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AtriCure, Inc. (ATRC)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 2024 revenue was $124.3M, up 16.6% YoY, with U.S. $101.6M (+14.4%) and International $22.7M (+27.7%); gross margin was 74.5% and adjusted EBITDA improved to $12.7M while GAAP EPS was a loss of $0.33 and adjusted loss per share was $0.08 .
  • Sequentially, revenue grew $8.4M (+7.2%) versus Q3, driven by cryoSPHERE pain management, AtriClip FLEX-V in appendage management, and EnCompass clamp adoption; International growth outpaced U.S. .
  • 2025 guidance: revenue $517–$527M (maintained), adjusted EBITDA raised to $42–$44M (from $40–$44M in Jan.), adjusted loss per share $0.57–$0.64, gross margin expected ~flat vs 2024; modest positive cash generation anticipated .
  • Near-term catalysts: March 26 Analyst & Investor Day (pipeline, PFA roadmap, long-term financial goals), CE-Mark launch of EnCompass in Europe, and U.S. launches of cryoSPHERE+ and cryoSPHERE MAX and AtriClip FLEX-Mini .

What Went Well and What Went Wrong

What Went Well

  • Pain management accelerated: franchise grew 32% in 2024 and 43% in Q4; cryoSPHERE+ and cryoSPHERE MAX reduced freeze times by 25–50%, improving adoption. “These probes reduced freeze times by 25% to 50%… resulting in a meaningful overall reduction in cryo nerve block therapy procedure time” (CEO) .
  • Open ablation momentum: EnCompass drove >50% growth within open ablation in Q4; “pretty much all of the growth…is from net new users or an expansion of use” (CEO) .
  • Appendage management strength: U.S. open AtriClip devices up ~20% in Q4 with FLEX-Mini launch; China approval and CE-mark indication expansion support multi-year tailwinds .

What Went Wrong

  • U.S. minimally invasive (MIS) pressure: hybrid ablation and MIS AtriClip devices expected to decline in 2025 due to PFA adoption; management assumes no YoY growth for these categories in the U.S. (CFO) .
  • Mix-driven margin headwinds: gross margin fell YoY to 74.5% in Q4 due to less favorable product/geography mix; rebasing around ~75% for 2025 (CFO) .
  • One-time IPR&D expense: $12M upfront PFA licensing payment lifted R&D to $35.0M in Q4 and widened GAAP loss; adjusted EBITDA/LPS exclude acquired IPR&D going forward .

Financial Results

Summary Metrics (Quarterly)

MetricQ2 2024Q3 2024Q4 2024
Revenue ($USD Millions)$116.269 $115.910 $124.277
Gross Margin (%)74.7% 74.9% 74.5%
GAAP EPS (Basic & Diluted)$(0.17) $(0.17) $(0.33)
Adjusted EBITDA ($USD Millions)$7.750 $7.887 $12.688
Adjusted Loss Per Share ($)$(0.17) $(0.17) $(0.08)

Notes:

  • Sequential revenue growth +7.2% in Q4 vs Q3 (CFO commentary) .
  • Q4 GAAP loss driven by $12M acquired IPR&D; non-GAAP metrics exclude IPR&D hence improved adjusted results .

Segment Breakdown – United States Revenue ($USD Thousands)

SegmentQ2 2024Q3 2024Q4 2024
Open ablation$30,760 $30,601 $32,986
Minimally invasive ablation$11,828 $11,117 $10,474
Pain management$15,006 $16,314 $17,785
Appendage management$37,945 $37,420 $40,331
Total United States$95,539 $95,452 $101,576

Segment Breakdown – International Revenue ($USD Thousands)

SegmentQ2 2024Q3 2024Q4 2024
Open ablation$9,170 $8,607 $9,014
Minimally invasive ablation$1,764 $1,681 $2,545
Pain management$1,241 $1,590 $1,856
Appendage management$8,555 $8,580 $9,286
Total International$20,730 $20,458 $22,701

KPIs and Operating Expenses ($USD Thousands)

MetricQ2 2024Q3 2024Q4 2024
Gross Profit$86,844 $86,793 $92,619
R&D Expense$20,416 $20,960 $34,957
SG&A Expense$73,596 $73,238 $72,185
Loss from Operations$(7,168) $(7,405) $(14,523)

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
RevenueFY 2025$517–$527M $517–$527M Maintained
Adjusted EBITDAFY 2025$40–$44M $42–$44M Raised low end by $2M
Adjusted Loss Per ShareFY 2025N/A $0.57–$0.64 Initiated
Gross MarginFY 2025N/A ~flat vs 2024 (~75%) Provided qualitative
Cash FlowFY 2025Modest positive Modest positive Maintained
Revenue CadenceFY 2025N/A Q1 2025 likely flat vs Q4 2024 Provided qualitative

