Acutus Medical, Inc. (AFIB) Q1 2021 Earnings Call Transcript

Acutus Medical, Inc. (AFIB -2.04%)
Q1 2021 Earnings Call
May 12, 2021, 4:30 p.m. ET

Contents:

• Prepared Remarks
• Questions and Answers
• Call Participants

Prepared Remarks:

Operator

Good day, and thank you for standing by. Welcome to the Acutus first-quarter 2021 earnings call. [Operator instructions] I would now like to hand the conference over to Caroline Corner, investor relations. Please go ahead.

Caroline Corner -- Investor Relations

Thank you, operator. Welcome to Acutus's first-quarter 2021 earnings call. Joining me on today's call are Vince Burgess, president, chief executive officer; and David Roman, chief financial officer. This call will include forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.

All statements made on this call that do not relate to matters of historical fact should be considered forward-looking statements. Factors that may cause results to differ from these forward-looking statements are discussed under the Forward-Looking Statement section in the press release attached as an exhibit to Acutus' Form 8-K filed with the SEC today and are also discussed in more detail under the Risk Factors section in Acutus' most recent filings with the SEC, including the risk factors described in the Acutus Form 10-K. Any forward-looking statements provided during this call, including projections for future performance, are based on management's expectations as of today. Acutus undertakes no obligation to update these statements, except as required by applicable law.

Acutus' press release with the first-quarter 2021 results is also available on the Acutus website at www.acutusmedical.com under the Investors section and includes additional details about Acutus' financial results. The Acutus website also has Acutus' SEC filings, which you are encouraged to review. A recording of today's call will be available on the Acutus website by 5:00 p.m. Pacific Time.

Now I would like to turn the call over to Vince for his comments and first quarter 2021 business highlights.

Vince Burgess -- President and Chief Executive Officer

Thank you, Caroline, and good afternoon to everyone joining us today. During today's call, I will provide an update on our key strategic priorities that I outlined in March. I will also comment on our first-quarter results, which highlight improved performance in our business and commercial execution, amid ongoing turbulence in our end markets. David will follow up with details on our financial and operational results as well as our outlook for the second quarter and full year.

Our team remains steadfast on our mission to transform patient care and physician experience. There is nothing more important to us than improving clinical outcomes and changing the treatment paradigm for the patients and customers that we serve. As discussed during our last call, technology and innovation leadership is top among our three areas to achieve our vision and drive shareholder value. Veterans of the medtech space recognize that disruption is not linear, and innovation is extraordinarily difficult and that companies who consistently deliver here ultimately rise to the top of their segments.

Over the last quarter and in recent months, we continue to excel in this regard. With recent approvals, product advances, anecdotal case outcomes as well as registry, investigator-sponsored, and company-sponsored prospective clinical trial data that we are seeing, I am confident that we now have the most innovative suite of products in each of the three key areas of electrophysiology: access; diagnosis; and therapy. Before going deeper here, I would like to take a moment to share a recent case from Europe that highlights the Acutus mission and our core value proposition. This case involved a 76-year-old male suffering from complex atrial tachycardia and heart failure.

Due to significant comorbidities, including liver dysfunction, the patient was not eligible for antiarrhythmic drug treatment, so cardiac ablation was viewed as the best option for this individual. In the procedure, the physician took a step-wise approach to treat the arrhythmia, which included utilizing our mapping catheters, ultrasound transducers, and electrodes to quickly and efficiently create an anatomical map of the patient's right atrium, create a precise electrical wave propagation map of the whole right atrial chamber to quickly identify the area where the aberrant electrical activations first occurred and deliver RF energy to restore the patient's normal heart rhythm after using the AcQMap system to identify a crystal-clear ablation target. Following the ablation, despite several attempts to induce the patient back into tachycardia through rapid pacing, the patient was non-inducible confirming successful treatment. These steps, resulting in complete termination of atrial tachycardia, took about five minutes, bringing the total procedure time to 90 minutes.

By contrast, physicians report that using traditional systems with contact mapping in such complex atrial tachycardia ablation procedures can take three to five hours, if not longer. Moving now to our operational progress. During our last earnings call, I set forth three strategic priorities that will drive our business and guide our focus. These include technology and innovation leadership, commercial execution, and operational excellence.

I'd like to provide an update on each of these pillars. I'll start with technology and innovation leadership and, for simplicity, step through our update in order of procedural flow, which is not necessarily weighted by revenue potential. At the start of any catheter procedure is access, and we are building a comprehensive and differentiated portfolio here. As previously announced, we received 510(k) clearance for AcQCross Solo family of universal transseptal crossing devices.

This is the first and only transseptal puncture system specifically engineered to pair and mate seamlessly with Acutus' own suite of sheaths and with sheaths sold by other manufacturers. In the United States, there are over 300,000 electrophysiology and structural heart procedures per year involving the use of transseptal crossing devices. We began U.S. commercial launch of the new family of transseptal products in late April, and the early interest reinforces the value of the technology and what it brings to physician users.

