Good afternoon, my name is Chantelle. And I will be your conference operator today. At this time, I would like to welcome everyone to Penumbra's Fourth Quarter and Year End 2018 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] Thank you. I would now like to introduce Mr. Dan Wilson, Director and Head of Business Development for Penumbra. Mr Wilson, you may begin your conference.

Thank you, Chantelle and thank you all for joining us on today's call to discuss Penumbra's Earnings Release for the fourth quarter and year-end 2018. A copy of the press release and financial tables, which includes a GAAP to non-GAAP reconciliation, can be viewed under the investors' tab on our company website at www.penumbrainc.com. During the course of this conference call, the company will make forward-looking statements pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995 including statements regarding our financial performance, commercialization, clinical trials, regulatory status, quality, compliance and business trends. Actual results could differ materially from those stated or implied by our forward-looking statements due to certain risks and uncertainties, including those described in our 10-K for the quarter ended December 31, 2018, which is scheduled to be filed with the SEC on February 26, 2019. As a result, we caution you against placing undue reliance on these forward-looking statements. And we encourage you to review our periodic filings with the SEC, including the 10-K previously mentioned, for a more complete discussion of these factors and other risks that may affect our future results or the market price of our stock. Penumbra disclaims any duty to update or revise our forward-looking statements as a result of new information, future events, developments or otherwise. On this call, certain financial measures are presented on a non-GAAP basis. A reconciliation of GAAP to non-GAAP financial measures is provided in our posted press release. We anticipate the prepared comments on today's call will run approximately 20 minutes. Adam Elsesser, Penumbra's Chairman and CEO, will provide a business update from the fourth quarter followed by a review of the year and commentary on our key drivers into next year. Sri Kosaraju, our CFO and Head of Strategy, will then discuss our fourth quarter and year-end financial results and also introduce our 2019 revenue guidance. With that, I would like to turn over the call to Adam Elsesser.

Thank you, Dan. Good afternoon and thank you for joining Penumbra's fourth quarter and year-end 2018 conference call. Penumbra had a strong fourth quarter which capped a tremendous year of exceptional growth and patient impact. Equally important, we made great progress in 2018 toward positioning our company for future leadership and success. Our total revenues for the fourth quarter of 2018 were $120.8 million, an increase of 25.8% as reported from the fourth quarter of 2017. We had operating income in the quarter of $6.7 million compared to $3.9 million for the same period last year. In the fourth quarter, we saw our strongest sequential revenue growth of the year, which resulted in strong year-over-year growth against difficult fourth quarter comparisons, particularly in our Neuro international markets. In Neuro our ischemic stroke business in the United States saw exceptional double-digit sequential growth due to strong procedural volumes. In addition, Penumbra JET Engine has been an important step forward for our franchise. Since our launch in September, overall physician feedback has continued to be very positive and has met our high expectations. In our vascular business, we are seeing meaningful growth which is followed our view that this market could be as large if not larger an opportunity for Penumbra the Neuro. As you may recall in our last two quarterly calls we discussed bringing our technology to new specialist physicians and adding new technology to approach new patient markets.Both of these efforts have continued to contribute to our exceptional momentum and growth. We are seeing growing adoption of our Indigo System as a powerful tool to remove blood clots and we're also seeing growing use of our embolization system as a platform across a number of the embolization procedures. This quarter we expanded geographically with the introduction of our peripheral…

