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AtriCure, Inc. (ATRC)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 revenue of $123.6M grew 13.6% YoY and modestly beat consensus ($122.9M); GAAP EPS loss narrowed to -$0.14, beating consensus (-$0.22). Adjusted EBITDA rose to $8.8M, up >200% YoY . Consensus data from S&P Global Capital IQ.*
  • Strength was led by appendage management (AtriClip FLEX-Mini adoption), pain management (cryoSPHERE MAX/+) and open ablation (EnCompass). U.S. MIS ablation remained under pressure from PFA adoption, as flagged by management .
  • Guidance: FY2025 revenue maintained at $517–$527M; adjusted EBITDA raised to $44–$46M (from $42–$44M); adjusted loss per share improved to ~$0.50–$0.55. Q2 expected mid-single-digit sequential revenue growth; gross margin ~flat vs 2024. Tariff impact incorporated and expected to be modest (tens of bps) .
  • Near-term stock catalysts: multi-year tailwinds from FLEX-Mini and EnCompass adoption; cryoXT 510(k) clearance broadens TAM; EBITDA guidance raise supports estimate revisions and profitability narrative .

What Went Well and What Went Wrong

What Went Well

  • Appendage management: U.S. AtriClip FLEX‑Mini accelerated adoption; open appendage devices grew ~23% U.S. and contributed >15% of U.S. open appendage revenue. “We are having massive adoption… growing about twice as fast as we had expected from the launch” — CEO Mike Carrel .
  • Pain management: franchise growth accelerated to 39% YoY, with cryoSPHERE MAX cutting procedure time and driving broader adoption and new accounts (+12%). cryoXT probe received 510(k) for amputations, expanding addressable market .
  • Open ablation: EnCompass Clamp strength (sales +47%) and international rollout underway; ~25% YoY growth in accounts; developing PFA-enabled EnCompass for first-in-human later this year .

What Went Wrong

  • MIS ablation (Hybrid AF) headwinds in U.S.: MIS ablation sales fell ~31% YoY on PFA substitution; management expects continued pressure in 2025, with potential improvement later as PFA non-responders return to Hybrid AF pathways .
  • International MIS softness: mixed dynamics including legacy MIS product declines (e.g., Netherlands; usage shifts in Japan) despite strong Convergent growth in Europe (+~50%) and international Convergent +27% overall .
  • No raise to revenue range: despite strength, management kept FY revenue guidance unchanged citing early-year conservatism; EBITDA raise came from SG&A leverage and scale, not top-line increase .

Financial Results

MetricQ3 2024Q4 2024Q1 2025
Revenue ($USD Millions)$115.9 $124.3 $123.6
Revenue Consensus Mean ($USD Millions)$112.3*$121.8*$122.9*
GAAP Diluted EPS ($USD)-$0.17 -$0.33 -$0.14
Adjusted Loss Per Share ($USD)-$0.17 -$0.08 -$0.14
EPS Consensus Mean ($USD)-$0.196*-$0.149*-$0.223*
Gross Margin %74.9% 74.5% 74.9%
Adjusted EBITDA ($USD Millions)$7.9 $12.7 $8.8
  • Q1 beats: Revenue and EPS both beat consensus; adjusted EBITDA up >200% YoY. CEO remarks referenced rounded revenue of ~$124M and adjusted EBITDA ~$9M, consistent with reported figures .
  • S&P Global disclaimer: *Values retrieved from S&P Global Capital IQ.

Segment breakdown (Q1 2025 vs Q1 2024):

SegmentQ1 2024 ($M)Q1 2025 ($M)
U.S. Open ablation$29.3 $33.308
U.S. MIS ablation$12.318 $8.480
U.S. Pain management$12.739 $17.270
U.S. Appendage management$35.892 $42.091
Total U.S.$90.249 $101.149
International Open ablation$7.902 $8.995
International MIS ablation$2.114 $2.013
International Pain management$0.937 $1.789
International Appendage management$7.649 $9.674
Total International$18.602 $22.471
Total Revenue$108.851 $123.620

KPIs and operating metrics:

KPIQ3 2024Q4 2024Q1 2025
Adjusted EBITDA ($M)$7.9 $12.7 $8.8
Cash & Cash Equivalents ($M)$130.3 $122.7 $99.9
Loss from Operations ($M)-$7.4 -$14.5 -$6.0
Gross Profit ($M)$86.8 $92.6 $92.6

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Revenue ($M)FY 2025$517–$527 $517–$527 Maintained
Adjusted EBITDA ($M)FY 2025$42–$44 $44–$46 Raised
Adjusted Loss Per Share ($)FY 2025~$0.57–$0.64 ~$0.50–$0.55 Improved
Gross MarginFY 2025~flat vs 2024 (~75%) ~flat vs 2024 with mix variability Maintained
Cash FlowFY 2025Modest generation Modest generation; net burn in Q1 then positive rest of year Clarified cadence
Revenue cadenceQ2 2025N/AMid-single-digit sequential growth New Q2 detail

