Treace Medical Concepts (TMCI) 27 Feb 242023 Q4 Earnings call transcript

Good day, and thank you for standing by. Welcome to the Treace Medical Concepts Fourth Quarter and Full Year 2023 Earnings Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded.

I would now like to hand the conference over to your first speaker today, Julie Dewey. Please go ahead.

welcome fourth and conference XXXX everyone, call. afternoon, to quarter our earnings Good joining appreciate us. We you Dewey, Chief and Julie John Financial I'm Treace's Treace, today Officer. With Officer. Chief are me Executive Officer; Mark Chief Communications Hair, and IR

Investor will the of on commercial commentary after the quarter full be the section materials is market activity of can the will question-and-answer released website be investors.treace.com. of results we Investors session. The fourth our year press our and today, call, financial at in John host review our after release being During supplemental found recorded Mark archived section and Relations This call offer a website. and and the and which close our will in

SEC refer a full our for on events statements. Please or should of to update based remind these that anticipated will statements. All XX, our that year filed it XXXX. Any forward-looking to these be Before results Private filings, relate you our Treace of under events obligation that all no upon are well or of based expectations statements and call today's actual statements presentation and assumes we not to various trends February materially Litigation Form intent detailed current place performance by begin, reliance undue statements estimated for current upon statements. be during forward-looking results assumptions. These cause these as could our you protected differ risks. XXXX Securities statements to our as from those are material to made estimates the is future to implied including that would forward-looking XX-K Act All forward-looking we the Reform uncertainties on risks involve or XXXX, or forward-looking and available predictions are statements. statements information, and Accordingly, market like

the to call that, now John. With over will turn I

launch full on my to Good joining Thank growth year of XXXX highlights, us. for and going implant today you, afternoon, Julie. quarter comments I'm and the drivers. progress our our everyone, focus fourth SpeedPlate other exciting thanks and our

Mark comments, the was productive made. We a our specifics progress of and proud successfully of results that XXXX my and full our plan Following the the executed year we've and previously will growth for guidance. U.S. our revenue we're our strategic on growth guidance significant cover resulting Treace, XXXX that high peers. in busy ankle XX%, significantly foot we year is range of surpassing believe of and provided our and end above QX

that head to our place key in We differentiated reaffirming the and was also operations, delivering the have year our technologies. market penetration continue expand gains to prior of that encouraging across the scale our strategies progress EBITDA our right adjusted making metrics, we belief of operating

opportunity compelling with proprietary by well bunions care. Lapiplasty targets $X our most adults Here continued surgeon U.S. at the the Treace, a nearly we're Lapiplasty market believe in and U.S. treatment on in reconstructive the fundamental the affected community surgical to shift X and with a adoption market in way X foot ankle a billion-plus procedure, we represents becoming in this ankle and through in today. bunions, strong which foot by its is the of the driving standard of addressable

$X meaningfully fourth U.S. approximately billion-plus opportunity opened hammertoe deformities U.S. $X approximately and foot X.X% our such has of same focus and X.X% quarter estimated TAM diluting opportunities market are up addressable with correction, to bunion by ankle up the for quarter constitute without the have the the addressed as Adductoplasty our $XXX penetration expanded or As footprint which million the also technologies XXXX our XXXX, million of and U.S. market and billion-plus we surgical Lapiplasty of annual procedures X.X% bunions reflecting candidates approximately and on surgeries frequently of from total at in market fourth market. We've X.X for complementary penetrated in XXX,XXX our our XX% adding estimated both related and of that the core expanded the annual new time. This by revenue the treat coexist in procedure.

commercialization new initiated Micro-Lapiplasty of our in a technologies XXXX, hammertoe platform, We including of system, as limited instruments as release SpeedPlate several sterile several our fixation well system.

all to of technologies years come. these for new to We fuel growth strong expect

pioneered innovation-led not long-term therapies direct studies. Along foot is pioneered procedure, elegant ankle our we value. Since and grow bold steps focused predictable, to the our sales patients. product company, we have repeatable that in our designed supported patient differentiated we've our transformative for and sizable awareness way, Lapiplasty shareholder recognize to founding, education and with our positioned but solutions, over we growth uniquely numbers, Adductoplasty believe drive initiatives, procedures breakthrough including by a team, deliver and markets competitive distinctly success of we we're are through flagship that our and only As deliver results all innovation also defend a advantage to the that Lapiplasty to we treated provided clinical and our XX,XXX in differentiating patients resulted rapid now our believe measured the in which change Treace. With taken

