Q3 2022 Paragon 28 Inc Earnings Call
Except as required by law to update these statements.
Additional information concerning certain risks and uncertainties that may impact. These forward looking statements is contained from time to time in the company's SEC filings and in the press release that was issued earlier today. During this presentation, we will refer to the non-GAAP financial measure of adjusted EBITDA, a reconciliation to the most comparable GAAP financial measure net income is contained in our <unk>.
The release issued earlier today and with that I will turn the call over to Albert.
Thanks, Matt Good afternoon, and welcome to our third quarter 2022 earnings call I will provide an overview of our third quarter and give a business update.
Steve will then provide additional detail regarding our quarterly results and provide an overview of our 2022 revenue guidance. We will then open the call to Q&A.
Before we kick off we have officially eclipsed one year as a publicly traded company.
Been a phenomenal journey for Paragon 28.
This has been a year of substantial growth and investment and we are feeling great about the future.
So grateful for our team surgeon customers and all of our partners for driving Paragon 20, Eights continued success over the last 12 months, especially considering the challenging macroeconomic backdrop.
With that I'll.
I'll begin with our third quarter 2022 revenue performance.
We are very pleased with our third quarter results.
Total revenue for the third quarter was a record $46 million.
And growth of 28% compared to the third quarter of 2021.
Foreign currency headwinds reduced our third quarter net revenue and net revenue growth by approximately $800000 in two one percentage points, respectively as compared to the prior year period.
Third quarter U S revenue was a record $40 million representing growth of 25% compared to the third quarter of 2021.
Our U S growth is attributable to the success of our new product launches as well as increased surgeon adoption and utilization driven by investments in medical education.
These drivers ultimately resulted in strong increases in sales force productivity.
We have also significantly expanded our sales force over the last 12 months.
Third quarter International revenue was a record $6 billion.
Presenting impressive reported growth of 52% compared to the third quarter of 2021.
Growth in the quarter was once again, driven primarily by our three largest international markets of Australia, South Africa, and the United Kingdom.
Spain also a top driver of our international growth due to increased distribution capabilities.
I will now share details around our key U S revenue growth drivers.
Our broad and innovative product portfolio has been and will continue to be the tip of the spear of Paragon 28 success.
Our exciting and consistently fresh product line enables us to build deeper relationships with existing surgeon customers and add new surgeon customers and importantly, it is a key enabler for the expansion of our outstanding sales force.
We have continued to innovate across the portfolio and have launched 10 products year to date in 2020 too.
Many of these new products were in categories, where we see great potential to improve outcomes and a runway for future growth.
Through the third quarter of 2022, we have generated strong momentum with the launch of new products that are highly complementary to the existing products in our portfolio.
We are very excited about our recent launches in external fixation and soft tissue. As these products are often used in conjunction with other procedures.
So far 2022 has been a robust year of product development, adding to our tremendous momentum over the past several years.
We are approaching 80 product families launched since our inception as a company in 2011.
Including nearly 50 launches since the start of 2017.
We are focused on driving R&D to improve patient outcomes and address complex foot <unk> ankle cases with high complication rates.
For example in 2020, we launched our Phantom hindsight PTC now for ankle fusion as well as our apex <unk> total ankle replacement in 2021, we added complementary products such as May even patient specific instrumentation and the fast track laser alignment system, both for our total ankle replacement.
Through 2022, we have also launched a line of external fixation products with monkey bars, and monkey rings as well as soft tissue solutions, such as grappler suture anchor phenotype to point out in our react stabilization system.
We expect to continue this pace and focus within product development and will bring a balance of new and next generation technologies to market over the next few years.
I've mentioned many of these new product launches have been in complex cases, like total ankle fractures and severe sharklet deformities, which have brought us more opportunities in medical education, with both new and existing surgeon customers. While also attracting new sales talent with expertise in such cases.
Through the rest of 2022 and going forward, our product pipeline remains as strong as ever and is expected to continue to drive future growth.
