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Date
Wednesday, Nov. 5, 2025 at 4:30 p.m. ET
Call participants
President and Chief Executive Officer — Kevin Hykes
Chief Financial Officer — Jared Oasheim
Chief Operating Officer — Michael Vallie
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Takeaways
Total revenue -- $14.7 million for the three months ended September 30, 2025, up 10% compared to the prior year period, primarily due to increased U.S. procedure volume and expanded commercial reach.
U.S. revenue -- $13.5 million in U.S. revenue for fiscal Q3 2025 (period ended September 30, 2025), reflecting a $1.2 million, or 10%, year-over-year increase, with 420 implants performed versus 394 in the prior year period.
European revenue -- $1.2 million in European revenue for fiscal Q3 2025, representing a $100,000, or 12%, year-over-year increase, offset by a decline in units to 50 from 56 in the prior year period.
Active U.S. centers -- 250 as of September 30, 2025, up from 240 at June 30, 2025, indicating ongoing territory development.
Sales territories -- U.S. territories increased by three to reach 50; European territories held at five.
Gross profit -- Gross profit was $12.8 million, a year-over-year increase of $1.5 million, or 15%, driven by higher average selling prices and improved manufacturing efficiencies.
Gross margin -- 87%, up from 83% in the prior year period, reflecting both ASP improvement and lowered cost per unit.
R&D expense -- $3.1 million, up 26% compared to the prior year period, attributed to higher compensation and consulting costs, offset by a decrease in clinical trial expenses.
SG&A expense -- $21.9 million, a 1% increase compared to the prior year period.
Interest expense -- Increased by $500,000, reflecting higher term loan borrowings.
Net loss -- $12.9 million, or $0.49 per share, compared to $13.1 million, or $0.57 per share, in fiscal Q3 2024, on 26.2 million weighted average shares outstanding.
Cash and cash equivalents -- $85.1 million as of September 30, 2025.
Net cash used in operations and investing -- $10 million net cash used in operating and investing activities, compared to $10.4 million in fiscal Q3 2024.
2025 guidance – revenue -- Expected range narrowed to $55.6 million–$56.6 million from the previous $55 million–$57 million for full-year 2025 revenue guidance.
2025 guidance – gross margin -- Raised to 85%-86% for full-year 2025, up from prior guidance of 83%-84%.
2025 guidance – operating expenses -- Updated to $98 million–$99 million, above the prior $96 million–$98 million range.
Regulatory -- Category one CPT code for Barostim finalized for implementation as of January 1, 2026, expected to eliminate experimental denial rationale and standardize physician reimbursement effective January 1, 2026.
Reimbursement -- CMS maintains outpatient procedure payment of approximately $45,000 under APC 1580; “significant progress” cited with Medicare, Medicare Advantage, and commercial payers.
Clinical trial initiatives -- An IDE application for a new 2,000-patient randomized controlled trial was submitted to the FDA in mid-October 2025, with feedback expected in late November; trial expected to expand total addressable market through broadened inclusion criteria.
Salesforce -- “First wave” of new hires from earlier in 2025 now contributing meaningfully, with onboarding and productivity acceleration ongoing; annual salesforce turnover returning to 10%-20% “normal” range per management.
Account penetration -- Over 20% of active implanting centers achieved three or more implants, with no structural barriers limiting further ramp.
Outlook for growth -- Management targets mid-teens percentage revenue growth for 2026, with full acceleration to “mid to 20 percents” expected longer term, in 2027 and beyond.
Registration statement -- Existing registration statement scheduled to expire on November 15, 2025; company intends to refresh in connection with imminent 10-Q filing.
Summary
Full-year 2025 revenue and gross margin guidance were both raised, while operating expense expectations increased for full-year 2025, indicating more investment to support growth. Management confirmed the transition to a category one CPT code effective January 2026, removing a key reimbursement friction and formalizing physician payment processes. The FDA review for an IDE covering a 2,000-patient randomized trial that could triple the eligible patient base is actively progressing as of mid-October 2025, with feedback expected in late November 2025, with CMS reimbursement anticipated at current outpatient rates (currently $45,000 under APC 1580) for such trial patients. Management emphasized improving commercial productivity, network expansion, and medical education as core drivers sustaining momentum and supporting the company’s strategy to establish Barostim as standard of care.
