Ladies and gentlemen, good afternoon. My name is Abby, and I'll be your conference operator today. At this time, I would like to welcome everyone to Penumbra's Second Quarter 2025 Conference Call. Thank you. I would like to introduce Ms. Cecilia Furlong, Business Development and Investor Relations for Penumbra. Ms. Furlong, you may begin your conference.

Thank you, operator, and thank you all for joining us on today's call to discuss Penumbra's earnings release for the second quarter of 2025. A copy of the press release and financial tables, which include a GAAP to non-GAAP reconciliation, can be viewed under the Investors tab on our company website at www.penumbrainc.com. During the course of this conference call, the company will make forward-looking statements pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, including statements regarding our financial performance, commercialization, clinical trials, regulatory status, quality, compliance and business trends. Actual results could differ materially from those stated or implied by our forward-looking statements due to certain risks and uncertainties, including those referenced in our 10-K for the year ended December 31, 2024, filed with the SEC. As a result, we caution you against placing undue reliance on these forward-looking statements and we encourage you to review our periodic filings with the SEC, including the 10-K previously mentioned, for a more complete discussion of these factors and other risks that may affect our future results or the market price of our stock. Penumbra disclaims any duty to update or revise our forward-looking statements as a result of new information, future events, developments or otherwise. On this call, financial results for revenue and gross margin are presented on a GAAP basis, while operating expenses, operating income and adjusted EBITDA are presented on a non-GAAP basis. The corresponding GAAP measures and a reconciliation of GAAP to non-GAAP financial measures are provided in our posted press release. Non-GAAP operating expenses and operating income exclude amortization of acquired intangible assets of $2.4 million and impairment of our Immersive Healthcare business of $76.9 million in the second quarter of 2024, and adjusted EBITDA excludes impairment expenses, stock compensation expense, depreciation and amortization, provision for income taxes and interest income expenses. Adam Elsesser, Penumbra's Chairman and CEO, will provide a business update. Maggie Yuen, our Chief Financial Officer, will then discuss our financial results for the second quarter of 2025; and Jason Mills, our Executive Vice President of Strategy, will discuss our updated 2025 guidance. With that, I would like to turn over the call to Adam Elsesser.

