All right. Morning, everybody. Thanks so much for joining us. My name is Matt O'Brien. I cover Med Tech here at Piper Sandler. Really excited and lucky to have the Penumbra team here with us today from the company. Is Adam, who's the CEO, and then Jason and I thought I saw Cecilia, yep, out in the audience. So thanks so much for coming all the way across country for us. Yes. Happy to be here. Thank you for having us. So maybe, Adam, just start off with some of these new products. You know, I don't know how much you wanna share, but, you know, I'm really compelled. You know, we've done a lot of work. Sam, who's on the team as well, has done a lot of work on all these new products that you have coming. Maybe starting with 2.0, what are you seeing? I know it's, you know, we're several quarters in now, but what are you seeing in terms of adoption, interest level? Is it building? Is it plateauing? Where are we at with 2.0? Yeah. First of all, thank you for starting with my favorite topic, which is just our constant innovation that we've had for the better part of 20 years now. Specifically with 2.0, we were able to build on Flash 1.0, which really was the start of sort of a new paradigm in removing blood clot. And with 2.0, what we were able to do, basically, the best way to describe it is the speed in which it reacts, the computer reacts to being in clot or not in clot. That sort of fidelity is now much greater so that you can open and close the valve faster. Yep. And therefore take out a lot more clot much faster and have really no blood loss, you know, that comes with that. And that really was sort of, you know, 1.0 was great. And so people who had used it thought, you know, okay, this is a nice iterative improvement. But it really was for the people who, for whatever reason, hadn't tried 1.0. Their reaction to it has been pretty fun to watch. The case times are really much, much shorter. So at this stage, it's by far the fastest way to remove blood clot, both in DVT and, you know, in PE, where we've seen a big shift in interest. And I think that's just building. I don't think, you know, at the end of the day, look, there's been a lot of companies, and the field has been blessed to have companies, you know, open this field up and to start this field and to, you know, show that there might be a better way to treat these patients, so that, particularly the sickest ones, but even those who have to deal with a low quality of life for a long time, can have a better deal, and so, but like in anything, you gotta keep innovating 'cause if you look at stroke, where we started 20 years ago. Yeah. Where we are today, you know, you wouldn't recognize it. Right. And so I think that allows that innovation with 2.0. It really is now the fastest, safest product out there. And I don't think we're done innovating. You know, I think we're gonna keep adding to that, paradigm. Okay. Okay. I kind of wanna ask a little bit more about that, but we'll get to that later. Sure. So on the blood loss side, what are you seeing with 2.0? And then what kind of progress are you making on the pulmonary embolism side? 'Cause I think 1.0 did really well in DVT, and PE was like kind of this, you know, more greenfield area for you. Yeah. So what are you seeing there? Yeah. You know, I think the numbers that people saw this last quarter showed that we were continuing to take, you know, relatively significant share, as well as, you know, spurring the market to continue to grow. So both of those two things are important, and I think we'll continue to do that for the foreseeable future. The product is, you know, just the interest level, you know, is really nicely is high right now. People, you know, it's just sort of common sense. If you can get the clot out with no blood loss faster than what you're currently using, why wouldn't you use it? Right. You know, I mean, that sort of seems obvious. You know, we don't, it works so fast. The device times are so fast that there isn't time for blood loss, if you will. Right. You know, the current product that they're using, the older technology, takes a lot longer, and therefore there's time, and they have a lot of blood loss that they then have to put back in, you know, and, and that comes with a bunch of other comments and risks that, you know, are fine if you have no choice, but not if you do have a choice. Got it. Okay. Appreciate that. What about, just the growth in the market, generally speaking? Yeah. I mean, do we, are your new technologies enough to, to continue to accelerate the market, or do we need all of this clinical data from PEERLESS I and II and then STORM-PE, etc., from you guys to accelerate this? I still can't get over the fact that we leave all these clots in all the time, or we use lytics, whatever it may be. Yeah. What do we need to really see acceleration? Yeah. So PE, specifically as PE, you know, it's different, obviously, in DVT where it's the same product. But in PE, really we do need the trials that are being run against anticoagulation. You know, PEERLESS, you know, wasn't that trial. I think everyone understood that limitation. And I don't think it's a particularly, you know, it's sort of older technology pro, you know, against something that was already sort of coming out of favor. As it relates to anticoagulation, which is really the main issue, we're gonna have a series of trials, you know, STORM-PE and NIH-funded trial