Earnings call transcript: Penumbra Q3 2025 beats revenue expectations

Penumbra Inc. reported a robust third quarter for 2025, with revenue surpassing expectations and prompting a positive market reaction. The company’s revenue reached $354.7 million, a significant 17.8% increase year-over-year, exceeding the forecast of $340.91 million. This performance aligns with Penumbra’s impressive 17% five-year revenue CAGR according to InvestingPro data. Despite this, the stock experienced a 4.05% drop in regular trading hours, closing at $225.57, though it showed a slight uptick in after-hours trading.

Key Takeaways

• Penumbra’s Q3 2025 revenue of $354.7 million outperformed expectations.
• U.S. revenue saw a strong 21.5% year-over-year growth.
• Stock price fell by 4.05% during regular trading but improved slightly in after-hours.
• Full-year revenue guidance has been raised to $1,375-$1,380 million.
• New product launches and FDA approvals are driving innovation.

Company Performance

Penumbra’s performance this quarter underscores its strong market position, particularly in the U.S., where revenue surged by 21.5% compared to the same period last year. The company continues to benefit from its strategic focus on thrombectomy and embolization, despite mixed trends in the thrombectomy market and a slight decline in the stroke market.

Financial Highlights

• Revenue: $354.7 million, up 17.8% year-over-year.
• U.S. Revenue: $275 million, up 21.5% YoY.
• International Revenue: $79.7 million, up 6.6% YoY.
• Gross Margin: 67.8%, expanded by 130 basis points.
• Operating Income: $48.8 million, representing 13.8% of revenue.

Earnings vs. Forecast

Penumbra exceeded revenue forecasts by achieving $354.7 million against an expected $340.91 million, marking a positive surprise of approximately 4%. This continues a trend of strong performance, with the company consistently meeting or surpassing revenue targets in recent quarters.

Market Reaction

Despite the strong revenue performance, Penumbra’s stock fell by 4.05% during regular trading hours, closing at $225.57, potentially reflecting broader market trends or investor profit-taking. In after-hours trading, the stock price rose slightly by 0.39% to $236, indicating some investor confidence in the company’s future prospects.

Outlook & Guidance

Penumbra has raised its full-year revenue guidance to between $1,375 million and $1,380 million, reflecting confidence in continued growth. The company expects 20-21% year-over-year growth in U.S. thrombectomy and is targeting a gross margin over 70% by the end of 2026. Upcoming product launches, such as the Thunderbolt neurovascular product, are anticipated to drive future growth.

Executive Commentary

• "Storm PE proved CABT superior to the current standard of care," stated Shruthi Narayan, President, highlighting the company’s innovation in treatment technologies.
• CEO Adam Elsesser announced, "We are raising our revenue guidance for the year to $1,375 million-$1,380 million," underscoring confidence in future performance.
• "We remain highly confident in our long-term strategy grounded in meaningful innovation," added Shruthi Narayan.

Risks and Challenges

• Market saturation in thrombectomy could pose a challenge if growth slows.
• International market dynamics, particularly in China, may affect expansion plans.
• Macroeconomic pressures, such as inflation or supply chain disruptions, could impact costs and margins.

Q&A

During the earnings call, analysts focused on the Storm PE trial results and their implications for Penumbra’s competitive position. Questions also explored the FDA approval process for the Thunderbolt product and potential growth in the embolization market, particularly in international regions.

Full transcript - Penumbra Inc (PEN) Q3 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 third quarter 2025 conference call. All lines have been placed on mute to prevent any background noise. After the speaker’s remarks, there will be a question-and-answer session. If you would like to ask a question during that time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, press star one a second time. Thank you, and I would now 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 third quarter of 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. With me on today’s call are Adam Elsesser, Chairman and CEO; Shruthi Narayan, President; and Maggie Yuen, Chief Financial Officer. Also joining us for the Q&A portion of the call is Jason Mills, EVP Strategy. During the course of this conference call, the company will make forward-looking statements pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, including statements regarding our financial performance, commercialization, clinical trials, regulatory status, quality, compliance, and business trends.

Actual results could differ materially from those stated or implied by our forward-looking statements due to certain risks and uncertainties, including those referenced in our 10-K for the year ended December 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-K 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 expenses related to the wind down of our immersive healthcare business in the third quarter of 2024 of $5 million, and adjusted EBITDA excludes wind down expenses, stock compensation expense, depreciation and amortization, provision for income taxes, and interest income expenses. With that, I would like to turn the call over to Adam.

Adam Elsesser, Chairman and CEO, Penumbra: Thank you, Cecilia. Good afternoon. Thank you for joining Penumbra’s third quarter 2025 conference call. In the third quarter, we generated total revenue of $354.7 million, representing underlying year-over-year growth of 17.8% on a reported basis and 16.9% on a constant currency basis. Our strong third quarter results reflect broad-based execution against our strategy and significant progress in further enhancing our competitive technological and market positioning across all franchises. Total U.S. revenue was $275 million in the third quarter, an increase of 21.5% compared to the third quarter of 2024. Total U.S. thrombectomy sales increased 18.5% year-over-year to $192 million. Our VTE franchise once again led overall corporate growth, delivering 34% year-over-year growth. U.S. embolization and access revenue of $83 million increased 29.2% year-over-year.

