Nevro Corp (NVRO) Q2 2021 Earnings Call Transcript

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Nevro Corp (NVRO -2.11%)
Q2 2021 Earnings Call
Aug 4, 2021, 4:30 p.m. ET

Contents:

• Prepared Remarks
• Questions and Answers
• Call Participants

Prepared Remarks:

Operator

Good afternoon, my name is Ashley and I'll be your conference operator today. At this time, I would like to welcome everyone to Nevro's Second Quarter 2021 Financial Results Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. [Operator Instructions]

I would now like to turn the call over to Julie Dewey for introductory remarks. Please go ahead.

Julie Dewey -- Vice President of Investor Relations & Corporate Communications

Good afternoon and welcome to Nevro's second quarter 2021 earnings conference call. We appreciate you joining us. I'm Julie Dewey, Nevro's VP of IR and Corporate Communications. With me today are Keith Grossman, Chairman, CEO and President; and Rod MacLeod, Chief Financial Officer.

The format of our call today will be a discussion of second quarter business results from Keith followed by detailed financials and guidance from Rod and then we'll open up the call for questions. Please note, there are also slides available related to our second quarter performance on the Nevro Investor Relations website on the Events and Presentations page. Earlier today, Nevro released its financial results for the second quarter ending June 30, 2021. A copy of our earnings release is available on our IR section of our website at nevro.com. This call is being broadcast live over the internet to all interested parties on August 4, 2021, and an archived copy of this webcast will be available on our Investor Relations Website.

Before we begin, I'd like to remind everyone that comments made on today's call may include forward-looking statements within the meaning of federal securities laws. Our results could differ materially from those expressed or implied as a result of certain risks and uncertainties. Please refer to our SEC filings, including our Form 10-Q to be filed later today for a detailed presentation of risks. The forward-looking statements in this call speak only as of today and we undertake no obligation to update or revise any of these statements. In addition, we will refer to adjusted EBITDA, which is a non-GAAP measure that is used to help investors understand Nevro's ongoing business performance. Non-GAAP adjusted EBITDA excludes certain litigation expenses, interest, taxes, and noncash items, such as stock-based compensation, depreciation and amortization. Please refer to GAAP to non-GAAP reconciliation tables within our earnings release.

And now, I'll turn the call over to Keith.

Keith Grossman -- Chairman, Chief Executive Officer & President

Okay. Thanks, Julie. Good afternoon everyone and thanks for joining us. In a moment, Rod will cover the specifics of our second quarter results and third quarter guidance, I'm going to focus my comments today on the current state of our business, including the current state of the COVID recovery and on our PDN launch following July's FDA approval. This is certainly a really interesting time in our business. On one hand, our organization and our customers have never been more excited about our mid to long-term prospects. Three new products already introduced this year, new and exciting data on non-surgical back pain and diabetic neuropathic pain patient populations with the latter, resulting in our most significant FDA approval since 2015, really exciting new products on the horizon and a whole lot more.

On the other hand, our team and our customers are dealing with a tough recovery environment from the COVID pandemic in the near term, which has proven quite challenging to forecast and, at times, to understand. So, let me start with this topic and after that I'll talk a bit about the PDN approval and launch. In the context of the current environment, we were actually pleased with our 81% global revenue growth in Q2 versus 2020 and 9% growth versus 2019. What I'd like to do is look a little bit at actual procedure activity. Compared to prior year Q2, total US permanent implant procedures increased 60%, while trial procedures increased 45%. Sequentially, we're pleased that we saw a bit of improvement over Q1 as trials per day improved 4% and perms per day improved 11%. However, while the positive trend, both of them grew at a slower rate than initially projected.

Now, compared to Q2 of 2019, US permanent implant procedures increased 5% and trial procedures decreased 8% and, of course, trials drive future permanent implants and revenue, so lower trial procedures are certainly a significant factor in our Q3 guidance. It's obvious to all of us at this point that various procedure volumes throughout healthcare are returning to pre-COVID levels at different rates and, therefore, the same is true for the medical device markets that accompany those procedures and, clearly as the data rolls in the market, the markets rather for chronic pain treatment, have proven to be among the more deferrable elective care areas by patients in this COVID recovery to an extent that I think it has probably surprised many observers.

Our team has now done extensive rounds of market research with 100s of implanting SCS physicians, primary care physicians, chronic pain patients, and even hospital and ASC administrators, and we've taken a deep dive into claims data as well. Here are few insights into the SCS market that we believe also sync up well with our own day-to-day observations in the field. First, any current delay in returning to pre-COVID volumes seems to be driven disproportionately by patient sentiment and patient behavior, and as for now at least much less about doctor or facility capacity, interest, policies, or procedures. So, let's start with patient visits. Patient visits for the identified reason of chronic pain continue to be slower to recover in both primary care and pain physician office settings. Lower primary care visits for these patients are running at about 76% of pre-COVID levels and have resulted, therefore, in lower new referrals to pain physicians.

In turn, pain doctors are seeing new patient visits that are running at about 83% of their pre-COVID new patient levels or as we know, of course, patient return to some other specialties that are proceeding at a quicker pace. The primary reasons patient said they are reluctant to seek care are financial issues and ongoing fear of COVID. While the COVID fears are rather obvious, patients are concerned about employment's instability, high out-of-pocket costs, and either their loss or potential loss of health insurance. Conversely, we acquired about payer policies and payer behavior and at present, there is no evidence of any change in payer behavior regarding pain therapies that seems to be having a material impact. Interestingly, and despite their near term COVID or economic concerns, over 90% of pain patients indicate that their management of pain has not improved during COVID. In fact, half of the patients told us their pain has gotten worse, not better throughout COVID. So, we still do expect patients to return for treatment at prior levels at some point to address the burden of their chronic pain.

As for physicians, both pain physicians and primary care physicians indicate they anticipate patient volume returning and our pain doctors almost uniformly confirm that they remain very interested in SCS therapy generally and in growing their SCS business going forward. Now, on the topic of timing, we have, what I'd say is around an equal split among our pain doctors, some who feel the recovery will accelerate in the next few months, some later in the year, and still others who see a recovery pushed into 2022.

Now, looking at claims data; SCS trials and perms seemed to have recovered as well or better than almost any other procedure the pain physicians are doing. So, there doesn't seem to be any significant mix shift to procedures within our customer's practices. Additionally, we've confirmed that opioid prescriptions do not seem to have risen during COVID addressing any speculation the patients were being deferred with more aggressive medical management. Now, and maybe more anecdotally, we have observed in July, which seems to be a very strong desire on the part of both patients and our doctors to seek time-off and take vacations after what's been an obviously a long year, and I think reflecting their underlying expectations that both school and professional schedules may normalize in the fall. We expect to see this dynamic in August as well.

