Good afternoon. My name is Adam and I will be your conference operator today. At this time, I would like to welcome everyone to Penumbra’s Third Quarter 2023 Conference Call. [Operator Instructions] Thank you. I’d 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 2023. A copy of the press release and financial tables, which includes a 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 in our 10-K for the year ended December 31, 2022 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. 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. The corresponding GAAP measures and a reconciliation of GAAP to non-GAAP financial measures are provided in our press release. 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 2023 guidance. With that, I would like to turn over the call to Adam Elsesser.

Thank you, Jee. Good afternoon. Thank you for joining Penumbra’s third quarter 2023 conference call. Our total revenues for the third quarter were $270.9 million, a year-over-year increase of 26.8% as reported and 25.9% on a constant currency basis. Our worldwide thrombectomy business achieved record revenue of $179.1 million, growing 38% on a year-over-year basis. Our worldwide embolization and other revenue was $91.9 million, increasing 9.5% over the same period a year ago. Our global vascular thrombectomy business led our growth increasing 56.9% year-over-year, while neurothrombectomy grew 10.3% year-over-year. We had another very strong quarter in the United States as revenue of $194.8 million grew 30.9% year-over-year, led by total U.S. thrombectomy, which increased 42.1% year-over-year. Our strong growth in thrombectomy this quarter, during which we did not have new product launches as we’ve had in the first two quarters of the year shows how demand is building for our computer-assisted vacuum thrombectomy and stroke products. In fact, we expect our total thrombectomy growth both in the United States and globally to accelerate slightly in the fourth quarter on a year-over-year basis and we expect growth in embolization and access to be similar to the third quarter. We expanded our gross margins in the third quarter to 65.6%. Strong revenue growth and gross margin expansion coupled with disciplined operating investments and commercial execution made the third quarter the most profitable quarter in our company’s history. Non-GAAP operating income was a record $33.2 million representing 12.3% of revenue. We posted record adjusted EBITDA of $51.5 million or 19% of total revenue compared to $14.6 million last quarter and 8.9% in the third quarter last year. We also grew our operating cash balance by $27.8 million sequentially. Looking forward, we expect to deliver strong revenue growth, gross margin expansion, increasing profit margins…

Thank you, Adam. Good afternoon, everyone. Today, I will discuss the financial results for the third quarter of 2023. Financial results on this call for revenue and gross margin on a GAAP basis, while operating expenses and operating income on a non-GAAP basis. The corresponding GAAP measures and a reconciliation of GAAP to non-GAAP financial measures are provided in our posted press release. For the third quarter ended September 30, 2023, our total revenues were $270.9 million, an increase of 26.8% reported and 25.9% in constant currency compared to the third quarter of 2022. Our geographic mix of sales in the quarter was 71.9% U.S. and 28.1% international. U.S. reported growth of 30.9%, and our international regions increased 17.4% reported and 14.3% in constant currency. The sequential growth of 3.6% was primarily driven by an increase in our global thrombectomy business of $16.6 million or 10.2%, offset by a decline in our embolization and other businesses of $7.1 million or 7.2%, primarily driven by EMEA seasonality, timing of immersive healthcare milestones and our distributor customer’s mix. Moving to revenue by franchise. Revenue from our vascular business grew to $171.4 million in the third quarter of 2023, an increase of 38.9% reported and 38.5% in constant currency compared to the same period last year, driven by 50.2% year-over-year increase in U.S. vascular trombectomy. Revenue from our neuro business was $99.5 million in the third quarter of 2023, an increase of 10.2% reported and 8.5% in constant currency compared to the same period a year ago, driven by strong performances in Europe and U.S. Turning to gross margin. Gross margin for the third quarter of 2023 is 65.6%, compared to 63.3% for the third quarter of 2022 and 63.8% last quarter. The sequential improvement is driven by higher thrombectomy product mix, improvement…

Thank you, Maggie, and good afternoon, everyone. For the fourth quarter of 2023, we expect total company revenue growth to accelerate to 28% to 31% year-over-year, which correlates to the midpoint of our annual guidance range of $1.050 billion to $1.070 billion for full year 2023. We expect global thrombectomy revenue growth to accelerate sequentially from the third quarter and expect our geographic mix of sales between the United States and international markets to be similar to the third quarter levels. I will now turn the call back to Adam for closing remarks.