Growth in our embolization and access business exceeded our expectations, reflecting the benefit of a dedicated peripheral embolization sales team alongside our investment in continuous innovation and new product introductions. Internationally, the work we previously undertook to enhance our long-term market positioning is beginning to play out. We are now operating from a position of portfolio and geographic strength, with our commercial execution in the quarter more than offsetting the China growth comp headwinds we continue to face. Total international revenue of $79.7 million increased 6.6% year-over-year, or 3% in constant currency. Below the top line, gross margin of 67.8% expanded 130 basis points over the prior year period, and we delivered operating income of $48.8 million, or 13.8% of revenue, with our operating expense in the quarter reflecting the full impact of our embolization sales force buildout.

We remain on track and are well-positioned to achieve a gross margin profile of over 70% by the end of 2026 and expect operating margin expansion to outpace gross margin expansion for the foreseeable future as we prioritize delivering profitable growth and an expanding profitability profile. Turning to our U.S. peripheral business. Our third quarter thrombectomy performance reflected both the clinical benefit and competitive strength of our CABT technology alongside enhanced commercial focus from our now peripheral thrombectomy dedicated sales force. We delivered the highest sequential quarterly increase in VTE case volume growth to date in 2025. Our U.S. arterial business also delivered another strong performance with a combination of Bolt 7 and Bolt 6X, supporting further physician conversion from open surgery or the use of lytics to CABT. Penumbra received FDA clearance during the third quarter for both Lightning Bolt 16 and Lightning Flash 3.0.

Lightning Bolt 16 brings proprietary modulated aspiration technology to our 16-French system, and Flash 3.0 improves the fidelity of the algorithm by updating both the hardware and the software. These new products significantly add to the growing portfolio of advanced CABT devices, opening up a clear path for us to reach the over 800,000 patients in the U.S. who suffer from VTE and arterial clot with our CABT technology. I also want to remind everyone that the core technology in our CABT products is protected by a robust patent portfolio. We recently secured a victory from the Court of Appeals for the Federal Circuit, which summarily and unanimously affirmed the Patent and Trademark Appeal Board’s IPR decisions in validating several competitive patents challenged by Penumbra. We will continue to vigorously defend all of our patents and IP for our CABT technology.

At the TCT and Viva conferences, we presented the landmark results from Storm PE, the prospective multi-center randomized control trial evaluating CABT plus anticoagulation versus anticoagulation alone for the treatment of acute intermediate high-risk PE. Shruthi will provide additional detail on the trial and study outcomes in her prepared remarks. Needless to say, taking into account the medical community’s reaction to the data, we are highly optimistic that Storm PE will act as a major catalyst in positively impacting the treatment of PE while significantly increasing the number of patients receiving intervention with CABT. In our U.S. peripheral embolization business, our new embo-dedicated 50-plus member sales team delivered strong 21.2% sequential growth in embolization revenue in the quarter. We believe the team’s performance this quarter and the enhanced focus across our comprehensive current coil portfolio represents a new phase of sustainable growth in our U.S. embolization franchise.

Shruthi will discuss how the integration of this new team is unfolding. Shifting to our neurovascular business. Recent market trends in the macro U.S. stroke market showed a slight decline in the third quarter. Notwithstanding that, our stroke thrombectomy portfolio delivered positive growth and share gain. Historically, new innovation has catalyzed the stroke market, and we are optimistic that with the anticipated introduction of Thunderbolt, we will see a similar dynamic play out. In neuroembolization, the recent interest we’ve seen in utilizing our Swift Coil for MMA embolization continues to translate into extremely strong above-market procedure growth, further contributing to sustainable growth in the U.S. embolization franchise. Now, I’d like to give you an update on Thunderbolt. In October, we submitted thorough responses to all the outstanding questions received from the FDA during the 510(k) review process.

We are now in the stage where we address any final questions or provide any required clarifications to our answers. For obvious reasons, we’ll be prudent in our discussion today about Thunderbolt. However, we remain excited about the prospect of introducing CABT to the neurovascular field. Overall, based on our third quarter performance and reflecting the trends we’ve seen in our business and our target markets highlighted previously, we are raising our revenue guidance for the year to $1,375 million-$1,380 million. We reiterate 20%-21% year-over-year growth for 2025 for U.S. thrombectomy. Now, I will turn the call over to Shruthi, who will discuss a few details on the expansion of our sales team as well as the Storm PE trial.

Shruthi Narayan, President, Penumbra: Thank you, Adam. Good afternoon, everyone. Starting off with an update on our recent commercial expansion initiatives. Based on the significant ramp in physician interest in CABT we experienced throughout 2023 and 2024. Entering 2025, we made the strategic decision to build out an additional peripheral sales team to focus on our embolization business. Enabling our existing peripheral sales team to shift exclusive focus to CABT. Through the first half of 2025, we added over 50 new peripheral embolization sales reps under our existing peripheral sales leadership team. The buildout and integration went extremely well, with the new team fitting seamlessly into our organization. This allowed the team to execute the launch of RubyXL while also maintaining our momentum in our established portfolio, achieving strong 21.2% sequential growth in embolization revenue in the third quarter.

