Good afternoon. And welcome to AtriCure's Third Quarter 2024 Earnings Conference Call. This call is being recorded for replay purposes. And at this time, all participants are in listen-only mode. We will be facilitating a question-and-answer session following prepared remarks from AtriCure's management. I would now like to turn the call over to Marissa Bych, from the Gilmartin Group for a few introductory comments.

Great. Thank you. By now you should have received a copy of the earnings press release. If you have not received a copy, please call 513-644-4484 to have one e-mailed to you. Before we begin today, let me remind you that the company's remarks include forward-looking statements. Forward-looking statements are subject to numerous risks and uncertainties, many of which are beyond AtriCure's control, including risks and uncertainties described from time to time in AtriCure's SEC filings. These statements include, but are not limited to, financial expectations and guidance, expectations regarding the potential market opportunity for AtriCure's franchises and growth initiatives, future product approvals, clearances, competition, reimbursement and clinical trial outcomes. AtriCure's results may differ materially from those projected. AtriCure undertakes no obligation to publicly update any forward-looking statements. Additionally, we refer to non-GAAP financial measures, specifically constant currency revenue, adjusted EBITDA and adjusted loss per share. A reconciliation of these non-GAAP financial measures with the most directly comparable GAAP measures is included in our press release which is available on our website. And with that, I would like to turn the call over to Mike Carrel, President and CEO.

