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AtriCure, Inc. (ATRC)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 2025 delivered a beat-and-raise: revenue $136.1M (+17.1% YoY) and adjusted EPS loss of $0.02, with adjusted EBITDA $15.4M and cash generation of $17.9M; guidance increased for FY25 revenue and adjusted EBITDA .
  • Versus Wall Street: revenue beat consensus by ~$5.9M ($136.1M vs $130.3M*) and adjusted EPS loss of $0.02 beat consensus loss of ~$$0.163*; 8 estimates for both metrics* .
  • Strong franchise performance: U.S. pain management +41% YoY, U.S. open appendage management +30% YoY; international revenue +23% with broad-based strength .
  • Strategic milestones: completed enrollment (6,500 patients) in LeAAPS stroke-prevention trial; PFA-enabled Encompass platform progressed toward first-in-human; CryoXT amputation pain device poised for launch later in 2025 .

What Went Well and What Went Wrong

What Went Well

  • Robust top-line and profitability: “outstanding second quarter with total revenue of $136 million… over $15 million in adjusted EBITDA and nearly $18 million in cash generation” .
  • Product-led acceleration: “new product launches such as AtriClip FLEX-Mini and cryoSPHERE MAX drove accelerated growth” in appendage management and pain management .
  • Clinical execution: “completed enrollment earlier this month” in LeAAPS, the largest cardiac surgery device trial ever, and BoxX-NoAF site activation is underway .

What Went Wrong

  • Minimally invasive hybrid therapy headwinds: U.S. MIS ablation declined to $7.8M due to PFA catheter adoption; management expects continued modest sequential declines in the hybrid franchise through 2025 .
  • Gross margin mix pressure: GM 74.5%, down ~15 bps YoY on less favorable geographic/product mix, largely international .
  • Operating expense step-up: total OpEx +14.5% YoY to $107.7M, including a $5M PFA milestone; excluding milestone, OpEx +9.2% YoY, reflecting R&D and clinical investment .

Financial Results

Core Financials vs prior quarters

MetricQ4 2024Q1 2025Q2 2025
Revenue ($USD Millions)$124.3 $123.6 $136.1
Gross Profit ($USD Millions)$92.6 $92.6 $101.5
Gross Margin (%)74.5% 74.9% 74.5%
Loss from Operations ($USD Millions)$(14.5) $(6.0) $(6.2)
Adjusted EBITDA ($USD Millions)$12.7 $8.8 $15.4
GAAP EPS (Basic & Diluted) ($USD)$(0.33) $(0.14) $(0.13)
Adjusted EPS ($USD)$(0.08) $(0.14) $(0.02)
Cash and Cash Equivalents ($USD Millions)$122.7 $99.9 $117.8

Additional datapoints:

  • Sequential revenue growth: +10.1% vs Q1 2025 .
  • Cash generation: $17.9M in Q2 (includes PFA milestone payment) .

Segment and Geography Breakdown (Q2 2025 vs Q2 2024)

Segment ($USD Thousands)Q2 2024Q2 2025
U.S. Open Ablation$30,760 $36,468
U.S. Minimally Invasive Ablation$11,828 $7,839
U.S. Pain Management$15,006 $21,168
U.S. Appendage Management$37,945 $45,108
Total U.S.$95,539 $110,583
International Open Ablation$9,170 $10,349
International Minimally Invasive Ablation$1,764 $2,372
International Pain Management$1,241 $2,033
International Appendage Management$8,555 $10,802
Total International$20,730 $25,556
Total Revenue$116,269 $136,139

Notable call commentary:

  • U.S. open appendage management growth +30% (FLEX-Mini adoption ~20% of U.S. appendage revenue) .
  • CryoSPHERE MAX contributed just over 50% of U.S. pain management sales; MAX in a little over half of U.S. accounts .
  • International revenue +23.3% reported (+19.9% cc), with Europe $16.1M (+27.7%) and APAC/Other $9.4M (+16.3%) .

Estimates vs Actual (S&P Global; Q2 2025)

MetricConsensus EstimateActual
Revenue ($USD Millions)$130.3*$136.1
Primary EPS ($USD)$(0.163)*$(0.02)*
  • Revenue - # of Estimates: 8*; Primary EPS - # of Estimates: 8*.
  • Values retrieved from S&P Global.*

Guidance Changes

MetricPeriodPrevious Guidance (Q1 2025)Current Guidance (Q2 2025)Change
Revenue ($USD Millions)FY 2025$517–$527 $527–$533 Raised
Adjusted EBITDA ($USD Millions)FY 2025$44–$46 $49–$52 Raised
Adjusted Loss per Share ($USD)FY 2025$(0.50)–$(0.55) $(0.34)–$(0.39) Improved
Gross Margin (%)FY 2025Comparable to 2024 (qualitative) Comparable to 2024 (maintained) Maintained
Cash FlowFY 2025Modest positive generation Modest positive generation (reiterated) Maintained
Quarterly Cadence2H 2025Not specifiedQ3 low single-digit sequential decline; strong rebound in Q4 New cadence color

Drivers:

  • Strength in pain management and appendage management, ongoing Encompass adoption; international outpacing U.S.; hybrid MIS expected to remain pressured by PFA catheter adoption .