Of course, our great products only get us so far without the strength and culture of our phenomenal sales force, which has continued to consistently execute.
Once again sales force productivity in the U S increased on a double digit percentage basis compared to the prior year quarter, a testament to the quality of our sales team products and medical education programs.
We ended the third quarter of 2022 of approximately 200, producing sales reps and while we don't report our total sales force head count.
Total sales force head count grew nearly 15% year over year during the third quarter.
We expect productivity gains to continue in the size of our total sales force, including producing sales reps to increase over time.
During the third quarter, we did business with nearly 1900 U S surgeon customers, including 587 U S. Producing surgeons both records for <unk> 28, and an increase compared to the prior year period at 12% and 23% respectively. The.
The number of surgeon customers and producing surgeon customers also both increased compared to the second quarter of 2022.
With approximately 15000 potential surgeon customers that treat foot and ankle and the U S. We have only scratched the surface and have a long runway of growth in front of us.
On to some more details regarding medical education and surgeon training.
589 surgeons attended in person P 28 medical education events in the third quarter of 2022, bringing the total number of surgeons trained in person at Paragon 28 medical education events to nearly 2000 year to date.
We launched our mobile lab early in the third quarter, which provides surgeons greater flexibility and convenience access training for our innovative product lines.
We are excited about the results from our first quarter on the road with well over 100 surgeons trained across 27 cities.
Internationally, we recently hosted a two day medical education event in London called Big foot with 123 surgeons attending from seven international countries during.
Turning the program, leading international Surgeons made 46 didactic presentations across six distinct foot and ankle clinical topics. It was an amazing event and we are sincerely thankful for the incredible physician faculty from around the world that help make it a great success.
While we're on international Medical Education. This week, we are hosting 45 surgeons from around the world The largest international medical education event held at our facility in Denver.
The curriculum for this event includes a series of presentations and category Collab training, allowing surgeons to learn solutions and techniques spanning our entire portfolio.
We are thrilled to have such strong engagement and interest coming from our international markets and customers.
Next I wanted to touch on some of the Paragon 28 clinical body of work.
Since inception, we have invested heavily in non biased clinical research to highlight opportunities for improvement in foot and ankle.
Eight Paragon 28 products have been featured 46 journal publications and scientific meetings, including nine completed since our IPO.
We have also published 14 White papers and case studies on our products in collaboration with various surgeons three of which have been published since our IPO.
Each of these studies have helped verify areas of opportunity to improve foot and ankle surgery or otherwise demonstrated various benefits of our solutions.
Separately, we have completed 32 clinical studies with Dizzy or focused on the capability of our algorithms.
At this time, we have numerous additional studies underway and we plan to continue investing in our growing body of clinical data to drive improved outcomes in our market.
A lot of our clinical work feeds directly into our smart 28 initiatives to increase better patient specific solutions and drive more reproducible outcomes using various forms of enabling technologies.
As we've mentioned in prior calls.
28 includes more tangible products like patient specific instrumentation and guides.
<unk> printed patient specific implants, a more abstract solutions like software used for preoperative planning and diagnostics.
Operative support for post operative patient tracking.
Does your in particular, we are increasingly able to instantly make diagnoses and answer questions that previously could take months if not years.
A growing body of clinical work combined with the enabling technologies, we're bringing to market through smart 28.
Led to increased surgeon interest from both existing and potential new customers, while also getting us valuable insight to advanced product development.
We expect the momentum we have in clinical and enabling technologies to continue in the future and allow Paragon 2008 to drive further market expansion and share capture.
In summary, we are more optimistic than ever about our business and I am extremely proud of our team's execution throughout 2022.
We've taken full advantage of our increased visibility since becoming a public company, which has increased our access to both surgeons and hospitals and it has allowed us to attract great new talent throughout the organization.
We have grown our business an impressive 24% year to date.
<unk>, the very challenging business environment.
