Good afternoon. My name is Susan and I will be your conference operator today. At this time, I would like to welcome everyone to Penumbra's Third Quarter 2021 Conference Call. [Operator Instructions] Thank you. I would like to introduce Ms. Jee Hamlyn-Harris, Investor Relations for Penumbra. Ms. Hamlyn- Harris, you may begin your conference.

Thank you, operator. And thank you all for joining us on today's call to discuss Penumbra's earnings release for the third quarter of 2021. A copy of the press release and financial tables, which include the GAAP to non-GAAP reconciliation, can be viewed under the Investors tab on our company website at www.penumbrainc.com. During the course of this conference call, the company will make forward-looking statements pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995, including statements regarding our financial performance, commercialization, clinical trials, regulatory status, quality compliance and business trends. Actual results could differ materially from those stated or implied by our forward-looking statements due to certain risks and uncertainties, including those referenced to the 10-K for the year ended December 31, 2020 filed with the SEC. As a result, we caution you against placing undue reliance on these forward-looking statements and we encourage you to review our periodic filings with the SEC, including the 10-K previously mentioned for a more complete discussion of these factors and other risks that may affect our future results or the market price of our stock, including but not limited to the impact of the COVID-19 pandemic on our business, results of operations and financial conditions. Penumbra disclaims any duty to update or revise our forward-looking statements as a result of new information, future events, developments or otherwise. On this call, certain financial measures are presented on a non-GAAP basis. A reconciliation of GAAP to non-GAAP financial measures is provided in our posted press release. We anticipate the prepared comments on today's call will run approximately 18 minutes. Adam Elsesser, Penumbra's Chairman and CEO, will provide a business update; Maggie Yuen, our Chief Financial Officer, will then discuss our financial results for the third quarter; and Jason Mills, our Executive Vice President of Strategy, will discuss our updated 2021 guidance. With that, I would like to turn over the call to Adam Elsesser.

Thank you, Chief. Good afternoon, everybody. Thank you for joining Penumbra's third quarter 2021 conference call. Our total revenues for the third quarter were $190.1 million, a year-over-year increase of 25.8% as reported and 25.6% in constant currency and a 3.2% sequential increase from the prior quarter. For the third quarter of 2021, we recorded operating income of $8.8 million, or 4.6% of revenue, compared to an operating loss of $20.2 million or 13.3% of revenue during the same period last year. Against the backdrop of this spreading Delta variant particularly in the first part of the quarter, our team executed very well. Our vascular business achieved record results. And our neuro business nearly matched a record quarter as well. Our business was exceptionally strong in the United States, where our latest products in both vascular and neuro thrombectomy are experiencing strong adoption. Overall, our business accelerated throughout the quarter driven by the Red series of stroke catheters and continued strength in vascular thrombectomy. While our immobilization business also performed well, especially as the fall season progressed, I also want to acknowledge our physician customers and hospital staff, who against challenging circumstances, especially with COVID work particularly hard to take care of their patients. As a company, we think we are in the best position we've ever been to help more patients than ever before. As we look forward and the world emerges from this pandemic, the three key dynamics that have defined Penumbra, constant innovation, hiring the best people and execution once again to find our work in the third quarter and give us a lot of confidence that we can deliver strong durable growth for years to come. As it relates to hiring the best people we are adding remarkable people to the Penumbra team. In addition to…

