AtriCure, Inc. (ATRC)

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

(Dollar amounts referenced in this Item 2 are in thousands, except per share amounts.)

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the accompanying Condensed Consolidated Financial Statements and notes thereto contained in Item 1 of Part I of this Form 10-Q and our audited consolidated financial statements and notes thereto as well as the information under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations” as of and for the year ended December 31, 2025 included in our Form 10-K filed with the Securities and Exchange Commission (SEC). This discussion and analysis are intended to provide an understanding of our results of operations, financial condition and cash flows and contains forward-looking statements reflecting current expectations that involve risks, uncertainties and assumptions. The actual results may differ materially from those anticipated in these forward-looking statements as a result of many factors, including but not limited to those set forth under Item 1A “Risk Factors,” the cautionary statement regarding forward-looking statements below and elsewhere in this Form 10-Q.

Forward-Looking Statements

This Form 10-Q contains forward-looking statements. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act of 1933 and Section 21F of the Securities Exchange Act of 1934. All forward-looking information is inherently uncertain and actual results may differ materially from assumptions, estimates or expectations reflected or contained in the forward-looking statements as a result of various factors, including those set forth under “Risk Factors” and elsewhere in this quarterly report on Form 10-Q, and in our annual report on Form 10-K for the year ended December 31, 2025 as amended by our subsequent quarterly reports on Form 10-Q. There may be additional risks of which we are not presently aware or that we currently believe are immaterial which could have an adverse impact on our business. Forward-looking statements often address our expected future business, financial performance, financial condition and results of operations, and often contain words such as “intends,” “estimates,” “anticipates,” “hopes,” “projects,” “plans,” “expects,” “drives,” “seek,” “believes,” “see,” “focus,” “should,” “will,” “would,” “opportunity,” “outlook,” “could,” “can,” “may,” “future,” “predicts,” “target,” “potential,” "forecast," "trend," "might" and similar expressions and the negative versions of those words, and may be identified by the context in which they are used. However, the absence of these words does not mean that a statement is not forward-looking. Forward-looking statements include, without limitation, statements that address activities, events, circumstances or developments that AtriCure expects, believes or anticipates will or may occur in the future, such as earnings estimates (including projections and guidance), other predictions of financial performance, launches by AtriCure of new products, developments with competitors and market acceptance of AtriCure's products. Such statements are based largely upon current expectations of AtriCure. Any forward-looking statement speaks only as of the date made. Reliance should not be placed on forward-looking statements because they involve known and unknown risks, uncertainties and other factors which may cause actual results, performance or achievements to differ materially from those expressed or implied. Forward-looking statements are based on AtriCure’s expectations, experience and perception of current conditions, trends, expected future developments and other factors it believes are appropriate under the circumstances and are subject to numerous risks and uncertainties, many of which are beyond AtriCure’s control. In light of these risks, uncertainties and other factors, the forward-looking events and circumstances described may not occur and our financial condition and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements. In other words, these statements are not guarantees of future performance and inherently involve a wide range of risks and uncertainties that are difficult to predict. Some of the factors that could cause actual results to differ from our expectations include regional, national, or global political, economic, business, competitive, market and regulatory conditions and the other factors included in our Form 10-K for the fiscal year ended December 31, 2025 in “Item 1A Risk Factors,” “Item 7 Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and “Item 7A Quantitative and Qualitative Disclosures About Market Risk” and subsequent Form 10-Q reports. These forward-looking statements speak only as of the date of this Form 10-Q. We undertake no obligation to publicly update or revise any forward-looking statements to reflect new information or future events or otherwise unless required by law.

Overview

We are a leading innovator in surgical treatments and therapies for atrial fibrillation, left atrial appendage management and post-operative pain management. Our cardiac ablation and left atrial appendage management (LAAM) products are used by physicians during both open-heart and minimally invasive surgical procedures. In open-heart procedures, the patient is undergoing heart surgery for other conditions, such as a mitral or aortic valve repair or a coronary artery bypass, and our products are used by physicians in conjunction with (or “concomitant” to) such a procedure. Minimally invasive procedures are performed on a standalone basis and often include multi-disciplinary or “hybrid” approaches, combining surgical procedures using our ablation and LAAM products with catheter ablation performed by an electrophysiologist. Our pain management solutions are used by physicians to freeze nerves during cardiac, thoracic or amputation surgical procedures. We anticipate that

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substantially all of our revenue for the foreseeable future will relate to products we currently sell or are in the process of developing.