As further announced today, we received CE Mark approval for our complete line of transseptal crossing device products, in addition to an expanded array of other sheath and access products. These approvals help complete our offering in CE Mark countries to cover the entire procedural continuum. We expect to launch these products during the second quarter. Overall, our portfolio of transseptal and other access devices provides a natural entry point into any account in the U.S.

or CE Mark countries and complements our core mapping and guided ablation portfolio. Next in the procedure is diagnosis and therapy guidance. This is the area where Acutus is most significantly differentiated versus our competition with our AcQMap mapping system. We have had good success educating our broader physician user base on the results from the core-to-boundary paper published out of Oxford and the Royal Brompton Hospital in February of this year.

This ablation strategy and technique, which is uniquely enabled by our AcQMap technology, demonstrated strong clinical outcomes in challenging to treat persistent AF patients in real-world settings. Specifically, 87.5% of patients in this independent study were free from AF in the absence of antiarrhythmic drugs at 24 months. Also, we have now completed enrollment and 12-month follow-up of our RECOVER study and look forward to sharing those results soon once the final data are analyzed. To remind you, RECOVER is a prospective multicenter study conducted in the EU and Canada that uses the AcQMap system in patients who have failed an initial or as many as two prior ablation procedures.

We hope that these data will reinforce the results from both our own landmark UNCOVER AF study and the independent core-to-boundary study. Finally, we move to therapy. As you may recall, we launched our AcQBlate FORCE sensing ablation catheter and system in the U.K. and Europe earlier this year.

This product line is approved for use in all chambers of the heart in CE-governed markets and was very well received during our limited market release. We are now in full market release. And so far, sites are reporting that the AcQBlate ablation system performs extremely well when paired with our AcQMap therapy guidance system. In early April, we initiated our U.S.

IDE trial for our AcQBlate FORCE sensing ablation catheter and system for the treatment of right atrial flutter. As a reminder, right atrial flutter ablation procedures account for approximately 30% of U.S. cardiac ablations and are projected to reach 200,000 procedures annually by 2025 based on third-party industry research. The trial is up and running at sites in the U.S.

and Europe, and we continue to project completing enrollment by the end of this year with approval toward the end of 2022. With our expanding product portfolio, we are positioned to become the partner of choice for electrophysiologists in the management and treatment of complex patients, such as redo ablations, treatment of complex tachycardia and atypical flutter and, of course, atrial fibrillation. To that end, our atrial fibrillation U.S. IDE application, where we plan to study the AcQBlate catheter and system in paroxysmal and persistent AF patients, is currently under review by the FDA.

We are on track to commence this study in the second half of this year, as previously communicated. Turning now to our second key priority, commercial execution. In Europe and the U.K., our direct and Biotronik distribution teams continued to drive solid case volumes and capital sales and placements. These operating segments led our first-quarter results, and we continue to see solid performance from these groups, despite an ongoing COVID headwinds in major European markets.

As for the U.S., we are seeing improved momentum in this business. Our new chief commercial officer, Duane Wilder, who joined us in March is providing great leadership direction and a disciplined go-to-market strategy. We are executing on our plan for more rigorous account segmentation, ensuring the right physician training and engagement and driving growth and utilization. Lastly, we continue to grow and scale the business as well as launch an impressive array of new products.

Operational excellence will become increasingly important as a driver for the company. We are better aligning our production volumes and inventory with end-market demand as well as driving improved yields for key product lines. David will discuss these dynamics in more detail later in the call, but I want to underscore the importance of our operations and manufacturing efforts to the long-term strength of the business. As for our results during the first quarter, we generated sales of $3.6 million, compared to $1.6 million in Q1 of 2020 and compared to $2.6 million in Q4 of 2020.

Both the year-over-year sequential sales growth was driven by higher procedure volumes globally and increased capital equipment sales. We increased the worldwide installed base of second-generation AcQMap consoles to 57 at the end of Q1, up from 51 at the end of Q4, bringing the total installed base of AcQMap consoles to 62 as of March 31, 2021, versus 58 at the end of last quarter. We exited the quarter with a good backlog and have seen placements pick up with four net new installations already completed as of April 30, equaling our net additions in all of Q1. Importantly, many of the new system placements so far in 2021 are at major academic and high-volume community institutions, consistent with our strategy to be more targeted with capital placements.

Turning to procedure volumes and utilization. We continue to see a wide standard deviation across accounts and geographies. In the United States, we saw progressive improvement in utilization per system per month, with March utilization rates about 50% above those we saw in January with the COVID impact on procedure volumes moderating. We do see some lingering COVID impacts as it relates lab access for medical device vendors, thus limiting some of our ability to train both physicians as well as our own mappers.

In addition to some limitations on access, the capital equipment environment remains somewhat constrained, and contract processes are still longer than we'd expect in a normal operating environment. All that said, we continue to believe that more of the burden is on us to execute in the U.S. versus the impact of the external environment. Recent trends are encouraging, the team is showing stronger execution, and we are optimistic that this will continue.

In the U.K. and Europe, the dynamic is quite different, as COVID remains a significant issue for much of the region. During the first quarter, only half of our consoles were consistently active due to hospital and government restrictions on elective procedures. Importantly, within active centers, procedure volumes and console utilization has doubled versus the prior year, reflecting solid commercial execution as well as the benefits of having our mapping and ablation product lines on the market over there.