Thank you, Adam. For the fourth quarter ended December 31, 2018, our total revenues were $120.8 million, an increase of 25.8% reported compared to the fourth quarter of 2017. Our geographic mix of sales in the quarter were 67% U.S., and 33% international. Neuro and vascular represented 61% and 39% of sales, respectively. We ended the year -- we ended 2018 with very strong overall momentum in our business, particularly in the U.S.Before we review our results, I would like to share two items to note, as we discuss our reported growth rates within neuro and vascular. First, as discussed previously, beginning in the fourth quarter, we faced challenging year-over year comparisons, given the acceleration in the stroke market as well as international launches in the prior year. Second as Adam mentioned in the fourth quarter, we launched our peripheral embolization business into Japan with our long-term distributor partner. With the launch of our peripheral embolization products, physicians are expected to move to our branded peripheral coils from our Neuro embolization coils, which are also indicated for peripheral use. The primary financial implication of this change -- in this change in revenue classification from our Neuro division to our vascular division. Revenue from our Neuro business grew to $74 million in the fourth quarter of 2018, an increase of 9.9% reported compared to the same period a year ago. Our Neuro growth was primarily driven by sales of our Penumbra system for ischemic stroke, which benefited from continued strong procedural volumes and the strength of our differentiated portfolio. In the United States, we saw exceptional double-digit sequential growth in ischemic stroke which was driven by procedure volumes and the launch of Penumbra JET Engine. We see our international opportunity in ischemic stroke is extremely robust. However, we expect to see…

Thank you, Sri. As we look, as we now look to 2019. We are excited to continue our important work. We remained steady and focused on what has always driven us and that is making better and better products to help more and more people. We have begun several major initiatives to invest in our people and infrastructure to support these efforts. Last year, we added more talent and depth to our team and secured additional space. We also continue to evolve the structure of our team to support our growth, recently, we announced the addition of two new outstanding individuals who will be invaluable additions to our Board structure. As we look forward, we believe we can contribute as a healthcare company in even more significant and profound ways. Thank you for your attention and time today. We'd now like to open the call for questions. Thank you.

[Operator Instructions] Your first question comes from the line of Jason Mills with Canaccord Genuity. Your line is open.

Great good morning or good afternoon. There are several notable areas on which I could clear you, Adam. I'm going to focus on to hope that others fill in the rest, stroke and one area we don't talk a ton about what was discussed quite prevalently at the recent AANS/CNS and ISE meetings with respect to intracerebral hemorrhage evacuation with this topically. So on the stroke side, just a couple of ones I'll kick off and then ICH, I just wanted to get your thoughts on the two trials you're sponsoring and you're sort of overall thoughts on the eventual commercialization of products there and the opportunity long term for revenue contributions from ICH. On the stroke side, the sequential growth that you mentioned in the U.S.specifically deemed to be the strongest of the year, not only for the whole business. But for our U.S. stroke, specifically in our like for you to confirm that. And then secondly more macro question, Adam, the 10,000 incremental procedures that the market saw in the U.S. this year over last. Is that sort of the capacity of the market in terms of year-over-year increases in your view, or do you see some of these programs, increasing investments across the country, stroke centers, allowing for the market to sustain even more year-over-year nominal procedure growth during that potentially. And then the last stroke question is China. I think your competitors derive a lot from China and stroke and you just signed the distribution relationship with a new distributor there, wondering what your thoughts would be with respect to Penumbra's opportunity in China? And thank you for taking all those questions.

Thank you, Jason. I hope I can remember them all. So let's start with stroke. And before I sort of get into some of the nuance question-and-answers around capacity and all, maybe I'll let Sri, confirm the numbers specifically in terms of the sequential growth numbers and then I'll pick it up from there.

Yes, well the business and the momentum across both businesses, but particularly stroke continues at a very strong pace for us, Jason and just to dig into the Neuro number if you parse through the commentary we had there was some classification movement between Neuro and Peripheral because of the launch in Japan. But one thing we didn't comment on which you picked up on was that, in the U.S., our stroke business grew sequentially double digits, which is a pretty big rate of growth for us. That just to expand on that translates to over 30% year-over-year growth. We don't typically talk about those numbers, but given the sort of some of the new ones in Neuro. It was important to point out our stroke business continues to be very well, but I'll let Adam touched on the other questions.

Thanks, Sri.

