CVRx Inc Aktie

Thank you. 2026 earnings call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. I would now like to turn the call over to your host, Mike Vallee, with ICR Healthcare. Thank you. You may begin.

Good afternoon. Thank you for joining us today for CVRX's second quarter 2026 earnings conference call. Join me on today's call are the company's President and Chief Executive Officer, Kevin Hikes, and Chief Financial Officer, Jared O'Shaughn. 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 Hikes.

Thanks, Mike. Good afternoon and thank you for joining our second quarter 2026 earnings call. We delivered total revenue of $15.7 million in the second quarter, demonstrating growth of 16% over the same quarter last year, with a gross margin of 87%. Despite the positive quarter, we are seeing signs that the back half of the year will not be as strong as the first. As a result, we've lowered our revenue guidance for the year. My remarks today will cover three things. What is driving this change in outlook, what we're doing about it, and the longer-term positive trends that we're seeing. We ended the quarter with 56 sales territories in the U.S. flat compared to the end of the first quarter.

It is important to note that roughly 60% of quota-carrying territory managers have joined us in the last 18 months, as we have worked to build the right organization for this next phase of growth. This rapid pace of hiring has strained our onboarding and training processes and the ability of our area sales directors to spend the time necessary to accelerate these new team members up the productivity curve. The scale of the turnover, the slower pace of the Territory Manager productivity ramp, and the concentration of these new hires in a subset of our regions are the primary factors behind today's guidance update. Importantly, these challenges are not uniform across the business. In the regions where we have limited turnover and stable seasoned leadership executing our program development selling strategy, we're seeing strong double-digit growth, which indicates to us that when we have the right conditions in place, our strategy is indeed working. The Salesforce productivity challenges that we are facing are concentrated in specific regions that have a combination of new leadership and the highest turnover as a result of our Salesforce restructuring over the last 18 months. The combination of these two factors is distracting these regions from fully executing our market development plan, offsetting the success that we're elsewhere in the country.

Closing that gap is the focus of the steps that I will walk through next. First, we've continued to improve our hiring process and refine our hiring profiles to make sure that the people we bring on are the right fit from day one, limiting early turnover due to skills or expectations that are not aligned. Second, we are investing significantly in onboarding and training with new resources, roles, and materials designed to get reps productive more quickly. This includes a significant strengthening of our curriculum focused on practical account access skills, as well as extending the onboarding process beyond the initial three-month didactic phase to an additional three-month hands-on field mentorship. The objective of these changes is to accelerate time to productivity and to reduce sales director distraction by improving the readiness of our territory managers as they join their teams in the field. Third, we're creating multiple new field-based roles specifically focused on freeing up time for our area sales directors to more fully engage in coaching and developing the territory managers in their regions. This includes field-based reimbursement and business management personnel, as well as two vice president-level leaders to better support the area sales directors themselves.

These additions are being funded through a reallocation of resources, not incremental spending. And as Jared will point out in his comments today, we are actually lowering our operating expense guidance for the year. And finally, we are redeploying senior leadership talent to roles that can have the fastest and most significant impact on our commercial execution. Our Chief Marketing Officer, Paul Verastro, one of our most experienced and respected leaders, is moving into a new role providing direct support to our field teams to further accelerate the productivity of our new territory managers and area sales directors. Patrick Lyon, a key addition to our marketing team in Q4 of last year, is being promoted to lead our marketing organization, and we are confident in his ability to build upon Paul's outstanding contributions to date. The second factor that impacts our view on the rest of the year is reimbursement. While there are a number of positive trends, we continue to be challenged by the change in behavior from our largest Medicare Advantage payer.

For many quarters, this payer approved close to 80% of our prior authorizations within 30 days of submission, many within days upon receipt. In February, this payer implemented AI-based prior authorization tools, which resulted in an immediate increase in initial denials on the basis of administrative omissions. This was an attempt to comply with the shortened federal requirements for prior authorization review that went into place in January. This caused their 30-day approval rate to fall sharply in February and March to roughly 25%. Our own AI-based tools, discussed on our last call, helped bring that rate back up to approximately 40%. But this payer has since introduced further new tactics for denying claims, and the rate of approval is still high. has now fallen back below 30%. As a result, providers who had grown used to approvals from that payer within a matter of days are now waiting far longer and seeing meaningfully lower initial approval rates.

That shift has understandably made some physicians more hesitant to recommend barostem therapy to their patients covered by that plan. Our approach to dealing with this headwind is the same one that ultimately led Humana to issue a favorable written coverage policy earlier this year. We are committed to appealing every prior authorization denial through every stage in the process and to continue these appeals through to an administrative law review if necessary. consistent advocacy on behalf of patients, and the successful pursuit of appeals through to the final administrative law stage is what ultimately incentivizes a payer to discuss a formal coverage policy. Outside of this specific payer, the rest of our reimbursement picture is strong and getting stronger. Our overall 30-day Medicare Advantage prior authorization approval rate was 60% for the second quarter as compared to 44% in 2025. The Humana coverage policy is helping drive this progress, with approval rates now above 90%. We now cite the Humana policy in every prior authorization that we file and appeal across every payer, and we are referencing it directly in our ongoing coverage discussions with other national and regional payers.

The Category 1 code implemented in January has further stabilized our experience with traditional Medicare, with approximately 96% of submitted claims for the Barriston procedure now being paid across all seven Medicare administrative contractors. On the outpatient side, CMS's proposed rule for the 2027 Outpatient Prospective Payment System continues to support barostem displacement in new technology APC 1580 at approximately $45,000 per procedure. We were also pleased to see the final inpatient prospective payment system rule increase the inpatient payment rate for the procedure from $43,000 to $45,000 effective October 1st. The previously discussed creation of the Field-Based Reimbursement Manager roles is designed to increase our field reimbursement support and to move it closer to the point of customer contact in the field. I will now shift to the longer term positive trends that we are seeing in the business. First, we continue to believe that our focused playbook is the right one, targeting the right centers and building sustainable programs based on a redundant network of clinical and administrative stakeholders and a defined Barrows Tim workflow. As I mentioned earlier, our regions with stable, seasoned leadership and limited turnover are proving the impact of this approach, and our strong growth in these regions is the clearest validation we have that the strategy itself is working.

Our work is now focused on bringing the remaining regions up to that same standard, and we believe the actions we're taking and the investments that we are making will get us there. On the clinical evidence front, I'm pleased to share that the BENEFIT-HF trial is tracking ahead of our internal expectations on both center activations and patient enrollment. We are also significantly increasing our investment in real-world evidence data sets, which we believe can further strengthen the clinical evidence base supporting barostem. We now have multiple analyses from these data underway, with the first publications expected this fall. In addition, these data could potentially support an expansion of our indication and label, leveraging the new FDA real-world evidence pathway. We believe that this could potentially be a viable regulatory pathway for CBRX, and we will keep you updated on this effort as it progresses. Before turning the call over to Jared, I'd like to provide an additional update.

In May of 2026, we received a civil investigative demand from the U.S. Department of Justice related to certain sales and marketing practices as described in our 10-Q. are fully cooperating with the investigation. Jared will now walk through our financial results and our updated guidance for the year.

Thanks, Kevin. Unless otherwise stated, year-over-year comparisons are for the three months ended June 30, 2026, compared to the three months ended June 30, 2025. Total revenue was $15.7 million, an increase of $2.1 million, or 16%. Revenue in the U.S. is $1.7 million, or 16%. was $14.8 million, an increase of $2.5 million, or 21%. Revenue units in the U.S. totaled 466 compared to 391. The increases were primarily driven by continued growth in the U.S. heart failure business as a result of the expansion into new sales territories, new accounts and increased physician and patient awareness of barostem. We ended the quarter with a total of 258 active implanting centers as compared to 240 as of June 30, 2025. As of June 30, 2026, the number of sales territories in the U.S. is 56 as compared to 47 as of June 30, June 30, 2025.

Based on the current tenure of our team, and as we focus on driving productivity in our existing territories, we are not anticipating adding any more sales territories for the balance of the year. Revenue in Europe was $0.9 million, a decrease of $0.4 million, or 31%. Total revenue units in Europe decreased to 40 from 61 in the prior year period. The number of sales territories in Europe remained consistent at 5. Gross profit was $13.7 million, an increase of 5%. of $2.3 million or 20%. Gross margin increased to 87% compared to 84% a year ago. R&D expenses increased $0.7 million to $3.1 million.

This change was driven mainly by an increase in headcount expenses and clinical trial expenses. SG&A expenses increased $0.3 million, or 1%, to $23.6 million. This change was primarily driven by an increase in non-cash, stock-based compensation expenses and legal expenses, partially offset by a decrease in advertising expenses and travel expenses. Interest expense increased 0.1%. $1 million to $1.6 million. This increase was driven by interest expense on the increased borrowings under the term loan agreement with Innovata's capital partners. Other income net decreased $0.5 million to $0.6 million. This balance consisted of interest income on our interest bearing accounts.

The decrease was primarily driven by the lower cash balance. Net loss was $14 million or 53 cents per share compared to a net loss of $14.7 million or $0.57 per share. Net loss per share was based on 26.5 million and 26.1 million weighted average shares outstanding, respectively. As of June 30, 2026, cash and cash equivalents were $64.6 million. Net cash used in operating and investing activities was $8.9 million as compared to $8 million. Now turning to guidance. For the full year of 2026, we now expect total revenue between $58 and $60 million. We now expect full year gross margin between 86% and 87%.

We now expect operating expenses to be between $99 and $101 million. For the third quarter of 2026, we expect to report total revenue between $13.5 million and $14.5 million. With that, I'll now turn the call back over to Kevin.

for closing remarks. Before we close, I'd like to provide an update on our leadership team. We recently welcomed Matt Klein as our new Vice President of Legal at CVRX, a seasoned medical device legal executive, most recently with Silk Road Medical and Boston Scientific. We're also making progress on our search for our next Chief Financial Officer. Jared has been an important part of this company for over a decade and we're pleased with the quality of the candidates who are interested in succeeding him in this role. While we're pleased with the performance year-to-date, we are not satisfied with the outlook for the balance of the year, and we clearly have more work to do as it relates to sales execution. We are working hard to improve the hiring and onboarding process for the sales team, as well as improving sales director bandwidth and support with new field-based roles to accelerate more of our sales reps up the productivity curve. Despite these short-term sales execution challenges, we remain confident in the fundamentals of this business and the unique opportunity that we have to introduce device therapy to treat a disease that has been managed exclusively with pharmaceuticals for over 50 years.

Our highly differentiated therapy is based on the same fundamental and accepted mechanism of action that underlies today's guideline-based pharmacologic therapy. We have a $10 billion market opportunity with little to no device-based competition today or on the near-term horizon. While admittedly bumpy, we are nonetheless making steady progress on patient access, the most fundamental issue facing any new therapy, with a recent Category 1 code, steadily improving Medicare Advantage approval rates, consistent payment for traditional Medicare patients, and our first-ever written coverage policy from the largest Medicare Advantage payer in the United States. This coverage policy opens the next chapter in our patient access work and facilitates a very different level of conversation with other Medicare Advantage and commercial payers, paving the way towards additional coverage policies in the future. We have also meaningfully strengthened the evidence base underlying barostem therapy over the last 18 months, including significant publications on hospitalization reduction and other important clinical and physiologic endpoints. We have numerous additional publications on the horizon and are seeing enthusiasm from and positive engagement from the by the heart failure community on the BenefitHF trial, the largest therapeutic device trial in the history of the field, which, if successful, will triple our total addressable market. Changing any disease treatment paradigm is difficult, particularly in a conservative specialty like heart failure, but we are making progress each and every day.

With the right commercial structure and stronger sales execution, the momentum we are building in patient access and evidence, and a number of positive catalysts on the horizon, we are confident that we will ultimately be successful. Before we close, I'd like to thank the employees of CVRX for their persistence and commitment to supporting the more than 7,000 patients who have benefited from barostem therapy, as well as the many more whose lives can be positively impacted. We are working as one team to support our sales leaders and their field teams to address the headwinds that we've discussed. on this call. The consistent and undeniable impact that our therapy has on the lives of people suffering from heart failure is what drives and inspires our team each and every day.

Now, I'd like to open the line for questions. Operator? Thank you. If you'd like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you'd like to remove your question from the queue. using speaker equipment, it may be necessary to pick up your handset before pressing the One moment, please, while we poll for questions. Thank you. Our first question comes from the line of Brandon Vasquez with William Blair. Please proceed, read your question.

It's matched on for Brandon. Can you hear me all right? Kevin, I guess I'll just start on the commercial front. Earlier in your prepared remarks, you called out the Regents with higher turnover. Is this additional turnover outside of what you guys are seeing normally? And I guess if so, how many of these reps leaving are those you guys were expecting to be fully ramped by now? And if so, how many of these reps are leaving? I guess I'm just trying to get a feel for where we now stand in the ramp of those existing reps since the commercial realignment and the ramp of new ones going forward.

Yes, thanks, Max. So I would say it's a combination of things. The overall scale of the turnover that we've experienced over the last 18 months as part of this transition, including continuing turnover in Q2 that is higher than we would have liked, has led to some of these challenges. And I can't characterize the percent that are more recent hires. The bulk of them are from the earlier years of the company. But this is the dynamic that's putting pressure on our onboarding and training processes. And that is leading to slower productivity ramps than we had anticipated seeing from this group, both in sales. recently activated territories that aren't ramping up as quickly as they should or historically have, as well as our ability to move some of these new hires from the bench into new active territories. So as Jared mentioned, or as we mentioned on the call, the dynamic is in fact concentrated in a handful of regions who unfortunately also have our least tenured leaders leading those regions.

So it's a bit of a double whammy.

Got it. And then, Jared, maybe one for you. Kevin, maybe you as well. But just on total center ads, on a net basis, you guys only added one since Q1. How should we think about this for the remainder of the year, considering these Salesforce changes and you guys are still likely closing those lower tiered accounts through the rest of the year?.

remainder of 2026. Thanks for taking the questions. Hi Max, thanks for the question. Yes, so with the one center add, that wasn't too much of a shock to us. Again, our strategy has been focused on driving deeper adoption within the centers that are active. Obviously there's been a bit of change out as we continue to add the right types of centers and sunset some of those dabblers that we've talked about in previous quarters. As we If we look to the balance of the year, a large portion of our growth in centers comes along with new territories. As we've talked about in the past, each territory manager is directed to activate somewhere in the range of three to five centers.

If we now, for the balance of the year, do not anticipate activating, any new territories, it's unlikely we'd see net growth in that center number for the balance of the year. But that also aligns with this strategy of driving deeper adoption at each one of these centers.

Thank you. Our next question comes from the line of Chase Knickerbocker with Craig Hallam Capital Group. Please proceed with your question.

Good afternoon. Thanks for taking the questions. Kevin, maybe it would be helpful for us if you could present us with a cohort of sorts as far as the reps where you're still seeing that double digit growth that you mentioned. What portion of your rep base are you still seeing that in? know what is the characteristics as far as kind of tenure etc and then kind of compare that to the territories in which you're having problems as far as kind of how distinct that performance is if you get into a little bit more detail there I think that would be helpful to kind of frame up the issue thanks yes thanks chase yes so I in the majority of our regions we have relatively limited turnover over the last 18 months in those.

regions we also have our most tenured leaders and so what we're seeing there is when they are applying our program development strategy and they're focused on four key selling activities that we've identified as the core elements of our pipeline they are growing in the strong double digits consistently so Conversely, in the regions where slightly less than half, where we have the highest rates of turnover, which are well north of 50% in some cases, and we also have our least tenured leaders, we are seeing negative implant growth rates year to date. effectively offsetting the strong growth we're seeing in the regions that are in fact executing our strategy. So pretty stark differences in turnover rates, in tenure, in leadership, and in the execution of the strategy itself. We track those four metrics very closely so we can tell where the strategy is in fact being executed. delivered and where we're still struggling to do that. And I should have mentioned earlier, in effect, we have overwhelmed, and I take full responsibility for this, we have overwhelmed our ability to onboard this many people simultaneously or over a three or four quarter extended period. And we are not seeing the productivity ramp that we were used to seeing under more stable conditions. And that is what's driving these challenges. Unfortunately, as I said, it's heavily concentrated in a number of regions where we're also onboarding new leaders.

