AtriCure (ATRC) investor relations material

Key product and market updates

• Cardiac surgery business remains underpenetrated, with new products like Encompass and ongoing trials such as Box No AF targeting postoperative atrial fibrillation; full trial enrollment expected by early next year and data by 2028.

• LEAPS trial, targeting non-AFib patients for prophylactic treatment, has completed enrollment with a five-year follow-up; initial data may arrive before 2030 due to higher-than-expected event rates.

• AtriClip FLEX Mini, launched last year, is now in 30% of US sites, aiming for 100% penetration in three years; new open-ended product expected in early 2027.

• Cryo nerve block business expanded with CryoSphere MAX and XT for extremities, opening new markets such as amputations and sternotomy, with significant global patient potential.

• Revenue from new cryo products expected to ramp up in 2026 and accelerate in 2027 as adoption grows and international launches begin.

Financial performance and guidance

• Q4 revenue guidance set at $139 million, reflecting prudent and conservative forecasting; historical Q4 sales represent 26%-27% of annual revenue.

• 2026 revenue projected near $600 million with adjusted EBITDA in the high $60-$70 million range; long-term revenue CAGR guidance is 13%.

• New product launches are key growth drivers, providing both pricing power and volume growth, with benefits extending years beyond launch.

• Gross margin reached 75.5% in Q3, driven by favorable product mix and new launches; long-term improvement expected, though not at Q3's magnitude.

• Adjusted EBITDA margin already at 13.3% in Q3, ahead of the 2028 goal of 14%, with strong operating leverage and disciplined investment.

Market opportunity and growth outlook

• Cardiac surgery and cryo markets remain significantly underpenetrated, with decades of growth potential; current penetration is less than 150,000 out of 2 million annual cardiac surgery patients.

• Market expansion expected as clinical evidence drives guideline and reimbursement changes, accelerating adoption.

• Box No AF trial could double the addressable market for ablation and clip products, potentially benefiting every cardiac surgery patient.

• Converge procedure not a near-term growth driver due to PFA competition, but long-term potential remains based on durable clinical outcomes.

• M&A is not a current priority; focus remains on execution and organic growth in underpenetrated markets.