Q3 2023 SI-BONE Inc Earnings Call

Speaker 1: Or.

Okay.

Speaker 2: Good afternoon and welcome to the Si Bones third quarter earnings conference call.

Good afternoon, and welcome to the Si bone third quarter earnings Conference call.

Speaker 2: At this time, all participants are needless and only mode. We will be facilitating a question and answer session towards the end of today's call.

At this time all participants are in a listen only mode. We will be facilitating a question and answer session towards the end of today's call.

As a reminder, this call is being recorded for replay purposes.

Speaker 2: I would now like to turn the call over to Sikib Iqbal. Senior Director of Investor Relations at Si Bone for a few introductory comments.

I would now like to turn the call over to keep it call soon.

Your director of Investor Relations at Si bone for a few introductory remarks, a few introductory comments.

Speaker 3: Thank you for participating in today's call. Joining me are Laura Francis, Chief Executive Officer and Ancho Maheshwari Chief Financial Officer.

Thank you for participating in today's call joining.

Joining me and Laura Francis Chief Executive Officer, and Anshul, Maheshwari Chief Financial Officer.

Speaker 3: Earlier today, SIBORN released financial results for the quarter ended September 30, 2023.

I leave to date and Si bone released financial results for the quarter ended September 32023.

Speaker 3: The copy of the pressure leak is available on the company's website.

A copy of the press release is available on the company's website.

Before we begin I'd like to remind you that management will make statements. During this call that include forward looking statements within the meaning of federal Securities laws, which are made pursuant to the safe Harbor provision of the private Securities Litigation Reform Act of 1095.

Speaker 3: Before we begin, I'd like to remind you that management will make statements during this call that include forward looking statements within the meaning of federal securities laws, which are made pursuant to the safe harbor provision of the private securities litigation reform act of 1995.

Any statements contained in this call that relate to expectations or predictions of future events results or performance are forward looking statements.

Speaker 3: futature events, results or performance are forward of.

Speaker 3: These forward-looking statements are based on the company's current expectations and inherently involved risk and un...

These forward looking statements are based on the company's current expectations and inherently involve risks and uncertainties.

Speaker 3: These risks include SIBONE's ability to introduce and commercialize new products and education.

These risks include anti bones ability to introduce and commercialize new products and indications.

Speaker 3: As I move the ability to maintain favorable reimbursement for its products and procedures.

<unk> ability to maintain favorable reimbursement for its products and procedures.

Speaker 3: impact of potential economic weakness on the ability and desire of patients to undergo elective

Impact of potential economic weakness on the ability and desire of patients to undergo elective procedures.

Speaker 3: FFO's ability to manage risks to its supply chain.

<unk> ability to manage risks to it supply chain.

The impact of future capital requirements, driven by new product introductions and risks to the continue renormalization of the healthcare operating environment.

Speaker 3: Impact of future capital requirements driven by new products introduced.

Speaker 3: and rest to the continued renormalization of the healthcare operating system.

Speaker 3: Other forward-looking statements include our examination of operating trends and our future financial expectations, such as expectations for surgeon training and adoption, active surgeons.

Other forward looking statements include our examination of operating trends and our future financial expectations second expectations for surgeon training and adoption.

<unk> surgeons, new products and clinical trial, and Gordon and are based upon our current estimates and various assumptions.

Speaker 3: clinical trial enrollment and are based upon our current estimates and various examples.

These statements involve material risks and uncertainties that could cause actual results or events to materially differ from those anticipated or implied by these forward looking statements.

Speaker 3: These statements involve material risks and uncertainties that could cause actual results or events to materially differ from those anticipated or implied by these forward statements.

During this call management may discuss certain non-GAAP measures, including the company's adjusted EBITDA results.

Speaker 3: During this call, ManageWidth made this up certain non-GAAP measures, including the company's adjusted EVA dot result.

Speaker 3: For a reconciliation of these non-GAAP measures to GAAP accounting, please see the company's full earnings release issued earlier today.

What are the reconciliation of these non-GAAP measures to GAAP accounting. Please see the company's full earnings release issued earlier today.

Accordingly, you should not place undue reliance on these statements.

Speaker 3: Accordingly, you should not place undue reliance on these stages.

For a list and description of the risks and uncertainties associated with our business.

Speaker 3: For a list and description of the risks and uncertainties associated with our business, please refer to the risk factors section of our most recent Form 10-K and Form 10-Q filed with the Securities and Exchange Commission. As I won't disclaim.

Please refer to the risk factors section of our most recent Form 10-K and Form 10-Q filed with the Securities and Exchange Commission.

Si bone disclaims any intention or obligation, except as required by law to update or revise any financial projections or forward looking statements, whether because of new information future events or otherwise.

Speaker 3: Accept, as required by law, to update or revise any financial projections or forward-looking statements, whether because of new information, future events, or other reasons.

Speaker 3: This conference call contains time sensitive information and is accurate only as of the live broadcast today, November 6, 2023 with that, I'll turn the call over.

This conference call contains time sensitive information and is accurate only as of the live broadcast today November six 2023.

With that I'll turn the call over to Laura.

Speaker 4: Thanks, Saqib. Good afternoon and thank you for joining us. I'm proud of our performance, as strengthening demand for our solutions allowed us to defy industry seasonality trends and deliver record worldwide revenue for the sixth consecutive quarter.

Thanks, Ken Good afternoon, and thank you for joining us.

Proud of our performance strengthening demand for our solutions allowed us to define industry seasonality trends and deliver record worldwide revenue for the sixth consecutive quarter.

Speaker 4: In the third quarter of 2023, we generated worldwide revenue of $34 million, an increase of 29% compared to the third quarter of 2022.

In the third quarter of 2023, we generated worldwide revenue of $34 million, an increase of 29% compared to the third quarter of 2022.

Speaker 4: The quarterly result was led by record US revenue of $32.3 million, which represents US revenue growth of 31% compared to the prior year period.

The quarterly result was led by record U S revenue of $32 3 million, which represents U S revenue growth of 31% compared to the prior year period.

This robust revenue growth also translated into continued improvement in adjusted EBITDA loss and cash outflow and moved us closer to our profitability and cash flow breakeven goal.

Speaker 4: This robust revenue growth also translated into continued improvement and adjusted EBITDA loss and cash outflow and moved us closer to our profitability and cash flow breakeven goals.

Speaker 4: We also achieved a major surgeon milestone in the third quarter with the number of active surgeons in the quarter exceeding 1,000 for the first time in the company's history, performing nearly 3,900 procedures.

We also achieved a major surge in milestone in the third quarter with the number of active surgeons in the quarter exceeding 1000 for the first time in the Companys history.

Firming nearly 3900 procedures.

Our confidence in the business as reflected in the updated 2023 revenue growth guidance of 28% 29%.

Speaker 4: Our confidence in the business is reflected in the updated 2023 revenue growth guidance of 28% to 29%.

Speaker 4: As we look toward 2024, with a market opportunity of nearly half a million annual procedures, we're in a distinguished position to capitalize on what we believe to be prolonged demand for our expanding portfolio and deliver strong and consistent revenue growth.

As we look toward 2024 with a market opportunity of nearly half a million annual procedures, where in a distinguished position to capitalize on what we believe to be prolonged demand for our expanding portfolio and deliver strong and consistent revenue growth.

Speaker 4: Before I discuss the progress across our key initiatives, I want to thank our employees for their focus and persistence to create this unique platform and for positioning us to deliver breakout growth. Your impeccable execution ensures we achieve our mission of helping thousands of patients rise up and reach for the stars.

Before I discuss the progress across our key initiatives I want to thank our employees for their focus and persistence to create this unique platform and for positioning us to deliver breakout growth.

<unk> execution, ensuring we achieve our mission of helping thousands of patients rise up and reached for the start.

Now, let me provide an update on our key initiatives as we look to extend our leadership position and drive strong long term growth.

Speaker 4: Now, let me provide an update on our key initiatives as we look to extend our leadership position and drive strong long-term growth.

Starting with sales infrastructure.

Speaker 4: Our direct sales team is our biggest asset as we expand our product portfolio and search and base.

Our direct sales team is our biggest asset as we expand our product portfolio and surgeon base.

Speaker 4: Our revenue growth and operating leverage over the last several quarters are the outcome of the investments in our seasoned, world-class commercial organization.

Our revenue growth and operating leverage over the last several quarters are the outcome of the investments in our seasoned world class commercial organization.

Speaker 4: At the end of the third quarter, our US commercial organization was comprised of 83 quota-bearing territory managers.

At the end of the third quarter, our U S. Commercial organization was comprised of 83 quota bearing territory managers.

Speaker 4: We complement our territory managers with clinical support specialists as well as a growing network of third-party sales agents for case coverage.

We complement our territory managers with clinical support specialists as well as our growing network of third party sales agents for case coverage.

Speaker 4: We also selectively place instrument sets at high-volume hospitals to meet demand.

We also selectively place instrument sets at high volume hospitals to meet demand.

This hybrid strategy allowed us to deliver nearly 30% average growth in both U S procedure volume as well as the U S active surgeon base over the last four quarters.

Speaker 4: This hybrid strategy allowed us to deliver nearly 30% average growth in both U.S. procedure volume as well as U.S. active surgeon base over the last four quarters.

Speaker 4: This growth has translated into trailing 12 month average revenue per U.S. territory of over 1.5 million dollars, representing a 38% productivity gain over the comparable trailing 12 month period.

This growth has translated into trailing 12 month average revenue per U S territory of over $1 $5 million, representing a 38% productivity gain over the comparable trailing 12 month period.

Moving down the surgeon engagement, we exited the third quarter with over 1040 active U S surgeons, representing approximately 30% growth over the third quarter of 2022.

Speaker 4: Moving on to surgeon engagement, we exited the third quarter with over 1,040 active U.S. surgeons, representing approximately 30% growth over the third quarter of 2022.

Speaker 4: This was the 11th consecutive quarter of double-digit year-over-year growth in our U.S. active surges.