In short, we've learned that patient's reluctance to present to either of their primary care or pain physician for chronic back and leg pain is the most significant driver of slower recovery rates for reasons having to do with both COVID, infection fears, as well as the cost impact from factors, such as job loss, healthcare benefit loss or simply the fear of either or both. While there is no reason to believe that SCS patients weigh these concerns differently than other categories of patients, what is clear is that these patients while still suffering from unresolved chronic pain are nonetheless more able and more willing to defer their treatment than patients in at least some other elective care categories.

Now, importantly, we validated that other things that some have speculated about are not significant factors, such as payer behavior, replacement of SCS with alternative treatments, patients managing their pain better during COVID, any loss of interest in SCS therapy among pain doctors or referring doctors etcetera, and these were encouraging findings to us.

I'd also add that we are just over a month into the updated Medicare prior authorization requirements that went into effect for hospital, outpatient, fee for service patients on July 1. While our customers are dealing with some extra administrative details, it doesn't seem to have changed treatment volumes and we've not seen any disruption in getting claims approved through our own HFX Access team.

Finally, an important measure in diagnostic for us is how we are doing on a relative basis. While we believe our US revenue growth rate for the first half of '21 exceeds that of the market, we also recognized in this COVID environment that revenue comparable versus prior year and 2019 are all fraught with a lot of noise. Between industry wide stocking and destocking that occurred in 2018 and 2019 respectively as well as the timing of COVID impact and the pace [Phonetic] of recovery of canceled cases, it's challenging to determine accurate growth number comparisons. However, based on third-party claims data for actual procedures, here's what we do know. US permanent implant procedures for all market participants for the first half of '21 were down 6% compared to the first half of 2019. Nevro permanent implant procedures, on the other hand, were up 8% for the same six-month period. While revenue growth numbers can be impacted by the timing of shipments, procedural growth numbers more accurately indicate what products are implanted in patients and are better indication of share trends.

We've seen that some competitors accelerated shipments in the first half of '21 at least one or two quite meaningfully and, you'll recall, when I joined the company, we made a decision to discontinue quarterly stocking practices that exceed quarterly utilization and we've maintained that practice sense. Based upon Nevro clearly outpacing market procedure growth by 400 basis points in the first half of the year, we are confident that we do continue to win.

So, let me close this portion of my remarks by concluding that first, we believe the patient reluctance to reengage and willingness to defer is a primary issue behind slow SCS market recovery. Second, we've uncovered nothing to date to indicate that there is any enduring or fundamental change to or problem with the SCS market beyond the pace of COVID recovery. And third Nevro continues to perform well relative to the overall market by almost any measure. In fact, we continue to believe, we're very well positioned for longer-term attractive growth in our lower back and leg business when the full impact of COVID on our market subsides. And in addition, we're excited and now provide the only SCS treatment option approved by the FDA for patients who are struggling with debilitating painful diabetic neuropathy and who are unable to find relief with currently available pharmacologic options.

So, let me cover a few things on our nascent but exciting launch of PDN before I turn the call over to Rod. We are obviously thrilled to announce the FDA approval of the expanded indication of 10 kHz SCS for the treatment of PDN just a couple of weeks ago. This approval demonstrates the strength of our clinical data and puts Nevro at the forefront again providing a proven and transformative non-drug treatment option for PDN patients, who are struggling with debilitating pain and who are unable to find relief.

Our high frequency therapy delivered by our Senza system is now the only SCS system with an FDA approved indication for treating PDN and is the latest addition to our comprehensive HFX platform, providing the unique efficacy of our 10-K therapy to an entirely new category of patients. It's also now the only non-drug product approved for this indication. The approval itself was on time, with the final language of the approval completely in line with the inclusion and exclusion criteria of our PDN randomized controlled trial.

Let me be clear, this is not a category approval. This approval is specific to our product only, and in fact, the FDA-approved labeling is specific to our proprietary 10 kHz high frequency therapy. We were fortunate to have just gathered our entire US commercial organization a week before approval with thorough training and preparation for the launch, and following the FDA approval, we immediately initiated commercial launch activities in the US. I'm pleased to report that while still extremely early, the levels of interest among referring physicians and patients have exceeded our expectations and validated our market assumptions. We immediately deployed our dedicated PDN field organization to begin calling on physicians treating PDN patients.

Our new website HFX for PDN.com went live along with targeted professional education programs and digital as well as various other outreach initiatives to PDN healthcare practitioners and patients. In the two very short week since receiving approval, our PDN field team has made over 2900 calls on referring physicians. Our HFX coaches have engaged directly with 100s of patients and we've generated over 160 patient referrals to pain physicians through these combined initiatives. Now, these are qualified referrals of patients who fit the criteria for treatment and who have agreed to see a local pain physician regarding HFX for PDN therapy. In the coming months and quarters, we will have more color for you on just how and at what rate these patients go from qualified referrals to treatment. Initial physician response has been really positive. Although the anecdotes are far too many to mention here, in one primary care office, one of our PDN sales reps has given six PDN patient referrals on their first call. In another, office staff members actually approached our PDN sales team to talk to them about family members that are suffering from PDN.

We even had our first successful trials in the US. One patient was excited about the pain relief in her leg and pleasantly surprised that the burning sensation in their feet was also improved. Another physician actually performed two PDN trials after approval. This first patient reported 85% to 95% relief and was able to walk without much pain. The second patient before trialing the HFX system was suffering from multiple falls due to the numbness caused his neuropathy. During the trial, the patient reported 95% reduction in pain and states he has regained feeling in his feet and hasn't fallen since the trial again and that patient is anxiously awaiting his permanent implant. These are obviously anecdotes and there are a lot more behind these, but their stories are so encouraging to hear, we're really excited to share more of them in the future. We were, of course, delighted with the 12-month PDN and 6-month crossover results that were presented at this year's American Diabetes Association Meeting in June. We plan to submit these 12-month results for publication very soon. This evidence as well as the JAMA Neurology publication of the six-month results has created a lot of excitement in the pain and diabetes communities. These data will be used to support physician referral decisions as well as market access initiatives to expand payer coverage of this procedure.

In addition, the Health Economic data will be submitted for publication later this year, analyzing the long-term outcomes of PDN patients treated with our therapies. Now remember, there are over five million patients in the US diagnosed with PDN and at least two million of these patients are refractory to or failing conventional medical management and in need of a new solution to treat their chronic pain.

As we begin to interact commercially with these patients, we're seeing firsthand what we already believed that these patients are truly desperate for answers. And we think we can play a new and meaningful role in helping many of these patients. To further validate the PDN market opportunity, we recently fielded a blinded online research survey with a 1,000 US referring physicians treating PDN patients today. Referring physician groups included endocrinology, internal medicine, primary care, podiatry, and neurology. To participate in the survey, physicians had to treat more than 100 patients with diabetes annually, have treated PDN specifically, have prescribed anti-convulsions for PDN and had patients who failed conventional pharmacologic medical management.