As we execute the shift in our commercial structure, our existing team helped integrate our new team and supported the transition of embolization case coverage across our accounts. This transition process will taper in the fourth quarter, well-positioning our teams to enter 2026 fully focused on their respective sales objectives: CABT and embolization. Turning to Storm PE, at the TCT conference early last week, Dr. Rob Lookstein presented the study’s primary endpoints alongside key safety data. Additional secondary endpoint data, including key physiological and functional outcomes, was presented by Dr. Rachel Rosowski at Viva earlier this week. The trial proved CABT superior in reducing right heart strain in intermediate high-risk PE patients with a comparable safety profile to the current standard of care. In addition, while not powered to show statistical significance on secondary endpoints, the trial data demonstrated statistical significance in favor of CABT across multiple secondary endpoints.

In addition, the initial trial results were published in Circulation on Monday. Storm PE proved CABT superior to the current standard of care across the primary as well as multiple secondary endpoints, showing CABT patients recovered earlier and have significant long-term improvement in functional outcomes. The trial also highlighted the ability of the field’s most advanced technology to deliver faster procedure and device times, reestablishing the baseline and expectations around acceptable case times. With procedurals in the trial requiring minimal prior experience with Flash ahead of enrolling patients in Storm PE, the strong results also highlight CABT’s ease of use and exceptional safety profile. The physician feedback across the interventional and non-interventional community has been enthusiastically positive. Since the presentations, we are seeing a shift to CABT from older mechanical thrombectomy options for PE. We expect to see this continue.

We are also working with societies and organizations to disseminate the now published data from Storm PE to hospitals so they can update their current hospital protocols. Over the next year, this will be one of our top priorities. We are executing at a high level across our peripheral and neuro business units and are well-positioned to continue to build off our groundwork to date. As we look toward 2026 and beyond, we remain highly confident in our long-term strategy grounded in meaningful innovation, data generation, and investment in our team, supporting durable, profitable growth and the ability to treat a significant number of patients with our technologies. I’ll now turn the call over to Maggie to go over our financial results for the third quarter of 2025.

Maggie Yuen, Chief Financial Officer, Penumbra: Thank you, Shruthi. Good afternoon, everyone. Today, I will discuss the financial results for the third quarter of 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 a reconciliation of GAAP to non-GAAP financial measures are provided in a posted press release. For the third quarter ended September 30, 2025, our total revenues were $354.7 million, an increase of 17.8% reported and 16.9% in constant currency compared to the third quarter of 2024. Our geographic mix of sales for the third quarter of 2025 was 77.5% U.S. and 22.5% international. Our U.S. region reported growth of 21.5%, driven by 18.5% growth in our thrombectomy franchise and 29.2% growth in embolization and access, driven by our RubyXL product compared to the same period last year.

As we previously shared, due to easing of China’s headwind and double-digit growth for the remaining international regions, our international business has returned to growth, increasing by 6.6% reported and 3% in constant currency compared to the same period last year. Moving to revenue by product, revenue from our global thrombectomy business grew to $236.4 million in the third quarter of 2025, an increase of 15.8% reported and 15.1% in constant currency compared to the same period last year. The growth was primarily driven by an 18.5% increase in our U.S. thrombectomy business. As expected, our international thrombectomy revenue also increased by 5.6% when compared to the same period last year. Revenue from our embolization and access business was $118.3 million in the third quarter of 2025.

An increase of 22% reported and 20.8% in constant currency compared to the same period last year, primarily driven by an increase in U.S. peripheral embolization sales due to the momentum from our successful launch of RubyXL, combined with strategic investment we made in expanding our U.S. embolization team in the first half of the year. Gross margin for the third quarter of 2025 is 67.8%, compared to 66.5% for the third quarter of 2024. Consistent with our expectations, we deliver sequential gross margin growth of 180 basis points, driven primarily by favorable regional mix, product mix, and productivity improvements. We are very pleased at how quickly the team stabilized our RubyXL build, of which our RubyXL product has an accretive impact on our gross margin and the sales model supports a more efficient working capital dynamic.

In addition, we are on track to achieve our full-year gross margin targets and remain well-positioned to deliver our long-term gross margin profile of 70% by the end of 2026. Now on to our non-GAAP operating expenses, non-GAAP operating income and margin, and adjusted EBITDA. Total operating expense for the quarter was $191.6 million, or 54% of revenue, compared to $160 million, or 53.1% of revenue for the same quarter last year. Our research and development expenses for Q3 2025 were $22.7 million, or 6.4% of revenue, compared to $22.6 million, or 7.5% of revenue for Q3 2024, which reflects savings of $3.6 million due to our immersive business wind-down offset by continued investment in product development. SG&A expenses for Q3 2025 were $168.9 million, or 47.6% of revenue, compared to $137.4 million, or 45.6% of revenue for Q3 2024.