This was the 11th consecutive quarter of double digit year over year growth in our U S active surgeons.

Speaker 4: To put it in perspective, we had approximately 1,000 surgeons perform a procedure in all of 2021, and now we have a larger number of surgeons perform procedures in a quarter.

To put it in perspective, we had approximately 1000 surgeons perform a procedure in all of 2021 and now we have a larger number of surgeons perform procedures in a quarter.

We're proud of this milestone which was the outcome of years of focus on driving surgeon awareness through education building, the best clinical evidence and expanding our portfolio of solutions to address our surgeons unmet needs.

Speaker 4: We're proud of this milestone, which is the outcome of years of focus on driving surgeon awareness through education.

Speaker 4: building the best clinical evidence, and expanding our portfolio of solutions to address our surgeons' unmet needs.

This elevated level of surgeon interest and engagement is a great forward looking indicator and underscores the long term growth trajectory of our business.

Speaker 4: This elevated level of surge in interest and engagement is a great forward-looking indicator and underscores the long-term growth trajectory of our business.

In the third quarter nearly half of the active surgeons added in the quarter performed at least one minimally invasive Si joint fusion procedure and in several instances. They also performed a pelvic fixation or for Chile fracture procedure.

Speaker 4: In the third quarter, nearly half of the active surgeons added in the quarter performed at least one minimally invasive SI joint fusion procedure, and in several instances, they also performed a pelvic fixation or fragility fracture procedure.

Speaker 4: We expect a complementary portfolio to drive deeper engagement and increase procedures per surgeon over time.

We expect our complementary portfolio to drive deeper engagement and increase procedures per surgeon overtime.

Turning to products and solutions.

Speaker 4: The U.S. procedure volume trends confirm that with iFuse 3D, iFuse Torque, and now iFuse Bedrock Granite, the value of our innovative, versatile, and complimentary product portfolio has positioned us as the top choice for surgeons looking for sacral pelvic solutions.

U S procedure volume trends confirm that with ICU three D. Ip's torque and now <unk> bedrock granted the value of our innovative versatile and complementary product portfolio has positioned us as the top choice for surgeons looking for safer pelvic solutions.

Speaker 4: iFuseTorque remains a key growth driver for us due to its expanded clearance covering SI joint dysfunction, trauma, and adult deformity.

Ip's torque remains a key growth driver for us due to its expanded clearance covering si joint dysfunction trauma and adult deformity.

Speaker 4: iFuse Torque provides complementary technology to iFuse 3D for our existing surgeons.

Ice's torque provides complementary technology to IP <unk> for our existing surgeons.

Speaker 4: It has also been a key driver of new surgeon engagement, as well as successful conversion of surgeons using competitive products when performing minimally invasive SI joint fusion procedures.

It has also been a key driver of new surgeon engagement as well as successful conversion of surgeons using competitive products when performing minimally invasive Si joint fusion procedures.

And trauma, we're engaged with major trauma center thought leaders and are encouraged by the adoption, we're seeing for eyepiece torque and safe insufficiency fractures.

Speaker 4: In trauma, we're engaged with major trauma center thought leaders and are encouraged by the adoption we're seeing for IT's torque and salience efficiency crack.

Speaker 4: At a recent Orthopedic Trauma Association event in October , there was tremendous excitement around our solution to address insufficiency traction.

At a recent orthopedic trauma Association event in October there was tremendous excitement around our solution to address insufficiency fractures.

Speaker 4: This is consistent with the increase in our trauma procedure volumes in the 3rd quarter of 2023, based on an annual incidence of over 120,000 insufficiency fractures in the US. The trauma opportunity is of strategic importance to us as a sacred public solutions leader and is an important avenue for growth over the long term.

This is consistent with the increase in our trauma procedure volumes in the third quarter of 2023.

On an annual incidence of over 120 insufficiency fractures in the U S. The.

Trauma opportunity is of strategic importance to us as the sacred pelvic solutions leader.

And is an important avenue for growth over the long term.

Speaker 4: What's equally exciting is the growing interest of trauma surgeons in the diagnosis and treatment of SI joint dysfunction and degeneration.

What's equally exciting is the growing interest of trauma surgeons and the diagnosis and treatment of Si joint dysfunction and degeneration.

Speaker 4: In the third quarter, over one-third of the procedures performed by trauma surgeons were SI joint fusion procedures.

In the third quarter over one third of the procedures performed by trauma Surgeons were Si joint fusion procedures.

Moving to ICU bed rock granted we're delighted with the outstanding performance of granite as we increase our physical capacity in the quarter to address surgeon demand.

The additional capacity positions us well for the current quarter historically, our seasonally strongest of the year.

Speaker 4: The additional capacity positions us well for the current quarter, historically our seasonally strongest of the year.

Speaker 4: The market reception and the pace of adoption underscores Granite's success and reaffirms our belief that it is becoming the standard of care for long construct procedures to the pelvis.

The market reception and the pace of adoption underscores granted success and reaffirms our belief that it is becoming the standard of care for long construct procedures to the pelvis.

Following the recent successful launch of our granite close had implant. We're also poised to introduce another granite line extension next year.

Speaker 4: Following the recent successful launch of our granite clothe head implant, we're also poised to introduce another granite line extension next year. We expect the line extension to accelerate our penetration of shorter, multi-level fusion procedures for the treatment of degenerative spine disorders, which already account for over 40% of granite cases today.

We expect the line extension to accelerate our penetration of shorter multi level fusion procedures for the treatment of degenerative spine disorders, which already account for over 40% of granted cases today.

Speaker 4: With over 130,000 annual target procedures, we believe the granite family of implants will be a crucial growth driver for us over the next several years.

With over 130000 annual target procedures, we believe the granite family of implants will be a crucial growth driver for us over the next several years.

Speaker 4: Along with the growing demand for granite, we're also seeing a consistent trend in surgeons using some combination of our products with granite to achieve two points of fixation across the SI joint on either side in long construct procedure.

Along with the growing demand for granted we're also seeing a consistent trend in surgeons using some combination of our products with granite to achieve two points of fixation across the Si joint on either side and long construct procedures.

This is driving a significant pull through opportunity for the post portfolio and a higher per procedure average selling price.

Speaker 4: This is driving a significant pull-through opportunity for the portfolio and a higher per-procedure average selling price.

Speaker 4: Before I hand the call over to Anshul, I'd like to provide some background on drivers of sacroiliac joint pain incidents in the U.S. and the question of the impact of GLP-1.

Before I hand, the call over to onshore I'd like to provide some background on drivers of separately, our joint pain incidents in the U S and the question of the impact of DLP ones.

Speaker 4: The primary cause of SI joint dysfunction and degeneration is the altered function of the ligaments and muscles supporting the SI joint.

The primary cause of Si joint dysfunction, and degeneration as the <unk>.

Altered function ligaments and muscles supporting the Si joint.

Changes in the position of the pelvis will also lead to changes in load transfer across the joint.

Speaker 4: Changes in the position of the pelvis will also lead to changes in load transfer across the joint.

Speaker 4: These factors are consistent with the patient demographics in our studies where over two thirds of patients were women of which nearly 80% previously had at least one child.

These factors are consistent with the patient demographics Center studies, where over two thirds of patients were women of which nearly 80% previously had at least one child.

Speaker 4: Additionally, the average BMI of the over 300 patients in our INCITE and PSY-5 studies was between 29 and 30, which closely approximates the average BMI of adult Americans.

Additionally, the average BMI of the over 300 patients in our insight and SIFI studies was between 29, and 30, which closely approximates the average BMI of adult Americans.

Speaker 4: Based on data from our clinical studies, it appears that sacroiliac joint pain is more strongly correlated with female gender and traumatic events, including pregnancy rather than VMI.

Based on data from our clinical studies. It appears the sacroiliac joint pain is more strongly correlated with female gender and traumatic events, including pregnancy rather than BMI.

Speaker 4: Within the deformity market, patients can be classified as those with adult idiopathic scoliosis or adult onset scoliosis.

Within the deformity market patients can be classified as those with adult idiopathic scoliosis or adult onset scoliosis.

Speaker 4: adult idiopathic scoliosis patients have had scoliosis since childhood, and it mainly results from abnormal systemic skeletal growth and asynchronous spinal neurobony growth, generally due to genetic, hereditary, or biomechanical factors.

Adult idiopathic scoliosis patients have had scoliosis since childhood.

And it mainly results from abnormal systemic skeletal growth and asynchronous spinal neuro bony growth generally due to genetic hereditary or bio mechanical factors.

Speaker 4: Adult onset scoliosis, which typically starts at the age of 50, but presents itself at an average age of 70, is driven by age-related asymmetric spinal degeneration and can produce global sagittal misalignment with central and foraminal stenosis.

Adult onset scoliosis, which typically starts at the age of 50, but presents.

<unk> itself and an average age of 70 is driven by age related asymmetric spinal degeneration and can produce global sagittal misalignment with central and Foraminal stenosis.

Speaker 4: Based on the data in our Sylvia study, the average patient BMI was between 29 and 30. There's no clear clinical evidence around cause-effect of high BMI on scoliosis, making it difficult to determine the direction of causality. Does high BMI cause spinal degeneration or does a painful spinal condition tend to correlate with a sedentary lifestyle and elevated BMI?

Just on the data in our Sylvia study the average patient BMI was between 2930.

There is no clear clinical evidence around cost effective high BMI and scoliosis.

It's difficult to determine the direction of causality.

This high BMI caused spinal degeneration or does a painful spinal conditions tend to correlate with a sedentary lifestyle and elevated BMI.

Speaker 4: Against this data backdrop, it is, in our opinion, not likely that widespread adoption of GLP-1 therapy and a resulting decrease in average BMI in the American population would have a significant impact on the incidence of SI joint dysfunction, trauma, or deformity that would meaningfully impact demand for our products in the near or immediate term.

