CVRx - Earnings Call - Q3 2025

Executive Summary

• Q3 2025 delivered 10% YoY revenue growth to $14.7M and a gross margin expansion to 87%; the company narrowed FY25 revenue guidance and raised the midpoint slightly, while materially lifting full-year gross margin guidance to 85–86%.
• Results beat Wall Street consensus on revenue ($14.69M vs $14.16M*) and modestly on EPS (−$0.49 vs −$0.501*), while EBITDA was modestly worse than consensus (−$12.1M vs −$11.5M*).
• Commercial execution improved: active implanting centers rose to 250 (from 240 in Q2), U.S. revenue units increased to 420 (from 394 YoY), and reps showed broader contribution; management highlighted manufacturing efficiencies and ASPs as drivers of margin strength.
• Reimbursement tailwinds are strengthening ahead of 2026: Category I CPT finalized and CMS maintained new-tech APC 1580 (~$45k outpatient payment); management sees these as catalysts for a 2026 growth re-acceleration to mid-teens.

What Went Well and What Went Wrong

• What Went Well

  • “We grew revenue by double digits year over year and expanded our commercial footprint… newer reps are hitting their stride” — CEO Kevin Hykes.
  • Gross margin expanded to 87% on higher ASPs and lower cost per unit from manufacturing efficiencies.
  • Reimbursement progress: Category I CPT codes finalized and favorable physician fee levels; CMS maintained new-tech APC 1580 for outpatient procedures (~$45,000).

• What Went Wrong

  • EBITDA came in below consensus (actual −$12.1M vs −$11.5M*), with higher interest expense tied to term loan borrowings; SG&A slightly up YoY.
  • Q4 revenue guide implies slower sequential growth (~6% at midpoint) vs recent 8–10% sequential cadence, reflecting conservatism as rep productivity ramps.
  • R&D increased 26% YoY to $3.1M (compensation and consulting), reflecting investment needs ahead of potential RCT and portfolio initiatives.

Transcript

Operator (participant)

Greetings and welcome to the CVRx Third Quarter 2025 earnings conference call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Mike Vallie, from ICR Healthcare. Thank you, sir. You may begin.

Mike Vallie (Managing Director of Healthcare Investor Relations and Capital Markets Advisory)

Good afternoon. Thank you for joining us today for CVRx's Third Quarter 2025 Earnings Conference Call. Joining me on today's call are the company's President and Chief Executive Officer, Kevin Hykes, and Chief Financial Officer, Jared Oasheim. The remarks today will contain forward-looking statements, including statements about financial guidance. These statements are based on plans and expectations as of today, which may change over time. In addition, actual results could differ materially due to a number of risks and uncertainties, including those identified in the earnings release issued prior to this call and in the company's SEC filings. I would now like to turn the call over to CVRx's President and Chief Executive Officer, Kevin Hykes.

Kevin Hykes (President and CEO)

Thanks, Mike. Good afternoon, everyone, and thank you for joining our third quarter earnings call. Q3 was a strong quarter for CVRx. We grew revenue by double digits year over year and expanded our commercial footprint. Our newer reps are hitting their stride, driving procedure volumes and building productive relationships with the physicians and APPs that manage heart failure patients in the community. Let me remind you of our three strategic priorities for 2025. Our first priority is building a world-class sales organization that develops sustainable Barostim programs with deep therapy adoption. Our sales force transformation is progressing well, and turnover is returning to more normal levels. The first wave of the sales reps hired earlier this year are getting up to speed and making meaningful contributions.

We will continue hiring high-quality talent, but at a more measured pace that aligns with our territory expansion plans rather than the accelerated hiring that was needed to support the transformation. With this foundation in place, we're now concentrating on onboarding the new reps and accelerating their path to productivity. Second, we're targeting centers with the highest potential for sustainable programs and implementing a best practice playbook to drive deep therapy adoption. Our refined approach to account targeting guides our expansion strategy, focusing on high-potential Tier One and Tier Two accounts. That being said, we're also selectively pursuing pragmatic opportunities in Tier Three and Four accounts where we see committed physician champions, administrative support, and the right fundamentals. We added 10 net new centers this quarter and are seeing traction with this approach. Our top accounts are demonstrating the deepening adoption that is the hallmark of an established Barostim program.