President and Chief Executive Officer Hykes cited, “Our Salesforce transformation is progressing well, and turnover is returning to more normal levels.”
Chief Financial Officer Oasheim stated ASPs for the quarter were north of $31,000 on a worldwide basis for fiscal Q3 2025. That's a significant step up from fiscal Q3 2024, when ASPs were just below $30,000 per unit globally.
Management highlighted, “If we can reach agreement with FDA on the IDE protocol, we will then approach CMS to apply for Category B IDE coverage, a second and necessary condition in order for us to move forward with the trial.”
Leadership communicated an intention to continue measured expansion of territories by approximately three per quarter, as indicated for 2026, and plans for operating leverage as revenue outpaces OpEx growth in 2026.
Industry glossary
Barostim: CVRx neuromodulation device for heart failure, targeting patients with reduced ejection fraction.
APC 1580: A CMS-structured Ambulatory Payment Classification grouping, setting specific outpatient reimbursement for certain new technology medical procedures.
Category one CPT code: Permanent reimbursement code for established medical procedures, removing experimental/investigational denial risk and standardizing physician payments.
IDE (Investigational Device Exemption): FDA authorization enabling a device to be used in a clinical trial to collect safety and effectiveness data.
Category B IDE coverage: CMS policy facilitating Medicare payment for devices in clinical studies when the device is considered non-experimental/investigational but not yet fully approved.
APP (Advanced Practice Provider): Non-physician healthcare practitioner such as a nurse practitioner or physician assistant involved in patient management.
NT proBNP: Biomarker used to assess heart failure severity and stability for patient selection in cardiac device trials.
Guideline-directed medical therapy: Evidence-based pharmacological and device treatments recommended in clinical guidelines for heart failure management.
Full Conference Call Transcript
Kevin Hykes: Q3 was a strong quarter for CVRx. We grew revenue by double digits year over year and expanded our commercial footprint. Our newer reps are hitting their stride, driving procedure volumes, and building productive relationships with physicians and APPs that manage heart failure patients in the community. Let me remind you of our three strategic priorities for 2025. Our first priority is building a world-class sales organization that develops sustainable barrel programs with deep therapy adoption. Our Salesforce transformation is progressing well, and turnover is returning to more normal levels. The first wave of the sales reps hired earlier this year are getting up to speed and making meaningful contributions.
We will continue hiring high-quality talent but at a more measured pace that aligns with our territory expansion plans rather than the accelerated hiring that was needed to support the transformation. With this foundation in place, we are now concentrating on onboarding the new reps and accelerating their path to productivity. Second, we are targeting centers with the highest potential for sustainable programs, implementing a best practice playbook to drive deep therapy adoption. Our refined approach to account targeting guides our expansion focusing on high potential tier one and tier two accounts. That being said, we are also selectively pursuing pragmatic opportunities in Tier three and four accounts where we see committed physician champions, administrative support, and the right fundamentals.
We added 10 net new centers this quarter and are seeing traction with this approach. Our top accounts are demonstrating the deepening adoption that more than 20% of our active implanting centers achieved three or more implants in Q3. This demonstrates what is possible when committed physician champions and strong institute support come together. Our third priority is addressing the primary barriers to the adoption of Barostim therapy by improving patient access, expanding therapy awareness, and building out our portfolio of clinical evidence. As it relates to patient access, we are making headway on multiple fronts. In July, CMS proposed maintaining Barostim in new technology APC 1580, with payment of approximately $45,000 for procedures performed in the outpatient setting.
The second rule proposed in July and finalized on October 31 is our transition to a category one CPT code effective 01/01/2026. The Category one designation eliminates the experimental and investigational denials regularly seen with Category III CPT codes, improves prior authorization predictability and throughput, and ensures that physicians are paid fairly and consistently for the procedure. On the coverage front, we are continuing to see encouraging trends and positive support from Medicare, Medicare Advantage, and commercial payers. Taken as a whole, these reimbursement advancements are creating an increasingly solid foundation for patient access and facilitate our work to move Barostim towards standard of care.