As we have stated previously, we have made targeted hires in our commercial and market access teams, which will support customer demand and allow us to capitalize on long-term growth drivers. Sequentially, our SG&A expenses increased by $8.9 million, reflecting the full quarter presence of our embolization sales team investment along with other variable spend. With this buildout now complete, we are positioned to capture sales and operation leverage in future quarters. We recorded operating income of $48.8 million, or 13.8% of revenue, compared to an operating income of $40.3 million, or 13.4% of revenue for the same period last year. We posted adjusted EBITDA of $66.7 million, or 18.8% of total revenue, compared to $56.7 million, or 18.8% in the third quarter last year.

Turning to cash flow and balance sheet, we ended the third quarter of 2025 with cash, cash equivalents, and marketable security balance of $470.3 million and no debt, which is an increase of $45.7 million sequentially. This increase includes improving working capital ratios in both receivable and inventory terms and strong profitability. We continue to expect positive operating cash flow trends to continue in 2025 and beyond. Turning to 2025 guidance, as Adam previously stated, we are raising our revenue guidance for the year to $1,375 million-$1,380 million. We reiterate 20%-21% year-over-year growth for 2025 for U.S. thrombectomy. Finally, we maintain our previously stated 2025 growth and operating margin expansion guidance. This concludes our prepared remarks. Operator, you can now open the call to questions.

Abby, Conference Operator: Thank you. At this time, I would like to remind everyone, in order to ask a question, press Star and then the number one on your telephone keypad. If you would like to withdraw your question, press Star one a second time. We will pause for just a moment to compile the Q&A roster. Our first question comes from the line of Travis Steed with Bank of America. Your line is open.

Hey, congrats on the good quarter. I’ll start with Thunderbolt since it’s topical. This sounds like you’re a lot closer to approval than you were. I assume nothing surprising with the FDA back and forth, but just maybe how you’re thinking about the product when it hits the market, how much share you can take and how much. When investors will see the data from Thunderbolt. Anything else you can share on the FDA process would be helpful if you could have the product approved by year end or not.

Adam Elsesser, Chairman and CEO, Penumbra: That’s great. Thanks, Travis. A lot of nuance to that question, so let me try to cover as much as possible. Let’s maybe start with the process and give a little additional color, and then we can talk about at a point in time of what happens subsequently. I know there’s been a lot of comments and thoughts around the timing of the process. I want to maybe level set the process and the timing because there’s some, I think, some maybe misunderstanding. Thunderbolt is a brand new product. It’s not already approved. It’s not just seeking a new indication. I know in the past, there’s been comparables to products that have been already on the market that have a history, that have safety information that obviously the FDA sees and collects, and all they’re looking for is a new indication. That’s a different.

Time period usually, and those can be shorter. For products that are brand new, those processes, at least in our experience with the neuro division, sometimes take a while. For example, this is not fundamentally different timing than our original RED72 silver label, which was an update on an existing product, but it was a new product with some new materials and so on. It takes a while because the FDA, and I applaud them for this, are incredibly thorough. There is nothing about this process and timing, but we are feeling at least hopeful and optimistic. Needless to say, without sharing competitive information about what does a launch look like, and obviously, we do not want to do that. We obviously are ready to launch this product, and are excited about it when that time comes that we can do that. We will stay optimistic. Again.

Got to have a little prudence until we have a clearance letter from, giving you more sort of detail on that. Okay?

Makes a lot of sense. Maybe a follow-up on the Storm PE secondaries now that those are out earlier this week and you’ve had a chance to talk to doctors. Curious how you’re thinking about kind of the impact to the market and acceleration of the market and the potential to kind of take share given your safety profile on the device.

Yeah, there’s a couple of interesting and exciting things that have happened. One, the reaction to the data within the medical community has been really just incredibly positive. I think folks who were at either TCT or VIV or both saw that. They felt it. The safety, the endpoints, the primary endpoint, and of course, the secondary endpoints are really, really positive and strong and will have a big impact on non-interventionalists as well. In addition, the safety profile of the product was really striking. I think that’s led to a number of interventionalists who have not traditionally used our product call and want to start doing cases and have done cases in the last really week since last Sunday with our product really for the first time and multiple cases.

That momentum is exciting as the field moves from the older technology that sort of got the field started to sort of the more modern CABT technology. As it relates to the non-interventional community and sort of what that reaction is, which is really core to building this market and growing it, Shruthi maybe can give you some additional comments. She’s had a number of conversations with people and can share her perspective.

Shruthi Narayan, President, Penumbra: Yeah, thanks, Adam. Yeah, on the non-interventional community, for example, specific conversations with pulmonologists, hematologists, they’re all now very happy that there’s validation that right heart recovery then leads to the sort of six-minute walk test progress that we saw in the functional outcomes. They’re now doing the work to start updating protocols within their institutions and start to see more and more patients get access to care. That was a comment Dr. Rachel Rosowski made on the podium right at the end of the presentation. Now different physicians in the non-interventional community are looking at their own hospital protocols to make those updates. Just since the release of Rachel’s presentation on Monday, I’ve had conversations myself with physicians that have had the same reaction.

I think it’s really positive for the field and hopefully it’s going to open up access to care for a lot more patients.