We sell our products to medical centers through our direct sales force in the United States, Germany, France, the United Kingdom, the Benelux region, Australia and Canada. We also sell our products through distributors who in turn sell our products to medical centers in other markets. Our business is primarily transacted in U.S. Dollars; direct sales outside the United States are transacted in Euros, British Pounds, Australian Dollars or Canadian Dollars.

Recent Developments

In 2026, we have maintained growth across most of our key franchises and geographies, resulting from our strategic initiatives of product innovation, clinical science and physician education and training to expand awareness and adoption. Our worldwide revenue for the six months ended June 30, 2026 was $294,853, representing an increase of $35,094, or 13.5% (12.6% on a constant currency basis), over the first six months of 2025, highlighted by accelerated adoption in our pain management, appendage management, and open ablation product lines, where recent product innovation continued to contribute to growth. We have limited competition today; however, our key markets are attracting competition from new entrants developing competing products, procedures, and/or clinical solutions. Increasing competition may lead to loss of market share in critical franchises, pricing and margin pressure, and increased costs, which could adversely affect our revenue and profitability.

PRODUCT INNOVATION. We continue to deliver growth from our most recent product innovations. We remain focused on sustaining this momentum by advancing our internal research and product development efforts with the objective of enhancing our existing portfolio and supporting the introduction of future products while pursuing regulatory approvals to market and sell globally across all franchises. In April 2026, we received CE mark approval under EU MDR in Europe for our AtriClip FLEX-Mini® and AtriClip PRO-Mini® devices and expect to launch both products in Europe later this year.

CLINICAL SCIENCE. We continue to invest in studies to expand labeling claims, support various indications for our products and gather and publish clinical data for therapies and procedures involving our products. Key trials include:

LeAAPS. The Left Atrial Appendage Exclusion for Prophylactic Stroke Reduction (LeAAPS) IDE clinical trial is designed to evaluate the effectiveness of prophylactic LAA exclusion using the AtriClip LAA Exclusion System for the prevention of ischemic stroke or systemic arterial embolism in cardiac surgery patients without pre-operative AF diagnosis who are at risk for these events. This prospective, multicenter, randomized trial evaluates safety at 30 days post-procedure to demonstrate no increased risk with LAA exclusion during cardiac surgery, and efficacy over a minimum follow-up period of five years post procedure. In July 2025, we completed trial enrollment of 6,573 patients across 139 centers globally. Patient follow-up for a minimum of five years post procedure is required by the study protocol and remains ongoing.

BoxX-NoAF. The Box Lesion and Left Atrial Appendage EXclusion Procedure for the Prevention of New Onset of Atrial Fibrillation (BoxX-NoAF) IDE trial evaluates the impact of concomitant ablation using the EnCompass® clamp and LAA exclusion with the AtriClip system in non-AF patients for the reduction of post-operative AF (POAF) and Clinical AF. This prospective, multi-center, multi-national randomized trial evaluates safety at 30 days post-procedure for POAF and secondary effectiveness for Clinical AF through three years. The trial provides enrollment of up to 960 subjects across 75 sites. Site initiation and enrollment is ongoing.

TRAINING. Our professional education team conducts in-person and virtual training programs for physicians and other healthcare professionals to support continuing education and product and procedural awareness. Over the last year, we launched new training methods including virtual proctoring and observerships, peer-to-peer case-in-a-box reviews and expanded courses for Advanced Practice Providers, incorporating new content and workshops. We also launched our first physician-developed electronic manual outlining best practices in developing and growing a Hybrid Ablation Program. These offerings, together with our traditional on-demand, local and national training courses, provide collaborative, hands-on engagement. Most recently, we added a live streaming platform in which healthcare professionals can view the courses without needing to leave their practice. Our professional education courses are further enhanced by the use of simulation models or synthetic cadavers, known as CADets. These reusable CADets provide a sustainable and cost-effective alternative to cadaver specimens while improving education efficiency.