Against the state of backdrop. It is in our opinion not likely that widespread adoption of <unk> therapy, and a resulting decrease in average BMI in the American population would have a significant impact on the incidence of Si joint dysfunction trauma or deformity that would meaningfully impact demand for our.

Products in the near or immediate term.

In 2018 study and the spine journal by them in at all of 244 adult spinal deformity patients indicated that BMI greater than 35 was associated with significantly worse, perioperative outcomes and higher cost compared to non obese patients.

Speaker 4: In 2018 study in the spine journal, Biomin et al of 244 adult spinal deformity patients indicated that BMI, grade 135, was associated with significantly worse period operative outcomes and higher cost compared to non-obesh patients.

Speaker 4: As such, surgeons cannot to want to operate on morbidly obese patients.

Such surgeons tend not to want to operate on morbidity obese patients and the consistent feedback from spine surgeons indicates that <unk> therapy for weight management becomes more widely available new surgery ready patients may come into our patient funnel as they lose weight.

Speaker 4: And the consistent feedback from spine surgeons indicates that if GLP-1 therapy for weight management becomes more widely available, new surgery-ready patients may come into our patient funnel as they lose weight.

Speaker 4: Additionally, as people increase their levels of physical activity and live longer, they will become eligible candidates for musculoskeletal procedures.

Additionally, as people increase their levels of physical activity and live longer they will become eligible candidates for musculoskeletal procedures.

Speaker 4: There's still a lot that is not known about the impact of GLP-1 drugs.

There's still a lot that is not known about the impact of <unk> one drugs.

Speaker 4: But our data shows that the primary causes of our target disease states are generally related to genetic factors, gender, traumatic events, history of pregnancy, and age-related changes. While it would be premature to predict the long-term implications of GLP1s, if any, on our muscular skeletal degeneration. In the intermediate term, there is the potential for lower population average BMI to increase the number of surgery eligible patients. ????, particularly if any patients are?? 8

But our data shows that the primary causes of our target disease States are generally related to genetic factors gender traumatic events history of pregnancy and age related changes.

It would be premature to predict the long term implications in <unk>, if any on our muscular skeletal degeneration in the intermediate term there is the potential for lower population average BMI to increase the number of surgery eligible patients.

With that I'll hand, the call over to onshore.

Thanks, Laura good afternoon, everyone.

Speaker 5: Thanks, Laura. Good afternoon, everyone. I will focus my comments today on third-quarter revenue trends, operating leverage, and liquidity.

I will focus my comments today on third quarter revenue trends.

Operating leverage and liquidity.

And with our updated 2023 guidance.

Speaker 5: Additionally, all the comparisons highlighted in my section will be versus the same period in the prior year, unless stated otherwise.

Additionally, all the comparisons highlighted in my section will be versus the same period in the prior year.

Unless stated otherwise.

Starting with our third quarter revenue.

As Laura noted, we delivered another record quarter with worldwide revenue of over $34 million.

Speaker 5: As Laura noted, we delivered another record quarter with worldwide revenue of over 34Million dollars, representing growth of approximately 29%.

Representing growth of approximately 29%.

Speaker 5: Third quarter U.S. revenue was $32.3 million, increasing approximately 31%.

Third quarter U S revenue was $32 3 million.

Increasing approximately 31%.

Speaker 5: Our U.S. revenue was driven by growth in procedure volumes, which rose by approximately 34%.

Our U S revenue was driven by growth in procedure volumes, which rose by approximately 34%.

Speaker 5: The photo consecutive quarter of over 30% grew up in the US case volume highlights the underlying patient

The fourth consecutive quarter of over 30% growth in the U S case volume.

Highlights the underlying patient demand for our procedures.

Speaker 5: The ASP in the quarter reflects the evolving procedure mix as the expanded use of granite in degenerative procedures to the pelvis.

The ASP in the quarter reflects the evolving procedure mix Sp X.

<unk> use a granted in degenerative procedures to the pelvis resulted in an increase in to implant granted cases in the quarter.

Speaker 5: Resulted in an increase in two implant grant cases in the.

Speaker 5: International revenue was $1.7 million implying nearly flat revenue.

International revenue was $1 7 million.

Implying nearly flat revenue.

Speaker 5: We saw strong performance in France and are encouraged by the improvement in the youth.

We saw strong performance in France and are encouraged by the improvement in the U K.

Speaker 5: We are focusing our commercial efforts on revitalizing growth in Germany and the rest of Europe through expanded surgeon engagement.

We are focusing our commercial efforts on revitalizing growth in Germany, and the rest of Europe through expanded surgeon engagement.

Speaker 5: Additionally, given the reception for torque in the US, we are diligently working on getting notified body clearance to launch torque in EMEA.

Additionally, given the reception for <unk> in the U S. We are diligently working on getting notified body clearance to launch <unk> in EMEA.

Moving to gross margin and operating leverage.

Speaker 5: Our gross margin in the quarter was 79% in line with our expectations.

Gross margin in the quarter was 79% in line with our expectation.

Speaker 5: Consistent with recent quarters, the gross margin reflects the impact of procedure and product mix higher total.

Consistent with recent quarters, the gross margin reflects the impact of procedure and product mix.

Higher total cost of pork and granted.

Speaker 5: increase in depreciation from the deployment of instrument trays to support the growing demand for them.

Increase in depreciation from the deployment of instrument trees to support the growing demand for them.

Speaker 5: depreciation associated with our second facility in Santa Clara and higher.

Depreciation associated associated with our second facility in Santa Clara.

And higher freight costs.

Speaker 5: Operating expenses were $38.1 million in the quarter, representing 6% growth.

Operating expenses were $38 1 million in the quarter, representing 6% growth.

Speaker 5: The increase in operating expenses was driven by higher commission associated with the revenue growth, as well as increase in R&D and other commercial

The increase in operating expenses was driven by higher commissions associated with the revenue growth as well as increase in R&D and other commercial activities.

Speaker 5: We are proud of our demonstrated track record of investing in infrastructure to drive robust revenue growth and then translating that to healthy operating leverage over the last several.

We are proud of our demonstrated track record of investing in infrastructure to drive robust revenue growth and then translating back to healthy operating leverage over the last several quarters.

Speaker 5: Going forward, we remain focused on investing in R&D and clinical research, which are crucial to delivering strong and sustainable revenue growth while progressing towards breakthrough.

Going forward, we remain focused on investing in R&D and clinical research, which are crucial to delivering strong and sustainable revenue growth.

While progressing towards breakeven.

Our net loss was $10 million for the quarter or <unk> 25 per diluted share.

Speaker 5: Our net loss was $10 million for the quarter, or $0.25 per diluted.

Speaker 5: compared to a net loss of $14.2 million, or $0.41 per diluted share in the prior year.

Baird to a net loss of $14 2 million.

Or <unk> 41 per diluted share in the prior year.

Speaker 5: representing a 29% reduction in net law.

Representing a 29% reduction in net loss.

Speaker 5: As a reminder, the earnings per diluted share for the third quarter of 2023 are impacted by the increased number of shares outstanding from the May follow-on stock offer.

As a reminder earnings per diluted share for the third quarter of 2023 are impacted by the increased number of shares outstanding from the may follow on stock offering.

Adjusted EBITDA loss in the quarter improved 44% to $3 $9 million.

Speaker 5: Adjusted EBITDA loss in the quarter improved 44% to $3.9 million versus $6.9 million in the prior year.

Versus $6 9 million in the prior year period.

Speaker 5: Adjusted EBITDA loss also improved sequentially by approximately 18%.

Adjusted EBITDA loss also improved sequentially by approximately 18%.

Turning to liquidity.

We exited the third quarter with a solid balance sheet, including approximately $167 million in cash and marketable securities.

Speaker 5: We exited the third quarter with a solid balance.

Speaker 5: including approximately a hundred and sixty seven million dollars in cash and marketable security are cash usage in the quarter.

Our cash usage in the quarter was $2 7 million.

On a year to date basis cash used in operating activities was $16 4 million.

Speaker 5: On a year-to-date basis, cash used in operating activities was $16.4 million, an improvement of 53%, compared to $34.9 million in the first three quarters of the prior year.

An improvement of 53% compared to $34 9 million in the first three quarters of the prior year.

We are pleased with our trajectory of cash utilization in the last several quarters, while making investment in long term growth initiatives, including building incremental surgical capacity to support the anticipated not for our new products.

Speaker 5: We are pleased with our trajectory of cash utilization in the last several quarters, while making investment in long-term growth.

Speaker 5: including building incremental surgical capacity to support the anticipated demand for our new products. Finally, moving to our updated guidance for the year.

Finally, moving to our updated guidance for the year.

Based on the strong performance throughout 2023 as well as the momentum exiting the third quarter, we are increasing our full year 2023 worldwide revenue guidance.

Speaker 5: as well as the momentum exiting the third quarter, we are increasing our full year 2023 Worldwide Revenue Guide.

Speaker 5: A revised 2023 Annual Worldwide Revenue Guidance is $136 to $137 million.

Our revised 2023 annual worldwide revenue guidance is $136 million to $137 million.

Speaker 5: up from a previous guidance of $132 to $134 million.

Up from our previous guidance of $132 million to $134 million.

Speaker 5: disurvised guidance translates to year-over-year growth of approximately 28% to 29% versus the previous range of 24% to 20%

This revised guidance translates to year over year growth of approximately 28% to 29% versus the previous range of 24% to 26%.

Speaker 5: We expect the 2023 annual gross margin to be approximately 80% implying fourth quarter gross margin to be in the 78% area due to the factors discussed earlier. With that, I will turn.

We expect the 2023 annual gross margin to be approximately 80%, implying fourth quarter gross margin to be in the 78% area due to the factors discussed earlier.

With that I will turn the call over to the operator for questions.

Speaker 6: Thank you. Ladies and gentlemen, if you have a question, please press star 11 on your telephone to remove yourself from the question queue, you may press star 11 again. Please stand by while we compile the q amp a roster.

