Earnings call transcript: Penumbra Inc. beats Q2 2025 estimates

Penumbra Inc. (PEN) reported its second-quarter 2025 earnings, surpassing both earnings per share (EPS) and revenue forecasts. The company posted an EPS of $0.86, exceeding the anticipated $0.83, and achieved a revenue of $339.5 million, above the expected $327.77 million. According to InvestingPro data, the company maintains a GREAT financial health score of 3.09, with net income expected to grow this year. Despite this positive performance, Penumbra’s stock declined by 1.31% to close at $230.17, possibly due to broader market trends or profit-taking.

Key Takeaways

• Penumbra exceeded both EPS and revenue forecasts for Q2 2025.
• The company raised its full-year revenue guidance.
• U.S. sales grew significantly, while international sales saw a decline.
• Stock price fell by 1.31% despite positive earnings results.

Company Performance

Penumbra demonstrated robust performance in the second quarter of 2025, with a 13.4% year-over-year revenue growth, maintaining its strong 5-year revenue CAGR of 17%. The U.S. market contributed significantly with a 19.5% increase, while international sales decreased by 3.2%. The company’s gross margin stood at 66%, with a target to exceed 70% by 2026. InvestingPro analysis reveals the company operates with moderate debt levels and maintains excellent liquidity, with a current ratio of 6.3.

Financial Highlights

• Revenue: $339.5 million, up 13.4% YoY
• Earnings per share: $0.86, beating the forecast of $0.83
• Gross margin: 66%
• Operating income: $40.8 million
• Adjusted EBITDA: $61.4 million
• Cash and equivalents: $424.6 million, with no debt

Earnings vs. Forecast

Penumbra’s EPS of $0.86 surpassed the forecast of $0.83 by 3.61%, and its revenue of $339.5 million exceeded expectations by 3.58%. This performance reflects the company’s strong market position and effective operational strategies.

Market Reaction

Despite Penumbra’s positive earnings report, the stock fell by 1.31% to $230.17. This decline might be influenced by broader market conditions or investor profit-taking. The stock remains within its 52-week range of $148 to $310. InvestingPro data shows the stock generally trades with low price volatility, with a beta of 0.47. Subscribers can access 12 additional ProTips and comprehensive valuation metrics through the Pro Research Report, available for over 1,400 US stocks.

Outlook & Guidance

Penumbra raised its full-year revenue guidance to a range of $1.355 billion to $1.370 billion, indicating a growth of 13% to 15%. The company expects continued growth in the U.S. thrombectomy market and anticipates margin expansion and improved profitability in the upcoming quarters. With a market capitalization of $8.81 billion and trading at a P/E ratio of 207.68, investors seeking detailed valuation analysis can access comprehensive metrics and expert insights through the Pro Research Report on InvestingPro.

Executive Commentary

CEO Adam Elsesser emphasized the company’s commitment to transforming patient care and highlighted market share gains in deep vein thrombosis (DVT) and pulmonary embolism (PE) markets. "Our product is already cleared for use in PE, so there’s no approval or clearance necessary," Elsesser stated, underscoring Penumbra’s strategic positioning.

Risks and Challenges

• Decline in international sales could impact overall growth.
• Market volatility may affect stock performance.
• Achieving the targeted gross margin of over 70% by 2026.
• Competition in the thrombectomy and neurovascular markets.
• Economic uncertainties and their potential impact on healthcare spending.

Q&A

During the earnings call, analysts inquired about the impact of the STORM PE trial and the FDA review process for the Thunderbolt product. Penumbra also addressed its sales force restructuring and international market recovery strategies.

Full transcript - Penumbra Inc (PEN) Q2 2025:

Abby, Conference Operator: Ladies and gentlemen, good afternoon. My name is Abby, and I’ll be your conference operator today. At this time, I would like to welcome everyone to Penumbra’s Second Quarter twenty twenty five Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question and answer session.

If you would like to ask a question during that time, simply press star followed by the number one on your telephone keypad. Thank you. And I would like to introduce Ms. Cecilia Furlong, Business Development and Investor Relations for Penumbra. Ms.

Furlong, you may begin your conference.

Cecilia Furlong, Business Development and Investor Relations, Penumbra: Thank you, operator, and thank you all for joining us on today’s call to discuss Penumbra’s earnings release for the 2025. A copy of the press release and financial tables, which includes a GAAP to non GAAP reconciliation, can be viewed under the Investors tab on our company website at www.penumbrainc.com. During the course of this conference call, the company will make forward looking statements pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995, including statements regarding our financial performance, commercialization, clinical trials, regulatory status, quality, compliance and business trends. Actual results could differ materially from those stated or implied by our forward looking statements due to certain risks and uncertainties, including those referenced in our 10 ks for the year ended 12/31/2024, filed with the SEC. As a result, we caution you against placing undue reliance on these forward looking statements, and we encourage you to review our periodic filings with the SEC, including the 10 ks previously mentioned, for a more complete discussion of these factors and other risks that may affect our future results or the market price of our stock.

Penumbra disclaims any duty to update or revise our forward looking statements as a result of new information, future events, developments or otherwise. On this call, financial results for revenue and gross margin are presented on a GAAP basis, while operating expenses, operating income and adjusted EBITDA are presented on a non GAAP basis. The corresponding GAAP measures and a reconciliation of GAAP to non GAAP financial measures are provided in our posted press release. Non GAAP operating expenses and operating income exclude amortization of acquired intangible assets of $2,400,000 and impairment of our Immersive Health Care business of $76,900,000 in the 2024, and adjusted EBITDA excludes impairment expenses, stock compensation expense, depreciation and amortization, provision for income taxes, and interest income expenses. Adam Elsesser, Penumbra’s Chairman and CEO, will provide a business update Maggie Yuen, our Chief Financial Officer, will then discuss our financial results for the 2025 and Jason Mills, our Executive Vice President of Strategy, will discuss our updated 2025 guidance.

With that, I would like to turn over the call to Adam Elsesser.