So that's made the problem worse.

Got it. Jared, if we kind of go over to OPEX guidance, please. Is it fair to say that the majority of the cost savings in that guidance is from the removal of the expected hiring of those additional sales territories? Or where else is that cost savings coming from? And then the second piece to that is where you think there might be some additional savings to find.

as of next year. Thanks. Yes, happy to take that question on OPEX, Chase. Just to close up maybe a little bit on what Kevin mentioned as well is, I think that's one of the key points for us is continuing to highlight that in those five regions with stable leaders and with limited turnover, where we're seeing this strategy play out, we are seeing those high double-digit growth. So I think highlighting that piece of it that it is working in the areas where we have stability is really important. I think as we turn towards OPEX, so seeing a reduction in the top line guidance, that is partially responsible for driving down the OPEX guide, but not wholly. We've also pulled back spending and certain other projects within marketing and development areas so that we could redeploy some additional resources, as Kevin mentioned in the prepared remarks, to sales to help these reps get up that productivity curve a little bit faster. So that's supporting them in the onboarding process and the training process and through our sales. sales leadership team. So there is a partial connection to seeing a reduction in OPEX to bringing down the top line guide, but there's also some intentional reductions in spending that are being brought forward there.

As we think about 2027, again, we're looking for leverage in this model. as we continue to grow this business. I think we've seen that in the front half of this year as we've grown top line at a significantly higher rate than what we've grown OPEX year to date. That will continue to be a focus for the company as we move into 2027 and beyond.

Thank you. Our final question comes from the line of Robbie Marcus with JPMorgan. Please proceed with your question.

Yes, thanks a lot. With now basically three years in that $50 to $60 million revenue range and expenses, you know, plus or minus $100 million a year. You know, are you coming to a point where it's not an execution issue but more a demand issue? Yes. And maybe the follow up to that question is, given where the cash balance is and the cash flow burn, where you stand today in the lower guidance, how are you thinking about,.

cash needs moving forward. Thanks a lot. Yes. Thanks, Robbie. So it's Kevin. I'll maybe take the first part of that question. So We believe and we believe where we are applying our strategy of driving deep adoption and creating sustainable programs as we lower the three barriers to adoption for this therapy evidence awareness and patient access, we are in fact growing this business. We know that this therapy works. We are dramatically increasing the evidence that proves that it works. We are convincing payers, including Medicare, now paying at 96% that this works and is an important therapy for these patients.

Market development is difficult in any setting. It's particularly difficult in heart failure. These are among the most conservative cardiologists or physicians, for that matter, that I've ever worked with. So it is not easy, and it's not linear, and it's tough work. But we believe we have a very important therapy that can help a significant number of people. number of patients in a disease state that's been treated with drugs for 50 years. So unfortunately, I believe our problem today is in fact execution and the demand piece of this is getting better and better with each successive improvement in patient access and each additional publication that we produce demonstrating why it works. So I guess on some levels, the execution piece, I take responsibility for that.

That is fixable, and we are going to fix it. And I can't necessarily say that about evidence or patient access. So thankfully, in those tough areas, we are making progress. And what we've got here is an execution problem that we need to fix. And we are confident we have the right plans in place to do that.

And Robbie, I can cover the second part of the question related to cash. So as of today, we believe we have at least 18 months of cash left on the balance sheet and $40 million remains undrawn under our debt facility. As we've said, you know, for several quarters, maybe even more than a year at this point, we may be opportunistic to raise funds. to bolster the balance sheet to continue to invest in this business. But at the same point, we're going to be very thoughtful on where we're spending our money to make sure that this cash lasts as long as possible here.

Appreciate it. Thanks a lot. Thank you. Ladies and gentlemen, that concludes our question and answer session. I'll turn the floor back to Mr. Heitz for any final comments.

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

Thank you. This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.

This live transcript is auto-generated without human intervention or review.

[Call has ended.]

...recent announcement and would love to hear how you guys are thinking about the new CFO transition.

Sure. Thank you, Marco. And we appreciate the chance to be here today and to chat a little bit about CVRx. And obviously, with the news yesterday of Jared's intention to transition out of the company, a great opportunity for us to hear a little more from him about what that means. But just on behalf of the company, before I let him address that, we're thrilled after 11 years and significant innumerable contributions. He's ready for his next chapter, which we fully support, and he's been extremely instructive, not surprisingly in constructing this transition process. So we'll have him for another 9 or 10 months likely, but have the time to do this right and find the right next successor. But maybe Jared can share a little bit about that.

Yes, happy to cover that. So this is something I've been thinking about for a little while, right? Be at the company for more than 10 years, been in the CFO seat in the public world for more than 5 years at this point in time and really starting to just get that itch for what is that next adventure, right? At the same point, I love this company. I love this product. Everything that it does for patients, I am completely bought in, right? And so I want to make sure that this company continues on in a very strong way and goes to the moon, right?

So when I came forward to Kevin and talked about the opportunity of transitioning out at some point in the future, it was really built on wanting this thing to continue to grow and be in a really healthy position moving forward. So we constructed this approach where I am committed to stay on all the way through finding that new CFO, getting them up to speed over the 30 days period afterwards and then even beyond being a phone a friend, right, in that consulting role to help that new person get up to speed and kind of take this thing to that next level.

So I'm excited for the next opportunity, but I'm here for a while, right? We've got to find the new person, get them up to speed, and I'm willing and able to help support them through that journey.

That's great. And Kevin, why don't you start with maybe providing a brief overview on CVRx and your background as well as framing what you are working on for those that are newer to the story.

Sure. Thank you. So I'm -- maybe I'll start with the background piece. I'm a 35-year med device veteran, 17 years at Medtronic, now 17 years running growth stage, mostly private ventures just like CVRx, very much at the same stage dealing with the same issues. So I was on the board of this company for a couple of years before I stepped into this role. And I found a fantastic company that had very typical sort of early-stage commercial successes and challenges. And so when I joined 2 years ago now, we spent some time just looking at what those first 3 or 4 years had told us. What worked, what didn't, what sort of approach we needed, what were the fundamental structural barriers in the market to the adoption of the therapy.

So on that basis, we built the go-to-market plan that we began implementing roughly 18 months ago. And I can talk about that later if we have time. Maybe just to back up a step, so Barostim therapy was approved in the United States in 2019 for the treatment of heart failure. We treat patients. Heart failure as a whole has sort of two large paths. One is reduced ejection fraction. One is preserved ejection fraction. So we treat patients that fall with the reduced ejection fraction. Those are EFs below 35. So our therapy is indicated for a subset of those patients who are on guideline-directed medical therapy. So those are the four commonly prescribed drugs today, but who are still symptomatic. And the challenge we are dealing with in heart failure, especially in HFrEF, reduced ejection fraction heart failure, for 50 years, the drug -- the disease has been treated with drugs. And so patients are diagnosed.

They're started on as many of these four drugs as they can tolerate and they're effectively sent home for 5 to 7 years to suffer with debilitating symptoms. And at the end of their journey, 7 or 8 years later, if they're lucky, they're considered for a VAD or a transplant. If not, they're sent to Hospice. So we're dealing with a disease that's been largely undermanaged for many, many years. And the quality of the four drugs, and I can tell you, only 1% of patients ever can take all four of those drugs. And of those that do, 40% discontinue in the first year. So the drugs are tough to tolerate. They do nothing for quality of life and many patients can't take them.

So we deal with the population that we treat are called the forgotten middle by the heart failure community. So those are patients between sort of 2 and 3 years in and 6 and 7 years in, and they're suffering. So our therapy rebalances the autonomic nervous system by restoring signaling from a set of nerves, a bundle of nerves called the baro receptors on the carotid artery that signal the brain on the status of the cardiovascular system.

You've historically framed Barostim as a $10.5 billion U.S. market opportunity. Why don't you walk through how you size that market? And sometimes there's both deciding what is totally accessible as well as servicely accessible. So how do you frame that in that context?

Yes. So we would describe our population. So the incidence -- the annual incidents for our indicated population is about 76,000 patients. And so that starts with all patients with heart failure. We take a cut for those who have an EF less than 35. We then take another cut based on a biomarker called NT-proBNP, which effectively describes the stability of their heart failure at a given time. So we -- our indication is for patients that have an NT-Pro between 400 and 1,600. A really sick patient could have an NT-pro of 20,000, right?

So we say under 35, 400 to 1,600 on the NT-Pro. And then we take another cut for access to health care comorbidities, kind of Medicare, Medicaid. Sort of the typical cuts to come up with a very conservative 76,000 patients per year, about $2.4 billion on an incidence basis. On a prevalence basis, it's about $10 billion a year, and that's about 340,000 patients.

So maybe we transition to more of the clinical evidence side of things, and you've conducted multiple studies. So how do you -- why don't you start talking about how physicians and patients have reacted to your current clinical evidence?

Sure. So the most recent trial that we've completed, large-scale trial was our BeAT-HF pivotal trial. That trial was the first ever -- our device and therapy was the first ever breakthrough designated device by the FDA. There's now 2,500 such devices, but ours was the very first. And at the time, the structure of those trials involved a Part 1, which allowed you to get FDA approval on the basis of safety and efficacy and then a second phase of the trial that would study additional endpoints. So in our case, we got approval for the therapy at the 6-month point on the basis of an extremely safe procedure with significant impact on quality of life. We then began the second phase to further enroll the trial and look at two endpoints of hospitalization and mortality. Unfortunately, as we began that second phase in December of 2019, COVID was on the horizon. So -- as a result, we were unable to fully enroll that second phase.

And ultimately, when we published the data, we demonstrated extremely durable quality of life symptoms out to 2 years, but we just missed on the hospitalization endpoint and the mortality endpoint. So since that time -- so we've been marketing and formally on label on the basis of the quality of life impact of the therapy up until now, but have significantly built out the sort of range of evidence around that initial clinical trial. So we now have very solid real-world evidence that shows dramatic 85% reductions in hospitalization. We have significant data showing the impact on arrhythmia on kidney function, on diuresis on some of the mechanistic underpinning.

So for the last 4 years, we've really tried to build around that initial BeAT-HF trial data that alluded us to some degree because of COVID to provide clinicians with a much broader sense of why the therapy works and why it affects so many different elements of heart failure. I'll stop there.

Can I just ask, sorry, a question back on the serviceable addressable market. On the one hand, I think investors get confidence when you take a big TAM and put it into a more direct serviceable market. On the other hand, when you start slicing the size of the market, you start to ask questions about are the 76,000 patients treated in a small number of centers? Are they very diffused? Like how do you actually access that? And maybe help us understand the unlocking of that opportunity?

Sure. You want to...

Happy to cover that. So we've gotten this question quite a bit over the years. I think if you go back to our investor deck and look at where we start with this heart failure population that Kevin was referring to, it's millions of patients in the U.S. that are currently suffering from heart failure. As we went through our FDA indication process, you take cuts against that. And Kevin mentioned, we're cutting it for NYHA Class III or Class II with the recent history of III. We're cutting it for the ejection fraction being below 35%. We're cutting it for that NT-pro biomarker of 1,600. And so every time we get this question both from investors and even from physicians of who is the perfect patient, it really is those patients. We're talking now about 340,000 patients in total out of the millions that exist in the U.S. today. So we believe all 340 are serviceable.

Now the question is, how do you get access to those patients. And as we've gone through this update to our go-to-market strategy, it really was focused on where is the most significant volume of these types of patients. And you can do that through many different ways, right? You can look at other devices that they've been able to get for their heart failure, for example, a single chamber ICD or maybe a diagnostics device like a CardioMEMS or you can look at heart failure admissions data at a hospital and try and understand how many of those patients are being referred into those specific hospitals when those types of events take place. And that's how we've then identified which are the most important centers that we need to activate to capture the majority of those patients, the 76,000 new ones in a year or the 340,000 in that prevalence pool.

And maybe just a follow-up question. Like heart failure has been a really tough space for devices. And it really hasn't been -- even on the drug side, there's really been no innovation. I mean there was Entresto that's done like okay in terms of having an impact. But as you think about you had V-Wave, which failed in the preserved ejection fraction segment. Now you have folks going after like cardiac contractility modulation, you going after heart failure, like help us understand just from a market landscape perspective, what is the status of kind of on the one hand, devices in heart failure? And what is it going to take to really move the needle here on adoption?

So that's a great question. So at 100,000 feet, this is a very conservative specialty, whether you're talking about the HFpEF focused physicians or the HFrEF, things move more slowly in heart failure perhaps than in some other fields even within cardiology. So there's point number one. Point number two is, as I mentioned, there's a 50-year paradigm here of using medication to treat this disease. Undertreated, frankly, and to do nothing for quality of life. So there's a paradigm that we and others like you mentioned cardiac contract modulation. We think often about Abbott and CardioMEMS. We're all in the same boat trying to introduce the idea of devices to this very conservative physician population.

The good news is the earlier-stage physicians, even mid-stage now in heart failure have been exposed to these devices. Abbott has been at work with CardioMEMS now for 11 or 12 years. They're really the predicate device, and they spent a lot of very difficult time in the trenches introducing the idea of a device in the treatment of this disease. And in their case, it's a diagnostic device that has a pretty significant workload associated with it. So that was a heavy lift. We're the beneficiaries of that work. And I can tell you for the first time ever in 2024, the Heart Failure Society of America, who are typically thought of they're sort of the keepers of the pharma flame, if I can say it that way, they published a consensus document that said if after 6 months a patient on best tolerated guideline-directed medical therapy is still symptomatic, it is time to think about -- they call them intermediate devices.

So that was a very significant threshold event for the specialty and certainly for companies like ourselves who are trying to change that paradigm. It doesn't mean people change their behavior overnight, but that's yet another element of getting physicians comfortable that there is a role for an invasive therapy like a medical device in treating this disease. And that sending a patient home for 6 years to suffer and just telling them that's -- sorry, that's heart failure. It's a horrible disease. That's not enough. And there are options now that can get paid for and that are demonstrated to be safe and effective and that should be considered.

And as we stand today, you're in the process of preparing for another meaningful data release. Why don't you provide an update on your benefit trial, current enrollment and other considerations?

Sure. Do you want to take that?

Yes. Maybe just kind of taking it up a level first. The trial itself is a large trial to prove morbidity and mortality in an expanded patient population. So we're looking at around 2,500 patients enrolled for patients that have an ejection fraction below 50%. Again, remember, our current cutoff is 35%. And then also expanding this population for our NT-proBNP cutoff up to 5,000. Again, our current cutoff is 1,600. So by enrolling 2,500 patients, by expanding the patient population, we could gain access to potentially triple this market opportunity. From a $10 billion prevalence pool up to $30 billion.

As far as the trial itself, so we did get FDA approval towards the end of last year. We also applied for and received Category B IDE designation from CMS where they will cover the cost of the procedures of this trial. So -- and that was received early in 2026. With that in hand, we were then able to go out and start activating centers. And that at times can be a long and arduous process. Depending on the types of centers you're engaging with, it can take more than a year to actually get on contract and go through that IRB approval process to get a new trial off the ground. We have already activated several sites. So some of those faster movers where contracting can happen at a quicker rate are signed up and are already enrolling patients. We're still single-digits in both arms.

But as we think about how the year started, we had not really factored in any of this trial enrollment into our guidance. So the fact that we're activated in several centers and seeing patients enrolled is a positive story from our perspective. So it will take probably 3 to 5 years to enroll, a couple of years of follow-up afterwards. [ So we are ] to set expectations on the data release to be about 5 to 7 years from today. And during that time period, we're expecting a net cost of this 2,500-patient trial of about $20 million to $30 million.

And again, the reason we're able to keep that cost of a trial that size down is because we're selling these devices to these hospitals because CMS has agreed to cover the cost of the procedure. So that will net down the overall cost of this trial for us.

And there's been a lot of excitement coming into the year and throughout as you transition on to the Category 1 CPT code. So how has this impacted your reimbursement and overall market availability?

