• Revenue: $321.3 million for Q4 2024, a 12.9% increase year over year on an adjusted basis.
• Full Year Revenue: Over $1.2 billion, a 13.4% increase year over year.
• US Thrombectomy Sales: $180.6 million for Q4 2024, a 27.3% increase year over year.
• Gross Margin: 67.4% for Q4 2024, a 170 basis point increase from the prior year period.
• Operating Income: $48.6 million for Q4 2024, representing 15.1% of revenue.
• Operating Cash Flow: $49.1 million generated in Q4 2024.
• Adjusted EBITDA: $63.7 million for Q4 2024, 19.8% of total revenue.
• Cash and Equivalents: $340.1 million at the end of Q4 2024, with no debt.
• International Revenue Decline: 9.4% decrease in Q4 2024, primarily due to a decline in China revenue.
• Full Year Thrombectomy Revenue: $818.1 million, a 20.8% increase year over year.

• Warning! GuruFocus has detected 5 Warning Sign with PEN.

Release Date: February 18, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Penumbra Inc (NYSE:PEN) reported a strong revenue growth of 12.9% year over year for Q4 2024, reaching $321.3 million, with a 13% growth on a constant currency basis.
• The US thrombectomy business showed significant growth, with sales increasing by 27.3% year over year, driven by a 41% growth in the US VTE franchise.
• Penumbra Inc (NYSE:PEN) introduced nine new products to the US market, including advancements in their CAVT portfolio, which contributed to their strong market position.
• The company achieved a gross margin of 67.4% in Q4 2024, an improvement of 170 basis points from the previous year, indicating strong profitability.
• Penumbra Inc (NYSE:PEN) is on track to achieve a gross margin profile over 70% by the end of 2026, supported by favorable product mix and operational efficiencies.

Negative Points

• International revenue declined by 9.4% adjusted and 9.1% in constant currency, primarily due to a significant decrease in China revenue.
• The company faced a $5.8 million reserve related to Italian payback legislation, impacting financial results.
• Penumbra Inc (NYSE:PEN) experienced a one-time $33.4 million Immersive Healthcare inventory write-off, affecting the gross margin for the year.
• The guidance for 2025 revenue growth is set at 12% to 14%, which some analysts questioned given the headwinds faced in 2024.
• The company has not yet submitted the Thunderbolt technology for FDA approval, which could impact future growth projections.

Q & A Highlights

Q: Why is the revenue growth guidance for 2025 set at 12% to 14% despite overcoming headwinds in 2024? A: Adam Elsesser, CEO, explained that the guidance aligns with a cautious approach to avoid overestimating, considering factors like the Thunderbolt launch, which is not yet fully controlled or included in the guidance. The company aims to avoid the issues faced in the previous year by being conservative in their projections.

Q: What is the timeline for Thunderbolt's data readout, filing, and clearance? A: Adam Elsesser stated that the follow-up for Thunderbolt is complete, but it's premature to provide specific timelines for data readout and clearance. The company will update stakeholders as appropriate, and the recent negative trials for distal vessels using stentrievers do not impact Penumbra's strategy, as their focus remains on large vessel occlusions.

Q: Can you provide insights into the embolization and access business, particularly the expected growth for 2025? A: Adam Elsesser highlighted that Penumbra remains a market leader in these segments, with ongoing innovation. The company is focusing on areas where they can be more successful, especially in the US, and is optimizing their international presence. The expansion of manufacturing in Costa Rica is expected to support growth and cost efficiency.

Q: How is the US thrombectomy business expected to perform in 2025, given the strong growth in 2024? A: Jason Mills, EVP of Strategy, noted that the US thrombectomy business had an outstanding fourth quarter in 2024, setting a high benchmark for 2025. The growth is expected to be front-end loaded, with the first half of the year potentially seeing stronger growth compared to the fourth quarter, which faces tougher comparisons.

Q: What are the expectations for gross margin improvements in 2025 and beyond? A: Maggie Yuen, CFO, stated that the gross margin is expected to expand by at least 100 basis points in 2025, driven by favorable product mix and operational efficiencies. The company aims to achieve a gross margin profile over 70% by the end of 2026, primarily through product mix and manufacturing efficiency, not pricing strategies.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.