TREACE MEDICAL CONCEPTS, INC. Q1 FY2025 earnings call

• John Treace mentioned starting 2025 with solid financial results and progress on the strategy to be a comprehensive bunion solutions company. Revenue grew 3% in Q1 2025. The company has over 3,100 surgeon users, treated over 130,000 patients, and is the dollar share leader in the U.S. bunion market. - Upcoming commercialization of new bunion systems: nanoplasty, percuplasty 3D MIS osteotomy systems, and SpeedMTP MTP fusion system. Positive feedback from surgeons on limited market releases and strong turnouts at Bunion Masters labs. - New technologies: IntelliGuide PSI for patient-specific pre-op planning, SpeedPlate MicroQuad for dynamic fixation, Speed Aiken for Aiken osteotomies. Launching new sterile instruments in the back half of 2025. - Next-gen lapoplasty platform (lapoplasty lightning system) to launch late in the year.

In the first quarter of 2025, revenue was $52.6 million, a 3% increase over the first quarter of 2024. Adjusted for one less selling day, growth was 4.5%. Gross margin in Q1 2025 was 79.7% compared to 80.2% in Q1 2024. Total operating expenses in Q1 2025 were $57.5 million, down from $59.9 million in Q1 2024. Net loss in Q1 2025 was $15.9 million ($0.25 per share) compared to a net loss of $18.7 million ($0.30 per share) in Q1 2024. Adjusted EBITDA loss in Q1 2025 was $3.8 million, an improvement of 54% from $8.3 million in Q1 2024.

• Reiterated 2025 revenue guidance of $224 million to $230 million, representing 7%-10% growth over the prior year. - Anticipate most substantial growth in the fourth quarter. - Expect breakeven adjusted EBITDA for full year 2025 and cash burn to decrease by approximately 50% vs 2024. - Tariff exposure is expected to be immaterial in 2025 and 2026 as more manufacturing moves to the U.S.

• Limited tariff exposure: Some inventory is manufactured in Europe and subject to tariffs, but estimated to have an immaterial impact on cost of goods sold in 2025 and remain immaterial in 2026 as more manufacturing moves to the U.S.

Q: Izzy McMahon asked about positioning in the market after launching new osteotomy products and ability to navigate competition.

A: John Treace said not much has changed on the competitive front, lapoplasty remains superior, and they are well-positioned with new innovative bunion technologies.

Q: Lily Lozada asked about Q2 cadence and lapoplasty vs new products.

A: Mark Hair said Q2 growth is expected to be consistent with Q2 2024, and John Treace mentioned variability in procedure timing and that new products will help penetrate more cases. They expect minimal cannibalization as new products target surgeons with different preferences.

Q: Felipe asked about AS reimbursement and SpeedPlate.

A: John Treace said it's early to tell the impact of AS reimbursement, but SpeedPlate expands the addressable TAM, converts traditional fixation to its technology, and has new launches like MicroQuad and Speed Aiken.

Q: Jaina Francis asked about assumptions for guide and EBITDA breakeven.

A: Mark Hair said the guide midpoint is comfortable, top end depends on faster adoption of new products. For EBITDA breakeven, they are managing expenses, seeing efficiencies, and looking for greater efficiencies in sales/marketing and R&D.