That’s great. Thanks a lot.

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

Abby, Conference Operator: Our, pardon me, our next question comes from the line of Robbie Marcus with JP Morgan. Your line is open.

Oh, great. Congratulations on a nice quarter. Thanks for taking the questions. Wanted to touch on margins here. Figure I’ll stray away from the revenue questions. Reiterating gross margin, operating margin guide, just wondering how you’re thinking about the ability to drive margins. Is Thunderbolt going to be a big component to get those moving higher versus where you were thinking originally? How should we be thinking about the impact of tariffs and how that impacted full-year 2025 margins? Thanks.

Adam Elsesser, Chairman and CEO, Penumbra: Let me start briefly and then Maggie can address most of those. All of our CABT products have very, very strong margins. So all of them, whether it’s just Thunderbolt or any of the other areas that we’ve just spent a lot of time talking about, have the ability as that mix changes. The other thing is with our newest coil that we launched, that’s also accretive. I think we’re feeling pretty good, but Maggie can maybe go through some of the more specifics.

Shruthi Narayan, President, Penumbra: Yeah, yeah, thanks. With the remaining factors, this quarter you see favorable, especially on a regional mix standpoint since we have seen a lot of U.S. growth, but continued product mix and also the recovery from the operation teams to stabilize our RubyXL yield improvement and productivity. For going into Q4, we’ll continue to see this trend. I think we’ll continue to see sequential improvement from product mix, regional mix, and productivity improvement, and also some volume leverage. I think what we have seen in this quarter already reflected some tariff impact. We do not have material impact on tariff, although still a little bit, but the number and trend that we’ve seen has already reflected absorbing those headwinds.

Great. Maybe just a quick follow-up. If I zoom in on thrombectomy. U.S. and OUS, but I guess more specifically U.S. here. It’s been decelerating throughout the year. I imagine a lot of that has been pressure in the stroke market offset by really strong venous growth, market growth, and Penumbra growth. How do you think about, is it fair to assume that it’ll continue to downward trend, or do you think there might be a stabilization in stroke as we move down to 2026 with venous offsetting that and returning it more towards accelerating growth? Thanks a lot.

Adam Elsesser, Chairman and CEO, Penumbra: Yeah, yeah, Robbie, thank you. And thanks for, in the body of your question, sort of highlighting and pointing out the dynamic in the market. You’re exactly accurate. Obviously, VTE has led the growth sort of quarter after quarter, and some of that’s market growth, obviously some significant share gain. I think arterial has also been very, very strong. Stroke over the last couple of quarters has definitely been the drag. Notwithstanding, we’ve held our own and used that opportunity to continue to take share. So we’re not negative there. We’re not seeing a decline in our business. It’s just not growing at the same rate, obviously. Over the course of the many, many years we’ve been in the stroke market, we have seen this. This happens. This is not new, and you’ve known that from watching us for many, many years. It comes in waves.

It doesn’t happen always linearly. So there’s nothing at this moment to be particularly concerned about. I do think the having new technology that’s very, very novel, not sort of similar to others, has usually been a pretty significant catalyst. And so that certainly could help. But even without that, the market typically sort of ebbs and flows a bit, and we would expect that to turn around. The fourth quarter is usually a growth quarter, traditionally in terms of the volume that grows. But overall, I’m optimistic about the future. It just comes in these waves.

Great. Thanks a lot, Adam.

Thank you.

Abby, Conference Operator: Our next question comes from the line of Larry Beagleson with Wells Fargo. Your line is open.

Good afternoon. Thanks for taking the question. Congrats on the nice quarter here, Adam. Hey, Adam, I wanted to ask about MBO access, which was in the U.S., which was extremely strong in Q3. In fact, worldwide MBO access grew faster than worldwide thrombectomy. Was there anything you would characterize as one time in Q3? How much of the strength was RubyXL versus Swift, which you called out? Going forward, should we expect MBO access to now outpace thrombectomy? I had one follow-up.

Adam Elsesser, Chairman and CEO, Penumbra: Yeah, it’s a great question. To answer the immediate question, there was nothing one time about this quarter. The two things that really stood out in the U.S., which was what was driving that. Two things around the peripheral part of the business. One, we have a dedicated team for the first time in a while. Their focus is on that. Obviously, over the last few years, our focus with our peripheral team had been split between our coils and our thrombectomy, making it pretty hard to do both well. I think that bodes well for our future, that the integration, as Shruthi said, was really seamless. I’ll be honest, I was incredibly impressed with every member of that team and the leadership of the sales team for getting to allow that to happen that way. It’s not.

A normal process to be that seamless, and it really was. I think we’re in really good shape. I think what this shows is that there’s a huge market and appetite for our very distinctive products that are different than others on the market. I think that will continue. I said that in my prepared remarks. As it relates to the neuro side, I’m really fascinated to watch that. The growth continues to happen there. The number of cases that people are doing in general for MMA embolization has increased notably, and more and more people are moving to our product because of the safety profile of it compared to more traditional means of treatment. I think we’re pretty optimistic about this business. I think together with the thrombectomy, they both become equal drivers of growth. Obviously, you’re going to see the.