Thank you, Cecilia. Good afternoon. Thank you for joining Penumbra's Second Quarter 2025 Conference Call. In the second quarter, we generated total revenue of $339.5 million, representing underlying year-over-year growth of 13.4% on a reported basis and 12.7% on a constant currency basis. Our second quarter performance reflected extraordinary ongoing execution by our commercial team against our strategy, together with our focus on continuous innovation, clinical and health economic data generation, together with the work physicians are doing to further expand the total number of patients treated globally with our novel technologies. Our U.S. thrombectomy business led overall growth in the quarter with results reflecting strong continued adoption and ramping utilization of our CAVT portfolio. While our U.S. embolization and access business as well as our international business delivered solid growth ahead of expectations. Second quarter U.S. thrombectomy revenue increased 22.6% year-over-year to $188.5 million, led by 42% year-over-year growth in our U.S. VTE franchise as the clinical benefits of Flash 2.0 and Bolt 12 continue to support and drive further market penetration and competitive conversions. Below the top line, gross margin of 66% was in line with our prior announced expectation as we executed on our planned accelerated RUBY XL inventory build. We began shipments of XL at the end of the second quarter and enter the third quarter well positioned from an inventory standpoint to meet the strong interest in XL we've seen in the field to date. We remain on track and are well positioned to achieve a gross margin profile of over 70% by the end of 2026 and expect operating margin expansion to outpace gross margin expansion for the foreseeable future as we prioritize delivering profitable growth and an expanding profitability profile. Turning to our U.S. peripheral business. Our second-quarter thrombectomy performance reflected the competitive strength and clinical benefits of our comprehensive current CAVT portfolio, spanning Flash 2.0, Bolt 6X, Bolt 7, and Bolt 12 alongside purposeful and focused execution by our commercial team. We treated more VTE patients in the quarter than in any prior period, supported by our team's relentless focus and prioritization on improving patient outcomes, driving conversions from anticoagulation, lytics, and other mechanical thrombectomy platforms to CAVT in both PE and DVT. In arterial, the clinical benefits of our modulated aspiration technology in Bolt 7 and Bolt 6X continue to support and drive physician conversions from open surgery or the use of lytics to CAVT. Based on our consistent success and our clear view of the opportunity ahead in peripheral thrombectomy, we strategically invested in the build-out of a separate peripheral embolization sales force so as to provide heightened focus in thrombectomy and embolization. We have added over 50 embolization sales reps and over 40 vascular clinical specialists. With these new hires in place, we will be able to have a team solely focused on our thrombectomy business as well as a separate team focused on launching RUBY XL and driving long-term growth in our embolization business. Adding to the information we provided on our last earnings call, RUBY XL is a larger, softer, and longer coil than other commercially available coils and allows us to now participate quite effectively in about 20% of the current market that we have not been able to in the past. With the early performance of RUBY XL, we expect to see ramping benefit from our investment in our commercial team through the back half of the year and beyond with our thrombectomy team well positioned to exclusively focus on continuing to address the significant unmet need in the treatment of clot burden throughout the body and our new Embo team able to focus on providing our comprehensive coil portfolio to physicians and hospitals. As our team drives adoption of our technology on a day-to-day and account-by-account basis, we are simultaneously focused on positioning CAVT for long-term growth while enhancing our competitive position. Advancing the field through technology innovation and high-quality clinical data generation is our priority. During the quarter, we completed enrollment in STORM-PE, our prospective multicenter randomized controlled trial evaluating CAVT plus anticoagulation versus anticoagulation alone for the treatment of acute intermediate high-risk PE. We are committed to running trials, which hold the potential to fundamentally shift patient treatment and STORM-PE has the potential to provide Level 1 evidence to help inform PE treatment and impact the standard of care. Enrollment in STORM-PE was completed ahead of schedule, and we look forward to presenting the results from the trial at a major medical conference this fall. On the arterial side, we recently announced the launch of our STRIDE II clinical study. Our initial STRIDE study, which incorporated primarily older generation technology, demonstrated compelling results, including a 98.2% 30-day limb salvage rate. With STRIDE II, we intend to both expand the patient sample size and broaden the geographic enrollment base in comparison to STRIDE with STRIDE II focused on demonstrating the benefits of our latest generation CAVT technology. Looking forward, we will continue to invest in high-quality clinical studies in tandem with our market access initiatives to highlight the significant benefits and value proposition of our differentiated current and forthcoming products. Shifting to our neurovascular business. Our U.S. stroke thrombectomy franchise delivered another solid performance, growing ahead of the underlying stroke market. In its first full quarter on the market, RED 72 SILVER LABEL with its enhanced trackability continued to generate strong physician interest and saw ramping adoption and utilization. Regarding Thunderbolt, we are currently in an active process with the FDA and we'll provide additional updates as soon as possible. We remain very excited to introduce Thunderbolt to the neurovascular field. At SNIS earlier this month, there was a great deal of discussion about distal occlusions in stroke. We heard many physicians confirm that our RED 43 aspiration catheter is the preferred device to treat patients with distal occlusions. Finally, there was a lot of discussion among physicians about embolizing the middle meningeal artery or MMA, as it is commonly known, and the unique properties of our Swift coil that allow for the safest treatment modality. It is estimated that there are more patients that could be treated in this category than traditional cerebral aneurysms. We are focused on investing in further innovation across our diversified neuro portfolio, spanning aspiration, access, and embolization. In summary, our second-quarter results reflect solid execution by our team as we continue to deliver long-term growth in multiple underpenetrated markets. We are committed to continuing to transform patient care across these markets and are excited to introduce new innovative products in the months and years ahead. I'll now turn the call over to Maggie to cover our financial results for the second quarter of 2025.

