Exhibit 99.1 SI-BONE, Inc. Reports Financial Results for the First Quarter 2024 Annual guidance increased to $164 million - $166 million, implying annual growth of ~18% - 20% SANTA CLARA, Calif. May 6, 2024 - SI-BONE, Inc. (Nasdaq:SIBN), a medical device company dedicated to solving musculoskeletal disorders of the sacropelvic anatomy, today reported financial results for the quarter ended March 31, 2024. First Quarter 2024 Financial Highlights (all comparisons are to the prior year period) Recent Operation ...

Financial Performance and Risks - The company has incurred significant operating losses since inception and expects to continue incurring losses in the future[12] - The company is highly dependent on revenue from the sale of a single family of products focused on sacroiliac joint stabilization, which could negatively affect financial results[12] - The company anticipates a significant portion of revenues will be derived from sales of the iFuse Implant System[16] - The company faces substantial risks and uncertainties that may cause actual results to differ materially from current expectations[18] Market and Competitive Environment - Prolonged inflation and supply chain disruptions could lead to delayed product launches, lost revenue, and decreased profit margins[12] - There is a risk of pricing pressure from competitors and changes in reimbursement policies that could impact revenue[12] - The company faces pricing pressure from competitors and changes in third-party coverage that may affect product sales[12] Product Development and Adoption - Future revenue growth is expected to come from new indications for use and additional product development[16] - If clinical trials for the iFuse Bedrock technique and related products do not show meaningful patient benefits, sales could be adversely impacted[12] - The company faces risks related to obtaining adequate coverage and reimbursement from third-party payors, which could hinder product adoption[12] - There is a risk that healthcare providers may not obtain adequate reimbursement for procedures using the company's products, potentially delaying adoption[12] Supply Chain and Regulatory Compliance - The company is dependent on a limited number of third-party suppliers, which poses risks to the supply chain and product availability[15] - The company relies on a limited number of third-party suppliers, and the loss of any of these suppliers could materially affect business operations[15] - The company must comply with extensive governmental regulations, and failure to do so could adversely affect operations[15] - The company must comply with extensive governmental regulations, and failure to do so could negatively impact business[15] Sales and Market Strategy - The company is focused on maintaining its sales team and training physicians to ensure continued demand for its products[16] - The company anticipates that market dynamics may shift procedures from hospitals to ambulatory surgical centers, affecting pricing strategies[12]

SI-BONE, Inc. (NASDAQ:SIBN) Q4 2023 Earnings Call Transcript February 26, 2024 4:30 PM ET Company Participants Saqib Iqbal - Senior Director of IR Laura Francis - CEO Anshul Maheshwari - CFO Conference Call Participants Craig Bijou - Bank of America Drew Ranieri - Morgan Stanley David Saxon - Needham & Company Sam Brodovsky - Truist Securities Caitlin Cronin - Canaccord Genuity Ross Osborn - Cantor Fitzgerald Operator Good afternoon and welcome to SI-BONE's Fourth Quarter 2023 Earnings Conference Call. At t ...

Financial Performance - Revenue for Q3 2023 was $34.014 million, a 28.8% increase from $26.432 million in Q3 2022[18] - Gross profit for Q3 2023 was $26.973 million, compared to $22.264 million in Q3 2022, reflecting a gross margin improvement[18] - Net loss for Q3 2023 was $10.022 million, an improvement from a net loss of $14.158 million in Q3 2022[18] - Net loss for the nine months ended September 30, 2023, was $32.353 million, a decrease from $50.081 million in the same period of 2022, representing a 35.3% improvement[25] - For the three months ended September 30, 2023, the net loss was $10,022,000, compared to a net loss of $14,158,000 for the same period in 2022, representing a 29.8% improvement[78] - The net loss per share, basic and diluted, improved to $0.25 in Q3 2023 from $0.41 in Q3 2022, indicating a 39.0% reduction in loss per share[78] Assets and Equity - Total current assets increased to $211.019 million as of September 30, 2023, up from $137.611 million at the end of 2022[16] - Total stockholders' equity rose to $173.600 million as of September 30, 2023, compared to $98.302 million at the end of 2022[16] - Cash and cash equivalents increased to $53.492 million as of September 30, 2023, compared to $20.717 million at the end of 2022[16] - Cash and cash equivalents at the end of the period were $53.492 million, up from $26.299 million at the end of September 2022, indicating a 103.5% increase[25] - Total stockholders' equity as of September 30, 2022, was $102.828 million, down from $134.420 million as of December 31, 2021, reflecting a decrease of 23.5%[22] Operating Expenses - Operating expenses for Q3 2023 were $38.142 million, up from $35.830 million in Q3 2022, driven by increased sales and marketing efforts[18] - Total stock-based compensation expense for the three months ended September 30, 2023, was $5,928,000, slightly up from $5,922,000 in Q3 2022[76] - Research and development expenses included $699,000 in stock-based compensation for Q3 2023, compared to $672,000 in Q3 2022, marking a 4.0% increase[76] Revenue Sources - Revenue from the United States was $32.3 million for the three months ended September 30, 2023, compared to $24.627 million in the same period of 2022, reflecting a growth of 31.3%[39] - International revenue accounted for less than 10% of total revenue, with $1.714 million for the three months ended September 30, 2023, down from $1.805 million in the same period of 2022[39] Product Development and Strategy - The company expects to continue diversifying its product mix and developing new revenue opportunities[11] - The company is focused on retaining and growing its sales team to meet product demand[11] - The company introduced new products including the iFuse Bedrock Granite in 2022, expanding its product line for minimally invasive surgical implants[27] Cash Flow and Financing - The company raised $83.671 million in net proceeds from a public offering of 3,775,000 shares at a price of $22.00 per share in May 2023[28] - The company reported a net cash used in operating activities