Yes. So building on that specific growth. We are as confident as we've been around our stroke business and the tools that we're adding to physicians to be able to attack this as the launch of JET Engine has been very successful, not just in the catheter part of it, but in the engine part of it. We are really seeing an understanding of the importance of the power of the aspiration source and what that can do for physicians in the way they treat these patients. So that has gone extraordinarily well. As it relates to the capacity of the market, let me just sort of remind you our comments around the growth last year and what we expect this year, meaning we don't know and do not have the ability to sort of look out in with certainty and say that we are going to have another sort of 10,000 patients that could happen and I said that in my prepared remarks, but it really is that we're still relying on all these local efforts to drive most of that growth. And as we saw last year, it was not even by quarter-to-quarter. The fourth quarter of 2016 and the first quarter of 2017 were particularly strong. And then we saw sort of a more normalized growth. So we don't know for sure. I believe that the growth, the ability of our market in the U.S., particularly to absorb growth is quite high. I don't think that's the limiting factor. I think the limiting factor is really getting the patients through the hospital. I think we,and I've said this before a lot. I think we have enough positions, we have enough capacity that may not be true at every single center that is doing this. But across the…

Thank you for the context.

Your next question comes from Robbie Marcus with JPMorgan. Your line is open.

Great. And congrats on the good quarter. Sri, maybe I can start with you and just try and dig into some of the puts and takes for next year.There is a lot of good things, there is a couple of headwinds, but I want to make sure people understand maybe the cadence throughout the year you gave us first quarter. Given there are a couple of moving pieces. And if you could just touch on the thoughts about the deceleration in growth rate for next year. And what's really driving that and how much is conservatism with unknown market growth and how much is more appropriateness?

Sure. So Robbie as we sort of touched on in our comments and even in the first question from Jason. The momentum of the business continues to be robust and is moving along the path that I think we've sort of expected and talked about even a year ago today, when we started talking about entering 2018. If we look at the guidance, the 18% to 20% growth over 2018, where we saw an acceleration in stroke, where we saw really robust vascular growth in the back half of the year and where we saw currency at least for the first half of the year be beneficial to us will face that headwind in the first half of '19. But those are the things that we go up against, but as we've always said in our, if we break up between Neuro and vascular, Neuro we're very tied to the market growth in stroke. And as you heard the market accelerated in 2018. We've got about a more normalized growth, we think the last three years that's an average of 6000 to 7000 patients. So that gets you sort of a high-teens market growth in the U.S. that gives you a good benchmark for our business. We also talked about the aneurysm business, growing in the low single digits. So that will, gives you a pretty good guide for how we think about our Neuro business and you can obviously sort of back into how we see vascular to get back to the 18% to 20% growth. But I also just to add one more thing, I mentioned that we see more potential drivers in the business and that's just the current business more areas that can contribute to growth gives us more confidence that we can keep that sustainable growth going into '19 and beyond.

Great. And Sri and Adam, maybe if I can just ask the topic [indiscernible] coming out of the JPMorgan Conference, it sounded like you haven't really seen much in way of competition from Medtronic and Stryker on the aspiration side. And any updated thoughts and what you're seeing there and I'm assuming you still feel very confident in being able to counter any competition that comes your way?

Yes, Robbie it's Adam. I -- let me maybe sort of frame how we see competition, maybe a little differently from the specific comments that we haven't seen competition yet. First of all, obviously we have -- we respect and have a great deal of respect for our competitors, they have help push this build and grow this field and certainly pushed us to make better and better products and we never take them for granted or lightly. But we've always had competition. So we were on this call. At this exact time last year we were talking a lot about competition, we've just had a bunch of companies get on labels having sold out off label for a bit.And we are still facing that same competition, I think what has happened is it's validated more and more debt aspiration first is critical and I think that's been helpful. But to say we haven't faced that we face it every day. And we're going to face it every day going forward. The companies will continue to launch new products, there'll be new companies coming.And we have remained very confident that between our extraordinary work and I specifically called out our engineering team for doing extraordinary work, they deserve another shout out, and they've done really amazing things and what we have done in the past. And what we have coming gives us a lot of confidence together with our really first class, world-class commercial team I think puts us in a position to continue to be in the leadership position, particularly as the field moves toward aspiration first.