Thank you, Adam. Good afternoon, everyone. Today, I will discuss the financial results for the second quarter of 2025. Financial results on this call for revenue and gross margin are on a GAAP basis, while operating expenses, operating income, and adjusted EBITDA are on a non-GAAP basis. The corresponding GAAP measures and a reconciliation of GAAP to non-GAAP financial measures are provided in our posted press release. For the second quarter ended June 30, 2025, our total revenues were $339.5 million, an increase of 13.4% reported and 12.7% in constant currency compared to the second quarter of 2024. Our geographic mix of sales for the second quarter of 2025 was 76.8% U.S. and 23.2% international. Our U.S. region reported growth of 19.5%, driven by 22.6% growth in our thrombectomy franchise compared to the same period last year. As we anticipated, our international regions decreased 3.2% reported and 5.8% in constant currency, primarily due to a decrease in China revenue compared to the same period last year, which was partially offset by an increase in all other international regions. As we look ahead for the second half of 2025, we expect headwinds in China to ease, resulting in a return to growth across all of our international regions. The sequential growth in our total revenue of 4.7% was driven by both an increase in global thrombectomy and embolization and access revenue across all regions compared to the first quarter of 2025. Moving to revenue by products. Revenue from our global thrombectomy business grew to $230.3 million in the second quarter of 2025, an increase of 13.1% reported and 12.6% in constant currency compared to the same period last year, which was primarily driven by growth in our U.S. thrombectomy business of 22.6%. Our international thrombectomy business increased by 16.2%, in line with expectations, primarily due to a decline in China revenue. Excluding the impact on the China region, our international thrombectomy revenue grew by 14.4% when compared to the same period last year. Revenue from our embolization and access business was $109.2 million in the second quarter of 2025, an increase of 13.9% reported and 12.8% in constant currency, primarily driven by an increase in U.S. embolization sales, underscoring the launch of our new XL product. Gross margin for the second quarter of 2025 is 66% compared to 54.4% for the second quarter of 2024, which includes a one-time $33.4 million Immersive Healthcare inventory write-off. Excluding this one-time write-off, the gross margin slightly increased year-over-year. As expected, our gross margin slightly decreased sequentially due to investment in the launch of our XL product and the high international mix of growth across all regions. As we move to the second half of 2025, we expect to see sequential margin expansion from favorable product mix and productivity improvements. In addition, we are on track to achieve our full-year gross margin targets. However, as our separate thrombectomy and Embo teams start ramping, we might see some month-to-month variability in product mix. Importantly, we remain well-positioned to deliver our long-term gross margin profile of 70% by the end of 2026. And now on to our non-GAAP operating expenses, non-GAAP operating income and margin and adjusted EBITDA. Total operating expense for the quarter was $183.2 million or 54% of revenue compared to $164.5 million or 54.9% of revenue for the same quarter last year. Our research and development expenses for Q2 2025 were $23.2 million or 6.8% of revenue compared to $24.9 million or 8.3% of revenue for Q2 2024, which reflects savings of $5.2 million due to our Immersive business wind down, offset by continued investment in product development. SG&A expenses for Q2 2025 were $160 million or 47.2% of our revenue for Q2 2025 compared to $139.6 million or 46.6% of revenue for Q2 2024. To support the momentum in demand and ensure we are positioned to capitalize on long-term growth drivers, we made targeted hires in our commercial and market access teams. Sequentially, our expenses increased by $6.5 million, which, as Adam mentioned, was primarily due to a deliberate front-loaded investment in our embolization sales team and additional vascular clinical specialists. With a favorable hiring market to attract top-tier talent, we acted to bring in a high-impact commercial team, which we expect will contribute to our results in the quarters ahead. We recorded operating income of $40.8 million or 12% of revenue compared to an operating loss of $1.6 million for the same period last year, which includes a one-time $33.4 million Immersive Healthcare inventory write-off. Excluding this one-time write-off, our operating profit increased by $9.1 million. We posted adjusted EBITDA of $61.4 million or 18.1% of total revenue compared to $13 million or 4.3% in the second quarter last year. Turning to cash flow and balance sheet. We ended the second quarter of 2025 with cash, cash equivalents, and marketable securities balance of $424.6 million and no debt, which is an increase of $45.7 million sequentially, driven by strong operating profitability. We expect positive operating cash flow trends to continue in 2025 and beyond. And now I'd like to turn the call over to Jason to discuss our updated 2025 guidance.

Thank you, Maggie, and good afternoon, everyone. Due to outperformance in the second quarter, we are increasing our guidance for total revenue to a range of $1.355 billion to $1.370 billion, which represents 13% to 15% year-over-year growth. We maintain our guidance for U.S. thrombectomy growth of 20% to 21% compared to 2024 levels. We also maintain our guidance for both gross margin and operating margin for the full year 2025. This concludes our prepared remarks. Operator, we can now open the call to questions.

And our first question comes from Larry Biegelsen with Wells Fargo.

Congrats on a nice quarter here. Adam, I wanted to start with STORM-PE and then ask a Thunderbolt question. So it's good that we're going to see the STORM-PE data this fall. Adam, it's a relatively small study, and we've seen many PE trials with RV/LV ratio as the primary endpoint. So why is this study important? And what impact could it have if positive? And I had one follow-up.

