Summary of Treace Medical Concepts Conference Call Company Overview - **Company**: Treace Medical Concepts (NasdaqGS:TMCI) - **Industry**: Medical Technology, specifically in bunion correction solutions - **Key Product**: Lapoplasty bunion correction system, generating over $200 million in annual revenue [4][11] Core Insights and Arguments Product Development and Market Position - Treace Medical has developed the Lapoplasty system and is now expanding its product offerings to address four categories of bunions: mild to moderate, moderate to severe, midfoot deformity, and great toe joint arthritis [6][10] - The company aims to penetrate the market more aggressively, targeting the 75% of bunion cases not currently addressed by their existing solutions [7][10] - New minimally invasive osteotomy solutions have been introduced to capture a larger share of the procedure market, which constitutes 70% of bunion surgeries [9][10] Financial Performance and Market Dynamics - The company reported a decline in demand for Lapoplasty, prompting a downward adjustment in revenue guidance for Q4 [12][13] - Despite flat revenue growth, there was mid-single-digit growth in bunion procedure volume in Q3, indicating underlying market vitality [14][32] - The average selling price (ASP) of new products is lower than Lapoplasty, which is affecting overall revenue growth [15][16] Customer Adoption and Training - 20% of the current customer base has adopted new technologies, with efforts to increase this to 50% over time [16][17] - Surgeons have reported strong demand for training events, indicating a positive reception of new products [24][25] Competitive Landscape and Innovation - Treace Medical holds a strong patent position and focuses on rapid innovation to maintain a competitive edge [28][29] - The company emphasizes the importance of surgeon experience and outcomes, which is central to their product adoption strategy [30] Market Potential and Addressable Market - The total addressable market (TAM) for bunion procedures is estimated at $5 billion, with 1.1 million symptomatic surgical candidates and 450,000 procedures performed annually [37][39] - The company believes that the market for bunion surgeries is stable, with a significant patient base still seeking treatment [39][40] Operational Efficiency and Profitability - Treace Medical has reduced cash burn by approximately 45% compared to the previous year and is focused on improving profitability through cost management [64][66] - The company aims to maintain high gross margins (in the high 70% range) despite introducing new products [59][62] Future Outlook and Growth Opportunities - The company is optimistic about the adoption of new products and the potential for increased procedure volumes [80] - Treace Medical is exploring the integration of AI technologies in their offerings, such as patient-specific instrumentation for surgeries [84][88] Other Important Insights - There is a noted shift in patient scheduling behavior, with many deferring elective bunion surgeries, impacting overall procedure volumes [42][44] - The company is well-positioned for outpatient and ASC settings, with favorable reimbursement changes expected to drive growth [49][50] - Treace Medical is actively seeking to expand its sales force to capitalize on the growing market opportunities [55][56] This summary encapsulates the key points discussed during the conference call, highlighting Treace Medical's strategic initiatives, market dynamics, and future growth potential.

Core Insights - Treace Medical Concepts, Inc. is participating in upcoming investor conferences, highlighting its engagement with the investment community [1][6] - The company focuses on advancing surgical treatments for bunions and related midfoot deformities, addressing a significant market need [4] Company Overview - Treace Medical Concepts is a medical technology company aiming to improve the standard of care for bunion surgeries, which affect approximately 65 million Americans, with an estimated 1.1 million being surgical candidates annually [4] - The company has developed the patented Lapiplasty 3D Bunion Correction System, which addresses the root cause of bunions by correcting deformities in three planes and stabilizing the affected joint [4] - Treace has introduced additional systems such as the Adductoplasty Midfoot Correction System and SpeedMTP™ Rapid Compression Implant, expanding its offerings for various bunion and midfoot deformities [4] Upcoming Events - Treace will participate in the UBS Global Healthcare Conference on November 10, 2025, and the Stifel 2025 Healthcare Conference on November 11, 2025, indicating its proactive approach to investor relations [6]

