Katherine Bock - Senior Director of Corporate Development and IR Rami Elghandour - President and Chief Executive Officer Andrew Galligan - Chief Financial Officer.

Mike Weinstein - JPMorgan David Lewis - Morgan Stanley Bob Hopkins - Bank of America Danielle Antalffy - Leerink Partners Dave Troncalli - JMP Securities Matthew Henriksson - BMO Capital Markets Larry Biegelsen - Wells Fargo Margaret Kaczor - William Blair Suraj Kalia - Northland Securities.

Good afternoon. My name is [Tashan] (Ph), and I’ll be your conference operator today. At this time, I would like to welcome everyone to Nevro Fourth Quarter and Full-year 2016 Earnings 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 turn the call over to Katherine Bock, Senior Director of Corporate Development and IR, the floor is yours..

Thank you, Tashan. And thank you all for participating on today's call. Joining me are Rami Elghandour, President and Chief Executive Officer and Andrew Galligan, Chief Financial Officer. Earlier today Nevro released financial results for the quarter and full-year ended December 31, 2016.

A copy of the press release is available on the Company's website.

Before we begin, I would like to remind you that management will make statements during this call that include forward-looking statements within the meaning of federal securities laws which are made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995.

Any statements contained in this call that are not statements of historical fact should be deemed to be forward-looking statements.

All forward-looking statements, including, without limitation, or examination of operating trends and our future financial expectations, which includes full-year 2017 guidance, and our expectations of achieving profitability are based upon current estimates and various assumptions.

These statements involve material risks and uncertainties that could cause actual results or events to materially differ from those anticipated or implied by these forward-looking statements. Accordingly, you should not place undue reliance on these statements.

For a list and description of the risks and uncertainties associated with our business, please see our filings with the Securities and Exchange Commission including our current annual report on form 10-K which we expect to file today.

Nevro disclaims any intention or obligation except as required by law to update or revise any financial projections or forward-looking statements, whether because of new information, future events or otherwise. This conference call contains time-sensitive information and is accurate only as of the live broadcast today, February 23, 2017.

And with that, I’ll turn the call over to Rami..

Thank you, Katie and thanks everyone for dialing in today. For today's call, I’ll start with reviewing our fourth and fiscal year 2016 performance and operating highlights. I'll then provide our revenue guidance for 2017 and conclude with details on our commercial progress.

Andrew will follow with a deeper review of the fourth quarter and full-year financials for 2016 as well as financial expectations for 2017. Then, we will open up the call for your questions. Worldwide revenue for the fourth quarter was $70.5 million, an increase of 113% as reported, compared to the same period of the prior year. U.S.

revenue for the quarter was $56 million, an increase of 183%. Fourth quarter international revenue was $14.5 million representing an increase of 12% on a constant currency basis. These results are driven by continued adoption and demand for HF10 therapy globally and consistent execution by our sales team.

Looking back on 2016, I can say across the organization we performed at the Nevro standard, achieving success and building a foundation for sustainable growth. Underpinning our success are our people and culture.

In 2016, we scaled the organization from around 300 to over 500 team members globally, while maintaining our sense of purpose, passion and teamwork. Commercially, we delivered a full-year revenue of $228.5 million and increased of 228% as reported. In the U.S., revenue of $173.3 million represented an increase of 612% from $24.3 million in 2015.

International revenue of $55.2 million represent an increase of 26% on constant currency basis. Building on our commercial success, we made meaningful progress towards our goal of leadership in the neuromodulation fields, there were a number of key business drivers.

First, we demonstrated the market expansion potential of our technology, through the mix of patients treated thus far in the U.S., as well as the impact we have had on the industry growth rate. We received FDA approval for Surpass surgical leads ahead of schedule, which will allow us to broaden access to HF10 therapy from 2017 and beyond.

We raise gross proceeds of $172.5 million in public offering of convertible senior notes which puts us in a position of strength to continue investments in our business. We are also pleased with the publication of the 24-month SENZA-RCT results in the journal of Neurosurgery.

We believe this publication underscores the most robust long-term clinical evidence in the SCS space. Finally, we launched litigation against Boston Scientific in order to protect our core innovation HF10 therapy.

We believe intellectual property is a cornerstone for innovation and health sciences and we are confident and defending our intellectual property. Looking ahead to 2017, we are providing full-year worldwide revenue guidance of $310 million to $320 million.