fourth strength growing full year results million, demonstrate These adjusted over investments first and year, prior revenue direct-to-consumer R&D effectiveness was in and our Revenue Turning $XX.X XX% our now April quarter sales underlying of also targeted XX% results. since to the initiatives was going positive and in of year. prior programs. Fourth XXXX up the strategic our quarter public year of XXXX. over the quarter EBITDA our full channel, direct with QX in

year with quarter, in ago X,XXX performance substantial to ending year-over-year. A from number active XX.X and new kits an in including users year-over-year effect XX.X with XX-month up in key utilization systems the dilutive added Lapiplasty the of the per selling of quarter adoption of new our QX fourth advance surgeon up for price our during SpeedPlate the the new blended metrics per X% prior as year, procedure the gains average continue We driven XXX record surgeons, average and utilization $X,XXX quarter increased the QX, despite up the hammertoe from XX% of by in and of the sold instruments. in surgeon as a impact early over sterile large our number quarter, of Adductoplasty kits well of certain new increase kits active and our in trailing surgeons up year the

and us Our strategy. We XXXX a advancing investments our to patient increasing focus bunion-focused and with we direct scalable and the channel, market strategic of coverage driving in the intend the by these goal support awareness penetration sales have our our continued commercial R&D giving investments well-defined, the of of targeted that proven business, our commercial and growth initiatives targeted and education continue into DTC confidence market. innovations to expanding have footprint more

We channel, have only XXXX sales a grow surgery, XXX and totaled specialized one the bunion the coverage year mix specialized on sales ensure revenue our XXXX one total XX% growing approximately you of by highly the continued XXXX, reps, such When during managers, of produced this direct the increased direct versus that year is Treace, the quota-carrying clinical with exiting during fleet field of and our team team XXX% size team roughly related XX% industry. We XXXX. We and to and in at of focused the at an sales end penetration. QX. established market that the end employee including strong and XXX reps in mid-foot the support associate to include employees appropriately surgeon the at specialists in our XXX plan

strong growth we for earlier, mentioned surgeon in in saw I base and QX As year. our full active the

and to all use as supported complementary we differentiating utilization well awareness channel, growing data sales by continues of and DTC As with gains develop portfolio our and further anticipate gain our Adductoplasty expanding products, base and education sets clinical surgeon our tenure, patient of Lapiplasty as of adoption direct increased initiatives.

product our to turn launches. to like I'd Now,

our new platform. SpeedPlate First, fixation

great off and its is SpeedPlate saw demand in very we Our a launch strong quarter despite the start, availability. a fourth limited to

X/X SpeedPlate. about surgeons our In volume and XX% QX already case of in represented about fact, used of our active have SpeedPlate

of the SpeedPlate of at have We are and QX end track and market growth XXXX on broadening expect to full adoption beyond. throughout and availability

the plate to and titanium many insertion deliver for attractive Our a believe staple, very new of onboard a is technology attract the locking our only specifically combination of audience customers, experience surgeons. We speed stability the existing enhancing technology but this us the is who of SpeedPlate and to of not prefer surgeons, those for is designed allowing fixation. also with non-staples fixation compression of a night

to the SpeedPlate be Adductoplasty to address platform today, procedures fusion of procedures and new ACFAS an previewed SpeedPlate recent configurations foot. the QX. we are across new designed are meeting at to broadly of configurations expected SpeedPlate throughout our that versatility the implant These While available range expand by expanded applicable Lapiplasty

Lapiplasty designed both Micro-Lapiplasty and SpeedPlate tissue allows our through Lapiplasty our exciting instrumentation procedure the incision an the Next, X-centimeter now with instrumentation is reduce a advanced fixation This our performed option the technology. incision evolution patented new further procedure. This size of be system. to related to utilizing dissection

fully now available. is system Micro-Lapiplasty Our

the launches come development represent, more we about product that to there's pipeline. excited While these product all are growth opportunity even from of robust our

launches discussed, slated XXXX just beyond. steady new in cadence ensure XX inclusive in and to our launches innovation R&D of pipeline the and fact, of for have new we XXXX innovations In I've a more

instrumentation. Mini-Adductoplasty full We for innovations innovation new years and believe market at our currently preoperative We highlight smaller the incision our increased were and clinical XX% new Adductoplasty and for to and release adoption with performed designed approximately drive of patient-specific an penetration in planned come. this leverages half mid-foot system RedPoint our be advanced features SpeedPlate Mini-Adductoplasty to to through is second procedure in instrumentation excited correction XXXX planning the system new allow many XXXX. to Adductoplasty of fixation. The can ACFAS, mini-Adductoplasty technology limited including commercialization