Thank you ladies and gentlemen, if you have a question. Please press star one one on your telephone.

Move yourself from the question queue, you May press Star one again, please standby, while we compile the Q&A roster.

Yes.

Okay.

Thank you for standing by our first question comes from the line of.

John Lee of Jefferies.

Yes.

Speaker 7: Hey guys, thanks for taking our questions and congrats on a good quarter and six quarters of record

Hey, guys. Thanks for taking our questions and congrats on a good quarter and six quarters of record revenue.

Speaker 7: Um, I guess to start, you know, appreciate the color on a potential GLP impact.

I guess to start I appreciate the color on a potential <unk> impact.

Speaker 7: It's a hot topic. I guess the comments from spine surgeons that, you know, lower BMI patients can fall back into the funnel, I guess I'm just wondering.

It's a hot topic.

The comments from spine surgeons.

Lower BMI patients can fall back into the funnel.

I guess I'm just wondering.

Have do or can you quantify that impact.

Speaker 7: Have they or can you quantify that impact? I mean, some of the ortho companies have talked about a 10% increase in near-term volumes as a reference.

Some of the Ortho company as I've talked about a 10% increase in near term volumes as a reference point.

Speaker 4: Young, thanks for the question on one. I think just talking about the overall addressable market is probably the right place to start. So, our, our.

Thanks for the question on <unk>.

I think just talking about the overall addressable market is probably the right place to start so are we're targeting an under penetrated annual market opportunity of nearly half a million procedures and so we have a pretty significant runway and we're confident in our ability to delay.

Speaker 4: You know, we're targeting an under penetrated annual market opportunity of nearly half a million procedures. And so we have a pretty significant runway. And we're confident in our ability to deliver strong and sustainable growth. I did talk a fair amount in my prepared remarks about the causes of disease state and the general demographic makeup of our typical patients.

<unk> strong and sustainable growth.

I did talk a fair amount in my prepared remarks about the cause of the disease state and the general demographic makeup of our typical patients.

As we highlighted in that discussion the primary causes for the disease state and I'm talking about Si joint dysfunction, specifically is genetic factors gender traumatic events history of pregnancy as well as age related changes and we even did provide some information.

Speaker 4: As we highlighted in that discussion, the primary causes for the disease state, and I'm talking about SI joint dysfunction.

Speaker 4: Specifically, is genetic factors gender traumatic events history of pregnancy as well as age related changes and we even didn't provide some in

Speaker 4: on the from our sci-fi and insight studies. And actually we did include some info on our saffron study, which is trauma as well. And those patients had average BMI between 29 and 30, which is average BMI for an American.

Shannon on the armor SIFI and insight studies and actually we did include some info on our SaaS <unk> study, which is trauma as well and those patients had average BMI between 29, and 30 witches, which is <unk>.

The average BMI for an American so.

Speaker 4: So based on the data that we shared from these various studies, what we're trying to do as opposed to some other companies, we're not speculating on what the issues actually are here. Instead, what we're saying is that we don't believe that a decrease in average BMI is going to have a significant impact on the incidence of that side joint dysfunction and as well as trauma or deformity that would be meaningful to the company.

Based on the data that we shared from these various studies.

What we're trying to do as opposed to some other companies we're not speculating on.

What the issues actually are here instead, what we're saying is that that we don't believe that a decrease in average BMI is going to have a significant impact on the incidents that si joint dysfunction, and as well as trauma or deformity that would be meaningful to the company.

Speaker 4: And then, if you're asking kind of the question on the flip side of will it actually generate more demand, I did mention that surgeons tend to not want to operate on morbidly obese patients, and that's consistent with the feedback that we've received from our spine surgeons.

And then if you are asking kind of the question on the flip side of will it actually generate more demand.

I did mention that surgeons tend to not want to operate on an morbidly obese patients.

And that's consistent with the feedback that we've received from our spine surgeons, indicating that <unk> therapy for weight loss management could become more widely available and have more surgery ready patients that are coming into the funnel, but instead of instead of giving you a number of what that percentage.

Speaker 8: indicating that GLP-1 therapy for weight loss management could become more widely available and and have more surgery-writing patients that are coming into the funnel, but instead of instead of giving you a number of what that percentage could be, what we're saying is that we don't think that there's a significant downside risk.

Could be what we're saying is that we don't think that theres, a significant downside risk and that there is an upside opportunity. That's here as people increase their levels of physical activity, they live longer and they'll become eligible candidates for procedures like ours.

Speaker 8: and that there is an upside opportunity that's here as people increase their levels of physical activity, they live longer and they'll become eligible candidates for procedures like ours.

Alright, great.

Speaker 7: All right, great. That's very helpful. I guess the follow up, I guess Laura for your comments in the press release on exiting the year with strong momentum, demand inflection at the early phases.

Very helpful.

I guess the follow up.

I guess Laura for your comments in the press release exiting exiting the year with strong momentum.

Demand inflection at the early phases.

Speaker 7: And me on the call you talked about momentum exiting the third quarter.

On the call you talked about momentum exiting the third quarter.

Speaker 7: I guess I'm kind of wondering, you know, what are you seeing in 4Q so far, if you can comment on it? You know, your guidance for the year implies high 20s growth for the year. Does, you know, your comment sort of imply 20-plus percent growth for next year as well? What can you comment about puts and takes for 2024?

I guess I'm kind of wondering.

<unk>.

What are you seeing in <unk>, so far as you can comment on it.

Your guidance for the year implies high twenty's growth for the year.

Does your comments sort of implies 20 plus percent growth for the next year as well.

Can you comment about puts and takes for 2024.

So thanks again for the question young what I'll do is I'll talk a little bit more about our Q3 performance and I'll have onshore talk a little bit more about the future. So I'm thrilled with our Q3 performance.

Speaker 8: So thanks again for the question, young. What I'll do is I'll talk a little bit more about our Q3 performance, and I'll have on shall talk a little bit more about the future. So I'm thrilled with our Q3 performance. It just shows our execution, delivering another record quarter, and outperformance, and it's really energizing for our team to deliver these strong results despite.

It just shows our execution delivering another record quarter.

Outperformance in it's really energizing for our team to deliver these strong results despite tip.

Speaker 8: You know, typical seasonality that you see in the summertime. So just to restate, we delivered 34% growth in US volume. It was the fourth consecutive quarter of 30% plus US volume growth.

Typical seasonality that you see in the summer time, so just to restate, we delivered 34% growth in.

<unk> U S volume it was the fourth consecutive quarter of 30% plus U S volume growth.

Speaker 8: We saw strong growth across all of our different procedures, and we certainly are benefiting from the rollout of the additional granite and torque surgical capacity, which does set us up very well for seasonally strongest fourth quarter, as well as 2024. Really excited about hitting that major milestone of over 1,000 active surgeons in the quarter. It was only

We saw strong growth across all of our different procedures and we certainly are benefiting from the rollout of the additional granted a torque surgical capacity, which does set us up very well for our seasonally strongest fourth quarter as well as 2024 really excited about hitting.

Major milestone of over 1000 active surgeons in the quarter it was only.

Speaker 8: in 2021 that we have a thousand surgeons do a procedure for the entire year.

In 2021 that we have 1000 surgeons do a procedure for the entire year.

Speaker 8: And then finally, if you look at our adjusted EBITDA loss improvement and the fact that

And then finally, if you look at our adjusted EBITDA loss improvement and the fact that we only.

Speaker 8: We only used less than $3 million in cash in the quarter.

Used less than $3 million in cash in the quarter. It really just shows you that.

Speaker 8: It really just shows you that that we're in a really strong position here proceeding forward.

That we're in a really strong position here proceeding forward.

Speaker 8: And it really is about the execution that we've been able to show here in 2023. And I mentioned it in your last question, but with around a half a million procedures still untapped, it puts us into a great position going forward.

And it really is about the execution that we've been able to show here in 2023.

I mentioned it in your last question, but with around a half a million procedures still untapped it puts us into a great position going forward. So let me have onshore talk a little bit more about the fourth quarter in 2024.

Speaker 9: So let me have on. She'll talk a little bit more about the fourth quarter in 2024. Yeah. Hey, I'm good to connect. Yeah.

Good to connect.

Speaker 10: With regards to, you know, our Q4 guide, as we've demonstrated throughout this year,

With regards to our Q4 guide.

As we've demonstrated throughout this year.

Speaker 10: You know, we've consistently out the form versus our own guidance just because of our execution and the strong demand that we're seeing.

Consistently outperformed versus our own guidance, just because of our execution and the strong demand that we're seeing.

Speaker 10: And some of that is reflected in our updated guide, which was higher than what we beat the market expectations by. So we feel really good about that. We're very focused on ending the year stronger, given the demand trends, given the record number of active surgeons and the significantly higher surgical capacity coming into the fourth quarter than we were going into the third quarter.

And some of that is reflected in our.

In our updated guide, which was higher than what we what we beat the market expectations by so we feel really good about that we're very focused on.

Ending the year stronger given the demand trends given the record number of active surgeons in the significantly higher surgical capacity coming into the fourth quarter than we were going into the third quarter. So we're really set up well there now in terms of 2024, we will provide guidance when we announce our fourth quarter.

Speaker 10: So, we're really set up well there now, in terms of twenty, twenty four, you know, we'll provide guidance when we announce the fourth quarter earnings, we're just focused on executing for the fourth quarter and to get strong. But, like, Laura talked about, when you think about the drivers of the robust growth in twenty, twenty three.

Earnings were just focused on executing for the fourth quarter and it gets strong but like Laura talked.

What about when you think about the drivers of the robust growth in 2023.

Speaker 10: All members are long term and are very specific to bone. So. Our time expansion initiatives through the product portfolio. That's an early stage of their life cycle. We've increased our surgical capacity and plan to add more. That's going to allow us to capitalize on the demand for granted and for.