Adam Elsesser, Chairman and CEO, Penumbra: Thank you, Cecilia. Good afternoon. Thank you for joining Penumbra’s second quarter twenty twenty five conference call. In the second quarter, we generated total revenue of $339,500,000 representing underlying year over year growth of 13.4% on a reported basis and 12.7% on a constant currency basis. Our second quarter performance reflected extraordinary ongoing execution by our commercial team against our strategy.

Together with our focus on continuous innovation, clinical and health economic data generation, together with the work physicians are doing to further expand the total number of patients treated globally with our novel technologies. Our U. S. Thrombectomy business led overall growth in the quarter with results reflecting strong continued adoption and ramping utilization of our CAVT portfolio. While our U.

S. Embolization and access business as well as our international business delivered solid growth ahead of expectations. Second quarter U. S. Thrombectomy revenue increased 22.6% year over year to a $188,500,000, led by 42% year over year growth in our USVTE franchise.

As the clinical benefits of FLASH two point o and BOLT twelve continue to support and drive further market penetration and competitive conversions. Below the top line, gross margin of 66% was in line with our prior announced expectation as we executed on our planned accelerated Ruby XL inventory build. We began shipments of XL at the end of the second quarter and enter the third quarter well positioned from an inventory standpoint to meet the strong interest in XL we’ve seen in the field to date. We remain on track and are well positioned to achieve a gross margin profile of over 70% by the 2026 and expect operating margin expansion to outpace gross margin expansion for the foreseeable future as we prioritize delivering profitable growth and an expanding profitability profile. Turning to our U.

S. Peripheral business. Our second quarter thrombectomy performance reflected the competitive strength and clinical benefits of our comprehensive current CAVD portfolio, spanning FLASH two point zero, BOLT six x, BOLT seven, and BOLT 12, alongside purposeful and focused execution by our commercial team. We treated more VTE patients in the quarter than in any prior period, supported by our team’s relentless focus and prioritization on improving patient outcomes, driving conversions from anticoagulation, lytics, and other mechanical thrombectomy platforms to CABT in both PE and DVT. In arterial, the clinical benefits of our modulated aspiration technology in BOLT seven and BOLT 6x continue to support and drive physician conversions from open surgery or the use of lytics to CABT.

Based on our consistent success and our clear view of the opportunity ahead in peripheral thrombectomy, We strategically invested in the build out of a separate peripheral embolization sales force so as to provide heightened focus in thrombectomy and embolization. We have added over 50 embolization sales reps and over 40 vascular clinical specialists. With these new hires in place, we will be able to have a team solely focused on our thrombectomy business as well as a separate team focused on launching Ruby XL and driving long term growth in our embolization business. Adding to the information we provided on our last earnings call, Ruby XL is a larger, softer, and longer coil than other commercially available coils and allows us to now participate quite effectively in about 20% of the current market that we have not been able to in the past. With the early performance of Ruby XL, we expect to see ramping benefit from our investment in our commercial team through the back half of the year and beyond, with our thrombectomy team well positioned to exclusively focus on continuing to address the significant unmet need in the treatment of clot burden throughout the body and our new AMBO team able to focus on providing our comprehensive CORAL portfolio to physicians and hospitals.

As our team drives adoption of our technology on a day to day and account by account basis, we are simultaneously focused on positioning CAVT for long term growth while enhancing our competitive position. Advancing the field through technology innovation and high quality clinical data generation is our priority. During the quarter, we completed enrollment in STORM PE, a prospective multicenter randomized controlled trial evaluating CABT plus anticoagulation versus anticoagulation alone

: for the treatment of acute intermediate high risk PE. We are committed to running trials which hold the potential to found fundamentally shift patient treatment, and STORM PE has the potential to provide level one evidence to help inform PE treatment and impact standard of care. Enrollment in STORM PE completed ahead of schedule,

Adam Elsesser, Chairman and CEO, Penumbra: and we look forward to presenting the results from the trial at a major medical conference this fall. On the arterial side, we recently announced the launch of our STRIDE two clinical study. Our initial STRIDE study, which incorporate incorporated primarily older generation technology, demonstrated compelling results, including a ninety eight point two percent thirty day limb salvage rate. With STRIDE two, we intend to both expand the patient sample size and broaden the geographic enrollment base in comparison to STRIDE, with STRIDE two focused on demonstrating the benefits of our latest generation CAVT CAVT technology. Looking forward, we will continue to invest in high quality clinical studies in tandem with our market access initiatives to highlight the significant benefits and value proposition of our differentiated current and forthcoming products.

Shifting to our neurovascular business. Excuse me. Our US stroke thrombectomy franchise delivered another solid performance, growing ahead of the underlying stroke market. In its first full quarter on the market, Red 72 Silver Label, with its enhanced trackability, continued to generate strong physician interest and saw ramping adoption and utilization. Regarding Thunderbolt, we are currently in an active process with the FDA and will provide additional updates as soon as possible.

We remain very excited to introduce Thunderbolt to the neurovascular field. At SNIS earlier this month, there was a great deal of discussion about distal occlusions in stroke. We heard many physicians confirm that our red 43 aspiration catheter is the preferred device to treat patients with distal occlusions. Finally, there was a lot of discussion among physicians about embolizing the middle meningeal artery, or MMA as it is commonly known, and the unique properties of our Swift coil that allows for the safest treatment modality. It is estimated that there are more patients that could be treated in this category than traditional cerebral aneurysms.

We are focused on investing in further innovation across our diversified neuro portfolio, spanning aspiration, access, and embolization. In summary, our second quarter results reflect solid execution by our team as we continue to deliver long term growth in multiple underpenetrated markets. We are committed to continuing to transform patient care across these markets and are excited to introduce new innovative products in the months and years ahead. I’ll now turn the call over to Maggie to cover our financial results for the 2025.

Maggie Yuen, Chief Financial Officer, Penumbra: Thank you, Adam. Good afternoon, everyone. Today, I will discuss the financial results for the 2025. Financial results on this call for revenue and gross margin are on a GAAP basis, while operating expenses, operating income and adjusted EBITDA are on a non GAAP basis. The corresponding GAAP measures and our reconciliation of GAAP to non GAAP financial measures are provided in our posted press release.