Thank you, Adam. Today I will discuss the financial results for the third quarter 2021. Additional details will be contained within our quarterly reports on Form 10-Q. For the third quarter ended September 30, 2021, our total revenues were $190.1 million, an increase of 25.8% reported and 25.6% in constant currency compared to the third quarter of 2020 and sequential growth of 3.2% over the second quarter of 2021. Our geographic mix of sales in the quarter were 70.9% US and 29.1% International, US and International reported growth of 23% and 33.5% respectively compared to the same period in 2020. Moving to revenue by franchise; revenue from our vascular business grew to $105.5 million in the third quarter of 2021, an increase of 40.3% reported and constant currency compared to the same period last year. Compared to the prior quarter, revenue from our vascular business grew by 4.7% driven by strong performance in peripheral thrombectomy volume in the US. Revenue from our neuro business was $84.7 million in the third quarter of 2021, an increase of 11.5% reported and 11.1% in constant currency compared to the same period a year ago. With growth across neuro access and embolization, and from [Indiscernible] franchises. Gross margin in the third quarter was 63.1% compared to 60.2% in the same quarter last year, due to benefits from additional volume and stable product mix. We are pleased with our ability to increase our manufacturing capacity and expand our supply chain and manufacturing footprint in 2021 to support rapidly growing demand for all new product launches. In the coming months, we will continue to accelerate our investment in our Roseville manufacturing site, including hiring and training product builders, transferring multiple key manufacturing processes and improving the efficiency and productivity. This may continue to have short term…

Thank you, Maggie. With the update of our third quarter results, we are formally increasing our 2021 revenue guidance range to $735 million to $740 million, which would represent 31% to 32% growth over 2020 revenue of $560.4 million. This updated guidance compares to our previous 2021 guidance range of $720 million to $730 million given on our second quarter call in August, we see multiple drivers of growth going forward both near and long term. In the fourth quarter, we expect sequential growth compared to our record third quarter results driven predominantly by vascular thrombectomy across venous, PE, arterial and coronary further expansion of our peripheral embolization business and increasing contribution from our new RED series of catheters for stroke intervention. Overall, consistent with our approach to setting guidance in the past, our updated 2021 revenue guidance represents our current views on our markets, timing of new product launches and other relevant inputs. I will now turn the call back to Adam for closing remarks.

Thank you, Jason, Maggie and Qi. As we report the third quarter and we move through the fourth quarter, the number is well positioned to help more and more people in the months and years ahead. We are making investments to constantly innovate both in neuro and vascular as well as the newer area of immersive healthcare. We are hiring the best people in all parts of our business, and we continue to execute in our day to day work. These three elements have defined our success for many years. Finally, I want to acknowledge and thank everyone at Penumbra for doing so much and working so well together to design, manufacture and make available all of our products to physicians and patients even in these challenging times. Thank you for your attention on the call today and we'd like to open the call to questions. Operator, please go ahead.

[Operator Instructions] Our first question comes from the line of Larry Biegelsen from Wells Fargo.

Good afternoon. Thanks for taking the questions. Just let me start off on the guidance. Hey, you reported obviously a very nice quarter here compared to your historical seasonality, but the Q4 guidance at the midpoint implies lower sequential growth that we typically see from you guys. And it's only about 12% year-over-year growth. So what are you seeing that's leading to that conservatism? And how do we put that into context for 2022, the streets assuming about 17% year-over-year growth, and I just want to confirm you're still confident in the $1 billion in 2023. And I had a follow up.

Larry, it's a great question. Let me start with the last question, and then I'll let Jason take over with some of the specifics. The answer is we are definitely confident about our 2023 come in about a $1 billion. And I think if you look at how we've done this quarter, and the guidance going forward, it gets you there pretty quickly. So we have a lot of confidence. I think our commentary today shows that. I'll let Jason talk about this specific guidance. But no question we feel very confident about the future.

Yes, and just before we leave the $1 billion comment, I'll just add a little bit to what Adam said, as you might recall, Larry. At the time, we said that we actually said $1 billion plus and just to remind you that the plus referred specifically to our immersive healthcare business, that continues to be the way we look at that comment at this point in time as well. So and I appreciate your question about the guidance. And obviously the sequential increase in our business in the third quarter was quite strong. It was a strong performance, as we talked about across both neuro and vascular businesses, obviously, stronger sequentially, then a lot of folks and obviously representative of the strength of our products in our business. And so we're cognizant of that strong record growth. And we're also cognizant of the world and what others are saying about COVID. As we talked about, in our remarks, we saw pretty good growth throughout the quarter. And we expect that to continue into the fourth quarter, which is why we expect sequential growth to continue.