I'll never is a long term and are very specific to our Si bone. So our tam expansion initiatives through the product portfolio. That's an early stage of their lifecycle, we've increased our surgical capacity and plan to add more that's going to allow us to capitalize on the demand for granted and tour.

Speaker 10: The surgeon interest remains at a record level and very elevated, so we feel really good about that. And then the, the last, the most important caliber of our sales force and the hybrid models playing out the way we expected it to be to drive deeper search engagement.

The surge in interest remains at a record level and very elevated so we feel really good about that and then the last name.

The caliber of our sales force in the hybrid model is playing out the way we expected it to be to drive deeper service engagement.

Speaker 7: So, we're positioned really well, and when you combine these levers with the procedures that are in our, in our camp, as well as the, the granted line extension rollout that we have planned for 2024. And other products in the future, you know, we feel pretty well set from a, from a going into 2024 perspective, but even beyond that feel very good about the setup there. All right, thank you very much for the color.

So were positioned really well and when you combine these levers with the procedures that are in our in our Tam as well as the granted line extension rollout that we have planned for 2024 and other products in the future.

Feel pretty well set from from us going into 2020 for perspective, but even beyond that feel very good about the set up there.

Alright, Thank you very much for the color.

Okay.

Thank you.

Please standby for our next question.

Our next question comes from the line of drew Ranieri of Morgan Stanley.

Speaker 2: Our next question comes from the line of Drew Ranieri of Morgan Stanley .

Speaker 11: Now, our inaugural thanks for taking the questions. Maybe just to start on utilization for a moment, it looks like utilization kind of held fairly consistent core over quarter despite kind of the average surgeons going up so significantly. So one, can you just maybe talk to us about what you're seeing in terms of utilization kind of on a same surgeon level and what kind of adoption drivers are there seeing there and then layering on some of the newer products?

Our onshore thanks for taking the questions.

Maybe just to start off.

On utilization for a moment.

It looks like utilization kind of held fairly consistent quarter over quarter. Despite kind of the average surgeons going up so significantly. So one can you just maybe talk to us about what youre seeing in terms of utilization kind of on the same surgeon level.

Kind of adoption drivers youre seeing there and then layering on some of the newer products.

Speaker 8: Sure, happy to do that. So I'm going to go back to the point about active surgeons in the quarter. We were above 1000 for the first time in our history. And so that 30% growth, that's a strong forward looking indicator. And it's our 11th consecutive quarter of double digit.

Sure happy to do that so I'm going to go back to the point about active surgeons in the quarter. We were above 1000 for the first time in our history.

And so that 30% growth that that's a that's a strong forward looking indicator.

And it's our 11th consecutive quarter of double digit growth in I think five plus quarters of 30% plus growth in that number. So I think what youre talking about is the surgeons per procedure.

Speaker 8: growth and I think five plus quarters of 30% plus growth in that number. So I think what you're talking about is the surgeon's per procedure.

Speaker 8: And so I think from that perspective, talking a little bit about our core business primary SI joint fusion.

And so I think from that perspective talking a little bit about our core business primary on Si joint fusion.

Speaker 8: If you think about the surgeons that we're adding, we're seeing around half of those surgeons that are getting my Mary F. I joint procedures, where is the other half approximately is

If you think about the surgeons that were adding we're seeing around half of those surgeons that are.

England area Si joint procedures, whereas the other half approximately is is doing some of our.

Speaker 8: is doing some of our pelvic fixation procedures or pelvic brain fracture.

Pelvic fixation procedures or pellet, bringing fracture procedures.

Speaker 8: procedures. And so what what we're seeing from that perspective is the ability for surgeons not just to do one procedure, but do all three procedures with us. So it's been a point of focus.

So what we're seeing from that perspective is the ability for surgeons not just to do one procedure, but do all three procedures with us. So it's been a point of focus for us.

Speaker 8: For us to have our surgeons do multiple types of procedures, we tend to keep surgeons that are doing multiple types of procedures with us. And then additionally, what we're doing is in our resident and fellows training, we have a focus on educating the next generation to ensure widespread use and adoption of our procedures as well.

To have our surgeons do multiple types of procedures, we tend to.

Keep surgeons.

That are doing multiple types of procedures with us.

And then additionally, what we're doing is in our residents and fellows training, we have a focus on educating the next generation.

To ensure widespread use and adoption for our procedures as well.

Got it thanks, Laura and maybe this is a question for both of you.

Speaker 11: Thank you, Laura. And maybe this is a question for both of you.

But when I think you mentioned you had about 83 reps.

Speaker 11: But when I think you mentioned you had about 83 reps.

Spending in the third quarter, so that number has been kind of steadily moving down yet.

Speaker 11: ending in the third quarter. So that number has been kind of steadily moving down, yet feels productivity is moving higher.

Sales productivity is moving higher.

Speaker 11: But can you talk a little bit more about what your expectation is for.

But can you talk a little bit more about what your expectation is for sales rep productivity and maybe the direct portion of the sales force and how.

Speaker 11: sales rep productivity, and maybe the direct portion of the sales force, and how a leverage opportunity can translate eventually into a just even a break even, and maybe a time if you're willing to provide that module. Thanks.

Leverage opportunity can translate eventually into adjusted EBITDA breakeven, maybe a time, if youre willing to provide that onshore. Thanks.

So let me start out with your question here, we're actually very pleased with the productivity gains that we've seen over the last several quarters and it's a big driver of our operating leverage that you've been seeing in our progress towards adjusted EBITDA breakeven.

Speaker 8: So I'll at least start out with your question here. We're actually very pleased with the productivity gains that we've seen over the last several quarters. And it's a big driver of our operating leverage that you've been seeing in our progress toward adjusted EBITDA break-even.

Speaker 8: Um, if you think about our, our revenue per territory, we have been saying.

If you think about or our revenue per territory, we have been saying.

Speaker 8: for the history of the company that our goal is to be between 1.5 to 2 million.

For the history of the company that our goal is to be between one $5 million to $2 million in revenue per territory per year and what we just did in this last quarter as we entered into that window of $1 5 million.

Speaker 8: in revenue per territory per year. And what we just did in this last quarter is we entered into that window of 1.5 million. And that's growing from, we were sub one million in fiscal year 2021. We were approximately 1.2 million last year. And now for that trailing 12 months at 1.5.

And that's growing from we were sub $1 million in fiscal year 2021, we were approximately $1 2 million last year and now for that trailing 12 months at one five.

Speaker 8: And so there are a number of different things that are driving the productivity here. So the first is just the caliber of our increasingly seasoned sales force.

And so there are a number of different things that are driving the productivity here. So the first is just the caliber of our increasingly seasoned sales force.

Speaker 8: And that would be the first thing that I would focus on that we really have a significant group of mature, highly trained, poor, debarering reps.

And that that would be the first thing that I would focus on that we really have a significant group of mature highly trained quota bearing reps. The second thing is that we actually have a hybrid commercial model at this point. So we are working with our territory managers as you said Theres 83.

Speaker 8: The second thing is that we actually have a hybrid commercial model at this point. So we are working with our territory managers. As you said, there's 83, the last quarter. We had 85 of those, but they're supported by clinical support specialists who helped them to cover cases.

The last quarter, we had 85 of those but they are supported by clinical support specialists to help them to cover cases, and then we have added a significant number of agents, who actually cover cases as well very specifically.

Speaker 8: And then we have added a significant number of agents who actually cover cases as well, very specifically.

Speaker 8: With our granite products. And so what we're seeing from a sales force perspective is what we were anticipating. And that is getting that leverage from the sales force, especially with some of these new products.

With our granite product and so what we're seeing from a salesforce perspective is what we were anticipating that is getting that leverage from the sales force, especially with some of these new products.

Speaker 4: and the utilization of our hybrid commercial model.

And the utilization of our hybrid commercial model.

And then drew on the adjusted EBITDA side, all the points Laura highlighted is what's driving our operating leverage in the business.

Speaker 10: And then drew on the adjusted EBITDA side. All the points Laura highlighted is what's driving our operating leverage in the business. And we're not gonna be providing specific timelines for when you get to break even, but when you think about the trajectory of our adjusted EBITDA, I think for the fourth quarter, we were at third quarter, we were at about 44%. Year to date, we've seen more than 50% improvement in year of year adjusted EBITDA. So feel really good about that. All right.

And we're not going to be providing specific timelines for when you get to breakeven, but when you think about the trajectory of our adjusted EBITDA I think for the fourth quarter. We were at third quarter. We were at about 44% year to date, we've seen more than 50% improvement in year over year adjusted EBITDA, So feel really good about that.

Our <unk>.

Trajectory to breakeven it is pretty linear to topline growth, that's where we see the leverage so.

We're very confident in our ability to deliver the year over year improvement in annual adjusted EBITDA as we go forward and like Laura said, we're progressing very quickly towards adjusted EBITDA break even.

Pretty quickly after that from a cash flow breakeven as well.

Thank you.

Our next question.

Please standby.

Speaker 2: Our next question comes from the line of Craig Bijou of Bank of America.

Our next question comes from the line of Craig Bijou a bank.

<unk> of America.

Speaker 12: Good afternoon. Thanks for taking the questions and congrats on another strong quarter.

Good afternoon. Thanks, Thanks for taking the questions and congrats on another strong quarter.

Speaker 12: I wanted to start and I appreciate the comments on the active surgeon dynamics. And I wanted to start with, if you're seeing any pull-through from some of the new surgeons that are doing the, using granite or the pelvic ring fixation procedures, if they were, if they're new to SI bone, and then if you got them, you know, a pull-through to do some of the core SI joint fusion procedures.

I wanted to start and I appreciate the comments on the active surgeon dynamics.

I wanted to start with.

If youre seeing any pull through from some of the new surgeons that are doing the using granted or the pelvic ring fixation.

Procedures.

They were.

If there are new to Si bone and then if you got them.

Pull through to do some of the core Si joint fusion procedures.

Yes, happy to happy to take that question, Craig and good to connect.