More than 20% of our active implanting centers achieved three or more implants in Q3, and our highest-performing sites are now implanting more than 10 patients per quarter. This demonstrates what is possible when committed physician champions and strong institutional support come together. Our third priority is addressing the primary barriers to the adoption of Barostim therapy by improving patient access, expanding therapy awareness, and building out our portfolio of clinical evidence. As it relates to patient access, we are making headway on multiple fronts. In July, CMS proposed maintaining Barostim in new technology APC 1580, with payment of approximately $45,000 for procedures performed in the outpatient setting. The second rule proposed in July and finalized on October 31 is our transition to a Category One CPT code effective January 1 of 2026.

The Category One designation eliminates the experimental and investigational denials regularly seen with Category Three CPT codes, improves prior authorization predictability and throughput, and ensures that physicians are paid fairly and consistently for the procedure. On the coverage front, we are continuing to see encouraging trends and positive support from Medicare, Medicare Advantage, and commercial payers. Taken as a whole, these reimbursement advancements are creating an increasingly solid foundation for patient access and facilitate our work to move Barostim towards standard of care. Our awareness efforts are focused on educating clinicians on the appropriate role of Barostim therapy in the treatment of heart failure. We are engaging more deeply with the networks of referral physicians that surround our targeted centers through expanded national, regional, and local medical education programs.

Beyond these physician-focused programs, we've continued to expand our engagement with advanced practice providers, or APPs, with a significant number of APP-specific educational programs completed year to date. These events are driving substantial interest and awareness in Barostim therapy among community-based APPs who manage most of our indicated heart failure patients on a day-to-day basis. During the quarter, we also had a significant presence at the Heart Failure Society of America meeting, one of the largest global heart failure conferences, where we hosted a multidisciplinary symposium with over 125 attendees. Our clinical evidence portfolio supporting Barostim therapy continues to grow, and we are seeing an increasing flow of independent peer-reviewed publications being submitted from our implanting centers and reporting positive patient outcomes.

Recently, we've seen single-center studies showing significant improvements in Barostim patients, including a reduction in hospitalizations, reduced arrhythmia burden, and a positive impact on the ability to up-titrate and optimize guideline-directed medical therapy. Also, our discussions with FDA around a potential new randomized controlled trial are progressing positively. We submitted our IDE application in mid-October and expect to receive feedback from FDA in late November. If we can reach agreement with FDA on the IDE protocol, we will then approach CMS to apply for Category B IDE coverage, a second and necessary condition in order for us to move forward with the trial. We're pleased with our third-quarter performance. The momentum we're building reflects our investments in team development and go-to-market execution, with an increasingly broad and strong contribution across our account and territory base.

In fact, in the third quarter, we had more sales reps contributing implants than in any quarter in the company's history. We're seeing the consistent methodical progress needed to establish Barostim as a standard of care for heart failure patients. Now, I'd like to turn the call over to Jared for a financial review.

Jared Oasheim (CFO)

Thanks, Kevin. Let me walk through our third-quarter financial results. Revenue was $14.7 million for the three months ended September 30, 2025, an increase of $1.3 million, or 10%, over the three months ended September 30, 2024. Revenue generated in the U.S. was $13.5 million for the three months ended September 30, 2025, an increase of $1.2 million, or 10%, over the three months ended September 30, 2024. Revenue units in the U.S. totaled 420 and 394 for the three months ended September 30, 2025, and 2024, respectively. The increases were primarily driven by continued growth in the U.S. heart failure business as a result of the expansion into new sales territories, new accounts, and increased physician and patient awareness of Barostim. As of September 30, 2025, the company had a total of 250 active implanting centers in the U.S., compared to 240 as of June 30, 2025.

Active implanting centers are customers that have completed at least one commercial heart failure implant in the last 12 months. The number of sales territories in the US increased by three to a total of 50 during the three months ended September 30, 2025. Revenue generated in Europe was $1.2 million for the three months ended September 30, 2025, an increase of $0.1 million, or 12%, over the three months ended September 30, 2024. Total revenue units in Europe decreased to 50 for the three months ended September 30, 2025, compared to 56 in the prior year period. The number of sales territories in Europe remained consistent at five for the three months ended September 30, 2025. Gross profit was $12.8 million for the three months ended September 30, 2025, an increase of $1.5 million, or 15%, over the three months ended September 30, 2024.

