TELA Bio, Inc. Q3 FY2025 earnings call

• Revenue growth: Q3 2025 marked 9% year-over-year growth, driven by existing customer adoption and new accounts, with international sales up 9%.
• Operational investments: Invested in sales organization, improved sales and marketing spends as a percentage of revenue (73.6% in Q3).
• Key milestones: Achieved 100,000 implantations of OVATEX and OVATEX PRS globally; 3 scientific abstract publications for OviTex PRS; enrollment in HIDAL study; commercial progress in Europe (NHS finance sign-off) and US (new/expanded contracts with 835 hospitals).
• Board additions: Welcomed Betty Jo Rocio and Bill Plavonic, bringing market access strategy and investor/med tech experience insights.

Reported revenue for the quarter was $20,700,000, representing 9% growth over the prior year. Growth was fueled by stronger adoption across existing customer base and new accounts, driven by demand for OVATEX reinforced tissue matrix and OVATEX PRS portfolios. International sales grew 9% over the prior period, driven by increased traction in The UK and early progress from the commercial launch of the OviTex IHR in Europe. Revenue from OviTex grew 6% and PRS grew 12% year-over-year. OVATEX unit sales grew 22% and PRS unit sales grew 3% for the quarter.

• Full year 2025 revenue expected to grow at least 16% over 2024.
• Full year 2026 revenue expected to grow at least 15% from 2025.
• Refinanced debt facility from $40,000,000 to $60,000,000 and completed $13,000,000 equity offering, bolstering balance sheet with incremental net cash and access to additional debt tranche.

• Macro conditions: Changes in surgical procedural volumes, impact of macroeconomic conditions.
• Regulatory environment: Uncertainties related to regulatory approvals and compliance.
• Sales and marketing: Risks associated with sales and marketing strategies and their effectiveness.
• Capital resources: Uncertainties around capital availability and its impact on operations.
• Operating performance: Risks related to overall operating performance and execution.

Q: What's the rationale for the debt refinancing and equity raise?

A: The debt refinancing was to get ahead of amortization and upsizing, and the equity raise was supported by investor interest. Combined, they add ~$26,000,000 in net cash and access to additional debt, providing financial firepower to reach profitability.

Q: Talk about lower guidance for 2025 and early 2026 growth expectations?

A: For 2025, 16% growth is expected, with 2026 expecting at least 15% growth from 2025. Budgeting process ongoing, with updates to follow on 4Q 2025 call.

Q: Details on Salesforce hiring and breakeven profile?

A: Hit 76 territory managers goal, with plan to reach 90+ in Q1. Breakeven expected in high $20M per quarter, with focus on OpEx efficiency and leveraging account specialist ranks.