For the second quarter ended 06/30/2025, our total revenues were $339,500,000 an increase of 13.4% reported and 12.7% in constant currency compared to the 2024. Our geographic mix of sales for the 2025 was 76.8% U. S. And 23.2 international. Our U.

S. Region reported growth of 19.5%, driven by 22.6% growth in our thrombectomy franchise compared to the same period last year. As we anticipated, our international regions decreased 3.2% reported and 5.8 in constant currency, primarily due to a decrease in China revenue compared to the same period last year, which was partially offset by an increase in all other international regions. As we look ahead for the 2025, we expect headwinds in China to ease, resulting in a return to growth across all of our international regions. The sequential growth in our total revenue of 4.7% was driven by both an increase in global thrombectomy and Embolization and Access revenue across all regions compared to the 2025.

Moving to revenue by products. Revenue from our global thrombectomy business grew to $230,300,000 in the 2025, an increase of 13.1% reported and 12.6% in constant currency compared to the same period last year, which was primarily driven by growth in our U. S. Thrombectomy business of 22.6%. Our international thrombectomy business increased by 16.2%, in line with expectations primarily due to a decline in China revenue.

Excluding the impact to the China region, our international thrombectomy revenue grew by 14.4% when compared to the same period last year. Revenue from our Embolization and Access business was $109,200,000 in the 2025, an increase of 13.9% reported and 12.8% in constant currency, primarily driven by an increase in U. S. Embolization sales, underscoring the launch of our new XL product. Gross margin for the 2025 is 66% compared to 54.4% for the 2024, which includes a onetime $33,400,000 Immersive Healthcare inventory write off.

Excluding this onetime write off, the gross margin slightly increased year over year. As expected, our gross margin slightly decreased sequentially due to investment in the launch of our XL product and the high international mix of growth across all regions. As we move to the 2025, we expect to see sequential margin expansion from favorable product mix and productivity improvements. In addition, we are on track to achieve our full year gross margin targets. However, as our separate thrombectomy and AMBo teams start ramping, we might see some month to month variability in product mix.

Importantly, we remain well positioned to deliver our long term gross margin profile of 70% by the 2026. And now on to our non GAAP operating expenses, non GAAP operating income and margin and adjusted EBITDA. Total operating expense for the quarter was $183,200,000 or 54% of revenue compared to $164,500,000 or 54.9% of revenue for the same quarter last year. Our research and development expenses for Q2 twenty twenty five were $23,200,000 or 6.8% of revenue compared to $24,900,000 or 8.3% of revenue for Q2 twenty twenty four, which reflects savings of $5,200,000 due to our immersive business wind down, offset by continued investment in product development. SG

: and

Maggie Yuen, Chief Financial Officer, Penumbra: A expenses for Q2 twenty twenty five were $160,000,000 or 47.2% of our revenue for Q2 twenty twenty five compared to $139,600,000 or 46.6% of revenue for Q2 twenty twenty four. To support the momentum in demand and ensure we are positioned to capitalize on long term growth drivers, we made targeted hires in our commercial and market access teams. Sequentially, our expense increased by $6,500,000 which, as Adam mentioned, was primarily due to a deliberate front loaded investment in our embolization sales team and additional vascular clinical specialists. With a favorable hiring market to attract top tier talent, we acted to bring in a high impact commercial team, which we expect will contribute to our results in the quarters ahead. We recorded operating income of $40,800,000 or 12% of revenue compared to an operating loss of $1,600,000 for the same period last year, which includes one time $33,400,000 Immersive Healthcare inventory write off.

Excluding this one time write off, our operating profit increased by $9,100,000 We posted adjusted EBITDA of $61,400,000 or 18.1 percent of total revenue compared to $13,000,000 or 4.3% in the second quarter last year. Turning to cash flow and balance sheet. We ended the 2025 with cash, cash equivalents and marketable securities balance of $424,600,000 and no debt, which is an increase of $45,700,000 sequentially, driven by strong operating profitability. We expect positive operating cash flow trends to continue in 2025 and beyond. And now I’d like to turn the call over to Jason to discuss our updated 2025 guidance.

Jason Mills, Executive Vice President of Strategy, Penumbra: Thank you, Maggie, and good afternoon, everyone. Due to outperformance in the second quarter, we are increasing our guidance for total revenue to a range of $1,355,000,000 to $1,370,000,000 which represents 13% to 15% year over year growth. We maintain our guidance for U. S. Thrombectomy growth of 20% to 21% compared to 2024 levels.

We also maintain our guidance for both gross margin and operating margin for full year 2025. This concludes our prepared remarks. Operator, we can now open the call to questions.

: Thank you.

Abby, Conference Operator: And our first question comes from the line of Larry Biegelsen with Wells Fargo. Your line is open.

Larry Biegelsen, Analyst, Wells Fargo: Good afternoon. Thanks for taking the question and congrats on a nice quarter here. Adam, I wanted to start with STORM PE and then ask a Thunderbolt question. So it’s good that we’re going to see the STORM PE data this fall. Adam, it’s a relatively small study and we’ve seen many PE trials with RVLV ratio as the primary endpoint.

So why is this study important, and what impact could it have if positive? And I have one follow-up.

Adam Elsesser, Chairman and CEO, Penumbra: Yeah. No. It it’s a great question. As you know, Larry, it’s the first randomized study completed that we’re aware of in the world comparing anticoagulation and mechanical thrombectomy to anticoagulation alone. So we’ve seen lots of single arm studies and other things.

It’s the first randomized study that has that comparison, which is the question that everyone wants answered. So for that reason alone, it’s significant. The size of the study is a testament to the confidence in the product. Obviously, the larger the study, the more room, you know, you have to have, you know, a difference. You have a 100 patients, it’s a lot smaller number of patients to show that difference.

So it it actually is a testament to, to, I think, the confidence in the study. That being said, I think that you’re aware we put together a internationally very renowned group of physicians, to create on the steering committee of this trial, they were the ones who came up with the endpoints and the size of the study and the powering of it all. And really and these are just not interventionalists. These are noninterventionalists in the field of treating PE. So I think it’s again, we’ll wait to see the results, but I think it could have a significant impact.

And and, again, the the design of the study is a testament to, the work of some of the the the world’s experts.