In the U.K., which is our largest market currently in Europe, we are seeing some stabilization, as COVID vaccination rates and economic recovery are more closely following that of the U.S. Elsewhere in Europe, we still see rolling COVID shutdowns and slowdowns, and our team is working hard to maximize the performance on active consoles. As mentioned previously, late in the first quarter, we also transitioned our AcQBlate FORCE sensing ablation catheter and system into full commercial launch. Feedback from the clinical community remains strong, which was further highlighted by case presentations at the European Heart Rhythm Association Virtual Conference in April.

We expect AcQBlate utilization to ramp meaningfully throughout the year and for this product line to be a key driver of future performance. Lastly, our partnership with Biotronik continues to deliver strong results. While installations were delayed due to COVID, and there is concentration in markets like Germany where elective procedures have largely been on hold, we are starting to see improvements. The Biotronik commercial team remains heavily engaged on training and implementation, and we expect this collaboration to be a critical driver over the short, medium and long term.

Overall, I'm extremely proud of the progress our teams are making to execute our strategy and bring innovative solutions to physicians, patients, and healthcare systems around the world. First-quarter results exceeded our internal expectations, and we are continuously sharpening our focus to drive enhanced performance. Through the rest of 2021, we expect to have several clinical data, regulatory and product milestones that will further illustrate our long-term value proposition. We look forward to providing these updates throughout the year.

With that, I'll now turn it over to David for our financial results. David?

David Roman -- Chief Financial Officer

Thank you, Vince, and good afternoon, everyone. During my remarks today, I will provide details on first-quarter 2021 operating results as well as our outlook for the second quarter and full year. In today's press release and 8-K filing, you will notice updated disclosures on our P&L. These changes include a full non-GAAP P&L, whereas previously, we only provided adjustments at the net income and loss line.

In today's call, I will be referring to non-GAAP financial measures for all P&L line items. A full reconciliation of GAAP to non-GAAP financial measures is presented in our press release for your reference. Our revenues for the first quarter of 2020 were $3.6 million, up from $1.6 million in Q1 of 2020. The Q1 year-over-year revenue increase was driven by procedural adoption for our broad range of EP products and transseptal access devices, direct capital sales of our AcQMap console and the implementation of the Biotronik distribution agreement.

Sales in our direct businesses of $2.4 million increased nearly 60% from $1.5 million in the first quarter of 2020. Disposal utilization and service contract revenue advanced 77% versus the prior year and accounted for the majority of Q1 sales growth. Revenue through distribution agreements of approximately $1.2 million compared with $36,000 in the prior year's first quarter driven by both procedure volume growth and capital sales. Non-GAAP gross margin was negative 89% for the first quarter of 2021, compared with negative 95% in the first quarter of 2020.

As referenced in our press release, there were several discrete items that were significant gross margin headwinds in the first quarter. A meaningful factor impacting gross margins was the write-off of excess and obsolete inventory, resulting from the transition to a new product line and fully in-house manufacturing for our transseptal access product lines. We also took additional excess and obsolete reserves for short shelf-life product. In aggregate, excess and obsolete inventory charges impacted non-GAAP gross margin by approximately $800,000 or 23 points to the gross margin line.

Excluding these charges, non-GAAP gross margin was approximately negative 66%. We have not excluded E&O charges from non-GAAP results but wanted to highlight this number given its magnitude and our view that this is a one-time adjustment. As you may remember on our last call, I discussed the importance of demand planning to support commercial and manufacturing operations. We are making excellent progress in this regard as well as executing several cost and yield improvement initiatives.

In addition, several of our new product launches, such as our next-generation AcQMap mapping catheter that is now available in both the U.S. and CE Mark countries, carry a better COGS position. The combination of better yields, forecast alignment, and new product uptake should all help drive improved gross margins starting in Q2. Non-GAAP R&D expenses were approximately $9 million in the first quarter, compared with $7.8 million for the same period of 2020.

The increase in R&D expenses was primarily related to investments in the AcQBlate FORCE sensing ablation catheter, our Pulsed Field Ablation program, Transseptal Access products, software development, and upgrades to our AcQMap mapping catheter. Non-GAAP SG&A expenses were $13.8 million in the first quarter of 2021 compared with $8.7 million for the same period last year. The increase was primarily due to the expansion of our commercial team in conjunction with our full global launch and an increase in G&A for public company-related costs. Excluding specified items, our non-GAAP net loss for the first quarter of 2021 was $27.3 million or $0.97 per share, compared to a non-GAAP net loss of $19 million or $1.11 per share after giving effect to the pro forma conversion of our convertible preferred stock.

Our total cash balance at the end of the first quarter of 2021 was $106.9 million. Looking to the remainder of 2021, I would like to provide some further detail regarding our full-year and second-quarter outlooks that were included in today's press release. Our first-quarter results showed better performance from where we exited 2020. In the U.S., COVID-related headwinds are fading, and we are starting to see a thaw in procedure volumes at major accounts.

At the same time, we continue to see shutdowns across key markets in Europe that is making performance somewhat uneven. All that said, we are keenly focused on the variables that we can control, such as commercial execution, product launches, and manufacturing. As a result, we expect to see continued sequential improvement in the second quarter and project sales to range between $3.8 million and $5 million. Based on current trends and planned internal initiatives, we continue to anticipate a more meaningful step-up in Q3 and Q4.