Thank you, Jason, Maggie and Jee. As CAVT becomes recognized as the future of thrombectomy, our team appreciates the serious and important work ahead. I outlined the initial phase of that work during my earlier remarks. With this opportunity in front of us, we are all in as we proudly accept the challenge to meaningfully change the number of people who benefit from our innovative technology. Thank you. And thank you, operator. We can now open the call to questions.

[Operator Instructions] And your first question comes from Robbie Marcus with JPMorgan. Your line is open.

Hi, this is actually Lilly, I’m on for Robbie. Thanks for taking the question. Two quick ones, I’ll ask them together. Why not raise the guide by at least to be – is that just conservatism? Or are there other dynamics we should be keeping in mind for the rest of the year? And related to that, reiterating the guide implies a softer fourth quarter than what the street was thinking. So what’s the driver of that? And how should we be thinking about the fourth quarter? Thanks so much.

Yes. Thank you for the question. I’ll take that. This is Jason and then Adam can jump in if he likes. First, I would say the expectation that our business will accelerate to the fastest pace of the year, 28% to 31% year-over-year growth is really a positive reflection of the momentum we have right now. This guidance takes into account many things, the progress and timing with the new customers getting approvals and placing their first orders, timing of the new products and market development initiatives. But let me give you just a little bit more context on our guidance. Our thrombectomy business worldwide, as you saw, grew 38% in the third quarter. Our guidance anticipates global thrombectomy to accelerate to 40% plus growth in the fourth quarter. It also anticipates our U.S. thrombectomy business will grow even faster than this in the high 40% range. That said, while our embolization and access businesses are market-leading franchises, they are in more established markets. So we expect growth here will be in the high single digits, which is similar to the third quarter. As we move forward, more and more emphasis, as you can probably hear across the organization will be on thrombectomy, where markets are underpenetrated and where we have a platform technology with CAVT that we believe will be the future standard. So overall, we’re excited about where we’re going.

The next question comes from the line of Larry Biegelsen with Wells Fargo. Your line is open.

Hi, it’s Lei calling in for Larry. Thanks for taking the question. One for Adam. Adam, recently talked about 20% sales growth outlook for 2024. Can you just comment on your confidence on that outlook? And what are the key drivers on the back of your strong Q3 report? And if I may have a follow-up on that, you previously expected to exit this year with mid-60% gross margin, low double-digit operating margin. You obviously already got there in Q3. So if you can comment on how to think about that exiting the year and into 2024. Thank you.

Yes. Thank you, Lei. Let me start with the ‘24 guidance. We are very confident in what I said at your conference as at least 20%. Our plan is to give formal guidance on our fourth quarter call, which is our typical pattern. And at that point, we can give the nuance around that specific guidance. But obviously, if you hear what we’re saying about the business and how it’s setting up, we’re obviously very confident in that at least 20% number. As it relates to the profitability margin, I will comment briefly, and then Maggie can comment more specifically. It is really important for us to run a profitable business and to increase that profitability that has been something we’ve prided ourselves in a long time. And now more than ever, I think the world is agreeing with that. The profitability is a very important measure. You heard it in the prepared remarks, we’re setting ourselves up to run this to be more and more profitable. But Maggie can be more specific.

Yes. I feel really good about our profitability trends. I think more important to note is we are reaching a sustainable level of profitability, both in gross margin and overall operating margin. We will continue to invest in investment in a number of initiatives. But as you mentioned earlier, with the trend of increasing thrombectomy product mix, we continue to scale and leverage the overhead. We expect to continue to see gross margin and overall margin expansion moving forward for next quarter and in the longer term. Thank you.

Your next question comes from the line of Margaret Kaiser from William Blair. Your line is open.

Hi, everyone. This is [indiscernible] on for Margaret. Thanks for taking the questions. So kind of another one in terms of the Q4 guidance. Obviously, you mentioned that 30% plus heading into the quarter and the 28% to 31% guidance today. So – just wondering if anything has changed or maybe that implies any rate of seasonality. And then just what that assumes in terms of the rate of VAC approvals in Q4 relative to last quarter?