Further in the last 12 months, we have made targeted investments to position the business for long term sustainable and profitable growth.
We are very excited about the success, we've had expanding our product development efforts expanding our sales force and driving record levels of medical education. We've also made tremendous progress in optimizing key corporate and operational functions, including launching SAP.
Which we expect to drive increased effectiveness efficiency and profitability in our business.
We also just turned the corner on our first full year as a public company in late October we were honored to celebrate our one year anniversary with the closing Bell ceremony at the New York Stock Exchange.
I'm, so thankful for our employees and sales representatives around the world for their diligent efforts and dedication to fulfilling our mission to continuously improve outcomes and experiences of patients suffering from foot and ankle condition.
Lastly, after the devastating events caused by hurricane Ian I want to especially thank our teammates in Florida, and the Atlantic Coast for their amazing commitment and resilience. Our Hearts go out to all those affected both within the Paragon 28 family and otherwise.
I will now turn it over to Steve.
Thank you Albert moving to our third quarter 2022 financial results.
Paragons revenue for the third quarter of 2022 was $46 million representing.
Representing 28% growth compared to the third quarter of 2021.
Foreign currency headwinds reduced quarterly net revenue and net revenue growth by approximately $800000 in.
Two one percentage points respectively.
Gross profit margin for the third quarter of 2022 with 81, 5%.
Compared to 82% in the third quarter of 2021.
The improvement was primarily due to lower excess and obsolete inventory expense.
Total operating expenses during the third quarter were $46 million compared to $43 9 million in the second quarter of 2022.
Operating expense leverage improved for the quarter as operating expenses as a percentage of net revenue decreased by 330 basis points.
Since our IPO in October of 2021, we have made targeted and opportunistic investments to drive long term sustainable growth.
Including investments in R&D.
Sales and marketing to expand our sales force and global medical education programs.
And in the company's infrastructure to scale with the Companys rapid growth.
These investments have also contributed to our consistently strong performance since our IPO.
Revenue growth through the first nine months of 2022 with 24% and was fueled by a 23% expansion of our producing U S. Surgeon base continued double digit increases in year over year U S sales force productivity and record international revenue.
Including 52% reported growth for the quarter.
Moving to further details on the P&L.
Research and development expense was $6 3 million or.
Currently 14% of revenue for the third quarter of 2022, consistent with the previous quarter.
Selling general and administrative expense was $39 7 million for the third quarter of 2022.
Compared to $38 million in the second quarter of this year.
Third quarter, adjusted EBITDA was $2 $7 million loss compared to the $3 $2 million loss in the second quarter of 2022.
Turning to liquidity.
Total liquidity was $116 million at September 32022.
Including $56 million of cash and up to $60 million of cash available via our amended senior credit facility.
Our strong liquidity position.
Bind with our anticipated increased operating leverage moving forward and more normalized working capital and Capex trends.
<unk> 28 to operate without future financings to fund operations.
Before turning to our increased 2022 revenue guidance, a few comments on macroeconomic and other external factors and their impact on <unk> 28.
Notwithstanding the strong momentum in our business, we remain mindful of the current macroeconomic environment.
Including the potential for reduced elective foot and ankle procedures inflationary impacts and staffing shortages.
However, our company and team are resilient and have delivered strong results in past difficult business environments.
Including a 24% year to date reported net revenue growth rate.
The global supply chain remains challenging, but we are confident in our teams and vendors abilities to effectively manage these risks.
Consistent with remarks from our past earnings calls, we have and May continue to Opportunistically increase inventory and instrument purchases to ensure that we have the product on hand to meet the continued strong demand for our products.
And finally, we expect some degree of Covid headwinds on elective procedures to remain but we do not expect these headwinds to be significant.
Now turning to our increased 2022 revenue guidance.
We have increased our 2022 net revenue guidance by $3 5 million to $179 $5 million.
Net revenue growth for 2022 is now expected to be 22% compared to our previous guidance of 19%.
