TREACE MEDICAL CONCEPTS, INC. Q4 FY2024 earnings call

• Closed 2024 and started 2025 with a focus on executing on the agenda to address bunion needs with an expanding portfolio. - Over 3,100 surgeon customers with a growing suite of technologies. - Lapiplasty system is the dollar share leader in the U.S. bunion market with over 120,000 patients treated. - Introduced new technologies: Adductoplasty, Mini-Adductoplasty, Nanoplasty, Percuplasty, and SpeedMTP to address different bunion classes. - Growth driven by commercial execution, product mix shift, increased adoption of newer technologies, and more active surgeon users.

Fourth quarter revenue was $68.7 million, representing a 10.4% growth over the fourth quarter of 2023 and falling within the previously-announced preliminary Q4 results range of $68.4 million to $68.8 million. Full-year 2024 revenue was $209.4 million, a 12% increase over 2023. The Lapiplasty system leads in the U.S. bunion market with over 120,000 patients treated since late 2015. New technologies like Adductoplasty, Mini-Adductoplasty, Nanoplasty, Percuplasty, and SpeedMTP are part of the portfolio. Gross margin in Q4 2024 was 80.7% compared to 81.6% in Q4 2023, and full-year 2024 gross margin was 80.4% vs. 81.2% in 2023, driven by product mix shift and inventory provisions.

• Full-year 2025 revenue guidance: $224 million to $230 million, representing a 7%-10% increase over 2024 revenue. - Expect break-even adjusted EBITDA for full-year 2025. - Q1 2025 is a tough comp, with higher growth anticipated in the back half of 2025 as new products are ramped up and more surgeons are trained.

• Forward-looking statements involve material risks and uncertainties that could cause actual results to differ from expectations. - Impact of competitive landscape, including developments like the Zimmer-Paragon deal, which may affect market dynamics.

Q: Ryan Zimmerman asked about the cadence of revenue through 2025, specifically if Q1 2025 would be down and about product pipeline impact on ASPs, volume, and cannibalization.

A: Mark Hair responded that Q1 2025 is a tough comp, but post-Q1, there's opportunity for higher growth, and John Treace mentioned the comprehensive portfolio working in harmony with natural guardrails around cannibalization.

Q: Lily Lozada asked about profitability components and balancing leverage with growth, and about early feedback on new products and competitive dynamics.

A: Mark Hair discussed leverage from a more experienced sales force, and John Treace mentioned positive early feedback on new products and surgeons returning to Lapiplasty in Q4.

Q: Kallum Titchmarsh asked about the Zimmer-Paragon deal and its impact.

A: John Treace stated they are focused on their business and will see how the deal plays out.

Q: Richard Newitter asked about clinical outcomes of osteotomy solutions vs. traditional products and Q1 guidance.

A: John Treace discussed the three-plane correction philosophy in their osteotomy solutions, and Mark Hair talked about Q1 being a tough comp with higher growth expected later.

Q: Danielle Antalffy asked about surgeon adoption of osteotomy offerings and broader foot/ankle opportunities.

A: John Treace mentioned targeting 200 new surgeons, and discussed the company's R&D pipeline and focus on core bunion and midfoot markets.

Q: Ben Haynor asked about osteotomy utilization and direct-to-patient marketing.

A: John Treace and Mark Hair discussed initial focus on surgeons primarily doing osteotomies and opportunities for direct-to-patient marketing adjustments as new technologies gain traction