All right. Good afternoon, everybody. Travis Steed, Medical Device Analyst at Bank of America. Up next we have Shockwave Medical. We have Doug Godshall and Trinh Phung. Trinh Phung, VP of Finance, who's standing in while Dan is on vacation. Glad to have both of you. Thank you. Thank you. Maybe Doug, we'll start with Q1. Kind of all the businesses really kinda do double digits sequentially. Feels like a much better environment in general. Just maybe kinda see what you're seeing over Q1, you know, March, April, and, you know, the you know, you've raised guidance above the, above the beat, so clearly things are sustaining themselves. Kinda go through the Q1, if you will. Thanks everybody for joining us today. If you look back to Q4, there was this sort of funky October, early November procedure downdraft, which we, everything we could ascertain was because of pockets of staffing issues. Exiting Q4, things felt better. Entering Q1 before we gave our guidance, everything felt a bit healthier. Fortunately, through Q1 into early Q2, our assumptions appear to be correct. It does not look like there was a, like a one-time catch-up in early, in January or anything that drove our business. It was a fairly steady quarter. Good cadence, good average daily sales throughout the quarter. Obviously, if we saw something that gave us pause, we wouldn't have been as, we wouldn't have leaned in as much on our guide for the rest of the year. Right. It wasn't really a con benefit that drove the growth in Q1. It was pretty sustained when you look at it on an average daily sales basis. The PCI volumes in Q1, obviously that's better too. anything to call out there? there was that pocket last year. I think there was a good sort of sequential benefit. Q4 was oddly soft-ish for part of it. Quarter on quarter, we, I guess, benefited from October. If you sort of drew a line Q3 into Q1 through Q4, business is better. It's both procedure recovery, but it's more execution by our team, further penetration, finding docs who were using our device less than we thought they should, and whether it's coronary or peripheral and driving execution. Peripheral, coronary, kind of both. Did one stand out more than the other? I guess coronary, if you sort of took the Street's numbers, which were not too dissimilar to ours, coronary outperformed relative to expectation. I'd say internally because of the oddity of the fourth quarter, we were cautiously optimistic on coronary, but a little more cautious because, you know, we'd had that sort of procedure wobble that has, is behind us now. Both performed very well and the team is balancing their efforts now going forward as we're launching a peripheral product with L6. We'll make sure that we maintain the balance and people don't neglect their coronary business. It's hard to neglect that business. It's so. There's such good traction already. I think the L6 launch is actually gonna be in some ways beneficial to coronary because when you launch a product, you get to camp out at the hospital and cover all sorts of cases, peripheral and coronary. We think L6 will actually help coronary penetration, not hurt coronary penetration. Right. On the coronary penetration topic, like a quarter ago, people were kind of doubting, thinking that you were getting fully penetrated in coronaries. Kinda curious what you're seeing Q1, obviously a tick-up in penetration. Kinda what are you thinking about on the, on the penetration side of things at this point? I guess the death of coronary growth was premature or something. We are still on balance at almost every hospital we are under-penetrated and meaningfully so. The I think when we first launched in 2021, so much of the effort was open a new hospital, open a new hospital, open a new hospital. When you open a hospital, you would focus on the high volume drivers that got you across the goal line to get the device acquired, you spend some time with the other physicians. But as we look at our business, it tends to be at centers, particularly larger centers where there are lots of physicians, it tends to be concentrated in the, in a small handful of physicians. Then you have a meaningful drop-off in utilization, as you broaden out. As we add clinical specialist resources and we methodically sort of right-size the territories and do territory splits where appropriate, that is a great forcing function to have, so you have now enough capacity where you can focus on, really a physician by physician coronary and peripheral utilization versus Hospital X is using us 9% of the time, and that feels pretty good. I'm done. I'm gonna go to hospital Y. You can do that when you have 20 sites. You can't do that when you have 11 or 12. You've got to really drill down and find sort of where's the opportunity, and frankly, 9% is woefully inadequate relative to the scale of the opportunity, even if you have a fairly healthy perceived penetration. I think the the added focus that