Sure. So that's an important question. Thank you and an area of great focus over these last 3 years. What I can tell you one of the things we reaffirmed when I arrived 2 years ago were the sort of fundamental barriers to adoption of this therapy in the market. And each therapy has a slightly different -- they're like snowflakes, right? They each have a different set of issues that are slowing or accelerating the adoption when you're introducing something new in medicine, right? There's a different sort of recipe for each therapy. In our case, our barriers are quite -- they're almost motherhood and apple pie. It's are physicians aware of where this therapy fits in the treatment of a disease.

Number two, is there enough evidence for enough of the different physician groups for them to be convinced that it's safe and effective. And number three, most importantly, can patients get access to it, right? So ours are pretty right up the middle. We've been heavily focused for 3 years now, 2.5 years, focused on breaking down those barriers wherever we can. The reimbursement piece, the patient access piece has probably been the most productive in the last year. And so we've made tremendous progress both in terms of the codes, the payment and the coverage. And so most recently, 2 weeks ago, Humana, perhaps as a result of category 1, which went into effect in January, Humana announced a written policy for our therapy. And Humana is the #2 largest Medicare Advantage provider out there. They're one of the toughest. And frankly, this was a surprise, a welcome surprise to us, probably 18 to 24 months sooner than we would have expected.

So that on top of category 1, which began in January has really created a tailwind in our business. And if we look back at the numbers, I think the Medicare Advantage 30-day approval rate in 2024 was 31%. When we ended 2025, it was 44% -- as of the end of April, it was 49%. So it's steadily creeping up. But I can tell you the exit rate in April was over 60%. So Category 1 is sort of floating all the boats. Humana, which is a very important threshold event for us has provided an additional tailwind in terms of Medicare Advantage coverage. And what the Humana written coverage policy, our first allows us to do is reference that policy in every single prior authorization that we submit regardless of payer to use it in every appeal that we fight, which we fight day in and day out with these payers. And importantly, it allows us to go in, in terms of coverage discussions, policy discussions, we can reference it with Humana's competitors and say, look, the second largest Medicare Advantage payer is covering this procedure, why are you not doing so?

And so that's a really important tool for us as we work on that third barrier, which is probably the most significant for any therapy. And in our case, obviously, one we've been very focused on.

And maybe we could segue a little bit on to commercialization and further adoption. You talked about a 3-pillar approach to overall commercialization. Can you dive into each of these and maybe talk about how you're going into improving rep productivity and territory growth?

Sure. So we -- as I mentioned, we revised and implemented our kind of next Gen 2.0 go-to-market strategy about 18 months ago, and there were 3 key areas. Number one was getting the right sales team in place and driving their productivity. Number two was understanding the types of accounts that will adopt this therapy in a deep and sustained manner. So moving from a mile wide to as deep as we can get in the right sort of centers. And number three, it was working on those 3 barriers, as I mentioned. So to go back to number one, we have ultimately transitioned over 70% of our sales team over the last 18 months. And that was necessary because we still had a relatively relationship-driven sales force. Typical for any early start-up, we had not yet made that transition. So that's something we've now done.

We brought in sales reps, probably the least common denominator, they understand how to introduce a novel therapy. That's a very different skill set than selling a slightly better pacemaker or a new approach to a procedure that already has reimbursement and access and referral patterns established. So we want people that understand how to introduce novel therapies, largely within cardiology, if we can, but in some cases, in other fields because it's that process itself that's so important. And then it's a matter of getting them up to speed, teaching them how physicians think about Barostim, where they can create awareness and visibility and leverage in their markets. Each rep -- we believe a rep takes between 6 and 12, sometimes 18 months to get up to speed. And that's dependent on their background, their understanding of heart failure and the status of the territory that they're inheriting.

And so we're still, as Jared mentioned, we're still in the process of transitioning some accounts. We inherited a lot of typical early-stage dabblers scattered across the country. So we're pulling back on a lot of those dabblers who we don't think will ever adopt this deeply, replacing them with the kinds of centers that we think will, in fact, adopt the therapy into how they treat the disease. So step 1 is getting that team up to speed. Step 2 is understanding the right process in an account to develop the support you need. So you need refers, you need champions, you need surgeons, you need an administrator and a CFO that understands the profitability, which is very attractive for this procedure, right?

So you need to build the ecosystem at this account of support and then you need to stitch them together with a workflow that says, here's what an appropriate patient looks like. Here's who you send them to for evaluation. Here's who the prescribing doc sends them to for an implant. And here's how you make sure that the patient -- the right patients get treated and get the right outcome. So that's kind of part of building the right center. That's number two. Number three, as I've mentioned already, is constantly working on awareness, on evidence and on patient access. I'll stop there, and we can dig into any of those 3.

Got it. Yes. Maybe we do dig into the center level specifically. When you think about overall and peak productivity, how do you frame your current centers performance to that?

Yes. So we've shared some data over the past few quarters as it relates to our centers. So we're in 257 active centers. Kevin noted that some are kind of in this bucket of centers that we want to be active and driving deeper adoption, some are not. And so we aren't actively firing those centers that don't meet our requirements, but maybe we spend a little bit less time marketing to those types of centers. On the ones where we are trying to drive deeper adoption, we have seen pretty good utilization where we're now north of 1 patient per center per month. That's data from Q4 of last year. I think we were doing about 19 patients a year in those top 20% of our centers.

Our goal for the entire cohort of centers that are active is to get them treating at least 1 patient a month so that we can get them to this stage where they're thinking about this therapy on a regular basis. So the fact that 1/5 of our centers are already at that threshold is a positive story, but we want the whole cohort to get there and then beyond. Even in those centers where we are seeing the deepest adoption of 18 or 19 patients per center per year, we're only about 7% penetrated.

So there is still a lot of room to run to go and educate the rest of the referral groups and the nurse practitioners that are helping to treat those patients on a regular basis. As far as the center adds go, we've talked about trying to add a net number of high single-digits per quarter throughout 2026. So maybe we're adding 7 or 8 centers per quarter on a net basis. That includes the ones that are sunsetting going more than a year without an implant. But there will be some choppiness as it relates to those numbers because it really is dependent on is that one center who treated a patient a year ago going to come back with a new patient at the last minute and stay alive for another year? Or is the new center that's gotten on contract and ready to start treating patients, did they get the right type of patient that could be treated this month? Or is it going to have to wait until next quarter going through their prior authorization process.

So we'll see a little bit of choppiness as far as the net number of adds per quarter, but averaging around high single digits throughout '26 is the expectation.

Got it. And so the U.S. is still the majority of your revenue base and your focus, but maybe we could talk a little bit about international markets and how you think about the overall opportunity there?

Yes. So I would say we were approved in 2014 in Europe for the treatment of hypertension, and we have a heart failure indication there as well. Europe has changed dramatically since that time. We are still active. We have a small team there. We're active in 7 or 8 markets, but it's not a focus today, just based on the reimbursement challenges in those markets, we don't see it as a viable alternative to investing in the U.S.

So we're continuing to serve customers. We're growing that business, but it's really more of a holding pattern to some degree until we see further progress on the reimbursement front on patient access in Europe. So it's really largely our focus is in the United States, where as Jared said, we're only beginning to scratch the surface of this indication.

Great. And now let's shift focus a little bit more into the business performance and the overall financials. We are roughly 6 months into the year and your current guidance is for $63 million to $67 million. You guys beat in the first quarter. So how do you think performance has tracked relative to your original expectations so far?

Yes. So this is a year of execution. That's how we framed it up at the beginning of the year when we released this guidance back in early January. So in 2025, our annual growth rate was around 9% or 10%. It was the lowest growth that we had seen since commercializing this opportunity. And in a large part, it was tied to the fact, like Kevin had mentioned, that we transitioned 70% of that sales force on the U.S. side of the business over the last 2 years.

Now that we reestablished that new team in place in 2024, in 2025, the expectation is more of those reps are going to start working their way up that productivity curve. As we set guidance in 2026, the midpoint of that number was set at 15% [Audio Gap] number we saw from 2025. Q1 results were closer to 20% growth across the worldwide business, even greater if you just look at the U.S. side stand-alone. So we were really happy with the performance we saw in the first quarter, but it's one data point, right? And so now our expectation is as we go through the year, and we continue to repeat that growth of 15% plus in 2026, knowing that our long-term goal is to continue to accelerate into the mid- to high 20% as we get into '27 and beyond.

Again, not giving guidance for those out years at this point in time, but we believe this is a massive market opportunity, and we're just scratching the surface. So as we bring down those barriers to adoption, like with reimbursement and getting this coverage policy with Humana, and see our approval rates in prior authorization for the stand-alone month of April achieve 60% at 30 days, we're happy with the performance we've seen to this point in the year.

Can I ask just a question on -- you talked about this year as a year of execution. I mean every year is kind of a year of execution, but you've got this massive opportunity in front of you. You're at a point of revenue where it's -- you're in the sort of build phase of the company. I'm guessing like other early-stage medical device companies, breakeven is probably in like the $250 million revenue run-rate range. Like can you execute this strategy fully effectively as a stand-alone independent company? Or do you need to partner or consider being part of a large organization?

Yes. Maybe I'll just call out a couple of points in that question. Again, not drawing a line in the sand, but I think that is a bit high for what we're modeling for a breakeven point. The way we've described it as a business is trying to get each of these active territories treating about 60 patients a year or generating about $1.8 million in revenue. We're going to continue to add active territories, but to reach breakeven as you continue to improve productivity on a per rep.

As far as executing this strategy on a stand-alone basis, that is very much our right? We have built this business from the ground up, building a commercial sales force. And now it's all about optimizing it and starting to see leverage in this model. As we continue to see these individual reps treat more and more patients in their individual territories, we expect that to come through on the bottom line, helping to reduce that cash burn.

And from a stand-alone balance sheet perspective, with $72 million in the bank, we've stated we have at least 2 years of cash available to us. We could draw an additional up to $40 million from this debt facility, allowing us to have access to 3-plus years of cash available today. That being said, it doesn't mean that we won't go raise money at some point in the future, right? We believe in the opportunity and the ability to grow this business at a faster pace. And so if the timing is right, we may consider raising capital at some point in the future. But the nice thing is with our balance sheet and access to draw on this debt facility, we don't have to do anything today.

Maybe I would add as well to Jared's point, that we have -- we believe we can absolutely successfully commercialize this therapy without the need of a broader -- much broader team or organization. We have built, we believe, a world-class distribution channel into heart failure. There are very, very few heart failure specific channels in our markets. Abbott has one. We have one, but the others are relatively smaller and in their infancy.

So our intention -- and this trial, interestingly, Jared mentioned, it triples our addressable market, but it does that by addressing two very adjacent patient populations who are being seen by the same physicians in the same clinics for the same disease. So that's patients with slightly elevated ejection fractions, slightly elevated NT-pro. So we have a really unique opportunity with our given channel to dramatically increase our market opportunity without the need for a different channel or a different call point or a different set of skills.

So we think we can build critical mass. We can build a world-class team. And as Jared mentioned, we're only now scratching the surface in terms of the patients we can help.

And as we go down the P&L and thinking about the rising input costs, and we've seen where oil is, we've seen where freight is, how do you guys think about the margin progression through the year?

Yes, it's a great question. So obviously, exceeding expectations in Q1 compared to our annual guidance was a positive story, and it was done twofold, right, by seeing higher-than-expected average selling prices and being able to drop that cost per unit. We actually produce the device at our office in Minneapolis, Minnesota. And so we have very clear visibility as to the overall cost structure of each of these units.

We know we have additional capacity to be able to expand how many units we're building on an annual basis, which should help drive that overall cost per unit down as well. So from a gross margin perspective, that range of 85% to 87% on the year, we still believe is just a starting point. There are opportunities to see improvements in that number in the coming years as we continue to produce more and more units to drive those costs down.

On the spend side of the house, so much of our spend goes into headcount today. And it really is in those early reps that are getting up to speed where we're spending money, but not necessarily seeing the full productivity out of them. So as they get more tenure and get up that productivity curve, that's where we see the most leverage coming within our model today to bring that overall cash burn and loss down moving forward.

Great. And with the minute we have left, Kevin, maybe I turn it back to you for any closing remarks and make sure you really are able to send the clear message as to what you hope that investors and the audience capture here.

Yes. So thank you. We obviously -- we're operating in a largely historic pharma market, one of the last massive markets that has limited device exposure. There are millions and millions of patients who can benefit from medical devices. We believe hundreds of thousands from Barostim therapy specifically. So we think we have all the necessary components to both serve those patients and create significant value, highly differentiated therapy, obviously, clear safety record, solid quality of life data and more and more data now on hospitalization that suggests that this could be a very meaningful alternative for these patients who are sitting home, the forgotten middle that are home on these medications or not and suffering.

So we've got the right team. We think we have the right strategy. We've got the capital we need. And so it's our intention to put our heads down. As Jared said, this is a year of execution and to build this business and build from this new foundation we've created to serve these patients and create significant value.

Great. Well, that's all the time we have for now. Thank you all for coming.

Welcome. Thank you.

And Jared, good luck on your next role.

Thank you.

Greetings, and welcome to the CVRx Q1 2026 Earnings Call. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Mike Vallie from ICR Healthcare. Thank you. You may begin.

Good afternoon. Thank you for joining us today for CVRx's First Quarter 2026 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 our first quarter 2026 earnings call. We delivered a strong start to 2026, exceeding the high end of our guidance range, driven by 22% growth in the United States. The investments we made throughout 2025 are beginning to positively impact our results. Last year, we worked deliberately to strengthen our sales organization, refine our go-to-market approach, advance critical reimbursement initiatives and to secure approval for our landmark clinical trial. This quarter shows early evidence that the foundation we have built is translating into results.

As we move through 2026, we remain focused on executing against the same 3 strategic priorities that have guided our work to date, building a world-class sales organization, driving deep adoption in targeted centers and continuing to reduce the barriers to adoption of Barostim therapy. Starting with our sales organization, we're pleased with the progress we're seeing from the team. We're seeing meaningful contributions from a broader and more experienced sales team, reflecting the quality of talent we've been able to attract, the discipline we've brought to onboarding and training and the program-focused selling approach that the team is increasingly comfortable executing. We continue to expand both our active implanting center base and our territory footprint during the quarter, and we expect to maintain this cadence of expansion through the balance of the year.

Our second priority is driving deep adoption in the centers we've targeted. Our program-focused playbook emphasizes intentional targeting, building a redundant network of clinical and administrative stakeholders and establishing a defined Barostim workflow. In the accounts where all of these elements are in place, we're seeing Barostim becoming part of how heart failure is routinely managed rather than an episodic consideration, resulting in higher utilization. This remains the foundation for the long-term growth of our business.

Our third priority is continuing to address the 3 fundamental barriers to the adoption of Barostim therapy, patient access, therapy awareness and clinical evidence. We made meaningful progress on all 3 fronts in the first quarter. Starting with patient access, the transition to Category I CPT codes, which took effect on January 1, is the most significant reimbursement advancement in our company's history, and we're already beginning to see its impact. Our 30-day Medicare Advantage prior authorization approval rate for submissions managed by our in-house market access team was 46% for the first quarter of 2026 as compared to 31% in 2024 and 44% in 2025.

Within the quarter, our approval rate was 50% through the first 2 months before declining in March. While we are encouraged by the underlying year-over-year improvement tied to the new Category I code, the March softening reflects the impact of simultaneous changes in the broader reimbursement environment that are affecting our company and others across the medical device industry. Effective January 1, new regulations require Medicare Advantage payers to respond with a decision to a prior authorization request within 3 or 7 days, depending on urgency as compared to the previous 14-day requirement.

As a result, certain payers implemented new automated review processes beginning in late February in response to these compressed time line requirements. This has resulted in a higher rate of initial denials, particularly in March on the basis of an experimental designation, even for therapies with established Category I codes and well-documented clinical evidence. Importantly, this is not a reflection of a change in the clinical or coverage rationale for Barostim. This is a new administrative dynamic that is being seen broadly across the device industry, which is not unique to our therapy. We believe that this is simply a timing issue and not a change to the ultimate approval rates because when our market access team appeals these decisions with additional clinical documentation, most of the initial denials are overturned successfully.