procedures in XXXX. is our corrections. believe RedPoint approachable a and surgeons greater to of patient-specific commercialization with first-to-market bunion make designed number while limited mid-foot preoperative for and patient-specific clinical half and technology can deformity full PSI instrumentation to guides this Our is planning second the planned reducing the steps more currently release challenging deliver [indiscernible]. RedPoint technology in We of

procedure in developed, leadership pioneers core strengthening RedPoint broad ahead, that capability achieve in we a years the further believe the our to have position. with market we PSI As technology is markets adoption

of believe to market bunion XD back expand will looking speed our in the new leader significant opportunity position our half Finally, market, introducing penetration our a we're reinforce correction. platform and technology We bunion the platform forward of as XXXX. this further in the

to We our supporting around improving patient user our continue centered experiences, as IP and continued additional outcomes and product our pipeline innovations market technologies at on new aimed penetration. surgeon provide will we updates develop core

complementary other today our continued as As expanding expect reflects that the Adductoplasty sales from contribution to to procedures increased our that also we new adoption growth opportunities. well our look and last as XXXX, we of drive we launches we guidance Lapiplasty, capabilities specifically and advance year, repeditions throughout provided commercial pipeline while strong made multiple

fueling deliver am call XXXX make pathway from and our of of the our team to adjusted to to solid XXXX. for turn of business direct industry-leading our I'll towards our surgeon commercial Treace as and technologies employees. With scale in sales expect we solid I'm to place strong Mark? profitability foot increasing quarter confident continue and our great performance Mark drive have over also profitably of our performance that to now sustainable financial ankle productivity to a we full and on strategies additions We guidance. new to review the with pipeline growth at right proud EBITDA continued execution year and progress breakeven that, talented of I robust in base, momentum. another beyond. With our channel

was of Thank prior year. Growth XXXX for year. quarter afternoon, Revenue million, in a increases adoption John. driven volumes revenue to Good portfolio compared the selling $XXX.X of and complementary the company's procedure blended fourth XX% expanding increases you, due over newer in XX% the prior representing increase in the technologies price was growth $XX.X average quarter Fourth products. to was by million, everyone. and increased

average surgeon prior their such X,XXX procedure quarter daily year. prior higher selling over average sales quarter, sold Lapiplasty kits quarter increase the record expanding the of year, less by contribution customers. Lapiplasty driven Adductoplasty in price grew year system, actually our blended the fourth basis, $X,XXX compared day as and less the last of we early On and had was as fourth in XX% fourth X% QX. We selling selling X continues price Blended our an instruments single-use average additional XX% month in portfolio across days. the increase was volumes some Although a quarter, from to the December and products the a complementary our X our than to included the quarter. This same procedure impact SpeedPlate direct same from channel up sales selling Hammertoe sterile

For expectations and top increase $XXX.X revenue $XXX rates headcount decrease XX% a mix million support and changes of for by the prior of to product our to a our to and XXXX, inventory prior XX.X% million decrease increase blended was due the the $XXX in primarily average XXXX. of XX of due XX,XXX XX% in of XX.X% a $X,XXX, over XXXX. This million, quarter full XXXX, the the end in business, Gross end $XXX.X the was increase costs to high full partially compared provisions. million. We XXXX was year offset fourth royalty kits above an the to year price fourth over revenue At quarter lower $XXX.X increase year. million preannounced sold growing a year prior overhead with to XX% Lapiplasty guidance versus procedure a selling the point range in of margin XXXX in of basis revenue

in changes expenses For product XXXX lower million in increased the in an sales full inventory head mix $XX.X the fourth commercial $XX.X overhead by in gross support product and due operating margin due period, initiatives. support to compared provisions fourth XXXX total were quarter to million requirements direct in channel, our from partially in the expenses rates. Total growing to strategic quarter reflects innovation, increase increase of XX% costs The XX.X%, the investments operating investments as as of expanding prior and business, in operating count XXXX. royalty down well was year offset capacity to of in primarily increase our for expenses in year the

operating year full as investments period. $XXX.X in well prior $XXX.X the in were increased investments the commercial expenses growing as The million XXXX, other increase in reflects For operating year million supporting expenses our initiatives compared business. G&A to