Yes. No, it's a great question. As you know, Larry, it's the first randomized study completed that we're aware of in the world comparing anticoagulation and mechanical thrombectomy to anticoagulation alone. So we've seen lots of single-arm studies and other things. It's the first randomized study that has that comparison, which is the question that everyone wants answered. So for that reason alone, it's significant. The size of the study is a testament to the confidence in the product. Obviously, the larger the study, the more room you have to have a difference. You have 100 patients, it's a lot smaller number of patients to show that difference. So it actually is a testament to, I think, the confidence in the study. That being said, I think you're aware, we put together an internationally very renowned group of physicians on the steering committee of this trial. They were the ones who came up with the endpoints and the size of the study and the powering of it all, and really – and these are just not interventionists. These are non-interventionists in the field of treating PE. So I think it's – again, we'll wait to see the results, but I think it could have a significant impact. And again, the design of the study is a testament to the work of some of the world's experts.

That's helpful. And then on Thunderbolt, Adam, any update on how we should think about the FDA review time? I think in the past, if I'm not mistaken, you've pointed to precedents that had about a 6-month review time. And lastly, some investors, Adam, I think, have construed some of your recent comments that your enthusiasm for Thunder has changed. Could you address those items, please?

Sure. Yes, I don't remember saying 6 months for a clinical study. The product review times vary depending on the company. That being said, I can tell you the following. We worked with the FDA for many, many years, the neuro division. I can tell you that they are thorough, which is something that I'm extremely supportive of. These are obviously products going up into people's brains, and I'm very supportive of that process. The process is what we expected with the FDA. And to be honest, I've heard the rumors that I'm somehow not excited. I do not know how to say it any more than I've said it over and over. It is an amazing product, and I think it will have a huge, huge positive impact for many, many people for many, many years to come.

And our next question comes from the line of Travis Steed with Bank of America.

I guess the first question, I'll ask about the sales force split. Why now is the right time? And how you're thinking about the kind of any near-term disruption from that and the kind of the margin question. I know there was a comment kind of made on the mix on margins?

Yes. So the – well, the margin – the comment I made about margins in my talk was we had said on the last quarter that we were accelerating the build of Ruby XL. So there'd be a one-time quarter impact to do that, which we saw a minor impact. That doesn't go beyond this quarter. And I think we reiterated very clearly that we are on track for our 70-plus percent at the end of 2026. That being said, it is worth noting that the Ruby XL is – their margin, given the nature of that coil and the price point is actually accretive to our margin. And so that's a positive for us. Why now for the split here. It is essential given the success that we're having in the thrombectomy side on that business and our view of where that continued growth will come, it's a pretty extraordinary opportunity that we really need to have people be able to focus. They can't – they're selling right now on the thrombectomy side alone into the arterial DVT, PE, coronary and then to add a whole bunch of different types of embolization procedures was a lot for our reps to do and to do it well across all of their customers. So this just makes sense to do it by focus. I think we have been lucky to be able to attract literally some of the best talent there is in the field, and I think it will prove to be great for our thrombectomy business because of that focus. And to be honest, it will allow our peripheral coil business, our embolization business to continue to be successful and probably accelerate growth given the launch of the product and the focus that that team has. So it makes sense all around.

And then kind of the second question is on the U.S. thrombectomy business, the 20% to 21% guide. You kind of did 24% in the first half kind of implies 18% in the second half. I know the stroke market slowed a bit. I don't know if that's kind of the main reason there, if there's any kind of anything else you'd call out for the second half of the U.S. thrombectomy business.

Yes. No, I think it's fairly obvious that we're pretty excited about our thrombectomy business going forward. Obviously, we raised our overall guide the quarter before we raised our U.S. thrombectomy guide. And I think we're just, to be honest, trying not to get ahead of ourselves in spite of our enthusiasm right now.

And our next question comes from the line of Robbie Marcus with JPMorgan.

I wanted to ask on margins. And if there's any way you could quantify the impact of the additional sales force buildup here? Gross and operating margins came in below the street. Just trying to figure out if it's sad or if it's maybe tied to the outside U.S. Embo and other outperformance, maybe there was some stocking there or something like that.

Sure, Maggie.

Yes. No, thanks. I can take on the margin impact first. In terms of our investment in our commercial team, it has no impact on our gross margin. I think the comment that I make about the mix as a result of the commercial team investment is because like Adam mentioned, both of our thrombectomy and the new XL product are accretive, and they both lead to supporting our eventual 70% margin profile. So – but in terms of the timing of the margin mix, it just could be varied from month-to-month, quarter-to-quarter. But nevertheless, we still continue to see expansion in Q3 and in Q4 at the same time. In terms of operating margin, I think investing in our commercial team has been in our strategic investment for the year. It's just for the right timing and right opportunity, we accelerate some of the investment in Q2. But at the same time, overall, we are still maintaining our full-year margin guidance. So no material impact to the out quarters.

