PEN Q1 Earnings Call: U.S. Thrombectomy Drives Outperformance as International Headwinds Persist

May 12, 2025 at 03:27 AM EDT

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Medical device company Penumbra (NYSE: PEN) beat Wall Street’s revenue expectations in Q1 CY2025, with sales up 16.3% year on year to $324.1 million. The company expects the full year’s revenue to be around $1.35 billion, close to analysts’ estimates. Its non-GAAP profit of $0.83 per share was 24.4% above analysts’ consensus estimates.

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Penumbra (PEN) Q1 CY2025 Highlights:

Revenue: $324.1 million vs analyst estimates of $315.7 million (16.3% year-on-year growth, 2.7% beat)
Adjusted EPS: $0.83 vs analyst estimates of $0.67 (24.4% beat)
Adjusted EBITDA: $59.6 million vs analyst estimates of $42.32 million (18.4% margin, 40.8% beat)
The company reconfirmed its revenue guidance for the full year of $1.35 billion at the midpoint
Operating Margin: 12.4%, up from 4.3% in the same quarter last year
Free Cash Flow Margin: 11%, similar to the same quarter last year
Constant Currency Revenue rose 16.9% year on year (15.2% in the same quarter last year)
Market Capitalization: $11.51 billion

StockStory’s Take

Penumbra’s first quarter results were primarily driven by significant gains in its U.S. thrombectomy business, which benefited from continued adoption of its proprietary computer-assisted vacuum thrombectomy (CABT) technology and new product launches such as Lightning Bolt 12. CEO Adam Elsesser noted that, “our USVTE franchise once again led the business with total year-over-year growth of 42%,” supported by both volume and product innovation. International markets, particularly China, faced ongoing headwinds, with management removing China-related sales from 2025 forecasts due to macroeconomic pressures.

Looking ahead, management reaffirmed its full-year revenue guidance, citing a strong U.S. pipeline and upcoming product launches as key contributors. Elsesser emphasized continued investment in R&D and commercial teams to sustain growth, while CFO Maggie Yuen highlighted the company’s expectation for ongoing margin expansion. The company also addressed potential industry risks, including tariffs, noting that most manufacturing and sourcing occur in the U.S., which should limit exposure to trade-related disruptions.

Key Insights from Management’s Remarks

Penumbra’s management attributed Q1 performance to robust U.S. thrombectomy growth, innovation in product lines, and operational improvements, while also outlining steps to address international challenges.

U.S. Thrombectomy Momentum: The company’s CABT platform experienced high adoption rates, especially for venous thromboembolism (VTE) treatments, leading to a 25% year-over-year increase in U.S. thrombectomy revenue. Management cited both volume growth and physician conversions from traditional procedures as contributors.
Product Launches and Innovation: New products such as Lightning Bolt 12 in the VTE segment and Red 72 (“SilverLabel”) in neurovascular stroke were highlighted as outperforming expectations, with strong initial uptake among physicians. Early FDA clearance for Ruby XL peripheral coils was noted, with a market launch expected late Q2 or early Q3.
International Pressures: Revenue declines in China, due to macroeconomic factors, weighed on international results. Management removed $5 million of China-related sales from forecasts, while noting stable or improving trends in other international markets where CABT adoption is rising.
Operational Efficiencies: Gross margin improvement was credited to a better product mix and manufacturing productivity. Ongoing supply chain optimization and onshoring of materials were discussed as ways to mitigate external risks such as tariffs.
R&D and Commercial Investment: Despite a reduction in R&D expenses from winding down the immersive business, management stated ongoing commitment to new product development and expanding commercial reach, especially in underpenetrated segments like arterial and embolization.

Drivers of Future Performance

Management’s outlook for the rest of the year centers on continued U.S. thrombectomy leadership, product innovation, and margin improvement, while monitoring international uncertainties and operational investments.

Product Pipeline Execution: The successful launch and adoption of new products, including Ruby XL and Thunderbolt (pending FDA review), are expected to drive future growth and potentially expand market share in both peripheral and neurovascular segments.
Margin Expansion Initiatives: Management expects sequential gross margin improvement as high-value products gain share and manufacturing efficiencies are realized, though short-term margin may be flat due to Ruby XL launch costs.
International Headwinds: Persistent challenges in China may continue to dampen international growth in the near term, but management anticipates that CABT adoption in other regions will gradually offset these pressures.

Catalysts in Upcoming Quarters

In the coming quarters, the StockStory team will be watching (1) the commercial launch and physician uptake of Ruby XL and any regulatory developments for Thunderbolt, (2) whether U.S. thrombectomy growth continues to outpace market trends as new products gain traction, and (3) stabilization or improvement in international revenue outside China. Results from ongoing market access initiatives and operational margin trends will also be important markers for Penumbra’s execution.

Penumbra currently trades at a forward P/E ratio of 74.3×. In the wake of earnings, is it a buy or sell? Find out in our free research report.

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