Our awareness efforts are focused on educating clinicians on the appropriate role of Barostim therapy in the treatment of heart failure. We are engaging more deeply with the networks of referral physicians that surround our targeted centers through expanded national, regional, and local medical education programs. Beyond these physician-focused programs, we have continued to expand our engagement with advanced practice providers, or APPs, with a significant number of APP-specific educational programs completed year to date. These events are driving substantial interest and awareness in Barostim therapy among community-based APPs, who manage most of our indicated heart failure patients on a day-to-day basis.
During the quarter, we also had a significant presence at the Heart Failure Society of America meeting, one of the largest global heart failure conferences, where we hosted a multidisciplinary symposium with over 125 attendees. Our clinical evidence portfolio supporting Barostim continues to grow, and we are seeing an increasing flow of independently reviewed publications being submitted from our implanting centers, reporting positive patient outcomes. Recently, we have seen single-center studies showing significant improvements in Barostim patients, including a reduction in hospitalizations, reduced arrhythmia burden, and a positive impact on the ability to uptitrate and optimize guideline-directed medical therapy.
Michael Vallie: Also,
Kevin Hykes: our discussions with FDA around a potential new randomized controlled trial are progressing positively. We submitted our IDE application in mid-October and expect to receive feedback from FDA in late November. If we can reach agreement with FDA on the IDE protocol, we will then approach CMS to apply for Category B IDE coverage, a second and necessary condition in order for us to move forward with the trial. We are pleased with our third-quarter performance. The momentum we are building reflects our investments in team development and go-to-market execution, with an increasingly broad and strong contribution across our account and territory base. We are seeing the consistent, methodical progress needed to establish Barostim as a standard of care.
Michael Vallie: Now,
Operator: Thanks, Kevin.
Jared Oasheim: An increase of $1.3 million or 10% over the three months ended 09/30/2024. Revenue generated in the U.S. was $13.5 million for the three months ended 09/30/2025, an increase of $1.2 million or 10% over the three months ended 09/30/2024. Revenue units in the U.S. totaled 420 and 394 for the three months ended 09/30/2025 and 2024, respectively. The increases were primarily driven by continued growth in the U.S. heart failure business as a result of the expansion into new sales territories, new accounts, and increased physician and patient awareness of Barostim. As of 09/30/2025, the company had a total of 250 active implanting centers in the U.S., compared to 240 as of 06/30/2025.
Active implanting centers are customers that have completed at least one commercial heart failure implant in the last twelve months. The number of sales territories in the U.S. increased by three to a total of 50 during the three months ended 09/30/2025. Revenue generated in Europe was $1.2 million for the three months ended 09/30/2025, an increase of $100,000 or 12% over the three months ended 09/30/2024. Total revenue units in Europe decreased to 50 for the three months ended 09/30/2025, compared to 56 in the prior year period. The number of sales territories in Europe remained consistent at five for the three months ended 09/30/2025.
Gross profit was $12.8 million for the three months ended 09/30/2025, an increase of $1.5 million or 15% over the months ended 09/30/2024. Gross margin increased to 87% for the three months ended 09/30/2025, compared to 83% for the three months ended 09/30/2024. Gross margin for the three months ended 09/30/2025 was higher due to an increase in the average selling price and a decrease in the cost per unit, primarily due to an increase in manufacturing efficiencies. R&D expenses increased $600,000 or 26% to $3.1 million for the three months ended 09/30/2025 compared to the three months ended 09/30/2024.
This change was driven by a $500,000 increase in compensation expenses and a $200,000 increase in consulting expenses, partially offset by a $200,000 decrease in clinical trial expenses. SG&A expenses increased $200,000 or 1% to $21.9 million for the three months ended 09/30/2025, compared to the three months ended 09/30/2024. This change was primarily driven by a $200,000 increase in expenses and a $200,000 increase in non-cash stock-based compensation expense, partially offset by a $200,000 decrease in advertising expenses and a $200,000 decrease in compensation expense. Interest expense increased $500,000 for the three months ended 09/30/2025 compared to the three months ended 09/30/2024.
