Q4 2023 SI-BONE Inc Earnings Call

Operator: Good afternoon, and welcome to SI-Bone's fourth quarter 2023 earnings conference call. At this time, all participants are in a listen-only mode.

Good afternoon, and welcome to Si bone fourth quarter 2023 earnings conference 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.

Operator: 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. I would now like to turn the call over to Saqib Iqbal, Senior Director of Investor Relations at SI-Bone, for a few introductory comments. Thank you for participating in today's call. Joining me are Laura Francis, Chief Executive Officer, and Anshul Maheshwari, Chief Financial Officer. Earlier today, SI-Bone released financial results for the quarter ended December 31st, 2023.

Purposes.

I'd now like to turn the call over to socket Iqbal Senior director of Investor Relations at Si bone for a few introductory comments.

Thank you for participating in today's call.

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

Earlier today Si bone released financial results for the quarter ended December 31st 2022.

Saqib Iqbal: 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 are forward-looking statements within the meaning of federal securities laws, which are made pursuant to the safe harbor provisions 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. These forward-looking statements are based on the company's current expectations and inherently involve risks and uncertainties.

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 provisions of the private Securities Litigation Reform Act of 1095.

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

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

Saqib Iqbal: These risks include SI-Bone's ability to introduce and commercialize new products and education; SI-Bone's ability to maintain favorable reimbursement for its products and procedures; Impact of Potential Economic Weakness on the Ability and Desire of Patients to Undergo Elective Procedures.

These risks include MSI bonds ability to introduce and commercialize new products and indications.

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

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

Saqib Iqbal: SI-Bone's ability to manage risk-stood supply chains, Impact of Future Capital Requirements Driven by New Product Introduction, and risks to the continued renormalization of the healthcare operating environment. Other forward-looking statements include our examination of the operating trend and our future financial expectations, such as expectations for physician training and adoption of Active Physicians, our new product. Clinical Trial Enrollment, and are based upon our current estimates and various assumptions. 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.

<unk> ability to manage risks stood supply chain.

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

Other forward looking statements include our examination of operating trends and our future financial expectations, such as expectations with physician training and adoption.

Active physicians.

New products and clinical trial enrollment.

Based upon our current estimates and various assumptions.

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.

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

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

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

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

Saqib Iqbal: 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. SI-Bone disclaims any intention or obligation, except as required by law, to update or revise any financial projections, which are forward-looking statements, whether because of new information, future events, or otherwise. This conference call contains time-sensitive information and is accurate only as of the live broadcast today, February 26, 2024. With that, I'll turn the call over to... Thanks, Sacab.

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.

<unk> 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.

This conference call contains time sensitive information and is accurate only as of the live broadcast today February 26, 2024 with that I'll turn the call over to Laura.

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

Laura A. Francis: Good afternoon, and thank you for joining us. 2023 was a stellar year for SI-Bone. Our physician customers and their patients, as we delivered record worldwide revenue and attained new heights in physician engagement. For the full year 2023, we generated worldwide revenue of $138.9 million, reflecting 31% growth compared to the full year 2022. This worldwide performance was led by robust U.S. demand, as over 1,600 U.S. physicians performed more than 15,000 procedures. We started 2023 with an initial revenue expectation of $124 to $127 million. But the strong demand for our highly differentiated solutions, growing physician engagement, and increases in our surgical capacity allowed us to significantly exceed that expectation. The momentum in the business was clearly evident at our national sales meeting in February.

23 was a stellar year for assai inbound our physician customers and their patients as we delivered record worldwide revenue and attain new heights and physician engagement.

For the full year 2023, we generated worldwide revenue of $138 $9 million.

Reflecting 31% growth compared to the full year 2022.

This worldwide performance was led by robust U S demand is over 1600 U S physicians performed more than 15000 procedures.

We started 2023 within initial revenue expectation of $124 million to $127 million.

Strong demand for our highly differentiated solutions growing physician engagement and increases in our surgical capacity allowed us to significantly exceed that expectation.

The momentum in the business was clearly evident at our National sales meeting in February our sales organization.

<unk> was not only enthusiastic about our performance in 2023, but what's even more energized by the potential opportunity ahead of us in 2024.

Laura A. Francis: Our sales organization was not only enthusiastic about our performance in 2023 but was even more energized by the potential opportunity ahead of us in 2024. Having been at the company for almost nine years, I can say the mood in the company and the confidence in our future have never been stronger. Our foresight and discipline over the last few years in building scalable operating infrastructure in a methodical fashion drove approximately a 48% improvement in adjusted EBITDA in fiscal year 2023. We also reduced our cash usage while continuing to invest in R&D and clinical evidence to support the planned portfolio expansion in 2024.

Having been at the company for almost nine years I can say the mood in the company and the confidence in our future has never been stronger.

Our foresight and discipline over the last few years in building a scalable operating infrastructure and methodical fashion drove approximately 48% improvement in adjusted EBITDA in fiscal year 2023.

We also reduced our cash usage, while continuing to invest in R&D and clinical evidence to support the planned portfolio expansion in 2024.

Before I provide an update on our strategic priorities I'd like to recognize our team.

Working together to deliver 25% cumulative annual U S procedure volume growth since 2018, our first year as a public company is a testament to your hard work.

We transformed into a multi product company that is solving unmet clinical needs across multiple procedures.

We're just getting started given the nearly half a million target sacro pelvic procedures per year.

You are focused on delivering for our customers is allowing us to capture this large market opportunity and deliver strong and sustainable revenue growth.

Laura A. Francis: Before I provide an update on our strategic priorities, I'd like to recognize our team. Working together to deliver 25% cumulative annual U.S. procedure volume growth since 2018, our first year as a public company, is a testament to your hard work. We have transformed into a multi-product company that is solving unmet clinical needs across multiple procedures. And we're just getting started given the nearly half a million target sacral pelvic procedures per year.

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, we're extremely proud of our sales and commercial team known for their industry, leading expertise and extensive experience across our target markets.

Their execution has allowed us to build new markets and deliver several quarters of record revenue.

We ended the year with 82 quota carrying U S territory managers.

Implement our territory manager bandwidth with clinical support specialists as well as our growing network of third party sales agents for case coverage.

Laura A. Francis: Your focus on delivering for our customers is allowing us to capture this large market opportunity and deliver strong and sustainable revenue growth. 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, we're extremely proud of our sales and commercial team, known for their industry-leading expertise and extensive experience across our target market. Their execution has allowed us to build new markets and deliver several quarters of record revenue. We ended the year with 82 quota-carrying U.S. territory managers.

This hybrid strategy has worked well as we continue to see growth in revenue per territory.

In 2023 revenue per territory was one $6 million, reflecting 39% growth compared to the prior year.

Confident in our ability to further increase revenue per territory and get closer to the high end of our one 5 million to $2 million target over time.

In addition to growing territory productivity, we plan to selectively add to our 82 territories over the next few years.

The expanded territory footprint will enable us to maximize the potential of our growing portfolio and facilitate deeper engagement with our physicians to capture the over $3 billion total addressable market opportunity.

Moving on to physician engagement, we exited the fourth quarter with nearly 1130 active physicians and increase of over 200 active physicians in the quarter compared to the prior year period.

Laura A. Francis: We complement our territory manager bandwidth with clinical support specialists as well as a growing network of third-party sales agents for case coverage. This hybrid strategy has worked well as we continue to see growth in revenue per territory. In 2023, revenue per territory was $1.6 million, reflecting 39% growth compared to the prior year. We're confident in our ability to further increase revenue per territory and get closer to the high end of our $1.5 million to $2 million target over time. In addition to growing territory productivity, we plan to selectively add to our 82 territories over the next few years.

The 22% growth in U S active physicians over the fourth quarter of 2022 was the 12th consecutive quarter of double digit year over year growth.

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

Patients suffering from Si joint dysfunction can undergo different types of care ranging from non surgical pain management for short term relief.

Intervention procedures witching provide medium term relief.

And surgical procedures that provide long term durable pain relief.

Over the last few years, we've seen an increase in interest in FY joint stabilization procedure from interventional in.

Particularly cortical bone allograft.

Given that the Si joint fusion market is less than 10% penetrated today and the interventional spine physician's growing interest in the space, we've expanded our engagement with the specialty.

We believe the partnership with our surgeons as well as interventional spine physicians, which include anesthesiologists, physical medicine, and rehabilitation specialists and interventional radiologists.

Laura A. Francis: The expanded territory footprint will enable us to maximize the potential of our growing portfolio and facilitate deeper engagement with our physicians to capture the over $3 billion total addressable market opportunity. Moving on to physician engagement, we exited the fourth quarter with nearly 1,130 active physicians, an increase of over 200 active physicians in the quarter compared to the prior year period. The 22% growth in U.S. active positions over the fourth quarter of 2022 was the 12th consecutive quarter of double-digit year-over-year growth. The elevated level of physician interest and engagement is a great forward-looking indicator and underscores the long-term growth trajectory of our business. Patients suffering from SI joint dysfunction can undergo different types of care, ranging from non-surgical pain management for short-term relief to interventional procedures, which can provide medium-term relief, and surgical procedures that provide long-term, durable pain relief.

Accelerate our ability to capture this market opportunity.

Over the last 15 months, we've been targeting a subset of the estimated 4500 interventional list in the U S.

Prior experience with other minimally invasive spine procedures.

We've engaged and trained highly skilled intervention lifts in our lateral technique using ips to work.

While still early we're encouraged by the level of interest the caliber of interventional is we've trained and their pace of adoption.

Clinical evidence has always been an important part of <unk> commitment to its patients and physicians.

In June 2023, we also initiated the Stacy study, which is a prospective study on the use of Ice's tour and patients with Fac really our joint dysfunction by Interventional list.

The enrollment is ongoing and we expect to publish early results by the end of 2024.

As the market leader, we believe that our broad product portfolio training expertise clinical evidence.

And experienced Salesforce are clear differentiators that are leading to strong interventional engagement.

Going forward, we expect active physician growth to remain strong as we engaged the nearly 8000 target surgeons and 4500 targeted interventional.

We also expect our growing product portfolio and published clinical evidence to drive deeper engagement and increase procedure per physician over time.

Laura A. Francis: Over the last few years, we've seen an increase in interest in SI joint stabilization procedures from interventional spine physicians, particularly cortical bone allografts. Given that the SI joint fusion market is less than 10% penetrated today and interventional spine physicians have a growing interest in the space, we've expanded our engagement with this special. We believe the partnership with our surgeons, as well as interventional spine physicians, who include anesthesiologists, physical medicine and rehabilitation specialists, and interventional radiologists, will accelerate our ability to capture this market opportunity. For the last 15 months, we've been targeting a subset of the estimated 4,500 interventionalists in the U.S. who have prior experience with other minimally invasive spine procedures. We've engaged and trained highly skilled interventionists in our lateral technique using iFuse Torque.

Turning to products and solutions, we have a demonstrated track record of building innovative products and surgical techniques to address unmet clinical needs and improve patient outcomes.

The robust procedure volume growth, we've experienced in the U S substantiates the value of our innovation.

In 2024, we're launching new products in each of our target markets to further extend our leadership position.

Within Si joint dysfunction, and degeneration, Ics <unk> and Ics tour provider physicians with the most comprehensive solution for minimally invasive Si joint fusion procedures reimbursed under CPT code 70 709.

Effective January one 2024.

<unk> adopted a separate CPT code $217 78 to described minimally invasive fact really act procedures, one performed using an intra articulate implant typically of cortical bone allograft placed directly into joined from a posterior approach.

As I shared earlier this technique is more commonly used by interventional spine physicians.

With the new CPT code 270, <unk> established for both facility and office based procedures unless coverage likely available from some payers. We expanded our interventional is training to also include our new allograft product Ic's intra.

Laura A. Francis: While still early, we're encouraged by the level of interest, the caliber of interventionalists we have trained, and their pace of adoption. Clinical evidence has always been an important part of SI-Bone's commitment to its patients and physicians. In June 2023, we also initiated the STACI study, which is a prospective study on the use of iphuse torque in patients with sacroiliac joint dysfunction by intervention.

ICU as interim built on Ics zone, which was launched in 2019 with enhanced surgical techniques that enable accurate placement of the implant into the joint using a <unk> approach.

We've recently completed the first Ics venture procedure in an office based lab setting.

With Ice's torque and Ics intra we now offer interventional with multiple products to address their treatment preferences.

Moving to pelvic fixation based on the strong adoption demand and growing surgeon interest we believe our breakthrough device ICU bed rock granite can become the standard of care for fixation infusion of the Si joint providing a strong foundation at the base of long construct adult deformity procedures.

Laura A. Francis: The enrollment is ongoing, and we expect to publish early results by the end of 2024. As the market leader, we believe that our broad product portfolio, training expertise, clinical evidence, and experienced sales force are clear differentiators that are leading to strong interventional engagement. Going forward, we expect active physician growth to remain strong as we engage the nearly 8,000 target surgeons and 4,500 target interventionalists. We also expect a growing product portfolio and published clinical evidence to drive deeper engagement and increase procedures per physician over time. Turning to products and solutions, we have a demonstrated track record of building innovative products and surgical techniques to address unmet clinical needs and improve patient outcomes. The robust procedure volume growth we've experienced in the U.S. substantiates the value of our innovation.

A recent publication with early Sylvia results highlighted the prevalence of Si joint pain, and 16% of the patients undergoing spinal deformity surgery.

Further underscoring the need for inclusion of pelvic fixation infusion as part of the procedure.

On the granite line extension at the end of January we received five 10-K clearance from the FDA for the $9 five millimeter diameter implant with Epsilon and pediatric deformity indication.

Granite was launched in 2022, approximately 40% of our granite case volume has been in shorter two to four level contracts, which are generally degenerative spine fusion procedures.

Based on published data post operative Si joint incidents and shorter level surgeries is estimated to be up to 20%.

Additionally, some patients undergoing shorter level lumbar fusion procedures or at a higher risk of revision due to screw loosening and other hardware failure from underlying conditions, such as high public incidents.

Laura A. Francis: In 2024, we're launching new products in each of our target markets to further extend our leadership position. Within SI joint dysfunction and degeneration, ICUs3D and ICUsTORC provide our physicians with the most comprehensive solutions for minimally invasive SI joint fusion procedures reimbursed under CPT code 27279. Effective January 1, 2024, the AMA adopted a separate CPT code 27278 to describe minimally invasive sacroiliac procedures when performed using an intraarticular implant, typically a cortical bone allograft placed directly in a joint from a posterior approach. As I shared earlier, this technique is more commonly used by interventional spine physicians, with the new CPT code 27278, established for both facility and office-based procedures, and with coverage likely available from some payers.

Steel product bone or high BMI.

The current adoption of the larger diameter granted in these shorter level fusion procedures illustrates the increasing interest among the surgeon community and including pelvic fixation in high risk patients.

We believe the availability of the smaller diameter implant will provide an offering for the approximately 100000 annual degenerative spine procedures, but ended the sacrum as well as engage deformity surgeons, who have expressed a preference for smaller diameter implant.

We plan to launch the smaller diameter granted implant in the second quarter.

