AtriCure Inc. reported fourth-quarter 2025 results that met the company’s preannouncement on revenue while surpassing consensus on adjusted EBITDA and earnings per share, prompting Needham to reiterate a Buy rating and maintain a $45.00 price target on the medical device maker. That target is roughly 36% above the prevailing share price of $32.97, and InvestingPro data cited analyst targets that span from $36 to $60.
Key financial details from the quarter include revenue of $140.5 million, a 13.1% increase year over year and slightly above the $139.55 million consensus. Adjusted earnings per share were $0.06, beating the consensus estimate of negative $0.10. Management left 2026 revenue and adjusted EBITDA guidance unchanged and provided EPS guidance that exceeded consensus expectations.
Even with the beats, several near-term growth dynamics warrant attention. Revenue growth in constant currency slowed to 12.1% in the fourth quarter from 15.1% in the third quarter, a deceleration attributed to softer expansion across the company’s Open-Ablation, Pain Management, and Appendage Management product lines. Management explicitly incorporated the entrance of a new competitor for the AtriClip device into its guidance assumptions.
Despite that sequential slowdown, AtriCure recorded a solid 15.8% revenue gain over the last twelve months. On margins, the company posted a 40 basis point year-over-year improvement in gross margin and a sizeable 1,350 basis point increase in operating margin. The fourth quarter of 2025 was also the company’s first quarter delivering positive net income. AtriCure continues to show a strong gross profit margin of 74.87% and carries a modest capital structure with a debt-to-equity ratio of 0.16.
Needham characterized the company’s 2026 guidance as conservative and identified potential upside to revenue, adjusted EBITDA, and EPS versus current guidance. The firm’s Buy stance and $45 target reflect that view of upside, set against a market capitalization of $1.64 billion and trading levels near InvestingPro Fair Value. InvestingPro also reports that three analysts recently raised their earnings estimates for the upcoming period, even as the company is not expected to be profitable for the full fiscal year.
Regulatory and market access developments were also highlighted by the company. AtriCure noted that hospital STAR ratings will require concomitant atrial fibrillation treatment beginning in 2027, a change that could influence adoption patterns for procedures and devices tied to AF care.
Analyst reactions to the quarter were mixed. Oppenheimer downgraded its rating to Perform from Outperform and removed a $44 price target, citing competitive concerns; that downgrade followed an alignment of AtriCure’s revenue with both Oppenheimer’s internal estimate of $139.0 million and the broader consensus of $139.3 million. By contrast, Citizens reduced its price target from $60.00 to $52.00 but retained a Market Outperform rating, signaling continued confidence in longer-term opportunity despite trimming its near-term view.
Overall, the quarter combined modest upside on profitability metrics with signs of decelerating top-line momentum in several product categories and heightened competitive entrants in appendage management. The mix of analyst upgrades to earnings estimates and cautionary moves by other firms illustrates the contingent nature of AtriCure’s near-term outlook.
Summary of results and guidance
Revenue: $140.5 million, up 13.1% year over year, slightly above consensus. Adjusted EPS: $0.06 versus consensus -$0.10. Management maintained 2026 revenue and adjusted EBITDA guidance and provided above-consensus EPS guidance. InvestingPro data shows analyst targets ranging $36 to $60 and three recent upward earnings revisions.
Operational and financial context
Growth slowed sequentially to 12.1% constant currency in Q4 from 15.1% in Q3, with deceleration across Open-Ablation, Pain Management, and Appendage Management. The company accounted for a new AtriClip competitor in its guidance. Trailing 12-month revenue growth remained a healthy 15.8%. Gross margin improved by 40 basis points year over year, operating margin rose 1,350 basis points, and Q4 was the first quarter with positive net income. Gross profit margin sits at 74.87% and debt-to-equity at 0.16.
Analyst reaction and valuation notes
Needham maintains a Buy rating and $45 target, implying about 36% upside from $32.97. Oppenheimer downgraded to Perform and removed its $44 target, while Citizens trimmed its target to $52 and kept a Market Outperform rating. The market cap is $1.64 billion and the stock is trading near InvestingPro Fair Value.