Great. Maybe a quick follow-up. Adam, now that we don't really have a lot of detailed reporting now that your competitor has been acquired. As I'm thinking about U.S. thrombectomy, I was wondering if you could just give us a quick state of the union of what you think sort of the end market growth rates are in stroke in the different areas in peripheral. As I'm looking at U.S. thrombectomy, reiterating the guide implies a deceleration in the back half of the year. I'm just trying to figure out what's your weighted average end market growth in U.S. thrombectomy relative to the Penumbra growth rate implied.

Yes. It's a fair question. It's, as you know, hard to get accurate market information, particularly when we're the only ones sort of talking about our numbers. You can't really triangulate them with other people's real numbers. So you're getting these sort of partial data sets and trying to triangulate it. So I don't want to over-rely on those kinds of sources because they've proven not always to be accurate, as everyone knows. Let me – I'll share sort of as best I can sort of how we're going. Obviously, our VTE growth is leading the way, third quarter in a row of over 40%. Obviously, the market isn't growing at 40%. It's growing somewhere around 20%, give or take, is our best guess. So again, we're continuing to take share there. The arterial business, again, it's less about market growth there because you're really treating all those patients, but mostly with open surgery and lytic. So it's moving those patients from one modality to us. That had another very strong quarter. We grew similar to what we've done in the past couple of quarters. The market growth in neuro, I won't – I'll be honest, was a little soft, but we continue to grow well above that number as best we can tell because of the setup with RED 72 SENDit, the SILVER LABEL version. And frankly, it puts us in a really, really good position. I've always said that we want to try to move physicians to that product in anticipation of the Thunderbolt launch. And I think it's given us that opportunity to really do that and having – growing above the market shows that the share is shifting and the setup for Thunderbolt is great. And then obviously, you know our coronary business, it's a much more mature business, and it's obviously not growing at those same levels.

And our next question comes from the line of Richard Newitter with Truist.

Congrats on the quarter. I wanted to go back to the kind of the sales force initiatives you have going on here. Adam, you had – in late '23, I believe you identified the need for an expanded sales organization with so many different call points kind of coming in, and that was kind of more feet on the street. And here, you're taking a little bit of a different approach, splitting the sales organization. You gave the rationale in an answer to a prior question. I'm just curious, how do we think about the impact to the business and the time that will take to get the return on that investment or the payoff before 1 plus 1 equals 2 and if you can compare and contrast this initiative versus the prior one?

Yes. It's a fair question. The good news is we aren't starting the process of hiring those people. We've already hired them all. The vast majority of them have fully been trained and in the last month or so have been sort of operational, if you will, in the field. And so we already kind of are past that process of sort of going through that. And I have a lot of confidence that as we look at the back half, those teams will be operating exactly how they should be focusing on what they should be focusing on. Obviously, we're still one team overall, and they're sharing managers. So there's going to be some capacity to help each other out and do all that, which I think is really important for the long-term success. But their incentives are aligned to focus on the parts of their business that they're assigned to. And I think we're going to be in really good shape. I think a lot of the heavy work is done and has been moving in that position for the last number of months. So I think we're in pretty good shape. It's a great idea. I mean the team came up with it. I'm thrilled. Their execution on it has been really extraordinary. And you always have a little bit of stuff going on, but I think all of that very minor and is behind us.

Got it. And then just maybe a follow-up. So I appreciate you don't want to get ahead of yourself. The first half is clearly coming in a little bit better than expected on U.S. venous and then also on embolization. And the implied decel that's in your guide, maybe that reflects some conservatism. But assuming all trends were to hold more or less, is there any one division that you anticipate a slowdown or you're seeing something in the underlying market? I'm just trying to get a sense for within our U.S. arterial or U.S. neuro thrombectomy or even coronary, like is there any anticipated slowdown or trend that's beginning to emerge that you're seeing?