Our research found that 1,000 patients referring physicians that screened into the study, each actually treated an average of 169 patients with PDN in the last year. They told us about 34% of these patients who are not responding to medical management. 68% of these physicians found the results of our Senza PDN publication either extremely or moderately compelling and overall these physicians indicated they would refer about 37% of their refractory PDN patients for 10 kHz therapy based on this data in the first full year, and they expect it to more than double their number of referrals over the following three years now. For those of you reaching for your calculator, you will quickly realize these results imply some pretty eye-popping numbers. I'll caution you these in no way represent demand forecast for HFX for PDN as we have a lot of work to do to educate the universe of referring doctors and patients initiate a referral stream and begin to get some experience with conversion rate of referrals to implants, etcetera. However, this research not only validates but well exceeds our initial market assumptions regarding the level of interest and acceptance of referring physicians and it seems consistent with the least the very early reception we have seen in the last two weeks since approval. We're looking forward to educating more patients and physicians about HFX from PDN in the coming months as part of our commercial launch plan and, hopefully by next quarter, we'll have some pretty rich launch data to share with you.

We also know we have some work to do with the payer universe, expand market access, and drive adoption and that will take some time as well. We have two key strategies to achieve this, which are first developing HFX-specific positive coverage policies for PDN with our payers and second concurrently obtaining individual prior authorizations on a case-by-case patient basis. We have a team of specialists in-house in our HFX Access group, who assist with securing insurance approval for patients and reaching out to commercial payers requesting to meet and present our RCT data and new FDA approval and we're hopeful that our six-month published RCT results and our robust value and evidence dossier will be impactful enough to influence a policy change to cover PDN.

Keep in mind, that each payer has it's own SCS policy review timeline, effective date, and may even collaborate with a third party administrator to manage their policies. Additionally, we believe many payers will want to see 12-month data published, which we expect to have later this year. With this in mind, we expect our payer coverage to increase gradually over time with an incremental increase in '21 and broader coverage with payers occurring throughout '22 and even beyond. We continue to anticipate a mid-single-digit million revenue contribution from PDN in '21, the majority of which is expected to be in the fourth quarter, with broader penetration and a larger revenue contribution expected in '22 and beyond. The revenue ramp is expected to build gradually during the initial months following the launch as, of course, patients must still move through the referral to trial to permanent implant pathway, but also as awareness increases among physicians and patients and access with insurance payers expands.

Our PDN approval is the latest example of how Nevro continues to lead in innovation. The rollout of our recent Omnia upgrade, known as HFX Connect, has been well received and we're on track to upgrade the majority of our existing US Omnia patient base by the end of the year. Our new trial stimulator is also now in full market release in the US, along with improvements in patient comfort and increased programming versatility, so patients can evaluate our proprietary 10 kHz therapy. This new product extends the comprehensive value of HFX and should improve success and patient experience with trial procedures. We continue to develop the nonsurgical portion of our market using the NSRBP data as well and look forward to publishing our six-month follow-up data in the second half of this year and then presenting our 12-month data as early as Q1 of '22, and I'm also pleased to report that just this week, the FDA accepted our PMA supplement submission for substantive review to add explicit labeling claims to include the treatment of NSRBP patients.

Now, unlike PDN, this is not a gating approval as NSRBP is already broadly on label, but based on the strength of our data, we feel a more explicit FDA-approved label claim will help us as we work with payers to expand specific coverage of NSRBP and, similar to our PDN labeling if approved, this would not be a category approval, but rather a claim only for our products and would be specific to our proprietary 10 kHz high-frequency therapy.

In closing, while the slower COVID recovery environment remains a near-term issue, we continue to believe we are very well positioned for longer-term attractive growth when the full impact of COVID on our markets subsides. Our fundamentals remain intact and I believe we're really well set up for '22 and beyond. And lastly, as always, I want to express my appreciation to the entire Nevro team for their efforts in the second quarter as they continue to move the SCS field and the company forward.

With that, I'll pass the call over to Rod to provide further details on our second quarter results and financial guidance.

Rod MacLeod -- Chief Financial Officer

Thanks, Keith and good afternoon. I'll begin with our worldwide revenue for the second quarter of 2021, which was $102.3 million, an 81% increase as reported and 80% constant currency compared to $56.4 million in the prior year period and an increase of 9% compared to the second quarter of 2019.

On a sequential basis, Q2, 2021 revenue increased 15% over the first quarter. As a reminder, this quarter included the same number of selling days as Q2 2020 and Q2 2019 and one more selling day than Q1 2021. You'll also recall that we had a tougher comp in Q2 2020 relative to our competitors due to the differentiated speed of our canceled cases recovery after the initial COVID shutdowns in April 2020. US revenue in the second quarter of 2021 was $85 million, an increase of 67% compared to $51 million in the prior year period and an increase of 9% compared to $78.1 million in the second quarter of 2019. International revenue was $17.3 million, an increase of 222% as reported or 191% constant currency, compared to $5.4 million in the prior year period and an increase of 12% as reported or 3% constant currency compared to $15.5 million in the second quarter of 2019. On a constant currency basis, international revenues were back to pre-COVID levels but continue to be impacted by COVID-related issues including both patient behavior and healthcare facility restrictions.

Gross profit for the second quarter of 2021 was $70 million, an increase of 99% compared to $35.3 million in the prior year period and an increase of 9% compared to $63.9 million in the second quarter of 2019. The increase in gross profit compared to the prior year quarter is driven primarily by increased revenue, as well as an improvement in product cost as a result of increased 2021 volumes. Gross margin increased to 68.4% in the second quarter compared to 62.5% in the prior year period and 68.3% in the second quarter of 2019. Additionally, during the most recent quarter, we continued to invest in our Costa Rica manufacturing facility, which decreased margin by about 140 basis points. We are still targeting shipping products from Costa Rica in the first half of 2022. Operating expenses for the second quarter of 2021 were $85.7 million, a 21% increase compared to $70.6 million in the prior-year period, but down 9% from $90.5 million in the second quarter of 2019. The year-over-year increase in operating expenses was primarily related to patent litigation related expenses, new PDN marketing and selling-related activities, personnel costs, and travel and meeting expenses, partially offset by a decrease in clinical trial expenses related to the NSRBP study, as well as management's continued initiatives to drive leverage throughout the business.

Legal expenses associated with patent litigation were $6.6 million for the second quarter of 2021 compared to $2.3 million in the prior year period. We continue our ongoing patent cases in the district of Delaware and at the patent office relating to spinal cord stimulation technologies. While the disputes with Boston Scientific are unrelated to our core high-frequency therapy IP, protecting these innovations remain an important objective. We are anticipating an October 2021 trial wherein we will be presenting our defenses with regards to Boston Scientific's retaliatory suit against that. The October trial is expected to be some combination of patents and trade secrets claims the Boston Scientific raised, which again are unrelated to high frequency SCS.