and PEERLESS II. And I think that is the body of evidence that will allow us to sort of rethink this. It's very similar to what we experienced and saw and participated in with stroke, where you had a, a different, treatment paradigm, in order to change that. With all the physicians involved in that decision-making, you needed those trials. We had a number of them happen, and then we saw that sort of start to evolve. The benefit, though, is we don't really have the issue of moving patients that we had in stroke. Yeah. And that obviously was a huge issue. It had a lot of momentum for a while, but it's ultimately what we have to deal with in stroke, which is gonna be different here. The patients are really at the hospital so they can be treated. Yep. And once these trials come, I think we'll see that shift in PE pretty dramatically. Got it. And the infrastructure's in place, with these patients once they're there to go ahead and intervene on them for. Yeah. That's, that's the thing. Versus with stroke, right? Yeah. There you would have to, you know, the biggest topic was moving the patients to a certified stroke center. Yep. Got it. What about, you know, longer-term penetration rates in DVT and PE? Where, you know, they're, they're still lightly penetrated. MR CLEAN was obviously on the neuro side, a massive accelerant in terms of, penetration. Where do you think these penetration rates in, in DVT and PE can go over time with these studies and with your technologies? Yeah. It's hard to, you know, say 100% 'cause, you know, nothing's ever 100%. But, I think the field is open now, seeing the successes as the products have gotten safer and easier and quicker, and the technology continues to evolve, to really moving in this direction. I don't think it will. I think it will happen. There's work to be done really at a hospital level, you know, in their community, within the protocols in individual hospitals. Some of that, you know, we've defined as our market access work that we're starting, and that might take a while, but I think it is work that we understand what that work is. We understand how to do it. We've seen, you know, some trial successes already with it and it's just sort of the blocking and tackling of changing a paradigm when new technology makes it worth changing. Got it. And it just takes some time, but the positive reaction, you know, to the current technology is different than we've ever seen before, you know. Interesting. Okay. Let me ask you. But I'm not saying that to, you know, get ahead of ourselves. Sure. It still takes. Yep. Hospital by hospital, person by person, you know, work, and we've been pretty clear about that. Yep. No, makes sense. What about, you know, the competitive side of things here? Yeah. You know, it seems to me there's a lot of differentiation in what Penumbra sells to the marketplace. But some people will say, "Oh, we just need a more simplistic aspiration product. It doesn't need to be all that differentiated." How do you, what resonates with clinicians where they're not gonna switch over to the next thing that comes along? Yeah. How do you keep pricing stable in that type of a dynamic environment? Yeah. Well, let's talk about the technology first. We can touch on pricing in a second. The technology, there's really three mechanisms that you can use to remove clot, and I'm saying three, you know, as a self-serving thing you'll hear in a second, but they're grabber, scraper, tools, you know, things that hold onto and grab out stuff. Those have been around since the early days of stroke, obviously, so we have a lot of experience watching what those do, how they work, and the limitations, and then there are aspiration-based systems. In the aspiration world, there's either syringe-based aspiration or continuous aspiration with an outside pump, but those alone, all of those, whether it's a grabber-type tool or sort of analog aspiration systems, that's what the world has been for the better part of 20 years. Right. And they have huge limitations. So it really is the third category, which is CAVT, where the computer is doing the work that the human hand can't do fast enough. Right. That has changed that trajectory, that paradigm, and so I think it's logical when you see a market that has so much potential, so much growth, and so many willing physicians who wanna see that growth happen that you would come into it with whatever you could come into it. Right. I honestly think, you know, that, you know, it, it's somewhat ironic. You know, there's a couple of private companies out there now selling products that look like what we sold in 2014 and 2015 and 2016, and we're told they're not good enough for the, you know, the prime time. I mean, maybe the world's changed and they wanna, you know, go backwards. I don't see that as a typical. Yeah. We don't typically go backwards in technology, so. I have not seen that. And then the pricing, you know, our pricing is set within the current DRG to make the procedure profitable for the hospital. We presented some early data showing that in Las Vegas earlier this quarter. And I think that is a critical piece of this. This has to be a profitable procedure. Yep. If you're asking hospitals to do more and more and more of it. So it has to be better clinically, which we also showed, and it has to be profitable. And that becomes a really critical piece. So I think we have the capacity to do really