Core Insights - Premarket trading is showing notable activity with significant price movements indicating potential trading opportunities before the market opens [1] Premarket Gainers - Motorsport Games Inc. (MSGM) has seen a substantial increase of 122%, trading at $4.88 [3] - Globus Medical, Inc. (GMED) is up 27%, currently priced at $78.75 [3] - JFrog Ltd. (FROG) has risen by 26%, trading at $59.60 [3] - FIGS, Inc. (FIGS) is up 19%, with a trading price of $8.97 [3] - Organogenesis Holdings Inc. (ORGO) has increased by 18%, trading at $4.59 [3] - PureCycle Technologies, Inc. (PCT) is up 17%, currently priced at $11.31 [3] - Expedia Group, Inc. (EXPE) has risen by 16%, trading at $255.10 [3] - 10x Genomics, Inc. (TXG) is up 13%, currently priced at $14.72 [3] - Abacus Global Management, Inc. (ABL) has increased by 12%, trading at $5.95 [3] - GigaCloud Technology Inc. (GCT) is up 9%, currently priced at $27.80 [3] Premarket Losers - Davis Commodities Limited (DTCK) has experienced a significant decline of 65%, trading at $2.23 [4] - Eledon Pharmaceuticals, Inc. (ELDN) is down 46%, currently priced at $2.19 [4] - Treace Medical Concepts, Inc. (TMCI) has decreased by 35%, trading at $4.00 [4] - Energys Group Limited (ENGS) is down 30%, currently priced at $2.77 [4] - Intellia Therapeutics, Inc. (NTLA) has seen a decline of 27%, trading at $8.89 [4] - Fox Factory Holding Corp. (FOXF) is down 24%, currently priced at $16.60 [4] - Opendoor Technologies Inc. (OPEN) has decreased by 24%, trading at $4.94 [4] - AirSculpt Technologies, Inc. (AIRS) is down 21%, currently priced at $8.27 [4] - Power Solutions International, Inc. (PSIX) has seen a decline of 20%, trading at $64.25 [4] - ClearPoint Neuro, Inc. (CLPT) is down 17%, currently priced at $15.00 [4]

Core Insights - Treace Medical Concepts reported a quarterly loss of $0.26 per share, which was better than the Zacks Consensus Estimate of a loss of $0.28, representing an earnings surprise of +7.14% [1] - The company achieved revenues of $50.21 million for the quarter ended September 2025, exceeding the Zacks Consensus Estimate by 1.27% and showing an increase from $45.09 million in the same quarter last year [2] - Treace Medical Concepts has consistently surpassed consensus EPS and revenue estimates over the last four quarters [2] Financial Performance - The company has reported a loss of $0.26 per share compared to a loss of $0.25 per share a year ago, indicating a slight deterioration year-over-year [1] - The stock has underperformed, losing about 16% since the beginning of the year, while the S&P 500 has gained 15.6% [3] Future Outlook - The current consensus EPS estimate for the upcoming quarter is breakeven on revenues of $77.57 million, while for the current fiscal year, it is projected at -$0.81 on revenues of $227.1 million [7] - The Zacks Rank for Treace Medical Concepts is currently 3 (Hold), suggesting that the shares are expected to perform in line with the market in the near future [6] Industry Context - The Medical - Instruments industry, to which Treace Medical Concepts belongs, is currently in the top 35% of over 250 Zacks industries, indicating a favorable outlook compared to the bottom 50% [8] - Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact Treace Medical Concepts' stock performance [5]