Larry Biegelsen, Analyst, Wells Fargo: That’s helpful. And then on Thunderbolt, Adam, any update on how we should think about the FDA review time? Think in the past, if I’m not mistaken, you’ve pointed to precedents that had about a six month review time. And lastly, some investors, Adam, I think have construed some of your recent comments that your enthusiasm for Thunder has changed. Could you address those items, please?

Thanks.

Adam Elsesser, Chairman and CEO, Penumbra: Sure. Yeah. I don’t remember, saying six months for a clinical study. The you know, product review times vary depending on the company. That being said, I can tell you the following.

You know, we’ve worked with the FDA for many, many years, the the neuro division. I can tell you that they are thorough, which is something that I’m extremely supportive of. These are obviously products going up into people’s brains, and I’m, very supportive of that process. The process is what we expected, with the FDA. And to be honest, I I’ve heard the rumors that I’m somehow not excited.

I do not know how to say it any more than I’ve said it over and over. It is a an amazing product, and I think it will have a huge, huge positive impact for many, many people for many, many years to come.

Larry Biegelsen, Analyst, Wells Fargo: Alright. Thanks so much.

Adam Elsesser, Chairman and CEO, Penumbra: Thank you.

Abby, Conference Operator: And our next question comes from the line of Travis Steed with Bank of America. Your line is open.

: Hey, thanks for taking the question. I guess the first question I’ll ask about the Salesforce split, now is the right time and how you’re thinking about the kind of any near term disruption from that and the kind of the margin question. I I know there was a comment, kinda made on the the mix on margins.

Adam Elsesser, Chairman and CEO, Penumbra: Yeah. So the well, the margin, the comment I made about margins in my talk was we had said on the last quarter that we were accelerating the build of Ruby Excel, so there’d be a one time, one quarter impact to do that, which we saw a minor impact. That doesn’t go beyond this quarter, and I think we reiterated, very clearly that, we are on track for our 70 plus percent at the 2026. That being said, it is worth noting that the Ruby XL is their margin, given the nature of that coil and the price point, is actually accretive to our margin, and so that’s a positive for us. Why now?

For the the the the split here, it it is essential given the success that we’re having in in the thrombectomy side on that business. And our view of where that’s, you know, continued growth will come, it’s pretty pretty extraordinary opportunity that we really need to have people be able to focus. They can’t you know, they’re selling right now on the thrombectomy side alone into the arterial DVT, PE, coronary, and then to add a whole bunch of different types of embolization procedures was a lot for our reps to do and to do it well across all of their customers. So this just makes sense to do it by focus. I think we have been lucky to be able to attract literally some of the best talent there is in the field, and I think it will prove to be great for our thrombectomy business because that focus.

And to be honest, it will be allow our, our peripheral coil business, our embolization business, to continue, to be successful and probably accelerate growth, given the launch of the product and, the focus that that team has. So it makes sense all around.

: Thank you. And then kind of the second question is on The US nonvictimy business, the 20% to 241% guide. It kind of did 24% in the first half, kind of implies 18% in the second half. I know the slope stroke market slowed a bit. I know that’s kind of the main reason there, if there’s any kind of thing else you’d call out for the the second half of The US nonvectomy business.

Adam Elsesser, Chairman and CEO, Penumbra: Yeah. No. I I I think it’s fairly obvious, you know, that that we’re pretty excited about our thrombectomy business going forward. Obviously, we raised our overall guide. You know?

The quarter before, we raised our US thrombectomy guide. And I think we’re, just to be honest, trying not to get ahead of ourselves in spite of our enthusiasm right now.

: Alright. Great. Thank you. Congrats on the good quarter.

Adam Elsesser, Chairman and CEO, Penumbra: Thank you.

Abby, Conference Operator: And our next question comes from the line of Robbie Marcus with JPMorgan. Your line is open.

Robbie Marcus, Analyst, JPMorgan: Great. Thanks for taking the questions. Wanted to ask on margins and if there’s any way you could quantify the impact of the additional sales force buildup here. Gross and operating margins came in below the street. Just trying to figure out if it’s that or if it’s maybe tied to the outside US, AMBO and other, outperformance.

Maybe there was some stocking there or something like that. Thanks.

Adam Elsesser, Chairman and CEO, Penumbra: Sure. Maggie?

Maggie Yuen, Chief Financial Officer, Penumbra: No. Thanks. I can I can take on on the margin impact first? In terms of our investment in our commercial team, it has no impact to our gross margin. I think, the comment that I make about the mix as a result of the commercial team investment is because, like, Adam mentioned, of our thrombectomy and the new XL product are accretive, and they both lead to supporting our eventually our 70% margin profile.

So but in terms of the timing of the margin mix, it just could be vary from month to month, quarter to quarter. But nevertheless, we still continue to see expansion in Q3 and in Q4 at the same time. In terms of operating margin, I think investing in our commercial team has been in our strategic investment for the year. It’s just for the right timing and right opportunity, we accelerate some of the investment in Q2. But at the same time, overall, we are still maintaining our full year margin guidance, so no material impact to the out quarters.

Thank you.

Robbie Marcus, Analyst, JPMorgan: Great. Maybe a quick follow-up. Adam, now that we don’t really have a lot of detailed reporting now that your competitor has been acquired. As I’m thinking about U. S.

Thrombectomy, I was wondering if you could just give us a quick state of the union of what you think sort of the end market growth rates are in stroke in the different areas in peripheral. As I’m looking at U. S. Thrombectomy, reiterating the guide implies a deceleration the back half of the year. I’m just trying to figure out what’s your weighted average end market growth in U.

S. Thrombectomy relative to the penumbra growth rate implied? Thanks a lot.

Adam Elsesser, Chairman and CEO, Penumbra: Yes. It’s a fair question. It’s, as you know, hard to get accurate, market information, particularly when we’re the only ones sort of talking about our numbers. You know, you can’t really triangulate them with other people’s real numbers, so you’re getting these sort of partial datasets and trying to triangulate it. So I don’t I don’t wanna overrely on those kind of, sources because they’ve proven not always to be accurate as everyone knows.