of $16.416 million for the nine months ended September 30, 2023, an improvement from $34.880 million in the same period of 2022[25] - Future results may be impacted by macroeconomic factors, with uncertainties regarding liquidity and access to funding for capital needs[30] Marketable Securities and Debt - Total marketable securities as of September 30, 2023, amounted to $152.021 million, up from $84.575 million as of December 31, 2022[43] - As of September 30, 2023, the company's outstanding debt from the term loan was $36.0 million, an increase from $35.0 million as of December 31, 2022[60] - The effective interest rate for the First-Citizens Term Loan was 9.3% for the three months ended September 30, 2023, compared to 8.3% for the same period in 2022[64] Stock Options and Compensation - The company granted 1,204,086 RSUs with an average grant date fair value of $16.85 during the nine months ended September 30, 2023[72] - The company had outstanding stock options totaling 1,216,841 shares as of September 30, 2023, with a weighted average exercise price of $10.84[67] - The total outstanding common stock warrants decreased from 118,122 as of December 31, 2022, to 85,139 as of September 30, 2023, due to the exercise of warrants[77] - The total stock options outstanding decreased from 1,921,065 in Q3 2022 to 1,216,841 in Q3 2023, reflecting a 36.6% reduction[80] Credit Quality and Risks - The allowance for credit losses increased to $750,000 as of September 30, 2023, from $400,000 at the end of 2022, indicating a provision of $352,000 during the period[51] - The company did not recognize any credit losses related to its investments during the nine months ended September 30, 2023, indicating stable credit quality[43] - The company has not experienced any losses on its deposits of cash, cash equivalents, and marketable securities despite the closure of Silicon Valley Bank[29] - The company anticipates challenges related to supply chain management and regulatory compliance impacting future performance[14]

Financial Data and Key Metrics Changes - In Q3 2023, the company generated worldwide revenue of $34 million, a 29% increase compared to Q3 2022, with U.S. revenue reaching $32.3 million, reflecting a 31% growth year-over-year [11][38] - The adjusted EBITDA loss improved by 44% to $3.9 million from $6.9 million in the prior year, indicating a positive trend towards profitability [44] - The net loss for the quarter was $10 million, or $0.25 per diluted share, compared to a net loss of $14.2 million, or $0.41 per diluted share in the previous year, representing a 29% reduction in net loss [43] Business Line Data and Key Metrics Changes - The number of active U.S. surgeons exceeded 1,000 for the first time, with nearly 3,900 procedures performed in Q3 2023, marking a 30% growth in active surgeons compared to Q3 2022 [12][18] - U.S. procedure volume grew by approximately 34%, continuing a trend of over 30% growth for four consecutive quarters [38] - The average revenue per U.S. territory reached over $1.5 million, representing a 38% productivity gain over the previous year [17] Market Data and Key Metrics Changes - International revenue was $1.7 million, remaining nearly flat, with strong performance noted in France and improvements in the U.K. [39] - The company is focusing on revitalizing growth in Germany and the rest of Europe through expanded surgeon engagement [40] Company Strategy and Development Direction - The company aims to capitalize on a market opportunity of nearly 500,000 annual procedures, positioning itself for sustained revenue growth [13] - Investments in R&D and clinical research are prioritized to support long-term growth and progress towards breakeven [42] - The company is expanding its product portfolio and surgeon base, with a hybrid sales strategy that combines direct sales teams and third-party agents [15][16] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the business, citing record revenue and strong demand for their solutions despite industry seasonality [10] - The updated 2023 revenue growth guidance is set at 28% to 29%, reflecting strong performance and momentum [13][47] - Management noted that the trajectory of cash utilization has improved significantly, with cash used in operating activities down 53% year-to-date compared to the previous year [45] Other Important Information - The company has achieved a significant milestone with the introduction of new products like iFuse-TORQ and iFuse Bedrock Granite, which are expected to drive future growth [22][27] - The company has extended its patents on key products, enhancing its competitive position in the market [113] Q&A Session Summary Question: Can you quantify the impact of GLP-1 therapy on demand? - Management indicated that while there is potential for increased surgery-ready patients due to GLP-1 therapy, they do not foresee a significant downside risk to demand for their products [50][58] Question: What is the outlook for Q4 and 2024? - Management expressed optimism for Q4, citing strong demand trends and a record number of active surgeons, while guidance for 2024 will be provided in the next earnings announcement [62][64] Question: How is utilization holding up with the increase in active surgeons? - Management noted that utilization remains consistent, with an increase in active surgeons contributing to a stable number of procedures per surgeon [100] Question: What is the trend for gross margin and operating expenses? - Management stated that gross margin is expected to be around 80% for the year, with operating expenses growing mid-single digits, reflecting ongoing investments in growth [47][89]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark one) (State or Other Jurisdiction of Incorporation or Organization) OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from __________ to __________ Commission File Number: 001-38701 SI-BONE, INC. (Exact Name of Registrant as Specified in its Charter) 471 El Camino Real, Suite 101, Santa Clara, California 95050 (Address of principal executive offices) ( ...

SI-BONE, Inc. (NASDAQ:SIBN) Q2 2023 Earnings Conference Call August 7, 2023 4:30 PM ET Company Participants Conference Call Participants Operator Good afternoon, and welcome to SI-BONE's Second Quarter Earnings Conference Call. At this time, all participants are in listen-only mode. We will be facilitating a question-and-answer session towards the end of today’s call. As a reminder, this call is being recorded for replay purposes. And I would now like to turn the call over to Saqib Iqbal, Senior Director of ...