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 2024)Previous Mentions (Q3 2024)Current Period (Q4 2024)Trend
Product performance (cryoSPHERE+, MAX; FLEX-Mini)Announced intent to launch two cryoSPHERE probes and advanced AtriClip device; pain mgmt growth; U.S. open appendage outpaced overall growth Acceleration from new products; strong U.S. open appendage and International franchises cryoSPHERE+ and MAX reduced freeze times 25–50%; FLEX-Mini launched, strong early adoption Strengthening adoption, multi-year tailwinds
Open ablation (EnCompass)Continued U.S. adoption Launch in Europe announced; strong contribution to growth CE-Mark launch in Europe; >50% growth in EnCompass; net-new users driving growth Expanding geographically, adoption broadening
Minimally invasive ablation (Hybrid AF vs PFA)Growth in International; U.S. pressure noted International growth 23.3%; U.S. hybrid pressured by PFA U.S. MIS ablation expected to decline in 2025; Europe stabilizing post-PFA, >20% growth U.S. near-term headwind, Europe leading recovery
Regulatory/clinical (PFA platform, BoxX-NoAF, LeAAPS)Continued LeAAPS progress CE-Mark for EnCompass; clinical momentum PFA PMA path; BoxX-NoAF FDA approval; LeAAPS enrollment >4,600 toward 6,500; milestones and payments expected Pipeline building, evidence base expanding
Margin/mix and costsMix drove GM down vs prior year Mix headwind continued Rebase GM around ~75%; material costs offset by EnCompass line savings and scale Stable margins with efficiency offsets
Regional trendsInternational +29% YoY; broad-based growth International +23% YoY; outpaced U.S. International +27.7% YoY; expected to continue outpacing U.S. Sustained outperformance OUS

Management Commentary

  • “These probes reduced freeze times by 25% to 50%… resulting in a meaningful overall reduction in cryo nerve block therapy procedure time” (CEO on cryoSPHERE+ and MAX) .
  • “We are pretty much through most of the PFA piece [in Europe]… growth to over 20% this year in the Convergent area… we do anticipate that dynamic… in the United States” (CEO on MIS/PFA) .
  • “Rebasing around a 75% gross margin… relatively flat [2025]” (CFO) .
  • “We now expect full year 2025 adjusted EBITDA to range from $42M to $44M” (CFO) .
  • “We do anticipate… PMA… [PFA] will go into EnCompass Clamp and EPi-Sense… we’ll roll out more granular timeline at the Analyst Day” (CEO) .

Q&A Highlights

  • EnCompass growth is driven by net-new users and expanded use rather than conversion; CABG market unlocked (CEO) .
  • U.S. MIS ablation and MIS AtriClip expected to decline in 2025; improvement potential in 2H as PFA dynamics normalize (CFO) .
  • International profitability headwind to gross margin offset by U.S. new product margins and manufacturing efficiencies (CFO) .
  • FLEX-Mini conversion timeline is multi-year, similar to FLEX-V adoption curve (CFO) .
  • LeAAPS enrollment targeted for completion in 2025; event-driven design likely requires full follow-up for readout (CEO) .

Estimates Context

  • Wall Street consensus estimates via S&P Global were unavailable at the time of review due to API request limits; therefore, comparisons vs consensus for Q4/Q3/Q2 EPS, revenue, and EBITDA are not included. Values would normally be retrieved from S&P Global; data was unavailable.
  • Modeling implications: rebase gross margin to ~75% in 2025, assume U.S. MIS and MIS AtriClip declines, and integrate raised adjusted EBITDA floor to $42–$44M; Q1 2025 revenue cadence likely flat vs Q4 2024 (CFO) .

Key Takeaways for Investors

  • Mixed but constructive print: double-digit revenue growth and improved adjusted EBITDA, with GAAP loss widened by one-time IPR&D; non-GAAP excludes IPR&D going forward .
  • Product cycle strength: cryoSPHERE+ and MAX plus FLEX-Mini are early but potent adoption drivers; expect multi-year contribution and potential pricing/mix benefits (CFO/CEO) .
  • Open ablation runway: EnCompass adoption remains robust with Europe launch; growth is net-new usage, not just replacement—sustained tailwind into 2025+ .
  • MIS near-term headwind: U.S. hybrid/MIS AtriClip under pressure from PFA; management bakes in declines for 2025—watch for inflection late 2025/2026 as non-responders funnel to Convergent .
  • Margins stable: rebase GM ~75% with OUS mix headwind offset by U.S. new product margins and manufacturing efficiencies; model flat GM in 2025 (CFO) .
  • 2025 outlook: revenue $517–$527M (maintained); adjusted EBITDA raised to $42–$44M; adjusted LPS $0.57–$0.64; Q1 cadence flat to Q4 .
  • Near-term catalysts: March 26 Analyst Day for PFA PMA path, BoxX-NoAF trial details, long-term financial goals; continued OUS expansion with CE-marked EnCompass .