• Revenue (Q4 2024): $68.7 million, a 10.4% increase over Q4 2023.
• Full Year Revenue (2024): $209.4 million, a 12% increase over 2023.
• Gross Margin (Q4 2024): 80.7%, compared to 81.6% in Q4 2023.
• Gross Margin (Full Year 2024): 80.4%, compared to 81.2% in 2023.
• Operating Expenses (Q4 2024): $55.7 million, down from $57.5 million in Q4 2023.
• Operating Expenses (Full Year 2024): $224 million, up from $203.4 million in 2023.
• Net Loss (Q4 2024): $0.5 million or $0.01 per share, compared to $6.3 million or $0.10 per share in Q4 2023.
• Net Loss (Full Year 2024): $55.7 million or $0.90 per share, compared to $49.5 million or $0.81 per share in 2023.
• Adjusted EBITDA (Q4 2024): $11.1 million, an improvement of 322% from Q4 2023.
• Adjusted EBITDA (Full Year 2024): Loss of $11 million, a 55% improvement from 2023.
• Cash Equivalents and Marketable Securities (End of 2024): $75.7 million, with access to an additional $26 million.
• 2025 Revenue Guidance: $224 million to $230 million, reflecting a 7% to 10% increase over 2024.
• 2025 Adjusted EBITDA Expectation: Break-even.
• 2025 Cash Burn Expectation: Decrease by approximately 50% compared to 2024.

• Warning! GuruFocus has detected 4 Warning Signs with TMCI.

Release Date: February 27, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Treace Medical Concepts Inc (NASDAQ:TMCI) reported a 10.4% revenue growth in Q4 2024, reaching $68.7 million, which was at the top end of their preliminary results.
• The company has a growing base of over 3,100 surgeon customers, which provides a ready audience for their expanding suite of technologies.
• TMCI's Lapiplasty system has treated over 120,000 patients since 2015 and is the dollar share leader in the US bunion market.
• The company introduced several new products, including the nanoplasty and percuplasty systems, which are designed to make minimally invasive osteotomies more accessible to surgeons.
• TMCI expects a positive impact from the increased reimbursement for CPT code 28,297, associated with Lapiplasty procedures, effective January 2025.

Negative Points

• Gross margin decreased slightly to 80.7% in Q4 2024 from 81.6% in Q4 2023, due to a product mix shift and increased inventory provisions.
• The company reported a net loss of $0.5 million in Q4 2024, although this was an improvement from a $6.3 million loss in Q4 2023.
• There is a potential risk of Lapiplasty cannibalization with the introduction of new osteotomy products.
• Q1 2025 is expected to be a challenging quarter due to tough year-over-year comparisons, with anticipated low single-digit growth.
• Operating expenses increased to $224 million for the full year 2024, reflecting higher stock-based compensation and investments in product innovation.

Q & A Highlights

Q: Can you discuss the revenue guidance for 2025 and how it will be paced throughout the year? Will revenue be down in the first quarter due to seasonality, and should we expect it to accelerate through the year? A: Mark Hair, CFO, explained that Q1 will be a tougher comp, and they expect more growth opportunities post-Q1. The focus is on the back half of 2025, with new products being introduced to more surgeons, leading to increased growth in the latter part of the year. They do not expect a linear step-up each quarter but anticipate higher growth rates in Q2, Q3, and Q4.

Q: How do you see the new product pipeline impacting ASPs, unit volumes, and potential Lapiplasty cannibalization? A: John Treace, CEO, stated that the new products are expected to drive procedure volume rather than significantly impact ASPs. The comprehensive portfolio is designed to penetrate the market further, with natural guardrails around cannibalization between MIS osteotomy approaches and Lapiplasty. The focus is on targeting different segments of the bunion market.

Q: Could you elaborate on the profitability focus and how you plan to balance leverage with growth, especially with new products coming to market? A: Mark Hair, CFO, highlighted that the company has built a large direct sales team and is now seeing leverage from a more experienced sales force. The focus is on providing more products to the existing customer base without significant incremental costs, leading to improved leverage throughout the year.

Q: What early feedback have you received on the new products, and have you seen any competitive dynamics change since their launch? A: John Treace, CEO, reported positive early feedback on the new products, which have been refined over several years. The competitive noise from mid-2024 has leveled out, and many surgeons who tried competitive products have returned to Lapiplasty.

Q: How do you view the Zimmer-Aragon deal in terms of potential market disruption and long-term competitive dynamics? A: John Treace, CEO, stated that they are focused on growing their product line and running their business, and it remains to be seen how the acquisition will affect the market.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.