PART I [Financial Statements](index=6&type=section&id=Item%201.%20Financial%20Statements) This section presents SI-BONE, Inc.'s unaudited condensed consolidated financial statements for Q1 2023, detailing financial position, operations, and cash flows, showing revenue growth and a reduced net loss [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of March 31, 2023, total assets were **$149,076 thousand**, decreasing from **$157,552 thousand** at year-end 2022, primarily due to reduced short-term investments Condensed Consolidated Balance Sheets (in thousands) | Account | March 31, 2023 | December 31, 2022 | | :--- | :--- | :--- | | **Total Current Assets** | $128,401 | $137,611 | | **Total Assets** | **$149,076** | **$157,552** | | **Total Current Liabilities** | $16,628 | $21,178 | | **Total Liabilities** | **$55,117** | **$59,250** | | **Total Stockholders' Equity** | **$93,959** | **$98,302** | | **Total Liabilities and Stockholders' Equity** | **$149,076** | **$157,552** | [Condensed Consolidated Statements of Operations and Comprehensive Loss](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) For Q1 2023, revenue increased **46%** to **$32,708 thousand**, gross profit grew to **$26,784 thousand**, and net loss narrowed to **$11,125 thousand** or **($0.32) per share** Q1 2023 vs Q1 2022 Statement of Operations (in thousands, except per share data) | Metric | Q1 2023 | Q1 2022 | | :--- | :--- | :--- | | Revenue | $32,708 | $22,439 | | Gross Profit | $26,784 | $19,456 | | Loss from Operations | ($11,293) | ($16,868) | | Net Loss | ($11,125) | ($17,410) | | Net Loss Per Share | ($0.32) | ($0.52) | [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash used in operating activities for Q1 2023 improved to **$10,753 thousand**, while investing activities provided **$11,703 thousand**, ending the period with **$22,969 thousand** in cash Q1 2023 vs Q1 2022 Cash Flows (in thousands) | Cash Flow Activity | Q1 2023 | Q1 2022 | | :--- | :--- | :--- | | Net cash used in operating activities | ($10,753) | ($13,512) | | Net cash provided by (used in) investing activities | $11,703 | ($22,608) | | Net cash provided by financing activities | $1,205 | $169 | | **Net increase (decrease) in cash** | **$2,252** | **($36,090)** | | **Cash and cash equivalents at end of period** | **$22,969** | **$27,329** | [Notes to Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) This section details the company's business, accounting policies, debt structure, and stock-based compensation, focusing on minimally invasive surgical implants and revenue recognition - The company is a medical device firm specializing in a proprietary minimally invasive surgical implant system for sacroiliac joint fusion, with products including iFuse, iFuse-3D, iFuse-TORQ, and iFuse Bedrock Granite[25](index=25&type=chunk) Revenue by Geography (in thousands) | Region | Q1 2023 | Q1 2022 | | :--- | :--- | :--- | | United States | $30,450 | $20,367 | | International | $2,258 | $2,072 | | **Total** | **$32,708** | **$22,439** | - In January 2023, the company amended its loan agreement, borrowing **$36,000 thousand** to repay a previous **$35,000 thousand** facility and securing a new **$15,000 thousand** revolving credit facility[59](index=59&type=chunk) - The lender is now First-Citizens Bank & Trust Company following the failure of Silicon Valley Bank[59](index=59&type=chunk) Stock-Based Compensation Expense (in thousands) | Expense Category | Q1 2023 | Q1 2022 | | :--- | :--- | :--- | | Cost of goods sold | $137 | $123 | | Sales and marketing | $2,910 | $2,594 | | Research and development | $752 | $633 | | General and administrative | $2,395 | $2,157 | | **Total** | **$6,194** | **$5,507** | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=25&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Q1 2023 financial performance, highlighting **46%** revenue growth driven by case volumes and pricing, analyzing gross margin changes, operating expenses, and liquidity [Overview and Key Performance Indicators](index=25&type=section&id=Overview%20and%20Key%20Performance%20Indicators) This section outlines the company's focus on sacropelvic anatomy disorders, detailing key performance indicators and growth drivers including sales force expansion and new product launches - The company is focused on expanding its sales force, increasing surgeon engagement, launching new products, and improving operational efficiency to drive growth[88](index=88&type=chunk) U.S. Sales Force Composition | Role | March 31, 2023 | March 31, 2022 | | :--- | :--- | :--- | | Territory Sales Managers | 87 | 88 | | Clinical Support Specialists | 67 | 66 | | Third-party Sales Agents | 126 | 66 | - As of March 31, 2023, over **2,300** surgeons in the U.S. and over **900** surgeons outside the U.S. have been trained and have used the iFuse system[96](index=96&type=chunk) [Results of Operations](index=31&type=section&id=Results%20of%20Operations) Q1 2023 revenue increased **46%** to **$32,708 thousand**, driven by U.S. sales, while gross margin decreased to **82%** due to product mix and costs, and operating expenses rose **5%** Financial Performance Comparison (in thousands) | Metric | Q1 2023 | Q1 2022 | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Revenue | $32,708 | $22,439 | $10,269 | 46% | | Gross Profit | $26,784 | $19,456 | $7,328 | 38% | | Gross Margin | 82% | 87% | - | - | | Total Operating Expenses | $38,077 | $36,324 | $1,753 | 5% | - The increase in U.S. revenue was due to higher case volumes and improved domestic average selling prices[122](index=122&type=chunk) - Gross margin decreased due to procedure and product mix from newly launched implants with higher costs, as well as increased depreciation and freight expenses[123](index=123&type=chunk) [Liquidity and Capital Resources](index=33&type=section&id=Liquidity%20and%20Capital%20Resources) As of March 31, 2023, the company held **$86,000 thousand** in cash and marketable securities, expected to fund operations for 12 months, following a debt refinancing in January 2023 - The company had **$86,000 thousand** in cash and marketable securities as of March 31, 