Gross margin increased to 87% for the three months ended September 30, 2025, compared to 83% for the three months ended September 30, 2024. Gross margin for the three months ended September 30, 2025, was higher due to an increase in the average selling price and a decrease in the cost per unit, primarily due to an increase in manufacturing efficiencies. R&D expenses increased $0.6 million, or 26%, to $3.1 million for the three months ended September 30, 2025, compared to the three months ended September 30, 2024. This change was driven by a $0.5 million increase in compensation expenses and a $0.2 million increase in consulting expenses, partially offset by a $0.2 million decrease in clinical trial expenses. SG&A expenses increased $0.2 million, or 1%, to $21.9 million for the three months ended September 30, 2025, compared to the three months ended September 30, 2024.

This change was primarily driven by a $0.2 million increase in consulting expenses, a $0.2 million increase in travel expenses, and a $0.2 million increase in non-cash stock-based compensation expense, partially offset by a $0.2 million decrease in advertising expenses and a $0.2 million decrease in compensation expenses. Interest expense increased $0.5 million for the three months ended September 30, 2025, compared to the three months ended September 30, 2024. This increase was driven by the interest expense on higher levels of borrowings under the term loan agreement with Innovatus Capital Partners. Other income net was $0.9 million for the three months ended September 30, 2024, and 2025. These balances consisted of interest income on our interest-bearing accounts.

Net loss was $12.9 million, or $0.49 per share for the three months ended September 30, 2025, compared to a net loss of $13.1 million, or $0.57 per share for the three months ended September 30, 2024. Net loss per share was based on 26.2 million weighted average shares outstanding for the three months ended September 30, 2025, and 22.8 million weighted average shares outstanding for the three months ended September 30, 2024. As of September 30, 2025, cash and cash equivalents were $85.1 million. Net cash used in operating and investing activities was $10 million for the three months ended September 30, 2025, compared to $10.4 million for the three months ended September 30, 2024. Now, turning to guidance. For the full year of 2025, we now expect total revenue between $55.6 million and $56.6 million, compared to prior guidance of $55 million–$57 million.

We now expect full-year gross margin between 85%–86%, compared to prior guidance of 83%–84%. We now expect operating expenses between $98 million-$99 million, compared to the prior guidance of $96 million–$98 million. For the fourth quarter of 2025, we expect to report total revenue between $15 million and $16 million. One additional note is that our existing registration statement is scheduled to expire on November 15th, 2025. As part of good corporate housekeeping, we plan to refresh our registration statement in connection with the filing of our Q3 10Q, which is expected to be filed tomorrow morning. With that, I'll now turn the call back over to Kevin for closing remarks.

Kevin Hykes (President and CEO)

Thank you, Jared. Looking ahead, we now have the fundamentals in place to positively impact the lives of a meaningful number of heart failure patients and to create significant value in doing so. Our sales team is becoming more productive, and we're seeing positive signals from payers across the board. Our clinical evidence is expanding, and our awareness efforts are gaining traction. Financially, we're demonstrating improving operating leverage in our business model as we scale. Combined with our strong cash position, this gives us the resources and runway necessary to execute our strategy. Now, I'd like to open the line for questions. Operator?

Operator (participant)

Thank you. We will now be conducting a question-and-answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate that your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, while we poll for questions. Our first question comes from John Young with Canaccord Genuity. Please proceed with your question.

John Young (Analyst)

Hi, Kevin, Jared. Thanks for the hard question, and congratulations on the quarter. Maybe to start on the guidance, I appreciate the narrowed range, but perhaps you could walk us through why you cut the higher end, given that it sounds like reps are starting to hit their stride from your commentary. Are you expecting more of a benefit in 2026 than from their productivity? Is there anything you're seeing today in the business that's like that as well? Thank you.

Jared Oasheim (CFO)

Hey, John. Happy to cover that one. Yeah, we were really happy with the results we saw in Q3. We're starting to see more of those new reps on the US side get up that productivity curve, but we know the work is not yet done in that arena, and we don't want to get too far ahead of ourselves. The performance that we saw in Q3, we saw that continue into October. That gives us the confidence and the guide that we set out by raising the midpoint of the old guidance that we had previously issued.