We started 2017 with a successful North American Neuro Modulation Society or NANS Meeting highlighting our clinical and scientific partners. After [indiscernible] presented three-month data of 20 patients from Upper Limb and Neck feasibility study, we are dealing an 83% responder rate in upper limb pain and 75% responder rate in neck pain.

These results support the robustness of HF10 therapy and its potential to help many more patients indeed. Professor Steve McMahon presented mechanism of actual research demonstrating what we believe is a frequency dose response that reinforce at the uniqueness of HF10 therapy and high kilohertz stimulation.

More broadly, we demonstrated the platform potential for our therapy and company through several presentations and abstracts on new indications such as Non‐Surgical refractory back pain, peripheral for diabetic neuropathy, chronic regional pain syndrome and chronic focal pain.

These syndications are in various stages of development and we look forward to providing updates on our progress as the evidence advances. Commercially we remain committed to our controlled execution strategy in 2017, which allows us to focus on delivering on the promise of HF10 Therapy while building a sustainable business.

As we mentioned at the JP Morgan conference in January, there are three primary opportunities for continued commercial growth. First, we continue to drive further penetration into existing territories by adding resources to support growth. Second, we also continue to hire in order to fill our remaining anti territories in the United States.

And finally a launch of the Paddle lead, which I'll take about momentarily, will provide an opportunity for growth in a market segment that was previously largely inaccessible.

As always, our success continues to be built on the unique advantages of HF10 Therapy, it is the only therapy to demonstrate clinically meaningful superiority to traditional SCS.

It is the only therapy that has been validated against an active comparator in a pivotal randomizes controlled study and it is the only therapy to free SCS therapy on the market. And finally it has demonstrated nearly twice the efficacy and responder rate as traditional SCS and other new low frequency stimulation wave forms.

With respect to our Paddle, we are now beginning to roll out of our controlled launch. As we have discussed on our prior calls, after securing FDA approval for the Paddle in 2016, we identified a minor design improvement that will aid in a transition to full scale manufacturing.

We submitted this change to the FDA and are pleased to announce that we have received approval for the related PMA supplement in January.

We have been ramping manufacturing operations in preparation for our launch and look forward to expanding access to HF10 therapy for the surgeon community, which we believe performs approximately 30% of SCS procedures annually in the United States.

Internationally, we continue to build upon our strong share position in our key markets and expect continued success based on the long-term results of HF10 therapy and performance of our outstanding sales team. On the hiring front, in U.S.

we ended the fourth quarter with 193 hired and trained reps and that increase a 28 reps from the previous quarter account of 165. We are pleased that we have been able to overcome the seasonality of hiring during this particular quarter, due to the positive feedback in the field combined with our own learning on improving the hiring process.

Our minimum hiring goal for 2016 was previously 160, which we meaningfully exceeded. Our drive to exceed our hiring target has been a function of our success to-date. As we discussed previously, demand in the U.S.

market from early adaptors, coupled with greater territory density due to the treatment of back pain, has limited our ability to continue to expand access to HF10 therapy. As a result, we needed to increase the pace of hiring to meet the demand in the market.

This concerted effort is reflected in our addition of net 93 sales reps during 2016 and we expect to continue hiring through 2017 as we work towards market share leadership.

Going forward, we do not intend to set a minimum target for the number of reps hired and trained in 2017, as we will continue to add headcounts to support our future growth in the U.S. market given our scale and the opportunity ahead of us.

Internationally, we ended the quarter with 69 sales reps trained and in the field and we continue to add field support as needed. Additionally, we have continued investing in our commercial infrastructure internationally in order to drive further adoption of HF10 therapy worldwide. In closing, a little over three years ago, we become a public company.

In that time, we have grown in revenue from $32.6 million in 2014 to $228.5 million in 2016. We did this slide demonstrating across our organization and we are capable of pacing an innovation and making it a market defining and leading technology.

We expect to build on our success while continuing our strong commercial execution and by leveraging our organizational ability to develop and launch meaningful products through our robust pipeline.

Ultimately our story is about people, the passionate people in our organization who are committed to delivering breakthrough evidence based therapies to transform patient lives. And the physicians in our communities that are committed to bringing the very best therapies to their patients.

This collaboration with the core focus on patient outcomes is allowing to have unprecedented success of bringing meaningful back to people, physician partners and our communities. We look forward to sharing our continued progress in this fulfilling journey.

