Treace(TMCI) - 2025 Q2 - Quarterly Results

Executive Summary & Recent Highlights Treace Medical Concepts reported solid Q2 2025 financial results with revenue growth and improved profitability, alongside significant strategic advancements in its 3D bunion solutions portfolio Overview of Q2 2025 Performance Treace Medical Concepts reported solid financial results for Q2 2025, with revenue growth and significant improvements in net loss and Adjusted EBITDA loss compared to the prior year, highlighting progress in addressing surgeon and patient needs with its expanded portfolio of 3D bunion solutions - The second quarter was marked by solid progress in expanding the portfolio of 3D bunion solutions and strong financial results[3] - Net loss per share improved to $(0.28) in Q2 2025 from $(0.34) in Q2 2024[6] Q2 2025 Key Financial Performance (YoY, in millions) | Metric | Q2 2025 | Q2 2024 | Change (%) | | :--------------------- | :------ | :------ | :--------- | | Revenue | $47.4 | $44.5 | 7% | | Net Loss | $(17.4)| $(21.2)| 18% Improvement | | Adjusted EBITDA Loss | $(3.6) | $(8.7) | 58% Improvement | Strategic Developments and Product Portfolio Expansion Treace achieved significant strategic milestones, including the full market release of three new bunion technologies, publication of four-year clinical data for Lapiplasty® demonstrating long-term positive patient outcomes, and expansion of its global patent portfolio - Full market release of Nanoplasty®, Percuplasty™ 3D MIS Osteotomy Systems, and SpeedMTP® MTP Fusion System in Q3 2025[6] - Align3D™ four-year clinical data published, distinguishing Lapiplasty® as the only commercial surgical bunion system with four-year multicenter, prospective published data[6] - Broadened global patent portfolio to 117 granted patents and 163 pending patent applications[6] - Total liquidity as of June 30, 2025, was $90.7 million, comprising $69.3 million in cash, cash equivalents, and marketable securities, and $21.4 million in revolving loan facility availability[7] - Cash usage decreased by 55% in Q2 2025 and 78% year-to-date compared to the prior year, supporting an expected 50% reduction in cash used for full-year 2025[7] Second Quarter 2025 Financial Review Treace Medical Concepts' Q2 2025 financial review highlights increased revenue, improved net loss, and reduced cash usage, supported by a strong liquidity position and better Adjusted EBITDA performance Consolidated Statements of Operations Treace Medical Concepts reported a 7% increase in revenue for Q2 2025, reaching $47.4 million, with gross profit also increasing, though gross margin slightly decreased, contributing to an improved net loss and Adjusted EBITDA loss compared to the previous year Q2 2025 vs Q2 2024 Financial Highlights (in thousands) | Metric | Q2 2025 (in thousands) | Q2 2024 (in thousands) | YoY Change (%) | | :--------------------- | :--------------------- | :--------------------- | :------------- | | Revenue | $47,387 | $44,455 | 7.0% | | Cost of goods sold | $9,635 | $8,781 | 9.7% | | Gross profit | $37,752 | $35,674 | 5.8% | | Gross margin | 79.7% | 80.2% | (0.5) pp | | Total operating expenses | $54,726 | $57,056 | (4.1)% | | Net loss | $(17,398) | $(21,206) | (18.0)% | | Net loss per share | $(0.28) | $(0.34) | (17.6)% | Liquidity and Balance Sheet As of June 30, 2025, Treace maintained a total liquidity of $90.7 million, comprising cash, cash equivalents, marketable securities, and available revolving loan facility, demonstrating improved cash management with a significant reduction in cash usage compared to the prior year Liquidity as of June 30, 2025 (in millions) | Component | Amount (in millions) | | :-------------------------------- | :------------------- | | Cash, cash equivalents & marketable securities | $69.3 | | Availability under revolving loan facility | $21.4 | | Total Liquidity | $90.7 | - Cash usage decreased by 55% in Q2 2025 and 78% year-to-date compared to the prior year, supporting an expected 50% reduction in cash used for full-year 2025[7] Cash Flow Activities For the six months ended June 30, 2025, Treace reported positive net cash from operating activities, a significant improvement from a net cash outflow in the prior