And trauma surgery, we've made significant progress over the last 12 months to develop the market for treating sacral insufficiency fractures.

We're engaged with major trauma center thought leaders are encouraged by the pace of ICU torque adoption for treating these patients.

Towards the end of 2024, we will launch another product targeting the pelvic trauma market.

We believe the new product combined with the initial results from our Safford trial in late 2024 will be key to capturing the trauma opportunity with.

With over 120000, sacral insufficiency fractures, a year and one year mortality rate of up to 25% for the patients who are treated with bad breath.

Trauma market will be a crucial long term growth driver for us.

With that I'll hand, the call over to <unk> to discuss our financial performance.

Thanks, Laura Good afternoon, everyone. My comments today will be focused on fourth quarter and fiscal year revenue growth gross margin.

On liquidity.

Laura A. Francis: We expanded our interventionalist training to also include our new Allograft product, iFuse Interface. iFuse Intra builds on iFuse Bone, which was launched in 2019 with enhanced surgical techniques that enable accurate placement of the implant into the joint using a posterior approach. We recently completed the first ICU venture procedure in an office-based lab setting. With iFuse Torque and iFuse Intra, we now offer interventionalists multiple products to address their treatment. Moving to pelvic fixation, based on the strong adoption demand and growing surge in interest, we believe our breakthrough device, ICU's Bedrock Granite, can become the standard of care for fixation and fusion of the SI joint, providing a strong foundation at the base of long-term adult deformity procedures. A recent publication with early cilia results highlighted the prevalence of SI joint pain in 16% of the patients undergoing spinal deformity surgery, further underscoring the need for inclusion of pelvic fixation infusion as part of these procedures.

Additionally, all the comparisons provided will be versus the same period in the prior year unless noted otherwise.

Starting with revenue growth.

Our fourth quarter worldwide revenue was $38 9 million.

Representing growth of approximately 22%.

U S revenue was $36 $7 million.

Representing approximately 22% growth.

Predominantly from increase in procedure volume.

International revenue in the fourth quarter was $2 2 million, representing approximately 12% growth.

For the full year 2023, we generated worldwide revenue of $138 $9 million.

Reflecting 31% growth.

Our U S revenue grew approximately 32% to $136 million.

U S revenue growth was driven by approximately 32% increase in procedure volume growth.

National revenue for the full year, 2023 was $8 $3 million, representing 8% growth.

Moving to gross margin and productivity.

Our gross margin for the fourth quarter and full year 2023 was approximately 74% and 79% respectively.

The fourth quarter gross margin includes an approximate four percentage point impact from a $1 $7 million excess inventory reserve.

To provide some context, when we launched <unk> in 2021, we introduced two designs.

Laura A. Francis: On the granite line extension, at the end of January, we received 510K clearance from the FDA for the 9.5 millimeter diameter implant with S1 and pediatric deformity indication. Since Granite was launched in 2022, approximately 40% of our Granite case volume has been in shorter 2-4 level constructs, which are generally degenerative spine fusion procedures. Based on published data, post-operative SI joint incidence in shorter-level surgeries is estimated to be up to 20%. Additionally, some patients undergoing shorter-level lumbar fusion procedures are at a higher risk of revision due to screw loosening and other hardware failure from underlying conditions such as high pelvic incidence, osteoporotic bone, or high BMI.

A fully threaded and partially credit lagging plant to meet physician preference we.

We are seeing physicians prefer the Felice credit ICU talk across all our target markets and in fact demand for this implant type has exceeded our expectations.

Accordingly, the reserve is related to our lagging plan.

Operating expenses were $41 2 million in the quarter, representing approximately 8% growth.

For the full year 2023.

<unk> expenses increased approximately 4% to $156 4 million.

The increase was driven by increased compensation higher commissions related to revenue growth and research and development investments.

Our net loss was $11 million.

<unk> 27 per diluted share for the fourth quarter of 2023 as compared to a net loss of $11 2 million or 32 cents per diluted share in the prior year period.

For the full year 2023, net loss improved by approximately 29% to $43 3 million.

$1 13 per diluted share as compared to a net loss of $61 3 million.

Anshul Maheshwari: The current adoption of the larger diameter granite in these shorter level fusion procedures illustrates the increasing interest among the surgeon community in including pelvic fixation in high-risk patients. We believe the availability of the smaller diameter implant will provide an offering for the approximately 100,000 annual degenerative spine procedures that end at the sacrum, as well as engaged deformity surgeons who have expressed a preference for a smaller diameter implant. We plan to launch the smaller diameter granite implant in the second quarter. In trauma surgery, we've made significant progress over the last 12 months to develop the market for treating sacral insufficiency. We are engaged with major trauma center thought leaders and are encouraged by the pace of ITU's TORC adoption for treating these. Toward the end of 2024, we will launch another product targeting the pelvic trauma market.

A $1 79 per diluted share in 2022.

Net loss per diluted share for fourth quarter 2023, and full year 2023 includes the impact of increase in shares outstanding because of the follow on stock offering in May 2023.

Our adjusted EBITDA loss in the fourth quarter was $4 8 million compared.

Compared to $4 $2 million in the comparable period.

Adjusted EBITDA loss in 2023 was $17 3 million.

<unk> to $33 2 million in 2022.

Collecting approximately 48% improvement.

Adjusted EBITDA for fourth quarter, 2023, and full year 2023 was negatively impacted by the $1 7 million inventory reserve highlighted earlier.

Turning to liquidity.

We exited 2023 with a strong balance sheet, including $166 million in cash and marketable securities.

Our total cash usage in the fourth quarter was less than $800000.

Our strong liquidity position combined with our continued progress towards adjusted EBITDA breakeven provides us the flexibility to self fund our long term growth priorities.

Anshul Maheshwari: We believe the new product, combined with the initial results from our SAFRN trial in late 2024, will be key to capturing the trauma opportunity, with over 120,000 sacral insufficiency fractures a year and a one-year mortality rate of up to 25% for patients who are treated with bed rest. The trauma market will be a crucial long-term growth driver for us. With that, I'll hand the call over to Anshul to discuss our financial performance. Thanks, Laura. Good afternoon, everyone.

Finally, moving to our outlook for 2024.

As Laura noted, we have several tailwind and growth initiatives coming into 2024.

We expect 2024 worldwide revenue of $162 million to $165 million.

Implying year over year growth of approximately 17% to 19%.

Our guidance assumes low to mid single digit ASP deterioration driven by site of service and procedure mix.

Moderate impact from new product launches accounted for timing of launch and pace of adoption.

Modest international revenue growth.

We expect 2024 annual gross margin to be approximately 78%.

Anshul Maheshwari: My comments today will be focused on fourth quarter and fiscal year revenue growth, gross margin, productivity, and living. Additionally, all the comparisons provided will be versus the same period in the prior year, unless noted otherwise, starting with revenue. Our fourth quarter worldwide revenue was $38.9 million, representing growth of approximately 22%. U.S. revenue was $36.7 million, representing approximately 22% growth, predominantly from an increase in procedure work. International revenue in the fourth quarter was $2.2 million, representing approximately 12% growth.

Based on current revenue guidance planned product launches as well as commercial footprint expansion, we expect 2020 for annual operating expenses to grow approximately 9%.

Considering the anticipated operating leverage in the business, we expect significant year over year adjusted EBITDA improvement our full year 2020 for.

Putting us within reach of our adjusted EBITDA breakeven goal.

With that I will turn the call over to Laura.

Thanks onshore I hope you can feel our excitement and confidence built on consistent innovation and execution coming into 2024.

We believe the procedure demand will strengthen in 2024, as we rollout complementary products in each of our target markets.

<unk> balance sheet I believe we're uniquely positioned to deliver sustainable growth over the long term and have a clear line of sight to adjusted EBITDA breakeven.

That we're happy to take questions operator.

Anshul Maheshwari: For the full year 2023, we generated worldwide revenue of $138.9 million, reflecting 31% growth. Our U.S. revenue grew approximately 32%, to $130.6 million. U.S. revenue growth was driven by approximately 32% increase in procedure volume growth. International revenue for the full year 2023 was $8.3 million, representing 8% Moving to gross margin and product. Our gross margin for the fourth quarter and the full year 2023 was approximately 74% and 79%, respectively. The fourth quarter gross margin includes an approximate four percentage point impact from a $1.7 million excess inventory reserve.

Thank you as a reminder to ask a question. Please press star one on your telephone and wait for your name to be announced to withdraw. Your question. Please press star one again, one moment for questions.

Our first question comes from Craig Bijou with Bank of America, You May proceed.

Good afternoon, guys. Thanks for thanks for taking the questions and congrats on a good finish to the year.

I wanted to start with kind of what youre seeing in the Si joint fusion market.

And with respect to the new allograft product so.

Does the recent focus on allograft pain docs is that adding to our.

Joint fusion procedures or.

Or are they potentially taken away from the traditional implant market and then maybe if you could just give us a little bit of more color on the strategy behind Allograph in.

What you expect contribution either on a procedure basis or from a revenue perspective.

Great. Thanks for the question and what I first want to do is just kind of ramp.

Anshul Maheshwari: To provide some context, when we launched iFuse Torque in 2021, we introduced two designs, a fully threaded and a partially threaded lagging, to meet physician preferences. We are seeing physicians prefer the fully threaded I-Fuse Torque across all our target markets. And, in fact, demand for this implant type has exceeded our expectations. Accordingly, the reserve is related to our laggage. Operating expenses were 41.2 million dollars in the quarter, representing approximately 8% growth for the full year 2023. During the quarter, operating expenses increased approximately 4% to $156.4 million.

Oh.

Ill stone year for us hitting new highs on revenue.

Growing 31% worldwide surgeon engagement growing to over 1100 surgeons territory productivity growing almost 40% there and then the operating leverage 48% improvement in our in our adjusted EBITDA. So what we're doing.

We're coming into.

Does this.

And the bottom line.

And so what we're excited about as well is.

The opportunities that we have in 2024, so we're building on the momentum that we had this phase III.

The building of the company.

Yes.

Anshul Maheshwari: The increase was driven by increased compensation, higher commission related to revenue growth, and research and development investments. Our net loss was $11 million, or $0.27 per diluted share, for the fourth quarter of 2023, as compared to a net loss of $11.2 million, or $0.32 per diluted share, in the prior year.

Capitalizing on the launch of granite.

Nine five in order to capture more of the opportunity.

The project's sake.

Proceeds are also with the new introduction of a product towards the end of the year, but that's targeting sacral insufficiency fractures.

And so when I when I talk a little bit about the the primary Si joint fusion market. We're the undisputed leader in that market space and we were the original pioneer that's here and when you think about the patient journey in patients.

Anshul Maheshwari: For the full year 2023, net loss improved by approximately 29%, to $43.3 million, or $1.13 per diluted share, as compared to a net loss of $61.3 million, or $1.79 per diluted share, in 2020. Net loss per diluted share for fourth quarter 2023 and full year 2023 includes the impact of an increase in shares outstanding because of the follow-on stock offering in May 2020. Our adjusted EBITDA loss in the fourth quarter was $4.8 million compared to $4.2 million in the comparable period; adjusted EBITDA loss in 2023 was $17.3 million compared to $33.2 million in 2022, reflecting approximately 48% improvement. Adjusted EBITDA for the fourth quarter of 2023 and full year 2023 was negatively impacted by the $1.7 million inventory reserve highlighted earlier.

First off Brian joined.

What youre seeing is there is there is what I would call the continuum of care and so they start out with medical.

Medications physical therapy.

Injections.

And but there's also this interest in <unk>.

What I would call the next level or continue on that continuum of care, which are these.

Post.

Sure.

<unk> fusion procedures and those are typically performed by intervention will spine specialists.

And they are done with cortical bone allograft.

And then you have the traditional lateral procedure.

<unk> has pioneered with our Ics <unk> product and then more recently with our toward product.

And so as I mentioned in my script.

Okay.

For 15 months now are Stacy study was working directly with.

Those intervention lifts and they were actually trained on our lateral procedure with tour.

And we've seen good progress with that particular study now at the beginning of the year, we actually launched a new allograft product called IQ as insurance and we think that it is.

Anshul Maheshwari: Turning to liquidity, we exited 2023 with a strong balance sheet, including $166 million in cash and marketable security. Our total cash usage in the fourth quarter was less than $800,000.

Okay.

Please.

Okay.

Somewhere in between where they are receiving injections and where they are potentially receiving.

On a lateral.

Seizure.

At the end of their journey. So what we did is as the market leader, we want to provide a broad product portfolio and then what we do on top of it is use our training expertise our clinical evidence and then our experience.

Anshul Maheshwari: Our strong liquidity position, combined with our continued progress with adjusted EBITDA break-even, provides us the flexibility to self-fund a long-term growth priority. Finally, moving to our outlook for 2020. As Laura noted, we have several tailwinds and growth initiatives coming into 2020. We expect 2024 worldwide revenue of $162 million to $165 million, implying year-over-year growth of approximately $17 to $19 billion.

Yeah.

To lead to strong interventional engagement.

So we believe we've targeted.

We've taken a targeted approach and it's really allowed us to thoughtfully leverage our experienced sales force to train the specialty and then its an augment to our current strategy to reach more than.

280000 target patients earlier.

Great. Thanks, Thanks for that lower in May.

Maybe for onshore you guys, obviously saw a tremendous operating leverage in 2023.

You're forecasting more operating leverage in 'twenty, four but not to the same extent so that may just be conservative to start the year, but can you just talk about the guide and how you are balancing driving that top line growth and still working towards EBITDA breakeven.

Anshul Maheshwari: Our guidance assumes low- to mid-single-digit ASP deterioration, driven by site of service and procedure, moderate impact from new product launches, accounting for timing of launch and pace of adoption, and Modest International Revenue. Based on current revenue guidance, planned product launches, as well as commercial footprint expansion. We expect 2024 annual operating expenses to grow approximately 9%, considering the anticipated operating leverage in the business.

I'm going to throw this in.

Could we see EBITDA breakeven income in 2025.

Great. Thank you for that question.

In case, it's difficult to hear because of static. Please let me know.

So we are really proud of the operating leverage that we've demonstrated over the last couple of years.

As we benefited from the investments in the scalable infrastructure, we've built throughout the pandemic.

When you look at 2024.

Beyond outpaces opex growth rate in and you can see that at the midpoint of our guidance range and the opex growth rate expectation of 9% that's about two <unk> operating leverage now.

Laura A. Francis: We expect significant year-over-year adjustment. You've been dieting food, full year 2024, putting us within reach of our adjustability without bureaucracy. With that, I will turn the call over to Laura. Thanks, Anshul.

We do have a huge opportunity ahead of us. So we want to make sure we're making thoughtful investments to capture the growth opportunities Laura talked about several of those coming into 2024.

Laura A. Francis: I hope you can feel our excitement and confidence built on consistent innovation and execution coming into 2024. We believe the demand for the procedure will strengthen in 2024 as we roll out complementary products in each of our target markets. With a strong balance sheet, I believe we're uniquely positioned to deliver sustainable growth over the long term and have a clear line of sight to adjusted EBITDA breakeven. And with that, we're happy to take questions, Operator. Thank you. As a reminder, to ask a question, please press Star 1-1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 1-1 again.