And with that, I would like to turn the call over to Andrew Galligan, our CFO, for a more detailed review of our financials and guidance. Andrew..

Thank you, Rami. Revenue for the three months ended December 31, 2016 was $70.5 million, an increase of 113% year-over-year on a reported basis. This increase was primarily due to the continued success of the U.S. launch of HF10 therapy. U.S.

revenue in the fourth quarter was $56 million, up 183% from $19.8 million during the same period of the prior year. International revenue was up 9% to $14.5 million from $13.3 million during the same period of the prior year. Its represents constant currency growth rate of 12%.

As we previously stated, we have expected for some time that constraints such as capitation and increasing market share in international markets with the results and modernization of our international growth rate. We have seen this throughout 2016 including the fourth quarter.

Gross profit for the fourth quarter of 2016 was $48.8 million or 69% gross margin as compared to $20.4 million or 61% gross margin in the same period of the prior year. Gross margins increased year-over-year primarily due to fundamental cost improvements and were consistent with our guidance for the fourth quarter.

As we continue to grow revenue, we additionally expect to expand gross margins by improving efficiency and further leveraging our manufacturing overhead. Operating expenses for the fourth quarter of 2016 were $55.1 million, an increase of 65% compared to the fourth quarter of 2015.

The increase in operating expenses was primarily driven by increased headcount and related personnel expenses, sales and marketing costs and investments in clinical trials and development activities. Legal expense in connection with the Boston Scientific litigation was $1.3 million for the quarter.

Net loss from operations for the period was $6.3 million compared to $13.1 million for the fourth quarter of 2015. Now, turning to the full-year of 2016 revenue was $228.5 million which represents growth of 228% as reported. U.S. revenue was a $173.3 million up 612% from $24.3 million in the prior year.

International revenue was $55.2 million up 22% from $45.3 million in the prior year. It represents a constant currency growth rate of 26%. Gross margins were 6% to 7% in 2016 compared to 60% in 2015. Operating expenses for 2016 were $176.2 million and increase of 70% compared to 2015.

On our third quarter earnings call, we anticipated that operating expenses for the full-year would end at approximately $170 million plus or minus several million dollars.

We ended the year of higher business forecast due to litigation cost, the expansion of our sales force and marketing activities, as well as an acceleration in spending on our R&D investments, which previously lagged our expectation. At the end of the fourth quarter of 2016, we had $276.4 million in cash, cash equivalents and short-term investment.

Turning to our outlook, we are providing guidance for 2017. We anticipate worldwide revenue for the fiscal year 2017 to be in the range of $310 million to $320 million. We would like to highlight some important factors to help ensure our U.S. launches to-date performance taken in the appropriate context.

At our size and scale we believe year-over-year growth to see appropriate way to evaluate our business relative to the field and we are impacted by seasonalities similar to our peers. In the fourth quarter SCS revenues in the U.S. are seasonally higher driven in part by patients using their deductibles at the end of the year.

The first quarter is typically down from the fourth quarter, while we expect strong year-over-year growth in the first quarter of 2017. On a sequential basis, we expected to be in line with the fourth quarter of 2016.

Additionally, similar to 2016, we expect that international revenue will be down in the first quarter of 2017on a sequential basis due to seasonal trends. As we have previously indicated our U.S.

revenue was driven primarily by hiring our limitation of fees on the [3Q] (Ph) for slow hiring in Q4 of 2015 and Q1 of 2016, has limited some of our upside potential in Q4 of 2016 and Q1 of 2017. We believe we have addressed this situation by leaning more heavily into hiring in the back half of 2016, as its reflected in our hiring numbers.

It is also worth noting that our mix of reps without prior SCS experience has increased, we are still projecting productivity in the range and average of 1.3 million to 1.5 million per rep after 12 to 15 months. To-date productivity has been positively impacted by the uptake of early adaptor accounts.

In 2017, we expect productivity to be more in line with our guidance. For gross margins in 2017, we expect to end the year at approximately 70% with progress towards this number during the year.

With regard to our operating expenses for 2017, we expect operating expenses to trend upward to a total of approximately $225 million to $235 million for the year. We plan to continue hiring experienced sales representative to support the rollout of HF10 therapy and plan to continue investing in our clinical trials and development activities.

Regarding profitability, many of you have seen the data, we presented at the JP Morgan and NANS conferences in January and have realized the opportunity to represents for our future. We intend to increase our investment in clinical trials and research development and therefore, we do not expect R&D to decline as a percentage of revenue in 2017.