year, with investing activities resulting in a net cash outflow and financing activities providing a net cash inflow Six Months Ended June 30, 2025 Cash Flow Summary (in thousands) | Cash Flow Activity | 2025 | 2024 | | :-------------------------------- | :----- | :----- | | Net cash provided by (used in) operating activities | $1,148 | $(21,118) | | Net cash provided by (used in) investing activities | $(5,151) | $26,191 | | Net cash provided by (used in) financing activities | $705 | $126 | | Net increase (decrease) in cash and cash equivalents | $(3,298) | $5,199 | | Cash and cash equivalents at end of period | $8,052 | $18,181 | Non-GAAP Financial Measures (Adjusted EBITDA) Treace utilizes Adjusted EBITDA as a non-GAAP financial measure to evaluate operating performance, excluding items such as depreciation, interest, taxes, share-based compensation, and specific non-recurring costs, reporting a significant reduction in Adjusted EBITDA loss for both the second quarter and year-to-date periods in 2025 - Adjusted EBITDA is defined as net loss before depreciation and amortization, interest income/expense, taxes, share-based compensation, acquisition-related costs, restructuring costs, customer credit loss, litigation costs, and debt extinguishment loss[10] - Adjusted EBITDA loss improved by 58% in Q2 2025 compared to Q2 2024[6] Adjusted EBITDA Reconciliation (in thousands) | Metric | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :-------------------------- | :------ | :------ | :------- | :------- | | Net loss | $(17,398)| $(21,206)| $(33,320)| $(39,882)| | EBITDA | $(14,276)| $(19,154)| $(27,267)| $(36,139)| | Share-based compensation expense | $9,577 | $6,740 | $18,270 | $14,148 | | Acquisition-related costs | — | $556 | — | $1,873 | | Restructuring costs | — | $964 | — | $964 | | Customer credit loss | — | $2,147 | — | $2,147 | | Litigation costs | $1,055 | — | $1,510 | — | | Adjusted EBITDA | $(3,644)| $(8,747)| $(7,487)| $(17,007)| Financial Outlook Treace Medical Concepts reaffirmed its full-year 2025 revenue guidance, projecting continued growth, and maintained its expectation for breakeven Adjusted EBITDA for the full year Full-Year 2025 Guidance Treace Medical Concepts reaffirmed its full-year 2025 revenue guidance, projecting continued growth, and maintained its expectation for breakeven Adjusted EBITDA for the full year Full-Year 2025 Financial Guidance (in millions) | Metric | Guidance | | :---------------- | :------------------- | | Revenue | $224M to $230M | | Revenue Growth | 7% to 10% (YoY) | | Adjusted EBITDA | Breakeven | Company Information & Disclosures This section provides an overview of Treace Medical Concepts' focus on bunion and midfoot deformity solutions, along with investor relations details and forward-looking statement disclosures About Treace Medical Concepts Treace Medical Concepts is a medical technology company focused on advancing the surgical treatment of bunions and related midfoot deformities, known for its Lapiplasty® 3D Bunion Correction® System and expanded portfolio including Adductoplasty®, Nanoplasty®, Percuplasty™, and SpeedMTP® systems, along with digital solutions like IntelliGuide™ - Treace Medical Concepts is a medical technology company focused on surgical management of bunion and related midfoot deformities[15] - Pioneered the Lapiplasty® 3D Bunion Correction® System, designed to correct all three planes of bunion deformity and secure the unstable joint[15] - Expanded product portfolio includes Adductoplasty® Midfoot Correction System, Nanoplasty® 3D Minimally Invasive Bunion Correction System, Percuplasty™ Percutaneous 3D Bunion Correction System, and SpeedMTP® MTP Fusion System[15][16] - Offers advanced digital solutions with its IntelliGuide™ patient-specific, pre-op planning and cut guide technology[16] Investor Information and Forward-Looking Statements The company provides details for its upcoming conference call and investor day, and includes standard disclosures regarding the use of non-GAAP financial measures and forward-looking statements, advising investors on the inherent risks and uncertainties - Treace will host a conference call on August 7, 2025, at 4:30 p.m. ET to discuss Q2 2025 financial