$X.X We for an ended compared net of $X.X of $X.XX fourth loss loss XXXX. in or was same Fourth EBITDA or same $X.X million EBITDA million loss our the strongest, to share $XXX,XXX adjusted $X.XX per adjusted the XXXX. quarter seasonally with compared for million share net of of to a per the period quarter, period

John our this is in quarter EBITDA since XXXX. As going said, adjusted positive first public of

as in XX, totaled receivable prior a equivalents, EBITDA the full For year improvement and of the XXXX, marketable December compared XXXX. adjusted had securities we modest year. Cash investment to $XXX.X million

of to balance including EBITDA. our debt well Our is growth with believe facility, current total a clear and investments liquidity, as strength cash path to $XXX adjusted lengthy available sufficient aggressively million. We on initiatives access achieve strategic have approximately to and we our runway our sheet continue flexibility in level a as terms executing positive

these and been, quarter-to-quarter year will from now plan metrics to at our DTC metrics annual the has discuss product we is and metrics update growth in that that operating new surgeon wanted There there is guidance, to of variability an I due launches, Before and XXXX key mention our to business I these we continue for our which annually investments. Therefore, trajectory. will to of at be the than seasonality end relevant anticipate our more our quarterly. on point impact this key and training events update much the in basis, rather timing

outlook for me Let our to full XXXX. turn now

million, $XXX increase which XX% XXXX. XXXX million We XX% revenue of compared to to reflects $XXX are of to year full guidance providing an

by business encouraged strategic on clearly remain momentum in We and growth. the delivering our our investments with strength underlying

this that the in year comfortable range. early midpoint it's at feel the of Given we

improve year improvement EBITDA We XXXX. anticipate full in and to full EBITDA XXXX compared year for XX% approximately significant to adjusted expect adjusted to make the

future business close we effect any full XXXX. potential developments, of breakeven acquisitions being cash material anticipate or the other Excluding any to for consideration the flow for year

complementary Our blended digits. products future grown this to and ongoing Lapiplasty, pipeline ASP procedures mid-single surgeon we given opportunities, has And historically expect and adoption of trend persist.

our reasonable additions rep to surgeons training is annually penetration stated, previously drive support to we on drive blended active utilization increased and to is as bunion QX fourth expected baseline and to time approximately adoption. These patients late new normal procedures surgeon previous entering XXX decrease expect next surgical year, surgeon ASP year-end expand the funnel higher procedures XXX we increases surgeon to new the the we with of case sequential tightening active carryover been the few this and following over in sales years and a procedure utilization large increases. year, quarter the As first coverage procedures seasonality expected believe ratio of Consistent coming should base for years, are with from frame revenue often quarter year. into bunion scheduled our a into last the due usual strong QX to to off has there performance. Similar some adding

this seasonally quarter QX similar to QX, now followed is Given carryover, to we revenue year. strong very the revenue slight historically from which of QX to increase be a QX, roughly largest the expect a by QX,

Now some before up to me turn John? concluding call for we John let for comments. back it questions, the open

year significant expect to Thanks, ahead. Mark. delivered years in track growth and the to In closing, of strong in XXXX on profitably scale we another our and remain drive progress business

continued foot TAM such the over about as more the that, driving with the and conversion a call a complementary line now to are company midfoot by XXXX studies, base and look best-in-class as pursuing ankle. with to and our through the and we're and underserved significant Adductoplasty, move bunion, in great clinical supported sales a with more position the to turn accelerating me to large market strong SpeedPlate we questions. couldn't believe We and beyond. With the open innovations offerings to established additions expect excited of for operator let in of strategically momentum performance surgeon as our differentiating we market addition these forward hammertoe and We expanding new come, in the related fastest-growing opportunities drive business, to aggressively direct a powerful team. We be your and technologies I

from first [Operator comes Ranieri Instructions] Drew with Our Morgan question Stanley.

just about a you Maybe for XXXX, million product of about talk might $XX for know to blended some to for to first we some us launches. just, lever parse $XX bit both is million. But bigger of utilization revenue but for be launches the us that just out drive new line you're top thinking on guidance the these of help looking contribute more, your that how drive going the or curious that more I you should just and those, XXXX product this said more is what higher? in mid-single with ASP to digits, new incremental of you with

Drew. well Great question. me that to as we're from. increase as Thanks, about let going revenue to largely you. bit tell come Yes, the Good little hear is a guide about you how from Yes. thinking what

to continue our focus flagship have We our primarily Lapiplasty. on

come So the that from growth of we lot is increases. think a to volume going revenue