While the underlying coverage position for Barostim has never been stronger, our goal is to adapt to this changing environment and to ensure that every submission meets this increasing administrative scrutiny on the front end. Our market access team is implementing this approach with patients and providers through our in-house prior authorization service as well as supporting physician practices with their independent prior authorization efforts to ensure that they effectively navigate this changing environment. We believe the long-term trajectory for patient access remains strongly positive, and we expect these payer processes to continue to normalize as the industry adjusts to the new regulatory framework.

As it relates to therapy awareness, we continued to expand our medical education efforts during the quarter with a particular focus on the advanced practice providers who manage most of our indicated heart failure patients in the community. We also had a meaningful presence at several important cardiology meetings during the quarter, including multiple presentations at the THT and ACC meetings that reflect the growing body of clinical evidence supporting Barostim. These engagements continue to drive strong interest in Barostim therapy among the clinicians who are best positioned to identify candidates for treatment.

Additionally, shortly after the first quarter, we piloted our first educational symposium focused on nurses in community cardiology practices, extending our outreach beyond advanced practice providers to the registered nurse coordinators who also play a key role in managing heart failure patients in the community. In terms of clinical evidence, the recently initiated BENEFIT-HF trial is a landmark randomized controlled trial evaluating Barostim in an expanded population of heart failure patients with ejection fractions up to 50% and NT-proBNP levels up to 5,000. If successful, this trial would expand our prevalence-based addressable market from approximately 339,000 patients today to over 980,000 patients, effectively tripling our market opportunity to approximately $30 billion.

I'm pleased to share that we activated the first site in our BENEFIT-HF trial in the first quarter and enrolled our first patient last week. The feedback from the heart failure community on the rigor and scale of the trial design has been very positive. Beyond the clinical objectives of the trial, we're seeing meaningful engagement from centers that are interacting with us for the first time because of BENEFIT-HF, which we believe will contribute to broader awareness and visibility for Barostim therapy.

To wrap up, the first quarter reflects positive momentum across every part of our business. Our sales team is executing, the reimbursement environment is improving and our clinical evidence program is advancing on schedule. We remain focused on continuing to execute through the balance of 2026, and we're confident in the path ahead.

Now I'd like to turn the call over to Jared for a financial review.

Thanks, Kevin. Unless otherwise stated, year-over-year comparisons are for the 3 months ended March 31, 2026, compared to the 3 months ended March 31, 2025. In the first quarter, total revenue generated was $14.8 million, an increase of $2.4 million or 20%. Revenue generated in the U.S. was $13.7 million, an increase of $2.5 million or 22%. Revenue units in the U.S. totaled 429 and 359 for the 3 months ended March 31, 2026 and 2025, respectively. The increases were primarily driven by continued growth in the U.S. Heart Failure business as a result of the expansion into new sales territories, new accounts and increased physician and patient awareness of Barostim.

We ended the quarter with a total of 257 active implanting centers as compared to 252 as of December 31, 2025. We had 56 sales territories in the U.S. at the end of the quarter compared to 53 at the end of 2025 and 45 on March 31, 2025. Revenue generated in Europe was $1.1 million, a decrease of $27,000 or 2%. Total revenue units in Europe decreased to 56 from 59 in the prior year period. The number of sales territories in Europe remained consistent at 5.

Gross profit was $12.9 million for the 3 months ended March 31, 2026, an increase of $2.6 million or 25%. Gross margin increased to 87% compared to 84% 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 $0.6 million or 23% to $3.1 million compared to the prior year period. This change was driven by an increase in consulting expenses, compensation expenses and noncash stock-based compensation expenses, partially offset by a decrease in clinical trial expenses.

SG&A expenses increased $0.7 million or 3% to $22 million compared to the prior year period. This change was primarily driven by an increase in compensation expenses and noncash stock-based compensation expenses partially offset by a decrease in consulting expenses and advertising expenses. Interest expense increased $94,000 to $1.6 million compared to a year ago. This increase was driven by the increased borrowings under the term loan agreement with Innovatus Capital Partners. Other income, net, was $0.6 million compared to $1.1 million. These balances consisted of interest income on our interest-bearing accounts. The decrease was primarily driven by the lower cash balance.

Net loss was $13.1 million or $0.50 per share for the first quarter of 2026 compared to a net loss of $13.8 million or $0.53 per share for the first quarter of 2025. Net loss per share was based on 26.4 million weighted average shares outstanding for the first quarter of 2026 and 25.9 million weighted average shares outstanding for the first quarter of 2025. As of March 31, 2026, cash and cash equivalents were $72.3 million. Net cash used in operating and investing activities was $12.3 million for the 3 months ended March 31, 2026, as compared to $12.9 million for the 3 months ended March 31, 2025.

Now turning to guidance. For the full year of 2026, we continue to expect total revenue between $63 million and $67 million. We now expect full year gross margin between 85% and 87%. We continue to expect operating expenses to be between $103 million and $107 million. For the second quarter of 2026, we expect to report total revenue between $15.1 million and $16.1 million.

With that, I'll now turn the call back over to Kevin for closing remarks.

Thank you, Jared. The first quarter reflects a strong start to the year and gives us confidence in the path ahead. Our sales organization is maturing, the reimbursement environment is improving and the initiation of BENEFIT-HF opens a meaningful new chapter for our company and for the heart failure patients that we serve. We have more work to do, and we remain focused on execution as we continue to advance Barostim toward becoming a standard of care for the treatment of heart failure.

Now I'd like to open the line for questions. Operator?

[Operator Instructions] The first question is from Brandon Vazquez from William Blair.

It's Max on for Brandon. Kevin, I just wanted to start with one on the prior authorization stuff. I understand that the dip in March was due to some of the automation that you mentioned. Can you just touch on how some of the practices you guys have put into place to address this have trended thus far? And higher level, what's included in 2026 guidance for any potential ongoing headwinds in that case?

Sure. Thanks. Appreciate the question, Max. So I'll let Jared address the guidance piece. But upfront, as I mentioned, this was an unexpected and inadvertent effect of some new federal regulations that went into place on January 1. We first saw this in late February. And what we saw was an increase in kind of immediate denials often for, again, experimental reasons, but in fact, because of administrative gaps in the prior authorizations, or effectively missing signatures, or they're using AI as we can best tell to find any missing data they possibly can to serve as a grounds for immediately denying a prior authorization request, which then buys them the additional time they now need under the new rules to properly evaluate.

So we have responded working closely, obviously, with an in-house team that does this day in and day out. We have lots of physicians who do it themselves, but have begun using our own AI tools to ensure that every possible T is crossed and I is dotted in these very lengthy prior authorization requests so that we can defeat this attempt to buy time, which is what we believe it effectively is.

Importantly, what we're seeing, and this has been corroborated with partners across the industry through the back channels, we see a very healthy overturn rate. So we think this is really -- if it's a surprise, it's that these are taking a little longer than we thought they would. But the ultimate approval rates, we think, will be as good or better as the prior chapter under Category III. So I think it's a temporary situation. We're all working our way through it. But I think it's something that will not affect ultimately the approval rates for the therapy. Jared, do you want to cover the second part of the question?

Yes, happy to. And Max, just to clarify as well, one of the things that we're watching really closely is that 30-day approval rate. And so we just received that 30-day approval rate for March at the end of April, noting a slight decline from what we had seen in the January and February data. So I just wanted to clarify that piece. And then as for the guidance, we didn't really know what was going to happen with Category I. We assumed it would lead to more or higher approval rates for our prior authorizations that we're supporting in 2026, but we didn't want to bank on that as we were setting up the guidance for 2026.

And so to hit the numbers that we had put in the initial guide, we assumed very consistent 30-day and 60-day approval rates for cases that required prior authorization support. And so I think Kevin mentioned it in the prepared remarks, last year, we saw 30-day approval rates of roughly 44%. So far in Q1, we're at 46%, so doing slightly better year-to-date. And so if that continues, then we shouldn't see any issues as far as hitting the guide that we had initially set.

Although I'll just add, Kevin mentioned, longer term, we're still expecting this to just be a timing issue. We do expect the appeals' approval rate to be greater for these Category I cases as the documentation is refined. So we still expect there to be a greater final or terminal approval rate for these prior authorizations under Category I, but we're not going to bake that into guidance until we actually see it play through, play out.

That's helpful. And then just for a follow-up, congrats on enrolling the first patient BENEFIT-HF. How should we think about that progressing as the year moves on? And Kevin, I believe you mentioned in your prepared remarks that it was helping you guys get your foot in the door with some new centers that may not have been familiar with Barostim. Can you just talk to us about that dynamic specifically and then broader, how we should think about the ramp of the trial throughout the rest of the year?

Sure. I'll maybe cover the second part first and let Jared cover your initial question. But as we've mentioned, this is a landmark trial in heart failure. It's a landmark trial for our company, the largest, we believe, therapeutic device trial ever done. And there's kind of 2 ways to think about it. If you think about the barriers to the adoption of the therapy, which are awareness, evidence and patient access, this trial touches on all 3 of those, and it's driven significant awareness for us. It will be a foundational element of our long-term evidence portfolio.

And number three, the Category B designation effectively creates a national coverage decision for patients enrolled in this trial. And that's a population that's 3x bigger than our current population. So it sort of checks all 3 boxes in terms of helping us further reduce barriers. On a more practical level, it is indeed for those ultra-conservative centers that perhaps haven't yet been ready to adopt Barostim. It is an excellent engagement tool, and many of them are, in fact, willing to implant Barostim under the auspices of a trial like this.

For those that have already adopted Barostim, it's an equally interesting engagement tool because it allows them to treat many, many more patients, often patients they're turning away for Barostim today. So I think there are a number of different tailwinds. We've not necessarily baked those into our data yet. But we think it and have already seen evidence that this is seen as a leadership confidence boosting signal from the company and a project that many of our physicians want to be part of.

Yes. And Max, to address the ramp question. So we are really happy to see the first couple of sites activated, that first patient enrolled in the trial so early in the year. But we are still being a little cautious as far as what we're going to bake into expectations for 2026. So we're going to need a little bit more experience with our site activation process before we start setting expectations on how many new sites could be activated each month and therefore, by the end of this year.

So we're starting to think about this in terms of multiple quarters, maybe multiple years to get all of these sites up and running. It could take 12 to 24 months to get to that target of 150 sites activated and fully starting to enroll this trial.

The next question is from John Young from Canaccord Genuity.

Kevin and Jared, congratulations on the quarter. I just wanted to start off on the reiteration of the revenue guidance. You guys had a solid Q1 beat. I'm wondering the reiteration itself, is that just Q1 conservatism? Or are you seeing anything maybe beyond the reimbursement dynamics that you already highlighted as we sit here in May?

Yes. Happy to take that one, John. So yes, I mean, 1 quarter in at this point, this is a year where we are reaccelerating our growth rate after doing a lot of team building and rebuilding kind of the ground floor of the company over the last couple of years. And so we just simply didn't want to get ahead of ourselves from a guide perspective with updating the full year number after just the first quarter. So we're really happy with the results of seeing that reacceleration get back to 20% growth. But just don't want to get ahead of ourselves by updating guide too early in the year.

Great. And to also just touch on the MA prior authorizations. When they get close 50%, can you just remind us again of willingness of MA payers to create policies? And can you also remind us again, do you need prior authorization for patients enrolled in BENEFIT-HF?

Sure. Thanks, John. So I'll take the second one first. The short answer is no, we don't, which is obviously a benefit. So patients that are eligible and enrolled in the trial will be treated almost as traditional Medicare patients. No prior authorization required. So that's a positive. As it relates to the first question, can you remind me?

Yes. If you get greater than a 50%...

Yes. No. So John, the way this works, and we've described it sort of as a war of attrition. But effectively, roughly 10% of all denials are ever appealed. Those that are appealed across the spectrum, 80-plus percent of them are ultimately approved. So it's really about -- it's about not giving up and being tenacious in the way that we appeal each and every denial.

And the number we've quoted, if you push it all the way to the end of the process, which is the administrative law judge review, the industry data would suggest once the payers begin losing not even 50% of those -- high 40 percentages, they will then begin to approve without having to go to ALJ because the ALJ process is expensive and they bear that cost. So that's maybe the number you're referring to. It's about 48% from what we understand.

And just to follow up on that, is there any expectations on your end of when we could approach that number?

We are starting to see -- we're in that neighborhood with a number of payers already. And I guess I didn't answer the part of your question. Once you cross that threshold, you then ideally move into a situation where you often have silent coverage. So they don't yet have a written policy, but they are, in fact, approving. Eventually, then you move on to a written coverage policy through a number of different mechanisms. So that's still some years away, but we're pleased with what we're seeing as we move through this process, and we're pleased with the number of these administrative law appeals that we ultimately win.

The next question is from Matt O'Brien from Piper Sandler.

This is Sam on for Matt. I guess, first, I just want to touch on that ASP in the quarter, which looks really nice, which is a little bit different than historical seasonality where we see a dip in Q1. Can you talk about your expectations for ASP the rest of the year? And is this related to the Cat I Code and any other details there would be great.

Yes, happy to take that one, Sam. So I think we're seeing close to $32,000 ASPs on the U.S. business for the first quarter, a nice step up again from the average that we saw in 2025, closer to $31,500. I'm still a little reluctant to bake that into expectations throughout 2026 at this point in time, kind of expecting that number to be around $31,000 or maybe $31,500 throughout the year. But we are incentivizing the sales team to go out and capture as high of an ASP as possible. So the team will continue to push on that to see that number potentially grow over time, just not baking that into expectations for '26.

Okay. That's helpful. And then also going back and touching on BENEFIT-HF, how long do you anticipate this trial to enroll? And any expectations on ultimately when you think potentially the TAM could triple?

Yes. It's a good question. As we laid out this trial, we talked about a time line of 5 to 7 years, knowing that once we fully enroll the trial, there's going to be a 2-year follow-up period for that final patient. So if we kind of hit the middle of that target, it will take about 4 years to enroll the 2,500 patients. And then 2 years afterwards to follow them up. So you're talking 6 years from the beginning of the trial this year out into the early 2030s before we could potentially see that FDA approval.

The next question is from Frank Takkinen from Lake Street Capital Markets.

I was hoping to start with a conversation around some higher utilization sites. I think previously, you've spoke to top 20% of sites averaging in the neighborhood of 1.5 procedures per month. Can you maybe speak to that top 20% cohort, what their utilization rates are looking like today? And then any commentary towards kind of the opposite of that question of more sites graduating into that 1.5 per month rate?

Yes. I appreciate the question, Frank. We were trying to draw a line in the sand for investors in the outside community to understand what is possible with these centers. And so we pulled that as an ad hoc analysis in the fourth quarter for our top 20% of centers to note that they were doing more than 1 patient per center per month to show what is possible for these centers as we continue to build out our programs.

I don't think it's going to be a metric that we're going to share on a quarterly basis because we do know that there is some seasonality that plays in as we look to the results from Q4 then going into Q1. But maybe on an annual basis, doing a reflection of how many more of those centers are now reaching that threshold of hitting 1 patient a month. So maybe given a refresh on that number in Q4 this year.

Okay. Fair enough. And then maybe I'll try another one that you may be reluctant to answer, but can you speak to prior auth rates in April by chance? And just trying to understand if we had 50% in the first 2 months and then ended at 46%, I think that implies that March was maybe high 30s. And just curious if it was kind of up or down from that prior auth rate.

Yes. I don't think March was quite that bad, Frank. There is a little bit of just how many prior auths were being processed in the month of March compared to January and February. We did have a bit of a bolus coming through in the month of January that helped drive that rate a little bit higher. But as for April, we are seeing it bounce back. But again, we don't have 30-day rates yet for the month of April. All we have is about 11 days' worth of data for all of the prior authorizations that were submitted in the month of April at this point in time.