results[8] - An investor day is scheduled for September 3, 2025, in New York, NY, to highlight new products and feature presentations by management and surgeon users[9] - The press release contains forward-looking statements regarding 2025 guidance, liquidity, product adoptions, market position, and future product launches, which are subject to risks and uncertainties detailed in SEC filings[13] - Information important to investors is routinely posted in the 'Investor Relations' section of www.treace.com[14](index=14&type=chunk) Unaudited Financial Statements This section presents the unaudited consolidated financial statements, including statements of operations, balance sheets, cash flows, and reconciliation of GAAP net loss to Adjusted EBITDA for the specified periods Statements of Operations and Comprehensive Loss This section presents the unaudited consolidated statements of operations and comprehensive loss for the three and six months ended June 30, 2025, and 2024, detailing revenue, cost of goods sold, gross profit, operating expenses, and net loss Statements of Operations and Comprehensive Loss (in thousands, except per share) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Revenue | $47,387 | $44,455 | $99,957 | $95,563 | | Gross profit | $37,752 | $35,674 | $79,645 | $76,655 | | Total operating expenses | $54,726 | $57,056 | $112,201 | $117,005 | | Loss from operations | $(16,974) | $(21,382) | $(32,556) | $(40,350) | | Net loss | $(17,398) | $(21,206) | $(33,320) | $(39,882) | | Net loss per share, basic and diluted | $(0.28) | $(0.34) | $(0.53) | $(0.64) | Balance Sheets This section provides the unaudited consolidated balance sheets as of June 30, 2025, and December 31, 2024, outlining assets, liabilities, and stockholders' equity Balance Sheets (in thousands) | Asset/Liability/Equity | June 30, 2025 | December 31, 2024 | | :--------------------------------------- | :------------ | :---------------- | | Assets | | | | Cash and cash equivalents | $8,052 | $11,350 | | Marketable securities, short-term | $61,237 | $64,327 | | Accounts receivable, net | $30,333 | $40,803 | | Inventories | $42,397 | $39,255 | | Total current assets | $147,602 | $161,402 | | Total assets | $206,443 | $217,094 | | Liabilities | | | | Accounts payable | $19,959 | $10,522 | | Total current liabilities | $41,900 | $34,925 | | Long-term debt, net | $53,454 | $53,306 | | Total liabilities | $108,828 | $104,202 | | Stockholders' Equity | | | | Total stockholders' equity | $97,615 | $112,892 | | Total liabilities and stockholders' equity | $206,443 | $217,094 | Statements of Cash Flows This section details the unaudited consolidated statements of cash flows for the six months ended June 30, 2025, and 2024, categorizing cash flows from operating, investing, and financing activities Statements of Cash Flows (in thousands) | Cash Flow Activity | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------------------- | :----------------------------- | :----------------------------- | | Net cash provided by (used in) operating activities | $1,148 | $(21,118) | | Net cash provided by (used in) investing activities | $(5,151) | $26,191 | | Net cash provided by (used in) financing activities | $705 | $126 | | Net increase (decrease) in cash and cash equivalents | $(3,298) | $5,199 | | Cash and cash equivalents at end of period | $8,052 | $18,181 | Reconciliation of GAAP Net Loss to EBITDA & Adjusted EBITDA This section provides a detailed reconciliation of GAAP net loss to EBITDA and Adjusted EBITDA for the three and six months ended June 30, 2025, and 2024, highlighting the adjustments made for non-GAAP reporting Reconciliation of GAAP Net Loss to EBITDA & Adjusted EBITDA (in thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net loss | $(17,398) | $(21,206) | $(33,320) | $(39,882) | | EBITDA | $(14,276) | $(19,154) | $(27,267) | $(36,139) | | Share-based compensation expense | $9,577 | $6,740 | $18,270 | $14,148 | | Acquisition-related costs | — | $556 | — | $1,873 | | Restructuring costs | — | $964 | — | $964 | | Customer credit loss | — | $2,147 | — | $2,147 | | Litigation costs | $1,055 | — | $1,510 | — | | Adjusted EBITDA | $(3,644) | $(8,747) | $(7,487) | $(17,007) |