Yes. Well, thank you for the question. Nothing has changed. As you can hear, at the beginning of the year, we talked about our guidance being $1 billion. So it’s come up quite a bit through the year. And – last quarter, we gave an accurate assessment of how we thought the second half of the year was going to play out, and nothing has changed from that. If anything, I think you’ve seen the growth and we started to talk a little bit more, I think give you a little bit more specifics around our business from a thrombectomy versus embolization perspective, which gives you a sense, I think, the strength is coming perhaps even more from the thrombectomy business globally. And then obviously, in the United States, it’s even stronger. So if anything, I think that’s the change in disclosure that shows the strength in the business and the momentum.

Awesome. Very helpful. And then just as a follow-up in terms of the progress on the THUNDER trial. So I know I mentioned last quarter kind of the requirement to change the safety endpoint there and adding approximately 75 more patients. Noticed that there were a bit more patients added to the clinical trials website. So just wondering if there were any additional modifications to the trial design there or – just maybe if you could speak to Thunderbolts performance on some of the patients enrolled thus far. Thanks.

Yes. No, it’s a great question, and thank you for this. So the trial number that we’re generally in the same ballpark that I was talking to. It’s now 275 patients. if I’m not mistaken. And we updated clinicaltrials.gov with the timing, which is generally consistent with what I had expected. The most – and we will just – we’re on that trial. We’re seeing some nice enrollment right now. We’re pretty excited about what we’re seeing. I will tell you that – the most important thing is we’re very happy with the performance of the product, and that is obviously the best part of it. But we also have validation separate from that product, as you know. We have Lightning Bolt, and we have done a huge number of cases with that similar technology, different catheter side. And as everyone at [indiscernible] know, performing incredibly well. So again, we can’t wait to bring that to the market, but we have to run the trial and we can only do so much to speed up the enrollment, but so far so good. And as we’ve said, we’re going to be bringing this technology, the CAVT technology to every part of the body head to toe, so that we can modernize the thrombus removal and really to start taking a huge dent out of the number of patients that are suffering. And so Thunderbolt is going to be a big part of that, and our optimism is as strong as ever.

Thank you. Thanks, again and congrats on a quarter.

Thank you.

Your next question comes from the line of Bill Plovanic. Your line is open.

Great, thanks. Good evening. And thanks for taking my questions. First up is just, Maggie, can you help me understand, so phenomenal quarter on the operating margin at 12.3%. How should we think about Q4. It sounds like that’s going to continue to go up in Q4 and sequentially as we go into 2024. And then secondly, I don’t know if this, especially with your gross margin going up, but you also mentioned just on the sales force changes. I forget how you phrased it, but basically, you’re going to make some changes. I wonder if you could give us some granularity on kind of what you’re doing. And is that new different sales force for different indications? Is that splitting territories? Just anything you’re willing to share to help us out on that. Thanks so much.

Okay. Thanks, Bill. Maybe I’ll touch on the margin first, and then Adam can talk about – address the sales force. I think overall, as I mentioned earlier, the gross margin trend that we see already a few quarter sequential improvement is primarily driven by continued thrombectomy product mix, and we definitely see that trend to continue. I also mentioned overall, with continued leveraging our overall capacity. I think this is also the time that we may accelerate some of the investment in our manufacturing area. So gross margins definitely are reaching a stabilized level, but then we will continue to see more margin improvement in 2024. In terms of OpEx leverage and overall operating margin, we continue to leverage a lot of the overhead and infrastructure investment that we put in a couple of years ago, and I think we will continue to see more leverage going forward.

