Penumbra Inc (PEN)

Penumbra Inc – Q1 2025 Financial Report

Report Date: April 30, 2025
Period Covered: Q1 2025 (Three months ended March 31, 2025)

Executive Summary

Penumbra Inc (NYSE: PEN) reported record quarterly revenue of $324.1 million, up 16.3% year-over-year from $278.7 million in Q1 2024. Net income surged to $39.2 million ($1.00 diluted EPS), compared with $11.0 million ($0.28 diluted EPS) in Q1 2024, representing a 256% increase. Gross margin improved to 66.6% from 65.0% a year ago, driven by favorable product mix and productivity gains. Operating income reached $40.4 million (12.4% of revenue) vs. $12.1 million (4.3% of revenue) in Q1 2024.

Profit and Loss Analysis

• Revenue: $324.1 M (+16.3% YoY)
  • Thrombectomy sales: $226.5 M (+20.7% YoY)
  • Embolization & access: $97.6 M (+7.3% YoY)
• Gross profit: $215.9 M (+19.2% YoY), gross margin 66.6% (+1.6 pp)
• R&D expense: $22.1 M (6.8% of revenue) vs. $24.6 M (8.8%) in Q1 2024
• SG&A expense: $153.5 M (47.3% of revenue) vs. $144.4 M (51.8%)
• Operating income: $40.4 M vs. $12.1 M
• Net interest income: $3.5 M vs. $2.5 M
• Income tax provision: $4.6 M (effective tax rate 10.6%) vs. $3.6 M (24.8%)
• Net income: $39.2 M vs. $11.0 M

Key Drivers:
• Strong uptake of next-generation thrombectomy products in the U.S.
• Continued productivity initiatives and favorable product mix.
• Lower R&D expenses following exit of non-core healthcare business.
• Benefit from excess stock-based compensation tax credits reduced effective tax rate.

Balance Sheet & Cash Flow Highlights

• Cash & equivalents: $376.1 M (up from $324.4 M at Dec 31, 2024)
• Marketable securities: $2.8 M
• Working capital: $841.1 M
• No material debt on the balance sheet
• Capital expenditures: $13.5 M for manufacturing expansion (Costa Rica facility)
• Free cash flow generation: $48.9 M from operations
• Share repurchase: $1.0 B accelerated share repurchase (ASR) authorization remaining

Pros and Cons

Pros:

• Robust double-digit top-line growth
• Expanding gross margin and operating leverage
• Strong free cash flow supports R&D and capacity build-out
• Pristine balance sheet, no debt, ample liquidity

Cons/Risks:

• SG&A remains high as % of revenue; ongoing investments required to scale internationally
• Foreign exchange exposure in Europe/China markets
• Competitive medical device landscape; execution risk for new product launches
• Ongoing capital commitments (Costa Rica manufacturing)

This report was prepared on April 30, 2025 by the Penumbra Inc management team. It contains forward-looking statements subject to risks outlined in the company’s 2024 annual report.

Revenue by product line (Q1 2025): Thrombectomy $226.5 M (69.9%), Embolization & Access $97.6 M (30.1%).
Revenue by geography: U.S. $256.9 M (79.2%), International $67.3 M (20.8%).

Penumbra is on a solid growth trajectory, fueled by strong adoption of next-generation thrombectomy devices and operational efficiencies. The robust cash flow and zero-debt balance sheet underpin continued R&D investment and capacity expansion, notably the Costa Rica manufacturing facility. Key future catalysts include new product introductions, geographic market penetration, and margin expansion. Potential challenges are foreign currency volatility, competitive pressures, and execution risks around scaling sales infrastructure abroad.