AtriCure, Inc. Canaccord Genuity's 46th Annual Growth Conference

Great. Thank you. All right, well, thank you for having us here, Bill, and Canaccord today. We'll do a couple quick overview slides. I think the number one thing to really understand and know about us is that we are focused on helping patients with complex AFib and pain after surgery. Very simply, we use ablation and products to take out the left atrial appendage to reduce stroke. This is what we do. This is all we do, and we do it better than anybody else in the world. We're number one in every one of our markets, and we've got a strong portfolio across the board.

One of the things that we've also now demonstrated is not only do we have consistent growth, and if you look at our numbers, it's been about an 18% CAGR over the last five years, but on top of that, we've now started to generate real profit. Most recent quarter, we had 77% gross margins. We had net income for the third quarter in a row, and we're generating cash. There's no need to raise capital. This business is in a very healthy position for us. In addition to that, we're going after very large unmet need markets that we, again, are the leader in establishing these markets.

It's over $10 billion of a TAM when you look at all the markets that we're going after, so very large market opportunities, and if you look at our numbers, if we're going to do $600 million plus this year, $602 million to $610 million or so, obviously a very large market opportunity sitting in front of us. We are global in 58 countries around the world. Then we've got big catalysts coming out that eight years ago, if I was up here, we were talking about starting these trials. Now these trials are coming to the fruition. There's real data that will be happening in the middle of next year, in the early part of May, that we're excited about that really almost triples the size of the overall TAM in the market.

What is really nice about the trials that we have is they are in existing markets with existing customers, with existing technology, and existing reimbursement that is there. The data should accelerate overall the growth when you look at it over the next 5 to 10 years. This really was the basis for the team putting together our long-range plan that we presented in March of 2025, where we set the stake for $1 billion in revenue by 2030, with a 20% adjusted EBITDA. We are already well ahead of plan. The mid-marker, the next 3 years was really 2028 numbers that shows an adjusted EBITDA of 14%. Just this most recent quarter, we did 17%. You can tell that we are well ahead of plan on both the top-line growth and the bottom line in our plan. We put a plan out there.

What you get from AtriCure is not only are we a market leader, but we are consistent at hitting our numbers quarter after quarter. You can count on us from that standpoint. Just really briefly about AFib, I think everybody knows AFib is a terrible disease, causes strokes, causes heart failure. It is a debilitating disease. That 59 million patient number is up from, I think, 30 million when I started with the company a little over 10 years ago. The numbers keep growing as both people get heavier and they live longer, they are going to go into AFib. In that market, I briefly touched upon this, but our goal is to establish that the 2 million patients that undergo cardiac surgery every year, let me repeat that, 2 million patients undergo cardiac surgery every single year, 300,000 in the U.S.

The trials that we are running right now are that every patient that hits that operating room table would get an ablation and an AtriClip with our EnCompass clamp and our AtriClip technology. We will be the only company in the world with that labeling. These trials are not small. They are the largest trials ever done in cardiac surgery. Our LEAPS trial is to reduce stroke. That trial was 6,573 patients. It is completely enrolled, and all we are waiting on is the events to occur, and we will get that data by the end of the decade. Our BoxX-NoAF trial, I challenge you to say that five times fast. It is not easy to say. But what it is that it is to reduce postoperative AFib and stunt AFib from developing in patients that undergo cardiac surgery.

50% of patients that undergo cardiac surgery go into AFib in their lifetime. The goal here is that every patient gets that ablation and does that, and we can reduce that quite considerably. That is a 1,000-patient trial. What is exciting about this trial is it has enrolled about 50% faster than we had expected. We thought that it would be full enrollment by the end of 2028. We will be fully enrolled by the end of this year. We will have data by the middle of next year on the post-op reduction of atrial fibrillation, which is a debilitating aspect of going into cardiac surgery. We think that we are on the cusp of some really major catalysts and market-expanding trials that, again, will be very unique to our products.

There are no other products being used in this trial other than the AtriCure EnCompass clamp and the AtriClip product that are being used there. Pain after surgery was an area of the business that we got into, and really rolled out our first product in 2019, but it has been under development for many years. We have seen this grow into an almost $100 million franchise during that period of time. It is the fastest-growing area of our business. We started in thoracotomies, just to give you some context. This is to significantly reduce pain. You freeze the nerve. By freezing the nerve, you basically block the pain signal to the brain so that somebody who is undergoing very invasive surgery, whether you are going through a thoracotomy or any thoracic procedure going into sternotomy, and we are now getting into amputations.

Think of anything that hits a large nerve, we have got a special skill set with our cryotechnology that reduces that pain, kills that nerve temporarily. It grows back several months later. By the time then everything else is kind of healed, so you are in a much better place. That means faster recovery, getting out of hospital faster, and reducing the amount of opioids that are being used. This is one of the fastest-growing parts of our business. Like every other aspect of our business, we continue to innovate in this area, so we invest in continuous innovation. We are now on our third-generation product just for the thoracotomies, and we just started going in amputations and we are not even in batting practice, as they like to say, for that part of our business. Just starting there, but seeing really good traction in that market as well.

As you can see, we have had great growth over the many years, 18% CAGR during that period of time, and feel like we are in a very strong position for this year. We did beat and raise in the most recent quarter, both on top and bottom line, generating cash, strong EBITDA. The company is in a great position to really expand over the next five to 10 years. With that, I am going to say thank you, and I am going to turn it over to Bill to ask us questions.