John Young (Analyst)

Thank you. And then just on 2026, I'm not sure if you are willing to give any commentary yet, but it looks like the street's modeling about 18.5% growth in 2026. Are you comfortable with that level at this point?

Jared Oasheim (CFO)

Yeah, it's a good question. We're coming off a year where the midpoint of the updated range will be a growth of about 10% compared to 2024. Having that as our baseline, we're still anticipating to continue to invest in this business where we're going to be adding more sales reps, activating more territories, and continuing to invest in the rest of the business. I think as we march into 2026, we're starting to target growth kind of in the mid-teens to see it accelerate from the growth rates we're seeing in 2025. Eventually getting back to those longer-term targets of seeing higher growth rates in the mid-20% range, but that's out in 2027 and beyond.

John Young (Analyst)

Thanks so much, Jared.

Operator (participant)

Our next question comes from Matt O'Brien with Piper Sandler. Please proceed with your question.

Samantha Munoz (VP of MedTech Equity Research)

Hi, this is Samantha on for Matt today. Thanks so much for taking our question and the good performance in the quarter. I also wanted to touch on the productivity improvements with the Salesforce. Could you give any more color or quantification? How many of the sales reps are kind of giving up to the productivity that you'd like to see? Would you say everyone's ramped? Just any more color there would be great.

Kevin Hykes (President and CEO)

Yeah, thanks, Samantha. I'll take that as Kevin. I would say we're pleased with what we're seeing from the new reps, particularly those we've hired in the last three quarters. As Jared mentioned in his comments, I believe more reps today are active and contributing in the quarter than we've ever seen before. We're seeing them start to come up the curve and understand their roles and get comfortable in their territories and contribute. We're nowhere near yet seeing the full productivity that we would expect from these new hires. I think there's still some work to do there. As we've communicated in the past, depending on the background of the individual and the territory that they're assuming or building from scratch, it can take 6–9–12 months for them to really start to contribute.

I would say at this point, we're really pleased with what we're seeing and no reason to think that we won't see continued improvement.

Samantha Munoz (VP of MedTech Equity Research)

That's perfect. Thanks. One more from us. It was great to see the Category One code finalized in the Physician Fee Schedule that was published just a few days ago. How should we be thinking about the reimbursement changes that are going to be implemented starting January 1?

Kevin Hykes (President and CEO)

Sure. That's a great question. I would say overall, we're thrilled with the developments over the last year in reimbursement and what we see on the sort of horizon. We're seeing really strong support from the MACs for traditional Medicare, improving rates from the Medicare Advantage carriers, some really positive signals both at the prior auth level as well as at the kind of second and third level reviews and even at the administrative law judge level. Those are each different points during the appeals process where you challenge a payer to cover a case. We're seeing improving trends in all those areas. Obviously, Category One in January will be an important next step for us. That eliminates the payer's ability to automatically deny our prior authorizations on the basis of them being experimental.

This means as of January One, each authorization has to be reviewed by a human clinician, and reason must be given for why it's being denied. I wouldn't characterize that as an immediate sort of step function change, but it will certainly, as it becomes more and more impactful as we enter the second and third quarter of the year, we will see the friction in the system reduced, and we believe it will result in higher rates of approval and shorter times to those approvals for prior authorizations.

Samantha Munoz (VP of MedTech Equity Research)

Great. Thank you.

Operator (participant)

Our next question comes from Robbie Marcus with JPMorgan. Please proceed with your question.

Hi. This is actually Rohan on for Robbie. Thanks so much for taking our question. I have a question on margins. Gross margin came in a decent clip ahead of expectations in the quarter, and I was just wondering if you could provide some further color on how much of this is due to better pricing versus some of the manufacturing efficiencies that you called out. Is this a new steady state that we should expect heading into 2026 just from a gross margin perspective?