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Results of Operations

Three months ended June 30, 2026 compared to three months ended June 30, 2025

The following table sets forth, for the periods indicated, our results of operations expressed as dollar amounts and as percentages of revenue:

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ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

(Dollar and share amounts referenced in this Item 7 are in thousands, except per share amounts.)

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the accompanying Consolidated Financial Statements and notes thereto contained in Item 8, “Financial Statements and Supplementary Data,” to provide an understanding of our results of operations, financial condition and cash flows. This section of this Form 10-K generally discusses 2025 and 2024 items and year-to-year comparisons between 2025 and 2024. This discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions. The actual results may differ from those anticipated in these forward-looking statements as a result of many factors, including but not limited to those set forth under Item 1A “Risk Factors,” the cautionary statement regarding forward-looking statements at the beginning of Part I and elsewhere in this Form 10-K.

Year Ended December 31, 2024 compared to December 31, 2023

For a comparison of our results of operations for the years ended December 31, 2024 and December 31, 2023, see “Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our annual report on Form 10-K for the year ended December 31, 2024, filed with the SEC on February 14, 2025.

Overview

We are a leading innovator in treatments for atrial fibrillation, left atrial appendage management and post-operative pain management. Our ablation and left atrial appendage management products are used by physicians during both open-heart and minimally invasive surgical procedures. In open-heart procedures, the physician performs heart surgery for other conditions, and our products are used in conjunction with (or “concomitant” to) such a procedure. Minimally invasive procedures are performed on a standalone basis, and often include multi-disciplinary or “hybrid” approaches, combining surgical procedures using AtriCure ablation and LAAM products with catheter ablation procedures performed by electrophysiologists. Our pain management devices are used by physicians to ablate peripheral nerves, providing pain relief in cardiac, thoracic and amputation procedures. We anticipate that substantially all of our revenue for the foreseeable future will relate to products we currently sell or are in the process of developing.

We sell our products to medical centers through our direct sales force in the United States, Germany, France, the United Kingdom, the Benelux region, Australia and Canada. We also sell our products to distributors who in turn sell our products to medical centers in other markets. Our business is primarily transacted in U.S. Dollars; direct international sales transactions are transacted in Euros, British Pounds, Australian Dollars or Canadian Dollars.

In 2025, we realized global revenue growth resulting from our strategic initiatives of product innovation, clinical science and physician education and training to expand awareness and adoption. Our worldwide revenues for the year ended December 31, 2025 of $534,528 increased by 14.9% over the prior year, driven by expanding adoption of our pain management, open ablation and appendage management product lines. Our recent product launches, including our cryoSPHERE MAX probe, AtriClip FLEX-Mini device and EnCompass clamp meaningfully contributed to our growth in 2025. There are limited competitors in our key markets; however, new entrants are developing and marketing competing products, procedures, and/or clinical solutions that may cause variability in our results.

Highlights of the strategic and operational advancements in 2025 include:

PRODUCT INNOVATION. We continue to invest in research and development of new products and pursue regulatory approvals to market and sell globally across all franchises.

Appendage management. During the first quarter of 2025, FDA granted 510(k) clearance for the AtriClip® PRO-Mini™ LAA Exclusion System. The device is built on the existing AtriClip platform, preloaded with the smallest surgical LAA management implant available in the market. The size reduction provides surgeons with enhanced visualization for precise, secure exclusion of the LAA during minimally invasive procedures. The AtriClip PRO-Mini device was launched in the United States during the second half of 2025.

Pain management. During the second quarter of 2025, FDA granted 510(k) clearance for the cryoICE® cryoXT™ probe, a cryoablation device designed specifically for Cryo Nerve Block therapy to alleviate pain in amputation patients. This device temporarily stops pain by freezing target peripheral nerves, blocking the conduction pathway at the site of amputation. During the third quarter of 2025, this device was launched in the United States.