The increased net revenue guidance includes the impact of stronger foreign currency headwinds in both the third and fourth quarters of 2022.
Which are now expected to reduce 2022 net revenue and net revenue growth by approximately $2 4 million and one six percentage points respectively.
Our previously issued 2022 net revenue guidance included estimated foreign currency headwinds, reducing net revenue by $1 5 million and one percentage points respectively.
Our increased 2020 to annual net revenue guidance includes fourth quarter net revenue of.
<unk> $49 $6 million Rep.
Representing reported net revenue growth to 16% compared to the prior year quarter.
Our fourth quarter net revenue guidance includes the impact of stronger foreign currency headwinds, which are now expected to reduce fourth quarter net revenue and net revenue growth by approximately $900000 in two one percentage points respectively.
Our previously issued fourth quarter revenue guidance included estimated foreign currency headwinds, reducing net revenue and net revenue growth by $400000 and one percentage point respectively.
Our updated guidance for the fourth quarter. Therefore includes an operational net revenue increase of approximately $500000.
Our updated revenue guidance.
Currency translation rates for our international business remain consistent with current translation rates.
While we will not be providing specific adjusted EBITDA or cash flow guidance for 2022.
We expect to continue to see sequential improvements and increased operating leverage moving forward.
Also when we released our fourth quarter 2022 earnings. In addition to net revenue guidance, we plan to give guidance on adjusted EBITDA and cash flow for 2023.
That is the end of our prepared remarks.
Operator, please open up the lines for questions and answers.
Thank you.
I'd like to ask a question. Please press star followed by one on your telephone keypad.
If for any reason even without a question. Please press star followed by two again to ask a question. Please press star followed by one.
Mind, you. If you are using a speaker phone. Please remember to pick up your handset before asking your question.
The first question today comes from the line of Matthew O'brien from Piper Sandler. Please go ahead. Your line is now open.
Hey, guys. This is Phil on for Matt. Thanks for taking the questions and congrats on the one year Mark as a public company.
Just for starters, let's start on the guidance you raised by the same amount you beat here in Q3.
Certainly there is an FX impact there of about 500000 in the fourth quarter, but really just trying to get nitty gritty on why you didn't bring up fourth quarter expectations, maybe a bit more maybe what youre seeing in the market in terms of procedures.
Fourth quarter here is there any potential upside.
Hey, Phil This is Steve Thanks for the question and we're really really really pleased with our full year guidance and our performance year to date, our full year guidance.
24% on an operational basis, which is a significant increase from where we began the year.
And one thing that I would tell you about our fourth quarter guidance. It does include a $500000 increase as you as you referenced.
And also our quarterly growth this year has been 25%, 20% and now 30% operationally in this quarter and so growth isn't always linear in the markets that we operate in and part of that is due to some of the strange.
Year over year comps that we have due to.
Covid headwinds staffing shortages et cetera, but I would tell you our fourth quarter is going to be strong.
We're really excited about where we're positioned going into end of the year and we expect to have a terrific fourth quarter and close out through the year.
No great. That's very helpful. Thanks for that color and then I guess turning to the domestic side of things.
Unbelievable strength domestically growing both year over year and sequentially and what amounts to a seasonally soft quarter.
Especially one where other companies might have called out in our long dated surgeon vacation cycle. I guess, just what are you seeing in terms of market growth versus outright share, taking and again not to get too nitty gritty, but what specific areas of your business maybe showed the largest delta between that market.
And perhaps company growth, indicating more share taking thank you.
Yes sure Phil This is Steve again, I would tell you.
And amplify what Albert said in his prepared remarks that new products are really the tip of the sphere of the growth for 28 has been and will continue to be.
And those products combined with the outstanding Medical Education, and medical education programs that we offer are bringing new products to our existing customer base and we're also attracting new customers as we referenced the growth in our producing surgeon count as well as our overall.