Great. Good afternoon and thank you for joining us, everyone. I am happy to share that our third quarter results reflect another strong quarter for AtriCure. We achieved total revenue of $116 million or approximately 18% growth, showing broad-based demand across our portfolio of innovative products for patients with atrial fibrillation and postoperative pain. In addition to our top line performance, we continue to make progress to expand profitability, producing nearly $8 million of positive adjusted EBITDA for the quarter. We also generated over $16 million in positive cash flow this quarter, marking our second consecutive quarter of positive cash flow. As a result of the strength in our third quarter results, we are raising our full year 2024 revenue guidance, and now expect a range of $459 million to $462 million, reflecting growth of approximately 15% to 16% over a full year 2023. We're also reaffirming our plans to deliver a full year adjusted EBITDA of $26 million to $29 million. Turning to updates on our business and highlights in the quarter. Starting with our pain management franchise, which grew 36% worldwide, marking another quarter of acceleration in sales. Our performance was led by growth in our international markets and bolstered by the U.S. launch of our cryoSPHERE+ probe. We've seen outstanding adoption of this device which contributed nearly half of our pain management sales in the quarter, and we are hearing consistent positive feedback from our physician partners on the 25% reduction in freeze time. We are also excited about the recent launch of our cryoSPHERE MAX probe, which builds upon the success of cryoSPHERE+. Our Max probe features a larger 10 millimeter ball-tip designed to optimize procedure efficiency by reducing freeze times even further than the cryoSPHERE+. Additionally, we are seeing a growing body of evidence supporting the economic value of Cryo Nerve Block Therapy. At the most recent Double ATS Thoracic Surgical Oncology Summit in New York City, Dr. Dan Miller, Chief of Thoracic Surgery at The Medical College of Georgia and Georgia Cancer Center, presented robust multi-center data demonstrating a reduction in hospital stay duration by more than one day after cryo ablation, representing more than $5,000 of reduced cost, 26% less opioid refill dosage at 90 days for all patients, and 28% less opioid refill dosage at 90 days after cryo ablation in chronic opioid users, and total healthcare cost reduction of by $8,000 over six months for the Cryo Nerve Block patients. As we look back on the past five years, our progress in establishing this therapy has been remarkable, with new innovation leading to re-acceleration and growth. Our success in thoracic procedures also gives us confidence and even broader opportunity for our pain management products as we continue to explore additional applications to expand our addressable markets. Shifting now to our franchises centered on the treatment of atrial fibrillation. Our open ablation franchise grew 16% worldwide, driven by nearly 50% growth in the Encompass clamp in the United States. We are adding accounts and new surgeons with the Encompass clamp and recently completed our first cases in Europe. This device has accelerated treatment in our core market of cardiac surgery, and we look forward to driving sustainable growth with this product worldwide. Next, our appendage management franchise achieved worldwide revenue growth of 18% with outsized contribution from open chest devices. In the United States, we saw a third consecutive quarter of acceleration in sales of open appendage management devices achieving 20% growth in the third quarter. We believe this acceleration is a testament to the pioneering design, quality and performance of our AtriClip devices which had reached over 600,000 units sold live-to-date. And on the innovation front, we completed the first cases with our new AtriClip FLEX Mini device, following the U.S. launch in the third quarter. The AtriClip FLEX Mini is the smallest profile clip on the market, offering enhanced access and visibility of the appendage. Feedback from early adopters has been overwhelmingly positive, particularly on the enhanced visibility with the device. While still early in the launch, we anticipate AtriClip FLEX Mini will drive a strong tailwind for appendage management franchise, well into the future. Internationally, we received an expanded CE mark indication for AtriClip devices to include patients at high risk for thromboembolism. The expanded indication resulted from a wealth of existing robust clinical data on our AtriClip devices through 85 peer reviewed papers representing over 11,000 patient studies and analyses. We are also adding clinical evidence and awareness of the benefits of LA management to our investment in the LeAAPS stroke reduction trial, the anticipated success of which will expand our global addressable market considerably. The LeAAPS trial is expected to show a clear benefit when using AtriClip devices to manage the appendage in patients who underwent cardiac surgery without preoperative afib diagnosis in a market of well over 1 million patients globally. To date, we have enrolled nearly 3,700 patients, and we are on-track to complete enrollment of 6,500 patients in this study by mid-2025. Finally, our hybrid AF therapy remains resilient, despite the market effects of broadening PFA adoption. In the third quarter, we saw continued positive trends but with a number of accounts performing our conversion procedure, as well as new account activations. However, given increased transition time focusing on PFA, we are experiencing pressure on the pace of MIS adoption or ablation and MIS AtriClip growth in the U.S. We know that hybrid therapy plays a vital role in practice and remains the only therapy with differentiated and durable results for long-standing, persistent AF patients. As we have seen in Europe over time, we expect the broad tailwinds PFA is driving around the awareness and diagnosis of afib to expand the number of treatable patients for this therapy. To build on that point, we believe that continuous innovation in the afib therapies has grown patient treatment across all markets. Therefore, we are excited to announce that we have entered into an exclusive license and development agreement with an expert in the PFA field to accelerate the introduction of PFA technology to our cardiac surgery devices. Ultimately, we anticipate PFA will be another foundational element of our portfolio of epicardial surgical ablation devices. We expect to announce more details on our PFA development program and clinical progress early next year. In closing, we are incredibly pleased with our third quarter's performance and trajectory of our business as we enter the fourth quarter. Our strong growth stems from investments across the pillars of our business of innovation, clinical science and education, and is a testament to the strength of our diversified portfolio. Furthermore, recent product introductions and continued efforts to advance standards-of-care in each of our markets, globally, have made our entire team excited for the future of AtriCure.

