Adam Elsesser: I try to write them all down. There’s a long list of questions, so let me – if I miss one of the specific ones, please re ask it. As I said in the prepared remarks, most, but not all of the hiring is done. The majority of it is now we’re focused on getting them all trained and operated. I will tell you, from years of doing this, this was the most seamless as it related to moving around territories, bringing in new folks than any other expansion we’ve had. And that’s in large part because our team, I think very maturely and sort of as professionals, understood that they will actually benefit more in the long run, as will our patients, by having the ability to focus on less accounts. We had a lot to do. We have very large territories, much larger than our competitors, which is also why we don’t give out our salesforce numbers.
And that has been part of our advantage. It stays that way. But with all of the work ahead and these two big launches and the growth ahead, we just needed more people. We probably should have done it a day or two earlier. Had that happened, it would have turned out differently, but it’s gone really, really well. And it’s been a sort of a remarkable sort of integration. The other thing and part of the reason for that is we have attracted the sort of most talented, most seasoned sales reps from other peripheral vascular companies that we’ve ever attracted. And I think part of that is just on the success of the CAVT products and what they know and hear. So that the professionalism, the ability to move in and pick up quickly has been pretty remarkable.
So it’s gone well. It obviously takes some effort to train them and get them started and so on. We’ve had training classes and all that. But in the long run, I think it’s been one of the easiest things. As it relates to our current projected growth, this is the team that will get us there. Obviously, as that continues to go and the market access projects that we’re working on bear fruit, we might need to evolve that as well. But for now through this year, I think we’re in really good shape.
Pito Chickering: Great. Thanks so much.
Adam Elsesser: Thank you.
Operator: We’ll take our next question from Matthew O’Brien at Piper Sandler.
Unidentified Analyst: Hi, this is Samantha on for Matt. Thank you for taking our question. I guess first I would like to go back and touch on guidance a bit. So I guess the lower end of the revenue guidance is 16%. What does that scenario consider or bake in compared to the top end of the range?
Jason Mills: Yes, I’ll start and then Adam can join in. Obviously, we have a range for U.S. thrombectomy where there’s a low end, and a range for our U.S. business which would contemplate our expectations for what U.S. embolization and access to that also has a low end 27% and 22% respectively. And it’s probably hard on a call where we have finite time to go through every detail on what drives the lower, the higher end or above of each one of those numbers. But in every event, it is market growth, it is things like that internationally, I think we have pretty good visibility. But of course, you let the year play out. So I don’t think there’s anything demonstrable to point out between the lower or upper end. It’s just execution at the end of the day.
Unidentified Analyst: Great. Thank you so much. And then one thing, I guess one of the bright spots for us this quarter was the EBIT was higher than we were expecting. Where do you kind of see the margins moving in the long term?
Maggie Yuen: I think, yes, we’re very pleased with our profitability this year. I mean, it kind of demonstrates that we can scale and continue to invest at the same time. Our gross margin, we’re continuing seeing favorable product mix. So we are on track to our longer term 70% plus margin target and pretty sure that will pull through to the bottom line and we’ll continue to invest. But I think we are setting up for very good infrastructure to scale.
Unidentified Analyst: Thank you.
Adam Elsesser: Thank you.
Jason Mills: Thanks.
Operator: We’ll take our next question from Michael Sarcone at Jefferies.
Michael Sarcone: Hey, good afternoon and thanks for taking my questions. Just for the first one, do you think you can give us an update on the status of the VAC processes that you’re working through with Flash or Bolt? We’d just love to get an update there.
Adam Elsesser: Yes, it’s a great question. So obviously, the uptick that we saw starting in late November and continuing assumes that a lot more of those customers have come on board and started using the products. So we’re just like we said we were on the third quarter, i.e., we’re getting through a lot of those. We still have some to go. We’re not, obviously, in every account in the country, and we have more coming. But a big bolus of those came in late November and into December, which is what we had hoped for. And now we’re seeing the benefit of that. And as we continue, the focus now is, yes, on continuing getting the remainder, but really focuses on moving to getting the physicians up and running and using the product on a regular basis.