This increase was driven by the interest expense on higher levels of borrowings under the term loan agreement with Innovatus Capital Partners. Other income net was $900,000 for the three months ended 09/30/2024 and 2025. These balances consisted of interest income on our interest-bearing accounts. Net loss was $12.9 million or $0.49 per share for the three months ended 09/30/2025, compared to a net loss of $13.1 million or $0.57 per share for the three months ended 09/30/2024. Net loss per share was based on 26.2 million weighted average shares outstanding for the three months ended 09/30/2025, and 22.8 million weighted average shares outstanding for the three months ended 09/30/2024. As of 09/30/2025, cash and cash equivalents were $85.1 million.
Net cash used in operating and investing activities was $10 million for the three months ended 09/30/2025, compared to $10.4 million for the three months ended 09/30/2024. Now turning to guidance. For the full year of 2025, we now expect total revenue between $55.6 million and $56.6 million compared to prior guidance of $55 million to $57 million. We now expect full-year gross margin between 85% and 86% compared to prior guidance of 83% to 84%. And we now expect operating expenses between $98 million and $99 million compared to the prior guidance of $96 million to $98 million. For 2025, we expect to report total revenue between $15 million and $16 million.
One additional note is that our existing registration statement is scheduled to expire on November 15, 2025. As part of good corporate housekeeping, we plan to refresh our registration statement in connection with the filing of our 10-Q, which is expected to be filed tomorrow morning. With that, I'll now turn the call back over to Kevin for closing remarks.
Kevin Hykes: Thank you, Jared. Looking ahead, we now have the fundamentals in place to positively impact the lives of a meaningful number of heart failure patients and to create significant value in doing so. Our sales team is becoming more productive, and we are seeing positive signals from payers across the board. Our clinical evidence is expanding, and our awareness efforts are gaining traction. Financially, we are demonstrating improving leverage in our business model as we scale. Combined with our strong cash position, this gives us the resources and runway necessary to execute our strategy. Now I would like to open the line for questions. Operator?
Operator: Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press 1 on your telephone keypad. A confirmation tone will indicate that your line is in the question queue. You may press 2 if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, while we poll for questions. Our first question comes from John Edward Young with Canaccord Genuity. Please proceed with your question. Hi, Kevin, Jared. Thanks for taking our question and congratulations on the quarter.
John Edward Young: Maybe I can just start on the guidance. I appreciate the narrowed range, but perhaps you could walk us through why you cut the higher end given that it sounds like reps are starting to hit their stride from your commentary. Are you expecting more of a benefit in 2026 then from their productivity? Is there anything you're seeing today in the business that bugs that as well? Thank you.
Jared Oasheim: Hey, John, happy to cover that one. Yes, we were really happy with the results we saw in Q3. We're starting to see more of those new reps on the U.S. side get up that productivity curve, but you know, we know the work is not yet done in that arena. And we do not want to get too far ahead of ourselves. So the performance, you know, that we saw in Q3, we saw that continue into October. That gives us the confidence in the guide that we set out by raising the midpoint of the old guidance that we had previously issued.
John Edward Young: Thank you. And then just on 2026, I'm not sure if you are willing to give any commentary yet, but it looks like the street's mild and about 18.5% growth in '26. Are you comfortable with that level at this point?
Jared Oasheim: Yeah. It's a good question. You know, we're coming off a year where, you know, the midpoint of the updated range will be growth of about 10% compared to 2024. So you know, having that as our baseline, we're still anticipating to continue to invest in business where we're gonna be adding more sales reps, activating more territories, and continuing to invest in the rest of the business. I think as we march into 2026, you know, we're starting to target growth kind of in the mid-teens, to see it accelerate from the growth rates we're seeing in 2025. And then eventually getting back to those longer-term targets of seeing higher growth rates in the mid to 20 percents.
But that's out in 2027 and beyond.