Thank you, Mike. Our third quarter 2024 worldwide revenue of $115.9 million increased by 17.9% on a reported basis and 17.8% on a constant currency basis when compared to the third quarter of 2023 demonstrating ongoing strong performance in key markets around the world, and the impact of our diverse range of products. On a sequential basis, the 0.3% decline in worldwide revenue from the second quarter to the third quarter of 2024 reflects normal seasonal variation and underlying procedures. In the third quarter 2024, the U.S. revenue was $95.5 million, a 16.8% increase from the third quarter of 2023. Open ablation product sales in the U.S. were $30.6 million, up 18.4% over 2023 from robust Encompass clamp sales across both existing and new accounts. U.S. sales of appendage management products were $37.4 million, up 15.6% over the third quarter of 2023. Within U.S. appendage management revenue, our open appendage management products, driven by our AtriClip FLEX Mini device, realized a third sequential quarter of acceleration reaching 20% growth over the third quarter of 2023. U.S. minimally invasive ablation sales were $11.1 million, up 2.1% from 2023. As Mike mentioned in his remarks, although we are activating new accounts and seeing positive trends with respect to the accounts ordering, we continue to experience pressure on the pace of Hybrid AF therapy uptake. Finally, pain management product sales were $16.3 million, up 29.6% over the third quarter of 2023 reflecting accelerated growth driven by the recent launch of our cryoSPHERE+ probe. International markets once again delivered excellent results with revenue of $20.5 million, up 23.3% on a reported basis, and 22.4% on a constant currency basis as compared to the third quarter of 2023. European sales contributed $12.2 million in the quarter, representing 33% growth, while sales in Asia Pacific and other international markets grew 12% to $8.2 million. Similar to the first half of 2024, our international business grew across key product lines and in nearly all major markets. Looking forward, we expect continued strength in our international business as we focus on growing adoption of our therapies, as well as new product introductions. Our gross margin this quarter was 74.9%, a decrease of 27 basis points from the third quarter 2023, driven primarily by less favorable geographic and product mix. Operating expenses for the quarter totaled $94.2 million, an increase of $12.2 million or 14.9% from the third quarter of 2023. Research and development expenses rose 3% from the third quarter of 2023 with patient enrollment in our LeAAPS clinical trial driving the increase. The expansion of R&D expense is offset by timing of the product development costs as we've completed development and clearance efforts for three major product releases within the U.S. thus far in 2024; the cryoSPHERE+ probe, AtriClip Flex Mini, and most recently, our cryoSPHERE MAX probe. SG&A expenses increased 18.9%, primarily from personnel and travel costs due to the measured expansion of our teams globally, as well as one-time consulting costs associated with our planned facilities expansion. Adjusted EBITDA for the quarter was $7.9 million compared to $4.7 million for the third quarter of 2023, an increase of 68%. Our basic and diluted net loss per share, as well as the adjusted loss per share, was $0.17 in the third quarter of 2024 as compared to $0.20 in the third quarter 2023. Our overall capital position remains strong as we ended the third quarter with $130.3 million in cash and investments, representing positive cash generation of $16.3 million for the quarter. As Mike mentioned earlier, we have advanced our plans to bring PFA technology to market in our devices by entering into an exclusive licensing and co-development agreement with an expert in this field. As part of this arrangement, we will incur a cash charge for the acquired IP R&D of $12 million in the fourth quarter, which is excluded from our adjusted EBITDA and adjusted EPS guidance. After this payment, we expect positive cash generation in the fourth quarter and a modest burn overall for full year 2024. Now, closing with our outlook for the remainder of the year. Considering our third quarter results and trajectory across our business, we now expect to achieve approximately $459 million to $462 million in full year 2024 revenue, reflecting approximately 15% to 16% growth compared to 2023. We remain confident in our extensive portfolio delivering sustainable growth within a large under-penetrated market we serve globally. From a margin perspective, we are reaffirming our full year 2024 gross margin to be roughly consistent with 2023 with the potential for varying impacts from geographic and product mix. Turning to the bottom line, we reiterate our commitment to increasing profitability while also continuing to invest in driving growth and innovation. To that end, we are maintaining our positive adjusted EBITDA outlook of approximately $26 million to $29 million for the full year 2024, corresponding to adjusted loss per share of approximately $0.74 to $0.80. We are very proud of our progress across many key strategic operational and financial metrics so far this year. Our team's continued dedication to AtriCure's mission, supported by investments in innovation, clinical science, and education awareness, has led to tens of thousands of patients treated. The same dedication has created multiple avenues of growth for our company and will continue to propel us into the future. Now, I'll turn the call back to Mike.