On our last earnings call, we outlined five key factors to support this growth throughout the year, and I'd like to give you an update on each of these drivers. The first is the timing of capital sales and conversions. We have several evaluations that are reaching completion. Our teams are working to convert these into capital sales leases or catheter utilization deals.

Second is the pace of manufacturing ramp for AcQBlate and transseptal crossing devices. In response to higher demand, we are adding resources to support the AcQBlate commercial ramp in Europe. This should drive improved yields and facilitate higher production volumes and correspondingly revenue. As for transseptal crossing devices, we have resolved all back orders as of the end of April and are seeing manufacturing ramp accordingly.

Third is new product launches. We expect to see increased contribution from new product launches over the course of the year, including AcQBlate, the AcQCross family of transseptal crossing devices, our next-generation AcQMap mapping catheter, and the AcQGuide VUE sheath. Fourth is end-market conditions. As discussed earlier, we continue to see improvements in the U.S., while conditions in Europe remain variable by hospital, by market, and by month.

Regardless, our forecasts do assume that the global end markets that we serve show signs of improvement to the back half of the year, and nothing we see today gives us pause on this assumption. Lastly, we continue to expect improved commercial execution in the U.S. to be a major driver. We are strengthening and expanding our team, investing in critical training resources, and ensuring we have the right level of account coverage.

With the first quarter now complete, and taking into account our second-quarter guidance, we reiterate our view that 2021 revenue will be heavily weighted to the back half of the year, reflecting the aforementioned drivers and the well-documented headwinds we experienced entering the year. Putting this all together, we continue to project full-year revenue to be in a range of $22 million to $30 million. I will now turn the call back to Vince for closing remarks.

Vince Burgess -- President and Chief Executive Officer

Thank you, David. As I reflect on the cadence of our performance in the first quarter and here early in the second quarter, the trajectory of our business is gaining momentum. Our commercial execution globally is strengthening, and I'm confident we have the right team in place. In addition, we continue to advance several key products through our pipeline and expect 2021 and 2022 to be very active years for product approvals and registrations.

Lastly, we are intensifying our efforts to improve operational performance, and these initiatives are starting to take hold. We appreciate your continued interest and support, and we'll now open the call to your questions. Operator?

Questions & Answers:

Operator

[Operator instructions] Your first question comes from the line of Robbie Marcus with J.P. Morgan. Your line is now open.

Robbie Marcus -- J.P. Morgan -- Analyst

Great. Thanks for taking the question, and good evening. Hey. David, welcome to your first earnings call.

David Roman -- Chief Financial Officer

Thanks, Robbie.

Robbie Marcus -- J.P. Morgan -- Analyst

Just wanted to start, as we think about guidance for the rest of the year, 2Q probably came in just a hair lower than where The Street was thinking. Placements in first quarter were a bit lower. It's still calling for a pretty meaningful acceleration in third quarter and fourth quarter. So I'd say, a, what gives you confidence that sales can accelerate like that in third and fourth quarter? And what kind of environment is that assuming? And then, b, how should we think about the balance of what you're assuming for new system placements and then utilization of system placements to get to those revenue numbers?

Vince Burgess -- President and Chief Executive Officer

So in terms of the environment that's all kind of predicated on, I think we're kind of assuming, as we get into the back half of the year in the U.S., we're looking at an environment that approaches normalcy. So, really, the lingering thing we're seeing primarily on the East Coast and kind of Northern Midwest is some continued friction in terms of access to labs. So we can bring one person in versus one person plus a mapper trainee or something like that. But other than that, I mean, I think most of our accounts are kind of up and running pretty close to normal operations.

Europe, we're assuming that Europe will be relatively light in August as it normally is from a procedural perspective and then start to get back toward normalcy in September, October, and November, which have been historically quite good for us over there. And then, obviously, the seasonality in December with the holiday and whatnot, we expect some kind of a normalized kind of reduction there. So, I mean, that's kind of my sense of just the overall environment. In terms of systems placements, I mean, I think the models have it pretty well that I've seen most recently, have it pretty well right in terms of what we think we can do in terms of placements.

Q1, in the prior call when we talked about how we were thinking about Q1, I tried to get across that with the targeting that we were really focusing in on and with adding Duane and really thinking about where we place our systems, the types of physicians we want to be working with at this phase of our evolution, I kind of had the sense that we would probably move a few consoles around, and it might be a little bit lighter than the rest of the year in terms of placements. And then as we came into Q2, things would start to ramp up again. And as I mentioned in my prepared comments, I think our net new adds in April alone in terms of installed base equal to Q1. So I think we're on track now.

Just Q1 was just a little light, almost intentionally. We really wanted to make sure everything we installed was in the right place, the expectations were set properly, and we have the right docs identified. Did I miss any of Robbie's questions?

David Roman -- Chief Financial Officer

I think, Robbie, the only thing that I would add, and you commented on the second quarter, a couple of variables impact that, which are obviously the pacing of capital sales. There is, as you know, each capital sales anywhere from $200,000 to $300,000 for us. So as those might move quarter to quarter, they can have an impact on our interim results. I would also point out the COVID dynamic in Europe did have an impact on our business entering the quarter, but we have since started to see that moderate quite significantly and are encouraged by the trends we're seeing today in Europe, and the guidance for the balance of the year assumes that what we're seeing today continues.