We year, about some we're some will, in to similar. as and we have I going last the traditional remarks, that expect of seasonality, more to talked see that pronounced prepared saw something we

So given some down level to and QX ahead drop expect the see and to around QX QX be we slightly that what around line. in that's QX why right of in standard we've color then then versus QX

be of revenue and again added to to growth this strong build driven surgeons through is those we're Lapiplasty. that the for we that in will add again, that XXXX having continue So QX were customer then come primarily new planning from the but going to volumes year the most

will have that blended as products our well. incremental increase will some we additional ASP and also So complementary

there. about mid-single-digit we've having growth talked So

to you're breakeven, see kind in side, decision. And then but it's more encouraging the just unique of profitability towards still there a progress on

a opportunity still company, ahead. high-growth more You're

or upside about there you're as of for So And a change dropping this products EBITDA new about being portfolio business some how terms anything is maybe year? in thinking you potential line to undisclosed? of necessarily could top through have that that further capital-light down are been thinking expansion disclosed with these model

Yes.

profitability, about excited for So really in think have XXXX. about the we're when what we store we

in the remarks positive the mentioned we As in EBITDA had prepared quarter. we fourth

in volumes that line. our scale we EBITDA higher have poised bottom in So we're given adjusted that to and line that revenue definitely that know improvement

So actually and line talked lot some some I marketing line this to territories. That leverage are to revenue lot they think and their just sales in that that leverage or so perspective through a we very have the as increased experience as expenses is from it well some through get marketing the they and of in higher a sales well. drive also item. We've of as about we've in going hired that more marketing volumes continue comes reps a have able the plays item come past to we'll leverage see to opportunities primarily

to one end lot that So that, come was then, there leverage the is that's of from. going question where And back on a Drew? last of

change the saying were in in portfolio, being just is one. the of just in yes, that type a you sorry, you're how business portfolio terms of they're anything model? questions But like there Just XX would expansion, capital-light

designed instrument do case X nothing so and it's the instrumentation from have will SpeedPlate one for the with covering on are SpeedPlate, well-established pace case technologies change continue model margin put John. trays. we capital-light really out that got for that cost of this margin talked We've intent. We SpeedPlate Drew, there. this about and that philosophy and products grained Yes, the the we Yes, to the really trade. Lapiplasty to

that a capital-light to model. it's way. be It continue very So will

comes Robbie Our from Marcus next with JPMorgan. question

$XX Two for Street what for about and feel first be quarter talked me. about quarter. sitting the comfortable fourth typical you million typical? where is first, Maybe deemed that quarter, at drop Mark, The to is first would you

we've given Yes. where that do feel seen. carryover the question, comfortable Robbie. Great that's And we

are the we number. we comfortable quarter first So and current historically, feel with given the in quarter, that comes carryover the we see that from fourth quarter into where

down on you talked adjusted about maybe towards breakeven. EBITDA, P&L the then And progress

improvement, would $XX XX% loss a you be 'XX. for have think which million about I a

where believe, think sequentially? are that should with offsets the quarter about the profitable quarter, I third it in improving we the XXXX first, negative should positive makes year second, throughout majority You and fourth as about fourth or about talked we up in think and quarter cadence similar

happened early start Robbie. year fourth similar to QX We then Great question, tend about earlier have programs will the have we our of we of XXXX. think losses medical begin our what I marketing it Yes, would to can as as in in largely in some revenue and EBITDA early positive the year, that the quarter. education we in QX. And some in the programs increase, larger

last in would expect to losses some and going the X the to EBITDA then positive I So first in fourth. adjusted similar year be quarters there's

question from Rick Our next comes Wise with Stifel.

could Why be demand you I'm going last X to mindset? I job, come why the relative incredibly back launched market if and that expanding, be you're mind. XX%-ish a And from SpeedPlate realistically to to Could clearly and the your we what one, XX% physicians, you help training force there? argue get to thinking was good on when picture. you go to on sales is perspectives, strong, talk XX% grew on, the seems I you growth is us XXXX the just the more year. could strong, you're doing shouldn't wouldn't guide, the and mean, guidance, giving the about optimistic. this the I portfolio seems us understand your guess expect would I you

got from the year. XX% we the see thing got is of the you full we've question way right the we the some for force, too. We've back that a quarter great I this great the third see it, half going now little the that. bit below products, that. embedded I one appreciate we've in X some quarter But but because have year, talked and last on quarters, products about like fourth launching positives were Mark. Rick, a sales is, the that's that in question. company Great we And your got