Thank you, Angie. As we enter the second half of 2024, we saw strong growth on the top and bottom line; continued innovation with AtriClip Flex Mini and cryoSPHERE MAX launches, and expansion of the geographic reach of our products with our AtriClip now approved in China, our Encompass launch in the EU, and our AtriClip stroke label expansion in Europe as well. Our strong revenue growth in the third quarter is a testament to the resilience and diversification of the portfolio of therapies we have built. With the strength of our team worldwide, the quality of our products and the clinical data behind our therapies, there is little doubt in my mind that AtriCure is well positioned to drive compelling growth and expand profitability for years to come. And with that, we'll turn it over to the operator.

And our first question comes from Robbie Marcus with JP Morgan. Your line is open.

Hi, this is Lilia for Robbie. Thank you for taking my question. I would like to know your thoughts on the trends you are observing from PFA. Is this the new norm we should anticipate, with pressure on both MIS ablation and the MIS clip business? Or do you believe the momentum in those areas can improve as the technology becomes more widespread in the market? What assumptions regarding those dynamics are you incorporating into your guidance?

Yes. As we looked at the rest of this year, I’d say that’s kind of more than the new normal for the rest of this year. But as you look out over this into the future; there's a lot of new products coming into the market causing distraction as they get up and running using those new products. But what we're also seeing is an incredible amount of new patients coming into the funnel, so that the top of the funnel of patients is very large. And with our experience in Europe, what we can see is that they eventually have a lot of non-responders, and so we anticipate that that funnel is going to lead to a lot more patients needing to be treated. Once they don't respond to PFA or that second or third ablation, they're going to kind of hold on to that funnel. Now, we do believe that in 2025 we'll start to see some of those; we've seen some of it already a little bit from patients that were involved in some of the original PFA trials here in the U.S. We do anticipate that that'll probably begin to start up in 2025, not ready to kind of give any kind of month or quarter that you're going to start to see any kind of spike necessarily, but we do anticipate that, with that huge volume in the top of the funnel, you're going to see patients come out that need another ablation, really to help them out for those long-term and difficult-to-treat patients.

And Lilia, relative to the guidance, I would say, as you know, Q4 last year was a very strong quarter for our U.S. hybrid, and also our MIS AtriClip business. So that was one of the considerations as we thought through kind of the rest of the year guide.

Got it, that's helpful. And then as a follow-up, I was hoping you could give a bit more color on the PFA partnership. Is there anything you can share on who the partner is that you're working with? And what sort of timeline should we expect for a launch here? Thanks so much.

Yes, appreciate that question. And of course, anticipated. You know, we're really excited about what we've done there. The reason we were able to announce now is, obviously we signed the agreement and we'll be obviously writing the check that Angie talked about. But in addition to that, we’ve made a tremendous amount of progress over the course of the last nine months on development, and we feel like we're in a really good development place for that as well. So, there's a lot of confidence on our side that this is going to be a real technology force that's going to be embedded into our cardiac surgery devices. Not ready to give timelines on first in human or when we might go into a clinical trial with it, or who the partner is yet, but in due time that will definitely come out.

Thank you. Our next question comes from William with Canaccord Genuity.

Just first on Encompass clamp; I just wanted to clarify, did you say that the U.S. business, the clamp grew 50% year-over-year? Is that correct?

Yes, it was about 50% growth of the Encompass clamp in the third quarter.

Okay. And then, as we think about Encompass O-U.S., you just got that CE mark, given the growth O-U.S. in the third quarter, I would assume that you really didn't see a benefit from that, if anything, you might have seen some de-stocking or what have you. How should we think about that impact if you go into the fourth quarter, and forward, now that you have that CE mark, given what we’ve seen in the U.S. from that product?

Yes, first I'll start. The European team is really excited about the Encompass clamp. I was over at the major cardiac surgery Society meeting over there, called EAX, just in the early part of October. Our booth was packed with over 250 people and physicians visiting to go through the simulation lab. We officially launched the product while we were there, and we also had a standing room only audience to talk about what that product meant for the market as well. So the team there is excited, they've been well trained and positioned on it in the market. We won't see much of an impact in the fourth quarter per se, but we do see that they will obviously have an impact next year for sure as we enter the market. It won't go as fast as the U.S. just because individual countries have different reimbursement plays, etc., but they're ready to kind of get through that, and we do anticipate some impact in 2025.