comes with more capacity in the field and expanded education sort of peer-to-peer education that demonstrates all the different applications of IVL, not just sort of the what people inherently thought I'll use Shockwave for concentric, small, sort of short lesions. That's what we got in 2021 and 2022, and now it's sort of nodular, eccentric, long bifurcations. It's all the other use cases that are sort of, vastly under-penetrated. When you look at kind of same-store sales growth or same-center sales growth, are you seeing pretty broad increases in those same-store sales growth, or is it more certain doctors doing a lot more of the growth and others kind of lagging? We try not to make broad sweeping generalization because each account has different dynamics. You might have one doc who's using you 20% of the time and another who's using you 5%. Well, the 20% has some upside, maybe less, but they clearly see the value, and there aren't many who are using it 20%. We think in a couple of years, there'll be lots of people who are using it 20%. Very few of our individual customers are at what we would consider to be sort of full utilization. We, we've, as our regional manager and territory managers are developing their sort of territory plans or regional plans, it, more and more we're dropping down to what are the individual dynamics at an individual account at, and at a physician level because now you have the ability to look at a sort of in more granular detail. What are the dynamics at this hospital in Las Vegas versus another hospital in Las Vegas 'cause it's gonna be different, depending on who's doing the cases, and what the utilization rates are and type of patient population that they're seeing. That's helpful. When you think about kind of the penetration, you talked about 30% of PCIs is kind of the opportunity, but where are you seeing some of the high volume doctors out there and what the current technology have? Where do you see that getting to versus needing other technology to get to that 30-ish%? The, the published, severe to moderate calcification or moderate to severe is 30%. Unless you look at intravascular imaging, then it's actually 40%. More accurately, it's probably a 40% opportunity versus a 30% opportunity, 'cause you miss a lot of stuff on angiogram. There are handfuls or handful of sites that are north of 20%, and they tend to be sites that are, sort of have adopted a, IVL first mentality versus fail other things first, and then if other things don't work, balloons or atherectomy, then I'll go with Shockwave. When we first launched the product, we intentionally recommended that you fail something first. That was because we knew we were selling a premium price product. We knew there was anxiety about reimbursement and the economics. We didn't want physicians to use the device that is so straightforward to use and so reliable and then wonder, "Well, did I really need to use that?" We wanted them to fail something, so they were convinced they needed it versus try it and then wonder, "Did I just waste the hospital's money?" Our sort of messaging change or evolution now that sort of everybody now realizes the benefit or most people realize the benefit of Shockwave, I don't have to sort of sell against myself anymore. It's more like, why would you waste money on a cutting balloon and a high-pressure balloon and do all these other things and then eventually use Shockwave anyway? That's actually economically much more harmful to the hospital than just go straight to Shockwave. There's still economic angst, friction, I don't know what the right word is, because it's still a premium price product. We have it in the U.S., we have a transitional pass-through, we have an NTAP, so we have adequate reimbursement, but it doesn't feel like real reimbursement to a physician. The cath lab director is still chirping on every device they use, "Spend less money, spend less money, spend less money." There's still a reluctance to fully adopt Shockwave in most hospitals, and that's the biggest governor on utilization. The second biggest is, the device could be a little bit more sort of lower profile and more crossable, and that's just a product development initiative that will, that will come forward in ensuing years. The bigger obstruction is reimbursement, which looks like in the very near future is gonna solve itself. I think that's gonna make it a lot easier for physicians to feel comfortable because cath lab directors and service line directors are gonna say, ", Shockwave is actually a positive economically, not a neutral to negative economically. Right. That was actually my next question. Good set up. You're welcome. On the inpatient, codes, when do those go in terms of the fact that there's been awareness with your customers, like where that is today, and how do you think that kind of changes the routing trajectory for coronaries? Should I do the full reimbursement gamut for now? Okay. I'll