And we think that that investment will allow us to maintain that.

You may.

To accelerate our journey towards adjusted EBITDA breakeven.

So when you think about our guide at 9% what does that incorporate <unk> got the standard Merit increase that you built in you've got the higher commissions.

Our our strategy to add more territory, especially as we've expanded our portfolio coming into 2024, So we're going to add some more territories. There you've got some more sales and marketing spend when it comes to the new products that we're going alone.

Yes.

And a lot of activity there.

Bleeding training.

With the interventional side.

Then just R&D as we think about the portfolio into the future as well, but again, we feel really good about being able to continue to get the leverage and stay committed to it now in terms of.

In terms of timing right, we're pretty confident that the operating leverage will translate into significant adjusted EBITDA improvement as we progress.

Okay.

We had strong fourth quarter of 'twenty four.

Our approach to when we get to breakeven is just get there versus sort of project when that timing will be what we are really happy with the progress that we're making and we have a clear line of sight to that to that milestone.

Operator: One moment for questions. Our first question comes from Craig Bijou with Bank of America. You may proceed. Good afternoon, guys.

Great. Thanks for taking the questions.

Thank you.

One moment for questions.

Craig William Bijou: Thanks for taking the questions, and congrats on a good finish to the year. I wanted to start with kind of what you're seeing in the SI joint fusion market and, you know, with respect to the new Allograft product. So does the recent focus on Allograft by PainDox add to SI joint fusion procedures, or are they potentially taken away from the traditional implant market?

Our next question comes from Julian Aerie with Morgan Stanley You May proceed.

Hi, Laura Ohio, Joel Thanks for taking the question, maybe just to follow up on one of Craig's questions about the.

The allograft products that youre launching just to be absolutely clear I just wanted to make sure that we're understanding that youre not seeing really a significant change in underlying market dynamics from.

From these products, taking basically the the surgeries procedures away from from Surgeons, just wanted to get a better read on that of like kind of what youre seeing on the underlying market and then onshore you did talk about some investments you're putting behind.

Laura A. Francis: And then maybe you could just give us a little bit of more color on the strategy behind allograft and what you expect contribution either on a procedure basis or from revenue. Craig, thanks for the question. And what I first want to do is just kind of wrap up a milestone year for us, hitting new highs on revenue, growing 31% worldwide, surgeon engagement growing to over 1,100 surgeons, territory productivity growing almost 40% there, and then the operating leverage 48% improvement in our adjusted EBITDA. So now what we're doing is we're coming into and the bottom line. And so what we're excited about as well is the opportunities that we have in 2024. So building on the momentum that we had in 2023, we're building up the opportunity in the primary SI joint position, capitalizing on the launch of Granite 9-5 in order to capture more of the opportunities with Sacrosede and also with a new introduction of a product toward the end of the year that targets sacral insufficiency fractured.

The <unk> products. So maybe just help us parse out like how much is actually going to be hitting the opex. How much are you spending.

There to really.

It kind of start this journey with this new specialty.

Thanks.

At about the opportunity with intervention all if you think about our journey, we have been in business for 15 years at this point, we pioneered minimally invasive Si joint fusion, we've really built this market we are the market leader in the space.

We're less than 10% penetrated into the market right now.

And so what we see is an opportunity.

Yeah.

Yes.

Third since our primary call point has always been spine surgeons, but we do think that we can reach more of these patients.

By working with interventional lists as well as spine surgeons and having multiple products that will that will meet their specific needs.

In addition, there was.

Hum.

Sure.

Laura A. Francis: And so when I talk a little bit about the primary SI joint fusion market, we're the undisputed leader in that market space, and we were the original pioneer that came here. And when you think about the patient journey and patients that are suffering from SI joint fusion, what you're seeing is what I would call a continuum of care. And so they start out with medications, physical therapy, and injections, but there's also this interest in what I would call the next level on that continuum of care, which are these post- and fusion procedures, which are typically performed by interventional spine specialists, and they are done with cortical bone allograft.

My prepared remarks, 277, eight which is specifically.

For these.

Post theory here.

Procedures, typically allograft procedure as the B.

Physician fee is around 40% less than what it is for <unk>.

Lateral being.

Done with their IP is three D or tour product.

And then.

These are around 20% glass.

But with that said once again, what it does is it gives us the opportunity in order to reach more of these patients and further build out the market. So if you look at our performance in 2023, we had a great year and that.

Laura A. Francis: And then you have the traditional lateral procedure that we have pioneered with our iFuse 3D product and then, more recently, with our TORC product. And so, as I mentioned in my..., for 15 months now. Our STACI study was working directly with those interventionalists, and they were actually trained on our lateral procedure with TORC, and we've seen good progress with that particular study. Now, at the beginning of the year, we actually launched a new allograft product called iFUSE-INTRA, and we think that it is actually somewhere in between where they're receiving injections and where they're potentially receiving a lateral procedure at So what we did is, as the market leader, we wanted to provide a broad product portfolio.

That performance was driven.

By our core market in primary <unk> Si joint fusion.

As well.

Jason market, so pelvic fixation, primarily as well as trauma, which is developing but so what we see is this opportunity to more rapidly capture this market opportunity that we've been pursuing for all of these years and.

And we're really excited to do it with both spine surgeons can in a pronounced.

And.

It provides a unique.

Okay.

Yes.

Andrew to your question on the Opex side.

Majority of our Opex increase is just the commissions the pay increases that come standard as well as some territory expansions that we had always contemplated as we think about a model where we can do $2 million per territory. We've always said in the U S.

Laura A. Francis: And then what we do on top of it is use our training expertise, our clinical evidence, and then our experience to lead to strong interventional engagement. So we believe we've targeted, we've taken a targeted approach, and it's really allowed us to thoughtfully leverage our experienced sales force to train this specialty, and that it's an addition to our current strategy to reach more than the 280,000 target patients per year. Great. Thanks. Thanks for that, Laura.

On the territories to have a business that could do $200 million of revenue.

We ended the year.

Okay.

You too to do that you're going to have some more training spend as well.

But that's across the board between dimensional and surgeons, especially with the DJ and opportunity with the 95 granted as well so I wouldn't say that there is any material shift in our in our opex strategy because of interventional.

We've just got a lot of opportunities that we've always wanted to go after.

Got it.

Just overall in some of the newer product launches, including draw those small construct in the trauma product coming.

You laid out you kind of expect another robust year of active surgeon adds can you be a little bit more specific there and just how are you thinking about maybe the utilization our underlying utilization of active surgeons improving.

Anshul Maheshwari: And maybe for Anshul, you guys obviously saw tremendous operating leverage in 2023. You're forecasting more operating leverage in 2024, but not to the same extent. So that may just be conservative to start the year, but can you just talk about the guide and how you're balancing driving, you know, that top line growth and still working towards EBITDA breakeven? And I'm going to throw this in. Could we see EBITDA breakeven come in 2025? Thank you for that question. And in case it's difficult to hear because of static, please, please let me know.

With some of these newer products. Thanks for taking the question.

Thank you.

Okay.

You have to do both are growing the number of physicians that were working with.

As well as increasing the number of procedures per physician as well so talking about intervention all by and large those will be new physicians that are performing the procedure. So it gives us this opportunity and as I said there is around 4500 interventional list.

That our targets too.

Okay.

In terms of increasing the number of procedures, we have always focused on increasing the number of primary <unk> Si joint fusion procedures that our surgeons are performing.

Anshul Maheshwari: So we are really proud of the upwarding leverage that we've demonstrated over the last couple of years, as we've benefited from the investments in the scalable infrastructure we've built throughout the pandemic. When we look at 2024, below outpaces OPEX growth rate. And you can see that at the midpoint of a guidance range and the OPEX growth rate expectation of 9%, that's about 2x operating leverage.

And then with the addition of torque and was granted it gave us the opportunity to further increase those numbers.

Either in our primary market or in our.

Yes.

In.

Okay.

Granted 95 product does is it gives us a product that's very specifically targeted toward these degenerative spine procedures and the market opportunity there.

There is around 100000 procedures per year are there any short construct procedure that go to the sacrum.

Anshul Maheshwari: You know, we do have a huge opportunity ahead of us, and we want to make sure we're making thoughtful investments to capture the growth opportunities. Laura talked about several of those coming into 2024, and we think that that investment will allow us to maintain that. We made to accelerate our journey towards adjustability without breakeven. So when you think about our guide at 9%, what does that incorporate? You've got the standard merit increase that you build in.

And so that's our bread and butter.

The surgeon the businesses.

Currently so that Si joint fusion and now they have the opportunity to perform pelvic fixation lift.

With our new granted products, so a great opportunity to deepen our relationship with our surgeons and increase the number of procedures that theyre performing with us.

Fortunately annually okay.

Thank you.

One moment for questions.

Our next question comes from Zach <unk> with Needham <unk> Company you May proceed.

Anshul Maheshwari: You've got the higher commissions and our strategy to add more territory, especially as we've expanded our portfolio coming into 2024. So we're going to add some more territories there. You've got some more sales and marketing spend when it comes to the new product that we're going to launch, including training on the interventional side, and then just R&D as we think about the portfolio into the future as well. But again, you know, we feel really good about being able to continue to get the leverage and stay committed to it. Now, in terms of timing, right, we're pretty confident that the operating leverage will translate into significant adjustment improvement as we progress in the year ahead. We have a strong fourth quarter of 24.

Great. Good afternoon, Laura natural thanks, so much for taking my questions and congrats to a strong into the year.

Maybe I wanted to talk about torque to begin with.

Or in your script, you talked a little about a little bit about Stacy, but I think another torque study as safra.

And I think it's nearing enrolment so how should we think about safran as it relates to the market development for torque does that can that trial capitalized torque adoption or what kind of continue to be more of a gradual ramp.

Thanks for the question David So.

<unk> study was actually.

Specifically engaging interventional spine spatula.

No.

But the implant.

And as I said, that's going well SaaS front is actually a study that is engaging surgeons performing sacral insufficiency fractures and so this is pelvic ring fractures its.

What we call our trauma program.

Anshul Maheshwari: You know, our approach to when we get to break even is just to get there versus, you know, sort of project when that timing will be. But we're really happy with the progress that we're making, and we have a clear line of sight to that milestone.

And I do see a pretty significant opportunity there for us.

Okay.

The pushback thing is to have a publication that shows the results from from SaaS offering by the end of 2024 more encouraged by what we're seeing currently with that.

Operator: Thanks for taking the time to answer the question. Thank you. One moment for questions. Our next question comes from Drew Ranieri with Morgan Stanley. Please proceed. Hi Laura, hi Anshul, thanks for taking the question. Maybe just to follow up on one of Craig's questions about... The Allograft product that you're launching, just to be absolutely clear, I just want to make sure that we're understanding this, that you're not seeing really a significant change in underlying market dynamics from these products taking over, basically, the surgeries and procedures away from surgeons. Just want to get a better read on that, of like kind of what you're seeing in the underlying market.

Then in terms of also what we're seeing on trauma as I said towards the end of the year, we expect to launch another product to the theater.

And so I think given that these patients that have sacral insufficiency fractures there around 100.

One.

Patients per year in the United States. They typically are treated.

In rehab, they're conservative care, they're typically not treated.

Surgically Theres a big opportunity this year for US we do think the clinical data is going to be really important.

Because of the fact that surgeons typically don't treat these patients we want to show the efficacy of <unk> in fact.

Andrew Christopher Ranieri: And then Anshul, you talked about some investments you're putting behind the product. The IQs enter a product, so maybe just help us parse out, like, how much is actually going to be hitting the OPEX? How much are you spending there to really..., you know, kind of start this journey with this new specialty? I'm quite excited about the opportunity with Interventional. If you think about our journey, we've been in business for 15 years at this point. We pioneered minimally invasive SI joint fusion.

Okay.

Exactly when we will be important there and then I am not giving much information about the new products, but this new product will be another important part of of targeting that particular market. So really excited about how we're going to finish 2024 in trauma in the opportunity.

Two.

I see that as a significant growth driver in 2025.

Laura A. Francis: We've really built this market. We are the market leader in the space, and yet we're less than 10% penetrated into the market right now. And so what we see is an opportunity here; our primary call point has always been spine surgeons, but we do think that we can reach more of these patients by working with interventionalists as well as spine surgeons and having multiple products that will meet their specific needs. In addition, there was a need to use a tool, as my prepared remarks, 27278, which is specifically for these posterior procedures, typically allograft procedures; the physician fee is around 40% less than what it is for a lateral procedure that could be done with our iFuse 3D or TORC product, and then it is around 20% less.

Great Super helpful. Laura Thanks for that.

One is probably for onshore I wanted to ask about the cadence of revenue through activity throughout the year.

Is there anything to call out in terms of seasonality I think consensus is about 37 million.

First quarter, so down kind of mid single digits sequentially I think in 23, you were actually up in the first quarter sequentially.

Sequentially so.

Anything to call out from a cadence perspective.

And any reaction to that quarter.

Yes, David Thank you for that question, so from a seasonality standpoint.

For a company in our stage of growth and innovation.

We believe our seasonality in 2024, we will continue to be impacted by the timing and pace of the rollout of the products.

Laura A. Francis: But with that said, once again, what it does is give us the opportunity to reach more of these patients and further build out the market. So if you look at our performance in 2023, we had a great year, and that performance was driven by our core market in primary SI joint fusion, as well as adjacent markets, so pelvic fixation primarily, as well as trauma, which is developing. But so, what we see is this opportunity to more rapidly capture this market opportunity that we've been pursuing for all of these years, and we're really excited to do it with both spine surgeons and interventional clinics. And it provides a unique opportunity to say, Thank you.

Not different than what we saw in 2023 that the seasonality was not comparable to what we've historically seen.

Sure.

With respect and we don't believe the six weeks of the right way to look at the business.

Given the initiatives in 2024, but from a modeling standpoint, if youre looking at a proxy the Q1 tends to be about 67% lower than the fourth quarter. So.

That's a good of a proxy and then.

Focus company is that execution, we can improve on that but I would say that historical trend of 67% is a good proxy.

Great Super helpful.

Versus Q4.

Okay, great. Thank you.

Thank you.

One moment for questions.

Our next question comes from Sam Brodowski with true Securities You May proceed.

Hey, Thanks for taking the question I guess.

First one on <unk>.

The short time or short contract launch.

Laura A. Francis: Andrew, to your question on the OPEX side, you know, the majority of our OPEX increase is just the commissions, the pay increases that come standard, as well as some territory expansions that we had always contemplated as we think about a model where we can do 2 million per territory. You know, we've always said in the U.S., we want 800 territories to have a business that can make 200 million in revenue. We ended the year in a positive way, to do that. You're going to have some more training as well, but that's across the board between interventional and surgical, especially with the DGen opportunity with the 9-5 granite as well. So I wouldn't say that, you know, there is any material shift in our OPEX strategy because of intervention. We've just got a lot of opportunities that we've always wanted to, you know, go after. I got it.