That was much more elegantly put, appreciate the thoughts.

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

Hey, thanks, and good afternoon. First question Sri, just for you. I'm just curious in the fourth quarter,could you quantify the -- the amount of revenue that was reclassified between Neuro and Peripheral and then maybe just give a sense as to what the Neuro growth rate would have been if the reclass didn't happen.

Yeah. That's it, I think a very, very good question and to try to help on that a little bit. Just to give context that market the peripheral embolization market in Japan is not a huge one.We would characterize that end patient market opportunity to be sort of sub $50 million just to give you some order of magnitude. We had a share in a position there obviously utilizing our neuro coils, which were indicated for peripheral use that obviously the reason and rationale to go with our branded peripheral products is to make additional headway and progress in penetrating that market. But just to give you a sense of sort of the size of the market. If we were to sort of think about normalizing for that effect, we would have seen our Neuro business have sequential -- sequentially up quarter over Q3.And we would have seen our vascular business, have a year-over-year growth consistent with the last few quarters. So I think with that you can have some those several comments around the market and sort of the effect sequentially and year-over-year, some sort of context for what that might be worth.

Okay. I'm just going to get its sure I get a sense for, relative to that 11% on a constant currency basis how much higher that would have been in Neuro overall?Is that a number you are willing to give?

Yeah, I think with the comments I gave. I think you could easily back in the math, that would put you in the high teens. That's just for sort of the actual results in the quarter. And I'll sort of remind you, we mentioned two things we mentioned that with the sort of a classification between Neuro peripheral, but also the comps, we had a pickup starting in Q4. Our Neuro business in Q4 grew 31% and you remember accelerated to 42% in the first quarter. So we're going up against some challenging comps in Q4 and then particularly also In Q1.

Yeah, no I definitely recall that and see it big, big difference in comps in terms of Q2 and Q3 versus Q4 for '18 given what happened last year. So that's helpful color though.And but just also just one other clarification, looking at your public disclosures in the last two quarters, it seems like the stroke business was growing in the 40% range globally, and obviously much tougher comp this quarter, but was curious if there's any kind of help on what the stroke business grew this particular quarter. And again, I realize there was a tough comp. It sounded like most of the change, if you will, was outside the United States.

Yeah, yeah, you nailed it, Bob, I think you got it spot on. And that's why we thought to help if we were to sort of dissect that for you geographically in stroke and in neuro.In stroke, we said in the U.S., we grew year-over-year, albeit, against the tough Q4 comps over 30% this quarter.And internationally, because of a couple of things. The one that we just talked about with moving some of that focus into the peripheral embolization launch in Japan, but we also we're launching in Q4 and Q1 of last year, A68 in Japan. So you have a few things that all sort of lead up to the difficult comps within Neuro and international specifically, but I hope some of those comments help give a flavor, not just in stroke in the U.S., but overall Neuro if you sort of adjusted for that we would be in a comparably strong position.

Okay. So just to be clear that 30% was U.S. ischemic stroke year-over-year?

That's correct.

Okay. Okay and then lastly, just real quickly, you made this comment about more growth drivers in 2019 versus 2018. and I just want to, what exactly are you referencing there?

When we, if we just turn back the clock in -- think about our commentary going into '18, a lot of it was around stroke market and we talked about the anticipation of new products in the stroke portfolio and to a lesser degree on the vascular side. I think what's clear is within stroke you again, you have the markets, I think we feel like there's a lot more foundation set for us to see longer-term growth. Adam touched on some of the additional states that have made announcements including Virginia just last week. And on the product side, the continuation of sort of expanding and building our robust portfolio there outside of stroke. We continue to work on things in Neuro outside of stroke as well.On the vascular side, I think it's, I think now pretty clear we've been talking about vascular for a little while, but the results are now really starting to show why we've been so enthusiastic and optimistic about this area. We went so far as to say we think it could be a larger opportunity potentially then Neuro for us. There are --there's a lot of commercial progress, there is also product development on clinical clinically. We have the XTRAC trial that could help us move into PE pulmonary embolism market.And then you go into geography there was a question earlier about China and Japan. We just talked about expanding our peripheral business and by the way our vascular business outside the U.S. is very small, there is a great long-term opportunity there and all that is just what we would consider our existing business. There are new areas that we're continuing to work on that many things we have yet to discuss. So think you can even tell them an answer, how much there is and how enthusiastic. We are about it.