Furthermore, we have hired and will continue to hire sales reps ahead of the revenue ramp. As a result, our metric for achieving profitability is no longer in the high $200 million to $300 million revenue run rate and is now expected to occur in the mid $300 million revenue run rate. And back to you Rami..

Thanks Andrew. So that will conclude our prepared remarks for today. And now we will open up the call for your questions..

[Operator Instructions]. Your first question comes from the line of Mike Weinstein with JP Morgan. Your line is open..

Good afternoon guys and congratulations on another strong quarter. I wanted to start with a couple of topics and just make sure we are kind of on the same page. The hiring pace over the back half for the year was obviously greater than we all expect to going into including this quarter you just reported.

You are being cautious relative to your commentary on the first quarter, just because of the seasonality of the business, but you have been hiring very aggressively and at has tended so far to be our best indicator of your outlook for the business and your optimism.

So do you want to just expand on that a little bit, the commentary about 1Q being sequentially flat revenues and then seasonality of the business where 1Q revenues are down versus just the aggressiveness for the hiring last three to six months? Thanks..

Thanks Mike. Really we keep emphasizing that takes a long time for a rep to actually move up the productivity scale, it’s not really linear. The first couple of quarters actually have very low revenue, the first quarter in the sales has not really essentially.

And it really does take until they have been in the field of good year before they are really conductive. So the people we hired in Q2 of 2016 really should start hitting their stride in Q2 of 2017.

So I think as I said in our prepared remarks, we expect some lead into the first quarter of 2017 of have somewhat of shortage of fees on the street at the present time and that’s why we have a pretty cautious outlook for Q1..

I think just to build on Andrew’s point Mike, the hiring in the fourth quarter of this 2016 is really to set us up for success with the backend and beginning of 2018 I think we obviously as we mentioned felt limited in the fourth quarter and somewhat in this first quarter.

In fact the slowdown and hiring at the end of 2015 and early 2016 and certainly don’t want to have to go through that again..

Okay, and let me just be clear on my question and you are effectively guiding to ahead of where the street is at but obviously this was another very strong quarter, so just trying to gage the commentary around the business.

Let me if I can just ask about competition, there was effectively a lot of noise around the competitive issues this past quarter on [indiscernible] every quarter but there was certainly this past quarter.

Can you just talk a little about what you are seeing competitively and if you could divide it in OUS, we obviously saw some slowdown this quarter versus U.S., anything new you want to add on the litigations that will be great as well. Thanks..

Thanks Mike, nothing on the litigation front, obviously our position has no comment as always.

In terms of competition, look it's an intensely competitors space, I think there is lot of noise and frankly miss information out there, it’s just something that we increasingly continue to battle and to a large degree our success obviously has merited from our competitors increasingly stronger responses right in terms of their campaigning and again misinformation.

So I wouldn’t say that there is anything particularly new that we are up against internationally or in the U.S., I would say that it's just more of the same and it just happens to be intensifying, I think as a direct result of our success..

And your next question comes from the line of David Lewis with Morgan Stanley. Your line is open..

Good afternoon, just a few quick ones. Andrew there is one thing in your prepared remarks that some of your competitors have talked about here in the last few weeks, but you didn’t mention in terms of the fourth quarter, first quarter dynamic.

So I wanted to get your thoughts, but you know NANS did come a month later, fourth to first quarter this year, some have talked about that creating greater surgical days in the fourth quarter versus quarter and could have been several surgical days.

Your peers have said that was some factor, is that kind of weighing on this fourth quarter, first quarter dynamic or is that just more noise in your view?.

I think at our growth rate that’s just noise, a few hours additionally here or there aren’t going to make much difference at our growth rates. If you are out there low growth rates thing like that matter, we haven’t got to that point yet..

Okay. And then maybe just one for you in international and I will come back to Rami to finish up.

International and you have been saying this for several years, this is a much tougher comp internationally here in the fourth quarter, but should we now think about the international business as sort of more kind of a low double-digit grower, is that the new way kind of a 10% to 15% type of growth business, is that the better way to think about this business going forward..

Yes we are kind of saying high single, low double, yes that’s where it is now..

Okay. And then Rami the big focus of NANS for you guys this year which is different than prior years was just really new market penetration. So I wonder if - I have talked to most doctors even, doctors that typically have been sort of competitively dominated doctors, there was lot of interest in cervical post the ULN data.