Earnings Call Themes & Trends

TopicPrevious Mentions (Q3 2024, Q4 2024)Current Period (Q1 2025)Trend
Pain management adoptionQ3: strong cryoSPHERE pipeline; Q4: +43% QoQ growth; 800 customers in 2024 +39% YoY; cryoSPHERE MAX drives broader use; accounts +12%; cryoXT 510(k) for amputations Strengthening
Appendage management (AtriClip)Q4: FLEX‑Mini U.S. launch; sustained momentum; China approval; CE-mark scope expansion U.S. open growth +23.5%; FLEX‑Mini >15% of U.S. open clip revenue; 510(k) for PRO Mini; rapid adoption Accelerating
Open ablation (EnCompass)Q4: +50% EnCompass growth; EU launch; +21% accounts YoY +47% EnCompass sales; ~25% account growth; PFA-enabled EnCompass 1st-in-human later this year Multi-year tailwind
MIS ablation & PFA dynamicsQ3: sequential softness; Q4: 2025 pressure expected; Europe stabilizing post-PFA U.S. MIS -31% YoY; management expects near-term pressure but sees returning referrals as PFA failures emerge Pressure persists near-term
LeAAPS trial progressQ4: >4,600 enrolled; complete in 2025 5,500 enrolled; targeting 6,500 by Q3; stroke label differentiation expected Ahead of plan
Tariffs/macroQ4: 2025 guidance contemplates mix/margin impacts Tariff impact tens of bps GM; predominantly U.S. manufacturing and suppliers Managed risk

Management Commentary

  • CEO: “Our first quarter performance reflects the strength of our broad platform… led by outstanding performance in both our pain management and appendage management franchises… reporting $9 million of adjusted EBITDA” .
  • CEO on FLEX‑Mini: “We are having massive adoption… growing about twice as fast as we had expected… getting a lot of net new accounts” .
  • CEO on EnCompass/PFA roadmap: “Developing a PFA-enabled version of the EnCompass Clamp and expect first-in-human later this year” .
  • CFO: “We are raising our expectations for full year 2025 adjusted EBITDA to $44 million to $46 million… adjusted loss per share of approximately $0.50 to $0.55” .
  • CFO: “Gross margin… 74.9%, up 27 bps… driven primarily by product mix, along with operational efficiencies” .
  • CFO on MIS: “We do anticipate minimal sequential improvement in U.S. MIS ablation… anticipate pressure to continue in the near-term” .

Q&A Highlights

  • Tariffs: Expected to have “very modest impact… tens of basis points to overall full year gross margin”; revenue insulated by U.S.-centric mix .
  • Revenue guide: Kept unchanged due to early-year conservatism; EBITDA upside from SG&A leverage and scale .
  • Pain management drivers: cryoSPHERE MAX cuts time; broader adoption in thoracotomies; price not a major tailwind .
  • MIS trajectory: U.S. pressure persists; confidence improves as PFA non-responders emerge; sequential improvement expected later .
  • FLEX‑Mini conversion goal: Long-term dominant product in open appendage; multi-year adoption curve .
  • EnCompass OUS rollout: Early innings; reimbursement/logistics pacing adoption; multi-year growth driver .
  • cryoXT launch cadence: Methodical initial roll-out; major contribution expected by mid-to-late 2026; upside possible earlier .

Estimates Context

  • Q1 2025 beats: Revenue $123.6M vs $122.9M consensus; GAAP EPS -$0.14 vs -$0.22 consensus. Q4 2024 and Q3 2024 also exceeded revenue and EPS consensus modestly . Consensus data from S&P Global Capital IQ.*
  • Implications: EBITDA guidance raise and margin commentary likely drive upward revisions to full-year profitability; U.S. MIS pressure may temper revenue revisions while appendage/pain/open tailwinds support sustained double-digit growth narrative .

Key Takeaways for Investors

  • Mix shift toward appendage management and pain management is durable; FLEX‑Mini/PRO Mini and cryoSPHERE MAX/+/XT underpin multi-year growth, with EnCompass adding cardiac surgery tailwinds .
  • Profitability trajectory improving: EBITDA guidance raised; SG&A leverage evident; gross margin stable despite international mix expansion and tariff noise .
  • U.S. MIS headwinds from PFA persist near-term; watch for inflection as PFA non-responders emerge and referrals to Hybrid AF resume (Europe roadmap suggests stabilization then recovery) .
  • Clinical catalysts: LeAAPS completion of enrollment (Q3) and eventual stroke label could be a structural moat; BoxX‑NoAF trial expands TAM via prophylactic treatment .
  • Near-term trading setup: modest top-line beats, EBITDA raise, and product adoption momentum are positives; risk is MIS softness headlines—focus on segment mix and margin resilience .
  • Q2 cadence: mid-single-digit sequential revenue growth guided; monitor FLEX‑Mini penetration, EnCompass OUS rollout, and cryoXT early uptake .
  • Balance sheet and cash: ~$100M cash; expected positive cash generation for remainder of 2025 after Q1 burn .

Footnote: *Consensus estimates values retrieved from S&P Global Capital IQ.