And Bill, this is Adam. To follow-up on the specific sales force question. I want to thank you. I think you all might know, I love talking about our amazing sales team and what they have been able to accomplish. It’s one of my favorite topics. As I laid out on the call, our team in the field, particularly in Vascular now have so much to do. with our embolization business, which is the majority coil business in the market, together with launching two transformative products together with continuing to get cataracts or coronary thrombectomy throughout there on this – still on the basis of the strong heated study a few years ago. So they are just busy. And now we’re facing more than like doubling the number of customers we’ve typically had on our thrombectomy business and getting to all that process. So the point is we are going to evolve that sales force. We are not splitting the sales force. That’s not our plan. We are going to evolve it with people who can make some of this work more efficient without fundamentally changing the core structure of the sales team. So I’m not going to be too much more specific for competitive reasons. As you know, I don’t typically share the number of sales reps and how we think about that because that’s not how we’ve managed our team, and our team has performed so well over the last many, many years. But we can do that within the context of our growing profitability. And that’s the most important part. This isn’t going to change that trajectory. And I think it will be a significant evolution of the team. but one that will allow us to do more but not impact that important part of profitability.

Great. Thank you for taking my questions.

Thank you.

Your next question comes from the line of Michael Sarcone with Jefferies. Your line is open.

Good afternoon, thanks for taking the questions. First one to start. You had mentioned over the next 18 months, you plan to launch four new CAVT product in the U.S. I was wondering if you can give us any color there whatsoever. Are those new TAMs, new indications? Would just love to get some more color there.

Yes. So it’s a great question. I’m very hesitant for obviously competitive reasons to give too many specifics. Needless to say, I will say the following though, and that is this is the beginning, not the end of what we think we can offer with our CAVT platform. Those four products are going to be significant. They are not tangential or on the sidelines. And that’s not the end of it. We alluded to technology that is in development that would be part of and attached to and be integrated into the whole platform, that will continue to move this field forward and making these procedures easier, making both the physicians and the hospitals feel much better about the flow and the treatment of these patients. So we’re really at the beginning of this next phase, and we will give you more update, obviously, as those products get cleared, but again, pretty excited about what the next month – next year looks like. And I guess our R&D team is – it’s just evolving. They have always been amazing. They have brought us this far, but they are extraordinary, and I need to do a quick shot out to them for getting us to this stage.

Great. Thank you. I believe you also disclosed, I think you said 50% U.S. vascular thrombectomy sales growth year-over-year. Can you just talk about any kind of competitive response you’re seeing and then maybe what was the similar category growth international your thrombectomy business on the vascular side.

Yes, I’ll start. Clearly, 50% U.S. growth in thrombectomy is multiples faster than we’ve seen from anywhere else. Internationally is a much smaller base, so the growth percentages can be higher quarter-to-quarter. And it was slightly higher than that this quarter, but it is because of distributor variance, you had a good quarter marginally so, and it’s a smaller number, so the percentages are bigger. But both regions did well.

Okay, thank you.

Thank you.

Your next question comes from the line of Richard Newitter. Your line is open.

I think, Adam, you had made a comment about where you are exiting the year with those – with 1,000 VAC committees working their way through the process and you expect to be through the mall in the first half ‘24. I guess can you flesh that out a little bit about what exactly that means? Is there any kind of quantification or directional color we should be thinking about in terms of growth first half, second half, next year. Just I’m trying to understand, you’re pretty thoughtful about those kinds of comments. So I’m just making sure we’re hearing the messaging correctly around that.

Yes. No, I think it’s really appropriate and great question. There is – let me maybe sort of walk through a little bit about what I did, but also sort of the what does it mean more specifically. So we – what I said is that there is over 650 of those centers got back approval this past quarter, but not – have not yet ordered because they are going through what we – for lack of a better term, we’re calling the typical supply chain process where you work with the supply chain in the hospital to get the product ordered and on the shelf and all that. And so that’s going to happen for the most part, most of those during this quarter. Some might drag a touch, but most will happen this quarter. So once you get it ordered, now we don’t do large stocking orders, some companies have done that over the years, we do very basic, you order one, maybe two and get started. And then with that, you have success and reorder the product. So we make it pretty straightforward. So it’s not a question of stocking order revenue, it’s really getting going. What I also said, there are two other points. One is there is another 600 – over 600 hospitals that are still in the beginning of that VAC process that haven’t yet had that VAC approval. Once that happens, then they move to that second category that we have to get through the supply chain part and get on to the shelf. Once we’re there, once we’re ordered and able to be used, then our efforts switches in those hospitals to not only having it be used sort of the cases that are obvious. But if you look at – and…

Okay. Thank you for that. Just lastly, anything with respect to the vascular thrombectomy launches, that is going better or worse in line with your expectations at this point in the launches? Thanks.