Financial Data and Key Metrics Changes - The company reported third quarter revenues of $50.2 million, representing an 11% growth over the third quarter of 2024 and a 49% improvement in adjusted EBITDA compared to the prior year [4][17] - Gross margin decreased to 79.1% in Q3 2025 from 80.1% in Q3 2024 [17] - The net loss for the third quarter was $16.3 million, or $0.26 per share, which is a 6% increase in net loss compared to $15.4 million, or $0.25 per share, in Q3 2024 [18] - Year-to-date net loss decreased by 10% to $49.6 million compared to $55.2 million for the same period in 2024 [18] - Total liquidity as of September 30, 2025, was $80.6 million, down from $90.7 million at the end of Q2 [19] Business Line Data and Key Metrics Changes - The company has expanded its product portfolio to include three new bunion correction systems, aiming to address nearly 100% of surgeon preferences for bunion correction [5][6] - Case volume growth was mid-single digits compared to the prior year, but below original expectations, largely driven by new bunion systems with lower average selling prices (ASPs) [10] - Sales to a limited number of stocking distributors contributed approximately $6 million in the third quarter, which is not expected to recur at the same levels in future quarters [12] Market Data and Key Metrics Changes - A survey indicated that surgeon customers reported a 7% decrease in bunion surgical volumes year-to-date through October compared to the same period last year [11] - Broader economic conditions and softer consumer sentiment have led to deferrals of elective bunion procedures, impacting case volumes [8][11] Company Strategy and Development Direction - The company is transitioning from a single technology focus to a comprehensive bunion solutions provider, with plans to capture market share in minimally invasive osteotomies and MTP fusion markets [5][9] - The strategy includes enhancing the sales team's capabilities and expanding the product portfolio to drive market share gains and improve profitability [13][15] Management's Comments on Operating Environment and Future Outlook - Management expressed disappointment in the current growth trajectory and revised the full-year revenue outlook to $211 million-$213 million, reflecting only 1%-2% growth compared to 2024 [8][20] - The company plans to continue focusing on training existing customers and onboarding new surgeons to drive adoption of new products [13][22] Other Important Information - The company is taking actions to control costs and improve profitability, with a focus on reducing cash burn in 2026 [16][20] - The company has appointed a new Chief Commercial Officer and expanded its sales team to enhance market presence [6] Q&A Session Summary Question: Can you talk about the softness in the core Lapiplasty business? - Management acknowledged a trend towards minimally invasive osteotomies but emphasized the importance of Lapiplasty for significant bunion deformities, stating efforts to capture market share in this area [24][25] Question: What does the guidance imply for Q4 and 2026? - Management refrained from providing specific guidance for 2026 but expressed optimism about case volume growth and the reception of new products [26][27] Question: Has there been an acceleration in the shift away from Lapiplasty? - Management confirmed a trend towards minimally invasive procedures but highlighted ongoing efforts to capture market share with new technologies [30][31] Question: How will the company recoup deferred procedures next year? - Management indicated that improved consumer sentiment and enhanced engagement with new products would help capture a larger share of patients returning for surgery [38]

Financial Position - As of September 30, 2025, the company had cash and cash equivalents of $7.7 million and marketable securities of $49.7 million, with an accumulated deficit of $239.6 million[78]. - As of September 30, 2025, the company had cash and cash equivalents of $7.7 million and marketable securities of $49.7 million[112]. - The company has commitments for future lease payments totaling $20.8 million as of September 30, 2025[124]. - Goodwill remained unchanged at $12.8 million as of September 30, 2025, with no impairment identified[126]. Revenue and Growth - The company expects revenue growth in absolute dollars as it expands product offerings and physician training, although growth rates may fluctuate due to seasonality and macroeconomic factors[90]. - Revenue for the three months ended September 30, 2025 increased by $5.1 million, or 11.4%, compared to the same period in 2024, driven by an increase in bunion procedure kits sold[98]. - Revenue for the nine months ended September 30, 2025 increased by $9.5 million, or 6.8%, compared to the same period in 2024, with $11.0 million in sales to stocking distributors[105]. Expenses and Losses - The company anticipates operating at a loss in the near term and plans to finance operations through cash, marketable securities, and potential debt[85]. - Net loss for the nine months ended September 30, 2025 was $49.6 million, a decrease of $5.6 million, or 10.2%, compared to the same period in 2024[110]. - General and administrative expenses increased by $2.8 million, or 20.4%, for the three months ended September 30, 2025, largely driven by increased legal fees[103]. - Sales and marketing expenses increased by $1.6 million, or 5.0%, for the three months ended September 30, 2025, primarily due to higher commissions and surgical instrument expenses[100]. - Research and development expenses decreased by $0.3 million, or 5.7%, for the three months ended September 30, 2025, mainly due to a reduction in prototype purchases[101]. Cash Flow - Net cash used in operating activities for the nine months ended September 30, 2025 was $7.9 million, with a net loss of $49.6 million adjusted for non-cash charges of $37.1 million[117]. - Net cash used in operating activities for the nine months ended September 30, 2024 was $33.0 million, with a net loss of $55.2 million[118]. - Net cash provided by investing activities was $3.6 million for the nine months ended September 30, 2025, primarily from $49.6 million in sales and maturities of marketable securities[119]. - Net cash provided by investing activities was $32.0 million for the nine months ended September 30, 2024, primarily from $93.4 million in sales and maturities of marketable securities[120]. - Net cash provided by financing activities was $0.7 million for the nine months ended September 30, 2025, mainly from $1.6 million in proceeds from insurance premium financing[121]. Product Development and Competition - The company has introduced new products, including the Nanoplasty and Percuplasty Systems, and plans to release additional innovations in 2026, such as the Lapiplasty Lightning platform[82]. - The company is experiencing increased competition from minimally invasive osteotomy solutions, which may negatively impact growth rates and market share[80]. - The company expects R&D expenses to increase as it continues to hire personnel and invest in next-generation innovations[113]. Sales Performance - The company has experienced seasonality in sales, with the fourth quarter historically accounting for approximately 30% to 40% of full year revenues[86]. - Gross profit for the three months ended September 30, 2025 increased by $3.6 million, or 9.9%, with a gross profit margin decrease from 80.1% to 79.1% due to lower margin sales to stocking distributors[99]. - The company expects gross profit to increase as revenue grows, although gross margin may fluctuate due to changes in average selling prices and manufacturing processes[92]. Legal and Patent Matters - The company has a patent portfolio of 90 granted U.S. patents and 31 granted patents worldwide, with ongoing litigation against Stryker and Zimmer Biomet for patent infringement[83]. - Royalty expense for the nine months ended September 30, 2025 was $4.7 million, with an aggregate royalty rate of 3.1%[123].