Surgeon count so new products are a great driver of growth for US. We've also added to our sales force, 15% additional people and that is clearly a driver for us as well and these are very talented individuals that are are doing a great job for us taking the Paragon 28 products to the street.
So new products sales force expansion on the back of the medical Education, and then outside of the United States. Just a terrific continued and poor performance in our three largest markets U K, South Africa as well as Australia.
And this quarter, we got a terrific contribution from our new distributor partners in Spain, which really added to a nice fourth quarter, our third quarter for us internationally.
Great great. Thanks, so much and my congrats on the one year Mark again.
Thank you. Thank you.
Thank you.
The next question today comes from the line of Kyle Rose from Canaccord. Please go ahead. Your line is now open.
Great Good evening, everybody and congrats on another strong quarter here very encouraging to see so I just wondered if we could.
Just talk a little bit about some of the uptake of the new products when we particularly when we think about the ex fix and some of the soft tissue there.
What's the early surgeon feedback and when we think about all of the medical education, you've been doing maybe just help us understand how many of those are.
Friends and family like doctors that are close to the business that are already.
Already customers versus new competitive.
Potential targets.
I'll take this one and good to speak to your call and thanks for the question and thanks for the comments.
The reality is that.
Steve was alluding to I think some of the products. We've launched more recently really since the end of 19 2021.
We're pretty high medical education demand products.
And the appetite for medical Education, right now is pretty strong I think surgeons everybody's got a little bit of.
Theres zoomed out a little bit so to speak and so I feel like there's just a really strong energy around getting there ironically as I'm, saying this we've got a great course going on here at our facility, where we've got 48 surgeons from around the world here Great Faculty.
And they're just taking in all of our products right now and so I.
I think the ratio Kyle to answer your question is still probably around 50, 50, where our medical education courses tend to see about 50% new surgeons depends on 28 and about 50% of our attendees roughly.
Our current users looking at additional products, but of course like what we've got going on right now even though there may be some focus on particular products is exposing them to the entire portfolio. Further in 2008 and then the other part of your question is soft tissue I think the response has been tremendous for some of the more recent launches.
Ex fix has been really strong soft tissue has been really strong and it's really demonstrating the complementary effect. Some of these products off to all of our other products.
Getting into these surgeries in a more meaningful way, which is fun to see and the response to that technology has been great.
So I hope that answers your question.
No it absolutely does.
And then I'll throw it to Steve here too.
You've talked about the investments in SAP.
Yes, just wanted to see I guess when does that.
When does that go live and then over what time period do you expect that to translate into some of the profitability you've talked about.
So Kyle we launched SDP in the United States on April one of this year.
And we're already starting to see benefits from that in terms of having visibility into products and.
And inventory management and getting the right products to the right place at the right time, but not too much.
Not more than an up more than the products that we need.
And it's going to translate and it is translating into profitability for us as well beyond inventory our teams have better visibility across the board to our operations on a monthly basis.
And we mentioned that we're going to provide guidance for 2023, specifically for EBITDA as well as cash flow when we release, our fourth quarter earnings. So we won't get into too much detail on that today, but we do expect.
Continued operating leverage even at a faster pace than what we saw this quarter.
We've really put in a nice baseline of investments in R&D sales force expansion medical education, and also infrastructure to run a public company.
Those investments won't continue at the pace that they have since the IPO just over a year ago.
Great. Thank you for taking the questions.
Thanks, Scott. Thank you. Thank you.
The next question today comes from the line of Mike Matson from Needham and company. Please go ahead. Your line is now open.
Yeah.
Yes. Thanks.
So you obviously launched a lot of new products and good to see that there is driving such strong growth or one of the components driving the growth of at least.
But with the soft tissue products and the <unk> products I know that those were kind of the mean.
Holes that you had in your portfolio. So from here on out to 'twenty three 'twenty four and beyond is it is it really going to be more about kind of launching.
Improved versions of the kind of existing products versus entering new categories are there still some.
Product categories.
Could could enter here.
Yes.