Can you guys just walk us through the puts and takes on that rolling out in <unk> versus the initial longer Comstock launch.

That we saw with granite and how should we think be thinking about the impact of that versus the initial rollout.

Yes, good question Sam so.

I think that you'll see a more rapid rollout here first of all we were a little surprised at how quickly we received clear.

Please standby your conference will resume for pension so we already.

Okay.

Hello.

You are coming in loud and clear.

Okay. Thank you Sam I'm going to answer to your question once again I'm not sure what the court and what the bidding so on the short construct lines I was saying that we actually were surprised at how quickly the.

Please stand by your conference will resume in a moment.

Please standby your conference will resume shortly.

Cell phone I'm, sorry, I missed your call, but clearly the name number and a brief message and our cardiovascular.

We did not Andrew page, either because you were not speaking or because of a bad connection to disconnect press one to record your message press too.

Andrew Christopher Ranieri: And maybe just overall on some of the newer product launches, including Intra, the small construct, and the trauma product coming out. You kind of expect another robust year of active surgeon ads. Can you be a little bit more specific there, and just how are you thinking about maybe the utilization or underlying utilization of active surgeons improving with some of these newer products? Thanks for taking the question. Thank you.

Are you still there to disconnect press one to record your message.

Thank you.

Hello.

Once you can give him Hello on Julia Michael you are coming in loud and clear right now Okay can you perhaps ma'am.

You are live loud and clear.

Thank you sorry about that some technical difficulties Sam I'm not sure what you caught on your question on short construct would you like me to restate that or did you capture most of it.

Laura A. Francis: You need to do both grow the number of physicians that we're working with, as well as increase the number of procedures per physician as well. So talking about interventional cardiology, by and large, those will be new physicians that are performing the procedure. So it gives us this opportunity, and as I said, there are around 4,500 interventionalists that are targets.

I think it would be great. If you could just run it backwards.

Okay, great great.

So a short contract loss.

Yeah.

We are we're actually quite excited about the opportunity that we have with our granted 95 product the product was actually cleared earlier than we anticipated.

Laura A. Francis: In terms of increasing the number of procedures, we have always focused on increasing the number of primary SI joint fusion procedures that our surgeons are performing. And then, with the addition of TORC and Granite, it gave us the opportunity to further increase those numbers, either in our primary market or in our adult development. What our Granite 9-5 product does is it gives us a product that's very specifically targeted toward these degenerative spine procedures. And the market opportunity? There are around 100,000 procedures per year. There are these short construct procedures that go to the sacrum.

Just a great team effort here with our product team as well as our regulatory team.

And the clearance.

It was a line extension for us and so we added a couple of different.

Areas to the <unk> first of all this assuan trajectory, which is really targeting shorter construct and then also pediatric deformity as well and to get into your question of rollout. This is a little bit different than the original granite launch primarily because the.

<unk> trays that are currently in the field that are meeting our demand for our current granite business. We will use those same instrument trays. So we already have the trades out in the field. The our territory managers have been speaking with our our surgeons.

Laura A. Francis: And so that's our bread-and-butter surgeon that is already doing pervasive SI joint fusion, and now they have the opportunity to perform pelvic fixation with our new Granite product. So a great opportunity to deepen our relationship with our surgeons and increase the number of procedures that they're performing with us quarterly and annually. Thank you.

Operator: One moment for questions. Our next question comes from David Saxon with Needham & Company. You may proceed. Great. Good afternoon, Laura Nonchal. Thanks so much for taking my questions, and congratulations on a strong end to the year. Perhaps I wanted to talk about TORC to begin with.

On these topics we are in these hospitals on the approved list and so we we think that this should be a more rapid rollout and ultimately the goal primarily is to go after these 100000.

Short construct cases in the U S.

Great. Thanks, Ron I'll, just I'll ask one on entering as well just in terms of pricing relative to our views can you level set us there and how that's factored into the growth mode.

David Ryan Lewis: Laura, in your script, you talked a little bit about Stacy, but I think another TORC study is Saffron, and I think it's nearing enrollment. What should we think about Saffron as it relates to the market development for TORC? Can that trial catalyze TORC adoption, or will it continue to be more of a gradual round? Thanks for the question, David. So on TORC, you're right, the state study was actually specifically engaging interventional spine specialists, implant, and as I said, that's going well. Saffron is actually a study that is engaging surgeons performing sacral insufficiency fractures, and so this is about pelvic ring fractures.

I'm sorry, what was the question.

Sorry, just in terms of pricing for the new allograft.

Yes.

Level set us on where that is relative to I've used.

Yes from a pricing standpoint, what I would say Sam is you got to think about it as a construct pricing.

In terms of water construct would be for them.

A multi implying primary Si joint fusion procedure in our expectation is it should be pretty comparable.

Great. Thanks for taking the questions.

Laura A. Francis: It's what we call our trauma product, and I do see a pretty significant opportunity there for us. In terms of what we're expecting, we should have a publication that shows the results from Safran by the end of 2024. We're encouraged by what we're seeing currently with that. And then, in terms of also what we're seeing on trauma, as I said, toward the end of the year, we expect to launch another product this year. And so I think given that these patients that have sacral insufficiency fractures, they're around 120 patients per year in the United States, and they typically are treated in rehab. They're conservative care, and they're typically not treated surgically.

Thank you.

One moment for questions.

Our next question comes from Caitlin Cronin with Canaccord Genuity you May proceed.

Hi, Thanks for taking the questions and congrats on a great quarter.

Just touching on the new focus on interventional less so.

We're training them in lateral procedures, so you're training them in three D and torque and then there's the new allograft product employing a posterior approach.

Hey, Caitlin and thanks for the question, we're actually training them with our torque product for the lateral procedure.

And then we are also training on the allograft product typically not the Ics three D train guler shaped implant given the the needs of interventional lists.

Laura A. Francis: There's a big opportunity that's here for us. We do think the clinical data is going to be really important because of the fact that surgeons typically don't treat these patients. We want to show the efficacy of, in fact. Saffron will be important there, and then I'm not giving much information about the new product, but the new product will be another important part of targeting that particular market. So, really excited about how we're going to finish 2024 in terms of trauma and the opportunity to see that as a significant growth driver in 2025. Great, super helpful, Laura. Thanks for that. This one's probably for Anshul.

Got it and then so is the revenue per procedure would that be you know Wes.

Fernando Bombshells versus say a surgeon that performed the procedure.

The pricing is similar so.

With with the the last question that we got from Sam that was asking about allograft pricing, but the pricing overall is very similar whether we're selling to intervention or two.

<unk> surgeons.

Okay got it and then just briefly on the O U S business what are your expectations for this year and when do you expect clearance with torque and EMEA has that happened yet.

Yeah. So.

The O U S business Caitlin is about 6% of our worldwide revenue in 2023.

David Ryan Lewis: I wanted to ask about the cadence of revenue throughout the year. Is there anything to call out in terms of seasonality? I think consensus is about 37 million for the first quarter, so down kind of mid single digits sequentially. I think in 23, you were actually up in the first quarter sequentially.

When we think about the guide for the year, France has been performing really well for us last year and the recovery in some of the other markets like UK and Germany.

They will take longer than we had previously anticipated and what our current guidance for the year at 17% to 19 does assume is a low to mid single digit year over year increase in international revenue. So U S revenue will be closer to 8% to 20% now the international market is important for us.

Anshul Maheshwari: So, you know, anything to call out from a cadence perspective and any reaction to that first quarter? Yeah, Dave, thank you for that question. So from a seasonality standpoint, for a company in our stage of growth and innovation, you know, we believe our seasonality in 2024 will continue to be impacted by the timing and pace of the rollout of the products. Not different than what we saw in 2023, where the seasonality was not comparable to what we've historically seen. From a modeling perspective, we don't believe that's the right way to look at the business given the initiatives in 2024, but from a modeling standpoint, if you're looking at a proxy, you know, Q1 tends to be about 67% lower than the fourth quarter. So, you know, that's a good enough proxy.

The team's been doing a lot of work around training new physicians.

Modifying our go to market models, which should reap benefits in 2025, and then in terms of torque.

We are working really hard to get talking to EMEA.

Which we believe can be a growth driver for the business, but likely to be in early 2025. When you start seeing any impact from that just given the regulatory process.

Okay.

Got it.

Thank you and as a reminder to ask a question. Please press star one one on your telephone one moment for questions.

Our next question comes from Ross Osborne with Cantor Fitzgerald you May proceed.

Anshul Maheshwari: And then our focus is that through execution, we can improve on that. But I would say that the historical trend of 67% is, is, is a good proxy. Great. Very helpful. Thanks, Ben. Okay, great. Thank you. Thank you. One moment for a question. Our next question comes from Sam Berdowski with True Securities. Please proceed. Hey, thanks for taking the question. I guess it's just the first one on the short contract launch. Can you kind of just walk us through the puts and takes on that rolling out in M2Q versus the initial longer contract launch that we saw with Granite, and how should we be thinking about the impact of that versus the initial one? Yeah, a good question, Sam.

Hey, guys congrats on the progress and thanks for taking the questions. So maybe just one for me would you discuss the pediatric deformity markets. Just in terms of size. The current standard of care, where you see <unk> playing a role.

Sure. It's solid it's small is a short answer to you I think the target market size is around 10000 procedures per year, Ross and so it's not it's not a big area of focus for us the.

The opportunity in Dijon spine is is 100000 thoughts 10 times that five but we have received inquiries from pediatric deformity surgeons, who are interested in pelvic fixation. We wanted to make sure. It was an option for them on label and so the new granted.

Sam Berdowski: So I think that you'll see a more rapid rollout here. First of all, we were a little surprised at how quickly we received the clearance. Please stand by, your conference will resume shortly. Hello.

<unk> five does provide that for us.

Yes.

Thank you now I will turn it over to Laura.

Operator: You are coming in loud and clear. Okay, thank you. Sam, I'm going to answer your question once again. I'm not sure what you caught and what you didn't.

Thank you so much for your time I really apologize for the technical issues I hope that we've given you all of the answers that you needed a as I said earlier, we were thrilled with the year that we just came off of and really excited about 2024 with all the new opportunities in front of us and building on the momentum that.

Operator: So, at the short construct launch, I was saying that we were actually surprised at how quickly. Please stand by. Your conference will resume in a moment. Please stand by. Your conference will resume shortly. Cell phone: I'm sorry I missed your call, but please leave your name, number, and a brief message and I'll call you back. We did not get your message either because you were not speaking or because of a bad connection. To disconnect, press 1.

We generated in 2023, so thank you again and goodbye.

Yeah.

Thank you for your participation you may now disconnect.

[music].

Yes.

Okay.

[music].

Operator: To record your message, press 2. Are you still there? To disconnect, press 1.

Operator: To record your message, press 1. Go Blue! Hello? Hello, Anshul. You are coming in loud and clear right now. Okay, can you patch me in?

Operator: You are live, loud and clear. Thank you. Sorry about that.

Operator: Some technical difficulties. Sam, I'm not sure what you caught on your question about short constructs. Would you like me to restate that, or did you capture most of it? I think it would be great if you could just run it back.

Operator: Okay, great. Great. So, a short construct launch.

Yes.

[music].

Operator: We were actually quite excited about the opportunity that we have with our Granite 9-5 product. The product was actually cleared earlier than we anticipated. Just a great team effort here with our product team as well as our regulatory team. And the clearance, it was a line extension for us.

Yes.

[music].

Laura A. Francis: And so we added a couple of different areas to the IFU. First of all, this S1 trajectory, which is really targeting shorter constructs, and then also pediatric deformity as well. And to get at your question about rollout, this is a little bit different than the original Granite launch, primarily because the instrument trays that are currently in the field that are meeting our demand for our current Granite business, we will use those same instrument trays. So we already have the trays out in the field.

Okay.

[music].

Laura A. Francis: Our territory managers have been speaking with our surgeons on these topics. We are in these hospitals on the approved list. And so we think that this should be a more rapid rollout, and ultimately, the goal primarily is to go after these 100,000 short construct cases in the U.S. Thanks, Laura. And I just want to add, just in terms of pricing, relative to iFuse, can you level set us there and how that's factored into the pricing guide? I'm sorry. What was the question?

Yes.

[music].

Yes.

[music].

Sam Berdowski: Sorry, just in terms of pricing for the new allograft, you just level set us and where that is relative to iFUSE. Yeah, from a pricing standpoint, what I would say, Sam, is you got to think about it as a construct price in terms of, you know, what a construct would be for a multi-implant primary SI joint fusion procedure. Our expectation is it should be pretty comparable, www. TheBusinessProfessor.com, Thank you.

Operator: One moment for questions. Our next question comes from Caitlin Cronin with Canaccord Genuity. Please proceed.

Okay.

[music].

Okay.

Caitlin Cronin: Hi, thanks for taking the questions and congrats on a great quarter. Just touching on the new focus on interventionalists. So you're training them in lateral procedures, so you're training them in 3D and Torque, and then there's the new Allograft product employing a posterior approach. Hey, Caitlin, thanks for the question.

[music].

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[music].

Laura A. Francis: We're actually training them with our TORC product for the lateral procedure, and then we are also training on the Allograft product, typically not the iFuse 3D triangular shaped implant, given the needs of interventionalists.

Caitlin Cronin: And then, so, you know, is the revenue per procedure, would that be, you know, less for an interventional versus, you know, say, a surgeon that performed the procedure? The pricing is similar, so with the last question that we got from Sam, that was asking about allograft pricing, the pricing overall is very similar, whether we're selling to interventional or spine surgeons. Okay, got it.

Hum.

[music].

Caitlin Cronin: And then just briefly on the OUS business, what are your expectations for this year? And when do you expect clearance for torque in EMEA? Has that happened yet?

Anshul Maheshwari: Yeah, so the OUS business, Caitlin, is about 6% of our worldwide revenue in 2023. And when we think about the guide for the year, France has been performing really well for us last year, and the recovery in some of the other markets, like the UK and Germany, will take longer than we had previously anticipated. And what our current guidance for the year at 17 to 19 assumes is a low to mid-single-digit year-over-year increase in international revenue. So, you know, US revenue will be closer to 18 to 20%.

Okay.

[music].

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[music].

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[music].

Anshul Maheshwari: Now, the international market is important for us, and the team's been doing a lot of work around training new physicians and modifying a go-to-market model, which should reap benefits in 2025. And then, in terms of torque, we are working really hard to get torque into EMEA, which we believe could be a growth driver for the business, but it is likely to be early 2025 when you start seeing any impact from that, just given the regulatory process. Got it. Thank you.

Yes.

Mhm.

[music].

Okay.

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Yes.

[music].

Operator: Thank you, and as a reminder, to ask a question, please press star one one on your telephone. One moment for questions. Our next question comes from Ross Osborne on the Canterbury Shield.

Yeah.

[music].

Ross Osborne: You may proceed. Hey guys, congrats on the progress and thanks for taking the questions. So maybe just one for me, would you discuss the pediatric or formative market just in terms of size based on standard of care and where you see grant playing a role? Sure, so it's a short answer to you.

Okay.