we And we're want about so representing of very momentum it leads half-loaded more the any year, with prudent and it's considering it And laying admittedly, loss guide the out as so see how even still, XXXX. we thinking we're just the seasonality, a early really way early into going it's back our we're XXXX. but very in don't of to be

clear technology, to and about competition. Clearly, also making you ACFS seems of which the second So it there's competition from nothing waking from is and more the careful, be that that's market, products, start my up more folks the of AOS the to year? training, this leads you anxious, question than a imitating new more me maybe to ever, seem on the there's more extent you strategy, extent what thoughtfully less making is challenge? conservative that complement. To your And a market nice as what challenge, to to

and over the IP our we're still years forces. surgeons Thanks it's people in have Lapidus out rates largely to really and surge bunion that huge, and entrants as sales entering ahead, nothing but the terms and is underpenetrated, is and retention the Lapiplasty, with competitors the more multiline, it expand continue new more market old in us. It's that space to that interface I'll it very high, they billion our you really for keep seeing then are tends with strongly our our are space past Adductoplasty so in sort exciting $X over the corrections, redirected Rick, market is John. X-plane and surprises strategically TAM take to to of we of no been bunion one. that kind We've of and progressively the enter X space, to developed. The space it's the we produce for less elegant makes like copycats solutions these the hammertoe itself entry way want new question, entering that we've U.S., space very pioneered so works other using difficult Lapiplasty mind companies well as enter distracted we that new just these the as freehand nothing the believe in patient does. And than do a work

and sales product only they that think patient sales rapid our channel, a fraction and innovation X-pronged surgeon of we offense in iteration direct and attention really focused and So time of education. force's get

in While great and and very what position that fastest-growing we're establish continuing going to time we're tools, market, offensive grow and as to are today they which and foot these company to a to well ankle going be. and continue we the is reinforcing are just ourselves us keep where over as with strong defense the

to going a of you're you just I'm Early guessing to just growth a 'XX XX% Why folks guide plus XX%. for I'm follow-up quick presenting be to be the JPMorgan, in curious. year in at to are that. XX% rude half and change, and as to John? yourself the going well positioned described

XX% I fair appreciate we range. follow-up are to breakeven, grow question. that absolutely that. are towards positioned EBITDA the to we at well positioned and Like move We believe

is early as accelerating and It's for and the about sales the this with year, the be we're early of the guide, here build prudent product in we're year. in business, momentum the said, the prudent. just slated to launches we that that excited And allowing intentionally channel the we're Mark have Our the and both that year. ourselves through back confidence think of make go sure we as I to half year trying

Nigan next with Our UBS. [ comes Simon question ] from

the year. you a thinking of about of next When Lapiplasty? these you about do recently think to this? potential from X any platform the highlighted I years, do product significant emulate And contribution ability the products launch know think coming over this launches how have new success the you the

Mark that Great and question, to Simon. can add one maybe it. I'll take

is because As and our build add-on the upon at correct. a way was that to to market, anything opportunity bunion very over and market we're deformity to we we a good the opportunity working we have, XX% But obvious enhance Lapiplasty do going nobody had of the be that look our had that accelerate patients can clearly. share midfoot on. Adductoplasty a largest time,

significant to can technology alluded expect that do the $X.X and that opportunity our itself. But we expand And to bunion and add and in we we the our in as in right to that and that us help developing half accelerate to penetration democratizing a year platform corrections So RedPoint well. way opportunity another it, then, into yes, market will this we're midfoot created we're launch utilization. now that's bunions of back a opportunity billion and

that momentum penetrating but hard all opportunity, build and any them could the they into So of say Lapiplasty help accelerate to on that exactly our it match opportunity.

you When utilization model for as your moving expected. as not How have our base we look think utilization we're we do seeing guys. would one quick have I much increasing you forward one despite increase at maturing? surgeon about

board Yes. X about our XX surgeon really base We've nearly come in question. of on talked We've a prior on the has calls. so in That's active this the months, last last XX% good had years.

