John McAulay

John McAulay followed up on the 2026 guidance of 6%-7% revenue growth, contrasting it with the double-digit growth of the past three years. He asked if this reflects any negative shifts, tougher comps, or being later in the Essenz upgrade cycle, or if it's purely conservative positioning. He also inquired about Medicaid coverage for epilepsy patients (estimated at 40%) and the status of state-level reimbursement adjustments.

Answer

Ahmet Tezel, Chief Innovation Officer, clarified there are no negative dynamics, and the guidance is consistent with past philosophy, noting potential upside from epilepsy reimbursement/clinical data and faster oxygenator manufacturing scale-up. Alex Shvartsburg, CFO, added that conservative assumptions include moderation in Essenz price premium and oxygenator output due to third-party supply constraints. Alex Shvartsburg, CFO, also stated that Medicaid is expected to follow Medicare, and while state-level adjustments will take time, they assume Medicaid will ultimately reach the same reimbursement level.

John McAulay asked about the 6%-7% cardiopulmonary growth guidance for 2026, contrasting it with the double-digit growth of the past three years, and questioned if this reflects negative shifts or conservative positioning. He also inquired about Medicaid coverage for epilepsy patients (~40%), state-level reimbursement adjustments, and expectations for Medicaid reimbursement changes by year-end.

Answer

CIO Ahmet Tezel confirmed there are no negative dynamics, and the guidance is consistent with past philosophy, noting potential upside from epilepsy reimbursement/clinical data and faster oxygenator manufacturing scale. CFO Alex Shvartsburg added that conservative assumptions include moderation in Essenz price premium and oxygenator output due to third-party supply constraints. CFO Alex Shvartsburg stated that Medicaid is expected to follow Medicare, and while state-level adjustments will take time, they anticipate ultimately reaching the same reimbursement level.

John McAulay requested an update on AtriCure's PFA program, specifically addressing a lower-than-expected cost paid in Q4 2025 and any potential impact on timing. He also asked for an update on CONVERGE, the state of the field, and customer meetings following the AFib symposium.

Answer

Angie Wirick, CFO of AtriCure, clarified that the lower Q4 PFA payment was due to a $4 million milestone pushing into 2026, not mismodeling. She confirmed that everything is on track, with first-in-human use yielding good results in late 2025. Mike Carrel, President and CEO, added that this does not change the timeline for a clinical trial design, which remains consistent with Analyst Day projections. Mr. Carrel expressed continued optimism for CONVERGE, noting that many sites that previously used it, then shifted to PFA, are now returning for retraining and workflow review. While there are new sites coming on board, the case volume is not yet sufficient to confidently project consistent quarterly growth. He confirmed positive movement in Q4 and ongoing good conversations with customers.

John McAulay asked for an update on the PFA program, specifically clarifying if a lower-than-expected milestone payment in the quarter was due to mismodeling or a pushed-out charge, and any impact on timing for the next update and trial initiation. He also sought an update on the state of the field for CONVERGE (hybrid AFib therapy), including customer meetings post-AFib symposium, given the continued expected declines.

Answer

CFO Angie Wirick clarified that the PFA milestone payment was pushed into 2026, not mismodeling, and confirmed everything is on track, with first-in-human use yielding good results in late 2025. President and CEO Mike Carrel added that this does not change the timeline for clinical trial design. Regarding CONVERGE, Carrel expressed continued optimism, noting that many sites that previously used CONVERGE and then shifted to PFA are now returning, seeking retraining and workflow review. While not enough cases yet to confidently project consistent growth, he sees positive movement and good conversations with customers, indicating the right direction.

John McAulay of Stifel Financial Corp. asked for an update on the next key milestones for the LEAPS, BOX No AF, and PFA clinical programs, and inquired about the future growth rate of SG&A expenses.

Answer

President and CEO Michael Carrel detailed the upcoming milestones: patient follow-up for LEAPS, first patient enrollment for BOX No AF later this year, and first-in-human use for the PFA Encompass clamp by year-end. CFO Angela Wirick projected that SG&A growth would remain in the mid-to-upper single-digit range, demonstrating operating leverage by growing slower than revenue.

John McAulay requested a deeper analysis of the U.S. MIS ablation business, specifically the company's confidence in it bottoming out, and asked about the long-term sales contribution goal for the AtriClip FLEX-Mini.

Answer

CEO Michael H. Carrel expressed confidence in an MIS recovery, citing that clinicians are beginning to see PFA failures and are reconsidering the durable CONVERGE procedure. CFO Angela Wirick stated that the long-term goal for the FLEX-Mini, which already constitutes 15% of U.S. open appendage sales, is to achieve dominant market share within the AtriClip portfolio, similar to the trajectory of previous successful launches.

John McAulay from Stifel asked for clarification on the drivers behind the updated full-year guidance and sought insights into the physician adoption dynamics for the newly launched AMDS device.

Answer

CFO Lance Berry explained the guidance increase was driven by Q2's underlying strength, which surpassed expectations, and a more favorable currency outlook. CEO J. Patrick Mackin described physician adoption of AMDS as rapid, noting that surgeons appreciate its simple and elegant design which effectively solves the critical clinical problem of malperfusion, allowing for immediate integration into their practices after a brief training.

John McAulay asked for clarity on the AMDS contribution to the strong 19% stent graft growth, the timeline for onboarding the 150 facilities seeking approval, and the expected recovery cadence for the tissue business.

Answer

Executive James Mackin stated that while AMDS contributed to the stent graft growth, the company will not break out the specific number. He expressed confidence in onboarding facilities, noting it's a matter of timing with hospital administrative processes. Regarding the tissue business, Mackin reiterated the full-year mid-single-digit growth target, confirming about one-third of the cyber incident backlog was cleared in Q1 with the rest expected to clear by the end of Q3.

John McAulay from Stifel asked for an update on the company's full-year revenue growth guidance of 70-75% and inquired about the current status of the commercial sales force buildup and resource allocation.

Answer

Chief Commercial Officer Thomas Tamberrino reaffirmed the 70-75% growth guidance for 2025, stating the company remains "steadfast in that commentary." He explained that performance would be back-end loaded due to the transition to a capital sales model. He also confirmed that the U.S. commercial team, including direct sales, market access, and market development, is fully staffed and "right on line with where we want to be."

John McAulay from Stifel sought confirmation on the full-year revenue growth guidance of 70-75% and asked for an update on the buildup and current status of the commercial sales force.

Answer

Chief Commercial Officer Thomas Tamberrino reaffirmed the 70-75% revenue growth guidance for 2025, clarifying that the transition to a capital sales model will result in a 'back-end loaded' year. He also confirmed the commercial organization is fully staffed with teams for Health Economics, Market Access, nurse education, direct sales, and market development, stating they are 'right on line with where we want to be.'

John McAulay of Stifel asked for the basis of Profound's confidence in its robust growth forecast (70% in 2025, triple-digits in 2026+) following new Medicare reimbursement, and inquired about the sales model shift to capital sales versus recurring revenue.

Answer

CEO Arun Menawat cited strong clinical value, favorable hospital economics due to higher reimbursement, and a strong capital sales pipeline as drivers of confidence. Chief Commercial Officer Thomas Tamberrino added that increased patient inquiries post-reimbursement create a winning economic model for all stakeholders. Regarding the sales model, Menawat deferred setting a new installed base target to gain predictability, while Tamberrino explained their 'Profound capital solutions' approach includes direct sales, leases, and cost-per-procedure deals to drive multiple revenue streams: capital, disposables, service, and future software upgrades.