All right, thanks for that. And just for my follow up. So Adam, on the CHEETAH data, what do you think physicians will be focused on? How do you plan to leverage the data? And just, Adam, we didn't hear anything about Lightning. Is that still on track? Thanks for taking the questions.

Yes, well, first of all, I think we, I said a lot about Lightning, I think you meant THUNDERBOLT.

THUNDERBOLT, sorry. You're right.

If I'm not mistaken. I know the name, you are close. Let's talk first about CHEETAH, it's two days away as you know, being want to be very calm, respectful to the physicians who are presenting the data and the appropriate rules around that. I obviously am going to be there and look forward to talking about it with anyone after the presentation. And we can address that in a couple of days. But needless to say, there's a lot of data to go through. And we look forward to doing that. As it relates to THUNDERBOLT, I think you guys know me well enough to know. Last time I mentioned the name sort of publicly. We like to let our actions and the product speak for themselves. So it seemed appropriate this quarter, not to continue to have that conversation, but there is nothing and I mean nothing about that you should take as anything on the negative side by the fact that I didn't mention the name and I think you guys can interpret the fact that I didn't mention it in the public comments the way I meant it to be.

Our next question comes from the line of Bill Plovanic from Canaccord.

Hi, it's John on for Bill tonight. Thanks for taking our questions. Adam, thinking about the CHEETAH hit rate. Can you just talk about the overall opportunity in coronary and then how you balance that with your work in Ontario, DVC and PE? And across can you just talk about the call point overlap any possible synergies there?

Sure. So the way we've talked about that market, and I mentioned it on the prepared remarks of this call is really going after the patients that have really high clot burden, or thrombus burden, the patients that really need it the most. And that was what the CHEETAH trial was designed to study. That's what we'll report out. And that's really been the opportunity, that's a significant opportunity. We're only about 10% penetrated. And as we've said in the past that opportunity is a roughly the same size as the US stroke opportunity for the US patients in coronary. So it's not insignificant at all. And as I think you all know that the big technology changes, it changes the idea of using continuous at power aspiration, as opposed to some of the older technology. And when you look at some of the older studies, they really highlighted the need in those studies for innovation in technology to deal with those high thrombus patients. So that's the framework in which you can see and digest the data on Friday morning, in Orlando, as it relates to the call point. Obviously, that call point is interventional cardiology. I think all of you know interventional cardiologists do a significant number. Sometimes people estimate up to around 25% of the peripheral work. And so there's just an obvious synergy between those two products and really not one doesn't take away from the other. In fact, they work very, very synergistically and the teams have been focused on that for a while.

Thanks, look forward to the data, and then just as a follow up to on neuro as a recent COVID law, how do you think about appetite of engaging of legislators again, in first responders, so again, stroke patients, it's the right care setting?

Yes. So I really glad you asked that question. This is for the first time in a couple of years, given the pandemic I'm feeling and seeing I get some early signs that things are starting to reengage. I've spent a decent amount of time talking to our physicians out there, they're starting in the earliest phases to have the bandwidth and the time and the ability to go out into their local communities and start to work on the kind of local work that they had been doing in the past. But we also saw this quarter another state enact the state legislation that you were referring to North Carolina did that. And so I'm feeling pretty optimistic that as we move into this next phase of the pandemic, we're starting to see a little more momentum. And as you heard in my prepared remarks, our neuro team is really engaged. There's so much energy and momentum. You saw that in the sequential growth in the US, and it's a really, really exciting time to push the technology for the same time. We're coming out of a really difficult couple of years.

Our next question comes from the line of Robbie Marcus from JPMorgan.

Oh, great. Thanks for taking the questions and congrats on a great quarter. Maybe to start Adam, you spoke about a lot of different new product launches, Lightning sets and some of the RED products, you talked about China and some of the adoption there. How do we think about the impact it had to sales in the quarter and what you're expecting say over the next six to 12 months, also through coronary, you don't break out products or the different sub line items for those businesses. So how do we think about where we're seeing that the biggest incremental dollar growth?

