SI-BONE, Inc. Q2 FY2025 earnings call

• Strategy: Build a unique platform of solutions targeting challenging procedures and patients, with proprietary solutions improving outcomes and gaining clinical and reimbursement support.
• Revenue Growth: Worldwide revenue grew ~22%, U.S. revenue (95% of business) grew ~23% with 25% increase in procedure volumes. International markets saw successful launch of iFuse TORQ in Europe.
• Profitability: Third consecutive quarter of positive adjusted EBITDA, achieved cash flow breakeven in the quarter. Gross profit was $38.8 million, up 22.9%, gross margin 79.8% (expanded 80 basis points year-over-year).
• Key Priorities:
  • Innovation: Growth in SI joint dysfunction procedures, progress on new solutions (submitting 10-K application for new SI joint solution, planning 510(k) filing for third breakthrough device).
  • Physician Engagement: Record 1,440 U.S. physicians performing procedures, 25% year-over-year increase, revenue from trained residents/fellows grew 63% year-over-year.
  • Commercial Execution: U.S. commercial team delivered strong quarter, trailing 12-month revenue per territory $2.1 million (23% growth), hybrid commercial model effective.
  • Leadership: Tony Recupero to retire, Nikolas Kerr to become Chief Commercial Officer effective February 2026.

Worldwide revenue in the second quarter was $48.6 million, representing a 21.7% growth. U.S. revenue, accounting for 95% of the business, was $46.4 million, up 22.8%. U.S. procedure volume grew by 25%, driven by double-digit volume growth across all modalities. International revenue in the second quarter was $2.2 million, with the launch of iFuse TORQ in Europe impacting growth but showing potential for future revenue boosts.

• Updated full year revenue guidance: $195M-$198M (17%-18% year-over-year growth), up from previous guidance. Full year gross margin expected 78.5%-79%, up from 78%.
• Expect positive adjusted EBITDA for 2025. Q3 expected sequential decline ~4% (driven by seasonality, certifications, conferences), Q4 expected to ramp.

Q: Craig Bijou from Bank of America asked about the guidance step-down and cadence between Q3 and Q4.

A: Laura A. Francis and Anshul Maheshwari responded, noting strong first half growth, guidance reflects growth into tailwinds like TNT and TORQ, Q3 expected sequential decline ~4%, Q4 expected to ramp.

Q: Dave Turkaly from Citizens asked about interventional docs using products and Granite's outpatient potential.

A: Laura A. Francis responded, interventional docs are a strong growth driver, Granite has favorable reimbursement and distribution opportunities, with potential for more outpatient procedures.

Q: Young Li from Jefferies asked about surgeons ramping up and experience levels.

A: Laura A. Francis responded, procedural density strategy drives growth, average 3 years for physicians to ramp up, with higher procedures per surgeon from matured base.

Q: Matthew O'Brien from Piper Sandler asked about new product momentum and catalysts.

A: Laura A. Francis responded, broad-based growth in existing solutions and new products, Granite 9.5, TNT, and SI joint dysfunction showing strong growth, with new products in pipeline.

Q: Caitlin Cronin from Canaccord Genuity asked about surgeons engaging other portfolio products.

A: Laura A. Francis responded, halo effect between SI joint fusion and Granite, surgeons can be trained in both, deepening relationships.

Q: Matthew Park from Cantor Fitzgerald asked about TORQ rollout in Europe and capital deployment.

A: Anshul Maheshwari responded, TORQ launch in Europe showing potential, capital deployment focused on R&D, sales/marketing, and G&A with revenue growth outpacing OpEx.

Q: David Saxon from Needham & Company asked about active surgeons and training programs.

A: Laura A. Francis responded, 1,440 surgeons in Q2, ~12,000 target physicians, training programs engaging new and experienced doctors, with varying utilization ramps.

Q: Felipe Lamar from Truist Securities asked about gross margin compression in 2026.

A: Anshul Maheshwari responded, expecting gross margins to settle in 76%-77% range over medium term, with savings from initiatives offset by new product costs.