That's great. Thanks for the color.

Your next question comes from Larry Biegelsen with Wells Fargo. Your line is open.

Hey, guys. Thanks for taking the question. Just a couple, kind of new opportunities for me. So first, Adam. Can you talk about the contribution you're seeing from CAT coronary opportunity in your expectations for 2019 along that vein, I'll just ask my follow-up question on MVI you assume controlling interest last year, could we start to see some clearances in 2019 from that technology. And just along the same lines, you talked about investing in new areas, other new product launches, can we expect in 2019, I didn't hear anything about that on this call. So, thanks for taking the questions.

Sure, thanks, Larry. Let's start as beginning cataracts is definitely, as I said on some of the prior calls, the product is working we're gaining a lot of confidence in its value to interventional cardiologists in those particular procedures. It did have some value, I wouldn't say it's sort of notable or material at this point. But I do think that will continue to have and we'll see some of that success play in '19 and hopefully beyond. So we'll start to talk about that, maybe a little more as we progress in the year. MVI it's I am really not prepared to go into a lot of details at this moment on this call, but let's just sort of sum it up, as I think, for those who know us, we wouldn't have likely bought controlling interest in that enterprise if we did not feel that we were -- we have a lot more certainty around that, than we used to. And so we're pretty -- we're pretty excited in the progress we've made. And then beyond that, we're certainly I'm not prepared on this call to go into any more details.

Got it. All right. One last question Adam, on the international, it's clear that U.S. ischemic stroke was strong in Q4 the above 30% growth, but international seems to be way down a little bit by some of these issues. Can you tease out as how temporary those issues are if you expect kind of a bounce back in international ischemic stroke in Q1? Or if some of these things kind of are take a few quarters to play out? Thanks for taking the questions.

Yeah, thanks, Larry for the question and that clarification. Look our international stroke business is very strong. We spent a lot of time last year, talking about the nuances and 68 launch and all of that. And so what we said then is now turning out to be good. And I think really for the most parts, those are the nuances that created this sort of moment there's nothing about our international stroke business is different than the U.S., the products were one generation behind in a lot of those markets. But beyond that we're moving quickly the same issues apply where aspiration is gaining ground in many of these markets. And we feel extraordinarily well positioned to benefit and help those markets and their patients. So I don't think there's anything to read into it other than the nuance of this particular quarter and potentially next.

Your next question comes from the line of Joanne Wuensch with BMO Capital Markets. Your line is open.

Good afternoon, everybody. A couple of things, you mentioned that Virginia systems of care come online and you mentioned a couple of other states. Can you walk us through once these guidelines are established in these states, how long it takes to sort of transition those patients in into a more productive continue or cycle of care?

Yeah, it's a great question. And let me clarify. We sort of lumped all those states in with a list of things that they had done from protocol risks, as well as laws. Virginia pass the resolution, which really is the first step, it's not necessarily going to see a major change, by law yet. It's really a resolution of sort of -- for lack of a better way of describing it support that they want these patients to be treated. And that will, I think it's really the first step in moving toward the next phase of the legislative process. What we wanted to demonstrate is the growing support, we're now getting some bigger states added to the list, they're reaching out to this -- to the get ahead of stroke teaming and we're really I think seeing some of that momentum. To answer this specific question, how long does it take to start seeing that benefit, we really only have a few states that we can sort of look at. And I think it depends on the state and the size of the state and some of the complexities smaller states Arizona. We have had over year of that benefit, and it's we've got notable change in the number of patients being treated. Our Tennessee is still in the first sort of six months of that. So it's a little premature to sort of report on some of those numbers, but I do think it will take a while, but the overall point of this was there is real momentum. The conversations, the energy around this in the various states the list of stage of growing. So we are very heartened by and we think over the next three, four years we are going to see a big transformational change.