Operator: Thanks, John. Our next question comes from Samantha Munoz with Piper Sandler. Please proceed with your question. Hi. This is Samantha on for Matt today. Thanks so much for taking our question and a good performance in the quarter. I also wanted to touch on the productivity improvements with the Salesforce. You know, could you give any more color or quantification, you know, how many of the sales reps are kind of giving that to the productivity that you'd like to see, you know,
Samantha Munoz: Would you say everyone's ranch? Just any more color there would be great.
Kevin Hykes: Yeah. Thanks, Samantha. I'll take that. It's Kevin. So I would say we're pleased with what we're seeing from the new reps, particularly those we've hired in the last three quarters. As Jared mentioned in his comments, we believe more reps today are active and contribute in the quarter than we've ever seen before. So we're seeing them start to come up the curve and understand their roles and get comfortable in their territories and contribute. We're nowhere near yet seeing the full productivity that we would expect from these new hires. So I think there's still some work to do there.
And as we've communicated in the past, depending on the background of the individual and the territory that they're assuming or building from scratch, it can take six to nine to twelve months for them to really start to contribute. But I would say at this point, we're really pleased with what we're seeing, no reason to think that we won't see continued improvement.
Samantha Munoz: That's perfect. Thanks. And one more from us. You know, it was great to see the, like, category one code finalized in the physician fee schedule that was published just a few days ago. Know, how should we be thinking about, the reimbursement changes are gonna be implemented starting January 1?
Kevin Hykes: Sure. That's a great question. You know, I would say, overall, we're thrilled with the developments over the last year in reimbursement and what we see on the horizon, you know, we're seeing really strong support from the MAC for traditional Medicare, improving rates from the Medicare Advantage carriers. Some really positive signals, both at the prior off level as well as at the kind of second and third level reviews and even at the administrative law judge level. Those are each different points during the appeals process where you challenge a payer to cover a case, and we're seeing improving trends in all those areas.
You know, obviously, category one in January will be an important next step for us that eliminates the payer's ability to automatically deny our prior authorizations on the basis of them being experimental. So that this means as of January 1, each authorization has to be reviewed by a human clinician and reason must be given for why it's being denied.
So that I wouldn't characterize that as an immediate sort of step function change, but it will certainly as it becomes more and more impactful as we enter the second and third quarter of the year, we will see the friction in the system reduced, and we believe it will result in higher rates of approval and shorter times to those approvals for prior authorizations.
Samantha Munoz: Great. Thank you.
Operator: Our next question comes from Rohin Kirit Patel with JPMorgan. Please proceed with your question.
Rohin Kirit Patel: Hi. This is actually Rohan on for Robbie. Thanks so much for taking our question.
Frank James Takkinen: I have a question on margins. Gross margin came in a decent clip ahead of expectations in the quarter. And was just wondering if you can provide some further color on how much of this is due to better pricing versus some of the manufacturing efficiencies that you called out. And is this a new steady state that we should expect heading into 2026 just from a gross margin perspective?
Jared Oasheim: Yes. Hi, Rohan. I think we tried to call it out in earlier remarks. It is a mix. It's a bit of, you know, increased ASPs and an improvement in the cost per unit. ASPs for the quarter were north of $31,000 on a worldwide basis. That's a pretty good step up from what we saw at Q3 last year where it was just below $30,000 per unit across the whole across the globe for ASPs. But I do think the bigger chunk that drove this improvement in Q3 margins was the cost per unit. We're continuing to build more and more units in our facility here in Minneapolis.
And as a result of that, we're seeing our labor and overhead costs spread over more units, seeing that cost come down. I think the ASP side of the house, we're not ready to just, you know, bake it in just yet longer term, but, you know, we do think there is promise that we could maintain these levels moving forward. And then on the cost side, we do think these are production levels that we're gonna continue at or continue to increase upon. So that should give us comfort to be able to keep these costs in a similar range moving forward.