2023, and believes this is sufficient to fund operations for the next **12 months**[129](index=129&type=chunk)[131](index=131&type=chunk) - In January 2023, the company entered into an amended loan agreement, borrowing **$36,000 thousand** under a term loan maturing in 2027 and securing a **$15,000 thousand** revolver[133](index=133&type=chunk)[134](index=134&type=chunk) - The lender is now First-Citizens following the failure of SVB[134](index=134&type=chunk) Cash Flow Summary (in thousands) | Activity | Q1 2023 | Q1 2022 | | :--- | :--- | :--- | | Operating Activities | ($10,753) | ($13,512) | | Investing Activities | $11,703 | ($22,608) | | Financing Activities | $1,205 | $169 | [Quantitative and Qualitative Disclosures About Market Risk](index=36&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) As a "small reporting company," SI-BONE is not required to provide quantitative and qualitative disclosures about market risk - As a "small reporting company", SI-BONE is not required to provide quantitative and qualitative disclosures about market risk[146](index=146&type=chunk) [Controls and Procedures](index=36&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and procedures were effective as of March 31, 2023, with no material changes to internal control over financial reporting - Management concluded that as of March 31, 2023, the company's disclosure controls and procedures were effective[149](index=149&type=chunk) - No changes were made to the company's internal controls over financial reporting during the quarter ended March 31, 2023, that have materially affected, or are reasonably likely to materially affect, internal control[150](index=150&type=chunk) PART II-OTHER INFORMATION [Legal Proceedings](index=37&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in various legal actions in the normal course of business but reports no pending matters currently deemed material - The company is not presently a party to any material legal proceedings that would have a material adverse effect on the company if determined adversely[152](index=152&type=chunk) [Risk Factors](index=38&type=section&id=Item%201A.%20Risk%20Factors) This section outlines significant risks including operating losses, reliance on the iFuse product family, supply chain disruptions, regulatory challenges, and intellectual property and financial market risks [Risks Related to Business and Industry](index=39&type=section&id=Risks%20Related%20to%20Our%20Business%20and%20Our%20Industry) The company faces business and industry risks including significant operating losses with an accumulated deficit of **$368,200 thousand**, high dependence on the iFuse product family, and supply chain disruptions - The company has a history of significant operating losses, with a net loss of **$11,100 thousand** for Q1 2023 and an accumulated deficit of **$368,200 thousand** as of March 31, 2023[157](index=157&type=chunk) - The business is highly dependent on revenue from a single family of products (iFuse, iFuse-3D, iFuse-TORQ, iFuse Bedrock Granite), making it vulnerable to market shifts or issues with this product line[194](index=194&type=chunk) - The company faces risks from prolonged inflation and supply chain disruptions, which could lead to higher costs, lost revenue, and decreased profit margins[160](index=160&type=chunk)[161](index=161&type=chunk) - Maintaining adequate coverage and reimbursement from third-party payors is critical, and any negative changes could significantly harm sales[163](index=163&type=chunk) [Risks Related to Legal and Regulatory Environment](index=57&type=section&id=Risks%20Related%20to%20Our%20Legal%20and%20Regulatory%20Environment) The company faces significant legal and regulatory risks, including compliance with FDA and foreign regulations, fraud and abuse laws, and challenges related to the new EU Medical Device Regulation (MDR) - The medical device industry is extensively regulated by the FDA and foreign agencies, and failure to comply with requirements for design, manufacturing, marketing, and sales could cause the business to suffer[236](index=236&type=chunk) - The company must comply with numerous U.S. federal and state fraud and abuse laws, including anti-kickback and false claims statutes, and failure to do so could result in significant penalties[247](index=247&type=chunk)[248](index=248&type=chunk) - Product modifications may require new 510(k) clearances or approvals, and a disagreement with the FDA on this could lead to marketing cessation or recalls[274](index=274&type=chunk) - The new EU Medical Device Regulation (MDR) introduces substantial changes and more stringent requirements, which will require a significant transition effort and could disrupt business in the EEA[288](index=288&type=chunk)[291](index=291&type=chunk) [Risks Related to Intellectual Property](index=71&type=section&id=Risks%20Related%20to%20Our%20Intellectual%20Property) The company's intellectual property risks include the expiration of core U.S. patents on the iFuse implant in November 2024, potential patent litigation, and challenges in protecting trade secrets - The company's core U.S. patents on the triangular shape of the iFuse implant expire in November 2024, which could allow competitors to introduce similar products[298](index=298&type=chunk) - The company may be subject to costly patent litigation, as the medical device industry is characterized by frequent infringement claims, which could divert management attention and financial resources[307](index=307&type=chunk) - The company relies on trade secrets and confidentiality agreements, which may not provide meaningful protection if breached or if competitors independently develop similar technology[302](index=302&type=chunk) [Risks Related to Ownership of Common Stock](index=74&type=section&id=Risks%20Related%20to%20Ownership%20of%20Our%20Common%20Stock) Risks related to common stock ownership include price volatility, fluctuating operating results, adverse banking industry developments, and restrictive covenants in the company's debt agreement - The company's stock price may be volatile due to factors like fluctuating operating