AtriCure, Inc. (NASDAQ:ATRC) Q1 2024 Earnings Call Transcript

Angie Wirick: Marie, you are directionally correct on the revenue components, the open AtriClip business, just under $28 million in the MIS appendage management business, a little over $8 million for the quarter at the 35 point close to $36 million for the quarter. We did actually see our MIS appendage management business go down. That is largely driven by the LARIAT product or Q1 of last year was kind of an outsized quarter and we have just very few customers, so activity within a pretty small base of customers can skew the results there and following up a pretty strong fourth quarter for our MIS AtriClip. We saw a bit of softness in that area of the business in the first quarter. I would say longer term, we would expect LARIAT to not be a big driver behind fluctuations either to the positive or negative just based on the comparable quarters in 2023.

And when we think about our MIS AtriClip business, we are still seeing really strong attachment in our hybrid procedures and would expect as you continue to see strong results within our MIS ablation business for that to be a bit of a carry. But in the longer term, I think you will see probably more of what we have seen in the past from that particular franchise, meaning our appendage management franchise, the growth typically has been driven more by the open side of the business. But I think that there is a pathway given the adoption and trends that we are seeing in MIS ablation to see an uplift on our MSH put them in the future.

Marie Thibault: Okay. That’s really helpful, Angie. Thank you. And then I want to ask the open ablation that that segment was again really strong here in the U.S. I think as of the latest about half or more of it was of the U.S business was EnCompass Clamp. Can you give us an update on the pace of adoption of that new ish system? It does seem like there is more runway ahead, and I recall there was some price uplift as well. But just wondering where you are in the adoption curve and what growth drivers are there for the volume side? Thanks.

Angie Wirick: Alright. So, another great product here with the EnCompass Clamp, that you are still a little bit under 50% of the revenue in the first quarter. And we think we are still in pretty early innings when it comes to adoption our EnCompass Clamp for the quarter over 450 accounts for users of that device, up from the fourth quarter and up from each quarter in 2023. We think about the kind of number of accounts that we have got in the U.S in terms of users on our open side, still plenty of accounts to bring this to and I would say even with an existing accounts plenty of doctors, surgeons that could be using the product as well. So, that’s what we are really targeting in terms of our efforts on the EnCompass Clamp roll out.

This – the open chest market, so our cardiac surgery market still remains vastly underpenetrated. So, while we have seen great traction with this device, we sit here today and say there is still plenty of room to grow and are really targeting on new users and making sure that adoption happens for every patient that’s on the table.

Marie Thibault: Thank you.

Operator: Thank you. [Operator Instructions] Our next question comes from Matthew O’Brien with Piper Sandler. Your line is open.

Unidentified Analyst: Hi. This is Sam [ph]. Your question, I guess first, if we could ask a little bit more about the guidance and what that implies for the rest of the year. And then also maybe what we can expect sequentially throughout the rest of 2024?

Angie Wirick: Hey, Sam. We caught the back part of your question. Can you repeat the first part?

Unidentified Analyst: Sure. Yes. I guess I am just asking about what guidance implies for the rest of the year.

Angie Wirick: Oh. Okay. Sorry. Thanks. Thanks for repeating that. Like we said in the prepared comments, our expectation is just given, I would say the stability that we are seeing in end user markets both in the U.S and internationally, that we would expect some of the historical patterns that you have seen in the business in the past to be present, when you think about sequential growth. So, that means kind of mid to upper-single digit growth from the first quarter to the second quarter of 2024 and again reaffirming the guidance for the full year of the 15% to 17%, driven by that the full business. And as we think through that and think through those numbers, I think understand the interest in each of the components of the business and how that they will drive, I think we have been, you are aware that the company overall of the different growth drivers has been able to promote very robust growth of AtriCure and deliver in both meet and exceed our guidance as we operate throughout the year.

And we have the same expectations as we think through kind of the operations of the remainder of the year.

Unidentified Analyst: Great. Thank you. And then just one more on the appendage management business also, how long do you expect this trialing to last and I know that ultimately you think this will help grow the market? When do you think you could see that kick in?

Mike Carrel: And I think that trialing is going to continue on. I mean that there we have got a competitor in the market as we mentioned. And as everybody is well aware of, they are going to be in the market, people are going to try it and are going to keep using it. And they are going to have some market share relative to that. But as we have talked about, we did, we grew 15% in one of our largest franchises or 15.4% in the U.S. And we haven’t even kicked in a new product that’s going to be introduced later on the year and obviously LeAAPS coming out kind of in subsequent years after that and future product iterations that we have. So, we think that you are already starting to see a little bit of the benefit, because they did get some share this quarter and we still saw some solid robust growth relative to that.