Penumbra : Penumbra Inc (PEN) Q1 2025 Earnings Call Highlights: Strong Revenue Growth Amidst International ...

In This Article: Total Revenue: $324.1 million, 16.3% year-over-year growth reported, 16.9% in constant currency. US Thrombectomy Revenue: $187.9 million, 25% year-over-year growth. Gross Margin: 66.6%, expanded 160 basis points from the prior year. Operating Income: $40.4 million, 12.4% of revenue, increased 550 basis points from the prior year. Adjusted EBITDA: $59.6 million, 18.4% of total revenue. Cash and Equivalents: $378.8 million, no debt, increased by $38.7 million sequentially. International Revenue: Decreased 2.5% reported, 0.1% in constant currency, impacted by a decline in China revenue. Embolization and Access Revenue: $97.6 million, 7.3% reported growth, 8.1% in constant currency. Research and Development Expenses: $22.1 million, 6.8% of revenue. SG&A Expenses: $153.5 million, 47.3% of revenue. Warning! GuruFocus has detected 7 Warning Sign with PEN. Release Date: April 23, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript . Positive Points Penumbra Inc ( NYSE:PEN ) reported a strong revenue growth of 16.3% year-over-year, reaching $324.1 million in the first quarter of 2025. The US thrombectomy business saw a significant increase of 25% year-over-year, with the VTE franchise leading with a 42% growth. Gross margin improved by 160 basis points to 66.6%, with expectations to exceed 70% by the end of 2026. The company received FDA clearance for Ruby XL earlier than expected, indicating strong regulatory progress. Penumbra Inc ( NYSE:PEN ) ended the quarter with a robust cash position of $378.8 million and no debt, highlighting strong financial health. Negative Points International revenue decreased by 2.5% due to a significant decline in China revenue, which is expected to continue impacting the second quarter. The company faces macroeconomic headwinds in China, leading to the exclusion of $5 million from the revenue forecast. Operating expenses remain high, with SG&A expenses accounting for 47.3% of revenue, driven by investments in commercial and market access teams. The company anticipates flat or slightly lower gross margins in Q2 2025 due to expedited manufacturing investments for new product launches. Penumbra Inc ( NYSE:PEN ) is cautious about raising guidance despite strong Q1 performance, reflecting a conservative approach amidst market uncertainties. Q & A Highlights Q : Can you provide more color on the growth in the US thrombectomy market, specifically in stroke versus peripheral markets? A : Adam Elsesser, CEO: Our stroke business grew significantly above the market based on volume this quarter. We launched the new RED 72 catheter, which saw significant interest and early uptake. Our arterial side is also performing well, with new products like Bolt 7 and Bolt 6X driving physician conversion from open surgery to CAVT. Q : How are you thinking about R&D spending and operating margins given the strong first-quarter performance? A : Adam Elsesser, CEO: R&D spending is not linear and reflects the anniversary of the Immersive Healthcare wind-down. Maggie Yuen, CFO: We realized savings from the Immersive business wind-down, which is reflected in R&D expenses. We continue to invest in product development and expect a baseline trend going forward. Q : What is the expected FDA review process for Thunderbolt, and what metrics will physicians focus on? A : Adam Elsesser, CEO: Thunderbolt is submitted as a 510(k), and the clinical data is under review. Key metrics include primary and secondary endpoints, first-pass effect, and procedure time. We believe Thunderbolt will perform well against these expectations. Q : How is the Stryker-Inari deal affecting market dynamics, and are you seeing any sales force disruptions? A : Adam Elsesser, CEO: We are confident in taking significant market share due to our superior product, not because of the merger. Our product's quality is driving conversions and interest from physicians. Q : Can you elaborate on the impact of removing China revenue from your guidance and the growth in US thrombectomy? A : Adam Elsesser, CEO: We removed $5 million from China revenue due to macroeconomic conditions. Jason Mills, EVP Strategy: The net increase from Q1 performance and China adjustments is $4 million, with outperformance primarily in US thrombectomy. Q : What are you seeing in international thrombectomy markets outside of China, and are there any changes in reimbursement? A : Adam Elsesser, CEO: We are seeing growth in countries where CAVT is available and reimbursed. The US market will drive growth due to its size and reimbursement, but international markets will play a bigger role in the future. Q : How are market access initiatives affecting the launch timing of new products like Thunderbolt? A : Adam Elsesser, CEO: On the vascular side, we have the capacity to handle new accounts. On the neuro side, we have experience launching products and do not anticipate VACs being a significant issue for Thunderbolt. Q : Can you discuss the growth in the arterial segment and the contributions from Bolt 7 and 6X? A : Jason Mills, EVP Strategy: Arterial growth remains strong due to CAVT products like Bolt 7 and 6X, which are performing well in an underpenetrated patient population. We expect continued strong growth in this segment. For the complete transcript of the earnings call, please refer to the full earnings call transcript . This article first appeared on GuruFocus .