Net loss from operations for the second quarter of 2021 was $15.8 million, a 55% improvement compared to a loss of $35.4 million in the prior year period and a 41% improvement compared to a loss of $26.6 million in the second quarter of 2019. Non-GAAP adjusted EBITDA for the second quarter of 2021 was a positive $3 million compared to negative $22.1 million in the prior year period and negative $11.1 million in the second quarter of 2019. We continue to focus on cash preservation while balancing the need to reinvest in the recovery process and our new growth drivers in PDN and NSRBP. Cash, cash equivalents, and short-term investments totaled $397.5 million as of June 30, 2021. This represents a decrease during the second quarter of $178.9 million, which was primarily due to the scheduled $172.5 million payoff of the June 2021 convertible notes.

Turning now to guidance, it's important to note that we will be using non-GAAP financial measures to describe our outlook for the business. Please see the financial tables in our press release issued today for GAAP to non-GAAP reconciliations. Due to the uncertainties related to COVID on our operations and financial results, we are no longer providing full year 2021 guidance and only providing third-quarter revenue and non-GAAP adjusted EBITDA guidance at this time. As a reminder, we may not continue to provide quarterly guidance once the impact from COVID subsides, vaccination rates increased, and patients begin to again seek elective care at typical levels. We expect third quarter of 2021 worldwide revenue of approximately $90 million to $93 million. This guidance represents a 14% to 17% decrease over prior year and a 7% to 10% decrease compared to Q3 2019. As you'll recall, Q3 of 2020 benefited from the recovery of canceled perm procedures from the initial COVID shut down in the first half of 2020. While it's challenging to determine exactly how much of an impact the recovered backlog had on Q3 of 2020, we believe it negatively impacts this year's Q3 growth number by more than 500 basis points.

As mentioned earlier, while we have seen directional sequential improvement, the recovery is progressing slower than previously anticipated, including trial activity. In addition, with the rise of the delta variant and increasing restrictive mandates, our ability in the near term to predict an inflection point is difficult. We expect third quarter of 2021 non-GAAP adjusted EBITDA to be approximately negative $10 million to negative $12 million. As Keith mentioned earlier, we continue to expect a mid-single-digit million-dollar revenue contribution from PDN in 2021, the majority of which is expected to be generated in the fourth quarter with broader penetration and a larger revenue contribution expected in 2022 and beyond. Keep in mind that our third quarter guidance provided today is highly sensitive to the pace of COVID recovery and patient willingness to seek elective care, which continues to be difficult to predict. If these assumptions differ from the actual pace of COVID recovery and its impact on the company's market, then the company may need to change or withdraw this guidance in the future.

Although we are no longer providing full year 2021 guidance, we did want to provide you with some thoughts to keep in mind as you update your models for the remainder of 2020. On the plus side, it would be reasonable to expect some Q4 seasonality, as well as the majority of anticipated revenue from our PDN launch. We could also see a return of some of the patients that have continued to differ SCS treatment during COVID. Offsetting this would be the negative impact from the slower than anticipated recovery of SCS procedure volumes and the lower trial procedures from Q2 and Q3. Furthermore, the combination of increased impact from COVID along with reductions in capacity and shutdown of elective procedures could adversely impact patient willingness to seek treatment. In closing, we made good progress in the second quarter as evidenced by sequential growth in revenue, trials per day, and perms per day and remain on track to drive growth and scale profitably in our core business in the years ahead. We are in a great position strategically with best-in-class SCS technologies, remaining share gain opportunity, future growth opportunities in PDN and NSRBP, superior clinical data, and a strong commercial organization.

We continue to advance our operating margin expansion efforts with many of the changes we are investing in this year, such as our integration of manufacturing in Costa Rica, development of the PDN market and the Omnia upgrades that facilitate greater commercial productivity, all expected to provide continued improvement in our financial leverage as we grow.

That concludes our prepared remarks, I'll turn the call back over to Julie to moderate the Q&A session.

Julie Dewey -- Vice President of Investor Relations & Corporate Communications

Thanks, Rod. In order to get through the question queue efficiently tonight, we ask that you please limit yourself to one question only. You can then rejoin the queue and, if time allows, we will take follow-up questions. Operator, we're ready for the Q&A instructions.

Questions and Answers:

Operator

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

Larry Biegelsen -- Wells Fargo -- Analyst

Good afternoon and thanks for taking the question. Keith, it would be helpful if you can kind of bridge from Q2 to Q3 guidance, down 11% sequentially and it's still on a year-over-year basis, adjusting for that, the pent-up demand a year ago would be down, call it 9% to 12%. So, it's hard to understand why despite your comments, we had COVID last year, why it would be down so much year-over-year and, thinking ahead, when do you think PDN could offset the declines in the core SCS implants and sales. When do you think you can start to grow again? Thanks for taking the question.

Rod MacLeod -- Chief Financial Officer

Hey, Larry, this is Rod. That's a great question and I'll start off and then I'll let Keith add a little bit of color. As you know, in our business, leads lead to trials, trials lead to perms, and as we were going through Q2 and into Q3, the basic number of trial volumes is kind of a math equation and leads us to the revenue number that we're guiding to in Q3 here. And so while we did see sequential improvement from Q1 to Q2 in trial, it didn't improve at the rate that we were originally expecting at the beginning of the year and going into the beginning part of Q2 and the way the trials in Q2 and so far in Q3 with the vacations in July and August, it's just can be a little bit of a softer third quarter than what we anticipated.

Keith Grossman -- Chairman, Chief Executive Officer & President

Yes, I guess, I guess, Larry. The only thing I would add would be that there's probably a little bit of a conservatism applied here just because of the pretty profound lack of visibility we feel we have into the business right now, and I think probably it feels to us like at least for our patients and maybe even our doctors that the summer vacation impact could feel a little bit more dramatic this summer than it did last, of course, as Rod pointed out, we don't have the recaptured canceled cases that have an impact this year either. So, I think all of that with the trial model that we have now that we're a month into the third quarter gets us to third quarter guidance that we're reasonably comfortable with. In terms of PDN, look, we don't feel like we have to have PDN to drive growth in this franchise in the long term. I think I was pretty exhaustive in my remarks and in our conclusion that there is growth in these markets beyond COVID. We certainly can't predict when that happens, when it gets backed and then begins to exceed again pre-COVID levels in the core lower back and leg pain market, but we don't view PDN as being the necessary growth driver on a long-term basis.

Having said that, while I can't give PDN guidance beyond what we've said about this year, which is pretty minimal, but it's a very, very large market and, given the size of our business, it doesn't take much to drive overall growth rates. I mean you don't need your calculator to figure out that something in the neighborhood of $40 million of PDN sales next year would drive a 10% growth rate or something close to that in the whole business, so given the size of this market, I think we feel really encouraged with the idea of PDN as a growth driver, but not as a needed driver to give us positive growth, at least in the long term.