do the whole soliloquy. Inpatient IPPS rule, outpatient is OPPS. Inpatient, the proposed rule just came out a couple weeks ago. We had suggested to CMS that given the complexity of our patient population and therefore how much it costs to treat that patient population, that they should when our add-on payment and our NTAP expires this October, that they should always put our patients into the higher DRG, which is a $20,000 DRG on average, instead of either $20,000 or $13,000, and those are the two levels. We thought there were three potential outcomes. One is they would just be silent in the proposed rule. The other is they would say, "Here's what Shockwave has requested. What do you think?" And open it for public comment. We agree, but we'll open it to public comment," and that we would land in the $20,000 payment. We had no expectation that they were gonna say, "These patients are so complex, actually, we're gonna create three new DRGs for Shockwave, $29,000, a $20,000, and then an $18,000 if there's no stent." Now the lower complication, low comorbidity patient is a $20,000 payment instead of a $13,000 in the proposed rule. The more complicated patient is $29,000 instead of $20,000 if the rule comes through. Final rule will be August. Would go into effect in October. I have always said that inpatient reimbursement does not matter, and nobody pays attention to it because the patient determines the payment level, not the technology. I'm having to sort of rewire my brain because now, for the first time, technology is actually gonna determine the payment level it looks like. Whereas if you use IVL, you're gonna get $7,000-$9,000 more in inpatient, which is appropriate given the patient population. So that is inpatient. And we'll see if it survives the comment period. It should because it's really just CMS did the math. They looked at how much these patients cost, and they said it has to be a new DRG. Outpatient, the proposed rule should come through in right around the Fourth of July weekend, just so everybody's working over the weekend. There are three potential outcomes there. One is they say nothing. We think that's highly unlikely. Two is that they say that we'll expire the transitional pass-through, which we have today at the end of December, and then Shockwave will land in the new or into the existing highest APC level, which is a $17,000 payment, not in the $10,000 stent APC. The third is instead of ending TPT early in January, we'll end it on schedule at the end of June, and then you'll land in the new APC or the higher APC on July first. We think one of those two are the most likely outcome, given that we have a Breakthrough Device. We've got tons of data on transitional pass-through Medicare. Their job is to provide access to Medicare beneficiaries. Having a gap between the transitional pass-through expiring and landing in the right APC just is incoherent with their, their mission or their, their obligation. If there's a gap from the unlikely gap of June through December, then we'll just fall in the stent code for a short period of time. They'll give us an extended TPT, which seems unlikely. The third reimbursement bit, sorry to keep going, but it's complex. Last year, this, the AMA CPT panel voted in favor of creating a physician payment for Shockwave for IVL. After that, the RUC committee does their work, and they survey physicians to figure out how much work it takes to do a Shockwave procedure. We know that work is done. We don't know where they're gonna land. Also in July, there will be a proposed physician payment rule, which will also go into effect next January. We are certain there will be a CPT code for intravascular lithotripsy. We are certain it will be in January 2024. Doctors will finally get paid for the work they're doing with Shockwave. We just don't know what the number is. That would open up the OBLs? No, that's. Okay. That's for the lower extremities, for peripheral. We don't think that's gonna happen in. Well, the AMA panel has to agree on codes with the societies. They've been really effective at delaying. They're now 4 years into the delay. I think they're gonna buy another year. Our guess is it's 2026 before we have a CPT for IVL in the periphery, which would then also enable us to participate in OBLs. Got it. On the outpatient coronary side of things, it's gonna be decided, and we'll learn in July. Like, it seems like there's kind of illogical to have this month gap. I know that you. Well, it's conceivable, but it's, seems highly unlikely. Right. It seems like the most likely outcome is it gets mapped to the higher code gets fixed, right? . I think, well, I think the most likely is next July. My reimbursement guys think they're gonna sunset TPT early in January. I just think if I'm a, if I'm a government employee, I don't wanna like have different rules and have to decide when to end TPTs, and I always end them at three years. I'd rather just end this