I just would add, relative to the international numbers and open ablation, it was more impacted by what our market is outside of Europe. Our European growth in open ablation was very strong; this was more kind of distributor ordering in the third quarter that impacted open growth.

Okay. And then just on this PFA partnership, I know you'll give us more details in the future, but I'm kind of curious, you know, I think you've had plans of getting to that cash flow consistently positive. Now you're talking about an investment in this PFA for the cardiac devices; does that change your near-term, intermediate-term outlook? Maybe you're increasing the R&D spend or is this just shifting priorities within an R&D? Thanks for taking my questions.

I think this was part of our overall R&D plan and has been for a while. No change in terms of outlook relative to overall spend or cash burn; we will take a charge here in the fourth quarter for the upfront cost, but even with that charge, we expect to be overall modestly positive cash flow for the full year 2024. So no change relative to the trajectory there, and this is something that we've been working toward for a while, and it’s part of our longer term plan.

I think it aligns with what Angie has previously mentioned that while we are not providing guidance for 2025, we have consistently discussed our aim to improve our bottom line year over year. This perspective remains unchanged, and our views on this topic have not altered in any way.

Thank you. Our next question comes from Matthew O'Brien with Piper Sandler.

Hey, this is Phil on for Matt. Thanks for taking our questions. I guess, just another great quarter of the U.S. open business. Is it safe to say that a bigger competitor coming into this market is perhaps aiding in general market growth? Any thoughts on what that underlying market grew in relation to your 20% domestic growth here in the quarter?

Yes, as we mentioned earlier, the entry of competitors into the market has been beneficial, as it raises awareness, just as you've pointed out. We are certainly observing increased awareness in the market due to others promoting the advantages of treating the appendage. So to be clear, I completely agree with that statement. While I can't provide a specific figure for underlying growth, it's evident that competition is capturing some market share and making sales. However, we believe that our product is outstanding and remains the best in the market. I've been speaking with numerous customers and gathering feedback, and witnessing their initial experiences with it has been incredibly positive. This product is set to make a significant impact not only for the rest of this year but for many years ahead.

Thanks for the information. I have a follow-up question regarding the Heal IFT study. We haven't heard much about it lately. Is there any new interest or updates available? Thank you.

It is an important study relative to a patient population. We do believe it's really where a surgeon is working with an electrophysiologist to solve this very difficult patient that, quite frankly, has zero solution out there in the market right now. We've had solid enrollment to date, but we've got to train all these sites as we get them up and running. So there hasn't been a lot of update per se, until we get to some sort of enrollment that we can actually look at the data which we anticipate sometime in 2025, but we've got to get more reporting on at that point in time.

And our next question comes from Marie Tibble with BTIG.

Thanks for taking the questions this evening, and congrats on a nice quarter. Wanted to see if I could understand the rundown of product catalysts, other market catalysts that we might see throughout 2025; definitely not looking for guidance but just trying to understand tailwinds, headwinds, things that might be anniversarying as you think about the products launching here now, and products that you've enjoyed throughout 2024. Just how to think about those catalysts in 2025?

Great question, Marie. I'd say, if we start at the top with our open franchise, the expansion of the Encompass clamp in Europe; you'll see obviously a full year’s worth of activity over there. With that being said, we still think that this is a catalyst for the U.S. business as we continue to reach additional accounts; we've made great progress on that front, a little under 700 accounts at this point in time. So, there is still room for us to continue to grow in the U.S. When we think about our pain management franchise, you'll have a full year of the cryoSPHERE MAX, as well as the cryoSPHERE+ probe; both were offering reduced freeze times which we think are accelerating our growth. We've obviously seen that this past quarter in the U.S., and we'll continue our efforts to expand pain management throughout our international markets. Within our hybrid franchise, I'd say this is one where we're likely to see pressure, no catalyst per se at this point in time. And with appendage management, the big thing will be our Flex Mini clip, a full year of activity within the U.S., as well as the expansion of AtriClip into China and the enhanced labeling within Europe. So I think the biggest headwind for growth for us is that we can take it to make great progress here, and the growth that we're expecting off of a pretty nice runway over the past couple of years.