results, regulatory actions, and general market conditions for healthcare stocks[309](index=309&type=chunk) - Adverse events in the banking industry, such as the failure of Silicon Valley Bank, could affect the company's operations and liquidity, although access to funds was restored[325](index=325&type=chunk)[326](index=326&type=chunk) - The company's term loan with First-Citizens contains covenants that restrict certain business activities, and a breach could lead to default and acceleration of debt[329](index=329&type=chunk)[331](index=331&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=80&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) There is nothing to report under this item for the period - Nothing to report[336](index=336&type=chunk) [Defaults Upon Senior Securities](index=80&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) There were no defaults upon senior securities during the period - None[337](index=337&type=chunk) [Mine Safety Disclosures](index=80&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not Applicable[338](index=338&type=chunk) [Other Information](index=80&type=section&id=Item%205.%20Other%20Information) The company violated a debt covenant on March 10, 2023, by transferring funds from SVB, which was later waived, but future credit access requires transferring accounts back to First-Citizens - The company violated a debt covenant on March 10, 2023, by transferring funds from SVB to another bank[339](index=339&type=chunk) - A waiver was obtained on March 24, 2023, but access to the revolving line of credit is restricted until cash management accounts are moved back to First-Citizens[339](index=339&type=chunk) [Exhibits](index=81&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including amendments to loan agreements and officer certifications

SI-BONE, Inc. (NASDAQ:SIBN) Q1 2023 Earnings Conference Call May 1, 2023 4:30 PM ET Company Participants Marissa Bych - IR, Gilmartin Group Laura Francis - Chief Executive Officer Anshul Maheshwari - Chief Financial Officer Conference Call Participants Craig Bijou - Bank of America Drew Ranieri - Morgan Stanley Young Li - Jefferies Sam Brodovsky - Truist Dave Turkaly - JMP Securities Kyle Rose - Canaccord Ross Osborn - Cantor Fitzgerald David Saxon - Needham & Company Operator Good afternoon, and welcome to ...

Part I [Business](index=8&type=section&id=Item%201.%20Business) SI-BONE specializes in proprietary minimally invasive surgical implant systems for sacropelvic disorders, marketed globally [Overview](index=8&type=section&id=Overview) **SI-BONE** focuses on minimally invasive surgical implant systems for sacropelvic disorders, with over **75,000 procedures** performed by year-end **2022** - The company specializes in minimally invasive surgical implant systems for sacropelvic anatomy, with key product lines including **iFuse**, **iFuse-3D**, **iFuse-TORQ**, and **iFuse Bedrock Granite**[20](index=20&type=chunk) - As of year-end **2022**, over **75,000 procedures** have been performed by more than **3,000 surgeons** across the U.S. and **38 other countries** since the first **iFuse** launch in **2009**[21](index=21&type=chunk) [Product and Applications](index=8&type=section&id=Product%20and%20Applications) The company's **iFuse** product line has evolved to include **3D-printed** and threaded implants, with the **Bedrock Granite** receiving **FDA Breakthrough Device Designation** and **NTAP** - The **iFuse** product line includes the original machined titanium implant (**2009**), the **iFuse-3D** with a proprietary **3D-printed** porous surface (**2017**), and the **iFuse-TORQ** threaded implant for trauma and **SI** joint applications (**2021**)[22](index=22&type=chunk)[24](index=24&type=chunk) - The **iFuse Bedrock Granite** implant, launched in May **2022**, is designed for sacroiliac fusion and sacropelvic fixation. It received **FDA Breakthrough Device Designation** and a **CMS New Technology Add-on Payment (NTAP)** effective October **1, 2022**[25](index=25&type=chunk) - The company also provides enabling technologies compatible with **Medtronic's** surgical navigation and **Mazor** robotic systems[26](index=26&type=chunk) [Market Opportunity](index=10&type=section&id=Market%20Opportunity) **SI-BONE** estimates its total U.S. addressable market at approximately **$3.0 billion**, segmented across sacroiliac joint dysfunction, adult deformity, and pelvic trauma U.S. Total Addressable Market Estimate | Market Segment | Estimated Annual Market Size | | :--- | :--- | | Sacroiliac Joint Dysfunction & Degeneration | ~$2.4 billion | | Adult Deformity & Degeneration | ~$250 million | | Pelvic Trauma | ~$350 million | | **Total** | **~$3.0 billion** | [Clinical Evidence](index=10&type=section&id=Clinical%20Evidence) The company's **iFuse** implants are supported by over **100 publications** and multiple clinical trials demonstrating safety, effectiveness, and economic utility - The company's products are supported by over **100 publications**, including two randomized controlled trials (**INSITE** and **iMIA**) and long-term follow-up studies (**LOIS**) showing sustained improvements in pain, disability, and quality of life for up to **five years**[32](index=32&type=chunk)[33](index=33&type=chunk)[34](index=34&type=chunk)[36](index=36&type=chunk) - The **SILVIA** trial, a randomized study of **iFuse-3D** in multilevel spine fusion, completed enrollment in **2022** with long-term results expected in **2024**[38](index=38&type=chunk) - The **SAFFRON** trial, a randomized study comparing **iFuse-TORQ** to non-surgical management for sacral fragility fractures, is currently enrolling with results anticipated in late **2024**[39](index=39&type=chunk) [Coverage and Reimbursement](index=13&type=section&id=Coverage%20and%20Reimbursement) Substantially all U.S. payors reimburse for sacroiliac joint fusion, with many providing exclusive positive coverage for **SI-BONE's** patented triangular implants - A significant number of U.S. payors provide exclusive positive coverage for **SI-BONE's** patented triangular titanium implants for sacroiliac joint fusion, based on the