one at three years too, so it's like all the other times I do it. We think it's either January or July. Does the inpatient going better than expected, is that a good read-through for the outpatient? What I would read through is when CMS has a code that enables them visibility to an analyzed costs, that they do what they are supposed to do as a cost-based system. They saw the cost via our NTAP, and they said, "We've gotta do actually hard work and create a new code." What we think they're gonna do on outpatient is actually easy work. They just say, "What do the costs say?" We've seen the costs. We know it doesn't belong at a $10,000 level. It's at least $17,000, but I don't think they're gonna create a new APC level. I think they'll just slot us into the $17,000. We clear the bar considerably over the $10,000 stent code. We don't think there's any way to do the math and other than to land us in the 5194. No, that's very good reimbursement. Let's talk about peripheral, U.S. peripheral. Like, kind of surprised that the guidance there originally, kind of outpacing coronary 40%, 50% revenue growth in peripheral. I guess there's penetration increasing, same for itself sort of increasing in those product launches. Maybe just kind of give me some confidence in the overall peripheral growth and how long this can continue. There's more calcium in peripheral than there is in coronary. Whether it's 30% or 40% coronary, I think 40%'s more accurate, as I said before. It's 50+% in peripheral, depending on the vessel bed. Now, there are also a lot more tools in peripheral, and there's less sort of concern about safety, particularly in the SFA region. It's a little bit more of a Wild West. As we improve the performance of our products and create sort of custom built for different vessels, like with L6, we think we will continue to see significant growth through continued penetration, particularly when combined with the fact that we're now very viable economically for the hospital above the knee. Whereas before, you had to be really thoughtful about when you're using Shockwave because, you know, payment was $5,000, and it was, sort of at best a push, in terms of the contribution margin. So now we're in the same category as stents and atherectomy for above the knee. We think that's, that just gives the physicians license to use what they think is the best device for that patient. Whereas before they had to be absolutely convinced that there was no other alternative than Shockwave, and then they could use us. So we, I mean, we're launching L6 now. We'll launch C2+ in the coronaries next year or later this year. The next two product launches will be peripheral. The next three product launches will be peripheral. We are gonna keep feeding the peripheral franchise with enhanced performing devices, to give sort of physicians better and better tools to address their peripheral, and we think that will continue to stimulate growth. Okay. On the eighth call, you said L6 broader than you believed and expected. Have you expanded on that? The next part of the question, when you think about the new tools in peripheral that you just mentioned, do you see this as being like new vessel beds in peripheral or faster, you know, ideal systems or just kinda how you think about the pipeline in peripheral? L6 first, we launched in the U.S. in March, so it's early. Limited launch, very favorable feedback. Full launch, equally or better feedback. It's all anecdotal right now. We're still trying to tease out how much of L6 is gonna be incremental and how much is gonna be sort of performance upgrade versus M5. The main performance upgrade. The two main performance improvements are just bigger diameters. If you have a 10-millimeter vessel and you were using an eight-millimeter M5+, it works, but it's not exactly the angiographic outcome you would like. The anecdotal feedback is like it looks fantastic because you've got the bigger diameter. You also have more concentrated power. We have six emitters in a 30-millimeter balloon as opposed to five emitters in a 60-millimeter balloon. We spread out the power in M5+. It works great. Concentrating the power for these bigger vessels and some of the really severely eccentric calcium that you see in some of these vessels, like a common femoral, that sort of concentrated power appears to yield an even stronger clinical performance, at least angiographic performance. Just didn't know. I mean, we treat a lot of iliacs already. I think we're gonna treat a lot more iliacs with L6 based on sort of the level of how enthusiastic the response has been so far. That's been a pleasant upside surprise. In terms of the pipeline, I mean, we're still scratching the surface on all of our vessels. Iliacs arguably are where we are. That has been our sweet spot historically, and it will be even more of our sweet spot with L6. We are vastly under-penetrated below the knee. We're doing well. I'm not unhappy with