Larry Biegelsen -- Wells Fargo -- Analyst

Thanks guys.

Operator

Your next question comes from the line of Bob Hopkins with Bank of America. Your line is open.

Bob Hopkins -- Bank of America -- Analyst

Thanks, and good afternoon. Can you hear me OK?

Keith Grossman -- Chairman, Chief Executive Officer & President

Yes, Bob.

Bob Hopkins -- Bank of America -- Analyst

Great. So I'd love you to comment on two things. Given our bigger surprise this is to the way the Street was thinking about your numbers for Q3 in yester year. First is, this guidance for Q3 assumed that things get worse from what you saw in July, stayed the same, gets better, would just love some perspective on that? And then, the other thing Keith, I'd love you to comment on, is it's so far below what we were thinking and we're not really hearing this from others, this kind of magnitude about the market. It seems to me that this kind of has to be market share or else I feel like I'm really missing something about the market and what's going on out in the field. So, I wonder if you could address that issue of market share and then again the comment on what you assumed for the rest of the quarter relative to what you saw in July? Thank you.

Keith Grossman -- Chairman, Chief Executive Officer & President

Yes, I think in terms of a of a trend. Look, we are giving you the facts and we've done a lot of work to try and figure out what is going on in the pain treatment market. What's happening in claims data, what's happening with patients. I think the reason our remarks went almost 40 minutes tonight was because we were trying to download as much information Bob as possible that support what we believe is happening in the market. In terms of Q3 assumption, no, I think it pretty much assumes that August looks a lot like July and that we begin to see a little bit but not dramatic recovery in September. So, the numbers you're seeing certainly require no heroics, you don't really assume it gets better or at least in the near term that it gets worse. In terms of share, I think you are looking at it the wrong way and we've tried to provide a lot of data in this call to help you with that. The claims data is painfully clear on what's happening with actual procedures. What's also clear to us is that there in this kind of environment, in a competitive environment, where there is frankly a lot of moving parts in every quarter, and one of our competitors introduced a new product in the second quarter and we saw a lot of product going on in their customer shelves in the last month and other competitor in the first quarter did probably the most forward inventory stocking that we've seen that competitor do at least in my time in this segment.

So, yes, you can look at revenue, our competitors don't have to talk about these details. They barely talk about neuromod or pain markets. They don't say much about SCS, they don't ever talk about procedures, they only talk about revenue. And so we're trying to give you as much visibility as we possibly can to what's going on. We do not feel as though this is a share issue. We're certain of that internally. We do not feel we're losing share. We're the only company we believe to have gained share in both 2019 and 2020. I'll repeat that we're the only participant in SCS that we believe gained share in both of 2019 and 2020. In 2021, the best data point we have is the one we just gave you on procedure claims codes, which was 1400 basis point difference between the market and our permanent implants. There is nothing that we're seeing outside of the movement in the quarter to quarter reported revenues numbers that can be pretty confusing to indicate otherwise.

Bob Hopkins -- Bank of America -- Analyst

So, maybe just one quick follow-up. I apologize. Like what's the rationale for why this market would be so much more sensitive from a recovery perspective relative to other things we're seeing. Why is pain something you can put off so much more than other procedures. Do you have a thought there and then I'll get back in queue? And I'm sorry.

Keith Grossman -- Chairman, Chief Executive Officer & President

I mean, yes I addressed that thought in my remarks. We tried to give you as much fundamental data as we could, that we've gathered and we recognize that a lot of segments are behaving differently, we've tried to rule out the things that we needed to rule out to make sure there wasn't something fundamental going on about which we should be concerned. Our conclusion is simply that we've got patients who can defer these procedures and despite the fact that they're in pretty severe pain, this is pain they're willing to defer. They're able to defer and it's clear and we can talk about why that is. I'm not sure we can go much deeper than that and frankly we haven't gotten a lot more insight that that from our customers, our doctors, but the conclusion is pretty obvious. The patients are still out there. They're not getting alternative therapy. They're not seeing increases in opioid prescriptions. Their pain is not getting better. They're not going to other procedures. They still say they're going to seek care, but they're deferring. And they've told us what they are waiting for in terms of their fears about COVID economics, but, I don't have a crystal ball on that and it's been, as I said in my remarks, a bit of a surprise to a lot of observers the extent to which these patients are able and willing to defer even the ones who say they plan to seek care.

Bob Hopkins -- Bank of America -- Analyst

Thank you.

Operator

Your next question comes from Robbie Marcus with J.P Morgan. Your line is open.

Robbie Marcus -- JPMorgan -- Analyst

Okay, great. Thanks for taking the question. Keith, you mentioned that you're not seeing or hearing of any reimbursement push back, maybe looking forward a little bit, I noticed that the AMA CPT panel for September has SCS codes on the agenda to better reflect current day usage. Do you have any idea what we should be anticipating. Are there possible price cuts or reimbursement cuts ahead for SCS? Thanks.

Keith Grossman -- Chairman, Chief Executive Officer & President

Okay. Two things. On the reimbursement pushback, let me be really clear, there is always reimbursement push back. I would say if you look back, or if you look forward on a multi-year trend, it's all going in one direction. I think that's true of our procedure. I think it's true of most frankly. So, I don't mean to imply and I hope I didn't that there is no reimbursement push back. My comment was that there is no significant change in reimbursement environment that we think is having any material effect on what we're seeing in the market today that it's not a factor in terms of patient demand today and any change over two years ago etcetera, that doesn't mean there's not reimbursement push back there always is. On the review of the code that just popped up within the last couple of days, we're in the process of trying to get a little bit more insight into that. Our sense is that may have been something done at the request of smaller but non SCS potentially peripheral nerve stimulation entrance into the field. We're not certain of that. There is nothing about it right now that seems to pose any particular threat or risk or the signals a concern for that matter, but, we are looking into that, so if we can get a bit more information.

Robbie Marcus -- JPMorgan -- Analyst

Great. Appreciate it. Thank you.

Operator

Your next question comes from Joanne Winch with Citi. Your line is open.

Joanne Winch -- Citi -- Analyst

Thank you. Two questions. Non-surgical refractory back pain PMA supplement that's new information. It's been filed. So, when are you anticipating getting that approved and how do you anticipate that changing or helping out the trajectory of sales?

Keith Grossman -- Chairman, Chief Executive Officer & President

We submitted just a couple of weeks ago and generally FDA has, I think, around 45 days to accept the submission for processing and they did that in about two weeks. That means the six-month PMA supplement clock starts ticking, I think, essentially from yesterday. And what that means to us is, I think the ability to add an explicit claim for these patients for high frequency into our label will come, we hope if we get approval, about the same time our 12 month data is being reported. And I think the combination of those two will give us a much stronger case with payers. And remember the main reason we ran this trial to begin with, was to help our customers get a more complete and more consistent coverage of these patients from the payers. So, I think having a label claim is going to be a good thing, if we can get there.