Speaker 10: Yeah, happy to take that question Craig and good to connect. There were a couple of data points that Laura highlighted in our prepared remarks as well. One was around just the ads that we had year of a year in active surgeons, nearly half of those ads were surgeons that did minimally invasive SI joint fusion. And in a lot of instances, there were surgeons who did that procedure along with deformity.

There were a couple of data points that Laura highlighted in our prepared remarks as well one was around just the adds that we had.

Year over year on active surgeons about <unk>.

Nearly half of those ads with surgeons that did minimally invasive Si joint fusion and in a lot of instances, where surgeons, who did that procedure along with deformity.

Speaker 10: And in trauma, so we're seeing a nice, you know, halo from the new product launches that's going both.

In trauma, so we're seeing a nice.

Halo from the new product launches.

Both towards the core business, but also driving surgeons, who perform minimally invasive si joint procedure to adopt <unk>.

Speaker 10: towards the core business, but also driving surgeons who perform minimally invasive SI joint procedure to adopt degenerative spine procedures using granite in terms of going to the sacrum. And then the other thing that's very interesting for us, again, it's still early days, but as we tried to build that trauma franchise and work with key opinion leaders within trauma, what we are seeing is in over a third of the cases.

Degenerative spine procedures using granted.

In terms of going to the sacrum and then the other thing that's very interesting for US again, it's still early days, but as we tried to build a comma franchise and work with key opinion leaders within trauma. What we are seeing is in over a third of the cases.

Speaker 10: The volume that we are getting from the trauma surgeon, a third of that volume.

The volume that we are getting from the trauma surgeons a third of that volume is actually surgeons doing minimally invasive Si joint fusion procedures. So we're seeing a pretty good overlap across our surgeon base.

Speaker 10: is actually surgeons doing minimally invasive SI joint fusion procedures.

Speaker 10: So we're seeing a pretty good overlap across a surgeon base. And that gives us optimism that as the denominator grows, our focus on driving deeper penetration with those surgeons with a diversified portfolio sets us up well for 2024 and B.

That gives us optimism that as the as the denominator grows our focus on driving deeper penetration with those surgeons with a diversified portfolio sets us up well for 2024 and beyond.

Speaker 12: Got it. That's helpful. Thanks, Anshul. And then maybe another one for you.

Got it that's helpful. Thanks onshore and then maybe.

Another one for you.

Speaker 12: So just talking about the P&L, so gross margin came in, you know, a little bit lower than we were expecting, and then it's supposed to step down, or you said it's going to step down again in Q4, so.

So just talking about the P&L.

Gross margin came in a little bit lower than we were expecting and it's supposed to step down or you said there is going to step down again in Q4. So.

Speaker 12: appreciate those comments, but just want to understand the gross margin trend and when we're kind of thinking about 24. I know you're not going to give guidance, but how to think about the trend through 24 or just going forward and the same on OPEX, you know, OPEX

Appreciate those comments, but just wanted to understand the gross margin trend.

We're kind of thinking about 'twenty, four I know youre not going to give guidance, but how do you think about the trend through 'twenty four or just going forward and the same on Opex Opex mid single digit growth I think was kind of the expectation for this year.

Speaker 12: you know, mid-single-digit growth, I think, was kind of the expectation for this year. Can you do that again going forward?

Can you do that again going forward.

Speaker 10: Yeah, thanks, Greg. So on the gross margin side, as we mentioned, it was in line with our expectations. And the trends that are impacting our gross margin have not really changed. It is the evolving procedure and product mix.

Yes, thanks, Greg so on the gross margin side as we mentioned it was in line with our expectations.

And the trends that are impacting our gross margin have not really changed.

It is the evolving procedure and product mix.

Speaker 10: Especially given the higher total cost of pork and granite, we have been building a capacity throughout last year this year to support the demand that we're seeing. So you're seeing depreciation of that go to the as well. And, you know, we put a lot of that capacity to work in the 3rd quarter. So you're seeing that depreciation sort of start going to the in the 3rd, 4th.

Especially given the higher total cost of pork and granted we have been building along so capacity throughout last year. This year.

To support the demand that we're seeing so you're seeing that we see some of that go to the P&L as well.

We put a lot of that capacity to work in the third quarter, So you're seeing that depreciation sort of start going through the P&L in the third and fourth.

Speaker 10: And then in terms of the trajectory, we're not gonna provide guide on Gross margin right now, but when you think about what our expectation is to exit the fourth quarter, I think that could serve as a decent proxy from a modeling standpoint for now till we provide additional information on fourth quarter.

And then in terms of the trajectory.

We're not going to provide guide on gross margin right now, but when you think about what our expectation is to exit the fourth quarter I think that could serve as a decent proxy from a modeling standpoint for now till we provide.

Additional information on our fourth quarter earnings and look our gross margin is very important to us and we've got initiatives underway to bring the cost of our products down as we get to scale and also bring the cost of our instrument trays down.

Speaker 10: And look, our growth margin is very important to us. And we've got initiatives underway to bring the cost of our products down as we get to scale and also bring the cost of our instrument trees down as we go into next year. But we are also increasingly focused on the justice that you've been done and progressing towards break even.

As we go into next year, but we are also increasingly focused on adjusted EBITDA and progressing towards breakeven and what you've seen over the last several quarters is that top line growth that we've gotten from the investment in new products.

Speaker 10: And what you've seen over the last several quarters is that top line growth that we've gotten from the investment in new products, increasing surgical capacity has allowed us to get that operating leverage across our sales and marketing functions and that's reflected in the improvement. So we feel good about that.

Good evening surgical capacity has allowed us to get that operating leverage across our sales and marketing G&A.

All functions and.

And thats reflected in the improvement so we feel good about that.

Speaker 10: In terms of all facts as well, we do expect

In terms of Opex as well, we do expect 2023 opex for the year to be mid single digits up year over year, and we're very pleased about.

Speaker 10: 2023 OPEX for the year to be mid-single digits of year-over-year.

Speaker 13: And we're very pleased about the trajectory of the leverage that we've seen. We'll provide more color on the OPEX in 2024 once we provide the revenue guide, because as I said earlier, our OPEX is going to be linear. Our OPEX leverage is going to be linear to revenue growth.

The trajectory of the leverage that we've seen.

I'll provide more color on the Opex in 2024 ones, who provide the revenue guide because as I said earlier, our opex is going to be linear.

Opex leverage is going to be linear to our revenue growth.

Thanks for taking the questions.

Thank you.

Our next question.

Speaker 2: comes from the line of David Saxon of Niedermink.

Comes from the line.

David Saxon of Needham <unk> company.

Great.

Speaker 14: Great. Hi, Laura and Anshul. Thanks for taking my questions and congrats on the quarter.

Laura and onshore thanks for taking my questions and congrats on the quarter.

Speaker 14: Um, maybe to start, I wanted to follow up on a previous question about utilization. So, you know, it looks like 3.8. Cases per doctor in the quarter, so just wanted to ask, you know, where does that go longer term? Is this feeling higher across any of the 3 products or are they generally the same? And then when you think about your surgeon champions, or kind of higher volume docs, how long did it take them to ramp to their, their current level?

Maybe to start I wanted to follow up on a previous question about utilization so looks like three eight cases per Doc per.

In the quarter. So just wanted to ask where does that go longer term is this the only hire across any of the three products or are they generally the same.

And then when you think about your surgeon champions or kind of higher volume docs.

How long does it take them to ramp to their current levels.

Speaker 8: Yeah, David, thanks for the question. Happy to answer that. Our, our utilization has been staying relatively consistent. It's a little under four procedures per quarter. And part of the reason for that, though, is how rapidly our surgeon numbers are increasing. So, the denominator is increasing very significantly. You know, as I said, I think it's been thirty percent plus over the last five quarters at this point.

Yeah, David Thanks for the question happy to answer that.

Our utilization has been staying relatively consistent at a little under four procedures per quarter in.

Part of the reason for that though is how rapidly our surgeon numbers are increasing so then denominators increasing very significantly.

I said I think it's been 30% plus over the last five quarters at this point.

And so.

Speaker 4: And so what's happening and you kind of highlighted it is that those

What's happening and you kind of highlighted it is that those what we call champion surgeons those surgeons, who have adopted our procedure is consistently into their practices. Their numbers are significantly higher than that whereas newer surgeons are going to be just <unk>.

Speaker 8: what we call champion surgeons, those surgeons who have adopted our procedures consistently into their practices, their numbers are significantly higher than that, whereas newer surgeons are going to be just starting out procedures, so they're gonna be bringing down that average. So overall, we're staying consistent even with 30% growth.

Darting out procedure, so theyre going to be bringing down that average. So overall, we're staying consistent even with 30% growth in the denominator of surgeons. So for us that bodes very well for the business in the future with three different procedure types going forward and really.

Speaker 8: in the denominator of surgeons. So for us, that bodes very well for the business in the future with three different procedure types going forward and really just at the start in every one of these markets. So in terms of...

Just at the start in every one of these markets.

In terms of both.

Speaker 8: In terms of SI joint fusion procedures, we've said this many times that a typical surgeon who has fully adopted the SI joint into their practice is doing around nine cases per core versus a little less than four than what you're seeing in our numbers right now. So there's a significant opportunity to build that out. It does typically take two to three years.

In terms of Si joint fusion procedures. We've said this many times that a typical.

Surgeon, who is fully adopted.

<unk> joined into their practice is doing around nine cases per quarter.

A little less than four than what youre seeing in our numbers right. Now. So there is a significant opportunity to build that out it does typically take two to three years.

Speaker 8: in order for a surgeon to fully adopt, to get to the level of procedures per quarter that you would expect. And then what you need to do is to add on to that.

In order for a surgeon to fully adopt to to get to the the level of procedures per quarter that you would expect.

Then what you need to do is is to add onto that.

