Greetings, and welcome to the CVRx Q4 2025 Earnings Call. [Operator Instructions] As a reminder, this conference is being recorded. It's now my pleasure to introduce Mike Vallie of ICR. Please go ahead.

Good afternoon. Thank you for joining us today for CVRx's Fourth Quarter and Full Year 2025 Earnings Conference Call. Joining me on today's call are the company's President and Chief Executive Officer, Kevin Hykes; and Chief Financial Officer, Jared Oasheim. The remarks today will contain forward-looking statements, including statements about financial guidance. These statements are based on plans and expectations as of today, which may change over time. In addition, actual results could differ materially due to a number of risks and uncertainties, including those identified in the earnings release issued prior to this call and in the company's SEC filings. I would now like to turn the call over to CVRx's President and Chief Executive Officer, Kevin Hykes.

Thanks, Mike. Good afternoon, and thank you for joining us for our fourth quarter and full year 2025 earnings call. We delivered fourth quarter revenue of $16 million and full year revenue of $56.7 million, representing growth of 4% and 10%, respectively. 2025 was a year of important and necessary investment in our commercial foundation as we strengthened our sales organization, refined our go-to-market approach and advanced critical initiatives that position us for growth ahead. As we reflect on the year, it's important to remember what drives our work. Heart failure affects 6.7 million Americans, many of whom remain symptomatic despite optimal medical therapy. These patients, often referred to as the walking wounded by the heart failure community, suffer with significantly diminished quality of life, including limited mobility, chronic fatigue and the inability to perform basic daily activities. While guideline-directed medical therapy has demonstrated survival benefits when taken compliantly, it does very little to improve how patients actually feel on a day-to-day basis. In fact, multiple studies in this population have consistently shown that these patients would trade longevity for better quality of life. They don't want to simply live longer, they want to live better to play with their grandchildren, to walk their dog and to maintain their independence. Barostim addresses this critical unmet need. Unlike medications that primarily target survival, Barostim demonstrably improves exercise capacity and quality of life, giving patients back the ability to engage in the activities that matter most to them. When we talk about our market opportunity, it's important to consider our indicated population, not just in terms of the annual incidents, but also the prevalence pool. While approximately 76,000 patients are newly diagnosed each year and enter our indication, heart failure is a chronic disease state. Patients are not only eligible for Barostim…

Thanks, Kevin. Unless otherwise stated, year-over-year comparisons are for the 3 months ended December 31, 2025, compared to the 3 months ended December 31, 2024. In the fourth quarter, total revenue generated was $16 million, an increase of $0.7 million or 4%. Revenue generated in the U.S. was $14.9 million, an increase of $0.6 million or 4%. Revenue units in the U.S. totaled 478 and 460 for the 3 months ended December 31, 2025 and 2024, respectively. The increase was primarily driven by continued growth because of the expansion into new sales territories and new accounts as well as increased physician and patient awareness of Barostim. We ended the year with a total of 252 active implanting centers as compared to 223 at the end of 2024 and 250 as of September 30, 2025. We had 53 sales territories in the U.S. at the end of the year compared to 48 at the end of 2024 and 50 on September 30, 2025. Revenue generated in Europe was $1.1 million, an increase of $0.1 million or 10%. Total revenue units in Europe increased to 49 from 41 in the prior-year period. The number of sales territories in Europe remained consistent at 5 for the 3 months ended December 31, 2025. Gross profit was $13.8 million for the 3 months ended December 31, 2025, an increase of $1.1 million or 8%. Gross margin increased to 86% compared to 83% a year ago. Gross margin was higher due to an increase in the average selling price and a decrease in the cost per unit, primarily due to an increase in manufacturing efficiencies. R&D expenses increased $0.2 million or 7% to $3 million compared to the prior-year period. This change was primarily driven by a $0.3 million increase in compensation expenses, mainly as a…

Thank you, Jared. As we look ahead, we have several catalysts in place that we believe will drive improved performance. The Category 1 CPT codes represent the culmination of years of work on the reimbursement front, and we expect to see the benefits build throughout the year as prior authorization processes adapt to the new coding structure. Our sales organization is increasingly experienced and productive with our transformation now largely behind us. Finally, the initiation of the BENEFIT-HF trial represents one of the most significant developments in our company's history. While this trial won't have material impact on our 2026 revenue results, it will create significant visibility, credibility and goodwill in the heart failure community. On a long-term basis, if successful, BENEFIT-HF positions us for meaningful long-term growth and will roughly triple our addressable market. We remain focused on our core mission to positively impact the standard of care for heart failure and address a significant unmet need for hundreds of thousands of patients. We're confident in our ability to execute against that mission in the year ahead and to reach significantly more patients in the years to come. Now I'd like to open the line for questions. Operator?