Revenue and Profitability - Revenue for Q3 2025 was $50.2 million, an 11% increase from $45.1 million in Q3 2024[5] - Gross profit for Q3 2025 was $39.7 million, with a gross margin of 79.1%, compared to 80.1% in Q3 2024[5] - Net loss for Q3 2025 was $(16.3) million, or $(0.26) per share, compared to $(15.4) million, or $(0.25) per share in Q3 2024[6] - Adjusted EBITDA loss improved by 49% to $(2.6) million in Q3 2025, compared to $(5.1) million in Q3 2024[6] - Net loss for the nine months ended September 30, 2025, was $49,608 million, an improvement from a net loss of $55,242 million for the same period in 2024, reflecting a reduction of approximately 10.4%[25] - Adjusted EBITDA for the nine months ended September 30, 2025, was $(10,080) million, compared to $(22,064) million for the same period in 2024, indicating a significant improvement[27] Expenses and Liabilities - Total operating expenses increased by 8% to $55.4 million in Q3 2025, up from $51.3 million in Q3 2024[6] - Current liabilities increased from $34,925 million to $40,908 million, an increase of about 17.5%[23] - Share-based compensation expense increased from $22,048 million in the nine months ended September 30, 2024, to $26,268 million in the same period of 2025, an increase of about 19%[27] - The company reported a net cash used in operating activities of $(7,944) million for the nine months ended September 30, 2025, compared to $(32,960) million for the same period in 2024, showing a significant improvement in cash flow[25] Guidance and Projections - The company revised its full-year 2025 revenue guidance to $211 million to $213 million, reflecting a growth of 1% to 2% compared to 2024[9] - Expected Adjusted EBITDA loss for full-year 2025 is now projected to be between $(6.5) million and $(7.5) million, a 32% to 41% improvement over the prior year[9] Assets and Equity - Total assets decreased from $217,094 million as of December 31, 2024, to $196,591 million as of September 30, 2025, representing a decline of approximately 9.4%[23] - Total stockholders' equity decreased from $112,892 million as of December 31, 2024, to $89,187 million as of September 30, 2025, a decline of approximately 21.1%[23] Liquidity - Total liquidity as of September 30, 2025, was $80.6 million, consisting of $57.4 million in cash and $23.2 million available under the revolving loan facility[8] Technology and Patents - The company expanded its bunion technology portfolio with the market release of new systems, including Nanoplasty® and Percuplasty™[7] - The global patent portfolio now totals 122 granted patents and 194 pending applications[7] Litigation - The company incurred litigation costs of $2,548 million related to patent infringement lawsuits during the nine months ended September 30, 2025[28] Debt - The company’s long-term debt remained relatively stable, increasing slightly from $53,306 million to $53,529 million[23]