Frank James Takkinen: Great. Thanks. And I guess I also wanted to clarify a prior point that you may have made. I'm just heading into 2026 given the new category one code. Set to take effect in the favorable PFS rates and extension of the APC payment. It also seems like you have a better grasp on the commercial organization as you sit here today. So is it fair to say that all these kind of developments in conjunction should drive an acceleration in sales growth in 2026? And just could you frame that some of the puts and takes for investors on how you're thinking about it today?
Jared Oasheim: Yeah. I that's a great kinda summary of what we have going into 2026. I think, you know, part of this is we're coming off a year from '24 to '25, where we know, went through a Salesforce transformation. We really implemented this go-to-market strategy that was brought forward at the 2024. And we're starting to see some really nice results here in the third quarter. And driving into the end of the year. I think as we're moving into 2026, we are expecting to see a reacceleration of growth. And as I mentioned earlier, kind of targeting the mid-teens for what we would expect for growth rates, '26 over 2025.
But you know, there is potential for exceeding those expectations if everything lines up for us with the category one taking effect with payers, moving in the right direction for prior approval rates and the time to those approvals. But I think base case for us at this point is seeing that reacceleration go from about 10% to the mid-teens as we move into 2026.
Frank James Takkinen: Great. Thank you.
Operator: Our next question comes from Brandon Vazquez with William Blair. Please proceed with your question.
Rohin Kirit Patel: Max on for Brandon. Thanks for taking the question. Kevin, you know, you mentioned you guys are focused on getting these newly hired reps up to speed more quickly. Can you just touch on how you guys are approaching that? What specifically you guys are doing that's giving you confidence, that they will get up the productivity curve quicker and what's giving you confidence that, you know, newer reps that you hire will fall into the same playbook. And then I have a follow-up. Thanks.
Michael Vallie: Sure. Great question. So I would say, you know, it starts with the people that we're hiring.
Kevin Hykes: And as we've talked about extensively over the last eighteen months, we're really trying to develop a sales team that has program development, that has market development skills, that has sort of a process-driven mentality, different than what you'd often find in an early-stage sort of startup environment or in a more mature industry where you're fighting for market share. These are people that know how to develop new programs and introduce new therapies. So that's the raw material that goes into it. We've made significant investment in our sales training resources, both the curriculum and the experts that we've hired that train these reps.
And have instituted a much more deliberate and systematized sales training process that we believe compresses their time to comfort with our therapy and with their territories and with the process necessary to open a sustainable Barostim account. And that differs by person, of course, but we're pleased with what we're seeing, and we're pleased, you know, anecdotally, at least, today, to see some of these reps getting up to speed much faster than has historically been the case. And it's probably a combination of all those things. And it also comes with picking the right accounts. Right?
So we think we know enough about this market today that we can be better at selecting where to spend our time, to pick the right accounts that can get up to speed perhaps more quickly than in the past. So it's a combination of factors, but we're pleased with what we're seeing.
Rohin Kirit Patel: Got it. That's helpful. And then, Kevin, just on the RCT, can you guys just touch on additional milestones what might be left there following the next steps in November? And maybe just remind us all what you guys are going after there and what positive results in the future could mean for the TAM.
Kevin Hykes: Sure. That's a great question. So as a reminder, so we are in discussions. We've submitted an IDE for a very significant randomized control trial. That would triple our TAM. By both moving the ES, the ejection fraction cutoff from 35 to 50 and also moving the cutoff for something called NT proBNP. That's a biomarker that describes the stability of heart failure. That would move from its current level of 1,600 up to 5,000. And so the patients that are in that expanded range have a very similar disease, and we believe will respond similarly to therapy.
So this represents a pretty compelling way to expand that indication to an adjacent group of patients who are very much today, in the environments that our sales reps are calling on. So that's the goal behind the trial. We have submitted the IDE, as I mentioned, to FDA. We hope to hear back from them sometime in November. If we can indeed reach agreement on a trial design, we would then go to CMS and submit for a category B IDE coverage designation. And that's a very necessary second step that means that CMS will agree to pay for the patients who receive our device in this trial.
With that second approval, if successful, would begin center outreach and would anticipate treating the first patients in this trial sometime in 2026. That's great. Thanks for taking the question, guys. Sure.
