Treace(US:TMCI)2022-11-12 19:16Financial Data and Key Metrics Changes - Revenue in Q3 2022 was $33.1 million, representing a 53% increase from $21.6 million in Q3 2021 [9][46] - Year-to-date revenue increased by 51% for the first nine months of 2022 [7] - Gross margin was 80% in Q3 2022, slightly down from 80.4% in Q3 2021 [51] - Net loss for Q3 2022 was $12.1 million, or $0.22 per share, compared to a net loss of $6.4 million, or $0.12 per share, in Q3 2021 [54] Business Line Data and Key Metrics Changes - The direct bunion-focused sales team accounted for 74% of Q3 revenue, exceeding the 70% target for the year [10][24] - The number of active surgeons increased by 39% year-over-year to 2,218, achieving 22% penetration of the estimated 10,000 U.S. surgeons performing bunion procedures [47][19] - Average surgeon utilization increased to 10.1 kits per surgeon in Q3, up from 10.0 kits a year ago [11][47] - The company sold 5,705 Lapiplasty procedure kits in Q3, a 44% increase from the prior year [49][75] Market Data and Key Metrics Changes - The company identified a $5 billion U.S. market for bunion surgery, with only 450,000 surgeries performed annually [8] - Market penetration for the Lapiplasty solution reached approximately 5% of the annual surgical bunion procedures in the U.S., up from 3.5% in Q3 2021 [8] Company Strategy and Development Direction - The company is focused on increasing market penetration through patient awareness, surgeon education, and expanding the direct sales channel [14][15] - Investments in direct-to-consumer (DTC) programs and surgeon training are key components of the commercial strategy [15][17] - The company raised its full-year 2022 revenue guidance to $135 million to $138 million, reflecting a 43% to 46% increase over 2021 revenue [13][55] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the growth momentum and the effectiveness of strategic investments [55] - The company is poised to scale operations beginning in Q4 2022, with expectations for continued growth in 2023 [55][67] - Management acknowledged macroeconomic pressures but emphasized a focus on executing strategic initiatives [91][92] Other Important Information - The company has 38 granted U.S. patents and over 45 pending applications as part of its commitment to innovation [28] - New product innovations, including the Lapiplasty Micro-Incision System and SpeedPlate, are expected to enhance patient outcomes and drive future growth [29][30] Q&A Session Summary Question: How is the company balancing between driving adoption in new accounts and deeper penetration in existing ones? - Management is focused on both acquiring new surgeon relationships and increasing utilization among existing users through training and outreach initiatives [58][59] Question: What impact has the expansion of the product portfolio had on Lapiplasty adoption? - The introduction of Adductoplasty has generated significant interest and has a compound effect on overall product utilization [60][61] Question: What should investors consider for 2023? - Management is optimistic about growth potential but will provide more specifics in the next earnings call [66][67] Question: How is the company addressing potential staffing shortages and macroeconomic pressures? - Management is focused on executing plans and initiatives while building a stronger sales force [91][92] Question: What is the current status of the Adductoplasty product and its market penetration? - The company is in the early stages of Adductoplasty adoption, with positive feedback and increasing interest from surgeons [93][95]