Jared Oasheim (CFO)

Yeah. Hi, Rohan. I think we tried to call it out in the earlier remarks. It is a mix. It is a bit of increased ASPs and an improvement in the cost per unit. ASPs for the quarter were north of $31,000 on a worldwide basis. That is a pretty good step up from what we saw Q3 last year, where it was just below $30,000 per unit across the whole globe for ASPs. I do think the bigger chunk that drove this improvement in Q3 margins was the cost per unit. We are continuing to build more and more units in our facility here in Minneapolis. As a result of that, we are seeing our labor and overhead cost spread over more units, seeing that cost come down.

I think the ASP side of the house, we're not ready to just bake it in just yet longer term, but we do think there is promise that we could maintain these levels moving forward. On the cost side, we do think these are production levels that we're going to continue at or continue to increase upon. That should give us comfort to be able to keep these costs in a similar range moving forward.

Great. Thanks. I guess I also wanted to clarify a prior point that you may have made. Just kind of heading into 2026, given the new Category One CPT code set to take effect and the favorable PFS rates and extension of the APC payment, it also seems like you have a better grasp on the commercial organization as you sit here today. Is it fair to say that all these kind of developments in conjunction should drive an acceleration in sales growth in 2026? Could you frame that, some of the puts and takes for investors, based on how you're thinking about it today?

Yeah. That's a great kind of summary of what we have going into 2026. I think part of this is we're coming off a year from 2024–2025 where we went through a Salesforce transformation. We really implemented this go-to-market strategy that was brought forward at the end of 2024. We're starting to see some really nice results here in the third quarter and driving into the end of the year. I think as we're moving into 2026, we are expecting to see a re-acceleration of growth. As I mentioned earlier, kind of initially targeting the mid-teens for what we would expect for growth rates 2026 over 2025. There is potential for exceeding those expectations if everything lines up for us with the Category One taking effect, with payers moving in the right direction for prior auth approval rates and the time to those approvals.

I think the base case for us at this point is seeing that re-acceleration go from about 10% to the mid-teens as we move into 2026.

Great. Thank you.

Operator (participant)

Our next question comes from Brandon Vazquez with William Blair. Please proceed with your question.

Max O'Brien (Analyst)

Hey, guys. Max O'Brien for Brandon. Thanks for taking the question. Kevin, you mentioned you guys are focused on getting these newly hired reps up to speed more quickly. Can you just touch on how you guys are approaching that? What specifically you guys are doing that's giving you confidence that they will get up the productivity curve quicker? What's giving you confidence that newer reps that you hire will fall into the same playbook? I have a follow-up. Thanks.

Kevin Hykes (President and CEO)

Sure. Great question. I would say it starts with the people that we're hiring. As we've talked about extensively over the last 18 months, we're really trying to develop a sales team that has program development, that has market development skills, that has sort of a process-driven mentality different than what you'd often find in an early-stage sort of startup environment or in a more mature industry where you're fighting for market share. These are people that know how to develop new programs and introduce new therapies. That's the raw material that goes into it.

We've made significant investment in our sales training resources, both the curriculum and the experts that we've hired that train these reps and have instituted a much more deliberate and systematized sales training process that we believe compresses their time to comfort with our therapy and with their territories and with the process necessary to open a sustainable Barostim account. That differs by person, of course, but we're pleased with what we're seeing, and we're pleased, anecdotally at least today, to see some of these reps getting up to speed much faster than has historically been the case. It's probably a combination of all those things. It also comes with picking the right accounts, right? We think we know enough about this market today that we can be better at selecting where to spend our time too.

Pick the right accounts that can get up to speed perhaps more quickly than in the past. It is a combination of factors, but we're pleased with what we're seeing.

Max O'Brien (Analyst)

Got it. That's helpful. Kevin, just on the RCT, can you guys just touch on additional milestones, what might be left there following the next steps in November? Maybe just remind us all what you guys are going after there and what positive results in the future can mean for the TAM?

Jared Oasheim (CFO)

Sure. That's a great question. As a reminder, we are in discussions. We've submitted an IDE for a very significant randomized controlled trial that would triple our TAM by both moving the EF, the ejection fraction cutoff, from 35%–50%, and also moving the cutoff for something called NT-ProBNP. That's a biomarker that describes the stability of heart failure that would move from its current level of 1,600 up to 5,000. The patients that are in that expanded range have a very similar disease and we believe will respond similarly to Barostim therapy. This represents a pretty compelling way to expand that indication to an adjacent group of patients who are very much today in the environments that our sales reps are calling on. That's the goal behind the trial. We have submitted the IDE, as I mentioned, to FDA.