So it’s a really good phase. Some of that administrative part is done and derisk. And now we’re just enjoying the early text cases. We get texts from reps and the early cases and how they’re all going and pictures of cloud and excitement and so on. So we’re moving into that phase, which is a lot more fun than the heavy burden of the administrative load there.
Michael Sarcone: That’s helpful. Thanks. And then just last one for me. Could you give us any more color on the different bells and whistles you’ve added to the Flash 2.0? I think you said it optimizes the advantages of CAVT, but anything that could help us crystallize that more?
Adam Elsesser: Yes, I think you would frame it the following way. We get more clot out faster with even less blood loss than before.
Michael Sarcone: All right. Thanks, Adam.
Adam Elsesser: Thanks.
Operator: And next, we’ll move to Richard Newitter at Truist Securities.
Richard Newitter: Hi, guys. Thanks for taking the questions. Maybe just on the guidance and the philosophy there, Adam, Jason. The 2024 guide, particularly with respect to the U.S., you’re kind of very accountable on the metrics there, the revenue breakdown. Thank you for that. I guess what I’d like to know, going off Robbie’s question earlier, what philosophically is your approach to guidance this year, last year and in the fourth quarter? You came close, but it wasn’t necessarily upside relative to the guide or the consensus. So how should we think about your approach to this year? And I’m particularly talking about the U.S. thrombectomy numbers because that’s where I think you’re going to be greater the hardest. Is this aspirational? Is this a floor [ph]? What can you give us in terms of how much cushion is built in? And how you set you up for better expectations in management and execution? Thank you.
Adam Elsesser: So I would comment that we’re running out of time on your pun, the fact that our guide is aspirational, and that’s the products we sell. I don’t think you intended that pun, but I appreciate the effort, if you did. The fact is this, we learned a lot. Last year was a great year for us. We learned a lot, we have not had a year that had the scale of growth and excitement around our product in our company’s history. And so it was really hard to figure that out. How do we get the kind of information that can give proper guidance and so on. And we came really close and I’m pretty proud of that, given the scale of growth in the transformational aspect of last year. Obviously, better to hit the number and move on. But in the long run, it is not as important as having the foundation to continue to grow from year-over-year.
So we’ve learned a lot, and I think we’re going to be more careful and thoughtful about it. We understand these products better, we understand the rhythm of them, the level of interest. We’re further into it. So we have a lot more information. So our philosophy is to not guide aspirationally to use your return, but to really guide with the kind of clarity and information that we’ve done in the past. And again, I think you’ll see that in 2024.
Operator: We’ll go next to David Rescott at Baird.
David Rescott: Hey guys. Thanks for taking the questions. Two questions. I’ll ask them both upfront. First, I heard you call out Flash 2.0. I think maybe specifically, you talked a little bit about expanding to more areas in the body. So just wondering specifically what some of those comments kind of mean? And then should we think about maybe a Bolt 2.0? And then my second question, just on international. It sounds like obviously 2024 is the big investment. I think I heard you call out seeing that accelerate in 2025 to a double-digit range. Just wondering if that growth outlook into 2025 for international is something that would be maybe accretive or just maybe more supportive of the total top line growth of the company? Thank you.
Adam Elsesser: Let me start and then Jason can sort of touch on the question around 2025 and so on. The products, I’m not going to be more specific than I have been about where we think what these products are going to do. What I can tell you is the following. I’ve had the opportunity to hear about them, to see them, to talk to the folks who are designing them and playing with them. I’m really excited about it. The goal again is simple. We want to be able to go after every kind of clot and as much of the body as we can go. These new products do that, they expand that opportunity to get different types of clots in different parts of the body and sometimes both, sometimes just one of those. That’s the goal. And I can’t wait. I think we now have understood this platform of CAVT has totally changed how we’re thinking about this, what we think we can go after, how we can continue to improve the algorithms.