[music].

Yes.

[music].

Laura A. Francis: I think the target market size is around 10,000 procedures per year, Ross, and so it's not, it's not a big area of focus for us. The opportunity for DGEN spine is 100,000, so it's 10 times that size, but we have received inquiries from pediatric deformity surgeons who are interested in pelvic fixation. We wanted to make sure it was an option for them on the label, and so the new Granite 9-5 does provide that for us.

Yes.

Mhm.

[music].

So.

Laura A. Francis: Thank you. Now I will turn it over to Laura. Thank you so much for your time. I really apologize for the technical problems.

Dan.

[music].

Laura A. Francis: I hope that we've given you all of the answers that you needed. As I said earlier, we were thrilled with the year that we just came off and really excited about 2024 with all the new opportunities in front of us and building on the momentum that we generated in 2023. So thank you again and goodbye. Thank you for your participation. You may now disconnect. In the name of the Father, and of the Son, and of the Holy Ghost, I come unto you, Lord. In the name of the Father, and of the Son, and of the Holy Ghost, I come to you, Lord.

Okay.

[music].

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[music].

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[music].

Laura A. Francis: In the name of the Father, and of the Son, and of the Holy Ghost, I come unto you, Lord. ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? Good afternoon, and welcome to SI-Bone's fourth quarter 2023 earnings conference call. At this time, all participants are in a listen-only mode.

Yes.

Okay.

[music].

Operator: 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. I would now like to turn the call over to Saqib Iqbal, Senior Director of Investor Relations at SI-Bone, for a few introductory comments. Thank you for participating in today's call. Joining me are Laura Francis, Chief Executive Officer, and Anshul Maheshwari, Chief Financial Officer. Earlier today, SI-Bone released financial results for the quarter ended December 31st, 2023.

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[music].

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[music].

Saqib Iqbal: 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 are forward-looking statements within the meaning of federal securities laws, which are made pursuant to the safe harbor provisions 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. These forward-looking statements are based on the company's current expectations and inherently involve risks and uncertainties.

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[music].

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[music].

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Saqib Iqbal: These risks include SI-Bone's ability to introduce and commercialize new products and education; SI-Bone's ability to maintain favorable reimbursement for its products and procedures; Impact of Potential Economic Weakness on the Ability and Desire of Patients to Undergo Elective Procedures; and SI-Bone's ability to manage risk-stood supply chains.

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[music].

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[music].

Saqib Iqbal: Impact of Future Capital Requirements Driven by New Product Introductions and risks to the continued renormalization of the healthcare operating environment. Other forward-looking statements include our examination of operating trends and our future financial expectations, such as expectations for physician training and adoption. Active Physicians, a new product. Clinical Trial Enrollment, and are based upon our current estimates and various assumptions. 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.

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[music].

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

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Saqib Iqbal: 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. SI-Bone disclaims any intention or obligation, except as required by law, to update or revise any financial projections, which are forward-looking statements, whether because of new information, future events, or otherwise. This conference call contains time-sensitive information and is accurate only as of the live broadcast today, February 26, 2024. With that, I'll turn the call over to Laura. Thanks, Sacab.

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[music].

Laura A. Francis: Good afternoon, and thank you for joining us. 2023 was a stellar year for SI-Bone. Our physician customers and their patients, as we delivered record worldwide revenue and attained new heights in physician engagement. For the full year 2023, we generated worldwide revenue of $138.9 million, reflecting 31% growth compared to the full year 2022. This worldwide performance was led by robust U.S. demand, as over 1,600 U.S. physicians performed more than 15,000 procedures. We started 2023 with an initial revenue expectation of $124 to $127 million. But the strong demand for our highly differentiated solutions, growing physician engagement, and increases in our surgical capacity allowed us to significantly exceed that expectation. The momentum in the business was clearly evident at our national sales meeting in February.

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[music].

Laura A. Francis: Our sales organization was not only enthusiastic about our performance in 2023 but was even more energized by the potential opportunity ahead of us in 2024. Having been at the company for almost nine years, I can say the mood in the company and the confidence in our future have never been stronger. Our foresight and discipline over the last few years in building scalable operating infrastructure in a methodical fashion drove approximately a 48% improvement in adjusted EBITDA in fiscal year 2023. We also reduced our cash usage while continuing to invest in R&D and clinical evidence to support the planned portfolio expansion in 2024. Before I provide an update on our strategic priorities, I'd like to recognize our team. Working together to deliver 25% cumulative annual U.S. procedure volume growth since 2018, our first year as a public company, is a testament to your hard work. We have transformed into a multi-product company that is solving unmet clinical needs across multiple procedures. But we're just getting started, given the nearly half a million target sacral pelvic procedures per year.

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Laura A. Francis: Your focus on delivering for our customers is allowing us to capture this large market opportunity and deliver strong and sustainable revenue growth. 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, we're extremely proud of our sales and commercial team, known for their industry-leading expertise and extensive experience across our target market. Their execution has allowed us to build new markets and deliver several quarters of record revenue. We ended the year with 82 quota-carrying U.S. territory managers.

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Laura A. Francis: We complement our territory manager bandwidth with clinical support specialists, as well as a growing network of third-party sales agents for case coverage. This hybrid strategy has worked well as we continue to see growth in revenue per territory. In 2023, revenue per territory was $1.6 million, reflecting 39% growth compared to the prior year. We're confident in our ability to further increase revenue per territory and get closer to the high end of our $1.5 million to $2 million target over time. In addition to growing territory productivity, we plan to selectively add to our 82 territories over the next few years.

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Laura A. Francis: The expanded territory footprint will enable us to maximize the potential of our growing portfolio and facilitate deeper engagement with our physicians to capture the over $3 billion total addressable market opportunity. Moving on to physician engagement, we exited the fourth quarter with nearly 1,130 active physicians, an increase of over 200 active physicians in the quarter compared to the prior year period. The 22% growth in U.S. active positions over the fourth quarter of 2022 was the 12th consecutive quarter of double-digit year-over-year growth. This elevated level of physician interest and engagement is a great forward-looking indicator and underscores the long-term growth trajectory of our business. Patients suffering from SI joint dysfunction can undergo different types of care, ranging from non-surgical pain management for short-term relief, interventional procedures which can provide medium-term relief, and surgical procedures that provide long-term, durable pain relief.

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[music].

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Good afternoon, and welcome to ESI bones fourth quarter 2023 earnings conference 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.

I'd now like to turn the call over to <unk> Senior director of Investor Relations at Si bone for a few introductory comments.

Thank you for participating in today's call.

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

Earlier today Si bone released financial results for the quarter ended December 31 2022.

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.

Laura A. Francis: Over the last few years, we've seen an increase in interest in SI joint stabilization procedures from interventional spine physicians, particularly cortical bone allografts. Given that the SI joint fusion market is less than 10% penetrated today and interventional spine physicians have a growing interest in the space, we've expanded our engagement with this special. We believe the partnership with our surgeons, as well as interventional spine physicians, which include anesthesiologists, physical medicine and rehabilitation specialists, and interventional radiologists, will accelerate our ability to capture this market opportunity. For the last 15 months, we've been targeting a subset of the estimated 4,500 interventionalists in the U.S. who have prior experience with other minimally invasive spine procedures. We've engaged and trained highly skilled interventionists in our lateral technique using IQSTOR.

Which are made pursuant to the safe Harbor provisions of the private Securities Litigation Reform Act of 1095.

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

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

These risks include <unk> ability to introduce and commercialize new products and indications.

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

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

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

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

Other forward looking statements include our examination of operating trends and our future financial expectations.

Laura A. Francis: While still early, we're encouraged by the level of interest, the caliber of interventionalists we have trained, and their pace of adoption. Clinical evidence has always been an important part of SI-Bone's commitment to its patients and physicians. In June 2023, we also initiated the STACI study, which is a prospective study on the use of IQs TORC in patients with sacroiliac joint dysfunction by intervention.

Such as expectations with physician training and adoption.

Active physicians.

New product and clinical trial enrollment and are based upon our current estimates and various assumptions.

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.

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

Quarter reconciliation of these non-GAAP measures to GAAP accounting, please see the company's earnings release issued earlier today.

Laura A. Francis: The enrollment is ongoing, and we expect to publish early results by the end of 2024. As a market leader, we believe that our broad product portfolio, training expertise, clinical evidence, and experienced sales force are clear differentiators that are leading to strong interventional engagement. Going forward, we expect active physician growth to remain strong as we engage the nearly 8,000 target surgeons and 4,500 target interventionalists. We also expect their growing product portfolio and published clinical evidence to drive deeper engagement and increase procedures per physician over time. Turning to products and solutions, we have a demonstrated track record of building innovative products and surgical techniques to address unmet clinical needs and improve patient outcomes. The robust procedure volume growth we've experienced in the U.S. substantiates the value of our innovation.

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

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.

<unk> with the Securities and Exchange Commission.

<unk> 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.

This conference call contains time sensitive information and is accurate only as of the live broadcast today February 26, 2024 with that I'll turn the call over to Laura.

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

2023 was a stellar year for assai inbound our physician customers and their patients.

We delivered record worldwide revenue and attain new heights and physician engagement.

For the full year 2023, we generated worldwide revenue of $138 $9 million, reflecting 31% growth compared to the full year 2022.

Laura A. Francis: In 2024, we're launching new products in each of our target markets to further extend our leadership position. Within SI joint dysfunction and degeneration, ICUs3D and ICUsTORC provide our physicians with the most comprehensive solutions for minimally invasive SI joint fusion procedures reimbursed under CPT code 27279. Effective January 1, 2024, the AMA adopted a separate CPT code 27278 to describe minimally invasive sacroiliac procedures when performed using an intraarticular implant, typically a cortical bone allograft placed directly in a joint from a posterior approach. As I shared earlier, this technique is more commonly used by interventional spine physicians, with the new CPT code 27278, established for both facility and office-based procedures, and with coverage likely available from some payers.

This worldwide performance was led by robust U S demand is over 600 U S physicians performed more than 15000 procedures.

We started 2023 with an initial revenue expectation of $124 million to $127 million.

Strong demand for our highly differentiated solutions growing physician engagement and increases in our surgical capacity allowed us to significantly exceed that expectation.

The momentum in the business was clearly evident at our National sales meeting in February our sales organization was not only enthusiastic about our performance in 2023, but what's even more energized by the potential opportunity ahead of us in 2024.

Having been at the company for almost nine years I can say the mood in the company and the confidence in our future has never been stronger.

Our foresight and discipline over the last few years in building a scalable operating infrastructure and methodical fashion drove approximately 48% improvement in adjusted EBITDA in fiscal year 2023.

Laura A. Francis: We expanded our interventionalist training to also include our new Allograft product, iFuse Interface. iFuse Intra builds on iFuse Bone, which was launched in 2019 with enhanced surgical techniques that enable accurate placement of the implant into the joint using a posterior approach. We recently completed the first ICU Venture procedure in an office-based lab setting. With iFuse Torque and iFuse Intra, we now offer interventionalists multiple products to address their treatment preferences. Moving to pelvic fixation, based on the strong adoption demand and growing surge of interest, we believe our breakthrough device, iFuse Bedrock Granite, can become the standard of care for fixation and fusion of the SI joint, providing a strong foundation at the base of long construct adult deformity procedures. A recent publication with early cilia results highlighted the prevalence of SI joint pain in 16% of the patients undergoing spinal deformity surgery, further underscoring the need for inclusion of pelvic fixation infusion as part of these procedures.

Also reduced our cash usage, while continuing to invest in R&D and clinical evidence to support the planned portfolio expansion in 2024.

Before I provide an update on our strategic priorities I'd like to recognize our team working together to deliver 25% cumulative annual U S procedure volume growth since 2018, our first year as a public company is a testament to your hard work, we transformed into a multi prong.

At a company that is solving unmet clinical needs across multiple procedures.

We're just getting started given the nearly half a million target sacro pelvic procedures per year.

Our focus on delivering for our customers is allowing us to capture this large market opportunity and deliver strong and sustainable revenue growth.

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.

Extremely proud of our sales and commercial team known for their industry, leading expertise and extensive experience across our target markets there.

Their execution has allowed us to build new markets and deliver several quarters of record revenue.

Laura A. Francis: On the granite line extension, at the end of January, we received 510K clearance from the FDA for the 9.5 millimeter diameter implant with S1 and pediatric deformity indication. Since Granite was launched in 2022, approximately 40% of our Granite case volume has been in shorter 2-4 level constructs, which are generally degenerative spine fusion procedures. Based on published data, post-operative SI joint incidence in shorter-level surgeries is estimated to be up to 20%. Additionally, some patients undergoing shorter-level lumbar fusion procedures are at a higher risk of revision due to screw loosening and other hardware failure from underlying conditions such as high pelvic incidence, osteoporotic bone, or high BMI.

We ended the year with 82 quota carrying U S territory managers.

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

Hybrid strategy has worked well as we continue to see growth in revenue per territory.

In 2023 revenue per territory was $1 6 million.

Reflecting 39% growth compared to the prior year.

We're confident in our ability to further increase revenue per territory and get closer to the high end of our $1 5 million to $2 million target over time.

In addition to growing territory productivity, we plan to selectively add to our 82 territories over the next two years.

The expanded territory footprint will enable us to maximize the potential of our growing portfolio.

And facilitate deeper engagement with our physicians to capture the over $3 billion total addressable market opportunity.

Moving on the physician engagement, we exited the fourth quarter with nearly 1130 active physicians and increase of over 200 active physicians in the quarter compared to the prior year period.

Laura A. Francis: The current adoption of the larger diameter granite in these shorter level fusion procedures illustrates the increasing interest among the surgeon community in including pelvic fixation in high-risk patients. We believe the availability of the smaller diameter implant will provide an offering for the approximately 100,000 annual degenerative spine procedures that end at the sacrum, as well as engaged deformity surgeons who have expressed a preference for a smaller diameter implant. We plan to launch the smaller diameter granite implant in the second quarter. In trauma surgery, we've made significant progress over the last 12 months to develop the market for treating sacral insufficiency. We are engaged with major trauma center thought leaders, and are encouraged by the pace of ITU's TORC adoption for treating these. Toward the end of 2024, we will launch another product targeting the pelvic trauma market.

The 22% growth in U S active physicians over the fourth quarter of 2022 was the 12th consecutive quarter of double digit year over year growth.

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

Patients suffering from Si joint dysfunction can undergo different types of care ranging from non surgical pain management for short term relief.

Intervention procedures witching provide medium term relief.

And surgical procedure that provide long term durable pain relief.

Over the last few years, we've seen an increase in interest in FY joint stabilization procedures from interventional in.

Particularly cortical bone allograft.

Given that the Si joint fusion market is less than 10% penetrated today and the interventional spine physician's growing interest in the space, we've expanded our engagement with the specialty.

We believe the partnership with our surgeons as well as interventional spine physicians, which include anesthesiologists, physical medicine, and rehabilitation specialists and interventional radiologists will accelerate our ability to capture this market opportunity.