[Operator Instructions] The first question comes from the line of John Young with Canaccord Genuity.

Kevin, congratulations on the strong end to the year. First, on BENEFIT-HF, on the strategy, can you talk about the initial sites? Will these be new or existing commercial sites? And what's the overlap in the current indication to? Will there be any revenue generation from the cases?

Sure. I'll take that one, John. I appreciate the question. So there -- we're early in the recruitment of centers. As we suggested, there'll be about 150 centers in the U.S., with a handful in Germany. We're approaching these centers on the basis of their interest in the therapy and their impact within the heart failure community. So there is a mix of centers that are already using Barostim in today's indicated population and some that have not yet begun commercial implantation. And so I presume as we proceed through the site activation process, we will have a blend of centers even as we reach 150, but a significant number that have some experience already commercially with the therapy. Do you want to handle the revenue question, Jared?

Sure. John, yes. So right now, the trial design is set up where we're expecting 2,500 randomizations. It's set up where 2/3 of them will be randomized to the device arm and would require an implant. And each one of those units, we are expecting to be reimbursed by Medicare or Medicare Advantage plans for hospitals. So we would be selling those devices. So in total, we would be selling somewhere around 1,600 or 1,700 devices as a result of this trial.

Okay. That's helpful. And then just the growth of active accounts in Q4, the sequential growth was a bit low. I'm sure it's reflective of the sales strategy of going deep, though. But how should we expect that to trend through 2026?

Yes. Great question. Yes. And we've always pointed this out, it is a net basis, right? So we added more than the 2, but we also sunset quite a few accounts here in the fourth. As we go into 2026, the guidance is still assuming that we're going to be adding around 3 active territories on a quarterly basis. And as you know, John, our expectation is each one of those territories would be managing between 3 to 5 active implanting centers. So based on that growth alone, we're continuing to expect to be adding high single-digit account adds on a net basis each quarter in 2026.

The next question comes from the line of Brandon Vazquez with William Blair.

Max on for Brandon. Kevin, just on BENEFIT-HF, just to double down on it, you gave some good color in your prepared remarks, but I was just curious, do you guys see any scenario where some of the chatter around the trial can actually be a tailwind for the core business while the trial is going on?

Yes. Thanks, Max. I think that's a good question. The short answer is yes. While we don't expect significant revenue contribution from trial sites in this next year, there certainly will be a goodwill effect and a credibility effect from the trial. This is, as we've said, the largest therapeutic device trial ever conducted in heart failure. We believe it's a landmark trial on that basis. It's a signal that we believe and have great confidence in this therapy. And I think we're starting to see some of that already. Positive feedback from the community, they're pleased at the scientific rigor and the scale of this trial, and they're excited to be part of it. So the short answer is yes. From a goodwill standpoint, absolutely.

That's helpful. And then I know we're only, call it, 1.5 months into the year, but Category 1 code went into effect January 1. And I was just wondering if you guys could share any anecdotal examples you've heard thus far on how that's helped lower barriers to treatment and maybe how you see that tailwind building throughout the year?

Sure. Thanks, Max. Yes, I would say we are still very much in transition mode, but it is progressing as we had expected. Right now, our focus is really on making sure that those codes are updated with each of the payers, resubmitting prior auths that were in process in late '25 that were sort of now caught in the gap. So resubmitting them with the new codes and ensuring that all new submissions are using the new code. So it will take us some number of quarters likely to get through this transition, but we are, in fact, seeing payers who have historically rejected 100% of our prior auths now beginning to approve them. We've also seen some of the Medicare Advantage payers approving at a more -- at a higher rate and more quickly than they have historically. So early days, but certainly some positive signals.

The next question comes from the line of Matthew O'Brien with Piper Sandler.

This is Anna on for Matt. I guess I just wanted to ask on the guide sort of high level. I know you've guided to 11% to 18% top line growth. That's an acceleration from what we saw this year. So I was just wondering what gives you the confidence and what's contemplated in the low end and the high end of the guide?

Yes. I appreciate that question. So I think as we look back to 2025, we did go through a bit of a reset after the first quarter, understanding that we had to cut a little bit deeper than initially anticipated within the sales organization. After that reset was done in the first quarter of 2025, we've seen pretty nice sequential growth from Q1 all the way through Q4 as we've continued to watch those new reps that we hired in 2024 and 2025 get further up the productivity curve. Now we do expect a bit of a seasonal dip from Q4 to Q1, as reflected in our guidance. But after that seasonal dip going from Q4 to Q1, we do expect to see that return to sequential growth throughout the rest of the year. So it's what we're seeing within the sales reps and their productivity to date that is giving us the confidence to be able to see a reacceleration of growth in 2026.

The next question comes from the line of Robbie Marcus with JPMorgan.