Vince Burgess -- President and Chief Executive Officer

We also, with our Biotronik partner, had forecasted a few additional placements in Q1 that were pushed out due to continuing COVID issues in Austria, Australia, and Malaysia.

Robbie Marcus -- J.P. Morgan -- Analyst

Got it. And then David, how do we think about expenses ramping through the year? Obviously, there is going to be more meaningful revenue in third and fourth quarter. How do we think about the scale-up of SG&A and R&D throughout the year?

David Roman -- Chief Financial Officer

Sure, Robbie. So while we are expecting, you're correct, revenue to ramp throughout the rest of the year, we would actually not expect a meaningful expense ramp to follow that. And let me walk through some of the specific reasons there. Starting with R&D, we have over the past couple of years really sprinted to pull together a wide and diverse portfolio of differentiated products.

And a lot of that investment in, call it, the pure development or research phase is sunsetting. So as we think about our R&D investments, the breadth of the product portfolio that we've been able to create is largely reflected in trailing R&D expense, and we would expect to be able to prioritize that more judiciously going forward.

Vince Burgess -- President and Chief Executive Officer

And if I could just jump on that really quick before you move on. Robbie, you've been focused on the R&D spend throughout our getting to know you and you're getting to know us. The thing I want to point out here is over the last 18 to 24 months, we have revved basically our entire system. And when I say revved, I mean, executed on upgrades of the console, the software as many as six times and I think each individual disposable component that we manufacture and sell has been revved from Gen 1, Gen 2.

And as of today, which we announced, are basically nearly our final CE Mark approvals, those are now in production, approved and available for launch in the U.S. and Europe and through our distribution partner, Biotronik. So I have to tell you, it's been a -- all these revs, all these changes are intended to address the early feedback we've received from our customers about things that are great about the products, things that need additional tweaking and improvement, and some cost reduction things we've been working on. I would say the majority of that heavy lift is now behind us, and we feel great about the full array of second-generation products, which we have cranked out of our R&D organization.

David Roman -- Chief Financial Officer

On SG&A, Robbie, as I look at sales, marketing, and G&A, we will continue to make investments in the sales force, and I see opportunities to manage tightly marketing expense as well as drive down G&A. We did have some, I would say, transitionary expenses in the first quarter related to senior-level management turnover that will not recur going forward. And you didn't ask about gross margins. You brought up operating expenses, but I do want to point that out that gross margin will also be a significant lever as we go forward, and we are starting to see that materialize in real time.

Vince Burgess -- President and Chief Executive Officer

And when you say in real time, we're talking about in Q2 and in April, specifically. Correct.

David Roman -- Chief Financial Officer

Correct.

Robbie Marcus -- J.P. Morgan -- Analyst

And when do we see that turn positive?

David Roman -- Chief Financial Officer

So for gross margin to be positive, we have to be at a run rate of about, call it, $9 million a quarter, with a mix of 80-20 disposables and capital, and that should occur exiting the third quarter with a full quarter of gross margin positivity in Q4. There are some opportunities we are working on right now, specifically around yield improvement, that could pull that forward.

Vince Burgess -- President and Chief Executive Officer

And to be clear, standard margins on our disposables are presently already positive. It's the overhead that obviously we're getting hit on.

Robbie Marcus -- J.P. Morgan -- Analyst

Great. Thanks a lot.

Operator

Your next question comes from Margaret Kaczor with William Blair. Your line is now open.

Margaret Kaczor -- William Blair -- Analyst

Hey, guys. Thanks for taking the question. Maybe first one for me. You guys brought Duane on board.

You've talked about these commercialization changes. Can you give us a good sense -- it's a twofold question. So one, can you give us a sense of utilization within accounts? The March rates were encouraging, but as we look at that, is that coming from accounts reopening back up post-COVID or share taking within them? And then as we think about utilization climbing from here, what's being assumed in some of those guidance assumptions and the ranges?

Vince Burgess -- President and Chief Executive Officer

We're dealing with small numbers of hospitals and accounts, relatively speaking. In Europe, over half of our consoles basically have been down in all of Q1 due to -- 100% due to COVID. So we -- and we're -- a couple -- some of them are still down or doing very light procedural volume, and some are actually still going up and down. In Rotterdam, the Netherlands, Belgium, we're still seeing some slowdowns and then return to work.

We are seeing generally, though, the centers getting back online. In the U.K,, they brought these state-of-the-art hospitals that were really state-of-the-art EP labs over the last six or nine months down into basically field hospitals to deal with COVID. And now they're bringing them back up into state-of-the-art EP labs again. And if you talk to our folks on the ground, it's taken a little bit longer than expected to get there, but they are getting there, and we expect the U.K.

probably to lead the charge in terms of coming back up to more normal utilization levels. We are on our update call with the entire European team for a couple of hours this morning getting an update, and this is just an outstanding team, highly mature, very experienced, and tenured group with a great handle on the business, and we feel like they're properly positioned with the right customers. This product and the technology is generally being used in the more complex procedures, and we see that we are becoming the technology, the product of choice in redos and more complicated persistent patients and complicated tachycardia. So that's how we drive utilization there.