Let me I’ll share sort of the best I can sort of how we’re going. Obviously, our VTE growth is leading the way third quarter in a row of over 40%. Obviously, the market isn’t growing at 40%. It’s growing, you know, somewhere around 20%, give or take, is our best guess. So, again, we’re continuing to take share there.

The arterial business, again, it’s it’s less about a market growth there because you’re really treating all those patients, but mostly with open surgery analytic. So it’s moving, you know, those patients from one modality to us. That had another very strong quarter. You know, we grew similar to what we’ve done in the past couple of quarters. The market growth in neuro, you know, I won’t you know, I’ll be honest, was a little soft, but we continue to grow well above that number as best we can tell because of the setup with red 72 Ascended, the the silver label version.

And and, frankly, it puts us in a really, really good position. I’ve always said that we wanna try to move physicians to that product in anticipation of the Thunderbolt launch, and I think it’s given us that opportunity to really do that. And having growing above the market shows that the share is shifting, and the setup for Thunderbolt is great. And and then, obviously, you know you know our coronary business, it’s a much more mature business, and it’s obviously not growing at those same levels.

Robbie Marcus, Analyst, JPMorgan: Very helpful. Appreciate it, Adam.

: Yeah. Of course.

Abby, Conference Operator: And our next question comes from the line of Richard Newitter with Truist. Your line is open.

Richard Newitter, Analyst, Truist: Hi. Great. Thanks for, taking the questions. Congrats on the quarter. I wanted to go back to the, kind of some of the the Salesforce initiatives you have going on here.

Adam, you had you know, in in late twenty three, I believe, you know, you you you the the need for an expanded sales organization with so many different call points kinda coming in. And and that was kind of more feet on the street. And here, you’re you’re taking a little bit of a different approach, you know, splitting the the sales organization. You gave the rationale and an answer to a prior question. I’m just curious, how do we think about the impact to the business and the time that will take to get the return on that investment or the payoff, you know, before one plus one equals two?

You know, and if you can compare and contrast kind of, you know, this initiative versus the prior one.

Adam Elsesser, Chairman and CEO, Penumbra: Yeah. It’s a it’s a fair question. The good news is, we aren’t starting the process of hiring those people. We’ve already hired them all. Vast majority of them have fully been trained and and in the last, you know, month or so have been, sort of operational, if you will, in the field.

And so, we already kind of are past that process of sort of, you know, going through that. And I have a lot of confidence that as we look at the back half, you know, those feel those teams will be operating exactly how they are should be focusing on what they should be focusing on. Obviously, we’re still one team, you know, overall, and they they’re sharing managers. So there’s gonna be some capacity to help each other out and do all that, which I think is really important for the long term success. But their incentives are aligned to focus on the parts of their business that they they’re assigned to, and I think we’re gonna be in really good shape.

I think a lot of the heavy work is done and has been in play you know, moving in that position for the last number of months. So I think we’re in pretty good shape. It’s it’s a it’s a it’s a great idea. I mean, the team came up with it. I’m thrilled.

Their execution on it has been really extraordinary. And, you know, you always have a little bit of stuff going on, but I think all of that very minor and is behind us.

Richard Newitter, Analyst, Truist: Got it. And and then just maybe a follow-up. So I appreciate you don’t wanna get ahead of yourself. You know, the first half is clearly coming in a little bit better than expected, you know, on on US venous and then also on embolization. And there’s the implied decel that’s in your guide, maybe that reflects some conservatism.

But assuming all trends were to hold more or less, is there any one division that you anticipate a slowdown or you’re seeing something in the underlying market? I’m just trying to get a sense for within our US arterial or US neurothrombectomy or even coronary. Like, is there any is there any, like, anticipated slowdown or trend that’s beginning to emerge that you’re seeing?

Adam Elsesser, Chairman and CEO, Penumbra: No. I I think I sort of laid out, you know, the the two areas that that have, you know, a little bit softer growth, if you will. Obviously, stroke as a market, you know, I think if you look at all the data that people, you know, can buy out there, it shows that it really didn’t grow a lot, in in the last months or so, but we continue to take share. I think that, you know, that is great for us. You know, I think that will continue, particularly as, you know, the the market digests sort of what the right size product is and how that all works, and sort of that setup and and sort of getting ready for Thunderbolt continues.

So I think that puts us in an okay shape predicting the time of all that. You know, you you know, gotta give us a little leeway to you know, we don’t control that, and we need to to sort of be a part of that. And, again, the coronary business is a great business. We treat a lot of patients, but it’s a much more mature business, you know, with, you know, sort of analog technology, which is great in coronary, but but that’s obviously not growing, at that level. So, there’s nothing other than that, and and us just being, obviously, you know, the we we have, you know we’re we still have fresh memories of, you know, having our enthusiasm get the better of us, and we’re not gonna we’re gonna try not to do that.

Richard Newitter, Analyst, Truist: Yep. No. I’m not criticizing. That’s the right thing to do.

Adam Elsesser, Chairman and CEO, Penumbra: Okay. Okay. Thank you.

Richard Newitter, Analyst, Truist: Thank you.

Abby, Conference Operator: And our next question comes from the line of Bill Plavonic with Canaccord. Your line is open.

Cecilia Furlong, Business Development and Investor Relations, Penumbra0: Great. Thanks. Thanks for taking my questions. Just first off, it looks like it was really the international and AMBO Access that kind of drove some upside in the quarter, kind of at least our expectations, I think consensus. But I’m just wondering if there’s any sea change you saw there or are some of these markets coming back sooner than you expected?

And then maybe even specifically on China, I think there was some commentary there. I know had zero in expectations for this year. Is that how that’s coming in or is that starting to come back on board? And then I have one follow-up.

Adam Elsesser, Chairman and CEO, Penumbra: Yeah. Look, I think we have as you know, we had some headwinds internationally for a number of reasons over the last year or so. Obviously, the scale of the pullback on our China business has been a headwind for a couple of years. We got out of some markets, you know, because of gross margin issues, And so that was a headwind for a while. So we’ve been really working pretty diligently for a while to sort of make sure our inner our international business is set up for success.