What we are seeing in those early rates is seeing a little bit of a bounce back closer to the January, February approval rates than what we saw in the month of March. So again, we're expecting this to be a little bit of up and down as we implement new tools and other payers implement new tools to adapt to this new regulatory -- regulation that was issued at the beginning of the year. But we are seeing it bounce back a little bit in the early data for the month of April.

The next question is from Chase Knickerbocker from Craig-Hallum Capital Group.

Maybe just to follow up on a couple on the dynamic here with Medicare Advantage. Can you just remind us the mix between Part B and Medicare Advantage as far as within your Medicare business?

I think I can take that one, Frank. So the traditional -- or sorry, Chase, I'm sorry. The traditional Medicare patients represent about 1/3 of our overall patient population. Medicare Advantage patients represent another 1/3. The remaining 1/3 of the patient population are private payers, VA, maybe uncovered patients included in that population. So 2/3 are covered by Medicare, but it's split 50-50 traditional Medicare and Medicare Advantage.

And that reflects your kind of current business mix?

Yes. Yes. We're basically in line, if not a little bit heavier weighted towards these Medicare patients.

Got it. And just to follow up on Frank's question. Your guidance assumes that kind of approval rate that you saw in '25. Can you just maybe speak to your comfortability? Is it what you've seen in April as far as kind of that rate in March kind of recovering? Or did it really not impact revenue trajectory in March? Just maybe speak to kind of the comfortability around that trend.

Yes. Yes. It's the latter, Chase. Yes, we're feeling good about the guidance that we provided top line. We're at a point where we believe the MA approval rates at 30 days or even the terminal rates are going to be as good or better than what we've seen in 2025. But we want to see this play out a little bit further before we would tighten the range on the guidance.

Got it. Just last one for me. As we just think about July approaching and the OPPS proposed rule, have there been any conversations that are notable or any sort of -- anything you can share as far as any conversations that have happened around your APC placement or any additional thoughts that you guys have there?

Sure. Thanks, Chase. I'll take that one. And it's time for Groundhog Day, I guess, again. The good news is we've been working on this as we have in past years since January, very constructive engagement with CMS. Our data is better than it's ever been as is the combined data of this coalition of 5 companies. Importantly, all 5 companies this year are starting in 1580, which has not been the case in the past. So we think that bodes well for this year's cycle, and we're hopeful that this will be the year that we can finally put this issue to bed. But no specifics right now or commitments, obviously, from CMS, but lots and lots of engagement.

The last question comes from Robbie Marcus from JPMorgan.

This is Allen on for Robbie. I just had a quick one on your expectations for center adds this year. I think you had previously talked to an average of, say, high single-digit centers per quarter. I think first quarter was, relative to our expectations, a little bit on the lower side. But I was curious about the commentary that you had said about the trials potentially bringing in new centers that hadn't historically been CVRx customers.

So understanding that the onboarding process for these centers is a longer process, how should we think about that expectation for high single digits? Could there be potentially some upside pressure as some of these newer accounts are brought in through the trials rather than maybe your -- the standard base commercial efforts?

Allen, happy to take that question. Thank you. So our expectation is that the vast majority of the centers that will be activated in BENEFIT-HF will have experience with Barostim already. So we don't believe that this is going to be a significant driver to the new center adds near term. Over time, as we engage some of those new centers and they start to treat patients, they will be included in the active implanting center totals. But I don't think that, that's going to have an impact over the next few quarters throughout 2026.

As far as expectations go for the new center adds on a quarterly basis, we are still setting the expectation for high single digits on a net basis on a quarter-to-quarter, but we may see some variability like we did in the first quarter where we were plus 5 here in the first quarter. So maybe one quarter we get to low double digits. Other quarters, we're hovering around 5 or 6 new center adds on a quarterly basis.

Got it. And then just a quick follow-up on the Medicare Advantage dynamic. When we think about having to have your market access team appeal these decisions and in light of your, I think, reiterated operating expense guidance, is there a chance -- does this factor in potentially having to expand that team to have to address this higher rate of denials, potentially invest a bit more to make sure that you are continuing to go on the offensive while also addressing these denials? Or is that something that you don't think -- something you think you can handle with your current team as is?

Yes. Thanks, Al. That's a great question. The short answer is no. We do not. We are deploying AI to respond to AI in effect. And so we don't believe that our team will be any less efficient or that the burden on them will change dramatically. We're sort of responding to a new tool or trick that's being deployed against us, and we're confident we can respond appropriately and that, that team can continue to support prior auths in roughly the same -- with the same efficiency that they have historically.

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

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

This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.

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 therapy in the year that they are diagnosed. They can live 4, 5 or 6 years within our indication as their disease progresses and benefit from treatment throughout that time.

When considered on this prevalence basis, there are 339,000 patients today who are indicated and who could benefit from Barostim therapy, representing a $10.5 billion market opportunity that remains well less than 1% penetrated.

Our focus remains on making this therapy widely available to all patients who can benefit. In 2025, we built the foundation necessary to reach more of these patients by executing on our three strategic priorities: building a world-class sales organization, driving deep adoption in targeted centers and reducing the barriers to adoption.

Starting with our progress on the sales force, we undertook a deliberate transformation of our commercial organization to build the right team for our next phase of growth. We're pleased with the quality of talent that we've attracted and the progress that we're seeing in their development. By year-end, we'd expanded to 53 territories with 252 active implanting centers, up 10% and 13%, respectively. This expansion positions us with the capacity to drive meaningfully higher growth as our reps mature.

While integrating these many new representatives has created some near-term impact on growth, we're increasingly confident in the team's ability to execute our program-focused selling approach as they gain experience.

We've also implemented several important changes to accelerate the productivity of our sales team. We've optimized our field leadership structure, added dedicated training resources and focused our representatives on a narrower set of high-potential accounts, typically 3 to 5, where they can drive deep adoption and truly change clinical behavior.

Our second priority is creating sustainable Barostim programs that demonstrate deep adoption and consistent utilization. We are starting to see the validation of this approach, as evidenced by higher and more consistent utilization at the account level.

The path to creating a sustainable program starts with the intentional targeting of high-potential centers. This is followed by the development of an aligned and redundant stakeholder network that includes not just a clinical champion, but administrative support, multiple prescribers and multiple implanters.

The final necessary element is a defined Barostim workflow that ensures effective and efficient patient identification, referral, screening and implantation.

Where we see these three elements in place, we see deeper adoption and consistent utilization, creating a flywheel effect. Barostim becomes part of how heart failure is routinely managed rather than an episodic consideration.

Importantly, in the accounts where this flywheel effect is beginning to take hold, we're seeing significant additional runway for much deeper penetration. For example, the top 20% of centers had an annualized implant rate of about 19 implants in Q4. We believe each of these top centers has approximately 300 patients who are currently indicated for the therapy. This demonstrates the substantial opportunity that we have through continued program development in our existing account base.

Our third priority is our continuing focus on addressing the three fundamental barriers to the adoption of Barostim therapy: Patient access, therapy awareness and clinical evidence.

As it relates to patient access, the most significant and impactful development is our transition to Category 1 CPT codes, which took effect on January 1, 2026. This major milestone is an important validation of Barostim therapy from the perspective of physicians, hospitals and payers.

The Category I code will improve patient access by eliminating the automatic prior authorization denials associated with Category III codes, improving reimbursement predictability and formalizing the implanting physician payment at a national average of approximately $560. We believe that this change will meaningfully reduce friction in the prior authorization process going forward.

We're also seeing encouraging progress in our ongoing efforts to improve coverage. Our 30-day Medicare Advantage prior authorization approval rate reached 46% in 2025, up from 31% in 2024. This represented remarkable progress for a therapy with a Category III code. And with the Category I code now in effect, we're optimistic that these approval rates will continue to improve.

On the awareness front, we significantly expanded our medical education programs in 2025. We completed over 150 local, regional and national educational events targeting physicians and advanced practice providers, who manage heart failure patients in the community.

Our focus on APPs, the nurse practitioners and physician assistants who see these patients far more frequently than physicians; has become a key leverage point in building sustainable referral networks around our targeted centers.

Finally, regarding clinical evidence, we recently announced the initiation of the landmark BENEFIT-HF trial following CMS approval of Category B IDE coverage last month. This prospective randomized controlled trial will evaluate Barostim's impact on all-cause mortality and heart failure decompensation events in an expanded population with ejection fractions up to 50% and NT-proBNP levels up to 5,000.

The trial is expected to be one of the largest therapeutic cardiac device trials ever performed in heart failure, randomizing 2,500 patients at approximately 150 centers in the United States and Germany.

If successful, this trial would expand our prevalence-based addressable market from approximately 339,000 patients to over 980,000 patients, effectively tripling our market opportunity to approximately $30 billion. Importantly, patients with higher ejection fractions and NT-proBNP levels are already being seen by these same clinicians that we work with today, making this an easily accessible adjacent population.

The CMS approval of Category B IDE coverage is critical as it ensures Medicare coverage for patients enrolled in the trial, reimbursing hospitals at approximately $45,000 per procedure, consistent with current commercial reimbursement rates. With CMS coverage secured, we expect to begin enrollment in the second quarter of 2026. The net cash impact from the trial is expected to be $20 million to $30 million spread over 5 to 7 years, with the majority coming in the later years.

Beyond this randomized controlled trial, we continue to develop real-world evidence and to support investigator-initiated research, demonstrating positive patient outcomes, including reductions in hospitalization, improved ejection fraction and improvement in cardiac function.

We also strengthened our balance sheet in early January through an amendment to our debt facility that extends the maturity date to 2031 and provides access to additional capital as we achieve certain milestones.

In summary, 2025 was a year of building the right foundation for sustainable growth. We transformed our sales organization with high-quality talent, validated our program selling strategy with proof of deeper adoption and made significant progress in reducing the barriers to adoption, including significantly improving patient access to Barostim therapy.

Importantly, we also secured approval and coverage for a landmark randomized controlled trial, which has now been initiated, with first enrollments expected in the second quarter of 2026.

While our growth rate reflected the natural ramp period for our newer sales reps, we made meaningful progress on the strategic elements necessary to drive improved performance. We believe these initiatives will support our accelerated growth and make Barostim therapy more accessible for heart failure patients in 2026 and beyond.

Before Jared discusses the financials, I'm excited to announce that Greg Morrison was appointed as our new Chief Human Resources Officer and will be joining CVRx in March. He will succeed our current CHRO, Tonya Austin, who is stepping back due to personal reasons.

Greg brings over 30 years of leadership experience in medical devices, serving as the Senior HR Officer in 7 different medical device companies. We are grateful to Tonya for her significant and impactful role in the transformation of our commercial team and appreciate her continued support through the transition period.

Now I'll turn the call over to Jared for a detailed financial review.

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 result of increased headcount, partially offset by a $0.1 million decrease in clinical study expenses.

SG&A expenses increased $1.8 million or 9% to $22 million compared to the prior-year period. This change was driven by a $1.3 million increase in compensation expenses, mainly as a result of increased headcount, a $0.5 million increase in advertising expense and a $0.3 million increase in travel expense, partially offset by a $0.3 million decrease in consulting expense.

Interest expense decreased $0.1 million to $1.4 million compared to a year ago. This decrease was driven by the lower interest rate on the levels of borrowings under the term loan agreement with Innovatus Capital Partners. Other income net was $0.7 million compared to $1.1 million. This decrease was primarily driven by less interest income on our interest-bearing accounts.

Net loss was $11.9 million or $0.46 per share for the fourth quarter of 2025 compared to a net loss of $10.7 million or $0.43 per share for the fourth quarter of 2024. Net loss per share was based on 26.2 million weighted average shares outstanding for the fourth quarter of 2025 and 24.7 million weighted average shares outstanding for the fourth quarter of 2024.

As of December 31, 2025, cash and cash equivalents were $75.7 million. Cash used in operating and investing activities was $40.8 million for the year ended December 31, 2025, compared to $40.5 million for the year ended December 31, 2024.

Regarding our balance sheet, in January, we amended our term loan agreement with Innovatus Capital Partners to increase the existing facility by $50 million to an aggregate principal amount of up to $100 million, subject to achieving certain milestones.

At closing, we borrowed an additional $10 million, bringing our total outstanding principal to $60 million. The interest-only period is extended 4 years from the closing date and is extendable to 5 years upon achieving certain revenue milestones. The term loans mature in May 2031.

Now turning to guidance. For the full year of 2026, we expect total revenue between $63 million and $67 million. We expect full year gross margin between 84% and 86%. We expect operating expenses to be between $103 million and $107 million. For the first quarter of 2026, we expect to report total revenue between $13.7 million and $14.7 million.

With that, I'll now turn the call back over to Kevin for closing remarks.

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.

Good afternoon, everyone. I'm Robbie Marcus, the med tech analyst at JPMorgan. Thanks for joining us today. Happy to present CVRx, our next presentation here. CEO, Kevin Hykes will do some slides and presentation followed by some Q&A. Kevin?

Thank you, Robbie. Good afternoon. It's my pleasure to present to you today on behalf of CVRx, these are our forward-looking statements. Additional risk factors are available on our website. CVRx has developed the world's first autonomic neuromodulation therapy for the treatment of heart failure. We have a $10.5 billion prevalence-based market, a well-defined patient population and a highly differentiated therapy, and we believe a plan that will allow us to move this therapy to standard of care for the treatment of heart failure.

Heart failure is a burdensome life-limiting disease that affects nearly 6.7 million Americans, results in over 1 million hospital discharges each year, over 1 million emergency room visits, over 8 million physician visits and has costs that will reach almost $70 billion per year by the end of this decade.

Heart failure is characterized by a progressive decline in quality of life and increasingly frequent hospitalizations. When first diagnosed, heart failure patients are initiated on a combination of 4 drugs called quad therapy. Today's guideline-directed Class 1 treatment for heart failure. A limited number of those patients are also evaluated for a pacing therapy called CRT or cardiac resynchronization therapy. It's a relatively small sliver that are eligible for that. The rest are not. At the end of their disease journey, patients, 2% are evaluated for left ventricular assist device or cardiac transplantation, but many are not eligible and move to hospice to finish their lives. In the interim period, patients are left suffering with debilitating symptoms and significantly reduced quality of life. That's been the paradigm for the treatment of this disease for over 50 years.

Pharmaceutical quad therapy has been shown to improve survival by 1 to 6 years when these drugs are taken compliantly and at optimal doses. However, only 1% of patients ever reach optimal dosage on each of those 4 medications. And at the end of the first year, over 40% discontinue quad therapy.

So while quad therapy when taken compliantly, can extend life, it does very little for quality of life. This chart shows a meta-analysis of 18 studies comparing the impact of these 4 medications on exercise tolerance, which is a common surrogate for quality of life in this population. And as you can see, it shows a very modest impact, if at all, on the patient's ability to exercise.

So the limitations of pharmacologic therapy leave the majority of patients suffering from significantly diminished quality of life, whether it's mobility problems, pain or discomfort, reduction in activity and the ability to deal with the activities of daily living or depression, mental health disorders. And multiple studies in this population have demonstrated repeatedly that these patients would rather trade longevity for better quality of life. They don't want to live any longer. They want to live better.

So Barostim addresses the significant unmet need in the treatment continuum. And it's effectively addressing these patients in the purple window. These are the patients who the heart failure physicians themselves often refer to as the walking wounded or the forgotten middle. Those are the patients we're trying to help with our therapy, and that's the paradigm that we're trying to change.

So that purple window represents a $10.5 billion TAM on a prevalence basis and it's less than 1% penetrated today. We often describe Barostim therapy in terms of the incidence rates. And we describe a new diagnosis annual incidence of 76,000 patients or about $2.4 billion. We also think it's important to consider this therapy in terms of the prevalence that it addresses. Heart failure is a chronic disease state. Barostim patients are not only eligible for the therapy, the year that they're diagnosed as entering indication. They live for 4 or 5 or 6 years within that purple window and can be treated. So when considered on a prevalent basis, this is, in fact, 339,000 patients today who are indicated and could benefit, representing about $10.5 billion in market opportunity.