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4 2024 and Q1 2025)Current Period (Q2 2025)Trend
Product performance (Pain Mgmt)Launches of cryoSPHERE+ and MAX highlighted in Q4; Q1 noted strong MAX adoption U.S. pain mgmt +41% YoY; MAX >50% franchise sales; in >50% U.S. accounts Accelerating adoption; price and volume benefits
Appendage Management (AtriClip)FLEX-V strength in Q4; FLEX-Mini highlighted in Q1 U.S. open appendage +30% YoY; FLEX-Mini ~20% of U.S. appendage rev; introducing PRO-Mini Mix shift toward FLEX-Mini; halo on FLEX-V
Open Ablation (Encompass)Encompass drove growth in Q4 and Q1 Open ablation +15% YoY; 3rd anniversary of Encompass; penetration rising Sustained double-digit trajectory, runway in CABG patients
MIS Hybrid TherapyEarly pressure from PFA noted Continued pressure in U.S.; expect modest sequential declines through 2025 Ongoing headwind; cautious stance
R&D execution / Clinical trialsIPR&D investment impacted Q4; strong clinical pipeline LeAAPS enrollment completed (6,500); BoxX-NoAF site activation; robust follow-up planned Execution milestone; broadening TAM
PFA developmentLicensing/IPR&D in Q4 Generators delivered; preclinical testing underway; first-in-human Encompass PFA expected by year-end Advancing toward clinical use
Regional trendsInternational growth strong in Q4/Q1 Europe +27.7%; APAC/Other +16.3%; mix modestly pressured GM International strength; mix considerations
Regulatory / new indicationsDevice launches highlighted in prior quarters 510(k) for CryoXT; initial procedures completed; launch planned for later 2025 Expansion into amputation pain; upside in 2026

Management Commentary

  • CEO: “new product launches such as AtriClip FLEX-Mini and cryoSPHERE MAX drove accelerated growth… first lower limb amputation procedures using our CryoXT device… we began testing our PFA device for cardiac surgery” .
  • CEO on market runway: CABG patient penetration moving toward 80–90% in AFib-only patients over time; BoxX-NoAF could triple the market; “more than a decade worth of really strong growth sitting in front of us” .
  • CFO: “Gross margin was 74.5%… decrease primarily driven by less favorable geographic and product mix… total operating expenses included a $5 million milestone payment under the PFA co-development agreement” .
  • CFO on outlook: FY25 revenue $527–$533M; adjusted EBITDA $49–$52M; adjusted LPS $(0.34)–$(0.39); Q3 seasonality down low single digits sequentially, rebound in Q4 .

Q&A Highlights

  • Appendage management utilization post-LeAAPS: Trial completion has “zero impact” on revenue; overall adoption rising; competition has increased awareness, aiding AtriClip growth .
  • MIS hybrid therapy: Pressure from PFA persists; management sets expectations low for near-term recovery while other franchises more than offset headwinds .
  • Pain management drivers: MAX cut freeze time (2 min to 1 min), enabling procedural throughput; volume growth a little over 30% with pricing uplift; strong new account adoption .
  • CryoXT launch: Minimal 2025 revenue contribution; learning-focused rollout for a bigger 2026 impact .
  • PFA clamp differentiation: Combining PFA + RF in one Encompass clamp with single generator; ergonomic and time-saving benefits .
  • SG&A cadence: Expect mid-to-upper single-digit growth, below top-line, reflecting scale efficiencies .

Estimates Context

  • Q2 2025 beat: revenue $136.1M vs consensus $130.3M*; adjusted Primary EPS $(0.02)* vs $(0.163); both based on 8 estimates .
  • Implications: Consensus likely to move higher for FY25 revenue and EBITDA after raised guidance; hybrid MIS assumptions should remain conservative given management commentary .
  • Values retrieved from S&P Global.*

Key Takeaways for Investors

  • Beat-and-raise quarter driven by product leadership; near-term catalysts include CryoXT launch learning-cycle in 2H and first-in-human PFA Encompass by year-end .
  • Pain management is a secular growth engine with strong volume and pricing mix from MAX; expect above-company growth in 2H though comps toughen .
  • Appendage management momentum accelerating (FLEX-Mini, PRO-Mini), with competition expanding awareness and AtriCure’s clinical evidence strategy underpinning sustained share .
  • Hybrid MIS remains a drag; model it cautiously with continued sequential pressure through FY25, while open ablation and appendage management offset .
  • International expansion is broad-based and outpacing U.S.; monitor GM impact from geographic/product mix .
  • LeAAPS completion is a strategic inflection—follow-up milestones and eventual data could expand indications and guidelines; BoxX-NoAF site activations broaden TAM over time .
  • Near-term trading catalyst: sustained execution with typical Q3 seasonality and Q4 rebound; consensus upgrades likely around raised FY25 revenue/EBITDA and continuing franchise strength .

Additional Relevant Press Releases

  • LeAAPS enrollment completion (6,500 patients; largest cardiac surgery device trial): reinforces strategic clinical evidence plan and potential guideline impact .
  • CryoXT device launch (post-amputation pain; announced Sep 9, 2025): validates call commentary on initial procedures and sets stage for 2026 revenue contribution .

Non-GAAP notes:

  • Adjusted EBITDA excludes items such as acquired IPR&D/milestone payments (e.g., $5M PFA milestone in Q2) and share-based compensation; adjusted EPS excludes non-cash/fair value and certain one-time items; reconciliations provided in 8-K .

Footnote: Values marked with * are retrieved from S&P Global.