TREACE MEDICAL CONCEPTS, INC. Q3 FY2024 earnings call

• Third quarter results reflect execution to drive solid growth and improve operating leverage.
• Announced limited market release of Nanoplasty 3D MIS system for metatarsal osteotomy, aiming to expand presence in bunion market.
• Pipeline of R&D innovations loaded, poised to expand technology and procedure offerings through 2025 and beyond.
• Update on reimbursement: CMS released final 2025 Medicare payment rates, with increases for CPT code 28297 related to Lapidus Fusion and Lapiplasty procedures.
• Filed patent infringement and unfair competition suit against Stryker Corporation and its subsidiary, Wright Medical.

Third quarter revenue was $45.1 million, representing 11% growth over the third quarter of 2023. This growth was fueled by continued commercial execution and driven by product mix shift that resulted from increased adoption of newer technologies, such as Adductoplasty and SpeedPlate, continued strong demand for other complementary product offerings as well as increases in active surgeon users in the quarter.

• Revised full year 2024 revenue guidance to $204 million to $211 million, reflecting 9% to 13% growth over 2023 revenue.
• Continue to expect adjusted EBITDA improvement of approximately 50% compared to full year 2023.

All forward-looking statements are based upon current estimates and various assumptions. These estimates 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. All forward-looking statements are based upon current available information, and Treace Medical assumes no obligation to update these statements. Refer to SEC filings for detailed presentation of risks.

Q: On the new MIS osteotomy product, how do you feel about going to market without clinical data and能否获得与Lapiplasty相同的市场差异化？ A: John Treace responded that for Lapiplasty, they gathered clinical data over several years while building the business, and for Nanoplasty, they are committed to developing data sets, adding the rotational component of correction which has scientific evidence supporting better outcomes. Surgeon interest is high.

Q: On SpeedPlate rollout, supply availability for new design, and ceiling for utilization?

A: John Treace said SpeedPlate has been a game changer, percentage of fixation has grown beyond 40%, new larger design is in full supply and getting good uptake, new configurations will be well embraced.

Q: On CMS final reimbursement decision and margin impact?

A: Mark Hair said they are pleased with the final ruling, will continue to target 80% gross margin this year, minor fluctuations possible next year but not a change to gross margin profile.

Q: On trends in foot and ankle market and Q4 acceleration?

A: John Treace said they participate in the bunion surgery segment, saw softening in late Q1 and Q2, expect seasonal acceleration in bunion procedures in Q4.

Q: On updated guidance for 2024 and 2025 implications?

A: Mark Hair said Q3 was in line with projections, some variables like hurricanes led to maintaining Q4 guidance, and for 2025, will wait to see surgeon adoption of new systems before giving more guidance