TELA Bio, Inc. Q2 FY2025 earnings call

Management Statement and Operational Highlights

• Quarterly Performance: Q2 2025 set a revenue record exceeding $20 million. OviTex and OviTex PRS portfolios are scaling. LIQUIFIX non-penetrating fixation technology saw 121% year-over-year revenue growth with contracts secured with major GPOs. OviTex IHR SKUs revenue grew 322% year-over-year since April 2024.
• New Appointments: Jeff Blizzard appointed President, bringing MedTech experience and European market expertise. European sales grew 25% over Q2 2024. Secured a 4-year framework agreement with the NHS in England.
• Clinical Impact: Key publications and surgeon presentations highlighted OviTex's value. A patient case example showed improved quality of life post-abdominal wall reconstruction with OviTex.
• Sales Strategy: Shift to patient and outcome-centric partnership. Optimizing field organization, launching educational initiative for teaching hospitals, and Greg Firestone leading global market access team to enhance market access.

Segment Performance

• OviTex: Revenue grew 12% year-over-year, with unit sales increasing 17%. From launch through July, over 73,000 units sold in the U.S. and Europe for hernia repair and abdominal wall reconstruction.
• OviTex PRS: Revenue grew 53% year-over-year, unit sales grew 40%. Over 16,000 units sold in the U.S. from launch through July for plastic and reconstructive surgery.

Guidance

• Revenue: Reiterated full-year 2025 guidance of $85 million to $88 million, representing 23%-27% growth over 2024.
• Cadence: Historical cadence with second half of the year heavier than the first half. OpEx expected to be largely flat quarter-to-quarter, with revenue growth driving leverage to the bottom line.

Risks

• Market Dynamics: Changes in surgical procedural volumes, regulatory environment, and sales/marketing strategies could materially impact results.
• Competition: Larger competitors have advantages in contracting/bundling, but TELA's agility and clinical consultation capabilities are key advantages.

Question and Answer

• Q: Update on sales force headcount and guidance cadence A: Ended Q2 with 69 territory managers and 25 account specialists, aiming for 76 territory managers. Cadence is similar to historical, with second half of the year typically heavier than the first half.
• Q: Details on OviTex PRS growth A: Driven by new large long-term resorbable PRS products and clinical data. Clinical data from 350-400 PRS patients in presentations is propelling growth, with more products coming in the back half of 2026 and early 2027.
• Q: Confidence in reiterating guidance A: Natural back weighting in Q4 due to factors like health savings account usage, surgeon/patient year-end goals, and holiday scheduling for surgeries. High productivity of current sales reps and new hires ramping up contribute to confidence.
• Q: Educational initiative for teaching hospitals A: Using third-party MedScout to identify key teaching hospital programs, with a roster to be refined in Q3 to implement the educational strategy.