So a couple of things, what have you seen on cervical trialing, because you got this more feedback and we are getting to go back to the office and try cervical implanting. So what you have seen post NANS on cervical implanting post ULN and one of the next clinical next steps from an ID prospective for to build up ULN data.

Thanks and I'll get back in queue..

Thanks David. Look, I think it’s a little bit too early to call that. I would agree with you, I think there is a lot of interest in cervical. The interesting thing for us is we find that there is a lot of interest and it doesn’t always translate into volume.

I think there is enthusiasm, because these physicians are particularly pain positions are very patient centric kind of that’s why a lot of them have chosen to get out for example from anesthesiology into pain fellowships. And so even if they have a handful of patients, they might get really excited that they can finally help those patients.

But whether that translates into kind of broader volume, I think it’s a little too early for us to tell. In terms of next step, I think we talked about this previously that we are assessing the best regulatory and long-term reimbursement comp and we will certainly update the street as we make more progress on those ends..

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

Hi. Thanks and good afternoon. Can you hear me okay..

Yes probably. Hi Bob..

Great, good afternoon. So just to be clear on the Q1 guide, I’m sorry if I missed this. But consensus right now is down about $3 million a little over $67 million.

Is that kind of what you are referring, is that a good number or are you talking about even greater seasonality in the streets modeling currently?.

I mean just to reiterate what we said in this prepared remarks that we expect international to be a little bit down, the higher Q4 and when it comes to the U.S. that we expect to be roughly where we were in Q4..

Okay. All right. So all right so it sounds like the streets, where it needs to be or perhaps even a little conservative on Q1 relative to your thoughts there. So and then, I was just wondering if you could just talk a little bit more about some of the things we are hearing out of NANS.

I mean, we have been talking to some physicians and David was referring to this a minute ago. But one of the things we found time interesting was that especially on the upper limb part of ULN that doctors seeing a lot of demand and actually getting reimbursement. I’m curious, if you could just sort of comment on that as an opportunity in 2017.

R the docs, we are talking kind of one-off and maybe not representative of the broader community or is upper limb a big opportunity for you in 2017?.

Thanks Bob. Yes, I think upper limb is interesting and that you will find centers that tend to do relatively high volume of it, but it doesn’t necessarily broadly translate. So I think in that regard, there might be a little bit of sampling here, it depends on who you sample, you can wind up coming up with really small numbers or really big number.

So we do certainly see centers that have interest that are able to get reimbursement based on where they are and have a corresponding volume, but it doesn’t necessarily translate as broadly to say obviously the back pain opportunity..

I think you are going to NANS which is the leading tradeshow, so it is by [indiscernible] you have kind of more bleeding edge of failure profession there. So I think you should be very careful about extrapolating anything you hear on NANS..

And your next question comes from the line of Danielle Antalffy with Leerink Partners. Your line is open..

Hey. Good afternoon, guys. Thanks so much for taking the question and congrats on another great quarter.

Just a quick follow-up on the international performance and just wondering have you seen any change in competitive detailing, there has been some more noise about Boston Scientific actually having availability of high frequency internationally, are they doing anything different there as far as you can tell, and may be talk about some of the other competitors, is this really just a market driven sort of broader slowdown and is it more specific to Europe, versus Australia or is it everywhere?.

I think the fundamental issue there is really one of competition, just from personal experience know that you are running where the hospitals in Germany or hospitals in other country are just at the end of their budget, I mean it’s just they have a certain amount of money to spend and that’s the way their systems work.

And we have kind of reached that point. I think there is a lot more competitive activity in the primary cell part of the market, where Boston has introduce a new product and I think, lot of their progress internationally in that primary sell area, but that’s not really very applicable to us..

Okay that make sense.

Thanks for that, and then in the United States if we think about you sales force productivity your end, can you guys give any color on where you are relative to higher volume users and how penetrated you are into - I mean how penetrated into those account, but how many accounts do you cover at this point and how that translates into volume.

Can you give any color there or no?.

No we haven’t really gotten into as you know Daniel, I will say that even if we were to get into that, there are so much still Greenfield opportunity ahead of us in terms of territories where we haven’t even planted a flag yet, so one we haven’t gotten into it and two I'm not sure that would be the best way our viewing our business anyhow.

I think over and over I think we are stressing that really just come down to the [Fiona Street] (Ph) and that productivity that’s been applied into through way and its of seeing our business. And I think for simplicity and accuracy we will stick with that..

