Penumbra, Inc. (NYSE:PEN) Q2 2023 Earnings Call Transcript

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Adam Elsesser: Well, first of all, thanks for the question. And as importantly, thank you for giving me the heads up that you were going to ask that question and try to frame it a different way. I’ll repeat the answer. It’s still summertime in 2023. So, we’re not going to obviously answer that in the kind of specifics. What I really want to sort of maybe summarize the comments we’ve made this quarter around what’s ahead of us is not to sort of differentiate between what’s behind us and what’s ahead of us. But just to explain the level of interest deep into our subspecialties at a place in a way that we have not ever seen before in any product we’ve ever launched. And that’s pretty exciting, because it means that the products are working, they’re doing work.

When you go to – for example, a vascular surgeon, who has done open surgery on the arterial side for years and years and has never wanted to even listen to our prior generations. And now is intrigued when they see both and does one case and then tells us that they’re going to convert over to everything. That’s not happening. That’s not normal. And it means that there’s a lot ahead of us, and that’s an exciting moment for us. How do we quantify that between 2023, 2024, 2025 and going forward? It means we have a lot of work ahead. We have to do the work. We have to get in the hospitals. We have to make sure we have that. All of that is positive, and it puts us in a really good shape. So, I apologize for not being able to quantify it for 2024 yet.

Obviously, we will at the appropriate time. But we’re in a really good spot, and we’re pretty excited about it. We know we have the work to do – but this is – these launches are different, all three of them than things we’ve had before.

Shagun Singh: Got it. And then just a question on margins. I was just wondering how you’re thinking about getting to beyond the plus 10%, so maybe plus 20%. And perhaps you can help us think through margin expansion this year and in the future years, do you expect it to be more linear? Or should we think about it differently? Just any directional color would be helpful? Thank you for taking the questions.

Maggie Yuen: Yes, thanks for the question. So in terms of margin, I think in Jason’s portion, we confirmed or continue to target 70% gross margin in a few years. So, I think between ’23 to ’24 and beyond, we are on a pretty good pace to directionally continue to see the same expansion. And that’s also translates to the operating margin trend as we continue to scale pretty well and have infrastructure in place to allow us to scale and allocate resources effectively. So, I think what we have seen so far in terms of margin expansion trend, we can continue to expect that going forward in the next year.

Shagun Singh: Thank you.

Adam Elsesser: Thank you.

Jason Mills: Thanks Shagun.

Operator: Your next question is from the line of Sam Durno with BTIG. Your line is open.

Ryan Zimmerman: Hi. Can you hear me? Okay. It’s actually Ryan on Sam’s line. I’m at SNIS, so I was calling in on his line.

Adam Elsesser: Yes, we can hear you. Yes, we can hear you.

Ryan Zimmerman: Oh, good. All right. Hi guys. So a couple of questions. I’m here listening to all the clinical sessions and it’s clear you’re competing for patients in these trials with Thunderbolt. And just Adam, I want to understand kind of your view on cyclic aspiration today versus maybe what it was a year ago or kind of as you embarked on this endeavor. Has it changed? Or has it not changed in terms of the opportunity in the market for cyclic aspiration relative to maybe things like large bore aspiration and kind of what you think that can do when Thunderbolt does eventually come to market?

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