Treace(US:TMCI)2023-05-09 02:04Financial Data and Key Metrics Changes - Revenue in Q1 2023 was $42.2 million, representing a 45% increase compared to Q1 2022 [9][23] - Gross margin was 80.9% in Q1 2023, down from 82.3% in Q1 2022, primarily due to increased payroll and related costs [25] - Net loss attributable to common stockholders was $13.5 million or $0.23 per share, compared to a net loss of $9 million or $0.16 per share for the same period in 2022 [26] Business Line Data and Key Metrics Changes - The direct sales force accounted for 79% of Q1 revenue, up from 63% in Q1 2022 [9][12] - The number of active surgeons increased by 31% year-over-year to 2,499, achieving approximately 25% penetration of the estimated 10,000 foot and ankle surgeons in the U.S. [23][24] - Average surgeon utilization increased to 10.5 kits per active surgeon in Q1, up from 10.1 kits a year ago [10][24] Market Data and Key Metrics Changes - The company has penetrated approximately 5.8% of the estimated 450,000 annual bunion surgical procedures in the U.S., up from 4.3% in Q1 2022 [8] - The addressable U.S. market for bunion surgery is estimated at over $5 billion, with 1.1 million annual surgical candidates [7][8] Company Strategy and Development Direction - The company is raising its full-year 2023 revenue guidance to $190 million to $196 million, reflecting a 34% to 38% increase over 2022 revenue [11][27] - Strategic investments in expanding the direct sales channel and increasing patient awareness through DTC initiatives are ongoing [11][12] - The company aims to maintain a scalable commercial strategy while balancing expense leverage [11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's growth momentum and the effectiveness of its strategic investments [22][27] - The company is focused on increasing market penetration and expanding its product portfolio to drive future growth [11][12] Other Important Information - The company has 47 granted U.S. patents and 51 pending applications, indicating a strong commitment to innovation [16] - The company published its inaugural environmental, social, and governance report, highlighting its focus on ESG initiatives [22] Q&A Session Summary Question: Trends in Q1 and growth drivers - Management noted that growth was driven by investments in the direct sales channel, DTC initiatives, and an expanded product portfolio [30][31] Question: Competitive landscape and impact on growth - Management indicated that competition has not impeded growth, as their product remains unmatched in performance [32][34] Question: Pricing trends and ASP expectations - Management expects continued growth in blended average selling price due to new product adoption and expanding sales force [36][38] Question: Direct sales rep expansion and growth momentum - Management confirmed ongoing efforts to increase the ratio of direct sales reps, which is expected to enhance growth [40][41] Question: DTC spending and ROI - Management reported a 30%-40% increase in DTC spending for 2023, with positive results anticipated [58] Question: Surgeon adoption and progression - Management noted that new surgeons are adopting Lapiplasty more aggressively, contributing to growth [52][62]