Obviously, in certain markets, our CABT products, like Flash two point o and the Bolt products, are in those markets now and starting to launch. So we’re starting to see the benefits of all that work, and that’s really what you’re seeing right now. And, you know, I it’s great to see it come to together. But, again, what ultimately will continue to drive it is is, you know, the The US thrombectomy business. But but now a little bit with some of the the embolization business because I think we’ve got a a good run ahead, with that Ruby XL product, which is, I’ll be honest with you, some of the great compliments are coming from physicians who are using that, and really seeing just extraordinary things that they can do for their patients.

So it’s very gratifying. So I think we’re set up.

Cecilia Furlong, Business Development and Investor Relations, Penumbra0: And China contribution in the quarter, Maggie?

Adam Elsesser, Chairman and CEO, Penumbra: Oh, I’m sorry. You did ask that question. I apologize. I shoulda I I didn’t write that question down. So when there was a lifting of the or pausing of the tariffs or whatever we call it, China did ask for a small order.

It was not particularly material, but we did fill it.

Cecilia Furlong, Business Development and Investor Relations, Penumbra0: Okay. Thanks. And then my follow-up, just I understand and appreciate kind of the process with the FDA on Thunderbolt. I’m just you’ve submitted your you ran your trial, you’ve submitted your filing, you’re going through the process. I think your commentary was nothing surprising.

At this point, you should be getting towards the end of that. Is there any more, like, data or studies or anything else you need to provide, or is this just the answering basic questions and labeling as we think about the process to get the product cleared from the FDA down the market?

Adam Elsesser, Chairman and CEO, Penumbra: I a 100% appreciate and respect the question. I think there’s only you know, I’m only gonna get in trouble if I answer that because it’s gonna be a nuance thing that I I’m it’s gonna be misunderstood, and I don’t want that to be done. Let me stick with what, you know, I said, which is we’re going through the process. It’s what we expected, and we can’t wait to launch this product.

Cecilia Furlong, Business Development and Investor Relations, Penumbra0: Alright. Great. Thanks, Adam. Thanks.

Adam Elsesser, Chairman and CEO, Penumbra: Alright. Thank you.

Abby, Conference Operator: And our next question comes from the line of Brandon Vazquez with William Blair. Your line is open.

Cecilia Furlong, Business Development and Investor Relations, Penumbra1: Hey, everyone. Thanks for taking the question and congrats on the quarter. Adam, coming out of SNIS, think there was a little discussion about potentially being able to reinvigorate some of these efforts or kind of like refocus the neuro community onto getting these patients into the stroke centers and prioritizing thrombectomy. Appreciate we might be early in that, but as we’re moving past COVID and this might become a little bit more of a focus now in the stroke markets, maybe the growth has been a little bit dampened. How do you think about what Penumbra can do?

How do you think about what the industry is doing? Is there a point where, in the near future where we can start to reaccelerate, the growth of the stroke market?

Adam Elsesser, Chairman and CEO, Penumbra: Yeah, Brent. I think it’s it’s a really important question and one that I actually think a lot about since we’ve been here for many, many years trying to make sure that that happens. I I there is no question there are some, you know, and frankly, a decent number of some just extraordinary centers, hospitals, physicians, leaders who are doing that work in their communities to make sure that everyone that can be treated should be treated is getting treated. And that that is the most heartening thing when we see that. Unfortunately, it’s not at every town, at every community, at every hospital.

And, I I I don’t know how fast the centers that aren’t doing that, you know, will sort of get on board. I can’t predict that. But it but it is still happening, and and it’s exciting to see that. I think, you know, like anything, you know, that has been sort of the the big challenge with with the neuro business, the stroke business, of making sure that people get to the right place to be treated. That’s obviously one of the reasons we’re seeing such higher growth on the bachelor side because they don’t have that issue.

They go to a hospital, and they can be treated in almost every place they go. But I’m I’m optimistic. I do think that Thunderbolt helps that because I do think it it allows for a a much faster, easier, you know, procedure, hopefully, that that allows people to sort of, in effect, democratize it and feel like they can treat more of those patients. But let’s wait and see. I don’t wanna get ahead of ourselves.

We’ll wait till that’s approved, and, we’ll we’ll, see what happens. But I I’m optimistic.

Cecilia Furlong, Business Development and Investor Relations, Penumbra1: Okay. And then maybe as a follow-up on the Ambo side of the business. You know, now that you’re building out a Salesforce, there’s some, some new products like Ruby XL and maybe Swift Pack and the MMA embolization. I’m kind of curious if you would categorize this as maybe a little bit of a turning port for Embo. Is this in the sense of can this be kind of a materially even better part of the business once these separate kind of sales force builds out?

It seems like you’re viewing a big opportunity there. Please rein me in if I’m getting ahead of my own skis here. But clearly, you’re seeing something. Is this something in a year from now we’re going to be looking back and saying, this is why Penumbra invested so much into this segment? Thanks.

Adam Elsesser, Chairman and CEO, Penumbra: Yes. That’s what I hope.

Abby, Conference Operator: And our next question comes from the line of Ryan Zimmerman with BTIG. Your line is open.

Cecilia Furlong, Business Development and Investor Relations, Penumbra2: Thank you. Can you hear me okay? Yes. Thank you. Alright.

Congrats on the quarter. Not not to stir the pot here, Adam. I just wanna understand. Can you just confirm that could we see clearance of Thunderbolt ahead of a possible data presentation at SPAN in November? Is that, within the realm of possibilities?

Adam Elsesser, Chairman and CEO, Penumbra: Yeah. I again, I totally appreciate the question. I don’t think you’re stirring the pot at all. I I I don’t mean to answer the question the way I’ve answered the last two or three times, but we’re in an active process. Obviously, I don’t control it.

We’re going through that process, and it’s what we expected. And as soon as we can, we will tell you something. Okay. I I don’t I can’t say more than that. I think it’s pretty obvious.

So but I have a lot of respect for, the various attempts to get me to say something else.

Cecilia Furlong, Business Development and Investor Relations, Penumbra2: That’s fine. I’ll stick just two more, around neurovascular. One, you know, I was also at SNAS. You know, we we saw the distal trials early in in February at ISC. Do do you think you need to do a distal aspiration trial?