Yes, no, it's a great question. Well, we do, obviously breakout neuro versus vascular. So you'll see the benefit of the RED series and future products I hope over the next six months to a year, pretty clearly in our neuro business. As it relates to the vascular business, and I said this in my prepared remarks, it's all working, we've saw really successful growth both on PE and venous and arterial as well as coronary, so we're lucky we have the ability to really positively impact patients on all four of those categories. I think it would be, it's unnecessary, to sort of break out which is more because they're all working in successful right now. And that's, I think, one of the really huge opportunities, as the field starts to really digest and except the idea of single session treatment, it's no longer just a thing that people sort of thought about philosophically, it's now becoming a lot more rooted in the viewpoint of physicians, because in some part because of the pandemic and the need to free up ICU beds, they're finding success, particularly with the Lightning series and PE, venous and arterial, and then and being exposed to cataracts in their daily practice, and with CHEETAH I think we'll see. But I think that can continue pretty dramatically. So we're, it's hard to break it down in a way to say, which is contributing more, because all of the team is focused on all of them. And all of it matters and all of its contributing. And that gives us I think, the confidence that you hear in our voice that we have a lot of growth to come.

And Robbie, just a follow up a little bit on that. Going back to some of our prepared remarks. Obviously, when folks look at our Lightning 7 and Lightning 12 products, those are speaking to arterial and venous to a large extent in transfer, and we did talk about double digit growth sequentially in both of those, obviously, we this quarter anniversary in the year ago quarter, which was pretty nearly a full quarter of the initial launch of Lightning 12. Just a couple of other things to just point out and remind we talked about the US stroke business were up 17% sequentially. That's obviously because of the receptivity of the RED series of catheters, and overall in the United States, peripheral thrombectomy being up 10% cuts across all four of those areas we talked about arterial, PE, venous and coronary.

Great, thanks for that. And maybe a quick follow up, it's been a while since we got some, you used to give out details and how many procedures you thought were happening in the US and outside the US, neuro thrombectomy markets, if you have any sense of maybe where the US and Europe is on track for procedures this year. And if there's any way to gauge how just the business performance in those markets have been, since the recall last year, would be really helpful. Thanks a lot.

Yes, I don't think it's fair to give out specific numbers, because they're a little harder to track during this phase. We'll certainly try to do that going forward as best we can. But to throw out numbers sort of without having the sort of confidence is a little bit harder. As you know, there are lots more players in the field and everything that makes it a touch more difficult. I will reiterate what I said. I do think the last almost two years, not quite a year and a half has been relatively, and first obviously it went down dramatically, the very beginning of the pandemic and sort of recovered. I do see and again, just purely anecdotal at this point. So I wouldn't want to be more aggressive than that. But I do see and hear optimism around growing the number of patients. And that's really started a month or two ago. And then I think North Carolina is just a good example of sort of the energy that's still out there in order to sort of do this work and drive those patients. So it's a good question. We'll try to do more to give you as much specifics, but I don't want to just throw out numbers, we want to be as accurate as possible.

All right. If I could squeeze in one quick one. China, I know that used to be all a predominantly a Medtronic market, any sense of the impact you're making there? Is it still real early days? Or how do we think about the impact you are seeing. Thanks.

Yes, I mean, look, China is large market and to quantify the impact to their business is hard. Because it's hard to know that from here, I will tell you from the conversations I've had, there's an awful lot of interest in moving that market to aspiration based technology, the physicians there have known about it for a while. They're excited to get the products that they can do that work, A68, the product that was more recently launched, and we're seeing some real success in those cases. So I think it again, very early days, significant opportunity. And as we've said in the past, where we're using technology there, that's a touch older than the technology we have here. So when you look at that between now and the future where we can continue to bring the most current stuff, I have a lot of confidence that we're going to continue to do quite well in the China market going forward.

Next question comes from the line of Bob Hopkins from Bank of America.