No. I think I sort of laid out the 2 areas that have a little bit softer growth, if you will. Obviously, stroke as a market. I think if you look at all the data that people can buy out there, it shows that it really didn't grow a lot in the last months or so, but we continue to take share. I think that is great for us. I think that will continue, particularly as the market digests sort of what the right size product is and how that all works and sort of that setup and sort of getting ready for Thunderbolt continues. So I think that puts us in an okay shape. Predicting the time of all that, got to give us a little leeway to – we don't control that, and we need to sort of be a part of that. And again, the coronary business is a great business. We treat a lot of patients, but it's a much more mature business with sort of analog technology, which is great in coronary, but that's obviously not growing at that level. So there's nothing other than that and us just being obviously – we have we still have fresh memories of having our enthusiasm get the better of us, and we're going to try not to do that.

And our next question comes from the line of Bill Plovanic with Canaccord.

Just first off, it looks like it was really the international and Embo Access that kind of drove some upside in the quarter. Kind of versus at least our expectations, I think, consensus. But I'm just wondering if there's any sea change you saw there? Or are some of these markets coming back sooner than you expected? And then maybe even specifically on China, I think there was some commentary there. I know you had 0 in expectations for this year. Is that how that's coming in? Or is that starting to come back on board? And then I have one follow-up.

Yes. Look, I think we have – as you know, we had some headwinds internationally for a number of reasons over the last year or so. Obviously, the scale of the pullback on our China business has been a headwind for a couple of years. We got out of some markets because of gross margin issues. And so that was a headwind for a while. So we've been really working pretty diligently for a while to sort of make sure our international business is set up for success. Obviously, in certain markets, our CAVT products like Flash 2.0 and the Bolt products are in those markets now and starting to launch. So we're starting to see the benefits of all that work. And that's really what you're seeing right now. And it's great to see it come together. But again, what ultimately will continue to drive it is the U.S. thrombectomy business, but now a little bit with some of the embolization business because I think we've got a good run ahead with that RUBY XL product, which is – I'll be honest with you, some of the great compliments are coming from physicians who are using that and really seeing just extraordinary things that they can do for their patients. So it's very gratifying. So I think we're set up.

And China contribution in the quarter, Maggie?

I'm sorry, you did ask that question. I apologize. I should – I didn't write that question down. So when there was a lifting of the – or pausing of the tariffs or whatever we call it, China did ask for a small order. It was not particularly material, but we did fill it.

I understand the process with the FDA regarding Thunderbolt. You've conducted your trial and submitted your filing, and now you are moving through the process. Your commentary didn’t reveal anything surprising. At this point, you should be nearing the conclusion of that process. Is there any additional data or studies required from you, or is it mainly about addressing basic questions and labeling as you work towards getting the product cleared by the FDA and onto the market?

I 100% appreciate and respect the question. I think there's only – I'm only going to get in trouble if I answer that because it's going to be a nuanced thing that it's going to be misunderstood, and I don't want that to be done. Let me stick with what I said, which is we're going through the process. It's what we expected, and we can't wait to launch this product.

And our next question comes from the line of Brandon Vazquez with William Blair.

Congrats on the quarter. Adam, coming out of SNIS, I think there was a little discussion about potentially being able to reinvigorate some of these efforts or kind of like refocus the neuro community on to getting these patients into the stroke centers and prioritizing thrombectomy. I appreciate we might be early in that. But as we're moving past COVID and this might become a little bit more of a focus now in the stroke markets, maybe the growth has been a little bit dampened. How do you think about what Penumbra can do? How do you think about what the industry is doing? Is there a point where in the near future, where we can start to reaccelerate the growth of the stroke market?

Yes, Brandon, I think it's a really important question and one that I actually think a lot about since we've been here for many, many years trying to make sure that that happens. There is no question there are some – and frankly, a decent number of some just extraordinary centers, hospitals, physicians, leaders who are doing that work in their communities to make sure that everyone that can be treated, should be treated is getting treated. And that is the most heartening thing when we see that. Unfortunately, it's not at every town, at every community, at every hospital. And I don't know how fast the centers that aren't doing that will sort of get on board. I can't predict that. But it is still happening, and it's exciting to see that. I think like anything, that has been sort of the big challenge with the neuro business, the stroke business is making sure that people get to the right place to be treated. That's obviously one of the reasons we're seeing such higher growth on the vascular side because they don't have that issue. They go to a hospital and they can be treated in almost every place they go. But I'm optimistic. I do think that Thunderbolt helps that because I do think it allows for a much faster, easier procedure, hopefully, that allows people to sort of in effect, democratize it and feel like they can treat more of those patients. But let's wait and see. I don't want to get ahead of ourselves. We'll wait until that's approved, and we'll see what happens, but I'm optimistic.