Laura A. Francis: We believe the new product, combined with the initial results from our Saffron trial in late 2024, will be key to capturing the trauma opportunity, with over 120,000 sacral insufficiency fractures a year and a one-year mortality rate of up to 25% for patients who are treated with bed rest. The trauma market will be a crucial long-term growth driver for us. With that, I'll hand the call over to Anshul to discuss our financial performance. Thanks, Laura. Good afternoon, everyone.

Over the last 15 months, we've been targeting a subset of the estimated 4500 interventional list in the U S who have prior experience with other minimally invasive spine procedures.

We've engaged and trained highly skilled interventional lifts in our lateral technique using IP to work well.

While still early we're encouraged by the level of interest the caliber of interventional is we've trained and their pace of adoption.

Clinical evidence has always been an important part of our XI bonds commitment to its patients and physicians.

In June 2023, we also initiated the Stacy study, which is a prospective study on the use of Ice's tour and patients with sacroiliac joint dysfunction by Interventional list being.

Enrollment is ongoing and we expect to publish early results by the end of 2024.

Anshul Maheshwari: My comments today will be focused on fourth quarter and fiscal year revenue growth, gross margin, productivity, and living. Additionally, all the comparisons provided will be versus the same period in the prior year, unless noted otherwise, starting with revenue. Our fourth quarter worldwide revenue was $38.9 million, representing growth of approximately 22%. U.S. revenue was $36.7 million, representing approximately 22% growth, predominantly from an increase in procedure work. International revenue in the fourth quarter was $2.2 million, representing approximately 12% growth.

As the market leader, we believe that our broad product portfolio training expertise clinical evidence and experienced salesforce are clear differentiators that are leading to strong interventional engagement.

Going forward, we expect active physician growth to remain strong as we engaged the nearly 8000 targets surgeons and 4500 targeted interventional lists.

We also expect our growing product portfolio and published clinical evidence to drive deeper engagement and increase procedure per physician over time.

Turning to products and solutions, we have a demonstrated track record of building innovative products and surgical techniques to address unmet clinical needs and improve patient outcomes.

The robust procedure volume growth, we've experienced in the U S substantiates the value of our innovation.

Anshul Maheshwari: For the full year 2023, we generated worldwide revenue of $138.9 million, reflecting 31% growth. Our U.S. revenue grew approximately 32%, to $130.6 million. U.S. revenue growth was driven by approximately 32% increase in procedure volume growth. International revenue for the full year 2023 was $8.3 million, representing 8% Moving to Gross Margin and Product. Our gross margin for the fourth quarter and the full year 2023 was approximately 74% and 79%, respectively. The fourth quarter gross margin includes an approximately four-percentage point impact from a $1.7 million excess inventory result.

In 2024, we're launching new products in each of our target markets to further extend our leadership position.

Within Si joint dysfunction, and degeneration, ICU sturdy and Ice's tour provider physicians with the most comprehensive solution for minimally invasive Si joint fusion procedures reimbursed under CPT code 270 709.

Effective January one 2024.

Ami adopted a separate CPT code $2 seven to 708 to describe minimally invasive sacroiliac procedures, one performed using an inter articulate implants typically of cortical bone allograft placed directly into joined from a posterior approach.

As I shared earlier this technique is more commonly used by interventional spine physicians.

With the new CPT code to 780, <unk> established for both facility and office based procedures and less coverage likely available from some payers we expanded our intervention less training to also include our new allograft product Ice's intra.

Anshul Maheshwari: To provide some context, when we launched iFuse Torque in 2021, we introduced two designs, a fully threaded and a partially threaded lagging, to meet physician preferences. We are seeing physicians prefer the fully threaded iFuse Torq across all our target markets. And, in fact, demand for this implant type has exceeded our expectations. Accordingly, the reserve is related to our lag. Operating expenses were $41.2 million in the quarter, representing approximately 8% growth for the full year 2023. During the quarter, operating expenses increased approximately 4% to $156.4 million.

I choose interim built on Ice's zone, which was launched in 2019 with enhanced surgical techniques that enable accurate placement of the implant into the joint using a post Gary approach.

We recently completed the first ICU venture procedure in an office based lab setting with.

With Ips torque and Ics intra we now offer interventional with multiple products to address their treatment preferences.

Moving to pelvic fixation based on the strong adoption demand and growing surgeon interest we believe our breakthrough device ICU bed rock granite can become the standard of care for fixation infusion of the Si joint providing a strong foundation at the base of long construct adult deformity procedures.

A recent publication with early Sylvia results highlighted the prevalence of Si joint pain, and 16% of the patients undergoing spinal deformity surgery.

Anshul Maheshwari: The increase was driven by increasing compensation, Higher commission related to revenue growth and research and development investments. Our net loss was $11 million, or $0.27 per diluted share, for the fourth quarter of 2023 as compared to a net loss of $11.2 million, or $0.32 per diluted share, in the prior year.

Other underscoring the need for inclusion of pelvic fixation infusion as part of these procedures.

On the granite line extension at the end of January we received five 10-K clearance from the FDA for the $9 five millimeter diameter implant with Epsilon and pediatric deformity indication.

Since granite was launched in 2022, approximately 40% of our granite case volume has been in shorter two to four level contracts, which are generally degenerative spine fusion procedures.

Anshul Maheshwari: For the full year 2023, net loss improved by approximately 29%, to $43.3 million, or $1.13 per diluted share, as compared to a net loss of $61.3 million, or $1.79 per diluted share, in 2020. Net loss per diluted share for fourth quarter 2023 and full year 2023 includes the impact of an increase in shares outstanding because of the follow-on stock offering in May 2020. Our adjusted EBITDA loss in the fourth quarter was $4.8 million compared to $4.2 million in the comparable period; adjusted EBITDA loss in 2023 was $17.3 million compared to $33.2 million in 2022, reflecting approximately 48% improvement. Adjusted EBITDA for the fourth quarter of 2023 and full year 2023 was negatively impacted by the $1.7 million inventory reserve highlighted earlier. Turning to liquidity, We exited 2023 with a strong balance sheet, including $166 million in cash and marketable security. Our total cash usage in the fourth quarter was less than $800,000.

Based on published data post operative Si joint incidents and shorter level surgeries is estimated to be up to 20%.

Additionally, some patients undergoing shorter level lumbar fusion procedures or at a higher risk of revision due to screw loosening and other hardware failure from underlying conditions, such as high pelvic incidents osteoporotic bone or high BMI.

The current adoption of the larger diameter granite in the shorter level fusion procedures illustrates the increasing interest among the surgeon community and including pelvic fixation in high risk patients.

We believe the availability of the smaller diameter implant will provide an offering for the approximately 100000 annual degenerative spine procedures that ended the sacrum as well as engage deformity surgeons, who have expressed a preference for smaller diameter implant.

We plan to launch the smaller diameter granted implant in the second quarter.

And trauma surgery, we've made significant progress over the last 12 months to develop the market for treating sacral insufficiency fractures.

We're engaged with major trauma center thought leaders are encouraged by the pace of ICU torque adoption for treating these patients.

Towards the end of 2024, we will launch another product targeting the pelvic trauma market.

We believe the new product combined with the initial results from our Safford trial in late 2024 will be key to capturing the trauma opportunity.

With over 120, <unk> sacral insufficiency fracture of the year and one year mortality rate of up to 25% for the patients who are treated with bad breath. The trauma market will be a crucial long term growth driver for us.

Anshul Maheshwari: Our strong liquidity position, combined with our continued progress with adjusted EBITDA break-even, provides us the flexibility to self-fund a long-term growth priority. Finally, moving to our outlook for 2020. As Laura noted, we have several tailwinds and growth initiatives coming into 2020. We expect 2024 worldwide revenue of $162 million to $165 million, implying year-over-year growth of approximately $17 to $19 million.

With that I'll hand, the call over to <unk> to discuss our financial performance.

Thanks, Laura Good afternoon, everyone. My comments today will be focused on fourth quarter and fiscal year revenue growth gross margin.

<unk> and liquidity.

Additionally, all the comparisons provided will be versus the same period in the prior year unless noted otherwise.

Starting with revenue growth.

Our fourth quarter worldwide revenue was $38 9 million.

Representing growth of approximately 22%.

U S revenue was $36 7 million.

Anshul Maheshwari: Our guidance assumes low- to mid-single-digit ASP deterioration, driven by site of service and procedure, moderate impact from new product launches, accounting for timing of launch and pace of adoption, and Modest International Revenue. Based on current revenue guidance, planned product launches, as well as commercial footprint expansion. We expect 2024 annual operating expenses to grow approximately 9%, considering the anticipated operating leverage in the business.

Representing approximately 22% growth.

Predominantly from increase in procedure volume.

International revenue in the fourth quarter was $2 2 million, representing approximately 12% growth.

For the full year 2023, we generated worldwide revenue of $138 $9 million.

Reflecting 31% growth.

Our U S revenue grew approximately 32% to $136 million.

U S revenue growth was driven by approximately 32% increase in procedure volume growth.

National revenue for the full year, 2023 was $8 $3 million, representing 8% growth.

Moving to gross margin and productivity.

Our gross margin for the fourth quarter and full year 2023 was approximately 74% and 79% respectively.

The fourth quarter gross margin includes an approximate four percentage point impact from a $1 $7 million excess inventory reserve.

To provide some context, when we launched <unk> in 2021, we introduced two designs.

Anshul Maheshwari: We expect significant year-over-year adjustment, you've been dieting food, full year 2024, putting us within reach of our adjustability without bureaucracy. With that, I will turn the call over to Laura. Thanks, Anshul.

A fully credit and a partially credit lagging plant to meet physician preference.

We are seeing physicians prefer the Felice credit ICU talk across all our target markets and in fact demand for this <unk> type has exceeded our expectations.

Accordingly, the reserve is related to our logging plan.

Operating expenses were $41 2 million in the quarter, representing approximately 8% growth.

Laura A. Francis: I hope you can feel our excitement and confidence built on consistent innovation and execution coming into 2024. We believe the demand for the procedure will strengthen in 2024 as we roll out complementary products in each of our target markets. With a strong balance sheet, I believe we're uniquely positioned to deliver sustainable growth over the long term and have a clear line of sight to adjusted EBITDA breakeven. With that, we're happy to take questions. Thank you. As a reminder, to ask a question, please press Star 1-1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 1-1 again.

For the full year 2023, operating expenses increased approximately 4% to $156 4 million.

The increase was driven by increased compensation higher commissions related to revenue growth and research and development investments.

Our net loss was $11 million or 27 per diluted share for the fourth quarter of 2023 as compared to a net loss of $11 2 million or 32 cents per diluted share in the prior year period.

For the full year 2023, net loss improved by approximately 29% to $43 3 million or $1 13 per diluted share as compared to a net loss of $61 3 million or $1 79 per diluted share in 2022.

Operator: One moment for questions. Our first question comes from Craig Bijou with Bank of America. You may proceed. Good afternoon, guys.

Net loss per diluted share for fourth quarter 2023, and full year 2023 includes the impact of increase in shares outstanding because of the follow on stock offering in May 2023.

Craig William Bijou: Thanks for taking the questions and congrats on a good finish to the year. I wanted to start with kind of what you're seeing in the SI joint fusion market and, you know, with respect to the new Allograft product. So, does the recent focus on Allograft by PainDox add to SI joint fusion procedures or are they potentially taken away from the traditional implant market?

Our adjusted EBITDA loss in the fourth quarter was $4 8 million.

Compared to $4 $2 million in the comparable period.

Adjusted EBITDA loss in 2023 was $17 3 million.

Compared to $33 2 million in 2022.

Reflecting approximately 48% improvement.

Laura A. Francis: And then maybe if you could just give us a little bit of more color on the strategy behind allograft and what you expect contribution either on a procedure basis or from revenue. Craig, thanks for the question, and what I first want to do is just kind of wrap up a milestone year for us, hitting new highs on revenue, growing 31% worldwide, surgeon engagement growing to over 1,100 surgeons, territory productivity growing almost 40% there, and then the operating leverage 48% improvement in our adjusted EBITDA. So now what we're doing is we're coming into and on the bottom line. And so what we're excited about as well is the opportunities that we have in 2024. So we're building on the momentum that we had in 2023.

Adjusted EBITDA for fourth quarter, 2023, and full year 2023 was negatively impacted by the $1 7 million inventory reserve highlighted earlier.

Turning to liquidity.

Exited 2023 with a strong balance sheet.

<unk> $166 million in.

And cash and marketable securities.

Our total cash usage in the fourth quarter was less than $800000.

Our strong liquidity position combined with our continued progress with adjusted EBITDA breakeven provides us the flexibility to self fund our long term growth priorities.

Finally, moving to our outlook for 2024.

As Laura noted, we have several tailwind and growth initiatives coming into 2024.

We expect 2024 worldwide revenue of $162 million to $165 million.

Implying year over year growth of approximately 17% to 19%.

Our guidance assumes low to mid single digit ASP deterioration.

Driven by site of service and procedure mix.

Moderate impact from new product launches accounted for timing of launch and pace of adoption and.

And modest international revenue growth.

We expect 2024 annual gross margin to be approximately 78%.

Laura A. Francis: And we're building up the opportunity in the primary SI joint vision, capitalizing on the launch of Granite 9-5 in order to capture more of the opportunities, with a new introduction of a product toward the end of the year that targets sacral insufficiency fractured. And so when I talk a little bit about the primary SI joint fusion market, we're the undisputed leader in that market space, and we were the original pioneer that came here. And when you think about the patient journey and patients that are suffering from SI joint fusion, you know, what you're seeing is what I would call a continuum of care. And so they start out with medications, physical therapy, injections, but there's also this interest in what I would call the next level or continue on that continuum of care, which are these post-seizures medial infusion procedures, which are typically performed by interventional spine specialists, and they are done with cortical bone allografts.

Based on current revenue guidance planned product launches as well as commercial footprint expansion, we expect 2020 for annual operating expenses to grow approximately 9%.

Considering the anticipated operating leverage in the business, we expect significant year over year adjusted EBITDA improvement our full year 2024.

Putting us within reach of our adjusted EBITDA breakeven goal.

With that I will turn the call over to Laura.

Thanks onshore.

Hope you can feel our excitement and confidence built on consistent innovation and execution coming into 2024.

We believe the procedure demand will strengthen in 2024, as we rollout complementary products in each of our target markets.

<unk> balance sheet I believe we are uniquely positioned to deliver sustainable growth over the long term and have a clear line of sight to adjusted EBITDA breakeven.

That we're happy to take questions operator.

Thank you as a reminder to ask a question. Please press star one on your telephone and wait for your name to be announced to withdraw. Your question. Please press star one again, one moment for questions.

Laura A. Francis: And then you have the traditional lateral procedure that we have pioneered with our iFuse 3D product and then, more recently, with our TORC product. And so, as I mentioned in my..., for 15 months now. Our STACI study was working directly with those interventionalists, and they were actually trained on our lateral procedure with TORC, and we've seen good progress with that particular study. Now, at the beginning of the year, we actually launched a new allograft product called iFUSE-INTRA, and we think that it actually works. Thank you. Thank you, somewhere in between where they're receiving injections and where they're potentially receiving a lateral procedure at the end of their journey. So what we did is, as the market leader, we wanted to provide a broad product portfolio.