Thanks and good afternoon. Hey, guys and Maggie. I was wondering if we could dissect Q3 just a little bit more. You -- maybe I'll ask two things about the third quarter, you said that growth accelerated over the course of the quarter, I was just wondering if you could put a little more color around that in terms of how pronounced that was. And then secondly, about the third quarter, I was wondering if you could talk about just the impact of COVID? Because in some regards, it's an obvious, I mean, obviously, it's a negative because of disruption to hospitals. But then the nature of COVID is that it's pro thrombotic. And so there's also a positive aspect, potentially to your business, and one of your competitors calls that out on a quarterly basis. So just wondering if you could provide a little more color on Q3 around those two topics, the acceleration over the course of the quarter, and then how COVID impacted your numbers in terms of that headwind and tailwind perspective.

Yes and really good question. Let me take a shot at doing it as best we can, without just sort of guessing. So are -- the first part about the quarter, the quarter looks surprisingly normal in the trajectory of the quarter for the third quarter. And that's what we were trying to say most quarters do accelerate as the quarter goes, particularly in the third quarter where you started out in July. And this looked relatively normal. And that's what we wanted to point out. We knew COVID was there, we saw spikes, particularly in parts of the little later in the quarter, but it didn't have an impact in for us now. Why is that the case? Was that patients that would not otherwise have had thrombus, but had it because they got COVID. We've done a little bit of sort of anecdotal conversation with people on that. And we don't think that was the majority of or even a significant part of the growth. We think that we're really past that most of those patients are being treated earlier. And so they're not showing up with the kind of thrombus that needs to be removed in a mechanical setting. And a lot of it is really just new physicians being exposed to the technology over time going, it's time to switch either from another tool that they're using or from TPA and they're learning the benefit of the lightning bolt, again in on the arterial side and in PE, and particularly in venous as well. So I think it was really just sort of the normal growth of really, really about important product that does really, really good work for patients. And that's what gives us a lot of confidence that we'll see this continue for a while.

Okay, that's great. And then just one quick follow up on. You mentioned 10% sequential growth in vascular thrombectomy. And I know all the components of that seemed to be doing quite well between PE and venous and arterial and coronary. But what is the range around that 10% sequential? I mean, they're -- some of that -- one of those for growing 20 or 30 in some low single digit or are it more bunched up around 10? Just wanted to get a sense for the range of performance within the four franchises?

Yes, well, they're really three because it's hard to really know, with any kind of specificity within lightning 12 cases, whether lightning is being used in PE or in venous, albeit we have a feel that we're doing well in both of them, but I can't give you with any kind of certainty that the difference there, because it's same product. But I can tell you that all of them are doing well, I think we call that lightning specifically. It's newer, there's more work to be done so between that and cataracts, lightning did particularly well, again, we'll pick this conversation up after Friday, for going forward. But again, it's a good spot to be in, where all of it is contributing to our growth right now.

Yes, Bob, just to reiterate what I said a bit earlier, we did say that 10% growth was a US growth number sequentially. So just making sure you heard that and then we did also call it double digit growth for both Lighting 7 and 12 franchises respectively. And obviously, this is what Adam said, it's hard to tell DVT versus PE on that front. And then, just as a quick addition to your first question. You talked about the paradigm of whether it's pro thrombotic. And I think it -- we would just point you to a different paradigm, which is the paradigm of single session therapy is certainly resonating more and more. And obviously what goes along with that is in single session therapy, you're obviously not using up the resources from an intensive care unit perspective that you might otherwise. And that is a paradigm that we're seeing and probably continues.

Our next question comes from the line of Margaret Kaczor from William Blair.

Hi, Adam. This is Brendan on for Margaret. First wanted to just kind of focus within neuro still, it was really nice quarter, especially within the US for stroke. And I appreciate maybe you don't have specific numbers for market share. But is it a fair characterization to say 17% sequential growth is maybe above the market. And I guess what I'm trying to get at is after a somewhat period of maybe disruptions and a little bit of recall, do you kind of feel like with the RED series of catheters here, you're on the offensive now and you're taking share, as you're heading into next year?

Yes, absolutely.

Okay, simple enough.

Oh, I can tell you more. Yes, absolutely. And we're very excited about it. There's no question. We're in a great spot right now that the RED series is just doing amazingly well. And there's just not enough time in the day to get it out there as fast as we want. But this is not even a full quarter. And we're seeing a lot of success. So yes, it is a really, really, it's heartening. It's exciting. Morale is high and physicians are really reacting positively to it. The market did not likely grow 17% that is for sure.