So I'll share a little bit about how the therapy works and why. Barostim targets the neurohormonal pathway, which is responsible to proven underlying fundamental cause of heart failure. Heart failure begins with a weakened heart as a result of multiple different insults, potential insults to the heart, ultimately reducing the cardiac output. That reduced cardiac output is -- results in reduced signaling from the body's natural stretch receptors. So those are called the Baroreceptors. They're located at the bifurcation of the carotid artery in your neck. And they monitor each and every heartbeat for blood volume and pressure and send those signals to the brain. Effectively, it's the brains sensor for the status of the cardiovascular system.

When those sensors fire less, the brain interprets the reduced signaling as a crisis, either decompensation or a dehydration event or massive hemorrhage. The body reacts to the crisis by activating the fight or flight response. So effectively, it jams on the accelerator, the sympathetic nerve system -- sympathetic nervous system and reduces the brake or the parasympathetic nervous system. And in doing so, it also activates the renin angiotensin system and dumps powerful neurohormones into the bloodstream in attempt to rescue the body from the perceived crisis. This chronic exposure to these powerful neurohormones is what causes the progression of the disease. It's actually toxic to the heart and to the kidneys, and to the vasculature. It causes the progression of the disease. And unfortunately, there is no automatic off signal. There's no switch that turns off the fight or flight response short of restoring that signaling to the brain.

So today's pharmacologic therapy, the Level 1 guideline directive medical therapy is called neurohormonal blockade. So those 4 drugs effectively are trying to shield the end organs from the toxic effect of those neurohormones. Barostim operates on that very same accepted pathway but upstream, essentially restoring signaling to the brain, turning down that fight or flight response, turning down the storm that the drugs are trying to protect these end organs from. So it certainly doesn't replace those drugs, but it complements what they're doing already by reducing the level of circulating neurohormones. That's why Barostim works as well as it does.

Heart failure has been described as metastatic heart disease. It affects not just the heart, it's a systemic disease that affects the kidneys and the vasculature. And so it requires a systemic solution. Barostim is a simple system. Relatively speaking, it's comprised of a single carotid sinus lead and an implantable pulse generator, much like a pacemaker that has a 5- to 6-year battery life. It also has an external programmer that physicians use to optimize the therapy settings in the first 8 to 10 weeks after implantation.

Barostim is implanted in a 60-minute procedure with a 97% freedom from complications, which is remarkable. It's implanted either on an inpatient or outpatient basis and requires a small incision in both the neck and the chest. And very importantly, it's extravascular. So there's no hardware or leads in the heart or in the vasculature, which leads to a very low complication rate, a very low infection rate.

The BeAT-HF trial demonstrated at 24 months effective, predictable and durable improvements in quality of life, showing a 2x clinically meaningful improvement in exercise capacity and quality of life, 68% of patients improved their New York Heart Association Class functional status by at least one level and a remarkable 94% of patients responded to the therapy on at least one clinical outcome. That's remarkable for medication or device therapy today.

To put those improvements in exercise tolerance in context, you see a significant improvement with Barostim therapy on exercise tolerance as compared to those 4 guideline-directed medications. So a significant improvement in what patients can do with their lives, which describes what we see in real life as they restore their quality of life. The BeAT-HF trial also showed a positive signal in all-cause mortality, LVAD and transplant despite the confounding factors associated with COVID-19, which was underway at the time of the trial.

Recently published real-world evidence from the premier health care hospital database, one of the largest databases of real-world payer evidence data, and it represents about 1,300 hospitals in the United States, in 306 patients demonstrated a significant reduction in hospitalization before and after those patients received Barostim therapy. So this was a highly statistically significant outcome. It's data that is of great interest to payers as you can imagine, and it validated a number of single-center studies from the U.S. and Europe that showed a very similar result. So we believe through real-world evidence, there are multiple such databases, we can fill in some of the gaps that resulted from the COVID-19 experience with the BeAT-HF trial.

So turning to our commercial approach. Our go-to-market strategy is focused on driving Barostim to standard of care through 3 key pillars. The first is improving sales force productivity. The second is driving deep adoption in targeted centers and the third is systemically addressing the barriers to adoption of this therapy that exists in the market. So in the first case, our efforts to transform the sales force over the last year are now largely complete. Our turnover rates have returned to near normal, and we're focusing now on onboarding and improving the productivity of our new sales force.

We're doing that through a number of ways. The first is optimizing the span of control in the field. So that our leaders in the field have the time and the bandwidth to mentor and train and improve the productivity of their new team members. The second is adding additional sales training personnel at the field level who can spend 5 days a week in the field, riding with our teams and helping them understand the nature of the role and propagating best practices wherever possible. We're also focusing our reps on a narrow set of opportunities, 3 to 5 accounts versus sometimes 10 to 15, where they can truly drive deep adoption and change behavior at the clinic level. This is supported by program-based selling tools and a process that is supported by our compensation system that encourages them to go deeper, not wider in these accounts.

In terms of the second focus, driving deep adoption, we are attempting to replicate the network of aligned stakeholders that we see in our most productive centers. And that involves, of course, a clinical champion, which is always necessary, but also includes a financial or administrative champion, a service line leader or a hospital CFO that understands the profitability of this procedure and supports, effectively provides air cover to the team on the ground that's enrolling and treating patients.

At the prescriber level, it means not just 1 clinician that believes in the therapy, but 2 or 3 or 4 who are receiving referrals from the community and from a group of clinicians that surround the center who understand the value of the therapy. It also means having multiple surgeons available and trained to implant the system. So where we see these networks, we see resiliency and redundancy and we see deeper utilization and a lag -- sometimes you're exposed to career changes and retirements and physicians who go on sabbatical. If you've got a narrow network that can shut a program down. So we attempt to build this sort of redundancy into these systems.

And within that network, we're particularly focused on advanced practice providers who are the nurse practitioners and physician associates that are so critical to managing heart failure. They play a key role in patient identification, referral, screening and treatment, both in the community setting and in the advanced heart failure centers. They're highly focused as nurses on these patients' quality of life, in a way that physicians cannot be given the time and the demands on their schedules and they're seeking and are open to new therapies for these patients. They're also very workflow driven. They're algorithmic in their approach to treating disease. And so that's an important piece of how you establish a recurring cycle of treatment and deep adoption in a center. And perhaps most importantly, they see heart failure patients far more often and for much more time than the managing physician.

A typical APP in a cardiology practice, will see a heart failure patient every 6 weeks, often for 30 or 40 minutes, whereas the managing physician may see them only twice a year for 10 minutes. So this is really an important leverage point for us. So aligning those stakeholders and connecting them with a workflow is the second piece of this puzzle. And workflow describes how a disease or therapy is distributed in a clinical setting and it's a set of roles and responsibilities and work orders and processes that describe how a patient officially flows through a practice.

So in the community, this means referral physicians and clinicians and APPs understanding what a potential Barostim patient looks like and knowing who to refer that patient to at their advanced heart failure center. In the advanced heart failure center, it's clinicians who understand how to screen and evaluate and determine who the right patients truly are. And upon determining that, know who to refer that patient to for implantation. And again, it's multiple surgeons who are trained and comfortable implanting these patients.

The handoffs occur without friction at each point. The surgeons implant the device and send the patient back for optimization and ultimately back to the community to continue their life. So where we see these aligned stakeholder networks and we have established deliberate specific workflow, we see deep adoption and positive outcomes. And those are the characteristics that drives this flywheel effect that we're trying to create at the account level that makes this part of how the disease is treated, not just an episodic thing that happens by chance or as a favor or because a patient triggers somebody's thinking of Barostim therapy.

So that's really what we're trying to do here. Interestingly, even in the centers where we see that flywheel beginning to turn. So if we look at the 20% of our centers who have the deepest adoption, so that's 50 out of our 250 active centers, they're doing about 19 implants per year. So that's about 1.5 patients per month. That's helpful. That's a bare minimum, we think, for developing this continued flywheel effect, but it leaves significant further potential in these centers. There's at least another 300 patients on average in those 52 centers who can benefit. So we believe there's a significant opportunity through deeper adoption to create a very sustainable, predictable and valuable business.

Third, we're addressing and continuing to focus on what we believe are the 3 primary barriers to the adoption of this therapy in the market. The first is awareness. The second is evidence, and the third is patient access. So on the awareness front, we're continuing to focus on the physicians in the community that surround these centers. That's where most of our patients are being seen today. In the last year, we did over 150 face-to-face local, regional and national medical education events, helping clinicians understand what a Barostim patient looks like, who might benefit and again, who they can refer these patients to that understand how to truly screen and refer patients for implant.

We've talked a lot about the APP. So that's a key piece of our work in the community, as it is with our work in the specialty clinic, and we're spending significant time optimizing our direct-to-consumer advertising channels and our social media to connect interested patients in the community around these centers with the physicians who can evaluate them and refer them for the therapy.

As it relates to evidence, you probably can never have enough evidence for a novel therapy like Barostim. We're continuing to invest in what we see as an increasing drumbeat of publications really in 2 key areas right now. The first is evidence of improved clinical outcomes and a number of secondary outcomes that we've not had the time or the energy to publish on to date. And those are things like arrhythmias, ejection fraction, kidney function, diuresis. There are physicians, each have different hot buttons, but some of them see some of those secondary clinical outcomes as important evidence of the therapy. And so we're spending time developing and publishing data on the therapies impact on those outcomes.

Secondarily, there's a focus on deeper understanding of the physiologic mechanisms that underlie the therapy. The mechanism itself is widely understood and accepted. Neurohormonal blockade and the neurohormonal progression of the disease is the accepted model for heart failure with reduced ejection fraction. But some physicians again, want to understand in a more granular sense why exactly the therapy works the way it does? What does it do to inflammatory markers? What does it do to left ventricular ejection fraction or left ventricular mass.

So again, we have now the time and the resources to start to fill some of the gaps in our evidence portfolio in these 2 key areas. And we'll do that in multiple channels, real-world evidence, as I've mentioned, the premier database is one way to get at some of that evidence, randomized controlled trials, like one I'll mention in a minute, is another approach. But a lot of it comes from investigator-initiated research at the center level. So single and multicenter studies, sometimes sponsored by CVRx, sometimes done completely independently, but that's really where we start to see an increasing level of publication and visibility for the therapy. And we're pleased to now start to see an example of 4 recent publications from single or multicenter trials looking at some of these very end points that are of interest to us.

As I mentioned and as was announced in our press release Monday, we received FDA approval, IDE approval for the BENEFIT-HF trial, which will be potentially a landmark randomized controlled trial in heart failure arguably the largest device trial ever done in the field of heart failure. This trial will seek to expand our indication from an EF cutoff of 35% to 50% and expand the NT-pro requirement from the current threshold of 1,600 up to 5,000. That's a marker in the blood that describes the stability of a patient's heart failure. The trial will enroll 2,500 patients in approximately 150 centers in the United States and Germany. The primary endpoint is all-cause mortality and heart failure decompensation, the hard endpoints as they're described and we'll follow patients for 2 years.

We believe enrollment, if approved, will begin later this year and will continue through 2030. So on the basis of the FDA approval, we've applied to CMS for what's called Category B coverage, which is a necessary condition for us to proceed with the trial. Category B coverage means that CMS will pay for the procedure and the device used in this trial. With that coverage we can expect the net trial cost to be between $20 million and $30 million, and they will be spread over 5 to 7 years, likely back-end loaded as is often the case with trials like this.

If successful, the BENEFIT-HF trial will expand the market opportunity from the 339 patients on a prevalence basis to over 980,000 patients on a prevalence basis. So tripling our TAM from $10 billion to over $30 billion. So a pretty significant impact on our opportunity. What's important to note is that these patients, the patients with the higher EF above 35 and the higher NT-pro above 1,600 are being seen every single day in the same clinics we call on by the same physicians and nurse practitioners. And the reason this trial became so compelling to us is those clinicians tell us over and over again, I see many more patients who can benefit that I'm allowed to treat by the payers.

You need to get approval to treat these patients above 35 and above 1,600 because they will benefit. They have the same disease as the current indicated population and will benefit in the same fashion. So from a synergistic standpoint, these are highly adjacent populations that do not require us to deploy a new sales channel or a different set of evidence. We can build on the foundation that we're already developing to support the current indication to further penetrate these expanded populations.

So we're very excited about this. We would anticipate hearing from CMS in the next month. We believe that there's a good chance they will, in fact, approve this trial, and we're excited to announce in the near future, the first enrollments in this trial.

So the third barrier is patient access. One of the most vexing for any new therapy. We've made remarkable progress in the last year, most recently with the implementation of our Category 1 code, which occurred on January 1 of this year. The implementation of Category 1 means we move out of Category 3 experimental status and the payers lose the ability to automatically deny prior authorizations for our therapy.

It also formalizes and make certain the physician payment for this therapy. So physicians have had in the past as a Category 3, the surgeons have had to negotiate their payment for doing the surgery. And in some cases, they negotiate a payment. They have an agreement from a payer, but the payer later refuses to pay. So there has been -- it's been an impact to some degree on adoption. That now goes away as of January 1. Physicians on average, will get 11 RVUs or about $560 to do this 40-minute procedure. And for them, that's a very attractive, predictable procedure relative to the other things they do in their day.

So that's a really important transition for us. It is early in that process, but we're already starting to hear some very interesting anecdotes. And what this does is it allows us to engage at the account level much more confidently. And it gives physicians confidence that the patients they prescribe for this therapy will actually get it covered or will be more likely to get it covered by their payer. That's important.

On the payment front, we have formalized and finalized inpatient reimbursement to the hospitals of $45,000. We have, for the third year in a row, successfully defended the $43,000 outpatient payment for this therapy. We are already working with our coalition partners to petition CMS for 2027 to create a permanent Level 6 neurostimulator code. That work is already underway, and we believe we will eventually be successful.

Finally, on the coverage front, we're seeing very encouraging results. We're seeing a greater and greater number of hospitals and health systems partnering with us and allowing us to fight the reimbursement fight on their behalf. So submit the prior authorizations, appeal the denials and push those submissions all the way to administrative law judge review when necessary.

So that's an important element of the service we provide these centers to ensure that they get paid for the work that they do. Secondarily, we were thrilled to see our 30-day Medicare Advantage approval rates finish 2025 at 46%. That's a remarkable level for a Category 3 therapy. It's up almost 50% over the 31% level we saw in 2024. That's a tough payer group, as you all know, and we're thrilled that bodes very well. Now with Category 1 in place, it bodes well for our future coverage progress and interactions with the payers.

So for 2025, Q4 worldwide revenue was $15.9 million to $16.1 million. 2025 worldwide revenue for the year was $56.5 million to $56.7 million or an 11% growth rate. We added 3 new U.S. territories in Q4 for a total of 53 and added a net increase of 2 centers for a total of 252 active implanting centers.

Our cash balance at the end of the year was $75.7 million. For 2026, for the full year, we would expect worldwide revenue between $63 million and $67 million, gross margin between 84% and 86%, and operating expenses between $103 million and $107 million. For the first quarter of 2026, we expect total revenue between $13.7 million and $14.7 million.

So in closing, we believe we have the opportunity to positively impact the standard of care for a major global health condition and to address a significant unmet need in the treatment of heart failure. And in doing so, improve the quality of life for hundreds of thousands of patients who can benefit. We also believe if we are successful, we can build a transformational company that's capable of sustaining long-term growth.

Thank you. I appreciate your time, and we look forward to some questions.

Great. Maybe we could kick it off with the preannouncement that you announced just a couple of days ago. Fourth quarter beat the Street by about $500,000, 2026 and first quarter, roughly bracketing the street on sales. Maybe speak to some of the trends you saw in fourth quarter and how you're thinking about the building blocks of 2026.

Sure. Maybe I'll start with that kind of at 100,000 feet. So the themes you saw there, 2026, as we look forward is a year of execution. We are getting the sales team that we're so proud of, up to speed and productive, increasingly productive. We saw some of that through 2025. We are obviously on the cusp of some significant reimbursement breakthroughs, which you saw with the Category 1 code. And we're excited about this trial. So those were all themes, obviously, in our announcement and things we're looking forward to in 2016. Jared can cover the specific financial details, but happy to dig into some of those 3 themes as we get further into this.