A quarter is the quarter that you launch a product, have slightly bigger growth on a sequential basis. Overall, I think going forward, we’re not going to be looking at that business as dragging down our growth. I think both MBO and thrombectomy will be an important part of our growth in 2026 and beyond.

That’s helpful. Hey, Adam, one quick one on the guidance. It does look like the guidance implies a deceleration in Q4. My question is why? The guidance for the year 15-16% for 2025 is about a 4% headwind from China. I guess on a reported basis at 15-16%, is there any reason why growth would slow next year? Thanks for taking the question.

Yeah, look. I think we’ve been pretty clear about learning our lessons on guidance, not getting ahead of ourselves. We’re obviously not going to give sort of backdoor guidance, if you will, for 2026. I’m not going to do that. We’ll give our guidance on the fourth quarter call. Obviously, if you listen carefully, and you did, to what we’ve just said about our business and where we stand. We feel particularly good about where we stand, not just this quarter, but for a while to come, well into next year and the years beyond.

All right. Thank you, Adam.

Thank you.

Abby, Conference Operator: Our next question comes from the line of Joanne Winch with Citibank. Your line is open.

Thank you so much for taking the question. I want to dig a little bit into international sales, please. It seems, based on your commentary, that China headwinds are waning. At what stage are they done? If we adjusted for said headwinds, what would OUS growth have been this quarter? Thank you.

Shruthi Narayan, President, Penumbra: Oh, yeah, thanks. I think. Pretty much by next year, early next year, a lot of our headwind will be very minimal. We do have some China revenue a little bit this year, but. I will look at it as a headwind for next year. In terms of our rest of the international region growth, we mentioned that. Other than outside of China, the rest of the international regions are growing in double digits. I think in the prior quarters, sometimes we have highlighted that thrombectomy part of the O.U.S. a lot of time grow in the mid-teens. So that has been kind of our trend throughout this year and still a lot of growth momentum next year.

Thank you.

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

Abby, Conference Operator: Our next question comes from the line of Vijay Kumar with Evercore. Your line is open.

Hi guys. Thanks for taking my question and congrats on a nice spring year. Adam, maybe my first one for you on the Storm PE. I think in the past you alluded to Storm PE as having the potential to change clinical practice. I’m curious, now that we’ve seen the primary and secondary endpoints, is this enough to change practice? Should we start seeing an acceleration in procedures adoption, or are there any sort of hurdles, if you will, on the adoption of thrombectomy and treating PE cases?

Adam Elsesser, Chairman and CEO, Penumbra: Yeah, look, I can only tell you what we’ve heard in the last week or so. Lots and lots of conversations. I will tell you that a number of non-interventionalists, and I think Shruthi alluded to two pulmonologists that she’s had personal conversations with, and a number of other non-interventionalists have indicated to us that they would be leading the effort in their particular hospitals to change the protocols based on this data. I think the reaction, the positive reaction to this data has been uniform just across interventionalists, non-interventionalists. Now the work starts to get protocols in the hospitals changed. Usually, as we’ve said, you heard members of our steering committee say guidelines sort of lag behind practice sometimes. I think you’ll see the behavior and the protocols in hospitals change, and guidelines will follow that effort. It’s been really.

Heartening to see the excitement around this, and not just with interventionalists, but with non-interventionalists knowing that they now have a very strong alternative for when they know their patients need something more significant. I think it’s a good day for the field and a good moment in time. We’re very optimistic about that.

Understood. And then maybe one P&L question. Gross margins up 180 basis points Q and Q. With SG&A, growth was quite striking, up 25%. Was there any timing benefit or timing impact, if you will, on SG&A OpEx? Or is this a number being proactive as you look at the pipeline, some PP products coming to fruition?

Shruthi Narayan, President, Penumbra: Yeah, no, thanks for your question. On the operating expense side, most of the increases that you see is pretty much all from the investment of our embolization team and the commercial team structure. We have pretty much completed the investment or the build-out by the end of this quarter or last quarter. Going forward, we’ll start to see more leverage, and it will be, the investment level will be lower than what you have seen earlier in the year.

Understood. Thank you.

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

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

Hey, everyone. Thanks for taking the question. I wanted to stay on this Storm PE train of thought for a minute, but I’ll ask this question slightly different. It sounds like there could be kind of an initial benefit from the current interventionalists performing more mechanical thrombectomy. One of the other tertiary benefits that might come is really that smaller hospitals that aren’t using any thrombectomy at all today might start performing these procedures. We saw in the data that it was a very low learning curve, a lot of naive users in this trial. The question that I’ll kind of frame here is, one, talk to us a little bit about the timelines and your expectations of kind of turning on some of these accounts, how difficult or easy that might be.

Once your foot is in the door with PE treatment, are there other venous opportunities now that you’ve placed the Lightning in these smaller hospitals that you could start to go after as well?