Right. And Adam, maybe just in a broader sense, you had hinted at increased investments or just maybe a focus on market development efforts, maybe within vascular that's especially important given how large the market is. And there's maybe more for you to go after. Just curious if you could talk about what kind of market development efforts you're all investing in getting from 10% to 20%, penetration and beyond, maybe require some of that. So what are the things that you're investing in? And how important are they to can maybe the next like 12 months of growth?

Yes, it's a great question. So there's, again, similar to stroke where we spent time with communities and hospital systems, doing outreach to make sure patients were getting to the right place. Here, the outreach is a little different. But with folks and physicians who believe in single session and want to continue that there's local outreach to make sure that the referral patterns are in place, and that the patients are getting to see the physicians who are already sort of committed to treating them in a single session. So there's definitely work to be done and work we are engaging and doing to do that. The other area, of course, is in clinical work, where we're running some studies right now. But really importantly is the studies that we're starting to really think about and frame up that particularly in certain areas, like PE, you can think about really going after all of the other patients that aren't even getting TPA, but are just getting medical management and how one would attach those. We've talked about that in the past. But we've always wanted to be sure and learn a lot more. And I think as we continue here, we're starting to understand more and more the benefits of the product and technology, and starting those conversations. So again, lots ahead, pretty exciting time to bring this technology to more and more people.

And then if I could just ask one last one, the new hires internationally, we're interesting, clearly an area that you're investing in there anything that this may be signals to new strategies, is there -- have you reached a level where you kind of need to tweak how you're approaching those markets? And look at that mean for 2022 growth in the international markets? Thanks.

Yes, look, we're -- we've always, as a company, look to continue to hire the best people that we can possibly hire that know things we don't, bring huge expertise in areas that we can continue to learn from. And the two international hires Fred and John are just that two really extraordinary people who can just bring a ton of experience and bolster with their experience things we don't know as well. So yes, I do expect that we can continue to see growth in international in the years ahead. And it's exciting to happen. They're a great addition to the team.

Our next question comes from line up David [Indiscernible]

Hey, guys, thanks for taking the question. First, I guess on -- thrombectomy segment. There's been some, I guess, M&A in the space that we've seen with some kind of larger diversified medtech companies over the past couple months or so. And I guess how do you think about the competitive landscape shaping up here? I mean do you see a competitive advantage for some of these thrombectomy products to be within a portfolio alongside some other complementary products that address the vascular space? We're just like to get some sense on how you're thinking about the positioning for increased competition going forward.

Yes, look, I've been really, really happy to see particularly some of the big companies acknowledge that removing clot in the body in a mechanical thrombectomy tool, without TPA and other stuff is the way to go. That is a huge sort of statement to the whole field that we're on the right track. And I think people are starting to really pay attention to, this is the future. So I think it is all incredibly important and not unexpected that that would happen, in fact happening now, I think is perfect. As it relates to technology itself, we have a lot of confidence in our sort of computer aided lightening thrombectomy system; it works really, really well. We know the other technologies pretty well. And just as we're in really good shape. But we also as you know, don't ever stay still. And when you add in the innovation coming in this field that we are working on, we have a lot of confidence that as the market continues to switch from TPA drip to thrombectomy, we're going to be right where we want to be to capture a lot of those patients and do really, really well, for those patients.

Okay, that's helpful. I guess just following up on kind of some of the commentary that you talked about on market development within thrombectomy segment. I mean, it seems like there's been some competitors specifically within pulmonary embolism that have announced some head to head RCT trials. So I guess what, and I know, in the past that you've kind of comment on or expressed at least an interest in doing some kind of head to head studies within the venous segment. So I guess what's the strategy here? Or at least the overall thoughts behind potentially either having or not having some kind of head to head data? And if you don't have it or if you don't necessarily kind of invest in that segment? I mean, how do you think about kind of the dynamics between growing the market, as opposed to kind of gaining market share within that segment?