Really helpful rundown, Angie. Appreciate that. My follow-up on the PFA partnership; at the risk of sounding a little naive, is this for the MIS product? Is it also for the open product? Is the vision eventually that PFA replaces RF ablation within your franchises? And what sort of precipitated this decision? Thanks so much.

Yes. We've been looking at PFA for over five years in terms of getting it into our cardiac surgery products. This isn't a change; we finally got realization that now we've actually got product, we've done testing on it. We're at the point that we could feel comfortable coming out and giving some very specific milestones and deadlines to the market. We've been working on it for a long time, and there really aren't any changes. In terms of our focus and our strategy, it's really all of our epicardial ablation products. We do anticipate bringing it to market through those. It's not planning on replacing our RF and cryo. RF and cryo are incredibly durable, safe, and work incredibly well in the market today. They're great products. However, we're an Afib ablation company, and we feel that we need to have all ablation technologies to offer people and then give physicians that choice based on their preferences and what types of tools they want to use. Yes, it will be embedded into some of our existing technology in terms of the disposables that we have today. Our overall vision is to provide a full solution so that we can give our customers and physicians a choice of how they want to treat their patients best.

Yes. And maybe to put a finer point on that, we would expect, as Mike said in his prepared comments, first step would be an open cardiac clamp, then followed by more work in the minimally invasive space.

Our next question comes from Mike Matson with Needham.

Congrats on the strong quarter. Maybe a question for pain management. I think you both had talked about cryoSPHERE MAX really being more of a product to break into the sternotomy market as opposed to the plus or the original cryoSPHERE. So what are your expectations for the sternotomy market in 2025 now that the MAX has been launched?

Yes. The sternotomy market is something that we anticipate could be a potential market for us, but we're not going to commit to any guidance on it quite yet. We do think that being able to reduce the time in half will definitely make it much more approachable for a surgeon to add it to their procedure. That was one of the primary reasons we did it. It also affects pretty much every other usage of the technology today. We're seeing it in mini-thoracotomies and regular thoracotomies, and people are adopting it very quickly. Once we get that, and we get more feedback, we'll have more to talk about relative to sternotomy.

Okay. And then maybe one on cash flow. You had a couple of quarters of positive cash flow. Angie, I think you said excluding the cash charge next quarter we would have positive cash flow. So I'm just kind of wondering, how you guys are thinking about that moving forward into 2025? Do you think AtriCure is consistently cash flow positive moving forward?

I think on a full year basis for 2025, it's likely to be cash flow positive. The first quarter tends to be very heavy burn just structurally with some of the payments made in the first quarter around variable compensation, tends to be a heavy cash burn. You've seen that for a number of years now. But on the balance, I'm really happy with the progress we’re making in this area and expect to continue to be able to enhance our cash flow going forward.

And our next question comes from Danielle Antalffy with UBS.

Congrats on a really strong quarter here. Just two quick product questions. One on the AtriClip business. You talked a little bit about the competitive dynamics here. I'm just curious, Mike, if we look at the trend throughout the year, it feels like Q1 was maybe the nadir for AtriClip U.S. growth. And I'm wondering if you would agree with that? Are we past the sort of trialing dynamic here? And maybe you could comment on how you're seeing centers adopt both the clip and the competitive product or have you lost any centers? Any sort of commentary you can give there would be helpful.