Adam Elsesser, Chairman and CEO, Penumbra: Yeah, there’s a lot. To your question. At a respectful time, I’ll try to give you a fairly complete but brief answer. There’s so many layers of opportunity here. There’s practices that are not treating everyone, which is most of them, who now will hopefully start to change their internal protocols. There are hospitals that do not really do intervention for PE, that, as you alluded to, might now take it on. Sometimes that could also have a benefit because once you’re doing PE, you really are sort of related to its cousin of DVT treatments. Some of those places are using our technology for arterial, for example, which is a little bit of a different dynamic. There’s some overlap. All in all, what it does is really put a spotlight on the newest technology, which is CAVT.

The speed of those cases, the safety profile of those cases. In the past, as you know, we’ve talked about and presented really robust data on the health economics of that, which justifies doing this. It’s a procedure that is clearly validated not only clinically, but also economically. I think it just really opens the door for a lot of people. I personally had the experience at TCT of talking to a cardiologist who runs a very well-known national practice, but their group doesn’t typically do PE. It’s covered by another specialty in their hospital. After hearing the data, they were particularly excited about getting in there, helping their colleagues, opening up the coverage capacity pretty dramatically. That was just one of many, many conversations. It takes some time. Can’t all happen in one quarter, but it puts us in a really good spot for 2026.

Okay. A separate follow-up question here. Forgive me if you guys had kind of gone over these details already before, but this is the first I’m hearing a little bit more of Lightning Flash 3.0. Can you just spend a minute talking about timings for when that goes into a broader launch, how important it is, where do you think we’ll see the benefits of 3.0 over 2.0? Thanks, guys.

Shruthi Narayan, President, Penumbra: Yeah. With 3.0, as Adam alluded to on the prepared remarks, it is really a hardware and a software update. What it does is it really improves the fidelity. What that means is these cases, as you saw from Storm PE, 25-minute device times and really the fastest on the market right now. Flash 3.0 is going to make it even faster, even better in terms of overall safety profile, blood mitigation, all the things that our physicians have now sort of come to expect. This really moves that even further forward by improving those case times even more.

Abby, Conference Operator: Our next question comes from the line of Bill Plevanic with Canaccord. Your line is open.

Yeah, great. Thanks. Good evening. Thanks for taking my questions. The first is going to be, I understand on the guidance you want to be conservative, but the high end of that guidance is up 2% sequentially. You did up 4.8% and 5.1% in the last year and the year before. And I’m just trying to, is there anything specific that you’re concerned about that you’re only guiding up 2% and not the 5% that would be in line with the past two years?

Adam Elsesser, Chairman and CEO, Penumbra: Not something sort of I look at in all the various ways you look at it. I look at what we beat by and what we raise by. I think that’s a pretty solid guide up. We’re obviously not going to want to get ahead of ourselves. There is so much positive work to do over the next period of time. Let’s give us a chance to get started. Let’s get going. We’re only a week into Storm PE. I think we’ll feel pretty comfortable. We got a couple of products to launch in peripheral and neuro strong. Bear with us. We’ll be good.

All right. Just to follow up, again, on the FDA, truly appreciate the update, a lot of detail today. My question is, is the FDA requiring any additional testing and/or clinical data from you, or is this a purely back and forth at this point?

Yeah. Again, I want to remain prudent. I was pretty clear about that. What I said in my prepared remarks is we have already answered very thoroughly all the questions that we had received at that point. That has already been done. They’re now in the phase where they can obviously ask for clarifications or additional questions. I can’t tell you what that’s going to be yet. We’ve been through, obviously, for a period of time here, very, very thorough questions, like any new product that they review in the neuro division. Totally appropriate and not totally unexpected.

Is the shutdown impacting their responses, or are they continuing to work through?

I can’t speak to that on a sort of daily basis, but as of now, we have not experienced any sense of delay because of the shutdown. Obviously, that’s a process that’s in real time and continuous. I can’t speak to that, what might happen end of this week or next week or what have you.

Okay, great. Thanks for taking my questions.

Of course.

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

Good afternoon, and thanks for taking the questions. It’s been a lot of focus on Storm PE and pulmonary embolism. Your U.S. VTE business continues to grow at a healthy clip. Maybe you can give us kind of the latest and greatest on trends on the DVT side of the business and how you’re thinking about growth there.

Shruthi Narayan, President, Penumbra: Thanks. That’s a great question. On the DVT side, what we’re again seeing is just a positive response to Flash 2.0. We have commented on the VTE segment as a whole growing consistently the past several quarters, and that trend is expected to continue. You’re just going to see physicians, as they hear about Storm results, start adopting the technology on PE. If they haven’t yet used us on DVT, you’re going to see that dynamic play out. I think it just sets us up really well here for the future. Hopefully, that answers the question.

That does. That’s really helpful. Just one quick follow-up there. In the past, you’ve talked about DVT being a little bit different in that you’re focused more on the health economic side and working in collaboration with some hospital accounts. I guess. Do you still have a focus there, and are you going to continue to execute on that kind of health economic data on the DVT side?

Absolutely. We’re starting to see those results get presented at different conferences, just some of the market access data sets, working with the Vizient and the Premier databases. The physician community is starting to hear about that. We also have our hospital engagement team that is actively having conversations with different folks within the hospitals to communicate that information. What you’ll also see is, again, the benefit of Storm PE applies to the overall sort of VTE segment. You’re just going to see more excitement within the hospital to treat these patients. The level one evidence that’s now available will help on the DVT side as well.