well within that current pricing structure. I don't think you need to raise it. I also don't think there's a lot of risk in having to lower your price, if that was sort of the part of the question, in part because of that profitability and then the benefit that you're showing clinically. Got it. Okay. All right. So let's flip over to the arterial side. And, you know, Jason and I and we've been covering this space. I've been watching it as a movie critic now for 20 years. On the below-the-knee side, clear clinical need, no question. Yeah. Nothing's really worked, you know, be it stents or, you know, drug-coated balloons or, sorry, just traditional balloons. Yeah. What have you guys gotten right to where it's gonna work this time? Yeah. Below- the- knee. So let me, I mean, I'll specifically talk about below- the- knee, but I wanna make sure that I focus, you know, the disease the right way. So what we are focusing on clot, you know. Yep. So removing clot, whether that clot is, you know, acute, whether it's already sort of somewhat, you know, hardened up a little. But clot means, you know. Yep. Not attached to the vessel wall, not. Yep. Plaque, not atherosclerotic, you know, sclerotic plaque. So, it's not atherectomy. Yep. And they're very different. You know, obviously with atherectomy, it's a whole different world, a whole different set of tools and players. But with just clot, and sometimes the two overlap, but they still need different tools. Right. You know, to do that. And with clot, you know, again, there's a huge amount of clot that shows up, you know, in the arteries in the body. Some of it below the knee, a lot of it above the knee, you know, even in the torso and arm sometimes. And having a tool that can just, again, move that reliably, very quickly, interventionally is very, that's a huge deal. Yeah. Right now, unlike PE and somewhat DVT, those patients are mostly treated by physicians that would be our customers. Vascular surgeons do a lot of open surgery where they can do a cutdown and use a Fogarty balloon to drag out that clot. We've seen people who have done that for years and years start to use Lightning Bolt 7, and now Lightning Bolt 6X because of just how fast it is. And again, the safety profile. You know, when you can do a case and the patient's sort of like clot's gone and the whole thing didn't take that long at all, and the recovery's different than having a whole cutdown and, you know, the risk of open surgery, it's just a different animal. And again, then you add in the economic benefit, you know. Yep. Coming from a higher DRG and a lower cost structure, it starts to look like a positive momentum for us. Got it. How is 6X different than 7? Is it just the pace of the procedures? Yeah, well, 6X and so both of them, Lightning Bolt 6X, Lightning Bolt 7, are the similar algorithmic, you know, modulated aspiration technology that also is used in Thunderbolt. The technical difference is just size of the catheter. Right. So that it's smaller and can fit below the knee and/or in other smaller arteries. In addition, it has an inner, sort of delivery tool similar to SENDit in neuro so that you can have access, you know, in more distal ways much easier. Got it. Okay. Which is again a point that, you know, physicians like. They don't wanna, you know, the farther you're going, you know, access becomes. Yep. Again, a little bit more of an issue, less obviously than in the brain, but still relevant. Isn't this do you think this will be a meaningful contributor to growth next year? I know, you know, when you get ahead of yourself too much. Yeah. But I mean, we're, we're pretty booted up on it. Is that a fair assessment? I think, you know, rather than isolate each vascular bed, I think we have to look at the totality of the CAVT products that have already been approved and that will continue to get approved, and look at it as a context of over the next, you know, years, CAVT will be a meaningful part of our growth, obviously. Yeah. As a company. Okay. You know, I think that each one has opened up new opportunities. The two newest ones, new opportunities with CAVT, you know, as opposed to with sort of more older technology that we had. And so that, by definition, is a benefit. But yeah, I do think the growth of our growth for the company is looking at the CAVT portfolio as a whole and feeling pretty good about where that's gonna take us. Okay. Understood. Do you get a pricing benefit, as you roll out new products? So if, you know, next generation below the knee, is that a, is it gonna be a higher ASP product? So yeah, when you add CAVT, it's by definition got a higher cost than just a plain catheter. Yep. You know, 'cause you have a whole computer system in each case. So, so 6X, if you're already using one of our smaller catheters, and then now you're using 6X, that is a price benefit you get out of it. Okay. All right. Good to hear. Thunderbolt. Mm-hmm. How are we doing on the progression of getting that product approved? Where are we at? So, the trial finished enrollment, just, what, I've lost track of time a couple of months ago. We set on the earnings call that we will likely finish the follow-up at the end of this year. And once that happens, you know, we'll start the process of, you know, looking at the data, reviewing it, having, you know, core lab adjudicated, you know, all that work. Yep. And then, of course, submitting it. Got it. What