Speaker 4: Those surgeons who are doing adult deformity procedures or potentially degenerative procedures with our granite product pelvic fixation and then we're just at a starting point right now on Fragility fractures as well. So those are on top of those procedures, too

Those surgeons, who are doing adult deformity procedures or potentially degenerative procedures with our branded product pelvic fixation and then we're just at the starting point right now on fragility fractures as well. So those are on top of those procedures too.

Okay. That's super helpful. Thanks, Laura and then just for my second question just on credit and torque.

Speaker 14: Okay, that's super helpful. Thanks, Laura. And then just for my 2nd question, just on granite and torque, you know, by my math, the 2 combined are tracking and kind of the low teams percent of revenue. Is that the right ballpark and where does that go longer term, especially with the shorter construct granite. Coming out next year, I think that's a much larger tan and then can you give any update on on that launch timing? Thanks so much.

By my math, the two combined are tracking and kind of a low teens percent of revenue is that the right ballpark and where does that go longer term, especially with the shorter comp store granite coming out next year I think that's a much larger tam.

And then can you give any update on that launch timing. Thanks, so much.

Thank you. So we don't comment we don't break out our different procedure types, where sacral <unk> solutions company and so our primary S. Si joint fusions are pelvic fixation and our fragility fracture businesses are really all a part of.

Speaker 4: Thank you. So we don't comment. We don't break out.

Speaker 8: are different procedure types for sacri-palic solutions company. And so our primary SI joint fusion, our pelvic fixation and our fragility fracture businesses are really all a part of those.

Those.

Of that broader business this year.

But in terms of your question and I'll get back it really the size of the market opportunity overall, we are targeting a half a million procedures per year approximately so around.

Speaker 8: So around 280,000 of those are primary SI joint fusion procedures. If you think about pelvic fixation, it's another approximately 130,000 procedures a year and then the remainder are the trauma procedures. So if you want to think about the opportunities, those are the buckets that we're going after, those are the sizes that we're going after and we're really just at the beginning of the journey with each one of these different areas. But it does bode well for the future.

Around 280000 of those are primary Si joint fusion procedures. If you think about pelvic fixation. It's another approximately 130000 procedures a year and then the remainder or the trauma procedures. So if you want to think about the opportunity those are the buckets that we're going after those are the <unk>.

Speaker 8: So if you want to think about the opportunities, those are the buckets that we're going after, those are the sizes that we're going after, and we're really just at the beginning of the journey with each one of these different areas, but it does bode well for the future.

<unk> is that we're going after and we're really just at the beginning of the journey with each one of these different areas, but it does bode well for the future.

Speaker 4: Now I'm going to answer your question too. On our next granted extension, thus far we've just said it's going to be 2024, but as you said correctly, our goal is to better penetrate the opportunity with short construct, degenerative spine procedures. Currently our granted product, we're already seeing our current granted product being used in approximately 40% of those cases in short construct procedures. And so what we're going to do is leverage our experience from these DGN procedures where granted's been used and work on expanding the granted family. So introducing that new product in 2024 is the target is to accelerate the process of adoption across those 100,000 DGN spine procedures that are part of the 130,000 number that I just gave to you.

Now I'm going to answer that.

Your question too.

On.

Brian.

Our next granted extension thus far we've just said it's going to be 2024, but as you said correctly our goal is.

To better penetrate the opportunity with short construct degenerative spine procedures are currently our granite product, we're already seeing our current granite product being used in approximately 40% of those cases in short construct procedures.

And so what we're going to deal with is leverage our experience from these dejan procedure, where granite has been used in work on expanding the granite family. So introducing that new product in 2024 is the target is to accelerate adoption across those 100000.

<unk> spine procedures that are part of the 130000 number that I just gave to you.

Speaker 8: The initial low hanging fruit are what are called, F1 revision cases. We estimate those are around 20% of total DGNR requirements for fine seniors to the pelvis.

The initial low hanging fruit are what are called F. One revision cases, we estimate those are around 20% of total DJ.

<unk> thousand seniors to the pelvis.

Speaker 4: I'm not necessarily going to talk any further on the breakout, but as I said, we're really excited about the revenue potential for the expansion of the granted implant system.

I'm not necessarily going to talk any further on on the breakout, but as I said, we're really excited about the revenue potential for the expansion of the granted implant system.

Great. Thanks, so much Laura.

Thank you.

Speaker 2: Our next question comes from the line of Dave Tercoli of JMP Securities.

Our next question.

Comes from the line of Dave <unk> of JMP Securities.

Hey, good evening can you hear me.

Yes.

Speaker 2: Quick one on that, some news that you had in the corner, that, freshly, if you put on a mid-traumatic compatibility, I think it was with the CD Horizon, so there are rods. I was just curious, how many of the competitors out there are you compatible with, and how do you think about that in terms of, you know, allowing you to continue to penetrate that market? Three.

Quick one on.

Some news that you had in the quarter the <unk>.

Press release, you put out on the Medtronic compatibility I think it was with the city horizons there.

I was just curious.

How many of the.

The competitors out there are you compatible with and how do you think about that in terms of.

Allowing you to continue to penetrate that market.

Great question, Dave So.

You may recall in or May not recall, we had actually sent out a press release. It was around 12 months ago already where we talked about having general compatibility with almost all Rob systems that were out there with our granted.

Speaker 4: You may recall, or may not recall, we had actually sent out a press release.

Speaker 4: It was around 12 months ago already, where we talked about having general compatibility with almost all raw systems.

Speaker 8: that were out there with our granite. That was a clearance that the FDA provided to us after.

That was a clearance with the FDA provided to us after quite a bit of testing to show that.

Speaker 4: quite a bit of testing to show that we were compatible. So in terms of the particular announcement with MENTRONIC, that announcement was more to provide the additional safety and security to MENTRONIC.

That we were compatible so in terms of the particular announcement with Medtronic that announcement was more too.

To provide additional safety and security to Medtronic surgeons that they could feel very confident using granted with the Medtronic Solaris system and their adult deformity cases.

Speaker 8: surgeons that they could feel very confident using Granite with the Medtronic Solaris system in their adult deformity cases.

Got it and then the.

Speaker 15: Got it. And the update that you put out on the Angular Broats, the patent. Imagine that it's that reference to the core, the 3D implants, but I just love to get your thoughts on sort of what that means from your intellectual property and the runway that you have.

The update that you put out on the.

Triangular broach the pattern.

I imagine that's that refers to the core the <unk> implants, but I just wanted to get your thoughts on sort of.

What that means from your.

Intellectual property.

The runway that you have.

Speaker 8: Yeah, another good question. So our, we had been able to actually extend our patents on the shape and the trajectory through the end of 2025, but what's unique about this extension is that it actually will take those patents and extend them further into 23-4. So the the brooch just to remind you on the proceed your account the broach is a triangular shape and it creates the channel in order for the surgeon to actually place the triangular implant.

You have another another good question. So are we had been able to actually extend our patents on the the shape and the trajectory through the end of 2025, but what's unique about this.

The extension is that it actually will take those patents and extend them further into 2034. So the brooch just to remind you on the proceeds.

The broaches, a triangular shape and it creates the channel in order for the surgeon to actually place the triangular implants and this is something that's required for the the surgeon to do in order to place a triangular implants and so by receiving this new patents for the.

Speaker 5: And this is something that's required for the surgeon to do in order to place a triangular implant. And so by receiving this new patent for the broach instrument, it's extending our patents into 2034. That's a long time. Thank you.

Broached instrument.

It's extending our patents into 2034.

That's a long time thank you.

Thank you.

Thank you our next question.

Comes from the line of.

Speaker 2: And the microphone comes from the line before the level comes from the line. Avyum Privatnik...

William <unk> of Canaccord.

Hi, This is Caitlin entre bill and congrats on a great quarter.

Speaker 16: This is Caitlin on for Bill and congrats on the great quarter. I was hoping to dig a little bit into the ASP. Can you really talk about your expectations for the rest of the year? You know, how much of a dynamic do you think using a second point of fixation for a granite will be on the ASP going forward? And besides from this kind of product mixed dynamic, can you continue your success in maintaining price at ASC?

I was hoping to dig a little bit into the ASP.

Can you really talk about your expectations for the rest of the year how much of a dynamic do you think I'm using a second point of fixation.

For granite will be on the H T going forward and aside from this kind of product mix dynamic have you continued your success in maintaining price at <unk>.

Speaker 10: Yeah, I'm happy to take that, Caitlin. So from an ASP standpoint, up procedure ASP varies, depending on the type of procedure and the surgeons preference. So when you think about SI joint fusion cases, surgeons generally tend to use three implants in deformity cases to the pelvis or pelvic sensation cases. So with a good tilt

Yes, I'm happy to take that Caitlin so from an ASP standpoint.

A procedure ASP varies depending on the type of procedure and the surgeons preference. So when you think about Si joint fusion cases surgeons generally tend to use three implants.

In deformity cases to the pelvis pelvic fixation cases.

Speaker 9: We generally see the use of two points of fixation. So three to four implants are used in that case. And then within the D Gen space of a granite or in the trauma space, you generally see two implants used.

We generally see the use of two points of fixation. So three to four implants are used in that case and then within the D. Gen space with granite or in the trauma space you generally see two implants use so what youre seeing is just the continued evolution of the portfolio as we continue to penetrate these markets.

Speaker 10: So what you're seeing is the continued evolution of the portfolio as we continue to penetrate these markets.

Speaker 10: on on different use cases and with the increase in our surgical capacity in the third quarter, you know, in addition to

On different use cases, and with the increase in our surgical capacity in the third quarter.

In addition to the strong demand for granted within deformity. We also were able to capture a lot more of the short construct degenerative spine procedures to the sacrum and that's what impacted the ESPN. If you recall in our second quarter, we had mentioned sort of that low single digit decline in ASP.

Speaker 10: The strong demand for granite within deformity, we also were able to capture a lot more of the short construct degenerative spine procedures to the sacrum, and that's what impacted the ASP. And if you recall in our second quarter, we had mentioned

Speaker 10: sort of that low single digit decline in ASP. Third played out just the way we expected. And as we think about it from a planning standpoint, we generally tend to assume a low to the mid single digit ASP dig a line in.

