Michael Polark: Thank you.
Operator: Thank you. Our next question is from the line of Frank Takkinen with Lake Street Capital Markets. Please go ahead.
Joel Becker: Hi, Frank.
Frank Takkinen: Thanks for taking the questions. Hey, Joel. Hey, thanks for taking the questions. Congrats on the quarter. I was hoping we could go a little bit deeper into initial implants. I heard your comment that, that was a driver of growth. But maybe if you could speak about the market? Are you gaining market share? Is the market returning to growth? There may be some DIXI in forming the funnel that’s driving better initial implants, pockets of power users emerging? Or just anything you can really share with us to get a little better feel for what is the underlying growth driver of initial implants.
Joel Becker: You bet. Thanks, Frank. So as I mentioned, we really did see good strength within the initial implant patients or product segment. And a lot of it coming from increased utilization within core centers. And so we are seeing a lot of good utilization within those core centers and seeing expanded adoption as well within those centers. So both usage rates as well as adoption rates inside of that core group of centers is what really has been one of the primary drivers. And I think it really gets to one of our key areas of focus, which is how do we take and expand the way people are thinking about utilizing the RNS system inside of their patient populations. So getting people to think about R&S more broadly from where they perhaps had originally been thinking about a very specific set of patients inside of focal refractory population, to expanding those patient populations either through targeted STEM in other areas or network stimulation or combination therapy, really just expanding the utilization as well as the adoption inside of those core centers.
So that has been helpful in driving growth for sure. And then we have been getting benefit out of, and we’ve seen good growth out of DIXI as well, and have been seeing where in certain centers, we do get a further vertical integration and visibility into that patient pipeline and population of patients that can inform how people are thinking about RNS therapy. So that’s the primary — is the utilization and adoption within those core group of centers and expanding the way RNS is used, but then also seeing vertical integration into some — and further up the pipeline in some centers as well.
Frank Takkinen: Got it. That’s good color. And then maybe to speak about seasonality a little bit. I heard the comments around Q3 is typically a little seasonally slower. So maybe talk a little bit about regular seasonality patterns into Q4 and how you incorporated that into the implied guidance for the fourth quarter?
Joel Becker: Yes. We did see some seasonality in so far as that we do see clinicians and institutions take some vacation over the summer. We did see that in some centers. We also see where Q4 does have some seasonality as it relates to, obviously, Thanksgiving and the Christmas holidays. AES, the biggest conference of the year is also in Q4. So those are some of the dynamics, along with then the declining — the minimum contribution we expect from replacement revenue here in Q4 given calendarization of replacement revenue as well. So those would be some factors that we point to as we think about the way Q4 is shaping up.
Frank Takkinen: Got it. And then maybe one last quick one, just to clarify. I think I heard replacements is down to 3% of revenue. I didn’t hear the distinction of whether or not it was 3% of Q3 or 3% of year-to-date or if it’s a trailing 12 months. What is that 3% based off of?
Joel Becker: Rebecca, you maybe want to …
Rebecca Kuhn: Sure. Frank, that 3% — approximately 3% of revenue was a Q3 number. So replacement revenue was about 3% of our total revenue in the third quarter.
Frank Takkinen: Perfect. That’s great. Thanks for taking the questions and congrats again.
Joel Becker: Thanks, Frank.
Operator: Thank you. Our next question is from Robert Marcus with J.P. Morgan. Please go ahead.
Unidentified Analyst: Hi. This is actually Lily [ph] on for Robbie. Thanks for taking the question. Could you talk through the trends that you’re seeing at the top of the funnel in terms of EMU volumes and how that’s translating to RNS implants? It seems like most end markets are basically at or above pre-pandemic levels, and you had a good quarter. So do you think that same kind of [indiscernible] you? And how are you thinking about the operating environment into fourth quarter and 2024?
Joel Becker: Thanks for the question, Lily. I think we are seeing the pipeline as good and consistent and strong. We had a really strong quarter off of what was an all-time high for the company. And so I think speaking to the pipeline and both strength of the pipeline as well as consistency of the pipeline, those are — that’s a really good data point, the strength of the top line that we had. And we’ve continued to see strength in the pipeline in Q3, and while I think we’ve previously commented and I would just reiterate, we don’t know that pipeline volumes are necessarily all the way back to levels where we were seeing not only the throughput through the EMUs return, but also then EMU expansion. We are seeing really good throughput and pipeline in the EMUs. Still not quite sure we are seeing that same level of EMU expansion, but very good and consistent market dynamics from an RNS perspective.