Yes, that’s a great question. It’s hard to answer that question. I am a tough critic on our own products. So – but at the same time, I am also a believer in our technology and the engineers that have developed it. So, better or worse it’s hard to necessarily judge. What I will say and I really bring it back to the thing that matter the most to physicians, but mostly in patients is the three things that I highlighted. Safety is first. The product has to be safe. Without that, you run into all kinds of topics and issues and so on. So safety, the safety profile of these products has been extraordinary. And that I think is one of the things that shows up in our data, but also shows up in talking to physicians about it. The second is speed. No one – everyone in interventional business knows, the longer you are doing something, the worse it is [ph]. It should – the best thing is it works really quickly, and you are done. And the speed profile of these is really unparalleled of anything we have ever done or anything that’s ever been on the market. And then the final point is simplicity. It has to just be easy, simple to use. You put the one product in, you don’t have multiple things or tools. And that’s been something that people have really responded to. So again, that is sort of our mantra, that’s our guide. We want to make it safe. We want to make – have speed and we want to have it simple. And having that baseline now with our current CAVT products and knowing that we can even build on that has given us extraordinary confidence, but also a lot of energy that the next period of time is going to be really rewarding for us.

And our next question comes from the line of Mike Matson. Your line is open.

Yes. Thanks. Just want to follow-up on that question about the 1,200 customer accounts. How many of those were not previously number of customers?

Yes. That’s actually a great question. I don’t – I can’t with the exact specificity give you that number. I can tell you that I know that way more than half, the majority of those 650 accounts and the majority of the following 600 are our new customers. There might be a handful of existing customers in there, but the vast majority are new customers.

Okay. Thanks. And then the one thing that surprised us in ‘23 was just the strength on the neuro side. I mean clearly, vascular it looked like it was going to do well given the product cycle. But Thunderbolt has been delayed. So, what I am wondering is looking into next year, do you have anything new coming in neuro to kind of help drive the growth there in ‘24?

Yes. I will start with – we always have new products in both fields, neuro as well. I am not going to comment on them. The core technology is right now, RED 72 with SENDit, which it’s got a long way to go to continue to drive growth. We are continuing to just as we – I heard of a physician who had tried it, who typically hadn’t been using our aspiration catheters and was particularly blown away by how well it attract. So, I think we won yet another customer over. So, that’s going to drive our success for a while because, again, if you can’t get the catheter there, then Thunderbolt doesn’t matter. You have to have it be so easy to get there that you are excited to use Thunderbolt. So, I think the timing on Thunderbolt is really sets us up so that we can use the time next year to really continue to get in to more and more accounts, which as you said, we have done pretty well this year. We have taken back significant share, as I said in my prepared remarks, we now in our estimate, over 55% of the stroke aspiration catheter market. And that’s – it’s kind of a notable thing that we are competing with 28 other catheters. So, usually, when you have that many products all competing, you don’t have a dominant player, if you will. And the fact that we are is a testament to the success we have had this year with RED 72 and SENDit, and I don’t think that will stop and I think we will continue with that.

Yes. Mike, good question. The only thing I would add, this is Jason, is you saw with SENDit, the U.S. stroke business have another really strong quarter, double-digit growth this quarter, 20%. And as you know, we don’t have yet that product launching anywhere outside the U.S. The other thing I would just note is you are hearing us talk about thrombectomy globally, which includes stroke, obviously, be thrombectomy head to toe vis-à-vis the embolization and access businesses. So, I think what you are going to see – continue to see is thrombectomy, including stroke, but obviously, vascular thrombectomy as well lead our growth. So, just pointing that out as you are asking about neuro versus vascular, I think what we are talking about more is thrombectomy vis-à-vis embolization and access.

Perfect. Got it. Thank you.

Your next question comes from the line of Matthew O’Brien. Your line is open.

Hi. Thank you. This is Samantha on for Matt. Just a couple from us, and I guess first on the expected robust growth for thrombectomy, I know you said 40%. How much could you attribute that to maybe an easier pre-flash comp versus expectations for sequential growth?

