0001323885-25-000103
SEC filingRevenue grew 15.8% to $134.3M in Q3, driven by appendage management and pain management, with gross margin expanding to 75.5%.
In the third quarter of 2025, AtriCure achieved robust revenue growth of 15.8% to $134.3 million, compared to $115.9 million in the same period of 2024. On a constant currency basis, growth was 15.1%. The revenue increase was broad-based, with strong performances in appendage management (+21.5% to $45.5M) and pain management (+27.7% to $20.8M). These gains were partially offset by a 33.2% decline in minimally invasive ablation sales, which fell to $7.4M as physicians increasingly adopted pulsed field ablation (PFA) catheters, reducing hybrid procedures. Open ablation grew 16.3% to $35.6M, supported by the EnCompass clamp. Geographically, U.S. revenue rose 14.5% to $109.3M, while international revenue increased 22.0% (17.9% constant currency) to $25.0M.
Gross profit increased 16.8% to $101.3M, and gross margin expanded 59 basis points to 75.5%, driven by favorable product mix. Operating expenses grew 7.4% to $101.1M, with R&D up 9.2% (primarily personnel costs) and SG&A up 6.8% (headcount and variable compensation partially offset by lower consulting). As a result, operating income turned positive at $0.2M compared to a loss of $7.4M in Q3 2024. Net loss narrowed to $0.3M from $7.9M, reflecting improved operational leverage.
The appendage management segment remained the largest revenue contributor, growing 21.5% due to the AtriClip FLEX-Mini device. Pain management accelerated to 27.7% growth, benefiting from the cryoSPHERE MAX and the launch of the cryoXT cryoablation probe for amputation pain in Q3. Open ablation grew mid-teens, while the minimally invasive ablation segment continued to contract as the electrophysiology market shifts to PFA. International sales grew 22.1% year-to-date, driven by strength across all product lines.
Management highlighted strategic priorities including product innovation, clinical science, and physician training. The LeAAPS trial completed enrollment of 6,500 patients in July 2025, and the BoxX-NoAF trial enrolled its first patient in October 2025. The company expects continued growth from its core franchises, with new products like the cryoXT probe adding momentum. However, the decline in minimally invasive ablation and competitive pressures from PFA may persist. No specific financial guidance was provided, but the company noted its ABL facility of $125M with $61.9M drawn, providing liquidity for ongoing operations and investments.
AtriCure ended Q3 2025 with $147.9 million in cash and cash equivalents (including $137.9 million in money market funds), up from $122.7 million at year-end 2024. Total debt remained flat at $61.9 million under the asset-based revolving credit facility (ABL), which has $61.9 million in borrowing capacity remaining as of September 30, 2025. Shareholders' equity increased to $476.5 million from $461.0 million, driven by equity compensation and other comprehensive income. Inventories rose to $79.0 million from $75.3 million, reflecting higher raw materials and work-in-process.
Note 8 details significant commitments. The Cooperation Agreement for pulsed field ablation technology carries a maximum contingent payout of $28 million; $5 million was expensed in the first nine months of 2025, and an additional $1 million milestone was achieved in October 2025. The clinical trial management agreement for the LeAAPS trial incurred $12.6 million in payments year-to-date (up from $6.5 million in 2024). The agreement is cancellable, so no firm commitment is recorded. A non-cancellable cloud computing arrangement requires $3.6 million in total payments over seven years, starting March 2026.
No share repurchase program or dividend is disclosed. Capital expenditures totaled $7.4 million for the nine months, representing 1.9% of sales. Debt issuance or repayment was negligible; the ABL facility balance remained unchanged. The company entered a failed sale-and-leaseback transaction in August 2025, receiving $6.25 million in cash and recording a financing obligation with imputed interest at 6.76%.
The company operates as a single segment. Revenue by product type (Note 9) shows U.S. open ablation grew 16.3% YTD, appendage management rose 19.2%, and pain management increased 34.5%. International revenue grew 22.1%, led by Europe (25.7% growth). Minimally invasive ablation declined in the U.S. (-32.7% YTD) due to product transition.
Net loss of $13.2 million was more than offset by non-cash charges of $54.9 million (share-based compensation $33.4M, depreciation $9.1M, amortization $6.3M, acquired IPR&D $5.0M, and other), plus favorable working capital changes of $(4.4) million, resulting in operating cash flow of $37.3 million. The working capital drag was driven by increases in accounts receivable and inventories, partly offset by higher accrued liabilities. Capex of $7.4 million represented 19.8% of operating cash flow, indicating moderate reinvestment intensity. The company did not explicitly report free cash flow. Share repurchases of $10.9 million were for tax withholding on stock awards, not open-market buybacks. No dividends were paid. The significant improvement in operating cash flow from $6.4 million in the prior year reflects a smaller net loss and better working capital management.