Thanks for the question Mike.
The reality is that.
That's the beauty of foot and ankle right. There is I think the exact number is about 130 to 134 indications that we need to address.
We werent really participating in those two segments, the external fixation and soft tissue meaningfully.
But with the product launches we've launched.
I still don't want to give the impression that we're done there there's still a lot of indications for us to look at and continue to expand both the experts in soft tissue.
And.
And I think that's true we still have I believe the exact numbers around 30 projects under active development today, and we've got a loan pipeline of areas, we need to address behind that so the good news is we continue to add complementary products and new indications.
On the other side of that is we just we haven't had time to really consider gen. Two on some of our core technology in and we will do that.
As we can we did launch <unk>, two <unk> and we launched a.
<unk> two point a version of our Phantom hind foot TTC now so we do we do hit some of those but.
We still have a lot of opportunity for areas new areas for us to be participating in.
Okay got it.
And I was wondering if you could give us an update on <unk>.
I apologize if I missed this in the prepared remarks, but.
Is it can you just remind us the Windsor is planning to commercialize that.
Where it will be applied first.
Okay.
Absolutely I will tell you that today, we are actively using does your meaningfully.
In our development process.
And integrating it into even some of the new products, we have under active development. Today. We're also integrating it with the additive orthopedics line. So a lot of internal work being done there.
And one of the comments I made in the prepared remarks is that we're just we're overwhelmed with how quickly we could answer questions given the three dimensional visibility that Disney or a software platform that gives us two deformities and planning.
I would expect to see something later in the year in 'twenty three.
On the commercial side.
And there is a really nice pipeline of opportunities for us to start integrating <unk> into some of the products. We've got today on the market, including some some of the new products that are being developed today.
Okay got it thank you.
Got it thank you.
Thank you.
The next question today comes from the line of Craig Bijou from Bank of America. Please go ahead. Your line is now open.
Yeah.
Hey, guys. Thanks for taking the questions and congrats on.
Another another strong quarter.
Wanted to start with.
Yeah.
Albert I want to start with your comment on the sales force head count.
I believe you said it was 15% year over year.
So I'm wondering if you could just provide a little bit of color of kind of where the where the sales force.
Hires that you're making where they're coming from are they experienced a foot and ankle reps.
And then maybe just.
Provide a little bit of color on kind of where they are in their productivity ramp. Obviously overall you guys are ramping productivity pretty nicely.
But I guess, just trying to get a sense of kind of new reps that have come on and how we should think about them being productive the back of her.
The rest of 'twenty, two and then even into 'twenty three.
Yes, maybe I'll take a stab at this one and then Steve if you have any color to put on here, but we mentioned are producing rep count is around 200.
But our overall sales force head count.
We anticipate increased around 15%, we don't typically report the overall sales count just because we do have people like you mentioned in different stages of their ramp up and integration with the company. So you've got some reps that are just getting there their understanding of our products or getting the relationships established with their hospital.
<unk> are their surgeons and.
And so you'll have a wide variety of people in those early stages.
And we tend to focus a lot of our information on the earnings calls at least on our producing rep count.
I will caveat there is some seasonal noise that comes with the producing rep count.
You tend to see some quarters, a little bit higher a little bit lower not reflecting turnover adds but just showing some seasonal changes there. The other part of that as we mentioned on the <unk>.
On a previous call that we do really empower our sales force to build the most effective.
Team to represent our portfolio and best be of service to our surgeon customers and so you sometimes have.
Some of our sales force finding ways to represent the 80 different product families. We've launched in the most meaningful way and Youll see some noise with that as well.
Hey, Craig its Steve I would just add to that that the best leading indicator that we are aware of to predict producing reps in the future as the overall growth in our sales force and our commercial team has done just a terrific job of expanding our feet on the street in almost every geography in the U S with both talented.
<unk>, perhaps and also reps new to the foot and ankle industry, who we expect to have the ability to become producing reps in the future.