Great. Thank you.

Abby, Conference Operator: Our next question comes from the line of Peter Chickering with Deutsche Bank. Your line is open.

Hey, guys. Good afternoon. Thanks for taking my questions. A few follow-ups here on U.S. thrombectomy. Can you talk about market share versus market growth in the quarter? Can you quantify how many new accounts you added this quarter and how you see that in the fourth quarter post the Storm trial?

Adam Elsesser, Chairman and CEO, Penumbra: Yeah. Obviously. There’s comparative information out there with other companies. Obviously, a huge chunk of this is all before Storm, obviously, came out, but a huge chunk of that was market share. I think that that’s known. It’s not just the number of new accounts isn’t really the complete way to look at it because, obviously, there are a number of different physicians within each account. Some use one product, another uses another. There’s mix between that. That’s not a good measure. When we look at the people who were using something and switched to us, that has continued all year long, obviously, at the end of last year and all the way through this year. What was surprising was.

I guess not surprising, but pleasant to see, is just in the last week, because of the data and the safety profile as one of the cited reasons for their switch, we saw people who have moved from older technology to newer. All signs are that that will continue. I think it’s a combination going forward of continued share shift from older type of technology to the newer CAVT. What will play out, I think, over the next year or so is the increase in the number of patients treated. I think they’re tied. DVT and PE play into each other that way. I think you’re going to see some growth over the next two, three years.

Okay. If I sit back and look at market growth, how many PERT teams do you think were created this year? And how does it look from hospital look post-Storm trials? It does seem to be a lot of excitement last week at TCT about starting more PERT programs. Thank you.

Yeah. I think, look, there’s two different groups of PERT teams. There’s the formal PERT teams that are also members of the PERT consortium. And then there are lots and lots of sort of local PERT teams that haven’t joined the PERT consortium. Some of the time, smaller hospitals are just newer in the process. What I was very pleased to see is, at the beginning of TCT, the PERT consortium announced a pretty significant effort over the next couple of years to dramatically increase the number of members of their consortium, as well as really help get sort of with the most current technology and the idea that these people can be helped in a different way. I think there’s a lot of energy ready to go. Coming out of the TCT meeting and also at Viva, that was really clear that.

People are going to have either informal PERT programs, which is a cross-functional group of people caring about these patients differently, or formalize them and be part of the PERT consortium. Either way, I think we’re seeing a huge change in energy and focus around pulmonary embolism patients.

Great. Thanks so much.

Thank you.

Abby, Conference Operator: Our final question comes from the line of Ryan Zimmerman with BTIG. Your line is open.

Thanks for squeezing me in. I appreciate that very much. I’ll ask the two questions up front. We haven’t talked much about the interim update on Strike PE out of TCT. I’m wondering if you can kind of give us your high-level thoughts on that. We looked at the data, good kind of RVLV changes. I think certainly there are some other aspects to it that may have stuck out or been on people’s minds. I’m curious to get your high-level thoughts. The other question is just directed at Shruthi, which is embolization and access. You talked about it. These markets typically don’t grow at the kind of rates that you’re seeing. Is it just the products themselves? Is it higher use of MMA?

I’m just curious if you could kind of talk specifically about what is going to drive this durably for the time being. Thanks.

Shruthi Narayan, President, Penumbra: Yeah. Yeah. Great questions. On the first one there with Strike PE, just like you commented on, I mean, there’s obviously Storm PE is kind of the highlight right now, but Strike PE certainly confirms the longer-term benefit of CAVT. As you may recall, that study goes out to one year and looks at functional outcomes. Longer term, how do these patients do out to one year? It just adds to the overall body of evidence. At Viva, there was a specific subset presented on just the use of the Flash product in these patients and their follow-up out to one year. At TCT, there was a data set around the high-risk PE patients and just showing that CAVT can have a real benefit in that patient group. Overall, I think it’s just a growing body of evidence in PE.

I think what you’ll start to see is that these PERT teams and PE teams across the board are just going to have more of a focus around treating more patients with CAVT. On your second question, as it relates to the embolization products and that category as a whole, the team now is in place to focus 100% on our embolization products. While we are market leading, we do not yet have 100% of the market. I think there’s still opportunity to continue to grow that. Our physicians love the way the coils perform. The focus just allows our team to be able to go and make sure that the coils are available to everyone. On top of that, you see MMAs are sort of a newer procedure overall.

As Adam alluded to, there are some of the more traditional options like embolics that have been available. The coils, the way they perform, our coils specifically have really been. Our physicians have really been responding well to that. I think you’re seeing here a combination of what we have with the peripheral embolization focus, as well as the growing number of procedures in the MMA category.

Thank you, Shruthi.

Abby, Conference Operator: That concludes the question and answer portion of today’s conference call. Ms. Furlong, I will turn the call back over to you.

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 fourth quarter call.

Abby, Conference Operator: Ladies and gentlemen, this concludes today’s call, and we thank you for your participation. You may now disconnect.

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