AtriCure Inc. (ATRC) saw its shares plummet 7.20% in after-hours trading on Wednesday, despite reporting a 17% year-over-year revenue increase in its second-quarter earnings report. The medical device company, which specializes in surgical treatments for atrial fibrillation, posted total revenue of $136 million for Q2 2025, with U.S. revenue up 15.7% and international revenue surging 23.3%.

However, investors appeared to focus on profitability concerns. Although AtriCure narrowed its adjusted loss per share to $0.02, the company's gross margin slightly decreased to 74.5% from 74.7% in the same quarter last year. Additionally, operating expenses rose to $107.7 million from $94.0 million in Q2 2024, potentially raising concerns about the company's cost management.

While AtriCure reported an increase in adjusted EBITDA to $15.4 million, up from $7.8 million in Q2 2024, and provided guidance for fiscal year 2025 with expected growth of 13-15%, the market reaction suggests that these results and outlook may have fallen short of investor expectations. The company's focus on investment in growth catalysts and expanding operating leverage, as well as its robust R&D pipeline, were not enough to offset the negative sentiment in after-hours trading.