Operator: Our next question comes from Frank Takkinen with Lake Street Capital Markets. Please proceed with your question.
Frank James Takkinen: Great. Thanks for taking the questions. I'm going
Kevin Hykes: pick up on the RCT a little deeper there. Kevin, maybe talk to how many patients you're thinking will be enrolled in this trial. And then on the category B, do you think you can get reimbursement rate similar to ASP that
Michael Vallie: you're currently collecting?
Kevin Hykes: Sure. Thanks, Frank. So as I think maybe we mentioned on a prior call, we're seeing this trial at roughly around 2,000 patients randomized
Rohin Kirit Patel: to either Barostim therapy or guideline-directed medical care.
Kevin Hykes: That would make it one of the largest cardiovascular device trials ever conducted. So this would be seen as a significant sort of scientific contribution to the field. It would likely involve 100 plus centers given the, you know, assumed enrollment rates by center. And it would likely take us about four years to enroll this trial with another eighteen months to two years of follow-up after that point. So it would be a significant trial, a significant investment. We believe there's a good likelihood that CMS will, in fact, cover this under a category B IDE designation. The criteria for that designation are clear and are not subjective.
And we've designed the trial in a manner that we think would meet those criteria. So as it relates to ASPs, I'll let
Frank James Takkinen: Jared speak to that. Yeah. Happy to jump in on that piece, Frank. So our expectation is that CMS would reimburse the hospitals the exact same rate that they're reimbursing them today
Jared Oasheim: in the outpatient setting. So if they're being reimbursed $45,000 today, under the new tech APC 1580, they'd get a similar reimbursement if these patients are enrolled through the clinical trial.
Kevin Hykes: Got it. That's great. Thanks. And then I think, Kevin, I heard you
Chase Richard Knickerbocker: speak to the concept of Salesforce is stable now and still intending to grow that Salesforce. You've been the range of three new sales territories per quarter. Is that the right way to think about it in 2026?
Kevin Hykes: Yeah. I think it is. Thank you. So I think at this point, we're pleased with what we're seeing, but we're still working the kinks out of our system, and we think that's probably the right number of new territories per quarter to model going forward. We're hopeful eventually that may increase, but for now, that's the right spot to start.
Frank James Takkinen: Okay. Perfect. Thanks for taking the questions.
Operator: Our next question comes from Chase Knickerbocker with Craig Hallum Capital Group.
Chase Richard Knickerbocker: Good afternoon. Thanks for taking the questions.
Jared Oasheim: Just wanted to, to dig in a little bit more on the guide as well.
Rohin Kirit Patel: So Q4 implies, you know, essentially flat year-over-year growth in and less sequential growth relative to the past six or seven quarters? I guess, what are you seeing
Jared Oasheim: so far in the quarter through October? That's the driver here. I'm just kind of having trouble squaring
Rohin Kirit Patel: the commentary, you know, that some of the reps are getting up to speed faster. Than expected. And I would think with, you know, many of your reps now,
Jared Oasheim: you're getting to, you know, that productive kinda six plus months in their territory point. I'm just kinda having trouble swearing that.
Rohin Kirit Patel: Is there conservatism in that guide? I mean, maybe just kinda speak to the moving pieces. Yeah.
Jared Oasheim: Good question, Chase. So I mean, as comparing year over year, I think we've talked about this the last few quarters. We had a bit of a reset with our top line numbers back in Q1. We've been working to grow that number sequentially after that Salesforce transformation took place. We've been seeing that sequential growth rate in the range of eight to 10%. I think if I look at the guide that's out here for worldwide numbers for Q4, the midpoint would get us to about 6% sequential growth. So a little bit of a step back I think what we're seeing is more reps are getting up the productivity curve, more territories are becoming active.
Again, we just wanna make sure that we're kind of through the thick of it here before we would get much more aggressive with the numbers coming out. You know, I think even at the midpoint, we're talking growth, you know, of a million dollars sequentially from Q3 to Q4.