And your next question comes from the line of Dave Troncalli with JMP Securities. Your line is open..

Hey how are you guys. Just on the hiring process, I believe you have pretty hands on process and I wonder if you just kind remind us of that, I know you didn’t want to give a specific number but, there is 100 given sort of the process you are using now on an annual basis.

Seem like sort of the illumining factors or something to that magnitude or is there a way that you can accelerate your process..

I think we have accelerated our process Dave, I think we feel pretty good about it. You have to understand that so going back, pre launch literally our full-time job to some degree was just hiring.

As we actually start to run our business hiring becomes one function on ones many in terms of delivering the results that you are seeing here, not just the commercial results, but the results there we are delivering from an R&D, clinical, et cetra prospective.

So I believe with that context, we have seriously accelerated our hiring in that we are able to match launch level hiring while delivering on a multifaceted business, I think an exceptional level.

So we feel very good about that and I'm not sure that we can, I mean we are certainly competitive, so we will do our best, but not sure there is a lot more we can squeeze out to get..

You got to keep yourself dirty. Just one more, clearly it’s not having an impact on your revenue ramp but to the extent that you are willing to share any updates on the insurance front..

No update at this time, we do continue to work on those, with those Blue Cross, Blue Shield plans that are holding out and look I will stress again that we believe we have the best available therapy for patients for chronic pain patients and we believe that would be a benefit to their covered population to have this therapy available.

So we will continue to certainly push and make progress along those lines..

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

Good afternoon, it’s actually Matt Henriksson in for Joanne. Our first question is with regards to the Paddle leads and as you guy s are doing your controlled rollout.

How should we look at the 2007 guidance especially in the second half of the year?.

You should look at as they guidance for the year. That incorporates everything that we know what we set the guidance.

Remember for us, we are not deviating from our sales core strategy which Andrew and I both mentioned in that involves making sure that we are set-up to provide the best support for our physician customers and our patients and the power will be incorporated in the same way that we have continued to rollout the product over the past two years.

So we feel like that is inclusive certainly of the guidance provided..

Okay. And then my follow-up question is as we are getting to $300 million for 2017 in that guidance range.

Are you guys going to need to sit down and start revaluating your third-party manufacture relationship as the revenue ramp continues to grow?.

No. I think one of the advantages of the way we are set-up is that we are using high volume manufactures to where we represent very small part of their capacity. So the beauty that I like to think and our strategy to-date has been the flexibility of our manufacturing, our outsourcing strategy.

And it’s worked very well today and we continue to have confidence in it..

And to your next question comes from the line of Larry Biegelsen with Wells Fargo. Your line is open..

Hey guys. Thanks for taking the question. Let me ask one on the Paddle lead and one on the competition.

So just on the Paddle lead because you confirmed that you are not supplying constrained are there accounts that have explicitly told you they are interested in using HF10, but would consider Senza until you offer a Paddle lead and just to ask another way is you backlog of docs you think that are waiting to trial HF10 with the new lead and I have one follow-up..

Sure. So from a supply perspective we continue to build inventory. So at this juncture, we certainly don’t, we will not have the capacity to cover the breadth of the market. But that will build as we sort of scale throughout the year.

And then in terms of the backlog question, I would think of it less as a backlog and more as there are physicians who - it will give us more opportunities to implant in some territory that we have talked about.

In certain territories the Paddle volume is sufficiently heavy, the rest would be constrained in those territories in terms of the accounts that they may be able to go to it. And we believe in certain territories it will be certainly advantageous in terms of account selection to have the Paddle available.

So we are looking forward to it from that perspective, but I wouldn’t say that that’s a nationwide sort of dynamic, but it’s certainly on a territory-by-territory dynamic that will be valuable at this..

Thanks Rami, and it seems like Abbot and Boston are marketing their respected devices ability to provide different types stimulation and kind of go back and forth between wave patterns.

You have a one size fits all approach with HF10, how do you address that, which positions you who want more options and why not give clinicians the options to you [tonic] (Ph) in the event that the patient doesn’t respond to HF10. Thanks for taking the questions..

It’s a great question. So the analogy I would like to make is that by give you remote control and put you in front of a television, you have a bunch of mediocre things that watch, you are probably going to have that remote and cycle through the channel, but if there is anything you particularly want to settle on.

But if I ask you to put something on that you actually fairly enjoy for me that would be [indiscernible]. I’m probably going to put down the remote and just watch it for a while.