Our first question comes from Craig Bijou with Bank of America, You May proceed.

Good afternoon, guys. Thanks for thanks for taking the questions and congrats on a good finish to the year.

I wanted to start with kind of what youre seeing in the Si joint fusion market.

And with respect to the new allograft product so.

Does the recent focus on allograft pain docs is that adding to Si.

Si joint fusion procedures or are.

Or are they potentially taken away from the traditional implant market and then maybe if you could just give us a little bit of more color on the strategy behind Allograph in.

What you expect contribution either on a procedure basis or from a revenue perspective.

Great. Thanks for the question and what I first want to do is just kind of red.

Uh huh.

Milestone year for us hitting new highs on revenue.

Laura A. Francis: And then what we do on top of it is use our training expertise, our clinical evidence, and then our experience to lead to strong interventional engagement. So we believe we've targeted, we've taken a targeted approach, and it's really allowed us to thoughtfully leverage our experienced sales force to train this specialty, and that it's an addition to our current strategy to reach more than the 280,000 target patients per year. Great. Thanks. Thanks for that, Laura.

Growing 31% worldwide surgeon engagement growing to over 1100 surgeons territory productivity growing almost 40% there and then the operating leverage 48% improvement in our in our adjusted EBITDA. So now what we're doing.

We're coming into this.

This is.

The top line and the bottom line.

And so what we're excited about as well is.

The opportunities that we have in 2024, so building on the momentum that we have.

Anshul Maheshwari: And maybe for Anshul, you guys obviously saw tremendous operating leverage in 2023. You're forecasting more operating leverage in 2024, but not to the same extent. So that may just be conservative to start the year.

Okay.

Building up the opportunity.

Si joint fusion.

Capitalizing on the launch of granite.

Nine five in order to capture more of the opportunity.

The project's sake.

They proceed and also with the new introduction of a product towards the end of the year that that's targeting sacral insufficiency track shared.

Anshul Maheshwari: But can you just talk about the guide and how you're balancing, driving, you know, that top line growth and still working towards EBITDA breakeven? And I'm going to throw this in. Could we see EBITDA breakeven come in 2025?

And so when I when I talk a little bit about the the primary Si joint fusion market. We're the undisputed leader in that market space and we were the original pioneer that's here and when you think about the patient journey and station.

Okay.

Brian.

And what Youre seeing is there is there is what I would call the continuum of care and so they start out with.

Anshul Maheshwari: Correct. Thank you for that question. And in case it's difficult to hear because of static, please, please let me know.

Medications physical therapy.

Injections.

And but there's also this interest in.

Anshul Maheshwari: So we are really proud of the upwarding leverage that we've demonstrated over the last couple of years, as we've benefited from the investments in the scalable infrastructure we've built throughout the pandemic. When we look at 2024... Bill outpaces OPEX growth rate, and you can see that at the midpoint of a guidance range and the OPEX growth rate expectation of 9%, that's about 2x operating leverage. You know, we do have a huge opportunity ahead of us, and we want to make sure we're making thoughtful investments to capture the growth opportunities. Laura talked about several of those coming into 2024, and we think that that investment will allow us to maintain that. We are making to accelerate our journey towards a just and even-out breakeven. So when you think about our guide at 9%, what does that incorporate? You've got the standard merit increase that you build in.

What I would call the next level or continue on that continuum of care, which are these.

Post.

Sure.

<unk> fusion procedures and those are typically performed by interventional spine specialists.

And they are done with cortical bone allograft.

And then you have the traditional lateral procedure.

That we have pioneered with our IP <unk> product and then more recently with our torque product.

And so as I mentioned in my script.

Okay.

Third our 15 months now are Stacy study was working directly with those intervention lifts and they were actually trained on our lateral procedure with tour.

And we've seen good progress with that particular study now at the beginning of the year, we actually launched a new allograft product called IQ <unk> insurer, and we think that it is.

Please.

Okay.

Somewhere in between where they are receiving injections and where they are potentially receiving.

On a lateral.

Seizure.

At the end of their journey. So what we did is as the market leader, we want to provide a broad product portfolio and then what we do on top of it is use our training expertise our clinical evidence and then our experience.

Anshul Maheshwari: You've got the higher commissions and our strategy to add more territory, especially as we've expanded our portfolio coming into 2024. So we're going to add some more territories there. We've got some more sales and marketing spend when it comes to the new product that we're going to launch, including training on the interventional side, and then just R&D as we think about the portfolio into the future as well. But again, we feel really good about being able to continue to get the leverage and stay committed to it. Now, in terms of timing, we're pretty confident that the operating leverage will translate into significant adjustment improvement as we progress in the year ahead. We have a strong fourth quarter of 24.

Yeah.

To lead to strong interventional engagement.

So we believe we've targeted.

We've taken a targeted approach and it's really allowed us to thoughtfully leverage our experienced sales force to train the specialty and then its an augment to our current strategy to reach more than.

280000 target patients earlier.

Great. Thanks, Thanks for that Lauren.

For onshore you guys, obviously saw a tremendous operating leverage in 2023.

You're forecasting more operating leverage in 'twenty, four but not to the same extent so that may just be conservative to start the year, but can you just talk about the guide and how you are balancing driving that topline growth.

Anshul Maheshwari: You know, our approach to when we get to break even is just to get there versus, you know, sort of project when that timing will be. But we're really happy with the progress that we're making, and we have a clear line of sight to that milestone. Great, thanks for taking the question. Thank you.

Still working towards EBITDA breakeven.

I'm going to throw this in.

Could we see EBITDA breakeven income in 2025.

Correct. Thank you for that question and in case its difficulty here because of static. Please let me know.

Operator: One moment for questions. Our next question comes from Drew Ranieri with Morgan Stanley. You may proceed. Hi Laura, hi Anshul.

So we are really proud of the operating leverage that we've demonstrated over the last couple of years.

As we benefited from the investments in the scalable infrastructure, we've built throughout the pandemic.

Andrew Christopher Ranieri: Thanks for taking the question. Maybe just to follow up on one of Craig's questions about... I just want to make sure that we're understanding this, that you're not seeing really a significant change in underlying market dynamics from these products taking... Basically, surgeries and procedures away from surgeons. Just want to get a better read on that, of like kind of what you're seeing in the underlying market.

When we look at 2024.

B outpaces opex growth rate in and you can see that at the midpoint of our guidance range and the opex growth rate expectation of 9% that's about two <unk> operating leverage now.

We do have a huge opportunity ahead of us that we want to make sure we're making thoughtful investments to capture the growth opportunities Laura talked about several of those coming into 2024.

We think that that investment will allow us to maintain that.

Laura A. Francis: And then, Anshul, you talked about some investments you're putting behind www.thevenusproject.com, to kind of start this journey with this new specialty. I'm quite excited about the opportunity with Interventional. If you think about our journey, we've been in business for 15 years at this point. We pioneered minimally invasive SI joint fusion.

Okay.

Okay.

To accelerate our journey towards adjusted EBITDA breakeven.

So when you think about our guide at 9% what does that incorporate <unk> got the standard Merit increase that you build in you've got the higher commissions.

And our our strategy to add more territory, especially as we've expanded our portfolio coming into 2024, so we're going to add some more territories there.

Got some more sales and marketing spend when it comes to the new products that we're going to launch.

Yes.

And a lot of activity, there, including training with the intervention side.

And then just R&D as we think about the portfolio into the future as well, but again, we feel really good about being able to continue to get the leverage and stay committed to it now in terms of.

Laura A. Francis: We've really built this market. We are the market leader in the space. And yet, we're less than 10% penetrated into the market right now, and so what we see is an opportunity here, surgeons. Our primary call point has always been spine surgeons, but we do think that we can reach more of these patients by working with interventionalists as well as spine surgeons and having multiple products that will meet their specific needs. In addition, there was a need to do the school, as my prepared remarks, 27278, which is specifically for these posterior procedures, typically allograft procedures; the physician fee is around 40% less than what it is for a lateral procedure typically done with our iFuse 3D or TORC product, and then the facilities are around 20% less.

In terms of timing right, we're pretty confident that the operating leverage will translate into significant adjusted EBITDA improvement as we progress.

Okay.

We have a strong fourth quarter of 'twenty four.

Our approach to when we get to breakeven is just get there versus sort of project when that timing will be what we are really happy with the progress that we're making and we have a clear line of sight to that to that milestone.

Alright, great. Thanks for taking the questions.

Thank you.

One moment for questions.

Our next question comes from drew Ranieri with Morgan Stanley You May proceed.

Hi, Laura Hi, onshore well thanks for taking the question maybe just to follow up on one of Craig's questions about the.

The allograft products that youre launching just to be absolutely clear I just wanted to make sure that we're understanding that youre not seeing really a significant change in underlying market dynamics from.

Laura A. Francis: But with that said, once again, what it does is it gives us the opportunity in order to reach more of these patients and further build out the market. So if you look at our performance in 2023, we had a great year and that performance was driven by our core market in primary SI joint fusion, as well as an adjacent market, so pelvic fixation primarily, as well as trauma, which is developing. So what we see is this opportunity to more rapidly capture this market opportunity that we've been pursuing for all of these years, and we're really excited to do it with both spine surgeons and interventionists, and it provides a unique opportunity to Andrew, to your question on the OPEX side, you know, the majority of our OPEX increase is just the commissions, the pay increases that come standard, as well as some territory expansions that we had always contemplated as we think about a model where we can do 2 million per territory, you know, we've always said in the U.S., we want 800 territories to have a business that can do 200 million of revenue.

From these products, taking basically the the surgeries procedures away from from Surgeons, just wanted to get a better read on that of like kind of what youre seeing on the underlying market and then onshore you did talk about some investments you're putting behind.

The Icu's edra products. So maybe just help us parse out like how much is actually going to be hitting the opex. How much are you spending.

There to really.

Kind of start this journey with this new specialty.

Thanks, everybody is excited about the opportunity with intervention all if you think about our journey, we have been in business for 15 years at this point, we pioneered minimally invasive Si joint fusion, we've really built this market we are the market leader in this.

Space and yet we're less than 10% penetrated into the market right now.

And so what we see is an opportunity.

Okay.

Yes.

Third since our primary call point has always been spine surgeons, but we do think that we can reach more of these patients.

By working with intervention.

As well as spine surgeons and having multiple products that will that will meet their specific needs.

In addition, there was.

Hum.

My prepared remarks, 277, eight which is specifically.

Laura A. Francis: We ended the year in about a month to do that. You're going to have some more training spent as well, but that's across the board between interventional and surgical surgeons, especially with the D-Gen opportunity with the 9-5-Granite as well. So I wouldn't say that, you know, there is any material shift in our op-ed strategy because of intervention. We've just got a lot of opportunities that we've always wanted to, you know, go after.

For these.

Post steering gear.

<unk> typically allograft procedures the b.

The physician fee is around 40% less than what it is for <unk>.

Lateral.

I think what we've done with our IP is three D or tort problem.

And then.

These are around 20% glass.

But with that said once again, what it does is it gives us the opportunity in order to reach more of these patients and further build out the market. So if you look at our performance in 2023, we had a great year and that that performance was driven.

Andrew Christopher Ranieri: Got it. And maybe just overall, on some of the newer product launches, including Intra, the small construct, and the trauma product coming out. You kind of expect another robust year of active surgeon ads. Can you be a little bit more specific there, and just how are you thinking about maybe the utilization or underlying utilization of active surgeons improving with some of these newer products? Thanks for taking the question. Thank you.

Higher core market and primary Si joint fusion.

As well.

Jason market, so pelvic fixation, primarily as well as trauma, which is developing but so what we see is this opportunity to more rapidly capture this market opportunity that we've been pursuing for all of these years.

And we're really excited to do it with bulk spine surgeons can interact with us.

And.

It provides a unique.

Laura A. Francis: You need to do both grow the number of physicians that we're working with, as well as increase the number of procedures per physician as well. So, you know, talking about interventional cardiology, by and large, those will be new physicians that are performing the procedure. So it gives us this opportunity. And as I said, there are around 4,500 interventionalists that are targets.

Okay.

Okay.

Andrew to your question on the Opex side.

Majority of our Opex increase is just the commissions the pay increases that come standard as well as some territory expansion that we had always contemplated as we think about a model where we can do $2 million per territory. We've always said in the U S.

On the territories to have a business that can do $200 million of revenue we have.

Ended the year.

Yes.

To do that you're going to have some more training spend as well, but that's across the board between intervention and surgeons, especially with the DJ and opportunity with the 95 granted as well so I wouldn't say that there is any material shift in our in our opex strategy because of <unk>.

Laura A. Francis: In terms of increasing the number of procedures, we have always focused on increasing the number of primary SI joint fusion procedures that our surgeons are performing. And then, with the addition of TORC and Granite, it gave us the opportunity to further increase those numbers, either in our primary market or in our adult development. What our Granite 9-5 product does is it gives us a product that's very specifically targeted toward these degenerative spine procedures. And the market opportunity? There are around 100,000 procedures per year. There are these short construct procedures that go to the sacrum.

All right.

We've just got a lot of opportunities that we've always wanted to go after.

Got it.

Maybe just overall in some of the newer product launches, including a draw those small construct in the trauma product coming.

You laid out you kind of expect another robust year of active surgeon adds can you be a little bit more specific there and just how are you thinking about maybe the utilization our underlying utilization of active surgeons improving.

With some of these newer products. Thanks for taking the question.

Thank you.

We used to do both are growing the number of physicians that were working with.

Laura A. Francis: And so that's our bread-and-butter surgeon that is already doing pervasive SI joint fusion, and now they have the opportunity to perform pelvic fixation with our new Granite product. So a great opportunity to deepen our relationship with our surgeons and increase the number of procedures that they're performing with us quarterly, annually. Thank you. One moment for questions. Our next question comes from David Sachs, and with Needham and company, you may proceed. Great. Good afternoon, Laura Nonchal.

As well as increasing the number of procedures per physician as well so.

Talking about intervention all by and large those will be new physicians that are performing the procedure. So it gives us this opportunity and as I said there is around 4500 interventional.

That our targets too.

Okay.

In terms of increasing the number of procedures, we have always focused on increasing the number of primary Si joint fusion procedures that our surgeons are performing and then with the addition of of torque and was granted it gave us the opportunity to further increase.

Those numbers either in our primary market or in our.

In.

Our granted 95 product does is it gives us a product that is very specifically targeted toward these degenerative spine procedures and the market opportunity there.

David Ryan Lewis: Thanks so much for taking my questions, and congrats on a strong end to the year. Maybe I wanted to talk about TORC to begin with. Laura, in your script, you talked a little bit about Stacy, but I think another TORC study is Saffron, and I think it's nearing enrollment. What should we think about Saffron as it relates to the market development for TORC?

There is around 100000 procedures per year, there the short construct procedure that go to the sacrum.

And so that's our bread and butter.

<unk> the business.

Our already for Lisa that Si joint fusion and now they have the opportunity to perform pelvic fixation.