So it played out just the way we expected.

Yes.

As we think about it from a planning standpoint, we generally tend to assume a low to mid single digit ASP decline in.

Speaker 10: across the procedures because of just healthcare costs.

In.

The procedures because of just health care cost.

Speaker 10: And then we focus on executing to come out ahead of.

And then we focus on executing to come out ahead of that.

Got it.

Speaker 16: Got it. And then just to touch a little bit more on competition seems like as I joined this function, it's kind of a growing area, part given all of your work on establishing reimbursement and the space, you know, what are you really seeing from a competitive landscape and kind of any new products and companies you've seen increased competition from, you know, even with your IP extension there.

And then just to touch a little bit more on competition it seems like.

I joined dysfunction as kind of a growing area part given all of your work on establishing reimbursement and the space. You know what are you really seeing from a competitive landscape and kind of any new products and companies you've seen increased competition from them you know even with here your IP extension there.

Yeah, I mean, it's it's become clear that we are the market leader in this space.

Speaker 8: become clear that we're the market leader in this space. If we look at.

If we look at the the market our estimate when we went public is that our.

Speaker 8: The market are our estimate when we went public is that our market share was in the high 50% range and we think we're significantly higher than that at this point in time. And I think it...

Our market share was in the high 50% range and we think were significantly higher than that at this point in time and I think it's because of the fact that our name has become synonymous with sacral pelvic procedures number one but also it's the innovative.

Speaker 8: because of the fact that our name has become synonymous with sacri-pelvic procedures number one, but also it's the innovative products. The discussion we just had around patents, I think is an important one, innovative patent protected products that we have, the clinical evidence that we have provided for this particular space, the educational effort.

Products the the the discussion we just had around patents I think is an important one innovative patent protected products that we have the clinical evidence that we have provided for this particular space the educational effort that we make around these sorts of.

Speaker 4: that we make around these sorts of very specific procedures and then the reimbursement support that we have here too. So if you look in our slide deck, this on our website, you can get more information on the competitive environment and how we've been able to leave the way here. So it's not just about putting out an SI joint.

Very specific procedures and then the reimbursement support that we have here too. So if you look in our slide deck. That's on our website you can get more information on the competitive environment and how we've been able to lead the way here. So.

It's not just about putting out enough Si joint product, it's about differentiated products clinical evidence education and reimbursement support which are what we pride ourselves on and then in addition to that we're building from there with our <unk>.

Speaker 8: product. It's about differentiated products, clinical evidence, education, and reimbursement support, which are what we pride ourselves on. And then in addition to that, we're building from there with our pelvic fixation business and with our fragility fracture business.

The fixation business and with our fragility fracture business.

Great. Thanks for taking the questions.

Thank you.

Thank you.

Our next question.

Speaker 2: comes on the line of Samuel Pradowski, up to his security.

Comes from the line of Samuel Gadomski offshore Securities.

Okay.

Speaker 17: Hey, thanks for squeezing us in here and congrats again on a solid quarter. I just wanted to start off with what you saw in 3Q. And then you probably are going to break down growth rates by product. But.

Hey, Thanks for squeezing us in here and congrats again.

On a solid quarter I just wanted to start off with what you saw in <unk>.

You're probably going to break down growth rates by by product but.

Speaker 17: Did you see the sequential strength in the core SI joint fusion market as well? Was that up from 2Q or was the strength more from granite and torque? And I guess more broadly, are you seeing any underlying acceleration of momentum in that SI joint fusion market?

Did you see the sequential strength in the core Si joint fusion market as well was that up from <unk> or was the strength more from granite and torque and.

I guess more broadly are you seeing any any underlying acceleration of momentum in that Si joint fusion market.

Yeah, Sam Thanks for the question. So as I stated earlier I really am very pleased with our Q3 performance. It's another record quarter at 30%, 34% growth in U S volume.

Speaker 4: Yeah, Sam, thanks for the question. So as I stated earlier, I'm really I'm very pleased with our...

Speaker 8: Q3 performance, it's another record quarter, 30%.

Speaker 8: 34% growth in U.S. volume.

Speaker 8: It just continues to show how strong, strongly we're performing. And I want to reiterate that we saw strong growth across all of our products.

It just continues to show how strong strongly we're performing and I want to reiterate that we saw strong growth across all of our products.

Speaker 8: And certainly, Granite has been a strong driver of the business. Torqu has been a strong driver of the business as well. But our core business is absolutely critical to...

And certainly granite has been a strong driver of the business TORC has been a strong driver of the business as well, but our core business is absolutely critical to.

Showing the sorts of results that we showed in the third quarter.

Speaker 8: showing the sorts of results that we showed in the third quarter. And so I think if you look forward and you think about the underlying drivers that we have for the business.

And so I think if you look forward and you think about the underlying drivers that we have for the business.

Speaker 4: That sort of performance, it's not limited to the current quarter. It just really shows the level of execution.

That sort of performance, it's not limited to the current quarter. It just really shows the level of execution that.

Speaker 4: that we've shown here with product differentiation, surgeon education and engagement.

And that we've shown here with product differentiation surgeon education and engagement. The fact that we built a very significant commercial infrastructure with a direct sales force as well as a significant agent force as well and then I also just want to highlight that we continue to increase our.

Speaker 4: the fact that we build a very significant commercial infrastructure with a direct sales force as well as...

Speaker 4: a significant age and force as well. And I also just want to highlight that we continue to increase our...

Surgical capacity to support demand, especially for some of those new products that you mentioned so our conviction in the demand momentum. It's it's reflected in the guidance that we provided for this year, so finishing between $136 million to $137 million.

Speaker 4: surgical capacity to support demand, especially for some of those new products that you mentioned.

Speaker 4: You know, our conviction in the demand momentum, it's reflected in the guidance that we provided.

Speaker 4: For this year, so finishing between $136 to $137 million.

Speaker 8: which is 28 to 29% growth. So that's up from the previous guidance of 132 to $134 million, which was growth of 24 to 26%.

Which is 28% to 29% growth. So that's up from the previous guidance of $132 million to $134 million, which was growth of 24% to 26%. So I think I think that it was a great quarter and I think that we have reflected our expectations to finish the year.

Speaker 8: So I think it was a great quarter and I think that we have reflected, you know, our expectations to finish the year strong in our increase in guidance.

Strong in in our increase in guidance.

Great. That's that's how.

Speaker 17: Right, that's helpful. And as we think about the short construct opportunity, can you give us any color on sort of the logistics of how that's gonna happen? Is that gonna require new sets and how quickly should we think about existing granted users being able to have access to a short construct option in 24? Thank you.

Helpful. And then just as we think about the short contrast opportunity can you just.

Give us any color on sort of the logistics of how thats going to happen is that going to require.

New sets and how quickly should we think about existing granite users being able to have access to assure construct.

Option in 'twenty four.

Speaker 8: Yeah, it's a great question. First of all, no new instrument tray. So to be very clear, it will not require a new instrument tray. And what we're really trying to do here is to capture the opportunity and pelvic fixation for short constructs.

Yeah. It's a great question first of all no new instrument tray. So.

To be very clear it will not require a new instrument tray and what we're really trying to do here is to capture the opportunity in pelvic fixation for short construct.

Speaker 4: Also, I have mentioned this S1 trajectory when surgeons are performing pelvic fixation. They usually typically use

Also I had mentioned this F. One trajectory when surgeons are performing pelvic fixation. They usually typically use in F. Two trajectory or an F. One trajectory and 60% are up to and that's where our current granite product is being used to be F. One traject.

Speaker 4: Two trajectory or an F1 trajectory and

Speaker 4: 60% or S2 and that's where our current grant product is being used. The S1 trajectory is where the line extension will be used. That's another 40% of the work that we're talking about. It's a big increase in the ability to fully capture.

<unk> is where the line extension will be you.

As a percentage of the opportunity down there. So it's a big increase in the ability to fully capture the opportunity in pelvic fixation and also specifically in the.

Speaker 4: the opportunity and pelvic sensation and also specifically in the degen part of the market. So short construct, two to four level construct.

D. Gen part of the market so short construct two to four level construct.

Speaker 4: where surgeons may want to include pelvic fixation. So very excited about the impending launch. And as I think your question highlights, the very capital efficient model that we have here too, because we do not need new instrument trays in order for surgeons to use the new granite line extension. Thank you.

Where surgeons may want to include pelvic fixation, so very excited about the impending launch and as.

As I think your question highlights a very capital efficient model that we have here too because we do not need new instrument trades in order for surgeons to use the new granite line extension.

Thank you.

Speaker 2: I would now like to turn the conference back to Laura Francis for closing remarks.

I would now like to turn the conference back to Laura Francis for closing remarks.

Speaker 4: Thanks so much. Before I end the call, I just wanted to thank you all for your participation. The strength of the business is reflected in our impressive year-to-date performance and the increase in guidance for the third time this year. And I've said it many times, but with nearly half a million target annual procedures and an electricity, I firmly believe we're positioned to drive sustainable long-term and profitable revenue growth.

Thanks, So much before I end the call I just wanted to thank you all for your participation the strength of the business is reflected in our impressive year to date performance and the increase in guidance for the third time this year and I've said, it many times, but with nearly half a million target annual procedures.

Ultra day I firmly believe we are positioned to drive sustainable long term and profitable revenue growth.

Speaker 8: Ancho and I look forward to seeing you. We're going to be at the Jeffrey's London conference as well as the Piper New York conference. And we also have an NDR plan for Boston in New York later this month. Thank you and goodbye.

Onshore and I look forward to seeing you and we're going to be at the Jefferies London Conference as well as the paper New York Conference and we also have an MTR plan for Boston in New York later this month.

Thank you and goodbye.

This concludes today's conference call. Thank you for participating you may now disconnect.

Speaker 2: This concludes today's conference call. Thank you for participating. You may now disconnect.

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