company's clinical evidence[43](index=43&type=chunk) [Healthcare Professional Training and Education](index=14&type=section&id=Healthcare%20Professional%20Training%20and%20Education) **SI-BONE** invests in educating healthcare professionals using a portable simulator, training over **2,200 U.S. surgeons** and **800 international surgeons** by year-end **2022** - The company utilizes **25 portable**, computer-based **SI-BONE SImulators** worldwide for surgeon training on **SI** joint fusion and **Bedrock** techniques without needing an operating room[47](index=47&type=chunk) Number of Trained Surgeons (Cumulative) | Region | Dec 31, 2022 | Dec 31, 2021 | | :--- | :--- | :--- | | U.S. | >2,200 | >1,800 | | International | >800 | >700 | [Sales and Marketing](index=15&type=section&id=Sales%20and%20Marketing) The company primarily uses a direct sales force in the U.S. and a mix of direct sales and distributors internationally, complemented by digital marketing efforts Sales Force Composition (as of Dec 31, 2022) | Region | Direct Employees (Managers & Specialists) | Third-Party Distributors | | :--- | :--- | :--- | | U.S. | 161 (88 managers, 73 specialists) | 105 | | International | 18 | 30 | [Competition](index=15&type=section&id=Competition) **SI-BONE** faces competition from larger medical device companies but differentiates itself through its unique implant design and extensive clinical evidence - Primary competitors in the U.S. are **Globus Medical, Inc.** and **Medtronic plc**. In Europe, they are **Globus Medical** and **SIGNUS Medizintechnik GmbH**[54](index=54&type=chunk) - The company differentiates itself through its triangular titanium implant design and extensive clinical evidence, including over **100 published papers**, which has resulted in exclusive reimbursement coverage from certain U.S. payors[55](index=55&type=chunk) [Intellectual Property](index=16&type=section&id=Intellectual%20Property) As of year-end **2022**, the company held **51 U.S.** and **16 foreign patents**, with key original **iFuse** patents expiring in November **2024** and **iFuse-3D** patents in September **2035** - As of year-end **2022**, the company held **51 issued U.S. patents** and **16 issued foreign patents**, with **32 U.S.** and **18 foreign applications** pending[56](index=56&type=chunk) - Key U.S. patents on the original **iFuse** triangular shape expire in November **2024**, while patents on the **iFuse-3D** design expire in September **2035**[56](index=56&type=chunk) [Regulation](index=18&type=section&id=Regulation) The company's products are subject to extensive **FDA** and international regulations, including **510(k)** clearance, **QSR**, fraud and abuse laws, and data privacy compliance - The company's products are regulated by the **FDA**, primarily through the **510(k)** premarket notification process for **Class II devices**[62](index=62&type=chunk)[64](index=64&type=chunk)[66](index=66&type=chunk) - The **iFuse Bedrock Granite** implant received **FDA breakthrough device designation** in November **2021** and **510(k)** clearance in May **2022**, which facilitated obtaining a **New Technology Add-on Payment (NTAP)** from **CMS**[88](index=88&type=chunk) - Internationally, the company must comply with regulations such as the **EU's Medical Device Regulation (MDR)**, the **UK's UKCA mark** requirements, and Swiss medical device ordinances[80](index=80&type=chunk)[91](index=91&type=chunk)[92](index=92&type=chunk) - The company is subject to federal and state fraud and abuse laws, including the **Anti-Kickback Statute** and the **Physician Payment Sunshine Act**, as well as data privacy laws like **HIPAA** in the U.S. and **GDPR** in the **EU**[95](index=95&type=chunk)[96](index=96&type=chunk)[100](index=100&type=chunk)[103](index=103&type=chunk) [Manufacturing and Supply](index=30&type=section&id=Manufacturing%20and%20Supply) **SI-BONE** outsources all manufacturing to third parties, primarily **rms Company (RMS)** as a sole source for key implants, requiring compliance with **FDA QSR** and **ISO 13485:2016** standards - The company relies on third-party manufacturers for all its products, with **rms Company (RMS)** being the primary and sole supplier for **iFuse-3D** and **iFuse-TORQ** implants[107](index=107&type=chunk)[108](index=108&type=chunk) - Manufacturing facilities are subject to **FDA's Quality System Regulation (QSR)** and international standards, and the company holds **ISO 13485:2016** certification for its Santa Clara and Gallarate locations[110](index=110&type=chunk)[111](index=111&type=chunk) [Human Capital Resources](index=30&type=section&id=Human%20Capital%20Resources) As of December **31, 2022**, the company had **357 employees**, emphasizing diversity, competitive compensation, and career development programs to manage attrition - As of December **31, 2022**, the company had **357 employees**, with a direct field sales organization of **161** in the U.S. and **18** in Europe[116](index=116&type=chunk) - The voluntary employee attrition rate was approximately **11%** in **2022**[116](index=116&type=chunk) - The company promotes diversity, with **four of nine board members** being women and two identifying as Asian American. It implemented a new career development program in **2022** to enhance employee retention[118](index=118&type=chunk)[124](index=124&type=chunk) [Risk Factors](index=35&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant risks including a history of operating losses, reliance on the **iFuse** product family, supply chain disruptions, and extensive regulatory and intellectual property challenges - The company has a history of significant operating losses (**$61.3M** in **2022**) and may not achieve or sustain profitability[132](index=132&type=chunk) - Business is highly dependent on revenue from the **iFuse** family of products, making it vulnerable to market shifts or issues with this single product line[164](index=164&type=chunk) - Risks include dependence on third-party payor coverage and reimbursement, which can be uncertain and subject to change, and pricing pressure from competitors and ambulatory surgical centers (**ASCs**)[137](index=137&type=chunk)[154](index=154&type=chunk)[157](index=157&type=chunk) - The company faces extensive governmental regulation (**FDA**, international bodies), and failure to comply with complex rules, including fraud and abuse laws, could result in severe penalties[211](index=211&type=chunk)[223](index=223&type=chunk) - Key patents for the original **iFuse** triangular shape expire in November **2024**, which may allow competitors to market similar devices[272](index=272&type=chunk) [Properties](index=69&type=section&id=Item%202.