procedure volume, and as our data again gets better and better.

And that’s the justification for the level six.

Chase Knickerbocker, Analyst, Craig Hallum: Got it. And then just on center ads, could you share the gross number? I guess kind of what I’m trying to get at is kind of you outperformed a little bit on some of the expectations you set last quarter as far as center adds. Was that kind of fewer accounts that sunsetted, fewer accounts in which you saw attrition or was that just an increase in kind of gross adds that you saw in Q2?

Jared O’Shine, Chief Financial Officer, CVRx: Yes, Chase, I can take that one. We’re not going to get into the weeds on the gross adds and churn, but I can say it’s a combination of both, right? As we said, we expect to add high single digit to low double digit number of accounts on a quarterly basis. It’s assuming that we are gonna continue to sunset some of those dabbler accounts while bringing on some of these accounts that we think have higher potential in the long run. So, I think as we look at the Q2 results, it’s a little bit over performance on ads and maybe not sunsetting as many as we originally thought going into the quarter.

But it’s going to continue to be choppy as we go quarter to quarter. So, just because we saw plus 13 in Q2, we may not see that in Q3.

Chase Knickerbocker, Analyst, Craig Hallum: Is high single digits still the right way to think about it kind of from here, Jared?

Jared O’Shine, Chief Financial Officer, CVRx: Yeah, yeah. Kind of in that range of eight to twelve, eight to 13. It’s pretty reasonable. Thanks, guys.

Operator: Thank you. We’ll go next now to Ross Osborne of Cantor Fitzgerald.

John Young, Analyst, Canaccord: Hey, guys. Thanks for taking our questions. So starting off and if I heard your prepared remarks correctly, it sounds like you’re seeing some traction with lower tiered centers acting as a referral center. Would you spend some more time here walking through this dynamic and what you can do from an awareness standpoint to get more patients to the funnel and implementation?

Kevin Hekes, President and Chief Executive Officer, CVRx: Sure. Thanks, Ross. This is Kevin. I’ll take that one. So yeah, what we were trying to point out, we’ve learned a lot over the last year as we’ve implemented this go to market strategy, which obviously starts with targeting.

And so what we’re finding, these are imperfect tools at best. And what we know is that there are actually some tier threes and fours who may not have had the chance to use cardioMEMS in the past because of payer issues, or potentially reimbursement or other kind of local factors. And we don’t want to necessarily walk away from them without understanding the facts on the ground. So in some cases, we’re finding there are really good centers with really good heart failure volume that have a clinical champion and or administrative champion, and in those cases, it’s worth considering opening a program there. And so I guess what we’re saying is it’s not as black and white as we perhaps thought initially.

We’re still leaning heavily towards the ones and twos. But there are some level threes and fours that are in fact satellites, to your question, of larger flagship accounts. And what we find in some cases is the flagship account says, hey, this is a very bureaucratic center. Why don’t you go to our sister institution, get the program started, demonstrate success, and you will make it a lot easier for us to bring you then into the flagship. And so those satellite centers in our scheme show up as threes and fours, but again, may have a lot of value and may be a faster way to get into a great big university center, for example, than a full frontal approach.

So that’s leading to some of these insights. And again, focusing on the ones and twos, but understanding if there’s pragmatic ways to get to the ones and twos through the threes and fours, it’s worth it.

John Young, Analyst, Canaccord: Understood. Makes sense. And then looking to next year, when you have a more tenured sales force and improved reimbursement environment, what if any headwinds and challenges do you need to overcome that wouldn’t allow us to see a material inflection adoption in your top line?

Kevin Hekes, President and Chief Executive Officer, CVRx: Sure. Thank you. Yes. So I would say, obviously, the reimbursement friction we think will reduced materially. We’re seeing great coverage now across the various MACs.

We think we’ll get much stronger coverage from the commercial side of Medicare Advantage folks. The headwinds associated with changing the way medicine is practiced will not change. Again, that’s kind of a long term war of attrition. The three barriers we’ve identified consistently are reimbursement, awareness, and evidence. Reimbursement is going to get better, certainly.

Awareness is getting better. As we mentioned, we did over 100 programs focused on the affiliated practice providers. We think that’s a key leverage point for heart failure. And number three, the evidence that we’ll continue to generate, both in terms of smaller investigator initiated studies, multicenter studies, perhaps a randomized control trial, that’s another critical barrier. So there will always be friction, but we think the reimbursement piece will help us significantly.

And as we grow awareness, we’ll bring that barrier down as well, in addition to the evidence work we’re doing already. So lots of work to do, but again, it’s war of attrition as you wear down these various adoption barriers that you find in the market.

John Young, Analyst, Canaccord: Okay, thanks for taking our questions.

Operator: Thank you. Ladies and gentlemen, this does conclude our question and answer session for today. I would now like to turn the call back over to Kevin Haikes for any closing comments.

Kevin Hekes, President and Chief Executive Officer, CVRx: Thank you, operator, and thanks again to everyone for joining us for our second quarter earnings call. We appreciate your ongoing support and look forward to updating you on our progress on our next call. Thanks.

Operator: Thank you, Mr. Hex. Thank you, Mr. Oshine. Again, ladies and gentlemen, that will conclude the CVRx Q2 twenty twenty five earnings call.

Again, thanks so much for joining us, everyone. We wish you all a great rest of your day. Goodbye.

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