This is Lily on for Robbie. There's been a lot of focus on building out and getting the sales force to be more efficient. So can you talk a bit more about what you've been seeing lately in getting reps up the productivity curve? And how we should be thinking about the pace of improvement over the course of 2026?

Yes. Happy to dive in a little bit deeper on that one, Lily. So throughout 2025, we spent the first quarter making sure we had the right team members in place, maybe getting a few more of them hired in during the second and third quarter of the year. We've continued to see those reps go through the onboarding process, the training process and more of them reaching the activation state, seeing the total number of active territories grow to 53 by the end of the year. We also saw the number of revenue units per territory continuing to increase as we went throughout 2025. And I think we've mentioned some of the metrics at the account utilization level, but we are seeing more of our accounts achieving that point of 1 implant a month here in the fourth quarter. And so as we get more and more of those reps up that productivity curve, the expectation is they're going to be working on those workflows at those centers to build those flywheels to see more centers treating 1 a month. And so I think it's all of that positive momentum we saw throughout 2025 that gives us confidence to be able to continue to see growth in sales productivity as we go into '26.

Great. That's helpful. And then just as a follow-up, you've had a few nice quarters of gross margin in the 86%-plus range. I see the guidance for 84% to 86% for 2026. Is there any reason this should go backwards? If you could highlight some of the key drivers we should be keeping in mind for gross margin this year, that would be helpful.

Yes. I would say we were really happy with the results we saw in gross margin in 2025, both from the price standpoint and also the cost per unit standpoint. So in '25, we exceeded expectations on ASPs in the U.S. getting north of a $31,000 ASP. I think, as we think about 2026, we don't want to get over our skis and start setting that as the expectation. So in our base case, in the guide, we're setting the expectation on the U.S. side of the business for ASPs of around $31,000. On the cost side, again, we continue to see manufacturing efficiencies throughout the year, driving that cost per unit down. We've also understand that we have significant capacity at our manufacturing facility here in Minnesota to produce more and more units. So there is an opportunity to see that cost per unit come down further as we continue to produce more units. However, we're not baking that into the initial guide here for 2026.

The next question comes from the line of Frank Takkinen with Lake Street Capital Markets.

I was going to start with one more on the BENEFIT trial. I'm just curious on kind of how to think about how you expect this cohort of patients to react to the technology. And I think we've talked about this before and just making sure you get to patients prior to that disease state advancing to a more severe state. And if you're getting to them earlier, are you seeing a more durable response? Is that the expectation? Maybe it's less on absolute terms, but it's getting them closer to kind of pre-disease state. Just curious if you're treating some of these earlier-stage patients, what your guys' expectation would look like?

Sure. Thanks, Frank. I'll try to answer that. The HFmrEF population, those are patients between 35 and 50 ejection fraction, have not been widely studied historically. We have a decent sense of the event rates in that group, which you'd expect to be a little bit lower than the event rates in the sicker 35 below that the proper HFrEF population. But it is very much the same disease. Unlike HFpEF, which is a different disease, both HFmrEF and HFrEF are neurohormonal disorders. It's the same disease with different degrees of severity. So we expect that they will respond to Barostim in a very similar fashion that the HFrEF patients do. Beyond that, obviously, that's why we're running the trial. It's a large trial because the event rates in that mrEF population are lower. So statistically, you need to study more patients to generate more events. But we would expect to see very similar responses from that population, whether it's on the primary endpoint of survival and of heart failure hospitalization or the secondary endpoints that relate to quality of life and other kind of important clinical consideration. So too early to tell, but we are confident that we have defined the trial in such a way and empowered it in such a way that we can prove a difference in both of those populations, whether we catch them earlier, slightly earlier in their disease or when they're properly below 35 as we do today. I hope that helped, a little complicated.

No, that's perfect. I appreciate it. And then just for my follow-up, I was going to ask maybe once more on kind of the center activation and strategy to go deeper. If you were to think about the guide, low end versus high end, what's more important? Is it the activation of the right centers? Or is it more a same-store sales proposition?

Yes. I appreciate that question, Frank. Yes, I mean, our goal here is to drive deeper adoption. And so that is priority #1 for all of our sales reps, is to make sure you've got the right accounts activated first; but then second, to really start to build that network effect around those centers to make sure all the referral physicians and APPs know about this therapy and what types of patients it will help. And so it's all about driving deeper adoption and seeing that same-store sales number increase in 2026. In addition to that, we will be adding new territories, as I mentioned, so about 3 or so per quarter. And each of those new territories are also going to be activating centers. So we will still see new center adds throughout 2026, but we believe the majority of the growth is going to come from deeper adoption at the existing centers.

And the final question will come from the line of Chase Knickerbocker with Craig-Hallum Capital Group.

