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01/11 07:32
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call presents mixed signals: while revenue and adjusted EBITDA show improvement, the net loss has increased, and the core Lapiplasty business is facing challenges due to shifting preferences towards minimally invasive procedures. Additionally, management's refusal to provide 2026 guidance and reliance on general optimism without specifics raises concerns. The decrease in gross margin and increased operating expenses further contribute to a negative sentiment, despite progress in profitability and liquidity management.
Revenue $50.2 million in Q3 2025, an increase of $5.1 million or 11% year-over-year. Growth was mainly driven by an increase in bunion procedure kits sold compared to the prior year.
Gross Margin 79.1% in Q3 2025 compared to 80.1% in Q3 2024, a slight decrease due to changes in product mix and other factors.
Operating Expenses $55.4 million in Q3 2025, an increase of 8% compared to $51.3 million in Q3 2024. The increase reflects higher medical education, surgeon training events, restructuring charges, and litigation expenses.
Net Loss $16.3 million or $0.26 per share in Q3 2025, an increase of 6% compared to $15.4 million or $0.25 per share in Q3 2024. The increase was due to higher operating expenses.
Adjusted EBITDA Loss $2.6 million in Q3 2025, a reduction of 49% compared to $5.1 million in Q3 2024. This improvement reflects progress towards profitability goals.
Year-to-Date Net Loss $49.6 million in 2025, a decrease of 10% compared to $55.2 million in 2024. The improvement was driven by better cost management and operational efficiencies.
Year-to-Date Adjusted EBITDA Loss $10.1 million in 2025, a decrease of 54% compared to $22.1 million in 2024. This reflects significant progress in improving profitability.
Total Liquidity $80.6 million as of September 30, 2025, compared to $90.7 million at the end of Q2 2025. The decrease was due to operational cash usage, though cash usage decreased year-over-year by 17% in Q3 and 58% year-to-date.
New Bunion Correction Systems: Developed and commercialized 3 new bunion correction systems, expanding the product portfolio to address 100% of surgeon preferences for bunion correction.
Lapiplasty Lightning Platform: Introduced next-generation instrumentation to increase precision and speed of Lapiplasty 3D correction.
Percuplasty Compression Screw System: Launched a new line of compression screw implants to complement the SpeedPlate platform.
Market Share Expansion: Broadened customer base by attracting surgeons who prefer metatarsal osteotomy procedures and expanded relationships with existing customers.
Distributor Strategy: Entered into stocking relationships with key distributors, resulting in $6 million in stocking distributor sales in Q3.
Revenue Growth: Achieved $50.2 million in Q3 revenue, an 11% increase from the prior year.
Cost Management: Reduced adjusted EBITDA loss by 49% in Q3 and decreased cash usage by 17% in Q3 and 58% year-to-date.
Strategic Shift to Comprehensive Solutions: Transitioned from a single technology company to a comprehensive bunion solutions provider, leveraging a broader product portfolio.
Focus on Profitability: Implemented cost control measures and focused on improving profitability and reducing cash burn for 2026.
Revenue Growth: The company experienced slower-than-expected revenue growth, with a revised outlook of only 1%-2% growth for 2025 compared to 2024. This is attributed to economic conditions, softer consumer sentiment, and a shift in product mix.
Product Mix Shift: There is a shift in sales from higher ASP (Average Selling Price) Lapiplasty systems to lower ASP bunion systems, which impacts overall revenue levels.
Economic Conditions: Broader economic conditions and softer consumer sentiment are leading to deferrals of elective bunion procedures, particularly for commercially insured patients.
Distributor Sales Timing: The company benefited from a one-time increase in sales to stocking distributors in Q3, which is not expected to recur at the same levels in Q4, creating a headwind for future quarters.
Surgeon and Patient Preferences: Surgeons and patients are shifting preferences towards minimally invasive osteotomies, which is impacting the adoption of the company's flagship Lapiplasty system.
Adoption of New Products: While new products are gaining traction, the adoption rate is not yet sufficient to offset pressures on the Lapiplasty line.
Operating Expenses: Operating expenses increased by 8% year-over-year, driven by medical education, surgeon training events, restructuring charges, and increased litigation expenses.
Profitability Challenges: Despite improvements in adjusted EBITDA, the company is still operating at a loss, with a net loss of $16.3 million in Q3 2025.
Revenue Expectations: The company revised its full-year 2025 revenue guidance to a range of $211 million to $213 million, representing growth of 1% to 2% compared to full-year 2024.
Profitability and Adjusted EBITDA: The company expects a loss in adjusted EBITDA in the range of $6.5 million to $7.5 million for the full year 2025, reflecting a 32% to 41% improvement over the prior year. Additionally, cash use is expected to decrease by 43% to 47% for the full year 2025 compared to 2024.
Market Trends and Consumer Sentiment: The company is experiencing headwinds from broader economic conditions and softer consumer sentiment, leading to deferrals of elective bunion procedures. A survey indicated a 7% decrease in bunion surgical volumes year-to-date through October 2025 compared to the same period last year.
Product Portfolio and Market Share: The company plans to continue training its 3,100+ current customers on new systems and focus on adding new surgeon customers. Over 20% of surgeon customers have adopted one or more of the new bunion technologies within one quarter of launch. The company expects increased adoption of its portfolio to drive market share gains and expand procedure volumes.
Innovation Pipeline: The company plans to deliver a robust pipeline of new innovations expected to impact 2026, including the Lapiplasty Lightning platform, Percuplasty compression screw system, and new SpeedPlate implants. These innovations aim to enhance precision, speed, and procedural opportunities.
Sales Strategy and Leadership: The company plans to strengthen its sales team by adding experienced foot and ankle sales professionals and leveraging new commercial and sales leadership to improve productivity and impact in 2026 and beyond.
Cost Structure and Profitability: The company is taking actions to control its organizational cost structure, aiming to improve profitability, adjusted EBITDA, and reduce cash burn in 2026.
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The earnings call presents mixed signals: while revenue and adjusted EBITDA show improvement, the net loss has increased, and the core Lapiplasty business is facing challenges due to shifting preferences towards minimally invasive procedures. Additionally, management's refusal to provide 2026 guidance and reliance on general optimism without specifics raises concerns. The decrease in gross margin and increased operating expenses further contribute to a negative sentiment, despite progress in profitability and liquidity management.
The earnings call highlights a 7% revenue growth and improved net loss, indicating positive financial performance. New product launches and strong surgeon engagement suggest potential for market expansion. Despite slight gross margin decline, expense reduction and improved EBITDA loss reflect financial health. Management's optimistic guidance and expectations for Q4 and 2026, combined with a strong product pipeline, support a positive outlook. The Q&A session reinforces confidence in future growth, although some uncertainty remains. Overall, the sentiment is positive, with potential for stock price increase.
The earnings call presents a mixed outlook. Positive factors include revenue growth, improved EBITDA, and new product launches. However, the net loss, competitive pressures, and slight decrease in gross margin temper enthusiasm. The Q&A section indicates strong interest in new products but lacks clarity on reimbursement impacts. Given the balance of these factors, the stock price is likely to remain stable, warranting a neutral sentiment.
The earnings call reveals strong financial performance with 10% revenue growth in Q4 and a 12% increase for 2024, despite a slight decline in gross margins. Guidance for 2025 shows continued revenue and EBITDA improvement. Product innovation and market expansion efforts are promising, though competitive pressures and supply chain challenges exist. The Q&A indicates positive sentiment from analysts, with expectations for higher growth in later quarters. No share repurchase plan is a minor negative, but overall, the combination of positive financials, optimistic guidance, and product pipeline supports a positive stock price reaction.
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