Okay. And then maybe as a follow-up on the Embo side of the business. Now that you're building out a sales force, there's some new products like RUBY XL and maybe SwiftPAC and the MMA embolization. I'm kind of curious if you would categorize this as maybe a little bit of a turning point for Embo. Is this – in the sense of can this be kind of a materially even better part of the business once this separate kind of sales force builds out? It seems like you're viewing a big opportunity there. Please rein me in if I'm getting ahead of my own skis here. But clearly, you're seeing something. Is this something in a year from now, we're going to be looking back and saying, this is why Penumbra invested so much into this segment.

Yes. That's what I hope.

And our next question comes from the line of Ryan Zimmerman with BTIG.

Can you hear me okay?

Yes.

Congrats on the quarter. Not to stir the pot here, Adam, I just want to understand, can you just confirm that could we see clearance of Thunderbolt ahead of a possible data presentation at SVIN in November? Is that within the realm of possibilities?

Yes. Again, I totally appreciate the question. I don't think you're stirring the pot at all. I don't mean to answer the question the way I've answered the last 2 or 3 times, but we're in an active process. Obviously, I don't control it. We're going through that process, and it's what we expected. And as soon as we can, we will tell you something. I can't say more than that. I think it's pretty obvious. But I have a lot of respect for the various attempts to get me to say something else.

And our next question comes from the line of N/A.

Yes. So my question is regarding distal trials.

Yes. Those are both excellent questions. Let's begin with the topic of distal. There has been significant discussion, particularly at the SNIS symposium we hosted, which saw one of the highest attendance rates we've ever experienced. There is considerable interest surrounding this subject. However, there isn't a straightforward answer or a consensus among experts. Many would appreciate data that directly supports our RED 43 catheter as it is regarded as the preferred option for these procedures. But determining what such a trial would entail is complex, especially since individuals who are already convinced about its efficacy would be reluctant to participate in randomization. Therefore, conducting this trial presents challenges, though we are engaged in extensive dialogues about the next steps and what should be pursued. We will keep you informed as more information becomes available. I agree that the necessity of this data is an open question. Regarding the Thunderbolt study, I won't provide quantitative details, but I will clarify that Thunderbolt refers not to the catheter itself but to the product that connects to it and our aspiration source, facilitating modulated aspiration. Its function is activated only when the catheter is at the clot's edge, focusing on the speed of clot removal rather than the overall case duration. That is the primary metric we intend to assess. Of course, we will consider all conventional endpoints, but physicians will be particularly interested in whether that removal time changes. There is no established standard, and if you speak to numerous physicians, you will find they each have their own estimate of what their average clot removal time is, based on hundreds of cases, which is what we plan to compare against.

And our final question comes from the line of Michael Sarcone with Jefferies.

A few things are going on here. You have the sales force ramping, you're ramping RUBY XL, and you also mentioned you're moving past some China headwinds. Do you think maybe just in the context of guidance, can you talk about how you're thinking about seasonality and quarterly cadence through the back half of the year?

Traditionally, there has been a sequential gain unless there are unusual circumstances like product launches that could impact that pattern. Typically, you build a little in the third quarter and ramp up into the fourth quarter, which is usually the strongest unless something changes due to product launches. I expect this trend to continue now, as it has for a long time.

Okay. Great. And the second question is just on the U.S. VTE business, really strong growth in the past 3 quarters. You mentioned, obviously, the market is not growing at that level. Do you think maybe you can just give us an update on where you stand on the market share front in pulmonary embolism and DVT?

I – we all try to guess based on all the data sources that everyone gets. I think it's always sort of a fool's errand to put an exact number on it. We have obviously continued to gain share both in DVT and PE. I think we've made enough movement in DVT to be over 50%. And I think we've made a pretty significant dent in the PE business. I'm pretty excited about the cases we've seen, the excitement around that from new users. And I think if STORM-PE is positive, that will simply continue, if not accelerate. So I think we're in pretty good shape. Again, it comes down to the product. It is a product that just does what it's supposed to do simpler and faster and safer than other technologies. And at the end of the day, I think I've always said almost all doctors will ultimately use the best product. And I think that's just what we're seeing right now that the proprietary sort of computer-assisted vacuum thrombectomy or CAVT is just a unique animal that isn't really something that anyone else can do and copy because of obviously IP, and we're in pretty good shape with it. And we're not done. We're going to keep making it better, and I think everyone knows that.

And our next question comes from the line of Joanne Wuensch with Citi.