So when you think about our producing rep count at 200 that is not a significant increase as im sure youre aware year over year, but what we expect in the future 'twenty three 'twenty four 'twenty five is all of these investments we've made to really drive that producing rep count and also continue to drive growth for us as a major lever of growth.
Both in those years.
And one more comment that I'll make on that is I feel like every product we launch.
Generates an attraction to a whole new subset of salespeople looking for different pieces of technology and really one of the most comprehensive portfolios in foot and ankle so.
The spotlight being a public company is something we've mentioned has been really beneficial to paragon.
And I feel like that on top of the products. We're launching is just we've got a really good energy around the sales force right now.
Got it that's helpful guys.
I was hoping you could expand a little bit on your on your comments on the international growth.
<unk> seen and obviously, it's been it's been strong.
But how big of a growth driver is it for call. It the next three to five years.
What does that actually entail.
I know you are.
You called out the market centric very strong and youre going deeper there.
But does it also entail expanding into other other international markets and really just kind of want to understand how big of a piece of the future growth the international side is.
Yes, no Craig it's really an area that we're excited about as.
As well to drive our future growth.
We put a really great team across all of Europe , whether youre looking at the head of sales Youre looking at the head of medical education, we've built out really strong infrastructure to support not only the markets that we're in today, but new markets and so.
We are expanding into new markets and I'll touch on those in just a moment, but I would tell you that our growth right now is really being driven by these amazing teams in the U K. We've recently added some some terrific folks there that are.
Really bringing.
Revitalization to the UK market.
That big foot meeting that Albert talked about.
With.
Remember the exact number of surgeons well over 100 in attendance.
Current customers and a lot of new customers potentially so the UK market is very exciting for us the Australian market. Similarly.
We put in place a lot of new leaders over the last two years and build out infrastructure. So we have a lot of runway in both of those markets and South Africa as a direct market for US has just been amazing.
And.
We estimate we have the number one market share position in South Africa, and it's a market that we can continue to grow and expand beyond those markets I mentioned, Spain, we have a new distributor in Spain, that's really really excited to get his hands in her hands on on these products and take them to the customers there in Spain beyond that we have.
Got really great opportunities in Germany, we just formed a subsidiary there we just opened an office there.
In Italy.
And also in certain export markets that were really targeting. So this is an area that we will continue to be a growth driver for us.
We will provide some color additional color when we give 'twenty three guidance.
What we expect each of those businesses to do and contribute but it's Mike it's.
It's a big part of our investment when we talk about the targeted investments the international markets have been a significant part of that as well.
And Craig if I could just add a little bit to that to outside of the revenue impact of some of these international markets.
First our ambition is to really help define this space and to contribute to foot and ankle in a meaningful way and we feel like we can't do that without the international balance to our business. So it's really important for us not just to be in some of these territories, but really to start sharing ideas and best practices around the world.
To really contribute to this space in a meaningful way.
Great. Thanks for taking the questions guys.
Sure. Thank you.
Thank you as a reminder, if you would like to ask a question. Please press star followed by one on your telephone keypad.
The next question today comes from the line of Dave <unk> from JMP Securities. Please go ahead. Your line is now open.
Hey, great Thanks, and congrats on the anniversary.
Great to see you ring, the bell and congrats on the.
The performance here.
Albert maybe just looking at the strength it seems like you're taking share based on the growth rates that we've seen for some of the submarkets, but I was wondering if you might comment even if it would just be maybe.
On fracture fixation and burn into kind of the two biggest.
On what Youre seeing there.
Your growth exceeded a lot of the things we're seeing across the ortho. So I'm just curious if youre seeing anything new on the competitive front or is there an acceleration in procedures coming out of Covid any color you might give that would maybe help explain some of the strength you are seeing.
Yeah.
Thanks for the comments on the one year anniversary and great to speak with you and thanks for the question.
Hi.
I'll tell you.