Joanne Winch -- Citi -- Analyst

And my second question has to do with, it sounds like you're getting a lot of interest on PDN. Is your sense that physicians are starting a waitlist of some type?

Keith Grossman -- Chairman, Chief Executive Officer & President

I don't know that I don't know that I know of a wait list. I think what's happening is we are interacting with a lot of the referring doctors, educating them on the data, on the approval, on the referral pattern and they're beginning to refer patients to pain doctors. It's really early Joanne. I mean, we're a couple of weeks in, we're not talking yet about 1000s or 10s of 1000s of patients. So, I don't think waitlist have begun, but, I think we're probably going to see in the not too distant future that there is a fairly large volume of patients being referred to these pain doctors and, at that point, we'll probably begin doing something to make sure they process in the right way.

Joanne Winch -- Citi -- Analyst

I am going to squeeze in one more question. My apology.

Julie Dewey -- Vice President of Investor Relations & Corporate Communications

Joanne. That's the time.

Joanne Winch -- Citi -- Analyst

Go on.

Julie Dewey -- Vice President of Investor Relations & Corporate Communications

Yes, thanks.

Operator

Your next question comes from Matt Taylor with UBS. Your line is open.

Matt Taylor -- UBS -- Analyst

Hi, thanks for taking the question. So, I guess I just wanted to touch on the competitive dynamic. I know there's always [indecipherable] trial that starts in beginning when others launch. I mean can you just talk about your confidence in your ability to gain share in the core market with Omnia through these competitive product launches and what would you point it to give us an understanding of where that's coming from?

Keith Grossman -- Chairman, Chief Executive Officer & President

Yes, I mean, I think we've continued to gain share. We essentially started at zero, we continue to gain share really through 2017 and then began taking share again in 2019. We feel like we've taken share sense, probably more aggressively in 2019 than the first half of '20 than in the last half of '20 and that oftentimes ebbs and flows depending on a competitor reaction and new product introductions and we've had some of both, but, I think over time, we feel like we can continue to gain share. We still have the fundamental differential edge of high frequency therapy. I think we are very clear with our customer base and letting them know that we are investing in the therapy and investing in new patient populations to bring to them for the therapy and making investments that nobody else is making. And I think that gives us some presence with our customer base in addition to the outcomes advantage. And we've also continued to introduce a lot of new products, the HFX Connect, the ability to have HFX Coaches walk them through big data driven programs of 70 different programs. I mean there's a lot of things that have continued to come out at a pretty steady stream that I think will allow us to continue to capture share.

Having said all that, we don't -- I'm not going to give some prediction for share. We're not going to guide to share for this quarter, next quarter, or next year. The share as defined by revenue is really noisy. We track it through a few different sources and it jumps around and it jumps around a lot. A quarter really better yet two quarters is about the least resolution where you can really get a good picture. We track it month to month, but, I'll tell you, the rate of variability the way it jumps around makes it a less than reliable indicator based on reported revenue.

Matt Taylor -- UBS -- Analyst

Got it. Okay, thanks a lot.

Operator

Your next question comes from Cecilia Furlong with Morgan Stanley, your line is open.

Cecilia Furlong -- Morgan Stanley -- Analyst

Good afternoon and thank you for taking the question. Keith, I wanted to ask just what you've seen in the US versus your international business in 2Q from a recovery as well as patient willingness standpoint. And then as you think about 3Q just what you're factoring in across those two geographies, either patient willingness, vacations. Anything else that you would call out or any trends that are unique when you look at those two geographies in comparison? Thank you.

Keith Grossman -- Chairman, Chief Executive Officer & President

Yes, I would say a couple of things going on there. From a patient willingness, I mean, that not only varies by country. It varies by zip code. Really, this is a patient psychology issue that is almost invisible in some state for it seems like it's not a problem, and in other states it's a major factor and certainly that's true as you get from country to country. There is high sensitivity to news flow, infection rates that kind of thing. I'd say the biggest difference between the US and our OUS markets is that our OUS markets tend to be more centrally controlled, when demand to suppress, it tends to be more top down, more institutional, by that I mean, local government decisions, hospital decisions to limit or eliminate elective procedure for some period of time to lower census of certain procedures on an inpatient or outpatient basis and so that's a little different from the US, but we haven't really seen that since the spring of 2020. Counter balancing that I would say if you compare our commercial performance to last year or the year before. You recall in 2019, we were very focused on our US commercial organization.

I think that in 2020 and 2021, we've made great strides in our international organization, and I frankly just think that we are doing better in our overseas markets on a relative basis because we're executing well. I think the PDN data has been very well received and we're starting to get a lot of attention in our European and Australian markets for that data as well. In terms of assumptions, look, I think we're assuming for the rest of the quarter, you might imagine, we're probably a little bit, a little bit gun shy from this particular environment. We've seen this recovery play out in this market. So, we're not really assuming much in the way of improvement for the balance of Q3 as we think about our guidance.

Cecilia Furlong -- Morgan Stanley -- Analyst

Thank you.

Operator

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

Bill Plovanic -- Canaccord -- Analyst

Hi, it's John on Plovanic. What have you seen in Salesforce turnover over the past three to six months and how does it compare to historical trends?

Keith Grossman -- Chairman, Chief Executive Officer & President

I don't have a number in my head and we're certainly that I'm willing to put out there, but I will tell you just from a high level, the turnover has been for the last two years dramatically less than it was for the two years before that, and to my knowledge it has not increased during COVID. We've got a really good, really effective experienced team in the field. And I think we've been kind of shoulder to shoulder with them in terms of how we've tried to manage our business throughout COVID and frankly, how we managed our relationship with them. And as a result, I just don't think we've had a lot of turnover, and I would add to that, there is a lot of excitement about PDN and if you're a member of our commercial team in the field and you see this indication coming in and you're getting the kind of feedback that you're getting from referring doctors from your own customers. You're seeing the kinds of outcome [Phonetic] just for indication get some patients, it's pretty fun. I mean it's an exciting and fun place to be as you think about the next couple of years. So, I think for the most part, there's always some turnover, but I think for the most part our field team is very engaged right now.

Bill Plovanic -- Canaccord -- Analyst

Thank you.

Operator

Your next question comes from Adam Maeder with Piper Sandler. Your line is open.