Congrats on the quarter. I'd like to spend just a minute on STORM-PE with the announcement of the completion of enrollment. It seems to me that this is sort of the next wave of growth for you. And with the enrollment being completed, can you walk us through the time frame to get from here to approval to commercialization? And if there's anything specific that we should be aware of on that path?

Yes. No, thank you. It's a great question. Well, first of all, our product is already cleared for use in PE. So there's no approval or clearance necessary here, which is great. It really is just data that is going to be looked at by the larger community, not just interventionists, but everyone involved in the treatment of PE cases of patients to determine what the best treatment for these patients are. And again, this is the first trial in the world that has finished that compares anticoagulation to anticoagulation and a mechanical device, in this case, our specific mechanical device. So I think that's what is driving the excitement because that's the standard of care versus something new. And I think if the trial is positive, it will obviously have some significant impact on the thinking around the physicians who are charged with caring for these patients and their referral patterns and what they want to do with these patients. And again, to remind everyone, we're 10-plus percent penetrated in this market just in the U.S. So there's a lot more patients that can benefit. And again, if the trial is positive and shows that, I think it will have some significant impact. Again, on a market that is all in bigger than our stroke market. So it's a huge impact and a huge win for potentially lots of patients, again, assuming the trial is positive.

And our next question comes from the line of Matthew O'Brien with Piper Sandler.

This is Samantha on for Matt. We would like to explore the topic of STORM-PE. Assuming the data is positive, which we believe it will be, how do you see the market evolving? Is it reasonable to expect a similar immediate increase in thrombectomy usage as we observed after the stroke data was released?

Yes, we don't have the information yet, so let's wait until we gather the data and present it this fall, which will be here soon. I want to emphasize that there is a distinct difference with stroke. There is a fundamental structural issue where patients may not always be taken to a hospital that provides stroke intervention treatment. Consequently, they sometimes have to be transferred, and this represents a structural barrier. In contrast, for pulmonary embolism, there is likely to be a hospital nearby that can provide treatment since it should become the standard of care. The dynamics are very different. After spending nearly 10 years focused on this, I am very excited not to face that barrier and to be able to provide the best care for all these patients, assuming the trial is positive.

Right. It makes a lot of sense. And then just have one follow-up on the neurovascular thrombectomy market and specifically, I guess, kind of what the medium vessel occlusion, I guess, portion of the market is doing. I guess, could you talk a little bit about your exposure, maybe what percent of your stroke business happens in these medium vessel occlusions? And what revenue, if any, is impacted?

Yes, that's a really good question. It's difficult to pinpoint that accurately because our typical catheters used in these situations are a RED 62 and sometimes a RED 43, which are also utilized in other areas. Therefore, it's challenging to provide the precise numerical details you're looking for. What I can say is that it really varies by site. Moreover, the decisions are often made by non-interventionists rather than just interventionists. We have observed that some centers have adopted a more conservative approach, but I wouldn't characterize that as the prevailing view. We performed quite well this quarter and gained market share, even though the overall market growth was modest. While there could be a minor impact on those numbers, we cannot confirm that for sure.

And our final question comes from the line of Chris Pasquale with Nephron.

I wanted to circle back to international embolization, just given how much that segment drove the upside this quarter and really deviated from the recent trend, both sequentially and year-over-year. First, Adam, if you wouldn't mind, could you quantify the China contribution just so we can tell the extent to which that order might have driven the beat? And then second, I think your original guidance for the year called for international Embo to be about flat for the U.S. to be up maybe mid- to high single digits. Both pieces are running ahead of that midway through. So how are you thinking about the full-year growth for that business?

Yes. First of all, regarding China, they do not order any of our coils, so it has no impact on our Embo numbers. In terms of the broader international business, we've been in a rebuilding phase for 1.5 years, and we've been transparent about that. Our goal is to ensure we have the right products available while maintaining acceptable margins in those markets. We're starting to see the positive results from that effort, and I'm excited about it. While it's easy to focus on the strong performance of our U.S. business, it's crucial not to overlook the rest of our operations. I'm enthusiastic that we can advance all aspects of the business simultaneously. Although progress isn’t always straightforward, I believe we're in a favorable position for both this year and the years to come, both in the U.S. and internationally.

Thank you, operator. On behalf of our management team, thank you all again for joining us today and for your interest in Penumbra. We look forward to updating you on our third-quarter call.

And this concludes today's call. We thank you for your participation. You may now disconnect.