SI-BONE (SIBN) FY Conference Transcript

Summary of SI-BONE (SIBN) FY Conference Call - June 10, 2025 Company Overview - Company: SI-BONE (SIBN) - Industry: Medical Devices, specifically focused on surgical solutions for the sacroiliac (SI) joint and pelvic fixation Key Points and Arguments Business Performance - The company is experiencing significant growth, with Q1 revenue growth of 25% worldwide and 27% in the U.S. [7][8] - Over 1,400 physicians performed at least one case in Q1, marking a 300 increase year-over-year [7] - The company achieved adjusted EBITDA profitability in Q1, which was not anticipated due to seasonal sales dips [8] - Revenue for the year is estimated to be less than $200 million [8] Market Dynamics - The company operates in a niche market, focusing on unmet clinical needs rather than competing directly with traditional spine companies [12][14] - The Total Addressable Market (TAM) for SI joint fusion is estimated at 280,000 cases per year, with current market penetration at less than 10% [14][15] - The company has launched innovative products, including the Granite and TNT devices, which have received FDA breakthrough device designation [16][18] Product Development and Strategy - SI-BONE has transitioned from a one-product company to a multi-product company, focusing on the sacropelvic space [34] - The company aims to launch two products per year, with a focus on addressing unmet clinical needs [33] - The Granite product is expected to become the standard of care in deformity procedures [26] Financial Metrics - The company reported a gross margin of 79.7% in Q1, which is an increase of 80 basis points from the previous year [51] - Guidance for gross margins in the mid-term is projected to be in the 76% to 77% range due to new product launches and scaling [56] - Operating expenses (OpEx) are expected to grow by 10% this year, with R&D seeing a lift due to new product launches [58] Sales and Marketing Strategy - The company is expanding its sales force to 100 territories over the next 18 months [65] - A hybrid sales model is being utilized, combining direct sales with educational support for surgeons [43][46] - The company has implemented an academic training program to educate new surgeons on SI joint dysfunction, leading to higher adoption rates [40][41] Reimbursement and Pricing - The company has successfully secured new technology add-on payments for its products, enhancing initial adoption [48][49] - The Granite technology will have a transitional pass-through code effective January 2025, covering the full cost of the technology [48] Future Outlook - The company is optimistic about maintaining a positive adjusted EBITDA and free cash flow by 2026, driven by high gross margins and operational leverage [64][70] - There is a strong focus on clinical evidence to support new product launches and market expansion [66] Investor Sentiment - There is increasing interest from investors due to the company's consistent growth profile of over 20% in recent years and demonstrated profitability [69][70] Additional Important Information - The company emphasizes its differentiation from traditional spine companies by focusing on specific clinical needs and innovative product development [12][14] - The management team is committed to educating investors about the company's unique position in the market [71]