Adam Maeder -- Piper Sandler -- Analyst

Hey guys, good afternoon and thanks for taking the questions. Keith, in your prepared remarks I think you talked about ongoing fear of COVID that patients have, as well as some financing issues that are high-out-of-pocket costs associated with the deductible, I know you don't have guidance for Q4 for the full year, but just wondering if we should think about Q4 as maybe being not as seasonally strong in past years given that perhaps as many patients would not achieved their deductible, I know there are several moving parts there, but just any thoughts as how we should think about that dynamic?

Keith Grossman -- Chairman, Chief Executive Officer & President

Yes. Rod gave you a little bit of color on how to at least think about and I know it was just that it was just a little bit of color, but how to think about Q4, I'm not sure I can give you a whole lot more than that, but, I will say that in Q4 of this year, our assumption has been that a lot of the kind of the time off mentality we've seen in the summer is due or is based in part on an assumption that things kind of get back to normal in the fall and I express it as anecdotal in my comments, and it is in fact it is just that, but as we talk to our customers, many of them who have families they're raising in there in that age group. A lot of our assuming. I hope rightly that kids are going to be back in school in the fall and they are ready and able to actually travel at this point. So, my assumption is we're probably going to see a typical seasonal uptick in Q4, but I don't feel comfortable enough in that to bake it into revised full year guidance, which is why, In fact, we didn't do that.

Adam Maeder -- Piper Sandler -- Analyst

That's helpful. Thank you.

Operator

Your next question comes from Chris Pasquale with Guggenheim. Your line is open.

Chris Pasquale -- Guggenheim -- Analyst

Thanks. Keith, just wanted to circle back on the question of market versus share. The claims data you provided was very helpful. Appreciate the comments about the noise factor in the revenue numbers, but you guys had a lot of momentum throughout 2019 and early last year as you said so that claims comparison to the first half of '19 sort of pre-dates those gain. Can you say anything about how your underlying performance in the first half of this year compared to the back half of 2020, which should be more as a recent comparison in the trend?

Keith Grossman -- Chairman, Chief Executive Officer & President

I don't think we have that.

Rod MacLeod -- Chief Financial Officer

Yes, we don't.

Keith Grossman -- Chairman, Chief Executive Officer & President

Yes, I'm sorry, I don't have that. I don't have the claims data comparison for the back half of 2020 for now. I guess that's not the point we were trying to make with the claims data, but, maybe can take your question on more generally, I do think that, I think I said in fact that if you look at the market share gains we've had since early 2019, they were probably the steepest in 2019, they continued in 2020, though not as steeply, and then in the back half of 2020, I would say there was probably more aggressive and effective competitive activity in the second half of 2020 and I don't believe we lost share in the second half of 2020 to be sure, but I think our pace of gains probably slowed in the back half of 2020.

We then just released a series of new products in the last, I don't know, 60 days I guess, some of them in the last few weeks and then, of course, the PDN claim which had just come in the last two weeks. So, momentum tends to shift around. I don't think that's unusual, but if you're looking at the last half of 2020, as a less aggressive share capture time I think that's probably right.

Chris Pasquale -- Guggenheim -- Analyst

Okay, that's helpful, thanks. If I could just sneak one in on a different topic. You talked about the range of opinions from physicians about when things might recover and also this kind of lack of consensus about what's really keeping the market down. Do you have a candidate for what's the most important trigger for a normalization. Is it progress on COVID, is it economic factors or just getting out of vacation season. Is there one of those do you feel like should be over weighted as we think about the recovery from here? Thanks.

Keith Grossman -- Chairman, Chief Executive Officer & President

Look. I don't have a real scientific way of doing that for you. I mean II think all three of those things are important. I think probably it would be tempting to say that COVID and the sense around COVID is probably the biggest issue though I think we were maybe even a little bit surprised at the just the prevalence of commentary from patients on economic issues whether that reflects unemployment or loss of benefits or just simply wanting to spend their deductible on other procedures first that were less deferrable other discretionary items like travel first. It's really hard to know and if we can only get down so deep, but I would say those two. The summer vacation thing is an important factor, but it's temporary. I think what you're looking for is a more reliable trigger to predict recovery and between the other two buckets of COVID and economics, it's probably hard to give you a real quantitative answer.

Chris Pasquale -- Guggenheim -- Analyst

Thanks for that.

Operator

Your next question comes from Suraj Kalia with Oppenheimer. Your line is open.

Suraj Kalia -- Oppenheimer -- Analyst

Hey Keith, thanks for taking my questions. So Keith, forgive me just juggling between in calls and maybe you already talked about this.

Keith Grossman -- Chairman, Chief Executive Officer & President

Hey, Suraj. We can just barely hear you. Is there any way you can speak up or get closer to the microphone or something?

Suraj Kalia -- Oppenheimer -- Analyst

Is this better, Keith?

Keith Grossman -- Chairman, Chief Executive Officer & President

A little bit.

Suraj Kalia -- Oppenheimer -- Analyst

Okay. Sorry, my phone is goofed up. So, Keith over the last two years, can you give us a sense of the number of centers in the US that Nevro has added and incremental centers and the reason I ask is, when I strip out ASPs, I'm just trying to get a rough math on the utilization metrics. What's going on with the utilization?

Keith Grossman -- Chairman, Chief Executive Officer & President

Well, there are bunch there, there is new customers, I assume you're talking about new store, same store comparison, ASPs and utilization. We gave a little bit of color on utilization at least on our '21 over '19 comparison. We have not been granular on new store, same store statistics. It's just where we are at a big disadvantage when it comes to disclosure from our three competitors in what we're public about what we need to be public about, we've not generally weighted into that topic. And frankly I don't think we really feel like we need to or want to start. I am not sure what the question is on ASPs. ASPs have been generally pretty steady.

Rod MacLeod -- Chief Financial Officer

[Indecipherable] we expected, yes.

Keith Grossman -- Chairman, Chief Executive Officer & President

Yes and they haven't been really a variable in our performance that wasn't expected, as you get kind of product cycles get kind of long in the tooth, you tend to see ASP degradation and then you tend to pick them back up as you refresh and renew with new products. I would say our ASP performance has actually been quite good and we still sell our premium to every one of our competitors.

Suraj Kalia -- Oppenheimer -- Analyst

No I get that, that's why I was when I strip out the ASP delta and that's what really I was trying to get at, but we can take it offline.

Julie Dewey -- Vice President of Investor Relations & Corporate Communications

Thanks Suraj. We need to move on. We're trying to... if you'd like to ask another question, you can get back in the queue.

Operator

Your next question comes from Danielle Antalffy with SVB Leerink. Your line is open.

Danielle Antalffy -- SVB Leerink -- Analyst

Yes. Hey, good afternoon guys. Thanks so much for squeezing me and I guess I just really have one question at this point and it's really. Keith, I appreciate all the data that you gave us around the claims and things like that, but I guess one of the areas of pushback that I get when I am talking to some folks that are more bearish is whether this market is really a growth market and I guess my question is what gives you the confidence that this slower patient return to SCS therapy in the legacy indication is really COVID related versus something broader and bigger and more endemic to the market itself? Thanks so much.