Because, clearly, all three of those trials were with stent retrievers. And, you know, we saw a subgroup analysis on aspiration in m two, and, you know, clearly, it was effective. So, you know, is is a distal trial necessary to kinda reinvigorate that market? And then the second part of the question is, just what do you consider successful in the THUNDERBOLT trial? Because if revascularization, immediate revascularization is the endpoint, I guess, what do you consider kind of a good time reduction that we should be looking for in that trial?

Thanks for taking my question.

Adam Elsesser, Chairman and CEO, Penumbra: Yeah. Both really, really good questions. Let’s start on the distal one. You know, there’s a lot of discussion, and SNIS just sort of prompted it. You know, we hosted a symposium dinner symposium.

We hugely intended probably one of our biggest attended ones we’ve ever had at SNIS. So there’s a lot of interest in this topic of of distal. There’s not an easy answer. There’s not a lot of consensus. I think people would not mind having a data that, you know, is directly supportive of, our our red 43 catheter doing this, which is really considered the sort of catheter of choice to do these cases.

What does that trial look like? You know, who would randomize for people who already believe in it? No one is gonna wanna randomize those patients because they already believe it. So I think it’s a tricky trial, but there’s a lot of conversations that are happening. We’re privy to most of them about what is next and and what should be done here, and and we’ll let you know when when there’s some additional information to to share.

But, yeah, I I I agree with you that it’s it’s an open question. Do we need it? And then the question around what the Thunderbolt, you know, study should show, I I’m not gonna answer that quantitatively, obviously, but but I will just sort of point to the the thing that Thunderbolt does. So Thunderbolt is not the catheter. Thunderbolt is the product that attaches to the catheter and to our our aspiration source and creates modulated aspiration.

So its only work is done when the catheter’s already at the face of the clot, and it’s about how fast the clot can come out. The the the not the case itself time, but the the clot removal time. So that’s what we wanna measure. Obviously, we have all the traditional endpoints that the trials have, but that’s the thing that, physicians are gonna be looking for. Does that change?

And that there’s no standard for people. But if you talk to as many physicians as I talk to, everyone kinda has their own gut feel of what their average time is, you know, not their best time, which they share with most people, but their actual average time, when you look at, you know, hundreds of cases. And that’s what I think we’ll be measuring up against.

Cecilia Furlong, Business Development and Investor Relations, Penumbra3: Thank you. Congrats on

Larry Biegelsen, Analyst, Wells Fargo: the Yeah.

Adam Elsesser, Chairman and CEO, Penumbra: Thank you.

Abby, Conference Operator: And our next question comes from the line of Michael Sarcone with Jefferies. Your line is open.

Cecilia Furlong, Business Development and Investor Relations, Penumbra3: Hey. Good afternoon, and thanks for taking the question. Got a few things going on here. You have the sales force ramping, you’re ramping Ruby XL and you also mentioned you’re moving past some China headwinds. Do think maybe just in the context of guidance, can you talk about how you’re thinking about seasonality and quarterly cadence through the back half of the year?

Adam Elsesser, Chairman and CEO, Penumbra: You know, obviously, there’s traditionally been a sequential gain from you know, unless there’s some an you know, unusual thing like product launches or something, that change that between, you know, user build a little in the third quarter and ramp into the fourth quarter. So that is you know, the the fourth quarter is always the best unless, again, that’s something changes because of product launches. And so so I expect that to be somewhat the same here now.

Larry Biegelsen, Analyst, Wells Fargo: Yep.

Adam Elsesser, Chairman and CEO, Penumbra: And that’s just been that way forever.

Cecilia Furlong, Business Development and Investor Relations, Penumbra3: Okay. Great. And second question is just on the USB C business, really

Richard Newitter, Analyst, Truist: strong growth

Cecilia Furlong, Business Development and Investor Relations, Penumbra3: the past three quarters. You mentioned, obviously, the market’s not growing at that level. Do you think maybe you can just give us an update on on where you stand on the market share front in pulmonary embolism and DVT?

Adam Elsesser, Chairman and CEO, Penumbra: You know, I we we all try to guess based on all the, you know, data sources that that everyone gets. I think it’s it’s always sort of a a fool’s errand to put an exact number on it. We have obviously continued to gain share both in in DVT and PE. I think we’ve made enough movement in in DVT to be, you know, over 50%, and I think we’ve made a pretty significant dent in the PE business. I’m pretty excited about the cases we’ve seen, the excitement around that from new users.

And I think, you know, if if storm PE is positive, you know, that will simply continue, if not accelerate. So I think we’re in pretty good shape. Again, it comes down to the product. It it is it is a product that just does what it’s supposed to do simpler and faster and safer than other technologies. And at at the end of the day, I’ve I think I’ve always said, you know, almost all doctors will ultimately use the best product.

And I think that’s just what we’re seeing right now, that the proprietary sort of, you know, computer, assisted vacuum, thrown vacuum, your CABT, is is just a unique animal that isn’t really something that anyone else can do and copy because of, obviously, IP, and we’re in pretty good shape with it. And we’re not done. We’re we’re gonna keep making it better, and I think everyone knows that.

Cecilia Furlong, Business Development and Investor Relations, Penumbra3: Great. Thanks, Adam.

Adam Elsesser, Chairman and CEO, Penumbra: Thank you.

Abby, Conference Operator: And our next question comes from the line of Joanne Wuensch with Citi. Your line is open.

Cecilia Furlong, Business Development and Investor Relations, Penumbra4: Thank you for taking the question and congrats on the quarter. I’d like to spend just a minute on STORM PE with the announcement of the completion of enrollment. It seems to me that this is sort of the next wave of growth for you. And with the enrollment being completed, can you walk us through the timeframe to get from here to approval to commercialization and if there’s anything specific that we should be aware of on that path?

: Thank you so much.

Adam Elsesser, Chairman and CEO, Penumbra: Yeah. No. Thank you.