So strides to great make we year. adding continue year after active in surgeons

a So X continues in nearly X XX build They're little and their cases of a bit X cases function to it after means, surgeons come doing first months, to or have initially. what we XX years. in around and that up step

it's more practices. with So then Lapiplasty experience and to they unique, and tend they more Lapiplasty get utilize in their

per should And do more so if cases fewer typically away mathematically, you utilization surgeons recent all who that or take these I to what much more say, year, than average come recent, our earlier higher were have we've aboard is reported.

longer those have surgeons we just problem who to think in to continue I we add more to been a continue more to the beyond. will lot XXXX that notwithstanding expect surgeons do to know we that's around that lot so have, a meaning we good continue increase, So fact utilization and and of a and add

Richard next Our from Truist comes Securities. question Newitter with

guidance, referenced to XXXX? want think And I then I way And mid-single-digit in a you little revenue with to it, or of per you EBITDA. assumptions guide? you than your in XX I know the I right adjusted I'm guided is to on however margin make have you holding better we steady Should to fourth then the a were here. follow-up. some sure gross just in gross think that we quarter. growth had embedded Maybe characterize what's procedure basically On your ASP, margin, think expecting understanding also of want the

good Really question. Rich. Yes,

you're on think all I those fronts. right

the of lot products, come down the of gross Given the we've launches a talked initially. about have we're product the a anticipating introduce just new bit margin little and some past, same as maybe this new and we in quite to efficiencies in we don't margin the gross shift mix

view as on gross And so I margin the but slight maybe substantial. XXXX nothing some having pressure

less saw in bit than a XXXX, all other right maybe assumptions what So so on. little we are your

I margin I to actually gross but another a comment have the follow-up have first. follow-up,

mix do ASCs, net about there right. the that that's just on for below setting. Talk think going your us just positioned in basis orthopedics. cadence you're the get materializing I year, it's trend ASC and half will and you going a a margin your be to to continue we bit on my half what pricing what hear to the little in your the can gross And that we now to first businesses and remind how what mean It's something I'll of follow-up second throughout is the AAOS, forward. margins should the full in at ask portfolio, right that's Just down?

I'll gross Rich. be of it one of bit we're back but going decreases some second the in that questions, With and to the next Great I it think it, margin, is respect the them. give in the about a not you way the we're with the over articulated XXXX, to take right. thinking year, little All again, substantial to lower way expecting There's first one, may I'm John. half earlier improvement X year.

tempered again, to year-over-year. ASCs versus step level, it XX% year. which still pleased. so we will slight to wanted We're say be a and strong, with just I to over that really that then, last feel slightly hospitals? gross going extremely So And the margin be is respect John, just down

market contemporary there's know and has about ASC ASCs setting. Foot lot the of so ASCs this well Rich, the moving we're Yes. that I and favorable the think setting, the in hospital-owned then those there to settings confusion topic private ASCs, and out a more and I products. ASCs. hospital-owned little discussion the ankle reimbursement. better we with Obviously, in years, as ASCs there's volumes competitive bit done a of knee private on different in hip for But outpatient get been participate a decades XX little because

revenue hospital the have points. I and freestanding and outpatient our would in facility the at we is that more of that setting minority that itself. in it's ASC the majority So hospital different say the are price the private or our have be hospital-owned ASC,

procedures we're in talk and kind creating trend even knee spine is world. ankle make So and some knees continue there cases and to like there's we foot of towards there, surge hip there maybe huge this and hips not the of and but that in a progress competitive is lot there and

BTIG. Our next question with from Ryan comes Zimmerman

I very we've want SpeedPlate. start really on good on It's heard to it. been feedback positive off to start, a

it for John, go? higher doing think account chunk of could growth decent you some simple you XXXX mean, of higher. just a probably out I can do called if it's about Where can that Because XX% cases that that think, today. I math, in it swing and XX% moves

shots company. they up revenue the that These Lapiplasty/Micro-Lapiplasty, hands and this the force exciting. with the get I our XX% and in Yes. started Great, probably other only SpeedPlate, sales on now as made right surgeons' company X Lapiplasty. mean, can is, goal launch and very great the of piece great procedural had with most things the talked surgeons just we've true. Very getting evolution that really but it's say, our me, it we're not unique for of our it. of from it technologies Adductoplasty And momentum about X I has question. technology and impactful are QX, being of since favorable XX% within our our response,

because midfoot if we're introduce those faster and to surgeons to use going to And going the introduce So them foot the them going they to some they one of to SpeedPlate show procedure Adductoplasty, the technologies of ankle convenient. or need to is because interested want we're appeal them like to and if later. sooner get once it to deformity. And makes correct SpeedPlate, they Adductoplasty going Lapiplasty to XX% in one, more we're and they cases

very from it's model creating sales X those So technologies force a are really efficient standpoint. a and powerful