Rohin Kirit Patel: Can you maybe speak to, kinda how
Jared Oasheim: rep tenure has progressed? Has any kind of update to any of the any of the turnover metrics, etcetera, just kinda health of the Salesforce update? Yeah. So I think we, you know, last gave updates a couple of months ago on the percentage of reps that were hired in 2024, 2025. We haven't seen significant changes there. I think Kevin alluded to this in his prepared remarks that you know, we're back to hiring per normal levels. We're not out there accelerating our hiring to backfill a bunch of reps that were turned over. And so at this stage, we haven't seen significant movement in those percentages of rep that were hired in 2024 and 2025.
Operator: And then just last And just to close it
Jared Oasheim: out, I mean, overall turnover kinda returning back to those normal levels. And know, I think we've alluded to it in the past you know, annual turnover levels that we think to be normal are kind of in that range of 10 to 20%.
Rohin Kirit Patel: Got it. And then just maybe on the OPPS, any sort of engagement around
Chase Richard Knickerbocker: you know, level six neurostimulator code outside of the
Jared Oasheim: of the comments you submitted. And then second, Jared, just you know, I appreciate those thoughts for '26. I mean,
Rohin Kirit Patel: maybe just also some thoughts on, expenses next year. Just kind of how, you know, you plan to manage the business from an OpEx perspective?
Jared Oasheim: As we look at 2026?
Kevin Hykes: Yep.
Jared Oasheim: So on the OPPS side, you know, I think everybody's sitting and waiting, for when that final rule will post. Just a reminder for everybody that CMS did come out this year in the proposed rule back in July that we would be mapped the new tech APC 1580 for 2026. We don't expect that to change in the final rule, but there is still a chance for some upside where they could create a level six NeuroStim code. So we're still waiting for that final rule, which understand could be published any day now. So, you know, we'll come back and give updates on that as information becomes available. But there's no additional information behind the scenes.
It's all of us just waiting for CMS to release this role. On 2026 spend we do anticipate that we're gonna continue to see leverage in this model. So if we're modeling mid-teens top line growth with slight improvements on margins. We're not intending all of that gross profit to be spent within operating expenses. So we would expect the OpEx growth to be at a lower rate than what we're modeling for top line. But again, we'll come out with more detail on that when we finalize guidance for 2026.
Operator: Our final question comes from Ross Osborn with Cantor Fitzgerald. Please proceed with your question.
Ross Everett Osborn: Congrats on the progress, and thanks for taking our questions. So maybe just a quick modeling question from us. Your 2025 OpEx guide implies a sequential step down. Is that fair to assume the savings will come from R&D line? Sequentially?
Jared Oasheim: Yes. It's a good question, Ross. So actually, I think we expect that movement would likely happen within SG&A sequentially from Q3 to Q4. Q4 is typically a lighter order when it comes to trade show and marketing spend. And so we would typically see a little, or fewer dollars going into that bucket in the fourth quarter as compared to the third.
Operator: Okay. Got it.
Ross Everett Osborn: And then looking at your top accounts doing three or more implants, and the highest at greater than 10, are there any structural differences between those averaging three versus 10? Or do you think those currently averaging three have the ability to ramp to 10 over time?
Kevin Hykes: That's a great question. I'll take that. Thanks, Ross. So I would say it's the latter. You know, there are no structural differences there. We think this is ultimately the effect of us sort of steadily improving the mix of accounts that we have and their likelihood of deep adoption. And the tools that we're applying to them. This methodical process of getting the right stakeholders in place,
Jared Oasheim: you know, getting administrative support in place,
Kevin Hykes: and building a robust and resilient network these accounts that allows them to build this into how they treat the disease. So we're pleased with what we're seeing. No reason to believe that they couldn't all be operating at that level. And in fact, that's our goal.
Ross Everett Osborn: Great. Thanks for taking our questions.
Operator: We have reached the end of our question and answer session. I would now like to turn the floor back over to Kevin for closing comments.
Kevin Hykes: Thank you, operator, and thanks, everyone, for joining today. We appreciate your continued support. And look forward to updating you on our progress next quarter. Thank you.
Operator: This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.