Yes. Yes, happy to chime in on a couple of the numbers. Yes. I think 1 of the key things that we've talked about throughout the year of 2025 is that we had a bit of a reset, right? We built this new sales force in the first quarter of 2025 and into the second and third quarter. After building that baseline in the first quarter of 2025, we've seen sequential growth from Q1 to 2 to 3 to 4 in the range of 8% to 10%. And that's what gives us confidence to put out the guidance that includes an acceleration of growth from 2025 into 2026. And because we're seeing that team come up that productivity curve at a nice clip throughout the year.

You did get a Category 1 CPT code and it has a pretty substantial improvement in reimbursement inpatient. How do we think about the ability to take price now that you have a much improved reimbursement rate?

Yes. Happy to cover ASPs as well. So I think in 2025, we saw a nice step-up again in ASPs, especially on the U.S. side of the business, where I think we saw ASPs jump from around $30,000 in 2024 to around $31,000 or $32,000 in 2025. As we move into 2026, I think our baseline model still assumes ASPs would stay flattish around that $31,000 mark in the U.S. side of the business. However, there is upside to that opportunity. Our list price is $38,500. The average reimbursement, both on the inpatient and the outpatient side is close to $45,000. So there is enough margin there to go capture some additional increases in ASPs, but in the base case in our guidance, we're still assuming a flat ASP from 2025 to 2026.

In 2026, you -- '25, you reined in expenses and in '26 expenses are still above sales and you have some of the interest payments or at least accruing on the balance sheet. So how do we think about cash burn? What did you end up with in 2025? And how should we think about the burn in 2026?

Yes, it's a great question, right? With the rebuild that was done in 2025, we didn't see the leverage that we had initially anticipated entering the year. I think our total cash burn is going to be in the range of around 40 -- $35 million to $40 million for the year. Our expectation for 2026 with the reacceleration of our top line number is that we will see additional leverage in this business. So top line number is going to be growing at a faster pace than what our overall OpEx will be growing in the year. Because of the fact that we're going to see more and more of those new sales reps push further and further up that productivity curve driving that leverage that we expect to see in this business.

There were a couple of announcements along with the preannouncement in terms of additional debt facilities and maybe just run through it all of what happened.

Yes, happy to cover a couple of those items. So in addition to the pre-announcing Q4 results, 2025 preliminary revenue and giving the guidance for 2026, we also included a disclosure of an amendment to our loan agreement with Innovatus. So historically, we had a $50 million facility that was fully drawn. It was coming due in the fall of 2027. Our goal with this amendment was to push out that maturity date, which we did accomplish. The new maturity date is out to 2031.

So interest-only period in the range of 4 to 5 years from signing in January of 2026. But also as part of that amendment, they offered to extend the facility to $100 million, of which we drew an additional $10 million of debt on January 9. So that brought our cash that Kevin mentioned at the end of the year from $76 million, up to $86 million here in early January.

So now with the $100 million facility around 9%, 10% interest rate, burning $35 million to $40 million in 2026. How do you think about the building blocks to get to cash flow breakeven and ultimately material profitability?

Yes. Yes. Thanks for that question, Robbie. So the goal remains unchanged. We're working to get each one of these territories activated fully up that productivity curve as Kevin mentioned, with 3 to 5 active implanting centers. By driving deeper adoption, the expectation is that each one of those centers would be treating one patient a month. So for each territory, we would see productivity of about 5 implants a month or 60 implants a year. At an ASP, just to round numbers of $30,000, you'd see annual revenue generated per territory of $1.8 million if they reach these targets. It's that number that we're driving towards and seeing leverage in this model to help us achieve cash flow breakeven.

So with 2 years plus cash on the balance sheet, there's no need for us to go out and raise any additional capital at this point in time. Because we're really focused on driving leverage in this model and driving that cash burn number down in the near term.

Obviously, any business, you have some reps who are highly productive, some reps who are a little less productive that $1.8 million rep productivity, that's obviously the goal. How many of your reps are there today?

Yes. So we have many reps that have achieved that target. I think if you look at our overall average productivity for our active territories, you'll see right now, productivity is about $1 million a year. And so our goal as we bring these new reps up to speed is to get more and more of them achieving that target of $1.8 million.

So Kevin, in the presentation, you talked about some of the steps, the biggest -- the 3 barriers that you were trying to knock down to drive adoption. You had about $1 million now. You need to almost double that. The product has been on the market for a number of years now. I imagine awareness and familiarity is a big part of it. Clinical data is there, it seems like. So from your point of view, what's the line of sight from going $1 million per rep to $1.8 million a rep? And what are you doing to make sure you get there?

Yes. So there's a number of different things that factor into that. Obviously, number one, getting the right reps that understand program selling and moving from a relationship-based sale to one that's focused on new therapy development, that's critical. You got to have right DNA. Number two, they got to understand the right centers to call on and how to develop sort of flywheel that I did describe, they will get more productive as they're successful at getting these centers to start to do this under their own power, right? That's what we're trying to achieve is the proper placement of this therapy in the disease continuum. So that if a patient shows up, it looks like a Barostim patient that triggers somebody's mind and they know who to send the patient to.

So it's sort of who you're selling to and how you sell, but it's obviously, if you look at those 3 barriers, the most significant is probably always reimbursement, right? That's -- no one can escape that. In our case, that's 1 of the 3 and I think the remarkable results that from what we understand the sort of rule of thumb for prior authorization approvals at 90 days for Medicare Advantage and commercial payers is about 30% or the mid-30s. So the fact that we're at 46% at 30 days is pretty impressive.

We think -- and we think that's a fantastic platform to build from. So the other piece that will get these reps productive is physicians being confident that the patients they refer is going to get it covered. And in doing so, then be willing to refer more and more patients because physicians are fatigued, right? And they feel personally responsible when they refer a patient, get them excited about Barostim, refer them for the treatment and the payer won't cover it. So we're hopeful. There's probably not one of those things that's going to be the single driver of productivity improvement. It's a multitude of factors that thankfully are now all moving in the right direction.

Now with the CPT-1 code, do you think a lot of the reimbursement headwinds gets pushed away?

Yes. I would -- yes, not completely, of course, but it's a significant reducer of the friction in the system and the amount of pain and suffering that the physicians and patients go through to get the therapy. So there are many examples in our industry of that being a catalyst for accelerated growth. We think we'll see that. It's too early to tell that now. But that's a significant step forward. And we're already seeing, as I said, anecdotes in the first 13 days of payers behaving differently than they did. And there's a -- it will take a couple of quarters to get through that. Payers are notoriously slow to update their codes. That's helpful to them.

So we're working payer by payer to identify those that haven't yet updated their systems. And trying to make sure that, that transition is as smooth as possible and that we don't lose any patients who were submitted in December under the old regime canceled and somehow don't get resubmitted under the new regime.

You had the, let's call it, the reset in 2025. How would you grade the progress since then? And do you feel like you're completely out on the other side?

Yes. I would say -- this was a very necessary reset. It obviously involved a significant change in our organization, up to 70% of our sales team since I've joined this organization, much of it in 2025. It involved a completely revised go-to-market strategy. The foundation is in place. We've got the right people. We think we have the right strategy. We have the right reimbursement support here and a growing body of evidence. So we are moving in an execution phase here. We don't need a lot of additional tools -- we need to get these people productive and sort of get that flywheel going in as many of these centers as we can.

Obviously, tripling the addressable market would be fantastic. It's going to be a long trial. It's going to be a number of years before we see results. What were some of the clinical signs of the data that you have in hand today that informed you to set up the trial and how do you feel about the odds of success?

Yes. So maybe I'll take that in reverse order. So we feel really good about the way this trial has been designed. It's the largest such trial, we believe, in heart failure devices. So we have designed it with a very conservative statistical plan that we think -- and an improved understanding of event rates, both in our indicated population, which we've studied in the past, and in this extended, they call it heart failure with moderately reduced ejection fraction, MREF from 35 to 50. That's the same disease as the under 35s, it's not as advanced. There aren't as many events, but we have a much better understanding today than we could have 7 or 8 years ago about the behavior of those 2 populations. And so we think we have a world-class scientific advisory board. We think we have a trial here that we can be successful with.

Of course, it requires CMS to agree to pay for it, but we think it will be a leadership signal to our industry and it will generate a ton of goodwill. Physicians already there's almost a sense of FOMO, right? This is a massive trial. Even those that aren't yet ready to start using Barostim commercially are telling us they will participate in the trial. This is a major sort of seminal event, if we're successful in how heart failure is treated. So we're excited about that. It will be a gradual start as they always are. We're not building any of the revenue from those units. Much of the units in the trial will be a population that we don't treat today. So those will be incremental. But I think there'll be a significant sort of goodwill tailwind that benefits our commercial business today as we get into this trial.

Great. Unfortunately, we're just about out of time. I want to thank you for a great discussion, and thanks, everybody, for joining.

Thank you.

Thank you.

Greetings, and welcome to the CVRx Third Quarter 2025 Earnings Conference Call. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Mike Vallie from ICR Healthcare. Thank you, sir. You may begin.

Good afternoon. Thank you for joining us today for CVRx's Third Quarter 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, everyone, and thank you for joining our third quarter earnings call. Q3 was a strong quarter for CVRx. We grew revenue by double digits year-over-year and expanded our commercial footprint. Our newer reps are hitting their stride, driving procedure volumes and building productive relationships with the physicians and APPs that manage heart failure patients in the community.

Let me remind you of our 3 strategic priorities for 2025. Our first priority is building a world-class sales organization that develops sustainable Barostim programs with deep therapy adoption. Our sales force transformation is progressing well and turnover is returning to more normal levels. The first wave of the sales reps hired earlier this year are getting up to speed and making meaningful contributions.

We will continue hiring high-quality talent but at a more measured pace that aligns with our territory expansion plans rather than the accelerated hiring that was needed to support the transformation. With this foundation in place, we're now concentrating on onboarding the new reps and accelerating their path to productivity.

Second, we are targeting centers with the highest potential for sustainable programs and implementing a best practice playbook to drive deep therapy adoption. Our refined approach to account targeting guides our expansion strategy, focusing on high potential Tier 1 and Tier 2 accounts. That being said, we're also selectively pursuing pragmatic opportunities in Tier 3 and Tier 4 accounts where we see committed physician champions, administrative support and the right fundamentals. We added 10 net new centers this quarter and are seeing traction with this approach.

Our top accounts are demonstrating the deepening adoption that is the hallmark of an established Barostim program. More than 20% of our active implanting centers achieved 3 or more implants in Q3, and our highest performing sites are now implanting more than 10 patients per quarter. This demonstrates what is possible when committed physician champions and strong institutional support come together.

Our third priority is addressing the primary barriers to the adoption of Barostim therapy by improving patient access, expanding therapy awareness and building out our portfolio of clinical evidence. As it relates to patient access, we are making headway on multiple fronts. In July, CMS proposed maintaining Barostim in new technology APC 1580 with payment of approximately $45,000 for procedures performed in the outpatient setting.

The second rule proposed in July and finalized on October 31 is our transition to a Category I CPT code effective January 1, 2026. The Category I designation eliminates the experimental and investigational denials regularly seen with Category III CPT codes, improves prior authorization predictability and throughput and ensures that physicians are paid fairly and consistently for the procedure.

On the coverage front, we are continuing to see encouraging trends and positive support from Medicare, Medicare Advantage and commercial payers. Taken as a whole, these reimbursement advancements are creating an increasingly solid foundation for patient access and facilitate our work to move Barostim towards standard of care.

Our awareness efforts are focused on educating clinicians on the appropriate role of Barostim therapy in the treatment of heart failure. We are engaging more deeply with the networks of referral physicians that surround our targeted centers through expanded national, regional and local medical education programs.

Beyond these physician-focused programs, we've continued to expand our engagement with advanced practice providers, or APPs, with a significant number of APP-specific educational programs completed year-to-date. These events are driving substantial interest and awareness in Barostim therapy among community-based APPs who manage most of our indicated heart failure patients on a day-to-day basis.

During the quarter, we also had a significant presence at the Heart Failure Society of America meeting, one of the largest global heart failure conferences, where we hosted a multidisciplinary symposium with over 125 attendees. Our clinical evidence portfolio supporting Barostim therapy continues to grow, and we are seeing an increasing flow of independent peer-reviewed publications being submitted from our implanting centers and reporting positive patient outcomes.

Recently, we've seen single-center studies showing significant improvements in Barostim patients, including a reduction in hospitalizations, reduced arrhythmia burden and a positive impact on the ability to up-titrate and optimize guideline-directed medical therapy.

Also, our discussions with FDA around a potential new randomized controlled trial are progressing positively. We submitted our IDE application in mid-October and expect to receive feedback from FDA in late November. If we can reach agreement with FDA on the IDE protocol, we will then approach CMS to apply for Category B IDE coverage, a second and necessary condition in order for us to move forward with the trial.

We're pleased with our third quarter performance. The momentum we're building reflects our investments in team development and go-to-market execution with an increasingly broad and strong contribution across our account and territory base. In fact, in the third quarter, we had more sales reps contributing implants than in any quarter in the company's history. We're seeing the consistent methodical progress needed to establish Barostim as a standard of care for heart failure patients.

Now, I'd like to turn the call over to Jared for a financial review.

Thanks, Kevin. Let me walk through our third quarter financial results. Revenue was $14.7 million for the 3 months ended September 30, 2025, an increase of $1.3 million or 10% over the 3 months ended September 30, 2024. Revenue generated in the U.S. was $13.5 million for the 3 months ended September 30, 2025, an increase of $1.2 million or 10% over the 3 months ended September 30, 2024.

Revenue units in the U.S. totaled 420 and 394 for the 3 months ended September 30, 2025 and 2024, respectively. The increases were primarily driven by continued growth in the U.S. heart failure business as a result of the expansion into new sales territories, new accounts and increased physician and patient awareness of Barostim.

As of September 30, 2025, the company had a total of 250 active implanting centers in the U.S. compared to 240 as of June 30, 2025. Active implanting centers are customers that have completed at least 1 commercial heart failure implant in the last 12 months. The number of sales territories in the U.S. increased by 3 to a total of 50 during the 3 months ended September 30, 2025.

Revenue generated in Europe was $1.2 million for the 3 months ended September 30, 2025, an increase of $0.1 million or 12% over the 3 months ended September 30, 2024. Total revenue units in Europe decreased to 50 for the 3 months ended September 30, 2025, compared to 56 in the prior year period. The number of sales territories in Europe remained consistent at 5 for the 3 months ended September 30, 2025.

Gross profit was $12.8 million for the 3 months ended September 30, 2025, an increase of $1.5 million or 15% over the 3 months ended September 30, 2024. Gross margin increased to 87% for the 3 months ended September 30, 2025, compared to 83% for the 3 months ended September 30, 2024. Gross margin for the 3 months ended September 30, 2025, 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 $0.6 million or 26% to $3.1 million for the 3 months ended September 30, 2025, compared to the 3 months ended September 30, 2024. This change was driven by a $0.5 million increase in compensation expenses and a $0.2 million increase in consulting expenses, partially offset by a $0.2 million decrease in clinical trial expenses.

SG&A expenses increased $0.2 million or 1% to $21.9 million for the 3 months ended September 30, 2025, compared to the 3 months ended September 30, 2024. This change was primarily driven by a $0.2 million increase in consulting expenses, a $0.2 million increase in travel expenses and a $0.2 million increase in non-cash stock-based compensation expense, partially offset by a $0.2 million decrease in advertising expenses and a $0.2 million decrease in compensation expenses.

Interest expense increased $0.5 million for the 3 months ended September 30, 2025, compared to the 3 months ended September 30, 2024. This increase was driven by the interest expense on higher levels of borrowings under the term loan agreement with Innovatus Capital Partners.

Other income net was $0.9 million for the 3 months ended September 30, 2024 and 2025. These balances consisted of interest income on our interest-bearing accounts. Net loss was $12.9 million or $0.49 per share for the 3 months ended September 30, 2025, compared to a net loss of $13.1 million or $0.57 per share for the 3 months ended September 30, 2024. Net loss per share was based on 26.2 million weighted average shares outstanding for the 3 months ended September 30, 2025, and 22.8 million weighted average shares outstanding for the 3 months ended September 30, 2024.