We hope to hear back from them sometime in November. If we can indeed reach agreement on a trial design, we would then go to CMS and submit for a Category B IDE coverage designation. That is a very necessary second step. That means that CMS will agree to pay for the patients who receive our device in this trial. With that second approval, if successful, we would begin center outreach and would anticipate treating the first patients in this trial sometime in the first half of 2026.

Max O'Brien (Analyst)

That's great. Thanks for taking the question, guys.

Jared Oasheim (CFO)

Sure.

Operator (participant)

Our next question comes from Frank Takkinen with Lake Street Capital Markets. Please proceed with your question.

Frank Takkinen (Senior Research Analyst)

Great. Thanks for taking the questions. I'm going to pick up on the RCT, so a little deeper there. Kevin, maybe talk to how many patients you're thinking will be enrolled in this trial. And then on the Category B, do you think you can get a reimbursement rate similar to the ASP that you're currently collecting?

Kevin Hykes (President and CEO)

Sure. Thanks, Frank. As I think maybe we'd mentioned on a prior call, we're seeing this trial at roughly around 2,000 patients randomized to either Barostim therapy or guideline-directed medical care. That would make it one of the largest cardiovascular device trials ever conducted. This would be seen as a significant sort of scientific contribution to the field. It would likely involve 100+ centers given the assumed enrollment rates by center. It would likely take us about four years to enroll this trial with another 18 months to two years of follow-up after that point. It would be a significant trial, a significant investment. We believe there's a good likelihood that CMS will, in fact, cover this under a Category B IDE designation.

The criteria for that designation are clear and are not subjective, and we've designed the trial in a manner that we think would meet those criteria. As it relates to ASPs, I'll let Jared speak to that.

Jared Oasheim (CFO)

Yeah. Happy to jump in on that piece, Frank. Our expectation is that CMS would reimburse the hospitals the exact same rate that they're reimbursing them today in the outpatient setting. If they're being reimbursed $45,000 today under the new tech APC 1580, they'd get a similar reimbursement if these patients are enrolled through the clinical trial.

Frank Takkinen (Senior Research Analyst)

Got it. That's great. Thanks. I think, Kevin, I heard you speak to the concept of Salesforce is stable now and still intending to grow that Salesforce. You've been in the range of three new sales territories per quarter. Is that the right way to think about it in 2026?

Kevin Hykes (President and CEO)

Yeah, I think it is. Thank you. I think at this point, we're pleased with what we're seeing, but we're still working the kinks out of our system, and we think that's probably the right number of new territories per quarter to model going forward. We're hopeful eventually that may increase, but for now, that's the right spot to start.

Frank Takkinen (Senior Research Analyst)

Okay. Perfect. Thanks for taking the questions.

Operator (participant)

Our next question comes from Chase Knickerbocker with Craig-Hallum Capital Group. Please proceed with your question.

Chase Knickerbocker (Senior Research Analyst)

Good afternoon. Thanks for taking the questions. I just wanted to dig in a little bit more on the guide as well. Q4 implies essentially flat year-over-year growth and less sequential growth relative to the past six or seven quarters. I guess, what are you seeing so far in the quarter through October that's the driver here? I'm just kind of having trouble squaring the commentary that some of the reps are getting up to speed faster than expected. I would think with many of your reps now getting to that productive kind of six-plus months in their territory point. I'm just kind of having trouble squaring that. Is there conservatism in that guide? I mean, maybe just kind of speak to the moving pieces.

Jared Oasheim (CFO)

Yeah. Good question, Chase. I mean, as comparing year-over-year, I think we've talked about this the last few quarters. We had a bit of a reset with our top-line numbers back in Q1. We've been working to grow that number sequentially after that Salesforce transformation took place. We've been seeing that sequential growth rate in the range of 8-10%. I think if I look at the guide that's out here for worldwide numbers for Q4, the midpoint would get us to about 6% sequential growth. A little bit of a step back. I think what we're seeing is more reps are getting up the productivity curve, more territories are becoming active. Again, we just want to make sure that we're kind of through the thick of it here before we would get much more aggressive with the numbers coming out.