Core Insights - Treace Medical Concepts reported a revenue of $50.2 million for Q3 2025, an 11% increase from $45.1 million in Q3 2024, but is revising its full-year 2025 revenue guidance down to $211 million to $213 million due to market challenges [4][7][10] Financial Performance - Revenue for Q3 2025 was $50.2 million, up 11% from $45.1 million in Q3 2024 [4] - Gross profit for Q3 2025 was $39.7 million, with a gross margin of 79.1%, compared to $36.1 million and 80.1% in Q3 2024 [4] - Total operating expenses increased to $55.4 million in Q3 2025, up 8% from $51.3 million in Q3 2024 [5] - The net loss for Q3 2025 was $(16.3) million, or $(0.26) per share, compared to $(15.4) million, or $(0.25) per share in Q3 2024 [5][8] - Adjusted EBITDA loss improved by 49% to $(2.6) million in Q3 2025 from $(5.1) million in Q3 2024 [5][8] Market Dynamics - The company is experiencing headwinds due to a shift in surgeon and patient preferences towards minimally invasive solutions, leading to a decline in Lapiplasty volumes [3][10] - Broader macroeconomic conditions and softer consumer sentiment have resulted in increased deferrals of elective bunion procedures [3][10] Product and Innovation - Treace expanded its bunion technology portfolio with the market release of the Nanoplasty and Percuplasty™ 3D MIS Osteotomy Systems and the SpeedMTP MTP Fusion System [8] - The company presented positive clinical data at the American Orthopaedic Foot & Ankle Society Annual Meeting, highlighting results from its clinical studies [8] Liquidity and Cash Flow - As of September 30, 2025, Treace had total liquidity of $80.6 million, consisting of $57.4 million in cash and cash equivalents and $23.2 million available under a revolving loan facility [6] - Cash usage decreased by 17% in Q3 2025 compared to the prior year [6] Revised Financial Outlook - The company has revised its full-year 2025 revenue guidance to $211 million to $213 million, reflecting a growth of only 1% to 2% compared to 2024, down from previous guidance of $224 million to $230 million [7][10] - Adjusted EBITDA loss is now expected to be in the range of $(6.5) million to $(7.5) million for the full year 2025, compared to previous guidance of breakeven [7]

Core Insights - Treace Medical Concepts, Inc. will release its financial results for Q3 2025 on November 6, 2025, after market close, followed by a conference call at 4:30 pm ET to discuss the results [1] Company Overview - Treace Medical Concepts is focused on advancing surgical treatment standards for bunions and related midfoot deformities, affecting approximately 65 million Americans, with an estimated 1.1 million being surgical candidates annually [4] - The company has developed the patented Lapiplasty 3D Bunion Correction System, which addresses the root cause of bunions by correcting deformities in three planes and stabilizing the affected joint [4] - Treace has introduced additional systems such as the Adductoplasty Midfoot Correction System, SpeedMTP Rapid Compression Implant, and minimally invasive options like the Nanoplasty and Percuplasty systems to cater to various surgical needs [4] - The company is expanding its presence in the foot and ankle market with innovative products like the SpeedPlate Rapid Compression Implants, which offer versatility across multiple surgical procedures [4]

Core Insights - Treace Medical Concepts, Inc. is showcasing new product innovations and presenting interim data from the ALIGN3D and MTA3D clinical studies at the AOFAS Annual Meeting 2025 [1][2] Product Innovations - The company is highlighting the full commercial release of its expanded bunion portfolio, which includes new technologies such as Nanoplasty, Percuplasty, SpeedMTP, and IntelliGuide PSI, aimed at improving surgical outcomes for bunion patients [2][4] - The Nanoplasty procedure allows for 3D minimally invasive osteotomies through a single 1.5cm incision, while Percuplasty utilizes 0.5cm percutaneous incisions for a more efficient approach [4] - SpeedMTP provides a fusion option for bunion patients with arthritic great toe joints, combining advanced fixation technology for stability [4] - IntelliGuide PSI offers personalized 3D-printed cut guides for enhanced surgical workflow [4] Clinical Study Presentations - The ALIGN3D clinical study presented interim data showing early return to weight bearing in an average of 8.4 days and low radiographic recurrence rates of 7.7% at 48 months and 4.8% at 60 months [5][6] - The MTA3D clinical study is assessing outcomes following combined Adductoplasty and Lapiplasty procedures, with interim data showing significant improvements in pain and patient-reported scores at 12 months [7][12] Company Overview - Treace Medical Concepts aims to advance the standard of care for surgical management of bunions and related midfoot deformities, addressing a market of approximately 65 million Americans, with an estimated 1.1 million surgical candidates annually [11] - The company has developed the Lapiplasty 3D Bunion Correction System, which corrects bunion deformities in all three planes and secures the unstable joint [11][13]