Yes. So, it’s a very good question. Thank you for it. We continue to expect very good sequential growth as well. Comps aside, we are growing significantly faster regardless than I think folks expected in thrombectomy generally, and of course, relative to the market. That’s happening both year-over-year and sequentially.

Okay. Thank you. And also a question about the VACS, thank you for all the details there. I was wondering, could you provide any more detail on maybe how many of those facts are kind of double counted for both flash and bolt versus a single flash or just a single bolt.

Yes. So, that’s a really good question, and I apologize for maybe not clarifying. The way we talk about them is each one is a separate accounts. So, there – it’s possible, for example, that in the 650 accounts that I have said have gotten back approval, but have not yet ordered because they are going through the supply chain process and will soon. Of those, you might have one hospital, but two – I count it twice because it’s bolt and flash. And sometimes, the same physician is using both products. But in other times, they are not because, as you know, there is interventional cardiologists, vascular surgeons and interventional radiologists who share this and some specialize in certain parts of the body and others don’t. So, many of those that have one hospital, but two submissions, it’s separate people who are advocating for those products. It’s just a different process. So, it’s not all lumped in as one, and that’s why we count them separately.

[Operator Instructions] Our next question comes from the line of David Rescott. Your line is open.

Hey guys. Thanks for taking the questions. I just wanted to start maybe on the neuro thrombectomy segment. I think maybe the comps there were a little bit tougher year-over-year and the numbers came in a little bit below maybe what we were expecting, obviously higher on the peripheral vascular side. But just wondering if there is anything you would want to call out just on the neuro thrombectomy. Sir, I know you talked about SENDit, getting into a position of expanding the market, taking share, maybe having a little pricing benefit there. But just wondering on a cadence basis, year-over-year sequentially, if there is any color you can provide there.

Yes. Thanks David. This is Jason. So, our neuro business achieved our expectations for the quarter, and the team really executed quite well, especially in the United States. So, in the United States, the neuro franchise grew 17% year-over-year. I think we have been articulating from the beginning of the year that we expected our vascular business to grow above our total company guidance range, which of course has come up from $1 billion to where it is today throughout the year. And we said neuro would grow below this range. Since we don’t give specific guidance by franchise, I think generally, models may have not accounted for this guidance, perhaps because the neuro growth was higher in the first half of the year. But we fully anticipated neuro growth internationally in the second half of the year would face more seasonality and lower growth in some distributor markets, which is why we gave the guidance context at the beginning of the year that we did. So overall, we are quite proud of the progress in our neuro business and continue to expect the new products we have with SENDit and Thunderbolt eventually will fuel our future growth.

Okay. Great. Helpful. And then maybe just sticking on that point, taking a step back longer term, I know that newer products put you in the share gain position. When we think about just the overall maybe either U.S. or worldwide neuro thrombectomy market, I know maybe earlier in the year, we saw kind of some of these trials reading out in thrombectomy specifically about maybe expanding the market towards some of the large core in size patients, more distal occlusions. Just wondering from a higher level, more macro perspective, if the neuro thrombectomy market itself, Penumbra is reaccelerating expanding or if those are opportunities to drive further growth going forward.

Yes, this is Adam. I think that’s a really important question, so I appreciate you raising it. I think that opportunity, particularly on the trials where they are looking at the core impact parked in saying we could treat a lot more of the patients than we thought we could treat is a really huge development. We haven’t called that out specifically because we want to wait and see that that’s what behavior is happening in sustainable form before we sort of get too excited about it. But I don’t disagree with you. I think from everything I have heard and all the conversations I have had with neuro physicians, that is a real likely possibility. It’s relatively new. It is sort of summer time and so to talk about it as a clear happening trend, it’s a touch early. But I think all the conversations that led to believe that, that could grow the market. Obviously, so far, given the timing of those, the gains we have seen have been share based. But yes, I mean I would be delighted for patients if we could treat more and more patients and they can get better. And obviously, that would have a very, very positive impact on the neuro part of our thrombectomy business.

Okay. Great. Thanks and congrats on the quarter.

Dave, thank you.

And your next question comes from the line of Shagun Singh. Your line is open.