Dual energy platform. During the fourth quarter of 2025, we executed successful first-in-human treatments using our novel dual energy platform that integrates Pulsed Field Ablation (PFA) with Advanced Radiofrequency Ablation (Advanced RFA). The new platform delivers the benefits of both technologies, combining the proven safety and

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effectiveness of radiofrequency (RF) ablation with the efficiency of PFA. The Advanced RFA and PFA technologies are not yet approved for use in any market. We expect to initiate a clinical trial in the coming year, marking a key milestone in our product development pipeline.

CLINICAL SCIENCE. We invest in studies to expand labeling claims, support various indications for our products and publish clinical data for therapies and procedures involving our products. During 2025, we supported the publication of 13 articles and 15 congress abstracts featuring clinical studies with our products.

LeAAPS. The Left Atrial Appendage Exclusion for Prophylactic Stroke Reduction (LeAAPS) IDE clinical trial is designed to evaluate the effectiveness of prophylactic LAA exclusion using the AtriClip LAA Exclusion System for the prevention of ischemic stroke or systemic arterial embolism in cardiac surgery patients without pre-operative AF diagnosis who are at risk for these events. This prospective, multicenter, randomized trial evaluates safety at 30 days post-procedure to demonstrate no increased risk with LAA exclusion during cardiac surgery, and efficacy over a minimum follow-up of five years post procedure. In July 2025, we completed trial enrollment of 6,573 patients across 139 centers globally. Patient follow-up remains ongoing.

BoxX-NoAF. The Box Lesion and Left Atrial Appendage EXclusion Procedure for the Prevention of New Onset of Atrial Fibrillation (BoxX-NoAF) IDE trial evaluates the impact of concomitant ablation using the EnCompass clamp and LAA exclusion with the AtriClip system in non-AF patients for the reduction of post-operative AF (POAF) and Clinical AF. This prospective, multi-center, multi-national randomized trial evaluates safety at 30 days post-procedure for POAF and secondary effectiveness for Clinical AF through three years. The trial provides enrollment of up to 960 subjects at up to 75 sites globally. FDA approved the trial protocol during the fourth quarter of 2024 and during October 2025, we completed the first patient enrollment. Site initiation and enrollment is ongoing.

TRAINING. Our professional education team conducts a variety of in-person and virtual training programs for physicians and other healthcare professionals. These training methods ensure access to continuing education and awareness of our products and related procedures. During 2025, we launched new and innovative training methods for physicians that include virtual proctoring and observerships as well as the ability to review case-in-a-box on a peer-to-peer basis. We have also extended our courses for Advanced Practice Providers, incorporating new content and workshops. We also recently launched our first electronic manual created by physicians for physicians that provides an outline for best practices in developing and growing a Hybrid Ablation Program. These new training events along with our traditional on-demand, local and national training courses allow for collaborative, hands-on engagement with our physician partners and other healthcare professionals. Additionally, our professional education courses continue to be enhanced by the use of simulation models or synthetic cadavers, known as CADets. These reusable CADets provide a sustainable alternative to the use of cadaver specimens, in addition to increasing the efficiencies of education and more cost effective training alternatives.

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Results of Operations

Year Ended December 31, 2025 compared to December 31, 2024

The following table sets forth, for the periods indicated, our results of operations expressed as dollar amounts and as percentages of total revenue:

Revenue. The following table sets forth, for the periods indicated, our revenue by product type and geography expressed as dollar amounts and the corresponding change in such revenues between periods, in both dollars and percentages:

Worldwide revenue increased 14.9% as reported (14.4% on a constant currency basis). We experienced significant growth in our open ablation, appendage management and pain management product lines as a result of deepening market penetration, continuing physician adoption and several new product launches. Minimally invasive ablation sales declined from continued reduction in Hybrid procedures as physicians adopt PFA catheters to treat patients. Key products contributing to the increase in revenue in the United States were EnCompass clamp in open ablation, cryoSPHERE MAX probe for post-operative pain management and AtriClip FLEX-Mini device for appendage management in open chest procedures. International revenue increased 20.2% as reported (17.5% on a constant currency basis), across all franchises and major geographic regions.

Revenue reported on a constant currency basis is a non-GAAP measure calculated by applying previous period foreign currency exchange rates, which are determined by the avera

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