%20Properties) The company's headquarters and additional R&D/warehouse space are leased in Santa Clara, California, with smaller offices supporting European operations - The company leases its headquarters in Santa Clara, CA (approx. **21,848 sq. ft.**, lease expires May **2025**) and has additional leased facilities in California, Italy, Germany, and the **UK**[297](index=297&type=chunk) [Legal Proceedings](index=69&type=section&id=Item%203.%20Legal%20Proceedings) The company is not currently a party to any material legal proceedings that would have a significant adverse effect on its operations - The company is not currently involved in any material legal proceedings[298](index=298&type=chunk) Part II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=70&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company's common stock trades on **Nasdaq Global Market** under '**SIBN**', with no cash dividends ever paid or planned for the foreseeable future - Common stock is listed on the **Nasdaq Global Market** under the symbol "**SIBN**"[302](index=302&type=chunk) - The company has never declared or paid cash dividends and does not plan to in the foreseeable future[304](index=304&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=71&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) In **2022**, revenue grew **18%** to **$106.4 million**, but net loss widened to **$61.3 million** due to increased operating expenses, though liquidity is deemed sufficient for the next **12 months** [Impact of COVID-19 Pandemic](index=71&type=section&id=Impact%20of%20COVID-19%20Pandemic) The **COVID-19** pandemic continues to negatively impact revenues through case deferrals and disrupt the global supply chain for instruments and implants - The **COVID-19** pandemic has negatively impacted revenues through case deferrals and has caused disruptions in the global supply chain, leading to delays, product shortages, and rising costs for instruments and implants[312](index=312&type=chunk)[314](index=314&type=chunk) [Factors Affecting Results of Operations and Key Performance Indicators](index=72&type=section&id=Factors%20Affecting%20Results%20of%20Operations%20and%20Key%20Performance%20Indicators) Performance is driven by expanding solutions access, increasing surgeon penetration, and new product launches, supported by sales force growth and R&D investment - The U.S. sales force grew to **88 territory managers** and **73 clinical support specialists** by the end of **2022**, up from **85** and **65** respectively at the end of **2021**[319](index=319&type=chunk) - Average revenue per U.S. territory manager increased to approximately **$1.21 million** in **FY2022**, up from **$1.06 million** in **FY2021**[332](index=332&type=chunk) - The number of U.S. surgeons trained on **iFuse** grew from over **1,800** at **YE 2021** to over **2,200** at **YE 2022**[325](index=325&type=chunk) - R&D spending was **$13.6 million** in **2022**, representing **13%** of revenue, focused on new solutions and clinical trials like **SILVIA** and **SAFFRON**[328](index=328&type=chunk) [Results of Operations](index=77&type=section&id=Results%20of%20Operations) For **2022**, revenue increased **18%** to **$106.4 million**, but gross margin declined and operating expenses rose, leading to a wider net loss of **$61.3 million** Comparison of Operations (2022 vs 2021) | Metric | 2022 (in thousands) | 2021 (in thousands) | % Change | | :--- | :--- | :--- | :--- | | Revenue | $106,409 | $90,152 | 18% | | Gross Profit | $90,704 | $79,724 | 14% | | Gross Margin | 85% | 88% | -3 pts | | Total Operating Expenses | $150,313 | $131,394 | 14% | | Loss from Operations | ($59,609) | ($51,670) | 15% | | Net Loss | ($61,256) | ($56,572) | 8% | - The **$16.3 million** revenue increase was primarily driven by a **$16.0 million** rise in U.S. revenue due to higher case volumes from an expanding sales force and surgeon base[349](index=349&type=chunk) - Sales and marketing expenses increased by **$13.8 million (15%)** mainly due to higher employee-related costs and commissions from increased headcount and revenue[351](index=351&type=chunk) [Liquidity and Capital Resources](index=79&type=section&id=Liquidity%20and%20Capital%20Resources) As of December **31, 2022**, the company had **$97.3 million** in cash and marketable securities, with a net loss of **$61.3 million**, and refinanced its term loan in January **2023** Cash and Debt Position (Year-End) | Metric | Dec 31, 2022 | Dec 31, 2021 | | :--- | :--- | :--- | | Cash and Marketable Securities | $97.3 million | $147.0 million | | Outstanding Debt | $35.2 million | $35.0 million | | Accumulated Deficit | ($357.1 million) | ($295.8 million) | Cash Flow Summary | Cash Flow Activity | 2022 (in thousands) | 2021 (in thousands) | | :--- | :--- | :--- | | Net cash used in operating activities | ($41,655) | ($39,533) | | Net cash (used in) provided by investing activities | ($2,815) | $51,580 | | Net cash provided by (used in) financing activities | $2,197 | ($1,711) | - In January **2023**, the company refinanced its debt, repaying a **$35.0 million SVB** term loan and entering into a new agreement with **SVB** for a **$36.0 million** term loan and a **$15.0 million** revolving credit facility[364](index=364&type=chunk)[537](index=537&type=chunk) [Critical Accounting Policies, Significant Judgments, and Use of Estimates](index=83&type=section&id=Critical%20Accounting%20Policies%2C%20Significant%20Judgments%2C%20and%20Use%20of%20Estimates) Critical accounting policies involve significant judgments in revenue recognition upon