So we have something that we believe is obviously and has been demonstrated to be clinically superior for a broad set of patients and given that therapy option, patients don’t have to cycle through. I think our competitors given that they generally have some optimal therapies available.

It make sense that the way the supplement bias to give a patient a number of different options than like cycle through and hopes of providing an overall satisfactory solutions. So that is one answer to the question and the other one is certainly HF10, it doesn’t work for every single patient despite having a very, very high success rate.

And so we do look at other opportunities and we don’t talk about them enough, we certainly have other programming algorithms and other ways that we can address patients who don’t initially respond.

And I do think that that’s something we increasingly from a sales and marketing prospective need to communicate and talk about, in order to inform physicians that it’s not just as simple as we have one therapy and there isn’t the opportunity and complexity in order to deal with the complex patient population..

Thanks for taking the questions guys..

Thank you..

And your next question comes from the line of Margaret Kaczor with William Blair. Your line is open..

Hi good afternoon guys.

First question for me is in terms of the number of sales reps and I believe you guys have historically guided to a long-term number may be in the mid 200, you are close to 200 right now, so how has that range change, why or why not and just as we look at 2017, should it flow to share comps of what you guys have done in 2016?.

In terms of the hiring correct, I think we have talked about this before, during the IPO, we haven’t really proven the market expansion component of our story. We certainly were confident in it but it was something that we can backup with data.

So we had set a conservative target and the way we communicated was we though our sales force would be, sort of at the bottom end of the range of our competitors.

I think now that we have fully demonstrated the backend component of our story, it’s clear that our sales force will be just a function of how much overall revenue we think and how much share and market expansion we can combine generating in this market.

And so we currently don’t have particular ceiling on that it’s just whatever revenue target or share number you think we can get to divided by the $1.3 million to $1.5 million..

And then should it flow in 2017 the comps in 2016 or again that’s not really how you guys are looking at it, its quality reps?.

We are looking at pretty significant opportunity ahead of us so we want to continue to hire as it makes sense. So I think for us we are as you know very analytical and data-driven company so we will continue to kind of monitor the progress through the year and hire accordingly..

Okay. And then just one more for me. You guys didn’t talk too much about the new nice guidelines and I understand it won’t be a big impact for you guys just given the size of the UK market.

But are there any other examples of conversations that you maybe had with other payers on evidence based medicine and how SCS maybe can be part of the solution for patients with neuropathic pain? Thanks..

Yes. I think we in our prepared remarks talked about how we been increasing some of the marketing and other resources in Europe that is something that we are actively working on, which is to talk to the national payers and take advantage of their emphasis on evidence-based medicine to try and advanced SCS as a therapy in this market.

But it takes a long time..

Thanks..

And your next question comes from the line of Suraj Kalia with Northland Securities. Your line is open..

Good afternoon, everyone. Thank you for taking my questions. So Rami, Andrew congrats on a great quarter. I know this question has been asked. So I don’t want to blab of the point, but let me ask from a different flavor, Rami if I could. The numbers I heard is 183 reps end of Q4 in the U.S. 69 OUS.

I mean we can do the math on the productivity part of the equation. I guess Rami, if you could answer from a slightly different perspective.

How many of these reps that you are a hiring are hardcore spinal cord stem reps? In other words they are taken from a Medtronic or BSX or whomever, versus your modulation therapies for other segments, urinary incontinence.

I guess what I’m try is, is there a threshold where the incremental reps coming in, you would have to kind of go into other segments hence your productivity curves can start flattening out. I hope my question make sense..

Thanks Suraj. So first just a correction it was 193 in the U.S., not 183.

So look we have spent a lot of time on the hiring process and what I will tell you is that what we are finding is that the prior experience is less predictive of success in our environment than basically just the drive to build something that competitiveness, the ability to sell the data and those sorts of factors.

So as we talked about the mix that of late has shifted to more non-previous SCS folks and I think that’s a reflection of this learnings and our focus on where the attributes that we feel lead to success versus just the particular background in SCS.

So I can’t really get into the breakdown for obvious competitive reasons, but hopefully that answer gives you a little bit of insight into our thought process on the matter..

And there are no further questions over the phone. I’ll turn the call back over to the presenters..

Great. Well, thank you very much for dialing in today and again we look forward to talk late..

Thank you. Operator And this concludes today’s conference call. You may now disconnect..