Thank you. As my second question, one of the things reached haven't heard yet on this conference call is about your Separator versus 3D. And if there's anything you comment on how that is going. And a couple of physicians that we've spoken to have mentioned that other companies are co-packaging their stent retrievers and there catheters. If you can think about how to position your products in that environment that would be helpful. Thanks.

Yeah listen, there are lot of things we obviously don't call out every product by saying our stent retrievers as you know, it's sort of new generation stent retrievers, where we specifically designed to sort of trap and hold the clot. It's not really sort of the hollow tube design of the older designs that our competitors have. There's been it was a paper out of Germany that showed our product working really, really well in comparison to others, and I think that's been worth pointing out and helpful. But the bottom line is we, we're not selling sort of individual tools like that. We're selling the larger idea that if you start with our aspiration tools, whether you use it in combination or as a bailout you will have a huge success using aspiration as the primary if not sole mechanism in your case. And so that's always been our focus, to answer your question around sort of packaging in kits or bundles and whether it's physically packaging them together or pricing them together. We have always competed quite well in this market in the world of packaging and pricing and sort of holistically thinking about it. There's nothing about competitive behavior that has been different or unexpected and not able to be responded to by us. And so we feel perfectly good about where we are sitting in that regard.

Your next question comes from Isaac Ro with Goldman Sachs. Your line is open.

Good afternoon, guys. Thank you. Adam, I wanted to maybe ask you in three if you could expand a little bit upon the assumptions you're making for your topline guidance this year, specifically with regards to higher dissecting your expectations for patient growth in the core stroke opportunity for the U.S. I know you gave some commentary earlier in the Q&A about procedure growth versus treatment growth.And maybe it just to be helpful to get a sense of how you're thinking about the overall market lot of moving parts between competition and what you guys are doing. So maybe that is starting point would be much appreciated.

Sure. Isaac I'll start and Adam can jump in if I don't get all your question. But as you alluded to that we break down Neuro and vascular, we are guiding to a top line of 18% to 20% following that roughly 26% reported growth that we had in Q4. The market growth drives a lot of our thinking and is the most sensitive to our results, if you look back the last three years, last year we added 10,000 more patients treated in the U.S. and that prior two years before that was around five. There's a lot of different reasons for the acceleration the local efforts some of the state initiatives we feel are more longer-term influencers of growth and obviously we had the data on extended window, which opened up new population and expanded the addressable market in terms of patients we think we can treat. So when we think about 2019, it would be great if we continued at that pace of growth, but I think we are looking at it, given that most of the core drivers are in the local efforts, which have been that way since the last three plus years we think about it a normalized rate is kind of if you were to think of the average of the last three years, you're at sort of 6000 to 7000 patients more in 2019, which translates to sort of a high-teens market growth. The other things, everyone's focused on that sort of moved aspiration, and competition, we obviously feel good about each of those. But I think the market growth is more the key driver. And there are other parts of Neuro we talked about the aneurysm market kind of growing in the low single digits. So that gives you a good perspective of Neuro and by implication vascular to get to sort of the overall top line number that we're guiding to of 18% to 20%.

Super helpful. And then maybe Sri, just a follow-up on this, Adam, wants to chime in on that question. Just on gross margin last year, obviously it was in a pretty narrow band, but it will little bit of oscillation quarter-on-quarter. And just given the exit run rate there for the end of 2018. Can you help us think through key gross margin considerations for this year between all the things you're doing with the mix, the sensuous currency might matter, but the production ramp, you guys have in the new facility it'll be just helpful gross margin line. Thanks.