And so the goal here is to be able to go after clot in any part of the body with a lot of confidence that we can get it out and that’s what those products bring us even closer to. When those are done, we’re not going to be done. We’re going to keep adding, we’ll keep innovating, we’ll keep adding 3.0, 4.0 because that’s how great technology works. And I think we’re set up for a pretty nice run here.
Jason Mills: Yes. And David, thanks for your second question. In my prepared remarks, I talked about the international business, and I mentioned 2025, and you’re right. We did say in those prepared remarks that we thought that international revenue could accelerate into the double digits in 2025. And then the next comment that we made was about our CAVT products and sustaining strong growth because the reality is, even hitting our guidance this year in U.S. thrombectomy and doing really well, the market penetration rate we have, the number of patients, we will have helped is still really, really low penetration levels. We will have a long ways to go. So that comment that I made right on the heels of making the comment about international was intended to talk about the fact that this is, as Adam has mentioned several times in the past, growth that can extend over the next ensuing years, a number of years.
And so while I’m not going to quantify what we think 2025 looks like yet, we’re pretty optimistic about 2024 and beyond.
David Rescott: All right. Thank you.
Operator: We’ll go next to Mike Matson at Needham & Company.
Mike Matson: Yes. Thanks for fitting me in. I guess, first, with the efforts outside the U.S. to get the CAVT products on the market, I just want to understand, I know it probably varies by country and whatnot, but it sounds like, generally, you feel like there’s a need to get some reimbursement in place. Is it – or is it just that there’s reimbursement there and it’s just not enough to cover the cost of the products?
Adam Elsesser: Yes. Mike, that’s a good question. We’re talking about large geographies, many different countries in Europe that have different reimbursement schemes country-by-country, same in Latin America and Asia Pacific. So each one is obviously very different. There are going to be cases in which reimbursement is there for the most basic sort of catheter and syringe type system, which is not an expensive reimbursement. And then more sophisticated stuff is not yet reimbursed because they’ve never seen it. They don’t know what it is. And we have to go through that effort. And then in other cases, there’s really no reimbursement yet for that procedure at all. So it’s a little of each. And obviously, we’re focusing on some of the larger areas first and then we’ll continue to do that effort.
Not different just to give some context to what we did in stroke many, many years ago. Stroke was not reimbursed at all. And ironically, still is not in certain countries, and we’ve been doing that work for the better part of almost 20 years now. So I think we know how to do it. It just takes time, and we want to do it right and make sure because we don’t need to rush this because we have the benefit now of growth, particularly in the U.S.
Mike Matson: Okay. Got it. And then just as far as the distributor ordering forecast or patterns you’re expecting in 2024, I was wondering in the commentary around exiting certain markets and certain product categories due to lower pricing. Is China a factor either of those things either distributor ordering patterns or the markets you’re exiting because I know there has been some VBP [ph] over there in the neurovascular area.
Adam Elsesser: Yes, Mike, that’s a really important question. I’m glad you asked it. I just want to maybe remind you and everyone else that we have three different buckets of revenue from China. We have license fees, royalties and distribution. So that structure, as you know has sometimes created funny quarter-by-quarter movement that we’ve talked about over the last couple of years in the past that on a longer-term basis, that same structure has provided us, I think, a lot of protection from some of the current climate in China. So we feel pretty good about it. Going forward, we have a really incredible partner in Genesis. And we believe that our products, particularly the CAVT platform, can ultimately have an important place in the Chinese market. We’ve got a lot of work to do, but I think we’re really set up for that, and we’re pretty excited about it.
Mike Matson: Okay. Got it. Thank you.
Adam Elsesser: Thank you.
Operator: We’ll take our final question today from Margaret Kaczor at William Blair.