Yes. I mean, the competition is out there. As I referred to earlier, we do see that market growth is growing as a result of having competition in the space. That's definitely what we're seeing, and why you saw an acceleration overall in ours. Plus, we're also bringing up new innovative products. You come out with the FLEX-Mini, and I anticipate that's going to also help drive the growth relative to that. We do see them in some accounts. In those accounts, we haven't lost those accounts completely, they definitely use both technologies. I've had the opportunity to meet with many of those accounts, had very nice conversations with them, and they just kind of make that choice on their own relative to some – whether it's anatomy or something that they're making based on physician choice. I feel really confident in the quality of our product, the quality of what we bring to the market relative to this, both in terms of the innovations with the FLEX-Mini and with the original product, they are just outstanding products. The investments in clinical evidence, which you can see what happened in Europe with the 85 peer-reviewed papers and over 11,000 patients, that is a lot of evidence demonstrating how good the closure rates are and even the impact on stroke rates, got us that label over in Europe. We're running this trial here. I think we are making the right types of investments for the long term for this franchise. The investments aren't just for existing Afib patients, the LeAAPS is all about tripling the size of that market and getting to over 1 million more patients that undergo cardiac surgery globally. So we're excited about where we are. Again, we do see the competition, but I think it's really good for us and the market overall.

Okay, that's helpful. And then just a quick question on another great quarter for Encompass. I mean this clamp just has really seemed to open up the CABG market, especially for you guys. Just curious about what you can say as far as where we are from a penetration perspective at this point with CABG now that you've got what's it been like 2 years rolling out Encompass here in the U.S.?

Yes, I mean it's a great question. We are making an impact on adoption for sure of people treating, but we still have a long way to go. I'd say that we used to quote that 25% to 30%. We're probably closer to 30% to 35% of the patients today that are actually getting treated overall for cardiac surgery that have Afib, which tells you, there's still 65% of the patients that should be treated. All of the guidelines globally have a Class 1A level guidelines that you should be treating this patient population, both with an ablation and with managing the appendage. So from our standpoint, we think there's still a long way to go just within that patient population, and a lot of growth ahead of us with that. We think the Encompass Clamp will unlock it to make it a lot easier for patients to get treated.

Our next question comes from Suraj Kalia with Oppenheimer & Co.

Congrats on a nice quarter. So Mike, one question for you, one for Angie, and I'll pose the first one to you, Mike. On the surgical PFA products, there was a point in time, specifically picking off on Hybrid or Convergent, the argument was that Hybrid prevents esophageal fistulas, you can do back wall ablation. So this is additive to existing catheter ablation, right? That was the whole argument. When surgical products have PFA, what is the clinical need from a surgical product for a new energy modality? It isn't very obvious to me how you're thinking through this. Also, what is going to be the regulatory pathway? Would you have to do new clinical trials for this new energy modality?

It's a really great question, Suraj. There's a lot of questions to be answered about what the additional clinical benefit is going to be for PFA. We have great cryo and great RF. We believe that, with all of the excitement around this energy source, it was imperative and important for us to bring it into our products as well so we could offer it as a solution. Whether it is more efficacious than the cryo or the RF remains to be determined at this point. When it comes to the clamp technologies, we have to learn through the trials that we run relative to going into that area. Relative to the MIS space, speed is going to probably matter a little bit, because you'll be able to take out some of the time. On the open cardiac side, you can take out some speed, but that's not where the time is based. So there will be different use cases for it from that standpoint. I think we have to have it. I think it's an important energy to study and learn about. I believe the FDA has made it very clear that the PFA technology epicardially will likely have to go down a PMA type pathway. We're anticipating those timelines and guidelines in the future once we’re at that point.

Mike, I appreciate the transparency. Angie, one question for you. What was ASP contribution for the new line of cryoSPHERE probes? I guess, just for pain management, what was the net ASP impact in the quarter?

Suraj, good question. Almost nothing. The majority of the revenue was the cryoSPHERE+ and not a big contributor in the third quarter. The cryoSPHERE+ is at the same ASP as our legacy cryoSPHERE devices. So when you see 29.6% growth in the quarter, that is all volume growth.

I'm showing no further questions at this time. I would now like to turn it back to Mike Carrel for closing remarks.

Great. Again, everyone, thank you for joining us today, and we look forward to talking to you after the fourth quarter call. Have a great evening. Bye now.

This concludes today's conference call. Thank you for participating. You may now disconnect.