I think even at the midpoint, we're talking growth north of $1 million sequentially from Q3 to Q4.

Chase Knickerbocker (Senior Research Analyst)

Can you maybe speak to kind of how rep tenure has progressed? Any kind of update to any of the turnover metrics, et cetera, just kind of health of the Salesforce update?

Jared Oasheim (CFO)

Yeah. I think we last gave updates a couple of months ago on the percentage of reps that were hired in 2024, 2025. We have not seen significant changes there. I think Kevin alluded to this in his prepared remarks that we are back to hiring per normal levels. We are not out there accelerating our hiring to backfill a bunch of reps that were turned over. At this stage, we have not seen significant movement in those percentages of reps that were hired in 2024 and 2025.

Chase Knickerbocker (Senior Research Analyst)

Just last.

Jared Oasheim (CFO)

Just to close it out, I mean, overall turnover, kind of returning back to those normal levels. I think we've alluded to it in the past. Annual turnover levels that we think to be normal are kind of in that range of 10–20%.

Chase Knickerbocker (Senior Research Analyst)

Got it. Just maybe on the OPPS, any sort of engagement around Level Six Neurostimulator Code outside of the comments you submitted? Second, Jared, just appreciate those thoughts for 2026. I mean, maybe just also some thoughts on expenses next year, just kind of how you plan to manage the business from an OpEx perspective as we look at 2026.

Jared Oasheim (CFO)

Yep. On the OPPS side, I think everybody's sitting and waiting for when that final rule will post. Just a reminder for everybody that CMS did come out this year in the proposed rule back in July that we would be mapped to the new tech APC 1580 for 2026. We don't expect that to change in the final rule, but there is still a chance for some upside where they could create a Level Six Neurostim Code. We're still waiting for that final rule, which we understand could be published any day now. We'll come back and give updates on that as information becomes available. There's no additional information behind the scenes. It's all of us just waiting for CMS to release this rule. On 2026 spend, we do anticipate that we're going to continue to see leverage in this model.

If we're modeling mid-teens top-line growth with slight improvements on margins, we're not intending all of that gross profit to be spent within operating expenses. We would expect the OPEX growth to be at a lower rate than what we're modeling for top line. Again, we'll come out with more detail on that when we finalize guidance for 2026.

Operator (participant)

Our final question comes from Ross Osborne with Cantor Fitzgerald. Please proceed with your question.

Ross Osborne (Director and Lead Research Analyst)

Hey, guys. Congrats on the progress, and thanks for taking our questions. Maybe just a quick modeling question from us. Your 2025 OpEx guide implies a sequential step down. Is that fair to assume the savings will come from the R&D line sequentially?

Jared Oasheim (CFO)

Yeah, it's a good question, Ross. So actually, I think we expect that. Movement would likely happen within SG&A sequentially from Q3–Q4. Q4 is typically a lighter order when it comes to trade show and marketing spend. And so we would typically see a little or fewer dollars going into that bucket in the fourth quarter as compared to the third.

Ross Osborne (Director and Lead Research Analyst)

Okay. Got it. Then looking at your top accounts doing three or more implants and the highest at greater than 10, are there any structural differences between those averaging three versus 10, or do you think those currently averaging three have the ability to ramp to 10 over time?

Kevin Hykes (President and CEO)

That's a great question. I'll take that. Thanks, Ross. I would say it's the latter. There are no structural differences there. We think this is ultimately the effect of us sort of steadily improving the mix of accounts that we have and their likelihood of deep adoption and the tools that we're applying to them, this methodical process of getting the right stakeholders in place, getting administrative support in place, and building a robust and resilient network in these accounts that allows them to build this into how they treat the disease. We're pleased with what we're seeing. No reason to believe that they couldn't all be operating at that level. In fact, that's our goal.

Ross Osborne (Director and Lead Research Analyst)

Great. Thanks for taking our questions.

Operator (participant)

We've reached the end of our question and answer session. I would now like to turn the floor back over to Kevin Hykes for closing comments.

Kevin Hykes (President and CEO)

Thank you, Operator. And thanks to everyone for joining today. We appreciate your continued support and look forward to updating you on our progress next quarter. Thank you.

Operator (participant)

This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.