: It’s a

Adam Elsesser, Chairman and CEO, Penumbra: great question. Well, first of all, our product is already cleared, for use in in PE, so there’s no approval or clearance necessary here, which is great. It really is just data, that is gonna be looked at by the larger community, not just interventionalists, but everyone involved in the treatment of PE cases, patients, to determine what the best treatment for these patients are. And, again, this is the first trial in the world that has finished that compares anticoagulation to anticoagulation and, a mechanical device, in this case, our specific mechanical device. So I think that’s what is driving the excitement, because that’s the standard of care versus something new.

And I think if if the trial’s positive, it will obviously have some significant impact on the thinking around the pay the physicians who, are charged with caring for these patients and and their referral patterns and what they wanna do with these patients. And, again, to remind everyone, we’re, you know, we’re 10 plus percent penetrated this market just in The US. So there’s a lot more patients that can benefit. And, again, if the trial’s positive and shows that, I think it will have some significant impact, again, on a market that, you know, is, you know, all in bigger, you know, than our stroke market. So it’s it’s a huge impact and a huge win for potentially lots of patients, again, assuming the trial’s positive.

: Thank you.

Adam Elsesser, Chairman and CEO, Penumbra: Thank you.

Abby, Conference Operator: And our next question comes from the line of Matthew O’Brien with Piper Sandler. Your line is open.

: Hi, this is Samantha on for Matt. Thank you so much for taking our question. I guess we’d like to continue that train of thought with storm PE and we assuming the data is positive and we definitely think it will be, do you anticipate the market evolving? Is it appropriate to think of it like stroke where you saw this almost immediate increase in thrombectomy usage after the readout?

Adam Elsesser, Chairman and CEO, Penumbra: Yeah. It’s we don’t know. So let’s wait till we get the data and present it this fall, which isn’t that far away. That being said, the one thing that I wanna point out that’s different about stroke, and this is somewhat important, with stroke, you have you had and still have what I alluded to earlier, this fundamental structural problem in that the patients aren’t always going to a hospital that does, you know, stroke intervention treatment. So sometimes they have to be moved.

Are they always moved? That is a structural impediment. You don’t really have that in PE. You know, I there’s gotta be, you know, some hospital, one, you know, place here or there where maybe that’s true. But the vast, vast majority of places where a patient will show up with a PE, they could be treated if that is becoming the standard of care.

So it’s a very, very different dynamic, and it’s something that, having, you know, spent the better part of ten years sort of working on, I’m incredibly excited to to not have that impediment, and be able to just do the right thing for all these patients. Again, assuming it’s positive.

: Right. Yeah. Thank you so much for that. It makes a lot of sense. And then just we have one follow-up on the neurovascular thrombectomy market and specifically, I guess, kind of what the medium vessel occlusion, I guess, portion of the market is doing.

You know, I guess, could you talk a little bit about your exposure? Maybe what percent of your stroke business happens in these medium vessel occlusions? And what revenue, if any, is impacted?

Adam Elsesser, Chairman and CEO, Penumbra: Yeah. It it’s, that’s a really, really good question. It’s hard to pinpoint that exactly because, you know, if you take, the the medium, if you as you call it, our catheters that would typically be used there are a red 62 and sometimes a red 43. Both catheters that are also used in in other places, so it’s hard for us to know and pinpoint that, you know, with the kind of numerical precision that that I would like and and you probably want. What I can tell you is it really is very much a a a site specific thing, and it it isn’t just the interventionist making those decisions.

In fact, most of the time, it’s a noninterventionalist making those referral patterns. It has happened. We have heard of centers that have become more conservative. I don’t think it’s the overwhelming view. And, obviously, you know, we did really quite well this quarter.

It continued to take share. You know, the overall market didn’t grow as much, and could that have had some small impact on that number potentially, but but we don’t know that with you know, definitively.

: Okay. That’s helpful. Thank you. I appreciate it.

Adam Elsesser, Chairman and CEO, Penumbra: Yeah. Thank you.

Abby, Conference Operator: And our final question comes from the line of Chris Pasquale with Nephron. Your line is open.

Cecilia Furlong, Business Development and Investor Relations, Penumbra5: Thanks. I wanted to circle back to International Embolization just given how much that segment drove the upside this quarter and really deviated from the recent trend both sequentially and year over year. First, Adam, if you wouldn’t mind, could you quantify the China contributions just so we can tell the extent to which that order might have driven the beat? And then second, I think your original guidance for the year called for international ambo to be about flat, for

Richard Newitter, Analyst, Truist: The U. S. To be

Cecilia Furlong, Business Development and Investor Relations, Penumbra5: up to maybe mid to high single digits. Both pieces are running ahead of that midway through. So how are you thinking about the full year growth for that business?

Adam Elsesser, Chairman and CEO, Penumbra: Yeah. Let me well, let me first of all, I’m trying to they they don’t order any of our coils, so our it has nothing to do with our MBO number at all. As it relates to the larger, you know, the larger thing I mean, they have some access products. They have some stroke, you know, products and and thrombectomy products rather. As it relates to the larger international business, I I think you know that we have been in a rebuilding mode, you know, for a year and a half.

I I think we’ve been pretty open about that process as we wanna sort of get the right products there. We wanna be at a margin that is is affordable in markets that do that. And I think what we’re seeing is the benefit of a lot of that work, and I’m pretty excited to see that work. You know, it’s easy to focus on our US business where there’s so much good happening there, but it’s also really important that we don’t forget about the rest of the business, and I’m excited that we can do all of it at once. And and I I I think, you know, again, none of this is linear, but I think we’re in pretty good shape for a while, as we move into, you know, not just this year, but in the prior you know, future years, both in our US, but but also internationally.

Cecilia Furlong, Business Development and Investor Relations, Penumbra1: Great. Thank you.

Adam Elsesser, Chairman and CEO, Penumbra: Thank you.

Abby, Conference Operator: And ladies and gentlemen, that concludes our question and answer session. At this time, I would like to turn the call back over to miss Furlong for closing remarks.

Cecilia Furlong, Business Development and Investor Relations, Penumbra: Thank you, operator. On behalf of our management team, thank you all again for joining us today and for your interest in Penumbra. We look forward to updating you on our third quarter call.

Cecilia Furlong, Business Development and Investor Relations, Penumbra4: And this concludes today’s call,

Abby, Conference Operator: and we thank you for your participation. You may now disconnect.

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