Keith Grossman -- Chairman, Chief Executive Officer & President

Danielle, it's a great question, I just can't imagine how I could give you anything more that I've given you on that. I mean we have dug and dug and we've dug pretty deeply on these things. We've laid a lot of that information to you today. There is no indication there is nothing to lead us to believe that somehow the market just stops where it is today. I don't think any of our competitors believe that. I don't think there's any data out there from customers or from payers or from patients or from referring doctors that indicate that that's the case. We know there's a lot more patient to go untreated then get treated. We don't see an alternative therapy or treatment either on the market or coming. So, I just don't think there's any reason to think that this is somehow magically because of a slow COVID recovery going to be a no-growth market. It is not just because we want that to be true. We've done the work and that's our conclusion.

Now, I mean we're open to new sources of information, but I don't think there is anyone in our customer world or our competitive world to think that's the case and we just haven't found anything to indicate that we should believe that either.

Danielle Antalffy -- SVB Leerink -- Analyst

Okay, thanks. So I'll keep it to that. Thank you.

Operator

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

Margaret Kaczor -- William Blair -- Analyst

Hey, this is Maggie on for Margaret. I know they have spent a lot of focus here on the short term. So love to ask something more on the mid-term here. What are you guys kind of expecting for market growth for the core SCS market in 2022, obviously know there's a lot of variables there, and while I know you aren't giving guidance for 2022, can you give us some color generally on how you're thinking about both backend lag in PDN growth for the company? Thanks.

Keith Grossman -- Chairman, Chief Executive Officer & President

Yes, I mean the short answer to that is no. Look, I'd love to be able to do that. We've been kind of out of the projecting market growth game for a while as you know, and certainly, if we're not comfortable giving our own guidance beyond Q3, there's little I can say about 2022. I will tell you that it certainly our hope that as we get into Q4 that we begin to see I think what other procedures have seen a full quarter before us and we begin to see kind of an uptick in the core and the return of patients for the core lower back and leg pain indications. If that's the case and we continue to see this kind of enthusiasm about PDN, then I think the market and Nevro are poised for what I said in my remarks, which is a really encouraging' 22. I can't give you a number on that growth rate. We certainly would like to think that if that's the case, it's fairly robust but that's about as much as I can give you I think.

Margaret Kaczor -- William Blair -- Analyst

Okay, thanks so much.

Operator

Your next question comes from Michael Pollard with Baird. Your line is open.

Michael Pollard -- Baird -- Analyst

Hey, good evening. Thank you. I want to bridge and just make sure I understand the 2Q trial performance and then the 3Q revenue guide. So, I believe I heard that from 1Q to 2Q this year, sequentially, trials improved 4% and the revenue guided in 3Q is sequentially down 11% from 2Q. So, I just -- is that timing? I have tended to think that trials lead perms by one to three months. So, can you just help put a little color on what I'm missing there and that kind of simple framework?

Rod MacLeod -- Chief Financial Officer

Sure, Mike. Hey, this is. Rod, I'll take this. I would think the way to think about it is the volume of trials that we saw in Q2 will lead largely to the revenue numbers in Q3 and just the fundamental volume in Q2 is not enough to get to a figure that probably you and we were thinking about earlier in the year and we are anticipating that sort of a recovery and improvement in the recovery for COVID and while we did see some improvement and your numbers correct on the 4%, it's just not fundamentally a large enough volume in Q2 to drive the sort of figures that we had been talking about or thinking about for Q3.

Keith Grossman -- Chairman, Chief Executive Officer & President

I'll add onto that, just quickly, I think. As we think about the conversion curve from trials to perms given the scheduling that we're seeing among patients and doctors over the summer months, it's fair to assume that we probably model a little bit different curve, a little bit different behavior in converting trials to perms over the summer months and we're certainly factoring some of that in as well.

Michael Pollard -- Baird -- Analyst

Okay, alright. Thank you.

Operator

[Operator Instructions] Your next question comes from David Prescott with Truist. Your line is open.

David Prescott -- Truist Securities -- Analyst

Hey, guys. Thanks for squeezing me in here. Keith, you've talked about prior authorization for CMS payers come into play this year. So, I guess the first question here is I just want to confirm that that went into effect on July 1st and then as a second part of that question, we've heard some players in MedTech space kind of comment on how the process of documenting prior authorization particularly has been impacted by COVID. So, I guess so far in the month of July, have you really seen any impacts to the ability for patients to receive and then ultimately document some form of failed therapy ahead of SCS implants and then just looking into the second half of the year I guess how do you see that playing out within the context of guidance? Thanks.

Keith Grossman -- Chairman, Chief Executive Officer & President

Yes, all I can tell you what we've seen. It's only been in place a month and so I can tell you that what we're hearing from our customers is that there hasn't been a loss of patients, a loss of cases patients they couldn't get adjudicated and get to yes, what there has been a little bit of a delay in some of those cases and some additive administrative to detail, it doesn't drag out forever, If memory serves, I think there is a statutory requirement [indecipherable] resolve them in 10 days. So, whatever that process is, it needs to get to an answer fairly quickly and then the more direct visibility we have is are those cases that were involved into our own access team, and they've been able to get through them quite well and they haven't seen a decline in the number of cases that have ultimately been unable to move forward. So, it's only a month of experience and so it doesn't really play a role in our guidance going forward, frankly.

Operator

There are no further questions at this time. I would now like to turn the conference back to Mr. Grossman for closing remarks.

Keith Grossman -- Chairman, Chief Executive Officer & President

Okay. Thanks everyone for joining us. We appreciate your time. I'm sure you're left with more questions. We'll be happy to answer them as best we can and we'll talk to you next quarter.

Operator

[Operator Closing Remarks]

Duration: 46 minutes

Call participants:

Julie Dewey -- Vice President of Investor Relations & Corporate Communications

Keith Grossman -- Chairman, Chief Executive Officer & President

Rod MacLeod -- Chief Financial Officer

Larry Biegelsen -- Wells Fargo -- Analyst

Bob Hopkins -- Bank of America -- Analyst

Robbie Marcus -- JPMorgan -- Analyst

Joanne Winch -- Citi -- Analyst

Matt Taylor -- UBS -- Analyst

Cecilia Furlong -- Morgan Stanley -- Analyst

Bill Plovanic -- Canaccord -- Analyst

Adam Maeder -- Piper Sandler -- Analyst

Chris Pasquale -- Guggenheim -- Analyst

Suraj Kalia -- Oppenheimer -- Analyst

Danielle Antalffy -- SVB Leerink -- Analyst

Margaret Kaczor -- William Blair -- Analyst

Michael Pollard -- Baird -- Analyst

David Prescott -- Truist Securities -- Analyst

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