Just to highlight fracture fixation, because you mentioned that first I think that that's such a perfect example of the complementary and beneficial effect, we have to launching.
Additional products to address more and more of the needs of these particular areas and indications we launched the react stabilization system earlier this year that addresses the soft tissue component associated with ankle fractures.
And I think above and beyond the impact of that one particular product just really put a spotlight on all things around the fracture fixation portfolio generated a whole level of excitement we've got medical education events going on around those topics now and so I think thats such a great example of how.
Some of these new products.
Theyre not detracting from anything they're not cannibalizing, but they are really putting a spotlight back on the entire area there and we saw similar effects with.
The effect that <unk> has on the soft tissue side of bunion deformities and and that had a very similar effect on our entire bunion portfolio and our algorithm for addressing Bunny and deformities and so.
And then back in fracture fixation with things like the pin to bar external Fixator that we launched earlier this year.
Addressing the entire piece of the fracture, which is allowing the soft tissue swelling to subside and preparing you for internal fixation down the road, so just really complementary products.
And a lot of the products, we've launched really since 2019, and 2020 things like the ankle fusion portfolio in the total ankle replacement.
Those are those are products that are really geared towards medical education, and like I mentioned with the international Surgeons that are here right now I think every course that we do puts.
Puts a spotlight on the entire portfolio not just some of those new products, but everything we have to address these indications.
<unk> seems to feed on itself in and then I'll tell you that I'm just so proud of our sales force, we've got such an amazing sales team who just.
There are always figuring out ways to better service every single surgery, we do theyre, giving us constant feedback about areas, we need to be thinking about and how our products are performing.
And their ability to just represent our portfolio in a meaningful way is something we're really proud of.
Awesome. Thank you for that color.
I guess as a quick follow up you know you mentioned that 32 studies with Disney or Smart 'twenty progress.
Even if you look across extremities I'm just curious.
Upper and lower.
Are you seeing anything from the competition out there I mean, not saying commercialized, but like even on the study front.
I'm trying to get an idea of what kind of headstart you might have it seems like it might be fairly large but any thoughts there. Thank you.
Yes, so maybe to start that one I would tell you just philosophically the way, we think about research and I mentioned.
Just before that we're really excited about being a part of this space in a meaningful way.
Foot and ankle is still young and emerging segment of orthopedics and so.
We need some really meaningful research, we need to better understanding of the limitations of of the procedures. We are doing and maybe even considerations, we havent yet generated right and so we'd like to really do research well before theres a product in mind and we are committed to publishing that research.
It can help a surgeon in developing a different perspective on something we thought we knew yesterday.
We're committed to doing that and so a lot of that research you'll see that we publish.
There are things like animal studies that we've conducted to try to understand the soft tissue healing cascade and histologically evaluated the different stages of soft tissue healing to see if we can maybe cheat a little bit away from scar mediated healing and into more of a regenerative process using physiologic implants.
The feedback was really instrumental in developing the react stabilization screwed right.
And so we've got and we're really proud of that.
<unk> got a lot of research that's committed to a better understanding of the pathology in the indications.
We've also got and I think Europe is really triggered us to start thinking about an EU MTR initiatives that really.
Got us to start looking at.
The clinical efficacy of the products the technology, we have on the market and so we've got a lot of meaningful projects, there and I would think in that side of it.
David we're probably.
More universal there I think our competition is seeing similar pressure from the <unk> initiative to to work on some of those studies.
But I think where we really make an impact is that <unk>.
And biased.
Front research that ultimately drives the development process instead of the other way around.
Yeah.
Got it we all love unbiased research so thanks.
You got it.
Thank you.
There are no additional questions waiting at this time, so I'll pass the conference over to Albert <unk> for any closing remarks. Please go ahead.
Yeah. Thank you again for your time today, Steven I look forward to seeing many of you at future investor and industry conferences as well as individual meetings have a great day.
This concludes today's conference call. Thank you all for your participation you may now disconnect your lines.
Okay.
Okay.