TREACE MEDICAL CONCEPTS, INC. Q2 FY2025 earnings call

• John Treace highlighted the transformational year for Treace, with a focus on meeting surgeon and patient needs and expanding the bunion solutions portfolio. The company launched 3 new best-in-class bunion correction systems and has a strategy to increase procedure volumes by penetrating existing customers' remaining bunion cases, attracting new surgeons, and leveraging new technologies. - Mark Hair reviewed financial results, noting revenue growth, margin details, reduced operating expenses, and cash usage trends. He also mentioned the upcoming Investor Day on September 3.

In the second quarter, revenue was $47.4 million, a 7% increase from the second quarter of 2024. Gross margin in Q2 2025 was 79.7% compared to 80.2% in Q2 2024. Total operating expenses were $54.7 million in Q2 2025, a 4% reduction from Q2 2024. Net loss in Q2 2025 was $17.4 million or $0.28 per share, an improvement of 18% from the prior year. Adjusted EBITDA loss for Q2 2025 was $3.6 million, a 58% improvement from Q2 2024. Cash, cash equivalents, and marketable securities were $69.3 million as of June 30, 2025.

• Reiterated 2025 revenue guidance of $224 million to $230 million, representing 7%-10% growth over the prior year. - Expecting breakeven adjusted EBITDA for full year 2025. - Anticipating cash usage to decrease by approximately 50% for 2025 versus 2024.

Q: Could you provide more quantitative commentary on surgeon profiles for the new 3 systems and if volume ramps will track similarly to Lapiplasty?

A: John Treace said they expect increasing volumes and revenue contribution from the new systems, targeting incremental new cases and osteotomy portion of surgeons' practices, focusing on penetrating the 1.1 million patient base.

Q: What's surgeon feedback on Lapiplasty Lightning and its impact on 2026 growth?

A: John Treace mentioned Lapiplasty Lightning is a significant advance, with limited market access release planned in Q4, seen as a growth engine for 2026.

Q: What's seen in the foot and ankle market and trends into July and August?

A: Mark Hair said Q2 played out as anticipated, growth back half weighted, with confidence in back half and full year, anticipating 10% growth in Q3 and step-up in Q4.

Q: Confidence in sustainable double-digit growth in 2026?

A: Mark Hair noted back half opportunities with new systems, experienced commercial team, and bunion season, expecting double-digit growth in back half of 2025, will provide more color on 2026.

Q: Interest in inorganic acquisitions to fill portfolio?

A: John Treace said they are opportunistically looking at inorganic opportunities and international expansion.

Q: Changes in appetite for foot and ankle elective procedures and seasonality?

A: Mark Hair said seasonally strongest quarter is Q4, no change in seasonality expected, cases tend to compress to Q4, and new products provide more opportunities in Q3 and Q4.