I'd like to be at a place where we're at 25-, 30-plus percent of complex procedures and accounts where we are installed. That's I think a great target for us. The U.S., I would say the U.S. is a bit more of a mixed bag.

We have accounts that are rolling nicely and generating pretty consistent utilization. We have a number of accounts that have had very low utilization in the last quarter. We had a group of consoles that were in accounts that were part of a larger group where we had some contracting issues that we had to get through, which we actually just got through last week. And we were excited to restart particularly one of those accounts that did four cases yesterday with us in a single day, in a single room.

So it's really kind of a mixed bag of those sorts of issues in the U.S. But for us, it's all about making sure that our mappers are well trained, we have the right message. One of the things we're really leaning on heavily now is training our U.S. mappers to deliver over the core, the boundary diagnostic and ablation strategy that came out of our European experience over the last couple of years, which was written up in kind of a cookbook step-by-step fashion in that core-to-boundary paper out of Oxford.

And having that recipe, that playbook for our mappers and our sales reps to deliver over to U.S.-based EPs I think is going to serve us very well. So those are some of the kind of the key drivers. And, David, I don't know if you have anything you want to add on this.

David Roman -- Chief Financial Officer

Margaret, I would add, as we think about overall utilization, our guidance does contemplate that utilization rates continue to improve from what we saw in the first quarter, and that is, if I look across the different parts of the world, we are comfortable in that assumption because we saw it pretty consistently, January to February to March, a sequential progression in utilization and especially as we bring back online some critical high-volume centers that also contributes to the overall revenue performance.

Margaret Kaczor -- William Blair -- Analyst

OK. And part of what I'm trying to get is what did April look like. How does that set up for Q2? It sounds like maybe there's some easier low-hanging fruit as some of these centers still come back, so we should start to see that utilization rise just across the installed base, without assuming you're sure taking until hopefully later in the back half of the year. Am I hearing that right?

Vince Burgess -- President and Chief Executive Officer

That's correct. I think that's fair.

Margaret Kaczor -- William Blair -- Analyst

OK. And then if we look at the net new installs, the 4 that you gave in April seemed pretty good. I couldn't quite tell based on what you told, Robbie, how much of that maybe had moved from Q1 to Q2. How should we think about that as a good monthly rate going forward? What would you guys be happy to see?

David Roman -- Chief Financial Officer

I think that would be an OK starting point as a monthly rate.

Vince Burgess -- President and Chief Executive Officer

Globally. I mean, Biotronik, Europe. Yes. I think kind of that pace.

David Roman -- Chief Financial Officer

I would say, yes, at least at that pace, Margaret, would be our expectation. And in terms of the shifting of timing, whether it's Q1 into Q2, we don't have a ton of control necessarily over when systems get placed. It is around contracting and hospital availability to do an install. The key thing that we want to make sure we communicate out of -- coming out of Q1 is as we think about being highly targeted with our accounts, being targeted does not necessarily mean limiting the number of opportunities.

We still see a significant opportunity to grow our installed base. And as we come out of that account segmentation and targeting initiative in Q1, we start to execute on that with more vigor in Q2 that helps us with the -- that contributes to the U.S. placements. And then there clearly still is some COVID overhang outside the U.S.

that is resolving and should continue to resolve as we move forward.

Margaret Kaczor -- William Blair -- Analyst

OK. Perfect. Thanks, guys.

Operator

Your next question comes from Bill Plovanic with Canaccord. Your line is now open.

Bill Plovanic -- Canaccord Genuity -- Analyst

Hey. Great. Thanks. Good evening.

Thanks for taking the questions. So just clarification off Margaret's question. The four installs in April, you said you'd be happy to see that. Is that for a month or for a quarter, globally? Just for clarification.

Vince Burgess -- President and Chief Executive Officer

Yes. That would be a good monthly figure. I think we'll have months where we do more than that. We may have a month or two that we do less, but that I think is a good pace for us.

Bill Plovanic -- Canaccord Genuity -- Analyst

OK. And then just as we get out here, definitely last year is a challenging year given the macro environment, bringing new technology to market. I think you covered that in your opening remarks. But what is the first-year learnings or the launch earnings? How have you implemented that into the commercial strategy, both direct in the U.S., OUS, and with your distributor partners?

Vince Burgess -- President and Chief Executive Officer

Yes. In talking with our European team, we really spent a lot of time on that in the last couple of months, making sure we're crystallizing that and trying to think about how it translates into the U.S. So, Europe, feel great about not only where we are, but where we're headed utilization wise and where we're headed in terms of additional console installs and ablation. We call them electronic stack installs.

We've got a nice number of therapy electronic stacks already, and I think we expect to double that installed base of electronic stacks in this quarter alone. So we're trying to bring that over now to the U.S. I think for me, the number one -- two things, I guess. Number one, we need to do a better job of bringing over that European experience in our training of our commercial team here in the U.S., and we're really focused in on that.