David Ryan Lewis: Can that trial catalyze TORC adoption, or will it continue to be more of a gradual round? Thanks for the question, David. So on TORC, you're right, the state study was actually specifically engaging interventional spine specialists, implant, and as I said, that's going well. Saffron is actually a study that is engaging surgeons performing sacral insufficiency fractures, and so this is pelvic ring fracture

With our new granite product, so a great opportunity to deepen our relationship with our surgeons and increase the number of procedures that they're performing with us.

Accordingly annually okay.

Thank you.

One moment for questions.

Our next question comes from Zach <unk> with Needham <unk> Company you May proceed.

Great. Good afternoon, Laura natural thanks, so much for taking my questions and congrats to a strong end of the year.

Maybe I wanted to talk about torque to begin with.

Laura A. Francis: It's what we call our trauma product, and I do see a pretty significant opportunity there for us. In terms of what we're expecting, we should have a publication that shows the results from Safran by the end of 2024. We're encouraged by what we're seeing currently with that. And then, in terms of also what we're seeing on trauma, as I said, toward the end of the year, we expect to launch another product this year. And so I think given that these patients that have sacral insufficiency fractures, they're around 120 patients per year in the United States, and they typically are treated in rehab. They're conservative care, and they're typically not treated surgically.

Laura in your script, you talked a little about a little bit about Stacy, but I think another torque study as safra.

And I think it is nearing enrolment so how should we think about safran as it relates to the market development for torque does that can that try all capitalized torque adoption or what kind of continue to be more of a gradual ramp.

Thanks for the question David So on tour Great State study was actually.

Specifically engaging interventional spine spatula.

Implant and as I said, Thats going well SaaS <unk> is actually a study that is engaging surgeons performing sacral insufficiency fractures and so this is how the green fractures, it's what we call our.

David Ryan Lewis: There's a big opportunity that's here for us. We do think the clinical data is going to be really important because of the fact that surgeons typically don't treat these patients. We want to show the efficacy of, in fact, Saffron will be important there, and then I'm not giving much information about the new product, but the new product will be another important part of targeting that particular market. So, really excited about how we're going to finish 2024 in trauma and the opportunity to see that as a significant growth driver in 2025. Great, super helpful, Laura. Thanks for that. This one's probably for Anshul. I wanted to ask about the cadence of revenue throughout the year. Is there anything to call out in terms of seasonality? I think consensus is about 37 million for the first quarter, so down kind of mid single digits sequentially. I think in 23, you were actually up in the first quarter sequentially.

Trauma products.

And I do see a pretty significant opportunity there for us.

Okay.

The pushback thing is to have a publication that shows the results from from SaaS offering by the end of 2024 more encouraged by what we're seeing currently with that and then in terms of also what we're seeing on trauma as I said towards the end of the year, we expect to launch another product.

And so I think given that these patients that have sacral insufficiency fractures there around 100.

Patients per year in the United States. They typically are treated.

In rehab, they're conservative care, they're typically not treated.

Surgically Theres a big opportunity this year for US we do think the clinical data is going to be really important.

The fact that surgeons typically don't treat these patients we want to show the efficacy of <unk> in fact.

Yes.

Zach or will be important there and then I am not giving much information about the new products with this new product will be another important part of of targeting that particular market. So really excited about how we're going to finish 2024 and trauma and the opportunity.

Anshul Maheshwari: So, you know, anything to call out from a cadence perspective and any reaction to that first quarter? Yeah, Dave, thank you for that question. So from a seasonality standpoint, for a company in our stage of growth and innovation, you know, we believe our seasonality in 2024 will continue to be impacted by the timing and pace of the rollout of the products. Not different than what we saw in 2023, where the seasonality was not comparable to what we've historically seen. From a modeling perspective, we don't believe that the auditors show the right way to look at the business, given the initiatives in 2024, but from a modeling standpoint, if you're looking at a proxy, you know, Q1 tends to be about 67% lower than the fourth quarter.

Two.

C that was a significant growth driver in 2025.

Great Super helpful. Laura Thanks for that this one is probably for onshore I wanted to ask about the cadence of revenue through activity throughout the year.

Is there anything to call out in terms of seasonality I think consensus is about 37 million for the <unk>.

First quarter, so down kind of mid single digits sequentially I think in 23, you were actually up in the first quarter sequentially.

Sequentially so.

Anything to call out from a cadence perspective.

And any reaction to that first quarter.

Yes, Dave. Thank you for that question, so from a seasonality standpoint.

For a company in our stage of growth and innovation.

We believe our seasonality in 2024, we will continue to be impacted by the timing and pace of the rollout of the products.

Not different than what we saw in 2023 that the seasonality was not comparable to what we've historically seen.

With respect to we don't believe the selection of the right way to look at the business.

Given the initiatives in 2024, but from a modeling standpoint, if you are looking at a proxy the Q1 tends to be about 67% lower than the fourth quarter. So.

Anshul Maheshwari: So, you know, that's a good enough proxy. And then our focus company is that through execution, we can improve on that. But I would say that the historical trend of 67% is, is, is a good proxy.

Yes, that's a good of a proxy and then.

Lucas company is that execution, we can improve on that but I would say that historical trend of 67% is a good proxy.

Anshul Maheshwari: Great. Very helpful. Thanks, Ben. Okay, great. Thank you. Thank you. One moment for a question. Our next question comes from Sam Berdofsky with Truist Securities. You may proceed. Hey, thanks for taking the question. I guess, just the first one on the short contract launch. Can you kind of just walk us through the puts and takes on that rolling out in 2Q versus the initial longer contract launch? that we saw with Granite, and how should we be thinking about the impact of that versus the initial?

Great.

Versus Q4.

Okay, great. Thank you.

Thank you.

One moment for questions.

Our next question comes from Sam Brodowski with true Securities You May proceed.

Hey, Thanks for taking the question I guess.

First one on <unk>.

The short power short contract launch.

Can you guys just walk us through the puts and takes on that rolling out in <unk> versus the initial longer Comstock launch.

That we saw with granite and how should we think be thinking about the impact of that versus the initial rollout.

Sam Berdowski: Yeah, good question, Sam. So I think that you'll see a more rapid rollout here. First of all, we were a little surprised at how quickly we received Claire. Thank you. Sorry about that.

Yes, good question Sam so.

I think that you'll see a more rapid rollout here first of all we were a little surprised at how quickly we received clear.

Okay.

Thank you sorry about that some technical difficulties Sam I'm not sure what you caught on your question on short construct would you like me to restate that or did you capture most of it.

Operator: Some technical difficulties. Sam, I'm not sure what you caught on your question about short constructs. Would you like me to restate that, or did you capture most of it? I think it would be great if you could just run it back.

I think it would be great. If you could just run it backwards.

Sam Berdowski: Okay, great, great. So a short construct launch. We were actually quite excited about the opportunity that we have with our Granite 9-5 product. The product was actually cleared earlier than we anticipated. Just a great team effort here with our product team as well as our regulatory team. And the clearance, it was a line extension for us.

Great great.

A short contract loss.

Yeah.

We were actually quite excited about the opportunity that we have with our granted 95 product the product was actually cleared earlier than we anticipated.

Just a great team effort here with our product team as well as our regulatory team.

And the clearance.

It was a line extension for us and so we added a couple of different.

Laura A. Francis: And so we added a couple of different areas to the IFU. First of all, this S1 trajectory, which is really targeting shorter constructs, and then also pediatric deformity as well. And to get at your question about rollout, this is a little bit different than the original Granite launch, primarily because the instrument trays that are currently in the field that are meeting our demand for our current Granite business, we will use those same instrument trays. So we already have the trays out in the field.

Areas to the <unk> first of all this <unk> trajectory, which is really targeting a shorter construct and then also pediatric deformity as well and to give US. Your question of rollout. This is a little bit different than the original grant it launched primarily because the instrument.

<unk> that are currently in the field that are meeting our demand for our current granite business. We will use those same instrument trays. So we already have the trades out in the field. The our territory managers have been speaking with our our surgeons on these.

Laura A. Francis: Our territory managers have been speaking with our surgeons on these topics. We are in these hospitals on the approved list, and so we think that this should be a more rapid rollout. And ultimately, the goal is primarily to go after these 100,000 short construct cases in the U.S.

Capex we are in these hospitals on the approved list and so we we.

We think that this should be a more rapid rollout and ultimately the goal primarily is to go after these 100000.

Short construct cases in the U S.

Sam Berdowski: Thanks, Laura. And I just want to add, just in terms of pricing, relative to iFuse, can you level set us there and how that's factored into the pricing guide? I'm sorry, what was the question? Sorry, just in terms of pricing for the new allograft, you just level set us where that is relative to IFUSE. Yeah, from a pricing standpoint, what I would say, Sam, is you've got to think about it as construct pricing in terms of, you know, what a construct would be for a multi-implant primary SI joint fusion procedure. You know, our expectation is that it should be pretty comparable.

Great. Thanks, Ron I'll, just I'll ask one on entry as well just in terms of pricing relative to <unk> can you level set us there and how that's factored into the growth mode.

I'm sorry, what was the question.

Sorry, just in terms of pricing for the new Allograft can you just.

Level set us on where that is relative to <unk>.

Yes from a pricing standpoint, what I would say Sam is you've got to think about it as a construct pricing.

In terms of water construct would be for.

Our multi implying primarily Si joint fusion procedure and our expectation is it should be pretty comparable.

Sam Berdowski: Thanks. One moment for questions. Our next question comes from Caitlin Cronin with Canaccord Genuity. You may proceed. Hi, thanks for taking the questions, and congrats on a great quarter. Just touching on the new focus on interventionalists.

Great. Thanks for taking the questions.

Thank you.

One moment for questions.

Our next question comes from Kevin Cronin with Canaccord Genuity you May proceed.

Hi, Thanks for taking my questions and congrats on a great quarter.

Touching on the new focus on interventional X, so you're training them and lateral procedures. So you're training them in three D and torque and then as the new allograft product employing a posterior approach.

Caitlin Cronin: So you're training them in lateral procedures, so you're training them in 3D and Torque, and then there's the new Allograft product employing a posterior approach. Hey, Caitlin, thanks for the question. We're actually training them with our TORC product for the lateral procedure, and then we are also training them on the Allograft product, typically not the iFuse 3D triangular-shaped implant, given the needs of interventionalists. Got it. And then, so, you know, is the revenue per procedure, would that be, you know, less for an interventional versus, you know, say, a surgeon that performed the procedure?

Hey, Caitlin and thanks for the question, we're actually training them with our torque product for the lateral procedure.

And then we are also training on the allograft product typically not the ICU <unk> triangular shaped implant given the.

The needs of interventional lists.

Got it and then so is the revenue per procedure or would that be less.

Fernando Bank Trust versus say, a surgeon that performed the procedure.

The pricing is similar so.

Laura A. Francis: The pricing is similar, so with the last question that we got from Sam, that was asking about allograft pricing, but the pricing overall is very similar, whether we're selling to interventional or spine surgeons. Okay, got it. And then, just briefly, on the OUS business, what are your expectations for this year? And when do you expect clearance for torque in EMEA? Does that happen?

With the.

The last question that we got from Sam that was asking about allograft pricing, but the pricing overall is very similar whether we're selling to intervention or two.

Spine surgeons.

Okay got it and then just briefly on the O U S business. What is your expectations for this year and when do you expect clearance for torque and does that have.

Caitlin Cronin: Yeah, so, you know, the OUS business, Caitlin, is about 6% of our worldwide revenue in 2023. And when we think about the guide for the year, you know, France was performing really well for us last year, and the recovery in some of the other markets, like the UK and Germany, will take longer than we had previously anticipated. And what our current guidance for the year at 17 to 19 assumes is a low-to-mid single-digit year-over-year increase in international revenue. So, you know, U.S. revenue will be closer to 18 to 20%.

Yes.

So.

<unk> business Gateway is about 6% of our worldwide revenue in 2023.

And when we think about the guide for the year, France has been performing really well for us last year and the recovery from the other markets like UK and Germany.

They will take longer than we had previously anticipated and what our current guidance.

For the year at 17% to 19 does assume is a low to mid single digit year over year increase in international revenue. So U S revenue will be closer to 8% to 20% now the international market is important for us and the team's been doing a lot of work around training new physicians.

Anshul Maheshwari: Now, the international market is important for us, and the team has been doing a lot of work around training new physicians and modifying a go-to-market model, which should reap benefits in 2025. And then, in terms of torque, we are working really hard to get torque into EMEA, which we believe could be a growth driver for the business, but it is likely to be early 2025 when you start seeing any impact from that, just given the regulatory process. Got it. Thank you. Thank you, and as a reminder, to ask a question, please press star one one on your telephone. One moment for questions. Our next question comes from Ross Osborne with the Canterbury Shield.

Modifying our go to market models, which should reap benefits in 2025.

And then in terms of torque.

We are working really hard to get talking to EMEA.

We believe could be a growth driver for the business, but likely to be in early 2025. When you start seeing any impact from that just given the regulatory process.

Okay.

Got it thanks, Jeff.

Thank you and as a reminder to ask a question. Please press star one on your telephone one moment for questions.

Our next question comes from Ross Osborne with Cantor Fitzgerald you May proceed.

Ross Osborne: You may proceed. Hey guys, congrats on the progress and thanks for taking the questions. So maybe just one question for me: would you discuss the pediatric or pulmonary market just in terms of size based on standard of care and where you see grant playing a role? Sure. So, it's small, is a short answer to you. I think the target market size is around 10,000 procedures per year, Ross, and so it's not a big area of focus for us. The opportunity in DGen spine is 100,000, so it's 10 times that size. But we have received inquiries from pediatric deformity surgeons who are interested in pelvic fixation. We wanted to make sure it was an option for them on the label, and so the new Granite 9-5 does provide that for us.

Hey, guys congrats on the progress and thanks for taking the questions. So maybe just one for me would you discuss the pediatric deformity market just in terms of size. The current standard of care, where you see <unk> playing a role.

Sure. It's solid it's small is.

Short answer to you I think the target market size is around 10000 procedures per year, Ross and so it's not it's not a big area of focus for us.

The opportunity in Dijon spine is is 100000 thoughts 10 times that size, but we have received inquiries from pediatric deformity surgeons, who are interested in pelvic fixation. We wanted to make sure. It was an option for them on label and so the new granted.

95 does provide that for us.

Laura A. Francis: Thank you. Now, I will turn it over to Laura. Thank you so much for your time. I really apologize for the technical problems. I hope that we've given you all of the answers that you needed. As I said earlier, we were thrilled with the year that we just came off and really excited about 2024 with all the new opportunities in front of us and building on the momentum that we generated in 2023. So thank you again and goodbye. Thank you for your participation. You may now disconnect.

Thank you now I will turn it over to Laura.

Thank you so much for your time I really apologize for the technical issues I hope that we've given you all of the answers that you needed a as I said earlier, we were thrilled with the year that we just came off of and really excited about 2024 with all the new opportunities in front of us and building on the momentum.

We generated in 2023, so thank you again and goodbye.

Yeah.

Thank you for your participation you may now disconnect.