Sure. So on gross margin for the year, we were up 60 basis points for the year. As you heard our commentary throughout the year. We've always talked about being in the mid -'60s. the place that we are in the investments we're making. There are a couple of things, flavors of that will pressure or keep gross margins where they are. The capacity expansion to keep up with this growth we've invested pretty aggressively. And on a prior call we talked about taking more space outside of our campus in Alameda for expansion growth. Second with new product launches we had a number of them in 2018 and obviously as we start with new products that weighs on us a little bit before we get a little more maturation in some of our production of products post launch. And geography plays in it to some degree as well. This quarter, we launched our peripheral coils in Japan and that's we touched on the product mix is being an influencer particularly between last quarter and this quarter. So the expectation is, we'll be in this sort of area, but we also believe, and that's as we look out next year. But we also continue to believe that over a longer period of time we could make some serious progress in gross margins. But right now, there is a whole heck of a lot of growth that we're trying to invest and focus on first.

[Operator Instructions] Your next question comes from Glenn Novarro with RBC Capital Markets. Your line is open.

Hi, good afternoon guys. Thanks for taking the question. On vascular, even after you adjust for the reclassification, vascular was stronger than what we expected. So Adam, can you point out or point to or anything that can help us understand why vascular continues to come in better is it you opened up some new accounts and some bigger, bigger users have come on board. Is it new reps or better Rep productivity? Any color would be helpful. And then I had a follow-up.

Yeah, yeah. Thanks Glenn for asking that question. I think it's really pretty simple when we went public 3.5 years ago we talked in the little time we have left in all meetings about this opportunity and what we thought we could do. We've been trying again limited time we have to talk about this as a real important opportunity for both patients and the company's benefit. The pathway here is different with Neuro all of our energy is now spent beyond continue make better and better products, all of our energy has been trying to get patients to the right hospital. In the U.S., particularly the patients are already there and there are already being treated. So our only goal our effort is to convince physicians that removing the clot as opposed to dissolving it our macerating it or doing something else with it is the most important thing and that helps the patient. And we've just been going at this sort of month-by-month, year-by-year. We started with one set of physicians we're moving into the second, there's a third with interventional cardiologists to do some of this work. And that's the pathway, so everything we sort of said for last bunch of years is now coming to be true. And so we're seeing the benefit and the success that brings. We're really happy to see that. We are excited for the patients that are benefiting and we are not while the surprise we can't predict exact numbers on a quarterly basis, but we're, what we had hoped would happen.

Okay. It sounds like it's just really good blocking and tackling. My follow-up is vascular really is starting to look like it's going to be a second leg of growth for the company. And I think Sri's comments you talked about growth being kind of similar to 2018. My question is why can't growth be stronger given the market so much bigger and your penetration is so low? Thanks.

Glenn, just to clarify, I think -- last two quarters before this one we were growing year-over-year in the sort of mid 40% our growth really accelerated in the back half of 2018, as we got to new physicians that vascular surgeons as an example and as we launch new technology to get to different areas like -- like we discussed in the Q2 and Q3 call. So we will face that as we go into '19.Unlike stroke, if you think about what drives our growth. We spent a lot of time answering some questions on this called Neuro about how our growth is tied to the market growth, which is getting patients to the right place to be treated. As Adam mentioned it's a little bit different here. The initial market to target are the 150,000 patients that are in hospital being treated. And it's our ability to take those cases and be involved in working with physicians to educate them on all the different avenues and diseases where Indigo can be used. So there's our first generation of tool with very little clinical data. So this is very much up to the strong commercial efforts of our team that are knocking this down and allowing us to see the growth that we're seeing. So it's hard to be able to sort of forecast that out too far for you, but I think what we can say is, we feel like we're in the very early innings we're starting to see a real acceleration in that business and we're quite excited about it.

There are no further questions at this time. Mr. Wilson, I turn the call back over to you.

Thank you, Chantelle. On behalf of our management team. Thank you all again for joining us today and for your interest in Penumbra. We look forward to updating you on our first quarter call.

This concludes today's conference call. You may now disconnect.