should we think about in terms of timing? The middle of the year? Yeah. Second half of next year? I appreciate the question and. Yep. Certainly, the need and the desire for an answer. Having, you know, gotten stung on that topic before, particularly with Thunderbolt, I'm gonna not be more specific. Okay. Fair enough. You know, the work ahead of us is relatively, you know, clear, you know. Sort of, there's nothing unique about the process of it. Is it a 510(k) versus a PMA, so it really is just around the data. Yep. And once you know, get that organized and ready to go, you know. Yep. It goes through the process. Got it. And not to push too much, but you've been going back and forth with FDA, you know, through this whole process, so you've had pretty good conversations with them. So you should have a pretty good sense of what they're looking for. And then hopefully it'll be the 90-day period, maybe a little bit longer for the review cycle. Yeah. Look, I'm excited about bringing that technology. I think the timing is right in neuro, as we alluded to on the earnings call, you know, there've been a couple of years of, a lot of sort of discussion around larger aspiration catheters, Yep. 088s and all, and most of those, you know, whether companies have admitted or not, the field has sort of relegated that catheter size to being a guide catheter. Yep. And which is, you know, for people's memory, the first 088 guide catheter ever made was made by Penumbra. It's called the Neuron MAX. We've sold over a million Neuron MAXes. Wow. It's the most popular neuro guide catheter ever. So we're happy to have some other competitive guide catheters. I think we'll do fine, you know, as we continue to think about that and even update our Neuron MAX, albeit it's a beautiful catheter. I just think the field has realized that it's just too big to fit in the M1, and I think the field is now interested and ready in having a technology like Thunderbolt. Okay. What do you think Thunderbolt's gonna do to the market once it hits the market? I mean, whenever it comes. Yeah. Something in 2026. I mean, you know, we've kind of plateaued, I think, at about 30% penetration there. Yeah. I mean, do you think it can accelerate growth? You know, I think there's a lot of different things that the field is now talking about for the first time in sort of post-COVID, and I've become involved in a series of conversations with some of the more senior physicians in the field in the last sort of few months around what do we, can we do as a field, what can hospitals do individually or then systems, though the very fact that we're having those conversations, and really addressing the limitations to that growth and the things that sort of stopped the growth, to me is a huge sign because since COVID, we really haven't had those conversations until now. Okay. So the fact that we're having them again, and again, whether that's because of new technology or just because it's the cycle of, like, you know, what happens to people in their practice and sort of digging out of, you know, what was a complicated time with low staff and traveling nurses and techs and, you know. Yeah. All the stuff that we all have talked about. It gives me a lot of hope that the conversations are now really engaged, and there's a series of things that the field can do to see that growth go. I think people generally want, you know, feel like we haven't finished the work. Yeah. You know, we have to get, you know, will we ever get to 100%? Probably not, but we have to get way better than 30%. Got it. Yeah. And I think physicians, generally feel that way. Okay. So I think there's an opportunity here. Last product question. What inning are we in terms of some of the iterations that you've made to your technologies? And And where can these things go over the next several years? Yeah, that's a great question. I am, without being very specific about where we can go and what this technology can do, we're at the beginning. I am so intensely proud of the team and the development engineers at Penumbra for you know, here we are 20 years into it, and we're accelerating our innovation. You know, we've had a number of investors who wanna come and just talk to our engineers, not about specific products, but more how does a company 20 years old have the level of sort of innovation that we have? Like, what, how do we do that, and I love doing that 'cause I don't have to say a word. The engineers can just talk, and I just sit there like, "Wow, this is so cool." So I have a lot of confidence that innovation, you know, and in our four-prong strategy that we laid out on the last call, earnings call, you know, innovation was number one. Innovation is definitely not going anywhere. Got it. it. Okay. And last real quick question. Operating margin's gonna outpace gross margins expansion, and I know gross margins supposed to expand nicely. Where's that leverage coming from, on the operating margin side? Pretty simple. Really amazing products that work better than anything don't need an awful lot of energy to sell themselves. They're that good. Okay. So there's that much leverage in the industry if you like. Okay. Got it. Got it. All right. Well, I think we're all out of time, so I have to wrap it up there. Great. Thanks so much. Really appreciate it. Thank you. Appreciate it. Thank you. Appreciate it. Got a full day of meetings. Yeah. It's gonna be great. Okay.