Kevin, I just want to start on some of those top accounts that you mentioned that exited the year at a pretty stark run rate from a device implant perspective. I mean what do they have in common? I think particularly kind of around the stakeholders of those accounts, I'd be interested to hear as far as kind of what resonated with them that made them such high-volume adopters fairly quickly and then maybe kind of the characteristics and the approach of the salesperson as well. That would be helpful.

Sure. Thanks, Chase. I presume you're referring to a comment about the 20% -- our top 20% of accounts are doing basically 19 units per year or about 1.5 per month. Yes. So it's a great question, and it's exactly what has -- the insights from those accounts are what led us to refine and optimize our go-to-market strategy. And what we see in those accounts are places where you have not just a single champion, but in fact, a supportive CEO or CFO that understands the profitability. You have multiple heart failure specialists that understand which patients can benefit, you've got a pool of cardiologists in the community who are screening patients and sending them in for evaluation. And you've got redundancy at the surgeon level so that you can continue to consistently implant, even when a surgeon goes on vacation or sabbatical or changes roles, et cetera. So it's sort of as simple as that. That's what we think good looks like. And that's exactly how we're now incentivizing our sales team. We're paying them a premium for units that come from centers that have those very characteristics because we know when you have that sort of redundancy and you have that repeat utilization, that's sort of the flywheel that starts to turn. And that's what causes them to continue treating patients on their own, whether or not you remind them or not. So that's really the fundamental insights that drove our revised go-to-market strategy.

If you kind of take that cohort, Kevin, that 20%, what's kind of the age of those accounts? Are there some that are fairly short and maybe you kind of initiated them in '25 or late '24? Or are those some of your accounts that have been implanting Barostim for the longest? It's probably across the board, but just some thoughts there as far as kind of how long it takes some of these accounts to get there.

Yes. And what I can say definitively, it takes more than 6 months, right, because that sort of scenario that I described takes time to establish. But I think beyond that, so there are none that are brand new, but there are a pretty wide spectrum, some of whom have been with us in developing those -- that resilience and that flywheel for a number of years. There are some that are as new as 9 months or even 12 months. So again, that -- some of that stems from us learning more about the kinds of centers that can be successful and being more intentional and disciplined about where we engage, right? That network I described does you no good if the baseline characteristics in the account are suboptimal. So you want to start with the right account, then you want to establish that network and then you want to get the flywheel turning. So it's a little bit of everything, thankfully.

Got it. Maybe just one on benefit for me. What portion of the enrollment do you expect to be OUS? And we shouldn't be thinking that there's revenue recognition there. I mean that's something where it will just be expense. I mean just kind of talk me through how much you expect OUS and then how you have to treat it.

That's a great question. It will be a very, very small number of centers for a number of the reasons you pointed out and some others. So this will very much be a U.S.-focused trial, a Medicare-focused trial, again, with the benefit of the Category B reimbursement sitting behind it.

So a very small number. And then just last, Jared, any thoughts on kind of path to profitability? Obviously, we've got some net expense from the trial. Just overall thoughts there. And if at some point, there is a decision to eventually kind of slow down the territory adds? Or just kind of help me think about how you expect to manage the business to profitability over the medium term?

Yes. I appreciate the question. So right now, we had $75 million, $76 million at the end of the year. We noted in our pre-announcement in early January that we added an additional $10 million from the debt amendment, so up to $86 million to start 2026. With the guide, we're expecting to burn somewhere around $30 million to $35 million in 2026. But what we do know is we have at least 2 years of cash on the balance sheet today. We also have access to an additional $40 million of nondilutive capital through the debt amendment. And those are triggered based on us hitting certain revenue milestones over the next couple of years. So we have access to plenty of capital today. There is no need to go out and raise additional capital at this point in time. And I also know there were some questions around the filing of the shelf and the ATM in late '25, early '26, and that was purely good corporate housekeeping. Our old shelf had expired in the fall of '25, so we needed to refresh the shelf and put a new one up this year. So with $86 million in the bank, 2-plus years of cash available to us, there's no need to go out and raise any additional capital at this point. As to the path to profitability, it's all about generating leverage, right? We hired a whole bunch of really good reps. It's now pushing them up that productivity curve. to drive a faster growth rate on the top line than we're seeing on the SG&A line. And that is our expectation is that we're going to continue to drive them up that productivity curve and continue to add new heads to see that growth rate reaccelerate in the coming years. But with $86 million of cash, it's not a concern for us.

This concludes the question-and-answer session. I would like to turn the call back over to Kevin Hykes for closing remarks.

Thank you, operator, and thanks, everyone, for joining today. We appreciate your continued support and look forward to updating you on our progress next quarter.

Thanks. This concludes today's conference. You may disconnect your lines at this time. Enjoy the rest of your day.