And number two, it's really about targeting, and when I say targeting, the place for us to go is centers where there are one or more physicians who aren't satisfied with their current procedural technique for persistence, for redos, for tachycardias and are ready, willing and able to think about modifying their workflow, modifying their technique to try and improve their acute and long-term success versus just taking a cool new system that has a lot of whiz-bang sort of optics to it, but be unwilling to actually modify their technique. That's just not a great place for us right now. And, frankly, it never will be. The only way you can deploy our system to make -- to do things differently is if you're willing to go away from just a standard PVI ablation approach or PVI plus posterior wall.

If that's just what you're hellbent on doing as an electrophysiologist, the competing systems do a very adequate job of an empiric anatomically based ablation approach. We think and core to boundary and UNCOVER really point to that. We think that there's more that can be done. You can be more patient-focused, more adaptive, more individualized for each individual patient and hope and expect to see better outcomes.

And we think only our system really has the potential to facilitate that because the current systems, it's just biologically implausible to use a conventional contact mapping system to map and individually ablate a patient who's in a non-regular rhythm, so someone that is an irregular rhythm, not in sinus rhythm. It's just not really plausible to map those patients. We think with our system, we bring that to the party, and that can help take the physician and the procedure to the next level.

Bill Plovanic -- Canaccord Genuity -- Analyst

That's actually really helpful. And then, Vince, how does that translate into the funnel of potential accounts, as you said, the targeting? Does that take the funnel of what you originally expected and cut it down by 10%, 50%, 90%? How should we think about that in terms of kind of this initial ramp? And then as you think of the accounts that have come on board, I think you gave us some clarity on that the U.S. accounts are doing the more difficult cases, and it's really that's what they're using it for, have you seen it kind of move into that paroxysmal case yet? And those are my questions.

Vince Burgess -- President and Chief Executive Officer

As you look at our initial models that we've worked to our analysts to put together last spring and the rollout of consoles and the pace of those consoles and just the sheer number of consoles set against the total number of EP rooms in the U.S. and around the country, we mapped out a pretty modest share of rooms. When you go around the world and you talk to doctors about how they feel about the tools they have and how confident they are in their success rates in treating persistent cases and redos, and quickly treating tachycardias that are complex, the vast majority of the physicians we talk to feel like there's plenty of room to improve. Now not all of them want to go through the sometimes arduous process of changing workflow to do that, and those folks probably aren't for now, for us.

A lot of these physicians, however, give all the signs of being ready, willing, and able to roll their sleeves and do that work and work with us. And I would say there are plenty of EPs out there that feel that way, and certainly a sufficient number to hit that three- and five-year kind of rollout trajectory that we spelled out a year ago. So I see no major change in how we think about the funnel based on what we've learned and experienced.

Bill Plovanic -- Canaccord Genuity -- Analyst

Great. Thank you.

Operator

Your next question comes from Marie Thibault with BTIG. Your line is now open.

Marie Thibault -- BTIG -- Analyst

Hi. Good evening. Vince and David, thanks for taking the questions. I want to ask one here on AcQBlate and the full-market release that you're headed into in Europe.

I know you mentioned you're adding some resources there. And given some of the COVID constraints, would love to hear how you're thinking of the cadence of that rollout. Is that mostly kind of a second-half event as we think about our models? And what's the latest on feedback from AcQBlate users? What's it doing to their utilization and sort of any qualitative anecdotes you can give there?

Vince Burgess -- President and Chief Executive Officer

OK. Yes. I've been in medtech for a long time. And usually, an emerging company -- emerging technologies, you go over there first, and then you focus primarily on the U.S.

because of reimbursement and other issues that they make Europe hard to do well in. We're doing really well in Europe, and I think it's a great proof point for us in terms of the value proposition that we bring with our mapping system. And as we have now put our mapping system together with the AcQBlate, and I want to -- this is an important distinction here. This is not just a catheter.

This is the AcQBlate catheter paired together with the FORCE monitoring unit that we have that is our unit, together with a concurrently designed RF generator and pump that was designed by our partner Biotronik,as one unit. Basically, it works just seamlessly together. I think it is the best electronic stack in the therapy business presently in the market anywhere in the world. And when you pair that up with the catheter, which I think can go toe to toe with any catheter, it's just a great, great unit.

We are also finding that when we take our mapping system and have it used along with an Abbott catheter, pump generator, FORCE sensing unit, these weren't designed to work flawlessly together from the get-go, and it just imposes some workflow issues. You have a higher likelihood of having to do troubleshooting and things like that. You may not have as clean a signal as consistently room to room to room. What we really like about all this being designed from the ground up to work together, every single element to work together, we're just getting better results.

And then the nurses and the techs that work in these rooms really appreciate the way the consoles, the electronics were designed. They're very small. They're literally very light. They're very simple and easy to set up and use.

The alarms and everything they have are very sensible, and they work very well with the catheter. And we think that we're going to be able to make some hay with that. The other thing we love is just when we have that controlled set of systems, all the different individual elements, we know where the noise is, we know how the connector is supposed to be set up. We do it the same way every time when we set it up, along with our mapping system, and we're just getting better, more consistent results and happier customers.

So we're kind of pedal to the metal over there in terms of that AcQBlate catheter and system launch as we speak. We're not really governing that back. We up to now have had some production capacity issues with the catheter, and I believe we are getting through that. We've invested significantly in our production capacity there from a catheter perspective.