As of September 30, 2025, cash and cash equivalents were $85.1 million. Net cash used in operating and investing activities was $10 million for the 3 months ended September 30, 2025, compared to $10.4 million for the 3 months ended September 30, 2024.

Now turning to guidance. For the full-year of 2025, we now expect total revenue between $55.6 million and $56.6 million compared to prior guidance of $55 million to $57 million. We now expect full-year gross margin between 85% and 86% compared to prior guidance of 83% to 84%. We now expect operating expenses between $98 million and $99 million compared to the prior guidance of $96 million to $98 million.

For the fourth quarter of 2025, we expect to report total revenue between $15 million and $16 million. One additional note is that our existing registration statement is scheduled to expire on November 15, 2025. As part of good corporate housekeeping, we plan to refresh our registration statement in connection with the filing of our Q3 10-Q, which is expected to be filed tomorrow morning.

With that, I'll now turn the call back over to Kevin for closing remarks.

Thank you, Jared. Looking ahead, we now have the fundamentals in place to positively impact the lives of a meaningful number of heart failure patients and to create significant value in doing so. Our sales team is becoming more productive, and we're seeing positive signals from payers across the board. Our clinical evidence is expanding and our awareness efforts are gaining traction.

Financially, we're demonstrating improving operating leverage in our business model as we scale. Combined with our strong cash position, this gives us the resources and runway necessary to execute our strategy.

Now, I'd like to open the line for questions. Operator?

[Operator Instructions] Our first question comes from John Young with Canaccord Genuity.

Congratulations on the quarter. Maybe I can start on the guidance. I appreciate the narrowed range, but perhaps you could walk us through why you cut the higher end given that it sounds like reps are starting to hit their stride from your commentary. Are you expecting more of a benefit in 2026 than from the productivity? Is there anything you're seeing today in the business that that as well?

John, happy to cover that one. Yes, we were really happy with the results we saw in Q3. We're starting to see more of those new reps on the U.S. side get up that productivity curve, but we know the work is not yet done in that arena, and we don't want to get too far ahead of ourselves. The performance that we saw in Q3, we saw that continue into October that gives us the confidence in the guide that we set out by raising the midpoint of the old guidance that we had previously issued.

Then just on 2026, I'm not sure if you are willing to give any commentary yet, but it looks like the Street is modeling about 18.5% growth in '26. Are you comfortable with that level at this point?

Yes, it's a good question. We're coming off a year where the midpoint of the updated range will be growth of about 10% compared to 2024. Having that as our baseline, we're still anticipating to continue to invest in this business where we're going to be adding more sales reps, activating more territories and continuing to invest in the rest of the business. I think as we march into 2026, we're starting to target growth kind of in the mid-teens to see it accelerate from the growth rates we're seeing in 2025 and then eventually getting back to those longer-term targets of seeing higher growth rates in the mid-20% but that's out in 2027 and beyond.

Our next question comes from Matt O'Brien with Piper Sandler.

This is Samantha on for Matt today. A good performance in the quarter. I also wanted to touch on the productivity improvements with the sales force. Could you give any more color or quantification, how many of the sales reps are kind of giving up to the productivity that you'd like to see? Would you say everyone's ramp? Just any more color there would be great.

Yes. Thanks, Samantha. I'll take that. It's Kevin. I would say we're pleased with what we're seeing from the new reps, particularly those we've hired in the last 3 quarters. As Jared mentioned in his comments, I believe more reps today are active and contributing in the quarter than we've ever seen before. We're seeing them start to come up the curve and understand their roles and get comfortable in their territories and contribute. We're nowhere near yet seeing the full productivity that we would expect from these new hires. I think there's still some work to do there.

As we've communicated in the past, depending on the background of the individual and the territory that they're assuming or building from scratch, it can take 6 to 9 to 12 months for them to really start to contribute. I would say at this point, we're really pleased with what we're seeing and no reason to think that we won't see continued improvement.

One more from us. It was great to see the Category I code finalized in the physician fee schedule that was published just a few days ago. How should we be thinking about the reimbursement changes that are going to be implemented starting January 1?

Sure. That's a great question. I would say, overall, we're thrilled with the developments over the last year in reimbursement and what we see on the sort of horizon. We're seeing really strong support from the MACs for traditional Medicare, improving rates from the Medicare Advantage carriers, some really positive signals, both at the prior auth level as well as at the kind of second and third level reviews and even at the administrative law judge level. Those are each different points during the appeals process where you challenge a payer to cover a case, and we're seeing improving trends in all those areas.

Obviously, Category I in January will be an important next step for us. That eliminates the payer's ability to automatically deny our prior authorizations on the basis of them being experimental. This means as of January 1, each authorization has to be reviewed by a human clinician and reason must be given for why it's being denied. So that -- I wouldn't characterize that as an immediate sort of step function change, but it will certainly, as it becomes more-and-more impactful as we enter the second and third quarter of the year, we will see the friction in the system reduced, and we believe it will result in higher rates of approval and shorter times to those approvals for prior authorizations.

Our next question comes from Robbie Marcus with JPMorgan.

This is actually Rohin on for Robbie. I have a question on margins. Gross margin came in a decent clip ahead of expectations in the quarter. I was just wondering if you could provide some further color on how much of this is due to better pricing versus some of the manufacturing efficiencies that you called out? Is this a new steady state that we should expect heading into 2026 just from a gross margin perspective?

Ron, I think we tried to call it out in the earlier remarks. It is a mix. It's a bit of increased ASPs and an improvement in the cost per unit. ASPs for the quarter were north of $31,000 on a worldwide basis. That's a pretty good step up from what we saw in Q3 last year, where it was just below $30,000 per unit across the whole across the globe for ASPs. I do think the bigger chunk that drove this improvement in Q3 margins was the cost per unit. We're continuing to build more-and-more units in our facility here in Minneapolis. As a result of that, we're seeing our labor and overhead costs spread over more units seeing that cost come down.

I think the ASP side of the house, we're not ready to just bake it in just yet longer term, but we do think there is promise that we could maintain these levels moving forward. Then on the cost side, we do think these are production levels that we're going to continue at or continue to increase upon. That should give us comfort to be able to keep these costs in a similar range moving forward.

I guess I also wanted to clarify a prior point that you might have made. Just kind of heading into 2026, given the new Category I code, set to take effect in the favorable PFS rates and extension of the APC payment. It also seems like you have a better grasp on the commercial organization as we sit here today. Is it fair to say that all these developments in conjunction should drive an acceleration in sales growth in 2026? Just could you frame that, some of the puts and takes for investors based on how you're thinking about it today?

Yes. That's a great kind of summary of what we have going into 2026. I think part of this is we're coming off a year from '24 to '25, where we went through a sales force transformation. We really implemented this go-to-market strategy that was brought forward at the end of 2024. We're starting to see some really nice results here in the third quarter and driving into the end of the year. I think as we're moving into '26, we are expecting to see a reacceleration of growth.

As I mentioned earlier, kind of initially targeting the mid-teens for what we would expect for growth rates '26 over 2025, but there is potential for exceeding those expectations if everything lines up for us with the Category I taking effect with payers moving in the right direction for prior auth approval rates and the time to those approvals. I think the base case for us at this point is seeing that reacceleration go from about 10% to the mid-teens as we move into 2026.

Our next question comes from Brandon Vazquez with William Blair.

Max on for Brandon. Kevin, you mentioned you guys are focused on getting these newly hired reps up to speed more quickly. Can you just touch on how you guys are approaching that? What specifically you guys are doing that's giving you confidence that they will get up the productivity curve quicker? What's giving you confidence that newer reps that you hire will fall into the same playbook? Then I have a follow-up.

Sure. Great question. I would say it starts with the people that we're hiring. As we've talked about extensively over the last 18 months, we're really trying to develop a sales team that has program development that has market development skills that has sort of a process-driven mentality different than what you'd often find in an early-stage sort of start-up environment or in a more mature industry where you're fighting for market share. These are people that know how to develop new programs and introduce new therapies. That's the raw material that goes into it.

We've made significant investment in our sales training resources, both the curriculum and the experts that we've hired that train these reps and have instituted a much more deliberate and systematized sales training process that we believe compresses their time to comfort with our therapy and with their territories and with the process necessary to open a sustainable Barostim account. That differs by person, of course, but we're pleased with what we're seeing, and we're pleased anecdotally, at least today to see some of these reps getting up to speed much faster than has historically been the case. It's probably a combination of all those things.

It also comes with picking the right accounts, right? We think we know enough about this market today that we can be better at selecting where to spend our time to pick the right accounts that can get up to speed perhaps more quickly than in the past. It's a combination of factors, but we're pleased with what we're seeing.

Then, Kevin, just on the RCT, can you guys just touch on additional milestones? What might be left there following the next steps in November? Maybe just remind us all what you guys are going after there and what positive results in the future could mean for the TAM?

Sure. That's a great question. As a reminder, so we are in discussions. We've submitted an IDE for a very significant randomized controlled trial that would triple our TAM by both moving the EF, the ejection fraction cutoff from 35 to 50 and also moving the cutoff for something called NT-proBNP. That's a biomarker that describes the stability of heart failure. That would move from its current level of 1,600 up to 5,000. So the patients that are in that expanded range have a very similar disease, and we believe will respond similarly to Barostim therapy.

This represents a pretty compelling way to expand that indication to an adjacent group of patients who are very much today in the environments that our sales reps are calling on. That's the goal behind the trial. We have submitted the IDE, as I mentioned, to FDA. We hope to hear back from them sometime in November. If we can indeed reach agreement on a trial design, we would then go to CMS and submit for a category B IDE coverage designation. That's a very necessary second step. That means that CMS will agree to pay for the patients who receive our device in this trial. With that second approval, if successful, we would begin center outreach and would anticipate treating the first patients in this trial sometime in the first half of 2026.

Our next question comes from Frank Takkinen with Lake Street Capital Markets.

I'm going to pick up on the RCT a little deeper there. Kevin, maybe talk to how many patients you're thinking will be enrolled in this trial? Then on the category B, do you think you can get a reimbursement rate similar to the ASP that you're currently collecting?

Sure. Thanks, Frank. As I think maybe we mentioned on a prior call, we're seeing this trial at roughly around 2,000 patients randomized to either Barostim therapy or guideline-directed medical care. That would make it one of the largest cardiovascular device trials ever conducted. This would be seen as a significant sort of scientific contribution to the field.

It would likely involve 100-plus centers given the assumed enrollment rates by center. It would likely take us about 4 years to enroll this trial with another 18 months to 2 years of follow-up after that point. It would be a significant trial, a significant investment. We believe there is a good likelihood that CMS will, in fact, cover this under a category B IDE designation. The criteria for that designation are clear and are not subjective, and we've designed the trial in a manner that we think would meet those criteria.

As it relates to ASPs, I'll let Jared speak to that.

Yes, happy to jump in on that piece, Frank. Our expectation is that CMS would reimburse the hospital at the exact same rate that they're reimbursing them today in the outpatient setting. If they're being reimbursed $45,000 today under the New Tech APC 1580, they'd get a similar reimbursement if these patients are enrolled through the clinical trial.

Then I think, Kevin, I heard you speak to the concept of sales force is stable now and still intending to grow that sales force been in the range of 3 new sales territories per quarter. Is that the right way to think about it in 2026?

Yes, I think it is. Thank you. I think at this point, we're pleased with what we're seeing, but we're still working the kinks out of our system, and we think that's probably the right number of new territories per quarter to model going forward. We're hopeful eventually that may increase, but for now, that's the right spot to start.

Our next question comes from Chase Knickerbocker with Craig-Hallum Capital Group.

I just wanted to dig in a little bit more on the guide as well. Q4 implies essentially flat year-over-year growth and less sequential growth relative to the past 6 or 7 quarters. I guess what are you seeing so far in the quarter through October that's the driver here? I'm just kind of having trouble squaring the commentary that some of the reps are getting up to speed faster than expected. I would think with many of your reps now, getting to that productive kind of 6-plus months in their territory point. I'm just having trouble squaring that. Is there conservatism in that guide? I mean maybe just kind of speak to the moving pieces.

Yes. Good question, Chase. I mean, as comparing year-over-year, I think we've talked about this the last few quarters, we had a bit of a reset with our top line numbers back in Q1. We've been working to grow that number sequentially after that sales force transformation took place. We've been seeing that sequential growth rate in the range of 8% to 10%. I think if I look at the guide that's out here for worldwide numbers for Q4, the midpoint would get us to about 6% sequential growth. A little bit of a step back.

I think what we're seeing is more reps are getting up the productivity curve, more territories are becoming active. Again, we just want to make sure that we're kind of through the thick of it here before we would get much more aggressive with the numbers coming out. I think even at the midpoint, we're talking growth north of $1 million sequentially from Q3 to Q4.

Can you maybe speak to how rep tenure has progressed? Has any kind of update to any of the turnover metrics, etc., just kind of health of the sales force update?

Yes. I think we last gave updates a couple of months ago on the percentage of reps that were hired in 2024, 2025. We haven't seen significant changes there. I think Kevin alluded to this in his prepared remarks that we're back to hiring per normal levels. We're not out there accelerating our hiring to backfill a bunch of reps that were turned over. At this stage, we haven't seen significant movement in those percentages of reps that were hired in 2024 and 2025.

Just to close it out, I mean, overall turnover kind of returning back to those normal levels. I think we've alluded to it in the past, annual turnover levels that we think to be normal are kind of in that range of 10% to 20%.

Then just maybe on the OPPS, any sort of engagement around Level 6 neurostimulator code outside of the comments you submitted?

Then second, Jared, just I appreciate those thoughts for '26. I mean maybe just also some thoughts on expenses next year, just how you plan to manage the business from an OpEx perspective as we look at 2026?

Yes. On the OPPS side, I think everybody is sitting and waiting for when that final rule will post. Just a reminder for everybody that CMS did come out this year in the proposed rule back in July that we would be mapped to the New Tech APC 1580 for 2026. We don't expect that to change in the final rule, but there is still a chance for some upside where they could create a Level 6 neurostim code. We're still waiting for that final rule, which we understand could be published any day now. We'll come back and give updates on that as information becomes available, but there's no additional information behind the scenes. It's all of us just waiting for CMS to release this rule.

On 2026 spend, so we do anticipate that we're going to continue to see leverage in this model. If we're modeling mid-teens top line growth with slight improvements on margins, we're not intending all of that gross profit to be spent within operating expenses. We would expect the OpEx growth to be at a lower rate than what we're modeling for top line. Again, we'll come out with more detail on that when we finalize guidance for 2026.

Our final question comes from Ross Osborn with Cantor Fitzgerald.

Congrats on the progress. Maybe just a quick modeling question from us. Your 2025 OpEx guide implies a sequential step down. Is that fair to assume the savings will come from the R&D line sequentially?

Yes, it's a good question, Ross. Actually, I think we expect that movement would likely happen within SG&A sequentially from Q3 to Q4. Q4 is typically a lighter quarter when it comes to trade show and marketing spend. We would typically see a little or fewer dollars going into that bucket in the fourth quarter as compared to the third.

Then looking at your top accounts doing 3 or more implants and the highest at greater than 10. Are there any structural differences between those averaging 3 versus 10? Or do you think those currently averaging 3 have the ability to ramp to 10 over time?

That's a great question. I'll take that. Thanks, Ross. I would say it's the latter. There are no structural differences there. We think this is ultimately the effect of us sort of steadily improving the mix of accounts that we have and their likelihood of deep adoption and the tools that we're applying to them, this methodical process of getting the right stakeholders in place, getting administrative support in place and building a robust and resilient network in these accounts that allows them to build this into how they treat the disease. We're pleased with what we're seeing. No reason to believe that they couldn't all be operating at that level. In fact, that's our goal.

We have reached the end of our question-and-answer session. I would now like to turn the floor back over to Kevin Hykes for closing comments.

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. Thank you.

This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.