SpeedPlate, only in you more has get we we we and foot into see ankle full lot of in and Lapiplasty and opportunity the foot to not out think lot of rise sets continue areas year. in the the of commercial other as but cases a love could our Adductoplasty ratio So throughout and there it for procedures, get a

to just not was of cash out in where just talked know the curious And comments? you kind of how at are field, portfolio? you you're that was a made is your the And broader if has looking on And interesting appetite necessarily where I comment more changed? buy, bring spend of there then, your in that hand, assets view given on on are which liquidity going those the potentially your into Mark, about access just to going. But about but kind thinking I'm and cash your you view you're to kind the

And PSI. I the with of given way just give that so information access was just and just have We're growth Ryan. have the to about in us it portfolio for not the were financing open if we've same opportunities this there some or acquisitions often in and about a we'd this great products year have additional articulated our we Yes. did portfolio, if cash we're our to, we we to have are needed. John what RedPoint, we're expand be to to liquidity we but talking that question, require kind past, last that's complementary technology, Great have match talked great here. I of relationship to saying to technologies year if great say and with to level lender to our that any the what access we doing access always

or suggestive was hand not liquidity. but the to is on cash planning that give strategy just perspective any of So full what to as full in our we're way changes, far in what do any as

little but for I read a much, you thank that into clarifying. too Maybe

problem. No

question comes from with next Stephens. George Our Sellers

or maybe of like number revenue top-performing surgeons you're for how the curious, should always just the about of we does the level or what support On of of look I'm internally? productivity thinking the direct about how some direct your capacity terms it sales then can can in reps? they the And of force, reps they think drive your

Yes. George, from Good it's to question. Good John. hear you.

revenue productivity We sales broad with have of our today. a spectrum team

get we X-year they're ratio a point, to still climb dollar that's operating the trying You right? So that significant are have for that And and then believe newer when create we're to is are know a at some to nice reps very reps, newer we revenue sales of at those and years, some very can very with, most that we a also going and tenure, our reps $XXX,XXX several million know we of beyond the several and is can leverage have forward. of be reps sustainable those pleased of quite performance business, of the have what time cost range. do and you level in operating lot

problem-solving bunion is upon. to them trauma the good we foot So it hammertoe about and feel our and the and these efficiency SpeedPlate part in to then and mid-foot builds case, this the another technologies build each we everything forward the do disposable cases. hammertoe products other Lapiplasty fusions to both not of a of those, of these feel foot we instruments, other, case a fits on into they're from builds Lapiplasty the where the Adductoplasty way specialize bring that capacity of and one and do on model out. We're for bringing asking run and good of of their we're sales because team, part about around part the

way very, very we've efficient well establish can that direct sustaining cost really room for we a nice sell. well. future channel powerful a with that's as And proven it's So to leverage year

question. your answered that hopefully So

you need information. if know me Let more

And you. then, for Mark, maybe one

recently you line? about areas you've line the of returns the better efficient know through and on speak marketing item? year you're as just of the driving can find where to And maybe spend Can some have you some those see you I all marketing to future investments marketing in leverage more Director how able that that sort being some to been ways of talked in an where and this area hired line You new Marketing. a

great great, is question. Yes, Mark. This

years, able spots, we've the lot We're continue whether a to do Vice stab to different to a even with that higher who's really campaigns. We of activities over lot We've and techniques less be Senior phenomenal. be me lot great a been similar can of have Marketing, efforts a if lucky and results several at it our a been Let increase get done a results take we TV social of already Yes, first have color got marketing and our President it other new whether tested of add marketing or to it. experience of lot John media, streamline commercial past any he's spending. he's areas, spend. to him, there's

So he experience, on comes leaning as we're him. a professional, great

we're year. results our what the we spend kind to of saying, better So can after same to increase get that's levels or having year continue without even results

where the that's can that So leverage outcomes, come can because consistent better in that's hold anything? if John, spending yet levels where we have of that some leverage comes.

lot patient launching and comprehensively. more tuned and overlap and X well our very initiatives have to be No, demographic that to us way him coming we'll on the lot a has X Pickleball impact of some to with creativity you very sponsoring high reach it a come, of the of to said been patients national championships, stay new a group We're I very cost-efficient productivity, about next expertise the months. out which and able potential the quickly and in and here lot a only months got X here excited think more driven and Nathan's he's on efficiencies business. He's been impactful,

time. turn remarks. no showing I'd back questions it Julie I'm to closing like further to for now this at Dewey

time your and for joining We Thanks, appreciate everybody, us today. interest.

next please call. questions, and concludes If we you our you have reach forward look to This quarter. to out, talking more

in today's your This program. you conference. concludes the participation Thank for

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