So we're really pushing hard to really get a significant installed base, and we'd like to be one to one with our mapping systems and also have some ablation stacks even in centers where we don't have mapping systems as well because it works very well on a stand-alone basis also. So we're not really holding back in Europe. We're really pressing over there, and the team has just done a terrific job. And we're super eager to have all of that in the U.S.

We've already -- we have -- I don't recall, I think we have four or five stacks up and running in the U.S., supporting our IDE trial, which is just great for us because our U.S. team now gets to experience the benefits of a system that was designed to work together, and they're having a lot of fun with that.

David Roman -- Chief Financial Officer

And, Marie, maybe just to clarify. So from a modeling perspective or how this weaves into our guidance, a couple of important things to point out here. First is when we launched AcQBlate earlier this year, we did that through what we call limited market release with the intention to understand how the product performs in a real-world setting. During that time, we don't generate any revenue.

We moved into full market release very late in the first quarter. There are some additional factors in the U.K. where you have to get in the NHS catalog listing to generate revenue. We applied for that in February.

It's about a six-month turnaround time. In the interim, we can sell AcQBlate on consignment in the U.K. but have to defer that revenue. And we expect to recognize all of that deferred revenue in Q3, which is another one of the factors that impacts the back half loading of our year, but we would also expect production volumes to ramp materially throughout the year as well.

And as we get this in -- as volumes ramp, and we get this in the hands of our reps across all of Europe as well as Biotronik, you should see an increased contribution quarter by quarter.

Marie Thibault -- BTIG -- Analyst

OK. Helpful insights on both. Maybe I'll ask then on AcQCross. Tell us a little bit about how you're envisioning the launch here in the U.S.

and then pushing forward in Europe as well with that product. Again, it's one I know that you've called out as a promising part of the whole portfolio, so would love to hear how that adds to procedure ASPs over time here as well.

Vince Burgess -- President and Chief Executive Officer

Yes. So the AcQCross launch in the U.S., if you've been following this, this is part of the acquisition we made a couple of years ago of a company called Rhythm Xience. We acquired that product line. We iterated it.

We launched it out in the market as a combination of the septal crossing, along with our own set of steerable and fixed per sheaths and saw really, really good feedback and uptake in both EP ablation and in structural heart. So we were seeing rate utilization in LAA procedures and WATCHMAN procedures for that product line. One of the limitations that we saw in the EP space was by forcing a user to use not only our septal crossing device, also our sheath. We saw some friction from EP doctors around moving away from their sheath of choice.

So what we did is we said, "Look. Why do we want to fight that fight? Let's meet them where they are. Let's make this really novel effective, safe, fast septal crossing device compatible with the vast majority of the market-leading sheaths that are used in ablation." And we identified that opportunity and executed on that very well, and we are now compatible with the Agilis from Abbott, with diverse -- or the Vizigo from Biosense, with SL1 and with the cryoballoon sheath from Medtronic and, of course, with our own sheaths. Those catheters are length-to-diameter matched and transition matched and they lock into the hub at the back.

So you can just go right in, cross the septum, pop out, and you've got your sheath of choice to guide your ablation without having to change your technique. Order of magnitude from a procedural revenue perspective, I think we have talked publicly about our per procedure revenues for mapping-based catheters being a bit north of $5,000 a case. And I think you can see a pretty clear path toward increasing that by about 10% in cases where they use our AcQCross products. So very nice opportunity there.

About half -- I should point out, about half of the accounts that are using these products are -- they don't even have our mapping systems yet. They're just using them on a stand-alone basis because they love them and want to be using them for their ablation procedures and their structural heart procedures. Those accounts where we don't -- it's really fertile territory. It's a great brand builder for us and door opener for us.

We got a couple of accounts that I can think of right off the bat that, once they get to know our rep, once they get to know our product and how we think about this market, all of a sudden, they started asking about our mapping system. And it was a great door opener for us to get in there and start contracting process to get a mapping system installed.

David Roman -- Chief Financial Officer

And more of the specific examples that Vince is referencing, actually, I believe, will be installed this week or next. So we are seeing this as a nice door opener into new accounts.

Vince Burgess -- President and Chief Executive Officer

And so we expect to see the same in Europe as it relates to both ablation and structural heart opportunities. There is a nuance in Europe that we're still trying to kind of wrap our heads around, which is the vast majority of cases, they cross the septum under fluoro guidance or using pressure differential as opposed to ICE, image-guided septal crossing. And so we're going to go over there starting this month and work through the workflow issues. We're highly confident that it will be well-liked over there.

We just have some workflow differences that we need to better understand now that we have approval and really make sure we work with those structural heart and EP partners to get this right coming out of the gate.

Marie Thibault -- BTIG -- Analyst

Makes sense. Thank you.

Operator

[Operator signoff]

Duration: 62 minutes

Call participants:

Caroline Corner -- Investor Relations

Vince Burgess -- President and Chief Executive Officer

David Roman -- Chief Financial Officer

Robbie Marcus -- J.P. Morgan -- Analyst

Margaret Kaczor -- William Blair -- Analyst

Bill Plovanic -- Canaccord Genuity -- Analyst

Marie Thibault -- BTIG -- Analyst

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