procedure completion and valuing stock-based compensation using **Monte-Carlo** simulations - Revenue is primarily recognized upon completion of a surgical procedure and customer authorization, as this is when control of the product is transferred[374](index=374&type=chunk)[375](index=375&type=chunk) - The fair value of performance-based restricted stock units with market conditions is estimated using a **Monte-Carlo** simulation, a key area of management judgment[376](index=376&type=chunk) [Financial Statements and Supplementary Data](index=85&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) The consolidated financial statements, audited by **PricewaterhouseCoopers LLP** with an unqualified opinion, detail the company's financial position and results, highlighting revenue recognition as a critical audit matter [Report of Independent Registered Public Accounting Firm](index=86&type=section&id=Report%20of%20Independent%20Registered%20Public%20Accounting%20Firm) **PricewaterhouseCoopers LLP** issued an unqualified opinion on the financial statements, identifying U.S. implantation product sales revenue recognition as a critical audit matter - The auditor, **PricewaterhouseCoopers LLP**, issued an unqualified (clean) opinion on the company's consolidated financial statements[384](index=384&type=chunk) - The auditor identified Revenue Recognition for U.S. implantation product sales as a **Critical Audit Matter**, citing the high degree of auditor effort involved in testing these transactions[389](index=389&type=chunk)[390](index=390&type=chunk) [Consolidated Financial Statements](index=88&type=section&id=Consolidated%20Financial%20Statements) The financial statements show total assets of **$157.6 million** and a net loss of **$61.3 million** for **2022**, with stockholders' equity decreasing to **$98.3 million** Consolidated Balance Sheet Data (in thousands) | Account | Dec 31, 2022 | Dec 31, 2021 | | :--- | :--- | :--- | | **Assets** | | | | Cash, cash equivalents & short-term investments | $97,290 | $146,979 | | Accounts receivable, net | $20,674 | $14,246 | | Inventory | $17,282 | $11,498 | | **Total Assets** | **$157,552** | **$190,506** | | **Liabilities & Equity** | | | | Total current liabilities | $21,178 | $16,890 | | Long-term borrowings | $35,171 | $34,973 | | **Total Liabilities** | **$59,250** | **$56,086** | | **Total Stockholders' Equity** | **$98,302** | **$134,420** | Consolidated Statement of Operations Data (in thousands) | Account | Year Ended Dec 31, 2022 | Year Ended Dec 31, 2021 | | :--- | :--- | :--- | | Revenue | $106,409 | $90,152 | | Gross Profit | $90,704 | $79,724 | | Loss from Operations | ($59,609) | ($51,670) | | Net Loss | ($61,256) | ($56,572) | | Net Loss Per Share | ($1.79) | ($1.71) | [Notes to Consolidated Financial Statements](index=92&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) Notes detail revenue recognition, debt agreements including a January **2023** refinancing, significant **NOL** carryforwards with a full valuation allowance, and a related party joint development agreement - The majority of revenue is recognized upon completion of the surgical procedure and customer authorization, net of any rebates or discounts[434](index=434&type=chunk) - As of Dec **31, 2022**, the company had a **$35.0 million** term loan with **SVB**, which was refinanced in January **2023**. The loan is secured by substantially all company assets except intellectual property[483](index=483&type=chunk) - As of Dec **31, 2022**, the company had federal and state **Net Operating Loss (NOL)** carryforwards of **$298.6 million** and **$238.7 million**, respectively. A full valuation allowance is maintained against these deferred tax assets[521](index=521&type=chunk) - The company has a joint development agreement with **SeaSpine**, a related party, for a next-generation device, involving reimbursement payments and future royalties[533](index=533&type=chunk)[534](index=534&type=chunk)[535](index=535&type=chunk) [Controls and Procedures](index=118&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that disclosure controls and internal control over financial reporting were effective as of December **31, 2022**, with no auditor attestation required as a smaller reporting company - Management concluded that as of December **31, 2022**, the company's disclosure controls and procedures were effective at the reasonable assurance level[545](index=545&type=chunk) - Management concluded that internal control over financial reporting was effective as of December **31, 2022**. An auditor's attestation report was not included as the company is exempt as a "smaller reporting company"[546](index=546&type=chunk) Part III [Directors, Executive Compensation, Security Ownership, and Principal Accountant Fees](index=119&type=section&id=Item%2010%2C%2011%2C%2012%2C%2013%2C%2014) This section incorporates information on directors, executive compensation, security ownership, and principal accountant fees by reference from the forthcoming **2023 Proxy Statement** - Information for **Items 10 (Directors, Executive Officers and Corporate Governance), 11 (Executive Compensation), 12 (Security Ownership), 13 (Certain Relationships and Related Transactions)**, and **14 (Principal Accountant Fees and Services)** is incorporated by reference from the company's **2023 Proxy Statement**, to be filed within **120 days** of the fiscal year-end[551](index=551&type=chunk)[553](index=553&type=chunk)[554](index=554&type=chunk)[555](index=555&type=chunk)[556](index=556&type=chunk) Part IV [Exhibits and Financial Statement Schedules](index=120&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This section lists all exhibits filed with the **10-K**, including corporate governance documents, material agreements, and various certifications - This section provides an index of all exhibits filed with the **10-K**, including corporate governance documents, material agreements (such as the loan agreement with **SVB** and manufacturing agreement with **rms Company**), and executive compensation plans[559](index=559&type=chunk)[560](index=560&type=chunk)[563](index=563&type=chunk)