Great. Thank you so much. Adam, I was hoping you could provide your views on GLP-1, just related to Novel preclinical [ph] data that is studying GLP-1 impact on peripheral artery disease. The primary and study completion date isn’t until mid-2024, but we have seen an impact on stocks in the medtech world just on top line readouts that have come out before. So, just anything you can share with us ahead of it to instill confidence in the PAD space.

Yes. Thank you for that question. Obviously, it’s been a topic in the investment world, less obviously in the physician community directly. Look, there is – we are the healthcare company. We obviously applaud any innovation of whatever form that can help people be healthier and feel better. That being said, if you look at just the sort of factual statement, obesity, for example, is not a direct causation of thrombus formation. It is a risk factor. There are lots of risk factors, age and I could list 20-plus risk factors. It is not one of the top risk factors even. But that being said, if you were to look at that and say, maybe you could have a several percentage point impact in the long, long run and the number of patients that have clot, which I am not willing to necessarily concede, but if it did happen, it wouldn’t be a material question as it relates to our numbers because we are less than 10% penetrated in a market. And then by the time we were experiencing that, it would be many, many years, if not decades away. The other analogy and I think for folks who are in stroke or cardiovascular disease of any kind is really looking at statins. 20-plus years ago, they held out huge promise. And obviously, they have been very valuable. They have – they become widely adopted. The use of them, very commonplace, the price has come way, way down to very, very affordable. But it hasn’t in any form, it’s helped in certain things, but it hasn’t changed at all the number of patients who have clot in their body. It just hasn’t. And so notwithstanding the other benefits that it has brought, it hasn’t lowered the number of patients with clot in their body at all. So, I think from a – are we going to be necessary as a company and our innovative products continue to be used at the scale where we have ambition around, I think the answer is pretty clear, we will be.

Got it. That’s really helpful. And just as a follow-up, I wanted to get some color on the plus 20% growth that you have called out in ‘24. Should we think of that as a base case, it’s still – we haven’t entered 2024? And then also, you are exiting the year at 28% to 31% growth in Q4. So, what does that imply for ‘24 and the plus 20% being a base case or let’s take this any color that would be helpful. Thank you for taking the questions.

Yes. Look, I don’t want anyone to misinterpret what I have said. What I have said at the investor conference in September was that 20% plus growth was achievable. And then I reiterated that I strongly believe that today. I also said, please give us the courtesy and time, again, not trying to hide anything, not trying to [indiscernible] that, but to get through this year and do what we traditionally do is give formal guidance with the exact numbers on our next quarterly call. Again, please don’t read into that, but that’s somehow anything other than commenting or reiterating what I have already said.

Fair enough. Thank you so much.

Thank you.

You next question comes from Citigroup. Your line is open.

Thank you very much. It’s Joanne Wuensch. And I apologize if you have addressed this. There is a lot going on. Was there any stocking in the quarter? And can you comment a little bit on what you are seeing in terms of – it looks like there is some neuro weakness and how that happened U.S. versus o-U.S.?

Yes. Well, let me address the stocking. We have quickly addressed that earlier, so I will do it quickly. We don’t typically do stocking. Our initial orders are one or two units at the most, just to get people started. So, that was – that’s not part of our business model and hasn’t been. Jason can address. We had a neuro question, which Joanne has already asked as well.

Yes, it was. But I am happy to go through it. So, as I mentioned just a little earlier and apologies for the rest of the people on the call just for going over this again. But our neuro business actually achieved what we expected it to in the quarter. It executed very well. So, just to give you a bit more context, the neuro franchise grew 17% year-over-year. And if you remember, we articulated earlier in the year, in fact, at the outset of guidance that we expected vascular growth writ large to be higher than corporate average growth and neuro would be lower. And we sort of – I think we got some pushback to that after the first half of the year because neuro was stronger. But we understood the cadence of our business. We understood that we were going to see more seasonality in distributor variances in our neuro business internationally in the second half of the year, which is why we stuck with that. And of course, if we don’t guide specifically to neuro grows this and vascular grows that, I think models just didn’t maybe account for that. But in our view, our neuro business and neuro team is doing exceptionally well.

And there are no further questions at this time. Ms. Hamlyn-Harris, I will turn the 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 call.

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