Yes, no, it's a really, really good question. And I'm glad you asked it. So I alluded to it just in my last answer, but maybe I'll be more clear. So PE which is really what you're talking about is today, the smallest segment of patients in the US, if we're talking to US numbers that are actually treated with some form of intervention, the majority being TPA, dripping TPA over a period of time. And it's only about 20,000, it's significant, but it's a relatively small group compared to the number of patients on that venous sort of DVT and arterial side that are intervened on, the real opportunity is to go after the much larger group of patients that aren't intervened on that are just given medical management, but could likely they have sub massive or massive piece, and could potentially benefit earlier, rather than waiting until those become quite acute. So that's the study that would open up the field that would grow the field, the studies that are going on now, no judgment on them, but they're really market sort of share type studies. And that's less interesting for us, given the sort of size of the growth that we're experiencing, and opportunity we think our product is going to have. So we're really focused on really kind of study, we haven't announced it, but we're as I alluded to, we're starting to understand enough to have those dialogues with some of the physician leaders as to what would really open up the market in a more significant way. The randomized studies that are currently going really are focused on the same relatively small pool of patients.

Next question comes from the line of Joanne Wuensch from Citi.

Good afternoon. Hi, and thanks for taking the question. So it looks like two questions. One is on gross margins. It looks like the new manufacturing site that you have is beginning to weigh on that. How do we think about that? Not just for the fourth quarter, but into next year?

Yes. Joanne thanks for the question. So as to our investment in Roseville site, impact to our margin. I mean, I want to -- in my remarks said that it is they're all intentional investment. I mean, we accelerate the investment quite a bit, all because of our projection of our long-term volume growth. So as with any investment in setting up manufacturing, say, the impact, the short term margin impact will be a little bit choppy. But it will continue to support margin expansion activities throughout the year. And I just want to also add that, at this point, we have not seen material impact to our margin because of macro supply chain and inflation area. But we believe that all these productivity investment is going to help us to offset some of the macro impact in the long term.

Okay, my second question has to do with real revenue, or revenue from the real system similar way. How do we -- people have this already in their models from what I can tell? I mean, based on what I can piece together, for next year ranges anywhere from $3 million to $26 million, which could be the difference between you meeting or beating consensus? Can you just sort of help us get our head around that? So that we're set up right, thanks.

Yes, so I don't -- we're not -- let me try to address it as best I can without going into guidance or numbers for 2022 because we're just not doing that on this call. And I want to be clear about that. The opportunities in immersive healthcare, we think are, as you know, from our Investor Day, really huge significant, it will take us time to do the work that we laid out in the Investor Day. The work is a number of things, we have to continue to work on the platform itself and doing the work to build that capacity so that we can host and have developers working with us in terms of content, we also have to do the work to provide a viable business by getting a pretty significant install base. All of that is in the earliest stages of doing the work. So whether or not the revenue is significant, we'll give you a decent amount of guidance, when we start talking about our 2022 guidance, but the goal is to sort of lay that out do that work, not chase the sort of short term revenue next year or as we sort of do this, that is important. That being said, we have a lot of excitement, because after Investor Day, where then sort of a lot of public and we can start to talk about it. We've had a lot of conversations with healthcare community who would be in effect, participating as buying this and utilizing this with their patients, with residents and so on. And I got to tell you that, as I said in my prepared remarks, the interest, excitement, the need to have one company, trusted company, in healthcare, provide this, where it's all clear, it's all contained that data secure. It's a sort of a proper use of this great technology. That level of interest frankly is I won't say it's surprisingly, I knew there, but it's really heartening to see that it's coming after those discuss that sort of public discussion. So stay tuned. We'll do our best to give you specific numbers as best we can in the future, but I think we're well on our way here. There are no further questions at this time. Miss Hamlyn-Harris, I turned a call back over to you.

Thank you, operator. On behalf of our management team, thank you all again for joining us today and for your interest in Penumbra. We look forward to updating you on our fourth quarter calls.

This concludes today's conference call. You may now disconnect.