the business, but there's more calcium below the knee than there is above the knee. Sort of 75% of the vessels are calcified, and it's there's a lower procedure volume, but as a percent of those procedures we're I would consider us to be sort of experimenting below the knee right now even though it's a nice little revenue stream. As we roll out our next couple of products, they should have. You should see increased utility and sort of better address the idiosyncrasies of below-the-knee disease. Skipping to international. Can you give an update on, you know, China and Japan? I actually didn't realize you were in 60 countries at this point. Could be a new business. Talk about the international business at this point. We're in most of the countries that matter. South Korea is crazy. It's a really high-tech market, but it takes freaking forever to get approved there. That's sort of the last major market that we're not in, and we'll keep picking up smaller countries bit by bit, but we're kind of in the countries that matter now or matter most. The three that are we believe will be driving our business, and why international is growing faster than the U.S. right now are China, Japan, and Germany. Germany because Of our European markets, we are least penetrated in Germany. There are about 300,000, 330,000 PCIs in Germany, more than Japan. There's about 270,000 in Japan. We only have about, I don't know, sub 1% utilization in Germany for coronary because, to their credit, if you use a device in a cath lab in Germany and it causes the cath lab to lose money, the controller of the hospital will show up the next day and ask the doctor, "Why did you use Shockwave?" They're really effective at tamping down utilization of any device that causes a loss, as they would say, having been stuck in those conversations with those controllers. Now we got an uplift to a higher DRG in Germany, now for the first time, coronary is adequately reimbursed. We saw in the first quarter a very nice upswing, even though we just got the improved payment in January. We're going to expand our sales force, at least double it this year, and for the first time shift from generating clinical and economic evidence to try to improve reimbursement, which has basically been the mission of our German team for years. It's a real change of sort of mindset to become a growth enterprise, we're leaning in on Germany heavily, and we think that will contribute for several years and should be sort of our largest, our best penetrated European market because it's the one European market where there is real reimbursement versus our least penetrated European market where it is today. Japan has multiple things going, accruing to its favor. Adequate physician payment, very adequate hospital reimbursement. Every patient gets intravascular imaging, so they will see that 40% calcification as opposed to any other market where you're only 10%, 12% intravascular imaging, so you don't know how much calcium there is. They hate complications in Japan almost more than they hate complications in any other market. Our extraordinary safety profile really resonates with that physician base. The governors on sort of even more rapid adoption in Japan, there's a lot of hospitals, so a lot of small hospitals, even more than in the U.S. It's not as concentrated as like a lot of the European markets. We partnered with CVIT, which is the cardiovascular society in Japan, to both get approval and importantly to get good reimbursement. We also agreed we would partner with them so that we wouldn't sell outside of their algorithm. There are certain use cases like atherectomy followed by Shockwave, so Rotablation Shockwave, which is done fairly regularly in every other market. That didn't fit in the CVIT guidelines, so doctors are gonna be very reluctant to deviate from those guidelines. We'll do studies to get it into the guidelines, and so each year we'll probably expand the guidelines little by little. Most of the cases still fit within their guidelines. We're quite bullish that as we expand our sales presence, Japan will be a meaningful driver for several years. While this year it will lag China and China will be our number 1 international market, I won't be surprised if Japan passes China next year because it'll have a higher ASP, and adequate reimbursement as opposed to China, which is a lot of sort of private pay out of pocket. China, our JV partners, is executing really remarkably well and huge procedure volume, but it's encumbered by the, like, some of the market will pay for an imported device, a lot of the market will not pay for the imported device. We're tapping into the import market for the next couple of years, and then our partner will start manufacturing in China, and then we'll get a royalty out of the local market. Great. I think we'll end there. We're out of time. I'm sorry, Trinh. Sorry, Trinh All good. All good. Thanks for keeping me company. Yes.